The Journal of American Academy of Business, Cambridge
Vol. 1 * Num.. 2 * March 2002
The Library of Congress, Washington, DC * ISSN: 1540 – 7780
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The Virtual University: Is It A Panacea Or A Pandora’s Box?
Peter Drucker, the visionary dean of modern management experts, declared that in several decades “The big university campuses will be relics and the residential university is destined to yield to the virtual university.” Increasingly, the virtual university system is being packaged as a panacea. Could it be that the virtual university may prove to be the Pandora’s box in a society where individuals mostly lead isolated life away from parents and extended families? This study first explores the benefits of graduating from the virtual university from both an economic and convenience perspective. Then the researcher evaluates its possible detriments against concepts drawn from social psychology. The fundamental question is whether there is enough evidence that students of online education systems might somehow run the risks of “dehumanization,” endure possible setbacks due to “deficient group experiences,” and be affected by “deprivation dwarfism” in their development toward maturity. With the advent of the personal computer, which ushered in the Internet, there seems to be a revolution in performing both ordinary and extraordinary tasks. One area which has been lately receiving a great deal of attention is the online education. While almost all new ideas and innovations attract controversy, cybereducation has had its lion’s share of hotly debated arguments in recent years. Hardly a day passes without seeing a periodical that had published a pro or a con position article on this raging controversy (Johnstone 2001). Peter Drucker, the visionary guru of modern management thought, predicted that in several decades “The big university campuses will be relics and the residential university is destined to yield to the virtual university.” (Macchiette and Roy 2001). At the turn of the millennium, over 1 million students were enrolled in classes and this number is anticipated to double within a couple of years. Some prestigious institutions of higher learning are hopping on the bandwagon of online education, reminiscent of a bunch of pariahs in a feeding frenzy. John Chambers (CEO of Cisco Systems), one of the guests of Lesly Stahl on “60 Minutes” (Sunday, February 18, 2001) have expressed a resounding opinion by saying that “Even Harvard, Yale, and Stanford have to change. If they do not teach online, they would not exist any more.” Is this overblown crystal ball gazing? Perhaps, but the opinion typifies the torrential optimism shared by many administrators and educators in favor of online education. Against the backdrop of increasing numbers of traditional institutions providing online education (Gerencher 1998; Katz 1999; Jones and Pritchard 2000), the controversy has focused on the question of whether the virtual university, junior or four-year college or any kind of school is the viable alternative. Central to the debate is the criticism that institutions of higher learning are marketing education into a standardized, commodity-like product to be sold for a profit. Marchese (1998) contends that there is an abundance of niche markets to render an optimistic future for online education, while others, like Noble (1998), offer strident objections to the high tech transformation of education. While the debate has been raging from the economic and convenience perspectives (Abeles 1998; katz 1999; Johnstone 2001), there has been no discussion of the impact of an online education program on the student from the social psychological point of view. After all, the most important stakeholder of online education is the student. The subject of cybereducation needs to be seriously addressed not only in terms of its benefits to the education provider, but also in terms of the inherent dysfunctions of this system vis-a-vis the well-being of the students. It would be appropriate to note that the term “university” is used here in its generic term, meaning any school offering courses and diplomas. Thus, a university is a universal school in which are taught all branches of learning in the various disciplines of business, engineering, theology, medicine, law, political science, etc. The purpose behind writing this research paper, is first to explore briefly the benefits of attending a virtual university environment from the economic and convenience standpoints. Then, this innovation of distance learning is evaluated against concepts drawn from social psychology in order to raise consciousness about possible detriments of obtaining a degree from a virtual university. The fundamental question to pose is whether there is enough evidence that the students in online education systems would be subjected to and may be harmed by the problems of “dehumanization,” from the deficiency of “group experiences,” and from “deprivation dwarfism.” Finally, recommendations for further study are presented. Most of the economic and convenience benefits of online class are rarely disputed. Moreover, the benefits of online education are quite self-explanatory and have been well documented. Therefore, they will receive only a very cursory coverage. The spacial or geographical attributes of online education cannot be overemphasized. Advocates of online classes point to the convenience of taking a course from anywhere in the country. Without any residency requirements, students from all over the world could enroll in courses. Linking the world through education is a noble ambition (Nadalyn 1999). Arguably, it provides a special advantage of immense importance. The world becomes one large campus through the Internet. Shrinking the world through distance learning is perhaps the main advantage of this new technology. The temporal flexibility is another major benefit of online education. Essentially, it offers choice of time to the student. A student can study whenever he or she wants, whereas in traditional campus environment lectures are given at specific times on certain days about specific topics. Another hallmark of online education is learning through repetition. The advantages of repetition are invaluable. While in traditional classroom a lecture is normally delivered once on a scheduled day, online education provides innumerable opportunities to the student to hear the same lecture over and over again. Repetition is obviously an unalienable benefit of online classes. Cost (e.g., tuition, activity fees, housing, parking, etc.) of online education apparently would be lower in certain areas. For example, there will not be any activity fees or parking fees . Since a traditional classroom has usually a maximum seating capacity mainly due to comfort and fire hazard regulations, the online class could accommodate thousands and thousands of students through the Internet. Generally speaking, such a voluminous student enrollment would tend to drive the tuition costs lower. There are some exceptions, though. Some institutions opt to charge even more. For example, Duke University’s online MBA degree would cost about $70,000. Compared to the benefits of online education, its dysfunctions are not obvious. In the next section, the major problems inherent in online classes will be discussed. While standardizing and treating education as a commodity for profit are the downside aspect of online class, these drawbacks are mainly the professional aspects of the problem. These problems are discussed by Noble (1998). Here the focus is on the social psychological implications of this recent innovation in education.
Cross-Cultural Differences in Styles of Negotiation Between North Americans (U.S.) and Chinese
Increasing interdependency of world economies and globalization of enterprises characterizes business in the 21st century. Successful negotiation in this environment requires special attention to cultural differences. This study investigated the question, “Is there a difference in the preference for negotiation styles of subjects based on their culture, the type of conflict situation, and/or the individualism vs. collectivism of their beliefs?” A total of 100 MBA students from medium-sized U.S. and Taiwanese universities comprised the sample. Culture was either Taiwan or American. The conflict situation was either a business or close-friend scenario; and individualism ranged from low or high. The research design involved a multivariate comparison of negotiation style preference based on combinations of three dichotomous independent variables. A composite questionnaire was used to measure the five negotiation style preferences (accommodation, collaboration, withdrawal, competition, and consultation), as dependent variables, and the five demographic variables (gender, marital status, job status, ethnicity, and age) Results tested for alpha < 0.05 indicated that: a) culture differentiated a preference for withdrawal and consultation, b) scenario differentiated a preference for accommodation, collaboration, withdrawal, and competition, c) individualism differentiated a preference for competition, and d) culture combined with individualism differentiated a preference for consultation. All other combinations of independent variables and other negotiation style preferences were not significantly different. These results will be of special interest to U.S. companies doing business in Taiwan and vice versa. Recommendations for further research include replication of this study with a larger sample and /or a more demographically diverse Taiwanese group of respondents or a more homogeneous group of U.S. respondents. Global markets, multinational enterprises and interdependent world economies will characterize the 21st century, and no country can be isolated from global villages (Nathan, 1997). Interest in studying the effects of cross-cultural differences on negotiation style is growing (Tse, Francis & Walls, 1994; Tung, 1984). Cross cultural negotiation processes and outcomes have become a source of scholarly interest as well as a practical interest for corporations with worldwide holdings and operations (Drake, 1994). U.S. and other companies with foreign interests are concerned with how to efficiently and effectively approach expansions, mergers and acquisitions, and licensing or distribution agreements across cultures (Hendon & Hendon, 1990; Harris & Moran, 1991). Studies have suggested that people from different cultures use different negotiation approaches, and they do so because of differences in their perceptions of the decision-making situation that are conditioned by the characteristics of the national culture from which they come (George, Jones, & Gonzalez, 1998). For example, Ting-Toomey (1988) and Tse, Francis and Walls (1994) proposed that people from collectivist cultures bring to the bargaining situation a different set of attitudes and values than people from individualistic cultures, that cause them to adopt different bargaining approaches. How professionals approach these cross-cultural negotiations is considered vital to a company's business success. Until recently, international businesspersons have relied upon conventional beliefs regarding "typical" cultural differences to guide their behavior in cross-cultural negotiation interaction (Drake, 1994). This study will examine how cultural differences, individualism-collectivism, between a North American country (U.S.) and an Asian country (China, including both Mainland China and Taiwan) influence the styles of negotiation preferred by members of these two cultures with in two different situations of conflict: in a business transaction conflict and in a conflict with a friend. These two conflict situations are chosen because they can reveal how a collectivist culture (Mainland China and Taiwan) and an individualist culture (U.S.) negotiate with ingroup members (friends) and outgroup members (business transactions). The styles of negotiation model used will be the four conflict-resolution styles of the Dual Concern Model (Rubin et al., 1994): accommodation, collaboration, withdrawal, and competition, plus consultation and third party advocacy. The Dual Concern Model conceives of each negotiation style as a combination of high/low concern for the self and high/low concern for other (Pearson, 1995). For example, accommodation is a negotiation style that reflects a combination of low concern for the self and high concern for others, while competition is a negotiation style that reflects a combination of high concern for the self and low concern for others (Figure 1). The current study compares Chinese and American negotiating behavior by analyzing these combinations of high/low concern for the self and high/low concern for others. The predicted differences between Chinese and Americans’ preferred negotiation styles are thought to be a function of the cultural dimension of individualism-collectivism.
This paper focuses on experiences of a finance faculty in an attempt to use Web-based instructional material to enhance student performance in his classes. The discussion highlights the experiences gained in designing and operating course web pages. The pedagogical issues and teaching methodology relating to student participation, satisfaction and the consequences of decisions regarding the above issues are analyzed. Costs and benefits of Internet course integration are also discussed. Lessons drawn from the above experiences and strategies for future success are explored. The fast pace of development of content on Internet and corresponding increase in access to internet-based material has altered the technological environment of higher education. There are two extreme approaches to dealing with this change in the technological forces that affect higher education. On one extreme, there are those who envision the future dominance of a non-traditional distant learning mode of delivery based on Internet ("the Internet-university approach"). According to this view Internet will replace the campus, exclusively serving as a medium for delivering courses, as a virtual classroom, and as a place for interaction between professors and students (or students with each other). On the other extreme, there are those educators who view the Internet as a library of material that would affect education in a way similar to a traditional physical library. This view predicts that Internet does not change the educational environment to such a degree that a finance professor, an accounting, or any other professor (except perhaps one teaching information systems) has to fundamentally change her teaching technique. That is, under this approach, one may continue with the business of higher education without a fundamental change in teaching technique. In other words, since there are no interactions between this technological change and different factors that affect the learning process, one may continue with the business of teaching without a fundamental change in approach ("the business as usual approach"). the internet-university approach fails to recognize the educational value of a living community of learner-scholars. A critical mass of students, faculty, scientists, and scholars living on or close to campus (in case of students, preferably together in dorms) is central to learning in higher education. Students and faculty living off campus but spending most of their working time on campus personally interacting with each other and learning from each other is also a second best solution (i.e., a commuter university). What is gained here is a way of life, motivation based on seeing how others struggle, strive, and achieve learning. The ability to mimic others, be inspired, and rob elbows with faculty at the cutting edge of a field and with students with sharp, naïve, yet innovative questions and comments that provide feed back and perhaps inspire change. Obviously, there is a value and a place for non-traditional education. Non-traditional education allows geographical, time, and price flexible delivery of education at the cost of forgoing the educational value generated by belonging to a physical community of learner-scholars. In other words, the issue is quality. That is, once the full-time living community of learners- scholars is forgone, there are no examples of higher education products at the cutting edge of a field such as a University of Chicago Ph.D. or a cutting edge applied set of skills such as a Harvard MBA. However, there are a large set of skills outside of the cutting edge of innovation, research, and application that can be delivered without a need for interaction within a community of learner scholars. That is, non-traditional education trains and prepares students that often already work full-time, providing them with a set of skills and preparation that they maybe lacking. A degree of excellence in education, learning, and preparedness at the level that a California Coast Ph.D. or a Nova Southeastern or University of Phoenix MBA provides is perhaps a fair and typical upper limit on what nontraditional education can achieve. At the very least one can set aside the extreme idea that the Internet will drive the traditional university out of business for the near future. However, accepting this thesis does not mean that the business as usual approach regarding the effect of Internet technology on higher education learning should prevail. That approach fails to see the Internet as a strong environmental force that affects and interacts with higher education learning process. In a world with Internet as a technological force, the community of learner-scholars faces a different set of opportunities and problems. This paper focuses on these specific issues and attempts to highlight the interaction between the Internet technological change and higher education learning. Section II provides an analysis of specific experiences gained from an attempt to enhance business teaching with internet-based instructional material. These experiences are discussed and related to specific ways to use web-based instructional materials to enhance teaching method. As Internet became a strong technological force in 1990's, the authors attempted to enhance their MBA and undergraduate business teaching with internet-based instructional materials. The first steps involved posting lecture notes on the Net. Positive student comments on formal teacher evaluations, informal midterm assessment surveys and other student communications lead to posting of a whole laundry list of instructional material on the Net. These included syllabus, sample exams, homework solutions, and instructions and comments on MBA case studies. So far the authors' treatment of Web enhancement of their courses was one of " business as usual" approach as described in section I.
An Examination of Money Laundering Prevention in the U.S.
Dr. Turan Senguder, Nova Southeastern University, Ft. Lauderdale, FL
The main issue with money laundering activities is that no taxes are paid to the government from those illegal financial gains. Most of the time banks are used to make this type of illicit financial gain legitimate because banks do not properly maintain concentration accounts and do not identify beneficial owners of offshore accounts. Therefore, new laws are needed to close loopholes. Highly publicized cases involving money laundering demonstrate the importance of federal supervision and bank vigilance in money laundering areas. While it is impossible to identify every transaction at an institution that is potentially illegal or involves illegally obtained money, financial institutions must take reasonable measures to identify such transactions in order to ensure their own safe and sound operations and their reputations. Therefore, in October of 1970, Congress enacted the statute commonly known as the Bank Secrecy Act, or BSA. The BSA authorized the Secretary of the Treasury to require banks to report cash transactions over $10,000 to the Department of the Treasury. In addition, the BSA requires domestically set up financial institutions to keep records that are determined to have a high degree of usefulness in criminal, tax, and regulatory matters and to implement programs and compliance procedures to counter money laundering (Schuck & Matthew, 1996). The BSA is a vital component of the United States’s anti-money laundering efforts. The statute and its implementing regulations work because of the necessary cooperation between the Government and financial institutions. It would be almost impossible to construct an effective system for detecting money laundering and preventing criminals from using the financial system without cooperation from financial institutions. For over a decade, institutions have filed reports that have been effective tools in the detection, investigation, and prosecution of illegal activity that can damage communities, ruin lives, and cause considerable financial losses to institutions. While the BSA has not completely eradicated money laundering or other financial crimes, it has been a deterrent to large-scale money laundering activity in covered financial institutions. Over the years, money launderers have became more sophisticated and smurfing activities started to emerge. Smurfing is a process of employing low level employees of the exchanger to structure large pools of illicit drug money into an amount below the Bank Secrecy Act reporting threshold of $10,000 by either depositing it into bank accounts, or purchasing bank checks or money orders, thus evading the requisite Currency Transaction Report (CTR). The deposits, money orders, or other negotiable instruments purchased through this process are sold through the Colombian Black Market Peso Exchange to businessmen and others in Columbia who are in need of U.S. dollars. U.S. currency is then delivered to U.S. businesses engaged in the export of goods to Colombia (James, 1999). The BSA has not completely eliminated money laundering or other financial crimes. Congress responded with the Comprehensive Crime Control Act of 1984, which implemented the reporting requirement connected to the receipt of more than $10,000 in a trade or business. Congress followed this with the Money Laundering Control Act of 1986 (MLCA), which specifically criminalized money laundering, and also passed related asset forfeiture statutes. The MLCA criminalized the “structuring” of currency transactions to evade reporting requirements and established criminal and civil penalties in connection with these violations. The MLCA has resulted in the filing of a large number of Currency Transaction Reports (CTR). Unlike earlier unsuccessful efforts to control the movement of illegal income through financial institution reporting requirements, the MLCA is aimed directly at the lifeblood of organized crime: the act of converting funds derived from illegal activities into a liquid or useable form. Also, the MLCA defines and prohibits a category of activity known as “money laundering.” The Act not only affects the proceeds of conduct characteristic of organized crime, such as narcotics trafficking, but also encompasses a wide range of additional criminal offenses including trading with the enemy and conducting financial transactions with intent to engage in violations of the Internal Revenue Code (Camelio & Pergment, 1998). The MLCA targets transactions conducted through financial institutions and reaches a broad variety of routine commercial transactions that affect commerce. One of the principles of the Act is to bar all monetary transactions in criminally derived property. Although the proceeds of crime historically have been subject to seizure by warrant for use as evidence, the Act makes the subsequent use of criminal proceeds in any transaction illegal in perpetuity. The Money Laundering Control Act consists of two sections, section 1956 and section 1957. Section 1956 addresses the knowing of intentional transportation or transfer of monetary funds derived from specified unlawful activities, while section 1957 addresses transactions involving non-monetary property derived from the specified unlawful activities. Section 1956 has a few subsections. Those subsections address domestic money laundering and prohibits participation in transaction with knowledge that the transaction involves the proceeds of criminal activity. Some of these subsections involves the prohibited transactions (Public Law Report, 1995).
Employee Retention: Approaches for Achieving Performance Objectives
Dr. Jean Gordon, Barry University, FL
Dr. Bill Lowe, Fire Department, GA
As business enters the dawn of the new millennium, it has become more complex than at any other point in the history of mankind. In today’s fast paced world of International Business, impossible deadlines, increased costs and high stress levels, more and more corporations find themselves in the position of confronting their biggest challenges yet. There are three questions worried managers ask about their organizations collective futures: Has a new competitor entered the marketplace? Has a new technology found its way onto the market without us knowing about it? What is the fear that shakes today’s corporations to their foundations? In simple terms, the threat is coming from within the organizations themselves. The threat most feared by executives has begun to rear its ugly head on the corporate landscape – Employees are leaving corporations in record numbers and loyalty seems to be a thing of the past. The challenge for corporations in the 21st Century is their ability to recruit and then retain their most valuable resource – employees. Imagine if you will, that it is Monday morning and you are sitting in your office enjoying that first cup of coffee contemplating what your day will be like. Everything is going well: your phone messages are clear, there is nobody waiting at your door telling you that they need this or the world will end, and your inbox is actually empty. You can start the week out fresh. You then decide to turn on your computer and check your email. Big mistake! It has finally happened to you and the only thing you can do is stare at the blinking cursor. One of the brightest stars in your corporate galaxy has just emailed you a resignation notice. You get your thoughts together and try to develop an action plan to keep the employee, but alas all of your efforts will be in vain – you are too late before you begin. The game is over. Over the last decade or so, the scenario described above has played itself out in countless offices across the corporate landscape. Each time, the organization is left wondering what went wrong, then a voice from deep inside the manger’s head says: Welcome to the 21st Century, please fasten your seatbelts and try to enjoy the ride. These are confusing times as the baby boom generation attempts to attract the elusive Generation X to the workforce. But we can all take comfort in that the post-World War II generation had an equally tough time relating to us as we entered the workplace with idealistic views that focused on anti-Vietnam themes, the Peace Corps. And political thoughts that appeared confounding to the “establishment” (Hodes). Today, more than any other time in recent history, corporations have to take stock of their employee bases. Human resources management has emerged as a highly paid specialization that garners large volumes of respect and revenue from organizations in today’s “grass is always greener on the other side” environment. In recent years there has been an increasing focus on the trends influencing employee retention. Corporations have placed a premium on the information associated with their employee’s satisfaction. Walker Information conducted one of the largest employee retention studies in 1999. The study showed 33% of all U.S. employees do not intend to stay with their employer in the next two years. The unanswered question is simple, Why do good employees leave? The study offers this perspective: Less than half of employees (45%) feel a strong attachment to their organization or believe that their organization deserves their loyalty (42%). One in three employees (33%) is considered High Risk (employee is not committed to the organization and does not plan to stay for the next two years), and Four in Ten are “Trapped” (not committed to the organization, but plans on staying at the organization for the next two years) (Walker Information). There is urgency within corporate culture to find the “Hot Button” of today’s employees – what makes them loyal (if anything) and what makes them want to contribute to the organization for the long haul. In other words, how do companies attract and retain the best talent available? Bottom line – You are in a war for talent! The only success barometer is Whether you or your competition has the best talent. Period. End of Story. Talent retention (along with staffing) continues to be the #1 concern for CEO’s Around the globe. NetSpeed example: for the second year in a row, the #1 Corporate priority from the desk of Mitchell Dell, CEO of Dell Computers, is … TALENT – finding it and keeping it! (Harris, Jim) An entire industry has evolved around this question of employee retention. Millions upon millions of dollars are spent by organizations throughout the world in trying to motivate and keep their employees happy. Numerous web sites offer corporate managers insight into the mind of employees. Opinions and suggestions vary as to why employees might leave, and what motivates employees to stay are offered up by individuals and organizations specializing in the field of human resources.One such company is Keep Employees, Inc. (KEI). According to the company, employee turnover is costing companies in the United States more than $140 billion annually in recruiting, training and administrative costs. Employers implement a wide assortment of programs to try to keep good employees. Studies show these efforts do not have an equal impact on retaining employees. There is a science to keeping employees happy and on the payroll. Employee retention begins in the hiring process itself. Organizations need to begin by hiring those people who are likely to be successful and happy within the organization. Additionally, the retention process should support the satisfaction and success of the employee within the organization. KEI has identified three dominant factors influencing employee decisions to remain with their current employer:
Validation of the Healthy Work Organizations Model
Dr. James Browne, University of Southern Colorado, Pueblo, CO
This article extends the research on work-related stress and employee well-being previously published under the rubric of organizational health by validating the Healthy Work Organizations (HWO) model proposed by researchers at the National Institute for Occupational Safety and Health (NIOSH). The HWOs model links three dimensions of organizational characteristics (i.e., management practices, organizational climate, and organizational values) to indicators of organizational health at both the level of the organization and individual employee. This research meaningfully extends prior empirical work on the HWOs model (Sauter, Lim and Murphy, 1996; Lim and Murphy, 1997) by validating construct measures of the model's three dimensions of organizational characteristics and examining the influence of these characteristics on organizational health for three occupational groupings of employees (i.e., maintenance/production, technical/administrative, and managerial/professional). The ability of the HWOs model to link characteristics of healthy organizations with organizational-level and individual-level outcomes is supported and implications for primary stress-prevention strategies are discussed. The impact of the industrial work environment on worker health and safety has been recognized since the advent of the industrial revolution. During much of this century occupational accidents and disease were attributed to unsafe work practices, poorly engineered tools and machines, and unhealthy working environments resulting from workplace toxins. However, the trend in the study of worker health in the post-industrial era has been to also recognize the influence of psychosocial factors on employee well-being (Levi, 1983).The negative effect of occupational stress on employee health was not recognized as an important area of study until the 1960s (U.S. Department of Health and Human Services, 1966). Since the 1960s, the role that work-related stress plays in promoting chronic and debilitating disease (e.g., cardiovascular heart disease) has become widely recognized (Kahn et al, 1964; Pelletier, 1977). Much research since the 1960s has focused on either the level of the individual or the job. Examples of individual-level factors that have been related to worker stress include introversion/extroversion (Zuckerman, 1979), stress-coping ability (Everly and Feldman, 1984; Vernarec and Phillips, 2001), and Type A behavior (Cooper and Payne, 1991). Research has established the roles that job characteristics play in work-related stress and their subsequent effect on employee health (Levi, 1983; Murphy, L., 1984, and Sauter, Hurrell and Cooper, 1989; Murphy, Hurrell and Sauter, 1995; and Varhol, 2000). Examples of job-level factors that significantly impact worker stress include: physical and temporal working conditions (Cooper and Smith, 1985), work overload (Skov, Valbjorn and Pedersen, 1989), worker control (Karasek, 1979), and role ambiguity and role conflict (Cooper, Mallinger and Kahn, 1978). A gradual shift in the focus of stress researchers has occurred during the last ten years. Research has begun examining the impact of work-related stress on employee well-being within the broader context of organizational health (Cox, 1988; Rosen, 1991; and Murphy, 1996). Organizational health comprises two factors: the performance of the organization (e.g., profit, productivity and competitiveness), and worker health/satisfaction outcomes (e.g., the worker's physical and mental health and worker job satisfaction) (Jaffe, 1995). An emerging concept of organizational health has recently appeared under the rubric of Healthy Work Organizations (Murphy, 1995; 1996). A Healthy Work Organizations (HWO) is defined as an organization “which maximizes the integration of worker goals for well-being and company objectives for profitability and productivity" (Sauter, Lim and Murphy, 1996). Healthy Work Organizations (HWOs) are important in the development of a national strategy to prevent the negative effects of occupational stress on employee well-being (Quick, Murphy and Hurrell, 1992; Sauter and Murphy, 1995). As shown in Figure 1, the HWOs model integrates the two factors identified by Jaffe (i.e., organizational performance and worker health/satisfaction outcomes) and recognizes that organizational health is influenced by three dimensions that comprise a variety of organizational characteristics (i.e., management practices, organizational climate, and organizational values) (Murphy, 1996). Sauter, Lim, and Murphy (1996) operationalized these organizational dimensions through development of several scales and single item survey questions relating to each dimension. The work of these researchers contributed to the growing knowledge of healthy work organizations in two important ways. First, the existence of these three organizational dimensions was confirmed via the researchers' analysis of 1993 data from an organizational effectiveness study of a large manufacturing company based in the United States. Second, the ability of the HWOs model to relate dimensional characteristics of a healthy work organization to organizational health outcomes was supported. The robustness of the management practices dimension f the HWOs model has proven useful in identifying human resource management practices that simultaneously correlate measures of organizational outcomes and measures of employee well-being (Browne, 2000). Despite the promising research that has been conducted using the HWOs model, the dimensional characteristics of the model have yet to validated..The present research will attempt to replicate the preliminary findings reported in 1996 by Sauter, Lim, and Murphy and to validate the HWOs model’s ability to predict organizational health outcomes. Data from two different time periods (i.e., 1993 and 1995) within the same organization will be analyzed. In addition, the ability of the HWOs model to explain organizational health outcomes will be tested on three different occupational groupings (i.e., maintenance/production, administrative/technical, and managerial/professional) within the same organization. Toward this end, four hypotheses will be tested in this study.
Cross-Cultural Issues in Internet Marketing
Dr. Robert G. Tian, Erskine College, SC
Dr. Charles Emery, Lander University, SC
The development of Internet has generated strong impacts on marketing world widely; at the same time the Internet together with many other factors fastens the process of the globalization. To be aware of and sensitive to the cultural differences is a major premise for the success in the world marketplace. This would apply to both traditional marketing and the new electronic based Internet marketing. This paper is an examination of "borderless" on line markets where marketers are able to do the business without boundaries but cross-culturally. It discusses and analyzes several key cross-cultural issues in the Internet marketing imperative from an anthropological perspective. By examining the social-cultural functions in the interactive marketing process the authors tend to construct a cross-cultural approach to Internet marketing. It is undeniable that any types of advancement of technology have generated certain effects on marketing; they provide great potential benefits to the marketers while create series problems. The communication superhighway or the Internet, apart from reshaping the business environment, is providing opportunities and challenges to marketers. As Bandiwadekar (2001) notices, exporters, importers, international brokers and others can exploit the many advantages the Internet offers to sell effectively at a very low cost. The Internet not only makes it easier to obtain quality secondary and primary marketing information as well as providing value to existing products or services; also it helps developing marketing channels and strategies. In fact, the Internet today is considered an increasingly important factor of the marketing mix. It was claimed that the advent of the Internet is the most exciting marketing innovation in history. Accordingly a new marketing area, the Internet Marketing, becomes a hot topic for professionals both in academics and in practices (Paajanen & Allington 1999). The Internet together with many factors, such as the advanced transportations, fastens the process of the globalization. However, it is notable that in recent years as the world becomes globalized many national states have claimed "a right to culture" in international businesses. It is further predicted that national culture will be one critical factor that affects economic development, demographic behaviour, and general business policies around the world. Such claimants could be important criteria for trade policy making, intellectual property rights protection, and the resource for national benefits. The last summit of francophone nations in the 20th century called for a "cultural exception" in GATT/WTO rules governing trade of goods. The claims will not only affect public policy in these nations but international trade rules. It might initiate a worldwide cultural protectionism for trans-national trading while we are approaching the globalization economically. From a marketing point of view it is very important for marketers to realize that as the globalization the cultural imperative is upon us; markets today are world and yet cross-cultural markets. To be aware of and sensitive to the cultural differences is a major premise for the success in the world marketplace. Failure at implementation marketing strategy in the cross-cultural context can ignite a backfire that consumes existing brands and business relationships (Tian 2000a). This would apply to both traditional marketing and the new electronic based Internet marketing. If the globalization is an inevitable process, then the cross-culturalization will also be inevitable. On the one hand, the world is becoming more homogeneous, and distinctions between national markets are not only fading but, for some products, will disappear altogether. This means that marketing is now a world-encompassing discipline. However, on the other hand, the differences among nations, regions, and ethnic groups in terms of cultures are far from distinguishing but become more obvious. This means that global/international marketing is a cross-cultural process which requires marketers must be well informed with cultural differences nationally, locally, and ethnically to be the winner in the global markets. With no exceptions that the Internet marketing is bound to face the cross-cultural issues even though it is a relatively new concepts for the marketers. Previous research on the Internet marketing issues has focused on the techniques and the homogeneous features of the phenomenon, few studies have shed lights on the significance of cultural differences in the internet marketing (Abramson & Hollingshead, Paajanen & Allington 1998). On the other hand, there is a larger body of literature on cross-cultural issues but not many take the theme of Internet marketing into consideration (Giovannini & Rosansky 1990; Harris & Moran 1987). Jin et. al. (1998) realize the cultural differences between US and China in their discussion of using Internet and groupware technologies to bridge these differences, but they failed at answering how to overcome the problems generated from cultural differences to the business let alone dealing with cultural issues in transnational marketing through the Internet.
Political-Economy Considerations when Doing Business in Emerging Economies
Dr. Jaime Ortiz, Florida Atlantic University, FL
There are basically two government policy instruments that shape business strategy during the corporate expansion in emerging economies. However, political considerations determine, ultimately, the effectiveness of government intervention in translating their impacts into sustainable corporate revenues. Misleading strategies can be adopted by local subsidiaries when price policies and publicly funded technical innovations are assumed exogenous to the policy-decision making process and are treated independently from the political factors that affect them. Consequently, this article provides a theoretical framework for a better understanding of the business performance in emerging markets as a result of collective action exerted by two competing interest groups. Governments intervene in the private sector in a variety of ways and with differing intensities accross countries (Egelhoff, 1988). In emerging economies the pattern of government involvement in private corporate activities ranges from strong price subsidization to heavy income taxation (Havrylyshyn and van Rooden (2000). Government intervention results in various allocative and distributive effects that have stimulated discussion about the determinants of policy decisions. Several studies have attempted to analyze the political and institutional factors that influence institutional decision-making formation. Among these studies, Burnetti and Weber (1997) and Scott (1995) develop an analytical framework to explain and forecast institutional behavior. Their framework is mainly based on the view that economic markets can not be viewed as separable from the political markets and that pure transfers among interest groups do not exist. Given these premises, collective action exerted by politically ascendant interest groups seeking to enhance their own welfare influences the government's choice of economic policy instruments Becker (1983). As a result, the endogenizing of government policies and the integration of political and economic markets are required to anticipate business performance. Authors like Porter (1986) have highlighted the effects of the opportunistic behavior of various interest groups and the functioning of markets when addressing the creation of national competitiveness. Despite the economic inefficiencies that opportunistic behavior may create, special interests often prevail because of their political power (Kim and Mauborgne, 1993). Political coalitions are formed to create or countervail potentially redistributive effects embedded in macroeconomic policies. To represent the strategic behavior of governments and two interest groups, Cukierman et al (1992) develop a model in which equilibrium outcomes are obtained in political and economic markets. The support received by governments from each interest group is reflected by their level of economic welfare obtained and the efforts spent by each political organization in serving its clients' collective interest. Alternatively, Tirole (1994) casts investment in political influence by two competing and non-cooperative interest groups. He suggests that a social equilibrium between entrepreneurs and consumers/taxpayers results from their political activities. This article offers an explanation of the effects of public financial support on private sector activities within a public choice context in which two policy instruments are jointly endogenous and, therefore, analyzed simultaneously. This joint analysis is relevant for emerging economies where decisions about price policies are made by the same governmental agency that funds the innovation production and diffusion process. Public-sector research investments would then be justified on the grounds of Amarket-failure@ in the private provision and funding of research and development. The impacts on entrepreneurs and consumers /taxpayers in choosing price and technology development policies are then identified and discussed from a business performance perspective. The proposed framework assumes that entrepreneurs and consumers/taxpayers are homogeneous, and that minimum or maximum prices to entrepreneurs ( PP ) and the level of public expenditures in technical innovations ( IP ) are the only policy instruments available. These policy instruments are assumed to be simultaneously formulated by policy-makers given the existing political structure of each interest group (King et al, 1994). Policy-makers decide about the optimal level of expenditures on each policy instrument by taking into account political pressures of constituency groups and alternative levels of deadweight losses that may occur through intervention in different markets. This bargaining behavior model between interest groups and governments includes a few distinctive features. First, no a priori assumptions are made about the effects of price policies at the firm level and technological expenditures on the well-being of entrepreneurs and consumers/taxpayers. Consequently, price policies and technology funding are analyzed on efficiency grounds where subsidies (taxes) implicit in minimum (maximum) prices and investment in research and development are exclusively motivated by a welfare-maximizing state. Second, the conceptual framework presented in this article focuses on emerging economies which are characterized by a lesser inability to influence prices in world markets. Therefore, alternative price-elasticities are specifically included to account for a variety of market conditions and changes in the degree of openness of those economies to international trade. Elasticities of supply and demand affect the welfare implications of the policies and thus influence the optimal combination of government pricing policies and publicly-sponsored technological efforts. Third, the management of the budget and especially the overall budget balance play a major role in the economic policies of any government. In this representation, the government budget spent on promoting private sector activities is assumed to be exogenously set by political authorities. Within each economic sector or industry, however, the allocation of public funds is endogenously determined for each policy instrument by a combination of economic and political variables. Finally, the model explicitly recognizes product and process innovations as a variable within the underlying technology available to business individuals. The technology set not only includes technologies produced inside the corporate /environment but also international research and development technologies as well as some other economic and political variables referred to here as state variables.
Clustering of Tourist Resorts Visited by GCC Consumers
Dr. Abdulla M. Alhemoud, University of Qatar, Qatar
Cluster analysis was applied to results of a survey conducted in three capital GCC cities in 1999 to identify resorts with similar attributes that are often visited by Gulf tourists. By examining the main characteristics of these resorts, it may be possible to target future-marketing strategies more efficiently. Multiple discriminant analysis was used to describe the nature of the differences between clusters and to test these differences for significance. The results suggest that tourist resorts visited by Gulf consumers can be clustered into four groups. The first group includes resorts in Morocco, Tunisia, and South East Asia. The second group comprises Egypt, Lebanon and Turkey. Included in the third group are Spain, UK, France and other European resorts. Finally, Group four included tourist resorts in USA, Australia and South America. Multiple discriminant analysis suggests that GCC tourists select Egypt, Lebanon and Turkey because travelling and living expenses are relatively cheaper for these resorts. Those GCC consumers who select Morocco, Tunisia or South East Asia believe that these resorts offer better entertainment than other resorts. GCC consumers who visit European resorts (England, France, Spain and others) find more comfort in spending their vacations in these resorts than in other places. Finally, multiple discriminant analysis suggests that GCC tourists who visit the USA, Australia or South America do so because of the attractions and adventures. The GCC (Gulf Cooperation Council, consisting of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) has a great potential demand for the tourist services offered by many countries. Consumers of the GCC value very much their family vacation and tend to have a strong demand for tourism. These consumers enjoy very high standards of living. They prefer to spend every vacation overseas because domestic tourist resorts are either not existent or very underdeveloped. Also, summer in all GCC states is extremely hot. As a result, most residents seek resorts of mild weather to spend their vacation. Moreover, the GCC nationals are in continuous contact with foreigners of different nationalities. The interaction with foreign cultures has a great influence on GCC consumers’ attitudes towards traveling. Furthermore, the relatively restrictive culture and social environment in the GCC countries motivate many citizens to seek a more liberal atmosphere during their vacations. In addition, some GCC citizens go overseas during their vacation to establish business contacts, enter into some transactions, receive education or simply strike some shopping bargains. The GCC consumers spend their vacations in a variety of resorts all over the world. Some travel to neighboring Arab countries, while others elect to spend their vacation in Europe; South East Asia; America or Australia. Although a large number of Gulf residents own property in neighboring Arab countries, Europe and the USA, most of Gulf tourists can be labeled “floating customers”. However, the degree of “attachment” to a particular tourist resort is not static. There seems to be a high correlation between the type of resort visited and the local economic conditions, which are very sensitive to the fluctuations in oil revenue. Our survey results suggest that GCC consumers have changed their elected resorts more often during the boom years (1974-1982) than during other periods. The aim of this paper is to cluster tourist resorts visited by GCC consumers on basis of a number of attributes; describe the nature of the differences between clusters and test these differences for significance. The paper is divided into four sections. Section two identifies the major tourist resorts visited by the GCC consumers in 1998. The clustering of the tourist resorts is done in section three. Multiple discriminant analysis is used in section four to describe the nature of the differences between clusters and to test these differences for significance. Finally, Section five summarizes the main conclusions of the paper. A survey was conducted during the months of April and May 1999 to find out how the consumers of the GCC countries rate tourist resorts. Three random samples, each has 385 members, were collected. Table 1 identifies the most important resorts visited by Gulf tourists in 1999. Only those resorts visited by at least four percent of total Gulf tourists in that year are included. It was possible to identify 13 resorts. The data in this table suggest that: 1. Over 35 percent of Gulf tourists elected to spend their vacation in neighboring Arab countries (Egypt, Lebanon, Morocco and Tunisia). A large percentage of GCC tourists (17.8 %) chose Egypt as their most preferred resort. Lebanon was the second most preferred neighboring resort. The ranking of Lebanon has changed significantly following the Civil War in that country. 2. Though not an Arab country, Turkey has grown to be a popular tourist resort for the Gulf consumers. Its closeness and similar culture gained her a special position amongst tourist resorts. 3. Approximately 30 percent of the GCC tourists spent their 1998 vacation in Europe. England seems to be the most popular European tourist resort, followed by Spain. 4. South East Asia (Indonesia, The Philippines, Singapore and Thailand) are popular places, but not as popular as neighboring Arab countries. 5. The USA seems to be a much more attractive tourist resorts than Australia, though both resorts are of similar distance to GCC countries. 6. A few GCC tourists (4.3%) elected to spend their vacation in South American resorts (Argentina, the Bahamas Brazil and , Mexico). The GCC tourists were asked to rate the tourist resorts they visited in 1999 over five attributes on a 7-point scale. The attributes are: Travelling costs (1= extremely low, .,7 = extremely high) Living expenses (1= extremely low, ,7 = extremely high) Degree of comfort (1=extremely uncomfortable, ,7 = extremely comfortable) Endowment with attractions and adventures (1= extremely poor,,7 = extremely rich) Entertainment (1=extremely dull,.7= extremely entertaining) Table 2 gives the mean ratings for each of the major resorts visited by the GCC tourists in 1999. The data in this table suggest that: 1. The GCC tourists regard Egypt, as the cheapest tourist resort, followed by Lebanon and Turkey, in terms of travelling and living expenses. 2. GCC tourists rank Egypt most favorably, followed by Turkey and Lebanon in terms of living expenses. GCC consumers, on other hand rank France least favorably in terms of living expenses. 3. The mean rating given to the variable “comfort” is relatively high for England, France, Spain and other European resorts. 4. GCC give higher ratings to “Attractions and Adventures” for resorts in the USA, Australia and South America.
Using Genetic Algorithms For Multicriterion Resource Allocation Problems In Fuzzy Settings
Dr. Rishi Roy, Massachusetts Institute of Technology, Cambridge, MA.
The establishment of common, shared goals and efficient allocation of resources are among the most important issues associated with the implementation and administration of resource allocation programs. Oftentimes such programs are multicriterion in nature and articulated in fuzzy terms. For example criterion 1 is more important than criterion 2 and so on. Unfortunately, even the best of normative plans requires a formal process for selecting the 'best' possible course of action in the face of multiple goals and objectives that may be inherently incompatible. In this paper, we suggest that Genetic Algorithms (GA s) provide a very efficient way to solve such problems. This process is a multi-criterion decision-making mechanism based on finding a 'satisficing' solution using simulation and ' front-end processing'. Once the senior executives, in an organization, have identified the normative goals, scarce resources have to be efficiently allocated in order to attain these goals. Such resource allocation processes are generally characterized as follows: Initially there exists a set of inputs to the team planning the resource allocation. These inputs are derived from both external and internal stimuli and institutional databases. The external inputs usually represent requirements or goals, which are either explicitly or implicitly imposed on the allocation process by external forces; for example, governmental regulations; market demand (quality, quantity and timing) etc. The internal inputs, on the other hand, are related to the internal resources of the organization. These resources typically involve the availability and utilization of monies, front line workers and support staff, facilities and comparative regional advantages. Given these exogenous inputs, the information from the units below, and the superordinate’s own expectations, the superordinate arrives at a utility function and a set of constraints. On the basis of this utility function and subject to the set of constraints that determine the solution space, the superordinate (or planning team) tentatively selects a program of resource allocations for the subordinates (partners) in the second level. This program generally consists of a set of resource budgets and performance plans, and additional coordination information is communicated to the subordinates. The information used for coordination may be in the form of binding constraints on subordinate behavior; or incentive/penalties for the attainment or non-attainment of priority targets; or information clarifying the superordinate's objective. A subordinate at level two goes through, more or less, the same information gathering, problem solving and information communication process as the subordinate, the only difference being that the directives received by the subordinate from the superordinate are analogous to the superordinate’s' exogenous inputs. This process is an iterative one, a tattonement (Hurwicz, 1972 and 1973). It begins with the highest-level decision unit selecting a program of resource allocation and then transmitting this program along with coordination information to each subordinate unit at the second unit. Each subordinate unit at the second level then solves its allocation problem and sends appropriate information about its problem solution along with coordination information to subordinates at level three. This continues till the bottom levels are reached at which time the information flow reverses itself and starts flowing up through the hierarchy until it reaches the superordinate at level one. Kornai (1971) calls this upward flow of information counter planning. During counter planning process, the information at each decision unit is integrated and aggregated so that the superordinate at the very top has summary information about the ramifications of tentative budgets or programs assigned at the beginning of a given cycle. The superordinate uses this information to arrive at a new set of tentative budgets and the entire process repeats itself until final allocations are determined and the final plan implemented. The allocation plan just delineated, may be mathematically formulated as a multi-criterion optimization problem as follows: Where, Ci is an ni component vector. Xi is a ni component vector. i is a m x n dimensional technology matrix for the shared resources. Bi is a m x n dimensional matrix pertaining to internal resources of each of the twinning partners. bi is a mi component vector of resources or constraints. Roy and Lakshmanan (1980) have presented an algorithm that can be used in conjunction with this model to allocate energy resources. Unfortunately, their approach faces a major problem in implementation. Their algorithm calls for explicit enumeration of all the efficient solutions of the multi-criterion problems involved in each phase in each decentralized unit at each iteration. For a reasonably large real-world resource allocation situation, this task may be virtually impossible. In addition to this computational problem there is also a behavioral problem. The Roy- Lakhsmanan algorithm requires decision-makers' to choose a 'most' preferred solution from the set of efficient solutions. If the set of efficient solution is reasonably large, there may be logical inconsistencies in the choice of the 'most' preferred solution because of information overload. To offset these problems and to make the Roy -Lakhsmanan algorithm more implementable, it has been modified by the inclusion of the simulation heuristic developed by Roy ( 1986). The Roy approach to vector max or multi-criterion problems does not ask the decision-maker to either choose from the alternatives or to provide any trade-off information. Although the Roy heuristic is based on finite number of solutions at each phase and hence is computationally tractable, nevertheless it suffers from a “behavioral” problem insofar as the number of inter-level iterations could theoretically be quite large. In reality such iterations are relatively few. Genetic algorithms offer a way around these behavioral issues. In the next section we provide a brief overview of GA s and follow this up with an illustrative example of our proposed process.
Litigation Contingencies: What Auditors Need To Know, What Lawyers Are Willing To Provide and What Gets Reported
The financial statements serve a variety of purposes for a multitude of users. Some uses are retrospective, while others infer the future. No matter the use or user, the statements are only as good as the information they contain. Some of the information is factual, having already happened. Some of the information is based on estimates. For most of these estimates, there is a substantial amount of history and experience on which to base the estimate. The financial statements serve a variety of purposes for a multitude of users. Some uses are retrospective, while others infer the future. No matter the use or user, the statements are only as good as the information they contain. Some of the information is factual, having already happened. Some of the information is based on estimates. For most of these estimates, there is a substantial amount of history and experience on which to base the estimate. Contingencies present an extremely complex area. Not only is there a question as to amount, but also to the very existence. By definition, the realization of contingencies is based on the occurrence or nonoccurrence of a future event. This is typically not known at the financial statement date. The literature provides that the accounting treatment for loss contingencies is based on the probability of negative outcome. For some contingent losses, this information is available based on past experience. For litigation contingencies, each lawsuit has its own facts and circumstances. Past experience is not usually suitable for estimation. Auditors rely on the attorney for obtaining the probability and range of loss. If this information is inaccessible, there may not be clear guidance of the proper financial statement presentation. This research surveyed lawyers to find out their willingness to provide information to auditors. The lawyers indicated a willingness to provide the necessary information in about half of the responses. Auditors were interviewed to ascertain whether they received the necessary information from lawyers, and what they ultimately disclosed in the financial statements. They expressed that they do not receive the kind and type of information they need from the lawyers. Through examples they presented, the reporting of litigation contingencies is uneven across companies. Recommendations are made to improve and standardize the reporting of litigation contingencies. These include narrowing the disclosure options provided by the literature from three to one, segregating the litigation into paragraphs based upon whether the suit arose in the normal course of business, and providing separate, summarized information on lawsuits where any negative outcome will be paid by insurance. The accounting profession deals in the temporal realm of the past. Financial statements report what has happened, either for a period of time or as of a certain date. Certain uses of financial statements, such as review of the management stewardship function and assessing the results of operations, are concerned with the accounting numbers of a recently ended period. Many uses, such as creditor estimation of future prospects and investor projection of profits, are related to inference of the future, based on this past accounting. The accuracy of the future projections will be commensurate with the accuracy with which the past is presented. In preparation of these statements, accountants necessarily make use of estimates. Such estimates include the useful lives of assets, the collectability of receivables and the amount of expenses to be paid in the future, such as taxes and warranty costs. Readers have not commonly understood the extent to which estimates and other "non-hard" figures find their way into the financial statements. This has led to an "expectation gap". This is the difference between what users believe the statements report and what the statements actually do report. Contingent liabilities are those liabilities that will be realized upon the occurrence or nonoccurrence of a future event. Examples of contingent liabilities include litigation, claims and assessments, and warranty liabilities. Contingent liabilities are an especially troublesome accounting topic, since an actual loss may or may not be eventually realized. Usually, accounting estimates are used to approximate a future amount that will be paid (liability) or received (asset). That something will be paid or received is not in question, only the amount. For contingent liabilities, it is not known that any amount will be paid. Whether the loss is realized will not be determined until after the date of the financial statements. Sometimes the contingency will be resolved after the end of the accounting period, but prior to the issuance of the financial statements. Unfortunately, this is rarely the case. The eventual disposition will generally not be known until some time in the future. The problem for the auditor is the determination of the proper accounting treatment at the financial statement date. The authoritative literature for the accounting profession on contingencies is contained in the Statement of Financial Accounting Standards No. 5 (SFAS 5), which was issued in 1975. Since that time, SFAS 5 has not been revised or superseded. The broad scope of SFAS 5 is the issue of contingent gains and losses, and the associated assets and liabilities. This paper is concerned with the subtopic of litigation contingencies.
Foreign Market Entry Strategies in the Formerly Socialist Countries: A Case Study
Dr. Esin Can Mutlu, Yýldýz Technical University, Istanbul, Turkey
Transition economy is a term used to designate the economic situation of countries who have just got out of a closed economic system trying to adapt to market economy. The transition process, especially in Eastern European countries and the former Soviet Union, have started in the period between 1989-1991 and 26 countries of the region have experienced problems in common, i.e. social and economic problems such as rapid increase in the inflation and unemployment rates, and the inequalities in income distribution. The disintegration of the Soviet Union has marked the beginning of this process, namely the transformation to the market economy. Hence, in the countries of the region mentioned above this transformation is characterized by transition economies. The transition to the market economy resulted in foreign investment flow in these countries. Although they constitute a risky environment, these turbulent markets may be preferred by international firms, because they offer a virgin market where internationals can realize their investments according to their specific strategies. Business strategies have become increasingly important for managers in the so-called “transition economies”. Business strategy refers to the process of identifying long-term objectives of a firm, as well as finding and making use of the resources necessary to attain these objectives. International firms’ business strategies are very varied, since they ought to recognize and incorporate into their strategies the cultural, political and economic differences that each host country presents. As to the transition economies, international firms employ a variety of strategies, ranging from the formation of alliances and joint ventures to the acquisition of local firms. Offering a new battleground for international competition, transition economies, due to their unstable, uncertain conditions, require some change in the way international firms enter new markets. Thus, international firms’ business strategies in transition economies may not always include formal, intended strategies. Rather, these firms, in the above mentioned turbulent market conditions, have to use informal, situational and/or emergent strategies. This study investigates several specific crucial points that will contribute to a better understanding of strategies of international firms in transition economies. In the first part, various strategies employed by international firms are explored from a theoretical perspective, with a specific focus on the context of transition economies. In the second part, a case study is presented examining the strategies used by a large Turkish construction firm, ENKA Construction & Industry, whose investments are located in transition economies, especially in Russia. ENKA Construction & Industry is the leading construction firm in Turkey and one of the largest in the world, as well as the parent firm of the ENKA GROUP comprising 24 subsidiaries engaged in different fields of activities. During the 1970s, ENKA developed its international relations, set up joint ventures with foreign companies, and started undertaking contracts abroad. In 1991, ENKA has established “Mosenka” in Moscow with Russian partners This case study presents the ENKA vision and its proper international strategies in a country of transition economy, namely Russia. The research methodology adopted for this study is the case study approach. An advantage of using the case methodology is that the researcher is able to describe the relationships which exist in reality within single organizations. The data was collected through a variety of means including in-depth interviewing and document analysis. This study investigates several specific crucial points that will contribute to a better understanding of strategies of international firms in transition economies. It discusses in detail several important factors such as countries in transitions, entry policy of firms’ to market economy and international strategies used in transition economies. This article evaluates a Turkish leader firm ENKA who is successful in doing business with CIS and Russia. Strategy is a term with a military background, elaborated in “The Art of War”, the work of Chinese strategist Sun-Tzu (www.sonshi.com). The term strategy is defined as a unified, comprehensive and integrated plan that relates the strategic advantages of the firm to the challenges of the environment. It is designed to ensure that the basic objectives of the organization are achieved through proper execution (Jauch & Glueck, 1989). In brief, strategy is the means used to achieve the ends (objectives). The above definition underlines three characteristics of a strategy: a) it is unified: it relates all parts of the organization together. b) it is comprehensive: it covers all major aspects of the organization. c) it is integrated: all parts of the plan are compatible and fit together well. The strategy is a long-term plan oriented towards basic issues such as: What is our business? What can our firm do to accomplish its objectives? What are our firm’s strengths and weaknesses in achieving its goals? What are the opportunities and threats in the environment? Alfred Chandler’s definition of strategy emphasizes the determination of long-term objectives of the firm and the adoption of courses of action and the allocation of resources necessary for achieving these objectives (Peng, 2000). The formal planning aspect inherent in this outlook is challenged by Henry Mintzberg, who suggests that strategy is more than a plan, it is a position, a perspective or a pattern of actions and decisions, which can come as “emergent” strategies, i.e. as the outcome of bottom-up decision processes, in addition to top-down “intended” strategies as emphasized by Chandler. A strategy entails an organization’s assessment of its own strengths and weaknesses at a given point, and the opportunities and threats in the environment that may help or hinder the attainment of its goals. Referred to as the SWOT analysis, this assessment is in accordance with Sun-Tzu’s teachings as well, on knowing yourself and your environment (Peng, 2000). After this assessment, the actions and decisions to reach the objectives become the organization’s strategy, its intended strategy so to speak. However, given the unpredictable character of the environment, some emergent strategies, i.e. strategies that come up as a response to the requirements of the situations, may also contribute to the attainment of the goals. So, both type of strategies are of value, as long as they neutralize threats and make use of opportunities, while relying on strengths and avoiding weaknesses. Firms’ usage of strategies in business context is a phenomenon dating back to 1960s. The firms’ need to use various strategies is the outcome of the need to compete and to become the winner, especially in international markets. Today, failure to become a part of the global market results in a country’s economic decline. Since the 1950s the growth of international trade and investment has been larger than the growth of domestic economies (Czinkota, Ronkainen & Moffett, 1999). So, entering into foreign markets is an important key in expansion, growth and economic gain for all firms. Therefore, no one firm can escape the flow to go in competition in international business.
International Equity Relationship and Global Trade Interdependency
Dr. M. T. Vaziri, California State University, San Bernardino, CA
International Trade and global capital flow now account for more than quarter of the US GDP. With an increase in the number and business lines of trans.-national corporations and the continual move towards a global economy, it is important to understand the relationships between trade interdependency among nations and their equity markets. When two or more countries have high trade interdependency, they make themselves more vulnerable economically and financially to the trade and monetary policy of others. Generally, when the ratio of the export-import of the two countries is closed to each other and significantly larger than the combined size of two counties GDP’s, any increase in the ratio increase the level of the intra-industry trade. Such increase also signifies close trade interdependency between two countries with comparable developmental stages. Such increase in intra-industry trade will provide opportunity not only for direct investment, but also manifest the benefits of portfolio investment for the purpose of asset diversification. Many money managers such as ones in Morgan Stanley Capital International have emphasized the diversification through investing in these trade dependency markets to reduce the variance of the portfolio of domestic stocks without reducing the expected return. Many mutual fund managers even suggest that most investors should have money in foreign markets with an equity portfolio made up of 20 to 25 percent of non-U.S. stocks which will add return and lower overall risks. The new millennium will accentuation the sentiment that, the highest performing stocks are generally found outside of the United States. An important aspect to remember is the reason that international diversification works so well is the economies of some countries are out of synch with each other providing a higher return for less risk. One should notice that the some of these markets are immature, vulnerable to scandal, occasionally manipulated, and lack strong government supervision. There’s also a chance that accounting, disclosure, trading, and settlement practices may seem complicated. Flights of capital, triggered by events in one trade dependency market, can spread instantly to other markets even when those markets have quite different conditions. Intra-industry trade countries have varying economies, growth rates, and stages of development. An aspect of these markets that is important to remember is that these markets have a low correlation with market movements in developed economies, or even among themselves. In other words, when one market is going up, there is a good chance that another is going down. Currency risk is important because returns earned abroad can be magnified or diminished by the exchange rates. A strengthening dollar reduces the value of foreign investments owned by U.S. investors, and if the dollar weakens, foreign assets rise in value. High returns from rising stock prices could be turned into losses from falling currencies. One cause could be runaway inflation. When emerging markets are small and the capitalization is so small that it may be less than a single large corporation in the United States, liquidity risk becomes a factor for investors. Sometimes the buy or sell orders placed by investors or may be only partially filled, or remain unfilled with the possibility that subsequent prices paid or received could be significantly different from previous trades. Daily trading volumes in foreign markets ranges from up to a million shares to more than 600 million shares traded in U.S. exchanges. In some countries, fewer than 200 stocks trade in quantities sufficient to support foreign interest. And the limitations placed on foreign investors sometimes permit foreigners to buy only a specified class of shares, often available in limited quantities. And in some cases the volume traded hinders trading activities and may result in exorbitant premiums for sought-after shares. There are even countries that restrict foreign investments all together. Another variable that adds to the risk is that the sudden movement of highly speculative short-term capital, such as market price supports can trigger an event in one market that spreads to other markets even when the markets have different conditions. Investors diversifying their portfolios to include foreign investments must understand the intricacies involved that make each market unique. Growth of total is due primarily to the fast-paced growth of US exports to the world. Such growth of global trade has created a strong trade dependency and interdependency between U.S and various countries. With the shift from domestically based companies that rely on the home economy to drive revenue to a multinational companies, one can clearly see that companies have become much more reliant on the other nation for supplies raw materials, and finished goods. The purpose of this paper is to analyze the relationship between trade interdependence of one economy to equity market index of their major stock market. The main hypothesis is that the higher the degree of trade interdependency, higher the correlation between their equity markets. The trade relations as well as equity market performance of the selected countries under study are evaluated based on the concept of risk and return relationship The countries under study are selected based on the following criteria: (1) located in a low or middle economy (average annual income bellow $10,000) or (2) it has a relatively low investment capitalization relative to its GDP, and (3) have a high degree of intra-industry trade interdependency. The findings of this study should be helpful for the portfolio investment decisions as well as to help guide the individual traders in developing trade relations with various countries.
Re-Defining Accounting Concepts: A New Definition of Land
Land is currently classified as a fixed asset. Intangible assets are those assets that do not have physical presence, but nonetheless have value and will be benefit multiple accounting periods. In this paper, a rationale for classifying land as an intangible asset is presented which contrasts current accepted practice. “Land” is described by parameters contained in a deed, not by any physical existence. Dirt, commonly considered the “land,” can be touched, but this is not “land.” The dirt can be removed without changing the “land.” Likewise any other growth that is contained within the deed parameters. Classifying land as an intangible asset would require amortization of the cost, over a period not to exceed the defined accounting limits. In an accounting sense, land currently comes in three flavors. There is land as the depletable asset, land as an investment, and perhaps the most common, land as a component of plant, property and equipment. The subject of this paper is land that is classified as part of plant, property and equipment. Current accepted accounting is to capitalize the cost of the land (or the assigned value when purchased with other assets, such as buildings and improvements) and include it within the plant, property and equipment section. Land is the one element of the plant, property and equipment section that is not subject to depreciation, based on long-standing practice. The only pronouncement that discusses not depreciating land is Statement of Financial Accounting Standards No. 93 (Recognition of Depreciation by Not-For-Profit Organizations): Consistent with the accepted practice for land used as a building site, depreciation need not be recognized … (Paragraph 6) The asset broadly called land illustrates the need to consider the characteristics of individual assets in reporting depreciation. The process of using up the future economic benefit or service potential of land often takes place over a period so long that its occurrence is imperceptible-land used as a building site is perhaps the most common example-and whether depreciation is recognized is of no practical consequence. (Paragraph 34) (Statement of Financial Accounting Standards No. 93, “Recognition of Depreciation by Not-For-Profit Organizations,” August 1987, Financial Accounting Standards Board, Norwalk, CT.) Many users of the financial statements, such as stock and credit analysts and potential investors, focus on certain ratios. Depending on their background, expertise and bias, they in all likelihood have a favored set of ratios that they employ to answer questions about a company’s future outlook and to make projections. Some of the ratios they employ might include total assets as a component, some might be focused on cash flow, and some others might be focused on earnings. A widely reported financial ratio is earnings per share, which is sensitive to any change in income or expense amounts. If depreciation were to be charged on land, it would certainly mean a change in reported earnings for many companies, and an attendant change in the financial ratios. For most companies, whether land is classified within the plant, property and equipment section or in some other section of the balance sheet is not material. The majority of ratios that use the asset section of the balance sheet would focus on total assets (other ratios use current assets, but land generally would not be classified there), so whether land was classified with plant, property and equipment or separately, it would still be included in total assets. A bigger change would occur if there should be depreciation or amortization taken on land. The elements of plant, property and equipment must meet certain criteria. There must be physical existence, earning potential and the asset must be used in the operations of the business. The criterion of focus is physical existence. The theoretical question is “Does land have a physical existence?” If not, then land would be correctly classified as an intangible asset. Intangible assets, by classical definition, cannot be touched, yet still exist. They tend to represent rights of one sort or another (patents, copyrights, trademarks, for instance). The basic question in discussing whether a particular asset is tangible or intangible (or, stated another way, whether or not the asset has physical existence) is whether or not you can touch the asset. So, the question then becomes can you touch “land”. “Land” is defined by parameters contained in a deed which describes its dimensions, and which outlines the shape of the land owned. From this flat, two dimensional shape, land forms a plane in the upward and downward direction. Land is a right, comprising building rights, air rights and soil rights, as defined by the deed. Land does not have physical existence. Much as a copyright or patent grants certain rights to the holder, the only item with physical existence is the document granting the right. It can be considered that land is similar. The only thing that can be touched on an undeveloped piece of land is dirt or other growth. The dirt that resides within the boundaries defined by the deed is not the “land”. This should be obvious, because no matter what happens to the dirt, the “land” still exists. The dirt could blow from the defined boundaries or be removed by choice, yet we would still say the “land” exists unchanged, despite the change to the soil, dirt or undergrowth. The land still exists in an accounting sense as it did before. The reason for this is that the physical dirt is not representative of the land, but just happens to be resting within the pre-defined borders. Land is intangible, and cannot be touched.
Task-Technology Fit: Brick & Mortar Beware?
Dr. Nora M. Martin, Nova Southeastern University, Ft. Lauderdale, FL
Electronic commerce (ecommerce) takes on many forms and addresses all aspects both internal and external to an organization utilizing information technology. It includes but is not limited to business-to-business transactions, business to end consumer transactions and information gathering by both businesses and consumers. Although initially viewed as a tool to arm consumers with product information, the Internet over the past decade has made the transition from an information tool to a viable shopping alternative. The Internet appears to fit the bill for these consumer-buying preferences in certain areas of the market. The prime areas of growth for Internet purchases are in music, computer equipment and travel (Brannback1997). Understanding the task-technology of the Internet will prove viable for business owners in terms of analyzing their own needs and aspirations with regards to this technology. Although the major impact is predicted to be in business-to-business, 1.3 trillion by 2003, there is considerable impact in business-to-consumer electronic commerce sector (Grewal, Comer, Mehta 2001). In 1998, one third of Internet users made purchases and the other 2/3 used the Internet to research product information (Ackerman, 1998). Electronic commerce sales comprised $10 billion of the total sales. The consumer has several viable channels to choose from in terms of consumer purchases. These alternatives can be categorized as local shopping (local retail stores), shopping out of town (out shopping), and shopping through mail, computer or by telephone (in-home shopping (Blakney, Sekely 1994). The Internet has developed as a viable distribution channel. It is undisputed that Internet sales have surpassed expectations. A few questions should be addressed when considering a web presence: 1) How can the Internet technology or Web capability improve your companies back office system? 2) How can the Internet improve existing customer relationships? and 3) In terms of Internet as a distribution channel, it is easy to see how this technology is a good task fit to the travel industry (O’Connell (2001) The Internet is proving to be an excellent task-technology mix. The travel industry is one where technology has proven to be a good task-technology fit. The Internet, information technology, and e-commerce tools can substantially cut costs, speed transactions and improve efficiencies, the airline industry (Rosen, Sweat 2000). The task-technology fit has proven so successful that there is now controversy between the airline and travel industries. Travel agent commissions for booking air travel have been cut to $10 per booking (Bates 2000). One aspect becomes apparent as task-technology fit and the Internet channel of distribution relationships are analyzed, when consumers are provided a one stop convenience shopping alternative to satisfy their primal consumer needs the Internet can be viewed as a viable distribution channel. In recent years, ecommerce has developed from a concept to a successful realization. Electronic commerce (ecommerce) takes on many forms and addresses all aspects both internal and external to an organization utilizing information technology. It includes but is not limited to business-to-business transactions, business to end consumer transactions and information gathering by both businesses and consumers. Such venues include email, electronic data interchange and use of intranet as well as the more comely thought of processes of consumer shopping and business stock orders made from websites. The external realm of ecommerce addresses the use of information technology to support how a business interacts with the marketplace (Haag, Cummings, Dawkins 1998). Ecommerce began in the 1970’s (Ackerman 1998). It was fueled by the proliferation of credit cards, overnight package delivery and mail order catalogs. These initially gave rise to the Home Shopping Network and other cable television shop at home concepts. Although initially viewed as a tool to arm consumers with product information, the Internet over the past decade has made the transition from an information tool to a viable shopping alternative. It is viewed much like the catalog and home network shopping venues as another means for people to perform in-shopping (Sheth 1983). Internet transactions and utilization has been successful in several applications but not as effective in others. According to Margolis (1996) "Whether we decide to call it digital commerce, e-shopping, e-tailing, cyber shopping or virtual retail, the technology will not change why we buy nor will it create additional consumption. Rather, digital commerce will take from the pool of already existing trade and offer unique services as well as new distribution channels.” He goes on to state that consumers desire convenience, choice, information, value, trust and to save both time and money. The Internet appears to fit the bill for these consumer-buying preferences in certain areas of the market. The prime areas of growth for Internet purchases are in music, computer equipment and travel (Brannback1997). The reason behind this appears to be task-use technology. While every business may have an opportunity to utilize web-based technology the questions is should they? And if so, for what end purpose? This paper looks at the existing literature surrounding task fit technology, how it has impacted the travel industry with particular focus on the airline industry and postulate as to fitness of task-technology fit. Understanding the task-technology of the Internet will prove viable for business owners in terms of analyzing their own needs and aspirations with regards to this technology.
An Operational Theory Integrating: Cash Discount and Product Pricing Policies
We present a simple operational theory to integrate the firm’s product pricing decision with its cash discount policy and argue that a firm’s price setting behavior requires simultaneous determination of both a cash discount rate and a pre-discount product price. We show that the cash discount elasticity affects the optimal cash discount rate more significantly while the product price elasticity affects the optimal product price more significantly. We then discuss several practical implications. This paper determines simultaneously the optimal levels of the cash discount rate in credit policy and the pre-discount product price and shows the effects of price elasticities of demand on these optimal levels. In the literature of credit policy, very little research exists that focuses on integrating a firm=s credit decision with its product pricing policy. One exception has been Rashid and Mitra (1999). Although Rashid and Mitra do show the effect of a product market variable, namely the price elasticity of demand, on the firm=s optimal cash discount rate, yet their model cannot be considered an integrating attempt because the cash discount rate is the only choice variable in their analysis as they assume the pre-discount product price to be fixed. Integrating a firm=s credit policy with its product pricing approach is an important area of research recognized by Kim and Atkin (1978) who state, A..., it is conceptually incorrect to analyze credit programs in isolation of pricing schemes.@ (p. 403) The focus on cash discount rates, product prices and price elasticities is interesting for at least two reasons. First, Ng, Smith and Smith (1999, pp. 1126-1127) find that discount rates are significantly lower when firms sell to wholesalers than when they sell to retailers. (Now Lim, Mitra and Rashid (2000) find that cash discount rates, discount periods and credit periods are positively correlated from the 1993 National Survey of Small Business Finances. Hence the lower cash discount rate is indicative of less trade credit.) Why then do vendors, who have an advantage over the capital market in providing credit to their own wholesalers, offer these wholesalers less trade credit? Conversely, unless the retailer has significant monopsony power, it is likely that firms sell to retailers at higher product prices than they do to wholesalers. Second, Long, Malitz and Ravid (1993, p.124) find no support for trade credit as a substitute for institutional lending. By focusing on demand elasticities, we assume that trade credit and product pricing policies are based more on operational than financial conditions. Our Aoperational theory@ is consistent with Long, Malitz and Ravid=s (1993, p.127) findings. In the simultaneous determination of the cash discount rate and the pre-discount price, we identify two price elasticities of demand: one with respect to the cash discount rate and the second with respect to the pre-discount price. Our model shows that the cash discount elasticity mainly affects the optimal cash discount rate and the major impact of the pre-discount price elasticity is on the optimal pre-discount price. We also find that the optimal cash discount rate is increasing in the contribution margin (optimal pre-discount price less unit costs) which is consistent with the empirical findings of Sartoris and Hill (1988). Results of the paper are illustrated numerically, where under reasonable numerical parameterizations, the optimal level of the cash discount rate is around the most popularly known value of 2%. An innovation of this paper is to propose two separate types of price elasticities of demand, which are: (a) the cash discount price elasticity of demand, to be denoted by ηd, and (b) the product price elasticity of demand, to be denoted by ηP. The rationale for this distinction is motivated by the fact that different factors are involved in the responsiveness of quantity demanded to changes in the cash discount rate (denoted by Ad@ hereafter) and the pre-discount product price (denoted by AP@ hereafter). For example, when we examine the response of quantity demanded to a change in d, borrowing costs of customers, among other factors, play a key role in determining the numerical magnitude of ηd. To elaborate, suppose the initial value of d is 2% over a net credit period of 50 days. This means that the opportunity cost to those customers who do not take the cash discount is 2.04% over the 50-day period. A customers whose borrowing rate in the financial market is more than 2.04% will not take the cash discount and marginal customers are those whose borrowing rates are exactly equal to 2.04%. Suppose now that the firm raises d from 2% to 2.2%, resulting in a higher opportunity cost of 2.25% for foregoing the cash discount. As a consequence, all those customers whose borrowing rates fall between 2.04% and 2.25% can now avail themselves of the price reduction and may buy more of the firm=s product. Clearly the price reduction caused by a higher d is also available to those customers whose borrowing rates were already below 2.04%. The point is that the borrowing rates of customers are one of the main determinants of the numerical magnitude of ηd. Since the borrowing rates of those customers who respond to increments in d are relatively higher, these customers are the low credit quality customers, according to Peterson and Rajan (1997). If the low-quality borrowers constitute the most price elastic segment, then trade credit is an effective means of price discrimination.
Perceived Uncertainty: How Different Environmental Sectors Moderate Strategy-Performance Relationships
Dr. Kamalesh Kumar, The University of Michigan-Dearborn, Dearborn, MI
Dr. Karen Strandholm, The University of Michigan-Dearborn, Dearborn, MI
Results of a survey of 159 acute care hospitals were used to test hypotheses relating to the specific ways that the environment modifies the strategy‑performance relationship. Results indicated that the environment moderates the strength and not the form of the above relationship. Specific environmental conditions that facilitated the success of a differentiation strategy as well as a cost leadership strategy were identified. Implications for hospital administrators are also addressed. Environments are an important consideration for organizations, since they create both problems and opportunities. While organizations depend on the environment for scarce and valued resources, they often must cope with unstable, uncertain, and unpredictable events (Daft, Sormunen, & Parks, 1988). Indeed, the logic relating environment to strategy and, in turn, to performance is compelling Empirical demonstration of the match between environmental characteristics and strategy and its performance implications have unequivocally shown that the success of an organization is incumbent on the organization's ability to align or match its strategy to its environments (e.g.. Hambrick, 1982, Miller, 1989; Kim & Lim, 1988; McArthur & Nystrom, 1991; Lamont, Marlin, & Hoffman, 1993; Boyd & Fulk, 1996). However, while research results clearly demonstrate that environmental conditions interact with strategy to affect performance, little evidence exists about the specific ways in which various environmental dimensions relate to strategies and performance. Empirical studies that have directly addressed this issue (Prescott, 1986; McArthur and Nystrom, 1991) present contradictory evidence about the precise type of moderator influence that environmental conditions have on strategy-performance relationships. While Prescott (1986) concluded that "environments modify the strength but not the form of relationship between strategy variables and performance," (pp. 340), McArthur and Nystrom (1991) found evidence that show that "environmental dimensions moderate the form of strategy-performance relationships" (pp. 357). This discordance has major theoretical and practical implications. If environmental dimensions modify the "strength" of strategy-performance relationships, then a changed or different environmental condition merely requires "fine tuning responses"--a change in the relative emphasis of a strategy or among some set of optimal strategies. However, if environmental dimensions modify the "form" of strategy-performance relationships then a changed or different environmental condition calls for a different strategy or set of strategies (McArthur & Nystrom, 1991). This study will attempt to resolve the above contradiction noted in the literature by examining the specific ways in which the industry environment modifies the strategy-performance relationship. More specifically, the study examines the exact nature of the interaction between different sectors of the environment and Porter's (1980) generic strategies of cost leadership and differentiation and its impact on organizational performance. In so doing, the study also addresses an issue that has caused "significant theoretical tension," namely the notion of equally able generic strategies versus the idea of particularly appropriate strategy-environment combinations (Lamont et. al., 1993; Zajac & Shortell, 1989). If the results of this study show that different sectors of the environment simply moderate the strength of strategy-performance relationships then they would substantiate the viability of generic strategies across environmental context. However, if environmental conditions are found to moderate the form of strategy-performance relationships then changes in the environmental sectors would warrant adoption of a new strategy/set of strategies. Perceived environmental uncertainty refers to the relative lack of information and unpredictability associated with different sectors (aspects) of the environment (Daft et. al. 1988). Duncan (1972), who is generally credited with initiating the study of perceived environmental uncertainty, suggested that perceived uncertainty could be described along two dimensions: complexity and variability. Complexity refers to the heterogeneity of and interdependence among the environmental sectors (aspects) that are relevant to the organization (Child, 1972). This aspect of environmental uncertainty has also been studied by other researchers under other labels including: predictability (Boyd & Fulk, 1996), effect uncertainty (Miliken, 1987), and analyzability (Daft & Weick, 1984). Variability refers to the rate and frequency of changes that occur in an organization's environment. It has also been studied by researchers under such labels (Boyd & Fulk, 1996) as dynamism (Duncan, 1972), volatility (Bourgeois, 1985), and turbulence (Tung, 1979). As complexity and variability in an environmental sector increases, the amount of perceived environmental uncertainty also increases (Duncan, 1972; Miles & Snow, 1978). Research in both organization theory and business strategy has underscored the importance of "context" (in which businesses develop strategies) in understanding the relationships between an organization's strategies and its performance (e.g. Hofer & Schendel, 1978; Pfeffer & Salancik, 1978). Results of a number of recent research studies have also emphasized the relationship of environment to strategy and in turn to performance (Kotha & Nair, 1995). However, as noted earlier, research evidence about the ways in which environmental dimensions relate to strategies and performance is equivocal. Thus, while McArthur and Nystrom (1991) found that the three environmental dimensions of dynamism, complexity, and munificence affect the form of strategy-performance relationships, Prescott (1986) concluded that environments modify the strength but not the form of the relationship between strategy variables and performance. Therefore, the first research question that this study will attempt to answer is: In what ways do different aspects (sectors) of the environment modify the strategy- performance relationships?
North-South Gender Role Differences in Business
Dr. Joel D. Nicholson, San Francisco State University, San Francisco, CA
Dr. Yim-Yu Wong, San Francisco State University, San Francisco, CA
Brusiness related gender role attitudes across two South American countries (Venezuela and Chile) and one North American country ( the U.S.A.) were examined across a sample of 3,101 managers, professionals and upper division business students. Dorfman and Howell's (1988) revision of Hofstede's (1980) work-related cultural value scale was used to measure masculinity versus femininity. High masculinity scores indicate strong gender role typing in the work place (i.e.; there are certain jobs only men can do). High femininity scores indicate a diminished role of gender in attitudes towards work roles. The data indicated that males in each country held significantly different attitudes towards the role of women in the work force. In addition, the Chilean respondents had stronger gender role typification responses than did the U.S. or Venezuelans. Directions for future studies are given. Research on Latin American cultural differences continues to grow. A field once considered a sub-specialty area of history, sociology, and political science has grown into an interdisciplinary area of study with specialties of its own. A booming area of research in this growing field is the study of women and families in Latin America. Scholars have explored the history of the family in Latin America (see for example, Balmori, Voss, and Wortman, 1984; Adler Lomnitz and Perez-Lizaur, 1987; Saragoza, 1988; and Smith, 1984, among others.) In the area of women's work and development, scholars have also documented the numerous and diverse forms of women's work experiences in Latin America and have begun to challenge long established theoretical frameworks such as modernization and dependency theory (see for example, Beneria and Roldan, 1987; Deere and Leon, 1987; Ruiz and Tiano, 1987; Nash and Safa, 1986, among others.) This research has also challenged the common assumptions about the impact of development on women and the nature of their participation in macroeconomic processes and social change (Acevedo, 1995). It is in the context of this body of research that gender has emerged as a major category of analysis. Acevedo (1995) states that the early literature treated gender in a dualistic fashion. It emphasized the biological, rather than social, nature of gender. Consequently, research dichotomized gender into a variable -- woman or man. Informed by feminist concerns, this early research aimed to make women's work experiences visible. In doing so, a conceptual category named "women" was created that, as Acevedo (1995:83) puts it, "...compressed the multiple dimensions in the construction of women's identity into a single experiential model and produced simplistic explanation of the relationship between gender and development." Later on as the field matured, scholars realized that there were profound differences in women's employment situations and these differences varied from society to society. A significant theoretical change takes place as research shifted in focus from an exclusive analysis of women to an exploration of how gender shapes social life. Acevedo (1995:84) suggests that: “... the new approach emphasizes the social (rather than the biological) character of differences between women and men. Gender differences are shaped and determined by the interconnection of ideological, historical, ethnic, economic, regional, and cultural factors. The investigation of gender differences has shown that the social construction of people's identities varies according to their position in locality, class, race, society, nation, region, time, and space. The social construction of gender is historical, personal, and structural. Gender relations are power relations that take place within different macro- and micro-spheres such as the state, the labor market, the law, the household and interpersonal relations.” Our work contributes to this growing body of literature by adding a comparative dimension to the study of gender differences in Latin America. The major objective of this paper is to compare gender role attitudes between two South American countries (Venezuela and Chile) and one North American country (the U.S.A.). Theoretically, we draw on the work of Dorfman and Howell (1988) and Hofstede (1980), perhaps the most significant research to date concerning cross cultural comparisons of values. In particular, Hofstede's work suggests that there are four major value dimensions: (1) power distance; (2) individualism (versus collectivism); (3) uncertainty avoidance; and (4) masculinity (versus femininity). As conceived by Hofstede (1980), the masculinity scale measures the division of gender work roles in a given culture. This dimension taps the degree to which societies either maximize or minimize these social role differences for the sexes. Most such gender roles are social, derived arbitrarily. Hofstede (1980) notes that typical tasks for men and for women vary considerably across cultures. Hofstede defines masculine societies as those in which masculine gender roles deeply permeate the entire society, affecting the mental programming of both sexes. Hence, common values are achievement, materialism, ostentatious behavior, making money, etc. In more feminist societies the reverse is true; values that permeate society are more often those typically associated with women--quality of life, relationships over materialism, preservation of the environment, helping behaviors, etc. Heroes, both literary and real, often embody the values of a given society. In Hofstede's words, prototypical heroes succinctly define the masculinity/femininity scale: “In a masculine society, the public hero is the successful achiever, the superman. In a more feminine society, the public sympathy goes to the anti-hero, the underdog. Individual brilliance in a feminine society is suspect.” (Hofstede, 1984).
Gender and Perception of Service Quality in the Hotel Industry
Jabulani Ndhlovu, Nova Southeastern University, Ft Lauderdale, FL
Dr. Turan Senguder, Nova Southeastern University, Ft Lauderdale, FL
Research on gender has been attempted in various disciplines with conflicting results. Success in the implementation of a balanced service quality delivery program in the hotel industry needs a deeper understanding of this subject. This study investigated the question, “Does the perception of service quality in hotels differ by gender?” A total of 241 guests, consisting of 127 (52.7%) males and 114 (47.3%) females at three 5-star hotels in Jamaica was studied. The research design involved collection of data from guest of three 5-star hotel by a questionnaire method to measure customer expectations of service quality. Demographic variables of gender, age and education were recorded. Data analysis was done using ANOVA and t-Test. Using an alpha <0.05 for significance, results indicated that the perception of service quality in hotels did not differ by gender. (t=0.33; df=239; p=0.623). This results present challenges to some hotel managers who believe that the perception of service quality differ by gender. Recommendations for further research include replication of this study with a larger sample. Additionally research is needed on moods states of respondents and a critical analysis of gender related problems affecting guests in hotels. Although some gender differences are biologically founded, most of the stereotypic attributes and roles linked to gender arise more from cultural design than from biological identity (Bandura, 1986). Gender status makes a big difference and it carries enormous significance, not only for dress and play, but for the skills cultivated, the occupations pursued, the functions performed in family life and the nature of one’s leisure pursuits and social relationships. The effect of sex dissimilarity is most severe for men working in female-dominated groups, as this group composition violates their expectations of being in the majority. Women are used to working in male-dominated groups, and therefore for them sex may not be a salient categorization dimension. Service industries play a significant role in most economies. Faced with intensified competition, many firms are seeking ways to differentiate themselves from their competitors (Tam, 2000). Service quality is a means to develop a competitive advantage (Brown & Swartz, 1989). Closely related to service quality is customer satisfaction. It has been found to be a significant determinant for repeat sales, word-of-mouth and customer loyalty (Anderson & Sullivan, 1993; Liljander & Strandvik, 1995). The hotel industry, like the health sector is dominated by female workers. Some studies in restaurants and other leisure service industries have suggested that women are more detailed in their evaluation of services than men. This study investigated the effect of gender of guests in evaluating service quality at three 5-star hotels in Jamaica. This study examined whether the perception of service quality at 5-star hotels in Jamaica differed by gender. The demographic variable of gender, has been researched in a number of disciplines, resulting in conflicting results. Delivering quality service is considered an essential strategy for success and survival in today’s competitive environment (Parasuraman, Zeithaml, & Berry, 1985; Reichheld & Sasser, 1990). Findings from research show that companies offering superior service achieve higher-than-normal market share growth (Buzzell & Gate, 1987). Customer repeat business, coupled with customer satisfaction and service quality has been one of the most important concerns to lodging marketers. It costs hotel companies five-to-six times as much to win new customers as to keep them (Warren & Ostergren, 1990, p. 59). Kaplan (1983) argued that there is a tendency to measure only what is easily quantifiable, such as financial performance and productivity, even though other aspects like perceived quality, innovation and flexibility may be crucial to a company’s competitive success. Quality strategies which focus on meeting the needs of the customer are especially relevant in industries such as health care and hospitality industries where resources are becoming more limited (Motwani, Kumar & Mohamed ed., 1996). In the service industry, it is the perceived quality by the customer that counts, as against any real or objective quality (Zeithaml, 1988). Service quality can be measured by how well the service delivery matches a client’s expectations. The key to service quality is consistently meeting or exceeding client expectations (Bojanic, 1991). Reviews of literature suggest that most travelers consider the following hotel attributes when making a hotel choice decision: cleanliness, location, room rate, security, service quality, and the reputation of the hotel or chain (Ananth, DeMico, Moreo & Howey, 1992). Lewis (1984) clarified the perception of service quality in the hotel industry as the way customers rate, judge and compare hotel operations with those of competitors, and then decide whether the operations offer things they desire. Perceived value is highly associated with service quality and customer satisfaction. It is conceptualized as a trade-off between perceived benefits relative to perceived sacrifices (Monroe, 1991). Parasuraman et al. (1994) stated that transaction satisfaction is based on customers’ evaluations of service quality, product quality and price. High perception of service quality triggers a satisfying feeling which in turn influences repurchase intentions. Similarly, high perception of service value leads to greater satisfaction, which affects repurchase intentions (Tam, 2000).
Analytilitic Framework for Global Transfer-Pricing
Dr. Virginia Anne Taylor, William Paterson University, Wayne, NJ
Multinational Enterprises can organize their cross- border transactions as international trade, contract modes of coordination, or direct equity investment. All three modes require transfer-pricing decisions. This study is an interdisciplinary examination of the motivation and regulation of transfer pricing activities. As globalization and trade liberalization trends continue to emerge even small firms find themselves doing business in more than one tax jurisdiction (Carter, 1998); they too must learn to navigate the international transfer price jungle. The accounting and economics literature, government documents and business publications are reviewed to uncover the underlying rationale for various government regulations and multinational enterprise price manipulation when reporting of intra-firm transactions. An analytical framework is designed to bring order, structure, and organization to the environmental complexity and thereby improve the effectiveness and optimality of these decisions. Insights from the literature suggest four drivers of transfer pricing for cross-border intra-firm transactions in goods, knowledge, and services. When a firm forms a market closes; for better or worse resources are henceforth allocated by the visible hand of managerial authority rather than the invisible hand of the competitive price system. The primary advantage of a multinational firm versus a domestic corporation lies in its flexibility to transfer resources across boarders through a globally maximizing network. (Kogut, 1983) Transfer prices are the value assigned to intermediate goods, which move between the divisions of a vertically integrated firm. Related party transactions between organizational units can reduce the worlds’ macro-economic benefits while increasing the firm's profits or economic rents. Governments are very concerned with the macro-economic effects of trade patterns and face the problem of determining the taxable profits of any multinational network in each taxing jurisdiction. Intra-firm trade differs from basic arms length transactions between unrelated parties because it is shaped by the global parent’s strategy to control upstream supplies and downstream markets (Encarnation, 1994: Eden, 1994). Intra-firm trade, which includes services, technology, capital goods, and intermediate and finished goods for resale, constitutes a significant portion of world trade. Intra-firm trade for US multinationals has been particularly large since World War II, partially due to government support for foreign direct investment to rebuild war torn countries in Europe. Today most US firms use foreign direct investment and overseas production rather than exports to supply foreign markets. In 1973 Lall reported that this kind of trade accounted for one third of all US trade in manufactured goods. By 1996 US intra-firm trade with overseas manufacturing affiliates reached $243 billion (Monthly Bulletin of Statistics, 1998 p.267). This trend has not been limited to US firms; Department of Commerce figures, worldwide two-way intra-firm trade increased from 102 billion in 1977 to 337 billion (Tang (1993). Regional trade agreements such as NAFTA and the European Union have already accelerated the upward trend (Zwick, 1998) as will the opening of former closed communist markets in China and Europe. Due to the complexity of today’s work world, traditional theories of transfer pricing from the management or economics discipline may prove individually inadequate as the basis for executive decisions. Transfer pricing has many dimensions; it involves “much more than fiddling with prices on intra-company transfers of goods.” (Lessard, 1979) International firms may use transfer prices to recognize income in the low tax area or to diversify risk across countries and currencies thereby lowering the discount premium on cash flows. Below market rates on financial lending and hedging lower cost making the multinational more competitive and efficient (Dunning, 1998). With dynamic changes occurring nationally, regionally, and globally, corporate decision-makers must look at transfer pricing processes very differently. The complicated nature of pricing worldwide business transactions makes analytical decision support absolutely essential to allow processing of the enormous volume of data generated by global operations. The general purpose of this article is to identify the drivers of transfer pricing decisions. The specific research objectives are to utilize an interdisciplinary literature review to uncover the elements of worldwide transfer pricing policy and strategy and then to design a holistic framework for comprehensive analysis. An overview of the transfer pricing literature follows. Accounting and management studies draw support from economics and finance theory and respond to changing legal restrictions; while economics tries to guide public polices. This article tries to tie the strands together for an overview. The huge and growing volume of tangible and intangible goods involved in transfer pricing situations makes this an important area of study. In general, governments constrain transfer pricing decision choices through trade policy, foreign direct investment incentives, labor law, foreign exchange currency regulations, local content requirements, and traditional business practices. The accounting, reporting and regulatory agencies look for consistency across countries. From a research perspective the challenge is using existing theoretical lenses to examine the phenomenon and thereby gain better understanding of its uses and limitations. The focus is in a global context where the rules and elements of the transfer-pricing framework are dynamic.
Linking Organizational Goals and Objectives to Employee Performance: A Quantitative Perspective
Dr. Charles S. Duncan, Army Training Support Center, Ft. Eustis, VA
Dr. J. D. Selby-Lucas, Old Dominion University, Norfolk, VA
Dr. William Swart, Old Dominion University, Norfolk, VA
Training is a multi-billion dollar industry, and with the advent of the training technology revolution, and the possibilities it provides to business, government, as well as the academic communities, it seems important to determine if the money invested in training by these communities is providing the expected performance on the part of those who are trained. This paper examines training and performance in a quantitative perspective, by discussing the linkages of organizational goals and objectives to employee performance. Each year literally billions of dollars are spent on training. With the recent “explosion” of training technology, and the impact of the web on training delivery applications, industry, academia, and the government have become increasingly interested in the correlation between training programs, and performance expectations as a result of successful completion of courses. The necessity to study this relationship is heightened by the cost for training, which has now become a multi-billion dollar business. While many in the training world have been content with sending learners to traditional courses, consisting of standard classroom settings, and paying the tuition, and associated per diem, today training can be done without the necessity of leaving the work setting. The training possibilities resultant from training technology, have become wide and varied. The industry has gone from videotape in the 1960’s to web-based delivery some 40 years later. Each technological change has created training applications, and often, additional expenses. Thus, the necessity naturally evolved to start examining training programs not only from a content perspective, but also from a cost for performance return, view. While all may tout the value of training, few seem equipped to determine the corporate return on investment for the time spent learning how to do the job. Companies would not be profitable if they approached hardware procurement or business expansion in the same way they look at training expenditures. If a company is looking at a new procurement process or expanding the square footage of a plant, the analysis is expected to guarantee additional productivity through savings of time, improved outputs, or personnel savings. These enhancements would serve to keep the company competitive, insure sufficient stockholder return, and consequently insure the survival of the business. In the training world the, often haphazard, way of mixing training experiences has raised serious questions concerning the benefit of the training experience when compared to the impact on business outputs. If a customer chose to do business with a chain store operation such as clothing sales, building supply, or fast food, the customer would assume that the service offered, and the quality of product would be consistent across all outlets. This is often not the case bringing into question how performance can differ when all personnel who perform the same or similar jobs are supposedly trained to the same standard. If that same customer was shopping for a computer, and the computer components were built in multiple locations, including overseas, the buyer would count on the final product to be built to standard. What seems assumed in the hardware world doesn’t hold true in the training world. Consequently, training decision-makers are going to require better analytical tools to determine why equal training has not equated to equal performance. If you choose to take a serious look at training, you soon realize that its impact on the workforce is as important or more than all other systems and procedures associated with the design and development of a product or service. You simply cannot overlook the fact that when you train, you train to improve performance outcomes. The impact of these outcomes on external clients is the critical factor that either brings the client back to your business on a repeated basis, or convinces him to spend his dollar elsewhere. In a manner of speaking, each time the service industry interacts with a client that client is being conditioned to return, spend money, and advocate for the provider. On the other hand, if service is inconsistent, or poor, the client will be conditioned to avoid the provider’s place of business. So where do corporate planners turn to determine if their organizational goals and objectives are actually attainable all the way down to the client level of service? Organizational planners are “big thinkers” who set corporations on business azimuths. Organizational planners select goals, choose marketing strategies, and evaluate success. They don’t normally bounce their broad approaches to planning off the store workers who are the ones actually responsible for insuring success. It can therefore stand to reason that an organizational goal dealing with faster service, might run head long into another goal of consistency of product, if a store was not staffed sufficiently to implement the change, or if a store was not equipped to handle additional outputs in shorter time frames. Today, managers often look for training to prepare an organization for change. While training certainly has a place in change management, it is most important to first determine whether or not a company is facing a training requirement. Training should be used to improve the impact of the company’s product and service on the customer. Happy customers return, buy more, create better profit lines, and lead to happy investors. What happens though when training seems adequate, but performance is sub-optimal, with the net result being below standard outputs? This more complex performance issue does not succumb easily to training fixes, and requires more detailed analysis of the interrelationships of organizational performance objectives, and the dynamics of human performance. In order to examine why a company could fail to live up to its corporate expectations, you have to separate the possible causes of problems into separate and distinct areas. While inadequate training can be one source of poor employee performance, lack of proper equipment/facilities, insufficient manpower, improper organizational alignment, or even insufficiently motivated employees can also contribute to the failure of organizations achieving corporate standards. The idea of an executive looking holistically at performance improvement may seem somewhat foreign at first, but with the maturation of human performance technology thinking, has come the acknowledgement that the ability to produce consistent quality outputs involves examining the integration of the human dynamic within the structured work setting.
The Tower: An Experiential Simulation
Dr. Dietrich Schaupp, West Virginia University, Morgantown, WV
Dr. Barbara Parsons, Monongalia Health System, Inc., Morgantown, WV
"The Tower," a simulation exercise, is the evolutionary end product of work done initially to present the concepts of change, Continuous Quality Improvement (CQI) and empowerment to a group of manufacturing managers. The exercise was designed to help implement an organizational development initiative for a major international corporation. Over time, this exercise has evolved into a "self-contained" demonstration of organizational change that has universal applicability to many management and organizational functions. This experiential activity was originally designed to provide approximately a one-hour activity within a six to eight hour seminar, the purpose of which was to provide an organizational simulation in which strategic and operational decisions are made and assessed. The final product as presented here satisfies the following purposes: To engage in a simulation that will highlight the underlying concepts associated with CQI, empowerment, and organizational change. To explore the dynamics of teamwork, competition and organizational change. o highlight the importance of competition and its energizing effect. To validate the synergistic effects associated with teamwork and development. To be applicable in a variety of organizational settings, cultures and leadership styles. The "Tower" as an exercise has evolved into a broad philosophical statement about organizational survival, individual and organizational adaptation, and ultimately the impact of employee empowerment. Employee empowerment serves as the foundation for the simulation and the skeletal framework that gives body and movement to the endeavor. The authors have chosen to interpret the concept of empowerment through the eyes of a manager or supervisor. Simply stated, the concept will be presented in a fashion that allows it to be implemented at the organizational level of a work group or team. The authors realize this approach may seem over-simplistic and ambitious. However, having used this format with a broad spectrum of organizations and hierarchical levels, we feel the encouraging feedback from hundreds of managers, scores of organizational settings and institutions, warrants and gives credence to our approach. First, building the "Tower" is part of an expanded process that emphasizes organizational change and development. The simulation has been intentionally designed to be simplistic to facilitate quick learning through experiential activity that supports adult learning principles. This simple format and design also make it easy to use and adapt to many discussions of organizational and team behavior and management style. Empowerment has been interpreted to mean that employees "buy into" or take responsibility for their work-related tasks. Second, empowerment is interpreted to be the result of three basic factors: organizational alignment, mutual trust, and the ability to build a trusting environment through teamwork and problem solving. Finally, the "Tower" exercise validates the "Bountiful Harvest Model" (Figure 1) that serves to illustrate the activities of change and empowerment in the organizational setting. This model is presented as an analogy to gardening, which emphasizes the importance of viewing the organizational change process as a progression similar to that encountered when planting and tending a garden. It illustrates that the "harvest" is the result of learning, designing, planting, and cultivating. The gardening analogy, furthermore, stresses the importance of "laboring in the fields" in order to reap the bountiful harvest. Like the Tower exercise, the "Bountiful Harvest" Model addresses the implementation of an empowerment philosophy in the work setting using the basic skills of alignment, trust building, and problem solving through consensus decision-making. The focus of the model is the manager or supervisor. It is assumed that he or she has the greatest ability to influence the work group and, therefore, is the major force that influences the culture of the work setting. It is also assumed that all conditions may not be advantageous to implementing empowerment principles by the supervisor. However, regardless of organizational support for this approach, an advocacy role by the manager almost always results in positive outcomes at the work setting. Experience indicates that even with hierarchical culture in direct variance with this approach, its implementation at the work group level has been possible. Typically, opposition to employee empowerment from higher hierarchical levels is usually very low and generally resembles abdication, avoidance, or lack of awareness. As mentioned previously, empowerment is viewed as the result of three basic components or skills; creating a common organizational or work group alignment; building or maintaining an organizational climate of trust; and developing problem solving skills through consensus decision making. The "Bountiful Harvest Model" highlights each essential component which must be sequentially implemented.
The Weighted Fair Division Problem
Dr. Somdeb Lahiri, Indian Institute of Management and University of Witwatersrand at Johannesburg
The exact problem we are concerned with in this paper is of the following nature. There are a finite number of producers each equipped with a utility function of the standard variety, which converts an input into a producer specific output. An allocation of the input among the producers is sought which is Pareto efficient i.e. there is no reallocation which increases the output of one producer without decreasing the output of any other. This, as is very widely known, corresponds to maximizing the weighted sum of the utility functions subject to a resource constraint. Alternatively, the weights can be interpreted as exogenously specified prices of the separate outputs and then the problem reduces to maximizing the aggregate revenue subject to a resource constraint. Our analysis focuses on the relations between the optimal solutions and the price and aggregate resource pair. Further, we also study the effect on the former of varying the latter pair. Formal graduate education of most economists begins by an exhaustive study of consumer choice theory. The paradigm that is generally favored is one where given a vector of prices and income, a rational agent equipped with a utility function, maximizes it subject to the budget constraint that the prices and income imply. The utility function is supposed to reflect the preferences of the consumer. An adequate analysis of the theory for our purposes can be found in Luenberger . If the utility function is interpreted as a rule which transforms inputs into a desirable output, the same model of consumer choice can be used to model the behaviour of an agent who seeks to maximize output (:or for that matter revenue at exogenously given prices for the output he produces), subject to the cost of production not exceeding a given investment (which is irreversible). In this paper we investigate a closely related model which is meant to depict the problem of allocating a given amount of a single homogeneous resource among a finite number of producers i.e. the problem of fair division of a single commodity. A rather lucid introduction to the main concerns of this problem can be found in Moulin and Thomson . The exact problem we are concerned with in this paper is of the following nature. There are a finite number of producers each equipped with a utility function of the standard variety, which converts an input into a producer specific output. An allocation of the input among the producers is sought which is Pareto efficient i.e. there is no reallocation which increases the output of one producer without decreasing the output of any other. This, as is very widely known, corresponds to maximizing the weighted sum of the utility functions subject to a resource constraint. Alternatively, the weights can be interpreted as exogenously specified prices of the separate outputs and then the problem reduces to maximizing the aggregate revenue subject to a resource constraint. Our analysis focuses on the relations between the optimal solutions and the price and aggregate resource pair. Further, we also study the effect on the former of varying the latter pair. The axiomatic study of resource allocation problems started off with the seminal work of Nash. Peters shows that a fair division problem such as what has been discussed above is representable as a kind of problem that Nash based his study on. In Lahiri[1996, 1998] we note that the converse is also true: a problem of the kind that Nash was concerned with is representable as a fair division problem. The significance of this paper lies in adapting the methods used in the study of consumer choice to analyse problems of fair division. Like consumer choice theory we are able to establish the upper-hemicontinuity of both the weighted social choice rule and the dual weighted social choice rule and the continuity of the primal and dual value functions. Sensitivity properties of the value functions, similar to the sensitivity properties of the indirect utility function of consumer choice theory (i.e. the primal value function) and the expenditure function of consumer choice theory (i.e. the dual value function) are established in this framework. However, the primal value function for fair division problems seems to behave like the expenditure function of consumer choice theory and the dual value function (i.e. the expenditure framework) in our framework has a behaviour akin to the indirect utility function of consumer choice theory. In the literature concerning global optimization, there has been for sometime now a problem called the “separable resource allocation problem”,which involves allocating a homogeneous resource among several productive activities,in order to minimize aggregate costs. This problem has been discussed from the stand point of computing optimal solutions, by Haddad .The problem we study in this paper, is formally similar to the separale resource allocation problem. A consequence of this analysis is the observation that classical consumer choice theory in general and its associated analytical techniques in particular are very rich in scope and content.
Venture Capital and Entrepreneurial Finance in China: A Case Study
In 1977, Mr. Wu was employed as the head carpenter for a middle school in Huai Nan, a city with a population of about one million in Anhui province of China. His monthly salary was 60 RMB (less than $8 at today's exchange rate). He took care of the school's needs for furniture such as desks, bookshelves and occasionally made furniture for the teachers. The following year, Mr. Wu started his own small business. Initially, it wasn't a brilliant product idea or a new innovation that motivated him to switch careers from a state-employed worker to a private entrepreneur. It was simply that Mr. Wu and his wife both were hoping for a better standard of living for themselves. Mr. Wu set up shop on a sidewalk. He would show up with his carpentry tools and supplies on the same corner of that sidewalk every day, take orders for small furniture and make them on the spot. Mrs. Wu took a job as a tailor to make sure that the family made it through these lean years. In that time period, traditional "sidewalk" businesses were prohibited in China. The communist government considered these businesses "bourgeois enterprises". However, despite being illegal, Mr. Wu's business was initially too small to attract government officials' attention. His was a tiny traditional street workshop with a single owner operator. From the local communist party's point of view this type of operation did not fit in the mold of typical capitalist businesses which according to that dogma exploit workers to generate corporate profits. Despite this, the survival of his business was by no means certain. After all, he was there on the street without a license or an operations permit from the authorities. Mr. Wu worked hard, producing pieces of furniture that met his customers' expectations on quality and cost. Repeat business and referral orders continued to pour in. Soon he was expanding and making more elaborate Chinese sofas, some with traditional hand carved designs. He employed a few workers and was no longer too small to be ignored by the authorities. In fact within a few years, he was running an unregistered private business, a "geti-hu" with about 100 employees and was part of an underground market-driven economy within the Chinese centrally planned system. Survival as a "geti-hu" business depended on the Chinese government's tolerance for non-communist businesses. In fact, there was a significant chance that the communist regime may see fit to shut all such operations overnight. History was on Mr. Wu's side. In the early 1980's China was experimenting with different methods for providing financial incentives, so that its state enterprises may run more efficiently. The word came down to all levels of government agencies to attempt to privatize some operations. Mr. Wu took advantage of this new regulatory environment and negotiated a deal through his old contacts at the middle school to register his company under the education commission. Once more he was making desks and bookshelves for the schools. However, this time around, the education commission orders were just a side business, one that allowed him to legitimately attend to his consumer furniture business. Mr. Wu was in effect using school grounds as production space for his furniture factory. Chinese authorities had some encouraging success with privatization schemes under the umbrella of state agencies and were gradually moving farther toward a market driven economy. By 1983, in a major move toward this end, it became legally possible to register and operate a private company in China. Two years later, the government forbid its agencies from operating private companies. The combined effect of these two regulatory policies forced Mr. Wu's furniture factory out of the school grounds and encouraged him to establish one of the first private companies in Huai Nan City. As an independent company, Mr. Wu's first challenge was to find factory space. At this time, there were simply no markets for leasing or purchasing factory space in communist China. In fact, in early 1980's private ownership of real estate, except in a few cases was not allowed by the communist authorities. More or less everything was owned by the state. Mr. Wu facing eviction from the school facilities came up with an innovative plan for relocating his factory. He worked out a deal with a local senior center and moved to their facilities. The senior center was sponsored by the Huai Nan Welfare bureau and provided meeting and recreational space for elderly residence of Huai Nan. Mr. Wu agreed to shoulder the operating costs of the senior center. In return, he was given access to the center's huge grounds and land-holdings. Sponsoring the senior center not only provided factory space, but also allowed his firm to qualify for tax-exempt treatment. The drawback was that the company remained dependent on another public institution for factory space. Up to 1990, Mr. Wu did not have access to outside sources of venture capital. He had to rely mostly on retained earnings from his venture and to a small degree on his family's assets for meeting his factory's capital needs. The funding situation began to improve in the early 1990's. The first development was that some capital became available through government banks for mortgage borrowing. There were two limitations on this source of venture capital: 1) The funds were rationed by the central government and allocated to each region based on the central plans for that region's economic development and were often earmarked for specific projects or industries--so that some regions simply did not have any funds available for those entrepreneurial businesses that were not included in central government plans. 2) Mortgage finance could not meet the funding needs of most entrepreneurs. That is, generally, mortgage finance is suitable only for ventures generating a relatively stable flow of income and those that need capital for real estate purchases. Since Huai Nan city, as one of the three major energy producing regions in China and the major supplier of Shanghai's electricity was an important strategic town, its banks obtained an adequate supply of funds from the central government. In fact, the centrally planned capital allocation to this town exceeded the allocation to other Chinese cities of same size.
Strategic Decision Making In Today’s Managed Care Environment
Strategic planning in health care today has become extremely important. In selecting health care coverage, consumers see managed care as a double-edge sword. On the one hand, the cost of a managed care plan is much more appealing than traditional indemnity plans. One negative impact is losing the freedom of choice in selecting a particular provider, who many not participate in the network. What makes this even more complicated, is when business and government mandates or requires consumers to join a managed care plan. In this era of market based managed health care delivery, effective communication is more important than ever before (Root and Stableford, 1999). The article goes on to discuss how this is even more complex with the Medicare and Medicaid populations. Marketing refers to attempts to manage behavior by offering reinforcing incentives and/or consequences in an environment that invites voluntary exchange (Rothschild, 1999). The level of satisfaction is correlated to the ability to select a plan without coercion. Marketing strategy will play a vital role in healthcare decision-making. Marketing strategies that involve segmenting, mass customization, and competitive pricing will come out ahead (Veit, 1999). Brand loyalty in the Medicare marketplace is what most managed care organizations strive for. This has become extremely difficult with so many plans leaving the Medicare market (Health Affairs, 2000) because of reduced reimbursements from the government. One essential strategy is using multi-channel communications that include printed materials, public service announcements, seminars and workshops. Health plans must address long term strategy issues such as entering and leaving certain markets. There are economic, social, and ethical issues associated with these decisions. A good example of a vision statement in the managed care industry is United Healthcare, which states that it is committed to the health and well-being of all its members. The mission focuses on quality of care, partnership with providers, and commitment to shareholders and employees. Strategic decision making at United Healthcare includes federal and state legislation, alliances and partnerships, product enhancement, network and provider tactical planning, and global competition. Survival plays a key role in the managed care industry. Many smaller health plans have either failed or been acquired by larger plans. Strategies in decision making come into play here. Larger plans look for geographical growth to compete, while smaller plans may want to be acquired to maximize profits and meet the needs of shareholders. Economics of scale are essential in strategic decisions. Managed care organizations are under increasing pressure from their stakeholders to make more money and run as efficient and lean as possible. At the same time, corporate social responsibility has become equally as vital to the success of an organization (Reich, 1999). Medicare (Managed Health Care, 2001) will continue to be a target market for managed care organizations. Over the next 60 years, 77 million Americans will enter retirement (Anonymous, 1999). In order to best understand the complexities of the managed care industry, the paper will focus on how the various markets differ, the role of government, and all the stakeholders who shape the decisions of consumers. In determining the level of satisfaction among Medicaid populations, it should be noted that some states in the United States have passed laws requiring managed care enrollment, while some continue to offer managed care as an option. Further, because of poor mail response, language barriers, and limited telephone access, results tend to be misleading. Once the decision is made to abandon a market position, which has been common for managed care plans of late, a promising alternative needs to be identified (Greve, 1998). The theory has been tested and supported by analysis of new radio formats in the United States. Some of the important criteria that is used to determine the level of acceptance and satisfaction in the managed care industry include: access to providers, quality of care, level of customer service, credentialing of providers, cost of care, out-of-area benefits, health education, and ease of administration. The success of managed care organizations are measured here. Measuring short term objectives and operational tactics are of extreme importance. This involves significant strategic decision making on the part of managed care organizations. The results are made available to consumers who in turn, should make educated decisions regarding choice. This data is much easier to obtain for the Commercial population, than either the Medicare and Medicaid populations.
An Examination of Management Philosophy
Dr. Turan Senguder, Nova Southeastern University, Ft. Lauderdale, FL
What is your personal management philosophy? The first job of the management is to make a business perform well. The management takes given resources -- such as manpower, money, machine and materials -- and orchestrates them into production to accomplish organizational goals. When employees’ basic human needs go unsatisfied, their psychological and physical health as well as their productivity suffers. The participative management meets such needs. Participation in an organizational development is likely to include problem solving, decision making and goal setting activities. Employees may participate in any or all of the areas at any one time. Management should share decision-making authority and responsibility with its workers. Management should also communicate openly and candidly. However, this approach may not work well with all employees. Some workers can take only limited responsibility. They prefer to let others shoulder the main burden of responsibility. Therefore, management should differentiate talents and energies of their workers. Each worker is uniquely complex; To help workers achieve their best performance level, management must understand each worker’s needs. Needs are what make all of us tick. Workers are motivated to behave in certain ways because of their need for money, security and status. Work helps to satisfy a worker’s physical and emotional needs. Weekly paychecks, for example, enable workers to obtain food, clothes and housing. Besides security, workers may also seek status through promotion, a merit salary increase, the learning of new skills, and the invention of a new product. Today, the job of managing often is looked upon as the job of getting work done through others. However, managing means making it possible for others to work easily and productively, while at the same time bringing out the best in them. Management should help its workers become achievers through training. Mistreating workers will cause absenteeism and high turnover, shoddy workmanship and weakening of the will to work. Managers should not isolate themselves from their workers. Management should clarify each worker’s duties so that each worker will be able to perform their duties in the proper way. Workers should also be given more authority to develop their own way of doing business. This will encourage workers to become more productive. This way they will feel that they are part of the team. Workers should be given recognition. Recognition can be given by taking workers’ ideas and suggestions to heart, by judging workers rigorously on merit and rewarding them accordingly, by giving workers greater responsibility as soon as they are ready for it, and by applying the Golden Rule: “Treat others as you would have others treat you.” By building up workers’ self-image and improving their status, managers are likely to keep growing in stature as well. Workers’ loyalty is a very important aspect in business. Some management believes that its workers should be blindly loyal. Management expects workers to stick by them regardless of how the workers are treated. Such false loyalty weakens rather than strengthens a business. True loyalty means working up to one’s capabilities, doing the best one knows how. True loyalty should be to the job, not to the management. For example, at The American InterContinental University in Atlanta, GA, the director of financial aid was asked by the management to sign the students’ financial aid papers whether or not the students were qualified for a loan. The director refused to do it and she was fired. Then, she was rehired after the college employed unsuccessful replacement. True loyalty should be to the job, not to the management.
Measuring Destination Attractiveness: A Proposed Framework
The driving force of the tourism industry is represented by the attractions offered by the destination. Travelers have no reason to visit destinations that have nothing to offer. Tourism research has demonstrated that attraction studies are necessary in the understanding of the elements that encourage people to travel. Achieving the goal of measuring destination attractiveness requires the understanding of its components and their relationships. There are two ways of examining attractiveness: by studying the attractions or by exploring the attractiveness perceptions of those who are attracted by them. As competition among tourism destinations increases and tourist funding decreases, it is of vital importance to evaluate the inventory of existing attractions and the perceptions that travelers have of those attractions. Tourism literature provides only a limited number of studies addressing destination attractiveness. The purpose of this study is to explore past studies on destination attractiveness and propose a procedure for its measurement. The principles of regional analysis, tourism planning, and tourism attraction research provide the foundation for such evaluation. The proposed procedure is based on the assumption that tourism is a system, which is the result of supply and demand interaction. The tourism phenomenon consists of two essential components: an origin and a destination (Uysal, 1998). The first is labeled as tourism demand (representing the tourists) and the second is described as tourism supply and includes elements such as natural resources, cultural attractions, and historical monuments. In the past, tourism demand has been considered the sole variable of importance by local and national governments. Indeed, tourism policy makers determined visitation trends and studied tourist behavior to measure the contribution of tourism to the economy and to formulate and implement resource allocation plans. The economic benefits of tourism development have been recognized for decades in terms of revenues, taxation, and employment. The economic outcomes of tourism demand have long been the origin of mass tourism promotion and development, especially in developing countries. The analysis of tourism supply has gained momentum since the erosion of tourist resources caused by mass visitations. Since then tourism has been defined as a landscape industry, and regarded as fully integrated with its environment. This new perspective has served as a catalyst for change in long-term planning and policy making. The tourist product is comprised of elements such as attractions, services, and infrastructures. Together, these elements comprise the total appeal of natural and manmade characteristics that may exist in the area. Because they differ in nature, researchers have found it difficult to develop a measurement that is capable of examining, evaluating, and comparing many diverse resources, such as theme parks and historical monuments. For example, the intrinsic characteristics, such as use, contribution, and appeal of a lake differ from those of a museum. Each museum or lake is unique in its features and appeal and cannot be appraised as identical to other tourism resources labeled with the same name. Despite this, a universal way of measuring the various tourism elements is crucial if the attractiveness of a given area is to be evaluated. There are two typologies of demand studies. The first is represented by the investigation of the actual visitation patterns; it is objective and uses secondary data. The second measures the perceived attraction generated by a single resource or by a region or destination. The studies related to the second typology investigate perceptions, are more subjective in nature and use primary data. The most popular demand measures for determining the attractive power of a region or destination include: number of visitor arrivals or number of participants; tourism expenditures or receipts; length of stay or tourist nights spent at the destination site; travel propensity indexes; and tourist preferences. Generally, demand indicators are easily available and very simple to use in terms of comparability and homogeneity. Demand measures are often used to demonstrate that one region is more attractive than others because it receives more visitors, generates more tourism receipts, or encourages visitors to stay longer. This approach is based on the belief that visitation or consumption characteristics are relative to the attractiveness of the area (Oppermann, 1994). In short, the conjecture is that the greater the attraction power of a destination, the higher the number of tourists (and/or the length of stay or the generated tourist receipts). Nonetheless, visitation might be influenced by variables other than simply the attractiveness of the destination. For instance, economic recessions and international armed conflicts have proven to deeply influence visitation patterns despite the absence of changes in the overall appeal of tourist destinations (Cha & Uysal, 1994).
Predicting Leaders and Team Leaders in Times of Great Change
Dr. Barbara E. Kovach, Rutgers University, New Brunswick, N.J.
People in organizations have been experiencing unprecedented change in the last decades, as a result of competition from domestic and foreign settings and new technological capabilities. As a consequence, organizations have been seeking means to heighten their productivity. Two of the most frequently touted results of this search are a call for leadership and more effective teams. Yet as psychologists review the literature in the mid- to late-1990s, one after another comments on the lack of data and/or lack of research over the preceding 30 years. We want people who know how to cope with change, but know little about them. We want leaders who can live in a changing field, but do not know how to shape our selection procedures to cull these individuals from the managerial pool. We want good teams, but know little about who is a good team member and/or a good team leader. In response to this need and the research literature’s focus on individual perceptions and expectations as a key to understanding peoples’ organizational behavior a set of instruments were designed two decades ago and since tested on over 5,000 individuals. The first two instruments, and key to the series, are the Personal Expectations Inventory (PXI, Kovach and Morris, 1980) and the Organizational Expectations Inventory (OXI, Kovach and Morris, 1980). Now, given two carefully-monitored samples of relatively similar composition and size, one from the 1980s, and one from the 1990s, and one much smaller sample of fast-trackers (Kovach, 1989), will an analysis of their scores answer following questions: (1) can a critical subset of scores from the early sample, predict the strong performers (as independently evaluated) in the second sample? and, (2) do the results relate to perceptions of leadership and teamwork? Results do demonstrate that strong performance is predictable from data based on these instruments and discussion explores the relationship to both leadership and teamwork. In short, we can predict “starlike behavior” in individuals in different companies within the same industry, based on measures of personality, expectations of self and perceptions of others, over a span of nearly 20 years in times of great organizational change. We have been/are in a time of great change organiationally and almost every other way (Drucker, 1980, 1995; Kami, 1995). Most of our managers have not turned out to be strong leaders or even adequate managers (Hogan, Curphy & Hogan, 1994). Since the 1970s we have continuously lost marketshare in our established markets and also face new disasters such as the dotcom failures bringing a new level of change into our economy. . All of this prompts the need for change on the part of our organizations. The primary cry is for leaders and better teamwork. However, we clearly do not know how to select leaders and we do not, in particular, know how to recognize good team leaders (Kovach, 2001). Hence, there are, in fact, good leaders among us, (Gardner, 1990) but many are not identified nor honored by their organizations. How do we improve our selection and reward processes so that we have more good leaders at the helm of both our organizational units and our teams? Twenty years ago, a small group of academics met in Ann Arbor to discuss questions related to leadership. At that time, their focus was more on the individual than on groups or teams, or even leadership per se. Thus, the group’s discussion focused more on the means of increasing self-awareness, and giving individuals the tools with which to place themselves in appropriate positions based on their own strengths, rather on the process of selection per se. To make this possible, members of this group developed a series of instruments, headed by the PXI, the Personal Expectations Inventory (PXI, Kovach and Morris, 1980) that could be such a tool for individuals. Now at the end of 20 years, it turns out that this tool, not only increases self-awareness (documented by hundreds of managerial comments at all levels) but also predicts leadership and, moreover, distinguishes organizational leaders from team leaders, although since this latter is a matter of degree, it is not always a clear-cut distinction. So what do leaders look like? Leaders, on our scale, are Integrators (one of the three overall categories amounting to about 1/3 of a more-or-less educated poulation). Integrators are distinguished from the more numerous Producers, by a fineness of discrimination in thinking. For example, they are able to discriminate between fact and theory, able to tell the “what if’s” from the “this is the way it is,” and thus able to make good judgments on current information, not bound by dogma, custom nor culture, or at least able to tell the difference between what is important to acknowledge for the moment vs. what exists for all time.
Practical-Theoretical Approach in the Application of Theory Models of Organizational Behavior
This paper discusses the idea of incorporating a practical-theoretical approach to the application of theory relevant to the instruction of organizational behavior. In an effort to move beyond the mere traditional theoretic-based approach of instruction, the practical-theoretical approach brings to life the concepts, allowing the student to experience the learning within the controlled confines of academia. The paper identifies two important components necessary to the practical-theoretical approach: (1) The identification of a commonality among the students and (2) the discovery of meaningfulness in the issue being discussed. Commonality refers to something each student has in common. Meaningfulness refers to anything that is important to each student. The organizational behavior theories used as an example in this paper include Bandura’s Model of Organizational Behavior and E. F. Harrison’s Rational Model of Decision Making. The Model of Organizational Behavior is used as a foundation throughout the course to establish a clear understanding of the behavioral dynamics that occur inside the organization. The practical application of the theory-based Rational Model of Decision-Making brings to life an understanding of the theory that implicitly applies to the student. The use of the practicum supports the importance of the practical-theoretical approach to pedagogy. In the ongoing effort to bring innovative methodologies into the traditional classroom, one must sidestep the mainstream, the status quo, and consider the appropriateness of practicality. The American Heritage Dictionary (2000) defines the term practical as “capable of being used or put into effect; useful.” Academic ideology should move beyond a theoretic-based approach toward a practical-theoretic foundation, bringing to life the concepts that typically are mechanically discussed and tested through traditional case study examination. Recognizing the existence of a multitude of motivation and leadership theories that are the basis of managerial curriculum, this article does not propose that traditional approaches to theoretical learning should be discarded. Instead, it is proposed that applicable theory be closely tied to the professional aspects of each and every student. This clearly becomes a difficult task when considering the diversity of today’s students. The traditional approach to academics may not result in improvement in pedagogy any more than merely lecturing to “students about relevant knowledge and theory suffice for the development of professional practice” (Ballantyne, Bain & Packer, 1999). Today’s classroom is replete with a broad range of professional and personal experiences that could become an obstacle to the suggested approach. One must, therefore, overcome the vast experiential spectrum through the identification of commonality among the learners. This is easily accomplished by using the one discernible aspect of commonality: the academic environment itself. Using this approach allows the student to gain a greater appreciation for the utility of the theory and an enthusiasm for subject as a result of the practical application (Johnson, 2001). Both students and the corporate world are demanding a more practical approach to learning, including the use of case studies and simulations that facilitate the practical-theoretical approach (Flamm, 1999). This article will discuss the practical-theoretical approach using two theories common to the managerial academics: Albert Bandura’s “Model of Organizational Behavior” and E. F. Harrison’s “Rational Model of Decision Making.” At the conclusion of this article, it will become apparent that any and all of the managerial theories can be taught using the practical-theoretical approach. An important aspect of the approach, as earlier noted, is to find commonality among the students. It is also quite helpful to discover meaningfulness in the particular example being utilized. By meaningfulness, I intend to provoke ownership of the issue being discussed; something is important to each of the students. Bandura’s Model of Organizational Behavior (Figure 1) identifies three components: individual, group and organizational constraints. This social learning approach identifies that “behavior can best be explained in terms of a continuous reciprocal interaction among cognitive, behavioral, and environmental determinants” (Luthans, 1998). Simply stated, individuals come into organizations, are placed into groups to accomplish organizational goals, and are limited by organizational constraints. This is the appropriate time to use the practical-theoretical approach through simplification and clarification. In place of demanding memorization of terms and processes, I make use of the students themselves to bring the theory to life.
Using Organizational Behavior Theories To Manage Clinical Practice Guideline Implementation
By building on sociological and organizational psychology concepts versus reinventing the wheel, healthcare administrators can develop the right mix of management strategies to assist in the adoption and implementation of clinical practice guidelines (CPGs) into their organizations. Physicians control approximately 80 percent of how and where medical services are delivered. Therefore, concerns over healthcare costs and delivering quality, efficient, and effective medical care have led to a growing interest in the standardization of and accountability in health care delivery by altering physicians' practice patterns through the use of clinical practice guidelines (CPGs). It is estimated that a CPG costs an organization between $100,000 and $500,000 to develop. As such, there is great concern as to why CPGs have been remarkably unsuccessful in influencing physician practice patterns (Greco & Eisenberg, 1993; Kosecoff et al., 1987; Lomas et al, 1989). The primary reason cited for this lack of success has been the disproportionately little attention paid to CPGs’ implementation relative to their development and dissemination (Fang et al., 1996; Mittman et al., 1992). Understandably so. Implementing a CPG guideline is far more difficult than its development because implementation requires widespread physician behavior changes, which is a complex undertaking (Epstein, 1991; Main et al., 1995; Sisk, 1998). The intent of this paper is to assist healthcare managers understand why physicians are slow to apply CPGs in their medical practices by taking well-established theories from the behavioral science literature and applying them to current research. Its purpose is not to reinvent the wheel. Although much interest has been generated in the last few years by management to understand physician behavior, it still remains there is "little direct evidence to suggest how amendable physicians are to change and under what circumstances they alter their practice behavior" (Geertsma et al., p. 752). The Agency for Healthcare Research and Quality (1999) states that "translation of research findings (i.e., CPGs) into sustainable improvements in clinical practice and outcomes remains one of the largest hurdles in improving quality, efficiency, effectiveness and cost-effectiveness of health care." Because of this limited knowledge of physicians' motivation or barriers for accepting or not accepting CPGs in their clinical practice, research efforts have begun to understand why physicians do not follow CPGs so methods to obtain physician adoption (i.e., use of a specific CPG in his/her medical practice) may be improved (Borbas, et al., 2000; Slotnick, 2000; Smith, 2000; Weingarten, 2000). Due to the recent recognition of the importance of implementation issues, much interest has been generated in researching physicians’ behavior and strategies for modifying that behavior through successful guideline implementation (Guideline Implementation and Evaluation, 1999; Mittman et al., 1992). Davis and Taylor-Vaisey (1997) conducted a systematic review of the literature from January 1990 to June 1996 to determine the effect of various factors on the adoption of practice guidelines. The factors identified by the researchers that affected the adoption of guidelines included the quality of the guidelines, the characteristics of the health care professional, the characteristics of the practice setting, incentives used, regulations and patient factors. The researchers concluded that there were serious deficiencies in the adoption of CPGs in practice and that future implementation strategies must overcome these failures through an understanding of the forces and variables influencing practice. In March 1996, an international collaboration between ten partners from seven European countries was formed around the core issue of finding the means of facilitating better transfer of research findings into clinical practice using guidelines. In February 1999, the project, titled Changing Professional Practice (CPP), issued its report, “Bridging The Gap Between Science and Practice: How To Change Health Care Provider Behavior Through Implementing Clinical Practice Guidelines.” As part of the CPP Project’s research, Pagliari and Kahan (1999a) stated that “a large number of studies have investigated perceived or attitudinal barriers to the implementation of health care technologies…but relatively few of these have focused specifically on clinical guidelines…” p. 4.
Market Orientation, Organizational Competencies and Performance: An Empirical Investigation of a Path-Analytic Model
Results of a survey of 159 acute care hospitals were used to test examine the specific ways in which market orientation of an organization contributes to the creation of organizational competencies that contribute to superior performance. Results indicated that market orientation makes a significant contribution to the creation of a number of organizational competencies which in turn lead to superior performance in the areas of cost containment and success of new services. Implications for managers were also addressed. Recently, researchers have shown an increasing interest in the relationship between market orientation and organizational performance (Jaworski & Kohli, 1993; Slater and Narver, 1994; Greenley 1995a, 1995b, Kumar, Subramanian and Yauger, 1997, 1998). Market orientation is defined as "the organization wide generation of market intelligence, dissemination of intelligence across departments and organization wide responsiveness to it" (Kohli & Jaworski, 1990, p. 3). More specifically, market orientation involves generation and dissemination of market intelligence that is composed of information about the customers and competitors, sharing of this information among all functions in an organization, and rapid managerial action in response to this information. An organization that is market oriented also possesses a strong long-term orientation to ensure that preferences of current and potential customers are identified as also the ability of current and potential competitors to satisfy these preferences. Finally, a market oriented organization also exhibits a determined orientation toward profitability to ensure that the resources necessary to support the information collection, dissemination and organizational response activities are available (Kohli and Jaworski, 1990; Narver and Slater, 1990). While researchers have suggested that market orientation is a means of obtaining a sustainable competitive advantage. they have not provided empirical evidence to why it has such impact beyond its influence on organizational activities (Gima, 1996). It seems reasonable to argue that the general positive relationship between market orientation and organizational performance is perhaps the results of those activities involved in becoming market oriented, that provide a unifying focus for efforts and projects of individuals within the organization, thereby leading to superior performance. The objective of this study was to examine the impact of market orientation in terms of the creation of specific organizational competencies that may lead to superior organizational performance. The study examines the contention that an organization's performance will depend on the extent to which its effort to become market oriented leads to the creation of certain organizational competencies which in turn facilitate the implementation of a value-creating strategy (Hitt, Ireland and Hoskisson, 1995). The market orientation-organizational competencies-performance linkages was examined through a path analytic model using sample from acute care hospitals. In their seminal study Narver and Slater's (1990) found that market orientation consists of three behavioral components--customer orientation, competitor orientation, and interfunctional coordination--and two decision criteria--long term focus and profit emphasis. They conceptualized an organization's degree of market orientation as the sumtotal of its emphasis on these five components. Elaborating on the components of market orientation, Narver and Slater noted that customer orientation and competitor orientation include all the activities involved in acquiring information about the buyers and competitors in the target market and disseminating it throughout the business(es). Interfunctional coordination is based on the customer and competitor information and comprises the business's coordinated efforts, typically involving more than the marketing department, to create superior value for the buyers. The organization also needs to prevent its competitors from overcoming the buyer value superiority it has created, hence a long-range investment perspective is implied in market orientation. Finally, profitability ensures resources necessary to pursue a market orientation. For non-profit organizations an analogous objective would be survival and growth. These findings were later confirmed by Kumar, Subramanian and Yauger (1998) who also noted the same five components of market orientation and found that these components consist of sets of coherent organizational activities that are different, yet synergistically dependent on each other (Kumar, Subramanian, and Yauger, 1997).
Caribbean and US Shopping Behavior: Contrast and Convergence
Dr. J. A. F. Nicholls, Florida International University Miami, FL
Dr. Sydney Roslow, Florida International University Miami, FL
Dr. Lucette B. Comer, Purdue University, Indiana
Situational influences devolve from factors that are pertinent to a particular time and place and specific to a potential purchase. In this study, patrons of a mall in the United States are compared with patrons of a mall in Trinidad in respect of demographic attributes, situational variables, and shopping behavior. There were wide-ranging differences between the two populations in respect to the possession of situational variables and purchase behaviors, although the difference in demographics was limited to a single attribute. Since all 17 situational variables exhibited significant statistical differences, this suggest that within the United States population situational factors are operating dissimilarly than for the population in Trinidad. In light of these findings, alternative ways in which merchants might react to these findings are suggested. From studies of consumer behavior, readers are taught that individuals have needs and wants that they strive to satisfy. In an exchange economy, people shop to acquire the goods and services which they believe will satisfy these needs and wants. A retailer with international operations may be interested in knowing whether there is any commonality in the shopping behaviors of consumers in different parts of the world. This study constitutes an initial step in exploring the question of commonality in global shopping behavior. Consumer shopping behavior may be influenced by internal and external factors. Thus, a basic factor is consumers= search patterns. The extent to which individuals utilize particular forms of transportation, allocate time to the shopping process, and consider themselves safe from crime, among others, is investigated. Situation factors also influence shopping behavior. Belk (1975) suggested that broad areas, such as temporal perspective, physical surroundings, antecedent states, social surroundings, and task definition, all might affect consumer choice. Assael (1992) has gone so far as to state that situations directly affect Aconsumers= perceptions, preferences for brands, and purchasing behavior@ it is productive to view consumers from a situational point of view. In this exploratory study, mall shoppers in the United States, a large market, are compared with those in Trinidad, a small market. These two sites were selected because of the commonality of language and the fact that shopping was conducted in malls in each instance. A questionnaire was designed and tested to cover many aspects of shopping. The research instrument was administered to 403 shoppers in the United States and 166 in Trinidad. The instrument included motivations for shopping, frequency of shopping, time spent in shopping, and products purchased. Patron behaviors in the two malls were compared over a wide range of factors. Some convergences, together with understandable contrasts, were found in these comparisons. The results may be of interest to international merchants, since they have implications for inventory management, site layout, and sales promotion, all of which can be controlled by retailers. Research has established that individuals in different cultures exhibit similarities and differences in their shopping experiences, their extent of purchase, and their personal attributes (Nicholls, Li, Mandakovic, Kranendonk, and Roslow 2001; Nicholls, Li, Mandakovic, Roslow, and Kranendonk 2000; Nicholls, Li, and Roslow (1999); Nicholls, Roslow, Dublish, and Comer 1996; Samli 1995; Weinstein 1994). If retailers can understand the influences surrounding purchase decisions, they may be able to effectuate more purchases. For example, moods influence customer purchase decisions, so if retailers can influence moods, they may be able to affect consumer behavior (Gardner 1985). The paper is presented in six sections. In the first section, the literature relating to situational variables is reviewed. The second section describes the research methodology used in this study, while the third section enumerate the research questions. The results of the surveys of patrons in the malls in the United States and Trinidad are presented in the fourth section. In the fifth section there is a discussion of the implications of the findings. The sixth section discusses the limitations of the study and suggests possible extensions of research. Consumers may come to shop with thoughts already on their mind, i.e., antecedent states. The antecedent states features of a situation include moods, such as anxiety, or conditions, such as fatigue. Park, Iyer, and Smith (1989) have reported that store knowledge affects shopping behavior. This antecedent knowledge can result in brand switching, unplanned purchase, and the amount purchased. Chronic stress influences consumers= sensitivity to price and their comparison shopping behaviors, according to Anglin, Stuenkel, and Lepisto (1994). Consumers steal software, even when they realize that such behavior is unethical (Simpson, Banerjee, and Simpson 1994). Fear of crime cuts across the demographics of age, income, and education (Nicholls, Roslow, and Comer 1994). Personal values may affect consumers< antecedent states in different ways (Wang, and Rao 1995). Since this fear may deter retail patrons from consummating purchases, it behooves management to ensure that patrons feel safe in the mall.
Dr. Josef Neuert, Prof. Achim Opel, University of Applied Sciences Fulda, Germany
Dr. Dietrich L. Schaupp, West Virginia University, Morgantown, WV
The increasing globalization of societal and economic activities around the world has generated much interest in and a need for joint partnerships between international businesses and educational institutions that teach management education. Of major interest in business today is how to structure international business operations in order to gain competitive advantages in international markets. As more and more companies expand into international markets, it is imperative that managers become prepared to discharge their duties in a global context. This paper first examines specific cultural dimensions of influence on international management. It then describes the West Virginia University – University of Applied Sciences Fulda joint EMBA program, which was designed to create a greater awareness and understanding among students for intercultural management aspects, especially within Germany and the European Union. The discussion of this program is followed by the outline of the basic research approach of the joint German-American learning experience. Finally, after describing the design of the field study some major results and conclusions are presented. Assuming that management perspectives and practices are universal most certainly will result in unintended consequences for international business operations. There are, indeed, significant differences between managing an international company and a domestic one (Fatehi, 1996). Major differences pertain primarily to various perspectives regarding cultural, legal, and communicative expectations found in international business settings. One major task of management can be described as the success-oriented steering of organizational processes within a given and/or developing system of objectives (Neuert, 1987; 28). It can be concluded from this statement that the identification of both the existence and the consequences of international dimensions of influence on management practices is necessary to increase a company’s success in an international context. The social-cultural dimensions of management consider that social-cultural situations and developments, such as customs, habits, and codes of conduct, have an enormous normative influence on human behavior. Such differences can lead to the fact that, for example, instruments of motivating personnel performances (e. g. monetary incentives, symbols of status etc.) result in different outcomes in different countries and cultures. Another major problem in a global market and business environment is the fact that there exist different, and often contradictory, legal regulations in relating to many areas of business and management. So, for example, the regulations of labor law, competition law, tax law, as well as the regulations of financial accounting, differ greatly despite all efforts of harmonization. Differing legal regulations ultimately mean that managerial decision-making processes in an international context have to be adjusted to different sets of legal norms. Furthermore, thus far the legal environment has played a significant influencing role in how international companies are managed. Finally, one can refer to apparently “trivial” variables related to language and foreign language skills. However, it is a matter of fact that, for example, within the fifteen member countries of the European Union alone there are eleven different languages spoken. And as far as the “core” countries of the European Union (Germany, France, Great Britain, Italy and Spain) are concerned, each adult citizen is able to communicate in only “1.4 languages” on average (Informationsdienst des Europäischen Parlaments, 1993). This clearly means that the average citizen of the European Union is hardly able to communicate in any other language than his mother tongue. In this context, intercultural aspects gain serious relevance. Clearly, difficulties in international business relations, including the abolishment of business connections and the impossibility of setting up business connections in the first place are very often caused by cultural and communicative barriers (Schoppe, 1994).
An Ex-Post Investigation of Interest Rate Parity in Asian Emerging Markets
Divergent views exist regarding the question of how interest rate differentials among foreign countries relate to corresponding exchange rate differentials among those same economies. Interest rate parity (IRP) theory suggests that if interest rates are higher in one country than they are in another, the former country's currency will sell at a discount in the forward market (Van Horne, 1998). In other words, interest rate differentials and forward-spot exchange rate differentials should offset one another. If not, opportunities for profit by engaging in covered interest arbitrage would exist, although profits must be sufficiently large enough to cover transactions costs and other market frictions. Several studies over the past two decades have examined the validity of interest rate parity in major world markets. Most of these studies have focused on countries with established forward financial markets in foreign currencies since these data are required to test "covered" IRP. The expectation is that the level of informational efficiency of these major markets is higher than other (less established) markets, making IRP more probable and opportunities to earn economic profits from covered interest arbitrage less likely. Moreover, financial market frictions such as the regulatory and political barriers among established markets have decreased over this period, further reducing arbitrage opportunities in foreign exchange markets. In testing the validity of IRP in emerging markets where no forward markets in currencies exists, "uncovered" IRP is used where the question is whether the change in the actual exchange rate between two countries equals that previously implied by the interest rate differential (Van Horne, 1998). The current practical relevance of this issue is that many large hedge funds now in operation seek to exploit market repricings across currencies (Marchan and Atlas, 1994). Such attempts to earn economic profits should be more risky, but also potentially more beneficial, in less efficient markets like the Asian emerging markets of Korea, the Philippines, and Thailand. Recent summaries of empirical evidence (Van Horne, 1998) show support for covered IRP among the United States, Japan, and most European countries in that there is generally an offsetting relationship between interest rates and the forward exchange rate relative to the spot rate, and that the cost of hedging offsets any yield advantage. Specifically, studies such as Rhee and Chang (1992), and Abeysekera and Turtle (1995), find that major global markets are efficient in the sense that profit opportunities from traditional covered interest arbitrage were rarely available in the 1980s and early 1990s. This is due to an (almost) absence of imperfections among these major economies. Most studies also show that IRP is stronger for short-term rates and weakens with longer maturities. However, empirical studies of uncovered IRP show mixed results. Tests of the unbiased expectations hypothesis are used to study uncovered IRP. Bakaert and Hodrick (1993) conclude that uncovered IRP did not hold through the early 1990s as high- interest-rate countries provided a higher net return, taking account of exchange rate changes, than did low interest rate countries. In other words, currency values of high interest rate countries did not depreciate fast enough to offset their yield advantages. Liu and Maddala (1992) also tested the unbiased expectations theory and concluded that the predictor is biased so CIP doesn't hold and that the efficiency of the major currency markets of Japan, Germany, Great Britain, and Switzerland is questionable. These studies still leave the question of uncovered IRP in non-major currency markets in post-1990 periods. Van Horne (1998) summarized evidence of test of uncovered IRP in the mid 1990s as being "less clear", where the IRP equality "more nearly prevailed". Assuming observed exchange rate differentials are beginning to exhibit a closer relationship with the previous interest rate differential in major markets, several additional questions arise. For example, What is the relationship for non-major markets in the rest of world, in particular, those emerging markets in the Asian region (and how does this relationship differ from earlier studies of major global markets)?, What is the significance of testing a later time period than those examined in earlier studies discussed here?, and What is the difference from studies of covered, as opposed to uncovered, parity? The expectation is that since emerging markets are less integrated with other established markets and informational efficiency is therefore lower, then IRP is less likely to be valid in Korea, Philippines, and Thailand. Moreover, since market imperfections/frictions such as transactions costs, capital constraints, and risk premia are more likely in these markets, the potential for economic profits from uncovered interest arbitrage holds greater promise for speculators such as hedge fund managers. Uncovered interest parity is based on the premise that the expected rate of appreciation of the spot exchange rate value of a currency is equal to the difference in interest rates. Uncovered international investments involve investing in foreign currency denominated financial assets without hedging in futures markets. That is, the investment proceeds in a future time are converted back to the domestic currency at the prevailing spot currency exchange rates in the future. Therefore, the investment is exposed to exchange rate risk.
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