The Journal of American Academy of Business, Cambridge

Vol.  6 * Num.. 1 * March 2005

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

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WTO and Market Access in Non-Agricultural Products: Issues and Options for Developing Countries

Dr. Amir Mahmood, University of Newcastle, Australia

 

ABSTRACT

The Doha Declaration explicitly highlights the need for establishing modalities that take into account “the special needs and interests of developing and least-developed country participants”.  The developing countries expect that the new round of trade negotiations will target tariff peaks, high tariffs, and tariff escalation that have been restricting the developing countries push to enhance their export market share in world markets in general, and in developed countries in particular. There is little dispute among the Members regarding developmental intent of the above mandate, however, opinions and proposals differ on formulating modalities to implement trade liberalization measures as envisaged by the architects of the Doha Declaration.  After evaluating the post-Uruguay Round tariff and non-tariff environment, this paper analyses the implications of complete removal of quota restrictions under Agreement on Textiles and Clothing (ATC). The paper provides a comprehensive overview of costs and benefits of trade liberalization to developing countries and draws key premises to formulate a comprehensive trade negotiation strategy and a set of recommendations in order to shape developing countries stance in the on-going negotiations on trade liberalization. From September 10 – 14, 2003, Cancun, Mexico hosted the fifth Ministerial Conference.  The outcome was a setback for developed as well as developing countries. The key aim of this meeting was to take stock of the progress in negotiations and other work arising from the Doha Development Agenda. At the Fourth Ministerial Conference of the WTO in Doha in 2001, ministers agreed on the following mandate for negotiations on following issues:  The Doha provides an overall context for negotiations on a variety of issues, such as: Agriculture and services. Trade and environment. Industrial tariffs. Antidumping and countervailing duties. Fisheries subsidies. Rules on regional trade agreements. Dispute settlement. Investment, competition policy, transparency in government procurement and trade facilitation. Non-agricultural goods market assess. In the area of non-agricultural goods market assess, the Doha declaration calls for addressing the following issues: Agreement on modalities to reduce, or as appropriate, eliminate tariffs, including reduction or elimination of tariff peaks, high tariffs, and tariff escalation, non-tariff barriers, particularly on products of export interest to developing countries. Comprehensive product coverage without a priori exclusions. Negotiations shall consider special needs and interests of developing and least-developed country participants, including through less than full reciprocity in reduction commitments, in accordance with relevant provisions of Article XXVIII of GATT 1994 and provisions cited in paragraph 50 of the Doha Ministerial Declaration (1). To achieve the above objectives, modalities to be agreed will include appropriate studies and capacity-building measures, to assist least-developed countries to participate effectively in the negotiations. The Doha Declaration highlights explicitly the need for establishing modalities that consider “the special needs and interests of developing and least-developed country participants”.  Developing countries expect that the Doha Round will target tariff peaks, high tariffs, and tariff escalation that have been restricting the developing countries’ push to enhance their export market share in world markets in general, and in developed countries in particular.  While there is barely any dispute among Members regarding developmental intent of the above mandate, opinions and proposals differ on formulating modalities to implement trade liberalization measures, as envisaged by the architects of the Doha Declaration. This is hardly a surprising outcome in a multi-polar world where Members have different and complex economic interests and conflicting views of the negotiation agenda and desired outcomes due to their developmental status (2).  To structure trade negotiation modalities that lead to the emergence of an efficient global trading system, while assisting the expansion of domestic exports with minimum hardship to the import-competing sector is a difficult task. This study acknowledges that market access, which is a pre-requisite for trade expansion, opens possibilities for the export sector with a potentially dampening impact on protected inefficient industries. The outcome of Cancun meeting has shown that formulation of trade negotiation modalities requires inter-country and intra-country compromises and trade-offs, while at the same time ensuring that each Member is a net beneficiary of the liberalization process.  In the new round, developing countries should contribute to a comprehensive trade liberalization package that takes into account the special needs of developing countries. It is in developing countries interest to attach high importance to this aspect of negotiations; this will assist its trade policy agenda to stimulate economic activities with enhanced export opportunities. To find common grounds that are mutually beneficial for Members, it is imperative that developing countries enter into the negotiations with a mind set that is not locked into a North-South divide. Gains from trade are in cooperation with developed and developing countries.

 

Methodological Advantages of Combining Policy Capturing With Nomothetic Research Designs: A Pay Satisfaction Example

Dr. Jeff Trailer, The California State University, Chico, CA

 

ABSTRACT

This study demonstrates a fundamental advantage offered to researchers through the use of policy capturing, an idiographic methodology, to enhance nomothetic research findings.  Policy capturing was used to quantify individual differences, and use the measurement of these differences to successfully “correct” a standardized nomothetic instrument used to predict satisfaction with pay.  Total explained variance in pay satisfaction increased from .46, reported in a previously published study, to .70 in this study using the combined methodology. Empirical psychology has experienced some tension over appropriateness of nomothetic versus idiographic methodology in explaining personality and human behavior (Silverstein, 1988).  The nomothetic versus ideographic debate centers on the issue of whether or not there exist “general laws” that apply across people, or if differences between individuals prevent the existence of such laws.  The nomothetic ideology encompasses the beliefs that causal factors exist which influence all elements of a particular group in a similar manner, such as laws of nature in physics.  Nomothetic methodology refers to between-subjects experimental designs, identifying characteristics common to the group.  Nomothetic approaches deal with individual differences by assuming that the unique aspects of each individual are irrelevant and can be transcended by identifying the appropriate comprehensive model.   This reflects a focus on similarities between subjects rather than differences between them.  Conversely, the idiographic perspective holds that all elements are different, so causal factors will not affect each element in similar manner.  Therefore, the effect of causal factors must be studied one element at a time.  Idiographic methodology refers to within-subject experimental designs; studying the individual independently.  Thus, each individual is treated as being totally unique and can only be adequately understood as a separate entity. Although these methodologies can be combined, the differences in fundamental ideology have produced separate scientific paradigms that continue to clash as the relative merits of each are examined (Howard and Meyers, 1990; Tsoukas, 1989; Paunonen and Jackson, 1985; Bem, 1983; Kennedy, Fossum and White, 1983; Kenrick and Dantchik, 1983).  The nomothetic paradigm is perhaps nowhere more aggressively defended than by Jum Nunnally who stated, “The idiographists may be correct, but if they are, it is a sad day for psychology (Nunnally, 1978: 548).”  Nunnally (1978) refers to idiographic approach as “antiscience” since ultimately the paradigm implies that human personalities exist in chaos, beyond the reach of systematic understanding.  Explicitly or implicitly, most researchers appear to agree, as psychological research is predominantly nomothetic (cf. Campbell and Stanley, 1963; Nunnally, 1978). There are, however, compelling reasons to pursue the idiographic approach (Aiman-Smith, Scullen & Barr, 2002; Keown, 1983).  One significant reason, and the focus of this study, is that the nomothetic approach is inherently limited in its ability to discover why and how individuals make choices (Zedick, 1977).  Thus, the purpose of this paper is to demonstrate the potential for improving the explanatory power of existing nomothetic research instruments when such instruments are subject to the confounding influence of individual differences.  For the purpose of discussion here, this particular technique of combining the nomothetic and idiographic methods is referred to as the “nomographic” approach. To empirically test the methodological advantage of nomographics it was necessary to select a dependent variable, which is affected by individual differences, and could be measured using an accepted, standardized nomothetic instrument.   Pay satisfaction, an individual level perceptual construct, met the first requirement and the Pay Satisfaction Questionnaire (PSQ) met the second.  To understand the implication of the methodology for this topic, it is necessary to briefly review past research, which illustrates the individualistic nature of pay satisfaction.  Pay satisfaction research grew out of the more general research on job satisfaction.  Satisfaction with pay is considered one aspect of job satisfaction, and was therefore included in survey instrument measuring satisfaction with a job.  Such instruments included the Minnesota Satisfaction Questionnaire (MSQ) (Weiss, Dawis, England and Lofquist, 1967) and the Job Descriptive Index (JDI) (Smith, Kendall and Hulin, 1969).  The pay satisfaction questions incorporated into these early instruments assumed that pay satisfaction was a unidimensional construct.   Heneman and Schwab (1985), however, found that pay satisfaction should be separated into at least four dimensions:  satisfaction with pay level, benefits, raises and administration/structure.  Further, they found that the MSQ and JDI both correlated highly with only pay level dimension of pay satisfaction, implying that these instruments are not appropriate for the study of the other pay satisfaction dimensions. 

 

Applying the Concept of Cognitive Continuum to Leadership Training

Dr. Ida Kutschera, Bellarmine University, Louisville, KY

Dr. John T. Byrd, III, Bellarmine University, Louisville, KY

 

ABSTRACT

This paper introduces an innovative approach to leadership training in an environment where organizational change and development require the adaptation of new skills. The Cognitive Continuum Theory and the Communication Model can be used to increase trainees’ awareness of different information processing styles in general and their own cognitive styles in particular. A case example stemming from an actual training conducted by one of the authors describes the practical applications of the concepts and how trainees learn the appropriateness of different decision making modes contingent on the decision situation. Leadership education is critical for success in today’s organizations. Both education and training programs need to ensure that the managers and leaders of organizations incorporate knowledge that not only improves the organization, but keeps them updated with respect to ongoing leadership needs. This requires the integration of the specific needs of the organization with the theoretical models linking the practical needs with theory. This in turn allows managers in leadership positions to remain flexible and able to adapt to new situations.  In the following, we will describe how the need for organizational change at a plant for Ford Motor Company led to leadership training. The innovative training approach applied here is guided by a model of communication and the Cognitive Continuum Theory (CCT), a model of human judgment and decision making.  After a review of the ideas behind the CCT, we will discuss the case-specific practical implications of this training program. Finally, we will conclude with suggestions for leadership training in general. The Kansas City Assembly Plant of Ford Motor Co. developed a special category of employee called Product Specialist for the purpose of launching new products. This group of experienced production operators takes a temporary assignment and later returns to their position within the production organization. This occurred after they have assisted in an Integrated Launch Process for a new vehicle. In their new role as Product Specialists, they help improve the efficiency of both the manufacturing and assembly process. This is accomplished by providing input to the engineers who have responsibility for improving the manufacturing and assembly process, and learning the new manufacturing process themselves so they can train employees on the line.  This novel role of the Product Specialist is not easy and requires learning and adjustments that go well beyond the technical aspects of the job. It involves learning and adapting to the normal stresses of changing situations along with leadership skills. The leadership skills consist of working with professional engineers as well as production employees who have viewed the product specialists as peers but now may perceive them as “bosses”. The new role with engineers is part of a team of employees with special knowledge regarding the new vehicle. The new role with production employees is that of liaison and facilitator of information which is mainly operating in nature and needed to successfully launch the new vehicle. Behaviors in the role of Product Specialist consist of interacting with union employees, professional engineers, and supervisors as coordinators of production information. The Product Specialists are doing this in an environment where they have historically been production employees with no special status. Their new role gives them special status, both from a formal standpoint (as recognized in the organizational hierarchy) as well as from an informal perspective (as perceived by the relevant stakeholders). Clearly, the new role requires leadership training and education which expands the trainees’ view of the task-oriented skills that they once performed as production operators and teaches them how to use this new role as a change agent. Since time is of the essence to launch the new vehicle, a program of education and training is squeezed into a short time period. Part of the program involves leadership skills which focus on being able to link trainees’ real world experiences with the behaviors of the new role.  The Cognitive Continuum Theory (CCT) is the framework utilized to organize and guide the education and training process. Participants are engaged in a process which causes them to discuss everyday work issues and how their decisions influence the outcomes. Before explaining the training program, a review of CCT which provides the theoretical framework will give a context and rationale of why the emphasis focuses on the mechanics of the communication process and how the personal differences in information processing might influence the effectiveness of the Product Specialists.

 

Predicting Success of Police Officer Applicants Using Weighted Application Blanks

Dr. James H. Browne, Colorado State University-Pueblo, Pueblo, CO

Dr. Stuart H. Warnock, Tarleton State University, Stephenville, TX

Dr. Nancy J. Boykin, Tarleton State University, Stephenville, TX

 

ABSTRACT

This paper extends the literature on Weighted Application Blanks (WABs) in a multi-step recruitment and selection process for police officers candidates.  Since the 1970s, the use of WABs (sometimes referred to as Biographical Information Blanks - BIBs) is well documented in the human resource management literature.  However, what is not well documented is how the yield from an organization’s pre-employment screening process can be predicted in the earliest stages of recruitment through the use of properly developed and validated WABs.  Police departments across the country have been facing a shrinking pool of qualified applicants while the number of positions for new police officers has been increasing. This research shows how WABs can help police departments better focus their recruitment efforts by targeting potential applicant populations with the highest probability of making it through the rigorous selection process.  A longitudinal research design was employed at the Colorado Springs Police Department (CSPD) and a WAB was developed using a 10-item “work-related history and career interest” police applicant questionnaire.  Subsequent to the development of the WAB, approximately 250 police academy applicants’ WAB scores were calculated.  Data analysis showed that the WAB achieved a statistically acceptable level of predictive validity (i.e., approximate r-square of .70 and p < .05).  Further, the WAB achieved an overall accuracy rate of 76.3% in distinguishing successful from unsuccessful police academy applicants; a substantial improvement over CSPD’s “a priori prediction” with a 12.3% accuracy rate.  Smith (1776) identified land, labor, and capital as the essential elements of production in his seminal economic treatise The Wealth of Nations.  As was the case in America’s nascent industrializing economy of the late 1700s, the rational application of labor to land and capital remains key to future increases in national wealth and economic prosperity.  As one response to increasing competitive pressure in the global market, the private sector seeks to manage labor in a fashion that achieves continuous improvement of all organizational systems.  Although organizations in the public sector aren’t subject to the pressures of market competition, they are challenged to demonstrate accountability to their constituents in an era that demands they do more with proportionately fewer resources than before.  Labor plays a critical role in achieving greater efficiency and effectiveness for public sector organizations, whether municipalities or federal agencies. There are many human resource management (HRM) programs that, when properly implemented, enhance labor’s contribution toward meeting the imperatives of increased organizational effectiveness and efficiency.  Typical HRM programs used by successful organizations to manage labor include: 1) recruitment and selection, 2) job analysis, 3) job design, 4) performance appraisal, 5) training and development, 6) compensation, 7) employee and labor relations, 8) health and safety, and 9) employee recognition and reward (Bohlander and Snell, 2004).  Of these programs, the one that is most critical to the procurement of a quality workforce, and primary to an organization’s success, is recruitment and selection.  Recruitment involves attracting qualified job applicants while selection entails matching the skills, knowledge, and abilities of the applicants who were recruited to the requirements of the job (Fisher et al, 2003).  At the point when an organization embarks on recruitment and selection activities it is faced with making two important and interrelated decisions (Bass and Barrett, 1981; Landy, 1989).  The first decision requires a determination of the cost of recruitment (i.e., an estimation of the amount of resources the organization is willing to commit to defray recruitment costs).  The second decision involves the calculation of the probable selection ratio (i.e., the ratio of job applicants who are hired to the total number of job applicants) that results from the degree of selectivity in accepting (or rejecting) job applicants.  Recruitment costs typically rise when there are few qualified applicants vis-à-vis the number of positions needing to be filled.  These costs increase owing to the need for expanding the geographical scope and/or intensity of recruitment activities.  The yield of an organization’s recruitment efforts should be such that qualified applicants are retained throughout the screening and selection process.   To the extent that qualified applicants either self-select out of the applicant pool, or are erroneously rejected during any stage of the screening process, the overall costs to the organization of the recruitment and selection program increases.  Law enforcement agencies (e.g., police departments) constitute one type of organization where the efficiency and effectiveness of recruitment and selection programs are cost sensitive.  Because every stage of the recruitment and selection process adds cost to the organization, the financial impact of selection errors to the organization should be minimized as much as possible.  One cost-effective way to enhance the effectiveness of a recruitment and selection program is through the use of a weighted application blank (Cascio and Aguinis, 2005).  It is to the use of the weighted application blank (WAB) in the recruitment and selection program of police departments that attention will now turn.

 

Toward a Unified View of Customer Relationship Management

Dr. Joseph O. Chan, Roosevelt University, Schaumburg, IL

 

ABSTRACT

Competitions in the new economy have caused major changes in business strategies from internal product focus to value creation along the demand and supply chains. Companies are extending their operational and decision structures to include those of their customers, suppliers, distributors, and alliance partners. Product-centric strategies are replaced by customer-centric strategies that facilitate value creation. Focuses on transactional efficiency are replaced by new requirements to integrate and optimize the value chains between the customer, the firm and its extended enterprise. Disparate business processes and systems, compounded by the proliferation of customer contact points and channels, have created incompatible and disconnected views of customers. The inability to synchronize information and processes across various customer touch points may result in negative customer experience and lost opportunities for the firm. Disconnections between CRM operations and CRM analytics can negatively impact marketing effectiveness, customer retention and loyalty. Lessons learned from past CRM implementations have provided guidance pointing to integrated strategies that not only include technologies, but also include business processes, information and organizations. Forward looking CRM strategies can leverage customer intelligence created by CRM analytics that enhances CRM operations, and conversely, CRM operations collect critical customer data for CRM analytics. To attain optimization of CRM performance, metrics need to be defined across the enterprise driven by customer-centric goals. For customer relationship management to take to the new level of value creation, businesses require a strategy that creates a unified view of customers from the perspectives of operations, analytics and collaboration along the entire customer relationship management value chain. This paper proposes an integrated framework for CRM through the construct of the enterprise model. As we move from the industrial economy to the knowledge-based economy, the focus of production efficiency is shifted to value creation throughout the entire value chain. Customer relationship management is a key ingredient in the value creation strategy. While CRM technologies have matured in the last decade, their implementation failure rates are high, ranging from 55 to 75 percent according to the Meta Group (Johnson 2004). Key reasons for failure include the failure to create an enterprise-wide CRM strategy, the inability to integrate with legacy systems, and not having an approach to analytics (McKenzie 2001, Greenberg 2002, and Bannan 2004). It seems that history does repeat itself with enterprise applications. Lewis (2001) points out that ERP implementations also suffer the 70-perscent failure rate. One of the key lessons learned from ERP implementations is that they are not just software implementations. They come with built-in business processes (Lewis 2001). Business process and integration issues that haunted many ERP implementations are also leading causes of failure for CRM implementations. The issues with CRM can be compounded by disparate views of customers through different channels, processes and systems. Information about customers can be captured through various transactional systems and got buried in their respective silos. CRM technologies can also come in multiple flavors. As pointed out by Bannan (2003) that many CRM deployments are specific applications providing point solutions such as automated alerts and email, or handling segment predictive modeling. Furthermore, there exist many types of CRM. The Meta Group described three CRM ecosystems: operational CRM, analytical CRM and collaborative CRM (Kelly 1999). Web-based applications and wireless applications further yield classifications in eCRM and wireless CRM.  Johnson (2004) points out that CRM is more than just technology. While technology is a key enabler, it is only a means to the end. McKenzie (2001) articulates that CRM is a combination of strategy and information system aimed at focusing attention on customers in order to serve them better. An integrated business model that ties together business organizations, processes, information and technologies along the entire value chain is critical to the success of CRM strategies. The holistic view of customers must include information from various customer interactions with the firm through sales and marketing, call centers, customer service, the Web, distribution channels and alliance partners. McKenzie (2001) points out the importance of integration along the value chain to provide better customer service, by organizing, aligning and integrating the organization processes all the way from the point of customer contact, through the organization and back through the supply chain. The CRM enterprise model proposed in this paper provides the integrated framework for the creation of a unified customer view amongst disparate systems, processes and channels across the enterprise. Customers can interact with a firm in many ways and through many channels. Customer interactions may include the transactions at retail outlets or on the Web, the participation in direct mail campaigns, the mailing in of rebate cards, and the complaints and inquiries via phone, mail, or the Web. Disconnected views of customers can be caused by disparities in an organization created by system and organizational boundaries, which can result in negative customer experience and the loss of opportunities for the firm. Technology investments in the past decades have created the legacies confined by the boundaries of systems and organizations. Many system implementations have become information and decision silos within an enterprise. Customer information collected in these systems got buried in their respective silos and are not shared and leveraged across the enterprise to improve customer relationship. Each functional area in sales and marketing, distribution, production, and supplier management acts as separate silos and makes decision based on its own objectives. As pointed out by Fraser et al. (2003), decision making fragments across a business as different functions become entities in themselves.  At the front end, marketing and sales interact with customers in many ways. Disparity may occur between marketing and sales. Sales strategies may not leverage marketing intelligence and conversely, marketing efforts may not leverage sales data. It is not uncommon that a consumer receives many promotional offers without regard to previous sales data. Many businesses are struggling to evaluate marketing effectiveness tying sales performance to marketing campaigns. At the back end, the order fulfillment and inventory control processes can greatly affect customer experience. Due to the lack of experience with the back-end order fulfillment processes, ToysRUs.com failed to deliver toys on time during the 1999 Christmas season, which caused 1 in 20 children not getting presents from ToysRUs.com in time for Christmas (Turban et al. 2004). Kmart’s problems in supply chain management often have caused on-sale merchandise out of stock when customers got to the store (Konicki 2002), which contributed to its failure and filing for bankruptcy in 2002. Customers’ change orders may not be handled swiftly because of the disconnection between order processing, production and supplier management. Functional and process disparities in an organization can be caused by the boundaries created by systems. They include systems supporting various functions in the enterprise such as Enterprise Marketing Automation (EMA), Sales force automation (SFA), Material Requirements Planning (MRP) and Distribution Requirements Planning (DRP). Other enterprise systems spanning across functional areas include Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Knowledge Management (KM) and different flavors of CRM. These systems whether custom-built or packaged, all have direct or indirect impact to customer experiences. A customer’s experience in customer service may be greatly impacted by the ability of sharing real-time information between many systems within an enterprise. Disconnected views of customers created by disparate systems and processes can hamper the ability of customer service to quickly implement corrective actions upon customer inquiries and complaints, resulting in negative experience for the customer. Customers’ interactions with an organization can be through many different channels, including direct marketing, direct sales, retail and wholesale outlets, customer service, call centers, Web sites and alliance partners. Channel conflicts may occur in many areas including the management of goals, information, processes, systems, organizational structures and incentives. Different channels have different goals which may not drive optimization at the customer level. Turban et al. (2004) refer channel conflict to situations where the online marketing channel upsets the traditional channels due to real or perceived damage from competition. Organizations may fail to leverage customer information collected at different touch points due to the lack of integration and coordination. Winer (2001) points out that any contact or touch points that a customer has with a firm is a customer service encounter and has the potential either to gain repeat business or to have the opposite effect. Disparate business processes and technologies supporting various channels create further disconnections. Organizational structures and incentives may not entice the behaviors that put the customer first. All these disparities across different channels can result in poor customer experience and lost opportunities for the firm. Valuable customer insights can be derived from operational data obtained from various channels and customer touch points. Such insights created by analytic processes can greatly improve future operations. However, disparity often exists between operations and analytics. Valuable information from operations got buried in silos and is not leveraged in analytical processes across the enterprise. Conversely, business insights created by analytical processes are not tied to the improvement of operational processes. For example, specific target marketing campaigns may not benefit from general cross-selling strategies due to the lack of integration of cross-selling analytics to specific marketing processes.  Businesses are collecting vast amount of customer data from various transactions. The challenge however is to transform these mountains of data into useful customer insights that can be leveraged to improve customer operations. Disconnection of the operational and analytic feedback loop will hamper effective customer operations and the creation of critical customer intelligence.

 

Downsizing as a Strategic Intervention

Nell Mirabal, M.S., St. Thomas University, Miami, FL

Dr. Robert DeYoung, St. Thomas University, Miami, FL

 

ABSTRACT

The effects of downsizing as a strategic intervention typically stem from organizations seeking to reduce the number of employees through layoffs, attrition, redeployment, early retirement and reorganization or de-layering.  These reductions are generally a response to one or more of the following conditions: a response to mergers and acquisitions; revenue loss or loss of market share through technological and industrial change; the execution of new organizational structures; and social pressures attributed to the philosophy that smaller is better.  The focus of this article will apply Cummings and Worley’s (2001) five application stages using downsizing as a strategic intervention, which examines organizational goals and objectives, overall assessment of the organization, relevant choices and decisions, the implementation stage, workforce reduction, survivor syndrome and organizational renewal and growth strategies.   The authors will also examine the effects of downsizing on financial performance, reputation for corporate social performance and managerial commitment to strategic change.  Downsizing is a business strategy designed to improve the financial standing of a firm by reducing and changing the structure of the workforce in order to improve operational results (Appelbaum, 2001).  Downsizing has become a widely held intervention for organizations looking to demonstrate flexibility, reduce bureaucratic structure, increase efficiency regarding decision-making, improve communication and cultivate entrepreneurship (Appelbaum, 2001; Bruton, Keels & Skook, 1996; Mroczkowski & Hanaoka, 1997). According to Cummings and Worley (2001), downsizing is accomplished by decreasing the number of employees through layoffs, attrition, redeployment, or early retirement or by reducing the number of organizational units or managerial levels through divestiture, outsourcing, reorganization, or de-layering.   Downsizing is generally a response to one or more of the following four conditions: (1) mergers and acquisitions; (2) loss of revenues and market share through technological and industrial change; (3) the implementation of a new organizational structure; and (4) the belief and social pressures that smaller is better (Cummings & Worley, 2001).  This article will examine the findings of empirical research studies and other sources to determine the impact of downsizing as a strategic intervention on financial performance, reputation for corporate social performance and managerial commitment to strategic change. Each of these issues directly and inclusively influence Cummings and Worley’s (2001) five application stages using downsizing as a strategic intervention as illustrated in Figure 1. Downsizing is most effective when planning takes place well before, during and following the proscribed intervention. “A downsizing plan should be included in the strategic management plan of all organizations, regardless of whether they plan to downsize or not. By including such a plan, the organization will be better prepared to begin the staff-reduction process should it be forced to do so in response to environmental changes” (Davis, 2003). Downsizing is reportedly a common response to an emergent, global environment. Incorporating downsizing in the strategic management plan can increase organizational efficiency by maintaining a focus on core competencies that promote competitive advantage and increasing (or at least maintaining) current levels of market share. Responding to an organizational crisis absent a well-defined strategic plan might result in across-the-board cuts that “penalize the most efficient units of the organization, thus decreasing its competitive advantage” (Davis, 2003). Unquestionably, the dramatic implications of the downsizing process need to be carefully assessed. The implementation should take all reasonable steps to minimize the potential negative impact on core competencies, productivity and workforce behavior. Successful downsizing as a strategic intervention has five application stages (see Figure 1) (Cummings & Worley, 2001).  The first stage is to clarify the organization’s strategy, which entails communicating the organization’s stratagem, and to achieve its goals and objectives. Organizational leaders are called upon to maintain focus and provide consistent support throughout the process.  The organizational leaders can provide opportunities for members to voice their concerns, ask questions and obtain counseling if necessary (Cummings & Worley, 2001). The second stage refers to the assessment stage wherein relevant choices and key decisions are made as to which downsizing method will be utilized.  There are primarily three methods: workforce reduction, organization redesign and system change (Cummings & Worley, 2001).  Figure 2, as described by Cummings & Worley, defines the three tactics utilized in downsizing.

 

Providing Students with an Overview of Financial Statements Using the Dupont Analysis Approach

Dr. Gene Milbourn, University of Baltimore, Maryland

Dr. Tim Haight, California State University, Los Angeles, CA

 

ABSTRACT

This paper uses the Dupont Analysis as a teaching aid to equip students with an understanding of how management decisions influence the bottom line. This simplified approach allows students to see the “big picture” and to logically follow how management decisions affect components that contribute to firm’s performance. As such it can be a valuable tool in building a student’s critical thinking competencies in evaluating the health, prospects and valuations of companies. The volume of information contained in the balance sheet and income statement often overwhelms students in an introductory finance class. While basic accounting classes prepare students in the preparation of financial statements, finance classes typically focus on their interpretation to aid in decision-making. Unfortunately, entering students are often lost in the detail and are unable to see the forest for the trees. The ultimate goal is for students to understand the interrelationships between financial statements and how management decisions affect firm’s performance. To be sure, our future managers must fully understand the financial consequences of all the decisions and how these decisions affect the bottom line.  Fortunately, there is a very powerful financial tool to assist students in understanding the ramifications of decisions on profitability. The Dupont Analysis is a measurement instrument that can provide students with several insights into key factors that contribute to bottom line performance. This tool is used to evaluate a firm’s financial condition by comparing relationships within the income statement and balance sheet, or between the two statements.  The Dupont Analysis provides information on the firm’s liquidity, profitability, efficiency, and leverage status, thus allowing students to see how well a firm is operating as a result of changes in one or more of these factors. It is a very powerful tool that allows one to trace the financial impact of decisions and to understand the interrelationship between the income statement, balance sheet and firm profitability. Dupont analysis begins by using the firm’s return on assets (ROA). Return measures can either be on a before-tax or an after-tax basis.  ROA measures the firm’s profits as a percent of its assets.  Note that ROA increases if any one of the three following factors changes while the other two remain the same:  if costs decrease, income increases, so ROA increases; if revenue increases, income increases, so ROA increases; if assets decrease, ROA increases. Students can quickly gain an understanding of how any of these changes affect return. To provide a context for classroom discussion, the instructor will evaluate a firm’s performance, ROA with either an industry average or the firm’s historic returns.  If the firm has higher ROA than the industry, the firm is more profitable. Similarly, if the firm’s ROA is lower than the industry’s it is viewed as less profitable. In Dupont analysis, the ROA is expanded and broken down into two components: Thus, Dupont analysis translates the basic ROA ratio into the following: ROA = Asset Turnover x  Net Profit Margin  {equation 2} These two sub-measures are useful in the following way: Asset turnover measures the efficiency of the firm’s assets. The higher this ratio, the more efficient the assets. Operating profit margin is an indicator of the firm’s profitability as it relates to revenue. These two measures, when combined, permit students to see the relative contributions of asset efficiency and profitability on the firm’s Return on Assets. The use of the Dupont System to investigate firm performance can employed on a time series basis or as part of a cross sectional analysis within a given industry or sector. Typically, a firm can isolate the causes of deteriorating ROA over time by separating the relative impact of its asset turnover and profit margin during the period under investigation. Once the source of the deteriorating ROA is isolated, firms can then focus on the area suggested by the Dupont System.  Often changes in firm’s performance are a result of external factors that may be affecting the entire industry and/or sector within the industry. Here, cross sectional analysis can be employed to ascertain whether performance problems are isolated within the firm or are being experienced by competitors as well.

 

E-CRM: Are we there yet?

Noor Raihan Ab Hamid, Multimedia University, Cyberjaya, Malaysia.

 

ABSTRACT

Companies such as Amazon and Yahoo! offer interesting anecdotes on the strategic applications of Internet technology as to enhance customer relationship and towards acquiring customer loyalty. Obviously these companies’ offerings of personalized services, confirmation of orders in real time and other value added activities substantiated the ability of the Internet as a competitive tool.  As the number of internet users is growing rapidly in Malaysia, retailers are under great pressure to take advantage of this huge online market potential. However the challenge is whether Malaysian online retailers do match up with other online competitors worldwide in terms of services rendered on the Internet. Therefore, this study seeks to investigate the level of Internet technology applied by Malaysian web sites in view of global electronic marketplace competition. This research investigated various web sites across Malaysian industries and found that Malaysian retailers are still lag in fully utilizing the strategic potential of the Internet particularly in enhancing customer relations.  The battle for customers has never been more intense. Heighten customer expectation and borderless markets are the uprising pressures which lead to a dramatic rise in competition.  These factors force companies to switch from a product-centric approach to a customer-centric approach (Xu, Yen, Lin & Chou, 2002).  At this junction, retailers who are at the front end of the supply chain and interact directly with consumers, are in a critical position to fully comprehend what increases customers satisfaction, induces repeat purchases and drives loyalty (Feinberg & Kadam, 2002). Furthermore e-retail transactions increased tremendously in recent years, as reported by US Census Bureau e-retail sales in 2001 amounted to $32.6 billion, up 19.3 percent from 2000. While online sales accounted for only 1.2 percent of all retail transactions in 2001, it is clear that e-retailing will continue to grow and become a more significant portion of retail sales than it currently is. The use of retail Web sites by consumers for purchase and information gathering suggests that these Web sites and other technologies embedded within will be essential e-CRM tools for all retailers in the future.  Since the first contact point between a company and a potential buyer is via the web sites, it is crucial for companies to create the “first impressions” effectively - present transactional and personalization apart from product information and user friendly features.  In turn, the rate to keep customers as well as convert visitors to buyers may likely be higher.  E-CRM refers to the marketing activities, tools and techniques, delivered via the Internet which includes email, world wide web, chat room, e-forums etc. bearing on locating, building and improving long-term customer relationships (Lee-Kelley,Gilbert and Robin Mannicom, 2003).  Based on the economics of customer management – well defined segmentation will lead to cost effective marketing efforts and increase profits, enabling technology such as the Internet is a vital tool in identifying the differences in customers’ behavior- preferences and attitude towards company’s products. Coupled with other technology at the back-end such as customers’ database, warehousing and data mining, value adding and personalized products or services could be offered, which in turn create an edge over competing companies.  By far, the adoption of E-CRM tools would improve firms’ operational effectiveness and therefore deliver value to adopting companies. Among many ways value can be obtained are (Adebanjo, 2003): Reducing the cost of communicating with customers as customers’ current information is readily available; customer enquiries can be resolved in less time, thus freeing them for other productive work. Reduces administrative and operational costs since the Internet is primarily about self-service oriented transactions whereby customers are empowered to self-configure products, track orders and make changes themselves. More efficient workflow as a result of the integration between e-CRM applications with back-office systems such as production, finance and supply chains, thus delivering cost savings. Improve sales by means of better market segmentation leading to effective automated campaign management, e-mail marketing, etc., thereby increasing the profitability of firms. Improving the overall customers’ interaction which in turn would lead to better service, improve customer satisfaction and loyalty and ultimately customer lifetime value.  Without a powerful back-end system, these Internet technologies are not able to function as effectively.  Internet applications such as email, World Wide Web and chat room need to be supported with a well-built back-end system that utilizes the power of, among others, intelligent agents and database engines. Figure 1 below illustrates back-end system a backbone in an E-CRM process.  the E-CRM process can be divided into the front-end and back-end process. The E-CRM framework starts with the front-end tool when customers visit or browse the company’s website. A customer’s browsing activities will be captured by a cookie file and logged in a server for initial profiling purposes. This in turn, allows the company to understand customer’s surfing pattern which would be very useful for future marketing plans.  Added with users’ information obtained from a web form, individual customers profiles are built up and stored in a database at the back-end. At this point, customers can interact with the database to check product availability, retrieve order details, track an order status as well as personalize certain services. Subsequently, data warehouse will sort specialized periodical reports of customers’ activities which serve as input to the mining process. Then, the extraction of valuable information from a mining process would send useful signals to companies as to determine particular patterns in customers’ behavior thus creating effective segmentation.

 

Managing Disequilibria in the ‘New Economy’

Dr. Mohammad Naim Chaker, University of Sharjah, United Arab Emirates

 

INTRODUCTION

The ‘New Economy’ is characterized inter alia by proliferation of a wide array of information and communication technologies in all sectors (Rifkin, 1998). Businesses and governments are now investing in information technology and electronic commerce to improve productivity, reduce costs and attain greater heights of customer service. Consumers can now shop on the Internet because they find their choices fantastically increased. They have access to almost complete information when making purchasing decisions.  Consumers are able to save time and find shopping more convenient as businesses serve their needs individually. Better information and greater selection, combined with lower operating costs for many Internet businesses may, in turn, trigger reductions in prices or improvements in quality. The sheer number of stores that can be visited online far exceeds even the most densely populated retail areas in industrial countries. There are also interesting parallel developments in other parts of the world, especially Europe, East Asia and the Middle East. The information and communication technologies have come to drive the engines of economic growth in these parts of the globe.  It is true that Corporate America has contributed immensely to the emergence of the new world economy anchored in information and communication technologies.Tables1 and 2 show that the US was an important exporter of high-technology products in 1999 and one of the leading investors in high-technology products in various markets of the world. A fundamental characteristic of new information technologies is its openness in terms of design and access. This characteristic has led to the spread of these technologies all over the world. Moreover, other developments such as rapid advances and deployment of computing and communications technologies across countries, dismantling of trade and investment barriers in Europe, Asia, Americas and the Middle East, and the coming into being of regional groupings as building blocs of the world economy have also contributed to the emergence of the ‘New Economy’. With the emerging global economic landscape, microelectronics, computers, telecommunications, robotics, and biotechnology are transforming all aspects of contemporary life. Consequently, the impact of this global connectivity on the economic system as a whole has been perceived to be very positive (http://www.d-trends.com ).  While the positive aspects of the ‘New Economy’ have been discussed and analyzed in contemporary literature with great passion and emphasis (Han, 1997), the dysfunctional aspects of this important development have not been given adequate attention in the literature( Heckel and Nolan, 1993). Therefore, an attempt is made in this paper to explore the possibility of various disequilibria in the ‘New Economy” as a consequence of the fact that competition and economic wisdom on the Internet have still not reached a stage of maturity and fruition.  This paper recognises a need for logical explanation of events in the world economy. It is based on a review of theory and published information. A modest survey exercise was also conducted to refine the findings of the study. By trying to fill some gaps in the existing knowledge pertaining to the ‘New Economy’, it is hoped, we would be able to see more clearly that the ‘New Economy’ has the potential to bring in its wake several disequilibria that need to be addressed and managed by policy makers. We turn now to explore the possibility of some disequilibria in the world economy due to the spread of information and communication technologies.

 

Knowledge Sharing Routines, Task Efficiency, and Team Service Quality in Instant Service-Giving Settings

Dr. Shieh-Chieh Fang, National Kaohsiung First University of Science and Technology, Taiwan

Fu-Sheng Tsai, I-Shou University, Taiwan

Kuo-Chien Chang, I-Shou University, Taiwan

 

ABSTRACT

The Comparative task excellence relies more and more on knowledge, if not other sorts of capitals. For service team in instant service-giving contexts, service competences and quality are not based on how much members do at present service moment, but on how efficiently they response and react for customers’ needs. Knowledge sharing routines (KSR) between team members, continuously, benefits because they not only served as common bases for information exchange, but they also demonstrates an alignment for members’ cognition differences. The present study focuses on dynamics of the reciprocal impacts between KSR and communication & conflict resolution (CCR) of team members on each other, and the consequences of this dynamics that are finally embodied in the task efficiency for service quality in the instant service-giving settings. The nature of work in organizations has changed, especially in this era of new economy.  Knowledge-based work has replaced regular, sequential work with its characteristics of flexibility, complexity, and high uncertainty.  Against this background, the ability to effectively implement knowledge-based activities becomes increasingly vital for the way it helps obtain and sustain competitive advantage (De Carolis, 2003; Grant, 1996).  Fundamentally, these knowledge-based activities include the creation and integration of knowledge, the accumulation and utilization of knowledge, and the learning and sharing of knowledge.  Taken together, these comprise knowledge management.  Among these, knowledge sharing, or flow, is the cornerstone of knowledge management (Szulanski, 1996; Gupta and Govindarajan, 2000).  Since the paradigm has shifted from a tangible to an intangible emphasis, a team has to perform better in its knowledge processing in order to offer qualified and satisfying services.  Originally, distributed professionals were brought together to manage and match the needs of this fundamental transformation (Tjosvold and Tjosvold, 1995).  As a result, team units became very important organizational designs for task implementations (Gray, 2000).  The need for knowledge capability is especially critical in a task setting of instant service-giving (e.g. the emergency room of a hospital, an integrated call-center for customer support, etc.), because in these settings a great volume of information flows in and out, and is exchanged between members of the service units.  This situation implies that, in addition to matters of information technology, there will of necessity be a large volume of communications--and also barriers to communication--accompanying the services process of team members (Huber, 1991).  To achieve efficient communication and conflict resolution thus becomes a critical part of the service quality. The present study, adopting a knowledge-based perspective (Conner and Prahalad, 1996; Nonaka et al., 2000; Grant, 1996) on team unit and collective task implementations argues that service teams need to build regular knowledge-sharing routines in service and non-service time to achieve efficient communications and conflict resolution.  Routines for knowledge-sharing between members help for they not only offer opportunities for members to share knowledge contents per se, but they also increase opportunities for mutual understanding (Bechky, 2003), including the divergent methods, styles, logic, symbolic meanings, and cognitive differences each individual member might possess.  Furthermore, efforts are made to clarify the reciprocal impacts between knowledge-sharing routines and communication and conflict resolution (the ‘positive circle’ concept in system dynamics research).  Finally, in accordance with the explanations given above, we discuss each structure in next section and propose some deviated strategic implications for our concluding remarks. The conceptual framework is shown in Figure 1.  Owing to the open and hyper-competitive nature of the commercial system, organizations have to continuously learn to cope with changing environments.  The trends toward globalization and internationalization also reinforce the importance of communication and knowledge sharing (Inger and Gary, 2000).  For a better activation of knowledge in organizations, knowledge should be efficiently shared and circulated among group members and among organizations.  Knowledge sharing (KS), therefore, has become a fundamental procedure for organizations when managing knowledge.

 

Performance Impacts of Strategic Orientations: Evidence from Turkish Manufacturing Firms

Dr. Nihat Kaya, Gebze Institute of Technology, Turkey

Dr. Ibrahim H. Seyrek, Gebze Institute of Technology, Turkey

 

ABSTRACT

The research investigates the effects of basic organizational cultural orientations, namely entrepreneurial, technological and customer orientations on firm financial performance when market dynamism is high and when it is low. Data were collected from 91 manufacturing firms operating in The Marmara region of Turkey. The research results show that there is a positive and meaningful relation between entrepreneurial orientation and financial performance when the market dynamism is high. Also, there is a positive and meaningful relation between technological orientation and financial performance when the market dynamism is low. On the other hand, there is a negative and meaningful relation between customer orientation and financial performance when the market dynamism is either high or low. The theoretical and managerial implications are discussed.  New developments and changes occurring in the market force firms to develop more effective and competitive cultural orientations. The attitudes and expectations direct and motivate firms along their purposes. The high performance due to adopted orientation depends on sustainable competitive advantage and powerful organizational culture. These two concepts should be combined together in order to reach valuable, unique and difficult to imitate resources. In recent years, it can be said that the firms are emphasizing technological, entrepreneurial and customer orientation for this purpose and the level of market dynamism seems to affect both the development and the performance impact of cultural orientations. In this research, we investigate the performance effects of entrepreneurship, technological and customer orientations on financial performance of Turkish Manufacturing firms at lower and higher levels of market dynamism.  Firms are more and more operated in dynamic markets. Market dynamism refers to frequent changes in a firm’s business environment, which involves consumer preferences, technology, competitors’ actions, and other critical marketplace factors (Duncan, 1972).  These changes bring both opportunities and threats for firms.  Most importantly, the level of dynamism and types of changes in a marketplace shape the strategic choices of firms (Hambrick, 1983).  These issues will be addressed in the context of small and medium-sized manufacturing companies in Turkey. These companies are interesting for two reasons. First, they contribute a lot to the total value added in their industry. Second these companies are assumed to focus on the development of their technical and engineering capabilities as their bases of competition and they often pay less attention to marketing issues (Celuch et al., 2002; Avlonitis and Gounaris, 1997). Thus, it is expected that managers within these firms will demonstrate differences in technical, entrepreneurial and customer orientations and serve as an interesting sample. Entrepreneurial orientation is regarded as one of the most important resources for venture performance and sustainable competitive advantage (Covin and Slevin, 1989; Lumpkin and Dess, 1996). In many studies, entrepreneurial orientation is analyzed by innovativeness, proactiveness and risk-taking dimensions (Covin and Slevin, 1989; Kuratko et al, 1990; Lumpkin and Dess, 1996). Entrepreneurial orientation provides organizational resources that provide sustainable competitive advantage (Zahra et al., 1999). This effect is more obvious when it becomes a culture adopted by the people in the organization. The innovativeness dimension of entrepreneurial orientation shows the importance given by the company to developing new ideas for new product and process development, trying to focus on new ideas and R&D activities (Lumpkin and Dess, 1996). The amount of resources committed to activities which incorporate a great deal of uncertainty about the outcomes show the risk taking dimension of entrepreneurial orientation. The proactiveness dimension is related to  the intensity of utilizing market opportunities as a market research and being a first entrant into the market. Technological Orientation is a measure of how best the firm harmonizes its structure, system and resources with technology and it points out the willingness of the firm to use the technology as a competitive element. So the key point here is to turn the technology into a competitive advantage, whether the technology is obtained either from internal resources or external resources (Zahra and Nielsen, 2002).  For some firms, technological orientation provides the flexibility to produce different products or upgrade existing ones (Sanchez, 1995; Mcevily and Chakravarty, 2002). In some other firms, it provides the advantage of producing low cost, more specialized and standardized products.

 

Taiwanese Firms’ Foreign Direct Investment in China: Traditional Industries vs. Electronic Industries

Shu-Hua Chien, National Taichung Institute College, Taichung, Taiwan, R. O. C.

 

ABSTRACT

This study aims to investigate the differences of Foreign Direct Investment (FDI) capability carried out by different industries in Taiwan and to examine how sustained investment affects the competitive advantage of overseas branch firms.  Accumulating 13 industries, 2896 firms in total, findings show that different industries investing in China have significant differences on the capability of parent firms. Firms with international experience are positively related to the competitive advantage of the branch firms abroad. A firm should first empower the R&D capability of the product and obtain the experience of dealing with international operation before investing in China so as to enhance the competitive advantage of the branch firms through FDI. Such result indicates that among those firms investing in China, traditional industries apply more fixed capital equipment than electronic industries.  In recent years, the competition in the global market is getting more and more severe. In order to provide the product with good quality and competitive price, Businesses all do their best to reduce operation cost to meet such tendency. The Economy in China has grown rapidly in recent years.  After participating in World Trade Organization (WTO) in the late 2001, China appeals numerous firms’ investment from all over the world. Moreover, comparing to the neighborhood countries, the market of China has its intrinsic advantage.  Particularly, due to the downturn of global economy, market demands have decreased; only the market of China gives remarkable presentation, which has caught comprehensive attentions worldwide. Under the fierce global competition and uncertain environment, scholars have gradually transferred their concentration from traditional outer industry analysis into distinctive capability inside the industry. (Prahald and Hamel, 1990; Barney, 1991)  According to the theory of Foreign Direct Investment (FDI), a firm must equip specific capability and resource advantage before FDI. The purpose of FDI is to extend the technique and management capability of a firm to overseas market in favor of its profit-seeking motivation. Chuang et al. (1999) points out that international expansion conversely provides a terrific opportunity for multinational enterprises to extend their specific advantages. When Taiwanese firms invest in China, they would encounter unfamiliar operation environment; Taiwanese foreign investors must provide some kind of distinctive advantage so as to compete with local firms or foreign firms encompassing local knowledge and advantage without showing their own weakness. This study focuses on uncovering whether such distinctive advantage of a parent firm could expand the factory or purchase manufacturing equipment and transfer its resources to branch firms in China, and further enable the branch firms to achieve competitive advantage through sustained investment. The purposes of this study are stated as follows: To compare the differences in the constructs of “international experience”, “firms capabilities”, “competitive advantage” and “sustained investment” among Taiwanese firms investing in China. Whether the parent firms with outstanding international competitive advantage could enhance their overseas branch firms through sustained investment.  Most of the firms’ strategies in the past focused on the outside environment analysis. They would start with evaluating outer chances and threat, then examine the environment inside the firm, and eventually establish a firms’ development strategy according to the result of its shortage and advantage after analysis. However, Resource Base Theory School contended that outer environment is complicate and unstable; techniques keep changing, and customer’s demands and preferences also continue to alter.  There is no way to provide a complete strategic foundation based on the direction making in the consideration of outer environment. Since then, scholars of Resource Base Theory School began to stress on the resources and capabilities inside the enterprise.  They believe that resources and capabilities provide a firm with strategic direction; those are the keys for the firm to make good performance and create advantage; most important, they are the main source to make profits. (Collis and Montgomery, 1995) In other words, the appropriate distribution of business resources determines the operation efficiency and profit-making capability of a firm.  The development and accumulation of resources and capabilities inside an organization create the core competitiveness and enable a firm to obtain a long-term and persistent competitive advantage, which would protect the firm to be free from imitation of its opponents. (Porter, 1985)  This is also the main concern for a firm’s long-term strategic making and consideration declared by Resource Base Theory. Such declaration not only concentrates on the variable resources of a firm but also on intensifying the capability of the organization. (Prahalad and Hamel, 1990; Barney, 1991)

 

Internet Diffusion and E-Business Opportunities Amongst Malaysian Travel Agencies

Raja Mazhatul Yasmin Suraya, Universiti Malaysia Sarawak, Malaysia

 

ABSTRACT

The travel and tourism industry has been greatly affected by the rapid growth of the Internet and e-business technology.  It was regarded as the first area likely to do business electronically and predicted to become a successful online business area.  This paper reports an investigation into the adoption of the Internet amongst Malaysian travel agencies and into the likely future potential growth of e-business within the industry.  The study revealed that the Malaysian travel agencies are positive towards e-business.  Nonetheless, Internet usage amongst the agencies is still in an early stage, and the rate of adoption of e-business practices is slow.  The findings in this study were compared with those from previous studies using similar models and it was found that cultural issues are important in explaining the slow adoption rate of the Internet in Malaysian travel agencies.  The advancement of technology such as the Internet and e-commerce has changed the fundamental role and tasks of a travel agency in disseminating its products and services in the marketplace.  The role of the travel agency has become a major focus since the Internet is widely considered to be an agent of transformation within the travel industry.  Indeed, Malaysia is still new to the experience of exploiting innovations of technology within the travel industry.  Over a period of nine months in 2002, the total of 9.96 million inbound tourists had shown the potential growth of the travel and tourism industry in Malaysia (Tourism Malaysia 2002).  The innovation of the Internet and e-commerce is an opportunity for Malaysia to expose its assets as a means to promote new investments as well as increase the growth of Malaysian tourism, contributing positively to economic development.  Despite the advantages and convenience shared and offered through the use of the Internet and e-commerce, Malaysian travel agencies have been slow to deploy advanced technologies. The Malaysian Association of Tour and Travel Agents (MATTA) which is currently managed by YM Dato’ Seri Tunku Iskandar Tunku Abdullah, was established as a representative body for all travel agencies in Malaysia.  The association has recently been very concerned over the slow uptake of Internet technology among the agencies (Awang 2000). This paper aimed to explore reasons for the poor adoption rate of the Internet amongst Malaysian travel agencies, and to identify and investigate the significant factors in the slow Internet penetration within the industry.  An anticipated outcome of the research was to generate an understanding and prediction of the potential for e-business opportunities within Malaysian travel agencies in the near future.  Two key questions formed the focus of the investigation.  The broad questions are listed below along with their sub-questions. How are Malaysian travel agencies responding to e-business opportunities made possible by the Internet?: How has the adoption of the Internet impacted on travel agencies? Does the Internet assist travel agencies in fulfilling their business functions? Does the current usage of the Internet encourage the adoption of e-business practices within the travel agencies?  How are cultural factors affecting the adoption rate of the Internet in Malaysian travel agencies?: Under what circumstances have Malaysian travel agencies adopted Internet technology? Who are the main initiators of the decision to adopt Internet technology? Have cultural factors affected the Internet adoption rate among Malaysian travel agencies? The classical theory on diffusion of innovations introduced by Rogers (1983) has been widely used in previous literatures ranging from anthropology, education, sociology, general economics and many more.  The theory on diffusion of innovation explains how an adoption of a new idea takes place in a social system.  As Rogers explains, obtaining the adoption of a new idea is often very difficult even when it has obvious advantages.  Innovations require a lengthy period of time before full adoption.  According to Rogers, the adoption rate of an innovation is determined by 1) attributes of the innovation; 2) communication channels as an information-exchange relationship about the innovation; 3) time dimension since the innovation is introduced; and 4) social system in which the innovation is diffused.  The classical theory of Hofstede’s (1997) cultural dimensions has been studied and explored by many previous researchers.  Based on his research study, he isolated five independent dimensions of national cultural differences.

 

The Women at Principals’ Chair in Turkey

Dr. Mustafa Celikten, University of Erciyes, Kayseri, Turkey

 

ABSTRACT

This paper sets out to explore the reasons why there are a relatively small number of women principals in Turkish state elementary schools. Current literature on women principals reveals that while many professional fields are showing increasing numbers of women in managerial and executive positions, the same cannot be said for educational administration. To collect information, this researcher interviewed three women principals about barriers women face as principals. Turkish society has determined that only males make good leaders; therefore, it continues to deny easy access for women seeking to be principals because they do not fit the norm. Though Turkish women are gaining greater access to other male-dominated professional positions, as one principal stated, “women are losing ground in school administration.”  Although the life patterns of the majority of Turkish women remain conditioned by male-dominated institutions relating to the family, society, and education, the traditional ideal of a woman remaining in the home, and of a male providing “protection”, has been continuously changing as a result of economic and demographic developments. This change is resisted, however, by more conservative members of society, who have pushed during the 1990’s for a renewed emphasis on a woman’s role as wife and mother. Women in Turkey, continue to marry early, particularly in the rural areas, and bear large numbers of children, entering into a pattern of high fertility, which is the norm in some regions (The World Bank, 1993:1). Overall, the prevailing social norms still leave women dependent on men, putting them at risk when deserted by their husbands.  These norms continue to produce a strict division of labor and a highly gender-segregated labor market. Recently, however, research on women in administration, management, and leadership has received increased attention, due primarily to changes in the labor market, shifts in perception of class membership, and new gender formations emerging within education in the 2000s. For example, consistent with this idea, Ragguet et al. (1994:14) pinpointed that the number of women in the work force in Turkey increased substantially. They further stated that more women than ever before are pursuing advanced degrees, and there has been a noticeable shift of women going into business rather than education. According to Brunner (2000), though women have made great strides in the workplace over the years, the percentage of women in the top seats of the nation’s school districts is the same in 2000 as it was a century ago. She further explained that when one compares the number of women teachers with the number of women in school administration the percentage is disproportionate because the majority of teachers are women and their numbers are not reflected in the number of woman in administration. Turkish society still wants woman to be in teachers, to take care of the children, nurture them and make sure that they are safe, but not to be administrators. Women have long been well represented in the teaching position. Yet, traditionally, there has been an inverse relationship between the number of women qualified to serve in administrative positions in the school and the rate at which women actually fill these positions (Kuh and McCarty, 1989). The following numbers tell part of the story and suggest the prevailing trends. According to the Minister of National Education Statistics (2003), women held 67 % of all teaching positions but only 4 % were principals. Men held 92 % of the elementary principal’s positions, and 99 % of the high school principal’s positions. The current data suggest that males are overwhelmingly most likely to be principals of schools than women in Turkey. Women school principals are found in particular school types, such as single sex girl’s schools and junior secondary schools where the students are between 13 and 15 years old. Although Turkish women are gaining greater access to other male-dominated professions, they are losing ground in the field of school administration.  The disparity in the numbers of women as principals relative to their numbers in the teaching force, may be the result of many factors: limited access to higher education (Growe and Montgomery, 2000), tradition (Sakalli and Beydogan, 2002), hiring practices (Blackmore, 1994), reluctance to seek the role (Cubbillo, 1999), pressures about raising children, lack of mobility, (Brunner, 2000), lack of professional networking, lack of female role models, (Mertz and McNeely, 1998), the exhausting nature of the position (Smulyan,2000), bias against women (Arnot et al. (1996), conflicts with raising children, issues related to family needs (McClay and Brown,2001), and dual responsibilities of traditional and professional roles. These inequalities in opportunity have resulted in too few women being hired for administrative positions at the local and national levels.

 

An Empirical Study of Corporate Governance and Corporate Performance

Hsiang-tsai Chiang, Feng Chia University, Taiwan

 

ABSTRACT

Recent accounting scandals have renewed attention to corporate transparency. According to signaling theory, under information asymmetry, corporations with superior information transparency signal better corporate governance. Prior research also indicates that corporations that have better corporate governance signal better performance. This study provides an empirical analysis of the relationship between information transparency and corporate governance in Taiwan’s high-tech industry. This research adopts Standard & Poor’s (S&P) information transparency measurement criteria to gauge information transparency of selected companies. Companies’ annual reports are used in S&P research. However, from the investor’s point of view, transparency information can be obtained not only from the annual report but also from other public sources, such as the company’s web site and the Taiwanese Security Exchange Committee and Taiwan Economic Journal databases. Therefore, this study supplements S&P criteria with information gathered from all public materials in order to obtain more comprehensive transparency information.  The results indicate that board size, board ownership, institution ownership, financial transparency, information disclosure, and board and management structure and process have significant relationships with operating performance. The results of this study also support that information transparency is one of the most important indicators for evaluating corporate performance. Recent accounting scandals have renewed attention to corporate transparency. According to signaling theory, under information asymmetry, corporations with superior information transparency signal better corporate governance. Prior research also indicates that corporations that have better corporate governance signal better performance. This study provides an empirical analysis of the relationship between information transparency and corporate governance in Taiwan’s high-tech industry. The theory base of this study is signaling theory. Spence (1973) states that if information asymmetry exists between a company’s managers and investors, the company can provide information to the investor in order to eliminate the asymmetry. In other words, if information asymmetry exists, there is no way for the investor to understand the real situation of the company’s operations. Prior research indicates that investors rely on the information sent out from the company to make investment decisions (Leland and Pyle, 1977; Ross, 1977; Bhattacharya, 1979; Ambarish, John and Williams, 1987; Poitevin, 1990; Ravid and Saring, 1991). In practice, companies with good operating performance often disclose information to the public to promote positive impressions of their company. Yeh, Lee, and Ko (2002) state that major contributions of corporate governance to the company include enhancing operating performance and preventing fraud. According to the research of Black, Jang, and Kan (2002), companies with better corporate governance have better operating performance than companies with poor corporate governance. A sound corporate governance structure not only provides useful information to investors and creditors to reduce information asymmetry but also helps the company to improve operations.  According to related literature, major corporate governance indicators include the structure of the board of directors, the structure of ownership, and information transparency. These indicators are discussed in detail below. The board of directors is the top executive unit of a company and is charged with the responsibility of supervising operations of the company’s management. Indicators to evaluate the governance function of this structure are as follows:Inside directors generally have a greater understanding of the company’s operations; therefore, they can enhance the efficiency of the board of directors and the precision of their decisions (Yermack, 1996; Lang, 1999). However, independent directors are more professional in business operations and can more easily achieve the supervising function, reduce the possibility of collusion of top executives, and prevent the abuse of company resources, thus improving operating performance. The optimal number of directors is a dilemma for companies. Efficiency is reduced if the number of directors is too large because there is an increased difficulty in achieving agreement concerning decisions. On the other hand, decision-making precision is reduced if the number of directors is too small because there may not be adequate discussion of issues involved.

 

Impacts on Improvement of Organizational Synthetic

Value Caused by Social Network Relationship

Tsai–Lung Liu, I-Shou University and Tajen Institute of Technology, Taiwan

 

ABSTRACT

The nature and contents of strategic marketing include the organizational marketing resources of choices, commitment and actions. Organization adopts these three strategic mechanisms to gain and create organizational value or generate rent. Many strategic researchers rely on strategy to generate rent, but the researchers of different schools have their subjective research issues of value creation. This research paper attempts to explore the contents of resource-based view (RBV), dynamic capabilities view (DCV) and social network perspective (SNP), and integrate the three organizational theories. After that, this paper focuses on the investigation of how these three different organizational theories create different synthetic value. With the inference of propositions, this paper finds that according to the researchers with resource-based view, the Ricardian rent is created by idiosyncratic resources through the establishment of isolating mechanism; and the researchers with dynamic capabilities perspective emphasize the effects of knowledge learning procedures towards the accumulation of competitive advantage and the creation of knowledge value.  But this paper argues that both RBV and DCV theories focus more on organizational resources and knowledge internalization than the development of external social network relationship, such as negligence of inter-organizational relationship, customer relationship, and supplier relationship. The implications of this research point out that RBV and DCV can perform a synthesis of market value.  Finally, this paper concludes an argument that if organization develops outstanding social network relationship (SNP) as an intermediary effect, the RBV-DCV-SNP synthetic value will surpass RBV-DCV synthetic value.  Many marketing strategic researchers emphasize the adoption of market orientation perspective to acquire and allocate appropriate market resources with the main purpose of market value increment for generation of organizational rent (Afuah, 2002; Chatterjee & Wernerfelt, 1991; Isobe, Makino., & Montgomery, 2000; Schoenecker & Cooper, 1998; Slater & Narver, 1996; Spanos & Lioukas, 2001; Srivastava, Fahey., & Christensen, 2001). The acquisition ways of resources vary with different perspectives taken by different researchers, such as organizational capabilities perspective (Afuah, 2002; Spanos & Lioukas, 2001), technological resource perspective (Shi, 2001), and marketing resource perspective (Chatterjee & Wernerfelt, 1991; Srivastave et al., 2001; Vorhies & Harker, 2000). According to Vorhies and Harker (2000), there are two means to acquire appropriate marketing resources:  (1) the network relationship of channel control, (2) the mixed marketing strategy (e.g. market development, development or design of product, promotion, pricing, marketing research).  From the strategic marketing perspective, organization focuses on how to acquire marketing resources (e.g. choices, commitments, and actions) and gain and create organizational value. However, after literature review, this paper finds that most of the organizational market value measurements still use balance sheet to measure or evaluate the situation of assets. It may have omitted the assessment of some intangible assets (e.g. knowledge, relationship, value, technology, resource characteristics, etc.). As a result, the measurement of intrinsic organizational value is not done. According to the longitudinal observation of the American stock market within the two decades from 1973 to 1993, there was an average increment of the ratio of market value or book value (accounting book value)  from 0.82% to 1.69&. This increment implied that approximately 40% of the corporations listed in the American stock market did not have their average market value shown on their balance sheets.  Speaking of knowledge orientation from the organizational perspective, there was more than 100% of the intangible assets whose market values were not shown on their balance sheets (Edvisson & Malone, 1997).  From here, it is obviously kown that the intangible assets (e.g. knowledge, relationship, innovation, goodwill, and trademark) bring higher market value to organization, whereas the tangible assets (e.g. land, equipment, capital) bring less. In view of this, this research paper attempts to take three perspectives of organizational theories, including resource-based view (RBV), dynamic capabilities view (DCV) and social network perspective (SNP) to explore the issue of how to improve marketing resources and create market value.  This paper is going to focus the studies on the following few points: 1. This paper attempts to explore the contents of RBV, DCV and SNP, and integrate the three organizational theories. 2.  This paper focuses on the investigation of how these three different organizational theories create different synthetic value. 3.  This paper specifically focuses on the exploration of how RBV-DCV-SNP synthetic value surpasses RBV-DCV synthetic value as SNP is developed as an intermediary effect.  According to Srivastava et al., (2000), marketing resource is divided into two kinds: (1) Relationship marketing resource: It is related to external organization, but not completely owned or controlled by intangible assets of organization. It has cognitive relationship with external stockholders (e.g. customer channel, strategic partnership, entwined assets, complementary product and service supplier, outsourcing agreement, network ecological relationship). Its establishment is based on trust or goodwill mechanism. (2) Intellectual resource: It includes the entrenched assets and knowledge of internal organization (e.g. embedded know what and know how in individuals and process flow).  Organizational market value means that the market investor focuses on the assessment of corporation value.  Usually market value and book value have different value implications (O’Byrne & Stevalen, 1996).  Stewart (1997) refers to the Scandia AFS intellectual mode and divides it into three types of intellectual capital:  (1) Human capital, which refers to the employees’ knowledge, technology, capabilities and experience of the whole organization. (2) Structural capital, which refers to the technology, invention data, publication and process of the whole organization. (3) Customer capital, which refers to the relationship between organization and customer (e.g. customer satisfaction, customer participation, customer service capability, customer alliance value). This research paper focuses on how organization increases and improves marketing resources and creates marketing value through useful human capital, structural capital and customer capital.  

 

Best Practices Regarding Grief and the Workplace

L. Sandra Maxim, Lesley University, Cambridge, MA

Dr. Maria G. Mackavey, Lesley University, Cambridge, MA

 

ABSTRACT

This paper explores employer and employee practices and opinions around bereavement in the workplace.   In doing so, current trends among employers were analyzed regarding employee bereavement benefits, as were employee attitudes towards time-off policies and workplace sensitivity to the issue.   Assumptions:  A number of assumptions were made in the writing of this paper.  It was assumed that the 12 bereaved participants in this study were native-born citizens of the United States.  We assumed that the biggest reaction from grieving employees would be that they desired more time off from work to contend with their grief.  It was assumed that an employer’s permission or acknowledgement of the loss is very important to employees.  We also assumed that employers’ opinions would not vary from region to region, but would be fairly consistent across the United States.  Two surveys were used to gather data for this project.  The survey for gathering data from bereft employees was posted at web sites (grief support web site and NEHRA) where random respondents replied, providing detailed information regarding their bereavement experience and their working relationship with their employer.   The defining criteria for this survey were that the bereaved person (or spouse of) had to have been employed at the time of the loss.  No regard was given to age, sex or other characteristics of the surveyed candidate.  There were 12 total respondents to the survey.  The sample size is not large enough to make inferences about the population, but given that the respondents were a cross section of the population, of varying ages and occupations, it is helpful to note that their responses were consistent with the assumptions of this paper.  More research would need to be conducted along these lines in order to assert a true and accurate reading of the population.  A second survey was distributed to various employers throughout Massachusetts to gather data related to bereavement policies and attitudes in the workplace.  There were a total of 34 respondents to this survey, 15 from Massachusetts and the remaining 19 from other states.  The defining criteria for this survey were the number of days their policy provided for bereavement leave and the general attitude and flexibility of the organization.  Information was also acquired via employer web sites nationally to be compared with regional data.  Findings:  Generally, employees had a high expectation that employers be flexible with work demands and time off following a loss.  The average bereavement policy of 94% of all responding employers was either 3 or 5 days bereavement leave with pay.  The majority of organizations (67%) offered a 3-day bereavement leave.  The nine organizations that offered 5 bereavement leave days were all educational institutions.  Training for managers as to how to respond to grief or grieving persons was offered or mentioned by none of responding employers.  All the results combined indicate that employers could benefit from providing managers, supervisors and co-workers with training around grief in the work place. When discussing grief, it is important to begin by clarifying the parameters of how we are referring to grief.  After all, there is grief as a medical or psychological condition, personal grief, collective grief, national grief, grief as a cycle or journey, even grief as part of evolution.  There are as many ways to categorize and describe grief as there are people to experience it.  This paper will focus on the personal grief experience and how it both impacts and is impacted by the workplace.  What is the stance of employers in America regarding grieving employees?  What should it be? While at some point in our lives, we all experience the loss of someone close to us, there is surprisingly little room in the American workplace in which to acknowledge the process of our grief.  Employees at all levels of the organization have some expectations about what their employer and co-workers should or should not do under these often trying circumstances. The September 11,th 2001 tragedy at the World Trade Center helped bring collective grief and the grieving process to the forefront for many, but surprisingly little progress has been made regarding grief resulting from personal experiences in the workplace. 

 

Business, Combinatorial Theory and Decision-Making

Dr. Jose Villacís Gonzalez, San Pablo CEU University, Madrid, Spain

 

ABSTRACT

The most comprehensive definition of Economic Science is based on opportunity costs. Once opportunity costs are identified, then an appropriate decision (or range of decisions) is automatically defined: it is a daily activity of business and one which gives the economic reality some meaning.  The theory of decision has been studied principally from a Microeconomics approach, and particularly from the point of view of the theory of the company, and of course from the point of view of game theory. And who can say that the investing activity is not a game? In this paper we will extend decision theory to the field of combinatorial theory. The order or the way in which goods or inputs or production factors are combined, is determined by the objectives. Such is the fundamental sense of combinatorial theory that we want to communicate here. This will be our starting point. From combinatorial theory we will move on to the field of decision theory, which according to our research is the activity that constitutes the final stage. Given certain objectives – which due to economic reasons cannot be all met – we must give up some of those objectives in order to achieve others. This activity involves making a decision; it means making a choice. A choice is a subjective approach that conditions the next action, which is the firm decision. We define these objectives and the means to reach them as a specific combination of factors on the one hand, and a specific combination of results on the other hand.  This paper starts by dealing with two different premises: one is a simple set of goods, which can be made up of consumer goods or production factors; and the other is the economic and mathematic possibility of ordering such goods. By ordering we mean the possibility of combining them in a certain different ways. For example: given the goods a, b and c, we can combine them in different groups; for instance: (a,b, c) (a,c,b) (b,a,c) (b,c,a) (c,a,b) (c,b,a). We call batch to the simple enumeration of the quantity and type of goods that are indifferently offered to the consumer (consumer goods), or the producer (production factors). In this example, the possible menus would be: (a,b,c) or (a,c,b), etc. That is, the specific orderings from which the consumer and the producer will have to make a choice. Therefore, it is essential in Economic Science to study combinatorial theory, and particularly decision theory. In order to establish the number of menus to be consulted we should take into account the initial items within the batch, and ignore the magnitude of the consumer’s or the company’s funds to purchase them. The batch is simply a piece of data. We consider that the goods (whether consumer or production goods) that are not within the batch are irrelevant. A batch is viewed as incomplete if only one of its items is lacking, and we consider that quantities of one or several goods that are outside the batch fall outside our hypothesis. Once we identify a number of goods, which correspond exclusively to all the goods within the batch, we may count the menu combinations. The term ‘combinations’ is very broad and embraces in Mathematics other concepts, such as permutations, variations –with and without repetitions–, and combinations per se. In this example, and following our rigorous definition of batch, we deal with ordinary permutations. In ordinary permutations, all the elements identified are ordered in every possible way; the most basic example would be the orderings of a set of two goods: (x,y) (y,x). An example of a set of three goods is given in paragraph 1 above, where (a,b,c) would give 6 possible different orderings. Math provides us with a very simple formula, which is n! (factorial n) – n being the number of elements to be ordered. In the abovementioned example of three goods (a,b,c), the answer is given when n = 3, and this equation produces the following result: 3! = 3.2.1. = 6. And if there were four elements, the number of orderings equals 4! = 4.3.2.1. = 24.   If we define as combinations or specific orderings all the menus that can be set up with one batch of n different goods, there will be n! different menus. Such is, in our opinion, the truly relevant basis of Combinatorial Economic Science, for it enables us to count the possible menus and then make a choice. We would never be able to make a choice if it were not possible to know the nature of the goods and the large number of possibilities for combining them. Such knowledge has a vertically expanding effect on the learning capacity and the wisdom of the actors participating in the choice. Otherwise, the starting situation would be one of economic death, a fatality which reflects the ignorance of the consumer about what is available for consumption, the producer’s ignorance about the extent and nature of required production, and especially the ignorance of the market, which would not know how to coordinate the consumers’ wishes with the producers’ supply.

 

Role and Relevance of Web Supported Learning for First Generation Learners

Dr. Jazeela Sherif,  Majan College (University College), Oman

Rehan Khan, Majan College (University College), Oman

 

ABSTRACT

The fear of exclusion in a digital world has driven the higher educational institutions (HEI) the world over to quickly adapt to the modernities in curriculum design. First generation learners who are already laid back in the learning process must consider this opportunity to catch up with the rest of the world. This paper reviews the relevance and role of web supported learning in overcoming the major barriers that such learners may encounter in a traditional learning environment.  The study draws the conclusions from literature review, discussions, personal experience of the authors and questionnaire surveys among the students of a HEI in Oman, one of the Middle East countries. The findings suggest that the effective use of web supported learning is hampered by a multitude of factors entailing infrastructure deficiencies, apathetical policies in incorporating web based technologies (WBT) and cultural and attitudinal issues. There are wide gaps in the use of web resources between the student community in Oman and abroad from an academic perspective, which raise serious concerns. If anything has lightened the rigour of academic life of students in the recent times it is nothing else but the Internet. For students, especially for those at the university level, who face challenges while doing course assignments independently, nothing can be as exasperating as lack of information.  Apart from the appeal of Internet as a source of excitement   and a comfortable way of being ‘wired up’ constructive use of its true potential is also being explored by universities worldwide.   A technology that has brought in a paradigm shift in the traditional pedagogy that is criticized for its predominant use of    ‘monologue’ lectures and teacher centered approaches is certainly going to stay and dominate the field of learning across ages, cultures and geographies. The academic community is divided in their opinion about the application of web based resources and technology in the traditional curriculum due to various reasons. However, WBT’s enormous capabilities to penetrate the nook and corner of the globe and to accelerate and expand the process of learning of every individual cannot be overlooked, especially, by regions, which were late starters in education.  Even in lesser developed countries socio-economic or technological shortcomings have been pushed aside   to pave the way for, at least, a selective or phased introduction of WBT in the educational sector and the mainstream activities as well.  Growth of WBL has a human face (Williams 2001) as one reckons the issues of first generation learners who have to cope with multiple learning issues while successfully adapting to a different and challenging environment.  Oman is one of the Middle East countries, which have built up the local educational facilities in the late 1980s. Currently, the number of private and government university colleges is only nine in Muscat, the capital city of Oman. In fact, its first University (Sultan Qaboos University) came into existence only in 1986. Its workforce, both white and blue collored is dominated by expatriates from all over the world due to the need for outsourcing specialized technical and managerial skills. The dependence on expatriate labourforce is being systematically reduced through meticulously planned programmes for training and educating the nationals. More than that the measures to diversify into non-oil sectors and the pressures of globalization have hastened the process of development of   local labour resources and their competence. The scope of technology support that can be provided and utilized in such a fast track growth plan of equipping the labourforce with the state of the art skills is enormous. Sadly enough, this is neither explored nor used effectively, particularly, by the educational institutions here.  A roughly systematic observation over many years by the authors hints that there is an over dependence on the comforts of technology than the real gathering and integration of knowledge that can be applied creatively. Developing managerial skills needs extensive   applicative knowledge of a variety of subjects, which should be developed through effective undergraduate and graduate education and later through training and development. The focus of this paper is to establish the relevance of web-supported education in achieving the desired goals of university education by adopting a realistic approach in understanding the issues involved.  No scientific account of research information is available in the country to authenticate what the authors would add here as the background of the study. Having to learn in a foreign language is the most difficult barrier, which any teacher would have to overcome prior to imparting knowledge.  Although the student community would not concur readily with some of the following cultural and attitudinal issues that possibly hamper the process of deriving the true benefits of learning, the research process demands such an exercise.

 

The Relationship between Multinationality and the Performance of Taiwan Firms

Dr. Yi-Chein Chiang, Feng Chia University, Taiwan, R.O.C.

Tzu-Hui Yu, Feng Chia University, Taiwan, R.O.C.

 

ABSTRACT

We examine the relationship between the degree of multinationality and a firm’s performance in Taiwan, which is a small open economy and relies heavily on international expansion. Using a sample of non-financial firms in Taiwan for the period from 1998 to 2002, we find evidence that there is an inverted-S-shaped relationship between the degree of multinationality and the performance of a Taiwan firm. That is, a dual threshold point exists to show a positive relationship at a lower or higher degree of multinationality, and a negative relationship for a middle range in the degree of multinationality.  Taiwan is a small open economy. Firms located in Taiwan always have been forced to direct most of their business operations toward foreign countries due to the scarcity of natural resources and the small home markets. Exports and foreign direct investments (FDIs) are common strategies used in the international activities. The ratio of exports to GDP has always been over 50 percent in Taiwan. Besides, until June 2003 about 75 percent of the total number of listed firms in Taiwan have subsidiaries overseas. (1)  Numerous empirical investigations have attempted to study the relationship between multinationality and firm performance. However, results from these studies have been inconclusive and contradictory. These range from “positive” (Grant, 1987; Kim, Hwang, and Burgers, 1993; Tallman and Li, 1996), to “weak” (Kumar, 1984; Morck and Yeung, 1991), to “negative” (Siddharthan and Lall, 1982; Shaked , 1986; Michel and Shaked, 1986; Denis, Denis, and Yost, 2002), to an “inverted-U” shape (Daniels and Bracker, 1989; Geringer, Beamish, and DaCosta, 1989; Sullivan, 1994; Ramaswamy, 1995; Hitt, Hoskisson, and Kim, 1997; Gomes and Ramaswamy, 1999), to a “U” shape (Qian, 1997; Mathur, Singh, and Gleason, 2001; Ruigork and Wagner, 2003), and even to an “S” shape (Contractor, Kundu, and Hsu, 2003). Therefore, continued academic investigative efforts in this direction would appear to be useful. In contrast to most prior studies relying on linear and curvilinear models, this study considers a three-stage model following Contractor, Kundu, and Hsu (2003) using a sample of Taiwan firms for the period of 1998-2002. Under the classical multiple regression analysis on the five-year averaged data, and pooled cross-sectional/time-series regression analysis, we find that an inverted-S-shaped relationship in a cubic model is well supported. That is, a dual threshold point exists to show a positive relationship at a lower or higher degree of multinationality, and a negative relationship for a mid-range for Taiwan firms’ performance. Early studies hypothesize a linear relationship between multinationality and firm performance. Then, other studies recognize that multinationality may encounter with both risks and advantages, and have both costs and benefits. They improve the linear model by assign the squared terms to be the curvilinear model. There exists a threshold in the curvilinear model. Thus, it is s U shape or an inverted-U shape.  In an U-shaped relationship, multinationality is positively associated with performance only beyond some threshold of multinationality. In the early stage of foreign expansion, firms are subject to the “liability of foreignness” (Hymer, 1976). The unfamiliarity with foreign markets, cultures, and environments results in large learning costs, which in turn translates into lower financial performance. As further expansion takes place, however, the fixed costs and overhead burden of headquarters operations and large R&D outlays can be increasingly spread over dealings with more nations (Kogut, 1985; Porter, 1985). Besides, the greater the number of countries, the more firms can engage in price discrimination, strategic cross-subsidization, and arbitrage (Contractor, 2002).  In an inverted-U-shaped relationship, multinationality is positively associated with performance only before some threshold of multinationality is reached. In the early stage of foreign expansion, firms have incentives to establish foreign subsidiaries in geographical and cultural proximity to their home country. In addition, host countries may offer subsidies and tax reduction to attract FDIs. As firms establish more foreign subsidiaries, however, the number of internal transactions increases and government costs can reach a point where they outweigh any potential benefits, which in turn translate into lower financial performance (Tallman and Li, 1996; Hitt, Hoskisson, and Kim, 1997). The same logic applies to international expansion into many dissimilar markets. The costs of managing locational diversity, along with political, cultural and idiosyncratic market dimensions, can eventually erode profit margins when high levels of internationalization are achieved (Geringer, Beamish, and DaCosta, 1989; Ramaswamy, 1992).

 

Scalable E-Business Integration

Dr. Thang N. Nguyen, California State University Long Beach, CA

 

ABSTRACT

This paper presents a scalable e-business integration model with a prototypical implementation, both horizontally and vertically, for an n-tier client/server environment. The model offers solutions to a rather large class of common enterprise-level e-business integration problems involving message exchange and field-level message handling. The model and its prototypical solutions are based on four concepts: (1) a distributed (control) execution concept similar to the heart and its circulation (without the need of Interface Definition Language - IDL -  compilation process), (2) a global (centralized) knowledge of enterprise application information similar to a function of the brain, using LDAP – light weight directory access protocol, (3) configurable DLL (dynamic link library) inline services similar to the functions of different organ systems, to add specific functionalities, and (4) connectors and adapters similar to the functions of the limbs to extend services to connect disparate worlds. The model is capable of linking diverse e-business applications, including legacy systems, object-oriented systems (e.g. COM/DCOM-CORBA), shrink-wrapped package applications (e.g. SAP R/3, PeopleSoft), financial network (e.g. SWIFT) and others application systems (e.g. native IBM MQSeries applications), to keep the enterprise e-business application connected, operational, alive and well.  Application-to-Application communication concepts and mechanisms have been developed since the day there was a need for programs to communicate with one another. Concepts such as shared memory, named or unnamed pipes (e.g. FIFO, first in first out) and others were collectively called IPC (Inter-Process Communications). IPC initially used a predefined communication area (in S/360 assembler language or IBM transactional CICS system) or a linkage section (in COBOL) for passing information between applications. Other schemes such as Remote Procedure Call (RPC) in various original client/server models and the newer schemes based on RPC concept such as OSF/DCE, Microsoft COM/DCOM, CORBA, and Sun Java RMI have appeared and become widely accepted (Zahavi et al. 1999, Altman et al. 1999).  All these schemes however require a pre-compilation step using a language generally called Interface Definition Language (IDL) to set aside work areas in each machine, called stub and skeleton, for storage of data fields to be sent/received between applications to resolve the difference between data types and formats, and to publish the caller/callee interface between different applications (Wallace, 1999). Advanced concepts for client/server models beyond the basic model of one client-one server helped the creation of concepts such as object factory, directory, dynamic library and the like (Software Technology Review 2002).  This paper presents a rather different line of concepts pertaining to client/server model (Nguyen, 2002) and extends the model to meet e-business scalability requirements both horizontally and vertically. With this model, the paper argues that for a large class of common problems in enterprise application integration in particular and in e-business integration in general, the concept of this scalable model and its implementation will be found to be powerful, fast, with ease of use and maintenance, with high flexibility in reusability. The application structure (Figure 1, left hand side) discussed in this paper consists of 4 major layers: at the top is the application logic layer where business logic is coded. The API layer consists of basic API calls in a Client/Server (C/S) system such as get connected (or initialization), put request (or put response, if server), get response (or get request, if server) and get disconnected (or termination). These particular APIs are mapped to the transport layer API for sending and for retrieving messages from the input queue associated with the application. The transport layer may or may not offer asynchronous messaging. As a general case, we assume the underlying communication scheme is asynchronous messaging (e.g. IBM MQSeries). The middle layer called exchange connector with configurable inline services (i.e. selected DLLs) is the heart of the structure. The exchange connector’s primary function is to route the message among the applications (client or servers) via translated API calls which then place the message in the input queue (if asynchronous communication) of the target server. The configurable inline services provide specificity in required services that each client or server application might need. By inline services, we mean specific pre-packaged, function-specific DLLs that can be dynamically laded and called to provide a particular service such as encryption/decryption, conversion, etc.  All queues are input queues. The message from an application (e.g. client) will be placed in the input queue of the target receiver (server) by the underlying transport mechanism.

 

International Business: Taiwan’s Edge in the Asian Financial Crisis

Dr. Lawrence K. Wang, Fort Valley State University, Fort Valley, Georgia

Dr. Dwight M. Scherban, Central Connecticut State University, New Britain, CT

Dr. Joseph Bonnici, Central Connecticut State University, New Britain, CT

 

ABSTRACT

Taiwan eased itself out of the Asian Financial Crisis relatively fast. This article stems from an extensive analysis about the factors that contributed to the island’s economic recovery and financial health and highlights the disciplined approach that marks long-term Taiwanese public policy. The 1997-1998 Asian Financial Crisis (“crisis”) that hit the Philippines, Thailand, Malaysia, Indonesia, Taiwan, Singapore, South Korea, and Hong Kong resulted in a number of scholarly studies.  For example, Goldstein, Brown and Blejer (1998) examined the financial and currency crisis through a descriptive analysis.  Another group of scholars (Corsetti 1998; Mishkin 1997; and Shin 1998) explored what caused the crisis. A third group, such as Berg (1998) and Fischer (1997), sought to explore to what extent the crisis was predictable. The studies show that in the midst of all this Taiwan got off relatively quickly out of the shadows of the crisis, experiencing only a short period of slow growth and financial turbulence. Other Asian countries such as South Korea, Indonesia, and Hong Kong, suffered a sharp economic downturn and recession. Taiwan received no aid package from the International Monetary Fund in handling the crisis. Taiwan seems to have had a more solid economic foundation and responsive synergy than does the rest of the region in fending off the turmoil.  Our study focuses exclusively on Taiwan and searches the academic and business literature for explanations about its successful coping with the crisis. The search is for interactive qualitative factors that contributed to Taiwan’s response. This is followed by a survey among subjects who followed Taiwan’s journey through the crisis. The present study scoured research databases in an attempt to discover the several factors that emerged as the successful indicators of Taiwan’s ability in coping. They are qualitative, quantitative and interactive. And they are supported by business professionals both within and outside Taiwan. Each part of the study reflects a part of Taiwan’s synergy in crisis management.  One factor that appears in the literature is that the Taiwanese government upgraded the compulsory education from six years to nine years. Education is well emphasized in Taiwan (Wang and Rawals, 1975). Since 1994, virtually all school-age children attend school. About 30 percent of the nation's population is in an educational institution of some type. More than 90 percent of junior high graduates continue their studies in regular senior or vocational high schools. Taiwan has a good system of higher education with 120 universities and colleges (Ministry of Education, 2000). The educational system has provided the nation with a large pool of skilled manpower. Taiwan launched a number of ambitious modern infrastructure projects such as airports, highways and freeways; railroads and harbors (for example, Taichung harbor, and the expansion of Keelung’s and Kaoshiung’s seaports); civil aviation; the building of facilities for steel, chemical, shipbuilding, and other manufacturing industries; urban transportation systems; and the development of financial and banking networks. These projects laid the solid foundation of economic development that led to the achievement of economic prosperity (Yu, 1995). Taiwan, an island economy that lacks natural resources, directs its efforts to transform imported inputs to quality exports. Utilizing a comparative advantage of value-added-service productive capability, Taiwan has become an economic power that is a leading producer of hi-tech goods and services. In spite of the drag of the crisis, the export-oriented economy on the island continues to experience an economic growth rate of about 5-6% per year. Taiwan’s export-oriented activities would, in part, contribute to the continuous development of “a knowledge-based economy within 10 years” (Tang, 2000). In order to industrialize its underdeveloped economy, Taiwan built a medium-small economic structure (Yu, 1990). This resulted in the transformation of the landlords and non-landlord capitalists to entrepreneurs. The continuous development of medium-small businesses gave rise to a healthy economic structure that is adaptive.  In 1948, the Kuomington government started the land reforms. This began with a Farm Rent Reduction policy that reduced the rent on farmlands. Later, the government compelled agricultural landlords to accept stocks of major government enterprises for one-ninth value of their lands.  These government corporations included Taiwan Forest & Agriculture, Taiwan Mining & Engineering, Taiwan Cement, and Taiwan Paper & Pulp (Ito, 2000).  As a result, Taiwanese landlords ended up contributing to a dynamic engine of economic development.

 

Decomposing Performance of Funds-of-Funds

Dr. Anthony Tessitore, City of London Quantitative Management, Newark, New Jersey

Dr. Nilufer Usmen, Montclair State University, Upper Montclair, New Jersey

 

ABSTRACT

The paper decomposes the performance of a group of fund-of-funds that hold closed-end funds with exposures to stock markets around the world. Employing a style-based attribution methodology it finds that the group has underperformed a global benchmark slightly. The decomposition of outperformance shows that two major attributes, fund selection and country allocation have contributed to this underperformance, significantly but in offsetting ways. The results indicate that “good fund selection” has come at the expense of “poor country allocation”, and this trade-off was unavoidable for the managers of these funds.  A fund-of-funds (FOF) investment style is becoming increasingly popular. An FOF is a broadly diversified portfolio that invests in a number of other funds rather than directly in securities. They can reduce risk further by diversifying across low correlated asset management styles and investors can achieve this wide diversification over management styles by a single purchase.  There has not been a study that analyzes the performance of FOFs that exclusively hold closed-end funds. Are these investments earning excess returns over benchmarks and how can their performance be characterized? This paper addresses these questions for a group of FOFs incorporated in the United Kingdom as investment trusts. Investment trusts are closed-end funds that usually sell at a discount to net asset value (NAV). These FOFs invest in other investment trusts or closed-end funds, making them closed-end funds of closed-end funds. Since closed-end funds include investments in certain regions or countries around the world, an FOF has a wide global focus. They provide diversification across many different markets around the globe. The approach used in measuring and decomposing performance into three effects, discount/premium effect, NAV effect and country effect, was developed in Tessitore and Usmen (2001). The approach is unique for deducing the country exposure of an FOF from its own performance using a style-based methodology as in Sharpe (1992). This is in contrast to other methodologies that determine country allocation of a portfolio of funds from (for example) semi-annual company statements.  The findings of the study show several interesting results. First, the total outperformance for the group is slightly negative. These FOFs did not earn excess returns over a diversified global index, MSCI All-Country World Index. Second, the decomposition of outperformance into constituent effects provides insight into the source of negative performance. FOFs were successful at fund selection since the NAV effect was consistently positive. The funds selected by FOF managers outperformed an appropriate benchmark that mimicked their country allocations. On the other hand, bets placed on country allocation worked against these managers since the country effect was consistently negative. The country allocations of these FOF managers could not outperform the MSCI All-Country benchmark. The two effects, fund selection and country allocation, offset one another, leaving the group with a slight negative performance. A third effect, the premium/discount effect was also slightly negative over the period studied.  The data includes the funds in the TrustNet category “Fund-of-Funds” from September 1997 to May 2001. These are investment trusts that invest in closed-end funds and other investment trusts. There were 16 such funds in May 2001 from which 11 were chosen with histories of at least two years.  The information on the 11 funds in our study is presented in Table 1. As seen, some funds began in 1988 and others are quite new. Their sizes vary from 27.5 million GBP to 149.5 million GBP. Most of the funds have a global equity focus and all are traded on the London Stock Exchange. The NAV values of their holdings are primarily determined in the U.S. and U.K. since these funds invest in closed-end funds and investment trusts that are primarily traded on the London and New York Stock Exchanges.  The global equity benchmark used in the study is the MSCI All-Country World Index. This is a capitalization-weighted index of equity securities in 48 countries around the world.  The data consists of the weekly price and net asset value returns of the FOFs of the sample, as well as the weekly index returns of the 48 constituents of the MSCI All-Country World index (“benchmark”) and the returns on the world index itself. The source of the data is a proprietary database of closed-end funds and stock indexes maintained by City of London Quantitative Management.

 

An Empirical Study on Corporate Governance Mechanism and Its Antecedents: Evidence from Taiwanese Venture Capital Industry

Dr. Ching (Arthur) Lin, National Taipei University, Taiwan

Christine Chou, National Taipei University, Taiwan

 

ABSTRACT

Having faced several financial crises, including Asian financial crisis, financial crises of some public companies in Taiwan, and America’s corporate financial crises caused by the default on financial reporting, the corporate governance issue has become critical in supporting the development of a sound capital market. Besides, the principles of corporate governance provide international investors a framework for assessing their international investments.  On the other hand, as more and more venture capital firms emerge, venture capitalists start looking for foreign investment proposal.  Nevertheless, venture capital investment is not risk-free, and therefore, venture capitalists do need governance strategies to monitor their investee companies efficiently and effectively.  This paper will mainly focus on the antecedents of governance mechanism (including: I. Characteristics of Knowledge Management; II. Management Complexity; III.  Relative Bargaining Power; and IV. Ownership Structure) and governance strategies.  And this research wishes to provide some strategic implications for the venture capital practitioners. Taiwan is a country where the domestic market is relatively small and not particularly well endowed with a range of natural resources.  Over the past few years, Taiwan’s traditional industries have gradually moved their productions to mainland China and some Southeast Asian countries.  Having faced this change in Taiwan’s economic environment, the government has been implementing a number of policies aimed at enhancing high-tech development in Taiwan in order to avoid the issue of industry’s cavitization.  The development of venture capital industry was one of these notable policies and which requires a particular professional knowledge of venture capitalists to support those enterprises with highly growth potential. Venture capital was first introduced in Taiwan in 1983 and the first venture capital firm in Taiwan was Multiventure Investment Co. founded in November 1984 by Acer Inc.  Moreover, there was a successful 20 per cent tax incentive to stimulate investors to join the industry, initiated by Taiwan government to first time investors in venture capital funds.  Over the past ten years, the government has been making a determined effort to make sure of the continued growth and development of venture capital industry.  The venture capital industry has grown rapidly in recent years and by the end of March 2002, the aggregate number of existing VC funds in Taiwan comes to 179.  It is undoubtedly true that a high return was the major reason that many people joined the ‘investment frenzy’ in the late 1990s.  Despite this fact, given that the market is promising, if the Venture Capitalist (VC) picked the right start-up at an early stage, after it goes IPO, the investment returns/profits may be more than ten times higher than the original investment.  Based on the past history of Taiwan’s VC business, generally, the returns on venture capital investment during the first three years were relatively limited; the profits on investment started to grow significantly in the fourth year; and reached the highest in the tenth year. Over the past twenty years, the VC firms in Taiwan successfully played an important role to facilitate the rapid developments of high-tech industries in Taiwan.  Besides, they make capital funding accessible to SMEs and new enterprises and help manage the network of technology outsourcing. Compared with US VC companies, in Taiwan, there are no specific departments set up in VC companies for analyzing the industrial developing trends.  Moreover, Taiwan VC companies do not have the scholars in place, who would conduct technology focused business evaluations on behalf of venture capital investors.  Therefore, it is important that the VC managers in Taiwan adopt the concept of knowledge management in the process of information collection; seek help from different consulting institutions; and accumulate specific knowledge from personal working experience.  By doing so, they will be able to grasp the industrial trend correctly and timely, and which in turn contribute to the competitive advantages of VC companies.  Essentially, this is the future strategic direction, by which VC companies will be able to improve their performance and work toward their goals. Generally, some recent developments in the literature which studies the organizational operations in profit or nonprofit sectors, have been only focusing on the issue of organizational management, with the assumption that organizational goals are understood without explanation and are clarified without verification.  However, the de facto determination of organizational goals is principally based on ‘who has the power to control the organization’.  Scholars raised the agency theory to study the separation of ownership and managerial control in business and asserted that people with ownership of the company have the governance power, whereas managerial controllers only play the role of agent to owners.  Nevertheless, in the wake of corporate America’s financial crisis caused by the default on financial reporting, the fundamental issue is not rooted in the managerial level anymore, but instead, has upgraded to the level of ‘governance’ (Hsu, 2001).

 

Are Formalization and Human Asset Specificity Mutually Exclusive? –A Learning Bureaucracy Perspective

Dr. Ofer Meilich, California State University San Marcos, San Marcos, CA

 

ABSTRACT

 A learning bureaucracy rationale is employed to amend predictions implied by transaction cost economics (TCE) and the resource-based view of the firm (RBVF) related to the correspondence between task formalization and firm-specific human assets and their combined effect on organizational performance. Current TCE and RBVF view of formalization as antithetical to human asset specificity fits the coercive type of formalization. The learning bureaucracy rationale envisions two types of formalizations – coercive and enabling. It is argued that the formalization envisioned by TCE and RBVF is of the coercive type. Conversely, the enabling type enhances the importance and stock of tacit knowledge, contributes to organizational adaptability, and is inherently non-coercive. Therefore, enabling formalization is expected to co-occur with human asset specificity and to enhance the latter’s positive effect on performance.

 

Public Policy Effectiveness, Risk, and Integration in the Western Economies

Dr. Ioannis N. Kallianiotis, University of Scranton, Scranton, PA

 

ABSTRACT

 In our western economies, the increase in output and production will increase demand for labor and unemployment will decline. The same will happen with an expansionary monetary and fiscal policy. The risk is expected to have a positive (workers will supply more labor) or a negative (firms will demand less labor) effect on employment. The Maastricht treaty (completion of the single market on December 31, 1992) was an important landmark for the EU and its impact on unemployment is testing by using dummy variables. The same test can take place for the NAFTA agreement in the U.S.A. (1993). The use of a Phillips curve, combined with the equation of exchange and through an IS curve, gives the unemployment rate. A GARCH (p, q) process is used to determine the risk in our economy (real interest rate fluctuation). The results show that the EU country-members are completely different from each other and distinct from the U.S. market-oriented economy. Also, the EU has suffered many setbacks from the restrictions imposed by the strict Maastricht criteria. Then, the current European intermixture is not yet working and might cause more difficulties in the future, after its recent expansion (May 1, 2004), with all these tremendous structural, regulatory, costly, urbanized, and demographic changes.

 

The Self and Symbolic Consumption

Dr. Kritsadarat Wattanasuwan, Thammasat University, Bangkok, Thailand

 

ABSTRACT

 The paper explores theoretical concepts regarding the relationship between the self and consumption.  In consumer culture, consumption is central to the meaningful practice of our everyday life.  That is, we make our consumption choices not only from the products’ utilities but also from their symbolic meanings.  Basically, we employ consumption symbolically not only to create and sustain the self but also to locate us in society.  Nevertheless, from a critical point of view, striving to create the self through symbolic consumption may also enslave us in the illusive world of consumption.  Endeavouring to create the self in contemporary society is presumably inseparable from consumption ( ADDIN ENRfu Elliott 1997;  ADDIN ENRfu Gabriel and Lang 1995;  ADDIN ENRfu Gergen 1991;  ADDIN ENRfu White and Hellerich 1998).  Indeed, contemporary society is first and foremost a consumer culture – where our social life operates in the sphere of consumption ( ADDIN ENRfu Firat and Venkatesh 1994;  ADDIN ENRfu Giddens 1991;  ADDIN ENRfu Slater 1997).  That is, our “social arrangement in which the relation between lived culture and social resources, between meaningful ways of life and the symbolic and material resources on which they depend, is mediated through markets” Slater (1997, p.8).  Consumption is thus central to the meaningful practice of our everyday life.  Basically, we employ consumption not only to create and sustain the self but also to locate us in society ( ADDIN ENRfu Elliott 1994b, 1997;  ADDIN ENRfu Kleine and et al 1995). 

 

Technology Investment Mode of Innovative Technological Corporations: M & A Strategies Intended to Facilitate Innovation

Dr. Ling-Feng Hsieh, Chung Hua University, Hsinchu, Taiwan

Yao-Tsung Tsai, Chung Hua University & Nan Kai College, Taiwan

 

ABSTRACT

 Investments in new technologies play a crucial role in helping high tech companies to gain competitive advantages over their competitions. If a company can utilize Merger & Acquisition (M&A) method to acquire new technologies, then this company can quickly generate substantial values from its technology portfolio within the fast-paced and rapidly-changing business environment. Our research is focused on providing companies a set of guidelines for them to determine their future technology development planning and strategies based on the review of their past development and execution of corporate strategies for technology advancement. We also utilize the Game Theory to analyze the process of technological asset acquisition. We found that if both the seller and the buyer sides have similar corporate development backgrounds and have mutual understanding on the relevant financial information, the acquisition negotiation time will significantly shortened. This type of negotiations should then focus on the content of the technology and the relationship between the technology and its financial returns in order to maximize the benefits generated from the technology assets.

 

Managerial Thinking in the 21st Century

Dr. Kuo-Wei Lin, Hsuan Chuang University, Hsinchu, Taiwan

 

ABSTRACT

 With the accelerate development of science and technology in the field of computers and networks, from the end of the 20th century to the beginning of the 21st century, geographical boundaries are becoming less important .  New management theories that emerge in one corner of the world spread quickly to other areas of the world.  Events and theories may interact with and influence each other, strongly affecting management concepts and contributing to their development.  Therefore, this study discusses the reform and development of management thinking during the last 20 years.  At the advent beginning of the 20th century, the French mining engineer Fayol (1949) defined management activities from a functional perspective, in terms of planning, organizing, command, coordination and control

 

The Ethical Reasoning Abilities of Accounting Students

Dr. Chiulien Chuang Venezia, Southern Taiwan University of Technology, Tainan, Taiwan

 

ABSTRACT

 Western and Eastern Ethics theories share similarities and differences in points of view, yet pursuant to ethical relativism neither is absolutely "wrong" or "right". Kohlberg (1976) stated that Moral Judgment is universal. However, several research findings showed that cultural differences might affect moral judgment. This study uses Rest's DIT to compare accounting students to determine whether there is a difference in ethical reasoning between Taiwan and the U.S. This research finds that Taiwan accounting students possess higher levels of ethical reasoning than students in the U.S.  After Enron and WorldCom’s fraudulent accounting practices were publicized, the issue of ethics in the accounting profession came under review. The fallout from the events raised a topic of concern; should accounting programs in universities place greater emphasis on ethic courses to improve accounting students’ ethical reasoning abilities? The seriousness surrounding the ethics issue has prompted this study.  Accounting professionals have an obligation to present truthful financial reports to the public, their profession, and the organizations they serve. Auditors have a responsibility to evaluate and validate other accountants' reports. However, the accounting profession may face ethical dilemmas when it proceeds with these and other tasks.

 

The Announcement Effect on the Increase of Paid Up Capital on Stock Performance of Insurance Companies in Malaysia

Mohamad Abdul Hamid, University Kebangsaan Malaysia, Selangor Malaysia

Mohamad Ali Abdul Hamid, University Putra Malaysia, Selangor, Malaysia.

 

ABSTRACT

 The objective of the study is to examine the announcement effect on the increase of paid up capital from RM 50 million to RM 100 million on the stock performance of Insurance companies. The data were collected from the Investors' Digest comprising of daily share price data of thirteen insurance companies which are listed on the Kuala Lumpur Stock Exchange. The performance of the companies was measured by the share price return for a period of-10 days to + 1 0 days inclusive of the day of announcement. Event study methodology was used to compute abnormal returns based on the market model. Due to small sample size, non-parametric wilcoxon signed rank test was used to test the significant relationship between abnormal returns before and after the date of announcement. The results indicate that there was insignificant relationship or no difference on the abnormal returns. Generally, companies that already have paid up capital more than RM 100 million experienced more negative returns. Others that have less than RM 100 million experienced more positive returns to indicate that this announcement was good news because at the same time they could increase the level of competitiveness.

 

The Examination of Six Dimensions of Teacher Empowerment for Taiwanese Elementary School Teachers

Dr. Ping-Yu Wang, Kuang Wu Institute of Technology, Taiwan*

 

ABSTRACT

 

The purpose of this study was to investigate the perceptions of teacher empowerment in an open school setting, and the teacher abilities among teachers of elementary schools in Taiwan. Before the year 1990, bureaucracies, such as Taiwan elementary schools, were often shown as top-down management systems in which power was concentrated in the hands of a few leaders. A tight and mechanistic structure with centralized control and authority could reduce exploration and risk taking, yet cause work to be performed in a predictable manner. However, since many educators had received their educations from western countries, the idea of open education were invited to the Taiwanese educational reform in 1994. During the reform process, many struggles and barriers from a new school system have raised. The degree of teacher empowerment and its know-how were also discussed within the schools. Thus, this study would introduce the six dimensions of teacher empowerment of Short and Rinehart (1992). They are: decision-making, professional growth, status, self-efficacy, autonomy, and impact. Researcher found different situations in Taiwan elementary system.

 

How to Deal With Conflicts? The Effect of Consumers’ Subjective Time Pressure on Product Attitude Judgment and Choice

Dr. Chien-Huang Lin and Pei-Hsun Wu, National Central University, Taiwan

 

ABSTRACT

 Previous research has shown that under the choice set alternative conflict, time pressure will reduce the likelihood of choice deferral. However, other relevant research has pointed out that when consumers are facing the choice set alternative conflict, they will feel uncomfortable in making a choice. Time pressure will magnify this problem, and so consumers will opt for the no-choice option to reduce their discomfort. Therefore, time pressure will increase the likelihood of choice deferment. This research will construct the effect of time pressure on product attitude judgment and choice within three levels. These levels are: no time pressure, moderate time pressure, and high time pressure. Research has found that under the conflicts of product attributes or choice set alternatives, no time pressure and high time pressure will increase the proportion of consumer no-attitude on judgment task and no-choice option on choice task. Whilst under moderate time pressure, consumers are more likely to make a decision.

 

International Accounting Harmonization Impact Compared:  Illustration of United States and Japan Financial Statement Ratio Analysis

 Orapin Duangploy, Ph.D., CPA, University of Houston-Downtown, Houston, TX

Dahli Gray, DBA, CPA, CMA, Devry University, Timonium, MD

  

ABSTRACT

 Japan has recently revamped its financial accounting standards to be more in line with the international accounting standards.  This paper presents research results from comparing ratio analysis of Japan-based firms that must restate to United States (US) financial accounting standards due to being traded on US stock markets.  Eleven firms were identified with available data to calculate and compare ratios when firms’ financial statements were measured and reported both under Japan and US accounting standards.  The findings indicate that standards result in financial statements that are more similar (harmonized) than different.  While the difference in key financial ratios between US-GAAP and Japanese-GAAP is not significant, financial ratios prepared under U.S.-GAAP are found to be relatively more optimistic in profitability, more risky in terms of debt ratio, and less efficient in generating sales.  International capital markets have expanded globally so that investors must evaluate firms across borders and continents.

 

Factors that Influence the Piracy of DVD/VCD Motion Pictures

Chih-Chien Wang, Ph.D., National Taipei University, Taiwan

 

ABSTRACT

 The author conduct an empirical survey to examine the influences of economic and moral concerns on pirated motion picture DVD/VCD purchase decisions. The results indicate a positive effect in terms of cost benefits and negative effects in terms of perceived performance risks, ethical considerations, and social norms. A stronger perception of savings from pirated movies corresponded with greater purchase intent, as did a weaker perception of performance risk, unethical behavior, and an anti-piracy social norm. The findings indicate that cost benefit is an important motivating factor in pirated motion picture purchases, even when the price of a legitimate copy does not represent a heavy economic burden. The findings also support the need to address social norms and ethical considerations in any effort to stop piracy. Success may depend on reaching a social consensus and generating social pressure. The illegal duplication of commercial films—a common definition of piracy—cost the American movie industry US$3 billion in 2001 (Serafini, 2003). According to an estimate from the International Intellectual Property Alliance (IIPA)(2003), piracy in foreign countries incurred a US$1.3 billion loss to U.S. motion picture firms in 2002.

  

FDI Model in Emerging Economies:  Case of Suzuki Motor Corporation in India

Amar KJR Nayak, Xavier Institute of Management, Bhubaneswar. India.

 

ABSTRACT

 Despite a long history and experience of investment by several hundred foreign companies in India only a few companies have had consistency in their growth and profitability in India. Given the typical conditions of an industrially developing host for foreign direct investment like India, not many foreign companies have invested in India in a manner that will yield consistent growth and profitability. The direct investment pattern of Suzuki Motor Corporation is rare model that has benefited the host and helped the company to grow in size, profitability and global presence through its operation in India. This paper, after a systematic sampling of foreign companies in India during 1920s-1990s, selected the case of Suzuki Motors and studies the investment pattern of Suzuki Motor Corporation in India. It looks into the automobile industry scenario prior to Suzuki’s entry to India and analyses the nature, timing, and scope of investment adopted by Suzuki Motors. Based on the observations of the study, the paper suggests a suitable model of Foreign Direct Investment in emerging economies like India.  

 

Political & Economic Independence: The Kenya’s Case

Dr. Albert J. Milhomme, Texas State University, Austin, TX

 

ABSTRACT 

Former colonies have acceded to their political independence a long time ago. The question is: “What about their economic independence today?” This study focuses on Kenya, a former colony of Great Britain, forty years after gaining a political independence, obtained after a fierce struggle initiated by the Mau-Mau fighters: a divorce which was not exactly amicable! Has the United Kingdom kept a dominant position?  For some time now, many countries, former colonies of some colonial powers like Great Britain or Portugal have acceded to their political independence. The question is: “What about their economic independence?” To measure their economic independence one can look at their today international trade pattern, exports and imports. This study will focus on Kenya, a former colony of Great Britain and the study will try to reveal the achievement or non-achievement of this economic independence, forty years after the political independence. In 1963, Kenya as a colony of Great Britain exported 24%, of its exports to Great Britain and imported 41% of its imports from Great Britain. The United Kingdom had at that time a dominant position in Kenya. This position was mainly the result of a century of effort to create and protect trade, to pump in the finished product and pump out the desired raw material.

 

Performance Evaluation of Information System Outsourcing in Taiwan's Large Enterprises

 Chin-Chia Hsu, National Taiwan University & St. John’s & St. Mary’s Institute of Technology, Taiwan

Chih-Hung Wu, Takming College, Taiwan

Dr. Jovan Chia-Jung Hsu, Kun Shan University of Technology, Taiwan

  

ABSTRACT

 This work investigates types of Information System (IS) outsourcing as well as the constructs and practical indicators used to evaluate IS outsourcing performance. The differences among perceptions of the performance of IS outsourcing among various organizational characteristics are also considered. The survey results reveal that most (53.3%) large corporations develop and maintain their own IS; while the next largest group (27.9%) delegate initial IS development to software companies and take over IS development later, implying that the IS outsourcing market still has growth potential. With regard to performance evaluation, the majority (52.4%) of the large Taiwanese corporations do not perform evaluations on a regular basis while some other corporations (10.3%) evaluate performance every 6 to 12 months. Apparently, evaluating the performance of IS outsourcing it is not common practice among large corporations in Taiwan. Even companies that do evaluate performance tend to do so on an irregular basis, implying that large domestic corporations tend to evaluate IS outsourcing only when required. These results reveal that the outsourcing business of IS has room to expand.  Additionally, most IS presently used by large domestic companies has neither been totally developed by internal information departments nor entrusted wholly to external contractors.

 

William Morse Cole: Where got, Where gone?

Toni Smith, Ph.D., University of New Hampshire, Durham NH

 

Abstract

 William Morse Cole's writings were extensive; including a series of accounting textbooks and a number of journal articles.  Aside from his academic writings, Cole was a life-long educator, and an original member of the Harvard Business School faculty.  He also authored books outside of the business area and was active in his community.  Given this list of accomplishments, why is Cole's name not as well known as that of other, seemingly equally productive, accountants?  This paper considers the events that shaped the life of William Morse Cole and examines why his productivity has not endured.  Over the course of his life, William Morse Cole's writings covered a wide variety of topics.  From romance to religion to economics, he chose the written word as a means of expression.  It was the field of accounting, however, that provided his livelihood.  During his career in this field, Cole authored six accounting textbooks [Previts 1980] and contributed numerous articles to both business periodicals and academic journals.  (See Table 1 for a list of publications.)  One of these texts, Accounts, Their Construction and Interpretation [Cole 1908], presented the idea of the where got, where gone statement, a precursor to the modern statement of cash flows.  Aside from his writings, Cole was productive in many other ways.  He was an original and long-time member of the Harvard Business School faculty.  At his death, in fact, an incredible fifty-five years of college-level teaching could be attributed to him.  In addition, he also spent a decade teaching high school English and was active for many years in both civic and religious activities.

 

Exposing the Myth of “Re-Investment Economics Trigger” in Investment Decisions

Sergey Vasnetsov, Lehman Brothers Inc., NY, NY

 

ABSTRACT

 The interaction of capital investment and profits (causality and lead/lag factors) is the topic of major importance in fundamental and applied economics. A popular theory often used by industry consultants assumes the existence of a “re-investment economics trigger”, typically defined as 10% after-tax return on invested capital. According to this theory, upon reaching such point, a company will decide to invest capital in construction of new plants. If this is true, it is very important to predict such threshold point, as a turning point in the new investment cycle. Using a large diverse sample of companies over 17 years period (1985-2003), we found that there is no correlation between profitability and decisions of a large energy or petrochemical producer to invest in a new plant: the timing is much more liklely driven by specific corporate priorities, rather than a general “profit trigger” mechanism.  Investment and profits are two vitally important factors on both macro and micro level. Indeed, this profits and investments represent the arguable the most important results of operations at a given time period, while forecasted future profits and investments are fundamental drivers of forward-looking business strategy, both at micro- and macroeconomic level.  What drives a decision to build a large new production plant? Is there a common “rule of thumb” which would explain the recent history and predict the future developments? Finding such a rule would be quite valuable in forecasting the volatile commodity cycles for energy, chemicals, metals, paper products, as it is the large new capacity wave has typically played a major role in turning the global commodity cycle from its peak down towards the cyclical trough.

  

A Model to Price Corporate Bonds with Call Provision and Default Risk

Dr. David Wang, Hsuan Chuang University, Hsinchu, Taiwan

 

Abstract

 This paper presents a model for pricing callable bonds that are subject to default risk. The model incorporates three essential ingredients in the pricing of defaultable callable bonds: stochastic interest rate, default risk, and call provision. The stochastic interest rate is modeled as a square-root diffusion process. The default risk is modeled as a constant spread, with the magnitude of this spread impacting the probability of a Poisson process governing the arrival of the default event. The call provision is modeled as a constraint on the value of the bond in the finite difference scheme. This paper can be used both as a benchmark for models for pricing callable bonds that are subject to default risk and as a direction for future research.  The pricing of defaultable securities has been of interest in the academic and practitioner literature for some time. The standard theoretical paradigm for pricing defaultable securities is the contingent claims approach pioneered by Black and Scholes (1973). Much of the literature follows Merton (1974) by explicitly linking the risk of a firm’s default to the variability in the firm’s asset value. Although this line of research has proven very useful in addressing the qualitatively important aspects of pricing defaultable securities, it has been less successful in practical applications. The lack of success owes to the fact that firms’ capital structures are typically quite complex and priority rules are often violated.

 

SARS Devastation on Tourism: The Taiwan Case

Dr. Jennifer C. H. Min, Hsing-Wu College, Taiwan

 

Abstract

 The outbreak of the Severe Acute Respiratory Syndrome (SARS) dealt a sharp blow to the Taiwanese tourism industry, with the worst impact being suffered by the international tourism sector. The purpose of the study is to assess the impact of this mysterious illness in Taiwan. This research establishes a model for measuring the impact of SARS on Taiwan’s inbound demand during and immediately following the outbreak (March 2003 to July 2003). The forecasts, based on the seasonal autoregressive integrated moving average (SARIMA) model, are then compared with the actual volume of visitor arrivals to analyze the impact. The empirical results indicate that during these 5 affected months, Taiwan’s international tourism industry was hard hit by the disease. Based on the results, recommendations are offered for planning a recovery from catastrophic events, and suggestions are also made for possible future research needs.  Although the September 11 terrorist attacks and the Iraq War hit tourism worldwide, the Severe Acute Respiratory Syndrome (SARS) outbreak has struck an even more severe blow on many tourist destinations, particularly in the Asia-Pacific regions of China, Hong Kong, Taiwan, and Singapore. In fact, tourism growth had already decelerated due to the September 11 terror strikes and the accompanying sluggish global economy. Thus, the subsequent SARS outbreak further aggravated an already grim situation.  When SARS first appeared, it was an unknown and therefore unpredictable disease, and its outbreak caused great concern to the travel industry and to tourists in some countries and regions. Medical evidence indicates that SARS is a communicable respiratory disease that is transmitted through close personal contact with an infected patient.

 

Developing E-Business Systems Based on KM Process Perspective - A Case Study of Seven-Eleven Japan

 Dr. Ming-Ten Tsai , National Cheng Kung University, Taiwan, R.O.C

Ming-Chu Yu, National Kaohsiung University of Applied Sciences, Taiwan

Kuo-Wei Lee, Ph. D. Candidate, National Cheng Kung University, Taiwan, R.O.C

(Instructor, Diwan College of Management)

 

Abstract

 The focus of this paper is proposing a framework for developing e-Business systems based on knowledge management (KM) process perspective. In past, developing e-Business systems were often given priority according to technical criteria rather than business imperatives. “Technology for technology’s sake” problem tends to be a business phenomenon. The study tries to give some ideals for building e-Business systems based on KM process perspective and expects that the viewpoint will facilitate the company using IT to achieve the effectiveness of e-business systems development.  In today’s 21st century, e-Business has become an important means by which enterprises respond to competition. Hesterbrink (1999) pointed out that e-Business uses an innovation approach to utilize organizational resources and partner relationships in order to create strategic advantage. Moreover, Kalakota and Robinson (1995) consider e-Business to be the complex fusion of business processes, enterprise applications, and organizational structure necessary to create a high-performance model. According to the above discussion, e-Business is without a doubt the means to survival of enterprises in the future, and a necessary path for the enterprise to follow. As a result, e-Business has already become a major policy and program used by the world’s industrialized countries and enterprises in responding to this new economy. 

 

The Metacapitalism Quest

George Mickhail, University of Wollongong, Australia

Arsen Ostrovsky, Allianz Australia Insurance Limited, Australia

 

Abstract

 The purpose of accounting information is to provide decision makers with the means to evaluate the efficient allocation of resources. The accounting models of measurement are driven by a worldview that privileges the efficient allocation of resources, which is justified by the scientific claims of objectivity inherent in the theory of evolution. This had provided the defenders of ‘laissez-faire’ Capitalism with the intellectual foundations to oppose state interference with market forces, in their pursuit to justify the efficiency imperative.  The recent global economic upheaval of corporate collapses, like Enron’s, could not have been averted regardless of the dismal failure of its Accountants, Arthur Andersen - if MetaCapitalism had not been implemented to such an extent. MetaCapitalism promised untold wealth and unprecedented growth, and under that guise a predatory Darwinistic corporate strategy was implemented, whose underlying principles predated the tribulations of those collapses.  At its core, it advocates a radical or extreme outsourcing and downsizing of human capital, de-capitalisation of all non-core capital assets and the diminished role of the State in the global free market economy. It has the propensity to convey negative signals to the market as reflected in share price, contribute to an adverse profit performance, risk creating a state of ‘corporate anorexia,’ undermine the role of the individual in the workplace and completely err in its analysis of value added communities and B2B technology.

 

An Empirical Study of the Construction of Measuring Model for Organizational Innovation in Taiwanese High-tech Enterprises

Dr. Li-Min Chuang, Diwan University, Tainan, Taiwan, R.O.C.

 

ABSTRACT

 The objective of this research is to construct Taiwan’s high-tech industry organizational innovation dimensions and the associated evaluation index, in order to evaluate Taiwan’s current level of ability in this area, and provide guidelines for business. In addition, an organizational innovation model was constructed to act as a foundation for innovation theory. The research methods being employed included a review of literature in-depth interviews and a small group technique, These were used as a first step in constructing an organizational innovation measurement model. Before constructing the organizational innovation measurement model for the present study, a weighted measurement index was created through an analytic hierarchy process and multivariate analysis of variance and factor analysis, in order to confirm the index and organizational innovation cause and effect relationship. After finishing the construction of the organizational innovation model, the empirical study conclude that the most important dimension in measuring organizational innovation include: product innovation, process innovation and organizational structure & climate innovation.  The word “innovation” is frequently found in the literature, with technology improvements or breakthroughs being the main subject of investigation in related studies. “Innovation” and “technical innovation” were use to describe the same thing in most cases.

 

Attracting Foreign Direct Investment: The Potential Role of National Culture

Dr. Thomas C. Head, Roosevelt University, Chicago, IL

Dr. Peter F. Sorensen, Jr., Benedictine University, Lisle, IL

 

 ABSTRACT

 

Most nations, particularly those with undeveloped or developing economies, are actively seeking to understand what it takes to attract foreign direct investment. It is suggested that a nation’s cultural values may play a role in attracting such investment.  Specifically, nations with a low uncertainty avoidance, high power distance, collectivist, and masculine profile should prove most attractive for green field investment.  Acquisition based investments will prefer a low uncertainty avoidance, low power distance, individualist, and masculine cultural set.  It is not suggested that nations change their cultural values to attract foreign direct investment (although economic development will result in cultural change). Governments seeking foreign investment, however, could note the reasons investors might favor certain cultures and change their practices accordingly.  Between 1984 and 1998, worldwide foreign direct investment (FDI) increased by 1000 percent, while world trade grew at a rate of 91 percent (Hill, 2002).   Clearly commerce has truly become “global” with businesses abandoning the concept of one-nation citizenship by establishing operations all over the planet.    This phenomenon is showing no indication of diminishing, and in fact is being actively encouraged by most nations.  Charles Hill (2002) noted that the United Nations reports more than 100 nations made over 500 changes in FDI related legislation between 1991 and 1996, 95 percent of which involved liberalizing regulations in order to encourage foreign direct investment. 

 

 Exploring a Global Pattern of E-Business Activities and Strategic Orientation

Taewon Suh, Ph.D., Texas State University-San Marcos, San Marcos, Texas

 

ABSTRACT 

Using national firm level data across 56 countries, this study explored the relationship between e-business activities and strategic orientations. The findings of this study were threefold. First, customer orientation is associated with the level of e-customer service; second, given the control of innovation orientation, the general need for further investment on e-customer service drawn by customer orientation is attenuated; lastly, commercial concerns are more important for implementing e-commerce.  For companies to expand their relationship with customers, suppliers, and other stakeholders, the Web proffers some useful opportunities. E-business, however, requires more than offering a Web site, even though many companies naively hope that just being online would be enough to generate interest and improve business. Developing an e-business calls for a host of advances such as new business models, implementing technology that can sustain the related endeavor, partnering or making alliances, understanding new laws, and so on, although much of the current expansion in commercial use of the Internet is driven by marketing initiatives providing products and product information to potential customers (Quelch and Klein, 1996). In this situation, the academic endeavor to find the link between firm’s strategies and e-business activities must be important. Which orientation in strategy will bring more active implementation of e-business? 

 

The Next Stage of Psychographic Segmentation: Usage of Enneagram

Rajeev Kamineni, University of Western Sydney, Australia

 

ABSTRACT

 Segmentation and positioning constitute the crux of marketing strategy. Over the past two decades, lifestyle and psychographics have been increasingly used as a basis for market segmentation. This paper illustrates how the ancient and mystical technique of the Enneagram can be effectively used as a base for psychographic segmentation. With the Enneagram finding ever-increasing applications in strategic management and human resource development, it is only fitting that scholars in marketing harness the diagnostic and predictive power of the Enneagram. However, adoption of the Enneagram for marketing purposes will require further conceptual development and empirical analysis.  The Enneagram is an ancient technique of personality classification that dates back at least two thousand five hundred years. Practitioners of the Enneagram (pronounced any-a-gram) regard it as a vital link between the psyche and the spirit. Figuratively, the Enneagram is a circle enclosing nine equidistant points connected by nine intersecting lines (see Figure 1). The nine points represent the different ways in which the nine underlying personalities constituting the Enneagram perceive and defend their "mental models" or realities. Peter Senge (1990) observes that the mental model each of us possesses determines not only how we make sense of the world, but also how we take action.

 

A Comprehensive Formal Ranking of the Popularity of Financial Ratios in Multivariate Modeling of Corporate Collapse

Ghassan Hossari, Lecturer, Deakin University & Ph.D., Candidate, AGSE, Swinburne University Melbourne, Melbourne, Australia

Sheikh Rahman, AGSE, Swinburne University, Melbourne, Australia

 

ABSTRACT

 This paper provides a formal ranking of the popularity of financial ratios in modeling corporate collapse. The analysis identified 48 financial ratios and ranked them according to their usefulness as portrayed in 53 studies that have utilized such ratios in modeling corporate collapse. The methodologies adopted in those studies are predominantly of the “multivariate” type. The 53 studies extend from 1966 to 2002, inclusive.  A resounding, recent reminder that not only small and unheard of companies collapse! It may be argued that some companies voluntarily wind-up and this may be true. However, there are surely those that involuntarily find themselves on the road to collapse; for such companies their collapse will certainly have unpleasant consequences that affect a large number of stakeholders.  Although the number of companies that collapse may seem to be relatively small (1) when compared to the number of companies that continues to be financially viable, this does not necessarily underestimate the seriousness of the problem. After all, the fact that only a small percentage of babies suffer from cot death (2) has not precluded researchers from determining its causes. Likewise, the seemingly small percentage of companies that collapse has not deterred researchers from developing models that signal corporate collapse before it happens. As a matter of fact, refereed empirical studies can be traced as far back as Winakor, (1929 and extend to the immediate present with Kealhofer (2003), for example.

 

A Survey of Issues and Recent Trends in Unicast Congestion Control for the Internet

S. Ravi Jagannathan and Dr. Kenan M.  Matawie, University of Western Sydney, Australia

 

ABSTRACT

 Everybody is familiar with the terms ‘Internet’ and PCs (a.k.a. ‘end systems’). When one end system wishes to communicate with another, across the Internet, the conversation takes place via communications links joined by a number of routers (switching devices).  It is important for the sending end system to not overwhelm the receiving system, hence to contain its transmission rate accordingly. This is typically called ‘Flow Control’. A seemingly related problem is for the sender to not overwhelm the network itself (not just the receiver). This phenomenon is usually called ‘congestion’.  In this paper we examine a number of approaches to managing Internet congestion. This collection of results is typically not available anywhere else in the literature. We also introduce TCP Sierra & RAB Routers, which are in the process of development as novel congestion management algorithms. These concepts are explicitly aimed at optimizing multimedia conversations across the Internet, and will be published elsewhere. The objective of this survey paper is for a lay reader to quickly get a feel for the sorts of problem that one faces when dealing with congestion, and be then able to contribute usefully to the development of literature in this area.

 

Outsourcing Versus in-House Provision of Sleep Diagnostic Services

Dr. Scott M. Janssens, Heywood Hospital, Gardner, MA

Dr. Saeed Mohaghegh, Assumption College, Worcester, MA

 

ABSTRACT

 This paper proposes that providing sleep diagnostic services using internal resources may be more profitable for some hospitals than outsourcing. In addition, the in-house provision of such services may give the hospitals more control over the quality of care for their patients and enable them to gain competitive advantage.  Other factors such as the availability of appropriate space within the existing health care facilities, noise, skills of personnel, startup costs, economy of scale, and economy of scope may influence the management decision. A local community hospital was selected, data was collected, and statistical and financial analyses were performed to test this proposal.  The results showed that in-house provision of sleep diagnostic services is more profitable for small community hospitals in the long-run than outsourcing such services. Medical studies indicate that in the general population four percent of males and two percent of females have obstructive sleep apnea, the partial or complete obstruction of the upper airway during sleep (Attarian and Sabri, 2002).  Early detection and treatment of this serious and dangerous disorder is vital. Recent research shows that untreated sleep apnea is often the cause of snoring, headaches, high blood pressure, heart attack, stroke, hypertension, depression, behavioral problems and poor academic performance particularly in children, daytime sleepiness, driving accidents, and mortality (Silverberg et al., 2002; Nelson, 2002; and Malhotra and White, 2002).  The emergence of several outsourcers (i.e. service contractors) in U.S., Europe, and Japan to provide sleep diagnostic services is indicative of the increased demand for diagnosis and treatment of this disorder and the high profitability associated with the provision of such services. These service contractors have experienced significant growth of the sales, net income and overall profit. 

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