The Journal of American Academy of Business, Cambridge is indexed in the CABELL'S and ULRICH'S DIRECTORIES of Refereed Publications.   The primary goal of the journal will be to provide opportunities for business related academicians and professionals from various business related fields in a global realm to publish their paper in one source. The Journal of American Academy of Business, Cambridge will bring together academicians and professionals from all areas related business fields and related fields to interact with members inside and outside their own particular disciplines. The journal will provide opportunities for publishing researcher's paper as well as providing opportunities to view other's work.  All submissions are subject to a two person blind peer review process.

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The Myth of Inter-Period Allocation of Deferred Taxes:  Industry–Based Analyses

Dr. Ron Colley, University of West Georgia, Carrollton, GA

Dr. Joseph Rue and Dr. Ara Volkan, Florida Gulf Coast University, Fort Myers, FL

ABSTRACT

The behavior of deferred tax balances in mining and real estate industries is analyzed and the accounting theory and procedures required by the FASB are examined in the context of the unit problem. The unit problem involves the selection of the appropriate perspective (either individual or aggregate) for applying measurement and recognition conventions to phenomena of interest. From an individual event perspective, the FASB's conclusions in Standard No. 109 – Accounting for Deferred Taxes (S109) regarding liability recognition are inconsistent with the definition of liabilities found in the Statement of Financial Accounting Concepts No. 6. In addition, the use of inconsistent perspectives by S109 creates disagreements with the FASB’s position, where both the individual and aggregate perspectives are used simultaneously as the basis of the FASB's decisions. The study argues that the income tax accounting issue should be viewed from an aggregate perspective and concludes that the flow-through method of accounting for income taxes should be adopted. The impact of eliminating deferred taxes and adjusting the liability and stockholders equity balances on the debt-to-equity (DTE) ratio is computed for the mining and real estate industries in the COMPUSTAT database (1995 – 2004). In addition, the ratio of the net deferred tax balance to total assets is computed. In the mining industry, for those companies persisting over the 10-year period, the ratio increases. Statistical results show that the decreases in the DTE ratio are significant in each industry and each year.

Is South Carolina’s Integrated System of Personal Property Tax and Motor Vehicle Registration and Licensing a Burden on Interstate Commerce Such that it Violates the Dormant Commerce Clause of the U.S. Constitution?

Brad R. Johnson, J.D., Ph.D., Francis Marion University, Florence, S.C.

ABSTRACT/INTRODUCTION

By means of a case study approach, this article argues that, as to South Carolina (S.C.) nonresidents, state and local  administration and enforcement of S.C.’s decentralized and integrated system of (A) personal property taxation under Chapter 37 of Title 12 of the S.C. Code of Laws and (B) automobile registration and licensing under Chapter 3 of Title 56 of the S.C. Code of Laws burdens interstate commerce in terms of (1) the incoming business-related services of S.C. nonresidents and (2) the non-business personal travel of S.C. nonresidents. Specifically, this article argues that in the administration and enforcement of S.C. Code Ann. §§ 56-3-150(B) & -160 and S.C. Code Ann. §§ 12-37-2610 & -2630 against S.C. nonresidents, the policies, practices and procedures of S.C. counties violate the Dormant Commerce Clause of the U.S. Constitution, which may thereby subject the county and its employees to actual and/or punitive damages under the United States Constitution, particularly pursuant to the provisions of Title 42 of the United States Code, Section 1983. Within the context of this article’s case study, such liability is found in the deprivation of a S.C. nonresident’s fundamental (constitutional) personal right (a) to travel out-of-state (i.e., in S.C.) and (b) to earn a living by exporting his services to S.C. Specifically, under the facts of the case study, this article clearly shows that the interaction among certain provisions dealing with (A) the personal property taxation of automobiles (S.C. Code Ann. §§ 12-37-2610 and 12-37-2630) and (B) automobile registration and licensing (S.C. Code Ann. §§ 56-3-150(B) and 56-3-160) effectuates a substantial burdening of interstate commerce, where such provisions are determined to be unconstitutional, in that the benefits of these state provisions cannot be viewed as outweighing the burden on interstate commerce. Further, the county and its employees may be liable for actual and/or punitive damages if qualified immunity is unavailable because a nonresident’s fundamental (constitutional) personal right to travel out-of-state and earn a living is well-settled.

A Descriptive Overview of Islamic Taxation

Ali Reza Jalili, Ph.D., Stetson School of Business and Economics, Mercer University, Atlanta, GA

INTRODUCTION

Currently, there are fifty-seven Muslim countries in the world covering one-fifth of the world’s landmass, including some vital strategic areas, and few other emerging Muslim countries are on the horizon.  Additionally, Islam is prominent in several other countries and Muslims constitute a sizeable minority in yet other societies.  With population of about 1.3 billion, Muslims account for one-fifth of the world’s inhabitants.  Given the prevalent high birthrate in Islamic societies, in twenty years, one-third of the world’s population is expected to be Muslim.  Muslim countries today control more than seventy percent of the world’s energy and account for 40% of the global exports of raw materials.  Their economic and geopolitical relevance, both as suppliers of energy and raw materials as well as vast rich markets for various goods and services is increasing rapidly.  The Western interest in the Muslim world, thus, is not a coincidence.  Since the  Middle-Ages Muslims and Islamic countries have occupied an important position for the Western governments and societies.  The course of history and economic development in the twentieth century has substantially intensified this prominence.  The history, politics, economics, sociology, behavioral patterns, and other social aspects of Islam and Muslim communities have been subject of continuous interest and investigation in the West.  Parallel to this interest, during the twentieth century, there have been indigenous attempts to revisit and reinterpret Islamic Thoughts and revive Islamic practices in the Muslim societies.  In the recent past, this movement has acquired an appreciable momentum as shown through political as well as ideological movements.  Siddiqi (1981) lists 700 articles on Islamic Economics alone, covering up to 1975

Exploring a Taxonomy of Global Leadership Competencies and Meta-competencies

Stewart L. Tubbs, Ph.D. and Eric Schulz, Ph.D., Eastern Michigan University

ABSTRACT

There is a substantial body of research evidence regarding the importance of leadership development to organizational success, Charan, Drotter and Noel (2001), Fullmer and Goldsmith (2001), McCall and Hollenbeck (2002), McCauley, Moxley and Van Velsor (1998), Viceri and Fulmer (1997, Whetton and Cameron (2005). There is no more important task with regard to leadership development than identifying the competencies and meta-competencies that comprise leadership. However, to date, there has not been agreement regarding just what are the Global Leadership Competencies that should be taught and learned. In this paper leadership is defined as, “Influencing others to accomplish organizational goals,” (Tubbs, 2005). Based on the model presented in this paper, the rationale is advanced that some aspects of leadership are more or less fixed at a young age while others are able to be developed even well into adult life (i.e., the Global Leadership Competencies). This paper describes the model and identifies fifty Global Leadership Competencies in the form of a taxonomy of Global Leadership Competencies and Meta-competencies Most importantly, leadership development efforts must be targeted on the outermost circle in the model..

The Web of Deception Money Laundering and Transnational Crime: “A Double Edge Sword of Power & Illusion”

Dr. Kathie Cooper and Dr. Hemant Deo, University of Wollongong, Australia

ABSTRACT

Money laundering has been the focus of perpetrators for both the regulators and accountants in the 20^th century.  The methods adopted by the perpetuators of money laundering have become more sophisticated so as to provide a web of deception or illusion so that the regulatory authorities are confused and therefore, the paper trail goes undetected.  The Foucauldian framework (Foucault, 1977; Foucault, 1984) employed in this paper addresses that deficiency by making explicit the power and knowledge disciplinary relationships inherent in the dynamics of any financial institution and the need to under-pin the concept of money laundering through such a complex relationship.  Money laundering has been around for as long as law breakers have needed to convert their ill-gotten gains to legitimate currency although the term did not gain official recognition until the Watergate scandal in 1972.  Perhaps it is folk lore, but popular opinion (see for example, Wells, 2003; Richards, 1999) is that the term originated with the efforts of organised crime to “wash” dirty money through the acquisition of a cash-intensive business, specifically, a laundromat, so that the dirty money could be assimilated with the legitimate proceeds of business.  Arguably, the need to legitimise illicit funds gained momentum after Al Capone was convicted for tax evasion in 1931.  The days when money laundering was the province of organised crime, if it ever was, is well and truly over.  Scandals such as BCCI and Enron demonstrate all too clearly that money laundering has become a pass time of the rich, famous and outwardly upright pillars of the community including executives of prominent companies and banks, accountants and lawyers.  As Mitchell et al (1998) have noted “money laundering is increasingly undertaken by organised groups, corporations and elite occupations”.  Money laundering has been facilitated by technological innovations and contemporary business practices including shell and shelf or nominee corporations, bank confidentiality and secrecy policies, guarantee and buy back arrangements and back-to-back financing arrangements as well as bribery, corruption, witness intimidation and insider information.  The paper applies a theoretical Foucauldian framework to the issue of money laundering to better understand the power and knowledge interplays within such a complex process. 

Teaching the Job Stress Audit to Business School Students: Causes, Measurement, Reduction

Dr. Gene Milbourn, Jr. University of Baltimore, Maryland

ABSTRACT

This paper will provide an outline on structuring a consulting project for business school students on the topic of employee stress measurement and reduction.  It will suggest a step-by-step program to lower high stress levels in an organization.  Specifically, the paper will assist students in (1) selecting an appropriate stress measurement instrument; (2) identifying the organizational causes of the two major types of job stress—job ambiguity and job conflict; and (3) using the Rizzo, House, and Lirtzman stress model, the paper will formulate a practical approach to reducing high levels of job stress.  The work of Harvard’s Herbert Benson is introduced as a remedy to the Type A Personality.  While no intended to a literature review, some research is reviewed as appropriate for pedagogical purposes.  We all know people employed by small and large organizations who have the habit of pitting themselves against the clock.  These people are usually ambitious, competitive, aggressive, and highly success-oriented. They will likely be individ­uals who try to control as many situations as possible and may succeed in all endeavors--even in a casual game of cards. Such people believe they can control almost everything and make anything happen that they wish. When problems or threats to their control emerge, they respond with an even greater intensity and often be­come more aggressive, frustrated, and stressed when their efforts to prevail fail. Even when they succeed, wish they would have accomplished something faster or more effectively.

A Legal Perspective on Outsourcing and Offshoring

Dr. Sam Ramanujan and Sandhya Jane, Central Missouri State University, MO

ABSTRACT

This article identifies the legal issues and controls used for contracting a project and its impact on conducting global business. It describes the wide variety of legal risks and its implications on different types of contract. Managers may use this paper as a framework for evaluating an IT outsourcing/ offshoring decision.  Outsourcing and offshoring are complex business strategies that are meant for enhancing company’s profitability by improving operating efficiency and allowing management to focus on core business activities (Slaughter and Soon 1996). Successful outsourcing results when the objectives and driving force are clearly spelled out (Goo, Kishore and Rao, 2000). Companies need to comprehend some of the major issues such as compliance risks, potential legal and financial problems that can arise due to lack of data security, privacy, intellectual property rights and executive accountability.   In this paper we will study and analyze the legal issues in Outsourcing such as Information Security, Privacy, Intellectual Property, Copyrights, Patent, Trade Secret and other regulatory compliance and their implication to business. To study these legal issues, we have categorized outsourcing and offshoring into four types based on nature of contract: 1. Outsourcing: It is defined as a company contracting in part or a whole project to a vendor based in same country. Example, Company A (a manufacturing company) is contracting its information systems project to Company B (a software development company), in USA. 2. Offshoring: It is defined as setting up company’s existing business function or division in a foreign country. Example, Company B decides setting up its own software development division in foreign country to take an advantage of a competitive market. 3. Outsource-offshoring: This happens when the outsourcing vendor go offshore for contracting part or whole project to third party vendor situated in another country. 4. Offshore-outsourcing: It can be defined as company contract its part or whole project to a vendor based in another country.

Strategic Offshoring from a Decomposed COO’s Perspective:  A Cross-Regional Study of Four Product Categories

Kien-Quoc Van Pham, Pacific Lutheran University, Tacoma, WA

ABSTRACT

Decomposing country-of-origin (COO) effects for four dissimilar product exemplars originating from 18 countries (6 from each Triad area) elicited statistically significant different consumer preferences for specific country (ies) of origin for hybrid products. These COO dimensional preference findings from a survey of 170 non-traditional students and management seminar attendees representing 30 countries reaffirm that management needs to also consider and monitor COO consumer preferences and country stereotyping effects (CSE) beyond the cost benefits normally associated with strategic offshoring and global outsourcing/supply chain management practices. Country of assembly (COA)/country of manufacture (COM) emerged as the most important COO dimension overall. Global benchmark countries are identified for each product class operational dimension, and optimal pairings of regional trade areas in terms of COO dimensional preferences are suggested for global consumer market segmentation.  While country of origin (COO), “Product Country Image” potential effects (as a single cue or as multiple cues) on consumer product selection, imputed quality perception and purchase intention have been extensively documented, the proliferation of hybrid products with multiple country affiliations (country of assembly-COA or country of manufacture-COM, country of design-COD, country of brand-COB, and country of parts/components-COP/COC) and corporate global offshoring, outsourcing upward trends warrant sustained investigation of consumer COO country-specific product dimensional preferences. Recent publications have focused on these multi-dimensional aspects of COO (Chao, 1993, 2001; Tse & Lee, 1993; Li et al, 2000; Insch & McBride, 1998, 2004; Chao et al, 2005), especially on branding (COB) with national, bi-national studies for single product or a limited array of products. However, few have addressed this phenomenon across multiple countries or from a regional level (Papadopoulos & Heslop, 2002; Balestrini et al, 2003; Cervino et al, 2005).

Alternative Options for Business Decisions Using Nearly Optimal Programming

Dr. Alan Olinsky and Dr. John Quinn, Bryant University, Smithfield, RI

ABSTRACT

Linear Programming is a quantitative method for finding the optimal solution when there are limitations on resources. This technique is used extensively in a variety of areas, including the field of business decision making. One shortcoming of mathematical modeling in general and linear programming in particular, is that these models can only represent approximations of the actual constraints in the system.  Therefore, the optimal solution might not be the best course of action for a company, since there might be unquantifiable restrictions that could not be represented in the model.  This paper illustrates a technique called Nearly Optimal Programming that generates multiple solutions, very close to the optimal objective value. This allows the decision maker to choose from a variety of solutions, or even to combine different solutions to produce another solution with desired characteristics. The example is for a multinational company taken from the literature.  Linear Programming (LP) is one of the most popular methods for quantitative analysis and is used extensively in business studies. For example, “LP has been used to solve optimization problems in industries as diverse as banking, education, forestry, petroleum, and trucking. In a survey of Fortune 500 firms, 85% of the respondents said they had used linear programming.” (Winston 2004, pg. 49). The principal goal of a LP model is to find the best decision for a given problem based on the availability of limited resources, as modeled with a linear objective function and a set of linear constraint inequalities. One form of the standard LP, which will be used for this paper, is shown below.

E-Mails in the Workplace: The Electronic Equivalent of ‘DNA’ Evidence

Dr. Nadeem M. Firoz, Montclair State University, Upper Montclair, NJ

Dr. Ramin Taghi, William Paterson University, NJ

Jitka Souckova, Montclair State University, Upper Montclair, NJ

ABSTRACT

Recent technological advances have dramatically transformed the working environment. Written, unlike the telephone communication in the past, is now documentary evidence of communications. With growing use of email the battle of security and privacy has been heating up. Companies are under increasing pressure to monitor employees’ electronic activities and workers should assume that their every key stroke is being watched.  The extensive use of the Internet has changed the way business is done in the typical workplace. Written message to almost anyone in the world is being delivered nearly instantly through the e-mail (Postini 2004).  Information for a daily job tasks can be retrieved in seconds from the Internet. While these advances have aided productivity and business growth, they have also created new concerns over corporate security efforts and the privacy rights of employees. Workplace privacy is no longer just about the results of drug tests or question about sexual orientation, though they are still areas of concern.  habits and Internet surfing now dominate the privacy issue.   Information Technology in today’s business is an integral part of the infrastructure. Employees in every department require a computer terminal and Internet connection in order to do their job effectively. Even the employees who perform their jobs in the ‘field’ are required to carry a laptop, PDA, or other device that can electronically transmit information. This access to the world has introduced a number of new security related issues to the work force. One of the issues involves “the company’s right to maintain control over IT assets which provide employees with an easy way to silently perform personal activities. Employee monitoring is a very controversial topic; ranging from monitoring web access and keystrokes to installing biometric devices to monitor physical location and door entries.”(Bockman, 2004) Based on the large number of monitoring tools on the market, employers are certainly monitoring employee Internet activity.

Does Price Limit Spill the Stock Price Volatility of the Companies with Different Fundamental Value?

Chih-Hsiang Chang, National University of Kaohsiung, Kaohsiung, Taiwan

ABSTRACT

Some stock markets have employed a number of circuit breakers to avoid non-rational overreaction and price limit is one of them. While price limit is widely accepted benchmarks for the prevention of market crash, the question of whether price limit reduces stock price volatility has long attracted research interest. The purpose of this study is to test volatility spillover hypothesis by examining Taiwan Stock Exchange price limit system. The main difference of this paper with the previous literatures is that we explore the impacts of fundamental value on the price limit performance. The companies with distinct fundamental value react differently to the shock of good news and bad news because the fundamental value is a determinant of stock price determination. Therefore, this paper will analyze the effectiveness of price limit on the prevention of volatility spillover for the companies with different fundamental value. Empirical results indicate that volatility spillover is more obviously after limits were hit for the companies with better fundamental value than those with worse fundamental value.  In order to prevent irrational overreaction on the part of investors, many stock markets have adopted price limit as an instrument to stabilize trading activities.  However, views on price limit are quite diverse, whether in academia or in industry.  Studies that support price limit point out that price limit can decrease stock price volatility and prevent overreactions and would not impede trading activity (Brennan, 1986; Lee and Kim, 1995; Westerhoff, 2003).  Those in the opposing camp think that price limit increases stock price volatility; lowers market liquidity and realization; and obstructs price equilibrium (Lehmann, 1989; Coursey and Dyl, 1990; Lee, Ready, and Seguin, 1994; Hung, Fu, and Ke, 2001; Kuo, Hsu, and Chiang, 2004; Diacogiannis, Patsalis, Tsangarakis, and Tsiritakis, 2005).

Testing Wagner’s Law Using Bounds Test and a New Granger Non-Causality Test: Evidence for Taiwan

Dr. Chiung-Ju Huang, Feng Chia University, Taichung, Taiwan

ABSTRACT

This paper examines government expenditures in Taiwan over the fiscal years 1966 through 2002, in order to test whether follow Wagner’s Law.  Due to having a small sample size, the use of more traditional cointegration techniques may be unreliable.  Therefore, the Pesaran et al.’s (2001) bounds test for cointegrating relationships is adopted.  The results of the Pesaran bounds test indicate that there a cointegrating relationship between government expenditures and output does not exist.  Furthermore, results from the new Granger non-causality testing procedure developed by Toda and Yamamoto (1995) show that there is no causal relationship between government expenditures and output.  Therefore, our empirical results do not support Wagner’s Law for Taiwan.  The source of public expenditure growth has been an important issue in economic literature.  A number of attempts have been made to identify the principle causes of growth in the public sector.  Wagner’s Law is one of these theories that emphasize economic growth as the fundamental determinant of public sector growth. Therefore, several studies have been devoted to test the validity of Wagner’s Law, which postulates the tendency that government activities increase with economic expansion.  Empirical tests of this law on various countries have yielded significantly different results.  Although several multi-country studies conducted by Wagner and Weber (1977), Abisadeh and Gray (1985), and Chang (2002) conclude that most countries show trends supporting Wagner’s Law; studies conducted by Ram (1986), Afxentiou and Serletis (1996), and Ansari et al. (1997) find no strong evidence supporting Wagner’s Law.  However, the validity of Wagner’s Law is further supported by country-specific studies, such as studies conducted for the United States by Ganti and Kalluri (1979), Yousefi and Abizadeh (1992), and Islam (2001), studies on Pakistan by Khan (1990), studies on the U.K. by Gyles (1990), and studies on Japan by Nomura (1995). However, there is still dissent among recent research. For instance, studies on Mexico conducted by Mann (1980), Nagarajan and Spears (1990), and Lin (1995), a study on Greece by conducted by Chletsos and Kollias (1997), and a study on Taiwan conducted by Pluta (1979) have all obtained mixed results concerning the validity of Wagner’s Law.  There are even studies that simply do not support the Wagner’s Law. For example, studies for Canada conducted by Singh and Sahni (1984), and Afxentiou and Serletis (1991), a study for Sweden conducted by Henrekson (1993), and a study for Kuwait conducted by Burney (2002). In general, the studies do not support the Wagner’s Law for under-developed or developed countries.

A Comprehensive Study on Information Asymmetry Phenomenon of Agency Relationship in the Banking Industry

Gow-Liang Huang, National Kaohsiung First University of Science and Technology, Taiwan

Hsiu-Chen Chang, Doctoral student, National Kaohsiung First University of Science and Technology & Yu Da College of Business, Taiwan

Chang-Hsi Yu, Yu Da College of Business, Taiwan

ABSTRACT

The objective of this study is to investigate the information asymmetry phenomenon of agency relationship in the banking industry. Information asymmetry phenomenon is one of the most important factors of agency cost, and it should make an effort to eliminate. Although information asymmetry phenomenon has been popular in banking industry, however, most studies only focus on deposits market or loans market separately. The present authors argue that the banking industry should be looked as a whole market that having a linkage relationship. It should be apply systematic standpoint integrative to explore the problems of information asymmetry gap. The present study therefore proposes a conceptual framework of bilateral agency relationship model for the banking industry. It includes five information asymmetry gaps among the bilateral agency relationship. The implications of these findings are discussed in the paper.

Using Importance-Performance Analysis In Evaluating Taiwan Medium And Long Distance National Highway Passenger Transportation Service Quality

Yuan-Chih Huang and Dr. Chih-Hung Wu, Takming College, Taiwan

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

ABSTRACT

This research discusses relationship among customers’ characteristics, customers’ travelling characteristics and service quality; Service quality includes two levels, first, importance degree of service quality, namely customers’ expected service quality; second, satisfaction degree of service quality, namely customers’ perceived service quality;  This research used purposive sampling, sent out 1980 questionnaires, collected 1950 questionnaires, return ratio of 98.4%,research results showed cross table analysis of customers’ characteristics(sex, age, profession, education attainment, income) and customers’ travelling characteristics (start to end point, choice of passenger transportation company, travel purpose, monthly ride frequency, trip timetable selection),  test, majority (22 groups) showed observable relationship. Lastly, calculating the 24 questions mean value of expected service quality and perceived service quality, based on Importance-Performance Analysis, emergency exit facilities, seat comfortableness, vehicle interior cleanliness, traveling route, traveling safety, traveling steadiness, embarkation and disembarkation convenience, etc. Seven items, belonging to quadrant 1, (maintenance reinforcement area), vehicle interior noise pollution, vehicle washroom cleanliness, station waiting lounge cleanliness, ticket price structure, driver’s traveling habits, etc. five items, belonging to quadrant 2(improvement reinforcement area), air-conditioning effect, vehicle interior illumination, ticket purchase convenience, etc. three items, belonging to quadrant 4 (over-emphasized area), other remaining questions total 9 items, belonging to quadrant 3(secondary improvement area); based on analysis result, suggesting companies involved to separately select suitable service strategy, and consider company’s resources used on quadrant 4 to be moved to quadrant 2.

Evaluating Ethical Decision–Making of Individual Employees in Organizations—An Integration Framework

Miao-Ling Fang, Southern Taiwan of Technology University, Taiwan

ABSTRACT

Employees face an array of moral issues in their everyday decision-making. This paper is an attempt to better understand the ethical considerations of employees when they face with ethical dilemmas. A comprehensive review of the literature on ethical decision-making models in the workplace is presented. This article proposes an integration model containing a new set of variables and offers 17 research propositions. This study examines the influence of independent variables on the components of ethical decision making: cognitions (perceived ethical problem), moral evaluations, determination(intentions), and actions(ethical or unethical behavior). The independent variables include individual factors, situational factors, and characteristics of the moral issue itself.  The relationship between independent variables and dependent variables is mediated by emotion. The moderating variable includes three types of relationship (instrumental ties, mixed ties, and rival ties).   The process of an individual decision-making apparently is a management issue worth further examination. Every profession processes its own codes of ethics.  Ethical conflicts are inescapable today as human interactions become increasingly frequent and complex.  How to deal with the conflict and how to decide on a solution which doesn’t discriminate against any party involved are just two examples of ethical issues that occur frequently in the workplace.  Ethical decision-making refers to a process in which individuals can freely make a decision based on the evaluation of the interests of all parties when facing ethical dilemmas. 

Predicting Turnover Intentions: The Case of Malaysian Government Doctors

Dr. Sarminah Samad, Universiti Teknologi Mara, Malaysia

Abstract

The purpose of this study was to determine the relationship of organizational commitment and job satisfaction with turnover intentions. Consequently the study examined the influence of organizational commitment and job satisfaction on turnover intentions. Based on organizational commitment postulated by Meyer and Allen (1991), theory of job satisfaction by Hezberg (1973) and turnover intentions by Bluedorn (1982) a study was conducted among 300 government doctors working in government hospitals in Malaysia. The results hypothesized that organizational commitment and job satisfaction were negatively related to turnover intentions. The study also revealed that organizational commitment and job satisfaction made a negative influence on doctors’ turnover intentions. Among all the facets of independent variables, affective commitment appeared to be the most significant predictor to turnover intentions. Based on the implication of the research findings, several suggestions are put forward.

International Strategies and Knowledge Transfer  Experiences of MNCs’ Taiwanese Subsidiaries

Yi Ming Tseng, Tamkang University, Taipei, Taiwan

ABSTRACT

This research views the activities of international expansion on the part of MNCs as a process of knowledge transfer, and investigates the marketing knowledge transfer modes of MNC subsidiaries in Taiwan. Three modes of transfer are widely recognized in the literature: the global knowledge mode, host country knowledge development mode, and the standardized knowledge transfer mode. Results show that the types of global strategy adopted by MNCs clearly explain their selection of the knowledge transfer mode. Further, market similarity and strategic importance are also closely related to the selected transfer mode.  Rapid changes in the nature of global competition have driven international managers and management researchers to search innovative ways to approach new challenges, tackle problems and answer questions as to how to manage complex multinational corporations most effectively. This has meant having to develop new theoretical perspectives with which to examine issues, such as those concerning the management of a set of foreign subsidiaries with diverse external environments and a wide range of internal skills and competencies. Researchers in organization theory (Levitt and March, 1988) as well as strategic management (Prahalad and Hamel, 1994) have identified organizational learning as one of the most important subjects for scholarly inquiry. A common thread among network theory (e.g., Ghoshal and Bartlett, 1990), organizational learning(e.g., Hedlund, 1986; 1994), and evolutionary theory (e.g.Kogut and Zander, 1993) is their focus on the multi-relationships within MNCs, and the view that the multinational organization as a whole can greatly benefit from the transfer of resources and competencies within the firm.  This research examines the central role played by global strategies as they relate to the process of knowledge transfer as MNCs expand into international markets. By focusing on one particular type of competency – marketing knowledge, this research departs from past research that has traditionally focused on technology and other technical knowledge transfers. With only a few exceptions  (Inkpen and Beamish, 1997), marketing knowledge has yet to receive proper conceptual and empirical attention as a competent source of competitive advantage that can be transferred inside MNCs. Indeed, the strategic significance of marketing knowledge to a firm’s international competitiveness warrants closer scrutiny.

The Study of the Motivation and Performance of the Incubators’ Strategic Alliances: Strategic Groups Perspective

Dr. Wen-Long Chang, Shih Chien University, Taipei, Taiwan, R.O.C.

Jasmine Yi-Hsuan Hsin, University of British Columbia, Vancouver, Canada

ABSTRACT

This paper applies the concept of strategic groups to the motivation and performance of the incubators’ strategic alliance. Surveys are conducted with 76 incubators in Taiwan. The result shows that all incubators can be divided into three strategic groups according to the similarity of their resource ownership and strategic thinking: strategic group with dominance over information resource, strategic group with dominance over business administration resource and strategic group with dominance over technical and human resources. In addition, due to the diversity of each strategic group’s resource dominance, incubator’s motivation for taking on a strategic alliance varies. The performance of each strategic alliance varies as well.  Since 1996, Small and Medium Enterprise Administration (SMEA), Ministry of Economic Affairs, Taiwan, has taken on an active role to reinforce incubation policies in order to promote the start-up and innovation of small and medium enterprises in the hope to integrate the knowledge of different sectors: government, business, academia, and research institutions, so that SMEA can assist schools and both public and private sectors to set up their own incubation centers. SMEA aims to eliminate the difficulties faced by small and medium start-ups and to strengthen technology innovation skills of those start-ups. The goal is to upgrade those enterprises into knowledge industry with high added values, and to enhance Taiwan’s industrial competitive edge.

The Application of a Quantile Regression to the Relationship Between Debt Financing and Equity Financing by Dual-Issue Cases

Min-Tsung Cheng, Ching Yun University, Taiwan

ABSTRACT

The allocation of financing sources contributes to the “success” of corporate financing strategy. Theoretically, what is the relationship between debt financing and equity financing? The literature regarding capital structure considers either substitutive or complementary financing sources. Hovakimian et al. (2004) assume that debt can be applied as a substitute of equity; on the other hand, a theory developed by Mehar (2005) argues that debt and equity are complementary sources of finance.    This paper adopts a methodology of quantile regression approach, similar to the work of Fettouh et al. (2005), to examine the relationship between debt and equity. Evidence shows debt and equity are complementary sources of financing amid high-equity financing firms, partially consistent with the finding of Mehar (2005).   What is the relationship between debt financing and equity financing? The literature regarding capital structure considers either substitutive or complementary financing sources. Hovakimian et al. (2004) identified a novel concept of “dual issues” in corporate financing behavior; that is, the practice of a firm issuing both debt and equity in the same year, in contrast to the previous research of choosing only one sort of financing instrument. Having a rare opportunity to reset their capital structure at relatively low cost, firms that follow a dynamic trade-off strategy will choose a combination of new debt and equity, as alternative sources of finance, with the assumption that debt can be applied as a substitute for equity. By offsetting the deviation from target leverage caused by the accumulation of earnings and losses, debt ratio is close to the target; therefore, debt can be applied as a substitute of equity.

A Study on the Factors of Manufacturer Profitability:  The Moderating Effect of Different Industries

Shu-Ching Chan, Jin Wen Institute of Technology, Taiwan

Wenching Fang, National Taipei University, Taiwan

ABSTRACT

Directed by governmental policies and global prosperity, the information and electronic industry is a mainstream industry to which investors pay close attention and job seekers are attracted in Taiwan. This study discusses non-information and electronic manufacturers that have been ranked as top businesses in Taiwan, together with mainstream industry manufacturers with good business performance. The study examines strategies for steadily gaining profits in the international market. Studies suggest that that key factors leading to profitability for information and electronic manufacturers and non-information and electronic manufacturers have modified in recent years. The effects of R&D, marketing expenditures, and the employment of professional workers on such profitability are significant for Taiwan’s information and electronic manufacturers, but not for Taiwan’s non-information and electronic manufacturers. In recent years, non-information and electronic manufacturers have steadily gained profits in the international market, primarily because this group can effectively manage the costs of its value chains and develop both global logistics and resource integration.     

A Study on Efficiency and Productivity of Turkish Banks In Istanbul Stock Exchange using Malmquist DEA

Dr. Birgül Şakar, Kadir Has University, Istanbul, Turkey

ABSTRACT

This paper considers the study of the Turkish commercial banking performance listed in Istanbul Stock Exchange in terms of their ability to provide maximum outputs with the given set of input consumption, i.e. Malmquist DEA analysis with output orientation have been adopted. Malmquist DEA analysis methods have been employed to determine the affects of variable returns on banks efficiencies and resulting Malmquist indices have been used to evaluate changes.  The model  uses five input variables as i) branch numbers, ii) personnel number per branch, iii) share in total assets, iv) share in total loans, v) share in total deposits. The Share figures used are for whole Turkish banking sector and not the sector shares of Istanbul Stock Exchange. The five output variables selected as i) net profit-losses/total assets (ROA), ii) net profit-losses/total shareholders’ equity (ROE), iii) net interest income/total assets, iv) net interest income/ total operating income, and v) non-interest income/total assets. Results of the Malmquist DEA analysis is discussed from different perspectives.  An examination of bank efficiency listed in stock exchange is important for several reasons. Financial markets in Turkey have undergone significant change over the last decade, as a result of deregulation and globalization. These drivers of change were particularly strong over the second half of the 1990s, which may be characterized as a period of a series of financial reforms were introduced, whose main objectives were to boost the efficiency and productivity of banks by limiting state interventions and enhancing the role of market forces. Banks moved away from simply being intermediaries toward providing a range of financial services, from insurance to funds management. All of these factors have had a significant influence on the operations of Turkish banks.

Application of the VAIC Method to Measures of Corporate Performance: A Quantile Regression Approach

Huei-Jen Shiu, National Chengchi University

ABSTRACT

This research applies a new accounting tool for measuring the value creation efficiency in the company, namely the Value Added Intellectual Coefficient (VAIC^TM) of Pulic (1998). Based on the year of 2003 annual reports of 80 Taiwan listed technology firms, it also examines the correlation to the resources of corporate allocation, and focuses on differences between firms in different quantiles of corporate performance. Conditional quantile regressions show that while variables are significant throughout the distribution, there are considerable differences, including differences in sign, and in their impact on firms with different degrees of performance. The empirical applications indicate that the nature of the technology industry in Taiwan is that of transforming intangible assets such as intellectual capital into high-value-added products or services in a way identical to the claims of Pulic (2004).  Conventional accounting systems were developed for manufacturing economies and for measuring the value of tangible assets, but with intangibles such as the rate of change they find it difficult to account for. In addition to accounting systems, there are several internal and external measures of intellectual capital. The Skandia Navigator was one of the first internal measures to calculate and visualize the value of intangible capital by stating that intellectual capital (IC) represents the difference between market and book value (Leif 1997). Others are human resource accounting, the intangible assets monitor, and the balanced scorecard. External measures include market-to-book value, and Tobin’s Q and Real Option theory (Shaikh 2004).  

A Study of the Factors Impacting ERP System Performance—from the Users’ Perspectives

Ching-Chien Yang, National Central University, Jhongli, Taiwan, ROC

Ping-Ho Ting, Tunghai University, Taiwan, ROC

Chun-Chung Wei, Chungchou Institute of Technology, Taiwan, ROC

ABSTRACT

Many companies excessively emphasize the information technology, they ignore the most important factor for implementation IS success should be people-centered. This research examined the factors that impact ERP system performance from the system users’ perspectives. We empirically investigate the using experiences of ERP system users of those have implemented ERP systems middle-size companies in Taiwan on 2004. Our research found that the different implementation planning (implementing consultant services, education and trainning, and specific staffs for implementation ERP), characteristics of implementing organizations (customized processes, use partial or all system functions, and personnel), and users’ characteristics (the working age, department/segment, and position) will significantly influence the ERP system performance.

Factors Constraining the Growth and Survival of Small Scale Businesses. A Developing Countries Analysis

Stephenson. K. Arinaitwe, Breyer State University, London Centre

ABSTRACT

Small-scale businesses play a crucial role in contributing to overall industrial production, export and employment generation in developing countries, as noted by Kazmil & Farooquie, 2000. They form an integral part of a well growing and expanding national economy. Small-scale businesses have been a means through which accelerated economic progress and rapid industrialization can been achieved. That’s the reason why the dynamic role played by these enterprises in developing countries has been highly recognized and applauded.  Despite the recognition given to small-scale businesses as potential sources of economic growth and development in developing countries, their contributions have always fallen short of expectations. Therefore this analysis will try to find out and discuss the major challenges that have limited such businesses from delivering their expected benefits of poverty eradication, economic recovery and other developmental goals to the economies of developing countries.   In order to arrive at meaningful conclusions, the analysis will exploit all the available literature on small-scale businesses in developing countries. It will investigate the challenges of applying assumptions of positive relationships experienced within developed countries to developing nations.  Technological capabilities and how the lack thereof is a considerable constraint for small-scale businesses, in developing countries will be discussed, along with the need for technological support. Finance and small-scale businesses, as well as the three components for a grassroots campaign will be overviewed. And finally, balancing promotional strategies with environmental sustainability will be reviewed in order to better understand the challenges that small-scale businesses in developing countries must overcome in order to survive.

On Using Benefit Segmentation for a Service Industry: A Study on College Career Counseling Services

Professor Chaim Ehrman, Loyola University Chicago, Chicago, IL

ABSTRACT

The need for a marketer of consumer goods to segment his market has been well documented in the literature. Segmentation strategies can be based on demographics such as age, income, religion, location, ethnic background, education, etc. Alternatively, segmentation can be based on psychographics, in which the segmentation strategy will focus on consumer life style characteristics. A third approach is to segment your market based on key benefits sought by consumers. However, the literature documents application of segmentation strategies for products, which are tangible items. In this paper, the focus is on a service, and benefit segmentation will be demonstrated how it can be used for the service industry.  Universities in the 21^st Century are facing a Buyers’ Market. Assume that students are “buying” higher education, and Universities are “selling” higher education through their curriculum, faculty, libraries, resources, etc. In the 60’s and 70’s there were many veterans from the armed forces who became college students, thanks to the help of the GI Bill. There was a shortage of colleges, and students were grateful to be accepted by any college. Hence, it was a Sellers’ Market, because the Universities could be picky and choosey whom they would accept as students. However, in the next 30 years, many new colleges and Universities opened up, faster than the rate of new students. Now we have a Buyers’ Market, because the students can pick and choose the university of their choice. The Universities are competing fiercely to get more students.

Business International: An Analysis of the International Market

Dr. Mehenna Yakhou, Georgia College and State University, Milledgeville, GA

Dr. Vernon P. Dorweiler, Michigan Technological University, Houghton, MI

ABSTRACT

Business has taken steps toward internationalizing their markets, and production.  This research focus is on two avenues of global extension: entry into national markets encounters national policies on imports; requiring local production for local marketing, or restrictions on imports.  Current terms of international participation are included.  This paper concludes with decision by firms, on how far to go toward globalization.   The modern business era has introduced two international terms (Quintella, 1997): globalization, and internationalization.  This approach to business is based on the initiatives by two parties: the business corporation, and the entry national.  The first is incentive-based, to provide a willingness to undertake venturing the technology.  The second focuses on risks of international marketing (Sullivan, 1991).  The corporation will likely need to restructure, to meet conditions in the international environment.  The rationale shows the impact involved with an international strategy.  The risk-reward requires a basic understanding of the international environment; this pertains to the national policies of countries of entry. 

A Voice Crying in the Wilderness for Auditor Independence:  Abe Briloff and Section 201 of the Sarbanes-Oxley Act of 2002

Dr. Deborah Prentice, University of Massachusetts, Dartmouth, North Dartmouth, MA

ABSTRACT

Abraham Briloff, an accounting academician and practitioner for over 60 years, is a major historical voice for the tenets of Section 201, of Title II, entitled Auditor Independence, of the Sarbanes-Oxley Act of 2002 (SOX). Section 201is entitled Services outside the scope of practice of auditors and makes it certain practices unlawful for a public accounting firm when conducting an audit. SOX came into effect subsequent to the wave of accounting scandals in 2002. In his 1965 doctoral dissertation, The Effectiveness of Accounting Communication, and in numerous published writings, Mr. Briloff had indicated his opposition to these practices. Finally, in 2002, these practices were outlawed. This article examines Mr. Briloff’s longstanding claims and suggestions and points out how they were finally resolved by Section 201. From these it is apparent that Mr. Briloff foresaw the need for the content of Section 201 of SOX.  In the spring and summer of 2002, a wave of accounting scandals erupted in the United States. These were linked to the business failures of Enron, Worldcom, Global Crossing, and other large firms. High-ranking officials of these firms and a number of other leading companies admitted to intentionally misstating their accounts. Their offenses were often aided rather than hindered by the public accounting firms that audited their financial statements. The scandals brought billion-dollar financial restatements for many of the firms involved, and unleashed a series of accounting humiliations, sharp stock price corrections, and stories of corporate malfeasance in firms with previously stellar reputations. Many investors were employees who held the bulk of their life savings in company stock that became worthless, Enron being a notable example. The scandals affected major public accounting firms as well. As a result of the Enron scandal the Big Five accounting firm Arthur Andersen suffered a criminal indictment and conviction, leading to the firm’s swift dissolution.

The Effects of Nonmonetary Sales Promotions on Consumer Preferences: The Contingent Role of Product Category

Dr. Shu-ling Liao, Yuan Ze University, Taiwan

ABSTRACT

Sales promotion as a major marketing communication tool has attracted extensive research attention which mostly addressed price promotion and its utilitarian driving force. Nonprice promotion with the provision of mixed benefits that might avoid losses in brand image and profit, however, was insufficiently investigated. The present study explores the preferential effects of nonmonetary consumer promotions moderated by product category. Results show that both product-related and reward-timing nonprice promotions take a major part in influencing consumer preferences for the sales promotion. The preference for same-product sales promotion is stronger than for other-product sales promotion. Also, instant-reward sales promotion is better preferred over delayed-reward sales promotion. The contingent role of product category is discovered in product-related consumer promotions. Same product as promotional benefit generates best preference when the promoted product is in the convenience goods category. If other product than the one on promotion is provided as buying incentive, it was found to top the preference for shopping goods. Rewarding consumers with same product instead of something different from the promoted one is a more effective match to convenience products and specialty goods, whereas providing other product as a reward object is more suitable for shopping goods.

An Analysis of Factors Which Influence Small Businesses’ Decision to Have a Website and to Conduct Online Selling

Sumaria Mohan-Neill, M.S., MBA, Ph.D., Roosevelt University, Chicago, IL

ABSTRACT

Using data from a national sample of 752 U.S. small business firms, this paper addresses four general research objectives concerning the decision to have a website and to conduct online selling activity by firms. The first objective is to present an overview of the frequency distribution of websites in small firms, and the frequency of online selling by these firms. The second objective is to explore why some firms with a website do not use it to sell goods and services over the Internet.  The third objective is to explore the reasons why firms without a website do not currently have one. Finally, the fourth objective is to address the expectation of firms, without a website. What are their expectations concerning having of a website for the business in the near future? The Internet bubble has burst, and much of the hype is over, but we are nonetheless faced with radical technological changes, which have revolutionized the competitive marketplace, and even small businesses cannot ignore the opportunities and threats, which comes with the Internet.

Maximize Audit Fees and Minimize Audit Risk: “A Recipe for Auditing Success or Failure?”

Dr. Kathie Cooper and Dr. Hemant Deo, University of Wollongong, Australia

ABSTRACT

The audit profession is always mindful of the costs of the auditing process that it undertakes.  When the audit firms tenders for an audit it is done on a very competitive basis.  If the audit firm wins the tender then the resulting consulting services is where the audit firm makes its revenue.  The way to achieve this is to do a risk based audit, which is timed based.  The audit firm therefore, in most cases trying to take as much consulting works as it possibly cans the aim being to maximize audit fees and minimize audit cost “the road to audit success”.  The aim of this paper is to highlights some of the pitfalls once an approach such as this is undertaken using the recent collapse of Heath International Holdings (HIH) case study in Australia.  The Royal Commission Report into the collapse of Australian insurer, HIH, demonstrates how a previously respected accounting firm, Arthur Anderson, breached its own audit manual requirements in order to keep a client.  Evidence to the Royal Commission further demonstrates the folly of the decisions made by Arthur Anderson executives to maintain not only a difficult client, but also a maximum risk client at the expense of the firm’s reputation and, ultimately, its very existence.  Meanwhile, the demise of Arthur Anderson as one of the world’s Big Five accounting firms in the wake of the unexpected collapses of not only HIH in Australia but also Enron and WorldCom in the USA is little compensation to those left financially benefited as a result of reliance on the viability of these companies as reflected in audited financial reports.  The remaining Big Four firms have little to be happy about either as the corporate scandals have not only impacted adversely on the reputation of the accounting profession but have potentially diminished its autonomy.

A Study on Relations between Industrial Transformation and Performance of Taiwan’s Small and Medium Enterprises

David W-S. Tai and C-E. Huang, National Changhua University of Education, Taiwan

ABSTRACT

With the liberalization and internationalization of the global economy, Taiwan’s labor-concentrated traditional industries are progressively loosing their competing advantages. Therefore this research studied Taiwan’s SMEs, through transformation process to establish competitive advantages and better performance, among the changes in environment. This research focused on Taiwan’s SMEs, and discuss through actual demonstration to define the relationship between “industrial competing environment, industrial transformation strategy and organizational performance”. With the data from 184 SMEs, through the analysis of LISREL,this study found that: 1. Industrial competing environment is clearly affecting the industrial transformation strategy, when facing greater changes in industrial environment, transformation process goes higher. 2. Industrial competition environment must go through industrial transformation strategy to affect the performance.

The Impact of Message Framing and Involvement on Advertising Effectiveness - The Topic of Oral Hygiene as an Example

Chia-Ching Tsai, I-Shou University ,Taiwan

Ming-Hung Tsai, E. C. K. Hospital, Taiwan

ABSTRACT

In this study, we used oral hygiene advertisement to investigate the impact of message framing and involvement on advertising effectiveness.  We foun