The Journal of American Academy of Business, Cambridge

Vol.  9 * Num. 2 * September 2006

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

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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 double blind peer review process.  The Journal of American Academy of Business, Cambridge is a refereed academic journal which  publishes the  scientific research findings in its field with the ISSN 1540-7780 issued by the Library of Congress, Washington, DC.  The journal will meet the quality and integrity requirements of applicable accreditation agencies (AACSB, regional) and journal evaluation organizations to insure our publications provide our authors publication venues that are recognized by their institutions for academic advancement and academically qualified statue.  No Manuscript Will Be Accepted Without the Required Format.  All Manuscripts Should Be Professionally Proofread Before the Submission.  You can use for professional proofreading / editing etc...

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Outsourcing:  Its Benefits, Drawbacks and Other Related Issues

Dr. Prasad Kakumanu, University of Scranton, Scranton, PA

Dr. Anthony Portanova, University of Scranton, Scranton, PA



Offshore sourcing for IT software applications and maintenance has become very popular over the last ten years.  It started during the dot com boom years which overlapped with the Y2K situation.  These two conditions created extra demand for IT people which exceeded the available work force in this country.  Afterwards the dot com bust which accompanied an economic slow down drastically reduced the budgets for IT.  Companies looking for ways to develop new software applications and to maintain existing applications within their budget realized the opportunity to send work overseas.  The reason this looks very promising for an organization is the availability of talented IT workers at much lower cost and the maturity of the telecommunication networks and their applications on a world wide basis.  This is also aided by the improved methodology in world wide sourcing and global project management, service level agreements, and confidentiality contracts.  In this paper we discuss the benefits as well as the risks in offshore outsourcing and how public officials are reacting to the IT outsourcing phenomenon. In truth, companies have outsourced since the industrial revolution.  Few companies make their own pens in house or pump their own water.  Companies have bought innumerable products and services from outside companies since the modern idea of a company has been in existence (Aalders).  Many people view sending major company operations outside of the company differently than these simple examples, however. Offshore outsourcing of labor first became prevalent in manufacturing industries.  Labor in other countries was cheaper than American workers, and transportation costs fell.  This made sending work offshore more economic and began a large wave of outsourcing. Recently, outsourcing IT functions has become a very popular source of competitive advantage.  By paying other companies to run IT and other support divisions, many U.S. companies are cutting staffs, costs, and increasing efficiency.  The immediate benefits can be great, allowing smaller companies to gain cheaper access to expensive technologies and allowing large firms to expand there IT usage without risk of obsolescence (Margulious).  As with any potentially rewarding activity, there are risks involved.  Companies need to weigh the risks, rewards, and costs involved before making a decision to outsource.  The more vital the task, the more care should be taken with this decision. Companies tend to outsource several kinds of tasks.  Functions that are of low strategic value or can be treated as commodities can be readily outsourced (Ripin and Sayles).  The risk is minimal because these functions are not a significant source of revenue or advantage (Jaffe).  Because of this, there is little chance anyone would want to damage or steal them.  A subset of these functions is operational level functions.  Answering or billing services are good examples.  They are expensive in house, but not truly critical.  Functions like these are important to keep up and to have done well, but the risk of competitive advantage being lost is minimal (Porter).  Routine processes like these are a good first step in outsourcing.  They allow a company to establish a relationship with an outsourcer and then make a more educated decision on whether to outsource more functions and whether or not this is the vendor to use (Lim).  Company or industry knowledge required is also a helpful determinant of what can be outsourced.  Sending something off shore is easier if company or industry knowledge requirements are low.  The more generalized the function, the easier, cheaper, and more reliably it can be outsourced.  In to this, maintenance, repair, and upgrade of IT systems can fall.  These functions can sometimes be carried out with minimal knowledge and customization (Kass).  The greater the industry or company knowledge required in performing certain functions, the less likely they are to be outsourced.  It is more expensive and time consuming to train the vendor or find companies that already have the required knowledge.  In addition, internal company knowledge transferred to the outsourcers can be lost or leaked to competitors (Datz).  This increases the risks and can cause companies to hold on to these functions. The United States is sending a lot of IT jobs overseas.  What is causing this exodus?  Many other nations have equivalently skilled labor forces.  These workers work for less without any significant loss of quality in some areas.  American companies are reaping large cost savings by utilizing this workforce (Jaffe).  With competition getting fiercer, any cost savings or efficiency gains help companies maintain competitive prices without sacrificing quality or service to do it.  The recent advancements in technology allow work to be sent back and forth easily.  Email and other technologies can enhance communications and speed up file transfers (Friedman).  This helps to negate the large distances between a client and an outsourcer.  Large amounts of data can cheaply and efficiently be transferred across great distances, allowing companies all over the world to share information and collaborate on a large scale (Lohr).


The Importance of Work Experience to Accountants’ Professional Development

Dr. Keith A. Moreland, University of Michigan-Flint, Flint, MI

Dr. Madhukar Angur, University of Michigan-Flint, Flint, MI



During the last decade there has been a shift in CPA licensing requirements toward increasing the education component, while sometimes decreasing work experience requirements.  This study finds that work experience continues to play a vital role in CPAs’ professional development.  In structured interviews with 220 CPAs in a state with a 150 hour education and no work experience requirement and a state that had a 120 hour education and two-year work experience requirement, we find that new and experienced CPAs in both states view work experience as contributing vitally to key professional competencies.  These competencies include key business skills such as communication and computer skills and accounting technical competencies such as financial reporting, accounting information systems, and taxation. The results of this study suggest that experienced CPAs continue to play a key role in the professional development of new accountants.  Despite more emphasis of university education in licensing requirements, experienced accountants must continue to identify, develop and supervise assignments and roles tasks that enable new accountants to develop their full professional potential. During the 1990s most states adopted legislation that increased the university education requirement to become a CPA to 150 semester hours and some states simultaneously reduced the work experience requirement.  This study examines the extent to which university coursework and work experience contribute to the professional development and competency of new CPAs.  The next section of this paper provides background on the history of work experience and education requirements to become a CPA.  The following sections discuss competencies that are important to the professional development of new CPAs and the methodology employed to examine the contributions of university education and work experience to the development of those competencies.  The final section summarizes the conclusions of this study and provides recommendations.  The results of the study suggest that work experience continues to contribute significantly – and to a greater extent than university coursework - to the key competencies important to practicing CPAs.   It is important that experienced CPAs remain diligent in recognizing their important role in providing developmental work experience (on-the-job training) to build the competency of new CPAs and CPA candidates.  Work experience, has long been a part of the licensing process for CPAs in the United States; virtually all states have such requirements.  However, in 1969, the American Institute of Certified Public Accountants (AICPA) Council approved a resolution calling for 150 semester hours of university education and no work experience requirement and for new CPAs, to be effective in 1975.  Support for this proposal proved to be slow in developing as, prior to 1988, only the states of Florida and Hawaii had adopted 150-hour requirements and only Florida had eliminated the work experience requirement.  After the 1988 AICPA mandate of 150 semester hours for new members after 2000, states began to adopt corresponding education requirements for licensing.  Simultaneously, some states reduced work experience requirements.  Another important venue where work experience requirements have been addressed is the Uniform Accountancy Act (UAA) regulatory framework that is a product of joint efforts of the AICPA and the National Association of State Boards of Accountancy (NASBA).  In 2002 the AICPA and NASBA jointly issued the revised third edition of the UAA.  The suggested work experience requirement in the previous (1994) edition of the UAA consisted of one year of public accounting experience under the direction of a CPA.  Not all states adopted this requirement; some requirements were greater and some were less than one year.  The suggested requirement the revised third edition of the UAA is one year of work experience that can be in a broad array of business settings.  The experience must be verified, but not necessarily supervised, by a CPA.


Diagnosis and Remedies for Deviant Workplace Behaviors

Dr. Steven H. Appelbaum, Professor of Management, Concordia University, Canada

Barbara T. Shapiro, John Molson School of Business, Concordia University, Canada



The impact of deviant behaviours—behaviours that violate organizational norms, policies or internal rules—on organizations are examined. The reasons why people engage in such behaviours are explored, along with some of the reasons organizations—toxic organizations—allow such behaviours to thrive within their walls. Possible solutions to overcome such problems in the workplace are also examined. It is proposed that the survival of an organization in the face of deviant employees is possible with a remodelling an organization’s norms, attitudes and social values to a specific organizational culture centered around important ethical core values. When normal work behaviour goes outside the norms of the organization, its consequences are far-reaching and affect all levels of the organization including its’ decision-making processes, productivity and financial costs (Coccia, 1998).Researchers have given these behaviours many different names including workplace deviance (Bennett & Robinson, 2003), counterproductive behaviour (Mangione & Quinn, 1975), and antisocial behaviour (Giacolone & Greenberg, 1997).  In essence, behaviour is deemed deviant when an organization’s norms, policies, or internal rules are violated by an individual or group, and threatens the welfare of the organization or its constituents (Robinson et al., 1995).  Deviant behaviour is a growing concern in many organizations. Whether the deviance is deemed explicit or subconscious, whether it involves sexual harassment, vandalism, rumour spreading or otherwise, it has negative consequences for the entity and its affiliates. The difference between unethical behaviour and deviant behaviour is the former deals with the breaking of societal rules, while the latter focuses on violation of significant organizational norms. ). This article will investigate the nature of deviant behaviour and its multiple impacts upon the organization. In this article, different diagnostics to determine deviant behaviours are examined and the reasons why individuals(managers-employees) engage in such deviant behaviours are explored. Some of the rationale organizations utilise in permitting such behaviours to continue.  Some remedies to manage such problems in the workplace will be examined.  The impetus for the growing interest in deviant behaviour is the increasing prevalence of this type of behaviour in the workplace and the enormous costs associated with such behaviour (Peterson, 2002). The financial impact of workplace deviance on the U.S. economy as an example is a substantial one. This is due to the fact that three out of every four employees reported having stolen at least once from their employers. Furthermore, incidences of workplace deviance are now soaring out of control, with nearly 95% of all companies reporting some deviance-related experience within their respective organizations (Henle et al, 2005). Up to 75 percent of employees have engaged in some of the following deviant behaviours: theft, computer fraud, embezzlement, vandalism, sabotage and absenteeism (Robinson et al 1995). The estimated impact of the widespread theft of employees on the U.S. economy has been reported to be $50 billion annually (Henle et al 2005). Other researchers estimate this number in the range anywhere from $6 to $200 billion annually (Robinson et al, 1995). Moreover, victims of interpersonal workplace deviance are more likely to suffer from stress related problems and show decreased productivity, lost work time and a high turnover rate (Henle et al., 2005). One reason individuals engage in workplace deviance is that the organization in which they work support or encourages such behavior (Sims, 1992). Behavior that does not conform to generally accepted organizational norms, but that is rewarded by the organization was coined counter norms by Sims (1992). For example, society values persons who are honest and that are not deceitful (Sims, 1992). Some organizations, however, depend on employees that are dishonest and deceitful in order to be successful. These types of organizations have been termed toxic and are characterized by a history of poor performance, poor decision-making, very high levels of employee dissatisfaction and employee stress well beyond normal workload issues (Coccia, 1998). In short, a toxic organization creates a high degree of distress and decreases its efficiency in the long run.  Toxic organizations will develop under certain circumstances. The first condition is for a relatively small work unit with a high level of face to face interaction that stimulates interpersonal relationships (Sims, 1992). Under these conditions, the sick organization will develop with a high interdependence of its employees who have personal agendas that do not match with the needs of the organization (Sims, 1992). The second condition for the development of a toxic organization is an ineffective manager that is immoral or mentally unsound (Sims, 1992).


Optimality Principles and Posterior Information as Decision Making Factors in Internet Marketing

Dr. Boris Stavrovski, City University of New York, New York, NY



 Right selection of optimality principle and different ways to incorporate posterior information are shown to be crucial for Internet marketing success. Nine possible formalizations for short-term Decision-Making Rules (DMR) are considered for optimal resource allocation in Internet marketing. Three of them are using only a priori data, three – are using posterior data but forfeited any memory of the process, and three – are also using posterior data altogether with some adaptation features. Each of the groups is formed by three DMR – an optimal guaranteed DMR, an optimal in average DMR and a physical mix of DMR, using an optimal in average randomization. Some specific features of those rules are analyzed and compared alongside with simulation of optimal use frequencies for each DMR delivering nontrivial results in an Internet marketing operation. Surprisingly enough seven from nine offered DMR has found a niche of optimal use under some combinations of parameters for a simple model of Internet marketing operation introduced.  Internet marketing delivers a sound example of an electronic commerce activity that includes sharing of business information, maintaining of business relationship, and conducting of business transactions by means of telecommunication networks (Zwass, 2003). There is a common understanding among marketing practitioners (and scholars as well) that the right resource allocation in marketing constitutes one of the most complicated problems involved in making it effective and efficient at the same time. ‘Recent work has established that marketing investments in advertising, promotions and product improvement can have a long-term impact on sales, and therefore cash flows and profits. On the other hand, such marketing investments are costly and may have a negative impact on short-term profit streams’ (Dekimpe, 2000).


The Effects of Institutional Investors in the Retail Industry

Dr. Byron Hollowell, Penn State University, Scranton, PA



 Using an agency theory approach, this study examines the effectiveness of agency controls to converge managerial and shareholder interests. I specifically examine the relationship between institutional shareholder monitoring and shareholder wealth gains in the retail industry. I find that indirect agency controls, especially the external monitoring provided by institutional owners, are positively and significantly related to firm performance over longer performance time horizons.  Furthermore, I find evidence to support the disciplining effects of direct controls, such as incentive based executive pay packages, to help force the convergence of managers’ and shareholders’ interests.  Monitoring by institutional shareholders is a mechanism that has developed to resolve agency problems between corporate managers and shareholders.  Some researchers believe corporate boards generally fail in their responsibility to monitor management and guide their companies (ALI, 1987 and Dunn, 1987).  Others, however, argue market pressures and concerns for reputation will lead directors to fulfill their duty (Fama and Jensen, 1983).  Yet, whether the presence of institutional investors encourages firm managers and corporate boards to enhance firm performance remains an important and unresolved empirical question.


Determinants of the Percent of the Population Enrolled in HMOs

Gigi M. Alexander,  Armstrong Atlantic State University, Savannah, GA

Dr. Richard J. Cebula,  Armstrong Atlantic State University, Savannah, GA

Dr. Yassaman Saadatmand, Armstrong Atlantic State University, Savannah, GA



 This study endeavors to identify key factors influencing interstate differentials in the percentage of the population enrolled in HMOs. Among other things, the cross-section analysis finds the percentage of a state’s population enrolled in HMOs to be a decreasing function of the state’s unemployment rate, the percent of the state’s population at or below the poverty level, and the percentage of the population in the state that filed a federal personal income tax return that included a Schedule C (as a proxy for self employment and independent contractors). In addition, the study finds the percentage of a state’s population enrolled in HMOs to be an increasing function of the percentage of the state’s labor force that is unionized and the state’s female labor force participation rate. The analysis also considers as additional explanatory variables the percent of the population that is black, the percent of the population that is Hispanic, and median family income. These variables do not appear to play a significant role in explaining HMO enrollments.  In the United States, the provision of healthcare and the workings of healthcare markets have attracted considerable interest in recent years. This interest covers a broad spectrum of topics, ranging from hospital capital costs to healthcare inflation to markets for healthcare coverage/insurance (Burstin [1998-99], Cebula [2006], Chirikos [1998-99], Daniels and Gatsonis [1999], deMeza [1983],  Dushi and Honig  [2003], Frick and Bopp [2005], Gaynor and Haas-Wilson [1999], Glied [2003], Goodman and Stano [2000], Gruber [2003], Harris and Keane [1999], Holahan, Nichols, Blumberg, and Shen [2003], Jantzen and Loubeau [2003], Nyman [2003], Swartz [2003]). Of these issues, that of healthcare coverage/insurance has increasingly attracted the attention not only of the media but also of scholars across a variety of disciplines. Dushi and Honig [2003, p. 252] attribute this high level of interest to the fact that the “…decline in health insurance coverage over the last two decades is a matter of national concern.” Indeed, Swartz [2003, p. 283 ] observes that “At least 41 million Americans are currently without health insurance (of any kind) in any given month…”


The Impact of Self-Presentation by an Auditor on Investment Advisors’ Trust of the Auditor

Dr. Herbert W. Pollard, King College, Bristol, TN



 Self-serving attribution theory suggests persons will acknowledge personal responsibility for successful activities, but the same persons will reject personal responsibility for a failure. In the event of a public failure, the actor will offer self-serving public statements in an effort to influence attitudes and behavior of observers. When this attribution process is employed by a high-status person in an effort to protect public impressions, Lee and Tiedens (2001) proposed that the self-serving behavior may actually damage the public impression of the high-status person. This study examined the impact of a self-serving public statement (self-presentation) by an auditor on investment advisors’ trust of the auditor. The study found that the self-serving statement lowered trust of the auditor.  The term self-serving attributions describes a phenomenon in which persons acknowledge personal responsibility for successful activities, but the same persons reject personal responsibility for a failure. A successful activity is described as a consequence of internal actions. A failure is described as a consequence of external circumstances (Weiner, 1972, 1980, 1986). The motivation that initiates self-serving conclusions has been long debated (Heider, 1958; Kelley, 1973). Nonetheless, the existence of self-serving behavior is well documented (Campbell & Sedikides, 1999; Zuckerman, 1979).


Dual Derivatives Spreading and Hedging With Evolutionary Data Mining

Dr. Hsing-Wen Wang, National Changhua University of Education, Changhua, Taiwan



 The Black-Scholes options pricing model is widely applied in various options contract and derivatives, including contract design, trading, assets evaluation, and enterprise value estimation, etc. Unfortunately, this theoretical model limited by the influences of many unexpected real world phenomena caused due to six unreasonable assumptions. If we were to soundly take these phenomena into account, the opportunities to gain an excess return would be created. Besides, many literature is available on derivatives pricing via data mining technique such as neural networks, However, little attention has been paid to the dual derivatives spreading and hedging, especially the dual derivatives. This paper therefore combines both the remarkable effects caused by the implied volatility smile (VS) and the tick-jump discrepancy (TJD) between the underlying and derivative prices to establish a three-phase derivatives spreading and hedging model using the Evolutionary Valuation Neural Networks (EVNN). Via the empirical evidence from the warrant market in Taiwan, it is shown that the EVNN model with spreading and hedging operations are superior in terms of performance to the original Black-Scholes-based ones. The EVNN model is found to be suitable for application to various options markets as the valuation factors are modified. This paper helps to integrate the theoretical model with important practical considerations.


An Agency Theoretical Perspective on the Share System of Crew Remuneration and the Crew’s Optimal Effort

Dr. Yao-Hsien Lee, Yi-Lun Ho, Chung Hua University, Taiwan

Chin-Chen Chen, Chung Hua University, Taiwan

Dr. Ching-Ta Chuang, National Taiwan Ocean University, Taiwan



 Crew labor force is one of the most important inputs for fishing operations. Previous studies indicate that the share system of crew remuneration has an important effect on crew's optimal effort. Using the agency theory approach, this paper investigates the factors influencing the crew's optimal effort and the share rate. It incorporates the crew’s performance and the uncertainty of fish stock into the traditional share rate model. It shows that (i) increases in the price of fish, the degree of risk tolerance and the job satisfaction level raise the crew’s optimal effort, (ii) increases in the degree of risk tolerance and job satisfaction level increase the optimal share rate of the crew, while an increase in the uncertainty of fish stock reduces the share rate of the crew, and (iii) the share system that includes the fixed wage as well as a share of net proceeds will encourage the potential crew member to join a vessel.  In addition, implications of the empirical result of determining the share rate between the crew and the vessel owner in the far-sea fisheries industry of Taiwan are also discussed.


Teacher Evaluations and Grades: Additional Evidence

Dr. Tom Moore, Georgia College & State University, Milledgeville, GA



 Numerous studies have attempted to determine the characteristics of effective teaching.  Many of these studies have concluded that student evaluations of teaching (SET) are reliable and robust indicators of teaching effectiveness.  Most studies find that evaluations are difficult to manipulate by assigning higher grades or reducing course requirements for students.  This empirical study finds that the teaching methods employed by the professor are the most important component to teaching effectiveness.   Administering fair examinations and treating students with respect were additional statistically significant variables.  Actual grades given by the professor and anticipated grades earned by students were not statistically significant in any model specification.   Student evaluations of their teachers and professors (SET) have served as the basis for numerous studies in the teaching literature (Cashin, 1995).  Importantly, most of the studies confirm that evaluations are generally valid and reliable and serve as good predictors of how much students actually learn in class (Cohen, 1981).  Student evaluations have been shown to be more robust predictors of performance than colleague ratings or other forms of peer review (Cashin, 1995). Student evaluations have also been shown to be statistically reliable and consistent over time. Surprisingly, students tend to give higher ratings to professors who teach academically rigorous courses (Marsh, 1984).  Students’ prior attitudes toward the course material and the level of enthusiasm and class preparation by the professor have also been found to have a positive significant impact on evaluations (Marsh, 1984).  The time of day the class section is taught and the physical attractiveness of the professor have been found to be insignificant in most studies.


The Application of Knowledge Management and Customer Relationship Management of ROC Government

Dr. Li-Hsing Ho and Chen-Chia Chuang, Chung Hua University, Taiwan



 The advent of the knowledge-base economy had fostered a rapid transformation of the traditional economy market structure; hence, enormous reforms had been noted in every aspect of the economy, from market demand, production methods, marketing techniques, to modes of transaction. Traditional production practices, marketing techniques and conditions no longer follow a fixed model or necessary moneymaking pattern; as a result, innovation and reform had superceded productivity and taken more significant roles in terms of economic development. Thus, knowledge becomes the foundation and core of the new economy of the 21st Century. The war driven by the knowledge-base economy and pivoting around reforms has slowly taken shape, as well as forced a change in the competition and liaison between nations, between governments and enterprises, and between governments and their people. The most evident trend in this new course is that the important player is the entity that could control the customer.  Other major concerns of the business and government sectors in this regard include the understanding and ascertainment of the Customer Relationship Management of the feasibility of the theories and practical application of the construction models, the effective utilization of information technology auxiliary concepts, the analysis and understanding of customer demands, the understanding of the capacity of the internal customer support departments of enterprises for customer service purposes. The studies aim to upgrade the customer service efficiency and capacity of the various departments of an enterprise, and through the resolution of problems that experience could not accumulate or transfer, reduce the service manpower and costs of enterprises.


Educational Marketing of Transnational Education in Asia

Dr. Jack Fei Yang, Hsing-Kuo University, Taiwan

Dr. Ching-Mei Hsiao, Hsing-Kuo University, Taiwan



 Whether from an economic, political, or social point of view, higher education has been a key to raising individual standard of living and overall quality of life. For many underdeveloped countries, there is a strong need for educational opportunities from institutions in developed countries committed to international service. Higher education leaders need to have more international visions of service; education leaders in highly industrialized nations need to integrate international and intercultural dimensions into teaching, research, and service (Bloom, 2002; IAU, 2003a).  In 1995, the World Trade Organization (WTO) liberalized trade in educational service through the General Agreement of Trade in Service (GATS), the first legal trade agreement that focused exclusively on trade in services (WTO, 2003). These agreements have been brought about in part because of the demand for educational opportunities and services among different nations and institutions. Education is one of the 12 service sectors covered by GATS. There are 12 service sectors including business, communication, construction and engineering, distribution, education, environment, financial, health, tourism and travel, recreation, cultural and sporting, and transport (Knight, 2002 ; Varoglu, 2002; WTO, 2003). GATS proponents have believed that GATS can provide economic gains and greater student access to help meet increasing educational demands (Knight, 2002).


The Study on the Vitality Index of Organization for an Air Conditioning Factory

Dr. Shing-Ko Liang and Hsiao-Chi Ling, Doctoral Student, National Chiao-Tung University, Taiwan

Jin-Jung Huang, Merck Display Technologies Ltd.



 The research introduced the concepts of “life” and “death” into analyses and diagnoses of operation of the organization and constructed an index of evaluation of “vitality” to provide operators with a different perspective to the evaluation model. The exploration of conception of vitality index of organization will help people inside and outside of the organization to evaluate it. Like a doctor who examines human body, this research could find the reason why the organization is underperforming and take remedial action.  The results found that by taking advantage of Analytic Hierarchy Process (AHP) to analyze, we could obtain weighted indexes of evaluation of vitality and figure out importance and orders of individual systems for maintaining case life and understand the extent to which the functioning of individual systems can provide operators with a reference.  In recent years, the conditions for the survival of business operations have been fluctuating. In the past, the philosophy of business operation was that they input resources and use them in the most effective way and improve productivity. Then they plan strategies to secure competitive advantages and strengthen competitiveness over limited resources.  With the increasing number of factory closings and the deteriorating environment of operation, the business management should not only emphasize “productivity” and “competitiveness” but also consider if there is any better benchmark for evaluation and improve the operation. Therefore, maintaining sustainable survival should be an urgent topic for each business organization. Sing-Ko (1998, 2002) argued that the two concepts of “system development” and “vitality” should be considered in pursuing an organization’s sustainable existence.


Cultural Diversities Between Singapore and Australia:  An Analysis on Consumption Behavior

Kritika Kongsompong, Ph.D., Chulalongkorn University, Bangkok, Thailand



 This study investigates the potential differences in consumer behavior in two cultural settings.  Of particular interest, the research investigates the relationship between the amount of social influences that occurs in purchasing decisions and people’s orientation toward locus of control.  This construct has widely been recognized as a factor capable of explaining important dimensions of consumer decision making.  The results show that men and women from the collectivist country (namely Singapore) exhibit more external locus of control tendencies than men and women from a typical individualist country (Australia).  Thus, the latter group is found to exhibit a greater degree of internal locus of control in buying situations.  This study also reports that Singaporean men and women are more responsive to social influence in a hypothetical buying situation than that of their Western counterparts.  Managerial implications are discussed and direction of future research is also recommended.   There has been an explosion of research on a variety of consumer behavior topics over the last twenty years.  The topic that is highly of interest in the past few years, however, concerns the elements that may effect purchasing decisions.  Typical buying decisions are subject to influence from a variety of sources:  biological, personal, commercial, public and personal experiential.  The relative impact of these sources will vary based on several factors, some personal to the consumer, others related to the product/service and the nature of buying situation.  Marketing efforts, therefore, should also focus on understanding the nature and impact of these influences since they can affect virtually all aspects of the marketing mix.  International marketers must go further to understand the similarities and differences that exist across their markets with regard to the relative impact of the various sources of influence and devise their marketing strategy and tactics accordingly. 


Retail Employment: An Evaluation of Supermarket Part-time Work in London, UK

Ola Shittu, Barking College, London, UK

Ogenyi Omar, Ph.D., University of Hertfordshire, Hatfield, UK



 The UK food retail sector continues to make enormous impact in the social and economic life of the UK population. The sector has continued to be in the forefront of labour market employment especially in terms of part-time workers’ development. This research paper investigates food retailers’ reasons for increasing use of part-time workforce; and peoples’ willingness to engage in part-time employment. A random sample of senior retail managers and part-time workers were interviewed for the study. The findings suggest that food retailers’ increasing use of part-time workforce is for commercial gain. People who engage in part-time work do so for a variety of reasons including labour market constraints. We conclude that although part-time working may be the choice of some people, however, it is uneconomical for others. Our recommendation is that food retailers should consider the opinion of individual employees in their recruitment policy to ensure fair play.


Legal Liability Risk for Enterprise R&D: The Case of High Tech Industry in Taiwan

Min-Sun Horng, Ph.D., National Kaohsiung First University of Science and Technology, Taiwan

Yung-Wang Chang, Ph.D. candidate, National Kaohsiung First University of Science and Technology and Lecturer, Meiho Institute of Technology, Taiwan

Yu Lin, MBA, National Kaohsiung First University of Science and Technology, Taiwan



 The purpose of this article is to discuss the legal liability risk for enterprise R&D. Though some enterprises now begin to focus on the concept and operation of risk management, relevant legal risks of enterprises are barely discussed and paid attention to among them. However, such legal risks may result in a large amount of compensation, fines, loss of business reputation, or criminal responsibility, etc., even suspension or shutting down of enterprise. Thus, the legal risk is a crucial and interesting issue. This article, from the angle of enterprise's risk management, tries to introduce the various types of legal risks in the external operation and internal management behaviors of domestic enterprises from studying the exiting documents and regulations first. Then, it emphasizes the legal risks arising from conducts of researching and developing, as well as the monetary liability for these conducts, which are difficult to predict in advance, by analyzing their backgrounds in Taiwan. Finally, from the aspect of risk management, it is to research how to plan and take precaution ahead instead of taking legal procedures such as the lawsuit, arbitration, etc. after things happened. This article can contribute to the enterprise determining the legal risk in its business activities to avoid or reduce losses.


Implementation of Multiple Enrolment Programs Affecting Academic Achievement: An Example from St. John’s University, Taiwan

Chin-Chia Hsu, Doctoral Student, National Taiwan University, Taiwan, St. John’s University, Taiwan

Dr. Chih-Hung Wu, Takming College, Taiwan

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



 This research aims to explore how multiple enrollment programs are related to academic achievements attained in Universities. It is also intended to be used as a reference for reforming national education policy. The results will also help schools to decide on different recruitment channels and appropriate quotas for each. This research used students, on both two and four year courses, at St John’s University, Taiwan with the administrative data system as the source of the students’ grades and records. We identified the different enrollment channels, the basic population statistics of the students and explored if there was differences in the grades of students enrolling via different channels. The results of the research show that: (1) the greatest number of students, in the Institute came after passing the national government’s entrance examination this is followed by those recommended and selected, and the least are those students who applied directly to the school; (2) students who entered the institutes by passing the national entrance examination have better grades than students from other enrollment channels; (3) in terms of performance during their time at the institution, students who entered school based on by athletic achievement show a downward trend in performance.


Consumer Adoption of the Internet as a Channel:  The Influence of Driving and Inhibiting Factors

Dr. Chien-Huang Lin, National Central University, Taiwan

Shu-Fen Yu, Ph.D. candidate, National Central University, Taiwan



 While the number of consumers shopping on the Internet and the volume of their purchases increase, research on what drives consumers to use this innovation has been inadequate. For companies incline to use the Internet as a distribution channel, they need to understand what factors make consumers to use or not to use this innovation for information searching and ordering. A framework including driving and inhibiting factors is proposed to examine their influence on consumers’ attitude for using the Internet as a channel. Four constructs, perceived usefulness, anxiety, playfulness, and novelty seeking are discussed and the moderating role of novelty seeking is explored. The proposed framework provides the possibility of direct comparison between consumers’ attitude toward information searching and ordering simultaneously, and examining the tendency of novelty seeking as a moderator in Internet adoption behavior..  The Internet and the World Wide Web (WWW or the Web) in particular, represents a recent technological innovation that has a profound impact on all facets of people’s lives. The potential of the Internet for businesses to conduct electronic commerce has received greater attention in the literature (Alba et al., 1997; Peterson, Balasubramanian, and Bronnenberg, 1997). In fact, the rapid growth of online retailing has created a vibrant market space and competition with all other shopping channels. It not only reshapes consumers’ shopping habits but also changes distribution channel like no other environmental force since the industrial revolution. With rapid advances in interactive technology and the growing popularity of the Internet, Internet shopping has been touted as the next revolution in direct marketing.


The Seller’s All-Units Quantity Discounts: Single and Multiple Buyers’ Cases

Dr. Esin Sadikoglu, Gebze Institute of Technology, Turkey



 Suppliers offer quantity discounts with the optimal price breaks and the corresponding discount rates to the customers in order to encourage the buyers to revise their order policies. The objective of this study was to analyze quantity discounts schedules from the seller’s point of view and to consider multiple buyers’ case. The study used both Harris’s EOQ model and the All-units Quantity Discount model in development of the seller’s design of quantity discounts model and designed an efficient all-units quantity discount schedule that provides a win-win situation for both the seller and the buyer. This study also provides a sequential solution for the seller’s design of quantity discounts considering multiple buyers’ case and proposes an efficient, heuristic, and iterative computational procedure of the seller’s common all-units quantity discounts schedule, which mutually advantages both the seller and buyers.   It is not uncommon for a typical enterprise to have 30% of its current assets and as much as 90% of its working capital invested in inventory (Steven, 1996). Proper management of inventories may have a significant effect on the managerial performance of the companies. There exist different types of quantity discounts schedules such as all-units, incremental, and carload discount schedules. There is also business volume discount in which discount is applied according to the dollar volume, which the buyer purchases over a certain period of time (Benton et al., 1996). Quantity discount schedules are equivalent to each other in terms of providing the same benefit to both the seller and buyer assuming that the seller knows the buyer’s relevant cost parameters with certainty given the buyer’s profit improvement requirement (Weng, 1995). Therefore, determining terms of either all-units or incremental quantity discount schedule is advised rather than the selection of the type of quantity discount schedule from the seller’s managerial perspective.


Less is More: How Scarcity Influences Consumers’ Value Perceptions and Purchase Intents through Mediating Variables

Dr. Couchen Wu and San-san Hsing, National Taiwan University of Science and Technology, Taiwan



 In the world of applied marketing, scarcity appeal is an important strategy (Brannon and McCabe, 2001). Prior studies have examined scarcity effects by single tests, there is no research on simultaneous impact of multiple mediating variables that sufficiently explains scarcity’s value-enhancement. This article used SEM (Structural Equation Modeling) to develop an integrated model to examine how scarcity influences consumers’ value perceptions and purchase intents through the use of more complete mediating mechanisms—assumed expensiveness, perceived quality, perceived symbolic benefits, and perceived monetary sacrifice. Then it compares the extent to which mediating variables play a role in influencing consumers’ assessments of a scarcity cue and how those assessments, in turn, influence purchase intentions. The study provides support for the model. Research findings suggest that a scarcity strategy which includes the use of high pricing and an emphasis on quality-expressive persuasion will enhance valuation and purchase intent.


A Re-examination of Technology Transfer in Sino-foreign Joint Ventures after China’s WTO Accession

Chun Jiang, Ph.D., University of New England, Australia



 Although technology transfer in Sino-foreign joint ventures has been extensively investigated by both of Chinese and Western scholars, China’s WTO accession and continuously increased FDI absorption will significantly accelerate the competitiveness in Chinese market. Accordingly, MNCs are supposed to change their strategies in terms of technology transfer in compliance with more competitive environment in Chinese business context. Therefore, this research empirically investigates the new changes of technology transfer in Sino-foreign joint ventures given such new circumstances. Through adopting the qualitative research approaches: in-depth interview and case study, the author extends the theory of technology transfer in Sino-foreign joint ventures by means of advocating some new propositions   Although plenty of strategic objectives have been suggested to explain the motivations for the formation of IJVs, i.e. reducing investment risk, economies of scale, accessing potential market, etc (Beamish and Banks, 1987; Contractor, 1989; Hennart, 1988), providing a platform for organizational learning /technology transfer is extremely important in developing countries, especially in China (Buckley, 2004; Tsang, 1999 & 2001; Wong, 2002; Si, 1999). Previous literatures identified that technology transfer in Sino-foreign joint ventures was problematic due to its underdeveloped institutional environment and low legal protection of intellectual property. Foreign partners are not willing to transfer the technology into IJVs for avoiding the risk of technology spillover (Buckley, 2004; Thompson, 2003; Wong, 2001, Young, 1997).


Analyses of Operations of Ditch Container Wharf and Container Yard

Dr. Yu-Ping Tu, Shu Te University, Taiwan, ROC

Ya-Fu Chang, Doctoral Student, Chang Jung Christian University, Taiwan, ROC



 In the 1960s, American shipping company Sea-Land began to use containers in sea transportation and, in recent years, the development of large-capacity containerships has been the trend in shipbuilding. It is necessary for existing container ports to take proper measures at a time when almost every containership company is building mega-containerships. With mega-containerships taking berth at the container terminal of a port, the pattern of operation of mega-container terminals will be an important factor affecting port operation. However, there has been little research on the subject. This study applied the concept of computer simulation to analyze operations of ditch wharfs and container yards in future mega-container terminals. Simulation software was used to construct different models of operation and examine possible situations encountered by operational systems of container terminals. The research found that shipside and gate operations might be accountable in part for delays of transportation in container terminals. If each operation subsystem could meet the standards of operational efficiency for mega-containership, the delays of container transportation might be reduced and the operational efficiency of the entire container terminal logistics might be enhanced.  In order to reduce operational costs at ports, a shipping company may consolidate routes and select a few hubs to berth in calculating total global shipping cost. Thus, more and more containerships are mega-containerships, defined as vessels having capacities of at least 8,000 ten-foot equivalent units (TEUs), and tens of thousands of containers will begin to flow into container terminals at ports. But, as the containers must be consolidated, stored, and transshipped, containerships of more than 10,000 TEUs, limited by depth of water and container yard, cannot be accommodated at every port. Therefore, mega-containerships will berth at only a few ports in the world and then consolidate and transship containers from feeder ports to a few hubs (De Monie, 1997).


Narrow Framing, Loss Aversion and Equity Home Bias

Tzu-Hui Pan, Ph.D. Candidate, National Taiwan University, Taiwan



 This study attempts to integrate narrow framing and loss aversion effects into the utility function and uses the revised utility function to solve the equity home bias puzzle. The equilibrium problem is solved using the log liner approximation method. The findings of this study indicate that without narrow framing and loss aversion effects, the optimal portfolio choices only include the myopic demand component. After incorporating narrow framing and loss aversion effects in the utility function, the optimal portfolio choices include both the myopic and hedging demand components. To hedge against narrow framing and loss aversion effects, domestic investors invest disproportionately in home-country equity assets. Results of this study merely satisfy the empirical phenomenon and successfully solve the equity home bias puzzle.  Despite the rapid integration of global financial markets, few investors diversify their holdings internationally as financial theory recommends. Traditional financial portfolio theory states that non-systematic risk can be virtually eliminated via diversification. Since the correlation coefficient of returns between countries is not united, international portfolio allocation can increase investment efficiency. However, empirical results demonstrate that most investors invest too large a proportion of their savings in home-country equity assets. Academics term this phenomenon the “equity home bias puzzle”. According to French and Poterba (1991) and Lewis (1999), the lack of diversification phenomenon that individuals invest too little in foreign securities is commonly existed. Some psychological economists attempt to use information asymmetry to explain this phenomenon. According to these psychological studies, the greatest risk investors face is that of the unknown. Foreign capital markets thus tend to be perceived as very risky by investors. Meanwhile, domestic investors find it easier to analyze the domestic assets. Notably, domestic residents find it much more difficult to analyze financial statements published by foreign firms. Therefore domestic residents invest disproportionately in domestic equity markets rather than foreign markets.


Intra-Day and Inter-Day Price Volatility in the US and European Equity Markets: A Measure of Trading Friction

Dr. Deniz Ozenbas, Montclair State University, NJ



 The ability of an equity market to accommodate a series of trades and incorporate information into stock prices with minimal price volatility is an important aspect of its quality. We use return series with various differencing intervals that are as short as half-hour and as long as two weeks to investigate the short-term volatility accentuation in five equity markets: Nasdaq and the NYSE in the US, and the London Stock Exchange, Deutsche Boerse and Euronext Paris in Europe. Variance-ratio statistics are employed and results confirm an intra-day reverse J-shaped pattern of half-hour volatility. In addition, we find evidence of an intra-week pattern in volatility with higher volatility on Monday opening periods and Friday closing periods. The evidence also suggests an accentuation of volatility during longer periods, such as 24-hour intervals. This accentuation appears to subside when we extend our differencing interval to longer periods such as one-week or two-week returns.   The ability of an equity market to accommodate a series of trades and incorporate new information into stock prices with minimal price volatility is an important aspect of its quality.  If the price discovery process is marked by price swings, runs and reversals, in other words if the price discovery process is not efficient, then short-term volatility will be heightened in the market.  Heightened short-term volatility makes trading more difficult and hence may scare liquidity away. Furthermore, increased short-term volatility can invite more speculative short-term trading into the market (day trading).  Even though some traders might be able to profit from it, high short-term volatility is costly to the market in aggregate.  It discourages trades, lowers portfolio performance for most traders and makes portfolio returns more uncertain for everybody.  This study investigates short-term price volatility accentuation both inter-temporally and across several stock markets, and assesses it as an inverse measure of equity market quality.  We investigate stock price volatility in several differencing intervals that are as short as half-hour to as long as two weeks in five different equity markets in the US and in Europe.  In addition, we investigate whether  there are any day-of-the-week effects in volatility.


Exploring the Relationships between Total Quality Management (TQM), Strategic Control Systems (SCS) and Organizational Performance (OP) Using a SEM Framework

Zakaria Abas, Universiti Utara Malaysia

Zulnaidi Yaacob, Universiti Sains Malaysia



 Many highly competitive and world class organizations have implemented TQM strategy in order to continually seeking better performance. However, many previous studies have revealed inconsistent and contradictory findings concerning the relationship between TQM and performance. Given that, this paper discusses the interrelationships between Total Quality Management (TQM), Strategic Control Systems (SCS) and organizational performance (OP). As a response to the call for utilizing second generation of statistical analysis, which is structural equation modeling (SEM) in management accounting research, a SEM framework is developed. According to this framework, the implementation of TQM has a direct impact on OP and SCS as well as indirect impact on OP through use of SCS. The framework suggested here represent the first attempted that depicting the relationships between TQM, SCS and OP using SEM framework. Given that, this paper contributes to the knowledge in terms of developing SEM framework for understanding the strategy-control-performance relationship.


Utility Function and Risk Taking: An Experiment

Esin Okay Örerler, Ph.D., Istanbul Commerce University, Turkey

Dicle Taþpýnar, Ph.D., Istanbul Commerce University, Turkey



 Investing by its very nature is an emotional business.  Few investors have the self-knowledge, emotional stamina or self-control to make rational, intelligent and profitable decisions, particularly in times of uncertainty.  The main purpose of this study is to examine the style of financial risk taking, and in particular the psychological profiles associated with different risk taking behaviours. Behavioural economics and finance increases the explanatory power of models by providing it with more realistic psychological foundations. The assumption of behavioural risk taking leads to three fundamental approaches to risk:  Risk avoiders abstain from investments they perceive to contain risk, risk reducers participate in high risk investments in spite of the risks involved, and risk optimisers who are motivated by the exposure to risk.  This study identifies and characterizes individual investors based on their shared investing attitudes and behaviour. It finds out evidence of a behavioural search for investments based on a questionnaire approach suggested by LeBaron, Farrelly and Gula (1989). The approach to risk is studied by a psychometric measure, “Risk Assessment Inventory" prepared for the Turkish investors.  The research data is analyzed using statistical techniques, namely frequency, percent, arithmetic mean, chi-square independent test, non-linear principle component analysis and t-test.  The result of the research data have shown that there are not much significant differences between the variables related to the amount of investment when they are analyzed with respect to the dimensions of risk assessments.


Employee Theft: From Behavioural Causation and Prevention to Managerial Detection and Remedies

Dr Steven .H. Appelbaum, Professor of Management and Concordia University Research Chair

Jennifer Cottin, MBA, Remy Paré, MBA, and Barbara T. Shapiro, MSS

John Molson School of Business, Concordia University, Montreal, Quebec, Canada



 The purpose of this article is to conduct a literary review of current research in the area of employee theft.  The topic will be examined/analyzed in a logical stepwise fashion. Beginning with the actors to determine who they are and why they steal.  Next, various methods that have been used to prevent theft in the workplace will be presented.   Understanding the necessity of detection techniques and the importance of reporting theft is underlined, followed by a discussion of the direct and associated consequences of employee theft.  The research will be summarized with suggestions to benefit managers.   Employee theft is defined by Greenberg (1990) as “any unauthorized appropriation of company property by employees either for one’s own use or for sale to another”.  Expressions such as “inventory shrinkage”, “spoilage”, “pilferage”, “shortage”, “unaccounted loss” and “defalcation” are often used as a replacement for “employee theft”.  These expressions are often used by managers because they have an attitude of denial and avoid the image of criminal activity (Oliphant & Oliphant, 2001).  Theft can have the form of top management fraud, workers compensation fraud (Wang & Kleiner, 2005), embezzling cash, taking office supplies and equipment, making personal photocopies and phone calls (Gross-Schaeffer, 2000). Employee theft is a serious problem that must be addressed by management because it results in a loss of approximately $ 200 billion annually in the United States alone.  Moreover, statistics from the United States Chamber of Commerce indicate that 50% of all small company failures in the first year of business can be attributed to employee theft (Business Strategy, 1995).  Though the media depicts fraud and employee theft primarily in large companies like Enron and WorldCom, the phenomenon also exists in small businesses.  The not-for-profit sector is not exempt, which may explain why many not-for-profit organizations have disappeared throughout the years. Managers must separate theft into two categories; theft committed by customers, and theft committed by employees, in order to tackle the problem correctly.  Theft within a company must be further differentiated by managers as isolated incidents versus those resulting from the corporate culture.  To effectively deal with this issue, management must take a holistic approach to examining employee theft by reviewing human resources hiring policies, completing proper reference checks and ensuring that disciplinary actions are taken against offenders.  Though profit is not a bottom line in not-for-profit or charitable organizations, management must see loss from employee theft as impeding the achievement of the organization’s goals and should therefore strive to reduce it by every means possible.


Expatriate Success in China:  Impact of Personal and Situational Factors

David Erbacher, Mt. Eliza Business School, Beijing, People’s Republic of China

Dr. Brian D’Netto, University of South Australia, Adelaide, Australia

Dr. Juan España, National University, La Jolla, California



 The success of international ventures depends crucially on the performance of key expatriate personnel. These expatriates must often operate in a foreign country with little guidance from their corporate office. In view of the significant impact that expatriate decisions have on the organization, the selection and appointment of these individuals becomes very important. This paper seeks to identify personal and situational factors associated with expatriate success in the People’s Republic of China. The results indicate that performance management, training, organizational support, willingness to relocate and strength of the relationship between the expatriate and the firm were significantly associated with expatriate success. The implications of these findings are discussed.  In an era of increasing competition, many organizations seek growth through expansion into foreign markets. Theories of competitive advantage stress the need for organizations to transfer skills and develop organizational staff. The use of expatriates is an important human resource option which enables skill transfer (Black et al,1999; Brett and Stroh, 1995 ). Historically, expatriate failure rates have been quite high (Black, 1988; Tung, 1981). During the posting phase, expatriates may take a prolonged period of time to adjust, exhibit poor behaviors, be withdrawn or return home early, or may 'brown out', completing their assignment in a low state of effectiveness (Forster, 1997). Expatriates who are unable to adjust may be disruptive, have personal goals poorly aligned with organizational goals, may reject local culture and resist localization efforts (Hailey, 1996). The costs of poor adjustment include unsuccessful expatriate performance, low productivity in the overseas operation, problems with client relations and operational inefficiency (Mendenhall & Oddou, 1985). Thus, recruitment and selection of expatriates becomes important.


On Interest Free Investment Partnerships: Theoretical Foundations 

Dr. Tarek H. Selim, The American University in Cairo



 In this paper, an interest-free investment partnership based on profit and loss sharing is characterized on the Capital Asset Pricing Model (CAPM) yielding several interesting hypotheses. A comparison between investment partnerships and conventional risk management is deduced. There are four major findings. First, an interest-free financing partnership based on complementary capital is proven to necessarily yield a lower beta-risk of investments. Second, in order for the above conclusion to hold, capital lenders (such as banks) must require a minimum partnership share inversely proportional to project risk and increasing with opportunity cost of capital. Third, the sum of lender's share and relative risk level balances to unity at equilibrium. Hence, tradeoffs exist in  risk-shares and not in risk-returns. Fourth, without accounting for inflation, and in contrast to predetermined fixed interest, a maximin strategy of financing partnerships (maximum return with minimum risk) imply an existence of an optimum zero risk-free rate. Several implications on the conduct of partnership financing are discussed.  It is the ultimate purpose of this paper to outline theoretical foundations for an interest free investment partnership based on Profit/Loss Sharing. This is done by utilization of the Capital Asset Pricing Model (CAPM). Risk-return tradeoffs are undertaken for both partnership financing based on interest free sharing contracts and for conventional interest-based investments. Several interesting commonalities and differences between the two methods are illustrated. Section 2 discusses the conventional CAPM model, its conditions, and methodology. Section 3 provides an explicit theoretical account of partnership financing by augmenting the CAPM model towards strict constraints of a  no interest partnership. Section 4 summarizes the findings of the paper.  The importance of a financial system in any society occurs in the vital role that the financial system plays in creating incentives to reach an efficient allocation of resources, and to provide the required financial service intermediation in order to channel funds from savers to borrowers and to facilitate financial and money flow movements among agents in the economic system. Such facilitation requires an efficient re-allocation of resources from agents who have a surplus of financial resources to agents who have scarcity of financial resources. 


The Czech Republic: Is It a Global Player?

Dr. J. Kim DeDee,  University of Wisconsin Oshkosh, Wisconsin

Lynda S. DeDee, University of Wisconsin Oshkosh, Wisconsin



 Despite the interest in global business, scholars give limited attention to the transition economies of Central and Eastern Europe (CEE). This article provides a framework of the Czech Republic, a key nation to go from command economics to market driven economics as applicable to U.S. firms.  Crafting a set of competitive advantages requires management to identify the variability of evolving markets, to understand the needs of those markets, and then to deliver products and services at the right quality, quantity, price, and timing to meet or surpass most demands (McDougal, 1989; Morris & Paul, 1987). Entrepreneurial firms intent on a global presence establish ventures that engage in traditional or emerging international markets, which, in certain cases, could involve the ongoing transition economies of Central and Eastern Europe (CEE). Taking advantage of the growing potentials there, while managing for real and perceived risk, calls for approaches that may differ significantly from standard U.S. practice. Considering the merits and differences of the market potentials of CEE countries, the Czech Republic (CR) stands out as a leader in the ongoing transition from centralized government command economics to market driven demand economics. The authors first examine how the government of Czechoslovakia, and later the Czech Republic, when given the opportunity, laid the cornerstone for a private sector economy and later acted as a host country for free market capitalists worldwide. Next, they identify the most salient long-range characteristics of the Czech transition economy, and finally, they explore important dimensions of the Czech market and their implications to U.S. business. From an historical viewpoint, both perceived and real attributes of a nation can be argued as necessary for understanding that nation as a potential market.


Evaluating the Organizational Performance of Taiwanese Hospitals Using the Fuzzy Analytic Hierarchy Process

Cheng-Ru Wu, Yuanpei University of Science and Technology, Taiwan, R.O.C.

Che-Wei Chang, Yuanpei University of Science and Technology, Taiwan, R.O.C.

Hung-Lung Lin, Yuanpei University of Science and Technology, Taiwan, R.O.C.



 Enhanced living standards and educational levels have fostered a strong public health consciousness, fuelling the development of Taiwan’s medical sector. Effective hospital operations definitely contribute to the maturation of the home care, pharmaceutical and health food sectors. Therefore, such sectors must assess the operations and organizational performance of hospitals. However, conventional evaluation models for organizational performance are generally too subjective and are focused mainly on eliminating defects rather than providing information regarding competition or cooperative sectors, knowledge of which is vital to enhancing organizational performance or operations. The inability of home care, pharmaceutical or health food sectors to evaluate the organizational performance of hospitals makes it impossible not only to understand hospital operations, but also to select an appropriate hospital to cooperate with. This work presents an AHP-based approach to resolve the uncertainty and imprecision of service evaluations during pre-negotiation stages, where the comparison judgments of a decision maker are represented as fuzzy triangular numbers. A novel fuzzy prioritization method, which derives crisp priorities (criteria weights and scores of alternatives) from consistent and inconsistent fuzzy comparison matrices, is also proposed. The fuzzy analytic hierarchy process (FAHP)-based decision-making method can provide decision makers in related medical sectors or hospital administrators with a valuable reference for evaluating the organizational performance of hospitals to either identify the most appropriate hospitals for collaboration or invest in nearby stores of interest such as pharmacies or health food stores.  Importantly, the proposed model can facilitate the medical sector in assessing the organizational performance of hospitals, making it highly applicable for academic and commercial purposes.


What Is Business Cybernetics?

Dr. Vojko Potocan,  University of Maribor, Maribor, Slovenia

Dr. Matjaz Mulej, University of Maribor, Maribor, Slovenia



 Cybernetics and Systems Theories were created six decades ago in order to help humans attain more holism in an era of unavoidable specialization and overspecialization. Both theories resulted from interdisciplinary team work. Today, they are applied more inside traditional disciplines and professions than on an interdisciplinary basis. Though, we could not locate business cybernetics. Here, we are offering an introductory provocation about it. Business Cybernetics is supposed to deal with management / control of business aspects of activities and attributes of humans and their organizations, all way from families to United Nations organization, and to support requisite holism of thinking, decision making, and action. We would like to contribute from our (economic, organizational, systems, and innovation management) education and our experience the following essay for those interested in the question raised in the title. In our present contribution we wish to discuss the benefits and weaknesses of implementing the interdependent systems theories, and business cybernetics for research and the management of organizations as Business Systems (BSs). This is a next step after our previous contributions. 


Leadership Style and Innovation Ability: An Empirical Study of Taiwanese Wire and Cable Companies

Dr. Yuan-Duen Lee, Chang-Jung Christian University, Taiwan

Huan-Ming Chang, Doctoral Student, Chang-Jung Christian University, Taiwan



 Innovation ability and leadership are two basic functions. This paper studies employees’ views of the relationship between enterprise innovation ability and management leadership styles. Utilizing a sample of wire and cable companies in Taiwan, the study analyzes the questionnaire responses of 339 employees from ten publicly listed companies. The study adopts ‘innovation ability’ and ‘leadership style’ as its two dimensions, and then utilizes descriptive statistics and factor analysis to identify the major factors of the dimensions. Canonical correlation analysis is then used to discover the relationships between the dimensions. The study concludes that: (1) transformational leadership style is more acceptable to employees; and (2) there is a correlation between innovation ability and leadership style. The paper concludes with management implications and suggestions for future study.  The Taiwanese wire and cable industry has been in existence for more than half of century. During this time, business management styles have been conservative and stable as a result of prevailing government policy of national protection. However, with the expected changes that will accompany World Trade Organization (WTO) compliance, this industry will face increasing competition as a result of the decline of question of how to improve the performance of this industry in these changing circumstances is a vital issue for Taiwan. In this regards, leadership style and innovation ability will be crucial.


Is Malaysia’s Manufacturing Productivity Growth Input Driven?

Dr. Elsadig Musa Ahmed, Multimedia University, Melaka, Malaysia



 Productivity indicators within the manufacturing sector for the period 1959-2001 were compared. In order to study the effects of government policies in improving the sector’s productivity growth, the study period was split into three phases, viz. 1971-1979, 1980-1986 and 1987-2001, which corresponded with the major policy changes. Two models were generated from the production functions to measure manufacturing sector productivity growth. The first model is an extensive growth theory model and the second one is an intensive growth theory model. The extensive theory model had a gap that cast doubt in the results. A statistical analysis was provided to close this gap. The results show a slowdown in the contribution of Total Factor Productivity (TFP) growth and negative growth of labour productivity of the sector. A negative impact of quality of inputs used by the sector was observed in the contribution of TFP and labour productivity growth in comparison with other productivity indictors of the sector. This paper found that productivity growth of Malaysia’s manufacturing sector is input driven rather than total factor productivity driven.


Information Technology Business Value: Effects of IT Usage on Labor Productivity

Dr. Aylin Ataay, Galatasaray University, Istanbul, Turkey



 Despite significant progress in evaluating the productivity payoffs from Information Technologies (IT), approaches used in measuring IT business values are not universally accepted and the conclusions drawn from current research are arguable. This very exploratory paper aimed to reveal organizational experiences of companies with IT usage in a developing country and understand the relationship between labor productivity and technology usage level. We proposed that objective and perceived labor productivity level of the firms will vary according to IT usage level in different value creating activities of the firm. The results suggest that electronic linkages between external partners such as customers and suppliers did not play a significant role on firms’ actual labor productivity. However, we found that online business scorecard and procedures practices were two of the electronically supported knowledge and information management systems that could contribute to the operational performance of the firms and differentiate more productive companies from others. On the other hand, we couldn’t find a significant correlation between objective and perceived measures of productivity. We can argue that operational improvements gained from applying IT within the organization did not translate to the objective measure of productivity.


Equality between the Monetary Multiplier and the Income Velocity of Money

Dr. José Villacís, San Pablo University, Madrid, Spain



 In the end, the only and eternal vocation of money is circulation. The money movement follows an opposite direction to the circulation of goods. The movement of money related to income is known by economists as income velocity of money. It would be better to call it aggregate demand and, even better, monetary dynamics. The income multiplier measures the convergent multiplying expansion of income that takes place as a consequence of money circulation.  The same phenomenon is observed, that is monetary movement, and therefore it is not advisable to use two concepts, or even less advisable to use two devices to name the same operation. It is not economically scientific or scientifically economic. Both concepts: income velocity and income multiplier represent the same activity.  The income velocity of money measures the times in which a unit of money finances a unit of income. This activity of money movement implies purchasing activities of net production or nominal income in the period. Therefore, a monetary mass circulating V times represents the total demand. Circulating is buying. Those who offer goods are demanding money and those offering money are demanding goods. The income multiplier, on the other hand, explains the total expansion taking place as a consequence of an initial strike of autonomous demand. This initial quantity of money, when it expands, finances increases in income and a total growth higher than the initial demand can be achieved. This expansion takes place due to money circulation (It cannot be other way). The statement that money circulates in income expansion implies that economic units are buying goods successively and constantly.


Practicing Ethics in Hr: Where’s the Action?

Dr. Maria G. Mackavey, Hellenic College, Brookline, Massachusetts



 Hr’s role has been changing over the past several years in ways that can compromise Hr’s ethical responses in organizations.  This article examines the current trends in Hr and discusses how to attune Hr practices to encourage, strengthen and defend hr practices that cultivate habits of moral affections and conduct in organizations.   A few years ago, David Ulrich and some of his students at the University of Chicago surveyed several hundred organizations to determine which aspects of hr were most valued.  The survey was sent to line managers and other members of the organization to whom hr provided services.  When the results were tallied, Ulrich et al discovered that by far – over 70% -- said that it was not hr’s ability to deliver the “goods” that they valued so much (although that was certainly ranked second in importance) as hr’s integrity.  Let me repeat this: integrity was listed as the most valued aspect of hr’s work in organizations!  The OED defines “integrity” as:


An Accounting Information System for Harmonization

Dr. Siva Sankaran, California State University, Northridge, CA

Dr. Dhia D. AlHashim, California State University, Northridge, CA



 Accounting harmonization seeks to bring together varied accounting systems and procedures into an orderly structure producing synergic results. With increasing globalization of the marketplace, international investors need access to financial statements that are comparable through accounting harmonization. Due to the large volume of data that harmonization generates, reporting companies would require database systems to store and distribute the multi-faceted data, and investors would need directory assistance with locating and analyzing this data over the Internet. This paper describes the distributed architecture of a Web-based accounting information system for harmonization that meets both of these requirements. A prototype has been implemented demonstrating the feasibility of the concept.  With increasing globalization of the marketplace, international investors need access to financial information based on harmonized accounting standards and procedures. This research builds a case for the adoption of harmonization in financial reporting and develops a Web-based accounting information system that assists with such harmonization. The paper is organized according to the following sections. First, we review the literature on accounting harmonization and discuss its importance. Second, we examine the international efforts currently under way in promoting its acceptance. Third, using workflow analysis, we develop an algorithm that identifies the design requirements for a harmonized Web-based computer system. In the section that follows, we describe the architecture and implementation of the prototype. We conclude with directions for future research.


Influencing Factors on the Innovation in Logistics Technologies for Logistics Service Providers in Taiwan

Dr. Chieh-Yu Lin, Chang Jung Christian University, Taiwan



 This paper will study the factors influencing the technological innovation for logistics service providers in Taiwan. More and more logistics companies in Taiwan began the adoption of technological innovation because of the governmental policy of global logistics. Questionnaire survey is used to study the technological innovation for logistics industry in Taiwan. The influencing factors are divided into three major parts: technological characteristics, organizational characteristics, and environmental characteristics. The method of regression analysis is used to study the influencing effects of these factors on innovation and it can be found that they have significant influences on the innovation in logistics technologies. In addition to the exploration of determinants of innovation, this paper also studies the development of technological innovation in the logistics industry in Taiwan. The innovation in logistics technologies can be classified into four types of technologies: data acquisition technologies, information technologies, warehousing technologies, and transportation technologies. Based on our researches about technological innovation for logistics service providers, logistics companies can plan better strategies to construct their technological innovation systems and to make them become innovation-based logistics service providers.


Performance Evaluation and Analysis of Guidance ISO14000 into Trades in Taiwan and China - Taking Traditional Industries Implementing PZB Mode as an Example

Dr. Yuan-Du Hsiao, National Chin-Yi Institute of Technology, Taiwan

Dr. Ay Su, Yuan Ze University, Taiwan

Chin-Te Lai, Yuan Ze University, Taiwan

Han-Jye Yang, Nan Kai Institute of Technology, Taiwan



 Since most cross-strait industries in Taiwan and China are traditional industries, there are successive problems of environmental pollution. In order to maintain the competitiveness of traditional industries on the market and encourage industrial circles to plan environmental improvement and pollution precautions from the interior of their organizations, ISO14000 has been enacted to protect the environment.  Also, in recent years, because many domestic factories have made an investment in China, the possible difficulties and benefit of promoting ISO14000 in China are crucial to domestic factories. First of all, this research collects the development situations and related documents of cross-strait traditional industries in Taiwan and China, focuses on the traditional industries that have passed ISO14000 certificate, designs questionnaires according to theories, and collects related information by questionnaire survey to understand the status quo of traditional industries promoting ISO14000, and then, analyzes the collected data by SPSS10.0 statistical software and studies the perception relation between factories and customers when promoting ISO14000.


Learning from Your Business Lectures: Using Stepwise Regression to Understand Course Evaluation Data

Kaleel Rahman, The University of Sydney, New South Wales, Australia



 Effective teaching in business schools is important because not only is “business administration” evaluated below average by students (Marks and O’Connell, 2003), but also business is one of the fastest growing academic fields, driven by strong industry demand both locally and internationally. This paper presents a case study from a pragmatic perspective, demonstrating an effective approach to using student evaluation data and gaining further insights into teaching practices in business schools. In understanding teaching evaluation data, “mean rating” is the norm in most cases. However, mean ratings can only be considered in isolation or relative to the mean ratings of other items. Whether a particular variable influences overall quality or satisfaction in a systematic fashion should be a key consideration when examining mean scores. Using a course evaluation dataset and stepwise regression technique on the SPSS statistical program, this paper provides a hands-on tool to use teaching evaluation data more effectively.   Seeking feedback on teaching is an important part of the process of course and teaching evaluation. The process of (a) gathering information about the impact of learning and of teaching practice on student learning, (b) analysing and interpreting this information, and (c) responding to and acting on the results, is valuable for several reasons. When effectively carried out and appropriately used, evaluation has the potential to enhance student learning and the student experience, to facilitate and inform our professional development as educators and to promote quality assurance and improvement (Ramsden and Dodds 1989). Accordingly, a majority of tertiary institutions use student evaluations as one of their most important measures of faculty teaching and course effectiveness.


Proposing Student Learning Performance in Physical Education by Applying Social Cognitive Theory

Heng-Hsiang Huang, Ching Kuo Institute of Management & Health, Taiwan

Dr. Chou-Kang Chiu, Ching Kuo Institute of Management & Health, Taiwan



 This study proposes a conceptual model in physical education based on Social Cognitive Theory that has been used to study computer learning performance. It is interesting to transplant this perspective of learning computers to student learning performance in physical education. In the model, student learning performance in physical education is affected directly by self-efficacy, while also influenced indirectly by self-efficacy via the mediation of outcome expectation. Meanwhile, self-efficacy and outcome expectation are also influenced simultaneously by both peer encouragement and teacher support. Finally, the discussion and limitation about the proposed model are also provided.   Proposing student learning performance in physical education by applying social cognitive theory.   Academic studies aimed at understanding student learning outcomes within the context of physical education (PE) have increased in the past decade (Standage, Duda, & Ntoumanis, 2005). Recognized by previous research as a principle vehicle for health promotion (Cavill, Biddle, & Sallis, 2001; Standage et al., 2005), school-based PE provides a context in which the health, social, and psychological gains linked with physical activity may be promoted to large numbers of students (Treasure, 1997). However, it is difficult to precisely evaluate students’ learning performance in PE (Treasure, 1997). In response to this fact, many countries around the globe have strongly recommended that school physical education (PE) teachers should play a critical role in enhancing students’ learning performance in PE as many students do not engage in organized PE programs outside campus (Treasure & Roberts, 1994). More specifically, most students choose not to take PE classes during their high school years after they met the minimal PE credit requirement for graduation, usually a half or one credit in most high schools (Chen & Ennis, 2004).


A Multilevel Exploration of Factors Influencing the Front-Line Employees’ Service Quality in International Tourist Hotels

Dr. Cheng-Ping Chang, Southern Taiwan University of Technology, Taiwan



 The hospitality industry is one of the most important sub-industries of tourism. Since severe competition has resulted in little variation among facilities, the quality of service is regarded as one of the main factors whether or not the business is operated successfully. This research stressed how the front-line employees of international tourist hotels promote customer satisfaction. We investigated thoroughly to determine if the personality traits of front-line employees and organizational conditions influence service attitude, and thus affect the service quality and possibility of customers’ patronage, to finally arrive at the target of sustainable management in hospitality industry. This study expects to give a proposition to the operators in this industry.  According to an analysis report of the World Tourism Organization (WTO), tourism has been the significant source of foreign exchange reserves in a country. The revenue from tourism increased from US$6,867 billion in 1960 to US$454,553 billion in 1999 a 6,620 percent increase. The WTO estimates that tourism populations will increase to 1,620 billion and the revenue will increase to US$2 quadrillion (million-million) in 2020.  The tourism industry covers hotels, restaurants, leisure/recreation, and travel agents. Our focus will be on international tourist hotels. Services of tourist hotels include lodging, dining, conference, exhibition, social contact, entertainment, beauty treatments, shopping, business information, postal and cable service. It is a synthetic service industry.  Since severe competition result in little variation of facilities, quality of service has been regarded as one of the main factors whether or not the business operates successfully. A survey from Lundberg & Walker (1993) indicated that customers are dissatisfied most with the service quality of hotels; parking, lodging and price are the secondary items they care about. Heskett (1987) studied the factors influencing service quality and found the problem centered on employees. Thus, good service quality from staff creates a competitive advantage. The international tourist hotel is the third-degree industry that stresses “contact with people,” aiming for good service and customer orientation, and believes that only the service quality can touch and keep customers. The perception of economic or monetary value the customers received when they positively accept the products and service, they knock the door continually or even enjoy very mush (Peppard, 2000).


Defined Benefit Pension Fund Accounting:  Relevancy, Clarity, and Consistency

Michael Bepristis, Old Dominion University, Norfolk, VA

Yin Xu, Old Dominion University, Norfolk, VA



 By reviewing the pension plans of five large companies, this paper suggests that the current pension practice is not consistent with fundamental accounting principles.  Data from selected companies’ annual reports indicate that it is very difficult for users to understand pension fund information because of an inherent flaw in current pension fund calculations and presentations.  Questions are raised regarding the reasonableness of measuring pension funds and the clarity of reporting pension information under the current pension accounting rules.  Possible solutions are also suggested to help improve the relevancy, clarity, and consistency of pension accounting standards.  These principles should also guide any revision of the pension fund accounting.  In the media reporting on financial matters, much of the attention has been focused on the fact that many of American pension funds are underfunded due to the declining of stock markets from the period of 2000 to 2002.  At General Motors Corporation alone, for example, the difference between the total value of pension plan assets and the amount needed to fund employee retirements has reached $25.4 billion (Thottam 2003).  The corporate pension funds not only provide a stable and predictable monetary source for retired employees, but also represent multi-billion dollar liabilities that threaten the very survival of the company.   In response to increasing pressure from the public, the FASB revised disclosure rules for pensions and issued SFAS No. 132 (revised 2003) to require companies, among other things, to make additional disclosures about the pension assets, obligations, cash flows, and net periodic benefit cost of defined benefit pension plans.  The newly issued statement does not change the measurement of those plans required by FASB Statement No. 87 and by other related FASB statements (i.e. SFAS No. 88 and SFAS No. 106) regarding employers’ accounting for pensions (FASB 2003b).


Tax Effect on Firm Valuation under Clean Surplus Accounting

Dr. Tao Zeng, Wilfrid Laurier University, Ontario, Canada



 In this paper, I examine how corporate taxation affects firm market valuation using clean surplus accounting. Based on Feltham-Ohlson (1995) market value measurement model, it is shown that, with corporate taxation, firm market value can be expressed as the bottom line value, i.e., book value, earnings, and cash flow, decreased by the present value of expected future tax payment. Under the new valuation framework, certain properties are examined: dividend policy is not irrelevant, and dividends do not displace firm market value on a dollar for dollar base; accounting methods matter, and firms will choose the accounting method that minimizes tax payment.  Feltham and Ohlson (1995) examine the relations between firm market value and accounting data under clean-surplus accounting in a neoclassical setting. I extend their work by adding corporate taxation. It is shown that, with corporate taxation, firm market value is expressed as a function of the bottom line value, i.e., book value, earnings, cash flows, and the present value of expected future tax payment. Under this framework, dividend policy, which specifies different dividend payoff in each period, affects firm=s market value. Assuming two linear dynamic models linking future earnings and dividends to current earnings and dividends, I show the effect of dividend policy on firm market value. Accounting methods, which generate different earnings at each time period, affect firm=s market value. Firms will choose the accounting method to minimize tax payment, e.g., firms can minimize tax payment by exploiting tax-timing option value, i.e., realizing losses immediately but deferring gains indefinitely.


Stock Index Futures Real -Time Long and Short Decision Support System

Dr. Chie-Bein Chen, National Dong Hwa University, Hualien, Taiwan, ROC.

Dr. Chin-Tsai Lin, Yuanpei Institute of Science and Technology Hsin Chu, Taiwan, ROC.

Hsin-Yuan Chang and Chiu-Tsu Fan, National Dong Hwa University, Hualien, Taiwan, ROC.



 Real-time long and short decision-making technique for stock index futures is presented in this study.  Simple regression model and partial SPRT are applied to construct the real-time decision support system (RTDSS).  The effectiveness of the proposed RTDSS is verified by implementing the four types of stock index futures, TX, TE, TF and MTX in Taiwan.  Taiwan Stock Exchange (TSE) Capitalization Weighted Stock index Futures (TX), TSE Electronic Sector Stock index Futures (TE), TSE Banking and Insurance Sector Stock index Futures (TF), and stock index Mini-TSE Futures (MTX) provide the investment instruments to domestic and international investors and let Taiwan stock market become more attractive to foreign capital promoting internationalization, liquidity and volume.  Contemporary stock index futures market includes three types of trading strategies, speculation, hedge and arbitrage.  Although there are many various types of financial models to describe the market, most of them have many hypothesis and limitations (Brock et al., 1992; Chou, 2000; Gencay and Stengos, 1998; Hsu, 1999; Wu and Lee; 2000).  Speculation of stock index futures is one of the most popular investment strategies to many investors (Johnson, 1960).  Most investors hope to obtain exceed revenue from long and short trading in the market of stock index futures, however, the investors must consider many factors from capital, policy and economical to psychological situations.  Since it is a tough work for investors to make a decision at proper time to trading the stock index futures, the purpose of this study is to construct a decision support system to help them making a real-time trading decision.  In order to provide the real-time suggestions for investors, the slope of simple regression model and partial sequential probability ratio test (SPRT) method are applied to construct the real-time decision support system (RTDSS) for stock index long and short.  Many applications of SPRT or partial SPRT are in manufacturing engineering, medical engineering due to patient safety, trial efficiency, and cost reduction (Chen, 1989; Chen and Wei, 1997, Chen and Wei, 1998), but the application is not appeared in financial engineering.  Consequently, the objectives of this work are:


Corporate Performance Efficiency Investigated by Data Envelopment Analysis and Balanced Scorecard

Jui-Chi Wang, Hsing-Wu College, Taiwan



 Due to the heightened competition between corporations operating globally, firms have been compelled to utilize various types of performance measurement tools to improve the quality of their products and services.  The process of performance measurement can highlight performance fluctuations and provide a sense of direction for performance improvement.  In this research study, the performance of Acer Incorporated - a computer manufacturer based in Taiwan - was evaluated and data was from 2001 to 2003 annual report.  Because no one performance measurement tool can provide a composite picture of the performance of an organization, the following two performance measurement approaches were used—Data Envelopment Analysis (DEA) and the Balance Scorecard (BSC) Approach.  Just as significantly, the findings of this study would help to determine whether the DEA and BSC approaches are informative and effective performance measurement tools.  They could thus be applied to other corporations for their performance assessments.  It is evident that both the DEA approach and the BSC can offer illuminating information about the performance of a company within a particular sampled period.  There is no question that companies would be able to benefit from the information generated from both of these performance measurement methods.  


Investment in Entrepreneurial Capital:  A Nonexpected Utility Maximizing Analysis

Sarah Ghosh, University of Scranton, PA

Dr. Satyajit Ghosh, University of Scranton, PA



 In this paper we develop nonexpected utility-based models to examine an individual’s entrepreneurial investment decision. Using Selden’s Ordinal Certainty Equivalent Preference structure which enables us to distinguish between an individual’s consumption smoothing motive (captured by the elasticity of intertemporal substitution) and his aversion to risk (as measured by the coefficient of risk aversion) we characterize an individual’s optimal decision and examine the importance of his attitudes towards risk and “smooth” consumption in determining his decision to invest in entrepreneurial capital. We demonstrate that as entrepreneurial risk increases, entrepreneurial investment decision is influenced by an individual’s consumption smoothing motive.  In developed countries individual wage earners routinely decide to switch from wage employment to entrepreneurial activities. It is thus not surprising that several economic models have been developed to analyze such entrepreneurial choice and an individual’s decision to invest in entrepreneurial capital. In a very important contribution to the literature, Evans and Jovanovic (1989) focused on credit rationing to examine business startups and an individual’s decision to switch from wage employment to entrepreneurial activity. However, others such as Kihlstrom and Laffont (1979) and Cressy (2000) considered entrepreneurial decision to be inherently risky compared to more stable wage employment. Instead of credit rationing they focused on individual’s attitude towards risk as captured by the traditional measures of risk aversion and have developed expected utility based models to analyze entrepreneurial choice and entrepreneurial investment. In this paper we analyze entrepreneurial investment decision as an intertemporal decision under risky environment and develop a nonexpected utility model to examine the importance of an individual’s attitude towards risk in such investment decision.


Kano Two-dimensional Quality Model and Important-Performance Analysis in the Student's Dormitory Service Quality Evaluation in Taiwan

Tung-Liang Chen, Chung Hua University, Taiwan

Yao-Hsien Lee, Chung Hua University, Taiwan



 Recently, the number of universities in Taiwan had increased as a result of the deregulation policy of university education.  This also increases the number of students in an university, which has to provide the dormitory service required by the students.  Since the student’s dormitory service quality affects the effect of student’s learning performances, it is an important issue related to improve student’s dormitory service quality for the educators and executive personnel in the university.  This study uses the SERVQUAL Model and the questionnaire to measure the student’s dormitory service quality in the university.  The study classifies the dormitory service quality based on the Kano Two-dimensional Quality Model and applies Important-Performance Analysis to discuss the difference between the student’s expectation and satisfaction about the dormitory service quality in the university. Our result shows that female and humanities and social department students in the university feel significantly unsatisfactory with the dormitory service quality.  As expected, “reducing the dormitory fee” can increase the students’ satisfaction toward the dormitory service quality.


A Study on Decision Factors and Third Party Selection Criterion of Logistics Outsourcing - An Exploratory Study of Direct selling Industry

Dr. Gwo-Ji Sheen, National Central University, Taiwan

Cheng-Ting Tai, National Central University, Taiwan



 Direct selling has been in Taiwan for over twenty years with annual production value reaching tens of billion of dollars.  However, there is still no study addressing the needs of logistics services derived from the unique direct selling as of today.  Therefore, this paper attempts to explore the corporate characteristics and status of logistics activities as well as the correlation between outsourcing decision factors and 3rd party selection criterion by targeting at multi-level direct selling business.  The statistical methods used include Descriptive Statistics, Factor Analysis, Analysis of Variance, Scheffe and Chi-square test.  The analysis result shows that when the number of employees and company history, revenues and the degree of outsourcing customer service, transportation, inventory management, order and account handling, warehouse operation, and information management are different, there are significant differences manifested in the degree of emphasis in outsourcing decision factors such as cost and quality of service, risk and degree of ease in replacing3rd party and executing outsourcing.  Companies with a higher degree of outsourcing transportation and information management tend to put more emphasis in 3rd party selection criterion including quality, cost and accommodation, ability and compatibility.  Companies with a longer history, larger capital and revenue tend to put more emphasis in a higher degree of outsourcing transportation activity.  Direct selling companies with a higher revenues tend to put more emphasis in a higher degree of outsourcing order and account handling activity.  Direct selling companies with smaller revenues tend to put more emphasis in a higher degree of outsourcing purchasing and scheduling as well as information management activities.


Employee Demography Moderate Involvement of Decision Making and Adoption of Management Accounting Innovations for Chinese Accountants

Dr. Hui-Ling Yang,  Leader University, Tainan City, Taiwan ROC

Dr. Grant G. L. Yang,  Leader University, Tainan City, Taiwan ROC

Dr. Wei-Pang Wu,  Leader University, Tainan City, Taiwan ROC



 This study investigates the main effect of demographic variables on accountant’s involvement of decision-making and the moderating effect of gender, education, position, and tenure on the relationship between involvement of decision-making and adoption of management accounting innovations for practicing accountants based on a survey of 106 accountants in the People’s Republic of China. To examine hypotheses, intercorrelational analysis, regression and three-step hierarchical regression model will be used to analyses the data. The results show that position is associated with decision-making involvement while other demographic variables are not correlated with decision-making involvement. In addition, gender was found to moderate the decision-making involvement and adoption of management accounting innovations for Chinese practicing accountants.


How to Prepare Students for the New Economics and Finance Component of the CPA Exam

Martin Rudnick, William Paterson University, NJ

Dr. Virginia Taylor, William Paterson University, NJ



 The American Institute of Certified Public Accountants restructured the CPA exam in April 2004.  In the new section titled Business Environment and Concepts knowledge of economics and finance is now being tested.  The purpose of this paper is to show how to prepare students for this new section of the CPA exam.  For over one hundred years the CPA exam was given twice per year.  The exam was offered the first week of May and the first week of November. There are fifty-four states and jurisdictions that license CPA’s, the fifty states, Washington DC, Puerto Rico, American Virgin Islands and Guam. The state or jurisdiction where the examinee is seeking to be licensed as a Certified Public Accountant will determine the candidate’s qualifications to sit for the exam. These qualifications normally dealt with education and residence requirements.   Despite the differences in requirements to sit for the CPA exam, all examinees in all jurisdictions take the same exam.  As of April 2004 the CPA exam took on a completely new format.  The exam changed from a pencil and paper format to a computer format.  The exam is now administered in computer centers throughout the United States.  Prometrics, the parent company of Sylvan Learning Centers, administers the exam.  In many of the states and other jurisdictions the exam is given in Sylvan Learning Centers.  The exam is now offered throughout the year.  As stated above, before April 2004,the CPA exam could only be taken twice per year.  The two times each year it could be taken were the first week of May and the first week of November. As of April 2004 the exam may now be taken the first two months of each quarter of the calendar year.  Examinees are now offered up to four opportunities a year to take each part of the CPA exam.


A Foundation Study for Improving Operations and Productivity in the Service Sector

Dr. Ardeshir Lohrasbi, University of Illinois at Springfield, Springfield, Illinois



 In this research paper, I will focus on two very important issues regarding the improvement of productivity in service centers: measuring worker output, and when appropriate, implementing ways of improving worker output. When working in a service industry it is highly important to serve customers as efficiently as possible, while also providing the customer with the level of service they expect. This is the case in any service industry, especially since you are not only selling the product, but the service that comes with the product. If you do not provide the level of service desired, the customer will go to a competitor that he or she believes is providing better service.  In most organizations, but especially service organizations, one effective way of measuring productivity is through performance reviews or performance appraisals. Unfortunately, many managers often see the task of writing performance appraisals to be merely a requirement necessary to comply with the law or the organization’s personnel policy. Supervisors often evaluate subordinates’ competence, motivation, potential and overall success on a constant and often informal basis. This can be unfortunate, both for the employee and for the organization. Employees may suffer if a description of their talents is not put down on paper. It may be in a supervisor’s mind, but if that supervisor were to leave the organization, the employee would have to start all over with a new supervisor. However, if a good performance appraisal is conducted, these will help show the new supervisor the abilities of his employees. The organization will also suffer, because many times the wrong employee might be promoted due to a misleading performance appraisal. I will focus on how the firm can increase productivity.


The Implementation of an Asynchronous Web-based Gaming & Simulation Environment and Its Effects on Financial Engineering Education

Dr. Hsing-Wen Wang , National Changhua University of Education, Changhua, Taiwan, R.O.C.



 This paper introduces the implementation of an asynchronous web-based gaming & simulation environment (AWGSE) and its uses on the Internet. AWGSE is currently being tested at universities in Taiwan to improve web-supported, asynchronous virtual environment-based distance learning commonly referred to as online learning. We present the rationale of designing the system and the advantages it gives to students studying financial engineering education. We also devote a portion of this paper to the achievements of teaching aids and practice laboratories for financial engineering education using an innovative technology. In addition, we offer a case study of the campus financial investment race activity and describe the enhancements made to financial courses and the learning patterns of students. Moreover, the results of this formative evaluation were collected from both teachers and students who were exposed to the system. Finally, the findings show that mediating the mechanisms creates effective collaborative learning with extensive self-learning process from group decisions activities.


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