The Business Review Journal

(The Journal of American Business Review, Cambridge)

Vol. 4* Number 1 * December 2015

The Library of Congress, Washington, DC   *   ISSN 1553 - 5827

The Library of Congress, Washington, DC   *   ISSN 2167-0803

Online Computer Library Center, OH   *   OCLC: 940146916

National Library of Australia   *   NLA: 49026139

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The Wealth Effects of Stock Certificate Dematerialization

Dr. John R. Wingender, Jr., Creighton University, Omaha, NE

Randy Jorgensen, Creighton University, Omaha, NE



We investigate the wealth effect to firms eliminating paper stock certificates in favor of digital certificates.  The move to e-stock certificates is a part of a general movement known as dematerialization.  The transition to digital certificates has been optional for several years although it will likely become mandatory in the United States in the near future. We have two goals in this research.  First, the handling of paper stock certificates and the transition to digital registrations has not been much discussed in the finance literature.  We seek to fill this void.  Second, the motivation for dematerialization is often related to cost savings to the issuing corporation.  If future costs are lower with no impact on business operations or the financial expenses of the firm, then the move should result in increased future cash flow.  This should be a positive net present value decision and thus increase firm value.  In this study we use standard event study methodology to test for significant abnormal returns to investors in companies whose Board of Directors voluntarily decide to go digital with their stock certificates.  We examine the stock returns of 211 firms that switched from paper to digital certificates and find a statistically significant positive impact on share price in the ten days prior to the conversion date.  Our results support the hypothesis is that there is a positive impact on firm value.  Dematerialization is the general term used to describe the transition from a paper-based system to a digital one.  For purposes of this study, we refer to the transition from paper stock certificates to digital registrations as dematerialization.  US corporations have been making this transition for a number of years but few garnered the publicity that surrounded the move by the Walt Disney Company, which announced in October 2013 that it would stop issuing paper stock certificates. 


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Persistence, Resilience, Renewal – A Tale of Three Firms

Dr. David Robinson, RMIT University, Vietnam

Dr. Arthur Morgan, RMIT University, Vietnam

Duc Nhat-Hoang, RMIT University, Vietnam



The purpose of this article is to explore the paradox of how seemingly virtuous coping tools, in particular persistence, resilience, and renewal can mitigate against effective and optimal organizational development. It draws on the concept of workplace pathologies, in particular the mad, bad and sad personality disorders. Three mini cases are used to illustrate the pitfalls of adherence to coping skills and provide a backdrop for discussion on ways to avoid the pathological traps. Business leaders are admonished to create cultures that value persistence and resilience. They are also advised to periodically strive for organisational renewal. But what do these terms really mean? And how, amidst the hustle and bustle of daily crisis management do most firms cope with those imperatives?  This paper explores the theoretical meanings and the practical applications of each of these terms, suggesting ways to avoid the pathologies associated with each and ensure their appropriate place in an evolutionary process of continuous organisational development. Persistence is demonstrated when entrepreneurs choose to pursue opportunity regardless of enticing alternatives (Holland and Shepherd, 2013). This trait can be regarded in two ways: persistence as being staunchly committed to persevere toward a given opportunity, or persistence as dealing with unforeseeable opposing forces (Holland & Shepherd, 2013). It has been shown that entrepreneurs and leaders with a sense of persistency possess a higher possibility of harvesting fruitful results in comparison to entrepreneurs and leaders who lack experience in or do not recognize the essential value of persistency (Gompers, Kovner, Lerner, & Scharfstein, 2010).


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Bottom of the Pyramid and the Role of the Business Schools

Dr. Satya N. Prattipati, Kania School of Management, University of Scranton, Scranton, PA



It is estimated over 2.5 billion people, accounting for nearly 40 percent of the population, live at the Bottom of the Pyramid (BoP), widely defined as those living on $2 per day or less. The International Finance Corporation estimated the collective purchasing power of the people at the BoP at $5 trillion dollars. There is widespread recognition that the poverty alleviation programs adopted by many governments, international aid organizations, and other philanthropic trusts, did not make any significant dent in global poverty. In recent years many businesses, multinational corporations, and leading thinkers have come to realize that the way to reduce poverty on a very large scale is to harness the power of free enterprise to meet the basic needs of the poor people with quality products at affordable price. Many organizations have initiated several profit oriented projects to lift the people out of poverty. Unfortunately, BoP remains a niche area in the business schools. The strategies used to engage people at the BoP touch upon all the functional areas (like accounting, finance, marketing, supply chains) of the business school curricula. However, none of the BoP issues are included in the core curricula of business schools. The current curricula mainly focus on the issues related to the top-of-the pyramid. The paper strongly that the issues and strategies related the poverty alleviation, are very much relevant to the business students and should be one of the main parts of the curricula in the business schools as opposed to a niche area.  Late Prof C.K. Prahalad was among the pioneers to focus attention on the business opportunities at the bottom of the economic pyramid (BoP).


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Current Developments in Legal Professional Privilege: Perspectives from Australia

Carlo Soliman, BA, LLM, Senior Lawyer and Lecturer TOP Education Institute, New South Wales and Victoria University Sydney, Australia



Legal professional privilege is an important doctrine that preserves the confidentiality between a person and his/her legal advisor as well as communications prepared for the dominant purpose of current or anticipated litigation. In 2007 the Australian Law Reform Commission (ALRC) conducted a landmark review of the doctrine of legal professional privilege with a view to determine whether amendments by way of abrogation or statutory enshrinement were necessary in order for investigative bodies to discharge their duties properly. The ALRC found that legal professional privilege is an important common law right and that its retention should be preserved. Whilst 45 recommendations were made the application of legal professional privilege continues to be predominantly assessed by the courts rather than by specific statutory enactment. This paper provides an overview of the doctrine of legal professional privilege together with some selected cases that detail its ongoing relevance in the commercial world. In the spectre of ever-growing governmental intrusion into the activities of the individual and corporate citizen, the retention of legal professional privilege remains an essential safeguard for the protection of rights and the preservation of a civilised democratic society. Legal professional privilege is an ancient doctrine that dates back to the fifteenth century originating in the English common law. (1) Both under statute and at common law the doctrine protects, from disclosure to third parties, communications between a person and his/her legal advisor, known as advice privilege as well as communications prepared for the dominant purpose of current or anticipated litigation (2) referred to as litigation privilege.


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Conditional Risk-return Relationship

Dr. David Morelli, Kent Business School, University of Kent, Canterbury, Kent, UK



This paper examines the risk-return relationship, based upon US data using securities listed on the New York Stock Exchange, adopting a joint conditionality approach.  Autoregressive conditional heteroscedastic models are applied to model time varying conditional variances and covariances which are used to estimated beta.  The methodology of Pettengill, Sundaram and Mathur (1995) is adopted to examine the conditional risk-return relationship.  The results from this paper show a strong positive conditional risk-return relationship when a joint conditionality approach is adopted.  The Capital Asset Pricing Model (CAPM) of Sharpe (1964) and Lintner (1965) is a single factor model, which assumes that the expected return on a security has a positive linear relationship with its systematic risk captured by beta.  Despite encouraging early tests of the unconditional CAPM, such as those performed by Black et al. (1972) and Fama and MacBeth (1973), there have been many since that have questioned its validity.    Such studies include Fama and French (1992) and Davis (1994) on the US markets, Hung et al. (2004), Morelli (2007) on the UK market, Lam (2001) on the Hong Kong market, and Elsas et al. (2003) on the German stock market.  Studies, by Wong et al. (2006),  Wang and Di Iorio (2007a, 2007), Morelli (2012) all on the Chinese stock market failed to find any unconditional relationship between beta and returns.


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An Investigation of the Innovation Performance of Ownership Types in China

Nadine Becker, Jacobs University, Germany

Dr. Angela Munch, National Oceanic and Atmospheric Administration (NOAA), MA



In order to generate a sustainable growth strategy the Chinese government issued the S&T Development Plan in 2006 to transform from a production-driven towards an innovation-oriented economy. In the course of this development plan access to specific resources like financial, physical, human, organizational and technological input factors are granted to certain enterprises operating in China. These firms may be differentiated by ownership types into state-owned (SOE), collective-owned (COE), private-owned (POE), and foreign-owned enterprises (FOE), as well as domestic joint ventures (DJV) and foreign joint ventures (FJV). In this paper a regression analysis based on data from the Chinese National Bureau of Statistics from 2001-2010 is conducted in order to identify the differences of innovation performance among the various ownership types. The newly elected Premier of the People’s Republic of China Li Keqiang has stated at The Annual Meeting of the New Champions 2013 that “China is implementing an innovation-driven development strategy at a faster pace, aggressively promoting technological innovation and integration of science and technology with the economy” (China Daily, 11.09.2013). The status of China as the “world’s factory”, which relies heavily on its low cost input factors and on foreign technology, is perceived by the Chinese government as an unsustainable model to foster long-term growth.


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Audit Committee Competency and Goal Achievement: Empirical Evidence from Thai-Listed Firms

Sirikwan Junlasri, Mahasarakham Business School, Mahasarakham University, Thailand

Dr. Phaprukbaramee Ussahawanitichakit, Mahasarakham Business School, Mahasarakham University, Thailand

Dr. Kesinee Muenthaisong, Mahasarakham Business School, Mahasarakham University, Thailand



The Thai-Listed Firms will require the establishment of the audit committee. This subcommittee assists the board to practice on issues that may be overlooked and toward the firm's system of good governance, with the aim of enhancing performance to add value to the organization and build credibility with stakeholders and to contribute to the achievement of organizational goals. Thus, the ability of the audit committee is considered very important to the operations under the corporate governance which is achieved. Therefore, this research attempts to integrate the key components of audit committee competency in a new model. The main purpose of this research is to investigate the effects of audit committee competency on goal achievement of Thai-Listed Firms. This research uses stakeholder theory and contingency theory to explain the relationship of the variables. The Thai-Listed Firms were selected as the sample. The questionnaire is used as an instrument for data collection and the audit committee chairman is the key informant. Data were collected from a sample of 128 firms. The regression analysis is a method for testing the hypotheses. The results showed that audit committee competency have strong, positive effects on best accounting practice, internal audit efficiency, business operational transparency and resource utilization effectiveness. Additionally, best accounting practice and internal audit efficiency have strong, positive effect on financial reporting quality. Also, business operational transparency, resource utilization effectiveness have a strong, positive effect on organizational excellence. Moreover, financial reporting quality and organizational excellence have a strong, positive effect on stakeholder credibility and goal achievement.


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The Relation Between Lessons Learned and the Development of Intelligence Culture in an Organization

Dr. Rimvydas Skyrius, University of Vilnius, Lithuania

Saulius Simkonis, University of Vilnius, Lithuania

Svetlana Nemitko, University of Vilnius, Lithuania



The continuing development of the business intelligence field brings significant innovations in the technology; at the same time, controversies keep coming up in handling expectations and delivering value from investments in BI systems. One of the emerging aspects in the field is the need for the development of BI culture, acting as a catalyst for creating synergy from often-scattered BI activities in an organization. The availability of intelligence information and accumulated experience to all participants of BI process, often hindered by functional and departmental boundaries, is one of the principal obstacles for creating BI culture. The goal of this paper is to define the most important types of such obstacles by using the results of performed research. The importance of accumulated experience, or lessons learned in BI activities and decision making is rather obvious; on the other hand, the performed research has discovered several types of problems in organizing, managing and use of intelligence information. The authors conclude that radical motivational approaches are required to support the common use of intelligence information and creation of intelligence culture in an organization in general.  The field of business intelligence (BI) has experienced dynamic growth over the last two decades. This period is rather characteristic of significant innovations in BI technology; on the other hand, huge expectations of insights and benefits driven by BI innovations have not exactly been justified.


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Brand Loyalty and Brand Trust: A Case Study on Consumer Preferences

Dr. Saleh Saad Alqahtani, King Saud University, KSA

Dr. Showkat Hussain Gani, King Saud University, KSA



To craft brand loyalty it is fairly significant for companies to recognize how consumers decide among substitute brands and what stimulates them towards a specific brand. The idea of the current study is to discover the influence of trust of consumer and their preferences. Encapsulating pertinent methodical writings and scholastic literature on brand trust, it was originated that there is a necessity to demeanor research which will be committed to the consumer trust in the international brands. Till now there is need of research in this domain of trust in the framework of international brands and this will be research based in the methodically way which will grate beam in the present field but novel manner of conduct of instance .While many researches converged on consumer-based paradigms, only some investigators analyzed the impact of distribution strength on brand loyalty. On methodical terms we use proposition in order to have pertinent outcomes from the consumers‟ perception. Nevertheless, in this research study technique has been implemented, aspects that have an effect in the international brand trust were measured. The outcomes will have constructive influence in the discipline of branding, correspondingly in the domain of international brand trust. In total, 262 questionnaire answers were used from the city of Riyadh, Saudi Arabia, to pragmatically experiment the consumer trust for international brands.


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Technology-Based Audit Competency and Audit Outcome: An Empirical Investigation of

Certified Public Accountants (CPAs) in Thailand

Wilaiporn Hongkhuntod, Mahasarakham Business School, Mahasarakham University, Thailand

Dr. Phaprukebaramee Ussahawanitchakit, Mahasarakham Business School, Mahasarakham University, Thailand

Dr. Sutana Boonlua, Mahasarakham Business School, Mahasarakham University, Thailand



The development of technology causes changes in business processes which has an effect on the accounting and audit process. The ability of the auditor to use of technology is to play a role in the audit. Therefore, technology-based audit competency is probably the behavior of the auditor that may affect performance auditing increased. The objective of this research is to empirically investigate the relationships between technology-based audit competency and audit outcome. In addition, this research tests the impact of four antecedents (proactive audit vision, technology knowledge, audit experience, and professional market force) on technology-based audit competency. The conceptual model is proposed by drawing on the resource–based view (RBV) of the firm theory and cognitive theory The Certified Public Accountants (CPAs) in Thailand were selected as the sample. A questionnaire is used as the instrument for data collection. The data were collected from a sample of 227 auditors. The results indicate that technology-based audit competency (such as audit software, computerized audit, and IT-based audit reporting) has an effect on technology-based audit competency consequence, Moreover, technology knowledge, proactive audit vision and professional market force are, act as the antecedents of technology-based audit competency. This research provides the directions and suggestions for auditors to identify and justify key components of technology-based audit competency. Therefore, the auditors who are responsible should be concerned with technology-based audit competency.


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Analysis of Cultural Tourists’ Motive and Loyalty to Traveling Destinations; The Case Study of a Literature Museum

Dr. Cheng-Te Lin, Department of International Business Administration, Kang Ning University, Tainan

Dr. Chin-Wei Huang, Department of Tourism & Hospitality Management, Kainan University, Taoyuan

Yi-Tsun Ho, Graduate School of Business & Operations Management, Chang Jung Christian University, Tainan

Dr. Chen-Hsien Lin, Department of Hotel and M.I.C.E Management, Overseas Chinese University, Taichung



This study focuses on (a) understanding the characteristics that influence motivation to visit, experience, and loyalty; (b) discovering relationships among motivation to visit, experience, and loyalty; and (c) studying the degree of effectiveness between experience and loyalty.  The researchers developed and administered a survey based on the literature review and divided into four parts: (a) motivation, (b) experience, (c) loyalty and (d) demographics.  The section on motivation covered four dimensions: knowledge, exhibitions, relaxation, and interpersonal relationships.  While developing the survey, the researchers used the basic aspects of experience noted in the literature: sensing, feeling, thinking, acting, and relating. Descriptive analysis, factor analysis, t-test, and one-way ANOVA were used to analyze the data. Based on the analysis, the researchers offer three suggestions to the museum and the local government.  First, the museum and local government should sponsor more family activities, events, and exhibitions to satisfy visitor needs and to stimulate motivation to visit.  Second, the museum personnel must pay attention to and serve the major target group—students.  Third, the atmosphere and service at the museum influence visitor experiences of feeling and sensing, which connect with loyalty; therefore, regularly remodeling and staff training become necessities. Cultural tourism has become a new style of tourism recently. Culture represents an intangible asset, which could be used to create tourism products and generate symbolic value for tourist destinations (Hennessey, et al., 2014).


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Management Accounting Responsibility and Firm Value: Evidence from Exporting Furniture Businesses in Thailand

Wareewan Charoenroop, Mahasarakham Business School, Mahasarakham University, Thailand

Dr. Phaprukbaramee Ussahawanitchakit, Mahasarakham Business School, Mahasarakham University, Thailand

Dr. Suparak Janjarasjit, Mahasarakham Business School, Mahasarakham University, Thailand



This study investigates the effects of management accounting responsibility on firm value via the management accounting consequences, and investigates the impact of antecedents on management accounting responsibility of exporting furniture businesses in Thailand. The stewardship theory and contingency theory are used to explain the relationship of the variables in this study. A questionnaire is used as the instrument for data collection from accounting executives and accounting managers of each firm which are the key informants and, regression analysis is employed to examine all hypotheses of this study. The data are collected from the sample of 151 exporting furniture businesses in Thailand. The results indicate that some dimensions of management accounting responsibility influence information reliability, corporate reputation, stakeholder credibility, business competitiveness, and firm value. And, it is noteworthy that two of the dimensions of management accounting responsibility are budgetary preparation trustworthiness and environmental management accountability which have significant positive effects on information reliability, corporate reputation, stakeholder credibility, business competitiveness, and firm value. The results also show that information reliability, corporate reputation, stakeholder credibility, and business competitiveness have an effect on firm value. Furthermore, the antecedents of this study have significant positive effects on each dimension of management accounting responsibility. Theoretical and managerial contributions are explicitly provided.


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The Effects of Board and Shareholders Structure and Earnings Quality on Security Returns of

Listed Companies in the Stock Exchange of Thailand

Dr. Nantana Jaengsawang, Rajabhat Thepsatri University, Thailand

Dr. Kanibhatti Nitirojntanad, Chulalongkorn University, Thailand



The purpose of this study is to analyze the effects of board and shareholders structure and earnings quality on the security returns of listed companies in the Stock Exchange of Thailand.  The study used secondary data of listed companies in the Stock Exchange of Thailand in all industrial groups during the year 2007 to 2011 excluding companies in the market for alternative investment, business financial group, as well as the rehabilitation companies.  The data was collected from 339 listed companies which were analyzed using multiple regression analysis.  The results reveal that the board and shareholders structure including percentage of free float on total shareholders, percentage of directors in board meeting, percentage of independent directors, and percentage of financial or accounting expertise of directors in audit committee have positive relationship to the security returns. The operating cash flows on total assets is the earnings quality variable which is found positively related to security returns. The results of this study suggest that board and shareholders structure and earnings quality have significant effects on the security returns in the stock exchange of Thailand.  The results indicate that the information concerning corporate governance disclosed in the stock market and earnings quality of the financial reports are value relevant and useful for investor decision making.  

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Twenty Ethical Competencies for Surviving Organizational Politics

Dr. Stewart L. Tubbs, Professor of Management and the Darrell H. Cooper Endowed Chair in Leadership Management Department, Eastern Michigan University, MI



Have you ever wondered why things turn out the way they do in your organization? Sometimes a few people seem to consistently get their own way while others can’t. If so, then you have experienced organizational  politics.  One survey from the Journal of Accountancy, (See below) indicated that organizational politics was the leading source of job stress.  Similarly, research on this topic indicates that organizational politics costs organizations millions of dollars in lost productivity every year (Pearson and Porath, 2009; Dillon, 2014)). For example, Bob Woodward titled his latest best- selling book, The Price of Politics (2012) to emphasize just this point. This paper offers twenty tips for surviving organizational politics for those who would like to learn how to be more successful at the game of organizational politics. Organizational politics are more complex than they first seem. One view, states that “Political skill…is the ability to understand social interactions at work and to use this understanding to influence others to act in ways that enhance one’s personal or organizational goals.” (Brouer, Douglas, Treadway and Ferris, 2013, p.187).   Another recent source defines political skill as, “An interpersonal style construct that combines social perceptiveness or astuteness with the capacity to adjust one’s behavior to different and changing situational demands,“ (Harvey, Harris, Kacmar, Buckless, and Pescosolodo, 2014). 


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Effects of Professional Citizenship Behavior on Audit Success of Certified

Public Accountants (CPAs) in Thailand

Thitiworada Sangsawang, Mahasarakham Business School, Mahasarakham University, Thailand

Dr. Kesinee Muenthaisong, Mahasarakham Business School, Mahasarakham University, Thailand

Dr. Phaprukbaramee Ussahawanitchakit, Mahasarakham Business School, Mahasarakham University, Thailand



This research is to examine the effects of professional citizenship behavior (professional conscientiousness orientation, regulation compliance focus, professional loyalty concern, and voluntary self-development intention) on audit ethics awareness, audit practice efficiency, audit enthusiasm commitment, audit quality, financial information reliability, audit excellence, and audit success. Likewise, this research tests the impacts of professionalism concern, audit learning, audit value, professional acceptance and stakeholder expectation on professional citizenship behavior. In addition, the 239 auditors in Thailand were selected as the sample and with data collection by questionnaire. This research results show that professional conscientiousness orientation, regulation compliance focus, professional loyalty concern, and voluntary self-development intention positively influence audit ethics awareness, audit practice efficiency, audit enthusiasm commitment, audit quality, financial information reliability, audit excellence and audit success. Also, the findings reveal that, professionalism concern, audit learning, audit value, professional acceptance, and stakeholder expectation positively affect professional citizenship behavior partially. Both theoretical and managerial contributions are explicitly provided. Conclusion and suggestions and directions for the future research are described.  Before bankruptcy of Enron in 2001,      ars profitable income in the past 5 years before the emptiness (Gillan and Martin, 2007; Li, 2010). Catastrophe of Enron led to number of question from US government and business sector. Who should be responsibility?


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Audit Professional Well-Roundedness and Audit Success: An Empirical Investigation of

Certified Public Accountants in Thailand

Chatratchada Wiroterat, Mahasarakham Business School, Mahasarakham University, Thailand

Dr. Kesinee Muenthaisong, Mahasarakham Business School, Mahasarakham University, Thailand

Dr. Phaprukbaramee Ussahawanitchakit, Mahasarakham Business School, Mahasarakham University, Thailand



This paper highlights the examination of the influence of audit professional well-roundedness and audit success: an empirical investigation of Certified Public Accountants (CPAs) in Thailand. These are exploring the relations among audit professional well-roundedness and audit success. Also it examines the relationships among three antecedents: audit vision, audit experience, and environmental pressure. Moreover, here among 342 CPAs in Thailand who are the samples are chosen. The results indicate that audit professional well-roundedness, namely modern audit practice ability, audit knowledge diversity, audit skills excellence, audit learning competency, integrative audit resource implementation, have a positive impact on audit expertise, professional judgment, audit skepticism, audit quality and audit success. Professional judgment has positive influence on audit expertise. In addition professional judgment has positive influence on audit skepticism. Professional judgments, audit expertise and audit skepticisms have positive influence on audit quality. Audit quality has positive influence on audit success. Moreover, the findings also indicate that audit vision, audit experience and environmental pressure have positive influence on modern audit practice ability, audit knowledge diversity, audit skills excellence, and integrative audit resource implementation. Moreover, audit vision and environmental pressure have a positive influence on audit learning competency. The contribution of this paper can help to explain the key factor of audit professional well-roundedness and audit success.


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How to Reduce Compliance Costs in Transfer Pricing Area for SMEs: Czech Case

Dr. Veronika Solilova, Mendel University, Brno, Czech Republic

Dr. Danuse Nerudova, Mendel University, Brno, Czech Republic



SMEs are an economic backbone of the European economy as they generate 28% of GDP in EU28 and employ at least 60% of persons employed in EU28. Moreover, SMEs are involved in global value chains as partners, suppliers and distributors of large and multinational companies. However, SMEs face many obstacles one of them is tax system which generates excessive compliance costs, which are regressive with regard to firm size. The situation is worse for SMEs which are internationalized in EU i.e. having subsidiaries abroad, where transfer pricing and other international taxation issues may be in point. Therefore, greater simplicity in transfer pricing administration and improving the efficiency and effectiveness of transfer pricing enforcement are considered as essential mainly for SMEs, who are not able to bear the high administrative burden to comply with the transfer pricing rules as large enterprises. The aim of the paper is to research possibilities how to reduce compliance costs in the area of transfer pricing issue for SMEs in the Czech Republic. It focuses on simplification measures, i.e. safe harbour for the determination of transfer prices between SMEs. The proposal of safe harbours includes the arm's length ranges for each NACE sector where SMEs are acting. In average the arm's length ranges are running between 4 and 40%. Small and medium-sized enterprises (hereinafter SMEs) are categorized according to the number of employees and their turnover or balance sheet total. Based on the commonly-used categorization for SMEs provided by the European Commission (1) they are categorized on micro, small and medium-sized enterprises.


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The Comparison and Evolution of International Corporate Governance Models

Dr. Chen-Kuo Lee, Ling Tung University, Taiwan, R. O. C.

Dr. Li-Ru Chen, Program of the Management College, Da-Yeh University , Taiwan, R. O. C.



This study begins with the research of corporate governance models using game theories to analyze corporate governance models with emphasis on the dynamic game process in order to implement a dynamic game model, thereby validating the Path Dependence Theory relevant to corporate governance. Secondly, this study validates the implementation of corporate governance models in the developing nations under the developing nations’ unique cultural background, political situations, and economic backgrounds. Finally, this study validates the developing nations’ corporate governance models different from the four corporate governance models outlined in the conclusions.  The theory of corporate governance, or the arrangements related to business administration and corporate management, was presented by American scholars in the late 1960s and gradually became an important topic as time passed by (Henry, 2010). Corporate governance is becoming more and more important because, at the time that corporations are playing an important role in all economies, the general public demands the corporations to regulate their behaviors. Moreover, “corporate governance” requires a higher level of surveillance mechanism, check and balance, and interest surveillance than “corporate administration” and “corporate management”. The higher level of requirements is therefore necessary for the positive development of economy(Black, 2001; Black et al., 2005, 2006; Henry, 2008, 2010).  Western scholars began to study corporate governance theory in the 1980s. In Taiwan, however, scholars did not study corporate governance until 1990s although many corporate governance-related papers had been released, such as the article presented by Berle and Means (1932) regarding the division of ownership and management, the paper publicized by Mace (1971) regarding US corporation board’s functions with emphasis on the difference between theoretical implications and legal requirements, and the paper presented by Jensen and Meckling (1976) regarding agency costs.


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Open Innovation Platform in a Smart City: Empirical Results

Dr. Jukka Ojasalo, Professor, Laurea University of Applied Sciences, Espoo, Finland

University of Helsinki, Adjunct Professor, Finland

Aalto University, Adjunct Professor, Finland



The purpose of article paper is to develop a framework for open innovation platform between a Smart City and private sector / third sector. This paper is based on literature analysis and preliminary results from an ongoing empirical research of open innovation platforms in smart cities. As a result, it introduces a framework of open innovation platform between a Smart City and private sector / third sector, as well as its central characteristics. The framework shows how the city identifies its problems, brings them to open innovation platform to attract companies and third sector organizations to develop solutions, and in this way gets the problems solved with innovative solutions and creates business to the companies. Open innovation (Chesbrough, 2003a; 2003b) has become an important research area during the past ten years (Huizingh, 2011). Open innovation means “a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology ” (Chesbrough, 2006a, p. 1; in Elmquist et al., 2009, p. 327). In an open innovation process, development projects can be launched from internal or external sources and new technology can enter at various stages. Projects can also go to market in many ways, such as out-licensing or a spin-off venture (Chesbrough, 2003b). The focus is on the transformation of the previously solid boundaries of the company to a semi-permeable membrane that enable innovation to move more easily between the external environment and the internal R&D processes. The innovation process also includes organizing the search for new ideas that have commercial potential (Laursen and Salter, 2006).


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IFRS for SMEs: Is Amendment to IAS 16 – Bearer Plants suitable for SMEs?

Dr. Hana Bohusova, Mendel University, Brno, Czech Republic

Dr. Patrik Svoboda, Mendel University, Brno, Czech Republic



The paper focuses on the desirability and possibility of amendment to the IFRS for SMEs as a consequence of changes in the full IFRS due to the amendment to IAS 16 – Bearer Plants in the regular three years amendments. The main objective of the paper is the evaluation of the treatment developed primarily for listed companies from the perspective of the SMEs agricultural reporting. The paper should contribute to the debate on suitability of fair value measurement application of SMEs biological assets.  The authors are concerning at the differences between the substance of bearer biological assets in a form of plants and animals. The main issue is the possible way of their measurement and accounting for in case of SMEs. The model cases are used for possible accounting treatment proposal.  Difference in national accounting systems was identified as the main reason of spending additional costs in companies that prepare financial statements based on national generally accepted accounting principles in order to raise capital from different countries. Financial reporting as a result of application of accounting treatments should become a comprehensible source of information for users from different countries. The way out of this situation is a global harmonization of financial reporting. The situation is solved out for large companies listed on the world stock markets. There are full International Financial Reporting Standards (IFRS) used for preparation of consolidated or individual financial statements of large listed companies in many countries except the US companies which prepare financial statements according to US Generally Accepted Accounting Principles (GAAP). 


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An Approach for Integrating Accounting and Marketing  in a Project for a Graduate Management Course

Dr. William R. Smith, Jr., Professor, Pepperdine University, CA

Dr. Fred Petro, Professor, Pepperdine University, CA



The advantages of student projects that require the integration across two or more academic disciplines have become more evident in recent years.  In the earlier years of the movement towards integration, it was common to have subjects that shared similarities involved in these types of assignments.  For example, it was common to assign team projects that involved the integration of finance with accounting or organizational behavior with consumer behavior.  This article focuses on developing a template for a project that blends the disciplines of accounting and marketing.  The discussion surrounding the imperative for business schools to teach their students to think in a cross-disciplinary (integrated) fashion has been ongoing for years.  One of the most troubling discussions of some of the issues surrounding this topic was the work of Bennis and O’Toole (2005).  In this article, the authors bemoan a current state of affairs as they see it in which today’s business schools tend to have less integration across academic disciplines and functional areas of business than was the case several decades ago.  Other writers (outside of business schools) who focus on pricing products have pointed to the, “… ongoing conflict between managers in charge of covering costs (finance and accounting) and managers in charge of satisfying customers (marketing and sales).  Accounting texts warn against prices that fail to cover full costs, while marketing texts argue that customer willingness-to-pay must be the sole driver of prices. 


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