The Business Review

Do the Financial Markets Care about Government Shut-Downs?

Dr. Larissa J. Adamiec, Purdue University, IN

Dr. Russell Rhoads, Kelley School of Business, Indiana University, IL

ABSTRACT

There have been seven government shutdowns since the inception of the Volatility Index Exchange (VIX) in 1993. The financial markets have become accustomed to the crisis and have subsequently not had a large market response to the government shutdown. A government shutdown can cause detrimental repercussions to the economy. A shutdown in the government causes government workers to be furloughed or to have reduced hours. Services which the citizens of the United States depend upon are not available. For example, the most recent government shutdown as of October 2025, has included traffic controllers not working, causing issues with flights. The financial markets did not respond as indicated in Chicago Board Options Exchange, Volatility Index (VIX). These shutdowns have immediate impacts on the productivity of the government as well as long-term ramifications. As a result, temporary funding can occur for specific services which are necessary for the function and safety of the population of the United States (Kosar 2004). Government shutdowns can also occur due to failures to pass regular appropriations bills. These bills are required to be completed by the October 1 deadline. When these are not passed, a shutdown can ensue. The Antideficiency Act prohibits government spending outside of “emergency situations, where the failure to perform those functions would result in an imminent threat to the safety of human life or the protection of property.” Due to this act, during these time periods, government spending stops. The government needs to have an approved budget by October 1. The government has three choices for the budget: Coming to agreement on regular appropriations acts before October 1, the beginning of a new fiscal year; Using one or more interim continuing resolutions (CRs) to extend temporary funding beyond the beginning of a fiscal year, until negotiators make final decisions about full-funding levels. Not agreeing on full-year or interim appropriations acts, resulting in a funding gap and a corresponding shutdown of federal activities. A 1980 Office of Management and Budget (OMB) memo defined “essential” government services and “essential” employees as: “Providing for the national security, including the conduct of foreign relations essential to the national security or the safety of life and property; providing for benefit payments and the performance of contract obligations under no-year or multi-year or other funds remaining available for those purposes; conducting essential activities to the extent that they protect life and property.” Government shutdowns have allowed these essential workers to continue working. The effects of a government shutdown include impacts on the citizens’ access to health resources, delays with law enforcement / public safety, and closures of parks / museums. Monuments, delays for Visas & Passports, and resources for American Veterans. Workers who are considered non-essential will often be furloughed with the expectation that they will be able to return to work at the end of the government shutdown. Conversely, essential employees will continue to work, however, they won’t receive their pay during the government shutdown. By law, the government will pay the employees back pay. The back pay will only be paid after the government shutdown is over and a funding bill has been passed by the government. Table 2.1 Government Shut-Downs demonstrates the seven most recent government shutdowns. The period chosen was from the inception of the Chicago Board Options Exchange (CBOE) VIX. The first period was from November 14, 1995, through November 19, 1995, lasting five days. The second government shutdown was from December 16, 1995, through January 6, 1996, lasting 21 days. The third period was from October 1, 2013, through October 16, 2013, lasting 16 days. The fourth period was from January 20, 2018, through January 23, 2018, lasting 3 days. The fifth shutdown was from February 9, 2018, through February 9, 2018, lasting only a few hours. The sixth shutdown was from December 22, 2018, through January 25, 2019, lasting 25 days. The current shutdown started on October 1, 2025. These government shutdowns occurred for many different reasons. The first government shutdown in 1995 occurred due to disputes over budget cuts. The second government shutdown occurred later that same year over the same budgetary disagreements. 2013 represented the longest government shutdown up until that period.

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Why Capitalism is in Question?

Dr. Mohammed R. Ahmed, Webster University, FL

Dr. Betty E. Ahmed, Liberty University, VA

ABSTRACT

Around the world capitalism is perceived as a product of the western culture. The history of the East shows that the Mughal Empire planted the seeds of capitalism in the east during the 15th century. Capitalism is an economic growth process that was successfully implemented in the East in the early 15th century and the west for the last few centuries. The economic growth process called capitalism, why it is in question, and the movement toward conscious capitalism is explored in this paper. The paper presents a historical overview and conceptual framework for understanding why capitalism is in question and stakeholders and businesses are exploring conscious capitalism. The research shows that the environment is changing rapidly and with the change in environment we need ways to manage economic and business processes. Capitalism was understood as an economic growth process in the past and now we understand that it influences another external environment such as social and cultural environment. The current capitalism focus is on economic growth or profits for the business organization. It is the reason capitalism is in question because we are trying to use the old form of capitalism to manage a new economy. We need leadership, culture, concern for stakeholders to lead us into conscious capitalism that focus on economic growth of all the stakeholders in the economic system. Capitalism is an economic process, and we can assume it began with the emergence of the concept of trade. Trade, in simple terms, is the exchange of goods and services for money. In the barter system, the focus was on exchanging goods and services for value. The exchange of goods and services for gold, silver, and money built the foundation for capitalism. It allowed individuals and businesses to accumulate and store wealth, becoming richer through trade. One of the criticisms is that in capitalism, the rich get richer, the poor don’t. This is because businesses create wealth, and starting a business requires capital. The capital includes monetary, human, intellectual, and other capital. Individuals and companies with monetary capital can invest and utilize it to access human and intellectual capital. Human capital and intellectual capital involve the human factor, and when the human factor is involved, we must consider the values and beliefs of individuals, families, communities, and society. Capitalism is the process of achieving personal, social, political, technological, and economic growth, with fewer constraints and boundaries, to provide opportunities for everyone in the society to participate in that growth (Ahmed, 2010). Researchers have presented several explanations of capitalism, economists, and philosophers also tried to explain capitalism, and still there is no one single definition that clearly explains capitalism in a simple fashion. In eastern societies believes that capitalism is a process for the exploitation of markets and sowing the seeds of corruption. It is a system for choosing winners and losers, and a system for eliminating small businesses. In the west it is perceived as a road to growth and prosperity. The reason for lack of a clear understanding about capitalism is because the process of achieving growth involves multiple variables and outcomes. Sometimes it is difficult to define or explain capitalism to the people of the world because for decades it was labeled both east and west as a process to get rich at the expense of the poor. The growth in profits, or getting rich, is one of the outcomes of capitalism, and if we focus on only one of the outcomes of capitalism, it becomes an unattractive alternative for emerging, underdeveloped, and developed countries for managing growth (Ahmed, 2012). The history of the world shows that in every society growth is considered essential regardless of their political and social differences. To achieve growth in developed, underdeveloped, and emerging countries, their leaders must select capitalism, socialism, or a communist approach for managing growth. The political changes around the world have forced most of the communist countries to move towards socialism, and to look for opportunities in the capitalistic markets. A rational explanation of capitalism is that it is a designer process for achieving growth..

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Liquidity Provision in Informationally Fragmented Upstairs Markets

Dr. Orkunt Dalgic, State University of New York at New Paltz, NY

ABSTRACT

The ability of upstairs market makers to observe certain important characteristics of their customers is a distinguishing feature that contributes to the quality of execution, i.e. liquidity, provided by these markets. One such characteristic is a customer’s likelihood of trading, also termed “unexpressed demand” by Grossman (1992). However, the existence of switching costs can lead to investors using the upstairs market to limit their trading relationships to a small number of market makers, and upstairs market search costs can reduce the potential number of trade counterparties contacted during searches. Such costs would cause at least some of the information about upstairs market investors’ trading likelihoods to remain privately known by individual market makers. This paper develops a general framework where information about investors’ trading likelihoods is split into private and public components. An increase (decrease) in the proportion of private information reduces (improves) upstairs market execution quality relative to Grossman's (1992) model, and relative to the downstairs market. Moreover, when the proportion of private information is larger, an increase in the competitiveness of upstairs market making may lead to a greater reduction in upstairs market liquidity. The term “upstairs” market refers to a market where buyers and sellers negotiate trades in designated “upstairs” trading rooms of brokerage firms. On the other hand, a market such as an exchange floor or its electronic equivalent, is known as a “downstairs” market. Upstairs markets are generally believed to have certain special properties, which Seppi (1990) and Grossman (1992), among others, have argued improve liquidity provision. One such property is that upstairs market makers know the identities, and other characteristics, of their customers. (1) Seppi (1990) argues that superior knowledge of customers allows upstairs market brokers to screen informed trades, which enhances upstairs market liquidity. Robust empirical support for Seppi’s (1990) screening hypothesis, by Smith, Turnbull and White (1999) among others, implies that superior knowledge of customers is a distinguishing characteristic of upstairs market brokers. Furthermore, Grossman (1992) argues that familiarity with investors' trading preferences and willingness to trade in certain states of the world allows upstairs market makers to provide enhanced market liquidity. For instance, customers may want an upstairs market broker to buy or sell a certain quantity of stock repeatedly in pre-specified intervals or whenever the price falls within a pre-specified range. If a large enough number of shares of a relatively illiquid stock will be traded, the order may need to be executed in multiple transactions over long periods. In such cases, upstairs market makers can learn information that will affect the future price of the security. Grossman (1992) refers to investors’ likelihood of future trading as the unexpressed demand of investors. Bessembinder and Venkataraman (2004) use data from the Paris Bourse, and Booth, Lin, Martikainen, and Tse (2002) use data from the Helsinki Stock Exchange to find strong evidence consistent with the hypotheses of Grossman (1992) and Seppi (1990). In Grossman’s theoretical model (1992), the upstairs market is composed of identical market makers that observe the expressed and unexpressed demands of all investors using the upstairs market, i.e. the total upstairs market order flow. (2) However, faced with switching costs, investors are likely to concentrate trades with a small number of upstairs market brokers, especially for the most frequently traded, i.e. liquid, securities. Moreover, the search costs of upstairs brokers will limit the number of counterparties they contact during searches. These costs will make it likely that at least some portion of the unexpressed demand of investors will be hidden from the upstairs market. Although trading and professional relationships among upstairs market makers may enable the dissemination of information about investors’ trading likelihoods and preferences, potential losses from front-running practices are likely to reduce information sharing. (3)

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Team Effectiveness and Leader-Follower Agreement: An Empirical Study

Dr. Susan D. Baker, Morgan State University, Baltimore, MD

Dr. Daniel A. Gerlowski, University of Baltimore, Baltimore, MD

ABSTRACT

The role of teams in organizations has become a dominant theme in theoretical, applied, and empirical research. This paper is grounded in the literatures of leadership, followership, and team effectiveness. It builds on the work of Sundstrom, McIntyre, Halfhill, and Richards (2000), which called attention to the role of team composition in determining team effectiveness in the workplace. Our research attempts to determine whether leader-follower agreement about leader and follower characteristics effects team effectiveness. Further, team abilities and skills represents an area that has reached into most business program curricula as well as becoming a standard skill set required in many occupations at multiple levels. A related literature focusing on leadership developed over time, and more recently, this literature has been extended to include research on followership. This paper is grounded in the team, leadership, and followership literatures. It extends the work of Sundstrom, McIntyre, Halfhill, and Richards (2000), which called attention to the relationship between team composition and team effectiveness, into issues addressed in the leadership and followership literatures. Our empirical analysis concerns team effectiveness as a function of team homo- or heterogeneity along leadership and followership dimensions controlling for socio-demographic differences among team members. Our work relies on survey data from six sites of healthcare organizations in the mid-Atlantic region, drawn in the fourth quarter of 2005. Respondents completed a questionnaire containing the Leadership Inventory Practices-Self (LPI) (Kouzes and Posner, 2003a), the Performance and Relationship Questionnaire (PRQ) (Rosenbach, Pittman, and Potter III, 1996), and questions about broad socio-demographic status. The LPI and the PRQ instruments provided data on the respondent’s leadership and followership characteristics. Survey distribution ensured that each respondent’s team was identified. Supervisors who normally evaluated all teams’ performance were asked to provide information on team effectiveness. To determine whether leader-follower agreement about leader and follower characteristics impacts team effectiveness, we employed a variety of empirical tools. In each case the null hypothesis states that agreement between team leader and team members on selected survey instruments dealing with leader and follower characteristics does not impact team effectiveness. The alternative, or research hypothesis, states that homogeneity between leader and follower characteristics does impact team effectiveness. We define key terms used throughout this research to ensure a common framework clarify the main constructs used and to place them in the context of their literatures. The three constructs examined in this study are team effectiveness, leadership and followership. All three constructs are grounded in the literature of their respective fields. In today’s organizational milieu and behavioral literature, “teams” receive much attention, whether the team under discussion is called a work group, a work team, a high performing team, an effective team, a self-directed work team, or a leaderless team. The growth of team literature has occurred in conjunction with changes that have occurred in the American workplace since the 1980's when the profits and market shares of hierarchical, vertically integrated American companies were challenged by streamlined global competitors (Orsburn and Moran, 2000).

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Improving IT Service Delivery Quality: A Case Investigation

Dr. Jihong Zeng, New York Institute of Technology, Old Westbury, NY

Abstract

In the e-commerce environment, business has increasing dependency on information technology (IT) to deliver services to customers. IT service availability has dramatic influence on customer satisfaction and corporate reputation of the enterprise. Consequently, the demand for 24 x 7 service availability is greater than ever. Information systems which provide information infrastructure for business applications have become a critical and integral component for business service delivery. System downtime means lost of revenue and competitive advantage for the business. The business requires IT service providers and information system managers to ensure that service-affecting incidents do not occur, or that efficient and effective remediation must be taken to provide high-availability services. A lot efforts and improvement have been made to ensure high-availability in each individual technology industry. However, not enough focus has been given on how to improve the overall end-to-end IT service availability from end-user’s perspective. Without visibility into the overall availability of underlying components including information systems, applications and operational processes, it is impossible to make informed business decisions about IT resources. This paper introduces ITIL availability management concept and presents how to apply ITIL best practices to decompose service delivery into components or subsystems. Block diagram modeling technique is deployed to assess the overall service availability. This holistic approach helps pinpoint the bottlenecks to the required service level. It also demonstrates the capability to help provide cost-effective solutions to improve service delivery for existing as well as future application and infrastructure design and implementation in a highly competitive e-business environment. Service availability has become one of the most important aspects of service delivery in the highly visible e-business economy. Consequently, the demand for 24-hour a day, 7 days a week operation is greater than ever. Over the past decade, information technology (IT) has transitioned into a critical role in the enterprise, which not only supports business service delivery but also help business to constantly drive innovation and improvement in order to gain edge over other competitors. IT service downtime imposes huge loss of revenue for large enterprise. As an example, table 1 lists service availability, equivalent downtime and average annual revenue loss for various industries based on the research survey by Meta Group (Meta Group, 2000). Service availability also has dramatic impact on customer satisfaction and corporate reputation. It is particular true while your customers are just a mouse click away from your competitor’s offerings in the highly competitive e-business environment (Fisher, 2000). High availability is not new in IT industry. A lot efforts and improvement have been made to ensure high-availability in each technology industry. However, risks to service availability may be caused by technology, process as well as human error throughout the whole IT infrastructure and within every management process (Pope, 1986). There is not enough research and focus given on understanding and improving the overall end-to-end IT service availability from end-user’s perspective. Without visibility into the overall availability of underlying service delivery components including information systems, applications and operational processes, it is impossible to make informed business decisions about IT resources investment to provide cost-effective solutions to address the service level requirements from customers. Over the years, organizations are becoming increasingly dependent on IT to fulfill their corporate objectives.

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Relationship Between the Use of Internet Information for Health Purposes and Medical Resource Consumption for an

English-Speaking Sample

Dr. Hager Khechine, Laval University, Canada

Dr. Daniel Pascot, Laval University, Canada

Dr. Pierre Prémont, Laval University, Canada

Abstract

Many researchers in the fields of information systems and medical sciences are showing special interest on Internet use for health-related matters because the Internet is becoming an important source of information for patients and clinicians. Indeed, statistics reveal that almost 113 million U.S. citizens looked for health information on the Internet in 2006. The purpose of this research is to study the relationship between the use of Internet information by English-speaking patients and their consumption of medical resources. We perform a quantitative study based on a ten-item questionnaire. The sample is made of 120 patients suffering from a long-term disease and accustomed to the use of the Internet for health-related issues. Construct validity and reliability were ensured. Most items have loadings greater than 0.5. The path coefficient between the variables is significant and high. We conclude that the use of health information by patients is contributing to increase their healthcare resource consumption. This result can be explained by the fact that patients may misunderstand, be overwhelmed, or be confused by the poor quality of the information obtained from the Internet. We expect this study to have a theoretical and practical impact on the fields of management information systems and medical sciences. Indeed, we believe researchers should be concerned about the role that Internet information can play in the management of medical systems and about the design of health-related Websites. During the last decade, the number of scientific meetings and studies about the use of online health-related information by patients has dramatically increased. Many topics have been investigated or sometimes theoretically treated. For instance, some studies have focused on the effects of the Internet on the "Patient-clinician" relationship (Hjortdahl et al., 1999; Anderson et al., 2003). Researchers have try also tried to understand the impact of the Internet on the quality of the healthcare services (Eysenbach et al., 1999). A survey of Pew Internet & American Life (2003) concluded that Internet information helps patients improve their health state, prepare the meetings with physicians, and decide if other medical consultations are necessary. The topic of this research deals with the field of ″cybermedicine″. In particular, we are interested in studying the distribution and use of health-related information online by the patients. Numerous health professionals are opposed to the growth of cybermedicine due to its harmful effects on patients. This research attempts to raise concern about the use of medical information displayed on the Internet. This paper is organized as follow: we first present the background related to the use of Internet for health purposes. Next, we explain the objective of the research and the research model. Methods for data collection and analysis are detailed in the following section. We end the paper with the results, some topics of discussion, and the conclusion. A growing number of websites are dedicated to health. Those websites offer medical information that helps patients make decisions about their health (Mittman and Cain, 1999). Some surveys claim that the number of websites related to health issues was over 15000 in 1998 (Miller and Reents, 1998). This number reached 20000 in 2000 (Bush et al., 2000). To our knowledge, there is no exact estimation of the number of websites specializing in healthcare. Due to its dramatic growth of this Internet sector, no more statistics have been carried out on this particular topic since 2000. Mittman and Cain identify two driving forces that contribute to this growth. The first one is the ″pull″ factor, which deals with the growth in consumer demands for more health products and services. The second force is the ″push″ factor related to the market pressures aiming to meet patients’ needs and to create new ones (Mittman and Cain, 1999).

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Determinants of Perceived Customer-Centrism in Managing Information About Customers

Dr. Joseph S. Mollick, Texas A&M University-Corpus Christi, Corpus Christi, TX

Abstract

Consumers’ concern about information privacy grows as organizational processes evolve in their ability to store and share information resources through the use of databases and computer networks. We test the effects of three privacy policies on customers’ perception of an organization’s customer centrism in the way it manages the practices of sharing or disclosing information about customers. Using a 2x2x2 experimental design and data from subjects who are business students at a US university, the present study examines the effects of policies concerning customers’ ability to authorize disclosure, ability to limit target of disclosure_,and customers’ ability to edit/delete data in personal profiles over the Internet on customers’ perception of an organization’s customer-centricism in managing customers’ personal information. Results indicate that the hypothesized main effects of three privacy policy variables on customers’ perception an organization’s customer-centrism are statistically significant. Findings from this research have implications for managers, customers, regulators, and researchers. Organizations utilize information resources to achieve their goals. Models of utilization of information and knowledge resources involve collection, storage and sharing of these intangible resources (Widén-Wulff and Suomi, 2007). Organizations implementing these models are increasingly becoming information-intensive. Some information about customers, employees, suppliers, and alliance partners are valued as private, confidential and sensitive by the people about whom such information is collected. As computerized information and communication systems become the network of nerves and veins through which data flow within and between organizations, concern for security and privacy of personal data increases (Khosrow-Pour, 2004; Korba, Song and Yee, 2007). For example, data collected about customers’ economic status and habits, credit card users’ spending habits, or Internet shoppers’ spending and browsing habits can be abused by marketers, among others. The problem becomes acute when organizations share private data with affiliates and strategic partners outside an organization. As abuses of consumers’ information privacy are reported in the popular media, public’s demand for privacy become a loud outcry, drawing attention of governmental agencies and lawmakers. Surveys conducted over the past two decades suggest that most Americans value privacy to be as important as any right granted by the constitution (Alderman & Kennedy, 1995). So, consumers’ demand for information privacy needs to be managed by organizations with due care using policies that are perceived by customers as customer-centric. One main issue relevant to organization theory is that of power struggle among different stakeholders (Dhillon, 2004; Cordoba, 2007). Businesses exercise power over individual customers whom they purport to serve even though the ultimate sources of this power are the customers themselves. Organizations compete for customers. One resource that can help an organization compete is information and knowledge about customers. Sometimes, information is shared with strategic alliance partners to have a competitive advantage over competitors in the marketing war to win and retain customers. Organizations and individual employees can trade one kind of information and knowledge in exchange for another kind of information and knowledge about customers or in exchange for other benefits. However, when organizations do not respect customers’ rights and preferences in the way they collect, store, use, share and disseminate customers’ private information, customers can feel powerless and entrapped. The basic theory behind the three independent variables in this study is that organizations, in order to be perceived by customers as customer-centric in how they management information and knowledge about customers, should adopt information management policies that empower and respect customers. One way to empower customers is to ask them for their consent, permission or authorization before collecting, using and releasing any information about them and/or restricting the release, access or sharing of customers’ information with sub-units, branches, affiliates, alliance partners and others. Fair information management should allow customers to (a) know how organizations use personal information, (b) have the right to prevent secondary use of personal data, and (c) feel secure that organizations will take reasonable precautions to prevent misuse of personal information (Culnan, Smith, & Bies, 1994). Letting customers have the power to control access, sharing and disclosure of information in their personal accounts and profiles and letting them edit or delete their personal data is a way to empower customers and show respect for their rights and preferences.

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