The Business Review, Cambridge

Vol. 22 * Number 1 * Summer. 2014

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

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  Marketing Vineyards and their Regions

Dr. Stacy M. P. Schmidt, California State University, Bakersfield, CA

Dr. David L. Ralph, Pepperdine University, CA



Vineyards provide wine to restaurants, liquor stores, and grocery stores.  Vineyards also have opened their vineyards to the public for wine testing.  Thus, it has become vital for vineyards to have marketing strategies to market their vineyards.  A region can also use the vineyard as a marketing tool to encourage and entice tourism to the area.  Marketing can be utilized to increase brand recognition, boost wine consumption, and increase revenues. The vineyards can target a variety of markets. Wine consumption is important to know as well as knowing the pairing of the wines with specific markets.  One market is the new generation of the Millenials.  The Millenials is a generation that represents one-fourth of the US population and is also known as the “online generation”.  The special characteristics and behaviors of this generation requires a variety of marketing tools.  Wine consumption plays an important role in the marketing of a vineyard.  Thus, it is important for a vineyard to be knowledgeable in consumption data and trends.  Understanding the trends in wine consumption provides valuable information on not only who to market the wine to but also what to market.  Vineyards provide wine to restaurants, liquor stores, and grocery stores.  Vineyards also have opened their vineyards to the public for wine testing.  Thus, it has become vital for vineyards to have marketing strategies to market their vineyards.  A region can also use the vineyard as a marketing tool to encourage and entice tourism to the area.  Marketing can be utilized to increase brand recognition, boost wine consumption, and increase revenues. The vineyards can target a variety of markets. Wine consumption is important to know as well as knowing the pairing of the wines with specific markets.  According to the Wine Institute, 2.73 gallons of wine are consumed annually, per resident in the United States, and the numbers are increasing as the demographics of the wine industry change.  One market is the new generation of the Millenials.  The Millenials (Mintel Report Millenial, 2013) is a generation that represents one-fourth of the US population and is also known as the “online generation”.  The special characteristics and behaviors of this generation requires a variety of marketing tools.  The Millennial Generation (current ages 21 to 34) leads the way with 84 million people part of this demographic.  In addition, 28% of the youngest group of Millennials (ages 21 to 27) drink wine daily. The Millennials  (Newman, 2013) are in no doubt driving trends, but changes in the wine consumption demographic also come from more diversity in the wine consumer market, with more Hispanic, African American and Asian people consuming wine. Nonetheless, the generation of Baby Boomers still dominates the statistics for wine consumption, followed by Generation Y. According to Mintel research (2012), 46% of wine drinkers have consumed wine in their homes or someone else’s, with 10% of the wine drinker population increasing their consumption in the past year. According to the same survey, people believed that domestic wines produced in California were not as sophisticated or high in quality as wines imported from other countries. Based on research provided by Mintel, the latest trends within the wine industry as a whole are targeting the Millennial Generation and simplifying the wine drinking experience. As the Millennial Generation becomes of legal drinking age they drink wine at above average consumption levels and 30-34% of this generation describe themselves as high frequency wine drinkers.


Creighton University Student Managed Investment Fund

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



The Creighton University student managed investment fund was started in 1992 by Dr. Robert Johnson with $100,000.  Over the past 22 years the fund has grown in assets under management through reinvestments and additional contributions to about $5 million.  Although the investment philosophy has changed over the years, the main aim of the course called the Portfolio Practicum has remained the same – to educate undergraduate students through hands-on, real-world investment management.  The Portfolio Practicum has consistently outperformed the S&P 500 Index both on a total return and on a risk-adjusted rate of return basis.  Former practicum students have gone on to jobs as financial analysts on Wall Street at many of the leading investment banking firms, portfolio managers at mutual funds, presidents of banks, partners at accounting firms, as well as doctors, dentists, lawyers and pharmacists.  The Portfolio Practicum class is an experiential learning course in the Creighton University Heider College of Business curriculum.  The course is designed for a select group of undergraduate students to manage the investment of real money into an equity fund.  The main objective of the course is education with the outcome of improving job placement opportunities of graduates as they enter the first phase of their professional careers.  In this regard the course has been incredibly successful.  While there is no portfolio performance requirement, the students’ success has been phenomenal.  The Portfolio Practicum class is one in which students manage real money for Creighton University’s endowment fund.  Admission into the two-semester sequence is highly competitive.  On average, 40 students apply for 16 positions in the class.  The application process includes a recommendation from a business professor, submission of a resume, a personal interview with the previous class participants and faculty members, and selection by a faculty committee.  The class is composed of students who have the highest intellectual level of any course offering in the university.  The average grade point average (GPA) for Practicum students is about 3.7 on a 4.0 scale.  Many of the students aggressively pursue careers in investments, with most choosing to intern along the way at brokerage companies, investments divisions in nationally prominent insurance companies, and the capital markets areas of Fortune 500 firms.  From this class we have averaged 4 students going on to law school, 2 students going to Wall Street analyst positions, and one student going on to medical/dental/pharmacy programs each year.  Successful portfolio performance has encouraged the university to increase assets under student management from $100,000 in 1992 to $5.2 million ending 2013. The Portfolio Practicum is a two-semester sequence of courses in the Heider College of Business, Portfolio Practicum I and Portfolio Practicum II.  Both semester courses have been designated as senior-level Honors courses in our university Honors Program.  Only Heider College of Business students can be admitted into the class.  The prerequisites for the class include the core courses of the two principle of Accounting courses, Macroeconomics, Microeconomics, Business Statistics, Ethics, Managerial Finance and Investment Analysis.  Traditionally the Portfolio Practicum I course has been focused on financial analysis.  The idea is to require readings that educate students as Junior Financial Analysts.  The curriculum has followed the Chartered Financial Analyst (CFA) Level 1 readings and many students take the CFA Level 1 exam after their two course sequence.  The Portfolio Practicum II course has focused on Modern Portfolio Management.  The primary textbook is Managing Investment Portfolios:  A Dynamic Process (3rd Edition) by Maginn, Tuttle, McLeavey, and E. Pinto.  This book plays a pivotal role in the CFA curriculum.  The emphasis of the book centers around Modern Portfolio Theory and Efficient Market analysis, the Efficient Frontier and the Capital Market Line, the Capital Asset Pricing Model and the Security Market Line, and readings on Alternative Investments.  In 2014 we have added Strategic Value Investing: Practical Techniques of Leading Value Investors by Horan, Johnson and Robinson.  The following sections detail the structure of the course, its educational dimensions, and the fund’s performance over time.  


Gold and Sovereign Credit Risk

Dr. Chih-Chieh (Jason) Chiu, Rider University, Lawrenceville, NJ

Dr. Mitchell Ratner, Rider University, Lawrenceville, NJ



This study tests gold as a hedge and safe haven asset against sovereign credit risk in 24 countries around the world from 2005-2012. GARCH dynamic conditional correlation analysis indicates that gold provides a safe haven in times of extreme market volatility and during periods of credit downgrades in most countries. However, gold does not serve as an effective hedge against sovereign credit risk. Investors have long regarded gold as a hedge and safe haven asset against economic instability. In this paper, we examine the role of gold in protecting investors against sovereign credit risk. We address the following question: Is gold a hedge and safe haven against sovereign credit risk? Using return data from 24 countries, we find that gold is a safe haven against sovereign credit risk in most, but not all countries, especially during periods of sovereign credit downgrades. However, we find little evidence of gold as a hedge against sovereign credit risk.   We study the association between gold prices and sovereign credit risk. We use sovereign credit default swap (CDS) returns as a proxy for sovereign credit risk. Specifically, we measure the sovereign credit risk by using the CDS indices for the 24 countries in our sample. Credit default swaps (CDS) protect against the risk of a “credit event” such as a bond restructuring or default. They are liquid financial products that can be traded in over-the-counter secondary markets, represent underlying country credit risk, and react immediately to new public information. In contrast to bonds that contain both credit risk and interest rate risk, CDS reflect only credit risk. Investors who purchase CDS are taking a “short” position, benefiting from a decline in credit quality of the underlying country.  Alternatively, investors who sell CDS are taking a “long” position with increasing profits as the underlying country improves in credit quality. Following Baur and Lucey (2010), we define a hedge for sovereign credit risk as an asset that is uncorrelated or positively correlated with the CDS indices on average. In addition, a safe haven asset is uncorrelated or positively correlated with the CDS price movements during extreme market conditions. We demonstrate that the correlation structure between gold and CDS returns are non-constant, necessitating the use of time-varying methodology.  GARCH-based dynamic conditional correlation (DCC) analysis shows that gold serves as a safe haven in times of extreme market movements and during periods of credit downgrades in a number of markets.  However, DCC analysis documents that gold does not provide a hedge against sovereign credit risk.  Gold enjoys the reputation of being a hedge against inflation. Jastram [1978] demonstrates gold’s constancy in maintaining purchasing power in the long run. This “golden constant,” according to Leyland [2009], is due to the metal’s appeal as a store of wealth during economic fluctuations. The historical inverse relationship between inflation and the U.S. dollar suggests that gold is also a currency hedge. Using different economic models, both Capie et al. (2005) and Joy (2011) show that gold is a good hedge for the U.S. dollar. Studies also demonstrate that gold, as a stand-alone investment, is superior to platinum and silver (Conover et al. [2009]) and could lower portfolio risk (Baur [2012]).  Some studies in the literature investigate gold as a hedge and safe haven asset for the stock and bond markets. Baur and Lucey [2010] examine gold as a hedge and safe haven for the United States, United Kingdom and German stock and bond markets. They find gold is a hedge and safe haven for the stock markets, but not the bond markets. Baur and McDermott [2010] analyze developed and emerging markets around the world. Their results suggest that gold is a hedge and safe haven for the stock markets of major developed countries in Europe such as France and Italy.


Why Do Some IT Firms Dispense with Executive Stock Option Award?

Dr. Philemon Rakoto, HEC Montreal, Montreal, Quebec, Canada



This paper examines the determinants of CEO stock option award in listed Canadian IT firms from 2010 to 2012. A non-negligible proportion of Canadian IT firms do not award stock options to their CEOs even though it is firms in this sector that popularized executive stock option award. The study was conducted on a sample of 122 unique firms. The results suggest that IT firms award stock options to retain highly skilled CEOs. The findings also suggest that the presence of an important block holder in a firm’s share ownership allows the firm to dispense with awarding stock options to the CEO because it has other means of monitoring executives’ actions.  This result is consistent with agency theory. Overall, the findings provide evidence to support several theoretical predictions, adding to our understanding of executive incentives.  Employee stock option plans were popularized by successful IT firms like Microsoft and Cisco Systems. The implementation of stock option plans created considerable personal wealth for the early employees of these businesses. Executive stock option award can be explained by agency theory. This theory states that the interests of executives and shareholders should be aligned to reduce conflicts of interest between them. The holding of stock options by corporate managers thus helps resolve agency conflicts by aligning the firm’s managerial decisions with shareholders’ interests.  However, today many IT firms do not award stock options to their executives. The literature on manager compensation has identified a number of firm-specific factors and determinants of stock option compensation. Most of these studies have focused on the US market, where stock ownership is widely diffused. These studies do not target a specific sector.  The objective of this paper is to determine the factors linked to executive stock option award in a different context than those found in the US market. We also seek to explain the anomaly observed among IT firms, mentioned in the previous paragraph. The Canadian stock ownership structure is more variable than those observed in the US market. Notably, in Canada a small group of large block holders, or affiliated groups of investors, dominate share ownership in some cases. This paper is organized as follows. The section below provides a review of the literature and develops the hypotheses regarding relations between dependent and independent variables. The next sections present the research design and discuss the results. The final section concludes the paper. First, the popularity of stock option award in IT firms is documented. Then, several causes for adoption of executive stock options are considered, namely retention of talented executives, firm liquidity problems, ownership concentration and institutional investor monitoring.  The accounting rules governing employee stock options prior to 2005 encourage companies to record stock option expenses based on “fair market value” at the date of the option award, but it also allows the alternative of reporting stock option expenses using the “intrinsic value” method prescribed by Accounting Principles Board Opinion No. 25 (APB 25), if information about the fair value of the option at the grant date is disclosed in a footnote to the financial statements. Under the intrinsic value method, companies could avoid any employee stock option expense if options are granted with an exercise price equal to the grant-date market price of the underlying stock (i.e., at the money). Not surprisingly, nearly all companies followed the intrinsic value method and issued at-the-money options. The lack of employee stock option expensing came under attack after Enron and other major accounting scandals. To address this concern and improve the transparency of financial reporting, the FASB issued an exposure draft in March 2004 followed by a final standard, SFAS 123R, in December 2004 that requires the recognition of employee stock option expenses using the fair value method. In response to the issuance of SFAS 123R, firms cut back option-based compensation for their top five executives by 28 percent on average (Brown and Lee, 2007). However, contrary to what was observed in many industries, U.S. IT firms continue to offer stock options as a significant part of their employee compensation packages. According to Aon Consulting's Radford Surveys group reported in The Business Journal (, November 15, 2005), 89% of public IT firms that have decided on a post-FAS 123R strategy say stock options will continue to be offered to employees.


Can Stand-Alone Increases in Instruction Expenditures Influence Native Hawaiian Public School Completion?

Dr. Larson Ng, University of Hawai‘i at Mānoa, Honolulu, Hawai‘i



The following study attempted to analyze whether higher numbers of public high school completers can alone be achieved through increases of instruction expenditures among Native Hawaiians students. Using the high schools that comprise the predominately populated Native Hawaiian Leeward District, a correlation and bivariate regression procedure were employed to determine the nature and econometric relationship between instruction expenditures and high school completion from 2000 to 2007. Although instruction expenditures had predominately increased for all high schools, increases in completion were not observed for all schools. Moreover, with the exception of Kapolei High School, there was no conclusive econometric evidence to substantiate the idea that more expenditure in instruction leads to higher levels of high school completion during 2000 to 2007.   In the case of Native Hawaiian education, although Hawaii’s Department of Education (DOE) has historically allocated millions of dollars to further the advancement of Native Hawaiian students, Native Hawaiian’s are still the least likely ethnic group to graduate high school (Kanaiaupuni, Malone, & Ishibashi, 2005). Given the population density of Native Hawaiians living on the Leeward Coast of Hawaii’s Island of Oahu (Hawaii Department of Business, n.d.), this study will attempt to test whether stand-alone increases in instruction expenditures result in higher numbers of high school completion by analyzing the DOE’s high school instruction expenditures (i.e., teacher salaries and benefits, substitutes, instructional paraprofessionals, pupil-use technology, software and instructional materials, trips, and supplies) and its econometric relationship with high school completers (Hawaii Department of Education, n.d.a). With this research, it is hoped that the results will provide a current snapshot of whether increased instruction funding will improve public high school completion valid among Native Hawaiian students.  The following section will go over the high school instruction expenditures, size of its graduation classes, and high school completers for all of the high schools that comprise the DOE’s Leeward District from 2000 to 2007.  Campbell High School: Based on Table A1, instruction expenditures have been consistently increasing on an average of 7.1% with a standard deviation of $1,387,127 per year, respectively. Graduating classes has seen steady of growth during this period and had an overall average growth rate of 1.8% with a standard deviation of 39 students per year, respectively. Completers also experienced a similar trend during this time frame with an average growth rate of 3.3% and a standard deviation of 41 students per year, respectively.  Kapolei High School: Based on Table A2, instruction expenditures have been consistently increasing on an average of 38.8% with a standard deviation of $2,830,491 per year, respectively. Graduating classes has seen much growth during this period and had an average growth rate of 8.4% with a standard deviation of 219 students per year, respectively. Completers also experienced similar growth during this time frame with an average growth rate of 8.0% and a standard deviation of 51 students per year, respectively.  Nanakuli High and Intermediate School: Based on Table A3, instruction expenditures have been consistently increasing on an average of 4.8% with a standard deviation of $770,329 per year, respectively. Graduating classes has seen marginal growth during this period and had an average growth rate of 0.4% with a standard deviation of 12 students per year, respectively. Completers conversely experienced similar negative marginal decline during this time frame with a negative average growth rate of -0.4% and a standard deviation of 16 students per year, respectively.


Business Performance Factors, Elements of Employee Satisfaction and Company Value - Theoretical Considerations and Empirical Evidence

Dr. Josef Neuert, Professor, Fulda University, Fulda, Germany

Hans-Jurgen Brenninger, University of Latvia, Riga, Latvia, Freilassing, Germany



Human capital and human resources management have been in the focus of business administration and economic research ever since, both from a professional and academic angle (i.e. von Rosenstiel L. 2003, Malik F. 2006). In particular, many research studies and management theories have dealt with the development and the implementation of personnel management concepts, emphasizing the role of leadership, motivation, incentives, employee satisfaction etc. i.e. Malik 2006, Freeman 1978 and Herzberg 1957). But still, from the authors` point of view, there is a lack of research studies into the cause-effect relation between business performance, employee satisfaction and company value. This research paper tries to contribute to the fulfillment of this fairly “empty research space”. The main hypothesis claims that employee satisfaction has an impact on business performance. This proposition is outlined theoretically and being subject to an empirical and quantitative analysis.  The question, which factors determine business performance and company success has been heavily disputed in business practice and management research. (Heskett, J.L., Jones, T.O., Loveman, G.W., Sasser, W.E. Jr and Schlesinger 1994, Hurley Robert F. and Estelami Hooman, 2007). Numerous studies have been conducted in order to discover the influencing variables, especially focusing on factors like product portfolio, marketing strategy, state of technology, intensity of competition, degree of innovation, customer relationship etc. (Rubera G., Kirca A. H. 2012; Henard, D. Szymanski D. 2001). In this context very frequently, and in particular, employee motivation and employee satisfaction have played a preeminent role in many works, claiming that there is an obvious relationship between employee satisfaction and company value e.g. (Smithey Fulmer I., Gerhard B., Scott K. S., 2003). Moreover, it is presumed that employee satisfaction can be seriously handled by business management and thus also financial results and the performance of companies in general can be significantly influenced by managerial conduct. (von Rosenstiel L. 2003, Malik F. 2006) .The main hypothesis of the underlying research paper is the statement that “Employee Satisfaction has an Impact on  Company Value”, among other independent variables, and that this relationship can be formalized by way of a multiple cause-effect-function.  There are several studies regarding employee satisfaction and their impact on company success from the USA, especially from Ingrid Smithey Fulmer, Barry Gerhard, Kimberly S. Scott (Smithey Fulmer I., Gerhard B., Scott K. S., 2003) and Eric J. Romero University of Texas-Pan American (Romero E. J., 2004). Those studies show that there is a cause-effect relation between employee satisfaction and company value.  In this research, for the first time, an empirical study in Germany is based on a time series investigation and – as far as this primary analysis is concerned – on real world data from official sources of the public authorities in combination with results from the “Great Place to Work Contest”.  In a primary data analysis the authors compared a sample of 30 German companies which took part in the “Great Place Contests” 2007 and/or 2009 regarding their “Equity Values” and “Great Place to Work Scores” with a sample of 30 randomly selected German companies, which did not compete in this contest.  The figures of those companies were provided to the authors in an anonymous form. The authors tried to select companies, which show their financial data in the “Elektronischer Bundesanzeiger” (the “Elektronischer Bundesanzeiger” is the official statistical source of the German Government). Generally, it can be stated that after comparing the results of the “Great Place to Work” contest 2007 and 2009 and the financial data of the 30 GPTW companies and the other randomly selected ones, our research shows evidence of an impact of employee satisfaction on company value, among other influencing variables.


The Value of Health Care Sustainability

Dr. Dennis F. X. Mathaisel, Professor of Management Science, Babson College, Babson Park, MA

Dr. Clare L. Comm, Professor of Marketing, University of Massachusetts, Lowell, MA



The sustainability of the U.S. Healthcare industry has been in question for decades.  Industry analysts have focused on assigning blame among the various industry players: Federal and State governments, pharmaceutical companies, medical device manufacturers, direct care providers (hospitals, general physicians, outpatient facilities, etc.), and medical insurers.  However, until recently the conversation has been limited primarily to cost accounting.  In actuality, healthcare system sustainability is the ability to remain productive long term while minimizing waste and creating value.  To be resilient, the health care enterprise must possess five “abilities”: availability; dependability; capability; affordability; and marketability. This paper presents a strategy for health care sustainability based on the value of these five abilities. In ecology, sustainability describes how biological species survive. For the environment, it is assessing whether or not project outputs can be produced without permanent and unacceptable changes in the natural equilibrium. For humans, it is our long-term physical and cultural well-being. For mechanical systems and structures, it is maximizing reliability while conserving required resources and reducing waste. For the U.S. Healthcare System, it is the ability of the system, its products and services, its functional systems to remain competitive and productive, and efficient long term, without failure, while minimizing waste.  Sustainability and sustainable development have become popular goals. They have also become wide-ranging terms that can be applied to any entity or enterprise on a local or a global scale for long time periods. Sustainability has many interpretations. Recently, the term has been used more in the context of “green”, which refers to having no negative impact on the environment, community, society, or economy (Bromley 2008). However, the traditional meaning centers around the words “endure”, “maintain”, or “support”, which is the focus of this paper. Here, “sustainability” is the goal of maintaining an entity’s readiness and operational capability of systems or services through the adoption of a strategy or prescription that meets established performance requirements in the most effective, efficient manner over the entity’s life cycle. The scope varies among entities, of course, but it does include the key word “ability”. Thus, to be sustainable, an enterprise must possess the following abilities: availability, dependability, capability, affordability, and marketability. The focus of this paper is on value, which is a trade-off between dependability, capability, and affordability. Most of the work on sustainability has focused on systems: ecosystems, biosystems, or mechanical systems.  A few articles have considered how these systems, the entity, or enterprise can become sustainable. Morris (2010)  looked at economics and sustainability.  She maintaines that sustainability seeks to balance three things: (1) economic growth, development, or well being; (2) ecological or environmental  protection and preservation; and  (3) socioeconomic equity and equality.  The main thrust of her research was that sustainability must be taught from the economic perspective. Similarly, in 2002 Dyllickand and Hockerts focused on three dimensions of sustainability. They looked at economically sustainable companies that guarantee cashflow position sufficient to ensure liquidity while producing a persistent above-average return to investors.  The second dimension considered ecologically sustainable companies that use only natural resources that are consumed at a rate below the natural production, or at a rate below the development of substitutes.  These companies do not cause emissions that accumulate in the environment at a rate beyond the capacity of the natural system to absorb or assimilate these emissions, and they do not engage in activity that degrades eco-system services.  The third dimension  is socially sustainable companies that add value to communities within which they operate by increasing the human capital of individual partners as well as to further the societal capital of these communities.  These companies manage social capital in such a way that stakeholders can understand their motivations and can broadly agree with the companies’ value systems.


Issues in the Health Care System in Madang Province, Papua New Guinea

Dr. Murray Prideaux, James Cook University, Townsville, Australia



Papua New Guinea (PNG) has one of the most underperforming health systems in the Asia-Pacific region, despite several incentives undertaken in the past decade. This paper explores non-clinical leadership and management context, barriers and issues of health delivery in Madang Province, PNG. Health services are decentralised with leadership and management roles, finance and service delivery devolved to provincial and district governments. Provincial authorities retain significant autonomy and compelled to follow national policy directives. Findings point to important leadership and management barriers including ineffective leadership and management competencies and weak political and institutional capacity. There is the paucity of research in health services leadership and management in developing nations in the Asia-Pacific region. This research engages a qualitative design based on semi-structured interviews with health leaders and managers in Madang Province. Interviews were recorded, subject to discourse analysis then findings were evaluated against extant literature. This study contributes to the literature by exploring health leadership and management at provincial and district levels in one of PNG’s twenty provinces. The findings help to better understand the complex interplay of factors in health delivery in a developing country.  Leadership, supported by competent management are intuitively recognised as important drivers of change and innovation and often cited as critical elements in achieving successful health outcomes (Buttigieg & West, 2013). Much of the extant leadership and management literature attempts to identify how leaders and managers influence organisational outcomes primarily Western corporate business life. Underpinned by psychology and positivist social science methodologies research has characterised traits, styles, attributes, competencies and behaviours of individual managers and leaders (Evans et al., 2014).  More recently, context barriers and issues have received increasing research attention in recognition that different situations require different leadership and management approaches (Jepson, 2009; Prideaux, 2013). This study examines non-clinical leadership and management in Papua New Guinea (PNG) to extend our understanding of context, barriers and issues in the health sector in a developing nation.   The healthcare sector continually faces the challenge of delivering high quality care to those who need it, at an affordable cost (Littlejohns, Weale, Chalkidou, Faden, & Teerawattananon, 2012); is crucial to improving population health and reducing premature mortality (Macinko, Starfield, & Shi, 2003), and contributes to a nations quality of life. Further, the sector is undergoing significant transformation (Gaynor & Hass-Wilson, 1999; Kumar, Subramanian, & Strandholm, 2002) which demands leadership and management capacity at least equalling the ongoing change context. In this regard, PNG is no exception.  The sector is staffed by clinical and non-clinical professionals who need the appropriate capacity, competencies and frameworks to deliver advocated health outcomes. Health professions, chiefly clinical staff are traditionally one of the most studied professions. Notwithstanding, many studies focus on medical specialists and nurses (Chan, Chien, & Tso, 2009; Prows & Saldanna, 2009) or on health executives only. However, there are few studies of non-clinical health service leaders and managers (non-executives) working in healthcare facilities in rural areas of developing countries (Carvalho, 2012; Mohd-Shamsudin & Chuttipattana, 2012).  The majority of health service leaders and managers in Madang Province live and work in non-urban areas, often with limited communication facilities and basic infrastructure. Nonetheless, they are responsible for planning, organising, staffing, directing and controlling health care systems at the local level (Jarunee, 2007; Ministry of Health, 2001) with inadequate resources, training or support.  This study aims to explore the factors influencing leadership and management of health delivery from a non-clinical perspective. By shedding light on the context, barriers and issues impacting on health sector leaders and managers, the dynamic and complex interplay of influences can be examined and may provide important insights for health system improvements. The study investigates leadership and management in first-aid posts, regional and district health centres at the provincial and district levels as an indicator of the broader PNG context. Previous studies have concentrated on the PNG health system from the national perspective rather than at the regional level.  A review of the health system in PNG is presented first, and then extant literature is briefly reviewed to derive themes impacting on health delivery. Next, the methods adopted for this study are outlined, and findings discussed. Finally, implications and directions for future research are given.


Antecedents of Lifestyle Innovation Product Adoption and Post Adoption Behaviors

Dr. Somkiat Eiamkanchanalai, Chulalongkorn University, Bangkok, Thailand

Dr. Nuttapol Assarut, Chulalongkorn University, Bangkok, Thailand



Recent growth of personal mobile devices leads to a rise in innovation products where lifestyle and social interest of adaptors is important in decision-making process. Digital magazine is one of these innovation products. Adoption of the lifestyle innovation product is different from the adoption of typical innovation, which makes the technology acceptance model (TAM) can no longer explain the adoption behavior of the innovation. This research extends the TAM by incorporating innovation characteristics into the model to evaluate adoption and post adoption behaviors of the lifestyle innovation product. Social value, compatibility, communicability, perceived quality and observability factors are significant in the adoption behavior. However, compatibility, social value, perceived quality, communicability and complexity factors play important role in the post adoption behavior. The observability is important only in the initial adoption model while the complexity is crucial only in the post adoption one. Theoretical contributions and managerial implications are discussed.  Progress in information and communication technology (ICT) continually leads to changes in consumer lifestyle and also incessantly creates new opportunities for new lifestyle products. The electronic book (e-book) is one of such products that emerged from the advancement of the ICT. However, during the emerging stage when the technology was in its infancy, the e-book was adopted only by small groups of readers in educational and research areas (Connaway, 2003). The main reasons for low adoption rate stemmed from limited diffusion and adoption of reading devices and poor graphic quality. Therefore, the majority of the e-book research has focused on technical development of the graphic output quality (Dillon, 1992; Dillon, McKnight, & Richardson, 1988; O’Hara & Sellen, 1997; Yi, Park, & Cho, 2011) and usage of the e-book in education (Chu, 2003; Gibbons, 2001; Lam, Lam, Lam, & McNaught 2009).  In the 2000s, rapid development of the graphic quality and widespread diffusion of personal mobile devices has changed how consumers perceive and adopt digital media (Kourouthanassis & Giaglis, 2012). Improvements in these technologies have provided consumers with more opportunities to use the e-book (Gupta & Gullett-Scaggs, 2012). Application of digital publishing content has been stretched into other products such as novels, comic books, and particularly magazines.  Digital magazine is of interest, with a huge opportunity for publishers in the digital content markets. Many mobile device applications have been developed to facilitate in purchasing and consumption of the digital content. This leads to an emergence of the digital content market place known as a new e-commerce platform. Moreover, digital magazine application is highly related to social trends and lifestyle. As a result, it is a good example of lifestyle innovation product.  Studies attacked the area of adoption of digital publishing content such as e-book and online newspaper by focusing on functional value of the products (Dans, 2000). Others applied technology acceptance model (TAM) to evaluate the adoption of digital publishing content.  It was suggested that functional value, which combines both perceived ease of use and perceived usefulness, and emotional attachment are deciding factor for first time adoption (Read, Robertson, & McQuilken, 2011). However, by nature, digital magazine is markedly different from other types of digital publishing content products. It integrates lifestyle choices into decision-making process. Adoption criteria of the digital magazine no longer depend on the technical quality of the contents, or technological innovation of the product alone. Moreover, digital magazine is not a one-time purchase product. Buyers read it periodically or hold a subscription. Thus, both adoption and continuous future usage are important for the future growth of this market.  Therefore, in the case of digital magazine, it is interesting to investigate whether functional value remains the only factor affecting adoption of lifestyle innovation product and likelihood of continuous future usage. In the innovation characteristic research area, it is suggested that the characteristics of innovation products include not only functional value of the products, but social value and risk. To gain further insights to explain reasons of lifestyle innovation product adoption, this study integrates the concept of innovation characteristics and technology acceptance model to determine deciding factors that lead to adoption of the lifestyle innovation product and continuous usage of the product after adoption.


An Analysis of the Relationship Between Socio-Demographic and Economic Statuses of the Employees of Istanbul University, Faculty of Economics and Their Purchasing Decision Criteria

Dr. Anıl Degermen Erenkol, Istanbul University, Istanbul

Burcay Yasar Akcalı, Istanbul University, Istanbul



Influencing consumer behavior in the desired direction and changing it as required makes it possible for businesses to increase their profitability by selling in the market and, consequently, to survive. That is because consumer behavior affects the purchasing process and the sales. Businesses should be knowledgeable about the consumer behavior in order to be able to influence it. Therefore, consumer behavior is one of the main topics in the marketing science. However, despite the fact that consumer behavior and the impact of these forms of behavior on sales are extremely important, consumer behavior analysis has become a phenomenon that has gained importance particularly with the adoption of the marketing concept in businesses in the last 30-40 years.  The concept of marketing manifests as a discipline which places consumers above all other interest groups and it has a customer-oriented structure. This understanding brings the consumers into the focus of the company's efforts and advocates that the desires and needs of customers should be effectively identified - before the production stage - and met accordingly. Consumer behavior covers purchasing behavior and shopping behavior in a broader sense. Specifically, purchasing behavior focuses on product and brand selection process of consumers. Understanding the criteria that are considered significant in the purchasing decision process is quite an important issue. That is because understanding these criteria provides useful information for both businesses and consumers. Depending on various factors such as consumer income, lifestyles, different roles they have in society, education levels, and so on in particular, the emerging heterogeneous market structure results in great difference among the criteria taken into account by consumers while they make purchasing decisions for a good or service. Therefore, some consumers consider fashion important; some consider brands, some quality, some price, and sometimes some consumers place importance on more than one criterion at the same time. In this context, the aim of this study is to reveal the purchasing decision criteria as well as the elements that are effective on the purchasing decision criteria and the relationship between these elements and the socio-demographic and economic statuses of consumers with a sample of employees from Istanbul University, Faculty of Economics. The study will use the "Consumer Styles Inventory" model developed by Sproles and Kendall in 1986 to measure consumers' purchasing decision criteria.  In today's increasingly globalized, competitive environment with plenty of brands and plenty of choices, consumers are faced with too many product choices.  In such type of a market, purchasing criteria are becoming increasingly complex for consumers. In particular, the abundance of messages displaying the product and providing all kinds of information about the product, ads, catalogs, and the spread of internet marketing result in the emergence of complex and conflicting messages and the resulting confusion even further complicates purchasing decision process of consumers. At this point, it is of great importance for businesses to understand consumers' decision-making criteria. That is because the marketing experts can only develop appropriate marketing strategies that may affect consumers if they understand these criteria (Lysonski, Durvasula and Zotos, 1996, Mitchell and Bates 1998, Hafstrom, Chae and Chung, 1992). In understanding consumers' decision-making criteria, the "consumer styles inventory" developed in 1986 by Sproles and Kendall provides a new direction to the study of consumers' decision-making. Indeed, the characteristics revealed by the decision-making criteria used in the consumer styles inventory are very useful in establishing the purchasing styles of consumers, raising consumers' awareness, and providing guidance to families about financial management (Sproles and Kendall, 1986).  Sproles and Kendall define consumer decision-making criteria as the mental tendencies that determine the consumer's approach to choosing between products that are offered in the market. The following table reveals the eight consumer decision-making styles set forth by Sproles and Kendall and general characteristics of these criteria (Sproles and Kendall, 1986). Sproles and Kendall suggest that these eight consumer purchasing decision criteria can be identified by measuring general tendencies of consumers through their shopping and purchasing habits.


Price Drivers and Investment Strategies of Gold

Dr. Mahmoud Arayssi, Lebanese American University, Beirut, Lebanon



The price determinants of gold are explained in this paper. Benefits from holding gold as an investment class asset in several forms, including ETFs are explored. Disadvantages of holding various gold investments are described, particularly in Contango markets. The gold prices are examined in the past two decades, focusing on the relationship with the S&P 500 and Dow index and various currencies, producer and consumer indices. We conclude with advice to potential individual investors in gold and an overview of some variables that affect the future trend of gold.  Gold has never quite lost its shine as a proxy for value even though it has very little practical utility from an industrial or economic stance. It is the most popular precious metal in which people invest. It is a safe-haven against any economic, political, social or currency-based crises, such as: investment market declines, currency failure, inflation, war and social unrest. It can be held indefinitely without fear of insolvency or being margin called and it has historically played a central role in the creation of the world’s monetary systems. While the trading in gold by institutional investors has been increasing in the past decade, this precious metal has also witnessed much interest by various central banks around the world. Because gold is non-correlated with other asset prices, and because it lacks all counterparty risk, gold is a highly attractive alternative to include in a well-diversified portfolio. If the reason for this renewed interest was purely speculative we probably would have witnessed, as in classic bubbles, a crash in the price of gold by now. Since this has not happened, we are pushed to explore some market fundamentals, including the stability of monetary systems, in relation to the gold prices and characteristics that make it a unique asset in managing investment risk.  Unlike other prices, the gold price reflects not only the inherent value of gold, but also the relative strength of the currency in which it is quoted. For example, the dollar price of gold may decrease more in percentage terms than the euro price of gold, to the extent that the change in price is a reflection of dollar strength (here, against the euro) rather than an intrinsic change in gold market fundamentals. In this paper, we review the benefits and risks of investing in physical and exchange-traded forms of gold, providing some advice to the individual investor. Next, gold price drivers are investigated starting with a brief historical overview of the metal, and including the relationship with exchange rates, price indices, and stock market indices. We conclude with expectations for the gold price for the near future citing major variables affecting this movement.  One of the incentives to hold the precious metal in investment portfolios is that gold tends to protect against tail risks (i.e., World Gold Council has shown that when equity prices fall by more than two standard deviations, the correlation between gold and equities tends to turn negative), or events that are not very likely and may not be frequent. Cumulative returns on gold during the 1991-2010 period was 262.8% based on futures market. There are risks involved in carrying physical gold or investing in exchange gold. The investor should appreciate the risk of loss and theft usually associated with holding physical gold. Property insurance does not always cover this asset type and the investor may need to purchase additional coverage for unexpected losses. Transporting and storing gold is costly whether one keeps it at a secret location or in a private vault at home or in a bank’s safety deposit box. The latter are not always secure, depending on the bank’s security system, and even then, the insurance will not usually cover the contents of the box more than a certain dollar amount. In Germany, for example, safety deposit boxes are insured only up to US$ 28,000, less than one kilo’s worth of gold at current prices, a meager amount compared to the total value of gold that can potentially be stored in any one of these boxes.  An important concept in portfolio management is wide diversification of investments across a broad range of assets, maximizing the total return while minimizing the risk through diversification. Hence, an investment in commodity (including gold) futures is just one more so-called asset class, like government bonds, corporate bonds, large stocks, and small stocks. Trading gold in exchanges is subject to their rules and regulations. Exchange-traded funds (ETF) are investment funds that trade on a stock exchange. Like a stock, an ETF's price changes throughout the trading period as shares are exchanged, and they can be sold short or bought on margin. Gold ETFs naturally are low-cost compared to other investment instruments, and are considered a relatively simple way to diversify a portfolio. 


Claiming To Be A Marketing Manager: The Case of the Real-Estate Sector in the Eastern Provence of Saudi Arabia

Dr. Hussein Abdullah El-Omari, King Talal School of Business & Technology, Princess Sumaya University for Technology, Amman, Jordan



Marketing Managers are responsible for a wide variety of tasks within the complex and competitive modern business environments. A marketing manager will be responsible for everything from planning strategies to promoting a product or service to as wide an audience as possible by means of events, websites and advertising. Skilled marketing managers play an important role in the life of their business organizations. They usually specialize in a particular product or market, such as financial services, fashion or ‘fast moving consumer goods’. As part of the job, Marketing Managers are required to undertake tasks which range from the identification of target markets and the promotion of products and services. However, a Marketing Manager will have to carry out all these tasks whilst bearing in mind the budget and time scales available to the company. The real-estate sector in the eastern province of Saudi Arabia was selected to be the setting for this study. Based on a convenience sampling procedure, 600 companies were selected and of the 600 distributed questions, 126 completed/usable questionnaires were returned with a response rate of 26.0% The results of this study have shown that Saudi marketing managers have a small role to play in the marketing management process of their organizations and, therefore, those managers could not be considered more than “sales managers” performing some “sales tasks”.  Underestimating the importance of having real “marketing managers” performing all function of the marketing management process, will result in a negative impact on the competitiveness of the concerned companies. Saudi real-estate companies need to rethink about the importance of having skilled marketing managers and that their role in their companies’ marketing management process should be enhanced and highly appreciated.  A marketing manager’s job requires lots of skills and knowledge, and the ability to manage people from a range of different disciplines. On one occasion, a marketing manager may be dealing with a team of marketing executives, and in another occasion he/she may be dealing with the people from different departments/sections of his organization. Thus, a marketing manager needs to understand how each role within the organization functions and to have the ability of combining all those skills to direct the different functional areas within his/her organization. One of the tasks of a marketing manager is to capture the right share of the market and to continue increasing it as much as possible for his/her goods and services and to come up with ways in which the goods and services can be developed, and/or created for new markets. Successful marketing managers are those who have strong skills for negotiating and persuading with their ideas. Those managers are fully aware of all commercial requirements, and equipped with the necessary skills of communication and decision-making, and also they know how to get results through other people. The job of a marketing manager is no longer limited to understanding and delivering in a marketing capacity, but rather to comprehend the necessary fundamentals of business and to develop his/her abilities in implementing the needed business plan based on increasing profit at maximizing customers’ satisfaction. Being a successful marketing manager means the ability to ensure that his/her team implements the marketing plan as it was scheduled, and to be kept up to date with the latest in marketing techniques and also to absorb/reduce the impact of environmental factors. A successful Marketing Manager has to be customer oriented. He has to adopt full and thorough understanding of his/her target market(s). Being the right marketing manager, means growing the leaps and bounds. It could be the difference between who you are today, and who you want to be in the future.


Strategic Management Accounting as a Determinant of Quality Management Success

Dr. Andrijana Rogosic, Faculty of Economics, University of Split, Croatia



The conflicting results of prior studies leave open the question of how quality management practices affect financial performance of the companies. The aim of this research is to determine the impact of the implementation level of management by fact, as one of the main quality management principles, on financial indicators. In this context, the role of the strategic management accounting as a tool of management by fact is argued. Management activities and functions involved in determination of quality policies and its implementation through three fundamental managerial processes: quality planning, quality control and quality improvement are known as quality management (QM). These processes are called „Juran trilogy“ after the one of the most influential quality management „guru“ – Joseph M. Juran. The importance of quality management has considerably increased over the last few decades, on both a practical and theoretical level.  Various forms of quality management systems such as statistical process quality control (SPC), quality assurance, ISO 9000 quality standards and total quality management (TQM) are being pursued for business improvement and to achieve the goal of customer satisfaction. Quality management and the market-oriented approach to doing business, both anchored in the notion of customer satisfaction, are increasingly embraced by many firms as the key to gaining a competitive edge (Lai, 2003: 18).  Quality management has been developed around a number of critical factors which vary from one author to another, although the core factors are leadership, quality planning, human resources management (training, work teams, employee involvement, etc.), process management, cooperation with customers and suppliers, and continuous improvement. According to the literature, the elements of TQM may be grouped into two dimensions: the management system (leadership, planning, human resources, etc.) and the technical system (TQM tools and techniques (Tarí and Sabater, 2004: 267). Accounting instruments, especially the techniques of strategic management accounting (SMA) can be used as an important tool in quality management. SMA is valuable element of the technical system that supports decision-making because accounting system provides information which is the guide mark for the future actions. Those actions in the context of QM are for the corrections of deficiencies and for the further improvement of quality. The QM needs a measurement system so the previous efforts in quality control and improvement can be quantified. Also, SMA gives an insight into the possibilities of QM system growth since quality is a business strategy in quality oriented companies. SMA is a tool for management by fact that is one of the QM principles that should not be ignored. Management by fact (factual approach to decision making) has been underestimated in QM theory so the aim of this research is to investigate the effect of the implementation level of this QM factor on the financial performance.  The paper gives an insight into theoretical and practical aspects of QM (in the next section). SMA as a tool for management by fact is the topic of the third section. The research hypotheses are explained in the fourth section. The fifth section contains the research methodology and the empirical research results are presented in the sixth section followed by concluding remarks. 


Country Image and Its Effects on Purchase Intention Applied to Egypt

Dr. Amira Fouad Ahmed Mahran, Cairo University, Egypt

Dr. David Louis Nasser, Georgia State University, GA



This study aimed to conceptualize and measure Egypt’s image in the American market, and to identify the affective and cognitive impacts of country on purchase intent with respect to Egyptian products. A cluster sample of 331 American graduate students was selected. (SEM) was applied to test the conceptual model. The findings demonstrated that cognitive country image affects both affective country image and purchase intention. But we detected no influence of affective country image directly or as a mediator on purchase intention .The model explained 56% of the variation in affective country image and 21% in purchase intention. These findings might help marketers and public policy makers in Egypt to formulate strategies that build a positive country image especially with respect to the cognitive dimension.  For over five decades country image has been considered an important and popular topic in international marketing (Wang et al., 2012). Previous studies have shown that country image affects consumer preferences when choosing between similar products that come from different countries. (Maher and Carter, 2011), and its effect is similar to other extrinsic cues such as brand name and price (Wall et al., 1991). Consumers form images of countries that in turn influence their beliefs (Erickson et al., 1984), and their willingness to buy a country’s products (Knight and Calantone, 2000). A country’s image might not only affect the evaluation of its products, but also other  outcomes such as investments, visits and ties with a country (Brijs et al.,2011 ;Heslop et al.,2004;Laroch et al.,2005). Nevertheless, according to previous research there is a lack of agreement on the definition of the country image construct. Country image may be viewed as a halo or a summary construct (Han, 1989). Also there are many differences in the dimensions and specific items per dimension that have been used to measure this construct. Moreover, these items have been developed from different disciplines- marketing and non-marketing- (Lala et al., 2009), which also leads to a lack of agreement among previous studies on country image scales (e.g. Lala et al.,2009;Hsieh,et al.,2004;Sauer et al.,1991). Literature also has shown that consumers’ negative product  evaluations, based on country image, represent market barriers for companies from less developed countries (Schooler, et  al.1987) and Egypt, as a developing country, has been  unable to achieve a reasonable share for its products in international markets especially in some countries like the U.S.A.(USEBC,2013). According to an exploratory study, Egyptian products are unfamiliar in the U.S.A. market, despite their quality, particularly in categories such as food, textiles, furniture, chemicals and crafts (State Information System,2013). So, measuring Egypt’s image and its effect on purchase intention can help Egyptian international marketers; to assess the extent to which Egypt’s country image is favorable or unfavorable, how country image affects purchase intention for  Egyptian products and how country image can be used to develop effective marketing strategies when managing their product categories and markets and when developing marketing positioning, promotional, and segmentation strategies. Also, this knowledge can be extremely critical for Egyptian public policy makers in formulating strategies that build and support a positive country image. So, this study aimed  first to conceptualize and measure country image, second,  to measure Egypt’s image -cognitive and affective image- and third , to investigate and compare the impact of cognitive and affective country image on purchase intention to buy Egyptian products. No previous research has focused on this issue based on our literature review. The authors of this current study chose to concentrate on the perceived characteristics of Egypt (as a country) rather than on the knowledge of its particular products, because of the high level of unfamiliarity of Egyptian products among American consumers. We also investigate purchase intention for Egyptian products as whole rather than different product categories because our primary interest was to understand country image in general rather than interest in specific product evaluations. Moreover, studies that have examined product images in general, or specific product category level simultaneously have consistently shown that country stereotypes existing at general and specific levels tend to be congruent (Laroche et al., 2005).


Data Mining Applications Framework for Business Organizations: Business Functions Approach

Dr. Jovana Zoroja, University of Zagreb, Faculty of Economics and Business, Zagreb, Croatia

Dr. Mirjana Pejic Bach, Professor, University of Zagreb, Faculty of Economics and Business, Zagreb, Croatia

Dr. Katarina Curko, Professor, University of Zagreb, Faculty of Economics and Business, Zagreb, Croatia



High growth of data in databases created a need for technologies which can extract and uncover the hidden information in large amount of data which can be useful in decision making in business organizations. Data mining is a technology that could solve this problem with approach combining machine learning, statistics and database management that are used for finding useful and valid patterns in data. The goal of this paper is to present a review of published data mining applications in business organizations across business functions. Papers from the journals indexed in Web of Science that investigate data mining applications in business organizations were examined in order to compare the research on data mining applications in terms of: (1) journal, (2) title of the paper, (3) data collection approach, (4) methodology used for investigation of data mining applications and (5) keywords. We investigated 25 papers divided into five categories: finance, human resources, transport, marketing and sales and services. We found research papers for each mentioned category. By random choice method we have selected several research papers for each category in order to compare data mining applications, methods and data used in business organizations. Data mining methodology is used for analysing large amounts of data for secondary analysis by extracting information from operating application systems. It can be used for finding and identifying relationships among data (Wu et al., 2012). Data mining is one of the most popular processes of analysing huge amount of data to find relationships among them with the goal to gain knowledge and make decisions (Ngai et al., 2009). The main goal of data mining is to provide insight into disorganized information in order to enhance business knowledge and future business activities for the user in business organizations. Data mining techniques can be categorized into two groups: descriptive and predictive (Lejeune, 2001). Descriptive data mining techniques are used for better understanding of the data, while predictive data mining techniques are used for forecasting and devising. However, data mining is quite different compared to core statistical methodology. The most used methods in data mining, besides statistics, are artificial intelligence and machine learning such as classification, regression, clustering, prediction, outlier detection, visualization, decision trees, association rules, neural networks, support vector machine and many others (Ngai et al., 2011; Strohmeier, Piazza, 2013). Data mining techniques have a widespread use in many different areas. Continuous improvement and development of data mining techniques and their positive influence on business activities and on competitiveness of the companies result in their widely usage in different areas. For example, data mining techniques were investigated in review papers in areas such as customer relation management (Wei et al., 2013), financial fraud detection (Ngai et al., 2011), healthcare management (Zvarova, Pribik, 2002), churn management (Lejeune, 2001) and manufacturing (Choudhary et al., 2008). However, papers that investigate data mining applications across different business functions are rare. In this paper we investigate data mining applications in business organizations: finance, human resources, transport, marketing and sales and services. In order to determine how data mining and their applications have been used during the past ten years, this paper review data mining techniques, their application and data used through a survey of literature and the classification of articles from 2003 to 2013. This paper has two objectives. The first is to present a systematically review of published data mining applications in business organizations based on value chain approach. The second is to compare reviewed article through defined categories in order to generate a better understanding of usage of data mining techniques and applications for future research. This paper consists of five sections including Introduction part as the first one. The second section presents the research methodology including literature – selection process and analysis process. The third section provides given results. Section four explains our findings. The last section concludes the paper and gives some recommendations for future work and limitations of the study.


Financial Crisis and the Liquidity Effect on Market Risk

Bor Bricelj, Dr. Sebastjan Strasek, Professor, University of Maribor, Slovenia

Dr. Timotej Jagric, Professor, University of Maribor, Slovenia



In this article we deal with the liquidity effect of the financial crisis. We introduce liquidity as a risk factor into the standard value-at-risk framework. We incorporate bid-ask spread information into the basic VaR models. In those models we calculate the volatility of returns with the use of GARCH methodology. We then test these models on four different markets: on three foreign and on a domestic one. We conclude that based on assumptions of our research, liquidity VaR models adequately measure market risk and even prove themselves superior to ordinary VaR models. Liquidity VaR methodology represents a step in the right direction in market risk analysis, but on the other hand those models are not yet robust enough to pass all backtests. About the comparison of results between markets we conclude that the results for the domestic market are comparable to those of foreign ones despite the domestic being smaller.  Risk management is one of the most fundamental challenges facing financial institutions. To cope with risk these institutions use many analytical tools of which Value-at-Risk (VaR) models are the most prevalent. VaR models are useful for quantifying an institution's exposure to market risk. The exposure is calculated using closing prices for traded assets, or similar data, where the frequency of the data can be changed depending on the model. The problem is that this kind of data does not contain the information on liquidity of the traded asset and consequently VaR models using the data do not capture the full exposure to market risk. This is also addressed in the Basel III directive, which explicitly states the need to add liquidity into market risk analysis. In our research we implemented liquidity into VaR models. We tested and compared liquidity VaR (LVaR) models proposed by Bangia et al. (1998, 1999) and Ernst et al. (2009, 2012) with classical VaR models. The data we used covered four financial markets, i.e. Slovenian financial market and three markets from abroad. We introduced several new aspects into LVaR analysis through our research. First, the research was conducted on a large sample, consisting of 12 years of data on a daily frequency. Second, we compared results of LVaR models of a smaller less liquid financial market (Slovenian) with some of the biggest financial markets in the world. Third, we implemented a bigger number of backtests when testing the results of our research. Fourth, we implemented GARCH methodology to calculate the volatility of the returns. The results of our research show that LVaR models, under certain statistical assumptions, make good estimates about exposure to market risk based on financial institution's trading portfolio. Furthermore, by comparing them to ordinary VaR models, the LVaR models prove themselves superior. Backtests show, that LVaR models pass some of the tests but not all of them. That in turn raises doubts about their statistical robustness and about the needed quality of input data for LVaR analysis. The rest of the article is organized as follows. In section two we describe the liquidity effect in light of financial crisis. Next we review the VaR and backtest methodology. In section four we present the database. An analysis of results of our research follows in section five. We summarize and conclude in section six.


Accounting System Analysis of Consulting Offices in Saudi Arabia

Dr. Abdulsalam Alsudairi, Professor, University of Dammam, Dammam, Kingdom of Saudi Arabia



This study aims to investigate the accounting system used in the consulting offices in Dammam Metropolitan Area (DMA), Saudi Arabia. Forty two managers or senior engineers of those offices were interviewed.  The interviews focused on the preparation and components of the three financial statements (balance sheet, Cash flow and Income statement). The study concluded that the current accounting system is still partial as there are many items that are either missing or applied incompletely. This is often practiced in small offices, where the less commonly used financial statement is the balance sheet and the most frequently used one is the cash flow statement. Yet, in large offices with partnerships with other offices, their accounting systems were well established and have reflected well on their professional performance.   Money is one of the most important resources for any organization or project where careful utilization of this resource is crucial element for continuity and success. This is due to the direct link of money to the expenses and income of the organization and therefore to its profitability. In addition, money is one of the three elements (money, time, quality) that is used to measure and evaluate project performance (PMI, 2008). In fact, certain studies emphasized the importance of acquiring professional administrative and financial skills to architects and engineers. They considered skills related to budgetary and costs control to be on the top success factors of their enterprises, both in the design and construction sectors (Young and Duff, 1990 and Rahman et al., 2008).  Thus, in most construction firms, we find a financial department within their organizational body or at least an accountant responsible for this key element to the management of the enterprise or the project. In design firms, on the other hand, the need for this accountant is required more than any other industry.  This is due to the iterative nature of the design process where it needs careful attention in calculating activities costs of the design (Ben-Arieh and Qian, 2003). From this perspective, this study aims to highlight the management of financial issues in Architectural/Engineering Consulting Office located in Dammam Metropolitan Area (DMA). The study attempts to find answers for the following questions:  Is there a clearly defined accounting system in consulting offices?  What are the components of that accounting system? What are the required assets? Which item costs more? And what are the major services that bring cash to the office?  What is the financial performance of these consulting offices in terms of balance sheet, income and cash flow statements, financial budget and cash flow?  Answering these questions would give a perception of the prevailing accounting systems and what distinguishes them and what is needed to develop them.  Knowing the fact that the majority of architectural/engineering offices in this study are of medium-to-small size (Al-Majed, 2009), which might give the impression to some practitioners that having an accounting system is not essential to the design process. The focus on strategies to establish any enterprise without considering the financial strategies is undoubtedly a failure for that enterprise (Tracy, 2009). This is because good financial management will enhance the economic value and ensure making the right decisions at the right time; it will also provide performance analysis (Gordon, 1992).  In addition, any manager has to answer these questions, whatever the type of his/her enterprise:


Success Factors for the Evaluation of An ERP System Investment Decision in SME’s. Theoretical Considerations and Empirical Findings

Dr. Josef Neuert, University of Fulda, Germany

Claudia van der Vorst, University of Latvia, Riga, University of Applied Science Kufstein, Tirol, Austria



In the 1990s, enterprise resource planning (ERP) systems became the state of the art tool to replace self-made legacy systems. While the market of ERP implementations for big global companies has reached almost saturation, small and medium enterprises (SMEs) are at the beginning of this process. The decision for an ERP package and its implementation is an extensive, lengthy, and costly procedure which often creates problems or cost overruns. The acquisition process is one of the key challenges at the beginning of a longer decision making journey. This paper aims to present an outline of the key influencing characteristics that affect the decision-making process for ERP software at SME’s. The research was based on an analytical literature review and a quasi-field experiment. The main hypothesis that the subjectively perceived decision success is strongly dependent on a suggested selection procedure could be confirmed. Currently, according to experience and relevant literature, the selection process is mainly vendor-driven and not based on the customers’ requirements and values. In sum, the necessity for a clearly outlined decision making concept and a structured set of critical success factors are the main findings of this study. The selection, implementation, and maintenance of standard enterprise resource planning (ERP) software, like the high-end enterprise packages of, e.g., SAP®, Oracle and Microsoft is more and more a commodity part of big enterprise businesses. The information technology (IT) employees of their departments are well trained with years and years of experience. The consultancies supporting them are preparing in very professional competence centers, e.g., industry solution departments for the different branches. The IT-methods are proven, many case studies are available and most of the time, there is a variety of relevant solutions available for nearly any given problem. This market is characterized by a profound stability since 2009 (Casper, et al., 2013).  The area around the small and medium enterprises (SMEs) is significantly different. A lot of small, mainly local IT companies are implementing a large number of different ERP solutions according to a similar number of different methods. The trends are mainly driven by the requirements of the global market and the uniqueness of small companies (cf. Rieger, et al., 2010).  The business requirements for medium-size companies are changing rapidly. Hence, their need for a professional ERP system support is higher than ever. A study of the Centre for Enterprise Research of the University of Potsdam analysed 1300 SME companies and stated that about 70% of the companies are planning to invest in an ERP System implementation or are in the middle of the implementation process. A trend towards a decline of the significance of an ERP System specifically for SME is not noticeable (cf. Gronau, 2012). There are significant trends where SME companies and ERP providers will have to work on for the next 5-10 years. Firstly, due to the high internationalisation, specifically of German SME companies, the ERP provider needs to invest in very specific industry solutions which can be integrated. In addition, the core functionality and processes have to improve even more. Secondly, technology and IT architecture are gaining importance. Finally, ERP has to provide mobile solutions in the years to come. The study claims that the current need for a new ERP System selection and implementation is under 50% but increasing. Similar to cloud computing where currently the companies are still hesitant on the one hand, but dependent on the technological details, more and more companies are interested in new solutions (cf. Gronau, 2013).


An Empirical Analysis of the Impact of Board Structure on the Performance of Large Saudi Firms.

Dr. Murya Habbash, King Khalid University, Saudi Arabia

Dr. Mohammed Saleh Bajaher, King Khalid University, Saudi Arabia and Aden University, Yemen



In 2006 the Saudi Capital Market authority issued the Corporate Governance Code which proposed a variety of monitoring mechanisms that should improve corporate Governance; however, the impact of these mechanisms on the firm performance is still ambiguous. This study aims to examine the effect of corporate governance mechanisms on the performance of Saudi listed companies. Specifically, the composition, size and leadership style of boards is tested. The analysis is extended to investigate the moderating effect of family ownership.  The study uses a sample of 338 large Saudi listed companies. We find that both duality and independence of the board affect a firm’s performance. However, we find that this is not the case in family controlled firms which suggests that family ownership and corporate governance could be a monitoring substitute for each other.  The effect of corporate governance on firms’ performance has received extensive awareness in the accounting literature in recent years. This increased awareness has been motivated by the financial scandals that took place in the US economy in the early part of this decade such as WorldCom and Enron collapse. In spite of the proliferation of studies, there is still much debate regarding the relationship between firm performance and boards of directors (Shukeri, et al., 2012). According to Saad (2010), the board of directors is considered to be one of the two major components of corporate governance which provide an efficient regulatory and controlling mechanism to decrease agency problems. In addition, Ruigrok et al. (2006) point out that boards play an important role with respect to activities such as designing and implementing strategy and fostering links between a firm and its external environment. At the end of 2006, Saudi Arabia issued its own corporate governance code which identified the principles and best practices of good governance and described optimal corporate governance structures and internal processes. This was revised in 2009 and included duties and responsibilities of boards of directors to influence firm performance, for example reviewing and adopting a strategic plan, adequacy and the integrity of the company’s internal control systems. Nevertheless, no study has been conducted to evaluate the impact of these regulations on firm performance. The main aim of this study is to examine, in detail, the impact of board structure on Saudi listed companies’ financial performance. Specifically, the present paper studies the determinant factors of firm performance and provides additional evidence on the influence of the characteristics of three boards of directors, namely board size, board composition and role of duality on firm performance in the Saudi context where ownership structure is relatively unique.  In addition, this study conjectures that the prevalence of family control in Saudi Arabia is likely to moderate the effectiveness of boards of directors.  The rest of the paper proceeds as follows. The following section provides a detailed discussion concerning the literature review and hypotheses development. Following a discussion on the research methodology, the results of the study are reported. The final section concludes the paper".


The Relationship between Capital Structure and Profitability: Causality and Characteristics

Irina Berzkalne, University of Latvia, Latvia



This paper examines the relationship between capital structure and profitability. The data set consists of 58 firms listed on the Baltic Stock Exchange and 150 non-listed companies in Latvia over the period from 2005 to 2012. The study analyses the short-term, long-term and total debt in relation to several profitability measures like return on sales (ROS), return on assets (ROA) and return on equity (ROE) using correlation and panel regression analyses. The empirical results indicate that a negative relationship between capital structure and profitability exists, and this relationship is more pronounced in the case of listed companies.  Capital structure choice has been analyzed and discussed by both academics and managers for several decades. The starting point for the subject of capital structure is the irrelevance proposition of Modigliani and Miller (1958, 1963). Since then two capital structure theories prevail – the trade-off theory and the pecking order theory. Pecking order theory states that companies prioritize their sources of financing – at first they prefer to use internal funds, then to borrow, and to issue equity as a last resort (Myers and Majluf, 1984). Trade-off theory argues that companies choose the debt and equity mix by balancing the benefits and costs of debt. If a company increases its leverage, the tax benefits of debt increase, as well. At the same time, the costs of debt also rise (Kraus and Litzenberger, 1973).  Profitability ratios show the ability of the company to generate profit, and these ratios are used by the company, financial institutions, etc. to determine the performance of the company. Previous research on the relationship of capital structure with profitability has discovered that capital structure impacts profitability, but also has provided mixed results regarding the trend (positive/negative relationship).  The aim of the research is to evaluate the impact of capital structure on profitability and, based on the empirical results, to provide conclusions. The tasks of the research are as follows: 1) To overview the results of previous research made on capital structure and profitability; 2) to evaluate the relationship between capital structure and profitability using correlation analysis, multiple regression analysis and Granger causality test; 3) to make conclusions. The hypothesis of the study: capital structure has an effect on profitability. Analysis is conducted on a sample of 58 listed companies (Baltic Stock Exchange) and 150 non-listed companies in Latvia over the period from 2005 to 2012. The author analyses the relationship of short-term, long-term and total debt in relation to several profitability measures like return on sales (ROS), return on assets (ROA) and return on equity (ROE). In the research paper, the following qualitative and quantitative methods of research are applied: the monographic method, correlation, multiple regression and time series analyses. The research is based on published papers on capital structure and profitability, as well as information provided by the Baltic Stock Exchange and Lursoft. Correlation analysis is done using Statistical Package for the Social Sciences (SPSS), panel data regression performed in STATA and time series analysis done in Eviews.  If the company increases its debt, the tax benefit of debt should increase, since interest payment on debt is tax deductible. Therefore, it is expected that debt level and profitability have a positive relationship.  Several studies have been done on the data from the Baltic countries. Study by Bistrova et al. (2011) covered the time period of 4 years (2007-2010) and the sample data of 36 “blue-chip” companies listed on the Baltic Stock Exchange. The study found an inverse relationship between the level of debt and capital profitability. Norvaisiene (2012) stated that a high level of financial indebtedness affects negatively the profitability ratios of companies in the Baltic countries. Conclusion can be made that, in the case of the Baltic countries, the relationship between profitability and leverage might be negative.


An Empirical Study of Factors Effecting Successful Implementation of Knowledge Management in Saudi Private Industrial Sectors

Dr. Sami A. Albahussain, University of Dammam, Saudi Arabia



Increasing competition and globalization has forced organizations to look for ways and means to distinguish themselves from their peers. Organizations are adopting out of the box solutions and coming out with newer and innovative mechanisms to capture the customer attention. The subject of knowledge management has acquired a lot of importance in the recent times as organizations are looking out for measures to remain competitive. As the organizations are realizing the significance of adapting knowledge management, they are beginning to implement the same as well in their operations. However the successful implementation of the same in the organizations is dependent on various factors. The current study has attempted to determine such factors that have an influence on the successful implementation of knowledge management in the private industrial sector of Saudi Arabia. To achieve the objectives of this study, The investigation was carried out and a survey was conducted among 380 employees in medium and large size organizations in private industrial sector in Dammam, Saudi Arabia where knowledge management is implemented. The research established that business strategy, organizational structure, KM team, K-audit, and K-map are critical factors that determine the knowledge management in the organizations. On the whole it was established that the concept of knowledge management is given its due importance by the organizations and it is built into the various elements of the working.  Knowledge has become a precious property and Knowledge Management (KM) has been widely practiced by many organisations as one of the most promising ways of achieving success in the information age (Soliman, and Spooner, 2000; Chen and Yen, 2010). There are many good practices that support the important role of the private industrial sector as an institution for critical thinking, where knowledge is developed and disseminated widely throughout the organisation as a source of value creation (Carrillo and Chinowsky, 2006). However, a culture of creativity must be nurtured and knowledge must be shared through teaching and learning (TandL) methodologies where the goal of a private industrial sector is to provide an environment in which  private industrial sector staffs and students develop skills, understanding, and common values to private industrial interpersonal understanding as part of their learning achievements, thereby, contributing to the nation’s goal of building a knowledge-based (k-based) society (Kamara et al., 2005).  Organizational knowledge has been stored in numerous ways, including in human minds, documents, notes, manuals, and reports; and it has also been shared among individuals through several communication channels such as conferences, seminars, training programs, and forums. These have been applied for many years and although they are still being used, the emergence of new computer-based communication technologies has, not only complemented the traditional storage and delivery methods, but has also improved the efficiency and effectiveness of the overall knowledge delivery mechanisms.  According to Dwivedi et al., (2011), efficient and effective KM typically requires an appropriate combination of organisational, social, and managerial initiatives along with the deployment of appropriate technology. Thus, the main objective of this paper is to evaluate the application of KM towards enhancing the performance of Saudi Private industrial Sectors in delivering their core businesses.  KM practices consist of the generation, acquisition, storage and dissemination of knowledge. Knowledge generation involves the creation of new knowledge in the organisation. This comprises of activities associated with the entry of new knowledge into the system, and includes knowledge development, discovery and capture (Kankanhalli et al., 2011). Individuals obtain knowledge by grafting on new sources including other individuals or other organisations (Kebede, 2010).


Religious Entrepreneurship and Economic Development of Nigeria

Azende Terungwa, Benue State University, Makurdi-Nigeria



Research on entrepreneurial activities has increased since its influence on economic and social development of a society has been acknowledged. Religious faithful move in mass from one location to another in response to calls for their gatherings. It takes skills for their leaders to secure such resolute followership of members which is herein referred as religious entrepreneurship. This study quest to emphasize the three dimensional benefits of religious entrepreneurship to the religious entrepreneurs, their target audience and most importantly the economy of Nigeria. The study surveyed 270 respondents adapting the community of inquiry instrument developed by Arbaugh et al (2008) alongside with Pearson’s correlation coefficient, ANOVA and regression. The statement of the problem is whether these religious entrepreneurial activities impacts positively (economically) on its stakeholders. The main objective is to ascertain the extent to which religious entrepreneurship benefits the economy of Nigeria with a view of encouraging it or otherwise.  A major finding of the study was the collective predictive strength of RES, ESRE, and B & F for economic development of a society EDS.  It is recommended that religious entrepreneurship be encouraged by any way possible to making Nigeria a better place economically. Entrepreneurial activities are central to economic growth in the modern economy. Such activities are numerous and as diverse as the societies themselves. It is therefore paramount for individuals to understand and appreciate these activities with a view to help societies unveil potential opportunities for growth and development.  An individual’s decision to engage in entrepreneurial activities can be attributed to a broad spectrum of specific characteristics such as risk aversion, personality attributes, education and human capital, unemployment etc. No human being is a biological accident; each is creatively and skilfully endowed by nature. The most important thing is for human beings to identify their unique skills and develop it with a view to bring solutions to the ever increasing needs of humanity. Life is more meaningful when evolving problems are solved. Those who provide these solutions are the ones who recognize that a problem exist in the first place. Those people live more fulfilled lives economically socially and otherwise. A society full of such people will undoubtedly be economically prosperous (Nongo and Azende 2013).  One of the major characteristics of the knowledge economy is entrepreneurship. This Entrepreneurship is the engine that propels growth of any economy. Entrepreneurs are unique in three regards; they listen to people to get ideas for improving a business, they observe to identify what people need, they also think and analyze a situation to see what product or service will solve a problem. They always look for opportunities to learn new skills and take on new responsibilities (Mariotti, 2006). Entrepreneurship is not an abstract term, it is action oriented. This means there can be no entrepreneurship without people evidently engaged in carrying out some form of activity. Every action is motivated by some underlining motive. For example entrepreneurs are profit, ownership, or passion motivated when they engage in their entrepreneurial activities. It is truism to say a belief an individual or group of people have can undoubtedly ignite them into action whether negatively or positively. Economic development has a direct relationship with the nature of activities in a giving environment. If belief can motivate an individual into action then it is not far from the truth to say those who practice religion can be motivated by it to act in a certain manner. According to Wikipedia, (2013), religion is an organized collection of beliefs. These beliefs condition the behaviour of their followers. There exist several religions in Nigeria but the most predominant is Christianity and Islam. The 1963 census although controversial, indicated that 47 percent of Nigerians were Muslims, 35 percent Christians, and 18 percent members of local indigenous congregations. However, from the 1990s to the 2000s, there has been significant growth in Christianity where Protestant Churches accounted for this uplift (Owobi, 2002). These includes but not limited to; Redeemed Christian Church of God, Winners' Chapel, Deeper Christian Life Ministry, Mountain of Fire and Miracles, Christ Embassy, The Synagogue Church Of All Nations, The Lords Chosen, etc.  This paper shall be emphasizing on Christianity as a religion not because it is fast growing but as an attempt to narrow down the scope of study and x-ray its impact on the economy of Nigeria. This study will again concentrate on four Christian Ministries namely; Living Faith Church aka Winners Chapel, Redeem Christian Church of God, Christ Embassy and The Synagogue Church of All Nations. The criteria for this selection are that; these ministries are indigenously owned, they have exported their services to other countries of the world, and they have extremely large congregation.


An Empirical Study of Factors Driving to M-shopping Usage

Dr. Mirsobit Mirusmonov, CCBA, Dhofar University, Sultanate of Oman

Dr. Changsu Kim, Professor, Yeungnam University, Republic of Korea

Dr. Jai Jin Jung, Dankook University, Korea



Advances in mobile technology have had considerable influence on the sustained involvement in shopping-shopping anywhere and anytime. M-shopping connects existing online and offline environments and enables consumers to engage in m-shopping anytime, anywhere, thereby providing them with new value. This study provides an empirical analysis of the relationships between m-shopping characteristics and use through the mediating effect of m-shopping value, and the results have important theoretical and practical implications. The results show that personalization, self-efficacy, intimacy, simplicity, mobility, and connectivity have considerable influence on m-shopping value and that the shopping value that users experience during m-shopping can be divided into utilitarian value and hedonic value.  The wide popularity of mobile application use has led to growing interest in mobile shopping (m-shopping). Mobile devices such as smartphones and tablets facilitate the use of m-shopping anytime, anywhere, and this has strengthened people’s expectations and interest in this new form of shopping. Unlike in the case of PC-based e-commerce and e-business, mobile devices play a critical role in m-shopping. Previous studies have found that, as a value-added service within m-commerce, m-shopping appears to be a new opportunity for increasing revenue through the use of mobile devices anytime, anywhere (Aldás-Manzano et al., 2009; Lu & Su, 2009; Lee & Park, 2006). This indicates a need for a better understanding of the reason behind the rapid growth of m-shopping. In term of shopping, many researchers have examined shopping value from both utilitarian and hedonic perspectives (e.g., Carpenter & Moore, 2009; Chang & Fang, 2012; Overby & Lee, 2006), mostly in conventional internet shopping environments. However, few have discussed shopping value in the m-shopping context. With the development of the mobile IT development, m-shopping has become one of the most popular ways to shop (Hung et al., 2012). The present study examines shopping value in the context of m-shopping for important theoretical and practical implications.  This study focuses on the factors that influence m-shopping use and examines the relationships between these factors and m-shopping value. More specifically, the study 1) identifies the m-shopping characteristics that influence m-shopping value, 2) investigates the relationship between m-shopping value and use, and 3) empirically analyzes the moderating effects of m-shopping users’ attributes on relationships between m-shopping characteristics and shopping value.  Shopping value refers to the evaluation of the relative value by the consumer’s qualitative and quantitative as well as subjective and objective shopping experience (Cai & Xu, 2011; Chen & Lee, 2008). Value occurs through the conscious pursuit of intended results, and it is associated with joyful reactions (Deli-Gray et al., 2010). Therefore, in the m-shopping context, shopping value can be divided into utilitarian value and hedonic value. The former is related to purchasing products in an efficient and timely manner through m-shopping, whereas the latter is about emotional benefits such as enjoyment experienced through shopping in addition to the purchase of products (Yang, 2012; Wang, 2010). Utilitarian value means intentional purchases and is related to purchase tasks and derived from rational purchases (Kim et al., 2012). Utilitarian value may appear as a result of information gathered from consumers’ distinct needs (Teller et al., 2008). Therefore, utilitarian value is based on a reasonable judgment and can provide greater value when outcomes derive from a rational judgment with no emotional interruption. Moreover, consumers are more likely to perceive utilitarian value during shopping if they buy what they want and find what they are looking for (Carpenter & Moore, 2009). Most studies have highlighted the positive effects of the utilitarian value of m-shopping on consumers’ use intentions, showing inherent relationships between the utilitarian value of m-shopping and its usability and technology as well as personality characteristics (Kim et al., 2012).


Measuring the Factors That Affect the Young Consumers' Attitudes Towards SMS Advertising and Their Purchase Intention: The Case of Egypt

Hazem Rasheed, Arab Academy for Science &Technology & Maritime Transport, Egypt

Professor Farid El Sahn, Bahrain University

Dr. Eman Abd El Salam, Arab Academy for Science &Technology& Maritime Transport, Egypt



Today, the mobile phone penetration is increasing all over the world including Egypt. This high penetration has created an excellent opportunity for marketers who want to target Egyptians especially young consumers with their products and services through mobile advertising. This study investigated the attitudes of young Egyptian consumers towards SMS advertising which is considered the simplest and the most widely used type of mobile advertising in Egypt. It measured the factors that affect the consumers' attitudes towards SMS advertisements which consequently make the SMS advertisements effective. Also, it studied the relationship between the consumers' attitudes towards the brands that are advertised through SMS and their purchase intentions. The field study was done using a survey among young consumers. The results of the research show that Egyptian young consumers generally hold favorable attitudes towards SMS advertisements. Also, it proves that the lack of irritation of the SMS advertisements, incentives that are found in SMS advertisements, utilization of contextual information, attitudes towards advertisements in general, informativeness of SMS advertisements and personalization of SMS advertisements are important factors that affect the attitudes of young consumers towards SMS advertisements. In the recent years, the field of advertising has been subjected to dramatic changes. One of the main reasons of these changes was the rapid digitalization of media and the development of technology. This digitalization has resulted in new types of media such as the mobile phone, which offers better possibilities to reach consumers and to interact with them through mobile advertising. As the mobile advertising is a new practice, many sides of it need further studying and investigation. Unfortunately, there is little known considering the effectiveness of the mobile advertising campaigns and the factors that affect its success (Vatanparast 2007).In order to fully benefit from the potentials of the mobile phone as an advertising channel, marketers must fully examine and understand the unique characteristics related to it and the ways that consumers interact with it. Mobile phone usage is increasing dramatically in the world including Egypt. According to the recent figures of Egypt, the number of mobile phone subscribers reached 96.89million with a penetration of about 116 percent (Ministry of communications and Information technology 2013). This fact creates an excellent opportunity for the companies that want to advertise to the Egyptian consumers through mobile advertising. In this research, the researchers focus on SMS advertising which is very suitable for a study conducted in Egypt where other forms of mobile advertising are still rarely used. SMS advertising is the simplest form of mobile advertising which can be defined as 'The set of practices that enables organizations to communicate and engage with their audience in an interactive and relevant manner through any mobile device on network' (Mobile Marketing Association 2009). The consumers' attitudes towards mobile advertisements have been studied in different researches. However, these researches showed contradicting findings. For example, some researchers stated that consumers hold unfavorable attitudes and responsiveness towards mobile advertisements (Tsang et al. 2004; Heinonen and Strandvik 2007; Van der Waldt et al. 2009; Basheer and Alnawas 2010). However, other researchers found that consumers in general hold positive attitudes towards the mobile advertising (Haghirian and Madlberger 2005; Faraz and Sayedreza 2011; Keshtgary and Khajehpour 2011).Academics and practitioners have agreed that mobile advertising is an effective marketing tool in reaching the young consumers market (Scharl et al. 2005).


FDI, Knowledge and Technological Spillovers, and Business Growth in Thailand

Dr. Sutana Boonlua and Eakapoom Wongsahai

Mahasarakham Business School, Mahasarakham University, Thailand



This research examines the knowledge and technological spillover affects to the business growth of FDI in Thailand.  The objectives of this research are 1) to examine the role of Thai manufacturing subsidiaries in knowledge and technology spillover in Thailand, 2) to determine the knowledge and technology spillover in manufacturing companies in Thailand impact to its business growth, and 3) to introduce the roles of university-industry linkages and government incentives as well as the quality of human capital in enabling or constraining knowledge and technology spillover.  Questionnaires conducted in English were collected by in-depth interview to 400 CEOs of the FDI in Thailand.  There are 24 independent variables and grouped into two groups as named as knowledge and technological spillover factors.  The correlation matrix shows that the business growth of the FDI in Thailand has positive correlation to all independent variables at the 1% level of significant.  In summary, there is only the knowledge spillover factor is positive and significant to the business growth of FDI in Thailand at the 1% level of significance.  Among developing countries in Southeast Asia such as Malaysia, Indonesia, the Philippines, and Thailand, the inward foreign direct investment (FDI) of transnational companies (TNCs) has become a major source of technology, knowledge and funds. Thailand is an example of economic growth rates in the 1980s and 1990s have paralleled that of its more technologically sophisticated neighbors such as Singapore, Malaysia, South Korea, and Taiwan. Its technology development lags behind the neighbors quite significantly (Wang and Chien, 2007).  Research and development (R&D) is rarely undertaken by its domestic companies, and only one-third of them have reverse engineering capability (Poon and Rajarattanochote, 2010). Few Thai companies, including large native companies, are interested in building firm-specific technological assets and know-how reflecting perhaps their role as trading companies historically. Rather, many Thai companies on TNCs for technology or they import foreign technology. The Royal Thai government has only begun to incorporate science and technology policies into its national development plans. FDI policies, however, have been much more concerned with regional decentralization and equity indigenous technological capability (Brown, 2000; Poon and Rajarattanochote, 2010). Moreover, it is unclear whether favorable FDI policies in the form of corporate and tariff incentives have strengthened technological learning among Thai companies. This research seeks to examine the role of Thai manufacturing subsidiaries in technology transfer in Thailand. Also this research determines the technology transfer in manufacturing companies in Thailand impact to the economic growth. Specially, it focuses on the manufacturing activities of companies which locate in Bangkok. The majority of TNCs subsidiaries are located in Bangkok, although one-fourth of them may also be found in the neighbouring provinces of Chonburi and Rayong. The geographic concentration of TNCs investment and activities in Bangkok draws attention to the role of TNCs-led spillovers in technology transfer. Puga and Venables (1999) have shown that economic development and underdevelopment are direct outcomes of a country’s pattern of spatial agglomerations since industry and investment are concentrated in urban agglomerations. Spatial agglomerations highlight the influence of geographic relations in creating forward and backward inter-firm technology transfers between TNCs subsidiaries and Thai suppliers and customers. The logic of these relations indicates that Thai and TNCs are concerned in the metropolitan capital of Bangkok because spatial proximity lowers transaction and network costs. Further, knowledge is spatially sticky (Kogut and Zander, 1992); hence, technology transfer will be enhanced when Thai and TNCs are located in close proximity. Bangkok’s agglomeration advantages, however, also pose a dilemma: on the one hand, spatial concentration reduces the interactions and transaction costs of technological transmission and diffusion; on the other hand, the city’s primacy level is among the highest in Asia (Batten, 2001) so that regional decentralization policies have long been a priority of the Royal Thai government.


On Corporate Governance Issues in Small Innovative Firms

Dr. Walid A. Nakara, Groupe Sup de Co Montpellier Business School

Montpellier Research in Management, France



The governance of small firms is at the heart of current debates on corporate governance. The present study sheds light on both the perception and the practice of governance in small innovative enterprise, with a particular attention to innovative biotech environments in France. Who are the key actors of governance? What governance are we talking about? What are the main expectations and obligations of the owner-managers? Are there any compromises and what is the stake?  The answers to these questions and the lessons learned from the case of Biotech industry are beneficial to performance and both theory and practice of corporate governance and innovation management.  According to the OECD (2004), biotechnology is defined as, “The application of science and technology on living organisms, parts or products thereof, to transform materials, of living or non-living origin, to produce new knowledge or develop new products or processes”. Some research institutes, such as Ernst and Young, suggest a broader definition, referring more generally to “technological applications from the life sciences”. Other studies rely on a more precise definition, focused on either genetic engineering or on fermentation techniques and their derivatives, depending on the industry and the applications that are envisaged. Apart from these differences, the criteria used to identify biotechnology firms are extremely diverse. In the present study we examined small innovative biotechnology firms. In France, these companies can be defined as small firms (fewer than 50 employees) with very strong growth and for which the main activity is to produce new (scientific) knowledge for the life science industries.  Although the issue of governance of innovative young companies has aroused the interest of many authors (Depret and Hamdouch, 2004), it is still too early to talk about a dominant model of governance, let alone a theory as such. From this perspective, our purpose is to contribute theoretically and empirically to a better understanding of the issue of governance in small innovative firms by interviewing entrepreneurs about their perceptions, and also about their concerning their governance practices. To conclude, a series of lessons will be drawn for the use of entrepreneurs. Nowadays, governance in large firms is a rich and well documented field of study. Researchers and practitioners have brought, in their own way, many interesting insights into questions of power, coordination, monitoring and decision-making faced daily by managers and executives. In this comprehensive programme, the reflections of most have focused exclusively on governance issues specific to the management of large big firms, often at the expense of medium and small entrepreneurial companies. The reasons for this bias are numerous and beyond the scope of the present paper. However, the answers provided by the study of corporate governance address specific problems that are relevant only to investors in large companies, who usually managing fairly routine business in well-defined markets. These models are less effective for the analysis of hyper-competition and dynamic markets. That is why authors such as Nooteboom have advocated, in the early 1990s, a dynamic approach to governance theories that extend beyond the contractual framework. After all, as Kogut and Zander (1996) argue, “organizations know more than their contracts can tell”.  The entrepreneur is seen by many economists, primarily by J. A. Schumpeter (who is considered as the founder of the modern economic theory of the entrepreneur) as the engine of economic activity because he or she takes risks (economic, technical and financial). In this sense the entrepreneur innovates, creating at the same time prosperity and jobs. Following the work of Depret and Hamdouch (2004), it needs to be made clear that the founders of biotechnology companies are not necessary star scientists, that is to say, high-level scientists known internationally in their field. Many studies have emphasized the diversity of career paths of founders of such companies in Europe and in the United States (Hamilton et al., 1990; Audretsch and Stephan, 1996; Catherine and Corolleur, 2001). In relation to small innovative firms, it is impossible to identify a ‘typical’ entrepreneur. Indeed, three different types of entrepreneurs have been identified in the literature: ‘Schumpeterian’ (who starts the innovation project), ‘kirznerien’ (who manages the market and the actors involved) and ‘penrosien’ (who has specific psychological traits and knowledge).


Applying the Principle of Artificial Intelligence in E-Training System

Natcha Tiempitak, Chulalongkorn University, Bangkok, Thailand

Dr. Onjaree Natakuatoong, Chulalongkorn University, Bangkok, Thailand

Dr. Thitipong Nandhabiwat, Rangsit University, Bangkok, Thailand



Artificial Intelligence (AI) is a branch of computer science that deals with the development of intelligence for the machines, especially with a computer system. The science of artificial intelligence is now applied to the educational management and the learning of each individual.  This article proposed how to bring 3 principles of artificial intelligence to be a part of each module in E-training system in order to develop traditional E-training to become an intelligent E-training system. Its genius can be indicated 5 outcomes as follows  1. Intelligence feedback refers to what the system reflects learners to acknowledge their results and reasons of actions. It appears in “User Interface Module”.   2. Intelligence guidance refers to a guiding learner to follow what the system has made. This led learners to reach the highest cognitive competency level of Bloom’s taxonomy. The intelligence guidance is contained in the elements of “Learning Strategy Module”.   3. Diagnostic intelligence means specialization to compare the level of learners competency with cognitive criteria or create the conditions in advance. The intelligence diagnosis is packed in elements called “Diagnosis Module.” 4. Intelligence in making decision refers to the decision and selection of learning strategy suitable types of learners and make a decision to select the reinforcement lessons according to the knowledge level of learners. It is packed in the elements of “Data and Knowledge base Module”. 5. Interaction intelligence refers to the two-ways communication with learners. This genius will be packed in the elements of “Expert Module”.  The result of E-training that contains the principles of artificial intelligence has the ability imitate teaching instead of humans and be able to develop the highest learners’ competency level in group of cognitive science. Furthermore, the total of technology and innovation acceptance level - the most in perceived usefulness, perceived ease of use, perceived artificial intelligent and intention to use that have achieved 92%.  The principle of artificial intelligence in E-training is regarded as a development tool in cognitive domain to support the development strategy of teacher and educational staff scattered across the country to receive E-Training that rely on their self-development anytime with the network information technology suitable for the learners’ behavior.  Attempt of “National Institute for Development of Teachers” (NIDTEP) that organized by The Ministry of Education of Thailand.  It concerns about national direction for developing Thai teachers and educational staffs as well as both of personnel of state and private resources and seeking corporation from the government, private , both within and outside the country. The Ministry of Education of Thailand has strategies of development educational personnel scattered across the country to receive training development evenly with the network information technology and the personal network focused on the role of teachers responsible for students’ facilitator who helped , guided academic support and reinforced activities to learners focusing on creative caused new experience to learners and to follow and check the work that learners produced  which means teachers must be seek their new experiences. This development of teachers to learn is regarded as adult learning based on the principle of 3 reasons via: 1. Change from rely on others to be themselves that can bring self-directing and known cause and effect and they can be decided by themselves.  2. Learn by experiences which are collected with different methods since childhood. The more older the more accumulated experience. It’s a very valuable source for learning about such experience. Affecting learning can be exchanged or experienced with the instructor. The original experience can be taken to connect or relate to new ones. So the new experience is more meaningful..  3. Readiness to learn with maturity and readiness to learn more than children. In particular, if what has learnt helpful and necessary to practice in daily life, it will cause value learning more and more..   E-Training is a development tool to support the development strategy of teacher and educational staff scattered across the country that rely on their self-development anytime with the network information technology suitable for the learners’ behavior.


Bridging the Gap and Filling Workforce Needs in Connecticut:Applied Engineering and Business

Dr. Karen Coale Tracey,  Central Connecticut State University, New Britain, CT

 Dr. Xiaobing Hou, Central Connecticut State University, New Britain, CT

 Dr. Shuju Wu,  Central Connecticut State University, New Britain, CT



This paper describes the ongoing development of a new Bachelor of Science in Networking Information Technology (NIT) program as well as its curriculum and laboratories. As the only such program in the state of Connecticut, NIT offers students a broad yet solid background in the area of study. This paper focuses on the balanced curriculum and laboratory that not only provide students with foundation and principles of networking and information technology (IT) systems but also expose students extensively to new emerging technologies and equipment. The “management” component of the program is also described in the paper and students are encouraged to take advantage of it to better round out their degree program. In addition, this paper introduces the important role of industry in the program development and how the extensive collaboration with industry makes sure that the up-to-date curriculum offers the industry highly qualified workforce. The rapid growth of computer networking and information technology requires broader technical expertise at all levels to support applications, apply the new technologies and maintain the competitive edge required for success in the global environment. Having recognized these needs, the Computer Electronics and Graphics Technology (CEGT) Department at Central Connecticut State University (CCSU) developed a new degree program in Networking Information Technology (NIT) which will continue to educate and train the necessary workforce for supporting these initiatives.  The predecessor of NIT is the Networking Technology option under the BS Industrial Technology degree, started in Fall 2001. With its multidisciplinary curriculum, such as electronics, computer science, business, and technology management, the enrollment of the option successfully grows to about 100 students. This provides a solid foundation for an independent degree program in this area. In addition, the feedback from industry demonstrates that a broad curriculum with more up-to-date networking technologies as well as related information technology areas is more favorable. Therefore, the faculty have proposed the new Bachelor of Science in Networking Information Technology program with an updated curriculum.  Standard engineering courses focus on the technical aspects, but under-address the challenges in system design and configuration, maintenance and troubleshooting, whereas traditional technical schools do not equip students with enough theoretical background. The faculty believe that a curriculum balancing both the theoretical and technical requirements is the best for student’s career future and industry’s needs in a long run. The new degree program is unique in this aspect because it not only tries to expose students to new emerging technologies and equipments through its updated curriculum and laboratories but also offers students foundation and principles of system design and development. The department has been working with the industry to make sure that the curriculum reflects the rapid growing IT industry and covers a wide spectrum including networking theory and technology, server and system administration, information and network security, computer hardware and software, electronics, telecommunications, fiber optics, business management and marketing. To enhance the foundation, a new 100-level major course has been added to introduce essential skills in networking and computer information technology.  The new program's laboratory is under continuous update to enhance student's hands-on experience with the cutting-edge equipment. Recently, state-of-the-art networking routers, switches, security appliances and wireless devices have been added to the laboratory. Students will gain design, deployment, administration and troubleshooting skills in a variety of networking and information technology environments.  As a member of the VMware IT Academy Program, the new program applies virtualization technologies to offer students enriched and more complicated laboratory scenarios without increasing the overall cost and budget. Similar as the curriculum design, the laboratory development benefits significantly from industry help and donation.


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