The Journal of American Academy of Business, Cambridge

Vol.  19 * Num.. 2 * March 2014

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

 Online Computer Library Center   *   OCLC: 805078765 

National Library of Australia * NLA: 42709473

Peer-Reviewed Scholarly Journal

Most Trusted.  Most Cited.  Most Read.

Members  / Participating Universities (Read more...)

All submissions are subject to a double blind peer review process.

Main Page     *     Home     *     Scholarly Journals     *     Academic Conferences     *      Previous Issues     *      Journal Subscription

 

Submit Paper     *     Editorial Team     *     Tracks     *     Guideline     *     Standards for Authors / Editors

Members  *  Participating Universities     *     Editorial Policies      *     Jaabc Library     *     Publication Ethics

The primary goal of the journal will be to provide opportunities for business related academicians and professionals from various business related fields in a global realm to publish their paper in one source. The Journal of American Academy of Business, Cambridge will bring together academicians and professionals from all areas related business fields and related fields to interact with members inside and outside their own particular disciplines. The journal will provide opportunities for publishing researcher's paper as well as providing opportunities to view other's work. All submissions are subject to a double blind peer review process.  The Journal of American Academy of Business, Cambridge is a refereed academic journal which  publishes the  scientific research findings in its field with the ISSN 1540-7780 issued by the Library of Congress, Washington, DC.  The journal will meet the quality and integrity requirements of applicable accreditation agencies (AACSB, regional) and journal evaluation organizations to insure our publications provide our authors publication venues that are recognized by their institutions for academic advancement and academically qualified statue.  No Manuscript Will Be Accepted Without the Required Format.  All Manuscripts Should Be Professionally Proofread Before the Submission.  You can use www.editavenue.com for professional proofreading / editing etc...

The Journal of American Academy of Business, Cambridge is published two times a year, March and September. The e-mail: jaabc1@aol.com; Journal: JAABC.  Requests for subscriptions, back issues, and changes of address, as well as advertising can be made via the e-mail address above. Manuscripts and other materials of an editorial nature should be directed to the Journal's e-mail address above. Address advertising inquiries to Advertising Manager.

Copyright: All rights reserved. No part of the material protected by this copyright notice may be reproduced or utilized in any form or by any means, including photocopying and recording, or by any information storage and retrieval system, without the written permission of JAABC journals.  You are hereby notified that any disclosure, copying, distribution or use of any information (text; pictures; tables. etc..) from this web site or any other linked web pages is strictly prohibited. Request permission / Purchase this article:  jaabc1@aol.com

 

 Copyright © 2018 JAABC. All rights reserved.

Forecasting Excess Stock Return: A Comparative Study between U.S. and Germany

Dr. Noha Emara, Rutgers University, Camden, NJ

 

ABSTRACT

The results of Lettau and Ludvigson (2001) show that Cay-LL has a significant predictive power both in the in-sample and the out-of-sample forecast of excess stock return. Our study departs from Lettau and Ludvigson (2001) in adding and comparing other two estimates of cay namely Cay-OLS and Cay-DLS besides Cay-LL for forecasting excess return in both U.S and Germany over the period 1969:2 to 2005:1.  For the case of the U.S., the results suggest that Cay-OLS has the strongest in-sample and out-of-sample forecast for nested models.  The results also suggest, for the case of Gernamy, that the three alternative methods of estimating cay do not have any statistical significant effect in either the in-sample or the out-of-sample forecast of nested models. Finally analyzing the out-of sample forecast of non-nested models, using the Diebold Mariano test, the results show that for the case of U.S, Cay-OLS, Cay-DLS and Cay-LL have equal predictive accuracy. On the other hand, neither Cay-OLS nor Cay-DLS have equal predictive accuracy when compared to Cay-LL in Germany.  Within the financial markets, several types of financial variables such as the ratios of price to dividends, price to earnings, and dividends to earnings are used to forecast fluctuation of excess stock returns in both domestic and foreign markets. However, these indicators are oftentimes unreliable at predicting such fluctuations. Lettau and Ludvigson (2001) shows that the trend deviations of these macroeconomic variables is a strong predictor of the of the excess stock returns over a treasury bill rate, and can account for a substantial fraction of the variation in future excess returns. Where the variable that reflects these deviations is called “cay”. In this paper we will compare three different ways of estimating this trend deviation in Germany and U.S over the period 1969:2 to 2005:1. The variables are called Cay-OLS, Cay-DLS and Cay-LL. Where the first refers to estimating the macroeconomic trend deviations using the ordinary least square method, the second refers to estimating it by the dynamic least square method and finally the third variable refers to estimation by the Ludvigson and Lettau method.  The ability of these three variables, cay-OLS, cay-DLS and cay-LL, besides other traditional variables such as dividend ratio, payout ratio and bill rate to predict in-sample excess stock return over treasury bill rate in both Germany an U.S is compared. In addition the out-of sample forecast of cay-OLS, cay-DLS and cay-LL using fixed estimation scheme for the period 1990:1 to 2005:1 will also be estimated. The mean squared error MSE-F test is used to test for the ability of the unrestricted model (the one includes the variable cay) to hold all the information contained by the restricted model or “encompass”. The out-of sample forecast of alternative non-nested models will also be compared. The Diebold Mariano (1995) test is used to test for the equivalence accuracy of the two models under comparison. The paper is organized as follows; Section I explains three ways of estimating the trend relationship among consumption, labor income, and asset holdings. Section II explains the asset return data and the correlation matrix; section III quarterly in-sample forecasting regressions; Section IV Out-of-Sample Nested forecasting regression; Section V Out-of-Sample Non-Nested forecasting regression; Section VI concludes and section VII references. The data used for the estimation are quarterly, seasonally adjusted, per capita variables, measured in 2000 Deutsche mark for Germany and 2000 dollars for the U.S, over the period of the second quarter of 1969 to the first quarter of 2005 for both Germany and U.S.  The consumption data are for non-durables and services in 2000 chain weighted deutsche mark and 2000 chain weighted dollars for Germany and U.S respectively.

 

Full text

 

The Deming Philosophy of Management: Causes of Its Difficulties and Failures

Dr. Tony Polito, East Carolina University, Greenville, NC

Dr. George Audi, Ohio University, Athens, OH

ABSTRACT

The population of Deming subject matter experts (SMEs) were surveyed in order to determine their beliefs regarding the causes of implementation difficulties and failures associated with Demingistic principles. The results indicate an informal conclusion that management, especially senior management or corporate leadership, represent the most common root cause of such difficulties and failures. This finding is, in general, in keeping with Deming’s posture that the commitment of leadership is requisite to successful quality management. W. Edwards Deming is regarded by many individuals as the most important and influential management philosopher since Fredrick Taylor. Deming’s perspective on management is almost totally contrary to that of common practices of Western management and that of business school curriculum. Deming argued such practices and curriculum are a path to poor quality, higher customer dissatisfaction, higher costs and lower profits. He is widely credited as the individual most influential in the economic recovery of post‑World War II Japan as well as the rise of quality as a operations technique and a management philosophy during the late 20th Century; many statements to that effect can be found in print, comments within Bean (1985), Dixon (1987), Kusumoto (1987), Lazzareschi (1993) and Milstein (1992) are exemplars. In 1980, a year in which t1he per capita gross national product in the United States, once first in the world, had fallen to seventh place, an NBC broadcast If Japan can, why can’t we? highlighted Deming’s teachings. Thereafter, Deming’s advice was avidly sought in America; he consulted regularly at Ford, and at GM as well. In 1986, Deming authored Out of the crisis (1986) to warn Western managers as to the causes and severity of the decline in their economy. In 1991, Deming developed within his final book The new economics for industry, government, education (1994), his System of Profound Knowledge, which he called “a comprehensive theory for management, providing the rationale by which every aspect of life may be improved.”  Dr. Deming and his philosophy have been honored and respected worldwide. The Second Order Medal of the Sacred Treasure was bestowed on Deming by Emperor Hirohito for his contributions to Japan’s economy. In 1950, Japan’s highest national award for quality, named the Deming Prize, was established by JUSE, the Japanese Union of Scientists and Engineers. The main lobby of the Toyota headquarters building in Tokyo is today still dominated by three portraits, one of the company’s founder, the second of its current board chairman and the third, and largest, of Dr. Deming. In 1983, Deming was elected to the National Academy of Engineering. In 1985, Deming began lecturing at Columbia University under the title of Distinguished Visiting Scholar. In 1986, he was inducted into the Science and Engineering Hall of Fame. Also in 1986, Deming received the National Medal of Technology from President Reagan “for ... his advocacy to corporations and nations of a general management philosophy that has resulted in improved product quality with consequent betterment of products available to users as well as more efficient corporate performance.” Shortly thereafter, Deming received an award for his

 

Full text

 

Forensic Accounting – A Growing Niche in the Field of Accountancy

Dr. Consolacion Fajardo, Professor, National University, California

 

ABSTRACT

This piece of research will examine the reasons why forensic accounting is an expanding field.  The objective is to comprehend the drive for going into forensic accounting.  It will include a summary of some red flags or indicators of possible fraudulent activities that organizations need to watch out and to be careful about.  It is hoped that this article will contribute to the discussion on the importance of forensic accounting in making an autopsy of the financial records to document fraud or crime, as well as a preventive measure for companies to minimize fraud in the organization. Modern forensic accounting first emerged in the 1970s and early 1980s, most notably in connection with insider stock-trading fraud cases and the scandals in the savings and loan business.  Forensic accountants were called in to reconstruct the books of failed institutions and determine what went wrong.  Unlike conventional accounting which operates from the assumption of honesty, forensic accounting treats all figures suspect until proven otherwise. Forensic accountants are similar to investigators because they track suspects based on financial documents.  Forensic accounting can be used not only to hunt down the culprits, but also to prevent fraud and other white collar crimes.  Forensic accounting is not part of the usual routine accounting.  It is considered an additional tool that can be utilized to prevent, white –collar crime and stop irregularities before they grow into crises. “When America’s federal investigators wanted to prosecute Al Capone, who did they call? An accountant.  Times have not changed much since the bean counters brought down Chicago’s crime boss for tax evasion.”  (The Economist, 1996).  With the growing complexity of the business environment and the growing number of business related investigations, forensic accounting professionals are increasingly asked to assist in the investigation of financial and business related issues.  The integration of accounting, auditing and investigative skills yields the specialty known as Forensic Accounting.   Forensic accounting provides an accounting analysis that is suitable to the court which will form the basis for discussion, debate, and ultimately dispute resolution.  It encompasses both litigation support and investigative accounting.  Forensic accountants utilize accounting, auditing, and investigative skills when conducting an investigation.  Equally critical is the ability to respond immediately and to communicate financial information clearly and concisely in a courtroom setting.  Forensic Accountants are trained to look beyond the numbers and deal with the business reality of the situation. In 2008, Digabriele conducted a nationwide survey on a random sample of 1,500 accounting academics, forensic accounting practitioners, and users of forensic accounting services (attorneys).  The objective is to identify relevant skills of forensic accountants and whether any differences exist in the views of those skills among the three significant stakeholders. Nine competencies were included in the study:  (1) deductive analysis, (2) critical thinking,  (3) unstructured problem solving, (4) investigative flexibility, (5) analytical proficiency, (6) oral communication, (7) written communication, (8) specific legal knowledge, and (9) composure.  The results indicate that practitioners and academics agree that critical thinking, unstructured problem solving, investigative flexibility, analytical proficiency, and legal knowledge are important skills of forensic accountants.  Users of forensic accounting services rated deductive analysis as less important than did academics.  However, both groups agreed with practitioners, who viewed deductive analysis as important. The groups did not differ on oral communication, written communication, or composure rankings.

 

Full text

 

An Integrated Approach using Markov and Rolling Forecasting Models for Predicting Long-Term Academic Performance

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

Kris Sankaran, Stanford University, Stanford, CA

 

ABSTRACT

This research looks at student academic performance as measured by Grade Point averages (GPA) in sequential quarter intervals and proposes a methodology to construct a transition matrix that captures the probabilistic movements of GPA over time. A Markov model is then proposed to calculate the steady state probabilities and predict the proportion of students in each grade group over the long run. To minimize prediction errors due to non-homogeneity in the academic strengths of students who are admitted over time, a rolling forecasting procedure based on individual student performance is integrated into the Markov approach. Two worked out examples are given, one to demonstrate the steps in applying the Markov model and another to demonstrate the integrated forecast procedure. The average root mean square error of the proposed integrated forecast procedure is less compared to the standard mean-based prediction. The integrated forecast procedure also offers the benefit of requiring only minimal student data for prediction, yet a paired t-test comparing the predicted steady state probabilities under the Markov and the integrated approach shows the latter to be just as effective. The integrated approach is an additional strategic decision-making tool for administrators in monitoring and maintaining consistent academic performance. Every educational institution wants its students to learn and succeed. From admission to graduation, students go through rigorous curricula with guidance from instructors, staff and administrators. One of the best measures of performance available to these institutions is how the students do academically. The most commonly used measure is the Grade Point Averaging (GPA) system which typically is tracked over successive time periods such as quarters or semesters. Many institutions require a minimum GPA of C for graduation and allocate sizable resources to minimize the dropout rate. After all, every educational institution realizes that student success reflects upon the quality of the institution as well as the public perception of it.  In this paper, we model the movement of the student GPAs as results of repeated trials over successive time periods. Such a period can be a quarter or a semester. While the exact state of GPA cannot be predicted with certainty for a given period, it is reasonable to hypothesize that transition probabilities are good predictors of the movement of GPA from one state to the next. If we have a large enough student population data collected over time from which to compute the transition probabilities, we can be reasonably confident of the stability and robustness of the transition matrix so derived. We can thus model the process as a Markov chain with stationary transition probabilities. The benefit of this approach is that administrators can estimate the proportion of students in the various grade categories and if needed adopt new policies and intervention strategies supplemented by additional resources to maintain academic performance. This paper is organized as follows. First, prior research in education that has applied mathematical modeling based on probability theory is discussed. Second, the theory and the mechanics of the proposed Markov model to predict student performance is presented.

 

Full text

 

The Impact Product Quality has on Perceptions of Price-Value, Satisfaction, and Behavioural Intentions

Dr. Sean M. Hennessey, University of Prince Edward Island, Charlottetown, PEI, Canada

Dr. Dongkoo Yun, University of Prince Edward Island, Charlottetown, PEI, Canada

Dr. Roberta MacDonald, University of Prince Edward Island, Charlottetown, PEI, Canada

 

ABSTRACT

A model is developed that considers the impact a tourist product's perceived quality has on three variables: the perception of price paid versus value received, satisfaction with the product, and behavioural intentions. The model was tested using responses to a survey of 3,235 golfers on Prince Edward Island (PEI), a major tourist destination in Canada.  Three types of golfers were considered: visitors, permanent residents, and seasonal residents of PEI.  A factor analysis was completed to develop five measures of the perceived quality of the golf course that the respondent had just played.  Three multiple regression models were then used to test the relationships between the variables of interest.  This appears to be the first study that models golfer behaviors and intentions by resident type. The results of the study indicate that a significantly positive relationship exists: 1) between the perceived quality of the course played and the feeling that value was received for the green fee paid; 2) between quality of the course, perceptions of price-value, and satisfaction; and 3) between perceived quality, price-value, satisfaction, and intentions to return to golf and to recommend the course to others. Overall, the results provide strong support for a the proposed model and contributes to a better understanding of tourists’ perceptions and their behavioural intentions for an important product offered by many tourist destinations. Prince Edward Island (PEI) is Canada’s smallest province with a population of just 140,000 on 5,684 square kilometres of land.  PEI is separated from its sister provinces of Nova Scotia and New Brunswick by the Northumberland Strait.  In 1997, a bridge was opened providing a permanent link to the mainland.  PEI has been called "the million acre farm," and agriculture is the biggest industry.  PEI is known for its potatoes, and fields with rows of green potato plants set in the red soil of the Island are a common sight.  The combination of the red and green of the fields, and the blue of the water makes for striking scenery, and is one of the reasons why tourism is the PEI's second largest industry.  In the mid-1990s, in an attempt to diversify the tourism product offered, the PEI Department of Tourism made golf a core part of its tourism marketing strategy.  With 25 courses spread over a relatively small area, PEI has become a golfing destination for visitors from across the country and continent. The golf market is a dynamic and growing activity globally (Kim & Lee, 2009) and if developed and marketed appropriately, can be successful and profitable.  As a niche tourism product, golf’s ability to attract certain types of visitors may lead to higher returns for the tourism destination. The golf market represents a significant opportunity to grow and maintain visitation to a destination, and generate substantial revenues for the tourism industry and government (Hennessey, MacDonald, & MacEachern, 2008).  With the high fixed development costs associated with golf courses, golf marketers need to understand visitors’ behaviours in order to improve profitability and competitiveness.  Research on tourist behavioral characteristics indicates that recommendations from others result in visits and revisits to a destination (Oppermann, 2000).

 

Full text

 

Human Resource Issues in BYOD Policy Development

Dr. Kathryn J. Ready, Winona State University, Winona, MN

Dr. Marzie Astani, Winona State University, Winona, MN

Dr. Mussie Tessema, Winona State University, Winona, MN

 

ABSTRACT

As the number of Bring Your Own Devices (BYOD) continues to rise in the workplace, both for individual and collaborative use, increasing attention to the adoption of BYOD policies is warranted.  Well-defined policies are essential in providing direction to employees on devices that are supported and can be accessed in organizations for work-related means.  Despite the known risks, particularly among IT professionals, organizations have been slow to adopt security-awareness policies and training programs.  However, the adoption of a plan requires careful analysis as to the issues that an organization may be confronted with and/or the type of security breach it may face. Well-defined policies are essential in providing direction to employees on what devices are supported and can be accessed in organizations.  This research study examines fifty-seven responses from an organizational survey of service and manufacturing firms in the upper Midwest region concerning the use, training and policies in dealing with BYOD in the workplace.  Recommendations are provided to support the development of BYOD workplace policies. Bring your own devices (BYOD) is the practice of using personal devices for business or bringing one’s own devices to the workplace for work-related purposes.  BYOD include smartphones, tablets and laptops and the use of these technological devices to make life easier is significantly increasing. There are already more than 1.08 billion smartphone users in the world, and 91.4 million of these users are from the United States (Go, 2012). Smartphone users have increased by almost 47% during 2011-12, and are expected to reach 2 billion by 2015 (Worldwide Smartphone Users, 2012).  Approximately 89% of smartphone users use their smart phones throughout the day, 92% of smartphone users use their smartphone to send text messages to other phones and almost 84% of users use their smartphones for browsing the internet (Go, 2012). Worldwide devices (the combined shipments of PCs, tablets and mobile phones) are projected to total 2.4 billion units in 2013, a nine percent increase from 2012, and are expected to reach more than 2.9 billion units by 2017 (Gartner, Inc., 2013). Currently, the average number of connected devices is 2.9 (Eddy, 2013), and is expected to reach 3.3 by 2014 (Cisco, 2012).  As proliferation of technological devices continues, the need for synchronizing devices and developing means to prevent security breaches is a major concern.  One of the major reasons technological devices continue to increase in the workplace is that organizations and employees seek out new and more efficient ways to conduct business.  With more and more mobile devices being used for work-related purposes, organizations must develop policies and practices on how these devices can securely access corporate data and information. Users demand seamless access to corporate resources regardless of the type of device they use or where the device originates (Cisco, 2012).  This demand is being met by organizations due to the productivity gains that these devices allow.  Intel surveys reveal that on average, workers report saving 57 minutes a day, totaling 5 million hours annually, due to BYOD usage (Greengard 2013). 

 

Full text

 

 

Accounting and Audit Decision Making With Fuzzy Multiple Payoffs and Dependent Probabilities

Dr. Awni Zebda, Texas A&M University-Corpus Christi, Corpus Christi, Texas

 

ABSTRACT

Recently, different models to address the problem of ambiguity in decision making have been provided by expected utility theorists, behavioralists, and fuzzy set theorists and have been used by several accountants in addressing the ambiguity in some accounting and auditing problems.  The objective of this paper is to review and evaluate some of these ambiguity models.  The paper also provides an extension of these models.  The proposed extension does not require the assumptions of single payoff and independent probabilities assumed by much of the literature on decision theory and previous ambiguity models and, thus, it provides for more realistic and flexible representation of decision problems when these assumptions are inappropriate. For the last thirty years, decision theory of expected utility (e.g., von Neumann and Morgenstern [1944], Savage [1954]) has been the most widely recommended model for decision making under uncertainty.  The theory has been extensively used by accountants as a basis for the development of models to solve accounting problems.  The theory has also been the basis for much of the behavioral literature dealing with accounting decision making. However, decision theory and, consequently, accounting decision models and analysis fails to deal with ambiguity for a number of reasons [Zebda, 1991, 1995].  First, decision theory does not allow for fuzzy states of nature which are common in accounting problems.  Second, the theory is not suitable to address the ambiguity attached to probability judgments.  Third, the theory requires precise payoffs that are difficult to obtain in real life decisions.  Finally, the theory mistakenly assumes a fixed level of accuracy and precision and, thus, it does not allow decision makers to express their perceived imprecision of the estimates required for the analysis. The problem of ambiguity and the inability of decision theory to deal with ambiguity were noted by fuzzy set theorists, behavioralists, and expected utility theorists, including Savage [1954] himself.  The effect of ambiguity on decision making was supported by the empirical research on Ellsberg's paradox (e.g., Curley and Yates [1985], Dolan and Jones [2004], Einhorn and Hogarth [1985, 1986], Ellsberg [1961], MacCrimmon and Larsson [1979], Slovic and Tversky [1974], Yates and Zukowski [1976]).  The paradox suggests that when given a choice between ambiguous and nonambiguous options, the majority of people display ambiguity avoidance behavior which violates the axioms of decision theory including Savage's sure thing axiom and the additivity of probabilities principle. Recently, some behavioralists, expected utility theorists, and fuzzy set theorists have provided models that extend decision theory to allow for some aspects of the ambiguity in decision making.  These models were also used by accountants in addressing the ambiguity in accounting.  The purpose of this paper is to review and evaluate some of these models. 

 

Full text

 

Sustainability Content Analysis of Management Texts

Dr. Constance Bates, Florida International University, FL

Dr. Ronnie Silverblatt, Florida International University, FL

 

ABSTRACT

Although the concept of sustainability is familiar to many, it has not yet become a standard part of the business college curriculum.  While some business schools have sustainability courses and have integrated sustainability into the curriculum, others have not.  Perhaps schools are trying to determine if this new topic is truly mainstream or just peripheral,  much like corporate social responsibility was twenty years ago.  A study of the sustainability content of introductory management textbooks was conducted to help business schools ascertain how the subject is evolving in management textbooks. This content analysis provides an up-to-date look at how much space is being devoted to sustainability.  This may be useful to professors is designing their curricula and choosing their textbooks. There is no doubt that the word and concept of sustainability is familiar to many.  We often hear about going green and taking care of the environment.  Businesses proudly announce their efforts to go green in order to attract customers and clients who value this effort.  Accordingly, sustainability has become a mainstream opportunity for both consumers and businesses.  The question then arises: what, if anything, should colleges of business do about this topic?  Should they immediately create a sustainability major or integrate sustainability into the business core?  Or, should they wait until students or employers start requesting skills in this area before taking any actions?  Or maybe, there is some intermediate response to this new phenomenon.  A survey of business schools reveals a wide range of responses as a few have developed a sustainability major, while others have very little (Silverblatt, 2012).  While confronted with the opportunity to integrate sustainability into the business curriculum, colleges may want to take stock of how much the current business curriculum contains sustainability.  The goal of this paper is to assist professors with their decisions regarding sustainability in the curriculum.  The study is a content analysis of sustainability in introductory management textbooks.  This provides information on how much material in a text is devoted to sustainability.  With this information, curriculum committees can see how much sustainability their current business/management students are exposed to in their introductory management course.  The committees can then decide if they want to adjust the amount and teaching methodology of sustainability in the curriculum. Increasingly, the term sustainability has been used to cover the commonly referred to “three pillars”: society, economy, and the environment.  This paper focuses on environmental sustainability for companies: protecting the environment while making a profit. There are several factors to consider.  One important variable is what employers expect.  Research shows that many employers expect business school graduates to have a foundation of knowledge about sustainability.  Students themselves have displayed a high level of interest in sustainability.  A recent survey showed that 75% of students expressed an interest in taking a sustainability course (Silverblatt, 2012). Another variable is the competitiveness of the college curriculum.  If other schools are integrating sustainability into their curriculums, they may be viewed as more cutting edge.  Cutting edge curriculum usually translates into a better reputation for the school and more job opportunities for students. Students have a general idea what green and sustainability mean in their everyday lives.  They lack, however, an understanding of what they mean for a manager.  Colleges of business have the opportunity to provide students with a foundation of understanding what sustainability means for business. 

 

Full text

 

  

Member Orientation of the U.S. Credit Union Industry: Post-2008 Evidence

Dr. Su-Jane Chen, Metropolitan State University of Denver, Denver, CO

 

ABSTRACT

This research aims to determine if the credit union industry has been able to deliver significant value to its members in the post-Great Recession era by comparing all credit unions and banks’ national average interest rates over the time period of 2009-2012.  Empirical results show that credit unions have been offering significantly higher savings rates and charging significantly lower loan rates than banks since 2008 despite several ensuing market and regulatory developments adversely affecting the credit union industry during the period.  The only exception resides in the mortgage lending area, where neither industry dominates in its rate offerings.  Thus, the general tax-exempt status and not-for-profit co-op philosophy of the credit union industry appear to continue to benefit its members.  Given previously documented spillover effects of credit union presence on local markets, retail banking customers most likely have also gained from the credit union industry’s member-oriented practice.  A closer look at test statistics further reveals that credit union members on average save the most money from car loans, credit card debt, and home equity loans.  However, according to the Credit Union National Association, an industry trade organization, membership penetration in the industry as of mid-year 2012 for these most-advantageous services varied from 4.4% for new automobile loans to no more than 15% for credit cards.  Thus, the credit union industry administrators and leagues should develop effective strategies to educate its members, promote its products, and raise membership penetration rates.  This proposition should resonate particularly well with smaller credit unions, which have in general experienced much lower membership penetration rates than their larger counterparts.  The observation also suggests that the credit-union-generated benefit is not equally distributed among its members. While credit unions and banks offer virtually the same products to retail customers, they represent two distinct types of financial institutions.  Banks are owned by stockholders and are driven by profit.  In contrast, credit unions are not-for-profit organizations owned by members who normally share a common bond, such as belonging to the same association, living in the same community, or working for the same company, government agency, or nonprofit institution (Kaushik and Lopez, 1993).  Credit unions in general enjoy low operating costs and tax-exempt status.  The unique features have led them to provide personalized quality services with no or low fees and offer favorable savings and loan rates to their members.  Thus, it should not come as a surprise that credit unions have become the choice for many consumers to fulfill their financial needs.  The movement has been further heightened by the negative publicity suffered by large, fee-heavy national banks since the 2007-2008 financial crisis and manifested in “Move Your Money” campaigns and “Bank Transfer Day” of late 2011.  According to the National Credit Union Administration (NCUA hereafter), the federal governing agency of the credit union industry, there were 6,753 federally insured credit unions, 94.6 million members, more than $1.05 trillion in total assets, $877.9 billion in total insured deposits, and $599.9 billion in total loans as of March 31, 2013.  In comparison, information reported by Federal Deposit Insurance Corporation shows that as of March 31, 2013 there were 6,048 federally insured banks with $13.36 trillion in total assets, $5.6 trillion in total insured deposits, and $6.9 in net loans and leases.  Despite gaining some members at the expense of banks due to public outrage and outcry over excessive fees levied by banks to their customers, credit unions, along with their financial services counterparts, have faced several obstacles in the post-2008 era. 

 

Full text

 

Labor Mobility of Scientists and Engineers and the Pace of Innovation

Dr. Simona Lup Tick, Graduate School of Business and Public Policy, Naval Postgraduate School, Monterey, CA

 

ABSTRACT

This paper presents a first empirical estimate of the relation between the labor mobility of research personnel, as a measure of knowledge spillovers, and the pace of innovation, measured by the mean backward lag in patent citations. Using an unbalanced panel of firms across eight U.S. industries with the highest rate of innovation as measured by patents granted from 1984 to 1999, the cross-sectional results show evidence of a positive relation between the rate at which scientists and engineers change jobs and the pace of innovation within each industry. When the relation is estimated with industry fixed effects, the estimate on the labor mobility is not longer significant. Therefore, this paper presents an initial cross-sectional result that establishes a stylized fact between labor mobility of research personnel and the pace of innovation that requires further investigation. Decision makers have always been concerned with issues related to innovation, potential spillovers and their impact on the incentives and capacity to innovate. At least since Scotchmer and Green (1990), economists have accepted the idea that current research can build on the pool of existing technological knowledge, and the pace of innovation depends critically on the amount of knowledge transferred among firms. There are many channels through which knowledge spreads. One channel is the labor movement of scientists and research personnel from one firm to another. This idea was articulated in Arrow's 1962 article on the public good aspect of information, writing that "no amount of labor protection can make a thoroughly appropriable commodity of something so intangible as information. The very use of information in any productive way is bound to reveal it, at least in part. Mobility of personnel among firms provides a way of spreading information" (p. 615). In her 1994 book, Saxenian argues that frequent social and professional meetings of Silicon Valley engineers and the ease with which workers can change jobs led to the rapid dissemination and cross fertilization of ideas which fueled innovation in Silicon Valley.  The theoretical literature on labor mobility and knowledge diffusion is growing. Some studies focus on labor mobility and patenting, (Kim and Marschke, 2005), endogenous R&D and employment decisions (Gersbach and Schmutzler, 2003), labor mobility and spinouts (Franco and Filson, 2006). However, empirical research in this area is just beginning to take off. The main difficulty faced by the empirical literature is the lack of appropriate data. This paper contributes to the empirical literature on knowledge spillovers and innovation by presenting the first empirical test of the relation between labor mobility of research personnel and the pace of innovation. The pace of innovation is defined as the time lag between two consecutive generations of technology and it is measured by the mean backward lag in patent citations.  The empirical test uses patent citation data from the NBER/ Western Reserve University data on all utility patents granted by the U.S. Patent Office between 1963 and 1999, matched with Compustat firm data for an unbalanced panel of firms across eight U.S. highly innovative industries. The labor mobility is given by the rate of scientists and engineers that change jobs within a year, and it is constructed from the U.S. Bureau of Labor Statistics, the Current Population Survey March Supplements. The cross-sectional results show evidence that an increase in the annual measure of the labor mobility of scientists and engineers is significantly associated with an increase in the measure of the pace of innovation.  While this establishes a stylized fact of the relation between labor mobility and the pace of innovation, the fixed effects estimation make the relation disappear, requiring improved data  and further research into the relation between the labor mobility and innovation. The rest of the paper is organized as follows. The next section describes the data, section III presents the empirical strategy and discusses the empirical results, and section IV concludes.

 

Full text

 

Inward and Outward U.S. Foreign Direct Investment Performance During Recent Financial Crises

Dr. Lucyna Kornecki, Embry-Riddle Aeronautical University, Daytona Beach, FL

 

ABSTRACT

Foreign direct investment (FDI) plays an extraordinary and growing role in the global markets and represents an integral part of the U.S. economy. This research has descriptive character and focuses on the latest trends in inward and outward U.S. foreign direct investment illustrating the impact of the recent financial crises on FDI performance. The study analyzes the US FDI stock contribution to the global FDI and performance of the inward and outward US FDI flow and stock, during last decade. The essential part of this research relates to inward and outward US FDI employment and the structure of inward and outward US FDI financial performance, which includes: equity, reinvested earnings and intercompany debt. The International Monetary Fund defines foreign direct investment (FDI) as an investment that allows an investor to have a significant voice in the management of an enterprise operating outside the investor’s own country. The phrase “significant voice” usually means ownership of 10 per cent or more of the ordinary shares or voting power (for an incorporated enterprise) or the equivalent (for an unincorporated enterprise). This may involve either creating an entirely new enterprise—a so-called greenfield investment—or, more typically, changing the ownership of existing enterprises, via mergers and acquisitions. Other types of financial transactions between related enterprises, such as reinvesting the earnings of the FDI enterprise, are also defined as FDI (http://www.conferenceboard. ca/hcp/details/economy/outward-fdi-performance.aspx). The United States continues to be the leading destination for foreign direct investment (FDI) and the leading investor in other economies.  A.T. Kearney’s FDI Confidence Index measures investor sentiment on the basis of a survey of senior executives in the world’s largest enterprises, and ranks present and future prospects for FDI flows to different economies with respect to the factors that drive corporate decisions to invest abroad. The FDI Confidence Index Report of 2010 ranked China and the United States as the most attractive FDI locations in the world, recording unprecedented levels of investor confidence. According to the ranking for 2011, however, although the United States remained a strong magnet for FDI in the world economy, China, India and Brazil occupied the top spots in terms of the Confidence Index (http://www.atkearney.com/gbpc/foreign-direct-investment-confidence-index). The financial crisis, which began in summer 2007, has led to a progressive deterioration of the investment situation in the world economies. Various indicators during the first half of 2008 already suggested a decline in world growth prospects as well as in investors’ confidence. This deteriorating climate began to leave its first negative marks in investment programs, including FDI, in early 2008. According to UNCTAD’s 2008-2010 World Investment Prospects Survey, conducted April–June 2008, 40% of the respondent companies already mentioned at that time that the financial instability had a “negative” or “very negative” impact on their investment (unctad.org/en/docs/ wips2008_en.pdf.). This study constitutes a base for the further exploration of the importance of inward and outward US FDI in the global markets and in the U.S. economy. The goal of this research is to illustrate the impact of current financial crises on US FDI performance. The basic statistics related to US FDI flow and stock come from the UNCTAD’s FDI/TNC and from the Bureau of Economic Analysis (BEA), a section of the U.S. Department of Commerce. BEA is responsible for collecting economic data related to FDI flows in the United States. Monitoring this data is very helpful in determining the impact of FDI on the economy’s output and employment, but it is especially helpful in evaluating performance of the particular states and industry segments.  

 

Full text

 

Stock Price Volatility and Firm Capital Structure Decisions during the Financial Crisis

Dr. Deniz Ozenbas, Montclair State University, Montclair, NJ

Dr. Luis San Vicente Portes, Montclair State University, Montclair, NJ

 

ABSTRACT

Financial economics research establishes that there is a link between the stock price volatility of a firm and its capital structure decisions. We hypothesize that this relationship would become especially critical during periods of stress such as periods with heightened stock price volatility and diminished opportunities of debt financing (i.e. during a credit crunch). Towards that end, in this study we build on our previous theoretical and empirical work about the relationship between stock price volatility and capital structure at the firm level by specifically investigating the capital structure decisions and borrowing costs of publicly traded firms during the most recent financial crisis, i.e. 2007-2009. To account for possible systematic differences between smaller and larger firms (such as credit constraints, or credit market frictions) we analyze different size firm-groups based on their market capitalization. Through quartile regressions, we analyze the relation between firm risk and the debt ratios and the cost of external financing across the distribution of firms. We frame our analysis based on the Financial Accelerator Model of Bernanke et. al (1999). Since the effect of heightened risk on leverage is offset during investment booms, we propose that in a crisis period that directly follows a boom firms will be even more adversely affected due to their heightened levels of leverage, and the above described relationship will be more pronounced. Finally, we distinguish between financial and non-financial firms in order to identify the strength of such propagation mechanisms and hence would be able to provide policy recommendations for financial services regulation. This distinction proves crucial since we find fundamental differences between financial and non-financial firms in terms of their capital structure, and ability to borrow, where the former are more leveraged and exhibit lower cost of capital. Central to the analysis is the financial crisis and its disruptive effects. In the midst of the crisis, financial firms’ lower cost of funding advantage is reversed for middle-sized firms. In other words, during that time non-financial mid-size firms had lower cost of external capital than financial mid-size firms. The recent financial crisis was characterized by both extreme stock price volatility and a credit crunch as the debt markets dried in response to the uncertainty in the market, especially in the aftermath of the Lehman Brothers bankruptcy. It is established in the financial economics research that there is a link between the stock price volatility of a firm and its capital structure decisions as the firms try to steer away from debt during such periods (e.g.San Vicente Portes and Ozenbas, 2009). In this study, we investigate this relationship and hypothesize that it becomes especially critical during periods of stress with both heightened stock price volatility and diminished opportunities of debt financing (i.e. during a financial crisis).  Towards that end, we specifically investigate the capital structure decisions and borrowing costs of publicly traded firms during the 1985 to 2009 period, and we specifically isolate the recent financial crisis period, i.e. 2007-2009, to analyze the patterns of this period. We frame our analysis on the Financial Accelerator Model of Bernanke et. al (1999). Since the effect of heightened risk on leverage is offset during investment booms, we propose that in a crisis period that directly follows a boom firms will be even more adversely affected due to their heightened levels of leverage, and the above described relationship will be more pronounced. Moreover, this effect is expected to be larger in small and medium sized firms due to their lesser access to the credit markets, revealing financial accelerator like effects. One contribution of this study is to account for possible systematic differences between smaller and larger firms (such as credit constraints, or credit market frictions) in their financing choices during a crisis as we analyze different size firm-groups separately based on their market capitalizations.

 

Full text

 

Predicting Firm Performance As A Function of CEO and Economic Factors

Dr. Gordon Arbogast, Jacksonville University, FL

Dr. Jim Mirabella, Jacksonville University, FL

 

ABSTRACT

This paper analyzes the relationship between Chief Executive Officers’ (CEO) age, graduate education, and tenure to the performance of a company in relation to its percentage change in revenue per year.  Information was gathered from the CEO's representing companies from the 2011 Fortune 500 list.  The time span of data gathered was from 1995 to 2010, a fifteen-year period.  Data was then eliminated on CEOs and companies that did not have complete information for the fifteen year period, or were outliers from the group. The final data collected includes information covering fifty-six CEOs from twenty-four different companies. The results indicated a strong relationship between a company’s change in revenue and CEO age.  Tenure and graduate education were eliminated.  As a result, the null hypothesis (there is no relationship between CEO age and a company’s percent change in revenue) was rejected in favor of accepting the alternative hypothesis i.e. there may well be a relationship between CEO age and a company’s percent change in revenue. Scholars in strategic management have increasingly studied the role of top management teams in strategy formation and organizational performance (Hambrick & Mason, 1984).  Often the emphasis has been on demographic characteristics such as the ages, organizational tenures, functional backgrounds, and education of top managers.  Empirical work on the link between the demographics of the leadership team and firm performance is not readily abundant, even though there is evidence that they are related (Norburn & Birley, 1988).  For example, Hambrick and D'Aveni (1992) found that the average top management team  tenure and functional experience in marketing, opera-tions, and R&D were less likely to file for bankruptcy.  Halleblian & Finkelstein (1993), in their study of the computer industry, found that team size was positively related to performance, and that CEO dominance was negatively related to performance, with performance being measured as return on assets, return on sales, and return on equity.  While the top management team has been shown to be important, the CEO specifically has been singled out in many studies, with extensive evidence that there is an inverse relationship between the likelihood of CEO turnover and firm performance (Murphy and Zimmerman 1993; Weisbach 1988).  This research was predicted on a firm’s performance revealing insights about how a CEO creates value for the company’s shareholders.  Logically, when firm performance was poor, a CEO was typically replaced and deemed to be ineffective at creating value. Also demonstrated was that perceptions about the CEO can change periodically based on firm performance.  In a sample of public U.S. firms from 1996-2005 Dikolli et.al. (2011) showed that the likelihood of CEO turnover increased amidst negative financial performance.  They also computed the probability of CEO turnover to be between 18 and 36 percent after a negative quarter, and a CEO with four consecutive negative quarters was two to three times more likely to be replaced.  Additionally, negative quarterly reports were about five times more disastrous for new CEOs than for experienced ones.  CEO pay has also been a hotly contested subject, especially given the extremely high salaries some receive but don’t seem to truly merit. Complicating matters further, a large portion of their pay is often tied into incentives such as stock options.  Additionally the measures of performance are not always observable to outsiders.  According to Hayes & Schaefer (2000), there is a positive relationship between CEO pay and the future returns for the firm, while Kadiyala & Rau (2004) found a positive relationship between CEO incentives and future stock price performance.  While pay cannot cause performance, what has been shown is that firms that pay their CEOs the highest tend to be firms that have recently experienced high operating performance relative to their competitors (Core et.al, 1999).  As a result of the implosion of several large corporations in the last decade, there has been much scrutiny on the factors that impact the performance of a company.  A logical assumption is that some of these factors lead to effective performance of the company.  For instance, it is often assumed that good CEO performance can have a positive effect on company performance.  There is also much to be said about the role of the Board of Directors.  One of the responsibilities of the Board is to review the performance of the CEO.  Naturally, one can conclude that good company performance equals good CEO performance so the question becomes what leads to good CEO performance.  There are several factors that can be examined to determine if they have influence on the CEO’s ability to deliver great performance for his organization.  The intent of this study is to examine the impact of CEO tenure on the company’s performance. The effectiveness of a CEO has previously been studied with respect to several factors.  Starting with Barnard in 1938 there has been a number of articles written to determine the role of executive leadership in corporate effectiveness. 

 

Full text

 

Employee Engagement: Lessons learned from the U.S. 2013 Glassdoor Best Places to Work Employee Choice Award Leaders

Dr. Arthur H. Johnson, Palm Beach Atlantic University, FL

 

ABSTRACT

While leaders and managers wish to attain the best performance from their employees, maintaining and sustaining high levels of employee performance has proven elusive in spite of implementing intentional motivational practices such as rewards, incentives, consequences, performance management systems, and various drivers of performance. Because of the lack of effectiveness of traditional motivational strategies, or a lack of understanding by leaders and managers of how to apply this knowledge of motivation theory, a shift away from traditional motivational strategies has occurred (Herzberg, 2003) and moved toward employee engagement strategies (Marciano, 2010). Clearly there is a disconnect between research-based knowledge of best practices in employee engagement and what is actually practiced at most business organizations in the United States. The purpose of this study was to perform a content analysis of the Glassdoor Top 20 Best Places to Work in 2013 Employee Choice Award Leaders based on the employee engagement RESPECT model (Marciano, 2010) to determine the practices, policies, and actions those organizations have implemented to engage employees successfully, and determine how the RESPECT model of employee engagement fits employee perceptions of what makes an engaging organizational environment. A content analysis using the RESPECT model (Marciano, 2010) components (recognition, empowerment, supportive feedback, partnering, expectations, consideration, and trust) was conducted by examining all employee review statements of from Glassdoor’s Top 20 Best Places to Work in 2013 (N = 956). This qualitative review of extant data was conducted to determine the relevant issues, variables, and perceptions of employees regarding important factors in choosing to work for an organization, choosing to stay with the organization, and being engaged in the work of the organization through their performance. Also captured were issues and variables that emerged from the data that did not fit the RESPECT model (Marciano, 2010), but that employees found important in engagement with their respective organization. The findings suggested support for the RESPECT model (Marciano, 2010) of employee engagement, however, employees also found other issues and variables important in their perceptions of an engaging environment. Researchers have explored employee motivation for many years. Historically, this research has produced many theories to help practitioners understand drivers of behavior and performance (Latham, 2007). These theories include motivation theory, need hierarchy theory, theory X and theory Y, equity theory, expectancy theory, behavior modification theory, goal setting theory, and two factor theory (motivation-hygiene theory and dual-factor theory). Unfortunately, even with a multitude of research on employee motivation and subsequent theories produced and tested, putting effective motivational strategies and practices into place in organizational settings has proven challenging at best and too often elusive in its effectiveness. Further compounding this problem is seen in Dowden’s (2011) research that showed over 50% of employees are not engaged and 20% are actively disengaged in the United States workforce, with an estimated cost of $300 billion annually in lost productivity. Research by Rice (2008, November) indicated that fewer than one in three workers are engaged at work.

 

Full text

 

The Three Types of Workers: A Comparison Study Among United States, Chilean, and Japanese Employees

Dr. Leopoldo Arias-Bolzmann, Professor of Marketing,

CENTRUM, Graduate Business School, Pontifícia Universidad Catolica del Peru

Dr. Emiko Magoshi, J. F. Oberlin University, Tokyo

 

ABSTRACT

As noted in previous work (Kim & Sikula, 2005; Kim & Sikula, 2006; Kim, Sikula & Smith, 2006; Kim, Cho & Sikula, 2007; Kim, Arias-Bolzmann, 2008), there are three types of people in the workplace: “Necessities,” “Commoners,” and “Parasites.”  A person is a Necessity if they are irreplaceable and crucial to the functioning of an organization.  A Commoner is a person of normal ability and talent who has no significant impact on organizational success.  Parasites are detrimental freeloaders who damage the functioning of an organization. Unlike previous studies which compared data sets from two countries, there were three data sets from three different countries compared for this study:  32 students in an MBA Organizational Behavior class in the U.S.; 47 students in an MBA Marketing class in Chile; and 46 undergraduate Management students in Japan.  These students were asked for their views on the leading traits and behaviors of Necessities, Commoners, and Parasites.  The method of collecting the three sets of data was identical from previous studies, but the process of analyzing the data was different.  Contrary to the previous studies, the characteristics of all three categories are dissimilar, and the characteristics of Commoner from the Japanese data set were very positive. Potential explanations for these findings may be due to the low inter-rater reliability and the differences in the respondents’ cultural backgrounds. Human beings, by nature, are relational creatures.  At any given time all people, regardless of their individual differences (e.g., age, gender, religion, ethnic background), assume multiple roles in society, such as that of spouse, parent, employee, friend, club member, and citizen of a city, town, or country. Within each of these roles, there is always more than one person involved, from a very small number of members in an institution like a nuclear family, to a very large number of members comprising the citizenship of a nation.  No matter what type of role a person plays in a group at any given time however, that person falls into one of three categories:  Necessity, Commoner, or Parasite. The most desirable type of person is that of a Necessity.  Without colleagues (or partners) who are Necessities, the group as a whole cannot conduct successful activities.  The person of Necessity focuses his/her efforts on achieving the group’s goals, and thus consistently makes valuable contributions to ensure collective success.  From the group’s perspective, such a person is an invaluable asset.  Conversely, the loss felt within the group by the departure of such an individual is very impactful.  The characteristics that comprise a Necessity in group relations are, to some extent, role-specific.  In other words, the traits and behaviors that characterize a person of Necessity in one particular role may be different from the traits and behaviors that characterize a person of Necessity in a different role.  For example, to be a Necessity as a spouse one must display patience, a loving and caring attitude, and the ability to compromise.  To be a Necessity as an academic administrator, however, one should demonstrate self-confidence, intelligence, responsibility, dedication to work, and an ability to supervise. Comments made in the workplace about a person of Necessity include, “It would be hard to fill his shoes” or “She is an excellent person, it’s a shame to lose her.”  Also a person of Necessity may also be someone who works diligently without receiving much visibility or recognition within an organization (e.g., the faithful janitor who immaculately cleans the offices; the sports team member who sacrifices his/her individual statistics to do what is needed to help the team win).  Either way, a person of Necessity occupies an important position. 

 

Full text

 

Productivity. The Engine of Progress in Business Organizations

Prof. Piero Mella, Department of Economics and Business, University of Pavia, Italy

 

ABSTRACT

This study aims to show that in a capitalistic economic world the trends in productivity and quality represent the fundamental economic variable. The search for ever greater levels of productivity is due in general to man’s natural tendency to maximize labor efficiency, which by definition represents a necessary though “unpleasant” and strenuous activity to be minimized.  This phenomenon is general in nature, as observation reveals, and can be translated in two general observational postulates: (1) Postulate of industriousness: man develops economic behavior aimed at the production, exchange and final consumption of wealth; in particular, he is willing to supply his own labor to produce and consume those goods necessary to satisfy his economic needs, which is equivalent to saying that man is industrious.  (2) Postulate of efficiency: industrious man maximizes the efficiency of his labor, thereby maximizing the ratio between the benefits of «working» and the sacrifice involved, searching for the maximum quality given the sacrifice needed to produce; that is, he maximizes the value of the obtained production. These postulates lie behind the hypothesis that productivity and quality are destined to continually increase.  I propose the following “Hypothesis of increasing productivity”: the search for the highest levels of Return On Equity necessary to produce value for the shareholders and meet the expectations of the firms’ stakeholders gives rise to a improvement process whose macro effect is increasing levels of productivity and quality.  This paper will try demonstrate that productivity is the basis of all productive systems, which are viewed as transformers of utility and value, since the search for maximum productive efficiency is necessary to reduce production costs and thus to produce value. After presenting a coherent frame of reference we shall examine the drivers of productivity and then move on to discuss the consequences of the continual growth in productivity. The paper concludes with a simple but significant model that seeks to illustrate the relationship between productivity and employment. All goods – individual or collective, material or services – that man uses to satisfy his needs and aspiration must be viewed as products obtained by some productive process carried out by a productive system activated by business organizations which bear the risk of production and marketing. In fact, every productive process carries out a productive transformation through which inputs of given quantities of productive factors (cement and steel reinforcing rods, wheat and milling machines, corn flour with water and salt, aluminum plates and press brakes, etc.) are transformed into outputs of volumes of production at the end of the process (columns of reinforced cement, wheat and bran, cornmeal, computer chassis, etc.). The transformation follows a production function, which specifies the parameters, the duration and the time sequences of the operations that allow the outputs to be obtained from the inputs at the end of the transformation cycle. In particular, the production function indicates the unit requirements [q], that is, the units of each factor – labor (L), materials (M) and plants&machinery (P&M) – needed for one unit of a specific product [P]. The productive process that allows us to obtain a production [P] by means of specific productive transformations can be represented by the model in figure 1. The inputs are the total volumes [Q] of the four factor categories [QL, QM, QP&M].The outputs are the volumes of products [QP] for the period in question.

 

Full text

 

Lifelong Professional Education for Lawyers: A Collaborative Model

Dr. Barbara J. Durkin, SUNY Oneonta, Oneonta, NY

Dr. Deborah Schwartz, Iona College, New Rochelle, NY

Dr. Theodore M. Schwartz, Iona College, New Rochelle, NY

 

ABSTRACT

In response to client requirements and market conditions, law firms are abandoning their traditional apprenticeship practice of developing new lawyers, which resulted in a pyramid-shaped organizational structure. Fewer new law school graduates are hired and trained by law firms; instead, law firms are using experienced, lateral hires or subcontracted legal expertise resulting in a diamond-shaped organizational structure. In the long term, this jeopardizes the pipeline for legal talent because fewer new law school graduates are being hired and trained by individual law firms. This paper suggests a new collaborative model among law schools, law firms, private interest groups, Continuing Legal Education (CLE) providers, and regulatory agencies. Its function would be to provide for long-term, sustainable development of legal talent through standardized training of lawyers and by a system of tracking legal expertise. The legal services industry, of which law firms are a part, generates billions of dollars in revenue and accounts for 1.12 million jobs (Bureau of Labor Statistics, 2013). Like their corporate counterparts, large law firms have multiple offices and clients domestically and internationally. Many law firms have evolved, merged, and grown into mega-firms (often called “BigLaw”) employing thousands of lawyers and non-lawyers. In contrast, more than three-fourths of all lawyers employed in private practice work in law firms with less than 20 partners; almost one-half are in solo practice (American Bar Association [ABA] in 2009 Trotter, 2009). In a survey of law firms’ managing partners, one of the major issues identified was the challenge of recruiting and retaining qualified lawyers (Clay & Seeger, 2012). The changing competitive environment and its impact on the recruitment and professional development of lawyers have been discussed in many recent venues,  including the ALI-ABA Critical Issues Summit (Bingaman, 2009) and the New York State Bar Association Task Force on the Future of the Legal Profession (Addison, 2011). Their recommendations called for proposals to aid in the assessment of learning of those who have worked in the legal profession and the development of training strategies for lawyers. Much of the focus was on the knowledge and skills of new lawyers (i.e., core competencies) and how the lifelong process of learning must be addressed by both law firms and individual lawyers. The concerns of managing partners of law firms mirror those of corporate chief executive officers: slowed market growth, increased competition from global forces, retention and training of qualified personnel, and maintenance of profitability (Clay & Seeger, 2012). Law firms rely on human capital for their competitive advantage. As such, they, too, have begun to look at core competencies, knowledge management, and identifying specific skills necessary for long- term success. Although 45,000 new lawyers are entering the labor market each year, many remain unemployed or underemployed for extended lengths of time. Law firms are facing the same dilemma experienced by other organizations. With so many new candidates available in the work force, how can law firms identify and select the best people with the correct knowledge and skills for their firm? It is projected that the market for legal services will have slow growth, competitive pressures will intensify and there will be slimmer profit margins industry-wide (Henderson & Zahorsky, 2011). These trends are independent of the size of the firm, affecting everyone from BigLaw to boutique specialty firms to solo practices. For some time, law firms have been addressing such complex and challenging factors as globalization, technological development, and increasingly rapid infusion of technology, as well as the development and use of knowledge (Hitt, Keats & DeMarie, 1998).

 

Full text

 

Successors and the Family Business: Novel Propositions and a New Guiding Model for Effective Succession

Markus Baur, University of Latvia, Riga

 

ABSTRACT

This paper summarizes the results of a doctoral study which aimed to identify success factors for succession in the family business by exploring the perspective of outperforming successors. Based on the framework of systems theory and a qualitative research approach, 13 successful cases of medium-sized family firms in the close-to-boarder-area of Austria, Germany, and Switzerland have been studied. For this purpose, problem-centered interviews with the successors have been conducted. The results of the research are relevant to both scientific and business practice inasmuch as diverse propositions emerged or confirm existing theories. On the basis of 17 propositions, the paper offers a new guiding model for effective succession and outlines the resulting novel notions to successful succession.  Research concerning succession in family-held businesses is not new. Many attempts have been made to further advance the understanding of this very important phase for family businesses. However, only few authors have let the successor to be in the spotlight. Research that focuses particularly on successors has been concerned primarily with the development of successors (Sardeshmukh, 2008), conflict reasons within after-succession environment (Harvey & Evans, 1995), motives and traits of successors (Halter et al., 2007), attributes of successors (Chrisman, Chua, & Sharma, 1998; Sharma & Rao, 2000), career orientation (Zellweger et. al., 2010), and leadership qualities of successors (Cater, 2006). Latest publications have further explored the development of successors with intent to rethink education and empowerment concepts. Such investigations provided propositions for further research concerning parent-child relationships, knowledge acquisition, long-term orientation, cooperation, successor roles, and risk orientation (Cater & Justis, 2009). Halter et al. (2007) investigated whether the challenges linked with founding a firm attract the same type of person as does the succession in an existing business in order to identify traits and motives of next generation managers. When it comes to career choice of students with family business background, Zellweger et al. (2010) found that students with family business background are pessimistic about being in control but optimistic about their efficacy to pursue an entrepreneurial career. Particularly, studies concerned with succession tend to analyze reasons for failure (e.g., Applegate, 1994; Beckhard & Dyer, 1983; File & Prince, 1996). Even family business studies devoted to success stories are limited, as they typically cover big, famous, and professionally managed companies that are admittedly well-known but do not constitute the majority of family business population (e.g. Braun, 2009, exploring on BOSCH, LIEBHERR, HILTI, etc.). They are only the tip of the iceberg. The overwhelming majority of family firms, however, are small to medium sized firms (i.a. Bjuggren & Sund, 2001; Goldberg, 1996; Wallau, 2008). This study builds on the previous work done and tries to find out indicators that might be responsible for effective succession of the successor. The purpose of this study was to contribute to the deeper understanding of the family business with special regard to identifying potential factors that might support effective succession from the perspective of the successor.

 

Full text

 

On the Housing Market and U.S. Economic Recovery

Dr. Sahar Bahmani, The University of Wisconsin at Parkside, Kenosha, WI

 

ABSTRACT

The head of the Federal Reserve, Chairman Ben Bernanke, in March 2012, gave a lecture series about the financial crisis of 2007, where he discussed the root causes of the most recent financial crisis as well as the policy responses to these significant issues.  With his area of expertise being the Great Depression, it is important to thoroughly analyze what causes financial crisis and how to better prevent them.  In this paper, we look at the specific policy responses to these root causes of the financial crisis of 2007 in order to evaluate how the current actions of the Federal Reserve are in fact helping the U.S. in its recovery process.  This recovery process is directly linked to the conditions and outlook of the housing market, therefore we discuss the state of the sluggish housing market in the U.S. as well as how and why it is slowing down the recovery process in the U.S.  Currently, many are optimistic because the housing market has begun to see positive signs, which will have a positive impact on the economy.  By looking at the current data on the housing market, through prices, sales, the difficulty of obtaining a loan through competitive requirements as a result of the banking crisis, and the average credit scores needed, we will be able to compare and contrast the requirements to obtain a home mortgage loan after the financial crisis of 2007 compared to the requirements before the collapsing of the housing market and its impact on recovery in the U.S.  A major issue that will be focused upon is how financial crisis occur the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2009 promoting financial stability in the U.S. and protected consumers, yet there is still more that needs to be done for economic stability in the U.S.  With each financial crisis, since the economic conditions are different during each one and its originations are different, it is important to recognize that there are major lessons to be learned from each unique experience.  The head of the Federal Reserve, Chairman Ben Bernanke, in March 2012, gave a lecture series about the financial crisis of 2007, where he discussed the root causes of the recent financial crisis.  Bernanke, who joined the Federal Reserve in 2002, has a very cautious view on the U.S. economy at this time.  Every report made by the head of the Federal Reserve impacts the public, consumers, investment and consumer confidence on the outlook of the economy.  Therefore, creating optimism rather than pessimism is ideal in order to increase consumer confidence and investment.  It makes a lot of sense to delve deep into these root causes in order to really learn about what went wrong so that we can avoid making those same mistakes yet again.  Clearly, one of the biggest mistakes made was relaxing the requirement to obtain a home mortgage loan.  As a result of making it easier for consumers to obtain a home mortgage loan, many of those consumers were not necessarily credit worthy and many of them spread themselves too thin.  The loans put buyers in homes that they could not otherwise afford, which is a bad combination.  When consumers see the ease at which they are able to obtain a loan, they also tend to take out a larger loan for a better home without thinking about what if they lose their job during this 15 or 30 year mortgage, many forgot to ask themselves how they will keep up with these mortgage payments.  This is exactly what happened, when the unemployment rate started to sky rocket, many people were not able to keep up with their mortgage payments which lead to a record amout of foreclosures and short sales on homes. 

 

Full text

 

21st Century Brazil

Dr. Kip Pirkle, University of Georgia, Athens, GA

 

ABSTRACT

Brazil in 2013 is the world's seventh largest economy and it is estimated that by 2017 it will be the fourth largest. Brazil is rising as a global player with its new-found political and economic stability.  Brazil’s government policies have played a significant role in its growth. Government is taking considerable growth-oriented measures such as infrastructure projects to include hydro-electric plants and stadiums for the 2014 World Cup soccer and the 2016 Olympics.  With its economic growth, regional power, and increasing influence, Brazil has the potential to become a base of power for the developing world in the coming decades. Much of that story will unfold in the next few years, and Brazil will have the opportunity to take a prominent seat at the global table. In 1500, the Portuguese were the first European settlers to arrive in Brazil led by Pedro Cabral claiming Brazil for Portugal. (1) Other Portuguese pioneers followed seeking valuable goods for trade and unclaimed land in order to flee their lives of poverty. (2) At this time, the only item of value the explorers discovered was the pau do Brazil (Brazil wood tree) from which they made red dye. The Portuguese in Brazil were much less focused at first on conquering, controlling, and developing the country. Most were penniless sailors drawn to a world of profitable trade and abundant agriculture rather than territorial expansion. Their new discovery was concentrated on the exterior of Brazil as the country's interior remained unexplored. Eventually sugar was brought to Brazil by the Portuguese. (3) Harvesting sugar was very labor intensive and slaves were imported from Africa to harvest the crops. One third of all slaves transported to the Americas were brought to Brazil to work in the sugar fields in the 17th century. The first coffee bush was planted in Brazil in 1727. (4) The planting of this coffee bush, which produced coffee seeds, changed the historical path of the country. Originally the Brazilian economy was largely based on the production of sugar in the States of the Northeast, using slave labor. Slavery continued, but the production shifted to coffee in the States of the South, where the seeds would adapt better. Advantageous natural conditions and an inexpensive labor force helped Brazil become the largest exporter of coffee in the world throughout the 19th and 20th centuries.  Brazil was a nearly monopolist of the international coffee market. Thus Brazil’s economy and coffee farmers became almost entirely dependent upon coffee. The result of harvesting sugar fields and coffee plantations, slavery in Brazil, to a degree, unequaled that in most of the American colonies. (5) The Portuguese settlers frequently intermarried with both the Indians and the African slaves, and there were also mixed marriages between the Africans and Indians. As a result, Brazil's population is intermingled to a degree that is unseen elsewhere. Most Brazilians possess some combination of European, African, Amerindian, Asian, and Middle Eastern lineage. 

 

Full text

 

Comparative Business, Economic and Cultural Analysis of the Impact of Olympics on Host Nations

Dr. Michael Ba Banutu-Gomez, Professor, Management and Entrepreneurship,

William G. Rohrer College of Business, Rowan University, NJ

 

ABSTRACT

Hosting an Olympic event presents many opportunities and daunting challenges for host cities. It is also a very costly undertaking that carries a high degree of financial risk. This paper analyzes the Olympic legacy of five host cities from both a business, economic and cultural perspective. In today’s world of fleeting attention spans, very rarely does a situation arise in which much of the world’s focus is directed on one place. The Olympics are one of those events that captivate the world and, as a result, provide a virtually unparalleled moment of possibility for the host city to present themselves to the global community. The business of the Olympics has a far greater impact on the world than the athletic events ever will. Lobbyists from dozens of cities formulate complex, detailed plans in an effort to have the International Olympic Committee (I.O.C.) select their city to host the Games. These plans are put into motion as long as a decade before the I.O.C. makes their choice. Masses of people typically flood the selected cities’ streets in celebration when the announcement is made. Since it can be reasonably deduced that no country is full of riotous sports fans, it is only logical to question what it is about hosting the Olympics that sends people into such pandemonium. The answer is the hope of a better future for which playing Olympic host can serve as a springboard. Olympic cities can benefit in a vast array of areas, from the economy to urban redevelopment. Hosting the Olympics automatically creates thousands of jobs and revenues from the Games themselves. Furthermore, they also provide cities with an opportunity to showcase them to the business world as a viable location to both work and live. A city’s Olympic legacy can be seen decades after the Games have ended.  Unfortunately, that legacy is not always positive. As with any massive financial undertaking, there is a high degree of risk involved in committing so much of a city’s resources to any one enterprise. There are cities who have hosted the Olympics as far back as 40 years ago who still have not recovered from the economic damage they suffered.  In this paper, we will examine the Olympic legacy of five cities from a business perspective. In order to present a fair picture, the cities to be scrutinized are located in countries from all over the world, have entirely different cultures and have hosted the Olympics in varying global economic periods.  The first city to be analyzed is Montreal, which hosted in the summer of 1976. Perhaps more than any other host, Montreal serves a warning to the types of damage that can be done if sound fiscal planning and sustainable strategic action is not a fundamental aspect of a city’s presentation to the I.O.C.  Next, we will look at the 1988 Summer Olympics held in Seoul, South Korea. These Games were tremendously successful for Seoul from both an economic and geo-political perspective. The city was also able to use the event to portray itself to the world as being ready to join other industrialized nations on the global economic playing field.  

 

Full text

 

CSR, Quality of Work Life, and Employee Job-related Outcomes: A survey of Employees in Thai workplaces

Dr. Kalayanee Senasu, National Institute of Development Administration, Bangkok, Thailand

Dr. Anusorn Singhapakdi, Old Dominion University, Norfolk, VA

 

ABSTRACT

This research investigates the relationships between corporate social responsibility (CSR), quality of work life (QWL), and employee job-related outcomes (i.e. job satisfaction and organizational commitment).  The data were collected via self-administered questionnaires completed by employees of six companies selected from different sectors in Thai workplaces, with a 73% response rate. The main research findings include: (a) the positive relationships between CSR, QWL, and job-related outcomes; (b) CSR has a significant impact on organizational commitment but not on job satisfaction; and (c) the lower-order QWL appears to play the most important role in both job satisfaction and organizational commitment. Some managerial implications and recommendations are also included based on our research findings. Corporate social responsibility (CSR) has become vital for competitive advantage in today's business world. CSR is not only good for society but can also be good for business. For example, CSR is positively associated with firm reputation and financial performance (Lantos, 2001; Peloza, 2009). Socially responsible companies attract more investment capital and tend to build greater customer loyalty than less responsible firms (Stengel, 2009). According to Stengel, the most progressive companies realize that CSR is essentially about "triple bottom line — profit, planet and people". Socially responsible organizations are not only paying attention to the well-being of society, but also to the well-being of their employees. Singhapakdi, Sirgy, Lee, & Vitell (2010) suggest that companies are paying more attention to the well-being of their employees. It is likely that socially responsible organizations treat their employees better than their counterparts. In other words, people who work in a socially responsible organization are more likely to experience a higher level of job-related psycho-social wellness than people who work in less socially responsible organizations.  In parallel to the importance of CSR, quality of work life (QWL) and job-related outcomes including job satisfaction and organizational commitment have been important topics since the beginning of 1960s (Cummings & Worley, 2005; Leopold, 2005). Academic writings and research in management and human resources often link QWL and job-related outcomes to corporate social responsibility, ethics, productivity, and organizational performance (Lau & May, 1998; May & Lau, 1999; Cummings & Worley, 2005; Dess, Lumpkin, & Eisner, 2007).  Although there are a number of studies on CSR, QWL, and job-related outcomes, research on these topics in Thai business organizations are limited.  This research, therefore, is intended to further our knowledge about such issues by examining the relationships between CSR, QWL, job satisfaction, and organizational commitment in the Thai workplaces. Specifically, the objective of this research is to investigate the effects of CSR and two QWL dimensions (lower- and higher-order QWL) on job satisfaction and organizational commitment of employees in Thailand.  

 

Full text

 

A Workflow Performer-Activity Affiliation Networking Knowledge Discovery System

Dr. Kwanghoon Pio Kim (1), Kyonggi University, South Korea

 

ABSTRACT

In this paper (2), we implement an organizational knowledge discovery system, which is able to explore “workflow performer-activity affiliation networking knowledge,” in particular, from a workflow-supported organization. That is, we try to theoretically define a knowledge exploration framework for amalgamating workflow affiliating knowledge with social networking knowledge, and practically implement a knowledge discovery system based upon the framework. The implemented system not only copes with the algorithms discovering workflow performer-activity affiliation networking knowledge from an XPDL-based workflow package\footnote (3), which represents involvement and participation relationships, after all, between a group of performers and a group of activities, but also deals with visualizing the discovered knowledge. Conclusively, we describe the implications of workflow performer-activity affiliation networking knowledge in workflow-supported organizations. In general, a workflow management system consists of two components¾modeling component and enacting component. The modeling component allows a modeler to define, analyze and maintain workflow models by using all of the workflow entities that are necessary to describe work procedures, and the enacting component supports users to play essential roles of invoking, executing and monitoring instances of the workflow model defined by the modeling component. Especially, from the organizational intelligence point of view, the modeling component deals with the planned (or workflow build-time aspect) knowledge of organizational resources allocations for workflow-supported operations, while on the other the enacting component concerns about the executed (or workflow run-time aspect) knowledge of organizational resources allotments for the workflow-supported operations. With being connected to these view-points, there might be two issues, such as discovery issue (Song, J., et al. 2010) and rediscovery issues\cite{wil}, in terms of the organizational knowledge discovery activities. In other words, the workflow knowledge discovery issue has something to do with exploring the planned knowledge from workflow models defined by the modeling component, and the workflow knowledge rediscovery issue is to explore the executed knowledge from the execution logs (Park, M. and Kim, K. 2008, and Park, M. and Kim, K. 2010) of the workflow models. Naturally, this workflow performer-activity affiliation networking knowledge can be not only discovered from a workflow model defined by the modeling component, but also rediscovered from its execution event logs stored by the enacting component. In this paper, we focus on the discovering issue of the workflow performer-activity affiliation networking knowledge from a workflow model, which implies to discover the planned knowledge of performer-activity affiliations.

 

Full text

 

 

The Dawn of Radical Change: A Case for Leadership

Dr. Janice M. Spangenburg, Capella University

 

ABSTRACT

With the changes and the forces that drive change and challenges for everyone and every organization---The time for leadership is now. The changing dynamics of organizations requires leaders that are trained, ready and up for the challenge and committed to starting and finishing a project or endeavor. A case for leadership crystallizes and indemnifies the need and also the gaps that exist in every industry in the world. We need to be serious now because the future will not wait for us to think about it anymore. We need action and perseverance.  There is no end to the studies of leadership and while we discover new theories and new ways of leading we are still ever interested in this topic and want to learn more about it in every way possible. For eons we have studied leadership and strive to be able to bring it to a place where it can be effective and efficient. Leadership is tested every day in some manner and on various levels. In these tests, we find the fit of the fittest and the strongest of the pack. This individual seems to have the textbook description and characteristics. This individual is larger than life to us and we are looking at the leader almost in a surreal fashion because we don’t truly believe what we see. However, we deem that individual as the one who can make it happen for us and the one who can lead us fearlessly into the future without hesitation. This person is the inspiration that we have looked for and the one who makes the journey worth every painstaking step. This individual is transformative and infuses us with the strength and the verve to go forward and jump higher and leap into troubled and often rocky waters. While this person seems like a modern day superhero, it is someone that comes into our lives at various points and we do get to enjoy this breath of fresh air 2 or 3 times and perhaps a few more if we are lucky. For me, I have had the opportunity to have this kind of leader 3 times in my whole working career that spans decades. I found this a blessing and a true amazement. While I wish I had the leader emerge sooner it is important that I did get to experience this because it did have an impact on me at the time while enjoying the decision making and streamlined and seamless days of little to no stress in my work. Even when I was not in the midst of this kind of leadership I took valuable lessons that helped me to survive even in the darkest times of leadership that did not have anything to give except hard luck and bad decisions. The biggest take away from this example is the lessons learned and to use these to make sure this kind of experience does not happen again. While we may be able to make sure this does not happen we cannot do anything but project what may lie ahead and that comes with speculation of what can be and a lot of questions to answer that we may not be able to fully address.  This is very much a world of uncertainty and high expectations yet we don’t even know what the various expectations are. We can’t even plan because we have to be ready for action without any planned script. We must move fast and furious to insure that we do what is required and needed. Every day we must undertake new challenges and directions in our lives; and also be ever preparing for the unexpected in life and in our professional lives.

 

Full text

 

 

Project Management in Universities – The Functional Aspect

Dr. Agata Klaus-Rosinska, Wroclaw University of Technology, Poland

 

ABSTRACT

Universities implement a growing number of projects. We can indicate here: research projects (as a result of the fulfilment of the core processes of university), investment projects (modernization and expansion of university complexes in Europe is possible, among others, thanks to the funds coming from the European Union), as well as administrative projects (reorganization of the functioning of public universities is currently required by the ministerial regulations). A large number of projects and their diversity requires universities to implement the appropriate project management system, which enables efficient project management, and thus results in the achievement of desired goals within a specified budget and time frame, in accordance with accepted quality standards; it also requires careful planning and control.  In the construction of an appropriate project management system in universities, account should be taken of three fundamental aspects of project management: the functional, the institutional (otherwise known as the organizational), and the personal aspect. The functional aspect is related to the fundamental processes of project management, which include initiation, planning, implementation, closure, and control of projects. The institutional aspects of project management raise concerns regarding the project location within a specified organizational structure. Personal aspects are related to problems regarding the selection and the direction of project personnel [Trocki, Grucza & Ogonek, 2004]. This paper is focused on the functional aspect of project management and has a structure as follows: 1. Functional aspect of the project management of universities, 2. Process approach in universities, 3. Traditional project management methodologies and agile methodologies (comparison of main characteristics), 4. Case study - proposed solutions for project management of university in functional aspect, 5. The next research steps necessary for the construction of project management system for universities. Discussion of the project management in universities in term of institutional aspect has been presented among others in the work: [Klaus-Rosinska, Zablocka-Kluczka, 2012]. It describes the proposed organizational (administrative) solutions in universities, including among others: location of project management department in the organizational structure of university, the list of tasks and responsibilities of it and identification of the processes that should be carried out for project management. The functional aspect of project management is a supplementation to the institutional aspect, because it focuses on project management processes. Proposals for construction of university’s project management system, in the functional aspect, should find answers to the following questions: what processes are executed in universities? which processes at the university will be linked to the projects area?, how should this processes be carried out, both in terms of administrative view (support for the contractors of the project), as well as in the executive terms of the project? should research projects / investment projects/ administrative projects be managed in the same way? what project management methodology should be applied in universities? The following parts of the article are supposed to give answers to these questions.  Currently one of the most popular trends in management is the use of a process approach. Today's universities, as well as commercial companies, should be process-oriented.

 

Full text

 

 

Challenges for IFRS Acceptance by the Accounting Profession in the U.S.

Dr. Joseph H. Jurkowski, D’Youville College, Buffalo, New York

Dr. Arup K. Sen, D’Youville College, Buffalo, New York

Dr. Sylwia E. Starnawska, D’Youville College, Buffalo, New York

 

ABSTRACT

In order to ascertain the acceptability in adopting International Financial Reporting Standards  (IFRS) throughout the entire world-wide business community a survey has been developed and was completed by mid-size CPA firms who have multi-national clientele.  Since 2002 the International Accounting Standards Board (IASB), in concert with the  Financial Accounting Standards Board (FASB) in the US, have been undergoing a convergence process and attempting to reach agreement on what standards are utilized.  There is a very diverse mixture of Accounting systems in use in the world today and the goal is to move from a Rules- based system to a Principles based world Accounting System, thus improving the comparability of basic Financial Statements among companies, regardless of national origin.  The Securities and Exchange commission in the United States has committed to working on this project  but has not yet mandated the  usage of IFRS for publicly traded companies since there are a number of important issues remaining to be resolved. The survey will indicate how CPAs and their clients view this change and if adoption of IFRS will increase reported earnings or to what extent it is beneficial to other reporting issues.  Since the IASC was established in 1973 the financial world has been discussing and working toward a world-wide standard accounting system with standardized financial statement presentation.  Based in London, the IASB (successor to IASC) is an independent, privately funded and the main global body for setting internationally recognized, acceptable and harmonized accounting standards that will promote transparent, consistent, reliable and comparable accounting information around the world (Smith, 2008).  This effort picked up steam in 2002 with the signing of the Norwalk agreement and much progress in convergence has been achieved where the main objective is the development of common, high-quality Accounting and reporting standards.  The transition to IFRS appears to be a done deal according to many stakeholders. The IASB has published its accounting standard called International Financial Reporting Standards (IFRS) together with all other International Accounting Standards (IAS).  IASB does not have authority to enforce IFRS or IAS and therefore compliance with these standards is voluntary.  The International Organization of Securities Commission (IOSCO) has approved allowing members to use IFRS for crossed offering and listings on international stock exchanges.  The adopting of IFRS has been accelerated rapidly with its endorsement by IOSCO. The growing acceptance and use of IFRS in major capital markets throughout the world over the past several years is very remarkable achievement. 

 

Full text

 

Toward Using a Roadmap for Strategy Selection for Market Segments: Some New Insights

Dr. Chaim M. Ehrman, Jerusalem College of Technology, Israel

 

ABSTRACT

Many Marketing Decision Makers face a unique problem in the area of Marketing Segmentation. Given that there are different market segments to target for a given product or service, how should one define the best segment for one’s product or service? Clearly, the marketer will utilize the 4 P’s of marketing to maximize want satisfaction of the consumer in  that given segment, known as the target market.  In this paper, a systematic step-by-step approach  is presented to show the decision maker how one can find the ideal target market. A case study is  presented to illustrate implementation of the “Roadmap” approach is selecting the ideal market segment. There are 4 significant parts to the “Roadmap” approach.  There is a wide literature on consumer preference for product attributes. Clearly, the best strategy would be to optimize Brand Performance on the key attributes that consumers consider important. The term “Compositional Models” identifies models that measure attribute importance by the consumer. The typical method for collecting data for compositional models is to write a survey and ask the consumer to rate the importance of each attribute for a given product. The data collected is rating data or interval data, which lend them to significant analysis. Wilkie and Pessimier (1972) present an extensive review of Compositional models. An important reference is the pioneering work by Lavidge and Steiner (1961) on New Product adoption, and Green and Wind (1975) on Conjoint Analysis. In this paper, a compositional model to measure brand  satisfaction will be used. It  is called the Linear Compensatory Model (Fishbein, 1975) or LCM . Each brand can be evaluated on a performance score or belief score (b) for that brand on that attribute (i.e., how well is that brand performing on that attribute), as well as an importance score (I) on that attribute (how important is that attribute for a given consumer). We sum the product of Belief Scores multiplied by Importance Scores for each brand, and divide by the total of Importance Scores. The formula used to compute LCM is the following: LCM = Importance Score for each attribute) ( Belief Score for that attribute Importance Scores Mathematically, LCM equation, represented by  is presented by as follows: Given there are L Customers, I Attributes and K Brands. is the LCM score for each consumer for each brand. = The importance weight given to attribute i by the  customer.  Since  importance weights change for each consumer for each attribute, i.e., the respondent’s belief as to the extent to which attribute i is at a satisfactory level  offered by the choice alternative k. the brand that has the highest LCM score offers to the consumer the highest want satisfaction and has the highest likelihood of purchase. this paper, a case study is presented, in which  LCM scores are compared for 3 types of wines. The wine with the lowest LCM score indicates that consumers are not very satisfied with this type of wine. A lack of consumer satisfaction indicates that there is a market potential here to increase want satisfaction among those who use this wine type. LCM is a Compositional Model because one “Composes” an attitude score based on belief and importance rating data provided by the consumer. 

 

Full text

 

Business Travel and Visa Application: Where Are the Gaps?

Dr. Julie Jie Wen, University of Western Sydney, Australia

 

Abstract

Statistics have shown a decline of business visa application from China to Australia. Although increasing number of outbound visitors from China has attracted significant research interest globally, very little research has concentrated on business travelers from China visiting Australia for a combination of training and sightseeing purposes. They are group travelers with unique characteristics but have not been analyzed to reasonable depth. This paper presents analysis between what is really happening in China related business travelers and what statistics published in Australia about visa application reveals. A gap between the increasing number of business travelers who visit Australia on private passport and tourist visa, and the declining number of business travelers recorded officially, has been identified. The Chinese outbound travel market has been recognized as the greatest potential force in global tourism. It was estimated that Chinese outbound tourists reached 22 million, with an additional 50 million travelers to Hong Kong and Macau (Li et al, 2010). Business travel in the study refers to official travel in the form of delegation and business group travel. Visitors of this type of travel mostly come from public service sector and state-owned enterprises, with increasing numbers from the private sector in recent years. They come to Australia in the group for the purpose of study tour, combining sightseeing with training sessions in their itinerary. These visitors are normally organized by a travel agency in China, who normally provides an invitation letter from a receiving company in Australia to facilitate a business visa for entry to Australia, although an increasing number of business travelers arrive on a private tourist visa. Australian Immigration indicated a slight decrease of business visa applications from China since 1999. This seems to be contradictory to the growing visitation of Chinese to Australia. Is it because Chinese visiting on private holiday purpose? Alternatively, is there any potential gap between the number of business visa application and what is really happening in tourism sectors? This paper makes use of official statistics and author’s primary research to compare trends for Chinese business travel to Australia. The study involved interviewing people who were part of the business travel from China to Australia. Interviews were semi-structured, addressing personal history, training program arrangement, evaluation of the training, reflection on their travel experience, and comparison with other training trips. It seems that official statistics on visa application may have been skewed towards an expanded base of private trips. With increasing ease of obtaining a private visa, some business travelers have used private visas although their trips to Australia were business in nature. Business travel from China is still alive and growing. The research reminds policy makers and tourism industry that there appears to be a significant gap between the official statistics and reality. Chinese outbound tourism has attracted the attention of increasing number of researchers, institutions, and practitioners. China is currently the biggest outbound market in Asia. It has overtaken France as the world’s fourth biggest spender in outbound travel, and will become world’s top four origin countries by 2020, hitting 100 million travelers in 2020 (UNWTO, 2010).  Outbound travel was not encouraged by Chinese government until mid 1990s (Tse and Hobson, 2008).

 

Full text

 

Developing Supply Chain Strategies Model for Taiwanese Manufacturing Companies

Chao-Shun Wang, National Cheng Kung University, Taiwan

and Lecturer, Dahan Institute of Technology, Taiwan

Chia-Yon Chen, Professor, National Cheng Kung University, Taiwan

 

ABSTRACT

With the development of globalization and information technology, product life cycles have shortened significantly, and information transfer and the demands on market reactions have become increasingly faster, thereby resulting in enormous changes of enterprise supply chain systems. This study investigates Taiwanese manufacturing businesses with experience of the complete supply chain, which includes upstream suppliers and downstream customers, and established a supply chain strategy model using the structural equation modeling (SEM). It further validated the causality relationships and interactive impact weights of the manufacturers’ state of the environment, impact, and response. According to the empirical results, market resource environmental competition has a positive impact on supply chain information sharing, and supply chain information sharing has a positive impact on supply chain coordination and supply chain restructuring. Lastly, supply chain coordination has a positive impact on supply chain restructuring. The empirical findings can help manufacturers to review the impact of market source environment uncertainties on individual manufacturers, and further develop supply chain strategic directions.  The external market resource environment will affect the changes in the internal environment of a company. If the external environment has become more dynamic and complex, the organization will face more uncertainties and must be able to rapidly respond to changes in the demand of the consumer market. Many enterprises have realized the limitations of their own resources and the competition with the external environment in resource allocation, realizing that independent operation is no longer feasible, while only through cooperation with other enterprises could then acquire important resources, thus achieving their strategic objectives. In addition, with the rapid advancement of information technology, consumers can easily capture market product information and cooperate with alternative suppliers. Therefore, how supply chain manufacturers quickly respond to the market for information sharing, coordination and restructuring in response to the environment, and how to allocate market resources, have become important issues in the cooperation between manufacturers. There are two ways for manufacturers to reflect market dynamics. One is to strengthen their price competitiveness and reduce all possible overhead from production to transportation (Womack & Jones, 2003); the other one is to strengthen the coordination capacity between the supply chain suppliers to reflect the dynamic nature of the market (Mason-Jones, et al., 2000). For unexpected demand changes and the demand for rapid responses of organizations, a flexible supply chain organization that can quickly respond to the market must be constructed (Lee, 2002).  In view of this, to allow the supply chain to have flexibility and adaptability, it is necessary to construct an information sharing system. Agility, meaning information sharing and a quick reaction capability, is one of the characteristics of a supply chain system. Agility is also a source of supply chain competitive advantage (Lee, 2004).

 

Full text

 

 

An Equity Security Selection Using Annual Information

Dr. Raja R. Vatti, St. Johns University, Jamaica, NY

 

ABSTRACT

Investment analysts use mainly macro, fundamental, and technical analyses for selecting companies with high potential returns. The expectations to macro environments are an important part of the research because markets react promptly to the changing global economic trends. The stock prices of individual firms tend to follow the markets even if their future is on solid footing. Empirical research confirms it. Technical analysis concentrates on observing repeated past price and trade volume behavior of stocks, industries and markets to identify companies with upward price movements.  Despite the controversy of its value, technical research is still widely used. The fundamental analysis would like to look at the efficiencies and deficiencies of individual firms and industries to pinpoint firms with bright prospects. The current investigation utilizes a fundamental approach to analyze all the information reported in the most recent annual reports to select companies for including in the following year’s portfolio. The proposal here is to select an industry first, and then to select companies from the industry.  The companies considered for investment in the industry would be classified into several similar groups by using important financial measures of performance. A few undervalued companies from some quality groups would be selected for the portfolio. The usefulness of the proposed method is tested by comparing actual investment returns. In the process of selecting a few companies with high potential returns, investment analysts should patiently seek and analyze all the relevant past, current and anticipated information on many individual companies.  The inherent assumption in this pursuit is that all the information is easily accessible for everyone.  There are two main approaches for the analysis.  One is the technical analysis which focuses on historical patterns in the price behavior and trade volumes of companies and markets.  The second approach is the evaluation of all the financial and economic fundamentals in order to predict future performance of the companies.  The current investigation is concerned with the fundamental analysis.  In dealing with the financial information, we are assuming that it is possible to achieve superior returns by choosing portfolio using sophisticated statistical and mathematical analysis of relevant information.  This thinking may be contradictory to the theories of market efficiency, random walk and market model.  According to the market model, most of the stock prices move in tandem with the general market which in turn moves with the economic news.  Recently, daily news on the euro crisis has significant impact on the world stock markets.  The prices of sound companies are also negatively impacted by the declining markets and negative news.  Market efficiency theory believes that current stock prices reflect already the available public information, and it is very difficult to find companies with attractive returns by using the available information.  There are three levels of efficient market hypotheses.  One is the “weak” or “random walk” hypothesis.  According to this, it is hard to beat the market by the analysis of patterns in historical prices and trade volumes. 

 

Full text

 

The Effectiveness of the Contrarian and Momentum Strategies in the Global Financial Crisis Period in Asia Pacific Stock Markets

Dr. Yu-Nan Tai, Alliant International University

 

ABSTRACT

This study explored the effectiveness of the contrarian and momentum strategies in the Chinese stock markets of Taiwan, Hong Kong, & Singapore both during the 2008 financial crisis and during the pre-crisis period. The sample period was from May 2003 to October 2012, providing both long-term and short-term analysis and including a non-crisis financial period and a crisis period. This study used an empirical research design and was non-experimental in nature. Results showed that in the short-term, the momentum strategy is significant in Taiwan, Hong Kong, and Singapore. However, in the long-term, the momentum strategy is not significant in the Asian financial crisis period. The contrarian strategy is significant in the long-term but is not significant in the short-term crisis period. De Bondt and Thaler (1985) were the first researches to combine behavior and cognitive psychology with economics and finance to help explain stock return anomalies. This became known as behavior finance and provided researchers an alternative method to the traditional CAPM to explain stock market behavior. Behavior finance emphasizes the importance of investor psychological factors such as overreaction and underreaaction and relies on the contrarian and momentum trading strategies to explain how investors can obtain abnormal returns in different holding periods based on these psychological factors. Overreaction and underreaction are extremely important concepts in behavioral finance field and create the biggest challenges to the efficient market hypothesis. Barberis, Shleifer, and Vishny (1998) explained that investors’ conservatism causes short-term momentum effect and representativeness heuristic, which can cause overreaction and have long–term reserve on stock price. Daniel, Hirshleifer, and Subrahmanyam (1998) believed investors’ overconfidence and self-attribution bias explained the overreaction. Hong and Stein (1999) believed that the attitude of different investors to judge the information causes the effect. Odean (1998a, 1998b, 1999) and Barber and Odean (1999, 2000a, 2000b, 2001) conducted in-depth research concluding overconfidence explains the phenomena. Odean (1998a) introduced that investor’s overconfidence can affect investor’s decisions. He extended the research by Shefrin and Statman (1985) that discussed another anomaly in behavior finance called the disposition effect, which states that investors tend to sell stocks quickly when the price has increased and try to keep their security while the price has dropped. Odean found that investors are reluctant to realize their losses and tend to hold losing investments too long and sell winning investments too soon, supporting the disposition effect. Overall, there is significant research and evidence from behavior finance articles supporting the role of investor overreaction on stock prices in short-term momentum and long-term reserve.  De Bondt and Thaler (1985) first developed the contrarian strategy and Jegadeesh and Titman (1993) developed momentum strategy. Contrarian strategy is to buy loser stocks (stocks with bad performance in the past) and sell winner stocks (stocks with good performance in the past). Momentum is simply the opposite strategy: buying winner stocks and selling loser stocks. Investor overreaction and underreaction creates these two trading strategies: When investors underreact to current events, they continue creating a momentum effect, and when they realize and adjust their decisions, they are using the contrarian strategy to readjust the security price. There is a variety of research evaluating the role of momentum and contrarian trading strategies in various Asian Pacific markets, although many do not include a financial crisis period and none includes the 2008 financial crisis period.  

 

Full text

 

Energy Efficient Management in the Classroom and Their Fiscal Implications in Spain

Dr. Maria Luisa Fernandez de Soto Blass, University CEU San Pablo, Madrid, Spain

 

ABSTRACT

The European Union approved the Directive 2012/27/EU on energy efficiency and the Directive 2010/31/EU on the energy performance of buildings. Buildings account for 40 % of total energy consumption in the Union.  Spanish Action Plan 2011-2020 is a strategic, comprehensive plan that affects all the consuming end-use sectors as well as the Energy Transformation Sector. On September 14, 2012, the Spanish Government approved the submission to Parliament of the Bill on tax measures for energy sustainability. A brief description of certain tax incentives that have not been created specifically for the renewable energies sector. These fiscal incentives could be applied to the building of the classrooms; 1.Tax-Free depreciation 2.Reduction of income from certain intangible assets. 3.Capital duty exemption. 4.Tax allowances on local taxes.  The Saving Energy Classroom Tables help Professors, lectures, teachers and students help them  to learn about heat, light, electricity, natural gas, and ways to make simple changes that can save valuable natural resources and money on their utility bills. This paper is the result of the researches that the author is carrying out about “Taxation and Climate Change”, that is a National Investigation and Development Research (DER2010-14799) and the other research about “Study on the desirability and the possibility of extending the freedom of choice in education at the Community of Madrid through the implementation of private funding sources (EDUCACEU)REF USPBS-PI02/2011-UNESCO 5309-5802-5909. The Treaty of Lisbon places energy at the heart of European activity. It effectively gives it a new legal basis which it lacked in the previous treaties (Article 194 of the Treaty on the Functioning of the European Union (TFEU)).The aims of the policy are supported by market-based tools (mainly taxes, subsidies and the CO2 emissions trading scheme), by developing energy technologies (especially technologies for energy efficiency and renewable or low-carbon energy) and by Community financial instruments. Furthermore, in December 2008 the EU adopted a series of measures with the objective of reducing the EU’s contribution to global warming and guaranteeing energy supply (EUROPA, 2013). The European Union approved  the Directive 2012/27/EU of the European Parliament and of the Council  of 25 October 2012 on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC. The European Union is facing unprecedented challenges resulting from increased dependence on energy imports and scarce energy resources, and the need to limit climate change and to overcome the economic crisis. Energy efficiency is a valuable means to address these challenges. It improves the Union’s security of supply by reducing primary energy consumption and decreasing energy imports. For the purposes of this Directive, the following definitions shall apply: 1.‘Energy’ means all forms of energy products, combustible fuels, heat, renewable energy, electricity, or any other form of energy, as defined in Article 2(d) of Regulation (EC) No 1099/2008 of the European Parliament and of the Council of 22 October 2008 on energy statistics);2.‘Primary energy consumption’ means gross inland consumption, excluding non-energy uses; 3.‘Final energy consumption’ means all energy supplied to industry, transport, households, services and agriculture.

 

Full text

 

Introducing the Communicational Adhesion Lifetime Index Model: A New Communication Approach for the Hotel Industry

Sandra Heiden, University of Latvia

 

ABSTRACT

A profound understanding of customers’ needs and preferences is essential in all industries, and especially in the hotel industry. Understanding guests’ needs and having a clear picture about guests in mind will be a prerequisite for hoteliers in the future; this understanding will make it possible for hotels to survive and prosper (Yavas and Babakus, 2005, p. 359). Hence, hotel marketing of the future should choose <emphasize?> customers’ perspectives. The focus should be on the added value that customers receive due to their service relationship with a company. One central aim is to listen to customers, care about their expectations and respect their fears and uncertainties (Wiesner and Sponholz, 2007, p. 18f.). Since traditional marketing communication approaches are no longer appropriate due to these fundamental changes, new ways are required to cope with these new challenges. Hotel companies require more sophisticated guest segmentation and communication strategies than ever before, due to the highly competitive markets, experienced and demanding customers and the specifications of the service industry. An increase in customer retention is usually regarded as a strategic corporate goal, but a differentiation in terms of changing customers’ expectations is seldom accomplished, and the customer’s perspective is ignored. The intention of this paper is to introduce a new conceptual model for marketing communications in the hotel industry, which takes the customer perspective into account and proposes a new approach for more effective and dynamic communications in the future. This paper introduces a new model for customer retention in the hospitality industry. The model asserts that customer retention will be increased through a more efficient and effective marketing communication strategy that takes the dynamics of the customer relationship lifecycle into consideration. For this reason, the customer communication lifecycle is introduced to offer a more integrated and appropriate model for marketing communication in the hotel industry. The invention of this lifecycle takes the dynamics in communications into consideration, which are otherwise ignored by the usual communication methods. The Communicational Adhesion Lifetime Index (CALI) has been created as an indicator for the communication lifecycle compared to the relationship lifecycle. This index has been developed to illustrate the different communication needs during the different lifecycle phases, corresponding to relationship intensity in the relationship lifecycle model. The main goal of using the customer relationship lifecycle model is the efficient realization of customer retention in different phases of the relationship of the customer with the firm. The phase of the relationship determines the measures that should be used for successful retention. The rationale is that the phase of the relationship is the basis for deriving the most appropriate method to retain customer (Georgi, 2005, p. 237). Within the lifetime of the customer relationship, characteristic phases can be identified that represent different states of the relationship from a customer’s perspective. Due to the different phases, the management tasks differ for customer retention (Stauss, 2011, p. 320). Furthermore, the aim is not only to present customers with certain buying opportunities in a way that satisfies their needs but also to present and communicate purchase possibilities in an enjoyable way. This is a main task (Tsai, 2005). The lifecycle idea should be integrated in the strategic planning and implementation process of Integrated Marketing Communications (IMC). Especially in a competitive environment, it is crucial that companies have detailed information about their customers. Furthermore, modern integrated marketing requires the integration of information about customer needs, motivations, attitudes and actions. Additionally, the main purpose of modern marketing is not to persuade people but to satisfy the customer, which is the essence of customer orientation (Mihart, 2012).

 

Full text

 

A Study on the Effect of Sequential Extended Brand Elasticity on Brand Equity

Dr. Min-Cheng Lai, National Taipei College of Business, Taiwan

Dr. Shu-Cheng Lin, ChunYu Institute of Technology, Taiwan

 

ABSTRACT

Brand extension has been the basis for growth strategies of many enterprises globally. How brand extension strategies affect brand equity has become a popular strategic issue. At present, enterprises mainly adopt diversification strategies to expand business territory. Therefore, the product categories that are completely different from main brand image will be the greatest challenge faced by enterprises. However, when consumers face product categories different from master brand image promoted by enterprises, will brand extension strategies urge them to accept product categories of product extension? This study investigated the correlation among brand elasticity, brand extension evaluation, and brand equity, and conducted a questionnaire survey. A total of 260 questionnaires were distributed, and 237 valid questionnaires were returned. This study found that: 1) under atypical sequential brand extension of reputable master brand, the brand elasticity of subsequent extension will be superior to that of intervening extension; 2) brand elasticity has a positive effect on brand equity; 3) brand extension evaluation has a positive effect on brand equity; 4) brand extension evaluation plays an intervening role between brand elasticity and brand equity. Based on the aforementioned findings, this study proposed specific suggestions on the management of practical operation as reference for practical application and follow-up studies. In recent years, as the product life cycle shortens, the launch of a new product requires high cost. Brand extension is the basis for domestic and international growth strategies for many enterprises; hence, the influence of brand extension on brand equity has become a popular strategic topic. The prevalence of brand extension strategy is because enterprises believe that the strategy can trigger consumers’ willingness of accepting the new brand due to the brand familiarity and brand association (brand image), thus creating influence on brand equity (Keller, 2003).  Brand extension strategies have been used to promote many successful products every year, such as Apple i series and Godiva coffee. However, not all of the brand extension is meant to be successful. Enterprises have to bear the risk that the failure of brand extension may do damages to master brand image (Martı´nez & Pina, 2003). The success of brand extension is mainly subject to brand extension fit (Völckner & Sattler, 2006). For the product category similar to master brand, the perceived fit is usually higher (Boush & Loken, 1991). Master brand can provide brand extension for product category with the property of attractiveness (Broniarczyk & Alba, 1994), and other categories of products can be marketed though brand extension (Aaker & Keller, 1990). Monga & John (2010) found that many brands do not follow these rules. However, they could also achieve successful brand extension. These brands are described as brands of better “elasticity” because they can promote different product categories through brand extension, share several common properties or features of existing products, and attract different customer markets. However, why do these brands possess better brand elasticity than others do? Monga & John (2010) suggested that the common explanation is that the characteristics of master brand determine brand elasticity.

 

Full text

 

 Causality Relationship for Selection Variables of Brand Creation and Brand Acquisition as Expansion Strategies: Evidence from Egypt

Dr. Mansour S. M. Abdel-Maguid Lotayif, Business Department, Beni Suef University, Egypt

 

ABSTRACT

The current study aims at identifying the factors behind the selection of both brand creation and acquisition besides figuring out the of causality relationships in this perspective. The experiences of 173 Egyptian executives were utilized to achieve these objectives. Throughout multivariate analytical technique (e.g. multiple regression) bivariate analytical techniques (e.g. correlations), and univariate analytical (i.e. descriptive analysis such as percentages) significant causality relationships between brand creation and acquisition and study's demographics were found. Moreover, the variables affecting the selection of brand creation and acquisition were figured out.  Brand name (as an intangible asset) has become one of the most critical assets of the firm nowadays (Kuzmina, 2009), as intangible assets are key driver of innovation and corporate value in the 21st century (Bounfour 2003; Del Canto and Gonzalez 1999; and Coombs and Deeds 1996). Moreover, the appropriate allocation of these intangible resources has become an important strategic decision for organizations (Halliday et al., 1997). That intangible asset has different definitions in different disciplines; in consumer, in finance, in legal, and in marketing disciplines (Kuzmina, 2009). More specifically, brand is a set of mental associations in consumer research discipline; brand is an intangible and conditional asset in finance discipline; brand is a tool in differentiating a company’s offering from that of its competitors in legal research, discipline; and brand is a name with considerable power to influence buyers in marketing. How to get that intangible asset? Is it throughout creation? or acquisition? These two key strategic questions every single organization ought to answer whenever expand. Literally, brand creation takes time and effort to build bridges of trust via long lasting relationship with customers. Brand acquisition requires enough financial resources to be acquired. The current research explores these variables behind each selection with evidence from a Middle East country (Egypt).  The use of internal brand creation or external brand acquisition as an option in brand portfolio expansion, has received far less research attention, even though they are common in practice and their use varies within industries. Few conceptual papers have addressed this topic (e.g. Damoiseau et al., 2011, and Kuzmina, 2009) and very limited empirical research has been completed with any kind of representative sample in a Middle East context which the current study aims at.  By way or another, brand creation or brand acquisition options is related to make-or-buy decision in the strategic management literature (e.g. Baker and Hubbard, 2003; 2004; Brouthers and Brouthers, 2000; D’Aveni and Ravenscraft, 1994; Hennart and Park, 1993; and Walker and Weber, 1984) as well as to brand portfolio literature from marketing. Brand expansion portfolio can itself be divided into three approaches: brand extension, brand creation, and brand acquisition (Kuzmina, 2009). 

 

Full text 

 

Investigating Intention to Use Mobile Instant Messenger: The Influence of Sociability, Self-Expressiveness, and Enjoyment

Dr. Ahmed Soliman, COBA, King Saud University, Riyadh, Saudi Arabia

Mohammed Saleh Salem, COBA, King Saud University, Riyadh, Saudi Arabia

 

ABSTRACT

Rapid developments in telecommunications enabled users to perform tasks quickly and easily. Mobile instant messenger is one of the most successful technologies that significantly improved the performance of users. Many people use instant messaging such as Blackberry Messenger and WhatsApp Messenger as a way of communicating with their friends and family members while they are roaming. Others enjoy using instant messenger in sending and receiving jokes and funny stuff. This study reveals that in addition of perceived usefulness and perceived ease of use of mobile instant messenger, sociability, perceived self-expressiveness, and perceived enjoyment are strong motivational factors in using mobile instant messenger. Practical implications and suggestions for future research are offered. Mobile text messaging service has been one of the most successful mobile services in recent years (Nysveen, Pederson and Thorbjørnsen 2005b). Moreover, instant messaging has grown tremendously as the rate of acceleration in the development of information technology, internet, and mobile communication is unprecedented. In a nutshell, Mobile Instant Messenger and WhatsApp Messenger are becoming popular media for both social and work-related communications. Instant Messaging (IM) is often described as a “near-synchronous” communication medium, placing it between synchronous communication medium such as speech and asynchronous communication medium such as email (Avrahami and Hudson 2006). This study investigates some factors that influence the use and acceptance of instant messaging services such as Mobile Instant Messenger and WhatsApp Messenger among university students who use them more frequently than other consumer groups. Despite the success of technology in helping people do business quickly and easily, the extensive use of technology has some negative aspects. It might lead to addiction of technology, work overload, and technology-family/work-family conflict (Turel, Serenko, and Bontis, 2008). The extensive use of technological peripherals such as smart mobile phones is clearly observed among young generations. This might result from the usefulness and ease of use of this type of phones. One of the questions that this situation raises is whether such variables as sociability, self-expressiveness, and enjoyment play a role in the extensive use of Mobile Instant Messenger and WhatsApp messenger among university students. Davis’ (1989) technology acceptance model (TAM) deals with the relationships between the ease of technology use and its usefulness, on one hand, and individuals’ attitudes toward technology and their intention to use it, on the other hand. TAM is used to interpret the adoption of technological products. Kwon and Chidambaram (2000) and Lee et al. (2002) have employed TAM to test the factors affecting the adoption of mobile services. The model sheds light on the attitudinal interpretations of the intention to use a specific technology or service.

 

Full text

 

Influence of Six Sigma Practices on Internal Quality Management of Thai Private Hospitals entering the ASEAN Economic Community (AEC)

Pareeyawadee Ponanake, King Mongkut’s Institute of Technology, Ladkrabang, Thailand

Dr. Sunpasit Limnararat, King Mongkut’s Institute of Technology, Ladkrabang, Thailand

Dr. Manat Pithuncharurnlap, King Mongkut’s Institute of Technology, Ladkrabang, Thailand

Dr. Woranat Sangmanee, King Mongkut’s Institute of Technology, Ladkrabang, Thailand

 

ABSTRACT

This research aimed to study 1) the internal quality management of a Thai private hospital entering the ASEAN Economic Community (AEC), and 2) the influence of Six Sigma practices on this internal quality management.  The sample group for the research comprised 337 HA officers. The research was conducted from December 2012 to June 2013, and the research method used was purposive sampling through questionnaires. Statistical data analysis was performed using percentages, means, standard deviations, multiple linear regressions, and the forward selection technique.  The research found that 1) the internal quality management of Thai private hospitals entering the ASEAN Economic Community was at a high level, and 2) that the Six Sigma practices regarding supplier relations influenced this internal quality management at the 0.05 level of significance, while the Six Sigma practices customer relations, quality data, service design and process management influenced it at the 0.01 significance level. Quality management is essential to strategic management to increase an organization’s competitive advantage and efficiency.  The qualitative ideas that have been applied in management for many years include statistical quality control, statistical process control, zero defects and total quality management.  Recently, Six Sigma has become a popular approach to quality management and has been accepted by various industries around the world (Hendry & Nonthaleerak, 2005). The Six Sigma approach emphasizes methods (or systems) that improve the efficiency of businesses’ statistical tools and methods and reduce production process, leading to reduced defects of those process and increased quality of products and services, as well as increased profits (Russell & Taylor, 2011). Product quality improvement is the basic success factor for businesses.  To improve quality, a company should provide a number of continuous quality improvement programs, especially total quality management (TQM).  Presently, many companies apply Six Sigma practices, including Motorola, General Electric, Honeywell, Sony, Caterpillar, and Johnson Controls, all of which experience positive returns on their Six Sigma investment.  Six Sigma is the quality management approach popular among several industries (Desai, 2006).  It is an efficient and successful tool in the production industry to reduce the variation in process and increase production.  However, the service industry is different from the production industry, and the application of Six Sigma has been limited to specific services (i.e., healthcare businesses and banks) (Abdolshah et al., 2009). Quality has been identified as the most important factor in consumers’ selection decision of goods or services that various agencies (factories, retailers, banks and financial institutions, etc.) provide to their customers.  Thus, understanding customers’ demand and quality improvement of goods and services are important success factors to enable businesses to compete sustainably in the market.  

 

Full text

 

Relationship Marketing Orientation and Differentiation Strategy Affecting Banking Performance Effectiveness

Jedsada Wongsansukcharoen, Dr. Jirasek Trimetsoontorn and Dr. Wanno Fongsuwan,

King Mongkut's Institute of Technology Ladkrabang (KMITL),

Administration and Management College (AMC), Bangkok, Thailand

 

ABSTRACT

This paper aims to develop structural equation modelling of variables that affect the banking performance effectiveness of commercial bank branches (Thailand) in the banking sector by gathering quantitative data. The population of the study covers all 2,068 Thai commercial bank branches in Bangkok, Thailand (as of 31 July 2012). This research defined the Thai banks for data collection using stratified sampling (first step) and simple sampling (second step). Primary data were collected using a self-administered survey of 65 managers and 185 marketing officers. The responses to the questions capturing focal constructs used a seven-point Likert scale. Data were analysed using confirmatory factor analysis (CFA) and structural equation modelling (SEM). It was found that significant relationships existed between relationship marketing orientation (RMO), and differentiation strategy, and banking performance effectiveness. The key success factors of relationship marketing orientation were found to have direct influence on banking performance effectiveness (p < 0.001), and indirect influence on banking performance effectiveness through the mediation of differentiation strategy (p < 0.001). These results enhance performance effectiveness, customer insight and building long-term relationships with businesses and customers to the factors needed to respond to the highly competitive situation at present.  In the present, the banking industry challenged with the most uncertain situation in its history. Until this time, the banking industry had been characterized as a free flow of trades and exchanges between one entity and another, with meaning placed on having a participative relationship. In the present highly uncertain economic crisis period, the banking industry must pay more attention to evaluating the extent of the results of the macro-economy and avoid ineffective strategic planning. However, the proactive action would be to help make the banking industry more agile and alert. This will not only help businesses to sail through the crisis but also create innovative opportunities (Carbonara and Caiazza, 2010). The Bank of Thailand has estimated that financial economics and investments will see an increase in competition. Therefore, it is important to adapt to the increasing risk. The banking industry must be able to develop within the more challenging and severe environment. Every sector involved should co-operate and synergize to build a more effective and sustainable system, rather than focusing on short-term gain (Wongsansukcharoen et al., 2013).

 

Full text

 

Taylor, HRM, Strategic HRM with Jobs, Employee Performance, Business Performance Relationship: HR Governance through 100 Years

Dr. Gurhan Uysal, Ondokuz Mayıs University, Samsun, Turkey

 

ABSTRACT

This study discusses theory of SHRM, and it puts a SHRM model. SHRM can be described with employee/firm performance relationship. In this relation, employee performance increases performance of business departments; and, performance of business departments increases firm performance. Business departments are stock, supply, marketing, production, logistics, finance and others. Secondly, it is assumed that relationship between employee/firm performance is trigonometric in SHRM function. In trigonometry, there are dependent variable, independent variable, and moderators. Dependent variable is firm performance; independent variable is employee performance, and moderator is business departments. It is expected that relationship is triangular in this trigonometry. Thirdly, there are some functional differences between HRM and SHRM. Major difference between is, HRM practices are individual and separate in HRM. However, HRM practices are interrelated in SHRM.  SHRM aims to achieve firm performance. SHRM achieves firm performance through employee performance. HRM practices has an impact on individual performance. and individual performance increases performance of business departments. Departments are stock, supply, marketing, production, finance etc. It is expected that individual performance increases performance of stock department, performance of supply department, performance of marketing department and so on. It is believed that performance of business departments has an impact on firm performance. Firm performance is described with market share, earnings, employee satisfaction, customer satisfaction, product quality. Therefore, performance of business departments increases its impact on those variables of firm performance through employee performance in SHRM. Therefore, SHRM can be described with employee/firm performance relationship. Moderator between employee performance and firm performance is business departments. It is expected that relationship in this SHRM definition is triangular or trigonometric. Dependent variable of trigonometry is firm performance; independent variable is individual performance; and moderator is business departments. In this triangular relation, individual performance has an impact on firm performance through business departments. Furthermore, there are two arguments in SHRM literatuıre. First argument is how HRM has an impact on firm performance; and second arguments is how SHRM can be put into practice?

 

Full text

 

 

Politics and Economic Growth: Regional and Income Level Classification

Dr. Hussein Zeaiter, Lebanese American University

Dr. Raed El-khalil, Lebanese American University

Issam Nassar, Lebanese American University

 

ABSTRACT

Is politics an important determinant of Economic growth? Political economists have long been arguing whether and to what extent democracy, bureaucracy, government stability, affect economic growth. This paper focuses on the relationship between political risks, like democracy, government stability, military and religion involvement in politics, and ethnic tensions on economic growth controlling for the regions and the income level. Using cross section-time series data for more than 140 countries over the period 1984-2009, this paper shows that government stability is the most important political factor for all countries as well as different income level countries. The growth in Sub-Saharan African countries are mainly affected by the lack of democracy and ethnic tension.  The relationship between political risks and economic growth has long been studied. Democracy is considered the main political risk factor of all political risks. It seems to be an engine for growth; however, many non-democratic countries have high growth, at the same time, some democratic countries have slow and sometimes depressed economies. The main question remains to what extent democracy triggers growth in developing as well as developed economies. This study discusses whether democracy and other political indices can be common factors among countries with common geographical areas as well as income levels. Many questions have arisen of the relationship between democracy and economic growth. Sometimes the relationship is direct as in Western Europe where democracy is accompanied by solid economic structures and high growth. In many sub-Sahara African countries, economies perform very poorly and democracies as well. These examples show that democracy and growth are positively related, that if we discard other countries in which democracy and economic growth are indirectly related. Comparing the two largest countries in the world, China and India, we see that India, representing the largest democracy in the world, lack the same economic growth that China has, considered a non-democratic country. Moreover, some high income countries, rich with natural resources, have no democracy, while others do have democracy. The other argument that this paper discusses is whether democracy has different effects on growth in different income levels. In general, high income countries are characterized by free markets and neutral democracy. On the other hand, lower income countries show relatively lower democracy. This paper examines the effect of democracy and other important political indices on economic growth in different regions and throughout different income levels. This study is divided into several parts: part one introduces the paper.

 

Full text

 

The Relationship of Service Quality, Customer Satisfaction and Customer Loyalty in Private Nursing Homes in the Bangkok Metropolitan Region

Lanchakorn Satsanguan, King Mongkut’s Institute of Technology Ladkrabang, Thailand

Dr. Wanno Fongsuwan, King Mongkut’s Institute of Technology Ladkrabang, Thailand

Dr. Jirasek Trimetsoontorn, King Mongkut’s Institute of Technology Ladkrabang, Thailand

 

ABSTRACT

The effect of population aging, the socio-economic transformation and the inadequacy of health and social services for older people with health problems has led to a considerable focus on long-term care for them. Some carers in long-term care institutions, particularly nursing homes, are unable to help older persons with chronic diseases and instead can only care for the activities of daily living for the elderly. This leads to a lack of confidence in the service quality of nursing homes, including decreased customer satisfaction and customer loyalty. The overall objective of this study is to examine the relationship of the above three variables with customers of private nursing homes in the Bangkok metropolitan region of Thailand. Authors use an accidental sampling method and regression analysis to collect and analyze data. Regression results are consistent with our research objective. Some items of the service quality construct correlate with customer satisfaction. “Safe facilities for the elderly” has the greatest relation with customer satisfaction. Some items of the customer satisfaction construct correlate with customer loyalty. “Good experience of the service” has the highest relation with customer loyalty. Furthermore, some items of the service quality construct correlate with customer loyalty. “Care of personnel that is similar to relatives of elderly” has the second highest relation with customer loyalty.  There were 810 million people aged 60 years or older around the globe in 2012. Population aging – that is, the rising proportion of older people in the population, is a global incident due to the fast decrease in fertility rates combined with declining in mortality and increasing longevity (United Nations, 2012). This phenomenon is taking place in many developing countries in Asia including Thailand. Population aging in Thailand is occurring more quickly than in developed countries in the West. The growth rate of older persons in Thailand exceeds that of the total population (Kespichayawattana & Jitapunkul, 2009). The majority of Thai women are single and employed full-time, resulting in a considerable decline in the total fertility rate (Srithamrongsawat et al., 2009). This decrease in the total fertility rate has an impact on population structures in terms of children aged 0-14 years and the workforce aged 15-59 years (Office of the National Economic and Social Development Board, 2012). The potential support ratio in 2010 was 6 workforce-age individuals to every 1 older individual. This ratio is expected to reduce to 2 to 1 by 2030, indicating that the workforce-age population will have a substantial burden for taking care of the elderly (Foundation of Thai Gerontology Research and Development Institute, 2012).  the challenges that result from population aging include socio-economic changes and insufficient health and social services for older people with chronic diseases, weakness and disabilities; these issues lead to an increased focus on long-term care for older persons (Srithamrongsawat et al., 2009). In particular, authors consider the nursing home, which is one of largest types of institutional long-term care (Sasat et al., 2009a) and offers a good representation of long-term care institutions.

 

Full text

 

An Assessment of the Effects of Individuality on Organisational Culture in Selected Institutions in Ghana

Rosemary Boateng Coffie, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana

James Kennedy Turkson, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana

 

ABSTRACT

Assessment of organisational culture is a valuable analytical tool in its own right as there are many ways to visualise the concept of organisational culture. The research assesses the effects of individuality on organisational culture.  The culture of the individual is assessed to find out its relationship with individuality.  The degree to which individuality affects organisational culture was analyzed and discussed with the support of the Statistical Package for Social Science (SPSS).  Factors such as the individual’s home background, inherited traits and working conditions were analyzed against the organisational culture of the individual. The results revealed that the culture of the individual does not influence his work. This was as a result of the modern demands from employers. Upon entering an organization, individuals attempt to understand what the organization is really like and try to become participating members (Feldman, 1976). Individuals are motivated to ‘make sense’ of their environment and understand why things happen (Heider, 1958). By observing behaviours that are common to the members of the organization, new employees can determine what behaviours are expected and rewarded and what behaviours are frowned upon and attract sanctions. As individuals enter and become participating members of an organization, they are exposed to beliefs and values that begin the initial development of cultural internalization. Once employees become aware of organizational expectations, norms, and values, they will often attempt to adhere to them in order to be embraced as new members of the organization. It is obvious that the acceptance of an individual into an organization will depend on how such an individual conforms to the general behavioural patterns of the organization. As employees attempt to comply with behavioural standards, they will seek for behavioural examples of others and use these examples as behavioural comparatives. This search for reinforcement of appropriate behaviour is the beginning of the individual's internalization of the organization's culture (Home et. al 1981). The internalization process will also lead to a greater degree of organizational commitment. The collective environment, enhanced by organizational culture, tends to create a strong sense of attachment to the organization, as members begin to subordinate their own goals in favour of the organization's (Triandis, 1995). Porter et. al (1974) suggest that a committed individual will strongly believe in the values of the organization. The internalization of organizational values should create a strong belief in these values and also create a perception of individual commitment to the organization.

 

Full text

 

Environmental Purchasing: From the Perspective of Claims, Involvement, and Societal Structure

Dr. Kokku Randheer, King Saud University, Saudi Arabia

Dr. Abdulrahaman Al-Aali, King Saud University, Saudi Arabia

Ruwaida Al-Ibrahim, King Saud University, Saudi Arabia

 

ABSTRACT

One of the major issues in marketing today is green marketing, or environmental consumption. This study examined whether environmental claims, societal structure, and consumer involvement in environmental issues influence positive consumer attitudes toward the environment and affect purchase decisions. A sample of 460 individuals was included in this study. Data were collected using a multiple-item scale developed to address all of the variables of the study. Data reduction was conducted using factor analysis. Seven factors were identified with alpha values that met the threshold level of 0.7, and total variance explained exceeded 65%. The association between favorable consumer attitudes toward the environment and independent variables was found to be significant. High and low environmental involvement, substantive claims, associative claims, message framing, collectivism, individualism, and favorable consumer attitudes were found to be significant predictors of willingness to perform an environmental purchase decision. Managerial implications highlight the importance of directing environmental issues toward the young and creating platforms that inform, educate, and convert markets into green consumption. An enormous opportunity exists for green consumption, and practitioners should translate this knowledge into a profitable model.  Today’s marketing field involves numerous environmental issues, such as the popular green revolution. As a result, marketers are focusing on finding ways to make their offerings appear environmentally friendly or green, and they are attempting to reach consumers in the strongest way possible. Industries are investing effort in helping consumers understand and accept this new philosophy. Environmental purchasing is primarily influenced by three factors. The first is claims, which provides information on how a product improves or degrades the environment (Ricky et al., 2006). This information can be provided by advertising the product or by associating the advertised product or its advertiser with positive environmental messages (Polonsky et al., 1997; Ricky et al., 2006). Although environmental claims have been used by practitioners, academics have paid limited attention to the effectiveness of these claims (Ricky et al., 2006). The second factor is consumer involvement (Chan, 2000), which may affect the effectiveness of communication. According to a study by Kim (2005), environmental claims enhance the communication effectiveness of advertisements for both high and low environmentally involved products and services. The third factor is societal structure; each society has a different structure. Structures are built on individualism or collectivism and on person-level tendencies, which appear to influence individuals’ motivation to engage in environmentally conscious behaviors (McCarty and Shrum, 2001). Kim (2205) suggests that collectivism influences green buying behavior.

 

Full text

 

Nonverbal Immediacy and Teaching Effectiveness of Asian and American Lecturers

Roy Ramos Avecilla, Webster University, Thailand

Dr. Maria Belen Vergara, Webster University, Thailand

 

ABSTRACT

Fifty-two Asian students in an international university in Thailand participated in a study which determined their perceptions of nonverbal immediacy and teaching effectiveness of two Asian and two Caucasian American lecturers of business and technology courses. Teacher nonverbal immediacy involves affiliation and animation behaviors (Smythe and Hess, 2005) whereas teaching effectiveness refers to dimensions of teacher behavior (i.e., cognitive, affective, motivational, disciplinary, and innovative) that produce learning outcomes and motivation in the students (Rico, 1971). Results showed that Asian students perceived Asian lecturers as more nonverbally immediate than Caucasian American lecturers. Although Asian and American lecturers were seen as equally effective in teaching, Asian students positively associated nonverbal immediacy behaviors with the affective, motivational, and overall dimensions of teaching effectiveness of Asian lecturers. The findings underscored the value of cultural differences in expectations and perceptions of appropriate teacher behavior in a multicultural classroom context. Implications on managing multicultural college classrooms and future research directions are discussed.  The increasing cultural diversity of students in higher learning institutions has prompted researchers in the field of instructional communication to vigorously explore variables that can promote greater accountability and better instructional quality in a multicultural classroom context.  In recent years, research on instructional communication have shed light on teacher nonverbal immediacy and its application to culturally diverse learning situations. These include teacher behaviors such as gaze, smile, nod, relaxed body posture, forward lean, movement gestures, and vocal variety in relation to student learning which communicate approachability, availability for communication, and interpersonal warmth and closeness (Andersen, 1978).  Teacher nonverbal immediacy has been demonstrated to contribute to university student’s ratings of teaching effectiveness (Babad, Avni-Babad, and Rosenthal, 2004; Feeley, 2002; Harris and Rosenthal, 2005; Kurkul, 2007; Lazaraton and Ishihara, 2005). Body movement, hands/arms gestures, and facial expressions that a teacher performs in the classroom signal openness and warmth which enhance student-teacher relationship (Cobb, 2000; Sanders and Wiseman, 1990; Stock, Righart, de Gelder; 2007), allow segmenting of activity into meaningful events in the process of communication (Zacks, Kumar, Abrams, and Mehta, 2009) which can help students make sense of learning from lectures (Pozzer-Ardenghi and Roth, 2006), and facilitate achievement of learning objectives of courses (Jordon, 2011). 

 

Full text

 

Copyright: All rights reserved. No part of the material protected by this copyright notice may be reproduced or utilized in any form or by any means, including photocopying and recording, or by any information storage and retrieval system, without the written permission of JAABC journals.  You are hereby notified that any disclosure, copying, distribution or use of any information (text; pictures; tables. etc..) from this web site or any other linked web pages is strictly prohibited. Request permission / Purchase this article:  jaabc1@aol.com

 

Contact us   *   Copyright Issues   *   Publication Policy   *   About us

Copyright 2000-2018. All Rights Reserved