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The Financial Structure of U.S. Born-Global Firms
Dr. Charles Braymen and Dr. John Wingender, Creighton University, Omaha, NE
While the influence of import competition on the decline of the manufacturing industry in the United States receives much attention in both the general press and academic literature, recent studies suggest that some firms are successful in establishing themselves domestically and immediately enter the export market. This paper investigates the financial structure decisions of these newly founded exporters by utilizing recent firm-level data from the Kauffman Firm Survey, which is a panel of firms founded in the United States during 2004. The results indicate a notable difference in both the scale and composition of the financial resources of exporters as compared to non-exporting firms. In particular, a statistically significant relationship between later stage funding via external equity and a firm’s export participation and intensity is found. This paper explores the relationship between the financial structure of new manufacturing firms and their exporting behavior. The period immediately following a firm’s establishment is commonly marked by extremely scarce financial resources. Thus, the already difficult task of overseas expansion may be compounded by the financial state of new firms that face limited equity and credit sources. Of the existing literature concerning the exporting behavior of new firms, the focus is typically on non-financial strategic behavior. This paper extends the literature by empirically examining the relationship between the financial structures of new firms and their exporting behavior. In this paper, confidential data from the Kauffman Firm Survey (KFS) are used that provide financial and other firm-level characteristics on newly formed U.S. manufacturing firms. The information from these panel data provides an examination of the magnitude of new financial resources, as well as the timing of such funding and its sources. Results suggest that exporting firms are much larger in terms of their financial resources. Further, firms that receive new equity funding during their early years are much more likely to be exporters. Differences in the composition of funds between exporters and non-exporters are also reported. The remainder of the paper is as follows. The next section presents literature related to the exporting behavior of new and established firms, as well as the financing of new firms. The empirical model and control variables are described in Section 3. The KFS data are described in Section 4. Section 5 provides related descriptive statistics and discusses the empirical results. The final section concludes. Recent research suggests that some firms enter into foreign markets within their first few years. A growing literature, primarily in the field of entrepreneurship, has explored many properties of these “born-global firms” (Knight and Cavusgil, 2004) or “international new ventures” (Oviatt and McDougall, 1994). Many of these studies focus on the innovation (Kundu and Katz, 2003) and product differentiation strategies (McDougall et al., 1994; Oviatt and McDougall 1994, 1995) of new exporters. Other studies examine the knowledge constraints and suggest that personal networks of management play a large role in the firm’s ability to enter foreign markets by eliminating the risk associated with conducting business with relatively unknown partners (Freeman et al., 2006; Zhou et al., 2007). The economics trade literature that examines the firm-level export decision of established firms often utilizes a sunk or fixed cost associated with exporting, which limits the firms that export to those with relatively higher levels of productivity (Roberts and Tybout, 1997; Melitz, 2003; Das et al., 2007; Aw et al., 2011). A key concept in these models is that exporting requires resources in order to establish overseas channels; a concept that is explicitly modeled in Arkolakis (2010). If overseas expansion requires additional resources, then the equity and credit resources of the firm can likely influence their exporting behavior (Manova, 2008a; 2008b). If financial constraints influence the export decision of established firms, a stronger influence might be expected when considering the export behavior of new firms, which are often considered to be financially constrained. The literature on the financial structure and constraints of new firms often approaches the concept through Myers’ (1984) pecking order theory, which posits that firms will use inside financial resources, such as retained earnings and equity investment by owners, before using outside funding sources. Myers further suggests that firms will prefer to obtain funding from outside resources by way of debt before outside equity investment.
The Role of Stock Prices in Litigation
Dr. Donald Margotta, Northeastern University, Boston, MA
Stock prices play an important role in litigation but their role depends on the type of litigation and the relevance of assumptions underlying stock price theory in specific cases. This paper examines the role of stock prices in two types of litigation; one involves fraudulent statements which affect prices, the other with management decisions which affect prices but where no fraud is involved. It suggests that while market prices are useful in fraud cases and are often appropriate for assessing monetary damages, they might not always be so. It also finds that market prices are frequently not appropriate for judging governance cases. Law suits initiated by shareholders who were financially harmed by misleading corporate statements are called 10b-5 cases because they involve violations of Securities and Exchange Commission Rule 10b-5. At issue in such cases is the effect on stock prices from specific information events, typically the dissemination by a company of a fraudulent statement. Market prices in such cases are critical in legal proceedings such as class certification and are often, but not always, appropriate measures of the financial impact of the fraudulent information. Stock prices may be even less appropriate measures when governance decisions are at issue since 10b-5 litigation usually involves only the market’s assessment of information, while governance issues additionally involve management’s assessment of information. Those two assessments can be quite different and whose judgment should prevail may depend on specific circumstances of each case. The first part of this paper examines the role of stock prices in fraud litigation, while the second part examines their role in governance cases. Several phases of fraud litigation are discussed and the role of stock prices in each phase is analyzed. In the first phase plaintiffs must show “loss causation,” and in the second they must show “reliance.” Then, in litigation against public companies, plaintiffs usually seek “class certification,” and then monetary damages. Each of these terms will be defined and discussed in more detail. Litigation involving stock fraud typically involves alleged violations of the Securities and Exchange Act of 1934 and of Securities and Exchange Commission Rule 10b-5, so we first show the relevant parts of these regulations. Section 10 of the Securities and Exchange Act of 1934 (the “Act”) prohibits activities Congress deemed to be deceptive and is entitled “Regulation of the Use of Manipulative and Deceptive Devices.” Although Section 10 has four subsections, and is ten pages long, the relevant part for this paper is from the beginning which states in part: (1) It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange … (b) To use or employ, in connection with the purchase or sale of any security registered on a national securities exchange …any manipulative or deceptive device … in contravention of such rules…as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors. In accordance with the authority granted it under the above quoted Section 10 (b) of the Act, the Securities and Exchange Commission (SEC) promulgated Rule 10b-5 which reads as follows: (2) Rule 10b-5: Employment of Manipulative and Deceptive Practices: It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange, 1. To employ any device, scheme, or artifice to defraud, 2. To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or 3. To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security." Although the Act and Rule 10b-5 prohibit making untrue or misleading statements, neither describes the remedy if such acts occur. However, case law has developed indicating that if the losses arise from transactions involving publicly traded securities the changes in prices of those securities may be used as a basis for assessing damages. However, this is not a simple process, as will be discussed further in this paper. The law in this area can be complex and is scheduled to be reviewed again in March 2014 by the United States Supreme Court in Erica P. John Fund v. Halliburton (“Halliburton”),(3) a case that has been in litigation for more than ten years. The outcome of the Supreme Court’s re-hearing of this case could have significant impact on the issues discussed here.
The Neomarketing Era: A Synergistic Relationship Between Marketing and Neuroscience
Dr. Roderick MacPherson, Dr. Megan Sherod and Dr. Stephen Craft, Dean, College of Business
University of Montevallo, Montevallo, AL
Neuromarketers have borrowed many of the tools and techniques that were developed by neuroscientists in order to better understand the workings of the human mind. Through novel application of this knowledge, neuromarketers have discovered many reasons why only limited progress has been made by marketing researchers in trying to understand consumer behavior. Since current theories propose that a preponderance of consumers’ decision-making is made at the subconscious level, it is understandable that consumers have been unable to precisely explain their behavior via traditional marketing research techniques. With the introduction of more powerful and higher resolution MRI scanners, coupled with functional applications, more exacting brain probing and stealth marketing methods have been the result. Consequently, marketers may soon be able to more decisively influence consumer behavior. Thus, the need to devise tight ethical guidelines for marketers and to educate consumers about this new capability is paramount. Every once in a while, a grand idea surfaces that has the potential to bring about profound societal changes. In an incremental fashion, just such a change has been sweeping across all fields of inquiry that study human behavior. Those who investigate human behavior on the college campus from biology, to business, to education, to the behavioral sciences, have already embraced many of the findings from applicable brain research studies and have begun to collaborate with neuroscientists to usher their own fields into the 21st century. Whether or not the impact of utilizing new scientific knowledge gleaned from the field of neuroscience will reach the threshold of Schumpeter's "Creative Destruction" has yet to be determined. But, from all appearances thus far, the application of the purloined hardware, software, algorithms, statistical tools, and technical expertise seems destined to greatly enhance our understanding of the human mind, its components, and its internal processes. Recent advances in brain imaging now permit unprecedented access to our thoughts and mental states (Bor, 2010). For marketing practitioners and academicians alike, these are unquestionably exciting times. Armed with new knowledge borrowed from the neurosciences, marketers will now have an opportunity to finally affix a solid scientific underpinning to the discipline. Like many of marketing's major advancements in the past that were drawn from utilizing interdisciplinary techniques, neuroimaging further leverages that approach. The ongoing scientific upheaval underway in marketing should wring much of the subjectivity, guesswork, bias, hunches, and mistakes out of the discipline for good. It may also present an opportunity to silence many of marketing's staunchest critics. Over the years, traditional marketing has proven to be a hit or miss affair. Marketers have fared poorly when it comes to understanding or predicting consumer behavior. Evidence of this shortcoming can be found in the new product failure rate that has remained inordinately high for decades. A renowned quote from Lord Leverhulme (founder of Unilever) captures the view of many advertising campaigns: "Half the money I spend on advertising is wasted; the trouble is, I don't know which half (Weavind, 2012; Cloonan, 2011)." The use of questionnaires, interviewing, and group activities are all fraught with problems (Eagleman, 2011). Numerous difficulties are associated with deploying questionnaires to gather information from consumers. Low return rates, the inability of respondents to recall past events, people making false statements, an inability to further probe consumer responses, the potential for consumers to misunderstand the wording of questions, and other shortcomings have led to concerns regarding the validity and reliability of the results. The ever-popular focus group is also fraught with problems. Social psychological research explains that in attempts to appear more socially desirable, participants will fabricate answers to impress the moderator, dominant personality types will take over the discussion, and passive personality types will find themselves completely shut out of open exchanges.
Costing Government Outputs: An Assessment of Activity Based Costing
Dr. Veronica Hampson, University of Southern Queensland, Australia
Professor Peter Best, Griffith University, Queensland, Australia
Professor Marie Kavanagh, University of Southern Queensland, Australia
This research investigates the application of activity-based costing (ABC) practices for achieving an outcomes based performance management (OBPM) in an Australian State Government. The extent to which this approach is adopted and applied by the case study agency is examined. A mixed-method research approach was used, incorporating document analysis and case study interviews, to assess the effectiveness of implementation of ABC in the agency. Concerns are raised about the degree to which ABC is adequate, in the current state of implementation, for enabling the agency to know whether or not it is measuring the true costs of the outputs that contribute to the long term outcomes desired by the Government. Traditionally, public sector managers have not been concerned with issues such as costing of services because data of this type was rarely requested. The traditional public sector financial management platform gave a vertical view of each agency: a view that focused on departmental blocks of expenditure. This meant that agencies reported only on the resources consumed by work units within the agency. For accountability purposes, managers were held responsible for deviations between actual and budgeted expenditure. The gathering of costing data was rarely considered as was the idea of demonstrating an agency’s contribution to the achievement of cost effectiveness and/or cost efficiency of its services (Foltin, 1999: p 45). It is said that “necessity is the mother of invention”1 and there is a sense of urgency by government in placing a much greater emphasis on holding managers accountable for both the efficiency and effectiveness by which they achieve their program objectives. Indeed, the emphasis is to gather performance data, including costs, about the services delivered by agencies in order to better inform resource allocation decisions. This is the essence of outcomes based performance management (OBPM). The OBPM process is best described as a comprehensive and integrative planning, budgeting and performance management approach that identifies the outcomes that the Government desires for its communities and citizens; sets strategic direction and objectives; and decides on appropriate delivery options that support expected performance (Treasury Department, 1998: p 5). The key ingredients of an OBPM framework are the relationships of the costs of government programs to resources, and the achievement of an approved plan (Pitsvada & LoStracco, 2002). The application of activity based costing (ABC) is a critical success factor in meeting these requirements (Cunningham & Harris, 2000). The aim of this research is to investigate the application of ABC in an Australian State Government for calculating the cost of products and services delivered by agencies and for assessing the efficiency and effectiveness in delivery of these services. Given that ABC is the recommended costing approach for such purposes within the State public sector, the extent to which this approach is adopted and applied by the case study agency is examined. The aim of this research is to understand whether there is a difference between ABC-in-use and intended-ABC. Literature in this area has tended to fall into a number of categories: (i) identification, measurement and analyses of costs associated with producing products or services (Greasley, 2001); (ii) the comparisons of the traditional costing approaches and contemporary ABC method (Kaplan, 1985); and, (iii) the potential benefits and possible reasons for failure of ABC implementations (Pierce & Brown, 2006). Much of the research surrounding costing methodologies, particularly ABC, has been conducted in the private sector and primarily in the manufacturing industry (Cooper & Kaplan, 1987). While there are a number of studies conducted in the services sector (Goddard & Ooi, 1998) there is a limited number that examine costing approaches within a public sector environment. These studies are of importance to this research because they provide detail of the models that may be appropriate for calculating the cost of products and services delivered by public sector agencies. Furthermore, they contribute to an enhanced understanding of how costing data may assist agencies in assessing the efficiency and effectiveness of their service delivery.
Theory of Constraints Thinking Processes: A Copy Shop Case Application
Dr. Tony Polito and Dr. Margaret M. Capen, East Carolina University, Greenville NC
This paper illustrates an application of a portion of Eliyahu M. Goldratt's Thinking Processes, a set of tools that are part of his Theory of Constraints body of knowledge, by using them to examine the operational problems encountered by a local franchise unit of a large copy shop chain and to posit solutions. The problems noted by the local franchise unit were mapped into a Current Reality Tree, a diagramming process used to reveal the singular root cause of observed problems. That diagram deduced the problems were caused by the fact that the local unit had not embraced the corporation’s recent repositioning strategy into its own activities, decisions and requests. The root cause was then, in turn, used as the basis to create an Evaporating Cloud, a diagramming process that reveals the logical conflicts interfering with root cause removal. The Evaporating Cloud deduced that the local franchise unit had not embraced the repositioning strategy because it believed that if it did so, the division of its resources would cause it to achieve neither short‑term goals nor the repositioning strategy. An Evaporating Cloud also facilitates the generation of possible actions to resolve the conflicts and it was used to do so. Several secondary recommendations for improvement in efficiency were also made, based on the direct observation of routine operations while collecting the requisite information to conduct the Thinking Process analysis. 1984, Eli Goldratt first published his perennial best-selling “business novel” titled The Goal. In it, he argues that operational problems can best be solved by a cycle of continually identifying and resolving system bottlenecks, a philosophy he titled The Theory of Constraints. The Goal underwent a major revision in 1992. Shortly thereafter, Goldratt extended his development of the Theory of Constraints by creating a structured approach to the identifying and solving of the causes of systemic operational problems. He first presented his set of tools for doing so in his 1994 book It’s Not Luck, calling them Thinking Process Tools. These tools rely upon the problem‑solver carefully constructing intricate diagrams that illustrate the causalities of the various events and facts surrounding the operational problems. These diagrams include a Current Reality Tree that illustrates the present state of the system, an Evaporating Cloud that illustrates the inherent conflict within the system that is preventing solving of the problem and The Future Reality Tree that illustrates the expected state of the system once the solution is implemented. Other tools include the Prerequisite Tree, the Transition Tree and the Negative Branch Reservations diagram. These tools have much in common with other popular root-cause analysis techniques such as Ishikawa Diagrams and “The Five Whys.” Over the years, the Theory of Constraints and Thinking Process Tools have gained increasing popularity with practitioners. While there are readily-available “textbook” examples of how these tools work, there is far less availability of examples of actual application in practice. This case indeed presents an actual application of certain Thinking Process Tools at a local unit of a copy shop chain, in an effort to recommend specific actions for resolving its stated operational problems. Paul’s Copy Shops (disguised), at the timing of this case, was a closely-held corporation in operation for twenty years, primarily comprised of a large number of American franchise units. Typically, the local franchise units targeted retail customers, especially university students and faculty; many franchises are intentionally proximate to large university campuses toward that purpose. As such, many units provided 24-hour photocopy and publishing services. Historically, corporate management practices had been highly decentralized in nature, with local unit management responsible for its own customer identification, pricing strategies and financial objectives.
Perceptions of Consummate Love: The Effect of Love Industry on the Economy
Dr. Z. S. Andrew Demirdjian, California State University, Long Beach
Dr. Zara Mokatsian, Director, Near East Museum
Although one often hears the refrain that “love makes the world go around,” little does the average person know about its many facets and its inner processes. Only recently the field of psychology has begun to scientifically study this vital area which is germane to all humans of all ages, genders, and walks of life. Love is a complex phenomenon, encompassing friendship, passion, intimacy, and commitment including sex. Often, the topic has been shelved as mysterious beyond human comprehension. Recent research has also shed some light on the brain circuits in the hypothalamus involved in controlling sex and love. Romantic love, which brings couples together, and maternal love, which binds mother and child, also has survival value. Not only love has essential survival value for the individual, but that it has the major function for the perpetuation of the species and the preservation of a nation. The kaleidoscope of love runs the gamut of brotherly love, carnal love, filial love, and even homosexual love. None of these specific kinds of love are treated here. In this study we focus on consummate love, the passionate love between a man and a woman who have established in their relationship intimacy and commitment. At one time or another, virtually all of us have been involved with at least one of the different types of love, yet one takes it for granted such a valuable conception of love that one would know all about it when one is smitten by it. Anecdotally, the prevailing attitude is that women seem to know more about the modern conception of love than men do. Men are more preoccupied with sex and that women are rather sticklers for love. A survey study was conducted to determine, therefore, the differential perceptions of the dynamics of love based on gender. A sample of 460 male and female respondents provided the data necessary to test four hypotheses through an SPSS statistical program. Poets, philosophers, religious leaders, wise men, and self-proclaimed lovers have all searched throughout the ages for a mastery of love. Mastery may never be achieved but an appreciable degree of understanding may be possible. Love is one of the most powerful forces underpinning humankind’s daily life and yet hardly it has been objectively and scientifically studied. For ages, love has been shrouded in mystery, embedded in folklore, proliferated in literature, and exploited by religious leaders. Every conceivable culture around the globe has woven tales and talismans about love and has made authoritative recommendations. Some five thousand years ago, the Babylonians have made specific rules governing love and marriage. The largest number of laws in the Code of Hammurabi was dedicated to marriage and family. For example, if a wife were caught committing adultery was pitched into the river. Historically, the topic of love and sex, being a taboo subject for Christians and Moslems alike, had only received the attention of the so-called love experts who had based their conclusions on mere hunches, non-empirical research observations, and personal experiences. The archetypical example is Ovid as he narrates his observations in a long book called the Art of Love. Most of his advice for hunting down “Eve” has been questioned, though, in modern times. Today’s women are highly well-educated, rather sophisticated and won’t fall into the snare of the male charlatan or the sweet talker. After a brief historical perspective, the effects of love industry on the economy during hard times is introduced, then the tripartite theory of love is discussed, followed by the statement of four hypotheses and the mythology to gather the data needed to answer them. The development of three new scales for measuring the perceptions of the various components of love is presented. Finally, the analysis and interpretation of the collected data are presented with a brief conclusion.
Perceptions of Instructors and Students with Respect to Synchronous Video Learning
Dr. John Griffith, Embry-Riddle Aeronautical University
Dr. Marian C. Schultz, The University of West Florida
This research examined student and instructor perceptions on preference and perceived effectiveness of a university’s synchronous video learning based course delivery system. Instructors and students responded to surveys that asked if four learning modes (Classroom, Synchronous Classroom, Synchronous Home and Online) were equivalent. They were asked mode (modality) preference, effective in using Synchronous technology, if blending online components to a classroom course benefitted the learning experience, and if Veteran’s Affairs (VA) students chose class offerings based on reimbursement differences. The study found that respondents did not perceive mode to be equivalent, and indicated a preference for classroom instruction followed by Online, EV Home and EV Classroom. Both instructors and students indicated that instructors were confident/competent using Synchronous equipment and VA students indicated differences in reimbursement impacted their choice of learning mode chosen. Students who had taken a Synchronous class indicated that Home was their second most preferred method of learning. Recommendations included future research to evaluate the differences in student performance among the four modes of learning. Distance learning has been a part of the educational landscape since the 1700s (Harting & Erthal, 2005). It has helped to solve the issue of providing instruction at a time and place convenient for students. From correspondence courses to online instruction and video synchronous learning, universities have attempted to meet students’ desires to improve their lives through education. As technology continues to progress, educators will explore newer methods of instruction, as evidenced by a Chinese study on course delivery via cell phones which involved 26,000 students (Ullrich, Shen, Tong & Tan, 2010). However, the quality of learning and instruction, as well as, instructor/student interaction has always been a concern with these types of learning methods (Johnson, 2013). As noted by Guzley, Avanzino, & Bor (2001), interaction between instructors and students is key to the learning process. Because of its growth over the past decade, the focus of this research was concerned with video synchronous learning delivered over the Internet using personal computers. Video synchronous learning is a type of e-learning that allows instructors and students to interact in real time videoconferencing using the internet and personal computers equipped with a camera, speakers and microphones (or headsets) to support the learning environment. It differs from asynchronous learning which is usually an online course with discussion boards and course content that students can access and complete as their schedule permits. Many students take online courses because they are asynchronous, allowing flexible access and collaboration with other students as well as the instructor (Hrastinski, 2008). Just as some students desire flexibility, other students prefer the real-time interaction with instructors and fellow students that video synchronous learning provides (Moridani, 2007). Numerous universities deliver courses in real time utilizing web cams and headsets delivered via the Internet (Foreman & Jenkins, 2005). Embry-Riddle Aeronautical University (ERAU) utilizes the “EagleVision” synchronous video learning course delivery modality. The purpose of this research was to attempt to determine students’ and instructors’ perceptions in regard to course delivery preference (traditional classroom versus synchronous video learning), perceived instructor competence with internet course delivery systems, and perceived learning effectiveness of synchronous video learning when compared to traditional classroom settings. The significance of the research was to determine student preference between the various modalities of instruction, and if the perceived instructor competence with the technological tools used to deliver these types of courses is viewed as a benefit to the learning experience. Another area addressed is financial factors affecting students’ choice between learning modes. The primary question in this study related to whether students learn as well in an e-learning environment (both synchronous and asynchronous) as they do in a classroom. A meta-analysis by Lou, Bernard and Abrami (2006) reviewed 103 studies examining undergraduate performance to determine whether the course delivery method influenced learning outcomes. The meta-analysis indicated no degradation in student completion of learning outcomes when comparing classroom instruction to synchronous and asynchronous modes. The authors noted that although asynchronous learning places more responsibility on the student to self-regulate to ensure successful completion of courses, it offers them more flexibility. Instructor-directed synchronous video learning provided an environment that is similar to the classroom environment, allowing immediate feedback, both verbal and non-verbal.
Online Tax Education: A Comparison of Student Performance
Dr. Stephen Gara, Drake University, Des Moines, IA
Online education has grown tremendously over the past 20 years. Approximately a third of U.S. college students enroll in at least one online course during their program. However, the effectiveness of this mode of delivery is still unsettled. The results are mixed with respect to student performance in online courses versus traditional face-to-face instruction. This study examines online student performance in an upper-level undergraduate taxation course. A comparison reveals that online students exhibited stronger performance than their traditional face-to-facer peers. Additionally, experience preparing a one’s own tax return is identified as a contributing factor to success in both online and traditional courses. Distance education has exploded over the past decade. Online enrollments have increased over 120 percent (USDOE, 2009). According to the Chronicle of Higher Education (2011) online enrollment in the United States exceeded two million students in 2009, more than doubling in size from 2004. Allen and Seaman (2010) report that the number of students enrolled in at least one online course increased from 1.6 million in 2002 to over 5.5 million in 2009 (approximately 30 percent enrolled students nationally). Growth is not only seen in increased students, but also in increased course offerings. The US Department of Education reported that over 50 percent of higher education institutions offered distance education courses in 2000 (USDOE, 2003). Moreover, over 50 AACSB accredited business schools offer an online graduate degree program, with over 200 accredited accounting programs offering at least one online course (Bryant et al, 2005). The trend towards increased distance education is not limited to the United States. Online and other distance education programs are being offered globally (Love and Fry, 2006). Distance education, as the term is used, is very expansive and includes any form of instructional delivery that separates the student from the instructor. The concept of distance education originated, in the United States, in the late 19th century with the Pennsylvania State University’s utilization of correspondence courses to deliver instruction to rural students. The concept of distance education has expanded through the years to include online, prerecorded media (i.e., CD’s or DVD’s), and interactive television (ITV) (Gara, 2003). Even this categorization of distance education is ambiguous, as distance education may involve elements of multiple channels (i.e., an ITV delivered course may include an online presence). Furthermore, even traditional face-to-face delivery may include a distance education component (i.e., use of prerecorded lectures). This combination of distance education and traditional delivery is known as blended learning. Despite the existence of various forms of distance education, the fastest growing and most dominant channel is online (Saunders, 2004). There are a number of benefits associated with online course delivery, many of which have contributed to its rapid growth. The largest contributing factor is the growth in technology. This growth has increased students’ access to the online environment, while also expanding the tools available to instructors for delivering course content online.
Identifying the Goal Structures of Undergraduate Students Vis-à-vis Ethical Decision Making
Dr. Steven A. Taylor, Dr. Woojung Chang, Dr. Chiharu Ishida, Leyla Orudzheva, and Aaron Barton
Illinois State University, Normal, IL
Segal et al. (2013) present evidence that a problem appears to be emerging in that attitudes of university students toward business ethics appear to be changing in arguably undesirable ways. An argument is presented for increased efforts to bring judgment and decision-making and social psychological theory and practice to bear on this issue in order to assist in pedagogical efforts to strengthen college students’ underlying cognitive goal-related value structures. A qualitative method is demonstrated that operationalizes these goal-related value structures. The implications for stakeholders of business colleges are discussed. The nature of what “should” be taught in university education continues to be debated (e.g., Parker and Pearson 2013). However, one area of apparent agreement across stakeholders of business education worldwide is the importance of ethics as part of business curricula. Franks and Spalding (2013) assert that the importance of addressing business ethics in academic curricula cannot be overstated, as evidenced by its emphasis in the requirements of arguably the two most important international accrediting organizations of business and management schools -- the Association to Advance Collegiate Schools of Business (AACSB) and the Accreditation Council for Business Schools & Programs (ACBSP). Unfortunately, Segal et al. (2013) present evidence that a problem appears to be emerging in that attitudes of university students toward business ethics appear to be changing in arguably undesirable ways. These authors specifically find that business students from the United States are becoming increasingly tolerant of clearly illegal behaviors from a broad array of business situations (also see Ibrahim 2012). In truth, the evidence is mixed as to the scope of this identified problem. Lau et al. (2012) alternatively present evidence that college students perceive ethics instruction and their teachers to be relevant and beneficial in shaping their own ethical behaviors. Dzuranin et al. (2013) present an argument that a program specifically designed to build ethical leaders as part of a business education purportedly enhances students’ ability to recognize issues and identify appropriate decision alternatives. A better understanding of the processes and influences affecting students’ ethical decision-making processes is therefore an area of inquiry that clearly merits greater consideration. Fortunately, emerging models of social psychological decision making suggest that there exists the potential to influence students’ ethical decision-making processes. The remainder of this paper is divided into several sections. First, a brief review of the current state of ethical decision making is articulated. The review emphasizes the importance of attitudes-based explanations of judgment and decision making (J/DM) and subsequent behaviors. Second, we suggest approaching these issues by merging attitude-based research with emerging values-based research (e.g., Bagozzi et al. 2013). Third, we demonstrate an emerging qualitative techniques that identifies the underlying goal and value structures of college students. Fourth, we report the results of our inquiry. Finally we discuss the implications of our findings. The current study embraces a marketing perspective consistent with the ethical implications associated with so many marketing issues in business practice (e.g., sales behaviors, advertising targeting, consumer privacy, etc.).
Skills of Marriage Immigrants in Korea
Dr. Namchul Lee, Senior Research Fellow, Korea Research Institute for Vocational Education & Training
The purpose of the research is to explore policies to develop and apply human resources of female marriage immigrants in Korea. This paper carried out literature reviews and a survey on the current state of female marriage immigrants. In the survey, a total of 1,005 questionnaires were sent to 201 support centers for multi-cultural families, 5 questionnaires to each center and 203 replies from 31 centers were collected, which accounts for the return rate of 20.2 percent. The paper conducted analyses on demographic characteristics, residential characteristics, economic characteristics, the current state of economic activities, future job characteristics, experiences with skills development training programs, the desired job-related vocational training programs, and needs for relevant political support of vocational training programs. With the advent of multicultural society in Korea, a number of services targeting marriage immigrants have been introduced with participation from the central government, local governments, public institutions and various non-governmental organizations (NGOs) and they are growing in quantity. Nevertheless, there are limits to satisfying all the needs of female marriage immigrants. The issues and matters associated with female marriage immigrants are not simply personal or confined to concerned families but they are of national and social responsibility. It is mainly because the problems relating to female marriage immigrants and their children in terms of social adjustment, children’s education, and homes tend have a considerable impact on Korean society. Female marriage immigrants need to be accepted as members of the Korean society. And the legislative and institutional systems need to be improved to make human resource the foundation of Korea’s national development. On-going efforts need to be made to ensure that policy recommendations and proposals are actively carried out. This paper is organized as follows. Section Ⅱ explores the economic and population characteristics of female marriage immigrants. Section Ⅲ analyzes the current state of human resources development of female marriage immigrants. Section Ⅳ presents conclusions in this paper. Social integration connotes progressive harmonization in diversity and is not easy to complete. The typical trouble obstructing social integration includes ideological, regional, generational, hierarchical conflicts and confusion. Recently issues to complete social cohesion of marriage immigrants has become important in Korea. Considering whether marriage immigrants settle successfully is a key measure to indicate that Korean society becomes the multicultural society; there is the need for a radical change in the point of view of human resources development and application. The provision of supplemental, remedial education for marriage immigrants is required so that they can adjust and live in a society much different from their counties’ society because they are now strangers in Korean society. However, policies for human resources development and application support of marriage immigrants, which should be out of understanding that they are people who have human capital and human competence much different from Koreans, need to be developed. The government offers Korean language education, a translation and interpretation support business, and a social integration program for human resources development of marriage immigrants. A social integration program that has been run in the Ministry of Justice in charge of an immigration policy has Korean language courses and the Ministry of Education Science and Technology and the Ministry of Gender Equality Family has been running a variety of policy programs for marriage immigrants’ children as well as human resources development policies for marriage immigrants. There are 220,687 marriage immigrants who are residing in Korea; they account for 15.6 percent of the total 1,409,577 foreign residents (Ministry of Public Administration and Security, 2012). With the current trend for the number of marriage immigrants to Korea increasing every year, a human resources’ development policy of marriage immigrants is a very important issue in respect of the possibility of an effective utilization of the country’s human resources, as well as the adaptation for the settlement of their descendants. Practical and systematic research on how we will carry through human resources’ development of marriage immigrants is needed.
Institutional Self-Regulation and the Financial System Inquiry: Current Approaches and Future Trends
Carlo Soliman, BA LLM, Senior Lawyer, Notary Public, Part-time Academic TOP Education Institute New South Wales and Victoria University Sydney
As the effects of the Global Financial Crisis (GFC) remain pervasive across global economies what emerges is that regulation per se is not a solution for the problems encountered by the financial and banking sector in recent times. Self-regulation has been a stable feature of the financial services landscape for a considerable period and, in the time following the Financial System Inquiry (FSI), its central function has been to provide assistance to the Australian Government in the development and enforcement of its legislative agenda. However, despite the increasingly important role of self-regulation, comparatively little is written about its effectiveness. In addition, how the concept is defined has also been overlooked. This article provides an overview of the various forms of self-regulation and suggests a framework with which to understand the definitional complexity of self-regulation in the present financial and banking environment. The recently announced inquiry into the Australian financial services industry provides an appropriate backdrop with which to consider and discuss the future of institutional self-regulation in the context of the modern Australian economy. In the decades following the Financial System Inquiry (FSI) (2), the Wallis Report (3) and more recently in the wake of the Global Financial Crisis (GFC), regulation has gained prominence as Governments across the world struggle to promote and maintain efficient and well managed financial markets. A strong regulatory framework is often credited with increasing accountability, transparency and the promotion of investor protection and prudential control. This is, at least in theory, designed to reduce the adverse impact of corporate failures on individuals, businesses and the broader economy. Australia has a twin peaks regulatory model whereby two agencies, namely, the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA), oversee the financial markets and banking sector. Other agencies also contribute to the regulatory environment such as the Australian Taxation Office and the Australian Federal Police. Whilst a discussion of the effectiveness of these agencies is beyond the scope of this paper, what remains clear is that some form of regulation will always be necessary in any sophisticated economy. However, corporate collapses, such as that of Ansett, HIH Insurance and One Tel in the late 1990’s and early part of 2000 and the more recent aftermath of the GFC, demonstrate that regulation alone is not a panacea to the prevention of corporate failures and financial market instability. It is the contention of this paper that self-regulation has an important part to play in the promotion and maintenance of a robust economy. The challenge now faced by Governments is to integrate self-regulatory schemes into the legislative framework and to encourage their acceptance and adoption by the banking and financial services industry. This is particularly difficult given the number and diversity of participants in the financial services sector and the monumental attitudinal shift that this entails. Any analysis of the effectiveness of self-regulation will largely depend on how the concept is defined. Terms such as self-regulation, co-regulation and voluntary regulation are commonly used. However, a uniformly applicable definition is unlikely to be useful in an increasingly complex and diverse banking and financial services industry, whose participants are as diverse as their financial products are broad. It is also important to point out that the concept of self-regulation does not mean limited or no regulation nor should self-regulation be viewed as a soft alternative to statutory intervention. However, for the purposes of this paper, self-regulation is conceptualised as involving significant input from the banking and financial services industry into the development and implementation of legislation, codes of practice and industry guidelines. Interestingly, a similar definition was formulated by ASIC more than 10 years ago.(4) It is submitted that such definition represents a starting point, which will provide a platform to guide the banking and financial services industry to develop and refine more specific definitions as well as encourage further academic discourse in this area. The various forms of self-regulation include consultation, supervision and dispute resolution. Some of the agencies that administer the current self-regulatory schemes, such as the Australian Bankers’ Association (ABA), are mainly industry-based organisations that contribute to Government policy through the development and implementation of legislation.
The Moderating Effect of Business Organization Characteristics between the Entrepreneurial Orientation of Small and Medium Enterprises and Firm Growth: Small and Medium Enterprises in Taiwan
Dr. Xiu E. Zhang and Pei-Hua Chin, Jilin University, Jilin Province, P.R.C.
One of the most commonly discussed questions is how small and medium enterprises (SME) maintain innovative abilities after the difficult entrepreneurial period and manage to develop as companies. This study constructed a theoretical model for the moderating effect of business organizational characteristics between the entrepreneurial orientation of SMEs and firm growth. SMEs in the highly entrepreneurial environment of Taiwan were selected as the research object and regression analysis was conducted to analyze the correlations between these 3 variables. The results indicated that the moderating effect of business organizational characteristics enable the entrepreneurial orientation of SMEs to be maximized, thereby promoting firm growth. Small and medium enterprises (SMEs) are the foundation of the national economy. The robustness of these enterprises not only reflects a country’s development, but also provides numerous employment opportunities. Therefore, countries worldwide endeavor to create a friendly business environment for SMEs by devising increased incentives. Taiwan is small. The geographical island environment and scant natural resources have resulted in a special style of industry. In 1949, the economy was primarily based on a domestic system. Subsequently, Taiwan’s economy was connected to the international market because of the low labor cost and the assistance of international traders. Numerous enterprises devoted a substantial amount of effort and grew into well-known multinational corporations. Valuable studies have been completed by numerous scholars on SMEs. How do SMEs in Taiwan become sustainable companies, develop core competitiveness, and adapt to changing times and circumstances is worthy of exploration from various perspectives. The concept of entrepreneurial orientation originated from the strategic decision making model in the field of strategic management. Lumpkin and Dess (1997) stated that entrepreneurial orientation comprises decision-making activities, processes, and practical affairs that are adopted by a firm to undertake new entry. Covin and Slevin (1991) described entrepreneurial orientation as a posture. Research on entrepreneurial orientation initially focused on individual entrepreneurs. Stopford and Baned-Fuller (1994) indicated that entrepreneurial orientation was divided into three levels: personal, organizational, and industrial. Entrepreneurial orientation is diffused among these levels and is not limited to a single level. Miller (1983) suggested three dimensions for entrepreneurial orientation: innovativeness, risk-taking, and proactiveness. This study measured entrepreneurial orientation by considering only innovativeness, risk-taking, and proactiveness and this study followed. Modern concepts in business management stress that quality and quantity should both be emphasized to achieve healthy firm growth. In 1959, Edith Penrose published "The Theory of the Growth of the Firm", in which she established the theoretical basis for the modern concepts of firm growth. In her opinion, the resources owned by an enterprise exert significant effects on firm growth. Covin and Slevin (1991) indicated that business performance should involve two dimensions (i.e., growth and profitability), and criteria, such as sales growth rate, return on assets, and profit rate. Ireland, Reutzel, and Webb (2005) suggested that the growth and financial performance of a firm are complementary. Therefore, we estimated firm growth from growth and financial data. Most studies have indicated a significant positive correlation between entrepreneurial orientation and growth of SMEs (Hu, Zhang, & Yang, 2010). However, several scholars have obtained different results.
Determinants of Saudis’ Desire To Purchase: A Field Study
Dr. Hussein Abdulla El-Omari
King Tala School of Business & Technology, Princess, Sumaya University for Technology, Amman, Jordan
Studies of consumers help firms and organizations improve their marketing strategies by understanding issues such as how: (a)The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products); (b)The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media); (c)The behavior of consumers while shopping or making other marketing decisions; (d) Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome; (e)How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and (f)How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer. The primary objective of this study was to investigate the main determinants of Saudis’ desire for purchasing. To do so, this study was based on a survey of 1286 households, randomly selected, living in the eastern province of Saudi Arabia. The survey was designed to evaluate income and other elements that could play an important role in affecting the overall desire for purchasing their needs. Results from the survey show that virtually all the socioeconomic and attitudinal variables are important in explaining the main determinants of Saudis’ desire to purchase. Overall, 68% of surveyed Saudis households have indicated the importance of “desire to purchase” as opposed to their’ “financial status”. In recent years, the main determinants of Saudis’ desire for purchasing have become a mainstream business focus in various sectors such as automobile, Real estate, Wholesale and retail trade; and all other companies of different economic activities in Saudi Arabia. The buzzing alert, coming from academic perspective as well as industrialists’ conscious, indicates that businesses have to thoroughly understand this subject of Saudis’ buying behaviors. This empirical study is the first in its own merits that attempts to address this subject in Saudi Arabia. This study did not look into this subject with regard to a specific product, and no attempt was made to study this subject with regard to the business buyer. Those issues are left for future studies. This research is divided into five parts. The first part is a review of the literature and based on the synthesis of literature, this study identifies many elements that must be investigated to understand Saudis’ desire for purchasing. The second section explains the study problem the methodology used in developing the questionnaire and gathering of the required data, while the third section presents the analysis of the data and discusses the results. The conclusions and references are included in the last two sections. In economics, demand is an economic principle that describes a consumer's desire and ability to pay a price for a specific good or service. Demand refers to how much (quantity) of a product or service is desired by buyers. The quantity demanded is the amount of a product people are willing to buy at a certain price; the relationship between price and quantity demanded is known as the demand relationship. The term demand signifies the ability or the desire to purchase a particular commodity at a given point of time. However, researchers have argued that consumers’ discretionary demand is a function of both ability to buy-primarily income- and desire to buy.
Concept Design of a Management Tool for Measurement of Consumer Value Added Assessment of Innovation Based Strategies
Dr. Pawel Filipowicz, AGH University of Science and Technology, Poland
Innovation based strategies, because they provide opportunities for creation of new markets based around innovative and strongly differentiated products or services, are an interesting growth alternative for companies wishing to develop competitive advantage in an unconventional manner. On the other hand, developing and introducing strongly differentiated products or services carries an inherent risk of introduction failure directly related to the perceived value, from a potential customer perspective, of the new products or services. This risk underlines the importance of active participation by potential customers in new technology development processes and thus, the need for management tools assessing the degree to which potential customers actively participate in the development process. This paper presents a conceptual framework describing one such tool and, based on the framework, a potential application which can support the development of differentiation strategies based on technology innovation. Market introduction of technologically innovative products or services is based around a desire to create offerings with superior customer value. In the advanced technologies sector, this implies a multi-level perspective on value creation because the product or service being introduced in effect, becomes a driver for company growth. In this context, value creation implies satisfying all the company’s stake-holders. This becomes extremely difficult when various groups of stakeholders have differing, sometimes contradictory, value expectations with regard to the new product or service. In technologically intensive environments, value creation is based on a strict understanding of how potential customers will perceive new products or services and understanding this is critical for achieving success in innovation driven markets. Efficient value creation processes can form part of a company’s strategy formulation, especially as they have to be setup before market introduction of new products or services. This is underlined in the case of companies operating in innovative, technology driven markets, where the constant pressure to create new value propositions, based solely on the opinion of potential customers and without the possibility of verification against competitive products or services, causes difficulties to arise in identifying and capturing value during product or service conceptualization. Thus, in market introductions of technology based innovative products or services, an emphasis is often placed during the operationalization stage on delivery of customer value through a new communication vision. In the case of new technology based products or services a cost based competitive comparison is normally insufficient. Thus, another consequence of this lack of verification against competitive products or services are revisions in the ways that customer value is defined in the products or services being developed. Another factor is that, quite often, value as perceived by customers is the result of a comparative and summation process between various products and services resulting in a positioning based on assessment of relative value. This places a requirement on companies wishing to develop technologically innovative products or services to understand the value positioning process from a customer perspective and then, by incorporating appropriate mechanisms in the development process, analyzing the results in their development strategies. Assimilation of a customer perspective on the relative value positioning process thus becomes an important step in a company’s strategy formulation influencing technology process development. This customer perceived value creation process has to be defined and then divided into segments to provide a diagnostic tool which can usefully assist managers create new superior value technology based products or services by including customer participation in the development process. This enables the management process to focus more on increasing perceived benefits from a customer perspective rather than on reducing perceived weaknesses. The use of such a tool will allow company decision makers to analyze the nature of individual customer perceptions enabling them to define concrete marketing strategies as a result minimizing the risk of innovation based product market failure. In effect, the approach proposed can be regarded as complementing conventional product or service development focusing specifically on successful market introduction which, in the case of identification of new technologies, can lead to new business concepts.
Establishing Hospitals’ Core Competencies with Six Sigma Practices in the ASEAN Economic Community (AEC)
Pareeyawadee Ponanake, King Mongkut’s Institute of Technology Ladkrabang, Thailand
This research aimed to study 1) the core competencies of private Thai hospitals as medical care centers entering the ASEAN Economic Community and 2) conduct the structural equation modeling of the influences of Six Sigma practices for establishing hospitals’ core competencies in the ASEAN economic community (AEC). The sample group for the research comprised 384 HA officers. The research was conducted from December 2012 to August 2013, and the research method used was purposive sampling through questionnaires. Statistical data analysis was performed using percentages, means, standard deviations, factor analysis and the structural equation modeling (SEM) technique. The research found that 1) the core competencies of private Thai hospitals as medical care centers entering the ASEAN Economic Community was at a high level of efficiency, and 2) that the Six Sigma practices directly influenced the core competencies of hospitals entering the AEC. Internal quality management directly influenced hospitals’ core competencies in entering the AEC. The Six Sigma practices directly influenced internal quality management and indirectly influenced the core competencies of hospitals entering the AEC through quality management. Current strategies in the service industry are focused on cost reduction, productivity improvement, cycle time reduction, defect reduction, inventory reduction, and increase workforce or work stations, among others. Since these are continuous operations, Six Sigma has become the prototype of the quality concept (Russell & Taylor, 2011). Six Sigma utilizes the popular concept of quality management (T. N. Goh, 2010). Six Sigma has been an efficient successful tool for reducing defects and increasing productivity. However, the service industry differs from manufacturing; in the service industry, the application of Six Sigma results in advantages and limitations according to the kind of service. Hence, the service industry field that most extensively use Six Sigma in their operations are healthcare and banking (Mohammad Abdolshah et al., 2009). Six Sigma is an extensive and resilient system for success in business that focuses on customer satisfaction through facts and data, applying statistical data analysis in management (Verma & Boyer, 2009).Six Sigma has been developed and separated into many types (Tennant, 2002). Also, Lean Sigma links the two concepts of Lean and Six Sigma. Thus, Lean Sigma refers to process improvement and the delivery of value to the customer (Russell & Taylor, 2011). Lean Sigma has become as popular as the Taguchi method (Lee, 2001; Schrage, 2001; Morris, 2006; Mika, 2006). Six Sigma tool analysis has been applied in quality improvement programs for many years, and Six Sigma has also been integrated as a tool for overall management systems. The statistical tools used in quality management include Flowcharts, Run Charts, Pareto Charts, Histograms, Check Sheets, Cause and Effect Diagrams and Control Charts (Swink et al., 2011). The officer or operator on the Six Sigma project team would be called a green belt; such an individual would be trained regarding Six Sigma development, statistical tools and quality improvement techniques. All officers in an organization are involved in the responsibilities of quality, quality attracting and Six Sigma knowledge (Russell & Taylor, 2011). The current healthcare business in Thailand is accepted by foreigners as providing good service, taking good care of visitors, and providing high-quality medical care, modern technology and high-quality medical personnel and other personnel (Department of Export Promotion, 2012). Thailand has a great advantage among ASEAN countries in medical, health and beauty care, including aging care, which is the greatest attraction for of foreign patients to seek these services in Asia (Export-Import Bank of Thailand, 2012). According to the integration of the nations of the ASEAN Economic Community (AEC) will lead to a single market and production base that affects to the movement of five business sectors: goods, services, investments, skilled labor and funds. The integration of the AEC will help create a competitive in service industry (Department of Industrial Promotion, 2012). The competitive advantages of the Thai healthcare business are the concentration of specific marketing targets, the high quality of nursing and the biggest hospitals in Asia, Bangkok Hospital and Bumrungrad Hospital (the first hospital certified by ISO 9001 and JCI accredited). Thus, the researcher has the requirement to study the Six Sigma practices in order to establish the capacity of Thai private hospitals to be the medical care center of the AEC by reducing the variation in processes for customer satisfaction establishment. This research will be the guideline for preparing Thai private hospitals in the AEC to be healthcare centers.
Investigating of Online-Shopping from Customers Perspective: A Case Study from Saudi Arabia Riyadh
Aftab Alam Khan, King Saud University, Kingdom of Saudi Arabia
The main purpose of this study research to identify the issues and influences to encourage the customers in Saudi Arabia through on online-shopping, this research is conduct with the help of online services using the statement of primary data; This Research Data are collected from online customer’s services and online customers specially are focused in Riyadh city. The study findings suggest the age; education; gender; employment status and quality important of Internet connection are used for online-shopping. Despite these awareness of the online purchases and its benefits, the social influence of modern technology and perceived ease of adoption of online shopping, the Saudi Arabia society have a significant impact on the attitude towards the probability of adoption of online banking services. Implications of the results are discussed and suggestions for future research are presented. Good news for e-commerce companies, is that the 81 billion online retail sales $ in 2007 to 144 billion $ in 2012 to grow according to a study by Jupiter Research published. The challenge for online retailers comes from the fact that the majority of this growth of existing buyers more new buyers who will come after this year. Which means that your customers are always mature and demanding when it comes to what they expect of stores online. "Retailers can expect, on a more experienced population of online shoppers," said Jupiter Research Analyst Patti Freeman Evans. "Online retail matures, online shoppers have become smarter on the finding free shipping and deep discounts," said Freeman Evans, author of the U.S. online retail forecast, 2007 - 2012." Up to the year 2011 that the Internet uses 65 % in 2007 shop online compared to 71% of users. However, research indicates that online retailers will be harder, new converted non-buyers to find. Online retailers are more intense on existing to spend more online shoppers, because they have left in recent years. Of course, recommend that operations with inefficient e-commerce order processing in could be and satisfaction of the client for difficult times. The main themes of this research are to additional information on online shopping in Saudi Arabia and the aspects of manipulating the acceptance of clients from the experience of online shopping and the concept. Attitude towards the Internet tends to improve, as users become more experienced with computers and the Internet. Technological advances have increased the growing acceptance and use of computers and the Internet, the number of Internet users, and many people spend more time on the Internet. Price hardware and software fell the technology improves, competition between Internet service providers pushing the cost of access to Internet. These factors have a wider range of economic available Internet access classes. In addition the most broadband network provides faster connections and relieves the frustration of waiting for Web pages to download. Forrester Research estimates that more than 50 percent of Americans, access to Internet connections, with high speed households now. In addition, mobile technology now offers access to the Internet consumer during the absence of your computer. Knowledge of the Internet and computers to use, studies show that they know in other countries (hole et al. 2003) and the information of the computer has increased not only the United States, Europe and Japan, but throughout the world also. Due to the availability of the increasing use of computer technology is now marked computer knowledge at all levels of the education system in many countries. It is now clear that the Internet has become a global phenomenon that has many functions, and in particular for the creation of an international market. Studies have shown that those experience the lower perception of the website more satisfying and ultimately better on the website (Kim et al., 2003), buy (Kim and Stoel 2004) (Loiacono, 2000). For example using the five dimensions of the quality of the site (connectivity, quality of information and interactivity, playful and learn), explores how the quality of behavioral intention of shopping Web site in the shop concerned and recommend the page. The researchers found that the effect of specific dimensions to the quality of the website in terms of behavioral intentions of products. For services and products with the attributes, while buyers potential before you buy it (such as books, clothing and gifts), all five dimensions to predict the location meaning, the behavioral disorders to determine but not to the specific quality of the clients for products or services with the attributes of this unknown, until the purchase and prior to the purchase (such as Travel and Hotels) were not on a behavioral intention
The Relationship between Timing Information and Stealth Trading in Option Markets
Dr. Han-Ching Huang and Dr. Pei-Shan Tung, Chung Yuan Christian University, Taiwan R.O.C.
This paper investigates the stealth trading in option markets before scheduled and unscheduled corporate announcements. We find that the medium-sized trades contribute more to the option price change than small-sized trades. It indicates that the impact of lower transaction costs due to the decimalization on the lower bound of size of stealth trades among options is minimal. The extent of stealth trading before scheduled announcements is larger than that before unscheduled announcements, while the extent of stealth trading after scheduled announcements is smaller than that after unscheduled announcements. This paper investigates stealth trading in option markets before scheduled and unscheduled corporate announcements. Extant studies have shown that investors with private information would tend to trade less before the information is fully revealed. Barclay and Warner (1993) found that if stock price movements are mainly caused by private information being revealed through the trades of investors and if privately informed traders concentrate their trades in certain sizes – not too small (which is too expensive in terms of trading costs) and not too large (which could give them away) – then most of a stock’s cumulative price change will take place on medium-sized trades. They labeled this joint hypothesis as the “stealth hypothesis”. The hypothesis is based on Kyle’s (1985) model, which posits that informed traders attempt to camouflage their information to earn more profit by spreading their trades over time. Following Barclay and Warner (1993), many studies have explored stealth trading in the stock market. Specifically, Anand and Chakravarty (2007) extended it to the option market. Nevertheless, other than Barclay and Warner’s (1993) focus on tender offers, the majority of the literature concentrates on a normal period with abnormally large price changes. According to Cao, Chen, and Griffin (2005), there are different magnitudes of informed trading between a normal period and a pre-announcement period with informational events. Thus, it is interesting to compare stealth trading in a normal period with that in an event period. Based on information-based stealth trading hypothesis proposed by Blau, Van Ness, and Van Ness (2009), when trading volume is lower, informed traders are more inclined to break up their trades to disguise their information. Similarly, following liquidity-based stealth trading hypothesis proposed by Lebedeva, Maug, and Schneider (2009), we can also infer that when trading volume is lower, the extent of stealth trading is also greater. In addition, Chae (2005) found that before scheduled announcements, discretionary liquidity traders would delay trading and the cumulative trading volume of liquidity traders would decrease. Further, Lei and Wang (2012) find that insider purchases are more profitable before unscheduled announcements than before scheduled ones. They suggest that insiders time their trades around scheduled and unscheduled announcements to exploit the varying extent of liquidity trading. Thus, we examine whether the timing information of corporate announcements affects stealth trading in option markets. Traditionally, informed traders engage in medium-sized trades since the trading costs of small trades are too expensive and large trades may reveal their information. Since transaction costs have decreased due to the decimalization, Hansch and Choe (2007), Hvidkjaer (2008), Blau et al. (2009), and Jain and McInish (2010) found that the lower bound of the size of stealth trades has declined. That is, small-sized trades contribute more to the price change than medium-sized trades during the decimalization period. Therefore, in this paper, the stealth trading is defined as trading in a size at which most of a stock’s cumulative price change would take place.According to Chae (2005), before scheduled announcements, discretionary liquidity traders would delay trading, but before unscheduled announcements, they would not time their trades.
Job Satisfaction and Employees’ Individual Characteristics
Dr. Danica Bakotic, University of Split, Faculty of Economics, Croatia
Job satisfaction is the employee’s general feeling about the job or the constellation of attitudes toward various aspects of the job. From this definition it is clear that this attitude is affected by the nature of the job which the employee performs as well as by the work environment where s/he works. However, these factors are not the only source of job satisfaction. Specifically, the employee’s individual characteristics are often a significant determinant of their job satisfaction. The aim of this paper is to analyze employees’ job satisfaction with regard to the following individual characteristics: gender, age and education. Empirical research was conducted on a sample of 4,430 employees. The research instrument was a questionnaire. The collected data were analyzed by the usual statistics methods, supported by the SPSS program. The results showed that there was a difference in job satisfaction between men and women. Namely, it was found that women were more satisfied at work than their male colleagues. Additionally, due to the employees’ age, the differences in job satisfaction were also detected. Specifically, cyclic movement of job satisfaction was discovered. This means that in some periods of employees’ life job satisfaction increased while in some period it fell, and in some it increased again. Furthermore, where the level of education was considered the results of this study showed the more educated employees were more satisfied at work. Numerous studies have dealt with the analysis of employees’ job satisfaction with respect to their individual characteristics. Concerning gender, the research results on the link between job satisfaction and employees’ gender were very inconsistent. In some cases, it was found that women were more satisfied at work than men (Bartol and Wortman, 1975; Murray and Atkinson, 1981; Hodson, 1989; Clark, 1996; Sloane and Williams, 1996). Other research suggested that men were more satisfied at work than women (Hulin and Smith, 1964; Weaver, 1974; Shapiro and Stern, 1975; Forgionne and Peeters, 1982; Jagacinski, 1987), demonstrated that identified differences were not significant. On the other hand, meta-analysis showed that the correlation between job satisfaction and gender was close to zero in dozens of studies on a sample of thousands of respondents (Brush et al., 1987, Witt and Nye, 1992), so it could be concluded that men and women expressed the same level of job satisfaction. What was interesting from all the analyzed research results was that although men and women did not have the same jobs, namely, women had on average inferior jobs to men, no significant difference in their job satisfaction existed (Greenhaus et al., 1990). This could be explained by differences in expectations (Brush et al., 1987). Women expected less from their jobs and were satisfied with less. Traditionally, women were performing inferior jobs to men, had fewer opportunities for advancement and were paid less for the same jobs. Furthermore, men and women had different values; their perception of equality and fairness was different (Witt and Nye, 1992). So, although there were some reasons that might explain why there were no significant differences in job satisfaction between men and women despite the inferior position of women, this issue has not yet been fully clarified. Some authors have pointed out that in recent times the differences in job satisfaction between men and women have disappeared due mainly to equal opportunities for employment and advancement (Dipboye et al., 1994, p. 159).When studying the differences in job satisfaction in relation to gender, significant attention should be paid to differences in factors affecting job satisfaction. Some studies have pointed out the existence of differences in factors crucial for the formation of a positive working attitude in women compared to men. It was noted that women gave the greatest importance to relations with co-workers and working conditions (Halloran and Benton, 1987, p. 100). So the investigation of differences in job satisfaction in relation to gender should be oriented toward this direction. As the result, different strategies for job satisfaction improvement should be designed.
Toward a Theory of Corporate Governance in Non-profit Organizations
Helene Eller, University of Latvia
Corporate Governance is based on various theories. Common theory to explain corporate governance in for-profit organizations is agency theory. This theory assumes a goal conflict between the principal and the agent as both parties are utility maximizers. This research paper will show that in non-profit-organizations namely associations agency theory produces misleading interpretations. Such associations’ most important personal is volunteers and when working with them there is no goal conflict to state. The behaviour of these people is better mirrored in an alternative theoretical concept which is stewardship theory. Corporate Governance has become an important topic within science. Many worldwide crashes of corporations, due to a lack of guidance and supervision claimed for a “system by which companies are directed and controlled (Cadbury, 1992). Balance sheets and their rules to establish them to show an investor a true and fair view of a business failed (Mallin, 2007, p. 1). Balance sheets show figures but not underlying behavioural assumptions. Agency theory appears to be the dominant paradigm underlying most governance research (J. H. Davis, D. F. Schoorman & L. Donaldson, 1997, p. 20), (Miller, 2002, p. 434) as explaining obviously best an agency conflict built on the divergence of interests between the principal and an agent. The agency relationship is one of the oldest and most common codified model of social interaction (Ross, 1973, p. 134). In its most general form, an agency relationship occurs whenever one individual depends on, or engages another (Pratt, Zeckhauser, & Arrow, , c1985, p. 2) to perform some service, i.e. one person or entity does something on behalf of another. According to Jensen & Meckling, an agency relationship can be described as “a contract under which one or more persons (the principal(s)) engage another person (agent) to perform some service on their behalf which involves delegating some decision making authority to the agent” (Jensen & Meckling, 1976, p. 308). Agency theory underlies, that both parties are utility maximizers, consequently the assumption is, that the agent will not always act in the best interest of the principal (Bonazzi & Islam, 2007, p.8). The concern is, to look on the welfare of the principal which might not be maximized because of the mentioned different attitudes. Basic issue in stewardship theory is also to focus on the relationship between a principal and an “agent”, whereby in this theory the terminus agent is not suitable, because of the different underlying assumption. It is better replaced through the term “manager”. Further, agency theory as well as stewardship theory focus on maximizing the shareholder wealth. If interests between principal and agent or manager are aligned within both theories, no problems exist and no agency cost occur. By recognizing differences, the basic assumptions regarding motivation and control are quite opposite to reach the prescribed goal (Tosi, Brownlee, Silva, & Katz, 2003, p. 2054). The underlying model of a person is completely different to those in agency theory. Where agency theory’s basis is a trade-off between personal goals and goals of the company, stewardship theory’s basis is the idea, that there does not exist any difference between these two kinds of goals. Even in the case of competing interest, a steward places higher value on cooperation than disagreement. While agency theory and stewardship theory concentrate on the shareholder as principal, stakeholder theory considers more constituencies to be important for an organization (Mallin, 2007, p. 12). After Freeman a stakeholder is “any group or individual who can affect or is affected by the achievement of the organization’s objectives” (Freeman, 2010, 1984, p. 46). Stakeholders of an organization can be: Investors, political groups, customers, communities, employees, trade associations, suppliers, government. The number of stakeholders of an organization depends on their mission, their size, their legal form. The literature offers a lot of models to reduce the number of stakeholders of an organization and to classify them along their importance for the organization. The stakeholder classification after Mitchell et al. by using the attributes power, legitimacy and urgency got a lot of attention in the literature (Mitchell, Agle, & Wood, 1997, pp.865).
Leveraging Public Social Software Platforms for Relationship Marketing in the Airport Industry
Marion Tenge, University of Latvia / University of Applied Sciences Kufstein, Austria
The use of Public Social Software Platforms (SSP), such as Facebook, by service providers for connecting and interacting with their customers has overcome the state of infancy and is approaching commoditization. Network connections crossing organizational boundaries have been acknowledged by scholar of various disciplines as a major source of competitive advantage. However, “the mere presence of firms (…) in a location creates the potential for economic value, but it does not necessarily ensure the realization of that potential” (Porter, 2008, p. 241). Based on Relationship Marketing / network approach to organizational work, this research explores how interacting with passengers on the SSP Facebook contributes to economic need satisfaction of airport organizations. As a theoretical background the research draws on the renown Balanced Scorecard / strategy map approach of Kaplan & Norton (2001a; 2004) and theories of socio-psychological needs (Dambmann, 2004; Deci & Ryan, 1987) as motivator of customer engagement in an online environment. Being responsive to service quality expectations of passengers is vital for providing competitive airport services. The quality of a service can be described as the perception of the way a service is performed in contrast to service expectations (Bolton & Drew, 1991; Grönroos, 1984; Parasuraman, Berry Leonard L., & Zeithaml, 1991). However, airports are complex business relationship networks that lack rich insights into service expectations and perceptions of passengers, as the passenger relationship and data base is owned by airlines and tour operators. Complexity is added by fact that numerous airport services, such as retail outlets or restaurants, are not provided directly by the airport to the passenger, but indirectly through airport concessionaires. With the advent of public Social Software Platforms (SSP), such as Facebook, airports eventually are provided with the opportunity to establish network connections with their passengers and enter into a dialogue. SSP can be described as “digital environments that support human communication and collaboration. Contributions and interactions are globally visible and persistent over time” (McAfee, 2006, n.p.). Building a relationship with passengers on SSP allows for leveraging rich passenger knowledge for economic goal attainment. All major German airports with a minimum annual passenger volume of 5 million passengers maintain a corporate profile on the online social network Facebook. The corporate profile provides information about the airport and offers passengers and other stakeholders a platform for discussion and feedback. Network ties that cross organizational boundaries, i.e. bridging social capital, have been acknowledged by scholar of various disciplines as a major source of competitive advantage, for example regarding access to innovative ideas (Burt, 1995; Granovetter, 1973) or facilitated knowledge exchange and collaboration (Wasko & Faraj, 2005). However, “the mere presence of firms (…) in a location creates the potential for economic value, but it does not necessarily ensure the realization of that potential” (Porter, 2008, p. 241). Organizations are still unsure how to manage SSP and consider SSP as one of the “most important entrepreneurial challenges” (IBM, 2011, p. 8). While in the time period of industrialization marketing communication has been largely one-way in nature, a good understanding of social interaction principles is needed to tap the potential of SSP. Referring to norms of reciprocity that govern social relationships Grönroos (1994, p. 18) cited an old proverb from the Middle East: “as a merchant you better have a friend in every town”. Thus, marketing must no longer be treated as an isolated discipline, but can be defined as a dimension of society with the core variables of relationships, networks and interactions (Gummesson, 2002). Marketing therefore needs to be broadened to “social life, even to life itself” (ibid, p. 39). Research on customer service expectations supports this view by observing a growing demand of customers for a “more personalized and closer relationship with service providers” (Parasuraman et al., 1991, p. 43). Also the convergence of social and technological networks calls for a new marketing paradigm: Relationship Marketing. Relationship Marketing focuses on adding reciprocal value for all parts of a relationship network. The purpose of the paper is to explore how the interaction with passengers on the SSP Facebook contributes to the economic need satisfaction of airport organizations. The main hypothesis of the study is concerned with the norms of reciprocity that govern social relationships. HA: The interaction with passengers on SSP increases the economic need satisfaction of airport organizations, if also the socio-psychological need satisfaction of passengers increases.
The Effect of Destination Image on Tourist Loyalty in Kinmen Battlefield Tourism: The Mediating Role of Tourist Satisfaction and the Moderating Roles of Tour Guide Interpretation Performance and Perceived Value
Dr. Nien-Te Kuo, National Kaohsiung University of Hospitality and Tourism, Taiwan
Dr. Kuo-Chien Chang, Chihlee Institute of Technology, Taiwan
Dr. Hui-Hsiung Huang, Chia Nan University of Pharmacy and Science, Taiwan
Jui-Chou Lin, Ming Chung University, Taiwan
Using the battlefield tours of Kinmen island as a case study, this paper used regression analysis to elucidate the mediating role of tourist satisfaction, and the moderating roles of perceived tour guide interpretation performance and perceived value on destination image and tourist loyalty. The results confirm that tourist satisfaction is positively influenced by destination image, and tourist loyalty is positively influenced by tourist satisfaction. Thus, tourist loyalty is indirectly influenced by destination image through tourist satisfaction. Other key findings include the following: 1) the relationship between destination image and tourist satisfaction is stronger for tourists who perceived the interpretation performance of their tour guide to be highly effective than for those who perceived his or her interpretation performance to be low; and 2) the relationship between tourist satisfaction and loyalty is stronger for tourists who perceived the tour to be of high value than for those who perceived it as low. Over the past few decades, the development of tourism in Taiwan has rapidly advanced due to a growing economy and increased per capita income. In addition, convenient transportation systems and the introduction of the five-day work week in 2001 have also boosted domestic tourism. According to the 2012 Travel Survey of Taiwanese Citizens, the average number of domestic trips per person was 6.87 in 2012 (Taiwan Tourism Bureau, 2013). A similar survey in 2012 revealed that approximately 30% of the recreational activities in which Taiwanese engage are cultural experiences, such as visiting cultural heritage sites and exhibitions (Taiwan Tourism Bureau, 2013). Cultural tourism has also been found to play a pivotal role in international tourism demand (Richards, 1996; Silberberg, 1995). Thus, cultural tourism has great potential to contribute positively to the local economy, for example, in job opportunities for locally-trained tour guides. Kinmen battlefield tours are one of the most important cultural tourism activities in Taiwan. Kinmen island was assigned as a military zone in 1956, encapsulating it from the changes of modern development infiltrating the majority of Taiwan. Now demilitarized, the Kinmen County government is seeking to recreate Kinmen County as a recreational island with international appeal. According to Hou (1996), battlefield tours are a unique aspect of Kinmen that can set it apart from other cultural tourist sites in Taiwan. Tour guides play an important role in the process of travel. Not only does the tour guide act as interpreter of and guide to the physical sites encountered on the tour, but he or she is also the key player in the creation of the right ambiance, heavily influencing the experience of the tour participants. A good tour guide offers a travel experience geared towards customer satisfaction, thereby influencing customer loyalty and positive word-of-mouth marketing (Duke and Persia, 1996; Mancini, 2001; Wong and Kwong, 2004). Therefore, in the present study, the tour guide interpretation performance is particularly treated as a moderator in the relationship between destination image and tourist satisfaction. Previous research has indicated that perceived value is an important variable affecting customer satisfaction and loyalty. Indeed, value as perceived by customers has been proven to significantly influence customers’ intention to repurchase and to recommend (Gallarza and Saura, 2006; Petrick, 2004). The current study therefore also includes perceived value as a moderator in its investigation into the relationship between customer satisfaction and customer loyalty, seeking to provide diversified management strategies for practitioners in the tourism industry.
Gene Selection in Microarray Using Sequential Forward Selection Strategy
Dr. Hung-Yi Lin, National Taichung University of Science and Technology, Taichung, Taiwan, ROC
Dr. Po-Hsun Hou, Taichung Veterans General Hospital, Taichung, Taiwan, ROC
High dimensional feature space, low instance amount, and only a limited number of key genes crucial to bio-information classification problems are three difficulties in microarray analysis. Since different genes could likely preserve the similar information and in turn lead to the redundant classification effectiveness, a collection of discriminative genes do not necessarily facilitate classification procedure. To arrange the gene subsets with sufficient and necessary discrimination capability for classification problems, a novel selection strategy which integrates fuzzy cluster analyses and information gain (IG) into traditional sequential forward selection (SFS) algorithm is proposed in this paper. In terms of classification accuracy and discrimination power, the experimental results gained from six microarray datasets show that our model can efficiently select compact subsets of characterizing genes and these genes can perform well for various conventional classifiers. The emergence of microarray analysis and the technology of high-throughput screen encourage many powerful methods developed for biological and biomedical studies [Allison et al., 2006; Quackenbush, 2001; Smyth et al., 2003]. Microarray experiments can largely and entirely detect tens of thousands or even hundreds of thousands of gene expression levels at one time. The amount of generated gene data is so tremendous that millions of data records are common and their data compositions become more and more complicated. There are three challenges when confronting microarray analyses: (1) high data diversity in samples, (2) data width (i.e., the large ratio of gene amount to sample number) [Abeel, 2006], and (3) high dimensionality of feature space. Several research issues are involved when analyzing data in microarray. First of all, the preprocessing of gene expression levels is inevitable. This is because the data obtained from the presentation of chemical functions on creature tissues are only relatively accurate to the current probing condition, but not absolutely to all kinds of testing circumstances. The goal of data preprocessing is to eliminate the error derived from system while keeping the variation between different data. Secondly, gene evaluation method and promotion of discrimination capability of genes are critical to simplify all analytical procedures. Appropriate gene evaluation criteria can discriminate the informative genes and in turn authenticate the characterizing genes. Thirdly, feature selection or dimension reduction also assists microarray analyses when arranging an adequate solution for classification task. In addition, redundancy analysis and dependency analysis among the selected genes are other issues when analytical efficiency is considered. Insufficient object information and too much gene data strictly challenge the task of knowledge discovery in microarray.
Employment Volatility and Bank Lending in Taiwan
Dr. Shu-hen Chiang, Department of Finance, Chung-Yuan Christian University
This study examines whether external macroeconomic factors such as foreign trade, monetary policy, and the national business cycle as well as internal regional characteristics such as industrial diversity, local environment and local bank development can explain the volatility of employment in Taiwan’s regions. Based on a panel data of 23 counties and cities for the period 1997-2008, it is found that employment volatility in Taiwan’s local economy is highly dependent on local bank lending. Taiwan is a typical small open economy with a strong international competitiveness by application of growth pole theory to pour massive public resources into strategic industries or specific regions. A notable example is Hsinchu Science and Industrial Park. However, the fact that public investment is exceedingly concentrated in some specified industries or regions will lead to higher economic and employment risk and this worry is really emerged from a sequence of structural changes of global economy and technological revolution (Chiang, 2009). Therefore, the importance of economic volatility is especially noteworthy in the case of Taiwan economy and the purpose of this paper is to explore into the sources of volatility in Taiwan's local economy. Furthermore, it is well known that small and medium-scaled enterprises (SMEs) have made essential and critical contributions to Taiwan economic miracle for more than 30 years (Abe and Kawakami, 1997). Hu (2000) has further mentioned that Taiwan’s successful experience with SMEs is unique and can be regarded as a role model for the developing world. Thus, we must analyze the nature of SMEs and the possible effects of SMEs on Taiwan’s economic development. Although the financial and operating information on SMEs are relative opaque for bank, financing channels for SMEs still mostly depend on bank lending, rather than capital market, for example, stock market. All these things make it clear that the relationship between economic volatility through SMEs and bank lending deserves explicit emphasis (Berger and Udell, 2006). Since Taiwan is a SME-based economy, bank lending must additionally be taken into our consideration to provide the better understanding in employment volatility in Taiwan. In addition, local banks actually support these SMEs due to their best comprehension about local SMEs, so bank lending is regarded as a local, rather than national variable. Our empirical results support our inference, namely, the fluctuation from local bank lending is critical to the degree of employment volatility at local level. At the same time, this outcome tells us that a stable bank lending can help financial operation of SMEs, and it can eventually reduce employment volatility and high unemployment in Taiwan now. This is an important policy implication in this paper. The remainder of the paper is organized as follows. Section 2 reviews the past studies regarding employment volatility. Section 3 discusses the model, data, and econometric method. Section 4 describes the empirical results regarding volatility of Taiwan’s local employment over the period 1998-2008. The last section provides a summary and related policy implications.
Integration of Auxiliary Staff in New Product Development Processes
Christoph Staita, University of Lativa
Numerous research and practical publications in business management, economics, sociology, psychology and information sciences have been dealing with the topic of New Product Development (New PD) team performance, especially with modern development theories as concurrent/overlapping engineering, coherent division of labour, the application of theories of competence diversity, of constraints, of motivation, of job satisfaction and cognitive dissonances in New PD under the aspects of economic and socio-psychological efficiency. In contrast to the majority of investigation in the area of New PD concentrating on the question of how to optimise lead time, cost and quality by reducing the diverse constraints in the cooperation of the various professions resp. operational business functions concerned with the process of New PD (e.g. Ehrlenspiel, 2007; Wittenstein, 2007; Kliesch-Eberl, M. & Eberl, P., 2009; Haon et al., 2009) this issue is analysing the efficiency potential within the individual working unit of mechanical PD departments. The empirical evidence of unbalanced task allocation in this specific nucleus of New PD due to over-assessed SW tool capabilities and job enrichment demands by integrating drawing set documentations into the task content of design engineers on the one side and the insights received from intensive literature review and extended theoretical analysis on the other side encouraged the author to propose and discuss a model of Integration of Auxiliary Staff within mechanical development teams (MDTs) that relieves engineers from documentation tasks. The aim is to identify the relevant conditions, i.e. a framework to establish a coherent integration of auxiliary staff in New PD projects in a carefully restricted scenario of the execution phase of variant construction projects within a 3D CAD environment in mechanical development departments (MDDs) and to deduct recommendations for the design and use of coherent team structures in commercial systems - in the restricted area of that investigation. The proposed/hypothesized cause effect relations between the integration of auxiliary staff as independent variable and the economic and socio-psychological efficiency as dependent variables are analyzed with the action research method, with an ex-post data collection conducted via questionnaires for 65 selected development projects. The presented study resulted in cause-effect relations between various degrees of the integration of auxiliary staff and the economic and socio-psychological efficiency at a significant high level. A careful application of the empirical findings for the model of integration of auxiliary staff in single working units in mechanical development departments is advisable. The results are limited to the consciously used restrictions: mechanical development of new products, variant construction, execution phase of new PD only, mainly engineer’s point of view. An extension of that restrictions as well as an inclusion of the socio-psychological impacts on the auxiliary staff‘s job satisfaction should give further hinds for a more general application of the proposed model. Recent analyses of the work processed in mechanical development departments (MDDs) under 3D CAD-conditions (Three Dimensional Computer Aided Design) revealed that at least one third of the working hours are related to supporting activities, to distributable work, which is mainly concerned with product documentation (Wittenstein. 2007, p. 166 sqq., p. 189; Ehrlenspiel. 2007, p. 277 ff). And sad to say this part is not automatically performed by that powerful 3D CAD software (Roh, 2007, p. 540) as expected in the beginning of the 3D revolution by all parties concerned, by scientists as well as by practitioners, by managers as well as by students. The handling of that unanticipated outcome was extremely different; whereas in big industrial companies the engineer maintained his position as a specialist with all supporting services available, turned the engineer in medium sized companies into an all-rounder, taking over those tasks, the new SW should do in the first place.
An Efficient Clustering Method Based on Cuckoo Search for XML Documents
Dr. Tsui-Ping Chang and Kun-Jheng Jhong, Ling Tung University, Taiwan, R.O.C
Dr. Shih-Ying Chen, National Taichung University of Science and Technology, Taiwan, R.O.C
XML has emerged as the universal format for data exchange in Internet. As the concept of data sharing becomes popular in Internet, more and more XML documents are used in many applications. Therefore, how to acquire the useful information among XML documents is an important issue. XML document clustering is an important technique to acquire information from many XML documents. It compares similarity between XML documents to obtain good clusters and helpful information. Therefore, the performance of XML similarity measure approach is significant for XML clustering. Recently, several researches have been proposed for XML clustering by designing new XML similarity measure techniques. These researches focus on the tree edit distance between two XML documents and thus cluster XML documents. However, these researches do not consider the features (i.e., structure and content) of XML documents and result in the performance of computing the tree edit distance between documents is degraded. In this paper, the features of XML documents are analyzed to design a suitable clustering method, namely XCS, for efficiently computing similarity between XML documents to obtain a good clustering result. XCS not only efficiently computes the tree edit distance between XML documents but also is a new heuristic method based on Cukoo Search algorithm to find better clustering solutions. The simulation results also show that XCS outperforms other techniques of clustering XML documents. There are two major contributions in this paper. First, the features of XML documents to compare similarity between them are analyzed. Second, based on the defined similarity, a new way to design a clustering algorithm is presented. Pattern recognition (Antani, Kasturi, 2002) is a branch of artificial intelligence concerned with the classification of observations. It aims to classify data based on either a priori knowledge or statistical information extracted from patterns. Clustering is an important process in pattern recognition. It discovers the relationships among data and expresses those as a set of groups or clusters. The data objects in the same cluster are similar to each other and those in different clusters are dissimilar. Most clustering methods are based on two popular techniques known as hierarchical and partitional clustering. Hierarchical clustering methods generate a cluster tree that shows a sequence of clustering, with each clustering a partition of the dataset. Further, partitional clustering methods divide the dataset into a specified number of clusters. This tries to minimize certain criteria (e.g., intra-cluster distance), and therefore, it can be treated as an optimization problem. Recently, XML has become the de facto standard language for information exchange over the Internet, because of its extensible markups and document type descriptors. Therefore, many disciplines such as science, biology, and business require XML to represent data in their applications. Consequently, the rapid growth of XML documents has provided the impetus to discover common interests among online information. Clustering XML documents can be used to discover useful information form online information. It can group similar XML documents automatically without using predetermined class descriptions. Clustering XML documents allows user to utilize other online search experiences of domain knowledge by analyzing the information stored in query logs before grouping and extracting relevant information on given queries. The information extracted can then be used as recommendation items (in query recommendation systems) for automatic query expansion. The traditional clustering methods (Chang, Chu, 2010, Na, Kang, 2008, Zhu, Meng, 2008) are not suitable for clustering XML documents. XML documents are used to model information from XML data and have tree-structures. Traditional clustering methods (Chang, Chu, 2010, Na, Kang, 2008, Zhu, Meng, 2008) cannot be used for clustering XML documents since they do not consider the tree-structure relationships between data. As a result, these methods (Chang, Chu, 2010, Na, Kang, 2008, Zhu, Meng, 2008)concentrate on the contents and cannot be used to discover the structural information of XML documents. The tree clustering methods (Dalamagas, Cheng, 2004, Greco, Gullo, 2011, Hwang and Ryu, 2010) also are unsuitable to cluster XML documents. Although XML documents can be treated as trees, they are different from the trees that are defined in tree clustering methods (Dalamagas, Cheng, 2004, Greco, Gullo, 2011, Hwang and Ryu, 2010). For tree-structured XML data, the same tree paths exist among many XML documents even if these XML documents are different. This is because XML user queries acquire data on the leaf nodes of tree-structured XML data (Haw and Lee, 2011, Lu, X., 2011).
Model of Network Thinking in Management of Knowledge Flow Processes in Sports Enterprises
Prof. Wojciech B. Cieslinski, Prof. Andrzej Rokita, Dr. Piotr Głowicki,
University School of Physical Education in Wroclaw, Poland
Dr. Iwona Chomiak-Orsa and Jakub Mierzynski
Institute of Business Informatics, Wroclaw University of Economics, Poland
The authors describe a model of “network thinking” as a tool for the development and improvement of knowledge-related processes. Emphasis is placed on the analysis of the impact of process management and business models related to project and process organisation of sports enterprises and improvement and professionalization of academic sport. Network thinking should support the flow of knowledge in sports enterprises and improve the organisational and ICT effectiveness. It is therefore demonstrated that the purpose of the research includes presenting the relationship between networks thinking and knowledge flow processes. Modern sports enterprises function on the market in a manner similarly to most businesses. Commercialization is the key reason for seeking effective methods and models of management. Obviously, the nature of the operations of sporting clubs within the area of group sports, such as: football, basketball, volleyball and handball makes it necessary to create separate business models that could be applied in order to develop effective sporting club management. Within the framework of the grant obtained in connection with the creation of the e-AZS platform (Academic Sports Association platform), the authors of this article focus, among other topics, on the analysis and monitoring of business processes in the area of training, organisational and financial operations. The research covers primarily the analysis of the impact of process management and business models related to project and process organisation of sporting clubs on the improvement and professionalization of academic sports and improvement of the organisational, information and financial effectiveness. The purpose of this article is to demonstrate a connection between network thinking and managing the knowledge flow processes. Management of knowledge processes is a concept that seeks new forms of dynamic enterprise organisation, in order to build mechanisms that tie the competencies of the actors included in their organisational structures to the performed tasks. Imposed on the organisational layer should be a system of remunerations functioning as an incentive encouraging continuous improvement of the operational effectiveness of the delivered processes, which, as a result of the scale effect, should transform into strategic objectives of a sports enterprise. From this point of view the core relations of all structural elements of the enterprise are the processes delivered by them. According to many definitions processes are a set of operations that can occur concurrently, conditionally or sequentially, but their essence is the transformation of the enterprise’s resources (both material and non-material) that are present at the process outset – into end results that are realised in the form of products or services (see: Łasiński 2003 Ciesliński 2011; Perechuda 2000; Chomiak-Orsa 2013). A discussion of the management of knowledge flow processes must include the definitions constituting the basis for the Authors’ contemplations. It is assumed that knowledge is a source of systematized information delivered by book or computer data or other media. Knowledge is a result of transformation of information during the process of thinking. It is a result of observation, experience and learning (Czekaj, Jabłoński 2002, p. 115; Thorndike 1990). Transformation of data into information occurs during the organisational processes of learning and teaching. In order for data to be learned, the process of acquisition and transformation must be organised, that is the necessary resources (human, non-material and material) must be prepared to be used. Transformation of information into knowledge takes place during the processes of synthesis that enables the creation of information. In the course of the judgement processes, knowledge is formed on the basis of the possessed information, and later that knowledge, by way of decision-making processes, that is knowledge-sharing processes, creates wisdom, which some call social intelligence or social efficiency (Łasiński 2003, p. 82). The application of the methodology of building process organisations for the purpose of improvement of enterprise management is on the most frequently addressed questions in the area of strategic management. Using the benchmarking rule, it could be concluded that the application of the process approach ideology to management of a sporting club could improve the functioning of this type of business entity. The analysis and modelling of the sports training management processes, taking into consideration the knowledge flows and the principles of operation of sports teams, could contribute to the development of a new quality in the management of sporting clubs.
Hot Money and Stock Prices in China
Dr. Ling Feng, Shanghai University of Finance and Economics, China
Dr. Ching-Yi Lin, National Tsing Hua University, Taiwan
Dr. Chun Wang, Brooklyn College, The Graduate Center, CUNY, New York
China has recently experienced large hot money inflows, a measure of all recorded and unrecorded short-term capital inflows, and an accompanying surge in stock prices. Based on a data-based Local Projections approach, this study uses a monthly-frequency time-series dataset covering the period from January 1997 to November 2010 in China and finds that hot money inflows have significantly contributed to rising stock prices in China, especially as the financial liberalization deepened. The recent huge capital inflows and appreciated asset prices in China have attracted considerable attention. As indicated by Prasad and Wei (2007), capital flows to China have increased dramatically in both dimensions of volume and volatility in the past decades. ‘Hot money’ refers to short term capital flows that can move in and out of host market very quickly. Chari and Kehoe (2003) documented that hot money inflows are believed to cause financial instability in recipient countries. Kim and Yang (2009) showed that such inflows tend to produce boom-bust cycles. Given the potential impact of China’s economy on the global economy, economic conditions in China are of considerable concern to the policymakers. The hot money phenomena are particularly interesting in China since China has been the main destination of gross capital flows since 1990s. Observing the surge of stock prices accompanying large hot money inflows into China, this study investigates the potential impacts of hot money on Chinese stock prices. Although prior studies have concluded that international portfolio investments positively impact current and future stock returns in developed and emerging markets (1) , few literature have provided evidence on the dynamic impacts of hot money to China on stock prices particularly, primarily due to data limitation and the fact that China hasn't fully opened its capital account so far. China's stock market was established at the end of 1990. Although many of the problems in China’s stock market are common to other emerging markets, two features of the control of capital inflows to China's stock markets are unique in the short histories of the stock market. The first is the separation between two types of shares, serving domestic and foreign investors. However, this separation blurred somewhat following 2002 with the implementation of qualified foreign institutional investor programs (“QFIIs”) (2). The second is that the government plays the dominant role in stock market policies and regulations. Furthermore, the Chinese currency exchange rate reform since July 2005 has substantially increased hot money inflows to China because of market expectations regarding the appreciation of the RMB. Because short-term capital flows into China are closely related to governmental policies and regulations, to study the impact of hot money flows on Chinese stock prices, structural changes caused by capital account liberalization must be considered. This study identifies significant dates based on historical events, particularly the dates of regulations or policies relating to capital account relaxation, and then applies break tests encompassing these dates to the univariate time series of hot money flows. This break-identification strategy is consistent with the study of Bekaert et al. (2002), who found that breaks are typically associated with the dates of capital account liberalizations in emerging markets. Regarding the important roles of financial liberalization on the price impacts of hot money flows in China, this study precedes the Local Projections method developed by Jordà (2005, 2007) by examinations of the structural breaks in hot money flows and the co-integration of the data series at a monthly frequency from January 1998 to November 2010.
The Influence of Organizational Trust upon Affective and Calculative Commitment
Professor Dagmara Lewicka, AGH University of Science and Technology, Krakow, Poland
This paper discusses the results of empirical research on links between the types of organizational trust (vertical, horizontal, institutional) and selected elements of organizational commitment (affective, calculative). It was assumed that a high degree of organizational trust (vertical, horizontal and institutional) creates favourable conditions for organizational commitment. The relationship between trust propensity and organizational commitment was also investigated. The research was carried out with the use of a questionnaire in a sample group of 92 employees. The obtained results made it possible to identify relationships between types of trust and commitment in the tested sample. Flexible organisations need employees who are full of energy for actions, self-confident, enthusiastic, passionate and loyal to their jobs. Therefore, the attention of both researchers and practitioners is focused on the problem of commitment. The employee commitment is the driving force of an organisation which is bound for success, where committed employees often exceed expectations when undertaking goals and tasks. The employee commitment can be measured by their willingness to stay in a given organisation and provide services for it. The Hay Group Insight employee surveys (www.haygroup.com) conducted among a few hundred thousand workers in organisations representing different industries in 47 different countries prove that highly committed employees may increase business results by about 30 percent and fully committed employees may exceed their expected results by 2.5 in comparison to their uncommitted colleagues. Moreover, companies from the upper quartile in terms of employee commitment show an increase in revenues by 2.5 bigger than companies form the lower quartile. In companies which enjoy a high level of employee commitment, the rotation of employees is lower by 40% than in companies with low employee commitment. It means that highly committed employees achieve better results, become more loyal and contribute to good performance of the organisation in the long term. With the growing importance of employee commitment, the identification of factors stimulating its occurrence is becoming an important issue. An essential factor building commitment is trust. So far trust and its influence on commitment have not been researched extensively. The research was mainly confined to the influence of trust on commitment between the superior and subordinate (Chughtai and Buckley 2010). Therefore, it is necessary to carry out research, including a comprehensive analysis of different types of trust on commitment. The aim of the paper is to obtain answers to the questions: If any, what is the influence of organisational trust upon employee commitment? What are the links between trust propensity and organizational commitment? The issues of commitment have become increasingly important in the recent years. In the era of knowledge economy, commitment building has become a significant area of interest to human resources departments. Organizational commitment refers to a person's attitude and attachment towards their organization (Saks 2006) . The problems of commitment are also studied in the context of a psychological contract, which is defined as an unwritten exchange agreement in which two parties, the employer and the employee, have some mutual obligations and expectations. These expectations can be balanced or asymmetric, articulated more or less clearly. The existence of such contract is most visible when it is breached. Formerly, the employer used to provide salary, fair working conditions and safety at work in exchange for day-to-day work at a decent level. Currently, the relationships are based on a new psychological contract, where the employees are becoming less attached to the company with loyalty ties, but their relationships with the company are based on the exchange of benefits and services according to the social exchange theory. New expectations of employees include, among other things, fair treatment and respect of dignity, perceiving them as stakeholders rather than only subordinates, understanding their needs for career development and management, providing an inspiring work environment and the possibility of increasing the so-called employability, appreciating and rewarding properly for their contribution to the creation of values.
Cooperation in Business Education: What about Trust?
Dr. Herve Chappert, Dr. Thuy Seran, and Dr. Estelle Pellegrin-Boucher
ISEM - Universite Montpellier 1, France
These last years, universities are more likely to develop international programs. Some of them use Information and Communication Technology (ICT) to offer international academic partnerships based on e-learning solutions. We study the case of a partnership between a Public European University and a Private African University. The model of teaching is Blended E-Learning in which courses are mainly taught by European professors via a Distance Education Platform and face-to-face seminars are made by African professors. The collaboration of two institutions (public and private), in an international context (one in France, one in Cameroon) with different cultures, based on a new technology project (e-learning), raises the problem of control of this change. We focus on the shape of alternative control based on trust. The originality and interest of this research are multiple. First, it allows us to confirm the characteristics of trust and distrust in a successful cooperation. Then, it integrates three different theoretical approaches: Inter-organizational strategies, interpersonal relationships and management control. Finally, the qualitative methodology we used in this case study shows different parts of a trust and distrust in project managers’ relationships. This research aims at increase our knowledge of trust and distrust in inter-organizational relationships based on ICT projects. In this paper, we show how a French university establishes an international academic partnership with a private higher education establishment in Cameroon based partially on distant e-learning (Blended E-learning) and how the partnership develops between the two organizations. We define "e-learning" as the use of Information and Technology Communication (ICT) to facilitate and enhance learning (OCDE, 2005). We also draw upon the typology of e-learning modalities defined in the ELUE project (E-Learning and University Education) (ELUE, 2006). These forms may take place completely on a distance (E-learning), partially on a distance (Blended E-Learning) or in classroom based lessons (Web-Enhanced Courses). Universities are facing a strong demand for development of teaching methods in the domain of e-learning (Garrot, Psillaki, & Rochhia, 2009) and at the same time, as a consequence of the evaluations of the universities, including the Evaluation Agency for Research and Higher Education (AERES, 2013), the universities should aim at creating international partnerships. The partnership in question is examined in terms of inter-organizational relations and especially inter-organizational control. The examination includes control among partners and network control (Caglio & Ditillo, 2008) which will allow us to analyze the three control mechanisms: the market, the hierarchy and the alternative control. This last control mechanism includes an aspect of trust, which we are particularly interested in this case study. In the context of university cooperation in e-learning, there are situations where the exchange is very uncertain, and where it remains unstable and risky despite of the partner’s good intentions. This configuration corresponds to the work of Langfield-Smith & Smith (2003) and van der Meer-Kooistra & Vosselman (2000) which proposes an alternative control based primarily on trust. This trust is supported by exchanges and personal contacts, interactive communication and, in general, through informal and social forms of control. Coletti, Sedatole, & Towry (2005) studied the impact of control systems on the trust level through experimental analysis, and showed that control systems can actually increase the level of trust between the partners. The control system should be robust enough to generate cooperation between the collaborators. The results also suggest that the increased trust has a positive effect on future cooperation between the partners (Coletti et al., 2005). Several researches define the concepts of trust and distrust. For example, Lewicki, McAllister, & Bies (1998) consider that trust and distrust are based on positive or negative expectations of the partners. Rousseau, Sitkin, Burt, & Camerer (1998) define trust as a psychological state which accepts the vulnerability of the intentions or behavior of the partner. However, different authors promote that trust can only be analyzed if there is a real interdependence and a genuine relational risk when creating the partnership (Chiles & McMackin, 1996; Sheppard & Sherman, 1998). Relational risk is defined as the probability and the consequences of not having a satisfactory cooperation. This type of risk relates to the possibility of an opportunistic behavior of the partners (Das & Teng, 1996, 1998). The interdependence studied in our case refers to overlapping processes, sequences and timed spend to meet the definition of the interdependence type of workflow (Dekker, 2004; Thompson, 1967). The literature on inter-organizational control shows the existence of trust and studies the role of control as an inherent element of trust. However distrust is not considered as an independent dimension of the relationship between partners. Lewicki et al. (1998) in their chart of trust and distrust propose to integrate these two dimensions in the partnership. It is therefore possible to have both a maximum level of trust and a maximum level of distrust in the same partnership.
The Enterprise Development Center: Exploring Key Challenges of Business Incubator
Dr. Hanadi Mubarak Al-Mubaraki and Dr. Ali Husain Muhammad, Kuwait University, Kuwait
Dr. Michael Busler, Richard Stockton College, NJ
The aim of this paper is to investigate and identify the four key challenges of incubators in the Enterprise Development Center (EDC) located in New Jersey (NJ), United States (US). To achieve the aim, the research used a qualitative research methodology that included an interview. The research findings suggest two priorities for incubators in the EDC. 1) The first priority is to address the economic, industrial, and cultural challenges in the EDC, which will lead to high levels of local and regional business development as well as creating jobs. 2) The second priority is on policy challenges in the EDC. The research adds value to academicians and practitioners such as government, funded organizations, institutions, and policy makers. Today, all governments are working to find suitable economic models to help businesses reach a high survival rate (Al-Mubaraki, Ahmed and Al-Ajmei, 2014). According to the U.S Small Business Administration office, the rate of failure for a small business ranges between fifty‐five and sixty‐five percent over a four to six year span (US Small Business Administration Office of Advocacy, 1992). The rate of failure reduced to twenty percent after using business incubator (McKee, 1992). Numerous researchers have identified incubators as important to the growth and successes of businesses involved (Hayhow, 1997; Jones, 2001; Murphy, 2000; Rice, 1992; Roper, 1999; Sherman, 1999; Whettingsteel, 2000; Wonnacott, 2001). Incubators provide significant levels of tangible services important to the establishment and survival of the businesses they assist (Carroll, 1986; Brown, 1998; Dowling, 1997a; 1997b; Hayhow, 1996; Kalis, 1996c; Rice and Matthews, 1995; Schuyler, 1997; ANZABI, 1999b; Bruton, 1998; Al-Mubaraki, 2008; Al-Mubaraki and Busler, 2010a). Generally, incubators support the creation of new and value-added ventures (Rice and Matthews, 1995; Al-Mubaraki et al., 2014), and are a cost effective way to provide consultation and advice at any time (Allen, 1988; ANZABI, 1999b; Dowling, 1997a; Philips and Hayhow, 1996). This paper is structured as follows: Section 2 provides a review of the literature on incubators. Section 3 describes the research methodology, which includes interviews describing four key challenges of incubators in the United States related to economy, policy, industry, and culture. In section 4, the authors briefly discuss the findings of the study drawn from the analysis of US incubator program. Section 5 concludes with a discussion of the study’s results. Many research studies, undertaken in developed and developing countries alike, have documented the effectiveness of business incubators as tools for the growth of business and the creation of jobs (Allen, 1988; Gerl, 1996b; Hayhow, 1997; Meeder, 1996a, 1996b; Rice, 1992; Roper, 1999; Sherman, 1999; Whettingsteel, 2000; Adkins, 1996a; Bearse, 1993; Bruton, 1998; Bykova, 2000, Forst, 1996; Jorge, Malan and Lalkaka, 2002; Mian, 1994; Carroll, 1986; Kuratko and Lafollette, 1987). Al-Mubaraki and Wong (2011) examined ten case studies of existing incubators in Europe, finding that some incubators perform better than others. This may be attributed to differences in size, types of services provided, focus of service, and source of sponsorship. Understanding the performance of an incubator is important both to society in general and to incubator owners in particular. For the general society, the performance indicators highlight the role played by incubators in nurturing the spirit of entrepreneurship and in providing guidance and an environment conducive to business start-ups. For incubator owners, the indicators can be used as benchmarks to evaluate the performance of their own incubators. Satisfactory indicators endorse the existing governance strategy of incubators, while less than satisfactory indicators push them to address existing problems in order to improve the operation of incubators. Lee and Hunt (2008) demonstrate qualitative approached based on the survey information. They identified four recommendations. First, the incubators are sustaining and produce the monthly financial obligations; also, the incubators around the United States can be an effective tool through collaboration, networking and sharing ideas toward economic growth. Second, economic development organizations are playing vital role to support the success of incubators and self–sustain incubators model. Third, the study proven the benefits of collaboration in business incubation program with others program in the same geographic region. Fourth, networking activities between the incubators and university will be added value for both parties and have face‐to‐face collaboration.
IFRS Socio-Cultural Orientation: SCO Observers & Dialogue Partners
Dr. David R. Borker, Manhattanville College, NY
In addition to its six member participants, The Shanghai Cooperative Organization (SCO) has six members and defined relationships with eight other nations. India, Mongolia, Iran, Pakistan and Afghanistan are SCO observer countries. Observer countries are either interested in future inclusion as full members of SCO, or are viewed as attractive candidates for membership by Russia or China. Turkey, Sri Lanka, and Belarus are dialogue partners which are defined by the SCO Charter as a state or organization that shares the goals and principles of SCO, and wishes to establish relations of equal mutually beneficial partnership with it. Together these relationships represent SCO’s aspirations to expand into a larger pan-Asian economic and security organization. This paper examines the sociocultural potential of the SCO related states to establish and sustain sufficiently high quality financial reporting to support mutually beneficial trade, and to successfully allocate international capital. The analysis is based on previous research into cultural accounting value methods. That research examined Hofstede cultural value dimensions and Gray corresponding accounting value dimensions to develop country accounting value profiles that were compared with a posited ideal IFRS favorable accounting value profile. More recent research has quantified a country’s sociocultural IFRS orientation using a Composite IFRS Orientation Index and an Expanded IFRS Orientation Index that incorporates additional sociocultural factors of perceived corruption, political risk, educational level, and regulatory business orientation. Improvement of financial reporting and the financial reporting infrastructure opportunities of the SCO observers and dialogue partners are discussed and directions for further research are examined. The Shanghai Cooperative Organization (SCO) consists of Russian and China and four Central Asian republics, Kazakhstan, Kyrgyzstan, Uzbekistan and Tajikistan, that all share borders with both Russia and China. The headquarters of the SCO is in Shanghai, China, where the administrative organization is based. Until now, most activities of SCO have dealt with coordination of security and infrastructure building projects in the Central Asian republics. However, most recently SCO has engaged in expanding its focus to other matters. Members have discussed the expansion of trade ties and unified efforts in other areas, such health. (SCO, 2013)) These six nations are hardly equal in terms of politics, economics and other factors. China and Russia are clearly the largest and most politically powerful members, while the four Central Asian republics are, primarily producers of mineral raw materials and agricultural products. As former republics of the Soviet Union, they have maintained local trade relationships dominated by Russia which predate the establishment of SCO. Although Russia and China are both major world powers, China’s economic significance far exceeds that of Russia. This is reflected in the ambitions of each regarding SCO. Russia sees SCO as a means to enhance its world reputation economically and politically. China, on the other hand, sees the organization as means to expand China economic ties and trade throughout the Pan-Asian region. (Aris, 2013) Contributions to Central Asian infrastructure are attractive to Russia and the Central Asian members, since it leverages China’s economic strength to benefit members with weak infrastructure. China’s long term goal of establishing a free trade zone for SCO member appears as a threat by both Russia and the Central Asian republics. Russia, which already has trade advantages with the Central Asian republics, is concerned about China’s potential economic domination in the region, while the Central Asian republics are concerned that China will dilute their relative importance in their local region by incorporating them into a much larger Pan-Asian trade organization. (Aris, 2013) The inclusion in SCO of five observer states, i.e., India, Mongolia, Iran, Pakistan and Afghanistan and three Dialogue Partners, i.e., Turkey, Sri Lanka, and Belarus, reveals much about (a) the aspirations of Russia and China, (b) the countries interested in full membership, and (c) those desiring an independent relationship with SCO. The observing countries consist of those that have been invited by SCO because of interest in their membership by Russia or China, and countries that are seeking membership status in hopes of being permitted to join. This is the case for Iran, Pakistan and Afghanistan. Each has expressed its desire for membership in SCO and each is currently viewed has having too extreme and unstable a regime to grant membership. In contrast, India and Mongolia are very attractive to Russia and China.
Applications of Exotic Options in Corporate Finance: A Panorama
Dr. Jian Wu, Neoma Business School, Cedex, France
The financial markets have made unprecedented progress over the past decades. The progress is of such magnitude that it runs the risk of separating the financial markets from the corporate world. In fact, some innovative market instruments are mostly used for speculation and arbitrage activities, without being well understood or used by firms. To be sure that the financial markets remain in their right track, it seems necessary to reduce such a gap. This article aims to show how exotic options, one of the most sophisticated financial instruments, can be used in different areas of corporate finance, such as the financing decision, the investment decision, the capital structure analysis, and the corporate governance. For each of these fields, we illustrate some application examples by specifying the exotic options in question including their payoffs, and their specificities relative to traditional options. By providing an overview on applications of exotic options in corporate finance, this work could help firms and investors better understand how these financial instruments work and how they can be used. It could also make academic researchers aware of the necessity to find more real applications to ensure the long-term viability of these ingenious products. Over the last few decades, financial markets have made unprecedented developments. Thanks to advances in information and communication technology, the implementation of the margin system, and the standardization of products, transactions in financial markets are becoming faster, safer and more fluid. At the same time, a grand variety of new products have been invented to meet investors’ specific needs, while quantitative tools have been called upon to analyze these sophisticated products. All this progress have made financial markets more efficient and permit them to better fulfill their economic function which consists in reallocating both capital and risk among economic agents. The only drawback to this progress is the fact that financial markets tend to be apart from corporate world. In fact, the innovative instruments traded on financial markets are mostly used in investment banking activities, while they are not much used by industrial companies. For example, exotic options are tailor-made to meet investors’ specific requirements in terms of risk management. As they respond better to users’ anticipation about the market movement, they are considered as more efficient. Most research works on exotic options are published in specialized academic review. As these works usually focus on mathematical modeling and/or empirical studies without always providing corporate applications, they are not really accessible for professional practitioners. As a result, exotic options, originally designed for meeting firms’ specific needs in their currency or and interest-rate risk hedging, remain still relatively little known by firms. Some consider that one of the many factors having contributed to the financial crisis since 2007 is due to the misunderstanding and so the misuse of complicated derivative products. For instance, in some cases, investors think that, in a worst-case scenario, their investment is protected, while it is not always the case and they may lose everything. A good understanding of how these products work and how they can be used properly would have avoided these failures. The present article aims to contribute to fill this gap by showing how exotic options can be used by firms to get a better flexibility in their financial management, to be more accurate in their investment valuation and capital structure analysis, and to improve their corporate governance through more efficient executive compensation designing. The rest of the paper is organized as follows: first, we show how exotic options can be used in different areas of corporate finance including the financing decision, the investment decision, the capital structure analysis, and the corporate governance. Then, we summarize the main results obtained in this article and present some concluding remarks. Corporate finance deals with financial decisions made by business companies as well as tools and/or analysis which lead to make these decisions. Its primary goal is to maximize shareholders’ wealth. The main fields covered by corporate finance include the financing decision, the investment decision, and other more strategic decisions such as the analysis of the capital structure and the corporate governance. We follow the structure of such a guideline for examining applications of exotic options in corporate finance.
University Student (U-S) Relationship Marketing: A Causality Study with Evidence from an Egyptian University
Dr. Mansour S. M. Lotayif, Business Department, Beni Suef University, Egypt
The current study aims at identifying the causality relationships amongst three sets of variables. First; between satisfaction and relationship antecedences (i.e. service quality, facilities, information technology, and social activities), second; between reputation and relationship antecedences, finally; between loyalty and relationship antecedents, affective commitment, reputation, trust, relationship strength, and calculative commitment. The experiences of 217 Egyptian students were utilized to achieve these objectives. Throughout multivariate analytical technique (e.g. multiple regression), significant causality relationships have been supported these relationships. However, no significant relationships between loyalty and trust, relationship strength, and calculative commitment were found. Nowadays, environmental changes such as privatization, diversification, decentralization, internationalization and increased competition in higher education are common to most countries worldwide (Luminiţa, 2009). Enviably, these environmental' changes affects the performance of higher education institutions and could be seen as the driving forces for the marketization of higher education (Maringe, 2006). Therefore, the successful organization is the one that build sustainable bridges with its environmental stakeholders via what so called "relationship marketing" (RM). Those stakes might be any individual or group of individuals either impacted upon by the university or able to impact on the achievement of university's objectives (Freeman, 1984). In other words, stakeholders are the individuals and groups that have the power to directly impact on the future of the organization (Bryson, 2004). And the survival and success of an organization depends on the ability of its managers to provide wealth, value, and satisfaction to its stakeholders (Clarkson, 1995). In this perspective, a university ought to have strong ties with its surroundings and students are on the top of these surroundings. Literally, RM as a defensive marketing is mainly focusing on customers' retention and pushing them up on the success ladder to be clients, advocates, promoters, and eventually to be business partners (Payne et al., 1998). Customer retention is considered a more cost-effective approach than continual customer acquisition (Anderson and Mittal 2000; and Reichheld 1996) as firms can expect a 10 percent increase in revenue from strengthening the relations with their existed customers via the implementation of customer relationship's programs (Mitchell, 2002). On the other hand, traditional marketing is focusing on customer acquisition as offensive marketing (e.g. Berry, 1995; Storbacka et al., 1994; and Fornell, 1992). Helgesen, (2006) for instance perceive customer retention (customer loyalty) as the link between customer satisfaction and the financial performance of a business unit. Actually, marketing literature reveals many RM benefits that have been discussed in this perspective such as customer retention, positive referral, increased propensity to repurchase, and most significantly, customer loyalty (e.g. Mattila, 2006; Palmatier et al., 2006; Reichheld 2003; and Hennig-Thurau et al., 2002). Interestingly in this perspective, reducing customer defections by five percent, can increase profits by between 25-85 percent (Reichheld 2003). Duncan and Jana (2012) have mentioned that a relationship marketing orientation has been found to be conducive to the development of both customer satisfaction and loyalty. Therefore, RM concept and customer–brand bonding has been taken considerable scholars and practitioners' attention (e.g. Mattila 2006; Palmatier et al., 2006; McEwen 2004; and Crosby et al., 1990). In that introductory stage, it is worth mentioning that a number of other terms have been used either as substitutes for RM or to describe similar concepts, such as direct marketing, one-to-one marketing, loyalty-based marketing, customer relationship management (CRM), integrated marketing, dialogue marketing, and interactive marketing (Helgesen, 2008, P. 8). However, some of these approaches are close variations of RM and others still having an overlap with RM (Eiriz and Wilson, 2006; Palmer, et al., 2005; and Möller and Halinen, 2000). Back to the higher education context, student retention is becoming an increasingly important strategic theme for institutions offering higher education nowadays (Sauer and O’Donnell, 2006; Hennig-Thurau, et al., 2001; and Tinto, 1993). In this perspective, the higher education institution (HEI) mission is expanded to stretch beyond teaching and research to include services to the community, requiring partnerships and building bridges with their surrounding communities and stakeholders (Jongbloed et al., 2008).
The Influence of Impulse Purchases and the Positive–Approach Effect on Emotional Accounting
Dr. Chien Shu-Hua, Professor, National Taichung University of Science and Technology, Taichung, Taiwan
Dr. Wu Jyh-Jeng, Professor, National United University, Miaoli, Taiwan
Dr. Wang Chun-Hsi, National Taichung University of Science and Technology, Taichung, Taiwan
Chin-Lin Chuang, National Yunlin University of Science and Technology and
Southern Taiwan University of Science and Technology, Taiwan
This study investigates the influence of emotional accounting on financial innovation products by using reverse mortgages as an example. Reverse mortgages are an innovative financial product designed for elderly people to mortgage their houses to support themselves in old age. Particularly, this study examines the influence that impulse purchase and the positive–approach effect have on emotional accounting when consumers receive innovative financial services; this influence subsequently alters consumers’ trust attitude. The results show that positive emotions affect consumers’ trust and serve as a mediating variable between impulse purchases, the positive–approach effect, and trust. At the end of December 2013, 2,694,406 senior citizens older than 65 years resided in Taiwan, accounting for 11.52% of the population and thus rendering Taiwan an aging society. The national birth rates in developing countries in Asia have exhibited a continual decline, demonstrating aging trends. An aging population reduces the labor force and causes a lack of social welfare; thus, pension problems and the relatively expansive healthcare that senior citizens require after retirement poses a major challenge to governments when formulating financial policies. Reverse mortgages are a feasible resolution for enhancing the financial situations of elderly people (i.e., owning real estate but lacking monetary assets). This innovative financial product was formally introduced in Taiwan in 2013; however, because of the traditional thinking that “with land comes wealth” (The Great Learning), senior citizens hesitate to transfer the ownership of their homes to banks. Therefore, the poor performance of the innovative product can be attributed to insufficient planning, as well as the emotions of the senior citizens. Inspired by this aspect, this study investigated how emotional accounting affects the sales of innovative financial products. Chien and Chen (2010) studied the sales of innovative financial products, asserting that when consumers have the impulse to purchase, they tend to exceed their mental budgets, which increases their purchase intention. The influences of impulse or unplanned purchases on financial products were also investigated; however, mental budgeting or accounting requires further investigation. Levav and McGraw (2009) proposed the concept of emotional accounting, stating that positive or negative emotional labeling during consumer evaluations influences purchasing behaviors. According to Edler (2011), impulse purchases and the congruent response (i.e., positive–approach effect) influence emotional accounting. Therefore, this study investigated the role of accounting theory in consumer’s purchasing behavior. Thaler (1985) proposed that consumers are irrational and often make irrational decisions based on their mental accounts. Scholars have frequently used the mental accounting perspective to elucidate consumer behaviors such as budgeting, expenditures, and consumption; specifically, their behaviors in establishing and implementing mental budgeting (Heath & Soll, 1996; Thaler, 1999; Thaler & Shefrin, 1981). Consumers tend to mentally label their savings accounts into various categories such as entertainment, education, travel savings, retirement savings. Because these mental accounts cannot be financed, consumers can demonstrate self-control, prohibiting themselves from overspending in any category and consuming the budgets of other categories (Heath & Soll, 1996; Thaler, 1985). Stilley et al. (2010) evaluated mental budget uncertainty, proposing that consumers change their mental budgets as their incomes increase. In this case, consumers only resist making additional purchases when their budgets are exceeded. Levav and McGraw (2009) proposed the concept of emotional accounting, maintaining that the positive and negative emotional labels during consumer evaluations can influence their purchasing behaviors. Edler (2011) suggested that impulse purchases and the positive–approach effect can interfere with emotional accounting. Thus, this study further extended the above mentioned concept, asserting that mental budgets are unfixed and that impulse purchase and the positive–approach effect influence emotional accounting and subsequently the trust of consumers. In addition, scant studies have addressed this issue to determine whether consumers are influenced by impulse purchasing behaviors when their mental budgets increased. Therefore, this study evaluated how impulse purchases and the positive–approach effect influenced emotional accounting.
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