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Development
of the Accounting Profession in Taiwan
Dr. Raymond
S. Chen, California State University Northridge, Northridge, CA
ABSTRACT
Over the
past forty years, the economic development in Taiwan has been nothing short
of a miracle. Gross national product (GNP) increased from US$1,562 million
in 1960 to US$297,657 million in 2000, which translates to an increase of
over 190 times. Per capital GNP increased from US$154 in 1960 to US$14,216
in 2000, an increase of over 92 times. Taiwan, in short, has become the
nineteenth largest economy and fifteenth largest trading economy in the
world. Along with economic development, comes the increased demand of
services for the accounting profession. Although there are many factors
attributing to the development of the accounting profession in Taiwan, this
paper identifies the most significant factors that assisted in Taiwan’s
development of the accounting profession. These factors are evident in the
governmental policies designed to attract foreign investments and to further
the formation of the domestic capital market. These, in turn, fostered
demand for accounting services, which were clearly influenced by foreign
accounting practices that further stimulated professional development. In
Taiwan, certified public accountants have established large practices to
meet the growing needs of businesses. This paper illustrates the diversity,
magnitude, and growth of professional services provided by accounting
firms. These services include representing clients in registering
businesses, trademarks, and patents with government agencies; as well as in
corporate or bankruptcy dissolution. The growth of the accounting
profession over the past four decades has been extremely impressive in
Taiwan.
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Complex
Strategic Decision Processes and Firm Performance in a Hypercompetitive
Industry
Dr. Johannes H. Snyman, Oklahoma Christian University, Oklahoma City, OK
Dr. Donald V. Drew, Oklahoma Christian University, Oklahoma City, OK
ABSTRACT
In hypercompetitive environments,
where change is rapid and ambiguous, firms need more than just rational or
incremental strategic decision processes. In fact, it is more valid to
think of successful firms as pursuing complex strategic decision processes
in order to match the environment’s characteristics. This study
investigated the relationship between complexity as a strategic decision
process and firm performance. Consistent with the hypothesis, complex
processes were found to be significantly related to higher firm performance
than were similar, unitary, or impoverished strategic decision processes.
Like the computer industry, the banking industry is undergoing dramatic
change. Deregulation has caused significant consolidation since 1984 and,
with the repeal of the Glass-Steagall Act of 1933, additional consolidation
is likely to continue (Soper, 2001). The Gramm-Leach Bliley Act of 1999,
which modernized the financial services industry, is increasing convergence
between bank and non-bank financial institutions accelerating the pace of
mergers and acquisitions (McTaggart, 2000). Technological developments are
also transforming the industry at a revolutionary pace (Giannakoudi, 1999).
ATMs and telephone banking which were introduced in the 1970s, home banking
via cable television in the 1980s, and PC banking followed by Internet
banking in the 1990s have reshaped the industry. In the 2000s, new
technologies such as multiapplication smartcards and cooperative agreements
with mobile phone operators will continue the pace of change (“Banks have no
future,” 2000).
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Speech
Recognition Technology for the Medical Field
Dr.
Harrison D. Green, Eastern Illinois University, Charleston, IL
ABSTRACT
This paper focuses on innovative approaches to
improving the usefulness of speech recognition technology (SRT) for the
medical field. Two key factors were initially identified which included the
need for integration of speech technology with existing applications and the
need for continuous update of the users’ speech files on all workstations in
a networked environment. A prototype solution, addressing both of these
issues, was installed in a large veterinary clinic in west Texas. The
author used this setup, along with similar software installed on the
Internet, as a research laboratory. Data was gathered through direct
observation and interviews with current and potential users. The results of
the study indicate that there are additional factors that are equally
important or more important than those originally hypothesized. These other
factors include amount of training, power of macros, and workflow
integration. As a part of my consulting practice in the area of speech
recognition, it was found that there is a definite need for continuous
speech recognition technology (SRT) in the medical field. Doctors use many
long, technical words that are more easily spoken than typed. While in the
examination or treatment room, having to focus on typing tends to divert the
doctor’s attention away from the patient. Using a tape recorder makes
correction difficult and requires the services of a transcriptionist. This
study focuses on a prototype multi-user system for continuous speech
recognition that originally was installed in a veterinary office and
currently is available over the Internet. Up until about two years ago,
there were several major barriers to the implementation of continuous SRT by
professionals.
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What determines dividend policy: A comprehensive Test
Dr. Tao Zeng,
Wilfrid Laurier University, Waterloo, Ontario, Canada
ABSTRACT
This paper designs
an empirical work to investigate the determinants of corporate dividend
policy under the Canadian situation. It shows that firms pay dividend as a
signal and to reduce agency costs. It also shows that liquidity and tax
clientele effect are related to dividend policy. The Author gratefully
acknowledges that financial support for this research was received from a
grant funded by WLU Operating funds, the SSHRC Institutional Grant awarded
to WLU, and CMA Canada - Ontario. There has been a great deal of financial,
economic, as well as accounting literature analysing why firms pay
dividends, given the fact that effective tax rate on capital gains lower
than the effective tax rate on dividends, i.e., the Adividend puzzle@
(Holder et al 1998, Dhaliwal et al 1995, Lamoureux 1990, Chaplinsky and
Seyhun 1990, Abrutyn and Turner 1990, Mann 1989, Crockett and Friend 1988,
Kose and Williams 1985, Feldstein and Green 1983, Litzenberger and Ramaswamy
1982, 1979, Miller and Scholes 1982, Feldstein 1970, and so on). To shed
light on this puzzle, researchers try to figure out the benefits from paying
dividends, which may offset the tax disadvantages. Some survey studies find
that CEOs choose to pay dividends because they believe dividend can server
as a signal to shareholders (Baker and Powell 1999, Abrutyn and Turner 1990,
Baker et al 1985); because dividend can reduce agency costs and enforce
manager to act in the interest of shareholders (Abrutyn and Turner 1990);
because clientele effects exist (Baker et al 1985).
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Theoretical
Inconsistencies in Accounting: Why Don’t We Depreciate Land
Dr. Jeffry
R. Haber, Hagan School of Business, Iona College, New Rochelle, NY
ABSTRACT
Accounting
is part art and part science, built upon assumptions, principles, existing
practice and grounded in constructs that are internally consistent and well
thought out. No matter how much is art and how much is science, it is fully
an artifact of the business, economic, social and internal needs of users,
both internal and external. There exists no basis in the natural world for
why things in accounting are the way they are. We have what we have because
accountants agree to apply a set of principles handed down by a group of
policymakers. In a systematic way, developed over many years, policies,
procedures, rules and regulations stand alone and interrelate, explain why
things are done and why things are not done, have been decreed and put into
practice. These policies, rules and regulations are developed to handle
situations large enough and broad enough in scope to merit the attention of
the profession. When developing the set of rules that define and re-define
current accepted accounting practice, it would not be reasonable to expect a
rule developed for every possible transaction. The world is too complicated
for that. It is more logical to have constructs defined in a way that allow
inference and application in the handling of transactions. However, it
would be expected that where rules do exist they be followed, and further,
applied to analogous situations.
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Factors on
Channel Integration Decisions of Taiwanese Manufacturers in the Export
Market
Lanying
Huang, Nova Southeastern University, FL
Chin-Chun
Hsu, Research Fellow, Saint Louis University, Saint Louis, MO
ABSTRACT
The intent
of this paper is to examine the nature of the determinants of export channel
integration decisions of Taiwanese small- and medium-sized exporting
companies and the findings of this study sheds new light on the
characteristics of exporting companies in the newly industrialized
countries. . It provides empirical evidence that the phenomenal
international channel integration of small- and medium-sized Taiwanese
exporting firms is due to a combination of several theory-based factors.
Exporting is the most common way for manufacturers to do business in foreign
markets. Firms still export on a regular and permanent basis even though
they have been long involved in international business arena. In the
beginning of exporting, a firm has to make two strategic decisions, that is,
where and how. Firms first choose the target country to market their
products, and then identify the most suitable type of export distribution
channel structure to use. It is important that alternative structural
arrangements, which entail differing degrees of commitment and risk, should
be considered before initial entry into a foreign market since distribution
structures are difficult to change and the wrong decision may leads to
long-lasting inefficient performance. Several theoretical frameworks have
been offered to explain the distribution mode decision. However, they alone
are not sufficient to explain variation in the degree of channel integration
(Anderson & Coughlan, 1987; Klein, Frazier, & Roth, 1990). The production
cost perspectives (Stern &El-Ansary, 1992) maintains that scale economies
are the basis in deciding channel structure.
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The Role of
Advertising Played in Brand Switching
Dr. Jane Lu
Hsu, National Chung Hsing University, Taiwan
Dr. Wei-Hsien
Chang, National Chung Hsing University, Taiwan
ABSTRACT
Consumer
satisfaction is an important subject pursued in marketing. Since even
satisfied customers would try alternatives for higher satisfaction levels,
customer satisfaction cannot be considered as a sole indicator for brand
loyalty. Brand switching behavior is critical for newly issued brands to
survive in the marketplace at the introduction stage and for firms to
realize how to avoid losing existing customers. This paper examines the
influences of advertising on brand switching behavior among young adults in
Taiwan using survey data. Two durable goods, laptop computers and mobile
phones, and two consumable goods, sports shoes and carbonated drinks, are
considered. Results indicate that for durable goods, a large percentage of
young adults can be classified as innovative consumers and have high
tendencies to switch brands. For consumable goods, multi-loyalty is
common. Consumers with different levels of advertising perceptions have
various possibilities to switch brands. Satisfying and retaining customers
to sustain business are usually firms’ top priorities in marketing
strategies. Customers generate more profits to companies when they stay
loyal to the brands. Loyalty is considered providing fewer incentives for
consumers to engage in extended information searching among alternatives
(Uncles et al., 1998). Hence, advertisements of competitors are less
effectively to be acknowledged by the loyal customers. Since the cost of
retaining a loyal customer is one-fifth the cost of attracting a new one,
serving repeat customers can be cost effective (Barsky, 1994).
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Taxation
of E-Commerce
Dr. S.
Peter Horn, School of
International Management Ecole Nationale des Ponts et Chaussees, France
ABSTRACT
No other
innovation, or way of doing business, has revolutionized the international
economy faster than the Internet. It took generations for the Industrial
Revolution to play out around the world while the Internet Revolution has
unfolded in less than a decade. The speed of this change has been
astounding. In the Industrial Age, as change took place, governments were
able to react accordingly. In the Internet Age, today's innovation is
tomorrow's standard. Government are finding that they must act on Internet
time, which is a daunting challenge. This paper examines the current state
of affairs with regards to the taxation of Internet commerce. It analysis
the historical perspective of the United States of America, the OECD, the
WTO, and the European Union, and attempts to answer the question “What
happens next?”. The biggest standards battle in the history of the digital
revolution has again heated up and the fight is about taxes – taxes on
e-commerce. The unprecedented growth in the Internet during the “internet
bubble economy” highlighted the glaring problems with current taxation laws
that address the remote purchases of goods and services. While these
problems and concerns may have been sidelined during the past couple of
years with the “busting of the internet bubble”, the worsening of the
worldwide economic slowdown and the surfacing of the global war on terror;
they have not been adequately addressed.
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Accounting
Practices for Interest Rate Swap Derivatives
Dr. Raymond
S. Chen, California State University Northridge, Northridge, CA
ABSTRACT
There has
been a tremendous proliferation in the use of derivatives by many companies
in recent years. Some companies utilize derivatives as a type of investment
instrument. Others utilize derivatives as a risk exposure management tool.
With the prodding of the SEC to improve the accounting for and disclosure of
derivative financial instruments, Financial Accounting Standard Board (FASB)
issued SFAS No. 133, “Accounting for Derivative Instruments and for Hedging
Activities,” in June 1998. However, because of the complexity of
derivatives and accounting rules adopted, the effective date of Statement
No. 133 was delayed two fiscal years, to begin after June 15, 2000. This
paper illustrates the accounting principles and procedures for swap
contracts. The illustration of accounting rules applied in swaps will
provide readers with better understanding of accounting rules for
derivatives and how hedging accounting contributed to the complexity of
Statement No. 133. To make the accounting rules for derivatives transparent
and easily understandable, FASB should undertake a comprehensive approach to
account for all financial instruments at fair value when the conceptual and
measurement issues are resolved, regardless if the underlying financial
instruments are hedged or not. Under this comprehensive approach, it will
eliminate the complex and inconsistent hedging accounting rules. With the
lack of accounting guidance and the resulting inconsistencies in accounting
practice for financial instruments and transactions, the FASB decided to add
projects on financial instruments to its agenda in 1986. [1].
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Behavior of
Prices of Oil and Other Minerals over the Last Few Decades: A Comparative
Analysis
Dr. Abdulla M. Alhemoud, Arab Open University, Kuwait
Dr. Abdulkarim S. Al-Nahas, Arab Open University, Kuwait
ABSTRACT
This paper
tries to find out whether the price changes of oil over the last three
decades were significantly different from those of other primary
commodities. The paper examines briefly the changing conditions of the oil
market and investigates the behavior of oil prices during the period 1966 –
2000. The Johansen’s maximum likelihood method was applied to test for
co-integration between oil prices and the prices of non- fuel commodities.
Fluctuations in oil prices were compared with those of other 13 minerals
during the same period. The analysis suggests that the decline in OPEC’s
market share, combined with the rise of the elasticity of the demand for oil
have weakened OPEC’s market power as measured by the relative surplus of
price over marginal cost. The statistical results also suggest that the
coefficient of variation for oil prices during the period 1966-2000 was much
higher than that of other mineral prices. Oil prices enjoyed a much stronger
upward trend than prices of other minerals during the last three decades.
The econometric results suggest that there is evidence of co- integration
between the oil price index and the non- fuel commodity price index. The
prices of most, if not all, primary commodities suffer substantial
fluctuations, particularly over the long- run.
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Leadership in
the Government of the Gambia: Traditional African Leadership Practice,
Shared Vision,
Accountability and Willingness and Openness to Change
Dr. Michael
Ba Banutu-Gomez, Rowan University, Glassboro, NJ
ABSTRACT
Interview
data was obtained from 20 experienced senior Gambia Government Officials in
the seven departments. This study focused only on those influence of
leadership practices which can be termed meaningful practice since the
primary aim of this research was to discover how the influence of leadership
practice in government organizational culture in The Gambia, is associated
through success stories told by senior government officials. The findings
from this study were used to develop a model to help us understand
leadership practice in African government. Many scholars of leadership cite
challenges as the ideal time for leaders to provide their people with the
motivation for change (Schein, 1992). The Gambia is in challenging state
now because it is an African country that depends, on a regular basis, on
aid from countries outside of Africa. The Gambia is in challenges of
self-sustainability. It is suspected that the role a government leader plays
in the organizational culture of the government in The Gambia will
determine, in a significant way, if this nation is able to adapt to future
changes in its internal and external environment. A “Learning” type of
organizational culture is considered by most organizational culture thinkers
to be the most flexible type of organizational culture because members are
open to a process of continual learning of new skills and knowledge. (Kotter,
Senge 1990). The Gambia has a long leadership history and legacy, which
must be examined and understood in order to access current leadership
trends.
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An Empirical
Study on Professional Commitment, Organizational Commitment
and Job
Involvement in Canadian Accounting Firms
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U.S. Earnings
Inequality in the 1990s
Dr. Jongsung Kim, Bryant College, Smithfield, RI
ABSTRACT
Using
weekly earnings data from CPS, this paper attempts to identify and interpret
the pattern of earnings inequality in the U.S. from 1994 to 1999, with a
special emphasis on earnings inequality within and across certain ethnic
groups. Young Hispanic workers with lower education were identified as the
most vulnerable group, White and Asian workers with college education in
their prime age wound up at the other extreme in the earnings distribution.
To reduce earnings inequality, the long term focus should be on the
improvement in educational attainment, worker’s training, and placement of
workers after graduation. The U.S. earnings and income inequality widened in
1980s, and this pattern continued to persist in the early 1990s. Even after
the economic downturn that ended in 1991, the period of growing inequality
persisted as income disparities continued through the early 1990’s (Karoly,
1996). The widening disparity in the 1980s and early 1990s runs counter to
the historical pattern of a narrowing of the disparity in income during the
periods of economic growth (Blank and Card, 1993). After the U.S. economy
experienced a business-cycle trough in 1991, household income continued to
drop until 1993 when median income reached its lowest level for most
demographic groups. However, by year 2000 the U.S. economy has recovered so
remarkably that the median household income was $42,148, reaching the
highest level ever recorded in the Current Population Survey (CPS) in real
terms.
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North American
Free Trade Agreement – Is It Delivering What It Promised?
Dr.
Balasundram Maniam, Sam Houston State University, Huntsville,
TX
Dr. Hadley
Leavell, Sam Houston State University, Huntsville,
TX
Dr. Richard
Thaler, Sam Houston State University, Huntsville,
TX
ABSTRACT
In 1994 the
United States, Canada, and Mexico entered into a trade alliance that we know
today as the North American Free Trade Agreement. The agreement was
constructed to allow for monumental progress to be made in trade flow,
foreign direct investment, and economic liberalization within the region.
Evidence indicates that this alliance has indeed successfully accomplished
many pre-set objectives in a relatively short period of time. The
successful accomplishments achieved by the partners in this alliance could
well establish a model for expansion of bilateral agreements throughout the
hemisphere. Regional trade alliances are formed between countries in an
effort to maximize trade opportunities through preferential access to their
markets for members within the alliance. The 1994 North American Free Trade
Agreement (NAFTA) joined Canada, the U.S., and Mexico into an agreement
intended to increase trade and investment, eliminate tariffs, reduce
non-tariff barriers, and establish provisions concerning the proper conduct
of business in the free trade area. The extent to which this agreement has
achieved its intended objectives is a source of great debate. This study
will examine the data currently available relating to the initiatives of
NAFTA. It will review literature relating to this subject from 1992 to
present. It will begin by specifically identifying the main objectives of
this agreement, which includes the economic and political motivations. The
extent to which NAFTA has successfully accomplished its intended mission
will then be discussed in detail.
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A
Financial Appraisal of Florida’s Environmental Horticulture Industry
Dr. John
Haydu, University of Florida, Mid-Florida REC, Apopka, FL
Dr. Alan
Hodges, University of Florida, Dept. of Food and Resource Economics,
Gainesville, FL
Dr. John
Cisar, University of Florida, Ft. Lauderdale REC, Ft. Lauderdale, FL
ABSTRACT
Information
was collected from 37 wholesale nurseries on sales, production, operating
expenses and net returns in 1999. Nursery products represented among the
sampled firms included container and field-grown woody ornamentals, tropical
foliage, and flowering plants. This information was compared to data from
1990 and 1995 to examine financial changes that have occurred among nursery
businesses. In 1998 the average nursery had annual plant sales of $2.71
million (M), total income of $2.89M, and net firm income of $548 thousand
(K). Firms used an average production area of 55 acres, employed 49
full-time equivalent (FTE) persons, and managed total capital of $5.26M. As
a share of value produced, costs were 34.7 percent for labor, 26.1 percent
for materials, 5.0 percent for equipment/facilities, 10.0 percent for
overhead, 3.8 percent for depreciation, 3.9 percent for interest, and 4.6
percent for management. Net profit margin averaged 18.9 percent and rate of
return on capital investment was 7.9 percent. Compared to previous results
for 1990, firms in 1998 were significantly larger—sales increased 66 percent
in inflation-adjusted terms, production area increased 95 percent,
employment increased 114 percent, total capital managed increased 122
percent, net worth increased 99 percent, and net income increased 45
percent. However, profitability and productivity were lower—net margin
decreased 19 percent, rate of return on net worth decreased 20 percent,
value produced per square foot decreased 11 percent, and inventory turnover
declined 27 percent.
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Structural
Adaptation in the Florida Ornamental Plant Nursery Industry in the 1990s
Dr. Alan W.
Hodges, University of Florida, Food & Resource Economics Department,
Gainesville, FL
Dr. John J.
Haydu, University of Florida, Mid-Florida Research and Education Center,
Apopka, FL
ABSTRACT
The state
of Florida has a large industry for producing ornamental plants, which
continues to grow rapidly. Industry surveys were conducted in 1989, 1994
and 1999 to evaluate economic trends. Survey results suggest that the
industry has undergone significant structural changes during the 1990s in
response to increasing competition and industry maturation. Consolidation
has resulted in larger firms, with the market share for firms having at
least $1 million in annual sales increasing from 74 to 84 percent. Other
economic trends include greater labor productivity, increasing diversity of
ornamental plant products, less seasonality in product sales, a shift in
markets from landscaper to retailer outlets, especially mass merchandise
chains, wider distribution of products outside the state of Florida,
increased forward contracting, increased advertising, and greater use of
telephone contacts for sales. Ornamental plants are the sixth largest
agricultural commodity group in the United States, with a farm level value
of $12.12 billion (Bn) in 1998 (Johnson, 1999). Ornamentals are also the
fastest growing major segment of U.S. agriculture, with sales increasing by
30 percent between 1991 and 1998, representing average annual growth of 2.0
percent in inflation-adjusted terms (Figure 1).
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The Legal
Regulation of E-Commerce Transactions
Dr. Everett
Durante Cordy, Albany State University, Albany, GA
ABSTRACT
E-commerce
is firmly established as the new way to do business in the new economy.
E-contracts, Internet Banking, and digital signatures have become standard
tools of conducting business. How has the law responded to this new way of
doing business? What about torts and crimes that are committed while doing
business in cyberspace? What is the appropriate forum to resolve disputes
that arise when doing business electronically? It is the purpose of this
article to review how the law is dealing with these and other questions
which arise when engaging in e-commerce transactions. Technological
innovation has spawned new ways to transact business. Motivated by concerns
for improvement in profitability, efficiency, speed, competitiveness, and
customer relationship building, businesses have increasingly adopted
technology-based systems to transact business with other businesses, private
consumers and governmental agencies. Despite the recent dot.com shakeout,
e-commerce has emerged as an entrenched part of, and in many instances the
preferred way, transacting business. It has become a fundamental part of
the corporate enterprise. According to Forrester Research, the world
Internet economy is predicted to reach $1 trillion dollars by the end of
2001. On-line advertising is expected to reach $33 billion
worldwide by 2004, and U.S. on-line spending will exceed $6 billion in
2001. North America will lead global e-commerce transactions to $6.9
trillion in 2004, while 60% of the world on-line population and 50% of
on-line sales will be made outside of the U.S. by 2003. U.S. business trade
over the Internet skyrocketed to $251 billion in 2000, up from $109 billion
in 1999.
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The Legal and
Regulatory Response to Predatory Lending in the Mortgage Industry:
With
Emphasis on the State of Georgia
Dr. Everett
D. Cordy, Albany State University, Albany, GA
ABSTRACT
Throughout
the 1990s, the financial deregulation of the consumer financial services
industry has given rise to the rapid growth of the “predatory lending” (or
fringe banking) industry, which includes check cashing outlets, payday loan
companies, rent-to-own stores, high cost first and second mortgage
companies, sub prime auto lenders, traditional pawn shops, and the growing
business of auto title pawn companies. This article examines the legal and
regulatory response to predatory lending in the mortgage industry in the
United States, with an emphasis on practices and legislations in the State
of Georgia. Predatory lending practices have ruined the financial lives of
thousands of vulnerable people, especially the elderly, minorities and
female homeowners. A relatively recent by-product of growth and
diversification in the financial services industry, predatory lending has
grown explosively in the last ten years. “Predatory lending” in general is
the practice of making loans to customers who have poor credit but who have
home equity, and charging high interest rates, loaning amounts that are
beyond the ability of the customer to repay. Often the end result is that
the customer loses the home or is forced to file bankruptcy or must be
rescued by family members. Companies engaged in predatory lending
disproportionately target minorities, low income families, the elderly and
female home owners, according to surveys, presumably because they are
frequently less able than other home owners to understand financial
terminology and have less access to conventional financing (or at least are
less aware than others of alternative methods of financing). The exact
definition of “predatory lending” is a matter of regulation and policy
debate, particularly as pressure mounts to eliminate it.
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Corporate
Governance: A Theoretical Perspective
Dr. Malek
Lashgari, CFA, University of Hartford, West Hartford, CT
ABSTRACT
Corporate
governance mechanism varies significantly among different countries. These
differences appear to be a function of their respective economic structures
and cultures. The underlying reason for these corporate governance systems,
however, is the stakeholders pursuit for preserving their respective share
of profit earned by business enterprises. This paper reviews corporate
governance systems in Germany, Japan, and the United States. While these
countries differ in their respective corporate governance structures, the
basic underlying link among them appears to be explained by existing
theories developed in various branches of science. These theories are well
developed in economics, thermodynamics, and philosophy. Common
stockholders have the right to elect their representatives on the board of
directors of a corporation. Members of the board of directors assume the
responsibility of monitoring, directing and appointing the firm’s managers.
In this manner disperse shareholders are potentially empowered in setting
direction, monitoring performance and controlling distribution of profits of
the corporation. In particular, this internal control mechanism is purported
to integrate the interests of common stockholders and executive managers of
a corporation by rewarding good corporate performance. The board of
directors has the right and responsibility to remove poorly performing
managers. Historically, dissatisfied shareholders have “walked away” from
the corporation by selling their shares at depressed prices and thereby
incurring losses.
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Performance
Measures and Profitability Factors of Successful African-American
Entrepreneurs: An Exploratory Study
Dr. Barbara
L. Adams, South Carolina State University, Orangeburg, SC
Dr. Viceola
Sykes, South Carolina State University, Orangeburg, SC
ABSTRACT
This exploratory study was conducted to determine what financial and
non-financial measures executives of African-American companies perceive as
important and what factors they used to measure their success. The chief
executives of some of the nation’s largest black-owned businesses are making
it clear that they will not be held back by conventions or boundaries that
have plagued many minority owned companies. In spite of the record growth
of black-owned businesses in recent years, there has been little research on
such companies. Data for this study was collected by a survey of the chief
executives of Black Enterprise Magazine’s 100 list, which includes the top
100 industrial/service companies and the top 100 auto dealers, ranked
according to revenue. The results indicate that both financial and
non-financial performance measures and profitability factors are an integral
part of the management strategies employed by “successful” African-American
entrepreneurs. The growth of African-American businesses has been expanding
significantly over the last decade. A report published by the Milken
Institute (1998) indicates that from 1987 to 1992, the number of
minority-owned firms (Blacks, Hispanic and Asian) grew at a rate of 4.7%,
which was double the rate of all U. S. firms. In comparison,
African-American owned businesses increased at a rate of approximately 8%.
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Enterprise Middleware Management:
Enterprise Java Beans (EJB)
Dr. Mustafa Kamal, Central Missouri State University, Warrensburg, MO
Shah Mumin, Central Missouri State University, Warrensburg, MO
ABSTRACT
Java plays
a dominant role in developing programmable web, and object-oriented design
by forcing us to think about our design of inanimate objects in terms of
real-life examples. Enterprise Middleware Management (EMM) seeks to
integrate current legacy systems with the client/server, and the web-based
applications. The Enterprise Java Beans (EJB), seeks to provide
state-of-the-art middleware solutions for today’s complex and ever changing
3-tier to n-tier computing architecture. The J2EE provides “highly
available, secure, reliable and scalable” enterprise applications. Because
of the added layer of Internet and eCommerce, client/server model is somehow
obsolete in web based enterprise application services. Enterprise services
are constructed using distributed applications, consisting of several tiers:
client requesting information, data resources on the back end, and one or
more middleware applications. Integrating current legacy systems with the
client/server, and the web-based applications is a critical component in the
success of EMM. Although a number of approaches are available, EJB seems to
provide a state-of-the-art middle ware solutions for today's complex and
ever changing 3-tier to n-tier computing architecture. Java has
revolutionalized the idea of programmable web and the concept of
object-oriented design. We started to think about our design of inanimate
objects in terms of real-life examples.
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Validating Decision Models in
Operational Research
Dr. Awni
Zebda, Texas A&M University-Corpus Christi, Corpus Christi, TX
ABSTRACT
Over the
years, operation researchers and management scientists have suggested that
decision models should be used only if their benefits exceed their costs.
However, the cost-benefit analysis lacks practical applicability because of
the difficulty of measuring the costs and benefits of models. Thus,
researchers have often used model validity as a surrogate for model value.
This paper examines and evaluates some of the different methods used and/or
proposed for validating models. The understanding of the limitations and
shortcomings of the different validation methods is essential for the
appropriate use of these methods in validating decision models. Decision
analysts and researchers develop quantitative decision models to aid
decision making in business organization. As noted by many researchers
(e.g., Finlay and Wilson [1987], Hill and Blyton [1986]), establishing the
value of these models is a necessary prerequisite for their use by
practicing managers. According to Gass [1983, p. 605], "the inability of
the analyst [and researcher] to demonstrate to potential users ... that a
model and its results have ... credibility" is one of the primary reasons
that decision models are not widely used in practice. The purpose of this
paper is to provide insight into the most widely recommended method for
evaluating decision models, model validity, and its limitations as a means
for establishing the value of decision models. The understanding of the
shortcomings of different validity tests is essential for their effective
use in validating decision models. The paper is organized as follows.
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Gateway Hardware Case; A
computer-based interactive case for an Accounting Principles II course
Michael J.
Krause, Le Moyne College, Syracuse, NY
ABSTRACT
The Gateway
Hardware Case offers a challenge both to academics and to their students.
This case is an expository one (fact-based case) rather than a narrative one
(story-based case). Gobeil and Philips (2001) studied expository and
narrative cases. Among their observations, they found that the narrative-
style case helped “low-knowledge” students do a better job with applying
case facts. The Gateway Hardware Case consists of five modules. (Some
academics may say that such sub-division disqualifies the presentation from
even being called a “case”.) Aside from a possible semantics debate,
research should be undertaken to see if sub-dividing an expository case
improves “low-knowledge” students ability to apply case facts to the extend
that they are able to do so with the narrative style case. As to
undergraduate students, the Gateway Hardware Case gives them an opportunity
to study in detail the end of the accounting cycle when an entity employs a
primitive bookkeeping system. To facilitate this endeavor, the case
requires students to use Microsoft Excel as the means to organize and
refine the original unadjusted data. At the end of the case, the student
should be able to appreciate the value that a CPA firm adds to general
purpose financial statements when undertaking an engagement where the raw
bookkeeping data lacks an accrual accounting focus. Gateway Hardware’s
accounting system is primitive.
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Digital Divide and Implications
on Growth: Cross - Country Analysis
Dr.
Antonina Espiritu, Hawaii Pacific University, Hawaii
ABSTRACT
The growing
importance of information and communication technology (ICT) in today's new
or knowledge-based economy provides many opportunities for countries to
accelerate their economic growth. However, there seems to be a large and
growing gap in terms of access to and use of information and communication
technology among and within developed and developing countries, otherwise
known as the digital divide. Using a sample of 36 countries, this paper
explores the role of ICT on economic growth and tests the existence of
digital divide. The regression results suggest a positive and significant
relationship between internet use and growth. Also, the hypothesis of no
digital divide was rejected and found a significant evidence of differential
growth between developed and developing countries due to difference in
internet access and usage. Developments in information and communication
technology (ICT) have opened up new and different possibilities of economic
and social changes from which developed and developing countries can
potentially benefit. Given the trend in ICT, it does not only accelerate the
diffusion of information and technological know-how but also provide a
virtual setting for instantaneous human interactions and easy access to
global markets. Hence, the potential benefits from an internet-enabled
transformation of business organizations into so-called global production
networks are vast. The internet can help reduce transactional costs as it
can drastically reduce the time it takes to transmit, receive and process
routine business communication tasks. The internet has also expanded the
scope for management of information as browsers can be used to access the
information systems of suppliers and allow business transactions to be
completed much more quickly.
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Using the Problem-based Learning
to Enhance Student’s Key Competencies
Dr.
Chen-Jung Tien, National Taiwan Normal University, Taiwan
Dr. Jui-Hung
Ven, China Institute of Technology, Taiwan
Dr. Shoh-Liang
Chou, National Tao-Yuan Senior Agricultural and Industrial School, Taiwan
ABSTRACT
From the
trends of educational reforms in recent decades, many advanced countries
have viewed the key competencies as important assets of people. The key
competencies are important features of working life and therefore essential
to boost and maintain employment, so that the promotion of the key
competencies has become an integral part of secondary and even in higher
educational systems in many countries. This paper aims to compare the key
competencies among different countries, including the SCANS of America, the
key skills of UK, the key competencies of Australia, and the ten basic
competencies of 1-9 integral curriculum of Taiwan. This paper also explores
the key competencies that can be developed in the problem-based learning (PBL)
and how to use the PBL to enhance student’s key competencies. Because of
the rapid changes in technology, economy and working environment nearly two
decades, many advanced countries have been emphasizing on the development of
key competencies of people to maintain employability and continuing
learning. Raizen (1989) indicates that general skills are new workforce
competencies that enable people working in different workplaces. Such
skills, not restricted in specific workplaces, are the concept of key
competencies. Hereafter, many researches emphasizes the importance of key
competencies, such as “generic skills” of Stasz (1990), “work force basics”
of Department of Labor (SCANS, 1991), “new work skills” of Resnick & Wirt
(1996), and “new model worker” of Flecker & Hofbauer (1998).
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A Theoretical Model for
Matching Entry Modes with Defensive Marketing Strategies
Dr. Mansour Lotayif, Plymouth University, Plymouth, Devon, UK
ABSTRACT
Given the
fact that entry modes and defensive marketing strategies represent two
different streams of literature, it was thought there is no relationship
between them. The following endeavor resembles a thrown stone in a stagnated
lake by trying to match between them. The four pillars: opportunities or
risk offered by each defensive strategy and entry mode; continuity
probability of these risks and opportunities; resources and time needed to
deploy each strategy and entry mode could help facilitate this mission.
Consequently, the two literatures were analyzed and based on certain
assumptions; the matching model has been suggested. Pan and Tse, (2000);
Jean-Pierre and Hennessey, (1998); Miller and Parkhe, (1998); Goodwin
and Elliott, (1995); Woodcock et
al., (1994); Erramilli and Rao, (1993); Erramilli and D'Souz, (1993);
Terpstra and Sarathy, (1991); Dahringer and Muhlbacher, (1991); Erramilli,
(1989); Boddewyn et al., (1986); Sapir, (1982); and Shelp, (1981)
argue that, entry modes could be wholly-owned and fully controlled entry
modes (e.g. branches, subsidiaries, representative and agency offices),
shared-owned and shared controlled entry modes (e.g. joint ventures and
partially mergers and acquisitions), contractual entry modes (e.g.
licensing, franchising, and calculated alliances), and purely marketing
oriented entry modes (e.g. direct and indirect exporting entry modes), as
shown in Figure (1).
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What has happened in the Business
World of On-Line Distance Learning?
Dr. Richard
Gendreau, Bemidji State University, Bemidji, MN
ABSTRACT
On-line
distance education has been around long enough to establish a track record
all over the world. This paper looks at what has happened in the business
world of on-line distance education. There are proposed changes in federal
regulations affecting financial aid with more universities doing on-line
distance education. Both on-line and traditional classroom education are
moving towards assessing the outcomes of their students. The U.S. Department
of education is becoming involved in the accreditation process. Several
institutions have dropped out of the on-line distance education market.
Educational institutions and the U.S. Military are heavily involved in
developing and offering on-line distance education all over the world. The
United States Distance Learning Association defines distance learning as
"the acquisition of knowledge and skills through mediated information and
instruction, encompassing all technologies and other forms of learning at a
distance (Roblyer and Edwards, page 192)." Mediated information is the
information processed between the professor and the student. It is the
exchange of insights (Heerema and Rogers, pages 14 and 16). The text, Instructional
Technology for Teaching and Learning, (Newby, Stepich, Lehman, and
Russel, page 210), defines distance learning as "...an organized
instructional program in which teacher and learner are physically
separated." On-line distance learning courses are offered to students
anytime, anywhere, and anyplace utilizing computers to access the Internet,
computerized presentations, and e-mail (Nasseh, Marklein, and Kauffman).
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Product Architecture and Product
Design: A Complexity Perspective
Dr. Tony
Brabazon, University College Dublin, Ireland
Dr. Robin
Matthews, Kingston Business School, London
ABSTRACT
The
objective of this paper is to develop a conceptual framework which can be
employed to provide insight into the impact of product architecture on the
process of product design of assembled products. The key argument of this
paper is that product design can be considered as a search process which
takes place on a design landscape, the dimension and topology of which is
determined by the choice of physical components and the choice of
architecture of interconnections between these components. Not all design
landscapes offer equal opportunity nor are all landscapes equally difficult
to search. Designers may trade-off these two items. A representation of both
the design landscape and the related search process is constructed in this
paper. Kauffman’s NK model is utilised to examine the impact of
interconnection density and structure on the topology of the design
landscape. The Genetic Algorithm, is introduced as a means of modelling the
learning process implicit in product design. It is argued that the algorithm
can incorporate a variety of relevant search heuristics. The combination of
the NK model and the genetic algorithm provides a framework which through a
simulation methodology, can be used to investigate the impact of different
modular structures on process of product design. This paper examines a
component of the product design problem and has as its objective, the
development of a conceptual framework which is capable of providing insight
into the impact of product architecture on the process of product design of
assembled products, and the evolution of these designs over time.
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Country of Origin: A Critical
Measure in Work Commitment Studies within Multi-Cultural Contexts
Dr. Adela J. McMurray, Swinburne University of Technology, Melbourne,
Australia
ABSTRACT
This
multi-method study examines Country of Origin (COO) as a measure at the
individual level, in the work commitment literature. An International
literature review uncovered that many of the existing empirical studies
appear to share a common oversight in their approach to uncovering work
commitment within multi-cultural contexts. These studies omit to include the
COO variable and in doing so, create difficulties in drawing work commitment
comparisons in multi-cultural contexts, such as Australia and the USA. This
study provides evidence that the inclusion of COO as a measure in
multi-method studies undertaken in multi-cultural contexts has the potential
to yield a more accurate picture of work commitment. Measurement
may be either quantitative or qualitative yet is a central issue in research
because it defines the links between theories and the data used to test
them. Quantitative measurement focuses on the systematic allocation of
values to variables that may signify events, objects, or a person’s
characteristics whereas qualitative measurement focuses on labels, qualities
and names. This
multi-method study using both quantitative and qualitative measurement,
addresses measurement equivalence within a multi-cultural population. The
creation of measurement
equivalence across groups is a reasonable
precondition to carrying out cross-group comparisons but is seldom tested in
organizational research (Vandenberg and Lance, 2000). The theoretical
underpinnings of the methodology in this study departed from the singular
use of rational and scientific models grounded in the Lewinian field theory
dominant in the work commitment literature.
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Measuring Predictive
Accuracy in Agribusiness Forecasting
Dr. Carlos
W. Robledo, Louisiana State University, Baton Rouge, LA
Dr. Hector
O. Zapata, Louisiana State University, Baton Rouge, LA
Dr. Michael
W. McCracken, University of Missouri, Columbia, MO
ABSTRACT
A recurrent
need in business forecasting is that of choosing a best forecasting model. A
model choice is often made by the minimization of a criterion such as the
mean squared error (MSE). The model with lower MSE is considered better for
forecasting; however, the statistical significance of such nominal
differences is rarely questioned, an important concern to a decision maker
who may be undecided about updating an existing model or adopting a new one.
Recent developments in the forecasting literature (Diebold-Mariano, 1995;
Stock and Watson, 1999) introduce out-of-sample tests for significance in
the equality in MSEs. This paper provides an empirical evaluation of these
tests using quarterly data, 1981:3-1999:4 for the U.S. wheat market. Models
are updated using fixed, rolling, and recursive schemes. It is found that
for consumption, inventories, exports, prices and production nominal MSE
comparisons would favor a model over another. However, when testing the
significance in MSE improvements, the results suggest that increments of
even 15% may not justify choosing a new model. A Monte Carlo experiment
warns that nominal differences in MSE comparisons, when post-sample size is
small, may generate only seemingly better forecasting models. Recent changes
in U.S. agricultural policy have encouraged agricultural producers and
agribusiness managers to become more conscious of the need for market
intelligence in agricultural decision-making.
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Teaching the Quality Service
Consulting Project to Business School Students
Dr. Gene
Milbourn, Jr., University of Baltimore, Baltimore, MD
ABSTRACT
This paper
will provide an outline on how to structure a consulting project for
business school students on the topic of quality service. It will suggest a
step-by-step program that a team of students can follow during a 3-4 week
semester segment to develop a set of recommendations to improve the quality
service of an enterprise. Three models are featured: the five-factor
quality service model of Parasuraman, Zeithaml, and Berry; the customer
driven company model of Whitely and the Forum Corporation; and, the customer
value analysis model of Gale. While not intended to be a literature review,
some research is reviewed as appropriate for pedagogical purposes. Compete
surveys, scoring keys, templates for each segment of the consulting project
are provided in the appendices. The cover of Time magazine asked the
question “Pul-eeze! Will someone Help Me?” The accompanying article
reported the deterioration of customer service to be due to the general
economic upheavals such as high inflation, labor shortage, and low-cost
business strategies. Prices increased 87% during the 1970’s and to keep
prices from further skyrocketing, customer-service training was slashed and
computers and self-service schemes were introduced in wholesale fashion [Time,
1987]. Businesses were seen to have developed the same habits and
inattention to quality service that had plagued American manufacturers on
the quality issue in years past. Today, e-commerce retailers are forcing
the bricks-and-mortar businesses to upgrade their customer focus to be
competitive. Data now exists that suggest that the economic well being of
companies fluctuate with the quality of service.
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Personalization and Customization
in Financial Portals
Dr. Altan Coner, Yeditepe University, Istanbul, Turkey
ABSTRACT
In today’s Internet economy,
customers have more choices than ever. Their expectations for individualized
and special treatment from corporations have never been more demanding. As
an important segment of Internet economy, in order to meet their customer
expectations, financial institutions present personalized and customized
solutions to catch one-to-one relationships with their customers. Therefore,
transforming raw data of customers into meaningful recommendations or
suggestions become an important process for financial portals. Moreover, the
concept of personalization and customization has expanded in scope to
emphasize a much broader notion of customer relationship management (CRM).
CRM takes personalization and customization from a portal technology to a
corporate philosophy where the understanding of customer experience and
behavior in a portal becomes a critical issue for the enterprises. This
research paper examines preferences of customers regarding personalization
and customization in financial portals. In marketing history, we can see a
number a different philosophies that guide a marketing effort. From mid
C19th to early C20th, during industrial revolution, production concept was
widely accepted. According to production concept, demand for a product was
greater than supply. As Henry Ford mentioned, "Doesn't matter what color car
you want, as long as it is black.”
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Work Values Ethic: A New
Construct for Measuring Work Commitment
Dr. Adela J. McMurray, Swinburne University of Technology, Melbourne,
Australia
Dr. Don
Scott, Southern Cross University, Lismore, Australia
ABSTRACT
This study
reviews recent research on work ethic constructs and the resultant
development of a construct for measuring a work values ethic in an
Australian manufacturing environment. The
construct was tested for validity, using confirmatory factor analysis and
was found to represent a valid measure. It was also tested for reliability
using Cronbach’s alpha and showed a satisfactory level of reliability in
line with other previously developed measures for this construct. The
findings suggest that, in an Australian manufacturing context, the
Protestant Work Ethic (PWE) is not a valid construct and should be replaced
by the Work Values Ethic (WVE) construct. There are six forms of work
commitment, which are regarded as being relevant to an employed individual,
five are universal and one is non-universal. The universal forms of work
commitment are: work ethic endorsement, which encompasses the importance of
work itself including 'Protestant Work Ethic'; Job Involvement, which
relates to the extent to which one can identify with and is absorbed in
one's job; affective (attitudinal) Organizational Commitment, which refers
to an individual's emotional attachment to their organization; Calculative
Commitment, which deals with an individual's perceived costs of leaving the
organization; and Career or Professional Commitment, which relates to the
importance an individual places on their occupation for each form of work
commitment. Union Commitment is regarded as the non-universal form of work
commitment because its applicability is declining in various countries
namely the United States (Morrow, 1993).
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Human Resource Management
Practices, Strategic Orientations, and Company Performance:
A Correlation Study of Publicly
Listed Companies
Dr. Simon
K. M. Mak, City University of Hong Kong, Hong Kong
Dr. Syed
Akhtar, City University of Hong Kong, Hong Kong
ABSTRACT
This study
examined the relationships of human resource management practices with
strategic orientations of organizations and their financial performance. The
human resource management practices included job description, internal
career opportunity, job security, profit sharing, training, performance
appraisal and voice mechanisms. Strategic orientations comprised cost,
quality and innovation. Data were collected from 63 publicly listed
companies through a questionnaire that contained objective measures of human
resource management practices and subjective measures of strategic
orientations. Company performance was measured in terms of return on equity.
Correlation analysis indicated that only job description and profit sharing
correlated positively and significantly with the company performance across
both managerial and non-managerial employees. Except for internal career
opportunity, other human resource management practices were associated with
one or more strategic orientation. Results favour a mixed approach to the
adoption of human resource management practices based on both strategic
orientations and company performance. In recent years, researchers have
focused on how a firm’s employees can collectively be a unique source of
competitive advantage that cannot be imitated by competitors (Barney,
1991). Human resources are not
as readily imitated as equipment or facilities are.
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Usable Web Based
Simulated Annealing and Tabu Search for the Facility Layout Problem
Dr. Hong-In Cheng, Iowa State University, Ames, Iowa
Dr. Patrick E. Patterson, Iowa State University, Ames, Iowa
ABSTRACT
Facility
layout problems arise commonly in manufacturing systems where it is desired
to minimize material handling cost. Typically, heuristic methods are
developed to solve these problems because of the inefficiencies and
restrictions of optimal methods. To solve facility layout problems on the
World Wide Web (WWW), we chose the quadratic assignment problem (QAP)
formulation and two intelligent search heuristics. Java was used to program
several applets. We first solved an unknown QAP using simulated annealing
(SA) and tabu search (TS) methods programmed in C/C++. Through result
comparison SA and TS were verified as useful heuristic methods for this
problem type. Efficient values of the search algorithm variables that
provide good solutions while minimizing CPU time are recommended. Web based
simulated annealing (WBSA) applets that present layout solutions and the
total layout costs were then developed. The WBSA applet was tested on a
well-studied QAP, comparing competitive configurations with other
heuristics. A TS applet developed to perform web based tabu search (WBTS)
was also shown to be a good method for providing useful layouts. Finally
practical rules are presented for interactive interface design of web-based
program by the usability test. A facility layout represents the spatial
arrangement of all facilities in a manufacturing system. It represents the
spatial assignment of workstations, machines, material handling facilities,
storage spaces and offices.
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Measurement of Intangible Success
Factors in Four Case Organizations
Dr. Antti
Lönnqvist, Institute of Industrial Management, Tampere University of
Technology, Finland
ABSTRACT
This paper
focuses on the measurement of organizations’ intangible success factors.
They consist of the amount and quality of intangible assets, the use of
intangible assets and the actions related to intangible assets. Their
management and measurement is considered important because of the critical
role of intangible assets for many organizations. Although several methods
have been developed for measuring intangible success factors, there are
problems in applying them in practice. The topic is analyzed both
theoretically and empirically. The research questions are how the intangible
success factors to be measured are chosen, what they are like, and how they
are measured. Four case studies are presented and analyzed in order to
provide concrete examples and to discover answers to the research
questions. Intangible assets consist of, e.g., the employees’ competencies,
organization’s relationships with customers and other stakeholders, culture,
values, image and management processes (See e.g. Edvinsson and Malone 1997
or Sveiby 1997). They
are critical for most organizations. Thus, the management of intangible
asset has emerged as an important practice and a research area (Petty and
Guthrie 2000, p. 161). Performance measurement of intangible assets is also
an active research area. There are several methods available for measuring
intangible assets. However, organizations have not widely adopted them (Lönnqvist
2002; Nordika 2000) and none of the newly developed measurement tools have
been commonly accepted.
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Subjective Productivity
Measurement
Dr. Sari
Kemppilä, Tampere University of Technology, Finland
Dr. Antti
Lönnqvist, Tampere University of Technology, Finland
ABSTRACT
Productivity is an important success factor for all
organizations and, thus, it should also be managed. Productivity measurement
is a traditional tool for managing productivity. There are several different
methods for productivity measurement. In certain situations, these
traditional methods may not be applicable suggesting that there is a need
for other kind of measures. An alternative approach for the traditional
methods is subjective productivity measurement. Subjective productivity
measures are not based on quantitative operational information. Instead,
they are based on personnel’s subjective assessments. The data is collected,
e.g., using questionnaires. The objective of the paper is to present
subjective productivity measurement as a new and potential managerial tool
for productivity measurement. In addition, some evidence regarding the
practicality and usefulness of the method is presented. The paper is based
in reviewing studies in which subjective productivity measurement has been
used. At the moment, there are only a few experiences regarding the use of
subjective productivity measures. There are several problems regarding the
validity, reliability and practical using principles of the measures.
Despite the problems, subjective productivity measurement appears to be very
potential method for measuring productivity in situations where the
objective methods fail. Productivity is an important success factor for all
organizations. Improvements in productivity have been recognized to have a
major impact on many economic and social phenomena, e.g. economic growth and
higher standard of living. Companies must continuously improve productivity
in order to stay profitable. Therefore, productivity should also be managed.
Productivity measurement is one traditional and practical tool for managing
productivity. (See
e.g. Uusi-Rauva and Hannula 1996; Sink 1983).
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United States Versus
International Financial Statements
Dr. Gurdeep
K. Chawla, National University, San Jose, CA
ABSTRACT
The
Securities and Exchange Commission (SEC) requires foreign companies offering
their securities in United States (US) exchange markets to restate or
reconcile their financial statement according to US Generally Accepted
Accounting Principles (GAAP). The requirement is designed to provide
domestic investors with standardized financial information which can be used
in making appropriate investment decisions. However, the requirement makes
it more expensive for foreign companies to do business in US. This study
will evaluate the quality of financial information provided by US GAAP and
compare it with the quality of financial statements prepared according to
International Accounting Standards (IAS). A sample of standards issued by
International Accounting Standards Board (IASB) will be compared against the
US GAAP. The standards selected for comparison are based upon major
differences noted in form 20-F, reconciliation or restatement of financial
statements prepared according to foreign accounting standards to US GAAP
filed by foreign companies with SEC, and outlined by other authors and
experts such as "Doing Business" series by Price WaterhouseCoopers. The
study will be helpful in determining whether SEC should continue to require
restatement or reconciliation of foreign statements according to US GAAP. It
will also be beneficial to IASB in evaluating its accounting standards and
need, if any, for developing additional standards in its efforts to
harmonize accounting standards across national boundaries.
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Exchange Rate Crises and Firm
Values: A Case Study of Mexico’s Tequila Crisis
Dr. Cathy
S. Goldberg, University of San Francisco, San Francisco, CA
Dr. John M.
Veitch, University of San Francisco, San Francisco, CA
ABSTRACT
Exchange
rate crises that lead to large devaluations in a country’s currency
generally result in significant economic disruptions for that country. One
group of firms, however, is expected to benefit from this event –
export-oriented firms. A significant devaluation should raise an exporter’s
profits as the increase in the value of foreign currency revenues brings
higher expected future profits. In an efficient market, the value of export
firms should be less affected by a currency crisis than firms that are
primarily focused on the domestic economy. We conduct an event study of the
effects of the 1994 Tequila crisis, and consequent peso devaluation, on a
cross-section of Mexican firms. We find that export firms as a whole
outperform non-export firms in the months after this crisis. In corporate
finance, the value of a firm should equal the present discounted value of
its future free cash flows. A firm’s Free Cash Flows (FCF) depend crucially
on the interplay between its revenues and expenses. To the extent that a
firm’s revenues and expenses are in different currencies, exchange rate
changes will change the firm’s future FCF’s in its home currency and
therefore the market value of its stock. A firm whose expenses and revenues
are primarily generated within the local economy may be negatively impacted
by a currency crisis that produces a significant devaluation of the domestic
currency. To the extent the currency crisis results in a sustained
contraction of the domestic economy, non-export firms may experience
declining unit sales, revenues and profits.
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Improving Quarterly Earnings
Estimates: The Predictive Ability of the Cash Reinvestment Ratio
Dr. Wray E.
Bradley, The University of Tulsa, Tulsa, OK
ABSTRACT
Quarterly
earnings per share forecasts are widely used by securities analysts,
investors, management, and auditors. One of the best mathematical models
for forecasting quarterly earning per share is the Brown-Rozeff univariate
ARIMA model (Brown and Rozeff, 1979). This model has been shown to
outperform other univariate models and is considered a benchmark generally
specified parsimonious model (Lobo and Nair, 1990; Lorek, et. al, 1992). In
this study, the Cash Reinvestment Ratio (CRR) is used as a transfer function
in a firm specific bivariate ARIMA model (enhanced model). The enhanced
model outperforms the benchmark Brown-Rozeff model in terms of Mean Absolute
Percentage Error (MAPE), Mean Square Error (MSE), and Mean Absolute Error
(MAE). The implication of these findings is that the inclusion of
appropriate cash flow information, that serves as a proxy for economic
events that are not yet represented in the accounting earnings stream, can
result in better time-series forecasting models. This is an important
finding since time series models are often a preferred tool for forecasting
quarterly earnings per share. The accuracy of forecasting models used by
management and financial analysts is often superior to mathematical models.
It has been suggested that this is because management and analysts
incorporate proprietary information not available to the public into their
models (Collins and Hopwood, 1980; Chatfield, Moyer and Sisneros, 1989).
However, some researchers have challenged the contention that information
outside the general public purview is a significant source of firm
valuation.
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The Effects of
the EC Banking Directives on Greek Financial Institutions
Dr. Cathy S. Goldberg, University of San Francisco, San Francisco, CA
Dr. Themis D. Pantos, University of San Francisco, San Francisco, CA
ABSTRACT
This paper analyzes changes in systematic risk and in shareholder wealth for
banks and investment firms in Greece resulting from the introduction of the
European Community Banking Directives. We examine the changes in the return
structure of these institutions as the Banking Directives unfold. Our
results indicate that systematic risk increased because of these particular
Directives for both banks and investment firms. The effect on shareholder
wealth, however, for both groups was neutral.Trading blocs have played an
increasingly important role in the liberalization of trade flows during the
1990’s. In the realm of financial services these liberalization efforts
within trade blocs have taken the form of the harmonization of regulatory
regimes across member countries. These harmonization initiatives generally
entail the opening of previously closed markets in banking and investment
services to increased competition. As a result, financial institutions have
been forced to abandon their previous focus on domestic capital markets and
turn increasingly to the regional or international arena to survive. This
paper examines the economic implications of moving from a segmented
financial system to a universal one, with special reference to how the EC’s
“Banking 1992” initiatives impacted the Greek banking system. The
literature on regulatory regime changes is ambiguous as to the effect on
shareholder wealth and systematic risk. Competition may increase profit
volatility but also increase mean expected returns as a result of cost
savings. Decreased regulation may allow institutions to diversify more
effectively, reducing their systematic risk, or enter riskier areas,
increasing their systematic risk. It is clear the net effect of various
regulatory reforms on Greek banks and investment firms becomes an empirical
question.
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Cointegration and the Causality
Between the Real Sector and the Financial Sector of the Malaysian Economy
Dr. Mazhar
M. Islam, Sultan Qaboos University, Al-Khod, Oman
ABSTRACT
This paper
investigates the long-run equilibrium relationship, and the causality
between the financial and the real sectors of the Malaysian economy
using monthly observations from March 1990 through May 2001. The financial
variables are interest rate, inflation rate, exchange rate, stock return,
and real sector is proxied by industrial productivity. Augmented Dickey
Fuller & Phillips-Perron unit root tests are applied to check for
stationarity in each series. Unit root tests show all variables are
non-stationary in levels, but stationary in their first differences.
Johansen multivariate cointegration test supports the long run equilibrium
relationship between the financial sector and the real sector. The Granger
test shows unidirectional "Granger causality" between the(financial sector
and real sector of the economy. Studies on the short and the long-run
relationships between economic variables are abundant, especially with
respect to developed countries. Among others, most recently Maysami and Hui
(2001) examined the short-run and the long-run relationships between stock
returns and interest rate, inflation, money supply, exchange rate, real
economic activities of Japan and South Korea. Using Hendry's (1986)
general-to-specific approach to error correction modeling during the period
Q1 1986 to Q4 1998, their results suggest the existence of cointegrating
relationships between macroeconomic variables and the stock returns of the
two countries. However, they argued that the type and extent of the
relationships differ depending on each country's macroeconomic setting.
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An Examination of Cross-Cultural
Negotiation: Using Hofstede Framework
Dr.
Lieh-Ching Chang, Shih-Hsin University, Taiwan
ABSTRACT
A
successful cross-cultural negotiation requires an understanding of others
and using that understanding to realize what each party wants from the
negotiation. The international negotiation experts understand the national
negotiation style of those on the other side of the table, accept and
respect their cultural beliefs and norms, and are conscious of personal
mannerisms and how they may be viewed by the other side. In the past decade,
many significant cross-cultural researches have explored differences between
Chinese and North Americans in both interpersonal and organizational
contexts. Citizens of both countries acknowledge they do not know much about
each other, though they hold definite stereotypes of each other (Gudykunst
1993). However, the growth in international trade between Chinese and North
Americans in recent years necessitates a better understanding of customs and
expectations in cross-cultural negotiations. Therefore, there are many
researchers have sought to examine and detail the similarities and
differences between Chinese and North Americans. This study is to explore
cultural variations using Hofstede’s (1980, 1991) framework in Chinese and
North Americans. Because culture is so important in the negotiation process,
this paper will also review the five cultural dimensions of Hofstede (1991)
and place these in both societies. With the globalization of product
markets and expansion of economic activities across national borders,
cross-cultural differences are emerging as a significant factor in the
management of organization (Redpath and Nielsen 1997). In recent years, an
economic power has forged in China. When the economic situation becomes
recession around the world, China looks like an awakening sleeping lion.
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Aligning
Training and Organizational Performance Goals Via Simulation
Dr. J. D.
Selby-Lucas, East Carolina University, Greenville, NC
Dr. William
Swart, East Carolina University, Greenville, NC
Dr. Charles
S. Duncan, Army Training Support Center, Ft. Eustis, VA
ABSTRACT
Simulation
has been used for some time to forecast labor requirements, redesign
facility layouts, and examine employee and customer traffic flow. However,
when industry and government consider extending the use of simulation to
study the alignment of training and organizational performance goals and the
impact of implementing those goals at the frontline level of activity,
organizations will realize substantial benefits. Alignment of
organizational performance goals and training is not something that has
always concerned us. It seems easier to busy ourselves getting better and
better at doing those things that may no longer need to be done. Improving
process can become all consuming, regardless of whether anyone is really
benefiting from the products. Changing product lines, or re-organizing can
consume large amounts of energy, and "may" prove fruitful, but one really
does not know until all the data is in, and then and only then can we tell
if the new line is selling, and if people know how to produce the new
products with consistent quality. Many a company touts a corporate goal or
vision as an expression of their guarantee to the consumer. Phrases
including words as quality, service, excellence and other similar
superlatives are commonly communicated guarantees from corporate
advertisers. However the same people who approve the slogans have little
way of knowing whether corporate changes announced from the Headquarters
will be implemented in such a way as to guarantee the company’s quality goes
unaltered. How then does one go about aligning the training programs of an
organization with the organizational performance goals? A primary key to
organizational growth is the proper training and alignment of personnel, in
relation to agency goals and ultimately corporate goals.
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Databases, Data
Mining and Beyond
Dr. Shamsul Chowdhury, Roosevelt University, Schaumburg, IL
ABSTRACT
The paper presents the uses of data mining techniques on databases and
explore the possibilities of using CBR methodology to represent the
knowledge mined (gained) from the databases for developing useful system
for decision support. A database on injuries was used as a front-end to
develop a case-based reasoning (CBR) application for decision support. The
preliminary results obtained and experiences with data mining on
databases/data warehouses are satisfactory when it concerns knowledge
extraction, case representation, retrieval, refinement, reuse ant retainment
in CBR. These new emerging technologies (data warehousing, data mining and
CBR) could be combined together for implementing application oriented
information systems in different service sectors for example in health care,
for improved, efficient and cost-effective services. Database applications
can be found in many areas, such as in business, medicine and other
scientific and socio-economic areas. The information content in an
operational database can broadly be classified into two main classes (Sundgren,
1981). Operative information: which is absolutely necessary for a
certain operation to be performed in the object system; Directive
information: which is not absolutely necessary, but could be extremely
valuable in improving the quality of an operation. Data, which is an asset;
captured in different operational databases (for example: clinical
databases, demographic databases, etc.) over time could further be
extracted, transported and integrated together in data warehouses (DW)/data
marts for building decision support facilities/systems. Data marts are
subsets of DW’s ( Sperley, 1999).
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Macro-Finance: Application of
Financial Economic Theory for Implementing Macroeconomic Policy
Dr. Ronald W. Spahr, University of Illinois at Springfield, Springfield, IL
Dr.
Mohammad Ashraf, The University of North Carolina at Pembroke, Pembroke, NC
Dr. Nancy
Scannell, University of Illinois at Springfield, Springfield, IL
Dr. Yuri I.
Korobov, Saratov State Socio-Economics University, Saratov, Russia
ABSTRACT
We
define macrofinance as the application of traditional financial economic
theory to the macro-economy postulating that macroeconomic activity results
from aggregate effects of all domestic private and public saving,
investment, net international trade and consumption decisions. We
suggest that a single economic policy objective should be the maximization
of the composite wealth of the country’s stakeholders, the country’s total
population. This national welfare objective is analogous to the financial
economic objective of maximizing shareholders' wealth in the case for a
single firm. Maximizing owners’ wealth for a single firm involves the
discounting of future cash flows (usually dividends) accruing to the firm’s
shareholders. For a nation’s economic welfare, a parallel concept may
be operationalized by maximizing the present value of a country’s long-run,
sustainable, real standard of living, i.e., maximizing discounted future
cash flows associated with the consumption component of GDP. We apply the
macrofinance methodology to identify characteristics of macroeconomic
policy, which may be less transparent given current objectives of economic
policy. The multiple objectives of traditional monetary policy was
articulated in the United States of America Employment Act of 1946, but
since has become the cornerstone of macroeconomic policy for many
countries. The objectives of traditional monetary policy have been
interpreted to include shorter-term stabilization of price levels, control
of employment and growth levels, stabilization of money and capital markets,
and balancing of trade.
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Business Intelligence: Empirical
Study on the top 50 Finnish Companies
Dr. Mika
Hannula, Tampere University of Technology, Finland
Virpi
Pirttimaki, Tampere University of Technology, Finland
ABSTRACT
Comprehensive and timely information and knowledge is crucial in generating
new products and improving business operations. Business Intelligence (BI)
plays a central role in producing up-to-date information for operative and
strategic decision-making. This study was carried out in order to find out
what BI represents for Finnish large-scale companies in the year 2002. The
study is the first comprehensive study of its kind in Finland. Telephone
surveying was used as the primary research method in this study. Individuals
responsible for BI activities in the top 50 Finnish companies were
telephone-interviewed. Before the actual interview the questionnaire was
sent to the interviewees. The response rate reached 92 percent forming a
sound basis for the study. The objective of this study is to find out how
common the BI activities are and how BI is currently applied in large
Finnish companies. The study examines the initiation and organization of BI
activities as well as the future prospects concerning BI activities in the
companies interviewed. The research will also examine the key areas of
improvement in BI activities, benefits gained from BI as well as the future
outlook for the field. The companies researched in the study are categorized
into three groups by industry: manufacturing, trade and services, and
information and communication technology (ICT). In recent years, Business
Intelligence activities have increased significantly in Finnish companies.
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New Directions
for Human Resources in 2002 and Beyond
Dr. Sandra
Casey Buford, Lesley University, Cambridge, MA
Dr. Maria
Mackavey, Lesley University, Cambridge, MA
ABSTRACT
This paper
seeks to understand the current HR environment and proposes some ways to
work effectively within the present environment. We examine the HR role
against Ulrich’s model that defines the roles of successful HR professionals
as Strategic Business Partner, Administrative Expert, Employee Champion, and
Change Agent. Ulrich and others (Gubman (1998), Kanter, Drucker, Hammer and
Becker) have made a compelling case that the competencies defined by each of
these four roles contribute to successful HR practice. The Masters of
Science in Management Program in Human Resources Management at Lesley
University has articulated a curriculum that is designed to develop
competencies in each of these four areas of HR practice. It is our
contention that the post September 11th environment—marked by
uncertainty about the future, failure of corporate boards to exert ethical
oversight and the ensuing CEO scandals, together with the downturn of the
economy—all are challenging HR’s role as employee champion, business partner
and change agent. Instead, in an increasingly reactive mode, HR
professionals find themselves focusing on the more fire-fighting and
administrative aspects of their role – firing, hiring, and acting as legal
custodians of their organizations. Our paper briefly describes the major
changes the Human Resources profession has undergone since 1970 when it was
known as “Personnel.” The role of Personnel professionals was primarily
reactive in nature. Managers used Personnel professionals to get hiring,
firing, payroll and benefits accomplished. These HR roles were traditionally
defined as HR Generalist, Employee Relations Specialist, Compensation
Analyst, and Recruiter.
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Do Malaysian Investors Overreact?
Dr.
Ming-Ming Lai, Multimedia University, Malaysia
Dr.
Balachandher Krishnan Guru, Multimedia University, Malaysia
Dr. Fauzias
Mat Nor, University Kebangsaan Malaysia, Malaysia
ABSTRACT
This paper
provides a comprehensive examination of investors’ long run overreaction by
integrating firm size, time-varying risk, and sources of profits on the
monthly returns of all stocks listed in the Malaysian stock market over the
period from January 1987 to December 1999. The results indicate evidence in
favor of long run overreaction in both models with and without control for
firm size. The results tend to suggest that the one to two- years contrarian
strategy of buying loser stocks and selling winner stocks. The integrated
results indicate that the contrarian profits gained are mainly due to the
overreaction factor rather than firm size effect and time-varying risk.
Notwithstanding the evidence of overreaction not being a manifestation of
small firm size effect, the overreaction of the loser portfolios were more
apparent in the smaller firms than in the larger firms after controlling for
firm size. The experience of investing has always been dynamic and
uncertain. In theory, financial models assume that investors are rational.
Rational investors have access to all information and use all the available
information in making their financial decisions. They maximize their
expected utility and behave rationally. In reality, Bensman (1997) argued
that not only are the species of truly rational people rare, and in fact
they may not exist at all. Investors who are merely normal human beings with
characteristics of sentiment, regret, and fear tend to look for familiar
patterns in predicting future stock prices in a volatile financial market.
Investors think that a trend will continue simply because there has been
such trends in recent financial markets as studied by Tvede (1999).
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Competitive Strategies, Strategic
Alliances, and Performance in International
High-Tech Industries: A
Cross-Cultural Study
Dr. Minoo Tehrani, Western New England College, Springfield, MA
ABSTRACT
This
research empirically investigates the type of association between
utilization of distinct patterns of competition and superior performance
across sixteen segments of high-tech industries in the U.S. and European
Union. In addition, the link between strategic alliances and performance
differentials is explored. The results provide insight into similarities
and differences in gaining competitive advantages for high-tech firms in a
cross-cultural setting. Identification of factors that give rise to
competitive advantage has been a central theme of strategic management
research. Among the salient factors contributing to the superior
performance of firms, two constructs, competitive strategies and strategic
alliances, have been the focus of several studies. Utilization of distinct
patterns of competition along differentiation, low cost, and focus
strategies and positive association to performance of firms have empirical
support in strategic management literature (e.g., Baum, Locke, & Smith,
2001; Dess & Davis, 1994; Dowling & McGee, 1994; Porter, 1980, 1985).
However, the findings of research on the relationship between engagement in
alliances and superior performance are contradictory. Several studies
report general support for the positive significant association between
strategic alliances and performance (e.g., Astley & Fombrun, 1983; Bresser &
Harl, 1986; Dunford, 1987; Powell, Koput, & Smith-Doerr, 1996).
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An Evaluation of Consumer and
Business Segmentation Approaches
Dr. Turan
Senguder, Nova Southeastern University, Ft. Lauderdale, FL
ABSTRACT
The word
"market" is specific location where products are bought and sold. There are
few market segments but the most common ones are consumer and business
market segments. Consumer markets include individuals in their household
who intend to consume or benefit the purchased products. Business markets
consist of individuals, groups or organizations that purchase specific kinds
of products for the purpose of using them to produce other products, to
resell or to facilitate the organization's operations. Marketers use two
general approaches to identify their target markets-total market approach
and the market segmentation approach. The total market approach: An
organization sometimes defines the total market for particular products as
its target market. When a company designs a single marketing mix and
directs it at an entire market for a particular product, it is using a total
market approach. The total market approach can be effective under two
conditions. First, a large proportion of customers in the total market must
have similar needs for the product. For example, one size shoe fits
everyone. Second, the organization must be able to develop and maintain a
single mix that satisfies customers' needs. When a company takes the total
market approach, it sometimes employs a product differentiation strategy.
Product differentiation is a strategy by which a firm aims one type of
product at the total market and attempts to establish in customers' minds
the superiority and preferability of this product relative to competing
brands.
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The American Academy of Business
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