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A Pathway to Sustainable Business Success in SMEs Through Innovative Leadership Processes and Synergizing Principles

Brad Nikolic, CQUniversity, Australia

Dr. David Robinson, Professor, CQUniversity, Australia

ABSTRACT

The purpose of this paper is to present a conceptual model to enhance leadership effectiveness and to introduce the concept of synergy into mainstream leadership theory. In essence, there are four key elements to effective and sustainable leadership, namely ethical foundation, authentic action, charisma and transformational intent. These are combined sequentially indicating a step-wise progression. There are also seven synergizing principles, namely utility, attraction, visualization, recognition, evolution, reciprocity and serendipity, each of which exerts influence on the flow of energy within firms, and which in combination produce synergistic forces that inter-relate with Vortex Leadership, potentially accelerating the firm toward its goals. Small and Medium sized Businesses (SMEs) in the modern-day have great opportunities to compete among global players, through the rise of the information society, globalization and shifts in social structure. Yet financial impacts such as the Global Financial Crises (GFC) and increasing social responsibilities are elements with which all business leaders are confronted. Hence, innovative leadership is more important than ever to ensure a competitive edge for the SME. Leadership has become an interdisciplinary field, through increased research from other disciplines such as the social sciences (Avolio, Walumbwa, & Weber, 2009; Rosenbach & Taylor, 2006). Business leaders need to ensure short-term success as well as keeping an eye on long-term business sustainability. Thus, task orientation continues to be important as ever and stakeholder engagement has become even more essential in contemporary leadership approaches. In this paper we explore the necessity for an innovative leadership framework, proposing that SME leadership must have an ethical foundation model based on energy flow. The modern-day business environment adds new and complex challenges to business leaders, which reflect a paradigm shift of peoples’ values through new technologies, environmental concerns or cultural transformation (Euwema, Wendt, & van Emmerik, 2007; Martin & Ernst, 2005; Schierenbeck & Wöhle, 2012).

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Historical Perspectives of Corporate Governance: Have the Increased Regulations Changed Corporate America?

DeLeah Vogt, Sam Houston State University, TX

Dr. Balasundram Maniam, Sam Houston State University, TX

Dr. Hadley Leavell, Sam Houston State University, TX

ABSTRACT

Corporate governance in America can be traced back to the first corporations chartered in the U.S. during the nineteen century; however, the corporate governance requirements from the nineteenth century are minimal when compared to the regulations posed on corporations today. The past decade brought about significant changes to corporate governance regulations, which are now imposed on publicly-held corporations. Corporate accounting scandals involving major corporations like Enron, WorldCom and Adelphia led to major legislative reform with the passing of the Sarbanes-Oxley Act (SOX) in 2002, which changed the landscape of corporate governance entirely. Another round of corporate failures plagued the American economy as a result of the financial crisis of 2008; more governmental oversight was added to corporations. As early as the 1800’s, corporations in the USA were established with legislation that required corporate responsibility to shareholders. The American corporate structure originated in England; it provided a corporate framework including the Joint Stock Companies Act of 1844, which allowed corporations to define their business purpose and the Limited Liability Act of 1955 gave shareholders limited liability (Grant, 2003). Further legislation addressed issues for corporations that were chartered in America. In 1881, the Supreme Court of Massachusetts rendered a ruling in Davis v. Old Colony Railroad Company stating that corporations were restricted to their business purpose as stated in their corporate charter and corporate directors were not allowed to spend shareholder funds on any activity that was not part of the business purpose for which the corporation was created (Grant, 2003).

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The Staying Power of Unpopular Projects: Clues from the Movie Industry

Dr. Wayne J. McMullen, Pennsylvania State University, PA

Dr. Raj Varma, University of Delaware, DE

ABSTRACT

We examine the enduring power of unpopular projects with very limited appeal within the context of hypotheses suggested by extant theoretical research. Based on value or profit maximization being the ultimate motive for a manager, the Shareholder-Interest Hypothesis asserts that the survival of unpopular projects emanates from some competitive advantage inherent to firms investing these projects. The Management-Interest Hypothesis, on the other hand, suggests that managers continue making unpopular projects because such projects maximize managerial private benefits like prestige or job security from risk minimization. Although our findings document substantial private benefits to managers choosing to undertake real investments in unpopular projects, these benefits seemingly do not lead to suboptimal investment decisions. Why do firms invest in unpopular projects? Extant theories in finance prescribe that in the absence of capital constraints, managers acting in the interest of a firm’s shareholders should accept unpopular capital projects as long as they are associated with positive net present values, irrespective of the unpopularity of these projects. Similarly, theories in accounting recommend that managers should proceed with unpopular projects providing their accounting returns (revenues divided by costs) are greater than zero. In contrast, agency theories assert that managers may choose unpopular projects for a variety of private benefits arising from career and other concerns. What remains puzzling is how such projects could have any enduring power if these projects only provided private benefits to managers. We examine the above mangerial motivations for investing in unpopular projects by conducting an empirical analysis of documentary movie projects.

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Toward a Unified View of Customer Relationship Management

Dr. Joseph O. Chan, Roosevelt University, Schaumburg, IL

ABSTRACT

Competitions in the new economy have caused major changes in business strategies from internal product focus to value creation along the demand and supply chains. Companies are extending their operational and decision structures to include those of their customers, suppliers, distributors, and alliance partners. Product-centric strategies are replaced by customer-centric strategies that facilitate value creation. Focuses on transactional efficiency are replaced by new requirements to integrate and optimize the value chains between the customer, the firm and its extended enterprise. Disparate business processes and systems, compounded by the proliferation of customer contact points and channels, have created incompatible and disconnected views of customers. The inability to synchronize information and processes across various customer touch points may result in negative customer experience and lost opportunities for the firm. Disconnections between CRM operations and CRM analytics can negatively impact marketing effectiveness, customer retention and loyalty. Lessons learned from past CRM implementations have provided guidance pointing to integrated strategies that not only include technologies, but also include business processes, information and organizations. Forward looking CRM strategies can leverage customer intelligence created by CRM analytics that enhances CRM operations, and conversely, CRM operations collect critical customer data for CRM analytics. To attain optimization of CRM performance, metrics need to be defined across the enterprise driven by customer-centric goals. For customer relationship management to take to the new level of value creation, businesses require a strategy that creates a unified view of customers from the perspectives of operations, analytics and collaboration along the entire customer relationship management value chain. This paper proposes an integrated framework for CRM through the construct of the enterprise model.

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Integrating Knowledge Based XML Transport into Database Statistical Applications

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

ABSTRACT

Usage of Extensible MarkUp Language (XML) extends beyond the Web, facilitating companies’ access to their own legacy data. Companies are now able to integrate legacy data quickly and cheaply into newer programs merely by assigning each piece of data an XML name. XML has strategic impacts as well for the companies. Companies can now give their suppliers and customers access to their own data without high application development costs, thus better integrating their operations. Every type of business transactions uses XML in one way or another. XML is the foundation for web services, e-business and e-content - industry forecasts indicate that by 2003, XML will account for 40% to 60% of all Internet traffic. Yet today's network infrastructure is not capable of recognizing, accelerating, securing or prioritizing XML traffic (DataPower, 2001). Because of the extensive growth in usage of XML it is foreseen that there would be high network traffic. The network traffic in-turn would slow down the transaction process in a distributed environment. Increasing network bandwidth through hardware means, which is an expensive solution, can minimize the problem. Without question, the Internet is a revolutionary phenomenon. In just a few years, it has completely transformed the landscapes of both personal and enterprise computing (Lee & Runge, 2001). The word processor use to be the most important application on the personal computer, now it is rivaled by the web browser. The database used to be the most important piece of software in an enterprise computing architecture, now it is rivaled by the Web application server and the ability to transfer data using standardized protocols (i.e. TCP/IP, FTP, HTTP, and SMTP). For almost 26 years Electronic Data Interchange (EDI) has given companies the prospect of eliminating paper documents, reducing costs, and improving efficiency by exchanging business information in electronic form (Grangard, 2001). EDI-enabled eBusiness is centered around dominant enterprises that impose proprietary integration approaches on its trading partners.

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Chinese Consumer Protection in the Era of Electronic Commerce

Dr. Mary Ip, The University of Sydney, Australia

ABSTRACT

This paper is to examine the future development of consumer legal protection in China in view of the growing on-line shopping. Three main approaches for defending consumers’ rights within the forum of international e-commerce are considered. And comments are made on the applicability of these approaches to the diverse consumer’s situation in China. The rapid development in information technology has bridged the gap and improved links between people of the world. A consequence of such wide-reaching contact amongst people is the boost in international trade. Although the proliferation of international business is also due to liberalisation of the economy and the removal of trade barriers between countries, it is indisputable that the availability of the Internet has been the catalyst. Nowadays, people are physically located in different geographical areas, but in fact are living in one “global village”. Transactions within the “global village” are mainly carried out by means of electronic commerce (e-commerce), conducted over computer networks. Such an e-commerce phenomenon has triggered debate on various issues, such as tax matters, copyright infringement, data protection, jurisdiction, and the paradigm of consumer protection. It has been argued that the borderlessness of the electronic marketplace has destroyed existing protective shields for consumers. Thus a new legal framework must be devised or the current consumer protective mechanisms must be modified in order to accommodate this new commercial environment. Since 1978, China has established a system of law for the country, and provided statutory safeguards for consumers in 1994. With its forthcoming entry into the WTO and the continuing growth of “global shopping malls”, China needs to revise its strategy for protecting consumers and review its current consumer law system in order to gauge if it is compatible with today’s cybermarket. In the light of this, this pilot paper aims to study the paradigm of Chinese consumer protection with the advent of e-commerce. With this goal in mind, the paper commences with a brief review of the literature relating to new hypotheses for international consumer protection in the era of e-commerce, and highlights the arguments supporting the different regulatory approaches.

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Professionalism as Reputation Capital: Building Strategic Advantage

Dr. Neil E. Bechervaise, Australian Graduate School of Entrepreneurship, Australia

Dr. Kevin M. McKenzie, Australian Graduate School of Entrepreneurship, Australia

Richard Beal, Australian Graduate School of Entrepreneurship, Australia

ABSTRACT

Organisations typically leverage professionalism to promote reputational capital. Reporting on the origins, role and implications of professionalism as a strategic driver, this paper describes a recent Australian study into aspects of a trait driven ideology supported through individual relationships. Rather than being tangible and teachable, the paper argues that professionalism may be passed between generations of workers from childhood and independently of organisational demand or culture. The paper emphasizes the impact that an individual’s pursuit of professionalism has upon the reputation capital, and ultimately on the strategic advantage, of an organisation. Professionalism is under fire. We have become involved in a continuing global war against terror. National league football begins again in Australia this week. The axis of evil has become a pronominal epithet for describing everyone who disagrees with us. A leading Australian daily newspaper features the dismissal of the musical director of the National opera company! A woman of international repute, the artistic leader was lured to Australia from Europe under contract to lead the opera company toward a new vision. She established a challenging new direction, initiated tough new rehearsal schedules, and demanded increased production values and performance standards. Dismissed midway through her contract, the official press release recorded that her “visions for the artistic growth of the company are not sustainable by [the firm] in its current financial position”. When demands for heightened performance impact organisational culture, they often create conflict. When corporate vision is not shared on the shop floor, or when mission statements are unilaterally rewritten, low level resistance may escalate to board level rejection. The fall of the share price of Southcorp, a major beer and wine producer in Australia has led to the dismissal of the CEO though his strategic direction has been retained. In the opera community, as well, governing boards have begun to factor financial viability into the professionalism of the company. When perceptions of professionalism in one context do not translate to another, tensions are created when individuals strive for professionalism in multiple communities, each of which may use different criteria to pass judgment. Professionalism as a concept creates multiple images judged from multiple perspectives.

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Developing New Markets for Turfgrass-sod in the United States

Dr. John J. Haydu, University of Florida, Apopka, FL

Dr. Alan W. Hodges, University of Florida, Gainesville, FL

ABSTRACT

Three years of research examining market opportunities for turfgrass-sod was conducted in the eastern (1999), central (2000), and western (2001) regions of the United States. A total of 1,248 firms, representing eight distinct Standard Industrial Classifications (SIC), were surveyed. Data were analyzed by geographic region and type of business. Results indicate that considerable differences exist across these categories with respect to market outlets, grass varieties used, and purchasing criteria of customers. Market outlets have shifted dramatically in recent years from a direct selling approach (from the farm direct to the customer) to more indirect selling through large retail chains. Major grass varieties used by consumers was largely a function of geographic location where climate restricts optimal growth, rather than problems associated with market outlets. Primary purchasing criteria were product quality, followed by price, product availability, and delivery, although results varied somewhat by type of business. Cultivated turfgrass is a pervasive feature of the urban landscape in the United States and many other regions of the developed world. It is preferred as a vegetative groundcover to reduce soil erosion, absorb pollutants, dampen noise, and to provide a comfortable, durable, and aesthetically pleasing surface for outdoor activities. Turfgrass is a major characteristic of home lawns, commercial landscapes, golf courses, hotels and resorts, and public institutions, including schools, cemeteries and airports. The turfgrass industry is an incredibly diverse and economically important component of the horticultural industry. The USDA estimated in 1997 there were over 300 thousand acres of turfgrass-sod produced in the United States, representing a farm gate value of $800 million (USDA, FLO-2002). While large, this value represents a small portion of total economic activity generated by turfgrass production. For instance, while Florida produced nearly 80,000 acres of sod in 2000, it was estimated that roughly 5 million acres of turfgrass was being maintained by families, commercial businesses and institutions (Haydu et al, 2002).

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Structural Equation Modelling Analysis of Fairness Heuristic Theory

Dr. Douglas Flint, University of New Brunswick, Fredericton, NB

Pablo Hernandez, University of Toronto, Canada

ABSTRACT

Prior research on fairness heuristic theory of organizational justice has shown that procedural information is used when distributive information is lacking. This study extends consideration of fairness heuristic in two ways: By testing fairness heuristic effects across four different combinations of procedural and distributive justice; and by testing an ambiguous distributive outcome. Structural equation modeling is used to measure the directionality of procedural and distributive justice effects. Procedural justice is of interest to organizations because of its impact on important organizational outcomes. These include: performance (Ball, Trevino & Sims, 1995; Gilliland, 1994; Konovsky & Cropanzano, 1991; Welbourne Balkin & Gomez-Mejia, 1995), organizational commitment (Brockner, 1992; Konovsky & Cropanzano, 1991; Schaubroeck May & Brown 1994), job satisfaction (Schaubroeck et al, 1994), organizational citizenship behavior (Ball et al, 1995), commitment to organizational decisions (Greenberg, 1994; Korsgaard, Schweiger & Sapienza, 1995; Lind, Kulik, Ambrose & de Vera Park, 1993), turnover intentions (Schaubroeck et al, 1994, Olson-Buchanan, 1996), theft (Greenberg, 1990, 1993), and retaliation against organizations (Skarlicki & Folger, 1997). Organizational systems that have been linked to procedural justice include: Employee discipline (Cole & Latham, 1997), inter-group conflict (Huo, Smith, Tyler & Lind, 1996), institutional racism (Jeanquart-Barone, 1996), performance appraisal (Barclay & Harland, 1995), pay for performance (St. Onge, 2000), and employee benefits (Tremblay, Sire & Balkin, 2000). There are some conditions when procedural justice is more salient than others. Fairness heuristic theory provides an explanation for these conditions. Fairness heuristic theory deals with the impact of perceptions of procedural and distributive justice on formation of organizational justice judgments.

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Ethical Attitudes Among Accounting Majors: An Empirical Study

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

Dr. Tung Bui, University of Hawaii, Manoa, HI

ABSTRACT

Due to innumerable instances of ethical lapses reported in the media recently, the accounting profession has come under close scrutiny. This study investigates if there are linkages between background characteristics and ethics among individuals who are on the verge of joining the accounting profession. An instrument is developed to measure ethical attitudes and administered to a sample population of college students majoring in accounting. Results show that i) ethics is inversely related to individual competitiveness, ii) personality types have no bearing on ethics, iii) ethics diminishes with age, and iv) women have higher ethics. The study also compares the ethics level of accounting majors with those in other business and non-business majors. Time has repeatedly proven that to err is human. Circumstances can sweep away even the best person’s ethical principles. With the ever widening globalization and cut-throat competition, the pressure in the workplace is higher than ever before. With the desire to produce results, the modern worker can easily be tempted to compromise on ethical principles. Unfortunately, some fall victim to temptation more easily than others. It is ironic that most ethical violations are committed by the advantaged and successful professionals. Among the business professionals, the accountants have come under greater scrutiny of their ethical values and practices due to recent disclosures in the media. In some instances, the ethical lapses on the part of even a handful of employees have brought their firms to extinction. This is why it has become important for companies to take a proactive stance in building an ethical corporate culture. This can be done only if the company has a team of employees committed to moral principles and the company provides an environment to nurture it. Often, companies place undue emphasis on employee/consultant skill sets and relegate other personal characteristics such as ethics to the background. Assuming a company truly wants to evaluate the ethical attitudes of a prospective or a current employee/consultant just as well as the skill set, what signals should they looking for?

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Speculation and Hedging in the Crude Oil Futures Markets

Dr. Yu-Lun Chen, Chung Yuan Christian University, Taiwan R.O.C.

Ya-Kai Chang, National Chengchi University, Taiwan R.O.C.

Dr. Tai-Hsin Huang, Professor, National Chengchi University, Taiwan R.O.C.

ABSTRACT

This paper investigates the impact of trading positions of hedgers and speculators on the price formation process in crude oil futures during 2003 to 2010. Relative hedgers’ position has a negative impact on price efficiency in crude oil futures markets. Hedgers are less likely to be information motivated, so their trading delays the price formation process. However, there is a positive impact of speculators’ position on price efficiency, because speculators correct pricing error, according to fundamental analysis. Our findings discover the role of hedgers and speculators on price formation process in crude oil futures are crucial and beneficial to academics, practitioners, and regulators. This paper investigates the impact of trading positions held by hedgers and speculators on market quality in crude oil futures. In the futures market, two major types of traders include speculators and hedgers have different trading purpose, behavior and performance. Hedgers use the futures market to transfer the spot price risk and their hedging pressure tends to drive down or up the futures price relative to the expected value of spot price to generate a bias in the futures prices. Speculators who enter on the opposite side of futures contract bear a risk, and are, therefore, compensated by a positive expected profit on their position. Due to the presence of speculators, the futures price will revise to close to the expected value of spot price. Hence, the trading activities from speculators and hedgers may have different influence on market quality in crude oil futures markets. To evaluate the relationship between the trading activities of hedgers and speculators and price efficiency is important to discussions on policy issue in the futures markets, especially regarding position limits. Position limits have been widely used to contain speculators participation for stabilizing on futures price movements. However, due to position limits, the speculators or hedgers may shift to spot or options markets.

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Comparison Analysis of the Brand Effect between Brand Alliances and M&A Strategies

Dr. Hsiao-Chi Chen, Chung Yuan Christian University, Chung Li, Taiwan

Abstract

The effect of branding strategy is always a critical topic in the brand issues. Brand creation is a tough and complex system for business operation in which many problems may appear including core competence, consumer demand, different market segment…etc. In branding strategy, strategic alliances and mergers and acquisitions (M&A) are applied to solve the growing problems and build more brand value and effect. However, would be any value added in brand by using the strategies? Consumer perspective is taken to evaluate brand effect with brand alliances and M&A strategies. Brand alliances and M&A strategy are compared in the consumer brand evaluation. This is the main concept discussed in the research. The strategies for branding under the customer brand evaluation by One-Way ANOVA have been analyzed. Paired-Sample T Test is taken to compare brand effect between brand alliance and M&A strategy. The results show that the brand effect for such brand alliances and M&A strategy is explored. Brand awareness is the major effect and value created from M&A strategy. In consumer evaluation process, the brand effect would be affected by both M&A strategy and brand alliance. However, to increase brand effect depends on strategy types. “Best of both” would get another brand’s image, awareness…and so on such as Sony Ericsson and Lenovo IBM, in which M&A strategy is applied successful to add brand effect and value. However, other M&A strategies could not create positive effect of brand value. Although, M&A strategy would create more brand effect comparing with brand alliance, different brand alliance also could create brand effect. “Homogeneous brand alliances” model get the effect of not only brand loyalty but also perceived quality. If brand image is seriously valued in business, “Heterogeneous brand alliances” would be considered in branding strategy planning. According to the research results, it is found that brand effect change in different scenarios. How to select the best solution is based on a firm’s leader’s branding objective.

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The Online Corporate Branding of Banks – A Comparative Content Analysis of Indian and Japanese Banks

Dr. Soniya Billore, Linnaeus University, Vaxjo, Sweden

Gautam Billore, Punjab National Bank, India

Kyoko Yamaji, Keio University, Tokyo, Japan

ABSTRACT

Corporate branding of banks is an important tool to attract consumer’s attention and the internet is providing another platform to strengthen institutional brand identity. This study applied the tool of Content analysis to explore how banks create brand imagery online by highlighting some perspectives of brand identity that frequently appeared through the bank’s web pages. A comparative study was conducted between 25 Indian and 25 Japanese banks to explore how the brand imagery was established and differed from each other. The comparison between Indian and Japanese banks was conducted keeping in mind that with rapidly increasing business relations between the two countries there will be an increased influx of Japanese banks into the Indian market and vice versa in the near future (METI, GOJ, 2012). In such an opportunity, the analyses can indicate how present formats of both countries differ from each other and the scope of adapting the information on the web pages to national cultures and expectations. This can be extended further to see if policy and portfolio changes need to be made in order to adjust to the customer needs of the new market and establish enhanced appeal for prospective customers. Corporate branding of banks is witnessing an immense transformation with increased competition, multichannel delivery and a more robust technological support in the financial industry. Customersare increasingly aware of what they want from a bank and how the services should reach them. Innovation in the bank’s service and its delivery is being constantly researched. This environment has emphasized the need for strengthening corporate brand identity of banking institutions and reinforcing customer’s attention to the banks so that stronger relationships can be formed between them. The IT revolution helped to integrate new modes of service delivery in the banking sector. This sector evolved vastly towards a “click and bricks” strategy that emphasizes an online supplement to conventional banking services (Miranda et al, 2006) and that can also be used as a potent tool to communicate the overall brand identity of the bank.

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The Synthesis of Selected Behavioral Biases With the Theory of Efficient Markets on Example of DJIA Index

David Havlicek, University of Economics in Prague, Czech Republic ⁽¹⁾

ABSTRACT

This paper describes an analytical approach to the partial synthesis of the theory of efficient markets with selected behavioral biases of conservatism, anchoring, gambler's fallacy and hot hand bias. We test the possibility of modeling these biases in comparison with the historical time series of U.S. stock index DJIA from year 1896 to 2012. We use for that correlation and regression analysis. The application of these behavioral biases could not, however, explain either one of the percentages of variance of logarithmic original time series. Further research should focus on individual equities, in which the behavioral biases could be rather expected. The aim of this article is to analyze the possibility of a partial synthesis of efficient market theory and selected behavioral biases. This is only a partial synthesis, since these two approaches are in contradiction with each other. According to the theory of efficient markets we cannot achieve abnormal returns based on historical information. According to behavioral finance it is not possible to assume that markets behave efficiently, because people make systematically repeated mistakes. So in both theories, it is necessary to make certain compromises. This synthesis is performed using correlation and regression analysis of historical time series of the U.S. stock index Dow Jones Industrial Average (DJIA) together with selected behavioral biases of conservatism, anchoring, gambler's fallacy and hot hand bias.

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Case Study: Export Financing as a Key Driver in International Expansion for Engineering Firms

Jan Picha, Czech Technical University in Prague, Czech Republic

Dr. Ales Tomek, Czech Technical University in Prague, Czech Republic

ABSTRACT

Construction and engineering industry in Europe has been heavily affected by recent economic conditions and debt crises on national levels. Taking advantage of national export credit and guarantee programs can result in significant competitive advantage in company’s expansion to developing markets worldwide. This paper presents unique strategic concept of the two market pioneers of engineering sector in the Czech Republic when penetrating developing market of Russian Federation. Despite the economic conditions these companies report increasing turnover and profitability, while their competitors suffer from lack of jobs. The markets of Eastern Europe and Asia are specific with neglected infrastructure and thus represent a huge potential for such experienced firms possessing necessary exporting know-how and technologies. In order to withstand the pressure resulting from increasing market competition, exporting firms are forced to come out with tailor made solutions and high level of value added. Delivering project construction together with secured project financing proved to be the key success factor in developing markets which enabled these firms to succeed in highly competitive international bids. This paper identifies and introduces the key success drivers necessary for successful execution of export financing concept. Author continues his research in the field of competitive strategy with focus on project alliances and project financing at international engineering sector. Our ambition is to work out best practice model of leading engineering firms with utilization of national export credit and guarantee program as a strategic alternative for foreign market entry and provide a route map for other market players. As a research methodology case study method was selected.

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Features of IT Offshoring to Russia: German Perspective

Rasim Muftiev, Technische Universitat Dresden, Germany

ABSTRACT

The article reviews IT offshoring: a type of outsourcing concerning the close business relationships in the field of the Information Technology. The paper provides a basic overview of Russia as a player in the global IT outsourcing market. Russian IT offshore providers are discussed from the point of view of German potential customers with respect to advantages of Russian IT market — such as strong and experienced IT workers, financial benefits, smaller time zones, and their close fit with German culture — as well as their disadvantages — for instance, weak intellectual property protection, a lack of IT-security, and complicated political, legal, and tax policies. This overview discusses advantages, disadvantages, and an overall perspective of possible IT offshoring collaborations with Russian IT vendors. Information technology (IT) outsourcing has been a fitting approach for the business optimization for over two decades with a substantial growth over the last years. The usual function consists of delivering IT services, getting access to resources for the development of products, and providing reliable IT infrastructure and software solutions at competitive prices. India is currently the top IT offshore destination; however, many other countries possess unique characteristics and qualities which can make their possible offshore markets the most attractive for IT customers. One of such examples is Russia, which shows stable development of positive trends in its IT market. Since German companies are forward looking, always searching for innovative solutions, they are considered a possible valuable partner for the evolving Russian IT vendors in the near future. Although, there is always a number of obstacles or difficulties in every IT market. For German companies to offshore, there are still several remaining disadvantages of Russian IT market, which will be discussed in this paper as well its advantages.

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The Effects of IFRS and the Institutional Environment on Accounting Quality in Chinese Listed Firms

Yuang-Lin Chang and Dr. Cheng-Hwai Liou,

National Taichung University of Science and Technology, Taichung, Taiwan

Yi-Hsin Chen, Deloitte Touche Tohmatsu Limited, Taichung, Taiwan

Dr. Ching-Chieh Tsai, National Taichung University of Science and Technology, Taichung, Taiwan

ABSTRACT

The objective of this study is to examine whether the mandatory adoption of IFRS in China and its institutional environment lead to difference in accounting quality. Like many other countries, China mandated IFRS adoption in 2007. According to the institutional perspective, China is characterized by a relatively weak institutional environment. Therefore, the institutional environment in China has posed challenges to the generalizability of existing institutional theories and has thus created opportunities to examine the effects of IFRS adoption on corporate accounting quality. Based on prior studies and in light of the geographical and economic diversity that exists across regions in China, this study further examines the effects of the regional institutional development on corporate accounting quality after the mandatory adoption of IFRS. By using a firm-level cross-sectional regression framework and utilizing an institutional perspective, this study aims to extend the research streams from the mandatory adoption of IFRS and to investigate the role of the institutional environment in the quality of accounting in Chinese listed A-share firms. Our empirical research achieves the following two conclusions: 1) IFRS adoption in China leads to a significant improvement in accounting quality, and 2) IFRS and the institutional environment synthetically influence the accounting quality as well. Our findings provide corroborating evidence for the importance of the development of the institutional environment in which those Chinese listed firms operate. The adoption of International Financial Reporting Standards (IFRS) is one of the most significant changes in accounting regimes in modern accounting history. Several researchers indicate that adopting IFRS leads to higher accounting quality, more market liquidity, and improved corporate transparency, and therefore ultimately benefits firms and investors (Tendeloo and Vanstraelen 2005; Soderstrom and Sun 2007; Tyrrall et al. 2007; Barth et al. 2008; Daske et al. 2008; Armstrong et al. 2010; Li 2010; Jones and Finley 2011; Zéghal at al. 2011). Like many other countries, China mandated IFRS adoption in 2007.

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The Global Competitive Ability of Taiwan’s IT Industry based on its Stock Fluctuations

Dr. Shu-hen Chiang, Chung-Yuan Christian University

ABSTRACT

In view of the progress in financial integration and the increasingly internationally competitive information technology (IT) industry in Taiwan, this paper seeks to understand the position of its global competitiveness from the IT stock price changes in Taiwan. We first use shift-share analysis adopted from regional science to decompose stock fluctuations into four effects that comprise three external factors with one internal element. Dynamic shift-share analysis is then used to trace the evolution of these four effects for changes in IT stock prices in the Taiwan stock market. It is found that the strong competitiveness of the IT industry in Taiwan is fully reflected in its internal element. Taiwan is not only a typical small open economy which derives its economic energy mainly from export-oriented manufacturing, but its small and medium-sized enterprises (SMEs) also play a much more important role in economic activities than in other Asian countries. In such an environment, Taiwanese firms continue to face increasingly severe international competitive pressure and it is this that led the authorities to decide to develop the information technology (IT) industry as the catalyst of industrial transformation and innovation through the use of massive public investment. A notable expression of this is the Hsinchu Science-based Industrial Park (HSIP), which is referred to as Taiwan’s “Silicon Valley”. Many studies, for example, Tsai (2004) and Yang et al. (2009) suggested that the IT industry in Taiwan has successfully created a globally competitive technological capability. Although numerous attempts have been made from economic analysis to demonstrate technological progress and competitive advantage in the IT industry, no studies have ever tried to investigate its global competitiveness from the finance field. The purpose of this paper is to quote shift-share (SS) analysis from regional economics to explore further into this issue by use of information from stock markets. Globalization refers to the connectivity and integration of countries, corporations and people in terms of labor, capital and technology.

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Condition and Perspective of Internal Auditing and Influence of Internal Auditing on

Annual Report Quality: The Case of Croatia

Marko Cular, University of Split, Croatia

Toni Susak, University of Split, Croatia

ABSTRACT

Research of internal auditing condition, perspective of the same and influence on reporting quality, through the annual report, is based for listed companies, in 2011. The primary aim is to draw conclusion about the existence of internal auditor and internal audit department for listed companies. The secondary aim is to find connection between existence of internal auditor and external auditor's opinion. The final effect is to show influence of internal auditing on annual report quality. The goal of research is to be informed with condition of internal auditing and reporting quality, through the annual report and to determine relationship between them, in order for financial reporting to be more transparent. Given that fundamental, the goal of modern internal auditor is to develop quality management process (in terms of commitment of achieving goals and requirements of the owner, more efficient use of resources, improving quality and environmental awareness, ethical behavior and pronounced responsibilities). Annual report is a document that includes all elements related to objectives of modern internal auditor, it is necessary to investigate connection between existence of internal auditor and annual reports quality. Descriptive statistics show existence of internal auditor, existence of internal audit department and auditor’s opinion for observed companies. The quality index of annual reports will be calculated, for selected listed companies. Also, connection between internal auditor existence and external auditor’s opinion, and difference on annual report quality for companies that have or do not have internal auditor will be determined. Results of researches indicate that position and stability of internal auditing in Croatia is very weak; position of internal auditing influence on audit opinion; there is no difference in annual report quality, looking for companies that have, or do not have internal auditor (because we have a poor annual report quality, considering on index quality of annual reports for observed listed companies). Today, quality of information is the key for success in the world of investment. Quality of presented information in annual reports affect investors and stakeholders, their roles, thinking, behavior and their apetite for risks.

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Asymmetric Timeliness of Earnings across Corporate Life-Cycle Stages

Slavko Sodan, University of Split, Croatia

Dr. Zeljana Aljinovic Barac, University of Split, Croatia

ABSTRACT

This paper analyzes differences in earnings asymmetric timeliness across companies’ life-cycle stages. Asymmetric timeliness of earnings implies more timely recognition of economic losses than gains and it is the most commonly used measure of conditional conservatism in accounting. Namely, conservative bias in accounting causes negative stock returns, which reflect downward adjustment in economic income, to have a higher association with earnings than positive stock returns. Accordingly, economic losses are reflected in earnings faster than economic gains. This research assumes that level of earnings asymmetric timeliness, i.e. level of conditional conservatism, will differ across different corporate life-cycle stages. We argue that companies in early life-cycle stages which require a great use of financial leverage, so they will apply less conservative financial reporting than mature companies, in order to improve their perceptive borrowing capacity. Empirical evidence is provided through the sample of large, listed companies from 14 Western European countries in succession from 2002 to 2011. Estimated results indicate that companies in introduction and growth stage of corporate life-cycle have low level of asymmetric timeliness of earnings. This paper examines the level of accounting conservatism in different corporate life-cycle stages. Basu (1997) defines conservatism as accountants’ tendency to require a higher degree of verification for recognizing good news than bad news in financial statements. In accordance with principle of prudence, conservative accounting system recognizes potential decreases in income or assets well before they are realized, but postpones the recognition of income increase until it is realized or is sufficiently certain. Therefore, Basu expects that reported earnings will respond more completely or quickly to negative shocks on value of company (i.e. bad news) than to positive shocks (i.e. good news).

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The Application of FAHP/DEA Methodology in a Transit-oriented Development

Planning in Taipei Metro Transit System

Dr. Wann-Ming Wey, Professor, National Taipei University, New Taipei City, Taiwan, R.O.C.

ABSTRACT

The concept of transit-oriented development (TOD) planning mode in an urban area was proposed based on the principles of smart growth and sustainable development in recent years. Meanwhile, the development of appropriate design techniques for the surrounded built environment of TOD has become important increasingly as the TOD applied in an urban district. The available evidence lends itself to the argument that a combination of urban design strategies and TOD patterns that promotes the quality of urban built environment will help create active, healthier, and more livable communities and it is an essential element of this research. This study will include the following sections. First of all, we try to study and classify the category of smart growth principles based on literature review. Followed by applying fuzzy Delphi technique (FDT) to obtain individual expert’s opinions and to screen the most important criteria of proposed principles in our research. And then the empirical study of Taipei Metro Transit System will be demonstrated to show the application of our proposed methodology. Finally, the utilization of Fuzzy Analytic Hierarchy Process (FAHP) method and Data Envelopment Analysis (DEA) model combined with assurance region analysis will be applied to select the most suitable MRT stations as the suggested strategies for public sectors. This paper presents a study on a decision-making problem integrating smart growth principles into the urban transportation planning development strategies. A case of Taipei metro transit system will be taken as an empirical example to illustrate the appliacatin of our proposed methodology for assessing the comparative performance of TOD planning multicriteria analysis. This paper also proposes a model to evaluate the candidate TOD station performance of future MRT locations. The station performance of TODs is based on perspectives that balance and link the quantitative and qualitative, tangible and intangible, and internal and external factors.

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A Qualitative Study on the Antecedents of Turnover Intentions in A Turkish Company

Aylin Boztok Devrimci, Istanbul Bilgi University, Istanbul, Turkey

Dr. Elif Cicekli, Istanbul Bilgi University, Istanbul, Turkey

ABSTRACT

This study explores the effects of work-life balance (WLB) and other factors on employee turnover intentions in a Turkish company. Turnover intentions, WLB practices, and other possible antecedents of turnover intentions are assessed through in-depth interviews with ten employees in a Turkish company. Results show that turnover intentions are negatively affected by WLB, particularly consistent work hours and flexible leave time, and by other factors, including a peaceful and friendly work environment, and the company’s being an institutionalized and prestigious company. In order to decrease employee turnover intentions, companies are advised to focus on these factors. Employee turnover has become a major issue for management in the twenty-first century (Batt & Valcour, 2003). Companies are giving attention to this issue (Lucas, Parasuraman, Davis, & Enis, 1987) because they know that a low level of employee turnover increases organizational performance and reduces the costs associated with recruiting and training new employees (Chen, Lin, & Lien, 2010). In this study, a Turkish company is examined to explore the possible antecedents of employee turnover rate, including WLB. Qualitative research on the effects of WLB and other work-related factors on employee turnover intentions in Turkey is lacking. Studies have examined antecedents of employee turnover intentions, such as perceived organizational support and perceived supervisory support (Tuzun & Kalemci, 2012), organizational justice (Ozer & Gunluk, 2010), job demands, job resources, and intrinsic motivation (Babakus, Yavas, & Karatepe, 2008). However, all of these studies are quantitative in nature and do not include WLB as a possible antecedent. Other studies have examined the WLB-related issue of work-to-family conflict in Turkey, including the effects of work-to-family conflict on job satisfaction (Anafarta, 2011; Karatepe & Tekinkus, 2006; Yildirim & Aycan, 2008), on emotional exhaustion (Karatepe & Tekinkus, 2006; Yavas, Babakus, & Karatepe, 2008), on job performance (Karatepe & Tekinkus, 2006; Yavas et al., 2008), and on organizational commitment (Karatepe & Tekinkus, 2006). However, these studies did not examine the effects of WLB on turnover intentions.

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Intangible Assets and Business Performance

Dr. Biserka Komnenic, Business School - Novi Sad, Serbia

Dr. Dragica Tomic, Business School - Novi Sad, Serbia

Dr. Radovan Tomic, Business School - Novi Sad, Serbia

ABSTRACT

Based on resource-based theory, firms gain competitive advantage and achieve superior performance by holding, acquiring, and effectively using strategic assets. These assets include tangible, physical assets as well as intangible assets. Intangible assets are valuable, rare, nonsubstitutable, hard to imitate and thus are defined as strategic assets capable of generating sustainable competitive advantage and superior financial performance. Often regarded as a fourth factor of production, in addition to land, labor, and financial capital, intellectual capital (IC) embodies intangible value drivers and for that reason, plays increasingly important role in achieving high business performance. This paper empirically investigates whether intellectual capital as a strategic asset impacts organizational performance and also identifies the IC components that may be the drivers of the traditional indicators of business success. The study sought its evidence from the banking sector in Serbia, using data from 24 Serbian banks from 2006 to 2008 and applying the VAIC methodology to generate independent variables that reflect IC. Regression models were constructed to examine the relationships between the efficient use of human and structural capital and corporate performance measures, including return on assets, return on equity, and productivity. The empirical findings of our study support the hypothesis for the positive relationship between firm IC and corporate performance measures: return on assets, return on equity and productivity. The growing importance of intangible resources for contemporary firms is the result of the increasing complexity in the business environment, as a consequence of structural changes to the economic system transformed to a now intensively based on knowledge. Firms need to develop the ability to respond faster to changes. They have to react smarter and be more sensitive and flexible to market signals, while at the same time gaining the capability to create their own future. In this competitive environment, firms cannot compete simply through using standardized solutions and processes that were designed for a stable and predictable environment.

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Fuzzy Logic and Panel Logistic Models for EU Smart Specialisation Strategies

Dr. Yari Borbon-Galvez, ZLC-Zaragoza Logistic Centre, Zaragoza, Spain,

SPRU-Science and Technology Policy Research, University of Sussex. UK

Dr. Maria Del Sorbo, Institute for Prospective Technological Studies-JRC, European Commission. Spain. University of Salerno. IT

ABSTRACT

Based on a fuzzy logic and a panel logistic model, the models suggest 10 configurations (contexts) of sectoral specialisation of the EU regions, the most specialised regions being: Oost Nederland, Ouest FR, Saarland, Sachsen Anhalt, Schleswig Holstein, Thuringen, and Zuid Nederland; and various specialised sectors ranging from: Construction, Electricity gas and water supply, Manufacture of electrical and optical equipment, Real estate renting and business activities, and others. The Sectoral Specialisation of the EU regions was calculated with the Revealed Comparative Advantage method, capturing the degree to which a given region employs its economically active population (EAP). The results suggest that, for a region, to specialise in any given sector there are two ‘necessary conditions’. Firstly, the sector had to invest heavily in tangible goods (assets), and second, the region had to increase the shares of high and medium-high tech manufacturing employment. Moreover, the results show that the apparent labour productivity of the specialised regions did not have to be higher than the rest of the EU regions. It was also found that high specialisation emerged mostly among regions with high disposable income per capita, and this happens more often not among the largest EU regions. The panel logistic model shows that smart specialisation strategies targeting R&D intensity and R&D personnel at regional levels are potentially useful tools for regional de-specialisation and specialisation, correspondingly. The model is corroborated with the description of two contrasting cases (regions), one specialised and other de-specialised. Currently, the European policy on research and innovation is betting on Regional ‘Smart Specialisation’ as a way to ‘stay in the game’ (FORAY et al., 2009) at times of increasing global business competitive pressures. It is expected to revert what had been described as two decades of high concentration of wealth in high-income regions and low technological prominence in lagged ones (CUTRINI, 2010), implying that low technology will hardly pave the way to high-income regions.

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Building Team Trust: A Study in the Asian Context

Dr. Ngan Collins, RMIT University, Australia

Yu-Min Chou, Business College, RMIT University, Australia

ABSTRACT

Numerous scholars have concentrated on the influences of team trust in team cooperation and performance. However, there is a lack of studies which explore the relationship between team trust and team performance in the virtual setting. The issue of whether team trust influences team effectiveness differently between conventional and virtual teams has rarely been discussed. The purpose of this paper aims to address this gap in the literature by investigating team trust in both conventional and virtual teamwork, in order to seek an understanding of effective methods for building team trust in these working environments. Findings from this study show that building interpersonal trust between team members is important to improve the team effectiveness of conventional teams. But developing institutional trust within a team is essential for virtual teamwork. An understanding of how to build team trust in different working environments can help businesses to increase the operational efficiency. The rapidly changing business environment has led to competitive pressure to have a flexible organisational form for increasing working effectiveness so that teamwork has emerged as an important working style in the industry Teamwork is widely utilised in organisations to achieve high levels of performance in business operations because people cooperating can complete the job with better quality than individuals working alone. With advanced information technology, the use of virtual teams has been increasing. Virtual teams use computer-based communication systems to allow distant and time-dispersed employees to combine their knowledge and skill without the expenses of travel, thus, many multinational companies utilise virtual teams to achieve operational efficiency and to improve strategic performance. Research into teams in organisations has largely investigated the influences of work group characteristics and team structures on team performance.

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Evaluation, Steering, and Support of Knowledge Production in Interdisciplinary Clusters of Excellence – One Step Beyond

Claudia Jooß, IMA/ZLW & IfU, RWTH Aachen University, Germany

Dr. Rene Vossen, IMA/ZLW & IfU, RWTH Aachen University, Germany

Prof. Dr. Sabina Jeschke, IMA/ZLW & IfU, RWTH Aachen University, Germany

ABSTRACT

Size, complexity, and dynamics of interdisciplinary research clusters result in an advantage with regard to resolving hybrid and specific problems. The variety of different scientific experiences, disciplines, and cultures in (mutual) scientific and operative research, however, can lead to tension and conflict in cooperation (Loibl 2005). This explains the high demand for structural and procedural framework conditions to support interdisciplinary knowledge production within interdisciplinary research clusters; thus, constant evaluation, steering, and support of knowledge production is required. This continuous steering and support of knowledge production is also necessary for the successful orientation of all cluster actors, teams, projects, and partial projects toward the superordinate objective of the German Research Foundation (DFG)―the knowledge objectives derived from these as well as the defined vision of the individual research clusters. This paper discusses the impact of already experienced knowledge engineering tools by taking the case study of scientific DFG clusters, the so-called clusters of excellence, of the RWTH Aachen University as an example. This impact is mirrored by consequent learning processes and successes in learning within the research subject clusters of excellence. A thesis concerning further needs for research of the nationwide Excellence Initiative, which covers further research constructs, is elaborated in an outlook that goes one step beyond and opens up the research horizon for years to come. In 2005/2006, the German Excellence Initiative was established by the federal government, the German Research Foundation (DFG), and the advisory council on scientific matters to sponsor and support science and research. With the help of so-called “future concepts,”(1) “clusters of excellence,” (2) and “graduate schools,” (3) the Excellence Initiative aims to equally and broadly support top-level research and increase Germany’s attractiveness as a center for university and scientific research so as to sustainably strengthen the location for science, improve Germany’s international competitiveness, and visualize peaks in the areas of university and science. (4)

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The Role of Incentive Compensation on Tax Avoidance: Empirical Evidence from Thailand

Xiaoque Chen, Mahasarakham Business School, Mahasarakham University, Thailand

ABSTRACT

The growing divergence between book and tax income is being considered by those in authority. Economics theory makes the assumption that human beings are self-interested, which indicates managers are motivated to manipulate accounting numbers to achieve their goals. Also, asymmetric information does provide the opportunity, since managers hold more information than the shareholders. As a result, earnings management gets first blame which contributes to the increasing gap between book and tax income. However, accounting scholars are often quoted that taxation is an alternative factor that influences the reporting of accounting income. Thus, the rising divergence between book and tax income is also questioned to be the result of tax activity. Soon afterward, researchers began to consider the role of incentive compensation on tax avoidance. This study used unique panel data from the Stock Exchange of Thailand, obtained from 3 sources: DataStream, SETSMARTs, and the annual report of a 10-year period database from 2001 to 2010. Information of all listed companies is collected, but only complete individual firm data sets are analyzed. The result shows that the trend of the book-tax gap fluctuates. The gap first reaches a peak in 2004 and once again in 2009. The basic estimation shows that earning management plays a significant role on the divergence between book and tax income. The estimation of the tax avoidance model is Tax Avoidance = BT - 0.036007 * EM - 138,884. This paper does not only aim to investigate whether incentive compensation influences tax avoidance, but also aims to discover the uniformity of estimation techniques between repeated cross-section analysis and panel data analysis. OLS estimation reveals that salary and bonus does influence tax avoidance, but not every year. Pooled-OLS indicates that salary is the only factor while fixed and random effects do not show any link between incentive compensation and tax avoidance.

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Determinants of Audit Committee Effectiveness in Saudi Listed Firms

Dr. Murya Habbash, King Khalid University, Abha, Saudi Arabia

Dr. Ehsan Al-Moataz, Professor, Umm Al-Qura University, Makkah, Saudi Arabia

ABSTRACT

This paper provides empirical evidence that audit committee effectiveness is associated with economic factors, and that it increases with board independence and board diligence and decreases with the firm's leverage and state ownership. Moreover, there are positive associations between audit committee effectiveness and audit quality and large firm size. At the same time, a substitution effect is observed between internal control mechanisms, ownership types and audit committee effectiveness. Audit committee effectiveness increases with the supply of active and independent directors and with the demand for monitoring, and decreases with the availability of substitute monitoring mechanisms. There is a vital need to understand the implementation of the emergence of corporate governance, and specific aspects such as audit committees in developing countries such as Saudi Arabia. In recent years the accounting profession, users of financial statements and governments have expressed concerns over the incidence of fraudulent financial reporting. One response on the part of companies to these concerns has been the establishment of audit committees (Al-Moataz, 2008). Turley and Zaman (2003) point out that corporate failures and malpractices have led to an increasing emphasis on the governance role of audit committees. Also, Jaggi and Leung (2007) claim that the weaknesses in corporate governance mechanisms in Asia, due to a lack of audit committee,s have partially contributed to the crisis. It is interesting to note, however, that in all of the countries where they have become established, audit committees have been motivated by unexpected company failures and/or corporate malpractices (Vanasco, 1994; Guthrie and Turnbull, 1995; Wolnizer, 1995; Teoh and Lim, 1996; Porter and Gendall, 1998). Recognising the importance of audit committees as a major tool to increase confidence in financial statements the Minister of Commerce issued a resolution in January 1994, mandating all public companies to establish audit committees.

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Cross-Country Differences in Euro Crisis

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

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

Marjan Hafner, Institute of Macroeconomic Analysis and Development, Slovenia

ABSTRACT

This paper shows that countries with less developed and unstable financial system were more affected by last financial crisis. We find that non-financial companies’ financial structure in more affected countries were less favorable, since this structure is minor influenced by long run financing, which was also confirmed by ANOVA models. The differences between more and less affected countries are highly significant by indicators, which are connected with long-run financing. Many observers and policy makers support the view, that euro crisis can be attributed to reckless fiscal policy in the peripheral or noncore countries. The alternative view (Wyplosz, 2010) is that a reform of EU institutions is needed in order to impose fiscal discipline on the sovereign national institutions, since a revised euro-zone’s Stability and Growth Pact (SGP) would be doomed to fail. Soros (2011) defend a different view. He understands the euro crisis as banking rather than a fiscal crisis and argues that the euro crisis is a by-product of 2008 crash which forced the financial system to substitute the sovereign credit of governments for the commercial credit that had collapsed. Crotty (2009) finds the roots of the crisis in the New Financial Architecture (NFA), where deep cause on the financial side is to be found in the flawed institutions and practices of the current financial regime. The existing system of tight financial regulations was deconstructed through radical deregulation pushed by financial institutions and justified by efficient financial market theory. Since different effects of financial crisis are a function of different characteristics of financial systems we analyze EU countries with a goal to find significant differences. Our analysis builds on results from our previous research (see Strasek (2012), and Hafner and Jagric (2013)).

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Price Relationship between Commodity Exchange Market and Traditional Market in Iran: Study of Maize and Barley

Mina Mahmoudi, University of Nevada, Reno, NV

Dr. Amir H. Chizari, University of Tehran, Iran

ABSTRACT

Maize and barley are important products in feeding livestock in Iran and their price change is important for policy makers, producers and consumers. According to the huge transaction volume of these products in Iran Commodity Exchange and traditional market, this study will pursue the price relationship between these two markets for these products. For this purpose, we used monthly price data and the existence of monthly unit root was checked too. Johansen cointegration analysis and vector error correction model (VECM) showed that for both products, the prices of traditional market are related to the prices of exchange market and the price leadership is undertaken by the exchange market. So, buyers and sellers of these products in traditional market can use price information of commodity exchange market to determine the ideal price and volume of their transactions. Maize and barley are two of most important products in Iran which are used in feeding livestock and their price changes is important for policy makers, producers and consumers. United Nations Food and Agriculture Organization (FAO) estimated maize and barley production of Iran respectively 1.6 and 3.4 million tons in 2009 [15]. The market for these products can be divided into two parts: Commodity Exchange market and traditional market. Agricultural commodity exchange market has established in Iran in response to the need of information transparency, managing risk of price fluctuations, organizing markets in order to enhance performance and reducing transaction costs. Among all agricultural commodities, maize and barley are listed on the center of exchange market transactions (during the years 2008, 2009 and 2010 the share of total maize from all agricultural products traded on the exchange market, was respectively 68.5, 57.9 and 10.9%, and the share of barley transactions was 7.2, 22.6 and 26.3%) which have been both cash and future transactions [13].

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The Impact Analysis of Globalization on Human Resource Management --- A Systems Thinking Model

Dr. Kuan-Chou Chen, Professor, Department Head, Purdue University Calumet, Hammond, IN

Dr. Keh-Wen “Carin” Chuang, Associate Professor, Purdue University North Central, Westville, IN

ABSTRACT

Globalization influences the number and kinds of jobs that are available and requires that organizations balance a complicated set of issues related to managing people in different geographies, cultures, legal environments, and business conditions. HR functions such as staffing, training, compensation, and the like have to be adjusted to take into account the differences in global management. This paper will focus on the Human Resource Management aspects of the Human Capital and the Information system. This paper will further delve into demographics, economy, change, new technology, total quality management and their inter-relations using system thinking. The effects of globalization are not just a recent phenomenon. The term is used since 1980s, reflecting technological advances that have made it easier and quicker to complete international transactions. The most appealing aspect of this has been the integration of financial markets made possible by modern electronic communication. Globalization is the process of denationalization of markets, politics and legal systems, i.e. the rise of the so-called global economy. Globalization refers to an extension beyond national borders of the same market forces that have operated for centuries. Globalization occurs when companies decide to take part in the emerging global economy and establish themselves in foreign markets. They will adapt their products or services to the customer’s linguistic and cultural requirements. They take advantage of the Internet and establish an effective presence on the international marketplace with multilingual corporate web site or even as an e-business. Overall, globalization requires a combination of linguistic, engineering and marketing knowledge that is not easily available. This paper will focus on the Human Resource Management aspects of the Human Capital and the Information system.

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Leadership and Spirituality in Business: The Contributions of Eastern Philosophies

Dr. Stewart L. Tubbs, Eastern Michigan University, MI

Pradeep Chowdhry, Eastern Michigan University, MI

ABSTRACT

There is a substantial body of research evidence regarding the importance of leadership and leadership development to organizational success, Avolio and Luthans (2006),Charan, Drotter and Noel (2001), Fullmer and Goldsmith (2001), Goffee and Jones (2006), Goldsmith (2007), McCall and Hollenbeck (2002), McCauley, Moxley and Van Velsor (1998), Reardon (2007), Viceri and Fulmer (1997), Wagner and Harter (2006), and White (2007). However, there remains an ongoing controversy about what types of leadership styles and competencies are the most effective in any given situation. In this paper leadership is defined as, “Influencing others to accomplish organizational goals,” (Tubbs, 2007). Based on the model presented in this paper, the rationale is advanced that the leadership competencies on the outer wedges of the model are where leadership development efforts should be focused (Tubbs and Schulz, 2006). This paper focuses on exploring the contributions of Eastern philosophies (specifically from India) on leadership effectiveness. Approximately $50 billion a year is spent on Leadership Development (Raelin (2004). Yet, one of the most frequently asked questions of leadership scholars is whether leadership can, in fact, be taught and learned. The answer seems to be a qualified yes. In other words, some aspects of leadership are more likely to be learnable and others are less so. For the purposes of this paper, leadership is defined as, “Influencing others to accomplish organizational goals,” Tubbs, (2007). Leadership is often discussed in terms of competencies, (Boyatsis (1982), Goleman, Boyatsis and McKee (2002), Whetton and Cameron, (2002). Competency is a term that describes the characteristics that lead to success on a job or at a task, Boyatsis (1982). Competencies can be described by the acronym KSA knowledge, skills and abilities. The model in Appendix A shows that leadership competencies can be represented by three concentric circles. These three circles describe three distinct aspects of leadership.

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Inter-Partner Trust and Controlling International Joint Ventures

Samson Ekanayake, Deakin University, Victoria, Australia

ABSTRACT

It has long been acknowledged that international joint ventures (IJVs) offer opportunities for firms to gain competitive advantage, diversify risks, and to gain access to new markets and technologies (Ghoshal, 1987). Hence, establishment of an IJV is considered a ‘compelling option’ for a firm that pursues global strategies (Hergert & Morris, 1988; Fryxell, Dooley & Vryza, 2002). Despite their importance and popularity, many IJVs seem to encounter relational and performance problems and fail (Groot & Merchant, 2000). While estimates of IJV failure vary, a failure rate of 61 per cent within the first five years of formation has been reported (Osborne, 2003). The failure rates of IJVs are considered to be significantly higher than that of a single firm (Bleeke & Ernst, 1991; Das & Teng, 2000). According to some estimates, up to 70% of all IJVs fail within two years of their formation (Geringer & Herbert, 1991; Parkhe, 1993). A number of non-academic studies also highlight the poor performance and high failure rates of IJVs (e.g., Cooper & Johnson, 2000; Andersen Consulting, 1995). IJVs generally face greater challenges, because partners, especially foreign partners, have to control IJVs in settings with which they have little familiarity (e.g., markets, distribution systems, legal systems, geographical separation, cultural differences) (Groot & Merchant, 2000; Fryxell et al., 2002). Controlling an IJV is particularly complex and difficult because of shared ownership and control (Madhok, 1995; Groot & Merchant, 2000; Fryxell, et al., 2002). As Groot & Merchant (2000, p. 581) point out, an IJV involves an obvious, extra dimension of complexity because of the behaviors of the partners “must be considered in choosing the set of controls to use.” Alliance partners are ‘neither friends nor strangers’ (Lorenz, 1988).

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Social Media and Youtube As An Attractive Marketing Tool

Dr. Hyun Sook Lee, National Autonomous University of Mexico, Mexico City

ABSTRACT

Technological evolution and social media such as Facebook, Twitter, YouTube and others have been influential in becoming an integral part of people´s everyday lives. The key factor for the success of social media is conversation, being a cost-effective method for marketing activities and thus for business practice. YouTube has the advantage of free world-wide access, to all those connected with the internet, so it must be attractive as an advertising tool. For Entertainment marketers, YouTube became a must-buy as an option for anyone trying to reach a great number of viewers, especially the younger demographic (Learmonth, 2010). The ability to identify market opportunities and to mobilize or develop resources for effective exploitation of those opportunities is an essential prerequisite for gaining competitive advantage. This dynamic competitive firm behavior is observable and can be studied by examining the patterns of actions and reactions of firms over time (Miller & Chen 1996a, b; Grimm & Smith 1997; Ferrier 2001; Chi, Ravichandran & Andrevski, 2010). Staying ahead in today's challenging business environment requires an established infrastructure for maintaining internal processes as well as external relationships with stakeholders (Managed Network …, 2012). Increasingly, retailers and marketers have recognized that online consumers, especially those in younger demographics, are becoming unresponsive to advertising on social networking sites. That's partly because they feel overwhelmed by the sheer volume of advertising, but they also feel the ads aren't in sync with or relative to their wants and needs. Because of that, young consumers are starting to ignore traditional advertising and are expecting businesses to change their marketing tactics to meet their lifestyle desires.

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Coca-Cola: International Business Strategy for Globalization

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

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

ABSTRACT

The purpose of this research was to analyze the efficiency of global strategies. This paper identified six key strategies necessary for firms to be successful when expanding globally. These strategies include differentiation, marketing, distribution, collaborative strategies, labor and management strategies, and diversification. Within this analysis, we chose to focus on the Coca-Cola Company because they have proven successful in their international operations and are one of the most recognized brands in the world. We performed an in-depth review of how effectively or ineffectively Coca-Cola has used each of the six strategies. The paper focused on Coca-Cola's operations in the United States, China, Belarus, Peru, and Morocco. The author used electronic journals from the various countries to determine how effective Coca-Cola was in these countries. The paper revealed that Coca-Cola was very successful in implementing strategies regardless of the country. However, the author learned that Coca-Cola did not effectively utilize all of the strategies in each country. CEOs and top management teams of large corporations, particularly in North America, Europe, and Japan, acknowledge that globalization is the most critical challenge they face today. They are also aware that it has become tougher during the past decade to identify internationalization strategies as well as with whom to do business (Krishna, 2005). Entering into a foreign market is like discovering new territory for business owners. Foreign countries have different laws, economies, business strategies and currency. Cultural differences can also impede a country's success. Though every business should anticipate a huge learning curve, entering a foreign market can be easier with the adoption of a few strategies (Krishna, 2005) Entering into a foreign market could require changing your product to suit the new market's tastes and preferences.

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Disconfirmation and Customer Satisfaction of Impulse Buying Behavior

Dr. Chuanlin Kang, Chinese Culture University, Taiwan

ABSTRACT

Although consumer researchers have investigated impulse buying nearly 60 years, diversified finding on the relationship between impulse buying and consumer satisfaction still a question need to study furthermore. Based on the E-K-B model of consumer buying decision theory, this paper try to justify the definition of “impulse buying” and try to explore the mediating effects of “disconfirmation” on the relationship between “impulse buying” and “consumer satisfaction”. A random sample of 1,327 Taiwanese consumers is examined with questionnaires. The major finding demonstrated that “disconfirmation” acts as mediating variable with partial effects between “impulse buying” and “consumer satisfaction”. Theoretic and practical implications are discussed with respect to impulse buying behavior. According to Solomon (2001), approximately two-thirds of all purchase decisions are made in stores. In some product categories, including candies, chewing gums, oral hygiene products, and cosmetics, more than 70% of all purchases are unplanned. Statistical data shows that impulse buying has accounted for a dominant share of all purchase in certain product categories (Smith, 1996). Previous studies differentiated impulse buying from non-impulse buying by using various criteria, including intention, presence of advance planning, and the state of being rational. As a consequence, pluralities of definitions have been proposed. Among studies that used presence of advance planning as a criterion, most agreed with Stern's (1962) view that impulse buying is an unplanned behavior (e.g. Kacen and Lee, 2002). However, some studies argued that consumers’ in-store information search and product evaluation should be viewed a planned behavior (e.g. Wood, 1998). Among studies that used intention as a criterion, Engel and Blackwell (1982) defined impulse buying as a buying action undertaken without a problem previously having been consciously recognized.

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The 1959-73 Mandatory Oil Import Quota Program: U.S. Energy Policy or a Camouflaged Subsidy?

Dr. John C. Edmunds, Professor, Babson College, Wellesley, Massachusetts

Sitanshu Singh, Brandies University, Waltham, Massachusetts

ABSTRACT

It is illuminating to study the struggles over the Mandatory Oil Import Program. That program was of the sort that seems to crop up in countries everywhere; it was an intervention that diverted profits to a select group, at a cost to the larger polity. The media never publicized it prominently because it was cloaked in legitimacy and required too much explanation. The quota program is a suitable and worthy precedent for today's discussions about energy policy and market regulation because it had so many parallels with today's battles over energy policy. It has the advantage that the debate about it was always a mix of analytical arguments and partisan rhetoric, so it is a relevant model for framing today's issues. Hopefully the lessons of that mandatory quota program can be applied to today's emotion-charged debates. The alignments for and against the quota are easy to understand, the Congressional tactics employed were instructive, and the bureaucratic wrangling over technical details was the real meat of the program. The tactics that the adversaries employed, and the public appeals they issued, were similar to the ones employed in today's struggles. Studying the oil import quota can shed light on a larger topic, namely, how the U.S. will set its energy policy, as forecasts of self-sufficiency open up new possibilities. The oil import quota debate was most intense during a period when the United States was dependent on imported crude oil, to a degree that mimics the dependency just before the current production surge began. The quota debate also pitted the major international oil companies against the smaller domestic firms, commonly known as the independents. So the Mandatory Oil Import Quota Program has much to recommend it to today's experts and laymen as they align themselves on all sides of current U.S. energy policy issues. As a way of presenting the contestants in the struggle, we take the point of view of the international oil companies and we portray the "independents" as their adversaries.

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Behavior of Consumers of Healthy and Healthier Food in Israel

Dr. IlanBijaoui, Ashkelon Academic College

Dana Dayanzada, Bar Ilan University

HadarVdee, Bar Ilan University

ABSTRACT

The profiles of consumers of healthy and healthier food are different. Healthy food consumption is a cultural trend, an ideology. Healthier food is a wider behavior focused mainly around the phenomenon of obesity. To enter both markets, firms must understand both consumer behavior and related profiles. In the present research we analyze the profile of the Israeli consumer of healthy and healthier food and compare it with the "classic" profile defined in the literature worldwide. The main motivation of the healthy Israeli consumer is the health of their children. Consumers of both genders are prepared to spend money for healthy food. The positioning of healthy products must be focused on content value related to children's health and on preventive medicine for their relatives. The healthier food consumer has a different profile than the healthy food consumer. Anybody can be a healthier food consumers, and therefore these consumers are more difficult to characterize. Nutrition content related to obesity is the only common denominator of healthier food consumers. Seventy nine percent of top executives in the food and beverage business agree that healthy nutrition is the key issue driving the industry forward, ahead of convenience and price growth pressure (Deloitte, 2012). Healthy food is a global and growing trend (Nielsen, 2012; Feunekes et al., 2008; Nørgaard and Brunsø, 2009; Grunert, Willys, 2007). The desire to maintain good health is of prime concern for consumers, and they read labels in order to obtain information about ingredients, nutrition (Wills et al., 2009), and negative nutrients in food products (Cowburn and Stockley, 2005; Drichoutis et al., 2006). Consumers in North America show the highest confidence in understanding nutrition labels. Nearly six in ten (57%) regional respondents indicated that they mostly understand the details of such labels. This result is based largely on U.S. respondents, as consumers in the U.S. appear more comfortable with the labels than are Canadians consumers. Fully 58% of U.S. respondents report mostly understanding the information, compared with 49% of Canadian respondents (Nielsen, 2012).

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