The Business Review Journal

Vol. 2 * Number 2 * Oct.. 2004

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

Online Computer Library Center   *   OCLC: 920449522

National Library of Australia   *   NLA: 55269788

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Leveraging IT as a Core Competency to Enter New Businesses:  The UPS Case
Hemalatha Subramanian, Dendrite Corp., NJ
Prof. William V. Rapp, New Jersey Institute of Technology, Newark, NJ



 In a very competitive and constantly changing business world, firms must develop innovative methods to accomplish their goals by listening to customers and then delivering quality products and services clients want at a price they will pay. Depending on the firm’s strategy, rapid technology developments and globalization can be key in this need to innovate to become and remain competitive. Successful companies thus are customer-centric and use technology to compete globally and accomplish their ends. By being successful competitors, they serve employees, customers and shareholders.  In the book Information Technology Strategies, the author identifies 3 types of IT strategists, excluding ones with no strategy that only using IT to operationally run their organizations. The most advanced level-3 strategists use IT to achieve and sustain a competitive advantage by changing their industries’ long-term competitive dynamics to their advantage in ways competitors find difficult and expensive to copy. Forcing rivals to respond to these initiatives costs them time and money. In this paper the authors have identified that among level-3 strategists, there is a sub-group for whom using IT strategically has become a core competency. Strategically using IT permeates every aspect of these firms’ products and operations and has enabled them to successfully enter new businesses. These firms have leveraged this competency in IT strategy to grow and diversify while achieving IT economies of scope, scale and learning. For them this is a powerful business model that helps them achieve higher growth rates even when basic businesses are mature. We term them three plus (3+) IT strategists.


Political & Economic Independence: The Kenya’s Case

Dr. Albert J. Milhomme, Texas State University, Austin, TX



 Former colonies have acceded to their political independence a long time ago. The question is: “What about their economic independence today?” This study focuses on Kenya, a former colony of Great Britain, forty years after gaining a political independence, obtained after a fierce struggle initiated by the Mau-Mau fighters: a divorce which was not exactly amicable! Has the United Kingdom kept a dominant position?  For some time now, many countries, former colonies of some colonial powers like Great Britain or Portugal have acceded to their political independence. The question is: “What about their economic independence?” To measure their economic independence one can look at their today international trade pattern, exports and imports. This study will focus on Kenya, a former colony of Great Britain and the study will try to reveal the achievement or non-achievement of this economic independence, forty years after the political independence.  In 1963, Kenya as a colony of Great Britain exported 24%, of its exports to Great Britain and imported 41% of its imports from Great Britain. The United Kingdom had at that time a dominant position in Kenya. This position was mainly the result of a century of effort to create and protect trade, to pump in the finished product and pump out the desired raw material. At that time, Kenya was the 29th customer of the United Kingdom in terms of imports and the 45th supplier in terms of exports, a rank without any relationship with Kenya’s Gross Domestic Product ranking at that time. Has the United Kingdom kept a dominant position in Kenya today 40 years after independence? 


The Impact of Motivation and Communication on Productivity

Dr. Steven H. Appelbaum, Concordia University, Montreal, Quebec, Canada



 Despite significant investment in capital improvements and training, a manufacturing plant suffered from chronically low productivity.  The author conducted a survey to measure employee satisfaction and to determine the correlation between employee satisfaction and productivity.  The study found a correlation between average job satisfaction, low motivation and the resulting low productivity.  A direct correlation was also found between low productivity and poor communication between management, supervisors and employees.  The article offers recommendations to improve productivity by increasing employee involvement and communication.  In the manufacturing industry, productivity is correlated with revenues and impacts the company’s bottom line.  Although an employee can increase productivity with technologically advanced equipment it does not necessarily mean that overall the company is more productive. Robbins (2001, p.20)  suggests an organization is productive if it achieves its goal and does so by transferring inputs to outputs at the lowest cost.  As such, productivity implies a concern for both effectiveness and efficiency.  At a Canadian copper rod manufacturing company, productivity is defined by the ratio of productive hours over available hours of production.  At 74%, the company's performance is below the industry's average of 80% and has not improved despite important investments in new state-of-the-art machinery and technical training.  The objective is to study the causes of low productivity from an organizational behavior perspective.


Management Competencies:  Quo Vadis?

Prof Lynette Louw, Port Elizabeth Technikon, Port Elizabeth, South Africa



 Dynamic and effective managers are essential to any organisation’s overall success, regardless of whether it is a small start-up enterprise, a game farm or a global organisation.  In turn, the availability of an adequate, competent and dynamic management corps is a prerequisite for the economic development, productivity growth and wealth creation of any country.  Within the context of volatility, global change and an unpredictable economy, contemporary managers are challenged by dynamic, uncertain and complex environments.  Recently, the credibility of management has reached its lowest ebb, following intense media scrutiny of dramatic decline in corporate fortunes, allegedly caused by managerial ineptitude or misjudgement. Against this background, one of the most important issues facing contemporary organisations is that of management development.  The purpose of this paper is to provide a framework of the paradigm shifts in management development from which conclusions concerning the philosophical/theoretical implications of the subject can be drawn, in particular the evolution of management competencies.  A critical analysis of the following paradigms will be given, namely the rational economic, human relations, integrative systems, flexible and principal value-led paradigms.  Management competencies relevant to each of these paradigms will be identified in the development of the framework. For the purpose of this research, management competencies are defined as consisting of knowledge, skills and traits components.


Organization Culture in Higher Education: A Turkish Perspective

Dr. Munevver Olcum Cetin, Marmara University, Istanbul, Turkey



 The purpose of this study is to determine whether organizational culture exists in public state universities according to opinions of academics in these environments. The aim is to find out whether there is a meaningful difference among organizational structure, authority and responsibility, total quality, teamwork, job-satisfaction, human resources management and democracy according to academics’, gender, marital status, administrative duty, title, branch, age, occupational experience in general and occupational experience in their present institution. In the analysis of the data, while getting the opinions of the academics, the average values were given standard deviation, and t values were calculated. In cases where between and in the groups differences were found, TUKEY HSD and LSD tests were used to find out the sources of  difference.  Culture has been defined as ‘a phenomenon that surrounds us all and helps to understand how it is created, developed, manipulated, managed and changed.’ (Schein, 1992). Deal & Kenedy (1982) identifies culture as ‘a totality of informal rules that directs humans’ behaviors.’ Furthermore, according to Tossi et al. (1994) ‘culture is a way of thoughts, ambitions and reactions that consists of groups of people.’ Since culture, itself, defines creation, management, changes and leadership, it has to be understood exactly. Owing to this fact, organizations have established their shared assumptions, beliefs and norms in an organizational culture.


Rewards and Personality in the Workplace

Dr. Michael Ba Banutu-Gomez, Rowan University, Glassboro, NJ

Dina A. Beck, Amanda R. Wingate,  Rowan University, Glassboro, NJ

Robert LaMastro, Sergio Cuevas, Rowan University, Glassboro, NJ

Michelle Scialabba, Rowan University, Glassboro, NJ



 Personality traits play an important role in how people think, act, and react to everyday situations in the workplace.  Individuals with different personality traits, such as being introverted or extroverted, may desire different types of rewards, such as time off, performance recognition, and upward mobility.  This research addressed whether or not personality characteristics are related to desired reward types. Questionnaires, comprised of questions centered on personality traits based on the Myers-Briggs Scale and Locus of Control, were distributed to individuals of working age covering a wide demographic range.  Analysis of the data found that there was a significant relationship between the Thinking/Feeling personality type and intrinsic types of rewards “Thinking” individuals had a stronger preference for intrinsic rewards compared with “Feeling” individuals.  The research revealed a significant effect of gender as more males were seen as “Thinking” while females were seen as “Feeling.”  There were no other personality effect on intrinsic rewards, nor were any personality effects on extrinsic rewards. The data did suggest that African Americans might desire more extrinsic rewards compared with Caucasians.  While not statistically significant, this suggests that further research in this area is warranted.  For many years, personality traits have been extensively studied and analyzed, from the Big Five Personality Traits to the Myers-Briggs Type Indicators. 


Board Structure and Ownership in Malaysia: The Case of Listed Distressed Companies

Shamsul Nahar Abdullah, Ph.D., CPA, CMA, CA (M), Universiti Utara Malaysia, Kedah, Malaysia



 This study examines the influence of board independence, CEO duality and ownership structure on a firm’s financial distressed status. Defining financial distressed companies as ones, which were under the KLSE PN4 classification, a total of 86 non-finance companies were included in this study. For the purpose of analysis, a control group consisting of healthy companies was established based on the matched-pair procedure. Examining the period of 1999-2001, inclusive, the evidence shows that board independence and CEO duality are not associated with financial distressed status. The findings on ownership structure indicate that management and non-executive directors’ interests are associated negatively with financial distress. A negative and significant association is also documented for outside blockholders. Further analyses reveal that interests by government-linked agencies or enterprises also negatively and significantly influence financial distress. Thus, evidence relating to ownership structure supports the agency theory. The evidence also supports the contention that ownership by non-executive directors and outside blockholders effectively increases their incentives to monitor management in ensuring their wealth in the firms is intact.  Corporate governance has been blamed for the crisis in 1997 that affected most of the Asian countries, including Malaysia.


Cost Effective Analysis of Recycling Waste Aseptic Pack in Taiwan

Dr. Kwo-Dong Wey, National Taipei University, Taiwan

Sheue-Ching Hong, Hsin Wu College, Taiwan



Waste aseptic packs (AP) are required to be recycled at least 70% level of the total wastes under the Waste Disposal Act in Taiwan. But, most consumers usually dump them directly into garbage containers. In the meantime, the recycling industry also has no economic incentives to do the collection, disposal and recycling work. So the current recycling rate of waste AP still remains at 25% level of the total wastes. EPA of Taiwan is devoted to raise the recycling rate. This study employs the theory of life cycle assessment and cost effective analysis to evaluate three different ways, namely, landfill, incineration, and recycling, to dispose waste AP. This study concludes that incineration is the most cost effective approach to dispose waste AP. The most expensive way is recycling. If it is allowed to treat energy recovery as one of the methods for waste recycle in Taiwan, then the incineration will become the most important approach to dispose wastes AP. In this way, the 70% required recycling rate of waste AP may be more easily achieved.  In comparison with glass bottle, aseptic packs (AP) can save more materials and more space in shipping. But, one pack of AP contains 75% of paper pulp, 20% of polyethylene, and 5% of aluminum foil. If the waste AP is not treated properly, it will definitely damage the environmental quality.


Estonian Banking System Development, 1994-2002

Dr. August Aarma, Tallinn University of Technology, Estonia

Dr. Jaan Vainu, Tallinn University of Technology, Estonia

Dr. Vello Vensel, Tallinn University of Technology, Estonia



 Banks and other financial institutions are a unique set of business firms whose assets and liabilities, regulatory restrictions, economic functions and operation make them an important subject of research, particularly in the conditions of the emerging financial sectors in the EU accession countries from Central and Eastern Europe (CEE). Banks’ performance monitoring, analysis and control deserve special attention in respect to their operation and performance results from the viewpoint of different audiences, such as investors/owners, regulators, customers, and management. This article presents some historical notes on the development of the Estonian banking system and the capital structure of banks. Different versions of financial ratio analysis are applied for bank performance analysis using financial statement items as initial data sources. The use of a modified version of DuPont financial ratio analysis is discussed. Empirical results of the Estonian commercial banking system performance (1994-2002) analysis are also presented.  Problems concerning the soundness of the banking and financial systems has become more important in all countries over the recent years. The financial sector, and especially the banking system, is vulnerable to systemic crises, which has led to the creation of costly safety nets as depositor insurance schemes with the well-known moral hazard problem. It is argued that there is increasing evidence that banks are “black boxes” due to the week transparency and banks’ unwillingness to disclose information (Hyytinen and Takalo, 2002 and 2003).


The Use of Monetary Policy in a Globalised Economy. – With Special Reference to India

Punita. S. Rao, University of Mumbai, India



 Monetary Policy has been defined as “the use of official instruments under the control of the Central Bank to regulate the availability, cost and use of money and credit with the aim of achieving optimum levels of output employment and price stability. Policy decision s taken with the intention of affecting the economy are now likely to influence the outcomes in future periods because of the dynamic properties of a globalize economy. In the short run with given expectations, there can be scope for expanding the level of employment without the large acceleration of inflation, though may be very small, gets built into the system, thereby worsening further policy options. Similarly, Mundell’s proposals for achieving short term balance, both internally and externally under fixed exchange rate system can lead to worsening state of affairs. Since the objectives of the economy outnumber the instruments for their achievements, the most that policy makers can strive to attain even in a world of certainty a fair compromise.  But in a globalised economy with a great degree of uncertainty introduced, the authorities are assumed to still know the exact structure of the system but not to be able to foresee the stochastic stocks that may perturb it. In section I uncertainty is introduced. The main subject of this section is how to cope with random shocks that cannot be forseen, even assuming the structural form of the deterministic model to correct.


The Concept of Intergenerational Leadership in Africa is a Key Tool in Managing in Developing

Countries for Twenty-First Century Organizations

Dr. Michael Ba Banutu-Gomez, Rowan University, Glassboro, NJ



 With increasing business Globalization and different cultures we have in this world, maintaining and managing cultural differences becomes a challenge for leaders, mangers and supervisors in the twenty-first century. The author explained why it is important to understand traditional African social structure in doing business in Africa. The main goal of this paper is devoted to understanding the concept of intergenerational leadership in Africa and it’s importance and role in helping Western leaders and managers to effectively manage and succeed in Africa or developing nations. The paper concludes that organizational leadership in a developing country requires managers and leaders to have a high standard of conduct and being able to design and implement a management system which values innovation and creativity, nurtures flexibility and offers members the freedom to experiment and allow them to become self accountable.  The author chose this topic of managing cultural differences in developing countries or in Africa because it is an essential skill all leaders and managers must master if they are to be successful in the global marketplace. As an organizational development consultant in Africa, Asia and Middle East, the author learned that lack of skills in managing cultural differences causes conflict between leaders, managers and staff who originate from different cultures. 


Testing Asymmetry in Price Transmission: In Case of Soybeans Markets

Dr. Sung Chul No, Southern University, Baton Rouge, LA



 This paper tests whether price transmission asymmetries exist between the market at farm gates and retail soybean markets, using a recently developed methodology, momentum threshold autoregressive (M-TAR) specification.  Since the vast majority of U.S. soybeans produced are processed into soybean oil and meal for food consumption, testing asymmetry in price transmission is applied to both retail soybean oil and farm prices and retail soybean meal and farm prices.  The estimation results indicate symmetric pricing behavior for soybean meal and farm prices.  However, the M-TAR model estimates provide strong evidence indicative of asymmetric transmission between soybean oil and farm prices.  More specifically, the soybean oil prices respond much faster when the marketing margins tighten than when the margins become wide due to the farm prices decrease.  Over the years, asymmetric adjustment in the transmission of prices at various levels of the agricultural product marketing system has been of considerable empirical interest to economists (Kinnucan and Forker, 1987 for dairy products; Hahn, 1990 for pork and beef; Zang et al., 1995 for peanut).  Tests are designed to determine whether the retail price responses to price increases in produce prices are similar to the retail price responses to price decreases in produce prices. If the retail price response is the same, the market is symmetric.  If the response differs, the market is asymmetric.  


The Effects of Firm Characteristics on the Patent Production Function of Korean Firms

Yu-Jin Han,  Seoul National University, Seoul, Korea

Dr. Won-Young Lee, Seoul National University, Seoul, Korea



 This paper estimates the input-output relationship between R&D investment and the patents granted to Korean firms by US Patent and Trademark Office and Korean Intellectual Property Office. Using pooled panel data and time-series data, this paper also examines the influence of the firm characteristics - export-orientation, degree of foreign ownership, Chaebol-affiliation - on the input-output relationship. It is found that the elasticity of US patents for R&D investment is 1.29 and that of Korean patents for R&D investment is 1.24. It is also shown that export oriented firms, firms with higher foreign ownership and non-Chaebol firms, in general, have higher patent productivity.   The purpose of this paper is to estimate the input-output relationship between R&D investment and patents of Korean firms, which we define as the patent production function. In addition, this paper examines the effects of firms’ characteristics such as export-orientation, degree of foreign ownership, and Chaebol-affiliation on the patent production function.  There have been many studies on the input-output relationship between R&D and patents. Griliches and Schmookler (1963) and Comanor and Scherer (1969) showed positive relationship between R&D and patents of US firms at industry level and found that there existed 3-year time-lag. Scherer (1965) and Branch (1974) showed 4-year time-lag with the panel data of 448 US firms and 157 US firms respectively. Hausman et al. (1984) estimated the coefficients between R&D and patents with 5-year time-lag and showed that the sum of coefficients of the 5-year distributed structure was very close to the coefficient of contemporaneous R&D.


St. Jude Medical Embraces e-Learning: A Case Study with Industry Insights

Sandra Anderson, Woodbury University, CA

Matthew A. Gilbert, Woodbury University and Clear Pixel, CA

Debra K. Moring, Woodbury University and St. Jude Medical, CA



 With more than 1,200 sales personnel across North American in 39 regions and 50 states, St. Jude Medical – a $2 billion worldwide manufacturer of heart valves, catheters, introducer, pacemakers and implantable cardiac defibrillator devices – needed a cost and time effective training solution in a short amount of time.  The company’s e-commerce team was tasked with creating an action plan.  This paper explores their investigation and evaluation into e-Learning solutions – complete with industry information, analysis and recommendations.  St. Jude Medical is a $2 billion worldwide medical device organization specializing in the manufacturer and sales of cardiac devices including heart valves, catheters, introducer, pacemakers and implantable cardiac defibrillator devices.  The company has more than 1,200 sales personnel in 39 regions and 50 states across North America – each of whom are proficient with heart, electrophysiology and implanting pacing devices. Sales representatives typically work alongside cardiologists and surgeons. There is little time for classroom training.  Since 2002, St. Jude Medical has recognized the need for web-based business solutions to gain a competitive industry advantage.  To support this vision, in 2003, the company launched a hardware rollout deploying laptops, printers and PDAs to all sales employees.  Along with the hardware, classroom training was implemented.  Within 90 days of training, many sales reps achieved a 30% utilization rate with the sales order application system and 65% utilization for the expense reporting process.


Economy and Businesses -Business and the Economy

Dr. Jose Villacis, San Pablo CEU University, Madrid, Spain



 Business activities, investing activities in particular, depend fundamentally on forecasts and on financing flows. Business production (and investing) prospects can be effectively and psychologically stronger than financing flows. We can identify two types of forecast according to their origin: one is the institutional forecast, of which the most important determinant is the evolution of interest rates, and the other is the intuitive, elemental and unpredictable and is dependent on a company’s mood, or in Keynes’ terms: the company’s animal spirits.  On the other hand, financing flows require knowledge of the economic metabolism that turns new money into new production. Equilibrium between monetary and real magnitudes arises from the workings of such metabolism. We must rely here on two axes: one is the basic monetary policy, and the other represents a magnitude from Germán Bernácer’s Macroeconomics. Bernacer is an unknown Spanish researcher who stole a march on Keynes.  What counts in general for a Macroeconomic system is particularly true for individual companies and businesses considered as entities.  Companies and businesses that make production possible generate double or triple concurrent deals, or auctions if we’d rather use this term: one between the businessmen-investors supplying goods and the consumers or demanders, and another between those businessmen and the authorities – fiscal and monetary deals.  A progressive evolution of consumer demand results in positive business forecasts, particularly if these are ongoing and long-term forecasts.


In Search of Data Warehouses’ Financial Return

Ales Popovic, University of Ljubljana, Slovenia



 Investments in IT projects are (still) risky; so are data warehouse projects. They represent a big dilemma, especially financial, to many organizations. For measuring data warehouse return on investment there are several methods available. However, due to many (mainly) intangible benefits (returns) and costs, such return on investment estimate is hard to calculate. Based on Slovenian and foreign researches the paper discusses investment justification of data warehouses and presents the findings about justifying data warehouse investments in practice.  The business environment of organizations is constantly under change. In order to handle the dynamics in their environments, organizations need to refine their ways of working. For doing this, organizations need tools to extract information from internal and external data sources, allowing them to analyze trends and make relevant decisions. To have sufficient amounts of high quality internal or external data for decision-making, organizations try to store as much information as possible (Gray, 1999). The data is then used for both strategic and tactical purposes, e.g. identifying weak points in business processes, identifying bottlenecks in chains of business functions and acquiring knowledge about the performance of suppliers and the value of customers (Scholten, 1998).  A data warehouse is literally a combination of subject areas, data sources, user communities, business rules to be applied and architecture (McKnight, 2002). The need for better decision support systems became the starting point for data warehouse technology.


Managing Gazelles into the 21. Century

Dr. Velimir Srica, University of Zagreb, Croatia



 The goal of innovation management is to trigger, generate, control and steer new ideas through an organization and to bring the outcome to the market. Innovation management depends on a balance coalition between innovators and those that provide direction and stability in organizations. In order to properly manage creative activities, managers must locate and remove the blocks to innovation, they must provide motivation and establish organizational arrangements that are supportive to individual and team innovative behavior. The gazelles are innovative/learning organizations that need to be managed differently from other companies. In managing gazelles innovative management/leadership profiles and typologies are to be used. The paper focuses on how to produce innovation and growth in any innovative company, but puts stress on transitional environments of Central and East European Countries, trying to address issues such as managing teams and innovative activities, motivating for success etc.


Service Quality Measurement of Master in Management  Programs of Private Schools in Jakarta Indonesia

Agung Martono, Graduate School of Economics IPWIJA, Jakarta, Indonesia



 The major objective of this study is to establish service quality measurements that will assist in the formulation of operations strategies for Master in Management programs of private schools in Jakarta.  This was achieved by identifying the service quality performance of schools using identified performance measurements, and the formulation of an operations strategy that will increase the overall service quality performance of Master in Management programs of private schools in Jakarta.  The research has adapted a modified Malcolm Baldrige Criteria for Performance Excellence (CPE) combined with the Service Quality Model (SERVQUAL) and came up with 48 variables with a score of 1,500 as the standard measurement for service quality. The procedure undertaken by stratifying schools into two groups: excellent-accredited and learning-accredited schools. Convenience sampling was administered for 705 respondents consisting of five categories: students, alumni, faculty, staff and employers.  Operations strategy for schools was developed which will serve as a guide to management of the schools for their respective purposes. A gap analysis was developed to connect the findings of the research to the theoretical concept. The research was concluded with an action plan directed for schools, and suggested some areas for further studies.


Stochastic Simulation in Cash Budgeting

Peter Baloh, University of Ljubljana, Ljubljana, Slovenia

Joze Andrej Cibej, University of Ljubljana, Ljubljana, Slovenia



 Cash is one of the most important assets of a company. If cash is not available to settle due payments, the existence of a company may be threatened, as its creditors may file a bankruptcy petition and require the division of bankrupt's estate. Conversely, carrying large amounts of cash is irrational due to its "non-earning" nature. Cash budgeting is so one of the most important short-term planning elements yet in a volatile business environment that lacks financial discipline it is difficult to undertake as we try to predict (uncertain) cash-inflows.  The paper proposes a feasible stochastic model for cash budgeting and outlines the information support needed.  Today’s business environment is complex and due to perpetual changes, companies are faced with high level of business risk, which they are trying to lower with a process of planning. The essence of planning is in prevention of potential problems and (easier) achievement of goals in the future. However, there are not just few companies that cannot cope with uncertainty that is intrinsic to future events, which consequently leads to unsound business decisions and – in worst case – even to a business failure.  A wrong decision in any field of business can lead to a downfall: non-competitive product, unsuitable leadership- and management-skills of key employees, poorly chosen geographical location, to name only a few. One of the most prominent and frequent reasons for business failure is lack of financial planning [3], in which financial managers would consider the actions the firm has to take to exploit its strengths and to overcome its weaknesses.


The Changing Role of Industrial Leaders with Reference to Morality in Business in the Current ICT Charged Environment

Ganatantra Ojha, SAIL, Bhilai Steel Plant, Bhilai, India

Anil Sharma, Bhilai Steel Plant, Bhilai, India



 The influence of the current Information & Communication technologies on the human lives is immense and can be seen here, there and everywhere. The impact is mostly for the good of the mankind. There would be thousands of applications of Communications and Information Technologies in human lives in general and in business -employees’ lives in particular. But, any attempt to draw any logical conclusions about the positive and negative contribution of the current ICT applications can be done only with reasonable understanding of the applications.  There also is a running debate about the ethical role of Business in the current technology oriented environment where making a fast buck only appears to be the target of every industry, big or small, private or public.  This paper is thus an attempt to understand the advantages and disadvantages of the current ICT boom, the ethical issues in business created by the current ICT applications and then establishing the changing role of industrial leaders to cope up with the responsibility of managing a workforce that is different- physically, mentally and ethically.


How Monetary Policy Becomes Ineffective:  Channels of Transmission

Dr. Brian J. Jacobsen, Wisconsin Lutheran College, Milwaukee, WI



 Monetary policy operates through different channels.  Depending upon a nation’s financial structure, the effectiveness of monetary policy in achieving policy objectives will differ.  When a nation (like Japan) relies on banking lending more than financial markets, the credit channel is the dominant channel through which monetary policy will operate.  When a nation (like the United States) relies more on financial markets, there are also asset channels through which monetary policy will operate.  This greater number of choices through which monetary policy may operate explains the different experiences the United States and Japan have had with low interest rates.  There are some major differences between the experiences of the United States and Japan despite that each has had unusually low nominal and real interest rates over the past few years.  In the United States, the economy has been relatively vibrant (compared to Japan), yet monetary policy in each country has been expansionary.  What explains the differences in the effectiveness of monetary policy in each of these countries?  The difference in monetary policy effectiveness is due to the effectiveness of the transmission of monetary policy, which is dependent upon the financial structure of the economy.  Japan stresses the role of banks in financing businesses and home purchases.  The United States has emphasized—relatively more—the role of markets. 


A Grounded Design Approach for Outsourcing

Dr. Jeffrey N. Decker, Biola University, La Mirada, CA

Dr. Dan Duran, Whittier College, Whittier, CA

Lana Nino, CPA, MSBA, Whittier College, Whittier, CA



 Outsourcing has been adopted by United States based firms over the last few decades as a necessary way to do business. While several studies have noted the significant increase in outsourcing over the last few decades there is also a growing body of literature reporting decreasing satisfaction with it due to its major impact on the organization, often in ways that were not foreseen and which often resulted in negative organizational and strategic outcomes.  As such, the decision to enter into an outsourcing arrangement must be comprehensive and process oriented.  The executives and their senior management team must carefully think through how the decision will impact the firm financially, organizationally and strategically as well as its impact on all of the stakeholders.  Many executives are not prepared for and have not considered the full impact of an outsourcing decision.  While there has been growing interest and a growing body of research and scholarship focused on outsourcing, there is still lacking a comprehensive and grounded set of technical rules to help executives identify and work through the issues.  This paper is a first step in providing such guidance.  Adopting the design perspective, we outline an initial set of guidelines that executives and the managing team can utilize to more effectively assess the impact of outsourcing from an organizational and strategic perspective. 


What’s Wrong with Current Customer Satisfaction Modelling and How to Fix It

Con Korkofingas, Macquarie University, Sydney, Australia



 This paper examines structural equation models applied to modelling customer satisfaction. A number of weaknesses of the structural equations approach are discussed in both theoretical modelling and application to customer satisfaction measurement. An alternative utility based framework is suggested that improves on many of the deficiencies of the structural equations approach.  Customer Satisfaction/Dissatisfaction (CSD) studies emanate from studies of life and work satisfaction in psychology and behavioural studies of the 1950s. Interest in CSD in marketing coincided with the evolution of the marketing concept and the evolution from sales oriented approach to a customer oriented approach to marketing. Understanding post purchase phenomena such as CSD and complaining behaviour was seen as a fundamental task for the customer focussed firm. Initial studies ((Cardozo 1965); (Olshavsky and Miller 1972; Anderson 1973) attempted to model the determinants of single equation CSD functions. Evolution of CSD modelling involved application of multi equation models to link complex pre and post purchase behaviours involving expectations, attitudes and future purchase intentions ((Oliver 1980) (Swan and Trawick 1981); (Bearden and Teel 1983), (Oliver and DeSarbo 1988); (Oliver and Swan 1989); (Teas 1993)) In recent times, CSD models have been used as the basis of service quality evaluations and as integral components of customer relationship systems ((Bolton and Drew 1991); (R.T.Rust and A.J.Zahorik 1993); (Taylor and T.L.Baker 1994); (Spreng, Harrell et al. 1995); (Johnson and Gustafson 2000)


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