The Business Review Journal Vol. 8 * Number 1 * Summer 2007 The Library of Congress, Washington, DC * ISSN 1553 - 5827 Online Computer Library Center * OCLC: 920449522 National Library of Australia * NLA: 55269788 The Cambridge Social Science Citation Index, CSSCI, Peer-Reviewed Scholarly Journal Refereed Academic Journal Indexed Journal All submissions are subject to a double blind review process |
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Comparative Study of American and Japanese Auto Industry: General Motors Versus Toyota Motors Corporations Dr. Hailu Regassa, Colorado State University-Pueblo Dr. Ahmad Ahmadian, Colorado State University-Pueblo
ABSTRACT The automobile industry is undergoing rapid technological transformation and is currently faced with increased deregulation, accelerating globalization, and ever-changing consumer tastes. Likewise, firms in the industry are exploring new avenues to cope with demand in the market place and stay competitive. The U.S. automakers are struggling with an ever-diminishing market share and have so far failed to bridge the gap with their Japanese counterparts on quality, reliability, product design, production, and cost efficiency. General Motors (GM), for instance, incurred a massive loss of $8.6 billion dollars, the highest ever, in 2005 alone and plans to eliminate 30,000 jobs or more and close or scale back operations in 12 facilities over the next two to three years. A misstatement in its accounting records could drive up its total loss to a whopping $10.6 billion. Ford Motors also reported record losses of $1.5 billion from its North American operations and Daimler Chrysler A.G., while performing slightly better than its peers in the U.S., fared far short of expectations relative to its Japanese competitors. In contrast, their Japanese counterparts, Honda, Nissan, and Toyota Motors all recorded hefty growth in profits while their stock prices soared during the same period. Toyota Motors, the second largest automaker, so far, said that it will post record earnings for its fiscal year ending on March 31, 2006, as its sales grow across all key regions. Toyota is actually expected to overtake GM in market share in the upcoming year of its operations for the first time. While GM currently has a worldwide total market share of 26 percent followed by Toyota, the latter, however, commands a large market capitalization of almost $173.6 billion as of December 31, 2005, more than 14.3 times as much as that of GM.
Cited by: 13
Predicting Job Performance from Individual Characteristics among R&D Engineers Dr. Robert T. Keller, University of Houston, Houston, TX
ABSTRACT A study of 288 engineers from four corporate research and development (R&D) organizations investigated hypotheses generated from person-job models of individual characteristics as longitudinal predictors of job performance. As hypothesized, higher levels of self-esteem, an innovative orientation, and job involvement, and a lower level of need for clarity predicted one-year later supervisory ratings of job performance. Implications for the improvement of person-job models of performance for knowledge workers are discussed. Why are some engineers better performers than others? This question is important because the presence of productive employees can positively influence the effectiveness of others, and because advanced economies have become knowledge-based whereby engineers engaged in R&D share similarities with other knowledge workers such as physicians, lawyers, and accountants (Shalley, Zhou, & Oldham, 2004). Organizational researchers have generally studied individual characteristics such as personality traits and job attitudes to predict job performance (Simonton, 2003). The conceptual foundation of the present study was based on recent person-job models that help to specify the conditions within which selected personality traits and job attitudes can best predict performance in particular jobs such as that of engineers (Kristof-Brown, Zimmerman, & Johnson, 2005; Tett & Burnett, 2003; Shalley et al., 2004; Simonton, 2003). Kristof-Brown et al. (2005) suggested two conceptualizations of person-job fit. The first is the fit between the demands of the job and the abilities of the employees, whereby the knowledge, skills, and abilities of the employees are related to the requirements of the job situation.
Cited by: 4
Wal- Mart and the Trap of Success: An Organizational Ecology Perspective Dr. Elias G. Rizkallah, La Sierra University, CA Dr. Nabil Y. Razzouk, California State University, San Bernardino, CA
ABSTRACT This paper addresses the theoretical implications of corporate success on an organization’s behavior, and the perception and response of rivals, consumers, and others in the corporate environment to that behavior. More specifically, the paper examines the experience of Wal-Mart, whereby the giant retailer has been experiencing significant attacks from a number of constituencies in its environment. Specific attention is given to the fact that much of the troubles ailing Wal-Mart were self inflicted and the result of the company excessive focus on short-term profit and growth goals and not enough attention given to anticipating and managing the response of its various relevant publics. The paper then concludes with some specific recommendations for corrective action at Wal-Mart. The world economy has undergone radical change during the past two decades. Geographical and cultural distances have shrunk, technology development and globalization have changed how companies conduct their business. The result is vastly more complex and dynamic marketing environment for companies and consumers. Along with this complexity, researchers and practitioners in all fields of inquiry have developed concepts and theories to explain and understand the dynamics of the new environment - the players involved, their behavior, power, performance, and relationships -- and suggested some requirements for survival and success. Emphasis was put on understanding the dynamics of the relationship among all the entities in the environment and the interdependency relationship that exist; and how such relationship may change over time as per the performance of each party. Each organization is considered as a part of a greater integrated system, where its behavior affects and is affected by behaviors of others.
Cited by: 3
Developing Virtual Team Problem-Solving and Learning Capability using the Case Method Vu N. Tran, NDS Americas and Pepperdine University, CA Hugo M. Latapie, NDS Americas, CA
ABSTRACT Developing capable virtual teams is challenging but critical in today’s global economy. Team-based problem solving and learning capability is a must-have characteristic of a high-performance virtual team. This paper investigates the use of the case teaching method on virtual team development. Research findings on the effectiveness of using this method to develop virtual team capability are mixed. Negative findings include difficulties with (a) developing initial shared context for the case discussion, (b) maintaining team’s interest in case discussions, (c) guiding the learning process, (d) building up team momentum, and (e) ensuring team learns as they solve case problems. Positive findings include (a) no observable degradation found in case-based virtual team learning, (b) team members developed more complete and thoughtful arguments, (c) virtual teams generated more ideas, and (d) more diverse opinions were developed and shared. Proposed improvements included (a) development of richer case information, (b) development and discussion of cases from different cultural and social perspectives, (d) integration of learners to remote live cases, and (e) development of asynchronous case learning process. We recommend few research areas for improving the case teaching method in virtual team environment. Developing highly capable engineering virtual teams is challenging but critical in today’s global economy. Team-based problem solving and learning are essential characteristics of a high-performance virtual team.
Cited by: 8
Patterns in High-Tech Firms Growth Strategies by Seeking Mass Mainstream Customer Adaptations Dr. Bruce Buskirk, Pepperdine University Dr. Stacy M. P. Schmidt, California State University, Bakersfield Dr. David L. Ralph, Pepperdine University
ABSTRACT This article summarizes the subjective insights the authors gained as a result of in-depth interviews that were conducted of twenty business executives charged with directing strategic growth within their firm. Each was asked, and then probed for the directions of growth they perceived to be open to their firm. Furthermore this article examines the Technological Life Cycles [TLC] and its six phases: 1. Cutting Edge.2. State of the Art (SOTA).3. Advanced.4. Mainstream.5. Mature.6. Decline. In addition, it examined the paths to finding product niches in a “third wave” of market entry:1. Standardization.2. Technology convergence.3. Improved user interfaces.4. Improved “network” interfaces [plays well with other toys].5. Invisible security. In order for this to be successful, engineering must relinquish its control on product development. Marketing needs to be given rule over the NPD domain, which will allow them to be more effective in finding productive product niches. Growth by the five means listed above requires the cooperation of marketing and engineering in development. This will require a cultural change in many firms. In-depth interviews were conducted of twenty business executives charged with directing strategic growth within their firm. Each was asked, and then probed for the directions of growth they perceived to be open to their firm. The majority of this convenience sample of executives of heavily slanted towards middle sized electronics firms, but included some B2B services providers as well. This piece summarizes the subjective insights the authors gained in this process.
Cited by: 3
Customer Perceptions of Attribute Importance in the Business-to-Business Environment Ming Haw Leong, Centre for Nuclear Energy Research, Fredericton, NB, Canada Dr. Jane Dunnett, University of New Brunswick, Fredericton, NB, Canada
ABSTRACT Attributes used by organizational buyers in choosing their suppliers are studied, using a Japanese manufacturer of rubber flexible joints. Surveying trade show participants indicated that quality was the most important attribute used to evaluate potential suppliers. Follow-up in-depth interviews suggested which services provided by suppliers indicate quality to the customer. Findings were categorized into two quality dimensions: short-term (measurable, used as the decisive criteria) and long-term (immeasurable, focusing on the customer-supplier relationship). Most business-to-business (B2B) companies who want to expand into a new market should have a good understanding of that new market. Otherwise, their investment will be wasted or the return on their investment will be less than expected. While understanding the uncontrollable factors such as economics, societies, politics, and technologies are important, most companies concentrate on the operating environment such as the power of suppliers and buyers, possible substitute products, competitors, and most importantly, customers. In the B2B environment, most customers buy components or raw materials to manufacture products for end users or other organizational buyers. In order to be a supplier of an organizational buyer, the supplier must understand the needs or preferences of its customers. These needs and preferences can be categorized into attributes such as quality, price, and service. There are similarities between consumer and organizational buying behavior because both of them are affected by individual factors (Webster and Wind, 1972a).
Cited by: 3
Energy Production Concerns: A Multi-Year Perspective Dr. Jack A. Fuller, West Virginia University, Morgantown, WV Robert Bessette, President, Council of Industrial Boiler Owners, Burke, VA
ABSTRACT The authors analyzed data from a fluidized bed boiler survey distributed during the spring of 2003 to develop appropriate AFBC (Atmospheric Fluidized Bed Combustion) performance benchmarks. The survey was sent to members of CIBO (Council of Industrial Boiler Owners), who sponsored the survey, as well as to other firms who had an operating AFBC boiler on-site. There were three primary purposes for the collection and analysis of the data contained in this fluidized bed boiler survey: 1. To develop AFBC benchmarks on technical, cost, revenue, and environmental issues. 2. To inform AFBC owners and operators of contemporary concerns and issues in the industry. 3. To improve decision making in the industry with respect to current and future plant start-ups and ongoing operations. In contrast to an earlier research paper which focused on operating data for a single calendar year, the current study analyzed data over a series of years. The authors analyzed data from a fluidized bed boiler survey distributed during the spring of 2003 to develop appropriate AFBC (Atmospheric Fluidized Bed Combustion) performance benchmarks. The survey was sent to members of CIBO (Council of Industrial Boiler Owners), who sponsored the survey, as well as to other firms who had an operating AFBC boiler on-site. In contrast to an earlier study of the authors, which focused on operating data for a single year (2002), this study analyzed data over a series of years. There were a total of 45 plants with 78 AFBC boilers included in the study.
Cited by: 3
Corporate Governance in China Doreen M. McGunagle, Capella University
ABSTRACT The financial crisis that overran Asia in the late 1990’s prompted most of the affected countries to make improved corporate governance a priority. How has corporate governance changed in China since the financial crisis of the 1990’s? Analyze the current reforms of the businesses government on corporate governance.What is corporate governance? It is the determination of the broad uses to which organizational resources will be deployed and the resolutions of conflicts among the myriad participants in the organizations. Corporate governance involves the mechanisms and approaches that govern the way a corporation uses its resources so that stakeholders’ interest are taken into consideration and protected. Two areas in which corporate governance reform was mandated by Sarbanes-Oxley are the role of board of directors and financial reporting. Enacted July 30, 2002, the U.S. regulators passed a significant reform act which was the Sarbanes-Oxley Act of 2002, a U.S. federal law designed to protect investors by improving the accuracy and reliability of corporate disclosures. Corporate governance has become an important issue that today’s strategic decision makers must cope with (Coulter, 2005). Senior managers have lead responsibility for crafting and executing a company’s strategy, it is the duty of the board of directors to exercise strong oversight and see that the five tasks of strategic management are done in a manner that benefits shareholders or stakeholders. In watching over management’s strategy-making, strategy-executing actions and making sure that executive actions are not only proper but also aligned with the interests of stakeholders, a company’s board of directors has three obligations to fulfill (Thompson, Strickland, & Gamble, 2005).
Cited by: 8
Valuing the Patent Risk Using the Finite Difference Method Dr. Cherng-Shiang Chang, FRM, China University of Technology, Taipei, Taiwan
ABSTRACT By using the real option approach, Backer (2006) investigates the impact of patent risk on firm values and research incentives. The cost of engaging in litigation over intellectual property (IP) will be increased due to imperfect patent protection. As profit rates rising up, may call for a lawsuit on infringing from the challengers, and lead to falling patent values. Therefore, a trade-off between promoting innovative efforts and securing competitive market outcomes should be taken into account carefully. In this article, we extend Backer’s model by employing the Ornstein-Uhlenbeck process for the cash flow rate to meet the real product specific lifecycle. The resulting partial differential equations (PDEs) are so complicated that the bi-nominal tree technique originally applied by Backer (2006) fails to provide satisfactory results. A novel finite difference method is then chosen and implemented to solve the problem numerically. Patents and R&D projects can be regarded as a complex option on variables underlying the value of the project (Schwartz, 2004). As acknowledged by Dixit and Pindyck (1994), patents are classic examples of real options: a patent holder has the option to develop certain types of products, or to license the technology, or to use it as an input for further research. Once a patent is issued and valid, it grants the right to exclude others from using the technology. Since enforcement is imperfect and costly, the right to exclude becomes the right to suit with some probability of success.
Cited by:
Stock Market Performance Analysis for Three European Emerging Stock Markets Dr. Timotej Jagric, University of Maribor, Maribor, Slovenia Dr. Boris Podobnik, University of Rijeka, Rijeka, and Zagreb School of Economics and Management, Croatia Dr. Vanco Balen, University of Zagreb, Zagreb, Croatia Dr. Marko Kolanovic, Bear, Stearns & Co. Inc., Equity Derivatives Strategy, New York Vita Jagric, University of Maribor, Maribor, Slovenia
ABSTRACT The paper provides a stock market performance analysis for three European emerging stock markets: Croatia, Slovenia, and Bosnia and Herzegovina. We show that in 2005 the overall level of South-East stock market performance exhibited extraordinary results. Additionally, using monthly observations we perform a detailed study of the performance of Croatian and Slovenian mutual funds and Bosnian investment funds. The risk/return measures of funds are assessed using the Sharpe ratio, Treynor ratio, Information ratio, Jensen’s alpha, and Appraisal ratio. Funds are ranked according to their risk-adjusted performance. Furthermore, we analyze the timing ability of the funds using the quadratic regression of Treynor and Mazuy. Over the last few years, the mutual fund industry in transition economies has exploded. In the process of promotion mutual funds industry Slovenia and Croatia are in the forefront among transition economies, while on the other hand, the Bosnian market is still in its infancy. This paper studies the mutual fund industry in these countries in the first years of its development, i.e. in the period which is characterized by important flows to mutual funds. This period is interesting, since this is the period when the stock market seems not to be efficient (Podobnik et al., 2006; Jagric et al., 2005). The mutual fund industry is among the most successful recent innovations. It is larger in countries with stronger rules, laws, regulations, and specifically where mutual fund investors’ rights are better protected. The industry is also larger in countries with wealthier and more educated population, where the industry is older, trading costs are lower and in which defined contribution pension plans are more prevalent (Khorana et al., 2005). We think that the trends in Slovenian, Croatian, and Bosnian mutual fund industry reflects these findings.
Cited by:
Empirical Tests for Bubbles in the Asian Emerging Stock Markets Dr. Ako Doffou, CFA, Sacred Heart University, Fairfield, CT
ABSTRACT This paper investigates empirically whether emerging Asian markets stock prices can deviate from their fundamental values. Because standard tests are subject to size distortion, a more robust statistical test for non-cointegration due to Taylor and Peel (1998) is used here to test periodically collapsing emerging Asian markets stock price bubbles. The test results refute the bubbles hypothesis. While policy shocks are negligible and market structures are stable in developed financial markets, emerging markets are affected by the pace and sequencing of policy reforms. Investors lost confidence in emerging markets following the East Asian financial crisis which started in July 1997 in Thailand and affected currencies, stock markets, and other asset prices in several Asian countries called East Asian Tigers. The Asian financial crisis was triggered by Japanese commercial banks that reduced their exposure to Asia in response to emerging troubles in Thailand and South Korea. Japanese banks had been severely weakened by the collapse of the real estate and stock market bubbles in Japan in 1990. Because Japanese banks are the largest lenders in Asia and the key creditors in Thailand, they signaled the change in sentiment to other foreign commercial banks that also withdrew their loans. Pressures on the Thai currency led its government to impose some mild controls on capital outflows. Then, there was a large current account deficit, low foreign exchange reserves relative to short term foreign currency debt and an overvalued currency. To speculators, Thailand looked like Mexico in 1994 and the speculative pressure started to build up in early 1997.
Cited by: 1
An International Perspective on Internal Controls in Small and Medium Enterprises Dr. Meena Chavan, Macquarie University, Australia Dr. Anil S. Lamba, Maharashtra, India
ABSTRACT This paper reports the results of an empirical examination of cultural influences on judgments of Australian, Indian and Malaysian SME managers in relation to whistle blowing as an internal control mechanism. Australia serves as a proxy for the Anglo-American cluster of countries comprising the U.S., UK and Canada, while India and Malaysia represent the Asian cluster. The study draws on cultural characteristics and differences among these countries to formulate hypotheses that Australian managers are both more likely and more accepting of engaging in whistle blowing as an internal control mechanism than Malaysian and Indian managers. Data was gathered through a survey questionnaire administered to samples of SME managers that have significant operations in all three countries. The questionnaire comprised two whistle-blowing scenarios, and used both single-attribute and multidimensional attribute measures of managers’ judgements. The results support the hypotheses about differences in Australian compared to Indian and Malaysian managers’ judgments. The findings of this study suggest that enterprises that aim to improve effectiveness in their control systems or achieve similar levels of reliability across divisions in various countries need to implement control systems that are compatible with cultural values. Specifically, the results suggest that compared to India and Malaysia, whistle blowing as an internal control mechanism is likely to be more effective in Australia. The findings of this study contribute to developing a comparative model of global whistle-blowers. This global model is likely to be useful to managers of both local and multinational enterprises.
Cited by: 14
The Global Downfall of Corporate Tax Rates Dr. Dennis C. Stovall, Grand Valley State University David P. Centers, Grand Valley State University
ABSTRACT Competition for corporate tax dollars has increased dramatically around the world. Countries are competing with one another for a limited amount of tax revenue from corporate profits. They are reducing corporate tax rates to attract investment from companies within their borders as well as investment from abroad. This competition started in the United Kingdom and has spread across Europe and other industrialized nations. The United States, however, has not followed this trend. Many within the U.S. support the reduction of corporate taxes to become more competitive with other industrialized nations. At the end of 2006, the U.S. ranked second behind Japan for having the highest corporate tax rates within the Organization for Economic Cooperation and Development (OECD). Ireland, in contrast, has used a reduction in tax rates to its advantage. It has one of the fastest growing economies in Europe, far outstripping the French, whose tax rates have essentially remained unchanged from 1993 to 2006. Ireland has also developed an effective network of double taxation agreements with 44 other countries with the purpose of stimulating foreign investment, but this is not to say that Ireland is not without its problems. Inflation has become a real fear on the Emerald Isle with its fast growing economy. Others feel that a reduction in corporate rates is not necessarily a good idea. Some fear that with a drop in rates there could be a corresponding drop in revenues from those taxes. This has been proven to be false in most instances. Governments will usually accompany a drop in rates with a tightening of tax rules and regulations, thus making it more difficult for companies to reduce their tax liabilities through deductions and credits. Companies have also tried to use this competition among governments to their own advantage by pitting one country’s rates against another’s.
Cited by:
The Broad Dimensions of Doing Business Abroad Dr. Coen Heijes, University of Groningen, The Netherlands
ABSTRACT Management literature on cross-cultural cooperation generally adopts a standardized approach that is based on the classic dimensions of researchers such as Hofstede (1980, 1991) and Trompenaars (1993). In this exploratory study, we show the importance of a broader perspective and discuss the ambivalences and ambiguities inherent in cultural identity. Both researchers and expatriate training centres usually view cooperation across borders from a standardized, positivist point of view. A set of fixed dimensions is generally used to describe the possible pitfalls of foreign-entry modes and cross-border cooperation. Countries are described and categorized across these dimensions and practical advice is provided, depending on where and how the respective countries differ in their cultural dimensions (Hofstede, 1980, 1991; Laurent, 1983; Adler, 1991; Trompenaars, 1993; Schneider & Barsoux, 1997). All in all, it is an approach that is extremely popular, offering both scientists and managers a handy toolbox for doing business abroad. However, it is an approach that in its standardization blatantly ignores the lessons anthropology has to offer us on the deeper layers of each specific society. This is a pity, because in fact management thinking has a lot to gain from anthropology, but only if it really pays attention to what anthropology is about. Anthropology is not a way of thinking that categorizes nations or interactions among people along worldwide dimensions. In fact, anthropological literature hardly pays any attention at all to these dimensions that are so popular in management thinking.
Cited by: 6
The International Financial Reporting Standards and the United Kingdom Tax Implications Dr. Maria Luisa Fernández de Soto Blass, CEU University of San Pablo, Madrid, Spain
ABSTRACT On 13 June 2000, the Commission adopted [MSOffice1] Commission Regulation (EC) No 1725/2003 of 29 September 2003, adopting certain international accounting standards in accordance with European Parliament and Council Regulation (EC) No 1606/2002, in which it was suggested that all listed companies should be required to prepare consolidated accounts in accordance with international accounting standards beginning in 2005. The International Accounting Standards (IAS) are adopted by the London-based International Accounting Standards Board, on which the Commission will be represented. These common rules will be known in the future as the International Financial Reporting Standards " (IFRS). The Finance Act ("FA") of 2004 and the two Finance Acts of 2005 adopted in the United Kingdom contain legislation aimed at ensuring that those companies choosing to adopt the International Accounting Standards (IAS) to draw up their accounts will receive broadly equivalent tax treatment with those companies that continue to use the UK GAAP (UK Generally Accepted Accounting Practices[MSOffice2]). The legislation also covers those companies that choose to adopt certain new UK Accounting Standards (new UK GAAP) which are very similar to IAS. There are changes in the UK tax legislation affecting IAS1, FRS, Reporting financial performance, IAS 11, construction contracts, IAS8/FRS3, Errors and changes of basis, IAS 16, property, plant & equipment, IAS 17, leases, IAS 18, Renue, IAS 19, employee benefits, IAS 20, Government grants & SSAP 4. IAS 21, currency accounting, FRS 6 and 7, Business combinations, IAS 36, Intangible assets/impairment, IAS 38 ,intangibles, IAS 37, Provisions, IAS 39, Financial instruments measurement, IAS 40, investment property, IAS 41, biological assets, and the issues raised by IFRS 4, Insurance contracts.
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Global Tourism Winners: How Countries and Companies Succeed in Tourism Dr. Paul Kauffman, National Institute for Governance University of Canberra, Australia
ABSTRACT The paper examines changes in international travel destinations since 1990, and factors which account for high tourism growth including key economic and social data and policy interventions, in order to identify elements of a model which analyses outstanding tourism performance. It was found that the highest performing large tourism countries were in Asia and south Eastern Europe. The methodology used was to analyse changes in national tourism numbers and income since 1990, and relevant explanatory factors, including the policy approaches of high performing countries, in order to identify factors that make for tourism excellence. What elements constitute global best practice for national tourism growth? Data published by the United Nations World Tourism Organisation, the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) allow rigorous study of economic dimensions of tourism and what makes for high net tourism growth in particular localities. The paper examines the extent to which such data can inform policy and investment decisions. It considers countries where tourism income exceeds US $5 billion per annum. All are mixed economies. About 21 of these countries are members of the OECD. The remainder have high economic growth and in some cases democratic government (1). The paper examines growth in receipts from international tourism between 1990-2005 and growth in international arrivals, on a country by country basis.
Cited by: 2
Global Tourism Winners: How Countries and Companies Succeed in Tourism Dr. Paul Kauffman, National Institute for Governance University of Canberra, Australia
ABSTRACT The paper examines changes in international travel destinations since 1990, and factors which account for high tourism growth including key economic and social data and policy interventions, in order to identify elements of a model which analyses outstanding tourism performance. It was found that the highest performing large tourism countries were in Asia and south Eastern Europe. The methodology used was to analyse changes in national tourism numbers and income since 1990, and relevant explanatory factors, including the policy approaches of high performing countries, in order to identify factors that make for tourism excellence. What elements constitute global best practice for national tourism growth? Data published by the United Nations World Tourism Organisation, the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) allow rigorous study of economic dimensions of tourism and what makes for high net tourism growth in particular localities. The paper examines the extent to which such data can inform policy and investment decisions. It considers countries where tourism income exceeds US $5 billion per annum. All are mixed economies. About 21 of these countries are members of the OECD. The remainder have high economic growth and in some cases democratic government (1). The paper examines growth in receipts from international tourism between 1990-2005 and growth in international arrivals, on a country by country basis.
Cited by:
An Analysis of Business Leaders in Thailand Dr. Sinee Sankrusme, Ramkhamhaeng University, Bangkok, Thailand
ABSTRACT The competitive problems facing business at present have changed in nature compared with the past. Business leaders encounter competition in their businesses at the global level, which in turn poses a challenge for administrators both in the present time and in the future, specifically how to manage to make business survive and grow in a sustained manner. Currently, business is faced with the task of selecting methods that will simultaneously ensure an increase in productivity in management, a better level of customer response and a reduction in costs. In addition to quality, innovative ideas, an effective response to customers’ needs, and costs, it is necessary to reduce the time in bringing a product to market, the time in responding to customers and enhance the level of customer service. A business leader needs to have strength, flexibility, and agility in order to ensure the continued survival of the organization, which challenges his or her capacity for business leadership. Business leadership has an impact on working at the personal level, the group level and the organizational level. It is interesting, therefore, to analyze how the aspect of business leadership plays a role in supporting the working performance of groups and organizations, thereby enhancing efficiency in terms of organizational working performance, creating satisfaction, facilitating self-adjustment in the workplace, engendering a proper working atmosphere and leading to the need for achievement at work. Business leadership plays a central part in understanding group behavior, for it is the business leader who usually provides the direction toward goal attainment.
Cited by: 4
Global Tourism Winners: How Countries and Companies Succeed in Tourism Dr. Paul Kauffman, National Institute for Governance University of Canberra, Australia
ABSTRACT The paper examines changes in international travel destinations since 1990, and factors which account for high tourism growth including key economic and social data and policy interventions, in order to identify elements of a model which analyses outstanding tourism performance. It was found that the highest performing large tourism countries were in Asia and south Eastern Europe. The methodology used was to analyse changes in national tourism numbers and income since 1990, and relevant explanatory factors, including the policy approaches of high performing countries, in order to identify factors that make for tourism excellence. What elements constitute global best practice for national tourism growth? Data published by the United Nations World Tourism Organisation, the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) allow rigorous study of economic dimensions of tourism and what makes for high net tourism growth in particular localities. The paper examines the extent to which such data can inform policy and investment decisions. It considers countries where tourism income exceeds US $5 billion per annum. All are mixed economies. About 21 of these countries are members of the OECD. The remainder have high economic growth and in some cases democratic government (1).
Cited by:
An Analysis of Business Leaders in Thailand Dr. Sinee Sankrusme, Ramkhamhaeng University, Bangkok, Thailand
ABSTRACT The competitive problems facing business at present have changed in nature compared with the past. Business leaders encounter competition in their businesses at the global level, which in turn poses a challenge for administrators both in the present time and in the future, specifically how to manage to make business survive and grow in a sustained manner. Currently, business is faced with the task of selecting methods that will simultaneously ensure an increase in productivity in management, a better level of customer response and a reduction in costs. In addition to quality, innovative ideas, an effective response to customers’ needs, and costs, it is necessary to reduce the time in bringing a product to market, the time in responding to customers and enhance the level of customer service. A business leader needs to have strength, flexibility, and agility in order to ensure the continued survival of the organization, which challenges his or her capacity for business leadership. Business leadership has an impact on working at the personal level, the group level and the organizational level. It is interesting, therefore, to analyze how the aspect of business leadership plays a role in supporting the working performance of groups and organizations, thereby enhancing efficiency in terms of organizational working performance, creating satisfaction, facilitating self-adjustment in the workplace, engendering a proper working atmosphere and leading to the need for achievement at work.
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Development of Financial Institutions in Transition Economies: The Importance of Financial Regulation: A Croatian Case-study Marta Bozina, University of Zagreb, Croatia Josip Stajfer, University of Zagreb, Croatia
ABSTRACT Numerous research and work papers discuss the positive correlation between a well developed financial system and a good overall economic performance in industrialized countries. In this paper we focus mainly on the particularities of transition countries and their financial sector – on a case study analysis of the current Croatian financial system development and trends in forming new financial institutions. In order to ascertain the role of financial intermediaries which are new to a transition economy, the paper analyses the structuring of investment funds and their economic management. We analyze the meaning of the structure of financial systems and the management of its markets, especially the capital market, in transition economies. We approach this issue with special regards to the Croatian capital market and investment funds as its component, analysing the existing unbalance in the financial system. The weakness of Croatian financial system is its structure symbolised by well-developed banks and by poorly developed market. As an EU candidate country, Croatia is undergoing substantive structural changes in the financial system. Strengthening of the non-bank financial institutions such as investment funds, would highly contribute to Croatia’s financial sector stability. These goals cannot be achieved without targeted state intervention through legal regulation in financial markets resulting in positive external effects – economic development and sustained prosperity.
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A Study to Determine Compliance with Minimum Requirements for Quality Assurance in the College of Economic and Management Sciences at the University of South Africa Dr. AG Oosthuizen, University of South Africa Vadm PvZ Loedolff, University of South Africa F. Hammann, University of South Africa
ABSTRACT During 2004, the Council for Higher Education (CHE) commissioned an investigation into the provision of distance education in South Africa. The report revealed serious quality issues in distance education and recommended a set of quality criteria for distance education, some of which were labelled minimum standards that are non-negotiable. During 2008, Unisa, as the only dedicated public distance education institution in South Africa, will in all probability be audited and measured against these minimum criteria. The College of Economic and Management Sciences (CEMS) at Unisa consequently commissioned a research project to determine its compliance with these minimum standards. The research entailed the evaluation of study material as well as opinion surveys amongst academic staff, students and tutors. The evaluation of the study packages revealed pockets of excellence as well as examples of poor quality. The results of the questionnaires were analysed statistically and revealed that certain issues that are deemed to be of critical importance have an extremely low level of satisfaction. Unisa is one of South Africa’s newly merged institutions and is the only dedicated public distance education institution of higher learning in the country. The Higher Education Quality Committee (HEQC) intends to visit the institution during May 2008 to do an audit of its affairs in terms of the Framework for Institutional Audits (CHE, 2004). As part of its preparation for the audit, the CEMS commissioned a research project to determine the College’s compliance with a set of minimum standards published in a research report on distance education, commissioned by the CHE in 2004 (CHE, Policy Advice Report 2004:68). With the merging of Technikon SA, Unisa and the distance education section of the Vista University (VUDEC) in 1994, the University of South Africa became the only dedicated distance education institution for higher education in South Africa.
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The Impact of Projected Demographic Developments on Growth, Long-Term Real Interest Rates and Funded Pension Provision Dr. Stefan W. Schmitz, Oesterreichische Nationalbank
ABSTRACT The following paper provides a critical analysis of the projected impact of demographic change on GDP-per-capita growth rates in the EU and on financial markets (in particular on long-term real interest rates). In addition, the paper argues that demographic change can have a large impact on funded pension provision. It does so by citing the results of a simulation study that integrates demographic developments in to a standard growth model, linking the results to the accumulation and annuitisation of funded pensions. Furthermore, the simulations introduce the possibility of the international diversification of investments and consumption as well as the integration of real capital markets. The need to cut benefits in public pay-as-you systems is defended by the inevitable impact of demographic change on economic growth. At the same time, private funded pension provision is tax subsidized in many OECD countries (i.e. Austria), as if it were not subject to the negative impact of demographic change. This paper questions the implicit assumptions in the economic policy discourse that (a.) demographic change future economic growth relative to historical experience, and (b.) private pension provision would not be negatively affected by demographic change. Its impact on funded pensions is frequently discussed in economic literature on the basis of the “asset meltdown” hypothesis. According to this theory, an increase in the share of pensioners as a percentage of the total population (or relative to the working age population) triggers a decline in asset prices, as pensioners dissave in old age and, owing to this demographic development, there might be fewer economically active persons that actively save than dissvares who act as sellers in the capital markets.
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The Relationship Between Service Failures, Service Recovery Strategies and Behavioral Intentions in Hotel Industry Dr. Chen-Hsien Lin, Diwan College, Madou, Taiwan, ROC Dr. I-Hua Lin, Lynn University, Boca Raton, FL Cheng-Te Lin, National Chung-Hsing University, Taichung, Taiwan, ROC
ABSTRACT This study explained the components of service recovery strategies used when service failure occurs in each situation in a hotel, and to link customer response to service recovery strategies to behavioral intention, as applied to the hotel industry in Orlando, Florida. The purposes of this study were to investigate the explanatory relationships between hotel guests’ sociodemographic characteristics and perceptions of (a) service failure; (b) service recovery strategies in each service failure situation; and (c) behavioral intentions; to investigate the impact of hotel guests’ sociodemographic characteristics and their perceptions of service recovery strategies used in each service failure situation compared with other strategies, in explaining behavioral intentions of hotel guests in Orlando, Florida. One research questions and four hypotheses were developed for this quantitative, non-experimental study. Several statistical measures, such as frequency distributions, reliability estimates, a correlational analysis, and multiple regression analysis were used for data analysis. Future studies may try to strengthen internal validity of the study; conduct a replication study in other service industries in other city as Las Vegas. In marketing, the most important strategy is to maintain current customers and attract new ones (McCole, 2004). As a result, most sellers attempt to deliver first-class service to customers because high-quality service is likely to enhance customer satisfaction (Simon & Kraus, 2005). Numerous studies have shown a positive correlation between customer satisfaction and repurchase intention, which can lead to future profitability (Simons & Kraus, 2005). However, failures, errors, mistakes, and complaints can frequently happen in the process of service delivery (Babakus, Yavas, Karatepe, & Avci, 2003).
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Fostering Critical Thinking in Business Courses: Pedagogical Innovations and Strategies Dr. Kirti Sawhney Celly, Celly Services, Inc., Long Beach, CA
ABSTRACT One of the key challenges facing business school educators in teaching at colleges and universities with large populations of minority and first generation college students is fostering critical thinking. This paper documents a number of pedagogical innovations and strategies for motivating students to read and reflect on their textbooks, scan their environment as consumers, and document and reflect on a course’s major theories and concepts in the context of their own experiences as consumers. Students are encouraged to use the WISE approach, that is, to wonder about, investigate, speculate, and evaluate theories, concepts and their own experiences. These strategies were specifically geared at increasing student interest, involvement, technology use, learning, and critical thinking. An exploratory look at the effectiveness of these innovations is provided through an examination of student assignments, results of in-depth interviews with students, and an examination of the course evaluations. Three strategies that received excellent feedback were the use of: poetry in the form of “brandomes” to summarize the essence of brands; online psychographic segmentation that gave students a first hand experience of being categorized, and engendered a lot of questioning; and short movies, to discuss branding and promotions. These strategies met with success in improving interest, involvement, technology use, learning, and critical thinking in the context of introductory marketing classes but have relevance for other undergraduate business courses.
Cited by: 9
E-Business Applications and Information Technologies: Providing New Opportunities for Women Dr. Varuna Godara, University of Western Sydney, NSW, Australia
Abstract The use of e-business applications and information technologies is increasing in almost all areas of for-profit Organisations and not-for profit organisations all over the world. These high-tech applications are capable of providing many benefits to individuals and organisations which include opportunity of telecommuting and equal opportunities. While the literature on benefits of e-business applications and information technologies is growing, there is limited substantive research focused on the impact of e-business applications and information technologies on gender bias and family-work conflict. While walking through the hi-tech market of the 21-century, we would love to see the intelligent, competent as well as the elegant women, breaking the ice of unobtrusiveness, and overpowering the old-boy network. But there is a long way to go before we actually see gender equality everywhere, especially in developing countries like India. Even today gender bias and family-work conflicts are impacting women’s career differently from those of their male colleagues. Therefore it is often among the topical issues of the day. In this paper the major hurdles or constraints coming in the ways of women and the status level or the class of the women working in IT companies are examined. After this a strategic plan to remove these constraints by the integration of women and E-Business applications and Information technologies have been suggested. The use of e-business applications and information technologies is increasing in almost all areas of for-profit Organisations and not-for profit organisations all over the world.
Cited by: 6
Exchange Rate Pass-Through to Domestic Prices: The Turkish Case (1994-2006) Dr. Ilyas Siklar, Anadolu University, Eskisehir, Turkey Dr. Nilgün Çaglarirmak Uslu, Anadolu University, Eskisehir, Turkey
ABSTRACT In this paper, we use a VECM model on monthly data from January 1994 to December 2006. The paper finds an incomplete and decreasing exchange rate pass-through to inflation in Turkey, consistent with findings on other countries. Our empirical results suggest that: (1) the exchange rate movements have a moderate effect on domestic price inflation (2) the exchange rate pass-through is more pronounced in PPI as compared to CPI due to the higher share of tradables in PPI relative to CPI; (3) the impact of pass-through on domestic prices spreads over 12 months, however, the effect is more pronounced in the first four months as indicated by pass-through coefficients of PPI and CPI; (4) the exchange rate pass-through to consumer prices have further weakened after the free float of lira against foreign currencies in February 2001 and resultant structural changes in the economy. This result, which shows a low exchange rate pass-through to domestic prices, has an important implication for the monetary policy implementation. Low exchange rate pass-through provides greater freedom for pursuing independent monetary policy especially through inflation targeting regime. The term "pass-through effect" refers to the effect of changes in the exchange rate of a domestic currency for foreign currency on the country’s domestic prices for traded and non-traded goods. According to Goldberg and Knetter (1997) exchange rate pass-through is defined as “the percentage change in local currency import prices resulting from a one percent change in the exchange rate between the exporting and importing countries.” Other authors (Menon 1995, McCarthy 2000, Hufner and Schoder 2002) understand pass-though effect in a broader sense, as “the process how home prices change in response to changes of exchange rates”.
Cited by: 6
Measuring the Effects of Employee Orientation Training on Employee Perceptions of Organizational Learning: Implications for Training & Development Dr. M. Akdere, University of Wisconsin-Milwaukee, WI Dr. Steven W. Schmidt, East Carolina University, Greenville, NC
ABSTRACT The most important goal of any given training effort is to achieve learning at the individual, group/team, and organization. This study used a paired samples design to measure the change in the employee perception of learning through an employee orientation training program in a large U.S. manufacturing company. The results and implications for training and development are discussed. The importance of training and development opportunities in the workplace cannot be overemphasized. An organization’s philosophy on workplace learning is a factor evaluated by potential employees in the job-hunting process. It is a factor that influences why workers accept jobs with certain employers. It is a reason why employees stay with an employer, and why they leave one employer for another. It is a key component in what employees look for in their jobs and in their organizations. Many organizations offer new employee orientation training as a way to introduce new hires to a variety of organizational-specific topics. New employee orientation training serves many purposes and has many meanings from both an organizational and employee perspective. For trainers to get leaders to transfer learning to behavior, and for leaders to get their employees to transfer learning to behavior, a lot of disciplined, consistent effort is needed (Kirkpatrick & Kirkpatrick, 2005, p. 14).Researchers have found that successful new employee orientation training helps new employees become familiar with their organizational environment. Often included in orientation training is information on the organization’s philosophy on learning, and on training and development opportunities within the organization.
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Stock Valuation by Simulation with a Jump-Diffusion Model Dr. Wen-Lian Liu, China University of Technology, Taipei, Taiwan Dr. Cherng-Shiang Chang, FRM, China University of Technology, Taipei, Taiwan
ABSTRACT By using techniques from real options theory and modern capital budgeting, Schwartz and Moon (2000, 2001) devise a rational pricing method of internet companies. In this article we extend the valuation model of Schwartz and Moon (2001) in several ways. First, we employed a jump model for the evolution of revenues in addition to the original pure diffusion model. A Poisson process is incorporated to capture the possible jumps of company revenues, which occur frequently in the real world. Second, to deal with the problem of valuing the stock options with early exercise features, we apply the Least Square Monte Carlo method proposed by Longstaff and Schwartz (2001). An illustrated company, eBay is valued and the results are compared with those obtained by Schwartz and Moon (2001). The results reveal that the presence of random jumps will decrease the firm value or stock price. For the non-equity claims, like warrants, or employees’ stock options, the early exercise of the claims will raise the equity value of firm earlier, and in turn, re-invest them earlier to increase the firm value. Nowadays it is widely accepted that the real options approach is superior to discounted cash flow (DCF) model. As acknowledged by Mason and Merton (1985), a capital budgeting problem can be described as a collection of real options, i.e., a set of opportunities managers have to deviate from a previously decided course of actions.
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Marketing To Multiple Audiences: A Case of the Tang Teaching Museum at Skidmore College, NY Dr. Elzbieta Lepkowska-White, Skidmore College, Saratoga Springs, NY Dr. Kristina Powell, Skidmore College, Saratoga Springs, NY
ABSTRACT In this research case we investigate marketing strategy in a new format of a museum. Placed among the clusters of traditional red brick architecture covering the Skidmore College campus in Saratoga Springs, New York, the Frances Young Tang Teaching Museum and Art Gallery (commonly referred to as ‘the Tang’) “begs to be noticed.” The Tang is a shift in the college museum model. Rather than serving the interests of a specific discipline the Tang was built to serve as a teaching museum of modern art that crosses boundaries between multiple disciplines. Despite being a not-so-typical museum, the Tang is facing some marketing challenges that are very typical to the museum field. The Tang serves multiple audiences including the Skidmore administration, faculty and students, the regional community, donors, and the contemporary art world. All of these groups have different needs, interests, and goals which they envision for the Tang. In this case we present efforts that have been undertaken by the Tang to target its multiple audiences and the outcomes of these approaches. The case is based on the multiple interviews with the Tang administration and the Tang customers. The Frances Young Tang Teaching Museum and Art Gallery, founded by Skidmore College, opened to the public in October of 2000. The museum is named after a 1961 Skidmore alumna, Frances Young Tang, whose family provided generous support for its creation and development. Traditionally, college museums are founded on the basis of an inherited collection in either the sciences or fine arts.
Cited by: 4
Organizational Commitment Across Different Employee Groups Dr. Sinan Caykoylu, Simon Fraser University, Burnaby, BC, Canada Dr. Carolyn P. Egri, Simon Fraser University, Burnaby, BC, Canada Dr. Stephen Havlovic, SUNY Institute of Technology, Utica, NY
ABSTRACT Although, over the decades many models for different employee groups were developed that examined commitment levels in organizations, this field of study still lacks a parsimonies unified model that encompasses all the employees of an organization as a whole. This study first proposes a parsimonies organizational commitment model and than tests it across different employee groups of a hospital. Our findings suggest that job satisfaction plays a key role in determining organizational commitment levels, as does effective leadership and less role ambiguity. Empowerment, job motivating potential, and role conflict have an important influence on job satisfaction. Interestingly, acceptance by coworkers was not related to either job satisfaction or organizational commitment levels. Organizational commitment has received a great deal of interest and has been a subject of many studies (Bateman and Strasser, 1984; Iverson and Roy, 1994; Mowday, Porter and Steers, 1982). This interest about organizational commitment is driven by several reasons. Organizational commitment is a relatively stable construct over time (Porter et al., 1974); previous studies have consistently found that organizational commitment is negatively related to turnover, absenteeism and performance (Steer, 1977). Studies have also repeatedly found organizational commitment to be positively related to job satisfaction, job involvement and coping with job tension (Porter et al., 1974). Steer (1977) also showed the link between organizational commitment and various other variables such as, employee’s job, role and task identity; as well as, demographic differences (gender, age and job tenure).
Cited by: 52
TFP Growth at Private Sectors of Turkey Dr. Arzu Alvan, Yasar University, Bornova, Izmir, Turkey Dr. B. N. Ghosh, Eastern Mediterranean University, Famagusta, TRNC
ABSTRACT Aim of this study is to measure the Total Factor Productivity (TFP) growth in private sectors of Turkish Manufacturing Industry between of 1992 and 2001. Also Value Added (VA) growth components of the sectors are decomposed. For this purpose Two-Deflator Growth Accounting Approach is applied. There is a direct relationship between TFP growth and VA growth at the private manufacturing sectors. TFP growth is positive at almost all sectors. Raw labour’s contribution to VA growth plays the most significant role. Besides, capital’s contribution to VA growth of almost all private sectors is positive throughout the examined period. Scarcity of resources is one of the main reasons to produce under efficient and productive production processes to get the highest possible volume of output. Researchers often find that productive production process is the result of the growth of Total Factor Productivity (TFP). And the two-way causality between TFP growth and output growth are also being proved by Harberger, among others (Robles, 2000, Harberger, 1998). Moreover, when TFP growth increases, the growth rate of Gross Domestic Product (GDP) follows an upward trend; while falls in TFP growth are correlated with decreases in GDP growth rates. Therefore, it is possible to understand growth in GDP by explaining the elements causing positive changes in TFP. This is why a comprehensive study of the growth process must include an analysis of the sources of TFP growth (Robles, 2000).
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Investigating the Impact of Gender on Managing a Sales Force in a Developing Country: An Exploratory Study in Tajikistan Dr. Musa Pinar, Valparaiso University Dr. Joelle E. Nisolle, West Texas A&M University Dr. Michael K. McCuddy, Valparaiso University
ABSTRACT This exploratory study investigates applicant (student) perceptions of the gender effect on managing and supervising efforts regarding salespeople in Tajikistan. Based on 149 surveys, the results for the entire sample of students, as well as for male and female subsamples, show the existence of a significant gender effect where they prefer to work for male managers and feel that male managers would reward them satisfactorily. Also, comparisons of male students versus female students reveal significant differences between the two genders in terms of training, motivating, and rewarding recruits. The study discusses the managerial implications of these findings for developing and managing a successful sales force. In recent years, as more women have joined the labor market, the makeup of the work force has changed in all industries. Seeing women in many traditional male-dominated fields is not uncommon. This change is not unique to western countries; rather it is becoming increasingly common to see women joining the labor market in many developing countries. These developments have brought both questions and challenges in managing an increasingly diverse work force. For example, recent research in the United States has shown that even though women are successful in the traditionally male-dominated field of selling, they still face some barriers in gaining entry to some selling jobs (Anonymous, 1988; Fugate, Decker, Decker, & Brewer, 1988;). Prior studies of women in sales (Comer & Jolson, 1991; McNeilly & Russ, 2000; Russ & McNeily, 1988; Swan & Futrell, 1978; Swan, Rink, Kiser & Martin, 1984) suggest that stereotypes of women in selling still exist in the minds of both potential customers and managers.
Cited by: 8
Changing Organizational Structure to Accommodate New Management Technology in a University: A Case Study Dr. Jay L. Tontz, California State University, EastbayDr. Sam Basu, William Paterson University
ABSTRACT “… Companies have learned that information technology isn’t a silver bullet. New IT must be combined with organizational change to achieve real productivity gains.” Business Week, February 9, 2004 In Organization theory [2, 3], technology and the choice of the organization structure have generally been closely related. Although there is little agreement about the strict causal direction of such a relationship, there is general consensus among most organization theorists that technology does play a role in determining the resulting organization structure [3]. From a macroeconomic point of view, a number of economists in the US and elsewhere, engaged in a series of debates around the question of a lag between the introduction of information systems technology and the desired gain in labor productivity [1]. It is quite possible that the lag was, at least partially, due to issues related to implementing the necessary organizational changes required to accommodate the new technology. It is generally understood that universities tend to be less dynamic than organizations which are to a greater degree market driven. It might therefore be of interest to look at the case of introducing a somewhat radical organization structure driven by evolving technological in a college/university setting. This paper provides an example of how one part of our university reorganized staff assignments to take advantage of new information technology and the subsequent increase in labor productivity. In the mid 1990’s the California State University system office signed a contract with PeopleSoft to provide management software for the central office and each of its twenty-three campuses.
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An Integrative Framework of Workplace Stress and Aggression Dr. Susan M. Stewart, University of Puget Sound, Tacoma, WA
Abstract This paper presents an integrative framework based on research related to workplace stress and aggression. While many researchers have demonstrated that individual differences in personality can affect both perceptions of job stressors and negative affective reactions to perceived job stressors, the role of cognitive appraisal has been largely overlooked. This framework examines cognition, namely conditional reasoning (James, 1998), in the interpretation of stressful environmental events occurring prior to experiencing negative emotion. Workplace aggression is treated as the result of a multistage process with four components: individual differences in personality, occurrences of stressful events, cognitive appraisals of those events, and emotional reactions to the appraisal process. During the past decade, aggressive workplace acts have been shown to be occurring at alarming rates and costing organizations billions of dollars every year. Workplace aggression is defined as “attempts by individuals to inflict harm to others with whom they work, or have worked, or to the organizations in which they are currently, or were previously employed” (Neuman & Baron, 1997a, p. 38). Incidents or patterns of aggressive behaviors (e.g., bullying, verbal/physical assault) can cause great financial loses due to litigation, employee turnover, lower productivity, and negative publicity (Le Blanc & Kelloway, 2002; Leymann, 1990; Vigoda, 2002). Furthermore, employees subjected to workplace aggression report a wide range of physical, psychological, and social complaints that prevent them from effectively performing their jobs (Button, 2001; Fox & Spector, 2005; Raggins & Cornwell, 2001). As such, aggression in work organizations has become a concern for practitioners and researchers alike.
Cited by: 15
Measuring the Effects of Employee Orientation Training on Employee Perceptions of Organizational Culture: Implications for Organization Development Dr. M. Akdere, University of Wisconsin-Milwaukee, WI Dr. Steven W. Schmidt, East Carolina University, Greenville, NC
ABSTRACT Using a paired samples design, we measured the changes in employee perceptions on organizational culture. Employees at a major manufacturing company were surveyed before attending a new employee orientation training, immediately after the training, and one month after the training. The findings and implications for future research are discussed. Learning about an organization’s culture is very important to all employees as they go through the steps of the hiring process, and also as they become new employees in an organization. Potential and new employees form impressions about an organization’s culture from many sources, both formal and informal. There are a variety of ways organizations can teach new and potential employees about their cultures. An organization’s new employee orientation is often used to address organizational culture. Is this an effective venue, over both short and longer-term periods of time? The purpose of this research is to examine the effectiveness of new employee orientation training programs on new employee perceptions of organizational culture. Perceptions were measured both before and after new employee orientation, as well as one month after the conclusion of new employee orientation. This paper examines the results and findings of this study. Based on the results and findings, conclusions are made and recommendations are presented. The variety of sources potential new employees use to learn about an organization’s culture can be problematic. Cable, Aiman-Smith, Mulvey, and Edwards (2000) found that information gathered by potential employees regarding organizational culture can be inaccurate, which could lead to a mismatch between employee expectations and the actual organizational culture.
Cited by: 27
Contagion Intra-Industry Effects of M&A Announcements(1) Dr. Hironobu Miyazaki, North Asia University, Akita, Akita, Japan Dr. Hiroyuki Aman, Nagasaki University, Nagasaki, Japan
ABSTRACT M&A is generally considered to influence not only the firm engaging in M&A but also the rival firms in the corresponding industry. Using an event study methodology, this study investigates how stock prices of rival firms respond to the release of M&A announcements. On examining firms in the pharmaceutical industry, we find that some rival firms are under the contagion effect of M&A. Moreover, the major results of factor analysis are summarized as follows. First, there is a curvilinear relationship between firm size and the probability of the contagion effect hypothesis. At low levels of firm size, the relationship is negative; at high levels, it is positive. Second, R&D-intensive firms, which have the full potential to absorb new R&D knowledge, obtain technology from the M&A market to a large extent. There is complementarity between R&D intensity and M&A. Recently, M&A has become a popular strategy among Japanese firms. In 2004, the total number of M&A transactions exceeded 2000, and in 2006, the number of transactions recorded was 2775. M&A influences not only the firms engaging in M&A but also the rival firms, by exerting positive and negative effects upon them in the corresponding industry. Generally speaking, M&A has the following merits: First, firms engaging in M&A increase productivity by obtaining synergistic gains, for example, economies of scale and scope (2). For instance, they strengthen marketing capacity, each complementing the other’s weak points. Second, firms engaging in M&A acquire technology from the M&A market or realize technological complementarity by combining both internal and external technological knowledge.
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Analyze of Tourist Destination Cluj-Napoca, Romania Dr. Smaranda Adina Cosma, “Babeþ-Bolyai” University Cluj-Napoca, Romania Dr. Adina Negrusa, “Babeþ-Bolyai” University Cluj-Napoca, Romania Dr. Partenie Dumbrava, “Babeþ-Bolyai” University Cluj-Napoca, Romania
ABSTRACT The industry of tourism represents one of the sectors with the highest development at global level. Romania has an important tourism potential but this is not sufficiently exploited. The city of Cluj-Napoca is one of the biggest from Romania, an important academic, cultural and business centre, combine with a various tourist offer - cultural and historical monuments, a diversified portfolio of accommodation establishments, restaurants, clubs, tourist agencies and an attractive natural-geographic space. All those make from Cluj-Napoca an interesting tourist destination for various type of tourist. The paper analyses the tourist supply and identifies the demand for the destination. The study underlines possible differentiation elements for the city comparing with its main competitors. In conclusion, we try to find a correlation between the offer and the customer needs. Romania has almost all the features to be one of the preferred tourist destinations: it is blessed with a beautiful landscape, it can offer different types of tourism (mountain tourism, heritage and cultural tourism, rural tourism, spa tourism, geo-tourism, MICE tourism – meeting, incentives, conferences and exhibitions –, seaside tourism) and it has a diversified supply of lodging capacities. Despite this, the travel and tourism economy (direct and indirect impact of visitor activities, capital investment, export and government services) contribution to Romanian GDP varied around the 2%.
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An Empirical Analysis of the Impact of ISO Quality Standard Certification Dr. C. P. Kartha, University of Michigan - Flint, Flint, MI
ABSTRACT ISO9000 is a series of internationally accepted guidelines as to how companies should set up their quality assurance systems. Focusing on procedures, controls and documentation, the standard is designed to help a company identify mistakes, streamline its operations and be able to guarantee a constant level of quality. It is rapidly becoming to be a de facto requirement for doing business in many industries. The certification process requires a significant investment of both human as well as financial resources of the organization. There have been questions raised as to the worthiness of making such investments by organizations for obtaining certification. This paper presents the results of a survey designed to study the impact of certification on a number of factors such as customer satisfaction, improved productivity and profitability. Quality is the most important concept in the corporate world today. The quest for quality is probably more widespread and intense globally today than at anytime in history. Organizations have realized that the key to increased productivity and profitability is improving quality and in order to survive competition from home and abroad, they are forced to return to the basics of better quality management and cost competitiveness measures for their products and services. One of the most effective strategies evolved over the years has been based on the concept of Total Quality Management (TQM). TQM is a systems approach to management that aims to enhance value to customer by designing and continually improving organizational processes and systems. It provides a new vision for management leadership.
Cited by: 14
Integrating SEE Countries in the European Services Trade: The Case of Romania Dr. Ana Bobirca, Academy of Economic Studies, Bucharest, Romania Dr. Paul Miclaus, Academy of Economic Studies, Bucharest, Romania
ABSTRACT Services account for more than 70% of overall European GDP, while exports represent only one-fifth of intra-European trade. One of the justifications is that trade costs resulting from the multitude of regulatory barriers in the European states constitute a significant impediment to services trade. In the course of their negotiations with the WTO and the EU, most countries in South-Eastern Europe (SEE), including Romania, have started to make noticeable progress towards opening up their services markets. But barriers to the integration of services markets are still important. The paper indicates that removing these barriers would raise the area’s economic growth potential and enhance its resilience to shocks. The enlargement of the European Union to include several Central and Eastern European countries has led to intense investigation and speculation regarding its impact on both existing members and future participant countries, as well as on the multilateral trading system and world trade in general. Some analysts consider that European integration to date has caused considerable trade diversion, manifested especially in agricultural products. Previous enlargements of the European Union led to prolonged negotiations with the Union’s trade partners, such as the United States. The recent inclusion of two South-Eastern European (SEE) countries (i.e. Romania and Bulgaria) is already raising similar concerns. Taking into account that the services sector assumed dominant position among economic activities in most SEE countries (Romania, Bulgaria, Croatia, FYR Macedonia, Albania, Bosnia and Herzegovina, Serbia and Montenegro), bearing heavily on economic development, it became of utmost importance to explore and discern the tendencies in services trade in the region, aspects dealt with in the first part of this paper.
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Globalization & Labor: Needs, Means & Returns Dr. Alev M. Efendioglu, University of San Francisco, San Francisco, CA Dr. L. W. Murray, University of San Francisco, San Francisco, CA
ABSTRACT The technological changes of the past two decades have brought about significant and profound changes in our society and economy. Technology, specifically the telecommunications technologies, has created environments and delivery systems that have accelerated globalization with increased offshoring of business processes and 24/7 business operations. However, increased globalization has often resulted in local labor shortages, especially in countries which have been the major recipients of globalized business processes. These changes have also created opportunities and challenges for organizational trainers, as they extend their training efforts, unburdened by time, location, or knowledge source. Unfortunately, in spite of the best efforts of organizations and the professional trainers’ associations, there are significant problems in evaluating the true impact of training. These attempts encounter significant challenges in measurement of the costs and benefits and use valuation methods which will not be acceptable for valuation of other organizational investments. This paper reviews and discusses the impact of globalization on shortage of skilled labor in developing countries, and proposes and demonstrates how traditional investment valuation methods, can and should be incorporated in to the valuation of organization training. The technological changes of the past two decades have brought about significant and profound changes in our society, economy, and educational systems.
Cited by: 3
Cross-Cultural Competence: The Role of International Project in US Business Schools Curricula Dr. Gordana Pesakovic, Argosy University, Sarasota, FL
ABSTRACT The purpose of this exploratory paper is to assess the concept and practice of the short-term programs abroad in the US business schools. The paper addresses the following questions: What do US companies need to operate successfully in a global economy? How is academia addressing these business needs? What is the role of study-abroad programs? The paper uses a case study of short programs abroad offered between 2004 and 2006 at Argosy University/Sarasota. The world is changing! How many times have we heard this statement? “The world is flat,” according to ancient Pythagoreans or according to Thomas Freedman. Plus ça change, plus c’est la même chose. “All is one,” Hinduism declares! How much do we know? How much do we not know? How much of what we know is false and how much true? How much…? Allan Goodman (2005) portrayed the alarming status of “the American mind”: 87% of college-educated adults cannot find Iraq on a map; 83% of our citizens do not have a passport, and 50% of those who do are either over 60 or under 5 years of age; 70% of Americans today can neither name the president of Russia nor identify the job that Kofi Annan holds; 60% believe we have a fully-functioning anti-missile shield that is protecting us as we speak from terrorists and rough states; 3 out of 300 of the world’s smartest freshmen (at the Fletcher School), can pass a world geography placement test, and those 3 tend not to be US citizens.(p.198); Can the US “globalize” the world without “globalizing” itself?
Cited by: 7
The Introduction of Urboun Call Option (UCO) Nuradli Ridzwan Shah Bin Mohd Dali, Islamic University College of Malaysia, Negeri Sembilan, Malaysia
ABSTRACT Derivatives are complex instruments since its value derived from underlying assets. Options is a type of derivatives that gives rights to buyer or seller to exercise their rights based on the price movement of an underlying assets. However, options is not acceptable according to many scholars due to its speculative nature and premium fee charge and not because of its promise. This is a proposal to the Muslims scholars to accept options developed using Urboun or deposits as a replacement to premium fee charged in conventional options. The need for reevaluating the currency derivative market for the benefits of maslahah, and exploring the option currency market using Urboun or deposits would enrich the Islamic economics literature. Currency or money is an important aspect in our life because it facilitates trade activities, payments of debts and zakah, and measures of values or units of account and as storage of values. The purpose of currency trading is for three reasons which namely sale and purchases of currency, a) to settle international payments, b) to hedge against market volatility and c) to make profits (Saiful Azhar, 2005, pg 565).The evolution of the economic system from barter trading to the uses of bimetallic and fiat money (paper money) as a medium of exchange shows that the process of civilization, modernization and the fallen of a society do have strong connections with monetary stability. T
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Consumer Perceptions of Foreign Products: An Analysis of Product-Country Images and Ethnocentrism in Guatemala Dr. John E. Spillan, Pennsylvania State University at DuBois, PA Dr. Orsay Kucukemiroglu, Pennsylvania State University at York, PA Dr. Talha Harcar, Pennsylvania State University at Beaver, PA
ABSTRACT Throughout the world consumers are connected with a myriad of products and services from all over the world. The advent of ever changing and rapid communication, has given consumers far more knowledge about products than any time in history. The consequence of this information availability allows the consumer to examine the product’s country-of- images more closely. As such, their information and perceptions about the country and product has an impact on consumer behavior and is a major concern of marketers. The goal of this paper is to present the results of a study that was conducted to analyze the perceptions of Guatemalan consumers regarding products-country of origin images. In addition, Guatemalan ethnocentrism and life styles were analyzed to develop a perspective on what other factors may be influencing their buying patterns. The findings of the study revealed that several lifestyle dimensions exist among Guatemalan consumers which have an influence on their ethnocentric buying tendencies. Over the last four decades, the country-of-origin (COO) concept has been studied, discussed and evaluated as an important dimension in understanding how consumers purchase products and how companies market products in foreign countries. The effects of a product’s country of origin on buyers’ perceptions and evaluation has been one of the most widely studied phenomena in the international business, marketing and consumer behavior literature (Tan and Farley, 1987; Papadopoulos and Heslop, 1993).
Cited by: 26
Value-at-Risk Analysis for Korean Stock Market: Asymmetry and Fat-tails in Return Innovations Dr. Sang Hoon Kang, .University of South Australia, Adelaide, Australia Dr. Seong-Min Yoon, Pukyong National University, Busan, Korea
ABSTRACT The correct assumption of return distribution might improve the estimated performance of the Value-at-Risk models in financial markets. In this study, we investigate the VaR of Korean stock market using the APARCH model with normal and Student-t distribution. The APARCH model can capture clustering and asymmetry in volatility, and the assumption of Student-t distribution can reflect the fat-tail innovations. Form the empirical results of diagnostic statistics, the in-sample analysis and the out-of-sample analysis, we can find that the Student-t APARCH VaR models for long and short positions predict critical loss more accurate than the models with normal innovations. In recent years, the financial regulators and supervisory committee of financial intuitions have paid great attention to effective risk management or investment in the markets. Indeed, most financial institutions seek to avoid their exposure losses or minimize possible investment risk. In this purpose, financial institutions have put great emphasis for the development and adoption of accurate measures of market risk (Duffie and Pan, 1997). Some quantitative techniques have been introduced to appraise possible losses that financial institutions can incur. Of these techniques, the Value-at-Risk (VaR) is one of most popular technique for measuring market risk that has been widely used in banking and securities sectors. As far as economics and finance are concerned, VaR calculates the maximum loss (or worst case scenario) on an investment, over a given time period (normally 1-day or 10-day) and a given probability .
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FedEx: Leveraging IT for a Competitive Advantage Dr. Nabil Alghalith, Truman State University, Kirksville, MO
ABSTRACT The primary subject matter of this case is to examine the strategic and operational impacts of information technology on FedEx. Secondary issues examined include IT architecture, and the impact of IT on business model evolution. FedEx Corporation is the premier global provider of transportation, package delivery, e-commerce, and supply chain management services. The company offers integrated transportation and logistics solutions through a network of subsidiary companies that collectively compete under the worldwide FedEx name. The family of companies includes FedEx Express, FedEx Ground, FedEx Freight, FedEx Custom Critical, FedEx Trade Networks and FedEx Services. FedEx handles 3.3 million packages nightly, employs over 200,000 people, and connects customers to 215 countries within 24 to 48 hours. The case provides a thorough analysis of the strategic and operational impacts of IT implementation on FedEx. The case examines the following aspects of FedEx: 1. History and background 2. Organization structure 3. Business model 4. Competitive environment 5. Information technology architecture 6. IT deployment and assessment 7. Recommendations 8. Lessons learned The strategic grid (Applegate) and competitive forces model are used to assess the impacts of information systems implementation on corporate competitiveness, organization structure, systems integration, streamlining and automation of operations.
Cited by: 6
Corruption and Its Economic and Business Implications Dr. Syed Shahabuddin, Central Michigan University, Mount Pleasant, MI
ABSTRACT Corruption has economic as well as social implications. Both obviously affect society, usually in adverse ways. However, the word corruption means different things to different societies. Some societies accept corruption and others do not. Unfortunately, corruption persists and leads to despair and resignation among those who attempt to control it. The effects of corruption are further complicated by the fact that the reason most political regimes crumble is widespread misconduct among politicians and public officials and the accompanying unlawful practices among business and the public. Such conditions almost always pave the way for dictatorships through coups and the resultant governments which are initially accepted overwhelmingly by the population. Regardless of whether corruption is acceptable to individual societies or not, corruption needs to be addressed worldwide because of its undesirable economic and social consequences. Therefore, many methods have been developed to measure various types of corruption, including the Business International Index (BI), the World Economic Forum Index (GCR), the Transparency International Index (TI), and the World Bank’s Private Sector Survey. (A list of countries and their corruption index rankings according to Transparency International is in the Appendix.) All these indices measure levels and types of corruption. These many measurement tools indicate the concern of the world community with corruption and the serious consequences corruption has on people and societies.
Cited by: 7
Relation Between Manufacturing Practices, Flexibility and the Performance in ERP System Firms Leopoldo Gutierrez Gutierrez, University of Granada, Spain Javier Tamayo Torres, University of Granada, Spain
ABSTRACT In recent years, the management literature has produced various articles on the importance of flexibility for a company and its performance. This paper focuses on the relationship between flexibility and higher performance in companies with flexible manufacturing planning, such as Enterprise Resource Planning (ERP). This research analyses [JLP5] the literature on manufacturing flexibility and manufacturing practices to explore the performance obtained by companies with the ERP system. The research is based on three basic operating strategies according to the firm’s focus of activities. Today’s manufacturing environment can be characterized by intensified competition, rapid market changes, increased product variety and short product life cycles. To be competitive, manufacturing enterprises must respond rapidly to changes in product demand (Persentili, E. and Alptekin, S., 2000). The uncertainty of the environment in recent years has forced companies to be flexible in their decisions and structures. Flexibility and company performance have been studied in the academic context, but the relation to strategic planning such as ERP has not. There is increasing recognition in today’s manufacturing environment of the need for more flexible Manufacturing Planning and Control (MPC) strategies that can respond to rapid changes in product demand. Our research has two main goals. Firstly, we seek to perform a literature review of manufacturing flexibility and performance in ERP systems firms. Secondly, we seek to establish a model to measure whether more flexible companies achieve better performance.
Cited by: 3
Valuation of Callable Convertible Bond with Parisian Feature Using Finite Element Method Dr. Pu Gong, Huazhong University of Science & Technology, Hubei Province, P.R. China Jianling Meng, Huazhong University of Science & Technology, Hubei Province, P.R. China
ABSTRACT A valuation model for a callable convertible bond with Parisian feature and notice period requirement is presented here using the arbitrage-free valuation method. Different from the existing works, we analyze the interaction between the optimal call policy and the optimal conversion policy based on the game theory analysis of options. Moreover, the finite element method is adopted to solving the pricing model and the projected successive over-relaxation technique is used to handling the American constraint. Finally, the convertible bond issued by China Merchants Bank is taken for an example to illustrate how the model works. Results show that notice period and Parisian feature have significant effect on the value of convertible bond and the optimal policies, and the so called “delayed call” phenomena has got some explanations here. Most convertible bonds provide the issuer with the right to call back part of or all of their convertible bonds, which would take away the opportunity that the holder can convert the bonds into stocks at higher stock price level. To keep the convertible bond attractive, the so called soft and hard call constraints are designed. The hard call constraint restrains the issuer to initiate the call during the early life of the bond and the soft call constraint further requires the stock price to be above certain trigger price (usually 30% to 50% higher than the conversion price) for a consecutive or cumulative period. The excursion time requirement in the soft call constraint is called the Parisian feature.
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A Method to Advance Mutual Understanding in a Multi Partnership Project Tapani Ryynänen, Technical Research Centre of Finland, Espoo, Finland Kim Jansson, Technical Research Centre of Finland, Espoo, Finland
ABSTRACT In group work, especially across organizational borders, it is challenging to transfer and manage information. In a joint research project initiated by several companies the management group has an important role as information and knowledge transferring medium. This role can be supported by using a facilitated systematic method that interconnects the corporate level and the network level (management group level) processes thus reducing the stickiness of the information and supporting participants ability to exploit the information. A group of Finnish maritime industry companies together with the researchers used the method to think up and elaborate the most valid challenges to establishing business in China. The challenges were listed, combined, evaluated, and put through SWOT analysis. Finally the management group considered the possible steps to take both as a group and as a single company. Often we see in real life inefficient communication between partners in R&D projects. In multi-partnership projects the centre of communication is the project team, often in smaller projects acting also as a management team. Communication tasks within and by this group are where efficiency should be improved. Each partner in the project has its own communication and decision processes also on the company level, where often company confidential information is handled. These processes are interconnected via a management group, in such a way that both benefits of sharing information and keeping the confidentiality of information can be achieved.
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The Impact of Using Information Technologies on Crisis Management Success in Small and Medium Sized Enterprises Dr. Muammer Zerenler, University of Selcuk, Konya, Turkey Dr. F. Atýl Bilge, University of Selcuk, Konya, Turkey Derya Özilhan, University of Selcuk, Konya, Turkey
ABSTRACT This paper reports the findings of a survey on the use of Information Technology (IT) in crisis management in Turkish small and medium sized. The survey was sent to 241 enterprises with 249 employees or less, resulting in a response rate of 55,6 %. Statistical analysis of the result this study demonstrates that the level of IT use in crisis management is predominantly related to the presence of a member in the crisis management team with an IT background. Crises can take many forms and result from a wide variety of causes. Moreover, every company can and probably will be hit by a crisis in the near or long term future. However, it is not because crises are bound to happen, that a company cannot cope with it. A proper response does not only reduce damage and facilitates the aftermath; it is even often a plain necessity for survival. This becomes clear when examining the alarming results of Ianna (1997) and Wilson (2000), who point out that the majority of firms who experience a severe crisis face failure within the next two years. The term “crisis” has been defined differently by management writers (see, for example, Fink, 1986; Bell, 1971; Pauchant and Mitroff, 1992; Booth, 1993). In layman terms, the Longman Dictionary defines a crisis as ``a turning point in the course of any thing; uncertain time or state of affairs; moment of great danger or difficulty'' (Longman, 1978).
Cited by: 7
Marginal Revenue Productivity and Scale Economies Dr. Yahn-Shir Chen, National Yunlin University of Science and Technology, Taiwan Chao-Ling Lin, Chang Jung Christian University, Taiwan
ABSTRACT This study investigates marginal revenue productivity and scale economies for different organization structure of audit firms in Taiwan. Empirical results indicate that the contribution to audit firms from practicing certified public accountants is significantly higher than that of from their assistants. Marginal revenue productivity of certified public accountants in partnership firms is significantly lower than that of in proprietorship firms. In the overall sample firms and proprietorship firms, certified public accountant is under-compensated but over-compensated in the partnership firms. Finally, scale economies prevail in the public accounting profession and the degree of scale economies is higher in proprietorship firms. For years, certified public accountants (CPAs) have been regarded as lucrative professionals or so-called "deep pockets" and also face the threat of litigation against them (Menon and Williams, 1994). However, public accounting profession is also a labor-intensive industry and overtime work is a common practice. High compensation of CPA is thus an exchange for long hours of work. As a practical matter, it is reasonable for a member who makes greater contribution to an organization and rewarded with high compensation. In a typical public accounting firm, auditors include practicing CPAs and their assistants. Is the compensation of auditors commensurate with their contribution? To address it, we firstly employ translog function to estimate the contributions of auditors, that is their marginal revenue productivity.
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Local-Currency Pricing and Investment Decision under Exchange Rate Changes: A Two-Period Model of International Duopoly Piriya Pholphirul, The National Institute of Development Administration (NIDA), Bangkok, Thailand
ABSTRACT Changes of Exchange rate affect multinational firms on deciding level of their foreign direct investment. To capture the role of firm to expect exchange rates change before deciding their local-currency pricing, exchange rate movement can be either temporary change or permanent change due to demand-supply of currency as well as the policy implementation toward exchange rate regime. We extend the previous studies of dynamic international duopoly model of Froot and Klemperer (1989) and Tivig (1996). In the real world, multinational corporations can simultaneously invest in local market and perform the local-currency pricing strategy by observing the exchange rates volatility. The results show that multinational firms will less likely to change their international price-setting as well as degree of foreign direct investment outflows if exchange rates perform temporarily, but will do aggressively if exchange rates are expected to change in the future. Moreover, as found by Tivig (1996), a temporary depreciation of domestic currency induces the foreign firm to “perverse” the pass-through effect by increase in the price in the first period instead of lowering the price. The uncertainty effects are not included in this model to follow the perfect-foresight condition. Followed the collapse of the Bretton Woods exchange rate system in the 1973, there has been a considerable increase of the studies on relationship between exchange rates and goods prices.
Cited by: 2
The Evaluation of Vendor’s Product Performance Ville Hinkka, Helsinki University of Technology, Finland Frank Bescherer, Helsinki University of Technology, Finland
ABSTRACT This paper offers practitioners and academics a novel approach that facilitates important decision evaluations. The presented model can be used to evaluate different quotes for technically challenging tasks or products. The special focus is on considering alternative situations during early innovation phases in high-technology environments with complex tasks. The proposed model can be used to identify possibly gaps between the purchaser’s requirements and given alternatives. The model is constructed to help purchasers evaluate these gaps, compare them, and make a final decision based on the evaluations and price differences. The approach starts by defining the task and relevant system being studied. Then the analyzing company should define the attributes to be evaluated in the different options. Subsequently, the company needs to get quotes for the required product or service, analyze them and identify critical parameters. It is then possible to arrange them in order from most to least critical. The next step is to identify each critical parameter’s target level. The last parameter to consider is always the price the vendor requires, because a value called ‘deficiency price’ will be added on to that at the end of the procedure. This deficiency price is the value of the margin between the target and offered level. The basis for the evaluation is that if the target and offered performance are the same, there is no effect on price. If the offered level is below the target, the price increases.
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