The American Academy of Business Journal

Vol.  12 * Num.. 1 * September 2007

The Library of Congress, Washington, DC  ISSN: 1540 – 7780

Online Computer Library Center * OCLC: 805078765

National Library of Australia * NLA: 42709473

The Cambridge Social Science Citation Index, CSSCI

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The Financial Management of Military Pilot Training Costs: An Assessment of U.S. Navy and

U.S. Air Force Pilot Training Attrition Rates

Albert Joseph Sprenger Jr., Embry-Riddle Aeronautical University

Dr. James T. Schultz, Embry-Riddle Aeronautical University

Dr. Marian C. Schultz, The University of West Florida



Obtaining aeronautical ratings can be extremely costly expensive. The U.S. Air Force and U.S. Navy have elected to send their pilot candidates to civilian flight schools prior to starting military training to insure they possess the basic capabilities to pilot aircraft. The Air Force and Navy programs differ in the number of hours students receive prior to starting military training; the Air Force program is 50 hours including receiving their Private Pilots rating, while the Navy program is 25 hours. This study examined the differences in attrition rates of Navy student pilots at U.S. Navy Pilot training, and Navy student pilots at U.S. Air Force Pilot training. The research hypothesis was that Navy students who train with the Air Force will attrite at a greater rate than students undergoing training with the Navy. The hypothesis based on a lack of experience of the Navy student, as compared to Air Force students, who begin training with a private pilot’s license. The research utilized the causal-comparative methodology. The hypothesis was tested utilizing a two-dimensional Chi-Square nonparametric test of significance, at the .05 level of significance. The research hypothesis was not supported; there was no significant difference in attrition rates between Navy students at Air Force Pilot training as compared to those attending Navy Pilot training. Initial observations indicate that Navy students attending Air Force training are behind Air Force students based on the Air Force’s requirement that incoming flight students have completed a minimum of 50.0 hours of pilot instruction, and have received a private pilot’s license prior to starting joint specialized undergraduate pilot training. The Navy has no requirement for a private pilot’s license, and only allows student pilots a maximum of 25.0 hours of Navy sponsored piloting time prior to starting flight training, regardless of whether the student will attend training with the Navy or the Air Force.  The only location which Navy students attend Air Force training is Vance Air Force Base (AFB) in Enid, Oklahoma. Re-locating to Vance AFB removes the students from any peer groups that were formed during their Navy Aviation Preflight Introduction (API), which occurs at Naval Air Station, Pensacola, Florida.


Cited by: 


Liquidity Provision in Informationally Fragmented Upstairs Markets

Dr. Orkunt Dalgic, State University of New York at New Paltz, NY



The ability of upstairs market makers to observe certain important characteristics of their customers is a distinguishing feature that contributes to the quality of execution, i.e. liquidity, provided by these markets. One such characteristic is a customer’s likelihood of trading, also termed “unexpressed demand” by Grossman (1992). However, the existence of switching costs can lead to investors using the upstairs market to limit their trading relationships to a small number of market makers, and upstairs market search costs can reduce the potential number of trade counterparties contacted during searches. Such costs would cause at least some of the information about upstairs market investors’ trading likelihoods to remain privately known by individual market makers. This paper develops a general framework where information about investors’ trading likelihoods is split into private and public components. An increase (decrease) in the proportion of private information reduces (improves) upstairs market execution quality relative to Grossman's (1992) model, and relative to the downstairs market. Moreover, when the proportion of private information is larger, an increase in the competitiveness of upstairs market making may lead to a greater reduction in upstairs market liquidity.  Key words: brokers, dealers, brokerage firms, upstairs markets, liquidity, unexpressed demand, trading preferences, business relationships, market fragmentation.


Cited by: 


Team Effectiveness and Leader-Follower Agreement: An Empirical Study

Dr. Susan D. Baker, Morgan State University, Baltimore, MD

Dr. Daniel A. Gerlowski, University of Baltimore, Baltimore, MD



The role of teams in organizations has become a dominant theme in theoretical, applied, and empirical research.   This paper is grounded in the literatures of leadership, followership, and team effectiveness.  It builds on the work of Sundstrom, McIntyre, Halfhill, and Richards (2000), which called attention to the role of team composition in determining team effectiveness in the workplace.  Our research attempts to determine whether leader-follower agreement about leader and follower characteristics effects team effectiveness.  The role of teams in organizations has become a dominant theme in theoretical, applied, and empirical research.   Further, team abilities and skills represents an area that has reached into most business program curricula as well as becoming a standard skill set required in many occupations at multiple levels.  A related literature focusing on leadership developed over time, and more recently, this literature has been extended to include research on followership. This paper is grounded in the team, leadership, and followership literatures.   It extends the work of Sundstrom, McIntyre, Halfhill, and Richards (2000), which called attention to the relationship between team composition and team effectiveness, into issues addressed in the leadership and followership literatures.   Our empirical analysis concerns team effectiveness as a function of team homo- or heterogeneity along leadership and followership dimensions controlling for socio-demographic differences among team members.   Our work relies on survey data from six sites of healthcare organizations in the mid-Atlantic region, drawn in the fourth quarter of 2005. 


Cited by:  53


Improving IT Service Delivery Quality: A Case Investigation

Dr. Jihong Zeng, New York Institute of Technology, Old Westbury, NY



In the e-commerce environment, business has increasing dependency on information technology (IT) to deliver services to customers. IT service availability has dramatic influence on customer satisfaction and corporate reputation of the enterprise. Consequently, the demand for 24 x 7 service availability is greater than ever. Information systems which provide information infrastructure for business applications have become a critical and integral component for business service delivery. System downtime means lost of revenue and competitive advantage for the business. The business requires IT service providers and information system managers to ensure that service-affecting incidents do not occur, or that efficient and effective remediation must be taken to provide high-availability services. A lot efforts and improvement have been made to ensure high-availability in each individual technology industry. However, not enough focus has been given on how to improve the overall end-to-end IT service availability from end-user’s perspective. Without visibility into the overall availability of underlying components including information systems, applications and operational processes, it is impossible to make informed business decisions about IT resources. This paper introduces ITIL availability management concept and presents how to apply ITIL best practices to decompose service delivery into components or subsystems. Block diagram modeling technique is deployed to assess the overall service availability. This holistic approach helps pinpoint the bottlenecks to the required service level. It also demonstrates the capability to help provide cost-effective solutions to improve service delivery for existing as well as future application and infrastructure design and implementation in a highly competitive e-business environment.


Cited by:  10


Relationship Between the Use of Internet Information for Health Purposes and Medical Resource

Consumption for an English-Speaking Sample

Dr. Hager Khechine, Laval University, Canada

Dr. Daniel Pascot, Laval University, Canada

Dr. Pierre Prémont, Laval University, Canada



Many researchers in the fields of information systems and medical sciences are showing special interest on Internet use for health-related matters because the Internet is becoming an important source of information for patients and clinicians. Indeed, statistics reveal that almost 113 million U.S. citizens looked for health information on the Internet in 2006. The purpose of this research is to study the relationship between the use of Internet information by English-speaking patients and their consumption of medical resources. We perform a quantitative study based on a ten-item questionnaire. The sample is made of 120 patients suffering from a long-term disease and accustomed to the use of the Internet for health-related issues. Construct validity and reliability were ensured. Most items have loadings greater than 0.5. The path coefficient between the variables is significant and high. We conclude that the use of health information by patients is contributing to increase their healthcare resource consumption. This result can be explained by the fact that patients may misunderstand, be overwhelmed, or be confused by the poor quality of the information obtained from the Internet. We expect this study to have a theoretical and practical impact on the fields of management information systems and medical sciences. Indeed, we believe researchers should be concerned about the role that Internet information can play in the management of medical systems and about the design of health-related Websites.  During the last decade, the number of scientific meetings and studies about the use of online health-related information by patients has dramatically increased.


Cited by: 


Entropy in a Social Science Context

Dr. Joseph L. Moore, Arkansas Tech University, Russellville, AR



The paper will give an overview of the Second Law of Thermodynamics, entropy, and relative entropy.  There will be a listing of areas where the latter two concepts are being employed today. The principle discussion will be in terms of the social sciences. The author will give brief examples drawn from prior research in economics.  However, the emphasis will be on the research technique employed. The hope is that others will be motivated to try the technique in their endeavors. Entropy is a concept that is drawn from physics. In recent years, the notion has been applied to other areas, including most of the social sciences. Starting about 25 to 30 years ago, some economic research was done to employ this concept. Since that time, there has been a smattering of articles in economics. Nevertheless, in the opinion of the current author, the concept is not well understood. This paper has two purposes: (1) to educate more people on the concept, as applied in the social sciences (2) to question an interpretation of the concept as employed in another piece of research, done by a different author. In equilibrium, energy tends to flow spontaneously from being concentrated to becoming spread out. The word tends implies that the energy can remain concentrated for long periods of time. The second law says nothing about when or how much. The word spontaneously means that only the energy in the closed system is available; outside energy can impact the operation of the second law. In other words, equilibrium corresponds to a disordered distribution of the sets.


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Emergence of Customer-Centric Branding: From Boardroom Leadership to Self-Broadcasting

Dr. Mohammed M. Nadeem, National University, San Jose, CA



With increased global competition, it has become essential for leaders in every industry sector, from commodities to consumers packaged goods, to understand the new and emerging theory and practice of customer service for successful deployment of brands. The brand has become a strategic business concern for every senior corporate executive and board member. This research explores how a customer-centric approach makes a brand not only stronger but also on a path to profitability. This research mainly examines how successful boardroom leadership connects the customer to the brand through its motivated associates and all of its stakeholders. The purpose of this study is to demonstrate how emerging self-broadcasting customers become devotees of a brand by experiencing it on a deeply emotional level over time, and cementing their loyalty to the products and services of their choice. The final sections discuss the limitations of the exploratory study by providing conclusions, and ideas for future research for branding effectiveness. Companies involved in brand creation or transformation should pay as much attention to their internal reality as they do to their customers. The goal should be maximum relevance and alignment with the employee audience. As consumers spend more time controlling, uploading, downloading, filming, recording, and sharing their own personal experiences with products, services, and brands, marketers are expected to figure out to be relevant and credible. Brands are also expected to embrace the consumer’s desire to create, control, and share and empower them with simple creation tools that allow them to self-express over, and over and over. (Broddy, 2006).  People buy products, but they choose brands.


Cited by:  15


Downsizing, Corporate Survivors, and Employability-Related Issues: A European Case Study

Dr. Franco Gandolfi, Regent University, Virginia Beach, VA

and Central Queensland University, Rockhampton, Australia



This research article examines the accounts of survivors of reorganization and downsizing processes of a large car manufacturer in Europe. It looks at how corporate downsizing survivors adjusted to meet the new reality and dynamics of the corporation and how individuals developed new skills and competencies for their new roles and responsibilities within the reorganized firm. The study also reflects upon issues relating to the motivation and attitudes towards employability and learning aspects of individuals. The research highlights the onus upon individuals to take responsibility for their own training and development needs and to initiate learning opportunities. The advancement of self-development skills was shown to be of particular importance in transforming a corporation successfully. The occurrences of major organizational change, including restructuring and downsizing, represent some of the most profound (Gandolfi, 2006) and problematic issues facing modern-day corporations, non-profit organizations, governmental agencies, and global workforces (Carbery & Garavan, 2005). Corporate restructuring, or simply ‘restructuring’, is a relatively broad concept. Black and Edwards (2000), for instance, define restructuring as a major change in the composition of a firm’s assets combined with a major change in its organizational direction and strategy. The change management literature distinguishes between various types of restructuring. Heugens and Schenk (2004) present three forms of corporate restructuring, namely portfolio, financial, and organizational restructuring. This research paper is concerned mainly with organizational restructuring which is defined as a dimension with significant changes in the structural properties of an organizational entity (Carbery & Garavan, 2005).


Cited by:  13


The Move Towards Convergence of Accounting Standards World Wide

Dr. Consolacion L. Fajardo, National University, CA



This paper will discuss the theoretical bases for the move towards convergence of international accounting standards. It will look into the efforts of the U.S. Financial Accounting Standards Board, the International Accounting Standards Board, and the European standards setters to achieve the convergence of accounting standards world wide.  The benefits and the problems accompanying implementation will be addressed. The expectations is that establishing a common standards of accounting internationally will be beneficial to users and preparers by improving consistency, comparability, reliability, and greater transparency of financial information reported by companies around the world.  As a consequence, it is expected to increase cross-border investments, deepen international capital markets, and reduce costs of multinational companies who must currently report under multiple national accounting standards. Many corporations are multinationals having business operations in different countries around the globe.  However, the problem is that accounting standards differ from country to country due to differences in the legal system, levels of inflation, culture, degrees of sophistication and use of capital markets, and political and economic ties with other countries (Spiceland et al, 2007).  These differences cause huge problems for multinational companies.  Companies doing business in other countries experience difficulties in complying with multiple sets of accounting standards to convert financial statements that are reconciled to the GAAP of the countries they are dealing with. 


Cited by:  19


Human Resource Management and Strategy in the Lebanese Banking sector: Is there a fit?

Dr. Fida Afiouni, American University of Beirut, Beirut



This article investigates the nature of Human Resource Management (HRM) practices applied in the Lebanese banking sector, examines the strategic nature of the HRM function, and sheds light on current problems that hold the human resource department back from properly implementing its practices. The case study method has been applied on 10 banks in Lebanon from different sizes and nationalities with the resource-based view (RBV) as a main theoretical framework. The dominant findings indicate that, out of the 10 banks studied, seven banks have in place HRM practices that are not aligned with the bank’s strategy. In those banks, the absence of top management’s support, the lack of cooperation of line management, and the low credibility of the HR function hinder the proper implementation of HR practices and keep the HR department from playing a strategic role. The role of the HR department in many organizations is at a crossroads. On one hand, the HRM function is in crisis, increasingly under fire to justify itself (Schuler, 1990). On the other hand, organizations have an unprecedented opportunity to refocus their HRM systems as strategic assets.  Many scholars (Huselid, 1995; Huselid & Becker, 1996; Huselid, Jackson, & Schuler, 1997) agree that a strategic approach to human resource management requires the development of consistent human resource management practices that ensure that the firm’s human resources will help achieve a firm’s objectives. This strategic approach to human resource management requires top managers’ awareness that a firm’s performance can be affected by human resource management practices. Some empirical studies support this statement (Arthur 1994; Huselid, 1995; Huselid & Becker, 1996).  While these studies have been useful for demonstrating the impact of strategic human resource management on a firm’s performance, they have revealed very little regarding the proper implementation of those practices.


Cited by:  19


Social Structure Characteristics and Psychological Empowerment: Exploring the Effect of Openness Personality

Dr. Sarminah Samad, Universiti Teknologi MARA Shah Alam Malaysia



The purpose of this paper is to determine the influence of social structure characteristics on employees’ psychological empowerment and whether openness personality plays a role in moderating the above stated relationship among Customer Marketing Executives of a telecommunication firm in Malaysia. Hierarchical regression analyses of 482 responses in the study revealed that all aspects of social structure (self-esteem, power distribution, information sharing, knowledge, rewards, transformational leadership and organizational culture) are important in determining employees’ psychological empowerment. Further, openness personality variable was found to be a moderator to the relationship between social structure characteristics and employees’ psychological empowerment. Theoretical and managerial implications of the findings and future research are discussed. Increased global competition, the advent of technological innovation, globalization and changes in both workforce and customer demographics have given rise for organizations to be more efficient and productive. Consequently, to maintain a competitive edge in the service industries, considerable emphasis has been placed on providing quality services for customers. This is no exception in Malaysian telecommunication industry. Therefore Customer Marketing Executives in this sector are considered as front-line employees that provide the face to face service for the organization. Front-line employees according to Daniel et al. (1996) have direct, influential customer contact that could influence customer’s perception on service quality. Conduit & Mavondo (2001) suggested that motivation of front-line employees in a service company is crucial to the service delivery process. Literature have documented that the positive attitude and behaviors of employees have been found to be related with the experience of service by customers (Chebat & Kollias, 2000).


Cited by:  22


The Impact of the Asian Tsunami Attacks on Tourism-Related Industry Stock Returns

Dr. Chih-Jen Huang, Providence University

Dr. Shu-Hsun Ho, Providence University

Chieh-Yuan Wu, Providence University



The Indian Ocean experienced a devastating tsunami in Asia on the morning of 26 December 2004. This study utilizes a market-adjusted returns model of event study to analyze abnormal stock returns in Thailand’s tourism industry. The study differs from previous studies of market reactions to unanticipated events in terms of cross-country analysis. We investigate reactions of tourism-related industry stocks in the following markets after the Asian tsunami event: Taiwan, Hong Kong, New Zealand and Australia, from June 2004 to March 2005. In addition, this research compares differences of the abnormal returns in tourism and leisure, transportation and logistics, insurance, construction materials and construction development industries in Thailand from June 2004 to March 2005. We examine the stock market reaction for 135 days prior and examine four days and 15 days following the Asian tsunami event.  Results of analysis show partial, significant negative stock abnormal returns for the tourism and leisure industry in Thailand. On the other hand, there are also partial significant positive stock returns in the construction development and construction materials industries after the tsunami occurred. There is no significance found for the tsunami’s critical influence on Taiwan, Hong Kong, New Zealand and Australia. The Indian Ocean experienced a devastating tsunami on the morning of 26 December 2004 that had significant impact across Asia; the fourth largest of the super strong shock of scale since the 20th century. The massive earthquake, which posted 9.0 on the Richter Scale caused serious destruction across fourteen countries.


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The Relationship between Leadership Behavior and Organizational Performance in Non-Profit Organizations,

Using Social Welfare Charity Foundations as an Example

Dr. Ruey-Gwo Chung, National Changhua University of Education, Taiwan

Chieh-Ling Lo, National Changhua University of Education, Taiwan



Although the main mission of an NPO is “not for profit,” it must still pay attention to effective management practices.  The current study took social welfare charity foundations as subjects and used a questionnaire to explore the effects of top managers’ leadership behavior on organizational performance.  We found that in all of the 77 valid samples, leadership behaviors in 10 social welfare charity foundations were “high transactional-low transformational,” 23 were “low transactional-low transformational,” 35 were “high transactional-high transformational,” and 9 were ”low transactional-high transformational.”  In addition, different leadership behaviors had obvious differences on internal communications and management and on finance structure.  From the perspective of full-time employees, top managers’ leadership behavior tends towards “low transactional-low transformational,” while the volunteers regard it as “high transactional-high transformational.” The recent trend in Taiwan towards a well-developed society and a high standard of living has forced the gradual appearance of the Non-Profit Organization (NPO).  Taiwan’s democratization and the proclamation of related laws and regulations have also enhanced the advances of NPOs.  Even so, compared with for-profit businesses which emphasize the necessity of innovation, efficiency and institutionalization for their survival, the lack of organized management could lead to trouble in many NPOs.  To solve these problems, efficient human resource management is a priority, since the ability of the NPO to provide services is related to the quality of its personnel.  NPOs employ both full-time employees and volunteers, who require different management approaches. 


Cited by:  61


The Virtual Student/Client Experience

Dr. Debra Hunter, Troy University



This paper discusses a study completed in an attempt to integrate service learning in an online classroom environment. A hybrid of service learning and internet based classes may introduce a new motivation to e-learning while applying knowledge in a real world setting. Instructors who teach in online environments will gain a better understanding of “best practices” for conducting internet courses with virtual clients. Academic service learning is a method of student learning through active participation in organized experiences that meet community needs (Perkins, 1994). Bringle and Hatcher (1996) defined service learning as “credit bearing educational experience” in which students “gain further understanding of course content, a broader appreciation of the discipline, and an enhanced sense of civic responsibility. Service learning requires the infusion of course assignments that give students the opportunity to apply knowledge and skills taught in the classroom to projects that benefit the community. These efforts are coordinated among course instructors, students, and representatives of community organizations in a collaborative effort to address issues that impact society. The origins of service learning evolved from core assumptions of a prominent educational philosopher and theorist, John Dewey. Dewey argued that philosophical orientations in educational institutions emphasize intellect over experience, passivity over activity, knowledge over vocation, work over play and individuals over community and collectivity (Kezar, Thods, 2001). Accordingly, these imbalances prevent the evolution for education in a democratic society.


Cited by:  20


A Critical Process for Methods Selection in Organizational Problem Solving

Chia-Hui Ho, Far East University, Taiwan



This paper aims to explore a critical process for evaluating management methods. This paper also aims to discuss, from a critical systems perspective, how world views (which necessarily have ideological aspects to them) will influence method-users to choose particular methods for organizations. Thus, a new process called Participative Method Evaluation (PME) is established. PME is founded on the idea that a person's understanding of a method is influenced by his/her social ideology. The basic concern of the evaluation of method needs to be how method-users and organizational/environmental stakeholders can examine their ideological differences through processes of critique in order to make more informed choices.  PME embraces three stages: Surfacing, Triangulation and Recommendation. Surfacing aims to expose and explore the various assumptions about, and views on, the candidate method and the organizational situation. Triangulation compares and contrasts the various perspectives, and if possible an accommodation of views is sought. Recommendation provides practical suggestions to stakeholders as to the likely effects of using the method being evaluated, and where appropriate highlights possible modifications and/or alternatives.  Human beings follow a pattern of behavior based on their knowledge. It is claimed that knowledge is necessarily derived from individual experience combined with social and cultural influences (e.g. Gregory, 1992), and this knowledge can be seen as a basis for the individual's value judgment. From Burrell and Morgan's (1979) point of view, individuals always hold a particular world view (a so-called 'paradigm'), according to which they perceive reality. This world view is derived from their learning experience and personal belief.


Cited by:  2


Are Real Estate and Stock Markets Related? The Evidence from Taiwan

Dr. Ning-Jun Zhang, Southwestern University of Finance and Economics (SWUFE), P.R. China

Dr. Lii Peirchyi, Tamkang University, Taiwan, Republic of China

Yi-Sung Huang, Southwestern University of Finance and Economics & Ling Tung University, Taiwan



This paper studies the long-run relationship between real estate and stock markets, using both standard cointegration tests of Johansen and Juselius (1990) and Engle-Granger (1987) and fractional cointegration test of Geweke and Porter-Hudak (1983), in the Taiwan context over the 1986Q3 to 2001Q4 period.  The results from both two kinds of cointegration tests indicate that these two markets are not cointegrated with each other.  In terms of risk diversification, two assets should have been included in the same portfolio. Knowing and testing the long-run relationship between real estate and stock markets are very important for portfolio investors who want to diversify in these two assets markets.  As we know that, if assets markets are found to have a long-run relationship then this would suggest that there may be little long-run gain in terms of risk reduction by holding such assets jointly in a portfolio.  Previous empirical studies have employed cointegration techniques to investigate whether there exist such long-run benefits from international equity diversification (see Kwan et al., 1995; Masih and Masih, 1997).  According to these studies, asset prices from two different efficient markets cannot be cointegrated.  Specifically, if a pair of asset price is cointegrated then one asset price can be forecast (is Granger-caused) by the other asset price.  Thus, these cointegration results suggest that there are no gains from portfolio diversification, in terms of risk reduction.  This study attempts to make some contributions to this line of research by exploring whether there exist any long-run benefits from asset diversification for investors who invest in Taiwan’s real estate and stock markets.  In this study, we test for cointegration using both standard cointegration tests of Johansen and Juselius (1990) and Engle-Granger (1987) and fractional cointegration test. 


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The Effect of Convertible Debt Issuance on Product Market Competition

Jie Yang, Huazhong University of Science and Technology, Wuhan, PRC

Dr. Xinping Xia, Huazhong University of Science and Technology, Wuhan, PRC



This paper investigates the effect of convertible debt issuance on Cournot game outcome. With the assumption of no default risk, compared with standard equity or debt financing, the conversion feature of convertible debt serves as a committing device for a conservative stance under the normal case of return, thus encourages an aggressive stance of its rival firm. This strategic disadvantage of convertible debt can explain the long-run underperformance after issuance. This paper investigates the effect of convertible debt issuance on strategic output market behavior. The relationship between firm’s financing policy and its strategy in product market has been recognized since the innovative study of Brander and Lewis (1986). They point out that the Cournot firms subject to some market uncertainty will use the limit effect of debt to commit to increase output in an attempt to gain a strategic advantage. The basic point is that shareholders will ignore reductions in returns in bankrupt states, since bondholders become the residual claimants in this states. After that, the research in this area has been a focus. Maksimovic (1988) extends Brander and Lewis' model of strategic effects of the limited liability of debt by considering multiple periods of interaction. Showalter (1995) analyses the optimal strategic debt choice in Bertrand (price) competition. Glazer (1994) distinguishes between short and long-term debt at the time of analyzing the relationship between capital structure and product markets. These work contributed to establish such a principle that firm’s financial decisions and product market strategy interacts. The previous studies, however, have restricted attention to a subset of the feasible instruments, such as the simple mix of debt and equity.


Cited by: 


Creating and Sustaining Competitive Advantages of Hospitality Industry

Hui-O Yang, Swinburne University of Technology, Melbourne, Australia

Dr. Hsin-Wei Fu, Leader University, Tainan, Tiawan



This study provides a meaningful framework for the assessment on competitive advantage.  The main purpose of this study is exploring how to create and sustain competitive advantages of hospitality industry by scanning their business environment, including external environment and internal environment.  External environment factors contain country, industry, stakeholder, competitor, strategic networks, differentiation, and branding.  Internal environment factors include resource-based, human resource, and information technology. Hospitality is the welcoming of strangers as guests into one's home to dine or lodge.  It provides both tangible and intangible goods to customers, such as products and services.  Adding values for customers, employees, and owners has become a central theme in strategic management for hospitality companies.  To create values for these stakeholders, a firm should achieve a competitive advantage over its competitors by adapting itself to the uncertain industry environment, understanding the changing needs of customers, and responding to new market entries (Byeong and Haemoon, 2004).  Achieving competitive advantage has been recognized as the single most important goal of a firm.  Without achieving competitive advantage, a firm will have few economic reasons for existing and finally will wither away (Porter, 1980).  It is generally accepted in the strategic management literature that those executives who are able to scan their business environment, including external environment and internal environment, more effectively will achieve greater success (Olsen, Murthy and Teare, 1994).  This success will come if they are able to match the threats and opportunities in that environment with appropriate strategies. 


Cited by:  29


Backward Integration and Risk Sharing in a Bilateral Monopoly: Further Investigation

Dr. Yao-Hsien Lee, Chung-Hua University, Taiwan

Yi-Lun Ho and Sheu-Chin Kung, Chung-Hua University, Taiwan

Tsung-Chieh Yang, Chung-Hua University, Taiwan



This paper investigates implications of the first-order conditions a la Lee et al. (2006) to show that the principal’s ordered quantity and profit-sharing ratio (i.e., backward integration) can affect the agent’s cost-reducing effort.  We also state the intuitions behind the propositions in the paper. A considerable agency-theoretic literature has developed recently that addresses procurement of goods and services as often being characterized by bargaining and contracting between the government (principal) and a single supplier (or several suppliers, i.e. agent(s)). Papers focusing on this theme (see Baron and Besanko (1987,1988), Laftont and Tirole (1986) and McAfee and McMillan (1986)) study the purchase of a particular good within the framework in which uncertainty, asymmetric information, and moral hazard are simultaneously present.  In the context of bilateral monopoly contracting practices with uncertainty and asymmetric information, Riordan (1984) establishes necessary and sufficient conditions for the existence of contracts that are efficient and incentive compatible. Most recently, Riordan (1990) shows that some backward integration by the risk-neutral principal (downstream firm) is optimal if it increases the risk-neutral agent's (upstream firm) production and that backward integration increases with the sunkeness of the agent's investment.  Although risk sharing, moral hazard, and asymmetric information have been studied extensively in the above models, there has been almost no investigation of the extent or precise nature of their effects on a bilateral monopoly that maintains a long-standing relationship, for instance, business partners.  Lee et al. (2006) extend Riordan's (1984) bilateral contracts model to include moral hazard and backward integration in a framework of long-term business partner structure of stable and mutual relationships among trading partners.  


Cited by: 


An Analysis of Contingent Contracting in Acquisitions

Dr. David R. Beard, University of Arkansas at Little Rock, Little Rock, AR



The literature has identified various motives for the use of earnout contracting in the acquisition of target firms.  In particular, Kohers and Ang (2000) and Datar, Frankel, and Wolfson (2001) contend that earnouts are relegated to mergers where problems of informational asymmetry and agency are so detrimental that this costly type of contacting must be employed to protect the interest of bidder shareholders and target firms.  This research examines a sample of acquisitions in which earnouts are used and contrasts that to a sample of “traditional” acquisitions to explore specific hypotheses concerning agency, informational asymmetry, and the use of an earnout as a means of financing. Numerous contracting technologies have evolved to reduce some of the problems inherent in merger transactions.  For example, each party has incentives to propose a contract that overvalues itself and undervalues its opponent, thereby gaining a larger share of any benefits to the merger.  Another possible problem is that informational asymmetries between the two parties may be such that a quality target may not be identified or if identified may not be able to credibly reveal its value to the bidding firm.  Among the contracting solutions to these conflicts are the joint venture, the partial acquisition, and the earnout.  The third technique mentioned, an earnout, mitigates informational asymmetries by shifting some of the risk of misvaluation to the target firm. 


Cited by: 


Capital Structure in Taiwan’s High Tech Dot Companies

Dr. Hsiao-Tien Pao, National Chiao Tung University, Taiwan, ROC



This study investigates the important determinants of capital structures of the high tech dot companies in Taiwan using a large panel from the year 2000-2005. Three time-series cross-sectional regression models (variance-component model, first-order autoregressive model, and variance-component moving average model) and one multiple regression model  with 10 independent variables (seven corporation’s factors and three macro-economic factors) are employed. The variance-component model has the smallest root mean square error. This indicates that the time-series and cross-sectional variations in firm leverage are very important factors in model fitting. The major difference of determinant in high tech dot companies is business risk. It has positive and significant impact on capital structure. Because high tech is the more speculative industry, more speculation is associated with high risk and high investment opportunity. Firms with higher investment opportunity have higher demand for capital to sustain their investment. Therefore, business risk is positively related to debt ratio. Managers can apply these results for their dynamic adjustment of capital structure in achieving optimality and maximizing firm’s value. Regarding the qualitative aspects of capital formation within the high tech dot companies of the 90s, we find that beginning about 1995 a mob mentality set in within the investment community. Essentially, no rational reason could be quantified for the ability of the dot coms to attract large amounts of investment capital. That is, on the surface, there seemed to be an irrational behavior within the investment community.


Cited by:  7


“Using Consumer Panel Participants to Generate Creative New Product Ideas”

Jenny Clark, TNS

Clive Nancarrow, University of the West of England, UK

Dr. Lex Higgins, Murray State University, Murray, Kentucky



Organizations continue to attempt to identify new products and product features that will provide competitive advantage.  Globalization and technology development continues and many companies struggle to keep up with this rapid rate of change.  Creativity is often cited as a prerequisite to organizational success and management of most organizations realizes the present environment is one of ‘innovate or die.’  One’s cognitive style or ‘creativity’ style has been used many times as a tool to help categorize and better understand creative thinking.   We report the use of creativity style in a large consumer panel in Europe to generate new creative ideas.  Participating panel members tended to adopt one of four cognitive styles when assigned creative problem solving tasks.  We report a description of these cognitive styles and describe a categorization of the styles we identified in panel participants. Virtually everyone agrees that organizations must continually improve products and services to compete in today’s dynamic business environment.  Brook and Mills (2003) have pointed out that successful innovation within the organization requires an “aggressive and relentless thrust” toward new ideas for products and services.  However, the manner in which organizations can systematically envision and develop ideas for new products is often not clear.   It is well established that ideas for new products or services that appear within organizations are often ignored or unintentionally suppressed by organizational culture.  In fact, many writers on creativity offer lists of ways that managers intentionally or unintentionally stifle creativity.  One such list can be found in Couger (1995) and is surely familiar to anyone who has tried to introduce a new idea within an organization.  Thus for every new idea offered up, there is a reasonable sounding argument against its implementation.  Why do organizations seem to discourage new ideas when often requesting more employee creativity? 


Cited by:  3


The Two-stage Optimal Matching Loan Quality Model

Chuan-Chuan Ko, National Chiao Tung University, Taiwan

Dr. Tyrone T. Lin, National Dong Hwa University, Taiwan

Chien-Ku Liu, Jin-wen University of Science & Technology, Taiwan

Hui-Ling Chang, Ming Chuan University, Taiwan



This study attempts to optimize the loan quality requirement objective of the depositor, financial institution and investment agent in a two-stage loan market. Assuming that the financial institution may completely or partially fail to discharge his/her responsibility for liability in which a loan claim occurs following each stage, mathematical analysis is employed to identify the threshold of required loan quality and optimize the allocation of loan amounts in this two-stage loan market. This study defines the financial institution as the enterprise that is heavily reliant on manipulating financial leverage via minimum capital investment, and whose operating profit mainly derives from the interest spread of making loans with deposit volume; meanwhile, the depositor makes all deposits to obtain a steady stream of interest income. However, because of different lending criteria between the financial institution and the depositor, they have conflicting interests with each other. The financial institution wishes to increase loan credit, but loan volume is actually the balance held by the depositor. Therefore, the depositor asks the financial institution to rise up the loan credit to better guarantee his/her deposit. Furthermore, the securitization of financial assets has also provided the investor with an alternative financial commodity. The manner in which the financial institution re-packages and offers this financial asset securitization and the manner in which the investor purchases this commodity will also generate different perspectives regarding the loan quality of assets securitization subsequently represented by the investment agent among the financial institution, the depositor, and the investor. Lockwood et al. (1996) found that when enterprises begin asset securitization, the wealth of automobile manufacturers is increased after securitization, whereas the wealth of banks is decreased, and the financial institution should improve its capital structure before securitization and promote its financial health.


Study on the Motives of Tax Avoidance and the Coping Strategies in the Transfer

Pricing of Transnational Corporations

Chen-Kuo Lee, Ling Tung University, Taiwan

Wen-Wen Chuang, Ling Tung University, Taiwan



As globalized production and management groups, transnational corporations tended to adopt related-party transactions (like transfer pricing) to reduce the overall tax burden, evade risks, and bypass control with tax avoidance as the main objective. Corporations could reduce the tax burden through related-party transactions, such as transfer pricing. Therefore, this paper conducted analyses by establishing a transfer-pricing model and verifying, with cases, the motives of tax avoidance in the transfer pricing of transnational corporations. Finally, we presented the coping strategies of tax avoidance in the transfer pricing of transnational corporations. After World War II, along with the unprecedented rapid development of business activities, the international trade of transnational corporations was increasingly highlighted in the global trading market (Clausing, 2001, 2003). Moreover, plenty of international trade occurred among the inner member companies of transnational corporations (i.e. the related parties). The data of UNCTAD in 2001 showed that until then, international trade of transnational corporations occupied more than 70% of the world trade; about one-third of the world trade took place among transnational corporations and about 80% technology transfer fees were paid to the same companies. With the large scale, and the unique ways and features, the inner trade of transnational corporations was influencing the host country, the home country and the world economy (UNCTAD, 2001). Thus, the international community was paying close attention. Some countries strengthened the management of transnational corporations and their inner trade, based on relevant regulations and policies in the framework of WTO multilateral trade systems and its regional economic organization (Barry, 2004, 2005).


Cited by:  4


Target Costing: A Snapshot with the Granger Causality Test

Dr. Fernando Zanella, United Arab Emirates University, Al Ain, UAE



The target costing strategy takes the market price of a product and goes all way back to the initial costs of its production to achieve the desired profit margin. It lies in sharp contrast with the traditional cost-plus margin. In this article we use the Granger causality test to identify the price-cost directional vector. Most of the Brazilian firms we analyzed did not show an identifiable pattern between price and cost. Target costing is shown in 15% of the total firms studied, and in 37.5% of the electric and utilities sector. There are two main reasons supported here. First, the sector works with a single homogeneous product. Second, it is a regulated sector; once its price is set by the regulatory agency, they can work backwards to reduce costs and achieve certain profit margins. The test used here proves complementary to more common surveys and case studies. Target costing can be briefly defined as a strategy that takes the market price of a established product—or the estimated price of a would-be product—and uses it as a parameter that will define the feasible cost for a desired profit margin. It is meant to be used during the design and planning phases, i.e., prior to the manufacturing phase. Target costing has several interdependent dimensions that can be explored separately or simultaneously. The two main ones are: a) Target costing adoption. Target costing adoption, or lack of it, is indicative of the firm’s competitive strategy within the industry. During a target costing process, the vector runs from price to cost. This is the opposite of another very common price strategy, the cost-plus, in which the vector runs from cost to price. During the cost-plus process, a firm adds the desirable profit margin on top of the manufacturing cost. If the market doesn’t accept the final price, the firm might shrink its profit margin, try to re-do the manufacturing to cut costs or—depending on the re-manufacturing feasibility—fix and sunk costs, just stop producing the product or shut down operations. b) Institutional environment. The number of firms adopting target costing (or not) is an indicator of the institutional environment of the country.


Cited by:  4


Teaching Tip: Structuring a Rubric for Online Course Discussions to Assess Both

Traditional and Non-Traditional Students

Dr. Ruth Lapsley, Central Washington University, Ellensburg, WA

Dr. Rex Moody, Central Washington University, Ellensburg, WA



Online courses have become increasingly popular.  Students, particularly non-traditional, appreciate online courses because of the flexibility, including learning outside the normal classroom schedule constraints.  This paper discusses how a rubric for an online course was developed to capitalize on the motivated learning style of these non-traditional students.  When the same rubric was used for traditional students taking the class, the assessment did not adequately discriminate among different levels of effort, so modifications were made to the rubric.  It was subsequently used on both traditional and non-traditional students and provided an adequate assessment for both types of learners. Non-traditional students, in particular, appreciate the flexibility of online courses that provide learning outside the normal classroom schedule constraints.  Non-traditional students are usually older, have job and family responsibilities, and prefer flexible curricula that allow them to use their computers and technology to enhance their learning skills (Nellen, 2003; Wooten, 1998; Wynd & Bozman, 1996).  In addition, they tend to be more motivated and produce higher-quality work than traditional students (Nellen, 2003; Wooten, 1998).  This paper discusses how an assessment rubric for an online course was developed to capitalize on the motivated learning style of these non-traditional students, while still being useful for traditional students as well.  Online course developers frequently concentrate on the technological issues surrounding the delivery method instead of the learning objectives and assessment tools (Su, 2005).  In developing an online course, the learning objectives should be the primary guiding factor.  Students in online courses must be able to easily understand the learning objectives, as they are more critical than the medium by which they are delivered (Su, 2005).  In the traditional classroom, the course expectations are spelled out in the syllabus and the instructor typically explains them to students, often times adding more detail throughout the term of the course.  Additionally, with an online course, students do not have ready access to the instructor and must rely more on what is available online to guide their learning. 


Cited by:  14


The Exchange Rate Exposure of Chinese and Taiwanese Multinational Corporations

Luke Lin, National Sun Yat-sen University, Taiwan

Dr. David So-De Shyu, National Sun Yat-sen University, Taiwan

Dr. Chau-Jung Kuo, National Sun Yat-sen University, Taiwan



This paper studies the sensitivity of the cash flows generated by Chinese and Taiwanese firms to the movements in a trade-weighted exchange rate index, as well as to the currencies of their major trading partners. To overcome the deficiencies in previous researches using variations of the market-based model, this paper adopts the polynomial distributed lag (PDL) model to investigate the relative importance of transaction exposure versus economic exposure by decomposing exchange risk into short-term and long-term components. In contrast to the existing market-based model, we find that PDL model is better in detecting exposures. Furthermore, our empirical results also indicate that a considerable exposure difference between Chinese and Taiwanese corporations under two types of exchange rate regimes.   With China’s entry into WTO, more and more Chinese firms participate in international business, and their understanding of the exchange rate exposure of their business becomes more important. Meanwhile, now most Taiwanese firms investing in China desire to use cheaper input factors and sell manufactured goods back to Taiwan’s trading partners. Such an investment decision has been establishing a close link between the two markets. While China and Taiwan markets are inseparable, exchange rate systems in the two markets are very different. For example, China has officially maintained the pegging regime since 1994 and Taiwan now follows a floating exchange rate policy (Schena, 2005).


Cited by: 


Investment Under Uncertainty with Stochastic Interest Rates

Dr. Cherng-Shiang Chang, FRM, China University of Technology, Taipei, Taiwan



In recent years, the real options analysis developed to cope with an uncertain future is already having a substantial influence on corporate practice due to its offering new insights into corporate finance and strategy (Smit and Trigeorgis, 2004).  For the application of options pricing theory, unlike the works on the financial derivatives areas, most studies on the corporate finance and investment problems assume the underlying dynamics follow a geometric Brownian motion and the discount rates of the expected cash flows constant in order to obtain a closed-form solution.  In the real world context, however, the dynamics of the underlying usually track a product-specific lifecycle, in contrast to the one increasing versus time characterized by the geometric Brownian motion.  Further, it is obvious that the discount rates or the risk-free interest rates are not constant as well.  In this article, we relax the restrictions by employing the Ornstein-Uhlenbeck process for the underlying to meet the real product specific lifecycle.  Second, we setup the classical Vasicek (1977) model to describe the interest rate dynamics.  The derived partial differential equations (PDEs) are so complicated that a novel finite difference method is then selected and implemented to solve the problem numerically. Project valuation using real options has been a subject of much research during the last 15 years (Ingersoll and Ross, 1992, Dixit and Pindyck, 1994).  The real options analysis developed to cope with an uncertain future is already having a substantial influence on corporate practice due to its offering new insights into corporate finance and strategy (Smit and Trigeorgis, 2004).  Grenadier and Weiss (1997) develop a model of the optimal investment strategy for a firm confronted with a sequence of technological innovations. 


Cited by: 


A Research Study of Frederick Herzberg’s Motivator-Hygiene Theory on Continuing

Education Participants in Taiwan

Dr. Ching-wen Cheng, National Pingtung University of Education, Taiwan



This study seeks to determine the factors motivating on-campus continuing education participants in Taiwan using Frederick Herzberg’s motivator-hygiene theory. Herzberg’s motivator-hygiene theory, also referred to as the two-factor theory, is commonly used in the academic area of organization management (Jones, George, & Hill, 2000). Due to costs involved and the study’s limitations, the research sample of the present study included students enrolled in the “2006 Human Capital Investment Plan” continuing education program at National Pingtung University of Education, a government plan that tries to improve Taiwanese laborers’ career competency by cooperating with higher education institutions (Bureau of Employment and Vocational Training, 2006). National Pingtung University of Education is a public education institution located in southern Taiwan offering bachelor, master, and doctoral programs. The purpose of this study is to construct a management opinion on adult learning motivation and provide the students’ motivators to the program administrators. The research determined that the major motivators of adult students’ participation are personal-advantage creation, personal-need recognition, learning enjoyment, program schedule, institution’s reputation, personal growth, and demand in the new economics. Furthermore, this study also discovered that information about hygiene needs included in organizational policy, new friends, relationships with subordinates, peer pressure, and workplace management authority also to be significant. Based on the research data analysis, no significant difference exists between male and female adult students’ motivation for learning. Finally, this study found no significant difference in motivation among adult students of different age groups.


Cited by:  19


Tax Burden Convergence in EU Countries: A Time Series Analysis

Dr. Tiia Püss, Tallinn University of Technology, Tallinn, Estonia

Mare Viies, Tallinn University of Technology, Tallinn, Estonia



Taxes are an important fiscal policy instrument and the main source of revenue for any country, which are used to regulate and influence economic and social development in the country. The EU has harmonized standards and regulations in numerous areas; however, there has been a lower degree of harmonization in taxation. Significant measures towards the harmonization have been raised strategically in the EU agenda. The aim of this paper is to analyze and compare the trends of the tax burdens in the European Union countries and test for convergence in taxation using the time series approach. We use harmonized data on the tax revenue and tax burden in the European Union countries collected by OECD and Eurostat in the period 1970-2004. The issues of economic convergence have been in the focus of interest of many theoretical and empirical studies over the last two decades. Many concepts of convergence and different econometric methods for empirical analysis have been proposed. There are two main trends in the methodological approach: the cross-sectional data approach is based on the neoclassical growth model and studies convergence between countries or regions through relationships between the initial economic level and average growth (b-convergence); the time-series approach discusses convergence as a stochastic process and uses mainly unit root or cointegration tests in empirical analysis.  In an open economy tax policy of one country may affect economic activity and public revenue in another country.


Cited by: 


Synergy in Business: Some New Suggestions

Dr. Vojko Potocan, University of Maribor, Maribor, Slovenia

Bostjan Kuralt, University of Maribor, Maribor, Slovenia



In the global competitive environment, enterprises can only survive (in the long term) by permanently improving their business. They have limited resources and they face very harsh conditions, therefore they can (significantly) improve their business results, if they organize their working better, e.g. by implementing potential/possible synergies. The concept of synergetic working is based (also, or even primarily) on the application of the process approach and of the (dialectically) systemic understanding of the enterprise as a business system (BS). Synergetic working enables BSs to attain the best overall results by harmonizing activities of all BSs' parts and considering the needs (and requirements) of the BSs' environments. This contribution deals with two theses: 1) Synergy is encountered and studied in various sciences; it is equally important in business sciences; 2) The process approach and (dialectically) systemic consideration enables us to define synergy in BS requisitely holistically (in terms of both contents and mathematics) and to use it for further consideration of BSs in business sciences. The new global market pressure makes it increasingly difficult for enterprises to compete rationally efficiently and effectively, respectably (reasonably from their business behavior image aspect), ethically (morally appropriate and responsible attitude in harmony with their social and natural environment) and innovatively (novel service / products, and production systems and gaining additional benefits from these).  Important characteristics of many successful enterprises include using the process approach and systems understanding.


Cited by: 


Cross Analysis on the Contents of Children’s Television Commercials in the United States and Taiwan

Yi Hsu, National Formosa University, Taiwan

Liwei Hsu, National Kaohsiung Hospitality College, Taiwan



The influence of television programs toward children cannot be overlooked, TV commercials included.  This study is designed to examine the factors that are decisive for the marketing effects of children’s TV commercials.  The discussion about how the contents of Taiwanese children’s commercials differ from those of U.S. commercials and to explain reasons that cause these differences are the main themes of this research.  Six research hypotheses are tested and the results of the content analysis show that four of the six research hypotheses are accepted. The hypotheses on uncertainty avoidance and masculinity/femininity are not accepted by the statistical examination.  Television is a powerful socializing force for children, reaching them daily with extraordinarily high levels of exposure.  Children between six and fourteen years old watch approximately 25 hours of television weekly and view approximately 20,000 commercials annually (Moore et al., 2000).  In November 1999, the U.S. Kaiser Family Foundation published reports on children and teenagers exposure to television.  This investigation indicated that American children watched TV for an average of 2 hours and 46 minutes daily.  Since commercials represent around 20 percent of the content of children’s television, television advertising is a pervasive presence in the lives of most American children.  A similar situation exists in Taiwan.  An investigation by a Taiwanese advertising magazine on children in the 4 to 14 year old age group found that television watching was a major recreational activity among this age group in Taiwan.  Furthermore, an investigation by the Foundation of Broadcasting and Television reported that two thirds of Taiwanese children watch TV every day. 


Cited by:  6


The Technology Disruption Conundrum

Von Johnson, Woodbury University, Burbank, CA

Pierre Ollivier, Ecole Polytechnique, Paris, France



During the 20th Century, the filmed entertainment business evolved from a regional studio factory system into the global media and entertainment industry we know today.  Once controlled by a handful of powerful and creative entrepreneurs (the studio ‘moguls’), the seven major studios are owned today by multi-national corporations, transformed into finance, marketing and distribution entities, content owners and licensors, network operators, recording companies and producers, Internet portals, game producers and publishers.  Some companies are vertically integrated in many or all of these businesses (e.g., Walt Disney, Time Warner, Viacom, NBC-Universal and News Corp.) Although they may differ in scale and corporate culture, the common thread among them is an economic model that relies on the ability to control levels of presentation quality, and when, where and how consumers access entertainment content.  Traditional peripheral constituents supporting this supply model are the post-production and distribution service providers, and the systems/equipment suppliers that comprise the industry ‘ecosystem’ for content production, preparation and distribution.  This paper presents an argument that evolving media consumption habits are fueling technologies and innovations that threaten the ecosystem by disrupting the studio’s control and empowering consumers. 


Cited by: 


Improved Algorithms for Lexicographic Bottleneck Assignment Problems

Dr. Zehai Zhou, University of Houston-Downtown, Houston, TX



The lexicographic bottleneck problem is a variant of the bottleneck problem that is in turn a type of the traditional cost (or profit) minimizing (or maximizing) assignment problems. In this paper, the author presents two polynomial algorithms for the lexicographic bottleneck problem. The suggested algorithms solve the lexicographic assignment problem with 2n nodes by scaling and/or sequentially solving a set of classical assignment problems and both algorithms run in O( n5 ). These algorithms improve the previous ones, devised by R.E. Burkhard and F. Rendl [3], by a factor of log n. In the special case where all the cost coefficients are distinct, an algorithm with run time O( n3.5 log n ) is presented. A numerical example is also included in the paper for the illustration purpose. The cost (or profit) minimizing (or maximizing) assignment problem has been extensively treated in the literature and many polynomial algorithms have been devised to solve it [1, 8]. Several variations of the classical profit (cost) maximizing (minimizing) assignment problem have also been analyzed by researchers and efficient algorithms are readily available. For instance, Garfikel [4], Ravindran and Ramaswany [10] studied bottleneck assignment problems, Martello et al. [7] discussed balanced assignment problems, Berman et al. [2] studied several different constrained bottleneck assignment problems, Seshan [11] discussed the generalized bottleneck assignment problems, Geetha and Nair [5] presented a polynomial algorithm to solve assignment problem with an additional ‘supervisory’ cost, and Hall and Vohra [6] discussed an on-line assignment problem with random effectiveness and cost information, etc.


Cited by: 


Do Employees Trust 360-Degree Performance Evaluations? (A research on the Turkish Banking Sector)

Dr. Harun Demirkaya, Kocaeli University, Kocaeli, Turkey



Recently performance evaluation has been emphasized and systematized in businesses because the strategic importance of human resources in creating a high-performance organization is well understood. However, this has led to arguments, since both the evaluated and the evaluator are humans. The 360-degree evaluation, which was designed to settle those arguments and to provide an objective evaluation, is now widespread in Turkey.  Trust is one of the determinants of the effectiveness of performance evaluation. It is even more crucial in the 360-degree performance evaluation because so many evaluators are involved. This study tests the degree to which the employees of a bank trust the 360-degree performance evaluation.  A business corporation is a socio-technical system in which many people of different abilities, dreams, and creative skills come together. Three types of behaviors are required to make the system work well. First, people must be convinced to join and remain in the organization. Second, employees must perform their job responsibilities reliably. Third, they must voluntarily dedicate their creative and innovative skills beyond any sense of duty (Werner, 2000:4). This third expectation is indispensable for organizations aspiring to high performance.  On the other hand, in these organizations, management becomes much more complex and multi-dimensional (Peterson, 2003:243). Performance evaluation provides input for almost all functions of HRM applications, and the system outputs are taken into consideration as objective data in decisions and applications.   Developed in the American army (Cadwell, 1995:23) and eventually spreading into businesses, a performance evaluation system evaluates employee performance as a sub-system of performance management (Milkovich and Boudreau: 1991:91). Measuring achievement and creating a high performance organization are crucial for businesses.


Cited by: 


Factors Influencing Sales Partner Control and Monitoring in Indirect Marketing

Dr. Roland Mattmüller, International University Schloss Reichartshausen, Germany

Dr. Ralph Tunder, International University Schloss Reichartshausen, Germany

Dr. Tobias Irion, International University Schloss Reichartshausen, Germany



When selling their products, manufacturers of consumer goods are heavily reliant on the support of their sales partners as they act as gatekeepers for the end customers and thereby determine the extent and quality of the goods available to the customer. In order to ensure the desired market presence of their products, manufacturers are increasingly creating institutionalised structures for the continuous monitoring and control of their sales partners. Using a survey of 130 managers in various consumer goods sectors in Germany, the following investigation will clarify and empirically substantiate what the fundamental parameters are that shape the control of a consumer goods manufacture’s sales partners, and which factors influence the intensity of sales partner control.  In contrast to intraorganisationally orientated organisational and sales management literature, there are only a few empirical studies relating to interorganisational sales partner monitoring.   So even today, Frazier for example, still has to be endorsed, who in a meta-analysis of the contributions to knowledge in the field of distribution research comes to the conclusion:  “Despite the importance of monitoring, to the best of my knowledge, Bello and Gilliland (1997) are the first to explicitly examine it in a major channel study. Clearly much more has to be done. What needs to be monitored across different channel relationships and contexts is an important question. Behaviors as well as performance outcomes will need attention in many cases.” (Frazier, 1999).


Cited by: 


Perceptions Affecting Employee Reactions to Change: Evidence from Privatization in Thailand

Dr. Chaiporn Vithessonthi, University of the Thai Chamber of Commerce, Bangkok, Thailand



The focus of the present study is to test whether perceived participation in decision-making process and perceived change in power influence employee reactions to change (i.e., resistance to change and support for change) in a sample of 197 employees at a large state-owned organization in Thailand in the context of planned privatization. Using multinomial ordered probit regression, the results provide some support for the proposed hypotheses. More specifically, the level of perceived participation in decision-making process is negatively associated with the level of resistance to change whereas the level of perceived increase in power resulting from the change is negatively associated with the level of resistance to change and positively associated with the level of support for change. During the past decade most state-owned enterprises in both developing and developed countries have come under increasing pressure to significantly improve their performance. In addressing this challenge, many state-owned enterprises have sought to go through a process of privatization, necessitating the implementation of organizational change. It has been argued that employee reactions to change, e.g., resistance to change and support for change, have critical implications for the outcomes of organizational change (Kotter, 1995). In a broader context, the attitudes and behaviors of employees have an impact on strategic implementation and firm performance (Becker, Huslid and Ulrich, 2001). A central research question in this context is: How can organizations minimize employee resistance to change and promote employee support for change? The aggregate result of a series of actions made by the firm in the change processes tends to cause employee resistance to change (e.g., Judson, 1991; Kotter, 1995).


Cited by:  23


A Study of the Relationship of the Perception of Organizational Conflicts and Organizational

Promises among Faculty and Staff Members in the Technical and Vocational Colleges

Hui-Chuan Tang, Far East University, Taiwan



Colleges under the pressure of educational revolution need to constantly do something within their inner organization to cope with the changes of the society. In the process of transformation, many organizational conflicts occur both in the instruction and administration units. The reasons of such conflicts may be positive or negative. The former is helpful to enhance the members’ promises to the organization. Therefore, the primary purpose of this study is to understand the perception of technical and vocational college faculty and staff members’ organizational conflicts and promises, their relationship, and differences. Subjects are college faculty and staff members from technical and vocational colleges in central and southern Taiwan. Totally 720 copies of questionnaires are sent out, with 462 copies returned, of which 51 copies are invalid. Therefore, the return rate is 64% with 411 valid copies. The collected questionnaires are analyzed through One-way ANOVA and Typical Correlation.  The findings in the study are:  1. Role duty conflict is perceived the most obviously, compare to the others when organizational conflicts are discussed. As for the organizational promises, promises to work hard get the highest value, compared with the value promises and position promises. 2. For those with different background variables, it is found that younger people, administration staff, and teachers with lower ranks perceive higher conflicts. It is also discovered that teachers with higher ranks, with director duties, and with age more than 40, will have higher loyalty to the organization. 3. The more conflicts are perceived by the members within an organization, the lower the position-stay promises will be for the organization; the higher perception of ideal organizational operation, the lower the effort promises and position-stay promises.


Cited by: 


Mass Customization Manufacturing (MCM): The Drivers and Concepts

Dr. Muammer Zerenler, Selçuk University, Konya, Turkey

Derya Ozilhan, Selçuk University, Konya, Turkey



Today’s business environment is characterized with extremely tight competition. Companies are forced to constantly reduce costs and outperform when pursuing efficiency. At the same time, companies are struggling to reach effectiveness to retain customer loyalty. Combining these two aspects is difficult at best and requires reasonable trade-off between variety, functionality, and price of the products and services. Mass customization relates to the ability to provide individually designed products and services to every customer through high process flexibility and integration. Mass customization has been identified as a competitive strategy by an increasing number of companies. This paper surveys the literature on mass customization manufacturing. Enablers to mass customization and their impact on the development of production systems are discussed in length. Approaches to implementing mass customization are compiled and classified.  Market and technology forces that affect today’s competitive environment are changing dramatically. Mass production of identical products—the business model for industry in the past—is no longer viable for many sectors. Market niches continue to narrow. Customer preferences shift overnight. Customers demand products with lower prices, higher quality and faster delivery, but they also want products customized to match their unique needs. To cope with these demands, companies are racing to embrace mass customization, “the development, production, marketing, and delivery of customized products and services on a mass basis,” according to a definition popularized by Joseph Pine, a leading spokesman for the concept. Mass customization means that customers can select order and receive a specially configured product, often choosing from among hundreds of product options, to meet their specific needs.


Cited by:  5


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