The American Academy of Business Journal

Vol.  3 * Num.. 1 & 2 * September 2003

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

Online Computer Library Center * OCLC: 805078765

National Library of Australia * NLA: 42709473

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The Relationship Between Organizational Climate and Organizational Culture

Dr. Adela J. McMurray, Swinburne University of Technology, Melbourne, Australia



This multi-method study explored the relationship between organizational climate and organizational culture in a newly emerging university. Organizational climate was explored through the distribution of a survey to 145 academic staff. An 88% response rate yielded 128 responses. To uncover the organizational culture, semi-structured interviews were conducted with the Deputy Vice-Chancellor, the Deputy Principal, 7 Deans, and 15 Centre Heads from the various faculties.  The study uncovered the ways in which organizational culture evolves and becomes intertwined with organizational climate. The data yielded new insights as to the ways in which organizational climate and culture intersect.  This has particular relevance at the sub-unit level where climate features are most positive in those faculties whose subcultures are congruent with the leadership culture, and are least positive in faculty subcultures that are incongruent with the leadership.  Organizational climate and culture have been important constructs in organizational theory for about thirty years (Moran and Volkwein, 1988; Schein, 1992) although relatively few researchers have chosen to study them concurrently, either conceptually (Moran and Volkwein, 1992) or empirically (Turnipseed, 1992).  Yet culture and climate research in the last ten years have enriched our understanding of organizational theory.  There is a good deal of conceptual blurring in the literature when it comes to key terms such as organizational culture and climate organizational (Falcione and Kaplan, 1984: 285; Jablin, 1980: Schein, 1990).  For example, belief systems, which are regarded as central to organizational climate, are ultimately derived from prevailing value systems and therefore, must somehow be associated with organizational culture.  Hence, the possibility of reciprocity between culture and climate was a key focus of this multi-method study which examined the extent to which organizational culture can be inferred from the behavioural features of an organization as manifested in the organizational climate. 


The Perceived Threats to the Security of Computerized Accounting Information Systems

Dr. Ahmad A. Abu-Musa, KFUPM, Saudi Arabia



The rapid change in computer technology, the wide spread of user-friendly systems and the great desire of organizations to acquire and implement up-to-date computerized systems and software have made computers much easier to use and enabled accounting tasks to be accomplished much faster and accurate than hitherto. On the other hand, this advanced technology has also created significant risks related to ensuring the security and integrity of computerized accounting information systems (CAIS). The technology, in many cases, has been developed faster than the advancement in control practices and has not been combined with similar development of the employees’ knowledge, skills, awareness, and compliance. In this paper, a general overview of the CAIS security threats will be presented, the different classifications of security threats will be outlined and causes of security violation will be briefly highlighted. Finally, the approaches and techniques of CAIS security abuse will be discussed in some details. The rapid change in computer technology, the wide spread of user-friendly systems and the great desire of organizations to acquire and implement up-to-date computerized systems and software have made computers much easier to use and enabled accounting tasks to be accomplished much faster and accurate than hitherto. On the other hand, this advanced technology has also created significant risks related to ensuring the security and integrity of the computerized accounting information systems (CAIS). The technology, in many cases, has been developed faster than the advancement in control practices and has not been combined with similar development of the employees’ knowledge, skills, awareness, and compliance. 


The High Tech Global Accounting Classroom in the 21st Century

Dr. Dhia D. AlHashim, California State University, Northridge, CA

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

Dr. Earl J. Weiss, California State University, Northridge, CA



The globalization of businesses, the increasing complexities of business transactions, and advances in information technology are facilitating electronic commerce with far reaching economic, social and political implications. They are also bringing new tools to carry out the missions of educational institutions. These high tech developments are placing a continual demand on colleges and universities to update their curriculum in order to maintain the relevance and usefulness of traditional accounting curricula and the integral standards imposed by both national and international accreditation agencies.  The objective of this paper is to investigate the progress being made to incorporate technology into the accounting curriculum. A historical review of the use of technology in the classroom illustrates how far we have come in such a relatively short period of time.  Up until the middle of the 20th century, technology for accounting instruction in the classroom consisted of chalk and talk.  The decades of the 1950s and 60s saw little change other than the rarely used flip chart on an easel and audio visual equipment such as movie, filmstrip, and opaque projectors.  During the 1970s, video tapes and overhead transparencies began to make their appearance in many classrooms. It was not until the late 1970s that technology, by today’s standard, began to surface in the form of microcomputers. Although microcomputers were still a long way from becoming a mainstay in the classroom and having any significant impact on pedagogy, the future of technology was now beginning to appear on the horizon. 


The Integration of Gender and Political Behavior into Hambrick and Mason's Upper Echelons Model of Organizations

Daun Anderson, Regent University, Virginia Beach, VA



A top management team’s (TMT) characteristics are determinants of the strategic choices that it makes, and these choices determine organizational performance.  This paper integrates gender and political behavior, as mediating and moderating variables, respectively, into Hambrick and Mason’s (1984) upper echelons model of organizations.   The author offers a new model that includes gender and political behavior, based on a literature review of the impact of these variables on decision making.  She posits that women’s leadership styles result in innovation and comprehensiveness in analyzing strategic alternatives.  She also posits that the amount of political behavior within a TMT moderates the effect of its members’ characteristics on the strategic choices that they make. Hambrick and Mason’s (1984) upper echelons model of organizations proposes that members at the upper echelons of an organization, who are also known as the top management team (TMT) (the author uses the terms interchangeably throughout this paper), formulate and implement strategic choices.  The underlying assumption of the model is that upper echelon characteristics, both psychological and observable/demographic, are determinants of these strategic choices, which, in turn, determine organizational performance.  This paper adds gender to the list of demographic mediating variables, and political behavior as a moderating variable, thereby creating a new model that more thoroughly depicts the determinants of organizational performance.  The basis for Hambrick and Mason’s (1984) seminal work on the upper echelons of organizations is the Carnegie School view that complex decisions are the result of behavioral factors, and that strategic decisions reflect the decision makers’ values and characteristics (Cyert and March, 1963; March and Simon, 1958). 


Are Leadership Styles Linked to Turnover Intention: An Examination in Mainland China?

Dr. Jovan Hsu, Tongji University, Shanghai, China

Dr. Jui-Chen Hsu, Chia Nan University of Pharmacy and Science, Tainan, Taiwan

Dr. Shaio Yan Huang, Providence University, Taichung, Taiwan

Dr. Leslie Leong, Central Connecticut State University, New Britain, CT

Dr. Alan M. Li, City University of Hong Kong, Kowloon, Hong Kong



This research investigates how leadership styles affect turnover intention based on 127 valid employee surveys from three major internet companies in Mainland China – the People’s Republic of China (PRC).  This study will be one of the few research, if any, that looks into the relationship between leadership styles and turnover in Mainland Chinese context.  Three different leadership styles – instrumental leadership, supportive leadership, and participative leadership were adopted from House and Dessler’s (1974) Path-Goal leadership model.  It was found that there was a significant negative relationship between leadership styles and turnover intention as well as a significant negative relationship between each component (instrumental leadership, supportive leadership, and participative leadership) and turnover intention.  It was also found that there were no significant differences between technical employees and non-technical employees in the relationship between leadership styles and turnover intention as well as no significant differences between managerial employees and non-managerial employees in the relationship between leadership styles and turnover intention. This study seeks to investigate the relationship between leadership styles and turnover intention in China’s industry.  Leadership has been one of the most popularly studied constructs in management field.  Yet, most of the leadership studies are conducted in western settings and limited studies could be found using a Mainland Chinese sample.  This study adopts the House et al. (1974) Path-Goal leadership model to explore the voluntary turnover situation in Chinese Internet sector during this critical time where a bubble-burst economy has caused a personnel shake-up. 


Egyptian Banking Industry: Its History and Future

Dr. Ahmad Abd El-Salam Abu-Musa, Tanta University, Egypt and KFUPM, Saudi Arabia



Banks were operating in Egypt since 1842, when Mohammed Ali - the governor of Egypt - allowed some foreign banks to establish branches in Egypt. This paper introduces an overview of the historical development of the Egyptian Banking Industry (EBI) through Nasser’s nationalization regime, Sadat’s “Open Door” policy and, finally, the recent transformation and restructuring of the banking sector through adopting the privatization program. The structure of the Egyptian banking system and the future of the State-owned banks are discussed and evaluated. The development of information technology in the EBI and its impact on bank management, customer services and bank performance are also outlined. Finally, the traditional and non-traditional banking services offered by the Egyptian banking sector have been discussed. This paper introduces an overview of the historical development of the Egyptian Banking Industry (EBI) through Nasser’s nationalization regime, Sadat’s “Open Door” policy and, finally, the recent transformation and restructuring of the banking sector through adopting the privatization program. The structure of the Egyptian banking system and the future of the State-owned banks has been highlighted. The development of information technology in the EBI and its impact on bank management, customer services and bank performance are also outlined. Finally, the traditional and non-traditional banking services offered by the Egyptian banking sector have been discussed. Banks have been recognized in Egypt since 1842, when Mohammed Ali allowed some foreign banks to operate in Egypt. However, most literature considers the “Bank of Egypt” as the first bank to be established in Egypt. This bank was established in 1856, with its headquarters located in London and branches in Cairo and Alexandria.


Examining Consumer Behavior in Food Industry: An Anthropological Descriptive Follow-Up Case Study

Julie Seel, Erskine College, Due West, SC

Dr. Robert Guang Tian, Erskine College, Due West, SC



Consumer behavior is the study of human responses to products, services, and the marketing of the products and services.  The different consumers may act ethically or unethically in a given situation.  This is a follow-up study on the unethical behavior and its effect in the Erskine College Cafeteria.  It is concluded that students’ attitudes toward the unethical behavior are negative, however, they still participate in unethical behavior. Punishment is a reasonable solution to the problem.  Punishment will make the students think before they act in an improper manner. Consumer behavior is the study of human responses to products, services and the marketing of the products and services (Kardes 2002).    In consumer science, ethics is the study of standards of conduct and moral judgment; individual consumers decide their ethical or unethical decision based on their moral values, although situational influences can make it difficult for individuals to invent rationalizations for unethical behavior.  Moral worth is a behavior that is determined by its consequences and by the results of a particular action.  The individual consumers have the choice to make the ethical or unethical decision in any given situation, as ethical and unethical behavior go hand in hand academically. Consumers’ unethical behavior can also be termed as consumer misbehavior, define consumer misbehavior as behavior in exchange settings, which violates the generally accepted norms of conduct in such situations.  Misbehavior by consumers disrupts the openness, impersonal trust, and orderliness of the ideal exchange environment. 


A Market-Oriented Approach to Inculcating the Value of Academic Excellence Among

Minority Students Enrolled in Public Schools

Dr. Lee R. Duffus, Florida Gulf Coast University, Fort Myers, FL

Dr. Joe Cudjoe, Florida Gulf Coast University, Fort Myers, FL



This article examines the factors that influence academic under-performance among minority students, and presents (a) a marketing-oriented approach to inculcating the value of academic excellence among them.  The study results show that a goal- and peer-based learning system that utilizes marketing principles, emphasizes family involvement, individual performance goals, and provides tangible rewards, peer and public recognition for goal achievement will produce high levels of academic performance.  Furthermore, this peer network provides students with positive performance benchmarks and supports development of a peer culture of success characterized by strong self-efficacy among its members.  The marketing process provides a systematic method to connect consumers with ways to effectively and efficiently meet their needs.  As such, it is an appropriate process to apply to connect under performing students or student groups with ways to make substantial progress toward achievement of academic success in their public school education.  This research describes a market-oriented effort to create a peer culture of success among minority students, and reports on a) self assessment and performance data collected from the students after 10 years of program operation, and b) comparative performance with a baseline group of mostly white students.  Nationally, there were almost 47 million PK-12 public school students in 2001(NCES, 2002).  Minorities represent 22% of the population and 30% of public school enrollment, and their academic performance continues to lag that of their non-minority counterparts (Digest of Education Statistics 2000).  This data stresses the disparity that persists throughout public education.  For example, when tested at three levels of reading competencies, gaps of 20 to 30 percentage points were found between nine year old white and black or Hispanic children. Such gaps continue as children are tested at 13 and 17 years old. 


Auditing Expectations Gap: A Possible Solution

Dr. Inam Hussain, Delaware State University, Dover, DE



Auditing expectation gaps have been identified in several countries.  This research investigates the expectation gap in Oman. As in other counties, an auditing expectation gap is found in Oman also. The study looks at education as a way of reducing this gap and proposes that discussion in the introductory accounting texts would reduces this gap. Auditing expectation gaps have been identified in several countries.  The expectation gap can be defined as “the difference between what the public and financial statement users believe that auditors are responsible for and what the auditors themselves believe their responsibilities are” (AICPA, 1993).  In the United States this expectation gap was identified in Cohen Commission’s report, which showed that the public expectation of auditors’ responsibilities was more than what they were receiving (AICPA Cohen Commission Report 1978).  Researchers in several countries have demonstrated that an auditing expectations gap does exist and that the expectation gap is not limited to USA.  In this study the Sultanate of Oman is investigated to see if an audit expectation is found and can education in the form of an auditing course reduce such a gap in expectations.  The remainder of the paper is outlined as follows: A literature review followed by the survey instrument used to obtain evidence. The subsequent sections presents the analysis of the responses and the final section presents a solution, the limitations and directions of future research. In the United States the auditing expectation gap was formally recognized and described in the 1978 Cohen Commission Report.  Auditing Standards Board of AICPA issued auditing Standards in 1988 to reduce the expectation gap.  Statement of Auditing Standard number 58 “Reports on Audited Financial Statements” requires a new standard audit report. 


Ethical Attitudes Among Accounting Majors:  An Empirical Study

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

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



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


Recent Pattern of the U.S. Gender Occupational Segregation and Earnings Gap

Dr. Jongsung Kim, Bryant College, Smithfield, RI



Using Current Population Survey (CPS) and Census Public Use Microdata Sample (PUMS), this paper makes a descriptive inquiry into the changes of gender occupational segregation and the earnings gap in the U.S. labor market during the 1990s.  This paper found that throughout the decade, including a brief recession in the early 1990s, there has been an upward mobility in the occupational distribution.  More specifically, the occupational distribution has been fairly stable with a slight but consistent increase in the relatively prestigious occupational categories, and a modest but sustained decrease in the relatively less prestigious occupational categories.  This finding suggests that the more symmetric occupational distribution between male and female workers, along with upward mobility of female workers, will continue to drive the gain in female workers’ earnings - possibly resulting in the narrower gender earnings gap in the future. In the 1990s, the U.S. economy witnessed the longest economic expansion in its history.  As jobs are created and destroyed simultaneously in booms and recessions at significant rates, the U.S. economy has experienced several major changes that would influence the occupational structure and earnings in the 1990s.  Among the major changes are the decline in the defense industry following the end of the Cold War, an extraordinary amount of corporate restructuring, the emergence of a truly global economy, the deindustrialization,1 and the change in demographic composition as a result of continuing influx of immigrants.  One of the most important developments in the U.S. labor market in the last decade was the increase in the number of women, especially married women, at work for pay.  With the majority of women now participating in the labor force, a great deal of attention has focused on women’s earnings and employment. 


The Development of A Model to Assess the Strategic Management Capability of Small- and Medium-Size Businesses

Herb de Vries, Christchurch College of Education, Christchurch, New Zealand

Jennifer Margaret, Christchurch College of Education, Christchurch, New Zealand



New Zealand’s small to medium-size businesses (SMEs) encompass 99% of all NZ businesses and employ over 60% of the country’s workers. Businesses with five or fewer employees alone account for a quarter of the country’s workers and constitute just under 85% of all businesses (Ministry of Economic Development, 2001). The significance that SMEs hold for our country’s economy is obvious. The implication of these facts for those of us who provide business-related courses is that we need to deliver content in our courses that supports not only the need of our larger businesses for functional and strategic specialists but also the need of smaller businesses for general strategic management capability. This article is the product of a wider study on the strategic management capability of SMEs and the part that business courses can play in supporting efforts to enhance that capability. An essential part of this study has been the formulation of a model against which the strategic management capability of an organisation can be assessed. This work also has required the development of an instrument that would allow us to gather data that could be plotted on that model. The article describes the development of both the model and the data collection instrument and also reports on a study designed to pilot the instrument. The pilot was conducted with a specific NZ industry that is dominated by small- to medium-sized businesses, namely the NZ Furniture Industry. We begin this article by defining small businesses. From there we briefly examine the notion of strategic management capability and its particular relevance to the development of the model and the questionnaire, both of which we describe in detail. Then, before documenting the specifics of our pilot study, we provide some background information on the NZ Furniture Industry.


Classroom Management of Project Management: A Review of Approaches to Managing a Student’s

Information System Project Development

Nicky Ellen, Christchurch College of Education, Christchurch, New Zealand

John West, Christchurch College of Education, Christchurch, New Zealand



What are the most effective ways of delivering an applied course in the application of the Systems Development Life Cycle that gives students a taste of real-life project management issues whilst maintaining assessment integrity and lecturer sanity? This paper discusses different approaches, used by two lecturers teaching Systems Analysis and Design in the School of Business at the Christchurch College of Education, for managing a real-life project and student group work and assessment. The School of Business at the Christchurch College of Education provides qualifications that span the New Zealand education framework, including the provision of the nationally awarded New Zealand Diploma in Business and the Bachelor of Business Management, a jointly conferred degree with Griffith University, Brisbane, Australia.  Within these two qualifications there is a common Systems Analysis and Design course. In the New Zealand Diploma in Business it is a second year optional course - DB252 Systems Development Project. In the Bachelor of Business Management it is a core course in the Information Systems major – MGT2006 Information Systems Analysis. Its focus is on education of students in the effective development of a computerised system for the management of information within a business. This involves all the steps in the development of a Management Information System, from initial identification of the problem, analysis of the requirements for the new information system, design and development of the new system, through to its implementation into the organisation. The methodology used, which mirrors these stages, is known as the Systems Development Life Cycle (SDLC), which is a traditional methodology recognised by the IT industry.  The SDLC takes a sequential approach to information systems development, with a heavy emphasis on front-end analysis of both the current situation and its inherent problems, as well as the perceived new information system.


Cheating – What is It and Why do It: A Study in New Zealand Tertiary Institutions of the

Perceptions and Justifications for Academic Dishonesty

Kelly de Lambert, Christchurch College of Education, Christchurch, New Zealand

Nicky Ellen, Christchurch College of Education, Christchurch, New Zealand

Louise Taylor, Christchurch College of Education, Christchurch, New Zealand



How do different groups of people perceive academic dishonesty and what are the reasons they give for undertaking academically dishonest acts? It is posited that students and lecturing staff have different perceptions of what constitutes academic dishonesty and the seriousness of the acts. This paper also presents the findings of investigations into the reasons given for academic dishonesty and rates of prevalence within New Zealand tertiary institutions. In this age of increased pressure for academic success and the endeavour for higher qualifications, academic dishonesty has become a much-discussed subject amongst tertiary teaching staff. Not only is it of interest to lecturing staff in tertiary institutions, but also to employers of graduates, and to students who may view the exploits of their academically dishonest peers as injurious to their own hard-earned success.  The research undertaken draws on literature and other published studies, but is primarily concerned with the tertiary sector in New Zealand, specifically universities and polytechnics, and encompasses a variety of academic disciplines. Although there is a comprehensive set of studies available from overseas, there is very little material available in the New Zealand context. To this end, an independent study was carried out with New Zealand tertiary institutions, students and academic staff. Areas investigated include prevalence, perceptions, justifications, action and non-action, penalties, policy and prevention. The intention of this paper is to present the findings from three of these areas - prevalence, perceptions and justifications.  We have interpreted the term academic honesty to describe the submission of work for assessment that has been produced legitimately by the student who will be awarded the grade, and which demonstrates the student's knowledge and understanding of the content or processes being assessed.


Leadership Style and its Relationship to Individual Differences in Personality,

Moral Orientation and Ethical Judgment – A Ph.D. Proposal

Jennifer Margaret, Christchurch College of Education, Christchurch, New Zealand



The goal of this study is to search for different ethical judgements of different groups of managerial professional participants and to see if these judgements vary according to their type of leadership style, personality and personal moral orientation.  The participants are New Zealand and Australian managerial professionals from these countries education and business sectors.  The central themes are: (1)  At the behavioural level - Linking the most recent leadership theory ( to the notions of: organisational virtues; the applied ethics notion of moral intensity and; the moral psychology notion of personal moral orientation.  (2)  At the mental representation level - Exploring the underlying mechanisms of mental representation of leaders' moral orientation and possible consequences of differential covert encoding for: ethical decision processes and; leadership behaviour.  The following sections address these themes separately, discussing the theoretical rationale and previous empirical research concerning the proposed relationships, briefly defining each variable in the proposed research and, concludes with hypotheses and methodology for each.  Latest emerging themes in Organisational Psychology literature concern the notions of ethics and justice.  "Workplace justice, a long-standing topic in organisational research, is an increasing concern..." (Rosseau, 1997).  Rosseau (1997) has reviewed all the key areas of organisational psychology and concludes that each of these areas has either become a justice issue or has an important ethics or justice component to it.  Organisational change is one such area in which Rousseau notes the perceived fairness of outcomes (distributive justice); the communication process in managing change (interactional justice); and the processes whereby implementation decisions are made(procedural justice), all have an influence to varying degrees on employees perceptions of workplace justice. 


Debt and Taxes, and Tax Deferral

Dr. Terrance Jalbert, University of Hawaii at Hilo, Hilo, HI

Dr. Jeffrey Decker, University of Hawaii at Hilo, Hilo, HI



In this paper we examine the conventional wisdom that ten years of tax deferral is almost as good as exemption.  Examining a corporation that invests in a single risk free bond we demonstrate that the conventional wisdom regarding tax deferral does not hold.  We go on to demonstrate that deferral is not as good as exemption even when the deferral time is extended to 20 or 30 years.  Based on these findings we argue that the equilibrium quantity of bonds outstanding in the economy will be higher than that suggested by Miller (1977).  This work has important implications for personal and corporate investment decisions, capital structure analysis as well as empirical studies that rely on work of Miller (1977) to identify marginal tax rates. One of the seminal articles in finance is the 1977 Debt and Taxes article of Merton Miller.  In his article, Miller examines the optimal capital structure of the firm.  He concludes while there may be an optimal capital structure for the economy as a whole, there is not an optimal capital structure for any individual firm.  He arrives at this conclusion, in part, by arguing that because of tax deferral, the effective personal tax rates on income from stocks is 0%.  He makes his argument for a 0% effective personal tax rate in large part based on the argument that ten years of tax deferral is almost as good as exemption. Millers argument has relevance not only in the capital structure literature, but in other literature streams as well.  One example is the literature related to the Darby Effect.  In much of the literature concerning the Darby Effect the corporate tax rate is used as the marginal investors tax rate based on the analysis of Miller (1977).  A specific example is Jaffe (1985), who examines the Darby Hypothesis using a technique based on Miller (1977).  In addition to the Miller based analysis, Jaffee (1985) augments Miller's suggested corporate tax rate by including personal taxation on equity income.  He finds that the incorporation of personal taxes increases the responsiveness of interest rates to changes in the rate of inflation. 


Empirical Analysis of Determinants of Geographic Differentials in the Bank Failure Rate

in the U.S.: A Heteroskedastic-Tobit Estimation

Dr. Richard J. Cebula, Armstrong Atlantic State University, Savannah, GA

Dr. Richard D. McGrath, Armstrong Atlantic State University, Savannah, GA

William O. Perry, Armstrong Atlantic State University, Savannah, GA



Using the Heteroskedastic-TOBIT model to deal with both censored data and a heteroskedasticity problem, this study address determinants of interstate differentials in bank closing rates over the 1982-91 period. It is found that the bank closing rate in a state is an increasing function of the cost of deposits, the percentage of state employment derived from oil and natural gas extraction, and the existence of unit banking regulations, while being a decreasing function of housing price inflation in the state, the average percentage growth rate of the GSP in the state, and the percentage of banks in the state having federal charters.  (JEL codes: G2,  G20, G21) For the time period from 1943 through 1981, relatively few banks failed because of insolvency. This situation changed dramatically beginning with the year 1982, during which 42 banks were closed, followed by 48 closings in 1983 and 79 closings in 1984. The number of closed banks increased sharply thereafter, hitting 200 closings in 1988 and 206 in 1989 and surpassing 119 closings per year through 1992. Indeed, the bank closing rate in the U.S. did not decline significantly until after the implementation of provisions (such as risk-related deposit insurance and stricter capital requirements) of FDICIA, the Federal Deposit Insurance Corporation Improvement Act of 1991 [Cebula (1999)].  Commercial bank failure data in the U.S. reveal a very large interstate variation in bank failure rates. Indeed, the bank failure rate by state, especially during the 1980s and very early 1990s, differs widely among the various states. For example, for the 1982-91 study period (when the number of bank closings had especially intensified), there were eight states that experienced zero closings, whereas there were ten states in which the percentages of banks that failed reached double digits.  


Strategic Market Planning in Romania: Implications for Practitioners

Dr. Victoria Seitz, California State University, San Bernardino, CA

Dr. Nabil Y. Razzouk, California State University, San Bernardino, CA



Romania’s recent invitation to NATO and an American president’s visit symbolize the growing potential of this former Communist country.  Although globalization of western brands is prevalent in Romania, there is evidence of a lack of strategic planning for these brands that would aid in developing brand loyalty in the Romanian market.  The authors identify strategic guidelines for consideration of the Romanian market as well as other Central and Eastern European nations that will enhance brand loyalty through its life cycle. Since the fall of Communism in the late 80’s Central and Eastern European countries have grappled with the transition process toward a free market economy with varying results.  The Russian Federation has seen great growth in industrialization and an average per capita income of $500 as a result (Starobin and Belton, 2002).  In the Czech Republic the per capita income has increased to an average of $1,000 per month through their transition efforts (Park, 2002)  Western European and American companies have been instrumental in seeing these countries through to a market economy by introducing brands to the marketplace via exports, subsidiaries, joint ventures, mergers and acquisitions.  Hundreds of western brands are now available through globalization to a market that was literally cut off from the rest of the world.  Some of the top brands include Coca Cola, Microsoft, IBM, General Electric and Intel (“The 100 Top Brands”, 2002).  However, in the race to gain market share in these newly opened markets, the globalization of brands has taken a turn for the worse.  Rather, than taking the time to understand the market, marketers have utilized economies of scale in getting their piece of the pie. 


Taxonomy and Remedy of Work Hazards Associated with Office Information Systems

Dr. Haidar M. Fraihat, King Fahd University for Petroleum and Minerals, Saudi Arabia



The use of information technology in the workplace implicates both positive and negative impacts on knowledge workers, depending on the manner in which the technology is utilized. Potential negative impacts include deskilling, repetition of work tasks, excessive monitoring of workers, as well as a spectrum of potential health hazards and job injuries.  Through the use of interviews and investigating selected organizational and medical archives, the paper revealed that OIS-related job hazards are different from other job hazards. Mental, emotional, sociological and psychological harms are more related to OIS-caused job hazards and that combating these problems requires a collective effort of all stakeholders determined by the paper.  The paper argues that several methods could be used to combat OIS-related hazards. They include awareness creation, training, following proper ergonomics procedures and standards, increasing R&D spending by IT industry, and modernizing government legislations. In addition, the paper provided a set of activities knowledge workers need to undertake in order to mitigate this modern-day organizational predicament.  Information technology products have expedited the transformation of our world from the industrial age to the information age. The unprecedented mushrooming of the production and use of information has increased the global reliance on knowledge and hence the prevalence of information society. The unprecedented increase in the worldwide number of knowledge workers, most of them execute daily tasks inside offices and make use of at least one type of IT products has brought to attention new unfamiliar forms of work hazards in this seemingly comfortable work environment.  Information technology has eliminated many tedious or hateful tasks that formerly had to be performed by people manually.


The Determinants of Brand Loyalty

Palto Ranjan Datta, City Business College, London, UK



The consumer goods market in the United Kingdom is highly competitive. Along with the major brands, own label brands also have a considerable market share. Even small changes in the market share can have a significant financial impact on company sales. In the face of such competition having brand loyal customers not only ensure sales, but also reduce marketing costs. To create brand loyal customers and retain them, it is essential to have knowledge of the major factors that influence brand loyalty amongst customers in the consumer goods market in the United Kingdom.  Exploratory research was conducted to investigate the major factors that influence the consumers brand loyalty in the consumer goods market in UK. For the purpose of the research apart from secondary data analysis, a pilot study was also conducted. During this pilot study primary data was collected from in-depth interviews and focus group interviews. The research revealed that the major factors that influence brand loyalty in the UK consumer goods market are the product performance, the satisfaction of customers, price, habit, the history of brand usage, brand names, and the level of risk and involvement of the consumer. Further research can be conducted on how each of these factors can influence a consumer’s loyalty towards a brand of a particular product category. ‘Brands are at the heart of marketing and business strategy. Successful brands create wealth by attracting and retaining customers,’ (Doyle, 1998,p.165) and ‘Brand loyalty is a fundamental concept in strategic marketing. It is generally recognised as an asset’ (Wernerfelt, 1991,p.229), as certain loyal consumers may be willing to pay more for a brand. (Jacoby and chestnut, 1978; Pessemier, 1959).


Uncertainty and Learning in University-Industry Knowledge Transfer Projects

Dr. Abdelkader Daghfous, American University of Sharjah, Sharjah, U.A.E



This paper presents the results of an exploratory case study that investigates the effects of learning activities and uncertainty, perceived by the recipient firm, on the benefits to that firm from university-industry knowledge transfer projects. The goal of this case study is to explore such relationships using data from a system development project.  While successful knowledge transfer indicates a high level of tangible and intangible benefits to the firm, uncertainty is measured in terms of the perceived lack of technical and organizational knowledge. Although the nature of this study is exploratory, the results obtained provide valuable insights for future empirical research, as well as useful prescriptions for more successful knowledge transfer projects. The ability of firms to generate and integrate new knowledge is an important source of competitive advantage. Whereas knowledge per se is not new, recognizing its value and learning how to manage it effectively is new; and has given rise to the knowledge management (e.g., see Alavi and Leidner, 2001) and the knowledge-based perspective of the firm (e.g., see Steensma and Corley, 2000).  Indeed, a technology transfer project is essentially a knowledge accumulation task, which Gupta and Govindarajan (2000) further disaggregated into knowledge creation, acquisition, and retention. In contrast, Davenport and Prusak (1998) argued that the knowledge transfer process consists of transmission and absorption, culminating in a behavioral change by the recipient firm.  Knowledge transfer has not only been a conceptual extension of technology transfer, but it has also emerged as one of the most important and most researched activities and processes in knowledge management.


Leadership Simplified: Abandoning the Einsteinian “Unified Field Theory” Approach

Dr. William Burmeister, Elizabethtown College, Elizabethtown, PA



“Leadership Simplified: Abandoning the Einsteinian ‘Unified Field Theory’ Approach” breaks with the latest integrative models of leadership; embracing instead the axiom of Occam’s razor. This philosophical precept, firm in the belief that the fewer assumptions an explanation depends on - the better it is; suggests that leadership can be best understood by the simplest and most obvious criteria: the type of power employed. The long history of formal leadership study has charted a myriad of courses since its inception and there are a sizeable number of treatments of this topic. One recent article estimates there have been more than 3,000 studies of leadership in the past seventy years (Schriesheim, Tolliver, and Behling 1983). Stogdill’s 1974 compendium of research on leadership drew on over 3000 selected references and the revision by Bass (1981) added another 2,000. Given this large amount of material on leadership and the study of it, one might expect well established conceptualizations and definitions of the topic (Pfeffer, 1971). This however, is not the case. The definition itself tends to vary depending upon the orientation and purpose of the author; and as Stogdill (Yukl, 1989, p. 252) observed, “There are almost as many definitions of leadership as there are persons who have attempted to define the concept.” Leadership was conceived by Mintzberg, among others, as the vertical relationship between managers and their subordinates. Blake and Mouton (1981) explain leadership as the managerial activity that maximizes productivity, stimulates creative problem solving, and promotes morale and satisfaction. Locke, (1991) on the other hand, maintains leaders establish the basic vision of an organization and managers implement that vision. Leadership, in many ways, remains an enigma, a much discussed but little understood phenomenon (Burns, 1978).


Examining a Singapore Bank’s Competitive Superiority Using Importance-Performance Analysis

Alvin Y. C. Yeo, University of Western Australia, Leicester, Australia



In increasingly liberalized financial environments, financial service providers are recognizing the importance of understanding consumers’ bank selection and product purchase decision. To this end, this paper diagnoses the competitive superiority of a major local bank in Singapore using the Importance-Performance matrix. Insights on broadly, bank selection criteria and specifically, housing loan selection criteria are obtained based on survey findings from 187 banking customers. Implications of these findings for financial service providers are also discussed. Against a backdrop of increasing competition, shifting customer requirements, unprecedented technological change and the recent wave of deregulation (Houston et al., 2001; Ridnour, Lassk & Shepherd, 2001; Hooley & Mann, 1988; Ennew, Wright & Thwaites, 1993), financial service providers are re-examining the role of marketing in their organisations (Price & Longino, 2000). As a consequence, financial institutions are compelled to identify clear competitive positions in the market place (Devlin, Ennew & Mirza, 1995) and refine their marketing mix strategies. This would allow them to realise superior customer value, which invariably drives customer loyalty (Dodds, Monroe & Grewal, 1991; Sweeney, Soutar & Johnson, 1999).   Indeed, research has shown that consumers are less loyal and are more willing to switch providers when dissatisfied (McDougall & Levesque, 1994). They are more price sensitive and this is amply evidenced in surveys indicating that though segments with different needs continue to exist, all consumers now seek competitive interest rates (Krishnan et al., 1999; McDougall & Levesque, 1994).


Teaching Outside the Box: A Look at the Use of Some Nontraditional Teaching Models in Accounting Principles Courses

Dr. Gary Saunders, Marshall University, Huntington, WV

Dr. Jill Ellen R. Christopher, Ohio Northern University, Ada, OH



Paradigms for teaching accounting have been evolving at a fairly rapid pace in the last decade.  The Accounting Education Change Commission (AECC) has been a leader in calling for changes.  They, and others in the accounting profession, have issued statements addressing the structure and objectives of accounting principles courses.  These statements have stressed the need for innovative teaching approaches and the importance of incorporating active learning and team learning (group work) into accounting principles courses. Conventional wisdom might suggest that as the size of accounting principles classes increases, there will be less likelihood that instructors will use innovative teaching methods, and that students will have fewer opportunities to experience active learning and team learning projects.  In order to determine relationships between accounting principles class sizes and the relative level of programs’ use of nontraditional teaching models, a questionnaire relating to the teaching of accounting principles was sent to 325 chairpersons of accounting departments in the U.S. Results indicate that the majority of schools use team learning and computer assignments, but that they do not require students to attend laboratory – i.e., active learning – sessions, or to complete simulation projects.  Accordingly, the results suggest that while most schools are doing a good job of addressing the need for computer work and group work in accounting principles courses, more effort should be made to include active learning activities in these courses. Paradigms for teaching accounting have been evolving at a fairly rapid pace in the last decade. 


Testing the Consistency of New Zealand SME Financial Ratios Across Industry Groups

Dr. Stuart Locke, University of Waikato, Hamilton, New Zealand

Dr. Frank Scrimgeour, University of Waikato, Hamilton, New Zealand



In December 2002 the Ministry for Economic Development, in New Zealand (NZ), commenced an online benchmarking service for Small-Medium Enterprises (SMEs).  This is part of a series of government initiatives to improve the economic performance of the sector.  As financial ratios play an important part in financial benchmarking an empirical test of the distributional properties of financial ratios for NZ SMEs was undertaken.  This study samples 3,811 NZ SMEs, providing a wide cross-section of industry types.  The results found that very few financial ratios were normally distributed and that comparisons across industries, and within most industry groupings, are likely not to be statistically valid.  The study was replicated on two separate years of data and the findings were similar. The purpose of this study is to consider the extent to which financial ratios are consistent between industry groupings for small to medium size enterprises (SMEs) in New Zealand.  It is traditional wisdom in accountancy that financial ratios are useful and popular folklore, such as the “current ratio should be at least 1”, often pass without question.  This research is important for analysts seeking to appraise the robustness of a business’ financial position; identify growth opportunities; identify signs of business distress; and determine the value of the business.  Benchmark ratios have been found to be of assistance to a number of organisations, including banks, accountants and business advisors.  The Management Research Centre (MRC), of the University of Waikato in New Zealand, has compiled benchmark financial ratios, based on surveys of businesses, for 25 years.  The extent to which these data are useful for analysts is the crux of this paper.  As the importance of business advisory roles, directed toward SMEs, expand it is essential that there is a clear picture as to how useful financial ratios are for professionals seeking to use them as benchmarks. 


An Empirical Study About the Use of the ABC/ABM Models by some of the Fortune 500

Largest Industrial Corporations in the USA

Dr. Raj Kiani, California State University, Northridge, Northridge, CA

Dr. M. Sangeladji, California State University, Northridge, Northridge, CA



Activity-Based Costing and Activity-Based Management models have received considerable attention by both academicians and practitioners in the past 20 years. However, the attributes and shortcomings of the models have not been yet adequately tested. The main purposes of this research were (1) to determine the level of the usefulness of the models in practice, (2) to understand the attributes and obstacles of the models in the real-world environment, (3) and to recommend whether the concepts should be included in the business school curriculum. To accomplish these objectives, a survey questionnaire comprising 21 questions was sent to controllers/managers of all 500's largest industrial corporations in the U.S.A. From 500 questionnaires, 85 were found usable for analysis. Out of 85 companies, 41 did not use ABC/ABM models in their operations and the 44 remaining companies had used the models at various level. Analysis of the responses received from the 44 companies revealed useful information about benefits, attributes, and obstacles regarding the adoption and implementation of the ABC/ABM models. The major obstacles, among others, included inadequacy of management support, unwillingness of people to change, shortage of competent personnel, and complexity in process design. The conclusions reached in this research were (1) since 44 out of the 85 participated companies (over 51%) had used the models, colleges and universities should continue to include these models in their curricula and (2) because only 8 out of 44 companies had used the models over 5 years, further empirical research and studies are needed to evaluate the degree of usefulness of the models after an extended application.   "Activity Accounting" was first introduced and used by the Tennessee Valley Authority in 1940s.


Competing Size Theories and Audit Lag: Evidence from Mutual Fund Audits

Dr. Charles P. Cullinan, Bryant College, Smithfield, RI



The existing audit lag literature identifies three theories for why client size may affect audit fees: (1) that larger clients have shorter audit lags because they can prepare their financial statements more quickly (the client preparation theory), (2) that larger clients have shorter lags because auditors are more willing to complete the audit quickly to retain larger clients (the client service theory), and (3) that larger clients have more transactions to audit, resulting in longer audit delays (the transactions theory). Mutual funds are required to prepare financial statements daily, eliminating any delay caused by the client’s financial statement preparation time. There are also measures of fund transactions that are separate from traditional measure of client size, allowing for an discrete examination of the client service and transactions theory. Results of this study provide mixed support for the client service theory in finding that fund assets was negatively related to audit lag, while other measures of the potential incentives for client service were not significantly related to audit lags. Results of the study also provide mixed support the transactions theory.  Research on the length of time between the end of a client’s fiscal year and the audit report date (audit lag) has produced competing theories for the effect of client size on audit lag. Some theories suggest that larger clients will have shorter audit lags because larger clients have better control systems which enable them to prepare their financial statements more quickly.  Larger clients are also theorized to have shorter audit lags because they may have priority within accounting firms in competing for limited audit resources. An alternative theory suggests that larger clients will have longer audit lags because they have a greater number of transactions which will take the auditor a longer time to examine.


An Empirical Analysis of Where Firms Choose to Emit and Corresponding Firm Performance

Dr. Jeffrey L. Decker, University of Hawaii at Hilo, Hilo, HI

Dr. Terrance Jalbert, University of Hawaii at Hilo, Hilo, HI



This paper explores the firm-level, state and federal characteristics that explain pollution emissions during 1988-1996. Differences in pollution approach between different types of firms and the states in which they operate provide an unique research setting to investigate how firms respond to differing levels of state environmental regulation, what effect a change in regime at the federal level has on firm pollution control, how firms with favorable environmental reputations compare to firms with unfavorable environmental reputations and what firm characteristics are related to environmental performance. The results indicate that government regulation influences where firms choose to emit. The results further indicate the firms that emit more of their emissions in pro-industry states have organizational slack available to meet the increase in federal environmental regulations. Moreover, firms with favorable environmental reputations did not reduce emissions significantly more than firms with unfavorable environmental reputations.  The impact of environmental concerns on U.S. businesses has grown dramatically over the past 20 years. Firms have responded to changes in environmental regulations and changes in public opinion in various ways. Some firms take a proactive approach and develop positive environmental reputations. Others take a reactive approach and are seen as having unfavorable environmental reputations. These differences in pollution approach between different types of firms provide a unique research setting to investigate how firms with favorable environmental reputations compare to firms with unfavorable environmental reputations regarding emissions and what firm characteristics are related to environmental performance and where firms choose to emit.


American Business Objective: An Alternative Approach

Dr. Ioannis N. Kallianiotis, University of Scranton, Scranton, PA



This mostly general, theoretical, and philosophical work tries to point out some of the existing problems in our corporations (American Businesses) and to suggest a few long-term remedies. The social objective of the corporate firm is emphasized, subject to moral, ethical, and just social constraints. Also, a preliminary attempt of business valuation, risk, and return has been undertaken. At the end, a lot of discussion is made for corporate governance, control, and regulations and a few suggestions, by using an alternative approach, are given. Humanity has gone a long way, in its known history of about seven thousand years, to learn, improve, value and reach its ultimate objective. It has accumulated physical and human capital, it has established businesses which can contribute to production of goods and services, to job creation, to wealth generation and ultimately to social welfare maximization. It has improved its intellect through observations, experiments, knowledge, philosophy, schooling, exchanges, and revelations. It has created a value system with whom measures assets, wealth, behavior, factors, risk, time, and anything valuable that constitute our cosmos (=ornament). It has established governments, institutions, laws, and regulations, moral, ethical, and just systems, which oversee, direct, and administer all this valuable creation that has only one objective, to perfect all human beings. Lastly, since early 1960s this harmony, justice, value-oriented, and advanced world has shown signs of deterioration, revaluation, corruption, demoralization, and lost of control.


Education and Tax Policies for Economic Development: Taiwan’s Model for Developing Nations

Dr. Raymond S. Chen, CPA, California State University Northridge, Northridge, CA

Dr. James S. H. Chiu, CPA, CMA, California State University Northridge, Northridge, CA



Economic development in Taiwan over the past forty years has been truly miraculous.  Since 1960, per capita gross national product increased from US$154 to over US$14,216, which translates to an increase of over 192 times.  Worldwide, Taiwan has become the nineteenth largest economy and fifteenth largest trading economy.  Although there are many factors attributing to the economic growth in Taiwan, this paper identifies the most significant policies that assisted in propelling Taiwan’s prosperity.  These policies consist of both educational policies that fostered human resource development and tax policies that further stimulated economic development.  In addition to what has already been done by the government of Taiwan, this paper also addresses other governmental strategies to further promote economic and social development.  Many developing nations have devoted significant efforts in formulating strategies to foster their countries’ economic development.  These developing nations usually focus on highly developed nations, such as the United States of America, for reference in modeling their strategies.  This paper presents Taiwan for consideration by developing nations as an example of strategic planning for economic development. Taiwan is a mountainous island, with the Central Mountain Range running from north to south and providing a major watershed between east and west. The mountain range occupies more than half of the island. Scores of peaks rise above 10,000 feet with the highest being 13,113 feet.   Around the mountainous area are numerous independent hills, with an average height of 5,000 feet. Taiwan, including the offshore Penghu islands, covers an area of 35,981 square kilometers or 13,892 square miles. 


Analyzing the Regime-Switching Behaviors on Exchange Rates and an New Test for PPP: -An Empirical Study on the

Exchange Rates of  Two Major Industrial and Four Asian Developing Country Currencies

Dr. Ming-Yuan Leon Li, National Chi Nan University, Taiwan



This study adopts Hamilton’s Markov-switching model (hereafter MS model) to examine and compare the regime-switching behaviors of exchange rates of two major industrialized country currencies including GBP and JPY and four Asian developing country currencies including NTD, KOW, THB and PHP. An alternative innovation of this paper is to establish a specification that incorporates the MS model and purchasing power parity (hereafter, PPP) and examine whether the PPP has marginal predictive power for the exchange rate returns after accounting for state-dependent switching.  Our empirical findings are consistent with the following notions. First, the regime-switching behavior are much (less) statistical significant in the exchange rates of developing country currencies (Industrial country currencies). Second, the finding provides the evidence that PPP is pronounced in the high- (low-) volatility regime of industrial country currencies (developing country currencies). Third, the switching in variance with asymmetric PPP established by our paper outperforms the competing models in statistical and forecasting performances. Hamilton (1988) extended Goldfeld and Quandt (1973)’s models to establish Markov switching techniques as a setting for picturing financial and macroeconomic time series data. The features of Hamilton (1988) approach are the parameters depended on a discrete-state Markov process, and we can use them to analyze the occasional and discrete shift of return variables.  Many prior studies had been adopted Markov switching models to analyze the influence of economic and political events on the macroeconomic and financial variables. By examining the exchange rate returns, especially after 1970s, one can easily find the volatility are substantially greater during some periods. 


Marketing Research and Information Systems: The Unholy Separation of the Siamese Twins

Dr. Z. S. Demirdjian, California State University, Long Beach, CA



With the advent of the personal computer, there has been an explosion in the information technology. Against the backdrop of increasing demand for literacy in information systems since 1970s, universities began to offer information systems (IS), also known as   management information system (MIS), courses usually in a separate departments, carrying the same name as IS or MIS.  Almost all of the courses offered in the IS department are designed to process, store, and retrieve secondary data.  In the age of information, management needs primary data to keep abreast of the constantly changing competitive environment.  Myopically, the IS department does not require a course in research methodology to prepare the IS student to generate primary data and be able to appraise data produced by others.  On the other hand, marketing department does offer such a course titled Marketing Research.   When a student majoring in  IS  graduates, he or she would lack the conceptual knowledge and the requisite skills in either conducting a systematic and objective research study to generate information  for aid in making business decisions or in evaluating the accuracy of data produced by someone else.   The focus of this paper is to demonstrate by means of a model that Marketing Research and IS are congenitally joined together like the Siamese twins whose unholy separation would shortchange the IS student.  Additionally, recommendations are made to correct the shortsightedness and the deficiency of the IS curriculum in order to prepare students for the real world, who will be well rounded in dealing with both secondary and primary data management and usage.


Income Squeeze on New Zealand Universities

Dr. W. Guy Scott, Massey University, Wellington, New Zealand



New Zealand universities receive a government grant determined by the number of full-time equivalent students (EFTS) enrolled in programmes of study that qualify for Ministry of Education funding.  Over the last twenty years, real Ministry of Education subsidy per EFTS fell by 36% or at an annual average reduction of 2.3% and, numbers of EFTS per academic staff member grew from 12.5 to 19.0.  The proportion of income from the Ministry of Education fell from 73% in 1991 to 46% in 1999, the shortfall being met by higher student fees and revenue from entrepreneurial activity.  As a nation, New Zealand spent US$3,192 less per EFTS than did Australia in 1995.  If present policy settings are unchanged, numbers of students per staff member will continue to increase, and universities may have trouble maintaining the quality of teaching and research.  Rising fees payable out of pocket by students will increase the difficulties for those from lower socio-economic families to access university education.  Failure to address problems of funding, access and retention of a young skilled workforce will reduce New Zealand’s ability to compete internationally. Key words: Education, university, funding, public policy, economics. Historically the New Zealand Ministry of Education has been the dominant source of income for New Zealand universities. Universities receive a government grant based on the number of full-time equivalent students (EFTS) enrolled in approved programmes of study that qualify for Ministry of Education funding.  (The appendix provides information on government funding categories and rates.)  


Characteristics, Performance and Prospects of Emerging Stock Market of Oman: Facts &

Figures for International Investors

Dr. Mazhar M. Islam, Sultan Qaboos University, Sultanate of Oman



The Emerging Stock market of Oman known as Market Muscat Securities Market (MSM) was established in 1989 with 71 joint stock companies and an equity capital of about US$ 700 million. There has been an  explosive growth of the MSM (504 points) in 1997 and  in first half of 1998 due to bank loans, borrowing from trust account, the liberalization of income tax laws, record amount of profits earned by companies,  stable oil price, and the government’s plan for  economic reforms. However, in September 1998 the MSM Index dropped to 280 points leading to the crash of the market.  The market observers view this crash mainly because of the high speculative activity fueled by lack of transparency in the market, investors’ inability to separate the market price of a share from its intrinsic value, high rates of interest  with low dividends, sharp decline in oil price,  the government  fiscal deficit, lack of proper monitoring & supervising systems; and   the absence of  required institutional infrastructure facilities. The government subsequent   reform measures although stimulated the market transactions for a while, however the MSM has yet not recovered from its 1998 crash. It has been argued here that the prospects  of the market depends on how quickly the government  authority  addresses some important issues in order to bring back the investors’ confidence. The investors need accurate information from the professional analysts regarding  companies’ financial strengths with long-term prospects. This research suggests that the capital market development in Oman must be based on strong institutional infrastructure, viable private & public equity market, strong corporate governance mechanism, timely regulation & supervision, competent management, and sound economic policies.


U.S. Treasury Inflation Protection Bonds

Dr. Malek Lashgari, CFA, University of Hartford, West Harford, CT



The issuance of U.S. Treasury inflation indexed bond was a step forward in the pursuit of capital market completeness. In this manner, investors would be able to maintain their real purchasing power in any future states of inflation. These bonds are suitable and at times superior to regular bonds. For example, U.S. Treasury inflation indexed bonds would be an ideal investment in a defined benefit pension plan investment portfolio in which wages reflect inflation. Some features of these bonds though appear to be of concern. A portion of these bonds cash flows are accrued over time and paid at maturity. However, taxes are due on an annual basis causing a shortfall in periodic cash flows. Furthermore, the adjustment process to inflation is theoretically incomplete. This incomplete matching to inflation by U.S. Treasury inflation indexed bonds, however, provides an opportunity for introducing a derivative contract that may be used to modify the inflation adjustment process. Inflation indexed bonds were issued by the U.S. Government Treasury Department in January 1997. These bonds offer compensation for past inflation on the semiannual income and on the final principal maturity value. Similar to regular bonds, inflation indexed bonds provide cashable coupon interest income every six months. However, unlike regular bonds, these periodic incomes tend to rise over time according to the observed rate of inflation. The principal value of regular government bonds is stated on the face of the bond and will be paid at maturity. For an inflation indexed bond, due to adjustment for inflation, the added benefit is that its accrued principal value will be higher than its face value. If there is no inflation or when deflationary environment exists, U.S. Treasury inflation indexed bonds would pay the stated face value at maturity.  


The Effects of Organizational Culture on Conflict Resolution in Marketing

Dr. Sungwoo Jung, State University of New York at Oneonta, Oneonta, NY



Most of the current research on conflict management, especially in marketing, does not consider the differences of each party’s organizational cultures. Resolving the conflict between manufacturers and suppliers becomes important in order to build long-term relationship. Four different types of conflict resolution approaches (Dant and Schul 1992) are hypothesized depending on the organizational cultures (Cameron and Freeman 1991) of manufacturers and suppliers. In spite of the importance of organizational culture, it has not been reflected in scholarly studies (detailed overviews are found in Ashkanasy, Wilderom, and Peterson 2000). This lack of development may be attributed to the relatively greater attention given to consumer than to organizational issues in marketing in general (Ruekert, Walker, and Roering 1985). Therefore, it became necessary to pay attention to organizational culture along with structural explanations for managerial effectiveness (Parasuraman and Deshpande 1984). Weitz, Sujan, and Sujan (1986) is one of the studies to include organizational culture into a model of selling effectiveness.  In other way, it is believed that effective management control of marketing channels is vital to marketing planning (Lederhaus 1984). Conflict can so undermine the effectiveness of marketing distribution channels as to result in channel termination (Eliashberg and Michie 1984). The issues of conflict in channels of distribution have been much attention in marketing literature (Gaski 1984).


Safe Banking

Dr. Sankar Acharya, University of Illinois at Chicago, IL



Capital market gurus plead for universal banking with theoretically sound but practically fragile firewalls around special purpose vehicles (SVC) like financial conduits and trusts, while regulators continue to noose banks and massive risks pile on taxpayers due to credit derivatives.  Fragile firewalls destroyed Enron and MCI-WorldCom and may implode banks. The solution proposed here is to create enough safe banks to serve panic-prone depositors, and to let the rest of the banks operate as universal banks without regulation.  Safe banks invest exclusively in government securities, accept no more deposits than liquidation value of assets, and issue no liabilities (like debt) except common stock and preferred stock.  Why should the government regulate commercial banks as in the U.S. and most other countries?  American commercial banks were not regulated prior to 1933.  In principle, a deregulated banking system should operate like any other industry in which companies raise debt and equity capital to fund business operations, return a fixed pre-set coupon interest to bondholders and distribute the residual profits to shareholders as dividends. Bondholders and shareholders take risks consistent with expected rates of return on investments.  The expected rates of return may differ from promised coupon interest rates on debt or dividend payment rates on common stock.  Investors choose how much to invest depending on their expected returns and risk tolerances. 


Impact of a U.S. Living Wage on Food Prices, Obesity, and Healthcare Costs: A Discussion

Dr. Michael F. Williams, University of St. Thomas, Houston, Texas



A national U.S. living wage may reduce aggregate healthcare expenditures in the United States.  This connection hinges on the following four propositions:  1.  A higher minimum wage will cause higher food prices. 2. Higher food prices will cause reduced food consumption. 3. Reduced food consumption will cause reduced obesity. 4. Reduced obesity will cause reduced healthcare costs. We summarize research by others that supports each of these four propositions.  We then provide a preliminary estimate of the reduction in healthcare costs resulting from a living wage of $8.90—a reduction in healthcare costs totaling $1.82 billion.  We suggest an avenue of research that may provide a more accurate measure of the size of this reduction. Proponents of a living wage in the United States argue that the minimum wage should be raised sufficiently high so that a worker can support herself and her family at a living standard that exceeds the poverty level.(1)  Analysis of the effects of such a living wage (and of a higher minimum wage in general) often centers on its effects on employment (and unemployment); an overlooked possibility is that a living wage may reduce aggregate healthcare expenditures. This possibility arises as a result of these four related propositions: 1.  A higher minimum wage will cause higher food prices. 2. Higher food prices will cause reduced food consumption. 3. Reduced food consumption will cause reduced obesity. 4. Reduced obesity will cause reduced healthcare costs. Research by others supports each of these four propositions. 


A National Survey of Student Investment Clubs in Taiwan: The Use of Appreciative Inquiry Approach

Dr. Bryan H. Chen, National Changhua University of Education, Taiwan



A student investment club enables student members to gain real-world experience managing their own money in the securities market. There are challenges that a successful student investment club has to face and solve, including limited capital, continual turnover of membership, inactive members, and consistency of record keeping, reporting requirements, potentially high transactions costs, and liability concerns. The purpose of this study is to investigate the factors that affect the club's operation via the use of Appreciative Inquiry (AI) approach. The findings reported in this study will help guide student investment clubs in developing sound strategies to run a student investment club. David Cooperrider and Suresh Srivastva, the theory creators of Appreciative Inquiry (AI), suggest that AI is a form of organizational study that selectively seeks to highlight the life-giving forces of an organization’s existence. For example, what makes organizing possible and what are the possibilities of new effective methods of organizing? There are four basic principles that guide AI: exploring the life-giving forces of the organizations should be appreciative, applicable, provocative, and collaborative (Rainey, 1996). This paper describes how the researcher using AI to investigate students in Taiwan at the particular eight universities are forming investment club to get a real-world experience to give students learning skills that will stay with them for a lifetime.


Globalization, the Knowledge Economy, and Competitiveness: A Business Intelligence

Framework for the Development SMES

Dr. Louis Raymond, Université du Québec à Trois-Rivières, Trois-Rivières, Qc, Canada



Globalization, the internationalization of markets, the knowledge economy, and e-business are among the interrelated phenomena whose emergence poses new challenges for the survival and adaptation of small and medium-sized enterprises (SMEs). For the various public and private organizations such as government agencies, universities and consulting firms that constitute the development infrastructure for these enterprises, the issue that thus arises is the elaboration of policies, programs, and services that respond to the new competitive exigencies of SMEs in the changing business environment. Hence, it is essential to detect trends and understand strategic issues that stem from a global knowledge economy, that is, through business intelligence activities by which the economic, technological, and social environments of SMEs are scanned. This article proposes a conceptual and operational framework to this end. For analytical and operational purposes, these trends are grouped under four business intelligence themes as follows: a) the transformed management of the value chain and new organizational forms, b) information technologies, information systems, and e-business as sources of added value and vectors of competitiveness, c) the opportunity to develop new markets in a context of internationalization, and d) the development of human and intellectual capital, diffuse innovation, and organizational learning.


A Field Research on the Effects of MIS on Organizational Restructuring

Dr. Cemal Zehir, Gebze Institute of Technology, Istanbul, Turkey 

Dr. Halit Keskin, Gebze Institute of Technology, Istanbul, Turkey 



In this paper, the changes that resulted from the adaptation of the developments in information technologies in reconstructing companies have been tried to be researched. In this context, the relations between the enterprises’ goal to adapt their organisation structure, the activities to make the use of MIS widespread during this process, the influences of MIS on in-company activity and processes and the objects of improving the financial performance and competitive ability by using MIS which has been developed by using information technologies have been researched. This paper also includes a field research carried on the first 250 manufacturing companies. As a result of this research findings that may contribute to the theoretic knowledge’s have been found. The emergence of the restructuring concept in the organizations can be understood by examining the history of organizational development. Restructuring actions focused on the ideal bases of the classical administrative trend towards specialization and departmentalization couldn’t answer expectations of the customers in the transformation process from industrial society to knowledge society. The concepts of quality, low costs, and continuous improvement, answering customer expectations in a shorter time have become the most important concepts in the information society period. Organizations structured in classical ways couldn’t adapt to customer expectations because of the communication problems between departments.


A Comparison of Leading Central Banks and Their Effectiveness Using the

Discount Rate as a Monetary Policy Tool

Dr. Samuel B. Bulmash, University of South Florida, Tampa, FL



The actions or inactions of a central bank can have profound effects on the citizens of a given country that has a central bank, and impact their standard of living as measured by changes in gross domestic product, unemployment, and inflation.  How do leading central banks of the world compare in their organization, powers, and goals; and in their ability to affect macroeconomic indicators?  This study examines the impact of Discount Rate Policy by the central banks of three leading industrialized nations, one from each of the world’s major economic regions: The United States’ Federal Reserve System, United Kingdom’s Bank of England, and Japan’s Bank of Japan.  This paper begins by describing the basic organizational structure, monetary policy tools, supervisory and regulatory powers, payment system, and various services of each central bank.  Table I below summarizes several key aspects of each bank, and Section I provides essential details.  With this insight and background, we formulate our hypothesis, stated in Section II, asserting which one of the aforementioned central banks exhibits the most power and influence over its nation’s economy by using a key monetary tool, the discount rate.  Next, in Sections III and IV, we test our hypothesis by statistically deriving correlations between each bank’s discount rate and various macroeconomic indicators of each economy, and comparing these correlations.  Finally, in Sections V and VI, we summarize and discuss our findings, and draw important conclusions.  Ultimately, it is the authors’ hope that this paper will shed light upon central bank control and consequent economic performance. Congress founded the Federal Reserve System in 1913 in response to the economic crises and financial panics that had plagued the nation for the prior 50 years. 


Partners, Resources, and Management Mechanisms of Inter-organizational Collaborative

Ties in Non-profit Organizations

Dr. Tzu-Ju Peng, Providence University, Taichug, Taiwan

Postdoctoral Fellow, J. L. Kellogg School of Management, Northwestern University, IL



Relevant theories of cooperative strategy primarily apply to the private sector rather than to non-profit organizations (NPOs). The purpose of this study is to explore the relationships among different partners, resources inputs, and management mechanisms adopted by each inter-organizational collaborative tie. Derived from resource-based view, four questions were proposed and were further examined via both qualitative and quantitative methods. Empirical results demonstrate that: First, within the inter-organizational collaborative ties in NPOs, the resources provided by private business are not different from those provided by public institutions. As well, the resources available to private business are not different from those available to public institutions. Second, management mechanisms adopted by NPOs did not significantly vary with different partners but significantly vary with different resources that contributed to the inter-organizational cooperative relationship. The dramatic competitive environments usher in the time of collaborative strategies. Although the inter-organizational strategy has became a more important issue, few articles focus on the topics of management mechanisms adopted by these inter-organizational relationships. Furthermore, relevant theories and empirical researches in management were primarily applied to the private sector rather than to the non-for-profit sector.


Agency Cost Control

Dr. Richard H. Fosberg, University of the Incarnate Word, San Antonio, TX

Dr. Sidney Rosenberg, University of North Florida, FL



In this study, we seek to ascertain whether certain mechanisms found by Ang, Cole, and Lin (2000) to control agency costs in small firms are also effective in controlling large firm agency costs.  We also investigate whether another agency cost control mechanism not tested by Ang, Cole, and Lin, a dual leadership structure, is also effective in controlling agency costs.  Our analysis indicates that a dual leadership structure, greater share ownership by the firm's CEO, and greater share ownership by blockholders are all effective in controlling a firm's agency costs.  These mechanisms reduce the selling, general, and administrative expense to sales ratio of our sample firms and/or induce better asset utilization by the firm (as measured by the firm's sales to total assets ratio).  There is some weak evidence that greater share ownership by other officers and directors may also be useful in controlling a firm's agency costs.  For many years, agency theorists have recognized that the separation of ownership and control common in most corporations creates conflicts of interest between a firm's managers and shareholders.  These conflicts (agency problems) arise because managers have the opportunity to use the resources of the firm in ways that benefit themselves personally but decrease the wealth of the firm's shareholders. 


Determinants of on-Board Retail Expenditures in the Cruise Industry

Dr. Elise Prosser, University of San Diego, San Diego, CA

Dr. Birgit Leisen, University of Wisconsin, Oshkosh, WI



The cruise vacation industry is projected to be almost $100 billion by 2005 as 9 million passengers go aboard each year. Faced with increased competition and shaved profit margins, cruise vacation marketers increasingly rely upon on-board tourist expenditures to provide supplemental revenue. Hence, identifying determinants of retail expenditures in on-board shops is critical. First, the authors propose hypotheses relating average daily on-board retail expenditures per person to vessel, voyage, and tourist characteristics: number of passengers, daily retail operating hours of the shops, type of ship, number of stores on-board, travel season, cruise destination, length of cruise, and average age of passengers. Next, regression analysis is employed to test the hypotheses and to determine the significance of each variable. Managerial implications and future research are discussed. There were almost nine million cruise vacationers in 2002, a 15.5% increase over 2001.There are more than twenty-five cruise lines worldwide employing a 97% average utilization rate. (CLIA 2003). Cruises are popular because they combine mode of travel with entertainment, gourmet cuisine, gambling, and sight seeing at ports-of-call all over the world. However, due to increasing competition among cruise marketers, greater price-sensitivity among consumers and the recent downturn in the economy, profit margins have steadily been shaved. Consequently, cruise marketers rely on on-board retail expenditures to provide supplemental revenue.  


Antidumping War Against China and the Effects of WTO Membership

Dr. Nadeem M. Firoz, Montclair State University, Upper Montclair, NJ

Dr. Ahmed S. Maghrabi, Arabia Consulting Group



The first dumping lawsuit against China came in 1979 when Europeans accused Chinese saccharin manufacturers of dumping.  Since them, China has become a common target of dumping charges for most of its major trading partners.  More than 422 cases have been brought up against Chinese enterprises involving more than $10 billion worth of products.  This represents only a small portion of total exports of China, but the negative effect to some Chinese industry has been devastating.  Chinese TV manufacturers know for experience how dumping charges can bring down one of the strongest industries in China.  With a 44.6 percent antidumping tax on color TV from China, the European market has completely closed its door to Chinese TV manufacturers.  One of the major reasons for these attacks is the non-market economy status that China has.  Contrary to a market economy, in a non-market economy the state has a major influence in production cost and the final price of goods.  The government provides some companies with subsidies and tax benefits that put foreign competitors in a disadvantage.  Some countries like the United States claim that because of this situation China is able to sell its products at prices well below normal value.  This is considered dumping and it is condemned by the World Trade Organization (WTO).  On the other hand, Chinese companies claim that they are able to sell at prices below most of its competitors because of lower labor costs and not having to comply with environmental standards. 


Computer Access and Utilization Patterns Among Older People

Dr. Mustafa Kamal, Central Missouri State University, Warrensburg, Missouri

Dr. Godavari D. Patil, University of North Texas, Denton, Texas



The purpose of this study is to ascertain whether computer technology has significant influence on older people’s adoption of computers in day-to-day life. A total of five hypothesis and five sub-hypothesis are tested. We find that that persons with higher educational level generally owned computers at a higher proportion than did those with less education, that there is no relationship between the educational level of the respondents and the means used for learning computer skills, that there is direct correlation between income and purchase of computers, that there is not much difference among the respondents regarding their responses about making a career in computer field, and that as the age of the respondents increase, the use of computers decreases. We also found that most of the respondents had access to computers and used computers and the Internet profusely, especially as a means of communication to keep in touch with family and friends and to gain access to information on various aspects of life. There is a great need for older people to become computer literate in order to lead an independent life.  Various organizations and companies are making efforts to encourage older people to acquire computer skills in order to keep them as active members of society. As a result, increasing numbers of older people are not only buying computers but also learning how to use them in order to satisfy their varied needs. Computer technology has become one more components in a senior's survival skills. 


The Impact of Globalization on Cultural Industries in United Arab Emirates

Dr. Mohammad Naim Chaker, University of Sharjah, Sharjah, United Arab Emirates



Cultural industries have come to be included in a distinct sector where the creation, production and marketing of goods and services are combined. Cultural industries include media organizations, film production, audiovisual sphere, the print output, multimedia sector, architecture, performing arts, plastic arts, and cultural tourism (UNESCO, 2000). Cultural industries produce consumer goods that convey lifestyles and values with both an informative and entertainment function, and cultural services that cover intangible activities such as the promotion of the performing arts, films, and values.  According to the UNESCO report (2000), between 1980 and 1998, international trade in cultural goods increased five-fold. Interestingly, in 1990, 55 percent of world’s exports of cultural goods involved just 4 industrial countries (Japan, USA, Germany and the UK). In the same year, western countries such as France, UK, Germany and the US accounted for 47 percent of global import-flows of cultural goods. In recent years, China has emerged as a major player in the international trade arena, exporting a very large number of cultural products.  In 1996, cultural products occupied top spot in the hierarchy of US exports. In fact, the US earned US$60.2 billion from the exports of cultural products leaving behind such traditional export sectors as automobiles, agriculture, aerospace and defense. Conspicuously, the copyright-based cultural industries in the US put up growth rate three times as fast as the annual growth rate of the GDP (IIPA, 1998). These numbers clearly confirm the widespread belief that cultural industries, particularly in the west have been spreading their wings far and wide.


Restructuring Japan's Banking Sector to Avoid a Financial Crisis

Dr. Jennifer Foo, Stetson University, Deland, FL



Japan's banking sector is in a crisis despite the denial of the Japanese authorities.  When banking problems are unresolved the financial system distorts the allocation of credit and undermines the intermediation functions leading to economic imbalances.  Political paralysis and indecisions have characterized the Japanese policy makers in resolving the banking crisis.  The results are huge government spending and unprecedented budget deficits while income growth continues to shrink as the economy deflates.  This paper examines the causes of the decade-long Japanese banking crisis and the policy and restructuring efforts.  Lastly, I suggest policy recommendations to avoid a full-blown financial crisis.  Banking crises are widely viewed as particularly pernicious and damaging because of their possible contagion effect to other financial functions and markets as documented in numerous literatures (Garcia-Herrero 1997, Honohan 1997, Demirguc-Kunt and Detragiache, 1998, Peria 2002).  Financial inefficiencies manifest themselves primarily in three harmful ways.   First, financial instability discourages capital lending and investment leading to recession and deflation.  Second, capital contraction denies healthy companies the opportunities to grow, adversely affecting the real sector and the economy.  Third, savers are denied saving opportunities with close to zero rates of return, lowering consumer confidence and spending leading to recession.  The Japanese banking crisis has threatened to develop into a national financial crisis that will have adverse implications not only for the Japanese economy but because of Japan's status as the world's second largest economy, also for the global economy as well (Sugisaki 1998, Kurlantzick 2001). 


Attitudes Toward the Management of International Assignments- A Comparative Study

Lan-Ying Huang, The Overseas Chinese Institute of Technology, Taichung, Taiwan



The era of hypercompetition (D’Aveni, 1995) has stimulated most international organizations to pay increased attention to cost reduction and cost effectiveness for employees transferring between countries. This article summarizes practices espoused by most researchers and commentators on the management of international assignments. Attitudes on practices of international assignments were tested through a survey of employees and executives in the international firms.  The survey results reveal that, between two groups, there are no different attitude on pre-assignment training, continuing support, assignment for younger assignees, opportunities for career advancement, and a repatriation agreement, while only the duration of assignment shows significant difference. There is now a mature literature on the management of international assignments (IAs) within the broader field of the internationalization of organizations. Research in the management of international relocation within the field of internationalization of organizations has looked at: high expatriate failure rate (Tung, 1981; Black & Gregersen, 1991; Alder & Bartholomew, 1992; McDonald, 1993; Dowling, Schuler & Welch, 1994; Ralston, Terpstra, Cunniff & Gustafaon,1995); the significance of pre-assignment training (Dunbar & Katchen, 1990; Brewster & Pickard, 1994; Katz & Seifer, 1996); expatriate adjustment to a foreign country (Black, 1988, 1990; Black & Mendenhall, 1991; Black & Gregersen, 1991; Black, Mendenhall & Oddou, 1991); the impact of international relocation on dual-career couples and family members (Harvey, 1985, 1995, 1996, 1997a, 1997b; Punnett, Crocker & Stevens, 1992;Handler, 1995; Baliga & Baker, 1995); and the role the family plays in international relocations (Forster, 1992). 


Use of Value Line Investment Survey in Teaching Investments

Dr. Bryan H. Chen, National Changhua University of Education, Taiwan



The Value Line Investment Survey is one of the most famous and widely used sources of financial database and investment information for teaching finance students in the United States. However, this database is pretty new to Taiwanese students. This paper describes the experience of using Value Line Investment Survey database in the teaching of investments in a large College of Technology and Vocational Education in Taiwan. The selected university is the only university that owns Value Line Investment Survey database in Taiwan so far. The purpose of this exploratory study was to assess the student perceptions to this innovative approach in teaching of investments at this university. The findings of this preliminary investigation seem to felt that Value Line Investment Survey database should be made an integral part of instruction in the finance curriculum in Taiwan. Much has been investigated about whether the use of computer-aid learning in financial education is enough for helping students’ learning in the United States (Kamath, Pianpaktr, Chatrath, & Chaudhry, 1996). For example, Clinebell and Clinebell (1995) surveyed 241 chairs of finance departments at American universities and found that computer-aid learning was widely available at The Association to Advance Collegiate Schools of Business (AACSB) member schools.


The Challenges of Teaching Statistics in the Current Technology Environment

Dr. William S. Pan, University of New Haven, West Haven, CT



In today’s constantly changing world, as everything else, teaching and learning are also changing. The teaching methods, the technology even the student’s learning habits are changing. One can therefore predict that the most effective teaching method used to make the students learn better and that the technology which enables the content information easily accessible to student will certainly become more popular and widely adapted over time. In the academic world, computer technology is rapidly changing the ways Statistics courses are taught. Most statistics courses now have computer exercises. As professors and scholars, we have to face this new technology challenge. We have to manage this dynamic changing and evolving new environment. In our paper, the strengths of the Web-based education and the pitfalls of teaching an online statistical course will be discussed. Web-based online course teaching and learning means different things to different people. One can defines the Web-based education as a rational communications network that transfers the regular classroom activities into a cyber environment, in which the physical interaction between the instructor and student is not visible and required. One can also define the online course delivery as software related teaching and learning environment, which does preserve the custom-designed learning for an individual student.


Determinants of Municipal Bond Closed-End Fund Discounts

Dr. Ronald J. Woan, Indiana University of Pennsylvania, Indiana, PA

Dr. Germain Kline, Indiana University of Pennsylvania, Indiana, PA



The objective of this study is to investigate the potential determinants of cross-sectional variation of fund discounts/premiums for the two largest closed-end fund types: national and single-state municipal bond closed-end funds. Some researchers argued that municipal bond closed-end funds, due to their tax-exempt status and the resulting short-sale restrictions, should generally be selling at premiums. However, our current samples show that the overwhelming majority of municipal bond closed-end funds were consistently selling at discounts, with the average discounts highly significantly different from zero. However, the average discounts are lower than the average discounts for non-municipal closed-end funds reported in the literature. Our current research results also indicate that the potential determinants of fund discounts/premiums consist of both accounting data and market data. There is striking similarity of the behavior of fund discounts among equity, non-municipal and municipal bond funds. This similarity is at once surprising and encouraging, and could potentially facilitate future theoretical developments. Both closed-end funds (CEF) and the more popular open-end funds (OEF) are investment companies whose assets are a diversified portfolio of publicly traded stocks and other securities that they own and manage.  When a CEF is organized, a fixed number of shares are issued at an initial public offering (IPO). Those shares are then traded in the secondary market. An OEF, by contrast, issues additional shares to each investor. Investors who desire to sell their open-end shares actually have their shares redeemed by the fund.


Effects of Introducing International Accounting Standards on Amman Stock Exchange

Dr. Mufeed Rawashdeh, Central Washington University, Ellensburg, WA



This paper examines the effects of introducing international accounting standards on Amman stock exchange. Using a sample of 18 adopting firms and 33 non-adopting firms from Amman Stock Exchange over the period 1989-1990, the study regresses the cumulative abnormal return (CAR) of the year of adoption on Unexpected earnings, Unexpected changes in debt ratio, and an indicator variable (1=adopter and 0=non-adopter). The results of the study reveal a significant impact on stock prices of adopting firms compared to nonadopting firms. This means that International Accounting Standards provided extra information beyond the so-called local Jordanian standards.  The results were more significant for the smaller firms. The results give evidence of the value of International Accounting Standards for investors and give further impetus towards international accounting harmonisation.  Jordan, like many other developing countries, had an incomplete and incomprehensive set of accounting standards, which were developed on piecemeal basis as a reaction to solve an emergency or serve an immediate need. Jordanian accounting standards were mostly very general statements lacking any itemization or guidelines for measurement and reporting. For example, the Companies’ Act of 1989 requires Jordan companies to prepare annual reports in accordance with Generally Accepted Accounting Principles (GAAP). However, there was no law, interpretation or discussion on what constitutes GAAP. Similarly, Amman Stock Exchange (known then as Amman Financial market (AFM)) and Income tax authorities required companies to maintain accounting books and provide financial statements; again no instructions were provided on both form and contents. 


An Analysis of the Racketeer Influenced and Corrupt Organizations Act (RICO) as a

Control Mechanism for Business Activity

Dr. William Neese, Bloomsburg University of Pennsylvania, Bloomsburg, PA



The Racketeer Influenced and Corrupt Organizations Act (RICO) has become one of the most important laws affecting business activity today, and these statutes have proven to be multidimensional and extremely flexible in criminal or civil applications.  Legal business entities have vicarious liability for acts committed by individuals within that organization whether anticipated or not, so management should be cognizant of RICO issues.  The purpose of this study is thus to provide a thorough background discussion of the law.  Specifically, an analysis of one set of cases attempting to control marketing activity is conducted to classify and discuss RICO scenarios for strategic and tactical consideration. The Racketeer Influenced and Corrupt Organizations Act (hereafter referred to as RICO) was originally intended as a mechanism to thwart organized crime, yet due to its broad language, multiple predicate acts, and civil as well as criminal provisions has become one of the most important legal-regulatory influences impacting business entities today (Cheeseman 1995; Feldman 1998; St. Laurent 1997).  The use of civil RICO to "resolve ordinary commercial disputes arising between perfectly reputable business firms" (Brickey 1995a, p.485) has exploded since the early 1980s, and these cases are mostly based on some form of commercial fraud (Feldman 1998).  This escalation has alarmed many expert observers due to the serious nature of potential penalties, including divestiture of ownership, restrictions on future investment and/or management activity, treble damage awards to successful plaintiffs, and even business reorganization or dissolution (Feldman 1998; Luccaro et al. 2001).


Chinese Consumer Behavior: A Cultural Framework and Implications

Dr. Wen Gong, Rochester Institute of Technology, Rochester, NY



Although consumer decision making remains a focal research interest (Bettman, 1998), international marketers continue to need a better understanding of cross-cultural issues and their effects on decision making. This paper explores the impact of Chinese culture on each stage of Chinese consumers' decision making process. Then, a preliminary analytical framework is developed for international marketers in their conceptual rethinking and management decision making when marketing in China. Potential implications are derived and discussed. The need for greater cross-cultural understanding of consumer behavior has been proclaimed by both international marketing practitioners and researchers as essential for improving international marketing efforts (Briley et al., 2000; Hampton and Gent, 1984; Leach and Liu, 1998; McCort and Malhotra, 1993). Research has shown that differences in value systems across various cultures appear to be associated with major differences in consumers’ behavior (Grunert and Scherhorn, 1990; Lowe and Corkindale, 1998; McCracken, 1989; Tansuhaj et al., 1991).  With its one billion plus population, China has the greatest number of consumers in the world. It has achieved tremendous economic growth since the adoption of the open-door policy in 1978. As a result of the market reforms, and because of the sheer market size it presents, China has increasingly become a coveted market. Joining WTO will make China ever more interconnected to the global economic system. These factors warrant an increase in research attention to this market.


Research on the Relationship Between Market Orientation and Service Quality--

An Empirical Assessment of the Medical Industry in Central Taiwan

Ya-Fang Tsai, National Yunlin University of Science & Technology, Taiwan, R.O.C.



Since people in Taiwan have gradually been paying more and more attention to the quality of health care service, it has become ever so more important to improve and maintain the quality of hospitals. One of the probable quality-improve-project to emphasize the concept of market orientation of clinical members. Because nurses are at the forefront in providing health care, they were selected, as the subjects of this study. In this study, we used the structural questionnaires in consulting with nurses in five hospitals in central Taiwan to investigate their attitudes and relation between the concept of market orientation and their service quality they provide. Questionnaires were completed in August 2002, and from the 200 sent out, 145 were returned, of which 131 were usable, making for an effective questionnaire feedback rate of 65.5. This study clearly points to a positive relation between the concept of market orientation of nurses and their service quality. Besides this, the operation style of a hospital is an important factor which affects their views to market orientation.  In recent years, on account of the carrying out of some parts of Taiwan’s health care policy, the health care industry in Taiwan has been under increasing competitive pressure. Faced with this environment, there is a greater need for hospital executives to understand their patients’needs, and incorporate customer orientation and market-driven forces into their marketing strategiesMohr, 2001.


Adoption of e-Governance: Differences between Countries in the Use of Online Government Services

Dr. Satya N. Prattipati, University of Scranton, Scranton, PA



The emergence of digital economy has affected the functions and roles of the governments.  The advent of e-government has been one of the main impacts of Information and Communication Technologies (ICT) on the Governments.  Many governments have realized the importance of ICT to bring efficiency and transparency to the functioning of the governments. While many governments have started offering some government services through the Internet, there is a significant variation among countries in the actual use of these services by the citizens.  Governments cannot realize the potential benefits of e-Governance unless the people use them. This study attempts to identify the factors that influence the use of e-Governance services by analyzing the differences between countries with varying degrees of use of online services offered by the governments.  The results identify four factors that are significantly associated with the use of online government services. By concentrating on these factors, the governments can make more people use online services offered by them. e-Government can be broadly defined as the use of Information and Communication Technologies (ICT) to improve the activities government organizations (Heeks,2002). However, some definitions restrict e-Government to Internet-enabled applications only.  This paper uses the later definition.  There are three main domains of e-Government: Improving government processes (e-Administration), Connecting citizens (e-Citizens and e-Services), and Building external interactions (e-Society).  The focus of this paper is on  connecting citizens (e-Citizens and e-Services). Such e-Services deal with the relationships between government and citizens. 


Perceptions of Effectiveness - A Study of Schools in Victoria, Australia

Martin Samy, Monash University, Victoria, Australia



A quantitative effectiveness measurement based on the perceptions of a group should be an effective mode of evaluating the level of satisfaction. This study establishes such a measurement in relation to school effectiveness through the Quality Situation Assessment Instrument. In order to measure the level of effectiveness perceived by their communities, educational institutions can use this instrument to calculate the Quality Effectiveness Index.  This pilot project provides evidence that perceptions of school effectiveness might not necessarily be associated with Student Achievement Data.  This paper is based on a pilot project, which was undertaken as part of a wider study. The study examines the concept; ‘perceptions of effectiveness’ and uses data from school communities in Victoria, Australia. The paper introduces the reader to the system of education in Australia. The focus is on the state of Victoria and its catholic and state systems ‘School of the Future’ reform program. The research component of this paper analyses the Quality Effectiveness Index (QEI) of 6 schools selected across the educational regions in Victoria. QEI is a quantitative measurement of the perceptions of effectiveness of individual schools and is based on an established instrument (Poston: 1997) modified substantially for use in Australia. The first hypothesis is to acknowledge that there is no expected significant difference in the perceptions of effectiveness of school community participants between the perceptions of effectiveness between schools in the state and catholic systems in Victoria.


The Influences of Personal and Sociological Factors on Consumer Bank Selection Decision in Malaysia

Che Aniza binti Che Wel, Universiti Kebangsaan Malaysia, Malaysia

Sallehuddin Mohd. Nor, Universiti Kebangsaan Malaysia, Malaysia



The authors discuss the influences of personal and sociological factors in the consumer bank selection decision in Malaysia (an Oriental Culture), where the family and social relationship are still highly valued. The study found that personal factors have greater influences in bank selection decision compared to sociological factors. Under the present environment, almost everyone is involved with a bank, one way or another, in our financial dealings and economic activities. In his personal capacity, an individual may require the services of a bank to cash his pay cheque, apply for a cashier's order (or banker's cheque) or a demand draft for a share issue, send money to someone locally or overseas by way of demand draft, mail transfer or telegraphic transfer, open or maintain a current account or savings account, place Certificate of Deposits, secure a housing loan for purchase of a house for own residence, or even secure personal loan or an overdraft for investment purposes. Thus, the services of banks are necessary for our daily economic and financial activities. According to digested surveys from various industry resources, about 59 percent of American households have a "one-account relationship" with any single bank. The percentages are higher for savings and loans (S&L) and thrifts, lower for credit unions. This estimate excludes "ATM card ownership" as a product (Violano and Collie, 1992). The same phenomenon may hold true in Malaysia. It is, therefore, before such relationship can be developed, it is important that we should understand the factors that influence the consumer bank selection decision.


Employee Expectations and Motivation: An Application from the “Learned Helplessness” Paradigm

Dr. Steven B. Schepman, Central Washington University/Ellensburg and Lynnwood, WA

Dr. F. Lynn Richmond, Central Washington University/Ellensburg and Lynnwood, WA



The effects of a perception of “helplessness” on a person’s sense of “self-efficacy” and situational control were analyzed in the context of the first of the three key relationships in the process motivation theory of Victor Vroom. Perceptions of levels of helplessness were manipulated in an experimental design using random, non-contingent feedback and failure on an initial task.  Subjects’ level of perceived ability and control on a second task were assessed prior to beginning the subsequent task.  Statistically significant differences were found between the levels of helplessness groups and the control group on perceptions of control as well as perceived ability to accomplish the second task (“self-efficacy”). The implications of such lowered perceptions of control and/or “self-efficacy” by members of organizations are discussed. The “learned helplessness” concept of individual psychology essentially holds that if the outcomes or “feedback” people receive in response to their actions appear to bear no predictable relationship to the actions which initiated them the initiators, in time, will come to believe that they are unable to control the outcomes associated with their own behaviors. Mikulincer (1994) specified two distinct reactions which can be associated with expectations of future control or lack of control.


Holding Cost Reduction in the EOQ Model

Dr. Peter J. Billington, Colorado State University – Pueblo, Pueblo, CO



The introduction of a capital expense to reduce the setup cost has expanded the classic EOQ model into numerous new research insights.  The original intent of that research was to reduce the order quantity to better fit the JIT lean manufacturing model of setup reduction.  In this paper, the EOQ model is further studied with a reduction in the per unit holding cost to determine if total cost can be reduced, even though the order quantity is increased.  Results show that the total cost can be reduced under specific situations.   This new model is combined with previous research on setup cost reduction to show that further total cost reduction is possible. The classic economic order quantity model (EOQ) is often studied as a way to analyze the trade-off between setup and holding cost to minimize total annual cost of holding inventory and setup (or ordering).  With the publication of two seminal articles (Porteus, 1985 and Billington, 1987), the EOQ model was expanded to include a capital expense to reduce setup costs. This new model was in line with and helped explain the practice of setup reduction, necessary for JIT systems to work effectively by allowing a more economical, smaller order quantity.  The resulting series of research on setup reduction includes articles by Spence and Porteus (1987), Paknejad and Nasri (1988), Nasri et al (1990), Kim et al (1992), Hong et al (1992), Hong et al (1993), Hong et al (1996), among others.  The remaining component of the EOQ that has not been studied is the holding cost, which includes the cost of funds invested in inventory, the storage facility, handling inventory, insurance, taxes, obsolescence, spoilage, deterioration and theft (Heitger, 1992). 


Differences in Environmental Scanning Activities Between Large and Small Organizations:  The Advantage of Size

Dr. Karen Strandholm, The University of Michigan-Dearborn, Dearborn, MI

Dr. Kamalesh Kumar, The University of Michigan-Dearborn, Dearborn, MI



The purpose of this study is to examine the environmental scanning differences between large and small organizations and their performance implications.  Results from the data collected from 221 hospitals indicate that smaller organizations do not scan as broadly and as frequently as their larger counterpart.  Results also indicate that there is an association between an organization’s scanning activities and organizational performance, both in larger organizations as well as smaller organizations.  These findings, taken together, appear to indicate that the decreased scanning activity may place the smaller organizations at an information disadvantage, and hence competitive disadvantage, relative to the larger organizations. Environmental scanning provides organizations with information about opportunities and threats that could enhance their performance or threaten their survival (Beal, 2000; Bourgeois, 1980; Daft, Sormunen, and Parks,. 1988; Lang, Calatone, and Gudmundson, 1997).   In order to capture the relevant information from the environment in a timely manner, managers must make a determination as to environmental scanning scope and environmental scanning frequency.  As an organization’s environmental scanning scope increases, so does the information available to identify opportunities and threats (Beal, 2000; Jackson and Dutton, 1988).  As environmental scanning frequency increases, so does the amount, timeliness, and relevance of this information (Beal, 2000; Hambrick, 1982).  


Intellectual Accounting Scorecard - Measuring and Reporting Intellectual Capital

Indra Abeysekera, Dynamic Accounting, Sydney, Australia



Several indicators are constructed to measure intellectual capital at organisational level and at item level. The majority of models constructed so far have not established the link between individual intellectual items and organisational intellectual capital performance. The few models that establish such a link demand significant management time to monitor them, or have established indices outside the traditional accounting system.  The Intellectual Accounting Scorecard integrates intellectual capital measuring and reporting into mainstream traditional accounting reporting. Firstly it identifies each intellectual capital item as an intellectual revenue and intellectual expenses having an impact on the statement of income, or as an intellectual assets and intellectual liabilities having an impact on the balance sheet. Secondly, it constructs ratios to monitor operational and strategic performance.  Although there is ambiguity as to whether intellectual capital represents all intangibles, the more popular definitions indicate that they refer to intangibles not recognised in the financial statements. A study in 1997 of top Canadian and US organisations reveals that non-financial will be the key to business success in the future. The organisations identified five broad categories to measure performance, and they are customer service, market performance, innovation, goal achievement, and employee involvement. The most commonly used performance measure in firms was customer service and market performance. The firms tend to rely on non-financial measures that have been used for some time and indicated that they rely less heavily on measures related to reputation, know-how, information systems, databases, and corporate culture although they play an increasing importance in the future to ascertain the performance of a firm (Stivers, Covin, Hall, & Smalt, 1997).


Insights into Malaysian Consumers’ Perceptions of Products Made in the USA

Dr. Mohammad Sadiq Sohail, King Fahd University of Petroleum & Minerals, Dhahran, Saudi Arabia

Dr. Syed Aziz Anwar, University of Sharjah, United Arab Emirates



This paper examines the country of origin effects of products made in the United States. The study focuses on the questions of the sources of information in evaluating products; the evaluation of specific product dimensions by Malaysian consumers, and consumers’ assessment of different product categories. Results based on an analysis of data relating to 240 responses indicate that the most common product information source was found to be through packaging of products. Products made in the United States had been rated highly for their competitive prices. Electrical appliances were generally found to be the most highly rated product category by Malaysian consumers.  Consumers in developing countries have a range of options while buying products. The impact of country-of–origin ( in terms of the country of source or manufacture and country of brand )  on  consumers’ perceptions of products has been widely examined and analyzed by marketing researchers for nearly four decades now  ( Schooler, 1965; Samiee, 1994; Peterson and Jolibert, 1995). Behavioral researchers in the area of marketing have made incessant efforts to gain deeper insights into the perceptual decisions made by consumers. First, it has been highlighted in the literature that country-of-origin may be used by consumers as an attribute to evaluate products (Johansson et al., 1985; Hong and Wyer, 1989). Second, consumers’ attention and evaluation of other product dimensions may be influenced by, which may create a ‘halo effect’ (Erickson et al., 1984; Han, 1989). Third, country-of-origin may also act as a source of country stereotyping, thereby directly affecting consumers’ attitudes towards the brand of a country instead of attribute ratings (Wright, 1975).


The Impact of the Gramm-Leach-Bliley Act, - Disclosure of Nonpublic Personal Information

on the Financial Institution and the Consumer

Mark S. Puclik, J.D., University of Illinois at Springfield, IL



On November 12, 1999 President Bill Clinton signed into existence the Gramm-Leach-Bliley Act. This act changed the face of the financial industry as drastically as its predecessor that it was repealing, the Glass Steagal Act of 1933.  To the common observer at the time the Act was a major tool in allowing more marketability and flexibility in the financial industry, especially that relating to commercial banks and holding companies, because of the stringent standards that the Glass-Steagal Act placed on them since the great depression.  For almost seven decades it was illegal for a bank to offer securities, investment, or insurance products as a service or division to their customers.  There were pioneering institutions that found “loop-holes” in the law and offered these products on a limited basis.  The main contention as to why Glass-Steagal had survived for so long without repeal was the distinction that FDIC brought to a deposit with a bank and that of an investment. Does the Gramm-Leach-Bliley Act make sure that each customer understands the nature of the act its intent to protect him or her?  Seemingly, the Gramm-Leach-Bliley allowed banks to do what investment firms had been doing for decades, serving the needs of persons desiring to take a different route financially than bank deposits.  With the repeal of the Glass Steagal a commercial bank through a third party investment firm could have a fully functioning full service investment and insurance department located in the bank.


Comparative Performance Measures and Information Dissemination Process of several Euro- Asian Equity Markets

M. T. Vaziri, Ph.D., California State University, San Bernardino, CA



Some of the equity markets in Asia has been established for a long period of times. For example, widespread sovereign borrowing got under way in the late 18th century, when the spread of constitutional forms of government led to more stable nation states that recognized continuing liabilities to lenders, so by 1866, some form of stock markets were operating in a country like Turkey. Net private flows into the emerging markets did not pick up again until the early 1990s. But the recovery thereafter was swift, with net inflows rising from $12 billion in 1988 to more than $100 billion by 1991.  According to Boston-based Pioneering Management Corp. statistics, over the 50 years through 1995, emerging-market equities showed average annual returns of 16.5%, compared with 12.4% for the Standard & Poor's 500-stock index and 11.8% for the EAFE index.  As a category of equity investment, emerging markets may be considered to have begun in 1986 under the sponsorship of the International Finance Corporation, an arm of the World Bank.  For more than a decade stock markets have boomed in just about every country. From 1984 to 1994 the capitalization of world stock exchanges grew fivefold to a combined $18 trillion. Investments in emerging markets can result in spectacular returns, positive or negative. But picking potential winners, at the level of either country or company, is very difficult. It is clear that emerging markets carry considerable risks, including liquidity, lack of transparency, and sharp swings in prices. 

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