The American Academy of Business Journal

Vol.  4 * Num.. 1 & 2 * March  2004

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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Urban Sprawl: Myth or Reality?

Dr. Tyler Yu, Mercer University, Atlanta, GA

Dr. Victoria Johnson, Mercer University, Atlanta, GA

Dr. Miranda Zhang, Mercer University, Atlanta, GA



Urban sprawl has become a symbol for a number of social and economic maladies plaguing the public and private sectors, as well as a target for those wishing to cure those contemporary ills.  Perspectives differ on whether it should be contained, encouraged or ignored.  This paper discusses differing viewpoints and consequences of the ancient and ubiquitous conflict between growth and development and conservation and community.  In the United States, suburbanization and its corollary, urban sprawl, have increased dramatically and exponentially over the past twenty years.    To some observers, this transition has created a monster, which threatens the very heart of the legendary American dream.  As the country began its transition from an agricultural, rural economy to an industrialized, urban one, it was confronted with the inevitable social and economic challenges that occur with concentrated urbanization.  Historically, the beliefs that growth is a social good, and that bigger is better, have been central tenants of the American perspective. Undoubtedly, growth brings with it a concomitant increase in jobs, a thriving economy, and a larger tax base.  Theoretically, it also creates a more equitable distribution of benefits and burdens.  Consequently, as more affluence is obtained, citizens migrate out of a central city environment to outlying suburbs in an attempt to improve their quality of life.   It is then assumed that the good life will necessarily follow.   That is, the new environment will provide safety, clean air, privacy, pristine natural areas, and better educational systems.   However, in the waning years of the 20th century, this assumption was met with increasing skepticism.  And at the dawn of the 21st century, this skepticism has become a mainstream political concern, resulting in a frontal assault on the cherished beliefs. Empirical data, as well as anecdotal reports, describe too many cars for too few roads; increased pollution; failing schools; increased crime, and loss of the natural environment.  


Cited by: 4


Economic Growth In Transitional Versus Industrial Economies: A Case of the Baltic Sea Region

Dr. Tiiu Paas, University of Tartu, Tartu, Estonia

Dr. Egle Tafenau, University of Tartu, Tartu, Estonia

Dr. Nancy J. Scannell, University of Illinois at Springfield, Springfield, Illinois



This paper tests whether differences in growth factors exist between the transitional versus industrialized countries of the Baltic Sea Region. Model estimations indicate that significant growth factors are, unlike for industrial countries, in accordance with theory for transitional countries. Economic growth determinants are apparently dissimilar across the two groups. It is expected, however, that in light of ongoing processes of European integration and economic development of the transitional countries, these discrepancies will diminish. Economic growth, albeit attributed with exacerbating income inequality and environmental harm, is one of the salient aspects of economic development and, ultimately, is assumed to promote the enhancement of societal welfare. In this paper, economic growth is understood to mean the growth of real gross domestic product (GDP) or, alternatively, the growth of per capita GDP. The Baltic Sea Region (BSR) has become one of the most competitive economic regions in Europe in the recent decade. BSR countries are strategically situated vis-a-vis the leading world economies (World Competitiveness Yearbook, 2002). Due to its favorable location between the East and West and given the dynamics of interdependencies between its transition and integration phases, the BSR is poised for rapid economic growth. The literature underscores BSR's uniqueness as derived from its concentration of business activity, its high attainment of economic development, civilization and prosperity, and its non-homogeneity (Kisiel-Lowczyc, 2000; Peschel, 1998).  The BSR is composed of two characteristically distinct sets of countries. Estonia, Latvia, Lithuania, Poland and Russia constitute the transitional nations, while Finland, Sweden, Denmark, Norway and Germany comprise the industrialized nations of the BSR.


Cited by:


A Note on the Impact Managerial Styles Can Have for Service Marketers: Some New Insights

Dr. Chaim Ehrman, Loyola University Chicago, Chicago, IL



In the field of list selection for service marketing, mail order houses typically offer prospective renters a systematic sampling of names per list to estimate expected return rates. Direct marketing is an alternative to e-service marketing since one can reach a wider audience, i.e. those consumers whose computers are not attached to the Internet or simply do not use the Internet. These estimates are the basis for list selection. In this paper, it is shown through Bayesian Analysis how this selection can be modified to accommodate the risk prone, risk averse and risk neutral decision-maker.  There has been an increasing interest in customer data base marketing, both at the business to business marketing as well as the consumer marketing (Kotler and Armstrong , 2001). Don Peppers and Martha Rogers (1993) contrast the typical mass marketing effort versus one-to-one marketing. In the latter, there is much more information regarding the customer data base, such as demographics, preferences and customer profiles.  In Direct Marketing, there is typically an initial communication with the consumer. Subsequently, the marketing message is tailor-made for a very narrow market segment, known as your target market. The goal is receive a direct, measurable response from the consumer from this segment (Kotler and Armstrong, 2001).  Unfortunately, the primary focus of researchers has been on the needs of the customer, both as a consumer and as a business purchaser. However, there is another significant component in list selection that is overlooked in terms of deterministic decision style (Lee et al., 1981). It is known that management style can be risk prone, risk neutral or risk averse (Green, Tull and Albaum , 1988). Thus, the marketing managerial decision process that is used to determine which market segment should be targeted is a function both of what can be delivered in terms of want satisfaction, as well as the willingness of management to assume risk.


Cited by:


Using the Technological Readiness Audit sm for Strategic Competitive Advantage

Dr. Robin Widgery, Eastern Michigan University, Ypsilanti, MI

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

David Nicholson, Eastern Michigan University, Ypsilanti, MI



What is your company worth?  The human resources literature reminds us that the value of organizations consists of far more than those items on the balance sheet. How much value is represented in the abilities of your employees to work well as a team, to have good communication skills, to be well motivated, to know when to lead and when to follow?  Moreover, what is the value of highly skilled people in your company - people who know how to get the best results from the various technologies that are listed on the "hard" assets side of the ledger? Unlike assets that wear out over time, the value of these human resources, if managed wisely, can continue to grow year to year.  The continuous development of human resources should become a key element of every organizations strategic plan. Managed properly these resources can become a powerful competitive advantage. While some organizations relegate training and development activities to secondary status, these activities should be viewed as a critical strategic function that contributes directly to the bottom line, and has quick and sure impact on the company's competitive potency.  A strategic human resource development perspective should include the following planning components: (1) a plan fully integrated with the organization's overall business plan and its vision statement, (2) an employee development plan designed to meet the unique needs of the current and future organization and its various functions, (3) a plan created to anticipate changes in technological applications within the organization, (4) a plan designed to meet the competitive demands of the organization, and (5) a plan targe-ted to meet the individual training needs within specific functions and specific locations.  To accomplish all these criteria the Technological Readiness Auditsm was developed a few years ago for The Ford Motor Company's North American Operations. 


Cited by: 3


Auditing E-Business: New Challenges for External Auditors

Dr. Ahmad A. Abu-Musa, Tanta University, Egypt



Electronic Business (E-Business) is a dynamic set of technologies, applications, and business processes that link companies, customers, and communities through the electronic exchange of goods, services, transactions and information. E-Business technology is rapidly changing the way that companies buy, sell, and deal with customers and partners. E-Business is becoming an important business tool since many companies are using the Internet to conduct their business. The dramatic evolution of information technology and the continuous decline in prices encourage many companies to automate their accounting information systems and to adopt E-Business in order to gain competitive advantages in the market. E-Business brings new challenges to conventional external auditors and the audit profession. External auditors need to understand how the advanced technology affects their audit process. Adequate planning of E-Business audit procedures becomes critical because most of the audit evidence might be available only in electronic form. External auditors should be able to evaluate the adequacy and accuracy of the electronic audit evidence. External auditors need to judge the validity, completeness, and integrity of accounting records; and the ability of the company to satisfy the going concern assumption. External auditors should also acquire the technical skills necessary to audit E-Business and maintain independence to enhance the profession’s credibility. They should also explore the possibilities and opportunities of using information technology and data analysis software.


Cited by: 77


Making "Good" Decisions: What Intuitive Physics Reveals About the Failure of Intuition

Dr. Jeff W. Trailer, California State University, Chico, CA

Dr. James F. Morgan, California State University, Chico, CA



This study examines the intuitive accuracy that people achieve in predicting the motion of objects (intuitive physics). Policy capturing was used to identify each subject's judgment method.  Then, individual decision policies were dissected mathematically, using the Lens Model equation, to determine the source of judgment errors.  The results support previous research that finds intuitive judgments to be generally inaccurate, but goes further by diagnosing how intuition fails.  Should you trust your gut?  Bonabeau (2003) argues a cautionary “no,” however many articles have proclaimed the virtues of intuition in managerial decision making (Mintzberg, 1976; Harper, 1988; Agor, 1989).  Reasons for focusing on intuition include: an increased need for visionary thinking, inspired leadership, and complex imaging (Butts, Whitty, & McDonald, 1991), a need to understand how experts make decisions quickly (Simon, 1987), and a need to reduce reliance on time consuming systematic analysis (Behling & Eckel, 1991).  There is evidence that the role of intuition is being taken quite seriously, as many companies are paying to have their employees taught how to enhance their intuitive decision making (Agor, 1988; Block, 1990, Staff, 2002).  Thus, corporations are demonstrating a willingness to commit resources for the express purpose of enhancing intuitive decision making.   This makes the study of the efficacy of intuition relevant to the current needs of industry.  Classical economic theory assumes that decision makers follow a rational process (Simon, 1955).  However, other research has shown that cognitive biases often affect the decision process, resulting in inconsistent, non-optimal and faulty decisions (Edwards & Winterfeldt, 1986). 


Cited by: 15


Agency Theory, National Culture and Management Control Systems

Dr. Samson Ekanayake, Deakin University, Victoria, Australia



Management control system of an organization is the structured facet of management, the formal vehicle by which the management process is executed.  In most organizations, systems exist for planning, organizing, directing, controlling and motivating.  Depending on the level of appropriateness and quality of the management control systems, the task of management is either facilitated or hindered.  The end goal of a management control system is achieving organizational objectives.  Because employees (agents) do not always give their best efforts for achieving organizational objectives, management control systems need to strive for aligning goals of agents (e.g., employees, subordinates) with that of principals (eg. senior management, owners).  Agency theory and its extension, principal-agent model, provide insights to the problem of goal congruence and suggest remedies, at least in the Western cultural context.  Whether the agency theory presumptions, predictions and prescriptions are universally applicable is an important issue in management. Their validity in different cultural contexts is largely unknown. The available literature to date indicates the possibility that agency theory may not be valid in non-western cultures. However, further empirical research is needed in non-western cultures to shed more light to this issue.  Agency Theory provides theoretical underpinnings for many research efforts in the disciplines of economics, management, marketing, finance, accounting and information systems. It is one of the most influential theories that underlie the bulk of the corporate governance and management control research in the Western world.  Fundamental to agency theory is the assumption that agents are opportunistic and will always engage in self-serving behaviour if opportunities arise. 


Cited by: 163


Consumer Protection in E-Commerce: Analyzing the Statutes in Malaysia

Sarabdeen Jawahitha, Multimedia University, Malaysia



The bearing of e-commerce especially the retail businesses on the Internet have created opportunities to the consumers including Malaysian consumers to transact online with comfort and convenience. Nevertheless, the ultimate success of e-commerce will depend to great extent on the interest and confidence of consumers. There have been several legislation passed to protect the consumers in the traditional market place, many of which can be useful in electronic market place. However, the nature of electronic environment requires new laws or amendment of the existing laws to address the new challenges posed by this new medium of transaction.  Issues like the applicable law to consumer contracts for supply of goods and services made via Internet, the legality of collection of consumer data without express consent from the data subject and the suitable courts to decide on an e-consumer dispute always create anxiety among the e-consumers. Many countries have taken initiatives to address these issues to build up consumer confidence. This paper is an attempt to examine Malaysian legislative framework and analyze its adequacy to address these anxieties and the protection in preserving the interest of the e-consumers.  Consumer protection has been a problem ever since the outset of trading 10,000 years ago. However, the explosive growth in cyberspace has led to some new problems and challenges for consumer protection(1). Cyberspace used to mean limited access to text-based e-mail and reference material for the few who had Internet access through universities and government agencies via online services such as Compuserve, American Online, and Prodigy.


Cited by: 17


Technical Efficiencies of Rice Farms in Thailand: A Non-Parametric Approach

Dr. Wirat Krasachat, King Mongkut’s Institute of Technology Ladkrabang, Bangkok, Thailand



The purpose of this study is to measure and investigate technical efficiency in rice farms in Thailand. This study decomposes technical efficiency into its technical and scale components. In past studies, efficiency analyses have involved econometric methods. In this study, the data envelopment analysis (DEA) approach and farm-level cross-sectional survey data of Thai rice farms in 1999 are used. A Tobit regression is used to explain the likelihood of changes in inefficiencies by farm-specific factors. The empirical findings indicate a wide diversity of efficiencies from farm to farm and also suggest that the diversity of natural resources has had an influence on technical efficiency in Thai rice farms.  Only a few decades ago, rice was not only the most important crop in Thai agriculture but was also the backbone of the Thai economy. At present, despite considerable diversification into upland crops, rice continues to be the most important commodity in Thai agriculture. In 1999, about 50 per cent of farm land was planted to rice (Ministry of Agriculture and Cooperatives 2002). This is because rice is not only the staple food of Thai people but also a cash crop for the majority of Thai farmers.  In 1999, 10.51 million hectares were planted to rice, 24.17 million tonnes were produced and 6.84 million tonnes were exported. Thailand has four regions. Based on 2001/02 crop year data, the main output was contributed by the Northeastern Region followed by the Central Region. The highest yields stemmed from the Central Region (Ministry of Agriculture and Cooperatives 2002).  There are at least four causes for worry concerning the future development of rice farms in Thailand. First, the relatively high growth rate of rice production in Thailand has been achieved mainly through the expansion of cultivated areas (Ministry of Agriculture and Cooperatives 2002).


Cited by: 105


The Moderating Effects of Consumer Perception to the Impacts of Country-of-Design on Perceived Quality

Ting-Yu Chueh, National Central University, Taiwan

Danny T. Kao, National Central University, Taiwan



This research is exploratory in nature.  The object involved in this research is mobile phone due to its prevalent usage. The main purpose of this research is to identify the moderators affecting the COD effects on perceived quality (PQ). According to related literatures, the moderators affecting the perceived quality are country image, value perception, risk, trust, attitude toward the brand, satisfaction, familiarity, attachment and involvement. The moderators involved in this research were emanated from consumer perceptions, rather than the behavioral aspects. Based upon the literatures and inference, all related moderators will significantly impact on PQ. We suggest that representative samples should be selected and tested in the future research.  The propositions involved in this research might be applicable to other products. Moreover, findings of this research can be applied to practical fields to facilitate the marketing resource distribution.  The trend of globalization since 1980s has brought unprecedented impacts on the marketing of consumer goods, thus international marketing research takes on greater importance.  Among the themes of international marketing, country-of-origin (COO) effect has become a critical issue in consumer decision-making, due to the fact that the consumer perception and judgment on the identical products may vary depending upon which country the products are made in.  As the face meaning expressed by the term, “perceived quality” is a subjective judgment.  Even sometimes, it cannot be understood by the scientific ways.  However, it will definitely affect the consumer buying behavior.  Therefore, perceived quality has been a popular research topic for the past decades and many studies have contributed to this area.  The importance of perceived quality is further enhanced by Aaker (1991), who categorized perceived quality as one of the key sub-dimensions of brand equity. 


Cited by: 37


Ownership and International Joint Ventures’ Level of Expatriate Managers

Lifeng Geng, Lakehead University, Ontario, Canada



We examine the relationship between ownership and the level of expatriate managers in international joint ventures. We propose that such relationship rests with the division between de jure control and de facto control. Results from empirical tests support our hypothesized inverted-U relationship between ownership and IJVs’ level of expatriate managers. IJVs’ level of expatriate managers rises as ownership increases from low to a majority level and then decreases after ownership exceeds the majority level. Since the 1970s, foreign subsidiaries that emerged from foreign direct investment (FDI) activities have played an increasingly important role in world economic development. By 2001, global FDI activities have created 850,000 foreign subsidiaries. These foreign subsidiaries employed approximately 54 million people across the globe. Their sales of almost $19 trillion were more than twice as high as world exports. They now account for more than one-tenth of world GDP and one-third of world exports (UNCTAD, 2002). One problem investing firms frequently confront is how to control these foreign subsidiaries. In fact, control has been the focus of the FDI literature and is the single most important determinant of both risk and return (Anderson & Gatignon, 1986). Control is an essential component of managerial functions responsible for ensuring that investing firms’ goals and interests are met and deviations from standards are corrected for effective performance outcomes (Fenwick et al., 1999). 


Cited by: 8


Teaching Workloads of Finance Program Leaders and Faculty and Criteria for Granting Load Relief

Dr. Ron Colley, University of West Georgia, Carrollton, GA

Dr. Ara Volkan, University of West Georgia, Carrollton, GA



This study first examines the distributions for teaching loads and number of course preparations of finance program leaders and faculty at Ph.D.-level and masters-level AACSBI-accredited institutions.  In addition, official maximum loads and the extent to which faculty and program leaders in given institutions teach different levels of loads are presented.  Second, the reasons for granting teaching workload reductions to finance faculty are examined.  Where appropriate, statistical tests are performed to report differences among the means of the results observed in the two categories, for both faculty and program leaders and public and private institutions. The overall results show that there are no statistical differences between the responses of program leaders and faculty and between the private and public institution outcomes.  While the former indicates good communications among finance educators, the latter shows that free market competition operates as an equalizing force.  When specified, the official maximum load is usually 24 semester hours (eight courses) per year, but few faculty teach the maximum load. Also, there are significant differences between the average common teaching loads and common number of course preparations in the two categories.  While there are some differences among the reasons cited for load relief in the two categories of programs analyzed, overall results indicate that publication activities are the main factors underlying load relief, followed by editing a journal and institutional service.  Thus, advocates of rewarding the scholarship of teaching and professional development activities at levels at least equal to research activities have not achieved their goal. Given increasing pressures for doing more with less and calls from some legislatures to mandate minimum teaching loads, finance program leaders and faculty need to be informed how the level of their teaching workloads compares to those at institutions with characteristics similar to theirs.


Cited by: 4


ICT Adoption and SME Growth in New Zealand

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



The impact of adopting information communication technology (ICT) upon the growth of small businesses in New Zealand is reported in this paper.  Government policy increasingly places a strong emphasis upon the importance of ICT and the knowledge economy.  Specific projects, undertaken by government in this regard, have included remote rural broadband access developments, the single government portal and e-procurement initiatives.  A SME Quarterly Benchmarking Survey has been used to investigate various aspects of ICT adoption by SMEs since 1999.  This survey provided the research instrument for the present study.  Three measures of growth are used as the basis for investigating the impact that the level of ICT adoption has on a range of small businesses.  The analysis, using logit regression, probes the strength of the various factor relationships.  Increased profitability, as a proxy for growth, is most strongly correlated with ICT usage.  Although a positive relationship is considered likely, and detectable in the data gathered, it could not be separated from other influences.  Factors such as the level of ICT understanding of the owner/managers and increases in the number of employees are similarly positively correlated.  Accordingly, it becomes increasingly difficult to sustain a causality linkage between increased ICT use and growth. The extent to which SMEs have clear growth objectives, in terms of specific business performance measures, appears to be very limited.  Finally, it is suggested that the results obtained in the study provide useful insights which have a direct bearing upon government policy being developed in agencies such as the Ministry of Economic Development.  New Zealand Government policy towards SMEs has, over the last three years, placed an increasing emphasis upon the knowledge economy and information communication technology (ICT) as key drivers for sustainable growth in this sector. 


Cited by: 100


Internet Technology as a Tool in Customer Relationship Management

Noor Raihan Ab Hamid, Multimedia University, Cyberjaya, Malaysia

Dr. Norizan Kassim, United Arab Emirates University, UAE



The Internet’s growth, particularly the World Wide Web, as an electronic medium of commerce has brought tremendous changes in market competition among various industries. For example, past researches have examined the impact of Internet technology on customer relationship management in various areas¾in small and large firms, services and business-to-business companies. However, there remains a need to empirically examine the impact of implementing Internet technology on various dimensions of relationship management in South East Asia, particularly Malaysia. Primarily, the interest was led by traditional customer management economics¾it costs the industry five times as much to acquire a new customer than to retain an existing one (Peppers and Rogers 1996). The results of this study indicate that click-and-mortar companies show a higher percentage of using the Internet technology for CRM compared to pure dotcom companies.  There is a positive impact on the utilization of Internet technology on the CRM variables being studied. These findings may reflect a similar situation in other countries in South East Asia where the penetration rate of e-commerce is relatively low. The limitations and future directions of  this research are also discussed and highlighted.  The emergence of Internet technology, particularly the World Wide Web, as an electronic medium of commerce has brought tremendous changes in how companies compete.  Companies that do not take advantage of the Internet technology is viewed as not delivering value added services to their customers, thus are at a competitive disadvantage. Obviously, the Internet technologies provided companies with tools to adapt to changing customer needs, and could be used for economic, strategic and competitive advantage. In contrast, companies that utilize the technology (at least having a web site that displays corporate and products information), are viewed as progressive and continuously striving to meet the current needs of customers. In turn, these companies have a low cost base and have begun producing competitive high quality products.


Cited by:


Privatization in Saudi Arabia: Is it Time to Introduce it into the Public Sector Domain?

Dr. Abdullah M. Al-Homeadan, The Institute of Public Administration (IPA), Riyadh, Saudi Arabia



Reducing government inefficiency and ineffectiveness was essential for the improvement of economic welfare of the human race. “Governments were forced to look at ways to reduce costs and inefficiencies, and turned to privatizing some of their...commercially oriented operations”(Ives, 1995, p. 2).  One of the countries that is seriously considering privatization is Saudi Arabia.  In fact, Saudi Arabia has already taken some big steps toward privatizing all of the enterprises that could be run by the private sector. The Saudi privatization program was announced by King Fahd on Monday the fifth of May, 1994 and was delineated in the government’s Third Basic Strategic Principle of the Sixth Development Plan (1995-2000). The program has been interpreted to mean “giving the private sector the opportunity to undertake many of the economic tasks of the government, while ensuring that the government does not engage in any economic activity that can be undertaken by the private sector” (p. 17).  The objective of this study is to explore the attitudes of the department heads in the public sector of Saudi Arabia in order to identify the factors that have shaped those attitudes. The importance of the opinions of those administrators stems from the fact that they are going to be responsible for implementing the King’s privatization initiative. Insuring that policy implementors hold favorable attitudes towars privatization is essential to the success of the privatization program.


Cited by: 3


Trainer Development Formula: The Case of the Institute of Public Administration in Saudi Arabia

Dr. Abdullah M. Al-Homeadan, The Institute of Public Administration (IPA), Riyadh, Saudi Arabia



Government in Saudi Arabia has always been the main financier of administrative development in the country. Ever since the creation of the Council of Ministers in 1953, the concept of effective and efficient public sector has been one of the government’s main strategies. The Council of Ministers stems from the fact that it practices both legislative and administrative powers. One of the major steps taken by the Council towards improving the effectiveness and efficiency of the struggling ministries and public agencies was the invitation of experts from a number of concerned international agencies as of the year 1957. These agencies are the International Monetary Fund, the International Bank for Reconstruction and Development, The United Nations Technical Cooperation Committee, and the Ford Foundation. One of the major recommendations of these agencies was the establishment of the Institute of Public Administration (IPA) in 1961. The over all mission of the IPA has been the advancement of administrative developments. However, accomplishing this mission could not be achieved without providing a sound administrative environment for the people who will carry on this mission.  In this paper, light will be shed on the IPA’s continuous effort to promote the efficiency of government civil servants and prepare them academically and practically to carry out their responsibilities, to use their authorities in a way that ensures a high level of administrative professionalism and to support the bases for developing the national economy. In addition, light will be shed on the IPA’s efforts in the development of the private sector as well.


Cited by:


The Relationship between the Dow Jones Eurostoxx50 Index and Firm Level Volatility

Dr. Kevin Daly, University of Western Sydney, Campbelltown, Australia



This paper presents a study of asset price volatility, correlation trends and market risk-premia. Recent evidence (Campbell 2001) shows an increase in firm-level volatility and a decline of the correlation among stock returns in the US. We find that, in relation to the Euro-Area stock markets, both aggregate firm-level volatility and average stock market correlation are trended up-wards.  We estimate a linear model of the market risk-return relationship nested in an EGARCH(1,1)-M model for conditional second moments. We then show that traditional estimates of the conditional risk-return relationship, that use ex post excess returns as the conditioning information set, lead to joint tests of the theoretical model (usually the ICAPM) and of the Efficient Market Hypothesis in its strong form.  To overcome this problem we propose alternative measures of expected market risk based on implied volatility extracted from traded option prices and we discuss the conditions under which implied volatility depends solely on expected risk. We then regress market excess-returns on lagged market implied variance computed from implied market volatility to estimate the relationship between expected market excess-returns and expected market risk.We investigate whether, as predicted by the ICAPM, the expected market risk is the main factor in explaining the market risk premium and the latter is independent of aggregate idiosyncratic risk.  It is widely accepted that volatility is not stable over time. Both aggregate market volatility and single stock volatility generally exhibit time varying behaviour. Schwert (1989) points out, “large changes in the ex-ante volatility of market returns have significant effects on risk averse-investors. Moreover changes in the level of market volatility can have important effects on capital investment, consumption, and other business cycle variables”.  Most empirical studies of volatility have focussed on aggregate market volatility.  


Cited by:


Strategic Orientation of Banking and Finance Managers in United Arab Emirates

Dr. Quhafah Mahasneh, University of Sharjah, United Arab Emirates



In the emerging economic scenario in the UAE characterized inter alia by intense competition, strategic orientation of banking and finance firms is viewed as a critical roadmap to competitive edge and superior performance. Policymakers have taken ambitious steps to transform the UAE economy into a regional hub of banking and finance. Missing, however, has been an empirical study focusing on the strategic orientation of managers in the banking and finance sector of the UAE economy. Therefore, an attempt is made in this study empirically to investigate the strategic orientation of managers in this important sector of the economy. It is hoped, a study of this kind would have great implications for policy not only in the UAE but also elsewhere in the world.  A compelling body of literature has emerged in recent decades focusing on various aspects of strategy (Porter 1980, D’Aveni 1994, Barney 1991, Brandeberger and Nalebuff 1995, Hambrick and Fredrickson, 2001). Consultants and academics have contributed immensely in terms of strategy designs and their effectiveness under various environmental conditions. However, despite the proliferation of some very promising studies in the literature, there is a need to replicate the studies focusing on the orientation of organisations to compare empirical findings and contribute to the advances in theory (Hubbard and Armstrong, 1994). Interestingly, most of the research in the area of strategic orientation has been undertaken in industrial countries whose economies have attained maturity and stability in relative terms. It is assumed that firms in these countries are also able to design appropriate responses to competitive onslaughts and stay healthy. But is this assumption applicable in a developing economy dominated by inward-looking product-oriented firms? (Kinsey, 1988) It would certainly be analytically interesting to find it out.


Cited by: 6


Great Leaders Teach Exemplary Followership and Serve As Servant Leaders

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



This paper focuses on the impact of exemplary follower and servant leader. Thus it examined their relationship and the roles they play in the creation of the “Learning Organization” of the future. The first part of this framework addressed the process of a good follower. This process include leaders alienating followers, leaders face problems in teaching leadership, skills of exemplary followers, exemplary followers and team, organizations of the future, leaders transforming people and leaders measured by the quality of their followers. The second part of the paper deals with servant leader. Thus its process include servant leaders elicit trust in followers, modern western societies, community provide love for humans, business organizations are expected to serve and modern organizations searching for new mission. Together, the two frameworks provide insights and guidelines for managers and leaders in leading organizations of the future.  To succeed, leaders must teach their followers not only how to lead: leadership, but more importantly, how to be a good follower: followership.  Contrary to popular negative ideas regarding what it means to be a follower, positive followership requires several important skills, such as, the ability to perform independent, critical thinking, give and receive constructive criticism and to be innovative and creative. Furthermore, we believe that Great Leader is a process that can be learned, that is not restricted to a few “chosen or special” individuals that are born with an unusual capability or skill. Though, some seem to have more to learn than others do, but the potential for exemplary follower seems to be universal. Through solicited comments and regular participation, employees shared ownership in determining policies at work (Gilbert & Ivancevich, 2000). Being a follower has a negative connotation because it is usually used to refer to someone who must constantly be told what to do.


Cited by: 143


Factors that Affect the Selection of Defensive Marketing Strategies: Evidence from the Egyptian Banking Sector

Dr. Mansour S. M. Abdel-Maguid Lotayif, Cairo University, Cairo, Egypt


The current study aims at identifying the causality relationships between defensive marketing strategies {e.g. business intelligence strategy (BI), customers service strategy (CS), customer complaint management strategy (CCM), Aikido strategy (AIKO), Free telephone line strategy (FTL), focus strategy (FOC), differentiation strategy (DIFF), and cost leadership strategy (CL)} and four sets of variables. These sets are demographics (e.g. respondents’ positions, ages, educational levels, experiences, bank experiences, and bank’s number of employees), bank’s objectives (e.g. to increase the bank’s market share, to maintain the current market share, to increase the bank’s profit, to increase the bank’s customer satisfaction, and to increase the customer’s loyalty), bank’s rivals i.e. kinds of entry modes (e.g. branches, subsidiaries, joint venture, merger, direct exporting and indirect exporting), and rivals’ competitive advantages (e.g. their marketing mix variables, all their marketing program variables, offering of new kinds of banking services, high interest rates on deposits accounts, low interest rates for loans given, well designed service delivery system, employing competitive staff, and strong advertising campaigns). The experiences of 591 bankers were utilized to investigate these relationships. Throughout Canonical Correlation Analysis in Stat Graphic statistical package, strong and significant relationships between defensive marketing strategies and these four sets of variables were supported.   Defensive marketing is the body of knowledge that uses customers as a shield in their battle with their rival in a specific market (Griffin et al., 1995; Heskett et al., 1994; Reichheld, 1993; Fornell, 1992; Reichheld and Sasser, 1990; and Fornell and Wernerfelt, 1988). Hauser and shugan used defensive marketing terminology for the first time at 1983. Therefore, it could be considered a new terminology in marketing literature. 


Cited by: 19


Hedging for Global Equity Investing

Dr. Tulin Sener,  State University of New York - New Paltz, NY



In short run, substantial currency surprises exist, including forward rate biases and cross-product terms.  However, significant negative co-variances between the currency contributions and asset returns may result in less or no need for hedging.  A natural insurance takes place. Hedging decisions for a single investment versus a global equity portfolio may not be the same for a given period. The determinants of the optimal hedge ratio for the portfolio are defined as the domestic asset weight, co-variances between asset returns and currency contributions, as well as the variance of the currency contribution.  Hedging is less effective for longer time periods and for the global portfolios with larger domestic asset weights (i.e. 80 percent).  When investing globally, currency risk and hedging become the major concern, which is one of the most controversial issues in literature.  Jorion (1989) and Gastineau (1995) accept the presence of hedging benefits in the short run, but not in the long run.  Hauser, Marcus and Yaari (1994) verify the benefits of hedging in developed countries (DCS), but not in emerging markets (EMS).   Further, the impact of the forward rate bias, or the currency surprise, on the hedged and unhedged returns and risk is emphasized significantly (Ankrim and Hensel (1994), Gardner and Wuilloud  (1995), Clarke and Tullis (1999), Baz et al. (2001) and Cornelia (2003)). In the long run, the depreciation of one currency may be offset by the appreciation of another.  Conversely, in the short run, currency markets may have significant direct and indirect effects on the dollar return and risk of a foreign investment.  The indirect effect represents the association between asset and currency returns.  The literature ignores the indirect effect and calculates the dollar (base currency) return by assuming additivity.  With current volatile and interdependent equity and currency markets, particularly in EMS, returns and risks of assets and currencies cannot be additive (e.g. Solnik (2000, p. 128 and 575) and Sener (1998)).  The study extends the Filatov and Rappoport Model (FRM) (1992) of portfolio risk-minimization and it is different in several ways. 


Cited by:


Finance Faculty’s Understanding and Acceptance of Accreditation for Chartered Financial Analyst in Taiwan

Dr. Mei-hua Chen, National Changhua University of Education, Taiwan

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



Taiwan joined the World Trade Organization (WTO) in January 1, 2002, and now faces significant competition in many respects from other members of the WTO. As far as financial education in Taiwan is concerned, it is urgent to prepare financial students in Taiwan for a global market. For instance, there are many universities in the United States currently offering CFA-oriented degrees or CFA exam preparation courses because the CFA designation is becoming one of the fast-growing credentials among investment professionals worldwide. The findings from this study provided information to financial education faculty for planning business courses in order to meet students' needs and also to capture future business trends. The findings also assist the selected finance departments design more appropriate curricula in their finance majors. The Association for Investment Management and Research (AIMR) is in charge of more than 45,000 investments professionals from more than 95 countries all over the world (Business Wire, 2000).  AIMR, a non-profit organization, administers the Chartered Financial Analyst (CFA) designation that requires passing a series of three-level six-hour exams and fulfilling a three-year related experience (CPA Journal, 1998). In fact, AIMR supervised the CFA examinations at 170 exam sites in 73 countries on June 2 or June 3 each year (for Far East and Indian Subcontinent). The CFA candidates have to prepare broad subjects such as ethical and professional standards, asset valuation, financial statement analysis, quantitative methods, and economics and portfolio management. The CFA exams are written in English and  include multiple choice, problems, cases, essays, and item set questions (Business Wire, 2000).  In general, the CFA program candidates would spend 250 to 300 hours preparing for each level exam in the self-study CFA program (Business Times, 2000).  According to AIMR, most of the CFA program candidates are analysts, portfolio managers, investments sales professionals, brokers, traders, and accountants who are working at investment firms, banks, or insurance companies (Cardona, 1994).


Cited by:


Assessing the Measurement of Organizational Agility

Dr. Norizan M. Kassim, UAE University, Al-Ain, U.A.E.

Dr. Mohamed Zain, UAE University, Al-Ain, U.A.E.



This research examines four factors of agility¾ enriching customers, mastering change, leveraging resources, and cooperating to compete and how they relate to the use of information technology and information systems by Malaysian firms in their efforts to become more agile and competitive. Measures of all the four factors of agility were developed and empirically tested using confirmatory factor analysis. The results of the measurement instrument developed for the four factors of agility indicate acceptance of the psychometric properties of the scale.  Rapid changes and challenges in the dynamic information technology environment, and increasingly strong pressures from hypercompetitive markets have forced Malaysian firms to turn to information technology (IT) and information system (IS) to improve organizational agility and to expand globally. IT/IS has now becomes the only way to cope with today’s volume and complexity of data.  However, as technology becomes more matured, management now focuses on controlling the business rather than the technology. Thus the focus now is on how do firms become agile in the market and can this agility be sustained or enhanced through the use of IT/IS. Agility is a necessary ability in the revolutionary turning of the business environment into a turbulent place of competition (Sharifi and Zhang, 1999). Gujrati and Kumar (1995) have even come up with a motto for agility which says agility is "reconfigurable everything." Firms that are agile are those that are able to manage and to adapt to the changes that occur in their environment. In other words, firms need to be fast and lean and be responsive to change in order for them to grow and to maintain or expand its profitability.  The term agility has drawn a lot of attention in the world of business (Lo, 1998). Generally, agility is the ability of a firm to face and adapt proficiently in a continuously changing and unpredictable business environment. 


Cited by: 73


The New Economic and Social Model – A Third Stage of Economic and Social Development in Brazil in the Millennium:

One Brazil-Shared Humanity –Wealth Creation and Social Justice

Dr. Richard Trotter, University of Baltimore, Baltimore, MD



Within the last fifty years Brazil has embarked upon an economic program of industrialization and economic development. The first phase of its program focused on economic development through import substitution and considerable state intervention in the country’s economic policy. During the 1990’s the Brazilian government entered upon the second stage of its economic development policy: a market model based on fiscal discipline, trade liberalization, privatization and deregulation. This model produced economic growth and prosperity for the upper and middle classes. Notwithstanding Brazil’s economic growth income disparity has increased with the result that Brazil is in effect two entities: a first world and a third world country. If the Lula administration is to succeed, it must develop an economic model that combines market economy efficiencies while addressing the enormous economic and social inequalities existing in Brazil. Additionally the Lula administration must address structural issues relating to income distribution arising out of race discrimination, labor policy, educational reform as well as creatively borrowing from the experience of the United States, Canada, China and other Asian countries. John Williamson, a Senior Fellow at the Institute for International Economics in Washington suggested in 1989 ten reforms that he believed should be undertaken in South America to enhance the region’s economic and social development.


Cited by: 3


Critical Success Factors in the Client-Consulting Relationship

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



The primary intent of this study is to examine recent projects involving external management consultants at a N. American telecommunications firm, from the employees’ point of view, to measure the extent to which the aforementioned “critical success factors” were perceived as being evident. A secondary purpose was to examine which, if any, of these factors differ between more or less successful consulting projects with a view to building a model to predict employees’ perceptions of the level of the projects’ success. A third objective was to gather employee opinions on other factors that might contribute to the success of consulting projects. A fourth, and final, objective was to gather general employee opinions on the use of management consultancy at a N. American telecommunications firm. A total of 102 employees responded to a questionnaire consisting of 59 questions. A model including six independent variables was able to predict overall rating of project success, with an adjusted R2 =0.68, F=27.81 (p<.0001).  The significant variables, in order of importance, were: the solution took into account our internal state of readiness; the project included prototyping new solutions;the project deliverables were clear;the consultant partnered with the project team throughout;the consultant was professional; and the consultant understood our sense of urgency.  There were substantial differences seen on most measures between projects judged “successful” and projects judged “not successful”. Nevertheless, it is encouraging that many of the success factors suggested in the literature, and proposed under “an ideal client-consultant engagement”, were judged as present in management consulting projects at the telecommunications firm, to one degree or another.  General opinions of management consultants were mixed and somewhat negative.


Cited by: 294


A Study on Entrepreneurial Attitudes Among Youths in Malaysia. Case Study: Institute Kemahiran Belia Negara, Malaysia

Jumaat  Abd Moen, National University Malaysia, Bangi, Selangor, Malaysia

Ishak Hj Abd Rahman, National University Malaysia, Bangi, Selangor, Malaysia

Mohd Fairuz Md Salleh, National University Malaysia, Bangi, Selangor, Malaysia

Rohani Ibrahim, Universiti Teknologi Mara, Syah Alam Selangor,Malaysia



The objective of this study is to know the entrepreneurial attitudes among the IKBN trainee youths in Malaysia and to identify the factor demographic relationship, educational back ground, respondents’ experience, parental education and job with entrepreneurial attitude orientation. The society has given hopes to IKBN as the first skill center for expanding the entrepreneurship among the trainees. To understand clearly the factors that can influence the entrepreneurial attitude orientation, a model that forms the entrepreneurial attitude orientation was proposed. In this study, a test instrument on entrepreneurial attitude and questionnaires about respondents’ demography was used. This study was carried out on all the IKBN trainees in Malaysia.  Findings have shown that the residential area, field area in IKBN and in school, parent’s education and fathers’ occupation has a significant relationship with entrepreneurial attitudes. A businessman or an entrepreneur has a certain quality personality. Quality personality aspects consist of attitudes, values and the spirit to achieve success. Morris (1985) regarded attitudes attributes as one of the quality aspect that is important because the attitude of a person plays an important role to determine whether a man has interest in a particular business.  Schumpeter (1934) has introduced the innovation concept as the basis of entrepreneurship. He says that entrepreneurs are those with innovation in the following matters: To introduce goods or new services. To introduce new methods on production. To handle new market. To source out for new raw materials. To manage a new organisation for any industry. Schumpeter statement has identified to us that entrepreneurs are those who are innovated in manufacturing any product.Today, entrepreneurial activity has been accepted generally as supplying positive and productive contribution in the economic development of the country.


Cited by: 27


A Comparison of Economic Reforms and Instability Effects in Three Large Emerging Markets

Dr. Parameswar Nandakumar, Indian Institute of Management Kozhikode, India

Dr. Cheick Wagué, South Stockholm University, Södertörn, Sweden



An additive decomposition analysis is made of the external sector developments in three countries, China, India and Korea, for the period 1974-2000, for the purpose of distinguishing between the results of policies and external influences. The growth in exports is disaggregated into that due to additional primary exports and that arising from diversification into more value-added manufactures. The effects on imports of constraining primary imports while opening up to valuable capital goods imports are also weeded out. The terms of trade effect on the current account, as well as the effects of increases in debt and in interest on debt, are also separated out. In general, specific reform policies such as exports diversification have succeeded more in Korea and – to a lesser extent – in China, while the Indian experience has been only positive in the recent years. Also, external forces have had their say relatively more in India. However, the feedback from financial instability to the real economy is noted only in Korea, as borne out by granger causality tests.  The contagious 'Asian Crisis' of the 1990s has added new dimensions to the discussions of the relative merits of various development strategies, of those labeled as export-oriented and inward looking in particular. Thus there is an emerging view that the performance of the so-called Asian Tigers over the last few decades ought not to be considered as an unqualified success, with a correspondingly (more) understanding eye being turned towards the enigmatic Asian giants, China and India. But while such a willingness to shed established prejudices is a welcome sign, fresh conclusions tend to be based on the immediate pre- and post-crisis developments in the dynamic Asian economies. 


Cited by: 4


New Evidence on the Impact of Federal Government Budget Deficits on the Nominal Long

Term Interest Rate Yield on Moody’s Baa-Rated Corporate Bonds

Dr. Carl T. Massey, Jr., Armstrong Atlantic State University, Savannah, GA

Dr. Richard T. Connelly, Armstrong Atlantic State University, Savannah, GA

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



This study empirically investigates the impact of the federal budget deficit on the nominal long term interest rate yield on Moody’s Baa-rated corporate bonds over the period 1946-2002. In a system that includes the ex ante real short term interest rate, expected inflation, changes in per capita real GDP, and the ratio of the federal budget deficit to the GDP level, IV estimation reveals that the total budget deficit has acted significantly to raise the nominal corporate bond yield. This finding is consistent with certain earlier studies and implies the possibility of at least partial “crowding out.”   The impact of federal government budget deficits on interest rates has been studied extensively [Barth, Iden and Russek (1984; 1985), Carlson and Spencer (1975), Cebula (1988; 1997), Feldstein and Eckstein (1970), Findlay (1990), Hoelscher (1983; 1986), Holloway (1988), Johnson (1992), Mascaro and Meltzer (1983), McMillin (1986), Ostrosky (1990), Swamy, Kolluri, and Singamsetti (1990), Zahid (1988)]. These studies typically are couched within IS-LM or loanable funds models or variants thereof. Many of these studies find that the federal budget deficit acts to raise longer term rates of interest while not significantly affecting shorter term rates of interest. Since capital formation is presumably much more affected by long term than by short term rates, the inference is often made that federal government budget deficits may lead to at least partial "crowding out" [Carlson and Spencer (1975), Cebula (1985)]. This study seeks to investigate the impact of the federal budget deficit on the nominal Moody’s Baa-rated corporate bond interest rate yield over the long run.


Cited by: 2


Issues and Challenges of Accounting Education in China: Practitioner and Academic Perceptions

Tsui-chih Wu, Shih Chien University, Taipei City, Taiwan

Yealing Tong, Takming College, Taipei, Taiwan



This paper examines and analyzes the current situation and challenges of accounting education in China. Questionnaire surveys were directed to accounting educators from five mainstream universities as well as accounting practitioners. Taken overall, responses from the two groups are quite homogeneous in the majority of issues in the study. The results show China has experienced an increased pace of change in accounting environment due to internationalization and economic openness. While accounting educators, public accounting, and industry see tremendous value in an accounting education, there is an urgent need for changes in curriculum development and teaching, rewarding structure, and ways of communications with the practice community. The Chinese booming economy for the past ten years has indeed brought about serious problems and challenges with accounting education. The research results may provide some early feedback for the development of accounting education in emerging economies. Since 1978, China has adopted an open-door policy and a series of economic reforms. The shift from the centrally planned economy to a market-oriented economy has brought about major renovation and promulgation of new laws and rules in the areas of securities administration and accounting. Particularly, the structural changes in accounting regulatory framework are undertaken to meet the pressure of international comparability and the demand for accounting information by capital providers and business managers. As a result, the goal of reforming the accounting system has been to establish a new conceptual framework that combines the unique Chinese socialist characteristics and the generally accepted international accounting norm. 


Cited by: 24


Exchange Rate Regime Choices for China

Dr. Xiaoping Xu, Huazhong University of Science & Technology, Wuhan, Hubei, P.R. China



What exchange rate regimes should China adopt in the 21st century? This paper analyzes some different exchange rate regime choices for China’s economy. It indicates that in China’s case, a fixed exchange rate regime can not mitigate both real and financial economic shocks in the long run; a complete floating exchange rate regime is not appropriate for China either because free movements of international capital and floating exchange rates are basically incompatible in China. The conclusion that flows from this paper is that the future choice for China’s exchange rate regime is a floating rate within a band system. It is an astonishing fact that all the massive crises of the past ten years—the really big ones –- have been associated with the collapse of formally fixed or quasi-fixed exchange rate systems: Mexico in 1994; the three Asian IMF program countries of Thailand, Indonesia, and Korea; Russia in 1998, in many ways the most consequential of the crises for the rest of the world; and Brazil in 1998 and 1999. These crises offer strong evidence about the role of exchange rate systems (Fischer, 2000). So rethinking the Chinese exchange rate regime choices is of great importance now.  Since October 1987, the IMF has classified China as having a managed floating exchange rate regime, which is de facto peg arrangements under managed floating. China has successfully maintained its exchange rate stability for over a decade even during the Asian Financial Crisis in 1997, with the assistance of capital controls, providing an important element of stability in the regional and global economies. However, after China became a member of the WTO in 2001, China will experience more fluctuations in financial markets because it relaxes its restrictions on capital movements and liberalizes its financial markets. China has to choose a more flexible exchange rate regime in the near future to adjust both the nominal and real shocks. However, this choice is not easy, and this process will be gradually achieved. 


Cited by: 9


Sources of Competitive Advantage: Differential and Catalytic Dimensions

Fred Amofa Yamoah, International University - London Centre, UK



A key challenge confronting all managers is achieving consumer satisfaction in an ever-changing business environment. It is necessary to demonstrate that the changing business environment has been a major factor behind the varied sources of competitive advantage and corporate strategies that are implemented by many businesses. A literature review spanning over six centuries provided, highlights the need to differentiate between sources of competitive advantage for corporate success. Towards this goal, a two-tear classification, termed remote and immediate sources of competitive advantage is proposed with a discussion on its theoretical and managerial implications, and an outline of future research directions.  Every profit-making organisation invests some amount of resources to create worth for the owner/stakeholders. In the case of non-profit making organisations, the worth generated is employed in various charitable projects.  However, a common challenge to all managers in today’s business environment is achieving customer satisfaction in a changing environment. Hence, business decisions taken and strategies formulated and implemented to address this challenge have always tended to be critical to organisational success. One popular management concept, among others, that has been employed over the years, in an attempt to achieve customer satisfaction, in a constantly changing business environment is gaining competitive advantage (Hoffman 2000).  In its simplest sense, the competitive advantage concept means devising unique features to attract consumers away from ones competitors. In other words, the creation of relatively superior product/service that better serve the needs of consumers. 


Cited by: 1247


Comprehensive Income: Evidence on the Effectiveness of FAS 130

Dr. Bruce Dehning, Chapman University, Orange, CA

Dr. Paulette A. Ratliff, Arkansas State University, Jonesboro, AR



Statement of Financial Accounting Standards No. 130 (FAS 130) “Reporting Comprehensive Income” requires all publicly traded companies to include a Statement of Comprehensive Income in their set of basic financial statements.  As Comprehensive Income items have previously been disclosed in various parts of the financial statements, listing these items in statement form provides no information that has not already been available.  Therefore, if markets are efficient, the disclosures required by FAS 130 should not affect firm value.  The purpose of this paper is to provide empirical evidence of the usefulness of CI disclosures as required by FAS 130.  In this study, we examine data for firms in periods immediately before and after enactment of FAS 130 rules.  We find that there is no difference in the market’s valuation of comprehensive income adjustments before and after the implementation of FAS 130.  This is consistent with the efficient markets hypothesis in that there is no change in the way the market values the information due solely to the placement of the disclosure.  Unless other benefits of FAS 130 can be shown, this statement appears to require additional information without a commensurate payback.  Effective for fiscal years ending after 12/15/98, all publicly traded companies are required to include a Statement of Comprehensive Income in their set of basic financial statements.  Statement of Financial Accounting Standards No. 130 (FAS 130) defines comprehensive income (CI) as “the change in equity (net assets) of a business enterprise during a period from transactions and other events and circumstances from nonowner sources.  It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.”(1) 


Cited by: 47


On Acculturation of Business Acquisition: The Case of two Machine Tool Manufacturers in Taiwan

Nelson N. H. Liao, Chaoyang University of Technology, Taichung County, Taiwan



One aggressive machine tool manufacturer in Taiwan acquired another major machine tool manufacturer retaining all employees of the acquired firm and providing its financial and managerial support in the year 2000. The present paper examines the issue of acculturation between the acquiring firm and the acquired firm in terms of organizational culture and employees’ working attitudes. The present paper introduced a conceptual research framework, followed by implementation of a structured company-wide questionnaire, the employees of the two firms responded twice in one year. By way of reliability check, descriptive analysis, Pearson correlation analysis, independent samples t-test, stepwise regression analysis, and interviewed with key members of the two firms, the major findings are as follows: (1) Organizational culture is statistically significant correlated to employees working attitudes. (2) The significant dimensions of employees’ working attitudes at the acquired firm, when compared with their counterparts working at the acquiring firm were reduced one year after acquisition. (3) Retained individual brands’ strategy led to separate preference for the acquiring firm and the acquired firm, Most employees had no consensus on the issue of successful acquisition.  Mergers have proven to be a significant and increasingly popular means for achieving corporate diversity and growth (Nahavandi and Malekzadeh, 1988). In an examination of Dutch merger activities, participating firm managers responded that firms were able to achieve (1) an increase in market power, (2) an increase in sales, (3) the creation of additional shareholder wealth, (4) increased profitability, and (5) marketing economics of scale in most of the mergers (Brouthers, Hastenburg and Ven, 1998).  


Cited by: 5


Perspectives on Privacy

Dr. William H. Friedman, University of Central Arkansas, Conway, AR



Privacy, while rarely a major social concern before 1900, has recently become a high profile issue, bordering on obsession for the general public as well as for the computer and the business worlds. Discussants of privacy rights often take much for granted, and in the most extreme cases, their assertions about privacy and rights are made in a tone of almost “axiomatic” self-certainty. They typically proceed with the full expectation that the intended audience will assent to the spokesperson’s positions without question. There have been many proposed and actual extensions of the scope of privacy, which have now progressed to demands for shielding virtually all information about anything an individual might wish to keep secret, despite the existence of reasonable, competing values. For example, in the US, a student has a legal right to keep his/her parents, whether they defray the student’s tuition or not, from ever learning from a university that the student has failed every course.  The most common starting point for discussions on privacy is that it is a natural, inviolable right as well as an important value. When a value-laden policy position has attained such unquestioned influence, it is both appropriate and timely to examine critically the extent of its applicability and whether it in fact embodies the overarching values (Gurak 2002) attributed to it. This paper attempts just such an analysis from an information technology, business, social, legal, and philosophical perspective. The values competing with privacy and the matter of the origins of privacy and other rights play a central role in this analysis.  It is useful to consider three definitions of privacy, which give the range of common usages and, therefore, will be used to set the parameters for this paper. The original meaning was apparently a notion like “the quality or state of being apart from company or observation” and then came to mean “freedom from unauthorized intrusion.” (Britannica & Merriam-Webster's Collegiate Dictionary 1997). One should notice that the first definition emphasizes the actions and desires of a person secluding him/herself, and the outsider is regarded as having the role of passive observer. There is even the possibility that the privacy seeker is unaware of being observed.


Cited by: 2


Global Trade Model

Dr. Baoping Guo, University of Northern Virginia, VA



This paper presents a global trade model by incorporating capital flows, consumer goods flows, and intermediate goods flows in conventional multiregional input output model to simulate that the interconnected world economy as whole is various of trade flows. The paper presents global trade equation, export equation, import equation by introducing domestic trade matrixes, import matrixes and export matrixes, which show the structure connection of global economy from different analysis angles. The model suggests that there be the import-export structure interdependence among countries in international trade system. In addition, the paper provides a solution procedure for an exogenous customer-consumption-oriented dynamic multinational equilibrium. With continuing declining in transportation and communication costs and reduction of man-made barriers to the flows of goods, service, and capital, markets are going global. This means that it is increasingly important to understand the implications of international trade and interdependence of countries in the world economy.  The studies of this paper present a global trade model to explore the structure connection to simulate the structure connection of multinational economy and international trade in the real world. It provides comprehensive understanding to international trade flows by showing a method of systematically quantifying the mutual interrelationships of import and export among various sectors of a complex economic system participated by multiple countries. The paper presents general trade equation; export equation, import equation and dynamic trade model to explore the structure connection of multinational economy. The model of this paper integrates multinational economy by domestic trade flow matrix and international trade matrix and further more by three categories as intermediate goods matrix, capital goods matrix and consumer goods matrix. 


Cited by:


Mobile Commerce: Customer Perception and It’s Prospect on Business Operation in Malaysia

Dr. Ahasanul Haque, Multimedia University, Selangor, Malaysia



Use of mobile devices will open significant opportunities for e-commerce, payment services, information services and entertainment. However, adoption of mobile commerce in business to business (B2B) and business to consumer (B2C) sectors has been relatively low in Malaysia. Rapid growth numbers of mobile users, it is crucial for companies to fully understand what influence consumers satisfaction. As consumer perception of services would influence the level of satisfaction, companies should then pay attention to the attributes that are perceived as important by consumers for making choices. Hence, this paper is an early attempt aims to provide empirical data on mobile users’ preferences of services as well as attributes that are perceived as importance when they shop using mobile devices. This paper explains users’ perception towards mobile commerce and its scope as a business marketing strategy in Malaysia. The results of the study indicated significance difference between male and female perception of mobile commerce. In addition, results also highlighted negative influence types of information on the use of mobile commerce among the various groups.  In a new global and knowledge economy, there is a high competition among the organizations to attract customers. The sales cycle and time to make decisions are becoming limited than ever. Moreover, the availability of large volume of information and rapid technology advancement increases customer’s expectations at the faster rate. In order to attract and satisfy the customer needs and to defend themselves against these challenges business organizations should be responsive enough. Meanwhile, the growth and success of the Internet has created new interest as well as new horizons in the information technology development and business strategy. Millions of Internet users are expected to generate large volume of business. Electronic business is considered as a mean to an end in accomplishing these goals.  As a fixed line technology, the Internet has proved to be highly successful in reaching millions of homes worldwide.


Cited by: 50


Is Family Ownership a Pain or Gain to Firm Performance?

Jira Yammeesri, University of Wollongong, Northfields Ave., Australia

Dr. Sudhir C. Lodh, University of Western Sydney, Australia



This study examines the relationship between family ownership and firm performance in Thailand between 1998-2000.  This study focuses on family-controlling ownership, managerial-family and managerial-non-family ownership.  The results show that family-controlling ownership is positively significant to profitability, but it is less significant to market returns.  The results also show that managerial-family ownership has a strong positive relationship with firm performance.  Interestingly, this study finds that managerial-family ownership does not always encourage firm performance as, based on a non-linear analysis, the results show that a certain level of managerial-family shareholding is negatively related to firm performance.  Ownership structure is clearly important in determining firm’s objectives, shareholders’ wealth as well as how managers of a firm are disciplined (Porter, 1990; and Jensen, 2000).  In particular, the structure of ownership has been extensively discussed since Berle and Means (1932) introduced the separation of ownership and management.  The basic assumption is that the overwhelming interest of principals/shareholders is to maximize firm performance, whereas managers have other interests that may conflict with those of shareholders.  Such conflict between the interests of owners and managers leads to agency problems, which are attributed as one of the causes of firm performance declining.  Berle and Means (1932), Fama (1980), Fama and Jensen (1983), Blair (1995) and Shleifer and Vishny (1997) suggest that these agency problems can be mitigated through the process of effective monitoring by concentrated shareholders (or controlling shareholders).  Whilst, Jensen and Meckling (1976) argue that the holding of shares by managers (or so-called managerial ownership) in a firm can induce managers to maximize firm performance and shareholders’ benefit.  The important implication of ownership structure for firm performance is not only limited to concentrate (or controlling) ownership, but also extends to the identity of ownership. 


Cited by: 96


Comparison of Knowledge Management and CMM/CMMI Implementation

Dr. Sam Ramanujan, Central Missouri State University, Warrensburg, MO

Dr. Someswar Kesh, Central Missouri State University, Warrensburg, MO



As software project’s deadlines have been missed, budgets grossly overspent, and resources not adequately used to its full potential, the need for a structure or model to assist in implementation have become very apparent. CMM and CMMI were developed to address these situations. In addition to structuring tasks, organizations face a daunting task of organizing and maintaining the knowledge that exists within them. Such an effort is essential for organizations to gain leverage from their knowledgebase. The process used to organize and maintain the knowledge base is aptly called Knowledge Management. In this study we highlight the symbiotic relationship between Knowledge Management and CMM/CMMI implementation in organizations. In a hyper competitive environment like software development industry, knowledge-based theory says that the possession of the knowledge and using it efficiently provides a sustainable competitive advantage. Innovation, the source of sustained advantage for most companies depends upon the individual and collective expertise of employees. Some of this expertise is captured and codified in software, hardware, and processes. Yet tacit knowledge also underlies many capabilities – a fact driven home to some companies in the wake of aggressive downsizing, when undervalued knowledge walked out the door! [1]. Knowledge management is an emerging discipline that promises to capitalize on organizations’ intellectual capital. The concept of taming knowledge and putting it to work is not new; phrases containing the word knowledge, such as knowledge bases and knowledge engineering, existed before KM became popularized. Software engineers have engaged in KM-related activities aimed at learning, capturing, and reusing experience, even though they were not using the phrase “knowledge management.” KM is unique because it focuses on the individual as an expert and as the bearer of important knowledge that he or she can systematically share with an organization. KM supports not only the know-how of a company, but also the know-where, know-who, know-what, know-when, and know-why.  


Cited by: 54


Selecting Consumer Oriented Alliance Partner to Assure Customer Satisfaction in International Markets

Feng-Chuan Pan, Tajen Institute of Technology and I-Shou University, Taiwan



Many firms enter into international strategic alliance with a wish to strengthen their competitive advantages in international markets However, efforts that lack customer perceived value or deviate from customer expectation. has driven many firms to the hell of failure. Selecting proper international strategic alliance partner has been view as critical factor to the success of cross-border cooperation. While the consumer is the center of marketing and many functional operations, consumers are ignored in most international strategic alliance researches. This paper argues that distinct from partner-related factors and task-related factors; consumer-related factors shall be the most important criteria in selecting partner prior to adopt other factors into consideration. This paper presents the importance of the role of consumer in business activities, and the necessity of involving consumer-related factors in the decision of international strategic alliance, particularly partner selection. Base on several international strategic alliance theories, this paper develop several propositions for further empirical studies. To obtain competitive advantages, increasing number of firms is now inevitably forced to compete in multiple markets (Jayachandran and Varadarajan 1999) where are shared the same competitive space with all sizes of competitors (Etemad et al. 2001). In this highly competitive environment, it is unlikely for individual companies working alone without using external resources owned by other organizations (Oliver 1990) to sustain sufficient resources for continuous growth and survival. It is important to effectively integrate appropriate alliance partner’s resources and capabilities. While the consumers are viewed as the center of marketing activities and as the key factor of the market-based assets, and there are several scholars advocate to conduct management study with ‘consumer orientation’ (for example, Brief 2000, Brief and Bazerman 2003), there is few or none specifically focus on the consumer as the critical criteria for selecting alliance partners. Consequently, many firms are now engaged in ‘management myopia’ (Brief and Bazerman 2003).


Cited by: 23


The Relationship between Self-Directed Learning Readiness and Organizational Effectiveness

Dr. Min-Huei Chien, The Overseas Chinese Institute of Technology, Taiwan



The purpose of this study was to investigate the relationship between readiness for self-directed learning and organizational effectiveness.  The hypotheses that guided this investigation related to the relationship between readiness for self-directed learning and organizational effectiveness in several companies in Taiwan.  The results of the study showed significant relationship between SDLRS and organizational effectiveness. Recommendations suggested that manager should help employees become ready for self-directed learning in order to improve organizational effectiveness.  In the 21st century--the Knowledge Age--corporations will see workers as intellectual capital. Workers themselves, rather than just information, will become the resources that allow organizations to respond quickly and effectively to rapid change. Learning is at the core of these demands--whether it's learning a new skill, knowing how to manage existing and new knowledge, or creating organizational structures that support continuous learning. This study introduces learners to a new focus on performance improvement based on knowledge as the competitive advantage. Self-directed learning is the foundation for the Knowledge Age. Well-conceived implementation of self-directed learning is crucial for the success of learning organizations in the 21st century.  Self-directed learning is really mean to every organization, especially in knowledge worker age in the 21st century.  Understand how to manage organization's support for self-directed learning become key factor for effectiveness. Thus, this study was tried to find out the questions below: (1) Recognize the importance of self-directed learning.  (2) Identify the most important aspect of most definitions of self-directed learning. (3) Identify the advantages of self-directed learning for the 21st century organization. (4) Identify roles trainers can play in self-directed learning. 


Cited by: 34


A Study to Improve Organizational Performance: A View from SHRM

Dr. Min-Huei Chien, The Overseas Chinese Institute of Technology, Taiwan



This research studies how to improve organizational performance from the point of strategic human resource management. The research method adopted was the case study of the qualitative research and the data was collected by in-depth interviews. In the process of the research, the author interviewed with fifty employees, including twenty mangers and thirty workers.  According to the analysis of the research data, there are five factors effecting organizational performance: (1) Model of motive. (2) Leadership styles. (3) Organizational culture and environment. (4) Job design. (5) Human resource policies.  According to the results, the study point out some feasible suggestions on the administrative policy and management. The results of this study could be helpful to the management effectiveness practices and the construction of quality management model in disciplinary study. Strategic human resource management is concerned with creating a competitive advantage for organizations by closely aligning human resource processes, such as recruitment, selection, training, appraisal, and reward systems (Fornbrum, 1984). Research also indicated that top performance increasingly demands excellence in all areas, including leadership, productivity, and adaptation to change, process improvement, and capability enhancement (knowledge, skills, abilities, and competencies). Wright and McMahan (1992) agree and suggest that HRM can become a competitive advantage for organizations in terms of improving organizational performance if it more closely aligns its practices with strategic management efforts. (Porter, 1985).  It is no doubt, that improved organizational performance is the only way to lead to successful business. But there are so much different way to improve organizational performance. According to research, there are some directions to improve organizational performance.


Cited by: 180


Project Performance: Implications of Personality Preferences and Double Loop Learning

Dr. Karla M. Back, University of Houston, Houston, TX

Dr. Robert Seaker, University of Houston, Houston, TX



The process of managing and implementing a project is typically more dynamic than what an initial project plan would indicate. Projects exist within organizational as well as economic contexts designed and are executed by human beings.  When such influences are considered collectively, chances are that a successful project will have required a series of reassessments and adjustments throughout the project’s duration. Given the nature of most project environments, what allows a project to meet its business and performance objectives in the most cost effective and timely manner?  A proposed theory contends that as organizational and external environments become more complex, projects must evolve to be more organic in nature.  This is accomplished by building a team that practices, incorporates, and nurtures double loop learning – a phenomenon that refers to an individual’s capability and propensity for challenging accepted rules and parameters that decisions or actions face.  It is also postulated that the tendency toward thinking and behaving in this way is correlated with certain aspects of an individual’s personality.  Therefore, project success may actually be determined at the time individuals are selected for the project team – that is, prior to any formal planning and implementation of tasks.  It is common that decision-making environments allow for re-assessments and adjustments.  Executives such as CEOs and marketing managers change directions all the time.  If rational and not ad hoc in nature, it is reasonable that strategies, operating objectives, and resources continue to be made relevant for the sake of driving shareholder value. 


Cited by: 34


The Dollar Value of Improved Customer-Oriented Retail Sales Personnel

Dr. Edward Kemery, University of Baltimore, MD

Dr. Gene Milbourn, University of Baltimore, MD



It is argued that by failing for focus on the customer orientation of its sales clerks, an organization could place itself at a competitive disadvantage.  A study was conducted which found that a self-report measure of trait hostility correlated with supervisory ratings of job performance of sales clerks.   Although the magnitude of the obtained correlation was low (r=. 16), utility analysis demonstrated how even a selection instrument of such “modest” validity can produce a significant bottom-line payoff to an organization in some instances. Obtained findings also argue for continued investigations of theoretically meaningful personality-performance hypotheses. There are several options available for increasing the level of employees’ customer orientation.  One strategy is to hire job candidates who are likely to interact with customers in positive ways.  This strategy involves incorporating predictors of customer oriented selling (COS) into the sales personnel selection system.  A second strategy is to provide training to teach job specific consumer-oriented behavior.  A sales clerk position involves more than job customer contact.  Along with sales duties, an employee is expected to run a register, keep track of inventory, and maintain displays.  With these varied responsibilities, an employee’s immediate workload may make it difficult to respond to customers’ needs in a timely or tactful manner.  However, for effective customer relations, a high level of COS should be maintained despite current workload demands.  It follows that training programs for new hirees, as well as periodic refresher course for incumbents, should emphasize COS, particularly in “difficult” situations.  A third strategy is making COS an explicit component of employee evaluation.  That is, periodic supervisory evaluations targeting COS would provide feedback to employees and could serve as input into salary or other employment decisions.


Cited by:


Gaining a Competitive Advantage from Advertising: Study on Children's Understanding of TV Advertising

Dr. Ali Khatibi, Multimedia University, Cyberjaya- Malaysia

Dr. Ahasanul Haque, Multimedia University, Cyberjaya- Malaysia

Dr. Hishamudin Ismail, Multimedia University, Cyberjaya- Malaysia



For many years, TV advertisers have produced commercials that are designed to attract and hold the attention of children of all ages. As a result, there has been increasing controversy regarding whether these commercials are fair since they are intended to persuade children who are not mature enough to critically evaluate the messages presented. In this study, verbal and non-verbal measurements were used to investigate whether age, gender and parental influence have an effect on the understanding of TV advertising. The study would measure two components of understanding TV advertising: the recognition of the difference between programs and commercials and the comprehension of advertising intent. ANOVA analyses were performed to assess the effect on age, gender, parent-child interaction and parental control of TV viewing: one for each measure of understanding of TV advertising. In addition to determine among which groups the true differences lie, other test was conducted. The Least Significant Difference (LSD) method was performed for the purpose.. Research found that majority of children aged between five and eight have some understanding of TV advertising, they are capable in differentiate program and commercials especially if this understanding is measured by non-verbal rather than verbal measure. However, the results based on verbal measures are not as conclusive. The findings also indicated that child's age has a substantial positive effect on the child's understanding of TV advertising. This effect pronounced for verbal measure of comprehension intent for advertisements.  Results also showed a small but significant negative effect of parental control of TV viewing, in which a high control of TV viewing result in a relatively low understanding of TV advertising.  TV advertisers have produced commercials that are designed to attract and hold the attention of all age’s children from many years.


Cited by: 14


Study of the Relationship between Perception of Value and Price and Customer Satisfaction:

The Case of Malaysian Telecommunications Industry

Dr. Hishamudi Ismail, Multimedia University- Cyberjaya, Malaysia

Dr. Ali Khatibi, Multimedia University- Cyberjaya, Malaysia



The objective of this study is to examine the co-relationship between customer satisfaction, service quality and perception on value for leased line service in Malaysia telecommunication industry.   In conducting the survey, the authors distributed the questionnaire to 245 respondents by using three data collection techniques i.e. personal interview, telephone interview and mail survey.  Findings indicate that there is a relationship between the customer satisfaction and service value. The empirical findings in this study also indicate there is a significant relationship between overall customer satisfaction level and overall quality of service and the tested variable i.e. perception on the current price and the perception on the current value.  In this study, the authors suggest that in order to increase value of service, enhancement should be concentrated more on the service quality aspect rather than customer satisfaction. Malaysia welcomes the advent of the Information Age. In this era, information can flow easily and freely regardless of distance and territorial boundaries. This will promise the world the most cost-effective and liberal way of sending information, ideas, people, goods and services across borders. In view of this, the government had embarked on a project called the Multimedia Super Corridor or MSC. The prime objective is to help Malaysian companies to test the limits of technology and prepare themselves for the future. The MSC will expedite Malaysia's entry into the Information Age, and will also help to actualise Malaysia’s Vision 2020. This corridor will bring together an integrated environment with all the unique elements and attributes necessary to create the perfect global multimedia climate.  MSC is not standing on it own. It is supported by a high-capacity, digital telecommunications infrastructure designed to the highest international standards in capacity and reliability.


Cited by: 28


How is Market Efficiency Disappeared? Comparing the Opening Position and Closing Position Simulation Results

Ching-Wen Lin, Takming Institute of Technology, Taipei, Taiwan

Dr. Kuang-Hsun Shih, Chinese Culture University, Taipei, Taiwan

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



This study intends to examine the market efficiency on the Taiwan Electronic Index (TEI) in terms of predictability of Neural Networks, and also attempts to compare the simulation results of using opening position and closing position. The neural trading system informs 14-15 transaction opportunities based on domestic and international information in the testing period. This investigation suggests that using opening position may reflect superior trading information, and that this information is diluted with the passage of time. This study intends to examine the market efficiency on the Taiwan Electronic Index (TEI) in terms of predictability of Neural Networks, and also attempts to compare the differences of using opening position and closing position to simulate TEI trading.  Fama (1970) initially defined an efficient market as one in which prices always fully reflect the available information. Scholars such as Rubinstein (1975), Cornell and Roll (1981), and Brennan and Copeland (1988) extended the concept of market efficiency and tried to explain it from several different viewpoints, such as the costs of intermediaries and information costs. In a defined efficient market, the only way to earn positive profits consistently is to develop competitive advantages; in which case profits may be viewed as the economic rents that accrue to this advantage.  A vast amount of literature has been devoted to the application of Artificial Neural Networks (ANN) in the finance and investment fields. For example, Dutta and Shekhar (1988) applied neural network technology to bond rating evaluation.  Malliaris, and Salchenberger (1994) applied ANN to predict option volatility.  Chiang et al. (1996) apply a back-propagation algorism to forecast the performance of U.S. mutual funds.


Cited by: 1


Business School Curriculum: Can we learn from Quantum Physics?

Dr. Steven Tippins, ARM, Roosevelt University, Schaumburg, IL



This paper explores the development of the curriculum within business schools.  It posits that changes may be needed and suggests that the work within areas such as quantum physics may be a place to start the reevaluation. If you peruse the undergraduate catalogue at many colleges and universities striking similarities appear.  Beyond the nice pictures of students enjoying student life or having a meaningful conversation with a professor, the real similarities begin to reveal themselves when one looks at the curriculum.  Of the approximately 120 credits that a student must take to graduate why do most schools require the same courses?  Is business such a science that we know exactly what must be taught, how it should be broken up, and in what order?  One of the duties within the realm of academia is service.  It is not uncommon for a curriculum committee (or any variation of that name) to periodically look at the curriculum to see if it is appropriate for the student body in question.  Whether this task is internally driven by a desire to provide a good product or externally driven by the need to comply with accreditation guidelines, analysis such as this is good.  To paraphrase, an unexamined curriculum is not worth offering.  Many times one of the first questions that arises when curriculum review is broached is a form of “what is everyone else doing?”  Whether it is a formal survey of competitors or copying top programs, business school curriculum development can tend toward incestual.  The curriculum at many, if not most, schools may be exactly what is needed.  However, there may be ways of looking at what is taught and its overarching structure that may be helpful.  Some of the basic tenants that have been developed in the field of quantum physics may be helpful. 


Cited by: 12


Ally Strategic Alliance with Consumers? Who Care?

Feng-Chuan Pan, Tajen Institute of Technology and I-Shou University, Taiwan



While strategic alliance is widely adopted by firms to compete either in domestic or cross-national markets for various advantages, and the customer and consumers are viewed as the center of any marketing activities, there are none or few of researches place significant focus on the role of the customers/ consumers in the decision of strategic alliance. The author conducted a meta research and citation analysis on main academic literatures and found only a tiny fraction of researches involve customers / consumers in alliance related studies whether in domestic or international contexts. The author suggests the need to extensively and directly involve customer / consumer as the center in the research of strategic alliance, so as in real business world, particularly for those international alliances that normally cross over distinct cultures. Before Brief and Bazerman (2003) expressed their expectations to involve consumers in the management studies in its editor’s comments in a highly prestigious journal, Academy of Management Review, customers and consumers have being the center of the marketing activities and the core of missions of almost all profit or non-profit organizations. Compared to other input factors, consumer is the most valuable resource (Duncan and Moriarty, 1998) on which the essential foundation for competitive advantage is building. In response to the fast changing environment, plenty technical-efficient skills and managerial knowledge and practices have been developed and adopted to reduce the operating cost and enhance business efficiency by which assure the firms survival and growth.


Cited by: 3


Knowledge Management Initiatives: Exploratory Study in Malaysia

Dr. Badruddin A. Rahman, Universiti Utara Malaysia, Malaysia



A study on Knowledge Management (KM) initiatives was conducted on a sample of various categories of organization in Malaysia. The categories were companies listed in the Kuala Lumpur Stock Exchange (300 of a total of 500 companies), government Ministries and Departments (30), educational institutions (80), small and medium size industries (100), the electronic industries (150) and government-owned agencies (10). About 303 questionnaires were returned and the preliminary findings showed nearly half of the respondents were reporting that they already established formal knowledge management initiatives in their respective organizations. This was evident amongst organizations in the education sector, government own organizations and government departments and/or agencies. Nonetheless, the findings also showed that the Malaysian private sector was slowly catching up to meet the challenges of the competitive business environment.  The key characteristics identified from leading companies that have successfully leverage their assets provide a fertile ground for developing a knowledge management strategy. Companies that want to leverage this asset must approach knowledge management with a focus on their core competencies and tie those in very tightly to the business strategy and vision (Tiwana, 2000). The decades of the last century saw corporations locked in a struggle to out-do one another and in the 21st century will see organizations in a struggle to out-know one another. More than half of the organizations listed in the Fortune 500 in 1993 are no longer in the list today. Even icon names such as Sears and McDonald find themselves in a slump. “What are we doing wrong?” asked some corporate leaders and shareholder. Whilst they are comfortable discussing the management of people, products, financial resources and operations, they are not comfortable when discussing the management of knowledge!


Cited by: 57


Alternative Panel Estimates of Elasticities for Cigarette Demand in the U.S.

Su-Chen Yang, Chung-Hua University, Taiwan

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

Dr. Jian-Fa Li, Chin Min College, Taiwan



This paper presents a set of more refined estimates of demand for cigarettes in the U.S.  It was found that the dynamic fixed estimator (DFE) outperforms the pool mean group estimator (PMG) and the mean group estimator (MG) in the U.S. cigarette market from 1961 to 1997.  The estimated short-run price elasticity is -0.122 (from the DFE), and the long run price elasticity is -0.716 (from DFE) over the period from 1961 to 1997.  This provides better understanding if the price increases of cigarettes cover settlement costs in the future.   The elasticity of demand for cigarettes plays a crucial role in both the pricing decision of cigarette firms and the government policy to mitigate medical costs from cigarette smoking.   Literature abounds in estimating the price of elasticity (see Table 1).  The demand for cigarettes in the past was estimated either from time series data or from cross-section data (Lyon and Simon, 1968; bishop and Yoo, 1985; Keeler, 1993; Coats, 1995).  Without considering the specific state laws or changes in consumer tastes over time, biased estimations may result.  More recently, researchers have attempted to use the panel data approach to avoid the estimation problems facing either time series data or cross-section data (Baltagi and Levin, 1986 and 1992; Becker, et al., 1994; Keeler, et al., 1998; Baltagi, et al., 2000; Baltagi and Griffin, 2001).  Although a panel estimator might be a better alternative, not all researchers agree on the fundamental assumption: homogeneity of slope coefficients of different regions.  Pesaran, et al. (1999) proposed a new approach (Pooled Mean Group Estimator (PMG)), which constrains long-run coefficients to be identical but allows in the short run the slope coefficients and error variances to be different among groups. 


Cited by: 3


Purchasing Power Parity and the Base Currency Effect: A re-examination

Dr. Khalifa Hassanain, United Arab Emirates University, Alain, U.A.E.



This article reexamines the base currency effect for Purchasing power parity theory. The test is conducted using a newly developed nonlinear IV unit root test that accounts for cross correlation for panels made of twenty-one base currencies for industrial countries. We use annual data and allow for different dynamic structure over the free float era. While the choice of the base currency matters for the annual data, the week rejection occurs mostly with European currencies. The rejection is not strong using the German mark. The null is rejected even using the dollar and the yen as base currencies. Volatility appears to be the only significant explanation for the base currency effect. The IV test results show that cross correlation does matter for base currency invariance.  The Purchasing power parity theory (PPP) states that the nominal bilateral exchange rate et, which is the relative price of two currencies, should adjust in equilibrium to reflect their purchasing powers. The theory assumes that all goods are identical in both countries, that transportation cost, and trade barriers are very low. Recently there has been an increasing evidence to suggest that purchasing power parity does in fact hold as a long run phenomena. These studies used mostly the panel testing procedure, a number of these studies found stronger rejection when the German mark rather than the US dollar is used as abase currency  e.g. Jorian & Sweeny (1996) Papell (1997) and Papell and Theodordis (1998) to mention some. Engel et al. (1997) , argued that the same sets of real exchange rates generated by different choices of base currencies are linear combinations of one another, thus, changing the base currency does not change the information that is used in the estimator, only it's configuration i.e. its interdependence.


Cited by:


Perspectives in Consumer Behavior:  Paradigm Shifts in Prospect

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

Dr. Turan Senguder, Nova Southeastern University, FL



Despite its adolescence, consumer behavior as a discipline has attained a crowning position in marketing.  Many professionals and academics characterize consumer behavior as the key to contemporary marketing success.  Over the years, various approaches based on social sciences have been proposed and applied to teaching and researching the consumer.  Prompted by their ever-increasing complexities, recently the interest in social sciences seemed to have waned.  Although there have not been seismic changes in the field, there have been some shifts in paradigms. As the discipline develops, one important question is to ask as to what approach to adopt for teaching and researching consumer behavior.  To broaden the underpinning theories of consumer behavior, paradigms outside the social sciences could very well be tapped for additional understanding the complex nature of the consumer.  Several frontiers of other sciences seem promising for the understanding the consumer.  As is explained in this paper, the prospects for an interdisciplinary approach outside the family of social sciences appears brighter than ever for thinking outside the “black box” (i.e., mind) and for contributing to its dynamism.  That human behavior is complex, replete with controversies and contradictions, comes as no surprise to marketing academicians as well as practioners.  Consumer behavior is no exception.  Against the backdrop of widespread recognition of consumer behavior as being the key to contemporary marketing success (Hawkins et al. 2003), the fundamental question has been as to what approach to use in the study and teaching of this fascinating academic field?  As Spiggle and Goodwin (1988), Tan and Sheth (1985), and van Raaij and Bamossy (1993) have presented articles in their readings books, consumer behavior over the years, has been the subject of many models and intellectual arguments.  There have been a number of debates between positivistic and interpretive consumer researchers (Hudson and Ozanne 1988). Being a dynamic field, such a condition is normal.  


Cited by: 31


A Model for Web Server Security

Dr. Someswar Kesh, Central Missouri State University, Warrensburg, MO

Dr. Sam Ramanujan, Central Missouri State University, Warrensburg, MO



Organizations are now increasingly dependent on their web servers for business as well as to disseminate both mission-critical and non-mission critical information.  The core and peripheral business of many organizations as well as their image depend heavily on their web sites that reside on their web servers. At the same time, incidents of attacks on web sites by hackers with a multitude of motives have increased significantly in recent years. It is therefore essential to secure web servers to the maximum possible extent.  This paper discusses various facets of web server security and presents a model for web server security based on an analysis of the threats and tools and technologies available to protect these web servers.  With organizations increasingly performing businesses over the web and using the Internet to disseminate information, web servers have became a key component of an organization’s survival. The cost of downtime due to hackers runs into billions of dollars. It is therefore imperative that organizations use the best possible means for protecting the web-server(s).  This paper provides a model for web-server security and makes recommendations on how the model can be used for developing or improving web-server security.  To develop the model, the relationship between the components of web server security is analyzed in pairs.  First, the relationship between the security needs of web servers and the threats to web server security are analyzed. Then, the relationship between threats and technologies to counter the threats and finally, the relationship between technologies and tools to implement the technologies are analyzed.  The model can be useful both for analyzing the current weaknesses of web server security or design a new web-server security infrastructure. 


Cited by: 4


Methods for Maximizing Student Engagement in the Introductory Business Statistics Course: A Review

Dr.  Charles F. Harrington, University of Southern Indiana, Evansville, IN

Dr. Timothy J. Schibik, University of Southern Indiana, Evansville, IN



Suggestions are offered to create a collaborative teaching environment where active learning is the primary method used to teach business statistics.  Students often claim to find the initial experience with business statistical analysis uninteresting, inapplicable, and uninspiring. The faculty-at-large whether from research universities, comprehensive colleges, or private institutions report frustration in integrating activities designed to invigorate and energize student engagement in first year business statistics courses.  Various alternatives to the lecture class format are suggested in an attempt to encourage instructors to try alternative pedagogies.  The intellectual and practical engagement of students in the undergraduate business statistics curriculum poses significant challenges to faculty regardless of institutional or student body characteristics.  Students often claim to find the initial experience with business statistical analysis uninteresting, inapplicable, and uninspiring. The faculty-at-large whether from research universities, comprehensive colleges, or private institutions report frustration in integrating activities designed to invigorate and energize student engagement in first year statistics courses.  Historically, business statistics curricula have favored theory over application and cursory attention over practice and competency. However, student expectation, the demand of graduate education and workplace statistical competencies, and accreditation body criteria have shifted the curricular focus to the interpretation and meaning of statistics rather than on the rote memorization of abstract mathematical concepts.  


Cited by: 19


From Industrial Revolution to Managerial Evolution: The Case of IBM Credit Corporation

Dr. Hui-Kuan Tseng, University of North Carolina at Charlotte, Charlotte, NC



We ought to admit that we are living in a time of ever-changing. It is the first time in the human history that the humans are capable of producing mass information far more rapidly than they can absorb.  Humans have sped up the adapting process far beyond they can imagine. The rapid technological advancement has made the knowledge and information the key competitive advantages. The Quality Movement in 1980 brought to the consumers better quality products with lower prices.  The industry power is switched toward consumers ever since. The internationalizing of marketing and the overall raising of living standards brought opportunities on the one hand, and competition on the other. With the emergence of the economic powers in the Asia Pacific region, competition is increasing  globally. The global competitions, the prevailing of the Internet, and the soaring technology have a great impact on the conventional way of organization and operation. On the global scale, any managerial personnel with vision strive to discover innovative and competitive ways of management to adjust to the situation. The new industrial management models have been developed speedily. Nowadays, the participatory management, flattened organization, and empowerment have become the jargon of the industrial managers. A great number of companies strive to increase their competitiveness and efficiency.  The Industrial Revolution which first got its start in Great Britain changed the ways by how the world produced its goods.(1)  The effects of the Industrial Revolution were far-reaching. It brought new doctrines – Laissez-faire, Capitalism, Democracy into political arena.  Sabel [1985] and Matthews [1986], among others, studied the effects of the Industrial Revolution on politics.


Cited by:


 Developing New Markets for Turfgrass-sod in the United States

Dr. John J. Haydu, University of Florida, Mid-Florida Research and Education Center, Apopka, FL

Dr. Alan W.  Hodges, University of Florida, Food & Resource Economics Department, Gainesville, FL



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


Cited by: 5


Attrition of Agency in Real Estate Brokerage

Dr. Bruce Lindeman, University of Arkansas at Little Rock, Little Rock, AR



In the past two decades, the agency function in real estate brokerage has evolved from representation only of sellers to include agency representation of buyers. This evolution has led to a variety of problems, especially the likelihood of conflict of interest when agents attempt to represent both buyer and seller in a transaction.  Because the legal considerations are controlled largely by state law, attempts by the states to resolve these problems have provided an interesting variety of “laboratory experiments”, none of which (so far) seems to have achieved a desirable solution. This paper includes a history of past developments, a summary of the current situation, and some reflections upon the implications of these problems.  Under agency law, agents are employed by principals to represent them in some way. An agent must (1) obey the principal’s instructions (so long as they are within the law), (2) be loyal to the principal’s interests, (3) act in good faith, (4) use his/her professional judgment, skill, and ability, (5) account for all money belonging to others that comes into his/her possession, (6) perform agency duties in person and (7) keep the principal fully informed as to developments affecting their relationship. A key element of agency is that agents have a duty to act in the principal’s best interests, even if so doing requires the agent to act against his/her own personal best interests.  Since the inception of real estate license law a century ago, real estate licensees in all states have been defined as agents. Real estate licensees are limited agents: they solicited offers to buy, sell or lease and assisted and advise their principal during negotiation. Normally they do not, on their own, commit the principal to anything; it is the principal who decides how to respond to offers.


Cited by: 8


A Dynamic Econometric Modeling of the U.S. Rice Market

Dr. Sung Chul No, Southern University and A&M, Baton Rouge, LA

Dr. Hector O. Zapata, Louisiana State University, Baton Rouge, LA



Over the past three decades, developments in time series analysis have brought new approaches for combining structural characteristics of market models with stochastic processes that better represent available data: structural econometric and time series analysis (SEMTSA) and structural vector autoregressive model (SVAR).  The paper provides an empirical evaluation of these two approaches for the U.S. rough rice market.  Transfer functions, derived from the SEMTSA model, were estimated.  The turning point, RMSE, and MAPE evaluation revealed that the TF model provide accurate forecasts and greatly reduces forecasting errors relative to the existing structural and ARIMA models for the fundamental rice market variables in an out-of-sample period (1990-1999).  The research also addressed the empirical usefulness of combining structural-statistical properties of economic data in commodity modeling.  A comparative analysis of the impulse response functions revealed that the estimated effects in the VAR model of specific behavioral shocks often do not appear economically intuitive.  Having imposed structural relationships in a time series context, the study found that most response functions in the SVAR model are in confirmation with economic logic, with empirical results far superior to those generated from a VAR in levels.  These empirical findings in favor of the TF and SVAR models stem from a common methodological approach, which combines economic theory with statistical properties of time series. 


Cited by:


From General System Theory to Total Quality Management

Dr. Te-Wei Wang, Florida International University, Miami, FL



This paper evaluates the theoretical ground for total quality management (TQM). General systems theory (GST) is the referenced theoretical framework. TQM and GST are contrasted side by side from two perspectives: theoretical assumptions and implementation methods. The comparison between system approaches and TQM practices show that TQM is a true system approach. TQM provides principles and techniques implement GST. TQM utilizes cybernetic principle to deal with traditional efficiency and productivity problems. It also prescribes many practical methods and technique for building a learning organization.  TQM has long been criticized by the lack of guiding theories (Sitkin et al, 1994). Starting in the 1990s, many researchers have tried to put TQM under rigorous theoretical examination. For example, Grant, Shani, and Krishnan (1994) compared TQM with traditional management theories. Hackman and Wageman (1995) accessed the coherence, distinctiveness, and likely perseverance of the TQM philosophy. Dean and Bowen (1994) also found substantial overlap between TQM and management theory. Following their works, this paper describes and examines TQM from the perspective of general system theory (GST).  Why study TQM through GST? First of all, TQM and GST have many similarities. TQM and GST both covers great deal of the same ground of management theories. In Dean and Bowen’s (1994) words, “Both TQM and GST are considered as Interdisciplinary studies and they often transcends the boundary of existing theories.” Furthermore, GST is a meta-theory which can be used to bridge many simpler models with different assumptions. It is believed unavoidable for social scientists to study systems (Kast, & Rosenzweig 1972; Bailey, 1992:63; Hanson, 1995, Kaynak 2003).


Cited by: 95


Compensation Structure, Perceived Equity and Individual Performance of R&D Professionals

Jin Feng Uen, National Sun Yat-sen University, Taiwan, R.O.C.

Shu Hwa Chien, National Sun Yat-sen University, Taiwan, R.O.C.



In order for individuals to improve their work performance they must be sufficiently motivated and compensation is the most important source of motivation for professionals. A major issue in designing a compensation structure for such individuals is the equity they perceive they are gaining. For this reason, this research discusses the relationship between compensation structure, perceived equity and individual performance. After surveying 258 R&D professionals from high-tech organizations in Taiwan, we put forward the argument that skill-based pay and job-based pay influence R&D professionals into believing they are receiving an enhanced equity which will then lead to a better performance on their part. High-tech organizations succeed through a combination of innovation, conceptualization, and commercialization of new technological ideas (Newman, 1989). They emphasize techniques in business strategy; and investment in R&D activities accounts for a relatively high proportion of their total expenditure (Milkovich, 1987). It has long been recognized that R&D professionals function as a separate occupational group in manufacturing organizations with a remit to provide those organizations with a competitive edge. Therefore, in order to gain this competitive advantage it requires R&D professionals in high-tech organizations to be properly motivated.  Compensation is a critical factor to consider when strategic business planning is being undertaking (Lawler, 1995) since it is not only a question of labor costs but also employee motivation.


Cited by: 67


The Content Continuum: Extending the Hayes & Wheelwright Process-Product Diagonal to Facilitate Improvement of Services

Dr. Tony Polito, East Carolina University, Greenville, NC

Dr. Kevin Watson, University of New Orleans, New Orleans, LA



The explanatory power of the Hayes & Wheelwright Process-Product Matrix, as well as the diagonal embedded within it, fails under counterexamples of mass customization. When the diagonal is extended into the realm of service products using Schmenner’s Service Process Matrix, an expanded framework emerges. That framework, herein coined The Content Continuum, appears to be highly explanatory and finds good fit with many existing service classification schemes. A number of Original Levi's retail outlets offer made-to-order women's bluejeans on a mass customization basis. Customer measurements are entered at the POS terminal and directed to a numerically controlled cutting device at the company's Tennessee plant. Levi's customization strategy effected a 300% increase in sales and a simultaneous reduction in inventory at introduction (1994a). Toward further improvement, the company has co‑developed a point‑of‑sale "body scanner" expected to decrease response time and improve the quality of the process (1994b). The application is not unique; Tom Peters notes a similar process for the tailoring of suits at Saks Fifth Avenue (Peters, 1987). Anderson windows, Motorola pagers, and Hallmark Create-A-Card vending machines provide examples of mass customization from other industries. Even McDonald's, the bellwether of Levitt's industrialized service (1972, 1976), now carries hundreds of menu items targeted by region, rotates specialty items seasonally or monthly, and offers its once standardized burgers on an assemble-to-order basis. In some ways, such mass customization (Pine II, 1993) implies a shift towards craft shop production, including higher product heterogeneity and increased levels of customer involvement, specification, and delivery convenience.


Cited by: 17


Japan’s Liquidity Trap: An Empirical Analysis

Sujata Jhamb, IILM, Institute for Integrated Learning in Management, New Delhi, India



The liquidity trap is a phenomenon which may be observed when the economy is in severe recession or depression. The real GDP stops growing and the price level are stable or falling. The nominal interest rates are close to zero and cannot decline further, the speculative demand for money become infinitely interest elastic. Any increase in supply of money will not be used to purchase government bonds but will be hoarded as idle cash balances. Money and short-term government securities become perfect substitutes as the yields from holding both are zero. In such a scenario only policies other than monetary policy can help raise output and employment.  This paper studies the prolonged recession in Japan during the period of the nineties and finds that liquidity trap has been one of the main reasons for ineffective monetary policy leading to a limping Japanese economy. The current liquidity trap can we treated as ‘partial paralysis’ of the Japanese financial system. Saving behaviour is important because it helps to determine the evolution of future consumption opportunities. Japan’s post war savings behavior can be viewed in this light. Saving has enabled Japan to increase stock of assets rapidly, increase worker productivity, rapid rates of economic growth and raise standard of living.  A comparison of Japanese gross domestic savings with other major industrial countries for the 30 year period - 1970-2000 shows us that, there are wide disparities in saving behavior across countries and by large margins: The other countries are clustered in terms of their saving rates, with U.S. & U.K. at low end of the spectrum.


Cited by:


Teaching a Research-Oriented, Graduate Global Marketing Course to Adult Learners in a One-Month Format

Dr. Juan España, National University, La Jolla, CA



This paper presents the author’s experience teaching a heavily research-oriented, applied graduate course to a class of working adults in a one-month format. A common concern among instructors of research-oriented courses in a compressed format is that the term length might not allow for a thorough treatment of the theoretical issues involved and their application to real-life situations. As the author explains, appropriate coverage can be achieved within the framework of a one-month course format. The key to success is the early use of efficiency-enhancing mechanisms aimed at, among others, upgrading students’ library and research skills at the very beginning of the course, facilitating and jumpstarting students’ research and ensuring high levels of student participation. There is a growing body of research indicating that compressed teaching formats such as one-month courses lead to learning outcomes that are at least comparable, if not superior, to conventional semester-long formats lasting for 12-16 weeks (Serdyukov et al, 2003). One-month courses are taught in a sequential fashion, one course at a time, unlike the parallel, standard three-course load typical of semester-long courses. This sequential process allows students to fully concentrate on one subject area. Some authors provide support for the belief that compressed formats might actually be more efficient because “concentrated study may cultivate skills and understanding which will remain untapped and undeveloped under the traditional system” (Scott and Conrad, 1992). In the same vein, psychological research indicates that “deep concentration”, “immersion” and “”undivided intentionality” lead to “optimal experiences” (Csikszentmihalyi, 1982).


Cited by: 9


Predicting Impending Bankruptcy Using Audit Firm Changes

Dr. Yining Chen, Ohio University, Athens, OH

Dr. Ashok Gupta, Ohio University, Athens, OH

Dr. David L. Senteney, Ohio University, Athens, OH



Unlike prior research, we investigate the incremental explanatory power of auditor changes beyond the information conveyed by traditional financial statement ratios in predicting bankruptcy. We find that auditor changes are important in predicting impending bankruptcy and convey important information not reflected in traditional financial statement ratios alone.  In fact, we find compelling evidence that directional knowledge regarding auditor changes such as changing from large accounting firms to small accounting firms provide incremental explanatory power in predicting impending firm failure beyond what is conveyed traditional financial statement ratios and auditor changes considered jointly.  Although the existing relevant literature provides no empirical evidence in this regard to our knowledge, this result is intuitive as one motivation for clients to change audit firms is to seek less conservative professional auditors as smaller audit firms may be as a strategic response to manifestation of the financial statement effects of bankruptcy.  The probability of firm financial failure is crucially important information to shareholders, creditors, management, and the various company stakeholders and the assumption of firm status as one of being a “going concern” is important to the internal and external constituencies as well.  In practice, professional groups of both auditors and security analysts serve as an effective market mechanism for monitoring firm financial health and communicating to the various external constituencies the likelihood of firm failure.  Generally, three approaches are used to predict impending firm bankruptcy: Financial statement ratio-based prediction:  Beaver [1966] and Altman [1968] in addition to many others (c.f., Altman, Haldeman, and Narayanan [1977], Collins [1980], Ohlson [1987], and Platt and Platt [1991]) have provided ample compelling empirical evidence establishing the financial statement ratio-based prediction model specification as the premier specification in forecasting impending firm failure.


Cited by: 21


Financial Crisis in Emerging Markets: Case of Argentina

Dr. Balasundram Maniam, Sam Houston State University, Huntsville, TX

Dr. Hadley Leavell, Sam Houston State University, Huntsville, TX

Vrishali Patel, Sam Houston State University, Huntsville, TX



In the past ten years, several emerging markets experienced severe financial crises: Mexico in 1994, Asia in 1997, Russia in 1998, Brazil in 1999, and Argentina in 2001. The patterns in these regions/countries are markedly similar. This paper will discuss the reasons for the financial crises in emerging markets with a focus on Argentina. The paper will discuss the policies of the Argentine government before the crisis, the underlying factors that led to the crisis and the resulting effects of the crisis. Finally the paper will discuss some of the recommendations to solve Argentina’s problems.  The mid 1990’s was marked with severe crises in a number of emerging markets. It started in 1994 with the Mexican crisis.  Asia’s devastating financial crisis hit the global market, followed by Russia’s and Brazil’s financial crises in subsequent years.  Most recently, Argentina has been drastically impacted financially.  Most of these financial crises started with a currency crisis. The common features of the financial crises include the vast appreciation of domestic currencies, skyrocketing interest rates and large capital outflows. By definition, emerging markets are highly dependent on imports and rely on few export activities. This import/export inequity exacerbates exchange rate volatility; any movement of exchange rate significantly affects the market structure. For several years, investors and the IMF considered Argentina as the emerging market’s poster child for success.  Argentina had aggressively privatized state-owned businesses, defeated inflation, strengthened its banking system, and resolved to keep the economy open and the currency stable. Initial results were overwhelmingly positive, but unfortunately, not long-term. Argentina had pegged its currency to the U.S. dollar at a fixed one-to-one rate.


Cited by: 8


Measuring and Reporting of Intellectual Capital Performance Analysis

Dr. Junaid M. Shaikh, Curtin University of Technology Malaysia



This paper reviews several internal and external measures of intellectual capital. Internal measures – such as the Balanced Scorecard – are used to manage, guide and enhance a firm’s intellectual capital so it can be leveraged to generate greater value for the company. External measures, which include market-to book value, Tobin’s Q and Real Option Theory focus on investors and others attempting to value a company (provides a signal to external parties). Here, greater emphasis is placed on external reporting and consequently is subject to accounting standards and financial regulations - although, a specific accounting standard that adequately addresses intangibles has yet to be developed. There is indeed much to support the assertion that IC in the new century will be instrumental in the determination of enterprise value and national economic performance. Stemming from this awareness of the value of know-how is a drive to establish new metrics that can be used to record and report the value attributable to knowledge within an organization. The task has been given impetus by the fact that early work appearing in the accounting financial reports of Swedish companies involves the application of non-financial metrics and focuses on intangible assets. This represents a significant departure from traditional financial and management accounting orthodoxy. Intellectual capital is becoming the preeminent resource for creating economic wealth. Tangible assets such as property, plant, and equipment continue to be important factors in the production of both goods and services.

Cited by: 149


Executive Compensation Contracts: Change in the Pay-Performance Sensitivity within Firms

Dr. Jinbae Kim, Korea University, Seoul, Korea



Contract theory predicts that the optimal compensation contracts depend not only on firm-specific factors but also on CEO-specific factors as well. However previous research in compensation generally focuses on the effects of firm-specific factors on the pay-performance sensitivity in compensation contracts. Using compensation data on 52 firms that have two CEOs in the sample period who have served for at least eight years, this paper investigates the changes in the pay-performance sensitivity within firms at the time around the CEO departure. Empirical evidence shows that firms change their pay-performance sensitivity after the CEO leaves, in a manner consistent with predictions from the contract theory.  Previous research provides various insights into the pay-performance sensitivity in executive compensation contracts. Jensen and Murphy (1990) measure the sensitivity of dollar changes in executive compensation to dollar changes in shareholder wealth and claim that the relationship is not strong enough to give CEOs adequate incentives. Haubrich (1994) and Baker and Hall (1998) argue that the sensitivity level reported by Jensen and Murphy may be enough to create incentives for the CEO and may be optimal under certain situations. Numerous other studies including Natarajan (1996), Baber et al. (1999) and Prendergast (2002) use the pay-performance sensitivity measure in order to empirically test various hypotheses.


Cited by: 11


Political Constraints and the IRS’ Tax Enforcement Actions

Dr. Vijay K. Vemuri, Long Island University, Brookville, NY

Prof. Donald P. Silver, Long Island University, Brookville, NY



The taxpayer compliance research mainly focuses on the taxpayers’ compliance decisions. However, taxpayer compliance is influenced by both veracity of the taxpayers and the enforcement strategies of the IRS. The perception of excessive coercive enforcement procedures may result in curtailment of enforcement authority of the IRS. The political processes available to oppose and reform enforcement policies differ for individuals and corporations. The opposition of corporations tends to be swift, well orchestrated, and concentrated on a particular enforcement issue. On the other hand, the opposition of the individuals may accumulate into taxpayer antagonism and may call for extensive reform of tax administration including enforcement policies. This paper analyzes the civil penalties assessed and abated to examine differences in penalties on individuals and corporations for the years 1978 to 2002. The results indicate that systematic differences exist in the incidence and the amount of penalties for these two groups. Further, time series of penalties for individuals exhibits significant auto correlation, suggesting a possibility of implicit budgets for penalties. The tax gap, the difference between the taxes the government is expected to collect, if every taxpayer reported income and paid taxes honestly and actual taxes received, is of considerable interest to legislators, the IRS, economists, and the popular press.


Cited by: 3


 Asymmetry in Farm-Milled Rice Price Transmission in the Major Rice Producing States in the U.S.

Sung Chul No, Southern University and A&M College, Baton Rouge, LA

Dr. Hector O. Zapata, Louisiana State University, Baton Rouge, LA

Dr. Michael E. Salassi, Louisiana State University, Baton Rouge, LA

Dr. Wayne M. Gauthier, Louisiana State University, Baton Rouge, LA



Over the past three decades, agricultural economists have tested whether the retail price response to price increases at a lower market level is similar to the retail price response to price decreases at the same market level. The majority of the empirical studies have focused on farm-retail price transmissions.  However, the price transmission effects between the farm and milling level are as important as the price transmission effects between the farm and retail level, especially for rice.  Milling transforms rough rice into the more desired milled rice. It is the milled price that transmits changes in farm prices to the final consumers. Thus, the paper tested the null hypothesis that decreases in milled prices resulting from decreases in farm prices are as fast as increases in milled prices resulting from increases in farm prices in the major rice producing states, Arkansas, California, Louisiana, and Texas.  Adopting a newly developed econometric methodology, momentum-threshold autoregressive model (M-TAR), the paper found strong evidence indicative of symmetric pricing behavior for milled rice in the states of Arkansas, California, and Texas.  For Louisiana rice, the results suggested otherwise: the Louisiana mill prices responded much faster when the milling margins tightened due to farm price increases than when the margins became wide due to farm price decreases.  For over three decades, agricultural economists have tested various markets for evidence of retail price asymmetry. 


Cited by: 4


Application of Thermodynamics on Product Life Cycle

Dr. Kuang-Jung Tseng, Hsuang Chuang University, Hsin Chu, Taiwan, ROC



Thermodynamics is a physical science deal with the interactions of matter and energy.  It contains the law of the energy conservation and the law of entropy that tends to increase in a closed system. The author has applied these laws to constrain the processes by which raw materials are transformed into consumable goods and the goods are distributed afterwards. The size of the sales force can be determined by introducing the temperature concept into thermodynamics to represent hot or cold consumable goods. With the concept that entropy increases in a closed system, which is similar to the distribution of consumable goods into the system, an ideal innovation of the product life cycle (PLC) can be determined.  In order to modify the phenomenon of the product life cycle, a parameterα,  which relate to the management efforts as well as the development and services efforts , is introduced. As a result, the PLC curve can be manipulated due to the value of α. The parameterα is related to the product quality, sales services and the degree of newness of the application of the product. While physical sciences deal with the interactions of matter and energy, economics can be said to deal with the manufacturing and exchange of goods and services.  Marketing management is about how to locate the customers and distribute goods efficiently accordingly; hence, a proper production plan is required.  Because goods and services incorporate matter and energy, thermodynamics are clearly relevant to economics and marketing management [Ayres and Nair, 1984]. In particular, one can expect the laws of thermodynamics to impose constraints on economic processes.  


Cited by: 8


Regionalization and Specialization: A Theoretical Contribution

Dr. Charbel M. Macdissi, CEDE, University of Antilles-Guyane, Guadeloupe



The study of the regionalization and specialization deals with the behavior of a country inside the supra-national bloc and the correlations that may exist between the fact to belong to these institutions and the development of exchanges between their countries members. The institutional frame can take the form of common market agreements, cooperation or integration but also of commercial arrangements among the states. Thus, can we consider the institutional factors and the proximity as determinants of the commercial exchanges?. Thanks to the institutions and the common agreements between the countries of an area the intra-regional cooperation can and must expand also to inter-regional relations. However, this approach raises many questions: can we talk about a regional comparative advantage?. Must one be affiliated to one or several supra- national institutions?. Isn’t there sometimes a contradiction between the objectives followed by these different institutions?. How can we proceed to the intensification of intra-regional exchanges? How can we choose the specialization in order to develop the cooperation?. What kind of barriers could delay or even stop the regional cooperation?  The purpose of this paper is to try to contribute to answer some of these questions, to identify the new economic challenges of the regional cooperation and to study the main barriers to the constitution of intense regional exchanges.  The world trade has known an important growth in the last years: 6% in real and annual average between 1990 and 2001(WTO, 2002) and 11% in 2000. In fact, with 5984 billion dollars of exportation of commodities and 1460 billion dollars of exportation of commercial services in 2001, the globalization of the exchanges has affirmed itself.  However, and parallel to this globalization, we observe the development of a regional way, with the setting up of regional bloc, comparable to the success of the European Union. 


Cited by: 7


Critique and Insight into Korean Chaebol

Dr. Jonathan Lee, University of Windsor, Windsor, Ontario, Canada



This paper closely examines the management practices of one of Korea’s largest chaebols. Critique of this chaebol is based on interviews with number of managers still working for the company. It is clear from the discussion that there are many challenges that face the chaebols; however, these challenges are not necessarily unique to Korean chaebols.  South Korea (Korea) is the 11th largest economy in the world in terms of gross national product and 13th largest trading country as of 2002 (1). It has been and remains one of the fastest growing economies in the world. Many of the Korean chaebols or conglomerates are well known throughout the world, such as Samsung, Hyundai, LG and others. Although many consumers do not realize that they are Korean companies, some of these companies are among the world’s largest producers and exporters of memory chips, and they rank among the largest and most efficient steel manufacturers and shipbuilders in the world. These conglomerates also produce a wide range of products such as home electronics (TV, DVD, Computers, etc.) as well as mobile phones, machinery, cars, and so forth. In recent decades, chaebols have been extremely successful in carving out market shares in Europe, Asia, and North America. In effect, chaebols have been the engines that have driven the Korean economy to where it is today. Very few businesses in Korea can escape from the influence and grasp of these giant entities.  While the past success of these organizations is undeniable, the experience of recent years has brought renewed attention to the workings of chaebols, from both within and outside of Korea.  The Asian financial crisis of the late 1990s tarnished some of the luster of Korea’s economic “miracle.”  Although the crisis is past, the Korean economy may well be at a crossroads, in which past practices, even those by which Korea excelled in the past, should be critically evaluated.  


Cited by: 3


Golf, Tourism and Amenity-Based Development in Florida

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

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



Settlement patterns in the United States are increasingly based on environmental, cultural and recreational amenities and the perceived quality of life, rather than economic opportunities. This is especially true for the retired population, who are not dependent upon earned income. The state of Florida has experienced very rapid growth over the past 50 years due to tourism and amenity-based development. Many residential developments now feature golf courses and other recreational amenities. Golf is a highly popular recreational sport in America, with participation by over 20 percent of the adult population. In Florida, there are currently over 1300 golf courses, more than any other state.  Golf is an important activity associated with the large tourism industry in Florida. Economic characteristics and regional impacts of golf courses in Florida in the year 2000 were evaluated based upon survey data together with other published information and a regional economic model constructed using Implan. Survey results indicate that residential developments were part of 54 percent of Florida golf courses, with some 756,000 residential units having a total value of $158 billion. Golf industry employment was 73,000 persons. The book value of assets owned by golf courses was $10.8Bn, including land (58%), buildings and installations (26%), vehicles and equipment (10%) and golf course irrigation systems (6%). Land area owned by golf courses was 205,000 acres, with 147,000 acres in maintained turf. Travel expenses by golf playing visitors in Florida were estimated at $22.9Bn, of which $5.4Bn were attributed directly to the golf experience. Based on an Implan model for Florida, these expenditures had a total impact on the Florida economy of $9.2Bn in personal and business net income (value added) and 226,000 jobs. Golf courses had a positive effect on nearby property values in 18 selected counties, with total values for residential properties near to (within one mile of) golf courses averaging nearly $20,000 higher than other properties not near a golf course.


Cited by: 11


Explaining Embraer’s Hi-Tech Success: Porter’s Diamond, New Trade Theory, or the Market at Work?

Dr. Juan Espana, National University, La Jolla, CA



This paper analyzes alternative theories of competitive advantage and their ability to explain the commercial success of the Brazilian aircraft manufacturer EMBRAER in world markets. A survey of EMBRAER’s history reveals a company created by the Brazilian government out of national security considerations but able to transform itself over time into a vibrant commercial enterprise. Key to this successful transformation was the 1994 privatization and the formation of a number of strategic and operational alliances with international partners. EMBRAER’s case seems to transcend the neat demarcation lines drawn by adherents of existing competitive advantage theories, raising important questions about the conventional wisdom on the issue of how to create and sustain competitive national industries or firms.  Empresa Brasileira de Aeronautica S.A. (EMBRAER) is a manufacturer of commercial and defense aircraft founded in 1969 by a military Brazilian junta intent on providing Brazil with its own aircraft-manufacturing ability. It was conceived as a mixed enterprise, with the Brazilian government holding 51% of the voting shares and the rest dispersed among private investors. Production operations began in 1970 and the first Xavante, a trainer and attack/reconnaissance airplane was produced in 1971 under license by Aermacchi, the Italian aircraft manufacturer. The new enterprise broke even in 1971 and remained profitable until 1981. EMBRAER is headquartered in Sao Jose dos Campos, near Sao Paulo. From its humble beginning, it has grown into the world’s fourth largest producer of commercial aircraft with total revenues and net income of $2.53 billion and $222 million, respectively, in 2002.


Cited by: 12


Investigating and Modelling GATS Impacts on the Developing Countries: Evidence from the Egyptian Banking Sector

Dr. Mansour Lotayif, University of Plymouth Business School, Plymouth, Devon, UK

Dr. Ahmed El-Ragal, Arab Academy for Science and Technology, Alexandria, Egypt



Previous research studies focused on investigating the impact of GATS (General Agreement for Trade in Services) on the developed countries, whilst few studies investigated these impacts on the developing countries. This paper will investigate the following three main objectives: 1- To identify the impact of GATS on the Egyptian banking sector. Chi-square Goodness of Fit will be used for the purpose of defining whether the GATS impact on the Egyptian banking sector is positive or not. 2- The paper will elaborate the GATS impact by exploring the dependency relationship between twenty-five GATS impacts and seven demographic variables, for which Correlation analysis will be utilized. 3- Causality relationships are to be examined throughout modelling the variables that affect the perception of the GATS impacts (i.e. dependent variables), Multiple Regression (MR) will be used in this context. Compiling evidence from the Egyptian banking sector revealed that the perception of each GATS impact is affected by five of the predictor variables. These five are bank type (local or foreign), position of respondent, respondent educational level, respondent experience, and bank experienceGoldin et al. (1993); Brandio and Will (1993); OECD (1993); GATT (1993); Nguven et al. (1991); Frohberg et al. (1990); Deardorff and Stern (1990); Burniaux et al. (1990); and Trela and whalley (1990) argued that the benefits of trade liberalization, as a result of Uruguay round, will range from $119 to $274 billion coupled with an increase in global trade from 12.4 % to 17 % by 2005.


Cited by: 3


The Behaviors & the Statistical Properties of Emerging Markets’ Indices & Their Impact on Estimated Stock Beta:  The Case of ASE

Dr. Mahmoud A. Al-khalialeh, Kuwait University, Safat, Kuwait



This study examines the behaviors and the statistical properties of two alternative market indices introduced by Amman Stock Exchange (VWI & EWI), and their impact on estimated stock beta. The study predictions are examined by using 2206 observations of daily market index over a nine-year period (1992-2000). The study’s findings indicate that the mean of EWR is notably and significantly higher than the mean of VWR for most years and time intervals examined in this study. Additionally, findings suggest that the two market returns tend to get closer during bullish market conditions and diverge widely during bearish conditions. The variances of the two market returns vary significantly in the last four years. The implications for estimated beta are examined by estimating beta for a sample of 58 companies listed in ASE, using the two market indices and based on 246 daily index observations during 1998. Furthermore, the results indicate that the two market returns produce dissimilar betas; the market return with the larger variance (VWR) produces significantly lower beta than the market return with the lower variance (EWR)   The market index, which has been viewed as an indicator of the security market overall performance, is of considerable interest to professionals and researchers in accounting, finance and economics. A significant bulk of market based research in accounting and finance during the last three decades have been using the market index to estimate security beta and security returns beginning with Ball & Brown (1968).


Cited by: 3


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