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Vol. 17 * Num.. 1 * September 2011 The Library of Congress, Washington, DC * ISSN: 1540–7780 Online Computer Library Center * OCLC: 805078765 National Library of Australia * NLA: 42709473 The Cambridge Social Science Citation Index, CSSCI Peer-reviewed Scholarly Journal Refereed Academic Journal Indexed Journal Since 2001 All submissions are subject to a double blind peer review process. |
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New Method Approach Toward Efficiency Dr. Lee G. Demuth III, Johnson College, Scranton, PA
Abstract Adopting a new method approach on efficiency is an important decision for many companies and corporations. Employees and consumers have had to think up new ways on finding efficient and productive ways to operate products and machines. A new and imaginative method approach will be used in this article. The researcher shall identify a new method approach in operating products and machines in the workplace. This article will be based on critical concepts observed by Everett Rogers regarding the diffusion of innovations theory. The outcome is where the researcher will identify a new method approach regarding innovation. Example showed that the new method approach was significant in estimating the adoption of operating products and machines more efficient and productive in the workplace. Adopting a new method approach is an important decision for many employees and consumers in the workplace. The researcher will introduce a new method approach in this article. The focus of this article was on the current problem on operating labor-intensive products and machines more efficient way in the workplace. Employees and consumers find other ways to conserve and become more efficient as a solution toward adopting a new method approach in the workplace. Employees and consumers need to react more readily and radically to adopt a new method approach in this article. This article will view diffusion of innovation theory followed by the introduction to the new method approach will be viewed in this paper. The increasing use of technology in organizations motivates employees to embrace technology while at the same time regard it as a problem. Organizations use technology to provide increased amounts of information in decision making and to improve efficiency.
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A Longitudinal Analysis of Post-Merger Job Satisfaction for Marketing Faculty: The Rebound Effect Dr. William T. Neese, Bloomsburg University, Bloomsburg, PA Dr. Stephen S. Batory, Bloomsburg University, Bloomsburg, PA
ABSTRACT A multidimensional measure of job satisfaction originally developed in the sales literature was adapted for this study to analyze the impact of a department merger over time on marketing faculty members. Data from respondents were compared with that reported by marketing faculty who had most recently been split apart from an interdisciplinary department to form an autonomous unit and also the majority of peers who have never experienced any type of administrative restructuring. Results indicate that overall post-merger job satisfaction and satisfaction with peers, with the chairperson, and with students deteriorates for several years then begins to rebound in a positive direction as time heals old wounds. Finally, results consistently indicate that marketing faculty members who have never been through any restructuring are most satisfied with their jobs compared to their counterparts who experienced a stressful reorganization. According to Wilkie and Moore (2003), two or three universities that are now “Big 10” schools began the academic discipline of marketing approximately 100 years ago by publishing textbooks and designing courses focused on how to be more efficient and effective distributing agricultural products to the masses in America. Since its eclectic beginnings, the academic discipline of Marketing has struggled to break away from “parent” fields (e.g., Economics, Management, or Social-Psychology) and find its own identity. This movement is part of a bigger phenomenon in higher education, where individual specialists have long desired to adhere together as a cohesive administrative unit and be managed by one with academic credentials highly similar to their own (see for example Aggarwal, Rochford, and Vaidyanathan 2009).
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Evaluation of Learning Outcomes in Undergraduate Onsite and Online Accounting Courses Dr. Consolacion Fajardo, Professor, National University, California, United States
ABSTRACT This study will entail analysis of the results the Standardized Learning Outcomes Assessment Tests (SLOATS) that are being administered to the students both onsite and online in the Bachelor of Accountancy Program at National University (a non-profit, accredited, private university in higher education) over a five-year period for academic years 2004-2005 to 2008-2009. This is an internal direct measure of the students’ performance in accounting courses. The evaluation instruments were created and administered on an incremental basis starting initially with one course and adding on to a total of ten courses having the SLOATS in academic year 2008-2009. There are two goals: (1) to have a mean score of 3 out of 4 questions for each of the course learning outcomes and (2) to have a proportion of students achieving 75%. The scores are being analyzed and interpreted to determine the possible causes when goals are not met. The results of the analysis are being used as bases for improvement in the accounting curriculum to enhance the quality of students’ learning and increase teaching effectiveness. The current trend in educational assessment is geared to desired learning outcome approach Outcome relates to what a learner is expected to comprehend and be able to apply after the completion of the learning process (Stock etal, 2010). Desired learning outcomes are expressed in terms of competencies and skills that can be applied and evaluated. Thus, there is a correspondence among desired learning outcomes, competencies, assessment factors, assessment instruments, and teaching methods.
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Developing Successful Negotiation Models and Strategies for Health Care Managers Kristina L. Guo, Ph.D., MPH, Professor of Public Administration, and Professor and Director of the Health Care Administration Program, University of Hawaii-West Oahu
ABSTRACT This paper describes strategies and models for successful negotiations utilized by health care managers for training and development purposes. An effective manager should be able to skillfully manage problems and conflicts and develop creative solutions. The key is to follow a systematic approach for generating successful negotiation tactics that result in win-win solutions. This article analyzes the role of the manager as a negotiator and develops a methodical process to enhance managerial proficiency in negotiations. Understanding the importance of the negotiator role is essential to managerial training and development since this is critical to the ultimate success of health care organizations. Health care managers face many challenges to achieve organizational goals. Utilizing various strategies can be complex and difficult because success is dependent upon the ability of managers to manage effectively, develop strategies successfully, improve communication skillfully, and resolve problems readily. Perhaps the most important work of a manager is to assure that organizational problems are solved (McGinnis, 2007). Problems and conflicts in organizations are inevitable and unavoidable. They occur in all types of organizations, but are especially numerous in health care organizations due to the complexity of the health care industry that is characterized by high stress, high emotions, scarce resources, competition, intense regulations, and multiple stakeholders. All of these factors increase the likelihood of more problems and conflict in health care settings. A problem exists when the current state and desired state differ, and the role of the manager is to solve the problem by finding a way to reach the desired state.
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Strategic Impact of Incentive Programs for Loan Officers of Micro-Finance Institutions Dr. Jay Jiwani, Robert Morris University Illinois Dr. Jamaluddin Husain, Purdue University Calumet
ABSTRACT This study investigated the relationships between pay-for-performance incentive programs and the productivity of loan officers in microfinance institutions (MFIs). Loan officers’ performance was measured by five key performance indicators: new borrowers, portfolio value, average loan size, arrear rate, and default rate. Seven hundred and eighty-five MFIs from five continents were invited to participate in the survey, with a final sample of 95 loan officers and 112 supervisors of loan officers. Results indicate that (a) the arrear rate for loan officers with an incentive program is lower than for those without an incentive program, (b) larger incentives and the use of a computer to calculate the variable portion of the salary were associated with more new borrowers, (c) loan officers who worked at MFIs with larger incentives and where the default rate was used as one of the performance benchmarks tended to have larger average loan sizes, (d) loan officers who placed a high importance on promotion tended to have lower arrear rates than loan officers who placed less importance on promotion, and (e) when the average loan size was used as a benchmark, and when a loan officer considered promotion to be very important, they tended to have a lower default rate. The purpose of the study was to explore the impact of pay-for-performance on MFI outcomes. Specifically, this research identified contributing factors of financial incentive programs offered by MFIs, and it examined if loan officers’ incentive programs influenced productivity of the MFIs, and whether loan officers’ financial incentive programs influenced sustainability. The financial impact of MFI incentives was measured by the value of the portfolio, and social impact measured by the breadth of outreach.
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Online Buying Decisions in China Dr. Wen Gong, Howard University, Washington, DC Dr. Lynda Maddox, George Washington University, Washington, DC
ABSTRACT This survey of 503 Chinese consumers’ online shopping behavior reveals that Chinese are shopping more online than two years ago and use the Internet to look for new products and brands, search for information, compare products and brands, make purchases, and follow up after purchasing. They believe the Internet is a convenient, time saving and price competitive venue for shopping and enjoy the extensive information and brands. Chinese shoppers who frequent the brick and mortar counterpart are more likely to purchase online, and they seek good prices, customer service, and payment security. Income and marital status are the most influential in consumers’ online decision-making process. Age, education and Internet usage have impact at different stages of the process, while gender has little influence. China’s Internet penetration rate was 31.8 percent in June 2010, exceeding the world’s average of 28.7 percent (CNNIC, 2010; Gao, 2010; Internetworldstats.com, 2010). Although significantly lower than the U.S. (71.2 percent) (eMarketer.com, 2010) and other developed countries (Internetworldstates.com, 2010), China’s sheer size translates to 420 million Internet users (CNNIC, 2010), the world’s highest. The economic slowdown has curbed e-commerce growth in most world markets (budde.com.au, 2009), but China’s online retail market has been growing steadily with 87.8 million users shopping online in 2009 compared to 74 million a year before (CNNIC, 2009). Preliminary research suggests that young Chinese consumers will become avid online shoppers (Rein, 2008), but academics have suggested that China’s cultural preference for face-to-face business interactions combined with regulatory issues may inhibit this development (Raven, Huang and Kim, 2007). Although Western consumers’ online shopping behavior has been studied, little is known about other parts of the world such as China (Stafford, Turan and Raisinghani, 2004).
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Stock Price Reaction to Acquisitions in Banking Sector: An Empirical Analysis on Selected Asia Pacific Countries Prof. Mo T. Vaziri, California State University, San Bernardino, CA
ABSTRACT In this research we examine the abnormal return of banking acquisitions for the acquiring bank using an event-study methodology for selected Asian countries. Using data from 2001-2010, we find that acquisition announcements are generally associated with a gain in value for the acquirer in the long term. There are mix results in the short term among the Asia markets. In the six Asia countries, the market reaction of China, Hong Kong and Taiwan are similar to the announcement of bank M&A events. The results of Malaysia and Indonesia are different from other four countries. There is insignificant positive or negative performance of cumulative abnormal return to the announcement in Malaysia. During 2001-2007, the financial sectors in Asia-Pacific regions have experienced significant rise in the M&A activities as local governments begin implementing policies that encourage foreign investment and consolidation. The drive to consolidate has been particularly strong for banks in Taiwan, Indonesia, Malaysia, China, and Singapore. Also, with regulations for foreign entrance relaxing, many foreign institutions are seeking growth potential in the region’s banks by either forming tie-ups with or taking a stake in them. In China, the banking industry dominated the M&A scene, as foreign banks continued their march into the mainland. Foreign banks are positioning themselves to tap China’s huge growth potential in the areas of credit cards, wealth management and insurance products. Mega mergers between Standard Chartered with Taiwan’s seventh largest lender, Hsinchu International Bank (TWN: HIB), China’s third largest lender, CCB, with Bank of America Corp’s (NYSE: BAC) retail banking operations in Hong Kong and Macau, Citigroup (NYSE: C) with large controlling stake in Guangdong Development Bank, are few to name.
Cited by; 7
A Comparative Study of US and Australian Students’ Perceptions and Topic Choices of the First College-level Financial Accounting Course Dr. Ronald Woan, Indiana University of Pennsylvania, Indiana, PA
ABSTRACT The objective of this research is to examine the potential differences in ex post perceptions between accounting-finance majors (AF) and other majors (NAF) of the first college-level financial accounting course and, if differences exist, whether these differences lead to differences in opinions regarding topical coverage. In contrast with earlier research which predominantly used univariate statistical methods for multiple hypothesis testing, multivariate statistical techniques are used in this research. The multivariate results of this study indicate that, as expected, there are statistically significant overall perception differences between AF and NAF cohorts; but, surprisingly, these differences do not lead to statistically significant different opinions on topical coverage even though the univariate approach indicates statistically significant differences on some topical variables. The topical variables show that there are important differences between US students and Australian students: Australian students on average prefer a user approach, whereas US students on average favor the traditional preparer approach. US students seem to treat the first course as providing an opportunity to learn accounting as a business language. This calls into question the wisdom or practice of offering user-oriented course for NAF cohort in US. Finally, the perception variables provide discriminant function that classifies the subjects accurately both within sample and for out-of-sample sample. Logistic regression provides similar results.
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The Impact of Department Restructuring on Job Satisfaction for Marketing Faculty Dr. William T. Neese, Bloomsburg University, Bloomsburg, PA
ABSTRACT A multidimensional job satisfaction scale adapted to this study revealed that marketing faculty who most recently experienced a department merger with another academic discipline were significantly less satisfied with peers, the chairperson, the promotion and tenure process, and students versus their counterparts who most recently experienced splitting a combined unit apart to form an autonomous marketing department or those who never experienced any department restructuring. Results from this survey clearly demonstrate the negative impact that stress has on overall job satisfaction felt by marketing faculty after an administrative reorganization. The historical development of today’s academic marketing department has a century old tradition in the United States, beginning with early efforts on a few Midwestern campuses to improve agricultural product distribution and culminating in highly specialized organizational units housed in most colleges of business at modern universities (Wilkie and Moore 2003). During its evolution, the discipline of marketing pushed itself away from others such as economics and management to form autonomous administrative units typically preferred by those marketing faculty members directly involved. Such widespread realignments in business schools mirrored trends across the academy at large during the Twentieth Century, and have resulted in a debate concerning the merits of narrow specialization versus interdisciplinary integration (Walvoord et al. 2000; Wilkie and Moore 2003; Wills 1978). Denham (2002, p.13) states that by the late 1960s, a “proliferation of diverse courses ruled the period with faculty as specialists defending their favorite courses.”
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Lowering Stress of Expatriates: The Role of Culture and Management Styles Dr. Lung-Tan Lu, Fo Guang University, Taiwan
ABSTRACT This study examines the effects of culture (i.e. Individualism, uncertainty avoidance, and masculinity) and management styles (i.e. supervision style, interdepartmental relationships, and paternalistic orientation) upon role stress of expatriate managers. Data collected from questionnaires completed by 193 Japanese expatriates in Taiwan were analyzed by structural equation modeling (LISREL 8.52). It is found that management styles are significantly predicted by individualism and masculinity. Moreover, role conflict is negatively related to supervision style. Role ambiguity is positively associated with supervision style and inter-department relations. Surprisingly, it is found that role conflict is negatively related to role ambiguity. Managerial implications and further research directions are discussed. Understanding the role of culture in the underpinnings of the global operation of multinational enterprises (MNEs) is one of the most important issues in the filed of international business research (Jain and Tucker, 1995; Buckley, 2002). One of the cultural components that have been the subject of cross-cultural research that has grown rapidly over the past two decades is stress (Cooper and Dewe, 2004). Among the most important reasons is the consistent finding that experienced role stress can have negative effects upon organizational performance (Shenkar and Zeira, 1992; Tubre and Collins, 2000). In the field of international business, researchers have noted that cross-cultural research is needed more than ever because it is no longer assume that Western concepts and theories can be employed directly worldwide (e.g. Perrewe, et al., 2002). This study develops and tests a research model that examines the effects of Hofstede’s cultural dimensions (i.e. individualism, uncertainty avoidance, and masculinity), and management styles (i.e. supervision style, interdepartmental relationships, and paternalistic orientation) upon role stress (i.e. role conflict and role ambiguity) of expatriate managers in Taiwan.
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Foreign Exchange Denominated Borrowings and Corporate Profits: Evidence from Turkey Dr. Deniz Parlak, Dogus University, İstanbul, Turkey
ABSTRACT In modern finance literature, value maximization is accepted as the primary goal of corporations. To attain this goal, firms try to decrease their cost of capital as much as possible, since firm value is calculated by discounting expected cash flows at cost of capital. Borrowing in foreign currencies is one of the tools used by firms to decrease their cost of capital. However, although firms are able to realize large spread gains in times of relative purchasing power disparity, foreign exchange risks are difficult to cover in periods of crisis where local currency depreciates. Thus, foreign exchange risks are considered one of the most important reasons of the financial fragility in times of crisis. The purpose of this study was to investigate the magnitude of foreign exchange denominated financial borrowings of Turkish manufacturing companies and the impact of these borrowings on company profits and corporate risks. It was hypothesized that companies with low operating profits and low operating risks tend to borrow in foreign currency to decrease their cost of capital and increase their after tax return in times of purchasing power disparity. However, this creates an important source of financial fragility. The President of the Central Bank of Turkey stated in a conference announcement that “In many emerging markets, high dollarization is identified as an important factor that adds to the challenges related to international capital flows. On the other hand, dollarization is seen as a symptom of some underlying causes such as macroeconomic imbalances and inflation. Clearly, there is a long way ahead for both policy makers and academics in assessing the causes and consequences of dollarization” (International Conference on Dollarization, "Consequences and Policy Options," December 14-15, 2006).
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Competitive 4P’s Strategy Analysis before Liquor Liberalization: Case Study of Beer Companies Dr. Sinee Sankrusme, Ramkhamhaeng University, Bangkok, Thailand
ABSTRACT The study analyzed both the domestic and imported beer markets in Thailand. In the domestic beer market, the case study was concerned with the Boon Rawd Brewery Company, the Thai Amarit Brewery Company, the Thai Asia Pacific Company, the Carlsberg Brewery Company and the Thai Beer (1991) Company. In the imported beer market, the case study concentrated on the TIS Worldwide Marketing (1997) Company and the C.V.S. Syndicate Company. The study analyzed 4P’s strategy of beer marketing before liquor liberalization in 2000. The original beer entrepreneurs were the Boon Rawd Brewery Company and the Thai Amarit Brewery Company. Three more brewers were granted permission to operate in 1991, namely the Thai Asia Pacific Company, the Carlsberg Brewery (Thailand) Company and the Thai Beer (1991) Brewery Company. As a result the beer market became highly competitive. A 4P’s strategy was conducted for market share. Companies had to create consumer satisfaction. The companies needed to conduct surveys of consumer demand and conduct research into their competitors’ market. The year 2000, the first year of liquor liberalization, was eagerly anticipated, with the introduction of many new products. The 4P’s strategy was applied in full. The 4P’s strategies of beer businesses were quite interesting and proved to be useful information for setting up a market plan. Beer demand increased as a result of a change of policy in 1991, which meant that the development of production efficiency gave rise to an increase in product quality.
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Core Competencies of Managers in an Emerging Market Dr. Muberra Yuksel, Kadir Has University, Istanbul, Turkey
ABSTRACT Increasing uncertainty and intensive competition have forced companies to focus on developing their core competencies to increase their competitive advantage. According to Prahalad and Hamel (1994), companies having unique and non-substitutable resources and competences that cannot be achieved by the competitors obtain sustainable advantage. The main sources of such specific organizational core competences or capabilities are effective technology, organizational learning, strategic flexibility and innovative capacity - which are founded upon people management and individual competencies some of which are broadly applicable across the organization or may even be generic within a sector. The cultural or functional competencies are usually specific, while business leading or managerial ones are often general. I have first employed Belbin’s team role profile model (1981, 1993) based on role theory and typology among top managers, and then, I compared selected common competencies of the service sector in Turkey to determine if the human resources are prepared for coping with change and crisis in this volatile knowledge-based economy. Keywords: Core /global competencies, workforce scorecard, team roles and leadership In the era of information and globalization, managers face accelarating pace of changing conditions, increasing uncertainty and competition which demand sustainable organizational momentum via high performing and competent employees. Enterprises are becoming flatter organizations with temporary structures, virtual teams, networking and doing more both in quantity and quality with less people.
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IFRS Adoption and Audit Timeliness: Evidence from Malaysia Najihah Marha Yaacob, University Teknologi MARA, Terengganu, Malaysia Dr. Ayoib Che-Ahmad, Universiti Utara Malaysia, Kedah, Malaysia
ABSTRACT Audit timeliness is prominent as one of the quality characteristics of corporate financial reporting. It is an indicator to measure whether or not, financial statements convey information to the investors as promptly as possible. The transition to the international single accounting standards, namely International Financial Reporting Standards (IFRS) was regarded as a big transformation to some companies. Since the new IFRS demands detailed disclosures, it requires more effort and time to conduct an audit engagement. Thus, the question of whether IFRS adoption would affect audit timeliness is questionable. A more promising data structure, the panel data approach over a five-year period (2004-2008) was utilized. The fixed effects regression results revealed a significant increase on the length of time to issue audit reports after IFRS adoption in Malaysia. This study proved the complexity of the issuance of the new and amended IFRS and thus auditors required more hours in performing their audit engagement. The harmonization of accounting standards of different countries will assist in better comparison of financial information (Stovall, 2010), so investors can make decisions based on the financial reports available across the boundaries. Definitely, investors would prefer markets with understandable financial information and would have more confidence (Bebbington and Song, 2007). An accounting standard setting body that is responsible to promote a single accounting standard that can be applied worldwide is known as International Accounting Standards Board (IASB). In order to promote further convergence between the local Generally Accepted Accounting Principles (GAAP) and international accounting standards and practices, IASB has amended some existing standards and adopted certain new standards in the name called ‘International Financial Reporting Standards’ (IFRS).
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Psychometric properties of the Behavioral Trust Inventory for Measuring Trust in Mentoring Relationships Dr. Joanne D. Leck, School of Management, University of Ottawa, Ontario, Canada Dr. Annie Robitaille, University of Victoria, Victoria, British Columbia, Canada
ABSTRACT Background: The role of trust in mentoring relationships is an area of research that warrants to be further studied. Yet, to our knowledge, no measure of trust has been validated to measure willingness to be vulnerable in mentoring relationships. Objective: The objective of the current study was to examine the psychometric properties of the Behavioral Trust Inventory (Gillespie, 2003) for a sample of senior level women. Data and Methods: The Behavioral Trust Inventory includes 10 items designed to measure two dimensions (Reliance and Disclosure) of people’s willingness to be vulnerable in work-related relationships. Reliance measures willingness to rely on other people’s abilities, skills, judgement, and knowledge and Disclosure measures readiness to share privileged information with others. The factor structure (confirmatory factor analysis) and internal consistency of the scale were examined for a sample of 222 women. Results: The confirmatory factor analysis revealed acceptable fit indices for the 2-factor structure similar to the original one. Cronbach’s alphas were high for both dimensions of trust (Reliance = .84 and Disclosure = .76). Interpretation: The Behavioral Trust Inventory appears to be a psychometrically sound instrument for use in research on trust in mentoring relationships. In response to the heightened need to attract, retain and develop talent, organizations have introduced a plethora of formal and informal mentoring programs to identify and support high-potential employees and to provide a way to pass down the knowledge and skills of more senior employees. For example, approximately seven out of ten large Canadian organizations provide mentoring programs (Orser, Hogarth-Scott & Riding, 2000; Immen, 2007). Mentoring is typically a mechanism whereby a senior person ‘takes under his/her wing’ a more junior person, and ensures that their ‘protégé’ understands his/her job, is introduced to the right people, is aware of how the organization works and has someone to talk to about personal and other issues.
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Corporate Governance and Corporate Failure in the Context of Agency Theory Dr. Faizah Darus, University Technology MARA and Accounting Research Institute, Malaysia Azlinda Mohamad, University Technology MARA, Malaysia
ABSTRACT Following the Asian financial crisis in 1997, the Malaysian corporate governance has undergone major reforms to strengthen its corporate governance mechanism resulting in the establishment of the Malaysian Code on Corporate Governance (MCCG) in 2000. This study aims to investigate the impact of corporate governance reforms in mitigating corporate failures in Malaysia for a three year period from 2004 to 2006. Using 176 Malaysian listed companies (88 distressed companies and 88 non-distressed companies), the impact of corporate governance attributes namely board structure, ownership structure and internal control mechanisms on the poor performance of companies in Malaysia were investigated in the context of agency theory. Results reveal significant negative association between CEO duality and financial distress condition. This implies that leadership structure affects the performance of companies. The findings suggest that CEO duality will reduce agency problem as the agent will act in his best interest and provide better strategic vision and leadership in companies’ goals and objectives compared to an independent chairman. This in turn will result in the rapid execution of organization’s operational decisions and improved performance. The other governance and internal control mechanisms identified in the study were not significant in mitigating financial distress conditions of firms. An implication of these findings is the suitability of the corporate governance monitoring mechanisms as recommended by MCCG which adopted some international principles. Such monitoring mechanisms may not be applicable for emerging markets such as Malaysia due to the different economic development and political culture. The most common cited reason for corporate failure was due to the lack of internal control arising from poor corporate governance of companies (Agrawal and Chadha, 2005; Charitou et. al, 2007; and Deng and Wang, 2006). Following the Asian financial crisis, steps were taken by the Malaysian government to reform the corporate governance structure in Malaysia resulting in the establishment of the Malaysian Code on Corporate Governance (MCCG) in 2000.
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Investigating the Influence of Exchange Rate Fluctuations on Stock-Index Returns in Taiwan’s Electronic Industry and Eight Sub-Industries Dr. Tzu-Chun Sheng, Ling Tung University, Taichung, Taiwan Dr. Shu-Hui Lan, Ling Tung University, Taichung, Taiwan
ABSTRACT This paper applies the DCC bivariate GARCH-M modeling methodology to investigate the influence of the exchange-rate changes of the NTD/USD on the stock-index returns of Taiwan’s electronic industry and each one of the eight sub-industries from 2007 to 2010. Exchange-rate changes are a major source of profit risk for companies operating under an environment of increasing internationalization and globalization, that identifying and measuring these influences can improve the risk management strategies of investors in this industry. The investigations reveal that depreciation (appreciation) of NTD/USD negatively (positively) affects all of the nine studied stock-index returns. The stock-index returns of Taiwan’s electronic industry have a stronger connection with the studied exchange-rate changes than do any of the other eight stock-index returns investigated in this paper. The stock-index returns of computer and peripheral equipment industry have the second strongest correlation with the exchange-rate changes of NTD/USD. The weakest correlation is between the exchange-rate changes of NTD/USD and the stock-index returns of information service industry. Moreover, depreciation (appreciation) movements of the NTD/USD are almost simultaneously reflected in the downward (upward) movements of the nine stock-index returns. The lag effect suggests that an investor can observe movements of the NTD/USD exchange value and successfully act on it by way of buying/selling stocks within the lag period. The business managers in Taiwan’s electronic industry can use financial hedges especially in the currency markets of the NTD/NTD to manage exchange risk. The findings also provide support to the hypothesis that strict market efficiency does not exist for the electronic stock market in Taiwan. Due to the collapse of the Bretton Woods System, the countries all over the world have gradually abandoned fixed-exchange-rate system and adopted floating-exchange-rate system since 1973. Exchange rates, therefore, began to fluctuate in wider ranges internationally and became an important risk to manage in any business enterprise with linkages to world markets.
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Does the Degree of Influence of Individual and Situational Factors Affecting One’s Ethical Beliefs and Decision Making Vary Among Certain Demographics Key Variables? Dr. Muath M. Eleswed, New York Institute of Technology, Kingdom of Bahrain
Abstract An exploratory study was conducting in a private hospital in Kuwait to examine whether or not there is a variation in the degree of influence of individual and situational factors affecting one’s ethical beliefs and decision making among certain demographics key variables. The study included one hundred and eighty one subjects, and took place between the months of May and July of 2008. The results of this study indicate that the degree of influence varies among certain demographics key variables including gender, age, education level completed, and job type. Based on the results, implications and recommendations for further research were made. As the quest for building the ethical organization is on the rise, it becomes apparent that organizations ought to ethically behave while conducting their daily practices. This is essential simply because, employees tend to act in the same manner as their organizational leaders when it comes to ethical conducts (Erondu, Sharland, & Okpara, 2004). According to Morgan (1993), ethical conduct is perceived as an important element of leadership. Because of that, when leaders create ethical practices they become more effective, efficient, innovative, and successful. While achieving their organizations’ goals, leaders are often challenged to compromise their personal ethics (Weeks & Nantel, 1992). Consequently, many ethical failures have occurred all over the world (Beyer & Nino, 1999) as evidenced by “scandals at Enron, Worldcom, Parmalat, Allied Irish Bank, and National Irish Bank” (Knights & O'Leary, 2006, p. 125). Recently, the issue of ethics of leadership has been greatly emphasized (Knights & O'Leary, 2006), to include all types of organizations. This was due to the complexity consequence of globalization practices and major ethical lapses which have emerged and caused major damages to organizations and societies (Beyer & Nino, 1999). Ignoring the issue of ethics such as “societal expectations, fair competition, legal protection and rights, and social responsibilities” (Koh and Boo, 2001, p. 209) significantly impacts organizations.
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An Empirical Test on Corporate Environmentalism as a Strategy: Evidence from Thailand Dr. Apichart Kanarattanavong, Chulalongkorn University, Bangkok, Thailand Dr. Guntalee Ruenrom, Chulalongkorn University, Bangkok, Thailand
ABSTRACT This paper reports the empirical test of the model of corporate environmentalism presented by Kanarattanavong and Ruenrom (2009). The model was developed with the notion that corporate environmentalism is a strategy to achieve competitive advantage. To test the model, a mail survey was used to collect data from manufacturing firms in four industries in Thailand, resulting in 772 usable observations. Multiple group analysis with SEM was used to analyze the data. Results indicate a limited role of external factors,i.e., perceived uncertainty of environmental market and of environmental regulation, in influencing corporate environmentalism; however, corporate environmentalism evidently improved marketing, social, and environmental performance. Corporate environmentalism (CE) refers to the incorporation of concerns about the natural environment into firms’ decisions. Bansal and Roth (2000) studied motivations underlying the adoption of CE. Their study found three motives: competitiveness, legitimacy, and social responsibility, each of which was related to a unique set of decisions regarding CE. Firms with “competitiveness” motivation innovatively implemented CE and attempted to achieve competitive advantage, while firms with “legitimacy” motivation emphasized the costs versus risks of non-compliance to the environmental regulation (Bansal and Roth, 2000). Firms with “social responsibility” motivation were concerned about their wealth, as well as social good (Bansal and Roth, 2000). However, when studying the antecedents of CE, many scholars did not explicitly assume distinction of motivations. A research stream studied the antecedents of CE, using the political economy perspective as a theoretical base (e.g., Banerjee et al., 2003; Langerak et al., 1998). The perspective posits that firms’ behaviors, e.g., CE, are influenced by economic and sociopolitcal forces internal and external to firms (Stern and Reve, 1980). Examples of such forces influencing CE include organizational structure, public concerns, regulation, and environmental sensitivity of top management and marketers, etc. (Menon and Menon, 1997; Banerjee et al., 2003; Langerak et al., 1998).
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The Influence of the Leadership Practice “Inspiring a Shared Vision” on Group Norms in the Organizational Culture of Financial Institutions, in the Gambia, West Africa Dr. Michael Ba Banutu-Gomez, Professor of Management and Entrepreneurship William G. Rohrer College of Business, Rowan University, NJ
ABSTRACT This research examines the powerful influence of a specific leadership practice, “Inspiring a Shared Vision on the ongoing development of group norms, a vibrant aspect of the organizational culture within the financial institutions of The Gambia, West Africa. Its purpose is to discover if the utilization of this specific leadership practice can nurture, within the financial institution of an African country, the growth of group norms, which foster increased accountability, innovation and sustainable change. Participants in this study were employees of Financial institution in the Gambia. The Gambia, which is located in West Africa, is a narrow strip of land tucked 300 miles east of the Atlantic Ocean. It is nestled inside Senegal along both banks of the River Gambia, which is about 15 to 30 miles wide. The Gambia’s population is about 1.5 million people, with 95% of the natives of the Islamic faith and 5% of the Christian faith. The Gambia consists of five main ethnic groups: Mandingo, 42%; the Fula, or Fulani, make up 18% of the population; the Wolof, 16%; the Serahuli, 9%; and the Jola, 4% (CIA World Factbook, 2004). The minority ethnic groups in The Gambia, which make up 11% of the population, are the Manjako, the Karonika, and the Balanta. Between the 8th and 11th centuries, the River Gambia was part of the vast trans-Saharan trade routes, which brought both visitors from the North and the subsequent influence of Islam. In 1455 the Portuguese, who were the first Europeans to see The Gambia, reached the River Gambia and sold exclusive trading rights along the river to some English merchants, which began English influence in the area (Oluyitan, 1997). The Europeans brought goods such as salt, ostrich feathers, iron, pots and pans, firearms and gunpowder. These goods were exchanged for ivory, ebony, beeswax, gold and slaves. For the Europeans, the slave trade, which operated legally from the 1500s until 1807, was its most “lucrative” area in The Gambia (Columbia Univ. Press, 2004).
Cited by; 7
The Quality Policy in Value Based Management Prof. Piero Mella, University of Pavia, Italy
ABSTRACT This study is based on the premise that, strictly speaking, capitalistic firms are business profit oriented organizations that are viewed as systems for the creation of economic and financial value for their shareholders (owners). This assumption has guided the new concept of a management whose aim is the production of value, or Value Based Management (VBM). VBM recognizes that financial performance – based on profit and the value of capital – depends in a causal way on the level of quality of products and processes, and that therefore quality is the condition for producing value for the client and financial value for shareholders. This paper has a twofold objective. It seeks above all to analyze the different ways VBM must use to consider quality as a value driver – identifying the relations between quality levels, on the one hand, and cost, revenue and profit levels, on the other; and, secondly, to indicate the guidelines based on which VBM can develop a strategy of Total Quality Management, or Company-Wide Quality Control that is integrated with the other “value creating strategies”. The spread of Value Based Management (VBM) is relatively recent. Only since the 1990s have many large firms turned to this managerial technique, whose objective is to direct management toward the primary goal of creating shareholder (owner) value (Mella and Pellicelli, 2008). For Arnold, VBM does not represent a new management technique, a specific method, or a new system of control; rather it is a mental attitude toward the systematic maximization of shareholder value: “Value-based management is a managerial approach in which the primary purpose is long-term shareholder wealth maximization. The objective of a firm, its systems, strategy, processes, analytical techniques, performance measurements and culture have as their guiding objective shareholder wealth maximization” (Arnold, 2000: p. 9).
Cited by; 6
E-Microenterprise: Designing Microsoft Access Database for Four Industries Mei-Luan Huang, Nan-Jeon Institute of Technology, Taiwan Dr. Yaw-Yih Wang, Central Taiwan University of Science and Technology, Taiwan
ABSTRACT Software suites cannot cater to the demands of enterprises with streamlined staffing and their need of informationalization, while on the other hand, the price of customized applications is so out of reach. In such predicament, this study aims at enabling e-microenterprise environment, setting up inventory system, cutting back on personnel costs, and promoting business performance. By way of case study method and in-depth interviews, this study draws up the research structure after interviewing vendors and clients to understand their system demands as well as information process. This research develops the economical, prevalence-accessed, and easy-to use Microsoft Access for catering industry, body shops, agricultural cooperative markets, and motels. By combining theory and practice, this business database will facilitate vendors to maximize benefits with minimum investments. The designed database—with related information entered—was distributed to the vendors and has gained their approval. After several interviews, we perfected the database according to their opinions. The ubiquitous supermarket POS system, ATMs, school administration, and seat reservation system are the proof of how database affects our lives drastically. It facilities our daily routine, not to mention what an efficient instrument inventory management is for business. For micro-enterprise and SME owners that has no intention in hiring information professionals or spending fortunes on management system implementations, this study turns to the easy-to-use Access software for database management, especially those catering business, agricultural cooperative markets, body shops, and motels. The software helps inventory management lower administrative expenses and increase profit. Through an elaborative design, the database consist a collection of particular data to satisfy users’ demand at the right moment. The database structures are usually three-tiered, the so-called ANSI/SPARC architecture where users’ applications are separated with actual data to achieve data independence. Database management system is a program that helps users build and maintain database.
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Dark Side of Mergers & Acquisitions: Organizational Interventions and Survival Strategies Dr. Ceyda Maden, Fatih University, Istanbul, Turkey
ABSTRACT Mergers and acquisitions (M&As) are increasingly prevailing, influential and risky corporate events. The bulk of the literature relating to M&As focus on economic, financial, and strategic factors behind these practices and financial performance is taken to be the most common determinant of M&A success. Nevertheless, increasingly, the success of organizational combinations has been measured by the reactions of individuals affected by these practices. Negative behavioral outcomes associated with these events, such as high voluntary attrition rates, absenteeism, employee stress, and unprecedented acts of sabotage, influence the performance of M&As and subsequently reflect in the “bottom line” figures. This study has three strategic objectives. The first is to highlight the major employee concerns subsequent to a merger or acquisition processes. The second is to address some critical HR decisions after M&As and present certain implications managers to cope with the prevailing employee stress. The last aim is to convey some personal strategies for surviving in the new organization. The first part of this study entails a comprehensive literature review that portrays the theoretical background of relevant issues concerning the human side of M&As. In the second part, two real life cases regarding the merger/acquisition processes of four reputable Turkish banks are presented. Implications derived through the personal interviews, which were conducted with four middle-level managers who had been involved in the merger/acquisition processes of selected banks, are found directly related with the theoretical discussions in the literature. Mergers and acquisitions (hereafter, M&As) are increasingly prevailing, influential, and risky corporate events.
Cited by; 18
Toward Finding an Optimal Mix between Push and Pull Strategies: Try Conjoint Analysis Dr. Chaim Ehrman, Loyola University Chicago, IL Jerusalem College of Technology and Bar Ilan University, in Israel
ABSTRACT In the field of Promotion, there are 2 well known promotion mix strategies: Push and Pull. The decision maker faces the problem of defining optimal budget allocation for Promotion, and how to divide this budget between push and pull strategies. In this paper, it will be shown how Conjoint Analysis can be used to solve this problem. The field of Promotion represents the 4th "P" of the Marketing Mix: Product, Price, Place and Promotion. The American Marketing Association defines a company's total promotion mix as the specific blend of advertising, sales promotion, public relations, personal; selling and direct marketing tools that a company uses to persuasively communicate customer value and build customer relationships. In this paper, the focus is on budget allocation for sales promotion. Sales promotion is defined by the AMA as short-term incentives to encourage the purchase or sale of a product or service. There are two strategies that can be used to implement sales promotion. The Push strategy uses sales force and trade promotion to push the product through the channels of Distribution. The producer directs its marketing activities toward channel members (retailers, wholesalers, etc.) to induce them to carry the product and promote it to final consumers. The Pull strategy calls for spending on Consumer advertising to induce the final consumer to buy the product. If the pull strategy is effective, consumers will then demand the product from channel members (retailers), who will in turn demand it from producers. (See Kotler and Armstrong, page 415). Kotler and Armstrong state, (p. 412), "One of the hardest marketing decisions facing a company is how much money to spend on promotion (p. 439)." The amount to allocate for Promotion expenditure is clearly a very significant, and difficult problem to solve, and certainly a non-trivial issue for the marketer. The next section represents several approaches to solve this problem.
Cited by; 4
Usage of Web 2.0 Tools for Ubiquitous Enterprises Burcu Balım, Bogazici University, Istanbul, Turkey Dr. Ozgur Dogerlioglu, Bogazici University, Istanbul, Turkey
The aim of this research is to investigate the awareness and usage of Web 2.0 tools within the context of Enterprise 2.0. One hundred and fourteen companies from different sectors participated in data collection process. Awareness of Enterprise 2.0 is analyzed according to usage of Enterprise 2.0 tools in the company, technological pursuits of the company, resistance reasons and perceived effects of Enterprise 2.0. Awareness level of participant companies is also measured according to their terminology and concept knowledge about Enterprise 2.0. Only 28.1% of the respondents are highly aware of Enterprise 2.0. Blogs, Social Networks and Forums are among the most known tools of Enterprise 2.0. Marketing is the area with the highest Web 2.0 tools usage. Content control is the most important resistance reason related to the usage of Web based systems for communication and information sharing activities. Using internet for following new developments and innovations in a specific industry is significantly correlated to the perception of web based systems as accelerators of internal communication. Companies following technological developments closely prefer to use Web 2.0 platform for knowledge sharing. Web 2.0 concept has emerged in 2004 (O'Reilly, 2005) and internet users have become active participators in the content creation process starting to generate data and sharing it on the internet instead of being passive readers of the web pages (Dearstyne, 2007; Cormode and Krishnamurthy, 2008). In the Web 1.0 which is World Wide Web, internet was used in order to publish text or data. Data publishing procedures were difficult and expert help was essential. Today everyone who is computer literate can create a web page or blog easily. Social internet sites such as Youtube, Facebook, Linkedin, and Flicker are using the same technology which is Web 2.0. While serving for different purposes, all of them provide easy to use or user friendly interfaces and adopted “freemium business model” (Wilson, 2006) which involves “collective user value, positive network effects, and community sharing” (Shuen, 2008).
Cited by; 16
Promotion of Self-Directed Learning Through Developmental Teaching Strategies Dr. Li-Jeng Liang, Ling Tung University, Taiwan Dr. Wen-Lan Wang, Ling Tung University, Taiwan
ABSTRACT Since 1970 self-directed learning has been the study point of adult education. Since then self directed learning has become very popular. Self directed learning is taken up as a more serious topic now because all the countries were paying more attention on all lifelong learning, learning organization, learning society . This type of learning is natural and essential for promoting ability, life quality and satisfaction within human beings. So enhancing self-directed learning is one of the important educational goals. An educator can use different teaching methods and interpersonal approaches to achieve the 'optimum fit' that caters the learner's level of self-directed learning. For example when a learner shows interest in taking up more responsibilities for learning, then the educator can gradually decrease his /her control over teaching the learner and increase the learner's control over learning. This will enhance the learner's level of self directed learning. This paper describes the different teaching methods and interpersonal approaches to be used to match with the different levels of self directed learning and also emphasizes on promoting self-directed learning. In order to promote one’s self-growth, improve one’s performance, make one be reasonable and think critically, and understand one’s responsibility of becoming social members, lifelong learning is necessary. To increase organizational efficiency and productivity, to maintain good social order, and to make everyone have equal economic opportunities, human beings need lifelong learning. Hence, when one leaves school, one must obtain basic knowledge, but the most important thing is that one must have the ability of getting new knowledge. School programs ensure that even a mediocre student will have some basic skills and knowledge. However, it is important that one should have the thirst for knowledge as well as the skills necessary to get that knowledge. Learning is closely related to life.
Cited by; 10
Changing the Entrepreneurial Landscape Through Effective Use of Case Study Analysis Professor Roger Paskvan, Bemidji State University, Minnesota Dr. James R. Maxwell, Bemidji State University, Minnesota
ABSTRACT In most entrepreneurship and leadership courses students use cases about actual companies to practice strategic analysis and to gain some experience in the tasks of crafting and implementing strategy to lead their organization to economic success. A case sets forth, in a factual manner, the events and organizational circumstances surrounding a particular managerial or leadership situation. The purpose of this paper is to look at why case studies are used and recommendations for using them. The case method is an effective avenue for sensitizing students and faculty to the complexities and structures of entrepreneurial business organizations and leadership situations. Business cases are one of the most effective and convenient ways to introduce practice into the classroom, to tap a wide variety of experiences, and involve students actively in analysis and decision-making. Cases are not intended as examples of either weak or exceptionally good management practices. Nor do they provide examples of particular concepts. Faculty that utilize case analysis methods are up-dated as to current techniques, successes and failures of business allowing them to stay current. Businesses that cooperate in case study analysis provide a constructive learning situation that can’t be beat by any other means of teaching the practical side of the subject matter. Teaching techniques involving case study causes the student to “think,” in a business fashion encouraging educational development at all levels. The typical; failure or success of case study business models provide a bridge to a reality world not found in most current text books. The case approach to strategic analysis is, first and foremost, an exercise in learning by doing. Cases help substitute for on-the-job experience by (1) giving you broader exposure to a variety of industries, organizations, and strategic problems; (2) forcing you to assume a managerial role (as opposed to that of just an onlooker); (3) providing a test of how to apply the tools and techniques of strategic management; and (4) asking you to come up with pragmatic managerial action plans to deal with the issues at hand.
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Performance Assessment in Thai State Owned Enterprises Dr. Uthai Tanlamai, Chulalongkorn Business School, Bangkok, Thailand Pornpipat Juta, Faculty of Management Science, Ubon Ratchathani University, Thailand
ABSTRACT This study examines the implementation of performance assessment tools, Performance Agreement and Risk Management in Thai State Owned Enterprises (SOEs). These tools have been used to govern the operational efficiency, and provide non-financial performance measures of SOEs. The relationships between these non-financial performance scores and SOE’s financial ratios were empirically tested. Both primary and secondary data were collected, including 1998-2009 publicly available data, in-depth interviews, and survey using customized, individualized questionnaires. The results show moderate to weak relationships between performance agreement and risk management scores and the SOE’s financial performance. The former scores focusing on the assessment of strategic direction, business processes, and structure relate stronger to financial performance than to risk management related matters. The development of State Owned Enterprises (SOEs) is critical to any developing country, especially those in the Asia Pacific region, as they provide a valuable source of fiscal revenue and contribute directly to the growth of other state and non-state sectors. Governments in different countries have tried to find mechanisms to improve SOE’s performances, operationally and financially. One simple way to achieve this goal is to change the management structure of the SOEs to be akin to those of private enterprises. Therefore, the fastest route is privatization. This is especially true in China where thousands of SOEs have been converted to (and from) different forms of ownerships (Jefferson and Rawski, 1996). With the adoption of the Open Door Policy at the end of the 1970s, liberalization and deregulation of government and state organizations have enabled Chinese SOEs to transform their traditional operations and embrace modern management systems so as to compete in the global marketplace(Buckley, Clegg, and Tan, 2005) .
Cited by; 4
An Empirical Study of Residents’ Attitudes to Tourism Impact Management Strategies Ping-Tsan Ho, Tatung Institute of Commerce and Technology, Taiwan
ABSTRACT Sustainable development has been an ideal goal for tourism destination, especially within precious nature and culture areas. The fundamental principle of sustainable development is to look for a better solution which will reach quality development for now and also for future generation. Thus, managing potential impacts of tourism development with care is essential. This study proposed a systematically approach to evaluate residents attitude to tourism impact management strategies. Research results showed that local residents most concerned about negative changes in environmental conditions, but welcomed positive outcomes of economic improvement. This study further examined resident perceptions of management strategies for concerned tourism impacts. The findings revealed that local residents preferred indirect management strategies to avoid offending visitors by direct regulations and rules. Finally, some critical factors, which might influence the perceptions of tourism impacts and the acceptances of impact management strategies, were examined to provide insight explanations for tourism impact management. Sustainable development has been an ideal goal for tourism destination, especially within precious nature and culture areas (Wight, 1993; Nelson, 1994). The fundamental principle of sustainable development is to look for a better solution which will reach quality development for now and also for future generation (Middleton & Hawkins, 1998). In other words, the impacts of development at the present should not be an expense for the next generation. As a result, the impacts of the tourism development are widely concerned by residents and legal legislations (Mathiesin & Wall, 1982; Andreck & Vogt, 2000; Wall, & Mathieson, 2006).
Cited by; 6
Strategic Groups, Mobility Barriers, and Industry Evolution: An Empirical Study of Taiwan Banking Industry Dr. Te-Kuang Chou, Southern Taiwan University, Taiwan
ABSTRACT This study argues that strategic groups should be indentified with variables which reflect vital characteristics of a focus industry. The identified group structure should be followed with an attempt at tracing industry evolution to reach insightful understandings of that industry. The empirical setting is Taiwan’s banking industry covering the period from 1992-2001. Cash flow variables were adopted as a basis for grouping since liquidity aspects determine the strategic positions of banks. It was found that Taiwan’s banking industry was polarizing, and there were very strong asymmetrical mobility barriers that deterred newly founded banks from moving into the best-performance group. These findings not only provide important knowledge for competitive dynamics about the focus industry, but also contribute a continuing dialogue with previous mobility barrier theories, with the possibility of theoretically linking the concept of the strategic group (CSG) with the resource-based view (RBV). Hunt’s (1972) observation of asymmetrical strategies pursued by strategic groups of firms in the U.S. home appliance industry was quite a departure from the prevailing structure-conduct-performance (SCP) paradigm of industrial organization (IO) economics (Panagiotou, 2006). Since then, a considerable body of theoretical and empirical work has expanded upon this concept (Short et al., 2007; Prior and Surroca, 2006; Mas-Ruiz et al., 2005; Churchman and Woodard, 2004; Warning, 2004; Castle, 2003; Lee, 2003; Osborne, Stubbart and Ramaprasad, 2001; Peteraf and Shanley, 1997; Cool and Dierickx, 1993; Tang and Thomas, 1992; Fiegenbaum and Thomas, 1990; Cool and Schendel, 1987). With it’s terseness in conception and closeness to industry reality, the concept of the strategic group (CSG) has been listed as “one of the most valuable analytic concepts in the armory of the strategist, practitioner or researcher” (Hatten and Hatten, 1987: 340). Yet, in existing research studies there is still much controversy about how strategic groups should be identified (Leask and Parker, 2006; Dranove, Peteraf and Shanley, 1998; Barney and Hoskisson, 1990; Thomas and Venkatraman, 1988). More importantly, most CSG studies adopted static analysis and thus “implicitly assumed that groups are a stable element of market structure” (Mascarenhas, 1989: 333), leaving the potential for the CSG in tracing long-term industrial evolution yet to be fully exploited.
Cited by; 4
Empirical Analysis of the Price Discovery in the Stock Index and Its Derivatives Contracts: The Case of Taiwan Dr. Chin-Yu Tsai, China University of Technology, Taiwan
ABSTRACT This paper examines the intraday price discovery process among the stock index, index futures and index options in Taiwan’s financial markets using time series and cross-sectional data from January 2006 to June 2007. The results indicate that the stock index futures lead the (spot) stock index and the at-the-money and out-of-the-money options also lead the stock index. A symmetric lead-lag relationship is also found between futures and options, except for out-of-the-money options. These results support the trading cost hypothesis which states that the derivatives markets give the investors much lower trading costs than the stock index markets. This means that informed traders in the stock index and its derivatives markets may react faster to the stock index derivatives markets than the stock index markets. In rational, efficiently functioning markets, the prices of securities and their derivatives should be perfectly contemporaneously correlated. However, in the real markets there exist market frictions including various transaction costs and information asymmetry which will give rise to a lead-lag relationship between markets. Because many traders take positions in inter-markets simultaneously, the differences in reaction times and the sizes of the differences in cross-sectional prices between markets can have a crucial effect on their profits. For this reason, it is of interest to both practitioners and academics to examine the price discovery process by investigating the lead-lag effects between the stock index, futures and options markets. The Taiwan Stock Exchange (TSE) Capitalization Weighted Stock Index Futures, launched on July 21, 1998, were the first organized financial derivative product traded on the Taiwan Futures Exchange (TAIFEX). In 2001, the TAIFEX also launched two other new products – the Mini-TAIEX futures and the TAIEX options on April 9 and December 24, respectively. Because of the thin trading volume problem, there have been few studies that deal with the lead-lag relationships among spot index, index futures, and index options based on minute-to-minute data. However, the trading volume of the TAIFEX stock index futures and options markets grew from 4.3 million contracts in 2001 to 114.6 million contracts by 2006, which was a huge increase. In addition, the TAIFEX options trading volume ranks the third largest in the world, next only to Korea in Asia.
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Asset Price Boom and Financial Market Perception of System Risk Dr. Ana Rimac Smiljanic, University of Split, Croatia
ABSTRACT Episodes of asset price booms have often been accompanied by an increase in private sector indebtedness and investment in an environment of low interest rates, low credit and regulatory standards, i.e. in an environment of reduced perception of system risk. This paper argues that asset price boom has an influence on a decreased perception of system risk in credit markets. In this study, we analyzed the influence of real estate and stock prices on the perception of system risk in the US since 1970 based on the co-integration VAR. The co-integration test suggests that long-term development of system risk perception in credit markets can be explained by asset price movements. Impulse response analysis based on Cholesky’s standard decomposition reveals that there is significant dynamic interaction between stock prices and the perception of system risk in credit markets. Analysis of the connection among asset prices, credit booms and economic activity is mostly related to the literature on business cycle models that incorporate the financial accelerator effect first explained by Bernanke and Gertler (1995). Due to this effect, significant shocks to asset prices, relative to the prices of goods and services, change the net value of the potential debtor who determines the scope and the cost of external financing. If debtors have more valuable stock and real estate in their portfolios, the creditors consider them to be higher quality debtors and they can obtain loans from financial intermediates more easily. With more valuable assets in property, the debtor pays a lower premium for external financing and thereby has lower financing costs for spending or investment. Much empirical research confirms this effect in developed countries (Bernanke and Gertler, 1989; Bernanke, Gertler and Gilchrist, 1999; Kiyotaki and Moore, 1997; Gertler and Lown, 2000; Mody and Taylor, 2003; Kakes and Ullersma, 2003, 2005; Adrian and Shin, 2008, etc.). Although the financial accelerator theory explains well the cyclical movements of the real economy, we believe that it is inadequate for explaining cyclical developments in the financial system.
Cited by; 1
Predicting Job Satisfaction Via an Organizational Ethical Conduct: An Empirical Investigation in a Private Hospital in Kuwait Dr. Muath M. Eleswed, New York Institute of Technology, Kingdom of Bahrain
Abstract A multiple regression model was utilized to examine whether or not job satisfaction of subordinates can be predicted by the organizational leadership ethical conduct. The study was conducted in a private hospital in Kuwait; it included one hundred and eighty one subjects, and took place between the months of May and July of 2008. Based on the outcomes of the regression model, the level of job satisfaction was predicted by three types of ethical conducts namely, caring, instrumental, and independence. Consequently, implications and recommendations for further study were made. Organizations should operate in a sound ethical manner as part of their social consciousness. When employees perceive ethical conducts among leaders in the workplace, they are more likely to act in the same manner (Erondu, Sharland, & Okpara, 2004). Ethical behavior is considered a vital component of leadership, therefore when leaders engender ethical practices in their organizations, they become more effective, efficient, innovative, and successful (Morgan, 1993). Unfortunately, leaders of organizations are constantly challenged to compromise their personal ethics in achieving the goals of their organizations (Weeks & Nantel, 1992). As a consequence of this challenge, ethical failures of many leaders have been showed virtually in every part of the world (Beyer & Nino, 1999) as evidenced by “scandals at Enron, Worldcom, Parmalat, Allied Irish Bank, and National Irish Bank” (Knights & O'Leary, 2006, p. 125). In recent years, the proliferation of concerns with the ethics of leadership has become more pronounced (Knights & O'Leary, 2006). Researchers have been extensively examining organizational ethics in all types of organizations. This is due to the fact that organizational ethics are becoming more complex as a result of globalization practices and because serious ethical lapses have emerged which have caused serious damage to organizations and societies (Beyer & Nino, 1999). According to Koh and Boo, (2001), ignoring ethical concerns such as “societal expectations, fair competition, legal protection and rights, and social responsibilities” (p. 209), drastically impact organizations.
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Game Theory Analysis on Enterprises’ Behaviors Under the Environment Tax Dr. Chen-Kuo Lee, Lin Tung University, Taiwan Dr. Chung-Ming Lin, Chienkuo Technology University, Taiwan
ABSTRACT Economists and government authorities are concerned for the tensions arising between economy and resources in connection with the scarcity of environmental resources and the externality of production. How to alleviate the tensions through environmental governance means has become the most critical concern for the economists and governments around the world. The objective of this study is to apply game theory to analyze the enterprises’ behaviors under the environment tax. The research results indicate that the enterprises adopt all kinds of game countermeasures to defy the laws and ordinances governing the environment taxes in order to maximize their profits. Their defiance reveals the difficulties faced by the enforcement of environment laws and ordinances. In the final chapters, this study presents the tangible methods to serve as the guiding principles and taxation theoretical basis needed by the environment tax. From the economist’s standpoint, environmental issues and economic issues are two sides of a coin. Enterprises launch environmental protection activities (e.g. pollution preventive techniques) depending on their economic benefits or profits. Western economists apply the externality of economic activities to interpret the formation of environmental issues. The externality of economic activities is divided into external economics and external diseconomics. The external economics is also known as the constructive, positive or beneficial externality. The external diseconomics is known as the destructive, negative or harmful externality. The external diseconomics serves as an internal factor that causes the economic subject to overlook environment protection and to refuse to invest in the economic protection. Furthermore, the external diseconomics, including all economic activities related to development and utilization of resources, serves as the internal factor that causes pollution and destructs the environment.
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Analyzing Factors that Drive Consumers to Purchase Counterfeits of Luxury Branded Products Dr. Ayse Sahin, University of Mersin, Turkey Kalender Ozcan Atilgan, University of Mersin, Turkey
ABSTRACT The purpose of this study is to analyze the factors that drive consumers to purchase counterfeits of luxury-branded products. The study is conducted in Mersin and the sample used in the study is determined by convenience sampling method. With the data obtained from 404 participants using survey method, the factors that drive consumers to purchase counterfeits of luxury-branded products and the effect of these factors on the purchase intentions of the consumers are analyzed. The results of the empirical analysis suggest that consumers who perceive counterfeits of luxury-branded products as having high quality-price ratio and find ethical about purchasing such products affect their intentions of purchasing such products positively. It is also seen that the purchase intentions of consumers who find ethical about purchasing counterfeit branded products are high. As the education levels of the consumers increase, they think purchasing counterfeit products as an unethical action more. While consumers purchase products, they also purchase the symbolic values of those products. Especially luxury-branded products are preferred by consumers because of such values besides their functional properties. The fact that counterfeits of the luxury-branded products are available as alternatives besides luxury-branded products is promoting consumers to purchase these counterfeits instead of actual luxury-branded ones. In the recent years, the counterfeits of luxury-branded products are widely preferred by the consumers. Even though, the demand for counterfeits of luxury-branded products is high especially in Turkey. A significant gap is realized when the literature is reviewed for the reason why counterfeit brands are preferred. In this sense, the study will provide significant contributions to the marketing theory and manufacturers of luxury-branded products.
Cited by; 26
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