ISSN: 1813-0534






Volume 5 No 2 August 2009

Characteristics of US Firms with Best Employee CommitmentAn Empirical Analysis

Srinivasan Ragothaman and Kummoli Ramakrishnan
Beacom School of Business, The University of South Dakota, USA


Fortune magazine publishes an annual ranking of “Best 100 companies to work for in
America.” We refer to these as the Best Employee Commitment group (BEC firms). We investigate whether these companies differ from a control group of firms, in underlying aspects such as risk, market power, size etc by studying underlying financial ratios. We find significant differences between the ranked firms and the control group, in performance and structure. We also find market recognition of the performance differences. The better performance by the BEC firms also seems to be rewarded by the market in that these firms had significantly higher Market to Book value ratios, reflecting that investments in making the firm a better place to work pays off for shareholders. BEC firms have larger cash flow to sales ratios when compared to control firms indicating their superior profitability. Only a limited number of individuals can aspire to work for the best 100 firms. By identifying significant differentiators between the BEC firms and other firms, we may be able to come up
with a method of assessing whether an unrated firm has characteristics that could support “best companies to work for” aspirations.


The Impact of Individual Ethics on Perceived Invasion of Privacy by Fraud Prevention Measures

Thomas Sing Chiu Lau Peter S Cheng
School of Accounting and Finance The Hong Kong Polytechnic University Kowloon
Hong Kong


This study examines the effects of ethical orientations on perceived invasiveness of fraud prevention measures in organizations including body scan (SCAN), close circuit television(CCTV), employee background check (CHECK) and monitoring of employee internet activities (SURV). Using 88 final year undergraduate business students as subjects, I examine the effects of individual ethics, measured in terms of utilitarianism (UT), formalism (FM), ethical development indices, and Machiavellianism (MACH) on their perceptions that these measures are invasions of individual privacy. Results of the study reveal that subjects who scored high on the personal interest schema on the ethical development indices perceived SCAN, CHECK, and SURV as more of invasion of privacy, while those who scored high on
the maintaining norm schema perceive them less of an invasion. Subjects with a stronger UT outlook perceive CCTV as invasive, while subjects with a stronger FM outlook perceive it as less of an invasion. The results suggest that there is significant influence of individual ethics on the effectiveness of fraud prevention measures in organizations, denoted by their perceived invasion of individual privacy.

KEYWORDS: Fraud Prevention Measures; Invasion of Privacy; Ethical Reasoning; Machiavellianism.

Emotional Labor and It’s Impact on Licensed Funeral Directors

Dr. J. R. Smith,Jackson State University,Jackson, USA
Dr. Kimberly M.,Delta State University,USA
Dr. Alisa M. Mosley,Jackson State University,USA
Dr. Glenda B. Glover,Jackson State University,USA


This study empirically identifies the emotive dissonance and emotive effort dimensions of emotional labor and their relationships to the emotional exhaustion, depersonalization, personal accomplishments and job satisfaction consequences of emotional labor with respect to licensed funeral directors. Though this framework, this article presents hypotheses relating to the dimensions and consequences of emotional labor. Emotive dissonance as hypothesized resulted in higher levels of emotional exhaustion. An inverse relationship resulted with higher levels of emotive effort indicating lower levels of depersonalization. No support was revealed for hypothesized higher levels of emotive dissonance being indicative of lower levels of job satisfaction; and higher level of emotive effort resulting in higher levels of job satisfaction. Implications for future research are also discussed.
Death is an inevitable occurrence. Normally people do not want to talk about it or think about it - let alone be around it. But those in the funeral services industry have chosen to deal with death daily. It is one of the few industries that survive as a result of death. In addition to the physical labor requirements of the job (e.g. removal of the deceased, embalming), the licensed funeral director is also required to perform emotional labor. As one of his greatest tasks, he shoulders the responsibility of comforting the bereaved as they prepare to make final arrangements for their loved ones. In this capacity, the licensed funeral director is expected to appear understanding, sympathetic, and somber about his potential clients' loss. Although his experienced personal emotions may not match the expected job related emotions, by
displaying the expected emotions, the funeral director aspires to encourage the bereaved to entrust the care of their loved one to his establishment.
This requirement to invoke or suppress personal emotions (feelings) in order to display appropriate job related emotions in an attempt to yield desired customer responses, is called emotional labor (Hochschild, 1983). In examining the emotional labor theory, researchers have considered a wide array of occupations, including flight attendants(Hochschild, 1983), table servers (Adelmann, 1989), Disneyland employees (Van Maanen &Kunda, 1989), cashiers (Rafaeli & Sutton, 1987; Rafaeli, 1989; Tolich, 1993), bank employees, and hospital workers (Wharton, 1993), the majority of which require workers to behave exceptionally enthusiastic. What are the effects of emotional labor in an occupation where the clients and workers are interacting over what is described as the most emotion invoking aspect of life - death (Lofland, 1982; Gentry, Kennedy, Paul, and Hill, 1995?

Human Capital and Organizational Performance in Malaysian

Polytechnics- A Preliminary Finding

Salomawati binti Ishak Polytechnics Sultan Azlan Shah, Behrang, Tg Malim.Malaysia
Che Noraini binti Hashim, PhD International Islamic University Malaysia,
Nek Kamal bin Yeop Yunus, PhD University Pendidikan Sultan Idris,Malim,Malaysia


The importance of intangible capital has been much discussed and the Government of
Malaysia places great emphasis on improving the human capital of its labor force for the betterment of organizational performances. It is widely known that intangible capital such as human capital, whether in the form of knowledge, experience, professional skills, good relationships or technological capacities – is a major source of competitive advantage. This research attempted to answer a few questions such as, what are the underlying dimensions of human capital? and secondly, are these factors significantly related to organizational performance of the polytechnics in terms of student satisfaction. Data collected were sorted and analyzed by using SPSS version 12.5. The principle component analysis technique was employed. The initial result indicated that Professional Skills, Information Communication Technology skills and Education attainment of the lecturers were the underlying dimensions of human capital in this context. The result of the analysis also showed that the Professional
Skills, Information Communication Technology skills and Education attainment of the lecturers’ were significantly correlated to the organizational performances. That means human capital factors are significantly related to the organizational performance. Together the independent variables explained 12.5% of the variance in the organizational performance.Recommendations for future research were discussed in the last section of the paper.

Keywords: human capital, organizational performances, professional skills, education and ICT skills

Achieving Cost Effective Service Excellence at Singapore Airlines*

Loizos Heracleous,University of Warwick,United Kingdom
Jochen Wirtz ,National Singapore University


Singapore Airlines has achieved the holy grail of strategic success; sustainable
competitive advantage. It has consistently outperformed its competitors throughout its more than three and a half decade long history, after its reincarnation from Malaysia-SingaporeAirlines into Singapore Airlines (SIA) in 1972. SIA has never posted a loss on an annual basis,and has achieved substantial and superior returns in an industry plagued by intermittent periods of disastrous underperformance2.
SIA has achieved this feat by managing to navigate skillfully between poles that most
companies think of as distinct; delivering service excellence in a cost-effective way. With regard to service excellence, SIA’s awards list is long and distinguished, winning industry service awards year in year out. According to Ian Batey, founder of Batey Ads, the agency that has created and nurtured the “Singapore Girl” brand since the inception of the airline:“From the very first days of SIA, several things were clear in the mind of the brand owner:the airline was determined to be a highly profitable brand, and the best airline brand in the aviation industry. Quite a modest mission, would you not say, for the airline of one of the world’s smallest nations!” (
The Singapore Girl, an influential and potent brand carefully developed and safeguarded over the years, is known worldwide as the tangible embodiment of this caring, professional service. According to Batey, every SIA advertisement features the genuine article, real Singapore Girls; Batey Ads developed the image as follows: “Physically, she has the attractive, natural looks of most young Asian women, and her trim figure is ideal for the distinctive sarong kebaya uniform. Character-wise, she mirrors her Asian heritage – natural femininity, natural grace and warmth, and a natural, gentle way with people” (Batey 2002).

With regard to cost effectiveness, as we elaborate below, SIA is so efficient that its costs(in terms of cents per available seat kilometer) are surprisingly low. SIA has managed to integrate elements of a differentiation strategy (with regard to external positioning and service levels) and cost leadership strategy (with regard to efficiency of internal organization), in a way that had been deemed impossible. Below we give an overview of SIA’s business-level strategy, corporate-level strategy, before we discuss in more detail its five pillars of costeffective service excellence. Collectively, these five pillars help us understand how SIA integrates elements of differentiation and cost leadership strategies.

Efficiency of Competitiveness Priorities on Adoption of Eprocurement
System to Enhance Service Performance: A Case Study in Universiti Teknikal Malaysia Melaka

Associate Professor Dr. Raja Roslan bin Raja Abd. Rahman
Associate Professor Dr. Abu Bakar Mohd. Diah
Associate Professor Dr. Azizi Haji Yahaya
Ir. Abd. Talib Bin Din
Noor Watee Binti Haji Rahman
Juan Rizal Hj. Saari
Universiti Teknikal Malaysia Melaka (UTeM)
Universiti Teknologi Malaysia (UTM)


The purpose of this study is to measure the efficiency of competitiveness priorities on
adoption of Electronic Procurement system to enhance service performance: A case study in Universiti Teknikal Malaysia Melaka. A survey was carried out through a set of questionnaires. Pilot test was conducted to obtain the reliability of the instruments. The sample size is 200, but only 153 respondents participate in this survey. The staffs are from Durian Tunggal, Ayer Keroh and Kampus Bandar. The data collected were coded and analyzed using both descriptive and inferential statistics. Based on the findings, the result revealed that most of the respondents (49.7%) believed that reduction in cost such as inventory, invoice with Electronic Procurement. The findings also established that most of the respondents believed that administrative tasks such as paperwork & manual filing reduce with Electronic Procurement (59.5%). In terms of quality, 49.7% believed that it is easier meeting the customer’s expectation towards product and services increase with Electronic Procurement. Thus, it showed that it is very important to meet the customer expectation and satisfaction in order to enhance the quality requirement. Apart from that, based on the response associated with competitive priorities and service performance, 67.3% of the respondents assumed that the main priority on using Electronic Procurement is to increase the quality service of the government sectors. The result also indicated that there was a strong positive relationship between cost (.778), time (.758) and service performance. In fact, result also showed that there was a strong positive relationship between quality (.786) and service performance. The result also showed that there was a high association between competitive priorities (.865) and service performance. It is stated that we accept the alternative hypothesis because there was high positive relationship between competitive priorities and service performance in UTeM. In conclusion, each element in competitive priorities such as cost, time and quality are important to enhance service performance in UTeM. This is hope that Eprocurement
can go further and can enhance the delivery system in Malaysia.

Keywords : Efficiency, Competitiveness Priorities, Adoption, E-procurement System, Enhance Service Performance, Universiti Teknikal Malaysia Melaka

How Can We Successfully Implement The ERP Activity?

Te-King,Chien and Huei-Shan,Tseng
National Formosa University,Taiwan


Verified by many evidences, an unsystematic guidance process (without an
implementation map) may cause an improper sequence not followed by an enterprise finally having failures bewilderingly despite practitioners’ respect and scholars’ research achievements for the issue of how to successfully implement and develop Enterprise Resource Planning (ERP).
Against this background, the key factors and process for successful implementation of
ERP are controlled in this study via literature reviews, and all critical dimensions, categories,and items as regards implementation of an ERP activity are summarized with the PDCA management cycle as a basis. Simultaneously, with an activity’s dimensions and categories ensured by four business operators for ERP systems and eight cooperative company owners under assistance of some techniques such as Focus Group Interviews and Delphi method, the results derived from questionnaires are forwarded to analyses in reliability and validity statistically. Finally, the casual relationships between the definite authority and duty of all items and categories are confirmed with the Delphi method again to successfully complete an implementation map for an ERP activity.
For the sake of ensuring this implementation map’s value and feasibility, we invite foure nterprises to join our study for further observation. Indicated in results, the best satisfaction degree can be observed at one enterprise having an ERP activity subject to the implementation map compared with the second-high satisfaction degree at the enterprise adopting key items, the third satisfaction degree at the enterprise regarding the implementation map as a critical reference and deciding it at one meeting, and the worst satisfaction degree at the enterprise without emphasis in the map but high-level executives’ opinions only. By and large, it is believed that the implementation map for a successful ERP activity offered in this study contributes to not only reduction of time spent in try and error for implementing ERP or possible failures but also accurate control of an enterprise’s activity process and resource distribution, which will be favorable to a successful ERP activity implemented by one enterprise.

An Empirical Study on Influential Factors over Local Enterprises’Learning Effect

Dr. Po-Wei Pan, Assistant Professor, Huang Chuang University, Taiwan


Do what influence the learning effectiveness of local firms from MNCs subsidiaries in China?

From local firms’ perspective, we propose a learning model of locals within
multinational company networks, and also do an empirical study on the two determinants of local firms’ learning effectiveness, which are its social capital and absorptive capacity(ACAP). Furthermore, the mediator roles of local firms’ knowledge accessibility and relative absorptive capacity have been found out. The result indicates that our model is fit basically;both social capital and absorptive capacity make no direct impact on learning effectiveness of local firms. Inter-organizational trust of social capital has significant impact on the outcome
through the mediator of knowledge accessibility. However, relative absorptive capacity is found not only influences learning effectiveness directly, but also plays a mediator role significantly.

Keywords: Social Capital; Absorptive Capacity; Relative Absorptive Capacity; Learning effectiveness of local firm

Antecedents Organizational Communication: Evidences from

Indian Manufacturing Organizations

Soumendu Biswas, PhD, Assistant Professor-Management Development Institute, India


This study examines the antecedents and consequences of organizational communication within the setting of manufacturing firms in India. The authors conceptualize organizational communication as a mediator between organizational culture and individual and organizational performance. The conceptualization of the proposed model is based on the review of existing literature in the relevant areas. The authors highlight the practical implications of their study in the context of the research setting. The results of the study suggest that organizational communication does have a major role to play as a mediator between the culture and individual and firm-level performance primarily because communication as a process is based on the collective sense making of individuals which in other words, refer to the homogeneity of perception that make up an organization’s culture.

Comparing the East with the West on Retail Structure

Jianfeng Jiang, Northeastern Illinois University, USA
Qiumei Jane Xu, Northeastern Illinois University, USA


Retail systems vary among geographic markets. The global expansion of the retailindustry calls for investigating the causes of those variations. Using the latest census data, we conducted a cross-cultural study to examine the variations of retail structure in eastern and western markets on the basis of six key socio-demographic and environmental variables. The findings indicate that the effects of those variables vary by markets. The study suggests that retailers need to adapt their strategies to the markets in which they want to expand business, and public officials need to improve the regulation of the retail industry based on an appreciation of the market conditions

Open-ending Czech Closed-End Funds: Evidence from Transitional Market

Irena Jindrichovska
The Business School , University of Buckingham, UK


This paper describes the process of open-ending of investment trusts and closed-end
funds in the Czech Republic. The investment trusts were created in 1991 and 1992 during the Czech privatisation process as the only means of collective investing. In the mid-1990s the Czech market place was largely illiquid and the discounts of investments trusts (the difference between the market price and the funds' net asset value – NAV) were high. Some foreign as well as Czech institutional investors pushed for the open-ending of the funds to cash the discounts and, in the process, to make the market more liquid and more transparent.
Using the event study methodology, and daily data from July 1997 to April 2000, this
paper analyses the price reactions, which occurred in this period. A price reaction was
expected in two instances: during the period when the necessary legislation was prepared in the parliament, and later, during the period of public announcements regarding the openending of each individual investment fund. Our results find that abnormal returns can be observed during the period of legislative and institutional changes but not in the period of actual announcements of open-ending of these funds. We suggest that this has relevance to the question of Czech Market Efficiency. These results, however, should be interpreted with caution due to the small sample of funds studied in the second event and due to the fact that during the period under investigation there were other environmental factors interfering with
our subject of interest.

Keywords: Czech capital market - investment trust - closed-end fund – event study

Mutual Fund Performance in the Mainland China Market

Tzu-Yi Yang and Yu-Tai Yang, Northwestern Polytechnic University, USA and Chung Yuan Christian University,Taiwan


This paper studies the performance of mutual funds in China market during July 2003 to December 2007. We use top 50 companies’ invested by mutual funds to measure the performance of mutual funds in the Chinese market via CAPM model. The empirical results show that the performance of mutual funds has a poorer performance than the stock markets,especially during the period of economic growth.

The Determinants of Banking Sector Development in


Han Yu
Guizhou College of Finance and Economics, Guiyang, P. R. China
Bee-Hoong TAY
Universiti Teknologi Mara, Malaysia
Pei-Tha Gan
Universiti Pendidikan Sultan Idris, Malaysia


This study examines the determinants of banking sector development from the
perspectives of real income, real interest rates, trade openness and financial liberalization.Two models of banking sector development indicators are employed in this study, namely liquid liability and private sector credit. Using data from Malaysia, the empirical results suggest that (1) higher GDP will strengthen the banking sector development, however,financial liberalization appears to destabilize the banking sector development, (2) the real interest rates and trade openness are not statistically significant determinants of the banking sector development, and (3) the financial reforms in Malaysia require financial liberalization to come in a later stage, when adequate institutions and sound macroeconomic policies are already in place.

The Application of Activity-Based Costing in British
Manufacturing Industry

John A. Brierley, Management School, University of Sheffield, Sheffield, United


Activity-based costing (ABC) has been advocated as being the most appropriate method of assigning overhead costs to product costs. This paper uses the results of a questionnaire survey and interviews with management accountants from operating units in British manufacturing industry to consider a number of research questions. The questionnaire considers how many operating units use ABC, how many activity cost pools and cost drivers are used to assign overhead costs to product costs, which types of hierarchy of costs are used in ABC systems, whether or not non-manufacturing overhead costs are included in ABC product costs, whether operating units distinguish between resource spending and resource usage, and whether operating units use the weak form or strong form of ABC. The interviews

consider why operating units use or do not use ABC and, for those using ABC, how the ABC system operates.

Solving A Budget Allocation Problem Using bi-level Linear l


Yeou-Herng Yang a, , Hsiao-Cheng Yu a, Yi-Hsin Liu b+
a Institute of Management of Technology, National Chiao Tung University, Hsinchu,
bDepartment of Marketing and Distribution Management, Hsuan Chuang University,
Hsinchu, Taiwan


To formulate a mathematical budget allocation model with the bilevel objectives and
constraints is a challenging problem, and to solve this type of problems is even a bigger challenge. This paper proposes a linear bilevel programming to address this problem. It is a mathematical programming model that for feasible allocation of budget. The model of budget allocation objectives include: low-level units must be maximize the overall potential contribution of projects to be funded, and upper-level decision maker will be minimizing the difference between the highest and the lowest hit rates of budget contending organizations.

Keywords: budget allocation; linear bilevel programming; Kth-best approach


Capital Structure, Competing or Completing Theories

Abdelaziz Chazi, American University of Sharjah, UAE


We offer a new view on capital structure based on the idea that the three main theories in this area, tradeoff, pecking order, and market timing are completing rather than competing theories as presented in the literature. We decompose our Compustat sample into three sub samples based on the debt ratio at time t-1. Since 0.49-0.5 is the mean debt ratio between 1973 and 2002, we consider the range of 0.4 to 0.6 as being the target debt ratio range or the moderate leverage range. A firm having a debt ratio below 0.4 is considered a low leverage firm; the one with a debt ratio above 0.6 is considered a high leverage firm. Further, within each sub sample a firm is categorized as having a financing deficit when the sum of its equity and debt issues, EI+DI, is positive, and a financing surplus when EI+DI is negative. We also rank companies by market-to-book and assume that a firm has a high market-to-book when the latter is above average in a given decade. We test the effect of the above categories on the

change in leverage and other financing decisions. Our results show that the pecking order and market timing models allow firms to rebalance their debt ratio to a target range following a general tradeoff framework. The results in this paper offer a new perspective to Finance managers on corporate financing decisions.

Decision Making through Financial Ratio Evaluation; An
Analysis of A Port Industry in Malaysia

Anbalagan Krishnan and Dr Junaid M.Shaikh, Curtin University of Technology, Sarawak, Malaysia


The Malaysian port industry is at the growth stage of industry life cycle, and is viewed as a key growth driver as Malaysian ports position themselves as international transshipment and logistics hub (Bernama, 2004). Many investors are looking into the possibilities of earning good return from the public listed port shares. Financial ratio analysis plays an important role in their decision-making. The financial ratio analysis provides the investors the company’s liquidity position based on historical data. It also gives input to the company’s managers about company’s performances. Although the ratios are calculated using the historical data but it attempt to predict future trend. This historical trend may not continue due to changes in economic and business environment but this information is necessary in order to provide a valid recommendation to suit the economic and business environment in which the company operates. The financial statement analysis is not the end in understanding the company’s financial situation, it need to be compare with other industry averages of similar companies. Industry averages are not the final ratio numbers that the company should maintain, but, rather, a general rule of thumb to give the company an indication of where other like size companies in their industry stand. Thus, the ratio analysis will be meaningful if it is compared with other similar industries. This paper discusses a selected port financial analysis of its performance and the ratios interpretation.
Keywords:Financial Ratios, Ratios Interpretation and Investors decision-making criteria

Experiential Learning:A ‘hands-on’ Approach to A Running A Management-Consulting Class

Ian Douglas, University of New South Wales, Australia


By its nature the consulting profession requires a combination of communication, problem solving, analysis and innovation. These align well with the graduate attribute objectives of business schools. In developing a post-graduate consulting course, a key objective was allowing students to build these skills through work related learning facilitated by the university’s office for community engagement. As assessment builds around a client, the ommunity contribution of the projects gives students a purpose beyond the assessment process, and helps to generate positive engagement. Frequent feedback maintains student motivation and responsiveness.
It is inevitable that students will enter the subject with differing work and study
experience, as well as with differing perspectives on the topics addressed. This potentially unsettling situation is addressed when students are introduced to Kolb’s (1984) learning styles and are encouraged to consider the approach they take to learning. Students identify areas of strength such as intuitive problem solving, abstract conceptualisation, or reflective observation, as well as the range of processes they may go through when learning. Students (without exception) indicate that this introduction to the learning process is a positive factor,and is usually their first explicit exposure to the concepts.
Using the Kolb framework as a basis, students are encouraged to move through the cycle of concrete experience, observation and reflection, formation of abstract concepts, and testing.It is recognised that the Kolb model faces criticism for its Western cultural basis and relative simplicity, but it is this simplicity that makes it a useful tool or encouraging student reflection.

Keywords:Management consulting, Not-for-profit, Experiential learning.

Best Practices in Online Teaching:A Primer for the
Technologically Challenged

Dr. Jason T. White, Assistant Professor, Department of Accounting, Economics and Finance
Dr. J. Patrick McLaughlin, Professor, Department of Accounting, Economics and Finance
Northwest Missouri State University,USA


The authors trace the development, from the conception of an online course idea, in Business Law I, through course design and content development, to teaching the class for the first time. The authors are partnering together to team develop and teach the class. Dr.McLaughlin has nearly 30 years of Business Law teaching experience, none of it online, while Dr. White has a wealth of experience by teaching at least six online classes per year in Economics, Finance and Entrepreneurship, but has never taught the Business Law course. The authors reveal some of the pitfalls of development, guiding the reader around such obstacles as funding for development; institutional commitment; effective course design;pedagogy concerns; and delivery issues.
We feel that this paper will appeal to faculty, deans and support staff engaged in distance learning initiatives, or those considering such a venture. It appears to us that this paper would work well in a session of the International Academy of Business and Economics.


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ISSN: 1813-0534