ISSN: 1813-0534






Volume 7 No.2 August 2011 Edition

1. Intertwining 360 Degree Feedback & Multi- method to Enhance Emotional Intelligence of Managers
Dr. Radha R. Sharma
Professor, Organisational Behaviour & HRD
Management Development Institute
Gurgaon , India

Competency based approach to emotional intelligence (EI) has been adopted to a)
identify development needs of the focal persons (middle level managers) from public sector organisations through 360 degree feedback (from significant others- supervisor, peers and subordinates); b) identify EI competency gap through comparison of self assessment by the focal persons with perception of significant others; and c) determine the impact of a multimethod EI intervention in bridging the perceptional gap with significant others. The study assesses efficacy of 360 degree feedback in EI competency gap analysis. As EI competencies are diverse in nature, the study empirically demonstrates benefit of ‘multi-method’ approach in enhancing EI competencies and bridging perceptional gap with significant others for managerial effectiveness.
Keywords: Emotional intelligence & 360 degree feedback; multi- method for development of emotional intelligence; emotional intelligence competencies for managers; emotional intelligence; 360 degree feedback; enhancing emotional intelligence

2. Perceived Fairness of Layoff and Its Impact on Layoff Survivors: A Case of MNCs in India
Dr Sumita Rai, Management Development Institute, Gurgaon , India.

The globe is facing challenges due to recent economic melt-down. Lay-offs have
become organizational reality. There is no muse that losing job is a stressful experience for employees who are being laid off but this generates anxiety and stress for the employees also who have seen people leaving the organization. This research endeavour is attempted to understand the perceived fairness of lay-off and its impact on lay-off survivors (people who are not laid off). Based on the justice theory framework this study aimed to address two important research questions whether commitment of layoff survivors is dependent on the procedure through which organization implemented the lay-off and which aspect of procedural fairness is critical for the commitment of Lay-off survivors. There is lot of work in the area of justice perceptions and organizational commitment (Bennett et al, 1995; Wanberg,
Bunce & Gavin, 1999). Researchers (Brockner, Grover, O, Malley, Reed & Glynn, 1993;Brockner, et al, 2004) have conducted study to see the impact of lay-off on layoff survivors.The sample population of this study was 361 employees of an Indian MNC that come under service (IT& ITES) organizations located in northern part of India. Results are discussed towards highlighting the role of fairness in the lay-off process, on commitment, extra role behaviour and stress of lay-off survivors. The findings also highlight the impact on work behaviour attitude of employee and productivity effectiveness of the organization.

3. Latecomer Advantage and Environmental Kuznets Curve
Hypothesis in Central and Eastern Europe and New independent States
Yu-chin Pang,Chihlee Institution of Technology, Taiwan

The purpose of this study is to assess the impact of latecomer status in explaining economic and environmental deterioration issues in Central and Eastern Europe (CEE) and New Independent States (NIS) since these transitional countries reoriented their economic system to market capitalism.
The Environmental Kuznets Curve (EKC) hypothesis is applied to explore the
relationship between latecomer statuses and air emissions, carbon dioxide (CO2) and sulphur dioxide (SO2). A set of macroeconomic indicators, includes GDP per capita, secondary industry to GDP, energy efficiency, international trade, and foreign direct investment, was also addressed to explain emissions changes in CEE and NIS. A quantitative,non-experimental correlational (explanatory), causal-comparative analysis with reduce regression model was adopted to predetermine latecomer statuses and macroeconomic indicators on CO2 and SO2 in CEE and NIS countries from 1990 to2005, which is the most recent data available.
Findings of this paper indicated that not all latecomer status could benefit from bein latecomers in environmental deterioration issues, only those countries with “medium latecomer” status tended toward benefits from being latecomer in reduced both CO2 and SO2.This result was consistent with Mathews (2002), Perkins and Neumayer (2005), and Iwami(2005) who proposed that latecomer economies can diffuse new environmental technology more easily than early environment improving technology adopters.
This investigation was the first study to hypothesize that the latecomer status in
transitional economies is a mediator variable for environmental deterioration. Latecomer status was measured by the changes of shares of market capitalization of listed company on GDP.

4. Antecedents of Affective Organizational Commitment and
Turnover Intention of Academics in Selected Private Universities in Malaysia
Tek-Yew Lew, School of Business, Curtin University Sarawak Malaysia

This study aims to test the structural model that explains the relationships between
career development opportunities, perceived organizational support, felt obligation, affective organizational commitment and turnover intention of academics working for four (4)selected private universities in Malaysia. This study found that the academics’ perceived career development opportunities positively influenced the level of POS direct positive relationship with affective organizational commitment. Besides, POS has not only a direct influence on organizational commitment, but also an indirect impact via felt obligation, confirming the partial mediator effect of felt obligation. Another interesting finding of the study was that the influence of POS on turnover intention is only through the indirect effect via affective organizational commitment. The results of this study add to our knowledge about the social exchange mechanisms that link HR practices with the employees’ affective organizational commitment and turnover intention.

5. Aligning Virtual Community and Business Strategy with A Dynamic Capabilities Perspective: A Case Study of The Oneup Network Corporation
Jeung-Tai Tang, National YunLin University of Science & Technology,Taiwan
Tzung-I Tang, National Chengchi University,Taiwan
Chi-hui Chiang, National YunLin University of Science & Technology,Taiwan
Yi-Chong Shiha, National YunLin University of Science & Technology,Taiwan

In recent years, the virtual community, one of the most popular web services, has
successfully aggregated multitudinous people, and created business opportunities for
industries. To discover critical factors influencing the development of the virtual community, this research applied a case study of qualitative research, based on a dynamic capabilities perspective. The research target was the Oneup Network Corporation, and the research data was collected from multi-source data, including primary and secondary data. The findings of this study show that the virtual community needs to adjust its position and ability in the environment, and obtain critical assets in each phase to cross to the next phase. Previously established pathways influence virtual community development, hence the virtual community
needs to use a unique path to seize opportunities.
Keyword: Dynamic Capabilities, Virtual Community

6. Measuring Earnings Quality: Evidence from New Zealand
Muhammad Nurul Houqe, Victoria University of Wellington, New Zealand

We utilize two basic approaches to measure the quality of earnings which control two
different dimensions of earnings management. The research design is structured primary on the basis of calculating two different measures of the quality of earnings on the industry level and on the company level. We calculate earnings quality for New Zealand public firms from the OSIRIS ( database for 2004-2007. This research concludes that various stakeholders should apply more than one measure for the quality of earning in order to have strong evidence about the level of quality before taking any corrective action or making any decision related to that company. If one company is having low quality of earning according to one technique and high quality of earnings according to another, the stakeholders cannot have a final conclusion about that company and they need more investigations and analysis to assess the quality of earnings.
Key word: Earnings quality, accounting information, financial analysts.

7. Corporate Capital Structure and Firm Performance: Evidence from Bangladesh
Afzalur Rashid, University of Southern Queensland, Australia
Ariful Hoque, University of South Australia, Australia

This study examines whether corporate capital structure reduces agency costs and
increases firm economic performance in Bangladesh, an emerging economy. By using two measures of agency cost, expense ratio and asset utilization ratio (or asset-turnover ratio), as well as two measures of performance, return on assets (ROA) and Tobin’s Q, analyses are carried out from an observation of 94 non-financial listed firms at Dhaka Stock Exchange. This study reveals that capital structure in the form of debt and equity neither reduces the agency cost nor improves the firms' economic performance. The implication of this study is that corporate governance mechanisms that work well in some developed economies may not work well in some emerging economies. Many firms, who are in fact very poor in terms of performance, may have employed debt to exercise control, but debt cannot reduce the dysfunctional behavior of firm. This study contributes to the literature by providing a new avenue of knowledge on corporate capital structure in an emerging economy.

8. Pricing Tactics and Strategies – A Practitioner’s Perspective for Innovators and Disruptors
Samuel Kohn, Peter Harris, Liz Washington Arnold, James Dunne,Nancy Hayes
New York Institute of Technology, The Citadel, USA.

Pricing Strategy is a critical component for strategic innovation, technology adoption
and change. While the “strategic innovation” literature recognizes that change and strategic innovation must deal with issues such as technology implementation strategy, technology sourcing and corporate innovation management. This research explores how creative use of pricing should be used to facilitate the introduction of disruptive and innovative client focused pricing. Price strategy and tactics are analyzed in how pricing fits a customer’s evolving style and sales approach and external environment and obtains suitable compensation from for telecommunication services found under the heading of disruptive and innovative strategies and new ways of doing things.
Keywords: Disruptive Technologies, Innovative Technologies Pricing, Telecommunications,Total Value Selling.
JEL: F0, F00, F01, F19, F39.

9. An Assessment of Influence of Budget Process on Budget
Performance:The Experience of Kwara State
Olanrewaju Atanda ALIU, University of Ilorin, Ilorin, Nigeria
Mudathir Olanrewaju SALAM, University of Ilorin, Ilorin, Nigeria
Rihanat Idowu ABDULKADIR, University of Ilorin, Ilorin, Nigeria

This study assessed the effects of budgetary process on budget performance in public
sector using Kwara State as a focus. Data were collected from primary and the secondary source using structured questionnaires administered to accounting officers, budget officers and the legislators in the State. The data collected were analysed with Kruskal-Wallis estimator. The study found that the existing budget process is significantly effective to attain better performance, though stakeholders on budget implementation differ on their perceived extent of compliance showing there has not been full compliance with the application of budget process. Finally, the study recommends improving extents of compliance with budget process via organising seminars and workshops by Kwara State Government for incumbent and would-be stakeholders in budget implementation and imposing sanction to serve as deterrent against failure to comply with established budget process.

10. Monetary Policy Satance for ASEAN-FIVE:The ARDL Approach
Wai-Ching Poon
Monash University Sunway Campus, Jalan Lagoon Selatan, Selangor, Malaysia

This paper uses quarterly data from 1980 to 2004 for ASEAN-5 founder countries to
estimate the weight of the Augmented Monetary Conditions Index (AMCI), and identifies the key transmission mechanism paths using Pesaran and Pesaran’s (1997) ARDL approach, and Pesaran et al.’s (2001) bounds procedure. The roles of credit and asset price channels are assessed for aggregate demand conditions and in the transmission of monetary policy. Results reveal evidence of cointegration for all the ASEAN-Five founder countries. The estimate for the interest and exchange rate elasticities of aggregate demand is used to determine the weight of the exchange rate in the AMCI, and the weight is then used to construct the AMCI ratio. Results reveal that exchange rate, asset price, and interest rate channels are three key transmission mechanisms in the conduct of monetary policy in Indonesia and Thailand. Meanwhile in Malaysia and Singapore, exchange rate, both the long and short term interest
rate, and credit channels are three key transmission mechanisms in the conduct of monetary policy. In the Philippines, four key transmission mechanisms take place, namely the interest rate, exchange rate, credit, and asset price channels, with short rate relatively weaker than the long rate at the margin. The estimated weights of real interest rates and real exchange rate are used to estimate the AMCI ratios. The AMCI ratios range from 0.052 to 0.664 [0.052:1 for Philippines, 0.056:1 for Thailand, 0.073:1 for Indonesia, 0.109:1 for Malaysia; and 0.664 for Singapore]. Monetary conditions during the period under-study are found to be reflected in each of the central banks’ reaction to the prevailing economic situation, which implies that
AMCI tracks the movements of the real GDP plausibly on the average, particularly after 1997.

11. Foreign Direct Investment-Economic Growth Link: The Role of Domestic Financial Sector Development in Bangladesh
Dr Mohammad Mafizur Rahman, University of Southern Queensland,Australia
Muhammad Shahbaz, COMSATS Institute of Information Technology,Pakistan

This paper aims to investigate the links between foreign direct investment(FDI) and
economic growth through financial sector’s development(FD) in the case of
Bangladesh.Using annual data series of world bank for the period of 1983-2008,the
unrestricted error correction method(UECM) developed by Inder(1993) is employed.FDI alone affects economic groth negatively in the long run.However,FD variable and the interaction term between FD and FDI (FD*FDI) are showing positive impact on GDP growth in the case of Bangladesh.Public investment or public capital stock also stimulates economic growth in the long run.This paper proposes that Bangladesh Government should undertake financial reforms to improve the efficiency of the domestic financial sector.Appropriate steps must be taken to further liberalize the capial account to enhance FDI.Care must be taken to ensure efficiency of delivery of services and increase productivity of public investment.This paper convincngly argues that bthere is a need for case-by-case study on such a project in view of each country’s unique characteristcs.To the best of our knowledge,this study seems
to be a good and unique contribution in litersture with reference to bangladesh as this is the pioneering attempt that employs UECM for a case study on Bangladesh.

12. Comperative Advantage Analysis in Selected Trade Deficit Categories in Australia: 1990-2006
Samuel Belicka
Victoria University, Footscray Park Campus,
Melbourne, Australia.
Ali Salman Saleh
Swinburne University of Technology
Victoria, Australia

This study develops and calculates the Comparative Advantage (CA) indices between
eight selected Trade Deficit (TD) countries (China, France, Germany, Malaysia, Singapore,Thailand, United Kingdom, United States of America ) in 4 selected TD goods categories(542: - Medicaments incl. Vet; 759: - Office Equipment Parts/ Accessories; 764: - Telecoms Equipment NES and 781: - Passenger Cars Etc.) and are all based on SITC-31 level of aggregation. The CA analysis was conducted by calculating and observing the Balassa Revealed Comparative Advantage Index (BRCAI), the Vollrath Revealed Export Advantage Index (VRXAI), the Vollrath Revealed Import Advantage Index (VRMAI), the Vollrath Revealed Trade Advantage Index (VRTAI) and the Vollrath Revealed Competitive Advantage Index (VRCAI). In addition to the CA indices, the trade performance indices are analysed by calculating and observing the Trade Specialization Index (TSI), the Export Propensity Index (XPI), the Import Penetration Index (MPI) and the Export/ Import Ratio (XMR). The overall results indicate that Australia records a Revealed Comparative Disadvantage (RCD) in all the selected categories. Furthermore, there is evidence that the X in all categories is increasing overtime as a proportion of the domestic output and the M competition for the Australian producers in all categories is increasing.
Key words: Comparative advantage, trade deficit, trade indices, Australia

13. The Evolution of Australian Exchange Rate Strategies and Australia’s Capacity to Maintain A Strong Floating-Currency Regime
Jinmei Yang and Mahinda Siriwardana, School of Business, Economics and Public Policy
University of New England, Armidale,Australia

As an industrial country, Australian authorities implemented various exchange rate
policies at different stages by combining the world’s trend and its particular domestic
economic environment. There are three stages of exchange rate regimes that Australia has been experiencing so far. The first stage can be called the absolutely-fixed regime from December 1931 to November 1976, including three sub-regimes: Australian dollar pegging to the British Pound, pegging to the U.S. dollar and pegging to the fixed effective exchange rate (TWI); the second stage is the Crawling Peg regime from November 1976 to December 1983; the third stage is the pure-floating regime since December 1983. At each regime, the authorities took different approaches to exchange rate to reach the different economic objectives. This paper attempts to present the evolution of Australia’s exchange rate system from a fixed to a floating stage and then up to present, including a description of some relevant institutional developments, such as the removal of capital controls, the development of the Australia’s foreign exchange market. The analysis sheds light on Australia’s capacity to absorb global financial crises by maintaining a strong floating-currency regime.
Keywords: exchange rate, evolution, peg regime, float regime, Australia
14. The Relationship among Financing Decisions, Investment Decisions, Cash Dividends and Earnings for The Aggregate Stock Market in Taiwan and China
Syou-Ching Lai ,Chang Jung Christian University,Taiwan
Hung-Chih Li,National Cheng Kung University,Taiwan
Wei-Te Ho ,Southern Taiwan University,Taiwan
Arpita Patra,National Cheng Kung University,Taiwan

This study examines the relationship among financing decisions, investment decisions, cash dividends and earnings for the aggregate stock market in Taiwan and China. Using the multivariate vector autoregressive model and the likelihood ratio test, this study has found similarities and differences between Taiwan and China. Current dividends are significantly related to past financing decisions and higher investments and earnings cause less financing in Taiwan but not in China. However, higher financing will cause higher investments and earnings in China but not in Taiwan. The different findings tell us that if firms in China can raise funds from financing, they will have higher investments and higher earnings and since most firms in Taiwan are more mature, they would like to reduce financing if they have higher earnings and raise funds from other sources, such as equity, as leverage limits a firm’s ability to pursue its investment policy. In addition, there are similar relationships from
dividends to earnings and from investments to earnings in Taiwan and China, implying that firms will adjust their investment decisions and dividend policies for expected earnings. So for a policy decision to be particularly effective, decision makers must recognize these relevant corporate decisions and make the right choices to achieve desired objectives.
Keywords: Financing Decisions, Investment Decision, Cash dividend and Earning.

15. Dividend Trop Ratios and Tax Theory: An Intraday Analysis under Different Tax and Price Quoting Regimes Ho TT
Vyas Balasubramaniam, UBS Sydney, Australia
William Bertin, Thomas Henker, and Laurie Prather, Bond University, Gold Coast, Queensland, Australia.

We calculate dividend drop ratios over different periods with changing quotation and
taxation frameworks to assess the validity of competing explanations. Using intraday prices adjusted for non-trading, we provide a more accurate representation of price changes due to ex-dividend day effects than those depicted in previous literature. Intraday estimates for dividend drop ratios are consistently higher than those calculated with beginning or end of day prices. Further findings indicate that stocks trading ex-dividend, on average, underperform the market over the following month. We attribute this phenomenon to dividend capture trading by tax advantaged and tax indifferent market participants.

16. Rough Sets Based Fuzzy Time-Series for Forecasting Stock Price Index
Hia Jong Teoh, Hsin-Hui Chu
Ling Tung University

In fuzzy time series, fuzzy logical relationships (FLR) and the number of linguistic
intervals are the critical factors that affect forecasting result. This paper proposed thoughtful rough sets based fuzzy time-series method, which considers non-linear relationships in past patterns and linear relationships between recent periods of stock prices. Evaluating an effective linguistic interval for the proposed method, using rough sets rule induction algorithm to establish fuzzy logical relationships groups (FLRG), and assigning weight to various fuzzy relationships based on rule-support. In verification, use Taiwan Stock Exchange Capitalization Weighted Stock Index (TAIEX) as empirical dataset, and employs two evaluating models to compare the proposed performance with Chen’s (1996) and Yu’s (2005) methods.


Taiwan Institute of Business Administration  @ 2008.All Rights Reserved


Journal Cover

ISSN: 1813-0534