ISSN: 1813-0534






Volume 11 No 2 August edition 2015

                                               ABSTRACT OF APRIL EDITION 2015

                                                 Volume 11*Number 2* August 2015

                                                             ISSN 1813-0534


1. Financial Characteristics of Most Trustworthy US Companies: An Empirical Analysis

Vonda Cotton and Dr. Srinivasan Ragothaman

University of South Dakota, Vermillion, SD, USA


Recent financial scandals that afflicted US companies have put the investor focus squarely on the “Most Trustworthy (MT)” companies. Are there companies out there that are honest, reliable,and most trusted? The list of 100 MT companies examined in this study is based on a 2012 Forbes report. We use 2012 S&P 100 firms as the control sample since they are highly successful, are audited by the Big 4, and well-regarded by the market. Univariate tests results indicate that MT firms are smaller, have larger total asset turnover ratio and smaller retained earnings to stockholders’ equity ratio when compared to control firms. MT companies have higher beta and better corporate governance as measured by auditor opinions. Our multivariate logistic regression (logit) model results suggest that total asset turnover ratio, firm size, and Tobin’s Q are statistically significant in discriminating MT firms from control firms.


2.Maqasid Al Shariah Analysis of Budget Deficit Policy

In Indonesian Economy

Dr. Tika Widiastuti ,Ahmad Hudaifah,Noven Suprayogi

Department of Syariah Economics, Airlangga University



Budgeting for a state or a country seems to be the most important part to handle administration and government policy in term of socio economic reason. In practice, a lot of government tends to subscribe a balance budget whereby it is striving to balance between revenues and expenditures accurately. Unfortunately, this balancing post uses a debt and foreign aid charged by interest to cover any shortage in revenues. In the real context, the budget deficit management based on debt is still controversial and considered inappropriate with developing country conditions which their economies

are unstable and fluctuated. Unfortunately, many countries in the world including Muslim-populated countries subscribe budget deficit system whereby the sources of its fund are backed up by debt. The focus of this paper is to analyze two main sensitive issues of the Indonesian economy in the light of Maqasid Al Shariah. This study employs a method of literature review and combined with data analysis. Actually, Islam has a very rich literature legacy in administrating public sector economy and it becomes important theory and framework as a stance or point of view to analyze the prevailing system. The high interest rate payment is the main issue of public sector expenditure. Indonesian government seems no choices to resolve its public sector economy and relies too much on debt management. For social welfare expenditure there has been a misallocation in emphasizing budget expenditure whereby oil and petroleum subsidy consume almost majority of the total welfare

expenditure in Indonesian public sector economy.

Keywords Government Budgeting, Budget Deficit, Maqasid Al Shariah  


3. What Determines Airline Profitability: Industry Conditions or Firm Level Capabilities?

Dr. Achinto Roy, Deakin Business School, Deakin University, Australia


Loss making airlines typically blame industry conditions and cite reasons beyond their control for their losses. None of these airlines ever acknowledge that they might have failed to develop or leverage existing firm level capabilities in order to deal with difficult industry conditions. It is an established view in strategy literature that difficult industry conditions can be overcome by developing appropriate firm level capabilities. Therefore, the role of firm level capabilities in determining profitability cannot be ignored. This paper proposes that very difficult industry conditions in the

airline industry can be overcome by leveraging one’s resources and capabilities as is the case with other industries (Peng, 2001; Lahiri et. al., 2012). The performance of Malaysia Airlines and Air Asia is analysed and contrasted in support of this argument.

Key Words: Airline Industry, firm level capabilities, industry conditions, Malaysia Airlines, Air Asia,Airline profitability      


4. Intent And Capturing Intent in Marketing Strategy

Nagasimha Balakrishna Kanagal

Indian Institute of Management Bangalore



Organizations use intent, both strategic and tactical to guide strategy and to execute strategy. Organizations frequently signal intent to the market and competitors as a part of their overall vision for the future. Intent in business is a point of view and / or a purpose about a firm’s future and its future position and /or the course of action the firm wants to take in evolving its future and its future position, to create and exploit current and future opportunities. From an individual perspective, intent is a strong purpose or aim, accompanied by a determination to achieve a desired outcome or

result. Evidently, the intender has to arrive at a path to achieve the desired result. The study examines the nature of intent in the overall context of management decision making and development of marketing strategy for an organization. The study also attempts to outline aspects of laying out intents for an organization as well as capturing the intents of major competitors in the process of strategic

decision making and formulating business marketing strategy. An empirical desk research study on India’s leading passenger car firm Maruti Suzuki has been carried out with specific focus on intents and capture of competitors’ intents. The study concludes with discussion of intent for management decision making and drawing implications for marketing strategists


5. A Comparison of Intelligent Techniques Accuracy for Financial Failure Prediction

Hia Jong Teoh, Department of Information management, Ling Tung University, Taiwan

Hsing-Hui Chu (Corresponding author),Department of Public Finance, Ling Tung University, Taiwan


Numerous researchers have used different intelligent techniques to predict financial failure, including Neural Networks, Support Vector Machines, and Rough Set Theory. All of them often fit data well, but the former two methods are not as comprehensible and transparent as the later one, in which they are often considered the black box techniques. The purpose of this paper is to compare the accuracy of Neural Networks, Support Vector Machine and Rough Set Theory by applying them to five financial failure datasets. The prediction accuracy results show that Rough Set Theory was relatively more accurate compared to Neural Networks and Support Vector Machines, with the average correct classification 84.5%, 84.1% and 70.9% respectively.

Keywords: Financial failure prediction, Neural Networks, Support Vector Machine, Rough Set Theory


6. The Influence of Client Fraud Risk And Client Cooperativeness on Professional Skepticism of Chinese Entry-level Auditors

Sammy Xiaoyan Ying, Macquarie University, Australia

Chris Patel, Macquarie University, Australia


Professional skepticism remains one of the most important and controversial topics in auditing. This study examines the influence of client fraud risk and client cooperativeness on professional skepticism among Chinese entry-level auditors in the context of evaluating audit evidence. Given that the essence of auditors’ professional skepticism rests on distrust of clients, this study draws on trust-related theories from psychological and cultural perspectives. Specifically, invoking trust theories in psychology research, this study hypothesizes that professional skepticism is likely to be positively influenced by client fraud risk. The results support the hypothesis and show that lower (higher) levels of client fraud risk lead to lower (higher) levels of professional skepticism. Furthermore, drawing on cooperation and guanxi dynamics associated with construction of trust in the Chinese culture, this study hypothesizes that professional skepticism is likely to be negatively influenced by client cooperativeness. The results support the hypothesis and show that higher (lower) levels of client cooperativeness lead to lower (higher) levels of professional skepticism. The findings may assist audit firms and auditing educators in improving training and education programs and enhancing entry-level auditors’ abilities to maintain professional skepticism. Practitioners and regulators may also benefit from increasing awareness of psychological and cultural factors in influencing professional skepticism.


7. Informality And Credit Constraints in MSEs: An Empirical Examination of Low Income Countries

Nirosha Hewa Wellalage , Stuart Locke

The University of Waikato


New Zealand


This study focuses on micro and small enterprises (MSEs) in five low income countries located in Sub-Saharan Africa and investigates the various firm attributes that determine access to credit, in particular the role of firm informality. The topic has become a central focus of MSE rejuvenation efforts around the world, and most economies are encouraging their MSEs to be formal to enhance their credit accessibility. This study uses World Bank Informal and formal Enterprise Surveys to collect data. Informality may be endogenous to credit constraints in several ways, which creates econometric problems when empirically modelling access to credit. Using an instrumental variable approach, the results show that the higher the probability of a firm operating in the formal sector, the greater its access to external credit. The importance of formalisation polices to reduce the informality of the MSE sector is discussed in the context of the research findings.


8. Evaluating Bank Performance: Institutional Pressures And Strategic Responses

Rahat Munir3, Kevin Baird ,Sujatha Perera

Macquarie University



Drawing on DiMaggio and Powell’s (1983) and Oliver’s (1991) the study examines the changes in the performance measurement system (PMS) of an emerging economy bank. The data for the study was collected through conducting interviews of senior executives and managers working at different management and operational levels in corporate office field offices.The findings indicate that changes in the bank’s PMS were a direct consequence of the changes in the bank’s institutional field. Coercive pressures, including regulatory changes and directives from the bank’s new President and Board, influenced the PMS through the requirement to adopt specific performance measures. Mimetic pressure was exerted through the eagerness of the bank to adopt best practices resulting in the introduction of contemporary banking products and technologies. Normative pressures were generated after the implementation of a staff training program, and through the professionalism of new top management. The bank responded to the pressures in two ways. In the initial period of the reforms most of the impetus to change originated as formal directives from the regulators, and the bank passively complied with the coercive pressures to gain legitimacy. As the performance of the banking sector improved and reforms proceeded, the bank increasingly applied strategic choice to the pressures to improve performance. While most previous studies have examined PMS change in the manufacturing sector, this study provides evidence on how PMSs are influenced by changes in their institutional fields and the way in which banks respond to such pressures.

Keywords: performance measurement system; change; institutional pressures; strategic responses;banking


9. Regulatory Implications of Corporate Governance Using Ownership Structure

Dr. Ranajee

E-008, Department of Finance, IBS Hyderabad, a Constituent of IFHE, Deemed to be University

Dontanapally, Shankerpally Road, Hyderabad-501203, India.

Dr. Sudeepta Pradhan

E- 106, Dept. of Marketing & Strategy, IBS Hyderabad, a Constituent of IFHE, Deemed to be

University Dontanapally, Shankerpally Road, Hyderabad-501203, India.


The rules related to minimum public share holding exist from 2001 but there is no significant change in the ownership structure of promoters in last 11 years in India. A good policy should be determined by the benefits it provides after implementation and not at the time of announcement itself. The objective of the paper is to establish a link between ownership structure and quarterly changes in ownership structure, to the relative informational efficiency of transaction prices, an important dimension of market quality and how it affects the informational efficiency of stock prices of the listed companies, in India. The results suggest that stocks with greater institutional ownership are priced more efficiently as their transaction prices closely follow a random walk. Institutional investors enhance the informational efficiency of their stocks by increased analyst coverage, and institutional trading activity. Efficiency improves following exogenous shocks in institutional ownership. The study reports that high promoter holding augur information asymmetry and creates moral hazard and adverse selection for the outside investors. There should be a mechanism to attract the interest of institutional investors especially FIIs in the Indian companies so that they not only purchase the share divested but also help in efficient price discovery


10. Entrepreneurship in SMEs: The Effects of Social Capital And Environmental Dynamism

Kai-Ping Huang

Department of Business Administration, Fu Jen Catholic University, Taiwan

Karen Yuan Wang

Management Discipline Group, University of Technology, Sydney, Australia


The study explores entrepreneurial orientation (EO) and entrepreneurship research in the context of China. Prior researches have focused on large enterprises and have generally ignored small and medium sized enterprises (SMEs), which will be the focus of this research. According to resource-based view (RBV), resource acquisition is more complex for SMEs than larger enterprises. Organizational resources contribute towards strategy making processes. In the context of resource acquisition, social networks serves as ideal platform for SMEs as they enable the firms to deal with obstacles and grow new efficiencies. Environmental dynamism involves uncertain conditions of the environment. The study will explore the impacts of environmental dynamism on the EO of SMEs with regard to resource acquisition. Based on Taiwanese SMEs functioning in China, the study illustrates the contributions of social capital, environmental dynamism and resource acquisition on the assessment of EO impact on firm’s performance in emerging economies.

Keywords: Entrepreneurial Orientation, social capital, environmental dynamism, performance


11. Management Types of Housing and Related Ethical Debates in TaiwanPerspectives of Manager’s Philosophy and People’s Recovery

Chia-Ti Hsieh, PhD Candidate, Department of Business, Chung Yuan Christian University, Taiwan

Mei-Lin Lo , Graduate Student, Graduate Institute of Social Work, National Chenchi University,Taiwan

Ghi-Feng Yen, Professor (Corresponding Author), Department of Business, Chung Yuan Christian University, Taiwan


Promoting the recovery of people with psychiatric disabilities and embedding them into the community living are the primary means as well as goal of personal recovery. The objectives of this research are to study the relationship between housing management types and recovery of people with psychiatric disabilities, and the related ethical issues. This study explores (1) various existing housingnmanagement models on recovery of people with psychiatric disabilities; (2) various types of housing and their current prevalence in Taiwan; and further debates on (3) ethical issues on real-life practice. Besides reviewing literatures of “the classification of housing” and “the essential client services in a caring system” to deepen the theoretical background, a three-phase/open-end questionnaire was administered to and in-depth interviews were conducted with experienced experts, former government officials, and housing operators (proprietor) over five months. We determined that four housing management types, identified by and compared with three theoretical housing models, including: (a) the protected care type (Type 1) combines elements of the custodial housing and the supervised group housing models, which emphasizes custodial care but accompanied by medical care; (b) the medical rehabilitation type (Type 2) that is similar to supervised group housing model but with more surveillance in nature; (c) the agency integration type (Type 3), which combines nighttime placement and daytime mental health services provided by the same operators, that barely meets governmental accreditation requirements but is actually in a superficial way; and (d) the community integration type (Type 4) that integrates partial functions of both supervised group housing and supported housing models. The raison d'être of each management type (medical approach vs. recovery approach) reflects manager’s philosophy and their basic assumptions to the residents (patient vs. normal person). And some of the management types in practice violate the recovery goal in many aspects that raise ethical debates. Finally, implications and suggestions are provided for both practice and future research purposes.

Keywords: Housing Management Type, Recovery, People with Psychiatric Disabilities, Manager’s Philosophy, Ethical Debate


12. Compromising The Organization’s Identity: Pressured Organizational Submission to Externally Dictated Change

Ashfaq Ahmad Khan

Senior Lecturer in Accounting, UNE Business School, University of New England, Armidale



Following the Bradley Review (Australian Government, 2008), Australian tertiary education sector’s constituents underwent significant strategic reforms, including the Australian government’s funding-specific policy changes for the sector. Analysing the situation confronting Australian tertiary education section from a theoretical perspective, using secondary sources of information, the author argues that while ‘strategy facilitation’ by a ‘power source’ works to the advantage of subordinate organizations, ‘strategy imposition’ may work the opposite way. Externally dictated conditions for change that leave an organization with no option but to submit passively to the pressure and adapt its core organizational elements to ensure survival, may result in the organization’s ‘demise’ in its real essence, as the organization sacrifices its true identity in an attempt to placate the external demand for change. Notions of accountability dictate that such a change needs to be scrupulously checked and subjected to an independent enquiry before considered for implementation. Theory-supported propositions are put forth to help guide future research into the area.

Key words: Accountability; strategic management accounting; parent-dependent/public-good organizations; organizational change.


13. Business Activities Associated with Social Customer Relationship Management (Social-CRM)

Dr Carmine Sellitto,

College of Business,Victoria University,

Melbourne City ,Victoria



In the mid-1990s the advent of customer relationship management (CRM) enabled businesses to better understand and appreciate customer behaviour and purchasing habits. In recent times, the social media communication channel has altered many commonly held tenets as to the way firms might engage their clients. Hence, the use of social media to engage with customers has led to the term social-CRM being coined— with various frameworks and commentaries being proposed. This paper examines the extant literature to highlight the emerging business activities pertinent to practicing social-CRM. A diverse set of frameworks and viewpoints associated with the concept of social-CRM are examined which collectively infer that there has been a systematic shift from the way that firms have undertaken traditional CRM, to one where customer engagement and relationships are being shaped by social media avenues. The paper identifies several areas of business social-CRM activities associated with the way that a firm can manage customer collaboration, conversation, communication and cooperation. Significantly, the social-CRM milieu highlights the importance of the firm initiating and responding to customer conversations in a transparent manner across the various social media channels.


14. Influence of Organisational Commitment on Organisational Citizenship Behavior: A Study among Shift Workers in India

R K Jena, Institute of Management Technology, Nagpur, India


This study was conducted in five Ferro-alloy industries of Odisha, India. The objectives are to analyze the influence of Organisation Commitment (OC) on Organisation Citizenship Behaviors (OCB). This study considered three component model of OCB ( i.e Affective Commitment(AC), Continuance Commitment(CC), Normative Commitment(NC)) to find its influence on OCB. The analysis is carried using Structural Equation Modeling (SEM) methodology. There are 240 respondents (shift worker) from five Ferro-Alloy industries of Odisha, India are participated in this study. The findings shows that AC and NC have positively influenced OCB, where as there is no evidence showing of any relation between CC and OCB. Theoretical and practical implications of the study are also discussed towards the end.


15. The Impact of Organizational Communication on Employee Job Satisfaction

Pei Ling Chang,

Graduate Institute of International Business Administration, Chinese Culture University, Taiwan

Lecturer, Department of International Trade, Jinwen University of Science and Technology, Taiwan


Communication satisfaction may result in positive work attitude. However, whether this statement is true across different industries has not been supported by past studies. Therefore, this study discusses whether the impact of communication satisfaction on job satisfaction varies among different industries. In this study, a total of 500 questionnaires were distributed and 381 effective replies were collected; the effective return rate is 76.2%.As a result, this study finds that efficient communication is a critical factor in influencing employee job satisfaction. Meanwhile, this study goes across various industry sectors, including financial services, high-tech, and traditional industries, in an attempt to get a conclusion that the more information-demanding an industry is, the greater impact communication satisfaction has on job satisfaction.

Key Words: organizational communication, job satisfaction


16. Pay for Performance: Strategic HR Tool to Enhance Employee Work Performance

Maniam Kaliannan and MuthuLetchumi Lin

Nottingham University Business School, University of Nottingham Malaysia


The role of Human Resource Management (HRM) in an organization is an essential part in building a positive and competent workforce. Organizations are striving to bring out the best from their employees through various HR practices and one of the current evolutions of HR practice is the reward system. A good reward system is a key motivator to attract, retain and continuously motivates the employees at work. In the context of this research, the concept of Pay for Performance (PFP) was studied in the area of insurance industry in Malaysia. The PFP plans are widely used as a remuneration strategy to motivate the insurance agents in order to enhance their performance at work. Therefore given the above scenario, the main objective of this study was to examine the influence of PFP plans as a strategic tool in enhancing the performance of registered life insurance agents in Malaysia. A total of seven PFP plans have been identified based on relevant literature and models. The study deploys quantitative research method i.e. use of self-administrated questionnaire as a tool to collect data from the respective respondents. A total of 150 questionnaires were distributed to target sample and 100 questionnaires were received and used for the purpose of the analysis. Data was analyzed using the SPSS for both descriptive and inferential analysis. The findings of the research showed that overall PFP plans in the context of Malaysian insurance agents’ played a vital role in influencing and enhancing their work performance. Some of the key factors analyzed were commissions, cash incentives, bonuses, incentive travel, award, career planning & development and retirement plan. Based on the findings, discussions and recommendations were presented as part of strategic analysis in order to further improve the implementation of PFP as a pro-active tool in motivating and improving employees’ performance in general and in the perspective of insurance industry specifically.


17. From Conception to Creation-Quality Function Deployment in Health Sector

Dr. Jitendra Sharma

Professor (Operations), Institute of Management Technology (IMT), Nagpur (MS)



This paper introduces a methodology and procedure for the development of medical healthcare products and services. It provides an overview of Quality Function Deployment (QFD) as a tool to determine priorities for enhancing service provision to a more satisfied customer or client needs and requirements. The paper intends to present a detailed treatment of QFD for Syringe and Needle. A general model for product quality has been discussed, and the factors that influence customers’ perception have been addressed. The framework of the general model can be applied to construct the individual QFD Matrix for different product functions. This not only helps the design team in better utilisation of the organisational resources but also aids in the prioritising the design parameters on the basis of their contributed benefit to the customers.

Key Words:Customer requirements; customer satisfaction; syringe and needle; importance ratings; satisfaction ratings; healthcare sector; QFD.


18. Business Intelligence Technologies for Analyzing And Managing Health Information Data: A Study of Smoke Cessation Management

Chun-Liang Lai and Jing-De Weng

Yang-En University



The use of artificial neural networks techniques in classification has been increasing recently. Artificial neural networks has the ability to learn about experiential knowledge expressed through inter neuron connection, and can make such knowledge available for use. The purpose of this study is to investigate the influencing factors and predict the performance of smoking cessation by using a hybrid neural discriminant model. The proposed methodology was composed of a linear discriminant analysis and a back-propagation artificial neural networks model. First, linear discriminant analysis is used for feature reduction that select the set of significant variables from predictive variables. Next, these significant variables are used to model the back-propagation neural networks. The finding of this research could contribute to understanding factors that are associated with success of smoking cessation and assist physicians and healthcare providers to improve smoking cessation intervention. The proposed hybrid neural discriminant model can forecast more precisely than the model which is developed by the conventional linear discriminant analysis model and artificial neural networks model.


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ISSN: 1813-0534