ISSN: 1813-0534






Volume 3 No 3 December 2007

Deregulating ASEAN Aviation: Opportunities for value based carriers

Ian Douglas.  Department of Aviation, University of NSW, Australia


ASEAN has committed to deregulating aviation as part of the move towards economic integration. Significantly increased market access occurs in late 2008, and offers new commercial opportunities to the region’s airlines. This paper considers the response of European carriers to complete deregulation of the internal European aviation market and in particular their response to market disruptions. If the European pattern is followed in Asia the benefits of deregulation will flow predominantly to the value-based airlines..

Study on the Image of Airlines and Consumers’ Willingness to Fly- Comparing Two Airlines in Taiwan

Yuchi Sung, Shu-Te University,Taiwan
Justine Chang, Chaoyang University of Technology,Taiwan


The study aims to explore whether the image of airlines has effect on consumers’ willingness to fly. How to establish correct images in consumers’ mind and enhancing their willingness to fly are issues that marketing people need to think about in a hurry. Surveys of this study were conducted by randomly sampling in the departure hall of Kaohsiung International Airport and descriptive statistics, T-test, factor analysis and regression analysis are the statistical method applied. Result of the study shows that the image of airlines has a significant effect on consumers’ willingness to fly. As for the questions regarding the image of airlines, EVA Air is considered to have a better image.

Doing business in India: Experiences of an expatriate entrepreneur: K Schubert Fiber World Pvt.Ltd. 

Sanghamitra Bhattacharyya, Department of Management Studies, Indian Institute of Technology, Madras

Elena Groznaya, Diversity Works GmbH, Germany


In recent years, a large number of multinational companies in both manufacturing and services industries have been setting up business in India. However, the Indian business culture is in several ways different not only from western cultures, but also from neighbouring oriental and middle-eastern cultures. It has been accepted that establishing and running a successful business in a foreign country is a lot more difficult than in the parent country (Townsend & Cairns, 2003). The paucity of academic literature pertaining to cultural issues and challenges faced by expatriate managers running businesses in India provided the authors with the impetus to take up an in-depth case study of a manufacturing unit run by an expatriate entrepreneur, to try and identify the main issues and challenges facing such enterprises. Despite limitations in terms of scope, the authors are hopeful that the findings gleaned from their interview discussion with the owner / manager Klaus about his experiences in India would serve to provide some basic understanding about the business context in India and enhance the understanding of culture-specific behaviour patterns within business communities for a prospective newcomer to the Indian market. The authors have attempted to compare these findings in light of theoretical concepts propounded by scholars in this area, as well as with empirical findings presented in existing literature in this field, in order to understand better the implications of these findings. 




Al-Salman, M.H.,Al-Salman, A.E.,Dashti, E.
College Of Business Administration
Kuwait University,Kuwait


Deterministic and econometric frontier methods have been widely used to measure efficiency in production. These methods typically involve constructing a deterministic frontier and measuring efficiency in terms of distances in input/output space from the frontier. The econometric frontier methods usually involve random or fixed coefficient estimation of distances or deviations from cost or production frontiers.

The usual estimation of total factor productivity (TFP) change is biased if the data are drawn from observation that do not reflect long-run competitive equilibrium.  The paper illustrates how a parametric, non-stochastic cost frontier model can provide estimates of TFP changes that adjust for the non-equilibrium nature of most observed production data.  Comparing our estimate of TFP change with the usual method for twenty two manufacturing sectors suggests that the usual estimates of TFP change tend to reflect short-run fluctuations in business conditions more than actual changes in manufacturing productivity.

We have found that our estimates of change in TFP in twenty two manufacturing sectors in Kuwait from 1976 to 1997 showed variations and are higher in some industries and lower in others.  But in general our findings show that the Kuwaiti manufacturing sectors except petrochemicals and refineries are characterized by low productivity.



An Empirical Study Comparing the CAPM and the Fama-French 3-Factor Model

Hueng-Ming Huang, National Central University, Taiwan
Yu Cai, Michigan Technological University, U.S.A.
Howard Qi, Michigan Technological University, U.S.A.


Both the Fama-French 3-Factor Model and the CAPM are all regression-type of models, depending on historical data. Which model is better is a still an open question. This study provides an extensive and rigorous empirical study based on several statistical tests. We tested data from twelve industries. Our results show that, contrary to many in existing literature, on an aggregate level, the two models behave fairly similarly, and the CAPM tends to outperform the Fama-French 3-Factor Model for more sectors, however, the difference in some cases is not significant. In hindsight, these two models have similar predictive power and surprisingly the CAPM appears to be slightly better.


A survey onto the empirical compositions of Arbitrage Pricing Theory  

Dr Mazharul H. Kazi
School of Economics and Finance
University of Western Sydney, Australia


Often there arose confusion in the literature of asset pricing about the relationship between the theoretical and the empirical versions of APT because of the difficulties in designing a testable APT model with the unknown number of common factors, k that explains the pricing process as per theory. This paper has reviewed empirical APT to ascertain whether the theoretical underpinnings of APT and its empirical forms are the same. It is however observed that although an empirical APT differs from theoretical APT in many ways still the theoretical APT implies its empirical version.


Expert Recommendations in the “Dartboard” Column 

William Bertin and Laurie Prather, Bond University, Gold Coast, Australia


For many years the Wall Street Journal’s "Your Money Matters" column has conducted monthly stock selection contests where random "dartboard portfolios" have been pitted against professional stock analysts' portfolios.  In the professional portfolios, four stocks are selected by four experts, while the dart portfolios consists of four stocks randomly selected by Wall Street Journal staff members throwing darts onto a dartboard containing all stock listings from the NYSE, AMEX, and NASDAQ.  In both portfolios each stock is given an equal weight of 25 percent.  The returns for each stock are computed over a six-month holding period, and the portfolio returns are simply a weighted average of the individual security returns.

 This paper analyzes completed contests over a six year period during which the experts have won 60 percent of the time (39 out of 65 contests).  Furthermore, the returns for the expert portfolios have outpaced those of the Dow Jones Industrial Average (DJIA) on 36 of the 65 occasions.  Although interesting, these Wall Street Journal contests fail to include information that may directly impact and alter contest results. This study re-examines and presents the results of past contests, making adjustments for risk.  In addition to providing performance statistics for the entire six-year period, we also consider the value of the experts' recommendations based on their ability to repeat winning performances.


A behavioural approach to the traditional finance paradigm: Behavioural finance and its underlying theories

Takemi Fujikawa
University of Western Sydney, Australia


Behavioural finance is a relatively new field of finance that studies behaviour of financial practitioners and the subsequent effect on financial markets. Behavioural finance provides a key to solve a question on the existence of inefficient financial market and irrational investors on the market. This paper provides an introduction to behavioural finance, focusing on some underlying theories which behavioural finance is based on.

Ethical Behavior and Corporate Financial Performance

Dan W. Hess, Seattle Pacific University, USA


 The unethical behavior of corporations has garnered headlines in recent years.  This behavior has resulted in significant negative economic consequences for various stakeholders.  The purpose of this paper is to explore the link between corporate ethical behavior and various measures of financial performance.  In a rational world unethical behavior prior to being exposed might enhance financial performance.  However, once exposed, declining financial performance would be expected.  Using a sample of most and least admired companies identified by Fortune Magazine, the results show that declining financial performance occurs in the three years subsequent to the exposure of unethical behavior.  However, contrary to the hypothesis, in the three years prior to the exposure no financial benefits were obtained as a result of the unethical behavior.


Global Strategic Management :Culture Training

Martin D. Carrigan, JD,Associate Professor of Law and Business
University of Findlay,U.S.A.


Crucial for all Human Resources, cross-cultural training provides an opportunity for a company to use cultural competence as a core competency. 

In the past a different profile existed in the workplace in regards to both demographics and attitudes.  The makeup of the workforce was more homogeneous, with a large dominant majority and just a few minorities.  The minority workforce was either assimilated into the workplace or ignored.

Today a multitude of changes are taking place.  The working population is aging and becoming generationally diverse.  More women are working, ethnic diversity is growing, and more people with disabilities are able to become employed.  The number of U.S. high school and college graduates are dropping, while there is an increasing amount of well-educated workers migrating to the United States.  During the last decade, the Asian, African-American and Hispanic populations have been increasing while the Caucasian population has been declining.  This trend is expected to continue. 

With this noted change in workplace demographics it is necessary to train both managerial and non-managerial employees in the art of diversity management and acceptance.   By managing diversity, we can provide better services to our clients and customers and to departments within the company.  Diversifying perspectives will enhance our problem-solving skills and allow us to make better and more inclusive decisions.  Managing diversity is no longer an option. It has become a necessity in order to compete in tomorrow’s global economy.


Pankaj Kumar, Indian Institute of Management, Lucknow, India
Pushpendra Priyadarshi, Management Development Institute, India


The present study is an attempt to understand the nature and pattern of organizational culture among Non – Governmental Organizations (NGOs) working in the area of health in the multicultural context of India. The study focuses on NGOs, because of their strategic importance in the social and developmental sector and the rich diversity they provide in terms of sectoral differences and cultural settings in which they operate. The role of NGOs has been given utmost importance by the government as well as developmental agencies by seeing their value addition through committed performance and reach at the grass root level in rural India. It was thought to find out the values practiced by the members of these organizations as well as the differences across the states. It was aimed to find out the impact of organizational culture on organizational commitment and organizational morale as determinants of organizational effectiveness in the same organizations. This study brings in a new dimension of understanding NGOs’ dynamics so that it may fit in well with the larger community at one hand and the government as well as the donor agency on the other hand. This would also definitely provide a direction in understanding the local regional/ sectoral culture’s influence on the operations of NGOs.


The Importance of Leadership Communication Amongst Staff in The Technical Organizations

Dr. Raja Roslan Raja Abd. Rahman,Prof. Dr. Abu Bakar Mohd Yusof
Associate Prof. Dr. Abu Bakar Mohd. Diah
Institute on Technology Management and Entrepreneurship,Universiti Teknikal Malaysia Melaka


 Many of the problems that occur in the technical organizations are the direct result of people failing to communicate. Faulty communication causes the most problems and it leads to confusion and can cause a good plan to fail. Leadership in technical organizations is the most important part of management to stirring people so that they are moved from within. It is setting the personal example, putting enthusiasm into the operation, and communicating with workers both ways, listening as well as talking. Leadership is a rewarding merit and penalizing demerit, honestly and fairly. It is the right combination of these [qualities] that will lead people to do the work that makes a business successful because they want to [Goble, 1972]. In terms of leadership communication styles in technical organizations, most middle management such as managers, assistant managers and those at executives level are practicing good leadership communication. In order to make sure the management achieve the objectives, good leadership communication amongst the top level, middle level and lower level staff practice are important in the technical organizations. This is because leadership communication is the most important tool and is at the heart of all organizational operations. Obviously, leadership communication can be the basis for understanding, cooperation, teamwork and positive action, without it such goals would be undermined amongst the staff in the technical organizations.


A Study on the Operations Efficiency Influence of Multinational Industrial Technology Transfer

 Hsien-Kuang Fang
Department of Banking and Finance, Chinese Culture University,Taiwan


 Technology is a weapon among the multinational enterprises’ foreign investments. Therefore, it is important to obtain the necessary technology through technology transfer to be able to have the ability to develop its own. Moreover, though the concept of quality control influences operations efficiency and marks on the enterprise core, every enterprise’s looks at the importance of quality control improvement and degree differently. Hence, this study is structured to take the characteristics of technology supplier and technology receiver as independent variable, the concept of quality control as intervening variable and operations efficiency as independent variable for the research hypothesis. This research uses 68 American and Japanese electronics industry subsidiaries ( 200 questionnaires, where the effective sample returns-ratio is 34% ) to proceed with the research.

In the results aspect, as the degree of technology transfer becomes higher, the higher customer-related operations efficiency there is. In correlations, the higher the importance placed on quality control of both parties, the more strengthened the technology transfer’s direct influence. Therefore this paper suggests that the receiving parties of technology transfer must place importance on the goal technology’s related information, enterprises’ interior resource integration and management abilities, communication channel’s convenience, and following technical development. Simultaneously place importance on the quality control concept, and thus become advantageous to international technology transfer and increases operations efficiency.

The case analysis of constructive dismissal awards in Malaysian industrial relations

Balakrishnan A/L Muniapan

Curtin University of Technology



 This paper will present an understanding of some of the basic principles and cases related to constructive dismissal in the context of Malaysian industrial relations. Besides wrongful dismissal and unfair dismissal, constructive dismissal is a doctrine which provides employment protection for workman who dismisses himself/herself due to the employer’s conduct. Over the last two decades in the Malaysian Industrial Court, there has been increasing awards on constructive dismissal. From the year 2000 to 2005, the Industrial Court made 177 awards on constructive dismissal. In Malaysia, the concept of constructive dismissal falls within the purview of Section 20 of the Industrial Relations Act 1967. Constructive dismissal is a “deemed dismissal” if an employer is guilty of a breach of the employment contract which goes to the root of the contract. It arises when a workman terminates his/her contract of employment and therefore considers himself/herself discharged from further obligations because the conduct of the employer. Constructive dismissals claims are creating a new challenge in employment relationship not only in Malaysia but also in other parts of the world. This paper is based on the case analysis of some the constructive dismissal awards in Malaysia and a review of existing literatures in the field. With a good understanding of the awards on constructive dismissals, it is expected that the employers will manage and treat their employees as their greatest assets and prevent claims of constructive dismissals from taking place.


Accounting Information Overload 

Dr. David Boyd, CPA, CMA, CFM, CFE, CrFA, Gulf University of Science and Technology, Kuwait
Dr. Sanithia Boyd, CPA, CMA, CFE, CrFA, Gulf University of Science and Technology, Kuwait
Dr. Priscilla Berry, Jacksonville University, Jacksonville, FL


A review of the accounting curriculum requirements for introductory and intermediate accounting college courses over the past three decades demonstrates the exponential expansion of the material now required in the traditional accounting classroom. To first determine and document the volume of this curriculum increase over the test period, two current examples of major accounting textbooks and their previous editions were used for this assessment:  Accounting Principles by Carl W. Warren; James M. Reeve, and Phillip E. Foss, and Intermediate Accounting by Donald E. Kieso and Jerry J. Weygandt.  Literature relating to accounting overload in the accounting core curriculum is reviewed.  The role of the accounting professor in the restructuring of the accounting curriculum is examined.  This study focuses on the reasons for curriculum reform and the steps necessary for restructuring.  The suggested reform measures include, but are not limited to, the reduction in the textbook material, the revising of the current classroom instruction format, and the separation of the material for the current courses into multiple course sections. 

In recent years, the volume of accounting information presented in standard accounting textbooks is problematic for the accounting curriculum, in part, as a result of the introduction of computerized technologies.  The technological capabilities responsible for information generation, processing, and distribution have developed at an astonishing speed, and the end is always changing in receiving, understanding, managing, and applying the information. Compounding the problem is the ever-expanding regulations and standards issued by the Financial Accounting Standards Board (FASB), generally accepted auditing standards (GAAS), Internal Revenue Service (IRS), the Securities and Exchange Commission (SEC), and other regulatory and rule setting authorities. 

 Over the past three decades, the information presented in the more popular collegiate accounting textbooks has dramatically increased.  For many accounting classes, the textbook information has expanded to the point that many of the topics presented in the book cannot be covered in a standard 15-week semester.  If the professors attempt to cover all chapters, the material cannot be covered in desirable depth for a reasonable understanding of the concept.  In search of a solution to the problem, many accounting departments and schools of accounting have resorted to increasing their accounting curriculum.  This raises a concern on the part of accounting educators who see this course of action as not addressing the real issue.  The 150-hour requirement, adopted by the AICPA, and  the volume of information now required has grown at a faster pace than have the classroom hours available to teach the material.  The accounting classroom today is challenged by information overload.  The need to make significant decisions and revisions is imperative.

Hawes (1994) notes that information overload occurs when “individuals are confronted with so much information that they cannot or will not attend to all of it; the cognitive effort required by the information environment simply exceeds the person’s cognitive capacity and willingness to process it”.  FIGURE I graphically depicts the information overload concept.  As demands on the students’ time rise, due to increased learning requirements, the slope of the learning curve begins to decrease.  Other factors outside the classroom will, of course, affect the students’ ability to absorb the information presented.  Considering the intervening factors, the necessary volume of information, and the external intervening factors, accountants & professors should not exacerbate the problem by continuing to present superfluous information just because it is printed in the textbook.   

Using the definition of information overload and using the format of a standard 15- week semester, accounting information overload is examined.  The result of this review demonstrates that the volume of information involved in daily lessons and assignments overwhelms the student (and the professor).  Thus, the student loses sight of any understanding of the topics covered in the race to memorize.  The student is confused and frustrated and may postpone or give up on the assigned task or make random and often poor choices simply in order to “complete” the assignment.

The Usefulness of Annual Reports: Investors’ Perception

Dr. Ibrahim ELsiddig Ahmed, Ajman University of Science & Technology, UAE.


The study aims to investigate the investors’ perception about the usefulness of annual reports prepared by listed companies in Dubai Financial Market (DFM). Hence, it concentrates on investment decisions (buying, holding or selling shares) by collecting the response of 140 investors in DFM. The results of the questionnaire based study indicate that the main source of information used by investors is family and friends (43%), media and Newspapers (23%), and only 17% depend from financial reports. Majority of the investors were satisfied by the timing and contents of financial reports but only 40% read the financial statements at the timing of decision, 20% six month before decision, and only long term investors read the financial statements one year before decision.

Sex, age, and educational level have no significant effect on the use or the source of financial information. It is also found that long term investors are highly familiar by the contents and use of financial reports. Regarding the priority of financial statements, income statement had been given the priority for investment decision (53%), whereas, cash flow statement comes at the end (7%).

Identifying the Factors Influencing Overhead Allocation and Assignment Procedures: An Extension

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


This paper uses multiple regression analysis to examine the influence of the level of competition, product customisation, the percentage of manufacturing overhead costs to total manufacturing costs, the importance of product costs in selling price decisions, and operating unit size on overhead procedures, measured by the number of cost pools and the number of cost drivers. The results reveal that the manufacturing overhead cost percentage and operating unit size have a positive and significant influence on the number of cost pools, but that none of the independent constructs influence the number of cost drivers. The model was re-specified as a path analytic model, in which the number of cost pools was found to be the only direct and positive effect on the number of cost drivers. In addition, there were weak, indirect effects on the number of cost drivers for the manufacturing overhead percentage and operating unit size through the number of cost pools. From the model, the number of cost drivers increases as the number of cost pools increases. The number of cost pools increases as the operating unit size increases and as the manufacturing overhead percentage increases.


The Study of Process Improvement Strategy toward the Account Receivable Activities by Six Sigma Management

Kao-Shan Chen, Vanung University, Taiwan


The application of the Six Sigma management approach has become widespread in Taiwan manufacturing industries in recent years. However, the majority of the Six Sigma application in local is focusing on the improvement of the manufacturing spot instead of the supportive activities fields. Thus, the purpose of this paper is to demonstrate the effective improvement for the supportive activity, the account receivable process, by adopting Six Sigma DMAIC (Define-Measure-Analyze-Improve-Control) approach in an industry gases company. First, in the definition phase, the process map of the account receivable activity is reviewed and then the project objective and defect-judgement standard are defined. Secondly, the measurement of current-state process capability is conducted. Thirdly, the cause-effect diagram is investigated to reveal the major causes contributing to process deficiency.  Furthermore, the brainstorming is conducted to decide the appropriate improvement strategy.  Finally, the account receivable process is effectively improved by eliminating non value-added part in the activity. The results prove that the application of Six Sigma approach performs an effective progress in the improvement of supportive activities as well as the improvement of manufacturing spots.



 Arawati Agus ,Mhd Suhaimi Ahmad,Jaafar Muhamad
School of Business Management, Faculty of Economics and Business, UKM, Malaysia


 A study on the prevalence and significance of TQM practices on product quality performance in the electronics and electrical industry in Malaysia. TQM is said to have the potential to not only increase competitiveness and organizational effectiveness but also improve performance. Since there is no formal study conducted in Malaysia on this issue, therefore the impact of TQM on product quality performance in the electronics and electrical industry in Malaysia has not been fully addressed in empirical studies. An attempt is made to investigate relationships between TQM and product quality performance in the electronics and electrical industry in Malaysia using correlations, cluster analyses and a structural equation modeling (SEM). The results reveal that top management commitment, supplier relations and training in particular appear to be of primary importance and exhibit direct impact on product quality performance. Structural analysis of the data indicated considerable support for the conceptual model presented. Findings of the study provide a striking demonstration of the importance of total quality management for the electronics and electrical industry in enhancing its product quality performance.




Mohamad Ali Roshidi bin Ahmad
Faculty of Business and Economics, Universiti Pendidikan Sultan Idris
Mohd Asri bin Mohd Noor
Faculty of Business and Economics, Universiti Pendidikan Sultan Idris


The subject of voluntary compliance has been extensively studied since about 1960. It has been analyzed and evaluated by academicians, professionals, and governments, particularly in the United State and other western countries. The revert from the Official Assessment System (OAS) to the Self-Assessment System (SAS) in Malaysian tax system beginning year 2000 for the business sector and year 2004 for individual taxpayers, force taxpayer to better comprehend the tax system and its laws. This study serves to evaluate the depth of the understanding achieved by individuals regardless of the means, be it formally or through informal ways and how it affects their tax compliance behaviours. The objectives of this study is to investigate the effect of the presence of tax knowledge and understanding on the tax compliance behaviours. Income tax non-compliance in Malaysia can take in four forms, such as; failure to submit a tax return when legally obliged to do so, understatement of income on the tax return, overstatement of deductions on the tax return, and fail to pay assessed taxes by the due date. Failure to submit a tax return when legally obliged to do so, is a feature of tax evasion, which is considered quite serious in Malaysia. In 2001, around 955,309 or 33.5% of the tax return, which distributed to eligible taxpayers were never return. This is clearly reflects the low level of tax compliance in Malaysia. By introducing SAS, the Inland Revenue Board (IRB) (tax authority of Malaysia) has started a series of appropriate steps towards ensuring a high level of compliance among taxpayers. Among the steps taken, include educating taxpayers in the aspect of tax management, and introducing tax audit. Taxpayers will embrace the newly introduced system like SAS if adequate knowledge is disseminated to them, pertinent to their comprehending the said system. Conversely, the education program conducted by IRB or by other institutions is relevant in increasing the ability of taxpayers to understand SAS thus, enabling them to have clear conscience in carrying out their responsibilities as taxpayers.



Building an Effective Strategy for Managing Intellectual Property in Small and Medium Enterprises 

Chih-Young Hung a, Yen-Ni Chang a, Jia-Ren Yang a, Ming-Teng Li b, Chen-Ping Hsu aa Institute of Management of Technology, National Chiao Tung University, Hsinchu, Taiwan
bEMPA,  National Taiwan University, Taipei, Taiwan


In the knowledge-based economy times, intellectual property has become the enterprise’s key asset, and the enterprise lays particular stress on its growth. The article guides the IP management mode general enterprise regards via observation and analysis, IP value derives from high quality IP management rather than IP as such. Large-sized enterprises have sufficient manpower and funds for perfect IP management while small and medium enterprises can hardly have a solid presence in the IP offense & defense battlefield as restricted by manpower and funds. TOPI model is proposed herein, comprising such four aspects as technology, operation, practice and industry (hereinafter referred to as TOPI model), which shall enable the small and medium enterprises to be assisted in business application of IP management and layout with a set of effective and feasible IP strategy.



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Journal Cover

ISSN: 1813-0534