ISSN: 1813-0534






Volume 5 No 1 April 2009

Closing The Performance Evaluation Gap in SMEs in Thailand: What Matters?

Sununta Siengthai School of Management, Asian Institute of Technology, Thailand K. Joanna Zaleska Cass Business School, City University, U.K. Saranya Kantabutr Faculty of Business Administration, Chiangmai University, Thailand


Over the last two decades, SMEs sector in Thailand has been regarded as catalysts and drivers for the country’s economic growth. Many government programs had been set up to support the SMEs operations. However, there are still various aspects that SMEs need improvement of which management capability is one. How firms manage their human resources and build up their competencies can be reflected in the perception of employees on how they have been evaluated on the job which results in their motivation to perform and hence organization effectiveness.Based on a survey of SMEs in Thailand conducted in 2005, this study investigatesfactors influencing the perception gap in performance appraisal between the managers andsubordinates in the SMEs. Various factors such as management styles, organizationalcitizenship behavior, equity perception, employee involvement, teamwork, and quality ofwork life are hypothesized to have relationship with the perception gap in performance appraisal. The regression analysis results reveal that only management styles, organizationalcitizenship behavior, quality of work life, and length of service are found to be significantlyrelated to performance evaluation gap. However, while three factors, namely managementstyles, quality of work life and length of service are found to be negatively related to theperformance evaluation gap, contrary to our expectation, organizational citizenship behavioris found to be positively related to the dependent variable, performance evaluation gap .


Globalization: How We View It

Patricia C. Borstorff, Jacksonville State University, United States of America W. Mark Hearn, Jacksonville State University, United States of America


Globalization has resulted in lower prices, more choices, and a blurring of the lines of national identity for many products. Its impact also includes loss of domestic jobs, tradedisputes, and challenges to national sovereignty by organizations, such as the World TradeOrganization (WTO). This paper investigates the perception of Americans towardsglobalization. A survey was administered in the College of Commerce and BusinessAdministration at an AACSB accredited southeastern United States university. The samplesupported globalization and the WTO but believed the U.S. government should more forcefully protect domestic jobs, US companies, the environment, and worker’s rights.

Patterns of Economic Growth, Global Challenges, and Competency Building: The Case of Steel Industry in Malaysia

Abdul Latif Salleh, Prince Sultan University, Kingdom of Saudi Arabia


The relationship between economic growth and steel consumption has long been established. Much of the acceleration in the growth of world’s steel demand after mid-1980scan be traced to the increased rate of economic growth of East Asian economies. The mid-1990s saw the demand for steel in Asia took a downward turn due to the impacts of Asianeconomic crisis. As these economies recovered, the intensity of use of steel duly followed.However, post-crisis recovery, the economic boom in China, and the introduction of liberalizing policies through AFTA have combined to alter the competitive landscape of the industry. This paper examines the patterns of consumption and the nature of market demand and factors that contribute to competitive advantages in the steel industry. The highly protected steel industry in Malaysia has historically depended on the domestic market.However, the rapidly changing international economic environment has forced Malaysian producers to develop new strategies in response to the new external challenges, specifically competition from regional Southeast Asian producers.

Bilateral Economic Relations between Australia and China: A Robust and Growing Trend

Jinmei Yang and Mahinda Siriwardana School of Business, Economics and Public Policy University of New England Armidale, NSW 2351, Australia


Australia and China have a longstanding relationship with a high level of interaction on trade, investment, education and tourism. China is of great significance to Australia as a bilateral, regional and multilateral partner; it is a significant member of the WTO, a major player in APEC, Australia’s largest trading partner in 2007, and a major source of migrants,students and tourists. Australia is also of great importance to China; in 2007 Australia was China’s 7th largest import source and 15th largest export destination (DFAT 2008). This paper uses a merchandise trade analysis to show how Australia and China perform in bilateral economic relations and the trend of the trade between them. Findings suggest that there is a robust and continuing growth trend between the two economies based on a strongly complementary trading relationship. The relative importance of one to the other is stronger and more significant, especially China’s significance to Australia. Trade liberalisation in goods by eliminating tariffs will be a crucial component of a possible FTA between Australia and China.

The Demand for Money in East Asian Countries: A Panel Study

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


This study presents the results of an empirical analysis of the demand for money in six East Asian economies over the period 1989-2003, namely Hong Kong, Korea, Malaysia, Philippines, Singapore and Thailand. In this study, we employed panel data set covering six East Asian countries, estimating the panel cointegration; dynamic fixed and random effects and compared to the individual country's money demand relationship. The empirical findings suggest that (1) there exists a long run and short run dynamic equilibrium relationship between monetary aggregate ( and ) and real income, real interest rate and inflation rate, and (2) the need of regulatory reforms to aggressively restructure financial systems and recapitalize financial institution through the collaboration in the region which are the bastion of regional economics growth in the future.

Asset Valuation of Banks in Mergers Using Real Option Method

Dr. Sheeba Kapil, Indian Institute of Foreign Trade, New Delhi, India Dr. Kanwal Kapil, Management Development Institute, Gurgaon, India

The paper applies real options to value Indian bank mergers. The analysis shows that these acquisitions were underpaid. The option premium calculated was far greater than the actual takeover premium. This research aims at applying real option pricing theory to recent bank mergers in India to check if these were possibly overpaid. On average, we find that the option premium was far less than the actual takeover premium suggesting that, from an option-pricing point of view, those acquisitions were underpaid. Further analysis, assuming the option premium equaled the takeover premium, shows that either the implicitly assumed volatility was too low, the assumed time to maturity was very short and/or the assumed subsequent market performance was too optimistic.

Practices of Working Capital Management Policies in Malaysia

Zariyawati Mohd Ashhari a,ψ and Annuar Md Nassir b a & b Univeristi Putra Malaysia, Malaysia.


There is no doubt that working capital is important to a firm. The efficient working capital management is an integral part of overall management strategy to create shareholders’ wealth. Further, there is not a single working capital policy that is suitable for all firms. Each firm requires a policy which can maximised shareholders’ wealth. However, to have an optimal working capital a firm should strive to balance its risk and return; it is a trade-off between profitability and liquidity. Therefore, this study aims to investigate the working capital policies practiced among firms in Bursa Malaysia. Results for the degree of aggressive asset management show the sector had distinctive and significantly different policies. Further, the asset policies between sectors revealed significant stability over the twelve year study period. The results of this study also showed a high and significant negative correlation between sector of asset and liability policies. This is revealed when a firm applied aggressive working capital asset policies which followed by conservative working capital financial policies.

Private Equity The Alternative Investment Case of Bharti Tele-Ventures

Dr. Sandeep Goel Management Development Institute India


Alternative investments or non-traditional investments encompass almost all investments outside Stocks, Bonds, Money Markets and Cash. The broad categories that fall under Alternative investments include Private Equity, Hedge Funds, Real Estate,Commodities and Art. Today, Sports Franchisees, Sportspersons, Works of Authors,Timber/Plantations and any other form of investment is included within Alternative Investments.The emergence of Alternative investments has primarily been due to the maturity of the traditional investment markets; which has made out performance on a continuous basis increasingly difficult. Also investors looking for supernormal profits and who are willing to take on significant risk have increased manifold. This has resulted in the development of an organized Alternative Investments market with Fund Managers, Research Institutions, and Agents & Advisors who specialize in this domain.Another key motivation for investing in them is the need to diversify. Investors today aren’t only diversifying across sectors within the Capital Markets but are also diversifying across Asset Classes. Next, a number of Wealthy Individuals, Angel Investors and Trusts & Funds support new upcoming ventures that seem promising. One may just consider that had Kleiner Perkins Caufield & Byers and Sequoia Capital had not supported Google in its early years, it would have never seen the light of day. Most of us at some point would have used online services as MakeMyTrip or ClearTrip for airline reservations. These again have been supported by Venture Capital firms. Even restaurant chains like Mars foods & Nirula’s have now been bought by Private Equity investors who are confident of taking these brands international apart from expanding their footprint in India. These investors may make such acquisitions purely for financial reasons or may have expertise in a particular industry like hospitality. Such investors aim at realizing the true value/potential of these investments in a period of 5-7 years by infusing the required capital, at times providing them management expertise and steering the management in the right direction. Objective of the Study It primarily evaluates the Private Equity, as a source of alternative investment. in India; the Warburg Pincus investment in Bharti Tele- Ventures.Also the stages involved in a Private Equity deal would be covered as gathered from the management of Divitas Capital, a Private Equity advisory firm.

How Do Electronic-Marketplace Benefits Evolve Over Time?

Chris Rowley, Cass Business School, City University, London, UK Hee-Dong Yang, College of Business Administration, Ewha Womans University, Korea Sora Kang, Department of Digital Business, Hoseo University, Korea Sun-Dong Kwon, College of Business, Chungbuk National University, Korea


Virtual marketplaces, known as electronic-marketplaces (e-marketplaces), are based on the internet and allow companies to sell and purchase materials online. E-marketplaces are used by purchasers to lower purchasing price or run more efficient purchasing operations, and by suppliers to establish new markets or reduce sales risks. We examine such marketplaces in three areas. First, how the changing relationship between e-marketplaces and purchasing companies over time as transactions continue. Second, as the relationship evolves, if benefits from e-marketplaces also change. Third, given e-marketplaces function as markets connecting vendors and buyers, do benefits differ between using single or multiple emarketplaces.

Innovating Brands through Blogs

K.H. Padmanabhan, University of Michigan-Dearborn,USA


Brands and branding underlie marketing success. Companies gain enormously from innovating marketing decisions. Blogs are presented here as an incremental innovation. The paper posits that blogs fit the profile of incremental innovation. The paper demonstrates to how blogs innovate branding decisions.

Auditing And Accounting in The People’s Republic of China: Review of Research Accomplished And Prospects for Additional Research

Samir Nissan , California State University,Chico , USA Shaomin Xie , Shanghai University of Finance and Economics , Shanghai , China


Financial disclosures are useful for decision making and allocation of resources. The quality of the information disclosed is affected by the quality of auditors and other onitoring mechanisms. The People’s Republic of China offers an enriching area of study of financial disclosures and auditing in an emerging market. By 2008, 59 years had passed since the creation of the People’s Republic of China. Under Mao, the “state” was the dominant force in the regulation of accounting and auditing which was to embody class struggle to accomplish central planning and public ownership.Accounting was considered as a tool to serve capitalistic societies, not a neutral discipline, and auditing was to monitor the achievement of economic endeavors. Almost 30 years later, in 1978, the reform era was initiated, and Deng was the force behind the change to the primacy of economic development, market economy and mixed ownership. Accounting was to be viewed as a tool useful for both capitalist and socialist economies. The change in ideology created the privatization of enterprises with the state as a majority owner and with a variety of share offerings denominated in yuan, US$, and Honk Kong dollar and traded on local Chinese and Hong Kong exchanges. Accounting and auditing regulations and standards were introduced, in a relatively short period of time, to enable firms to produce financial statements. Certified public accounting firms affiliated with government units and universities were created and auditors’ independence became a concern for investors. The education of accountants and their certifications had to be emphasized to enable the new enterprises to prepare financial statements and for certified public accountants to audit the financial statements as the number of standards increased significantly within a relatively short time. Companies issued A-shares whose financial statements were prepared according to the Chinese regulations and standards and audited by Chinese firms. Companies which issued A-shares also were allowed to issue B-shares whose financial statements were based on international accounting standards and audited by firms with experience in international operations. Concerns about the reliability of financial statements and monitoring mechanisms of auditors and the board of directors appeared relevant and significant. The ‘state”, the dominant force in the regulation of accounting and auditing established institutions such as the China Institute of Certified Public Accountants and China Security Regulatory Commission, which although monitored by the “state”, became participants in the regulation of accounting and auditing. Attention has been directed toward understanding state-owned companies and listed companies. However, China’s private sector, excluding state-owned enterprises and listed companies, has been growing with mechanisms such reputation and relationship instead of relying on China’s relatively weak legal protection, methods of financing, and corporate governance. The long history of China and the prevailing Confucianism and Marxism provided the foundation in describing and analyzing the prospects for accounting and auditing. The challenges facing accounting and auditing offer opportunities for research to enhance our understanding of China’s development of accounting and auditing and for the formulation of policy guidelines for China and other emerging countries. This article describes the environment in China and the opportunities it offers for research in accounting and auditing. It reviews and compares significant research performed and proposes research topics to enhance our understanding of accounting and auditing in China which can possibly enhance understanding of other emerging markets.

Magic Home Appliances: Managing Employee by Studying Organisational Dimensions

Prof. Pushpendra Priyadarshi Management Development Institute, India


The contribution made by small and medium enterprises (SMEs) has drawn special attention from practitioners and researchers to attend to their growing need to be more efficient and professional they earlier they were. The competitive situation has made these organisations to make extra effort to manage their human resources. When it comes to managing human resources the SMEs are found to create human resource processes and are often found struggling to create synergy between market forces, the informal environment of the organisation and newly created human resource systems and processes. The study on Magic Home Appliances (MHA), underscores such issues faced by the organisation and how are they managing it. In this process an attempt was made to study the human resource policies and practices as also identifying gaps, if any, between the management understands of the problems and the ground reality.

Impact of Activities of Small Australian Businesses on Their Attitudes towards The Use of Accounting Services

Anwar Chowdhury University of Wollongong Australia Mokhtar M Metwally University of Western Sydney Australia


This paper conducts a multiple discriminant analysis to determine which of the factors predict small companies to use services of accountants and to test if there are differences in the attitudes of small companies of various activities towards using these services. Four factor scores are calculated for each respondent. Factor scores are then used as explanatory variables in the discriminant analysis. The statistical results suggest that there is a significant discrimination between the attitudes of small businesses operating in the fields of construction, chemists, real estate,restaurants, medical practices and mixed business towards the importance of services of outside accountants in the areas of business performance, new actions; suggested expansion and payment of taxation.

Business Should Act Responsibility And to Be Accountable:Tobacco Industry

Mohamad Ali Roshidi bin Ahmad Faculty of Business & Economics Universiti Pendidikan Sultan Idris Malaysia


This paper focus on the social responsibility and accountability of tobacco industries in Malaysia for long-term profitability in the future. It has state that there are two key to drive for the companies to act in a socially responsible and be accountable. Besides, this paper has included the common corporate social responsibility (CSR) in tobacco industry and the focus activities CSR in Malaysia, and the reason for a company to act responsible and accountable. It also shares that how the tobacco industries circumvents the legislation from the existed rules. In additions, the statement that explain the benefit and the criteria of a good social and environment report for an organization will be discuss in this paper. Finally, this paper state that the true of the tobacco industries in using CSR as a legal way to promote their killing product.

The Design and Use of Performance Measurement Systems in The Malaysian Electrical and Electronics Industry

Tze San Ong Faculty of Economics and Management, University Putra Malaysia, Malaysia, And Boon Heng Teh Faculty of Business and Accountancy, Inti International University College,Malaysia


Data from a questionnaire survey covering 149 electronics and electrical manufacturing companies in Malaysia are used to identify the design and use of performance measurement systems (PMSs). Factor analysis identified the characteristics of PMSs that include: (1) four dimensions of design of PMS—well roundedness, extensive coverage, balanced measures and ad-hoc basis; (2) four dimensions of use of PMS—speedy, purposefulness, simplicity and objectivity. Results are likely to be of interest to the academic community, practitioners, the Malaysian government and those in other developing countries within the region. Keywords:performance measurement systems; factor analysis; design and use of PMS;developing countrie.

Lessons from Transformation of Poland's Higher Education

Bozena Leven, Professor , School of Business The College of New Jersey , USA


Poland has also experienced unprecedented growth in business, management and economics programs and student enrollments. In this paper we describe the progress of several major reforms that directly impact the teaching of these disciplines, including changes in funding mechanisms, potential funding sources, degrees granted, curricula, faculty governance, and faculty promotion. We also identify a number of systemic obstacles that have slowed progress in this area, and discuss how they might be addressed. Key words:Business education reforms, Poland’s transition reforms, Development of management programs, Enterprise development

Antecedents and Consequences of Relationship Quality in Educational Context

Chia-Hung Hung Ling Tung University, Taiwan ROC


􀂄 Purpose
This study attempts to investigate how marketing tactics can enhance parent loyalty in the educational context. Building on extant research, the authors propose an integrated framework in which marketing tactics are related to perceived relationship quality and school image which in turn influences parents’ loyalty.

􀂄 Design/methodology/approach
A questionnaire is constructed, and data are collected from 1200 parents of schoolchildren studying in 60 elementary schools in Taiwan. Structural equation modeling is applied to analyze the data.

􀂄 Finding
The results show that price tactics have the most influence on relationship quality, in addition promotion tactics have the most influence on school image, and finally, that school image is a better predictor of parents’ behavior than relationship quality.

􀂄 Originality/value
The main contribution of this study is to identifies and evaluates the antecedents and consequences effect of relationship quality in the elementary schools. Keywords: marketing tactics; relationship marketing; relationship quality; school image; parents’ loyalty

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ISSN: 1813-0534