ISSN: 1813-0534






Volume 6 No.3 August 2010 Edition

The Need For Greater Cultural Intelligence and Cross-Cultural Training

Professor Chris Rowley and Dr Irene Poon
Centre for Research on Asian Management,UK



Evolving patterns of globalisation, internationalization and political environments can
make inter-cultural work much more the norm for many organisations. Managers and
organisations can be required to work in diverse (even multiple) contexts of multi-cultural/racial/lingual environments. These render ethnocentrism in business ever less relevant.Inter-cultural differences have long been a challenge confronting multinational organisations(Hofstede, 1991). In the face of these global challenges and cultural adaptation issues, amodel of cultural adaptation called ‘Cultural Intelligence’ (CQ) has been proposed (Earleyand Ang, 2003). This is an area of increasing interest in relation to work (see, inter alia,Hooker, 2003; Peterson, 2004; Tan et al 2006), along with the linked concepts of ‘Emotional Intelligence’ (EQ) and ‘Social Intelligence’ (SQ), as well as the commensurate impacts on training , especially cross-cultural management training (CCMT). These all have clear and
profound impacts on human resources (HR), HR management (HRM) and HR development(HRD), including the relevance of Business Schools’ programmes and strategies.In this article we look at what CQ is; cross-cultural competencies, skills and abilities; CQ in relation to EQ and SQ; the need for training; CCMT; programme design, methodology and effectiveness; and end with a conclusion section.



Resolving Ethical Dilemmas in Cross-Cultural Commerce

Mark J. Roselli, Ph.D. - Berea College,USA
Joe Singer, Ph.D. - University of Missouri,USA



If the 20th century was the American century in international business, then the 21st
century will be the Asian century. This will be the most important relationship of today’s world and even more of tomorrow’s. As China in particular continues its growth through international business, more attention surely must be paid to differences between Chinese and western ethical standards and decision-making. In this paper, the authors review the history and nature of those differences beginning with a discussion of the Chinese perspective on moral reasoning, the effects of modernization on ethics in China and the transplantation of western ethics into China. A model for ethical decision-making is then developed which is comprised of 5 steps: refining the problem, analyzing possible solutions, determining which solution to implement, taking appropriate action, and reflecting on the outcomes (RADAR).
Two Chinese business practices (guanxi and renqing) and one western business practice(individual performance reviews) are used as test cases to demonstrate how the RADAR model can help facilitate an agreeable resolution to situations that one of the involved parties may consider unethical. The paper demonstrates that a most effective method for teaching cross-cultural ethical reasoning skills is through a participatory class dedicated to the application of ethical theories.

Drivers for The Adoption of Environmental Management Practices in The Hotel Industry: An Institutional Perspective

A.K. Siti-Nabiha , Graduate School of Business, Universiti Sains Malaysia , Malaysia
Nabsiah Abdul Wahid, Graduate School of Business, Universiti Sains Malaysia
Noor Shairullizan Kamarul Arrifin , School of Management Universiti Sains Malaysia



The hotel industry, as one of the major players in the tourism sector, has an essential role in protecting the environment. Hotels can ensure the sustainability of their business by incorporating environmentally friendly practices (EMPs). Thus, the objective of this paper is to discuss the factors that drive the adoption of EMPs in hotels in Malaysia. The institutional theory framework is used to identify and explain the relationship between the factors and adoption and EMPs in the hotel industry. The roles and the importance of the factors such as regulation or government, the pressure and demands from the customers, the level of competition, the organizational awareness of green practices, and the organisation’s attitude towards change are discussed in this paper.
Keywords: EMP, drivers, institutional theory, hotel industry, sustainability, green practices.



The Impact of International Market Effects and Pure Political Risks on The UK,EMU,and USA Oil and Gas Stock Market Sectors

John Simpson
School of Economics and Finance
Curtin University, Australia.



A key question in European integration is whether or not the global oil and gas market
sector (over the period which includes the oil price hikes of 2001 to late 2007 and the global financial crisis from mid 2008 to early 2009) has been impacted to a greater or lesser extent by major Western country oil and gas stock market sectors. An examination is undertaken of data from those sectors in the USA, the EMU and the UK as well as political, social and legal data (embodied in political risk ratings) for the USA, the UK and the key economies of the EMU (that is, France, Germany and Italy). This short study uses analysis of both unlagged and lagged data in multivariate models to test these relationships and finds a closer relationship politically and financially between the USA and the UK than between the EMU and the UK markets. The EMU and the major EMU countries considered separately in oil and gas market sector movements and political risk ratings movements have very little financial and political influence on the movement of the global oil and gas market sector over the period.



Issues in Internal Analysis for Competitive Marketing Strategy

Dr Nagasimha B Kanagal
Indian Institute of Management,Bangalore


The study proposes to study the nature and motivation of internal analysis;
organizational, market and industry conditions for internal analysis to take place, efficacy of internal analysis. The study also involves an empirical study on a leading national bank and discusses the managerial implications for marketing strategy. A literature review is conducted followed by a theoretical development. An empirical study is next laid out and the managerial implications are discussed. For the scope of the empirical study, multiple motives exist for the conduction of internal analysis that includes development of marketing strategies, fit of the organization to the external environment and management of public relations by a firm.Internal analysis is postulated to be a process for all firms needing to formulate a marketing
strategy that ranges from a SWOT to detailed organizational analysis / interventions. The empirical research focused on a few motives for the internal analysis. The remaining postulates were identified in the theoretical development. Internal analysis suggests the perceived realities of the organization. Strategic market analysis leads to a determination of the ground realities of the market. Management of the interaction of the ground realities of the market and the perceived realities of the organization is a necessary part of marketing strategy.

Supply Chains of Digital Experience Products1

Shariffah Zamoon, Department of Quantitative Methods & Information Systems,Kuwait University , Kuwait
Robert Pooley, School of Mathematical and Computer Sciences, Heriot-Watt University(Edinburgh) , UK



Digital experience products encompass a class of goods and services that are represented electronically by bits, and whose value lies within the experience they provide. The prevalence of digital experience products, although not strictly quantifiable, has increased in recent years. As such, conventional wisdom concerning supply chains must be revisited to understand the impacts of features of digital experience products on the supply chain. This paper summarizes features of digital experience products and theorizes the impacts of those features on the drivers of supply chains. The drivers of supply chains include logistical drivers (facilities, inventory, and transportation) as well as cross-functional drivers(information, sourcing, and pricing). The paper concludes with implications for practitioners
and academics alike.

Keywords: Digital Experience Products, Supply Chain, Supply Chain Drivers, Digital Economy,Human Interaction with Digital Experience Products


Projective Techniques and Brand Image Research: An Exploration of Personification Methods

Dr. Harsh Dwivedi is Director at R.A Poddar Institute of Management, Jaipur,India
Prof. Swati Soni is a faculty in Marketing at Jaipuria Institute of Management,
Dr. Pradeep Kautish is a faculty at Jaipuria Institute of Management, Jaipur,India
Dr. Makarand Upadhyaya is a senior faculty at JKPS, Gurgaon,India



This paper is an attempt to study the effectiveness of projective techniques in exploring the brand image of ego-sensitive brands, possessing minimal functional differentiation. The paper examines four premium perfume brands. Two metaphor based personification methodsmood-boards and job-sorting are employed to study the association that the participants have with the brands. Both the methods are open ended assignments to decipher how participants think or feel about the research object in question. The study analyses the congruent validity of the two methods and differences in their ability to personify the chosen brands of perfume.Both the methods yielded almost similar outcomes, thereby reiterating that the two methods possess congruent validity. The latter part of the paper analyses the brand personality characteristics that were connected to the celebrities and jobs thus connected, as identified in the mood-boards and job-sorting exercise respectively. SWOCC Brand Personality Scale,which is a further elaboration of Aaker’s brand personality research, was used to provide a list of the personality characteristics. The study however faces a limitation of the failure of the translation from the projective results into personality scores dimensions. This raises a serious concern if it is at all possible to validly translate overall projective data into analytical scores and if it is so then what would be the ideal procedure to do this.


Factors That Contribute to Starting and Growing Home Based Businesses

Shameem Ali, Victoria University, Melbourne, Australia


In the home-based business sector (HBB) the circumstances and reasons which lead to business activity being carried in the home are not well understood, despite the fact that the sector has undergone significant expansion over the last two decades. Official statistics have often present a confusing picture in terms of the profile of the businesses, due perhaps to the difficulties of clearly defining certain phenomena and understanding the uniqueness of HBB issues. This paper investigates what leads operators to start a home based business and what motivates them to grow these businesses. Understanding the motivations for starting the home-based business is often intertwined with views on and implications of growth. The study found that the reasons for starting the business from home related to two factor groupings: financial security and employment. The business establishment and growth were facilitated by three factor groups, namely, developing management capacity and business support networks; opportunity and technology exploitation; and market orientation.


The Balanced Scorecard as A Strategic Performance Control Tool and Its Link to The Economic Profit Measurement- EVA and MVA: A Literature Review


Anbalagan Krishnan
Senior Lecturer for Accounting
Department of Accounting and BIS School of Business
Curtin University of Technology East Malaysia.
Associate Professor & Research Supervisor
Faculty of Business Administration, University of Tun Abdul Razak.West Malaysia.



The organizational performance measurement and control system is vital to sustain the business in all economic environments. Organization requires a control system that measures the performance strategically. This paper gathers the literature discussion of one such popular integrated strategic performance control system, the balanced scorecard approach (BSC).The discussion focuses on BSC approach on facilitating the implementation of organizational strategic and its link to the economic profit measures. Two popular economic profit measures, the Economic Value Added (EVA) and Market Value Added (MVA) are discussed in detail from various researchers point of view. The paper highlights the difference between these
two measures and difference with the Return on Investment (ROI). The limitation of the economic profit measure is also highlighted in the discussion. As conclusion the link between the BSC strategic performance control tool and the economic profit measures are noted. This paper provides detailed discussions of both BSC strategic tool and economic profit measures based on literature review.

Keyword:BSC performance strategic control tool, Economic Value added and Market Value added.

Characteristics of US Firms with Revenue-related Restatements

Srinivasan Ragothaman and Loril Epping
Beacom School of Business, University of South Dakota, USA


This paper uses financial statement data to explore the characteristics of US firms with revenue-related restatements. Data from COMPUSTAT are used to develop a logistic regression model to examine the relative explanatory power of selected independent variables.The variables examined include audit committee composition, audit opinion, market returns,liquidity, size, and risk. The results indicate that the composition of the audit committee, the audit opinion, and the market returns are associated with revenue-related restatements. When compared to control firms, revenue restatement firms tend to be more risky as measured by beta.Size and liquidity were not significantly different between the two groups.


The Future of LIFO

Peter Harris, CPA,CFA
School of Management New York Institute of Technology ,USA
Associate Professor and Chair of the Accounting and Finance Department



The Last In First Out Inventory method (LIFO) has been an accepted popular method in the U.S since its inception in 1939, soon after the Great Depression. It has been questioned as a realistic, appropriate economic method since then, and many have and continue to argue that is simply provides a tax benefit for those who are in a position to use LIFO. It is seen as a“tax loophole” rather than an appropriate accounting method by many. This paper provides two reasons that have recently surfaced that will potentially eliminate LIFO as an acceptable accounting method. The pressures imposed by the SEC to standardize financial reporting under the leadership of International Accounting Standards Board (IASB), and the political pressures imposed by the Obama Administration; both strongly opposing LIFO are the principle reasons for its elimination by as early as December 31, 2010. Assuming that LIFO is eliminated, there are a number of tax planning opportunities available to companies who presently use this method.


Perceived Detection Probability and Individual Tax Compliance Behaviours: Malaysian Perspectives

Mohamad Ali Roshidi bin Ahmad
Faculty of Business and Economics, Universiti Pendidikan Sultan Idris
Perak, Malaysia


The subject of individual tax compliance has been extensively analyzed and evaluated
by academicians, professionals, and governments, particularly in the United State and other western countries since about 1960. 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 ways of taxpayers perceived on detection probability by Inland Revenue Board (IRB) and how it affects their tax compliance behaviours. The objectives of this study is to investigate the effect of taxpayers perceived on detection probability 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 2005, around 778,047 of 3,512,920 or 22.1% of the tax return, which distributed to eligible taxpayers were never return (IRB, 2006). This is clearly reflects the low level of tax compliance in Malaysia. By introducing SAS, the IRB has started a series of appropriate steps towards ensuring a high level of compliance among taxpayers.

Keyword: detection probability, tax compliance, self-assessment system

Bank Specific and Macroeconomic Determinants of Bank Profitability : The Indian Evidence

Dr. Dharmendra Singh,
Associate Professor,School of Management Sciences,Lucknow ,India


This paper examines the impact of bank specific as well as macroeconomic variables on the performance of the Indian banking industry. Our results show that among macroeconomic variables GDP of a country is having positive relation and is of paramount importance in affecting profitability of banks operating in that country. On the other hand, the asset quality,as measured by the NPA/TA ratio and expense management measured by OEXP/TA affects the performance of banks adversely. In addition, bank size has not proved to be an important determinant of bank profitability. Finally, with regard to macroeconomic variables, the foreign banks operating in India were less affected as compared to the domestic banks.

Key Words:Profitability, Macroeconomic variables, Return on Assets (ROA)

Credit Derivatives

Klara Jurenkova,Joel N. Morse,Andreas Prasetiya,
University of Baltimore


The objective of this paper is to introduce credit derivatives and their uses in financial
markets by institutional investors and corporate financial managers. First, the purpose of credit derivatives and their relationship to different types of credit risk will be explained.Next, several basic terms related to credit derivatives will be introduced, which will be followed by a typology of credit derivatives. Throughout the paper, current and potential uses of credit derivatives will be suggested


Cause-And-Effect Between Implied Volatility And Options Price

Ariful Hoque
School of Accounting, Economics and Finance
University of Southern Queensland, Australia


Implied volatility is widely believed to be the best underlying exchange rate volatility
forecast for pricing currency options. To measure unbiased implied volatility requires accurate options price. Unbiased implied volatility is also needed for pricing options correctly.Consequently, an interesting question is raised, is it options price that causes the implied volatility or is it the implied volatility that causes options price? This study employs the Granger causality test to address this critical issue for six major currency options are traded in Philadelphia Stock Exchange. The test results identify the bilateral Granger causality between implied volatility and options price, which distorts options pricing accuracy. We, therefore,cannot conclude that the implied volatility is the best choice for pricing currency options.

JEL classifications:G13, G17
Keywords: Implied volatility, currency options price, Granger causality test, MATLAB, bilateral causality


Rough Set-based Fuzzy Time Series for Forecasting Currency
Exchange Rates

Hsing-Hui Chu,Hia Jong Teoh, Ching-Mei Chu
Ling Tung University


This paper integrates a rough set rule induction algorithm with fuzzy time series and applies the integrated model to forecast currency exchange rates. Time series data were grouped into time series data granules with week-based averages and fuzzified into unique corresponding fuzzy relationships, and we used a rough set rule induction algorithm to extract meaningful rules. Empirical analyses were completed with regard to the exchange rates between the US Dollar and 3 other currencies (New Taiwan Dollar, Japanese Yen, and Indian Rupee). The proposed model was compared with those of Chen (1996) and Yu (2005), and the empirical results show that the proposed model forecasts a more tolerant currency exchange rate than the listed models.


IT Investment Announcements and Market Reaction: The Moderating Impact Of R&D Intensity and Firm Growth

Husain Y. Alyousef, College of Business Administration, Kuwait University, Kuwait


This study examines the relationship between firm characteristics and abnormal return

around the announcement period for firms investing in IT. Two firm characteristics were examined, R&D intensity and firm growth (Tobin’s q), using the event study methodology.First, the sample was divided into two portfolios (firms with high R&D intensity and firms with low R&D intensity); there was no significant relationship found for either portfolio. As for firm growth, the high-growth firms portfolio exhibited a significant negative relationship while the low-growth firms portfolio had a positive non-significant relationship. The findings provided us with new insights regarding firm characteristics that might be associated with the firms’ abnormal return.


The Moderating Effect of Hand-on Experience on Technology Acceptance: A Longitudinal Study

Jun He
College of Business
University of Michigan – Dearborn USA


This study investigated the moderating effect of hand-on experience on the technology acceptance model, more specially, the influences of perceived usefulness and perceived ease of use on behavioral intention. Previous empirical findings on the moderating effect of experience were synthesized with a meta-analysis, and a longitudinal study using student subjects was conducted. The Results suggest that with increasing hand-on experience, the influence of perceived usefulness on behavioral intention will increase over time, while the influence of perceived ease of use on behavioral intention will decrease over time. A special time analysis method - multilevel model for change - was employed for a within-subject analysis of the longitudinal data. Theoretical and practical implications from the findings, and limitations of the study, are also discussed.

Keywords:Technology Acceptance Model, time analysis, longitudinal study, multilevel model for change



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ISSN: 1813-0534