The International Journal of Organizational Innovation

THE INTERNATIONAL JOURNAL OF ORGANIZATIONAL INNOVATION

VOLUME 9 NUMBER 1 JULY 2016

Table of Contents

Page: Title - Author(s):

6. Exploring Customer Value Of Innovation Achievement: ISM And ANP Analysis On Recycled Paper Furniture Hung-Chang Yang, Chen-Kung Huang, Ting-Hao Hsieh, Hui-Yun Yu, Chih-Sung Lai

23. Developing Decision-Making Support System Using Risk Efficiency On Building Projects In Taiwan Jui-Feng Liu, Tsung-Chieh Tsai

35. Research On Taiwan Theme Parks’ Experience Marketing Strategy And Revisit Willingness, Purchase Willingness And Recommendation Willingness Jung Tsun Liu

54. The Effects Of General Personality Traits And Cognitive Beliefs On Elementary School Teachers’ Use Of An Educational Portal In Taiwan Jung-Wen Hsia, Ai-Hua Tseng

63. The Case Study Of Student’s Motivation In Leisure Participation And Leisure Obstruction At Elementary Level In Taiwan. Chien-Hui Lin, Hui-Chuan Huang, Yi-Hsien Lin, Yu-Lin Lee

80. Influence On Kindergarten Teacher’s Job Satisfaction From Kindergarten Organization Culture And Work Pressure Jung Tsun Liu

98. The Research Of Dynamic Images Using Effects In Children Webpage Tsao Yung-Chin, Lin Chia-Ho

1 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 107. Contributing Causes Of Employee Loyalty Of Service Personnel In International Hotels Yen-Cheng Chen, Hsin-I Chen, Pei-Ling Tsui, Yu-Chih Chiang

119. Exploring Customers’ Post-Dining Behavioral Intentions Toward Green Restaurants: An Application Of Theory Of Planned Behavior Kaie-Chin Chung

135. The Investigation Of Raw Data Pattern Leading To Erroneous Grey Prediction Shou-Jen Huang, Chun-I Chen

146. Super Efficiency Model Using A Constant As “Total Weighted Sum Of Input” Constraint Chiao-Ping Bao, Nai-Chieh Wei, Shiu-Fang Kang

158. Integrating Service Science And Information System Technology: A Case Study Yen Hsu

174. A Study On Reusing Construction-Suspended Buildings In Taichung City Of Taiwan Jui-Feng Liu, Tsung-Chieh Tsai

187. The Study On The Service Quality And Satisfaction Of Public Hot Spring Hotels K.-W. Chen, Y. Ouyang, Y.-C. Huang, T.-L., Lee

200. E-Business Of Electronic Sales On Cv “XYZ” Company Zulhawati, Joko Sutopo

210. The Development Priority Of Technology Competence Or Market Competence: Case Study Of Taiwan Flat Panel Display Peng-Jung Lin, Yi-Wan Wang, Joseph L. Y. Che, Bey Rong Kung, Wen- Ih Hsieh, Ashley Leung

228. Application Of Activity-Based Costing On Reinforcing Steel Bar Manufacturer Wei Tong Chen, Chao Wei Wang

244. The Model Of Dynamic Capability In Supply Chain Chih-Hsing Wang, Wen-Liang Liu, Ching-Jun Cheng, Kai-Ping Huang

264. Shear Banding Induced Seismic Building Tilting Failure and Its Control Tse-Shan Hsu, Cheng-Chieh Ho

284. Examining The Measurement Invariance Across Gender For The Part Of Responsiveness In SERVQUAL Scale In Retail Business Of Taiwan Yu-Jia Hu, Feng-Ming Liu, Ling-Ching Su, Jian-Hao Huang

2 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Information Regarding:

The International Journal of Organizational Innovation (IJOI) The International Association of Organizational Innovation (IAOI) The International Conference on Organizational Innovation

THE INTERNATIONAL JOURNAL OF ORGANIZATIONAL INNOVATION (IJOI) (ISSN 1943-1813) is an international, blind peer-reviewed journal, published quarterly. It may be viewed online for free. There are no print versions of this journal; however, the journal .pdf file may be downloaded and printed. It contains a wide variety of research, scholarship, educational and practitioner perspectives on organizational innovation related themes and topics. It aims to provide a global perspective on organizational innovation of benefit to scholars, educators, students, practitioners, policy-makers and consultants. All past issues of the journal are available on the journal website. Submissions are welcome from the members of IAOI and other as- sociations & all other scholars and practitioners. Student papers are also welcome.

For information regarding submissions to the journal, go to the journal homepage: http://www.ijoi-online.org/

To Contact the IJOI Editor, email: [email protected]

THE INTERNATIONAL ASSOCIATION OF ORGANIZATIONAL INNOVATION (IAOI) is a non-profit organization. You may become a member of IAOI by either preventing a paper at their Conference or publishing an article in their Journal. IAOI is the publisher of this J ournal . It also holds an Annual Conference (See Below). For more information on the International Association of Organizational Innovation , go to: http://www.iaoiusa.org

The 2016 INTERNATIONAL CONFERENCE ON ORGANIZATIONAL INNOVA- TION (ICOI) will be held in Beijing, China, July 26- 28, 2016. The conference will be hosted by the Beijing University of Chemical Technology. For more information, go to: http://www.iaoiusa.org/2016icoi/index.html

3 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

THE 2016 BOARD OF EDITORS

Editor-In-Chief Frederick L. Dembowski - International Association of Organizational Innovation, USA

Associate Editor Chich-Jen Shieh - International Association of Org. Innovation, Taiwan R.O.C. Associate Editor Sergey Ivanov - University of the District of Columbia, USA

Assistant Editor Ahmed M Kamaruddeen - Universiti Utara, Malaysia Assistant Editor Alan E Simon - Concordia University Chicago, USA Assistant Editor Alex Maritz - Australian Grad. School Of Entrepreneurship, Australia Assistant Editor Asma Salman - American University In The Emirates, Dubai Assistant Editor Barbara Cimatti - University Of Bologna, Italy Assistant Editor Barbara Qualls, Stephen F. Austin State University, USA Assistant Editor Ben Hendricks - Fontys University Of Applied Sciences, The Netherlands Assistant Editor Bettina Stevanovic, University Of Western Sydney, Australia Assistant Editor Carl D Ekstrom - University Of Nebraska At Omaha, USA Assistant Editor Chandra Shekar - American University Of Antigua College Of Medicine, Antigua Assistant Editor Catherine C Chiang - Elon University, USA Assistant Editor Chrissy Cross, Stephen F. Austin State University, USA Assistant Editor Chung-Hung Lin - I-Shou University, Taiwan, R.O.C. Assistant Editor Chun-Ming Hsieh - Tongji University, China Assistant Editor Davorin Kralj - Institute For Creative Management, Slovenia Assistant Editor Denis Ushakov - Northern Caucasian Academy Of Public Services Assistant Editor Earl F Newby - Virginia State University, USA Assistant Editor Eloiza Matos - Federal Technological University Of Paraná - Brazil Assistant Editor Fernando Cardoso De SoUSA - Portuguese Association Of Creativity And Innovation (Apic)), Portugal Assistant Editor Fuhui Tong - Texas A&M University, USA Assistant Editor George Willey - Stephen F Austin State University, USA Assistant Editor Heather Farmakis – Academic Partnerships, USA Assistant Editor Henry T Burley - La Trobe University, Australia Assistant Editor Hong-Cheng Liu - I-Shou University, Taiwan R.O.C. Assistant Editor Hsin-Mei Lin - National Chi Nan University, Taiwan R.O.C. Assistant Editor Ilias Said - Universiti Sains Malaysia, Malaysia

4 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 Assistant Editor Ileana Monteiro - Portuguese Association Of Creativity And Innovation, Portugal Assistant Editor Jeffrey Oescher - Southeastern Louisiana University, USA Assistant Editor Jian Zhang - Dr. J. Consulting, USA Assistant Editor Julia N Ballenger - Texas A & M University - Commerce, USA Assistant Editor Julius Ndumbe Anyu - University Of The District Of Columbia, USA Assistant Editor Jung-Wen Hsia, Chung Hua University, Taiwan R.O.C. Assistant Editor Jyh-Rong Chou - I-Shou University, Taiwan R.O.C. Assistant Editor Kai-Ping Huang - University Of Technology, Sydney, Australia Assistant Editor Ken Kelch - Alliant International University, USA Assistant Editor Ken Simpson - Unitec, New Zealand Assistant Editor Kerry Roberts - Stephen F. Austin State University, USA Assistant Editor Krishnaswamy Jayaraman, Taylor University, Malaysia Assistant Editor Madeline Berma - Universiti Kebangsaan, Malaysia Assistant Editor Marius Potgieter - Tshwane University Of Technology, South Africa Assistant Editor Mei-Ju Chou - Shoufu University, Taiwan R.O.C. Assistant Editor Melissa Kaulbach - Sarasota University, USA Assistant Editor Michelle Williams - Stephen F. Austin State University, USA Assistant Editor Michael A Lane - University Of Illinois Springfield, USA Assistant Editor Nathan R Templeton - Texas A&M University Commerce, USA Assistant Editor Noor Mohammad - Faculty Of Law, Universiti Kebangsaan, Malaysia Assistant Editor Nor'aini Yusof - Universiti Sains Malaysia, Malaysia Assistant Editor Olivia Fachrunnisa, Unissula, Indonesia Assistant Editor Opas Piansoongnern - Shinawatra University, Thailand Assistant Editor Ralph L Marshall - Eastern Illinois University, USA Assistant Editor Ray Thompson - Texas A&M University-Commerce. USA Assistant Editor Shang-Pao Yeh - I-Shou University, Taiwan R.O.C. Assistant Editor Sheng-Wen Hsieh - Far East University, Taiwan R.O.C. Assistant Editor Siriwan Saksiriruthai - Suan Sunandha Rajabhat University, Thailand Assistant Editor Sohail Bin Ahmed - Universiti Teknologi Mara, Malaysia Assistant Editor Stacy Hendricks - Stephen F. Austin State University, USA Assistant Editor Thomas C Valesky - Florida Gulf Coast University, USA Assistant Editor Tsung-Lin Lee, China University Of Science And Technology, Taiwan, R.O.C. Assistant Editor Tung-Yu Tsai - Taiwan Cooperative Bank, Taiwan R.O.C. Assistant Editor Yen Hsu, Tatung University, Taiwan (R.O.C.) Assistant Editor Yi-Hsien Lin, Da Yeh University, Taiwan R.O.C. Assistant Editor Yulun Hsu -Fo Guang University, Taiwan, R.O.C. Assistant Editor Yu San Ting, Da-Yeh University, R.O.C. Assistant Editor Zach Kelehear - Georgia Regents University, USA

5 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

EXPLORING CUSTOMER VALUE OF INNOVATION ACHIEVEMENT: ISM AND ANP ANALYSIS ON RECYCLED PAPER FURNITURE

Hung-Chang Yang Department of Business Administration National Yunlin University of Science and Technology No.123, University Rd, Section 3, Douliou, Yunlin 64002, Taiwan [email protected]

Chen-Kung Huang Department of Business Administration National Yunlin University of Science and Technology No.123, University Rd, Section 3, Douliou, Yunlin 64002, Taiwan [email protected]

Ting-Hao Hsieh* Department of Human Resource Management and Development Hsiuping University of Science and Technology No.11, Gongye Rd, Dali Dist., Taichung City 412-80, Taiwan *Corresponding Author: [email protected]

Hui-Yun Yu Department of Business Administration National Yunlin University of Science and Technology No.123, University Rd, Section 3, Douliou, Yunlin 64002, Taiwan [email protected]

Chih-Sung Lai Department of International Business National Taichung University of Education No.140, Minsheng Rd., West Dist., Taichung City 40306, Taiwan [email protected]

Abstract

Innovation has long been crucial for progress in the furniture industry. Recycled paper furniture is a new type of green product that is a result of innovation in the furniture in- 6 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 dustry in Taiwan . However, few marketing studies have focused on recycled paper furniture, despite the gradual developments regarding this product in the furniture industry in recent years . Therefore, through interpretive structural modeling and an analytic network process, this study explored the customer value of recycled paper furniture products, arranging identified values into a hierarchy and subsequently calculating and analyzing the values therein . The findings of this study indicated that senses of belonging, pleasure, and pride are antecedents of customer value derived from recycled paper furniture. Environ- mental influence is the key factor affecting consumer willingness to purchase this type of furniture. When buying recycled paper furniture, consumers appear to support the concept of environmental protection. However, in reality, culture, opinion leaders, purchase situations, and sense of belonging are the main factors driving their purchase decisions.

Key Words: Value, Interpretive Structural Modeling (ISM), Analytic Network Process (ANP), Recycled Paper Furniture, Innovation

Introduction Balice, Dangelico, and Iacobone, 2012; Florenthal and Arling, 2011; Tsai, 2011). In Taiwan, the furniture industry is a mature industry that has developed over Similarly, the applications for paper the course of several years. Because of recycling have increased substantially. global competition, Taiwan’s furn-iture For example, in the United States, the industry has focused on innovation in its quantity of recycled paper grew from strategy designs. In this industry, prod- 2.91 million tons in 1990 to approxi- uct innovation is crucial. Product inno- mately 5.17 million tons in 2014 (Amer- vation refers to the development and ican Forest and Paper Association, 2015). launching of commercial products that Recycled paper is generally transformed are in some way unique or distinct from into recycled paper products, indicating existing products in the market (Bisbe that consumer demand for these products and Otley, 2004). As the global con- is growing. Consequently, recycled pa- sumption of resources has increased and per furniture, a type of furniture that can industrial pollution in various regions be recycled and reused, has been devel- has continued to be poorly controlled, oped. Recycled paper furniture is a green the importance of recycling as a means product that is considered as a crucial of environmental protection has gradual- option for achieving product innovation ly become widely recognized. Further- among furniture producers in Taiwan. more, consumers have started to consid- Characterized by the two aspects of en- er environmental protection in deciding vironmental protection and resource whether the products they use in daily recycling, recycled paper furniture re- life are recyclable. Thus, in recent years, duces the amount of logging for making public demand for green products has paper products, promotes recycling and increased; additionally, enterprises have reuse of resources, and minimizes re- begun investing considerable resources source consumption. Before making a into developing green products (Albino, purchase, consumers usually have cer-

7 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 tain expectations regarding the product higher than those for traditional wooden they wish to buy (Chen, 2016). Recycled furniture, indicating that achieving a paper furniture offers a means for con- substantial reduction in these costs is sumers to contribute to protecting the unlikely in the foreseeable future. Thus, environment conserving resources and discovering further key benefits of recy- satisfying their beliefs regarding the im- cled paper furniture is crucial for enter- provement of the world. According to prises in the furniture industry. This Rokeach (1973), the enduring belief that study addressed the following research one end-state of existence is preferable questions: to another is referred to as a value. 1. Apart from supporting environmen- In studying consumer behavior tal protection, what other benefits do concerning green products, Balderjahn consumers derive from purchasing (1998) developed a causal model for recycled paper furniture? green product consumers, observing that 2. Do environmental factors affect re- a positive attitude toward ecologically cycled paper furniture consumers? conscious living and environmental pro- 3. Why do numerous consumers pur- tection resulted in not only the purchase chase recycled paper furniture when and use of green products, but also sup- it is usually more expensive than tra- port for environmental groups. Engel, ditional furniture is? Kollat, and Blackwell (1995) suggested that when making purchase decisions, Effectively identifying the key con- consumers are subject to environmental sumer values regarding recycled paper influences including family, social class, furniture products may facilitate devel- situation, culture, and personal beliefs. opment of the recycled paper furniture Balderjahn (1998) investigated the be- industry. However, recycled paper furni- havior of green product consumers, find- ture is a relatively new innovative prod- ing that although recycled paper furni- uct on which few marketing studies have ture is a green product, when purchasing focused. Therefore, the present study such products, consumers may not only explored customer values pertaining to want to support environmental protec- recycled paper furniture, arranging the tion, but also to satisfy other values that identified values into a hierarchy and are more discrete. Moreover, the envi- subsequently computing and analyzing ronmental influences proposed by Engel the values therein to determine recom- et al. (1995) were applied to consumer mendations for positioning recycled pa- behavior in purchasing general products. per furniture products in the market. Because recycled paper furniture differs considerably from general products, de- Literature Review termining whether environmental influences affect the perceptions of recycled Veryzer (1998) suggested that in- paper furniture consumers requires fur- novation encompasses the creation of ther investigation. Furthermore, the costs new products, services, or development of materials, manufacturing, and design processes. Innovation is crucial to enter- for recycled paper furniture are usually prises because organizational innovation

8 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 and product innovation are related to basis of Holbrook’s aforementioned as- enterprise performance (Damanpour and sertion, the characteristics of customer Evan, 1984; Foster, 1986; Subramanian value concerning recycled paper furni- and Nilakanta, 1996; Tushman and ture are listed as follows: Nalder, 1986; Wind and Mahajan, 1997). For furniture companies, developing 1. Value is an experience: For custom- recycled paper furniture and producing ers, perception of product value is related products are typical examples of deeply influenced by their experi- product innovation. Such companies ence in purchasing and using a prod- consider developing an original product, uct. Consumers have become more creating a new brand, or modifying ex- rational when making purchase deci- isting products as crucial options for sions. In addition to supporting envi- product innovation (Kotler and Sindey, ronmental protection, consumers of 1991). recycled paper furniture products focus more on the actual benefits de- Whether customers are loyal is a rived from a product, such as its key factor in company success (Hassan, utility and whether the purchase en- 2012). To maintain loyalty and long- vironment is satisfactory. Numerous term relationships regarding customers, consumers who have had positive companies must enhance product value experiences using recycled paper as perceived by customers (Chang, Lee furniture have become long-term and Chen, 2008; Yang and Jun, 2009). buyers. Therefore, in addition to loyalty, cus- 2. Value is generated from customer tomer-perceived value is a major factor preferences: Customer value is close- of firm competitiveness (Dhevika and ly related to whether a customer likes Subramani, 2012; Heung, 2008; Stan, or favors a product. Consumers pur- Evans, Wood, and Stinson, 2008). Pre- chasing recycled paper furniture, viously, scholars discussed customer which was designed with the aim of value mainly from a perspective of eco- environmental protection, may like nomic benefits. For example, Zeithaml or favor such a product, deriving (1988) defined customer value as cus- greater value because they identify tomers receiving what they desire in a with the aim of its design. product, receiving a product at a low 3. Value is relativistic: The value of a price, receiving a high-quality product product is determined relative to that for the price paid, or receiving some- of other products. The same product thing of equal value in return for what or service can evoke various feelings was paid. From a broader perspective, in customers because the concept of Holbrook (1999) proposed four charac- price is relative. Therefore, for recy- teristics of customer value: experiential, cled paper furniture consumers, alt- preferential, relativistic, and interactive. hough environmentally friendly re- Although these characteristics were ap- cycled paper furniture is generally ply to the context of general products, set at a higher price than is tradition- they remain relevant for recycled paper al furniture with the same function, furniture products. Therefore, on the the value derived from environmen-

9 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 tal protection is higher than that de- ANP questionnaire. From 2,667 valid rived from purchasing less expensive customer profiles offered by Companies furniture. F and Y (two renowned green product 4. Value is interactive: A product must companies in Taiwan), this study identi- involve customer interaction. If cus- fied the top 10 customers with the high- tomers do not participate in this in- est number of purchases over the past 10 teraction, the product gains no sub- years. These customers were interviewed; stantive value. Recycled paper furni- data from the questionnaire was collect- ture is an increasingly innovative ed and analyzed using Super Decision product because of its continual in- software. teraction with customers. Thus, this type of furniture is continually being The following steps were per- designed to meet various consumer formed according to Nagai (1989, 2001) needs. and Chu, Chiang, Liang and Hwu (2012):

After clarifying the relationship be- 1. Use the 5W1H model to generate tween Holbrook’s assertion and the cus- key Kansei words by comparing the tomer value derived from recycled paper basic characteristics of recycled pa- furniture products, it was observed in per furniture and traditional wooden this study that the value of a product is furniture; arrange these words into a determined by the subjective consumer hierarchy according to their value. perceptions. Therefore, this study exam- 2. Use the Kansei words as elements of ined the subjective perceptions of recy- customer value regarding recycled cled paper furniture product consumers. paper furniture:

Materials and Methods A=(a ), i = j = ,2,1 L,n (1) ij Consumers have differing subjec- Subsequently, it was determined tive feelings toward the value derived whether there existed a relationship be- from the same product (Holbrook, 1999; tween these elements, assumed to be ai Lin, Lee, and Su, 2010). Because interpretive structural modeling (ISM) and and aj , and matrix A; aij =1 if a rela- analytic network processes (ANPs) are tionship exists and a = 0 otherwise. effective in analyzing subjective per- ij spectives, this study utilized the 5W1H L model proposed by Nagai (1989, 2001) a11 a12 a13 a1n   L  to interview five marketing managers in a21 a22 a23 a2n  Taiwan working in the field of recycled A =[a ] = a a a L a  (2) ij  31 32 33 3n  paper furniture. A causal association M M M O M path regarding customer value factors    L  for recycled paper furniture was con- an1 an2 an3 ann  structed on the basis of ISM; this causal association path was converted into a After examining the elements to de- customer value hierarchy to design an termine whether a relationship existed

10 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 between each pair of elements, the adja- cency matrix and reachable matrix were λmax − n calculated to construct the causal associ- C I.. = (5) n −1 ation path regarding customer value fac- Consistency: CI ≦ 0.1 tors for recycled paper furniture. C I.. C.R. = (6) B = A+ I (3) R.I. Consistency: CR ≦ 0.1 B n = B n+1 ≡ T (4) 3. Calculate the priority of the values in the hierarchy to generate an optimal The causal association paths were solution. then converted into a customer value hierarchy for recycled paper furniture for Results and Discussion use in the ANP, and an interview questionnaire was designed to collect data Five marketing managers were in- from customers. According to Saaty terviewed to determine their perceptions (1996, 1999, 2001a, 2001b, 2005), and in comparing recycled paper furniture Saaty and Vargas (1998), the following and traditional wooden furniture in order steps were performed: to identify the characteristics of the Kan- sei words and compose a hierarchy of 1. Convert the causal association path these words according to their value (See into a customer value hierarchy. Table 1). 2. Using the consistency ratio (CR) and consistency index (CI) to measure To determine whether there was a the consistency of each factor and causal relationship among the 13 Kansei construct a super matrix by applying words, these words were compared in a vector of weights and pairwise pairs to create the following customer comparison matrix. value factor causal association matrix for recycled paper furniture (1 = causal as-

C1 C 2 C n sociation; 0 = otherwise): eeeeLL ee 111LLLm1 212 m 2 nnm 1 n e11 e12 W11 W 12 W1n  C1 M L As illustrated by Table 2, this study e   1m1   generated the customer value factor e21 e W W W  causal association path for recycled pa- C2 22 12 22 2n W = M L  per furniture shown in Figure 1. e2 m M 2   M   e n1 M M MMM M C n en 2   M e W WL W  nm n n1 n 2 nn 

11 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 Table 1. Kansei word coding

Strength The character- Coding Recycled paper Traditional wood- 5W1H of the istic of Kansei furniture en furniture degree words

High social ex- Low social expec- Belonging >> Belonging sense 1 pectations tations sense

Comfortable feel- Happy feeling. >> Pleasure sense 2 Pleasure sense ing

What Flaunt psycholog- Non flaunt psycho- >> Pride sense 3 Pride sense ical logical

Rare >> Common Scarcity 4 Scarcity

Material in par- Traditional wooden > Uniqueness 5 Situation ticular material

Convey seller Convey seller con- Social contri- >> Situation 6 concept clearly cept less clearly bution

Normally as own Concept identi- Often as a gift > Gifts giving 7 use ty Where Easy to cause Hard to cause oth- Social Contribu- >> 8 Peer influence others curious ers curious tion

Renewable re- Less renewable >> Concept Identity 9 Uniqueness sources concept resources concept

Where Multifunction. > Single function. Functionality 10 Gifts giving

Being influenced Start using by one- Who >> Peer Influence 11 Functionality by others to use. self usually.

Design creativ- Ideas flexible > Ideas traditional Design creativity 12 ity How Reducing trees Some artificial Environmental Environmental > 13 felled planting protection protection

In the next step, the customer value 2. was used to design an ANP question- factor causal association path for recy- naire, which was used to interview 10 cled paper furniture was converted into customers who made the highest number the following customer value hierarchy of purchases over the last 10 years from for recycled paper furniture: the 2,667 valid customer profiles. Data from the questionnaire responses were The customer value hierarchy for employed in the analysis, which was recycled paper furniture shown in Figure

12 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 Table 2. Customer value factor causal association matrix for recycled paper furniture

Kansei word 1 2 3 4 5 6 7 8 9 10 11 12 13

Belonging sense ● ● ● ● ● ● ●

Pleasure sense ● ● ● ● ● ●

Pride sense ● ● ● ● ● ●

Scarcity ●

Situation ● ●

Social contribution ● ● ●

Concept identity ● ● ●

Peer influence ● ● ●

Uniqueness ● ●

Gifts giving

Functionality

Design creativity

Environmental protection performed using Super Decision soft- values: concept identity, peer pres- ware. The analysis results are shown in sure, situation, scarcity, uniqueness, Tables 3 and 4. and social contribution. The third- level hierarchy values, namely the According to the causal association senses of belonging, pleasure, and paths for the customer value factors, this pride, are antecedents of all customer study yielded the following preliminary values. findings: 2. When making purchase decisions 1. Senses of belonging, pleasure, and for recycled paper furniture, con- pride are antecedents of all customer sumers are affected by environ- value factors. The causal association mental influences; those influ- paths suggest that the basic values ences originally proposed by En- driving consumers to purchase recy- gel et al. (1995) were related to cled paper furniture are environmen- general products rather than re- tal protection, design creativity, and cycled paper furniture, which is functionality; these first-level hierar- clearly aimed at environmental chy values were derived from the protection and thus has a unique following second-level hierarchy characteristic in comparison with

13 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Figure 1. Customer value factor causal association path for recycled paper furniture

3. other products. Generally, con- people in taking measures to protect sumers purchase recycled paper the environment. Similarly, consum- furniture products because these ers of recycled paper furniture prod- products promote environmental ucts are influenced by a sense of en- protection. However, in addition vironmental protection, which drives to values associated with envi- them to purchase and use recycled ronmental protection, this study paper products. derived four other values from the customer value hierarchy: 1. Peer influence (categorized as sense of identity, peer pressure, “peer influence” among envi- situation, and sense of belonging. ronmental influences): People These values are similar and are tend to seek to meet the expecta- closely related to the environ- tions of other people. Similarly, mental influences proposed by consumers value the opinions of Engel et al. (1995). group leaders. When opinion leaders support the purchase of These four values are further dis- recycled paper products, con- cussed as follows: sumers are subconsciously affected and therefore seek to pur- Sense of identity (associated with chase and use recycled paper “culture” among environmental in- furniture products. fluences): When recognized by most 2. Situation (categorized as “situa- people in a society, a sense of envi- tion” among environmental in- ronmental protection develops into a fluences): Whether consumers culture, which further engages more purchase or use recycled paper

14 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Table 3. Factor weights under the first-level hierarchy

Samples A B C D E F G H I J Mean Factors

Environmental protection 0.65 0.74 0.73 0.70 0.62 0.43 0.56 0.50 0.50 0.20 0.56

Concept 0.32 0.21 0.22 0.26 0.14 0.50 0.12 0.19 0.45 0.10 0.25 identity

Peer influ- 0.32 0.31 0.37 0.45 0.28 0.31 0.11 0.49 0.05 0.59 0.33 Each factor weight under ence environmental protection Situation 0.32 0.44 0.37 0.26 0.55 0.14 0.67 0.21 0.25 0.06 0.33

Social con- 0.04 0.04 0.04 0.04 0.04 0.04 0.10 0.11 0.25 0.25 0.09 tribution

Design Creativity 0.06 0.07 0.10 0.12 0.11 0.27 0.11 0.17 0.17 0.27 0.14

Concept 0.26 0.22 0.22 0.22 0.15 0.54 0.05 0.22 0.22 0.06 0.22 identity

Peer influ- 0.35 0.35 0.35 0.35 0.47 0.25 0.23 0.47 0.35 0.26 0.34 ence Each factor weight under design creativity Situation 0.26 0.35 0.35 0.35 0.30 0.10 0.59 0.22 0.13 0.04 0.27

Uniqueness 0.03 0.03 0.03 0.03 0.03 0.04 0.05 0.04 0.47 0.53 0.13

Social con- 0.09 0.03 0.03 0.04 0.04 0.06 0.08 0.04 0.14 0.12 0.07 tribution

Gifts giving 0.24 0.12 0.06 0.05 0.04 0.04 0.29 0.17 0.17 0.04 0.12

Concept 0.80 0.80 0.80 0.77 0.77 0.71 0.05 0.08 0.47 0.28 0.58 identity Each factor weight under Scarcity 0.07 0.07 0.08 0.16 0.07 0.23 0.16 0.05 0.07 0.06 0.10 gifts giving Social con- 0.12 0.12 0.02 0.07 0.16 0.06 0.07 0.66 0.47 0.66 0.24 tribution

Functionality 0.06 0.07 0.10 0.12 0.23 0.27 0.04 0.17 0.17 0.50 0.17

Peer influ- 0.90 0.90 0.90 0.89 0.08 0.75 0.88 0.50 0.86 0.13 0.68 Each factor weight under ence functionality Uniqueness 0.10 0.10 0.10 0.11 0.17 0.25 0.13 0.50 0.14 0.87 0.25

15 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 Table 4. Factor weights under the second-level hierarchy

Samples A B C D E F G H I J Mean Factors

Belonging sense 0.82 0.80 0.82 0.80 0.77 0.74 0.66 0.04 0.29 0.06 0.58

Concept identity Pleasure sense 0.09 0.12 0.09 0.12 0.16 0.19 0.06 0.12 0.66 0.71 0.23

Pride sense 0.09 0.07 0.09 0.07 0.07 0.06 0.28 0.07 0.05 0.23 0.11

Belonging sense 0.82 0.82 0.80 0.79 0.74 0.71 0.71 0.77 0.28 0.28 0.67

Peer influence Pleasure sense 0.09 0.09 0.12 0.15 0.19 0.23 0.06 0.16 0.66 0.66 0.24

Pride sense 0.09 0.09 0.07 0.07 0.06 0.06 0.23 0.07 0.06 0.06 0.09

Belonging sense 0.82 0.09 0.79 0.82 0.79 0.66 0.74 0.66 0.28 0.16 0.58

Situation Pleasure sense 0.09 0.08 0.15 0.09 0.15 0.28 0.06 0.28 0.65 0.77 0.26

Pride sense 0.09 0.12 0.07 0.09 0.07 0.06 0.19 0.06 0.07 0.07 0.09

Belonging sense 0.82 0.79 0.77 0.77 0.77 0.06 0.19 0.16 0.06 0.20 0.46

Scarcity Pleasure sense 0.09 0.15 0.07 0.07 0.07 0.23 0.06 0.07 0.28 0.20 0.13

Pride sense 0.09 0.07 0.16 0.16 0.16 0.71 0.74 0.77 0.66 0.60 0.41

Belonging sense 0.80 0.80 0.77 0.77 0.74 0.19 0.15 0.16 0.06 0.10 0.46

Uniqueness Pleasure sense 0.07 0.10 0.07 0.16 0.06 0.06 0.07 0.07 0.28 0.26 0.12

Pride sense 0.12 0.10 0.16 0.07 0.19 0.74 0.79 0.77 0.66 0.64 0.42

Belonging sense 0.82 0.80 0.82 0.80 0.80 0.81 0.74 0.57 0.06 0.74 0.70

Social contribution Pleasure sense 0.09 0.12 0.09 0.12 0.12 0.08 0.19 0.29 0.59 0.19 0.19

Pride sense 0.09 0.07 0.09 0.07 0.07 0.12 0.06 0.14 0.34 0.06 0.11

3. products is determined by the with “peer influence” among envi- following factors: a sense of en- ronmental influences): In a group or vironmental protection and satis- community where members often factory purchasing environment, make group purchases of and use re- the innovativeness and creativity cycled paper furniture, newcomers of the design, the seller’s under- often develop the same purchasing standing of the concepts applied habits to establish a sense of belong- by the furniture designer, and an ing. effective transfer of these concepts to the consumers. Using the ANP approach to analyze 4. Sense of belonging (associated the questionnaire data and calculate the 16 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Figure 2. Customer value hierarchy for recycled paper furniture

weights of the value factors, it was de- ronmental protection, the main factors termined that environmental influences affecting their willingness to purchase are crucial to consumer decisions to pur- such products are culture, opinion lead- chase recycled paper furniture. Accord- ers, situations, and sense of belonging. ing to the weights under the first-level Because of these environmental influ- hierarchy, environmental protection ac- ences, consumers are willing to pay counted for the highest weights, suggest- premium prices for recycled paper furni- ing that customer values driving the pur- ture, regardless of the lower prices of chase of recycled paper products are traditional wood furniture. associated with a sense of environmental protection. Conclusion

However, examining the weight Previously, recycled paper furniture values under the second- and third-level was positioned in the market mostly to hierarchies revealed that the values with convey a sense of environmental protec- higher weights (including sense of iden- tion. However, because environmental tity, peer influence, situation, and sense influences have become a major factor in of belonging) are associated with or can influencing consumer willingness to be categorized as environmental influ- purchase recycled paper furniture prod- ences. This suggests that although con- ucts, such furniture products must be sumers of recycled paper furniture pur- repositioned in the market because a sue values derived from a sense of envi sense of environmental protection is no 17 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 longer the sole factor concerning their ate high-quality purchasing and purchase. According to the four values stress-free settings to provide en- associated with environmental influ- vironments and services that en- ences, this study offers the following hance consumer willingness to conclusions: purchase their products. 4. Recycled paper furniture compa- 1. Recycled paper furniture companies must collaborate to set new nies must create a new consumer trends: Such companies should culture: Recycled paper furniture focus on promoting their prod- companies must cooperate with ucts within communities or nongovernmental organizations groups to build supportive and that support environmental pro- cooperative relationships and tection to influence consumer collectively create a new mean- lifestyles toward use of recycled ing regarding the purchase of re- paper products and incorporate a cycled paper furniture. This new sense of environmental protec- meaning should not only repre- tion into a new consumer culture sent a sense of fashion and per- to further influence consumer sonal taste, but also create a purchasing decisions. sense of group identify among 2. Recycled paper furniture compa- people who purchase recycled nies must strengthen their coop- paper furniture. erative relationships with opinion leaders from various groups: Implications for Policy and Practice Opinion leaders tend to exert a strong influence on most mem- The findings of this study have the bers of corresponding members. following implications: Similarly, recycled paper furniture companies that cooperate 1. Distribution and promotion strat- with opinion leaders from differ- egies: Recycled paper furniture ent groups can produce market- companies can refer to the factor ing results that are more substan- weights in the proposed customer tial with less effort. For example, value hierarchy to develop ap- companies can provide relevant propriate distribution and promo- resources to popular bloggers tion strategies for their target who have a strong influence on markets by adopting concentrat- public purchasing behaviors, ed marketing methods. thereby promoting word-of- 2. Brand management: Recycled mouth marketing. paper furniture companies must 3. Recycled paper furniture compa- continue to invest in brand man- nies must construct satisfactory agement resources. Although re- purchasing situations (environ- cycled paper furniture exhibits ment): For both virtual and brick- characteristics that are more dis- and-mortar stores, recycled paper tinct compared with those of furniture companies should cre- more general products, imitating

18 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 a brand’s strategy is considerably sumers, a recycled paper furni- more difficult than is imitating its ture company should not neglect products. Thus, if recycled furni- the importance of improving ture companies focus on product functionality when for- strengthening their brand and en- mulating research and develop- hancing brand recognition, they ment strategies. This is because are more able to increase public the consumers generally consider acceptance of their innovative the attribute of recycled paper products and considerably ex- furniture products with excellent pand their market share. functionality as an essential re- 3. Financial strategies: A company quirement. can possess and be in control of resources only up to a certain Suggestions limit. Therefore, it must consider how to generate maximum prof- In this study, it was observed that its from its investments. In man- the mean weights for sense of pride were aging a recycled paper furniture 0.41 and 0.42 under the categories of company, a company may regard scarcity and uniqueness, respectively. numerous variables as critical Although this factor did not have the and thus designate budgets in this highest weight among all of the factors, regard to allow for strategy plan- future studies should explore sense of ning. Furthermore, designating pride to determine the extent to which it budgets only for key value fac- affects consumer purchasing decisions tors enables a company to max- regarding recycled paper furniture. In imize resources for each desig- addition, when formulating strategies, nated budget. recycled paper furniture companies 4. Research and development strat- should consider the factors of unique- egies: Although the effect of en- ness and scarcity and adopt limited- vironmental influences is greater edition strategies. than that of product functionality for recycled paper furniture con-

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22 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

DEVELOPING DECISION-MAKING SUPPORT SYSTEM USING RISK EFFICIENCY ON BUILDING PROJECTS IN TAIWAN

Jui-Feng Liu Ph.D. Candidate, Graduate School of Engineering Science and Technology National Yunlin University of Science & Technology, Taiwan R.O.C. *Corresponding Author: [email protected]

Tsung-Chieh Tsai Associate Professor, Department of Construction Engineering National Yunlin University of Science & Technology, Taiwan R.O.C.

Abstract

Many studies in risk management have been focused on management process, contract relation, and risk analysis in the past decade, but very few studies have addressed project risks from the perspective of risk efficiency. This study started with using Fault Tree Analysis (FTA) to develop a framework for the decision-making support system of risk management from the perspective of risk efficiency, in order for the support system to find risk strategies of optimal combination for the project manager by the trade-off between project risk and cost of project strategies. Comprehensive and realistic risk strategies must strive for optimal decisions that minimize project risks and risk strategies cost while addressing important data such as risk causes, risk probability, risk impact and risk strategies cost. The risk management in the construction phase of building projects in Taiwan upon important data has been analyzed, that provided the data for support system to include 247 risk causes. Then, 17 risk causes were extracted to demonstrates the decision-making support system of risk management from the perspective of risk efficiency in building project of Taiwan which could reach better combination type of risk strategies for the project manager by the trade-off between risk cost and project risk.

Keywords: risk management, risk strategy, Fault Tree Analysis, risk efficiency, decision-making support system

Introduction The project managers should operate the project in the uncertainties of environ- The construction industry has be- mental of conditions, and control the come more uncertain and complex. risk of schedule delay or cost overrun.

23 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 As a result, the need for risk manage- pected performance”, in which “ex- ment has increased. pected performance” means a best estimate of what should happen on average, Many studies in risk management and “risk” means “the possibility of ad- focused on management process, con- verse departures from expectations” tract relation and risk analysis in the past (Chapman, C. and Ward, S., 2004). decade (Tsai T.C and Yang M.L. 2009). The application of this concept can al- Particularly in Taiwan, most risk man- low project managers to distinguish agement studies focused only on the good luck from good management, and relationships between stakeholders and bad luck from bad management. the locations of responsibility, and were merely qualitative discussions (Wang, Review of Risk Management in Taiwan M.T. Chou, H.Y., 2003), (Charoenngam, C. and Yeh, C.Y., 1999). As risk man- Risk management in the construction agement in Taiwan was generally pro- phase of building projects in Taiwan has cessed empirically at jobsites, a theoreti- been analyzed that indirectly elicits im- cal algorithm was therefore necessary portant data such as risk causes, risk for the analysis of the reality of risk probability, risk impact. A brief review management, so that risk strategies of the data is presented here. A detailed could be set up and jobsite project risks description of the data can be found in could be quantitatively clarified in the Tsai (2009). construction phase of risk management. Tsai (2009) adopted risk causes and In order to remedy the deficiency of categories from Tsai (2001), who brain- risk management in Taiwan, there are stormed with 40 project managers to two main purposes. The first is to extract yield 650 clearly defined risk causes the most important risk causes in Tai- related to risk results and project stages wan. The second is to investigate the in the construction phase (Tsai T.C and correlations among risk cause, risk strat- Yang M.L., 2009), (Tsai, T.C., Furusaka, egy, and risk strategy cost while apply- S. and Kaneta, T., 2001). According to ing Fault Tree Analysis (FTA) and Reli- Table 1, 105 risk categories were found ability Graph Analysis (RGA) to devel- containing 247 risk causes generalized op a framework for the decision-making from the 650 originally suggested risk support system of risk management from causes. Then, the accumulation contrib- the perspective of risk efficiency. This is uting ratio of risk and distance of con- done in order for the support system to trollability are utilized as the two pro- find the optimal combination type of posed criteria to extract the consensus risk strategies for the project manager by critical risks of practitioners. the trade-off between project risk and cost of project strategies. The first pur- The data are analyzed from multiple pose for this study has already been ana- points of view to explore the co- rela- lyzed in Tsai (2009), this study is fo- tionship among risk cause, risk strategy, cused on support system. risk result and project stage, and to clarify the risk mechanism and the realities A basic definition of “risk effi- of risk management. It was found that ciency” is simply “the minimum risk 17 risk causes were significance ranking decision choice for a given level of ex- of risk with temporal sequencing change

24 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 over different project stages (e.g. before 13. Gb202.Incompetent subcontractor commence of construction, structure work, finish work and after final inspec- 14. Ha602.Not using safety belt / safety tion) and project risk result over differ- measure properly ent project problem (e.g. safety problem, schedule delay, cost overrun, low quality 15. Hc501.Too many engineering and reputation down). These risk causes change and too slow instruction are listed as below. fails approval on project amount

1. B201.Higher construction cost due to 16. Hd402.Payment-related dispute material price rise 17. Hd801.Client’s financial problem 2. B901.Low profit due to unexpected low market demand According to above analysis, the extracted 17 risk causes, which were 3. B1001.Low profit due to excessive important in temporal sequencing, competition change over different project stages and project risk result over different project 4. C102.Contract amount not propor- problem. The 17 risk causes would be tionate to amount of work con- used in the questionnaire was built to tracted investigate the changes of the additional risk strategy; the correlations among risk 5. C401.Unspecified client/ designer/ cause, risk strategy, sub-contracting, contractor’s liability strategy cost, and probability and impact of the 17 risk causes. 6. C402.Liability of incomplete design was carried over Investigation

7. C601.Relative engineering change The questionnaire survey was sent to cost is overlooked 50 site managers with 10–15 years experience of building construction in Cen- 8. C902.Drawing specifications not in- tral of Taiwan from August to Septem- cluded in estimate ber 2015. Thirty-three effective samples were collected to develop a framework 9. D605.Administration management for the decision-making support system having different interpretations of risk management (as shown in Table on regulations 1).

10. D1302.Malpractice of subcontract- In this research, risk strategy was ing for subcontractor referred by used to reduce risks. However, managers the client or local representative always select simply risk strategy of construction plan rely on experience. 11. E903.Neighboring community Standard risk strategy means single risk claims extra compensation strategy; it was listed in the construction plan of the building project. Additional 12. F709.Construction process fails to risk strategy means numbers of risk follow schedule

25 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 Table 1. The co-relationships among risk strategy, strategy cost of 17 risk causes O AS OP C Pa SS C Pb No i ir ir ir ir i i i Allocate reasonable amount of reserve for construction expense Proprietor 69.87 0.36 1 B201 Allow reasonable price hike in material cost estimation as contingent buffer Headquarters 88.83 0.26 Conduct thorough market price evaluation 214.94 0.55 Conduct market price survey in pragmatic manner Headquarters 16.96 0.40 Improve the quality of construction Site office 74.41 0.29 Apply scrutiny in cost-related spending, while upholding construc- 2 B901 177.71 0.34 Fully knowledgeable about the market Headquarters 38.11 0.32 tion project quality 3 B1001 Cost analysis and price estimation Headquarters 18.26 0.31 Set reasonable selling price and competition mechanism 207.52 0.47 Implement contingent plans Headquarters 51.75 0.31 4 C102 Cost analysis and reasonable price estimation 150.57 0.41 Cost analysis and estimation Headquarters 15.10 0.31 Specify the liability of each party involved in the contract Proprietor 11.68 0.33 5 C401 Have the relevant liability clearly specified in the contract 103.31 0.48 Hold periodical sessions for contract-related affairs discussions and liability definition Proprietor 9.21 0.40 Reviews on relevant information and contribute suggestions Headquarters 18.64 0.36 Allow sufficient communication to reduce pre-construction unce r- 6 C402 100.91 0.50 Request the designing unit to provide drawing and construction manual Designer 11.16 0.36 tainty 7 C601 Specify the design modification fees in the contract Proprietor 74.93 0.33 Have the relevant liability clearly specified in the contract 73.96 0.45 8 C902 Reasonable estimation on construction cost Headquarters 21.28 0.39 Detect the cause prior to construction 231.68 0.78 9 D605 Specify the liability in the contract in case of regulation change proprietor Proprietor 9.82 0.29 Set up a law information centre 33.96 0.38 10 D1302 Implement feasibility evaluation Headquarters 15.20 0.20 Implement a sound communication system 61.01 0.34 Implement protective measures Site office 24.98 0.35 Verify the title of the premise prior to construction while build 11 E903 Provide information session prior to construction and k eep communication open with local 85.74 0.53 Site office 13.68 0.33 friendship with the local residents residents Respond and tackle problems in timely manner Site office 18.83 0.36 Improve the competence of construction planning and progress 12 F709 99.47 0.50 Lay out plans for construction projects with progressing schedule Site office 18.86 0.34 scheduling as well as managing ability Conduct stringent qualification review for contract bidding parties Headquarters 13.09 0.35 Have the qualification requirements clearly defined, and implement 13 Gb202 76.69 0.52 Respond and tackle problems while working on solution Site office 10.72 0.38 bidding party evaluation Tighten up surveillance Site office 10.00 0.30 14 Ha602 Provide training programs on workers safety on regular basis 55.90 0.50 Further education on personnel safety Site office 8.58 0.32 15 Hc501 Proprietor requested to simplify engineering change procedure and paperwork Headquarters 10.30 0.36 Arrange to have the clause specified in the contract 54.26 0.53 Keep close contact with the proprietor Headquarters 24.03 0.31 Carry out the construction plan as per the schedule, and writing out 16 Hd402 85.85 0.41 Report expense in timely manner, while allowing periodical account settlement Site office 17.90 0.28 expense slip in timely manner 17 Hd801 Rely on bank guarantee Proprietor 44.51 0.25 Have the mechanism of the payment terms stipulated in the contract 92.08 0.34

Oi : risk cause i, i=1,…,247 AS ir : additional risk strategy r for risk cause i, r=1, …, m

OP ir : contractor who executes additional strategy r for risk cause i Cir : the average cost of additional risk strategy r for risk cause i (thousand)

Pa ir : after additional risk strategy r for risk cause i, the average probability of risk cause i SS i : standard risk strategy for risk cause i

Pb i : the average probability of standard risk strategy for risk cause i Ci : the average cost of standard risk strategy for risk cause i (thousand)

26 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 Top Event T (Risk Occurrence)

OR Gate

Failure Mode A1 A2 (Risk Mode) AND Gate

Failure Cause O1 O2 O3 O4 (Risk Cause)

Figure 1. Legend of Fault Tree (FT) and risk cause

strategies; it may contain two or three factors by Fault Tree (FT) (See Figure 1). above risk strategies to reduce risks. For FT can establish a causal scenario that is instance, standard risk strategy of “E903. called accident sequence, which is com- Unexpected community compensation posed of various failure interactions claim” was “verify the title of the prem- across devices, software, materials, and ise prior to construction while build humans. When the probabilities of fail- friendship with the local residents” but ure causes are given as input, the occur- additional risk strategies were “imple- rence probability of top event can be ment protective measures” and “provide assessed, and the quantitative/ qualita- information session prior to construction tive importance of failure causes can be and keep communication open with lo- identified in the mean time. cal residents” Minimal Cut-Sets Development of Quantitative Analysis In order to develop the quantita- The main purpose of decision- mak- tive analysis of this study, FTA was used ing support system employing risk effi- to analyze project risks. Normally, there ciency in building project was to devel- are a number of cut-sets in an FT, but op quantitative analysis, and to achieve minimal cut-sets mean these sets are the this purpose. This research used Fault necessary and sufficient conditions for Tree Analysis (FTA) to analyze project the occurrence of top event. The mini- risk. mal cut-sets of Figure 4 can be identified by using Boolean algebra to be minimal Fault Tree Analysis (FTA) cut-sets {O 1}, {O 2} and {O 3, O 4}. In the premise in which the basic events of risk FTA is an analytical method for the causes are independent from one another, finding the major causes of failures and the probability of risk occurrence is de- to assess the probabilities of failures in fined as Equation (5) in FTA (Inoue, I., systems or facilities. It is widely used in 1979). As the interpretation in minimal safety engineering of mechanic and cut-sets, the meaning Equation (1) is aviation industry. Basically, it uses logic when every risk cause i in any minimal gates of AND gate and OR gate to de- cut-set Kj (j=1, …, k) occurs, then risk scribe the relationship of these failure will occur.

27 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 used to analyze the reliability of systems k in production. Some redundancy devices g()q = C∏qi may be added to increase the reliability j=1 i = K j of such systems to an acceptable level. where: Further, the character of dual structure between FT and RG is facilitated. For g(q) : probability of risk occurrence example, the failure causes of O 1, O 2, O 3 qi: probability of risk cause i including and O 4 in the FT of Figure 1 can be minimal cut-sets Kj transferred to the activities labeled with R1, R 2, R 3, and R 4 in the RG of Figure 2. Dual Structure of FTA and RGA In reliability engineering, RGA is

R1 R2 R3

Figure 2. Reliability Graph

partial FT as a cut-set or a basic event of By comparing the failure probabilities of top event. Thus, the analysis level is different FT’s, the effectiveness of risk close to the independent risk causes of strategies can be assessed. X1 to X6.

Analytical Procedures Thus, the project risk reduction and additional risk strategies cost can be Risk Identification and Risk Relationship calculated, by the additional risk strategy before and after. The reduction and The risk causes of the projects can be additional cost would be used to evalu- categorized into internal risks and exter- ate risk strategy efficiency. nal ones (Zhi, H., 1995). Normally, the k rational plans are used to deal with the g(Pb ) = C∏ Pb i  internal risk in project management, and j=1 i∈K j emergent plans are adapted to external where: risk of external environment. So the risk g(Pb) : before additional risk strategy r, occurrence of project is associated with the probability of project risk occurrence management and failure of adaptation to Pb i: before additional risk strategy r, the external environment (Figure 3). In or- average probability of risk cause i der to clearly interpret and demonstrate k: amount of minimal cut-sets in an FT the analysis steps, this research uses the Kj: minimal cut-sets j in an FT m method of modularization that takes Pa ir Pa i = Pb i ∏  r=1 Pb i

28 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 where: Pa i: modified the probability of risk Framework of Decision-Making cause i Support System Pa ir : after additional risk strategy r, the average probability of risk cause i The framework of the decision- m: numbers of risk strategies making system in risk management was k proposed from two viewpoints of data g(Pa ) = Pa C∏ i search and risk analysis, as illustrated in j=1 i ∈ K j Figure 4. where: g(Pa) : after additional risk strategy, the Risk Data Search System probability of project risk occurrence n n m The system of data search was com- SC = ∑SC i = ∑∑Cir  i=1 i=1r = 1 posed of three parts, which were “risk where: data base”, “analysis support”, and SC : amount of the cost of risk strategy, “presentation of search”. In order for the used to evaluate risk cause decision-making system to be used easi- SC i: the cost of risk strategy, used to ly at the jobsite, the spreadsheet (for evaluate risk cause i instance, Microsoft Excel) was mainly Cir : the average cost of additional risk adopted as the interface for the presenta- strategy r for risk cause i tion of search and analysis. The data was n: numbers of risk cause i retrieved form the database by the analysis support designed by VBA (Visual Comparing the Effectiveness of Basic for Application Edition) pro- Risk Strategies gramming, and the result was shown on the spreadsheet in a dialogue mode. As shown in Table 2, many risk The risk data retrieval was divided into strategies were used to deal with various hierarchies, and these hierarchies were risk causes to reduce project risk. For linked mutually. First, some elements of instance, risk strategies “Develop alter- risk causes concerning the project were native plan” and “Cost analysis and es- retrieved. For instance, risk causes often timate” were used to deal with designer- generated for some types of projects related risk cause “C102. Contract could be selected from the elements of amount unproportionate to amount of project usage, project scale, and project work contracted” and “Hc501.Too many location, etc., and then possible risk re- engineering change and too slow in- sults and the value of the risk reduction struction fail project amount to be con- were presented by the risk strategies firmed”, and the combination type of often used for these risk causes. In addi- risk strategies would turn out to be tion, the scenario of the trade-off of risk “Proprietor requested to simplify engi- and cost in the project was simulated neering change procedure and paper- from the relations among the risk, the work”, etc. cost of the forecast damage, the risk strategies, and the strategies cost, etc. The results of the calculation from through the selection in a dialogue mode. preparing and analyzing FT along with In other words, a primary/qualitative the risk strategy cost and the amount of reduction by the risk strategy could be used to evaluate the risk strategies.

29 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 Project risk

A1: Failure of project management A2: Failure of adaptation to external environment

A4: Failure of project A3: Failure of execution management X5: Failure of adaptation to predictable factors

X3: Failure of X1: Failure X6: Failure of ordinary management of planning adaptation to unpredictable

X4: Failure of X2: Failure of exceptional management execution

Figure 3. FT of General Model analysis concerning each risk occur- cess was a process for which the alter- rence cause in the project risk could be native provided by certain constrained preceded according to historical data. conditions.

Risk Analysis System First, the data used for the analysis should be identified by the elements The system of risk analysis was concerning the project. For instance, composed of three parts, which were the elements might be the project us- “process of optimization”, “analysis age, the project scale, and the project support”, and “expression of search/ location etc. The risk data about risk analysis”. The result of the analysis causes, often generated for such pro- was presented on the spreadsheet. The ject types, should be inputted. Next, computational algorithm of the data the user decided whether to use histor- exchange with the database in the op- ical data of database or not. And, the timization process was supported user should determine whether to use mainly by using the VBA program- the relations provided by the database ming in the analysis support. Optimi- among the risk cause, the cost of the zation was divided into two levels, of forecast damage, the risk strategies, which the first was called partial opti- and the strategies cost, etc., or to simp- mization, which was used to select risk ly reset the data. In addition, the con- strategies against individual or multi- strained conditions concerning the pro- ple risk causes. The second level of ject and the objectives of the analysis optimization was called total optimiza- were set up with the risk strategies tion, which was used to search the being set at the condition of certain proper risk strategies by the combina- cost or the necessary cost; for instance, tion type of constrained conditions of in order for the project risk generated the project risk. The optimization pro- by the quantitative analysis to be kept

30 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 at certain level. As to the question of analysis system mentioned above. The whether the results meet the demands, condition was to search for the combi- it all depended on the setting of such nation type of risk strategies, with the conditions. project risk reduction being kept above 0.1, and the risk strategy cost below Finally, the system would show the US 250 thousand. Figure 5 showed the alternatives that meet the conditions of risk strategy search result, and was the constraints, thus providing support compared with all other combination for the user in decision-making. types of risk strategy, while #8 combination type appeared to allow the larg- Selection of Risk Strategies est amount of potential for the reduction of project risk, and #18 combina- In order to reduce project risk, the tion type appeared to allow the small- combination type of risk strategies and est amount of potential. the cost were evaluated by the risk

0.24 14 0.22 13 9 6 11 10 7 8 12 0.20 15 17 0.18 16 3 1 2 0.16 4 0.14 0.12 Reduction of project Reductionrisk of project 18 19 20 21 0.10 50 100 150 200 250 Risk strategies cost (thousand)

Figure 5. Combination Types of Risk Strategies

Table 3. Risk Strategies of Type 13

Risk Cause Risk Strategy Subcontractor Implement contingent plans headquarters C102. Cost analysis and evaluation headquarters Reasonable estim ation on C902. headquarters construction cost Conduct feasibility evalua- D1302. headquarters tion Proprietor requested to Hc501. simplify engineering change headquarters procedure and paperwork Implement protective Site office measures Provide information session E903. prior to construction to Site office improve communication with local residents

31 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 As to the question of what combina- On the other hand, it should be noted tion type was the best, the answer might that optimal risk strategies were not only vary from person to person. Normally, found in technical aspect but also in #13 combination type of risk strategy other aspects of construction projects appeared to require the least cost while such as contract, safety and environment, allowing the most reduction of project partners (e.g. designers), if the goal of risk; therefore, it could be regarded as improvement on risk management was the best combination type. Table 3 illus- going to be reached. trated risk strategies of Type 13 combination, which is believed to be the opti- Conclusions mal type of combination. Project managers are normally ac- In a particular case where the man- customed to conventional ways of pro- agement was expected to apply risk ject operation and they tended to regard strategy management by spending about project risks as accidents. When a pro- 5 million dollars to reduce 0.22 of the ject is run under the uncertainty of the project risk, the types of risk strategy construction environment, the managing combinations for the contract-related of diverse situations at jobsite may lead risk causes of “C102. Contract amount is to difficulties such as schedule delay and not suitable to scope of work” included risk cost overrun, making project opera- “Develop alternative plan” and “Cost tion even more complex. analysis and estimate”, with only one type of risk strategies combination “im- In this research, the fundamental data plement feasibility evaluation” for the of project risk was analyzed from some risk cause “D1302.Malpractice of sub- viewpoints through the investigation of contracting for subcontractor referred by actual situations of the construction site. the client or local representative”, and The important risk causes were extracted also only one type of risk strategies by Pareto diagram, and distance of con- combination “Reasonable construction trollability. Otherwise, used FTA to de- cost estimation” for the risk cause velop a quantitative analytical method “C902. Cost details on drawing not in- and developed a user- friendly interface cluded in Quotation”. The combination for decision-making system by the cor- type of risk strategy for the designer- relation of risk cases, risk strategy and related risk cause “Hc501. Too many risk strategy cost. As a result, the follow- engineering change and too slow in- ing two achievements were obtained: struction fail project amount to be con- Clarifying the important risk causes, and firmed” was “Proprietor requested to Proposing framework of the decision- simplify engineering change procedure making system of risk management from and paperwork”. With regard to the safe- the perspectives of risk efficiency in ty & environment-related risk cause building project of Taiwan which could “E903 Unexpected community compen- search better combination type of risk sation claim”, the risk strategies includ- strategies for the project manager by the ed the combination types of “Implement trade-off between risk cost and project protective measure” and “Provide in- risk. formation session prior to construction and keep open communication with neighboring community”.

32 Risk analysis Optimization process Usage/Scale of project

Risk data Use the search Expression of data in DB ? search/analys Spreadsheet No Yes software Risk occurrence causes Choose the risk occurrence happen frequently causes Setup relations of risk cause, risk strategies and risk strategies cost

Constraints: risk reduction ( PR min) and risk strategies cost ( SC max ) Risk DB List additional risk strategy r for risk cause i (AS ir )

Modify the probability of risk cause i (Pa i)

Analysis For i =1~n support VBA For r =1~m programming

n m f ∑∑ Cir SC max i =1 r=1 No Next r Yes Yes Next i

No f g(p b )− g(pa ) PR min

Yes Result

Figure 7. The Framework of the Decision-Making Support System

Chapman, C. and Ward, S.: Why risk References efficiency is a key aspect of best practice projects. International Charoenngam, C. and Yeh, C.Y.: Con- Journal Project Management, 22, tractual risk and liability sharing in pp.619-632 (2004). hydropower construction. Interna- tional Journal of Project Manage- Inoue, I.: FTA safety engineering Re- ment, 17(1), pp.29-37 (1999). search institute of safety engineering, Tokyo, Japan (1979).

33 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016 Tsai T.C and Yang M.L.: Risk Man- agement in the Construction Phase of Building Projects in Taiwan. Journal of Asian Architecture and Building Engineering, 8(1), pp.143- 150 (2009).

Tsai, T.C., Furusaka, S. and Kaneta, T.: Risk analysis in construction phase of construction projects. Journal of Architecture, Planning and Envi- ronmental Engineering, 549, pp.239-246 (2001).

Wang, M.T. Chou, H.Y.: Risk allocation and risk handling of highway projects in Taiwan, Journal of Man- agement in Engineering, 19(2), pp.60-68 (2003).

Zhi, H.: Risk management for overseas construction project. International Journal of Project Management, 13(4), pp.231-237 (1995).

34 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

RESEARCH ON TAIWAN THEME PARKS’ EXPERIENCE MARKETING STRATEGY AND REVISIT WILLINGNESS, PURCHASE WILLINGNESS AND RECOMMENDATION WILLINGNESS

Jung Tsun Liu Institute of Management Chang Jung Christian University, Taiwan, R.O.C. [email protected]

Abstract

Pine & Gilmore think the time for experience economy has already come. People are no longer satisfied with the simple provision of products and services. Only products which ensure people of considerate feelings together with comfortable environment and service can unforgettable, personalized experience and unique values be created, and market segmentation and differences be achieved accordingly. Schmitt (2011) also emphasizes that people no longer focus merely on product function and efficiency. Instead, they focus on customer experience and consumption scenario. Experience marketing is a brand new concept which is capable of continuously creating innovative experience economy in life and scenarios, shaping sensational experience and thoughts recognition, and further changing consumption behavior and generating profit. Domestic theme parks are now facing high competition pressure. They should be able to create another blue sea if they can think outside the box of high investment cost and, instead, provide more experience scenarios to attract tourists. Based on experience economy concept, this research utilizes experience economy theory to explore if five experience marketing strategy affects consumers’ consumption willingness, revisit willingness and recommendation willingness. To verify this research’s assumption, researcher visited 269 tourists in targeted theme parks. The result indicates that experience marketing strategy indeed is capable of dra-

35 The International Journal Of Organizational Innovation Vol 9 Num 1 July 2016

matically affecting consumers’ consumption willingness, revisit willingness and recommendation willingness. This research also provides recommendations to theme parks based on the result.

Keywords: Experience Economy, Experience Marketing Strategy, Consumption Willingness, Revisit Willingness, Recommendation Willingness

Preface In addition to overall tourism perspective information, Tourism Bureau, We learned from the “Tourism Bu- Ministry of Transportation and Commu- reau 2012 Fellow Countrymen Travel nications, works hard to attract even more Status Survey” report that there were a tourists to visit theme parks. In 2012, total of 156,260,000 domestic travel times Taiwan amusement parks’ investments in for Taiwanese people in 2014, up 0.62% new facilities exceeded NT$3.5 billion as compared with the one for 2013 and an dollars. A total of 9.12 million man times average of 7.47 times per person per year of tourists had been attracted to amuse- (Tourism Bureau, Ministry of Transporta- ment parks and a total of NT$5.8 billion tion and Communications, 2015). Total dollars of revenue had been generated travel times will reach 181.27 million accordingly. The total number of people travel times if accompanying children visiting amusement parks in 2013 had younger than 12 years old are included. exceeded 10 million man times. It is also As per estimates from Taiwan Tourism forecasted that the number of tourists vis- Bureau, total travel expense for Taiwan- iting amusement parks across Taiwan ese people in 2014 shall reach as high as during winter vacation at the end of 2014 NT$309.2 billion dollars. We learn from shall reach 1.35 million man times due to these statistics that each Taiwanese peo- the long winter vacation. This is an in- ple will have one travel behavior for crease of roughly 50 percent as compared roughly every two months, with each one to those visited amusement parks during spending about NT$1,979 dollars on tour- the winter vacation of 2013 (Tourism ism related expenses. If we include influx Bureau, Ministry of Transportation and of foreign tourists, tourism industry in- Communications, 2015). Although we can deed poses certain influence over Tai- have a rough understanding of domestic wan’s economic development. tourism market’s prosperity from statistics 36 The International Journal Of Organizational Innovation Vol 9 Num 1 July 2016

mentioned above, this is also because of ings of quality services from amusement continuous opening of amusement parks. parks. Accordingly, this research will As such, level of competition in amuse- conduct exploration from the perspective ment park market has also increased dra- of experience marketing strategy to see if matically. any influence has been generated to consumers’ consumption willingness, revisit Previously, most amusement parks in willingness and recommendation willing- Taiwan advertised on their hardware ness after amusement park’s introduction equipment of mechanical amusement fa- of experience marketing. cilities. However, investments in amuse- Explorations of Documents ment hardware facilities are costly. Fur- thermore, with the rise of environmental Experience Marketing Strategy protection awareness, acquisition of lands Paula (2013) quotes Pine & Gil- needed for various constructions all have more’s “experience economy” concept, to go through environmental impact as- which was raised in the book of “The sessment as well as various constructions Experience Economy”, and considers: the of soil & water conservation. This not time for experience economy has already only increases difficulty in adding new come. People are no longer satisfied with amusement facilities, it also has negative the simple provision of products and ser- influence on attracting consumers who vices. Only products which ensure people emphasize on environmental conservation. of considerate feelings together with com- Owners of amusement parks should there- fortable environment and service can un- fore consider t transformation strategy forgettable, personalized experience and other than “hardware competition.” In- unique values be created, and market vestments only in large scale amusement segmentation and differences be achieved facility will lead to a red sea strategy. accordingly. Schmitt (2011) also presents Everyone continues to invest in even big- the same concept in “Experiential Market- ger amusement facilities under cut-throat ing” and emphasizes that people no longer competition. This will generate invest- focus merely on product function and ment competition pressure to amusement efficiency. Instead, they focus on custom- park industry. Nevertheless, customer’s er experience and consumption scenario. experience is only limited to riding ser- Experience marketing is a brand new con- vice of amusement facilities. They can’t cept which is capable of continuously have even more theme experience or feel- 37 The International Journal Of Organizational Innovation Vol 9 Num 1 July 2016

creating innovative experience economy tional satisfaction as well as feelings to- in life and scenarios, shaping sensational wards products or services. Accordingly, experience and thoughts recognition, and these 5 strategic experience modules are further changing consumption behavior capable of jointly creating valuable quali- and creating new survival niche and space ty assets. Table 1 of this research lists out for products and maximizing product val- experience marketing strategies and goals ues. Appealing measures from traditional (Maklan & Klaus, 2011) as follows: marketing are no longer capable of at- Sense Marketing : This is mainly focused tracting and satisfying consumer’s needs. on consumer’s senses (vision hearing, Instead, they are replaced by the concept smelling, tasting and touching) in or- of experience marketing. Traditional mar- der to trigger purchase motive. Sense keting only focuses on promoting product of value is therefore enhanced through function and efficiency and it treats cus- consumer’s sense of happiness or sat- tomers as reasonable decision makers. On isfaction. the other hand, experience marketing de- viates itself from traditional marketing Emotion Marketing : This allows consum- thinking. Mainly through the creation of ers to obtain certain experiences from new experiences for consumers, it triggers their purchase environment and pro- consumers’ excitement in their sense, cess, and further generate good feel- mind and thinking, and as such leaves ings towards product and brand. unforgettable joyful memory in the con- Therefore, marketing people should sumers’ minds. (Farshad, Kwek & Amir, know how to trigger customer’s feel- 2012 ). ings and design scenarios for such stimulation. To ensure marketing people’s sys- Thinking Marketing : New thinking direc- tematic understanding of marketing strat- tions have been proposed to allow egy anchored on the foundation of experi- consumers to re-assess and re-think ences, Schmitt further divided experience benefits from new products and ser- marketing into 5 categories of sense, emo- vices. Creation of surprises is the key tion, thinking, action and relevance. Expe- to success. Transfer of model: creation rience marketing strategy surrounds con- of surprises is the key to success. sumers with marketing measures which Therefore, marketing people should allow consumers to generate creative understand customer’s knowledge thinking and surprises and obtain sensa- 38 The International Journal Of Organizational Innovation Vol 9 Num 1 July 2016

structure as well as resources to attract by his/her perceived obtainable benefit concentration. and value. Purchase willingness is then further developed accordingly. Amin, Action Marketing: This emphasizes that Rezaei and Tavana (2015) presented a consumers experience the result of method to measure consumer’s purchase change after their bodies, habits and willingness. Measurement is conducted lifestyles have been changed. by measuring probability of consumer’s Relevance Marketing : Marketing is con- willingness to purchase product, consum- ducted using interaction relationship er’s probability to purchase product if between consumer’s psychology and he/she has already determined to do so, society and culture. Sense of group and the probability of recommending oth- recognition is created to enhance ers to purchase product. Hu (2013) con- brand acceptance Schmitt (2011). sidered that customer loyalty should emphasize more on behavioral indicators. He Consumption Willingness presented four indicators to measure con- Voon, Ngui and Agrawal (2013) point- sumer’s purchase willingness: repeated ed out that consumer’s attitude towards a purchase, purchase the same company’s certain product or brand together with other product, other’s recommendation influences from external factors constitute and degree of immunity over competitor. consumer’s purchase willingness. Pur- Irianto (2015) presented perspectives of chase willingness can be deemed as a “customer consumption rate, repeated consumer’s subjective preference in se- purchase rate, recommendation rate” to lecting a certain product and it is con- measure purchase willingness. Kim and firmed to serve as an important indicator Chung (2011) contended that, to measure in predicting consumer behavior. Khalek, consumer’s purchase willingness, meas- Ismail and Ibrahim (2015) considered that urements should be conducted on con- purchase willingness is the possibility of sumer’s loyalty which includes re-pur- consumer’s intention to purchase such chase willingness, willingness to purchase product. It is therefore a probability, pos- more products in the future and willing- sibility and willingness of customer’s ness to recommend to others. Yap and willingness to purchase a certain product. Cheng (2015) considered that measure- Saqib, Mahmood, Khan and Hashmi ments for purchase willingness include (2015) pointed out that consumer’s pur- considering purchase of such product, chase willingness is usually determined possibility of purchasing such product and 39 The International Journal Of Organizational Innovation Vol 9 Num 1 July 2016

willingness to recommend others to pur- willingness) as well as willingness to re- chase such product. Liew and Mohammad visit this amusement park (revisit willing- (2015) pointed out that purchase willingness). ness should be measured on items includ- Design of Research ing willingness to select to purchase, Research Structure & Questionnaire worth of purchasing as well as recom- Items mendation to other friends and relatives to purchase. This research takes measure- Author of this article had personally ment scales presented by Dodd (1991) visited theme parks to collect tourists’ and others for reference and utilizes three views on theme park experience market- indicators of consumer’s possibility of ing strategies (including experience mar- purchasing such product, possibility of keting strategies of sense, emotion, action, considering purchasing such product as thinking and relevance), re-visit willing- well as possibility of recommending ness, purchase willingness and recom- friends or relatives to purchase such prod- mendation willingness, and constructed uct to serve as variables in measuring theme park experience marketing strate- purchase willingness. gies based on related findings. The structure of this research is illustrated in Figure In summary, this research finds that 1 and explanations of variables encom- most previous researches utilized possibil- passed by respective research perspectives ity to purchase product or service (con- are as follows: (1). Experience Marketing sumption willingness), willingness to rec- Strategy: This research defines five expe- ommend product or service to others (rec- rience strategies in accordance with “Ex- ommendation willingness) as well as re- perience Marketing Strategy” defined by peated purchase rate (re-purchase rate) to Schmitt (2000), and drafts experience measure consumption willingness. marketing strategy items suitable for this research under references from experience Given the fact that subjects for this marketing strategy item design by Wu, research are tourists who visit theme Min-Fong (2003); (2). Consumption Will- parks, this research defines consumption ingness: Under references of consumption willingness as consumption in amusement willingness scale raised by Dodd (1991) park (consumption willingness), willing- and others, this research presents items of ness to recommend friends or relatives to consumption willingness, recommenda- visit amusement park (recommendation tion willingness and revisit willingness to 40 The International Journal Of Organizational Innovation Vol 9 Num 1 July 2016

explore tourist’s willingness to revisit people interviewed graduated from theme park within one year, consumption university (45%). People with college willingness within theme park as well as education background (22%) come in willingness to recommend theme park. the 2 nd place and the 3 rd is people with education background above graduate This research utilizes Likert Scale to school (18%). On occupation side, measure five experience marketing strate- people working in industries account gies and consumption willingness. Meas- for the most part, with 65 (24%) of the urement scale for experience marketing them. The next is people working in strategies are 5 points for very agree, 4 military, public sector and education points for agree, 3 points for average, 2 sector, with 55 (20%) of them. The 3 rd points for disagree and 1 point for very place is people working as freelancers, disagree. Measurement scale for con- with 50 (19%) of them. With respect sumption willingness is 5 points for high to family monthly income, there are a willingness, 4 points for willingness, 3 total of 134 people interviewed with points for average, 2 points for no will- monthly family income of 50,001- ingness and 1 point for extremely no will- 80,000 dollars (50%). The 2 nd place is ingness. people with income of 80,001- Result of Analysis 100,000 dollars, a total of 60 (22%) of them. As for source of information to Background of People Interviewed visit amusement park, 88 people (33%) are simply walking by amusement This research interviewed 269 park. The 2 nd place is from webpage, a tourists which include 140 females total of 81 (30%) of them. The 3 rd (52%) and 129 males (48%). As for place is promotion form friends or rel- marital status, not-married people ac- atives, with a total of 50 (19%) of count for the major part with 151 of them. them (65%) and there are 118 (44%) people already married. There are 100 Multiple Regression Analysis people aged between 31 - 40 (37%). People aged under 30 (33%) come in (1) Revisit Willingness Regression Anal- the 2 nd place and people aged between ysis. 41-50 (17%) come in the 3 rd place. As for education background, 121 of 41 The International Journal Of Organizational Innovation Vol 9 Num 1 July 2016

Sense Marketing

Emotion Revisit Marketing Willingness

Action Purchase Purchase Marketing Willingness Willingness

Thinking Recommen- Marketing dation Willingness

Relevance Marketing

Figure 1. Structure of This Research

Table 2. Perspectives of Questionnaire and Items

Perspective Items Sense 1. Architecture and landscape in theme park seem to Marketing allow me to be immersed in an exotic scenario. Strategy 2. Many creative and exciting amusement facilities in theme park give me sweet memory. 3. I learn a lot from observing wild animals in close range in theme park. 4. I enjoy a lot for being able to watch wonderful festival and theme activities in theme park. 5. I’m able to play freely in the spacious outdoor activity space in theme park. 6. Resort hotel in theme park allows me to enjoy high end accommodation quality. 7. I’m able to release my pressure because it seems like that you’re in other countries when you play in the theme park. Emotion 1. My impression on theme park is enhanced from Marketing staff’s considerate services. Strategy 2. I will directly think of theme park when exciting and creative amusement facilities are mentioned. 3. Coming to theme park allows me to feel joyful and relax atmosphere. 4. I will directly think of theme park when cute wild animals are mentioned. 5. I will directly think of theme park when foreign immigrant exploration history is mentioned. 6. I will directly think of theme park when words of spacious and natural are mentioned. 7. I will directly think of theme park when South East Asia culture is mentioned. 42 The International Journal Of Organizational Innovation Vol 9 Num 1 July 2016

Perspective Items 8. I will directly think of theme park when mysterious West Asia culture is mentioned. Thinking 1. Theme architectures in amusement park make me Marketing feel surprised. Strategy 2. Theme villages in amusement park allow me to understand culture characteristics of each country. 3. Festivals and events allow me to understand more of different cultures. 4. Wild animals in amusement park can enhance my knowledge on ecology and animals. Action 1. Allowing tourists to be integrated into festivals and Marketing events related to Taiwan culture will be more attrac- Strategy tive to tourists. 2. Allowing tourists to be integrated into festivals and events related to world cultures will be more attractive to tourists. 3. More people will be attracted if amusement parks can regularly hold guided ecology events. 4. More people will be attracted if amusement parks can hold experience events for parents and kids to participate together. Relevance 1. More people will be attracted if amusement parks Marketing can work with together with surrounding communi- Strategy ties and groups in holding events. 2. More people will be attracted if amusement parks can work together will various levels of schools in holding events. 3. It will be more attractive to tourists if designated company or group’s preferential benefits are offered. 4. It will be more attractive to tourists if amusement parks can work together with government in holding events. 5. It will be more attractive to tourists if amusement parks can work together with private sector enterprises in holding events. 6. People will be more impressed if amusement parks can invite well-known people for promotion. 7. It will be more attractive to people if amusement parks can offer event discounts to surrounding communities. 8. It will be more attractive to people if amusement parks can design discounted package itinerary. 9. It will be more attractive to people if amusement parks can issue membership card and offer discounts. Willingness 1. Your willingness to revisit this amusement park within one year 2. Your willingness for consumption in this amusement park within one year 3. Your willingness to recommend this amusement within one year

According to multiple regression willingness. With respect to sequence of analysis findings, sense marketing, emo- influence on marketing strategy, action tion marketing, thinking marketing, action marketing possesses the biggest influence marketing and relevance marketing are all (β=.411) which is then followed by emo- capable of forecasting (affecting) revisit tion marketing ( β=.393). The 3 rd one is

43 The International Journal Of Organizational Innovation Vol 9 Num 1 July 2016

relevance marketing ( β=.356) and the 4 th is mainly influenced by action marketing one is sense marketing ( β=.259) and the which is then trailed by other experience 5th is thinking marketing. This means that marketing strategies. revisit willingness of tourists interviewed

Table 3. Regression Analysis Summary over Factors Affecting Re-Visit Willingness

Standard B Deviation β Significance Constant .695 .156 .000 Sense Marketing .302 .187 .259 .000*** Emotion Marketing .421 .198 .393 .000*** Thinking Marketing .199 .174 .168 .001** Action Marketing .511 .157 .411 .000*** Relevance Marketing .401 .155 .356 .000** R Square .432 Adjusted R Square .412 F(p) 32.312 (.000***) ** p <.01, *** p <.001

(2) Consumption Willingness Regression (3) Recommendation Willingness Re- Analysis. As per findings from multiple gression Analysis. As per findings from regression analysis, action marketing, multiple regression analysis, relevance relevance marketing and sense marketing marketing, emotion marketing, action are capable of predicting (affecting) con- marketing and sense marketing are all sumption willingness. With respect to the capable of predicting (affecting) recom- sequence of their influence power over mendation willingness. With respect to experience marketing, action marketing the sequence of their influence power possesses the biggest influence ( β=.403) over marketing strategy, relevance mar- which is followed by relevance marketing keting possesses the biggest influence (β=.356), and sense marketing comes in (β=.372) which is then trailed in the fol- the third place ( β=.303). This means that lowing sequence by emotion marketing consumption willingness of tourists inter- (β=.353), action marketing ( β=.299) and viewed is mainly influenced by action sense marketing ( β=.222). This means marketing which is trailed by influences tourist’s recommendation willingness is from relevance marketing and sense mar- mainly influenced by relevance marketing keting.

44 The International Journal Of Organizational Innovation Vol 9 Num 1 July 2016

Table 4. Regression Analysis Summary over Factors Affecting Consumption Willingness

Standard B Deviation β Significance Constant .782 .211 .000 Sense .192 .112 .303 .005** Marketing Emotion .198 .121 .102 .428 Marketing Thinking .145 .123 .109 .221 Marketing Action .512 .092 .403 .001** Marketing Relevance .399 .172 .356 .000*** Marketing R Square .399 Adjusted .381 R Square F(p) 17.112 (.000***) ** p <.01, *** p <.001

Table 5. Regression Analysis Summary over Factors Affecting Recommendation Willingness

Standard B Deviation β Significance Constant .556 .110 .000 Sense Marketing .231 .199 .222 .001** Emotion Marketing .401 .083 .353 .000*** Thinking Marketing .124 .139 .126 .062 Action Marketing .311 .187 .299 .001** Relevance Marketing .592 .111 .372 .000*** R Square .399 Adjusted R Square .376 F(p) 21.732 (.000***) * p <.05, ** p <.01, *** p <.001

45 The International Journal Of Organizational Innovation Vol 9 Num 1 July 2016

which is followed by emotion marketing. and prefer emotion marketing strategy Action marketing ranks the 3 rd and sense more than people with education back- marketing comes in the 4 th . ground of college (M = 3.19) do. People interviewed with monthly family income 3. One-Way ANOVA of 80,001-100,000 dollars (M = 4.03) (1) Population Variable One-Way ANO- recognize and prefer emotion marketing VA in Sense Marketing Strategy. Mar- strategy more than people with monthly ried people ( M = 3.51) recognize and pre- family income of 50,001-80,000 dollars fer sense marketing strategy more than (M = 3.17) do. not-married people ( M = 3.12) do. People (3) Population Variable One-Way ANO- interviewed with more than 51 years old VA in Thinking Marketing Strategy. (M = 3.71) and aged between 41-50 rec- Married people ( M = 4.04) recognize and ognize and prefer sense marketing strate- prefer thinking marketing strategy more gy more than people aged between 31-40 than not married people (M = 3.59) do. (M = 3.11) and younger than 30 years old People aged 31-40 years ( M = 4.05) rec- (M = 3.13) do. People interviewed with ognize and prefer thinking marketing education backgrounds of graduate school strategy more than people aged 41-50 and above ( M = 4.01), college ( M = 3.83) years ( M = 3.51) and above 51 years ( M = and university ( M = 3.69) recognize and 3.48) do. People interviewed with educa- prefer sense marketing strategy more than tion background of university ( M = 3.97), people with education background below above graduate school ( M = 3.86) and high school and occupational school. college ( M = 3.85) recognize and prefer People interviewed with monthly family thinking marketing strategy more than income of 80,001-100,000 dollars ( M = people with education background of be- 4.01) recognize and prefer sense market- low high/occupational school ( M = 3.11) ing strategy more than people with in- do. come of below 50,000 dollars ( M = 3.29) do. (4) Population Variable One-Way ANO- VA in Action Marketing Strategy. Peo- (2) Population Variable One-Way ANO- ple interviewed with education back- VA in Emotion Marketing Strategy. ground of university ( M = 4.08) and People interviewed with education back- above graduate school ( M = 3.98) recog- ground of above graduate school (M = nize and prefer action marketing strategy 3.97) and university (M = 3.92) recognize more than people with education back- 46 The International Journal Of Organizational Innovation Vol 9 Num 1 July 2016

ground of college ( M =3.11) and below them in order to enhance tourist’ revisit high/occupational school ( M = 3.10) do. willingness. As for sense marketing, People interviewed with family income of amusement parks can enhance festival 80,001-100,000 dollars ( M = 4.03) and and theme events, encourage tourists to above 100,001 dollars ( M = 3.96) recog- visit theme villages featuring respective nize and prefer action marketing strategy countries of the world, and offer close more than people with family income range animal observation and interaction below 50,000 dollars ( M = 3.33) do. to attract tourists. Through certain guided tour services and introduction of wild Discussion animals and festival events, thinking mar-

keting will be able to enhance tourist’ 1. Action Marketing, Emotion Market- impression and, as a result of this, tourists ing, Relevance Marketing, Sense Market- will want to visit amusement parks again. ing and Thinking Marketing Will Influ-

ence Tourist’s Revisit Willingness. 2. Action Marketing, Relevance Mar-

keting and Sense Marketing Will Influ- Action marketing, emotion market- ence Tourist’ Consumption Willingness. ing, relevance marketing, sense marketing

and thinking marketing can all influence Action marketing, relevance market- tourists’ revisit willingness. With respect ing and sense marketing can all predict to action strategy, action experience mar- (influence) consumption willingness. keting strategy can be enhanced if With respect to the sequence of influence amusement parks can frequently hold power over marketing strategy, action guided ecology exhibition event, festival marketing possesses the biggest influence, events related to Taiwan culture as well as with relevance marketing on the 2 nd place experience events in which both parents and sense marketing comes in the 3 rd and children can all participate. As for place. This means amusement parks emotion marketing, exciting and creative should first start planning action and rele- amusement facilities together with cute vance marketing and sense marketing if wild animals can be used to attract tourist’ they want to enhance tourist’ consump- attention. On relevance marketing, tion willingness within amusement parks. amusement parks can offer preferential This research considers that amusement tour package to surrounding communities parks should design experience events and invite well-known figure to promote from the perspective of creation in order 47 The International Journal Of Organizational Innovation Vol 9 Num 1 July 2016

to reinforce tourist’ emotion and under- tourists to visit theme villages featuring standing of amusement parks, offer pref- countries around the world; and hold erential treatments and satisfy tourists’ close-range wild animal observation and sensational enjoyment and enhance tour- interaction to attract tourists. ists’ consumption willingness. 4. Married, Relatively Older, Higher 3. Relevance Marketing, Emotion Mar- Education Background with Higher Fami- keting, Action Marketing and Sense Mar- ly Income Recognize and Prefer Sense keting Will Influence Tourists’ Recom- Marketing Strategy. mendation Willingness. Compared to not married people, Relevance marketing, emotion mar- married people tend to recognize and pre- keting, action marketing and sense mar- fer sense marketing strategy. People in- keting will all influence tourists’ recom- terviewed aged above 51 years and 41-50 mendation willingness. With respect to years recognize and prefer sense market- the sequence of marketing strategies’ in- ing strategy more than people aged 31-40 fluence power, relevance marketing pos- or below 30 do. People interviewed with sesses the biggest influence, which is then education background above graduate followed in the sequence of emotion mar- school, college or university recognize keting, action marketing and sense mar- and prefer sense marketing strategy more keting. If amusement parks want to ag- than those with education background gressively enhance tourists’ recommenda- below high/occupational school do. Peo- tion willingness, they can first offer some ple interviewed with monthly family in- preferential treatments and look for ap- come between 80,001- 100,000 dollars propriate promotion figure to strengthen recognize and prefer sense marketing tourists’ recommendation willingness, strategy more than those with an income enhance tourists’ feelings of amusement of below 50,000 dollars do. facilities and wild animal zones; offer events or guided ecology tours which 5. People with Higher Education Back- allow parents, children and community ground and Family Income Recognize residents to experience; hold festival More with Emotion Marketing Strategy. events which are related to Taiwan culture and which are supported by the holding of This research finds that people inter- festivals and theme events to encourage viewed with education background above 48 The International Journal Of Organizational Innovation Vol 9 Num 1 July 2016

graduate school or university recognize People interviewed with education and prefer emotion marketing more than background of university or above gradu- those with education background of col- ate school recognize and prefer action lege do. People interviewed with monthly marketing strategy more than those with family income between 80,001-100,000 education background of college or below dollars recognize and prefer emotion high/occupational school do. People in- marketing strategy more than those with terviewed with monthly family income monthly family income between 50,001- between 80,001-100,000 dollars and 80,000 dollars do. above 100,001 dollars recognize and prefer action marketing strategy more than 6. People Who Are Married, Younger those with monthly family income below with Higher Education Background Rec- 50,000 dollars do. ognize and Prefer Thinking Marketing Strategy. 8. Relevance Experience Marketing Strategy Can be Utilized to Enhance People interviewed who are married Tourists’ Revisit, Consumption and Rec- recognize and prefer thinking marketing ommendation Willingness. strategy more than those who are not married do. People interviewed aged between This research finds that relevance 31-40 recognize and prefer thinking mar- experience marketing strategy has strong keting strategy more than those aged be- influence over tourists’ three willingness. tween 41-50 and above 51 do. People Therefore, under the purpose to aggres- interviewed with education background of sively enhance tourists’ willingness, rele- university, above graduate school and vance marketing strategy should first need college recognize and prefer thinking to construct and implement key points. As marketing strategy more than those with such, this research also provides recom- education background below high / occu- mendations as follows: 1. Offer event pational school do. preferential treatment to surrounding communities. For instance, discounts on 7. People with Higher Education Back- entry with ID card or offering of con- ground and Higher Income Recognize and sumption coupon. 2. Amusement parks Prefer Action Marketing Strategy. design guided ecology tour and route planning. Introduction will be made by tour guide to enhance tourists’ emotion 49 The International Journal Of Organizational Innovation Vol 9 Num 1 July 2016

towards amusement park. 3. Offer recog- ee or actor. This will enhance tourists’ nition cards to visiting tourists to allow understanding and feelings towards them to accumulate points. Preferential amusement parks. 3. Amusement parks treatment or gift will be delivered when can hold DIY competitions. For instance, certain amount of points have been accu- they can allow tourists to pick out animals mulated. 4. Invite stars or renowned fig- designated by amusement parks among a ures with positive image to promote for variety of different animals. Or, they can amusement park, and collaborate with allow tourists to experience festival event schools to hold ecology events or field preparation process. 4. Amusement parks teaching events together. 5. Enter agree- can hold experience events which allow ment with government institutes or com- parents and children to have fun together. panies to offer preferential treatments For instance, spac-ious outdoor space in from related collaborating units. amusement parks can be utilized to hold painting event, music performance, essay 9. Utilization of Action Experience recitation or some intellectual competi- Marketing Strategy to Enhance Tourists’ tions which allow parents and children to Revisit, Consumption and Recommenda- have fun together. 5. Amusement park tion Willingness provides locations for surrounding communities to hold events within amusement As per findings from regression park. Amusement parks can also allow analysis, action experience marketing can surr-ounding communities to hold events also be utilized to predict tourists’ revisit, in the space or buildings within amuse- consumption and recommendation will- ment parks. This not only increases repu- ingness and it is also very powerful. As tation. It also enhances surrounding com- such, this research also presents sugges- munity residents’ good feelings towards tions as follows: 1. Amusement park can amusement parks. hold certain experience events which are related to ecology, animal or festival ac- 10. Utilization of Sense Marketing Strat- tivities. For instance, events allowing egy to Enhance Tourists’ Revisit and tourists to experience feeding animals in Recommendation Willingness close range, guided ecology tour and explanation. 2. Amusement parks can utilize This research finds that tourists love methods of allowing tourists to play the wild animals, festivals and events, excit- role of one-day amusement park employing and creative amusement facilities as 50 The International Journal Of Organizational Innovation Vol 9 Num 1 July 2016

well as theme villages full of exotic tastes ed ecology tour and explanation of related in amusement parks a lot. They also hope knowledge. They can also provide ticket that in the future they can enjoy more discounts to attract more schools’ atten- experience events and preferential treat- tion. 3. Amusement parks can design and ments in amusement parks. As such, this plan for more festival events related to research has presented recommendations Taiwan culture to allow tourists to be as follows: 1. Encourage tourists to visit immersed in and to understand the beauty all theme cultural villages within amuse- of Taiwan culture. 4. Amusement parks ment park. They’re entitled to receive a provide experience events which allow little gift if they collect every stamp from tourists to play roles so that tourists can each theme cultural village. 2. Amuse- be deeply integrated into atmosphere in ment park can actively contact schools of theme village and become very impressed various levels to provide them with guid- about amusement parks.

Reference H. Irianto. (2015). Consumers’ Attitude and

Intention towards Organic Food Pur- A. A. Khalek, S. H. S. Ismail., & H. M. chase: An Extension of Theory of Ibrahim (2015). A study on the fac- Planned Behavior in Gender Perspec- tors influencing young Muslims’ be- tive. International Journal of Man- havioral intention in consuming halal agement, Economics and Social Sci- food in Malaysia. Jurnal Syariah , Vol. ences , Vol.4. No.1, 17 – 31. 23. No.1, 79-102.

H.Y. Kim., & J. E. Chung. (2011). Con- B. Schmitt. (2011). Experience Marketing: sumer purchase intention for organic Concepts, Frameworks and Consumer personal care products. Journal of Insights. Foundations and TrendsR in Consumer Marketing , Vol.28. No.1, Marketing , Vol.5. No.2, 55-112. 40-47.

C. Paula. (2013). The Perception of Young J. P. Voon, K. S. Ngui., & A. Agrawal. Romanians on Experiential Marketing. (2013). Determinants of Willingness Management & Marketing , Vol.6. to Purchase Organic Food: An Ex- No.2, 312-320. ploratory Study Using Structural

Equation Modeling. International 51 The International Journal Of Organizational Innovation Vol 9 Num 1 July 2016

Food and Agribusiness Management S. Maklan., & P. Klaus. (2011). Customer Review , Vol. 14. No.2, 23-41. experience: Are we measuring the right things? International Journal of K. Saqib, A. Mahmood, M. Khan., & M. Market Research , Vol.53. No.6, 11- Hashmi. (2015). Impact of Consumer 25. Inertia on Purchase Intention under the Influence of Subjective Product T. L. Hu. (2013). Effects of inertia and sat- Knowledge. International Journal of isfaction in female online shoppers on u- and e- Service, Science and Tech- repeat-purchase intention. Managing nology , Vol.8. No.2, 293-298. Service Quality , Vol.23. No.3, 168- 187. M, Amin. S, Rezaei, F. S. Tavana. (2015). Gender differences and consumer’s W. B. Dodds, K. B. Monroe., & D. Grewal. repurchase intention: the impact of (1991). Effect of price, brand and trust propensity, usefulness and ease store information on buyers’ product of use for implication of innovative evaluations. Journal of Marketing Re- online retail. International Journal of search , Vol. 28. No.3, 307-319. Innovation and Learning , Vol. 17. No.2, 31-50. Y. S. Liew., & F. Mohammad. (2015). Conceptualising Consumers’ Pur- M. F. Yap., & B. L. Cheng. (2015). Factors chase Intention towards Online Group Affecting Consumer’s Continuance Buying. Global Journal of Business Online Purchase Intention in Malaysia. and Social Science Review, Vol.3. Global Journal of Business and So- No.1, 357-366. cial Science Review , Vol.1. No.1, 309-321. Wu, Min-Fong (2003). Research of Recrea- tional Farm/Fishing Park Types and M. Farshad, C. L.Kwek., & N. Amir. Experience Marketing Strategy. Mas- (2012). Exploring the Relationship ter Thesis, Mater Degree Class, De- between Experiential Marketing and partment of Agribusiness Manage- Experiential Value in the Smartphone ment, National Pingtung University of Industry. International Business Re- Science and Technology Administra- search , Vol.5. No.11, 169-177. tion Information System, Tourism Bureau, Ministry of Transportation 52 The International Journal Of Organizational Innovation Vol 9 Num 1 July 2016

and Communications (2015), 2015/ 10/10 from http://admin.taiwan.net.tw/statistics/m arket.aspx?no=133

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THE EFFECTS OF GENERAL PERSONALITY TRAITS AND COGNITIVE BELIEFS ON ELEMENTARY SCHOOL TEACHERS’ USE OF AN EDUCATIONAL PORTAL IN TAIWAN

Jung-Wen Hsia Department of International Business Chung Hua University, Taiwan (R.O.C.)

Ai-Hua Tseng* Department of Hospitality Management Chung Hua University, Taiwan (R.O.C.) *Corresponding Author: [email protected]

Abstract

Rapid advances in the Internet and information technologies have greatly facilitated the use of digital teaching materials and technologies in school education. To support and improve teachers’ teaching effectiveness, educational authorities have established educational portals for teachers to share teaching materials, and to discuss and interact with each other. However, many elementary teachers have less desire to use educational portals. Therefore, understanding which factors affect their use of an educational portal is a major concern. The study builds a theoretical model affecting elementary teachers’ use of Easy Teaching Web of Taiwan by integrating general personality traits (conscientiousness, openness to experience, extraversion) and cognitive beliefs (perceived playfulness and perceived usefulness) into one model. This study is one the first to examine the effects of conscientiousness, openness to experience, and extraversion on elementary teachers’ use of an educational portal. Data were collected from 512 teachers in 25 elementary schools in Taipei, Taiwan. The partial least squares approach was used to evaluate causal links of the model, it was found that conscientiousness, openness to experience, and extraversion can influence teachers’ use of an educational portal through beliefs (perceived playfulness and perceived usefulness). The practical implications are discussed, and further studies are suggested.

Key Words: Conscientiousness; Openness to Experience; Extraversion; Perceived Play- fulness; Perceived usefulness; Educational Portal; Elementary School Teacher

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Introduction Theoretical Background

There have been huge develop- The Five-Factor Model (FFM) of ments of educational technologies and Personality digital teaching materials in the education industry. National and local educa- Personality is a stable set of char- tion authorities in many countries have acteristics and tendencies that determine established educational portals to sup- the commonalities and differences in port teachers’ teaching. Teachers can thoughts, feelings, and actions of people share teaching materials and resources (Maddi, 1989). The classification of per- and exchange information and views sonality is now known as the FFM, and from the educational portals. However, the factors are referred to as the Big Five. since it is difficult for teachers to choose The FFM includes agreeableness, extra- appropriate systems and technologies for version, conscientiousness, openness to their teaching in the classroom, many experience, and emotional stability (Bar- teachers may seldom or rarely use the rick & Mount, 1991). educational portals. In addition, less research has been investigated which fac- Theoretical Development tors affect elementary school teachers’ use of an educational portal. Therefore, The theoretical model for this study exploring the factors that can influence (Figure 1) draws from the FFM and cog- elementary teachers’ use of an educa- nitive beliefs. According to the model, it tional portal is a priority concern. reveals the causal relationships among general personality traits (conscientious- This study selects general person- ness, openness to experience, and extra- ality traits as important factors to explain version), cognitive beliefs (perceived and predict elementary school teachers’ usefulness and perceived playfulness), use of an educational portal. We hypoth- and use of an educational portal. esize that three general personality traits (conscientiousness, extraversion, and Conscientiousness openness to experience) are antecedents of two cognitive beliefs (perceived use- Individuals high in conscientious- fulness and perceived playfulness). ness are responsible, organized, self- Since few studies have empirically in- disciplined, self-motivated, achieve- vestigated the antecedents of perceived ment-oriented, and task-oriented (Bar- usefulness and perceived playfulness and rick & Mount, 1991). High conscien- the mediating roles that perceived use- tious individuals are eager to achieve fulness and perceived playfulness play in their goals (Costa & McCrae, 1992) and the teachers’ use of an educational portal. to pursue high levels of job performance. Thus, this research intends to fill the research gap by combining general per- In the context of education and sonality traits, cognitive beliefs, and use learning, prior results found that consci- of an educational portal into one model. entious students have better academic performance (Conard, 2006).

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Figure 1. The research model

Conscientious people are more Thus, since accessing and exploring the likely to carefully consider which tech- educational portal is a new way for high nologies can provide opportunities to openness teachers to obtain useful mate- succeed and improve their performance. rials and to express their creativity in Accordingly, we can expect high consci- class, they may perceive greater useful- entious teachers would may perceive ness of the educational portal than closed usefulness of the educational portal be- teachers. Accordingly, the following cause it provides practical and accessible hypothesis is tested: teaching materials and resources for their teaching in class. We thus hypothe- H2: Openness to experience has a posi- sized: tive effect on perceived usefulness.

H1: Conscientiousness has a positive High openness individuals are effect on perceived usefulness. more likely to explore and try new things, and they tend to enjoy the trial Openness to experience process (McCrae & Costa, 1997). A Openness to experience is defined computer-based assessment acceptance as the extent to which individuals are study by Davis and Yi (2012) reported intelligent, knowledgeable, creative, that openness to experience directly pre- imaginative, and curious (Goldberg, dicts computer playfulness. Accordingly, 1992). High openness individuals are the following hypothesis is proposed. very curious about their inner and outer environments, and they are likely to try H3: Openness to experience has a posi- new and different things. They tend to tive effect on perceived playfulness. hold positive attitudes and perceptions towards learning and actively seek new Extraversion information and approaches to exhibit their creativity (Barrick & Mount, 1991). Those high in extraversion are social, active, energetic, talkative, out-

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going, and enthusiastic (Barrick & Perceived playfulness Mount, 1991). Individuals with extraversion are more likely to enjoy the rela- Perceived playfulness was defined tionship and interaction with people. as the extent to which the individual perceives that his or her attention is fo- Since extraverts prefer to search cused on the interaction with the specific and share new and different information application system; is curious during the on the Internet to satisfy their needs for interaction; and finds the interaction interpersonal interactions, we expect intrinsically enjoyable or interesting extravert teachers are more likely to en- (Moon & Kim, 2001). Since an educa- joy obtaining new and interesting teach- tional portal provides a convenient plat- ing materials from the educational portal form for teachers to share interesting to share with their colleagues and stu- teaching materials, elementary teachers dents (Amiel & Sargent, 2004). Thus, who experience playfulness and flow we expect extravert teachers will enjoy while using the portal are likely to use it. participating online forum of the educa- Therefore, the following hypothesis is tional portal. Thus, the following hy- proposed. pothesis is proposed. H6: Perceived playfulness has a positive H4: Extraversion has a positive effect on effect on the use of an educational perceived playfulness. portal .

Perceived usefulness Material and Methods

Perceived usefulness was defined as The educational portal: Easy the degree to which users believe that Teaching Web (ET Web) using a specific application system would enhance their job performance in The educational portal analyzed in an organizational context (Davis, 1989). this study was the ET Web (etweb.tp Since elementary school teachers are .edu.tw), which was created by and for required to prepare diverse teaching ma- teachers with the support of the Depart- terials to meet the needs of students, ment of Education, Taipei City Govern- teachers are highly motivated to search ment. The ET Web established in 2006 for useful teaching materials in response and has been maintained continuously to their teaching requirements. Thus, the until now. The main purpose of the ET following hypothesis is proposed. Web is to improve teachers’ teaching efficacy and performance. The ET Web H5: Perceived usefulness has a positive has provided teaching resources, forums, effect on the use of an educational teaching tips, news, and information. portal. The teaching resources section provides different subjects of teaching resources including Mandarin, English, math, society, science and life technology, health and physical education, arts and humani-

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ties, and integrated activity areas, etc. Subjects The teaching materials at the portal, which are shared and uploaded by teach- The data for this study were gath- ers, included approximately 2600 teach- ered through questionnaire survey. A ing resources by 2014. The forums sec- questionnaire was designed and sent to tion provides channels for teachers to 25 elementary schools in Taipei, Tai- discuss their teaching problems and to wan. The elementary school teachers share their teaching experience. The completed self-reported questionnaires. teaching tips section provides useful The survey was conducted from April to guides and tools for classroom manage- June 2015. A total of 750 surveys were ment and administrative operations. The distributed and a total of 531 responses news and information section provides (70.8%) were received. Due to missing timely and important educational news data and outliers, this study obtained an and information. effective response rate of n=512 (68.3%). Measures The subject pool consisted of 355 All research variables were meas- (69.3%) female and 157 (30.7%) male ured using multi-item scales. Items se- respondents. About half of the participa- lected for the constructs of the research tions (256 out of 512, 50%) were be- mainly adapted from prior studies to tween 30 and 39 years old. The subjects ensure content validity. averaged 13 years of teaching experience and 457 subjects (89.3%) had used The three of Big Five personality the Internet more than 14 years. All traits (openness to experience, extraver- teachers had completed one college or sion, and conscientiousness) all were university degree. measured by 6 items extracted from the 44 item questionnaire of the Big Five Data analysis Inventory (BFI; John, Donahue, & Kentle, 1991). The scale for perceived The partial least squares (PLS) ap- playfulness was measured by 6 items proach was conducted to test the re- adapted from Moon and Kim’s (2001) search model. The PLS is a structural study. Items measuring perceived use- equation modeling (SEM) technique and fulness were taken and modified from can simultaneously examine the meas- previous studies (Davis, 1989). The use urement model and the structural model of an educational portal was measured in one model. by two items adapted from Moon and Results Kim’s (2001) study. All above items were scored on a Likert scale from 1 to Assessment of the measurement model 5, with a 1 rating indicating strong disa- greement and a 5 rating indicating strong The PLS was used to assess the agreement. psychometric properties of the scale. Psychometric properties of the scales were assessed in terms of internal

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Table 1. Assessment of the measurement model

Variables CR Cronbach’ alpha Conscientiousness (CON) 0.90 0.86 Openness to experience (OPE) 0.88 0.84 Extraversion (EXT) 0.90 0.86 Perceived usefulness (PU) 0.91 0.87 Perceived playfulness (PP) 0.92 0.90 Use of an educational portal (UEP) 0.90 0.78

consistency, convergent validity, and discriminant validity. The study used Assessment of the structural model composite reliability values (CR) and Cronbach’s alpha coefficients to assess Figure 2 reveal the results of the reliability and internal consistency of path analysis. The estimated path effects constructs. The results in Table 1 (β value), levels of significance (P value), showed that all CR and Cronbach’s al- and explained variance using a boot- pha coefficients exceeded the 0.70 strapping procedure (N=1000). To eval- threshold suggested by Bagozzi and Yi uate the full model, the resulting struc- (1988). The results showed that all con- tural model shows R 2 of 0.55 for the use structs exhibited adequate internal con- of an educational portal. sistency and reliability. As can be seen, the results showed To evaluate discriminant and con- that conscientiousness had a significant vergent validity, the study examined effect on perceived usefulness ( β=0.31, whether all items loaded greater than 0.7 P<0.001). H1 was supported. Openness on their respective construct. Cross- to experience had a significant effect on loadings of items are given in Table 2. perceived usefulness (β=0.36, P<0.001) Due to low factor loading for item and perceived playfulness (β=0.37, CON5, the study dropped the item. The P<0.001). Thus, H2 and H3 were both modified loadings showed a clear dis- supported. Extraversion had a significant criminant and convergent validity for all effect on perceived playfulness ( β=0.26, constructs. Table 2 also demonstrates P<0.001) and hence H4 was supported. satisfactory convergent validity since Perceived usefulness (β=0. 22, P<0.001) average variance extracted (AVE) for all and perceived playfulness (β=0. 58, constructs exceeded 0.50 (Fornell & P<0.001) both significantly influenced Larcker, 1981). Since above analyses the use of an educational portal. H5 and exhibited adequate internal consistency, H6 were supported. convergent validity, and discriminant validity, hence, the results indicated acceptable psychometric properties.

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Table 2. AVE and PLS cross-loadings

UEP EXT PU PP CON OPE AVE 0.79 0.60 0.72 0.67 0.64 0.56 UEP1 0.90 0.28 0.49 0.66 0.32 0.38 UEP2 0.91 0.35 0.58 0.64 0.35 0.38 EXT1 0.23 0.74 0.28 0.21 0.35 0.19 EXT2 0.33 0.75 0.39 0.34 0.42 0.26 EXT3 0.27 0.72 0.30 0.28 0.39 0.32 EXT4 0.26 0.82 0.38 0.28 0.41 0.25 EXT5 0.32 0.82 0.42 0.34 0.35 0.26 EXT6 0.36 0.77 0.45 0.31 0.45 0.34 PU1 0.55 0.45 0.85 0.57 0.42 0.46 PU2 0.48 0.38 0.81 0.52 0.35 0.44 PU3 0.52 0.41 0.86 0.55 0.36 0.38 PU4 0.58 0.42 0.86 0.56 0.47 0.42 PP1 0.52 0.35 0.50 0.75 0.31 0.31 PP2 0.45 0.14 0.35 0.70 0.22 0.33 PP3 0.65 0.33 0.57 0.88 0.32 0.40 PP4 0.64 0.34 0.55 0.87 0.29 0.36 PP5 0.60 0.32 0.58 0.85 0.37 0.42 PP6 0.63 0.37 0.59 0.84 0.36 0.41 CON1 0.31 0.48 0.45 0.31 0.86 0.36 CON2 0.35 0.45 0.41 0.33 0.87 0.38 CON3 0.26 0.36 0.36 0.29 0.80 0.37 CON4 0.32 0.42 0.32 0.28 0.75 0.30 CON6 0.35 0.33 0.34 0.34 0.71 0.44 OPE1 0.27 0.19 0.31 0.31 0.30 0.72 OPE2 0.31 0.29 0.46 0.38 0.40 0.84 OPE3 0.26 0.32 0.36 0.30 0.35 0.75 OPE4 0.41 0.30 0.41 0.38 0.39 0.74 OPE5 0.28 0.25 0.40 0.31 0.30 0.72 OPE6 0.42 0.30 0.42 0.38 0.39 0.70

Figure 2. Model parameters for the research model: ***P<0.001 60 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Implications First, since less research has investigated how general personality traits The practical implications for policy- affect teachers’ use of an educational makers, school administrators and sys- portal, the theoretical contribution of the tem designers when implementing and current study is to explore and validate designing educational portals are out- the effects of three of the Big Five per- lined below. sonality traits (conscientiousness, openness to experience, and extraversion) on First, the educational portals can elementary school teachers’ use of an provide in-depth, sophisticated teaching educational portal through cognitive who are likely to have positive beliefs beliefs. about learning and searching teaching materials from the educational portals. Second, since our analytical results showed that conscientiousness, openness Second, low conscientious, low to experience, and extraversion all play openness, and introvert teachers might an important role in predicting teachers’ have negative cognitive beliefs about the use of an educational portal, policymak- use of educational portals. Therefore, we ers, school administrators, and systems suggest that elementary school adminis- designers can provide more customized trators may consider these traits during content and functions based on teachers’ the selection process. personality traits.

Third, the analytical results indicated Finally, the results found that cog- that perceived playfulness is the most nitive beliefs, including perceived use- important indicator of the use of an edu- fulness and perceived playfulness, have cational portal. Thus, policymakers and more explanatory power than any one of school administrators can actively pro- these factors alone. Therefore, the model vide more interesting content. could add more value on educational portal acceptance and use research. Conclusions Limitations and Future Studies The objective of the study was to provide policymakers and researchers First, as this study used a snapshot with an improved understanding of how approach, a longitudinal approach elementary school teachers respond to an should be considered in future research. educational portal and how to increase Second, this study explores the effects of elementary school teacher’ use of the general personality traits on teachers’ portal. The analytical results described use of an educational portal. Future stud- above have three main contributions for ies can extend the effects of other per- national and local education authorities sonality factors on teachers’ use of an and researchers: educational portal.

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References Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation Amiel, T., & Sargent, S. L. (2004). models with unobserved variables Individual differences in Internet and measurement error. Journal usage motives. Computers in of Marketing Research , 18 (1), 39- Human Behavior , 20 (6), 711-726. 50.

Bagozzi, R. P., & Yi, Y. (1988). On Goldberg, L. R. (1992). The develop- the evaluation of structural equa- ment of markers for the Big-Five tion models. Journal of the Acad- factor structure. Psychological emy of Marketing Science , 16 , Assessment , 4, 26-42. 74–94. John, O. P., Donahue, E. M., & Kentle, Barrick, M. R., & Mount, M. K. (1991). R. L., (1991) The big five inven- The big five personality dimen- tory - version 4a & 5a. Berkeley, sions and job performance: A me- CA., The University of California ta-analysis. Personnel Psychology , at Berkelely, Institute of Personal- 44 , 1–26. ity and Social Research.

Conard, M. A. (2006). Aptitude is not Maddi, S. R. (1989). Personality theo- enough: How personality and be- ries: A comparative analysis . havior predict academic perfor- Chicago, Dorsey Press. mance. Journal of Research in Personality , 40 (3), 339-346. McCrae, R. R., & Costa Jr., P. T. (1997). Conceptions and corre- Costa, P. T., & McCrae, R. R. (1992). lates of Openness to Experience. Revised NEO Personality Inven- In R. Hogan, J. A. Johnson, & S. tory (NEO PI-R) and NEO Five- R. Briggs (Eds), Handbook of Factor Inventory (NEO-FFI): Personality Psychology (pp.825- Professional manual . Odessa, FL: 847). Academic, Orlando, FL. Psychological Assessment Re- sources. Moon, J. W., & Kim, Y. G. (2001). Extending the TAM for a World- Davis, F. D. (1989). Perceived useful- Wide-Web context. Information ness, perceived ease of use, and & Management , 38 (4), 217-230. user acceptance of information technology. MIS Quarterly , 13 (3), 319-340.

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THE CASE STUDY OF STUDENT’S MOTIVATION IN LEISURE PARTICIPATION AND LEISURE OBSTRUCTION AT ELEMENTARY LEVEL IN TAIWAN.

Chien-Hui Lin Yeang Der Senior High School, Taiwan (R.O.C.) [email protected]

Hui-Chuan Huang (Primary Author), Department of Physical Education, National Taiwan Normal University, Taiwan (R.O.C.) [email protected]

Yi-Hsien Lin Department of Travel and Tourism Management, Da-Yeh University, Taiwan (R.O.C.) [email protected]

Yu-Lin Lee Physical Education Office, Tamkang University, Taiwan (R.O.C.) [email protected]

Abstract

The purpose of this study is to explore the current situation of the fifth and sixth graders’ participation motivation and obstructive factors of leisure sports in elementary schools in Houli District of Taichung City. It further compares the differences between different demographic variables. The research tool was self-compiled “questionnaire concerning the schoolchildren’s participation motivation and obstruc-

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tive factors of leisure sports in elementary schools”. The subjects were the fifth and sixth graders of elementary schools in Houli District of Taichung City. The questionnaire survey was conducted on random sampling. The population was elementary school students in Taichung City in 2014 academic year. The survey period was from January 10, 2015 to January 26, 2015. A total of 570 valid questionnaires were retrieved. The data were analyzed with descriptive statistics using SPSS for Win- dows 18.0. The differences of participation motivation and obstructions of leisure sports under demographic variables (school, grade, gender, family background) were analyzed with t test and one-way ANOVA. The research results are as follows: 1. Among students’ participation motivations of leisure sports in elementary schools in Houli District of Taichung City, most of them engage in leisure sports to enhance their physical ability. 2. There are significant differences in the fifth and sixth graders’ participation motivation of leisure sports in elementary schools in Taichung City under different demographic variables. 3. The obstructive factors of leisure sports are widespread. Poor sports environment is the factors hindering most of the schoolchildren from participating in leisure sports. 4. There are differences in the obstructive factors of the fifth and sixth graders’ leisure sports in elementary schools in Taichung City under different demographic variables. 5. There is a negative correlation between students’ participation motivations of leisure sports in elementary schools in Houli District of Taichung City and the obstructive factors of leisure sports.

Key Words: elementary school, fifth and sixth graders, leisure sports, participation motivation of leisure sports, obstructive factors

Introduction implemented by the government since 2001, people have also become more As society continues to age quick- aware of the importance of “leisure” ly, people are developing a higher and “sports” to a better quality of life awareness of health and greater needs and life-long health. However, as it for leisure activities. Since the weekly could be clearly seen from an examina- two-day-off system was completed tion on the educational practices under

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this light, although the Ministry of Ed- graders are standing at the critical junc- ucation has been working to promote ture between childhood and adoles- educational reforms in recent years, the cence, the establishment of a correct values hidden behind the saying “The outlook at this point is more than nec- worth of other pursuits is small, the essary. Cheng (1994) suggested that study of books excels them all.” are leisure sports are different from other still deeply rooted in the minds of most leisure activities in that they embodied parents. By thus prioritizing academic both leisure and sports, hence the many studies, the importance of leisure to benefits they could bring about. They children in terms of their need for rec- constituted a unique activity unparal- reation, sense of achievement and leled by other leisure activities. In even greater physical health is ignored. To better cases like physical leisure activi- make things worse, due to the explo- ties, a multiplicity of physiological sion of the Internet and information benefits had been detected like greater technology in our times, a great number cardio-respiratory fitness, stronger of students are addicted to online muscle strength, better bone health and games, making friends online, Face- weight management (Wankel & Berger, book and other social networking sites. 1991). Since primary school is the be- This means that the leisure choices for ginning of primary education and learn- our youngsters have been completed ing, our children, if enabled to establish changes. Sports, which used to be a a current outlook toward leisure sports favorite means of relaxation in the past, and so motivated as to be glad to do are thus abandoned (Wang, 2003). How sports outdoors, will have a positive to motivate our students to participate mental and physical development and in leisure sports again and build a better chances to develop a good leisure sound body via regular exercise, there- sports habit when they come of age. fore, has become a common concern With primary students of higher grades for the whole society. as the subjects of researcher, therefore, this study is set out to probe into the Primary school students are the factors that are related to their partici- future of a country. Their somatic fit- pation in leisure sports. In the past, ness, therefore, is closely linked to the studies on the participation in leisure overall competitiveness of a country. sports were concerned mostly with the Given that primary education is foun- analysis of the two variables of motiva- dational to every other higher education tion and constraints. Since motivation and that primary students of higher is the driving force behind all aspects

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of human behavior (Yoon and Uysal, jects, the results of which include a 2005), participation motivation and swimming pool and two sports parks. participation behavior is correlated. Local residents are therefore provided Participation constraints, on the other with broader sports space and better hand, will inhibit or reduce the number sports environment. The Office has of participation and sense of joy in rel- moreover held various events and com- evant activities. They will interfere petitions for participants from around with participation in such a continuous the country. In this way, the awareness manner that the person concerned will of leisure sports, as well as the number find it impossible to participate in such of participants in these sports, is sub- activities again (Crawford & Godbey, stantially increased. Although there are 1987; Jackson, 1988). It is moreover only six primary schools in Houli Dis- found in past studies that leisure partic- trict, every school is featured by the ipation and constraints are also corre- development of different sports, thus lated. Individuals will be faced with enabling the students to improve physi- different constraints as their motivation cal and mental health, cultivate interest, and need for leisure participation varies. extend social network, learn to work as The extent of leisure constraints, like- a team, manage stress, etc. via partici- wise, is directly influential on the indi- pating in these sports activities. Based viduals' leisure participation degree and on this idea, this study sets out to inves- intention (Iwasaki, 2003). With partici- tigate the relationship between the lei- pation and constraints as the two varia- sure participation of primary school bles, therefore, this study is set out to students of higher grades in Houli Dis- probe into their relationship with the trict, participation motivation and lei- leisure participation of primary students sure constraints with the aim to under- of higher grades. stand the reasons for the students' leisure participation and identify the lei- Houli District is located along sure constraints. It is hoped that the TRA Taichung line. Although boasting results of the study could be used as a mere population of a little more than references for relevant authorities in 50,000, the Houli Horse Farm and Ho- their formulation of strategies, thus fung Bicycle Green Way there consti- increasing the participation in leisure tute the destination of numerous tour- sports and creating more opportunities ists in the holiday season. In recent for such participation. The ultimate years, the District Office has been goal is to motivate the primary school working on several construction pro- students to set a higher physical fitness

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goal and cultivate their interest and H2: Demographic variables are sig- ability to participate in leisure sports in nificantly different from leisure the future. sports constraints. H3: Participation motivation in lei- The purposes of this study thus sure sports and leisure sports include: constraints are significantly 1. To understand the motivation factors negatively correlated to each and constraints for the primary school other. students of Houli District in terms of their participation in leisure sports. Research Subjects 2. To analyze the motivation factors and constraints for the participation of Pretest Sample primary school students in leisure sports in cases of demographic differ- Wang (1999) suggested, "The ences. size of the pretest sample should be at 3. To analyze the relevant circumstanc- least 100 in order to meet the statistical es concerning the motivation factors objectives." This study selected the and constraints for the participation of samples randomly from the two classes primary school students in leisure of five-graders and two classes of six- sports. graders in Neipu Elementary School, who were then given the pretest ques- Method tionnaire. A total of 150 questionnaires were distributed. After the eight invalid Research Structure ones (not fully filled in) were removed, there were a total of 142 questionnaires, On the basis of the research pur- making the collection rate of valid poses and findings drawn from relevant questionnaires 94.6%. literature review, the following hypotheses are proposed in this study: Test Sample

H1: Demographic variables are sig- After an analysis was conducted nificantly different from partici- on the results of the pre-test question- pation motivation in leisure naire, a revised questionnaire was dis- sports. tributed in the six primary schools in Houli District on January 12, 2015 to randomly selected samples. This study

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used "absolute precision" to evaluate tionnaire in this study is designed after the required sample size (Huang, 2000). referring to mainly to such studies as Considering that reliability of standard Heapes (1978), Iso-Ahola (1982), Mur- deviation is 0.95 when the deviation ray(1983), Klint and Weiss(1987), between population and sample is set at Murray and Nakajima(1999), Weissin- 5% and confidence interval at 95%, it is ger and Bandalos (1995) and construct- calculated that the sample size should ed thus of such three dimensions as be 385 to ensure the precision required sense of achievement, physical fitness by the research and 384 samples should and interpersonal relationship. Accord- be selected when the reliability is 95% ing to the survey data provided by the for the study to be representative. In respondents, the 5-point Likert scale, order to avoid that the sample size ranting from 5 (strongly agree) to 1 should be find lacking, a total of 600 (strongly disagree). The lower the score questionnaires were distributed. After is, the more satisfied the respondent is the 30 invalid ones (not fully filled in) with the experience and vice versa. were removed, there were a total of 570 a. Item analysis: After the pretest ques- questionnaires, making the collection tionnaires were collected, an item anal- rate of valid questionnaires 95.0%. ysis was conducted based on SPSS for Windows 18.0 to see the internal con- Research Tools sistency between the questions. In order to avoid the occurrence of excessive This study uses the "Question- rejection, any item with a significance naire on the Motivation and Constraints level lower than 0.05 was deleted. After for Primary School Students in Houli the item analysis, a reliability test was District, Taichung City to Participate in conducted via Cronbach's α estimate to Leisure Sports" as research and data obtain the Alpha coefficient value for collection data. This questionnaire is the sports participation motivation at its thus hereby elaborated as follows. various dimensions, as well as the Al- pha coefficient value after the questions (1) Basic personal information: includ- were deleted. According to the results ing gender, name of school, grade, par- of the item analysis, no questions were ticipation in sports teams, sports envi- deleted. ronment and educational background of b. Factor analysis: After the item analy- parents, as the basis for further analysis. sis was conducted on the questionnaires, (2) Questionnaire on the motivation to KMP Measure of Sampling Adequacy participate in leisure sports: The ques- was performed respectively on the var-

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ious sections of the questionnaire to Tungatt, and Townsend (1981), Craw- make sure the adequacy approximated ford, Jackson and Godbey (1991) and 1 and Bartlett's Test of Sphericity (Chiu, Dishman, (1991). The questions in this 2000) was carried out. Since the test questionnaire are concerned with the results were significant, factor analysis two constructs of individual perfor- was deemed appropriate for this study. mance and emotional factors, and Principal component analysis and sports ground, facilities and interper- Varimax rotation were then used to sonal factors and the scoring is based extract the common principal factors, on the 5-point Likert scale. by which the question items whose factor loading did not reach 0.30 were a. Item analysis: A Cronbach's α esti- deleted. According to the results, no mate was conducted to obtain the Al- question items were deleted. From the pha coefficient value for the sports par- 20 question items, three factors were ticipation motivation at its various di- extracted, by the correlation with which mensions, as well as the Alpha coeffi- the constructs were renamed. The first cient value after the questions were factor was named as "sense of deleted. According to the results of the achievement", the second as "physical item analysis, no questions were delet- fitness" and the third as "interpersonal ed. relationship", which accounted for 55.616% of the total explained varia- b. Factor analysis: From the 20 question. tion items, two factors were extracted, c. Reliability analysis: A reliability by the correlation with which the con- analysis was then conducted on the structs were renamed. The first factor three constructs of the sports participa- was named as "individual performance tion motivation, the Alpha coefficient and emotional factors" and the second of reliability of which were found re- as "sports ground and facilities and spectively to be: 0.901 for "sense of interpersonal factors", which accounted achievement", 0.773 for "physical fit- for 66.174% of the total explained vari- ness" and 0.7908 for "interpersonal ation. relationship". c. Reliability analysis: A reliability (3) Questionnaire on leisure sports con- analysis was then conducted on the two straints: The questionnaire is designed constructs of satisfaction with the mainly after summarizing the research sports, the Alpha coefficient of reliabil- tools of such studies as Hanin (1980), ity of which were found respectively to Crawford & Godbey (1987), Boothby, be: 0.942 for "individual performance

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and emotional factors" and 0.937 for fitness". This result is consistent with "sports ground and facilities and inter- Klint and Weiss (1987), Murray and personal factors". Nakajima (1999), and Vallerand and Rousseau (2001). Result & Discussion Analysis on Leisure Sports Constraints Analysis of the Demographic Features It is found in this study that the After integrating the data, it is main constraints for primary school shown that 53.0% of the primary stu- students of higher grades to participate dents are members of sports teams and in leisure sports include "poor sanita- 90.9% of them like to have PE classes. tion of the sports ground and facilities", In terms of the grade the students are in, "lack of spare time", "lack of adequate 51.8% of them are fifth graders. This is information" and "the unfamiliarity consistent with Iso-Ahola (1989) that with the sports rules". This result is leisure motivation will change with consistent with Crawford & Godbey times and stages of life. (1987), Boothby, Tungatt, and Town- send (1981), Iso-Ahola and Mannell Participation motivation in (1985) and Crawford, Jackson and leisure sports Godbey (1991).

It is found in this study that the Comparison of the differences in the main motivation for primary school participation motivation and con- students of higher grades to participate straints for leisure sports when it comes in leisure sports include "the chances to to the demographic variables improve one's physical fitness", "the desire to better one's sports skills", "the Regarding differences in the par- hope to learn a certain leisure sport", ticipation motivation in leisure sports "the possibility of weight control" and when it comes to the demographic vari- "the urge to make more friends". As is ables, as can be seen from Table 1, shown by the research findings, prima- among the various constructs of partic- ry school students of higher grades are ipation motivation in leisure sports in aware of the fact that having exercises relation to the demographic variables, could improve one's physical health, the most significant differences are hence their higher motivation toward seen in construct of "sense of achieve- "sense of achievement" and "physical ment". This means that students in this

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district hold starkly different expecta- trict, Taichung City in leisure sports tions toward self-fulfillment in the ex- when it comes to the demographic vari- ercises. If these differences could be ables. reduced, more students in this area are sure to participate in leisure sports. After tested by appropriate statis- Moreover, significant differences are tical methods, the results (see Table 1) detected in "experience in different are found to coincide with those pro- school teams", "experience in sports posed in Ebben, and Brudzynski (2008), clubs" and "interest in sports" when it Ingledew and Markland (2008). comes to the demographic variables, meaning that relevant sports experience (2) Differences in the constraints for is influential on participation motiva- leisure sports when it comes to the var- tion. It is therefore advisable to estab- ious demographic variables lish school teams and work vigorously As shown in Table 2, among the vari- to develop and design opportunities for ous constructs of leisure sports con- club participation and sports in order to straints in relation to the demographic stimulate the students' motivation in variables, equally significant differ- sports participation. Of all the demo- ences are seen in the constructs of "in- graphic variables concerning primary dividual performance and emotional school students of higher grades, signif- factors" and "sports ground, facilities icant differences are detected in sports and interpersonal factors". This means participation motivation when it comes that individual performance and sports to "gender", "experience in different facilities are of equal importance to the school teams", "experience in sports students in this district. If the teachers clubs" and "interest in sports". When it could give the students so much more comes to "differences between schools", information and encouragement that differences are found in "sense of they could be better satisfied with their achievement" and "interpersonal rela- own performance, the participation tionship" and not in any other con- constraints for these primary school structs. students are sure to be reduced. Moreo- ver, significant differences are detected H1: Significant differences are found in in "experience in different school the participation motivation of primary teams", "experience in sports clubs" students of higher grades in Houli Dis-

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Table 1. Summary on the significant differences in relation to participation motivation

Participation motivation in leisure sports Results of Demographic vari- Sense of Interpersonal the hypoth- ables Physical fitness achievement relationship esis test Partially Gender * * supported Not sup- Grade ported Experiences in * * * Totally different school supported teams Experiences in Totally * * * sports teams supported Size of the sports Not sup-

ground ported Totally Interest in sports * * * supported Differences among Partially * * schools supported Teaching mode of Not sup- the teachers ported Educational back- Not sup- ground of the par- ported ents * represents that significant differences are detected in this dimension and "interest in sports" and "differences higher grades in Houli District, Tai- between schools" when it comes to the chung City are not significant. demographic variables, meaning that these factors are greatly influential on After tested by appropriate statis- constraints for the primary school stu- tical methods, the results (see Table 2) dents of higher grades to participate in are found to coincide with those pro- leisure sports. "Differences between posed in Allison and Makin (1999), schools", in particular, are so important Arzu, Tuzun, and Eker. (2006), Hohepa, because school tend to develop their Schofield, Kolt (2006), Ebben, and own characteristic sport. Brudzynski (2008).

H2: Differences among demographic Analysis of the correlation between the variables in relation to the constraints participation motivation and con- for leisure sports of primary students of straints for leisure sports

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Table 2. Summary on the significant differences in relation to the constraints

Leisure sports constraints Results of the Demographic variables Individual performance and Sports ground, facilities and hypothesis test emotional factors interpersonal factors Partially support- Gender * ed Grade Not supported Experiences in different Totally supported school teams * * Experiences in sports Totally supported teams * * Size of the sports ground Not supported Interest in sports * * Totally supported Differences among Totally supported schools * * Teaching mode of the teachers Not supported Educational background Not supported of the parents * represents that significant differences are detected in this dimension

In this section, a Pearson product As can be seen from the results, - moment correlation analysis is con- between the participation motivation ducted on the three constructs of leisure and constraints for leisure sports, ex- sports participation motivation (sense cept for the significantly positive corre- of achievement, physical fitness and lation when it comes to "interpersonal interpersonal relationship) and the two relationship, only middle or low nega- constructs of the constraints (individual tive correlation has been detected. In performance and emotional factors, other words, an increase in the sports sports ground, facilities and interper- participation motivation will result in a sonal factors) in order to probe into the reduction in the constraints. This result correlation between the motivation and is consistent with Caroll and Alexan- constraints for primary school students dris (1997), Iwasaki (2003). The differ- of higher grades to participate in leisure ences in the motivation to participate in sports. As has been proposed in Chang leisure sports caused by "interpersonal (1999), the correlation should be relationship" might be traced back to deemed as low when the correlation the fact that interpersonal relationship coefficient is below .30, middle when is at the same time a source of con- the correlation coefficient is .30~.70, straints for primary school students of high when the correlation coefficient higher grades. is .70~.90 and extremely high when the correlation coefficient is over .90. 73 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Table 3. Table of Detailed Relevant Analyses of the Various Constructs of the Motivation and Constraints for Leisure Sports Participation

Participation motivation in leisure Participation constraints for leisure Variable sports sports Sports Individual ground, fa- Sense of Physical Interpersonal performance Variable Dimension cilities and achievement fitness relationship and emotion- interpersonal al factors factors Participation Sense of achievement - - - - motivation Physical fitness .710* - - - in leisure Interpersonal relation- sports -.316* -.283* - - ship Individual performance Participation -.401* -.317* .862* - and emotional factors constraints Sports ground, facilities for leisure and interpersonal fac- -.328* -.286* .916* .833* sports tors *p<.05

Table 4. Table on the Analysis of the Correlation between the Motivation and Constraints for Leisure Sports Participation and on the Hypothesis Test

Leisure sports constraints Results of the hy- Individual perfor- Sports ground, facili- pothesis test Partici- mance and emotional ties and interpersonal pation moti- factors factors vation in Sense of * * Supported leisure achievement sports Physical * * Supported fitness Interpersonal * * Supported relationship *p<.05

H3: Participation motivation in leisure Conclusion sports and leisure sports constraints are significantly correlated to each other 1. Motivation factors for the pri- when it comes to the primary students mary school students of Houli District of higher grades in Houli District. in terms of their participation in leisure sports.

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The sports participation motiva- Of all the demographic variables con- tion of primary school students of high- cerning primary school students of er grades is mainly comprised of such higher grades, significant differences three factors as "sense of achievement", are detected in sports participation con- "physical fitness" and "interpersonal straints when it comes to "gender", interactions", as ranked by their influ- "experience in different school teams", ence. "experience in sports clubs" and "interest in sports". When it comes to other 2. Constraints for the primary demographic variables, no significant school students of Houli District in differences are found. terms of their participation in leisure sports. 5. Correlation between the participation In terms of the overall scores, "sports motivation and constraints for leisure ground, facilities and interpersonal fac- sports. tors" outscores "individual performance Between the participation motivation and emotional factors". and constraints for leisure sports, except for the significantly positive corre- 3. Demographic variables and lation when it comes to "interpersonal participation motivation in leisure relationship, only middle or low nega- sports. tive correlation has been detected. Of all the demographic variables concerning primary school students of Suggestions higher grades, significant differences are detected in sports participation mo- 1. Suggestions for the educational per- tivation when it comes to "gender", sonnel devoted to promoting physical "experience in different school teams", education in schools. "experience in sports clubs" and "interest in sports". When it comes to "dif- (1) 'Sense of achievement" is a vital ferences between schools", differences component of the sports participation are found in "sense of achievement" motivation for primary school students and "interpersonal relationship" and not of higher grades. It is suggested therein any other constructs. fore that planners of PE courses should place the emphasis on courses that 4. Demographic variables and con- could increase peak experience and straints for leisure sports. incur effective feedbacks.

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(2) As can be seen from the results of It is therefore suggested that gender this study, an important driving factor equality be taken into consideration behind "sense of achievement" is "the during course design and the opportuni- possibility to increase one's physical ties for sports participation be diversi- fitness". It is therefore necessary for PE fied so that the students could have teachers of primary school students of more participation experiences. It is higher grades to respond to the needs of moreover advisable to design fun the students for greater physical fitness teaching and physical activities to in- and increase their satisfaction with their crease the students' participation moti- individual performance. It is also ad- vation and reduce the participation con- visable to inculcate the knowledge constraints. cerning physical fitness to students of different grades in a gradual manner. 2. Suggestions for future studies.

(3) Of all the constraints for primary The subjects of this study are lim- school students of higher grades to par- ited only to the primary school students ticipate in leisure sports, "sports ground, of higher grades in Houli District, Tai- facilities and interpersonal relationship" chung City. If future researchers should is the most important. Planners of PE set out to probe deeper into relevant courses are therefore suggested to take issues on primary school students of the current teaching and learning envi- higher grades, it is advisable to extend ronment on the campus and select an the scope of research subjects to inappropriate sports ground for the clude primary school students of higher course. Only in this way could the con- grades from other cities and counties so straints be reduced and increase the that the study could be broad and longi- students' satisfaction with the courses. tudinal in nature. Qualitative studies devoted to the analysis of underlying (4) "Gender", "experiences in different meaning of the data are also suggested school teams", "experiences in sport so that the deeper and more objective teams", "interest in sports" and "differ- investigations could be conducted on ences among schools" are important in the issue of the motivation and con- terms of both the motivation and constraints for the participation in leisure straints for leisure sports participation. sports.

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INFLUENCE ON KINDERGARTEN TEACHER’S JOB SATISFACTION FROM KINDERGARTEN ORGANIZATION CULTURE AND WORK PRESSURE

Jung Tsun Liu Institute of Management Chang Jung Christian University, Taiwan, R.O.C. [email protected]

Abstract

After its official implementation of Integration of Early Childhood Care and Education Policy in 2012, Taiwan has become the first country across Asia to implement Integration of Early Childhood Care and Education. However, numerous early childhood education entrepreneurs and teachers speak frankly that Integration of Early Childhood Care and Education has given too little time to early childhood education entrepreneurs, teacher adjustment, the number of students in classes, equipment, personnel allocation ad adaption, let alone temporary childcare and night-time childcare’s tremendous pressure on kindergarten teachers. All these may affect kindergarten teacher’s teaching performance. Therefore, this research intends to explore what job satisfaction and work pressure are for current kindergarten teachers, and if kindergarten organization culture and teacher’s work pressure also affect job satisfaction. To collect kindergarten teachers’ comments, this research utilizes questionnaires to interview 188 Taipei public and private kindergarten teachers. The result indicates that teachers interviewed have universally asserted that their workloads are heavier than previous ones and their sense of work achievement and sense of remuneration satisfaction have been lowered dramatically since the implementation of Integration of Early Childhood Care and Education. To enhance teacher’s job satisfaction, 80 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

we can start from thinking of perspectives of workload, inter-personal relationship, work feedback, teamwork and teaching autonomy. Accordingly, this research has presented some research recommendations.

Keywords: Kindergarten, Organization Culture, Work Pressure, Job Satisfaction

dergartens will increase temporary child- Preface care and night-time childcare in order to reduce burdens on dual-income families; Ever since the year of 2000, child- related laws and regulations are not yet in bearing ages for women of child-bearing place; both teachers and funding are insuf- age in Taiwan have increased year by year. ficient. Starting from 2012, teacher/ stu- The number of babies given birth has been dent ratio will be changed to 1: 8 (current decreasing. Going forward, population ratio is 1:13) across the board. This has could turn into negative growth (Depart- created different impacts to kindergartens ment of Household Registration, Ministry and day-care centers respectively, and it of The Interior, 2012). Decreased popula- also leads to the doubt that kindergarten tion over the years has created heavy bur- teacher standards are being lowered ac- dens of recruitment difficulty and opera- cordingly. Numerous kindergarten entre- tion pressure for kindergartens. Kinder- preneurs and teachers have spoken frankly garten is the first to suffer from fewer that Integration of Early Childhood Care children. For public kindergartens, they and Education has given too little time to have dropped from 66 children per kin- early childhood education entrepreneurs, dergarten in 1993 to 54 children per kin- teacher adjustment and adaptation. It is dergarten in 2004 (18% reduction). As for very difficult to get the number of stu- private kindergartens, they have dropped dents in classes, equipment and personnel from 112 children per kindergarten to 86 allocation to comply with requirements at children per kindergarten (23% reduction). the first time, let alone temporary child- Fewer children have already impacted care and night-time childcare’s tremen- kindergartens (Ministry of Education, dous pressure on kindergarten teachers 2006). (Duan, Hui-Yin, Ma, Tsu-Lin, 2013). In addition to the issue of fewer From these it is understood that children, numerous public and private kindergarten teachers not only face with kindergartens and day-care centers have fewer children impact, they also need to presented related discussions on the Inte- explore more diversified recruitment gration of Early Childhood Care and Edu- channels and teaching pressure, and need cation Policy since Taiwan’s official to work together with kindergartens to co- launch of this policy back in 2012. Such adjust and co-adapt to changes incurred discussions included: after integration of from Integration of Early Childhood Care early childhood care and education, kin and Education. On the other hand, as per

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Wang, Mei-Chin’s (2013) research find- of value, belief or religion owned and ing, almost all kindergarten teachers feel shared by all members of the organization the burden generated from work pressure. (Ouchi, 1981). Tunstall and Tucker con- The higher kindergarten teacher’s percep- sidered that organization culture repre- tion of work pressure is, the lower their sents custom, habit, ritual or symbol of an job satisfaction is. organization (Tunstall, 1986). Peter and Waterman considered that organization Mclaughlin indicated in his long culture is a behavioral pattern or behav- term case study comparison research re- ioral norm complied by all members of port presented in 1995 that the reason for the organization (Peter & Waterman, performance differences from students in 1982). While some scholars considered two schools might be because of teacher- that organization is organization mem- learning community formed among teach- ber’s attitude or cognition (Robbins, 2000), ers in the school with better performance. law of communication (Schein, 1993), or There were close interaction, cohesion, communication of information (Borman & passion and commitment among teachers. Motowidlo, 1993). There are also some Accordingly, the whole school presented a scholars who considered organization positive organization culture (Deal & Pe- culture as a fundamental hypothesis of terson,1999). As such, organization cul- philosophical level which serves as the ture is also a critical factor affecting ultimate instruction guideline for organi- teacher’s job satisfaction and performance zation members ’thinking and problem (Cheng, Jun-Yuan, 2013; Sun, Kuo-Hwa, solving" (Schein, 1993; Cheng, Jun-Yuan, 2013; Lee, Jin-Jin, 2013; Wang, Su-Jen, 2013). 2013; Liu, Sho-Ji, 2012). Ebert and Griffin (2000) further Therefore, this research intends to explained that organization culture can explore current kindergarten teacher’s job assist an organization to achieve the fol- satisfaction and work pressure under few- lowing purposes: 1. Organization culture er-children wave and new launch of Inte- can lead employee to work hard and assist gration of Early Childhood Care and Edu- employee to work toward common goal; 2. cation policy, and if kindergarten organi- Organization culture can assist new em- zation culture and teacher work pressure ployee in learning expected behavioral also affect job satisfaction. It is hoped that pattern; 3. Organization culture provides result of this research could serve as a each company with its unique features. feedback and reflection on policy promo- Robbins (2000) also pointed out that or- tion. ganization culture can serve as a meaning Document Exploration determination and control mechanism in order to guide and shape organization Organization Culture member’s attitude and behavior. Addi- tionally, some scholars presented organi- Research conducted by scholars, zation culture measurement perspectives including Ouchi, have considered that which can serve as references for this re- organization culture represents perception search (Wang, Mei-Chin, 2013; Wang, Su-Jen, 2013; Lee, Jin-Jin, 2013) : Schein 82 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

(1993) first categorized organization cul- Liu, Shi-How (2013) and Chou, Jia- ture nature into 6 perspectives of: 1. Rou- Yo (2005) quoted Michie’s (2002) views tine behavioral pattern. 2. Norm. 3. Per- on pressure and asserted that pressure is ception of values. 4. Policy. 5. Rules. 6. the result of interaction between an indi- Climate and atmosphere. Campbell (1990) vidual and organization environment. presented 15 perspectives after organizing When an individual is placed in an uncer- related documents: 1. Confliction solution. tain, uncontrollable, intimidating or un- 2. Culture management. 3. Customer ori- known environment, physically and men- entation. 4. Reform orientation. 5. Em- tally negative reaction may be generated ployee participation. 6. Definite goal. 7. once pressure is beyond an individual’s Human resource orientation. 8. Organiza- ability to handle (Liu, Si-How, 2013; tion identification. 9. Duty emphasis. 10. Hsieh, Jia-Yi, 2012; Jiang, Jia-Shun, 2012; Management style. 11. Organization focus. Wu, Min-Jun, 2012; Lee, Chin-Min, 2011; 12. Organization integration. 13. Perfor- Hsiao, Kuo-Cang, 2011). Work pressure mance orientation. 14. Remuneration ori- generally refers to pressure reaction in- entation. 15. Mission structure. Martin curred as a result of work related incident. (1992) also did a research and pointed out A comprehensive look at current domestic that modern organization culture should education environment changes indicates emphasize teamwork, employee autonomy, that teachers are not merely engaged in sense of trust, aggressive innovation and teaching and solving confusion. They now flexibility (Sun, Kuo-Hwa, 2013). Huang, need to assume several different roles and, Yin-Shan and Chi, De-Chang (2004) di- needless to say, work pressure incurred is vided organization culture measurement tremendous (Hsieh, Jia-Yi, 2012; Wu, scale into perspectives of operation phi- Min-Jun, 2012). This research also orga- losophy, customer orientation, teamwork nized previous teacher work pressure re- and active innovation. lated definitions which are listed in the following Table 1. Work Pressure

Table 1. Definitions of Teacher Work Pressure

Scholar Year Definitions of Teacher Work Pressure Kyr iacou & 1978 This is a kind of teacher’s negative emotional reaction (such as Sutcliffe anger, anxiety or depression) generated from requirements im- posed on teacher by teacher work role, and this may be accom- panied by physiological changes which may lead to sickness. Ne edle 1980 Teacher work pressure originates from differences between teacher’s needs, perception of values as well as expectation and career remuneration or work requirements, and teacher’s ability to meet with these needs. Moracco & 1981 Teacher’s work, teacher’s perception of work r equirements’ Mcfadden threat to self–respect and happiness, and coping mechanism used 83 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Scholar Year Definitions of Teacher Work Pressure to maintain stable condition will trigger changes to mental stable condition as well as physiological changes. Lee, Mei -Lin 2004 Upon a teacher’s engagement in work related teac hing activity, and when faced with potential work scenario factors or threaten- ing requirements, negative emotional feelings and nervous state incurred as a result of an individual’s inability to adapt accordingly. 。 Huang, Shu - 2004 With respect to teaching duty of a teacher, his or her own pe r- Ron ception of threat or negative feelings and even anxiety, nervous emotion or mental/physical disease generated from interaction process with people, things or situations in the environment of school. Wu, Zong - 2004 Wh en a teacher is faced with school work environment and in Da fields of teaching, administration, counselling and role playing, his/her imbalance generated between internal perception and external environment which leads to mental, physiological and cognitive sense of pressure as well as negative emotion and behavioral reaction. Pan, Shu -Jen 2009 During interaction process between early child education and teaching teachers and kindergarten scenario, negative feelings generated from teaching, administration, students, parents, colleagues and superiors. This is a sign of influence of work exhaustion. Kuo, Shu - 2010 During teacher’s conducting of teaching in school, sense of di s- Jen, Chen, turbance, threat, hopeless and even negative emotion generated Yi-Jun when faced with expectation or requirements from students, parents, colleagues and superiors as well as limits from resources or environment.

Job Satisfaction “positive or happy emotional state generated from an individual’s assessment of As early as 1935, Hoppock first his/her work or work experience.” As presented the concept of job satisfaction in such, job satisfaction mainly refers to an his book of “Job Satisfaction.” Hoppock individual’s subjective emotional reaction thinks job satisfaction includes worker’s to work. Such perception of work will be mental and physiological sense of satis- affected by numerous factors and form a faction over environment. It can be de- kind of comprehensive sense of job satis- scribed as a worker’s subjective reaction faction. It can be understood roughly from to work scenario. Similarly, scholar Locke the following three meanings: overall def- (1973) also defined job satisfaction as inition, expectation discrepancy definition ad frame of reference definition (Chen, Ji- 84 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Qiang, 2013; Wu, Gwan-Shen, 2012; Chiu, organization’s common vision and mis- Yu-Qi, 2012; Chang, Chun-Zi, 2009). sion (operation philosophy), perception of values (core concept), belief, custom and (1) Overall Satisfaction habit, ritual and symbol and behavioral Overall concept emphasizes on norm. Because of this, it is different from worker’s attitude, perception, assessment other enterprise organization’s culture and reaction to work and surrounding en- presentation, and it is the congregation of vironment. This is a summarized and sim- employee cohesiveness and driving force ple description method (Huang, Shu-Ron, of customer orientation and aggressive 2012; Yang, Ya-Jun, 2012; Xue, Zong- innovation. This research takes references Huang, 2008; Su, Hui-Jen, 2012). from theories presented by scholars of Robbins (1996), Post and Coning (1997), (2) Expectation Discrepancy Harper and Utley (2001), Huang Yin-Shen and Chi, De-Zhang (2004), and it catego- Expectation discrepancy measures rizes organization culture measurement job satisfaction in a comparative point of scale into perspectives of customer orien- view. It mainly compares worker’s expectation, teamwork and active innovation. tation/wish with actual perception (Huang, Shu-Ron, 2012; Yang, Ya-Jun, 2012; Xue, As for work pressure, this research Zong-Huang, 2008; Su, Hui-Jen, 2012). takes references from work pressure measurement scales presented by scholars (3) Frame of Reference of Borg and Riding (1993), Chaplain This is built on the theory that popu- (1995), Kelly and Bethels (1995), Alison lation background, such as gender, age, and Berthelsen (1995) and Pearson and education level, income, duty seniority, Moomaw (2005), and designs measurable service years and so on, affects an indi- kindergarten teacher work pressure meas- vidual’s perception of job satisfaction urement scale based on characteristics and (Huang, Shu-Ron, 2012; Yang, Ya-Jun, work environments of the ones inter- 2012; Xue, Zong-Huang, 2008; Su, Hui- viewed. It also defines overall work pres- Jen, 2012; Pon, Jia-Sin, 1979). sure as measurement over kindergarten teacher’s level of pressure perception with Research Methodology respect to inter-personal relationship, level of perception with respect to kindergarten Research Structure or colleague’s interference with teaching autonomy, level of perception with respect To understand if kindergarten to work load as well as perception of work teacher’s job satisfaction is affected by feedback. organization culture and work pressure, this research hereby presents the follow- With respect to job satisfaction, this ing structure. With respect to organization research takes reference from a research culture, this research integrates theories on re-building public and private institute from related scholars and defines organi- organization member’s job satisfaction zation culture as: organization culture measurement scale conducted by Tsai, comes from years of accumulation of an 85 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Customer Orient ation

Teamwork

Aggressive Innovation

Job Satis- Inter-Personal Rela- tionship faction

Teach ing Autonomy

Workload

Work Feedback

Figure 1. Structure of This Research

Min-Hong (2008). Through statistics customers’ needs and respect cus- methodologies of item analysis and fac- tomers. tor analysis, Tsai, Min-Hong re-built a job B. Teamwork: This is to understand levels of collaboration, communi- Questionnaire Measurement Methodolo- cation and coordination among or- gy and Structure ganization employees. (1) Organization Culture C. Aggressive Innovation: This measures the level of organization With respect to measurement method- member’s pursuit of innovation ology, this research utilizes Likert Scale and change, and if employees are to measure kindergarten teacher’s per- performing duties actively and ag- ception on organization culture (very gressively and provide innovation agree 5 points, agree 4 points, average 3 actively. points, disagree 2 points, very disagree 1 point). Measurement scale includes the (2) Work Pressure following three perspectives: With respect to work pressure meas- A. Customer Orientation: This mainly urement, this research utilizes Likert measures if employees understand Scale to measure kindergarten teacher’s customer service standard, and if perception on work pressure (very agree they are able to meet with different 5 points, agree 4 points, average 3 points, 86 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

disagree 2 points, very disagree 1 point). Relationship” and “Promotion Oppor- Through measurements on pressure tunity.” readings of these four perspectives, it indicates that kindergarten teacher’s A. Sense of Work Achievement: Lev- work pressure is higher if the reading is el of work achievement satisfac- higher. Definitions for the following four tion from contents of work and perspectives are: from doing the work; A. Inter-Personal Relationship: Inter- B. Remuneration Satisfaction: Level action between teachers and ad- of satisfaction over salary and ben- ministration personnel, among efits obtained from working; teachers and between class chil- C. Superior Satisfaction: Level of dren and parents; 。 satisfaction over direct superior;

B. Teaching Autonomy: Level of D. Work Support: Level of satisfac- teacher’s self-control in teaching tion over various resources needed which includes design, planning during work process as well as and utilization of classes; support needed to complete work; C. Workload: Kindergarten teacher’s E. Colleague Relationship: Level of scope and duty of work which in- satisfaction over getting along and cludes all teaching (regarding de- communication with colleagues sign, implementation of teaching working together; in class, operation of class ad chil- F. Promotion Opportunity: Level of dren’s learning) and non-teaching satisfaction over promotion chan- administrative work, i.e., amount nel and opportunity from work. of workload a teacher can assume which includes appropriateness in This research utilizes Likert Scale allocation of time and amount of to measure kindergarten teacher’s per- work; ception on work pressure (very agree 5 points, agree 4 points, average 3 points, D. Work Feedback: Feedback on kin- disagree 2 points, very disagree 1 point). dergarten teacher’s work salary and individual’s promotion and devel- Background of People Interviewed opment. People interviewed in this research (3) Job Satisfaction are teachers working in public or private kindergartens in Taipei City. Researcher According to job satisfaction cate- went to pre-agreed kindergartens with gorization by Tsai Ming-Hong (2008), questionnaire interviewers to conduct job satisfaction includes six perspectives interview. Interview period started from of “Sense of Work Achievement”, “Re- Oct. 3 rd 2014 to Oct. 29 th , 2014. It took muneration Satisfaction”, “Superior Sat- people interviewed roughly 10 minutes isfaction”, “Work Support”, “Colleague to fill in each questionnaire. In the event

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of any question raised during filling in a With respect to job satisfaction, teach- questionnaire, it is answered by re- ers interviewed considered that their searcher and interviewer personally. At sense of work achievement and sense the end of the day, this research retrieved of remuneration satisfaction have all a total of 188 questionnaires. Gender for been lowered dramatically after imple- all teachers interviewed is female with mentation of Integration of Early 52 of them under the age 30, 81 of them Childhood Care and Education policy. aged between 31 to 40 and 55 of them This indicates that teachers considered aged between 41 and 50. 134 of them that their level of work achievement come with university (including college) satisfaction from contents of work and education background with 54 of them from doing the work have been lowered received master’s degree. 133 of them dramatically after implementation of have service years of below 10 years and Integration of Early Childhood Care the remaining of people interviewed and Education policy. Furthermore, the have service year of more than 11 years. level of salary and remuneration satis- 156 teachers also assume administrative faction obtained from work is also low- duty in kindergarten. er. Research Analysis 2. Analysis of Linear Structural Equation 1. Analysis of Satisfaction over Work To test if research structure presented Pressure and Job Satisfaction Before and in this research matches with inter- After Integration of Early Childhood viewed people’s comments, this research Care and Education organizes critical test items and threshold values of linear structural equation as (1) Work Pressure follows. It is observed that all test items According t-test result, interviewed exceed threshold values and they are all teachers consider their work load is even in the good scope. This indicates that heavier after Integration of Early Child- pattern for this research matches with hood Care and Education. This indicates interviewed people’s comments. that teachers consider they now assume According to linear structural equation more workload on teaching (regarding result, work load, inter-personal relation- design and implementation of class ship, work feedback, teamwork and teaching, operation of class and children teaching autonomy affect teacher’s job learning) and non-teaching administra- satisfaction. That is, kindergarten teach- tive work - i.e., workload a teacher can ers’ job satisfaction is higher if their assume which includes appropriateness work amount is lowered, inter-personal of allocation of time and amount of work relationship is better, salary feedback - as compared with workload before and promotion development is better, policy implementation. kindergarten teamwork capability is stronger and their level of teaching con- (2) Job Satisfaction trol is higher.

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Table 2. Analysis of Satisfaction over Work Pressure

Per- Average Average t Sig- spective Reading Reading value nifi- Before After Inte- cance Integra- gration tion Inter- 3.28 3.33 3.846 .092 Person- al Rela- tionship Teach- 2.56 2.49 1.992 .102 ing Auton- omy Work- 3.35 4.01 11.15 .001* load 4 ** Work 2.81 2.77 2.752 .099 Feed- back *** p < .001

Table 3. Analysis of Job Satisfaction

Perspec- Average Average t value Signifi- tive Reading Reading cance Before After Integra- Integra- tion tion Work 3.87 3.11 10.293 .003** Achieve- ment Remuner- 3.72 3.03 9.395 .011* ation Satisfac- tion Superior 3.63 3.71 .963 .328 Satisfac- tion Work 3.23 3.31 .057 .811 Support Colleague 3.51 3.60 3.271 .712 Relation- ship Promotion 3.33 3.19 3.985 .072 Oppor- tunity

* p < .05, ** p < .01

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Conclusion and Recommendations reform as well as the rise of perceptive parents’ awareness of power to partici- According to t-test result of this pate in school affairs. This is further research, interviewed teachers generally aggravated by the new launch of educa- commented that their workload is heavi- tion policy. With respect to various is- er and their sense of work achievement sues to some kindergarten teachers, they and sense of remuneration satisfaction have to deal with heavy work load in are lowered dramatically after imple- school, adapt to changes in education mentation of Integration of Early Child- environment while, in the meantime, hood Care and Education policy. To assume huge responsibility to support further understand actual situation, this their families or raise children, and they research also questioned kindergarten specifically suffer from higher pressure. teachers of causes on their comments. As such, education organization must Several teachers reflected that govern- utilize teacher’s own needs and adapta- ment promotes this policy too quickly. tion ability as basis for reference when On the software side, the majority of drafting education policy in order to kindergartens find it difficult to lower avoid sense of exhaustion generated teacher/student ratio within short time. from teacher’s exhausted response to ill- As for hardware, numerous kindergar- communicated education policy. In addi- tens have to make modifications on their tion to maintaining smooth communica- existing facilities in limited amount of tion channel which is equal, reciprocal time. This causes heavy operation and and professional, it is even more im- eacher pressure on kindergartens. Fur- portant to aggressively guide teachers to thermore, salary has not be adjusted ac- face with current complicated education cordingly. This also creates heavy bur- environment in a more positive attitude. den to teacher and kindergarten’s opera- On specific practices, author of this arti- tion. To enhance kindergarten teacher’s cle considers that education related ad- job satisfaction, this research considers ministration organization and school that, according to linear structural equa- must establish smooth teacher consulting tion result of this research, we can start and life guidance system which will be from thinking in the fields of workload, equipped with professional education inter-personal relationship, work feed- and mental counseling personnel in or- back, teamwork and teaching autonomy. der to assist some senior teachers to ob- Accordingly, this research hereby pre- tain emotional balance in their responsi- sents the following comments: bility life between family and school as well as to establish good adaption capa- 1. Government and kindergarten can bility. establish consulting channel to miti- gate teacher’s workload 2. Fulfill kindergarten internal support system to lower sense of work pres- According to finding of this research, sure teachers recently feel pressured on issues of Integration of Early Childhood Care According to finding of this research, and Education, promotion of education kindergarten teachers suffer from huge 90 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

amount of work and heavy burden but personal relationship, and to lower their they cannot receive recognition or de- workload, this research tries to present served feedback from work. Therefore, the following recommendations to kin- under the circumstance of huge amount dergartens: of work and heavy burden, kindergarten internal support system is indeed very (1) Supervisors can try to treat com- important. This research recommends munication as a task which must be that we can start from the following performed daily points: establishment of horizontal and This research suggests that, in order to vertical communication to really under- enhance communication between kin- stand teacher’s needs and opinions and dergarten and teacher, kindergarten can provide appropriate support and assis- treat communication as a task which tance. Furthermore, enhancement of must be performed daily, or an important interaction opportunity among col- thing-to-do item. Kindergarten can ar- leagues such as network activities, gath- range the best timing for communication ering, teaching learning activity, experi- with teacher depending daily working ence and emotion sharing should be im- condition. If time allows, kindergarten plemented. Senior teachers will conduct can routinely appropriate 15 minutes experience inheritance activities such as daily to take turns conduct conversation consulting on issues of administration, with teachers. This conversation is not teaching and inter-personal relationship necessarily confined to indoors. Loca- in order to lower new teacher’s work tion for such conversation can also be pressure and learning of better inter- resting room or recreation area. On one personal communication skills. As for hand, this allows understanding of each kindergarten parent’s support, activities teacher’s current condition and real-time such as teacher-parent networking event response and feedback to teacher’s can be conducted to allow parents to comments. On the other hand, this can understand kindergarten teaching con- also motivate them. cept and class operation pattern and to enhance mutual understanding and (2) Adopt appropriate communication smoothness of communication channel. channel In addition, parents can be recruited to participate in kindergarten volunteer Kindergarten can first examine its activities to encourage parents with spe- own strong points before selecting cialties to assist in teaching activities by communication channel suitable for it- exploring their expertise, and to allow self and selecting teachers who are most parents to experience hard work incapable of receiving its message in a volved in teaching. correct manner. For instance, some communication is only suitable for face 3. Enhance communication between to face communication which includes kindergarten and teachers kindergarten’s publishing of some formal news in a hope to solve conflicts To enhance kindergarten teacher’s teach- within kindergarten. While some coming autonomy, work feedback, inter- munication is appropriate for relax and 91 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

casual communication such as random ployee hotline in kindergarten. No mat- meal gatherings which allow colleague ter what the form is, it is critical that to talk about their lives. teachers should be ensured to express their views anonymously. Furthermore, (3) Establish other appropriate opinion kindergarten must take those views seri- expressing channel and fulfill feed- ously and offer real-time feedback mes- back mechanism sage (feedback comments are needed This research considers that, for some regardless if views are adopted or not issue, it is inconvenient for teacher to adopted) as long as there are views ex- express face-to-face their comments to pressed by kindergarten teachers. In the kindergarten, or they are concerned that meantime, kindergarten is recommended their expression of comments will re- to offer rewarding feedback to teacher in ceive kindergarten’s attention. With re- due time if teacher’s suggestion or spect to such issue, this research recom- comments come with positive meaning. mends to install suggestion box or em-

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Table 4. Summary of Linear Structural Equation Threshold Values

Equation of This Research Equation Appropriateness Threshold Value Appropriateness Assessment Absolute Appropriateness Indicator 2 Likelihood-Ratio χ p ≧ .05 86.29*** Good GFI ≧ .90 .955 Good AGFI ≧ .90 .916 Good SRMR ≦ .05 .012 Good RMSEA ≦ .08 .071 Good RMR ≦ .05 .045 Good Value-Added Appropriateness Indica- Good tor NFI ≧ .90 .914 Good NNFI ≧ .90 .923 Good RFI ≧ .90 .918 Good IFI ≧ .90 .920 Good CFI ≧ .90 .929 Good Simple Appropriateness Indicator Good PGFI ≧ .50 .612 Good PNFI ≧ .50 .602 Good PCFI ≧ .50 .592 Good 2 Likelihood-Ratio χ /df ≦ 3 2.21 Good

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Figure 2. Illustration of Factors Affecting Job Satisfaction

.110 Customer Orientation

.194** Teamwork

.136 Aggressive Innovation

Job Satisfac- -.216** Inter-Personal Relationship tion

-.187*** Teaching Autonomy

-.281** Workload

Work Feedback -.210**

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THE RESEARCH OF DYNAMIC IMAGES USING EFFECTS IN CHILDREN WEBPAGE

Tsao Yung-Chin Associate Professor, Graduate Institute of Design Science Tatung University [email protected]

Lin Chia-Ho Graduate student, Graduate Institute of Design Science Tatung University [email protected]

Abstract

The population of children using Internet has been increasing year by year and the webpage for children also springing up slowly. Nowadays the design form of interfaces for Dynamic Websites provides more varieties, interactive levels and also commonly applied to the interfaces of children’ webpage. It becomes the current trend for websites interaction. However, the interactive navigation interfaces for dynamic websites are more complicated than the conventional interfaces for static websites. There- fore, although the Internet provides various information displays, it relatively becomes a burden for children while browsing and finding the needed target.

Navigation interface is the major factor influences user’s experience on website, therefore, to realize children’s preference and need for dynamic website’s navigation interface will facilitate the design of children’s dynamic multimedia websites. Conse- quently, the usability and the convenience of children’ webpage design will become children’ image for Internet and affect children’ opinion of it.

Based on the children’ webpage features of WWW in Taiwan’s domestic government and non-government organizations, the first stage of this study took the National Ele- mentary School children as the object and used the Semantic scale questionnaire as a pre-test to investigate and classify the dynamic navigation interface website’s presentation in order to realize present tendency and usage of children website’s navigation interfaces.

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The second stage of this study is to investigate children’ Semantic scale questionnaire, according to the website of such interface classification, in order to realize how the dynamic navigation interfaces affect children on the visual and operational aspects, and provide appropriate suggestions as the reference for the design of children’s multimedia dynamic websites.

According to the study result, it takes the shortest time for children to finish the task in the medium navigation visual attraction degree website, and the next is the lower degree, and then the higher one. This indicates that the extremes of navigation visual attraction degree websites are negative for task achievement speed. As to the task accuracy aspect, this study found out the visual attraction degree did not affect directly to the task accuracy for children users. For the emotion sensation aspect, the study result indicates the visual attraction degree of children websites affects remarkably positive to the feeling of usability and fun aspects of children, but not for the joyful, website quality feeling, and visual attraction degree aspects.

Key Words: Dynamic website, children’ webpage, vision

Introduction the Internet as they are required to learn or do homework via the Web. Background of Research Given such, children’s website The Internet has become an indis- designers are faced with the challenge pensable part of life, thanks to contin- of creating pages that are useful, attrac- ued technology breakthroughs. Mean- tive and user-friendly, in the process while, online usage among children helping children gain confidence and and youths 19 years or younger has social skills (Weng, 2009). been on the rise. Motivation for Research In Taiwan, junior high and elementary school students are required to While many children’s websites take information technology courses. claim to include children-friendly fea- According to a January 2011 survey by tures (Cai, 2003), this is not always the the Taiwan Network Information Cen- case – oftentimes the interaction and ter (TWNIC), online usage among this image designs of these websites are not group has reached 100% (Figure 1, suitable for operation by children, TWNIC, 2011), making it Taiwan’s many of whom have expressed dislike biggest online population. and impatience for these sites. (Niel- sen, 2002). Rapid development of the Internet has led to more diverse webpage inter- Yet technological progress has led face designs to suit different groups. to a wider range of interfaces. For ex- Specifically, many government agen- ample, a dynamic interface design may cies have set up websites for children, be attractive to children yet may also most of whom are quite familiar with lower the user’s productivity (Scaller,

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Chow, Marth, Heo & Allison-Bunnell, sites affect Taiwan children and their 2004). satisfaction level?

Objectives of Research Literature Review

Based on the children’ webpage Many scholars cite cognitive psy- features of WWW, this study is going chology in their research on interaction to investigate and classify the dynamic design. With the help of related litera- navigation interface website’s presen- ture, this chapter discusses the human- tation in order to realize present ten- interaction principle and explores the dency of website’s navigation interfac- relationship between the designer and es. The second stage of this study is to the user, in order to investigate how investigate children according to the dynamic webpage image and interac- website of such interface classification tion designs affect children and their to realize children’s preference and satisfaction level. needs of dynamic navigation interfaces, and provide appropriate suggestions Information-Processing Theory of as the reference for the design of chil- Learning dren’s multimedia dynamic websites. Information-processing theory of Research Question learning explains how humans receive and process information through ob- How do the image design and servation, awareness, recognition, con- usability interaction design of chil- version, and memorization (Chang dren’s versions of government web- Chun-hsing, 2007), and is often used

Figure 1: Online usage by Taiwan’s different population groups

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According to Zhang (2007), any Consistency information content design must first User Control catch the attention of the user, who can Use of Metaphors then go on to study the content. There- Feedback provision fore, interaction and image design often uses various gimmicks to attract Dynamic Webpage Navigation users. This research discusses dynamic webpage operability and image design, Fleming (1998) & Krug (2002) and the way the user organizes and believe that under a particular circum- processes information received through stance, websites can be navigated by a the senses. user who, with a particular goal or purpose in mind, is conscious of his/her Web Navigation Interface location through the information given. Navigation, meanwhile, is a moving The most important goal of chil- process by which the user finds, selects dren’s website development is to ena- and reaches a target. ble children to learn and get enter- tained through images and interactive Wallace and Kupperman (1997) features of the websites (Misirli & note children do not exercise sound Odabasi, 2009). Children’s websites judgment over information from the nowadays have copious animation, Web and usually take it as fact. Exper- videos and images that eclipse tradi- iments further show that children be- tional hyperlink webpages. Yet do lieve Internet-retrieved information as children really understand the message the “truth” (Schacter, Chung & Dorr, conveyed by the images, and benefit 1998). from the interactive features of the websites? This is something worth Shackel (1991) defines usability exploring. as having the following: (1) effectiveness; (2) learnability; (3) flexibility; In addition, Kuo (2004) points and (4) attitude. Sharp, Rogers & out besides usability, children’s web- Preece (2007) further point out usabil- sites must also emphasize interaction ity facilitates learning and is linked to and pleasure of usage. Interaction de- effectiveness, efficiency, safety, func- sign is a process by which the designer tionality, learnability and ease of re- creates an experience allowing the user membering. to raise productivity, communicate and interact (Sharp, Roger & Preece, 2007). Research On Children’s Website Meanwhile, “human computer inter- Images face” is the communication channel between the user and the computer (Li, According to Druin (2008), Uni- Wei, Shi, Qiu, 1988). Human computer versity of Maryland has over 20 years interface determines the usability, op- of experience researching children’s erability and friendliness of websites. interaction interfaces, along with De- According to previous research, human sign Partner. Results of their research computer interface must include the show that image interfaces expedite following principles: children’s efforts to find, browse and check information, and speed up their

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ability to understand the architecture of navigation interface website’s presen- websites. Wang (2007) did a survey on tation in order to realize present ten- children’s website images and con- dency of website’s navigation interfac- cluded that children prefer headlines es. The second stage of this study is to placed on the center top position of the investigate children according to the webpage and favor a blue background website of such interface classification (RGB=0,219,255). to realize children’s preference and needs of dynamic navigation interfaces, Dynamic Webpage Image Design and provide appropriate suggestions as the reference for the design of chil- Newman & Landay (2000) note dren’s multimedia dynamic websites. that web design includes three major elements, namely navigation design, Sample Collection information design, and visual design. The goal is to facilitate website opera- This research is centered on the tion, enhance visuals and diversify dynamic webpage interaction interface images to maximize the user experi- design and image design of children’s ence. versions of governmental websites. The study only investigates a website’s Hsu (2001) has discussed the “homepage,” or the first page of the relationship between the styles and website, and excludes websites that: visual elements of websites and their are educational in nature, are under overall quality, and has categorized construction, bridge one site to another, enterprise websites based on their vis- have not been updated for some time, ual elements. Chuang (2001) has dis- are not dynamic, and are subsidiary to cussed web images and user interface other sites. usability based on the following elements of websites: theme, hyperlinks, Website Image Element Analysis background, color, style, text arrangement, animation and sound effects. This section analyzes children’s website interaction interfaces through Research on computer and Inter- content analysis, which quantifies and net usage among children has led to the describes communicative contents – observation that their behavior, ways such as text, videos and music – with of thinking, preferences and value dif- an objective and systematic approach. fer from those of adults. As children As such, content analysis can be help- are mostly incapable of absorbing ful to quantify and describe children’s complex information, they will benefit websites. from websites with interface and image designs that are immediately compre- Experiment hensible. The purpose of the experiment is Methodology to find children’s response to websites collected for this research. Semantic Based on the children’ webpage scale questionnaires are used to assess features of WWW, this study is going the usability of these websites. The to investigate and classify the dynamic target of the experiment is a group of

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fifth and sixth graders from New Tai- sites. The research uses Perceived Use- pei City Shuangxi Elementary School fulness, Perceived Ease of Use and who have prior experience of using Perceived Enjoyment for different us- personal computers and the Internet. A age scenarios. total of 80 people took part in the experiment during the after-school hours Experiment Procedure at the school’s computer room. The experiment involves 80 fifth Independent Variables. and sixth graders from New Taipei The independent variables of the City Shuangxi Elementary School, experiment are children’s websites of who are given five clearly instructed different operational types, which will fact-finding tasks. The experiment was be subject to content analysis and held in the computer room of the group analysis. school and began after the teacher gave instructions on how it was to be con- Dependent Variables. ducted. The teacher also reminded the Include satisfaction level and students to write the beginning and operability. finishing time for performing the tasks. The second stage requires the students Control variables. to complete questionnaires on the web- Include styles and contents of sites’ operability and the students’ sat- websites. isfaction level. Once completed, the questionnaires were collected by the Research Tools teacher and recorded by the computer.

The first part of the experiment Analysis And Discussions assigns five fact-finding tasks to the students, who are to complete the tasks This chapter analyzes the results on the websites provided. Usability of of the experiment to explore how dif- the websites will be assessed based on ferent image design interfaces affect the accuracy rate and the time taken to usability and children’s satisfaction complete the tasks. level.

The usability assessment ques- The websites are divided into tions have clear and definite answers. four types based on their dynamic in- The students are given multiple choice teraction design: (1) text-frame; (2) questions and are required to mark the map guidance; (3) scenario exploration; beginning and finishing time as ap- and (4) image-text. peared on the bottom right corner of the screen. Analysis of Experiment Participants

The second part probes the satis- The participants were fifth and faction level with children’s websites. sixth graders from New Taipei City Results from the two experiments will Shuangxi Elementary School, whose be integrated to understand children’s average age was 11. There were 48 first impression of the overall interface boys and 32 girls. design and image design of the web-

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Usability Analysis ing tasks on websites based on a scenario exploration design. During the first stage, the participants were randomly given websites Dynamic Website Image Design And with the four dynamic interactive de- Satisfaction Level sign types and were asked to complete the five tasks. The results are shown in Based on the Likert scale, the Table 4-1. An analysis of the data experiment requires the students to found scenario exploration had the complete Semantic scale question- lowest accuracy rate yet allowed the naires, which include a list of questions tasks to be completed in the shortest regarding the usability, interactivity time. This indicates children have an and image design of the websites: easier time understanding and perform-

Table 4-1 Task Completion Data

Design type No. of Accuracy rate Standard Completion time people variation (sec.) Text-frame 20 94.16 12.231 180.3 Map guidance 20 91.24 13.122 106.3 Scenario explo- 20 86.42 18.864 92.1 ration Image-text 20 94.21 14.192 160.2

Table 4-2 Image Design And Satisfaction Level Questionnaire

Category Questions Q1: This site allows me to answer questions fast. Q2: This site allows me to answer questions accurately. Usability Q3: This site helps me save time. Q4: This site is helpful to me. Q5: This site is easy to operate. Q6: This site allows me to find information I need fast. Interactivity Q7: I can easily understand how this site operates. Q8: I feel this website is easy to use. Q9: I feel this website is interesting. Q10: I feel this site’s i mage design attracts me. Image de- Q11: I feel the site’s images help me unde rstand the functions of the sign site. Q12: I feel the site’s images help me understand what each button is for.

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Table 4-3 Data Analysis

Category SS df MS F p Interclass 499.158 3 166.386 4.690 .004** Overall satis- Intraclass 5251.053 148 35.480 faction level Total 5750.211 151 Interclass 72.368 3 26.708 3.994 .045* Usability Intraclass 1299.632 148 8.781 Q1~Q4 Total 1372.000 151 Interclass 80.125 3 26.708 3.994 .009** Interactivity Intraclass 989.711 148 6.687 Q5~Q8 Total 1069.836 151 Interclass 54.237 3 18.079 4.360 .006** Image design Intraclass 613.632 148 4.146 Q9~Q12 Total 667.868 151 **p<.01 *p<.05

Conclusions And Suggestions followed by websites with the lowest level of visual attraction. Websites This research aims to explore with a high level of dynamic visual how the image design and usability attraction resulted in the longest task interaction design of children’s ver- completion time, indicating children’s sions of government websites affect websites with extreme visuals may Taiwan children and their satisfaction adversely affect the time by which level. An analysis of data led to the students perform tasks. Meanwhile, following conclusions and suggestions. results of the image design question- In terms of usability, variations in the naire show that the visual attraction of degree of visual attraction on these children’s websites is directly propor- sites have no direct impact on the accu- tionate with the perceived usability and racy rate with which the children com- enjoyment of the sites. Meanwhile, pleted their website tasks. In terms of visual attraction of the websites does interactivity, websites with medium not have a noticeable impact on the level of dynamic visual attraction al- perceived quality of websites and the lowed the shortest completion time, pleasure of using them.

References [2] Li Qing-Rong, Wei Pi-Xin, Shi Yu-Fen Qiu Zao-Zhang (1998). [1] Wang I-Chen (2007).A Study on Human-Machine Interface De- the Interface Usability of chil- sign Taipei: National Open Uni- dren's websites. National Cheng versity Kung University Master's thesis, Institute of industrial design. Un- [3] Weng Yi-Jia (2009). Rise of the published report. small head, children Web site opportunity Golden. Electronic Commerce Times, 20091201, from http://www.ectimes.org.tw/

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Shownews.aspx?id=0910020405 [11] Fleming, M. & Levie, W. H. 27 (1993). Instructional message design: Principles from the behav- [4] Chuang Chin-Chang (2001). The ioral and cognitive science. (2nd Study on Exploring the Usability eds.). New Jersey: Englewood and Image of Web Interface. Na- Cliffs. tional Cheng Kung University Master's thesis, Institute of indus- [12] Karen , A. S. (1997). Dynamics in trial design. Unpublished report. document design: creating texts for readers. New York: Wiley. [5] Hsu Chun-Cheng (2001). A Study of the Visual Essence and Style [13] Kress, G., & Leeuwen, T. V. in Assessment of Web Design (2006). Reading images: The National Chiao Tung University grammar of visual design. (2nd Institute of Applied Arts Master's ed.). London ; New York : thesis, Unpublished report. Hsin- Routledge. chu. [14] Misirli, Z. A., & Odabasi, H. F. [6] Kuo Yien-Chung (2004). Guide- (2009). Web sites for children. lines on the Interface Design of Procedia Social and Behavioral Children's Website- Usability, Sciences, 1(1), 1183-1186. Pleasure and Interaction.National Taipei University of Technology [15] Newman, M. W., & Landay, J. A. Graduate Institute of Innovation (2000). Sitemaps, Storyboards, & Design Master's thesis, Un- and Specifications: A Sketch of published report. Taipei Web Site Design Practice. DIS’00, 263-274. [7] Zhang Chun-Xing (2007). Educa- tional psychology, Taipei: Dong- [16] Nielsen, J. (2002). Kid’s corner: hua Bookstore Website usability for children. Retrieved November 29, 2009, [8] Cai Pei-Yin (2003). Children's from literature site back lost childhood. http://useit.com/alertbox/200204 Electronic Commerce Times, 14.html 20091201, from http://www.ectimes.org.tw/Show [17] Schaller, D., Chow, A., Marty, P., news.aspx?id=5132 Heo, M., & Allison-Bunnell, S. (2004). To Flash or Not to Flash? [9] Druin, A. (2008). Designing Online Usability and User Engagement Interactions: What Kids Want of HTML vs. Flash. Museums and What Designers Know. In- and the 2004 Web Annual Con- teractions, 15(3), 42-44. ference Proceedings.

[10] Fleming, J.(1998 ). Web naviga- [18] Schacter, J., Chung, G. K. W. K., tion : designing the user experi- & Dorr, A. (1998). Children’s in- ence. Beijing ：O’Reilly & Asso- ternet searching on complex ciates. problems: Performance and pro-

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cess analyses. Journal of the American Society for Infor- mation Science, 49(9), 840-849.

[19] Shackel, B. (1991). Usability- context, framework, definition, design and evaluation. In Shackel, B. & Richardson, S. (Eds), Hu- man Factors for Informatice Us- ability (pp. 21-37). Cambridge: Cambridge University Press.

[20] Sharp, H., Rogers, Y., & Preece, J. (2007). Interaction design: Be- yond human-computer interaction (2nd ed.). Chichester, West Sussex, England: John Wiley & Sons.

[21] Wallace, R., & Kupperman, J. (1997). On-line search in the science classroom: Benefits and possibilities. In: Soloway, E. (chair), Using On-line Digital Resources to Support Sustained Inquiry Learning in K-12 Science, AERA, Chicago.

[21] Taiwan Network Information Center, 201101, from http://statistics.twnic.net.tw/quer y/survey-query.cgi

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CONTRIBUTING CAUSES OF EMPLOYEE LOYALTY OF SERVICE

PERSONNEL IN INTERNATIONAL HOTELS

Yen-Cheng Chen Department of Applied Life Science, Chinese Culture University, Taiwan, R.O.C. [email protected]

Hsin-I Chen* Department of Applied Life Science, Chinese Culture University, Taiwan, R.O.C. * Corresponding Author: [email protected]

Pei-Ling Tsui Department of Hospitality, National Taitung Junior College, Taiwan, R.O.C.: Graduate Institute of Technological and Vocational Education, National Taipei University of Technology, Taiwan, R.O.C. [email protected]

Yu-Chih Chiang Department of Apparel, Events &Hospitality Management Iowa State University, U.S.A [email protected]

Abstract

Employee loyalty is a topic frequently mentioned in hospitality research. Despite the benefit of employee loyalty, hoteliers in Taiwan seem to be troubled by the phenomenon of ‘turnover culture’. This study examined the contributing causes of employee loyalty on the one hand and highlighted the differences between these causes and their current practices on the other hand. We surveyed 161 international hotel employees as survey participants. The PLS-SEM technique was applied to analyze the data. The re-

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sults demonstrated that proper monetary reward, opportunity for learning, career development, and communication with supervisors are the major contributors to employee loyalty. The conclusion provides not only a direction for practitioners to consolidate employee loyalty but also an explanation of how this will benefit the organization.

Key Words: Employee Loyalty, Service Personnel, International Hotel, Organization, Hospitality

Introduction the relationship of an employee with the organization for which they work In Taiwan, the hotel industry has and that has implications for their deci- been recognized as a potential prospect sion to remain with the organization. in the growth of service industry. How- Employee loyalty is attachment to the ever, the growth is impeded by high organization and employee believes turnover rates of employees in the hotel strongly in organizational goals and industry. The hospitality industry in values (Mathieu & Zajac, 1990). High- particular suffered an increasingly high er employee loyalty indicates stronger turnover of employees resulting from desire to maintain membership of the role stress, burnout, and low level of organization. socialization (Chen and Chen, 2012; Chen, 2011). Organizations in the hotel Past theoretical discussions industry face difficulties in retaining demonstrated how employee loyalty employees, especially it is relatively facilitate service quality and customer difficult to identify exact factors that loyalty (Yee et al., 2010) and ensure contribute to employee satisfaction and the long-term profitability and success the resultant loyalty. of an organization (Heskett et al., 2008; Heskett et al., 1997; Loveman, 1998). Employee satisfaction is consid- Such links are particularly relevant in ered as an overall feeling about the job service industries where customers or as a related set of attitudes about have more contacts with employees various aspects of the job (Spector, than with the organization. Job satis- 1997). Employee Satisfaction is also faction and employee loyalty are both defined as a pleasurable or positive complex concepts, as each combines a emotional state resulting from the ap- set of perspectives, tangible and intan- praisal of one’s job or job experience gible, personal and interpersonal, insti- (Locke, 1976). Further, according to tutional and external dimensions. Allen and Grisaffe (2001), loyalty is a Employee attributes, as well as the in- psychological state and it characterizes vestigation of to what extent employee attributes influence job commitment 108 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

and performance wasn’t extensively this research result is expected to help studied (Becker and Gerhard, 1996; organizations gain competitive ad- Meyer et al., 2004). Research investi- vantages. gating the link between employee attitude and behavior revealed that em- Literature Review ployee job satisfaction is strongly related to employee loyalty (Hom and Grif- Employees are recognized as im- feth, 1994; Stum, 1998; Ting, 1996). portant organizational asset and ulti- There are disputes as regards how to mately, firms invest considerable capi- maintain employee loyalty. Ineson and tal in the human resources. Organiza- Berechet (2011) addressed a worry tional cost incurs due to employees about employee complacency associat- quitting their jobs, subsequent hiring of ed with long-term employment, and the replacement personnel (Darmon, 1990), loss of motivation to advance. and new-hire training (Wasmuth and Davis, 1983). General costs for admin- On the other hand, Lincoln (1996) istration (Hom and Griffeth, 1994) suggested that welfare corporatism may could be tremendous in terms of per- maximize employee commitment and is sonal, work-unit and organizational re- beneficial to long-term organizational adjustment (Hom and Griffeth, 1994; efficiency. Reichheld and Teal (2001) Lee and Mitchell, 1994). As we usually also indicated that loyalty is the key to focus on employees to examine loyalty, organizational success. Employee loy- attitudes to employee loyalty are dyadic: alty is an essential issue of hospitality both employer and employee are in- industry, with the diversity of economic, volved in this professional and hierar- geographical and cultural contexts im- chical relationship, and both should be plicates a niche for further research. In aware of the importance of loyalty, and view of the on-going issues of deterio- the benefits it brings (Ineson et al., rating salary and increased turnover 2013). High turnover ratio symbolizes ratio in Taiwan’s hospitality industry, the lack of employee loyalty, which is this study endeavored to provide an attributable to factors including lack of empirical perspective. We focused on job satisfaction, poor working condi- discussing the constituting factors of tions, low monetary reward, inadequate employee loyalty on the one hand and career development, low level of self- how these factors influence employee fulfillment, better alternative of jobs, loyalty behaviors, such as willingness and work-family conflict (Carraher, to commit to and assumption of more 2011; Michaels and Spector, 1982; responsibility on the other hand. In Milman, 2003; Mowday, 1981; Was- addition to providing managers with a muth and Davis, 1983). Employee guide to improving employee loyalty, turnover is a critical issue for many 109 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

hotels, and some practitioners even five cost categories related to labor viewed turnover as a part of hospitality turnover: separation costs; recruitment industry culture as a whole (i.e., a so- costs; selection costs; hiring costs; and called turnover culture) (Yang, 2008). loss of productivity costs. By applying the computer-assisted software to cal- International hotels in Taiwan are culate labor turnover cost, their study characterized by this sort of turnover showed unexpectedly high costs asso- culture. Many employees use turnover ciated with labor turnover, and high- as a pattern to bounce earnings and lighted the responsibility of managers promotional opportunities for their next and human resources personnel in re- jobs. A recent study of the hotel indus- taining staff with practices beyond fi- try in Taiwan conducted by Yang (2008) nancial benefits. Turnover also implies demonstrated that organizational so- a part of organizational knowledge is cialization contributes to job satisfac- lost with the employees who left. Argo- tion and commitment and minimized te (2012) described knowledge depreci- newcomer turnover intention. Organi- ation as loss of value analogous to cur- zational socialization is a dynamic rency depreciation. Knowledge depre- learning and adjustment process that ciation occurs in at least ﬁve ways: enables an individual to assume when employees leave without transfer- an organizational role that fits ring their knowledge; when existing both organizational and individual organizational knowledge becomes needs (Light and Keller, 1985). Yang obsolete (e.g. because the company (2009) also mentioned that job satisfac- temporarily loses competitiveness); tion affects affective commitment and when new creative products and ser- hence influences turnover intentions. vices are rendered sub-standard by a Newcomers enjoy observing and read- dated knowledge or unproﬁtable prod- ing job-related information to learn ucts; when knowledge is incompletely how to perform tasks, implying that or selectively transferred; and when organizational socialization and job organizational knowledge becomes stress is correlated to job satisfaction. difficult to access.

Employee loyalty is a recognized Such depreciation has negative predictor of turnover intention and be- impacts on organizational performance, havior. As suggested by Davidson et al. including decreased productivity, a (2010), turnover problem is a great decay of customer satisfaction, unmet challenge to human resource strategy delivery commitments, inappropriate and organization performance, and the managerial decision-making, and mis- stake of turnover is high. According to taken strategic behavior (Argote and Hinkin and Tracey (2000), there are Ingram, 2000). The problem of 110 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

knowledge depreciation is quite signifi- improve and learn new skills. If there is cant in Taiwan, especially in terms of no longer any opportunity to learn from employee turnover without transferring current jobs, employees may show less knowledge and incomplete or selective- satisfaction, and consider leaving for a ly transferred knowledge. Employee better position. turnover often leads to operational dis- ruption, consequently limiting organi- Research Method zational performance. Ineson and Berechet (2011) examined attitudes Hypotheses influencing loyalty of Romanian hotel managers, supervisors, and operatives. Ineson et al. (2013) proposed five They found reasons for employee loy- facets of the potential reasons that alty are mainly intangible, linked to cause employee loyalty in hospitality workmates, bosses, and customers. context, namely commitment to man- Gender, age, job level, and tenure have ager and company, job condition, per- only limited influence on loyalty. Job sonal benefit, service attitude, and ca- satisfaction focuses on opportunities for reer development. Although the rela- personal skills’ development, utilization between employee loyalty drivers tion of strengths, and achievement of and job satisfaction contributors were workplace objectives. established in their research, it is still not clear whether the employee loyalty Respect for management of and drivers will influence actual loyalty pride in the company is of critical im- behaviors. Employee loyalty refers to a portance to retention; lack of career service employee's feeling of attach- development plans and opportunities ment to his/her employing organization. for promotion were key reasons associated with turnover. In a survey on US Therefore, we proposed the fol- lodging industry employees, Costen lowing hypotheses: and Salazar (2011) found training and development as a critical factor of in- H1: Commitment to manager and com- duction of employee satisfaction. Their pany has positive effect on employee result indicated that when employees loyalty. perceive greater opportunity to enhance their skill and knowledge in the organi- H2: Job condition has positive effect on zation, they exhibited higher level of employee loyalty. job satisfaction, loyalty, and intention to stay. Employees will not only be H3: Personal benefit has positive effect loyal for monetary and emotional rea- on employee loyalty. sons, but also be for the opportunity to 111 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

H4: Service attitude has positive effect after data verification. The recovery on employee loyalty. rate was 89.4%.

H5: Career development has positive Measuring instrument effect on employee loyalty. To measure the five dimensions of Procedures and Data Collection employee loyalty antecedents, we adopted the questionnaire of Employee To test our hypotheses, we chose Loyalty Scale by Ineson et al. (2013), to collect data from five of the 5-stars which consists of 21 items. The international hotels in Taiwan. Con- Cronbach’s Alpha for the scale is 0.90. venience sampling method was applied The five facets of the scale are com- to collect our sample participants. This mitment to manager and company, job study was conducted on personnel condition, personal benefit, service working with hotels classified by the attitude, and career development. We Taiwan Bureau of Tourism as 5-star assessed employee loyalty by psycho- international hotels. For geographical logical measures so we were able to balance, two from the north, one from capture a service employee's feelings the middle and 1 from the south of toward his/her service organization. A Taiwan were respectively selected for five-point Likert type scale anchored at the study. 1= “strongly disagree” and 5=“strongly agree” was deployed. Demographic The research team first sought the information including age, gender, sen- cooperation and consent of the hotel iority and income were also collected. management, and then distributed our Subjects were guaranteed that all in- questionnaires to participants with formation provided in the questionnaire management’s assistance. The surveyed are strictly confidential and will be subjects included common employees used only for scientific purpose. without managing responsibility from Expert validity was employed by this various departments, namely lobby, study. Five experts from the food and restaurant, sport and health club, spa, drinks industry were invited to examine accommodation, housekeeping and the content of the research scale. The clean service, human resource man- revised scale was finally implemented agement and general management. for investigation. Subjects were randomly chosen from the employee name list provided by Participants hotel management. Of the 180 distributed questionnaires, 161 were valid In this study, males made up 43.9%, and females comprised 56.1% 112 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Table 1. Overall quality criteria

AVE CR α R2 Comm. Redundancy Commitment 0.717 0.869 0.853 0 0.717 0 Job condition 0.681 0.939 0.920 0 0.681 0 Personal benefit 0.775 0.954 0.937 0 0.775 0 Service attitude 0.529 0.899 0.898 0 0.529 0 Career development 0.697 0.882 0.872 0 0.697 0 Employee loyalty 0.752 0.958 0.940 0.689 0.752 0.515

Table 2. Factor loadings and inter-construct correlations

Loadings 1 2 3 4 5 6 1 Commitment .716 -.881 0.847 2 Job condition .784-.901 0.581 0.825 3 Personal benefit .841-.896 0.365 0.522 0.880 4 Service attitude .681-.813 0.374 0.603 0.475 0.854 5 Career development .785-.917 0.654 0.696 0.318 0.301 0.835 6 Employee loyalty .842 -.904 0.444 0.633 0.418 0.213 0.418 0.867 Note: values on diag onal are square root AVE

Table 3. Hypotheses testing results

Path T-statistic p-value coefficient H1: Commitment → Employee loyalty 0.517 4.707 <0.001 H2: Job condition → Employee loyalty 0.429 5.016 <0.001 H3: Personal benefit → Employee lo yalty 0.466 3.274 0.001 H4: Service attitude → Employee loyalty 0.134 1.880 0.062 H5: Career development → Employee loyalty 0.381 4.032 <0.001 Note: T -statistics obtained by performing 1000 samples bootstrapping process

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of the total respondents. Concerning ‘commitment’, ‘job condition‘, ‘per- marriage status, 17.2% were married, sonal benefit‘, and ‘career devel- and 81.8% remained single. With re- opment‘ have positive and statistically spect to age, 51.1% were between 19 significant effects on ‘employee loyal- and 25, followed by the 26~32 group, ty‘, which are in support of proposed at 24.4%. As regard years of service, hypotheses 1, 2, 3, and 5. Hypothesis 4 the 3~5 year group ranked No.1 at is not fully supported that the effect of 24.4%, followed by the 6~10 year ‘service attitude‘is not significant in group, at 18.9%. As to monthly pay- terms of the 95% confidence interval. ment, the majority of them (68.8%) The result shows that service attitude is earned below 30,000 dollars, followed not a statistically significant contribu- by the 30001~40000 group, at 18.1%. tor to employee loyalty.

Results It is not surprising to find commitment of manager and company as This study used PLS-SEM, a sta- an important factor leading to employ- tistical method that combines factor ee loyalty (Ineson et al., 2013; Silva, analysis, correlation and regression 2006). A good leader and manager can analysis to analyze the collected data. always inspire followers to become The reliability and validity results, better. The other intangible reason, i.e. according to Chin (2010); Hair et al. “service attitude, ‟ does not influence (2011) (see Table 1, 2), indicate that employee loyalty as much as commit- the measurement model is adequate. ment does. A probable explanation Specifically, the factor loadings of all would be that service attitude measure latent variables are all above 0.700 shows how much an employee feels (except for one item in “service atti- comfortable in serving customers, in tude ‟, which has 0.681). The values of which he/she can always choose an- average variance extracted and com- other job to continue serving. It is un- munality are all above 0.500. These derstandable that service attitude is not two combined suggest good conver- a significant factor. On the other hand, gent validity of the measurement mod- the tangible factors including job con- el. The values of square root average dition, personal benefit, and career variance extracted of all latent varia- development significantly influence bles are greater than inter-construct employee loyalty as demonstrated by correlations, suggesting good discrimi- other researchers (Ineson et al., 2013; nate validity. Ineson and Berechet, 2011; Meyer et al., 2004; Yang and Cherry, 2008). The composite reliability and internal consistency range from .853 Organizations that provide proper to .958, indicating good reliability of monetary compensations, opportunity our measurement model. The value of for training and development, and redundancy is 0.515, suggesting ade- friendly work environment easily quate fit of the structural model. arouse employee loyalty, in which employees are more likely to stay, commit, For hypotheses testing, the path and take more responsibility for the coefficients and statistical significance organizations. are reported (see Table 3). Specifically,

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Discussion and Conclusion communication with employees is. Managers should communicate with Employee loyalty is an important their employees with care and patience issue for service organizations. It can instead of simply getting rid of the help employee retention (Stum, 1998), trouble makers. Although Beadles et al. improve customer satisfaction and loy- (2000) claimed that turnover of dis- alty (Loveman, 1998; McCarthy, 1997), qualified employees is functional and and create organizational growth and beneficial, it is more often we find profit (Heskett et al., 1997; Reichheld employees leaving only because they and Teal, 2001; Yee et al., 2010). In cannot adapt to their supervisor’s lead- contrast, where there is no employee ership style. Practitioners should face loyalty, problems with employee turn- the problem caused by turnover culture over (Watrous et al., 2006) and turno- and endeavor to consolidate employee ver cost (Beadles et al., 2000; Hinkin loyalty for long-term organizational and Tracey, 2000) will arise and con- development. sequently impact organizational performance. For years, hoteliers in Tai- In their study of 1,900 American wan have placed less stress on the hotel employees, McDougal and Frame training and development of employ- (2004) pointed out employee loyalty is ees because of ‘turnover culture.’ They highly correlated to empowerment in have been unaware that training and work environment. Loyal employees development is a major contributor to are very willing to recommend their employee loyalty, and the benefit that boss to others and remain at their posi- follows is significant. When faced with tion for more than three yeas. Ghiselli, “turnover culture,” employers tend to La Lopa and Bai (2002) mentioned say, “Why do we have to waste re- enhancing employment training and source on training employees who are development is a significant indicator destined to leave. Better potential em- of employ loyalty. ployees can always be found in the human resource market.’ However, it The characteristics of the work is this misconception that leads to lack team also tighten the interactive rela- of employee loyalty and high turnover tions between employees. All employ- ratio. Based on the result of this study, ees need to develop sense of coexist- we are convinced that consummate ence. In addition to payment, other training and development system and incentives may also elevate employee adequate monetary reward will certain- service zest, motivate employees and ly induce employee loyalty. make them more confident. As a consequence, employees feel more affili- Granted, we are sure employees ated to the hotel, which again arouses will show higher level of intention to their loyalty. Other research also evi- stay, and take more responsibility, thus denced this fact (Huang, 2001; Gerfin, helping improve organizational per- 2004). formance. Communication is another critical issue for dejected employee Research Limitations and Suggestions loyalty. Managers of organizations in Taiwan often enforce authoritarian Due to manpower and budget leadership, which inevitably lacks shortage, the researchers collected data

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provided by exclusively employees than-10-year job experience. Further with international tour hotels in Tai- study is advised to collect data from wan. Forthcoming research is suggest- employees with work experience in ed to take international hotels with hotels for more than 10 years. It is in- different management styles into con- teresting to know whether job experi- sideration, thus preventing research ence can influence employee loyalty. bias. Most of the respondents had less-

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Costen, W.M., Salazar, J. (2011). The of Hospitality Management, 32, impact of training and development 31-39. on employee job satisfaction, loyalty, and intent to stay in the lodging Ineson, E.M., Berechet, G. (2011). industry. Journal of Human Re- Employee loyalty in hotels: Roma- sources in Hospitality & Tourism, nian experiences. Journal of Hu- 10, 273-284. man Resources in Hospitality & Tourism, 10, 129-149. Darmon, R.Y. (1990). Identifying sources of turnover cost: A seg- Lee, T.W., Mitchell, T.R. (1994). An ment approach. Journal of Market- alternative approach: The unfold- ing, 54, 46-56. Davidson, M.C.G. ing model of voluntary employee turnover. The Academy of Man- Timo, N., Wang, Y. (2010). How agement Review, 19, 51-89. much does labour turnover cost? A case study of Australian four- and Lincoln, J.R. (1996). Commitment, five-star hotels. International Jour- quits, and work organization in nal of Contemporary Hospitality Japanese and U.S. Plants. Industrial Management, 22, 451-466. and Labor Relations Review, 50, 39-59. Heskett, J.L., Sasser, E.W., Wheeler, J. (2008). The ownership quotient: Locke, E. (1976). The nature and caus- Putting the service profit chain to es of job satisfaction, in Dunnette, work for unbeatable competitive M. (Ed.), Handbook of Industrial advantage. Harvard Business Press, and Organizational Psychology, Boston, Mass. Rand McNally, Chicago, IL, pp. 1297-349. Heskett, J.L., Sasser, W.E., Schlesing- er, L.A. (1997). The service profit Loveman, G.W. (1998). Employee chain: How leading companies link satisfaction, customer loyalty, and profit and growth to loyalty, satis- financial performance: An empiri- faction, and value. Free Press, New cal examination of the service prof- York. it chain in retail banking. Journal of Service Research, 1, 18-31. Hinkin, T.R., Tracey, J.B. (2000). The cost of turnover: Putting a price on Mathieu, J.E., Zajac, D.M. (1990). A the learning curve. Cornell Hotel review and meta-analysis of the an- and Restaurant Administration tecedents, correlates, and conse- Quarterly, 41, 14-21. quences of organizational commitment, Psychological Bulletin, Hom, P.W., Griffeth, R.W. (1994). Vol. 108 No. 2, pp. 171-94. Employee turnover. Southwestern College Pub, Cincinnati, Ohio. McCarthy, D.G. (1997). The loyalty link: How loyal employees create Ineson, E.M., Benke, E., László, J. loyal customers. Wiley, New York. (2013). Employee loyalty in Hun- garian hotels. International Journal

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Meyer, J.P., Becker, T.E., Vanden- federal white-collar work force: berghe, C. (2004). Employee Findings from the survey of federal commitment and motivation: A employees. The American Review conceptual analysis and integrative of Public Administration, 26, 439- model. Journal of Applied Psy- 456. chology, 89, 991-1007. Wasmuth, W.J., Davis, S.W. (1983). Michaels, C.E., Spector, P.E. (1982). Managing employee turnover. Causes of employee turnover: A Cornell Hotel and Restaurant Ad- test of the Mobley, Griffeth, Hand, ministration Quarterly, 23, 15-22. and Meglino model. Journal of Applied Psychology, 67, 53-59. Watrous, K., Huffman, A., Pritchard, R. (2006). When coworkers and man- Milman, A. (2003). Hourly employee agers quit: The effects of turnover retention in small and medium at- and shared values on performance. tractions: The central Florida ex- Journal of Business and Psycholo- ample. International Journal of gy, 21, 103-126. Hospitality Management, 22, 17-35. Yang, J.T. (2009). Facilitating or Mowday, R.T. (1981). Viewing turno- inhibiting newcomer socialisation ver from the perspective of those outcomes in international hotels. who remain: The relationship of job attitudes to attributions of the Yee, R.W.Y., Yeung, A.C.L., Cheng, causes of turnover. Journal of Ap- E.T.C. (2010). An empirical study plied Psychology 66, 120-123. of employee loyalty, service quality and firm performance in the service Reichheld, F.F., Teal, T. (2001). The industry. International Journal of loyalty effect: The hidden force Production Economics , 124, 109- behind growth, profits, and lasting 120. value. Harvard Business School Press, Boston, Mass.

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EXPLORING CUSTOMERS’ POST-DINING BEHAVIORAL INTEN- TIONS TOWARD GREEN RESTAURANTS: AN APPLICATION OF THEORY OF PLANNED BEHAVIOR

Kaie-Chin Chung Department of Hospitality Management Taoyuan Innovation Institute of Technology Taoyuan, Taiwan, R.O.C. [email protected]

Abstract

The primary objective of the present study was to explore the ecological formation of restaurant customers’ post-dining behavioral intentions toward the green restaurant, by applying the Theory of Planned Behavior (TPB). The findings suggested that the TPB has a good fit to the data, and has a predictive power for behavioral intentions. Corresponding to the theory, the results of the analysis was presented for the three constructs of the TPB model which is composed of attitude, subjective norm, and perceived behavioral control. Each construct has a positive effect on customers’ post-dining behavioral intentions to behave in desirable ways to revisit the green restaurant and to spread positive word-of- mouth recommendation about the green restaurant. The findings provided insight into the consumers’ decision making processes and offered practical guidelines for green management in the context of restaurant industry. Research implications and suggestions are discussed.

Key Words: Theory of Planned Behavior, Attitude, Subjective Norm, Perceived Behav- ioral Control, Green Restaurant

Introduction increasingly understood that their purchasing behaviors would more or less In the past few years, the public influence the development of the envi- awareness of environmental issues has ronment on the earth, and have started to been on the increase. Consumers have increase the consumption of the ecologically friendly products (Han et. al.,

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2010). Thus, the green consumption has Researches about the formation of become an important social trend that restaurant customers’ desirable post- protects the environment and saves the dining behavioral intentions toward the earth (Kim & Choi, 2005). More and green restaurant have been limited. more restaurant customers are increasing Therefore, the present study’s objective to patronize restaurants that follow green to explore restaurant customers’ post- practices. Consequently, managers in dining behavioral intentions toward the different types of restaurant operations green restaurant would offer insight into have increasingly taken measures to the consumers’ decision making process, adopt green practices to enhance their and help us comprehend customers’ din- positive firm image (Chan & Wong, ing behaviors. In green studies, re- 2006). searchers have identified the green consumers with the methods of de- “Green” is not simply a color. The mographics and behavioral aspects. It is concept of “green” stands for: eco- evidenced that education is positively friendly, social justice, economic devel- associated with environmental involve- opment, and health (Wang et. al., 2013). ment, but on the contrary, age is ad- Lorenzini (1994) has defined green res- versely associated (Barber et al., 2010). taurants as new or renovated establishments that are designed, constructed, Researches about the green restau- operated, and demolished in an envi- rant have been primarily explored in the ronmentally friendly and energy efficient western countries. Few equivalent stud- manner. As an industrial renowned green ies have been conducted in Asia, particu- organization, the Green Restaurant As- larly in the context of Taiwan. The con- sociation has established a recognized cept of promoting green restaurants has green restaurant certification in the U.S. recently become popular in Taiwan. As to declare that the green restaurants must such, the present study has endeavored meet seven environmental categories: to investigate the determinants to predict water efficiency, waste reduction and customers’ desirable post-dining behav- recycling, sustainable durable goods and ioral intentions toward the green restau- building materials, sustainable food, rant setting situated in Taiwan. The pri- energy, reusables and environmentally mary objectives of the present study are preferable disposables, and chemical and twofold: 1) to examine the effects of the pollution reduction (GRA, 2016). Being three constructs of the Theory of Plan- a green restaurant, the restaurant can ned Behavior, including attitude, subjec- help position itself differently in today’s tive norm, and perceived behavioral con- competitive business environment. Fol- trol on the customers’ post-dining be- lowing the emergence of the green con- havior intentions toward the green res- cept, many studies (Hu et al., 2010; taurant, and 2) to test the influence of the Chou et al., 2012; Namkung and Jang, consumer demographics on the selection 2013) have been engaged in the context of patronizing the green restaurant. of green restaurant management. The present study is organized as follows. A review of the literature relat- 120 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

ed to the Theory of Planned Behavior Attitude. and behavior intention is presented. Re- search methodology includes data col- Attitude is the first construct of the lection, sample demographics, and data Theory of Planned Behavior. It refers to analysis. Finally, the conclusions of the one person’s perception of favorability present study are discussed. or unfavorability to engage in a behavior (Chou et al., 2012). It stands for the per- Literature Review ceived consequences of one’s behavior (Eagry & Chailen, 1993). In addition, Theory of Planned Behavior attitude can be cited as the perception of an object or behavior, which displays The Theory of Planned Behavior favor or disfavor, good or bad, like or (TPB), first proposed by Ajzen (1985) dislike (Ajzen & Fishbein, 2000). It is concerns the human behavioral decision recognized as a predictor to realize one’s making process and the motives behind behavioral intentions (Kwun, 2011). the related behavior (Chou et al., 2012). Many studies proved that attitude has a TPB is composed of three main concep- positive impact on behavioral intention. tual constructs: attitude, subjective norm, For instance, customers could patronize and perceived behavioral control. Ac- a green restaurant as visiting a friendly cording to TPB, one person’s behavior environment to eat fresh and healthy depends on one’s behavioral intention food, and feel socially esteemed (Han et. (Chou et al., 2012). TPB has been ap- al., 2010). They are assumed to perform plied to behavioral studies to investigate conservation as they care about the well- the ecological behavior in the tourism being of the earth (Griskevicius et al., and hospitality context (Kim et al., 2013). 2010). From this aspect, customers’ For instance, Kim et al. (2013) tests the recognition of a restaurant that is envi- TPB model with the anticipated regret, ronmentally friendly can affect their and investigates the model’s explanatory attitudes toward patronizing green res- power of customers’ intention to patron- taurants (Chen, 2010). ize the green restaurants. Jeong et al. (2014) explored the link among three Subjective Norm. elements including customers’ perceived green practices, perceived green image Subjective norm is the second con- of a restaurant brand, and attitudes to- struct of the Theory of Planned Behavior. ward a restaurant brand in an investiga- It is prostrated as the perceived social tion of Starbucks’ customers. Based on pressure to perform the behavior (Ajzen, the above mentioned researches, apply- 1991). It is the perceived opinions of ing the TPB is possible to measure the certain significant others, including fam- influence of customers’ decision in pat- ilies, friends, coworkers, supervisors, ronizing green restaurants, and explain and business partners. They all can play customers’ desirable post-dining behav- an important role to influence one’s be- ioral intentions in this study. havior. Therefore, subjective norm signi- fies the perceived desire of significant others to approve or disapprove one spe- 121 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

cific behavior. These norms are one per- effect on behavioral intention (Cheng et son’s recognition of the social pressures al., 2006). to proceed an behavior. The influence of subjective norms is very obvious in the Behavioral Intention Chinese context. Chinese try to meet the expectation of the significant people Behavioral intention relates to the about what is right or not right, subject stated likelihood of an individual’s en- to their social culture (Cheng & Lam, gagement in a specific behavior (Oliver, 2008). These norms similarly apply to 1997). It is perceived that behavioral Taiwan, a Chinese context, in which the intention is an antecedent determinant to present study investigated this research. predict the future behavior (Quelette & In this particular study, when significant Wood, 1998). The concept of behavioral others perceive patronizing a green res- intention in marketing and consumer taurant is the right behavior, one would behavior has been broadly investigated enhance his intention to follow suit. as a result of the high predictive power of intention toward an actual behavior Perceived Behavioral Control. (Jani & Han, 2013). Consumers tend to conduct actual behaviors when their in- Perceived behavioral control is the tentions to carry out the behavior turn to third construct of the Theory of Planned be strong (Ajzen & Fishbein, 2000; Kim Behavior. It is prostrated as the per- et. al., 2013). In general, behavioral in- ceived ease or difficulty of conducting a tentions are postulated to predict two behavior (Ajzen, 1991). It evaluates the main desirable intentions: to revisit the recognition of how well one person can service providers, and to spread positive control certain determinants that facili- word-of-mouth recommendation about tate or limit his behavior to perform in a the providers. When the behavioral in- particular situation (Cheng & Lam, tention is favorable, there is a possibility 2008). In the setting of healthy behavior that a restaurant customer will revisit the regarding food, a number of researches restaurant and spread positive word-of- tested the relationship between perceived mouth recommendation to others with behavioral control and behavioral inten- whom they are related. When the behav- tion (Wong & Mullan, 2009). In the ioral intention is negative, there is a high meantime, many studies have proved possibility that a restaurant customer that one’s behavior is positively affected will not visit the restaurant again, and by his self-confidence to conduct a be- may spread negative referrals about the havior (Baker et al., 2007). Their find- restaurant to others. These intentions, ings show that when one person has less eventually, will influence the restau- control over a behavior, his behavioral rant’s business, either positively or nega- intention will be lower for the desired tively (Jani & Han, 2013). Therefore, the activity. In the restaurant setting, per- present study focuses on the exploration ceived behavioral control has been ap- of two main behavioral intentions: the plied to predict customers’ expressions willingness to revisit green restaurants of satisfaction, which reveals a positive and the willingness to spread positive

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word-of-mouth recommendation about H3: Perceived behavioral control has the green restaurants in Taiwan. a significant and positive effect on the post-dining behavioral inten- Based on the review of theoreti- tions. cal literature, the present study therefore proposed the following hypotheses: H4: Customers’ willingness to revisit the green restaurant and willingness H1: Attitude has a significant and to spread positive word-of-mouth positive effect on the post-dining recommendation about the green behavioral intentions. restaurant in Taipei depends on the different demographic variables. H2: Subjective norm has a significant and positive effect on the post- dining behavioral intentions.

Attitude H1

H2 Subjective Norm

Behavioral Intention: H3 -Willingness to revisit -Willingness to recommend Perceived Behavioral Control

Demographic variables Figure 1. Research Framework gather data from randomly selected res- Method taurant customers after they patronized five green restaurants in Taipei, Taiwan. Research Design The sample restaurants all adopt green practices in their establishments and are The present study explores custom- all recognized as green restaurants by an ers’ post-dining behavioral intentions industrial green organization, or news toward the green restaurant setting in an media in Taiwan.

The questionnaire consists of four emerging nation, i.e., Taiwan. The self- parts, the first about such respondent administered survey designed to mini- demographic information as age, gender, mize participant effort was employed to income, educational level, occupation, 123 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

classification of vegetarian, and reason distributions were calculated to form for vegetarian. Derived from an exten- respondents’ demographic and dining sive review of the literature, eleven profiles. To ensure validity and reliabil- statements were designed to measure ity of the survey questions, factor analy- respondents’ perception of green restau- sis and Cronbach’s alpha coefficients rants. Statements to ask participants to were computed (Cronbach, 1951). measure their perception were on a five- point Likert scale ranging from 1 Results and Discussion (strongly disagree) to 5 (strongly agree) constituting the second part of the survey Demographic Profile of Respondents instrument. The third part measured customers’ behavioral intentions in two Table 3. presents the descriptive primary constructs: willingness to revisit statistics that shapes the demographic the green restaurant and willingness to profiles of the survey respondents. The spread positive word-of-mouth recom- number of female respondents (52.9%) mendation about the green restaurant. was greater than that of male (47.1%). Each behavioral intention was also About 75% of the survey participants measured on the five-point Likert-type were aged between 21 and 60, with most scale ranging from 1 (very unlikely) to 5 aged between 41 and 60. About 51% of (very likely). Prior to actual survey ad- respondents reported marital status as ministration, a pilot test was performed married. About 51% of respondents in- among customers of one green restaurant dicated higher education from college or in Taipei in order to identify and elimi- above. Around 80% of the respondents nate any ambiguity in the questionnaire. were employed in public, manufacturing, and commercial organizations, with the Data Collection and Analysis majority in manufacturing and commercial. In terms of the monthly incomes, Five questionnaires were even dis- about 86% of the surveyed respondents tributed to five green restaurants respec- declared incomes exceeding US$2,000 tively. Customers were asked to fill out with the largest percentage of respond- questionnaires while they finished their ents reporting the highest level of in- meals and were waiting for their bills. come. Thus, demographic information Respondents were not offered incentives indicates that respondents generally have for completing the questionnaires. relatively high levels of monthly income, and have work backgrounds in manufac- In total, 476 surveys were returned, turing and commercial. About 32% of and 455 were considered eligible for the respondents reported to be vegetarian, data analysis after 21 were excluded as a accounting for the largest group of din- result of incomplete responses, what ers, with the rest of 25%, lacto-ovo gave response rate of 95%. Frequency Table 3. Demographic Profile of Respondents (N = 268)

Variable N % Gender 124 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Male 214 47.1 Female 241 52.9 Age Under 20 24 5.4 21- 40 132 29.1 41- 60 209 45.8 Above 61 90 19.7 Marital Status Married 232 51.1 Single 184 40.3 Others 39 8.6 Educational Level Under High School 55 12.1 High School 165 36.4 College 197 43.4 Graduate school and above 38 8.1 Occupation Student 42 9.2 Public 93 20.4 Manufacturing 152 33.4 Commercial 121 26.6 Others 47 10.4 Monthly Income (USD) Under 1,000 58 12.8 1,001-2,000 198 43.5 2,001-3,000 143 31.4 Above 3,000 56 12.3 Classification of Vegetarian Vegetarian 144 31.7 Lacto-ovo vegetarian 116 25.4 Occasional vegetarian 88 19.4 Non-vegetarian 107 23.5 Reason for Vegetarian Religious faith 163 35.8 Health concerns 176 38.7 Environmental views 61 13.4 Others 55 12.1

ronmental views; and 12%, others.Table vegetarian; 19%, occasional vegetarian; 4 presents the relations of customers’ and 24%, non-vegetarian. Among those, attitude, subjective norm and perceived who declared of being vegetarian, about behavioral control with two post-dining 36% of respondents reported religious behavioral intentions – willingness to faith as the main reason for it, with the revisit and willingness to recommend. rest of 39%, health concerns; 13%, envi

Table 4. Correlation analysis of influencing factors and behavioral intention

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Q Influencing Factor Willingness to Willingness to Recom- Revisit mend Attitude 1. My patronizing a green restaurant is 0. 23** 0.36** necessary. 2. My patronizing a green restaurant is 0. 23** 0.39** good. 3 My patronizing a green restaurant is 0. 17** 0.25** beneficial. 4 My patronizing a green restaurant is 0. 16** 0.19** enjoyable. Subjective Norm 5 The public green policies are one of 0. 33** 0.17** the major factors to influence me to patronize a green restaurant. 6 My family and friends think that I 0. 31** 0.14* should patronize a green restaurant. 7 My family and friends want me to 0. 15** 0.24** patronize a green restaurant. 8 The green information provided by the 0. 16** 0.15** environmental protection groups is one of the major factors to influence me to patronize a green restaurant. Perceived Behavioral Control 9 I have the self-esteem to patronize a 0. 12** 0.18** green restaurant. 10 I have the capability to patronize a 0. 15* 0.16** green restaurant. 11 It is easy for me to patronize a green 0. 17** 0.35** restaurant. *p <0.05 , **p <0.01 ed to the customers’ preferences in res- The results have been computed taurant choices, particularly the super- with the use of Ordinary Least Squares iority of green restaurants over the “con- (OLS) method, which, thanks to its sim- ventional” ones (Q2, Q3, Q4, Q7), also plicity and understandability is frequent- have a positive effect on the customers’ ly used in survey analysis (Nathan and willingness to revisit and their willing- Holt, 1979). As presented in Table 4, all ness to recommend green restaurants to customer opinions that green restaurants others. Interestingly, when customers play a significant role in mitigating the have been asked about the influence of degradation of the natural environment public green policies (Q5), family’s (Q1, Q9, Q10) are positively related to green values (Q6) or environmental pro- the willingness to revisit and the will- tection groups (Q8) on their choice of ingness to spread the positive word-of- green restaurants, all responses, regardless the source of influence, revealed positive relation on customers’ willing- mouth recommendation about the green ness to revisit and willingness to rec- restaurant. Similarly, all questions relat- ommend. All results presented in Table 126 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

4 are statistically significant at 95% or internal consistency reliability of survey 99% level. answers within areas of Attitude, Subjec- tive Norm, and Perceived Behavioral Table 5 presents the estimation of Control. In order to further test the facto- internal consistency with the use of rial validity of data obtained with ques- Cronbach’s alpha test. As this test is best tionnaire, the factor analysis has been suitable for continuously scored varia- conducted. bles, it was employed here to test the

Table 5. Results of validity and reliability

Construct Question Number Cronbach α Loading Cumulative (Factor) (Item) (Internal Factor Variance Consistency) (%) Factor 1 Attitude 0.78 53.68 Q1 0.79 Q2 0.77 Q3 0.75 Q4 0.71 Factor 2 Subjective Norm 0.77 56.28 Q5 0.78 Q6 0.77 Q7 0.73 Q8 0.75 Factor 3 Perceived Behavioral Control 0.81 66.23 Q9 0.88 Q10 0.85 Q11 0.76

The values of Cronbach’s alpha test Table 5, all factor loadings, which repre- for scores related to Attitude, Subjective sent the correlation between the varia- Norm, and Perceived Behavioral Control bles and the factor, achieved values equals 0.78, 0.77 and 0.81 accordingly, higher than 0.7 what indicates that each which means that 78%, 77% and 81% of factor extract sufficient variance from the variance in the score accordingly is the item variable, and none questions reliable variance, thus the internal con- had to be eliminated. All three factors sistency is ensured. As presented in

Table 6. Regression analysis of behavioral intention models

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Factor Willingness to Willingness to Revisit Recommend

Attitude 0.26** 0.36***

Subjective Norm 0.39 0.05

Perceived Behavioral Control 0.06 0.15**

R2 0.05 0.23

** p <0.01, ***p <0.001 contain a small number of variables, thus areas, although statistical significance in all cases more than 50% of cumula- has been achieved solely for the attitude tive variance is explained and equals and perceived behavioral control in case 53.68, 56.28 and 66.23 for Factor 1, 2 of willingness of recommendation. The and 3 respectively. explanatory power of the model is quite low, as achieved solely 5% in case of The regression analysis between willingness to revisit and 23 % in the behavioral intentions and influencing case of willingness to recommend. factors revealed positive relations in all

Table 7. Relation between different demographics in their influence on behavioral intention

Willingness to Revisit Willingness to Recommend Variable Mean Mean Gender Male 4.23 4.31 Female 4.25 4.29 Age Under 20 4.15 4.17 21- 40 4.25 4.21 41- 60 4.33 4.28 Above 61 4.28 4.35 Marital Status Married 4.11 4.77 Single 4.13 4,26 Others 4.17 4.33 Education Level Under High School 3.75 4.00 High School 4.36 4.23 128 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

College 4.47 4.34 Graduate school and above 4.28 4.31 Occupation Student 4.18 4.14 Public 4.15 4.28 Manufacturing 4.37 4.34 Commercial 4.32 4.27 Others 4.41 4.38 Monthly Income (USD) Under 1,000 4.26 4.26 † 1,001-2,000 4.36 4.20 2,001-3,000 4.36 4.42 Above 3,000 4.39 4.37 Classification of Diet Vegetarian 4.26 4.39 † Lacto-ovo vegetarian 4.45 4.38 Occasional vegetarian 4.18 4.34 Non-vegetarian 4.36 4.21 Reason for Vegetarian Religious faith 4.38 4.35 Health concerns 4.26 4.30 Environmental views 4.31 4.38 Others 4.25 4.18 †p<.10 who are in informal relationships, alt- As the results presented in the Ta- hough they declared the highest willing- ble 7 indicate, responding female are ness to recommend the restaurant than more willing to revisit the green restau- the rest of those polled. rant than male, although the latter declared higher willingness to recommend These respondents, who graduate the green restaurant. The willingness to from college or high school demonstrat- recommend the green restaurant is the ed higher willingness to return and rec- higher, the higher the age of respondents, ommend the green restaurant than those, although the willingness to revisit not – who did not graduate from high school. as is significantly higher among the Interestingly, students who answered the middle-aged respondents (41-60) than questionnaire, declared the lowest will- younger and older customers. Married ingness to revisit and recommend the individuals who participated in the sur green restaurant among all surveyed. The result of the survey also suggested, vey are less interested in revisiting the that the willingness to return is the high- green restaurant than single or those er, the higher declared income of re- 129 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

spondents, although this relation is adopted the Theory of Planned Behavior slightly different when willingness to to conduct the investigation. recommend was measured. Here, these two groups of respondents who declared Researches about exploring restau- the highest income also stated that they rant customers’ desirable post-dining are very willing to recommend a green behavioral intentions are limited in Tai- restaurant, however the group who did wan. This study represents one of the not express their high willingness was initial attempts to adopt the Theory of not the one with the least earning (below Planned Behavior to examine factors to US$1,000) but the one who earn in the predict the ecological formation of be- average (US$1,001-2,000). The survey havioral intention in a green restaurant revealed that the vegetarian diet did not context in Taiwan. The results of the significantly influence the high willing- present survey among customers of three ness to revisit a green restaurant, as it green restaurants in Taipei allowed to was almost similarly reported among the positively verify the first three hypothe- lacto-ovo vegetarians as well as the non- ses of the present study. Table 4 presents vegetarian. These findings are different the correlation analysis of customers’ when willingness to recommend has attitude, subjective norm and perceived been asked. In this case, those who stat- behavioral control on the two post- ed as being vegetarians (always or occa- dining behavioral intentions: the will- sionally) declared significantly higher ingness to revisit green restaurants and willingness to recommend a green res- the willingness to spread positive word- taurant than the respondents who per- of-mouth recommendation about the ceived themselves as being non vegetar- green restaurant. All analyzed compo- ian. These respondents who declared as nents of the attitude, subjective norms being vegetarian because of religious and perceived behavioral control are beliefs or environmental concerns are positively related to the behavioral inten- also more willing to revisit green restau- tions. All the results achieved statistical rants as well as recommend them than significance. Thus, the hypothesis H1, those, who choose to be vegetarian for H2 and H3 has been verified positively. health concerns or other reasons. The reliability and validity of the Conclusion questionnaire have been tested with the use of Cronbach alpha test and factor The primary objective of the pre- analysis. Obtained results of the first test sent study is to explore restaurant cus- confirmed the internal consistency of the tomers’ desirable post-dining behavioral influencing factor scores, while the re- intentions toward the green restaurant. sults of the factor analysis further en- The customer’s behavioral intentions in sured that all questions have been rele- the present study are expressed as the vant, and none of them should be elimi- willingness to revisit the green restaurant nated. and willingness to spread positive word- of-mouth recommendation about the Although the regression analysis green restaurant. The present study between behavioral intentions and influ- 130 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

encing factors revealed positive relations policy makers. Therefore, a good under- in all areas (Table 6), however the ex- standing of the determinants of favorable planatory power of the model is very post-dining behavioral intentions such as low in both cases. These results suggest saying positive referrals about the res- that there are also different factors (apart taurant, recommending the restaurant to from Attitude, Subjective Norm, and others, and repeating patronage can pro- Perceived Behavioral Control) which vide practical guidance for restaurant influence the willingness to revisit the practitioners (Hu, et. al., 2010). Fur- green restaurant in Taipei and the will- thermore, by examining the different ingness to spread positive word-of- levels of customers’ green behaviors in mouth recommendation about the green demographics, the present study estab- restaurant in Taipei. lishes a research framework that can explain and predict restaurant customers’ Customers’ willingness to revisit behavioral intentions toward the green the green restaurants in Taipei and their restaurant. willingness to recommend in relation to different demographic variables is pre- The present study has some limita- sented in Table 7. As the conducted sur- tions. First, as explanatory power of the vey revealed, different variables, includ- model is low both for willingness to re- ing gender, age, marital status, education visit green restaurants in Taipei and will- level, occupation, monthly income, clas- ingness to spread positive word-of- sification of diet and reason for vegetari- mouth recommendation about green an affect the customers’ behavior inten- restaurants in Taipei, it means that other tions to revisit the green restaurant and factors, not analyzed in this study to spread positive word-of-mouth rec- stronger affect customers’ behavioral ommendation about the green restaurant. intention in case of green restaurants in However, due to the lack of statistical Taipei. Second, the survey has been significance in almost all results, the conducted solely in green restaurants in hypothesis 4 could not be verified posi- Taipei, what posts significant limitations tively. in terms of results’ generalization. On the basis of the above, further research in This study contributes to academic terms of different influencing factors and discussion on the customers’ behavioral bigger geographical scope is recom- intention in the context of green restau- mended. rant. By analyzing the factors influencing customers’ willingness to revisit and to recommend green restaurants, the present study has significant managerial References implications, particularly in the area of marketing as well as in the area of value Ajzen, I. (1985). From intentions to ac- creation for stakeholders. Finally, by tions: A theory of planned behavior. investigating the influence of environ- In J. Kuhl & J. Beckman (Eds.). Ac- mental policy on customers’ behavior, tion-control: From cognition to be- this research is of great important for havior. Springer, New York, 11-39. 131 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

teurs. International Journal of Hospi- Ajzen, I. (1991). The theory of planned tality Management. 27, 552-562. behavior. Organizational Behavior and Human Decision Process. 50(2), Cheng, S., Lam, T., & Hsu, C. H. C. 179-211. (2006). Negative word-of-mouth communication intention: an applica- Ajzen, I., & Fishbein, M. (2000). Atti- tion of the theory of planned behav- tudes and the Attitude-Behavior Re- ior. Journal of Hospitality & Tourism lation: Reasoned and Automatic Pro- Research. 30(1), 95-116. cesses. European Review of Social Psychology. 11(1), 11-33. Chou, C. J., Chen, K. S., & Wang, Y. Y. (2012). Green practices in the restau- Baker, E. W., Al-Gahtani, S. S., & Hu- rant industry from an innovation bona, G. S. (2007). The effects of adoption perspective: Evidence from gender and age on new technology Taiwan. International Journal of implementation in a developing Hospitality Management. 31, 703- country: testing the theory of 711. planned behavior (TPB). Information Technology & People. 20(4), 352- Cronbach, L. J. (1951). Coefficient Al- 375. pha and the internal structure of tests. Psychometrika. 16, 297-334. Barber, N., Taylor, D.C., & Strick, S. (2010). Selective marketing to envi- Eagry, A. H., & Chailen, S. (1993). Psy- ronmentally concerned wine con- chology of attitudes. Fort Worth, TX: sumers: a case for location, gender Harcourt Brace Jovanovich. and age. Journal of Consumer Mar- ket. 27(1), 64-75. Green Restaurant Association (2016). Available at: Chan, W., & Wong, K. (2006). Estima- http://www.greenrestaurant.com (re- tion of weight of solid waste: news- trieved April 17, 2016). papers in Hong Kong hotels. Journal of Hospitality & Tourism Research. Griskevicius, V., Tybur, J.M., & Van 30(2), 231-245. den Bergh, B. (2010). Going green to be seen: status, reputation, and con- Chen, Y.S. (2010). The drivers of green spicuous conservation. Journal of brand equity: green brand image, Personal Social Psychology. 98(3), green satisfaction, and green trust. 392-404. Journal of Business Ethics. 93(2), Han, H., Hsu L. T. J., & Sheu, C. (2010). 307-319. Application of the Theory of Planned Behavior to green hotel choice: Test- Cheng, S., & Lam, T. (2008). The role of ing the effect of environmental the customer–seller relationship in friendly activities. Tourism Man- the intention of the customer to com- agement. 31, 325-334. plain: A study of Chinese restaura- 132 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Hu, H., Parsa, H. G., & Self, J. ( 2010). vances in Consumer Research. 32, The dynamics of green restaurant 592-599. patronage. Cornell Hospitality Quar- terly. 51(3), 344-362. Kwun, D.J.W. (2011). Effects of campus foodservice attributes on perceived Jani, D., & Han, H. (2013). “Personality, value, satisfaction, and consumer at- social comparison, consumption titude: a gender-difference approach. emotions, satisfaction, and behavior- International Journal of Hospitality al intentions, how do these and other Management. 30(2), 252-261. factors relate in a hotel setting?” In- ternational Journal of Contemporary Lorenzini, B. (1994). The green restau- Hospitality Management. 25(7), 970- rant, part II: Systems and service. 993. Restaurant & Institutions. 104(11), 119-36. Jeong, E. H., Jang, S. C. H., Day, J., & Ha, S. (2014). The impact of eco- Namkung, Y., & Jang, S. C. S. (2013). friendly practices on green image Effects of restaurant green practices and customer attitudes: An investiga- on brand equity formation: Do green tion in a café setting. International practices really matter? International Journal of Hospitality Management . Journal of Hospitality Management. 41, 10-20. 33, 85-95.

Kim, E., Ham, S., Yang, I. S., & Choi, J. Nathan, G. & Holt, D. (1979). The Ef- G. (2013). The roles of attitude, sub- fect of Survey Design on Regression jective norm, and perceived behav- Analysis, Journal of the Royal Statis- ioral control in the formation of con- tical Society. Series B (Methodolog- sumers’ behavioral intentions to read ical), 42(3), 77-386. menu labels in the restaurant industry. International Journal of Hospital- Oliver, R.L. (1997). Satisfaction: A Be- ity Management. 35, 203- 213. havioral Perspective on the Consum- er. Raska, New York: McGraw-Hill. Kim, Y. J., Njite, D., & Hancera, M. (2013). Anticipated emotion in con- Quelette, J.A., & Wood, W. (1998). sumers’ intentions to select eco- Habit and intention in everyday life: friendly restaurants: Augmenting the the multiple processes by which past theory of planned behavior. Interna- behavior predicts future behavior. tional Journal of Hospitality Man- Psychological Bulletin. 124(1), 54- agement. 34, 255-262. 74.

Kim, Y., & Choi, S.M. (2005). Anteced- Wang, Y. F., Chen, S. P., Lee, Y. C., & ents of green purchase behavior: an Tsai, C. T. S. (2013). Developing examination of collectivism, envi- green management standards for res- ronmental concern, and PCE. Ad- taurants: An application of green supply chain management. Interna- 133 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

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THE INVESTIGATION OF RAW DATA PATTERN LEADING TO ERRONEOUS GREY PREDICTION

Shou-Jen Huang Department of Industrial Management I-Shou University, Taiwan

Chun-I Chen* Department of Industrial Management I-Shou University, Taiwan [email protected] *corresponding author

Abstract

Grey theory, especially grey model GM(1,1), is widely applied in various academic fields, particularly in forecasting science, and appeared in hundreds of research papers. Grey model GM(1,1) is famous for its simple mathematics and few collected raw data needed. As few as four raw data are sufficient for conducting grey model GM(1,1) forecasting. Unfortunately, the necessary and sufficient grey model GM(1,1) condition that the grey development coefficient a cannot equal to zero is omitted originally. Therefore, the singular phenomenon occurs when raw data are in certain permutation. In this research, the most common four raw data case is discussed and the method of symbolic operation is used to explore what type of raw data pattern will cause grey development coefficient a equals to zero leading to erroneous grey prediction. The result shows that the grey development coefficient a equals to zero when the second and fourth data are identical. This important conclusion could provide pre-examination tool for checking suitability of raw data for GM(1,1) forecasting.

Key Words: Grey prediction, symbolic operation, L'Hopital 's Rule, Grey theory, permutation

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Introduction Chen et al. (2008) developed the nonlinear grey model NGBM(1,1) to The Grey Model, which is abbreviat- predict the trends of Taiwan’s main trade ed as GM, was proposed by Professor partners’ foreign exchange rates against Deng in 1980s (1982). Subsequently, it the U.S. dollar. The results proved that has developed rapidly and is applied the novel NGBM model is feasible and extensively in the field of forecasting efficient. Hsu et al. (2009) presented science for various academic fields, such MFGM, an integration prediction meth- as industry, economy, natural phenome- od that included a grey model, Fourier non, etc., during the last three decades. series, and Markov state transition ma- The reasons why grey theory is popular trix and provided superior predictions of are easy mathematics and limited raw the turning time of the Taiwan weighted data needed, typically as few as four data stock index. Tien (2009) presented a (Liu, 2007). grey prediction model called FGM(1,1) that applied a more compact algorithm to There are various types of grey address the disadvantages of the GM(1,1) models. Among those, GM(1,1) is the model. Wang et al. (2010) improved the most popular because of its simple prediction performance of the modified mathematics together with satisfactory GM(1,1) model through optimization by forecasting accuracy. Basically, grey adopting a novel approach. This in- model is the idea of regression by solu- volved a unique method of minimizing tion of differential equation instead of the error sum of squares by determining tradition polynomial. Therefore, GM(1,1) the weighted coefficients of the first and stands for grey model with first order last item from a sequence of raw data. differential equation and one dependent variable. Up to now, Grey model GM The modified GM(1,1) model (1,1) is widely applied in many fields provides superior prediction abilities and attains satisfactory forecasting accu- compared to other predictive methods racy. However, a number of scholars because it employs Fourier series fitting have diligently endeavored to improve to forecast the highly noisy data of the the forecasting accuracy of grey model U.S. dollar to Euro parity. Kayacan et al. GM(1,1). For example, Hsu and Wang (2010) investigated different grey mod- (2007) employed an improved GM(1,1) els such as GM(1,1), Grey Verhulst model to determine the correct range of model, modified grey models using Fou- the grey development coefficient a and rier Series. The result showed that grey input b through Bayesian analysis among these grey models, the modified to improve the forecast accuracy. Li et al. GM(1.1) using Fourier series in time is (2007) combined GM(1,1) with a Mar- the best in model fitting and forecasting. kov chain model to predict the business Li and Wen (2011) proposed a residual trends of Chinese international airlines, GM(1,1) model and used a Markov state and employed the Taylor approximation transition matrix to improve its forecast method to obtain superior prediction accuracy by assessing the residual pre- precision. The new prediction model is dictive value using a reliable mechanism. termed T-MCGM(1,1). Truong and Ahn (2012) presented a

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novel grey model, SAGM, for improving are identical. The grey development co- the prediction performance of the efficient is equal to zero. This result GM(1,1) model by addressing the identi- could provide researches, who apply fied disadvantage. Lin et al. (2012) pre- GM(1,1) in his fields, a mean to avoid sented the ultimate grey model, that is, possible wrong forecasting result. EFGM(1,1). By combination of a Fouri- er series and exponential smoothing The mathematical model of GM(1,1) method, EFGM(1,1) shows its excellent prediction in increasing forecasting ac- The derivation of traditional GM(1,1) curacy. In Grey theory, the accumulated A family of grey forecasting generating operation (AGO) technique is models was selected to develop a rea- applied to reduce the randomization of sonable prediction approach using the the raw data. These processed data be- GM(1,1) model for all aspects of eco- come monotonic increase sequence nomic activities and natural sciences. which complies with the solution of first Because of the contributions made by order linear ordinary differential equa- these scholars, the prediction ability of tion. Therefore, the solution curve would the grey model GM(1,1) was significant- fit to the raw data with high precision. In ly improved. Unfortunately, none of the following section, the derivation of research found the intrinsic defect of GM(1,1) is briefly described: GM(1,1). Chen and Huang (2013) found a necessary and sufficient condition for Step 1: Assume that the original series of grey model GM(1,1) is omitted and a data with m entries is meaningless prediction result is achieved subsequently. That is the grey develop- x(0)= { x (0)(1), x (0) (2),LL , xkxm (0) ( ), (0) ( ) } ,(1) ment coefficient a could not equal to zero in the grey model GM(1,1). It is where raw material x ( 0 ) stands for the called singular phenomenon. The im- non-negative original historical time portance of this condition is the same as series data set. the denominator cannot be zero in a fraction or negative number is not allowed to Step 2: Construct x (1 ) by one time ac- appear in the square root sign. This con- cumulated generating operation (1- dition is simple but extremely important. AGO), which is Once omitted, the prediction could be meaningless. In order to avoid erroneous (1) (1) (1)LL (1) (1) ,(2) forecasting, the prior check of raw data x= { x(1), x (2), , xkxm ( ), ( ) } k has been strongly suggested. In this re- )1( )0( where x (k) = ∑x i)( and k=1,2,3,…, m. search, various types of permutation of i=1 raw data are investigated by symbolic operation method to find out under what Step 3: The 1-AGO is monotonic in- situation this phenomenon occurs. The crease sequence which is similar to the research result shows in typical four raw solution curve of first order linear differ- data case when second and fourth digit ential equation. Therefore, 1-AGO could

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be fitted by the solution curve of follow-  − z )1( (2) 1  x (0) (2) ing equation:    ()0  − z )1( 3 1 x ()3 ^  ()  ,   (9) (1) ^ B = YN = d x (1)  M M  M  +a x = b , (3)     dt )1( ()0 − z ()m 1 x ()m  where Λ represents grey predicted value, a and b are model parameters. Step 5: To solve Eq.(3) together with Step 4: The model parameters a and b can be solved by discretization of Eq.(3) initial condition, , the par- ^ ^ ^ ticular solution is dx(0) xttxt (1)(+ ∆ ) − (1) () = lim . (4) dt∆t → 0 ∆ t ^ )1( )0( b −ak b x (k + )1 = (x )1( − )e + , (10) a a If the sampling time interval is unity, where k=2,3,4,…. then let Δt→1, and therefore the Eq.(4) reduces to Hence, the desired prediction output at k ^ )1( d x step can be estimated by inverse accu- ≅ x )1( (k + )1 − x )1( (k) = x )0( (k + )1 (5) dt mulated generating operation (1-IAGO) where k=1,2,3,…. which is defined as

^ )0( ^ )1( ^ )1( The predicted value is approximated x (k + )1 = x (k + )1 − x (k) by background value and is de- 11) b scribed as below: = 1( − ea )( x )0( )1( − )e−ak ^ )1( )1( )1( )1( a x ≅ Px (k) + 1( − P)x (k + )1 = z (k + )1 (6) where k=1,2,3,…. where k=1,2,3,…. The singular phenomenon of GM(1,1) Here P is traditionally set to be 0.5 in the original model. And the source model The singular phenomenon that grey can be obtained development coefficient a equals to zero x )0( (k) + az )1( (k) = b , (7) was proposed by Chen and Huang where k=1,2,3,…. (2013). When a=0 occurs, the L'Ho- By substituting raw data into Eq.(7), the pital's Rule (Stewart, 2003), which uses model parameters a and b could be derivatives to help evaluate limits in- solved by least square method as follow: volving various types of indeterminate forms, must be applied to solve the inde- ‧ － a T −1 T terminate form of 0 ( ∞) in Eq. (11).   = ()B B B YN (8) b The deriving process is shown below:

Λ )0( b where B and YN are defined as follows lim x (k + )1 = lim 1( − e a )[ x )0( )1( − ]e −ak a→0 a→0 a (12)

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The above problem is encountered where k=2,3,4,…, m. is the actual when a approaches to zero and which is value and is the forecast value. called the indeterminate form. The total model precision can be defined by average relative percentage error Solving Eq.(12) by rearranging it as (ARPE ) as follows follow: 1 m Λ )0( ARPE = ε(avg ) = ∑ ε(k) ×100 %, (16) a )0( b −ak lim x (k + )1 = lim 1( − e )[ x )1( − ]e m k =2 a→0 a→0 a where k=2,3,4,… a 1− e (13) ^ )0( )0( = lim ak x (k + )1 − x (k + )1 a→0 e RGM = ε (RGM ,k + )1 = ×100 % b x )0( (k) x )0( )1( − a (17) where k+1 ≦m. is the actual Differentiate both numerator and value and is the forecast val- denominator and the above result shows ue. that Λ )0( The grey rolling model ( RGM ) lim x (k + )1 = b , a→ 0 uses the forward sequence data to calcu- (14) late the residual percentage and is a reasonable model for determining the varia- From the conclusion, the prediction tion tendency because the RGM parame- value will be grey input b when grey ters are updated continuously. The mod- development coefficient a equals to zero. el is reconstructed when a new observation is obtained. Error analysis Symbolic operation analysis To examine the model precision in this study, error tests are required to de- Since singular phenomenon has termine the error between the forecast been found and the solution, by L’Hop- value and actual value. Therefore, three ital’s rule, has been proposed, the next statistical measures are adopted, namely question is how to do prior check of raw relative percentage error ( RPE ) analysis, data to avoid it. This is research topic of average relative percentage error ( ARPE ), this paper. In this study, the method of and the rolling grey model ( RGM ) error symbolic computation is adopted to cal- analysis, to assess the model’s precision. culate the general case. The situation when grey development coefficient a The three measures are defined as equals to zero will be found after a series follows: of computation. ^ )0( x )0( (k) − x (k) RPE = ε (k) = ×100 % The symbols α, β, γ, and δ are used x )0( (k) to substitute the original four-point ob- (15) servation values and performed calculations using symbolic operation. Four cases are examined as follow:

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Case (a): Four symbols in the series are and Huang (2013) found the forecasting identical ( α, α, α, α) result will be erroneous when grey development coefficient equals to zero and Case (b): Three of the four symbols in they also proposed method to overcome. the series are identical, and on- In this subsequent work, a prior check criterion has been developed. That is to ly one ([ ]) such sequence ex- check equality of second and fourth digit before using GM(1,1) forecasting. If this isted, namely ( α, β, β, β) step is neglected, the possibility of erro- Case (c): Two of the symbols in the se- neous result might occur. ries are identical, and three ([ ]) such sequences existed, Therefore, the correct steps to perform GM(1,1) forecasting with four data namely ( α, β, β, δ), ( α, β, γ, β), are: and ( α, β, γ, γ) Step 1. Prior check of raw data, Case (d): Four symbols all differed and Step 2. Different predictors used existed in the sequences of ( α, based on step 1. β, γ, δ). Note: above four cases are with fixed The proposed flowchart for applying initial value α. GM(1,1) model is shown in figure 1.

Four cases are calculated by In order to show the importance of MATLAB and their corresponding re- proposed procedure, an example of sults are shown in Table 1. It shows that OECD oil demand from 2010 to 2014 is the grey development coefficient a be- adopted as a practical case. comes zero when the second and fourth symbols are identical, such as ( α, α, α, α), Practical Case: OECD Oil Demand (α, β, β, β) and ( α, β, γ, β). In the case of from 2010 to 2014 which grey development coefficient a does not equal to zero, the term ( β-δ) or In order to show the importance of (β-γ) appears in the fraction. The only prior check of raw data, an example of chance to have zero solution is to let β=δ OECD oil demand from 2010 to 2014 is or β=γ. Here, the conclusion has reached adopted for practical case study. The that grey development coefficient a be- data is retrieved from oil market report comes zero if and only if the second and from International Energy Agency fourth data are identical in the raw data. (http://omrpublic .iea.org/). The OECD Also from table 2, the grey development oil demand from 2010 to 2014 is 47, coefficient a is not affected by the initial 46.5, 45.9, 46, ad 45.9 million barrels value α. per day, respectively. When the rolling forecasting is adopted, the first four data Practical Case Study are used as raw data, which are 47, 46.5, 45.9 and 46. The forecasting result is GM(1,1) adopts four raw data to calcu- showed on the row 1 on Table 2. The late the model parameters a and b. Chen 140 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Table 1: MATLAB results for the four cases calculated by symbolic operation

observation data the grey development coefficient a

Case (a): α α α α 0 Case (b): α β β β 0 Case (c): α β β δ

α β γ β 0

α β γ γ

Case (d): α β γ δ

Table 2: OECD Oil Demand from 2010 to 2014 Unit: million barrels per day

year 2010 2011 2012 2013 2014 raw data 47.0 46.5 45.9 46.0 45.9 predicted data 47.0 46.4 46.1 45.9 a=0.00543, point error 0% 0.25% 0.51% 0.25% b=46.76 average error 0.34% Erroneous pr edicted data 46.5 49.5 32 32 a=0 point error 0% 7.84% 30.43% 30.28% b=45.9 average error 22.85% Correct predicted data 46.5 45.9 45.9 45.9 a=0 point error 0% 0% 0.22% 0% b=45.9 average error 0.07%

Source: Oil Market Report by International Energy Agency released by January, 2014 (http://omrpublic.iea.org/archiveresults.asp?formsection=full+issue) Expert Systems with Applications, 37 (8), 5640-5644

141 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Λ )0( b X (k + )1 = 1( − e a )( x )0( )1( − )e−ak Λ )0( a X (k + )1 = b.

Figure 1. The proposed flowchart for applying GM(1,1)

point errors are 0.25%, 0.51%, and the new data collected, the rolling mech- 0.25% (the first point is excluded) and anism is initiated. The oldest data is sub- the average error is 0.34%. That is to say stituted by the newest one. The new raw the modelling precision is 99.66%. The data become 46.5, 45.9, 46, and 45.9, forecasting result is satisfactory. Once respectively. The forecasting result is showed on the row 2 on the Table 2. The

142 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Λ point errors are 7.84%, 30.43%, and )0( a )0( − ak x (k + )1 = 1( − e )( x )1( − b )e , will 30.28% and the average error is 22.85%. a The modelling precision reduces drasti- result indeterminate form 0 ．(－∞) and cally from 99.66% (first case) to 77.15%. the new prediction value should be cal- The reason why the modelling precision Λ )0( culated by. lim x (k + )1 = b . In this is reduced is the negligence of prior a→ 0 check of raw data. Examining the raw research, the most common four raw data, the second is 45.9 and the fourth is data case is discussed by symbolic oper- 45.9 which are identical. Also the grey ation method. Through vigorous symbol- development coefficient is zero. There- ic manipulation, the research result fore, the traditional GM(1,1) is invalid. shows if ( α, β, γ, δ) holds the property The revised methodology is shown on that second and fourth figure are identi- figure 1 and the correct result is shown cal, i.e. β=δ. The grey development coef- on row 3 on the table 2. The point errors ficient a will equal to zero. And the new are 0%, 0.22%, and 0% and the average prediction value will be grey input b. error is 0.07%. The modelling precision Therefore, prior check of raw data per- is 99.93%. From this practical case, the mutation pattern should be performed to importance of prior check is shown. If avoid erroneous prediction result. the examination of raw data is omitted, the totally erroneous forecasting result might reach. Acknowledgements

Conclusion This work was supported by the Ministry of Science and Technology, Repub- Because of the high-accuracy lic of China, under grant project NO. forecasting ability with small data sets, MOST 104-2221-E-214-037. typically four observation data needed, the GM(1,1) grey prediction model has motivated numerous scholars to conduct References relevant researches, resulting in an increasing number of new discussions on Chen, C. I., Chen, H. L., & Chen, S. P. prediction, which has expanded the (2008). Forecasting of foreign depth and scope of the applications of exchange rates of Taiwan's major GM(1,1) grey prediction theory, espe- trading partners by novel nonlinear cially on the energy related issue based Grey Bernoulli model NGBM(1,1). on the literature review. But, grey pre- Communications in Nonlinear dictors should cautiously scrutinize the Science and Numerical Simulation, raw data pattern before conducting grey 13 (6), 1194-1204. modeling to prevent erroneous prediction because of absence of necessary and Chen, C. I., & Huang, S. J. (2013). The sufficient condition that grey develop- necessary and sufficient condition ment coefficient a cannot be zero. If a=0, for GM(1,1) grey prediction model. the prediction equation, , Applied Mathematics and Computation, 219 (11), 6152-6162.

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Deng, J. L. (1982). Control problems of Lin, Y. H., Chiu, C. C., Lee, P. C., & grey systems. Systems & Control Lin. Y. J. (2012). Applying fuzzy Letters, 1 (5), 288-294. grey modification model on inflow forecasting. Engineering Feng, S. J., Ma, Y. D., Song, Z. L., & Applications of Artificial Ying, J. (2012). Forecasting the Intelligence, 25 (4), 734-743. Energy Consumption of China by the Grey Prediction Model. Energy Liu, S. (2007). The Current Developing Sources Part B-Economics Planning Status on Grey System Theory. and Policy, 7 (4), 376-389. Journal of Grey System, 19 (2), 111- 123. Hsu, L. C., & Wang, C. H. (2007). Forecasting the output of integrated Lu, I. J., Lewis, C., & Lin, S. J. (2009). circuit industry using a grey model The forecast of motor vehicle, improved by the Bayesian analysis.” energy demand and CO2 emission Technological Forecasting and from Taiwan's road transportation Social Change, 74 (6), 843-853. sector. Energy Policy, 37 (8), 2952- 2961. Hsu, Y. T., Liu, M. C., Yeh, J., & Hung, H. F. (2009). Forecasting the turning Meng, M., Niu, D., & Shang, W. (2014). time of stock market based on A small-sample hybrid model for Markov-Fourier grey model, Expert forecasting energy-related CO2 Systems with Applications, 36 (4), emissions. Energy, 64 (0), 673-677. 8597-8603.

Kayacan, E., Ulutas, B., & Kaynak, O. Pao, H.-T., Fu, H.C., & Tseng, C. L. (2010). Grey system theory-based (2012). Forecasting of CO2 models in time series prediction. emissions, energy consumption and Expert Systems with Applications, economic growth in China using an 37 (2), 1784-1789. improved grey model. Energy, 40 (1), 400-409. Li, G. D., Yamaguchi, D., & Nagai, M. (2007). A GM(1,1) - Markov chain Stewart, J. (2003). Calculus Early combined model with an application Transcendental-International to predict the number of Chinese Student Edition (5 ed .): Brooks/Cole. international airlines. Technological Forecasting and Social Change, Tien, T. L. (2009). A new grey predic- 74 (8), 1465-1481. tion model FGM(1,1). Mathemati- cal and Computer Modelling, 49(7- Li, M., & Wen, Z. (2011). Research on 8), 1416-1426. Logistics Volume Forecast Based on Improved GM (1,1) Model. Energy Truong, D. Q., & Ahn, K. K. (2012). An Procedia, 13 , 8521-8526. accurate signal estimator using a novel smart adaptive grey model

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SAGM(1,1). Expert Systems with Applications, 39(9), 7611-7620.

Wang, Y. H., Dang, Y. G., Li, Y. Q., & Liu, S. F. (2010). An approach to increase prediction precision of GM(1,1) model based on optimization of the initial condition.

145 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

SUPER EFFICIENCY MODEL USING A CONSTANT AS “TOTAL WEIGHTED SUM OF INPUT” CONSTRAINT

Chiao-Ping Bao Nai-Chieh Wei Shiu-Fang Kang*

Department of Industrial Management, I-SHOU University, Taiwan (R.O.C) *Corresponding author: [email protected]

Abstract

Efficiency assessments often involved employing the CCR or BCC model to evaluate the efficiency scores, but multiple efficiency units frequently render discrimination indiscernible, and the Anderson & Peterson (AP SE) model was proposed to solve this problem; however, an infeasible solution often occurs in the AP SE model. The present study proposes an SE model with a constant total weighted sum of the input as a constraint to solve the infeasible solution. With one lemma and one theorem, the study proves that adding one constant as a constraint is crucial to solving the infeasibility problem.

Key Words: Data envelopment analysis, AP super efficiency, CCR model, Infeasibility, Discrimination power

Introduction first rewrote the efficiency assessment of fractional programming as an efficiency Data envelopment analysis (DEA) assessment model for linear program- is a nonparametric method requiring no ming. Regarding the efficiency rating prior knowledge of a production func- assessed by the CCR model, the most tion. It is a decision making unit (DMU) significant characteristic was that under that can be used to measure the relative identical conditions, the optimal weight efficiency of multi-input–multi-output of various efficiency measurements are variables of similar characteristics. generated according to the ratio of the Charnes, Cooper, and Rhodes (1978) weighted sum of the output to the weighted sum of the input of various,

146 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

from which the highest efficiency score solve the SE infeasibility problem on can be derived. However, multiple effi- paper, various scholars have proposed ciency units are often generated in this new SE models (Chen, 2005; Cook, method, rendering discrimination be- Liang, Zha, & Zhu, 2009; Khodabakhshi, tween efficient DMUs indiscernible. 2007; Tavassoli, Saen, & Faramarzi, 2014). In particular, Chen (2005) pro- Accordingly, Anderson and Peter- posed taking (1-α)/(1+ β) as the target son (1993) proposed the AP super effi- and incorporated some nonlinear equa- ciency (SE) model, which excludes the tions into the model; although this data set of a DMU from the assessment solved the infeasibility problem, due to model; the advantage is in not emphasiz- the inclusion of nonlinear equations, the ing specific characteristics, thus the calculation process became complex. method is more objective. However, Therefore, Cheng et al. (2011) and Bao because the data set is excluded from the et al. (2014) again proposed linear pro- assessment, many cases yield efficiency gramming models to solve the nonlinear scores of >1; hence, the method is AP model for the infeasibility problem named “super efficiency.” The method proposed by Chen (2005). has improved the discrimination of efficiency assessments and enables ranking Based on the aforementioned dis- of an originally efficient DMU (Ander- sertations, the present study proposes an son & Peterson, 1993; Chen, 2004; SE model with a constant total weighted Ebadi, 2012; Pan, Liu, Peng, & Wu, sum of the input as a constraint (CTWS 2011; Ray, 2008; Xue & Harker, 2002). SE) to solve the infeasibility shortcom- However, Thrall (1996) was first to re- ing of the AP SE model. The remainder port that infeasibility problems often of this paper is organized as follows. occur in the AP SE model under CCR Section 2 presents the CCR, BCC, and constant returns to scale (CRS). Zhu AP SE models. Section 3 introduces our (1996) and Cooper et al. (2001) have proposal and employs one lemma and shown that when there are data values of one theorem to explain its feasibility. “0” in a DMU, problems in ranking oc- The proposed model is applied to two cur in the SE model under CCR CRS. examples in Section 4, the results of Seiford and Zhu (1998) noted that the which show that the proposed model can assumption that the data are absolute comprehensively solve the infeasibility values proves that although CRS can be problem of the AP SE model. Finally, ranked, Banker, Chames and Cooper conclusion is drawn in Section 5. (1984) (BCC) variable returns to scale (VRS) cannot. Xue and Harker (2002) CCR, BCC, and AP SE Models explained that the infeasibility problem also occurs in the SE model under VRS, CCR Model rendering ranking impossible. Cheng, Qian, & Zervopoulos (2011) explained (a) Input-oriented original model that for SE in the CCR model, for, when any individual output, the AP SE model The CRS multi-input–multi-output also generates an infeasible solution. To efficiency assessment CCR model was

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n based on the efficiency measurement − concept (Charnes et al., 1978; Farrell, θxik − ∑λ j xij − si = 0 (2) 1957), as shown in Equation (1): j=1

， − + s λ j si , sr ≥ 0 Max. θk = ∑urk yrk r=1 r =1,..., s， i =1,..., m，j =1,..., n

s.t. ∑vik xik = 1 (1) θ unrestrain t i=1 BCC Model s m u y − v x ≤ ,0 j =1,..., n ∑ rj rj ∑ ij ij (a) Input-oriented original model r=1 i=1

u ,v ≥ ε r =1,..., s， i =1,..., m Banker et al. (1984) amended the rk ik CCR model, emphasizing the VRS BCC model. The input-oriented mathematical where model is expressed in Equation (3):

θk: relative efficiency rating of the kth DMU, k = 1, 2, …, n. s urk : weight produced by the rth item of Max. θ k = ∑urk yrk − u0 the kth DMU. r=1 νik : weight inputted by the ith item of the kth DMU. m s.t. ∑v x =1 yrk : rth input of the kth DMU. ik ik i=1 (3) xik : ith input of the kth DMU. yrj : rth output of the jth DMU. s m xij : ith input of the jth DMU. ∑urj yrj − ∑vij xij ≤ ,0 j =1,..., n ε: extremely small positive real number r=1 i=1 (generally ε = 10 -4 or ε = 10 -6). u ,v ≥ ε (b) Input-oriented dual model rk ik

u u is unrestrain t, r =1,.., s， i =1,.., m The input-oriented dual model is 0 shown in Equation (2): (b) Input-oriented dual mode s m + - Min. θ −ε( s + s ) s m k ∑r ∑ i + - r=1i = 1 Min. θk − ε (∑sr + ∑ si ) r =1i = 1 n + s.t. ∑ yrj λ j − sr = yrk m + j=1 ， s.t. ∑ λ j yrj − sr = yrk r = 1,..., s i=1

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m − ， θxik − ∑λ j xij − si = 0 i =1,..., m − + λ ,s ,s ≥ 0， j =1,..., n i=1 j i r

n (b) BCC AP SE model ∑λ j = 1 j=1 (4) The BCC AP SE model can be ob- n − + tained by adding the constraint ∑λ j = 1 λ , s , s ≥ 0， j = 1,..., n j i r j=1 to Equation (5). θ unrestra int

AP Super Efficiency Model SE Model with a Constant Total Weighted Sum of the Inputs as a Con- (a) CCR AP SE model straint (CTWS SE)

To solve the problem of multiple effi- The AP SE model can solve the cient DMUs in a CCR efficiency as- multiple efficient DMUs problem. How- sessment, Andersen and Peterson pro- ever, the infeasibility problem commonly occurs. Thus, this study employed the posed omitting efficient DMU k values weighted sum of the output of DMU k as from the efficiency frontier ( λk = 0 ) and the objective, the weighted sum of the using the remaining DMUs as a basis for a new frontier and calculating the dis- output of DMU k was not constrained to tance for the eliminated DMUs to reach not being greater than the input of the the new frontier [1]. Because the omitted weighted sum of the input, and the con- DMUs are not enveloped by an efficien- stant total weighted sum of the inputs as cy border, the derived efficiency score is a constraint in our proposed SE model, occasionally greater than 1; this method which is expressed in Equation (6): is called the AP SE mode, the mathematical model of which is expressed in Max. O k Equation (5): s s m + - s.t. ∑u r yrj = O j Min. θk −ε(∑sr + ∑si ) r=1 r=1i = 1 m m v x = I + ， ∑ i ij j s.t. ∑λj yrj − sr = yrk r =1,...,s (5) i=1 i=1 (6)

m O − I ≤ ,0 j =1,...... , n，j ≠ k − ， j j θxik − ∑λ j xij − si = 0 i =1,..., m i=1

λk = 0 149 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

n n

∑ I j = n Using ∑ I j = n of Equation (8), j=1 j=1 m ， n subtract ∑vi xij = I j j = 2,...... , n of i=1 where ∑ I j = n is the crucial design j=1 Equation (7) to obtain: constraint of the proposed model because it ensures a solution for Equation m (6). ∑vi xij = n − I 2 − I3 ,... ,−I n = I1 (10) i=1 Lemma 1. n The simultaneous equation solution n Because only ∑ I j = n is related to the j=1 ∑ I j = n in Equations (10) and (8) is input variable of the various DMU val- j=1 j identical to that of the n + 1 simultane- ues, the following discussion analyzes ous equations derived from Equations (7) only the weight vi of the various input and (8) of Lemma 1. Q.E.D. variables. If vi has a solution, then Equation (6) has a solution. Theorem 1. In Lemma 1, all ， vi i =1,..., m have a solution. After a m solution is obtained for all v，i =1,..., m , v x = I，j =1,...... , n i ∑ i ij j the efficiency score of each DMU can be i=1 (7) determined.

∑ I j = n Proof: j=1 (8) Assuming there are n DMUs, each

DMU has m variables. This theorem is Equation (7) and (8) together have divided into the following levels and n + 1simultaneous equations. This lem- discussed separately as follows: ma proves that these simultaneous and those of Equation (8) and (9) have the same solution. (a) If m = 1, then

m x11 v1 = I1 (11.1) ∑vi xij = I1 i=1 (9) x21 v1 = I 2 (11.2)

Proof: xn v = I n (11. n) 1 1

The proof of this lemma is simple: I1 + I2 + ... + I n = n (11. n+1)

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Then, (11.1)+(11.2)+…+(11. n) = x (ii) 11 = ( x + x + ... + x ) v = n 11 21 n1 1 x11 + x21 + ... + xn1 x 12 ， n = p1 Thus, v = , has a x21 + x22 + ... + xn2 1 x + x + ... + x 11 21 n1 I 1 ，， solution. then = p1 thus I1 = n× p1 n

similarly I = n× p …， I = n × p 。 (b) If m = 2 , then 2 2 n n

n = I1 + I 2 +.... + I n = ( p1 + p2 +... + pn )× n x11 v1 + x12 v2 = I1 (12.1)

Thus, if p1 + p2 + ... + pn = 1 x21v1 + x22v2 = I2 (12.2)

then v , v can be solved (for a de- xn1v1 + xn2v2 = In (12. n) 1 2 tailed explanation , please see the expla- I + I + ... + I = n (12. n+1) nation for if m > 2 ) 1 2 n

(iii) If m > 2 , then the expansion of Then, (12.1) + (12.2) +... + (12. n) n

= ∑ I j = n in Equation (12. n+1) should be j=1 ( x11 + x21 + ... + xn1 ) v1 +(

x + x + ... + x ) v = n (13) 12 22 n2 2 x v + ... + x v = n or j1 1 jm m n n n Let (13) - [(12.2) + ... + (12.n) ] be (∑ x j1 )v1 + (∑ x j2 )v2 + ... + (∑ x jn )vm = n Equation (12.1), then (12.2), …, (12. n) j=1 j=1 j=1 of Equations (12.1) to (12. n+1) are “re- (14) dundant” equations. Hence, only simultaneous equations of (12.1) and (12. n+1) The expansion for Equation (12.1) needs to be solved. When solving the can be rewritten as two equations, the following two situa-

tions might occur: x11 v1 + x12 v2 + ... + x1mvm = I1 (15)

x (i) 11 ≠ In Equations (14) and (15), the var- x11 + x21 + ... + xn1 iables v1.v2 .... vm indicate that the rela- x tionship between the coefficients of any 12 ，then it is known two random variables v , v can only x21 + x22 + ... + xn2 r k have the following two situations: that v1 , v2 can be solved.

Let (1) If the coefficient ratio of any two random variables vr , vk are unequal,

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x x Case Description 1r 1k , and r ≠ k , then ≠ ∑x ji ∑x jk The following examples demon- v，i = 1,..., m has a solution. i strate the application of the CCR SE and BCC SE models. (2) The coefficient ratio of any two variables vr , vk are identical and Example 1: x x 1r = 1k = p，r, k =1,..., m , ∑ xji ∑ x jk To explain the application of Equa- tion (6), we illustrate the case study of then identical to m = 2 in (b), can CRS CCR from (Khodabakhshi, 2007). I I I In this example, there are nine DMUs, 1 2，， m let p1 = , p2 = ... pm = , each of which has two input variables n n n and two output variables y . With the then given data set substituted into Equation I +I +...+I =p×n+p ×n+...+p ×n=(p+p +...+p )×n=n (6), the efficiency score of the proposed 1 2 m 1 2 m 1 2 m model can be obtained. The last three columns of Table 1 shows the results: thusp1 + p2 + ... + pm = 1 In the original paper by Khoda-

Because n is given, all pi values bakhshi (2007), the example was adopt- can be obtained. Herein, Equations (14) ed to test the CCR SE model; therefore, and (15) have been combined into one we can directly apply Theorem 1. For example, Equation (16) shows DMU equation; thus, if each input variable xi 4 and the total input variable for all DMUs integrated into the proposed model: exhibit a proportional relationship, then ， max = O4 ; each variable vi i = 1,..., m has a solution.

Lemma 1 and Theorem 1 are main- 3∗u1 +1*u2 = O1 ; ly directed at the SE model with a constant total weighted sum of the input as a 1. 5∗ u1 + 3*u2 = O2 ; constraint of CRS (i.e., the CCR model). If the problem is an SE assessment of 2.5 ∗u1 + 5.5 *u2 = O3 ; VRS (i.e., the BCC model), then by simply incorporating the dummy output 4∗u +1*u = O ; variable ( y = 1）j＝1,..., n））into each 1 2 4 s+ ,1 j o j in Equation (6) and the note 3∗ u1 + 5.5 *u2 = O5 ;

“@free( us+1 )” into the constraints in the model, the VRS SE model can be dis- 4.8 ∗ u1 + 4 *u2 = O6 ; (16) played as the CRS SE model.

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Table 1. Scores for the AP SE and CTWS SE Model for the Case Study on Khodabakhshi (2007)

Output AP SE CTWS CTWS CTWS DMU Input x1 Input x2 Output y2 model SE model SE model SE model y1 [13] (n=9) (n=15) (n=20)

1 1.5 2 3 1 0.84375 0.87437 0.87437 0.87437

2 2 1 1.5 3 0.9375 0.7200 0.7200 0.7200

3 1.2 1.5 2.5 5.5 2 1.5560 1.5560 1.5560

4 3 0 4 1 Infeasible 1.3072 1.3072 1.3072

5 0.5 3 3 5.5 Infeasible 0.5756 0.5756 0.5756

6 2 3 4.8 4 1.825 0.9600 0.9600 0.9600

7 3 2.5 3.5 3 0.5892 0.5887 0.5887 0.5887

8 3 4 4 4 0.5806 0.5548 0.5548 0.5548

9 4 1 5 5 Infeasible 0.8599 0.8599 0.8599

3.5 ∗u1 + 3*u2 = O7 3∗v1 + 5.2 *v2 = I 7 ;

4 ∗ u1 + 4 *u2 = O8 3∗v1 + 4*v2 = I8 ;

5∗u1 + 5*u2 = O9 4∗v1 +1*v2 = I 9 ;

1.5 ∗ v1 + 2* v2 = I1 ; O1 − I1 ≤ 0

2∗v1 +1*v2 = I 2 ; O2 − I 2 ≤ 0 ;

1.2 ∗ v1 + 5.1 * v2 = I3 ; O3 − I 3 ≤ 0 ;

3∗v1 + 0*v2 = I 4 ; O5 − I 5 ≤ 0 ;

0.5 ∗v1 + 3*v2 = I 5 ; O6 − I 6 ≤ 0 ;

2∗v1 + 3*v2 = I 6 ; O7 − I 7 ≤ 0 ;

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O8 − I8 ≤ 0 ; For instance, Equation (17) shows DMU 4 integrated the proposed model:

O9 − I9 ≤ 0 ; max = O4 ;

I1 + I 2 + I3 + I 4 + I5 + I 6 + I 7 + I8 + I9 = 9 u u O 2 ∗ 1 + 2 = 1 ;

Thus, O4 = 0.9687 , I1 = 0.7410 , 5∗u + u = O ; O 0.9687 1 2 2 and 4 = = 1.3072 . I 0.7410 4 9∗u + u = O ; 1 2 3 Table 1. shows the results of applying the AP SE model in the original pro- 11 ∗u1 + u2 = O4 ; posal. The results indicate that three

DMUs is infeasible. After an assessment 9∗u1 + u2 = O5 ; of the proposed model, these DMUs yielded a rational efficiency score. Sub- 2 ∗ u + u = O ; (17) sequently, we applied three constants 1 2 6

(n = 9, n = 15, and n = 20) to obtain the 2∗v = I ; efficiency scores of all DMUs. The re- 1 1 sults were identical; thus, the last three n 3∗v = I ; columns of can be any posi- 1 2 ∑ I j = n j =1

tive number larger than n, and the results 5∗v1 = I 3 ; of the efficiency assessment remain the same. 7 ∗ v1 = I 4 ;

Example 2: 7 ∗ v = I ; 1 5

To explain the application of Equa- tion (6), we present the case study of 3∗v1 = I 6 ; VRS (BCC) from Xue and Harker

(2002). The example contains six DMUs, O1 − I1 ≤ 0 each of which was one input variable x and one output variable . When the y O2 − I 2 ≤ 0 ; data set in Table 2. is substituted into Equation (6), the SE score of the pro- O3 − I 3 ≤ 0 ; posed model can be obtained. The last

three columns of Table 2 shows the re- O − I ≤ 0 ; sults. 5 5

O6 − I 6 ≤ 0 ;

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Table 2. Scores for the AP SE and CTWS SE model for case study on Xue and Harker (2002)

Input Output AP SE (Xue & CTWS SE score CTWS SE CTWS SE score DMU x y Harker, 2002) (n=6) score ( n=9) (n=12)

1 2 2 1.5 1.4999 1.4999 1.4999 2 3 5 1.095 1.0952 1.0952 1.0952 3 5 9 1.133 1.1333 1.1333 1.1333 4 7 11 Infeasible 0.9183 0.9183 0.9183 5 7 9 0.714 0.7142 0.7142 0.7142 6 3 2 0.667 0.6667 0.6667 0.6667

I1 + I 2 + I 3 + I 4 + I 5 + I 6 = 6; cal; the value of n needs only be greater than the total number of DMUs. Thus, @free( u ); this example also proves that the pro- 2 posed model is robust.

Thus obtain O 1.428571 , 4 = Conclusions I1 = 1.555556 , and O 1.428571 Although applying the AP SE mod- 4 = = 0.9183 . I 1.555556 el in DEA in CCR and BCC efficiency 4 assessments can remedy the problem of

indiscernible discrimination of efficien- Because this is a VRS (BCC) prob- cy assessments, the infeasibility problem lem, adding a dummy output variable often occurs during the evaluation. Many （y ＝1） to each o , and “@free( u )” ,2 j j 2 scholars have proposed solutions to the to the constraint, this example applies infeasibility problem from various per- Theorem 1 when implementing the pro- spectives. posed model to obtain the efficiency The present study employed the scores of the each of the other DMUj , as weighted sum of the output O of the shown in the last three columns of Table k extreme DMU as the objective; subse- 2. In the table, the result for DMU 4 in k the original paper is infeasible. After an quently, this value was not constrained assessment using the proposed model, an to not being greater than the weighted

efficiency score of 0.9183 was obtained. sum of the inputs Ik and the constant In our example, regarding the assessed total weighted sum of the input con- efficiency score of the total weighted n

sum of the input constraint, where n = 6, straint ∑ I j = n . To ensure the n = 9, and n = 12, the results are identi j=1

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feasibility of the proposed model, we proposed one lemma and one theorem to ex- The following conclusions can be plain its theoretical basis. Additionally, we drawn from Theorem 1: applied the proposed model in two examples, the results of which prove that the (a) If Equation (6) is rewritten as a proposed model comprehensively solves dual model, it has the same effect as the infeasibility problem. Furthermore, λk = 0 in the general AP SE model; Equa- according to our initial study, the right- n tion (6) lacks only the constraint Ik = 1. In hand side of is n, which can be ∑ I j = n the traditional AP model, because of the j =1 n absence of the constraint, the set to any positive number, and as long as ∑ I j = n it is greater than the total number of j =1 DMUs, it does not affect the efficiency number of equations may be greater than score assessment results. the number of variables, causing infeasibility in some AP SE models. Theorem 1 mainly targets the appli- n cation of the CCR model. However, if (b) If the constraint is add- ∑ I j = n there is an SE problem with the BCC j =1 model, then simply incorporating a dum- ed to the dual model of the AP SE model, my output variable and letting the weight then a solution can be found for all DMUs. of this variable be free sign (@free), the BCC model problem can be smoothly evaluated using the CCR AP SE model.

References model. American Journal of Applied Sciences, 11(4), 601. Andersen, P., Petersen, N. C. (1993). A procedure for ranking efficient units Boussofiane, A., Dyson, R. G., in data envelopment analysis. Man- &Thanassoulis, E. (1991). Applied agement Science, 39(10), 1261-1265. data envelopment analysis. European Journal of Operational Research, Banker, R. D., Charnes, A., & Cooper, 52(1), 1-15. W. W. (1984). Some models for estimating technical and scale ineffi- Charnes, A., Cooper, W. W., & Rhodes, ciencies in data envelopment analysis. E. (1978). Measuring the efficiency Management science, 30(9), 1078- of decision making units European 1092. journal of Operational Research, 2(6), 429-444. Bao, C. P., Jeng, C. H., Guey, C. C., & Lin, C. L. (2014). The liner pro- Chen, Y. (2004). Ranking efficient units gramming approach on AP supper- in DEA. Omega, 32(3), 213-219. efficiency data envelopment analysis model of infeasibility of solving Chen, Y. (2005). Measuring super- efficiency in DEA in the presence of

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infeasibility. European Journal of efficiency. African Journal of Busi- Operational Research, 161(2), 545- ness Management, 5(12), 4746-4754. 551. Ray, S. C. (2008). The directional dis- Cheng, G., Qian, Z., & Zervopoulos, P. tance function and measurement of (2011). Overcoming the infeasibility super-efficiency: An application to of super-efficiency DEA model: a airlines data. Journal of the Opera- model with generalized orientation. tional Research Society, 59(6), 788- Munich Personal Repec Archive, 797. (31991), 1-16. Seiford, L. M., & Zhu, J. (1998). Stabil- Cooper, W. W., Deng, H., Gu, B., Li, S., ity regions for maintaining efficiency & Thrall, R. M. (2001). Using DEA in data envelopment analysis. Euro- to improve the management of con- pean Journal of Operational Research, gestion in Chinese industries (1981– 108(1), 127-139. 1997). Socio-Economic Planning Sciences, 35(4), 227-242. Tavassoli, M., Saen, R. F., & Faramarzi, G. R. (2014). A new super-efficiency Cook, W. D., Liang, L., Zha, Y., & Zhu, model in the presence of both zero J. (2009). A modified super- data and undesirable outputs. Scientia efficiency DEA model for infeasibil- Iranica. Transaction E Industrial En- ity. Journal of the Operational Re- gineering, 21(6), 2360. search Society, 60(2), 276-281. Thrall, R. M. (1996). Duality, classifica- Ebadi, S. (2012). Using a super efficien- tion and slacks in DEA. Annals of cy model for ranking units in DEA. Operations Research, 66(2), 109-138. Applied Mathematical Sciences, 6(41), 2043-2048. Xue, M., & Harker, P. T. (2002). Note: Ranking DMUs with infeasible su- Farrell, M. J. (1957). The measurement per-efficiency DEA models. Man- of productive efficiency. Journal of agement Science, 48(5), 705-710. the Royal Statistical Society, Series A, 120(3), 253-281. Zhu, J. (1996). Robustness of the efficient DMUs in data envelopment Khodabakhshi, M. (2007). A super- analysis. European Journal of Opera- efficiency model based on improved tional Research, 90(3), 451-460. outputs in data envelopment analysis. Applied Mathematics and Computa- tion, 184(2), 695-703.

Pan, S. C., Liu, S. Y., Peng, C. J., & Wu, P. C. (2011). Local government efficiency evaluation: Consideration of undesirable outputs and super-

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INTEGRATING SERVICE SCIENCE AND INFORMATION SYSTEM TECHNOLOGY: A CASE STUDY

Yen Hsu Department of Industrial Design Tatung University, Taiwan, R.O.C. [email protected]

Abstract

Through providing sufficient information, gaps between transaction parties caused by information asymmetry can be filled. This study examined literature data and applied a case study method to integrate service science and information system technologies to develop a series of service design tools, which were subsequently used to create an innovative information service (IIS) system. The case study examined the information system used by a real estate company for the display and sale of houses. The service design tools were used to facilitate communication between a design team and a real estate company. Hihouse, a house display and sale service system used by a real estate company, was employed as an example to demonstrate practical applications. The IIS service design tool set comprised numerous components, which are listed as follows: a) an innovative information service blueprint, a design blueprint that demonstrated IT application in the IIS system; b) a service touch list, which showed the use of IT in a system to design and plan service encounters; and c) service exchange script, which illustrated the process in which service information was exchanged between front-stage interaction interfaces, back-stage interaction services, and support processes in the IIS system.

Key Words: Service design, Service innovation, Innovative information service (IIS)

Introduction cal service innovation as well as opti- mise existing services (Grissemann et al. Continued service innovation is the 2013; Harrington and Ottenbacher 2013) only viable method for maintaining ser- and is thus regarded as one of the driving vice quality (Ottenbacher 2007). Tech- forces of service innovation. An example nological innovation can facilitate radi of continued service innovation is the

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information technology (IT) industry Wit and van der Klaauw 2013; Chiappo- (McLennan 2004; Den Hertog et al. ri and Salanié 2013; Li 2014). 2010; Tsaih et al. 2012). The rapid development of IT has led to numerous Much related research on systemat- innovative creations, enabling highly ic approaches to developing new ser- efficient interactions between people, vices has been conducted in the field of organisations, information systems (ISs), service science (Trkman 2010; Cramer communication systems, and heteroge- and Hipp 2012). For example, Johnson neous devices, leading to service innova- et al. (2000) proposed the new service tion breakthroughs and making service development (NSD) theory, which di- procedures more accessible to customers, vides service development into four optimising existent services (Hanseth et stages: design, analysis, development, al. 2012; Grisot et al. 2014). and full launch. The design stage involves formulating new service objec- Specialised goods or services or tives and strategies, generating and goods with product features that are dif- screening ideas, and developing and ficult to understand reduce the purchase testing service concepts. The analysis intention of customers because of infor- stage entails business analyses and pro- mation asymmetry. Information asym- ject authorisation. The development metry means that information is known stage involves service designs and test- by only one party of a transaction and ing, process and system designs and test- not the other (Kelly and Ljungqvist ing, personnel training, service testing 2012). In a market environment, this and pilot runs, and test marketing. The indicates that one party of the transaction full launch stage entails full-scale possesses complete transaction-related launches and post-launch reviews information, whereas the other party (Zomerdijk and Voss 2011). lacks this information. In other words, information asymmetry occurs when two For real estate companies, the con- parties of a transaction have varying cept of service design primarily involves degrees of product knowledge (Chiappo- devising strategic plans and novel ideas ri and Salanie 2000; Berger et al. 2011). to manage service operations according For example, for real estate companies, to the unique features of the companies consumer purchase intention may be and their operational objectives (Hamil- reduced as a result of not knowing the ton and Selen 2004; Steen et al. 2011). construction quality of houses, quality of However, development of novel IS ser- after-sales services, bank assessments of vices remains lacking in the NSD pro- the houses, taxes, adjacent environment, cess. During the early stages of innova- and traffic conditions. Through provid- tive information service (IIS) developing informatised services during the dis- ment, real estate companies must con- play and sale of a house, consumers at- sider aspects such as the design of ser- tain more adequate information, which vice systems employed by customers closes the information gap between them and the innovative application of IT and sellers, enhances service quality, and (Linden et al. 2010). To investigate the creates a favourable company image (de demands of users and their service expe-

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rience, the American design company, service process. For the real estate com- IDEO, integrated the different view- pany examined in this study, IIS embod- points held by experts of various disci- ied two additional meanings, namely plines by using a service experience “the provision of unprecedented infor- blueprint and scenario-oriented design mation and communication technology” (Brown 2009; Martin 2009; Zomerdijk and “information use for developing an and Voss 2010; Tingvall and Karpaty innovative service delivery system for 2011). existing services” (Glushko 2010; Fitz- simmons and Fitzsimmons 2013). The aforementioned NSD-related theories show that prior to planning ser- However, during the process of de- vice designs, real estate companies signing the IIS system and discussing should first propose innovative service relevant literature, this study determined philosophies and strategies as a starting deficiencies in current theories and tools; point of service design development that is, a service design tool that enables (Sawhney 2011). During the design communication between design teams as stage, these companies should engage in well as real estate companies and that decision-making and invest resources for incorporates the concept of service sci- design and development of concepts ence as well as the features of ISs re- with potential. During the analysis stage, mains missing. However, the service the companies should analyse the com- design tools are thus more technology- mercial values and market potential of oriented and complex, which frequently these concepts. During the development hinders communication between design stage, the companies should review the teams and vendors or senior managers. newly proposed concepts and ideas and perform feasibility tests on those that The objective of this study was to possess success potential. During the introduce a service design tool that could development stage, the companies be used to develop an IIS system to ena- should select appropriate service systems ble design teams to communicate, dis- for the respective services and products cuss, and provide descriptions to vendors and perform field tests and result verifi- regarding the topics of developing a ser- cations. During the final full launch vice interface for customers and devel- stage, the companies should release the oping an innovative IT system. The ser- new services that have been thoroughly vice design tool had the following func- tested (Fitzsimmons and Fitzsimmons tions: (a) it could be integrated into the 2013). development cycle of the new services and contribute to effective IIS develop- The present study investigated ment and deployment; (b) it described companies’ use of IT to provide new the service philosophy and design logic online real-time interactive services and in a clear and concise manner, which how companies authorise IT to custom- included all operations and decision- ers and users (i.e., “IT empowerment”) making-related content during service to enable them to assume new, inde- procedures, interactions among associat- pendent, and active roles during the self- ed individuals, and order of services

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provided; (c) it provided a complete de- value-net (Hallikas et al. 2008; Allee scription of the IT design to be used and 2009) methods. According to the objec- systematically discussed how to develop tive of the service system and analyses service encounters within the system as of the demands of stakeholders, system well as the innovative applications of the engineers perform back-chaining and IT; and (d) it reviewed whether the IIS dependency analyses to create cross- design tool could effectively and effi- function, cross-department, and cross- ciently design, develop, and launch region service systems to help related house display and sales services by using parties connect. However, the stakehold- the Hihouse case as example. er-network-based design method focuses on the connections among related parties Research Frameworks and (or stakeholders), such as business part- Literature Review ners and corporate customers, whereas individual customer-related concerns are Design methods of service science often disregarded.

The methods applied for service Ecology-based design methods science and ISs can be divided into three state that the ecology of service systems types according to structure and scope of encompasses all of the “items/entities” the service design, namely process-, involved with the service system, such stakeholder-network-, and ecology- as resources, the actual service system, based methods (Maglio et al. 2009; stakeholders, government mechanisms, Spohrer and Maglio 2010; Salvendy and and service system network. However, Karwowski 2010; Maglio and Spohrer current ecology-based design methods 2013). are immature and under development (Spohrer and Maglio 2010; Spohrer et al. Among process-based service de- 2014). sign methods, the service blueprint method is the most representative (Shos- Design methods for information tack 1984; Bitner et al. 2008; Patrício et systems al. 2008). Although the service blueprint method is an excellent tool that enables The system development life cycle service design planning, performance (SDLC) method is the most commonly management, and internal and external used service design method for ISs. The communication, it regards technology as SDLC can be applied to describe and a mere supporting element of service define system development procedures design and thus cannot systematically and provide developers with a systemat- investigate the innovative IT applied in ic procedure that helps them successfully service designs. develop software and services demanded by users (Nurmuliani et al. 2004). The The stakeholder-network-based SDLC features four stages: planning, service design method includes the net- analysis, design, and implementation. work mapping (Svendsen and Laberge The tasks for each stage of development 2007; Spohrer and Maglio 2010) and must be independently completed prior

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to progressing to the next stage. Because that was suitable for promoting the brand this method requires that stages be com- image of the case company. By examin- pleted individually, it ensures favourable ing their service strategies, concepts and system quality (Boehm 1988). As the guidelines, design of the interface and system development demands and de- service delivery systems for users, and velopment methods evolve, the SDLC information and communication tech- method is currently used for various nologies, the services offered by Hi- system development models. These house were induced: an online marketing models include the waterfall, (Nur- and interactive platform, video-stream muliani et al. 2004; Kazman and Chen multicasting, video-on-demand, and in- 2009), rapid prototype (Zhang et al. formation retrieval. These services pro- 2013), spiral (Boehm 1988; Ruparelia vided users with a superior browsing 2010), and incremental models (Rupare- experience because the videos were aes- lia 2010). thetically pleasing, rich in culture, intellectual, and creative. Hihouse was re- This discussion on service-science quired to deliver a high-quality brand and IS-related literature revealed the image for the case company and to deficiencies of current service design maintain high-quality video broadcasting methods demonstrated that adjustments stability and video continuity. Moreover, must be made to develop a service de- the system was required to manage high sign development tool for IISs to meet peak demand from multiple areas. In the customer demands, be incorporated into back-end server, cloud-related technolo- business strategies, and provide detailed gy, peer-to-peer networking technology, and complete information system anal- and multi-task and distributed systems yses. were applied. To enable users to enjoy views of houses and experience aesthetic Hihouse service system pleasure, culture, smart technology, and innovation in this browsing experience, a The objective of the Hihouse ser- metaphoric graphical user interface was vice was to provide house display and used to create an impression that embod- sale services. The vision set by the ser- ied contemporary culture and classic vice provider was to “improve the living elegance. The architectural concept of environment and create new values in the Hihouse service system is shown in life.” The strategies adopted by the ser- Figure 1. vice provider was an interactive video channel in which videos themed on Figure 1. indicates that the Hihouse houses and residential architecture con- service system featured numerous ser- cepts were uploaded online to increase vices, subsystems, and platforms. To consumers’ attention to residential quali- design and communicate on these sub- ty of living. To the real estate company systems, platforms, and diverse and examined in this study (hereafter re- complex services required a service de- ferred to as “the case company”), Hi- sign tool that could enable design teams house was a customer-oriented innova- and vendors to discuss service philoso- tive service featuring a service quality phies and design logic in a clear and

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concise manner. These philosophies and vices. Moreover, the IISB enabled the design logic included all operations and case company to analyse potential fail- decision-making-related content during ure points and identify opportunities to the service procedure, interactions create favourable impressions on users, among associated individuals, and order improving the problem-solving and crea- of service. The required tool had to tive thinking abilities of the case compa- comprehensively describe the design for ny. Figure 2 illustrates a segment of the IT application, systematically discuss the architectural diagram of the Hihouse service encounter to be provided by the service that applied IISB to design its service system, and disclose the innova- communication. The IISB enabled the tive application of IT. creation of a flow chart that showed every application of IT by the service delivery system. The IISB, similar to the general service blueprint method, enables IT design-related communication between design teams and vendors.

Products History, Mj User Interaction, Mj Hihouse Homepage, Mj Mj Case News, Search, Mj Products Quality, Mj Architectural Mj Corporate Philosophy, Mj Product Videos, Mj Engineering News, Mj Information Mj Welcome Flash, Mj Graphic & Toolbar... Mj Service Point, Mj Physical Evidence Mj Other Features Menu... Mj Topic Icon... Mj Related Enterprises... Mj

S1 Mj

Click to Enter Mj Click to Enter Mj Click to Enter Mj History, Mj Products Quality, Mj Click to Enter Mj User Interaction, Mj News, Search, Mj Engineering News, Mj Attendee Actions Mj Hihouse Flash Mj & Mj Architectural Knowledge Mj Videos, Mj Service Point, Mj Graphic Icon... Mj Other Features Menu... Mj Graphic & Toolbar... Mj Related Enterprises... Mj Line of Interaction Mj

Show Products History, Mj Show Hihouse Mj Mj Show User Interaction, Mj Show Case News, Mj Show Products Quality, Mj Front-Stage Mj Picture & Graphic, Mj Show Engineering News, Mj Show Architectural Mj Figure 1. The Hihouse service system Search Result, Mj Show Corporate Video, Mj Knowledge, & Other Mj Interactions Interface Mj Show Product Videos, & Mj Show Service Point, & Mj Show Welcome Flash... Mj Features Menu... Mj employed by the case company Graphic & Toolbar... Mj Related Enterprises... Mj Line of Visibility Mj C2 Mj

(partial image) Products Quality, Mj User Interaction, Mj Text, Graphic, Video, Mj Products History, Mj Engineering News, Mj Back-Stage Mj Architectural Knowledge Mj Audio, Flash, Music Mj Case News, Search, Mj Service Point, Mj Other Features Menu Mj Interactions Service Mj Streaming Control and Mj Product Movies Mj Related Enterprises Mj Streaming Control and Mj Management Mj Streaming Control and Mj Streaming Control and Mj Management Mj Management Mj Management Mj

Line of Internal Mj Interaction Mj

Upload & Management Mj Upload & Management Mj Upload & Management Mj Upload & Management Mj Products Quality, Mj Innovative information blueprint Text, Graphic, Video, Mj Products History, Mj User Interaction, Mj Engineering News, Mj Support Processes Mj Audio, Flash, Music Mj Case News, Search, Mj Architectural Knowledge Mj Service Point, Mj Streaming Mj Product Movies... Mj Other Features Menu... Mj Related Enterprises... Mj To comprehensively illustrate the application of IT by the Hihouse service Figure 2. The use of IISB by Hihouse using graphics, this study applied the to design communication (partial service blueprint method to modify the image) IIS blueprint (IISB) method. The IISB was incorporated into the NSD cycle and Physical evidence: The top of the assisted the design team in clearly and diagram shows physical evidence that concisely displaying the application of users were expected to see, such as over- IT by the service system. In addition, the all style, business philosophy, welcome IISB enabled the case company to re- videos, product description, architectural view and determine whether its service knowledge, search, user interaction, and strategies, service concepts, philosophies, other function menus. The IISB facilitat- and guidelines were properly executed ed communication between the design prior to making final decisions regarding team and the case company. To assess the information and communication ser- the effectiveness of the IISB, the follow-

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ing questions were asked: “Did the sys- tory?”; “Was the system music quality tem style match the image of the case satisfactory?”; and “Was the system con- company?”… tent quality satisfactory?”

Audience action: Users operated Line of visibility: Line of visibility and interacted with the service system. denoted users’ level of involvement dur- Audience action signified the operations ing the service delivery process. Items and selections made by users as well as above the line of visibility were things actions that they performed when view- that users were able to see, namely items ing videos and making service assess- displayed on the front-stage interaction ments. The IISB facilitated communica- interface such as the service interface, tion between the design team and the images, videos, and various types of case company. To improve and assess function menus. Items below the line of the effectiveness of the IISB, the follow- visibility were things that users were ing questions were asked: “Should the unable to see, namely items displayed on background music play continuously?”; the back-stage interaction service such “What type of sensory feedback should as text, videos, and audio, as well as the system provide users to maintain commands messages generated by audi- consistency of system operation?”… ence action.

Line of interaction: Line of interac- Back-stage interaction service: tion was below audience actions, which Back-stage interaction service performed denoted the operations and selections commands and messages generated by made by users, services that they experi- audience action and provided appropri- enced, and actions that they performed ate response screens, videos, and music when making service assessments. Be- requested by users. The IISB facilitated low the line of interaction, content and communication between the design team item information between users and the and the case company, considered vari- service system during direct service en- ous possible user behaviours, and ena- counters were featured. bled stable system operations. Questions that were asked included “How can ser- Front-stage interaction interface: vices be deployed to achieve optimal The front-stage interaction interface dis- service efficiency and reduce the proba- played video information that could be bility of service delays?”; “How can perceived by users, such as the service services be deployed to facilitate the system interface, video information, most secure system backup?”… searchable information, message fields, and interactive animations. The IISB Line of internal interaction: The facilitated communication between the line of internal interaction and the sup- design team and the case company. To port processes below it enabled the de- assess the effectiveness of the IISB, the sign team to determine whether the in- following questions were asked: “Was formation system was properly planned the system image quality satisfactory?”; by the management of the case company “Was the system video quality satisfac- to effectively support the back-stage

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interaction services. The Hihouse sup- Table 2. Service touch list for S1 port procedure involved using a man- (partial list) agement system for uploading images, text, and videos as well as updating ad- User No. Encounter Art work vertisements. These support procedures Name experience S1 interaction design were not seen by users but were essential design for the stable provision of services. Start: Show Follow up products enterprise Product history, image, history Service touch list Action: product icon & Product Play style, user toolbar S11 History history experience, graphic, The objective of developing the video and Animation, service touch list (STL) was to enable End: Back homepage file item to product & graphic check list users to easily understand the service history aesthetics procedures during the service process interface and to facilitate sufficient communica- Start: Case news icon tion between the designers and the case Action: Follow up company to meet service philosophies Play flash, enterprise Case news Election image, icon & and guidelines. The STL proposed in Case End: texts style, toolbar S12 this study comprised the following in- News Show user expe- graphic, news rience, and file item formation: number, name, encounter content, web aes- check list interaction, user experience design, and Back to thetics case news art work design. All service functions interface that users may encounter were listed and Start: Show subsequently verified, as shown in Table products Follow up Product video enterprise 2. video icon Action: image, & toolbar Product Play frame S13 graphic, Video product style, user The product history (S1) from Fig- Animation, video experience, file item ure 2. is used as an example. Table 2 End: Back and web check list presents the names of all the services to product aesthetics video provided by S1 as well as user experi- interface ences beginning from the start of encounter interaction to the operations per- designs as well as the art graphics, imag- formed during the encounter interaction es, animations, and background images and then to the end of encounter interac- of each encounter interaction to facilitate tion. For S11, the system displayed the subsequent revisions, updates, and re- menu select screen “Start: Show product view. Therefore, the STL became a tool history” at the start of the service before for the case company to communicate proceeding to “Action: Play history vid- with systems analysts and programmers eo.” At the end of the video, users were of the design team. For the case compa- returned to the menu select screen “End: ny, which considered the innovative Back to product history interface.” In services that external users and custom- addition, the STL recorded the names of ers required from the perspective of the electronic files containing the art these external users and customers, the IT services were highly convenient and

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could be used by users and customers at script (SES), the systems analysts and any time, meeting their demands. In ad- programmers could start from the IISB dition, the STL can be used at expert and trace operations performed by all user conferences, at which ideas ex- users and external customers that trig- pressed by external user and customer gered the front-stage interaction inter- representatives can be incorporated in face, back-stage interaction service, and discussions to facilitate integrating opin- support processes. ions in the design stage. In addition, the STL can adopt an open approach in In addition, the SES was used to which all members of the design team describe the designs of the operational can edit and revise the STL, enabling procedures of the front-stage interaction them to confirm each other’s ideas. interface and back-stage interaction service. Subsequently, the SES and IISB The STL considered the perspec- were employed to draw the STL and tives of external customers during the front- and back-stage operating proce- initial stage of service design and incor- dures, which enabled the case company porated the concept of NSD life cycle, to learn whether the service interfaces enabling conceptual guidelines and ser- were operating smoothly and how to vice features to be transformed into ac- appropriately deploy the ISs, and to con- tual interfaces and functional designs, duct information exchanges between which improved the case company’s servers. Designers were reminded to level of acceptance of the design format. incorporate service concepts, philoso- The STL featured a concise and easy-to- phies, and guidelines into each back- read format in which external users and stage operating procedure. The SES de- customers could add their opinions. sign described the process and structure These opinions were subsequently used of the related algorithms by using multi- as a communication reference for the ple natural languages, which enabled case company, systems analysts, and programmers skilled at different pro- programmers. gramming languages to become aware of the functions that each program block Service exchange script possessed during the operating procedure. In the IISB, operations performed by each external user and customer trig- The product service point search gered a task, which initiated a service (SPS) provided by the Hihouse service exchange process between the front- system in Figure 2 (marked as “C2”) is stage interaction interface, back-stage used as an example. When external users interaction services, and support pro- or customers performed searches on per- cesses. This service exchange process sonal computers, tablet computers, and was found across the service system, mobile phones, SESs were created for functional departments in organizations the front- and back-stage operating pro- or cross-organizations, and in the line of cedures. An example of the SES proce- visibility and line of internal interaction dure is presented as follows: processes. By using the service exchange

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{1} External user or customer entered into the Hihouse service system by using a web browser; {2} Requests for SPSs were made in the browser, which activated the SPS URL address, and a service point search request was submitted; {3} The SPS sent back the message “play the service point Flash animation to the user’s browser” to the main database server; {4} The main database server returned an SPS service interface to the user, after which the Flash program was activated and the Flash animation was played; {5} At the end of the Flash animation, the Figure 4. Segment “S1” of the Hihouse URL for the SPS service interface was resent to service system architecture (partial the user; and image) {6}The SPS returned the information selected by the user. Subsequently, relevant infor- The Hihouse service system inter- mation in the main database server was sent face was designed through communica- back to the user’s browser in the form of images and text. tion and discussion, and part of the interface content i shown in Figure 3. By By describing the user or custom- examining the SES procedure, systems er’s SESs in sequence, details concern- analysts deduced the corresponding ing the front- and back-stage operating front- and back-stage operating proce- procedures as a user or customer per- dures and the system architecture, as formed operations could be known. Fur- shown in Figure 4. thermore, the SES enabled the case company and the systems analysts and Conclusion and Management Meanings programmers to comprehensively understand the service generation process, In an era in which service innova- allowing them to communicate with tion is emphasized, businesses use IT to each other about design display. transform traditional house sale services that feature asymmetric information to house sales services that focus on in- formatisation, innovation, and customer- orientation. By providing sufficient information, gaps between transaction parties caused by information asymmetry are filled, enabling the provision of superior services. In this study, literature data were examined and a case study was conducted to integrate service science and information system method-

ologies and technologies to develop Figure 3. The Hihouse service system three service design tools, which were interface (partial image) subsequently employed to create an IIS

system. In this case study, the infor-

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mation system used by a real estate interface. The STL considered the per- company for the display and sale of spectives of customers during the initial houses was examined. The service de- stage of service design and incorporated sign tools were adopted to facilitate the concept of NSD life cycle, enabling communication between a design team conceptual guidelines and service fea- and the case company as well as to ex- tures to be transformed into actual inter- amine the demands of external users and faces and functional designs, which im- customers. The IIS service design tool proved the case company’s level of ac- set comprised numerous components, ceptance of the design format. which are listed as follows. A service exchange script (SES): A An innovative information service script that illustrated the process in blueprint (IISB): A design blueprint that which service information was ex- demonstrated the application of IT in the changed between front-stage interaction IIS system. IISB, similar to conventional interfaces, back-stage interactions ser- service blueprints, enabled IT design- vices, and support processes. By narrat- related communication between the de- ing using natural languages, the case sign team and the case company. In ad- company’s level of acceptance of the dition, the IISB enabled the creation of a front- and back-stage operating proce- flow chart that showed every application dures was enhanced, which facilitated of IT by the service delivery system. smooth and efficient communication Furthermore, the IISB was incorporated during the design stage. By examining into the NSD cycle and assisted the de- the SES procedure, systems analysts sign team to clearly and concisely dis- deduced the corresponding front- and play the application of IT by the service back-stage operating procedures and the system. The IISB enabled the case com- system architecture. In addition, systems pany to review and determine whether analyst integrated all front- and back- their service strategies, service concepts, stage operating procedure designs to philosophies, and guidelines were obtain graphics of these procedures as properly executed prior to making final well as the system architecture of a ser- decisions regarding information and vice system. communication services. These three components of the tool A service touch list (STL): A list set can improve communication on the that showed the use of IT in a system to topic of IT application, which is con- design and plan service encounters. The sistent with the current informatised ser- STL enabled the case company to clearly vice situation in which companies au- understand the planning of the service thorise IT to customers as well as how system’s interactive interfaces. In addi- front- and back-stage operating proce- tion, the case company compared the dures are informatised within organisa- STL with the IISB to understand functions and between organisations. The tions provided by each interface, such as design of IT applications must be able to icon buttons, so that the company could fulfil service goals; the tool set intro- rapidly visualize the style used on each duced in this study were able to satisfy

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customer demands, incorporate business Acknowledgements strategies, and provide detailed and complete information system analyses. The author would like to thank the two anonymous reviewers for valuable By using the tool set for the Hi- comments and suggestions during the house services, the design team con- review process. He also would like to firmed that the concepts and influences thank the graduate students for assis- of information and communication tech- tance in the case study. nology described in informatised service blueprints could be macroscopically References integrated into the IISB service blueprint. For every service encounter for informa- Andi, & Minato, T. (2003). Design tised services, the designers used the documents quality in the Japanese STL to accurately describe design phi- construction industry: factors influ- losophies that provide radical service encing and impacts on construction experiences by employing icon buttons, process. International Journal of content, effects, and background pictures. Project Management, 21 (7), 537- Regarding the operating procedures and 546. the corresponding system management procedures for cross-information sys- Allee, V. (2009). The Future of tems and interorganisational front-stage Knowledge : Taylor & Francis. interaction interfaces, back-stage interaction services, and support processes, the Berger, A. N., Espinosa-Vega, M. A., design teams used the SES to provide an Frame, W. S., & Miller, N. H. unofficial and easy-to-understand com- (2011). Why do borrowers pledge munication channel for the case compa- collateral? New empirical evidence ny and the system engineers. The three on the role of asymmetric infor- aforementioned service tools facilitated mation. Journal of Financial Inter- favorable communication between the mediation, 20 (1), 55-70. designers and the case company and produced an effective Hihouse system. Bitner, M. J., Ostrom, A. L., & Morgan, Hihouse garnered positive feedback F. N. (2008). Service blueprinting: from the case company and received a practical technique for service in- praise from customers and users. In the novation. California Management future, these three service design tools Review, 50 (3), 66. can be integrated with company business models to enable companies to expand Boehm, B. W. (1988). A spiral model the scope of their strategies. In addition, of software development and en- these tools can be used jointly with in- hancement. Computer, 21 (5), 61-72. novative design tools or methods to create more innovative tools for design Brown, T. (2009). Change by Design : teams. HarperCollins.

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Zomerdijk, L. G., & Voss, C. A. (2010). Service design for experience- centric services. Journal of Service Research, 13 (1), 67-82.

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A STUDY ON REUSING CONSTRUCTION-SUSPENDED BUILDINGS IN TAICHUNG CITY OF TAIWAN

Jui-Feng Liu Ph.D. Candidate, Graduate School of Engineering Science and Technology National Yunlin University of Science & Technology, Taiwan R.O.C. *Author: [email protected]

Tsung-Chieh Tsai Associate Professor, Department of Construction Engineering National Yunlin University of Science & Technology, Taiwan R.O.C. *Corresponding Author: [email protected]

Abstract

According to “Annual Report of Urban Planning in Taichung”, the growth of population to million and the urban social/economic indicators have shown an increasing tendency towards urbanization in Taichung city. There have been numerous construction-suspended buildings in Taichung city due to the construction rush and bubble economy in Taiwan earlier on. These buildings are large-scaled, which consequently have been extended into dirtiness and untidiness. However, there was no study on the risks derived from construction-suspended buildings in construction management yet. This study takes the construction-suspended buildings of those not obtaining the building usage permits in Taichung city as the case studies. The feasible mode for the reuse of Construction-suspended building proposed for case study of the phenomenon and substantial recommendations as a way to minimize risks during construction would help activating local economy.

Keywords: Reuse of Construction-suspended building (mainly buildings with completed construction, incomplete construction without being granted an occupancy license.)

Background of the study urbs instead. The second wave came in the late 1975s and early 1985s, The preliminary survey conducted when non-urban lands began being re- for this research suggests that 3 rush- designated based on current use, a ing construction waves have taken move that led to the rush in non-urban place in Taiwan, where the first one areas. The third one took place be- occurred in the early 1975s as result of tween early the mid 1995s (until 2000), the ban on construction projects in when the volumetric rate was imple- urban areas and builders turned to sub mented in areas subject to urbanization planning. The practice invited a total

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construction area of 70,000,000M 2 in As Taichung City keeps on seeing application for construction licenses Construction-suspended building, the each year between 1997 and 2000, issue has created environmental, secu- equaling the number of applications for rity and economic impacts. In con- construction license of 2 to 3 years struction codes, Construction - sus- combined in the 1985s. pended building may be defined as buildings issued with a construction A preliminary statistics made for license, but not an occupancy license. the research in question suggests, (as A thorough breakdown of internal fac- shown in Table 1), 28,119 construction tors (business administration, fund cases in Taichung City were granted raising and others) or external factors with a construction license between (political, economic and seismic 1997 and 2012 and 3,180 cases failed movements among others) of a feasible to see their occupancy licenses issued; reuse model for a building that eventu- in another word, of all the cases grant- ally becomes suspended of construc- ed with a construction license, 11.31% tion work would help solve economic, failed to see their occupancy licenses calamity prevention and environmental granted. Again, of the number of con- resources among other problems a city struction licenses granted in Taichung may have to deal with as result of Con- City, a little more than 5% would be struction-suspended building, and the suspended of construction work and in practice may be applicable to like cas- 2005, the rate went up to 12.20% and es in other cities and eventually help average rate goes between 2.45% and Taiwan see its economy activated. 12.20%.

Table 1. Taichung City With Construction Projects Granted With a Construction License and Without a Occupancy License From 1997 To 2012

d d n e From 1997 To 2012 te a s 3500 n e en a s c 2977 r en i 3000 G c L ts i y c L c 2500 2255 2270 2308 e n n 2143 je n a 2007 o io p 1868 r t u 2000 1750 P c c 1597 u c 1538 1535 n tr 1436 o st O 1500 1282 1289 ti n a c o t 993 y = -92.875x + 2546.9 u 1000 871 tr C ou R² = 0.6423 s a h n h it 500 o it y = -4.8735x + 240.18 C W R² = 0.0826 W 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 A.Construction license 2255 2977 2270 2143 2308 1868 2007 1538 1750 1282 871 993 1436 1597 1535 1289 B.Without occupancy license 107 294 248 231 190 227 228 178 388 182 78 112 281 171 123 142 B/A(%) 3.36 9.25 7.8 7.26 5.97 7.14 7.17 5.6 12.2 5.72 2.45 3.52 8.84 5.38 3.87 4.47

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A. Construction license Linear trend- Hence, the main purposes of this line formula study are as below. y = -92.875x + 2546.9 ； (1) Discuss the risks came from construction-suspended buildings by R-squared value of linear trend line applying risk management. R² =0.6423 (2) Recommend the strategy for solving the construction-suspended B. Without occupancy license Linear building problems. trendline formula y = -4.8735x + 240.18 ； The researching objects of the cases R-squared value of linear trend line of having only the construction permit, R² = 0.0826 but not obtaining the usage permits are defined as the construction-suspended With the housing market resuscitat- building. That is, the building has ob- ed over the years and the market turns tained construction permit in the plan expectative with regard to property and design phases, and some problems values, in addition to new projects or occurred during the construction, and growing amounts, many Construction- resulting the building of not obtaining suspended building turn available as the usage permit. According to the new offers. Next, as lands turn increas- preliminary analysis, the construction- ingly hard to get, builders see no op- suspended buildings occurred in Tai- tions but turning to these Construction- chung city are mainly private projects. suspended building being auctioned by the bank over troubled finance. In con- Business indicator cycle trast to the un believably high prices of state properties in auction, inaccessibil- Construction works are different ity and time- consuming effort in get- from other commodities because of the ting new urban lands, buildings of sus- longer timing of production that keeps pended construction work being auc- the builder from adjusting the pace of tioned with the land usually remain production based on market demand lower than the market value, making it and business situation. On the other attractive to builders, though manage- hand, the construction firms in Taiwan ment and reuse of idle space remain vary in terms of scale of fund; firms issues worth paying attention to. with solid fund are capable of taking impacts created by market fluctuation Purposes and other unknown risks while builders of poor finance could be put out of There has been no similar research business or postpone the project re- of the risk concerning with the con- peatedly when the market turns against struction-suspended buildings in the them of in case of other risks, leading field of construction management. In to Construction-suspended building. order to identify and solve the problem, Therefore, we like to first point out the the cases of those not obtaining the business causes to delays in construc- usage permits in Taichung city were tion works (real estate). taken to discuss the risks came from these buildings and recommended Fully aware that Taiwan’s real es- strategies by applying the risk man- tate market is vulnerable to changes in agement. the real estate market, international political situations and other political- economic factors, we must say that 176 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

inappropriate implementation of volu- spaces, which are specified as type for metric rate is the No. 1 cause of the reuse and type 1) . In this research, the rush construction wave that produced term Construction-suspended building the large number of Construction- is defined as buildings granted with a suspended building. (As shown in construction license yet without an Fig.1), we have a cause-effect diagram occupancy license and the buildings of delayed or idle construction works remain in the life cycle of the same. in Taichung City because of low busi- These buildings had been approved by ness cycle. competent authorities for construction license and the failure to be granted of Regulations for the reuse of the occupancy license as the buildings Construction-suspended building undergo expected difficulties during construction that make them with com- The Regulations on Reuse of Idle pleted construction works and incom- Spaces announced by Council for Cul- plete construction works. (As shown in tural Affairs, the Executive Yuan de- Table 2), we have a comparison of the fine the term of idle spaces as those reuse of idle spaces and the reuse of including antiques, historical buildings Construction-suspended building given or unspecified old idle buildings or in this research.

Table 2. Reuse of idle spaces and Construction-suspended building

1. Possibility of reuse. Similarity 2. New life to the building Antiques, historical buildings or Reuse of idle spaces unspecified old idle buildings or Different spaces definitions Reuse of Construc- Mainly completely built, incom- tion-suspended plete construction without an oc- building cupancy license. Mainly antiques, historical build- Reuse of idle spaces Different ings Difference types of Reuse of Construc- reuse tion-suspended Mainly private buildings building Reuse by transferring the use of idle Reuse of idle spaces Different spaces types of Reuse of Construc- To propose countermeasures for reuse tion-suspended possible reuses of the building. building

To analyze the internal and external construction sale and engineering dis- factors with impacts on Construction- putes among other limitations and a suspended building, it is paramount to feasible reuse model would only be compare relevant construction man- successful with case analysis. The limi- agement codes, abandoned houses after tations are given as follows: seismic movements, houses on pre-

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Construction management code (A). All valid construction licenses before January 1 1999 shall be au- Based on Construction Code, the tomatically renewed for 2 years basic structure of construction man- (The Executive Yuan notice No. agement features permits, delimitation, 8984958) construction, use and demolition of buildings as key elements of life cycle (B). All valid construction licenses behavior plus the rights and obligations before December 31 2000 shall be of all parties involved and eventually, renewed for 2 years by application it defines duties and responsibilities of (The Executive Yuan notice No. the competent authorities. The con- 27211) struction technical codes are to specify design, construction, structure and (C). All valid construction licenses equipment as technical issues involved before November 30 2000 shall be in buildings and Construction Tech- renewed for 3 years by application nical Rule is set as the basic technical (The Executive Yuan notice No. specification, where the regulations 9067067) and it is specified in No- governing applications for construction tice No. 9067067 that, if a construc- or occupancy of buildings are given in tion license remains valid, a joint (As shown in Fig.2). application for renewal for 5 years may be filed together with a con- Besides, Art. 53 of Construction struction case approved for another Code reads: “For approval of terms of 3 years for construction as referred construction (effective date of start of in the Executive Yuan notice 27211 construction), 3 months for each story regarding the reinforcing measures is set as base and in case of application for real estate market. for additional days for special structure, difficult work, demanding engineering Except for the issue of engineering work or special cases, the application survey, the above remarks reflect a shall be granted.” Measured by Con- rigid construction code. In the event of struction Code, a maximum extension troubled buildings, such as a house on of days for construction works between pre-construction sale, of which the date of receipt of the construction li- builder extends the construction period cense and date of completion may go intentionally, the uncertainty created as long as more than 2 years; details on the consumer could become more are given as follows: severe, as the builder might turn specu- lative with the extended construction (1). Example: (Article 41 of Construc- period and, in such a case, it would be tion Code, 3 months) + (Article 54 paramount that the government re- of Construction Code, 9 months) + views the policy of extension of con- (Article 53 of Construction Code, struction period based on the interac- 12 months) = 24 months. tion between Construction Code and reinforcement of the real estate market. (2). Major changes were introduced in 1999 when, as result of business cy- Abandoned Houses by Seismic cle, the buffering period for volu- Movements metric rate and the September 21 1999 earthquake, 3 situations may When it comes to safety of aban- appear from the perspective of the doned houses by seismic movements, construction license before 2001: in the research of JIN Wensen (2003), 178 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

2 observations 3) are proposed as fol- tion from becoming successful through lows: delivery, the deposit paid by the buyer would then be refunded plus the inter- (1). Owner responsible for aftermath: est 4) . For the abandoned building of which the owner is not willing to Engineering disputes make further investment in restart- ing the work because of economic During construction of average recession and no others are interest- housing, disputes over property right, ed in taking the work over, for the damage to neighboring houses or eco- sake of local population and safe nomic recession, construction works traffic, the owner is asked to seek may become suspended and the con- solutions on an amicable basis by at struction work would then be post- least being responsible for the dem- poned and solutions should be sorted olition or repair of damaged struc- out for disputes. tures. (2). Government involvement: For Case analysis owners of close-up businesses, it is proposed that the government en- The surveys conducted for this re- gages per construction code by ask- search indicate that, between 1997 and ing for demolition of buildings in 2012, more than 3,000 construction danger or taking over all debts, col- projects in Taichung City ended up lecting the property and title of the unfinished , quite a large number. Un- buildings with repairs of damaged derstaffed, the construction agency in structures and even restoration for Taichung City Government is unable to service. keep all cases under control and only a few of large cases were kept under Houses on Pre-construction Sale control for solutions in 2008. A major city, Taichung City has a large popula- As houses on pre-construction sale tion, booming manufacturing industry may invite disputes over transactions and potential acquisitive power, an on contracts signed without any physi- Construction-suspended building in the cal house, we are seeing a large num- city would create significant negative ber of payment warranty agents that impacts to the city itself 5) . secure the interests of the buyer, known as service bond. Businesses Basic case study offering such a service are construction agencies, brokers, banks and insurance The basic survey conducted for the companies, a practice that does mini- research in question suggests, of the mize property deal risks. In case of projects with a construction license houses on pre-construction sale that granted between 1997 and 2012, there cannot be completed, the security bank are projects not having been granted an may ask its own construction agency to occupancy license and in application take care of impose punitive measures. and without an application for suspen- At this time, the construction agency sion of construction work. (As shown would first make evaluations before in Table 3.), Construction-suspended raising fund, awarding contracts until building: (1) mean huge impacts on the completing the construction and deliv- concerned parties.(2) Jeopardizes the ery the work. In the event of force city landscape. (3) When it comes to majeure that should keep the construc- the population in the neighborhood, the 179 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

engineering structure and public engi- alties. (4) Homeless people or others neering safety would mean potential may hide in Construction-suspended hazards, unless demolished, the build- building creating security concerns in ings might create other problems, such the neighborhood. as collapse causing unnecessary casu-

Table 3. Construction Projects in Taichung City Without A Occupancy License Issued From 1997 To 2012

From 1997 To 2012

450

400 388

350 294 300 281 248 250 231 227 228 190 200 178 182 171 y = -4.8735x + 240.18 142 150 R² = 0.0826123 107 112 100 78

Without A Occupancy Occupancy License Issued A Without 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1~5 fl. 32 167 198 192 154 172 159 144 324 119 72 94 274 152 116 132 6~10 fl. 6 39 35 25 23 40 48 16 11 35 4 7 4 15 4 7 11 fl. & up 0 14 15 13 13 15 21 18 5 27 2 9 2 4 3 3 Missing 69740 1 0 0 0 0481 0 2 1 0 0 0 Total No of Occupancy Licenses Not Granted 107 294 248 231 190 227 228 178 388 182 78 112 281 171 123 142

Total No of Occupancy Licenses Not data and reconstruction of Construc- Granted result Linear trendline formula tion-suspended building remains (as y = -4.8735x + 240.18 ； shown in Table 4). R-squared value of linear trend line R² = 0.0826 (2). Case B: Construction License No. 1999-1218, in which the original Construction-suspended building plan was for a 32-story office build- in case analysis ing with small suites. In 1998, for poor revolving fund, the project was Case analysis is used in this re- pronounced closed up and another search to sort out both internal and construction company took over and external issues involved in idle build- changed the design. The new design ings before proposing feasible models is for households and small suites. for reuse of the same. The major difference between the details of the data and reconstruc- (1). Case A: Construction License No. tion of Construction-suspended 2001-1971, in which the major dif- building remains (as shown in Table ference between the details of the 5).

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Table 4. Case A of Reuse of Construction-suspended building

Construction 2001-1971 license No. Location Nantun Dist., Taichung City Purpose Residential area Type of struc- 1 RC building of 78 apartments of 3 levels underground d and 14 on ture ground Arcades 318.22 m 2 Arcade area 240.53 m 2 Others 1226.78 m 2 Total flooring 13845.78 m 2 Base area Total 1545 m 2 Building cov- 45.77 ％ erage Cost NT$129,382,000 approximately

Major differ- (1) To demolish part of the original building, safety co-efficient in ence in re- the second construction shall be taken into consideration as addi- stored con- tional load shall be added and, as RC used in the second construc- struction work tion may hurt the beams and columns, welded reinforced bars while increasing load that would all jeopardize the engineering structure creating problems to the structure of the building. (2) Previous evaluation and construction plan.

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Table 5. Case B Reuse of Construction-suspended building 4

Construction 1999-1218 license No. Location Taichung City South District Purpose Residential area Type of struc- 3 RC buildings of 609 apartments of 4 levels underground d and 32 ture on ground Arcades ○m2 Arcade area ○m2 Base area Others 3312.12m 2 Total flooring ○m2 Total 3312.12 m 2 Building coverage 58.22 ％ Cost NT$623,584,000 approximately

Major differ- In this case, the change of design and the demolished part of the ence in re- building are the major problems. As its façade and part of the fa- stored con- cilities do not meet the governing market trend, to assure that the struction work case is attractive to the consumer, the building is to stop for remedies in this regard.

Using case study on Construction- lack of fund to keep on with the con- suspended building in Taichung City, struction among others. Follow-up the internal and external causes to studies shall be conducted based on Construction-suspended building can reference literature review, field survey, be successfully sorted out. On the other case analysis plus result revision plus hand, a successful case study of reuse detailing both internal and external of Construction-suspended building causes to Construction-suspended may be systematically sorted out with building and eventually proposing fea- proposal of feasible solutions. (As sible models for the reuse of Construc- shown in Table 6), an initial study tion-suspended building. made for this project based on Case A and Case B for potential cases to Con- Conclusions and Suggestions struction-suspended building, such as low business that could be the result of (1) This research is conducted on the business cycle and end up in the lack situation in Taichung City, where as of transaction, poor purchase rate of many as 3,180 construction projects houses on pre-construction sale and fail to see the occupancy license is sued over the past 15 years. The real

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estate market has long been jeopard- References ized by the international situation and business cycle as well as other 1) FU Chaoqin, (2001), Theory on Re- political and economic factors, a de- use of Idle Spaces in Taiwan layed or suspended construction work can mean major harm to the 2) Republic of China Construction city and the competent authority Code needs to be concerned. (2) A successful reuse of Construction- 3) JIN Wensen, 2003, Security issues suspended building is closely asso- involved in abandoned houses by ciated with the law and proposals seismic movements,Construction are to be made as follows: Magazine , No. 88, Pages 16-19, A).Revision or adding of decrees for Taipei the solution of Construction- suspended building. 4) LIAO Zhonren, 2007, On Housing B).Establishment of a construction Transaction Security Systems, In- disputes deliberation committee for ternational Seminar on Housing Construction-suspended building Transaction Security Systems, Tai- Cases. C).Establishment of Public pei Environment Preservation Fund for hazards created by Construction- 5) XU Donxu, 2001, A Study on Hous- suspended building. ing Market Development in Tai- (3) Compulsory insurance for houses chung, Master-degree Dissertation, on pre-construction sale (such as Architecture School, Feng Chia transaction amount service bond, re- University al estate transaction service bond, housing transaction security system, 6) HON Baochuan, Aug. 2006 Intro- transaction amount service bond and duction to Real Estate Management, completed-house transaction insur- PERENNIAL PUBLISHERS. ance among others) plus real estate transaction security trust or real estate securitization to minimize the potential risks during construction as a way to avoid Construction- suspended building because of lack of revolving fund or low business.

Acknowledgments

This study is funded by “Grants - in - Aid for Scientific Research, Category A (Representative: Shuzo Furusa- ka) ”from Japan Society for the Promo- tion of Science, JAPAN.

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Table 6. Causes to Construction-suspended building

Type Description Remarks The rise of labor salary, equipment and machin- Change in cost of raw ery, construction materials or land cost, con- material struction costs go up and the construction work is forced to delay. 1. Bank unable to offer substantial credits 2. Gone a booming economy with sudden financial deflation Significant change in 3. Deflated politics and economy: (1). Raised de- interest rate/ Construc- posit reserve rate (2).Raised rediscount rate (3). tion load interest Government offering securities (4). Reduction Economic rate/Credit amount/ of currency supply. /Financial Financial deflation 4. Deflated politics and economy: (1). Deflated /Business measures government expenditure (2). Increase of duties, taxes or reduced taxation point (3). Reduced public investments (4). Reduced effective demand and others. 1. Low stock market, growing unemployment rate and private sector consumption terns conserva- Recessed market tive. 2. Houses on pre-construction sale meeting no buyers making the project unable to continue Unbalanced supply and Reduced market demand drives the profit down or demand products in slump Land law restrictions Land law restrictions and changes (IVA on land) and changes Construction law restrictions and changes (Volu- Construction law re- Law metric rate, coverage rate, indefinite extension strictions and changes of construction terms) Renewed urbanization Slow renewed urbanization plans making builders plans inactive.

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Figure. 2 Flow Chart for Terms of Construction in Different Stages 2)

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186 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

THE STUDY ON THE SERVICE QUALITY AND SATISFACTION OF PUBLIC HOT SPRING HOTELS

K.-W. Chen Department of Leisure and Recreation Industry Management, Fooyin University, Kaohsiung City, Taiwan, ROC [email protected]

Y. Ouyang Department of Tourism Management (Including Hot Spring Industry Master Pro- gram), Chia Nan University, Tainan City, Taiwan, ROC

Y.-C. Huang Department of Tourism Management (Including Hot Spring Industry Master Pro- gram), Chia Nan University, Tainan City, Taiwan, ROC

T.-L., Lee* Professor, Department of Architecture, China University of Science and Technology, Taipei, Taiwan, ROC *Corresponding author: [email protected]

Abstract

This paper is backed up with a solid empirical object- Jingguang Hotel, given PZB model as method, combined with the characteristics of Hot Springs industry as well as bathing facilities with a view to conducting customers’ service quality gap analysis between expectation and perception. The result indicated that state-run hot spring hotels underlay higher effects on customer service satisfaction by their service tangibles and assurance, which further bear more striking strength in prices, hot springs quality as well as the service in the sense of security and hygiene, it also presents where the interior design and its affiliated facilities were all tangibles for poor satisfaction. Upon PZB service quality gap analysis, each dimension and item came to light, which suggested that actual experienced perception was lower than expectation, especially lower in actually using acceptance, by which this study formed the angle of reflection and improvement for relevant authorities and operators.

Key Words: Public hot springs hotels, PZB model, Service quality

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Introduction 1996 has been more than 10 years. The participants ranged from Executive Tourism and leisure industry has Yuan authorities at all levels to its mu- become one of the most important in- nicipal, city at all levels, with a view to dustries in twenty-first century. In- covering public hot spring hotels and creasing income and living quality Onsen management units. Public hot from rapid economic growth in Taiwan spring hotels deserve certain level of with two-day weekend fad are key service quality to avoid outsourcing. factors enhancing higher willingness to engage leisure activities. Taiwan has a It is essential to go further study rich history of utilizing its hot springs on how service quality of hotels are, water resources for conducting funda- hence the research is necessary for mental industry development. With a giving service quality measuring mod- fad of weekly holiday, hot spring has el, mustering service characteristics become essential natural and tourism from hot spring hotels, making resource in Taiwan. SURVQUAL more effective and explore service quality in various indus- Taiwan Hot Springs Gourmet tries. Festival, was guided by Tourism Bu- reau, MOTC and organized by ROC Design Theory and Literature Review Onsen Tourist Association, was held concurrently in seventeen hot spring During the period of being colo- areas, was taken the general by storm. nized by Japan, police sanatoriums Thus, Hot spring travel has gradually were built as the hot spring outcrops laid the foundation of “Hot Spring were found by Japanese. After retro- Fad”.Taiwan hot springs hotels and cession of Taiwan, those facilities be- SPA resorts have sprung up all over came Police hostels which eventually the places. evolved into Jingguang Hotel nowadays. Therefore, there is historical However, the past abroad and linkage between public hot spring ho- domestic literature of Onsen are solely tels and hot spring therapy. either focused on water quality-related research (Pentecost et al., 2003) or Spas and Health research of business management in Springs and SPA, very few studies of The world’s hot spring treatment correlation between service quality and started from Roman Empire. During customer satisfaction in hot spring area European Industrial Revolution (19th released. Meanwhile, the study based century), hot spring application with on particular hot spring area or hotels mechanical principles began to diversi- have started off, most of them are for fy and spread among nations. Hot private hotels with little for state-run spring spas not only remained the tra- ones since government promoted the ditional bathing, showering, steaming hot spring tourism in 1999. and drinking, but also created sauna, Turkish bath, Egyptian bath, Russian Additionally, “Comprehensive bath, French Vichy bath and Germany Program to Improve Service Quality” Kneipp bath therapy (Chang, 2012). implemented by Executive Yuan in

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Hot Spring spas gradually pre- Beitou, Yangmingshan, Jiaosi, vailed among other areas. German Chihpen and other places setting up physician Bälz introduced the Europe- public baths for the Japanese to run an spa therapy into Japan in 1875, business of Ryokan by developing which set the cornerstone of thriving mountain for hot spring resources. Af- Japanese bath culture. Japan, the counter the retrocession of Taiwan, in the try of obsession with Onsen culture, 70's, with the economic growth, the enacted the world’s first hot spring law, provincial government in 1990 select- developed Onsen hospitals and created ed Chiao Hsi, Guanziling, Sihj-hongsi, the certification system for Onsen doc- Chihpen and other 14 hot springs also tors, which has enabled Onsen therapy two cold springs in Suao and Beipu as engaged with modern medicine. the hot spring scenic development focus. Besides, the implementation of The development of hot springs in two-day weekend has made hot spring Taiwan at earlier time, merely four hotels transform or convert into hot major hot springs (Beitou, Yang ming spring villas, spa pools or even luxuri- shan, Guanziling, Sihjhongsi hot ous five-star spa resorts intending to springs), the exploitation wasn’t over- cater customers various needs. To sum hasty but only a few simple or open-air up, the spa trend is created. bath places were built right after the hot spring was discovered by police or Currently, the use of hot spring aborigines. resources is merely one of many business topics on leisure hotels. Accord- Onsen application could be traced ing to the definition mentioned by back to the Japanese colonial period, it some scholars" As long as the stay was the time at which Japan developed pattern for the purpose of leisure and a large number of hot springs in Tai- tourism and combined with hot spring wan, and built police sanatoriums resources called "ryokan-hot spring around hot springs outcrops in order to hotel". According to Hot Spring Law, treat wounded soldiers. After the retro- Act 18, the hot spring utilization busi- cession of Taiwan, those were called ness using hot spring as the purpose of police hostels and eventually evolved leisure and tourism, ought to provide into Jingguang Hotel nowadays. water sample to the institute accredited by central tourism bureau agency for Hot Spring Hotels in Taiwan water condition testing, meanwhile, apply to municipal tourism agency for The development of hot spring "Hot Spring Certificate" before con- hotel could be traced back to as early ducting business. Hot spring certificate as in 1896, by a Japanese named Hirata ensure customers water meeting its Gengo who treated his leg with hot standard and quality. There are 333 hot spring in Peitou and later founded the spring hotels in Taiwan acquired hot first hot spring hotel called "Tengu spring certificate as of 2015, July. Om" , which officially started the ryokan history in Taiwan. After Japanese Service quality scale in hot spring occupied Taiwan, they found that Tai- industry (Lee and Chen, 2006) consist- wan has rich hot spring resources, thus ed mainly of three factors: "Environ- followed by another development in mental equipment factors", "hot spring

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water quality factors" and "transporta- which were built around where the hot tion convenience factors", water quali- spring outcrops located and remained ty of which included ingredients of the Japanese-styled architecture. The spring quality, quality of spring water, ones featured spring quality are Tai'an , temperature, texture, color, turbidity, Lushan, Dongpu , Guanziling , Chih- hygiene, freshness, purity and usage. pen , Gu guan ,while the others are Yang (2012) established the evaluation located in the general tourism areas index checklist on hot spring premises; such as Taipei ,Kenting, Alishan the study showed that the various Mountain, Penghu police , Riley , agencies and organizations, experts Kinmen, Hualien , Southern Cross and scholars have attached considera- Litao. Although the national police ble importance to the evaluation of hot employees, relatives (including retirees) spring water hygiene and safety facili- are the service target, some villas are ties. also open to the general interest.

Public Hot Spring Hotels Due to the escalating demands from customers, customer relationship The days when the privatization and service quality is the key to suc- and Build-Operate-Transfer mode had- cess. State-run business owned the n't been popular, made public tourism impression of less care in service industry so prevailing. The phenome- quality, which brought about the non had made either state-run or state- changes in privatization and BOT won hot springs hotels scatter all over business model. Face lifting state-run hot spring areas. The public ryokans business by means of privatization has are Tangwei spa, Nhon Trach spa, Tur- been promoting since 1989, part of tle Island Spa in Yilan County; Wu- businesses are able to conduct privati- feng spa in Hsinchu County, Tai'an zation on their own, while the others Jingguang Hotel in Miaoli County; are burdened with particular re- Guguan Jingguang Hotel in Taichung; strictions on policy, in need of better Lushan Jingguang Hotel, Tonpo enterprise transformation to enhance Jingguang Hotel and Auwanta spa in the condition privatization. Public ho- Nantou County; Guangziling tels and bathing pools also faced the Jingguang Hotel, Toong Mao Hot operational issues, which either out- Spring Hotel in Tainan City; Sihjhong- sourcing such as Toong Mao hot si public hot springs in Pingtung Coun- spring hotels in Tainan or retrieving ty; Chihpen Jingguang Hotel, Tamali after outsourcing such as Chin Chuan spa, Jinfeng Springs, Hongye Hot tribe in HsinChu. Springs , Green island spa in Taitung County...etc. Among those, Jingguang Customer Satisfaction Hotel is the largest by scale. Customer Satisfaction is a cus- Jingguang Hotel, was derived tomer judgment (or result) after con- from Japanese colonial period, later the suming a product provided the level of retrocession of Taiwan called police pleasure or disappointment. The earli- hostels and eventually evolved into est theory of customer satisfaction Jingguang Hotel nowadays. Early age, could be traced back to "An Experi- those places were to heal thus many of mental Study of Customer Effort, Ex-

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pectation, and Satisfaction" by Parasuraman et al. (1985) pro- Cardozo (1965). Reisinger and Turner posed "service quality gap model (Gap (2003), said that satisfaction is related model)", is widely adopted related to expectations and travel experience, service quality models , it is posited with comparison of the experience and that the service quality is determined expectations, feeling of satisfaction, by gap between customer expectations the customer is satisfied; the other beforehand and afterwards cognitive hand, the resulting discontent, and vice impact. The influential factors are ex- versa. As for the possibility of revisit- ternal communication, personal needs, ing, is relevant with overall customer reputation and past experience and satisfaction. others. As for customer awareness after receiving the service, is affected by When performances are below the service provider, impact of the ser- expectations, the disconfirmation is vice delivery process and marketing. negative, which means customers are Investigating managers and customers dissatisfied; when performances equal in credit cards, securities business, to expectations, customers are satisfied; banking, product maintenance by using when performances outperform expec- depth interviews, discovered the exist- tations, the disconfirmation is positive, ence of a gap between customer expec- and customers are particularly satisfied. tations and actual experience of service, Therefore, the influences of satisfac- the study resulted in the famous "PZB tion primarily are cognitive perfor- service quality model", as shown in mance, expectations, and disconfirma- Figure 1. tion, but other factors are still many.

PZB Service Quality Model Word of Personal Past mouth needs experience Among the relevant literature on discussion of service quality, scholars Expected service define service quality as results be- Gap 5 tween customer expectations for ser- Perceived service vice and comparison after service per- Customer formance. Sasser et al. (1978) stated Service External that the service standards and service provider Service delivery communications to customers quality is similar to the concept of cus- Gap 3 Gap 4 tomer service, which is the level and degree of internal and external benefits Translation of perceptions into quality specifications for customers, can be divided into ex- Gap 1 pected service levels and cognitive Gap 2 service levels. Churchill and Suprenant Management perceptions of (1982) proposed that service quality is customers expectations the customer satisfaction with the ser- Figure 1. PZB Service Quality Model vices, depending on the differences between actual service and original expectations. It’s main concept is customers are decision makers of service quality, enterprises should meet the needs of customers, which is necessary to 191 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

smooth five notches. Meanwhile, it proposed service quality in 1985 into also summed up ten dimensions meas- five factors, as "SERVQUAL" scale. ured the service quality (a total of 97 questions), including reliability, re- 1. Tangibles: The appearance of sponsiveness, competence, access, physical facilities, tools and equipment, courtesy, communication, credibility, personnel security, knowing the customer and tangibles. 2. Reliability: The ability to perform promised service reliably and Gap 1: between customer expec- correctly. tation and manager perception, and when companies don't understand the 3. Responsiveness: The willing- customer's expectations, it cannot pro- ness to help customers and provide vide customer satisfaction. prompt service.

Gap 2: between management per- 4. Assurance: The knowledge and ception and service quality specifica- courtesy of employees and be able to tion, the companies may be limited by convey trust and confidence. resource constraints and market conditions, and fail reach the standardization 5. Empathy: Provision of care, in- of services, resulting in gaps in the dividualized attention to customers. quality of management. Based on the results of the aca- Gap 3: between service quality demic research shows that the merits specification and service delivery, the and drawbacks of using service quality employees are incapable or lacking of assessment model is remained, even training, it will affect customer percep- with the same pattern, the results are tion of service quality. different as business sector and situation is different. The subject for the Gap 4: between service delivery study is on service quality of domestic and external communication, such as public hot-spring hotels, which with a exaggerated advertising, resulting in view of understanding whether customer over expectation, when actu- SERVQUAL scale adapted to the real service is not as good as expected, search of service quality with the do- will reduce its perception of service mestic quality of service as basis, cou- quality. pled with the hot spring characteristics for further research. Gap 5: between expected service and experienced service, refers to the Method gap between the perceptions of the customer after receiving the service, This study aimed to explore the only is this gap determined size by the application of PZB model in ryokan customer. public service quality gap and satisfaction. PZB the scholars refined the 10 determinants in 1988 according to the

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Service Quality Model Hypothesis 2: The desired perception of service quality and customer Study and integrate "service experienced perception cause signifi- quality SERVQUAL scale" and "cus- cant differences. tomer satisfaction", the construction of this research model (Figure. 2), includ- Hypothesis 3a~c: Various cus- ing accommodation customer back- tomers’ backgrounds variables, is mak- ground variables, service quality gap ing expectation of service quality, per- as well as the overall service satisfac- ception of performed service as well as tion, pattern instructions and theory the customer satisfaction a significant deconstruction. difference.

Hypothesis 4a~e: Service quality SERVQUAL scale factors not only Service Quality Prior Perception have positive impact on the overall customer service satisfaction but also H3a • Service Tangibles • Service Reliability cause significance. • Service Responsiveness • Service Assurance Questionnaires Design • Service Empathy A. Questionnaires Framework PZB Gap5 H4a~4e Staying Customer External Variables The design approached to struc- Overall Service tured questionnaires, which composed • Customer Need Satisfaction • Customer of three parts: General customer back- H3c • Accommodation History Environment ground information as part 1; Desired • Customer • Service Staff Experience • Bathing Facility perception and experienced perception • Customer H1、、、H2 • Cost of as part 2; and the part 3 is customer Reputation and Satisfaction perception for satisfaction. Hotel H4a~4e B. Encoded Scoring of Scale Service Quality Experience Perception Perceptions research model con- • Service Tangibles ducted by Five –Level Likert Scale, + • Service Reliability H 3b • Service 1 ~ + 5 points were measured, coded Responsiveness scoring scale, as shown in Table 1. • Service Assurance • Service Empathy C. Pre-test Questionnaires and Reliability Test Figure 2. Research Model This pilot research survey was conducted in October 2014 at Research Hypothesis Jingguang Hotel that has acquired hot spring certificate. Hypothesis 1: Dimensions of SERVQUAL scale account for inde- According to Wu (2009), pointed pendent positions in IPA. out that the number of samples for

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questionnaires should be taken 3-5 factors are in line with the theoretical times the maximum "subscale" items framework of the perception of service as principle. This questionnaires con- quality scale, were named as service sisted of 20 questions, was expected to tangibles , service assurance, service collect at least 60 copies. 70 question- responsiveness, service empathy, 20 naires were distributed to the tourists questions in total (Table 2). of spa hotel, the collected sample came to 65, the collected rate was 92.85%, (c) Reliability Analysis excluding invalid 2 copies, valid questionnaires rate came to 90%. Through reliability analysis in model scale found dimensional scales Table 1. Encoded Scoring Scale Cronbach's α coefficients were 0.705 and 0.733 respectively. Variables Scoring Desired Per- Unimportant ~ Very Cronbach's α coefficient in satis- ception Important (+1~+5) faction scale was .828, showed all with Experienced Strongly disagree ~ a well-reliability. Perception Strongly agree (+1~+5) Customer Very poor ~ Very good D. Operation and Object for For- Satisfaction (+1~+5) mal Questionnaires

(a) Data Analysis Questionnaires were completed by over-night travelers. In this study, Service quality perception scale questionnaires are taken by research and customer satisfaction scale are survey rather than a random sample of significant at more than 0.30 on the convenience. In terms of the amount of same basis of coefficient; extreme sample extraction, under the assump- scale test questions of the group are tion of sampling error is less than 5% considered as significant level, conse- to reliability of 95%, the number of quently, all questions are reserved. samples collected at least 385 copies. The number of samples derived from (b) Exploratory Factor Analysis the formula was 385 copies, taking the effective rate of pre-trial questionnaire KMO value is 0.923 (> 0.6), and survey of 90% into consideration; dis- the significant level of Bartle former tributed formal questionnaires 424 test (P <0.005), shown the research copies were required. questionnaire data suitable for factor analysis. Using exploratory factor Result and Discussion analysis simplify the perception of service quality scale items with meth- The impact on overall service od-Principle Component Analysis), satisfaction analysis extracted the common factors, coped with varimax for orthogonal axis, A. Service Identity Difference of Ex- wherein the loaded factor was greater ternal Variables than 0.5 enabled its significance. Total four factors extracted explained 66.191% of the total variance. This 4

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Table 2. Descriptive Statistics of Prior and Experienced Perception of Service Quality

Service Quality (Mean) T Test IPA Fact Number Item Before After Gap Reliability P Value Quadrant (A) (B) (A-B) Hotel architecture exterior *** T1 Design 3.55 3.05 -0.50 0.000 3 Hotel interior design and *** T2 facility 3.65 2.85 -0.80 0.000 3 Price of accommodation, T3 rest 4.20 4.05 -0.15 0.168 1

tangibility tangibility Hotel hot spring quality Service Service T4 and temperature 4.04 4.15 0.11 0.215 1 Hotel hot spring bathing 0.854 T5 facility 3.20 2.95 -0.25 0.055 3 hotel spa ancillary facilities (bathing products and *** T6 areas for dressing, show- 3.10 2.75 -0.35 0.000 3 er, rest) Appearance and outfit of T7 employees. 3.75 3.60 -0.15 0.355 2 Average 3.62 3.34 -0.28 0.048 * 3 Staff performs promise in R1 time 3.95 3.68 -0.27 0.187 2 Staff completes service R2 3.88 3.75 -0.13 0.074 2

Service assurance assurance Service correctly Staff is polite with decent R3 manner 3.88 4.05 0.17 0.246 1 Staff acquired profession- *** R4 al knowledge 3.45 2.88 -0.57 0.000 3 0.721 Service makes customers ** R5 feel secure 3.85 4.25 0.40 0.008 1 Service makes customers *** R6 feel sense of hygiene 4.05 3.52 -0.53 0.000 2 Average 3.84 3.69 -0.16 0.198 2

Service responsiveness responsiveness Service Staff provides essential A1 service in time 3.55 3.52 -0.03 0.498 3 Staff is willing to assist *** A2 customers 3.69 3.05 -0.64 0.000 3 Staff can deal with com- 0.698 A3 plaint immediately 3.28 3.55 0.27 0.085 3 Staff responses promptly A4 in case of public safety 3.87 3.85 -0.02 0.458 2 Average 3.60 3.49 -0.10 0.002 ** 3

Service empathy empathy Service Value customer’s right E1 4.03 3.85 -0.18 0.215 2 Provide service or help *** E2 various customers 3.69 2.85 -0.84 0.000 3 Provide prompt help to 0.644 ** E3 group with special needs. 3.20 2.70 -0.50 0.005 3 Average 3.64 3.13 -0.50 0.012 * 3

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The purpose is to identify signifi- (e) "Customer for reputation and cant differences on accommodation perception of the public hotels" varia- customer characteristics variables and bles in the "service quality" acceptance, various facets of models. One-way "overall service satisfaction" ac- analysis of variance (One-Way ANO- ceptance both share significant differ- VA) statistical methods is applied for ence, "negative comments" are signifi- testing. The operational procedures cantly lower than other variables. have to be performed by "homogeneity test" on each set of variables to deter- B. Service Quality Influence on mine whether analysis of variance data the Overall Satisfaction of Service shall be carried out on the digital con- version process. The empirical results Multiple regression analysis is to are as follows: verify the hypothesis that service quality affects overall service satisfaction (a) "Occupational part" variables analysis, and test whether the presence in the "service quality" acceptance, of problems on self-related variables, "overall service satisfaction" ac- and model collinearity exist issues. ceptance both share significant differ- The empirical result showed that F test ence, "police staff and relatives (in- is at significant level, and "service tan- cluding retirees)," are significantly gibles", "service assurance" and " ser- higher than other variables. vice responsiveness " are all positively affected " overall service satisfaction " (b) "Factors of choosing public and of significant (Table 3), which hotel accommodation” variables in the identified the hypothesis 4a~d . The "service quality" acceptance, "overall coefficients to "service tangibles" β service satisfaction" acceptance both coefficient (0.472), "the service assur- share significant difference, "cheap" ance" β coefficient (0.235) were higher, are significantly higher than other vari- showing the influence of overall cus- ables. tomer satisfaction mainly produced from " service tangibles ", "service (c) "The frequency of the public assurance". Furthermore, regression hostel accommodation?" variables in model explanatory power reference the "service quality" acceptance, value R2 is greater than 0.4, reaching "overall service satisfaction" ac- acceptable levels. At last, knowing ceptance both share significant differ- from VIF values and Durbin-Watson ence, " the first (1 time)" are signifi- value, there is no obvious pattern vari- cantly lower than other variables. ables collinearity and self-related phe- nomena. (d) "Have you ever stayed in this hot spring area other private hotel for PZB Service Quality Analysis accommodation?" Variables in the of the Gap 5 "service quality" acceptance, "overall service satisfaction" acceptance both Importance-Performance Analysis share significant difference,"Yes" are (IPA) proposed by Martilla and James significantly lower than "No" variables. (1977), has been widely used in decision-making process among businesses. By using important - performance level

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analysis (IPA) to explore public policy reached the maximum gap over 0.50. decision-making basis of the hotel ser- This is implying that consumers spend- vice quality improvement, divided into ing in these areas have greater expecta- keeping the advantage (I), improve tions gap, also shows that these items immediately (II), the relative weak- are disadvantages for public ryokan nesses (III), excessive attention (IV) operating. four categories. "Importance" in this study refers to the prior customer per- (2) Service Quality Gap 5 in IPA ception; "performance level" is the Analysis customer experienced perception. Empirical results shown in Figure (1) Comparison between service 3, respectively falls on the first to the quality prior perception and experi- third quadrant, the fourth quadrant did enced perception not have any questions of factors fallen.

The study conducted acceptance "Keeping the advantages (I)" type comparison between prior perception of customers is most concerned and in and service quality experienced per- fact has reached satisfaction of the ception of service quality with four service from the public spa hotels, factors, are all "experienced percep- which worked as service quality ad- tion," less than " prior perception" and vantages; the future should maintain almost all passed by the significant test, the advantages and more progress. In indicated that the quality of public hot empirical results, only in "hot spring spring services have room to grow. In water quality", "price of accommoda- particular, service empathy (-0.50*) tion”..4 indicator items fall on this observed the biggest gap, which de- quadrant. serves the attention for relevant units and operators. "Immediate improvement (II)" type of customers is most concerned On each question item, merely the and in reality has not yet reached satis- "service will make customers feel se- fied with the service, authorities em- cure" (0.4**) as a minority of "experi- ployees should give this type priority enced perception" is greater than "prior in order to improve. From empirical perception" acceptance, showing cus- results, the "service assurance, "will tomers have money-worth feeling. value customer’s right, "service will Other facets are existing issues of "ex- make customers feel a sense of hy- perienced perception" less than "prior giene", "staff responses promptly in perception" of acceptance. case of public safety ". 6 indicators fall on this quadrant. The empirical sites Among them, the " Provide ser- are public hotels with hot spring certif- vice or help various customers " (- icate, should be with emphasis on hy- 0.84***), " Hotel interior design and giene quality and bathing public secu- facility " (-0.8***), " Staff is willing to rity. assist customers " (-0.64 ***), " Staff acquired professional knowledge " (- 0.57***), " Service makes customers feel sense of hygiene " (-0.53***)

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Table 3. Model Multiple Regression Analysis and Result

Dependent Vari- Independent Variable Β t Sig. (p) R2 VIF DW able (factor ) (sub -factor ) Constant － 1.174 0.242 － Multiple Regres- Service tangibles 0.472 8.431 0.000 *** 2.812 sion Model ： Service assurance 0.235 6.493 0.000 *** .470 1.625 1.933 Overall service Service responsiveness 0.112 2.387 0.018 * 2.778 satisfaction Service empathy 0.131 1.278 0.256 2.167 Note ： 1. *indicate significance ，*p<.05 ** p<.01 *** p<.001 2. Shaded for “the highest coefficients independent variables in the regression model”

Figure 3. Service Quality Gap 5 in IPA Analysis

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"Relative weaknesses (III)” type faction. Journal of Marketing Re- of customers is less than satisfactory search, 19 (4), 491-504. on both prior perception and experienced perception. Therefore, never Lee, Y.H., Chen, T. L. (2006). A Ka- disregard importance of prior percep- no two-dimensional quality model tion from customers, such as physical in Taiwan’s hot spring hotels ser- facilities and ancillary facilities of hot vice quality evaluations. The springs hotels, and the indicator of Journal of American Academy of service empathy, are all in urgent need Business, 8 (2), 301-306. of investing resources to improve their service quality. Martilla, J.A., James, J.C. (1977). Importance-performance analysis, Conclusion Journal of Marketing, 41 (1), 77- 79. Service quality is defined by the customer's perception and formed the Parasuraman, A., Zeithaml, V.A., gap between customer expectation and Berry, L.L. (1985). A Conceptual experienced perception, so the public Model of Service Quality and its spa hoteliers intended to improve ser- Implication for Future Research. vice quality should get started by un- Journal of Marketing, 49, 41-50. derstanding what customers expect. Results from this study found that, Pentecost, A., Jones, B., Renaut, R.W. although a small part of the customer (2003). What is a hot spring?. Ca- actual experienced perception are nadian Journal of Earth Science, higher than prior expected perception, 40, 1443-1446. most customers experienced perception are lower than prior expectation, which Reisinger, Y., Turner L. (2003). can be seen, the service quality of pub- Cross Cultural Behaviour in Tour- lic spa hotel, still have room to im- ism: Concepts and Analysis. Ox- provement. ford: Butterworth Heinemann.

References Sasser, W.E., Olsen, R.P., Wyckoff, D.D. (1978). Management of Ser- Cardozo, R.N. (1965). An experi- vice Operation: text, cases, and mental study of customer effort, readings. Allyn and Bacon (Bos- expectation, and satisfaction. ton) Book Company. Journal of Marketing Research, 2 (3), 244-249. Wu, M.L. (2009). SPSS Operation and Application The Practice of Chang, J.N. (2012). Taiwan hot Quantitative Analysis of Ques- springs introduction. Taipei: Hwa tionnaire Data. Taipei City: Wu- Li Publishing Co. Nan Book.

Churchill, G.A., Surprenant, C. Yang, H.C. (2012). Establishment of (1982). An Investigation Into the Evaluation indicator for the Hot Determinants of Customer Satis- Spring Place. Leisure Industry Research, 10 (2), 71-89.

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E-BUSINESS OF ELECTRONIC SALES ON CV “XYZ” COMPANY

Zulhawati Faculty of Business and Information Technology Yogyakarta University of Technology, Indonesia [email protected]

Joko Sutopo Faculty of Business and Information Technology Yogyakarta University of Technology, Indonesia [email protected]

Abstract Information and communication technology is growing rapidly and supports technology and increasingly sophisticated gadgets that have an impact on various forms of business. The speed and ease of consumers to obtain information about the main driver of the development of a business or company. A company or any other business that has the speed and ease of service will attract more consumers, without prejudice of the qualities of the company. The need for ease in getting information and service companies en-courage their service is no longer dependent on the place but need to be supported by an interactive website and smartphone role.

Increased use of ICT in the company to be a request for marketing needs. Research collaboration with CV "XYZ", a company engaged in the sale of electronics. The method used is observation, systems analysis, design and implementation of e-business electronic sales. This application is built using Java, Eclipse, XML, PHP with MySQL as database and JSON connector as well. This application supports the company packaged in an application-based smartphone with android operating system. Features in this application provides convenience services such as sales and product information, order products and transaction information. The results showed that the application of E-Business applications based on Android CV "XYZ" into one of the services that can inc rease sales turnover by 29.27%.

Keywords : e-business, sales, application, android

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Introduction the current trend. On access to communications, today, people are facilitated by The development of a dynamic many data communication services con- community needs to get direct services nected to the internet, such as; and are willing to get the information WhatsApp, Line, Blackberry Messenger, quickly transformed many businesses Facebook Messenger and other data and corporate services. For example, in communication services that are easy the sale of airline tickets, 2 years ago, and free to be applied in smartphones. people have come to airline ticketing or institution. However, in accordance with E-Business depict businesses that the development of information tech- operate online. The definition of e- nology, airline ticket purchase can be business, according to some sources: done in retail have access connections according Chaffey (2007), e-business is even ticket purchases can be made via the exchange of information electron- the internet at home. ically mediated in the organization and external stakeholders to support business Currently, the rapid development of processes. information technology gives a lot of influence on aspects of business activity. According to O'Brien (2005) ex- The development of information tech- plains that e-business is the use of the nology brought some significant changes Internet and other information tech- in the business, so that demand speed nologies and networks to support e- and responsiveness in the business or commerce, communication and collab- company in varying scale and form of oration company, and the various pro- service to be repaired immediately to cesses that run through the web, both in respond to the changing needs of soci- the corporate network and in our cus- ety. The rapid development of infor- tomers and partners business. mation technology is supported by communication technology that have a Further O'Brien explained that to- significant development in line with the day many companies that have moved development of human needs become from mainframe-based legacy systems more complex. Where communication into application client / server cross- technology here is in the form of smart- func-tional, involving the installation of phone hardware with many operating software enterprise resource planning, systems that are easy to obtain and pur- supply chain management, or customer chased by people in a variety of sizes relationship management of SAP Ameri- and prices. People at any level have be- ca, PeopleSoft, Oracle, and other com- come accustomed and even tends to de- panies. pend on smartphone communication where users have a reason to facilitate According to Sawhney, Mohan access to information and their commun- (2001) understanding of e-business is ication to other users. Access to infor- "The use of electronic networks and as- mation such as news, social media, sociated technologies to enable, im- health news, and other information into prove, enhance, transform, or invent a

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process or business system to create su- easily achieved. The term e-business is perior value for current or potential cus- often equated with e-com-merce, e- tomers". business but actually has a much broader sense than the e-com-merce. E- So e-business is the use of electron- commerce is part of e-business. Accord- ic networks and associated with technol- ing to Huff et al (2000) quote from the ogy, to improve, modify, or create a Orion Group illustrates the difference business process or system that creates between e-Business, e-Commerce, Inter- superior value to current and potential net commerce, electronic web com- customers. If these conditions can be merce, EDI and fund transfer (EFT) as achieved then the company's goals more shown below:

The relationship between E-Business, E-Commerce and others

E-Business has the advantage that: information about its business products. Efficiency (reduce total operating costs); Access to the product include product Effectiveness (customers can be in touch information, product quality, product with the company at any time); Reach availability, purchase transactions of (able to expand the company's reach and products, and other matters relating to space for expansion with ease); Structure the business transaction. A company (change the behavior of firms in the bus- should make a breakthrough in seizing iness approach); and Opportunity Effic- opportunities in developing information iency (innovation to create products or and communication technologies, so services that are new). companies must develop support information system that has a function to Of much of the information needed support business processes with the aim by the user, especially for a company or to optimize the input, process and output business, is the utilization of access to of the company to produce a process that

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is profitable and sustainable. Many com- product marketing through social media panies or businesses are still using a sys- on the generation Y with the results of tem based sales and promotion of prod- the analysis that attract the younger gen- ucts without utilizing information tech- eration of consumers easier and faster nology media, so customers should visit for the products offered. the place of sale. Sales system with information technology is still con-strained Another study done research on E- by several things, such as data connec- Business and E-Commerce, such as Wu tions, lack of knowledge on the features et.al (2014) to measure the quality of of information technology in the utiliza- service of E-Commerce in social media. tion of information and com-munication Furthermore, researchers Dinu et.al technology, and the limited application (2014) highlights how internet users E- of information systems to support busi- Commerce services to the ministry in ness services in the community. doing online sales.

Use of the Internet for E-Business In online sales transactions can not has spread widely in small, medium and be separated by the cybercrime so con- large. Researchers conducted a literature sumers should be careful. Researchers review of several other studies regarding Hille, et.al (2015) conducted a study the use of the Internet for E-Business, E- regarding the scale of cybercrime in us- Commerce, the impact to the crime in ing the E-Commerce services. From cyberspace (cybercrime). Dijkman, et.al various studies above, the development (2015) describes the use of the Internet of internet usage has grown rapidly, but for business models so as to increase the researchers still do research on E- company's revenue. Rahimi, et.al (2015) Business for the company CV "XYZ" also describes the management of infor- which aims to increase the number of mation technology (IT) to the business sales of the company's products. This process, including the role of IT within study differs from previous studies be- it. While Weiwei (2015) and Brzozow- cause it chose Android platforms as a ska (2015) conducted a study of business medium for online sales. The operating through E-Business and E-Commerce in system used widely in this Android the modern economy for the company's smartphone. This system is one smart- product sales transaction activity there phone platform used in many levels is by increasing the amount of sales of highly supported by Google. Based on products and services. But Hu (2014) the basis of application development describes the impact of the sale on the (software), at this time, Android was Internet with the results of the analysis developed quickly. Therefore, the An- showed a 15% sales decline due to the droid-based appli-cation that was devel- effects of tax cuts for various products. oped to meet the needs of users of smartphones that have Android operat- Business impact of online sales is ing system. The programming language also explained by the researcher Ap ă- used in the development of this applica- văloaie (2014) and Balakrishnan, et.al tion is Java, the Eclipse compiler, and (2014) which describes the impact of addons ADT.

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The aim of this study is to bring nology, which has several selling prod- together and develop information tech- ucts, such as smartphones, PCs, laptops, nology facilities-based smartphone that computer networking devices, and ac- will be implemented in the company CV cessories. CV "XYZ" requires software "XYZ" located in Sleman, Yogyakarta, (program / application) and the hardware to process business transactions, mainly that supports business pro-cesses to op- to support the sales of electronics com- timize sales and marketing processes for panies. CV "XYZ" company operating the company based on the needs of in- in the electronics and information tech- formation and technology in society.

Figure 1. The Application E-Business of Electronic Sales

Limitations of the problem in this that are available, and special application research is the application of a specially just to see identification, specification, developed sales in the product order and price of the products to the buyer or service activities, sales information, customer. product information available and the financial transactions of sales in the CV Research Method "XYZ". This is an Android system-based application that supports it easy for buy- E-Business research is done in CV ers or customers in ordering products "XYZ" which is located protruding, Sar-

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iharjo, Ngaglik, Sleman, Yogyakarta. mation systems that support information This research was conducted in January technology. To help process business 2015 and ended in November 2015. Data transactions in CV "XYZ" developed an and information collected through obser- e-business applications with Smart- vations help to design and analyze sys- phone-based electronic sales using the tems, including interviews with owners Android operating system. Android has and technicians, and a review of relevant several advantages such as portability literature. (smartphone) so that through communication of data, users can get information The materials and tools needed in fast, ease of uploading or downloading this research include software such as data or files, applications that can be Eclipse, Java, PHP, MySQL, Photoshop integrated with Google and the user can while the hardware required is a modem, install it from Google Play. mobile phones and smartphones. After implementing e-business Observations made to mngetahui electronic sales in the CV "XYZ" is fin- how the system runs. After the design, ished and has been tested (tryout) and engineering and wake up the system then publish it on Google Play so that there to tryout system implementation, customers CV "XYZ" can install appli- simulation and implementation and cations and use with ease. evaluation to improve the system to make it better. Customers or buyers to access the system in the purchase of electronic Result And Discussion products from CV "XYZ", must install e-business applications in Google Play. The first step before making the system interface design system for inter- E-business applications of electron- active applications become. E-business ic sales CV "XYZ" has a menu: "PROD- process flow of electronic sales in CV UCT", contains information from elec- "XYZ" should know and need a transac- tronic products (product name, price pro- tion documents that aim to help in the ducts and stock products); "ACCOUNT", design application. Furthermore, design- contains accounts for cust-omer / buyer; ing a system of e-business electronic "ABOUT", contains information about interactive sales so easy to use. the company CV "XYZ"; and "HELP", contains support facilities if there are Based on data obtained from the problems related to the application CV "XYZ" is still applying the manual penggunana. Customer / buyer must for data processing circulation of goods, have an account that first enroll in the so that data processing is less effective "ACCOUNT". After having an account, and efficient, these reports are not up- the customer / buyer can make a pur- dated at all times and no sales infor- chase electronics products.

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Figure 2. Flowchart Application of E-Business

Figure 3. Menu on Application System

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Figure 4. List Product of Application E-Business

from CV "XYZ", then comes the next CV "XYZ" after using the application of menu to complete the purchase of a E-Business at 29.27%. product called the transaction. Research results with e-business Figure 5 is a recapitulation of sales electronic sales in the CV "XYZ" has a of electronic products in CV "XYZ" for system that is interactive and easy to use 11 months in 2014 before using E-Busi- so as to provide convenience for the cus- ness applications. Whereas in Figure 6 tomer / buyer. If there is a wrong data shows the results of the recapitulation of input, the system will provide feedback sales of electronic products in CV to the user in the form of dialog mes- "XYZ" for 11 months in 2015 after us- sages. With the application of e-busines ing the E-Business applications. can help CV "XYZ" promote, increase the sales of electronic products, and pro- Based on the results of the sales vide convenience for the customer. summary electronically on CV "XYZ" in 2015 increased sales of electronics prod- Conclusions ucts than in 2014. The percentage increase in sales of electronic products in From the research that has been done can be concluded that with the

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Figure 5. Recapitulation Sales of Electronic Products for 11 Months at 2014

Figure 6. Recapitulation Sales of Electronic Products for 11 Months at 2015 system of e-business applications of customer verification process must be electronic sales in the CV " XYZ " to further improved so that the system be- provide convenience for the customer / comes more powerful. We recom-mend buyer and sales is becoming more that there should be a system backup increased by 29.27 % . However , for the data automatically in any period of time future of e -business applications in the so as to minimize the loss of data.

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References Hu, Yu Jeffrey, Zhulei Tang. 2014. "The impact of sales tax on internet and cat- Ap ăvăloaie, Elena-Iulia. 2014,"The Im- alog sales: Evidence from a natural pact of the Internet on the Bus-iness experiment". International Journal of Environment". Procedia Economics Industrial Organization, Vol : 32, and Finance, Vol : 15, Page : 951-958. Page : 84-90.

Balakrishnan, Bamini K.P.D., Mohd Irwan Huff, S. L., M. Wade, M. Parent, S. Dahnil, Wong Jiunn Yi. 2014. "The Schneberger and P. Newson. 2000. Impact of Social Media Mark-eting Cases in Electronic Commerce . Bos- Medium toward Purchase Intention ton, MA : The McGraw-Hill Compa- and Brand Loyalty among Generation nies Inc. Y ". Procedia - Social and Behavioral Sciences, Vol : 148, Page : 177-185. O’Brien, James A. 2005. Pengantar Sis- tem Informasi, Edisi 12 . Jakarta : Brzozowska, Anna, Dagmara Bubel. 2015. Salemba Empat. "E-business as a New Trend in the Economy". Procedia Computer Sci- Rahimi, Fatemeh, Charles Møller, Lars ence, Vol : 65, Page : 1095-1104. Hvam. 2016. "Business process management and IT management: The Chaffey, Dave. 2007 . E-business and E- missing integration". Inter-national commerce Management: Strategy, Im- Journal of Information Management, plementation and Practice . Financial Vol : 36, Page : 142-154. Times Prentice Hall. Sawhney, Mohan, dan Jeff Zabin. 2001. Dijkman, R.M., B. Sprenkels, T. Peeters, The Seven Step to Nirwana – Strategic A. Janssen. 2015. "Business models Insights into e-Business Transfor- for the Internet of Things". Inter- mation . New York : McGraw-Hill. national Journal of Information Man- agement, Vol : 35, Page : 672-678. Weiwei, Li, Dai Yue. 2015. "Research on Value Evaluation of E-commerce Dinu, Gabriel, Loredana Dinu. 2014. "Us- Business Model". Procedia Com-puter ing Internet as a Commercial Tool: A Science, Vol : 60, Page : 1328-1336. Case Study of E-Commerce in Resita". Procedia Engineering, Vol : 69, Page : Wu, Yen-Chun Jim, Ju-Peng Shen, Chan- 469-476. Lan Chang. 2014. "Electronic service quality of Facebook social commerce Hille, Patrick, Gianfranco Walsh, Mark and collaborative learning". Comput- Cleveland. 2015. "Consumer Fear of ers in Human Behavior, Vol : 51, Online Identity Theft: Scale Devel- Page : 1395-1402. opment and Validation", Journal of In- teractive Marketing, Vol : 30, Page : 1 -19.

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THE DEVELOPMENT PRIORITY OF TECHNOLOGY COMPETENCE OR MARKET COMPETENCE: CASE STUDY OF TAIWAN FLAT PANEL DISPLAY

Peng-Jung Lin *1, Yi-Wan Wang 1, Joseph L. Y. Che 2, Bey Rong Kung 1, Wen-Ih Hsieh 1, Ashley Leung 1

1Department of Logistics, Yang-En University, Fujian, China 2Christ’s College, Taiwan, ROC

*Corresponding Author: [email protected]

Abstract

Previous studies have illustrated that corporate competence types should be developed sequentially (e.g. technologies promote markets, TPM); however, few studies have clearly indicated which type of competence a firm with limited resources should first develop to facilitate attaining other follow-up competence types. In practice, we observe contra- diction that the international enterprises adopt the market competence to transfer external firm’s technologies (MPT). It is an interesting phenomenon that motives to resolve the gap between the theoretical argument and practice. This study explored whether a firm with limited resources should first develop technology or market competence. By longitudinally tracking two Taiwan FPD equipment manufacturers for 8 years and using the extended case method (ECM), the ideal competence development route for manufacturers was determined: to first exploit technology competence or to first explore market competence. This study indicated that corporate competence development was determined by resource characteristics, learning mechanisms, and development routes. We found if firms possess improvement resources (IR) or social resources (SR), then they should apply an inside-out or outside-in routes; in other words, these firms should first exploit technology competence or explore market competence, and then apply the intra- or inter- OL mechanisms to facilitate attaining other competence.

Keywords: technology competence, market competence, resource-based theory, organizational learning theory, Small-Sized Firm

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Introduction accordingly, needs further study. Par- ticularly, few empirical studies have In a dynamic environment, devel- focused on small-sized firms prioritize to oping new types of corporate compe- develop necessary competence, promote tence to maintain corporate survival is a another competence, and consider the critical topic (Helfat and Winter, 2011; strategic thinking over the characteristics, McGrath, 2001). For example, Werner- mechanism, and routes of interaction of felt (1984, 2011) proposed that the key small-sized firm. factor influencing corporate diversifica- tion and growth is the resource devel- The purpose of this study was to opment sequence rather than product explore how small-sized firms utilize development sequence. Danneels (2002) firm’s limited resources, learning mech- recommended that firms first attain anism, routes, and prioritize to develop technological competence and subse- necessary competence for firm’s survival. quently apply it to develop new products, The research problem of this study is thereby attracting new customers, creat- that small-sized firm constrained on the ing novel markets, and harnessing cus- situation of limited resources, not to tomer competence. Levinthal and March develop several competences simul- (1993) reported that firms should first taneously, and think how small-sized exploit their existing resources because firm using previously competence to doing so is more time- and cost- efficient facilitate follow-up competence. And than developing new resources. Thus, what thinking should be used for small- developing resources sequentially is sized firms to choice of the fitness learn- critical for firms. Danneels (2002) brief- ing mechanism and routes. ly mentioned the sequence of developing technological and customer competence; This research by longitudinally however, most scholars have failed to tracking two Taiwan Flat Panel Dis- illustrate competence development se- play (FPD) equipment manufacturers quences. for 8 years and using the extended case method (ECM) compared di- Past research explored the devel- chotic successful route of com- opment of firm competence mostly petence development. We found that stressed on large organizations (Nonaka, Neda (disguised name) possessing Chia, Holt, and Peltokorpi, 2014; Wer- the characteristics of improvement nerfelt, 2014). However, they do not resources (IR), develop technology give enough attention to small-sized competence first, and apply intra- firms constrained on the situation of organizational learning (intra-OL) limited resources, not to develop several mechanism and inside-out routes competences simultaneously, and think (IOR) to promote market com- how small-sized firms use previously petence (Technology Promote Mar- competence to facilitate follow-up ket, TPM). Conversely, ARET competence . Which competence shall (disguised name) has the charac- prioritize to develop so as to build teristics of social resources (SR) another competence for small-sized firm, (Alcacer and Oxley, 2014; Chittoor, 211 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Kale, and Puranam, 2014), develop which can produce social connectivity market competence first, and execute with external and internal organizational inter-organizational learning (inter- relationships to enable collaborations OL) mechanism and outside-in and generate opportunities. routes (OIR) to promote technology competence (Market Promote Tech- Relationship between resources and nology, MPT). The article concludes competence with noting the academic and practical application. Research limit Scholars following the RBV have and future research direction is varying opinions regarding methods of offered as well. using resources to develop competence. Wernerfelt (2014) stated that firms Literature Review should leverage their existing resources to establish resource position barriers, Definition of the resource-based view thereby developing new types of competence, placing firms in advantageous Penrose (1959) stated that only re- positions, and generating corporate com- sources with unique characteristics can petitive advantages. Danneels (2002) assist firms in generating profits. Addi- reported that applying existing corporate tionally, Mahoney and Pandian (1992) resources to develop new types of com- reported that both tangible and intang- petence involves resource exploitation ible resources are corporate assets. Fur- and greatly influences corporate compe- thermore, Wernerfelt (1984, 2014) indi- tence development; Danneels (2007) cated that resources are the key to devel- also emphasized leveraging internal cor- oping resource position barriers because porate resources to develop new types of they can assist firms in gaining relatively competence; and March (1991) asserted advantageous positions. Moreover, Bar- that two types of resource exploitation ney (1991) asserted that corporate re- and resource exploration, namely, inter- sources should possess the following nal and external resource configuration, characteristics to enable firms to gener- are involved in exploiting corporate re- ate sustained competitive advantages: sources to develop competence. Internal value, rareness, inimitability, and non- resource exploitation is more beneficial substitutability. These scholars have to corporate competence development emphasized that resource heterogeneity because less time and fewer resources facilitates building a corporate competi- are used for internal resource exploi- tive advantage. Regarding resource types, tation than for external resource explora- Noda and Bower (1996) proposed the tion. Helfat and Peteraf (2003) empha- concept of universal resources and indi- sized a dynamic resource-based view cated that their high adaptability and and indicated that corporate competence alternatively assist firms in continuously development should focus on the evolv- modularizing resources for competence ing dynamic essence of resources over development. Tsai and Ghoshal (1998) time and that the evolution of internal as well as Nahapiet and Ghoshal (1998) resources determines the direction of proposed the concept of social resources, corporate competence development. 212 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Teece, Pisano, and Shuen (1997) report- Sinkula (1994) as well as Slater and ed that, to respond to external and inter- Narver (1995) emphasized the three nal environmental changes, firms should steps of organizational learning: infor- achieve business prosperity by creating, mation acquisition, information dissemi- integrating, combining, and allocating nation, and information-shared interpre- resources. These scholors have stressed tation. Specifically, information acquisi- that developing internal and existing tion refers to the process by which corporate resources is the key to devel- knowledge is obtained; information dis- oping corporate competence, thereby semination refers to the process by suggesting that the RBV is critical to the which information from different development of corporate competence. sources is shared, thereby leading to new information or understanding for organi- Competence development zations; and information-shared interpretation refers to the process by which one According to the concept of de- or more types of knowledge or applica- veloping competence through re-sources, tions are generated after more commonly previous studies have mostly focused on understood concepts. applying existing comp-etence types to develop new competence types. For ex- Regarding the question of how to ample, McGrath (2001) reported that a apply existing corporate resources to firm should increase its existing compe- develop new types of corporate competence to enrich its cor-porate resource tence, scholars following OLT have pro- database and develop new competence posed numerous benefits of organiza- types, thereby enhancing the firm’s sur- tional learning for corporate competence vival in a dynamic environment. Dan- development. March (1991) emphasized neels (2002) emphasized that a firm exploitative learning, a concept that fo- should apply its existing internal re- cuses on the reuse of existing and inter- sources to develop first-order compe- nal corporate resources and competence. tence, which can facilitate attaining sec- Additionally, Danneels (2007) conclud- ond-order competence. Henderson and ed that underused and existing corporate Cockburn (1994) divided competence resources should be applied for execut- into two levels: (1) component compe- ing exploitative learning to develop cor- tence, which is generated by applying porate competence. Furthermore, Barney and combining existing competence (1991) indicated that efficient and effec- types and (2) architectural competence, tive corporate competence can be pro- which further modularizes component duced when firms apply controllable com-petence to a higher level, thereby resources and competence to develop gradually developing corporate compe- new types of competence. tence. These scholars have emphasized Learning mechanism and competence that firms should execute organizational development learning and develop corporate competence by using their existing corporate resources. However, numerous other 213 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

scholars adhering to OLT have indicated ly tracked for 8 years to explore how this that learning is not restricted to internal type of development was influenced by corporate learning; instead, external re- corporate resource characteristics, learn- sources can be integrated to achieve in- ing mechanisms, and development ter-OL. For example, Yannopoulos, Auh, routes. This case study involving long- and Menguc (2012) emphasized apply- term comparative analyses offered abun- ing various learning types to improve dant and detailed survey results and find- and expand existing resources for corpo- ings (Rouse and Daellenbach, 1999). rate competence development. Explora- tion learning is an innovative and entre- Brief introduction of the case company preneurial perspective and approach that challenges corporate conventions Neda Company (assumed name) (March, 1991). Inkpen and Dinur (1998) is a panel equipment manufacturer locat- proposed that firms should effectively ed in the Central Taiwan Science Park. employ inter-OL from external corporate Established in 1978, Neda, which has channels to explore innovation options. 587 employees and earned a revenue of Additionally, Holmqvist (2003) reported approximately NT$561 million in 2013, that firms should no longer apply their provides automation devices for inte- internal corporate experience and grated circuit, semiconductor, flat panel knowledge as sources for learning; in- display, and solar energy industries. stead, firms should learn according to Neda’s automation technology is widely new approaches and concepts that are applied in equipment shipping and man- external to corporations. The aforemen- ufacturing in the photovoltaic and semi- tioned scholars have stressed using in- conductor industries. The key technolo- novative approaches to explore learning gy developed by Neda in recent years opportunities as well as applying exter- has been applicable to the research, de- nal corporate resources to engage in in- velopment, and manufacturing of auto- ter-OL and develop corporate compe- mation equipment in the high-tech in- tence. dustry; the details are provided in Table 1. Methodology ARET is a company that offers ma- This study employed the extend- chine automation and maintenance for ed case method (ECM) for qualitative cathode ray tubes (CRTs), SCs, ARET is research to conduct in-depth interviews, a company that offers machine automa- observations, and a practical literature tion and maintenance for cathode ray review of Taiwan panel equipment man- tubes (CRTs), SCs, thin-film transistor ufacturers. The two cases that served as liquid crystal displays (TFT-LCDs), and dichotic samples facilitated conducting solar cell industries. ARET was founded comparative analyses and extensive the- in 1982, and had approximately 489 em- oretical development (Glaser and Strauss, ployees and $424 million (in 2013) in 1967; Strauss and Corbin, 1990). Addi- annual sales at the time this study was tionally, the processes of corporate com- conducted. In many ways, ARET has petence development were longitudinal- been a successful company. Its automa- 214 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

tion equipment, especially micro-drills, adopted extensively by leading optoelec- the entire factory equipment and tronics firms in material moving and pack/unpacking system, have been manufacturing.

Table 1. Case Company Number of Em-

Time of Es- ployees/annual Research Company Service Items tablishment sales in $ million period NT dollars Robot design, robot application, automation skill, moving system, Since 1978 Neda pocessing machinery, clean room 577/5.4 32years equipment design, and control system 3rd , Mar, application 2006 to th Automation equipment, micro- 30 , Apr, ARET 2014 drill the entire factory equipment, Since 1982 Compa- 489/4.25 micro-drill, robot design, and 28years ny pack/unpack system

Interview data The presented interview information was retrieved from the interviews with those The present study employed the in charge of the company; the inter- extended case method (Burawoy, 1991, viewed executives were from different 2014). Danneels (2002) asserted that departments (such as, departments of adopting this method for collecting em- quality control, design, materials, and pirical data facilitates integrating, recon- management), and various entities and ceptualizing, and extending theories, people were also interviewed (authorities, rather than creating theories. Burawoy research institutes, and clients). The in- (2014) also indicated that, because the terview lasted from approximately 45 extended case study method is used to minutes to 2 hours; numerous inter- compare theories and inter-view data viewees consented to the interviews be- and subsequently to compare concepts ing recorded, and those who provided and theories, the two-cycle exchanges key information were subsequently in- and intensive analyses thereby enhance vited to confirm the correctness of the data interpretation. The interview period relevant interview information (Miller, of the present study was 8 years (from Cardinal, and Glick, 1997). Jick (1979) March 3, 2006 to April 30, 2014), during reported that the restrictions of em- which 47 interviews were conducted. ploying only one research method can be

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overcome by adopting various approach- gy competence can be divided into three es to collecting different types of data. layers. The first layer, component com- Thus, in addition to the interview data, petence, refers to existing corporate corporate documents and files also manufacturing skills and know-how (T 1) served as abundant and diverse bases for (Wu, Wan, and Levinthal, 2014; Dan- theoretical development. neels, 2002). Furthermore, the second layer, com-posite competence, repre- Findings sents the research and designs (T 2) (Walsh and Ungson, 1991) executed by In accordance with the research applying and combining the various purpose, the research findings were clas- types of existing corporate manufactur- sified into four parts: (a) technology ing skills. Finally, the third layer, archi- competence and market competence, (b) tectural competence, refers to the radical the development priority of technology innovations in the processes and materi- competence and intra-OL , and (c) resource als (T 3) (Obloj and Zemsky, 2014) characteristics and selection of a com- formed by further modularizing the re- petence development route. Each is dis- search and designs derived from compo- cussed below. site competence.

Technology competence and Market competence can also be market competence divided into three layers of competence. The first layer, i.e., component com- To theoretically interpret the tech- petence, refers to personal (employees) nology and market competence of the relationship connections (M 1) (Eggers, research case companies, we extended 2012, 2014), which indicate the existing the concepts of component and arch- and external social connections pos- itectural competence proposed by Hen- sessed by corporate executives. Addi- derson and Cockburn (1994) and defined tionally, the second layer, composite competence as a competence group competence, refers to competitor rela- formed by resources that can be continu- tionships (M 2) (Park, Srivastava, and ously exploited or developed, in which a Gnyawali , 2014; Kleinbaum and Stuart, layer called composite competence is 2014) formed by combining the existing incorporated. The first layer, called and external social connections pos- component competence, refers to exist- sessed by corporate executives in order ing corporate competence. Addi- tionally, to establish collaborative relationships the second layer, composite competence, with competitors. Finally, the third layer, is a group’s unique composite compe- architectural competence, refers to cus- tence developed by applying and com- tomer relationships (M 3) (Engerman, and bining existing types of corporate com- Rosenberg, 2014), which modularize the petence. Moreover, the third layer, archi- various competitor relationships into tectural competence, refers to high-end connections that extend beyond competi- architectural com-petence formed by tors to crucial clients. The distinction further modularizing different types of between technology competence and composite competence. Thus, technolo- market competence is listed in Table 2. 216 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Table 2. Technology competence and market competence

patterns Technology competence Market competence Manufacturing and material radical Architectural competence Relationship with customers (M 3) innovation (T 3) Research and Design (T 2) Relationship with competitor (M 2) Composite competence

Basic competence Manufacturing know-how (T 1) Relationship with employees (M 1)

The Development Priority of Technology ment of sales (Harvey, Palmer, and Competence and Intra-OL Speier, 1998). The aim was to employ the concept of exploitative learning to This section demonstrates the transfer the existing and internal corpo- interplay of resource characteristic im- rate technological skills to the profes- pacts on firm’s competence development, sionals and executives of all departments as well as the historical progress of the (information acquisition), thereby ena- critical resource development. Based on bling these personnel to learn to provide the interview and the historical progress in-depth services to clients (information of Neda’s existing resource, we found interpretation). The learning network at that Neda has the characteristics of im- Neda involved weekly formal depart- provement resources (IR) and exploita- mental meetings, monthly cross- de- tion resource (March, 1991). They ob- partmental meetings, intradepartmental tain advanced knowledge from intra-firm apprenticeships, informal chats during interaction by continuing to improve meal times, and activities held during voluntary overtime working periods. their existing resources. In other words, Employees were encouraged to partici- small-sized firms have historically pro- pate in these diverse meetings and activi- gressed by exploiting improvement re- ties to transfer interdepartmental profes- sources, and tend to prioritize develop- sional technological knowledge (infor- ing technology competence, and then to mation dissemination). Subsequently, promote market competence (TPM) the knowledge could be transferred to (Nyberg, Moliterno, Hale, and Lepak, clients outside the company, and the 2014). professional executive–client relationship could also be established. The ex- T1 to M 1. ecutives’ personal technological competence was sufficient to enable them to The key for T 1 to enhance M 1 is professionally interact with the technol- the intra-OL atmosphere and mechanism ogy licensors from the major foreign within the company, in which intrade- companies; specifically, professional partmental, interdepartmental, and per- technological competence was crucial sonal knowledge should be employed to for clients in engaging in long- term col- distribute technological knowledge to laboration with the company. Director other departments, including the depart Tsai of the liquid crystal display group

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division (September 14, 2009) indicated tating competitor relationships. Manager the following: Chi of the Department of Management (June 1, 2010) indicated the following: “We are all trained as electromechanical technicians. Our boss “When we integrated the methods guided us in learning the series we were familiar with, the product connection and structural align- manufacturing processes some- ment of electromechanical devices; times became very smooth. For ex- even the staff of the Department of ample, PIM [plastic injection Sales had to have these skills. We molding] is developed through an removed and reinstalled the devic- integration of PMM [precision es when they failed to meet our ex- mold manufacturing] and IM [in- pectations and standards. For ex- jection molding]. This integration ample, magnetic traction is used to achieved favorable effects and also manufacture the patent rollers drew the attention of our Japanese used in cleanrooms, thereby pre- competitor, Shibaura Mechatronics venting dust from forming on the Corporation, and we subsequently roller caused by the mutual contact collaborated to develop sealing between the roller and the surface machines.” required for cleaning. We think ahead, and thus our clients natu- The following is a classic exam- rally become more dependent on ple of an intra-OL mechanism in which us.” T2 enhance M 2: The department of precision machinery at Neda Company trans- T2 to M 2. ferred relevant knowledge on injection molding and laser marking technology to When the manufacturing skills the departments of integrated circuit and supported the corporate competence in precision machinery (information acqui- research and design, competitors natural- sition), and the technical staff members ly pursued a horizontal alliance and col- at different levels from these depart- laboration, thereby engaging in coopeti- ments jointly developed various types of tion with the market competitors (Bada- systems (e.g., plastic injection mold racco, 1991). In Taiwan, the common components, automated semiconductor method applied for research and design punching machines, and automated sem- (T 2) to enhance competitor relationships iconductor laser marking machines) (M 2) is using strategic alliances derived through the following interaction and from joint research and development joint learning channels (information dis- (R&D) or capacity sharing. The premise semination): weekly meetings, monthly of strategic alliances in joint R&D is that meetings, gatherings after work, and firms are required to possess design, during free time when socializing with research, and development competence clients. These types of technology in- to integrate various systems (Wernerfelt, volved in new R&D (information-shared 2011), thereby enabling further social interpretation) attracted the attention of interaction with competitors and facili- Neda’s Japanese competitor Shibaura

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Mechatronics Corporation, which invited 2008) addressed the following regarding Neda to jointly develop new products. strategies for using T 3 to enhance M 3: Director Zheng of the semiconductor department (February 20, 2014) reported “Our innovation in the plastic the following: materials used for cleanrooms substantially elevated the dust-proof “Among our 600 employees, 300 capability and cleanness of the are involved in R&D, amounting to coating machines, and that is why the largest number of employees we are able to enter into and col- involved in R&D in the LCD indus- laborate with the major clients of try in Taiwan. Discussions and in- the panel and IC (integrated circuit) teractions take place during regu- industries with favorable prices for lar meetings and in private. For our products.” example, once during our free time when we were socializing with our General Manager Tsai (June 1, 2008) clients, we discussed how to as- indicated the following: semble structures and develop precise systems and machines; subse- “When I was at a lecture given by quently, we returned to our office Shin-I Lin in 2005, Kun-Yao Lee at midnight to draw the layouts. phoned me, hoping that our compa- Because of our efforts and devotion, ny could merge with Gallant Preci- our competitors who previously did sion Machining Co., Ltd. to manu- not hold us in high regard are now facture equipment supplied to local more likely to pay attention to us.” companies. Subsequently, we became the only company capable of T3 to M 3. offering services to the touch panel company TurnKey Linux, and the Taiwanese equipment suppliers process equipment services we pro- must be cost-effective and innovative in vided involved glass cutting, cham- manufacturing processes and materials fer milling, adhesive residue scrap- to be recognized in the global equipment ing, washing, patching, lighting in- supply chain, a process that may require spection, and packaging and ship- a long-term commitment (Lin, Chen, ping….” Sher, and Mei, 2010). Using the strategy of applying breakthrough process and To create an intra-OL mechanism material innovations (T 3) to facilitate in which T 3 enhances M 3, Neda man- forming customer relationships (M 3), agement led innovative learning sessions. Neda satisfied its customers and reduced This innovative learning was developed costs through modular innovations in on the basis of the existing LCD manu- manufacturing processes and materials facturing technology as well as the (Danneels, 2002), thereby developing hardware and software control technolo- connections with its crucial customers. gy (information acquisition). Specifical- Deputy Director Huang of the depart- ly, General Manager Tsai, who is an ment of sales development (June 24, innovator, led the departments of LCD,

219 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

electromechanical engineering, and ma- felt, 1984; Danneels, 2002; Helfat, 2000). terials in person to encourage brain- The key to competence development is storming among the staff in these de- to first examine the existing resource partments (information dissemination), characteristics and subsequently select and the corporate war room gradually the routes for corporate competence de- developed diverse process innovations velopment. The corporate culture of such as the automatic optical and auto- Neda Company is focused on technolog- matic test equipment (information- ical research, development, and innova- shared interpretation). For example, tion; in addition, its improvement re- Neda Company collaborated with major sources can serve as a basis for develop- companies such as Statinc Company. ing an inside-out route (IOR) for corporate competence development. Through “With regard to our internal intra-OL and exchange, various levels of QDTCS spirit, our equipment qual- technological competence can be at- ity and technology are weaker than tained and subsequently applied to facili- those of the major international tate developing different levels of mar- companies; however, we have ad- ket competence. Director Shi of the au- vantages in product delivery and tomation business division (January 31, cost. We aim to use the existing 2012) stated the following: materials (technology) in an attempt to try out different cooking “The founder of our company methods (modules) and then offer developed the first robot in Tai- new dishes (equipment) to our cus- wan, and thus we can say that tomers. Working overtime with the engineering is in our company’s boss is stressful, and executing DNA. The reason why our com- process improvements at midnight pany is able to continuously de- is tiring, but only by doing so can velop to this day is greatly relat- we accept red orders (accept or- ed to our initial mission: to com- ders at a loss), deliver black orders pete with Japanese companies in (profit from delivered orders), and automation technology!” collaborate with the major clients.” (Deputy Director Huang of Through the cases, we identified the department of equipment, the sequence and mechanism for compe- March 23, 2011) tence development. The priority for corporate competence development was Resource characteristics and selection of determined by corporate resource char- a competence development route acteristics. If a firm possesses improvement resources (IR), then it should fol- When addressing the influence of low inside-out route (IOR) of internal to resource characteristics on the selection external development. Specifically, of a competence development route, technological competence should first be scholars following the RBV have all attained and then elevated through the emphasized applying static resources to intra-OL mechanism to create innovative develop dynamic competence (Werner- products and new product markets, 220 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

thereby driving the development of cor- approach to maximizing the use of corporate market competence. If a firm pos- porate resources: viewing corporate sesses social resources (SR), then it competence as a surplus for developing should follow outside-in route (OIR) of other types of competence. However, external to internal development. Partic- this approach has not been seriously ularly, market competence should first considered in previous studies, and, by be attained and then enhanced through using the routes of competence devel- an inter-OL mechanism to develop inno- opment, the present study was the first to vative resources and new types of prod- evaluate this approach. Statements from uct technology, thereby facilitating at- a few other studies (Wernerfelt, 1984; taining corporate technological compe- Danneel, 2002, 2007; Noda and Collis, tence. 2001) related to the present study found a correlation among different types of Academic Application competence development; nevertheless, the development mechanisms indicated Scholars following the RBV have in these previous studies have never emphasized examining the course of been explored in detail. We integrated corporate growth from a resource-based the RBV and OLT to investigate the rather than a competence-based perspec- corporate experience value derived from tive. On this basis, the present study of- the various mechanisms on which differ- fered a new perspective for research in ent routes of competence develop- the field of strategic selection that can ment ultimately depend. Moreover, the especially benefit companies with lim- RBV and OLT are correlated regarding ited resources. The concept of sequen- resource allocation and competence tially developing resources forwarded in transfer; specifically, a lack of basic re- this study was similar to the concept of sources may restrict competence devel- resource allocation proposed in previous opment. Critical mechanisms and influ- studies. Similarly, this study can serve as ences are also involved in the processes a reference for firms during corporate of resource allocation and competence strategic development. When existing transfer. types of competence are applied to sequentially develop other competence We also indicated the lack of types, including advanced competence, literature on the mechanisms of compe- (Danneels, 2002), decision-makers can tence development. The concept of re- select various routes and mechanisms for source allocation, which includes a tran- corporate competence development on sition from general resources to specific the basis of the different routes derived types of competence, was addressed to from organizational learning mecha- explore cases involving competence nisms. development. We supported the OLT- proposed concept of internal and exter- Scholars adhering to the RBV nal learning because only an appropriate have indicated that, in general, corporate information learning route can facilitate resources are not fully utilized (Penrose, competence development, and the re- 1959). The present study investigated an search results corresponded with those 221 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

of March (1991). In addition to this con- develop sequentially: It should first in- cept, we also emphasized the importance vest technological resources to attain of the mechanism for competence devel- market resources and then follow an opment, for which the connection be- inside-out corporate development route. tween resources and competence was not Danneels (2002) indicated that a firm necessary but sufficient and for which should employ its existing technology the relevant mechanism was necessary competence to service its new customers and sufficient. In addition, competence and markets, a process that symbolizes was not completely developed on the the following: internal to external devel- basis of endogenous variables; numerous opment, sequential competence devel- routes required external environmental opment from technological to customer stimuli. With regard to information man- competence, and application of techno- agement, this study also revealed the logical competence to facilitate attaining segmentation between information ex- customer competence. Roth- aermel and ploration and application. To address the Deeds (2004) reported that a firm with importance of knowledge management superior technology competence should in strategy studies, future researchers commit to exploiting its manufacturing should consider viewing a firm as a bun- and marketing resources to benefit its dle of capabilities or knowledge as a promotion of commercialized products critical perspective for developing the and new market development. This find- following, all of which are crucial for ing is similar to that proposed in the pre- corporate growth: cross-departmental or sent study: technology competence cross-organizational strategic knowledge should be applied to facilitate market management, competence development competence development. groups, and interdisciplinary platforms for competence and knowledge en- Danneels (2002, 2007) regarded hancement. using corporate resources as critical for attaining corporate competence. The Firms possessing improvement present study concluded that leveraging resources should employ the route from and utilizing internal corporate resources internal to external development; specif- are the key to corporate competence ically, these firms should first develop development and indicated that connect- intrafirm technological competence to ing external corporate resources is an- promote the continuous exploitation of other option for developing corporate internal corporate resources and devel- competence. opment of new types of competence, thereby facilitating the attainment of Limitations and Future Research external market competence (TPM). Leonard-Barton (1995) and Conner Researchers and firms intending (1991) reached similar conclusions, em- to apply the results of this study should phasizing that a firm should first develop note that the resources were only divided its existing corporate technological re- into two categories according to the sources and then develop its new product characteristics of the cases and that the markets; in other words, a firm should research on competence route develop- 222 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

ment merely explored technology and can conduct in-depth investigations on market competence. The relationships the applicability of different competence among other types of resource compe- development routes and correlations tence as well as other development among resources. Identifying existing routes and mechanisms can be discussed competence types (resources) is an un- in follow-up research. Future studies can predictable process. In addition, various also consider extending the research on types of situational constraints are in- firm competence development to corpo- volved in the routes and mechanisms of rate alliances (Lane and Lubatkin, 1998) competence development, and imple- as well as to corporate mergers and ac- menting relevant systems and coordinat- quisitions (Eisenhardt and Martin, 2000; ing organizational structures and cultures Karim and Mitchell, 2000). To date, the are challenging: all of these problems confirmable research on corporate merit investigation in futrue research. growth suggests that the key to this growth is balanced development and The results of this study were connections between existing and new limited by the strong intuitive and con- competence types (Floyd and Lane, 2000; ceptual ideas involved in the cases; thus, Holmqvist, 2003). This study constitutes future researchers may consider employ- preliminary research in the strategic re- ing quantitative methods to verify the search domain, and follow-up studies research results.

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APPLICATION OF ACTIVITY- BASED COSTING ON REINFORCING STEEL BAR MANUFACTURER

Wei Tong Chen Department of Construction Engineering National Yunlin University of Science & Technology [email protected]

Chao Wei Wang Graduate School of Engineering Science and Technology National Yunlin University of Science & Technology [email protected]

Abstract Reinforcing steel bar manufacturers are important upstream material suppliers for the construction industry. While indirect costs account for a relatively low proportion of overall manufacturer costs for steel products, incorrect cost apportioning methods result in miscalculated indirect manufacturing costs, and this cost calculation issue is worth investigating. This study analyzes the traditional cost systems used by certain steel manufacturers, and subsequently introduces Activity-Based Costing (ABC) to compare the effectiveness gap of the two approaches. Results showed that companies using ABC to implement cost controls have greater clarity of the relationship between resources, operations and costs, clearly showing the consumption status of each cost, and depicting the apportionment of production costs. ABC entails complex operating procedures. For the construction industry to use ABC as a cost control system, a holistic approach should be taken to carefully assess organizational and project relevance.

Keywords: Reinforcing Steel Bar Manufacturer, Cost Control, Activity-Based Costing, Construction Industry, Construction Company

228 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Introduction Taiwan’s reinforcing steel bar industry faces increasing challenges due pri- In response to significant challenges marily to China’s increased steel produc- facing the overall construction industry, tion capacity. Currently, many steel com- many companies are cutting staff or intro- panies, especially small and medium-sized ducing other cost control measures in an firms, are experiencing the following cost attempt to reduce project operating costs. management issues: Compared to other industries, construction companies and their up and downstream 1. Unsound fundamentals, such as inac- material suppliers mostly rely on tradi- curate statistical measurements result- tional cost control methods which can ing in significant resource wastage. distort actual indirect costs, resulting in 2. Failure to implement competitive pro- incorrect apportionment of indirect costs curement price management and ina- and leading to the loss of opportunity to bility to effectively control prices for further improve cost control effectiveness. bulk procurement of raw materials and Traditional cost accounting is mainly as- fuel, thus increasing procurement sessed based on distribution, with manu- costs. facturing costs distributed to each opera- 3. Imprecise cost accounting and lack of tion. However, today direct labor is no timely feedback on production costs, longer a key cost and basing the distribu- resulting in information delays which tion of indirect manufacturing costs on adversely affect management deci- man-hours, machine-hours or direct labor sions. costs will inevitably result in distorted product costs. This study examines the reinforcing steel bar industry, using ABC cost calcu- In the 1980s, ABC was proposed as lation principles to determine indirect an improved method for indirect cost ac- costs in a case company’s actual produc- counting for the manufacturing and sertion costs and to provide a comparison vice industries, specifically to resolve with indirect product costs as determined distorted estimates of manufacturing costs. by traditional cost systems. ABC first divides the manufacturing process into a series of operations each ac- Previous Study counting for a share of manufacturing costs. Finally, a share of consumption is Traditional cost management attributed to each product for each operation for direct distribution of operation Extensive use of computerized auto- costs to the product. This not only im- mated factory equipment and software has proves the product’s cost attribution, but resulted in a major production restructur- also better reflects resource consumption, ing, making possible the rapid production thus providing more accurate cost calcula- and customization of high-quality prod- tions. ucts. This replacement of human labor by automation has greatly reduced the proportion of direct labor costs, Whereas 229 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

direct labor costs originally accounted for tion activities, taking operation activity 40~50% of product costs, today that pro- centers as the unit for accumulated costs portion has dropped to less than 10%, (“cost pools”). It then analyzes the cost while production related indirect labor drivers to serve as the basis for cost distri- costs have gradually risen. bution, calculating the cost distribution rate for each job activity. It then finally Traditional costing (TC) can obtain distributes operation activity costs to each more accurate product cost information in product (Kaplan, 1984). ABC is used to mass production and labor-intensive in- measure product cost, operational perfor- dustries (Gilligan, 1990), but rapid chang- mance, resource consumption and costs. It es and the business environment and was originally used to the distribution of fierce international competition have manufacturing costs, but the management gradually reduced the importance of such model was later found to be suitable for industries and replaced them with a large the sales and service industries (Johnson, number of small volume, high diversity 1998). and capital intensive business patterns. Mantera and Vara (2008) view ABC TC directly attributes direct material as a costing system that recognizes the and labor costs to product costs. Distribu- cause-effect relationship existing between tion of manufacturing costs is conducted cost drivers and cost activities by quanti- in two stages. First, assign costs to accord- fying the cost and performance of processing to unit organization function or operat- related activities and cost objects. ABC is ing characteristics to the corresponding used as to supplement rather than to re- cost center, and then use Volume-related place a company’s usual costing system Level to distribute average manufacturing (Garrison, et al. 2008). ABC provides costs to all products (Cooper and Kaplan, better profitability measurements and bet- 1988). In addition, Cooper and Kaplan ter-informed strategic decisions about (1991) suggested that product cost sys- pricing; product lines and market seg- tems should simultaneously focus on in- ments (Blocher, et al. 2008).Pedro et al. ventory valuation, emphasize operational (2011) implemented the ABC cost system and cost controls, and weigh product cost in a Portuguese manufacturer of metallic and profitability. Cooper and Kaplan structures to assess the real advantages (1988) and Kaplan (1988) pointed out that, and disadvantages of the ABC approach. in the perception of cost habits, TC as- Rasiah (2011) states that “the companies sumes a variety of costs are short term or that implement it run the risk of spending within a fixed range, divided into fixed too much time, effort and even money on and variable costs according to changes in gathering and going over the data.” He production or work volume. further noted that managers often over- look some activities and costs associated Activity-Based Cost with its implementation.

Activity-Based Cost first analyzes a Montes, et al. (2014) introduced a firm’s total production and support opera- new comprehensive estimate model (the 230 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

POP model) for the construction industry, Designing an ABC system requires based on the principles of the ABC meth- many different kinds of data, as explained odology and in tune with the innovative below: PBC approach. 1. Construct required information for In addition, Hsu, et al. (2011) pre- ABC sented a case study to analyze how ABC Each company should provide a list can be integrated into an ERP system to of its production process operations, cor- resolve cost problems related to of stain- porate organization chart, and staff head- less rolling steel loss and repeated proce- count by department, detailed manufactur- dures in stainless steel manufacturing. ing and marketing expenses, work skill set, Meng et al. (2007) proposed an integrative and employee salary data. production cost management method to provide accurate accounting and efficient 2. Data collection methods control of product costs in iron and steel Turney (1991) recommends collect- manufacturing. The integrative mode ing information through the following based on ABC and ERP/MES is presented methods: for cost management, which satisfies in- (1) Observation: observe work activi- formation integration centering on cost ties in practice. and integrates the flow of logistics, funds (2) Record: record the amount of and information. This approach improves time required to complete each job or task. cost management, reduces product costs (3) Survey: obtain required data. and improves firm market position. (4) Interview: interview personnel to understand company operations, prefera- Models based on the ABC methodol- bly combined with observation. ogy seem to provide improved accuracy because such models allocate all overhead 3. Data sources costs to their corresponding activities. In The above data is collected from the particular, in the construction industry following sources: (1) Accounting de- ABC identifies and classifies of all activi- partment: data related to accounting, such ties and operations required to produce as amounts, budgets, costs, manufacturing each construction work unit by analyzing costs and marketing costs. (2) Worksite or all the factors that influence its cost (Mon- operations staff: activity drivers, processes tes, et al. 2014). Advance knowledge of and procedures. (3) Information systems: these cost factors provides construction order volume, operating hours, machine companies with an essential tool to control hours, etc. and manage their economic investment on construction sites (Sánchez and Morales, ABC uses multiple elements in a cost 2002; Sánchez, 2005) and to analyze costs assignment view, a model designed ac- and benefits at the level in which process- cording to the cost attribution model pro- es are arranged. posed by Turney (1991) to define relevant factors. The constituent elements of ABC Research Methodology are defined as follows (see Figure 1): 231 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Resource: All costs required for job im- Cost Objects: Cost attribution pools, plementation. which may be products, service items or projects. Activity: A combination of tasks performed within the enterprise or organi- Resource Driver: Links between resources zation. and tasks, which indicate the resources consumed by the task. Activity Center: A collection of related tasks divided according to function or Activity Driver: Intensity and frequency procedure. measurement factors underlying the cost of the corresponding task. Cost Element: Post-task distribution of resource expenditures as cost components in a database.

Figure 1. Cost attribution model

Figure 1. Cost Attribution Model

With the definition of each operation, 2. Confirm resources (reconstructing the the following principles are used to identi- general ledger) fy, confirm and establish all resources, General operation costs are taken operations and costs for the task: from the general ledger, but because these are generally classified and aggregated 1. Identify all operation activities according to line expenditure (salaries, Identify operation activities in terms of the rent, etc.), general ledger cost items must level of detail required for the task, usual- be re-attributed to the operations center to ly to improve performance for tasks re- facilitate the distribution of operating quiring more precise work. For the pur- costs. poses of calculating the underlying product cost, this can be merged with task 3. Confirm underlying costs driver level operations for the same task. 232 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Underlying costs are the endpoint of Following these steps completes all ABC cost attribution, and this information actions to achieve ABC model settings. is the basis for management decision mak- Manufacturing costs are redistributed ac- ing. The selection of underlying costs is cording to the essence of the ABC system tied to the management strategic objec- to establish a reasonable method of manu- tives, and costs can be calculated as ex- facturing cost distribution, and to produce penditures for customers, products, ser- a cost attribution model (Figure 1). vices and contracts. Case Study 4. Establish operating centers To be able to use a more structure Background of the sample company method to express operating information, operation-specific procedures are collect- The case study company (CSC) ed together as operating centers. mainly produces Deformed Steel Bar (six specifications from D13~D32). The CSC After establishing the main compo- is organized into six departments (QA, nent factors, one can select a distribution production, operations, finance, manage- method. Costs are generally distributed ment and processing). Production and using three methods (Copper, 1992): manufacturing costs are distributed among the production, QA and finance depart- (1) Direct classification: Best method for ments. This study primarily uses data pro- resource costs attributable to the vided by these three departments. The product (e.g., direct materials, direct CSC mainly produces deformed steel bars, labor and other direct product costs) if requiring the purchase of small billets as not directly included, then select on raw materials for the production of rolled the basis of cost driver. steel and then deformed steel bars.

(2) Cost driver distribution method: Oper- The CSC primarily uses job costing ation cost drivers are treated as linked to calculate costs, with manufacturing factors for resources, operations and costs mainly divided into raw material underlying costs. The selection of costs, labor costs and manufacturing costs cost driver should consider the opti- for calculation on a monthly basis as fol- mal combination of cost size and rea- lows: sonable cost reflection. Cost drivers are generally divided into resource 1. Raw materials costs: Material costs drivers and activity drivers. are directly calculated for each product based on existing running accounts (3) Arbitrary distribution method: When and billet consumption statistics. drivers cannot be determined, arbitrary distribution avoids the waste of 2. Labor costs: Direct production costs resources. for the production of each bar size are calculated according to actual monthly production volume. Dividing labor 233 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

costs for the month y total production production volume. Labor costs are hours obtains direct labor cost as- distributed based on “time-hours”, sessed rates/hour. which is more favorable for large- diameter products, but distort the pro- 3. Manufacturing costs: The manufactur- duction costs of small-diameter prod- ing cost for each bar size are calculat- ucts. ed by dividing manufacturing cost (usually referring to manufacturing 2. Manufacturing of large-diameter costs for the previous month) by total products require greater consumption production hours (equals the manufac- of electricity and fuel, thus using iden- turing cost allocation rate). tical criteria for cost distribution would result in cost distortions. Cost data from the case study firm shows that raw material costs account for 3. Combined product characteristics and 93~95% of total costs, as opposed to parameters entail the use of different 4~5% for manufacturing costs, while la- production dies, power consumption, bor accounts for only 0.3% of total costs. fuel consumption and unit-time pro- Due to the characteristics of the manufac- duction volume. However, product tured product, there is a greater emphasis prices are kept uniform, making it im- on the distribution of manufacturing costs possible to distinguish actual labor and to prevent the continued use of incorrect resource consumption for each type of cost calculations and incorrect product product, and product pricing should be pricing. Currently, manufacturing and determined by the cost of actual pro- labor costs are distributed on a “work- duction inputs. hour” basis, and cost distribution operations for each department are conducted Interviews conducted at the case using the same approach, which can easily study company indicate that current cost result in cost distortions. aggregation methods could easily result in cost distortions. This study conducted interviews with managers in the firm’s finance and pro- Building the ABC framework duction departments, and considers relevant cost-related information to determine The following sequence defines the the firm’s cost calculations suffer from the CSC’s resources, operations, operating following issues and oversights: centers, and underlying costs. Resource categories for CSC are summarized in 1. Among D13~D32 (excluding D29), Table 1. D13 and D16 are small-diameter products, while D19, D22, D25 and 1. Resources: All economic factors used D32 are large-diameter products. Dif- in executing operations (e.g., materials, ferent diameter sizes are used to man- labor, technology, equipment, etc.). ufacture various products, which are This study is primarily concerned with produced in different units of time- indirect costs (such as indirect labor, 234 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Table 1. Resource Categories of Case Study Company

Indirect labor Overtime Pensions Meals Labor insur- Equipment Clothing Healthcare Fixed costs ance depreciation Miscellaneous Repairs Insurance Consumables Processing expenses Transport Other Amortization Variable costs Fuel Plant utilities

utilities, plant depreciation expenses, sis, reheating furnace, roughing, and amortization expenses, etc.), rather intermediate rolling and finish rolling, than directly traceable resources. cooling, cutting, and bulk packing. As shown in Figure 2, the flow also in- 2. Operations, operating centers: cludes secondary processes attributed Production processes entail the execu- to each department. Each department tion of a collection of actions. The is either a primary operating center or production flow includes: Billet analy- a secondary production process.

Figure 2. Case Study Company Processes and Operating Center

2. Underlying costs: This refers to the the output product– reinforcing steel need for any final cost calculation re- bars. lated to customers, products, medical services, contracts, etc. The case study Once the main operations are estab- firm’s products are not particularly dis- lished, we then follow the ABC imple- tinctive, thus this study suggests that mentation process to distribute related costs should be calculated according to resources by cost driver according to di-

235 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

rect classification, cost driver distribution, and arbitrary distribution. Table 2 shows The total cost for the QA, Mechani- resources and resource attribution ratios cal and Electrical Divisions is multiplied for each indirect cost. This study uses the by each distribution ratio to obtain the ABC system cost distribution concept to indirect and direct department distribution redistribute manufacturing costs and es- costs. The total amount and fixed cost tablish a reasonable manufacturing cost subtotal for the Rolling and Finishing distribution model according to a cause- Groups are summed to obtain the indirect and-effect relational structure. Ratio of and indirect total department costs. Figure operations assigned to direct Dept. from 3 shows ABC cost distribution structure of indirect Dept. is shown in Table 3. the CSC. Analysis and Discussion

Table 2. Resource Use Attribution Ratios

Department Resource Resource driver Rolling Finishing Mechanical Electrical QA Div. Group Group Div. Div. Indirect labor Direct attribution ※ 0.09 0 0.25 0.43 0.23 Overtime Direct attribution ※ 0.14 0 0 0.84 0.02 Pensions Direct attribution ※ 0.09 0 0.25 0.43 0.23 Meals Direct attribution ＊ 0.13 0 0.13 0.47 0.27 Clothing Direct attribution ＊ 0.13 0 0.13 0.47 0.27 Labor insurance Direct attribution ＃ 0.09 0 0.25 0.43 0.23 Healthcare Direct attribution ＃ 0.09 0 0.25 0.43 0.23 Equipment depreciation Asset content monthly depreciation ratio 0.03 0.67 0.04 0.04 0.22 Miscellaneous Directly attributed to each operation center 0 0.58 0.04 0.16 0.22 Distributed by number of service calls for Maintenance 0.1 0.3 0.25 0.25 0.1 each operation center Insurance Plant monthly depreciation ratio 0.03 0.67 0.04 0.04 0.22 Use by each operation center (average Consumables 0.3 0.05 0.4 0.1 0.15 consumption ratio) Processing Rolling Group 0 1 0 0 0 Transport Fuel consumption (mileage) 0 0.55 0.2 0.25 0 Other Average distribution for each department 0.2 0.2 0.2 0.2 0.2 Monthly amortization for each account Amortization 0.03 0.67 0.04 0.04 0.22 (average distribution ratio) ※: Calculated as ratio of salaries; ＊: Calculated as ratio of total personnel; ＃: Salary disbursements/month

Table 3. Ratio of Operations Assigned to Direct Dept. from Indirect Dept. 236 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Direct Depar tment (Operating C enter) Operation Usage Ratio Rolling Group Finishing Group 0.58 0.42 Billet analysis 0.15 0.087 0.063 QA Div. Inspection 0.25 0.145 0.105 Production testing 0.6 0.348 0.252 Equipment maintenance 0.7 0.406 0.294 Mechanical Die maintenance 0.2 0.116 0.084 Div. Miscellaneous equipment maintenance 0.1 0.058 0.042 Automatic control system maintenance 0.5 0.29 0.21 Electrical Power equipment maintenance 0.3 0.174 0.126 Div. Fixed lift (crane) maintenance 0.2 0.116 0.084

Completion of the aforementioned costs). Table 7 summarizes the compari- steps for cost attribution obtains unit pro- son results of unit cost b for ABC and duction volume statistics for November current System. 2014. Final cost attribution to products is divided into four parts: labor costs, mate- Table 8 shows that unit cost b with- rial costs, and fixed and variable redistrib- out material cost (that is, the sum of labor uted manufacturing costs to arrive at the and manufacturing costs) provides a final product unit price. Because two of clearer picture of resources used in prod- the products feature two different catego- uct manufacturing and highlights a larger ries, thus costs are calculated for a total of discrepancy. Compared to traditional eight products. Ration of indirect to direct methods, ABC calculations of the unit department operation distribution and the cost b for products A 1 and B 1 respectively unit cost calculation for each product are show a reduction of 14.147% and an in- shown in Tables 4 and 5, respectively. crease of 27.554% (Figure 4). This indicates that the CSC has been using an in- Product costs calculated using the correct distribution method, and more ABC system and current cost system resources and manufacturing costs should found that raw materials accounted for be apportioned to product A 1, while the 93~95% of total manufacturing costs, thus amount of manufacturing costs appor- material costs will be removed prior to tioned to product B 1 should be reduced. comparison to clarify the discrepancy of The product cost variance between the manufacturing cost distribution. Table 6 existing costing system and the ABC sys- summarizes the results of two methods tem is calculated to show that manufactur- (product unit cost discrepancy, and prod- ing costs are indeed incorrect. uct unit cost discrepancy without material

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Figure 3. ABC Cost Distribution Structure for Case Study Company

Table 4. Ration of Indirect to Direct Department Operation Distribution

ABC di s- Rolling Div. Rolling Div. Mechanical Electrical Resource tribution QA Div. (Rolling (Finishing amount Group) Group) Div. Div. Fixed cost 8,807,765 520,029 4,500,728 951,411 1,110,997 1,724,600 Indirect to direct department distribution - - 1,946,263 1,409,363 - - Manufacturing subtotal 8,807,765 - 6,446,991 2,360,774 - -

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Table 5. Unit Cost Calculation for Each Product

Fixed man u- Labor Material cost Variable elec- Variable Total manufacturing ABC manufacturing cost cost (ton) (ton) facturing cost trical cost (ton) fuel (ton) expense (ton) Type (ton) (1) (2) (3) (4) (5) (6)= (3)+(4)+(5) (7)=(1)+(2)+(3)+(4)+(5) A1 73.29 26,019.91 646.50 192.69 486.68 1325.86 27,419.06 A2 149.24 20,328.75 1316.48 283.01 774.96 2374.45 22,852.43 B1 111.75 26,517.65 985.76 131.10 288.86 1405.73 27,656.88 B2 93.83 20,224.19 827.70 415.20 1002.03 2244.93 22,362.41 C1 68.87 26,385.15 607.52 182.12 479.53 1269.18 27,698.87 D1 71.09 26,119.34 627.15 170.48 490.19 1287.82 27,397.54 E1 66.11 26,309.17 583.20 148.15 503.30 1234.65 27,026.73 F1 61.94 26,321.47 546.44 134.39 484.25 1165.08 27,002.05

Table 6. Comparison of Unit Prices Using ABC and Current System

Labor Unit production (1) (2) (3)=(1)-(2) (4)=(3)/(1) Type (hr) (kg) ABC unit cost a Current system unit cost a Difference a Unit cost difference (%)

A1 380 1,275,835 27,419 27,617 -198 -0.722

A2 284 468,254 22,852 22,558 294 1.288

B1 425 935,823 27,656 27,617 40 0.144

B2 206 540,221 22,362 22,558 -196 -0.875

C1 406.6 1,452,712 27,698 27,617 82 0.296

D1 400 1,384,393 27,397 27,617 -219 -0.801

E1 800 2,977,467 27,026 27,617 -590 -2.184

F1 1156.18 4,592,589 27,002 27,617 -615 -2.277

Table 7. Comparison of Unit Cost b for ABC and Current System

(1) (2) (3) (4) (5) (6) (7) (8) (9) Labor Material Fixed manufac- Variable Variable Total manufac- ABC unit Current Current sys- Type cost (ton) cost (ton) turing expenses electricity fuel cost turing expense cost b system unit tem unit cost (ton) cost (ton) (ton) (ton) cost a b

A1 73.29 26,019.91 646.50 192.69 486.68 1325.86 1,399.15 27617 1597.09

A2 149.24 20,328.75 1316.48 283.01 774.96 2374.45 2,523.68 22558 2229.25

B1 111.75 26,517.65 985.76 131.10 288.86 1405.73 1,517.47 27617 1099.35

B2 93.83 20,224.19 827.70 415.20 1002.03 2244.93 2,338.76 22558 2333.81

C1 68.87 26,385.15 607.53 182.12 479.53 1269.18 1,338.05 27617 1231.85

D1 71.09 26,119.34 627.16 170.48 490.19 1287.82 1,358.92 27617 1497.66 239 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

E1 66.11 26,309.17 583.20 148.15 503.30 1234.65 1,300.76 27617 1307.83

F1 61.94 26,321.47 546.44 134.39 484.25 1165.08 1,227.03 27617 1295.53 Notes: (6)=(3)+(4)+(5); (7)=(1)+(6); (9)=(8)-(2)

Table 8. Comparison of ABC and Current System Manufacturing Cost b

Labor Unit production ABC unit cost a Current system Difference a Unit cost difference (%) Type (hr) (kg) (1) unit cost a (2) (3)=(1)-(2) (4)=(3)/(1)

A1 380 1,275,835 1,399.15 1597.09 -197.94 -14.147

A2 284 468,254 2,523.68 2229.25 294.43 11.667

B1 425 935,823 1,517.47 1099.35 418.12 27.554

B2 206 540,221 2,338.76 2333.81 4.95 0.212

C1 406.6 1,452,712 1,338.05 1231.85 106.20 7.937

D1 400 1,384,393 1,358.92 1497.66 -138.75 -10.210

E1 800 2,977,467 1,300.76 1307.83 -7.07 -0.544

F1 1156.18 4,592,589 1,227.03 1295.53 -68.50 -5.583

Figure 4: Comparison of Unit Cost a and Unit Cost b

Conclusions the effectiveness of ABC with traditional cost systems. Some key findings are The work first analyzes the costs summarized as follows: control of rebar manufacturers. ABC cost methods are then introduced to compare 1. Issues related to current cost system 240 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

The case study company uses single In traditional manufacturing, manu- drivers (direct labor work-hours) as the facturing costs make up a relatively low basis for distributing manufacturing costs, proportion of total costs, thus raising a which does not take into account the caus- challenge to the appropriateness of apply- al relationship between resources and oping ABC. Using ABC to calculate product erations, thus distorting manufacturing costs for the case study company, this costs. This incorrect cost distribution re- study finds a price discrepancy of -2.2%~ sults in price discrepancies of -2.2%~ 1.2%. Although this discrepancy is small, 1.2%, with a variance of -14.1% to 27.5% it highlights the miscalculation of manu- of manufacturing costs for each product. facturing costs. This is a key consideration Due to the special characteristics of the in determining whether the case study products made, the cost distribution of the company should adopt ABC. existing cost system results in lower manufacturing costs being attributed to high- 4. ABC system disadvantages volume products, and additional costs Complex cost calculations require being attributed to low-volume products. partitioning and software requires customization to meet client requirements. Exe- 2. Calculating unit costs without material cuting manufacturing process tasks entails costs clarifies cost distribution expending manpower and work-hours, For the case study company, material and such resource consumption must be costs account for 93%~95% of total man- recorded in detail. When analyzing work ufacturing costs. Thus removing material flows, excess forms and information will costs from unit manufacturing costs can result in over- complicated cost calcula- more clearly presenting the cost distributions, thus increasing the difficulty of im- tion discrepancy. This cost distribution is plementing ABC. In addition to partition- relatively small and is unlikely to high- ing, this requires restructuring of the gen- light the correct distribution of manufac- eral ledger, followed by the analysis of turing costs, unit capacity and labor work- large amounts of cost data, which will be hours. This study proposes unit cost a as difficult to implement without the support the basis for pricing, while unit price b of computerized systems. Additionally, can provide a clearer distribution of manu- current ABC software packages are in- facturing costs. compatible with the characteristics of various industries, requiring companies to 3. Challenging the suitability of ABC in engage in extensive software customiza- traditional manufacturing tion.

References Cooper, R. & Kaplan, R.S. (1992). Activity-based systems: Measuring Cooper, R. & Kaplan, R.S. (1988). How the costs of resource usage, cost accounting distorts product costs? Accounting Horizon , Vol. 6, 1–13. Management Accounting , 20–27.

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Cooper, R. & Kaplan, R.S. (May-June A critical discursive perspective, Or- 1991). Profit priorities from activity- ganisational Science , Vol. 19, No. 2, based costing, Harvard Business Re- 341–358. view , 130–135. Meng,Q., Xue, D., Liu,X. & Gong, Y. Garrison, R.H., Noreen, E.W. & Brewer, (2007). An integrative cost P.C. (2008). Managerial accounting management method and its (12th ed.), New York: McGraw- application in iron and steel industry, Hill/Irwin. 2nd International Conference on Innovative Computing, Information Gilligan, B. P. (April 1990). Traditional and Control, China. cost accounting needs some adjustments as easy as ABC, IE , 34–38. Montes, M.V., Falcón, R.M. & Arellano, A. R. (2014). Estimating building Hsu, W.H., Hsu, Y.P. & Lin, L.Y. (Sep- construction costs by production pro- tember 2011). Process improvement cesses, The Open Construction and of ERP cost module- A case study of Building Technology Journal , Vol. 8, stainless rolling steel corporation, 171–181. Soochow Journal of Economics and Business , Vol. 74, 55–82. Pedro, M.I., Kengue, M.F. & José, A. (September 2011). The ABC meth- Johnson, H.T. (1998). Activity-based in- od– Proposed implementation in a formation: A blueprint for worldwide structural steel industry. Internation- information, Management Account- al Journal of Latest Trends in Fi- ing , 20–30. nance & Economic Sciences , Vol.1, No. 3, 130–136. Kaplan, R.S. (January-February 1988). One cost system isn’t enough, Har- Rasiah, D. (2011). Why activity-based vard Business Review , 61–66. costing is still tagged behind the traditional costing in Malaysia, Journal Kaplan, R.S. (1984). The evolution of of Applied Finance and Banking , Vol. management account, The Account 1, No. 1, 83–106. Review, Vol. 3, 390–418. Sánchez, D. (2005). Kim, Y.W., Han, S., Shin, S. & Choi, K. Modelospresupuestarios y de cálculo (2011). A case study of activity- de costesen las empresas construc- based costing in allocating rebar fab- toras: principalescondicionantes para rication costs to projects, Construc- suimplantación. Estimate models in tion Management and Economics , construction companies: main deter- Vol. 29, 449–461. minantsfor their introduction, in IX CongressoInternacional de Custos, Mantera, S. & Vaara, E. (2008). On the Florianópoli . problem of participation in strategy: 242 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Sánchez, D. & Morales, A. (2002). El sistemainformativogerencialen la empresaconstructora. The management information system in the construction company, in X Encuentro de Profesores Universitarios de Contabilidad, Santiago de Composte- la .

Toledano, D.S. (2005). Modelos presupuestarios y de cálculo de costes en las empresas constructoras: Principales condicionantes para su implantación. The IX Congresso Internacional de Custos , Florianópolis.

Turney, P.B.B. (1991). Common cents: The ABC performance breakthrough, how to success with activity-based costing. Hillsboro, OR: Cost Tech- nology.

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THE MODEL OF DYNAMIC CAPABILITY IN SUPPLY CHAIN

Chih-Hsing Wang Center for General Education, TransWorld University, Taiwan, R.O.C.

Wen-Liang Liu Department of Marketing Management, TransWorld University, Taiwan, R.O.C.

Ching-Jun Cheng Center for General Education, TransWorld University, Taiwan, R.O.C.

Kai-Ping Huang* Department of Business Administration, Fu Jen Catholic University, Taiwan, R.O.C. *Corresponding Author: [email protected]

Abstract

Supply chain plays an important role in the impact on business competitiveness. How- ever, the process in between is just like a black box. Although there were some scholars noticed that supply chain relationship would influence dynamic capability, very few of them investigated the dynamic capability from the angle of interactive intensity in supply chain, and the understanding of the important intermediate factors toward the dynamic capability model in supply chain was insufficient. For this reason, the research had the manufacturing industry in Taiwan as the research subject and adopted two intermediate influential factors, which were relationship trust and relationship commitment, to explore the influence between interactive intensity and dynamic capability in supply chain in depth. The research structure and proposed hypotheses were verified and tested with structural equation modeling. The research revealed that interactive intensity in supply chain had a positive influence on the dynamic capability of an organization through the intermediate variables: relationship quality - relationship trust and relationship commitment.

Keywords: Supply Chain, Interactive Intensity, Relationship Quality, Dynamic Capability

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Introduction termediate variable according to the view of social exchange theory and the From the past researches on integrated model based on relationship supply chain relationship, it can be was established for the investigation of found that many relation variables the dynamic capability generated from were relationship qualities which are inter-organizational interaction. very important to the establishment and maintenance of a long-term rela- In summary, the research was ex- tionship, such as trust or commit- pected to further explore the impact of ment. Many scholars also mentioned interactive intensity among supply trust or commitment would influence chain organizations on the develop- the relationship behavior of supply ment of future relationship quality as chain (Lee, 2016; Firouzi, et al., well as on dynamic capability through 2016; Luzzini, et al., 2015; Brinkhoff, relevant literature review concerning et al., 2015); that was, the higher of relationship management among or- the trust and commitment among ganizations. Therefore, the purposes of supply chain partners could reduce this study are as follows: more uncertainty for future cooperation and increase the compatibility of 1. To develop a supply chain dynamic one another. It could also generate capability model based on relationship. interactive behaviors which was favorable to a long-term relationship. 2. To explore the interactive intensity among supply chain organizations However, the past researches on and the impact on dynamic capabil- dynamic capability in supply chain ity through relationship quality were rarely based on “interactive in- (trust and commitment). tensity” and were also short of integrated dynamic capability models in Theory and Hypotheses supply chain to explore the impact of interactive intensity and relationship The interaction among supply quality among supply chain organiza- chain organizations is a kind of social tions on dynamic capability. For this exchange activity (Wu, et al., 2014; reason, the research set off from the Tanskanen, 2015). The circulation of angle of interactive intensity in supply knowledge or resources is generated by chain. The relationship quality (trust the interactive behavior while new and commitment) was used as the in- knowledge or resource is exactly what

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needed for dynamic capability. In fact, viders, users would be able to receive the social exchange among supply more, wider, more precise and more chain members is similar as the goods time-effective information of their tar- exchange in economics and the differ- get demand relatively. Kellogg and ence is the reward or return of social Chase (1995) made interactive theory exchange might not be money or tan- and operation definition complete gible material. In view of this, the re- when exploring the topic related to the search was based on the theory of so- relationship between interaction and cial exchange with the input of two service quality, and they also devel- intermediate variables, “trust” and oped three dimensions relevant to in- “commitment”, to explore the impact teraction measurement: communica- between interactive intensity in supply tion time, information richness and chain and dynamic capability in depth. level of intimacy. When the ratio of the percentage of time that supply chain After the literature review, it is partners actually appeared during the believed that the interactive intensity whole transaction behavior is higher, it of supply chain partners would influ- means higher level of interaction be- ence the establishment of relationship tween both parties of transaction; in quality, and it would have a further other words, the interaction among impact on dynamic capability through supply chain partners should be fo- the medium of relationship quality cused on the times engaged with inter- (trust and commitment). The research action. model was established according to this, as shown on Figure 2-1. Interactive intensity refers to direct face-to-face or indirect contact Prior research pointed the quality frequency between sales representa- of the interaction in between would be tives and customers in order to achieve higher when both interactive parties the goal of their own or for the enter- opened their mind to each other and prise (Puccinelli, et al., 2015; Ra- provided the needed information to the maseshan, et al., 2013). Williamson other party (Mirkovski, et al., 2016; (1983) indicated that interactive inten- Cavusoglu, et al., 2012). For example, sity reflected the various efforts done when information users provided more by sales representatives in order to background details to information pro- keep an open and communicative

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Figure 2-1 Research Mode with customers, and it also repre- sults shape out different relationship. sented a kind of commitment for the In other words, events are the foun- relationship between each other. Pri- dation for relationship establishment, or research suggested that high inter- and the interactive intensity devel- active intensity could improve the oped from it is not only an interac- flexibility of negotiation between tive concept but the foundation for both parties (Mohr & Nevin, 1990; supply chain partners to establish Peters & Fletcher, 2004). It can be and maintain their relationship. To known from the idea that interactive sum up, the research defined “inter- intensity emphasized the process of active intensity” from the recognized interaction; that was, the interaction interaction level on the customer’s recognition of buyers toward the side, meaning the interactive fre- sellers, the service providers. In ad- quency with another party sensed by dition, Grönroos (2004) mentioned an organization in supply chain. that interaction process is the core of relationship marketing, and there is a Prior research expressed that in- series of act, episode, sequence and teractive intensity was also the key relationship included during the variable which influence whether the whole process. Two individuals in- relationship between both buying and teract with each other in the same selling parties would be maintained in event, and the result will be generat- long term (Crosby, et al., 1990; Chia & ed during the process; different re Dibb, 2014). Customers’ expectation

247 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

toward the guarantee and responsibility Prior research pointed that the es- of sales representatives would be grad- tablishment of trust was the important ually fulfilled through interaction, and factor on the process of social ex- the relationship between both parties change (Ertürk & Vurgun, 2015; would be further strengthened (Krish- Schoenherr, et al., 2015). Social ex- namurthy & Kumar, 2015; Sweeney, et change theory assumed the exchange al., 2016). Williamson (1983) believed process would develop as time goes by, interactive intensity also represented a and both the exchanging parties would commitment to the relationship be- show their dependability for this ex- tween both parties other than reflected change relationship by the approach of the efforts done by both supply chain relationship commitment (Birtch, et al., partners in order to maintain an open 2016). Furthermore, trust is the signifi- and communicative channel. Interac- cant factor to improve knowledge shar- tive intensity has positive influence on ing efficiency of both sides, and it emotional development or social links could increase positive delivery of the among supply chain partners. As a knowledge (Ozlati, 2015; Olander, et result, supply chain partners should al., 2015). According to the explana- provide the other party a cozy feeling tion on social exchange theory in rela- just like at home and develop good tion to the relationship between trust social relationship in order to make the and commitment, the consequence of relationship stronger, longer with the mistrust would result in the decrease of quality improved. To sum up, the fol- commitment to the exchange relation- lowing hypotheses were proposed: ship between both sides and turned the original long-term exchange relation- H1: The higher the interactive intensi- ship into a short-term transaction rela- ty among supply chain organiza- tionship (Paillé, et al., 2015; Tan- tions is, the higher level of rela- skanen, 2015). Furthermore, prior re- tionship trust between supply search highlighted trust was the crucial chain organizations is. factor to determine a commitment relationship (Altinay, et al., 2014). It is H2: The higher the interactive intensi- believed trust would bring high value ty among supply chain organiza- to the partnership, and therefore the tions is, the higher level of rela- participants from both parties would tionship commitment between like to make commitments to the rela- supply chain organizations is. tionship between each other (Søder- berg, et al., 2013). Based on the

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reasons mentioned above, it is assumed that the trust level among supply chain H4a: The higher the level of “relation- organizations would influence the rela- ship quality” among supply chain tionship commitment among the or- organizations is, the stronger the ganizations. Thus, the hypothesis H3 “dynamic capability” of an or- of the research was proposed as fol- ganization is. lows: Based on the perspective of social H3: The higher the trust level among exchange theory, prior research sug- supply chain organizations is, the gested that relationship commitment stronger relationship commitment and trust can be used as the main vari- among supply chain organizations is. ables when shaping the concept of re- Prior research suggested that dy- lationship quality, and this elaborated namic capability was a set of regula- that the maintenance of relationship tions or processes that guided resource was very crucial (Tsai & Hung, 2016; allocation (Pettus, 2015; Macpherson, Ferro, et al., 2016). It meant the belief et al., 2015). The support of resources in which partners would like to main- or capabilities from partners could be tain the relationship and would fulfill retrieved through a strengthened sup- short-term sacrifice to achieve long- ply chain partnership. With key com- term profits. In addition, relationship plementary resources, following abili- trust and relationship commitment are ties in resource integration, allocation, adopted as dimensions for relationship distribution, renew, learning and re- quality in supply chain researches (Fer- sponse of an organization can be im- ro et al., 2016; Ponder, et al., 2016; proved. Furthermore, enterprises en- Dedahanov & Rhee, 2015). Therefore, hanced their relationship between one the hypothesis H4a can be further di- another through supply chain networks vided into hypothesis H4 and hypothe- and strategic alliances so as to increase sis H5. the competitiveness of suppliers, and the higher quality level of supply chain H4: The higher level of “relationship relationship is, the more positive influ- commitment” among supply chain ence on dynamic capability it may organizations is, the more the “dynam- cause (Jin & Edmunds, 2015; Scholten ic capability” of the organization will & Schilder, 2015; Pereira & Vilà, be enhanced. 2016). Therefore, hypothesis H4a was proposed as follows: H5: The higher level of “relationship

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trust” among supply chain organiza- and inappropriate questions so that the tions is, the more the “dynamic capa- content validity of the questionnaire bility” of the organization will be en- could be increased (Churchill, 1979). hanced. The modification of questions in the questionnaire has been conducted by Research Method four industrial experts and three scholars. 30 vendors were randomly sam- Measurement of research variables pled from the research population of the top 1000 manufacturers in Taiwan. All of the observation variables in Each of the vendors was given a ques- the research were based on relevant tionnaire for pretesting for the modifi- literatures plus the reference of the cation of wordings in order to elimi- advanced opinions from three scholars nate semantic obstacles. and four industrial experts for the adjustment and modification of some of A self-report scale was adopted as the content and wordings with the ex- the measurement tool in the research. pectation of being able to meet the Podsakoff and Organ (1986) believed context and theoretical foundation of the problem of common method vari- the research. All latent variables were ance would possibly occur when using measured by several observation vari- a single questionnaire to collect data ables. Subjects answered their level of from the same group of subjects for agreement toward each observation data analysis considering the data in- variable according to the questions. cluded independent and dependent The adopted scale for the measurement variables at the same time. Therefore, was Likert 7-point scale (1: totally the research took the opinion of Pod- disagree; 7: totally agree). The opera- sakoff, MacKenzie and Lee (2003) as tional definitions and the sources of the reference and adopted precautions reference of the variables in the re- in advance in order to avoid this kind search are sorted as in the following of problem. For example, (1) Respond- Table 1. ent’s information concealment: the research used anonymous approach Questionnaire design and sampling and respondent’s questionnaire was put into envelopes and sealed before col- The pretesting of the question- lecting it back in order to earn the trust naire was conducted in order to modify of the respondents and increase the its content and avoid unclear sentences authenticity of the questionnaire re-

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sponded; (2) Separation approach of answering each question; (3) “Nega- data collecting: the research applied tive worded design”: the research used psychological isolation, and it was negative worded items on the questions marked on the questionnaire that each for the dimension of “trust”; (4) “Item question was independent to avoid context arrangement”: used simple, answer deviation when respondent clear and easy items for understanding

Table 1. Operational definitions and sources of reference of the variables in the research

Research Operational Definition Items Reference Variable Whether supply chain Interactive organizations feel get- 4 ques- Crosby et al. (1990) intensity ting constant interaction tions with the other party. Supply chain organizations have positive expectation toward the Bettencourt (1997), Crosby et al. Relationship 4 ques- behavior of the other (1990), Doney and Cannon trust tions side and have the mental (1997), Morgan and Hunt (1994) status of willing to un- dertake risk actively. Supply chain organiz a- tions have psychological Bettencourt (1997), Crosby et al. attachment toward rela- Relationship 4 ques- (1990), Doney and Cannon tionship and are willing commitment tions (1997), Morgan and Hunt (1994) to exchange relationship

maintenance with temporary sacrifice. Our company’s integration on internal and external resource, the effi- Dynamic ciency and effectiveness 3 ques- Teece et al. (1997), Prahalad and capability of the resource applications Krishnan (2008) tion, and the ability to respond external changing environment rapidly. and avoid asking two questions or us- The research population was ing two negative items in the same the top 1,000 manufacturers in Tai- question. wan surveyed by CommonWealth Maga-zine in 2013, and the investi-

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gated units were the relationships egory in Taiwan by Liu (2010) in between manufacturers and their “Chiao Ta Management Review”. suppliers while the respondents were Therefore, we surmised that the reset to be senior managers or senior sponse rate of the research was rea- procurement specialists who were in sonable and acceptable. In order to charge of related business with sup- review the potential non-response pliers. For the benefits of follow-up bias and the representativeness of research and analysis, each of the samples, the suggestion of Arm- participated enterprises were re- strong and Overton (1977) was fol- quested to select one most crucial lowed, and the early-response sam- supplier (with highest purchasing ples (64 copies) and late-response amount or with highest interactive samples (63 copies) from the 127 frequency) as the respondent of effective questionnaires were exam- questionnaire. The research random- ined based on employee number, ly selected 1/2 of them, 500 enter- annual revenue of the enterprise and prises, as the samples; the question- years of establishment with Chi- naire was mailed or delivered by square test. The test result revealed staff in person to the accountable there was no significant difference person (President or General Manag- between the two batches of the reer) of the enterprise to forward to the sponse samples, and it was assumed manager in purchasing department that non-response questionnaire who was in charge of contacting the would not cause much deviation to supplier or to the senior specialist the research result. Among the effec- who was responsible for purchase tive responded samples, over 88.3% execution for the response according of the respondents occupied im- to the experience of working with portant positions in the company most crucial supplier in terms of with the titles of CEO (4.5%), vice business. The questionnaires were president (10.8%), assistant general provided on August 15 th , 2015 and manager (23.4%), manager (38.9%) 127 valid copies of questionnaire and senior procurement specialist were retrieved after the question- (10.7%). naires were mailed or delivered and three times of follow-up with the Measurement model effective response rate of 25.4%. It was close to the response rate of Goodness-of-fit of the model and 28% in the research in the same cat- theoretical model were verified and

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tested with LISEREL8.3 in the re- proaches, and conduct correlation search. The default maximum likeli- analysis on the measurement. The rel- hood method (MLE) was used to esti- evance should be low. In accordance mate parameters when conducting data with the suggestion of Baozzi and Yi analysis. In terms of applying MLE (1988), the research selected four most data, the assumption of multi-variate indicative indicators to evaluate the normal distribution must be met and measurement model. The detailed de- the sample size should not be too small; scription was as follows: 100-150 must be requested for proper use (Ding, et al., 1995). After elimin- (1) Reliability of individual ques- ating invalid samples, there were 127 tion items: this indicator was to evalu- valid samples, and Q-plot distribution ate the factor loadings from measuring slope of standardized residuals didn’t variables to the potential variable and violate normal assumption; it met the test statistical significance of each var- above requirement. The main purpose iable loadings. In factor loadings anal- of measurement model analysis was to ysis, significance test was done by t- confirm two things: (1) verifying test; the greater the t value was, the whether each measuring variable in the stronger the intensity was. It would be model was able to measure potential seen as significant if the absolute value variables correctly under the consid- of t was over 1.96. Table 2 showed the eration of whole model; (2) examining standardized factor loadings for all the whether it was loaded with complicat- individual variable were above 0.5 ed measuring variables in different with the t value greater than 1.96, and factors (Anderson & Gerbing, 1988). it revealed the measuring quality of the That was to test the two important con- whole measuring questionnaire was struct validities in the model: the con- good; the relevance among the ques- vergent validity - it referred to measure tions was very high. variables from relevant variables with different approaches for measurement, (2) Composite reliability of latent and the relevance between each other variables: the composite reliability of must be high, which meant the meas- latent variables was the composition of urement result should be the same reliability of all the measuring vari- when measuring the same thing; Dis- ables, and it represented internal con- criminant validity - measure two dif- sistency of construct indicator; A high- ferent concepts, no matter it was done er reliability revealed higher internal by the same approach or different ap- consistency of these indicators. The

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suggested value by Fornell and Larcker and it represented good internal con- (1981) was over 0.6. Table 2 showed sistency in the research model. the composite reliability of each variable in the measurement model was (3) Average variance extracted of above 0.6. The composite value of the latent variables: average variance ex- research was between 0.87 and 0.91, tracted was the calculation of average

Table 2. Analysis results of the measurement model

Dimen- Question order on the questionnaire Factor Standard T Com- Variance

sion Loadings Error value posite Extracted

Relia-

bility Interactive I1：Supply chain partners visited or concerned each other 0.61 0.17 12.4 0.87 0.72 Intensity regularly or irregularly (I) I2：Supply chain partners provided continuing long-term 0.61 0.19 9.9 after-sales service I3：Supply chain partners cared about each other and pro- 0.63 0.22 11.9 vided assistance when encountering problems I4：Supply chain partners coordinated with each other and 0.60 0.19 10.3 went through different time together Trust T1 ：Happy to assist supply chain members 0.66 0.12 15.3 0.91 0.76 (T) T2 ：Treated supply chain members sincerely 0.72 0.10 14.1 T3 ：Actively assisted supply chain members for problems 0.67 0.12 16.2 T4 ：Would not do anything harm to supply chain members 0.61 0.25 12.2 Commit- C1 ：Able to provide our company proper knowledge feed- 0.77 0.16 8.9 0.89 0.83 ment back (C) C2 ：Able to fulfill the knowledge of our company 0.68 0.17 13.1 C3 ：Able to provide the information that our company 0.75 0.14 15.5 wants C4 ：Able to offer a stage for company to devote knowledge 0.70 0.18 17.4 Dynamic DC1 ：Our company is very efficient in integrating and 0.73 0.14 15.8 0.90 0.74 Capability applying both internal and external resources (DC) DC2 ：Our company is very effective in integrating and 0.72 0.209 14.3 applying both internal and external resources DC3 ：Our company has a rapid responding ability to the 0.68 0.19 11.4 external environment change χ2/d.f.=1.82; AGFI=0.80; NFI=0.90; NNFI=0.91; CFI=0.92; RFI=0.91; RMSEA=0.073 explanatory from each measuring vari- the standard value must be greater than ables of latent variables to the variance 0.5. According to Table 2, the variance of the latent variable. If the average extracted value of each variable in variance extracted was higher, then it measurement model was all greater showed higher reliability and conver- than standard value of 0.5 (0.72-0.83), gent validity of the latent variable. and it represented good reliability and Fornell and Larcker (1981) suggested convergent validity of the latent varia- 254 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

bles in the research. other dimensions. Table 3 showed the value met the evaluation standard (4) Discriminant validity: dis- above and was with good discrimi- criminant validity referred to the nant validity. The minimum dynamic different measuring question items capability (AVE value = 0.56) of used to measure different dimensions. average variance extracted was used According to Fornell and Larcker as an example, and the maximum (1981), the method used to measure squared value of correlation coeffi- discriminant validity was that the cient between dynamic capability average variance extracted of each and other dimensions was 0.18, dimension should be greater than the which was less than 0.56, meeting squared value of the correlation coef- the evaluation standard. ficient between the dimension and

Table 3. Variance extracted and squared value of correlation coefficient

Dimension Interactive Trust Commit- Dynamic intensity ment Capability Interactive 0.64 intensity Trust 0.12 0.78 Commitment 0.22 0.17 0.65 Dynamic capa- 0.06 0.17 0.18 0.56 bility Note: The diagonal shows the average variance extracted of the dimension and non-diagonal was the squared value of correlation coefficient of each dimension.

The Structural Model

Table 4. Each indicator goodness-of-fit of structural model

Goodness-of-fit Suggest Source of reference of the suggested value Measurement Structural index value Model Model χ2/d.f. ≦ 3.00 Bagozzi and Yi (1988) ; Hair et al. (2005) 1.82 2.46 AGFI ≧ 0.80 Hair et al. (2005) 0.80 0.80 NFI ≧ 0.90 Hair et al. (2005) 0.90 0.90 NNFI ≧ 0.90 Bentler (1990) ; Hair et al. (2005) 0.91 0.91 CFI ≧ 0.90 Bentler (1990) ; Hair et al. (2005) 0.92 0.92 RFI ≧ 0.90 Bentler (1990) ; Hair et al. (2005) 0.91 0.92 RMSEA ≦ 0.08 Hair et al. (2005) 0.073 0.077

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Structural model analysis included the Table 5 and Figure 2 showed the goodness-of-fit analysis of the research path relationship among each model and the explanatory of the dimension estimated through SEM. Its whole research model. The paper re- path value followed the standardized ferred to the opinions of Bagozzi and coefficient and verified the five hy- Yi (1988) and Hair et al. (2005) and potheses in the research model. All of selected 7 indicators for the goodness- them achieved the significant level of of-fit evaluation for the whole model α=0.01. including Chi-square test and its degree of freedom (χ2/d.f.), goodness-of- Conclusion and Recommendations fit index after adjustment (AGFI), NFI, NNFI, comparative fit index (CFI), With the thoughts concerning RFI and root mean square error ap- supply chain rising, enterprises no proximation (RMSEA). The result was longer only focus on the dynamic ca- summarized as in Table 4. Bagozzi and pability inside the enterprise but ex- Yi (1988) suggested the value of Chi- pand themselves to the external square test and its degree of freedom sources of dynamic capability among (χ2/d.f.) should not be greater than 3 supply chain members. The research (Hair, et al., 2005). The value of Chi- followed the fundamental spirit of so- square test and the degree of freedom cial exchange theory and used com- (χ2/d.f.) of the research was 2.46, mitment and trust of relationship quali- which was smaller than the suggested ty as the intermediate variables to in- value, 3, and it revealed that it was an vestigate the influence of interactive acceptable model while other indexes intensity among supply chain members all met the suggested values of most on the dynamic capability of the organization. Through SEM test, the five researches of AGFI ≧ 0.80 (0.80) , hypotheses proposed in the research were all supported by empirical data. NFI ≧0.90 (0.90) , NNFI ≧ 0.90 The research results showed the higher the interactive intensity among supply (0.91) , CFI ≧ 0.90 (0.92) , RFI ≧ 0.90 chain organizations was, the higher the relationship trust level and relationship (0.92) , RMSEA ≦ 0.08 (0.077) . commitment between the supply chain Overall, the research model and obser- organizations were; the higher the trust vation data of the research had excel- level among supply chain organiza- lent goodness of fit. tions was, the stronger the relationship

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commitment between supply chain ganizations would enhance the dynam- organization was. Higher relationship ic capability of the organization. commitment among supply chain or-

Table 5. Verification of research hypotheses

Hypothesis Path T Coefficient Value The higher the interactive intensity among supply chain organization, the H1 higher the relationship trust level between supply chain organizations 0.14** 6.96 is. The higher the interactive intensity among supply chain organizations, H2 the higher the relationship commitment level between supply chain 0.18** 7.17 organizations is. The higher the trust level among supply chain organizations, the stronger H3 0.17** 8.64 the relationship commitment between supply chain organizations is. Higher the relationship commitment among supply chain organizations H4 0.15** 4.17 would enhance dynamic capability of the organization. Higher the trust level among supply chain organizations would enhance H5 0.21** 9.32 dynamic capability of the organization.

Relationship Quality

R2=0.34

Commitment 0.15** 0.18** R2=0.14

Interactive intensity 0.17** Dynamic capability 0.14** Trust 0.21**

R2=0.27

*: p < 0.05 ，**: P < 0.01

Figure 2. Hypothesis verification result

Higher trust level among supply chain how interactive intensity in supply organizations would enhance the dy- chain influences the dynamic capabil- namic capability of the organization. ity of supply chain members and enhances relationship commitment and The empirical research results trust among supply chain members by could help enterprises to understand controlling interactive intensity in sup-

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ply chain from different sources or degrees as well as further increase dy- The research took the top 1,000 namic capability of supply chain mem- manufacturers in Taiwan as the empir- bers. Based on the research results, ical subjects, and it would need further enterprises may find that the inter- empirical research to gain generalized active intensity among supply chain results for other industries or small- members seems to be the important medium enterprises to refer. Besides, source of external dynamic capability the research belongs to the category of among supply chain members. For cross-sectional study, and it should not many enterprises, the finding should be be used to discuss the longitudinal ef- a very important inspiration. In other fectiveness between supply chain in- words, the interactive intensity among teractive intensity and the generation supply chain members seemed to have of dynamic capability. It is expected effectiveness of significant enhance- that continuing efforts would be made ment toward the generation of external by scholars for following researches in dynamic capability of supply chain future. members.

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SHEAR BANDING INDUCED SEISMIC BUILDING TILTING FAILURE AND ITS CONTROL

Tse-Shan Hsu1 Department of Civil Engineering Feng-Chia University Taiwan, R.O.C. [email protected]

Cheng-Chieh Ho Ph.D Program in Civil and Hydraulic Engineering Feng-Chia University Taiwan, R.O.C.

Abstract

Building tilting failure is often caused by the reduction in foundation bearing capacity during an earthquake. However all the seismic design specifications for buildings are focused only on the vibration resistance of upper structural elements, such as columns, girders, plates and walls. Thus new buildings with improved seismic resistance still suffer tilting failure during an earthquake even with magnitude smaller than the design one. Based on the above-mentioned finding, the authors of this article point out that seismic design of buildings should emphasize the ground modification for foundation soil. An easier way to achieve this is to replace inferior foundation soil with graded gravel, and to carry out verification tests with respect to selected materials.

Keywords: seismic building tilting failure, shear banding, ground modification.

Introduction varying deformation pattern gives way to highly localized deformations in the It is generally noticed that when form of shear bands (Rice, 1977) as ductile solids such as rocks, overly shown in Figure 1. Such a phenomenon consolidated clays, granular materials, can be understood as the instability in polymers, and structural metals are the macroscopic constitutive descrip- deformed sufficiently far into the plas- tion of inelastic deformation of the tic range, a smoothly and continuously material. Specifically, instability is 264 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

understood in the sense that the consti- mation can be incipient in a planar tutive relations may allow the homoge- band under conditions of continuing neous deformation of an initially uni- equilibrium and continuing homogene- form material to lead to a bifurcation ous deformation outside the zone of point, at which nonuniform defor- localization (Rudnicki and Rice, 1975).

Figure 1. Shear banding occurred during earthquake (Zhushan, Taiwan)

When sliding occurs within a Figure 2) will cause ground to vibrate shear band, the alternate occurrence of (as shown in Figure 3). In other words, slip-stick phenomenon (as shown in

Figure 2. Stick-slip type of starting and kinetic friction (Reproduced from Lambe and Whitman, 1969) 265 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

2 2

0 5 10 15 20 -1 Elapsed time (sec.) Acceleration (m/sec )

-2

Figure 3. Illustration of ground acceleration duration curve related to ground vibration the actual earthquake effects include tilting failure of school buildings of localized shear banding and compre- Kwangfu Junior High School in Tai- hensive ground vibration. chung City are as shown in Figure 4; due to the severity of such a failure, On September 21, 1999, the Chi- this campus has been preserved as the Chi earthquake measuring 7.3 on Rich- 921 Earthquake Education Park. ter scale took place in Taiwan. The

(a) front side view

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(b) rear side view (cited from Peggy, 2013)

Figure 4. Localized tilting failure of school buildings in Kwangfu Junior High School after the Chi-Chi Earthquake

Currently most structural engi- without shear banding. Therefore, the neers believe that the cause of failures investigation of actual cause of school for school buildings is excessive building tilting failure becomes rather ground vibration. As a result, most important for the purposes of earth- efforts after the Chi-Chi earthquake are quake education and damage mitiga- focused only on improvement of vibration. tion resistance for upper structural elements. However, if the cause of tilting Applicability Of Structural Analysis failures for school buildings is exces- Models sive ground vibration, theoretically that should happen to all school buildings Building structural analysis mod- because they were all suffering from els are all in simplified forms so far. excessive vibration during the earth- The physical model of school building quake. Yet the fact is proven otherwise. as shown in Figure 5a includes founda- It is shown in Figure 4 that tilting fail- tion soils, foundations, columns, gird- ure of school building took place local- ers, plates and walls; however, the ly at the severely fractured hanging structural analysis model does not in- wall along the side of thrust fault scarp clude foundation soils and foundations, due to shear banding rather than the which are replaced by spring simulated unfractured foot wall on the other side foundation soils (Note: this simulation could be neglected), and the boundary 267 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

Figure 5a. Illustration of physical model

Figure 5b. Illustration of structural analysis model (bottom of column set as hinge)

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Figure 5c. Illustration of structural analysis model (bottom of column set as fixed end)

Figure 5. Comparison between physical building model and structural analysis model condition at the bottom of column is of Taiwan, 2011); and the design of set as hinge (as shown in Figure 5b) or lower structural elements (including fixed end (as shown in Figure 5c). foundation soils and foundations) must also meet building foundation design Under the action of external specifications (Construction and Plan- forces, when the bottom of column is ning Agency, Ministry of the Interior set as hinge, the structural analysis of Taiwan, 2001), which requires the model as shown in Figure 6b is only safety factor of ordinary foundation applicable to the simulation in which bearing capacity to be greater than 3.0, there is no displacement at the bottom and the safety factor of seismic founda- of column; when the bottom of column tion bearing capacity to be greater than is set as fixed end, the structural analy- 1.2. sis model as shown in Figure 6c is only applicable to the simulation in which The Impact Of Foundation Shear Fail- there is no displacement nor rotation at ure On Overall Structural System the bottom of column. Currently it is the structural engi- In order to ensure that the condi- neer who is responsible for the building tions set in structural analysis of physi- structural analysis and design, while cal building will not be changed under the geotechnical engineer is only re- the action of external forces, the design sponsible for the soil properties and of upper structural elements must meet ordinary foundation bearing capacity; building earthquake-resistant design in such analysis and design model, the specifications (Construction and Plan- structural designs of all buildings did ning Agency, Ministry of the Interior not take into consideration the change 269 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

of soil properties during an earthquake lieve that the cause of such damage is and the impact resulted from greatly the insufficient vibration resistance of reduce foundation bearing capacity. the upper structures. With such focus on the enhancement of vibration re- After the Chi-Chi earthquake, sistance of upper structural elements, even though it is proven that the safety the impacts of significant displacement factor of foundation seismic bearing and rotation of foundations on overall capacity less than 1.0 has led to tilting building structural behavior have not failure of building along with the foun- be considered at all. dation shear failure (as shown in Figure 6), most structural engineers still be-

(a) general shear failure

(b) local shear failure

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Figure 6. Various types of foundation shear failures

As for buildings currently in com- liquefaction of soil during earthquake pliance with new seismic design speci- could induce shear failure of founda- fications, theoretically there should not tion soils, and the position of bottom of be any tilting failure during an earth- column will be changed along with quake measuring less than 7.3 on Rich- displacement or rotation of foundation. ter Scale with the vibration resistance Under such circumstance, the structural of all upper structural elements greatly analysis model as shown in Figure 5b improved. However, there were indeed or Figure 5c cannot be used to simulate quite a few new buildings suffering this kind of structural failure behavior. from tilting failure during the Meinong Therefore, when the structural analysis Earthquake measuring 6.4 on Richter model as shown in Figure 5b or Figure Scale took place on February 6 th , 2016, 5c is used by structural engineers, they which includes a new building with the must meet the specifications of founda- construction of main structure com- tion seismic capacity safety factor in pleted just six months earlier (as shown building foundation design specifica- in Figure 7). tions (Construction and Planning Agency, Ministry of the Interior of When one side of a building sub- Taiwan, 2001) in addition to meeting sides along with a sinking foundation, the specification of building seismic the cause of tilting failure is definitely design specifications (Construction and related to the shear failure of founda- Planning Agency, Ministry of the Inte- tion soils; any loosening, softening, or rior of Taiwan, 2011).

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(a) Before earthquake (cited from Google Earth, 2016)

(b) After earthquake

Figure 7. Newly decorated building which was severely damaged during Meinong Earthquake

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Case Analysis building foundation as shown in Figure 4 have been analyzed, in which the soil Analysis conditions properties and strength parameters come from the test result based on on- In this paper the safety factors of site sampling (as shown in Table 1). seismic bearing capacity of school

Table 1. Test result of soil properties and strength parameters

Test item Test result

3 Wet unit weight γ wet 18.2kN/m

Peak cohesion c p 3.2kPa o Peal angle of internal friction φ p 32 Residual cohesion c 0kPa r Residual angle of internal friction φ o r 29

As for the foundation of that rived from the correlation (as shown in school building, the width B is 2m, and Table 2) between the actual measure-

the foundation depth Df is 1.5m. The ment (as shown in Table 3) of Wufeng difference between the properties of Elementary School Seismic Station No. hanging wall soil and foot wall soil is TCU065 during 921 Earthquake and resulted from shear banding. Residual the PGA and seismic coefficient provided by Water Resources Agency of cohesion c and residual angle of in- r MOEA. Under various load combina- ternal friction φ must be used for r tions, the adopted design load capacity hanging wall soil due to the effect of q is 300kN/m 2. shear banding, while peak cohesion design

c and peak angle of internal friction p Analytical method φ p must be used for foot wall soil due to no effect of shear banding. The hori- As for square foundation, equation zontal seismic coefficient k is 0.237, 1 can be used to calculate the ultimate h seismic bearing capacity of foundation and the vertical seismic coefficient kv qult ,E : is 0.1185; the seismic coefficient kv is 0.1185; the seismic coefficient is de-

1 q = c N s e + qN s e + Bγ N s e ….. (1) ult ,E cs c c qs q q 2 γ s γ γ

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Where c represents cohesion, q represents pressure of cover soil above bot-   1.1  2   9kh  tom surface of foundation, γ represents eγ = 1( − kv )exp −   .….. (4) 3  1− kv  unit weight of soil, N , N and N cs qs γ s represent the static soil bearing capacity In three aforementioned equations, parameters of elongated foundation pro- D = C /( γ H) , and H is the depth of posed by Meyerhof (1951, 1963); sc , sq sliding failure surface from ground surface. When the foundation burial depth and sγ are the shape correction factors proposed by Hansen (1970); and the is known as Df , H can be calculated as: seismic correction factors ec , eq and eγ 5.0 B  π  proposed by Budhu and Al-Karni (1993) H = D + exp  tan φ  … f  π φ   2  are: cos  +   4 2  1+D ec = exp (− k3.4 h ) ………… (2) (5)

  k 2.1    3.5 h  eq = 1( − kv )exp −   ….. (3)   1− kv 

Table 2. Correlation between horizontal PGA and horizontal seismic coefficient kh (cited from Water Resources Agency of MOEA, 2008)

Horizontal PGA kh <0.12g 0.10 0.12g~0.18g 0.10~0.12 0.18g~0.50g 0.12~0.16 0.50g~0.80g 0.16~0.24 >0.80g 0.24

Note: kv = kh × R , R ≥ 5.0 .

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Table 3. Monitoring result of TCU065 seismic station during 921 Earthquake (cited from Central Weather Bereau, 1999)

Monitoring item PGA East -West Direction 0.79g North -South Direction 0.57g Vertical Direction 0.26g

Analysis result and discussion non of foundation at foot wall remaining safe during earthquake. When the The safety factors of seismic bear- foundation is located at hanging wall, ing capacity of foundations located at the analysis reveals that the safety fac- hanging wall and foot wall are as tor of seismic foundation bearing ca- shown in Table 4. When the foundation pacity is FS E = 67.0 << 2.1 , thus lead- is located at foot wall, the safety factor ing to shear failure of foundation soil. of seismic foundation bearing capacity This could be the main cause of tilting is FS E = 28.1 > 2.1 , and this analysis failure for the school building shown in result is consistent with the phenome- Figure 4 after the Chi-Chi earthquake.

Table 4. Analysis results of safety factors of seismic bearing capacity of foundations located at hanging wall and foot wall

Foundation Analysis co n- c (kPa) φ k k q (kPa) FS location dition h v ult E Without shear Foot wall 3.2 o 0.237 0.1185 384 1.28 banding 32 Hanging With shear 0.0 o 0.237 0.1185 201 0.67 wall banding 29

Control Method For Seismic Building that there is no shear failure of founda- Tilting Failure tion.

As for buildings in compliance For verification of suitability of with building seismic design specifica- selected graded gravel, a large-scale tions, in order to prevent buildings direct shear test apparatus proposed by from suffering tilting failure due to the author and a special test method foundation shear failure, the inferior can be used to quickly obtain the shear foundation soil can be replaced by strength parameters required by this graded gravel within the range of depth analysis, and then the analysis result of H obtained from Equation 5 to ensure safety factors of foundation seismic bearing capacity can be used to deter- 275 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

mine whether or not the selected grad- A large direct shear test apparatus ed gravel is suitable. proposed by the authors is as shown in Figure 10, in which the cross-sectional The proposed large direct shear test area of shear box is 30.5cm x 30.5cm, apparatus the maximum height of upper box is 15cm, and the maximum height of lower box is 20cm.

Figure 10. Schematic diagram of the proposed large direct shear test apparatus

The maximum particle size of the lower shear box above ball bearing graded gravel is 2.54cm based on the to move to the left or to the right for reliability of test result. The direct pushing or pulling shear test. shear test apparatus can be used for direct shear test via pushing to the left The upper shear box will be lifted or pulling to the right. After specimen during the application of shear stress; and measuring instrument are properly for minimizing such lift, one set of installed, the vertical force can be ap- vertical rod and load cell will be in- plied to the loading plate via oil pump stalled on both sides of upper shear box; and pressure supplying rod until the the additional vertical force generated numerical value displayed by load cell during this test will be displayed by 1 reaches the predetermined vertical these two load cells; therefore, during force. And then the readings of load the process of applying horizontal dis- cell 2, load cell 3, LVDT 1 and LVDT placement, the actual vertical force is 2 are zeroed. The transmission and the sum of vertical forces displayed by gearbox can be used to control the load cell 1 to load cell 3 as shown in speed of horizontal displacement, and the control valve can be used to control 276 The International Journal of Organizational Innovation Vol 9 Num 1 July 2016

3 placement, the induced angle of inter- Figure 3 as V , and the horizontal ∑ n nal friction (φ ) of test specimen can be n−1 i force T is the numerical value dis- calculated as: played by the upper shear box load cell installed on the reaction wall. There- fore, with a specific horizontal dis- 3 −1   φi = tan  H ∑Vn  ….. (6)  n−1 

The special test procedure value, the normal stress will vary along with the horizontal displacement; with Step 1: Carrying out the first pushing minimized lift of upper box, this test shear test with horizontal dis- result will become more and more rea- placements from 0mm to sonable and reliable. 36mm (curve number 1).

Step 2: Carrying out the first pushing Definitions of peak and residual angles shear test with horizontal dis- of internal friction placements from 36mm to - 36mm (curve number 2) 1. The peak angle of internal friction

φ p : Step 3: Carrying out the second push- In curve number 1, the maximum ing shear test with horizontal value of φ is defined as the peak displacements from -36mm to i 36mm (curve number 3). angle of internal friction φ p . Step 4: Carrying out the second pushing shear test with horizontal 2. The residual angle of internal fric- displacements from 36mm to - tion from pushing shear test φr, push : 36mm (curve number 4) In curve number 3 and curve num-

ber 5, the minimum value of φ is Step 5: Carrying out the third pushing i shear test with horizontal dis- defined as the residual angle of in- placements from -36mm to ternal friction of pushing shear test

36mm (curve number 5). φr, push with horizontal displacements greater than 32mm. Typical test results 3. The residual angle of internal fric- When the large-scale direct shear tion from pulling shear test φ : test apparatus is used for the test, the r, pull In curve number 2 and curve num- typical test results of graded gravel are as shown in Figures 11~13; it is worth ber 4, the minimum value of φi is noting that, instead of being a constant defined as the residual angle of

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Figure 11. The variations in normal stress with horizontal displacements

Figure 12. The variations in shear stress with horizontal displacements

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Figure 13. The variations in induced angle of internal friction with horizontal displacements

internal friction of pulling shear The particle size distribution

test φr, pull with horizontal dis- curves of three different graded gravels placements less than -32 mm. selected, S1, S2 and S3, are as shown in Figure 14. The physical properties 4. The adopted residual angle of in- and soil classifications of these three different graded gravels are as shown ternal friction φ : r in Table 5. It appears that S1 is with

φr = Min ( φr, push , φr, pull ) the highest gravel content, and S3 is with the lowest gravel content; and S1 Selected graded gravel is with the lowest uniformity coefficient, and S3 is with the highest uniformity coefficient.

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Figure 14. Particle size distribution curves of three different graded gravels

Table 5. Physical properties and soli classifications of three kinds of graded gravels

Specimen S1 Specimen S2 Specimen S3 Dry unit weight, kN/m 3 17.65 17.75 18.33 Content of gravel (%) 65.96 40.99 28.78 Content of sand (%) 34.04 59.01 71.22 Coefficient of uniformity, Cu 3.56 7.73 18.9

Test result of large-scale direct shear the peak angle of internal friction of S1, o o o test apparatus S2 and S3 are 48 1. , 42 7. and 38 8. respectively, while the residual angles The results of large-scale direct o o of internal friction are 30 0. 33 2. and shear test of three different graded , o gravels are as shown in Table 6; where 34 5. respectively.

Table 6. Peak and residual internal angles of friction obtained from tests

Specimen φ φ φ φ number p r, push r, pull r S1 48 1. o 33 4. o 30 0. o 30 0. o S2 42 7. o 33 4. o 33 2. o 33 2. o S3 38 8. o 34 5. o 35 4. o 34 5. o

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Suitability verification of three kinds of from the analysis with the three kinds graded gravels of selected graded gravel as the foundation soil are as shown in Table 7. It For the foundation at top wall af- is shown in Table 7 that, except for the fected by shear band, the residual angle safety factor of seismic bearing capaci- of internal friction φr (as shown in ty of S3 being FS E > 2.1 , the 之 FS E Table 6) obtained from the test must be of the other two kinds of graded gravel adopted for the foundation seismic are both less than 1.2, thus proving that bearing capacity analysis. only S3 is the suitable foundation soil material. The safety factor of foundation

seismic bearing capacity FS E obtained

Table 7. The analysis results of safety factors of seismic bearing capacity with graded gravel as the top wall foundation soil

Foundation Residual angle of internal qult ,E (kPa) FS E soil friction φr S1 300. o 214 0.71 S2 332. o 333 1.1 S3 345. o 415 1.4

Conclusions duce ground vibration; therefore, in addition to the effect of ground vi- Buildings in seismic zone coun- bration on upper structural ele- tries will face the direct challenge of ments, the influence of shear band- earthquake within their service lives. If ing on safety factor of seismic the cause of building tilting failure foundation bearing capacity should obtained from investigation is not in also be taken into consideration. compliance with the fact, these buildings will still suffer from tilting failure 2. When the safety factor of seismic during subsequent earthquake even if foundation bearing capacity is less the seismic resistance of upper struc- than 1.0, the building will suffer tural elements is greatly improved. from tilting failure no matter how Therefore, the research results of this high the seismic resistance of upper paper will support the following four structural elements is. Therefore, conclusions: the enhancement of seismic foundation bearing capacity must be the 1. Shear banding is resulted from lo- emphasis of building seismic de- calized deformation, and it will in- sign.

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3. Using graded gravel as foundation of seismic foundation bearing ca- soil can prevent shear banding dur- pacity can be used to confirm the ing an earthquake from inducing suitability of graded gravel as foundation shear failure thus avoid- foundation soil. ing tilting failure of a building. Acknowledgement 4. The large-scaled direct shear test apparatus proposed by the author The support of Water Resources and the special test method can be Bureau, Taichung City Government, adopted to quickly obtain the shear under Project No. WP104-005 is grate- strength parameters of graded grav- fully appreciated. el. Then the resulting safety factor

References Lambe, T. W., and Whitman, R. V., Budhu, M. and Al-Karni, A., “Seismic Soil Mechanics, John Wylie and Bearing Capacity of Soils,” Ge- Sons, Inc.. New York. 1972. otechnique, Vol. 43, No. 1, pp. 181-187, 1993. Meyerhof, G. G. “The Ultimate Bear- ing Capacity of Foundations,” Central Weather Bereau, website: Geotechnique, Vol. 2, No. 4, pp. http://www.cwb.gov.tw/V7/earth 301-331, 1951. quake/rtd_eq.htm, 1999. Meyerhof, G. G. “Some Recent Re- Construction and Planning Agency, search on the Bearing Capacity Ministry of the Interior of Tai- of Foundations,” CGJ, Ottawa, wan, Building Earthquake- Vol. 1, No. 1, pp. 16-26, 1963. Resistant Design Specifications, 2011. Peggy, “921 Earthquake Education Park”, website: Construction and Planning Agency, http://peggy900316.blogspot.tw/2 Ministry of the Interior of Tai- 013/04/blog-post_25.html, 2013. wan, Building Foundation Design Specifications, 2001. Rice, J. R., “The Localization of Plastic Deformation,” in Theoretical and Google Earth, Website: Applied Mechanics, Proceedings, http://www.google.com/earth/ind 14th International Congress of ex.html, 2016. Theoretical Applied Mechanics, ed. Koiter, W. T. , North-Holland, Hansen, J. B., “A Revised and Extend- Inc., Amsterdam, pp. 207-220, ed Formula for Bearing Capaci- 1977. ty,” Danish Geotechnical Insti- tute Bulletin, No. 28, Copenha- gen, pp. 5-11, 1970.

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Rudnicki, J. W., and Rice, J. R., “Con- ditions for the Localization of Deformation in Pressure- Sensitive Dilatant Materials,” Journal of the Mechanics and Physics of Solids, Vol. 23. pp. 371-394. 1975.

Water Resources Agency of MOEA, Technical Directions for Hydrau- lic Structures Inspection and Safety Evaluation (Reservoir and Water-Conveying Structures), 2008.

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EXAMINING THE MEASUREMENT INVARIANCE ACROSS GENDER FOR THE PART OF RESPONSIVENESS IN SERVQUAL SCALE IN RETAIL BUSINESS OF TAIWAN

Dr. Yu-Jia Hu Department of Marketing and Distribution Management Fortune Institute of Technology, Taiwan [email protected] Dr. Feng-Ming Liu Department of Business Administration Fortune Institute of Technology, Taiwan [email protected] Dr. Ling-Ching Su Department of Marketing and Distribution Management Fortune Institute of Technology, Taiwan [email protected] Ph.D Student Jian-Hao Huang Graduate Institute of Travel and Tourism Management National Kaohsiung University of Hospitality and Tourism, Taiwan [email protected]

Abstract

The purpose of this quantitative study was to examine the measurement invariance across gender for the part of Responsiveness in SERVQUAL Scale for retail chain stores business in Taiwan. The SERVQUAL Scale has been known a successful instrument for measuring service quality in current business studies. However, the issues of measurement invariance across groups in SERVQUA have received very few considerations. Literature also revealed there is the significant relationship between gender and service quality. The population in this research was selected as customers from four retail chain stores in Taiwan, resulting in 200 individual surveys for analysis. The results indicated the Taiwan version of Responsiveness 5-item scale achieved strict measurement invariance across gender. The property of factor loading, structural covariances and measurement residuals across gender were invariant. Fi-

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nally, this research generated the recommendations for retail chain stores business in Taiwan and suggested future scholar studies.

Key Words: service quality, SERVQUAL, responsiveness, measurement invariance, retail chain stores, Taiwan

Introduction and ing power for those years, and the stud- Literature Review ies for gender differences in consumer behavior have become important topic Service quality has been described for current academy researcher and as the critical factor to sustain the pro- marketing administrators in business. ficiency for company development. Research by Meyers-Levy and Mahe- The most prominent questionnaire for swarm (1991), and Mitchell and Walsh measuring service quality – SERV- (2004) revealed gender difference will QUAL Scales was created by Par- lead to different buyer behavior. Mitch- asuraman, Zeithaml, and Berry (1988). ell and Walsh (2004) also claimed gen- The SERVQUAL Scales provided five der differences resulted in different dimensions to measure the service decision making process. These theo- quality, such as tangible, responsive- ries and studies suggested that there is ness, reliability, empathy, and assur- the significant relationship between ance. Even though this questionnaire gender and service quality. has applied broadly to perform studies for service quality in industries or Therefore, this research expanded countries, only some studies have ex- previous research and applied SEM amined the issues of the measurement approach to evaluate the measurement invariance for SERVQUAL Scale. In invariance across gender for the com- addition, numerous researchers (Baird ponent of Responsiveness in SERV- 1976, Blustain 2000, Canary and Hause QUAL Scale in retail chain stores busi- 1993) have suggested theories for gen- ness of Taiwan. der difference in numerous facets on psychology and manner, such as social Research Purposes talents, communications, work ap- and Hypotheses proaches and so on. Based on the previous studies and People also pay much attention on theories, the purposes and the signifi- the issue of the increasing woman buy cance for this research were: (a) to examine the measurement invariance

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across gender for the part of Respon- vice., (c). Service personnel provide siveness in SERVQUAL Scale in retail various service for different customers. chain stores business of Taiwan, (b) to (d). Service personnel is polite., and (e). have the recommendations for manage- Service personnel handle the problem rial application of retail chain stores in on time manner. business, and (c) to identify areas for future scholarly inquiry. Byrne (2010) Previous studies by Hu (2011, 2012, suggested the tests for multigroup in- and 2013) have demonstrated the valid- variance are: (a) factor loadings, (b) ity and reliability for this scale are rea- factor covariances, and (c) structural sonable and acceptable. The customers regression paths. Following this con- from four retail chain stores in the cept, the researcher proposed three hy- Kaohsiung city of south Taiwan attend- potheses as follows. ed this research. The pretest was conducted with Item Analysis in 50 sam- Hypothesis 1: Assuming the ples. The researcher applied the method measurement weights for 5 of random sampling. Each store ran- items is variant across gender. domly invited volunteer customers who shopping in stores to participate the Hypothesis 2: Assuming the questionnaire survey. The total number structural covariances for 5 of valid responses was 200 (not includ- items is variant across gender. ing 15 invalid response), providing an adjusted response rate of 93%. Hypothesis 3: Assuming the measurement residuals for 5 Analysis of Results items is variant across gender. The research unitized Structure Methodology Equating Modeling (SEM) by Analysis of Moment Structure (AMOS) software The five items of Responsiveness in to test the model structure and hypothe- this research were little modified from ses in this study. The factor analysis for the SERVQUAL Scales (Parasuraman five Responsiveness items was showed et al, 1988). Following Five Likert as Figure 1. The outcomes of multi- Scale: strongly disagree, disagree, neu- sample analysis for the unconstrained tral, agree, strongly agree, the five and the three constrained models were items were: (a). Service personnel can listed as Table 1. The unconstrained correctly answer my question., (b). model showed an acceptable baseline Service personnel provide me kind ser- model for both male and female. The

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.28 .24 .30 .24 .27 e1 e2 e3 e4 e5 1 1 1 1 1 Chi-square=32.030 degree of freedom=5 normed chi-dquare=6.406 RES5 RES4 RES3 RES2 RES1 GFI=.941 AGFI=.824 CFI=.920 1.00 1.14 1.05 1.01 .87 RMSEA=.165 .25 ＲＲＲ

Fi gure 1. Factor Analysis for Responsiveness Items

Table 1. Model Fit Indexes for Models

Model χ2 DF P χ2/DF NFI CFI RMSEA Unconstrained 31.247 10 .00 1 3.125 .913 .937 .104 Measurement weights 33.777 14 .00 2 2. 413 .906 .941 .084 Structural covariances 33.803 15 .00 4 2.254 .905 .944 .080 Meas urement residuals 37.517 20 .0 10 1.876 .895 .948 .067

Table 2. Nested Model Comparisons

Model DF χ2 P Measurement weights 4 2.530 .639 Structural covariances 1 0.026 .872 Measurement residuals 5 3.715 .591

multi-sample analysis also showed the results for nested model comparisons indexes of model fit for three con- were showed in Table 2. The χ2 strained models (measure, weights, difference test ( χ2(4)= 2.530, p>.05) structural covariances, and measure- between baseline model and con- ment residuals) across gender, and strained model for measurement these indexes indicated the three con- weights was not significant, indicating strained models were accepted. The test the factor loadings across gender in this

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scale were invariant. In addition, the Meyers-Levy and Maheswarm (1991), result of the χ2 difference test between and Mitchell and Walsh (2004) sug- baseline model and constrained model gested gender differences will lead to for structural co-variances ( χ2(1)=.026, dissimilar buyer actions. Although this p>.05) was not significant, indicating model was fully measurement invari- that, aside from the factor loadings, ance, Milfont and Fischer (2010) structural co-variances of this scale was claimed full measurement invariance is invariant across the gender. Finally, the questionable to hold in reality. Based result of χ2 difference test for meas- on the research by Hu (2014), the part urement residuals ( χ2(5)=3.715, p>.05) of Tangibles in SERVQUAL Question- was not significant, indicating the naire is partial measurement invariance measurement residuals across gender in across the gender. Those studies re- this scale were invariant, too. The find- vealed the researcher should keep strict ings did not support H1, H2 and H3. manner to conduct research for multiple items in questionnaire for the issues Conclusions and Suggestions of measurement invariance across group. And this study suggested the The results indicated this Taiwan effect of measurement invariance version of Responsiveness 5-item across genders is not significant when scales of SERVQUAL Questionnaire apply the part of Responsiveness in are strict measurement invariance SERVQUAL Scale for conducting across the gender, including invariance studies, specially exploring the service of factor loadings, structural co- vari- quality for the retail chain stores busi- ances and measurement residuals. The ness in Taiwan. results did not consist with the views of

References Byrne, B. M. (2010). Structural Equa- tion Modeling With AMOS: Basic Baird, J. E., Jr. (1976). Sex differences Concepts, Applications, and Pro- in group communication: A review gramming, 2 ed, Routledge, Taylor of relevant research, Quarterly & Francis Group, NJ. 197-200. Journal of Speech, 62, 179-192. Canary, J. D., & Hause, S. K. (1993). Is Blustain, S. (2000). The new gender there any reason to research sex dif- wars, Psychology Today, 33, 1-5. ferences in communication? Com-

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munication Quarterly, 41(2), 129- Males’ and Females’ Processing 144. Strategies, Journal of Consumer Research, 18(1), 63-70. Hu, Y. J. (2014). Assessing Measure- ment Invariance Across Gender In Milfont, T. L., & Fischer, R. (2010). The Version Of The Part Of Tangi- Testing measurement invariance bles In Servqual Scale For Retail across groups: Applications in Chain Stores Business In Taiwan, cross-cultural research, Internation- International Journal of Organiza- al Journal of Psychological, 3(1), tional Innovation , 7(1), 181-187. 110-121.

Hu, Y. J. (2013). Using structural equa- Mitchell, V. W., & Walsh, G. (2004). tion modeling to evaluate a con- Gender differences in German consumer behavior model: the case of sumer decision making retail chain stores in Taiwan, Inter- styles, Journal of Consumer Behavior, national Journal of Organizational 3(4), 331-346. Innovation, 6(1), 121-127. Parasuraman, A., Zeithaml, V. A., & Hu, Y. J. (2012). The moderating effect Berry, L. L. (1988). Communica- of brand equity and the mediating tion and control processes in the de- effect of marketing mix strategy on livery of service process, Journal of the relationship between service Marketing, 52(1), 36-58. quality and customer loyalty: The case of retail chain stores in Taiwan, International Journal of Organiza- tional Innovation, 5(1), 155-162.

Hu, Y. J. (2011). How Brand Equity, Marketing Mix Strategy and Ser- vice Quality Affect Customer Loy- alty: The Case of Retail Chain Stores in Taiwan, International Journal of Organizational Innova- tion, 4(1), 59-73.

Meyers-Levy, J., & Maheswaran, D. (1991). “Exploring Differences in

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