THE INTERNATIONAL JOURNAL of ORGANIZATIONAL INNOVATION

VOLUME 6 NUMBER 4, APRIL 2014

Table of Contents

3. Information Regarding The International Journal Of Organizational Innovation

4. Information Regarding The 2014 International Conference on Organizational Innovation

12. The 2013 IJOI Board Of Editors

Page: Title: Author(s):

14. A Special Section On: Research At The University Of The District Of Columbia, USA, Under The Supervision Of Professor Sergey Ivanov

14. Applied Organizational Research: Scholarship At The School Of Business And Public Administration, University Of The District Of Columbia, Sergey Ivanov, Ph.D.

17. Satisfying Internal Customers: How To Improve Facility Management Quality At A University, Eddie D. Lawton Jr., Sergey Ivanov, Ph.D.

22. Enhancing Productivity Of A Firm: Case Of A Research Organization In Uganda, Victoria Nambwaayo, Sergey Ivanov, Ph.D.

29. Why Small Organizations Turn Down Research Requests: A Case Study, Giresse Pembele, Sergey Ivanov, Ph.D.

33. Applied Organizational Study Of Free Jobs Training Program In Washington, DC: Research Case On Structuring Of Workforce Development In The Capital Of The United States, Raysa Leer, Sergey Ivanov, Ph.D.

46. Challenges Of A Small Business In Thailand: How To Reposition For Growth, Treerakit O-Phartkaruna, Sergey Ivanov, Ph.D. The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 1

51. Growth Strategies For Very Small Organizations: A Case Study Of A Very Small Entrepreneurship, Bello Bello, Sergey Ivanov, Ph.D.

54. Applying Business Lessons To Education: Mentoring As Job-Embedded Professional Development, Nathan R. Templeton, Joshua W. Tremont

60. Construct Of Educational Information System’s Using Willingness Model: An Extended Application Of Technology Acceptance Model, Tung-Liang Chen, Hsu-Kuan Liu, Shu A-Mei Lin

72. The Influences Of Ethical Climate On Turnover Intention: The Mediating Role Of Emotional Exhaustion, Feng-Hua Yang, You-Shiun Tsai, Kun-Chih Tsai

90. The Effect Of Financial Management On The Performance Of Non-Profit Organiza- tions: An Empirical Study In Haiti, Shu-Hui Su, Guych Nuryyev, Withz Aimable

99. Relationships Among Work Value, Quality Of Work Life, And Turnover Intension In Nurses In Yunlin, Taiwan, Ruey-Juen Chen, Chen-Wei Yu, Cheng-Min Chao, Bor-Wen Cheng

109. An Empirical Study Of The Organizational Culture, Leadership, And Firm Performance In A Vietnam Family Business Nguyen Huu Dan, Yunshi Liu, Ping-Fu Hsu, Sheng-Hung Yu

122. Impact Of Leisure Farm Resource Base On Organizational Commitment And Performance Ye-Chuen Li

135. Integrating The Concept Of Customer Value Into ISD Projects: An Action Research On ISD Projects For Fusion Cuisine Restaurants Ying-Kuang Lu, Bao-Chang Ju

149. How To Successfully Convert To ICD-10-CM/PCS? The Experience Of Hospitals In Taiwan Chia-Ke Lee

160. A Study Of The Practical And Theoretical Applications Of Second-Order Customer Perceived Value Analysis Model Horng-Cherng Shiau

174. Customer Expertise, Affective Commitment, Customer Participation, And Loyalty In B & B Services Ching-Chow Yang, Ping-Shun Chen, Yu-Hui Chien

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 2 184. Nostalgia, Perceived Value, Satisfaction and Loyalty of Cruise Travel, Ming-Yuan Wang, Wei-Chin Li, Mei-Ju Chou, Chien-Jung Huang

192. Tourists’ Perceptions Of Tour Guide In Visiting Taiwan, Yi-Hsien Lin, Yu-San Ting, Yu-Lun Hsu, Cha-Chun Wu

203. Analyzing Innovation Policy Dimensions And Contexts: In The Empirical Cases Of Taiwan And Singapore Chia-Han Yang, Chih-Chieh Lin, Grace T.R. Lin

217. Testing The ISCST3 Model On Air Pollution From Road Vehicles In Taoyuan, Taiwan Chih-Rung Chen, Yii-Der You, Kai-Min Wang

236. The Effects of Perceived Uncertainty On Tourists' Decision-Making To Agritourism In Taiwan Tsai Fa Yen, Chien Jen Hung, Hsiou Hsiang J. Liu

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Information Regarding:

The International Journal of Organizational Innovation (IJOI), The 2014 International Conference on Organizational Innovation , and The International Association of Organizational Innovation (IAOI).

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 associations & 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 the publisher of this journal. It also holds an Annual Conference (See Below). For more information on the Inter- national Association of Organizational Innovation , go to: http://www.iaoiusa.org

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 3 The International Conference on Organizational Innovation (ICOI)

The 2014 ICOI Conference will be held in Manila, Philippines at De La Salle University, August 12-14, 2014. For more information on the conference and to submit a paper or to register for the conference, go to: http://www.iaoiusa.org/2014icoi/index.html and see the next pages.

The 2015 ICOI Conference location is Jogia/Jogjakarta, Indonesia. Jogja is a famou- http://www.iaoiusa.org/2014icoi/index.htmls tourist destination after Bali. For more information, please visit http://www.yogyes.com/ Airlangga University will be the Host Univer- sity.

2014 INTERNATIONAL CONFERENCE OF ORGANIZATIONAL INNOVATION (ICOI) AUGUST 12 – 14, DE LA SALLE UNIVERSITY, PHILIPPINES

INFORMATION PACK For more information on the conference and to submit a paper or to register for the conference, go to: http://www.iaoiusa.org/2014icoi/index.html

The Republic of the Philippines is a sovereign nation in Southeast Asia, lying in the west side of the Pacific Ocean. The Philippines is the 64th-largest country in the world, an archipelago of 7,107 islands that are categorized broadly under three main geographical divisions: Luzon, Visayas, and Mindanao.

Area Population Capital City 300,780 sq km 96 million Manila

Its neighbors are Taiwan, which lies north across the Luzon Strait; the Celebes Sea separates it from other islands of Indonesia to the south; to the east it is bounded by the Philippine Sea; the island of Borneo lies southwest across the Sulu Sea; and Vietnam, Country which sits west across the South China Sea. The two official languages are Filipino and English. Filipino, which is based on Tagalog, is the national language. English is widely used and is the medium of instruction in many institutions of learning. The eight major dialects spoken by majority of the Filipinos are Tagalog, Cebuano, Ilocano, Hiligaynon or Ilonggo, Bicol, Waray, Pampango, and Pangasinense.

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 4 People & Languages Approximately 80% of Filipinos is Roman Catholic, making the Philippines the only predominantly Christian country in Asia. There is also a significant number of Protestants, Born-Again Christians, and Muslims. The currency in the Philippines is the Peso (PhP) and the Centavo. 100 centavos = 1 PhP. Coin denominations are: 1, 5, 10, and 25 centavos, P1, P5, and P10. Bill denominations are: 20, 50, 100, 200, 500 and 1,000 pesos.

Foreign currency may be exchanged at the airport, hotels, banks, authorized money changers, and many large department stores. Other than these places mentioned, exchanging money is strongly Currency & Foreign Ex- discouraged. As of January 2014, the conversion of US$1 is ap- change proximately 45.50 pesos. Almost all major establishments: department stores, retail outlets, restaurants, hotels, and resorts accept major credit cards including Visa, MasterCard, and American Express. Personal checks drawn on foreign banks are generally not accepted. Private and government offices are open from 8:00 AM to 5:00 PM weekdays and 8:00 AM till 12noon on Saturdays for private offices. Most banks are open from 9:00 AM till 3:00 PM Mondays through Fridays, but some banks located inside malls are open daily, with trading hours same as the mall. Automated Teller Machines (ATM) operate 24 hours daily. When banking in the Philippines, it is advisable to have your passport with you for identification.

The post offices are open from 9:00 AM to 5:00 PM weekdays only. Trading Hours Stamps for postcards are usually available from the Concierge desk or souvenir shops at most major hotels. NOTE: The usual lunch hour is 12noon to 1:00 PM. Most offices are closed, but business establishments remain open. TIME DIFFERENCE Local time is GMT plus 8 hours.

ELECTRICITY 220 volts, AC 60 cycles is the common standard. Two-pin flat blade plugs are used. 110 volts AC may be available in major hotels and in selected areas.

UNIT OF MEASURE The Metric System is used in trade and legal transactions.

TELEPHONE, MOBILE PHONE, INTERNET Telephone service is modern and you can direct dial anywhere in the world. Public phones require a minimum of one 5-peso coin for Practicalities a local call. International calls can also be made using phone cards. Short-term mobile phone cards can be easily purchased. Most hotels offer computers with internet connectivity for free. In- ternet cafes and free WIFI are gaining popularity in commercial establishments.

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 5 Visitors to the Philippines must hold a valid passport or travel document with a minimum validity of six months beyond the intended visiting period and present a return or outward bound ticket to their country of origin or to a next country of destination.

Do you need a VISA to enter the Philippines? Starting August 1, 2013, nationals from 151 countries may enter the Philippines without a visa and stay for a maximum of thirty (30) days. Chinese Nationals, including citizens for Hong Kong and Passport/Visa Taiwan, will need a special permit. To see the complete list of 151 countries, visit http://itsmorefuninthephilippines.com/download/151_coun- tries_covered_in_30_days_visa_free_entry.pdf

WATER Metropolitan Manila and many key cities and towns have ample supply of clean water, but in most places, tap water is not potable. For drinking purposes, it is strongly recommended that bottled water be used, and is widely available. It is also advisable to ask first, if the water used for ice in restaurants is purified.

CLIMATE & WHAT TO WEAR The summer months of March to May are hot, humid, and dry, with temperatures reaching a high of 37 oC, while the months of De- cember, January, and February are cool (early morning temperatures in the low 20’s). The rainy season is from June to October and the months between July and September are characterized by typhoons.

Mosquito repellent or long-sleeved tops are good to have against bites. Sunscreen and sun-block lotion are good to prevent sun burns.

Light, casual clothes are worn for comfort in tropical weather. Shorts, flip-flops & short-sleeved shirts are the typical outfit for mall or sightseeing outdoors. Jeans/slacks, a shirt, a modest dress, and closed shoes are the typical outfit for watching movies or going to churches or museums: For formal occasions, men are Health & Safety encouraged to wear the Philippine Barong Tagalog. For women, cocktail dresses or long gowns are accepted and are more contemporary.

HEALTH REGULATIONS The Philippines is fortunate to be free from epidemics. The country remains safe from SARS, bird flu and foot-and-mouth diseases.

If you’re coming from an area where yellow fever has been reported, you’ll need a certificate of vaccination. It is also advisable to be vaccinated against measles.

NON-SMOKING POLICY Smoking is absolutely prohibited in enclosed public places. Smok- ing in bars and diners is allowed only in areas that are designated as smoking places.

SAFETY Filipinos are known for being hospitable and helpful towards visitors. But as a precaution, visitors must exercise discretion when dealing with strangers. They are strongly advised to stay away The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 6 from dimly-lit streets, walking alone at night, avoid wearing flashy jewelry, and be mindful of their personal belongings in public places.

The Ninoy Aquino International Airport (NAIA) is the airport serving the general area of Manila and its surrounding metropolitan area. It is located about seven kilometers south of the city of Manila, along the border between the cities of Pasay and Para- ñaque. NAIA is the main international gateway for travelers to the Philippines.

NAIA Terminal 1 Terminal 1 currently serves the following carriers: Air China, Air Niugini, Asiana Airlines, Cathay Pacific, China Airlines, China Airport & Taxi from the Southern Airlines, Delta Air Lines, Dragon Air, Emirates, Etihad Airport Airways, EVA Air, Gulf Air, Japan Airlines, Jeju Air, Jetstar Air- ways, Jetstar Asia Airways, KLM, Korean Air, Kuwait Airways, Ma- laysia Airlines, Qantas, Qatar Airways, Royal Brunei Airlines, Sau- dia, Singapore Airlines, Thai Airways International, Tiger Air, and United Airlines. Terminal 1 has consistently received very poor ratings due to limited and outdated facilities, poor passenger comfort, and crowding, but it will soon undergo a major make-over and will be rehabili- tated as an “Airport City”.

NAIA Terminal 2 Terminal 2 currently serves Philippine Airlines and Philippine Air- lines' subsidiary PAL Express flights (to Bacolod, General San- tos, Iloilo, Laoag andTagbilaran) exclusively. The North Wing handles the international flights while the South Wing handles the domestic flights.

NAIA Terminal 3 Terminal 3 currently serves All Nippon Airways, Cebu Pacific, PAL Express (except the aforementioned in Terminal 1), Tiger Air Phil- ippines (international flights), Zest Airways (flights to Quan- zhou and Seoul).

NAIA Terminal 4 Terminal 4 currently serves Fil-Asian Airways, SkyJet, Sky Pasada, Tiger Air Philippines (domestic flights), Zest Airways (domestic flights and flights to Kota Kinabalu, Kuala Lumpur and Shanghai)

AIRPORT TAXI Yellow airport taxis bring passengers from the airport to most destinations within the city. These taxis charge a flag- down rate of 70 PhP, plus an additional 4.50PhP for every 250 m. When leaving the airport, this is the only type of taxi available at the arrival level. Each departing taxi is registered by a dispatcher.

Special coupon taxis are special taxis with fixed rates according to the destination. Coupon taxis serve various hotels in Metro Ma- nila and most points within the city.

A regular white city taxi from the airport costs between 100 – 250 PhP to most destinations within the city, depending on the distance. It is possible to get a white city taxi at the departure area

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 7 when leaving the airport, but airport security have orders to prevent white city taxis from picking up passengers at the departure area, hence, you may do this at your own risk. WHITE CITY TAXI Air-conditioned taxis are usually found waiting at malls, restaurants, and hotels. The flag-down rate is 40 pesos and 19.63 pesos per km thereafter.

RAPID TRANSIT SYSTEMS There are two different rapid transit systems in Metro Manila: the Manila Light Rail Transit System, or the LRT, and the Manila Metro Rail Transit System, or the MRT. Both systems operate from 5:30am to 9:30pm. The LRT system has two lines, the Yellow Line that runs along the length of Taft Avenue and Rizal Avenue, and the Purple Line that runs along Ramon Magsaysay Blvd from Santa Cruz, through Quezon City. Fare on the LRT ranges from 12 to 15 pesos, depending on destination. The MRT system has a single line, the MRT-3 or the Blue Line, located along Epifanio de los Santos Avenue (EDSA). Fare on the MRT ranges from 12 to 18 pesos depending on destination.

BUS Air-conditioned and non-air conditioned (“regular”) buses ply all major routes in the metropolitan area. Majority of them do not have specific loading and unloading areas, except in EDSA. A passenger may just call the attention of the driver or bus conductor if he/she wishes to alight at a particular spot. For the air-conditioned bus the standard fare is 12 pesos for the first 4 kilometers, and 1 peso for every km thereafter.

Getting Around JEEPNEY The jeepney has become the symbol of Philippine culture due to its unique and colorful design. It is the cheapest and most popular mode of land transportation. They do not have specific unloading stations. One can just make a hand signal along the jeepney’s route to stop and ride it, or call out to the driver to alight it. The standard fare is 8 pesos for the first 4 kilometers and 50 centavos for every km thereafter.

TRICYCLE and PEDICAB The tricycle (or “trike”) is a motorcycle with an attached passenger sidecar that can sit from 2 to 4 persons. The pedicab is a bicycle, also with an attached passenger sidecar. These modes of transport take you to your destination for a fare of at least 20 pesos per person. The 2014 ICOI will be held at

De La Salle University 2401 Taft Avenue Manila, Philippines 1004 Phone: +632 5244611 Website : www.dlsu.edu.ph

Shuttle service between the conference venue and the recom- Conference Venue mended accommodations enlisted below shall be provided. Here are the recommended nearby accommodation for conference participants:

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 8 CENTURY PARK HOTEL 599 Pablo Ocampo St., Malate, Manila, Philippines 1004 This is a 4-star hotel with 500 rooms, and at a distance of 0.5 km from the conference venue. Contact Person : Mr. Raymond Fujii Trunk Line : +63 2 5285840 or +63 2 5285843 Fax Number : +63 2 528 1814 Mobile Numbers : +63 920 963 5411 Reservation Email: [email protected] Website : http://www.centurypark.com

ORCHID GARDEN SUITES MANILA 620 Pablo Ocampo St., Malate, Manila, Philippines 1004 It has 89 rooms, and at a distance of 0.8 km from the conference Accommodation venue. Contact Person : Ms. Angela Marie Gutierrez Trunk Line : +63 2 516 0888 Fax Number : +63 2 708 9417 Mobile Numbers : +63 915 7945586 Reservation Email: [email protected] Website : http://www.orchidgardenhotel.com

TRADERS HOTEL BY SHANGRILA 3001 Roxas Boulevard, Pasay City, 1305, Philippines It has 312 rooms that offer superb views of Manila Bay and at a distance of 1.2 km from the conference venue. Contact Person : Ms. Ika Rafaeeli Galsim Trunk Line : +63 2 528 2613 Fax Number : +63 2 528 2688 Mobile Numbers : +63 920 9635411 Reservation Email: [email protected] Website : http://www.shangri-la.com/manila/traders Manila and the metropolitan area is a shopper’s haven. Many big malls are located in Manila and Makati. Malls open at 10:00am and close at 8:00pm daily. Varied products ranging from clothes, footwear, electronic gadgets, equipment, cosmetics, Philippine products and souvenir items are available. The malls have thea- tres and restaurants too. The shopping malls that are near the conference venue are Harrison Plaza, Robinson’s Ermita, and SM Manila. The other nearby malls are the Mall of Asia in Pasay, and in Makati, Glorietta, Greenbelt, SM Makati, Landmark, and Power Plant Rockwell.

Duty-Free Philippines near NAIA is the country’s largest duty-free Shopping outlet. “Bring Your Own Shopping Bag” is strongly encouraged, to minimize the use of plastic (non-environment friendly) bags.

There are also flea markets in Baclaran and Divisoria where prices are reasonably low and still be able to haggle. Visitors who wish to shop in these flea markets are strongly advised to go with company familiar with the area, and be very careful of pickpockets.

CARLOS CELDRAN’s WALK THIS WAY TOUR OF IN- TRAMUROS This 3-hour tour takes you through a leisurely stroll around a selection of Intramuros’ Fort Santiago and Plaza San Luis and takes in an ironically irreverent yet informative analysis of Philippine architecture, culture and history; society from Pre-Hispanic Manila until the present, including UNESCO World Heritage enlisted San The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 9 Agustin Church. It is a stand-up comedy, performance art and mel- odrama in the guise of a walking tour. Fee is 1100 pesos/adult

VILLA ESCUDERO DAY TOUR Villa Escudero is located in Tiaong, Quezon which is a pleasant 2- hour drive from Manila, through scenic countryside. Visitors will have a glimpse of historic colonial plantation and rural life of the 1800’s. The day tour includes taking a guided tour of the AERA Memorial Museum, then enjoying a leisurely carabao-drawn cart ride accompanied by musicians and singers serenading them with Filipino folk songs on the way to the resort proper. Visitors can take their lunch at the Labasin Waterfalls restaurant, a unique feature of Villa Escudero. Fee is 1250 pesos per adult, Monday to Thursday, and 1400 pesos on weekends (excluding the round-trip transfer from Manila)

TAGAYTAY DAY TOUR Tagaytay is a popular tourist destination, about 50 km south of Manila. It has a number of natural, historical, cultural and man- made attractions. The town of Tagaytay gives a spectacular view of the Taal Volcano and lake, and there are various activities available for visitors. With its cool climate and clean air, Tagaytay City Sightseeing is a place for leisure activities such as horseback riding and sail- ing, and there are breath-taking views.

CORREGIDOR DAY TOUR Corregidor Island is one of the important historic and tourist sites in the country as it played an important role during the invasion and liberation of the Philippines from Japanese forces during World War II. Guests will need to check-in at the terminal 0700. Boarding the ferry bound for Corregidor Island is at 0730. During the tour, an optional Light and Sound show at Ma- linta Tunnel is offered as well as other activities like Rocket Zi- pline, Hike, Kayak and ATV. Buffet lunch is served at Corregidor Inn.

Philippine cuisine is mostly influenced by the food preparations and cooking of the Spanish, Chinese, American, and other Asian countries. The following dishes are the most popular in the Philip- pines:

ADOBO - chicken and/or pork in garlic, vinegar, oil, black pep- per, and soy sauce, either braised or cooked until dry

KARE-KARE – variety meats (oxtail and tripe) and vegetables (eggplant, string beans, banana heart, radish) cooked in peanut sauce and annatto water, served with shrimp paste called ba- goong Filipino Cuisine LECHON – whole roasted pig

LUMPIA – spring rolls that may be fresh or fried. May be a mix- ture of vegetables and meat, or 100% vegetarian

SINIGANG – meat or seafood cooked in sour broth (usually tamarind or guava or miso)

DINUGUAN – meat spicy stew cooked in pig’s blood. Best served with a local rice cake called puto

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 10 And the most popular desserts are:

HALO-HALO - a dessert made with shaved ice, evaporated milk, and sugar with additional ingredients like ice cream, mashed purple yam, caramel custard, plantain bananas, jackfruit, red beans, tapioca and pinipig BIBINGKA - a hot rice cake optionally topped with a pat of but- ter, slices of white cheese, salted duck eggs, and grated coconut

BUKO PANDAN – a cold dessert consisting of sweetened grated strips of coconut with gelatin, milk, and the juice or extract from pandan leaves.

English Filipino Good Morning Magandang Umaga Good Afternoon Magandang Hapon Good Evening Magandang Gabi Thank you very much Maraming Salamat How are you? Kumusta ka? How much is this? Magkano ito? Some Filipino Words & The food is delicious Masarap ang pagkain Phrases I love you Mahal kita

MABUHAY!

It’s More Fun in the Philippines

We look forward to seeing at the ICOI Conference and we hope you enjoy your stay.

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 11

THE 2014 BOARD of EDITORS

Position: Name - Affiliation:

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

Associate Editor Chich-Jen Shieh - International Association of Org. Innovation, Taiwan R.O.C. Associate Editor Kenneth E Lane - Southeastern Louisiana University, USA 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 Andries J Du Plessis - Unitec New Zealand Assistant Editor Anton de Waal - Swinburne University of Technology, Australia Assistant Editor Asma Salman - American University in the Emirates, Dubai Assistant Editor Barbara Cimatti - University of Bologna, Italy 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 Catherine C Chiang - Elon University, USA Assistant Editor Chandra Shekar - American University of Antigua College of Medicine, Antigua Assistant Editor Chung-Hung Lin - I-Shou University, Taiwan, R.O.C. Assistant Editor Dafna Kariv, College of Management Academic Studies, Israel Assistant Editor Davorin Kralj - Institute for Cretaive Management, Slovenia, Europe. Assistant Editor Denis Ushakov - Northern Caucasian Academy of Public Services Assistant Editor Donna S McCaw - Western Illinois University, USA Assistant Editor Eloiza Matos - Federal Technological University of Paraná - Brazil Assistant Editor Earl F Newby - Virginia State University, USA 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 Gloria J Gresham - Stephen F. Austin State University, USA Assistant Editor Hassan B Basri - National University of Malaysia, Malaysia 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 Chun-Ming Hsieh - Tongji University, China Assistant Editor Ilias Said - Universiti Sains Malaysia, Malaysia Assistant Editor Ileana Monteiro - Portuguese Association of Creativity and Innovation, Portugal Assistant Editor Ismael Abu-Jarad - Universiti Utara Malaysia Assistant Editor Janet Tareilo - Stephen F. Austin State University, USA Assistant Editor Jeffrey Oescher - Southeastern Louisiana University, USA Assistant Editor Jian Zhang - Dr. J. Consulting, USA The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 12 Assistant Editor John W Hunt - Southern Illinois University Edwardsville, 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 Jun Dang - Xi'an International Studies University, P.R.C. China 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, Universiti Sains 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 Assistant Editor Michelle Williams - Stephen F. Austin State University, USA Assistant Editor Michael A Lane - University of Illinois Springfield, USA Assistant Editor Muhammad Abduh - University of Bengkulu, Indonesia Assistant Editor Nathan R Templeton - Stephen F. Austin State University, 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 Pawan K Dhiman - EDP & Humanities, Government of India Assistant Editor Ralph L Marshall - Eastern Illinois University, USA Assistant Editor Ray Thompson - Texas A&M University-Commerce. USA Assistant Editor Richard Cohen - International Journal of Organizational Innovation, USA Assistant Editor Ridong Hu - Huaqiao University, P.R. China Assistant Editor Ronnie Coutinho - AUA School of Medicine, Antigua, West Indies Assistant Editor Shang-Pao Yeh - I-Shou University, Taiwan R.O.C. Assistant Editor Shanshi Liu - South China University of Technology, 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 Stacy Hendricks - Stephen F. Austin State University, USA Assistant Editor Thomas C Valesky - Florida Gulf Coast University, USA Assistant Editor Tung-Yu Tsai - Taiwan Cooperative Bank, Taiwan R.O.C. Assistant Editor Wen-Hwa Cheng - National Formosa University, Taiwan R.O.C. Assistant Editor Yung-Ho Chiu - Soochow University, Taiwan R.O.C. Assistant Editor Yulun Hsu - Nan Jeon Institute of Technology, Taiwan, R.O.C. Assistant Editor Zach Kelehear - University of South Carolina, USA

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 13 A SPECIAL SECTION ON:

RESEARCH AT THE UNIVERSITY OF THE DISTRICT OF COLUMBIA, USA UNDER THE SUPERVISION OF PROFESSOR SERGEY IVANOV, PH.D.

======

APPLIED ORGANIZATIONAL RESEARCH: SCHOLARSHIP AT THE SCHOOL OF BUSINESS AND PUBLIC ADMIN- ISTRATION, UNIVERSITY OF THE DISTRICT OF COLUMBIA

Sergey Ivanov, Ph.D. School of Business and Public Administration University of the District of Columbia Washington, DC, USA [email protected]

Abstract

This is a brief introduction of a focused scholarly and applied advanced graduate organizational research endeavors undertaken at the School of Business and Public Administra- tion, University of the District of Columbia, Washington, DC, USA. The university is rapidly expanding, and is looking to accept graduate students interested in this type of advanced organizational research, while pursuing their Master in Business Administration (MBA) or Master in Public Administration (MPA) degrees. The school is also potentially exploring creation of a doctorate program focused on advanced organizational research. The school’s website is www.udc.edu/sbpa .

Key Words: Organizational Research, Elliott Jaques, W. Edwards Deming, Survey Methods

Introduction and affordable graduate and undergraduate education to the residents of the District of About School and University Columbia, as well as non-resident and international students, having become a di- School of Business and Public Ad- verse melting-pot representing America in ministration, University of the District of all of its great colors and dimensions. Columbia, is located in Washington, DC, capital of the United States. The college is Advanced Organizational Research the only public university in the capital of the United States, providing cutting-edge

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 14 The advanced organizational re- University of the District of Columbia search endeavor started in 2011, and has would not have been possible. The schol- been an ongoing effort by faculty and in- arly and professional efforts of Drs. Elliott terested graduate students. The research Jaques, W. Edwards Deming, Jerry B. focuses on scientific studies of modern or- Harvey, Max Weber, James J. Lynch, ganizations in the United States and Hannah Arendt, Alfred D. Chandler, Kurt abroad. The work is based on scientific Lewin, M. Scott Peck, Norman F. Dixon, studies of giants in the field (some of them Frederick Winslow Taylor, Frederick Her- are mentioned in the Acknowledgement zberg, Gordon Lippitt, Stanley Milgram, section below). This effort is led by Asso- Niccolo Machiavelli, Albert Einstein, Mu- ciate Professor, Sergey Ivanov, Ph.D., fac- hammad Yunus, Wilfred Bion, Mary Par- ulty member at the School of Business and ker Follett, Douglas McGregor, Ignaz Public Administration, and is widely sup- Semmelweis are just some heroes who ported by colleague faculty members, ad- have made this work possible. ministration, and students. Many others cannot be mentioned, As societies slowly enter the 21 st but their exceptional and courageous work century, the field of organizational science enables us, today’s scholars, to continue needs more scientific contributions in or- noble science-grounded efforts at finding der to make the organization, and through better and innovative organizations and it, the entire civilization, a better place. A possibly societies that benefit and include better place to raise families, healthier en- everyone. vironment, reestablishment and recreation of a genuine community and dialogue, School and University pride of workmanship and self at the workplace, ability to contribute and innovate. This ongoing research effort has been made possible by the faculty, students, and We also hope that through this ap- staff of the University of the District of plied research, our students would grow Columbia. professionally, having acquired useful and applicable management and organizational Dr. Sandra Grady Yates, Dean of the consulting experience, while understand- School of Business and Public Administra- ing, using, and appreciating a scientific tion has always been an avid supporter or method to their business or scholarly un- research and scholarship of all kind at the dertakings. school and university.

Overall, we hope that our contribu- The author of two books and numer- tions, in the long-run, would help organi- ous journal articles, Chairperson of Man- zations and executives make good strategic agement Department, Dr. Hany Makhlouf, decisions towards people so that the organ- has always inspired inclusive and useful ization of the future may achieve greater management research. horizons than in the previous centuries. Faculty colleagues and students have Acknowledgments created a good family-like supportive atmosphere to engage and succeed at almost Giants of Thought any endeavor undertaken, ultimately creating a nourishing, welcoming, and scholar- Without standing on the shoulders of ship-filled environment for faculty and stu- extraordinary giants of thought, this con- dents to engage in research and advanced tinuous graduate research endeavor at the professional activities.

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 15

For More Information:

To learn more about the University of the District of Columbia and to join the organizational research endeavor at the School of Business and Public Adminis- tration , please visit www.udc.edu/sbpa .

Additionally, you may read about Professor Ivanov’s research on his website, at www.SergeyIvanov.org .

Dr. Ivanov publishes extensively in the International Journal of Organiza- tional Innovation (IJOI), as well as other peer-reviewed scholarly journals, and often presents at the International Confer- ence of Organizational Innovation , www.iaoiusa.org , and other national and international conferences and meetings.

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 16

SATISFYING INTERNAL CUSTOMERS: HOW TO IMPROVE FACILITY MANAGEMENT QUALITY AT A UNIVERSITY

Eddie D. Lawton Jr. School of Business and Public Administration University of the District of Columbia Washington, DC, USA [email protected]

Sergey Ivanov, Ph.D. School of Business and Public Administration University of the District of Columbia Washington, DC, USA [email protected]

Abstract

This article examines the Office of Planning and Facility Management at a prestigious Amer- ican university for the purpose of identifying areas that can be further developed to enhance the quality of service delivered by the organization. The research isolates the identified organizational concerns then analyzes them to offer comprehensive corrective solutions to eliminate the departmental weaknesses in order to promote customer satisfaction, employee growth and development while initiating a fundamentally secure approach to completing organizational task in a strategically accountable fashion. Primary data was collected from a sample consisting of the departments’ managers and employees, faculty members from other departments and students of the university. The surveys revealed three areas within the organization that serve as major barriers to quality service facing the department: training, organizational structure, and technology.

Key Words: organizational concerns, customer satisfaction, barriers to quality of service, growth & development, elimination of departmental weaknesses, quality of service

Introduction Project Managers and Administrative Per- sonnel who are responsible for the start to The Office of Planning and Facility completion coordination, planning and de- Management consists of two separate design of new construction, remodeling and partments. They work together, under the renovation of facilities on the campus. Fa- same umbrella, as a cross functional team cilities Management (FM) consists of man- at this particular university. The office of agers, skilled tradesmen, mechanics, and Planning consists of Architects, Engineers, technicians who work in teams assigned to specific zones on the campus in order to The International Journal of Organizational Innovation Vol 6 Num 4 2014 17 perform maintenance, inspections and re- practice of awarding business on the basis pair of facilities and facility equipment. of price tag” (p. 23). Awarding contracts This article concentrates on researching to bidders should not be decided strictly by the latter of the two grouped departments price; quality, service and reliability to identify and take advantage of opportu- should be considered as well. Selecting nities to further the quality of service. the highest quality contractor requires managers to compare each option through Deming Analysis of Current Work a benefits cost analysis to ensure that the Processes expected benefit is achieved from the investment and the benefits outweigh the When trouble is detected or reported, cost. a Work Management (WM) staff member generates a work order ticket, a FM em- Work Management ployee assesses the problem, and performs minor repairs if necessary or transfers the A survey was designed to collect the ticket to a Facility Manager to be out- perceptions of managers and workers sourced to a contractor if the project is within the FM department, staff members considered to be a mid-sized to large pro- external to the department, and the staff of ject. Any project that costs more than the student-run university newspaper. The $5,000 in labor is consider a mid-sized survey intended to better understand the project. This method as W.E. Deming work environment of the department, the (1986) states robs the hourly worker of his structure of the organization, the internal right to pride of workmanship (p.24). customer’s perception of FM in terms of Tradesmen are interested in practicing response time, quality of service and ideas their craft, therefore employers should per- to strengthen the reputation of the depart- mit them to display their talent capacity ment. through overcoming challenging assignments within their scope of work. Student employees from the campus newspaper said that other students claimed This recommendation allows em- to have created a FM work order ticket, ployees to see tangible results created by but the work was never performed. How- their own hands instilling a sense of pride ever when they called Facilities to check and accomplishment in the worker. A the status of the ticket it was reported to sense of achievement in tradesmen pro- them that the work order had been closed. motes quality craftsmanship; which is in Work Management employees admitted the best interest of the employee since he that sometimes maintenance personnel do or she will be accountable for the work not close out their work tickets or report performed as well as the maintenance of it. them as being complete. The Work Man- agement staff has a quota to close out or When a request is submitted for new complete 100 percentage of the work or- construction or renovation, a Facility Man- ders that are generated within 30 days of ager obtains bid proposals from three con- creation. One of the Work Management tractors, then awards the contract to the employees reported that “sometimes at the lowest bidder. The project is then initi- end of the month if I see a ticket that is not ated, planned, executed, controlled and complete but should be finished by early closed out by a Project Manager. This ap- next month I’ll go ahead and close it out proach goes directly against the fourth of for this month even though the work is not the 14 Points for Management in which yet complete.” Which in turn gives false W.E. Deming (1986) insist to “end the

The International Journal of Organizational Innovation Vol 6 Num 4 2014 18 records and inaccurate accounts of produc- their positions and how they could in- tivity. However, since these employees crease their quality of service. Not sur- are pressured to meet certain quotas of ser- prisingly more than half of the workers vice some employees become innovative mentioned needing and wanting to receive in their approach to increasing productiv- meaningful training. The Facilities depart- ity. As W.E. Deming mentioned in his ment should invest in an ongoing em- Red Bead Experiment (1992), pressure to ployee training program. The program meet a numerical goal can drive some peo- should be relevant to what the employees ple become other than honest; not simply do and lead to something tangible, valua- because they are dishonest people but out ble, and empowering such as a license or of fear. People fear being reprimanded for certification. Implementing such a pro- “underperforming” or receiving unfavora- gram can expand the knowledge base of ble remarks on their annual performance the employees, increase productivity, and reviews; which Deming views (perfor- save the department money by reducing its mance reviews) as a management disease. dependency on contractors while simulta- It is fair to expect this type of result when neously empowering the workforce result- production is promoted over quality. The ing in greater pride in workmanship. department should change its goal from closing out 100 percent of the generated Outdated Technology tickets in 30 days to achieving 100 percent customer satisfaction. Current work ma- Students, faculty, and staff members trix, thus, is meaningless, and possibly have complained in the past that Facilities even harmful because the data are cor- is slow to resolve issues, does not com- rupted. FM quality is about meeting the municate well with other faculty members, needs of the client not patting backs for and the process of generating work request achieving goals void of quality. or obtaining work request status is other than transparent. Training & Education The use of limited, outdated work What stood out most from the analy- management software seems to be creating sis was the lack of relevant fundamental some problems for this section. The cur- training received by the FM employees. rent system is not transparent for the cus- Some of the technicians claimed to have tomer nor does it communicate with tech- never received any formal training on the nicians; it’s more of a ticket generating systems that they are required to maintain. systems than a work managing system. Their current knowledge about the systems The department should invest in a more functionality and required maintenance ex- modern powerful software system that al- ist from experiences with similar yet older lows the customer to update tickets, check models, which they acquired while em- the status and communicates with techni- ployed elsewhere. One Security Systems cians in real time. Technician stated that during his 15 month tenure with the university that he was Organizational Structure “scheduled for three training sessions, none of which were more than one day in Evaluation of the hierarchical struc- length and none of them enhanced my ture of the Planning and Facilities manage- skills or creditability.” Several other me- ment department reveals a pyramid ar- chanics, technicians and craftsmen were rangement that is four layers deep in some surveyed to understand how they viewed sections and five layers in others. The custodial branch dominates the diagram with

The International Journal of Organizational Innovation Vol 6 Num 4 2014 19 its confusing and conflicting hierarchy. one of his main goals is to “effectively There are 11 custodial supervisors and 2 lead the staff to a culture of continuous im- managers. One manager is on the same provement.” He also recognized that while layer as 7 supervisors and 4 of the supervi- the Office of Planning and Facilities Man- sors are on the same layer as the workers; agement had numerous responsibilities, “it it makes very little sense. is imperative that we set clear expectations and priorities for each mission area and ef- Several of the managers admitted fectively communicate those expectations that they are not even sure how the depart- to our staff.” It appears that he may have ment is structured or who they are lateral the right idea with establishing a culture of with. The Associate Director of Resource continuous improvement, setting expecta- Management maintains the organizational tions and enhancing communication. chart. His first response upon being asked Changing the culture of an organization for a copy of the departmental structure can be a very difficult, tedious maneuver was “Sure!! Which one do you want? We to pull off. The new VP was not available have a couple of them, depending on what to participate in the survey, but if he were, you want it for.” This is a sign that em- the two question that would need to be ad- ployee rolls are not well defined and the dressed are; “What methods do you in- department does not have a strategic ap- tend to use in implementing a culture proach to accomplishing task. change in the organization?” and “In what time frame do you anticipate accomplish- According to Clement (2013) man- ing this goal?” (Deming, 1994). agers of a successful organization should “define the right number of levels in your Conclusion organization and establish valuing adding work at each level, including time frames The university’s Facilities department in which these levels should operate” needs to establish Deming’s constancy of (p.22). The department should establish a purpose within the organization towards well-defined unique organizational chart continuous improvement, invest in tech- that is designed to produce high quality nology to improve work management ca- customer service and maintenance with a pabilities, enhance the relationship with closed loop feedback system that ensures other departments within the university, customer satisfaction. and finally invest in an ongoing empowering and meaningful training program. New Leadership These adjustments would increase the quality of service of the department result- The department hired a new vice ing in a more talented workforce and hap- president at the beginning of the year. He pier customers. stated in an email to the department that

References

Clement. S. D., & Clement. C. R. (2013). It’s All About Work Organizing Your Company to Get Work Done. The Woodlands, TX: Organizational De- sign

The International Journal of Organizational Innovation Vol 6 Num 4 2014 20

Deming. W. E. (1986). Out of Crisis. Cambridge, MA: Massachusetts Insti- tute of Technology, Center for Ad- vanced Engineering study

Deming, W. Edwards (1994). The New Economics: for industry, government, education. Cambridge, MA: MIT/CAES Press.

Ivanov, Sergey (2011). Why Organizations Fail: A Conversation About American Competitiveness. International Journal of Organizational Innovation, 4(94), 110-16.

Ivanov, Sergey (2013). Defects in Modern Organizations: Field Findings and Dis- covery. International Journal of Inno- vation, Management and Technology, 4(2), 204-208.

The International Journal of Organizational Innovation Vol 6 Num 4 2014 21

ENHANCING PRODUCTIVITY OF A FIRM: CASE OF A RESEARCH ORGANIZATION IN UGANDA

Victoria Nambwaayo School of Business and Public Administration University of the District of Colombia Washington, DC, USA [email protected]

Sergey Ivanov, Ph.D. School of Business and Public Administration University of the District of Colombia Washington, DC, USA [email protected]

Abstract

In this study, a research effort was made to determine what factors are important in enhancing productivity of a firm. Survey results demonstrate that most people identify relevant training as an important factor in increasing productivity of a firm.

Key Words: Productivity, Enhancement, Training

Introduction and administration stuff. The executive director is the head of the organization, dep- The Research Organization utized by principle research fellow and founded in 1948 with the objective of three senior research fellows, followed by providing evidence based policy solutions research fellows and research analysts. to the pressing questions of policy makers, While the human resources and admin- through economic and statistical research. istration department constitutes eight ad- Research organization receives a bigger ministration assistants and three infor- portion of its funding from the African Ca- mation management specialists. pacity Building Foundation (ACBF) and another portion from the government and The Research Organization (RO) has the rest from its own means through com- four levels of organizational hierarchy. missioned studies. Level IV Executive Director (ED): Level IV leader is one with responsibilities of di- The Research Organization (RO) is verse constituencies (Jaques, 1992). In this located in Africa. It constitutes 58 employ- case the leader heads the two departments ees of which 40 are the researchers the rest (Macro and Micro Economic Depart- (18 employers) are from human resources ments).

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 22 The Executive Director’s (ED) roles handle a task. Has a time horizon of 2 to range from developing pathways in order five years, has a felt fair pay of six times to ensure the Centre achieves its overall that of stratum one. objective of providing quality research projects to help answer policy questions Level III Senior Research Fellows (SRF’s) facing decision makers in Uganda, through and heads of the Macro and Micro evidence based research. To achieve this Economic departments mission, ED with the help of the two heads of departments, develops training pro- Senior Research Fellows (SRFs) grams to enhance the potential of the re- know all their subordinates to the extent searchers as well as ensuring they recruit that they can tell who has what level of competent people with the capacity to add competence to perform a particular task value and get the job done. better. The SRFs provide support to the junior researchers in a way that mentors The ED oversees the work done by them so they grow in their careers and the heads of both Macro and Microeco- achieve greater performance within the or- nomic departments. Thus, the heads in ganization. In doing so, the SRF can tell these two departments depend on the exec- which among their subordinates has better utive director for guidance. The Executive analytical skills and can finish up a task Director works as a liaison between the that requires advanced skill in a given time board of directors and the rest of the or- frame), which subordinate would need ganization and also ensuring that the Cen- some help on a particular task and to what tre has enough funding for at least the next extent and generally to what degree of ca- 2 years at all time. pability each subordinate can perform. At the RO, direct subordinates to the Senior The Hierarchical Structure at the Research Fellows are the Research Fel- Research Organization lows, Assistant research fellows and Re- search Analysts.

Level II Finance Manager and the Re- search Fellows/Assistant Analysts

Finance Manager heads the Ad- ministration/Support stuff and supervises the knowledge management Specialist, As- sistant Accountant, Administrative Assis- tants, Drivers and cleaners. All these people get a lot of their tasks from the finance

manager. Unlike other organization were the finance manager’s biggest role is to en- Unless otherwise, funding is guaran- sure they raise enough money to finance teed at RO if accountability on use of the the organization’s activities. In RO, the funds is provided to the funders like the role of raising funds directly falls under Africa Capacity Building Foundation the Executive director as discussed above. (ACBF), which is the main contributor and The following roles are performed by the the government, a smaller percentage of finance manager. the funds comes from RO own initiatives through commissioned studies. Often tasks (i) Allocates resources in a way that come through and from the ED, who then ensures optimal usage. With this role, the decides which department is best suited to Executive director has to ensure smooth The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 23 flow so as to provide checks and balances. on average 30 minutes or one to three Under this role, the finance manager has to hours if it’s outside the capital city. mitigate the variable costs and also ensure the fixed costs per unit are low. This al- (v) While an Assistant Account recon- lows the organization become more sus- ciles the organizations accounts with sev- tainable in periods of less funding from the eral banks in a day and also has to verify government and the African Banking Insti- vendor supplies before payment is fur- tute. nished, prepare financial statements with the guidance of the Finance Manager, (ii) Preparation of financial statements maintain and manage records of day to day namely the cash flow statements, Balance transactions, for example the petty cash. sheet and the income statement. Oversees The Assistant Accountant may have to do the work performed by his subordinates several related petty cash transactions in a and providing them with the support to ef- day. fectively perform well on their jobs. (vi) Roles of the knowledge manage- (iii) The Research Fellows/Research ment specialists include cataloging reading analysts collect and analyze the data and materials in the library so that it is easier write reports with direct supervision of the for researchers to find them. They often Senior Research Fellows. The longest task provide reference services to RO staff and for the Research fellow/Research analysts other users, assists with data entry and up- can be about four months for example col- dating of the office data base and coordi- lecting data especially in rural areas can nate RO conferences with other organiza- take a while, then checking for data con- tions, for example the Ministry of Finance, sistency takes patience or completing a re- the government and the United Nations, port on a particular project. The time span among others with the help of the re- for level II is 3 months to one year. searchers.

Level I Problem Statement

(iv) Where level one constitutes mainly The Think Tanks Report, 2009, those who perform routine tasks and has a ranked Research Organization as the 7th time span of one day to three months. In out of 25 Think tanks in Africa. The same this level, I included Knowledge Manage- report, in 2011, ranked RO as the 16th out ment Specialist, Assistant Accountant, Ad- of 30 Think Tanks in Africa. Could the de- ministrative Assistants, Drivers and the cline in rankings be due to decline in qual- cleaners. For instance a driver may drop ity of the research reports or fewer reports off a researcher to a conference meeting getting to be published or a combination of (which could take like 30 minutes to one the two or something else? In this study, hour within the capital city), comes back an effort will be geared towards finding to the office to pick up another researcher out what are some of the factors that are or may wait for the researcher until the important in enhancing the productivity of meetings is done and drop him/her at the Research Organization. Several factors whatever destination. In other incidences, may be important in explaining the decline drivers take the researchers to field work ranging from, lack of adequate training, studies (this can take like a three days to a fear or little engagement of the stuff mem- week or a month depending on the length bers (especially the junior stuff) which of the task). So within one day a driver could result in communication break down will have done several of the short tasks as and hence lead to little or no innovation mentioned above each could be taking like The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 24 which is crucial in bringing about positive ii 2+-5 years change in organization (Deming, 1993). iii 5+-10 years iv.10 years & above How the Organization Operates 2. What is your highest level of education? At the RO, a research study is either initiated (where by a researcher or 1. College 2.Bachelors 3.Masters 4 Doc- groups of researchers come up with a re- toral search idea or it can be commissioned (this means that an organization requesting RO 3. How often would you report a problem to conduct a study on its behalf pays RO to your immediate manager or the one for conducting the study). Ideally one’s above him? work size would be measured by the quality and amount of research studies that i. I do not report have been undertaken say on an annual or ii rarely report semi-annually or quarterly basis. But some iii report sometimes research projects do require more time to iv I always report do than others. Often the more papers your author or co-author the more you get reim- 4. What steps are needed to improve qual- bursed in terms of extra allowance on top ity of research papers? of your salary. This is supposed to be viewed as some initiative that enhances i. Need for internal peer reviewer work productivity. Thus if you have poor ii. Relevant training analytical skills, the chance that you miss iii. Present papers to big forum for com- out or get very little from the extra allow- ments ances are very high. Indeed, many of those with good analytical skills find it hard to b. internal communications (collaboration share knowledge with those labeled as not on work project) being very analytical researchers. It is possible that the reason some researchers are i. regular meetings/updates on Centre ac- not good with the analytics is to a greater tivities extend a problem from the system than it ii. Encouraging researchers to work to- is from the researchers. Indeed (Deming, gether on projects 1993) suggests, that 94 percent of the trou- bles in an organization come from within 5. Does training and retraining in any op- the system while 6 percent are attributable eration in your company teach the require- to special causes (that is to say they come ments of the next operation? from outside the system or organization. i. Yes, with respect to work on poverty Methodology (Questionnaire) analysis but not on other areas ii. Yes, but frequency needs to be in- With the exception of questions 2 creased and 3 that had answer choices to choose iii Not really, should avoid duplication ex- from, all the other questions were open cept for new employees or those who need ended. to refresh

1. How long have you worked for this or- 6. a. How do you distinguish between your ganization? quality as your customer perceives it and quality as your manager and work force i. 1-2 years perceive it? The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 25 i. Quality of work is regarded highly by education, participation in professional as- manager/staff sociations) ii. On Poverty, customer thinks it’s of high quality i. Yes but at your own cost like tuition iii Refer to senior researcher (still have to perform your job if it is an evening program if out of the country it’s a b. how does the quality of your service, as leave without pay your customer sees it, agree with the qual- ii. Refer to senior researcher ity that you intended to give him? Research Findings i Not really in agreement except for work on poverty In this study, a decline in quality ii. Refer to senior researcher rankings of the organization prompted an iii. Customer gets more and our work is investigation as to whether it was due to rated highly by independent agencies quality and what factors are important in enhancing quality so as to improve an or- 7. Do you depend on complaints from cus- ganization’s productivity. tomers to learn what is wrong with your service? Respondents were asked to provide ways on how to improve the quality of the i. No mechanism to track and assess the research papers. Of the ten respondents in- complaints and to respond to them. terviewed, 20% favor having an internal ii. At times customers can query if TOR peer reviewer, 50% prefer relevant training are not properly followed then we address and 30% favored presentations in bigger them. forums where they can get feedback on iii. Refer to senior researcher how to improve upon the research papers. These results are displayed in Figure 1. 8. Are training courses relevant to your below. daily work? i. yes, because they enable us become better performers (give us more skills to analyze data) ii. Generally good, only if we could have more. iii. Sometimes

Figure 1. Steps needed to enhance quality of 9. Are training opportunities fairly allo- Research Papers cated across employees? Respondents were also asked to i. sometimes there is the assumption some provide their views on how training and employees have adequate training from retraining in any operation teaches the re- school hence no need of more quirements for the next operation and 80 ii more training courses go under the pov- % of the respondents believe that training erty analysis area and retraining in any function teaches iii. Training courses allocated based on them how to perform future functions bet- need ter. Of these, 30% believe training and retraining helped them with their future as- 10. Does supervisor support employee signments especially poverty related as- learning outside the job? (Say continuing signments and 50% responded that training The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 26 and retraining does indeed teach them re- and if working outside the country they quirements for the next job operation but seek leave without pay. that they needed to do it more frequently. The results are displayed in Figure 2. below.

Figure 3. Employee perception on the Rel- evancy of Training Courses

Figure 4. below shows the extent of Figure 2. Training and Retraining Effect on next fear in the organization. Overall 20% per- Job Assignment cent of the respondents mentioned they do not report a problem in the organization Overall, 80% of the respondents while 40% said the rarely reported a prob- believe that the training courses offered lem compared to 30% who reported a are relevant to their work. Of these, 30% problem all the time. This implies majority believe that the training courses enable of the respondents may not report a prob- them perform better by giving them addi- lem in this organization which can lead to tional skills, and 50% said that training communication breaks down and hence courses were relevant and only wished curtailing positive change or innovation. they could have them more frequently. Indeed, when respondents were asked on how best to improve communication in the Respondents were also asked to organization, 70% choose encouraging re- provide their perception on the relevancy searchers to work together on projects of the training courses. Fifty percent re- while 30 % believe communication can be sponded that the training courses were rel- improved through regular meetings/up- evant and preferred that they could have dates on center activities. them frequently. While 30 percent mentioned that training courses gave them additional skills how to analyze data. And, 20% responded that training courses where relevant sometimes not all the time. Below and the results displayed on a histogram.

In a related incidence respondent were asked about their perception as to whether their supervisor would support learning outside the job like continuing education or participation in professional Figure 4. Provides a Clue on Extent of fear studies. Majority (90%) responded that in an Organization their supervisors would be willing to support them acquire additional training outside the job only if they met their tuition

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 27 Conclusion and 30% mentioned that training courses gave them the skills to analyze data. Results from the survey show that one way to improve quality of research pa- Also analyzed is the extent of fear pers is through relevant training (50%). in this organization, with 20% of the re- Also, 80% of the respondents believe the spondents mentioning they never report a training and retraining teach requirements problem and 40% percent say they rarely of the next job. Of these, 30% believe report a problem. This is likely to lead to training and retraining help them with next communication breakdown. However, re- requirements of the job (poverty related spondents also believe that one important assignments). While 50% responded those way to improve communication in the or- training courses were relevant to their jobs ganization is through encouraging researchers to work together on the projects.

References Ivanov, Sergey (2013). Defects in Modern Organizations: Field Findings and Dis- Deming, W. Edwards (1992). Out of the covery. International Journal of Inno- Crisis. Cambridge, MA: Massachusetts vation, Management and Technology, Institute of Technology. 4(2), 204-208. Jaques, Elliott (1964). Time-Span Meas- Deming, E. (1993). The New Economics. urement Handbook.: Cason Hall. Cambridge: Massachusetts Institute of Technology. Jaques, Elliott (2002). The Psychological Foundations of Managerial Systems: A Harvey, J. (1984). Encouraging Students General Systems Approach to Consult- to Cheat: One Thought on the Differ- ing Psychology. San Antonio, Texas: ence between Teaching Ethics and Midwinter Conference of the Society Teaching Ethically. The George of Consulting Psychology. Washington University.

Ivanov, Sergey (2011). Why Organizations Fail: A Conversation About American Competitiveness. International Journal of Organizational Innovation, 4(94), 110-16.

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 28

WHY SMALL ORGANIZATIONS TURN DOWN RESEARCH REQUESTS: A CASE STUDY

Giresse Pembele School of Business and Public Administration University of the District of Columbia Washington, DC, USA [email protected]

Sergey Ivanov, Ph.D. School of Business and Public Administration University of the District of Columbia Washington, DC, USA [email protected]

Abstract

Research is important for any organization, small or big. Research allows the organization to check how it is doing, and potentially improve current operations. Organizational analysis could be one of the main drivers of continuous improvement because it identifies the organization’s gaps, and lays out a realistic plan to improve the existing system and build new ones for the future. In this paper, we explore reasons why small organizations may deny research requests. By preventing research, executives and managers keep their organizations operating at a status quo level, hindering future growth and development.

Key Words: Organizational Research, Organizational Analysis, Organizational System, Con- tinuous Improvement, Accountability, Optimization, Research Denial

Introduction support these programs. Reports and deliv- This case study researches a non- erables lagged up to the point it took more profit organization whose programs and than six months after the due date to de- total revenues grew 50% from one year to liver. The accounting and finance manager another in years 2011-2012. The yearly and staff members spent their time trying budget was already over 10 million dollars to close this process instead of focusing on in 2011, before the exponential growth. improving daily activities. We wanted to The support team, through one of its busi- find out what went wrong and how to ness units, struggled to adequately avoid such situations in the future. In

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 29 2013, Pembele sent request for research uncovers two types of problems: problems proposal, and discussed it with the man- of today and problems of tomorrow. The ager, who was quite optimistic about ap- problems of today encompass maintaining proving the proposed research. A month the quality of product and services offered later, Pembele was denied the opportunity. today, while the problems of tomorrow de- Having completed preliminary research, mand a constancy of purpose and dedica- the authors, subsequently, decided to ex- tion to continuous improvement (Deming, plore the reasons why this organization 1992). turned the research request. We have found that this organiza- Methodology tion was not built in a system setting, and lacks the constancy of purpose (it is no- To conduct this study, we used Or- where to be found). The leadership rarely ganizational Theory developed by Deming thinks about continuous improvement be- (1992, 1993). Having conducted prelimi- cause of uncertainty about their future. So nary research, we tried to correlate the researching their processes may reveal finding against why the organization has how little they may know about the organi- turned down the research request. In addi- zation, and how unorganized the depart- tion to Deming’s organizational theory, the ment is or the organization as a whole. If authors also used organizational principles executives or managers are not ready to developed by Jaques (2002), and Ivanov recognize their imperfections, they may (2011, 2013). deny research requests. Likely, lacking the constancy of purpose, one of the main Findings Deming’s principles to a successful organization, has led to denial of the research re- Lack of constancy of purpose quest.

Any organization, big or small, Short-term focus faces many challenges. To navigate through challenges with relative ease, an Organizations that focus on the organization must be organized in a sys- short-term, believing in the immediate tem setting. A system is a network of inter- profit, sacrifice the future of their enter- dependent components that work together prises (Deming, 1992). The short-term ap- to try to accomplish the aim of the system proach hinders the growth and future of (Deming, 1993). The aim of the system is the organization. How good is it for an or- what creates constancy of purpose. The ganization to deliver today and yet go out aim, precedes the creation of the system, it of business tomorrow? The short-term fo- must have a long-term emphasis and be re- cus must be eradicated because it leads to lated to how everyone is better off. Many sub-optimization (Deming, 1993). Sub-op- organizations, so concerned about sur- timization allows units or departments vival, focus on short-term goals and profits within a company to reach their goals even instead of long-term. Executives should although they are not the best alternatives locate resources for long-term planning, for the company as a whole. On the other creating systems and understanding them hand, an organization functioning as a well for future improvement. well-oiled machine and applying continuous improvement to its processes may Executives or leaders need to have achieve optimization. Optimization is a profound knowledge of the system. Dem- process of orchestrating the efforts of all ing (1993) believes that through profound components toward the achievement of the knowledge of its system, an organization stated aim (Deming, 1993).

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 30 The short-term focus also limits the stating the purpose, directions and pro- dynamism of the organization. If by any cesses, no one is held accountable. After chance, the organization was able to grow, the preliminary analysis, we find that ac- the growth leads to a lag in delivery of countability, teamwork, and collaboration product or services. Because the organiza- are nowhere to be found in this organization is not a system, leaders tend to add action. The leader was reluctant to relinquish tivities, reports that may not necessarily be control, and preferred to make all deci- needed to achieve the unstated aim. For in- sions alone. Keeping the organization cen- stance, as the annual audit lasted about 10 tralized, holding on to power within the or- months. The management team decided to ganization to avoid accountability could hire two consultants, one looking through become another reason for the denial of re- month-end process and the other going search request. over how to improve daily activities to better serve other departments. However, the Conclusion biggest question is: why start with smaller activities rather than the big picture? Sure The goal of research on organiza- some of these daily and monthly activities tional processes is to analyze the organiza- caused the annual audit to lag. Isn’t there tion to enable its leaders to transform the any annual report that needs broken down system. Organizational system cannot exist to monthly or weekly report to facilitate without a goal or purpose. The research the year-end audit? The question remains identifies ways of integrating and aligning unanswered as of now. So in the case of all activities or simply creating new pro- next annual audit still lagging (maybe a lit- cesses that constitute a system in order to tle less than the previous one), who should achieve the organization’s objectives. be held accountable? The fear of revealing the emphasis put on short-term rather than Organizations deny the research re- long-term activities may have led to denial quests because they live in denial, or may of research request. think improvement is not needed. They also deny research to avoid exposing their Accountability lack of constancy of purpose and other shortcomings, such as focusing on the All organizations ought to practice short-term instead of the long-term profits teamwork and collaboration. Bringing the and health of the organization, to prevent entire management together requires changes within the organization or the strong accountability system within the or- business unit. With change and improved ganization (Jaques, 2002) (Ivanov, 2011, processes come greater accountability and 2013). Most leaders have not setup their transparency, for which many executives organizations for clarity in accountability. are not ready. Thus, they prevent research Ashkenas argues that “the most effective and deny themselves and their organiza- organizations engage in continual (and tions the chance to embark on a different sometimes brutally candid) dialogue — path. across levels, functions, and with customers and suppliers” (2012). Without clearly

References Deming, E. (1992). Out of the Crisis. Cambridge: Massachusetts Institute Ashkenas, R. (2012, September). Take of Technology, Center for Accountability for Your Own Advanced Engineering Study. Success. Harvard Business Review

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 31 Deming, E. (1993). The New Economics Page, S. (2010). The Power of Business for Industry, Government, Process Improvement : 10 Simple Education. Cambridge: Steps to Increase Effectiveness, Massachusetts Institute of Efficiency, and Adaptability. New Technology, Center for Advanced York: American Management Engineering Study. Association.

Dixon, N. (2011). On The Psychology Of Military Incompetence. Vintage Digital.

Ivanov, S. (2011). Why Organizations Fail: A Conversation About American Competitiveness. International Journal of Organizational Innovation , 110-16.

Ivanov, Sergey (2013). Defects in Modern Organizations: Field Findings and Discovery. International Journal of Innovation, Management and Technology, 4(2), 204-208.

Jaques, E. (1989). Requisite Organization: The CEO's Guide to Creative Structure and Leadership. Cason Hall and Co.

Jaques, Elliott (2002). The Psychological Foundations of Managerial Sys- tems: A General Systems Ap- proach to Consulting Psychology. San Antonio, Texas: Midwinter Conference of the Society of Con- sulting Psychology.

Kraines, G. (2001). Accountability Leadership: How to Strengthen Productivity Through Sound Managerial Leadership. Career Press.

Office of Advocacy. (2012, September). Advocacy: The Voice of Small Business in Government. Retrieved from U.S. Small Business Administration

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 32

APPLIED ORGANIZATIONAL STUDY OF FREE JOBS TRAINING PROGRAM IN WASHINGTON, DC: RESEARCH CASE ON STRUCTURING OF WORKFORCE DEVELOPMENT IN THE CAPITAL OF THE UNITED STATES

Raysa Leer School of Business and Public Administration University of the District of Columbia [email protected]

Sergey Ivanov, Ph.D. School of Business and Public Administration University of the District of Columbia [email protected]

Abstract

The Workforce Development and Lifelong Learning Program at the University of the District of Columbia Community College is distinctive to the District of Columbia, the capital of the United States, serving residents by providing them with free jobs skills training. This case study provides analysis of the organization’s structure and management process, examining the current design and establishing plans for future transformation and development.

Key Words: Workforce Development, Organizational Design, Organizational Analysis, Organi- zational Structure, Management, W. Edwards Deming, Elliott Jaques, Education, Postsec- ondary Education, Case Study

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 33 Introduction The Workforce Development Program currently offers free courses structured The Workforce Development and around four career pathways: Administra- Lifelong Learning Program at the Univer- tive Technology, Construction, Hospitality, sity of the District of Columbia Community and Nursing & Allied Health (Unversity of College is distinctive to Washington, Dis- the District of Columbia Community trict of Columbia, the capital of the United College Workforce Development Program, States, serving residents by providing them 2013, p. 3). These courses are offered in with free jobs skills training. This case three of the District of Columbia’s Wards study provides analysis of the organiza- (Wards 5, 7, and 8). (The nation’s capital, tion’s structure and management process, which is not one of the fifty states, is di- examining the current design and establish- vided into eight political and neighborhood ing plans for future transformation and de- areas which are called wards). The residents velopment. of these wards, particularly in Wards 7 and 8, are predominantly low-income minori- The Workforce Development Pro- ties. Wards 7 and 8 also report the highest gram was initiated at the University of the rates of unemployment in the District – 14.2 District of Columbia (UDC) – a public, percent and 21.5 percent respectively in land-grant institution – in 2006 as part of the September 2013 (Department of Employ- university’s Community Outreach and Ex- ment Services, 2013). Many of these resi- tension Service (COES) department. In dents have few options for access to any job 2008, the University President at the time, skills or professional training, to say noth- Dr. Allen Sessoms, created the Community ing of postsecondary education. It is there- College Initiative. The Workforce Develop- fore fitting that the Workforce Develop- ment Program was moved under the initia- ment Program’s mission is “to reduce un- tive and the title given to the leader of the employment and underemployment in the program was changed to Associate Dean for District of Columbia by enhancing the skills Workforce Development and Community of its residents” (About WDP, 2013). Outreach (Community College of the District of Columbia, 2009, p. 1). In reflecting on the mission of the program, the current Dean of Workforce In 2009, the University Board of Development expressed concern regarding Trustees “approved the creation of a new the division’s organizational chart (Ford, University system, which include[d] UDC 2013). In particular, the Dean was not con- and the Community College of the District vinced that the current organizational struc- of Columbia (CCDC)”, later renamed the ture meets organization needs, promotes University of the District of Columbia quality services, nor lends itself to the actu- Community College (College Brain Trust, alization of a cohesive, interdependent sys- 2010). Workforce Development became the tem. Workforce Development and Lifelong Learning division within the community This case study reviews the examina- college and the associate dean position con- tion of the organizational structure, the pro- verted to a deanship, which reports to the posed possibilities for restructuring and Community College’s CEO. several recommendations made to management regarding future organizational changes that are based on organizational

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 34 analysis theories. These included sugges- changes are required within the organizations on potential improvements to raise the tion to ensure that the program operates ef- quality of the program and increase em- fectively and efficiently. ployee satisfaction. In the current organizational chart of Methodology the program (see Appendix A ) the departments within Workforce Development are Much of the information for this report currently structured by location or activity: comes from scholarly research; the organi- - One section is connected to the vari- zational theories of Jaques, Deming, and ous Workforce Development sites. Ivanov; and surveys with Workforce Devel- - Another section is Center for Work- opment program staff members – in partic- force Strategies, which is the research and ular the head of the organization, the Dean development arm of the program. of Workforce Development. Experience - Another section is student success ac- gave insight into the general operations of tivities, a department in the process of being the division, the range of positions, and the formed and expanded. various levels within the organizational - Continuing Education department structure. Interviews provided historical will be removed from the Workforce Devel- context to the division’s activities and pre- opment division in the near future to stand sented the researcher with a firm grasp of as its own division within the larger univer- management’s chief concerns and future sity structure. plans. - Nursing department, which by the nature of its activities as a fee-based program Organizational Structure and Time Span (and therefore not being free to the District residents) is set apart in the initial creation From an economic and social perspec- of the organizational structure. tive, a well-functioning Workforce Devel- opment Program in the nation’s capital is This structure is fragmented and si- obligatory. The free program is distinctive loed, each area concentrating predomi- to the District of Columbia and is shaped by nantly its own activities without a great deal the District’s unique needs and require- of interaction or clear understanding occur- ments. As the leader of the division within ring between the employees of the various the Community College, the dean is posi- subsections of the program. The dean wants tioned at the top of the organization’s hier- to revise the structure to achieve depart- archical structure and serves as the leader mental unity and interconnectedness. When for program development and direction. asked what is “off” about the structure, the The dean must examine how the organiza- dean replied that the former focus of the tion can best operate in the present and re- program (and therefore the way the program shape itself to meet the needs of the future, had been structured in the past) was all balancing current concerns with perceived about the output, the credential a student re- future interests, looking from present day to ceives following training. Going forward, where the Workforce Development pro- the dean wishes to restructure around a fo- gram will be in the coming years. As goals cus on the program’s outcome for students: for the future have emerged, it has become the restoration of hope for District residents evident to the dean that internal structural (Ford, 2013).

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 35 To that end, the dean has devised an measure of the level of work [the size of the organizational structure that links research position] of the role” and “the longer the activities with program development and time-span of a role and higher the level of expansion while shifting the focus from stu- work” (1989, p. 16). To use this theory in dent credentialing to student success ( see practice, the role of the dean was examined, Appendix B ). Under the new organizational and it was determined that the dean occu- chart, two major subdivisions exist: Career pies what Jaques defines as a Level 4 role. Pathways (the research and development The dean must plan for multiple goals at a arm of the program) and Student Success. time, designing alternative means of Continuing Education is removed entirely, achieving said goals, and maintaining a being a fee-based program, and the various consistent connection across the various ob- courses and programmatic offerings are jectives (Jaques, 1989, p. 27). The determi- grouped under the sites where the programs nation of what constitutes a Level 4 role was are offered. The Student Success depart- confirmed independently by Clement ment focuses on student recruitment, reten- (2008, 2013), Ivanov (2011, 2013), Lee tion, transition and connection. Finally, (2007), and Kraines (2001) in their studies. there is a student research and data analysis department that concentrates on the infor- In examining the roles within the mation of students pending, present, and Workforce Development program, one can past. This will to help the program gather see that the program itself is operating at clear figures on how its activities benefit Level 4. Said another way, the division has students, allowing Workforce Development four layers from the dean’s position to the to make data-driven decisions about how office floor at the bottom of the hierarchy develop the program further in the future and these layers are determined by the time- (Ford, 2013). span of the roles in each layer (Jaques, 1989, p. 19). Given this knowledge and not- In reviewing the organizational struc- ing that in order for the program to reach its tures – current and planned – it becomes full potential to best serve District residents, clear that the leadership of the program is it is recommended that Workforce Develop- operating at specific level. In order to un- ment expand to a Level 5 program in the derstand this concept of organizational op- coming years. This means that the organiza- erating levels, it is best to examine the con- tion is functioning not only across a com- cept of time span as created by Elliott plex set of internal activities, but it is also Jaques (1964, 1990, 2002). Several scholars fully conscious of and closely engaged with have verified the time-span instrument and the impact of its activities externally. This Jaques’ organizational theory (Clement external impact not only includes the pro- (2008, 2013), Ivanov (2011, 2013), Lee gram’s effect on the University of the Dis- (2007), and Kraines (2001). In discussions trict of Columbia system, such as creating on time span, Jaques begins by distinguish- pathways for student success, expanding ing between an employee’s role (“position the university’s enrollment pool, spurring occupied in the organization”) and their students toward greater levels of academic tasks (“assignment[s] to produce specified achievement, but also its influence on the output… within a targeted completion entire District of Columbia by decreasing time…”) (1989, p. 15). Jaques then states, under-and-unemployment, creating a more “The longest of the maximum-target-com- highly-skilled citizenry, affecting material pletion-times of tasks in a role gives a direct economic and social change in the city.

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 36 At the same time, the role of the Not only will the interconnected- dean should expand in the future to a Level ness of the division be crucial for its contin- 5 role, where the dean is focused on “uni- ued success, but Workforce Development fied whole systems.” As a leader, the dean must also be closely aligned with the other will “have to cope by means of judgment components of the university system. The with a constantly shifting kaleidoscope of dean feels that it is imperative that students events and consequences,” “sense intercon- have access to a seamless pathway within nections between the variables in the organ- the system that allows them to transition ization and the environment, and continu- from a Workforce Development non-credit ally adjust them in relation to each other” program to the associate’s, bachelor’s, and (Jaques, 1989, p. 28). In order to make this master’s programs (Ford, 2013). transition effectively, it is recommended that roles further down the organizational Moreover, “a system must create hierarchy are examined and that employees something of value, in other words, results” in those levels are given tasks that are level- (Deming, 1993, p. 52). It is the responsibil- appropriate. This will free the dean from ity of management to “determine those taking on work from lower levels and allow aims, to manage and continually improve the leader to focus on the larger-scale is- processes that work toward those aims” sues. (Deming, 1993, p. 52). As such, Workforce Development leadership must clearly de- Systems Planning fine the purpose of the program, beyond the organization’s mission statement. The The dean’s conclusion that there is a leader must help ensure that all the various need for greater cohesiveness across the or- activities are coordinated in achievement of ganization is in keeping with W. Edward the aim of the program. The dean has al- Deming’s theories on systems (Deming, ready taken steps in this direction, stating 1993). Deming defines a system as “a net- that the organization is getting better at work of interdependent components that cross-training employees so that all em- work together to accomplish the aim of the ployees understand their role in the system system”, going on to say that “the greater and how what they do relates to the next the interdependency between components, step in the program’s activities (Ford, the greater will be the need for communica- 2013). It is suggested that continuous ef- tion and cooperation between them” forts are made by management to ensure (Deming, 1993, pp. 98-99). Going forward, everyone understands the programs opera- all aspects of Workforce Development must tions as a system and the outcomes desired tie in with each other as envisioned in the of the system. Management must increase flow chart below ( see Appendix C ). This systems-thinking in order to improve pro- will diminish the current problem of frag- gram quality. mentation and help all components of the Workforce Development program under- Employee Needs and Pride of stand how their efforts are part of a larger Workmanship system. This will lead to greater understanding, trust, and teamwork across the Beyond the structural theory, it is im- various departments. perative to consider the human side of the organization. One of the challenges that management faces when proponing change

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 37 in an organization is that there is a human that the Workforce Development program element with distinct needs that must be needed to operate more like an intercon- contemplated. nected system. To that point, when talking about pride of workmanship among em- Humans are creatures of needs, some ployees, it is critical to understand that em- more basic than others. Also, as Abraham ployee performance is a factor of the sys- Maslov determines, “human needs arrange tems in which they operate. As Deming themselves in hierarchies of prepotency. points out, “A common fallacy is the suppo- That is to say, the appearance of one need sition that it is possible to rate people. . . The usually rests on the prior satisfaction of an- performance of anybody is the result of a other, more potent need” (2007, p. 111). combination of many forces . . . Apparent Maslov defines the need-based levels as differences between people arise almost en- ranging from physiological needs forming tirely from action of the system they work the base of the hierarchy to safety needs, in, not from the people themselves” then love needs, esteem needs, and finally (Deming, 1982, pp. 109-110). self-actualization needs (2007, pp. 112- 117). Douglas McGregor takes Maslov’s Given this belief – that employee per- ideas further, applying them in the work- formance is determined by the system – and place. McGregor maintained that “unless also knowing, as stated above, that it is the there are opportunities at work to satisfy . . role of management to create effective and . higher level needs [social/ love, ego/ es- quality systems, it is clear that the first order teem, self-fulfillment/ self-actualization], of business among leaders must be to abol- people will be deprived; and their behavior ish practices that rob employees of pride in will reflect this deprivation” (2007, p. 160). their work and create a fearful working en- It is for that reason that management must vironment. consider what Deming calls “pride of workmanship” when rearranging roles within an One such practice is the mandatory organization and when planning deliber- annual performance evaluation. Deming ately for the human element of the work- condemns these assessments, saying “what place. is wrong is that the performance appraisal or merit rating focuses on the end product, Deming concludes that there are 14 at the end of the stream, not on leadership points that management must adopt in order to help people. . .” (Deming, 1982, p. 102). to stay in business, protect their livelihoods, He goes further to state that performance and ensure the jobs of their employees (Out evaluations promote short-term thinking of the Crisis, 1982, p. 23). These points can and short-time performance, reducing eve- be used to evaluate how management is do- rything to a quantifiable measure. He states ing within an organization. While all the that this directly results in employees being points are worth considering, this report’s deprived of pride in their workmanship be- recommendations focus on one of them spe- cause they are always being held to some cifically: removing barriers that deprive subjective numerical standard – how much workers of their right to pride of workman- did they produce, how many people did they ship. serve, how many reports did they generate, how much paperwork did they process, etc. Earlier in this report, the concept of a (Deming, 1982, p. 105). system was addressed, as well as the fact

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 38 Workforce Development, as part of – I estimate 7 to 10 years – to have an the University of the District of Columbia – impact on individuals who are under- which is itself an independent agency of the and-unemployed before the need for District of Columbia – is bound by many of workforce development, as it is cur- the bureaucratic policies enforced on Dis- rently done, no longer exists” (Ford, trict agencies. While it is unclear whether 2013). the University could resolve to abolish performance evaluations, it is certain that the Given this timeline for evident Workforce Development division cannot changes in the District’s social and eco- make the autonomous decision to do so. nomic makeup, the Workforce Develop- Therefore, it is recommended that Work- ment program will seek to do as much job force Development management give only skills training as possible in the coming minimal consideration to the mandated ap- years, hoping to touch at least 5,000 resi- praisals and instead focus efforts on men- dents annually as soon as next academic torship. The dean is already engaging in year (the program currently serves about one-on-one meetings with all levels of her 2,800 residents a year) (Ford, 2013). In or- staff at least once a year (Ford, 2013). It is der to accomplish this goal, the organization recommended that this practice should be will have to operate as efficiently and effec- continued and expanded, so that all manag- tively as possible. At the same time, the ers begin mentorship and engagement activ- dean knows the organization must prepare ities beyond their direct reports but also for what workforce development will look with the direct reports once removed, as like once the manner in which it currently suggested by Jaques (2002). This will pro- operates in the city becomes obsolete. As mote a trusting, pleasant environment for the dean declares, “I want us to be at the staff, one where they feel they are acknowl- forefront of whatever “workforce” is next” edged and appreciated. (Ford, 2013). In the final section of this report are listed the recommendations for Planning for the Future management that will be requisite in accomplishing these aims. In speaking with the dean, she notes that the District is in a unique position in Summary of Recommendations and that it rests in a contained geographic space Conclusion and has a smaller population than many other cities. In looking to the future, the Subsequent to the study regarding dean stated: the need to reorganize the Workforce De- velopment program, the following is a list “The District has a population of over of recommendations this report makes to 600,000 residents, of which at least management in order to accomplish not 100,000 - 125,000 could benefit from only the simple goal of structuring the or- programs at the Community College. ganization to operate more effectively but At the same time, the population is also to accomplish its larger aims regarding shifting, and low-income individuals, creating an organization that provides qual- most of whom are minorities, are be- ity services to District residents. ing pushed out of the District into counties in Maryland and Virginia. The recommendations are: As such, the District has limited time

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 39 • Strive toward expanding to a Level 5 the recommendations and the resulting ac- organization, with a broader focus tions to be taken. If clear plans are put in on the various goals to be accom- place to make these recommendations a re- plished, the myriad of alternative ality, management should find itself with a pathways to accomplish them and to sound organizational structure that is poised the impact of the outcomes on the to work collaboratively and productively to- activity of these goals on the internal ward the needs of today and the goals of the and external community. future.

• Expand the deanship to a Level 5 role In conclusion, there exists the possi- concurrently with the organizational bility that programs such as the District of development and assign level-ap- Columbia’s free job-skills training Work- propriate tasks to employees in the force Development program could be cre- lower levels of the organization hi- ated in other urban centers within the erarchy. United States as a means to combat socio- economic challenges. In the creation of • Focus on systems-thinking and sys- such programs, the recommendations noted tem-creation in order to decrease in this study would provide points of con- fragmentation within the program. sideration for design and for the manage- Purposefully design the organiza- ment processes to be instituted. Support for tion around its interdependent activ- such programs where feasible could poten- ities. Clearly define the aim(s) of the tially serve to make a significant civil im- system. pact in cities across the nation.

• Remove barriers that deprive employ- Acknowledgements ees of pride in their workmanship. In the example of personal evalua- The authors are grateful to Kim R. tions, it was noted that while it may Ford, Dean of Workforce Development and not be in the power of the organiza- Lifelong Learning, University of the Dis- tion to abolish appraisals, it can as- trict of Columbia Community College, for sign them less significance and fo- her valuable support and counsel. cus instead on quality leadership and mentorship activities that create The authors also thank Sherman an environment where employees Cook, Jerry Johnson, and Dr. Edith Westfall feel valued. for providing additional historical details and context on the Workforce Development Management’s next steps will be to Program. Their insights and wisdom are put into action the recommendations listed greatly appreciated. above and to educate the organization about

The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 40 References Retrieved December 8, 2013, from Department of Employment Services: Clement, Stephen D. (2008). http://does.dc.gov/sites/default/files/dc/ Organizational Studies of the U.S. sites/does/release_content/attachments/ Department of the Army Organizations . U.S. Department of the Army: DC%20Ward%20Data%20Sept13- Unpublished Reports. Aug13-Sept12.pdf

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The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 42

Appendix A – Workforce Development Current Org. Chart

Workforce Development & Lifelong Learning Division Dean

Workforce Development Center for Workforce Student Success Continuing Education Nursing Division Strategies Site Operations Assistant Director Director Acting Director 4 Site Directors Director

Project Director Project Director Project Director Transition Deputy Director Coordinator Program Specialist Administrative staff AdminTech Acad. Transportation Acad. Hospitality Prog Vacant

Program Coordinators Project Coordinator Job Developer Project Assistant Full-time Faculty (x3)

Student Success Clerk (P/T) Specialists (x2)

Staff Assistant

Appendix B – Workforce Development Dean of New Org Chart Workforce Development and Two Main Divisions – R&D and Practical Lifelong Learning Application (Student Instruction and Ser- vices)

Student Success Career Pathways Research and Development Student Instruction and Services

Associate Dean Director Director (x6) Director Career Pathways Student Data and Campus Operations Student Success (R&D) Analysis

Nursing and Allied Hospitality Recruitment Retention Health

Transportation Construction Transitions Alumni Relations

Administrative Technology

Appendix C – Workforce Development Program as Flow Diagram

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CHALLENGES OF A SMALL BUSINESS IN THAILAND: HOW TO REPOSITION FOR GROWTH

Treerakit O-phartkaruna School of Business and Public Administration University of the District of Columbia Washington, DC, USA [email protected]

Sergey Ivanov, Ph.D. School of Business and Public Administration University of the District of Columbia Washington, DC, USA [email protected]

Abstract

The garment industry in Thailand is one of the most competitive industries. Success in a competitive industry requires that the company has a great organizational structure and good internal communication. Companies that are able to communicate within the organization well gain competitive advantage over their competitors. This paper conducts an intensive study how to expand a small factory-organization in Thailand. The purpose of this paper is to investigate the existing problems preventing growth of the business to allow it to develop, as well as to try to prevent future problems. Following the study, the researchers then identify several general recommendations applicable to comparable small businesses.

Keywords: Management, Organizational Structure, Organizational Transformation, Organi- zational Study, W. Edwards Deming, Elliott Jaques, Small Business

Introduction And Background Of The The factory is physically small. It Organization employs 15 workers and 50 automated- machineries. The machines work around The organization studied is a family 10 hours a day during the low season and business in Thailand. This family-owned 24-hour-long during the high season, small business runs a garment factory. It which lasts around five months. Working specializes in producing parts of an outfit shift also depends on how busy factory is. such as collars and hems. Everything is Usually the schedule consists of one-to- made to order. The main clients are other two shifts with the maximum of three factories that need our pieces to complete shifts during the peak time. their final products.

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Organizational Structure activities to the owner twice a year. The other assistant manager, on the other hand, The figure below depicts the organi- is in control of the operations. He monitors zational hierarchy and time span associ- the workers and initially tries to solve ated with their position. The hierarchy problems. If a problem is out of hand, he shows the relationship between the jobs then would report it to the manager. He and how much time each position needs to acts as a middle-man between the manager complete their job (time-span), (Jaques, and the workers. Time span of this posi- 1998). Below are the explanations of each tion is flexible (longest task is 1 week) de- level in regards to their jobs. pending on how the kinds of job as well as how busy the factory is.

Time-span Manager

In this organization, the manager is responsible everything, from planning, managing and driving the organization. Even though the two assistant managers assist him in many essential parts of the factory, the manager is still left with numerous responsibilities. In addition to overseeing all the employees below his level, the manager has to deal and contact Workers customers. This latter part is time-consuming and takes a lot of planning since the Most of employees working at the low- company’s capacity is very limited. He est level are only accountable for the day- needs to be realistic about what the com- to-day work. They do not have many other pany can do versus how to grow the busi- responsibilities in the company besides ness. Most of the time, he has to plan 3 their own. Since their job is mainly in la- months in advance. bor, the time span of their work is only one day. They receive work orders directly Owner from the assistant manager each morning. Manager expects them to complete their The owner does not typically interfere job within the day. The only exception is with the organizational management, even when the factory has many orders and em- if it presents a significant problem. He ployees have to work over time. They may gives all authority to the manager and take additional days after, but only after mainly focuses on the financial part (check the manager has given them the permis- the reports every six months). Normally, sion to finish the job late. he would set up missions and long-term goals for the manager to see and follow. Assistant Manager His time span hence is much longer than of others (six months) since he only fo- The next is the assistant manager role. cuses on the overall operations of the com- There are two assistant managers in the or- pany. ganization. First one is the accounting assistant manager who is responsible for all Current Production Procedure the finance activities. He makes financial reports and submits them to the manager This factory is a family business. every week; submit the overall financial The owner of the factory employs his

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brother-in-law as the manager and the one finished orders got delivered to the cus- in action. The manager runs day-to-day tomers. operations of the factory and makes all of the decision regarding the operations. A Manager normal routine for an order starts when a customer calls the manager and places an order. The manager first looks at the pro- AssistantManager Accounting Assistant- duction line and calculates how much time Manager needed to finish the job. He then lets the customer knows right away when our driver will deliver the order. Because the manager also takes control over the pro- Workers duction line, he proceeds to create work schedule for all the workers. The routine repeats itself when new orders come and This structure is destructive as According to the chart above, the there is no clear hierarchy in their work. manager is in charge of supervising every- As the example has suggested, any em- one under his control. Even though he is ployee can go straight to the manager for the one who creates the schedule for all the every issue they have, bypassing the assis- workers, the general assistant manager is tant manager. It means when a problem the one who actually receives the sched- arises, the production has to be stopped ule/ commands and distributes to the until the manager returns to make a deci- workers. Conversely, the accounting assis- sion. A small problem that could have tant manager does not have any contact been avoided becomes very serious due to with the lower lever works because he the wait. One time, the manager was in a works solely on the finance. meeting while a truck broke down, the driver waited for two hours to hear what Problem Analysis the manager wanted him to do. Finally, the driver could not make the delivery on time According to the study surveys (con- and the customer was unpleased. It simply ducted in 2013), many workers think that ruins our reputation and becomes very this production procedure is not as effec- costly over time. tive and functional as it should be. Mal- functions or conflicts arise when the man- Furthermore, since the manager is ager and the assistant manager miscom- very busy, he has no time to think about municate and direct the workers differ- expansion. When an organization does not ently. The workers, hence, get confused expand, it is actually going backward as it about who they should obey the order. For only relies on current customers (Ivanov, example, the manager told a production 2013). The expansion plan is a big thing line worker to deliver an urgent order to a that requires a lot of time and attention. customer. But when he was about to leave, Though the manager knows it is important, the assistant manager ordered him to stay he simply is overwhelmed by all the re- and finish his job instead. The reason was sponsibilities. He does not have enough that the worker was not the driver. In the time to search for a new location, find new end, the order did not get delivered on time customers, or invest in new machineries. and the company eventually lost money The expansion plan, hence, has been hold- and a loyal customer. ing off.

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The organization has lost many great Once these changes have taken place, opportunities, especially with potential for- the company should grow more prosper- eign clients because of this limitation. The ously. The capable manager will have time current factory simply does not have the to expand the business while the employ- capability to produce big orders. All the ees are happy to see advancement in their machines were bought 6 years ago when career. the organization first started. They are outdated and need more advanced technology. Based on this study, we would like to New machineries will help the factory to propose the new structure for the com- produce more efficiently. Nevertheless, pany. even if we get more machines, the ware- house will also be too small to put them, as well as to stock up the extra inventory. Owner Manager

Another problem the organization is facing is in regard to the business strategy. Accounting Assistant Man- The organization has been using the same Assistant ager Manager strategy since it was founded years ago. It has yet to apply new ideas. Comments and suggestions from employees are not heard. Workers For instance, one employee suggested the company to produce a seasonal promotion to attract new customers as well as to rein- This new production line would be force the loyalty of the current customers. more effective and efficient than the cur- The idea did not fly because everyone was rent one. Each position gets proper portion waiting for the manager to make time and of responsibility and knows exactly what decide on the outcome. they have to do. The workers now know exactly who they should go to when issues Findings and Recommendations arise. The only one who talks, advices and distributes work to the workers is the assis- The factory depends too much on the tant manager. Then, malfunctions or con- manager. Power and authority should be flicts will not occur. decentralized to other employees. To do that, the manager need to create a manage- Both assistant managers are com- ment structure, appoint qualify employees pletely separated from each other. Each as- to take charge in specific work areas. Once sistant manager concentrates on his jobs. the new production procedure is set-up, the The first assistant manager is only respon- manager will have less day-to-day work sible for the operation such as work sched- and more time to concentrate on the big ules and operation issues. His jobs are dis- picture and the future of the company. tributing works and communicating to the workers. He is a representative of the man- Moreover the manager should encour- ager. When problems occur, he is the first age the workers to present new ideas. Not manager to solve them. The other assistant only does the organization benefit from di- manager will report directly to the owner. verse inputs and real work experience, but He is still responsible for all of financial it also promotes employees self-esteem as activities and does not have to pass the their ideas contribute to the company manager. growth. The manager does not have to deal with finances anymore. He would focus on

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the overall picture of the organization. 3) Owners, spending too much time in the Therefore, he will have time to expand the smaller operations of the business, do organization prosperously working on ex- not dedicate enough time towards busi- pansion. ness growth

General Recommendations Based on this study, we recommend and Conclusion that owners of small businesses, interested in growing their business, address these is- Having conducted the study of the sues. To reposition their organizations for small factory in Thailand and its chal- growth, they have to create a clear organi- lenges with growth of the business, we zational structure, find competent manag- identified the following general obstacles ers to run day-to-day operations, so that to preventing growth: free up their own time to work on new business development and strategies. 1) Unclear Organizational Structure 2) No Working Role is Dedicated to New Business Development

References

Abdous, M., & He, W. (n.d.). Retrieved Jaques, E (1956). Measurement of respon- from www.irrodl.org sibility . Cambridge, Mass: Havard Uni- versity Press. Deming, W. Edwards (1992).Out of the Crisis. Cambridge, MA: Massachusetts Prosci.(n.d.). Retrieved from www.pro- Institute of Technology. sci.com

Ivanov, Sergey (2011). Why Organizations Russell Mickler. (n.d.) Retrieved from Fail: A Conversation About American www.micklerandassociates.com Competitiveness. International Journal of Organizational Innovation, 4(94), 110-16.

Ivanov, Sergey (2013).Defects in Modern Organizations: Field Findings and Dis- covery.International Journal of Innova- tion, Management and Technology, 4(2), 204-208.

Ivanov, Sergey (2013).General Lecture, Innovation and Growth .

Jaques, E. (1964). Time span hand book . London: Heinemann Educational Books Ltd.

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GROWTH STRATEGIES FOR VERY SMALL ORGANIZATIONS: A CASE STUDY OF A VERY SMALL ENTREPRENEURSHIP

Bello Bello School of Business and Public Administration University of the District of Columbia Washington, DC, USA [email protected]

Sergey Ivanov, Ph.D. School of Business and Public Administration University of the District of Columbia Washington, DC, USA [email protected]

Abstract

This paper analyzes challenges that hinder growth of Global Street Real Estate. In addition, it examines various strategies that could aid the growth of the company. The ultimate goal of this paper is to explore growth strategies for small entrepreneurships.

Key Words: Growth Challenges, Strategies, Small Business, Entrepreneurship

Introduction Global Street also employs other subcon- tractors specifically for architectural and About The Company engineering work.

Global Street Real Estate is an in- The company currently embarks on vestment management company that spe- about five projects annually. Each project cializes in property acquisition and devel- takes about three months from start to fin- opment (2013). The company is based in ish. Washington DC. Global Street also offers secure programs designed for people that Methodology are interested in investing their capital as well as retirement funds. The purpose of this paper is to examine Global Street Real Estate with regard Global Street is a limited liability to growing the company. This paper will company. The company is run by its then provide recommendations towards owner, and it has five permanent employ- addressing the issue of growth. The survey ees in total. The manager reports to the questions below are intended to determine owner, but he is also responsible for over- the goals of Global Street, how the owner seeing the work of four specialty workers. plans to attain them, and the challenges The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 51

that hinder the growth of the company. mechanics, engineers, and chemists, who The survey questions below were pre- had a sincere interest in quality of prod- sented to the Owner of Global Street in ucts. Now these companies are largely run October 2013. by men interested in profits, not product. Their pride is in P & L statement or stock During the survey, the owner admit- report.” Obsolescence in this case refers to ted that although the company must grow, fear of innovation. Fear, according to he is not sure of how to effectively manage Deming (1992), and Ivanov (2011, 2013) growth. For now, the owner has a three- are detrimental to all organizations. year plan to increase the number of annual projects to about ten, with a focus on con- Although Global Street is a small dominiums. business, its growth could be hindered by the fear of out-growing the traditional Survey practices of the real estate business. For example, instead of embarking on more 1. What challenges is your company cur- projects, the company could invest in rently faced with? Green Technology. As Ivanov (2013) sug- 2. What have you learned from your em- gests, it is necessary for the leadership of a ployees as a leader? company to focus on innovation. Global 3. How do you determine what building Street could focus on doing research in projects to embark on? sustainable design innovation. Although 4. How long does it take to complete a this might seem to be a daring step, I be- project? lieve that with focus, it is possible for any 5. On a given project, what factors do courageous company to grow. you consider before you partner with another company? (ii) Marketing 6. Given the opportunity, what would you change in the Real Estate industry? On the other hand, if the company 7. If you could, would you rather do decides to hire more specialty workers, something else instead of what you are Global Street could consider the option of doing now? attracting more investors by focusing on 8. Compared to the Real Estate environ- marketing. During the survey, the owner ment, what adjustments would you like told me that he considered increasing his to make to your company? workforce although he had to acquire more 9. Where do you want Global Street to be projects before he could do that. From a in five years? business standpoint, no one would invest 10. How are you planning to reach your in a company if they do not know that it is goal? performing well. Therefore, attracting more investors depends not only on perfor- Survey Results mance but also on brilliant marketing.

(i) Obsolescence (iii) Strategic Alliances

While surveying the Owner of Another alternative growth strategy Global Street, I discovered that the com- is for Global Street to consider forming a pany seemed to suffer from Deming-iden- strategic alliance with a more experienced tified management disease of Obsoles- real estate firm. As a result, there would be cence. According to Deming (1992), less risk on the part of Global Street. By “practically all of our major corporations partnering with a more experienced com- were started by technical men- inventors, pany, Global Street would learn how to

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grow while working simultaneously. How- work which matches his potential capabil- ever, the owner would have to persuade ity and for which an equitable differential shareholders that a strategic alliance would reward is provided.” This suggests that in grow the company in the long term. the case of Global Street, its employees will eventually feel under-employed if Conclusion they are not challenged by more complex tasks. Therefore, it is necessary for the The observations made above all company to improve on its business prac- center around innovating and improving tices as well as take innovative steps to- Global Street’s business practices. Accord- wards growing the company. On a general ing to Ivanov (2013), an organization can note, small businesses do not necessarily only survive when it innovates and im- have to become corporations. They could proves. Moreover, Jaques (1999) famously remain small and still perform excellently stated that “Leaders create an environment by adopting innovative practices and im- which everyone has the opportunity to do prove constantly.

References

Deming, W. Edwards (1992). Out of the Cri- Ivanov, Sergey (2013). Defects in Modern Or- sis. Cambridge, MA: Massachusetts Insti- ganizations: Field Findings and Discovery. tute of Technology. International Journal of Innovation, Man- agement and Technology, 4(2), 204-208. Deming, W. Edwards (1993). The New Eco- nomics: For Industry, Government, Educa- tion. Cambridge, MA: Massachusetts Insti- Jaques Elliot, Requisite Organization: A Total tute of Technology. System for Effective Managerial Organiza- tion and Managerial Leadership for the Clement, Stephen D., Clement, Christopher R. 21 st Century , (Arlington, VA, Cason Hall, (2013). It's All About Work: Organizing 1989) Your Company To Get Work Done. The Woodlands, TX: Organizational Design Jaques, Elliott (2002). The Psychological Inc. Foundations of Managerial Systems: A General Systems Approach to Consulting Global Street Real Estate LLC (2013), Psychology. San Antonio, Texas: Midwin- www.globalstreetllc.com ter Conference of the Society of Consult- ing Psychology. Global Street LLC (2013), Facebook , https://www.facebook.com/pages/Global- Street-Real-Es- tate/319237041432936?sk=info

Ivanov, Sergey (2011). Why Organizations Fail: A Conversation About American Competitiveness. International Journal of Organizational Innovation, 4(94), 110-16.

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APPLYING BUSINESS LESSONS TO EDUCATION: MENTORING AS JOB-EMBEDDED PROFESSIONAL DEVELOPMENT

Dr. Nathan R. Templeton Department of Educational Leadership Texas A&M University – Commerce [email protected]

Joshua W. Tremont* Lamar University *Corresponding Author: [email protected]

Abstract

Mentoring is a form of nurturing that not only impacts professional practice but affects school climate and morale, as well. As educators continue to experience an attrition rate that exceeds other professionals, the intentional administrator must begin to implement effective strategies for the induction and development of campus faculty. While current trends advocate using outside sources to develop comprehensive professional development plans, this best-practice papers seeks to inform professional practice by using mentoring as a form of job-embedded training that aligns professional development with the demonstrated need and identified goals of educators.

Keywords: mentoring, professional development, teacher retention, teacher improvement

Teacher attrition has attracted consid- 2000), there appears to be some disconnect erable attention as national policies – as policy makers continue to overlook the aimed at improving student outcomes, in- cyclical nature of continuous professional creasingly focus on recruiting and retain- improvement. As such, schools continue ing more qualified and effective teachers to succumb to the pitfalls of standards- (Boyd et al., 2005). Moreover, as the trend based education reform, the premise of in education continues to shift toward ad- which believes the setting of high stand- ditional accountability matrixes, the dis- ards and establishing measurable goals cussion regarding a connection between alone can improve individual outcomes in teacher retention and student achievement education. Improving individual outcomes continues to elude most educators. While in education is a dichotomy that must shift focusing on teacher quality is a laudable from the isolationism of understanding stu- goal and research supports the connection dent needs to a more holistic process of re- between the quality of teachers and student sponding to adult needs that in turn facili- academic success (Darling-Hammond,

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tate the creation of new knowledge struc- one solution for bridging this gap and one tures in students. Literature suggests that lesson where business may have the right the focus of professional development has answers. In An Administrator’s Guide to shifted from the district to the school level, Better Teacher Mentoring, Fibkins (2011) from fragmented efforts to comprehensive establishes the foundation for the text by plans, from off-site training to job-embed- reminding the reader of the need for for- ded training, and from generic skills to a ward thinking educators to embrace a busi- combination that includes content-specific ness model for the induction of employees. skills (Sparks & Hirsh, 1997; Mertler, “We live in a world in which mentoring, 2013). coaching, team building, and empowering have become standard practices for many Improving traditional models of successful corporations and corporate professional development often focus on leaders” (p. 1). Schools are beginning to community issues and challenges rather use terms synonymous with those who than on the specific and demonstrated compete in a global economy; terms like needs of each educator. By contrast, men- human capital or partner relations. As toring is a product of personalized learning Smith (2009) describes, human capital is and choice, as each collaborative exchange the set of skills that an employee acquires between mentor and mentee is innately tai- on the job, through training and experi- lored to meet the strengths and needs of ence, and which increases that employee’s the intentional educator seeking to impact value in the marketplace. Certainly, educa- professional practice. tors have resisted the intentionality of investing in employees through ongoing pro- Moreover, mentoring is a form of fessional development. Admittedly, educa- coaching that supports individual develop- tion is the great equalizer in our competi- ment. Whether learning new skills or re- tive global economy; however, “ongoing thinking developed ones, mentoring transi- mentoring for teachers - investing time and tions teachers to exceed expectations money into their professional development through emersion in a supporting process – has not caught on in the same way it has that addresses differing levels of readiness in the corporate life” (Fibkins, p. 1). while being sensitive to those differences by finding resources to support each per- While schools are not immune to the son’s developmental goals. challenges of becoming change-agents, Fibkins (2011) discusses strategies that af- Fibkins (2011) likens teaching to a ford the means for the intentional adminis- performance art – one where those who are trator to restructure their roles. Central to classically trained (performers) persist at this premise is for the administrator to improving their craft through countless begin the process of collaboration with hours invested in honing and refining a set stakeholders. For example, the establish- of unique skills that may take a lifetime to ment of a mentoring team comprised of truly master. In much the same fashion, “competent educators who are known and teachers should accept the role of practi- respected by the school” (p. 4). Other cam- tioner; that is, to understand that the pro- pus leaders, including department heads, cess toward becoming effective is a con- lead teachers, and assistant principals are tinual journey replete with successes and logical choices suggested by the author. failures. However, it is the failures that One is in agreement with this process of may cause deeper issues for educators. shared leadership, as transformational Teachers often lack immediate support leadership is necessary for creating a cul- systems that enable immediate feedback ture of sustainability. As Fibkins (2011) aimed at skill development. Mentoring is chimes, “the potential for professional

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growth involved in effective mentoring is track records of failures and successes in not just for teachers. In developing a public education. Intentional administra- trusted mentoring role with teachers, ad- tors must validate the process by first fo- ministrators also create a teacher-learner cusing conversations on improving teacher climate in which they, too, become open to effectiveness. “Teachers can overcome examining their own skills [and strengths]” their lack of experience, skill, and self- (p. 9). awareness with caring interventions by mentors who can dignify their worth and at Interestingly, and moving beyond a the same time help them learn new, effec- more traditional function of using mentor- tive approaches” (Fibkins, p. 30). To high- ing to improve attrition rates for new light: Wise mentors have perspective. As teachers, Fibkins’ (2011) approach speaks effective educators, wise mentors have ex- of creating a learning environment for all perienced the battle scars of teaching. Not teachers by framing discussions on teach- only are they practitioners in the field, they ing and learning and striving to develop affirm the day-to-day demands of the each teacher into a competent master teacher: “confrontation, care, deflection, teacher. “The mentor’s task is to find ways encouragement, reprimand, and more” to help teachers reach their goal of improv- (Fibkins, p. 31). Wisdom also prevails ing. It is a worthy goal. When educators when challenging teachers to have the see fellow teachers and their students courage to grow professionally. floundering, it is [a] professional responsibility to help them better their craft” (p. Wise mentors understand that teach- 23). ing is rewarding because of the time invested in the process. Teaching involves Implications for Administrators cycles akin to those in life; however, the constant is hard work. One affirms Fib- Education always lags behind the kins’ (2011) call for self-renewal in the curve of innovation. In fact, education face of the inherent risk of improving tends to be a more reactive practice than a one’s skills and forging new directions. proactive one. As such, administrators One applauds the idea that “effective men- must begin to have forward-thinking dia- toring helps teachers understand that their logue about improving practice through greatest potential for growth comes from relevant job-embedded professional devel- accepting students who rebuff their good opment. So many times, teachers report intentions. It is the teacher’s job to figure that professional development sessions are these students out – to sweat, try new ap- often unrelated to specific skills needed or proaches, fail, be tough, be soft, do what- are just a complete waste of time. Why not ever it take takes to win over these stu- use the human capital available within the dents” (Fibkins, p. 33). One also applauds school to target and improve areas of the author for correctly clarifying that the demonstrated need. While not taking any- teacher’s ultimate validation comes from thing away from providers who sponsor self-reflection, not student feedback. professional development activities, it is more beneficial for the campus administra- Wise mentors understand that build- tor to align each educator in need of assis- ing trust is a product of loyalty and pri- tance with a peer or group of peers who vacy. Teachers are like everyone else; they can directly impact professional practice in frequently encounter personal issues that a meaningful and deliberate manner. threaten their ability to be successful in the classroom. In order for the mentor protégé The central task is to select wise men- relationship to flourish, all parties must tors – those educators who have proven agree to share openly, as “trust and loyalty

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spark renewal and allow one to take risks” tional and professional) is necessary to dis- (Fibkins, p. 36). Veteran educators are cover and discard the inner demons as the aware of the power of the tongue and its intentional educator searches for his residual effects on a culture of trust. Effec- unique teaching self (Fibkins, 2011). As tive mentors must build the foundation with students, it’s not about what teachers whereby “teachers [freely] talk about per- know but rather how they learn. sonal issues that may be affecting daily work” (Fibkins, p. 38). Reflection and Discovery

The wise mentor understands his Intentional improvement for educa- charge of developing the capacity of the tors begins with what Mertler (2013) em- protégé. “The eventual maturing of the phasizes as the integration of professional protégé into mentor should be a cherished reflection throughout the mentoring pro- goal” (p. 39). With an understanding of cess as a form of job-embedded profes- sustainable leadership, one affirms the au- sional development. Administrators must thor’s intentions of perpetuating the cycle dialogue with colleagues regarding this es- of professional growth by encouraging and sential progression toward self-discovery. nurturing the skill set of intentional educa- Reflective journals not only assist with tors. learning from successes and failures by articulating celebrations and challenges Wise mentors are skilled communica- along the path, this deliberate approach tors. “Successful mentors know how to in- serves as a basis for improving learning tervene, listen, be non-judgmental, give and teaching. Further, the process aims to constructive and accurate feedback, con- narrow the gaps between theory and prac- front failure-causing behaviors, support tice, an essential skill lacking in many successful and failed efforts to change, be young educators. As the late Sydney Har- available for counseling on educational ris, a former columnist for the Chicago and personal issues, and be a general advo- Times wrote, “the whole purpose of educa- cate for their protégés (Fibkins, p. 42). tion is to turn mirrors into windows” One affirms that mentors cannot know (n.d.). everything about every subject or situation; however, Fibkins’ (2011) admonition To further clarify, reflective practice to “be [your] brother’s keeper” (p. 45) is is a process of continuous improvement appreciated and well received. Having ap- whereby the educator learns from those propriate support systems in place, where critical episodes in life. The process looks “informal learning and exchange are ongo- something like: Experience (actions past ing and easily accessible” (p. 54) is para- and present), Observation (documenting mount to success for the mentor and the what happened), Reflection (making sense protégé. by investigating) and Planning (making plans for future action). It is this last part Finally, wise mentors will assist that is somewhat intriguing. Effective teachers in finding their personal teaching mentoring is about facilitating conversa- voice by “encouraging the evolving tions that enable both parties to struggle teacher to look within himself, identifying with meanings and events in order to ef- strengths as well as areas that need im- fectively plan for what’s next. In other provement” (Fibkins, p. 50). The discus- words, mentoring becomes a form of form- sion again centers on reflective leadership, ative evaluation. and perhaps a better connection should be made here. Renewal (i.e., personal, institu- Individual Performance Goals

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Planning for what’s next is a matter If the guiding question for the week is im- of bettering ones craft and begins with es- proving classroom management, the men- tablishing an Individual Success Plan or tor may first guide his protégée through a ISP. What is it that I need my mentor to study of best practices as included in a re- help me improve and what is our timeline? cent journal article. Next, the protégée How will we determine skill mastery or may be asked to formulate a line item in pedagogical improvement? How will I the ISP to address needed improvements deal more effectively with challenges and as documented from a recent classroom how can my mentor support me in this en- visit. At the next classroom observation, deavor? These essential guiding questions the mentor may ask permission to video frame the basis for setting individual per- the teacher during the presentation of the formance goals. The quest of the mentor is lesson. During a follow-up conference, this to keep the mentee on track through col- video may be compared with one from an- laboration, support, and intervention. For other effective teacher in order to draw in- example, if the goal is to improve technol- ferences and conclusions about improving ogy integration by a specified date and practice in this area. Likewise, the current both parties have agreed on what success- video may be paired with an older one to ful representation will look like, it is in- demonstrate growth. In this manner, the cumbent upon the mentor to keep the edu- teacher has not been told what to do but cator squarely focused on the acquisition has instead participated in a collaborative of new knowledge and the improvement of learning activity that eventually leads to a specific skill sets. Secondly, the mentor desired outcome. must assist in evaluating in a thoughtful and collaborative manner that affords the Conclusion opportunity for sustained growth and development. It is noteworthy to mention Mentoring invests in people. “Men- that an ISP may be needed as often as toring is different. It is a shared role that weekly or infrequently as every 4-6 weeks requires delicate and caring intervention and may be revised as necessary to ac- and feedback. It is a slow process built on count for growth and obstacles. mutual trust and self-respect. It only works when both parties, the mentor and the pro- Modeling through Collaborative Learning tégé, clearly understand the areas that need improvement and how the mentor can be Mentors must be allowed release time useful” (Fibkins, 2011, p. 2). The over- to observe protégées and vice versa. Mod- arching goal of each campus administrator eling is an effective teaching tool and one must be to invest in students by investing that facilitates improving practice through in teachers. Use mentoring for its intended study and dialogue. Therefore, mentors use – to build capacity in people and to must be allowed time to conduct informal empower their sustained collective growth. and formal walk-throughs and evaluations.

References

Boyd, D. J., Lankford, H., Loeb, S., & Economic Review Proceedings, 95(2), pp. Wyckoff, J.H. (2005). Explaining the 166-171. short careers of high-achieving teachers in schools with low performing students. American

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Darling-Hammond, Linda. (2000). Teacher quality and student achievement: A review of state policy evidence. Education Policy Analysis Archives, 8(1), 9-16.

Fibkins, W. L. (2011). An administrator’s guide to better teacher mentoring. Lanham, MD: Rowan and Littlefield Education.

Mertler , C.A. (2013). Action research: Improving schools and empowering teachers (4th ed). Thousand oaks, CA: SAGE Publications.

Price, K. M., & Nelson, K. L. (2011). Planning effective instruction: Diver- sity responsive methods and management (4th ed.). Belmont, CA: Cen- gage Learning.

Smith, R.E. (2009). Human resources administration: A school-based perspective (4th ed.). Larchmont, NY: Eye on Education.

Sparks, D. & Hirsh, S. (1997). A new vision for staff development. Alexan- dria, VA: Association for Supervi- sion and Curriculum Development.

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CONSTRUCT OF EDUCATIONAL INFORMATION SYSTEM’S USING WILLINGNESS MODEL: AN EXTENDED APPLICATION OF TECHNOLOGY ACCEPTANCE MODEL

Tung-Liang Chen Graduate Institute of Technology Management Chung-Hua University, Taiwan, R.O.C. [email protected]

Hsu-Kuan Liu Department of Hospitality Management I-Shou University, Taiwan, R.O.C. [email protected]

Shu A-Mei Lin Graduate Institute of Technology Management Chung-Hua University, Taiwan, R.O.C. [email protected]

Abstract

The dropout rate has always been considered to be a significant indicator of educational success or failure. According to the relevant research results, the dropout rate has a huge influence on the prevalence of social problems. This study attempted to integrate TAM with information system quality and re-construct the willingness to accept the model of dropout notification and return to school system in order to provide reference points for improving the outcomes of helping to find dropout students. The total number of 165 valid questionnaires of was collected to explore the willingness to use the dropout notification and return to school system and strengthen the TAM model from the perspective of quality. The research results show that effectiveness and interactivity of the system indeed had significant positive influence on user attitude. Comparing to the original technology acceptance model, this proposed The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 60

educational information system integrated model will be able to better explain users’ behavioral intentions toward using the dropout notification and return to school system. On the other hand, considering the purpose of establishing the dropout notification and return to school system, enhancement of the stability of the system will make the relevant units better able to save and search information at the appropriate time, which not only can increase users’ positive attitudes but also can strengthen users’ willingness to use the system.

Keywords: dropout, technology acceptance model, structural equation modeling

Introduction In general, most studies have employed the Technology Acceptance Model (TAM) The dropout rate has always been con- to explore users willingness to use a new in- sidered to be a significant indicator of edu- formation system; however, some studies cational success or failure. According to the have pointed out that TAM still has room relevant research results, the dropout rate for improvement in its predictive capability has a huge influence on the prevalence of of information system use willingness. social problems (Cohen, & Smerdon, 2009; Therefore, researchers must integrate appro- Somers, Owens, & Piliawsky, 2009). In or- priate assessment variables according to the der to solve dropout problems, the Ministry characteristics of the case study, so as to be of Education built an online dropout notifi- able to suggest a more effective strategy. cation and return to school system in 1994 Accordingly, this study attempted to inte- for the relevant units to utilize. The main grate TAM with information system quality purpose was to have each junior high school and re-construct the willingness to accept and elementary school go online, via this re- the model of dropout notification and return porting system, to immediately report the to school system in order to provide refer- status of students dropping out, being lo- ence points for improving the outcomes of cated, and their returning to school, as well helping to find dropout students. as transmitting information about unac- counted students to the National Police Ad- Literature Review ministration for assistance in finding the students in question. The Ministry of Education Technology Acceptance Model (TAM) hoped to understand the flow of dropout students through the construction of an infor- Because of the rapid development of mation system in order to provide subse- information technology, understanding the quent counseling services. However, rele- willingness of consumers to accept new in- vant studies have not examined the effec- formation technology has become one of the tiveness of this online system in helping to most important considerations for any cor- locate dropout students. The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 61

porate planning strategy blueprint. Accord- of effectiveness in information technology- ingly, Davis (1989) first proposed the Tech- related research areas, in order to improve nology Acceptance Model to represent the the overall explanatory power of the model, consumers’ mental processes when using in- most studies based on TAM have added formation technology. Generally speaking, other relevant research variables according TAM consists of five variables: perceived to the characteristics of the research topics ease to use, perceived usefulness, attitude, in order to better explore users’ behavior in- behavioral intention, and actual usage be- tentions. Therefore, this study continued to havior. Perceived usefulness and perceived explore the possible elements that impact ease of use are considered the two key ele- the service quality of online information ments that affect consumer acceptance of in- systems and further filter the appropriate information technology. tegrated variables according to the functions and established purpose of dropout notifica- Since TAM can assist managers by tion and return to the school system. easily explaining the basic elements that influence consumer acceptance of information Information system quality model technology, as well as having been supported by relevant studies (showing that In response to the trend of IT-enabled TAM has a high predictive power of the ac- service, DeLone and McLean (1992) pro- ceptance of new technology), TAM has posed an information systems success model been widely used in other management ar- of six dimensions that comprises system eas. For example, Cheng, Lam, and Yeung quality, information quality, use, user satis- (2006) applied TAM to investigate the will- faction, individual influence and organiza- ingness of consumers to use Hong Kong tional influence. Although this model differs web banks and further integrated cognitive from previous product or service centered network security; test results proved that the measures, later studies indicated that if the integrated model has the ability to forecast assessment model cannot integrate service customer behavior intentions. Kim, Lee and quality variables, subsequent strategic de- Law (2008) also used TAM to explore per- velopment misjudgments can occur. Ac- ceived ease to use, perceived usefulness, us- cordingly, DeLone and McLean (2003) in- ing attitude, actual use, quality and quantity cluded service quality dimensions in the of information system, perceived value and original success model in order to apply users willingness to accept the hotel front willingness to use through a procedural per- desk management system, and they devel- spective. As shown in Figure 1. system oped an extended modified model. quality, information quality, and service quality all can affect the usage of the infor- Summarizing the above mentioned mation system and user satisfaction while studies, although TAM has a certain degree The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 62

usage and user satisfaction can influence in- and E-RecS-QUAL to assess online suppli- dividuals and in turn affect the organiza- ers’ quality performance, in which the ES- tional performance. QUAL scale included the four quality dimensions of efficiency, fulfillment, system On the other hand, Barnes et al. (2001) availability, and privacy, whereas the E- pointed out that a successful information RecS-QUAL scale evaluated the vendors’ systems quality model not only needs to em- ability to handle special conditions. There- phasize the hardware features and function- fore, quality dimensions can be divided into ality of the website, but also should consider quick response, compensation, communica- the system’s communication and integration tion, and liaison. capability. For example, after the empirical study of an auction site, Barnes, et al (2001) One of the main objectives of this divided quality measurement into three cate- study was to explore how to enhance peo- gories: (1) website information quality, (2) ple’s willingness to use the dropout notifica- website interaction quality, and (3) website tion and return to school system. However, design quality. Zeithaml, et al. (2002) and the educational information system this Parasuraman et al. (2005) employed an ex- study explored was a non-profit type, so not ploratory study and constructed ES-QUAL

Figure 1. DeLone and McLean model of information system success all of the assessment dimensions of online hand, since the information system exam- transactions used in the previous studies are ined by this study requires educational units fully applicable to this case study (such as: to notify and pass the information to police privacy and compensation). On the other units, this reference information for conducting follow-up tracking and helping to find dropouts is unique to the current study. The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 63

System interaction, stability and effec- system quality dimensions to explore the tiveness of this system are extremely im- key influencing elements of the willingness portant for the success of tracking and locat- to use the dropout notification and return to ing dropouts. Accordingly, this study used school system. TAM as the base and further integrated effectiveness and interactivity of information

Interactivity H6 Effectiveness H5 Perceived H4 Attitude Willingness to Use Useful ness H3

H2 H1 Perceived Ease of use

Figure 2. Integrated educational information system model

Research Methodology and Wong (2009) used TAM as the research framework to study 495 pre-service teachers This section mainly describes the re- from Singapore and Malaysia and their will- search framework, research hypotheses and ingness to use the teaching system; the re- measurement of each research dimension. search findings were in accordance with the relational structure of TAM. Park, Roman, Research Hypotheses and Research Lee, and Chung (2009) used TAM to inves- Framework tigate the behavioral intention of influencing people to adopt a digital library system and In the past, studies related to TAM pri- also used Africa, Asia, and Central / Latin marily explored the willingness of consum- America locations for the case studies. ers to accept new information/ technology Based on a sample of 1082 respondents, products and verified that TAM has a cer- perceived ease of use of the library systems tain level of predictive effect on the willing- had a significant impact on the perceived ness of acceptance (Cheng, et al., 2006; usefulness of those systems, eventually Kim, et al., 2008). Recently, because more leading to a willingness to use. Following people are placing great importance on the upon the studies mentioned above, this quality of education, many scholars have be- study proposed the following hypotheses: gun to apply TAM to investigate the teaching system. For instance, Teo, Lee, Chai, The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 64

H1: The higher the relevant unit’s perceived have a positive attitude towards using the ease of use of the dropout supporting sys- system. tem, the higher the relevant unit’s perceived usefulness. H6: The higher the relevant unit’s cognitive interactivity of the dropout supporting sys- H2: The higher the relevant unit’s perceived tem, the more likely the relevant unit is to ease of use of the dropout supporting sys- have a positive attitude towards using the tem, the more likely the relevant unit is to system. have a positive attitude towards using. In sum, the integrated educational in- H3: The higher the relevant unit’s perceived formation system model proposed by this usefulness of the dropout supporting system, study is shown in Figure 2. the more likely the relevant unit is to have a positive attitude towards using. Questionnaire design

H4: The higher the relevant unit’s attitude The questionnaire for this study con- toward using the dropout supporting system, sisted of three main parts. The main purpose the higher the relevant unit’s using inten- of the first part was to understand, from the tion. perspective of technology, the willingness to use the dropout notification and return to Even though perceived ease of use and school system. So the assessment contents perceived usefulness are considered to be included TAM variables (perceived ease of the key elements affecting user attitude, nu- use, perceived usefulness, attitude, and will- merous studies have indicated that adding ingness to use). The relevant assessment appropriate external variables is extremely items were modified according to the study important to strengthen the predictive capa- of Davis (1989). bility of the model as a whole, according to case characteristics. Accordingly, this study The main purpose of the second part of chose system effectiveness and interactivity the questionnaire was to strengthen, from of web service quality as the external varia- the perspective of quality, the TAM model. bles influencing willingness to use the edu- However, considering the uniqueness of the cational information system and proposed case study, this study only assessed effec- the following hypotheses: tiveness and interactivity dimensions of the system, and related items were modified H5: The higher the relevant unit’s cognitive based on ES-QUAL E-RecS-QUAL. effectiveness of the dropout supporting system, the more likely the relevant unit is to

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The last part was the basic information Regarding validity, this study first fol- survey of the respondents, included the re- lowed the recommendations of Hair et al. spondent’s gender, age, occupation, and ed- (2006). When the absolute value of each ucational level. Relevant assessment items variable factor loadings is greater than 0.5 of TAM and effectiveness and interactivity and reaches a statistically significant level, it of the system are summarized in supports that the measurement model has a good fit. From the analysis results of Table Research Results 1, we can see the absolute value of each variable factor loadings ranges from 0.626 to This study collected 182 questionnaires 0.867; accordingly, the convergent validity after four weeks of distribution. After delet- of this questionnaire is good. On the other ing questionnaires with incomplete re- hand, the results indicated average variance sponses, the total number of valid question- extracted (AVE) of each assessment dimen- naires was 165. The following describes re- sion ranges from 0.60 to 0.74, higher than liability and validity of the questionnaire re- the correlation coefficient between two di- sults as well as results of structural equation mensions, thus indicating good discriminant modeling analysis, the path effect analysis validity. Overall, the construct validity of of the integrated model of educational infor- the scale is supported. mation system, and final review of the hypotheses for support. Structural equation modeling analysis

Reliability and validity analysis The authors first conducted a goodness-of-fit test of structural equation model- Cronbach's alpha value was used as the ing on the proposed educational information basis of judgment for the reliability of the system integrated model in order to confirm questionnaire, and according to the recom- that the research model and the observed mendations of Nunnally (1978), if data had a good fit. Following that, they un- Cronbach's alpha value is higher than 0.7, dertook path effect analysis. the questionnaire has high reliability. Ac- cording to the analysis results of Table 1, Goodness-of-fit test of structural the reliability values of each factor dimen- equation modeling sion ranges from 0.828 to 0.920. Further- more, in terms of construct reliability value A goodness-of-fit test of structural (CR), the research results showed that the equation modeling results in a p value of χ 2 CR value of each assessment dimension (Chi-square) that when less than 0.001, ex- ranges from 0.825 to 0.919. As a result, the hibits there is not a good fit between the re- reliability of this questionnaire is good. search model and observation data, but since

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Table 1. Assessment items and reliability and validity analysis

Dimension/Item Factor loadings Perceived ease of use (Cronbach’s α = 0.920; AVE = 0.742) PEOU-1 Operation method is simple. 0.824 PEOU-2 Operation process is clear and 0.867 understandable. PEOU-3 Operation method is easy to 0.850 learn. PEOU-4C Change flexibly according to 0.717 personal habits. Perceived usefulness (Cronbach’s α = 0.895 ; AVE = 0.650 ) PU-1 helpful for dropout notification. 0.800 PU-2 helpful for locating dropouts. 0.772 PU-3 reduce the unnecessary processes 0.711 and time. PU-4 increase locating rate of dropouts 0.731 PU-5 have data archiving and search ca- 0.697 pabilities. Effectiveness of the system (Cronbach’s α = 0.883; AVE = 0.654) SA-1 always on the normal operational 0.666 state. SA-2 can instantly turn on and operate 0.745 SA-3 has no breakdown and failure. 0.818 SA-4 does not have frozen screen situa- 0.764 tion. Interactivity (Cronbach’s α = 0.828; AVE = 0.614) IA-1 helpful for information transferring 0.699 and sharing. IA-2 helpful for grasping the trends of 0.734 the required information IA-3can create the atmosphere of inter- 0.626 departmental cooperation. Attitude (Cronbach’s α = 0.839; AVE = 0.622) AT-1 has a high appraisal 0.701 AT-2 is a very good policy. 0.749 AT-3is voluntary. 0.653 Willingness to use (IN) (Cronbach’s α = 0.898; AVE = 0.609) IN-1continue to use 0.815 IN-2 will make the best use of this sys- 0.798 tem to assist work execution. IN-3 recommend to colleagues. 0.760 (0.65) IN-4 also willing to use after system up- 0.716 (0.49) date.

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the χ 2 indicator is easily influenced by sam- H6) were supported. In contrast, H2 did not ple size (Mueller, 1996), this study used sta- reach a significant level and was not sup- tistics of the modified degrees of freedom (χ ported. Table 3 shows the summary of each 2 / df) as the goodness-of-fit indicator to as- hypothesis testing results of the proposed sess the model, supplemented with GFI, educational information integrated model. NFI, and RMSEA–three commonly used goodness-of-fit indicators to synthetically Conclusions and Suggestions determine if the model is suitable or not. The results showed that each indicator is Because most previous studies em- above the acceptable range. The results of ployed TAM to examine users’ willingness goodness-of-fit test for each indicator are to use information systems, this study fur- summarized in Table 2. ther considered the characteristics of the dropout notification and return to school Path effect analysis system and incorporated other assessment variables into the proposed model in order After confirming the overall model’s good- to enable the system to provide a better ex- ness-of-fit, this study undertook the path planatory model. The research results show analysis of the model through structural that effectiveness and interactivity of the equation modeling (SEM). According to the system indeed had significant positive influ- analysis results, the attitude of the relevant ence on user attitude. Comparing to the units for using the dropout support system original technology acceptance model, this had a significant positive influence on will- proposed educational information system in- ingness to use the system (β= 0.96). As to tegrated model will be able to better explain increasing users’ positive attitude, results users’ behavioral intentions toward using showed the influence level of perceived use- the dropout notification and return to school fulness was highest (β = 0.4), followed by system. the system effectiveness (β = 0.23), and interactivity (β = 0.23). In addition, the results As illustrated by the analysis results, exhibited that the relevant unit’s perceived besides perceived ease of use, perceived ease of use directly and significantly influ- usefulness, system effectiveness, and inter- enced perceived usefulness (beta = 0.89) but activity all significantly increased users’ did not have significant influence on user at- positive attitudes. Therefore, how to titude. Overall, for the six research hypothe- strengthen information sharing and transfer- ses proposed, based on relevant literature, ring among the relevant units in order to im- five hypotheses (H1, H3 and H4, H5 and prove the actual usage benefits of the dropout notification and return to school On the other hand, considering the purpose system should be the place for management of establishing the dropout notification and units to actively improve on in the future. return to school system, enhancement of the The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 68

Table 2. Indicator value test results of goodness-of-fit test for the model

Name of the indi- Indicator value Ideal value Result cator the smaller, the reject the null hypothe- χ2 value 547.95* better sis χ2 / df 2.479 ≦3 fit RMSEA 0.095 ≦0.05 acceptable GFI 0.77 ≧0.9 acceptable NFI 0.95 ≧0.9 fit Note: * means p <0.05

Table 3. Summary of hypotheses testing results

Hypothesis Path coefficient Testing result H1 ：attitude →willingness 0.89* supported H2 ：ease to use →attitude -0.04 not supported H3 ：ease to use →usefulness 0.4* supported H4 ：usefulness →attitude 0.96* supported H5 ：effectiveness →attitude 0.23* supported H6 ：interactivity →attitude 0.23* supported Note: * means p < 0.1 stability of the system will make the relevant units better able to save and search information at the appropriate time, which not only can increase users’ positive attitudes but also can strengthen users’ willingness to use the system.

References Cheng, T.C. E., Lam, D. Y.C. & Yeung, A. C.L. (2006). Adoption of internet bank- Barnes, S. J. & Vidgen, R. T. (2001). As- ing: An empirical study in Hong Kong. sessing the quality of auction web sites . Decision Support Systems, 42 (3), 1558- Proceedings of the Hawaii Interna- 1572. tional Conference on Systems Sci- ences, Maui, Hawaii.

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Cohen, J. S., & Smerdon, B. A. (2009). Hair, J. F., Black, B., Babin, B., Anderson, Tightening the dropout tourniquet: Eas- R. E. & Tatham, R. L. (2006). Multi- ing the transition from middle to high variate Data Analysis . Upper Saddle school. Preventing School Failure, 53 , River, NJ: Pearson Education Inc. 177-184. Nunnally, J. C. (1978). Psychonometric Davis, F. D. (1989). Perceived usefulness, Theory . New York: Mcgraw-Hill. perceived ease of use and user acceptance of information technology. Parasuraman, A., Zeithaml, V. A. & Mal- MIS Quarterly, 13 (3), 319-340. hotra, A. (2005). E-S-QUAL － A multiple-item scale for assessing electronic DeLone, W. & McLean, E. (1992). Infor- service quality. Journal Service Re- mation systems success: The quest for search, 7 (3), 213-233. the dependent variable. Information Systems Research, 3 (1), 60-95. Park, N., Roman, R., Lee, S. & Chung, J. E. (2009). User acceptance of a digital li- DeLone, W. & McLean, E. (2003). The De- brary system in developing countries: Lone and McLean model of infor- An application of the Technology Ac- mation systems success: A ten-year up- ceptance Model. International Journal date. Journal of Management Infor- of Information Management, 29 (3), mation Systems, 19 (4), 9-30. 196-209.

Hair, J. F., Black, B., Babin, B., Anderson, Somers, C. L., Owens, D., & Piliawsky, M. R. E. & Tatham, R. L. (2006). Multi- (2009). A study of high school dropout variate Data Analysis . Upper Saddle prevention and at-risk ninth graders’ River, NJ: Pearson Education Inc. role models and motivations for school completion. Education Chula Vista, Kim, T. G., Lee, J. H. & Law, R. (2008). An 130, 348-351. empirical examination of the acceptance behaviour of hotel front office Teo, T., Lee, C. B., Chai, C. S. & Wong, S. systems: An extended technology ac- L. (2009). Assessing the intention to ceptance model. Tourism Management, use technology among pre-service 29 (3), 500-513. teachers in Singapore and Malaysia: A multigroup invariance analysis of the Technology Acceptance Model (TAM). Computers & Education, 53 (3), 1000-1009.

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Zeithaml, V. A., Parasuraman, A. & Mal- hotra, A. (2002). Service quality delivery through web sites: A critical review of extant knowledge. Journal of the Ac- ademic of Marketing Science, 30 , 362- 375.

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THE INFLUENCES OF ETHICAL CLIMATE ON TURNOVER INTENTION: THE MEDIATING ROLE OF EMOTIONAL EXHAUSTION

Feng-Hua Yang Department of International Business Management Da-Yeh University, Taiwan R.O.C. [email protected]

You-Shiun Tsai ∗ Ph. D. Program in Management Da-Yeh University, Taiwan R.O.C. ∗Corresponding author [email protected]

Kun-Chih Tsai Department of International Business Management Da-Yeh University, Taiwan R.O.C. [email protected]

Abstract

This article describes a model in which emotional exhaustion mediated between perceived ethical climate and employees’ turnover intention. Our sample comprised 253 employees within foreign banks throughout the Taiwan. We showed that emotional exhaustion partially mediated between ethical climate and turnover intention. Implications for the human resource ethics theory and practice of banking industry with a reference for human resource management decisions are discussed, and future research directions offered.

Key Words: Ethical Climate, Emotional Exhaustion, Turnover Intention, Taiwan, Banking Industry

Introduction company’s internal ethics or behavioral decisions satisfy expected standards or norms Cullen et al. (1993) indicated that an (Cullen et al., 2003). Organizational cli- ethical climate is one type of organiza- mate refers to members’ psychological tional work climate. An ethical climate is identification with organizational practices created when employees perceive that a and procedures, as reflected in their actions. Incorporating ethical connotations The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 72

into organizational practices and proce- Job turnover refers to the actual be- dures yields an ethical climate (Victor & havior of leaving an organization (Wil- Cullen, 1987). An organization’s ethical liams & Hazer, 1986). Robbins and Judge climate is a part of its organizational cul- (2013) defined turnover as employees’ vol- ture. When encountering ethical dilemmas, untary or involuntary permanent departure the ethical climate of an organization influ- from organizations. Poter et al. (1974) ar- ences decision making and subsequent be- gued that turnover generates potential in- havioral developments. Therefore, ethical fluences on both organizations and indi- climate is defined as the primary percep- viduals, and is a decisive behavior. How- tions that feature ethical content in organi- ever, in the decision-making processes of zation-specific rules and procedures (Vic- individuals, turnover intentions may pre- tor & Cullen, 1988), which possesses nu- cede subsequent turnover behavior merous useful functions in organizations. (Mobley, 1977). Turnover intentions can When encountering an ethical dilemma, an also be considered workers’ tendencies, organization should provide employees wishes, and plans regarding their departure with “appropriate response” guidelines to from their current positions (Williams & assist them in resolving ethical issues Hazer, 1986). Therefore, turnover inten- (Homans, 1950). Additionally, an ethical tions include turnover ideas and behaviors climate allows employees to identify ethi- and attitudes regarding pursuing alterna- cal issues within an organization. In other tive employment (Miller et al., 1979). In words, an ethical climate offers a useful other words, turnover intentions refer to perception that enables employees to judge workers’ self-generated behaviors of leav- and evaluate situations (Cullen et al., ing an organization. Turnover intentions 2003). are indicators of job turnover; the levels of individuals’ turnover intentions determine When an ethical climate is established their turnover behaviors (Mobley, 1977). in an organization, it regulates employees’ Tett and Meyer (1993) asserted that turno- words and actions while directing them to- ver intentions are expressions of various ward positive thinking modes. Ethical cli- thoughts and considerations, and refer to mates involve guidelines for employee be- employees’ free will to leave an organiza- havior and reflect an organization’s ethics tion. and morals (Cullen et al., 2003). Further- more, an ethical climate describes a work Turnover intentions are also defined climate type that features organizational as intentional and carefully-planned efforts policies, procedures, and practices that to leave an organization (Egan et al., generate ethical outcomes (Mulki et al., 2004). Management studies have em- 2008). Additionally, a company’s ethical ployed the theory of turnover to demon- climate determines its ethical values and strate that turnover intentions are the opti- expected behaviors, and ethics has been mal predictors of whether an employee found to potentially affect other members will leave an organization (Steel, 2002). (Wimbush & Shepard, 1994; Verbeke et Griffeth et al. (2000) indicated that job al., 1996). Previous studies have shown characteristics, such as job content, work that an ethical climate can generate greater stress, and fair rewards, affect turnover in- job satisfaction and organizational com- tentions. Additionally, turnover intentions mitment while reducing employees’ role are also influenced by extra-organizational stress and turnover intentions (Schwepker, factors such as alternative work, and other 2001; Valentine & Barnett, 2003; Schwep- behaviors, including absenteeism and work ker & Hartline, 2005; Mulki et al., 2006). performance, can also be used to predict turnover intentions. Considerable empirical research has been conducted regarding

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the concept of turnover, which is an issue prompts people to distance themselves of organizational research, and turnover from their emotions and work cognition concepts have been confirmed in related (Schaufeli & Bakker, 2004). Numerous empirical studies. The organizational costs studies have emphasized the correlation of turnover include the transfer of organi- between an ethical climate and turnover zational experience, recruitment, and train- intentions. This study used emotional ex- ing. An increasing amount of evidence haustion as an additional intervening varia- shows that turnover intentions negatively ble to further clarify this correlation in an affect performance (Shaw et al., 2005). attempt to expand the diversity of relevant Therefore, turnover intentions can be con- research. sidered to have a certain level of influence on organizations. When turnover inten- Ethics issues involve all commercial tions are developed, organizations must activities, such as the activities of account- determine whether particular employees ants, financial managers, buyers, and mar- should be retained. ket researchers (Mulki et al., 2009). Uneth- ical behaviors have become common so- Emotional exhaustion is an indicator cial events rather than isolated incidents for mental and physical health. Employees (Mulki et al., 2006). Recent evidence indi- who experience constant work stress (par- cates that although unethical behaviors ap- ticularly those in positions that involve fre- pear legal, they are detrimental to corpo- quent interpersonal contact) are likely to rate image and reputation and cause cus- develop fatigue, which is closely related to tomer losses, reduce employee morale, and the enhancement of work life quality and increase turnover intentions (Thomas et organizational functions (Wright & Cro- al., 2004). Customers tend to avoid pur- panzano, 1998a). When performances and chasing products and services from unethi- learning interests decline, a person’s emo- cal organizations (Gilbert, 2003; Babin et tional resources (e.g., passion and perse- al., 2004; Roman & Ruiz, 2005). Conse- verance) may be depleted. Simultaneously, quently, companies suffer because both if work demands continue to cause stress, their current and future business value is emotional exhaustion can result (Halbes- damaged. Particular unethical behaviors leben & Bowler, 2007). Numerous studies are illegal or fraudulent, and companies have indicated that emotional exhaustion are liable for the resulting financial risks has significant predictive effects for em- and costs (Chan, 2002; Neese et al., 2005). ployees’ work performances, turnover be- Ethical concepts are closely linked to a haviors, and turnover intentions (Wright & company’s public image and contribute to Cropanzano, 1998b; Witt et al., 2004; the maintenance of successful long-term Kundsen et al., 2006; Babakus et al., customer relationships (Schwepker & 2008). Hartline, 2005; Thomas et al., 2004).

Emotional exhaustion is a key factor Based on these arguments, we can in- of employee burnout (Maslach & Jackson, fer that a favorable ethical climate is vital 1981, 1986) and a critical variable that infor companies because it provides ideal fluences job burnout (Maslach et al., 2001; ethical guidelines for company decision- Cropanzano et al., 2003; Schaufeli & Ta- making and enables employees to influ- ris, 2005). The theory of job burnout and ence each other’s ethical values. Recent re- related experience (Halbesleben & Bowler, ports concerning corporate scandals 2007) indicate that emotional exhaustion abound, and all involve some form of can affect an individual’s effort and ability fraud, such as employees’ engaging in to improve performances (Maslach et al., false accounting, asset misappropriation 2001). In addition, emotional exhaustion

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committed by business owners, and com- managers making decisions related to hu- panies and employees conspiring to obtain man resources. This issue is relevant to insider information or interests through de- and representative of this study’s research ception (Stawiski et al., 2009). These be- topic. haviors can be attributed to a lack of fully established ethical values between compa- Background and Hypotheses nies and employees. However, the major- Formulation ity of ethical problems tend to concern the relationship between shareholders and cus- The establishment of organizational tomers. Numerous professional managers ethical behavior standards boosts employ- perceive that high ethical standards are vi- ees’ confidence and enables management tal for establishing long-term customer re- to trust the employees and adopt ethical lationships and sustaining customer loyalty behaviors (Mulki et al., 2006). In profes- (Johnston & Marshall, 2003). Therefore, sional environments, the organizational employees should honor their ethical ethical climate depends on the rules and norms and assist colleagues in safeguard- standards regarding logical channels that ing a company’s ethical climate. The es- enable employees to pursue their goals. tablishment of ethical concepts is particu- The behaviors of executives provide a larly crucial in the banking industry. Man- model for employees to understand the ex- agement can lead by example by establish- pected behavioral modes within an organi- ing ethical concepts, thereby preventing zation (Wimbush & Shepard, 1994). the frequent occurrence of corporate scan- Therefore, companies should formulate dals. well-defined rules and guidelines for governing employee behaviors, and provide This study investigated foreign banks, convenient channels through which em- which are multinational corporations. ployees can resolve ethical problems or Compared to domestic banks, foreign ethical dilemmas encountered when ad- banks manage more complex capital flows dressing customer demands (Mulki et al., and financial products, and the clerks of 2009). Executives must provide timely in- these banks experience greater business formation and workplace feedback and of- performance pressure. With corporate fer employees prompt assistance and sup- scandals of the types mentioned previ- port (Durham et al., 1997) to prevent vital ously, clerks may cause damage to the resources, such as employee emotions, global financial system when they decide from exhaustion (Van der Doef & Maes, to manipulate the loopholes of their com- 1999; Singh, 2000). panies. Therefore, bank clerks must adhere to high ethical standards to safeguard the Emotional exhaustion is characterized banks they serve. These clerks also interact by employees’ reaction to the fundamental with customers on a daily basis; when cus- pressure of extended emotions (Maslach et tomers are angry, clerks must adjust their al., 2001). Subsequently, people perceive emotions and adopt a pleasant attitude to greater pressure in their work environment resolve customers’ negative emotions. Ex- and are more likely to perceive that they ecutives require that their employees com- do not possess sufficient resources (e.g., ply with relevant standards regarding atti- time, energy, or knowledge) to manage tudes and etiquette when interacting with their work responsibilities or achieve their customers. Therefore, we sampled foreign career goals; thus, people may experience banks in Taiwan to explore the correlation burnout (Cristina et al., 2009). The em- among an ethical climate, emotional ex- ployees of foreign banks examined in this haustion, and turnover intentions. The re- study had long fostered an ethical corpo- sults can provide a reference for bank

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rate climate, which, according to the con- trust, an ethical climate also indirectly af- servation of resources theory, was ex- fects turnover intentions (Mulki et al., tremely likely to become another source of 2006; Ulrich et al., 2007). Mulki et al. work stress. If these employees maintained (2008) contended that through supervisor their level of emotional output, their emo- trust, an ethical climate indirectly reduces tional resources may be depleted. There- turnover intentions and positively influ- fore, we evaluated the fit between personal ences work attitudes while reducing em- characteristics and work environment, us- ployee work stress and turnover intentions. ing the results as a crucial predictive indicator regarding the source of burnout pres- These studies show that commitment sure (Xie & Johns, 1995; Brigham & DeC- is a vital indicator of turnover intentions astro, 2003). According to these findings, because employees are unlikely to leave an we found that when the level of employee organization when they exhibit an active contribution to the organization’s ethical attitude (Jex, 2002). By conducting com- climate was high, employee identification prehensive analysis, Meyer et al. (2002) with the organization was greater. This found that organizational commitment is also reduced the pressure that the organi- negatively correlated with turnover inten- zation placed on employees, thereby en- tions. Satisfied and productive employees hancing employees’ enthusiasm for work. can contribute to the achievement of or- Based on this discourse, this study pro- ganizational goals and exhibit compara- posed the following hypothesis: tively less turnover intentions (Harter et al., 2002). However, the ethical climate re- Hypothesis 1. Ethical climate has a signifi- fers to employees’ ethical standards in re- cant negative influence on emotional ex- sponse to an organization’s conduct, pro- haustion. cedures, norms, and values (Babin et al., 2000; Schwepker, 2001). When customers Studies regarding the relationship be- perceive that an employee is serving in an tween ethical climate and turnover inten- organization with a highly ethical climate, tions are rare, with only a few studies con- they are likely to predict that the employee tending the existence of an indirect influ- will exhibit an ethical and reliable perfor- ence between the two. DeGeorge (1990) mance. This is beneficial for product de- indicated that individuals tend to not re- velopment and establishing long-term cus- main in an organization if they perceive tomer relationships (Wright & Lundstrom, the organization to be unsuitable for them. 2004). Therefore, employees of organiza- Conversely, individuals are unlikely to tions that have a highly ethical climate per- leave an organization when they perceive ceive that they possess greater market the internal corporate climate to be ethical competitiveness (Thomas et al., 2004). (Schwepker, 2001). A number of studies Based on the concepts discussed above, we regarding the indirect influence between proposed the following hypothesis: ethical climates and turnover intentions are discussed below. Schwepker (2001) found Hypothesis 2. Ethical climate has a signifi- that an ethical climate is reinforced by or- cant negative influence on turnover inten- ganizational commitment, thereby reduc- tion. ing salespeople’s turnover tendencies. Jaramillo et al. (2006) indicated that an Numerous studies have shown that ethical climate has an indirect influence on the experience of workplace stress is reducing turnover intentions because of the linked to employee welfare (Barling et al., role conflicts and role ambiguity involved. 2005). Frontline employees generally have Additionally, through job satisfaction, or- positions with low salaries, irregular work- ganizational commitment, and supervisor ing hours, and heavy workloads (Babin &

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Boles, 1998). In addition, to effectively existing resources can no longer satisfy perform their work tasks, these employees work demands, and their emotional ex- must handle unspecific and unreasonable haustion eventually transforms into job requests from colleagues, supervisors, and dissatisfaction and ultimately departure customers (Singh, 2000). These work re- from the organization (Singh et al., 1994). quirements and uneven distributions of To summarize the above points, under a work resources, such as minimal training high ethical climate, employees’ emotional and supervisor support, low salaries, and a strength increases because of their confi- lack of rights and rewards (Ross & Boles, dence in the organization, and they per- 1994; Deery & Shaw, 1999; Yavas et al., form ethical behaviors with reduced emo- 2004), exhaust employees’ energy and tional exhaustion. By contrast, employee spiritual resources, thereby generating turnover intentions increase when emo- emotional exhaustion. Regarding work tional exhaustion occurs (Cropanzano et performance, turnover is related to burnout al., 2003). Based on these contentions, we and absence, poor efficiency, interpersonal proposed the following hypotheses: conflicts, low productivity, job dissatisfaction, and reduced organizational commit- Hypothesis 3. Emotional exhaustion has a ment (Maslach & Jackson, 1986). More significant positive influence on turnover importantly, customers realize that burnout intention. is “contagious” among employees; therefore, burnout at the unit level is linked to Hypothesis 4. Emotional exhaustion has a low consumer satisfaction and service ac- mediating effect on the relationship be- ceptance regarding professional staff and tween ethical climate and turnover inten- nurses (Garman et al., 2002; Vahey et al., tion. 2004). Methods Several studies have indicated that a positive correlation exists between emo- Participants and Procedure tional exhaustion and turnover intentions among the average employee (Lee & Ash- The participants of this study com- forth, 1996; Blan-kertz & Robinson, 1997; prised clerks employed at foreign banks in Cropanzano et al., 2003). Multiple theoret- Northern, Central, and Southern Taiwan. ical perspectives can be used to explain For this study, we employed paper ques- this correlation. Some scholars have con- tionnaires, distributing a total of 300 cop- tended that individuals engage in with- ies. Design and distribution of the ques- drawal behaviors (an example of which is tionnaire combined with statistical analysis turnover intentions) to cope with and re- was conducted and purposive sampling duce the psychological costs of emotional was used to perform relevant research. Be- exhaustion (Jex, 1998; Schaufeli & Bak- fore distributing the questionnaire, the ker, 2004). According to Social Exchange content and purpose of the questionnaire Theory, “withdrawal behaviors are a re- were explained to clerks via telephone sponse to perceived imbalances in the ex- calls and personally visiting the retail loca- change relationship between an employee tions to ensure that the clerks understood and his or her employing organization” and consented to the questionnaire investi- (Cropanzano et al., 2003, 2005). Emo- gation. tional exhaustion affects a person’s psychological well-being and has general ef- Measures fects on organizational variables (Cordes & Dougherty, 1993). When emotional ex- This study used a seven-point Likert haustion occurs, employees perceive that scale, with points 1 to 7 representing The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 77

“strongly disagree,” “disagree,” “slightly Mas-lach and Jackson (1981) and selected disagree,” “neutral,” “slightly agree,” a scale of emotional exhaustion to develop “agree,” and “strongly agree.” After col- nine items for the questionnaire. lecting the participants’ responses, the average scores and standard deviations were Turnover Intention. calculated. We adopted SPSS 12.0 and AMOS 7.0 for analysis; SPSS 12.0 was Turnover intentions are voluntary be- employed to analyze the Cronbach’s α co- haviors of leaving an organization. Turno- efficients of various dimensions and items, ver intentions are an indicator of turnover; and AMOS 7.0 was employed to analyze when individuals exhibit strong turnover the reliability, convergent validity, and dis- intentions, they are likely to leave an or- criminant validity of the dimensions. De- ganization (Mobley, 1977). Based on this scriptive analysis of the sample character- definition, we employed the turnover in- istics was performed before conducting a tention scale developed by Carmeli and correlation analysis. Subsequently, AMOS Weisberg (2006) and designed three items 7.0 was used to conduct empirical analysis for the questionnaire. of the model developed in this study. Results Ethical Climate. Descriptive Statistics Ethical climate is a part of organizational culture. When an organization en- Data were collected for this study by counters ethical dilemmas, its ethical cli- distributing questionnaires to Taiwan’s mate affects corporate decision making foreign banks employees. A total of 300 and subsequent behaviors. Ethical climate questionnaires were distributed. Employ- has been defined as the primary percep- ing questionnaire tracking and reminders, tions of the ethical content in organization- a total of 297 completed questionnaires specific rules and procedures (Victor & were returned, for an overall retrieval rate Cullen, 1988). of 99%. After excluding 44 invalid questionnaires, a total of 253 effective ques- Based on this definition, we adopted tionnaires were retained, for an effective the ethical climate scale developed by Vic- retrieval rate of 84%. This figure suggests tor and Cullen (1988). The questionnaire that the sample data is representative. consists of 26 items that address the five dimensions of ethical climate, that is, care, Common Method Variance (CMV) laws and codes, rules, instruments, and independence. Samples were measured by conducted exploratory factor analysis (EFA) accord- Emotional Exhaustion. ing to Harman’s single-factor method (Podsakoff et al. 2003). Results demon- Emotional exhaustion, which refers to strated that 8 factors could be extracted the fatigue resulting from long-term expo- and that the explanatory power of the first sure to work stress (particularly in posi- factor did not reach 50%. Therefore, CMV tions that require frequent interpersonal was not a problem in the sample used for contact), is an indicator of mental health this study. Results showed that not all of and is closely linked to the enhancement of the item’s loading reached the significant work life quality and organizational func- level of .5. Also, the observed single-factor tions (Wright & Cropanzano, 1998a). CFA value (χ2 = 2896.357, D.F. = 481, Based on this definition, we employed the GFI = .537, AGFI = .549, IFI = .613, CFI Maslach Burnout Inventory developed by = .608, RMR = .087) was poor. Therefore,

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CFA was conducted by separating each code, rules, instrumental, and independ- construct. Results indicated that the good- ence was .835, .902, .851, .701, and .716, ness-of-fit (χ2 = 94.758, D.F. = 34, GFI respectively. In the emotional exhaustion = .927, AGFI = .913, IFI = .957, CFI scale, Cronbach’s was .927. In turnover in- = .964, RMR = .027) demonstrated better tention, the Cronbach’s tested was .928. than that of single-factor. Therefore, CMV All of the above Cronbach’s were over the was not a problem in this study. threshold of .70 suggested by Nunnally (1978). Reliability and Validity Analysis In terms of CR and average variance Reliability Analysis. extracted (AVE), Table 1 demonstrates that the CR of each dimension was above .704 This study used Cronbach’s reliability and AVE was above .512. These values coefficients and CFA to examine the com- were greater than the threshold of .70 posite reliability (CR) of latent variables and .50, respectively, suggested by Hair et and explore the reliability of research con- al. (2009, 2010). As a result, the internal structs. In the ethical climate scale, the consistency of the variables used in this tested Cronbach’s for caring, law and study is within the acceptable range.

Table 1. Discriminant Validity and Correlation Coefficient.

Construct EC EE TI Dimension CA LC RUL INS IND CR AVE CA .716 .836 .512 LC .595*** .843 .903 .710 RUL .599*** .764*** .768 .852 .590 INS .208** .114** .062** .756 .704 .572 IND .249*** .309*** .349*** .255*** .719 .717 .517 EE -.146** -.267** -.318** .338*** -.015** .755 .927 .570 TI -.247** -.308** -.381** .216** -.055** .572*** .902 .929 .813 Mean 4.789 5.582 5.441 4.464 4.903 3.757 3.101 Variance .412 .710 .590 .270 .417 .570 .813 Cronbach’s α .835 .902 .851 .701 .716 .927 .928 EC = ethical climate, CA = caring, LC = law and code, RUL = rules, INS = instrumental, IND = independence, EE = emotional exhaustion, TI = turnover intention, CR = composite reliability, AVE = average variance extracted. ** p ＜ .01; *** p ＜ .001.

Validity Analysis. than .05. Also, all factor loadings reached significance level, CR values were all Convergent validity and discriminant higher than .70, and AVE were all higher validity were both examined. To measure than .50. Therefore, the measurement convergent validity, this study adopted An- model of ethical climate, emotional ex- derson and Gerbing’s (1988) proposed haustion, and turnover intention possessed standard, Bagozzi and Yi’s (1988) CFA convergent validity. standard, and Gefen et al. (2000) goodness-of-fit indicators. For all the con- Discriminant validity was measured structs, ethical climate, emotional exhaus- using the standard proposed by Fornell and tion, and turnover intention, GFI, NFI and Larcker (1981): two dimensions possess CFI were all higher than .90. RMSR were discriminant validity if the correlation co- all lower efficient of the two dimensions is smaller

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than the square root of AVE for each di- This study measured goodness of fit mension. Table 1 indicates that all dimen- by three aspects according to Bagozzi and sions fulfill the discriminant validity stand- Yi (1988): preliminary fit criteria; overall ard proposed above. This result demon- model fit; and fit of internal structure of strates good discriminant validity for all model. The results were shown in Table 2 dimensions. indicated that the preliminary fit criteria, overall model fit, and fit of internal struc- Model Testing ture of model of this study possessed good model fit. Evaluation of Theoretical Models.

Table 2. The Analysis of Measurement Model.

Estimated parameter of MLE Variable FL (λx/λy) EIM (δ/ε) CR AVE Ethical climate .902 .588 Caring .884*** .218 Law and code .893*** .203 Rules .888*** .212 Instrumental .910*** .271 Independence .784*** .385 Emotional exhaustion .920 .570 Indicator 1 .693*** .325 Indicator 2 .607*** .215 Indicator 3 .768*** .223 Indicator 4 .803*** .317 Indicator 5 .903*** .267 Indicator 6 .874*** .254 Indicator 7 .638*** .233 Indicator 8 .711*** .340 Indicator 9 .815*** .307 Turnover intention .929 .813 Indicator 1 .894*** .212 Indicator 2 .889*** .253 Indicator 3 .923*** .334 MLE = maximum likelihood estimation, FL = factor loading, EIM = errors in measurement, χ2 = 94.758, D.F. = 34, GFI = .927, RMSR = .021, RMSEA = .062, AGFI = .913, NFI = .934, CFI = .964, PNFI = .646, PGFI = .541. *** p ＜ .001.

Hypothesis Testing. significantly and positively affected turnover intention. The model used by this study was illustrated in Figure 1. The path coefficients for In the analysis of the antecedent varia- β31, β32, β33 were all significant with -.351, bles of turnover intention. Fig. 1 shows that -.201, and .579. T-value was -4.03, -3.06, ethical climate had one direct effect β32 and and 8.26, respectively. In other words, for- one indirect effects β31 β33, of which coef- eign banks employees' ethical climate signif- ficients were -.201 and -.203 (= -.351 icantly and negatively affected emotional × .579), respectively, exhaustion and turnover intention; emotional exhaustion

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EE 1 EE 2 EE 3 EE 4 EE 5 EE 6 EE 7 EE 8 EE 9

.693 .607 .768 .803 .903 .874 .638 .711 .815

CA .692

Emo- tional ex- LC .852 haustion -.351*** .579*** .894 TI 1 β31 β33

.891 Ethical -.201*** Turnover .889 RUL TI 2 climate intention β32 .113 .923

INS .405 TI 3

IND

χ2 = 94.758, D.F. = 34, GFI = .927, RMSR = .021, RMSEA = .062, AGFI = .913, NFI = .934, CFI = .964, PNFI = .646, PGFI = .541. *** p ＜ .001.

Figure 1. Overall Structural Model.

and the total effect was -.404. These results and standardized channels in companies support H4, that is, emotional exhaustion has did not cause clerks to perceive that their a partial mediating effect on the relationship personal resources for managing work de- between ethical climate and turnover inten- mands and achieving their career goals tion. Therefore, H1 through H4 proposed by were insufficient. The finding matches the this study were all supported. studies of Xie and John (1995), Brigham and DeCastro (2003). Therefore, H2 (Ethi- Discussion cal climate has a significant negative influence on turnover intention) of this study is Most of the hypotheses proposed by supported. This indicates that the clerks this study were supported. A detailed anal- would leave an organization when the per- ysis of the results is provided as follows: ceived fit between themselves and the organization no longer existed. This finding H1, which states that ethical climate conforms to the studies of Jansen and has a significant negative influence on Chandler (1994), Schwepker (2001). emotional exhaustion, is supported. The results show that the existence of regulated The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 81

The hypothesis of H3 (Emotional ex- Research Implications haustion has a significant positive influence on turnover intention) is supported. The results of this study show that the This shows that the clerks’ turnover inten- ethical climate has a significant interventions increased significantly when their ing effect on turnover intentions through emotions reached their pressure limits. the influence of emotional exhaustion. Pre- This finding conforms to the research re- vious studies focused exclusively on the sults of Lee and Ashforth (1996), Blank- relationship between the ethical climate ertz and Robinson (1997), Cropazano et al. and turnover intentions (e.g. Mulki et al., (2003). 2006) without including emotional exhaustion as an intervening variable. This study The hypothesis of H4 (Emotional ex- explored whether emotional exhaustion in- haustion has a mediating effect on the rela- fluences the relationship between the ethi- tionship between ethical climate and turno- cal climate and turnover intentions. The re- ver intention) is also supported. That is, sults confirmed that emotional exhaustion emotional exhaustion has a partial mediat- affects the influence that ethical climate ing effect between ethical climate and has on turnover intentions. Under the ethi- turnover intention. Consequently, the in- cal climate of a company, employees are clusion of emotional exhaustion in the re- unable to focus on work and ultimately lationship between corporate ethical cli- leave the organization if they cannot iden- mate and turnover intentions influences tify with the corporate system. employee turnover. Therefore, a well-for- mulated ethical company climate reduces Therefore, this study compensates for employee burnout and, thus, decreases em- the lack of research regarding the influ- ployee turnover intentions. ence that the ethical climate has on emotional exhaustion. Additionally, among the dimensions of ethical climate, law and code received Practical Implications the highest average rating, whereas instruments received the lowest average rating. The pursuit of profit is no longer the A consensus was exhibited in the overall sole purpose of business operations. Com- evaluations, indicating that the clerks iden- panies that value sustainable development tified with the laws and codes of their allocate attention to ethical concepts and companies’ internal ethical climate, but conduct, which are beneficial for success. adopted reserved attitudes when their in- The ethical climate is a crucial aspect of terests or morals were challenged. A trend the organizational climate. The manage- of disagreement was observed in the over- ment departments of companies can create all evaluations of emotional exhaustion, a particular ethical climate based on corpo- indicating that the employees could self- rate culture and reputation to promote indi- regulate their work-related emotions with- vidual and organizational ethical behav- out expressing these emotions or experi- iors. As previously stated, when employ- encing burnout. A trend of disagreement ees’ moral awareness declines, embezzle- was observed in the overall evaluations re- ment within businesses frequently occurs. garding turnover intentions exhibited, indi- The incidents in history that involved the cating that the clerks were satisfied with highest amounts of money or collective their current jobs and were unlikely to fraud ultimately resulted in losses for the leave an organization because of dissatis- public and society. When a company does faction or corporate rules. not lead by example regarding its ethical climate, moral decay is inevitable, followed by a vicious cycle of embezzlement

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and bankruptcy. Therefore, cultivating an strategies increases, and members and the appropriate ethical climate for a company organization can be expected to achieve a is a crucial issue, and employees must be certain level of consensus. Thus, organiza- able to work comprehensively within a tional functions can be fully realized, company’s specific ethical climate. thereby enhancing organizational performances. The results of this study show that the employees considered the following com- When bank clerks comply with the pany dimensions to be the most important code of conduct for financial practitioners (in sequential order): laws and codes, during relevant operations, they can iden- rules, and independence. This indicates tify their personal advantages and disad- that the majority of the employees contin- vantages immediately and conduct timely ued to perceive laws as the core norm. In adjustment of their professional skills and organizations with an ethical climate that knowledge required for financial work. values laws and codes, employees comply Consequently, these employees consider with laws and regulations regarding their financial work relaxing and pleasant, and conduct, and the rules and systems of the are more likely to engage in financial tasks companies are valued by the employees, that involve moral and ethical conduct who are concerned of violating rules and while maintaining positive opinions and regulations. These employees are satisfied perceptions. In addition, companies should with their jobs. However, when their inter- enhance interactions between caring em- ests are threatened, employees attempt to ployees and the company. By promoting preserve the majority of their interests. excellent communication, constantly car- These organizations are predominately ing for employees, and building interactive small or medium-sized companies that do platforms, a company can convince em- not require their employees to engage in ployees that they are cared for and that continuous innovation. Therefore, employ- profit optimization is not the company’s ees are often unpunished providing they do only priority. In addition to communi- not violate corporate rules and regulations. cating a company’s concern for its employees, this approach inspires employees Therefore, companies should estab- to work harder to achieve the company’s lish or formulate appropriate policies, reg- goals. ulations, systems, and behavioral criteria. In addition to providing regular educa- When employees feel cared for from tional training for organization members to their supervisors, emotional resource de- enhance their professional knowledge and pletion gradually declines and employee managerial capabilities, companies should work devotion increases. In addition, com- provide work ethics education and on-the- panies should promote personal ethics to job training for all organization members prevent independent employees from en- to correct unethical behavior. By establish- gaging in misconduct because of excessive ing rules and regulations that organization self-awareness. Meetings or weekend gath- members can refer to, the influence of eth- erings can be organized to introduce rele- ical climates can be fully exerted. On-the- vant measures and correct employees’ eth- job ethical educational training enables ics. When a company stipulates appropri- management staff to understand organiza- ate measures for an ethical climate, em- tion members’ individual ethical philoso- ployees are reassured to continue working phies, communicate with organization for the company, and their emotional re- members, and enhance organizational co- sources are preserved rather than depleted. herence. Consequently, the members’ identification with relevant organizational

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Limitations and Future Research reply conditions could not be monitored. Consequently, the questionnaires con- Limitations. tained ambiguous replies and missed items, resulting in relatively low reliability The sample distribution of this study and validity. was uneven because of geopolitical limitations. Furthermore, because foreign banks Future Research. in Taiwan are dominated by Citibank, we only collected a few samples from other In this study, the questionnaire survey smaller foreign banks. Additionally, this was conducted with a single sample target study examined foreign banks solely, with- (employees), without obtaining data from out considering domestic banks. There- managers and supervisors. We suggest fu- fore, future studies must be conducted to ture studies to adopt multiple sample tar- determine whether the situations in local gets for questionnaire distribution to un- banks are consistent with the findings re- derstand the situations of both supervisors garding foreign banks. As a cross-sectional and employees. Emotional exhaustion is study, we could only investigate the situa- influenced by numerous factors, and dif- tions at a specific time and were unable to fering variables should be introduced to confirm whether long-term relationships test the various intervening variables and were consistent with the findings of this further analyze the relationships between study. In addition, this study only exam- variables. Furthermore, future studies can ined bank clerks according to the research expand the industry scope by extending in- questions and purposes, without investigat- vestigations from the service industry to ing whether the same results were ob- the manufacturing industry to examine served for frontline service personnel; whether the ethical climate and emotional thus, the results of this study are incom- exhaustion exhibit mutual influences in sit- plete. The questionnaires were distributed uations that involve greater work stress. and recovered by post; therefore, the actual

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THE EFFECT OF FINANCIAL MANAGEMENT ON THE PERFORMANCE OF NON-PROFIT ORGANIZATIONS: AN EMPIRICAL STUDY IN HAITI

Shu-Hui Su Department of Accounting, I-Shou University, Taiwan, Republic of China shuhuisu@ isu.edu.tw

Guych Nuryyev ＊ Department of International Finance I-Shou University, Taiwan, Republic of China ＊Corresponding Author: [email protected]

Withz Aimable College of Management I-Shou University, Taiwan, Republic of China [email protected]

Abstract

The purpose of this research is to examine the influence of financial management on the achievement of goals of non-profit organizations. Financial data of forty international non- profit organizations that provided services in the field of basic education and health care was analyzed in this study. The efficiency of financial management of non-profit organizations was measured by fiscal performance ratio, fund raising efficiency ratio and public support ratio. The general performance of those non-profit organizations was measured by the number of people benefiting from their basic education and health care services. The findings show that fiscal performance ratio and fund raising efficiency are significantly associated with the performance of non-profit organizations. Predictably, the size of non-profit organizations, as measured by total assets, also positively affects their performance.

Key Words: financial management, performance of non-profit organizations, fiscal performance ratio, fund raising efficiency ratio, public support ratio

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Introduction and the results of their activities in providing access to basic education and health According to the WTO (2007), care in Haiti. This research is expected to managers and employees have increas- provide useful information to interested ingly recognized the importance of finance parties, especially to professions in the in non-profit organizations. Employees, in- area of finance who work in non-profit or- cluding managers, participate in all kinds ganizations. This study expands the litera- of activities in order to increase the organi- ture on non-profit organizations by provid- zation’s performance and ensure its suc- ing some insights for both academics and cess. In fact, the management of the or- practitioners. ganization’s resources will determine the life of the organization (York, 2010). It is Literature Review important to harmonize the use of various resources within organizations in order to Non-profit organizations are legal ensure the organization’s performance and and economic institutions with a mission sustainability. During the 21 century, non- to advance the economic and social wel- profit organizations have continued to oc- fare of a society (Bryce and Bryce, 1999). cupy the focal point of every successive Non-profit organization operates for dif- development plan in less-developed coun- ferent purposes whether they are charita- tries. Financial performance of non-profit ble, humanitarian, scientific, or educa- organizations is very important for their tional, including promotion of literacy. Fi- sustainability and achievement of their nancial management of non-profit organi- goals. As many of non-profit organiza- zations is similar to that in the commercial tions’ missions are geared towards helping sector in many respects; however, rather local communities, proper management of than increasing share-holder value, non- the organizations’ resources, which allows profit organization’s primary goal is to accomplishment of their missions, can also provide for some socially desirable need benefit the communities in which non- on an ongoing basis (Anthony, 2010). The profit organizations operate (Bureau, management and reporting activities of 2010). non-profit organizations emphasize stew- ardship for the resources donated to them Whether the organization is large (DeWitt, 2010). or small, local or international, private or public, its performance depends on effi- Due to the importance of donated cient management of its financial re- resources, financial managers of non-profit sources (Green and Griesinger, 2006). organizations not only determine the fund Hence, financial management of non-profit raising targets but also identify the best in- organizations is expected to have a signifi- struments that meet donors’ requirements cant impact on their performance, even (Keating and Frumkin, 2001). The funds when their size is controlled for. The ob- obtained through ongoing fund raising jective of this research is to investigate the generally cannot be used for activities that impact of effective financial management are outside the strategic plan without on general performance of non-profit or- threatening the mission and long-term sus- ganizations and their achievement of tainability of the organization (Bryce and goals. Bryce, 1999).

This study is focused on the rela- Since the 1990s, there have been tionship between efficiency of financial several empirical studies that measured the management of non-profit organizations financial performance of non-profit organ-

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izations using various financial ratios. Ac- size of non-profit organizations is corre- cording to Abraham (2004) and Glynn et lated with their ability to provide social al. (2003), “Ratio analysis is considered as services to population in need in less de- a well-established tool to evaluate the per- veloped countries. formance of organizations profitability, li- quidity and financial stability”. Tuckman Based on the existing literature, as (1991) indicated the unreliability of apply- well as the gaps in it, and the objectives of ing financial ratios analysis, which has this study, the following four hypotheses been devised for use in private sector or are discussed and tested in the remaining profit organizations, to non-profit organi- sections of this paper. zations and developed financial ratios applicable to non-profit organizations in the Hypothesis 1: Fiscal performance is posi- first place. He proposed using four finan- tively associated with the perfor- cial ratios to analyze whether or not a non- mance of non-profit organizations. profit organization is financially vulnerable. These financial ratios include: Low Hypothesis 2: Fund raising efficiency is Administrative Costs, Revenue Concentra- positively associated with the perfor- tion, Inadequate Equity Balances and Low mance of non-profit organizations. or Negative Operating Margins. Hypothesis 3: Public support is negatively The ratios employed in this study associated with the performance of to analyze the financial performance of non-profit organizations. non-profit organizations are as follows: fiscal performance ratio, fundraising effi- Hypothesis 4: Total assets are positively ciency ratio, and public support ratio. The associated with the performance of fiscal performance ratio shows the fiscal non-profit organizations. management status of the organization (Si- ciliano, 1997). Fundraising efficiency Methodology measures the relationships between fundraising costs and total contribution and in- This study aims to explore the rela- dicates the amount raised for each dollar of tionships among total assets, fiscal perfor- fundraising cost incurred (Green and mance, fundraising efficiency, public sup- Griesinger, 2006; Janet and Bukov-insky, port and the performance of non-profit or- 1998; Lee, 2010). Public support ratio in- ganizations. The performance involves dicates the extension of the dependence of achievement of goals by non-profit organi- the organization on direct public support zations in providing social services in the (Siciliano, 1997; Lee, 2010). form of access to basic education and health care. According to Fabozzi and Lee (2010) and Green and Kie- Drake (2009), financial analysis should be singer (2006), show that the performance conducted using a sample of organizations of non-profit organizations (in terms of that have similarities in their missions and achieving their goals) depends on efficient programs. Therefore, this study is con- management of their financial resources. ducted using a sample of forty interna- Financial weaknesses of a non-profit or- tional non-profit organizations that provide ganization limit the quality and quantity of access to basic education and health care services that it may provide to people in in Haiti. The sample includes data on 40 need (Green and Griesinger, 2006). Bryce non-profit organizations during the period and Bryce (1999) studied the effect of total from 2009 to 2011. The data consist of assets on the goal achievement of non- revenues, expenses, gifts, donations, and profit organizations. He showed that the grants. The data source is the website of

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“GuideStat.org” ( www.guidestar.org ). and Griesinger, 2006; Jaganathan, 1999). ‘GuideStar.org’ is the website of This ratio is calculated as the ratio of fund- GuideStar USA, Inc. It provides an infor- raising expenses divided by total contribu- mational service specializing in interna- tions. As the ratio becomes lower, it shows tional non-profit organizations. It updates greater efficiency (York, 2010; Ritchie and information on more than 1.7 million IRS- Kolodinski, 2003). ‘Standards for Charity recognized non-profit organizations. Fi- Accountability’ by ‘Better Business Bu- nancial ratios are computed from annual reau’ emphasizes that a non-profit organi- report of the organizations. zation should spend no more than 35% of contributions on fund raising (Bureau, Around the world, educated and 2010). healthy people are the basis of economic development (Fabozzi and Drake, 2009). Finally, the third and last financial Universal access to basic education and ratio for this study is related to public sup- health care still remains an unfulfilled port. This ratio indicates the extent of an commitment in many areas. Several inter- organization’s dependency on direct public national and multinational initiatives were support and is calculated as the ratio of to- launched to tackle without contestation the tal contributions divided by total revenue. schooling and health of people (Jagan- Public support includes gifts, grants, and athan, 1999). This research also focuses on other contributions from government and education and health care. The dependent donors. A ratio that is high or increasing is variables in the regression analysis are ac- not desirable because the contributions are cess to basic education (ABE), and access very flexible and unpredictable (Green, to health care (AHC), which measure the and Griesinger, 2006, Lee, 2010; Bryce numbers of people to whom the non-profit and Bryce, 1999). Denison and Beard organizations provide access to basic edu- (2003) mentioned that an organization can cation and access to health care respec- be more vulnerable to financial shock tively. “EducHealth” is another dependent when revenue sources are concentrated on variable, which is the sum of ABE and a specific source. There is no standard for AHC. The first ratio used in this financial this ratio, but usually a lower ratio means analysis is related to fiscal performance less risk and better performance. This re- which shows the financial management search includes also total asset as inde- status of each organization, and this cate- pendent variable that controls for the or- gory is calculated as the ratio of total re- ganization’s size. Total asset may affect serves plus total revenues to total expenses the number of people that benefit from the (Siciliano, 1997; Lee, 2010). A ratio of activities of the non-profit organizations. 1.00 means that total revenue including re- See the appendix for explanations of defi- serves equals total expenses. If the ratio is nitions of the variables in Table 1. higher than 1.0, an organization could save some revenues. On the contrary, if the ra- The regression analysis that tests tio is less than 1.0, an organization might the hypotheses employs the following lin- fall in a deficit. ear equation model:

The second financial ratio in this EducHealth = α0 + α1*(FPR) + α2 *(PSR) study is related to fundraising efficiency. + α3*(FRER) + α4*(TA) + ε1 Fundraising efficiency ratio measures the where: relationship between fundraising costs and α0 is a constant; α1, α2, α3, α4 are regres- total contributions and indicates the sion coefficients of independent variables; amount of contributions raised for each and ε1 is an error term. dollar of fundraising cost incurred (Green,

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Table 1. Definition of variables

Variables Definition EducHealth The number of people benefiting from access to basic education and health care activities of non-profit organizations. FPR Fiscal performance ratio. The ratio of total revenues and total reserves to total expenses. FRER Fund raising efficiency ratio. The ratio of fund raising expenses to total contributions. PSR Public support ratio. The ratio of total contributions to total revenues. TA Natural Logarithm of total assets.

Result and Discussion US$ 53,100 and US$ 557,763,254 respectively. On average, they provide assistance Data on 40 non-profit organizations with the access to basic education and are analyzed in this research. Financial in- health care to about 2,111 persons. The formation was obtained from the annual mean of public support ratio is about 75%, reports of these non-profit organizations while the minimum and maximum vary for the period 2009 – 2011. The descrip- from 1% to 145%. Similarly, the mean of tive statistic, including the minimum, max- fiscal performance ratio is 72%, with mini- imum and mean values of the variables, mum and maximum of 1% and 132%. The for 120 observations is presented in Table data of fund raising efficiency ratio seem 2. As shown in the Table 2, the sample in- to be positively skewed with a mean of cludes small as well as large non-profit or- 29%, the values ranging from 0% to 497%. ganizations, with total assets of See appendix Table 2 for more details.

Table 2. Descriptive statistics of 40 non-profit organizations for the period 2009-2011

Variables N Minimum Maximum Mean Total asset 120 $ 53,100.00 $557, 763,254.00 $29,314,221.69 Total revenues 120 $20,229.33 $455, 947,867.00 $31,854,111.60 Total reserves 120 5,030.67 $182,900,622.67 $10,214,425.72 Total expenses 120 $26,480.00 $638,848,489.67 $37,200,905.38 Total contributions 120 $7,572.00 $597,587,964.67 $30,275,783.29 Fund raising expenses 120 $0.00 $25,560,301.00 $1,794,910.68 EducHealth (persons) 120 253 16,397 2,111.28 Fiscal Performance ratio 120 1.00% 132% 72% Fund raising efficiency ratio 120 .00% 497% 29% Public support ratio 120 1.00% 145% 75%

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Table 3. below shows Pearson cor- statistically significant at 5% and 1% level relation coefficients among the variables respectively. Unsurprisingly, larger organi- used in this research. Performance of non- zations are able to provide their services to profit organizations (EducHealth) is posi- larger number of beneficiaries. The corre- tively correlated with the fiscal perfor- lation coefficient between EducHealth and mance ratio, fund raising efficiency ratio public support ratio is negative and statisti- and total assets. The correlation coefficient cally insignificant. between the latter two and EducHealth is

Table 3. Pearson coefficient based on 40 organizations

Variables EducHealth FPR FRER PSR TA EducHealth 1 FPR .182 1 FRER .018 * .419 ** 1 PSR -.173 .875 -.452 ** 1 TA .212 ** .028 .035 -.202 * 1 * mean significant at the level of 5% ** mean significant at the level of 1%

There is a strong positive correla- The adjusted R-squared of 0.217 tion between fiscal performance ratio and indicates that the model fits the data fund raising efficiency ratio, while the cor- reasonably well. The results indicate relation between the latter and public sup- that three of the four variables have a port ratio is negative and statistically sig- significant positive effect on access to nificant at 5% level. This suggests that basic education combined with access fundraising efficiency is more important to health care. The effect of the fiscal than public support for both the organiza- performance ratio has a coefficient of tions’ fiscal performance and their main 0.19, which is statistically significant at activity of providing access to education 5% level. Fund raising efficiency ratio and health care. The correlation between also affects EducHealth; the coefficient total asset and public support ratio is nega- equals 0.114, and it is statistically sig- tive and statistically significant, suggesting nificant at 1% level. Improving fiscal that compared to small-sized non-profit or- performance ratio or fund raising effi- ganizations, the larger ones have a wider ciency ratio by ten percentage points al- range of revenue sources in addition to lows the non-profit organizations to public support. help two or one more individuals, respectively. Unsurprisingly, the total as- The results of regressing Educ- sets also positively affect EducHealth, Health on fiscal performance, public sup- with a coefficient of 0.465 and statisti- port, and fund raising efficiency ratios, as cal significance at 1% level. However, well as total assets are presented in Table public support ratio has a negative coef- 4. ficient, and its effect on number of people benefiting from the organizations’ activities is statistically insignificant.

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Table 4. Regression: EducHealth = α0 + α1*(FPR) + α2*(PSR) + α3*(FRER) + α4*(TA) + ε1

Variables Sign coefficient t-value p-value VIF Constant + 2.370 .023 FPR + .190 1.276 .048 * 1.109 FRER + .114 .741 .000 ** 1.184 PSR _ -.193 -1.235 .225 1.217 TA + .465 4.687 .003 ** 1.025 R2= .298 Adj R 2=.217 F-value=3.710 P-value= .013 * mean significant at the level of 5% ** mean significant at the level of 1%

These results of the data analysis gests that total assets are positively associ- support three of the four hypotheses. Hy- ated with numbers of beneficiaries that a pothesis one states that fiscal performance non-profit organization can reach. This ratio has a positive effect on the perfor- suggestion is rather apparent and is sup- mance of non-profit organizations, meas- ported by previous studies (Denison and ured by number of people provided with Beard, 2003) and regression results of the access to basic education or health care. current research. Lee (2010) mentioned that a higher ratio indicates better financial management in Conclusion non-profit organizations. The regression results support the hypothesis one. The Non-profit organizations are an es- second hypothesis suggests that fund rais- sential part of every community. They pro- ing efficiency ratio has a positive effect the vide benefits to members of the commu- organizations’ provision of access to basic nity. It is important to ensure that a non- education and health care. Ritchie and profit organization is sustainable, properly Kolodinski (2003) stated that as the ratio capitalized and funded. Appropriate finan- becomes lower it shows greater efficiency. cial management ensures that there are ad- The regression results support the second equate resources to support its operations hypothesis of this research. The third hy- and achieve its goals (Bryce and Bryce, pothesis of this study expects public sup- 1999). The purpose of this study is to export ratio to be negatively associated with amine the relationship between financial the performance of non-profit organiza- management in non-profit organizations tions. Greenlee and Griesinger (2006), and operating in Haiti and their performance in Bryce and Bryce (1999) implied that a terms of providing benefits to a greater high ratio is not desirable for non-profit or- number of beneficiaries. ganizations because the contributions are very flexible and unpredictable. The results indicate that fiscal performance, fund raising efficiency and total The third hypothesis is not sup- assets are positively associated with the ported by the regression results; they sug- number of individuals whom the organiza- gest that public support ratio does not have tions can assist in accessing basic educa- a significant effect on the organizations’ tion and health care. The effective finan- performance. The fourth hypothesis sug- cial management is as important for the performance of non-profit organizations as

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it is known to be crucial for the perfor- between financial management and the mance of for-profit firms. Additionally, performance of non-profit organizations this study shows that too much emphasis allows its managers to employ the finan- on unpredictable public contributions may cial resources more efficiently for the ben- not be very beneficial for the performance efit of achieving the organization’s goals. of non-profit organizations. Besides, the Future researches may build up on the re- study also confirms the apparent notion sult of current study in a number of ways; that the greater assets of the organizations including expanding the sample size used provide them with more considerable abil- in the analysis, and checking the robust- ity to achieve their goals. ness of current results when other measurements of performance of non-profit or- This research reduces the gap in ganizations are adopted. understanding the role of financial management for non-profit organizations. Im- proved understanding of the relationship

References DeWitt, B.M. (2010). The non profit developpement companion: a Abraham, A. (2004). A model of financial workbook for fundraising success. performance analysis adapted for John Wiley & Sons Inc. nonprofit organisations. Research Online. Retrieved from Fabozzi, F.J. & Drake P.P. (2009). Finance http://ro.uow.edu.au/cgi/viewcon- capital market, financial management tent.cgi?article=1320&con- and investment management. John text=commpapers Wiley & Sons Inc.

Anthony, R.N. (2010). Management Glynn, J.J., Murphy, M.P., Perrin, J. & control in not-for-profit Abraham, A. (2003). Accounting for organizations (5th edition). Richard managers (3rd edition). Thomson D Irwin, Boston, MA. Learning, Melbourne.

Bryce, H.J. & Bryce, H. (1999). Financial Green, J.S. & Griesinger, D. (2006). Board and strategic management for non- performance and organizational profit organizations. (3 rd edition). effectiveness in nonprofit social Jossey-Bass Publishers. service organizations. Nonprofit management and leadership, 6, 381- Bureau, B.B. (2010). Standard for charity 402. accountability . Retrieved from http://ww.bbb.org/us/Standards- Hager, M.A. & Flack, T. (2004). The Pros Charity and Cons of financial efficiency standards nonprofit overhead cost Denison, D. & Beard, A. (2003). Financial project. Urban institute. Retrieved vulnerability of chariTable from http://www.urban.org/publica- organizations: lessons from research. tions/311055.html Journal for Nonprofit Management, 7(1), 23-31.

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Jaganathan, S. (1999). The role of non- Tuckman, B.W. (1991). The development governmental organization in and concurrent validity of the Pro- primary education: a study of six crastination Scale, Educational & NGOs in India. Retrieved from Psychological Measurement, 51, http://eli- 473-480. brary.worldbank.org/doi/book/10.15 96/1813-9450-2530# WTO. (2007). Doha developement agenda, Journal of WTO, 80, 2-5.

Janet, G.S. & Bukovinsky, D. (1998). York, P. (2010). Sustainability formula: Financial ratios for use in the How nonprofit organizations can analytical review of chariTable thrive in the emerging economy. organizations. The Ohio CPA TCC Group Research. Retrieved Journal, 57(1), 32. from http://ww.tccgrp.com/pdfs/Sus- tainabilityFormula.pdf Keating, E.K. & Frumkin, P. (2001). How to assess nonprofit financial performance. Retrieved from http://www.nasaa-arts.org/Learning- Services/Past-Meetings/Reading-5- Understanding-Financial-State- ments.pdf

Lee, S. (2010). Comparative analysis of the financial performance of nonprofit organizations: focusing on the franklin county senior activity center. Capstone project of Master of Public Administration, University of Kentuky. Retrieved from http://www.martin.uky.edu/cen- ters_research/Capstones_2010/Shin- woo.pdf

Ritchie, W.J. & Kolodinski, R.W. (2003). Nonprofit organization financial performance measurement: an evaluation of new and existing financial performance measures. Nonprofit management & leadership, Vol 13(4), 367-381.

Siciliano, J.I. (1997). The relationship between formal planning and performance in non-profit organizations. Nonprofit management and leadership, 7(4), 387-403.

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RELATIONSHIPS AMONG WORK VALUE, QUALITY OF WORK LIFE, AND TURNOVER INTENSION IN NURSES IN YUNLIN, TAIWAN

Ruey-Juen Chen Director, Division of Family Medicine, Department of Community Medicine Taoyuan Armed Forces General Hospital

Chen-Wei Yu Director, Division of Family Medicine, Department of Community Medicine Taoyuan Armed Forces General Hospital

Cheng-Min Chao* Department of Industrial Engineering and Management Chaoyang University of Technology Taiwan, R.O.C. *Corresponding author: [email protected]

Bor-Wen Cheng Department of Industrial Engineering and Management National Yunlin University of Science & Technology Taiwan, R.O.C.

Abstract

The purpose of this study was to investigate the relationships among work value, quality of work life, and turnover intension in nurses in Yunlin, Taiwan. The questionnaires were submitted to 568 nurses and 478 questionnaires were completed accounted for a response rate of 84.0 percent. They were verifying the validity and reliability of the scale. The data were analyzed by statistic analysis such as frequencies, means, path analysis using computer program SPSS for windows 17.0 and LISREL 8.72. Results demonstrate: (1) a significant, direct, and positive effect of work value on quality of work life. (2) a significant, direct, and negative effect of quality of work life on turnover intension. (3) an indirect negative effect of work value on

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turnover intension through quality of work life was also revealed in the finding. All paths in the model were significant (P<0.05). After the analysis of LISREL, the suitability of the framework was fine and proves that the model is applicable for the research. The results of this research will be used as a reference to develop strategies for human resource management in the hospitals of Taiwan.

Key words: Work Value, Quality of Work Life, Turnover Intension, Structural Equation Modeling (SEM)

Introduction inconsistencies within the literature regarding turnover, which may be attributable to Employee turnover, which is the vol- the uncertainty surrounding both definition untary departure of members from an or- and measurement (Cavanagh, 1989). More- ganization, is a topic of wide interest in or- over, both high turnover and high absence ganizational research (Hayes et al., 2006). are very costly and result in decreased Previous studies have been focused only standards of patient care (Price & Mueller, upon turnover intentions, which gage the 1981). The aim of this review of the nursing extent to which employees intend to leave, literature is, therefore, to identify the main rather than measuring factors relative to the influences on nurses’ turnover and absence actual turnover (Cohen, 1999). Nursing and possible common factors influencing professionals represent the largest em- both as well as the relationship between ab- ployee group in hospitals (Flanagan, 1997). sence and turnover. The workplace role of nurses is increasingly demanding. Nevertheless, reducing In management literature, ‘‘work the number of nursing personnel is often the value’’ is important, since the degree to first consideration in cost containment ef- which employees value their work attitude forts implemented in many Taiwan-based toward commitment, job satisfaction, and hospitals (Yin & Yang, 2002). In several loyalty. A clear understanding of employee countries, shortage of nurses is currently an work value structure helps employers and important problem. This shortage has been managers develop effective HR policies precipitated by a number of factors, includ- that meet employees’ needs and achieve ing an increasing number of elderly people, satisfactory work outcomes in areas that who typically suffer from chronic illnesses their employees value most. Research on and demographic changes with decreasing work values can be divided into three main numbers of young females. However, turn- areas: (1) defining the basic components of over is the major contributor to shortage of the work value domain and testing hypoth- nurses (Price & Mueller, 1981). There are eses concerning its structure (Bolton, 1980;

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Hendrix & Super, 1968; Neumann & Neu- (1986), we first estimate a preliminary mann, 1983); (2) the correlation between model to establish whether there are direct work values and other personal, social, or associations between work value and the organizational variables (Judge & Bretz, one dependent variable turnover intention. 1992; Lee, Dougherty, & Turban, 2000); Then, we use structural equation modeling and (3) the impact of culture on work values to test the hypothesized relationships pre- (Sagie, Elizur, & Koslowsky, 1996). These sented in Fig. 1. Although not pictured in three areas of work value research have Fig. 1, the model estimates the associations been the focus of attention in the last few of the control variables on the mediating decades. However, little research has been variables and the one dependent variable. conducted to investigate the work values of Taiwanese hospitality employees. Pizam Hypotheses (1993) pointed out that more research is needed to identify employees’ work values H1: The level of work value is positive as- that are industry specific and relevant to sociated with the level of quality of work various national and ethnic cultures. life.

The magnitude of work value, quality H2: The level of work value is negative as- of work life, and turnover intension has be- sociated with the level of turnover inten- come a matter of concern for nurses. Alt- sion. hough a number of researchers have explored quality of work life and turnover in- H2: The level of quality of work life is neg- tension nurses who work in critical care set- ative associated with the level of turnover tings, a few studies have explored these is- intension. sues among nurses, but there is a lack of Method studies assessing the work value, and lack of studies assessing the structural model of Participants these concepts. Little research has been done in the nurses using work life, quality The general and job characteristics of work life, and turnover intension ques- of 478 subjects were shown in Table 1. tionnaires to analysis the relationships between these three independent variables. Measures Thus, the purposes of this study were to examine work value, quality of work life, and Structural equations modeling turnover intension and their relationships in (SEM) was used in a comprehensive, com- nurses in Yunlin, Taiwan. bined analysis of both structural and meas- Consistent with the argument about mediat- urement models. The LISREL software ing variables posited by Baron & Kenny

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package was used to perform all SEM sta- the observed variables (indicators, or mani- tistical procedures, and all research hypoth- fest variables). Using LISREL estimations eses were tested using SPSS for Window and traditional alphas, the assessment of the 15.0 and LISREL 8.72 with the measure- measurement model includes: Average ment items. The measurement model spec- Variance Extracted (AVE), composite reli- ifies the relationships between the latent ability coefficients (LISREL internal con- variables (constructs being measured) and sistency coefficients), and an investigation of reliability coefficients (Cronbach’s α).

Figure. 1. The hypothesized model, linking work value, quality of work life, and turnover intension.

This research utilized a pretest to en- determine the internal consistency, and the hance reliability and validity. Aside from yielded a values were 0.934 for the work the significant loading of all items to their value questionnaire, 0.957 for the quality of constructs met the recommended criteria of work life questionnaire, and 0.816 for the 0.40 in this research (Hair, Black, Babin, turnover intention questionnaire. The re- Anderson, & Tatham, 2006). When the fac- sults presented in Table 2 attest to the high tor loading was <0.3, and item was deleted. internal consistency of the instrument in This research use three questionnaires, in- which all values were above the suggested clude: Work Value Questionnaire, Quality level of 0.70 for scale robustness (Nunnally of Work Life Questionnaire, and Turnover & Berstein, 1994). Intension Questionnaire. All questionnaires use five-point Likert scale was used, with Results anchors ranging from 5 to 1(5: always, 4: frequently, 3: occasionally, 2: seldom, 1: The average variance extracted indi- never). Cronbach’s alpha was calculated to cates what percentage of the variance of the

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construct is explained by an individual higher composite reliability than the bench- item. In this study, all constructs demon- mark of 0.60. The internal consistency of strated average variance extracted values of the measurement model was assessed by between 0.6171 and 0.8753 (see Table 2). computing the composite reliability; the co- All the questionnaires are higher than the efficients ranged from 0.8905 to 0.9255, benchmark of 0.5 recommended by Fornell and are displayed for each of the variables and Larcker (1981). Fornell and Larcker under study in Table 2. (1981) suggested all constructs displayed a

Table 1. General and job characteristics of the subjects( N=478)

variables category N % ≦ 20 0 0 21-25 114 23.8 Age 26-30 225 47.1 31-35 78 16.3 36-40 34 7.1 ≧ 41 27 5.6 ≦Senior high 3 0.6 school Education Junior College 205 42.9 University 266 55.6 ≧Master 4 0.8 ≦1(year) 27 5.6 1-3(year) 127 26.6 3-5(year) 87 18.2 Work duration 5-10(year) 132 27.6 11-15(year) 51 10.7 15-20(year) 30 6.3 ≧20(year) 24 5.0

The initial model revealed a signifi- Unfortunately, Bagozzi and Yi (1988) indi- cant Chi-square-test, Chi-square(51) cated the statistical analysis of chi-square is =484.45, p <0.001, reflecting inadequate sensitive to large sample sizes and will re- model fit. While the p value of the chi- ject even a closely fitting model. This find- square result did not meet the recom- ing was supported by other fit indices: Root mended value as depicted in Table 3, this Mean Square Residual (RMR)=0.02, significant p value of 0.000 can be ex- Standardized RMR (SRMR)=0.046, good- plained by the relatively large sample size ness-of-fit index (GFI)=0.86, adjusted employed in this study (478 respondents). goodness-of-fit index (AGFI)=0.78,

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Table 2. Mean score work value, quality of work life, and turnover intension

Average vari- Ite Cronbach’s Composite Variables Mean S.D ance extra- m α reliability cyed Work Value 15 2.373 0.499 0.934 Terminal Value 7 2.321 0.527 0.911 0.8031 0.8905 Instrumental Value 8 2.427 0.527 0.869 Quality of Work Life 35 2.625 0.526 0.957 Working Content 4 2.781 0.685 0.787 Working Environ- 6 2.715 0.603 0.853 ment Growth and 8 2.519 0.570 0.895 Achievement 0.8753 0.9255 Interpersonal Rela- 4 2.365 0.574 0.818 tions Welfare System 7 2.623 0.612 0.887 Work and Family 8 2.744 0.669 0.895 Relations Turnover Intension 4 3.047 0.469 0.816 0.6171 0.8655

normative fit index (NFI)=0.96, non-nor- work life and 72.0 percent for turnover in- mative fit index (NNFI)=0.96, comparative tension. Table 4 presents the LISREL esti- fit index (CFI)=0.97. All the values were mates of structural model coefficients. The not supported the adequacy of the model. path coefficients from work value to quality Although GFI and AGFI values exceeding of work life was significant and positively 0.90 are preferable, the more liberal cutoff (γ 11 = 84.0 , t=16.08). Work value was not of 0.80 has been used for a good model fit (Hair et al., 2006). Table 3 shows that most significantly correlated with turnover inten- indices indicated a reasonably high level of sion (γ 21 = − 07.0 , t=-0.67). Quality of fitness for the structural model in this study. work life was significantly and negatively The standardized solution estimated correlated with turnover intension ( by the LISREL 8.72 program was used for β 21 = − 65.0 , t=-8.32). Thus, work value af- interpreting the structural relation results. Path coefficients for each value from the fects turnover intension through quality of models are shown in Fig. 2, which also con- work life. All of the three causal paths are firms that the model explains a substantial specified in the proposed model; two were portion of the variance in all the endoge- found to be statistically significant for turn- nous variables: 84.0 percent for quality of over intension. The direct effects of antecedents on the quality of work life (i.e.,

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Table 3. Measures of model fit and reported values for structural model

Recommended Fit index Model values Model fit values 484.45(p=0.00 Chi-square p≧0.05 Poor fit 0) Chi-square/degree of freedom ≦5 9.5 (df=51) Poor fit Root Mean Square Residual ≦0.05 0.020 Good fit (RMR) Standardized RMR (SRMR) ≦0.05 0.046 Good fit GFI(goodness of fit index) ≧0.9 0.86 Moderate fit AGFI(adjusted goodness of fit ≧0.9 0.78 Moderate fit index) NFI(normed fit index) ≧0.9 0.96 Good fit NNFI(Non-normed fit index) ≧0.9 0.96 Good fit CFI(Comparative fit index) ≧0.9 0.97 Good fit

]Table 4. t and p values for indirect paths of the effects of the Work value on Turnover intention Path t p Work value → Quality of work life 0.84 16.08 0.03 Work value → Turnover intention 0.72 -0.67 0.08 Quality of work life →Turnover intention -8.32 0.04 Terminal value ← Work value 22.35 0.02 Instrumental value ← Work value 26.09 0.02 Working content ← Quality of work life -- -- Working environment ← Quality of work life 19.28 0.03 Growth and achievement ← Quality of work life 20.64 0.02 Interpersonal relations ← Quality of work life 17.98 0.03 Welfare system ← Quality of work life 20.51 0.03 Work and family relations ← Quality of work life 17.43 0.03 *p<0.05

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R 2 = 84.0

R 2 = 72.0

Figure. 2. Model of the relations among the work value, quality of work life, and turnover intension. All paths coefficient estimates are standardized and significant at the p<0.05 level.

work value) was examined. Work value on for each value from the models are explains quality of work life paths was positively a substantial portion of the variance in all significant. Therefore, H1 is supported. the endogenous variables: 84.0 percent for Work value on turnover intension paths was quality of work life and 72.0 percent for not positively significant. Therefore, H2 is turnover intension. not supported. The direct effects of antecedents on the turnover intension (i.e., qual- Although generally positive work ity of work life) was examined. Quality of value has been found to enhance quality of work life paths was negatively significant. work life, it is also possible to combine high Therefore, H3 is supported. quality of work life with feelings that in any circumstances would have invoked quality Discussion of work life, and negative quality of work life has been found to enhance turnover in- This study has investigated the rela- tension, it is also possible to combine high tionships among work value, quality of turnover intension with feelings that in any work life, and turnover intension in nurses circumstances would have invoked turno- in Yunlin, Taiwan. The discussion has ad- ver intension. An indirect negative effect of dressed one major issues. The path analysis work value on turnover intension through showed a significant effect of work value quality of work life was also revealed in the on quality of work life and quality of work finding. life on turnover intension. Path coefficients

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Finally, although this research pro- Conclusions vides a comprehensive model for understanding of the process through which work The findings of this study show value impacts the nurses. functioning, it al- that work value plays an antecedent lows only a tentative glance into its explan- role to quality of work life, and qual- atory mechanisms. Further researches ity of work life an antecedent role to should focus on the impact of turnover in- turnover intention. This study sug- tension on work value and reinforce inter- gests that work value is an important actions between the above mentioned three factor related to quality of work life, variables. and human research manager should be concerned with this issue.

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Hayes, L.J., O ’Brien-Pallas, L., Duffield, Pizam, A. (1993). Managing cross-cultural C., Shamian, J., Buchan, J., Hughes, hospitality enterprises. In P. Jones & F., Laschinger, H.K., North, N., A. Pizam (Ed.), The international Stone, P.W., (2006). Nurse turnover: hospitality industry: Organizational a literature review. International and operational issues (pp. 51-73). Journal of Nursing Studies 43, 237- New York, NY: Wiley. 263. Price, J., Mueller, C., (1981). Professional Hendrix, V., & Super, D. E. (1968). Factor Turnover: The Case for Nurses. Iowa dimensions and reliability of the State University Press, Ames. work values inventory. Vocational Guidance Quarterly, 17, 269-274. Sagie, A., Elizur, D., & Koslowsky, M. (1996). Work values: A theoretical Judge, T. A., & Bretz, R. D. (1992). Ef- overview and a mode of their effects. fects of work values on job choice Journal of Organizational Behavior, decisions. Journal of Applied Psy- 17, 503-514. chology, 77, 261-271. Yin, J.-C.T., Yang, K.-P.A., (2002). Nurs- Lee, F. K., Dougherty, T. W., & Turban, ing turnover in Taiwan: a meta-anal- D. B. (2000). The role of personality ysis of related factors. International and work values in mentoring pro- Journal of Nursing Studies 39, 573- grams. Review of Business, 21, 33- 581. 40.

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AN EMPIRICAL STUDY OF THE ORGANIZATIONAL CULTURE, LEADERSHIP AND FIRM PERFORMANCE IN A VIETNAM FAMILY BUSINESS

Nguyen Huu Dan Yunshi Liu* Ping-Fu Hsu and Sheng-Hung Yu

Department of Business Administration, National Yunlin University of Science and Technology, Taiwan * Corresponding author: [email protected]

Abstract The study purpose explore the impact of transformational leadership on organizational culture, using the samples from seven industry sectors in Vietnam, and examined the moderating role of organizational size in the relationship between transformational leadership and organizational culture. The results showed that organizational size has moderating effects on the relationship between transformational leadership and organizational culture. Organizational size significantly contributed to the changing of organizational culture. As organization increase in size, commitment and harmony of organization decrease.

Keywords: Family firm, organizational culture, transformational leadership, organizational size

Introduction 32% total of investment outlays in 2006 (Ho 2007), and about 85% total of corporate The small and medium sized family workforce in 2004 (Le et al . 2006). The small firms play a vital role account for the devel- and medium sized enterprises also showed opment and growth of the economy. They oc- the important function in creating jobs, main- cupy an overwhelming proportion in total taining high mobility of the labor market, and number of the country’s enterprises, for ex- narrowing development gaps among coun- ample, accounting for 97% and 87% of regu- try’s localities. The current study, based on lar workforce and registered capital criteria in the oriented culture samples, presents the em- 2005. Moreover, they have contributed 39% pirical test to analyze the impact of family of gross domestic product, firm culture through its values on specific performance variables such as profitability,

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survival, and group cohesion. In this sense, considered as micro enterprises, from 10 to the institutional theory is used to build re- less than 200 employees shall be considered search model, since it allows us to understand as small enterprises, and from 200 to 300 why the values such as commitment and har- workers to be treated as medium enterprises. mony flow from the family culture to that of Family - owned businesses have had a rich the firm. history in many economies throughout many generations, and in Vietnam, it could be con- Many researchers studied extensively sidered as the foundation of establishing the in size of firm, but still have a gap in firm size initial business. affect the psychological processes at the micro level (Park and Luo 2001; Shinkle and Kri- Institutional theory is an important ele- auciunas 2010). They are interested in the role ment of the theoretical framework in order to of organizational culture in small and medium explain the origin of flow of values and atti- enterprises in both practice and theory (Den- tudes from owning family to firm. The family ison 1990; Schein 1992). However, these is- could be considered as an external institution of sues are not very concerned in Vietnam. The the type “stakeholder” (Oliver 1991). Moreo- current study aims to investigate the factors ver, family firms are dependent on the owned exist in Vietnam small and medium family family for critical resources such as cultural el- firm that determine business success. More ements, as values (DiMaggio and Powell specifically, this research determines the cul- 1983). Culture in family firm is a result of val- ture factor as a core of business success of ues, beliefs, and goals rooted in the family, its family firms across firm size. history, and present social relationships (Hall et al . 2001). In addition, Stinnet (1986) stated that Literature Review essential conditions for a firm to achieve a strong culture could help it become more prof- Many scholars expressed their works itable. Chrisman et al . (2002) supported that the in the family firm. Rosenblatt et al . (1985) strong ties or social networks allow perceptions mentioned majority ownership, or control lies of values to be shared among the members of within the single family. Two or more ex- the family because of the frequent and intense tended family members influence the direc- contacts. tion of business (Davis and Tagiruri 1985). Stern (1986) recommended the members of Commitment and harmony toward one or two families run and own the business. family business have been identified as the Family own business takes up 60% of equity key desirable attributes to family firm perfor- in the business (Donckels and Frohlich 1991). mance. Specific values, such as commitment They all agree that family business defined as and harmony provide a family firm with a a business owned and managed by a nuclear strong culture (Vallejo 2008). Meanwhile, family. Consequently, family owned business the organizational culture is an important el- might define as an enterprise with the signifi- ement for organizations to understand their cant ownership and control by members of a own dynamic culture, so managers can capi- family or some families. talize on the insights generated by the cultural perspective to wield greater control over their In Vietnam, according to Decree No. organizations. Naicker (2008) stated that the 56/2009/ND - CP dated 30/6/2009 of the culture of an organization has an important Government, the number of employees regu- impact on its performance. Starting from these lated annual average of 10 people or less are

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arguments, we define commitment and har- them to think critically by using novel ap- mony as the values used to build the research proaches, involving followers in decision - model for the analysis of culture in the family making processes, inspiring loyalty, while firm. recognizing and appreciating the different needs of each follower to develop his or her Transformational leadership theory personal potential (Avolio 1999). Transfor- provides the theoretical support for current mational leaders frequently change their or- research to explain how the transmission or ganization’s culture with a new vision and re- diffusion of these cultural elements occurs. vision of its shared assumptions, values and Leaders play an important role in defining or- norms (Bass 1985). Therefore, we predicted ganizational culture (Pettigrew 1979; Dyer as the following: 1985). The transformational leader motivates people to do more than others would origi- Hypothesis 1: Transformational leadership of family nally expect to do by articulating a vision, firm will be positively related to organizational commit- providing an appropriate role model, foster- ment. ing the acceptance of group goals, providing individualized support and intellectual stimu- The value of harmony comprises the lation, and expressing high performance ex- qualities “appreciation,” “spend time to- pectations (Podsakoff et al . 1990). Past re- gether” and “communication.” One of the searches reveal that leaders described as characteristic values of the family firm is at- charismatic, transformational or visionary mosphere. Vallejo (2008) stated that the bet- have positive effects on their organizations ter human relationships within the business, and on their followers, both in terms of firm the better working atmosphere. The simple performance and levels of satisfaction, com- structure and special personnel of family firm mitment and identification (Fiol et al . 1999; make them more participative and creative Vallejo 2009).Lubatkin et al . (2006) stated that (Daily and Dollinger 1992). Moreover, trust the leaders of small and medium enterprises are is one of the most important factors of the ratified and direction their firm’s strategies, as family firm. It highly contributes to family well as participate directly implementation firm’s development and survival. The partic- every day. ipation in the decision - making process, the existence of a stimulant - working atmos- Transformational leaderships are pos- phere are necessary to improve harmony in itively associated with organizational com- organizations (Vallejo 2011). A transforma- mitment in a variety of organizational set- tional leadership can bring harmony to a sit- tings and cultures (Lowe et al . 1996; uation that could be exacerbated by a quarrel- Walumbwa and Lawler 2003). They are able some organization. Thus, we formulate the to influence their followers by promoting following hypothesis: higher levels of intrinsic value associated with goal accomplishment, emphasizing the Hypothesis2: Transformational leadership of family linkages between follower effort and goal firm will be positively related to organizational har- achievement, and by creating a higher level mony of personal commitment on the part of the leader and followers to a common vision, Commitment refers to the acceptance mission, and organizational goals (Shamir et of the family’s goals while cohesion refers to al . 1993). Moreover, Transformational lead- the formal union of family members in the ers influence their followers by encouraging

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family or movement. Family firm commit- relationship conflict and family member im- ment may enhance the family members’ pediment (Kid-well, Kellermanns and Eddle- sense of responsibility for the business, lead- ston 2012). Moreover, the family relationship ing them to instill processes that will protect directly influences the success of family busi- the firm and benefit the organization. Indeed, ness. Furthermore, strong family relationships many family members identify with the com- are critical to the accomplishment of a family pany are willing to work harder and reinvest business. If family members cannot work to- part of their profits into the business to allow gether in harmony, succession will only be a it to grow in the long term. Therefore, strong imagine (Amundson 1997). Hence, harmony commitment and personal bonds are expected of the family is considered as the most life- to reduce threats posed by adverse selection sustaining resource to enhance family firms and moral hazard (McAfee and McMillan (Lee 2006). Increasing family harmony would 1987). Cohesion comes from group mem- increase the benefits of the family members in bers’ commitment to work together to com- business life (Beehr, Drexler, and Faulkner plete their shared tasks and accomplish their 1997). Therefore, without harmony, family collective tasks or goals (Yukelson, Wein- members will eventually splinter into separate berg and Jackson 1984; Guzzo 1995). The individuals working towards their own per- bonds of unity develop from family mem- sonal agendas and not together toward a group bers’ concerted effort to achieve their com- goal. It is important for family members to see mon goals are considered indicative of group themselves as a part of the group working to- cohesion. Moreover, commitment derives wards a goal for cohesiveness to exist. There- from the relation of a family member’s job to fore, we predicted as the following: those of another in the family firm. It has been found that jobs are not integrated with Hypothesis 4: Organizational harmony of family the work activities of others tend to be asso- firm will be positively related to group cohesion. ciated with less favorable attitudes (Salancik 1977). Thus, we predicted as the following: Commitment and harmony of family firm’s culture are positively related to profita- Hypothesis 3: Organizational commitment of bility and survival (Denison 1984; Ogbonna family firm will be positively related to group co- and Harris 2000; Sorensen 2002). In particular, hesion. the family firm commitment is associated with satisfaction, direction, and duration of work ef- The level harmony (trust, participa- fort and extra-role behaviors, so it contributes tion, and organizational climate) has a positive to the realization of a family firm’s mission and and significant influence on the family firm’s goals (Zahra et al. 2008). Sirmon and Hitt cohesion (Ruiz, Vallejo and Martinez 2013). (2003) expressed that strong family firm com- The family harmony is supported with some mitment may be a unique resource of family family characteristics such as motivation, firms, which motivates family members to ac- commitment, loyalty, inspiration, willing to complish firm goals. Family members’ com- work long hours without compensation, high mitment to the business can lead to “survivabil- flexibility in work roles (Dyer 2006; Beehr, ity capital” such as equity investments, mone- Drexler and Faulkner 1997). Lee (2006) found tary loans and free labor, which help to grow that family harmony is a positive and signifi- and to sustain the business during poor eco- cant predictor of organizational commitment, nomic times. Family firm commitment benefits work, and life satisfaction. Perceiving family family firms (Zahra et al. 2008). Past research harmony norms are noteworthy related to both

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has found that families display pro-organizational behaviors are more likely to report strong Hypothesis 5: Organizational commitment of family financial performance (Eddleston and Keller- firm will be positively related to organizational survival. manns 2007; Eddleston et al. 2008a). Moreo- ver, family firm commitment positively influ- Hypothesis 6: Organizational commitment of family ences a firm’s strategic flexibility, so it has the firm will be positively related to organizational profita- ability to pursue new opportunities and respond bility. to environmental threats (Zahra et al. 2008). In addition, the level of harmony (trust, participa- Hypothesis 7: Organizational harmony of family tion, and organizational climate) has a positive firm will be positively related to organizational sur- and significant influence on the family firm’s vival. survival and profitability (Ruiz, Vallejo, and Martinez 2013). Therefore, family firm com- Hypothesis 8: Organizational harmony of family mitment and harmony may enhance family firm will be positively related to organizational prof- firm survival and profitability. Based on the itability. samples from oriented culture of a family firm, we predicted as the following:

H5 Survival

H9 H10 Commitment H6 H7

H1 Transformation H8 Profitability Leadership

H2 Harmony H3

H4 Cohesion Figure 1: Research Model

The Moderating Effect Of Firm Size addition, small firms are more likely to compete, not as the firms with the newest specific Small firms usually have better internal technology, but as the firms that can best inte- communication processes than larger firms be- grate new technologies with a broad array of cause their structures are simpler, less hierar- other technologies. Thus, small firms are better chical, and less bureaucratic (Cordero 1991). In suited to respond to new technologies faster; it contrast, larger firms relatively are not as de- is more critical that they do, so since they often pendent on speed as a source of competitive ad- lack of complementary assets and have a nar- vantage. They are more likely than smaller rower knowledge base. Smaller firms will have firms to possess complementary assets are. In faster learning speed than larger firms because of the reasons discussed above. Learning speed

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enables small firms to develop the technologi- Hypothesis 9: Organizational sizes nega- cal strength in order to exploit their competitive tively moderate the relationship between advantage of flexibility. In addition, learning transformational leadership and organiza- speed is not as critical for larger firms, because tional commitment. they can develop technological strength by integrating a broader set of technologies. Firm Hypothesis 10: Organizational sizes nega- size is a crucial factor, which may be helpful in tively moderate the relationship between enhancing certain the relationship between transformational leadership and organiza- transformational leadership and organizational tional harmony. performance. However, there were few studies discussed the relationship between transforma- Methods tional leadership and organizational culture with the moderating effect of firm size. The data were collected in the winter season 2011 at three largest areas from Vi- In small family firms, less complex etnam family own business. The sample de- stakeholder structures have more managerial sign and the selection of sample units con- discretion. In contrast, more stakeholder ducted along the following lines. (i) The fam- group’s leaders have more leadership con- ily own business was first stratified by zone; straints they face (Hambrick and Finkelstein (ii) Firm size will be further ranked by num- 1987). By holding private firm, leaders of ber of employees. The family firms were se- smaller family firms enjoy greater freedom lected by the following constraints: (i) Small from the kind of oversight and discipline im- and medium family firms must be selected; posed by the capital markets onto their publicly (ii) At least ten people are full-time employ- owned counterparts. Therefore, small family ment, and (iii) Firm age is more than three firms provide a particularly advantageous set- years. ting for transformational leaderships play a proximal role in enhancing, instilling individ- The questionnaire included questions ual commitment, establishing expectations and that covered a wide range of business matters harmony more than medium family firms do. (a) Location; (b) Name of the family owned Leaders in small family firms are engaged in business; (c) Name and gender of the princi- the implementation of the firm’s strategies. pal owner; (d) Size of business enterprise; (e) They have opportunities to directly encourage Business industry. All questions and and support novel thinking among all the firm’s measures for establishing scales were in- employees, so employees in a small family firm formed by the extant literature. likely to look to the leader for clarification and reassurance more than medium family firms. Six-hundred questionnaires were dis- The leaders in small family firms have closed tributed to the workers and CEOs in family relationship with their followers more than in firm at seven Vietnam industries. Only 379 of larger firms. Therefore, when the size of firms the questionnaires were returned (63.1%); increase, transformational leadership has less small firm 191 (31.8%) and medium firm 188 influence on transforming the needs, values of (31.3%). Mean and standard deviation for their followers, which may decrease their com- small firms and medium firms were 1.58 (SD mitment to the firm. Thus, we propose the fol- = 4.96), and 3.54 (SD = 5.00). lowing hypothesis:

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Measures very important requisite for the family firm’s performance and survival (LaChapelle and The research questionnaire was de- Barnes 1998). To measure working atmos- veloped following standardized forward- phere, we used Fiedler’s (1967) scale with 10 backward translation procedure (Jone, Lee, items. Phillips, Zhang, and Jaceldo 2001). All of the items and scale were utilized in this study We used Beehr’s (1976) scale with 3 through the procedure of back - translation items to measure group cohesion; Carless et and were verified to achieve 0.70 or above in- al . (2000) with 7-item to measure leadership; ter-rater reliability value (Chen and Li 2011). the scales of Galán and Leal (1988) with 3 and 5 items to measure profitability; the scale Commitments : the study focus on small and of DeMatos et al . (2009) with 3 items to medium family firms in Eastern culture in measure survival. three parts: Identification : employees working in family firms identify with the cultural Data analyses values of their firm (Moscetello 1990). In- volvement : In family firms, the employees are Data were analyzed with an SEM more involved (Moscetello 1990). Loyalty : (Structural Equation Modeling) moderation degree of loyalty in family firms compared to analyses (Edwards and Lambert 2007; Muller non - family firms are more highly (Ward and et al . 2005). A measurement model was speci- Aronoff 1991). Scale to measure used 9 items fied first to achieve a uni-dimensional measure- extracted from the 17 items Organization ment of the latent constructs (Anderson and Commitment Scale (Buchanan, 1974). Gerbing 1988).The model fit for two conditions with the multiple groups SEM estimation evalu- Harmonies: Three harmony elements were ated size moderator effects (Edwards and Lam- observed in order to optimize its measure. bert 2007): a) Non-constrained model, allowing Working environment / atmosphere : Family the direct effects parameters to vary as a function firms have better working atmospheres, of firm size; and b) Constrained model, con- pointing out that they tend to be good places straining the direct effects to be equal for small to work (Vallejo 2008, 2011). Participation: firms and medium firms. A chi-square signifi- Family firms have much more flexible struc- cance test for the two models resulting in a dete- ture, which makes them more participative riorated model fit for the second condition (Goffee and Scase 1980; Daily and Dollinger would be indicative of a size moderation effect. 1992). The personal involvement of the fam- All SEM results were obtained with the AMOS ily members makes family firms more crea- computer software (Arbuckle 1999). tive (Pervin 1997). Trust: Those organizations whose leader build a system of relations Results based on trust are more effective and more successful in the long run (Bennis and Gold- Table 1. shows alpha reliabilities for smith 1997; Shaw 1997). Trust as an im- small firms and medium firms. The portant source of competitive advantage for Cronbach’s alphas for all research variables the family firm, since it contributes to cutting were above 0.81. This reveals a high level of transaction costs (Steier 2001). reliability. Table 2 shows descriptive statistics, Achieving a high degree of trust in relationships with non - family employees is

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Table 1. Alpha reliabilities for small firm, medium firm, and all samples

Cronbach’s Alpha Variables Items Small Medium All sam- (N=191) (N=188) ples Commitment Identification (id) 3 .892 .858 .877 (ct) Loyalty (lo) 3 .898 .857 .878 Involvement (in) 3 .904 .839 .871 Atmosphere (at) 10 .931 .942 .937 Man- .838 3 .860 .812 Faith ager Trust Harmony (ha) Peer 3 .845 .841 .843 (tr) Man- .844 Confi- 3 .828 .859 ager dent Peer 3 .841 .823 .830 Participation (pa) 4 .922 .844 .886 Leadership (tl) 7 .935 .914 .927 Cohesion (co) 3 .884 .895 .889 Survival (su) 3 .866 .914 .892 Profitability (pr) 3 .876 .928 .903

Table 2. Descriptive Statistics and correlation coefficients

Small firm Medium firm Correlation M SD M SD firm pr ld co id lo in at tr pa Su fir 1.5 3.5 .33* .29* .42* .54* .56* .54* .58* .53* .46* .59* m 8 .49 4 .50 - * * * * * * * * * * 4.5 1.3 5.0 1.2 .60* .55* .32* .26* .22* .23* .32* .27* .25* .32* pr 8 7 1 1 * - * * * * * * * * * 4.7 1.2 4.3 1.1 .37* .47* ld 7 2 4 3 * * - .09 .14* .12 .05 .17* .10 .142 .08 4.7 1.2 4.6 1.1 .29* .41* .55* .47* .47* .47* .42* .43* .31* .65* co 4 9 9 0 * * * - * * * * * * * 4.8 1.4 4.6 1.3 .33* .32* .21* .40* .77* .77* .34* .27* .54* id 5 7 1 6 * * * * - * * * * .18* * 4.5 1.4 4.4 1.3 .43* .37* .22* .34* .69* .72* .37* .28* .24* .57* lo 7 4 5 9 * * * * * - * * * * * 4.6 1.4 4.5 1.4 .41* .35* .27* .32* .64* .69* .37* .29* .21* .55* in 5 1 3 5 * * * * * * - * * * * 4.8 1.1 4.8 1.2 .24* .32* .18* .37* .35* .39* .36* .81* .80* .59* at 3 2 9 0 * * * * * * * - * * * 4.7 1.2 4.9 1.2 .21* .33* .22* .41* .41* .43* .44* .75* .82* .51* tr 6 3 4 7 * * * * * * * * - * * 4.8 1.3 4.9 1.2 .28* .37* .32* .44* .38* .40* .43* .70* .74* .42* pa 3 1 3 3 * * * * * * * * * - * 4.8 1.3 4.9 1.5 .37* .36* .47* .50* .34* .29* .36* .36* .41* .38* su 1 6 5 2 * * * * * * * * * * - Note: Correlation coefficients for the small firm are in the bottom-half; correlations for the medium firm are in the top-half; * p < 0.05 level; ** p < 0.01 level; ***p < 0.001 level.

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Table 3 . Model fit indices

Medium firm All samples (N=379) Indices Small firm (N=191) (N=188) Chi-square 263.8 286.5 286.2 TLI .972 .966 .981 CFI .976 .971 .984 RMSEA .043 .050 .036 Note: Tucker-LewisIndex = TLI; Comparative Fit Index = CFI; and Root-Mean-Square Error of Approximation = RMSEA, (Hu and Bentler, 1999).

Table 4. Overview of model effects and size moderation tests

Model Size moderation tests Sample Sig 95% CI Constrained χ2 Non-constrained χ2 ∆χ2 .32*** (.133, .422) Small firms 271.371 263.761 7.6*** .30*** (.124, .374) .13 (-.035, .305) Medium firms .17* (.009, .313) 283.960 286.518 -2.6* .29*** (.110, .328) All samples 301.299 286.266 15.0*** .24*** (.098, .297) Note: All chi-square values were significant at the p < 0.001 level; there were two d.f. for the ∆χ2 test; *p < 0.05; ***p < 0.001; CI = Confidence Intervals.

Table 5. Final results

Hypothesis Small firm Medium firm Hypothesis Small firm Medium firm H1 High -Supported Not -Supported H6 High -Supported Low -Supported H2 High -Supported Low -Supported H7 High -Supported High -Supported H3 Low -Supported High -Supported H8 Supported High -Supported H4 High -Supported High -Supported H9 Supported Supported H5 Not -Supported High -Supported H10 Supported Supported

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id lo in su1 su2 su3

.81/.90 .85/.86 .81/.86 .83/.91 .86/.86 .79/.88

ld1

ct .14/.53*** su ld2 .82/.77 pr1 .80/.82 .33***/.19* ld3 .32***/.13 .84/.89 .83/.82 .18*/.47*** ld4 .83/.75 ld pr .86/.94 pr2 .81/.75 .30***/.41*** .30***/.17* ld5 .81/.88 .80/.78 .25**/.26*** pr3 .83/.75 ld6 ha .27***/.29*** co

ld7

.84/.90 .90/.91 .84/.90 .91/.89 .85/.88 .79/.81

at tr pa co1 co2 co3

Figure 2. Measurement model factor loadings and correlations among latent variables (small size/medium size). All factor loadings were significant at the p < .001 levels; *p < 0.05; **p < 0.01;***p < 0.001. The indicators for model variables (transformational leadership = ld, commitment = ct; identification = id; loyalty = lo; involvement = in; harmony = ha; atmosphere = at; trust = tr; participation = pa; survival = su; profitability = pr; cohesion = co). and correlation coefficients for small firms they are biased in emotion rather than in the (N = 191) and medium firm (N = 188). In Ta- rule, and profit. The relationship between them ble 3, Chi-square values were adequate for is based on the close emotional relationship of small firm (263.76 [196]) and medium firm family members. Therefore, it may appear of (286.51 [196]), with acceptable measures of intermediate variables to explain this situation fit: Tucker-Lewis Index [TLI] = .972 and (Vallejo, 2011). .966; Comparative Fit Index [CFI] = .976 and .971; and Root-Mean-Square Error of Ap- The findings demonstrated the trans- proximation [RMSEA] = .043 and .050, (Hu formation leader factors significantly influ- and Bentler 1999). Figure 2 showed factor ence small and medium family firms’ sur- loadings and correlations among latent varia- vival, profitability, and cohesion across cul- bles in the initial measurement model (small tures and industries (see Table 5). The results firm / medium firm), and the alteration of stated that transformational leadership had a statistical indices when the family firm positive effect on outcome variables in Vi- changing the size. etnam, which supports the universality of transformational leadership, as argued by In principle, we believe that our failure Dorfman and Howell (1997). It also ex- to confirm the hypothesis concerning the pressed firm size had linked to the relation- positive relation between commitment and ship between transformational leadership and survival (Hypothesis 5) in small family firm organizational culture. Therefore, firm size while it is positive significant in medium has an important role on the impact of trans- family firm may due to the characteristics of formational leadership to orient culture. oriented culture in the family firm. When the These findings may allow us to conclude that number of employees of firm are not too many,

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the larger employee the lower organization small firm was much more influential than commitment and organizational harmony. medium firm by the effects of transformational leadership on organizational culture. The fluctuation of model indices be- There is substantial evidence indicating that tween two kind of firms occurred related to small firm in Vietnam still maintains the fam- the changing of the firm size, which may di- ily culture in the process of running business, rectly influence organizational culture as a simple in management structure, and proac- moderating variable. These results suggested tive and flexible in price. These things are that when increasing the number of their most important protective factor against employees to an extent will be likely reduced a difficult situation of doing business. the relationship between trans-formational leadership and organizational harmony, as The research on small and medium well as reducing the correlation between family firm in Eastern culture proposed other transformational leadership and organiza- view for the managers when using it as a tool tional commitment. to help them accomplish better levels of performance in small and medium family Moderation tests for size are shown in firm, in the whole of financial measure Table 4. for the model that were non-con- (profitability), and non-financial measure strained (allowing the effect to vary by size) (survival and group cohesion). This is and constrained (the effect was set equal for compatible with the work of Dikoklli at el. small and medium). The 95 percent boot- (2009), which reported managers typically strapped confidence intervals imply that the used a set of performance measures to effects of transformational leadership on or- evaluate the effectiveness and efficiency of ganizational culture (commitment and har- their business operations. mony) were significant in all cases for the small firm and only significant through har- Values based management was mony from organizational leadership for me- considered in different point of view for dium firm. These confidence intervals are small and medium family firm’s culture symmetric regarding the 95 percent of a t dis- when we tested the effect of management on tribution; thus, they do not include zero when firm performance under the moderator a two-tailed t-test is significant at the .05 lev- variable of firm size. Two models showed the els (Shrout and Bolger 2002). Moreover, the fluctuation of firm size, in which difference test ( ∆χ2) showed that the effect of commitment and harmony had caused by transformational leadership to organizational survival, cohesion, and profitability. There- commitment was significant in both small fore, the manager can use the proposed model and full size samples, except medium sample. as a tool to implement 'values-based- These outcomes support for the conclusion management' to take advantage of the that size moderated the effects of transforma- positive points. tional leadership to organizational culture. The study suggests the new sight for Discussion and Theoretical Implications both managers and employees through the perspective of Value Based Management in The finding in the present study indi- small and medium family firm. These insight cated that size moderates the influence of give them more angle of views to concentrate transformational leadership on organiza- on critical things, creates structures of tional culture. The outcomes suggest that corporate culture and governance, and share

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value in place of work. Exploring small and medium family firm, within the growing The study provides empirical evi- number of employees, offers solid principles dence that the proposed model of leadership and a logic for building an ongoing style and created organizational culture may ownership culture under the perspective of be a useful tool for the owners of Viet- Value Based Man-agement. It helps to create namese family SEMs to help them achieve an environment respects the dignity of all higher levels of performance in their forms of pro-ductive work, such as creating firms.Contributes to the scientific debate in structures of corporate governance and the effect of firm size to the relationship be- management based on share value. tween organizational culture and transformational leadership in family SMEs in an The tested model of organizational oriental culture. culture in family firms, with the moderating of firm size, allows us to affirm that In the future, research will need to transformational leadership has positively investigate the possible existence of inter- and significantly influences the degree of mediate variables in the relationship be- organizational commitment, organizational tween commitment and survival, com- harmony in both kinds of firms (except mitment and cohesion, harmony and Hypothesis 1 in medium firm). The degree of profitability in order to reveal the factors organizational commitment significantly between them, and include in improved positive influence on the level of survival, model. profitability and cohesion among organizational members (except Hypothesis 5 in Limitation small firm). Otherwise, the degree of harmony significant positive influence on the Only adopted transformational lead- level of survival, profitability, and cohesion. ership perspectives, not in other kind of lead- Therefore, the organizational cul-ture of ership perspective. The results may not be family firms may be seen as a key factor of generalizable beyond other Asian (e.g., Ja- competitiveness. pan) or Western countries (e.g., U.S., Ger- many) owing different national culture. Contribution and Future Research

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IMPACT OF LEISURE FARM RESOURCE BASE ON ORGANIZATIONAL COMMITMENT AND PERFORMANCE

Ye-Chuen Li Assistant Professor, Department of Leisure and Tourism Management, Shu-Te University [email protected]

Abstract

A leisure farm must use its natural resources efficiently to ensure good customer leisure experiences and good employee performance. This study discusses how resource-based (RB) leisure farms mold employee organizational commitment (OC) and organization performance (OP). This study collects 350 valid samples. Following regression, this study found: (1) RB positively and significantly influences OC and OP (2) OC positively and significantly influences] on OP (3) OC only partially mediates RB and OP. Thus, employees of a resource- based leisure farm have higher organizational commitment and better organization performance. Leisure farms should plan effectively and use their visible and invisible resources to enhance organizational commitment and organization performance. Additionally, leisure farms should cultivate employee commitment to promote organizational performance.

Key words: Leisure farm, resource-based view, organizational commitment, organization performance

Acknowledgments: The authors would like to thank the National Science Council of the Re- public of China, Taiwan for financially supporting this research. Ted Knoy is appreciated for his editorial assistance.

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Introduction identify with organizational objectives and values, their performance will improve] Leisure farms have developed over (Steers, 1977；Wu, Lin & Fu, 2006 ). In the past two decades and enjoy numerous] conclusion, through RBV, a business helps advantages in the macro environment of employees understand and identify with its Taiwan (Chen, 2004). Since Taiwan joined mission to enhance their centripetal force. the World Trade Organization (WTO) in This is the third motivation of this study. 2002, its local industries have faced huge challenges (Duan, 2007). Traditional farms Regarding the above motivations, try transferred their focus from production given a rapidly changing environment, the volume to service quality (Chang, 2005) to main purpose of this study is to fully un- market themselves to best advantage. derstand how to pursue sustainable devel- Meanwhile, leisure farms combine re- opment for farmers and Taiwanese agricul- sources from different fields, including] ture. This study thus took Taiwanese lei- visible, invisible, personal or organiza- sure farms and their employees to discuss tional resources, to satisfy different cus- how multi resources influence organiza- tomer needs (Wu, 1996). Leisure farm re- tional commitment and organizational per- sources can not only satisfy the desired formance of farm employees. countryside life of consumers, but in the process can simultaneously benefit provid- Literature Review ers. Consequently this study discusses how leisure farms apply resources to increase Resource-Based View (RBV) management efficiency via the Resource- Based View (RBV) (Wernerfelt ，1984). The core concept of Resource-Based Theory is long established. The concept of Employees are the most important RBV follows the thought of strategic man- component of a business and are very im- agement which can be traced back to the portant role to maintain the service quality concept of “special ability” developed by of a leisure farm. Additionally, because Selznick （1957 ）, Chandler （1962 ）, leisure farms advocate the concept of “ex- Ansoff （1965 ）, Andrews （1971 ）, Ru- periencing”, they should provide employ- melt (1974), etc. Penrose （1959 ）pro- ees with faultless experience management posed a integrated concept whereby a cor- to teach them to implement experience ser- porate with superior resources and can vice. Organizational commitment is an in- earn revenue through its superior resources ternal norm that encourages organizational and efficient use of its special abilities. members to promote organizational objectives and benefits. Moreover, if organiza- Wernerfelt (1984) adopted the theory tional members believe in and personally of Penrose （1959 ）and proposed that a

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corporate can store and accumulate its per- Porter, Crampon & Smith (1976) con- manent and sustainable competitive ad- sidered OC a symbol of an employee rec- vantages through proper resource use and ognizing and joining an organization. Blau efficient improvement of management. & Boal (1987) also took OC to mean em- Barney (1986) thought the economic per- ployee recognition of his organization and formance of a corporate not only results its objectives, and the strength of em- from market competition but also from its ployee desire to belong to their organiza- internal and external resources. In 1991, tion. Restated, OC is the degree to which Grant integrated various aspects of the lit- an individual recognizes the organization erature to develop Resource-Based theory for which they work. Robbins (1991) pro- and then established the status of this the- posed that OC is the strength of the loy- ory. alty, recognition and participation of an employee in an organization. Stephen The resources that leisure farms (1992) thought OC reflects the perspective use generally include natural and man- of a person toward their organization and made resources (Cheng & Chen, 1996). its objectives in terms of loyalty, recogni- This study thus adopts the theory of Wu tion and involvement. Wu, Lin & Fu (1996) to discuss how leisure farm re- (2006) defined OC as an attitude that helps sources and abilities impact organizational a member believe and recognize the objec- members. That is, this investigation ap- tives and values of their organization, such plies the concept of RBV to analyze how a as expending additional effort to achieve leisure farm could efficiently use its re- benefits for their organization, and enthu- sources and enhance its management to siastically wishing to belong to the organi- achieve its unique competitive advantages. zation and help it achieve its goals.

Organizational Commitment (OC) Numerous thoughts and theories exist with regard to the definition of OC. Most Organizational commitment has been scholars use a single aspect to define OC. enthusiastically discussed by scholars in- A general thought that defines OC is the volved in organizational theory. The rea- aspect of the attitude (Spector, 2002; Jara- sons for emphasizing OC include: (1) OC millo et al., 2005; Schwepker, 2001). can predict employee turnover rate; (2) Meanwhile, Meyer & Allen (1991) be- Employees with higher OC have better lieved multiple aspects of OC should exist. performance; (3) OC can indicate organi- Theories following M & A define OC us- zational performance (Mo, 2002). Chen ing three aspects: attachment of affections, (2002) also said that OC is superior to em- recognized cost of leaving the organiza- ployee work satisfaction for predicting tion, and obligation to continue to work for likelihood of an employee leaving. the organization (Tsai, 2000). That is, the

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three aspects are: affection commitment, adapt, survive and grow. Chiu (1998) con- sustainable commitment and canonical sidered OP to be the ability of an organiza- commitment. tion to achieve its goals and adapt to the environment. OP encourages all members This study uses the theory of Wu, Lin to cooperate together to achieve organiza- & Fu (2006) to define OC and uses the tional objectives. three aspects proposed by Meyer & Allen (1991) – affection commitment means an Regarding the theoretical model of employee has affection attachment to- OP, Cameron (1984) developed four mod- wards his organization, recognizes organi- els, namely the goal, system resource, in- zational objectives and transforms those ternal process, and participant satisfaction objectives into internal values; sustainable models. To integrate different theories, in commitment means the employment rela- 1983, Quinn & Rohrbaugh devised the tionship is based on material benefits ra- competitive value structure of OP to cate- ther than affections; canonical commit- gorize different indicators into the four as- ment means an employee wishes to stay pects of interpersonal relationship, open with the organization and contributes to system, rational goal and internal process. the organization based on obligation but not personal benefits. Hypothesis Proposition

Organization Performance (OP) Wu, Lin & Fu (2006) defined OC as an attitude that helps a member believe To survive, an organization must con- and recognize organizational objectives sider both performance and efficiency. and values, pay extra effort to achieve or- “Performance” means the achievement of ganization benefits, and enthusiastically the goal. Hoy & Miskel (1987) considered desire to be a part of their organization and OP to be the degree to which an organiza- assist it to achieve its goals. Thus, when an tion achieves its goal, which is expected organization owns good resources and sup- by an organization. An efficient organiza- ports its employees to achieve goals using tion must cater to the needs of its mem- organizational resources, employees like to bers, and from this perspective OP should contribute to that organization. This study emphasize “humanity” ((Zammuto, 1982). thus proposes hypothesis 1. OP thus describes the degree to which an organization aims to benefit participants or H1: Resource base is positively related individual members (Keely, 1984). Schein with OC. (1985) argued that OP should be assessed based on the ability of the organization to Resources influence organizational competitive advantage. Both visible and

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invisible properties are the most important zational performance (Steers, 1977). Addi- organizational resources. Hofer & Schende tionally, Mowday, Porter & Steers (1982) (1978) claimed that if resources are con- proposed if an employee invests in an or- sidered the basis of competitive advantage, ganization they will contribute to organiza- organizational resources can be a good fit, tional productivity. Organizational com- and a business can differentiate itself from mitment can predict employee perfor- competitors. Barney (1986) also proposed mance, absences, turnover, and can indi- that a business in a imperfectly competi- cate organizational performance (Meyer, tive market can build long-term and sus- Allen & Smith, 1993). Therefore, this tainable competitive advantage through ac- study proposes hypothesis 3. cumulating resources and abilities. Thus organizational performance is improved H3: Organizational commitment is posi- when an organization can enhance its re- tively related with organization per- source base. This study thus proposes hy- formance. pothesis 2. Regarding what was discussed in H2: Resource base is positively related above, this study establishes OC as an in- with OP. termediary variable to examine the relationship between resource base and OP. If Some investigations have confirmed OC exerts an intermediary effect, OC in- that organizational commitment influences fluences OP, and the influence of re- organization performance. For example, sources on OP decreases. This study thus Sheldon (1971) proposed that the commit- proposes hypothesis 4. ment of organization members can not only indicate organizational performance Hypothesis 4: Resource base influences but can also predict employee work perfor- OP through OC. mance. Only when organizational members recognize the organization and make Research Design an effort on its behalf can the organization perform well. The strength of member Conceptual model commitment influences member willingness to achieve organizational goals, as Figure 1. shows the conceptual model well as their work satisfaction and organi- used in this investigation.

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OP Rational target OC model RBV Emotional Open[ed Visible property H1 commitment H3 OMIT?] system Invisible resources Sustainable model Personal ability commitment Interpersonal Organizational abil- Regulative relationship ity commitment model Internal process H4

Figure 1. Conceptual Model

Definition of variables This study analyzed the correlations between variables using Pearson correla- Table 1. lists the definitions of all the tion analysis. The coefficients in Table 2 variables. show that correlations between variables are significant. Results Hypothesis validation This study sampled employees of 21 leisure farms legally operating in Taiwan, This study applied hierarchical re- and collected 350 valid questionnaires. gression analysis to validate Hypotheses 1 to 4. This study then followed the four steps Reliability of hierarchical regression analysis to to validate mediating effect (Frazier, Tix & Bar- Cronbach’s α of each dimension ron, 2004). Hierarchical regression analysis ranges from 0.7 to 0.98. includes three models. First, the independent variables must influence the intervening Correlation variables. As shown in Table 2, Model M1 simulates the results of the OC regression

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Table 1. Variable definition

Variable Factor Definition Reference: RBV Visible properties This property can Wu (1996), Chen be found on finan- (2006) cial reports, and includes concrete and financial properties. Invisible resources This factor is not shown in financial reports, and includes intelligent property, brand/reputation, license, contract or database. Personal ability Key personnel with innovation, professional, managerial or organizational abilities that provide tem with a competitive advantage. Organizational ability Management abilities: operational skills , innovation, organizational culture and organizational learning OC Emotional commitment Employee affec- Meyer & Allen tion and attach- (1991), Tsai ment to the organi- (1991) zation Sustainable commitment Remain with the organization because of material benefits Regulative commitment Viewing loyalty as an obligation OP Rational target model Setting goals, work performance

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Opened system model Innovation and ad- Quinn & aptation, Support, Rohrbaugh (1983), and growth Jiang(1993) People relationship Condensing mo- model rale, participation and opening up Internal process model Information management, stable control

Table 2. Correlation Results

RBV OC OP Average SD RBV 1 3.8023 .47329 OC .639 *** 1 3.5837 .61653 .000 OP .575 *** .587 *** 1 3.6137 .57546 .000 .000 * p＜0.05, ** p＜0.01, *** p＜0.001 analysis. The results of adding the inde- M3, where the intervening variable must pendent variable of resource base into influence the dependent variable, and the Model M1 demonstrate that the independ- independent variable exerts a smaller ef- ent variable significantly and positively affect on the dependent variable. As Model fected the intervening variable of OC M3 shows, the intervening variable of job (β=0.639, p<0.001), fulfilling the first con- satisfaction significantly and positively dition of the mediating effect analysis step (β=0.654, p<0.001) affected the dependent and supporting Hypothesis 1. Second, the variable of OP, thus supporting Hypothesis independent variables must influence the 3. When validating the mediating effects, dependent variables. Model M2 shows the Table 3. Hierarchical Regression Results OP regression analysis results. The results emotional labor significantly and posi- of adding the resource base independent tively affected OP, but decreased the effect variable into M2 demonstrate that resource of the independent variable of resource base positively (β=0.575 p<0.001) influ- base (β=0.157, p<0.001) once OC was ences the dependent variable of OP, sup- added as an intervening variable. Conse- porting Hypothesis 2. Finally, this study quently, the condition of Step 3 was ob- added the intervening variable of OC into tained, partially supporting Hypothesis 4.

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M1: dependent variable M2: dependent variable M3: dependent variable

=OC =OP =OP

Standardized Standardized β β t β β t β

constant .420 .954 .697

.8 RB 15.488** .639 .700 .575 13.122*** .191 .157 3.498*** *

OC .611 .654 14.548*** RB-Resource Base OC-Organizational Commitment OP-organizational Performance

M1:justified R 2=0.406 (F=239.893, p<0.001) M2: justified R 2=0.329 (F=172.195, p<0.001) M3: justified R 2=0.582 (F=244.043, p<0.001)

***Significant at p<0.001

Table 3. Hierarchical Regression Results

Conclusions and Contributions Therefore, employee organizational commitment and performance increase with Leisure farms can not only satisfy the the resources of a leisure farm. Second, the need of customers yearning for a rural life- organizational performance of employees style, but can also let farm operators profit increases with organizational commitment. by offering products and services. This Regarding mediating effects, this study study aims to clarify the influence of re- found organizational commitment to only source base on organizational commitment partially mediate resource base and organi- and performance. The analytical results zation performance, and thus Hypothesis 4 suggest that the individual factors of vari- was partially supported. ous respondents differ for resource base and organization performance. Simultane- Theoretical contributions ously, significant correlations and effects existed among the three variables, and Hy- Although numerous studies have ex- potheses 1-3 were strongly supported. amined leisure farms, most focused on

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consumers rather than employees. Addi- enhance organizational commitment and tionally, most previous studies on manage- performance. Second, leisure farms should ment strategies stressed the importance of nurture employee commitment to promote cooperating resources to organizational organizational performance. performance, while this investigation found organizational commitment to also Limitations and suggestions be a key influence on organizational performance. Moreover, this investigation Most of the study sample came from validates the influence of resource base on southern Taiwan and thus future studies organizational performance through organ- should extend the sample range to north- izational commitment ern, central and eastern Taiwan. Because some of the questionnaires were distrib- Practical contributions uted by mail this study suffered from a lack of face-to-face explanation by re- This study makes the following prac- searchers to respondents, and in future tical suggestions based on its findings. studies questionnaires should be distrib- First, leisure farms should plan well and uted by hand to avoid research bias. use their visible and invisible resources to

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INTEGRATING THE CONCEPT OF CUSTOMER VALUE INTO ISD PROJECTS: AN ACTION RESEARCH ON ISD PROJECTS FOR FUSION CUISINE RESTAURANTS

Ying-Kuang Lu Department of Information Management TransWorld University, Taiwan R.O.C. [email protected]

Bao-Chang Ju* Department of Information Management TransWorld University, Taiwan R.O.C. *Corresponding Author: [email protected]

Abstract

The applications of information systems (IS) within organizational operations are at least five decades. However, the mismatch between business-related and IS-related requirements, i.e. “the requirement gap”, continues to prevail within contemporary IS development (ISD) projects. Also, the lack of an agreement upon the IS role for organizational operations is one of the major obstacles trouble IS practitioners. Therefore, a business needs to adopt a suitable ISD approach to bridge “the requirement gap” and to define a unified role for IS while implementing IS in its operational operations. In the context of catering and hospitality industries, the premium goal of IS applications for companies is to integrate business processes and to provide valuable information to customers, thus delivering better customer value. That is, a service-oriented business (e.g. fusion cuisine restaurants) are required to combine the concept of customer value with IS methodologies to develop a customer-centric IS, thus configuring all requirements and IS components to produce customer value. This study adopts the action research method, which is done in cooperation between the researcher and the IS practitioners, to develop a suitable model of ISD in fusion cuisine restaurants (FCR). The researcher and IS practitioners are collaborated to organize a development team, which comprises FCR’ key members, researchers, MIS program undergraduate students, and IS practitioners from IS vendors. With the assistance of such a team, a “work system” methodology, a customer-centric ISD suggested by (Alter, 2008), was adopted. During the ISD process, the development team utilized such an approach to conduct business requirement analysis, interconnect requirement components and systems architecture, design data flow and functionality, and formulate an integrated relational database.

Keywords: Information systems development; customer value; action research; customer- centric ISD.

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Introduction 2008; Lyytinen & Newman, 2008). Lack- ing a unified role for IS has caused a long The application of information sys- standing debate between both business and tem within organizational operations has IS fields. Hence, organizations face a chal- been more than 50 years. However, mis- lenge that defines a unified role for IS, and match between the business requirements to bridge ‘the requirement gap’ while de- and the IS requirements within ISD pro- veloping their IS projects. jects is still unresolved. Generally speaking, ISD roughly contains two aspects, i.e. Within the context of service-oriented requirements analysis and IS construction. industries, a company should concentrate The first aspect is related to retrieve re- on developing IS-related applications that quirements of users from different func- deliver valuable information to its custom- tions, and to then adopt ‘business process ers (Carvalho, 2000). To sustain its com- modeling’ approaches to depict and competitiveness in this demanding era, it also bine all these requirements. As for the sec- acknowledges that it needs to make its IS ond aspect, it requires IS practitioners uti- and operations more customer-centric to lizing the ‘system analysis and design’ accommodate changing customers’ expec- (SA/SD) methodologies to transform all tations (Liang & Tanniru, 2007). That is, it retrieved requirements into IS-related re- should develop a customer-centric IS to in- quirements and architectures. Such a trans- tegrate all organizational processes and ac- formation helps IS practitioners develop tivities that could deliver and enhance cus- functional components, construct data tomer value (Fragidis & Tarabanis, 2011; model and design user interfaces (Hum- Minghetti, 2003). phrey, 1995; Kruchten, 2003). However, information technology (IT) practitioners Therefore, there is a need for a ser- are not always knowledgeable about busi- vice-oriented company to adopt a suitable ness contexts while soliciting various re- ISD approach that possibly combines the quirements from different organizational concept of “customer value” with it. In levels and functions. Therefore, business addition, an organization also needs to executives often complain that IT practi- make sustained efforts to promote user in- tioners lack business knowledge that they volvement, thus enhancing mutual com- grandly claim to have. On the other hand, munication between critical users and IT IT practitioners utilize a number of model- practitioners. However, most service-ori- ing terminologies about SA/SD to depict ented companies are small- and-medium and integrate all retrieved requirements. enterprises (SMEs), which generally fall short of relevant staffs, expertise or re- Such modeling terminologies usually sources that commit to sustained efforts to trouble organizational members from dif- improve user involvement. Therefore, a ferent business functions and fields. Thus, service-oriented SME needs to identify a business executives have difficulties in suitable ISD approach to formulate a steer- adopting ISD terminologies to help IT ing team, which is helpful to development practitioners model and transform require- of an adequate customer- centric IS. ments in use (Jackson & Twaddle, 1997; Jacobson, Ericsson, & Jacobson, 1994). For the purpose described above, Consequently, they are often unsatisfied this study undertakes the ‘action research’ with the applications of system architec- method, which is done in cooperation be- tures within business processes. Moreover, tween the researcher and the IS practition- IS academics have defined the role of IS ers, to identify a suitable ISD approach for very broadly (Huber, Piercy, & McKeown, service-oriented companies like FCR. The The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 136

action research method has currently be- For ensuing IS applications that come an important qualitative research ap- meet business demands, organizaions need proach in the field of IS research (D. E. to identify and suitable ISD methods to Avison, Lau, Myers, & Nielsen, 1999; implement their IS projects, such as Struc- Lau, 1997). It introduces an alternative re- tural Analysis (Yourdon, 1989) and Ra- search method which combines outsider tional Unified Process (Kruchten, 2003). (theoretical) with insider (practical) per- Most of these methodologies include two spectives to study an organizational phe- main steps, including requirement elic- nomenon. Therefore, researchers are re- itation and system modeling. The former quired to directly intervening in an organi- formalizes the requirements solic- itation zational development process to create or- process to minimize errors and misunder- ganizational change, and simultaneously standing of requirements, while the latter observe the impact of the change, thereby adopts best practice techniques to the broadening knowledge or expertise in or- analysis and design process (Nabende, ganizational management. Therefore, this Ahimbisibwe, & Lubega, 2009). Require- study decided to select an IS vendor, ment eliciation first retrieves demands which specializes in implementing IS pro- from various organizational levels and jects for FCR, to conduct IS action re- functions, next undertakes business search projects. process modeling or redesign, and finally sustantiates requirement specifications. Researchers in this study directly System construction first systematically intervened in three IS projects for FCRs to transforms and refines the specification, get involved in the practical ISD pro- then analyzes data flow and functional cesses, thereby attempting to collaborate components, and finally design system with practitioners to identify an adequate architecture and database. development team for typical service-oriented SMEs. Such a team utilized the However, in the ISD process, the “work system” approach, a customer- cen- business requirements are generally not tric ISD approach suggested by Alter aligned with the IS system requirements. (2008), to analyze business requirements, On one hand, IS professionals are not construct system architecture and compo- familier with specific organiztional envir- nents, design data flow, and formulate an onment and the lack of business oper- integrated relational database for non- ational knowledge. On the other hand, franchise FCRs. With the assistance of business executives are usually without such a team, a service-oriented company information systems literacy, which refers like FCRs is capable to tackle troublesome to the understanding understand the or difficulties topics within ISD, especially broader organization, management, and those related to “the requirements gap”. Fi- information technology dimensions of nally, we take down practical processes systems and their power to provide solu- and experiences in different development tions. They cannot use IS terminology and aspects of ISD, and further describe les- modeling tools to specify and depict their sons learned. requirements. Within the practical IS development, organization personnels Conceptual Background and can’t use the current system and analysis Literature Review method to analyze organizational requirements without the help of information The requirement gap within ISD technology practitioners (Erickson & Siau, 2007). Therefore, mismath between bus-

iness requirement and IS requirements The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 137

prevail. That is, the requirement gaps are Modified methodolgoies of ISD: The builded up (Ågerfalk, Goldkuhl, & Cron- “work system” holm, 1999). Therefore, it’s essential for the organization to revise the IS develop- In order to integrate customer value ment methodologies to reduce the gap of into the IS development process, the the requirements of organization and IS research use the framework of work sys- during the construction of IS. tem suggested by . The structure of the work system treats the IS of the organ- Customer value of information system ization as a work system which can development manuplicate information by provided products or services to internal or external The purpose of the IS development customers and keep close to the customers’ generally integrates the links related to needs. The major components of the work organizational operation processes be- system as follow: tween all departments to meet the needs of internal operations and emphasizes the • Customer: Customers include the value of customers by improving the qual- internal and external customers, i.e. ity of products and services. However, in direct users and indirect users affected the traditional IS development, method- by IS applications. Hence, ISD in the ologies only consider the improvement of customer field should focus on not IS quality but not the value of customers. only direct but also indirect effects of Hence, the customer value becomes a IS applications. popular research topic (Alter, 2008; Brocke, Uebernickel, & Brenner, 2009; • Products and services: work system Tuunanen, Myers, & Cassab, 2010). provides variety products and services to customers. These products include The customer value comes from physical products, information prod- the theory of the marketing research. It is ucts, services, non-physical products originally defined as the business values of (for example: fun, peace and calm), customers’ expetection from products or and socialize products (for example: services provided by companies (Kotler, arrangement, agreement, and 2000). The most cited concept is the per- organization). ceived value that customer perceives or experiences after they have used products • Process and activity: The process and or services focal companies offers (Bett- activity of work system not only in- man, Luce, & Payne, 1998) of the most cludes all well structured job processes concept has been used. Customers usually of organizational circumstances but perceive or experience different values also includes relying on artful pro- because of their respective personalities, cesses which are operated by exper- requirements, preferences or budgets ienced organizational personnel’s (Ravald & Grönroos, 1996). Integrating skills, experiences, and judgements of customer value into IS development can be order and contents. seen that organizations provide and develop IS products or services with • Participator: Participators are those accessibility, attractability and accept- who do not work on automatic jobs in abilities to IS custeomers (inner and outer the work system. Therefore, partici- users), thereby enhancing customer value pators are not users of the information (Kujala & Väänänen Vainio - Mattila, system. In the practical processes of 2009). the IS development, participators are The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 138

the key members who mainly affect intervention aspect of action research the IS processes are sussessful or not. means that it is an especially interesting Hence, the participators are more and relevant method for the area of infor- important than users in the work mation systems development . The action system. research method is in the envri- ronments that currently need to solve problems and • Information: Participators collect data it also under the reasonable research to work on the work system. These framework which is acceptable by the include codified and uncodified researcher and actual users . Both re- information. searchers and practitioners cooperate to get change and feedback and also combine the • Technology: Technologies in the work theory and practice together and use mul- system include information tiple perspectives to undertake the re- technology, generalized technology, search . Owing to the researcher directly and customized technology and tools steps in to the research the action research because information technology are not method is the proper and remarkable the only technology in the work system research tools in the ISD (D. Avison, affects the IS development. Baskerville, & Myers, 2007).

• Basic facilities: Basic facilities are Origin of Reasearch resources used in the structure of work system. These kind of resources may In the beginning of year 2013, a extend out of control of the organ- technical company initiated a industry- ization or be shared by other work academic cooperation project to assist systems. catering restaurants to implement IS. It seeks to partner with an academic insti- • Environment: The environment tution to collectivelly perform this project includes the organization, cultures, within the central area of Taiwan. The competitions, technologies and laws. particular industry-academic cooperation project emphasizes to implement the • Strategy: The strategy includes the customer-centric IS into the catering res- operation strategy in the work system taurants. The researchers of this study and pass the value on to customers. decide to collocate their distinguished education project with the monographic Research Design and Method study to work with the company. One of two main goals of the collocation is to let Research Method students have valuable experiences on the implementation of ISD, such as require-

ments analysis, organizational processes The methodology used in this study analysis, data modeling, and the practical was action research, which emphasises the processes of user-interface modeling. The collaboration of researchers and prac- other goal is to integrate the customer titioners involved. Unlike the case study, value into the ISD project by the which attemps to study organizational cooperation of the educational institution phenomena without researchers’ interv- and the technical company. ention, the action research requires the investigators directly getting involved in a planned organizational change, and simultaneously studying the impact of this change (Babüroglu & Ravn, 1992). The The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 139

In general, the technical company In other word, the organizational needs to analyze organizational require- employees think the IT practitioners lack ments from all participators at the time to organizational knowledge. On the other implement the ISD. Then, according to hand, the IT practitioners consider that the integrated organizatonal requirements, users have no IS operating and data flow the company starts to design the IS func- senses and it’s hard to communicate with tions. The practitioners of the company users. The IT practitioners think users lack define all requirements from participators IT knowledge. The knowledge gap be- and by using requirements analysis method tween the IT practitioners and the res- of system analysis to integrate related taurant employees causes the inconsistence flowchart and to describe related require- between organizational proess requirements. Following the defined requirements and IS requirements (Ågerfalk et al., ments, the practitioners build data models, 1999). Therefore, the organization needs to system functions, the users’ interface efficiently transfer the IT and the organ- designs, and modeling. However, in the ization operational knowledge is essential stage of requirements analysis, the while the IS implementation takes in place employees of the restaurant usually to avoid the inconsistence. See Figure 1. complaint about the IT practitioners do not clearly know the organizational environments and the oprational processes.

Business expertise Business process IS requirements requirements IS expertise

Figure 2. Knowledge Transfer within IS projects

For the organization operational catering restaurants have flexible and knowledge transfering purpose, IT nonstandard operations, therefore, practitioners require the key members’s information practitioners requrie more assisstance to realize the organization time to communicate with users and to operational knowledge, such as original define the organizational requirements. function activities and catering porcesses Also, the catering restaurants have no IT of the catering restaurant in the system personnel, they not only need the assis- requirements analyzing stage. In the IT tance from technical company during the knowledge transfering, the technical ISD process, but also the follow up on- company provides series training lessons hand training and after implementation to key members of the restaurant to operations. These are the tough problems improve their IS knowledge and skills. that the technical company have to solved.

Nevertheless, the catering restaurants The researchers and the IS vendor are small businesses which have more collaborate to costruct a suitable IS oper- limitations, their financial and human ating model for the catering restaurants to resources can’t compete with larger busi- tackle problems and difficulties described nesses or franchised restaurants. And the above. With the assitance of academic The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 140

institutions, the small catering restaurants This study adopted the suggestion of and the IS implementing compancy tried Alter (2008) to integrate an customer value to formulate an IS development team. work system pattern. First of all, the study Such a team comprise the researchers of found all the participators of the catering this study, key members of FCRs, MIS restaurants and then set customer value as undergraduate students, and IT prac- the center to analyze every components of titioners from the IS vendors. See Figure 2. work system (Table 1).

Business process IS requirements requirements

IS development Team

FCRs’ MIS Researchers Professionals key staffs Undergrad. from students IS vendors

Business expertise IS expertise

Figure 3. The IS development team for FCRs and its role in ISD Illustrations and main results

Following the method, the study In the initiate stage of the ISD, key chose three catering restaurants (fusion members of the restaurants must recognize cuisine restaurants FCR) as the practical the customer-centric ISD and develop the businesses. All these three restaurants are customers’ requirements satisfied products originality restaurants. As the work system and services to establish customer center- described above, the catering restaurant lized processes and activities and to team were organized by key members of integrate organizations requirements. the restaurants, the researchers, MIS students, and the IS practitioners from IS Thus, organization through vendors. The Illustrative operation and differentiated participators provided main results consisted of organizational superior products and services views of the requirements analysis, system architecture, organizational requirements (Table 2). ISD and data flow analysis and database team suggested to integrate and to digitize system. all restaurants operations and activities in order to let customers efficiently and Organization requirements accurately enjoy meals, such as using tablets or iPads to reserve seats, to search

menus and related information, to preorder

dishes and to pay the bills. This

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Table 1. Customer-centric work system dimension (adapted from Alter (2008))

Components Dimension of work system Customer recognize and completely reply customers’/diners’ needs; provide customers with satisfied dining experence Products and Produce customized products and services services Process and Personalized or customized processes and services; apply customers data activity to maximize customers’ benefits Participator IS practitioners recognize and emphasize customers’ needs and preferences Information Integrate customer-related information to maximize customers’ benefits Technology Any technologies applied must completely fulfill customers’ needs, standard, terms, convenience, and taste Basic Basic facilities can’t be incompatible with customers’ requirements in any facilities aspect Environment Operational environments must consist with custom-centric system Strategy Products and services must conform to the organizational stragegy

Table 2. IS requirements analysis of participators

Paticipators Requirements Customers/diners • Using tablets/iPads reserve seats, preorder dishes, search menu and related inforation • Efficiently and accurately pay bills Manager • Maintain employees’ and customers’ information • Maintain menu information • Provide sales status and reports • Provide materials inventory status and reports Storage Keeper • Record stocktaking • Provide stock information to suppliers • Maintain suppliers’ information Chef • Provide order conditions • Update delivery of orders Crew • Process order information • Simplify pay bills processes Cashier • Efficiently complete the processes of payments

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arrangement not only benefited the update the order by checking the screens, customers but also benefited the back- customers could reserve, order and search ground operations of the restaurants. The infomaiton by tablets, the manager and manager could handle the information of cashier, and stockmen could search and customers, menu and employees and update information through internet. further more manager can generate consuming habit, food stocking infor-mation Analysis of data flow and relational and reports. The stockmen could con- database currently record stocktaking, provide the information to suppliers, and update After finishing system architecture, suppliers’ information. The chefs clearly the study moved further to analyze oper- knew the situations of orders. Waiters/ ating process and data flow of each com- waitresses updated order, gave customers’ ponents and to scheme out the integrated feedback to chefs and reduced the time database system. Analyzing and designing comsuming of payments at any time. Data flowchar needed time consuming and Cahiers could efficiently complete the they were disordered and confused, there- porcess of payments. In conclusion, fore the job acquired key users and system restaurants could effectively and effic- vendors to progress more cooperation and iently handle routine operations and communication. Through researchers led provide dishes to favor customers in the MIS students to observe the processes, to future. analyze porcesses and to perform compact communication and revision, They finally System architecture utilized the system architecture, dataflow chart and functionality architecture. The Some of the scholars suggest that entire reservation and order process orangizations need to build up the IS sys- included reservation process, order pro- tem architecture right after the integration cess, delivery process, and payment of IS requirements. The IS system process. See Figure 4. architecture provides the complete road- map of the system constructions later on. In order to link all dataflow chart, the The organizaiton creates the main com- database of the catering restaurants must ponents of IS, defines the functions of be rearrange to integrate all data, billing each components and the interation and statements, display of screens, and reports. link between components (Nunamaker, The ISD team selected the Micro- soft Minder, & Purdin, 1990). Thus, in the SQL Server to create the database system stage of this study, ISD team needed to of the catering restaurants. For planning integrate all paritcipators requirements and the catering database, the team used the to generate the catering restaurants system Entity-Relationship Diagram as a tool to architecture. See Figure 3. manage data. The steps of the database scheme were follow: first, collected all In the system architecture, one server forms and data (include orders, table data, set to generate whole database and website reservation data, dishes data, food stock applications, to link all participators sys- data, etc. ), then found the entities from the tem applications, and to connet all appli- forms, got the relational- matrix between cational components with local, wireless, entities, drew out the entity-relationship internet network. In the user interfaces, diagram,and finally transfered to the waiters/waitresses keyed in order data and complete relational data model of the print out the bill, chefs followed up and catering restaurants. See Figure 5.

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Dish information display

Manager Administration

Chef Database

Web/APP Server Update dish information Cashier Payment Processing

Wireless Network Crew Order Processing

Billing Receipt Printer Internet Reservation Customer

Storage Keeper Inventory Control

Figure 4. System architecture for a FCRs’ IS

D1 Reservation

D2 Table 1.1 Customer Reservation D3 processing Order

1.2 D4 Dish Staff Order processing D5 Portion

1.3 D6 Crew Chef Meal service processing D7 Customer 1.4 D8 Casher Payment Employee processing D9 Payment

D10 OrderHistory

Figure 5. A Key data flow diagram of FCRs’ IS

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Figure 6. Relational database and tables for FCRs’ IS

Conclusion and Lessons learned processes, the practitioners of the IS vendor guided the researchers and the MIS This study chose the action research students practically realize the daily method with the cooperation of the cat- operations of the catering restaurants. ering restaurants, IS vendor and educa- During the processes, the manager, tional institution to integrate customer stockmen, waiters/waitresses, cashier, and value work system model into ISD model. customers who would be the educational During the research, th researchers led the professionals to show their actual works MIS porgram students to participate the and requirements and to progress the ISD project of the action research. After professional knowledge transfer. In this the researchers actually involved and stage, the researchers found out that there surveyed the catering restaurants, the was a knowledge gap between the IS experiences and lessons on different stages practitioners and the key members of the of theis study were shown on the catering restaurants. The researchers Table 3. explained that the customer-centric design was the essence of the “work system” Organizational requirements analysis model to the MIS students. By the bridge of the MIS students, the knowledge gap

was decreased and the IS practitioners and The main job of the first stage was key members of the catering restaurants organizational requirements analysis. The smoothly interacted, communicates, and key matter was to archive and transfer the defines the detail requirements of the requirements of all IS participators of the organizational processes. catering restaurant. In the opreating

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Table 3. Key matters and results of the major stages of ISD

Stages Stage I Stage II Stage III Main task Business System architecture Data flow design requirements analysis establishment Key aspect Identifing and developing and transforming users’ retrieving of user’ integrating system requirements into IS requirements fuctional components applications and the and system relational database architecture Knowledge Business processes ITknowledge transfer Integrating transfer knowledge transfer organization process and IT knowledge Researchers Consultants Researchers Researchers Key members of Educators/instructors Learners change agents FCRs MIS program Learners/coordinators Learners/coordinators Coordinators/instructors students IT practitioners Learners Educator/instructor Instructors/trainers from the IS vendor

System architecture restaurants. The owners of the catering restaurants by the assistant of the Integration of the system architecture researchers and MIS students found the was the major job of the second stage. The proper IS applications within their key matter of this stage was to integrate financial resource limitations. the components of the organizational process requirements. It was essential that the Data flow analysis and database design key users of the catering restaurants to understand some technical concepts, such The main job of third stage was data as the information technologies and know- flow analysis and database design. The key ledge of different components link, the matters were system components, users applications of relative technologies and interfaces, database design. In this stage, limitations in the operational processes. the organization requirements analysis At this stage, the practitioners of the ven- must connect with the integrated system dor took the place of knowledge transfer. architecture. In the operational processes, They provided available systems and the organizational requirements were technologies according to all requirments, transferred to practical system design. such as database, web pages design, Hence, the communications with actual wireless network and ERP system, etc. users were frequently performed. The key They explained and found the suitable members of the catering restaurants must technologies, IS applications, database understood concepts and terms of organ- management system for the catering izational process, data flow, and database. They also knew the actual design situa- The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 146

tions. By the interpretation of the MIS They learned organizational operation students, the key users realized better knowledge. By accompany with the IS about the IS assistance to transfer organ- practitioners, MIS students went through ization requirements to acturl daily all processes of system development in operations. Also, they reganized how to this porject, they improved the IS analysis, focus organization requirements on design,and implement knowledge and customer value. abilities, therefore, they had exceptional competence in the furture. The MIS students experienced all the ISD processes by the research project.

References

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HOW TO SUCCESSFULLY CONVERT TO ICD-10-CM/PCS? THE EXPERIENCE OF HOSPITALS IN TAIWAN

Chia-Ke Lee

Department of Administration, Cheng Ching General Hospital, Taiwan Feng Chia University Ph.D. Program in Business, Feng Chia University [email protected]

Abstract

This study was a trial project for the introduction of ICD-10-CM/PCS commissioned by governmental medical and healthcare departments. The subjects of the study were employees in hospitals, including doctors, nurses, medical technicians, and administrators. Primarily, this study constructed the procedures and models for converting ICD-9-CM to the ICD-10-CM/ PCS disease classification system. Quality control methods were used to jointly evaluate the problems and obstacles based on the four items of people, objects, facilities, and methodology, in order to find the optimal solution to gradually establish the ICD-10-CM/PCS information system, as well as to propose the resource integration and accommodation measures needed to introduce the system.

Keywords: International classification of disease version 10, International classification of disease version 9, Quality Control Circle, Coding

Introduction structure, making it unable to fully and accurately reflect new diseases, medical technol- The National Health Insurance pro- ogies, or treatments. gram of Taiwan currently uses the 2001 edition of the International Classification of Since the WHO promulgated ICD-10 in Diseases, Ninth Revision, Clinical Modifica- 1994, it has gradually been applied by vari- tion (ICD-9-CM) as the basis for disease en- ous countries (Finn Gjertsen et al., 2013) in coding for insurance reporting. ICD-9-CM areas such as classifications of cause of was developed by the United States in 1979 death or clinical disease diagnostic codes. In based on ICD-9 (WHO, 2013). Even though addition, treatment codes are developed revisions continue to be updated with the based on clinical usage needs in different times, continued advancement in medical countries. Examples include the United technology has been limited by its encoding States’ International Statistical Classification of Disease and Related Health Problems,

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Tenth Revision, Clinical Modification/ Inter- from the selection of the front-end inpatient national Statistical Classification of Disease disease codes and treatment codes, to the and Related Health Problems, Tenth Revi- back-end classification of disease types and sion, Procedure Coding System (ICD- 10- health insurance declaration work. Thus, CM/PCS); Australia’s ICD-10-AM/ACH; whether the conversion and introduction of a and Canada’s ICD-10-CA (Jan DiSantoste- classification system of disease types is suc- fano, 2009; Carolyn De Coster et al., 2006; cessful is based on the executive decisions of Walker et al., 2012). In order to connect with the hospital leadership, as well as the under- international trends in health and medical standing, adherence, and implementation care, and to benefit data comparisons across ability of hospital employees, especially doc- countries, Taiwan began to promote the in- tors. troduction of ICD-10 in 2001. Starting in 2009, the cause of death statistics published Patient safety has always been an issue by the Ministry of Health and Welfare ap- emphasized by hospitals and clinics, and the plied ICD-10. Starting in 2012, the Interna- elevation of healthcare quality also repre- tional Classification of Functioning, Disabil- sents a guarantee for patient care. Quality ity, and Health (ICF) applied ICD-10 for dis- control circle activities are tools most com- ease codes. The National Health Insurance monly used by the medical industry to ele- Administration began a five-year plan for the vate healthcare quality. The healthcare sys- implementation of ICD-10-CM/PCS in 2010, tem applies the quality control circle to ele- announcing that starting in 2015 ICD-10- vate healthcare environment safety and in- CM/PCS would be comprehensively used for crease healthcare quality. A quality control declarations (Ministry of Health and Wel- circle is a work procedure formed by lower fare, 2013). level employees that gives the employees autonomous power. Listening to their views al- When corporations introduce new tech- lows existing conditions to be improved. nology for mandatory use, at the start of the Lower level employees have the most under- introduction employees will be concerned standing of the problems in the procedures, about increasing their workload to some ex- and the assistance of methods and images tent. This is particularly true for users with can be used to discover and resolve prob- less computer literacy, because they often lems, as well as promote bottom-up manage- need to spend time to learn it; thus, they are ment to improve healthcare quality at hospi- also more likely to have work anxiety. If tals. such anxiety cannot be suitably relieved, or if they cannot get help from group members, The main purpose of this study was to they may have poor learning effects that in use the quality control circle method to ex- turn block the functioning of new technology plore hospital employee learning attitudes (Hsu et al., 2006). Conversions from classifi- about the introduction of ICD-10, as well as cation of disease type ICD-9-CM to ICD-10- the influence produced by the introduction of CM/PCS implicate interdepartmental busi- the new information system. ness in hospitals. In terms of personnel, it involves medical clinics, patient history de- Information on the case hospital partments, disease classification departments, insurance declaration departments, The case hospital in this study places and information departments. In terms of great emphasis on total quality management. procedure, support from the information sys- It uses diverse quality management methods, tem is required throughout the medical care including an indicator monitoring system, and administrative management procedures quality control circle activities, a case propo- for smooth data production and management, sition system, and three-level auditing of 150 The International Journal of Organizational Innovation Vol 6 Num 4 April 2014

standard operating procedures. Starting in 2. High degree of accommodation for hos- 1998, it has promoted hospital-wide quality pital policy, and good communication control circle activities. These have now and coordination between departments been in place for 15 years, and in each term there have been at least 19 circles for quality The administrative and medical depart- management. In the period of promoting the ment personnel had a high degree of accom- quality control circle, the case hospital re- modation for hospital policy, the integrated ceived numerous gold, silver, and bronze work was easy to promote, and the existing awards from the Corporate Synergy Devel- hospital commissions conducted horizontal opment Center, the Taiwan Joint Commis- coordination, in which regular meetings for sion on Hospital Accreditation, and the As- promotion and educational training were sociation of Pioneer Quality Control Re- conducted in parallel. search. In addition, the case hospital has been invited to various academic associa- 3. The information system could add and tions to share its quality control experiences. modify program functions based on user The case hospital has closely worked with needs health authorities and has arranged various healthcare plans for government health de- The information office of the case hospi- partments. Examples include the trial project tal is responsible for information issues, es- for salary by person at the National Health pecially in regards to the Hospital Infor- Insurance Bureau, the regional integration mation System (HIS) and the Electronic model, the family doctor integrated care pro- Medical Record System (EMR). The soft- ject, the project for elevating the quality of ware engineers in the relevant systems had cancer treatment at National Health Insur- an average of more than 10 years of experi- ance Bureau hospitals, and the Cultural Af- ence, and their understanding of the practical fairs Council of the Executive Yuan’s project needs and programming in health insurance for community development. These exam- declarations, disease classification, and inpa- ples show that the case hospital has abundant tient order systems were interconnected, fast, experience in promoting and executing pro- and mobile, and they conformed to clinical jects. and management needs.

Strategies for the case hospital in 4. Structural micro-adjustments were made introducing the ICD-10 system on existing operating procedures to reduce the impact on clinical medical ser- 1. Support from senior leadership and top- vices down promotion of policy The clinical medical personnel input dis- Changes in work will affect work content ease codes online for the inpatient medical and change work rules and result in changes order system and followed the hints, alerts, in work techniques and methods, thus mak- or control functions of the information sys- ing it important for employees to adjust their tem, which helped the personnel become fa- accustomed habits in dealing with issues miliar with the encoding concepts, frame- (Robbins, 1993). The case hospital made an- works, and systems. In addition, in each nouncements in hospital-wide meetings, or- quarter the attending physicians, resident dered hospital employees to actively partici- doctors, and nurse practitioners participated pate, and publically announced the promo- in a diagnosis related groups (DRGs) case tion of measures. encoding discussion meeting, which was held by the medical affairs department. The

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participants shared cases to discuss the en- and medical fee collection section to conduct coding concepts, thus giving them an overall a regular weekly education and training understanding for the structure of disease course for two months. Next, ICD-10-CM/ codes and the relationships among patient PCS promotional education and training was history content, disease codes, and health in- implemented for the attending physicians, surance declarations. Therefore, they had an nurses, and nurse practitioners (NP). Further- easier time understanding the conversion of more, for the departments of preliminary in- the encoding system (ICD-9 to ICD-10). Af- troduction, which were obstetrics and gyne- ter the actual implementation, they could cology, orthopedics, neurosurgery, and neu- continue to collect clinical needs, conduct rology, based on their different characteris- administrative work and plan to accommo- tics, ICD-10-CM/PCS patient case history date the information system, in preparation writing education and training courses were for parallel developments in different depart- conducted. Other than education and training ments. in the hospital, disease classification, case history review, and insurance submission Implementation subjects at the case hospital personnel engaged in the ICD-10-CM/ PCS external education and training course for The research subjects in this study one year. The course was held by the Taiwan were employees of the case hospital, includ- Medical and Health Information manage- ing the president, the medical affairs direc- ment Association, the Taiwan Case History tor, case history reviewers, disease classifi- Management Association, and the Central cation personnel, information personnel, at- Taiwan Disease Classification Reading tending physicians, resident doctors, and Group. In addition, the hospital sent disease nurse practitioners. classification, case history review and insurance submission personnel for certification Implementation procedures at the tests. In order to promote the continued fa- case Hospital miliarity of employees with ICD-10- CM/PCS business, the hospital continued its In order to achieve the smooth conver- quarterly DRGs case encoding discussion sion of the classification of disease types meetings and continued arranging for educa- from ICD-9-CM to ICD-10-CM/PCS, this tion and training relating to ICD- 10- study was divided into four parts for training. CM/PCS cases and relevant issues. Changes made to the departments were based on the problems that could be encoun- The disease classification personnel fo- tered in the people, objects, equipment, and cused on the departments of neurology, neu- methods, as well as the planned direction of rosurgery, orthopedics, and obstetrics and implementation. Table 1., at the end of this gynecology, for ICD-10-CM/PCS encoding article, describes the directions for accom- work of discharged cases in two months, and modation by the departments at the case hos- conduct case cross-review. Questions are pital. submitted to the disease classification consensus meeting for discussion. The disease Dimensions affected by reform classification consensus is used as the teaching cases. The hospital’s trained case history 1. Education and training by personnel reviewers participated in case history ICD- 10-CM/PCS encoding to create a trial compi- Educational and training courses were lation of two months of case histories (from given at the hospital, and eligible lecturers in orthopedics, neurology, neurosurgery, and the departments focused on the hospital’s obstetrics and gynecology), which was then disease classification group, insurance group, reviewed by disease classification personnel 152 The International Journal of Organizational Innovation Vol 6 Num 4 April 2014

who gave feedback to the personnel trained (1) List of diseases that have not been clas- by the hospital after the review. sified.

The case hospital established a section (2) Dis the 20th “discharge disease clas- on the hospital website with the completed sification main file maintenance _diag- ICD-10-CM/PCS teaching case materials, nostic code/treatment code column 20”, which was regularly updated to provide a input column: diagnostic code, treatment real-time learning channel for personnel in code, and cause of death codes can only the hospital. In addition, the hospital pur- be saved when there is data, no column chased ICD-10-CM/PCS reference books to shall be left blank. be used by medical personnel at any time. (3) Dis-> the 20th (discharge disease 2. Case history modification and design classification main file maintenance ICD- 10-CM/PCS) case diagnosis and treat- The disease classification personnel fo- ment content downloaded to a Microsoft cused on neurology, neurosurgery, orthope- Excel document, to allow statistical and dics, and obstetrics and gynecology depart- review work by disease classification per- ments to conduct discharge case history sonnel. ICD-10-CM/PCS encoding and find issues that tended to be overlooked when writing (4) Addition of gender and invalid code patient case histories. The group produced hints and controlled information needs, as ICD-10-CM/PCS patient case history writ- well as completion of the addition of ing/encoding issues worthy of note. At the ICD-9-CM and ICD-10-CM/PCS corre- same time, in the hospital information sys- spondence search system for the inpatient tem, the surgical record system added col- doctor order DRG system. umns titled Operative-Approach and Device, in order to provide automatic correlated code 4. Satisfaction measurement search functions. Hospital administrative procedures were used to update surgical rec- Focusing on the four clinical depart- ord formats, and hospital rules were modi- ments of neurology, neurosurgery, orthope- fied to implement personnel work regula- dics, and obstetrics and gynecology, the at- tions. tending physicians received a survey on their satisfaction with the project implementation, 3. Modification and design of the infor- in areas such as the benefit of ICD-10-CM mation system /PCS education and training, the addition of an ICD-10-CM/PCS search function to the For the information system, they re- physician order system, correspondence files ferred to the ICD-10-CM/PCS data promul- of ICD-9-CM and ICD-10-CM/PCS, and the gated by the National Health Insurance Bu- addition of an ICD-10-CM/PCS column on reau, which was converted to the hospital’s the surgical record form. The results indi- HIS disease classification system, to estab- cated a satisfaction level of 83~90%. See Ta- lish the ICD-10-CM/PCS basic data mainte- ble 2. and Figure1. at the end of this article). nance file, which included multiple search screens and a single maintenance screen. In Discussion and Conclusion addition, ICD-10-CM/PCS encoding hints, control, and reporting functions were added 1. Selection of theme for the hospital’s HIS disease classification system, which included the following: This study primarily explored the effect of introducing the new ICD-10 system on the 153 The International Journal of Organizational Innovation Vol 6 Num 4 April 2014

case hospital. When selecting the scope of when establishing the plans, their sugges- the theme, the case hospital selected its neu- tions were first solicited, which allowed the rology, neurosurgery, orthopedics, and ob- clinical personnel to have a high degree of stetrics and gynecology departments as the acceptance. Some information functions priority for introduction, since these four de- were not fully replaced or tested during the partments had more patients and the doctors trial period because the ICD-10 system was were more accommodating. In order to re- not fully implemented. In the future, the case duce the impact brought by changes of the hospital can focus on existing obstacles to new information system, the case hospital improvement. gradually introduced the new system. The successful experiences of the four depart- 5. Implementation of optimal measures ments would inspire greater confidence about future planning for the comprehensive Adding new functions in the infor- introduction to other departments. mation system provided great help to the introduction process in collecting the usage 2. Setting targets opinions of the clinical medical personnel for functional improvement. The disease classification personnel not only conducted trials for ICD-10-CM/PCS The case hospital has developed the encoding of inpatient cases but also at- model and procedures for converting the tempted to compile cases in other depart- classification of disease types from ICD- 9- ments for two months, in order to help un- CM to ICD-10-CM/PCS. Even though the derstand the improvements needed for en- departments of introduction are only neu- coding, the information system, and patient rology, neurosurgery, orthopedics, and ob- case history writing. The case hospital pro- stetrics and gynecology, it has completed moted the issues in trial compilation cases, the basic framework needed for compre- including collecting the needs for clinical hension conversion at the case hospital in medicine with regard to the information sys- the future, including education and train- tem, and issues in writing patient case histo- ing, information systems, patient case his- ries at medical meetings or departmental tory writing, and disease classification, meetings, and added them into patient case which will help the parallel progression in history writing norms. other departments in the hospital. As the hospital introduced ICD-10 and new learn- 3. Clarification of issues ing frameworks, the case hospital used quality control circle (QCC) tools to inter- Clarification is conducted in the four act with the hospital context, and obstacles items of people, objects, equipment, and became helpful in promoting the hospital’s methods, allowing for the holistic evaluation reform of case history encoding. The hos- of the dimensions that need to be considered pital used quality control circles and learn- in the introduction process. This study will ing-based organizations to introduce activi- continue to collect problems or needs in sub- ties to manipulate the dimensions, includ- sequent executions based on the four dimen- ing communication mechanisms, education sions of the quality control circle. training, professional teams, and knowledge sharing and transfer. The new 4. Establishment of plans medical information system was also used to support the employees and smoothly In order to conform to the operational convert them from the ICD-9 to the ICD- habits of the clinical medical personnel, 10 disease classification system. This study

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expressed the dynamic evolution of the re- Acknowledgements form process and could be a reference for other hospitals that intend to introduce the The authors would like to thank the Ministry ICD-10 disease classification system. of Health and Welfare, the 2011 special contract hospital ICD-10-CM/PCS small-scale pilot program, and Cheng Ching Hospital for their grants in support of this study.

References

Coster, C.D., Quan, H., Finlayson, A., Gao, Robbins, S. P. (1993). Organizational Be- M., Halfon, P., Humphries, K.H., Johan- havior: Concept, Controversies, and Ap- sen, H., Lix, L.M., Luthi, J.C., Ma, J., plications (6th ed.). Englewood Cliffs, Romano, P.S., Roos, L., Sundararajan, N. J.: Prentice-Hill. V., Tu, J.V., Webster, G., Ghali, W.A. (2006). Identifying priorities in method- Walker, R.L., Hennessy, D.A., Johansen, H., ological research using ICD-9-CM and Sambell, C., Lix, L., Quan, H.(2012). ICD-10 administrative data: report from Implementation of ICD-10 in Canada: an international consortium. BMC Health how has it impacted coded hospital dis- Services Research 6(77), 1-6. charge data? BMC Health Services Re- search 12(149), 1-9. DiSantostefano, J.(2009).International Clas- sification of Diseases 10th Revision World Health Organization(2013). Family of (ICD-10). The Journal for Nurse Practi- International Classifications. tioners 5(1), J,56–57.

Gjertsena, F., Bruzzoneb, S., Vollratha, M.E., Paceb, M., Ekebergc, Ø.(2013). Comparing ICD-9 and ICD-10: The impact on intentional and unintentional injury mortality statistics in Italy and Nor- way. Injury, Int. J. Care Injured 44 ,132–138.

Hsu, W.K., Huang, S., Chen, R.F.(2006).The Learning Attitude of Business Users toward a Newly Implemented IT --An Empirical Study on ERP System Users. Bulletin of Educational Psychology 38(1), 19-36.

National Health Insurance Administra- tion(2013). ICD-10-CM/PCS. Available at: http://www.nhi.gov.tw/ web- data/web- data.aspx?menu=23&menu_id=957&we bdata_id=3986&WD_ID=957(accessed 18 July 2013). 155 The International Journal of Organizational Innovation Vol 6 Num 4 April 2014

Table 1. Plans, countermeasures, feasible countermeasures

Item Focus Plan Determination of obstacles Method of overcoming obstacles

Education and training courses within departments that focus on Only one senior teacher in the Disease classification personnel at- disease classification, insurance, hospital tend symposia and medical fees Education and training courses for clinical personnel in the entire Clinical personnel are busy and Use electronic bulletin boards to an- Education and training hospital for ICD-10-CM/PCS pro- the attendance rate may be low nounce matters courses at the hospital motion Refer to symposium data from aca- The hospital has not conducted Collection of ICD-10-CM/PCS demic associations outside the hospi- Person ICD-10 encoding, and there is cases and production of encoding tal, first conduct in-hospital case en- no data for making teaching teaching plans coding and then incorporate hospital plans cases Participation in education and training Participation in symposia held by Expenditures from leaves and Leave days and funding offered by courses outside the hos- academic associations costs the hospital pital Training non-disease Encourage colleagues to practice en- Participation in ICD-10CM/PCS Disease classification certifica- classification personnel coding by themselves during non- encoding work tion can’t be easy received in the hospital work hours 1.PurchasingICD-10- Application to the hospital for the Fill out the hospital’s annual sug- Object CM/PCS books purchase of ICD-10-CM/PCS ref- High unit prices of books gested book purchase sheet, and note 2.Download electronic erence books the purchase reasons search tools

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ICD-10-CM/PCS search The outside search program Use of an information need sheet The information office uses external system for the doctor may not be able to be con- to establish a search function plug-ins and provide links order system verted to in-hospital HIS The hospital has not yet used Ask disease classification personnel Production of the issues of notes ICD-10 encoding, and it is not to help with evaluating the corre- for making ICD-10-CM/PCS case known what the data should sponding case history content neces- history writing/encoding show sary for ICD-10 encoding Modification of case Case writing standards that spec- Explain the rationale and necessity of Needs to be passed by the case history writing stand- ify the content that needs to be the amendments to the case history history committee ards written committee Requires consent from surgical Addition of columns on the surgi- Explain the rationale and necessity of attending physicians and needs cal record form that correspond to the amendments to the attending phy- to be passed by the case history ICD-10-CM/PCS encoding sicians and case history committee committee Construction of ICD-9- Addition of ICD-9-CM and ICD- CM and ICD-10- Information office has many Information office personnel assist in Equipment 10-CM/PCS correspondence CM/PCS correspond- forms on information needs priority scheduling, and give tempo- search system to the hospital order ence search and selec- and requires scheduling rary wages for overtime system tion functions Method Accommodate the National Health Constructing health in- Constructing health insurance dec- Insurance Bureau’s announcement Information office has many surance declaration for- laration formatting and disease that media formats would be changed forms on information needs matting and disease classification formatting that con- to XML in July 2012, and incorpo- and requires scheduling classification formatting form to ICD-10CM/PCS rate information programming priority scheduling

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Table 2. Tangible achievements of members

Self-scoring standards Before event After event Evaluation item 1 2 3 4 5 6 7 8 9 10 Total Mean Total Mean Realization of team Uninter- Coopera- Self Negotiation Leadership 89 5.24 134 7.88 A spirit ested tion Elevation of service Comprehen- B Negative Decent Progression Partial 84 4.94 143 8.41 quality sive Usage of improvement Produc- Understand- C Learning Familiar Instruction 72 4.24 118 6.94 methods tion ing Hesita- Responsi- D Active participation Ignore Supervision Enthusiasm 83 4.88 129 7.58 tion ble Does not Clarifica- E Explanatory ability Cognition Judgment Decisive 75 4.41 124 7.29 understand tion Notes: 1. There were 17 people in the circle, and they used various evaluation items for self-evaluation. 2. The highest number of points per person per item was 10 points and the lowest was 1 point, with a total of 170 points.

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Figure 1. Satisfaction survey for doctor usage

Series1, The Series1, The addition addition Series1, The of a of an The match system column benefit, file, search on the 90% 90% function, surgical 88% record, 83%

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A STUDY OF THE PRACTICAL AND THEORETICAL APPLICATIONS OF SECOND-ORDER CUSTOMER PERCEIVED VALUE ANALYSIS MODEL

Horng-Cherng Shiau

Department of Business Administration Far East University, Taiwan, R.O.C. [email protected]

Abstract

In recent years, service encounter related issues derived from extensions of the service theater theory have received special attention, making them almost the mainstream core for exploring customer satisfaction and customer value in service marketing. Although criticisms for customer value and customer satisfaction traditionally measured through service quality can be partially overcome, as far as the methodology for service encounter is concerned, opera- tionalization and the establishment of empirical quantitative models remain considerably difficult. In view of this, based on the service encounter viewpoint in this paper, a review on customer value, the main influential factors contributing to customer value, and the customer value classification were first conducted. Then, the customer evaluation factors were adopted to serve as the exogenous factors for measuring customer value. Finally, the value classification was linked to construct the second-order customer perceived value analysis model. This model provides feasible solutions for the current plight of taking both the practical and theoretic application into account and provides the respective service industries with a customer value survey model they can follow, thereby accumulating the empirical results of different service industries.

Keywords: customer value, customer perceived value, service encounter, service value classification, confirmatory factor analysis

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Research Motivation and Problem equal and advocated that customer satisfac- Background tion depends on the perceived quality relative to the price, or the ratio of interest rel- Over the past, the academia had its ative to the paying cost (Zeithaml, 1988) theoretical basis primarily built on the “ex- [37]. Although this viewpoint has not been pectation-disconfirmation” model when further clarified, it implicitly pinpoints cus- measuring customer satisfaction, most of tomer value as the antecedent of customer which directly measure satisfaction based satisfaction. Later, Fornell (1992) [6] put on the consistency between consumers’ ex- forth the satisfaction measurement model pected quality before making a purchase (Swedish model) and Storbacka et al. and their perceived quality after making (1996) [19] put forward “perceived value- one (Oliver, 1980) [30]. However, the use relationship profitability model.” In their of service quality for measuring customer research, customer value or customer per- satisfaction received criticisms from many ceived value was clearly deemed as the an- scholars, as they believed some problems tecedents and mediating variables for cus- were yet to be solved. tomer satisfaction. They generally believe that the enhancement of customer value or First of all, past research studies most- customer perceived value will lead to in- ly covered the impact of the overall service creased customer satisfaction, thus the in- quality dimension on customer satisfaction, creased customer loyalty and profits; con- while ignoring the individual service qual- versely, if the opposite were true, “com- ity dimensions. Garvin (1987) [8] pointed plaints” or even reduced loyalty and profits out in his research that managers could may result. Although the two models above choose one or several dimensions from the deem customer value as the antecedent and service quality dimension as the quality fo- mediating variable for customer satisfac- cus instead of focusing on all the quality dition, dissociation from service quality and mensions. Flanagan & Frederick (1993) [1] other variables as observation variables is further pointed out that strategies for meas- still not possible in practice while the uring customer satisfaction must contribute framework directly or indirectly generates to enterprises’ listing of products based on an impact on customer satisfaction through customer demand, the priority for service “customer value.” quality improvement, links with the actual quality improvement activities, and so on. In addition, Parasuraman, Zeithaml & Berry (1988) [3] selected five servicing in- Secondly, since the 1980s, scholars dustries as the research subjects for empiri- first had the idea that the two constructs of cal studies. After a two-stage variable dele- service quality and satisfaction are not tion process, the SERVQUAL scale made up of 22 questions in five dimensions was

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developed, which became one of the most (1985) [2] chose four service industries for cited service quality measurement scales in their research, and ten service quality di- the academia. Carman (1990) [15] subse- mensions were put forward. In 1988, the quently engaged in empirical studies using abovementioned three scholars further se- four different types of service industries lected five service industries as the research based on the P.Z.B research results. The subjects for empirical studies and the SERVPUAL scale was developed, and con- SERVQUAL scale consisting of 22 ques- clusions drawn from SERVPUAL with tions in five dimensions were developed considerable stability were obtained. In this (Parasuraman et al., 1988) [3]. research, the service quality dimensions of the four different service industries were In the 1990s, Rust and Oliver (1994) not entirely consistent, and the five service [31] proposed three dimensions: service equality dimensions of P.Z.B. somewhat and quality, service environment, and ser- varied. He suggested that the subject and vice delivery; Dabholkar, Thorpe & Rentz rhetoric be adjusted according to industry. (1996) [25] proposed five dimensions: en- Obviously, either SERVQUAL scale or the tity, reliability, staff interaction, problem SERVPUAL scale may not be applicable to solving, and policy. Although the service all service industries. Even though scholars quality dimensions proposed by the many recommended that the subject and rhetoric aforementioned scholars vary, based on the in the questionnaire items be adjusted as to measurement dimension names proposed service industry in practice, how to go by the scholars and whether or not the di- about making adjustments remains unclear. mensions had specific attributes or abstract measurement weights, the dimensions were Finally, the dimensions for measuring classified into constitutive dimensions and customer satisfaction through service qual- abstract dimensions, the former includes: ity proposed by the scholars showed a great time, contract, technique, physical facili- degree of variation. Chronologically, a ties, environment, enterprise, service prod- number of scholars proposed dimensions ucts, service processes, service staff, cus- for measuring service quality, including the tomers, etc.; the latter includes: trust (relia- earlier five dimensions of technique, psy- bility), responsiveness (policy, instantane- chology, time, contract, and morality put ousness), safety, assurance (attitude, com- forth by Juran, Gryna and Brigham (1974) petence, courtesy, communication, under- [16] and the seven dimensions of safety, standing), integrity, empathy (adjustabil- consistency, attitude, integrity, adjustabil- ity, problem solving), proximity (conven- ity, convenience, and instantaneousness ad- ience), tangibility, innovativeness, etc. vocated by Sasser, Olsen & Wyckoff (1978) [38]. By the 1980s, three scholars, In short, the service encounter related namely, Parasuraman, Zeithaml & Berry issues extended from the Service Theater

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Theory have received special attention in were made with the customer evaluation recent years. The related researches have factors and value classification, thereby contributed positively in resolving the constructing the two-stage customer per- above-mentioned individual enterprises’ ceived value analysis model. listing of products based on customers’ demands, the priority of service quality im- Literature Review provement, and links with the actual quality improvement activities. On the other hand, Customer Value and the Main customer delivered value and customer Influential Factors value package related theories provide more comprehensive factors affecting cus- In the field of marketing research, customer value and effectively overcome prob- tomer value is generally deemed as an im- lems that arise from investigating customer portant factor contributing to enterprises’ satisfaction through the service quality di- leading edge and firmly secured leading mension. status in the market, which will be one of the focuses of concern to enterprises in the Theoretically, regardless of whether future. Despite the continuous increase in the cognitive scripts, service blueprint literatures pertaining to researches on cus- method, service cycle, or critical incident tomer value, scholars still hold different technique is used, when applied in the ad- viewpoints regarding their definitions of justment of different questionnaire items customer value. From the perspective of ex- for different service industries, positive out- pected value, some believe customer value comes are produced. However, one draw- is the collection of interests customers ex- back is that it is more difficult to operate us- pect to obtain from specific products or ser- ing these methods, establish empirical and vices; others define customer value from quantitative models, and accumulate the the perspective of perceived value. To empirical results of individual service in- them, consumers’ faith, attitude, and prod- dustries. In order to resolve the plight faced, uct experience constitute customer value. first, this paper included a review of customer value and the main influential factors Zeithaml (1988) [37] divided value based on the theater theory, service encoun- perceived by consumers into four aspects ter, customer delivered value, and customer and defined perceived value as the cus- value package related theories. Subse- tomer’s overall evaluation of a product after quently, a more comprehensive set of cus- perceiving, accepting, and giving. This tomer evaluation factors were adopted to value is defined as the gap between the cus- serve as the exogenic variables for measur- tomer’s perceived giving and receiving. ing customer value. After that, the customer Additionally, he believed that the cus- value classification was reviewed, and links tomer’s perceived attitude toward giving

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and receiving is a subjective attitude that af- value differently in the different stages of fects the consumer’s overall evaluation of a consumption, and he believed that the sub- product. Later, a number of scholars put jective perception of customer value is pro- forth advocacies similar to Zeithaml’s. duced by the customer based on the product From the perspective of perceived value, attribute, performance, and results during they believe that customer value is the re- the consumption process. placement between giving and receiving (Monroe 1991 [18], Heard 1994 [12], Besides the scholars’ divergent views Woodruff 1997 [29], Gronroos 1997 [7], on the definition of customer value, the in- Bovet et al.,2000 [9], and Kotler 2003 [28] fluential factors selected when measuring ) and the subjective perception of experi- customer value all showed a certain degree ence and attitude (Holbrook 1999[20]) . of disparities, whether it was service encounter, customer delivered value, cus- Gronroos (1997) [7] added the view- tomer value package, or customer evalua- point of customer relationship and put forth tion. Grove & Fisk (1983) [33] believed two equations of customer perceived value, that interactions between service providers one of which is the addition of the concept and receivers in service encounter show of relational cost. It is said that the cus- many resemblances with the Theater The- tomer’s perceived value is the ratio of “core ory of Goffman (1959) [11] as far as the be- product+ added service” and “price + rela- havioral aspect is concerned. Hence, the tional cost). He believes that from the per- theory was introduced to interpret the inter- spective of relationship, the customer’s per- active process of service encounter; Grove ceived value changes with time. In particu- & Fisk adopted “staff”, “physical facili- lar, price is a short-term viewpoint, while ties”, and “procedures” in their research on relational cost is the cost as lapses during service encounter conducted in 1992 and the development of enterprise-customer re- replaced the “audience/actors”, “scene”, lations. In continuation to the viewpoint of and “performance” concepts in the original Gronroos, Sirdeshmukh et al. (2002) [10] theater theory. Later on, Grove, Fisk, & also proposed a similar view. He defined Dorch (1998) [35] further adopted the re- customer value as the consumer’s percep- search framework proposed by Grove & tion of the cost gap between benefits gained Fisk (1992) [34] to examine different cus- and what he has to give in order to maintain tomer groups regarding the effects of phys- relationships with service suppliers. In ad- ical facilities, staff, customers, and overall dition to the above concept of “the replace- service performance on customer satisfac- ment between giving and receiving”, tion. The empirical results show that the Woodruff (1997) [29] put forth another per- four factors produced a significantly posi- spective regarding customer value. He em- tive impact on customer satisfaction, while phasized that consumers perceive customer

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the different customer groups showed dif- gain an insight into the essence of customer ferent levels of concern for the four factors value and provide a different research di- above. rection, a number of scholars have proposed different classifications of customer Kotler (1992) [27] believed that “cus- value, including hedonic benefit and utili- tomer delivered value” is the gap between tarian benefit; Chandon et al. (2000) [26] the overall customer value (including prod- subsequently made hedonic benefit and ucts, services, staff, image, and other val- utilitarian benefit a part of customer value; ues) and the overall customer costs (cur- he believed that the former is the presenta- rency, time, effort, psychology, and other tion of personal values, including entertain- costs). Frederick and Salter (1995) [14] ment, exploration, and other personal val- later proposed the concept of customer ues, while the latter is the presentation of value package. He pointed out that price, personal values, including thriftiness, qual- product quality, service quality, innovation, ity, and convenience. Sheth et al.(1991) and image are the five key factors contrib- [17] mentioned five types of customer uting to customers’ perceived value. Sato value, including functional value, emo- (2000) [36] also putt forth seven customer tional value, social value, knowledge value, evaluation dimensions from the perspective and situational value. of service encounter, including environmental factors, aesthetics factors, staff fac- Sweeney & Soutar (2001) [13] con- tors, processes factors, information factors, ducted a research on consumers of durable products an services factors, and price fac- goods based on the value classification pro- tors. The summary of the influential factors posed by Sheth et al.(1991) [17] and devel- contributing to customer value proposed by oped the perceived value scale (PERVAL). the scholars is as shown in Table 1. Additionally, he classified customer value into four types: emotional value, social In this study, the seven customer eval- value, functional value (price), and func- uation factors put forth by Sato (2000) [36] tional value (quality). are considered the most complete. Thus they were adopted as the first-order dimen- In addition, in recent years, the study sion (exogenous variables) for measuring of customer value from the perspective of customer value. service encounter has become another important trend. Service encounter is the main The Classification of Customer Value factor contributing to the creation of the moment of truth during the process of ser- From the perspective of personal vice delivery (Bitner et al., 2000) [23]. In shopping value Babin et al.(1994) [4],, in the moment of truth, whenever a customer order to enable follow-up researchers to is in contact with an enterprise, the service

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Table 1. Factors Affecting Customer Value

Theater the- Service encoun- Customer deliv- Customer value Customer eval-

ory ter ered value package uation Factors affecting customer value value Factorsaffecting customer Servicing Audience staff/custom- Staff Staff /actors ers/other customers Physical envi- Physical facili- Scene ronment ties /aesthetics Proce- Processes/ Perfor- dures/overall Product ser- Product information/ mance service perfor- vices service product ser- mance vices Currency, time, effort, psychol- Price Price ogy, and other costs Image Image Innovation

quality provided by the enterprise will de- Surprenant & Solomon (1987) [5] be- termine the customer’s impression of the lieved that service encounter is the “two- enterprise. Thus, service encounter has an way interaction between the customer and impact on customers’ perception of service service provider during the service delivery quality, which in turn affects their percep- process.” This definition is focused on per- tion of value. Operators may even deliver sonal interaction. However, through the in- services that meet customers’ needs tervention of information service in servic- through it. From the perspective of service ing, the influence of the non-interpersonal encounter, classifications of customer value factor related service encounter becomes remain insufficient. Below is a brief review increasingly important (Bitner, Brown, & of literatures related to customer value clas- Meuter, 2000[23]; Meuter et al., 2000 [24]). sifications mentioned in the service en- Researches of this type have expanded ser- counter theory. The recommended classifi- vice encounter in all aspects of services, in- cation was then put forth in this study. cluding the physical facilities without any personal interactions and other factors.

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Therefore, service encounter should interactive contact, and non-interactive not be limited to personal interactions, contact can be summarized, as shown in Ta- online services just to name one. Customers ble 2. The value produced from value of may complete services through self-service personal interaction, value of technology technology. Thus, it is only by under- interaction, environmental contact, and aes- standing the impact of technology and thetic factors (refer to Table 1) is known as physical facilities on customers can cus- value of peripheral environment. On the tomer satisfaction and reasons for dissatis- other hand, product, service, and price (also faction be more comprehensively grasped refer to Table 1.) are known as functional (Bitner, Brown, & Meuter, 2000) [23]. values. The classification of customer value Hence, value classifications based on inter- is compiled as follows: personal contact, non-interpersonal contact,

Table 2. The Classification of Service Encounter and Customer Value

Interpersonal contact Non-interpersonal contact

Value of personal in- Value of technology interac- Interactive contact teraction tion Non-interactive contact Value of peripheral environ-

ment/value of function

The Proposition of Customer Perceived Value Analysis Model According to the theory of consumer behaviors, Fishbein model is one of the As for the measurement of customer multi-attribute models for the formation of perceived value, Sato (2000) [36] proposed attitudes. It mainly explains consumers’ at- seven customer evaluation factors as the ex- titude toward product brand alternatives ogenous factors for measuring customer based on their belief of product attributes value. Customer perceived value is used to and the weights of the attributes Fishbein measure all the evaluation dimensions pro- 1967 ）[21]. When used to measure satis- vided by the customer that comes in contact faction, Latour & Peat(1979) [32] devel- with the service industry or individual en- oped the satisfaction theory that validates terprises, including seven factors: “environ- consumers’ ability to recognize hidden mental factors”, “aesthetics factors”, “in- product attributes and form expectations for formation factors”, “staff factors”, “prod- the attributes. In other words, consumers ucts and services factors”, “processes fac- give importance weights for every attribute, tors”, and “price factors”, as well as the de- and their judgment will form attitudes. gree of the customer’s actual perception. The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 167

Fishbein (1967) [21] believes that the atti- ； N is the number of attributes ；n is the tude is determined by faith. This model hy- number of weights. In this study, assuming pothesizes that attitude is constituted by the each consumer gives every attribute a sub- weights and beliefs of various attributes. jective and implicit measurement weight, When applied in the measurement of cus- this weight may be a common abstract di- tomer perceived value, equation (1) can be mension for measuring service quality us- written as: ing reliability, responsiveness, trust, and in- N n novation. That is, the customer’s perceived Vo= ∑ ∑ B iij W i=1 j = 1 (1) value of the product or service provider is

Amongst them, V o is a particular con- obtained by adding up the customer’s faith sumer’s perceived value of the product or toward the intrinsic attributes of the product service provider “o”; Bi is the faith for a or service provider taken into considera- particular product provider’s attribute tion, as well as the weights of the attributes

(evaluation factor) i ；Wij are the weights identified. adopted by the service provider attribute i

Physical environment VP VP VPE Aesthetics factor Staff factor VP VI Processes I factor V Information VT VNP factor VNI

Product service Price fac- VF V F tor

Observation Model 2 Model 3 Model 4 variables Model 1

Figure 1. First-order Hypothetical Model

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Physical environment VP VP VPE Aesthetics factor Staff factor CP VI VP Processes CP factor VI CP Information CP VT VNP factor

Product ser- VNI vice VF Price fac- VF tor

Observation variables Model 5 Model 6 Model 7 Model 8

Figure 2. Second-order Hypothetical Model

Note: Meanings of English abbreviations in Fig. 1 and Fig. 2:

VPE : Value of peripheral environment VPI : Value of personal interaction VTI : Value of technology interaction VF: Value of function VI: Value of interaction VNPE : Value of non-peripheral environment VNI : Value of non-interaction CPV : Customer perceived value

Confirmatory factor analysis is often study deemed that links should be estab- used to examine the potential factors behind lished between the evaluation factors and a set of similar measurement variables. It value classifications to engage in first-order can be also used to examine the influence of confirmatory factor analysis. Further, the a particular potential factor. The first- order evaluation factors, value classification fac- factors that have higher levels of common tors, and customer perceived value were factors behind are called second-order fac- linked to engage in the second-order con- tors (customer perceived value). Examina- firmatory factor validity verification. The tion through the theoretical concept model proposition of this study is as follows: Prop- using composition of the observation varia- osition 1: Individual industries should adopt bles is known as factorial validity. As past the second-order confirmatory factor valid- researches on the factor validity verifica- ity analysis to examine the factor validity of tions of value dimensions targeting value individual service industries or enterprise classification dimensions and the influential factors of customer value remain scarce, this

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customers’ value dimensions, so as to con- the empirical quantified models. In addi- firm the best combination of the customer tion, the customer value procedures can be perceived value analysis model. provided for the different service industries as a reference. In terms of empirical The feasible first-order and second- study, the combined use of the cognitive order customer value theory model hy- scripts, service cycle (refer to Sato 2000) potheses in this study are as follows (Fig- [36], and critical incident technique (refer ure. 1 and Figure. 2): the 4-factor model to Bitner, Booms, & Tetreault, 1990) [22] (model 1), 3-factor model (model 2), the may be adopted to serve as a reference for first 2-factor models (model 2), and the the customer perception scale. Addition- second 2-factor model (model 4). Re- ally, through the second-order confirma- searchers may collect empirical data tar- tory factor analysis, the factor validity of geting individual service industries or en- the individual service industries or enter- terprises. Through the same competing prises’ customer value dimensions can be models with the same observation varia- examined. This way, not only the ad- bles above, testing was conducted based vantages of quantitative research can be on the factor structures of the first-order retained, but also the empirical and quanti- and second-order theoretical model under fied results can be accumulated. Under the different assumptions, thereby verifying premise of the establishment of factor va- the best combination and accumulating lidity, this study advocates that the con- empirical results from different service in- firmed best combination be also adopted dustries. and the customer satisfaction (Sweden) Conclusion model of Fornell (1992) [6] and the “perceived value relationship profitability The second-order customer per- model” of Storbacka et al. (1996) [19] be ceived value analysis model proposed in amended, so as to serve as a theoretical ba- this study can resolve the plight of the ser- sis for empirical cases of individual service encounter theory being more difficult vice industries, or enterprises’, perceived to operate and lead to the establishment of value, satisfaction, relationship, and profitability.

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CUSTOMER EXPERTISE, AFFECTIVE COMMITMENT, CUSTOMER PARTICIPATION, AND LOYALTY IN B & B SERVICES

Ching-Chow Yang Professor, Department of Industrial and Systems Engineering, Chung Yuan Christian University, Taiwan

Ping-Shun Chen Assistant Professor, Department of Industrial and Systems Engineering, Chung Yuan Christian University, Taiwan

Yu-Hui Chien (corresponding author) Doctoral Candidate, Department of Industrial and Systems Engineering, Chung Yuan Christian University, Taiwan and Lecturer, Department of Leisure and Recreation Management, Chihlee Institute of Technology, Taiwan

Abstract

This study aims to identify the factors that contribute to customer expertise, affective commitment, customer participation, and loyalty in B & B tourism. The author proposes a model, in which customer expertise and affective commitment are assumed to increase the extent to which customer participation in the service delivery. Furthermore, customer participation may increase loyalty. From the results, the major findings of this study are as the following: Firstly, customer expertise and affective commitment, relate positively to customer participation. Sec- ondly, customer participation enhances loyalty. Thus, the findings provide managers in the B & B services with valuable insights that firms can increase their competitive advantage through enhancing customer participation.

Keywords: customer expertise, affective commitment, customer participation, loyalty.

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Introduction achieve competitive advantage (Prahalad & Ramaswamy, 2004) and the next frontier in With regard to tourism, in order to competitive effectiveness (Bendapudi & make travel-related decisions, customers Leone, 2003). make use of travel sites and on-line communities to obtain practical information. As for the factors that enhance cus- Through knowledge from themselves and tomer participation, prior studies showed from social communities, customers are that the extent to which customers partici- taking an initiative to communicate with pate in the service delivery depends on the service providers. These changes corre- resources that customers have. In terms of spond to what Prahalad and Ramaswamy value creation, customer participation of- stated (2000) “the market has become a fers greater opportunities for services that platform where consumers actively partici- require high degrees of customer contact pate in value creation”. In other words, the and high interdependence between custom- marketing philosophy is transformed from ers and service providers for favorable out- “market to” to “market with” (Vargo & comes (Auh et al., 2007; Sharma & Patter- Lusch, 2004). Under the concept of “market son, 1999). B & B tourism is a service that to”, consumers are passive receivers of emphasizes the human touch attributes and value. They are segmented and then enticed requires frequent interpersonal interaction. to purchase the products that producers de- It serves as an appropriate context to ex- sign for them. In this case, the roles of buy- plore the role of customer participation. ers and sellers are clear-cut. In contrast, the notion of “market with” means that con- Based on the discussion above, re- sumers go along with the firms to create search direction focuses on under which value (Lusch, Vargo, & O'Brien, 2007). circumstances customers would be motivated to engage in service delivery. How- Customers are more capable, will- ever, while reviewing related literature, we ing and motivated to exercise power to get found some gaps. First, there is limited em- involved in the service. In contrast, firms pirical research for the factors that contrib- play the role as facilitators of value crea- ute to customer participation. So far most of tion, rather than producers of standardized the research concerning customer participa- value (Payne, Storbacka, & Frow, 2008). tion focuses on the effects that it brings Some empirical researches have identified about, like service quality (Ennew & Binks, the benefits that customer participation 1999), satisfaction (Bendapudi & Leone, bring about for consumers and firms. When 2003; Chan, Yim, & Lam, 2010; Wu, 2011) customers take part in the process of deci- and loyalty (Ennew & Binks, 1999). Little sion-making, they gain more control of the attention is paid to the factors that enhance service creation and delivery. Hence, the customer participation. Furthermore, most service quality is better and customers ob- of the works that address its antecedents tain more customized service (Xie, Ba- provide only theoretical review (Lusch et gozzi, & Troye, 2008). For the firms, their al., 2007; Payne et al., 2008). Empirical productivity increases and their customers support is rarely explored (Wu, 2011). Sec- prone to be more satisfied, when they per- ond, in the tourism literature, customer par- ceive more value from their service encoun- ticipation is less associated with service re- ters during participation (Sharma & Patter- lationship. The concept of relationship mar- son, 1999). Based on these findings, many keting was not introduced to tourism litera- researchers support the view that firms ture till 1996. Thus the theoretical and em- should embrace the concept of customer pirical literature development concerning participation, because it is the means to The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 175

relationship marketing is quite limited or both. In these services it has the charac- (Yuksel, Yuksel, & Bilim, 2010). teristics that it takes customers long time to wait for the result and the service outcome Since there has been little work that is highly uncertain. In addition, the service addresses firm-customer relationships from offer is typically customized. In this study, the perspective of customer participation we mainly focus on the relationships be- (Ennew & Binks, 1999; Wu, 2011). Ac- tween customers, and assess how customer cording to Li and Petrick (2008), relation- participation interacts with its antecedents ship marketing and customer as value co- and decedents from the perspective of the B creator are two paradigms that need to be & B service. Indeed, customers can under- more researched. Therefore, in this study stand their thoughts and feelings, and can we combine customer participation and re- further communicate with them through the lationship marketing together and then ex- interaction. Ruan’s research (2002) on the amine the factors that enhance customer relevant factors of the customer interaction participation and how customer participa- in play situations concluded that there are at tion affects customer loyalty. least seven functions in customers’ play interaction. Therefore, in the B & B tourism Literature Review and Development industry, front-line employees or managers of Hypotheses provide customers with travelling information and jointly choose the travelling Customer Participation tour that best suits customers’ needs. Both customers and service providers have to Customer participation emphasizes make conscious efforts to interact with each the participative role of consumers in the other to ensure that the service is appropri- service context. Dabholkar (1990) defined ately delivered. customer participation as "the degree to which the customer is involved in produc- Through participation, customers ing and delivering the service". According are able to reduce uncertainty and avoid ser- to Lengnick-Hall, Claycomb and Inks vice failure, when the service is long term (2000), customer participation means “en- in nature and is perceived high-risk. In the gaging customers as active participants in literature review customer participation is the organizations’ work”. Under this con- widely accepted to be an important factor cept empowered consumers take part in the that enhances service quality (Ennew & design, execution and delivery of the ser- Binks, 1999), because perceived quality is vice (Ertitnur, 2008). Customer’s role as ac- significantly influenced by the interaction tive participants requires mental and physi- between customers and service providers. cal efforts and involvement (Cermak, File, Thus, customer participation becomes the & Prince, 1994). Namely, customers need indicator for an effective relationship and to be physically present to get the service or perceived service quality. Besides, success- provide information as a prerequisite. In- ful relationships furthermore contribute to creasingly, customers engage themselves in satisfaction, loyalty and retention. value creation, either by serving themselves, cooperating with service providers Customers obtain timely service or with other customers (tourists in the with better price but gain greater control of same travel group). service quality with satisfaction. For firms, customer participation raises productivity Customer participation is essential (Fitzsimmons, 1985), efficiency (Jones, to the services that are complex, long term, 1990), service performance (Mills, Chase,

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& Margulies, 1983), and contribute to ser- that most relate to his situation (Bell, Auh, vice quality and satisfaction. The engage- & Smalley, 2005). ment of customers in the service process benefits not only themselves but the service As customers become more experi- providers. Both parties experience win-win enced, their expertise is simultaneously en- situation through reciprocal cooperation, hanced. Consequently, they are capable to which enhances the relationship. evaluate the information provided and draw Bendapudi and Leone (2003) pointed out conclusions about service provider’s per- that the process of customer involvement is formance in comparison with other alterna- “the next frontier of competitive effective- tives (Bell et al., 2005). To avoid poor ser- ness”. The firms that provide customers vice quality and service failure, customers with service co-production opportunities will want to influence the outcome of the and resources are able to improve competi- service and this influence is highly related tive advantage (Lusch et al., 2007). to the individual’s ability (Abeles, 2003). Therefore, customers with expertise are Customer Expertise able to assess the service provider’s performance and perceive less risk when making Customer expertise refers to “the decisions. Since customers are capable of ability to perform product-related tasks suc- distinguishing whether the service provided cessfully” (Alba & Hutchinson, 1987). are proper or not, they are more confident Customers who are able to make useful and in deciding taking an active role in the ser- timely contributions to service ensure the vice delivery. Thus, the following hypothe- quality of service (Schneider & Bowen, sis is proposed: 1995). Sharma and Patterson (1999) defined customer expertise as customer’s H1: Customer expertise relates positively background knowledge about the perfor- to customer participation. mance of a product and the general understanding of how similar brands perform on Affective Commitment average. This suggests that a customer shapes his expertise not only from the ser- Affective commitment refers to the vice provider he is dealing with, but from sense of liking, emotional attachment and other relationships or resources. It suggests belongingness. Individuals with affective that expertise gained is not firm-specific, attachment show a favorable attitude to- but market-based. ward the relationship and want to stay in it. The critical feature of this dimension of An experienced customer may de- commitment lies in that the customers stay velop some norms that he expects a service in the relationship, because they want to provider should perform, based on the ex- (Cichy, Cha, & Kim, 2009). This self- perience in the past or resources he obtains driven desire motivates thus the customers from other channels. He is able to see be- to contribute meaningfully to maintain du- yond the functional service quality dimen- rable associations with their partners. sions, like staff’s friendliness and empathy, and therefore, focus on the core technical According to Meyer and Her- attributes, such as appropriateness of the scovitch (2001) when a customer decides to tour recommended. Namely, when an ex- stick to a relationship out of his own will, pert customer is more capable, he develops he tends to demonstrate favorable behavior his own evaluative criteria to detect various towards the relationship party voluntarily. attributes of a service offering and make his In comparison, calculative commitment is purchase decision based on the attributes based on instrumental reasons. Namely the The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 177

force that binds a customer to a service pro- and hence form loyalty. As the frequency of vider lies in economic motives, like switch- repurchasing intensifies, the chance of ing costs and sacrifice. The customer is searching for alternatives decreases. In the compelled to choose the collaboration part- tourism context, many believe that novelty ner out of economic need and is left with and experience seeking is the main motive limited alternatives. Compared with affec- for travelling, which leads to the tendency tive and calculative commitment, norma- of switching brands, like visiting different tive commitment derives from social pres- destinations, restaurants and hotels (Gallo- sure. The customer feels obliged to attach way & Lopez, 1999; Lee & Crompton, to the service provider. Among the three di- 1992). However some researchers argued mensions of commitment, affective com- that relaxation seekers demonstrate a differ- mitment is far more likely to arouse cus- ent attitude. They show a higher propensity tomer participation in the delivery of ser- of repeated visit (Fyall, Callod, & Edwards, vice. 2003). In addition, the novelty-seeking mentality may not hold true for all other Consequently, the focus of this businesses in the B & B tourism industry. study is primarily on affective commitment. Thus, we hypothesize that: It represents a situation in which customers demonstrate an affective and emotional at- H3: Customer participation relates posi- tachment to the relationship with the ser- tively with customer loyalty. vice providers. When individuals have high affective commitment, they may perceive Methodology themselves as part of the company (Iun & Huang, 2007) and therefore are prompted to Quantitative Data Collection actively take part in behavior that helps the firm to achieve its goals (Mayer & Schoor- Participants. man, 1992). Empirically Morgan and Hunt (1994) demonstrated that commitment had This study conducted a convenience a positive effect on cooperation between survey with a structured questionnaire. The buyer and supplier in the B2B setting. The questionnaires were distributed to a sample same result also held true in the customer- of 300 customers who received B & B ser- service firm relationship, namely, B2C set- vices and yielded 237 finished question- ting. The findings of Kim, Ok, and Gwinner naires. Out of these, 216 were usable. (2010) supported the view that affective commitment enhanced the customers’ co- Measuring Tools. operative behavior. Thus, the following hypothesis is proposed: The measurement instrument was designed based on various previous studies. H2: Affective commitment relates positively All the questionnaire items were measured to customer participation. on a five point scale. Respondents were asked to indicate their level of agreement Customer Loyalty toward each statement, from 1 (strongly disagree) to 5 (strongly agree). Beatty, Homer and Kahle (1988) pointed out that when a customer is highly Customer expertise . involved in the service delivery, he tends to contribute some of his time to do service- We consider customer expertise as related information search. Once he is sat- a customer’s prior knowledge and skill to isfied with the service, he will repatronize assess product performance. This construct The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 178

measures a customer’s market-based exper- (Cronbach’s alpha) to confirm the reliabil- tise instead of expertise with a specific ity of each research factor. According to travel agency. We used a four-item scale Robinson and Shaver (1973) if α is greater developed by Sharma and Patterson (2000). than .7, the variable has high reliability, and if α is smaller than .3, it implies that there is Affective commitment . low reliability. The reliability of four latent variables was investigated by calculating We define affective commitment as Cronbach’s alpha. The range of the values emotional attachment to the service pro- was between .84 and .92, which indicated vider and showing of favorable attitude to- all measures were quite reliable. ward the relationship. This construct measures the extent to which a customer Structural Equation Model feels identified with the service provider. We used a four-item scale by Meyer and In order to find out the relationship Allen (1984). in the whole research model in this study, a structure equation model (SEM) was used. Customer participation . The criteria of Chi-square, GFI, AGFI, CFI, RMR, and RSEMA were used to evaluate We define customer participation as the overall goodness of fit of the model. Ac- “the degree to which the customer is in- cording to Hair et al. (2010), the value of volved in producing and delivering the ser- overall fit of a hypothesized model can be vice”. We measure customer participation regarded as appropriately significant when according to the three items that Betten- each criteria Chi-square is small (p court (1997) proposed with regard to Cus- value>.05), and fit indices such as the ratio tomer Voluntary Performance Scale on the of Chi-square to degrees of freedom (Chi- basis of cooperation and square/d.f. ≤2); goodness of fit index participation. (GFI>.9), and adjusted goodness of fit index (AGFI>.9); root mean square residual Customer loyalty . (RMR<.1), and root mean square error of approximation (RMSEA<.08) are all ful- Customer loyalty is defined as cus- filled. The result of confirmatory factor tomer’s intention and commitment to stay analysis (CFA) produced evidence of an ac- with the service provider. We adopt a four- ceptable fit of the model (Chi-square= item scale from Behavioral Intentions Scale 462.92; df =284; p=.00; Chi- by Boulding et al. (1993) and loyalty di- square/df=1.63; RMR=.04; GFI=.91; AGFI mension of the Behavioral Intentions Scale = .90; RMSEA = .08). Parameter estimates by Zeithaml, Berry and Parsuraman (1996). of the final model were inspected and no problematic occasions were found. And the Purification and Reliability of correlations between latent variables Measurement Variables ranged from .41 to .56 (see Table 1.).

To purify the measurement scales Results and to identify their dimensionality, princi- pal components reliability test with Vari- Quantitative Data Analysis max rotation was applied to condense the collected data into certain factors. After reliability test, we used item-to-total correlation and internal consistency analysis

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Table 1. Correlation matrix and discriminant validity analysis of latent variables

Constructs M SD 1 2 3 4 1. Customer expertise 3.72 0.55 0.84 2. Affective commitment 3.63 0.40 0.56** 0.85 3. Customer participation 3.81 0.42 0.47** 0.51** 0.89 4. Customer loyalty 3.96 0.53 0.43** 0.41** 0.45** 0.86

M: Means, SD: Standard deviations, *p ＜0.05, **p ＜0.01, n=216 The square roots of average variance extracted (AVE) are given on the diagonal. The correlation coefficients of constructs are given under the diagonal.

Conclusion and Future Research Returned valid questionnaires are female (48.3%) and male (51.7%), mostly Our results provide empirical sup- range from 31 to 40 years old (37.5%), next port for the conceptual framework that in- are 21 to 30 years old (29.8%). Next, in the corporates task clarity, ability, motivation average monthly income, the highest per- as facilitating factors for effective customer centage is NTD 40,000 to 50,000 (38.7%), participation. The analysis shows that cus- followed by NTD 40,000 to 50,000 tomer loyalty can be enhanced by encour- (30.5%). As for the occupation, the top one aging customers to participate in service. In is Armed services, civil servant and educa- addition, this study offers an insight on the tor (27.6%), followed by the business antecedents that promote customer partici- (20.9%), student for 12.5%, and manufac- pation. Our study benefits the existing mar- turing for 10.1%. To the education degree, keting literature concerning customer par- university is most (45.5%), followed by ticipation in that it examines some factors college (24.8%), the high school is ac- that contribute to customer’s participative counted for 16.6%. role in the service delivery. It serves as the

empirical support for the S-D logic pro- Assumption Tests posed by Vargo and Lusch (2004).

The hypotheses in this study were Moreover, in the world of “custom- tested by using Structural Equation Model- ers are the king”, managers in the B & B ing. The resulting measurement model has services should understand the important X2/df equal to 1.63 and all values in the role of customers in the service delivery and model reflect acceptable fit of the data. For moreover to motivate them to keep good re- finalized model, standardized path coeffi- lationship with the firms of B & B services. cients and significance are as below: First, Customer participation is a double-edged we find support for H1-H2. Antecedents of sword (Chan et al., 2010). customer participation, including customer expertise ( β=0.32, t-value=3.27, p=.001 < Therefore, it is significant for man- .01), and affective commitment ( β=0.27, t- agers to understand how to make use of cus- value=1.94, p=.001 < .01), both positively tomer participation to bring competitive- relate to customer participation. Regarding ness for the firm. the decedents of customer participation, the

hypotheses H3 is also confirmed. Customer At last, we believe this study pro- loyalty ( β=0.45, t-value=5.17, p=.001 < vides valuable insights into the customer’s .01) was found to be positively related to participative role in the service delivery as customer participation. value co-creator. As customers become

more knowledgeable and demanding due to The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 180

experience-seeking and modern technol- rience process and open up more opportu- ogy, managers should map the whole expe- nities to include customer participation into B & B service delivery.

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NOSTALGIA, PERCEIVED VALUE, SATISFACTION, AND LOYALTY OF CRUISE TRAVEL

Ming-Yuan Wang Department of Tourism Management, National Kaohsiung University of Applied Sciences, Taiwan, ROC.

Wei-Chin Li (corresponding author) Department of Tourism Management, National Kaohsiung University of Applied Sciences, Taiwan, ROC.

Mei-Ju Chou Department of Early Childhood Education, Taiwan Shoufu University, Taiwan, ROC.

Chien-Jung Huang Department of Marketing and Distribution Management, Chihlee Institute of Technology, Taiwan, ROC.

Abstract

This study aims to explore the causal relationships among nostalgia, perceived value, satisfaction, and loyalty. The author proposes a model, in which nostalgia is assumed to have positive impact on perceived value. Furthermore, perceived value may increase satisfaction and loyalty. Finally, satisfaction could increase customers’ loyalty. From the literature review, the major findings of this study revealed that nostalgia has a positive effect on the perceived value of cruise tours, and that perceived value is a multi-dimensional construct that also has a positive influence on satisfaction and loyalty. Meanwhile, satisfaction has a positive effect on loyalty. These results hence will provide potential guidelines for the railway industry in tourist planning, and enable decision-makers to formulate appropriate marketing strategies.

Keywords: nostalgia, perceived value, satisfaction, loyalty, cruise travel.

cultural industries provide not only a travel Introduction destination but also a cultural experience that may entail emotional qualities such as nostal- For tourists or consumers, local gia. Schmitt (1999) defined marketing experience as providing consumers with sensory

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stimuli, emotional experiences, and thought- fective responses are directly related to per- provoking activities, all to retain the value of ceived value in highly experiential service the last memory. Although the use of cultural, settings such as cruising. nostalgia, and emotional experiences in tourism have been discussed in previous litera- Since satisfaction is largely based on ture (Sweeney and Soutar, 2001; Babin and consumers’ affective responses to marketing Attaway, 2000; Holbrook, 1999), there ap- stimuli (Oliver, 1997), this study focuses on pears to be no literature that examines the role how affective factors influence cruise passen- of affective factors in railway tourism mar- gers’ perceived value and indirectly influence keting. passengers’ satisfaction and loyalty. Based on the described above, the objective of this According to previous researches on study is to develop a model to integrate nos- marketing science, the main objective is to talgia, perceived value, satisfaction, and loy- achieve passenger satisfaction and loyalty, as alty in cruise travels. well as better service quality, which will keep the operator at a competitive position in the Literature Review domain of passenger transportation (Kotler, 2003). Although several literatures discuss Nostalgia how service quality affects passengers’ loyalty in passenger transportation, such as air- Nostalgia is defined as a longing for line, bus, and railway passenger services the past, yearning for yesterday, or a fondness (Chen, 2008; Wen et al., 2005; Nathanail, for possessions and activities associated with 2008), there is limited research about how the days gone by, also is a powerful construct psychological level influences loyalty. that has direct and significant influence on consumer behavior (Holbrook and Schindler, Furthermore, customers’ value per- 1996; Thelen et al., 2006). Nostalgia can also ceptions have attracted growing attention be described as a preference toward objects from academics and practitioners (Petrick, from when one was younger or from times 2003; Holbrook, 1999). Moreover, custom- about which one has learned vicariously, per- ers’ value perceptions seem to drive their fu- haps through socialization or the media (Fair- ture behaviors such as re-purchase intent and ley, 2003). Nostalgia is capable of eliciting a word-of-mouth referrals (Brady and Cronin, variety of emotional responses, including 2001; Cronin et al., 2000). If value percep- warmth, joy, gratitude, affection, and inno- tions are important for consumer behavior cence, mixed with bittersweet emotions such theory and practice, then the next logical task as sadness and a sense of loss (Holak and is to explore its antecedents and conse- Havlena, 1998; Muehling and Sprott, 2004). quences in a variety of consumption settings. Therefore, we conceptualize nostalgia as an This study focuses on the experiential ser- affective response produced by reflection of vices of cruise travel. Research in consumer things associated with the past. behavior demonstrates that affective responses to consumption objects influence Perceived Value consumers’ post-purchase intentions (Wirtz, Mattila, and Tan, 2001). Duman and Mattila Perceived value is an extremely im- (2005) also pointed out that consumers’ af- portant concept in marketing, and many authors have dealt with it in recent years (Snoj et al., 2004). From the customers’ use of

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value, Zeithaml’s (1988) analysis defined Proposition 1: Nostalgia has a positive effect perceived value as the consumers’ overall as- on perceived value. sessment of the utility of a product based on perceptions of what is received and what is Satisfaction given. This definition is consistent with that of other researchers who have described Customer satisfaction is defined as a value as a cognitive trade-off (Dodds et al., customer’s overall judgment on disconfirma- 1991). Moreover, according to different au- tion between expected and perceived service thors, customer perceived value is a multidi- performances (Anderson and Sullivan, 1993; mensional concept and is conceptualized as a Ramaswamy, 1996). Baker and Crompton customer’s perceived net trade-off received (2000) also defined satisfaction as an experi- from all relevant benefits and costs or sacri- ential quality attained after the tour experi- fices delivered by a product or service or sup- ence. Spreng, Mackenzie, and Olshavsky plier and its use (Slater and Narver, 2000; (1996) insist that the satisfaction of the tourist Snoj et al., 2004; Ulaga and Chacour, 2001). is the result of experienced quality. Further- more, satisfaction is a positive, affective re- It is also recognized as an important action resulting from a favorable appraisal of factor in the marketing of products and ser- a shopping or consumption experience (Ba- vices (Yu et al., 2005). In fact, perceived bin and Griffin, 1998). value is the essential result of marketing activities and is a first order element in relation- Satisfaction is primarily an affective ship marketing (Oh, 2003). However, many evaluative response (Oliver, 1992; Patterson previous researches have unanimously con- and Spreng, 1997). Emotions are associated firmed the context-dependent nature of per- with intense states of arousal that lead to fo- ceived value (Francis and White, 2004; cused attention on specific targets and may Holbrook, 1994; Mathwick et al., 2001; impact ongoing behavior. Allen et al. (1992) Woodall, 2003). That is, the construction of also demonstrated that emotions act as a bet- value differs between objects, individuals, ter predictor of behavior than do cognitive and circumstances. evaluations, while in line with this discussion, Strandvik and Liljander (1994), and Wildschut, Arndt, and Routledge Spreng et al. (1993) argued that perceived (2006) mentioned that nostalgia is a happi- value should be a direct antecedent of satis- ness related emotion. Nostalgia also appears faction. Thus, to link positive affective reactions described in the emotion scales as joy, happiness, and Proposition 2: Perceived value has a positive pleasure with connections to others involving effect on satisfaction. affection, warm-heartedness, love, and senti- mentality (Holak and William, 1998). Loyalty Wildschut et al. (2006) found that like love, nostalgia bolsters social bonds; that, like Customer loyalty is defined as the pride, nostalgia increases positive self-re- feeling of commitment or affection for a par- gard; and that, like joy, nostalgia generates ticular product or service. Olsen and Johnson positive affect. For this reason, nostalgia is (2003) defined loyalty as repeated purchasing regarded as an affective response; when pas- or relative volume of same brand purchasing. sengers feel nostalgia, they can gain the ben- According to Oliver (1999), loyalty is a efit of a positive emotional state. Thus,

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deeply held commitment to re-buy or re-pat- customer satisfaction becomes a mediating ronize a preferred product or service consist- variable of repurchase willingness (Olsen and ently in the future; loyalty is having a compo- Johnson, 2003). Kotler (2003) indicated that nent related to both repeated purchase and at- satisfaction, referring to the level of satisfac- titudinal commitment (Jacoby and Chesnut, tion or dissatisfaction, is contributed by the 1978). Loyalty in marketing consists of a expectation of the product. Therefore, the consumer commitment to repurchase a brand definition of satisfaction in this research is and can be demonstrated by repeated buying defined as the difference between customer of a product or services or other positive be- expectation and the achievement of the prod- haviors such as word of mouth advocacy uct. Customer loyalty is influenced by cus- (Buttle, 1998; Dick and Basu, 1994; Ve- tomer satisfaction (Bitner, 1990; Hui et al., lazquez, Saura and Molina, 2011). 2007). Therefore,

Harrison and Shaw (2004) found that Proposition 4: Satisfaction has a positive ef- repurchasing willingness is relevant to con- fect on loyalty. sumers’ satisfaction; therefore, perceived value is an essential factor to the level of sat- Conclusion isfaction. The concepts of perceived value and satisfaction are mostly similar and easily From the theoretical standpoint, this confused when discussed. It has been argued study makes some contribution to tourism lit- that satisfaction and perceived value are two erature by providing insights on the factors complementary yet distinct constructs (Eg- that affect loyalty. First, this study proposes gert and Ulaga, 2002). Eggert and Ulaga nostalgia influence perceived value. Based (2002) demonstrated that customer satisfac- on the result, the affective factor has an im- tion should be conceptualized and measured portant role in affecting perceived value. Fur- as an affective construct, while customer per- thermore, this study supports the positive received value is best conceptualized as a cog- lationship between perceived value and pas- nitive variable. Therefore, some researchers senger satisfaction, which corresponds with determined that loyalty has positive associa- the research contributed by Chang et al. tion with perceived value (Dodds et al., 1991; (2009). Finally, passenger satisfaction posi- Grewal, Monroe and Krishnan, 1998). Ac- tively influences passenger loyalty in cruise cording to the results of previous studies, per- travel. This study also finds that perceived ceived value has been found to be a powerful value has a very strong influence on loyalty, predictor of loyalty. Therefore, and the result is consistent with the research contributed by Chang et al. (2009). Proposition 3: Perceived value has a positive effect on loyalty. In addition, some managerial implications are provided as follows: First, the role According to Petrick and Backman of perceived value must not be overlooked (2002), consumer satisfaction and perceived because it might mediate the nostalgia on sat- value is relevant to loyalty; Anderson and isfaction and loyalty in our study. The TRA Sullivan (1993) mentioned that loyalty is managers should learn how to cultivate pas- positively affected by consumer satisfaction. sengers’ perceived value in order to affect Baker and Crompton (2000) also pointed a passengers’ behavioral intentions. Second, higher level of satisfaction increases the tour- according to the research results, nostalgia in ist loyalty and repurchasing willingness; so railway tourism marketing is quite important.

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Finally, since nostalgia exerts influence on date its usefulness. Furthermore, in-depth in- perceived value, TRA managers should terviews of parent-child tourists’ experiences therefore give attention to designing more can be employed. Moreover, a quantitative nostalgic routes to attract this segment of pas- research approach will gain more insights sengers for first-time or repeat passengers. into how parent-child tourists perceive cruise travels and lead to results different from that At last, the model in this study can be of the qualitative research approach. applied to other recreational tourism to vali-

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TOURISTS’ PERCEPTIONS OF TOUR GUIDES IN VISITING TAIWAN

Yi-Hsien Lin Department of Tourism, Nan Jeon University of Science & Technology, Taiwan R.O.C. [email protected]

Yu-San Ting Bachelor Program in Tourism Travel Management Da-Yeh University, Taiwan R.O.C. [email protected]

Yu-Lun Hsu Department of Tourism Nan Jeon University of Science & Technology, Taiwan R.O.C. [email protected]

Cha-Chun Wu Department of Leisure Business Management, De Lin Institute of Technology, Taiwan R.O.C [email protected]

Abstract

It is evident that tour guides plays a vital role in linking the tourists with their destination. They bridge the gap brought by cultural differences and language barrier, which apparently hinders the ability of tourists to enjoy their experience. In this regard, the objective of this study is to examine the qualities that a great tour manager needs to possess in order to offer excellent travel experience. Several studies reveal that the role of a tour guide is critical in achieving the overall tourism experience. To affirm this hypothesis, the research used fifteen case studies to scrutinize the experience of Mainland China tourists in Taiwan. Among the good qualities identified from the cases studies that a tour manager should possess include

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but not limited to professionalism, knowledgeable, enthusiastic about the job, a sense of responsibility and patience. The manager also needs to be humorous, have the ability to handle emergency, and be attentive to guests.

Keywords: Tour Guide, Tourist Perception, Travel Experience, Travel Quality, Tourism Bureau, Taiwan (R.O.C)

Introduction Tour guiding profession is the core of the tourism industry, and helps to make the Background of the Study industry attractive and profitable. According to Ap & Wong (2001), the guides are the Over the past few years, there has front-line employees, who bear the responsi- been a rapid growth in outbound tours bility of overall impression and satisfaction among the Asian countries. According to of the services offered at any destination. Wang, Jao, Chan, & Chung (2010), the dra- Although the form and condition of destina- matic growth as well as the rising income tions are essential, it is the quality of service levels in the regions is fuelling this increase. offered that defines customer experience. To Outbound travel in this region mainly com- achieve these tremendous results, tour guid- prise of group package tour or all-inclusive ing can be viewed in three broad perspec- travel. Apparently, Asian tourists are the tives. From the tourist perspective, the leaders in this type of packages much more guides serve as pathfinders, tour leaders, as than their western tourist counterparts well as mentors. From the investors’ per- (Wong & Lee, 2012). Novice explorers and spectives, they serve as spokespersons that thus the need of a tour guide characterize represent the image and reputation of the this organized mass tour. The service indus- company. Lastly, from the viewpoint of host try particularly in tourism is highly depend- destination, tour guides are interpreters that ent on contact employees, who are familiar assist to deduce sense of the culture and her- with the destination and thus highly influ- itage of the destination (Mak, Wong, & ence the service quality as perceived by cus- Chang, 2011). tomers (Wang, Hsieh, & Chen, 2002). In this regard, international and local tourism The functions of a tour guide make industries at many destinations are increas- tour guiding to assume various definitions. ingly recognizing the role played by tour Nonetheless, there is an internationally ac- guides. cepted definition provided by the Interna- tional Association of Tour Managers and the Tour guides plays an essential role in European Federation of Tourist Guide Asso- linking the host destination and its visitors. ciation. It defines a tour guide is a person who “guide groups or individual visitors The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 193

from abroad or from the home country Objective of the Study around the monument, sites and museums of a city or region; to interpret in an inspiring The major objective of this study is and entertaining manner, in language of the to examine the qualities that a great tour visitor’s choice, the culture and natural her- manager needs to possess in order to offer itage and environment” (Ap & Wong, excellent travel experience. To be able to 2001). From the definition, it is clear that achieve this objective, the following specific the guides have the ability to transform the objectives will guide the study: tourists’ visit from just a tour to an experi- • To search for the balance between ence. This major discovery is what the Tai- commercial needs of tour operators wan government is relying on to attracts and their experiential desires. tons of tourists in to the country, particularly from the mainland China. • To understand how the various forms of tourism determines the Problem Statement quality of a tour operator.

Cultural differences as well as lan- • To determine ways to reduce the re- guage barrier are key components that may sponse time taken by tour operators hinder the inspiration and entertainment of a to deal with tourists’ complaints. tourist when visiting a particular destination. This is particularly devastating when visiting a destination like Taiwan, which is Research Questions cupped with rich and diverse culture and heritage. Nonetheless, it seems that the in- 1. What really matters of a great tour fluence of a great tour manager can overturn manager for offering an excellent things. The influence usually improves the travel experience? tourists’ experience, feelings, and attitude toward the destination, during their travel 2. Are good qualities in tour manage- time and thereafter. Using related case stud- ment naturally acquired or learned at ies, the research will examine the qualities school? possessed by great tour managers, which agencies and travel business related industry 3. What knowledge and professional understand and utilize to ensure there is attitude do a great tour manager quality travel experience. This not only as- needs to possess? sists in expanding the market but also promoting the culture and heritage of the destination.

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4. What are the physical characteristics need to have. In North America for instance, that a good tour operator needs to training experience is not necessary and vir- tually anyone with an operating license can have? be a tour guide. This is not the case in other cities, where one must have training in order Significance of the Study to be a tour guide (Wong & Lee, 2012).

Identifying the qualities of a great Tour guide training is critical in the tour manager will increase the quality of improvement of the guides’ standards of services offered to tourist visiting a particu- services as well as their product knowledge. lar destination. To start with, travels agen- Carmody, (2013) suggested that profes- cies and other investors will have a bench- sional bodies in the hospitality industry mark of the kind of tour leader to put in the should develop a mechanism that would front line. Using their knowledge and expe- support tour guides. The role of the bodies rience, the tour operators will be able to toward the guides would be to instigate meet the demands of the customers, which training, certification, licensing, and award will not only give the tourists the value for programs for the members. This is the un- their money but also leave them satisfied. derlying premise of a sound tourism indus- The result will be increased number of tour- try. According to Baum (2007), good human ist visiting a particular region, thus improv- resource management, particularly training ing the economic, as well as the social well- is always adopted since they deliver bottom being of communities living there. line profitability. He want further to suggest that how people are recruited, managed, ed- Review of Literature ucated, valued and rewarded, as well as how they are supported largely determines their There is a plethora of management ability to deliver quality service. mechanism all over the world with the aim to guide, regulate, monitor, and even control The role of tour guides a business. Hu & Wall (2013) posit that, these mechanisms extend to the tourism in- Reisinger & Steiner (2006) describe dustry, where tour guides, and their perfor- tour guides as information givers, a source mances are managed. Nonetheless, it is of knowledge, surrogate parent, pathfinders, good to note that there are great variations leaders, cultural brokers, and entertainers. across the world in terms of strategies that On the other hand, Chang & Tang (2011) are employed, as well as the required stand- assert that the guides assist the tourists to ards and qualification of a tour guide. Ap- understand the places they visit. Nonethe- parently, there are variations among coun- less, insists that the primary role of a tour tries on the requirements that a tour guide guide is to provide information, which is the The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 195

number one drive for professional status. In so that the tourists can reach their destina- this regard, the information is passed from tions. They ensure that the tourists are safe the guide to the tourist can break or make a to and from their destination. On the other tour. From these roles, tour guides performs hand, the animators perform a more subtle four major functions namely instrumental, function of socializing and interacting with social, interactionary, and communicative. tourists, being friendly, listening to them, In addition, Reisinger divides the guides and respecting their preferences. From their into four categories, each focusing on the function, it is evident that an animators need specific function. The four categories com- to possess certain characters in order to in- prises of originals, animators, tour leader, teract freely with the tourists. They also and professionals. need to have a wide knowledge of their destination as well as be easy going. Tour leaders, according to Chow- dhary & Prakash (2008) are a subcategory The last subcategory of the tour of tour guides, whose role is to inform tour guides is the professionals, who have im- participants, in this case the tourists, the mense knowledge in their area of expertise. broad travel-related knowledge of a particu- They perform the communication function, lar area. Traditionally, tour leaders were re- which entails transferring detailed infor- ferred to as people who manage a group mation as well as interpreting experiences, movement over a multiday tour, with the attractions and sites to tourists. Profession- duty of escorting rather informing. Nonethe- als according to Reisinger & Steiner (2006), less, this of late has changes with tour lead- have advanced training in tour guiding and ers assuming a more informative role are specialize in specific areas of tourism (Chang & Tang, 2011). Chowdhary & Pra- such as ecotourism or marine tourism. In kash, (2008) add that tour leaders are also this regard, they act as mentors, with four responsible to ensure that all the activities distinct functions. One is selecting the itin- listed in the travel itinerary are executed. In erary that suits their clientele in terms of this regard, the leaders are expected to act as what to see, and what to experience. Their mediators, and maintain good relations with second function is disseminating the correct all group members in order to perform their and precise information to the tourist. This duties with minimal resistance. is not a problem to them due to their vast knowledge in their respective fields. They According to Reisinger and Steiner also interpret what the tourists see, explain- (2006), originals are the pathfinders, who ing to clients the causative action of the ex- functions are primarily instrumental. As perience. Lastly, professionals fabricate in- their name suggests, their role is to select a formation, where they present fake infor- route, break the path, and make it accessible mation as though it were genuine. The aim

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of this is not to cheat the customers but to how to manage the stress. In this regard, entertain them. they are supposed to understand the image of the destination and be able to communi- Professional tour guides are of great cate and interpret the same to the customers importance particularly when guiding tourist with ease. Apparently, tourist perceptions in areas that are considered sensitive or be- are more susceptible to unofficial images nign. Among such forms of tourism that are than official one projected by the tour agen- rapidly advancing are nature based tourism cies. As a result, the way a tour guide be- and ecotourism. These form places more haves in their first encounter with the cus- emphasis on the negative impact on the nat- tomer will largely influence satisfaction ural environment and degradation of the nat- level of the customer (Larsen & Meged, ural habitats of the flora and fauna (Randall 2013). & Rollins, 2009). In this regard, asserts that Methodology tour guides can play a vital role by educat- ing their customers through interpretation Research Design and modeling environmentally appropriate behaviors. According to Yamada (2011), the This study was conducted using de- guide not only provide information but also scriptive methodology, where data was develop and understanding and appreciation gathered at a particular point in time with of resources and help manage the tourists’ the aim of investigating the prevailing con- impact on resources. He went further to sup- ditions. According to (Key, 1997), this de- pose that the interpretation of natural sur- sign is useful in obtaining an overall picture roundings, local culture, and cultural herit- of the respondents’ opinion at that time. age be provided to customers as well as ex- Collective case studies were used, which are plaining appropriate behaviors while visit- a holistic and in-depth investigation of spe- ing natural areas, living creatures, and cul- cific areas in the subject being studied. The tural heritage sites (Yamada, 2011). choice of this research design was that the researcher needed to have a glimpse of the Whether a professional or an original real world situation in regard to tour guid- guide is handling a customer, perception is ing. Case studies are often used to bring out critical in presenting the destination to a details from the viewpoint of participants tourist. Naturally, tour guides are cultural using various sources of data. A total of 15 brokers operation at the site of tourist desti- cases were used in this study, all drawn nation. They are supposed to be the inter- from the webpage Executive Information face between the host destination and its vis- system, Tourism Bureau, Taiwan (R.O.C). itors (Bryon, 2012). It is also evident that They are under a special section titled “The working as a tour guide can at times be Experience of Mainland China Tourists”. stressing, and it is upon the guide to know The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 197

Target Population entailed in-depth study of characters of tour operators in Taiwan. The subject of inquiry The target population for this study for the cases was the “the good qualities of a was the tour manager fraternity in Taiwan tour operator that needed in order to offer particularly those who had an experience excellent services”. I5 case studies were with the mainland China tourist. This is a used, and their selection was based on the large population bearing in mind that mil- quality of information they had in relation to lions of tourists from China visit Taiwan this research. Each case was used to unveil each year. Such tourists are attracted by var- the qualities that a good tour guides, which ious attractions ranging from culture to his- through collection of writing were posted by torical sites, museum to business, and explo- tourists from the Mainland China. The tour- ration to sport. This demonstrates how huge ists had already done their travel experience the target population was for this study. and willingly had opted to share what they felt about the Taiwan local tour managers. Sampling Validity & Reliability Since it was hard to create a sampling frame for the target population, the Validity entails the assessment of ac- sampling technique that was used was non- curacy, correctness, truthfulness, and mean- probabilistic in nature. In this regard, the re- ingfulness of the instrument used in the search used the tourists’ responses from in- study. In this research, it is true that cases ternet to form the case studies. This was ef- studies were valid since they are a replica of fective as the tourists had first hand contact exactly what happens in the real world. In with the tour operators. Both stratified and this regard, the case studies were able to ob- random sampling was used in the selection tain what they were supposed to measure. of the website to be used for the study. Reliability on the other hand demonstrates Stratified sampling ensured that only credi- the degree of consistency in the study. It is ble websites had the probability of being se- the dependability of the instrument used in lected. Random sampling on the other hand the study in order to obtain the information. ensured that all the websites had an equal By the mere fact that the website where the chance of being selected. On the other hand, case studies were obtained was credible, the the choice of 15 case studies was optimum case studies are reliable. Additionally, the sample size in relation the study. tourists expressed their sincere feeling about the tour managers without being coerced to Research Instrument do so.

Case study was the only instrument Findings that was used to collect data for this study. It The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 198

In order to offer excellent services, happy, providing them with updated and ac- there are qualities that a great tour manager curate information, as well as meeting and needs to possess. This is demonstrated from exceeding customers’ expectation. Passion the case studies as well as from previous re- for the job is another quality that the tourists search. While most of the qualities apply to on the case studies identified. In six of the a number of tour managers, some are tai- case studies, the tourists identified that the lored for specific type of tour managers de- tour managers were happy to serve and this pending on the type of work they do. From increased their experience. This is affirmed the case studies, there a number of qualities by Grosspietsch (2004), who posit that if the pinpointed by the tourists that they feel tour manager shows the passion for the job, made tour managers in Taiwan offer excel- it is likely that the perception of the tourists lent services. toward the destination will change, eventually enjoying their travel. Out of the 15 case studies used, 7 revealed that tour manager’s knowledge was The study also revealed that a good critical in offering excellent travel experi- tour manager should have patience when ence. This encompassed the knowledge of dealing with tourists. Patience ranked the destination, the products, the surround- among the best qualities, particularly when ing amenities, as well as the other factors dealing with new customers, who are not ac- that makes the tour interesting. According to customed to the culture of their destination. Mordue (2009), the knowledge of a destina- In almost all the cases, tour managers took tion enables the tour manager to plan for the their time to explain to the guests about the tour, as he is aware of the best places to take new place as well as listening to them. In the tourists. Knowledge also enables the one of the cases, the guests attests to the fact tour managers to interpret the destination’s that the tour guide tried to attend to every- attractions as well as culture. one’s plea and tried all he could to come to an understanding when he failed to satisfy The case studies also indicated that them. According to Chang & Tang (2011), professionalism was another quality that patience plays a major role particularly in an good tour managers need to possess. In six unease situation. It enables the tour manager out of the fifteen cases, the tourists were to play calm and not let personal emotion thrilled by the professionalism demonstrated interfere with the work. by the tour managers. In one case for instance, the tourists were thrilled by how the A sense of humor is another quality tour manager organized the tour, preparing from the case study that the tourists were everything for the trip from posters to maps, happy with. Most of them expressed their maps to stories. Ap & Wong (2001) posit gratitude on how their trips were humorous, that, professionalism entails making tourist where the guides introduced the sceneries The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 199

with a humorous style. Apparently, most the experience the ability to handle emergen- guest agreed that the tour managers always cies. This was clearly demonstrated in the had a smile in their face, not only when case studies. Apparently, travel is a risky dealing with them but also when dealing phenomenon and sometimes the nature of with the locals. This enabled the tourists to the tour such as rock climbing makes the ex- feel comfortable in their entire journey, ask- perience more risky. This calls for caution ing questions which they do not understand. and the ability to handle emergencies. In In addition, this assists the tour managers to one of the cases, a tourist hurt herself and communicate sensitive information without started bleeding on the right eye and fore- looking offensive. One of the clients in the head. Nonetheless, the tour manager was case study explained how the tour manager able to address the situation swiftly. This was able to tell her how to behave when en- not only pleased the other visitors but also countering certain dangers during the travel. enabled the tour manager earn respect and more business. A sense of responsibility is another quality of a good manager that the tourists Conclusion were happy about in their Taiwan visit. This is cultivated by the fact that most interna- In their quest to attract more custom- tional tourists have no knowledge of the ers as well as reap bountifully from the country of their visit. In that case, tourists ever-growing tourism industry, companies need guides and someone who will always are searching for key aspects that would sat- be there in case they need any help. This is isfy tourists. This is the case facing Taiwan evident from the case studies as many tour- as it continues to host group tourists from ists express their gratitude on the way the the Mainland China. The best thing about guides were willing to assist them. In one of Taiwan companies is that they know the po- the case, a tour manager went out of his way tential in tour managers in enhancing tourist in assisting a tourist find his lost cousin, experience while visiting a particular desti- whom he has not seen for about ten years. nation. Nonetheless, what really matters are The tourist explains how the guide made nu- the qualities that such a tour manager should merous calls and even contacted some of his possess in order to offer excellent travel ex- local friends in the quest to please the cus- perience. Several studies indicate that the tomer. This sense of responsibility not only role of tour guides is critical in linking the makes the tourists feel they are cared for, it tourists with their destination. Tour guides also makes them feel safe. serves as a source of knowledge, pathfinders, leaders, cultural brokers, entertainers, Another quality of good tour manag- and surrogate parents to the tourist. In this ers that enable them offer excellent travel regard, they must have superior qualities in

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order to be able to execute their duties effec- should be knowledgeable of what is happen- tively and efficiently. ing in the surrounding. He should also act professionally by planning, organizing, and To understand better the qualities of executing all the aspects of a tour. Equally, a great tour guide, it is good to understand the guides should be patient with the tour- the various subcategories of guide. Each ists, who take their time to learn several subcategory has its unique features and thus things in their new environment. Good the guide is expected to have the quality guides also have a sense of humor, which suitable for their role. The subcategories in- usually aid in creating a comfortable envi- clude originals, animators, tour leader, and ronment for everyone. Other qualities in- the professionals. In all the categories, what clude having a sense of responsibility, abil- really matters is that a customer’s expecta- ity to handle emergencies, and being crea- tions are met and exceeded. In this regard, tive. the case study revealed a number of qualities for a great manager. First, the guide

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Baum, T. (2007). Human resources in Chang, J. C., & Tang, C. y. (2011). touurism: Still waiting for change. Reevaluation of Taiwanese Tour Tourism management, 28 , 1383- leaders' Licence Practically and 1399. Continuation. Journal of China Tourism research, 7, 294-309. Bryon, J. (2012). Tour guides as storytellers - from selling to sharing. Scandin- Chowdhary, N., & Prakash, M. (2008). Tour avian journal of Hospitality and Guide Training in India: A Tourism, 12 (1), 27-43. comparison of approach and content with other programs. Journal of Carmody, J. (2013). Intensive tour guide teaching in travel and tourism, 8 (2- training in regional Australia: an 3), 161-203. analysis of the Savannah Guides

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Grosspietsch, M. (2004). Perceived and Randall, c., & Rollins, R. B. (2009). Visitor projected images of Rwanda: viisitor perception of the role of tour guides in and international tour operator natural areas. Journal of sustainable perspective. Tourism management, 27 , tourism, 17 (3), 357-374. 225-234. Reisinger, Y., & Steiner, C. (2006). Hu, W., & Wall, G. (2013). Tour guide Reconceptualising Interpretation: The management in hainan, China: role of tour guides in Authentic Probblem, Implications, and Tourism. Current issues on tourism, 9 Solutions. Asia Pacific Journal of (6), 481-499. Tourism Research, 18 (3), 205-219. Wang, K. C., Hsieh, A. T., & Chen, W. Y. Key, J. P. (1997). Descriptive Research. (2002). Is the tour leader an effective Retrieved December 08, 2013, from endorser for group package tour http://www.okstate.edu/ag/agedcm4h/ bronchures? Tourism management, academic/aged5980a/5980/newpage11 23 , 489-498. 0.htm Wang, K. C., Jao, P. C., Chan, H. C., & Larsen, J., & Meged, J. W. (2013). Tourist Chung, C. H. (2010). Group Package Co-producing guided Tours. Tour Leaders Intrinsic Risks. Annals Scandinavian Journal of Hospitality of Tourism Research, 37 (01), 154- and Tourism, 13 (2), 88-102. 179.

Mak, A. H., Wong, K. K., & Chang, R. C. Wong, J. Y., & Lee, W. H. (2012). Leadership (2011). Critica Macaul Issues through service: An exploratory study affecting the service quality and of the leadership style of tour leaders. professionalism of the tour guide in Tourism Management, 33 , 1112-1121. Hong Kong an. Tourism Management, 32 , 1442-1452. Yamada, N. (2011). Why Tour Guiding is important for Ecotourism: Enhancing Mordue, T. (2009). Angling in modernity: a Guiding Quality with the Ecotourism tour through society, nature and Promotion Policy in japan. Asia embodied passion. Current issues in pacific Journal of tourism research, Tourism, 12 (5-6), 529-552. 16 (2), 140-154.

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ANALYSING INNOVATION POLICY DIMENSIONS AND CONTEXTS: IN THE EMPIRICAL CASES OF TAIWAN AND SINGAPORE

Chia-Han Yang Institute of Creative Industries Design National Cheng-Kung University, Taiwan R.O.C. [email protected]

Chih-Chieh Lin * Institute of Management of Technology National Chiao-Tung University, Taiwan R.O.C. *Corresponding author: [email protected]

Grace T.R. Lin Institute of Management of Technology National Chiao-Tung University, Taiwan R.O.C. [email protected]

Abstract

Taiwan and Singapore are both relatively small countries that have transformed into successful, competitive economies and leaders in high-tech industries. National innovation systems are important in their development of a country’s economic performance. This research explores the practice of the innovation policies of Taiwan and Singapore, and focuses on supply side, environment side and demand side. In a comparative analysis of innovation performance between these two countries, Taiwanese public institutes take an active role in innovation/R&D and focus their policies on specific industries, a top-down approach, while the Singapore Gov- ernment promotes innovation by public enterprises establishments.

Keywords: Innovation policy, national innovation systems, comparative analysis, Taiwan, Sin- gapore

Introduction have grown more knowledge intensive, increasing attention has been paid to the eco- As small countries within the nomic role of innovation. The ability to in- "Asian Tiger" economies, Taiwan and Sin- novate will gain greater prominence in gapore have both been recognized for per- driving future economic growth, so the na- forming economic miracles. In recent dec- tional governments of both Taiwan and ades, as economic activities in both nations Singapore have accelerated policy efforts

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aimed at strengthening their national inno- Traditional innovation policy has vation systems. These efforts include the often focused on promoting science and introduction of broad measures to improve technological policies, which have typi- performance in areas such as research and cally believed in the science push effect in development, education, entrepreneurial the radical innovation process. The new in- activity, and knowledge flow; all of which novation environment then sets new de- are key determinants for innovative activ- mands for regional innovation policies and ity (Merges and Nelson, 1990). strategies. Therefore, innovation cannot be viewed as a property of science- or tech- Innovation as a driver of growth nology-based firms; it is the basis of com- theory is derived from the economic the- petitiveness in all types of economic activ- ory of creative destruction advanced by Jo- ities (Pekkarinen and Harmaajorpi, 2006). seph Schumpeter (1942), which states that The following discussion portrays how na- long-term economic growth is generated tional innovation policy can be evaluated by the creation of the new, and the dis- using various approaches. placement of the old, in a capitalist society. As nations achieve higher levels of Numerous system perspectives on gross domestic product per person, the innovation performance have been used to main source of this change becomes inno- examine the classification and role of in- vation. . novation policies. Rothwell and Zegveld (1981) developed a comprehensive classi- Recognizing the relationship be- fication system for innovation policy em- tween innovation and economic perfor- ployment, in which they grouped innova- mance, we can then separately explore tion policy tools into supply-side, demand- how genuine innovation-related factors side, and environmental-side. Supply-side drive the competitiveness of these two tools are those that provide the basic re- small, but relatively fast-growing, econo- sources for innovation, such as provision mies. This paper is devoted to the task of of financial, manpower and technology as- assessing and analyzing the innovation sistance, including educational institutions policies of Taiwan and Singapore, high- or universities, trained technicians, infor- lighting their specific strengths and weak- mation networks, and technical advice. In nesses, and their effectiveness in the spe- addition, they include direct innovation by cific economic and institutional context in government-owned agencies and state in- which they operate, with a core focus on dustries, as well as research directly sup- national innovation systems. The existing ported by government funds, such as re- literature related to these systems primarily search grants. Environmental-side tools emphasizes the active role played by gov- regulate the operating environment of ernment policy and specific institutions, firms, and include the means by which the including the university system (Nelson government impacts the financial aspect of and Rosenberg, 1994), the extent of intel- innovation. This classification also in- lectual policy protection (Merges and Nel- cludes not only the legal environment in son, 1990), and the evolution of the indus- which firms operate, but also the legal en- trial research and development (R&D) or- vironment for innovation. Demand-side ganization (Mowery, 1984). tools have an effect on the stimulation of invention by the demand for new products Literature Review and services created by public spending and public services. These also include the Innovation Policy stimulation or suppression of innovation by regulation of demand from overseas, The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 204

and the ability of overseas competitors to Importantly, inter-firm collaboration and operate in the national market. inter-organizational learning are central to the innovation process (Roper, 2000). This paper uses the policy analysis denotations originally derived from Roth- In consideration of the discussion well and Zegveld (l981) as a guideline in above, the revised innovation policy as- facilitating a more insightful national inno- sessment model of general roles for each vation policy assessment. The reason we grouping is depicted in Table 1. chose this framework as an analysis base is that it rests on the premise that understand- National Innovation Systems ing the links between the policy actors involved in innovation is the key to improv- The concept of national innovation ing technology performance (Shyu and systems (NIS) can be traced back to the Chiu, 2002). Furthermore, it is more feasi- mid-1980s in the context of debates in- ble and applicable than other indicator sys- volved in industrial policy in Europe. One tems, from the perspective of comparabil- of the notable antecedents of the concept ity and comprehensiveness. of NIS is Christopher Freeman (1982). Since then, an international body of litera- However, we believe that the pol- ture has documented the growing influence icy field of promoting network and entre- of the NIS approach (Sharif, 2006). preneurship on the supply side may be a missing link in the innovation policy as- The concept of NIS can be per- sessment framework first proposed by ceived as a historical grown subsystem of Rothwell and Zegveld (1981). Frenken the national economy, in which various or- (2000) contended that successful innova- ganizations and institutions interact with, tion depends on complementary competen- and influence, one another in carrying out cies in networks of producers, users, and innovative activity and generating innova- governmental bodies. Moreover, networks tion performance. The NIS approach im- have become understood as important or- plies that innovative activity encompasses ganizational forms for coordinating the ef- the input processes of R&D efforts by pri- forts of heterogeneous actors without re- vate and public sectors, as well as the de- stricting their individual goals. More spe- terminants influencing national technologi- cifically, technological incubators have as- cal capabilities, for instance, learning pro- sumed a growing role in R&D research cesses, incentive mechanisms or the avail- and innovation management, and their im- ability of skilled labor (Nelson and Rosen- portance has not escaped the attention of berg, 1993; Balzat and Hanusch, 2004). researchers (Lumpkin and Ireland, 1988; Therefore, the NIS approach focuses on Mian, 1996). Science parks, such as tech- the analysis of nationwide structures of in- nology incubators, are property-based ini- novation activities, their institutional deter- tiatives designed to provide a conducive minants, and their economic effects (Bal- environment in which high-tech businesses zat and Pyka, 2006). can be established and can develop (Roper, 2000). Venture capital funds provide not Lundvall et al. (2002) indicated only capital, but also management assis- that the NIS concept provides a new per- tance; once the enterprise has become a spective from which to examine a coun- success, they sell off their holding in the try's innovation processes through differ- company to make a profit. Support of this ent types of policy. A wide set of policies, is somewhat beneficial for entrepreneur- including labor market policy, education ship promotion (Tsai and Wang, 2005). The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 205

policy, industrial policy, energy policy, en- through investment, such as the Statute for vironmental policy, and science and tech- Encouragement of Investment in 1960. In nology policy, affect a country's compe- addition, the Statute for Establishment and tence-building. Moreover, a systematic Management of Export Processing Zones analysis of comparative studies of different (l965), and the Statute for Establishment NIS helps to obtain a critical understand- and Management of Science-Based Indus- ing of the limits and the benefits of spe- trial Parks (l979), created the two most cific national policy strategies (Edquist significant areas for Taiwan's industrial and Lundvall, 1993; Lundvall et al., 2002). development; export processing zones (EPZ) and the Hsinchu Science-based In- Assessing National Innovation Policy dustrial Park. Taiwan's venture capital (VC) has made a particular impact on Supply-Side of Innovation Policy. those in the emerging industries, and the government has established many VC as- Taiwan. sociations, in addition to offering financial support to investors (Tsai and Wang, Five Taiwanese state-owned enter- 2005). We can see that the role of govern- prises have been established to meet the ment as a direct provider (as opposed to strategic and tactical needs of the govern- facilitator) is emphasized. Examples are ment and to protect certain industries by the establishment of the Industrial Tech- the construction of large-scale businesses, nology Research Institute (ITRI), the through direct operation of upstream, Technological Information Center, and the heavy industry, which the private sector National Science Council, which conduct was unable or unwilling to undertake (No- research on a large scale and undertake lan and Wang, 1999). The Taiwanese gov- studies into the feasibility of industrializ- ernment is attempting to make these more ing new technology. From the late 1980s competitive through privatization, but this through the early 1990s, the government has yet to materialize. directed a considerable number of innovation alliances in the areas of notebook To encourage entrepreneurship, the computers, high-definition televisions, fax Taiwanese government adopted an incuba- and communications equipment, etc., in tor tool, foreign direct investment (FDI), order to promote industrial upgrading in and deregulation. Since 1996, the Small Taiwan, working through research institu- and Medium Enterprise Administration tions. (Tsai and Wang, 2005). (SMEA) of Taiwan has continued to promote the establishment of incubators, The Taiwanese government fo- through the use of financial support availa- cused on providing the tools of innovation, ble from the Small and Medium Enterprise that is, technically educated students, as Development Fund for office equipment, well as government-funded research, train- personnel, and related costs. The inflow of ing, and information. However, Shyu FDI has also helped to establish small and (2006) criticized the approach in stating medium enterprises SMEs in Taiwan. that the needs of industry are not always Those multinational companies (MNCs) served by the supply policy system; this is not only introduced advanced technology the result of the separation of education, to the industry, but also created a center- industry, and government, as well as the satellite manufacturing model to shape a political nature of such a government-fo- supply chain. Taiwan's government prom- cused system. ulgated several laws to encourage nationals to become involved in business affairs The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 206

Singapore. the Advanced Materials Research Centre and the Gintic Institute of Manufacturing Public enterprises in Singapore’s Technology. Its strategic outlook on R&D Government of Singapore Investment activities exhibits an even more applied Corp and Temasek Holdings were estab- orientation, closer to the innovation seg- lished by the government to control or moment of product improvement (Nanyang nopolize several strategic industries. Over Technological University, 1996). This as- time, the statutory boards not only became sessment also holds for Singapore's four major actors in the economy, but also polytechnics, which are engaged in the formed subsidiary companies to add flexi- promotion of R&D activities on a minor bility to their own operations. These sub- scale (Ebner, 2004). sidiaries, such as, Jurong Town Corp., attracted corporate investment by offering These state universities were given funds and the promise of cooperation from greater autonomy to be competitive in the government departments to ensure that the fast-emerging educational services sector corporations transferred proprietary tech- of Singapore, and added to their traditional nology and training to Singapore. roles of training scientific, engineering, and managerial manpower in new ways to The Singapore government has form and incubate university spin-off firms gone one step further by building more sci- since autonomy’s inception in 1992, while ence parks (Tuas Biomedical Park, One- the Innovation and Technology Transfer North Science Habitat), a city within a city Office at Nanyang Technological Univer- (the Biopolis), and clusters (Communica- sity is currently incubating numerous high- tion and Media), in order to be on the cut- tech start-ups. ting edge of technology. These science parks specifically catered to the unique re- The Singapore government estab- search needs of advanced technology and lished the Ministry of Information, Com- new business models to create value. munication and Arts to develop a comprehensive infrastructure and manpower to The country's competitiveness is boost the economy. In the 10-year master propped up by a strong focus on education, of information and communication (info- providing highly skilled individuals for the comm) industry plan (iN2015), the city- workforce. The National University of state aims to become "An intelligent na- Singapore is not only the leading academic tion, a global city, powered by infocomm". organization in higher education, it is also The infrastructure and manpower of info- a decisive player in university-industry comm was intended to speed up economic collaboration on applied R&D. It provides growth and set Singaporean businesses a campus location for regionally outstand- apart from others by encouraging ideas ing research institutes, such as the Institute and creativity, building brands to foster for Microelectronics, pointing to a re- growth of global talents and expertise search focus on information and communi- based on iN2015. cation technology and microelectronics, as well as life sciences. These institutes co- The main differences in supply- operate with multinational enterprises and side innovation policy between Taiwan international research partners, and range and Singapore are shown in Table 2. from contract research to mutual agreements of understanding. The second major Environmental-Side of Innovation Policy. academic player is Nanyang Technological University, with research institutes such as The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 207

Taiwan. to attract MNCs to the island state to produce goods for global export markets. In Taiwan, the government encour- Great efforts were consistently made to at- ages R&D by exempting companies from tract MNCs and invest in education and import duties on instruments and equip- skills training, as well as encourage tech- ment for experiments. In addition, equip- nology diffusion from MNCs to the local ment with a life of longer than 2 years can economy, in the early post-independence adopt a 2-year accelerated depreciation, years. Tax incentives were given for man- and expenditures of 15-20% can be busi- ufacturing companies that undertook R&D ness income tax-deductible (Shyu and in Singapore. Chiu, 2002). The Ministry of Economic Affairs also took action in promoting tradi- Singapore is one of the most effi- tional industries' technology capacity with cient financial markets in Asia. Its open "Rules of encouragement for the private and flexible financial environment has at- sector's development of new products" and tracted many giant MNCs, such that they the "Law governing development for di- have established their offices in that coun- rective new products" (Shyu and Chiu, try, and the pro-business environment also 2002). In addition, a subsidy for the R&D gives support to domestic SMEs. Singa- activities of high-tech companies located pore also has put in place a regulatory en- in science-based industrial parks was of- vironment that is broadly supportive of in- fered by the Taiwanese government (Tsai novation. For example, the Bioethics Ad- and Wang, 2005). visory Committee was formed in 2001, at the time of the US stem cell controversy, Changes were made to address the to develop recommendations on the legal, weaknesses in patent enforcement and ethical, and social issues of human biology prosecution through the integration of the research (Finegold, Wong and Cheah, Taiwan Intellectual Property Office into 2004). This early and clear legal support the NIS administration structure, whereby for stem-cell research, plus government fi- Taiwanese laws and regulations include nancial support, has helped Singapore cre- the Patent Act, Integrated Circuit Layout, ate several stem-cell companies. Copyright Act, Trade Secrets Act, etc. Alt- hough most of Taiwan's companies are The Singapore government allows small and medium-sized enterprises, the for tax benefits, grants, and training subsi- country’s competition law, the Fair Trade dies to raise productivity by upgrading Law, does not emphasize mergers and ac- skills and supporting enterprise invest- quisitions. Rather, it focuses on preventing ments in innovation in each of six qualify- cartels, monopolies, limited competition ing activities: R&D, IP registration, IP ac- and other behaviors hindering fair compe- quisition, design activities, automation tition. through technology or software, and training for employees. Singapore. The main differences in environ- The first formal science and tech- mental-side innovation policy between nology plan of Singapore was imple- Taiwan and Singapore are shown in Table mented only as recently as 1991, and had a 3. greater focus on the establishment of investment environment. In the early years of independence, Singapore's strategy was

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Demand-Side of Innovation Policy. United States). Singapore's FTAs have been instrumental in helping Singapore- Taiwan. based businesses strengthen cross-border trade by eliminating or reducing import Taiwan uses government procure- tariff rates, providing preferential access to ment as one of the most important sources services sectors, easing investment rules, of technological development, especially improving IP regulations, and opening weapons systems procurement (Tien and government procurement opportunities. Yang, 2005), although it faces a predica- ment in this respect. To comply with the There are no significant exchange Agreement on Government Procurement controls, and funds may be freely remitted of the World Trade Organization (WTO), into and out of the country. There is also Taiwan's government procurement law no restriction on the repatriation of profits. was legislated in 1999 and aims to clarify Subject only to tax liabilities, a company procurement information, complete pro- incorporated in Singapore may pay divi- curement evaluation, and internationalize dends to foreigners not residing in Singa- the procurement market. Since then, the pore. most advantageous tendering method has been adopted as a major legitimate con- The main differences of demand- tract award mechanism, instead of the low- side innovation policy between Taiwan est-bid tendering method (Tzeng, Li and and Singapore are shown in Table 4. Chang, 2006). How National Innovation Policy Affects Singapore. Development: Taiwan and Singapore

The bulk of government procure- From a systematic perspective, in- ment activities in Singapore are decentral- novation policy can affect a country's in- ized to individual ministries, departments, novation performance and competence- and statutory boards that make their own building. The capability to innovate and to arrangements. However, they must adhere bring innovation to market successfully to central guidelines issued by the Ministry will be a crucial determinant of the global of Finance. Centralized purchasing is car- competitiveness of nations. Most policy- ried out for common goods and services, makers are aware that innovative activity which are consumed service-wide by cen- is a primary driver of economic progress tral procuring entities, such as the Ex- and well-being, as well as a potential fac- penditure and Procurement Policies Unit tor in meeting global challenges in do- of the Ministry of Finance, the Ministry of mains such as the environment and health. Defense, and the Infocomm Development Authority. The Singapore government has As small island economies, both adopted the fundamental principles of fair- Taiwan and Singapore have achieved high ness, openness, and competitiveness for its economic growth rates in the past, while procurement policies. being competitive in science, technology, and innovation. The current innovation Since the signing of its first free policies of the Taiwanese government con- trade agreement (FTA) under the ASEAN centrate on supply-side policy. Con- free trade area in 1993, Singapore has ex- versely, the government of Singapore has panded to cover 18 regional and bilateral refocused its innovation policy from pro- FTAs with 24 trading partners (China, Ja- moting traditional innovative activities to pan, Korea, the ASEAN, India and the The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 209

attracting FDI and growing certain indus- advanced technology, such as in that of the trial clusters, such as the biomedical and biomedical, infocomm and media indus- infocomm industry, from environmental- tries. These industries will upgrade the do- to supply-side. mestic manufacturers and will also reinforce the strength of infrastructure in Sin- Governmental attitudes toward pro- gapore. moting national innovation capacity play a key role in determining the observed dif- Overall, as part of its innovation ferences (OECD, 2007). First, in Singa- policy, Taiwan's government has invested pore, the aggressive education policies and significant amounts in research institutions huge budget for the overall education sys- and selected universities, and has also tem provide abundant research manpower funded selected firms; these funds are typi- and great competitiveness for domestic cally used to develop one industry or tech- and MNCs. The incentive of tax and envi- nical area that is viewed as having signifi- ronment for foreign talents encourages the cant growth potential. The Taiwanese gov- development of excellent human resources ernment has chosen to develop high-tech- for businesses (Anwar, 2008). Every year, nology industries (Tsai and Wang, 2005). Singapore spends approximately 20% of In order to compete in these industries and its national budget on establishing its edu- to enter new segments, high levels of inno- cation system. The budget for education vation have been vital. Focusing on a few covers primary and higher education, oc- sectors serves to concentrate scarce re- cupational education, and on-the-job train- sources on priority areas (Habaradas, ing. Well-trained individuals, not only in 2008). This core concentration on innova- science and technology, are one of the tion has resulted in a strong innovation main reasons why many MNCs have performance, as shown by the number of moved to Singapore. Moreover, these triadic patent families. The results of this MNCs have brought advanced knowledge innovation policy focus can be observed in and experience to the local landscape, and constant patent growth, as well as in very have created a positive cycle that encour- strong cluster formation and in national ages a greater number of knowledge work- development exhibited by long-term in- ers and well-developed facilities (Anwar, dustrial growth. 2008). The government considers entrepreneurship to be a key driver of its economic Conclusion and Policy Implications growth and it has launched policies that aim to implant an innovative and risk-tak- Variation in innovation policy ing spirit in school education and encour- shows the differences and similarities in age students to start businesses. Singapore and Taiwan in terms of public enterprises, education, and information. Singapore has adhered to a series Taiwanese innovation policy places a of policies that successfully constructed greater emphasis on the development of many notable clusters decades ago. These innovation by research institutes and clusters once contributed to increased ex- through universities. Taiwanese public in- port, and helped Singapore evolve from a stitutes have taken an active role in inno- small harbor city into an innovation-driven vation/R&D and have focused policies on country. The tax incentives and reliable in- specific industries, using a top-down ap- frastructure are the main reasons for creat- proach. The Singapore government pro- ing clusters (Parayil, 2005). The Singapore motes innovation by public enterprises es- government now has a base of successful tablishments, where large and wealthy experience and is turning its efforts toward The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 210

holding companies directly control spe- large FDI and specific grants, as well as cific industries and define the path of inno- tax holidays toward certain industry and vation development. innovation activities. As a result of efficiency and openness, Singapore has bene- In terms of education policy, Sin- fited from the presence of foreign MNCs, gapore puts more resources into education which bring in capital, technology, man- and training than Taiwan. We can find a agement know-how, and access to world variety of education and training programs export markets. Singapore also works with that are provided by the Singapore govern- like-minded countries within international ment. With regard to information infra- and regional organizations to encourage structure, Singapore has made the con- free trade. struction of the infocomm industry of national importance. The iN2015 plan also In demand-side policy, the Taiwan- shows Singapore's ambition to be a leader ese government has emphasized the use of in information infrastructure. Taiwan's "In- government procurement and industrial telligent Taiwan" also aims to increase the cooperation policies to acquire advanced strength of information infrastructure and technologies, such as aerospace technol- industry. ogy, military technology, transportation technology, etc., which established the In environmental-side policy, Sin- foundation of the high-tech industry in gapore has a more competitive and wide- Taiwan (Industrial Technology Research ranging benefits package, while Taiwan Institute, 2005). Trade shows have also has established science parks and clusters been of importance in bringing together that provide financial and tax holidays to key customers and manufacturers. The de- specific industries. The most important di- mand-side policy for Taiwan is mainly rect subsidies in Taiwan are in the form of from the domestic market, whereas Singa- tax incentives. In Singapore, the effects of pore benefits more from regional and environmental-side policy can be found in global integration.

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Ebner, A. (2004) Innovation policies and Lin, C.Y. (1973), Industrialization in Tai- locational competitiveness: Les- wan, 1946-1972: Trade and Import sons from Singapore, Asian Jour- Substitution Policies for Develop- nal of Technology Innovation , ing Countries , New York: Praeger. 12(2), 47-66. Lumpkin, J.R., Ireland, D.R. (1988) Edquist, C, Lundvall, B.A. (1993) Com- Screening practices of new busi- paring the Danish and Swedish ness incubators: The evaluation of Systems of Innovation’ in National critical success factors, American Innovation Systems: a Compara- Journal of Small Business , 12(4), tive Analysis , ed, R.R, Nelson, 59–81. New York: Oxford University Press, 265-298. Lundvall, B.A., Bjorn, J., Andersen, E.S. and Dalum, B. (2002) National sys- Frenken, K. (2000) A complexity approach tems of production, innovation and to innovation networks: The case competence building, Research of the aircraft industry 1909–1997, Policy , 31(2), 213–231. Research Policy , 29(2), 257–272. Merges, R. P., Nelson, R.R. (1990) On the Habaradas, R.B (2008) Strengthening the complex economics of patent national innovation system (NIS) scope, Columbia Law Review , of the Philippines: Lessons from 90(4), 839-916. Malaysia and Thailand, Asian Journal of Technology Innovation , Mian, S.A. (1996) Assessing value-added 16(1), 1-22. contributions of university technology business incubators to tenant Hsiao, C.T., Chang, P.L., Chen, C.W. and firms, Research Policy , 25(3), 325- Huang, H.H. (2011) A systems 335. view for the high-tech industry development: a case study of large- Mowery, D.C. (1984) Firm structure, gov- area TFT-LCD industry in Taiwan, ernment policy, and the organiza- Asian Journal of Technology Inno- tion of industrial research: Great vation , 19(1), 117-132. Britain and the United States, 1900-1950, Business History Re- Industrial Technology Research Institute. view , 58(4), 504-531. (2005) Establishing new high-tech industries, Industrial Technology Nelson, R. R., Rosenberg, N. (1994) Research Institute. American universities and technical advance in industry, Research Kang, C.C., Feng, C.M. and Lo, W.S. Policy , 23(3), 323-348. (2007) Analysis of self-liquidation ratio and financial resource alloca- Nelson, R.R., Rosenberg, N. (1993) Tech- tion for BOT projects with uncer- nical innovation and national sys- tain finance environment, Journal tems, in National innovation sys- of Management and Systems , tems: A comparative analysis , ed. 14(3), 359-386. R.R. Nelson, New York: Oxford University Press, 3-21.

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Nolan, P., Wang, X. (1999) Beyond pri- Tien, M.C., Yang, C.C. (2005) Taiwan’s vatization: institutional innovation ICP mechanism – a review and a and growth in China’s large state- stage approach, Technological owned enterprises, World Develop- Forecasting and Social Change , ment , 27(1), 169–200. 72(1), 29–48.

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Parayil, G (2005) From "Silicon Island" to Tzeng, W.L., Li, J.C.C. and Chang, T.Y. "Biopolis of Asia": Innovation Pol- (2006) A study on the effectiveness icy and Shining Competitive Strat- of the most advantageous tendering egy in Singapore, California Man- method in the public works of Tai- agement Review , 47(2), 50-73. wan, International Journal of Pro- ject Management , 24(5), 431-437. Pekkarinen, S., Harmaakorpi, V. (2006) Building regional networks: The definition of an age business core process in a regional innovation system, Regional Studies , 40(4), 401–413.

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Table 1. A More Complete innovation Policy Analysis Model

Grouping Policy tools Examples Supply side Public enter- Innovation by publicly owned industries, setting up of new prise industries, pioneering use of new techniques by public corporations, participation in private enterprise Network and Supporting start-ups, establishing science parks and incuba- entrepreneur- tors, encouraging collaboration between firms and institu- ship tions, venture capital associations, measures to promote entrepreneurship Scientific and Research laboratories, support for research associations, technical learned societies, professional associations, research grants Education General education, universities, technical education, appren- ticeship schemes, continuing and further education, retraining Information Information networks and centers, libraries, advisory and constancy services, databases, liaison services Environmental Financial Grants, loans, subsidies, financial sharing arrangements, pro- Side vision of equipment, buildings, or services, loan guarantees, export credits, etc. Taxation Company, personal, indirect and payroll taxation, allowances Legal and Patents, environmental and health regulations, inspectorates, Regulatory monopoly regulations Political Planning, regional policies, honors or awards for innovation, encouragement of mergers or joint consortia, public consulta- tion Demand Side Procurement Central or local government purchases and contracts, public corporations, R&D contracts, prototype purchases Public services Purchases, maintenance, supervision and innovation in health services, public building, construction, transport, telecommu- nications Commercial Trade agreements, tariffs, currency regulations Overseas agent Defense sales organizations Source: Adapted from Shyu & Chiu, Innovation Policy for Developing Taiwan's Competitive Ad- vantages (2002), based on Rothwell and Zegveld (1981).

Table 2. Comparison of supply-side policies between Taiwan and Singapore

Singapore Taiwan Public Enterprise Several giant holdings companies Five state-owned enterprises Commanding state-owned enterprises Traditional manufacturer directly or indirectly involved in technology and science Engaged in banking, investment, real R&D activities that focus on product estate, land, infocomm, biomedical and development and basic science re- other advanced industries search Network and Listed in national economic plan Innovation alliances Entrepreneurship Social and cultural side reform Incubator establishment Innovation Voucher Scheme Setting up of venture capital associations Incubator Development Program Scientific and Four major clusters Industry and research conferences The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 214

Technical The Agency for Science, Technology Support for university research and Research (A * STAR) Spearhead in biomedical and infocomm Establishment of research institutes industry University research grants Education Autonomy of universities Government training Enhance entrepreneurship education in Development plan for world-class campus universities and development of research centers of excellence Information iN2015 master plan Enhance linkage between national institutes and businesses Infocomm Development Authority of Intelligent Taiwan project within i- Singapore develops policies to ensure Taiwan 12 projects the growth of an innovative and competitive Infocomm sector

Table 3. Comparison of environmental-side policies between Taiwan and Singapore

Singapore Taiwan Financial Various loans on machinery, factories, Loan subsidies working capital, ventures abroad Grants for incubators and start-ups Grants for incubators Subsidies for finns Located in Sci- ence Parks Development fund Research facilities Taxation Benefits for small-to-midsize compa- R&D equipment/expenditure tax al- nies starting up leviation Startups that meet certain qualifying Tax relief for training conditions can claim for tax exemption under the Tax Exemption For Start-ups scheme Capital gains taxes are generally 0% Tax incentives and export processing zones for attracting foreign direct investment Legal and regula- Strict IP protection system Patent and copyright acts tory Centralized IP management Fair Trade Law focusing on preventing cartels and monopolies Political High business costs of terrorism Visa restrictions (negative effect) Maintain balance of power Technology export restrictions (negative effect) Independent foreign policy

Table 4. Comparison of demand-side policies between Singapore and Taiwan

Singapore Taiwan Procurement Contracts and tenders worth around Government procurement and indus- S$10 billion each year trial cooperation Decentralized government procurement Build-operate-transfer The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 215

system Government R&D service contract Central guidelines issued by Ministry of Finance Public service Jurong Town Corporate Science Parks in Hsinchu, Taichung and Neihu, and Nangang Singapore Science Park Commercial No significant exchange controls Reduced foreign exchange controls 18 regional and bilateral free trade Access to multilateral trade organi- agreements (FTAs) zations, such as the World Trade Or- ganization (WTO) Overseas agent Member of WTO, Association of Participates in regional trade organi- Southeast Asian Nations, Asia-Pacific zations, such as APEC Economic Cooperation (APEC), and other international groups Signed the FTA with Panama and Guatemala

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TESTING THE ISCST3 MODEL ON AIR POLLUTION FROM ROAD VEHICLES IN TAOYUAN, TAIWAN

Chih-Rung Chen Yii-Der You* Kai-Min Wang

Graduate Institute of Environmental Engineering, National Taiwan University, Taiwan, ROC * Corresponding author: [email protected]

Abstract

The purpose of this study was to examine the performance of USEPA nonreactive Gaussian air quality dispersion model, the Industrial Source Complex Short-Term Model (ISCST3), in simulating roadside air pollution concentrations on daily and vacation traffic flow in Taoyuan, Taiwan. Air pollution produced from diesel vehicle in the urban area, including CO,

NO x, PM 10 , PM 2.5 , and SO 2 was simulated its dispersion. Emission factors for different diesel vehicles were estimated by using MOBILE6.2. The ISCST3 simulation was performed to predict the spatial distribution of air pollutants from mobile sources for daily and vacation traffic flow. The emission rates were different from various mobile vehicles. Finally, the concentration of five air pollutants was successfully simulated and presented as dispersion map.

The highest concentration of CO, NO x, PM 10 , PM 2.5 , and SO x on daily traffic flow is 0.0287 ppm, 21.9 ppb, 0.849 µg/m 3, 0.18 µg/m 3, and 0.404 ppb, respectively; on vacation traffic flow is 0.0195 ppm, 15.5 ppb, 0.555 µg/m 3, 0.117 µg/m 3, and 0.267 ppb, respectively. In addition, the concentration of five pollutants on daily traffic flow was all higher than that on vacation traffic flow. Distribution of air pollutants also indicated that the traffic flow of diesel vehicles would significantly affect the dispersion of pollutants. Therefore, strategies for air pollution control in urban area will of necessity need to focus on the vehicle sources.

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Keywords: ISCST3; MOBILE 6.2; Simulation, Diesel mobile, Air pollution

Introduction pollution produced form diesel vehicle contributes to risks of morbidity and mor- Road traffic is one of the most im- tality for divers, commuters, and individu- portant sources of air pollution in urban ar- als living near roadways (Zhang, et.al. eas and mega cities. Rapid growing of 2013). Therefore, it is essential to investi- road transportation and motor vehicles de- gate the distribution of air pollution pro- teriorate the severity of air quality in urban duced from diesel mobile in the urban area. Air pollution has been known that se- area. riously impacts on human health and welfare. The UK National Atmospheric Emis- A theoretical modeling exercise on a sion Inventory also reported that road traf- study of air pollution dispersion and pre- fic is the largest emission source of many diction show that traffic emissions make a health-related air pollutants, such as car- great contribution of air pollution. When bon monoxide (CO), nitrogen oxides calibrated appropriately, the prediction

(NO x), benzene, and PM 10 , some of which model can be served as a useful tool for in- contribute to the formation of ozone and direct estimation of air pollution levels and secondary air pollution (Chen, et al 2008). hence human exposure (Chen, et al 2008). The Motor Vehicle Emissions Factor On the other hand, diesel vehicle is Model version 6.2 (MOBILE6.2) and In- the most trustworthy power source in the dustrial Source Complex Short- Time transportation because of its high heat ef- Model (ISCST3) have been widely applied fectiveness and energy saving. The appli- to simulate or predict the dispersion and cation of diesel vehicle is widely increased concentration of various air pollutants, in the transportation, such as motor bus such as CO, NO x, PM 2.5 and dioxins and trucks. Since petroleum diesel consists (Lorber, et.al. 2000), (Banerjee, et.al. of blends of hundreds of different chemi- 2011). cals of varying hydrocarbon chains, many of these are hazardous and toxic (Ali, et.al. The objective of this study was to use 2013). Carbon monoxide, nitrogen oxides, current EPA guidance on the use of sulfur oxides, and particulates that are gen- ISCST3 for air pollution dispersion model- erally produced during diesel combustion. ing and simulate the dispersion of air pol- Black smog discharged by diesel vehicle is lution produced from diesel vehicle in the also the obvious pollution which causes urban area, including CO, NO x, PM 10 , the degradation of air quality level and the PM 2.5 , and SO 2. increase of detestation in the observation.

In addition, past studies confirmed that air The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 218

Modeling procedures point is:

MOBILE6.2 modeling   2  QKVD  1  y   C()x, y = exp −    Emission factors for different diesel 2πρ x ρ yU s 2  ρ y    vehicles were estimated by using MO- BILE6.2 which is a widely used regulatory where C( x,y) = the concentration (µg/m 3) emission model that estimates emission of at distance x (m) downwind and y (m)

HC, CO, NO x, PM, and other toxic air pol- crosswind from the source; Q = source lutants (Pierce et.al. 2008). Several im- strength or average emission rate (µg/m s);

portant traffic-related items are taken into ρx and ρy = the standard deviation of lateral account in the MOBILE6.2 modeling, in- and vertical concentration distribution; and

cluding vehicle classification, emission Us = average wind speed at effective type classification, roadway classification, height (m/s). The model is relative to aver- and pollutant categories (EPA 2003). Be- age steady-state pollutant concentrations, sides, Cook et al. (2006) also provides a wind speed, effective stack height, and at- description of several key inputs required mospheric conditions. In addition, there to exercise MOBILE6.2. A list of MO- are some assumptions assumed for the BILE6.2 input parameters for this study is modeling work: (1) rate of emission from provided as Table 1. The input data as ve- the source is constant for minimum aver- hicle age distribution, ratio of diesel vehi- age period; (2) wind speed is constant both cle, and average trip length were shown as in time and elevation; (3) pollutant is con- Supplemental Tables 1-4. servative and not subject to decay and chemical reaction; (4) terrain is relatively ISCSI3 modeling flat (Banerjee, et.al. 2011). ISCST3 is the United States Environ- The ISCST3 model requires input mental Protection Agency’s (USEPA) non- data relating to emission source location, reactive Gaussian air quality dispersion source emission characteristics, prevailing model which plays an important role for meteorological conditions, and receptor the forecasting of ground level of air pollu- network. The model also requires hourly tants. Principally, the ISCST3 dispersion meteorological data including date, time, model is based on the Gaussian streamline wind speed (m/s), wind direction (degree), theory which assumes that air pollutants ground air temperature (K), stability class, discharged continuously from sources are and mixing height (m). The basic exhaust undergone the process of diffusion, dilu- emission rate factors for different vehicles tion, deposition, etc., and then get in the were calculated from MOBILE6.2. steady state in the atmosphere (Goyal et.al. 2007). The ISCST3 model for continuous sources can be expressed as from a source The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 219

Table 1. Summary of MOBILE6.2 input parameters.

Input Parameter Input Item Remark Max Min

Temperature 31.60 °C 28.5 °C July, 2010

Absolute Humidity 128 grains/lb July, 2010

Cloud Cover 0.2 July, 2010

Sunrise/Sunset AM 5:00 PM 6:00 July, 2010

Reid Vapor Pressure 8.9 psi National criterion

Sulfur Content of 42.50 ppm National criterion Gasoline

Sulfur Content of 294 ppm National criterion Diesel Fuel

Methyl Tertiary-Butyl Ether, MTBE: 0.50 Ethyl Tertiary-Butyl Ether, ETBE: 0.05 Oxygenated Fuels Estimated values Tertiary-Amyl Methyl Ether, TAME: 0.45 Diisopropyl Ether, DIPE: 0.00

Vehicle Age As shown in Supplemental Table 1 - Distribution

Ratio of Diesel Vehicle As shown in Supplemental Table 2 &3 -

Average Trip Length As shown in Supplemental Table 4 -

Vehicle Miles Traveled Default - by Hour

Weekday Trip Length 10%, 25.2%, 26.1%, 16.6%, 11.4%, 10.6% - Distribution

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Table 2. Input source for simulation

Input Input Data for Simulation Case Case A The monitored data and daily traffic flow in 2010 Case B The monitored data and vacation traffic flow in 2010

Table 3. The highest concentration of pollutant by simulation.

Air pollutant CO NO x PM 10 PM 2.5 SO 2 Unit ppm ppb µg/m 3 µg/m 3 ppb Highest concentration Case A 0.0287 21.9 0.849 0.180 0.404 Case B 0.0195 15.5 0.555 0.117 0.267

In order to developed emission inven- distribution of air pollutants from mo- tory, the mobile pollution sources lo- bile sources for daily (Case A) and va- cated in Taoyuan County in Taiwan cation (Case B) traffic flow. The model were considered for this study. A total predictions were carried out for 24 h study area of 50,000 m × 70,000 m averaging time. The input data was di- was selected having center point inside vided into two cases as Table 2. Taoyuan County. Further, the area was subdivided into smaller grids (1,000 m Results and Discussion × 1,000 m). The ISCST3 simulation was performed to predict the spatial

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Emission rate factors of different rate was gradually decreasing with the pollutants increasing of speed to about 85 km/hr and then was rapidly increasing with The emission rate factors of the increasing of speed. The CO emis- different pollutants from diesel vehi- sion rates of other diesel vehicles were cles were estimated by MOBILE6.2 slightly decreasing with the increase of model in the speed range of 20 to 100 speed but almost constant at high km/hr with the distance interval of 5 speed. However, the high level emis- km. By taking into consideration the sion rate of CO means that the com- speed limit of various road, vehicles bustion is inefficient or incomplete. classification, vehicles age, etc., the es- The NO x emission rates of various die- timated emission rates of 6 air pollu- sel vehicles was slightly decreasing tants (PM 10 , PM 2.5 , CO, NO x, SO x, and and then increasing with the increasing VOC) were shown as Figure 1. Six in- of speed, and motorcycles were gradu- dividual classes of vehicles were also ally increasing with the increasing of simulated by MOBILE6.2, including speed. HDDV8a had highest NO x Light -- Duty Diesel Trucks 3 and 4 emission rates, and the emission rates (LDDT34), Class 5 Heavy - Duty Die- of 6 vehicles followed the order of sel Vehicles (HDDV5), Class 8a Heavy HDDV8a > MC2C > MC4C > - Duty Diesel Vehicles (HDDV8a), LDDT34 > HDDV5 > HDDBT. Diesel Transit and Urban Buses In general, NO x produces when (HDDBT), Two Stroke Motorcycles combustion occurs at very high tem- (MC2C), and Four Stroke Motorcycles perature which also confirms that vehi- (MC4C). cles have higher NO x emission at

From the estimated results, emis- higher speed. The SO x emission rates sion rates of PM 10 and PM 2.5 from 6 of all vehicles were all constant at dif- vehicles were constant at different ferent speed, and then in the order of speed followed the order of HDDV5 > HDDBT > HDDV8a > HDDV5 > HDDV8a > HDDBT > LDDT34 > LDDT34 > MC2C ≒ MC4C. Alt-

MC2C ≒ MC4C. The results also hough SO x produces when elemental show that vehicles using diesel had sulfur is present in the fuel, it is wor- higher particulate emission rates, and thily mentioned that the diesel urban both motorcycles (MC2C and MC4C) bus had the highest emission rate for had the lowest emission rates. For CO SO x. For VOC emission rates, the mo- emission rates, motorcycles had much torcycles had the highest emission higher emission rates than other vehi- rates among 6 vehicles, which was cles, especially MC2C, and emission

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gradually decreasing with the increas- µg/m 3, 0.117 µg/m 3, and 0.267 ppb, re- ing of speed to 85 km/hr and then was spectively. The simulated results also increasing with the increasing of show that the concentration of five pol- speed. The VOC emission rates of lutants on daily traffic flow was all other diesel vehicles were slightly de- higher than that on vacation traffic flow. creasing with the increase of speed but In addition, the distribution of air pollu- almost constant at high speed. The ten- tants also indicated that the traffic flow dency of VOC emission rates was sim- of diesel vehicles would significantly af- ilar to the CO emission rates which in- fect the dispersion of pollutants. dicated there was a certain relationship However, the past studies indicate between the CO and VOC emission that emissions from vehicular activities rates. Past studies also confirmed that contributed to only 40% of NO 2 and SO 2 VOC could be produced during incom- pollution, but the industrial sources are plete organic matter combustion at responsible for more than 50% of the to- high temperature (Tankari et.al. 2008), tal NO 2 and SO 2 concentration levels (Henner et.al. 1999). (Bhan- akar et.al. 2005). The other study Simulated results by ISCST3 also shows that emissions from the vehicle sources had contributed 76.5% and From the above emission rates 68.4% of the total CO and NO x concen- calculated by MOBILE6.2, the emis- trations, respectively, in urban atmos- sion concentration distribution of 5 phere of Beijing (Hao et.al. 2001). pollutants (CO, NO x, PM10 , PM 2.5 , and Therefore, the influences of NO x and SO x) produced by various vehicles was SO x contributed from other sources in simulated by ISCST3. The distributions the urban area, such as industrial of simulated air pollution concentration sources, should be further investigated. in both Case A and B from all vehicles in In addition, strategies for particulates Taoyuan County are shown in Figure 2- and CO control will of necessity need to 7. From the pollution distribution map, it focus on the vehicle sources. Finally, it could be found that the air pollution con- could be concluded that the dispersion of centrated on the national freeway and in- 5 air pollutants was successfully simu- terchange because of the traffic conges- lated by using ISCST3 model. tion. In addition, the highest concentration of CO, NO x, PM 10 , PM 2.5 , and SO x Conclusions on daily traffic flow is 0.0287 ppm, 21.9 The study has successfully con- ppb, 0.849 µg/m 3, 0.18 µg/m 3, and 0.404 ducted ISCST3 dispersion model to sim- ppb, respectively; on vacation traffic ulate 5 air pollutants in Taoyuan, Tai- flow is 0.0195 ppm, 15.5 ppb, 0.555

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wan. The emission rate factors of differ- Results also showed that the concentra- ent pollutants from diesel vehicles were tion of five pollutants on daily traffic estimated by MOBILE6.2 model. The flow was all higher than that on vacation emission rates of different pollutants traffic flow. In addition, the distribution were different from various mobile vehi- of air pollutants also indicated that the cles. From the ISCST3 simulated results, traffic flow of diesel vehicles would sig- the air pollution from vehicles concen- nificantly affect the dispersion of pollu- trated on the national freeway and inter- tants. Therefore, strategies for air pollu- change because of the traffic congestion. tion control in urban area will of necessity need to focus on the vehicle sources.

Reference Chen, H., A. Namdeo, M. Bell, Classi- fication of road traffic and roadside Ali, M.H., M. Mashud, M.R. Rubel, pollution concentrations for assess- R.H. Ahmad, Biodiesel from ment of personal exposure, Envi- Neem Oil as an Alternative Fuel ronmental Modelling & Software, for Diesel Engine, Procedia Engi- 23 (2008) 282-287. neering, 56 (2013) 625-630. Cook, R. J.S., Touma, A. Beidler, M. Bhanarkar ,A.D., S.K. Goyal, R. Siva- Strum, Preparing highway emis- coumar, C.V. Chalapati Rao, As- sions inventories for urban scale sessment of contribution of SO2 modeling: A case study in Philadel- and NO2 from different sources phia, Transportation Research Part in Jamshedpur region, India, At- D: Transport and Environment, 11 mospheric Environment, 39 (2006) 396-407. (2005) 7745-7760. EPA, User's guide to MOBILE6.1 and Banerjee, T. S.,C. Barman, R.K. Sri- MOBILE6.2, 2003. vastava, Application of air pollution dispersion modeling for Goyal, S.K., C.V. Chalapati Rao, Air source-contribution assessment and assimilative capacity-based envi- model performance evaluation at ronment friendly siting of new in- integrated industrial estate-Pantna- dustries—A case study of Kochi re- gar, Environmental Pollution, 159 gion, India, Journal of Environ- (2011) 865-875. mental Management, 84 (2007) 473-483.

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Hao, J., Y. Wu, L. Fu, D. He, K. He, Tankari, A. i Dan-Badjo, G. Rychen, C. Source Contributions To Ambient Ducoulombier, Pollution maps of Concentrations Of Co And Nox In grass contamination by platinum The Urban Area Of Beijing, Jour- group elements and polycyclic aro- nal of Environmental Science and matic hydrocarbons from road traf- Health, Part A, 36 (2001) 215-228. fic, Agron. Sustain. Dev., 28 (2008) 457-464. Henner, P., M. Schiavon, V. Druelle, E. Lichtfouse, Phytotoxicity of an- cient gaswork soils. Effect of polycyclic aromatic hydrocarbons (PAHs) on plant germination, Or- ganic Geochemistry, 30 (1999) 963-969.

K. Zhang, S. Batterman, Air pollution and health risks due to vehicle traffic, Science of The Total Environ- ment, 450–451 (2013) 307-316.

Lorber, M. A., Eschenroeder, R. Rob- inson, Testing the USA EPA's ISCST-Version 3 model on dioxins: a comparison of predicted and observed air and soil concentrations, Atmospheric Environment, 34 (2000) 3995-4010.

PIERCE, T.E. V, V., ISAKO B. Han- eke, J. Paumier., Emission and Air Quality Modeling Tools for Near- Roadway Applications, U.S. Envi- ronmental Protection Agency, Washington, D.C., 2008.

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PM 10 PM 2.5 0.35 0.3

0.3 LDDT34 0.25 LDDT34 0.25 HDDV5 0.2 HDDV5 0.2 HDDV8a HDDV8a 0.15 0.15 HDDBT HDDBT 0.1 0.1 MC2C MC2C Emission RateEmission (g/km) Emission Rate (g/km) 0.05 MC4C 0.05 MC4C

0 0 20 30 40 50 60 70 80 90 100 20 30 40 50 60 70 80 90 100 Speed (km/hr) Speed (km/hr)

CO NO x 25 3

2.5 LDDT34 20 LDDT34 HDDV5 2 HDDV5 15 HDDV8a HDDV8a 1.5 HDDBT 10 HDDBT 1 MC2C MC2C Emission Rate (g/km) EmissionRate (g/km) 5 MC4C 0.5 MC4C

0 0 20 30 40 50 60 70 80 90 100 20 30 40 50 60 70 80 90 100 Speed (km/hr) Speed (km/hr)

SO 2 VOC 0.03 4 3.5 0.025 LDDT34 LDDT34 3 0.02 HDDV5 HDDV5 2.5 HDDV8a HDDV8a 0.015 2 HDDBT HDDBT 1.5 0.01 MC2C MC2C 1 Emission Rate (g/km) 0.005 MC4C Emission Rate (g/km) MC4C 0.5 0 0 20 30 40 50 60 70 80 90 100 20 30 40 50 60 70 80 90 100 Speed (km/hr) Speed (km/hr)

Figure 1. Estimated emission rates of 6 air pollutants for various vehicles at different speed.

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Figure 2. Distribution figure of simulated CO concentration from vehicles in Taoyuan (Case A.)

Figure 3. Distribution figure of simulated CO concentration from vehicles in Taoyuan (Case B).

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Figure 4. Distribution figure of simulated NO x concentration from vehicles in Taoyuan (Case A).

Figure 5. Distribution figure of simulated NO x concentration from vehicles in Taoyuan (Case B).

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Figure 6. Distribution figure of simulated PM 10 concentration from vehicles in Taoyuan (Case A).

Figure 7. Distribution figure of simulated PM 10 concentration from vehicles in Taoyuan (Case B).

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Figure 8. Distribution figure of simulated PM 2.5 concentration from vehicles in Taoyuan (Case A).

Figure 9. Distribution figure of simulated PM 2.5 concentration from vehicles in Taoyuan (Case B).

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Figure 10. Distribution figure of simulated SO 2 concentration from vehicles in Taoyuan (Case A).

Figure 11. Distribution figure of simulated SO 2 concentration from vehicles in Taoyuan (Case B).

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Supplemental Table 1.

Vehicle LDDT3 HDDBS HDDBT HDDV5 HDDV8a age 1 8.77 6.09 2.53 5.06 0.00 2 8.53 0.23 3.34 4.72 5.00 3 7.59 4.68 2.85 3.92 0.00 4 5.54 4.92 1.96 2.85 25.00 5 9.48 7.73 2.36 4.40 35.00 6 8.45 2.81 4.03 4.26 10.00 7 8.72 10.54 7.46 4.82 0.00 8 7.66 16.63 6.52 4.54 0.00 9 5.92 9.84 4.16 3.09 5.00 10 5.27 2.81 7.95 4.98 0.00 11 5.07 1.41 9.66 6.59 0.00 12 5.42 9.60 8.76 10.99 0.00 13 5.02 6.32 9.82 15.51 10.00 14 3.74 5.85 6.93 5.77 0.00 15 2.23 6.32 6.85 4.38 0.00 16 1.07 2.81 5.62 4.64 0.00 17 0.54 0.23 3.50 4.22 10.00 18 0.34 1.17 1.75 2.01 0.00 19 0.32 0.00 0.81 0.90 0.00 20 0.11 0.00 1.02 0.78 0.00 21 0.12 0.00 1.34 0.60 0.00 22 0.06 0.00 0.49 0.16 0.00 23 0.00 0.00 0.04 0.24 0.00 24 0.01 0.00 0.16 0.34 0.00 25 0.01 0.00 0.08 0.18 0.00 Data source: Environmental Protection Bureau, Taoyuan, Taiwan

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Supplemental Table 2.

1 2 3 4 5 6 7 Vehicle age LDV LDT1 LDT2 LDDT3 LDT4 HDV2B HDV3 1 0.47% 0.05% 0.05% 99.85% 99.85% 100.00% 100.00% 2 0.02% 0.00% 0.00% 100.00% 100.00% 100.00% 100.00% 3 0.04% 0.00% 0.00% 99.24% 99.24% 100.00% 100.00% 4 0.00% 0.10% 0.10% 99.53% 99.53% 100.00% 100.00% 5 0.02% 0.04% 0.04% 99.12% 99.12% 100.00% 100.00% 6 0.00% 13.81% 13.81% 98.24% 98.24% 100.00% 100.00% 7 0.03% 15.09% 15.09% 99.70% 99.70% 100.00% 100.00% 8 0.15% 22.70% 22.70% 100.00% 100.00% 100.00% 100.00% 9 0.16% 16.87% 16.87% 99.78% 99.78% 100.00% 100.00% 10 0.12% 16.64% 16.64% 100.00% 100.00% 100.00% 100.00% 11 0.35% 17.71% 17.71% 99.75% 99.75% 100.00% 100.00% 12 0.27% 16.42% 16.42% 90.83% 90.83% 100.00% 100.00% 13 0.59% 13.51% 13.51% 91.52% 91.52% 100.00% 100.00% 14 0.59% 10.90% 10.90% 92.41% 92.41% 100.00% 100.00% 15 0.09% 14.14% 14.14% 91.62% 91.62% 100.00% 100.00% 16 0.13% 3.52% 3.52% 71.08% 71.08% 100.00% 100.00% 17 0.00% 0.35% 0.35% 80.95% 80.95% 100.00% 100.00% 18 0.00% 0.00% 0.00% 81.13% 81.13% 100.00% 100.00% 19 0.00% 0.00% 0.00% 87.76% 87.76% 100.00% 100.00% 20 0.00% 0.00% 0.00% 88.24% 88.24% 100.00% 100.00% 21 2.86% 16.67% 16.67% 100.00% 100.00% 100.00% 100.00% 22 0.00% 0.00% 0.00% 88.89% 88.89% 100.00% 100.00% 23 0.00% 0.00% 0.00% 0.00% 0.00% 100.00% 100.00% 24 0.00% 0.00% 0.00% 100.00% 100.00% 100.00% 100.00% 25 62.50% 0.00% 0.00% 100.00% 100.00% 100.00% 100.00%

Data source: Environmental Protection Bureau, Taoyuan, Taiwan

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Supplemental Table 3.

8 9 10 11 12 13 14 Vehicle age HDV4 HDV5 HDV6 HDV7 HDV8A HDV8B HDBS 1 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 2 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 3 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 4 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 5 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 6 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 7 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 8 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 9 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 10 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 11 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 12 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 13 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 14 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 15 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 16 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 17 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 18 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 19 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 20 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 21 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 22 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 23 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 24 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 25 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Data source: Environmental Protection Bureau, Taoyuan, Taiwan

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Supplemental Table 4.

1 2 3 4 5 Vehcile age LDDT3 HDDBS HDDBT HDDV5 HDDV8a 1 0.008773 0.001926 0.051171 0.029438 0.051171 2 0.024706 0.003852 0.102342 0.058875 0.102342 3 0.040639 0.005778 0.153514 0.088313 0.153514 4 0.160051 0.014383 0.164873 0.234912 0.164873 5 0.246640 0.022989 0.177670 0.392988 0.177670 6 0.205403 0.031595 0.199056 0.246829 0.199056 7 0.162253 0.040200 0.359115 0.308119 0.359115 8 0.187328 0.048806 0.343097 0.291719 0.343097 9 0.182441 0.057411 0.412390 0.289981 0.412390 10 0.170668 0.066017 0.288891 0.254324 0.288891 11 0.179078 0.074623 0.228877 0.234467 0.228877 12 0.177666 0.083228 0.227363 0.208719 0.227363 13 0.139064 0.235030 0.268832 0.212145 0.268832 14 0.112889 0.161037 0.261743 0.233257 0.261743 15 0.153940 0.378622 0.119833 0.228468 0.119833 16 0.083430 0.229632 0.214371 0.211180 0.214371 17 0.128125 0.162200 0.257709 0.191112 0.257709 18 0.125825 0.099446 0.301047 0.158829 0.301047 19 0.132468 0.054978 0.245211 0.152663 0.245211 20 0.079673 0.152441 0.184993 0.166012 0.184993 21 0.050579 0.249905 0.133540 0.114705 0.133540 22 0.049254 0.268219 0.064557 0.149558 0.064557 23 0.042567 0.069436 0.218477 0.156920 0.218477 24 0.035880 0.069436 0.133834 0.078486 0.133834 25 0.029193 0.069436 0.084643 0.117650 0.084643 Data source: The basis of dynamometer measurements

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THE EFFECTS OF PERCEIVED UNCERTAINTY ON TOURISTS’ DECISION-MAKING TO AGRITOURISM IN TAIWAN

Tsai Fa Yen* Department of Tourism and Leisure Management Fortune University, Taiwan (ROC) *Corresponding author: [email protected]

Chien Jen Hung Department of Tourism and Leisure Management Fortune University, Taiwan (ROC)

Hsiou Hsiang J. Liu Department of Tourism Management National Kaohsiung University of Applied Sciences, Taiwan (ROC)

Abstract

Travel decision-making is a complicated process with risk and uncertainty. Tourists’ feeling of insecurity among travel thus could hinder tourism growth. However, studies are still confused when discussing the effects of those factors on travel decision-making. The objective of this study is to examine the moderating effect of perceived uncertainty on the elements of the theory of planned behavior (TPB) by investigating agritourism setting in Taiwan. The findings show that the TPB model is adequate to Taiwan agritourism. Attitude, subjective norm and perceived behavioral control are positively impacted on the behavioral intention of Chi- nese tourists about Agritourism in Taiwan. In addition, perceived uncertainty only has moderating effect on the relationship between perceived behavioral control and behavioral intention. Based on managerial and academic implications are delineated and direction for future research are offered.

Keywords: agritourism, behavioral intention, Theory of Planned Behavior

Introduction ple, news has reported that Chinese tourists have been hit by the falling rocks in Travel decision-making is a compli- Taroko national park; others have been cated process that is risky and uncertain locked in Alisan forest park because the (Sirakaya and Woodside, 2005). For exam way was broken by heavy rain. Perceived

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risk and uncertainty, thus, have been sug- 2012; Yen, Liu, and Chen, 2012). Per- gested as an important inhibitors to travel ceived risk and perceived uncertainty (Quintal, Lee, and Soutar, 2010). Further- might play as moderators in decision-mak- more, prior study has showed that both ing model. However, few researches ex- perceived risk and perceived uncertainly plore its impacts on travel decision-making negatively influenced people’s attitudes to- except Quintal et al. (2010) and no studies ward visiting Australia; perceived uncer- confirm whether perceived risk and per- tainly negatively influenced people’s perceived uncertainty are moderators of be- ceived behavioral control when visiting havioral intention or not. Therefore, clari- Australia (Quintal, et al., 2010). However, fying its role would benefit for firms to re- research is still lack when discussing the alize the behavioral intention of tourists. effects of those factors on travel decision- making. The fragmented studies on per- Consequently, simplifying and inte- ceived risk/ uncertainty have made it diffi- grating arguments into an appropriate deci- cult to develop a comprehensive theoreti- sion-making model would be helpful in as- cal base for the construct (Ross, 1975). sessing variables influences on people’s travel behavior. Such a model could be ap- Based on the issue mentioned above, plied to agritourism settings, offering aca- researchers have demonstrated that the de- demic and practical insights into how tour- cision-making processes of a tourist can be ists to diverse firms embrace perceived un- influenced by family, reference group, and certainty when making travel decisions. situational factors (Kotler, and Armstrong, The research framework was drawn below.

Perceived Uncertainty (PU)

H4a H4b H4c Attitude (AT) H1

Subjective Norm H2 Behavioral Intention (SN) (BI)

H3 Perceived Behav- ioral Control (PBC)

Figure 1. Research framework

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Literature Review Others argued that an ATT is an individual tends to possess a favorable attitude The TPB has been examined in previ- when the outcomes are positively evalu- ous studies in many Asian countries, in- ated and, thus, he/she is likely to engage in cluding South Korea (e.g., Huff and Alden, that specific behavior (Ajzen, 1991; Cheng 2000; Lee and Green, 1991; Oh, Ahn, and et al. , 2005); a favorable or unfavorable Kim, 2003; Park and Blenkinsopp, 2009) predisposition to respond in a consistent and China (e.g., Lam and Hsu, 2006; Lee, way toward an object, such as a holiday 2000; Singh, Fassott, Zhao, and Boughton, choice (Lam and Hsu, 2006; Moutinho, 2006; Song, Wanberg, Niu, and Xie, 2006, 1987). In other words, tourists’ attitude to- Sparks and Pan, 2009). The basic para- ward to agritourism is his/her evaluation of digms of Ajzen’s (1985, 1991) TPB are the significance of the consequences/out- that people are likely to carry out a partic- comes for agritourism. Based on the TPB, ular type of behavior if they believe: (1) hypothesis is developed: such behavior will lead to an outcome they value, (2) their important referents will H1: attitudes toward to agritourism of value and approve of the behavior and (3) tourists have positive influence on they have the necessary resources, abilities their behavioral intentions. and opportunities to perform such behavior (Lam and Hsu, 2006). Specifically, atti- Subjective norm (SN) tudes, subjective norms and perceived behavioral control influence behavioral in- Subjective norm (SN) is an individ- tentions. ual’s perception of general social pressures from important others to perform or not to Attitude (ATT) perform a given behavior (Cheng et al. 2005). SN measure the importance people TPB assumes attitude toward a be- attach to reference groups’ endorsements havior, subjective norm, and perceived be- and people’s willingness to conform to havioral control are three conceptually in- these groups’ shared beliefs, attitudes and dependent determinants of behavioral in- choices, such as their holiday choices tention (Han, Hsu, and Sheu, 2010). The (Moutinho, 1987). It reflects the perceived first important determinant of behavioral desire of significant referents to approve or intention is attitude (ATT), which can be disapprove of a particular behavior (Chou described as “the degree to which a person et al. , 2012). In turn, it is the social pres- has a favorable or unfavorable evaluation sures from reference groups to approve or or appraisal of the behavior in question” disapprove of agritourism. Based on the (Ajzen, 1991, p. 188). One states that atti- TPB, hypothesis is developed: tude toward a behavior represents the perceived consequences of the behavior and H2: The subjective norms of tourists his/her evaluation of the significance of have positive influence on their be- the consequences (Eagry and Chailen, havioral intentions. 1993). Another demonstrates that AT is the feelings of favourability or unfavourability Perceived behavioral control (PBC) toward performing a behavior (Chou, Chen, and Wang, 2012); represents a per- Perceived behavioral control (PBC) son’s overall positive and negative beliefs refers to an individuals’ perception of the and evaluations of the behavior (Cheng, ease or difficulty of performing a behavior Lam, and Hsu, 2005). (Ajzen, 1991) and directly affects intention

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and behavior. PBC is a measure of the dif- intention will diminish (i.e., per- ficulty people attach to the performance of ceived uncertainty ×subjective a behavior, such as making holiday norms interaction). choices (Lam and Hsu, 2006). Another states PBC is related to perceptions of in- H4c: As perceived uncertainty costs internal and external constraints on perform- crease, the relationship between ing a behavior (Chou et al. , 2012). In turn, perceived behavioral control and it is a tourists’ perception of the ease or behavioral intention will diminish difficulty when travel in agritourism. (i.e., perceived uncertainty ×per- Based on the TPB, hypothesis is devel- ceived behavioral control interac- oped: tion).

H3: The perceived behavioral control Methodology of tourists has positive influence on their behavioral intentions. Having considered the data collection requirements of this study such as a need Perceived Uncertainty (PU) of large sample of customers and quanti- ties of Taiwanese agritourism, it would be Perceived uncertainty is viewed as a appropriate to employ the field survey subjectively determined expectation of with a self-administered questionnaire as ambiguity about a potential loss, in which the primary data collection technique for no measure of probability can be attached this study. The field study method was to each possible outcome (Becker and chosen in order to gain information di- Knudsen, 2005). This potential loss in rectly from individuals at the leisure farm which no measure of probability nega- settings. As such, their feelings and per- tively influenced people’s attitudes toward ceptions about the setting with respect to visiting the destination and it also nega- attitude (AT), subjective norms (SN), per- tively influenced people’s perceived be- ceived behavioral control (BC), behavioral havioral control toward visiting the desti- intentions (BI) and perceived uncertainty nation (Quintal et al., 2010) in TPB model. (PU) are likely to be clearly in mind (Dan- It is one of the antecedents of attitude and aher and Mattsson, 1994). perceived behavioral control in TPB model. When the attitudes toward visiting To ensure the content validity of the the destination of tourists and perceived scales, the items selected constructs are behavioral control were confirmed, few mainly adapted from prior studies. The studies examined whether their future in- study uses exiting scales for measuring attention would be influenced by uncertain titude, subjective norms, perceived behav- situations or not. Hence, hypothesis is de- ioral control, behavioral intentions and at- veloped: tractive alternativeness. Items for PU, AT, SN, BC, and BI were drawn based on the H4a: As perceived uncertainty costs studies of Chou et al. (2012), Han et al. increase, the relationship between (2010) and Quintal et al. (2010). attitude and behavioral intention will diminish (i.e., perceived uncer- The initial items were confirmed and tainty ×attitude interaction). corrected by the managers of leisure farms and pretested was done by EMBA (Execu- H4b: As perceived uncertainty costs tive Master of Business Administration) increase, the relationship between students in NPUST (National Pingtung subjective norms and behavioral University of Science and Technology), The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 239

Taiwan. For items, responses were ratings answering questions. from 1 to 7. The anchors are “strongly disagree” (1) and “strongly agree” (7) for Data were collected during the June to measuring SN, BC, BI, and PU. The an- August in 2012. A total of 400 valid ques- chors for AT are extremely bad (1) /ex- tionnaires were received. Of 400 question- tremely good (7), extremely undesirable naires obtained, about 55.5% were male (1)/extremely desirable (7), extremely un- and 45.5% were from female respondents. pleasant (1)/extremely pleasant (7), ex- At about 16.8% of respondents were below tremely foolish (1)/extremely wise (7), ex- 20 years of age and 13.6% of respondents tremely unfavorable (1)/extremely favora- were higher than 40 years of age. The ma- ble (7), extremely unenjoyable (1) /ex- jority of respondents were between 20-40 tremely enjoyable (7), and extremely nega- years of age (69.8%). Approximately 7.1% tive (1)/extremely positive (7). of respondents were graduated from junior high school and 26.5% of respondents It was decided that the model would be were graduated from junior high school. At tested by collecting data from leisure about 65.4% respondents were graduated farms in Taiwan. The criteria for farms’ se- from college or above. With regard to the lection were based on their service quality frequency visited, 75% of respondents of experience, food and beverages, and ac- were first time to the destination and 25% commodation certified by Taiwan Leisure were revisit. Farms Development Association (TLFDA). Finally, a total of 23 farms were Results drawn and could be categorized into full- service farms and limited-service farms. A confirmatory factor analysis (CFA) They were selected expecting adequate di- using AMOS 17.0 and SPSS 17.0 were versity of quality and loyalty to allow a conducted to test the measurement model model to be estimated. A questionnaire and hypothesis. Before testing the model, was prepared for collecting rating and the data were examined. For making maxi- other information. Items measuring the mum likelihood (ML) estimates for path various constructs were distributed about models (Kline, 1998), there are problems in the questionnaire to reduce halo effects. if certain conditions arise. There are likely to be outliers if the absolute value of skew- Because the goal was to develop a ness is greater than 3. Also, there is a dis- model, random sampling was not seen as tribution problem if the absolute value of necessary. Surveyors were collecting data kurtosis is larger than 10. One wants data from tourists they did not know. Quota that is approximately normally distributed sampling was adapted to ensure that re- for making ML estimates. For this research spondents were distributed across age and the skewness of variables ranges between - sex groups. Having enough respondents in 1.282 and -0.297 (Table 1) so the < 3 crite- certain categories was seen as important rion is met. The kurtosis values are be- for data to be appropriate for estimating tween 2.183 and -0.838 so the < 10 crite- the model of concern. Data was collected rion is met. Therefore, this enables authors by personal contact with respondents at to proceed in evaluating the measurement rest area of the farm. In collecting data, re- models. spondents were asked to complete a printed questionnaire. The data collectors, The chi-squares (287) is significant (p as necessary, clarified the meaning of < 0.05; Bollen, 1989), a finding is not unu- questions and answers. In other words they sual with large sample sizes (Doney and dealt with any problems encountered while Cannon, 1997). The ratios of chi-square to The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 240

degrees of freedom (df= 108) are 2.65 for compared the correlations between factors measurement model less than 3 (Marsh with their AVE (Gaski and Nevin, 1985). and Hovecar, 1985). The values for GFI The results show that all of coefficients of (0.920), AGFI (0.886), CFI (0.972), and correlations between factors are signifi- RMSEA (0.064) are acceptably close to cantly lower than 1 and the correlations the standards suggested by Hu and Bentler between factors are lower than their AVE, (1999) greater than 0.9 for GFI and AGFI, thus confirming discriminant validity (see greater than 0.95 for CFI and less than Table 2). In summary, the measurement 0.08 for RMSEA. Given that these batter- model demonstrates adequate uni-dimen- ies of overall goodness-of-fit (GFI) indices sionality, convergent validity, reliability, were accurate and that the model was de- and discriminant validity. This enables au- veloped on theoretical bases, and given the thors to proceed in evaluating hypotheses high level of consistency samples, no re- testing. specifications of the model were made. This enables authors to proceed in evaluat- With regard to the model fitness (Table ing the reliability and validity. 3), the chi-squares (282) is significant (p < 0.05; Bollen, 1989), a finding is not unu- This study assesses the quality of sual with large sample sizes (Doney and measurement efforts by investigating uni- Cannon, 1997). The ratios of chi-square to dimensionality, convergent validity, relia- degrees of freedom (df= 100) are 2.82 for bility, and discriminate validity. Evidence measurement model less than 3 (Marsh for the uni-dimensionality of each con- and Hovecar, 1985). The values for GFI struct included appropriate items that (0.920), AGFI (0.878), CFI (0.977), and loaded at least 0.70 on their respective hy- RMSEA (0.068) are acceptably close to pothesized component and loaded no the standards suggested by Hu and Bentler larger than 0.30 on other components in a (1999) greater than 0.9 for GFI and AGFI, factor analysis (see Table 1). In addition, greater than 0.95 for CFI and less than the overall goodness of fit supports uni- di- 0.08 for RMSEA. Given that these batter- mensionality (Steenkamp, et al. 1991). ies of overall goodness-of-fit (GFI) indices Convergent validity was supported by all were accurate. loadings being significant (p < 0.01) and nearly all SMC (square of multiple corre- Path analysis was used to estimate the lation) exceeding 0.30 (Hildebrandt, relationships in the extended TPB model 1987). This study assesses reliability in each of the three country samples. As jointly for all items of a construct by com- can be seen in Table 3, attitude toward to puting the composite reliability (C.R.) and visit Taiwanese agritourism (AT) had a sig- average variance extracted (AVE) (Baum- nificant positive effect on behavioral inten- gartner and Homburg, 1996; Steenkamp tions to visit Taiwanese agritourism (BI) and van Trijp, 1991). For a construct to as- (β=.086; t=1.839). This offers some sup- sess good relia bility; com - posite reliabil- port for Hypothesis 1, as the Chinese trav- ity should be higher than 0.70, and the av- elers’ attitudes influenced their behavioral erage variance extracted should at least be intentions to visit Taiwanese agritourism. 0.60 (Bagozzi and Yi, 1988). All scales Subjective norms (SN) had a significant demonstrate good reliabilities. positive influence on BI (β=.386; t=6.334), supporting Hypothesis 2. Perceived behav- To examine discriminant validity, Cur- ioral control (BC) had a significant posi- rent study first checks the coefficients of tive effect on BI (β=.382; t=6.216), sup- correlations between factors whether they porting Hypothesis 3. Clearly, significant are significantly lower than 1 and then others (Kim et al., 2009) and perceptions The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 241

Table 1. Reliability and convergent validity

Concept Items Mean SD Skewness Kurtosis λ SMC CR AVE AT Q1 5.84 1.112 -1.204 1.802 .896 .803 0.91 0.7 Q2 5.86 1.045 -1.138 1.883 .925 .855 Q3 5.88 1.082 -1.282 2.183 .924 .853 Q4 5.89 1.046 -.983 1.127 .794 .631 Q5 5.89 1.067 -1.007 .991 .784 .614 Q6 5.87 1.060 -.974 .933 .916 .839 SN Q7 5.52 1.130 -.662 .342 .969 .940 0.93 0.83 Q8 5.44 1.100 -.597 .378 .895 .801 Q9 5.43 1.104 -.501 -.116 .766 .586 BC Q10 5.56 1.034 -.380 -.432 .834 .695 0.78 0.65 Q11 5.33 1.045 -.363 .107 .847 .717 Q12 5.23 1.123 -.297 -.165 .859 .738 BI Q13 5.43 1.083 -.473 -.035 .891 .794 0.85 0.72 Q14 5.30 1.099 -.633 .719 .813 .661 Q15 5.25 1.273 -.763 .655 .935 .873 PU Q16 3.02 1.716 -.587 -.587 .969 .938 0.98 0.95 Q17 2.98 1.714 -.838 -.838 .950 .903 Q18 2.90 1.688 -.702 -.702 .896 .803 Note: χ2=287(p=.000); df=108; GFI=.920; AGFI=.886; CFI=.972; RMSEA=.064 SMC: Squared Multiple Correlations; CR: Composite Reliability; AVE: Average Variance Extracted

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Table 2. Discriminate validity and correlations between concepts

Concept M SD PU AT SN BC BI PU 10.97 4.99 .95 AT 35.67 5.55 -.108 * .70 SN 16.89 3.18 -.274 ** .465 ** .83 BC 16.26 2.70 -.023 .350 ** .591 ** .65 BI 16.29 3.00 -.140 ** .392 ** .622 ** .590 ** .72 * Correlation is significant at the 0.05 level; ** Correlation is significant at the 0.01 level (2- tailed).

Table 3. Results of hypotheses testing

Path β t-values AT-BI .086 1.839* SN-BI .386 6.334*** BC-BI .382 6.216*** PU*AT .131 .488 PU*SN .345 1.236 PU*BC -.542 -1.988 * χ2: 282; df: 100; GFI: .920; AGFI: .878; CFI: .977; RMSEA: .068; R2: .554 Note: Standardized β is significant while t-values exceed 1.96. *p < .05. *** p < .001 of control (Sparks and Pan, 2009) did in- perceived behavioral control under an un- fluence people’s intentions. certainly situation.

Diagonal elements are AVE. Off- diagonal Conclusion elements are correlations between factors. Furthermore, the first moderator perceived The primary aim of the current study uncertainty × attitude (PU*AT), perceived was to examine the relationships between uncertainty× subjective norm (PU*SN), perceived uncertainty (PU) and the theory and perceived uncertainty × perceived be- of planned behavior (TPB) constructs. The havioral control (PU*BC) was tested. An analysis suggested attitudes, subjective unusual finding was revealed that per- norms, and perceived behavioral control ceived uncertainty can destroy the relation- have positive impacts on behavioral inten- ship between perceived behavioral control tions. The analysis also suggested PU was and behavioral intentions (β=-.542; a moderator that have impacts on per- t=1.988), supporting Hypothesis 6. How- ceived behavioral control - behavioral in- ever, PU could not significantly moderate tentions relationship in Ajzen’s (1985, AT-BI and SN-BI relationship, Hypothesis 1991) TPB. These relationships are dis- 4 and Hypothesis 5 were not supported. cussed in the following paragraphs. Consequently 55.4% variance of behavioral intentions for Chinese tourists can be First, the significant ‘attitude- intention’ explained by attitude, subjective norm, and relationship provided strong support that The International Journal of Organizational Innovation Vol 6 Num 4 April 2014 243

tourists’ positive attitudes towards undertake agritourism. It reveals Chinese agritourism strengthen intentions to under- tourists’ intention will be higher when take agritourism, while negative attitudes their perceptions of the ease are high. weaken them. This study identifies attitude as a key factor influencing tourists’ inten- Nevertheless, a finding is unusual when tion of agritourism planning. This demon- situational variable, perceived uncertainty, strates Chinese tourists’ intention will be is considered. With regard to the higher higher when their evaluations of the signif- uncertainty tourists’ perceived, the proba- icance of the consequences/ outcomes for bilities of the intention to undertake Taiwanese agritourism are high. Further- agritourism would be lower while their more, the significant ‘subjective norm-in- perceived behavioral control was high. It tention’ relationship also provided strong implies supervisors, peers, industry associ- support that tourists’ decision making was ations and government all have a role to influenced by a reference group. Results play in declining the environment uncer- highlight the role that significant others tainty. The arrangements of restaurant, ac- played in influencing the implementation commodation, tour, transportation, shop- of agritourism planning, and thus con- ping etc. are all needed to be confirmed. firmed socio- cultural norms as a key in- For farm managers, top management needs fluence on agritourism planning (Méheux to articulate the importance of agritourism and Parker, 2006). This indicates Chinese planning by embedding it in strategic plans tourists’ intention will be higher when the and including it as a core competency and social pressures from reference groups to key performance indicator of managers. approve of Taiwanese agritourism. Moreo- Considering to future research, study re- ver, the significant ‘perceived behavioral lated to farm branding is needed in order control - behavioral intention’ relationship to defense the uncertainty outside the farm also provided strong support that tourists’ and offer more useful competitive strate- that tourists’ positive perceived behavioral gies. control strengthen behavioral intentions to

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