THE INTERNATIONAL JOURNAL of ORGANIZATIONAL INNOVATION

VOLUME 6 NUMBER 3, JANUARY 2014

Table of Contents

3. Information Regarding The International Journal Of Organizational Innovation

4. The 2013 IJOI Board Of Editors

Page: Title: Author(s):

6. Human Resource Management: A Strategic Theoretical Perspective Dyah Sawitri, Mahlia Muis

21. License Income Of Technology Commercialization: The Case Of U.S. Universities Wen-Ling Hsu, Yun Ken

31. Exploring The Relations Between Service Quality And Consumer Behaviors - A Case Study Of 85°C Bakery Café From Taiwan Chao-Hua Li, Hsien-Bin Wang

42. Developing Research On Vehicle Tire Pressure Detection And Adjustment System Shu-Lung Wang, Kaie-Chin Chung, Nai-Hao Yin

50. The Relationship Between Package Redesign And Purchase Intention Ya-Fang Wu, Chao-Sen Wu, Cheng-Jong Lee, Li-Fen Tsai

63. Exploring The Servicing Effectiveness Of Social Media In Customers’ Electronic Word Of Mouth (EWOM) Szu-Yuan Sun, Li-Shan Chen

68. The Relationship Among Corporate Social Responsibility, Service Quality, Corporate Image And Purchase Intention Chun-Chen Huang, Szu-Wei Yen, Cheng-Yi Liu

The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 1

85. Technology Evolution, Technology Diffusion, And Regional Development: The Flat Panel Display Industry In East Asia Kaie-Chin Chung, Shu-Lung Wang*

96. The Effect Of Word-Of-Mouth, Knowledge, And Promotions On Purchase Intention Of Medical Cosmetics Yi-Chih Lee, Wei-Li Wu, Yang-Chu Lin, Chia-Ko Lee

106. The Relationship Among Brand Equity, Customer Satisfaction, And Brand Resonance To Repurchase Intention Of Cultural And Creative Industries In Taiwan Chun-Chen Huang, Szu-Wei Yen, Cheng-Yi Liu, Te-Pei Chang

121. A Framework For A Technology-Organization-Environment Implementation Model In Taiwan’s Traditional Retail Supermarkets Hsin-Pin Fu, Hsiang-Ting Su

130. A Study On The Correlation Between Furniture Product Knowledge And Consumers’ Satisfaction By Fuzzy Linguistics An Sheng Lee

144. Investigating Influences Of Sea-Land Circulation On Ozone Pollution In Southern Taiwan By Coupling Cluster Analysis With Back - Trajectory Simulation Kun-Ming Lin, Tai-Yi Yu, Len-Fu Walter Chang

153. Examining The Mechanisms Linking Behavioral Integrity And Affective Commit- ment: The Mediating Role Of Charismatic Leadership Feng-Hua Yang, You-Shiun Tsai, Wei-Shun Liao

174. Leisure Behavior In Sports Training On Psychological Skill And Refereeing Performance Hsiang-Wei Chien , Yu-Lun Hsu, Yu-San Ting, Chun-Te Wu

190. The Influence Of Repetitive Advertising On Effect Of Communication: An Empirical Study On Recycling Tsung-Kuang E. Ma, Dong Jenn Yang, Hong Ngoc Truong

199. Innovation And Alliance Effects For Tourism Industry In Taiwan Benjamin C. Parng, Mu-Ke Chen, Tsung-Ting Chung

210. A Study On Design Decision Making Resulted From The Form Features Of Furniture Products And The Aesthetic Evaluations Of Consumers Through Fuzzy Logic An Sheng Lee

The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 2

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 associa- tions & 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]

Note: the format for this Journal has changed with the January, 2013 issue. The journal is now published in a two-column format (instead of the single column format used in prior issues). Please see the new Author Writing Guidelines on the Journal’s website, as well as a sample article showing how they will appear in the new format.

The International Association of Organizational Innovation (IAOI)

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

The International Conference on Organizational Innovation (ICOI)

The 2014 ICOI Conference will be held in Manila, Philippines at De La Salle University, August 13-15, 2014. Complete details will be available soon.

The 2015 ICOI conference location is Jogia/Jogjakarta, Indonesia. Jogja is a famous tourist destination after Bali. For more information, please visit http://www.yogyes.com/ the Air- langga University will be the Host

The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 3

THE 2013 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 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 3 January 2014 4

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 A Kersten - Roosevelt 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 Zach Kelehear - University of South

The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 5

HUMAN RESOURCE MANAGEMENT: A STRATEGIC THEORETICAL PERSPECTIVE

Dyah Sawitri Faculty of Economics and Post-Graduate Program Gajayana University of Malang [email protected]

Mahlia Muis Faculty of Economics Hasanuddin University of Makassar [email protected]

Abstract The development of strategic roles requires a paradigm shift to the program of training and development, so that it could be obtained the much deeper consideration to the purposes and goals of the development directions. The initial focus of the department of training and development was on the products. The staffs would develop the products as many as possible and offer those products to the organizations. It came to our mind, a little bit, if a program was needed or in reality, could be used. The objectives were to produce products as many as possible for being used by a group or an individual as many as possible. The shift of the training program was focused much more on the service aspect and it made the department of training and development experiencing much more progress. Here, the department of training and development emphasized that both products and services should comply with the form of actual needs of the users. The concept of the training program was the clients’ involvement, and the service aspect to the customers became the most important thing. With various types of well-identified customers, the staffs would focus much more on the efforts of assuring that all customers would be very much pleased with the products and services provided for the customers.

Keywords: Human Resource, Strategic Theory, Training and Developing Trends.

Introduction to the strategic directions of the organization. The types of programs and services In recent decades, it has developed an provided by the training and development interest in the field of "Strategic Manage- function is more focused on customers and ment" that resulted in the neglect of the be proactive because the types of programs resources owned by an organization. (Hu- and services are supporting the strategic tabarat and Huseini, 2006) Training and goals. The success rate of the program is development programs are closely linked measured in the amount of outcomes or The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 6

output that connect with other forms of has a "deep engagement" in which the strategic initiatives. The objectives of the strategy was developed and produced an new program types suggest the measures important input, which heightens the criti- that support the strategic objectives that cal issues, put forward the necessary con- are directly or indirectly. siderations that needed, and offer the recommendations and solutions to establish Strategic Role the direction. This is perhaps the most important role of the program in relation to Strategic management is a way lead- the strategy. ing company in the main goals; that is, the development of corporate values, manage- 3. Strategy Implementation. As dif- rial capabilities, organizational responsi- ferent parts of the organization's strategic bilities, and administrative systems that are planning implementation, training and de- connecting the strategic and operational velopment functions often take part in the decision making at all levels of the hierar- implementation process with the specific chy, and through all business lines of busi- types of programs, services, and process. ness and authority functions of the compa- Almost every implementation process of ny.) Training and development functions strategy will require training programs and are balanced in the assumed some role in care services, because the elements of developing and supporting the strategy learning and application is essential to the type of organization. In some organiza- achievement of strategic objectives. tions, these functions only assume one or more of the role forms, while at the world- 4. Strategic Outcomes. Training and scale training and development organiza- development programs operate strategical- tions, the function develop the five forms ly when such programs are directing the of role to build a strong relationship with important measures of business and opera- the strategy aspect. (Jack J. Phillips, 1999) tions performances. When the current training and development programs and 1. Strategic Planning. The first im- services are achieving the success, its pro- portant role for training and development vide business results that usually linked to function is to develop its own strategic the strategic objectives. planning. This effort will bring the strategy aspect to the department level with the 5. Strategy Training. The last role as- type of planning that must be closely sumed by a number of training and devel- linked to the strategic planning of the or- opment function is used to train the plan- ganization, which began with the mission ning and implementation processes strate- statement and contain specific types of gically to the other parties in the organiza- strategies that can be understood by mem- tion. Dynamic and complex organization bers of staff for training and development, requires an appropriate level of knowledge and can implement temporary while they and skills toward the strategic planning try to keep in touch with the strategic di- and implementation processes. Managers, rection of the organization. team leaders, supervisors, and - in some cases - all employees must understand the 2. Strategy formulation. Training and processes, requirements, tasks, and outputs development department, as an important of the strategic planning. Through consult- function within the organization, often ing services and training programs, the help in developing the strategic planning training and development department can for the organization. In this role, the leader build the right type of expertise. of the training and development section

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The operational framework can be velop products as much as possible and used to develop a strategic role for the or- offer it to the organization. In a catalog ganization of training and development. format, packs in a lot of patterns, training See Framework in Figure 1. describes the and development programs are selling specific questions about the type of strate- these products in a similar process to the gic human resources. The development of sales program of items which are off-the- strategic role requires a paradigm shift on shelf in the supermarket. (Jack J. Phillips, the training and development programs so 1999) There is little thought, when the that there is a more in-depth consideration programs were needed or virtually work- to the objectives of the development direc- ing. The goal is to produce as much prod- tion. As illustrated in Figure 2., the initial uct as possible, and be used by groups and focus of the training and development de- individuals as possible. partment is on the product. Party staff de-

Organizational Process Employees Strategy / Organization: Are or- Organization : Are the Organization : Are the End Tar- ganizational strategy organizational processes goals of employees are gets / Mis- and budget support stra- have end goals regarding related to the need of sion tegic HR types? the strategic human re- strategic HR? sources? Department of Training and Department of Training and Department of Training and Development: Is the P&P Development: Are the pro- Development: Are the output strategy supports the type of cesses of training and devel- and standard forms of training strategic HR? opment programs have goals and development programs that can be measured to related to strategic human achieve strategic HR? resource requirements? Note: (Adapted from: Mc Clernon, Timothy R. dan Swanson, Richard A.. "Redefining HRD's Role in the Corporation: A Case Study on Becoming a World-Class Business Partner, " In Action Leading Organizational Change . Elwood F. Holton dan Jack J. Phillips (eds.), Alex- andria, Va.: American Society to Training and Development, 1997, p. 1-21).

Figure 1. Strategic Human Resource Development Performance Level of Training and Development Program

Strategically Fo- Product Focused Service focused cused Source: Jack J Phillips, Ph.D., HRD Trends Worldwide, 1999.

Figure 2. Thinking Strategically

Shifting the training programs that tomers are identified, the staff is focused focuses on the aspects of service makes on ensuring that the customer was happy training and development department has with the product and service that delivered developed. In this case, the training and to them. development department stressed that the products and services must meet the actual As evidence, the function of training needs of the users. The concept of training and development is currently focused stra- program is the client parties’ involvement, tegically, which means that the presence of and the customer service aspect becomes considerations regarding the products and very important. With various types of cus- The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 8

services that meet the needs of organizational related to the strategic goals. The Traditional Strategic Planning Model

Thoughts lead to aspects of customer Various models of strategic planning satisfaction levels which ensure that prod- reflecting various stages, process, and ucts and services are closely related to the steps required to develop a strategic plan types of strategies that are important in the and process for the organization. The organization and that the results expected- model shown in Figure 3., from the stand- ly achieved. This form of strategic think- point of training and development func- ing helps ensure the training and develop- tion, is considered as one of the most fruit- ment function provides a decent value for ful and practical model. (Jack J. Phillips, the organization as well as being an im- 1999) portant business partner to the management team.

Develop Vision

Establish Mission/ Purpose

Set Goals and Objectives

Scan the External Environment

Assess the Organization

Consider the Feasible Strategies

Select a Strategy

Evaluate the Strategy

Source: Jack J Phillips, Ph.D., HRD Trends Worldwide, 1999 .

Figure 3. The Strategic Planning Process

Develop a vision. Important part in the ef- forms in the training and development forts to develop a strategic direction of the function. Establish the mission / purpose. department of training and development is The next step of the model is to develop a to develop the right vision that reflecting specific mission or purpose for the training the type of strategy and the other shifting and development organization, regardless

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of whether the department is positioned ness and efficiency levels of education and within the main department, division, unit, training functions. Strength was also iden- subsidiary, or the company as a whole. tified, which is an important asset of the The mission statement describes why the function. This step requires an objective organization is real there. The mission point of view to determine which issues statement is usually simple, sometimes a are actual strengths and weaknesses. single sentence, and serves as a reason for organizations to maintain its continuity. Take into account the types of strategies Set the final goals and objectives. The next are feasible. The next step is to consider logical step in the strategic planning model the full range of types of potential strate- is to develop goals and objectives. Final gies to develop the types of strategic plan- goals are usually more common than ob- ning. Feasibility is an important element, jective and reflect the ideal description as well as the relationships forms on stra- about where the organizational direction. tegic needs of the whole business unit and Goals are usually more focused on specific organization. (Jack J. Phillips, 1999) In things, with the measures, time frame, and this step, all types of previously process, sometimes even some form of responsibil- from vision to mission to the goals and ity. Goals and objectives of training and objectives, were integrated to determine development programs should reflect, to the specific strategic types where appro- some extent, the strategic goals and objec- priate or suitable. tives for the units of organization serviced. Also, the goals and objectives of the pro- Choose the type of strategy. Strategies se- gram should support the strategic objec- lected and implemented through schedules, tives of organization as a whole. assignments, and following specific responsibilities. Strategic planning are trans- Observe the external environment . The lated into the forms of operational plan- next step is to observe the external envi- ning for the training and development ronment for the important issues that will function, while specific programs and ser- affect the strategic direction of organiza- vices were developed and distributed. The tion. For training purposes, this step could implementation process involves an effort involve efforts to examine the quality of to providing coordination, allocating the new recruitments, resources for new em- resources, developing the policies, and im- ployees training programs, resources for plementing the practice, as the strategy is designing, developing, and distributing implemented throughout the organization. training programs, market conditions that affect the type- types of expertise and Evaluating strategies. The final step of the competence in the workplace, technology model is to evaluate the degree of success department, and the department of law and of the chosen strategy. This is a form of authority. For certain types of organiza- periodic view, which is sometimes carried tions, the external environment will con- out annually. The objective of this step is tain a variety of influencing factors that to measure or estimate the level of success can provide major input into the strategic of the strategy and planning back when planning process. needed. Thus, the cycle continues, as the adjustments efforts were made and a new Assess the organization. In this step, the type of strategy was developed. strength and weaknesses of the organization will be specified. Weakness indicates The definition of HRM is the policies specific areas where process improvement and practices that someone needed to run should be done to enhance the effective- the "people" or human resource aspect

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from a position of management, including making and coordinating all HR for the recruitment, screening, training, reward, entire employee. It is an approach to give and assessment. While HRM Strategic can full authority for the head of human re- be defined as the combination of HRM sources unit in the organization. Strategic with Organizational Strategic Manage- HRM also see the HR function as an inte- ment, or in other words, as the pattern of gral part of all corporate functions such as human resource activities that planned to marketing, production, finance, law and so achieve organizational goals. From the on. Strategic HRM approach puts the dep- above definition, there are two important uty director of human resources as an inte- things that distinguish Strategic HRM and gral part of a team. Nowadays, several HRM, namely: (a) Vertically, Strategic theories developed can be divided into two HRM practices associated with strategic groups, namely: (a) the theory of strategic management processes in an organization; HRM which encompass the Resource- and, (b) Horizontally, Strategic HRM em- based Theory, Behavior Perspective, Cy- phasis on the coordination and linkages bernetic Systems, and Transaction Cost between various practices of HRM. In ad- Theory/Agency; and, (b) theory of Non- dition, there are six essential elements in Strategic HRM which encompass the strategic HRM approach (Mangkuprawira, Model Dependence, and Institutionalism, 2004) that is: (1) understanding the effect can be shown in Table 1. (Mangkuprawira, of external environmental; (2) understand- 2004) ing the dynamics influence and labour market competition; (3) long term focus; Strategic Operations (4) focus on choice and decision making; (5) growth of all personnel; and, (6) integ- How the training department to be rity with corporate strategy. more strategic? Some form of action can be done through training and development The primary key idea of all strategic functions for more related to aspects of management keys is to coordinate all cor- strategy. Some type of action shows a par- porate resources, including human re- adigm shift for training staff, while others sources and any components that contrib- carry out the necessary actions that needed ute to implement the strategy. If all func- to develop the special kind of relationship. tions are integrated, there will be no coun- Ten special form of action are recom- ter-productive and each individual work mended. (See Table 2.) together in accordance with a clear direction synergistically. In other words, there Develop strategic planning. The training is a perfect coordination and the combina- and development function should develop tion use of managerial and operational its own strategic planning. The function functions, where it will make the entire will have difficulty in obtaining the rela- company more valuable than any other tion to overall strategy of organization if company. the function does not have its own strategic planning. This condition is often the Differences Between Strategic and first step in the process. Develop a strate- Traditional HRM gic plan that will not only ensure the kind of relationship, but also indicates the type Basically, Strategic HRM approach of competence in the strategic planning involved in strategic planning, decision- process.

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Table 1. Differences between Strategic and Traditional HRM

Strategic HRM Traditional HRM Dimensions Planning and Involved in overall planning and linking Involved only in operational planning Strategy Formu- the HR functions with corporate strategy lation Authority Has the function and authority status for The status and authority for medium top personnel employees (e.g, deputy di- employees (e.g, personnel director) rector of HR) Scope Concoers with all management and em- Concoers primarily with employees ployees daily, operations, and clerical Decision Mak- Fully integrated with the organizational, Moserat toward the limited inetgration ing marketing, budget, legal and production with organizational functions functions Coordination Coordinate all HR activities, such as re- Not all coordinate the HR functions cruitment, staffing, and fair employment opportunities Source: Mangkuprawira, 2004.

Shift to the role of performance improve- tegic issues, shifting the trend for training ment. The shifting trend from training programs to be closer with the customer function to performance improvement will help to guarantee the availability of function is an important step in the devel- close relationships with the aspects of opment of strategic relationships. Many strategy. When organizations operate in an types of strategic objectives that focus on environment that is mainly oriented to the the measurement of critical business per- customer, training and development func- formance, which can be improved through tion does not only have to work with inter- training and development function. nal customers to meet their specific needs, but also it have to develop the types of Establishing cooperative relationships programs, product, and services to be con- with key managers/principal. Trend to de- nected with the issues of relationship velop forms of cooperation with the other forms with the customer. members of managerial group is essential in relation with the aspects of strategy. The Communicate regularly with key execu- key managers are developing and imple- tives . Because of the chief executives set menting the major strategic objectives of the strategies, a flow of communication organization. Work closely with the man- with them on a regular basis can ensure agers to meet their needs as well as to have that the types of services and training and support, assistance, and direction from development programs are targeted to as- them which will help ensure that the train- sist in the achievement of strategic goals. ing function has been associated with the Termination and alliances issues can be aspects of strategy. quickly adjusted when the top executives become aware of them and when mecha- Be focused on the customer. Because the nisms are placed in adjustments efforts. aspects of relationship and satisfaction level to the customer are usually the stra Measure the pulse of the organization. Work climate should be monitored, and The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 12

Table 2. The Concept of the Types of Trend Which Rank Based On Its Interests Properties

Interest- Based Type of Trend Ranks 1 The elements of the cost of training and development programs monitored accurately to manage resources and demonstrate accountability 2 Efforts to measure the value of return on investment in training and development program began to develop in use 3 Evaluation processes measure the success of training and development programs systematically 4 The process of needs assessment and analysis have obtained more suppression of thought 5 The staff of training and development as well as the line management establish cooperation to achieve the end goals of a general nature 6 The training and development programs are linked to the strategic direction of organization 7 The concept of “learning organization” has been used 8 Implementation of training and development programs change rapidly 9 The training process is shifted to the performance improvement process 10 Development and training technology is experiencing a rapid development process 11 The responsibility for training and developments programs shared on a number of groups 12 More training and development programs are carried out to contractors outside the company 13 More training and development programs are designed for the global use 14 Training and development functions are added to the ‘profit center’ concept 15 The budget amount for training and development programs have increased 16 The concept of “corporate universities” gains more recognition

Source: Jack J Phillips, Ph.D., HRD Trends Worldwide , 1999. the programs should be developed to im- Establish programs with core competen- prove the organization. Some strategic ob- cies types . Most organizations have devel- jectives rotate around the satisfaction oped the types of core competencies need- level of employees, employee involvement ed to position the organization for level, and employee commitment tiers. future success rates. Some forms of strate- The pleasant and productive work climate gic initiatives revolve around efforts to is essential and usually be the part of strat- develop the core competencies. A lot of egy. Training and development function training and development programs should should monitor important measures such be directly linked to the types of the core as job satisfaction, attitude, organizational competencies whenever possible. commitment, and work climate, through various feedback mechanisms to ensure Consider the results-based approach at all the climate is consistent with the manage- levels. Elements of return on investment, ment’s expectation level. business influence, behavior change, and transformation in the workplace, are the

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important strategy categories. When or- distribution of training and development ganizations focus on the achievement of function. Managers are involved in the dis- the primary measures of outcome, it is tribution of issues when the programs im- likely to relate it with the strategic goals plemented in the form of decentralization are very high. Also, if the results of which in all areas and locations. Evaluation pro- can be measured were reported to the ap- cess provides an opportunity to measure propriate target audience, it can help en- the business influence on strategic sure that the training and development measures and reports on the results ob- functions are always involved whenever tained to the right target audience along strategic issues are discussed. with other forms of strategic success. Thus, each step in the training and devel- Link the training and development func- opment cycle is showing opportunities for tions for all steps of the process . Figure 4. relationships on the aspects of strategy in shows how the training and development organization. function may relate to the types of strategies within each of the main steps of train- Future Outlook ing and development cycle, from needs assessment level to evaluation level. At the This type of trend is likely to continue level of assessment and needs analysis, in the future, and it is seen as a need by strategic issues must be identified, includ- many stakeholders . This condition has ing specific measures that should be raised been developed over the years. Driving in such programs. The specific types of factors for this trend must be sustainable programs and services which can enhance and may be strengthened in the future. or develop these measures, are identified Some authorities consider that this type of in the analysis process so that there is a trend is needed to maintain the viability of direct relationship between the needs and training and development function that op- proposed program. erates correctly. Without any form of strategic relations, training and development Objectives that are developed to drive function can eliminate the nonessential the impact of business, application, and role in the organization, perhaps through transformation, are the general form of the outsourcing process by simply search- strategic and operational. Specific goals ing the processes of training and develop- provide direction needed to ensure that ment which is essentially needed. these programs are on target and help achieve the strategic objectives of organiza- Achievement level of success with tion. During the design process, each of this type of trend gives some important these elements, modules, or activities, advantages. Linking aspects of the strategy must reflect the vision, values, philoso- will be to build closer ties between the phies, and beliefs that involved in the training and development function with overall strategic planning of organization. senior management team. This is one of Also, issues such as the purchase vs. de- the most important elements in the devel- velop the programs may reflect the strate- opment of cooperation needed to convince gic goals of the organization with respect senior managers that the training program to the level of use of outsourcing efforts can add value to the 'bottom line', while vs. developing the programs internally de- the strategic objectives were improved veloped. The distribution process reflects through training and development pro- important strategic issues such as the use grams. of technology and performing the timely

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PROCESS STEPS RELATION ON ASPECTS OF STRATEGY - Strategic business needs that identified Needs Assessment and - The programs / services that relate to needs Analysis

- Developing the objectives of business-influence (strategic) Objectives - Developing the objectives of application / transformational (strategic)

- Design reflects vision / values / philosophy Design/Development - Development vs purchase reflects the strategic direction

- Distribution reflects the strategic issues such as technolo- Distribution gy, just-in-time delivery, and decentralization - Strategic partnership with management

- Measuring the impact of strategic business Evaluation/Reports - Reporting the results along with other strategic issues Source: Jack J Phillips, Ph.D., HRD Trends Worldwide , 1999.

Figure 4 . Linking Training and Development Function to Aspects of Strategy

Aspects of budget and funding are of- zation in the future. In summary, it would ten influenced by the degree to which appear that this type of trend will be sus- training and development programs related tained in the future as well as the staff of to the aspects of strategy or perceived to training and development section must be associated with the aspects of strategy. continue achieving forms of progress with A clear form of relationships makes much this important type of relationship. easier to obtain the necessary amount of budget. No relationship will cause prob- Based on the theoretical perspective lems in time of budgeting process. Also, of the study were taken from the HRD strategic training and development pro- Trends Worldwide by Phillips, (1999), that grams will ensure that funding for the the research conducted is comprehensive, training and development function has uti- to strengthen the strategic theoretical per- lized appropriately. The conditions assure spectives if training and development pro- that the training and development process grams that also based on the form of real will add value in the most problematic are- practice of the individuals who lead the as - the areas that are closely related to the functions of training and development future of organization. within major organizations. As drawn in Figure 5. (see end of article), these studies Success with this process moves the involve several key elements. training and development functions on the important and vital position in the organi- 1. The initial list of these types of zation. While the training and develop- trends are developed based on the results ment program has been upgraded to an of direct observation in organizations important strategic role, the company will through the work of Performance Re- see it as a necessity to position the organi- sources Organization (PRO) company, an The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 15

international consulting firm, which mainly focused on the development of results- 6. Although the elements of this ma- based training and development process. jor study provides the basis of the overall In the forms of contact with all clients all trend of development process, the types of over the world, some type of trend was trend has also been discussed in several common for organizations faced in which programs that include the workshop pro- identified and published initially as a form cess for officials of training directors, of internal documents in PRO. which conducted outside the United States by the author. 2. The initial list that support the review of literature to determine the extent 7. Lists of these types of trends are to which these trends emerged as some- also obtaining the validation through the thing common to face from one region or PRO partner when the firm continue to country to another region or country. This work with clients in all industrialized study attempts to produce an additional countries as well as with several clients number of new trends and to support the who come from developing countries. This adjustments efforts to the initial list. is an effort to identify trends types of literature, but also attempt to observe trends 3. The survey was conducted in thir- types within an organization or trends are ty-five organizations that implement train- illustrated by the internal staff training and ing and development programs and are development. members of the International Federation of Training and Development Organizations These types of trends emerging from (IFTDO). All industrialized and emerging organization to organization, from country countries displayed in the survey process. to country, from one culture to another This initial survey provides additional in- culture. Author aims not to make any ef- sight on the major issues facing by the fort to discuss the various differences of functions within these countries. culture and cultural issues that are unique to a particular organization or country. 4. A literature search efforts were in- However, this paper focuses on the types tensively conducted to all major publica- of trends that should be common to en- tions, both domestic and international. counter, important, and vital in every ma- This study attempts to show the issues, jor organization. challenges and additional trends facing by the organizations that implementing train- The Process of Training, Learning, ing and development programs. Education, Performance Improvement, Development, Etc. 5. A survey carried out on the managers of training and development depart- When shown the types of trends in ments to determine the existence and na- this paper, importantly, many shape chang- ture of the interests of each type of trend. es and progress rapidly in the scope of The sur-vey was conducted in twenty training and development. These changes states on groups of people who have a par- include that focuses on traditional training ticular job position as the manager of train- function and use different terminology for ing and development department, manager the label over the function. Although many of education and training department, global organizations who still like to use manager of the learning department, and the words of “education and training” to manager of performance improvement de- demonstrate the process for increasing the partment. types of skills that relate to work assign-

The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 16

ments as well as for the preparation of the magazine stated Singapore Airlines has individual for the types of jobs in the fu- been consistently rated as the best airlines ture, some other organizations like the in the world. Also, the company has the terms “learning” and “learning solution” as most modern fleet anywhere in the world. the organizations have been an important Records of its reliability and level of part in the development of learning- security is highly guarded, and its records oriented organizational. Still a number of of the exact time of departure is at the top. other organizations find barriers on ‘learning process’ and prefer to focus on the Singapore Airlines spends approx- ‘performance’ element or ‘performance imately $ 5.600 per employee per year for improvement’, where the overall scope of the training program, which is 12 percent the training program has been expanded to of payroll - the largest budgetary commi- be a function to improve performance. tment for training program of any com- Even a number of other organizations that pany in the world. By having as many as emphasize the development aspects of its 28,000 employees, the value of these in- employees and would prefer to use the vestments demonstrate outstanding com- term “development” in this regard. mitment to training and development programs. Based on Singapore Airlines' Although these differences are im- managing director, training and devel- portant, but this condition is consistent, the opment functions has become an important terms of “training and development”, “ed- link in the form in meeting key strategic ucation and training”, “learning, and per- objectives of the company. These targets formance improvement”, will be used for include services for customers, profit-- interchangeable to reflect the functionality ability, reliability, and security. Training thoroughly. For a particular sentence or programs for cabin crew, flight operations paragraph, this terminology is not meant to training for executive, management devel- be limiting or reflect a different emphasis. opment, commercial training, and compu- Combination will be used for, in reality, a ter training are the main forms of influence combination contained in the organizations on these strategic goals. Not only to direct as well as sometimes occurred in the same key strategic initiatives, the training pro- organization. The concept of the types of grams has helped build the reputation of trend which rank based on its interests the company's successful flight. Singapore properties can be shown in the following Airlines has gained a first-and second rank Table 2. in the list of the companies most respected in Asia since the list was published. Man- Application of Theory aging director attach this impressive notes to the employees and management of the As a case for the strategy implemen- airline, and the training and development tation and training programs, we can programs have played an important role in examine from Singapore Airlines and the efforts to develop and establish the Rhone-Poulenc Rorer. levels of competence in achievin this success. Singapore Airlines. As a company that has greatest benefit with a flawless record for Rhone-Poulenc Rorer. In the past twenty customer service process, Singapore Air- years ago, Rhone-Poulenc Rorer (RPR) lines Company has been in operation for has transformed itself from a French over fifty years and is currently serving company or companies crawl into a highly network airlines in the seventy-four cities successful global corporation with more in forty-one countries. In its review, Travel than 90,000 employees in more than 140

The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 17

countries. The key element in this amazing Conclusion transition process is the strategy of global human resource development (HRD). The A paradigm shift for a closer link be- company strongly emphasizes the the need tween training and development functions to recruit managers on a global scale and and aspects of strategy has been developed move these managers around the world. over the years. For a number of leaders of These international assignments strategies training and development function, it is a provide some benefits for the managers, as logical application of a development pro- well as the economic payoff values for cess which is very familiar to the human RPR. For example: resources. If the top executives in the field of training and development has under- 1. The managers become more aware gone significant experiences within the of geographic, industrial, and cultural operational lines, the strategic planning is aspects of the company. often seen as a necessary and essential process. As a result, the shift process runs 2. There is a great integration over the with ease, and levels of advancement are types of businesses, as well as ef-forts often more substantial and identifiable. to build the appropriate or proper kind of relationship. For other leaders, reluctance to change significantly can emerge in a num- 3. Increased flow of technical ber of different scope as follows. information and marketing. First, a significant paradigm shift An important part of the HR strategy must occur for the training and develop- is to provide guidance to prospective new ment staff. The member of staff had to managers. Mentor on the RPR in general is shift roles and change their thinking and a senior manager at the central office has a approach as they assess the needs, designs, brilliant reputation for technical expertise, and develops programs, distributes prod- is a good communicator, and willing to ucts and services, as well as evaluate the carry out the counseling tasks. These new results. managers maintain the relationship with the mentor or mentor on regular basis and Second, the staff member should de- undertake consultation with them on a velop a proper understanding of strategic career path as well as issues regarding planning and how this understanding can career. In actual, the mentor negotiates help the organization. This comprehension assignment forms with other executives on often reduces reluctances and provide the behalf of the manager. Essentially, the type of expertise needed to help organiza- mentor guides the career path of manager tions with strategic planning issues. in the company. Third, the parts of training and devel- The core for RPR is the truly global opment process may have to be changed so scale of managers development process, as that these programs are more closely com- the effort of RPR by recruiting more em- bined with the results of the strategic out- ployees and non-French managers to put. Starting with level needs assessment, achieve the ultimate goal of "world some steps may require the adjustments so community"’s development efforts - the that the strategic relationships and initia- people who think that the world is the tives can be integrated. center of corporate.

The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 18

Fourth, the HR staff members will must develop a better understanding about need to form the relationships with major the business issues, operational consid- clients across the entire organization. Form erations, and external issues facing by or- of this relationship is essential for pro- ganizations, particularly the strategic is- grams and services remain focused on ma- sues. This condition often requires more jor goals and objectives in the organization financial and operations knowledge for the and to build the kind of support needed to entire staff of training and development make these programs are more effective section. and efficient. Prior to strengthen the relationship And finally, the staff members of between training and development func- training and development department tions and aspects of strategy, several key should be more business-minded. They questions must be raised.

Mangkuprawira, (2004), “Manajemen Mu- References tu Sumberdaya Manusia”, Jakarta, Penerbit Salemba Empat. Charan, Ram & Wiligan, Geri, (2007), “Know-How: 8 Ketrampilan Yang Mosby, David & Weissman, Michael, Menjadi Ciri Pemimpin Sukses” , Ja- (2007), “The Paradox of Excellent: karta, Penerbit PT. Gramedia Pustaka Performa Yang Luar Biasa Justru Utama. Akan Membunuh Bisnis Anda ”, Ja- karta, Penerbit PT. Bhuana Ilmu Dessler, Gary, (2008), ” Human Resource Populer. Management” , New Jersey, Eleventh Edition, Pearson Education Interna- Pearch, Robinson, (2000), “ Strategic tional. Management: Formulation, Imple- mentation, and Control” , Singapore, Dessler, Gary, (2006), ” Manajemen Sum- McGraw-Hill Hill Book Co.. ber Daya Manusia” , Jakarta, Edisi Kesepuluh, Alih Bahasa Paramita Phillips, Jack J., (1999), “ HRD Trends Rahayu, Penerbit PT. Indeks. Worldwide: Shared Solution to Com- pete in a Global Economy ”, Texas, Elwood F. Holton dan Jack J. Phillips, Gulf Publishing Company, Houston. (1997), “ In Action Leading Organi- zational Change”, Alexandria, Va.: Wright, Patrick M., and McMahan, Gary American Society fo Training and C., (1992), “Theoritical Perspective Development for Strategic Human Resource Man- agement”, Journal of Management , Hutabarat, Jemsly & Huseini, Martani, Vol. 18, No. 2, 295-320. (2006), “ Manajemen Strategik Komtemporer: Operasionalisasi Yukl, Gary, (2009), “Kepemimpinan da- Strategi” , Jakarta, Penerbit PT. Elex lam Organisasi” , Jakarta, Edisi Media Komputindo. Kelima, Alih Bahasa: Budi Su- priyanto, PT Indeks. L. Manthis, Robert & H. Jackson, John, (2001), “ Manajemen Sumber Daya Manusia ” , Jakarta, Penerbit Salemba Empat.

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Literature search in Engage directly with the research and major organizations professional journals

Survey on the training and Validation through the development departments clients 16 TYPES OF TREND Held discussions with sen- Literature search intensive- ior officials of human re- ly in the major publications, source development in the both domestic and interna- form of workshops tional

Survey on practitioners

Source: Jack J Phillips, Ph.D., HRD rends Worldwide , 1999.

Figure 5. Research Basics on the Types of Trend

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LICENSE INCOME OF TECHNOLOGY COMMERCIALIZATION: THE CASE OF U.S. UNIVERSITIES

Wen-Ling Hsu* Chaoyang University of Technology, Taiwan, R.O.C. *corresponding author: [email protected]

Yun Ken National Yunlin University of Science and Technology, Taiwan, R.O.C. [email protected]

Abstract

After the Bayh-Dole Act launched in 1980, the activities of technology transfer between academic and industries were dramatically boosted thereafter. What factors influence the performance of technology transfer were propose by some pervious researches, most of them thought researches expenditure, patents, and published articles had significant weight. Ac- cording to some case studies of famous journal pointed out patent had no contribution, this study uses AUTM licensing survey to figure out the relationship between issued patents, published articles, and technology commercialization. The result of the study shows that published articles do have effect, but patents issued do not make significant effect on technology commercialization.

Keywords: technology transfer, license income, patent issued, invention disclosure, published articles

research expenditure in 2006 even broke Introduction 45 billion US dollars. Regarding the doubts of different inputs of research funds The status of technology transfer in Amer- generating different performance of out- ican universities can be realized by come, AUTM also investigated several indicative numbers of research results. The Association of University Technology Based on the issued patent numbers and Managers (AUTM). The annual investiga- patent application numbers, the investigation data of AUTM show that all American tion results suggested that the number of universities highly emphasize academic application cases increased year by year, researches. The research funds of all uni- while the patent numbers of each universi- versities in America were 13 billion US ty don’t grow at the same trend, and the dollars in 1991, but it increased almost research expenditure and license revenue three times within 10 years. The level of of each universities don’t reduce. funds reached to 35 billion US dollars in 2002, and there were more outstanding Crepon et al. (1998) put forward that increase in the following four years. The there was a positive correlation between The International Journal Of Organizational Innovation Vol 6 Num 3 January 2014 21

the output of business patent and the input thought that technology transfer is a proof research expenditure. However, Ameri- cess, in which, an organization or country can universities are non-profit organiza- transfers its new innovative products or tions, and they don’t need to be responsi- technology tips to other organizations or ble for shareholders. AUTM’s data in 2006 countries for use. Hameri (1996) consid- showed that license revenue for College of ered that technology transfer is an active William & Mary and University of Mon- and ambitious process to spread or obtain tana was zero, but their input of research technology knowledge, dada or experience expenditure was even higher than the ones by the procedure of authorization, external of other universities, whose license reve- investment, and purchase. nue was not zero, but the two universities’ input of research expenditure continuously Research Input and Research Outputs increased year by year, and there was no actual license revenue. It disclosed that Adams and Griliches (1996) took whether there is an apparent correlation American universities as research subjects, among the input of universities’ research and studied the relationship among paper expenditure, the research output, and the numbers, cited paper numbers, research license revenue or not, it still needs a deep expenditure, and the numbers of scientists exploration. and engineers. The research suggested that there are two main outputs, new scientists On the basis of the motive and back- and new concepts generated by academic ground above, the purpose of the study is researches. The number of scientists is to treat the mode of license revenue of more easily measured. However, new con- technology transfer in American universi- cepts are more abstract and difficult to be ties and to try to find out the mediating measured so that paper numbers and cited factors, which can raise the license reve- paper numbers are the measurement indi- nue, as the preparation direction before the cators of new concepts. The research result technology transfer. And then, there is a proves that the raise of research expendi- review of the affection of research input ture is helpful to generate more paper and output on license revenue. In light of numbers, and the β value of cited paper these concerns, this study has three pur- numbers is higher than the one of paper poses: (a) to treat the affection of resource numbers. This means the raise of research input and output on license revenue of expenditure is with a positive affection on technology transfer; (b) to find the roles of paper quality. published articles and issued patent numbers and invention disclosure numbers in Adams and Griliches (2000) further the process of technology transfer; and (c) explored related issues of research outputs to find out the important factors, which and paper numbers. The research expendi- have great affection on license revenue. ture was similarly treated as research input, and paper numbers and cited paper Literature Review numbers were treated as research outputs. The phenomenon of decreasing returns to Technology Transfer scale was found in the research output of American universities, and there was a Mansfield (1975) deemed that tech- higher level of output in private universi- nology transfer is the technology used by a ties than in public universities. Neverthe- certain organization or country, and the less, if all schools were analyzed, there technology is introduced to other coun- were still fixed returns to scale. Further- tries, regions or organizations for further more, data envelopment analysis was em- application. Zaleski and Wienert (1980) ployed by Geraint and Johnes (1993) to The International Journal Of Organizational Innovation Vol 6 Num 3 January 2014 22

analyze the research efficiency of econom- cense as a certain period, in which, one ic departments of 36 universities in UK party transfers proprietary technology, from 1984 to 1988. The results presented such as patent, trademark, and various that if research expenditure is regarded as methods to the other party to obtain re- input, it will improve the efficiency of de- wards. cision-making units, and this explains the affection of research expenditure on re- The right of license can be divided in- search input. to exclusive license and non-exclusive license. Exclusive license is usually limited In the research of R & D expendi- to the application of product or to the sales tures, invention outputs and patent num- in certain areas or region. While enterpris- bers, Pakes and Griliches (1980) ever ana- es get the technology license from schools, lyzed the data of 121 large-scale enterpris- they still need to have a long-term input in es from 1968 to 1975. The outcome R & D to commercialize the technology. showed that there is an apparent relation- Small or new enterprises have much high- ship between research expenditure and pa- er proportion of exclusive license than tent numbers, so parent numbers can be larger ones. Theoretically, more businesses used to measure the economic benefit of prefer non- exclusive license because it is research input. Acs and David (1987) veri- much more competitive and allows inven- fied that patent numbers can be as indica- tion to have an extensive application. Ow- tors to measure the performance of re- ing to this, many scholars and experts search development. When Griliches question the appropriateness of exclusive (1991) collated American enterprises’ data license. Mowery et al. (2001) pointed out from 1954 to 1987, he found that there was that exclusive license of American univer- a link between research expenditure and sities doesn’t comply with the fair spirit of patent numbers. Griliches (1994) further public investment, and if it can be put into pointed out that when it’s not easy to get public domains, it may generate more ben- related data of R & D, abundant patent efits. numbers can be an indicator to measure the invention input and output. The Establishment of Assumption and the Definition of Variables Patent Licensing and License Fees http://tw.dictionary.yahoo.com/search?ei= The so-called patent license means UTF-8&p=%E8%AE%8A%E6%95%B8 patentees still possess the complete right of patent, and only one or whole part of Research Expenditure and Output the execution of the patent is licensed to Of the Research others under specific conditions. The content of license includes manufacture, sale, According to the above-mentioned importation, usage or some of them, and document, we know that research expendi- depends on different cases. Patentees still ture usually been taken for one of the vari- own original rights, so patent license is to able of research output. The total number make licensed persons stay in a legal posi- of dissertation announcement and number tion of using patent rights and avoid to be of the published dissertation estimated for charged with patent infringement. Cho objective evidence of the college research (1988) definition of technology license is a output is an important standard to acquaint behavior that an enterprise sells its tech- with the performance of college academic nology or management skills to get re- research. The patent issued number is wards from the other party. Nevertheless, also one of the research output indexes. Millman (1983) defined technology li- Besides, not every research result will pre- The International Journal Of Organizational Innovation Vol 6 Num 3 January 2014 23

sent by patent, so the times of invention H2a ：The result of dissertation an- disclosure could be supplanted the part nouncement has the remarkable which can’t expound of patent issued positive effect on the license in- number. Therefore, this study makes some comes. hypothesis below. H2b ：The number of patent issued H1 ：The research expenditure has the has the remarkable positive ef- remarkable positive effect on the fect on the license incomes. research output. H2c ：The number of invention dis- H1a: The research expenditure has closures has the remarkable the remarkable positive effect on positive effect on the license in- published articles. comes.

H1b: The research expenditure has This study is about to discuss how the the remarkable positive effect on research expenditure affect the license in- the number of patent issued. comes, but the research expenditure be- long to research input. Published articles, H1c: The research expenditure has the number of patent issued and the num- the remarkable positive effect on ber of patent issued invention disclosure is the number of invention disclo- the research output. The research output sures. can be license incomes by passing many processes of technology transfer. So the research use the this three research output The Research Output and the which are published articles, the number of License Incomes patent issued and the number of patent issued invention disclosure for the mediating To translate the measured method of variable between research input and li- enterprise management performance into cense incomes. Therefore, this makes the measured method of technology trans- some hypothesis for the relation between fer performance, university acts just like mediating variable and license incomes the general enterprise. The university re- below. search output is similar to the product of http://tw.dictionary.yahoo.com/search? industries. It takes research output as the ei=UTF- input of technology transfer and the li- 8&p=%E9%97%9C%E4%BF%82http://t cense incomes is the output of the technol- w.dictionary.yahoo.com/search?ei=UTF- ogy transfer. Therefore, we can measure 8&p=%E8%AE%8A%E6%95%B8 the technology transfer performance which comes from the technology provider by H3: The research expenditure through measuring the financial index. Base on the mediating effect of research output above-mentioned document, this study has the remarkable effect on li- makes some hypotheses below. cense incomes.

H2: The research output has the re- Combining the above mentioned hypothet- markable positive effect for the ical ratiocination, the structure of this license incomes. study is shown on Figure 1.

The International Journal Of Organizational Innovation Vol 6 Num 3 January 2014 24

Figure 1. The Structure of Research

Research Method firms the existence of the mediating effect form research output. The date come form three sources: the date of research expenditure, patents issued, Regression Analysis invention disclosure and License incomes come from AUTM licensing survey, the da- In terms of hypotheses testing, this ta of research expenditure comes from study takes the models of hypotheses to do AUTM licensing survey of 2005, the data of the regression analysis. The models of each published articles, invention disclosure and hypothesis are following. license incomes come from AUTM licensing survey of 2006 and the data of published Model 1: Doing the simple regression articles come from ARWU’s investigation analysis of single independent variable to- of 2006. ward three intervening variables (published articles, patents issued, and invention dis- This study is about to discuss how the closures). Model 2: Doing simple regression research expenditure affects the license in- analysis of three intervening variables to- comes which use the data of 2006;The sam- ward single independent variable. ples based on the AUTM licensing survey summary compare with top 500 universities Model 1: The result of research input and which must be investigated by ARWU. Be- research output with regression analysis. cause of the huge variation of license incomes among those universities, this study β-value of research expenditure toward uses the regression analysis after logging the published articles is 0.788, and after adjust- license incomes. ing R2 is 0.616. β-value of research expenditure toward patents issued is 0.690, This study finally put the simple data in and after adjusting R2 is 0.471. β-value of order that is the top 102 universities’ out- research expenditure toward invention dis- come of technology transfer. This study uses closures is 0.771, and after adjusting R2 is simple regression and multiple regression 0.591. The three patterns have positive cor- analysis. H1 used simple regression and H2 relation significantly. which has two more independent variables uses multiple regression analysis. According to the results above, the re- http://tw.dictionary.yahoo.com/search?ei=U sults show the research expenditure toward TF- the three research outputs have quite big 8&p=%E8%87%AA%E8%AE%8A%E6%9 positive effects, and the explanatory power 5%B8 of the three patterns is quietly high. It also represents that the research expenditure is Examining the mediating effect of pub- the important variable of published articles, lished articles, patents issued and invention patents issued, and invention disclosures. disclosure, Baron and Kenny (1986) brought Hypothesis 3 was supported. up the mediating effect method which con The International Journal Of Organizational Innovation Vol 6 Num 3 January 2014 25

Model 2: The result of research output and license income with regression analysis. Step 1: Prove that significant relationship between research expenditure and published β-value of published articles toward li- articles, patents issued invention disclo- cense income is 0.627, and after adjusting sures. This step of this procedure was sub- R2 is 0.386. β-value of patents issued to- stantiated by the regression results shown in ward license income is 0.453, and after ad- Figure 2. justing R2 is 0.198. β-value of invention disclosures toward license incomes is 0.557, Step 2: The direct effect of research ex- and after adjusting R2 is 0.304. penditure and license incomes was examined. The result shown in Figure 3. There are all positive effects toward license income, and achieve the significant Step 3: All the three research outputs were level. Also, the explanatory power is quite entered solely to its direct effect on license high. It represents the published articles, incomes. Published articles, patents issued patents issued and invention disclosures are and invention disclosures are significantly, the important variables of license income. positively related to license incomes. Hypothesis 2 was supported.

Hypothesis 3 predicted a mediating effect of research output between research expenditure and license incomes.

Figure 2. Results of research expenditure and research outputs

Figure 3. Results of research expenditure and license incomes

Figure 4. Results of research outputs and license incomes

Step 4: Both the research expenditure and search expenditure and all of the interac- all the three research outputs were entered tion terms of research outputs were en- to evaluate the mediating effect. When re- tered, the results showed just one of the The International Journal Of Organizational Innovation Vol 6 Num 3 January 2014 26

interaction item (patents issued) of research output variables was not significant. Research expenditure is taken as the The influence that Research expenditure to measurement of research input. Research License incomes is drew by Published ar- expenditure means the amount invested ticles and Invention disclosures. It proves into research by schools, and research out- Published article and Mediating effect ex- puts are measured by the results of pub- ist. However, Patents issued turns to be not lished articles, issued patent number and evident. That shows patents issued (β＝- invention disclosure number. The outcome 0.121, p ＞0.05) is not simultaneously me- demonstrates that research expenditure and diating variable among published articles the scale of schools have positive relation- and invention disclosures. Therefore, Hy- ship to the results of published articles, pothesis 3 was partly supported. issued patent number and invention disclosure number. It suggests that the increase Conclusion of research expenditure can make the results of published articles, issued patent The purpose of the study is to treat number and invention disclosure number the affection of research input and output go up. Expenditures are important inputs on loyalty fees of technology transfer and of production. If without considering effi- to further realize important factors, which ciency, more inputs bring more outputs. affect license incomes, through the re- Although the result in the study is same as search output of published articles, issued the one of previous scholars, the study patent number and invention disclosure confirms that the results of published arti- number. cles, issued patent number and invention disclosure number are significant research Relationship Between Research Input outputs. and Output

Figure 5. The mediating effect result

Relationship Between Research Output and Published articles represent the re- License Incomes search outcomes of schools, and research outcomes can be as a bargaining chip to ne- After the demonstration of regression gotiate royalty fees in the process of tech- analysis, the above three research outputs nology transfer to raise the amount of royal- have a positive relationship to license in- ty. Patents are more specific subjects to be comes. It signified that the three research licensed. The more patent rights schools outputs also affect the license incomes. This have, the more subjects they can license, conclusion is similar to the one of Crepon et and the probability of license incomes will al. (1998). be higher. Invention disclosure is a way to deal with potential licensed patents, but there won’t be a necessary patent in the end. The International Journal Of Organizational Innovation Vol 6 Num 3 January 2014 27

The source of royalty fees is not just The outcome shows that the model has from patents, but also from commercial se- 42% explanatory power. When the pub- crets or copyright transfer, and invention lished articles and invention disclosure disclosure enhances the opportunities of number are simultaneously considered, is- technology or right to be licensed. sued patent number won’t be that outstanding. Even, there is a trend of negative rela- Besides, the analysis outcome of the tion to issued patent number, and this im- published articles accounts for 40% ex- plies that the affection of issued patent planatory power, invention disclosure num- number on license incomes is very weak on ber 30%, and issued patent number 20%. the basis of the three variables. The result The outcome has a gap with general percep- reverses the thought of patents creating in- tion. Published articles were an indicator to come. evaluate academic achievement in other literatures, and invention disclosure number Nevertheless, the study is analyzed by and license incomes were seldom discussed. the sole model of taking patent number as Patent seems to be the most outstanding in- mediating factor. Figure 6 is its extension of fluencing factor to license incomes. Howev- hypothetical model. After the two models er, according to the research result in the are testified by mediating effect, the result study, patent number is still apparently re- equally proves issued patent number not to lated to license incomes though their ex- be a mediating variable, and this makes the planatory power is weaker than other two role of issued patent number have different variables. explanation in the procedure of technology transfer. In term of the result, it implies that Mediating Variables With Effect on there is still a long way to go by taking ad- License Incomes. vantage of issued patents to proceed with technology transfer or even to produce rev- After the examination, published arti- enue. Proprietary of patent is not the guaran- cles and invention disclosure are really me- tee of the increase of license incomes. diating variables, but issued patent number is not. That means only parts of the assump- While other research studies explored tions are correct. Research expenditure and this topic deeper, similar concepts like this the input of human resource of schools will study are found, and the general perception produce positive affection on license in- of patent being a key in technology transfer comes via published articles and invention needs to be reviewed. Patent may play a disclosure number instead of via patent significant role in the procedure of technol- number. The outcome is surprising because ogy transfer. However, it could be a suffi- it’s different from the concept of patents cient condition absolutely not a necessary generating revenues. In order to realize the condition. Some similar researches were reason, an extra examination of mediating found by Colyvas et al. (2002) after they variables is made in the study, and a regres- undertook a study to American universities. sion analysis is done based on the three variables and license incomes.

Figure 6. Extension of hypothetical model

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Consequently, the concept of the Considerations. Journal of Personali- study is that patent number is not the guar- ty and Social Psychology, 51 antee of license incomes in the process of (6):1173-1182. technology transfer. Revenues from licensed patent are affected by the process Cho, K. R., 1988. Issues of compensation of technology transfer instead of the sim- in international technology licensing. ple concepts that more patents create more Management International Review, revenues. For the reason, there should be 28 (2):70-78. other complementary measures for patent- based technology transfers to bring bene- Colyvas, J., Crow, M., Gelijns, A., Maz- fits, for instance, excellent technology zoleni, R. Nelson, R. R., Rosenberg, transfer personnel or the stimulation of N. and Sampat, B. N., 2002. How Do government policy. Even though it’s gen- University Inventions Get Into Prac- erally believed that academic researches tice? Management Science, 48 (1)61- are still far away from the formation of 72. business opportunity, the results in the study reveal that more technology transfer Crepon, B., Duget, E. and Mairesse, J., opportunities could be created by the ap- 1998. Research, Innovation and plication of research expenditure to aca- Productivity: An Econometric Anal- demic or technology research, and the in- ysis at the Firm level. Working Paper creased effect of license incomes might be No. 6696, NBER, Cambridge, MA. higher than general awareness. So, schools could then rethink about intellectual strat- Geraint, J. and Johnes, J., 1993. Measuring egies for technology transfer in accordance the Research Performance of UK with the results. Economics Departments: An Appli- cation of Data Envelopment Analy- sis. Oxford Economic Papers , References 45:332-347.

Acs, Z.J. and David, B. A., 1987. Innova- Griliches, Z., 1991. The Search for R&D tion, Market Structure and Firm Size. Spillovers. Scandinavian Journal of Review of Economics and Statistics, Economics, 94:29-47. 69:567-574. Griliches, Z., 1994. Productivity, R&D, Adams, J. D. and Griliches, Z., 1996. and the Data Constraint,” American Measuring the Outputs of Science, Economic Review , 84:1-23. Proceedings of the National academy of Sciences, 93:12664-12670. Hameri, A., 1996. Technology Transfer between Basic Research and Indus- Adams, J. D. and Griliches, Z., 2000. Re- try. Technovation, 16 (2):51-57. search Productivity in a System of Universities. The Economics and Mansfield, E., 1975. International Tech- Econ- ometrics of Innovation, 105- nology Transfer: Forms, Resource 140. Requirements and Policies. Ameri- can Economic Association, 28 (2): Baron and Kenny, 1986. The Moderator- 372-376. Mediator Variable Distinction in So- cial Psychological Research: Con- ceptual, Strategic, and Statistical The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 29

Millman, A. F., 1983. Licensing Technol- ogy. Management Decision, 21 (3):3- 16.

Mowery, D.C., Nelson, R.R., Sampat, B.N. and Ziedonis, A.A., 2001. The growth of patenting and licensing by U.S. universities: an assessment of the effects of the Bayh–Dole act of 1980,” Research Policy , 30 (1):99- 119.

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Exploring the Relations between Service Quality and Consumer Behaviors-A case study of 85°C Bakery Café from Taiwan

Chao-Hua Li Department of Business Administration, TransWorld University, Taiwan, R.O.C [email protected]

Hsien-Bin Wang* Department of Business Administration, TransWorld University, Taiwan, R.O.C *Corresponding Author: [email protected]

Abstract

It is a key competitive advantage in the coffee franchised industry on service quality. This paper investigated the relation between the service quality and consumer behaviors. A case study of 85°C Bakery Café was taken through conducting a survey of 1,124 questionnaires to 21 stores in Taichung, Changhua and Yunlin County of Taiwan. There were significant difference in the consuming behavioral intentions and perceptions of service quality among customers’ characteristics. Findings were as follows: (1) perception of service quality and consumer behaviors had remarkable correlation: need recognition in physical demands for coffee had a slightly positive relationship with the reliability of service quality; (2) need recognition in special soft drinks had slightly negative relations with the reliability and responsiveness of service quality. (3)Age, demographics variables made remarkable impact on consumers’ perception of “reliability” while education made significant differentiation in the perception of “reliability” and “responsiveness.” (4) Age, education and monthly income appeared to have significant differentiation in consumer behaviors. Practical suggestions were made regarding simplified procedures for on-site production and the training of service personnel to reach high service quality.

Keywords: service quality, consumer behavior, the bakery café industry

Introduction dustry and argues that the bakery café industry has unique characteristics in consumer Most research defines food service in behaviors and service quality. Lately, Tai- the category of “hospitality” or with ‘tour- wan's economic standard of living has ism,’ which mostly contributes to both ho- reached a level in which the people of Tai- tels and tourism. This study explores service wan are able to enjoy the leisure life and quality in the context of the bakery café in- food. Established in2003,85°C Bakery Café

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currently has over 700 branches located ties may account for the reasons why con- within Taiwan, Australia, China and Ameri- sumers come to a coffee shop. In this re- ca in 2012 (source: website of 85°C Bakery gard, consumer behaviors to choose a coffee Café). 85°C Bakery Café holds the idea that shop and it can be interpreted as the con- it could serve the five-star coffee and breads sumer decision-making process. for the customers with low price. Therefore, this rapidly growing store invokes a re- Consumer decision-making process search interest in examining if customers’ perceptions on service quality play an influ- Consumer decision-making process ential role in customers’ purchase behaviors. means that in the evaluation process, there are two or more decisions making before It is assumed that the better perceptions and after purchasing products or services. on service quality are, the higher customer Such behaviors are intrinsic to consumer satisfaction is and the higher customer loy- experiencing knowledge and integrated into alty will be. This study was conducted to the final decision (Mowen, 1987). To focus assess the relations between service quality on the decision-making process, the “EKB” and customer behaviors. The ultimate pur- model (Engel et al., 1968) consists of four pose of this study is to understand the cus- principals, the input, information pro- tomers’ buying decision-making process of cessing, decision process, and variables in- café customers, and the dimensions of fluence decision process, is applied to un- SERVQUAL in the café industry. Then, a derstanding the factors of internal/external model integrating customer demographics, interactions. Rice (1993) suggested a feed- service quality, and customer behaviors is back loop for developing the EKB model. suggested and empirically tested in the cof- Foxall (2005) also emphasized the im- fee industry. portance of evaluation after purchase for future purchase patterns. Yoon and Literature Review Uysal(2005) purposed to improve and sustain the competitiveness by creating positive Consumer behaviors post-purchase behaviors with higher consumer satisfaction. There are five processes Consumer behaviors refer to the deci- of the EKB’s: problem recognition, infor- sion-making process before and after in- mation search, alternative evaluation, pur- volving, receiving, consuming and dealing chase, and post-purchase evaluation, and with products services (Reynolds & Wells, these are taken as the consumer decision- 1997). The profiles of consumer behaviors making processes in this study, and the are diverse. It can be as simple as routines in questionnaire is also designed based on such personal purchases, such as the purchase of a structure. In this study, the market seg- affixed supplement or the daily necessities, ment is determined by the demographic fac- or can be as complex as the purchase of tors, including age, education, occupation, houses and cars, involving complex deci- lifecycle stages and economic situation. Hy- sion-making assessment and requiring in- pothesis one is stated as follows: formation and product knowledge. The physical buying behavior in cafe industry H1: Demographic variables appear signifi- can be analyzed from the following aspects. cant effects on consumer behaviors in the The decision-making process related to con- decision-making process. sumer purchase and the factors are considered. The comfortable atmosphere con- Service Quality structed by a coffee shop, the flavor of coffee or to meet requirements of social activi- The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 32

Service quality, expectations prior to Service quality in a coffee shop is in- purchase and perceptions of company per- volved with a combination of services items formance after purchase, is considered as such as music, drive-through services and subjective judgment and feelings of custom- newspaper to stay competitive. For example, ers in the services process and results. In Starbucks offers free wireless Internet ac- other words, a process evaluation depends cess to its customers, and this service capa- on perceptions and psychological satisfac- bility may heighten the importance of ser- tion and feelings. Hernon and Nitecki vice innovation to meet the satisfaction of (1999) emphasized the gap between service the service quality. Parasuraman et al. provided and customer expectations and fo- (1988) included five dimensions in service cused on reducing the gap. From the above quality as (1) Tangibles- physical facilities, arguments, the interaction between consum- equipment, and staff grooming; Reliability - ers and service providers is critical for the ability to perform the promised service measuring service quality as service provid- dependably and accurately; Responsiveness, ers could easily understand consumers and the willingness to help customers and pro- identify the actual needs through interac- vide prompt service; Assurance- covered by tions (Sureshchander et al, (2002). knowledgeable and courteous staff and their trust and confidence of inspiration; Empathy Parasuraman, Zeithaml and Berry - about the care provided by a company and (1985, 1988) probed four kinds of service personal attention. Such dimensions could industries(banks, credit card industry, secu- be used as the characteristics of service rities firms, and product maintenance indus- quality in a coffee shop. For example, re- try) and conduct depth interviews and focus sponsiveness refers to customer interactions. group interviews to develop a conceptual And in recognizing the importance of cus- model of service quality and proposed tomer interaction with service provider in SERVQUAL (service quality) scale, this delivering service and creating value, practi- scale has been widely used in a variety of tioners consider service quality as a driver industries. And the five dimensions in of corporate marketing and financial per- SERVQUAL focus on the human aspects of formance (e.g. Gummesson, 1994).In many service delivery (responsiveness, reliability, studies, customer's service quality rating has assurance, and empathy) and tangibles ser- significant influence upon customer satis- vices. Ladhari (2009) recommended that the faction, attitudes and repurchases (e.g. Park SERVQUAL model, as a good scale for as- Jung-hwan, 1999). Therefore, a complete sessing the service quality in different in- management strategy for service quality is a dustries, allowed choosing the most im- necessary and basic demand for a bakery portant dimensions for ensuring reliability café to stay competitive in Taiwan. A com- and validity in specific services. Service plete service quality innovation strategy quality is regarded as the core variable in should consider understanding customer be- the SERVQUAL scale (Oh and Parks, haviors. This study therefore presumes a 1997), and the scale could best meet the re- correlation between consumer behaviors and search objective. As a result, Hypothesis the service quality perception. Hypothesis two is stated as follows. three and four are stated as follows and Fig- ure 1 presents the theoretical framework. H2: Service quality appears significant differences among demographic variables. H3: Consumer behaviors show positive correlations with service quality perception Importance of service quality for the context in a bakery café. of a bakery café

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Figure 1. Conceptual diagram for tests of all variables.

Methods Each survey sent to customers through contacts of internal employees so that the Sample and Research Procedures sample respondents understood the purpose of surveys and had motivation to reflect During a three-month period in 2010 their consumption experience in the stores. and 2011, we gathered data from 21 stores On average, researchers distributed 50 ques- of 85°C Bakery Café in three regions of tionnaires to each store, and 100 sample re- Taiwan. The three regions have the ad- spondents for three stores in Taichung City vantages of geographical convenience. We with greater consumption potential. In total, delivered directly in the franchised firms in 1250 questionnaires were distributed to the business districts that provide us access to customers of 21 stores of 85°C Bakery Café have convenient samples. The 21 stores in Taichung, Changhua and Yunlin County were chosen based on two criteria. The first of Taiwan. A total of 1124 copies of ques- criterion was the relative level of service tionnaire were valid, and the return rate was quality sustained by a store (Hall and Por- 90%. Respondents held the following jobs: teus 2000). We detect the quality level 48 percent were university students, 34 per- through the quality certificate provided by cent were in business and service industries, County Public Health Bureau. The second 9 percent were government or military offi- criterion was the store history: this research cials, and 9 percent were in the industries of observed that sustaining a certain service agriculture, forestry, animal husbandry and quality position in a market store attracts fisheries. With the first two peak frequen- consumers. cies of a sample of descriptive statistics was shown in Table 1.

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Table 1. With the first two peaks frequency analysis of a sample of descriptive statistics

Items Frequency % Gender Male 516 46 Female 608 57 Age 19~30 years old 635 56 31~40 years old 185 16 Marital status Unmarried 707 65 Married 387 35 Education Senior high school 252 22 College/University 599 53 Occupation Student 540 48 Business and Services 383 34 Monthly income Below NT$10,000(US$333.4) 329 29 NT$10,001~30,000(US$333.4-1,000) 468 42

Variables need recognition had four factors, and we named them as (1) physical demands for Consumer’s perception of their coffee-thirsty, refresh, and regular coffee consumption behavior. (2) desires for social activities-to get together, to discuss matters, and to give Procedures used by the EKB model treats, to celebrate festivals and to kill (Engel et al., 1995) were used in the theo- time, (3) need for special soft drinks- Sea retical development of our measures of Salt Coffee, tea, smoothies, and milk tea, consumer’s perception of their consump- (4) need for bakery-birthday cake, bread, tion behaviors. We adapted items from refinements and gifts. Information research previous research and developed them had two factors: (1) information search through interviews with one store manager from physical channels-word of mouth, in order to capture consumption behaviors physical stores, or physical advertisement, specific to coffee franchised stores. We (2) information search from websites. The asked three consumers to assess the word- dimension of evaluations had four factors: ing and appropriateness of the items that (1) promotion-coupons, pre-paid cards, or we developed. The final assessing scales value cards, (2) evaluation for coffee and were specified as information search, al- cake: Price, taste, and appearance, (3) ternative evaluation, purchase, post- evaluation for bread, (4) delivery. We fur- purchase and evaluation problem recogni- ther tested reliability and found good reli- tion, which were literally meaningful for ability ( α >= 0.72) for ten factors (Table the application to the bakery café industry. 2).

Overall, we used 45 items represent- Consumers’ perception of service quality ing five sub-dimensions to measure consumer’ behaviors. We conducted a princi- In this study, 22 items were derived pal component factor analysis with vari- from SERVQUAL by Parasuraman, max rotation and found that all 45 items Zeithaml, and Berry (1985, 1988, and loaded on ten factors with an eigenvalue 1991) with four items for Tangibles, five over 1. Ten factors explained the decision for Reliability, four for Responsiveness, making process where a consumer comes four for Assurance, and five for Empathy. to a coffee shop (see Table 2). First of all, A principal component factor analysis with varimax rotation produced three new factors (Table 2): the first and most consid- The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 35

eration in service quality was the reliabil- tomers, and food ordering process. ity regarding food safety, courtesy to cus-

Table 2. Factor Analysis and Reliability

Eigen Variance Cumulative of variance Factors Cronbach’ α value Explained explained % Consumer Behaviors 1. Physical demands for coffee 9.26 20.58 20.58 0.75 2. Desires for social activities 4.52 10.03 30.61 0.74 3. Need for special soft drinks 3.50 7.77 38.38 0.76 4. Demands for bakery 2.49 5.53 43.91 0.73 5. Information search from physical 2.09 4.65 48.55 0.75 channels 6. Information search from websites 1.92 4.27 52.82 0.76 7. Promotion 8. Evaluation for coffee and cake 1.58 3.51 56.33 0.74 9. Evaluation for bread 1.46 3.24 59.57 0.76 10. Delivery 1.29 2.88 62.45 0.75 1.224 2.72 65.17 0.76 Service Quality 1. Reliability 11.52 47.48 47.48 0.82 2. Responsiveness 1.60 6.30 52.28 0.89 3. Tangibles 1.08 4.89 59.67 0.88

The second factor was from items fee, and desires for social activities. that talked about being active to offer ap- Monthly income made significant differ- propriate service, fulfilling specific needs ence in coffee demands and information demanded by customers, and offering search channels from website wherein knowledge of products to build up cus- consumers with monthly income between tomers’ trust. Then, the second factor was NT$ 10001 and 30000 emphasized more named as responsiveness. The third factor the availability of information from web- was the tangible physical facilities, tools sites than those with monthly income over and equipment for the provision of NT$ 70001. Thus, we found support for services, personnel appearance. The three Hypothesis 1: Demographic variables ap- scales demonstrated high reliability ( α >= peared significant effects on consumer be- 0.82) (Table 2). haviors in the decision-making process.

Results Age made significant difference for the perceptions of service quality wherein Table 3. reports ANOVA for the ef- 41~50 consumers emphasize more reliabil- fects of demographic variables on con- ity in service quality than those more than sumption behavior. Age made significant 51 years (p = 0.017). Besides, consumers differences in the Physical demands for with master’s degree emphasized more coffee, desires for social activities, infor- responsiveness in service quality than mation search from physical channels and those with educational level in junior high from websites, evaluation for bread, and schools (Table 3). We found the results delivery. Besides, educational level made would partially support Hypothesis 2: The significant differences in the need for spe- significant differences exist in the relation- cial soft drinks, physical demands for cof ship between demographic variables and

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Table 3. ANOVA for demographic variables impact on consumption behavior and service quality

Independent variable Dependent variable F value Significance Scheffe’s multiple comparisons Age Physical demands for coffee 7.012 0.000*** 41~50 years old>less 18 years old Desires for social activities 4.425 0.002** 41~50years old>more than 51 years old Information search from physi- 2.769 0.028* 41~50 years old>more than 51 years old cal channels Information search from web- 7.147 0.000*** 41~50 years old>more than 51 years old sites Evaluation for bread 3.048 0.018* 41~50 years old > more than 51 years old Delivery 3.661 0.006** 41~50 years old>more than 51 years old

Marital status Information search from physi- 6.724 0.028* married>unmarried cal channels Promotion 4.087 0.044* married < unmarried Education Physical demands for coffee 5.882 0.001** Junior high school ＜Above or equal to Master’s Desires for social activities degree Need for special soft drinks 4.350 0.005** Bachelor’s degree> Senior high school 5.290 0.001** Junior high school>Above Master’s degree Occupation Desires for social activities 4.548 0.001** Agriculture, forestry, fishery, animal husbandry ＜military and government workers Monthly income Physical demands for coffee 5.595 0.000*** Income under NT$10000less 18 years old

Education Reliability 2.973 0.032* Above or equal to Master’s degree>senior high school Responsiveness 5.480 0.001** Above or equal to Master’s degree>junior high school Note: *p<0.05, **p<0.01, ***p<0.001

ery café and the perceptions for service service quality, only limited to age and quality. education. Next, we used ordinary least square Table 4 reported the correlation of regression analysis to predict the percep- consumer behaviors and service quality. In tion of service quality through the con- general, our factors of consumer behaviors sumption behavior. According to the had the slightly significant positive rela- findings in Table 5, consumption in special tionship with service quality, except the drinks would predict overall the negative need for special soft drinks (r = -0.21, - perception of service quality in dimensions 0.12, -0.19). The highest correlation was of reliability, tangible and responsiveness detected between “physical need for cof- (β = -0.34, p < 0.05, β = -0.21, p < 0.05, β fee” and “tangibles” (r = 0.24). The high- = -0.27, p < 0.001, respectively). As far as est correlation showed that when consum- tangible was concerned, physical demands ers come to the café for coffee consump- for coffee, need for bakery, search in phys- tion, they emphasize tangible quality of ical channels ( β = 0.19, p < 0.05, β = 0.20, service. Thus, we found support for Hy- p < 0.05, β= 0.17, p < 0.05, respectively). pothesis 3: The positive correlation exists between the consumer behaviors in a bak- The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 37

Table 4. Analyses for the correlations between service quality and consumer behaviors

Desire- Need- Physical Need- Search- Search- Promo- Evaluation- Evaluation- Relia- Respon- social special Delivery Tangibles demand bakery physical websites tion coffee & cake bread bility siveness activities drinks

Physical 1 demand

Desire- social 0.44** 1 activities

Need-special 0.33 0.54** 1 drinks

Need-bakery 0.11 0.21 0.23 1

Search- physical 0.32 0.51 0.32 0.54** 1 search - websites 0.23** 0.33** 0.35** 0.35 0.37 1

Promotion 0.21 0.31 0.25 0.23 0.22 0.32 1

Evaluation – 0.40** 0.28 0.14 0.11 0.21 0.27 0.29** 1 coffee & cake

Evaluation- 0.35 0.23 0.27 0.45** 0.32 0.21 0.33 0.51 1 bread

Delivery 0.39** 0.26 0.19 0.31 0.25 0.28 0.35** 0.33 0.21 1

Reliability 0.20** 0.08 -0.22** 0.19** 0.12* 0.04 0.14* 0.07 0.05 -0.08 1

Responsiveness 0.15* 0.05 -0.12 0.19** 0.23** -0.04 0.18** 0.02 -0.05 -0.07 0.32 1

Tangibles 0.24* 0.06 -0.19* 0.12 0.10 -0.03 0.13* -0.04 -0.04 -0.08 0.25 0.21 1 Note: **p<0.05, (two-tailed test

Table 5. Results of Regression predicting service quality

Variables Reliability Tangible Responsiveness Intercept 3.01 2.809 3.422 Physical demands .16* .19* Need-special drinks -.34** -21** -.27*** Need- bakery .21* .20** Search-physical channels .17**

R2 0.15 0.16 0.99 ∆R2 0.12 0.12 0.06 ∆F 4.26*** 4.38*** 2.616**

Readiness and willingness to help empirical findings (Barber and Goodman customers and employees should provide 2011; Chen and Hu, 2009), would suggest prompt timely services were emphasized a more detailed symbolic value perception and demanded by consumers with higher from service quality attributes involving education. This result showed that educa- with coffee quality, food and beverage, tion might teach people to be alert to re- and extra benefits. sponsiveness in manners performed by service attendants. The findings of this Regarding the relationship between study were consistent with Yuan et al.’s service quality and customer behaviors, (2012) notion of the importance of recog- the slightly negative correlation existed nizing customers' varying preferences. The between the need for special soft drink and results, different from other studies and the perceptions of three dimensions of ser- The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 38

vice quality (r = -0.215 in reliability; r = - This finding indicated that instruments to 0.123 in tangibles; r = -0.193 in respon- measure service quality should incorporate siveness). In other words, the more fre- industry features in order to reflect correct- quency in beverage consumptions, the less ly the perception of service quality. satisfaction they have for the perception of the service quality. The hypothesized posi- Practical Implications tive relationship of perceptions with consumer behavior was not supported in this According to empirical results, among study. This result could be attributed to the three dimensions of service quality, some complexity in the beverage production consumers concern more “reliability” and process. All soft drinks were prepared on “responsiveness,” especially for those who the spot for customers in an open counter. have long-term experience of purchases of The making process is involved with the special soft drinks. For practical implica- variant amount of sweetness, additives, tions, first, it was recommended to simpli- and water according to individual’s prefer- fy the production process for special soft ence. Therefore, long-waiting time might drinks so that customers didn’t take a long cause the dissatisfaction with service time to wait for on-site production. Sec- quality for youngsters (less than 18 years ond, service personnel should respond to old) while they had the most frequent con- the needs of customers in longer cashier sumptions. Besides, the slightly negative lines or in waiting for on-site production correlation existed between the younger so that complaint can be reduced. Third, and the responsiveness. This result showed for the veteran coffee drinkers, coffee se- that though a customer can get fresh, ries products were mainly sold goods. The made-to-order soft drinks, the service at- training of operators and employees might tendants may show the lack of initiative to not be ignored. A set of procedures and care for customers’ emotional uneasiness. quality control standards could maintain This finding would support previous stud- consistency and stability of the food and ies (e.g. Cronin et al., 2000; Tam, 2004) by beverage quality. To strengthen, the exper- confirming products as the determinant tise was able to respond to customer prob- attributes of service quality in the coffee lems, as well as handle crises immediately. industry. Coffee quality, and food and These measures enabled employees to en- beverage dimensions reflected the deter- hance service quality. minant attributes of service quality for explaining both functional value and symbol- This study had shown that segment ic value perceptions. markets in beverage were prevalent. This study suggested that the future studies From the analysis carried out, the should focus on segmented markets and SERVQUAL model appears to be appro- investigate differences in need recognition priate in three dimensions in the coffee in relation to psychological and physical industry: tangible, responsiveness, and re- factors. Besides, veteran consumers might liability. Items for assurance and empathy have different perception of service quali- were overlapped with reliability and re- ty, compared to ordinary consumers. Fu- sponsiveness, respectively. This meant the ture studies could examine the effects of SERVQUAL’s discriminant validity for relational quality on influencing service this study differs from the original study provision and customer loyalty. According carried out by Parasuraman et al., (1988). to King and Garey (1997), relational quali- This study showed lack of support for the ty refers to “customer perceptions and discriminant validity of SERVQUAL evaluations of individual service employ- which was reflected in the factor analysis. ees’ communications and behavior, such The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 39

as respect, courtesy, warmth, empathy, and pecially in services with a high level of helpfulness. Researchers could further see interaction between customers and em- if the relational quality mediated the con- ployees. sumer’s perception of service quality, es-

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DEVELOPING RESEARCH ON VEHICLE TIRE PRESSURE DETECTION AND ADJUSTMENT SYSTEM

Shu-Lung Wang Department of Mechanical Engineering Taoyuan Innovation Institute of Technology, Taiwan, R.O.C. [email protected]

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

Nai-Hao Yin Department of Rehabilitation Taoyuan Armed Forces General Hospital, Taiwan, R.O.C.

Abstract

In order to meet the expectation for energy saving and pollution reduction, the automotive industry has focused on the development of the vehicle exterior design, with particular emphasis on ECU microcomputer control. However, most of the researches focus on the depot of the tire pressure monitoring system. In this research, the study concentrates on the investigation of the tire pressure adjustment, as well as the design and development of a tire pressure detection and adjustment system. The result of the study shows that the tire pressure would change dramatically when the vehicle travels for a long distance leading to a possible deflated tire. By detecting the tire pressure with control to adjust tire pressure, the vehicle is able to maintain a regular and ordinary tire pressure. The Taguchi method is used to optimize the design parameter for tire pressure detection and adjustment system.

Key words: ECU microcomputer control, tire pressure detection system, tire pressure control, Taguchi method

tire pressure, deflation or inadequate tire Introduction pressure during long distance travel can often threaten driving safety. To make up Vehicles available on the market are for the inadequacy of the tire pressure de- only equipped with the tire pressure detec- tection system, this study proposed an in- tion system, but the tire pressure cannot be novative concept to control tire pressure controlled and adjusted. Drastic changes in by using aerator with pressure sensitive switch. When the pressure sensitive switch

42 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

senses the tire pressure being below the set load becomes heavier to increase fuel con- value, it actuates the aerator. When the tire sumption while the steering wheel be- pressure reaches the specified pressure, the comes heavier as well. Slight depression action of the aerator is stopped by the may occur in the middle of the tread to re- pressure sensitive switch. duce the tire drainage. As a result, the vehicle can easily skid in high-speeding trav- Currently, tire pressure monitoring el in rainy days. After long time use, une- systems can be divided into Direct Tire ven wear state with shallower tread on Pressure Monitoring System and Indirect both sides may set in. When the tire ro- Tire Pressure Monitoring System. The tates, the internal temperature can easily former is to directly measure the tire pres- rise due to the substantial deflection of the sure by installing pressure sensors and tire wall, resulting in the risk of flat tire in transmitters in the tire. The receiver in- high-speed travel. When the tire pressure stalled in the vehicle receives the signals to is too high, the central part of the tread display and monitor the tire pressure. may protrude, so that the tire cannot fully When the tire pressure is too low or when contact the ground. The drainage perfor- there is deflation, the system automatically mance of the tire is also poor. Although alerts. The latter is not to measure the tire the vehicle engine load is lighter, it is in pressure directly but use the wheel speed the danger of flat tire due to too high pres- sensors of the vehicle ABS (Anti-lock sure. For a long time, the uneven wear Braking System) system to compare the state with shallower central part of the times of rotation of the four tires. When tread occurs, and the narrower tread reduc- the pressure of a tire is too high or too low, es vehicle stability while riding comfort the tire diameter becomes larger or small- deteriorates due to poorer shock effect of er, resulting in changes in the rotation hardened tire. speed of the wheel accordingly. Therefore, the times of rotation per kilometer differs Therefore, too high or too low tire from the other three tires. In this case, pressure causes uneven tire wear to reduce warning signals are displayed in the vehi- the tire service life. The correct tire pres- cle computer. Due to a high error rate, it sure can make the tread in contact with the cannot judge the condition of more than ground at the maximum area. In this case, two tires with deflation and the situation of the tire grip and drainage performance are speed above 100 km/h. Direct Tire Pres- the best, so that the engine power can be sure Monitoring System, with the pressure fully played to achieve the most fuel- sensor and radio transmitter installed in efficient status. Hence, if the vehicle tire each tire, has more accurate warning sig- pressure can be kept normal, the driving nals. Moreover, when the tire is punctured, will be safe and comfortable. Moreover, tire pressure quickly decreases, and pres- the appropriate contact of tire and ground sure sensors directly transmit the relevant can save fuel consumption. data to ECU (Electronic Control Unit). The warning message is immediately sent Multi-Factorial Experimental out by the tire pressure monitoring system. Design Steps Therefore, for both new and used vehicles, the Direct Tire Pressure Monitoring Sys- Taguchi Orthogonal Array Factor tem is the most commonly used tire pres- Level Setting sure monitoring system. When the tire pressure is low, the contact area of the This paper discusses the impact on tread with the ground increases, so that the air flow velocity and time in the automatic friction force is larger. The vehicle engine inflation of vehicle tire. The airflow out- 43 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

going time is smaller the better, which is factors are pneumatic electromagnetic used as the quality measurement method. valve (A), pneumatic pressure regulating Next, according to the experimental results valve(B), air compressor pipe size(C), of other literature, this study summarized bend pipe angle(D). Each control factor four influential factors as the control fac- has three levels as shown in Table 1. tors for the experimental analysis. The four

Table 1. Experimental control factors and levels

Control factor Level 1 Level 2 Level 3 A Pneumatic electro- 0.5 ㎏f/ ㎝2 1 ㎏f/ ㎝2 1.5 ㎏f/ ㎝2 magnetic valve B Pneumatic pressure 35psi 45psi 55psi regulating valve C Air compressor pipe 5X8mm 6.5X10mm 8X12mm size D Bend pipe angle 30° 45° 60°

Orthogonal Array Selection there were nine experiments. The experiments were completed in the sequence of The orthogonal array is represented the orthogonal array. ABCD in Table 2 by La (bc), where L is the orthogonal ar- represents the control factors including ray; a is the total number of experiments, pneumatic electromagnetic valve, pneu- representing the number of columns repre- matic pressure regulating valve, air com- sents the times of experiments in the or- pressor pipe size, and bend pipe angle. thogonal array; b is the number of levels, Each factor has three levels. Taguchi L9 representing that design parameter has b orthogonal array with nine columns is different values, which is determined by mainly for the configuration of factors or the number of design parameters before interactions. The orthogonal array has four the design of levels to analyze the impact major factors as the principal effects. Alt- of various design parameters on target hough there are slightly interactions, the function with least number of experiments; experiment considered the experimental c is the design parameter or factor, when scale and neglected the existence of the making the table, the design parameters interaction of ABCD. Nine 9 experiments are represented by rows. The purpose of were conducted; the orthogonal array was orthogonal array is to reduce the number the saturated orthogonal array filled up of experiments to get unbiased data. with control factor.

In this experiment, the Taguchi L9 Since the tire pressure can only be (34) was used, as Table 2, to conduct the monitored but not controlled in current numerical experiment of the relationship vehicles, this study proposed a design of between airflow speed and time in the au- tire pressure control method by installing tomatic inflation of tire. Without consider- the aerator with pressure switch to control ing the interaction of the factors, the the tire pressure. When drastic changes in Taguchi L9 (34) orthogonal array is a very tire pressure, deflation or low tire pressure efficient three-level orthogonal array. The occur in high-speed travel of the vehicle, experiments were numbered 1~9, and thus the pressure sensed by the pressure switch 44 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

is lower than the setting value. In general, When the tire pressure reaches the normal the idealist tire pressure is 80% of the value, the action of the aerator will be can- maximum tire pressure (MAX PSI) (it var- celed. The process should be very short for ies from brands, models, and sizes, but not time considerations. Moreover, to lengthen a fixed value). This paper sets the ideal tire the service life of various parts, the parts pressure as 32 psi. When the tire pressure should be adjusted to the optimal state by is lower than 26 psi, the aerator is actuated using Taguchi experimental method to by the tire pressure adjusting system. achieve the overall optimal efficiency.

Table 2. L9 (34) orthogonal array

EXP. A B C D 1 1 1 1 1 2 1 2 2 2 3 1 3 3 3 4 2 1 2 3 5 2 2 3 1 6 2 3 1 2 7 3 1 3 2 8 3 2 1 3 9 3 3 2 1

Figure 1. Central air chamber mechanism’s main axis and sleeve body

is travelling, the tires will continuously Principles For The Design Of The Tire rotate. Hence, when the pneumatic tube is Pressure Regulation And Control System connected with the valve, the pneumatic tube will be wrapped by the drive shaft Innovative Design of Tire Pressure System due to the rotation of the wheels. To over- Mechanism. come the technical problem, we made innovative attempts in the design of the drive In the design process, we encoun- mechanism. A hole was drilled at the centered some difficulties. When the vehicle tral axis of the drive shaft and a hole in the 45 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

drive shaft close to the tires to connect the neck that the pneumatic tube is wrapped valve by using the connector. In this way, by the drive shaft. Figure 1 illustrates the pneumatic tube and tire can rotate syn- central air chamber mechanism’s main ax- chronously to solve the technical bottle- is and sleeve body.

Figure 2. Tire pressure regulation and control system circuit diagram

Table 3. L9 (34) orthogonal array experimental data

Pneumatic elec- Pneumatic pres- Pneumatic pipe Bend angle tromagnetic sure adjustment size valve (A) valve (B) Level 1 1.917 2.355 1.232 1.529 Level 2 -0.75 -0.349 2.778 -0.887 Level 3 0.674 -0.166 -2.17 1.198 Effect 2.667 2.704 4.948 2.416 Rank 3 2 1 4

This study discussed the impact on Experimental Results and Discussion air flow speed and time in the automation tire inflation process. Short airflow out- Effects of major parameters going speed is better. To more easily observe the effects of various control factors, a response table as shown in Table 3 was designed based on the S/N ratio data com-

46 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

puted according to Table 3. The response sponse table. The descending order of fac- diagrams and tables can directly compare tors by effect is air compressor pipe the sequence of factors in priority. S/N ra- size(C), pneumatic pressure regulating tio response diagram can easily display the valve (B), pneumatic electromagnetic optimal combination of parameters in this valve (A), and bend pipe angle (D). study. This study we selected four factors The factor effect is calculated by out of the limited number of factors as the taking the average S/N ratio of the factor control factors. With the various parameter at ll levels. For example, regarding factors data, it requires a few experiments or sim- A, B: ulation by using the Taguchi method and it η = ( η +η +η )=1.917(dB) takes the least time to achieve the satisfac- η = ( η +η +η )=--0.75(dB) tory optimization effect. However, its dis- η = ( η +η +η )=0.674(dB) advantage is the fixed level. The optimiza- η = ( η +η +η )=2.355(dB) tion result can still be improved. η = ( η +η +η )=--0.349(dB) η = ( η +η +η )=-0.166(dB) Maximum Deflation Test With Optimal Parameters Optimal Parameter Combination This study used the optimal control Based on the Taguchi method, re- parameter combination (A1B1C2D1) as garding the nine groups of the data of the shown in Table 5 to adjust the tire pressure orthogonal array as shown in Table 3, the control system to observe the maximum shortest air flow outgoing time occurs in deflation air flow that the system can bear. L1 and the value is 0.55sec. The optimal Based on the study, the maximum defla- parameter combination of the S/N ratio tion airflow is 9.2(L/min). The tire cannot calculated on the basis of the smaller-the- be inflated when it is above 9.2(L/min). better equation is not among the nine groups of the orthogonal array. Therefore, Conclusions the optimal parameter combinations were used as shown in Table 6 to conduct an To overcome the technical problem of experiment to compare and validate with pneumatic tube being wrapped with the L1. In the experiment of the parameter drive shaft due to wheel rotation, this combination of pneumatic electromagnetic study proposed an innovative design in valve A1(0.5 ㎏f/ ㎝2), pneumatic pressure drive mechanism. A hole was drilled in the regulating valve B1(35psi), air compressor central axis of the drive shaft and in the pipe size C2(6.5X10mm), bend pipe angle drive axis close to the tire to connect with D1(30°) (A1B1C2D1). According to the the air valve, in order to realize the syn- experimental analysis results, the air flow chronized rotation of the pneumatic tube outgoing time is 0.51 sec, which is better and tire. The proposed design can over- than any parameter combination in L9 or- come the technical bottle that pneumatic thogonal array. The group of parameters is tube may be wrapped by the drive shaft. as shown in (A1B1C2D1). Table 4 com- The ranking of the parameter factors by bined with Figure 3 show the optimal pa- effect in descending order is: air compres- rameter S/N ratio response diagram, which sor pipe size(C)>pneumatic pressure regu- is the optimal parameter combination of lating valve (B) >pneumatic electromag- this experiment. The sequence of the major netic valve (A) >bend pipe angle (D). The factors of the tire pressure air flow out- analysis using the Taguchi experimental going time is as shown in the S/N ratio re- method found that the optimal control pa- 47 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

rameter combination of tire pressure regu- that the maximum deflation airflow is lation and control system is: pneumatic 9.2(L/min). The tire cannot be fully inflat- electromagnetic valve A1(0.5 ㎏f/ ㎝2), ed if it is above 9.2(L/min). At present, tire pneumatic pressure regulating valveB1 pressure regulation and control system is (35psi), air pipe size C2(6.5X10mm), bend still in the stage of prototype development. pipe angleD1(30°). By using this group of The findings of this study can be a refer- the optimal parameters, this study con- ence to the future improvement of the tire ducted the deflation experiment to observe pressure regulation and control system. the maximum deflation airflow that tire pressure regulation and control system can bear. The experimental results revealed

Table 4. Airflow outgoing time

EXP. A B C D Airflow MSD SN Ratio outgoing (dB) time (sec.) 1 1 1 1 1 0.55 0.303 5.193 2 1 2 2 2 0.83 0.689 1.618 3 1 3 3 3 1.13 1.277 -1.06 4 2 1 2 3 0.65 0.423 3.742 5 2 2 3 1 1.51 2.28 -3.58 6 2 3 1 2 1.32 1.742 -2.41 7 3 1 3 2 1.24 1.538 -1.87 8 3 2 1 3 0.9 0.81 0.915 9 3 3 2 1 0.71 0.504 2.975

Figure 3. S/N ratio response diagram

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Table 5. Deflation/air flow outgoing time

Deflation air flow Air flow outgoing time 1.5 0.06 2 0.09 2.5 0.13 3 0.18 3.5 0.24 4 0.3 4.5 0.37 5 0.51 5.5 0.63 6 0.72 6.5 0.86 7 1.01 7.5 1.16 8 1.31 8.5 1.49 9.2 1.65 9.3 3 unable to fully inflate

References

Calwell, C., Ton, M., Gordon, D., Reeder, T., Olson, M., Foster, S.,2003). California State Fuel-efficient Tire Report, vol. II. California Energy Commission,600-03- 001CR,/http://www.energy.ca.gov/ reports/2003-01-31_600-03- 001CRVOL2.PDFS.

Chen, M.S., A Study on Automobile Tire Pressure Monitoring System, master’s thesis, National Changhua University of Education. January, 2007.

49 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

THE RELATIONSHIP BETWEEN PACKAGE REDESIGN AND PURCHASE INTENTION

Ya-Fang Wu PHD program in Management, Da-Yeh University [email protected]

Chao-Sen Wu Department of Business Administration, TransWorld University [email protected]

Cheng-Jong Lee Department of Sport Business Management, Da-Yeh University, [email protected]

Li-Fen Tsai* Department of Marketing Management, TransWorld University *Corresponding author: [email protected]

Abstract

This study aims to explore the effects of consumer perceived values on product purchase intention in case of package redesign. This study employed the hierarchical regression to conduct data analysis to understand the moderating effects of price sensitivity on consumer’s perceived value and purchase intention with purchase intention. The consumer perceived value has a significant impact on purchase intention. Among factors of perceived value, quality value of commodity and monetary value of commodity have a significant and positive impact on consumer purchase intention. Regarding commodity goodwill value, it has a significant negative impact on consumer purchase intention. On the other hand, price sensitivity has a significant moderating impact on consumer’s quality value of commodity and purchase intention. The research would provide the value for the enterprises to make different pricing policies.

Keywords: Package Redesign, Perceived Value, Price Sensitivity, Purchase Intention

Introduction change packaging design and canister capacity. These are price adjustments that With rising international prices of raw lead to changes of noticeable difference materials and products, the trend of rising among consumers (Britt, 1975). The im- livelihood necessities is attracting more provement of consumer perceived value concerns. Some products, such as milk and relies on consumption experience that can coffee, adjust prices directly, some prod- be well transmitted (Williams, 2006), ucts, such as Coca-Cola and Taiwan Beer, while perceived value can help the indus- 50 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

try better understand consumption behav- Hence, when the consumer perceived val- iors of consumers (Petrick, 2004). Lemon, ue is higher, the repurchase intention and Rust and Zeitham (2001) pointed out that recommendation intention of the customer consumer perceived value is one of the will be higher. determining factors of long term business operation of the enterprise. In the market, Wakefield and Inman (2003) indicat- value has been receiving rising attention of ed that consumer response to price can dis- consumers and sellers (Dodds et al., 1991). tinguish the consumer sensitivity to price The value judgment is based on the view- before purchase. Hsieh and Chang (2005) points of consumers (Ryu et al., 2008). pointed out that consumer will adjust reac- The consumer viewpoints on perceived tion to specific enterprise or commodity value can be measured from the monetary, price after purchase. Petrick (2005) sug- quality, benefit and social-psychological gested that consumers purchasing dis- aspects (Kuo et al., 2009). The consumer counted commodities will be of higher perceives the deserved perceived costs and proportion in case of making decisions on non-pecuniary sacrifice, such as time con- purchasing price-sensitive goods. The consumption, energy consumption and brand sumers of higher level price sensitivity association (Bolton and Lemon, 1999; will look for lower price and will be more Yang and Peterson, 2004; Chen and Tsai, unlikely to purchase when the prices are 2008). Therefore, the effect of product relatively higher (Foxall and James, 2003). perceived value on consumer consumption Goldsmith, Kim, Flynn and Kim (2005) psychology is an important topic. argued that price sensitivity is the consumer’s reaction to price level and price The overall assessment of consumer change. The changes in product prices will on the perceived value is based on the affect consumer purchase intention. overall assessment of the product utility after comprehensive measurement of the This study explores the effects of benefits and costs to drive purchase deci- changes in product packaging on perceived sion. In other words, it is the perceived value, price sensitivity and purchase inten- assessment results of the customer about tion, as well as the impact of the perceived product or service (Zeithaml, 1988; Hellier value of changes in product packaging on et al., 2003). The gap of perceived value product purchase intention. This study also lies in the consumer intention to pay high- analyzes the correlation between the per- er price, such as product and service and ceived value of changes in product pack- the actual payment (Bishop, 1984). Per- aging and purchase intention in case of ceived value is regarded as a transaction, using product price sensitivity as the mod- which is determined by perceived benefits erating variable. Finally, this study pro- and perceived costs (Lovelock, 2000). poses relevant suggestions as a reference to enterprises regarding the impact of Zeithaml (1988) and Monroe (1990) sug- changes in product packaging and price on gested that overall perceived value has a consumer. positive impact on purchase intention, and purchase intention is generated on the ba- Literature Review and Hypotheses sis of consumer’s perceived value of price promotion or overall service. Many rele- Literature Review vant studies have pointed out that customer’s perceived value will positively affect Perceived value behavioral intention (Fredericks and Salt- er, 1995; Parasuraman and Grewal, 2000). 51 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

Value is the gap between consumer of relatively higher price (Foxall and perceived benefits and perceived costs James, 2003). Goldsmith, Kim, Flynn and (Day, 1990; Leszinski and Marn, 1997). Kim (2005) argued that price sensitivity is Dodds, Monroe and Grewal (1991) argued the reaction of the consumer toward that perceived value is a trade-off of pro- changes in price level and prices. Wake- duce or service quality and monetary cost. field and Inman (2003) suggested that, if Zeitthaml (1988) suggested that perceived the consumer strives for low price, it value is the consumer perception based on means that he/she is price sensitive. gains and losses, that is, the overall assessment of product utility. Mathwick, Purchase intention Malhotra and Rigdon (2001) pointed out that perceived value is a state of perception Zethaml (1988) suggested that con- of product attribute and service perfor- sumer purchase intention is subject to per- mance of the consumer. Through interac- ceived quality, value, objective price and tive process, it can promote or prevent the commodity attribute. If the perceived val- achievement of the goals of the consumer. ue is higher, the purchase intention will be The increase of consumer perceptions of higher. Keller (2001) pointed out that pur- product benefits or quality can strengthen chase intention can be regarded as a key consumer perceived value (Dodd, et.al, indicator to predict consumption behavior. 1991; Zeithaml, 1988). The generation of Blackwell, Miniard and Engel (2006) sug- high perceived value can improve value gested that purchase intention refers to the and increase profit as well as enhance the product that the consumer wants to buy. consumer perceived value. Schiffman and Kanuk (2004) indicated that purchase intention is to measure the Price sensitivity possibility of buying certain product by the consumer. This study proposes that pur- Monroe (1973) argued that price sen- chase intention is the possibility of buying sitivity is the level of perception and reac- certain product by the consumer. tion of the consumer when product or service price changes. Wakefield and Inman Hypothetical Inferences (2003) pointed out that the reaction level of individual consumers to price can be Relationship between perceived value and divided into the price sensitivity of the purchase intention consumer before purchase and the reaction of consumer to price adjustment of specif- Ravald and Grönroos (1996) argued ic enterprises or commodities after pur- that customer perceived value has become chase. Hsieh and Chang (2005) proposed one of the key factors of differentiation the semantic survey approach to ask con- and keeping competitive advantages. Cus- sumers about their attitude to purchase af- tomer perceived value is also the most im- ter a 10% increase in the price of what portant indicator of repurchase intention they want to buy. Petrick (2005) pointed (Cronin et al., 2000; Parasuraman and out that price sensitivity is concerned Grewal, 2000; Choi et al., 2004). When the about consumers of relatively higher level consumer perceived value is higher, it can of sensitivity in making purchases deci- better stimulate the repurchase intention. sions as the percentage of such consumers Grunert (2005) suggested that when the to buy discounted commodities is relative- perceived quality is very high, the con- ly higher. The consumers of high level of sumer will have the intention to repurchase price sensitivity will look for lower prices the product. Kontogeorgos and Anastasios and are more unlikely to purchase in case (2008) found that, when the product quali- 52 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

ty is recognized by consumers, it will Iaman (2003) pointed out that, if the con- promote the product sales and enhance sumer makes additional purchase efforts profits to affect business performance. for lower price, it means that the consumer Tiziana and Gracia (2008) indicated that is sensitive about the price. the consumer attempts to follow healthy and regular life, and will have positive Wakefield and Inman (2003) pointed viewpoints about products before generat- out that, the price sensitivity of purchasing ing purchase intention. Batte, Hooker, functional products will be higher than that Haab and Beaverson (2007) found that of entertaining products. Meanwhile, users product purchase is subject to product pur- of trendy products cannot resist the attrac- chase intention. Oh (1999) and Chen and tiveness of the product and reduce their Chen (2009) respectively pointed out that price sensitivity (Goldsmith et al., 2005). customer perceived value has a positive The product knowledge and price impact on customer satisfaction and repur- knowledge of the consumer will increase chase intention. This study proposes the the level of price sensitivity (Huber et al., following hypothesis: 1986; Rao and Sieben, 1992). If the consumer has a lasting interest or concern H1: Perceived value has a significantly about the product, the consumer may ac- positive impact on purchase intention. cept the product at a relatively higher price (Bloch and Richins, 1983), and it also af- Relationships between perceived value, fects its purchase intention. This study price sensitivity and purchase intention proposes the following hypothesis:

Sajeev and Colgate (2001) proposed H2: With price sensitivity as a moderating the integrated model of behavioral inten- variable, the consumer product perceived tions, and suggested that the customer val- value has a significant impact on purchase ue concepts constructed by price and intention. quality are the antecedent variable of customer satisfaction to further affect behav- Methodology ioral intention. Lin and Chen (2006) indicated that purchase intention can be an im- Research Framework portant indicator to predict purchase behavior. Many studies have confirmed that The framework of this study is to ex- perceived value will positively affect be- plore the correlation between consumer havioral intentions (Zeithaml, 1998; Fred- perceived value of changes in product ericks and Salter, 1995; Parasuraman and packaging, price sensitivity and purchase Grewal, 2000). If the consumer perceived intention. According to the research pur- value is higher, the customer’s repurchase poses and literature review, this study uses intention and recommendation intention three variables, namely perceived value, will be higher accordingly. When the con- price sensitivity, and purchase intention. sumer has more knowledge about product The conceptual framework of this study is and price, the level of price sensitivity will as shown in Figure 1. be higher (Huber, Holbrook, & Kahn, 1986). In other words, the consumer’s knowledge about the product and consumer price sensitivity is positively correlated (Goldsmith et al., 2005). Wakefield and

53 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

Price Sensitivity

Perceived Value H2 Commodity quality value

Commodity monetary Purchase Intention value H1 Commodity goodwill value

Figure 1. Consumer perceived value, price sensitivity, and purchase intention

Measurement of Variables Questionnaire Pilot Test

Regarding the various research per- Cronbach’s α coefficient was used to spectives, this study defined variables and measure internal consistency as the stand- operations by referring to relevant litera- ard of the research. The Cronbach’s α val- ture to comply with the purpose of this ues of the perceived value, price sensitivity study and wording acceptable to the sub- and purchase intention are respectively jects. This study invited five marketing 0.879, 0.773 and 0.720, which are all management teachers to discuss and modi- higher than 0.7. This indicates that the fy the questionnaire items. Then, the ques- scale has considerable internal consisten- tionnaire was completed according to ex- cy. pert validity requirements. Finally, 30 consumers were tested to confirm the feasibil- Data Analysis and Research Results ity of the research questionnaire. In addition to personal data, the other parts of the Basic Characteristics of the Sample questionnaire were measured by a Likert 7-point scale. The contents are as follows: A total of 400 questionnaires were distributed to survey Taiwan’s consumer Perceived value: based on the perceived perceived value regarding changes in value scale developed by Petrick (2002). product packaging, price sensitivity and purchase intention, and 342 valid copies Price sensitivity: by referring to the meas- were retrieved, with a valid return rate of urement scale for individual consumers 85.5%. Regarding the experience of com- developed by Wakefield and Inman modity purchase, 86.5% of the consumers (2003), it measures price-sensitive con- perceived the changes in packaging, and sumers who will be unlikely to purchase at 13.5% failed to perceive the changes in rising price and look for lower price (Fox- packaging. Regarding commodities of fre- all and James, 2003). quent purchase, 44.4% of the consumers purchased livelihood foodstuffs (e.g., rice, Purchase intention: by referring to the cus- oil, salt, sauce and vinegar), 25.1% pur- tomer loyalty scale developed by Gron- chased casual snacks (e.g., biscuits, drinks holdt, Martensen and Kristensen (2000). and snacks), 13.2% of the consumers bought articles for daily use (e.g., station- 54 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

ary, paper, toy), and 3.8% of the consum- commodity”. Cronbach’s α values of the ers purchased 3C electronics products three factors are respectively 0.92, 0.93, (e.g., MP3, 3C peripheral products). 0.91. In the scale of price sensitivity, this Moreover, 67.5% of the consumers were study extracted a factor with accumulated aware of changes in packaging without explanation variation of 73.91%. This fac- change in price, and 19.0% of the consum- tor relating to the consumer sensitivity to ers were aware of changes in price without product price is named as “price sensitivi- change in packaging; 62.9% of the con- ty”. The price sensitivity perspective’s sumers often purchase products, 16.4% of Cronbach’s α is 0.82. In the scale of pur- the consumers frequently purchase such chase intention, this study extracted a fac- products, and 7.3% consumers rarely pur- tor of accumulated explanation variation of chase such products; 73.7% of the con- 76.92%. This factor relating to the pur- sumers rated higher than 5 point according chase ideas and status of the consumer is to experience of buying the product with named as the purchase intention”. The changed packaging. purchase intention perspective’s Cronbach’s α is 0.93. Regarding the demographic information of the respondents, there are 218 The Cronbach’s α values of all factors male consumers (63.7%) and 124 female in this study are higher than 0.80, suggest- consumers (36.3%); most of the consuming that the scale has considerably high ers are in the age group of 21-40, among level of validity (Nunnally, 1978). The which, 43.9% of the respondents are aged factor perspective composition extracted 21-30 and 31.3% are aged 31-40; most of by factorial analysis is consistent with the them have college level education original design of the research, suggesting (58.2%); by occupation, most of them that the scale has appropriate construct va- work in the agricultural and fishing indus- lidity. try (25.7%), followed by service industry (20.8%), self-employed (14.6%), and Research Variable Correlation homemakers (14.0%); most of them have a salary level of 35,001~50,000 NTD According to the correlation analysis (50.0%), followed by 50,001~60,000 NTD as shown in Table 1, regarding the rela- (25.7%). tionship between product perceived value and purchase intention, quality value of Reliability and Validity Analysis commodity and monetary value of commodity are significantly and positively cor- This study employed the maximum related to consumer’s purchase intention. variation shaft method of factorial analysis In other words, when the consumer per- to extract factors of eigenvalue above 1, ceived product quality and price change and deleted questionnaire items with too are consistent with the needs, the consum- low factorial loading. In the scale of per- er’s purchase intention will also be strong- ceived value, three factors were extracted er. Regarding the relationship between and the accumulated explanation variation price sensitivity and purchase intention, was 76.37%. Factor 1 relating to quality the data suggest that price sensitivity and value of the commodity is known as “qual- purchase intention are significantly and ity value of commodity”; Factor 2 relating positively correlated. In other words, when to the monetary value of the product is the product price sensitivity of the con- named as “monetary value of commodity”; sumer is higher, the product purchase in- Factor 3 relating to the goodwill value of tention is more unstable. the product is named as “goodwill value of 55 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

Impact of Perceived Value on Purchase will value of commodity) to obtain the Intention analysis results, as shown in Table 2.

First, regarding the effects of product According to Model 1 as shown in perceived value on purchase intention, this Table 2, when dependent variable is pur- study input the dependent variable (purchase intention, (1) independent variable is chase intention), and then the independent the quality value of commodity, the β val- variable (quality value of commodity, ue is 0.118 (p value<0.05), suggesting that monetary value of commodity and good- quality value of commodity has a positive impact on consumer purchase

Table 1. Table of Pearson Correlation Analysis

Research variable 1 2 3 4 5 Quality value of commodi- 1.00 ty monetary value of com- .33** 1.00 modity Goodwill value of com- -.10 -.01 1.00 modity Price Sensitivity .33** .53** -.09 1.00 Purchase Intention .22** .29** -.11 .25** 1.00 Note ： * denotes p<0.05 ；** denotes p<0.01

Table 2. Hierarchical regression analysis of purchase intention

Dependent Variable Purchase Intention Independent Variable Model 1 Model 2 Model 3

Per- + ceived Quality value of commodity 0.118* 0.101 -0.383 value monetary value of commodi- 0.256** 0.207** 0.151 ty

Goodwill value of commodi- + + + ty -0.100 -0.093 -0.598

+ Price Sensitivity 0.103 -1.256*

Interact- Quality value of commodity + ion * price sensitivity 0.812 Monetary value of commod- 0.107 ity* price sensitivity Goodwill value of commodi- 0.905 ty* price sensitivity F Value 14.362** 11.525** 7.475**

2 R 0.105 0.120 0.135

2 △R 0.110 0.117 + Note: denotes p<0.1; *denotes p<0.05; ** denotes p<0.01

56 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

intention. (2) When the independent varia- its β value is 0.107 (p value >0.1), suggest- ble is the monetary value of commodity, ing that the moderating effect of price sen- its β value is 0.256 (p value<0.01), sug- sitivity on monetary value of commodity gesting that monetary value of commodity and purchase intention is not significant. has a positive impact on consumer pur- (3) When independent variable is the in- chase intention. In other words, the rise of teraction between goodwill value of com- fall of price will affect consumer purchase modity and price sensitivity, its β value is intention. (3) When the independent varia- 0.905 (p value>0.1), suggesting that the ble is the goodwill value of commodity, its moderating effect of product price sensi- β value-0.100 (p value<0.1), suggesting tivity on goodwill value of commodity and that goodwill value of commodity has a purchase intention is not significant. negative impact on consumer purchase in- Hence, H2 is partially supported. tention. The possible reason is the increasing choices of the consumer. Hence, the Conclusions and Suggestions consumer changes the perceived goodwill value of commodity, and thus reduces the This study explored the correlation commodity purchase intention. Hence, it between consumers’ perceived value and can be concluded that H1 is partially sup- purchase intention by adding the factor of ported. price sensitivity to analyze the moderating effects. Based on the results, the conclu- Correlation Between Perceived Value And sions are proposed as follows: Purchase Intention: With Price Sensitivity As The Moderating Variable Conclusions

This study employed the hierarchical Relationship between perceived value and regression to conduct data analysis to un- purchase intention derstand the moderating effects of price sensitivity on consumer’s perceived value This study found that consumer’s and purchase intention with purchase in- perceived value has a significant effect on tention as the dependent variable. It first, purchase intention. Regarding factors of input independent variable of perceived perceived value, quality value of commod- value (quality value of commodity , mone- ity and monetary value have significant tary value of commodity and goodwill and positive effects on consumer’s pur- value of commodity), and then input mod- chase intention. With rising consumption erating variable of price sensitivity. The awareness and transparency of consump- data analysis results are as shown in Model tion information, the perceived improve- 3 of Table 2. ment in quality value of commodity by the consumer will enhance purchase intention. When the dependent variable is pur- Grunert (2005) proposed that, the rising chase intention, (1) when the independent perceived quality of product by the con- variable is the interaction of quality value sumer will further increase consumer in- of commodity and price sensitivity, the β tention to repurchase. In other words, ris- value is 0.812 (p value<0.1), suggesting ing quality of product can enhance con- that the produce price sensitivity has a sig- sumer’s purchase intention. In addition, nificant positive moderating effect on the factor of monetary value of commodity quality value of commodity and purchase also has a significant positive impact on intention. (2) When the independent varia- consumer’s purchase intention. In other ble is the interaction between monetary words, when the perceived monetary value value of commodity and price sensitivity, of the product rises, the consumer’s pur- 57 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

chase intention will be enhanced. This in- more unlikely. Thus, its effects on pur- dicates that the monetary judgment of the chase intention are significant and posi- product utility in external market will also tive. affect the consumer’s purchase intention in addition to the utility of the product. Re- Management Implications garding the factor of goodwill value of commodity, it has a significant and nega- Due to the increasing number of tive impact on consumer’s purchase inten- channels of information in the consumption, suggesting that the transparency of tion market, consumers can access infor- commodity information can help consum- mation in very easy ways to compare the ers understand commodity value. Once the prices. The search for information means consumers are aware of the problem of the higher price sensitivity of the consumer. product, the reputation of the enterprise Hence, manufacturers are suggested to and commodity as well as the purchase provide detailed price information to make intention in the future will be affected. consumers want to search and improve The moderating effects of price sensitivity their purchase intention. on perceived value and purchase intention The quality of products should be im- According to the data analysis results, proved to enhance the acceptance of rising the effects of consumer’s perceived quality prices and customer loyalty to gain higher value of commodity and price sensitivity profits for the enterprise. In addition, as on purchase intention will be moderated consumers may have different reactions to by price sensitivity. Overall, when the purchased commodities, enterprises are consumers are aware of the change in suggested to make different pricing poli- commodity quality, the price sensitivity of cies for products of quality value, products the consumer will be higher, which is of monetary value and products of good- helpful to commodity purchase intention. will value to satisfy consumer needs. Goldsmith, Kim, Flynn and Kim (2005) pointed out that the product knowledge Research Limitations and price are positively correlated. Wake- field and Iaman (2003) suggested that, if This study used the convenience the consumer makes extra efforts for lower sampling method, which fails to evenly price, it means that the consumer is price distribute in terms of demographic statisti- sensitive. In other words, the consumer is cal variable. Future studies can conduct going to purchase products of high quality. sampling by stratum, nationality or region. Consumers of a higher level of price sensi- Second, the questionnaire is filled by con- tivity will have a higher level of purchase sumers who may be subject to environ- intention. However, the effects of consum- ment, emotion, attitude, and subjective er’s perceived monetary value of commod- cognitive or external factors. Future stud- ity, perceived goodwill value and price ies can conduct detailed survey on con- sensitivity on purchase intention are insig- tents relating to purchase behavior to un- nificant. When purchasing commodities of derstand the level of correlation of various quality value of commodity, consumers purchase behavior. It can help enterprises are more likely to make extra efforts for in developing and producing products con- reasonable prices. Hence, when selecting sistent with consumer expectations and the products of quality value, consumers will efficiency of their business operations. have more price knowledge to make reasonable price judgment to purchase what they expect. Purchase confusion will be 58 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

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EXPLORING THE SERVICING EFFECTIVENESS OF SOCIAL MEDIA IN CUSTOMERS’ ELECTRONIC WORD OF MOUTH (eWOM)

Szu-Yuan Sun Department of Information Management National Kaohsiung First University of Science and Technology, Taiwan, ROC [email protected]

Li-Shan Chen Department of Information Management National Kaohsiung First University of Science and Technology, Taiwan, ROC

Abstract

This study mainly explores the servicing effectiveness of social media in customers’ electronic word of mouth (eWOM). The idea behind the concept of eWOM is very important to the visibility of individuals and businesses seeking exposure on the Internet. A survey method tests the casual effects between those contracts. The predicting results are that (1) community engagement self-efficacy positively affects social outcome expectations and eWOM ； (2) intrinsic motive (concern for others) has a significant and positive impact on eWOM ；(3) service quality has a significant and positive impact on customer satisfaction ；(4) customer satisfaction significantly and positively affects customer commitment and eWOM. Social outcome expectations and customer commitment are mediating variables in this study.

Keywords: electronic word-of-mouth; service quality; community engagement self-efficacy; social outcome expectations; customer commitment

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Introduction self-efficacy positively affects social outcome expectations and eWOM ； (2) in- Virtual community participation trinsic motive (concern for others) has a and User Generated Content (UGC) are significant and positive impact on the prevailing social activities in virtual eWOM ；(3) service quality has a signifi- spaces. Along with such trends, word-of cant and positive impact on customer satis- mouth (WOM) transactions have also in- faction ；(4) customer satisfaction signifi- creased dramatically. WOM information cantly and positively affects customer on the Internet (henceforth e-WOM) has commitment and eWOM. Social outcome become an important information source expectations and customer commitment for shopping (Yoo, Sanders, & Moon, are mediating variables in this study. 2013). Literature Review The online brand community has been paid much attention by both market- Lee, Kim & Kim (2012) propose ing practitioners and scholars. With the that consumers’ interdependent self- recent popularity of social networking sites construal increases their consumers’ com- (e.g., Facebook, MySpace, Twitter, etc.), munity engagement self-efficacy, which in the online brand community has expanded turn affects their eWOM behaviors for the its boundary to the virtually networked online brand community directly as well as society. In such a social networking site, indirectly through their social outcome ex- both marketers and consumers can easily pectations associated with the particular create online communities and promote the behavior for the online brand community. consumer–brand relationships with current and potential community members (Hung Hypothesis 1. Community engage- & Li, 2007; Lee et al., 2011; Schau, Mu- ment self-efficacy positively af- niz, & Arnold, 2009; Leimeister, Sidiras, fects social outcome expecta- & Krcmar, 2006). One particular approach tions. to promoting the active membership participation is to encourage the community Hypothesis 2. Customers’ social members to advertise the positive benefits outcome expectations positive- of the membership to potential members ly affects customers’ eWOM. by spreading their words. This line of approach can be termed electronic word of Hypothesis 3. Customers’ commu- mouth (eWOM), one of the most reliable nity engagement self-efficacy sources of information for consumers positively affects their social (Bickart & Schindler, 2001; Brown, Bro- outcome expectations associat- derick, & Lee, 2007; Hung & Li, 2007). ed with eWOM.

This study mainly explores the ser- Yoo, Sanders, & Moon (2013) ex- vicing effectiveness of social media in cus- amine “concern for other customers” that tomers’ electronic word of mouth are posited to facilitate e-WOM participa- (eWOM). The idea behind the concept of tion behavior. eWOM is very important to the visibility of individuals and businesses seeking ex- Hypothesis 4. Intrinsic motives will posure on the Internet. A structural equa- have a positive impact on e- tion model (SEM) is developed to test the WOM. casual effects between those contracts. We explore that if (1) community engagement The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 64

‘Commitment’ is ‘an exchange Hypothesis 5. Service quality has a partner’s belief that an ongoing relation- positive impact on customer ship with another is so important as to satisfaction. warrant maximum efforts at maintaining it, that is, the committed party believes the Hypothesis 6. Customer satisfac- relationship is worth working on to ensure tion relates positively to posi- that it endures indefinitely’ (Morgan & tive eWOM. Hunt, 1994). Researchers have treated customer commitment as a mediating varia- Hypothesis 7. Customer satisfac- ble. Customer satisfaction, mediated by tion relates positively to cus- customer commitment, has been shown to tomer commitment. influence future intentions (Garbarino & Johnson, 1999). Brown, Barry, Dacin, and Hypothesis 8. Customer commit- Gunst (2005) argue that a consumer’s cu- ment relates positively to mulative evaluation of his satisfactory positive eWOM. consumption experiences makes a positive impact on the degree of his commitment in Research Model and Methodology a marketing relationship. Fullerton (2011) in his study of banking, hairstyling, and Research Model auto-repair industries proposes that satisfaction is significantly and positively relat- See Figure 1. for the Research ed to affective commitment. Model.

Figure 1. Research Model

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Research Methodology niques (Churchill, 1979; Dillman, 2007). First, the preliminary draft questionnaire Sampling and Data Collection. derives from existing literature and the findings of case study interviews with A questionnaire, cover letter, and community members. Second, several ac- postage paid return envelope were mailed ademics with diverse research back- to these 500 industrial firms. Following grounds and a few practitioners comment- Dillman's (1999) total design method, re- ed on the items in the questionnaire. Third, minder postcards were sent out approxi- the pretest of the survey instrument con- mately two weeks after the initial mailing, sisted of interviews with purchasing ex- followed by a second survey mailing ap- ecutives from several firms. To ensure proximately one month later to those who clarity, half of these informants provided had not returned questionnaires. The test their comments while answering the ques- of the hypotheses employs a survey sam- tionnaire, and the other half offered re- ple of industrial firms in Taiwan, with sponses after they completed the question- community members as the key inform- naire. The relevant comments entered the ants. The researchers sent personalized e- final version of the survey instrument. Ex- mails containing a link to an online ques- isting scales serve to measure the con- tionnaire, as well as the offer of a sum- structs, with some slight mary of the results and a practitioners' purchasing book in return for their partici- Results pation. The results are that (1) community The survey included two questions to engagement self-efficacy positively affects assess the informants' ability to answer the social outcome expectations and eWOM ； questionnaire (Kumar et al., 1993). These (2) intrinsic motive (concern for others) questions measured (on five-point Likert has a significant and positive impact on scales, anchored at 1 =fully disagree; eWOM ；(3) service quality has a signifi- 5=fully agree) managers' degree of cant and positive impact on customer satis- knowledge about (1) the specific project faction ；(4) customer satisfaction signifi- and (2) the ongoing relationship with the cantly and positively affects customer respective supplier. commitment and eWOM. Social outcome expectations and customer commitment Survey instrument and measures. are mediating variables in this study.

The development of the survey instrument and measures proceeded through several stages and followed standard tech-

Reference Brown, J., Broderick, A., & Lee, N. (2007). Word of mouth communica- Bickart, B., & Schindler, R. M. (2001). tion within online communities: Internet forums as influential sources Conceptualizing the online social of consumer information. Journal of network. Journal of Interactive Mar- Interactive Marketing, 15(3), pp.31– keting, 21(3), pp.2–20. 40.

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Brown, T.J., Barry, T.E., Dacin, P.A., & Lee, D., Kim, H. S., & Kim, J. K. (2011). Gunst, R.F. (2005). Spreading the The impact of online brand communi- word: Investigating antecedents of ty type on consumer’s community consumers’ positive word-of-mouth engagement behaviors: Consumer intentions and behaviors in a retail- created vs. marketer-created online ing context. Journal of the Academy brand community in online social of Marketing Science, 33(2), 123– networking web sites. Cyberpsychol- 138. ogy, Behavior, and Social Network- ing, 14(1/2), pp.59–63. Churchill, J. G. A. (1979). A paradigm for developing better measures of mar- Lee, D., Kim, H. S., & Kim, J. K. (2012). keting constructs. Journal of Market- The role of self-construal in consuming Research, 16(1), pp.64–73. ers’ electronic word of mouth (eWOM) in social networking sites: Dillman, D.R. (1999). Mail and internet A social cognitive approach. Com- surveys: the tailored design method. puters in Human Behavior, 28(3), New York: John Wiley & Sons. pp.1054-1062.

Dillman, D.A. (2007). Mail and Internet Morgan, R.M., & Hunt, S.D. (1994). The surveys: the tailored design method commitment-trust theory of relation- 2007 — update with new Internet, ship. Journal of Marketing, 58(3), visual, and mixed-mode guide. 2nd pp.20–38. Ed. New York: John Wiley & Sons. Leimeister, J. M., Sidiras, P., & Krcmar, Fullerton, G. (2011). Creating advocates: H. (2006). Exploring success factors The roles of satisfaction, trust and of virtual communities: The strategic commitment. Journal of Retailing & implications of virtual communities Consumer Services, 18(1), 92–100. of consumption. Journal of Organiza- tional Computing and Electronic Garbarino, E., & Johnson, S. (1999). The Commerce, 16(3-4), pp.277–298. different roles of satisfaction, trust, and commitment in customer rela- Schau, H. J., Muniz, A., & Arnold, E. J. tionships. Journal of Marketing, (2009). How brand community prac- 63(4), 70–87. tices create value. Journal of Market- ing, 73(5), pp.30–51. Hung, K. H., & Li, S. Y. (2007). The influence of eWOM on virtual con- Yoo, C. W., Sanders, G. L., & Moon, J. sumer communities: Social capital, (2013). Exploring the effect of e- consumer learning, and behavioral WOM participation on e-Loyalty in e- outcomes. Journal of Advertising commerce. Decision Support Sys- Research, 47(4), pp.485–495. tems. doi: 10.1016/j.dss.

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THE RELATIONSHIP AMONG CORPORATE SOCIAL RESPONSIBILITY, SERVICE QUALITY, CORPORATE IMAGE AND PURCHASE INTENTION

Chun-Chen Huang Dept. of of International Business, Asia University, Taiwan R.O.C. Dept. of Department of Health Risk Management, China Medical University, Taiwan R.O.C.

Szu-Wei Yen Dept. of Marketing and Distribution Management, WuFeng University, Taiwan R.O.C.

Cheng-Yi Liu * Dept. of Information Management, TransWorld University, Taiwan R.O.C. *(Corresponding Author) [email protected]

Pei-Chen Huang Dept. of International Business, Asia University, Taiwan R.O.C.

Abstract

Previous studies about corporate social responsibility generally explore how corporate social responsibility affects a company’s financial performance and employee behavior, and rarely explore the effect of corporate social responsibility on consumer behavior. This study attempts to explore the relationship among corporate social responsibility, service quality, corporate image, and purchase intentions. In addition, this study also examines whether corporate image has a mediating effect on purchase intentions through corporate social responsibility and service quality. This study distributed 400 questionnaires, and after removing 69 questionnaires that were invalid, there were 331 valid questionnaires. The important conclusion of this study is that corporate social responsibility has a significantly positive effect on corporate image, service quality, and purchase intentions. In addition, service quality has a positive effect on corporate image and purchase intentions. The other important finding of this study is that corporate image has a mediating effect between corpo-

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rate social responsibility and purchase intentions, as well as between service quality and purchase intentions.

Keywords: Corporate social responsibility, Service quality, Corporate image, Purchase intentions, Mediating effect

Introduction provement of sales and profitability. Clear- ly, if corporations can carry out their social Corporate social responsibility (CSR) responsibilities, it would certainly have has become a key factor to corporate value positive effects on their corporate image creation and sustainable operations, as (Zair and Peters, 2002). Some marketing well as a common value in the world. In- experts believe that the role played by cor- ternational organizations have established porations in society as a whole would af- relevant standards to be followed, includ- fect the perception of consumers regarding ing the UN Global Compact and OECD corporate image. Thus, how corporations Guidelines for Multinational Enterprises, treat their employees, shareholders, com- to guide corporations in implementing munity residents, and others, would all CSR in their operational strategies and to contribute to consumer corporate image establish organizational values for society for the corporation (Keller, 1998). In addi- (Porter, 2006). Many studies point out that tion, as the world faces internationalized CSR has a positive effect on financial per- competition, corporate success and failure formance (Mill, 2006; Mishra and Suar, depends on how to use good service quali- 2010; Simpson and Kohers, 2002), and can ty and enhance the purchase intentions of enhance customer satisfaction and main- consumers. Parasuraman et al. (1988) tain good customer relationships (Bhat- pointed out that service quality would di- tacharya and Sen, 2003; Darigan and Post, rectly affect consumer behavior. There- 2009; Lacey and Kennett-Hensel, 2010; fore, “customer first” has generally be- Loureiro et al., 2012), as well as increasing come the top principle for the service in- the quality of products or services and dustry, customer service and customer promoting brand performance (Lai et al., complaint centers are crucial departments 2010; Xueming and Bhattacharya, 2006). in corporations; any behaviors that dis- In turn, this can enhance organizational please consumers are magnified and eval- cohesion and organizational commitment uated, even becoming important indicators by employees and, at the same time, en- that affect performance. Thus, service hance work efficiency (Boddy et al., 2010; quality is very important for corporations. Collier and Esteban, 2007; Kim et al., Previous studies about CSR generally ex- 2010; Lin, 2010). Thus, many scholars be- plore how CSR affects a company’s finan- lieve that incorporating CSR into the core cial performance and employee behavior, values for operations can help acquire a and rarely explore the effect of CSR on competitive advantage and achieve sus- consumer behavior. Thus, this study aims tainable operations. to examine the relationships among CSR, service quality, corporate image, and pur- Hill and Knowlton (2002) investigat- chase intentions. In addition, the study will ed the corporate reputation from 800 Eu- explore how CSR and service quality af- ropean and North American CEOs showed fect consumer purchase intentions through that corporate leaders believe that corpo- corporate image. rate reputation and corporate social responsibility are important tools for the im The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 69

According to Taiwan’s Fair Trade provide cheap services and maximize prof- Commission, by 2010 there were over its it is to meet their social responsibility. 4800 President 7-ELEVEN Chain Stores However, the socio-economic view be- in Taiwan, and it is a large platform suita- lieves that corporations are citizens of so- ble for promoting public welfare concepts ciety. The operational process affects the and events. At every 7-ELEVEN in Tai- economy, society, and environment, so wan, there are donation boxes at the their responsibilities should not just be to check-out counter, so that when people increase profits, but should bear further pay for products they can donate change responsibility to balance society (Davis, for public welfare events; this has contin- 1973). Thus, CSR is also known as corpo- ued for over 18 years. 7-ELEVEN Chain rate citizenship, leading to issues such as Stores have helped 57 charitable organiza- corporate ethics, corporate governance, tions for youths away from home, under- and green marketing. WBCSD (2008) de- age prostitutes, abused women, to interna- fines CSR as corporate commitment to the tional war refugees by raising 670 million continued fulfillment of moral norms, con- NT in funds. Using 7-ELEVEN Chain tribution to economic development, as Stores as the channel to raise funds for mi- well as improvement of the quality of life nority groups is just one of many public for employees, their families, the overall welfare activities by which 7-ELEVEN local community, and society. Ferrell et al. Stores give back to society. 7-ELEVEN (2010) believed that corporations must be believes that public welfare events are not responsible to their interested parties, infor marketing, but rather manage it like an cluding internal shareholders, the board of enterprise. Thus, in the CSR survey of the trustees, operational teams and employees, service industry in Taiwan, every year external consumers, suppliers, channels, President has very good scores. Thus, this partners, competitors, local communities, study uses convenience store consumers as and interest groups. research subjects to explore how the performance of CSR of convenience stores Carroll (1979) believed that corporate affects service quality, corporate image, social responsibility is the social expecta- and purchase intentions. In addition, the tion for corporations at specific times, in- study explores the effect of service quality cluding economic responsibility, legal re- on corporate image and purchase inten- sponsibility, ethical responsibility, and tions. Finally, it is hoped that this study philanthropic responsibility. Economic can be used to understand whether corpo- responsibility is that corporations should rate image has a mediating effect on pur- effectively utilize resources and provide chase intentions through corporate social products or services at reasonable prices, responsibility and service quality. maintain fair and stable industrial competition order, and satisfy the interests and Literature Review needs of interested parties, in order to create employment, profit, and growth; these Corporate Social Responsibility are the most fundamental responsibilities of corporations (Carroll, 1998; Lin, 2010; The concept of CSR originated in the Maignan, 2001; Rego et al., 2010). Legal 1950s, when many people believed that the responsibility is that corporations must actions of corporations are closely related abide by legal regulations; this is the min- to society and the public, and should con- imum social requirement for corporate reform to and satisfy social values and ex- sponsibility, and they need to incorporate pectations (Bowen, 1953). Traditional per- regulations into operational strategies and spectives believe that when corporations management, including obligations in

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manufacturing, consumption, labor safety, Based on the results of in-depth inter- and environmental protection, to avoid views, Parasuraman et al. (1985) proposed harming interested parties (Carroll, 1998; ten measurement dimensions of service Lin, 2010; Maignan, 2001; Maignan and quality, which are tangibility, reliability, Ferrell, 2000; Ramasamy and Yeung, responsiveness, credibility, security, com- 2009). Ethical responsibility is that corpo- petence, courtesy, understanding, access, rate core values and ideals must conform communication. Parasuraman et al. (1988) to moral norms in society, conform to so- further extracted five major dimensions cial expectations or prohibitions in order to from the ten dimensions of service quality, protect the rights and public good of inter- for the SERVQUAL scale using 22 ques- ested parties (Branco and Rodrigues, 2006; tions. These include tangibility, which re- Carroll, 1998; Lin, 2010; Maignan, 2001). fers to the hardware facilities of service Philanthropic responsibility is corporate and the external appearance of service per- activities beyond economic, legal, and eth- sonnel. Reliability refers to the correct ex- ical norms; it is the active and proactive ecution of the promised service content. giving back to society for the improvement Responsiveness refers to the intention of of the overall quality of life, support of service personnel to help customers and national policy, and the creation of a har- provide timely services. Assurance refers monious society (Carroll, 1998; Lin, 2010; to service personnel with professional Maignan, 2001). knowledge and etiquette to make the customers feel trust and calm. Finally, empa- Service quality thy refers to care and providing individualized services to customers. The modified Service quality is one of the issues SERVQUAL scale is more comprehen- most emphasized by various industries at sive, and its reliability and validity are sig- the present time, and is an important factor nificantly better than the original scale. affecting whether an industry is sustainable. Parasuraman et al. (1985) described Corporate image the four important characteristics of “service”, which are intangibility, inseparabil- Corporate image is an abstract con- ity/simultaneous, heterogeneity, and per- cept that reflects the public’s general eval- ishability. Sasser et al. (1978) were in the uation of a corporation. However, since vanguard of service quality research. the concept is very broad, there has long Based on the characteristics of the service been an absence of definitions agreed upon industry, they divided service quality into by the public, and different scholars have the three dimensions of material, person- defined it differently as well. Boulding nel, and equipment. Churchill and Su- (1956) believed that image may not be prenant (1982) believed that service quali- able to fully reflect the genuine content of ty is the gap between satisfaction actually matters, but are subjective consciousness, felt by customers after accepting services based on the information received by an and their expectations. Later, most relevant individual, and may be perspectives de- studies cite Parasuraman et al. (1985), who rived from incomplete or incorrect infor- define service quality as the “expectation” mation. Bayton (1959) attempted to use a before customers accept service and the human perspective to interpret the dimen- “perception” after customers accept ser- sions of corporate image, such as amiabil- vice; in other words, service quality is ity and friendliness. Mazzarol (1998) equal to the expected service subtracted by pointed out that corporate image is an in- perceived service. dicator that attracts potential or existing customers to be willing to come into con-

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tact with a corporation. Nguyen and Le- future, and intention to recommend prod- blanc (2001) believed that the factors ucts to others. forming corporate image may come from customer perception of the corporation and Research Methods its behavior, including the corporate name, traditions, operational visions, and diversi- Sampling ty of product services; these are the results of the interactive influences of all experi- Data for this study were accumulated ences, feelings, ideas, and knowledge of via convenience sampling from consumers customers. Tang (2007) proposed a similar who have used products or services at definition, pointing out that corporate im- convenience stores, asking them to answer age is the customer’s total offering toward questionnaire items based on the conven- organizations, and is the sum of the pub- ience stores they most often visit (or most lic’s beliefs, ideas, and impressions toward prefer). This study distributed 400 ques- specific organizations. tionnaires, and after removing 69 questionnaires that were invalid, there were Walters (1978) divided corporate im- 331 valid questionnaires; the overall re- age into the three dimensions of institution sponse rate was 82.8%. Tuncalp (1988) image, functional image and commodity found that convenience sampling is appro- image. Riordan et al. (1997) used a single priate for exploratory research designed to dimension to measure corporate image. gain a better understanding of final con- Pina et al. (2006) used eight dimensions to sumers. A summary of the sample charac- measure corporate image, which are re- teristics is presented in Table 1. The ma- spect, professionalism, success, adequate jority of the respondents were female establishment, stability, trustworthiness, (61.9%). Most subjects (89.1%) were 21 to reliability, and concern for customers. 50 years old. The predominant education level was College or University (66.2%), Purchase intention and their average wage per month was less than NT$ 60,000 (81.3%). Fishbein and Ajzen (1975) believed that purchase intentions can be used as an indicator to predict customer consumption Measurement behavior, representing the subjective consciousness or possibilities of customer The questionnaire in this study in- purchases (Dodds et al., 1991). Schiffman cludes four sections of “corporate social and Kanuk (2000) also believed that pur- responsibility,” “service quality,” “corpo- chase intentions measure the possibilities rate image,” “purchase intentions”. A five- of consumers purchasing a certain product, point Likert scale ranging from (1) mostly and there is a positive correlation between false to (5) mostly true was used. If the purchase intentions and actual purchase. score is high, it means that they agree with Zeithaml (1988) proposed using three the questionnaire content to a greater ex- questions in possible purchase, want to tent. Completed data were entered and purchase, and considering purchase to processed by using the software of the Sta- measure the level of purchase intentions. tistical Package for the Social Sciences Sirohi et al. （1998 ）pointed out that pur- (SPSS) version 12.0, and the questionnaire chase intentions should be measured by sources and results of factor analysis and customer loyalty, such as repurchase inten- reliability are as follows. tions, intention to buy more products in the

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Table 1. Sample characteristics.

Variable Demographics Number Valid percent Gender Male 126 38.1 Female 205 61.9 Under 20 years 26 7.9 21~35 years 130 39.3 Age 36~50 years 165 49.8 Over 51 years 10 3.0 High school or below 29 8.8 Education level College or University 219 66.2 Graduate school or above 83 25.0 Under NT$ 20,000 38 11.5 Average wage NT$ 20,001~40,000 92 27.8 NT$ 40,001-60,000 139 42.0 Over NT$ 60,000 62 18.7

The Corporate Social Responsibility tors. The cumulative percentage of vari- Questionnaire refers to the study by Car- ance was 70.695 and the Cronbach’s alpha roll (1979), with 17 questions. The Service ranged from 0.756 to 0.887, which shows Quality Questionnaire refers to the that the scale has good reliability. The fac- SERVQUAL scale by Parasuraman et al. tors represented the three different dimen- (1988), and includes 22 questions. The sions of CSR: (a) economic and legal re- Corporate Image Questionnaire refers to sponsibility, (b) philanthropic responsibil- the study by Riordan et al. (1997), and in- ity, (c) ethical responsibility. cludes 7 questions. The Purchase Inten- tions section refers to the study by The Service Quality Questionnaire Zeithaml (1988), and consists of 5 ques- was used to extract 3 factors. The cumula- tions. tive percentage of variance was 65.278 and the Cronbach’s alpha ranged from 0.760 to The KMO values of the four variables 0.887, which shows that this scale has in this study (CSR, service quality, corpo- good reliability. The accumulated explana- rate image, and purchase intentions) are all tory power is 65.278%, with good validity. greater than 0.8, and the Bartlett’s spheric- The factors represented the three different ity test is lower than 0.005, which is suita- dimensions of service quality: (a) service, ble for factor analysis. Principle compo- (b) reliability, (c) tangibles. nents analysis was employed and Varimax was used as an orthogonal rotation to ex- The Corporate Image Questionnaire tract eigenvalues of factors equaling or is used to extract a single factor. The cu- exceeding 1 and factor loadings equaling mulative percentage of variance was or exceeding the accepted criterion of 0.5 72.239 and the Cronbach’s alpha was (Hair et al., 2006). The factor analysis, re- 0.872, which means that this scale has liability, and validity analyses of the four good reliability. variables are shown in Table 2. The Purchase Intentions is used to ex- The Corporate Social Responsibility tract a single factor, the cumulative per- Questionnaire was used to extract 3 fac- centage of variance was 73.560 and the

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Cronbach’s alpha was 0.878., with cumu- which means that this scale has good relia- lated explanatory ability of 73.560%, bility.

Table 2. Factor analysis and reliability

Factor Cumulative Construct Dimension name and Items Mean Loading percentage of Cronbach’s α variance 25.119 ％ 0.791 Economic and legal responsibility The convenience store can guarantee 3.75 0.850 investor benefits. The convenience store can enhance 4.04 0.710 corporate operational performance. The convenience store would make 3.67 0.705 public its information such as financial conditions and performance in good faith. The convenience store can abide by 3.80 0.659 the law and pay taxes honestly. Philanthropic responsibility 49.345 ％ 0.879 The convenience store would sponsor 3.82 0.893 CSR artistic and cultural events. The convenience store can sponsor 3.90 0.882 charitable groups. The convenience store would empha- 3.90 0.741 size and accommodate charitable and public welfare events. Ethical responsibility 70.695 ％ 0.756 The convenience store would empha- 3.82 0.855 size employee education and development. The convenience store would save 3.34 0.732 energy and reduce waste of resources. The convenience store would devote 3.61 0.717 itself to protecting personal data of customers. Service 31.122 ％ 0.887 Service personnel can give customers 3.65 0.824 individualized care. Service personnel can understand 3.67 0.746 customer needs. Service personnel can gain corporate 3.78 0.739 support to do their work well. Service The convenience store can provide 3.76 0.730 Quality customers with personalized service. The customer can trust the service 3.82 0.724 personnel. Even if busy, service personnel would 3.75 0.719

provide suitable services to customers The convenience store will consider 3.53 0.647

customer interests as a priority.

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Table 2. Factor analysis and reliability (continued).

Factor Cumulative Construct Dimension name and Items Mean Loading percentage of Cronbach’s α variance Reliability 48.827 ％ 0.808 The convenience store can fulfill 3.89 0.809 commitments to the customers. The convenience store can provide 3.95 0.764 appropriate services within the promised time. The services of the convenience store 3.92 0.740 are reliable. Tangibility 65.278 ％ 0.760 The convenience store’s facilities 4.14 0.842 usually have an attractive appearance. The convenience store has modern- 4.28 0.826 ized facilities. The convenience store’s employees 4.19 0.641 are dressed neatly. Corporate image 72.239 ％ 0.872 I have a better impression of the 4.12 0.867 convenience store. The convenience store has good will 4.03 0.858 Corporate and is trustworthy. Image The convenience store has a better 4.21 0.839 reputation than the other chain convenience stores. I think that the convenience store has 4.16 0.835 a good overall image. Purchase intentions 73.560 ％ 0.878 If I want to buy something at a con- 3.92 0.890 venience store, there is a high probability that I would buy products at this store. If I want to buy something at a con- 4.04 0.879 Purchase venience store, I would consider the Intentions store’s products. If I want to buy something at a con- 3.78 0.862 venience store, the store would be my first choice. I am willing to recommend the 3.60 0.797 store’s products or services to other people.

Theoretical background and hypotheses consumers through corporate image; the research framework of this study is shown This study primarily explores the re- in the following figure (Figure 1). lationships among corporate social responsibility, service quality, corporate image, There have been few past studies that and purchase intentions. Corporate image explore whether CSR would affect service is the mediating variable in exploring how quality of corporations. Only the study by corporate social responsibility and service Chiu (2009) pointed out that if consumers quality affect the purchase intentions of have a high degree of perception of CSR, The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 75

they would have higher perceived service ing in charitable events can help enhance quality as well as higher repurchase inten- corporate image and reputation. Fombrun tions. In addition, Morf et al. (1999) point- and Shanely (1990) found that CSR has an ed out that there is a positive correlation external effect on organizational reputa- between social responsibility and corpo- tion, helping the organization project posi- rate image. Brammer and Millington tive images to external groups. (2005) discovered that corporations engag- H3 CSR

H2 H6 H1 Corporate Im- Purchase In- age tentions H4 Service Quali- ty H5 Figure 1. Research model

Lichtenstein et al. (1993) found that and Namkung (2009) point out that restau- implementing CSR activities can bring rants’ service quality would positively af- good results to corporations, such as im- fect consumer behavioral intentions. The proving consumer views and purchasing study by Hsieh and Tseng (2010) pointed behavior for corporations. Kolkailah et al. out that the service quality of internet (2012) found that consumers in Egypt tend phones has a significant positive effect on to develop positive attitude towards soci- customer behavioral intentions. Finally, ally responsible companies. Chang (2009) Han and Schmitt (1997) believed that cor- pointed out that CSR can enhance con- porate image is as important as product sumer purchase intentions. In addition, quality; businesses with good images Huang (2001) surveyed corporate image would have better sales of their products. and service quality in the banking industry, finding that service quality has a positive Thus, based on the above research effect on corporate images. Lin (2005) framework and the literature on the rela- pointed out that when service quality in- tionship among variables, this study pro- creases, it not only enhances corporate im- poses the following hypotheses. age but also enhances customer satisfaction and loyalty. The study by Peng (2011) H1: CSR has a significant positive effect showed that service quality has a signifi- on service quality. cant positive effect on corporate image. H2: CSR has a significant positive effect Loudon and Bitta (1988) believed that on corporate image. consumers are more inclined to buy products with a good corporate image to lower H3: CSR has a significant positive effect purchase risk. Fornell (1992) believed that on purchase intentions service quality would have a significant effect on customer purchase intentions. Jang

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H4: Service quality has a significant posi- ception of CSR, they also have higher pur- tive effect on corporate image. chase intentions. Thus, Hypothesis H3 in this study is supported. H5: Service quality has a significant positive effect on purchase intentions. In addition, the fourth regression model investigated the relationship be- H6: Corporate image has a significant tween service quality and corporate image. positive effect on purchase intentions. As can be seen in Table 3, the independent variable of service quality explained 43.4 H7: Corporate image has a mediating percent of the variance of service quality effect in the relationship between CSR (R 2=0.434). From the equation, it can be and purchase intentions. seen that service quality ( β=0.659, p< 0.001) has a significantly positive effect on H8: Corporate image has a mediating corporate image, which means if corpora- effect in the relationship between ser- tions have good service quality, they will vice quality and purchase intentions. also have good corporate image. There- Data Analysis fore, Hypothesis H4 is supported. Mean- while, from the fifth regression model, the Regression results independent variable of service quality explained 27.2 percent of the variance of The first regression model investigat- service quality (R 2=0.272). From the equa- ed the relationship between CSR and ser- tion, it can be found that service quality vice quality. As can be seen in Table 3, the (β=0.521, p<0.001) has a significantly pos- independent variable of CSR explained itive effect on purchase intentions, which 52.1 percent of the variance of service means when corporations have higher ser- quality (R 2=0.521). From the equation, it vice quality, consumers will have higher can be seen that CSR ( β=0.772, p<0.001) purchase intention. Thus, Hypothesis H5 is has a significantly positive effect on ser- supported. Finally, the sixth regression vice quality, which means that if consum- model investigated the relationship be- ers have a higher perception of CSR, they tween corporate image and purchase inten- will have higher perceived service quality. tions. As can be seen in Table 3, the inde- Thus, Hypothesis H1 is supported. From pendent variable of corporate image ex- the second regression model, the inde- plained 40.0 percent of the variance of pendent variable of CSR explained 42.0 purchase intentions (R 2=0.400). From the percent of the variance of service quality equation, it was found that corporate im- (R 2=0.420). From the equation, it was age ( β=0.632, p<0.001) has a significantly found that CSR ( β=0.648, p<0.001) has a positive effect on purchase intentions, significantly positive effect on corporate which means when corporate image is image, which means corporations with bet- good, consumers also have higher pur- ter CSR performance would also have a chase intentions. Consequently, Hypothe- better corporate image. Therefore, Hy- sis H6 in this study is supported. pothesis H2 is supported. From the third regression model, the independent variable The Mediating Effect Of Corporate Image of CSR explained 28.3 percent of the variance of service quality (R 2=0.283). From This study uses the mediating effect the equation, it was found that CSR confirmation model by Baron and Kenny (β=0.532, p<0.001) has a significantly pos- (1986) to evaluate whether corporate im- itive effect on purchase intentions, which age is the mediating variable between means that if consumers have greater per- CSR and purchase intentions; the follow-

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ing four conditions must be met: 1) CSR porate image must have a significant in- must have a significant influence on pur- fluence on purchase intentions; 4) in the chase intentions; 2) CSR must have a sig- mediating variable model, the regression nificant influence on corporate image; 3) coefficient of CSR must be smaller than When CSR and corporate image are sim- the regression coefficient of the inde- ultaneous prediction variables in a regres- pendent variable model. sion analysis on purchase intentions, cor-

Table 3. Regression analysis results

Independent Dependent β R2 F DW variable variable CSR Service quality 0.772*** 0.521 357.223*** 1.907 Corporate im- CSR 0.648*** 0.420 238.216*** 1.811 age Purchase in- CSR 0.532*** 0.283 129.662*** 1.912 tentions Corporate im- Service quality 0.659*** 0.434 252.248*** 1.788 age Purchase in- Service quality 0.521*** 0.272 122.871*** 1.859 tentions Purchase in- Corporate image 0.632*** 0.400 219.351*** 1.923 tentions *P<0.05; **P<0.01; ***P<0.001

First, this study evaluates whether chase intentions through corporate image. corporate image has a mediating effect be- Table 3 shows that there is a significant tween CSR and purchase intentions. Table influence between service quality and 3 shows that there is a significant influence purchase intentions ( β=0.521, p<0.001). between CSR and purchase intentions In addition, there is a significant influence (β=0.532, p<0.001). In addition, there is a between service quality and corporate im- significant influence between CSR and age ( β=0.659, p<0.001). corporate image ( β=0.532, p<0.001). Table 4. shows that there is a significant influ- Table 4. shows that there is a signifi- ence between corporate image and pur- cant influence between corporate image chase intentions, and there is a significant and purchase intention, and there is a sig- influence between CSR and purchase in- nificant influence between service quality tentions ( β=0.210, p<0.001), but the β val- and purchase intentions ( β=0.185, ue is smaller than 0.532 from the first step, p<0.01), but the β value is smaller than which means that corporate image has par- 0.521 from the first step, which means tial mediation between CSR and purchase that corporate image has partial mediation intentions. Thus, Hypothesis H7 in this between service quality and purchase in- study is supported. tentions. Thus, Hypothesis H8 in this study is supported. In addition, this study explores whether service quality would affect pur-

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Table 4. The mediating effect of corporate image

Independent Dependent β R2 F variable variable CSR 0.210*** Purchase Intentions 0.426 121.517*** Corporate image 0.496*** Service quality 0.185** Purchase Intentions 0.419 118.479*** Corporate image 0.510*** *P<0.05; **P<0.01; ***P<0.001

Conclusion and Limitations society, thereby creating a win-win situation between corporations and society. Conclusion and Suggestions Thus, the emphasis and implementation of philanthropic responsibility would certain- This study finds that CSR has a sig- ly be a crucial issue for corporations. nificantly positive effect on corporate image, service quality, and purchase inten- In addition, this study finds that ser- tions. Other than protecting the interests of vice quality has a positive effect on corpo- various interested parties (employees, rate image and purchase intention. In an shareholders, consumers, suppliers, gov- age of “customer first”, corporations that ernments, and environment) corporations can succeed in service quality would find also need to abide by laws. Corporations it easier to defeat competitors. Understand- can enhance their corporate image by ac- ing customer needs and providing custom- tively giving to charitable and social wel- ers with fast, reliable, and customized ser- fare events or giving back to society and vices can enhance consumer identification caring for minorities. Welford (2004) with corporations and establish a corporate pointed out that an important part of CSR image of excellent service, which would is using professional training to cultivate naturally help in establishing customer and develop employees, and educate them loyalty and promoting them to buy again. to be concerned with consumer rights, The mean values in three dimensions of which can enhance service quality. In ad- service quality show that the dimension of dition, when consumers believe that a cor- “service” has lower scores, which means poration is not only seeking profit without consumers have greater doubts about concern for others, it would strengthen whether corporations place customer inter- consumer purchase intentions. Promoting ests first. Therefore, if corporations can public welfare events can always resonate help consumers feel well-attended and re- with consumers in inspiring their benevo- spected, and provide customer-centered lent feelings, and cause consumers to en- services, it would certainly move them to gage in actual purchasing behavior. The become loyal; this is a very important is- mean values of three dimensions of CSR sue for corporations as well. show that “philanthropic responsibility” earned higher scores, which means that if Finally, corporate image has a posi- corporations can sponsor charitable and tive effect on purchase intentions. Corpo- minority groups, participate in public wel- rate professionalism and a good and trust- fare, artistic, and cultural events, partici- worthy image can keep consumers, who in pate in community environment improve- turn increase in numbers and sales due to ment, corporate volunteers, or donate re- word-of-mouth; more importantly, com- sources, it would certainly make the public pared to other corporations, this can better sense corporate sincerity in giving back to help expand market share, enabling a cor- The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 79

poration to remain successful. The other and devoting themselves to social contri- important finding of this study is that cor- butions to establish good corporate imag- porate image has a mediating effect be- es. tween CSR and purchase intentions, as well as between service quality and pur- Limitations chase intentions, which means that even Since this study uses five sections of though CSR has a positive influence on questionnaires as measurement tool, it is purchase intentions, corporate image can difficult to avoid respondents producing an lower the effect of CSR on purchase inten- overestimated result due to social expectations. Thus it can be seen that corporate tions (Crowne and Marlowe, 1960). Due to image plays an instrumental role in influ- errors that may arise from this point, this encing consumer choices, even though a study applies the suggestion by Spector corporation has good performance in CSR. and Fox (2003), modifying the more sensi- In addition, although service quality has a tive questions or wordings in the process positive effect on purchase intentions, cor- of compiling the research tool, in order to porate image can be used to lower the ef- ask for more precise concepts with activity fect of service quality on purchase inten- descriptions that are fact-oriented to pre- tions; consequently the establishment and vent this type of error. CSR and corporate maintenance of corporate image should be image are both views from long-term ob- conducted more carefully. Thus, corpora- servation of corporations, but it is possible tions are all working on strengthening that corporations violated their corporate CSR, making their financial information social responsibility, or events affecting transparent, using CSR reports to disclose corporate image took place, influencing non-financial information, following regu- the public’s view. This is something that lations and laws, lowering resource waste, this study cannot predict or control

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TECHNOLOGY EVOLUTION, TECHNOLOGY DIFFUSION, AND REGIONAL DEVELOPMENT: THE FLAT PANEL DISPLAY INDUSTRY IN EAST ASIA

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

Shu-Lung Wang * Department of Mechanical Engineering Taoyuan Innovation Institute of Technology, Taiwan, R.O.C. *Corresponding Author [email protected]

Abstract

As a new and thriving high technology industry, the flat panel display (FPD) industry has rapidly emerged and developed over the past two decades in East Asia. However, rather than developed as a global industry, it has grown to emerge as a regional high technology industry. The primary objective of the present study is to shed light on the developmental process, technological evolution, as well as technological diffusion of this significant industry. It also discusses about the experience of the technology latecomer countries like Korea and Taiwan, striving to achieve the development of the FPD industry. To date, the FPD industry has not been proliferated and diffused in the rest of the world, even in the advanced regions including the U.S. and Europe. This fact has further intensified the evidence that the FPD industry is purely a unique high technology industry in East Asia. Some policies and managerial implications are drawn.

Key words: Flat panel display industry, technology evolution, technology diffusion, regional development

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Introduction well as to the large outdoor LED devices in the cities (Hart, et al., 2000; Semenza, Over the past two decades, a new and 2000; Spencer, 2005). In the meantime, flourishing high technology industry --the TFT-LCD has also widely applied in the FPD industry has rapidly developed and industrial equipment, transport equipment, emerged. However, contrary to being a medical equipment, and military equip- global industry, it has totally developed ment (Polgr, 2003; Mathews, 2005). In the and risen in East Asia, as an East Asia- early beginning, its market size was quite themed high technology industry (Lee, et limited, and even negligible without the al., 2011). In the setting of the FPD indus- future. In 1983, the global FPD market try, the segment technology of the thin size was merely US$500 million, with film transistor liquid crystal display (TFT- US$2 billion, in 1987. Since 2000, the LCD) has been firmly recognized as one of FPD industry grew significantly and ex- the most important and influential high plosively with US$21 billion in 2001; technologies in the world. It is the key US$35 billion, 2003; US$84 billion, 2006; driving IT products to be colorful, light, and US$103 billion, 2012 (see Table 1). thin, mobile, environmental friendly, low radiation, and high density (Hung, 2006). The TFT-LCD industry is a very It has now accounted for more than 90 capital intensive, technology intensive and percent of the entire FPD output per an- knowledge intensive. It is also an industry num, and is regarded as the most repre- with high investment threshold, and a high sentative and leading technology in the risky industry that is easily influenced by FPD industry. the fluctuation of the global economy (Semenza, 2000; Chang, 2005). TFT-LCD Compared with development of other is one of the high technology industries prevailing high technology industries in that are highly affected by the fluctuation the world; for example, the semiconductor of the global economy. To date, the TFT- industry developed in the 1970s, the per- LCD industry has experienced several in- sonal computer, 1980s; the internet, 1990s, dustrial cycles. The occurrence of the in- the TFT-LCD also commenced in the dustrial cycle has always led to the ad- 1990s and was considered as the most vancement and foster of the industrial emerging industry in the world. It has cur- technological capabilities, and has also rently been applied to produce a variety of resulted in the robust growth for the in- electronic products, ranging from the dustry. The most brilliant industrial feature large-sized LCD TV, to cell phones, digi- of this industry is that most of the industri- tal cameras, personal digital assistances, as al investors have always adopted a

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Table 1. Global FPD market (unit: billion)

Year 1987 1991 1998 2001 2002 2005 2006 2007 2008 2009 2010 2011 2012 Amount 2 5 11 21 29 71 84 105 105 88 93 97 103 Source: DisplaySearch (2013)

forward looking investment strategy, by clustering, thus successfully surpassing the making the reverse investment at the investment and development obstacles downturn of the industrial recession to (Mathews, 2004). Table 2 displays the successfully enter the industry. None of technological evolution of the TFT-LCD them has entered the industry at the up- industry in terms of the technology genera- turn. More predominantly, the newcomers tion, the size of glass substrate, and the of the industry have also engaged in their amount of required investment for the in- business through the mode of industrial dustry.

Table 2. Technological evolution of the TFT-LCD industry

Generation Time for mass production Dimension of glass substrate Required investment amount G1 1991 30cm x 40cm US$100-200 millions G3 1995 55cm x 65cm US$500 millions G4 2000 68cm x 88cm US$700-900 millions G5 2002 110cm x 130cm US$1 billions G6 2003 150cm x 185cm US$1.5 billions G7.5 2006 195cm x 225cm US$2 billion G8.5 2008 220cm x 250cm US$3 billions Source: Murtha, et al. (2004); AUO (2013)

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The industrial evolution of the FPD fore, the present study excludes China for industry has offered an interesting re- the study. search topic in investigating about the important industrial matters about the tech- United States -- the Original nology evolution, technology diffusion, as Inventor of FPD well as the regional development. This has inspired the interest of the present To date, most of the technologies in study to undertake the research. Today, the global electronics sector were origi- the world’s leading FPD supply countries nally invented in the U.S., and were also are those countries located in the region driven for mss-production and commer- of the East Asia, including Japan, Korea cialization by the U.S. enterprises (Hart, and Taiwan. Currently, the three far east- et al., 2000). However, in pursuit of low- ern countries totally dominate around 95 cost manufacturing for sustaining indus- percent of the world’s FPD output, with trial competitiveness and proceeding in- Korea holding 50 percent of market share; dustrial globalization, the industrial sup- Taiwan, 45 percent; and Japan, 5 percent. ply chain started to transfer and move to the East Asian countries such as Japan, Wong and Mathews (2004) have in- Korea, and Taiwan for mass-production, dicated that certain Asian newly indus- as they are comparatively competitive in trialized countries have rapidly emerged the production and manufacturing set- and gained significant position in the tings. The technological development global settings of high technology devel- process of the FPD industry is almost opment. However, the international litera- similar to other electronics sectors. The ture about how can these emerging coun- original FPD technology was invented in tries catch up with the advanced counter- the lab- oratory in the U.S. in 1960s parts and even surpass them in certain (Spencer, 2003). In the decade, the lead- high technology sectors have been lim- ing U.S. MNEs, including RCA, West- ited. This argument has also motivated the inghouse, and General Electric had under- present study to conduct the analysis. taken the crystal technology to research The present study is naturally a qual- and develop the FPD technology. Howev- itative case study. The present study is to er, at that time, RCA considered the FPD take the TFT-LCD industry as the major as a threat technology that would replace research industry, without covering the its leading business—CRT. Therefore, research about other segment industries of RCA had not endeavored to further con- the FPD industry. In the meantime, the duct the research for the development of present study will not discuss about the FPD technology for commercialization. development of FPD industry in China, as the Chinese FPD industry is mainly ori- In late 1970s and early 1980s, some ented by low-end and small-size FPD U.S. enterprises, including Beckman In- manufacture. The present study primarily struments, Fairchild, Hewlett-Packard, focuses on the high-end and large-size Motorola, Texas Instruments, and Timex FPD. The large size FPD industry in Chi- had also considered the research of FPD na has not completed developed; there- technology. However, due to the requirement for tremendous financial budget for

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the research and development, they all pliers for antidumping of FPD. In such, had suspended to conduct the project. between 1991 and 1993, the U.S. gov- Since then, none of American enterprises ernment accordingly imposed the anti- had continued to engage in the research of dumping tax on the Japanese firms as a FPD technology (Flamm, 1994). In 1980s, punishment. However, the development IBM commenced the research and devel- and result of this antidumping case had opment of LCD technology, in a hope to nothing to do with the development of replace CRT to be applied for the manu- FPD industry in the U.S. On the contrary, facture of personal computer. It appointed this antidumping case had reversely its Japanese affiliate—IBM Japan to co- pushed the American IT MNEs to seek operate with Toshiba to form a technical the procurement from overseas, particu- strategic alliance to jointly develop the larly Japan (Flamm, 1994). During the large-sized FPD technology. They jointly period, the government of the U.S. had set up a joint venture—Display Technol- perceived a fact that the FPD industry is ogies Inc. (DTI). Since IBM had not un- essential to the nation, with particular ap- dertaken commercialization for the manu- plication in the defense sector. FPD is facture of FPD in the territory of the U.S., widely recognized as a friendly human it was therefore not able to produce spill- interface device with a broad application over effects of the technology and in a number of military, industrial and knowledge diffusion to make the FPD in- commercial appliances. Particularly, the dustry burgeon and proliferate in the U.S. U.S. government had foreseen that the (Barfield, 1994). FPD would definitely replace the CRT to be used in the majority of the U.S. weap- In early 1990s, the emergence of a on systems by the end of the twenty cen- wide range of IT products led the world to tury (Hart et al., 2000). Therefore, the enter the information age and the U.S. government had commenced its in- knowledge economy era. The demand for tention to develop the FPD industry in the notebook computer was very strong. nation. In early 1990s, by injecting a large However, most of the scale of the U.S. sum of public research fund, the U.S. FPD manufacturers was very small and government had intended to develop a they could not meet the huge demand for FPD industrial development alliance. In FPD at home. At that time, the high end addition, the U.S. government had also FPD was still under the research and de- enlarged its defense procurement program velopment. Leading American IT MNEs, to stimulate the civilian research and de- such as Apple, Compaq, and IBM all had velopment of FPD, in order to reverse its a very strong demand for FPD. However, industrial disadvantage in this sector. the local supply was not in a position to However, its endeavor for such effort had meet their needs. Therefore, they had to not accomplished at all. import the large quantity of high-end of FPDs from Japan for the manufacture of Japan -- the Pioneer for FPD notebook computers. In 1990, a few Commercialization American FPD manufacturers sent petition to the Department of Commerce of In 1970, RCA was the first U.S. en- the U.S. in charging Japanese FPD sup- terprise that conducted the technology

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transfer of LCD technology to Japanese In 1990s, the Japanese FPD industri- Sharp. This activity had therefore encour- al strategy was concentrated to expand the aged many Japanese firms, including Hi- application domain of FPD, as well as the tachi, NEC, and Seiko Epson to engage in improvement of the technological charac- the research and development of crystal teristics of LCD, especially the dynamic technology for commercialization (Mur- application in notebook computer. This tha, et al., 2004). In 1973, Sharp was the development has therefore boosted the first Japanese enterprise that invented the rapid and robust development of notebook TN-LCD technology for the manufacture computer in the world. The vigorous de- of electronic desktop calculators, which velopment of the global computer indus- post the age for commercialization of the try has clearly evidenced a fact that the crystal technology. In the middle of Japanese enterprises have successfully 1970s, a number of Japanese enterprises implemented the development and inno- had successfully developed a wide range vation of the high technology in the set- of consumer electronic products, includ- ting of practical market in driving the ro- ing calculators, and watches (Borrus and bust growth of the global IT industry. In Hart, 1994). The enthusiastic and innova- 1991, Sharp partnered with DTI to pro- tive Japanese enterprises had further ac- ceed the first generation TFT-LCD tech- cordingly upgraded and expanded the ap- nology for commercialization, commenc- plication of LCD technologies for a varie- ing the technology development path for ty of electronic products. In 1980s, the the global FPD industry (Semenza, 2000; government of Japan had commenced the Lin, et al., 2006). The TFT-LCD technol- formulation of certain industrial policies ogy was originally applied for the manu- and strategies for the development of FPD facture of notebook computer, and ena- industry. The most prominent undertake bled this device to be full colorized, large- was to invite well-known enterprises, in- sized with better solution and induced the cluding NEC, Sharp, Casio, and Sanyo to booming of the desktop computer in the establish a FPD industrial consortium. In world. However, the industrial phenome- addition, a group of seventeen firms was non would produce the industrial imbal- collected to form a LCD research alliance ance between demand and supply, causing to research the development of LCD for the FPD industry to confront the first in- HDTV. The main objective for setting up dustrial recession in 1993-1994. In addi- these alliances was in a hope to enable the tion, the downturn posted an opportunity participant firms to jointly share the re- to attract more and more Japanese firms search resources and results from the alli- to invest and enter the industry. To date, ances, and disseminate the LCD technol- Japan has developed a comprehensive ogy to the setting of Japanese commercial supply chain that has fostered the signifi- sector. The government of Japan had cant competitive advantage and competi- therefore aimed to construct a compre- tiveness of the FPD industry in Japan, hensive FPD supply chain, including raw firmly strengthening the nation’s leading materials, components, and production global position (Borrus and hart, 1994; equipment in Japan (Wong and Mathews, Bowonder et al., 1996). 1998).

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Korea -- the Leader for FPD corporate reengineering and structuring, Mass Production Hyundai identified that it should focus its core business mainly on the settings of In early 1990s, the global FPD mar- mechanical engineering and heavy indus- ket started to boom. Three leading Korean try which were competitive strong. In cabols, including Samsung, LG and 2001, it sold and transferred the FPD Hyundai all considered the TFT-LCD business to Chinese firm---BOE (Murtha, technology that was the new emerging et al., 2004). Since then, there are only business sector with high market and two main Korean firms—Samsung and commercial opportunities. Especially, it LG that dominate the manufacture of was a technology that could take ad- FPD. They are the two largest TFT-LCD vantage of their indigenous capabilities suppliers in the world. and expertise in the manufacture of DRAM, and a new investment setting that In 1997, at the outbreak of the Asian can enhance and intensify their market financial crisis, the Japanese firms as well competitiveness in the business of elec- as Korean firms were heavily influenced tronic end products (Hart, et al., 2000; by the turmoil, leading to the severe dete- Park, et al., 2008). In 1995-1996, Japa- rioration of their financial standing. On nese enterprises undertook the construc- the contrary, the Korean firms aggressive- tion of TFT- LCD substantially and ex- ly engaged in the massive investment to cessively to lead to the oversupply of sustain the expansion of the next genera- FPD, causing the global FPD industry to tion FPD facilities, subverting the ordi- experience the second industrial reces- nary market expectation. In the meantime, sion. In such, the Japanese firms had Korean enterprises made use of the price therefore hauled the investment for the advantage derived from the sharp depre- construction of FPD facilities. Samsung ciation of Korean wons by conducting the had then made use of this business oppor- low-price market strategy to acquire a tunity to make reverse investment in con- significant market share from the Japa- structing the FPD facilities heavily, and nese firms and eventually surpassed the acquired the source of technology trans- Japanese counterparts as the industrial ferred from Japanese Fujitsu and success- leader (Semenza, 2000). In 1999, Korea fully enter the industry to construct the replaced Japan as the largest FPD supplier FPD facilities. In addition, Hyundai also in the world. Korean success in imple- gain the technology transferred from menting the aggressive business strategies Toshiba to successfully construct the FPD to exceed and replace Japan’s leading po- business. These moves marked the mile- sition had surprised Japanese expectation. stones for Korean firms to establish the As the original technology and mass pro- FPD industry. In 1999, by transferring the duction pioneer in the setting of global display technology, Dutch Philips invest- FPD industry, Japan was caught up by the ed in LG by jointly setting up a joint ven- technology late comer country—Korea. ture—LG Philips which becomes the second largest global FPD manufacturer fol- Taiwan -- the Follower in FPD Industry lowing Samsung (Semenza, 2000; Park et al., 2008). As a consequence of strategic

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In late 1970s, Taiwan started to de- of capital on the expansion of manufactur- velop the personal computer industry and ing facilities to smoothen their financial emerged as the world’s second largest standing to retain their industrial position. notebook computer supplier, with a strong On the other hand, the Japanese firms demand for TFT-LCD in late 1990. At were also able to cope with the sever chal- that time, the most important and the key lenges and threats from the Korean coun- component for the manufacture of the terparts by allying with the Taiwanese notebook computer-- TFT-LCDs were firms (Amsden, and Chu, 2003; Chang, mainly imported from Japan and Korea, 2005; Hung, 2006; Hu, 2008). and they were the key commodity that caused Taiwan to incur the huge trade In foreseeing the eventual replace- deficit with the two neighboring countries ment of CRT by FPD, Taiwan’s leading (Mathews, 2001). In the middle of 1990s, CRT supplier --Chinese Tube Corporation TFT-LCD was regarded by the govern- was the first enterprise that acquired the ment of Taiwan as the key industrial TFT-LCD technology transferred from component in the development of the na- Japan’s Mitsubishi in 1998. This was the tional strategic high technology indus- first case that the Japanese firm success- tries, in order to reduce the massive trade fully engaged in the transfer of TFT-LCD deficit with the adjacent countries. This technology to Taiwan, posting a good strategy was not only aimed to establish demonstration effect to other Japanese the independent high technology industry, firms to conduct the transfer of TFT-LCD as well as to lessen the dependence on the technology to Taiwan in pursuit of the foreign technology (Hart, et al., 2000), but establishment of strategic alliance and also to construct a complete supply chain business partnership. In the same year of for the nation’s electronics sector. In 1998, in view of the optimistic develop- 1997, the outbreak of Asian financial ment of the FPD sector, four other leading turmoil had deteriorated the financial business groups in the traditional indus- standing of the Japanese firms. In addi- tries as well as the leading IT firms, in- tion, the leading position of Japanese FPD cluding Acer, Chimei, Hannstar and industry had also met strong adverse chal- Quanta had also endeavored to make sig- lenges from Korean low-price competi- nificant investment in the manufacturing tion. The Japanese firms had accepted the facilities of TFT-LCD (Chang, et al, petition for the establishment of strategic 2002). The four companies had also re- alliance proposed by the Taiwanese firms spectively acquired the technology from to commence the transfer of TFT-LCD the Japanese firms to rapidly construct technology to the Taiwanese counterparts their TFT-LCD facilities and technologi- in order to acquire large sum of loyalty cal capabilities. In such, the Taiwanese fees to alleviate their financial burden. In firms were therefore enabled to acquire addition, the Japanese firms were also in a the state-of-the-art TFT-LCD technolo- position to gain the steady supply of TFT- gies to establish the TFT-LCD industry. LCDs from Taiwan on behalf of the establishment of business partnership. In The competition of the TFT-LCD in- such, the Japanese were therefore able to dustry in Taiwan has been very intensive avoid the spending of significant amount and fierce. The activities of industrial

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M&A have been very prevalent, as the and high level human resources (Hung, industry has experienced three major in- 2006). As the latecomer nations, Korea dustrial reorganizations and has evolved and Taiwan do not simply follow the path into a fact that the large firm becomes of technological development of the ad- larger and stronger, due to the expansion vanced countries, but perhaps skip some of the product line to sustain their com- stages or even create their own individual petitive advantage and competitiveness. path that is different from the advanced Currently, there are four TFT-LCD manu- countries (Lee and Lim, 2001). facturers in Taiwan, including New Chimei, AUO, Chunghwa Picture Tube, They indigenously established their and Hannstar. Since 1998, Taiwan com- own unique high technology industry de- menced the investment in constructing the velopment policies and measures in line facilities for TFT-LCD with a small glob- with their exclusive features and capabili- al market share of 2%, while in 2000, its ties of enterprise competitive strategies to market share soared significantly to 12%. successfully overcome industrial barriers In 2002, Taiwan surpassed the technology and challenges to develop the FPD indus- parental country—Japan, as the second try. Significantly, they catch up with and largest TFT-LCD supplier in the world, even exceed Japan to be the leaders in the fully demonstrating its technological ab- production setting of FPDs. Mathews sorptive and innovative capacity. In 2006, (2004) indicated that this is a remarkable Taiwan ever exceeded Korea to become empirical fact. Murtha, et al. (2004) also the largest TFT-LCD supplier. Taiwan is mentioned that from the evidence of the able to rapidly catch up with Japan and global evolution and development of FPD Korea to successfully establish its FPD industry, it has shown that even a high industry at the global downturn to become technology industry is concentrated in a one of the most important players in the particular country or region, it will still world. not prevent other countries to develop this industry, unless they are off from the out- Discussion and Conclusions side. Although being technology latecom- ers, the success of the two nations in de- To create and establish a new indus- veloping the industry enables them to try, especially a new high technology one compete with the advanced countries is often requires a very complex develop- thoroughly verified. Murtha, et al. (2004) ment process, as it will face a number of also argues the fact that Korea and Tai- significant factors in cultural, political, wan can become the important global economic, social, scientific and techno- technology product suppliers is resulting logical level (Bowonder, et al., 1996; Jan from their abilities to take advantage of and Chen, 2005). Typically, the develop- international knowledge transfer and the ing countries will face more complex in- developmental trend of the international dustrial risks and obstacles, as they need division of labor. It is evident that able to to invest huge funds to acquire cutting- cope with the advanced counterparts in edge high technology skills, sophisticated developing high technology, East Asian production techniques, intensive R & D countries clearly demonstrated that the activities, diffusive knowledge networks, comprehensive regional cooperation can

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foster and enhance the regional economic development. The FPD industry is the best evidence case.

References Hart, J. A., Lenway S. A., and Murtha T. P., 2000.“Technonationalism and Amsden, A. H., 2004.“Import substitution cooperation in a globalizing indus- in high-tech industries: Prebisch try,”In Prakash, A., and Hart, J. A. lives in Asia,”CEPAL Review, 82, (eds.), Coping with globalization, pp. 75-89. London: Routledge, pp. http://www.informaworld.com/smp Amsden, A. H., and Chu, W. W., 2003. p/title~db=all~content=t727488366 Beyond Late Development: Tai- ~tab=issueslist~branches=1 - wan's Upgrading Policies, Cam- v1 118-148 bridge, MA: MIT Press. Hu, M. C., 2008.“Knowledge flows and AUO, 2013. The relations between size innovation capability: the patenting matter and glass substrate of differ- trajectory of Taiwan’s thin film ent generations, transistor- liquid crystal display in- http://www.auo.com/?sn=188&lang dustry,” Technological Forecasting =en-US . & Social Change, 75, pp. 1423- 1438. Borrus, M., and Hart, J. A., 1994. “Dis- play’s the thing: the real stakes in Hung, S. W., 2006.“Competitive strate- the conflict over high-resolution gies for Taiwan’s thin film transis- displays,” Journal of Policy Analy- tor- liquid crystal display (TFT- sis and Management, Vol. 13(1), LCD) industry,” Technology in So- pp. 21-54, ciety, 28, pp. 349-361.

Chang, P. C., Tsou, N. T., Yuan, B. J. C., Jan, T. S., and Chen, H. H., 2005. “Sys- and Huang, C. C., 2002. “Devel- tems approaches for the industrial opment trends in Taiwan’s opto- development of a developing coun- electronics industry,” Technova- try,” Systemic Practice and Action tion, 22, pp. 161-173. Research, 18(4), pp. 365-377.

Chang, S. C., 2005.“The TFT-LCD indus- Lee, J., Kim, B. C., and Lim, Y. M., 2011. try in Taiwan: competitive ad- “Dynamic competition in techno- vantages and future develop- logical investments: an empirical ments,”Technology in Society, 27, examination of the LCD panel in- pp. 199-215. dustry,” International Journal of In- dustrial Organization, forthcoming. DisplaySearch, 2013. http://www.displaysearch.com .

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Lin, J T., Wang, F. K., Lo, S. L., Hsu, W. T., and Wang, Y. T., Spencer, J. W., 2003.“Firms’ knowledge- 2006.“Analysis of the supply and sharing strategies in the global in- demand in the TFT-LCD market,” novation system: empirical evi- Technological Forecasting and So- dence from the global flat panel cial Change, 73, pp. 422-435. display industry,” Strategic Man- agement Journal, 24, pp. 217-233. Mathews, J. A., 2005.“Strategy and the crystal cycle,”California Manage- Wang, W. C., 2006.“The dynamics of ment Review, 47(2), pp. 6-32. FDI of the TFT-LCD cluster: a study of Japanese firms in Taiwan,” Mathews, J.A., 2004.“Book review essay: In Gatrell, J, and Reid, N., (eds), new perspectives on global indus- Enterprising worlds, Springer, pp. trial dynamics,” Academy of Man- 29-39. agement Review, 29(3), pp. 505- pp. 1-10. 509. Wong, P. K., and Mathews, J.A., Murtha, T. P., Lenway, S. A., and Hart, J. 2005.“Editorial: competitive strate- A. 2004.“Industry creation as gies if Asian high tech firms: the knowledge creation: the new geog- challenge of late-industrialization,” raphy of innovation,”In Kenney, International Journal of Technology M., and Florida, R. (eds.), Locating Management, 29(1/2), pp. 1-5. global advantage- industry dynamics in the international economy, Stanford, California: Stanford Uni- versity Press, pp. 175-202.

Park, T. Y., Choung, J. Y, and Min H. G., 2008.“The cross-industry spillover of technological capability: Korea’s DRAM and TFT-LCD industries,”World Development, 36(12), pp. 2855-2873.

Polgar, L. G., 2003.“Flat Panel Dis- plays,”Business Economics, 38(4), pp. 62-68

Semenza P. D., 2000.“Patterns of future use of flat panel displays,” OECD Information Technology Outlook 2000, Organization for Economic Co-operation and Development, France, pp. 193-207

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THE EFFECT OF WORD-OF-MOUTH, KNOWLEDGE, AND PROMOTIONS ON PURCHASE INTENTION OF MEDICAL COSMETICS

Yi-Chih Lee Department of International Business Chien Hsin University of Science and Technology, Taiwan [email protected]

Wei-Li Wu* Department of International Business Chien Hsin University of Science and Technology, Taiwan, R.O.C. *Corresponding Author: [email protected]

Yang-Chu Lin Department of Business Administration Soochow University, Taiwan, R.O.C.

Chia-Ko Lee Ph.D. Program in Business Feng Chia University Department of Administration Cheng Ching General Hospital, Taiwan, R.O.C.

Abstract

In Asia, if cosmetics are described as “medical cosmetics” care items, they tend to easily attract consumers. This study attempts to explore whether online word-of-mouth and consumer knowledge relating to medical cosmetics would affect consumer purchasing behavior. In addition, this study also incorporates promotional methods for online shopping, hoping to provide businesses with a tool for marketing their products.

Key Words: medical cosmetics, online word-of-mouth, purchase intention, promotion

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Introduction response to the natural pursuit of beauty, there are many online sales on medical Based on the 2012 comscore survey cosmetics. The main issue of this study is on internet users, there are currently which types of medical cosmetics can more than 1.4 billion internet users in the attract consumers. Since there is a high world, among whom 40% are Asian. In volume of information on the internet, 2011, the percentage of internet users in consumers usually use the internet to Japan was 79.1%, 78.0% in South Korea, search for information relating to care 71% in Singapore, and 23.7% in Thai- products, and this study attempts to ex- land; even though China only has 36.2%, plore whether online word-of-mouth and but it has 500 million people, half of the consumer knowledge relating to medical internet users in Asia. As for Taiwan, cosmetics would affect consumer pur- 71% of the population is internet users, chasing behavior. In addition, this study which increased to 73% in 2012 also incorporates promotional methods (R.D.E.C., 2012). Among them, about for online shopping, hoping to provide 60% of the internet users have shopped businesses with a tool for marketing their online, and they mainly shop online be- products. cause of convenience and cheap prices (TWNIC, 2012), thus online shopping Literature Review has promoted the rise of “otaku economy.” Online word-of-mouth and purchase intention In Taiwan, if cosmetics are described as “medical cosmetics” care In the past, word-of-mouth trans- items, they tend to easily attract consum- mission means communication between ers, and medical cosmetics are develop- individuals, it is slow and smaller in ing by 20% each year. In 2009, “For Be- scale. Modern technology has allowed loved One” medical cosmetics just en- people to communicate globally using tered the Chinese market, and in 2010 it media such as computers and cell has surpassed renowned international phones; it is faster and broader in scale. brands to become the top brand in sales Many people establish their own blogs in skin care products (CommonWealth, online to share their product usage expe- 2011). Micro cosmetic surgery has moti- riences. In blogs, positive promotions of vated this wave in medical cosmetics, tasty or fun products or negative promo- since according to Maslow’s theory of tions of displeasing services are all needs, when people have met their bio- sources of information needed by people. logical and safety needs, they tend to de- Popular blogs have many readers and sire an improvement on their appearances attract many product advertisers, who to increase their self-confidence and en- request writers to write promotional posts hance their interpersonal relationships. after trial use; there are also advertisers With limited funding, the efficacy of who actively request linked advertise- medical-grade cosmetics is the optimal ments. These commercial behaviors are tool for improving appearances. all due to product promotions. The purchase intentions of consumers originate Women are more willing to conduct in a series of experience sharing of pur- internet shopping, and female consumers chase factors (Harrison-Walker, 2001). are easily affected by online promotional Scholars suggested that positive word-of- methods, but male consumers are more mouth would significantly influence the likely to purchase prices with high unit travel intentions of tourists (Jalilvanda et prices online (Lu et al., 2006). Thus, in al., 2012). In addition, online word-of-

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mouth can significantly influence brand Promotions and purchase intention establishment, product development, and quality guarantees (Dellarocas, 2003). Kotler (2003) pointed out that pro- People would have different responses to motions are the combinations of various positive and negative signals, which sig- incentive tools to stimulate the accelera- nificantly affect the consumers’ purchase tion of sales or expansion of sales vol- intention for a product (Chen, 2010). umes, including: coupons, samples, raf- Huang and Chen (2006) pointed out that fles, free trials, and gifts. Monetary or sales volumes and customer comments non-monetary promotions can all bring would affect the choice of consumers different utility and enjoyment to con- online, and the comments from regular sumers. Monetary promotions primarily shoppers are more powerful than expert provide functional benefits such as sav- comments. Thus, this study proposes ings and convenience; non-monetary Hypothesis 1: promotions primarily elevate enjoyment value (Chandon et al., 2000). For con- H1: overall evaluation in online word-of- sumers, scholarly research pointed out mouth would affect consumer purchase that if products with high unit prices can intention toward this product have lowered prices, they would be more attractive, but consumers prefer percentage discounts for prices with low unit Product knowledge and purchase prices (Chen et al., 1998). Lin et al. intention (2009) pointed out that when consumers face price reduction activities, a high According to scholarly categories, price discount would make consumers product knowledge can be divided into doubt the overall evaluation of the prod- two types. The first is objective know- uct, in turn leading to negative quality ledge: product category information in perceptions; but when perceived price the long-term memories of consumers. sacrifice is lower, perceived value would The second is subjective knowledge: the be higher, and purchase intention would self-perception of consumers about how increase. Thus, this study proposes Hy- much they know about products (Moth- pothesis 3: ersbaugh, 1994). Lin et al. (2012) pointed out that product knowledge has a signifi- H3: Different promotional methods cant positive effect on advertising atti- would significantly affect purchase inten- tude, brand attitude, and purchase intention tion, if consumers have more product knowledge, there is greater influence on Methodology advertising effect, different product knowledge about different products also After a discussion of related litera- affect purchase intention in different ture reviews, this study is ready to under- ways. Raoand and Monroe(1988) sug- stand the influences of consumers of gested that product knowledge would electronic word-of-mouth, product affect consumer evaluation of products, knowledge, and promotion on their inten- and product knowledge would affect tion to purchase products. Thus, this pa- consumer purchasing decisions, in turn per proposed the following framework, affecting their purchase intention. Thus, in Figure 1. this study proposes Hypothesis 2: Reliability and Validity H2: Product knowledge has a significant positive influence on purchase intention

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To measure the consistency of scale, ples, 151 are female, at 75.9%, and 48 a pre-test was carried out over 50 quali- are male, at 24.1%, which shows that in fied students. The reliability and validity this study; the ratio of women is greater. of pre-testing results were then analyzed, and items with a lower correlation coef- This study further used variance analysis ficient were deleted. The revised ques- to test the hypotheses, with results tionnaire consisted of 12 questions: 3 for shown in Table 1. Fit of the overall mod- electronic word-of-mouth (revised from el reaches a statistically significant level Babin et al., 2005), 4 for product (F value = 11.623, p<0.001). The level knowledge (revised from Cheng, 2010), of online word-of-mouth has a significant 2 for promotion (revised from Lu et al., influence on purchase intention (F value 2006), and the last three for purchase in- = 14.964, p<0.001), thus Hypothesis 1 is tentions (revised from Maxham, 2001). supported. T test analysis is further con- Cronbach’s α values were 0.889, 0.919, ducted to show that products with higher 0.877, and 0.810, respectively. All of online word-of-mouth can better affect them were greater than 0.7, which indi- consumer purchase intentions (4.32 vs cated high reliability. This study applied 3.71, p<0.001). The level of product average variance extracted (AVE) into knowledge has a significant influence on the analysis of the reliability and validity purchase intention (F value = 38.799, of the scale. If the AVE value of a latent p<0.001), thus Hypothesis 2 is supported. variable is high enough, it can better The t test is further conducted, finding measure the latent variables. Generally, that products with higher product know- the value must be higher than 0.7. In this ledge have greater purchase intention for study, the value of the latent variables medical cosmetics (4.50 vs. 3.53, meets the requirement. p<0.001). Different promotional methods do not produce a significant difference in Sample Design and Research Object purchase intention (F value = 1.404, p=0.238), thus Hypothesis 3 is not sup- This study collected samples by ported. Figure 2 shows that regardless of means of a questionnaire to find out the high or low product knowledge, consum- factors influencing consumers’ purchase ers prefer price promotions among pro- intentions. The respondents of this ques- motional methods. Figure 3 shows that tionnaire mainly consisted of consumers regardless of high or low online word-of- who had purchased medical aesthetic mouth, consumers prefer price promo- products on the Internet. Adopting the tions among promotional methods. convenience sampling method, this study distributed a total of 209 questionnaires, Discussion and Conclusion of which ten were ineffective. Conse- quently, the effective return rate was This study explored whether internet 95.2%. This study utilized SPSS18.0 and user word-of-mouth and consumer Amos17.0 to carry out the analysis. knowledge about medical cosmetics would affect consumer purchasing be- Results havior. In addition, this study incorpo- rated promotional methods in online Purposive sampling was used in this shopping. Empirical results showed that study. The subjects were students who the influence of online word-of-mouth have purchased medical cosmetics and the level of consumer knowledge online, and their age distribution was be- about medical cosmetics do have an in- tween 18 and 21 years. In terms of gen- fluence on the purchase intention of der distribution, among 199 valid sam-

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Electronic word-of-mouth High vs. Low H1

Product Knowledge H2 Purchase Intention High vs. Low

H3 Promotion price vs. coupons

Figure 1. Conceptual model

Table 1. Analysis of effect of electronic word-of-mouth, product knowledge and promotion methods on purchase intention

Variables Type III Sum df Mean F value P value of squares Square overall 85.073 7 12.153 11.623 0.000* intercept 2741.320 1 2741.320 2621.627 0.000* eWOM 15.647 1 15.647 14.964 0.000* product knowledge 40.571 1 40.571 38.799 0.000* promotion 1.468 1 1.468 1.404 0.238 eWOM * product knowledge 0.652 1 0.652 0.624 0.431 eWOM * promotion 0.198 0.198 0.189 0.664 product knowledge * promo- 0.260 1 0.260 0.248 0.619 tion eWOM * product knowledge * 0.274 1 0.274 0.263 0.609 promotion ＊P<0.05

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subjects. The research findings are dis- medical cosmetics, which is worthy of cussed as follows.1. further research.

The influence of online word-of-mouth on Practical suggestions purchase intention (H1) This study found that with medical 1. Research results showed that the cosmetic products as an example, prod- level of online word-of-mouth comments ucts with greater online word-of-mouth would affect consumer purchase inten- would produce greater positive purchase tion for medical cosmetics. Therefore, intention in consumers. Development of Hypothesis 1 of this study is established, modern technology has allowed the in- consistent with the view in Jalilvanda et ternet to condense information of the al. (2012). Since medical cosmetics are world at one’s fingertips. There are many between care products and medical prod- issues discussed online, and internet us- ucts, showing significant price differ- ers can use discussions to obtain product ences, many medical cosmetics have not information or evaluate product quality. established brand recognition. Hence, If businesses hope to maintain good consumers tend to only be able to gain brand images, they not only need to relevant information from trial usage, maintain the curative effects of products, making word-of-mouth marketing very but also need to have trial users who important. When consumers intend to convey positive messages on products. purchase medical cosmetics, if relevant Using inexpensive word-of-mouth mar- websites have brands that are recom- keting methods can bring significant mended by more people, consumers business opportunities. would increase their purchase intention. In addition, medical cosmetics 2. The influence of product knowledge is not fully popularized. Con- knowledge on purchase intention (H2) sumers use recommendations from ex- Since medical cosmetics involve medical perts in the past to choose products, but ingredients, consumers would spend this may not benefit their appearance. more time finding information on un- Thus, vendors should use various chan- known or unfamiliar products. When nels to elevate the product knowledge consumers use various means to enrich abilities of consumers, fully disclosing their product knowledge, they would in- the benefits and applicability of products crease their purchase intention, thus es- to consumers, so that they can choose tablishing Hypothesis 2, consistent with products based on which benefits they Raoand and Monroe (1988). desire. When consumers have comprehensive product knowledge, then they 3. The influence of promotional can buy suitable care products to reduce methods on purchase intention (H3) subsequent product disputes. Lin (2009) pointed out that using coupons would better strengthen consumer Although the result in this study did purchase intention than can not reveal how promotional methods af- price reductions, but results of this study fect the purchase intention of consumers, show that price reduction and added but consumers are inclined toward price products do not produce statistically sig- promotions. This may be because medi- nificant differences on consumer pur- cal cosmetics on the market are more ex- chase intention, thus Hypothesis 3 is not pensive than ordinary care products, so established. However, subjects of this when product prices are lower, consum- study prefer price reduction methods for ers would show greater preference.

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Research Limitations age groups. Thus, future studies can conduct stratified sampling and responses to In consideration of time and cost generalize the research results. In order limitations, this study used purposive to prevent other factors from interfering sampling with students as the main sam- with the research results, this study only ple for the questionnaire survey. There- manipulated two types of promotional fore, it could only represent the purchase methods. Future studies can further ex- intentions toward medical cosmetics in plore how different promotional methods young people, and could not be general- would affect purchase intention. ized to the purchase intention of other

References Common Wealth (2011). Retrieved from:http://www.cw.com.tw/articl Babin, J.B., Lee, Y.K., Kim, E.J., & e/article.action? Griffin, M. (2005).Modeling con- id=5012182&page=1. sumer satisfaction and word-of- mouth: Restaurant patronage in Dellarocas, C. (2003).The digitization Korea. The Journal of Services of word-of-mouth: promise and Marketing, 19(3), 133-139. challenges of online feedback mechanisms. Management Sci- Chandon, P., Wansink, B., & Laurent, ence, 49 (10), 1407–1424. G. (2000). A benefit congruency framework of sales promotion ef- Harrison-Walker, L. J. (2001).The fectiveness. Journal of Marketing, Measurement of Word-of-Mouth 64(4), 65-81. Communication and an Investiga- tion of Service Quality and Cus- Chen, S. S., Monroe, K. B., & Lou, Y. tomer Commitment as Potential C. (1998). The effects of framing Antecedents, Journal of Service price promotion messages on con- Research, 4(1),60-75. sumers’ perception and purchase intentions. Journal of Retailing, Huang, J. & Chen, Y. (2006). Herding 74 (3), 353-372. in online product choice. Psy- chology and Marketing, 23 (5), Chen, Y.F. (2010). The Influence of e- 413–428. WOM on Consumer Purchase In- tention with Prospect Theory. Jalilvanda, M. R., Samieib, N., Dinic, Journal of e-Business, 12(3), 527- B., & Manzaric, P. Y. (2012). Ex- 546. amining the structural relationships of electronic word of mouth, Cheng, C.Y. (2010). A Study of the Re- destination image, tourist attitude lationship between Customer Sat- toward destination and travel in- isfaction and Repurchase Inten- tention: An integrated approach. sion in Financial Services Indus- Journal of Destination Marketing try: Analyzing the Effect of Prod- & Management, 1(1–2), 134–143. uct Knowledge. Sun Yat-Sen Management Review, 18(2), 325- Kotler, P. (2003). Marketing Manage- 372. ment, 11th ed., Upper Saddle River, NJ: Prentice-Hall, Inc.

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Lin, Y. C., Lee, Y. C. & Chen, K. C. mouth, and purchase intentions. (2012). The influence of brand Journal of Business Research, image and product knowledge in 54(1), 11-24. the advertising effect–take place- ment marketing movie as an ex- Park, C.W., Mothersbaugh, D.L. & ample. Journal of Statistics & Feick, L. (1994). Consumer Management Systems, 15(4-5), Knowledge Assessment. Journal 581-600. of Consumer Research, 21, 71-82.

Lin, Y.C., Lee, Y.C., Lin, S.C.H., & R.D.E.C. (2012). Retrieved Lin, W.T. (2009). Discount Level, from:http://www.ad- Promotional Type, and Brand tech.com/singapore/presentations/ Awareness on Consumers’ Brand 2012_ppt/State_Of_Global_Local Evaluation and Purchase Inten- _Internet.pdf tion: An Empirical Study of Handsets. Soochow Journal of Raoand, A.R. & Monroe, K. B. (1988). Economics and Business, 67, 1- The Moderating Effect of Prior 46. Knowledge on Cue Utilization in Product Evaluations. Journal of Lu, R.Y., Yu, C.C., &Wang C.C. Consumer Research, 15, 253-264. (2006). Internet Sales Promotion Strategies, Users Characteristics Research, Development and Evaluation and Their Relationships with Commission, Executive Yuan. Sales promotion Effects-Travel Retrieved Website Case. Electronic Com- from:http://www.rdec.gov.tw/ct.a merce Studies, 4(3), 305 -326. sp?xItem=4024389&CtNode=120 62&mp=100 Marks, L.J. & Olson, L.C. (1981). To- ward a Cognitive Structure Con- TWNIC (2012). 2012 Taiwan Broad- ceptualization of Product Famili- band Usage Survey. Retrieved arity. Advances in Consumer Re- from: search, 8, 145-150. http://www.twnic.net.tw/downloa d/200307/ 20120709c.pdf Maxham III, J. G. (2001). Service re- covery’s influence on consumer satisfaction, positive word-of-

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Estimated Marginal Means of Purchase Intention

product knowledge 4.60 Low High 4.40 s n4.20 ea M l al in4.00 g ar M d3.80 te at im st 3.60 E

3.40

3.20

price gift promotion

Figure 2. Estimated marginal means of product knowledge and promotion on purchase intention

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Estimated Marginal Means of intention

eWOM Low High 4.40

s an ea 4.20 M al in rg a M4.00 ed at im st E 3.80

3.60

price gift promotion

Figure 3. Estimated marginal means of eWOM and promotion on purchase intention http://www.turnitin.com/viewInternet.asp?r=64.4950313880475&svr=3&oid=702118525& key=9dacb51a9bb74ca474f9c1b9e8efaffe

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THE RELATIONSHIP AMONG BRAND EQUITY, CUSTOMER SATISFACTION, AND BRAND RESONANCE TO REPURCHASE INTENTION OF CULTURAL AND CREATIVE INDUSTRIES IN TAIWAN

Chun-Chen Huang Dept. of International Business, Asia University, Taiwan R.O.C. Department of Health Risk Management, China Medical University, Taiwan R.O.C.

Szu-Wei Yen Dept. of Marketing and Distribution Management, WuFeng University, Taiwan R.O.C.

Cheng-Yi Liu * Dept. of Information Management, TransWorld University, Taiwan R.O.C. *(Corresponding Author) [email protected]

Te-Pei Chang Dept. of International Business, Asia University, Taiwan R.O.C.

Abstract

This study used a successful example of cultural and creative industry, Pili Puppet Show, to explore the effect of brand equity, customer satisfaction, and brand resonance on repurchase intention. The results of this study are as follows: 1) the two dimensions of brand equity and customer satisfaction can both enhance consumer brand resonance for the product, and the effect of customer satisfaction on brand resonance is greater than that of brand equity; 2) the three dimensions of brand equity, customer satisfaction, and brand resonance all directly affect consumer repurchase intention; 3) brand resonance has a partial mediating effect in the influence of brand equity on repurchase intention, and brand resonance has a complete mediating effect on the influence of customer satisfaction on repurchase intention. The findings can serve as references to future studies and the marketing strategies of cultural and creative industry in Taiwan.

Keywords: Brand equity, customer satisfaction, brand resonance, repurchase intention, Pili Puppet Show

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Introduction 2. Explore the effect of brand equity, customer satisfaction, and brand reso- Many studies have discussed con- nance on repurchase intention. sumers’ brand resonance elicited by famous brands, but few have explored 3. Explore whether brand resonance me- brands in cultural and creative industries diates the effect of brand equity and in terms of the influence of brand reso- customer satisfaction on repurchase nance. Thus, this study uses a local indus- intention. try, Pili Puppet Show, as the research subject, Pili Puppet Show Troupe was popular all over Taiwan in the 1980s, where Literature Review there were Pili clubs in schools, many people renting videos from rental stores, Brand equity related merchandise became popular symbols of passions among adolescents, Tauber (1988) suggested that brand and even political elections used charac- equity is the added value of a corporate ters for insinuations. During this period, brand’s market position that exceeds the even though “Xiao Xi Yuan,” “I Wan physical assets. Farquhar (1990) also pro- Jan” and other puppet troupes also received attention, Pili Puppet Show Troupe posed similar views, believing that brand is the only one that continues to have a equity is the added value produced by the large fan base. Keller (1993) emphasized brand names or symbols for the physical that research on the effect of brand reso- products. Aaker (1991) indicated that nance must choose “famous” brands, be- brand equity is a combination of assets and cause after consumers identify with the liabilities of brand, brand name, and sym- brand, they will further develop resonance bols, which may increase or decrease the for the product. Thus, in terms of the specific environment, among the puppet product or service’s value for corporations show industries in Taiwan, the “Pili” or consumers, or change assets and liabili- brand are certainly the most well known, ties. Kim et al. (2009) argued that brand thus this study uses it as the research sub- equity refers to brands can inspire a special ject. combination of thinking, feeling, perceiv- ing, and associating of people paying at- The main purpose of this study is to tention, in turn affecting purchase ability. use the local specialty industry, Pili Pup- Lassar et al. (1995) proposed that brand pet Show, in attempt to understand the effect of brand equity and customer satis- equity comes from consumers’ overall faction of Pili Puppet Show fans on brand value association and perceptions toward a resonance, exploring the effect of brand brand, believing that brand equity is not equity, customer satisfaction, and brand absolute, but comes from comparing with resonance theory on repurchase intention, competitors. Tauber (1988) indicated that to serve as a reference for future indus- brand equity is the market position con- tries in establishing marketing strategies. structed by the brand; establishment of Thus, the purposes of this study are as brand equity will bring added value of follows: products that exceed the physical asset 1. Explore the effect of brand equity and value. Keller (2001) pointed out that brand customer satisfaction on brand reso- equity not only affects consumer purchase nance. decisions, but is also an important source for corporations to obtain competitive ad- The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 107

vantages and profits, developing a con- vices and expected services determine cus- sumer-based brand equity model (CBBE), tomer satisfaction. which believed that brand equity includes brand significance, brand performance, Brand resonance brand image, brand determination, brand sense and brand resonance. In the customer-based brand equity (CBBE) model proposed by Keller (1993), Customer satisfaction the brand resonance was officially proposed. Later, Keller (2001) defined brand Cardozo (1965) was the first scholar resonance as the relationship between con- to propose the concept of customer satis- sumers and brands, or the extent to which faction, believing that customer satisfac- consumers sense the brands, and there are tion would elevate customer repurchase differences in the “potency” consumers’ behavior, and they would purchase other emotional resonance with brands, which products. Howard and Sheth (1969) then can be divided into four levels, which are defined customer satisfaction as whether attachment, behavioral loyalty, sense of they can reach a satisfied psychological community, and active engagement. Keller state after comparing what they paid for (1993) indicated that in order to resonate the product and what they gained. Oliver with a certain brand, consumers need to (1981) suggested that customer satisfac- not only frequently use products of the tion is determined by the extent to which brand, but also need to actively be con- customers expect product benefits will be cerned about information relating to the realized, or the consistency between ex- brand, forming a strong psychological at- pected and actual results. Dovidow and tachment to the brand. Chang (2011) fur- Uttal (1989) also mentioned the gap be- ther explained brand resonance, believing tween expected treatment and perceived that consumer loyalty caused by brand treatment from customers. Kotler (1991) resonance can be expressed in two ways, argued that customer satisfaction is a post- which are behavioral loyalty and emotion- sale evaluation of product quality com- al loyalty. It was believed that emotional pared to expectation before purchase. loyalty necessitated the existence of be- Tzeng (2009) proposed that customer sat- havioral loyalty, but the vice versa may isfaction is the gap between expected ser- not be true. vice standards and actually sensed service standards, and the emotional response pro- Repurchase intention duced based on this gap. The above research literature shows that, customer sat- According to Cronin and Morris isfaction is related to customer expecta- (1989) and Cronin and Taylor (1992), re- tion; customer expectations include a purpose intention refers to psychological company’s tangible service commitments, commitment toward the product or service intangible service commitment, buzz, and that arises after using them, resulting in the past purchase experience and these form idea for consumption again. Jones and the basis to form customer expectation Sasser (1995) discovered that repurchase standards. Parasuraman et al. (1993) men- intention is very important for the profit tioned that the gap between sensed ser- and evaluation of stores. Seiders et al.

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(2005) indicated repurchase intention re- Research Methods fers to the extent to which consumers are willing to buy the product or service again, Research structure and is a simple, objective, and observable expected purchase behavior. Collier and This study explored the correlations Bienstock (2006) also pointed out that re- among variables of brand equity, customer purchase intention is not only the possible satisfaction, brand resonance, and repur- inclination of buying products, but may chase intention, in turn developing the fol- also include the intention to recommend it lowing research framework (Figure 1). to relatives and friends.

H4 Brand equity

H1 Brand res- Repurchase H2 H6 onance intention H3

Customer satisfaction H5

Figure 1. Research Framework

Research hypotheses name. In order to form customer perceptions and concepts, other than buzz by Among the six dimensions of the other people’s promotions, the feelings of brand equity pyramid model proposed by usage experiences are necessary, so cus- Keller (2001), brand resonance is at the tomer views toward this brand would af- top of this pyramid, which means that fect the perception of brand equity, the when consumers identify with the brand, formation of this view, especially the sub- brand equity takes effect, resulting in jective image, has a close relationship brand resonance. with customer satisfaction.

Lassar et al. (1995) suggested that Aaker (1991) argued that perceptive brand equity makes customers increase sources for brands come from objective perspective utility and benefits in their elements that arise from the stimulus, as minds toward the brand, and the study well as personal subjective psychological also mentioned that the three main ele- elements. Relative to brand equity that ments that affect the internal value as- forms from the different choices in brand, sessment of customers not only include satisfaction is more inclined toward the the non-specific cognition, value associa- subjective identity of customers, and the tion of brand, and the position of the effect of consumers’ personal expecta-

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tions comprises the consumer feeling di- causing consumers to have more accom- mension in brand resonance. modation for the brand. Huang (2006) suggested that brand resonance would es- Keller (1993) proposed that the ef- tablish psychological attachment, in turn fect of brand equity is that it can help protecting behavioral loyalty, which af- consumers gain the effect of premium fects purchase intention. Based on the re- prices, or that consumers usually have search purpose, research framework, and greater product evaluation for brand relevant literature review, this study pro- products with high name recognition. poses the following research hypotheses. Neal (1999) indicated that when decision- makers decide on purchase behavior, they H1: Brand equity has a significant posi- generally consider maximization of brand tive effect on brand resonance. traits and benefits that they can perceive. Thus, in terms of customer purchase in- H2: Brand equity has a significant posi- tentions, brand value has a positive effect, tive effect on customer satisfaction. and there would be greater purchase intention for products or services with better H3: Customer satisfaction has a signifi- brand equity. cant positive effect on brand resonance. Oliver (1997) proposed that satisfactory shopping experiences can affect fu- H4: Brand equity has a significant posi- ture purchase intention and attitudes, tive effect on repurchase intention. while unsatisfactory purchase experiences would reduce the repurchase intention for H5: Customer satisfaction has a signifi- customers. Neal (1999) suggested that cant positive effect on repurchase when decision-makers decide on purchase intention. behavior, their internal brand preferences would be a reference for purchase. Kotler H6: Brand resonance has a significant (2010) emphasized that customer satisfac- positive effect on repurchase intention would prompt customer willingness tion. to repurchase, even overlooking advertisements of competing brands and not H7: Brand resonance has a mediating purchase products from other companies; effect in the relationship between this demonstrates the relationship between brand equity and repurchase inten- customer satisfaction and repurchase in- tion. tention. H8: Brand resonance has a mediating Keller’s (1993) focus in brand reso- effect in the relationship between nance is that the customers devote deep customer satisfaction and repur- feeling to the brand, even seeing it as a chase intention. life partner. Thus, when consumers purchase the brand, it expresses personal Sampling consciousness or style, and the creation of brand must be connected to the self- This study used snowball sampling, imaged of consumers. Chang (2008) fur- through the recommendations of homoge- ther explained that the effects of brand neous consumption groups for question- resonance are: more easily move consum- naire surveys. Related consumption ers, high loyalty toward a brand, increase groups include the members of puppet the number of supporters, easier devel- theatre clubs in schools, members provid- opment of surrounding products, and ed by the Pili Company, known aficiona- The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 110

dos of puppet theatre, and visitors to modification there were 22 questions. The Huwei Puppet Museum as subjects of data questionnaire on customer satisfaction in collection. For the four types of data col- referred to Anderson et al. (1994) with 12 lection subjects, members of puppet thea- questions, brand resonance in the study tre clubs in schools and members provided by the Pili Company used mailed ques- referred to Huang (2006), with 12 questionnaire release and retrieval. This study tions. In addition, repurchase intention re- released 420 questionnaires, 306 ques- ferred to Tsai and Huang (2007) with 8 tionnaires were retrieved, after discarding questions. All the questions in this study 32 invalid questionnaires, there were a use the Likert 5-point scale for scoring. total of 274 valid questionnaires. Cronbach's α reliability analysis was used to delete questions with poor reliability, The male-female ratio of samples in the reliability values of the scales ranged this questionnaire is 186:88, approximately 0.926-0.958, which means that the ques- 2:1. In terms of age distribution, most are tionnaires in this study have good reliabil- adolescents under 19 years old (30.7%), ity. followed by the 25-29 age group (19.3%), which add up to 50%. If the 20-24 age Data Analysis group is also added (9.1%), it comprises of 59.1% of the age groups, which means the Liability questionnaire can express the views and inclinations of the younger generation. The factor analysis results show that Due to snowball sampling being started in in this study the dimensions’ KMO values Yunlin, Jiayi, and Tainan, most of the are all greater than 0.8, and the Bartlett test samples were accumulated in these areas, of sphericity results are all smaller than and 54.7% of the residences were in these 0.05, showing significant results. From areas. In terms of the relationship between Table 1, brand equity which after factor subjects and Pili Company, among the analysis derives the two principal factors survey samples, the ratio of members to of “name association” and “perceived non-members was 39: 61, approximately quality,” which can explain 64.54% of this 1: 1.6. In terms of the consumption situa- dimension, and the reliability tests for the tion of the surveyed sample, most test sub- Cronbach’s α of this two factors are all jects have not actually purchased (32.5%), above 0.8. Hair et al. (2010) indicated that and most of those who do spend only a satisfactory value of Cronbach’s α is re- spend less than 600 NTD (67.9%). This quired to be more than 0.70 for the scale to study primarily presents the younger gen- be reliable. Table 2 explains that in the eration under 29 years of age, who are customer satisfaction dimension, the prin- mostly geographically congregated in cipal factors are “customer feelings” and Yunlin, Jiayi, and Tainan, where Pili “expected performance,” which can ex- Company is located; most of the opinions plain 72.25% of this dimension, and the expressed were from males. Cronbach’s α of the two factors are all above 0.8. Table 3 explains that in the Measurement of the Constructs “brand resonance” dimension, the princi-

pal factors are “active pursuit” and “be- The questionnaire on brand equity in havioral attachment,” which can explain the study referred to Aaker (1991), after The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 111

Table 1. Brand Equity Factor Analysis

Accumulated Factor Cronbach’s Dimension Factor Item Mean explained var- loading α iance (%) I know that Pili has 3.785 0.840 many “fans.” Pili products are the mainstream in its in- 3.661 0.775 dustry. I believe that Pili products have consid- 3.595 0.727 erable quality. Name asso- When discussing pup- ciation pet theatre, I often hear 4.172 0.718 33.90 0.871

the brand Pili.

Brand equi- I can associate with ty Pili product character- 3.361 0.710 istics. I believe that if I purchase defective items, it would affect my con- 3.354 0.687 fidence in Pili products. Using Pili products can 3.011 0.832 reflect personal taste. Using Pili products is a 2.511 0.775 symbol of social status. I would specifically go Perceived to specialized stores or 2.858 0.736 quality counters to purchase. 64.54 0.854

I would regularly take note of new Pili prod- 2.902 0.729 ucts. Using Pili products means the pursuit of 3.029 0.721 trends.

Table 2. Customer Satisfaction Factor Analysis

Accumulated Factor Cronbach’s Dimension Factor Item Mean explained var- loading α iance (%) The experience of using Pili products is 3.427 0.844 pleasurable. The decision to choose 3.412 0.839 Pili products is right. Customer Customer I think that Pili prod- satisfaction feelings ucts conform to my 3.339 0.802 40.81 0.921 expectations. I would be happy about buying (renting) 3.339 0.792 Pili products. I believe that the price of Pili products makes 3.329 0.783 them worth it. The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 112

I like the puppet manipulation techniques 3.679 0.864 and filming techniques of Pili. I think that Pili puppet Expected show performances are 3.850 0.841 performance professional. 72.25 0.836 I think that Pili products are sufficiently 3.285 0.666 supplied. I think it is convenient to rent from Pili prod- 3.201 0.653 uct stores.

Table 3. Brand Resonance Factor Analysis

Accumulated Factor Cronbach’s Dimension Factor Item Mean explained var- loading α iance (%) I would actively search for information on Pili 2.967 0.856 products. I would join communities formed by fellow 2.971 0.837 aficionados. I would do as much as Active pur- I can to purchase Pili 2.799 0.828 suit 42.23 0.883 products.

Brand reso- I am willing to devote nance more time and money 2.675 0.822 to Pili products. I actively share information about Pili 2.993 0.674 products with other people. When talking about puppetry theatre, I 3.788 0.909 immediately think of Pili productions. Behavioral The brand Pili has a attachment 3.701 0.889 73.17 0.869 positive image for me.

I am overall satisfied 3.482 0.804 with Pili.

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Table 4. Repurchase Intention Factor Analysis

Accumulated Factor Cronbach’s Dimension Factor Item Mean explained var- loading α iance (%)

I intent to purchase (rent) Pili products on a 2.759 0.902 regular basis.

Repurchase Whenever there are Revisit intention new Pili products, I intention 2.726 0.845 46.89 0.892 would purchase (rent)

them.

I intend to purchase (rent) Pili products in 2.971 0.778 the near future.

I would help others to purchase (rent) Pili 3.153 0.890 Additional products. purchase 85.24 0.873 intention I would join group purchases (rent) of Pili 2.945 0.876 products.

73.17% of this dimension, and the fect on brand resonance ( β=0.863, p < Cronbach’s α of the two factors are all 0.001), thus hypotheses H1 and H3 are es- above 0.8. Table 4. explains that in the tablished. Next, the second regression “repurchase intention” dimension, the analysis shows, brand equity has a signifi- principal factors are “revisit intention” and cant positive effect on customer satisfac- “additional purchase intention,” which can tion ( β=0.887, p < 0.001), thus hypotheses explain 85.24% of this dimension, and the H2 is established. In addition, regression Cronbach’s α of the two factors are all four and five show, the two dimensions above 0.8. brand equity ( β=0.731, p < 0.001) and customer satisfaction ( β=0.733, p < 0.001) both Regression Analysis have significant positive effects on repurchase intention, thus hypotheses H4 and Regression analysis results in Table 5 H5 are supported. Finally, regression six show that brand equity has a significant shows brand resonance ( β=0.731, p < 0.001) positive effect on brand resonance ( β= has a significant positive effect on repur- 0.863, p < 0.001). In addition, customer sat- chase intention, thus hypothesis H6 is es- isfaction also has a significant positive ef- tablished.

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Table 5. Regression Analysis Results

Standard Adjusted Regression F β R2 Hypothesis

Regression 1 0.863*** 0.744 795.789 H1 Brand equity →Brand resonance

Regression 2 0.847*** 0.716 687.688 H2 Brand equity →Consumer satisfaction

Regression 3 0.887*** 0.786 1005.448 H3 Consumer satisfaction →Brand resonance

Regression 4 0.731*** 0.533 312.102 H4 Brand equity →Repurchase intention

Regression 5 0.733*** 0.535 315.316 H5 Consumer satisfaction →Repurchase intention

Regression 6 0.789*** 0.621 449.016 H6 Brand resonance →Repurchase intention *p<0.05, **p<0.01, ***p<0.001

Analysis of Mediating Effects the influence is insignificant and the coefficient is close to 0, there is full media- In order to confirm the mediating ef- tion. fect of brand resonance between brand equity and repurchase intention, this study As Table 6 shows, there is a signifi- uses the mediating effect confirmation cant positive relationship between brand model by Baron and Kenny (1986) to test equity and repurchase intention ( β=0.731, whether brand resonance is the mediating p < 0.001), brand equity can explain re- variable between brand equity and repur- purchase intention 53.4% of variance. chase intention. The following four condi- Second, there is a significant positive re- tions must be met: 1. brand equity must lationship between brand equity and be significantly correlated with repur- brand resonance ( β=0.863, p < 0.001), chase intention; 2. brand equity must be brand equity can explain brand resonance significantly correlated with brand reso- 74.5% of variance. Third, when brand eq- nance; 3. When brand equity and brand uity and brand resonance are both predic- resonance are both predictive variables, tive variables, there is a significant rela- and regression analysis is conducted for tionship between brand resonance and repurchase intention, brand resonance repurchase intention ( β=0.621, p < 0.001), must be significantly correlated with re- the two predictive variables can explain purchase intention; 4. In the mediating repurchase intention 79.5% of variance. variable model, the regression coefficient Fourth, after adding the mediating varia- of brand equity must be smaller than the ble (brand resonance), the relationship regression coefficient of the independent between brand equity and repurchase in- variable model. In addition, if the rela- tention is weakened, the β value of brand tionship between the independent variable equity is decreased from 0.731 to 0.195, and dependent variable would be weak- but the explanatory ability increases from ened due to the existence of mediating 0.534 to 0.795, and part of the effect is variable, it is a partial mediation; and if replaced by that of brand resonance. Thus, The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 115

it conforms to the four standards for me- brand equity can indeed produce a full diating variable testing, proving that mediating effect

Table 6. The Mediating Effect of Brand Resonance between Brand Equity and Repurchase Intention

Repurchase Intention Dependent Variable Brand Resonance Regression Mediating Effect Brand Equity 0.863*** 0.731*** 0.195** Brand Resonance 0.621*** F 795.789 312.102 233.171 R2 0.745 0.534 0.795 Adjusted R2 0.744 0.533 0.630 *P ＜0.05 ；**P ＜0.01 ；***P ＜0.001 through brand resonance, to form a rela- tention ( β=0.653, p < 0.001), the two pre- tionship with repurchase intention. dictive variables can explain repurchase intention 62.8% of variance. Fourth, in the As Table 7 shows, first, there is a sig- mediating variable model, after adding the nificant positive relationship between cus- mediating variable (brand resonance), the tomer satisfaction and repurchase intention relationship between customer satisfaction (β=0.733, p < 0.001), customer satisfaction and repurchase intention is weakened, the can explain repurchase intention 53.7% of β value of brand equity is lowered from variance. Second, there is a significant 0.733 to 0.153, but the explanatory ability positive relationship between customer increases from 0.537 to 0.628, and part of satisfaction and brand resonance ( β=0.887, the effect is replaced by that of brand res- p < 0.001), customer satisfaction can ex- onance. Thus, it conforms to the four plain brand resonance 78.7% of variance. standards for mediating variable testing, Third, when brand equity and brand reso- proving that customer satisfaction can in- nance are both predictive variables, there deed produce a full mediating effect is a significant positive relationship be- through brand resonance, to form a rela- tween brand resonance and repurchase in- tionship with repurchase intention.

Table 7. The Mediating Effect of Brand Resonance between Consumer Satisfaction and Repurchase Intention

Repurchase Intention Dependent Variable Brand Resonance Regression Mediating Effect Consumer Satisfaction 0.887*** 0.733*** 0.153 Brand Resonance 0.653*** F 1005.448 315.316 228.501 R2 0.787 0.537 0.628 Adjusted R2 0.786 0.535 0.625 *P ＜0.05 ；**P ＜0.01 ；***P ＜0.001

Conclusion and Suggestions tomer satisfaction can both elevate the extent of consumer brand resonance, and Results of this study prove that the the effect of customer satisfaction on two dimensions of brand equity and cus brand resonance is greater than that of The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 116

brand equity. Thus, the establishment of resonance. In addition, brand resonance is the Pili Puppet Show brand, and estab- the mediating variable between customer lishment of the “Pili Club” for fan mem- satisfaction and repurchase intention, with bers caused many fans of the “Pili Club” a full mediating effect, or that customer believe that pursuing such products can satisfaction would affect repurchase inten- represent personal taste and trendiness, tion through brand resonance. This shows, which greatly elevates brand equity for for brand equity and customer satisfaction show fans. In addition, the professional- to have a positive effect on repurchase ism, manipulation techniques, and filming intention, brand resonance plays a very methods in Pili Puppet Show performanc- important mediating role. According to es have developed many Pili products to Keller’s (2001) assessment of brand reso- elevate the customer satisfaction of fans; nance, the source of brand resonance is these are important factors. Furthermore, the consumers’ internal emotional at- this study finds that when brand equity is tachment to the brand and external in- better, customers would have greater sat- volvement of activities relating to the isfaction for the brand, which means that brand. Thus, an important issue is how to brand equity is an important antecedent increase consumer brand resonance for variable that affects customer satisfaction. the brand, in turn causing consumers to This is similar to the studies by Aaker form deep connections to the brand psy- (1991) and Schreuer (2000), proving that chologically. Thus, it is important to let there is a significant positive relationship Pili Puppet Show fans actively participate between brand equity and customer satis- in relevant communities or share infor- faction. mation on Pili products to others, and if they form attachment and brand reso- The other important conclusion of nance for the brand, Pili Puppet Show this study is that the three dimensions of fans would purchase (or rent) Pili prod- brand equity, customer satisfaction, and ucts. brand resonance would directly affect customer repurchase intention; this result The sample of this study is set to the is consistent with that by Parasuraman et Pili Puppet Show fans, thus it is not possi- al. (1993), Jones and Sasser (1995), Aaker ble to be conducted through random sam- (1991) and Schreuer (2000). However, pling. Also, because Yunlin is the origin of this study finds that brand resonance is the mediating variable of brand equity and puppet theatre, most subjects live in Yun- repurchase intention, with partial mediat- lin, thus limiting the ability of results of ing effects, or that brand equity would this study to be generalized. affect repurchase intention through brand

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A FRAMEWORK FOR A TECHNOLOGY-ORGANIZATION-ENVIRONMENT IMPLEMENTATION MODEL IN TAIWAN’S TRADITIONAL RETAIL SUPERMARKETS

Hsin-Pin Fu Department of Marketing and Distribution Management National Kaohsiung First University of Science and Technology [email protected]

Hsiang-Ting Su* College of Management National Kaohsiung First University of Science and Technology *Corresponding Author: [email protected]

Abstract

This paper draws upon a technology-organization-environment (TOE) framework and recent conceptualizations of information technology adoption methods to apply a systematic strategy for services innovation in Taiwan's traditional retail supermarkets. Traditional supermarkets are chain stores. In Taiwan, they are facing a negative situation: sluggish shopping, the decline of consumers’ purchasing power, heavy competition, insufficient enterprise e- commerce, and non-system procurement problems. In addition, the case of a traditional supermarket that introduced information technology is presented herein. Affected by the chal- lenging economic environment, the supermarket decided to seek help from the government, and cooperated with its suppliers to enhance its competitiveness. This paper presents an in- depth discussion of the strategies, models and important factors used to upgrade its efficiency and business performance. This study represents a valuable reference for other enterprises that wish to introduce information systems in their companies.

Keywords : technology-organization-environment, strategy, information technology, business performance The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 121

Introduction However, for the retail supermarket, due to environmental competitive factors, Retail is defined as general merchan- the original general merchandise retail dise retailing sales, in the form of a non- formats have become increasingly blurred specific monopoly variety series such as with the conflicting trends, diversity in the supermarkets, department stores, etc. service, price transparency, emphasis on Overall the total amount of turnover, de- fast, convenient times and formats all spite a slight growth, is slowing down. working in the information technology Domestic demand for retail market ser- (IT) and using more services and integra- vices is vulnerable to the impact of chang- tion. In addition to strengthen internal es in Taiwan’s economy, the global eco- management mechanisms and processes, nomic recession with its serious impact on to identify positive innovation in the busi- exports. As a result of these factors, business model and integrate goods and ser- ness investment has also been substantially vices of the actual situation gaps. reduced, seriously impacting the job market; the relatively narrow private consump- Literature Review tion capacity of the integrated retail commodities has caused a considerable shock. Tornatzky and Fleischer are credited with being the first to develop the TOE The current socio-economic era is framework to study the adoption of tech- based on the invisible, dynamic intellectu- nological innovations. The Technology- al capital performance point of view, i.e. Organization-Environment (TOE) frame- the value-added aspect of the economy; work is described the entire process of in- the emphasis is on enhancing knowledge novation - stretching from the develop- management (KM) and technology inte- ment of innovations by engineers and en- gration. Due to rapid consumer demand trepreneurs to the adoption and implemen- changes and IT development, different in- tation of those innovations by users within dustry types and formats, and different the context of a firm. The TOE framework business models, such as convenience represents one segment of this process – stores, 24-hour mode of operation and how the firm context influences the adop- commercial demands for social and night tion and implementation of innovations. life, discount stores and supermarkets require marketing channels to shorten the The TOE framework is an organiza- process of improvement. The purpose is to tion – level theory that explains that three lower cost, and enhance production and different elements of a firm’s context in- marketing efficiency. fluence adoption decisions. These three elements are the technological context, the organizational context, and the environ- The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 122

ment context. All three are posited to in- To summarize the TOE framework, fluence technological innovation: (1) the these three contextual factors were postu- technological context - both the internal lated to affect organizational decisions re- and external technologies relevant to the garding technological innovation (Tor- firm; (2) the organizational context - de- natzky and Fleischer, 1990). Innovation scriptive measures regarding the organiza- services of information technology ex- tion, such as firm size and scope, manage- changes to strengthen the cause between rial structure and internal resources; and firm's contact and information sharing (3) the environmental context – the arena through e-commerce platform to build val- in which a firm conducts its business: its ue-added services and IT applications, sta- industry, competitors and dealings with tistical analysis, and query functions, government. change previous dealings with suppliers mode, using IT and internet, upgrade the The TOE framework has been exam- original way to the online automated que- ined by a number of empirical studies in ries and click to enhance the business per- various information systems (IS) domains, formance and efficiency of a traditional such as electronic-business in the Financial supermarket. Therefore, this paper adopts Services Industry (Zhu et al., 2004), inter- the TOE framework. net / e-business technologies adoption by SMEs (Zhu et al., 2003; Ifinedo, 2011), e- Methodology commerce adoption (Hong and Zhu, 2006; Tan et al., 2007), adoption of enterprise Model Development resource planning (ERP) (Pan and Jang, 2008; Zhu et al., 2010), e-procurement Reviewing the relevant literature, the (Teoa et al., 2009), green information conceptual model for information technol- technology (Bose and Luo, 2011). Alt- ogy in a traditional retail supermarket hough specific factors identified within the based on the TOE framework in Figure 1. three contexts may vary across different studies, the TOE framework has consistent The traditional retail supermarket dis- empirical support. Drawing upon the em- cussed in this paper have established a pirical evidence combined with the litera- special zone where fresh, daily transported ture review, this paper believes that the vegetables from local farmers are sold, in TOE framework is an appropriate theoreti- order to a create market segmentation. cal foundation for studying information This strategy has succeeded in attracting technology in the retail supermarket adop- consumers concerned with tion.

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Organizational Context

Information Organizational Context Performance Technology

Environmental Context

As-Is Model Analysis

Figure 1. A Conceptual Model freshness and health. With the develop- IT policy: The operating center has cur- ment of northeast and eastern Taiwan for rently established a system of accounting, tourism, the purchasing needs of tourists with a POS system working independently have arisen in recent years. The four su- by each branch, waiting to be integrated permarket branches investigated in this into the headquarters’ system. paper provide excellent environments for the tourists, as well as locals, to buy any- The traditional retail supermarket’s cur- thing they need. The current operating rent operating conditions are in Figure 2 conditions are as follows: and Figure 3.

Organizational policy: An operating center Presently, the communication and with four supermarkets. documents delivery between the operating center depends on emails and logistics ve- Inventory policy: The inventory is inde- hicles (Figure 4). The communication with pendently managed by the branch. The suppliers relies on fax, emails, and phone purchasing needs are reported to the oper- calls. Such means of communication re- ating center for general control; the com- quire key-ins and data filing, which is modity transfers among the branches are time-consuming and error-prone. Faced conducted in the form of transactions. with the fierce competition of large-scale chain supermarkets, traditional supermar- Price policy: Price is decided by each kets should further create market segmen- branch according to its area’s competition. tation and stress their differences from chain supermarkets in order to improve Financial policy: Headquarters is in charge operating performance and development. of financial management, while tax-related affairs and accounting are the responsibility of each branch.

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Suppliers 243 suppliers

Operation E-mail Center Fax Tel

4 stores POS system to 4 stores

Figure 2. The current operating model of the traditional retail supermarket

Retail E- Key- E- Sup- Stores to Mail in to POS Mail pliers Ship Operation

Order to POS to or to ship Goods Center List / Opera- by Order Fax to goods List to key -in to

Figure 3. The procurement process of the traditional retail supermarket

Operations Center

Demand s Order

Out of storage

To ship goods

Figure 4. The current situation of the information flow

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To-Be model analysis labor, and improve the effectiveness of headquarter decision making. Meanwhile, A firm’s existing technologies are through the spontaneity of inventory con- important in the adoption process because trol and information provided by the inte- they set a broad limit on the scope and grative system, the cycling rate of com- pace of technological change that a firm modities and effectiveness are expected to can undertake (Collins et al. 1988). El- increase, which will lower costs. In the linger (2000) examined the relationships aspect of innovation and development, among the organizational evaluation and service quality should be improved, and rewards systems, cross-functional collabo- virtual sales channels should be expanded, ration, effective marketing / logistics in- and cross- industry alliance can be formed terdepartmental integration, and distribu- to broaden the customer sources from oth- tion service performance. Sanders (2007) er cities. also proposed and tested the relationship between organizational use of e-business Conclusions technologies, organizational collaboration, and performance, using empirical data. Today, most large retailers have mor- Whipple et al. (2010) examined collabora- phed into multichannel firms, where the tive and transactional relationships in buy- same customer visits the retailer via differing firms, and showed collaborative rela- ent channels for different purposes (e.g., tionships offer greater benefits than trans- obtains information online, makes pur- actional ones, while relational factors drive chases offline, and contacts customer sup- satisfaction and performance for both col- port via telephone). Most have also ex- laborative and transactional relationships. panded their focus from selling products to Therefore, based on the above analysis of engaging and empowering customers, with the literature review, t he traditional retail the ultimate goal of creating a rewarding supermarket competitive strategy and customer experience. breakthrough method showed in Figure 5.

This study suggests that the traditional Innovations in business models are in- supermarket should develop approaches to creasingly critical for building sustainable gain competitive advantages. In the area of advantage in a marketplace defined by un- IT integration, integration of the internal relenting change, escalating customer ex- information of directly subordinate pectations, and intense competition branches and a communication platform (Sorescu et al. 2011). This paper applies with suppliers should be improved in order the traditional retail supermarket is innova- to increase the efficiency of resource inte- tion development of internal and external gration, reduce cost of communication and technology. The successful implementa- The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 126

tion of traditional retail supermarket’s in- model to managerial structure of centrali- formation technology system depended on zation. The quality of customer service is involving the suppliers as partners and in addition to the original physical channel proceeding step by step to reach the goal by increasing virtual, cross-industry coop- of transformation. The traditional retail eration mode and other counties to expand supermarket procedure of implementation customer base. was a framework for technology- organization- environment conceptual

1. Market competition Consumers 1. Differentiated products and 2. Price competition in the 1. Enhance customer service market same industry 2. Strengthen customer service - 2. Member mechanism Suppliers 1. Shorten delivery schedule 3. E-business for less 1. Strengthen the supply process 2. Joint promotion platform than 2. Joint promotion of the devel- 4. Difficult to control pro- opment opportunities curement costs 1. Strengthen integrated infor- 5. Inventory management Internal operations mation management system is not easy 1. The use of ICT to enhance 2. To strengthen membership 6. The development of management efficiency management system new customers is not easy

Figure 5. The supermarket competitive strategy and breakthrough method

The actual purpose of the traditional experience and expertise. The model used retail supermarket in choosing to seek for the implementation procedure of su- government support was to compensate for permarket in this case should provide a the enterprise’s inadequate experience and useful reference for other traditional retail understanding in strategies and models by that want to introduce information systems learning from the government committee’s to their companies.

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References Pan, M. J. & Jang, W. Y. (2008). Determi- nants of the Adoption of Enterprise Bose, R. & Luo, X. (2011). Integrative Resource Planning within the Tech- framework for assessing firms’ nology-Organization-Environment potential to undertake Green IT ini- Framework: Taiwan’s Communica- tiatives via virtualization-A theoreti- tions, Journal of Computer Infor- cal perspective, The Journal of Stra- mation Systems , 48(3), 94-102. tegic Information Systems , 20(1), 38-54. Sanders, N.R. (2007). An empirical study of the impact of e-business technol- Collins, P. D., Hage, J., & Hull, F.M. ogies on organizational collabora- (1988). Organizational and techno- tion and performance, Journal of logical predictors of change in au- Operations Management , 25(6), tomaticity, Academy of Management 1332-1347. Journal, 31(3), 512–543. Sorescu, Alina, Frambach, Ruud T., Singh, Ellinger, A.E. (2000). Improving market- Jagdip, Rangaswamy, Arvind, & ing/logistics cross-functional collab- Bridges, Cheryl (2011). Innovations oration in the supply chain, Indus- in Retail Business Models, Journal trial Marketing Management , 29(1), of Retailing , 87S, S3-S16. 85-96. Tan, J., Tyler, K. & Manica, A. (2007). Hong, W. Y. & Zhu, K. (2006). Migrating Business-to-business adoption of e- to internet-based e-commerce: Fac- Commerce in China, Information & tors affecting e-commerce adoption Management , 44(3), 332-351. and migration at the firm level, In- formation & Management , 43(2), Teoa, T. S. H., Lina, S. & Laib, K. H. 204-221. (2009). Adopters and non-adopters of e-procurement in Singapore: An Ifinedo, P. (2011). An Empirical Analysis empirical study, Omega , 37(5), 972- of Factors Influencing Internet/E- 987. Business Technologies Adoption by SMEs in Canada, International Tornatzky, L.G., Fleischer M. (1990). The Journal of Information Technology process of technological innovation , & Decision Making , 10 (4), 731- Lexington Books (Lexington Mass). 766.

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Whipple, J.M., Lynch, D.F. & Nyaga, G.N. (2010). A buyer’s perspective on collaborative versus transactional relationships, Industrial Marketing Management , 39 (3), 507-518.

Zhu, K., Kraemer, K. & Xu, S. (2003). Electronic business adoption by Eu- ropean firms: a cross-country assessment of the facilitators and in- hibitors, European Journal of In- formation Systems, 12(4), 251-268.

Zhu, K., Kraemer, Kenneth L., Xu, Sean & Dedrick Jason (2004). Information technology payoff in e-business environments: an international perspective on value creation of e- business in the financial services industry, Journal of Management In- formation Systems , 21(1), 17-54.

Zhu, Y., Li, Y., Wang, W. Q. & Chen, J. (2010). What leads to post- implementation success of ERP? An empirical study of the Chinese retail industry, International Journal of Information Management , 30 (3), 265-276.

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A STUDY ON THE CORRELATION BETWEEN FURNITURE PRODUCT KNOWLEDGE AND CONSUMERS’ SATISFACTION BY FUZZY LINGUISTICS

An Sheng Lee Department of Wood Based Materials and Design, National Chiayi University, Taiwan R.O.C. [email protected]

Abstract

This study was aimed to investigate the correlation between the furniture product knowledge and satisfaction of consumers by means of fuzzy linguistic and examine the relationship between them by means of Pearson correlation coefficient. In addition, Cronbach's α and the multiple linear regression analysis were employed to explore the influence of product knowledge and consumers’ satisfaction and establish appropriate regression equations. The research result showed that the fuzzy linguistics of furniture product knowledge and consumers’ satisfaction were significantly correlated. Through the fuzzy linguistic mean equation, fuzzy linguistic was found to be between “agree” and “more agree.” Fur- thermore, by the multiple linear regression analysis, independent variables, such as subjective knowledge, objective knowledge, and experience knowledge, were used to significantly forecast the fuzzy linguistic value of consumers’ satisfaction.

Research Background and Motives for suitable products through their own understanding, information obtained from The management of furniture enter- the external environment, and their expe- prises currently encounters a rapidly rience of using similar products. After the changing environment. The internet era evaluation, they will use the product and changes rapidly. When consumers select further generate satisfaction at the prod- furniture in the market, they usually look uct. Rao and Monroe (1989) argued that 130 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

being familiar with the importance of enterprises, designers, and consumers as a product information, consumers having reference. If the research result is em- more product knowledge, they judge less ployed by the research, development, and by their stereotypes, and, instead, they design department and the marketing de- tend to use intrinsic cues to determine the partment of a company as a reference, it quality of a product, which further influ- will be helpful for the departments to un- ences the consumers’ satisfaction. Product derstand the product knowledge of con- knowledge has always been a critical is- sumers, increase consumers’ understand- sue in the study of consumers’ behavior. ing of product knowledge, and satisfy the Consumers’ perception of furniture prod- demand of consumers, and enhance cor- ucts exists in product knowledge; product porate performance. knowledge is closely related to consumers’ satisfaction and corporate profits. In Research Limitations terms of product knowledge, Rao and In this study, the fuzzy linguistic of Monroe (1989) also found that product consumers satisfactions at furniture prod- knowledge will influence consumers’ uct knowledge was investigated from the evaluation. Scribner & Weun (2000) ad- viewpoints of consumers after purchasing dressed that the quantity of product know- and using furniture products. The samples ledge of consumers will influence the were randomly selected from the consum- process of satisfaction perception formed ers of furniture discount stores in Taiwan. by the attitude and further influence the following responses of satisfaction per- Literature Review ception. Therefore, this study was aimed to investigate and understand how product Furniture Product Knowledge knowledge influences consumers’ satisfaction in order to help enterprises under- Consumers sort the concepts from di- stand consumers’ need and design furni- versified information, form furniture prod- ture products which meet consumers’ uct knowledge, and remember it in their need, and, further, advance the operating mind. Their perception of furniture prod- performance. uct knowledge also influences their purchase of furniture products. Brucks (1985) Research Purposes addressed that when consumers select products, they usually search product in- This study was aimed to investigate formation through the memory related to the correlation between the furniture themselves and the products or make pur- product knowledge and consumers’ satis- chase decisions by means of relevant expe- faction by means of fuzzy linguistic in rience of using similar products. hopes of providing the research result for 131 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

Therefore, different consumers overall attitude based on experience. usually have different levels of product Thus, consumers’ satisfaction depends on knowledge of a product which will influ- consumers’ overall evaluation of all of ence the satisfaction. Mazursky & Jacoby their purchase experience in products or (1986) mentioned that the furniture prod- service, and it is the operating perfor- uct knowledge of consumers consists of mance index of an enterprise. Anderson, the familiarity with furniture products and Fornell & Lehmann (1994) brought up the the professional knowledge. Hence, when overall consumer satisfaction, which indi- consumers purchase furniture products, cates all of the experience of a consumer their own product knowledge tends to be in purchasing or consuming a product or applied to the furniture product evaluation service and the overall evaluation formed and influence the satisfaction at the prod- by the accumulation of time. Yeh (2005) ucts. Brucks (1985) divided the definitions addressed that consumers’ satisfaction of product knowledge into three catego- indicates the feeling of consumers that ries: their requirements have been satisfied. 1. Subjective knowledge: the knowledge Consequently, overall satisfaction is an of products which consumers think accumulative construct summing up the they own, that is, the confidence of satisfaction at a particular product or ser- consumers in products. vice of an organization and the satisfac- 2. Objective knowledge: consumers’ real tion at different dimensions of the organi- understanding of products, which is zation. Therefore, it is a critical issue for used to their actual perception of enterprises to value consumers’ satisfac- product knowledge, namely the prod- tion in corporate management and mar- uct knowledge that consumers actual- keting at present. ly own. 3. Experience knowledge: the experience Furniture Product Knowledge and of consumers in purchasing or using Consumers’ Satisfaction products, which is used to measure the product knowledge. Zeithaml (1988) considered that when consumers can only understand a Consumers’ Satisfaction product through the limited use experience before purchasing it, they will enthu- Woodruff (1983) argued that con- siastically search the internal features of sumers’ satisfaction indicates an immedi- the product and try to link the product ate reaction that a consumer generates for with the features, so internal clues be- the overall value of a product in a particu- come relatively important. Bolton & lar purchase or use. Fornell(1992) consid- Drew (1991) considered consumers’ satis- ered that consumers’ satisfaction is an faction as the emotional factor generated 132 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

by the post-purchase experience of con- Research Methodology sumers, and they were of the opinion that the factor may influence consumers’ Research Design evaluation of service quality and post- purchase willingness and behavior. Engel, 1. Research Framework. Blackwell & Minidard (2001) argued that consumers’ satisfaction indicates that af- This study was aimed to investigate the ter using a product, consumers evaluate correlation between furniture product the consistency between the product per- knowledge and consumers’ satisfaction. formance and the pre-purchase belief. The research framework is displayed in When considerable consistency exists be- Figure 1. tween them, consumers will be satisfied. On the other hand, consumers will not be Research Hypothesis and Question satisfied if their opinions on the belief in the product and the actual performance of The research hypotheses are listed as the product. follows:

Coulter et al. (2005) addressed that Research Hypothesis H 1: The fuzzy the product knowledge of consumers in- linguistics of furniture product fluences their purchase intentions, so when knowledge and consumers satisfac- they understand a product more, their pur- tion are significantly correlated. chase intentions will also increase. When Research Question: The multiple lin- consumers become more familiar with the ear regression was applied to the knowledge of a product, their faith in and furniture product knowledge analysis attitude toward the product will become in order to anticipate the fuzzy lin- better, so their purchase intention will in- guistic of consumers’ satisfaction. crease, and the satisfaction will further increase. Hence, if furniture product Questionnaire Design knowledge is regarded as an important communication bridge between consumers The research questionnaire design and products, consumers’ satisfaction will was aimed to investigate the influence of be directly influenced, consumers’ under- furniture product knowledge on the fuzzy standing and use of a product will be in- linguistic of consumers’ satisfaction in fluenced by furniture product knowledge, Taiwan. The levels included respectively and the satisfaction will be further influ- “strongly agree,” “more agree,” “agree,” enced. “disagree,” and “strongly disagree.” The first part of the questionnaire was the personal information of a participant, includ- 133 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

ing gender, age, education background, “3.1-4” indicated “more agree;” “4.1-5” and monthly income. The second part was indicated “strongly agree.” The third part the opinions of the participants about fur- showed the satisfaction evaluations of the niture product knowledge, including sub- participants, which were based on the jective knowledge, objective knowledge, subjective feelings of the participants, af- and experience knowledge. The values of ter understanding furniture product fuzzy linguistic respectively represented knowledge. The representations of the the following agreement: “0-1” indicated fuzzy linguistic values were identical to “strongly disagree;” “1.1-2” indicated those in the second part. “disagree;” “2.1-3” indicated “agree;”

Independent Variables Multiple Linear Regression Dependent Variable

The product knowledge that con- Subjective sumers think they have The fuzzy lin-

knowledge guistic of con- Furniture Consumers’ real understanding of sumers satisfac- product Objective a product tion knowledge knowledge Measuring product knowledge Experience through consumers’ previous knowledge purchasing or using experience

The fuzzy linguistic of consumers satisfaction

Figure 1. Research framework

The Fuzzy Linguistic Statistics of the following types: triangular fuzzy number, Questionnaire Data trapezoidal fuzzy number, and normal fuzzy number. In this study, the triangular Matarazzo and Munda (2001) argued fuzzy linguistic numbers of a Likert five- that traditional linguistic decisions were point fuzzy linguistic scale were used to all limited to the use of triangular number, indicate the weights of the indexes. Based so they brought up the method of using on the viewpoint of fuzzy linguistic, the the integration method to calculate fuzzy fuzzy linguistic scale was designed, and numbers, which are categorized into the an approach of fuzzy linguistic evaluation 134 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

was employed to measure the feelings of represented the numbers of the expected the participants. triangular fuzzy linguistic coordinates, so F =(0, 0,1), (0, 1, 2), (1, 2, 3), (2, 3, 4), A fuzzy linguistic approach was ap- and (3, 4, 5), which respectively repre- plied to the questionnaire survey in this sented the five linguistic phrases. The da- study to conduct multiple linear regres- ta were outputted after fuzzy inference sion for forecasting the fuzzy linguistic of and defuzzification (Klir & Yuan, 1995). consumers’ satisfaction by means of the That is, the fuzzy statistics obtained by factor of furniture product knowledge. fuzzifying the satisfaction were defuzzi- Wu, Hsiao, and Kuo (2004) proposed the fied in order to obtain specific values for data processing of a fuzzy rule database; the following research and analyses. The respectively giving the linguistic variables center-of-area approach used by Kauf- of the satisfaction of pre-test expectation mann and Gupta(1991), Chien and Tsai five linguistic phrases, namely “strongly (2000), and Hsu and Lin (2005) was ap- agree,” “more agree,” “agree,” “disagree,” plied to the defuzzification. The triangular and “strongly disagree,” to respectively fuzzy linguistic numbers were and found represent a triangular fuzzy linguistic as follows (Figure 2.) number. It was assumed that a, b, and c

~ The de-satisfaction linguistic fuzzification formula, namely F , is listed as follows: As- ~ sume F = (a,b,c ), ~ is the coordinate mean of triangular fuzzy linguistic, V X

~ = (a + 2b + c 4/) , u(x) is the fuzzy membership function, and the value of u(x) is 0~1. V X Strongly Disagree Variable Linguistic Disagree Agree agree More Agree Strongly

u()x 1

0 1 2 3 4 5 X potential characteristic

Figure 2: The membership function diagram of five-level fuzzy linguistic variables

135 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

~ a1 b1 c1 ----- F = (a1,b1,c 1 ) The fuzzy linguistic calculation of the second part of

the questionnaire

~ a2 b2 c2 ---- F = (a2 ,b2 ,c 2 ) The fuzzy linguistic calculation of the third part of the questionnaire

Equation (1) was induced from the fuzzy linguistic descriptive statistic equation of the second ~ part of the questionnaire: F = (a ,b ,c ), and ~ = (a + 2b + c 4/) can be converted into 1 1 1 V X 1 1 1

Fuzzy Lingustic Mean = []∑ (a1 + 2b1 + c1 ) 4/ N ,N=702(participants) ----(1) 1

Equation (2) was induced from the fuzzy linguistic descriptive statistic equation of the third ~ part of the questionnaire: : F = (a2 ,b2 ,c 2 );

~ = (a + 2b + c 4/) can be converted into V X 2 2 2

Fuzzy Lingustic Mean = []∑ (a2 + 2b2 + c2 ) 4/ N ,N702(participants) ----(2) 1 The fuzzy linguistic values of the questionnaire were analyzed by means of Equations (1) and (2).

The Reliability and Validity of the opinions of the participants about furni- Questionnaire ture product knowledge, including subjective knowledge, objective knowledge, and The validity of this questionnaire experience knowledge. The Cronbach’s α was confirmed through the interview of obtained from the pilot study was 0.926, expert panel. Moreover, sixty-nine copies which was higher than 0.7. The third part of the questionnaire were applied to the of the questionnaire was the satisfactory pilot study, and then, the questionnaire evaluations of the participants after buy- was appropriately amended and adjusted. ing and using furniture products. The According to the standard suggested by Cronbach’s α obtained from the pilot Nunnally (1995), the content of a ques- study was 0.937, which was higher than tionnaire will be reliable when the 0.7. The two parts of the questionnaire Cronbach’s α is higher than 0.7. The sec- were both highly reliable in the pilot ond part of this questionnaire was the study. 136 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

The Descriptive Statistic Results of the come, “USD5,00 - 1,000” accounted for Questionnaire 36%, which was the maximum whereas “USD 3,000 and the above” accounted for In terms of sample structure, 702 5.6%, which was the minimum. participants came from various areas in Taiwan. The male participants accounted The Fuzzy Linguistic Descriptive Statistic for 48.3% while the female participants Analysis of the Questionnaire accounted for 51.7%. For age, “20-29 years old” accounted for 34.6%, which Based on the second and third parts of was the maximum, and “60 years old and the questionnaire of the subjective know- the above” accounted for 8.1%, which ledge, objective knowledge, and experi- was the minimum. In terms of education, ence knowledge of furniture product “college” accounted for 39.7%, which knowledge on the fuzzy linguistic of con- was the maximum, whereas “junior high sumers’ satisfaction (Table 1), the con- school and the below” accounted for sumers attached the most importance to 17.1%, which was the minimum. For in-

Table 1. The fuzzy linguistic descriptive statistics of the questionnaire of furniture product knowledge

Mini- Maxi- Std. Devia- N mum mum Mean tion Subjective knowledge 702 2.00 5.00 3.7350 .65931 Objective knowledge 702 2.00 5.00 3.7236 .69066 Experience knowledge 702 2.00 5.00 4.1197 .68814 Furniture product knowledge 702 3.00 5.00 3.8704 .54105 Valid N (listwise) 702

u(x)

0.87

0 1 2 3 3.87 4 5 X potential features

Figure 3. The membership diagram of the linguistic variables of satisfaction 137 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

Table 2. The Pearson correlation analysis of the fuzzy linguistics of subjective knowledge, objective knowledge, experience knowledge in furniture product knowledge and consumers’ satisfaction

Factors Subjective Objective Experience Consumer’s Sat- knowledge knowledge knowledge isfaction Subjective Pearson Cor- knowledge relation 1 .290(**) .447(**) .244(**)

Sig. (2 -tailed) . .000 .000 .000 N 702 702 702 702 Objective Pearson Cor- knowledge relation .290(**) 1 .124(**) .387(**)

Sig. (2 -tailed) .000 . .001 .000 N 702 702 702 702 Experience Pearson Cor- knowledge relation .447(**) .124(**) 1 .407(**) Sig. (2 -tailed) .000 .001 . .000 N 702 702 702 702 Consumer’s Pearson Cor- Satisfaction relation .244(**) .387(**) .407(**) 1 Sig. (2 -tailed) .000 .000 .000 . N 702 702 702 702

** Correlation is significant at the 0.01 level (2-tailed).

experience knowledge in furniture product value of the questionnaire was between 3 knowledge, and the fuzzy linguistic mean and 4, namely between “more agree” and was 4.1197. They attached less importance “agree,” indicating that the consumers to objective knowledge in furniture prod- were considerably satisfied with furniture uct knowledge, and the fuzzy linguistic product knowledge. mean was 3.7236. The fuzzy linguistic means of furniture product knowledge on The Pearson Correlation Analysis of the consumers’ satisfaction were all higher Fuzzy Linguistics of Furniture Product than the fuzzy linguistic means of subjective knowledge and objective knowledge. Knowledge and Consumers’ Satisfaction The fuzzy linguistic mean was 3.87, as shown in Table 1 and Figure 3. The ex- According to Table 2, the fuzzy lin- pression of the fuzzy membership function guistics of subjective knowledge, objective was u(x):1= (3.87-3.0):(4-3), and the ob- knowledge, and experience knowledge in tained fuzzy membership function was furniture product knowledge were signifi- u(x)=0.87. It was found that the fuzzy cantly correlated. Among them, subjective

138 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

knowledge and experience knowledge Si = x+ q １ki １＋ q２ki ２＋q３ki ３ were the most correlated; r(702) = .447, p<.00. The fuzzy linguistics of objective in which, Si = the fuzzy linguistic forecast knowledge and experience knowledge in of consumers’ satisfaction; x = additive furniture product knowledge were the least constant; ki １ (subjective knowledge), ki ２ correlated; r(702)= .124, p<.00. In addi- (objective knowledge), and ki ３ (experi- tion, the fuzzy linguistics of consumers’ ence knowledge) = predictors; q １, q 2, , and satisfaction and subjective knowledge, ob- q3 = linear slopes. jective knowledge, and experience The multiple linear regression equa- knowledge in furniture product knowledge tion was used as the forecast equation of were all significantly correlated. Among consumers’ satisfaction in order to trans- them, the mean and the satisfaction corre- form into Predicted Consumer Satisfaction lation of experience knowledge were the value =x+ q１*subjective knowledge + highest; r(702)= .407, p<.00. q２*objective knowledge + q ３* experi-

ence knowledge. The Multiple Linear Regression Analysis of the Fuzzy Linguistics of Furniture The multiple linear regression equa- Product Knowledge and Consumers’ tion was employed in this study as the re- Satisfaction lational equation for forecasting the influence of furniture product knowledge on The multiple linear regression ap- the fuzzy linguistic of consumers’ satis- proach was employed to establish a math- faction. According to Tables 3, 4, and 5, ematical functional relationship between there were three predictors in this multiple the fuzzy linguistics of furniture product linear regression, respectively subjective knowledge and consumers’ satisfaction, know-ledge, objective knowledge, experi- and the functional relationship was then ence knowledge, which were significantly used as a dependent variable to forecast correlated with the fuzzy linguistic of satisfaction. The independent variables consumers’ satisfaction. R 2 =.530, adjust- were (ki １, ki ２, ki ３) furniture product edR 2 =.278, F(3,701)= 91.109, and knowledge (subjective knowledge, objec- p=.000. Through the multiple linear re- tive knowledge, and experience gression analysis, furniture product know- knowledge), and the fuzzy linguistic (Si) ledge was used to forecast the fuzzy lin- of consumers’ satisfaction was regarded as guistic of consumers’ satisfaction. The the dependent variable to forecast the obtained multiple linear regression equa- fuzzy linguistic of consumers’ satisfaction tion was Predicted Consumer Satisfaction as time changed. The obtained equation of value =1.704-.020 subjective knowledge multiple linear regression is listed as follows: 139 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

Table 3. The model summary of multiple linear regression analysis

Model R R Square Adjusted R Square Std. Error of the Estimate 1 .530(a) .281 .278 .44791 a Predictors: (Constant), Experience knowledge, Objective knowledge, Subjective knowledge

Table 4. The ANOVA of multiple linear regression analysis

Model Sum of Squares df Mean Square F Sig. 1 Regression 54.836 3 18.279 91.109 .000(a) Residual 140.036 698 .201 Total 194.872 701 a Predictors: (Constant), Experience knowledge, Objective knowledge, Subjective knowledge b Dependent Variable: Consumer’s Satisfaction

Table 5. The coefficients of multiple linear regression analysis

Model Unstandardized Coef- Standardized ficients Coefficients t Sig. B Std. Error Beta 1 (Constant) 1.704 .135 12.637 .000 Subjective knowledge -.020 .030 -.025 -.667 .505

Objective knowledge .266 .026 .348 10.382 .000

Experience knowledge .287 .027 .375 10.454 .000 a Dependent Variable: Consumer’s Satisfaction

+.266 objective knowledge + .287 experi- It was found in this study that the ence knowledge. consumers attached the most importance to experience knowledge and paid less Conclusions and Suggestions attention to objective knowledge in terms of furniture product knowledge. The fuzzy linguistics of subjective knowledge

140 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014

and experience knowledge were the most perience knowledge, which were signifi- correlated, and they were significantly cantly correlated to the fuzzy linguistic of correlated with each other. The fuzzy lin- consumers’ satisfaction. The obtained guistics of objective knowledge and expe- multiple linear regression was significant- rience knowledge were the least correlat- ly established. Subjective know-ledge, ed. Furthermore, consumers’ satisfaction objective knowledge, and experience was significantly correlated with the knowledge in furniture product fuzzy linguistics of subjective knowledge, knowledge can be used to forecast the objective knowledge, and experience correlation of the fuzzy linguistic of con- knowledge. (2) The fuzzy linguistic mean sumers’ satisfaction. of furniture product knowledge on consumers’ satisfaction was higher than the The conclusion of this study can be fuzzy linguistic means of subjective used by designers as a reference to furni- knowledge and objective knowledge. The ture product design and development, and result showed that the fuzzy linguistic of factors, such as subjective knowledge, ob- consumers for experience knowledge in jective knowledge, and experience furniture product knowledge was the knowledge, which were accepted by all highest. (3) In this study, multiple linear consumers should be included the design regression was used to forecast the influ- consideration of furniture products in ence of furniture product knowledge on hopes of designing the products which the fuzzy linguistic of consumers’ satis- meet the demand of consumers, can in- faction. There were three forecast inde- crease consumers’ satisfaction, and further pendent variables, respectively subjective increase the development performance and knowledge, objective knowledge, and ex- profits of enterprises.

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INVESTIGATING INFLUENCES OF SEA-LAND CIRCULATION ON OZONE POLLUTION IN SOUTHERN TAIWAN BY COUPLING CLUSTER ANALYSIS WITH BACK - TRAJECTORY SIMULATION

Kun-Ming Lin Graduate Institute of Environmental Engineering National Taiwan University, Taiwan R.O.C. [email protected]

Tai-Yi Yu * Department of Risk Management and Insurance Ming Chuan University, Taiwan R.O.C. *Corresponding Author: [email protected]

Len-Fu Walter Chang Graduate Institute of Environmental Engineering National Taiwan University, Taiwan R.O.C. [email protected]

Abstract

This study employs cluster analysis on the coordinate numbers of the back trajectories of the stations by choosing Kao-Ping air quality basin, the most severely polluted air quality basin in Taiwan, as the subject. By making analysis of the back trajectories of the 14 stations during spring and autumn (183 days in total), we realized the correlation between the categorization of back trajectories and ozone concentration. The results of cluster analysis indicated that the agglomeration employed by Ward’s method works better than average linkage method. Back trajectory routes consist of four types, namely, slow monsoon, sea breeze, stagnation and fast monsoon types. If take the average daily ozone value into account, 57% of the monitoring stations, located downtown or satellite metropolis areas, showed that sea breeze reached maximum concentrations, whereas 43% of the surveyed stations, located in industrial areas, reached their highest value when a slow monsoon blew. From the analytical results of the topology, weather and back trajectory of the Kao-Ping air quality basin, the stations that contributed to the high-concentration ozone pollution were mostly located in the coastal areas of Kaohsiung City, especially when the backward trajectory brought by westerly sea breeze.

Keywords: Backward Trajectories, Cluster Analysis, Ozone

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Introduction hour back trajectories that passed White- face Mountain in five years before discov- A variety of factors may affect air ering the difference of ozone concentration quality; as such factors have multi- by means of nonparametric method so as dimension features. Cluster analysis has to elucidate the long-term transmission of been widely applied to categorize and ana- ozone. This paper aims to conduct the lyze the causal relationship between air cluster analysis of back trajectories of the quality and pollution source, whilst back ozone monitoring stations within 72 hours trajectory model is often employed to ex- in areas where air quality is most seriously plore the causal relations between the con- polluted. By adequately categorizing such centration of the air pollutants and its emit- routes, we come to clarify the characteris- ted sources. Hence, making the back tra- tics of every back trajectory routes and jectory’s positions as the measurable vari- ozone concentration in an attempt to make ables for cluster analysis can be an effec- them as reference for future’s regulatory tive tool to grasp the interactions among strategies for ozone pollution. weather, emission source and air quality. Moody and Galloway (1988) was the first Research Domain and Data to set the trajectory’s coordinate number as the measurement variable to undertake The research data comprises the cluster analysis as they thought differing information of weather and air quality. The trajectory routes would have similar wind ground weather data includes the 25 directions, wind speed and areas with ground stations of the Central Weather Bu- emission sources. Fernau and Samson reau and the 57 stations of the Environ- (1990 a, b) further integrated cluster analy- mental Protection Administration (hereun- sis and trajectory model and applied them der referred to as EPA), which provide both to ten stations situated across the hourly data. Airsonde weather data is eastern areas of North America, so as to found in the monitoring data from stations define seven weather types and chemical Benciao and Hualien (at 8:00 am and 8:00 sedimentary zone, discover the transmis- pm) by employing temporal interpolation sion route of air pollutants and successful- method. Currently Taiwan is divided up ly pinpoint the various change of time ac- into seven air-quality basins, of which cording to differing trajectory types of Kao-Ping air quality basin has seen the chemical sedimentation. Moody et al. most serious pollution in 20 years. Viewed (1995) conducted the research on Bermu- from the percentage of days with PSI>100, da’s ozone transmission by categorizing from 2001 through 2010, the percentage of the 540 back trajectory routes, each of PSI across Taiwan was 2.5-4.3%, whereas which lasted for 120 hours with a coordi- that of Kao-Ping air quality basin was 4.8- nate number being showed every twelve 10.0% with the indicative pollutant being hours. The distribution of ozone concen- ozone. Kao-Ping air quality basin was con- tration with differing trajectories displays sisted of Kaoshuing County, Kaohsiung huge difference. City and Ping-Tung County. To improve the air quality, this study selects ozone as Kahl et al. (1997) analyzed the the subject of research so as to pinpoint the condition of the air transmission and visi- characteristics of back trajectories that af- bility of the Grand Canyon with five-year fect ozone concentration. Formulated by duration’s data. Each trajectory route last- the EPA in 1990, Taiwan Air Quality ed for 72 hours, which showed that north- Monitoring began to operate in September west/ southwest/ south wind mostly affect- 1993, with presently 77 stations in total ed the visibility in summer and winter. (nine actinic stations excluded). Brankov et al. (1998) classified the 72-

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Figure 1 . Locations and topography of monitoring stations.

Monitoring items include sulfur The geographic locations of emis- dioxide, carbon monoxide, ozone, sus- sion inventory for THC (Fig. 2a) and NOx pended particles, nitrogen oxides, hydro- (Fig. 2b), established by Taiwan EPA [11], carbon, wind direction, wind speed, and could play an important role to form high temperature etc. The Kao-Ping air quality ozone levels. The size of individual cells basin is equipped with 14 stations (Fig- used in analysis is 2 km x 2 km. The THC ure1). The Tainan City, Tainan County, and NOx emission presented high values Chiayi County and Yunlin County are po- over coastal regions of Tainan County, litical jurisdictions that located in the Tainan City, Kaohsiung County and northern part of Kao-Ping air quality basin. Kaohsiung City. Especially, the coastal areas in Kaohsiung City and County

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Figure 2. Emission inventory of (a)THC and (b)NOx, ton/y (cell size = 2 km x 2km)

showed the highest levels of emission in- regular stations, with the benefits of filter- ventory for THC and NOx. The contour ing effect and the consistency of the map of exceeding rate for daily maximum weather data from previous stations. Var- hourly ozone levels over 120 ppb (Fig. 3a) iation analysis modulates the effect pro- represented an increasing trend from sea to duced from flow-fields passing through land; the contour map for 80 ppb (Fig. 3b) complicated topography. Year 2007 is the also showed the same trend. Then, land- goal year that the EPA chose for simula- sea breeze circulation could be a dominant tion of ozone episodes. As spring and autumn are two seasons in which ozone pol- factor to cause high ozone levels over lution occurred most frequently, the start- Kao-Ping air quality basin. ing time for each station was during the hour that highest hourly values occurred Methods per day, with 72 hours as the trace duration. The back trajectory model comprises three steps—objective analysis, var- Cluster analysis selects samples iation analysis, and trajectory back-tracing, from the coordinate number of each sta- objective analysis grids the data of the ir- The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 147

tion’s hourly backward trajectory separate- gets the root mean square (RMS) value by ly. The process of cluster analysis consists combining the stations with minimum var- of three steps: first, the similarity value iances, while average linkage chooses av- should be decided, with the application of erage distance. Lastly, the number of clus- Euclidean distance. Secondly, connection ters could be determined by using pesudo- method should be decided, and in this F, pesudo-t2, relevant coefficients and to- study, we compare two common methods, tal RMS variation [10] . This study uses that is, Ward’s method and average link- total RMS variation as the indicator of the age manner, before selecting stations that number of clusters. should be connected first. Ward’s method

Figure 3. Contour map of exceeding rate (%) for daily ozone levels over (a) 120 ppb (b) 80 ppb in 2001-2010

Results and Discussion ance with the increase of the categorized number. On the other hand, the ratio of According to the categorization of total variance of the average linkage will the cluster analysis, we make Figure 4on irregularly decrease as the categorized the ratio of the categorized number of the number sees a growth. For instance, when four stations (#47-50) and the total ex- the categorized number of the station #50 plained variance as a comparison of is three, the total explained variance will Ward’s method and average linkage man- be 76.7%, and when the categorized num- ner. In regard with the ratio of percentage, ber of the station #50 is four, the total ex- Ward’s method has a higher decreasing plained variance is 85.1%. As the former ratio than average linkage method; there- becomes five, the latter drops to 80.2%. If fore, if we adopt the same categorized consider the suitableness of the catego- number, the total explained variance will rized number, then in the example of the be higher than that of average linkage, and station #49, the total explained variance is more suitable for this study. As the ag- will be 46.1% and 42.3% respectively glomeration employed by Ward’s method when the categorized number is 4 and 5. combines stations with variances, the ratio Put differently, the increased explained of total variance will decrease in accord-

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Figure 4 . The correlation between the number of clusters and total RMS variation.

variance is short of 5%. Hence here we (1) The 57% of the surveyed stations’ recommend taking four as the categorized back trajectories have the highest average number. Upon the ground of the above daily ozone value when a sea breeze oc- cluster analysis, the back trajectory of each curs; these stations are located in down- station in the 183-day period is classified town or satellite metropolis areas. The re- into four types, while the six-hour average maining 43% of the stations reach the back trajectory can be divided into slow highest average daily ozone value when a monsoon (Figure 5a), sea breeze (Figure slow monsoon occurs. These stations are 5b), stagnation (Figure 5c) and fast mon- mostly situated round the industrial zones. soon types (Figure 5d). The weather condition of the station # 61 immensely differs (2) Compare the average daily ozone from that of any other station; hence its value of the back trajectory of each type analysis of back trajectory is not included by taking into account all stations over the here. Thus stated, the average daily ozone Kao-Ping air quality basin, the highest value of each type of back trajectory is concentration is sea breeze type, followed shown in Figure 6. by slow monsoon, stagnation and fast monsoon types. Compare the back trajectory of each type and its average daily ozone val- With regard to the average daily ue and we know that: ozone value of various back trajectories,

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Figure 5 . The average back trajectories of the stations of the four types.

blowing wind will alleviate the emission into consideration, then the seven coastal and concentration of the ozone particles. stations (stations #50, 52, 53, 54, 56, 58, Meanwhile, 36% of the stations have the 71) have the highest concentration ozone lowest value when a stagnation takes 1-2 hours earlier than three interior sta- place, as the backward trajectory of a stag- tions (stations #47, 59, 60). nation is shorter and even lingers at the same spot, thus absorbs relatively little Conclusions ozone precursors.

From the analytical results of the (3) The stagnation type usually ap- topology, weather and back trajectory of pears in the form of a weak monsoon or the Kao-Ping air quality basin, the stations south wind. 50% of the stations (stations that contributed to the high-concentration #50, 51, 52, 53, 54, 56, 58) whose back ozone pollution were mostly located in the trajectories show that the wind direction is coastal areas of Kaohsiung City, especially south wind. when the sea breeze back trajectories brought by westward wind. As to whether The sea breeze type (westward) the ozone pollution in the Kao-Ping air occurs before the highest concentration quality basin can be transmitted for subse- ozone hourly value, lasting for three hours quent days, we need more data regarding on average. The initial point of time of ozone concentration, back trajectory and each station’s back trajectory is at the du- the emissions of ozone precursors to clari- ration when the highest hourly value of fy the causal relationship between high- ozone appears. As the wind blows across concentration ozone pollution and regional Kao-Ping air quality basin from 10:00 till emission. As to the contributory ratio of 11:00 in the morning, the highest concen- the ozone precursors for ozone episodes is tration ozone appears during the time of yet to be found in the future research. 1:00 pm to 2:00 pm. If take the duration

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Figure 6 . The average daily ozone value obtained by the four types .

Acknowledgments Fernau, M.E.; Samson, P. J. Use of Cluster Analysis to Define Periods of Similar Meteorology and Precipitation The authors are grateful for the fi- Chemistry in Eastern North Ameri- nancial support by a grant from Taiwan can. Part I: Transport Pat- Environmental Protection Agency. terns.Journal of Applied Meteorolo- gy 1990a, 29 , 735-750.

Fernau, M.E.; Samson, P. J. Use of Cluster Analysis to Define Periods of Similar References Meteorology and Precipitation Chemistry in Eastern North Ameri- Barnes, S.L. Mesoscale Objective Map can. Part II: Precipitation Patterns Analysis Using Weighted Time Se- and Pollutant Deposition.Journal of ries Observations. NOAA Technical Applied Meteorology 1990b, 29 , 751- Memorandum , ERL NSSL-62, 1973, 761. pp. 60. Izquierdo, R.; Avila, A.;Alarcón M. Tra- Brankov, E.; Rao, S.T.; Porter, P.S.A Tra- jectory statistical analysis of atmos- jectory-Cluster-Correlation Method- pheric transport patterns and trends ology for Examining the Long-Range in precipitation chemistry of a rural Transport of Air Pollu- site in NE Spain in 1984–2009. At- tants.Atmospheric Environment 1998, mospheric Environment 2012, 61 , 32 , 1525-1534. 400-408.

Eder, B.K.; Davis, J.M.; Bloomfield, P. An Kahl, J.D.W.; Liu, D.; White, W.H.; Automated Classification Scheme Macias, E.S.;Vasconcelos, L. The Designed to Better Elucidate the De- Relationship Between Atmospheric pendence of Ozone on Meteorolo- Transport and the Particle Scattering gy.Journal of Applied Meteorolo- Coefficients at the Grand Can- gy1994, 33 , 1182-1199. yon.Journal of the Air & Waste Management Association 1997, 47 , 419-425. The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 151

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EXAMINING THE MECHANISMS LINKING BEHAVIORAL INTEGRITY AND AFFECTIVE COMMITMENT: THE MEDIATING ROLE OF CHAR- ISMATIC LEADERSHIP

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]

Wei-Shun Liao Department of International Business Management Da-Yeh University, Taiwan R.O.C. [email protected]

Abstract

In this study, we theoretically identify the relationships among behavioral integrity, charismatic leadership, and affective commitment. Integrating the behavioral integrity-charismatic leadership-affective commitment framework, we propose that behavioral integrity not only has a direct positive influence on affective commitment, but also indirectly influences affective commitment through charismatic leadership. This study uses employees of an international automotive company located in Taiwan as the research subject, collecting 427 effective questionnaires. The results support our hypotheses. Overall, the results of this study can provide the international automotive company located in Taiwan with a reference for human resource management decisions, and clarify the relationship between behavioral integrity and affective commitment through charismatic leadership. Therefore, the results of this study contribute to human resource management theory and research for the international automotive company located in Taiwan.

Key Words: Behavioral Integrity, Charismatic Leadership, Affective Commitment, Job Satisfaction, Role Conflict, Role Overload

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Introduction Because these variables are potentially influenced by BI, Allen and Meyer In recent years, behavioral integrity (1990) introduced the concept of affective (BI) has become an emerging field of em- commitment with their proposed organiza- pirical research. Simons (2002) proposed a tional commitment model. Allen and Mey- BI model, where BI is defined as the trust er (1990) contended that organizational of employees toward their managers (i.e., commitment comprises three entirely dif- doing as they are instructed), or the image ferent subscales, that is, affective com- of managers perceived by their employees mitment, continuance commitment, and (i.e., the perception that a person acts in normative commitment. According to Iver- ways that are consistent with their words). son and Buttigieng (1999), the construct Employees are influenced by their percep- and operational definition of affective tions of managers’ word-deed alignment commitment indicates the involvement of patterns. a continuance factor known as attitude commitment. Affective commitment can Therefore, this study defines BI as the be defined as employees’ affective or emo- perceived pattern of a person’s word-deed tional attachment to the employing organi- alignment. Simons (2002) asserted that BI zation (Allen & Meyer, 1996; Rhoades et typically involves affective components al., 2001). Low affective commitment en- (Kramer, 1996), such as benevolence ables employees to fulfill their duties ef- (Cummings & Bromiley, 1996) and behav- fectively (Meyer et al., 2002). ioral intentions, that differ from general concepts of trust. Dineen et al. (2006) con- Therefore, when employees possess tended that BI is a construct of word-deed strong affective commitment to an organi- alignment patterns, rather than a specific zation, their turnover intentions decline instance. Apparent in the personality of (Allen & Meyer, 1996; Vandenberghe & managers, BI is basically a differing recip- Tremblay, 2008). In addition, when em- rocal obligation (Shore et al., 2004). Si- ployees possess high levels of commit- mons (2002) further defined BI as a sub- ment, they tend to identify with the organ- jectively perceived intrapsychic phenome- ization and actively participate in work non that includes the two subdimensions (Allen & Meyer, 1990). High affective of (a) espoused and enacted values, and (b) commitment includes employee-job fit, promises fulfilled. Subsequently, both par- self-esteem, and loyalty perceptions ties must possess a perceived consensus. (Rousseau & Aube, 2010). Previous empirical studies of affective commitment have Perceived BI is a type of actor per- shown that employees who receive desira- ception. For example, managers engage in ble benefits are more likely to possess af- certain behaviors that are consistent with fective commitment to an organization their value statements, priorities, expecta- (Mowday et al., 1982; Meyer & Allen, tions, and management styles (Simons, 1997). Additionally, employees tend to de- 1999, 2002) and correlate with trust, relia- velop affective commitment when encour- bility, and psychological contracts (Si- aged by supervisors inside the organization mons, 2002; Davis & Rothstein, 2006). BI (Mottaz, 1988; Podsakoff et al., 1996; can also influence employees’ trust in Schaubroeck & Fink, 1998; Kidd & management, perceptions of interpersonal Smewing, 2001; Stinglhamber & Vanden- justice, affective commitment, overall sat- berghe, 2003; Rafferty & Griffin, 2004). isfaction, and intentions to remain (Simons et al., 2007).

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A review of relevant literature indi- information and understanding and con- cated that in an organization, the word- firming the organizational goals, managers deed alignment and behavior of supervi- motivate subordinates to achieve excellent sors can significantly influence employees outcomes (Shamir et al., 1993). Middleton and the organization. Therefore, when the (2005) indicated that charismatic leader- words and deeds of supervisors within an ship depends on the unique psychology organization generate employee commit- and behavioral characteristics exhibited by ment and approval, employees’ affective leaders, and is a relationship developed commitment to the supervisor and organi- between leaders and their subordinates. zation can be increased. Sosik (2005) highlighted that charismatic leaders are skilled in observing the envi- Reviewing previous studies regarding ronment; identifying their followers’ leadership, charismatic leadership has needs, expectations, and requests; and clar- emerged as a prominent and widely adopt- ifying their values. In summary, charis- ed theory (Dvir et al., 2002), and the feasi- matic leaders possess firm beliefs and con- bility and maturity of charismatic leader- sider themselves to be indicators of appro- ship skills continues to increase (Shamir et priate behavior and the organizational vi- al., 1993; Jacobsen & House, 2001). Cur- sion, which motivates followers to perform rently, charismatic leadership has become beyond the expectations of supervisors. a mainstream of contemporary leadership theory (Mumford et al., 2008). Bass (1997) According to the above studies, when contended that the personal expressive be- supervisors’ words and deeds are aligned haviors of charismatic leaders stimulate with the organizational goals, employees’ followers to develop a strong emotional identification with and trust in supervisors’ attachment, contribute additional effort, behavior and vision can be enhanced, and exhibit high performance levels. Sha- which increases their affection for supervi- mir et al. (1998) found that charismatic sors and the organization. Although previ- leadership is positively correlated to em- ous studies have verified that a correlation ployee identification, organization de- exists between BI and affective commit- pendency, social identification, team de- ment (Simons et al., 2007), no research has pendency, and identity maintenance among identified the mediating mechanism be- members, and thus influences employee tween them. Thus, this study focuses on BI organizational commitment. Conger & and affective commitment and uses char- Kanungo (1987) and Jackobsen & House ismatic leadership as the mediating varia- (2001) stated that the typical psychological ble to explore how employees of an inter- features of charismatic leadership include national automotive company develop af- high performance, energy, and desire for fective commitment for supervisors and power and achievement, as well as ex- the organization, which increases their in- traordinary communication techniques. tentions to voluntarily devote themselves to the organization. This study is the first Charismatic leaders exercise a diverse to examine supervisors’ charismatic lead- and intense social influence over others ership behavior in an effort to verify the through their beliefs and unique behaviors relationship between BI and affective (Weber, 1947; House, 1999). Waldman et commitment. Therefore, the results of this al. (2001) highlighted that charismatic study can compensate for gaps in previous leadership specifically denotes a vision, research. In summary, using the mediating sense of mission, demonstrations of de- mechanism of charismatic leadership, this termination, and the cultivation of high study clarifies the overall process by expectations for fulfillment. By providing which supervisor BI influences employees’

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affective commitment. with the internal operations of an organization and supervisor behavior, and behave During this era of rapid changes in inappropriately. This study explored the global political, economic, and indus- whether employees agree with managers’ trial environments, competition has inten- words, deeds, and value perceptions in a sified gradually. In addition, multiple en- working environment with differing cul- terprise scandals involving supervisors tures. In addition, we also examine wheth- have emerged, resulting in political insecu- er the emotions exhibited by these em- rity and market fluctuations. These scan- ployees toward internal operations dals have reduced public confidence in prompted them to consider the significance enterprise leaders and significantly influ- of their company. Therefore, whether em- enced the organizations’ employees. For ployees are willing to devote greater or example, in 2010, an international tech- even twice as much effort and loyalty to a nology corporation experienced successive company that they identify with and that employee suicides, which prompted high- provides supervisor encouragement is wor- level managers to propose and implement thy of further discussion. employee benefit strategies. Consequently, the employees ceased to exhibit such de- The automotive industry is a capital- structive behavior. In another example, an and technology-intensive industry that in- international automotive company estab- volves complex manufacturing processes. lishing manufacturing firms in China expe- Thus, the automotive industry has a broad rienced a workers strike. impact on industry and can influence the development of peripheral industries. With Interviews with the participating em- the characteristics of a high industry con- ployees indicated that the entire protest nection and high labor and market de- was prompted by employee dissatisfaction mands, the automotive industry is vital for with the working environment, meals, and supporting and sustaining national econo- wages. After a series of strikes and scan- mies, and plays a crucial role in livelihood, dals had erupted, the internal managers of economy, and social development process- the enterprise began considering their be- es. Confronted with global industrial com- havior and actions, assessing whether the petition, Taiwan must promote the automo- promises given to employees influence tive industry to achieve comprehensive their behavior. Therefore, considering and sustainable upgrades and develop- these events, employee consciousness has ment. Therefore, managers should focus been gradually manifested. When employ- on maintaining a favorable internal cul- ees disagree with an organization’s bene- ture, environment, and systems within the fits and strategy perceptions, they initiate enterprise they serve at. The words and specific activities that protest against com- deeds of staff are crucial for building a de- pany policies to express their dissatisfac- sirable working environment. Specifically, tion. manager behavior has the most significant influence on employee behavior. In the current competitive global industry environment, enterprises are ex- Thus, this study selected an interna- tremely likely to be internationalized and tional automotive company located in crucial norms regarding enterprise scale Taiwan as the research subject to explore and cultural systems must be established. whether employee perceptions of manager Under this context, we explored why em- BI are shaped by the charismatic leader- ployees of large-scale and international- ship of managers, thereby subsequently ized companies still exhibit dissatisfaction enhancing employees’ affective commit-

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ment to the organization and managers. intention to remain. Therefore, BI is a log- The results can compensate for the gaps in ical antecedent that has been repeatedly previous research and clarify the relation- shown to influence organizational com- ship between managers’ word-deed align- mitment (Mathieu & Zajac, 1990). Prottas ment and employees’ affective commit- (2008) cited Chatman (1991) and O’Reilly ment. The results can also provide a refer- et al. (1991), explaining that when people ence for international automotive indus- attempt to adjust themselves to an external tries to adjust their organizational culture environment, they begin to perceive that and systems in response to global competi- employee attitude, well-being, and absen- tion and to identify the behaviors of man- teeism is correlated to their individual val- agers. The results are expected to be bene- ue. A consistent correlation between indi- ficial in both theoretical and practical as- vidual value and employee attitudes and pects. behaviors (e.g., work satisfaction, organizational commitment, adjustment relaxa- Literature Review tion, turnover intentions, and turnover) within an organization has been observed. The Relationship Between Behavioral In- Therefore, BI is considered to correlate tegrity and Affective Commitment with organizational commitment.

In recent years, numerous studies McAllister (1995) contended that the have explored BI using innovative empiri- basis of perception is personal reliability cal research. In addition, the correlation and dependability. Davis and Rothstein between BI and commitment has been ver- (2006) extended the theory proposed by ified (Simons et al., 2007). The interaction Mcallister (1995) and explained the corre- between managers and employee com- lation between commitment and BI per- mitment exhibits a significantly positive ceptions. BI differs from general trust con- correlation (Wayne et al., 1997; Kacmar et cepts regarding affective factors (Simons, al., 1999). Simons et al. (2007) highlighted 2002). Based on these concepts, we pro- that BI influences organizational commit- posed the following hypothesis: ment. Simons and McLean Parks (2000) also found that manager BI is correlated to Hypothesis 1. Behavioral integrity has organizational commitment and employee a significant positive influence on af- trust in managers. Folger and Konovsky fective commitment. (1989) and Meyer and Allen (1997) contended that perceptions of justice are cor- The Relationship Between Behavioral In- related to organizational commitment. Si- tegrity and Charismatic Leadership mons et al. (2007) further reported that the variables mentioned previously exhibit a Simons (2002) asserted that BI repre- correlation with BI. Furthermore, they sents the perception patterns regarding highlighted that manager BI is correlated managers’ words and deeds, which easily with trust in management, satisfaction with influence employees. However, BI differs supervision, interpersonal justice, proce- from the characteristic bases allocated to dural justice, commitment, compensation managers (Shore et al., 2004). Previous satisfaction, benefits, the work tasks, and studies have regarded integrity-inclined coworkers. construct as synonymous with reliability and honesty (Butler & Cantrell, 1984; BI also influences numerous aspects, Yukl & Van Fleet, 1992). When managers including trust, interpersonal justice, or- attempt to build charismatic images, their ganizational commitment, satisfaction, and behavioral performance is important. Most

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studies related to charismatic leadership aelis et al. (2009) contended that the con- have emphasized the psychological per- cept of charismatic leadership differs from ceptions (House, 1977) and leader charis- traditional leadership theories. For subor- ma (Jung & Sosik, 2006) that causes fol- dinates, charismatic leadership focuses on lowers to identify with the core vision of affection and value and the importance of managers (Jacobsen & House, 2001). identifying with the symbolic and mean- Huang et al. (2005) indicated that the spe- ingful behaviors of leaders. Guided by cific types of leadership involve concrete manager behavior, employees’ affection and observable behaviors. For example, toward the organization can be enhanced. leaders can successfully motivate follow- Bass (1997) stated that individual charis- ers to implement internal changes. matic leadership behavior can prompt followers to develop intense affective at- Therefore, charismatic leaders may tachments, exert extra effort, and exhibit significantly influence followers and high levels of performance that benefit the prompt transforms in their behavior. organization. Through their behaviors and actions, charismatic leaders can invigorate their subor- In previous studies, many scholars dinates to demonstrate higher goal and believed that charismatic leadership in- purpose fulfillment (Shamir et al., 1993; volved symbolic and meaningful behav- Dvir et al., 2002). Leaders use a diffusive iors, such as task meaning, conceptual val- method and substantial social influence to ue promotion, and extensive vision. Con- communicate their beliefs and behaviors sequently, charismatic leadership influ- (Weber, 1947; House, 1999). Based on the ences the affection and identification be- perspective of charismatic leadership pro- tween leaders and subordinates, including posed by Bass (1997) and House (1999), the aspects of emotional attachment, trust Peterson and Seligman (2004) highlighted in the leader, motivation stimulation, and that positive psychology and practical increased self-efficacy (Shamir et al., leadership can enhance the significance of 1993; Conger & Kanungo, 1998; House et value perceptions and transform ideas to al., 1999). In addition, Shamir et al. (1998) actions. In summary, we infer that em- indicated that charismatic leadership is ployees first develop trust in managers be- positively correlated with employee identi- fore they consider manager behavior. Sub- fication and unit dependency. Charismatic sequently, the employees identify with and leadership is also correlated to social iden- internalize the perspectives and visions of tity, team dependency, and the mainte- managers. Based on the concepts dis- nance of relationships between members; cussed above, we proposed the following thus, it contributes to members’ organiza- hypothesis: tional commitment. Kets de Vries and Mil- ler (1985) also indicated that charismatic Hypothesis 2. Behavioral integrity has leaders can evoke an emotional response a significant positive influence on in followers. Based on this discourse, this charismatic leadership . study proposed the following hypothesis:

The Relationship Between Charismatic Hypothesis 3. Charismatic leadership Leadership and Affective Commitment has a significant positive influence on affective commitment. Charismatic leaders use their relationship with subordinates to demonstrate an optimistic attitude and challenge una- chieved targets (Thompson, 2000). Mich-

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The Relationships Among Behavioral In- The primary participants of this study tegrity, Charismatic Leadership, and Af- were employees of an international auto- fective Commitment motive company located in Taiwan. A questionnaire survey was administered to Gore (1978) highlighted that charis- participants who were selected using pur- matic leaders can resolve the negative per- posive sampling. The official question- ceptions of subordinates and have a ten- naires were distributed to employees of the dency to develop positive and concrete case company located in major cities relationships with their subordinates throughout northern, central, and southern (Waldman et al., 2001). Conger and Taiwan. Kanungo (1998) asserted that charismatic leadership and charisma facilitate the iden- Before the questionnaires were dis- tification of core leadership values. Subse- tributed, the items included in the ques- quently, leaders that demonstrate charis- tionnaires were explained to the respond- matic characteristics possess the excep- ents via telephone calls and personal visits. tional ability to influence followers and Thus, the researchers ensured that the re- develop leader-subordinate relationships. spondents were fully aware of the questionnaire content and consented to partici- A number of scholars have indicated pation. These questionnaires are imple- that charismatic leadership is a value con- mented to determine the actual correlation gruence of collective thinking and charis- among variables, Thereby enhancing the matic leaders can significantly increase validity of this study. followers’ social identity and group dependency (Shamir et al., 1993; Conger et Measures al., 2000). Therefore, charismatic leaders attain high appraisals and express and reg- This study used a seven-point Likert ulate their and others’ emotions (Adams, scale ranging from 1, which denoted 1963; Blau, 1964; Gergen, 1969; Homans, strongly disagree , to 7, which denoted 1974). Accordingly, charismatic leadership strongly agree . Negatively worded items used in organizational management is con- were scored in reverse. The subjects were sidered perceived benefits of employees. instructed to answer each item by selecting Based on social exchange theory, employ- an appropriate score based on actual situa- ees perceive motivation by exchanging this tions. After collecting the participants’ re- benefit. Thus, we contended that when sponses, the average scores and standard employees perceive their managers to pos- deviations were calculated. We adopted sess high BI, demonstrating manager char- SPSS 12.0 and AMOS 7.0 for statistical ismatic leadership behavior can increase analysis of the scale items. employees’ affective commitment to the manager or organization. As such, this Behavioral Integrity. study proposed the following hypothesis: This study adopted the definition of Hypothesis 4. Charismatic leadership BI proposed by Simons et al. (2007); that has a mediating effect on the relation- is, BI refers to the alignment between ship between behavioral integrity and managers’ words and deeds and is a sub- affective commitment. jectively perceived intrapsychic phenomenon. When defining BI, the scale estab- Methods lished by Simons et al. (2007) was also referenced. Examples of the items include Participants and Procedure “my supervisor fulfills his/her promises,”

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“my supervisor implements by his/her ide- and Strasser (1984), Jenkins and Thomlin- als,” and “my supervisor abides by his/her son (1992), Clugston (2000), Meyer et al. own instructions,” for a scale comprising a (2002), Yousef (2002a), and Boles et al. total of eight items. Higher scores for this (2007), job satisfaction and affective scale indicate that employees perceive commitment are positively correlated. This greater BI characteristics in their supervi- study used job satisfaction as a control var- sors. iable. Adopting the perspective of Christen et al. (2006), job satisfaction was defined Charismatic Leadership. as a joyous and positive emotional perception induced by a task or other perceptive Based on Conger and Kanungo means. This study employed the scale es- (1987), this study considers charismatic tablished by Hackman and Oldham (1975). leadership to be beneficial in understand- Examples of the items include “I feel satis- ing the effects of religious, political, and fied in a regular working environment,” “I social leaders. The charismatic leadership advise my friends to secure a job similar to scale developed by Bass and Avolio (2000) mine,” and “I dread going into work in the was adopted as the research instrument. morning,” for a scale comprising a total of Examples of the items include “since em- three items. Higher scores for this scale ployment, my ideals are more closely re- indicate better employee job satisfaction. lated to those of my supervisor,” “I obey my supervisor because he commits to his Role Conflict and Role Overload. vision,” and “I obey my supervisor because we have similar visions,” for a scale According to Stevens et al. (1978), comprising a total of four items. Higher Singh et al. (1994), Yousef (2002b), and scores for this scale indicate that employ- Jones et al. (2007), role conflict and role ees perceive their supervisor to be a char- overload are negatively correlated to affec- ismatic leader. tive commitment. Therefore, role conflict and overload were also employed as con- Affective Commitment. trol variables; an explanation is provided below. Adopting the perspective of Vanden- berghe and Bentein (2009), this study de- Referencing Christen et al. (2006), we fined affective commitment as the percep- defined role conflict as conflicts between tion of identifying with, being involved in, the levels, targets, goals, and responsibili- and emotionally attached to the organiza- ties of two parties. This study used the tion. The scale established by Meyer et al. scale established by Lusch and Serpkenci (1993) was employed in this study. Exam- (1990), which included the following three ples of the items include “I respect my su- items: “you must make decisions in work pervisor,” “my supervisor is significant to that influence your personal life,” “you me,” and “my supervisor and I are proud feel that you are not liked or recognized by of our positions,” for a scale comprising a your coworkers,” and “when working, you total of six items. Higher scores for this perform actions that contradict your judg- scale indicate that employees possess sub- ment.” Higher scores for this scale indicate stantial affective commitment to the su- greater employee perceptions of role con- pervisor. flict.

Control Variables Adopting the perspective of Fineman and Payne (1981), role overload was de- Job Satisfaction. According to Bateman fined as excessive work tasks that exceed

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personal skills, knowledge, and capacity. construct. Results indicated that the good- This study adopted the scale established by ness-of-fit ( χ2 = 84.924, DF = 47, GFI = Lusch and Serpkenci (1990), which in- .967, AGFI = .943, IFI = .984, CFI = .983, cluded the following items: “a heavy RMR = .026) demonstrated better than that workload prevents you from completing of single-factor. Therefore, CMV was not a your task within the allocated time,” “you problem in this study. must consider how to adequately complete your workload,” and “you feel that your Reliability and Validity Analysis workload negatively impacts your family life,” for a scale comprising a total of three Reliability Analysis. items. Higher scores for this scale indicate greater role overload perceived by em- This study used Cronbach’s reliability ployees. coefficients and CFA to examine the composite reliability (CR) of latent variables Results and explore the reliability of research constructs. In the behavioral integrity scale, Descriptive Statistics Cronbach’s was .964. In the charismatic leadership scale, Cronbach’s was .874. In Data were collected for this study by the affective commitment scale, Cron- distributing questionnaires to employees of bach’s was .924. In the job satisfaction an international automotive company lo- scale, Cronbach’s was .856. In the role cated in Taiwan. A total of 500 question- conflict scale, Cronbach’s was .858. In the naires were distributed. Employing ques- role overload scale, Cronbach’s was .937. tionnaire tracking and reminders, a total of All of the above Cronbach’s were over the 481 completed questionnaires were re- threshold of .70 suggested by Nunnally turned, for an overall retrieval rate of 96%. (1978). After excluding 54 invalid questionnaires, a total of 427 effective questionnaires were In terms of CR and average variance retained, for an effective retrieval rate of extracted (AVE), Table 1 demonstrates that 85%. This figure suggests that the sample the CR of each dimension was above .859 data is representative. and AVE was above .671. These values were greater than the threshold of .70 and Common Method Variance (CMV) .50, respectively, suggested by Hair et al. (2009, 2010). As a result, the internal con- Samples were measured by conducted sistency of the variables used in this study exploratory factor analysis (EFA) accord- is within the acceptable range. ing to Harman’s single-factor method (Podsakoff et al., 2003). Results demon- Validity Analysis. strated that 6 factors could be extracted and that the explanatory power of the first Convergent validity and discriminant factor did not reach 50%. Therefore, CMV validity were both examined. To measure was not a problem in the sample used for convergent validity, this study adopted this study. Results showed that not all of Anderson and Gerbing’s (1988) proposed the item’s loading reached the significant standard, Bagozzi and Yi’s (1988) CFA level of .5. Also, the observed single-factor standard, and Gefen’s et al. (2000) good- CFA value ( χ2 = 1742.639, DF = 317, GFI ness-of-fit indicators. For all the con- = .682, AGFI = .605, IFI = .708, CFI = structs, behavioral integrity, charismatic .707, RMR = .073) was poor. Therefore, leadership, affective commitment, job sat- CFA was conducted by separating each isfaction, role conflict, and role overload,

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GFI, NFI and CFI were all higher than .90. ured using the standard proposed by For- RMSR were all lower than .05. Also, all nell and Larcker (1981): two dimensions factor loadings reached significance level, possess discriminant validity if the correla- CR values were all higher than .70, and tion coefficient of the two dimensions is AVE were all higher than .50. Therefore, smaller than the square root of AVE for the measurement model of behavioral in- each dimension. Table 1 indicates that all tegrity, charismatic leadership, affective dimensions fulfill the discriminant validity commitment, job satisfaction, role conflict, standard proposed above. This result and role overload possessed convergent demonstrates good discriminant validity validity. Discriminant validity was meas- for all dimensions.

Table 1. Discriminant Validity and Correlation Coefficient.

Construct BI CL AC JS RC RO CR AVE BI .875 .963 .766 CL .857** .865 .882 .749 AC .861** .846** .827 .926 .684 JS .721** .748** .731** .819 .859 .671 RC -.545** -.558** -.498** -.447** .852 .869 .726 RO -.491** -.528** -.468** -.520** .841** .913 .937 .834 Mean 4.831 3.624 4.565 3.472 3.588 3.446 Variance .608 .351 .648 .241 .295 .190 Cronbach’s α .964 .874 .924 .856 .858 .937 BI = behavioral integrity; CL = charismatic leadership; AC = affective commitment; JS = job satisfaction; RC = role conflict; RO = role overload; CR = composite reliability; AVE = average variance extracted. ** p ＜ .01.

cantly positive influence on charismatic Hypothesis Testing leadership ( β = .613, p < .001) with an F value of 372.064 ( p < .001). Thus, Hy- This study used hierarchical regres- pothesis 2 is supported, further indicating sion analysis to explore the influence of BI that when participants perceive high su- on affective commitment, as well as the pervisor BI, the supervisor tends to mediating effect that charismatic leader- demonstrate charismatic leadership behav- ship has on the relationship between BI ior. and affective commitment. The analysis results are shown in Table 2. Model 2 is Model 4 shows the regression analy- the regression analysis of the influence sis of the influence that charismatic leader- that BI has on affective commitment. The ship has on affective commitment. The results show that BI has a significantly results show that charismatic leadership positive influence on affective commit- significantly and positively influences af- ment ( β = .682, p < .001) with an F value fective commitment (β = .657, p < .001) of 350.444 ( p < .001). Thus, Hypothesis 1 with an F value of 301.471 ( p < .001). is supported, suggesting that when partici- Thus, Hypothesis 3 is supported, suggest- pants perceive high supervisor BI, their ing that when participants perceive their affective commitment increases. Model 3 supervisors to possess high levels of char- shows the regression analysis of the influ- ismatic leadership behavior, their affective ence that BI has on charismatic leadership. commitment to the supervisor and organi- The results show that BI exhibits a signifi zation increases. Model 5 shows the analysis results the interactive effects of BI and The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 162

affective commitment with the addition of potheses 1, 2, and 3, Hypothesis 4 is also charismatic leadership. The results indicate supported. The demonstration of charis- that after adding charismatic leadership to matic leadership behavior by supervisors BI, the positive correlation between BI and has a partially mediating effect on the rela- affective commitment declined from .682 tionship between supervisors’ BI and em- to .473, with an accumulated R2 of 79.1% ployees’ affective commitment (Baron & and an F value of 325.398 ( p < .001). Ac- Kenny, 1986). The hypothesized model cording to the statistical results for Hy- were shown in Figure 1.

Table 2. Hierarchical Regression Analysis Result.

Model 1 Model 2 Model 3 Model 4 Model 5 Dependent Variables AC AC CL AC AC Control Variables JS .665*** .233*** .255*** .242 .146*** RC -.335*** -.041 -.104* -.094 .006 RO .160** .023 -.007 .084 .025 Independent Variable BI .682*** .613*** .473*** Mediator Variable CL .657*** .342*** R2 .575 .766 .776 .737 .791 △R2 .191 .162 .025 F 194.226*** 350.444*** 372.064*** 301.471*** 325.398*** BI = behavioral integrity; CL = charismatic leadership; AC = affective commitment; JS = job satisfaction; RC = role conflict; RO = role overload. *p ＜ .05; ** p ＜ .01; *** p ＜ .001.

0.682***

Behavioral 0.613*** Charismatic 0.657*** Affective Integrity Leadership Commitment

Figure 1. Hypothesized Model. *** p ＜ .001.

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Discussion to employees, which enhances the affective attachment that subordinates have for The results supported all the hypothe- the supervisor. ses proposed in this study. Detailed analysis of the results is provided below. In summary, the methods employed by supervisors to manifest their BI and ex- Hypothesis 1, that is, BI has a signifi- ecute timely demonstrations of charismatic cant positive influence on affective com- leadership behavior to thus enhance em- mitment, is supported. Therefore, if an in- ployees’ affective commitment to supervi- ternal supervisor of an automotive compa- sors and the organization and improve the ny can achieve an alignment between overall organizational performance is wor- their words and deeds, employees’ affec- thy of further consideration by automotive tive commitment to the supervisor and the companies experiencing global competi- organization can be increased, which re- tion. In addition, although previous studies duces the likelihood of employees exhibit- have emphasized the influence that BI has ing irrational behaviors. These results are on affective commitment, few studies have consistent with those reported by Simons explored the mechanism that mediates the et al. (2007). relationship between BI and affective commitment. Hypothesis 2 (behavioral integrity has a significant positive influence on This study used the perceptions of charismatic leadership) proposed in this supervisor BI held by employees of an au- study is supported. The results indicate tomotive company as antecedents of char- that by achieving word-deed alignment in ismatic leadership. Employee perceptions their ideals and promises, the internal su- of supervisor BI and personality character- pervisors of an automotive company can istics were also observed to assess whether demonstrate ideal exhibitions of their indi- employee perceptions of supervisors’ char- vidual beliefs and unique behavior based ismatic leadership behavior influence their on their value perceptions and code of affective commitment and attitudes. The conduct. empirical results of this study can effectively explain the theoretical model of su- Hypothesis 3 (charismatic leadership pervisor BI characteristics, charismatic has a significant positive influence on af- leadership behavior, and employee affec- fective commitment) proposed in this tive commitment. This is the primary con- study is supported. The results indicate tribution to related theories provided by that personal characteristics, value percep- this study. tions, and the behavior of supervisors employed at an automotive company can cul- Practical Implications tivate the affection and confidence of subordinates, which support the results report- When an organization’s employees ed by Bass (1997). Hypothesis 4, that is, perceive that their supervisors possess BI charismatic leadership has a mediating ef- characteristics, the implementation of su- fect on the relationship between behavioral pervisor vision and promises made to em- integrity and affective commitment, is also ployees can increase employees’ affective supported. The results indicate that if the commitment to supervisors. Regarding en- internal supervisors of an automotive terprise development, supervisor leader- company can achieve word-deed align- ship is a critical element that significantly ment in their thoughts and promises, they influences organizational interactions and can exhibit amicability and trustworthiness performance. Therefore, supervisors must

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achieve an alignment between their words tics of supervisors, and thus develop a high and deeds within the organization based on affective attachment to supervisors and the their personal beliefs, and endeavor to organization. Consequently, employees gradually fulfill their promises. By demon- may be willing to devote additional effort strating amicability and trustworthiness to to increasing their performance, or even employees, supervisors can enhance the improving the overall organization per- affective attachment of their subordinates. formance, thereby establishing the poten- Charismatic leadership highlights the es- tial for thriving organizational develop- tablishment of leaders’ vision, mission ob- ment in collaboration with supervisors. jectives, and innovative concepts. These The managers of automotive companies characteristics not only cultivate the trust, must consider the recruitment of suitable respect, and admiration of subordinates, leaders and carefully assess their person- but also motivate them to pursue the reali- ality characteristics. zation of personal and organizational goals. We contended that when supervi- The automotive industry has experi- sors exhibit BI, their charismatic leader- enced increasingly severe external compe- ship behavior prompts employees to de- tition and threats in the globalized world of velop affective commitment, increasing the twenty-first century. To survive and supervisors’ overall influence compared to develop, automotive companies must that of supervisors without charismatic learn, reform, and innovate consistently; leadership traits. otherwise, they cannot distinguish themselves in a rapidly changing and competi- Moreover, enterprise supervisors tive mar-ket environment. The results of must have a profound understanding of this study indicate that for an automotive their organizational environment and indi- company, supervisor BI positively influ- vidual employee characteristics. In addi- enced employees’ affective commitment tion to timely demonstrations of confi- (.682). This finding suggests that the influ- dence to cultivate employee trust, supervi- ence of supervisors’ word-deed alignment sors must serve as a behavioral example on subordinates’ affective dependency and for employees. Supervisors who exhibit attachment to supervisors should be priori- charismatic leadership characteristics tized in response to current global compe- should personally execute the standard tition. The results also showed that super- tasks of an organization and share their visor BI positively influenced charismatic vision and specific goals for future devel- leadership behavior (.613), which positive- opment with their subordinates. These su- ly influenced employees’ affective com- pervisors must also confidently announce mitment (.657) and had a partially mediat- the events and items set to be completed in ing effect on the relationship between BI the future to increase the shared value of and affective commitment. the group, thereby motivating employees to actualize the enterprise vision together. Based on the results of this study, if When enterprises or organizations recruit supervisors can exhibit BI by achieving an supervisors, they must fully understand alignment between their words and deeds whether the applicant possesses BI and the that increases their subsequent charismatic unique characteristics of a charismatic leadership behavior to effectively influ- leader, in addition to analyzing the appli- ence employees and improve their affec- cants’ suitability. In such situations, the tive commitment to them and the organiza- recruiters hope that the employees of an tion, the organizational performance can organization can be influenced by the be improved, while cultivating a reputation words, deeds, and leadership characteris- as an excellent enterprise leader. Supervi-

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sors can also exploit the performance man- pervisor behavior and employee attitudes agement system to motivate employees and emotions could not be sufficiently un- and improve their working efficiency. By derstood. The devised questionnaire was establishing a group vision and exhibiting presented as a 7-point Likert scale. The charisma, supervisors’ interpersonal ap- advantage of such a scale is that it prevents peal perceived by the employees can be respondents from providing neutral re- enhanced. By actively and closely cooper- sponses. However, the disadvantage is that ating with their subordinates, supervisors the respondents tend to be influenced by can increase organization members’ identi- subjective perceptions and retrospective fication with supervisors and prompt mem- factors, resulting in the scale information bers to rapidly reach a consensus, facilitat- not matching the actual situation. This ing the implementation of organizational consequently affects the scale validity and goals. In the long-term, this system is ex- reliability. pected to generate synergies that exceed expectations. Moreover, because the scales for measuring various constructs referenced in Limitations and Future Research this study were developed by foreign scholars, internal and external interference, Limitations. such as differing national cultures, cus- toms, industry and organizational climates, This study used employees of an in- cognition, and temporal and spatial back- ternational automotive company as the grounds, may distort the overall measure- participants. However, because of factors ment results during actual applications. such as the multinational enterprise system and cultural aspects, samples were not col- Future Research. lected from domestic automotive companies located in Taiwan. Therefore, the re- Because the participants were em- sults derived from the questionnaire are ployees of foreign automotive companies only relevant to the foreign automotive in Taiwan, which features an organization- companies located in Taiwan and cannot al culture that differs from that of local be extended to the local automotive indus- enterprises, and the questionnaires were try or other industries in Taiwan. Further- only distributed in the major cities of Tai- more, the participants were employees of wan, the results cannot completely and foreign automotive companies located in reasonably explain the perceptions and the major cities of northern, central, and thoughts of employees regarding automo- southern Taiwan. Surveys were conducted tive companies in Taiwan. with foreign automotive companies located in non-metropolitan areas. The research Subsequent studies can expand the participants did not represent all employ- types of participants and extent of research ees of foreign automotive companies in to include other industries and a wider Taiwan. questionnaire distribution to enhance the depth and scope of the research. Conse- This study adopted cross-sectional quently, the applicability and generaliza- data to establish an empirical foundation, bility of research results can be improved. and only a single-time point was extracted. Furthermore, unlike this study, where However, because studies regarding BI, cross-sectional data was used to establish charismatic leadership, and affective com- an empirical foundation, future studies can mitment require long-term observations, adopt longitudinal methods to collect data the influence of changes in long-term su- (Rindfleisch et al., 2008) and conduct

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long-term tracking surveys to determine responses were not explored. Current stud- the essence of the causal relationship be- ies regarding the mechanism mediating the tween BI and affective commitment. relationship between BI and affective commitment should be allocated with greater Furthermore, this study focused on attention and consideration. Therefore, fu- the relationship between BI, charismatic ture scholars can adopt qualitative research leadership, and affective commitment, and methods, such as in-depth interviews and employed a quantitative questionnaire to observation methods, to further explore measure differing variables. Thus, the par- other mediating variables. This approach ticipants were required to complete ques- may improve the theoretical and empirical tionnaires based on their subjective per- research applications. ceptions, although the implications of their

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LEISURE BEHAVIOR IN SPORTS TRAINING ON PSYCHOLOGICAL SKILL AND REFEREEING PERFORMANCE

Hsiang-Wei Chien Office of Physical Education Affairs, Taipei Medical 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]

Yu-San Ting Department of Hospitality Management Nan Jeon University of Science &Technology, Taiwan R.O.C. [email protected]

Chun-Te Wu Department of Leisure & Tourism Management Shu-Te University, Taiwan R.O.C. [email protected]

Abstract

The rationale behind this study is to investigate the effect of sports training behavior based on psychological skills training and refereeing performance. Two volleyball referees are recruit- ed from the Taiwan volleyball association to undergo psychological skill training for a period of half a year. This training includes rational emotive therapy, self–talk, stop negative thinking, self-awareness as well as breath control. The researcher collected data using structured interviews and questionnaires. The findings of the study were as follows; the two referees self-assessed themselves and improvements noted in concentration and self-confidence after

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the tournament, additionally the referees' anxiety level dropped during the tournament. The referee considered their refereeing performance to have significantly improved and the referee committee confirmed the same through observation.

Keywords: Leisure Behavior, Psychological skill training, Volleyball referee, refereeing performance

Introduction examine the psychological skill training to assist referee improving performance and Research Motivation & Professional psychological ability. Referees should have Development a passion for the game and be willing to make a sacrifice as the game decreases their There are five critical parts of pro- leisure and family time. fessional development: psychological quality, professional self-development, game Refereeing work is not easy, as the management, physiological quality as well referee may bow down to pressure from as refereeing enforcement capability. Ac- coaches, players, or even spectators, it is cording to Hsieh (1999), the only way to significant that the referee remains firm to improve professional development is by resist such pressure. The referee also has the building on refereeing experience. He fur- responsibility of coordinating and fully co- ther adds that professional development is operating with other referees and maintain- the lasting professional training and uses the ing a good relationship and balanced com- professional knowledge on capacity build- munication between the coaches and players ing. Enforcement ability in refereeing in- to keep the competition worthwhile. volves understanding the rules, hand signals, resolute attitude, response to listening and Physiological quality includes physi- watching, using the whistle, and knowledge cal appearance and fitness; a referee must be of tactics and skills. The referee must under- well behaved and neat in clean official uni- stand the rules of the game, professional tac- form to signify the correct image. All games tics and skills in order to make sound judg- are physical and as a result the referee ment. should be fit and have the spirit and energy to manage the game. Games management Psychological quality signifies the requires adequate preparation; score control- spirit of the referee which comprises loyalty ling, time scheduling, and cooperation with for the game, passion, and professional eth- other officials to run the game smoothly. It’s ics of the game, interpersonal relationships, the responsibility of the referee to make ad- correct, fair and firm. The researcher will equate preparation before the game to

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observe the character of individual players have active and positive competitive psy- or team. chological capability. These professionals use methods such as imaginary training, co- Self-development involves advanc- hesion, concentration, pressure process, and ing the referee knowledge of rules of the self confidence (Anderson, 1999; Crocker & game as professional skills and tactics rapid- Graham 1995). Several scholars and experts ly change overtime. have indicated that referee, players, and coaches can increase their performance after According to Chen (2003), the most long-term and serious organized psycholog- visible shortage in refereeing is the lack of ical skill training (Laguna & Ravizza, 2003; confidence amongst the referees. All refer- Burton & Raedeke, 2008). ees irrespective of their level and experience get some sort of pressure from the players, According to Weinberg and Comar coaches, or fans. Chang (2008) argues that (2004), psychological skill training is very less experienced and international referees helpful for referee performance as well as experience more pressure as they try to improving their confidence. In highly com- avoid any mistake. Referees feel this pres- petitive matches, the most important thing sure mainly because of lack of confidence for any referee is the psychological condi- which may significantly affect the outcome tion and not his or her physical fitness or of the game. In some cases the referee may skills. According to Chen (2002), referees be affected by silly behaviors from the play- make mistakes not because they are inexpe- ers, coaches, or the fans. rienced but because they lack psychological training. He argues that it is the psychologi- Psychological Skill Training (PST) cal anxiety and pressure that result in mistakes or a wrong call during the game. To Previous research has shown that boost referee motivation, increase concen- elite players encounter psychological prob- tration and self-confidence, and reduce anx- lems particularly during finals that affect iety, sports psychologists recommend that their performance. Chou (1998) argues that training is administered in cognitive and the performance of a professional player is physical aspects (Ji, 2000; Qui & Sheng, not affected by the physical or skill factor 2001). Both referees and players experience but by the psychological factor of the play- anxiety and pressure when in playing, psy- er. Williams and Krane (2001) revealed that chological training helps reduce this pres- the psychological condition of a player is sure as well as anxiety (Wang, 2008). the most critical factor that affects sport performance. To deal with this problem and Psychological training involves edu- improve performance, psychological experts cation, motivation, adversity and pressure assist the players as well as the coaches to adaptation, self-confidence, and concentra- The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 176

tion (Qui, 2001). Butler and Hardy (2002) H1: There is a positive impact of psycholog- used a theory of players' psychological skills ical skill training on increasing psychologi- training to assist players in minimizing the cal ability. competition pressure. Wang (2001) pointed out that the refereeing skills depend on both 2. To investigate the impact of psycho- the physical and psychological factors and logical skill training on referee’s per- both play a critical role on refereeing performance. formance. Psychological skill training is employed in referee development; psychologists use this type of training to assist H2: There is a positive effect on referee per- both the referees and athletes to have active formance after psychological skill training. and positive ability to face every game. To enforce psychological skill training, sport Limitation of Research psychologists must first understand the referee’s psychological ability. This study primarily compares the psychological skill training with the referee- Purpose of Research ing performance but doesn’t consider the innate psychological characteristics as well Main Purpose as personal values. The other key drawback of this research is that it doesn’t consider the • Evaluate the impact of psychological referee’s age and gender. skill training on refereeing perfor- Definition of Terms mance

• Examine the effects of psychological Psychological Skill Training: A skill training on referee’s match psy- strict and long-term organized psychological training which helps improve sport perfor- chological ability. mance.

Research Questions Psychological Ability: A set of train- able mental methods and abilities held to 1. To examine the effect of psychologi- strengthen performance and learning. The cal skill training on referee’s psycho- basic psychological skills include self-talk, concentration, relaxation, and goal-setting. logical ability.

Rational Emotive Therapy: A type of therapy in which an athlete, in the case of this study, is asked to get rid of irrational The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 177

assumptions and attitudes in order to effec- Professional referees need to devel- tively handle pressure. op psychological attributes such as concentration, passion, mental fortitude, and moti- Self-Talk: the practice or act of talk- vation to manage the game well. Psycholog- ing to oneself either mentally or silently and ical ability includes pressure process and can sometimes be aloud. hardship adaptation, teaching, motivation, self-confidence, and concentration. Hardy, Jones, and Gould (2006) note that simula- Literature Review tion training can be employed to assist in pressure management and the main reason is Psychological Ability to help the athletes develop anti-pressure strategies. Motivation can be defined as in- Psychological ability according to tensity and direction of personal effort, in- Chen (2002) includes self-confidence, moti- tensity refers to the number of times while vation, and arousal level control. All of direction signifies the looking for the right them require organized practice for a num- method. Often experienced referees have a ber of times just like any other form of higher motivation level compared to inexpe- physical training. The main purpose of psy- rienced referees. Most of the scholars have chological skill training is to improve sport defined self-confidence as the perceived performance and increase psychological ability of an individual to finish a task suc- ability of referees and athletes. Orlick cessfully or not. According to Bandura (2006) argues that professional athletes and (2007), there are several sources of self- referees should learn how to develop their confidence which include experience, cogni- psychological and physical status. He fur- tive arousal, excitement, and achievement. ther adds that when one is aware of his best When self confidence is raised, the perfor- or worst performance, he or she can develop mance of the referee or athlete improves. certain feelings that relate to their performance. Some of the attributes of best sport Psychological Skill Training performance include; not worrying about the outcome, focusing early, self-confidence, Sports experts argue that athletes, awareness of rhythm change, and effortless coaches, and referees can improve their per- performance. According to Nie (2000), psy- formance if they undergo psychological chological ability has a positive relationship training. Williams and Krane (2001) argue with sport performance, he argues that when that it is indeed the biggest factor that de- athletes adjust to pressure, concentrate bet- termines the referee performance in games. ter and set goals, they are more likely to per- Psychological training helps the referee to form well. learn how to rise above refereeing pressure. A referee can minimize the anxiety of the The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 178

game by calming down and getting rid of skills training used on female volleyball mistakes or wrong calls that result from players’ somatic and cognitive anxiety. The pressure. As explained above in highly findings of this study revealed that psycho- competitive matches, the most critical factor logical status of female players comes from that determines the referee performance is somatic and cognitive anxiety factors. Ac- his or her psychological status and not the cording to Chien (2009), the cognitive anxi- physical fitness or skills. Antonina, Mau- ety are caused by negative self-fulfilling rizio, and Tulio (2004) undertook a test on foretell, lack of concentration, and self- con- 10 baseball players aged 19 to 26, their re- fidence. Somatic anxiety is the rapid heart sults indicated that those who had under- rate as well as the palm sweating. The find- gone psychological skills training were less ings showed that getting rid of the negative anxious before the match and performed thinking amongst the female volleyball better. On his part, Lian (2005) surveyed 14 players promotes their concentration and high school tennis players and found out reduces the negative thoughts during the that those who had undergone the psycho- match. Psychological skills training can help logical skills training performed better and the players to relax their nerves and re- had a reduced heart rate. instruct normal thought. Talking to them helps in boosting their self-confidence Previous research indicated that whereas breathing control training helps most of the sports psychologists believed them minimize somatic anxiety. that self-awareness, emotive therapy, breath control as well as self-talk helped athletes A survey on the movement perfor- reduce anxiety and pressure (Chang & Mao, mance and psychological skills of collegiate 2004). Lee (2009) conducted a study to ex- basketball players examined the impacts of amine the effects of psychological skills positions, experiences as well as training training on Taekwondo athlete’s perfor- periods on their performance and psycho- mance and psychological ability. The find- logical skills. The findings of the research ings revealed that those participants who showed that there was a huge disparity be- were trained reported improved concentra- tween coping with adversity and peaking tion and confidence after the match, in addi- under pressure depending on the experience tion, their level of anxiety decreased during of the players. Further, the survey showed the game. The athletes also reported that that different training periods to a great ex- their performance in the games had signifi- tent affected dealing with adversity and cantly improved and their teammates and pressure as well as the players’ motivation. coach confirmed this. In conclusion, the study indicated that the results could be of benefit to basketball Another study was carried out to de- players and coaches, recommending that termine the coping tactic of psychological psychological skills training should be The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 179

included in other training to improve play- calls or mistakes that may affect the caliber er’s performance. Yi (2008) carried out a of the game or even the results. Psychologi- research on stress management and coping cal skills’ training therefore is very im- tactic of Taiwan professional tennis players. portant in helping the referees adapt to the He found out that the key source of stress of pressure. these players wasn’t failure to break their records but sponsorship. Stress prior to the Method and procedure game arises from their ranking, significance of the match, and poor condition. However, Description of Research Object stress during the match arises from oppo- nents, prize money, their self condition, and According to Patton (1998), qualita- referees. Professional players must always tive research may have several or a single cope with the competitiveness of the game, object. The researcher chose global volley- fight for their record as well bear their fans ball referee as the research objects in this expectations. Hence, methodic and system- research. Previous studies have shown that atic psychological skill training is very cru- referees who possess over a decade of refer- cial to performance. eeing experience have a higher refereeing evaluation than their counterparts who have Summary of Literature Review less experience. International referees are categorized according to the years of expe- According to the above review of rience with a national A referee having the psychological skills training literature, no highest while a national C has the least. In a matter the sport, athletes need psychological bid to examine the professional develop- training before competitions. Studies have ment of referees, the researcher’s target shown that referees and athletes who under- population was the international volleyball go psychological training exhibit improved referees in Taiwan. Further the sample pop- performance as they are in a position to ulation included those referees who had cope with adversity, pressure, and increase over 10 years of experience who hoped the their self-confidence level. In the recent psychological skill training could help im- past, more and more players, coaches, and prove their performance. referees are seeking the help of sport psychologists to improve their performance. Measurement tool Psychological skills training as indicated by most of the researchers helps in improving The researcher used psychological the referees and players psychological abil- skill training scale to assess the impact of ity. Referees work under intense pressure the training on the referee performance. A from the players, coaches, and fans, if not test was administered before the psycholog- managed; this pressure may lead to wrong ical skill training; the training lasted for a The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 180

period of six months. After the training, all Breath-control the referees will be subjected to a second test and a third test will be administered af- According to Lee (2007), smooth ter the Asian volleyball competition. The breath ensures that that the blood has findings of all these tests will be presented enough oxygen to provide the needed ener- in descriptive statistics to help comprehend gy. However, as a result of strong emotive the difference of psychological status of the reaction, anxiety, and pressure, the referee’s referees after the training. The researcher breathing system is interfered with. There- used the psychological skill training scale fore referees need appropriate respiratory which has five key factors namely concen- skills to minimize this avoidable reaction tration, motivation, education, pressure pro- while under pressure. Harris (2006) noted cess, and self confidence. After every tour- that a lot of referees don’t know how to con- nament, the researcher interviewed the ref- trol their breath and that while they are un- erees to know their psychological status dur- der pressure they undermine their perfor- ing the competition as well as review their mance because of the tension exerted on performance. An ordinal scale of 1-10 was their muscles. Nidefer (2008) argued that used to assess their concentration, self- abdominal breath helps referees focus on the confidence, and anxiety. game, concentrate, and overcome anxiety.

Research Procedure Rational Emotive Therapy

The study used Thomas (2000) ath- This type of therapy helps improve lete psychological skill training method the referees’ rational thoughts as well as which focuses on motivation, education, minimize personal anxiety. Rational emo- concentration, confidence, and pressure pro- tive therapy helps the referees face life posi- cess. The researcher interviewed the sam- tively through positive thinking. Referees pled referees during every volleyball match often experience negative thoughts that are and had consultations with them to establish caused by the pressure from the players, a good relationship with them. The first test coaches, and fans. When a referee starts was meant to identify the psychological sta- evaluating his or her psychological status, it tus of the sampled referee through inter- results to negative thinking that leads to views, psychological skill training scale, negative impacts (Ji, 1996). The perfor- observation, and the personal information. mance of a referee is often influenced by his The researcher looked at the five procedures or her thinking, particularly if the game is of psychological technique training which very competitive. Positive thinking helps the include breathe control, self talk, self referee to get rid of trepidation and anxiety. awareness, stop negative thinking, and rational emotive thinking. The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 181

Self-Talk by the researcher to further understand the referees. Weinberg and Gould (2007) state that self-talk influences on how the referees Result and Analysis feeling and behavior. They argue that the thoughts of the match don’t lead to anxiety The Effect of Psychological Skill Training however; how the referee interprets the on Referees Psychological Ability game determines the psychological reaction. Self-talk plays a significant role in emotion- This section discusses the impacts of al reaction, there are two types of self-talk: psychological skill training on the referee positive and negative. Positive self-talk psychological ability; the findings are pre- helps the referee to minimize the pressure sented both qualitatively and quantitatively. while negative self-talk increases doubt and The quantitative method compares the three anxiety (Gill, 2000). Sports psychologists tests administered to the referee and the recognize the fact that self-talk improves psychological status of the referee after the referee performance through anxiety control psychological training. The table below and pressure management. shows a summary of the three psychological scale tests of the first referee. Data process and analysis Figure 4.1 clearly shows that the five psy- According to Huang (2001), both chological factors have improved after the quantitative and qualitative research as well training. Education, confidence, and pres- as descriptive statists can be presented to- sure process got slight improvement while gether. Quantitative research is basically self confidence has the highest improvement used to test a theory, ascertain the fact, and followed by pressure and education respec- give descriptive statistics and the correlation tively. between variables. Qualitative research on the other hand is used to clarify as well as Table 4.2 below shows the psychological confirm the findings of quantitative re- skill training results of the second referee. search. The quantitative findings of this re- Just as in the first object, education, motiva- search were presented in descriptive statis- tion, concentration, and confidence showed tics discussing self-confidence, concentra- some significant changes. However, it is tion, motivation, education, and pressure important to note that pressure process process. The qualitative analysis of the re- doesn’t have significant changes. To further search used an ordinal scale to help under- understand the two referees’ psychological stand the psychological status of the refer- ability while under competition, the re- ees. It also involved the interview conducted searcher interviewed them after each game.

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An ordinal scale was used to measure the slowed down, the overall confidence of the scores of anxiety, concentration, and confi- referee was improving. dence of every tournament. The first referee, R1, refereed five tournaments, the first two Figure 4.4 shows that the concentration lev- games were international volleyball matches el of the referee improved from the first while the others were national volleyball tournament to the last, signifying the im- competition. Figure 4.3 below shows the portance of psychological skill training. confidence score for every tournament. The referee confidence as well as concentration level is improving and as per Figure Figure 4.3 shows that the confidence level 4.5, the anxiety level of the referee gradual- of the first referee improved significantly ly reduces with experience. after the first match. Although the score

Table 4.1

R1 First referee First test Second test Third test

Pressure process 3.55 4 4 Self-confidence 2.75 3.25 3.25 Concentration 3.75 3.5 3.75 Motivation 3.22 3.44 3 Education 3.6 3.6 4

Figure 4.1 Scores of R1 first referee on psychological skill training scale

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Table 4.2

R2 second referee First test Second test Third test

Pressure process 3.44 3.55 3.55 Self-confidence 2.75 2.75 4 Concentration 4.5 4 4.75 Motivation 3.55 3.22 4 Education 4.2 5 5

Figure 4.2 Scores of second referee on psychological skill training scale

Figure 4.3 The confidence score of the first referee (R1)

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Figure 4.4 Concentration scores of first referee

Figure 4.5 Anxiety score of first referee

The second referee participated in referee, the confidence level of this referee six tournaments, which the first three were increased significantly from the first to the national and the other three being interna- last tournament. Figure 4.7 clearly shows tional. Figure 4.6 below shows the referee that the concentration level of the referee confidence scoring during each tourna- improved particularly during the last three ment. Similar to the first tournaments.

Figure 4.6 Confidence score of second referee

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Figure 4.7 Concentration score of second referee

Figure 4.8 Anxiety score of the second referee

Discussion tional matches before the national tournament. The referee concentrated more and is The above Figure shows that as the motivated to participate in international du- concentration and confidence level improve ties than national ones. In the case of the with the tournaments, the referee’s anxiety second referee there is noticeable improve- level gradually reduces particularly for the ment in education, motivation, concentra- last three tournaments. The above data tion, and confidence but pressure hasn’t im- clearly shows that the performance and psy- proved. chological ability of the two referees improved significantly after the psychological The study has revealed the effective- skill training. The findings indicate that the ness of psychological skills training on the first referee has greatly improved on pres- performance of referees during various stag- sure process, education, and self-confidence es of volleyball competition. Psychological however the concentration and motivation skill training plays a huge role in the im- have not improved. This can be attributed to provement of referee performance at differ- the fact that the referee engaged in interna- ent levels of competition.

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Conclusion and Recommendations must have a clear understanding of the referees’ task to help boost the performance. Conclusion (b) Despite the positive results The main reason for carrying out this within this research, the data wasn’t study was to examine the impacts of psy- able to inform the sport psychologists chological skill training on refereeing per- and the researcher why the referee performance and psychological ability. Alt- formance improved after the training hough the literature review focused much on throughout the tournament or how the athlete training and very little about referee psychological skills were alleged to training, the findings of this study provide have been of benefit. significant message for the volleyball referees across Taiwan. Psychological skill train- (c) This study took a period of ing helps referee improve their concentra- half a year to train the two referees and tion, confidence level, and positive thinking it clearly shows the benefits of the as well as decrease pressure, anxiety, and training on the referees’ psychological negative thinking. status and performance. The researcher therefore suggests that all referees Recommendations should undertake psychological skills training regularly before every volley- This study was carried out for a pe- ball competition. riod of six months to allow the psychological skill training to be administered to test (d) Since psychological tech- its effects on referee performance and psy- nique training is very critical in the role chological status. The researcher makes the of a referee then the referee committees following recommendations. should include this training as part of referee training course. (a) The researcher recommends that before a sports psychologist administers this type of training to the referee, he or she

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THE INFLUENCE OF REPETITIVE ADVERTISING ON EFFECT OF COMMUNICATION: AN EMPIRICAL STUDY ON RECYCLING

Tsung-Kuang E. Ma Department of Business Administration I-Shou University, Taiwan [email protected]

Dong Jenn Yang Department of Business Administration I-Shou University, Taiwan [email protected]

Hong Ngoc Truong IMBA Program I-Shou University, Taiwan [email protected]

Abstract

The repetitive advertising exposure is a commonly adopted strategy to promote products in commercial marketing. It is worth to explore how well the same approach applied to promote one of important pro-environmental and social marketing issues, recycling. This study explores the revolution in human behavior using the well-researched Theory of Planned Behav- ior (TPB). In each trial experiment, a single sheet with an elaborate recycling advertisement was shown to volunteer sample students, after which they completed a questionnaire. The advertising exposure/questionnaire answering process was repeated three times with a two- week interval between each trial. The statistical comparisons for each dimension of the TPB model, between the first and third advertisement exposure, concludes that 1) the repetitive advertising has a positive impact for all TPB dimensions toward recycling, except for attitude, and 2) the attitude and perceived behavioral control are significant positive predictors for behavioral intention toward recycling.

Keywords: Repetitive Advertising, Social Marketing Communication, Effect of Communica- tion, Theory of Planned Behavior, Recycling

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Introduction cial marketing communication is to change people’s behavior, it is important for social Recycling is one of the most important marketers to understand the mechanism of approaches to reduce both household and the behavioral change process or to find val- industrial waste in order to help protect and id procedures that influence behavior signif- maintain a sustainable environment. Since icantly for targeted audiences. This study individuals and organizations need to invest employed the PBT framework to investigate a certain amount of resources for recycling, ways to ensure effective social marketing although the performance of critical pro- communication about one pro-environ- environmental behavior has been improving mental subject, recycling, so as to decrease for years, it is still not enough to pursue a the negative impacts on the natural envi- green earth policy. There is a long way for ronment and preserve a sustainable future people to progress from the recognition of for our offspring. the importance of environmental protection to real action. Therefore, how to inspire Literature Review people to induce a positive behavioral change has become an essential social topic. Theory of Planned Behavior and Recycling Researchers have previously investigated and applied theories and methods, common- Ajzen (1985) pioneered, developed, ly employed in commercial marketing, for and continues to improve, the Theory of social issues, known as social marketing Planned Behavior, which illustrates the ex- (Dann, 2010; Kotler & Zaltman, 1971; Lee tent to which humans will behave in a cer- & Kotler, 2011), i.e. to ”sell” ideas related tain way, and which is controlled by three to specific social issues, such as “recycling independent determinants; attitude, subjec- protects our environment and the next gen- tive norm, and perceived behavioral control. eration”, to the public, just as firms market The influence of these three antecedents are their products to customers. non-equivalent for various behaviors, or for the same behavior but under different con- Many non-profit organizations now ditions. It may be that only one antecedent communicate with the public by utilizing is dominant for some behavior while two or social marketing skills, which are similar to all three antecedents have a crucial impact techniques often used in business. For ex- on others. Researchers have used the TPB, ample, repetitive advertisements are utilized or developed new models based on the through various media to propagate and ed- TPB, to investigate changes in human be- ucate people about definite ideas, including havior for many public subjects, for exam- recycling, anti-smoking, stop drunk driving, ple, environmental protection (Cordano, HIV prevention and sexual responsibility, Welcomer, Scherer, Pradenas, & Parada, etc. However, the eventual goal for these 2010; Hom- burg & Stolberg, 2006), anti- social issues is to encourage people’s “ac- smoking (Guo, Unger, Azen, MacKinnon, tion” rather than “understanding”. & Johnson, 2012; Van De Ven, Engels, There are many theories expounded to ex- Otten, & Van Den Eijnden, 2007), stop plain human behavior. One of the most ac- drunk driving (Beul- lens, Roe, & Van den cepted is the Theory of Planned Behavior Bulck, 2011; Hornik & Yanovitzky, 2003), (TPB) applied frequently by social market- sexual responsibility (Rittenour & Booth- ers to depict the human transition from Butterfield, 2006), HIV prevention (Bull, recognition to action, or at least behavioral Pratte, Whitesell, Rietmeijer, & McFarlane, intention, toward a particular social issue 2009), and so on. (Ajzen, 1991; Ajzen & Sheikh, 2013; Sniehotta, 2009). Since the purpose of so-

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In particular, the TPB is one of the trol behavior using perceived behavioral most commonly used models in research on control (Ajzen, 1991; Cordano & Frieze, pro-environmental behavior, such as recy- 2000). cling (Chen & Tung, 2010; Cordano & Frieze, 2000; Greaves, Zibarras, & Stride, The Effect of Communication and 2013). Chowdhury (2009) indicated that Repetitive Advertising humans have perceived that reducing waste and recycling are effective ways to decrease Lee and Kotler (2011) have mentioned the negative impact on the natural environ- that the purpose of social marketing is to ment, and the idea is now socially accepta- change people’s behavior toward public is- ble and desirable (Barr & Gilg, 2005). This sues rather than stay at the cognition stage. tendency creates pressure on an individual, Consequently, it is important to persuade especially if they dislike recycling but their the public using appropriate and effective neighborhood doesn’t, and this becomes the communication strategies (Hawkins, Bul- subjective norm. Nonetheless, Cordano and mer, & Eagle, 2011; Reichert, Heckler, & Frieze (2000) argued that norms are not al- Jackson, 2001). Many contexts show that ways positive for pollution prevention ac- communicating with the target audience via tivities, including recycling, as “These intelligible advertising is a key success fac- norms potentially inhibited source reduction tor in changing people’s attitude and behav- activities because these practices often ex- ior regarding recycling (Chen & Tung, ceeded regulatory requirements”. The extent 2010; Shrum, Lowrey, & McCarty, 1994; to which a person possesses a favorable or Timlett & Williams, 2008), while behavior- unfavorable evaluation of recycling deter- al intentions include certain motivational mines their attitude toward recycling, which factors to influence actual behavior and then interacts with subjective norm. these are affected backward by the three antecedents (Ajzen, 1991; Ajzen & Sheikh, Greaves et al. (2013) showed that be- 2013). Hence, in this study, the whole TPB havioral intention is a faithful predictor of construct was treated as a legitimate meas- actual behavior as the context of the attitude urement of the effect of communication, and behavior are well defined. Whether similar to works related to organizational people have the motivation to recycle waste change (Jimmieson, Peach, & White, 2008; eventually depends on the expected ease or Jimmieson, White, & Peach, 2004). It is difficulty to do so, which is the perceived proposed that the manipulation of appropri- behavioral control. They support and under- ate advertising messages may influence the take recycling only if they can use their free effect of communication with the target au- will to perform the behavior. In general, a dience and, in turn, cause changes in recy- more favorable attitude and subjective cling behavior. norm, as well as greater perceived behavioral control, results in stronger behavioral The effect of repetitive advertising for intention for recycling (Cordano & Frieze, commercial brands has been investigated 2000), and, in turn, a higher possibility for extensively (Ehrenberg, 1974; Rahmani, true behavior (Greaves et al., 2013). Deal- Mojaveri, & Allahbakhsh, 2012; Tellis, ing with recyclable waste may be associated 1988) and social marketers have also em- with unpleasant mess, odor, and extra effort ployed the same strategy to promote social and, as a consequence, many people do not issues (DeBar et al., 2009; Olshefsky, Zive, have a high enough intention to act, alt- Scolari, & Zuñiga, 2007; Shrum et al., hough they own high levels of attitude and 1994). Ehrenberg (1974) stated that adver- subjective norm. The TPB interprets the tising plays two roles in communication. transition of such typical low volitional con- The information role increases consumers’

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awareness of products and the persuasive role stimulates their desire to own products. H1: Repetitive advertising has a posi- An identical mechanism can be applied to a tive impact on people’s attitude, specific social issue by introducing a social subjective norm, perceived behav- change campaign and then helping people ioral control, and behavioral inten- to behave in a certain way that facilitates tion toward recycling. the planned social goal. One method of examining the effect of communication by H2: By repetitive advertising, people’s advertising is to observe and recognize peo- attitude, subjective norm, and per- ple’s attitude, which is an intermediary ceived behavioral control positive- stage for changing their behavior and is de- ly influence the behavioral inten- termined by the content and frequency of tion toward recycling. the advertising exposure. For example, Timlett and Williams (2008) concluded that Methodology a positive and optimistic communication message is better than a negative and pes- The prior literatures conclude and posit simistic appeal when promoting recycling, that people’s behavioral intentions toward and Rahmani et al. (2012) reported that a recycling can be observed and explained by proper repetitive advertising program is the TPB construct, while behavioral inten- more likely to tempt customers to pay attention is predicted by the three antecedents of tion to and habituate the selection of com- attitude, subjective norm, and perceived be- mercial brands. havioral control. Social marketers can measure the effect of communication with However, there is an inverted-U shape the public regarding recycling by examining relationship, called the wear-out effect, be- the variation of each dimension of the TPB tween the frequency of the message expo- under the hypothesized repetitive advertis- sure and people’s affective response. The ing manipulation, as illustrated in Figure 1. public are stimulated by elaborate messages One experiment was conducted to test the initially, and reinforcement by several sub- suggested hypotheses using a convenience sequent exposures about a certain issue may sample containing undergraduate students at continue to gather a favorable and signifi- a medium-size university. Subjects were cant response. Yet these responses will tire told that their careful response would help and slacken off the promoted behavior if the environmental protection and the mainte- frequency of the repetitive messages con- nance of a sustainable homeland. After a tinues to increase over a latent threshold brief introduction to the survey, the subjects (Kirmani, 1997; Tellis, 1988). The optimal were asked to read a single sheet of recy- number for advertising message exposure, cling-relevant advertising context within however, has a large range under different five minutes and were then required to circumstances and varies in researches from complete a questionnaire, which consisted three exposures (Kirmani, 1997) to ten ex- of items that measured all the dimensions of posures (Nordhielm, 2002). Moreover, the TPB framework. Tellis (2010) summarized that the wear-out effect of repetitive advertising also depends The experiment was designed to be re- on other factors, such as the campaign dura- peated, with the exact same procedure men- tion, campaign break, content, and the in- tioned above, three times for all sixty five terval between exposures. Accordingly, two volunteer students, with a two-week interval hypotheses are proposed regarding the ma- between each advertising exposure nipulation of the advertising message exposure about recycling:

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Effect of Communication

Advertising Attitude (ATT) H1 Behavioral Intention (BI) Exposure 1 Subjective Norm (SN) Exposure 2 H2 Exposure 3 Perceived Behavioral Control (PBC)

Figure 1: Repetitive advertising positively influences the effect of communication

/ questionnaire answering process. How- Nevertheless, the subjects’ attitudes still ever, only forty eight subjects persisted increased slightly, conforming to the trend until the last stage of the experiment, re- predicted. This result partially certified the sulting in an effective response rate of first hypothesis. 73.85%. The questionnaire was comprised of items employing a 5-point Likert-type The second hypothesis was tested by scale, ranging from 1 (strongly disagree) to a multiple regression analysis, using be- 5 (strongly agree), to measure respond- havioral intention as the dependent varia- ents’ attitude, subjective norm, perceived ble and all three TPB antecedents as inde- behavioral control, and behavioral inten- pendent variables, to see whether the TPB tion regarding recycling. All questionnaire model is significant regarding the increase items referred to Ajzen (2010) and were in advertising exposure. From Table 2, the amended from Chow and Chen (2010) 74% increment of the adjusted coefficient with a well- accepted validity. The of determination revealed a great im- Cronbach’s alpha for attitude, subjective provement in the goodness of fit caused by norm, perceived behavioral control, and repetitive advertising exposure. Further- behavioral intention were .882, .867, .837, more, the regression relationship of the and .874, respectively, revealing good reli- TPB model was not obvious at the first ability. advertising exposure but was somewhat significant (p = .008 for ATT and p = .001 Results and Discussion for PBC) with all positive path coefficients by the third advertising exposure. This re- A paired t-test of the mean difference sult partially approved the hypothesis that for the dimensions of TPB, attitude (ATT), repetitive advertising positively influences subjective norm (SN), perceived behavior- the effect of communication toward recy- al control (PBC), and behavioral intention cling. The significant relationships of (BI) between the first and third advertising ATT-BI and PBC-BI are very similar as exposure, were implemented to verify the previous studies related to pro- first hypothesis shown in Table 1. The environmental behaviors such as Chow subjective norm ( p = .012), perceived be- and Chen(2010). havioral control ( p = .009), and behavioral intention (p = .012) toward recycling The valid sample size is somewhat increased significantly as the number of inadequate to get persuasive conclusion. exposures increased but attitude showed Enlarging the sample pool to reconfirm no apparent difference ( p = .488) between current results is one future movement. the first and third advertising exposures. Another limitation of this study is the The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 194

Table1: The t-test of difference for dimensions of the TPB between the first and third advertising exposure ( n = 48). Advertising Expo- Dimensions of TPB M SD p sure 1 3.86 .813 Attitude (ATT) .488 3 3.99 .942 1 3.26 .873 Subjective Norm (SN) .012* 3 3.69 .752 Perceived Behavioral 1 3.35 .729 .009* Control (PBC) 3 3.78 .819 1 3.67 .851 Behavioral Intention (BI) .012* 3 4.10 .831 * p < .05

Table 2: Comparison of the regression relationships for the TPB model between the first and third advertising exposure ( n = 48). Advertising Path Coeffi- Path R2 Adjusted R2 t p Exposure cient ** ATT -BI .281 1.713 .094 1 SN -BI .419 .379 .220 1.273 .210 PBC -BI .260 1.842 .072 ATT -BI .363 2.794* .008 3 SN -BI .683 .661 .130 1.120 .269 PBC -BI .429 3.392* .001 ** Dependent Variable: Behavioral intention toward recycling * p < .05

adoption of convenience sample including and is less valuable and prompt than other only undergraduate students. The compari- tactics, such as price or the promotion of son of communication effect between sev- brand choice. eral homogeneous sample groups, for example, students, housewives, and white- Nevertheless, it is natural for social collar workers under identical research marketers to adopt the advantages and avoid frames is an interesting extension of exist- the disadvantages of advertising to facilitate ing work. social ideas. Since recycling is a pollution prevention activity that usually needs to Repetitive advertising is an im- change current organizational practices, it portant way to increase brand awareness, becomes a potential barrier to real action, choice, equity, and perceived quality for not only for the regular public but also for commercial products (Rahmani et al., environmental managers, and this is barely 2012). However, Tellis(2010) concluded overcome by repetitive advertising commu- that the effect of the advertising exposure is nication alone (Cordano & Frieze, 2000). related to frequency and campaign duration, There are plenty of factors to influence peo- The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 195

ple’s pro-environmental behavior in addi- Shrum et al. (1994) argued that advertising tion to one way repetitive communication. alone is not a particularly effective ap- For example, the content of the communica- proach but could be a complementary tool tion messages should include positive when combined with other schemes to pro- viewpoints, such as connecting personal and mote recycling. The approach to exploring environmental benefits, and exclude nega- people’s recycling behavior using the TPB tive viewpoints, such as exhortation and model could be more significant statistically blame statements. In addition, relying on if there was a mixture of a variety of activi- images rather than words only, and so on, is ties rather than just relying on repetitive ad- also a critical element for a successful recy- vertising. cling campaign (Timlett & Williams, 2008).

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INNOVATION AND ALLIANCE EFFECTS FOR TOURISM INDUSTRY IN TAIWAN

Benjamin C. Parng* Department of Business Administration, Dayeh University, Taiwan, Republic of China Department of Business Administration, National Yunlin University of Science and Technology Taiwan, Republic of China *Corresponding Author: [email protected]

Mu-Ke Chen Department of Hotel Management, National Kaohsiung University of Hospitality and Tourism, Taiwan, Republic of China Department of Business Administration, National Yunlin University of Science and Technology Taiwan, Republic of China

Tsung-Ting Chung Department of Business Administration, National Yunlin University of Science and Technology Taiwan, Republic of China

Abstract

The tourism industry has been developed and seriously pays attention for many decades in Taiwan. This research explores the recent few years’ international tourism activities and evolution in Taiwan which include the expenses of travel transportation, accommodation, food and beverage, entertainment, shopping and others. We analyze the study by using qualitative method that deepening insight of the phenomenon base on the perspective of innovation and strategic alliance which comprise the element of resource interdependence. We collect the The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 199

most popular activities which list on tourism bureau in Taiwan of 5 years data as the information. According to the data form 2006 up to 2010, the study analyzes international sightseers’ consumption power, motivation, information obtaining, favorite place to go, and other activities in Taiwan. We find that the favorite travel spot is more attractive and very important issues than other concerning. The average expenses for the 5 years are largely in hotel, then shopping, food and beverage outside of hotel, transportation, then entertainment and others thereafter. More than 90% tourists would like to come again since the joyful and satisfactory experience in Taiwan. Base on the study, we posit the innovation and strategic alliance effects between academy and industry is extremely important to foster useful manpower and stimulate tourism industry in Taiwan. We develop propositions and suggestions around the argument.

Key words: Innovation, strategic alliance, tourism industry, resource interdependence

Introduction the last two decades, Taiwan’s tourism service industry not only pay more atten- It is tendencies that people like to tion on tourism but also hospitality that travel abroad are prevailing in the world. concentrates in related peripherals indus- Nowadays, travel and spend leisure time to tries such as hotel, transportation, restau- enjoy off work life during their weekend rant, shopping, entertainment, foods and or vacation which is prevailing activity beverage and many others that attracts that stimulates tourism and hospitality in- many colleges and high schools to con- dustry in Taiwan. The tourism industry has struct new majors and /or classes to train been developed and seriously pays atten- more students in order to offer new and tion for many decades in Taiwan. Fur- fresh labor force to fill in the industry’s thermore, it is one of the money creative demand. machines for the country. Since the government of Taiwan announces and per- The question is that fresh labor forms working five days a week instead of force graduate from school by training to six days at the year of 2001 (Hong Kong in become an expertise or to be quickly used 2006, China in 1995) which means week- for the market, need more time and experi- end off duty and that promotes labor and ences which may never catch up the fast consumption markets move from working growth market. Prior studies have focused hard to leisure hard. Accordingly, tourism on firm resources and capabilities that industry is become more prevailing and show tourist reliance on the technology of important than before in Taiwan, also, the internet to search information before they productivity of tourism industry ascent visit or sightseeing (Sparks & Browing their role and position than ever. During 2011). Some studies emphasize on travel The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 200

motivation and participation in a tourist ple, the well known big country, the Unit- activity (Crompton & Mckay, 1997; Fod- ed States of America even put more energy ness, 1994; Kim & Eves, 2012; Mclntosh, to stimulate the entertainment and tourism Goeldner, & Ritchie, 1995). Relatively industry to contribute their country income little attention has focus on innovation pol- (Gross Domestic Production) such as Dis- icy and alliance to stimulate tourism indus- ney world, Universal studio and many oth- try. How can school and industry cooper- ers famous sightseeing spot. Not long ago, ate to foster fresh labor forces for the de- the President of the United States of Amer- mand market? Can these labor forces be ica, Barack Obama has stated that wel- trained well while they at school? Is there come Taiwanese tourist to sightseeing the any better motivation or strategy to stimu- U.S and further put Taiwan into the obser- late tourism industry that affects students vation country of free visa to stimulate the from education training to become more tourism industry in America. Today, Tai- familiar with the market? Particularly, the wanese tourists do not need visa may entry tourism industry in Taiwan has become into the United States of America freely. more internationalization and activation which is dynamic and diversified. This re- The intention of this paper tries to search attempts to fill the gap. Base on find out a better way to stimulate tourism these questions that arouse this research industry in Taiwan that connects with in- motivation which we believe it is a very novation and strategic alliances between important issue. the industry and academy. We review and explore the phenomenon of tourism indus- According to the report of Tourism try that is developing and seriously pay Bureau of Taiwan that the inbound foreign attention in Taiwan for many years. Dur- tourist (the number of visitors) from the ing the last two decades, since Taiwan and year of 2006 to 2010 is consistent growth mainland China has open their citizens every years (see the table 1), even at the freely communicate to each other, more year of 2008 the financial storm strongly and more tourists not only groups but also impact world economy. Apparently, the limited personal tourist of China has con- tourism industry contributes national in- sistent growth that Taiwan government has come is playing an important role in Tai- favored the open policy with permission wan. Recently, most business has been which contribute and stimulate huge na- across countries and without boundary, tional income. The evidence shows that it especially tourism business for interna- is really stimulate the tourism and hospi- tional sightseers. More and more countries tality related industry become much well are looking forward to stimulate tourism than couple years ago that open policy for industry in order to attract more interna- Mainland China tourists not only groups tional tourist to their countries. For exam- but also limited single tourist. The tourism The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 201

and hospitality related industry such as As the prior research, most tourists have hotel, an amusement park, department the motivation to travel and may follow a store, restaurant, famous night market certain way to attend or choose where to around the country, sightseeing spot, visit by the desire or need (Crompton & transportation and others has become pre- McKay, 1997, Kim & Eves, 2012, Fod- vailing and make more money ever since. ness, 1994). Thus, the industry and gov- Thus, this paper tries to discuss the inter- ernment should find out the strategy to sat- esting issue with innovation and alliance isfy the tourists need is very important is- for academy and practice. This study ana- sue. Perhaps, that is currently doing by lyzes the phenomenon by applying the most countries. Nowadays, sightseers qualitative method that deepens insight of would search information from the Web the research by using the data from Tour- page before they decide where to visit. ism Bureau of Taiwan that report the data Meanwhile, the government of China has of information from the year of 2006 to seriously face the dramatic growth in out- 2010. bound travel from Asian countries in recent years, fueled by the region’s rapid The Rapid Growth of Tourism Industry economic growth and rising income levels (China National Tourism Administration, The world tourism industry has 2005, March, 1997). been growth rapidly during the last two decades. Taiwan also feels the atmosphere Particularly, the tourism industry in and follows the step to growth. Indeed, the Asia Pacific region is rapidly growing Taiwan is an Island that around with Pacif- and is recognized as one of the most sig- ic Ocean and a beautiful views of land- nificant economic resources in the region scape and sea. That is the reason why Tai- (Horng, et al., 2012). Besides, the tourism wan has another name long time ago related industry has become more popular which is called Formosa, a beautiful Is- and important of many countries govern- land. Taiwan used to have a conservative ment for national income, according to the tourism policy because of the military report, the ascent of tourism to the position nervous tense against between Taiwan and of the world’s largest industry has been mainland China, until the recent years of rapid, and the growth of global travel con- open policy of the government that is cool- tinues to be robust (UNWTO, 2006; ing down the nervous tense. The govern- WTTC, 2005). Accordingly, not only Tai- ment of Taiwan realizes that tourism is wan but also world countries recognizes commonly used as a tool to stimulate mar- the important role of tourism and in re- ginal economies and to promote develop- sponse, the government has rapidly devel- ment through the jobs and incomes that it oped its tourism policies to meet demand can foster (Liu & Wall 2006) and training. The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 202

and produce related benefits (Liu, et al., The question is how long it can be last 2012). longer of the China tourists sightseeing in Taiwan. Does the tourism industry can be The Tourism Bureau of Taiwan, improved if the government connects with the central administrative authority over- industry and education? Does the tourism seeing national tourism affairs and facili- relate industries of labor force are good tating the development of the tourism in- enough to apply in the industry? dustry, has launched a series of policies for tourism development. According to the According to the World Travel and research of Liu, et al (2012), in the new Tourism Council (WWWTTC, 2006) es- millennium of Taiwan, some famous poli- timates that the travel and tourism industry cies are presented in ‘Project Vanguard for generated jobs represent 8.7 percent of to- Excellence in Tourism (2009-2012); the tal employment, growing to 9 per cent of ‘Medium-term Plan for Construction of total employment globally by 2016. It Major Tourist Sites (2008-2011), ‘Taiwan means the tourism industry will be dramat- Ease Go’ and other similar materials (Tai- ically growth in the near future and is wan Tourism Bureau, 2010 a,b). Obvious- worth for us to think highly and deeply. ly, the tourism related industry has been Accordingly, the country should find out placed into important position compare the strategy, specifically innovation other with other industries. Other than Taiwan, than traditional way to attract tourists to due to mainland China’s economic rise visit. Nowadays, sightseers would search sharply, people travel outbound much information from the Web page before more than ever. Especially, the easing re- they decide where to visit. The first image strictions on outbound travel by China, the of the country’s information about sight- Chinese are likely to be enthusiastic tour- seeing will come from Website. Thus, the ists in the future. Taiwan, the neighbor of internet browser should be easily and nice- China, flow the same blood and speak ally to function is much important issue. We most the same language and with the same argue that the first innovation should focus culture that favors by open policy which on the Website design and usage function. attract many tourists from China. Needless to say, it helps a lot for tourism industry. Taiwan Tourism Data Analysis The big chance of great tourists group from China brings a great opportunity for This research adopts the data that many weak and old hotels turn around the collects from the Tourism Bureau open business and even shinning because Chi- information which focus on the year of na’s tourists come to travel and consump- 2006 to 2010 that includes the index of tion. It is really stimulating the tourism inbound foreign tourists, income of foreign related industry during these couple years. exchange from inbound tourism, country The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 203

of foreign tourist, average of tourist ex- is Japan at the year of 2010, 2009, 2008 pense each day, items expense , overall and 2006 which is very steady state situa- satisfaction.. Etc. (see Table 1.) tion, except 2007. It is weird that Japan at the year of 2007 fall to number three The rank of number one inbound which is behind Korea that rank first and foreigner visitors’ average expense each China rank the second. day

Table 1. The items of record index for each year

Items Year 2010 2009 2008 2007 2006 Top one country Japan Japan Japan Korea Japan average spending each day Income of For- 8.719 bil- 6.816 bil- 5.936 bil- 5.214 bil- 5.136 bil- eign Exchange lion lion lion lion lion (US dollars) Average spend- 1,566.19 1,550.87 1,543.66 1,403.17 1,459.22 ing per person (US dollars) Growth rate 27.92% 14.82% 13.85% 1.52% 3.19% Overall satisfac- 93% 90% 88% 86% 89% tion for inbound tourist Purpose visit Sightseeing Sightseeing Sightseeing Sightseeing Sightseeing Taiwan after AD Most popular Night mar- Night mar- Night mar- Night mar- Night mar- place to go ket ket ket ket ket Most important Views Views Food Views Food reason to come

Table 2. The items of spending record for each year (2006~2010).

Items Year 2010 2009 2008 2007 2006 Hotel spending 37.83% 39.33% 43.9% 43.96% 45.67% Eating outside of 11.43% 11.6% 12.34% 11.02% 13.62% hotel spending Transportation 8.62% 8.37% 8.09% 8.16% 8.81% spending Entertainment 6.35% 5.76% 6.63% 7.64% 7.69% spending Others spending 1.22% 1.16% 1.69% 1.92% 2.78% Shopping spending 34.55% 33.78% 27.35% 27.3% 21.43%

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The income of foreign exchange 2010: 1) Night market, 2)Taipei 101, 3) from tourism of the last 5 years is increas- National palace museum ing for each year from 5.136 billion up to 8.719 billion US dollars. From the record 2009: 1) Night market, 2)Taipei 101, 3) of the report, we realize how importance National palace museum and contribution of tourism industry for Taiwan. The average spending of each 2008: 1) Night market, 2)Taipei 101, 3) tourist during she/he stays is rising from National palace museum 1459.22, up to 1566.19 each year, except the year of 2007 with 1403.17 decrease, 2007: 1) Night market, 2) National palace we believe it is the financial storm affect museum, 3) Taipei 101 the intention of consumption. 2006: 1) Night market, 2) Taipei 101, 3) The growth rate of inbound tourist Chiang-Kai Shek Memorial Hall is increasing from 3.19%, 1.52%, 13.85%, and 14.82% to 27.92%. The year of 2007 It is very clear that night market is growth rate is just a little rise that we pure- the most popular and favorite which attract ly guess is perhaps the financial storm by foreign tourist. According to the prior strongly impact world economy which papers, we believe and agree that most of cause travel decrease that year. the tourists are conscious of something “beyond”, something “hidden”, within The overall satisfaction for in- their tourist experience such as the inner bound tourist is not stable as other items workings of the back-stage production that show the index are 89%, 86%, 88%, (Hsieh, & Chang 2006). 90%, and 93%. The year of 2007 satisfaction drop we also think it is because the The most important reason that at- reason of financial storm. traction tourist to visit Taiwan for 2010 is the country views, also for the year of The main purpose of international 2009 and 2007, except 2008 and 2003 that traveler that has checked advertisement or most attraction reason for tourist to visit travel report, then decide to come to Tai- Taiwan is food. The most spending is ho- wan for 2010 is sightseeing earn the high- tel, then shopping, eating outside of hotel, est score, also for the rest of other 4 years. transportation, entertainment and other The top three of travel activities and/spot spending thereafter. It is about the same for sightseeing during the 5 years are as from the year of 2006 to 2010 (See Figure follow. 1.)

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Typically, base on the data analysis many revolute innovation inventions that to make a short statement that Taiwan bring human’s life more convenient than tourism industry is really increasing during ever. In Disney world, the theme park cre- these few years, especially up to the year ates the FASTPASS to solve the long line of 2010, the record shows that income of of waiting which is the innovation solu- foreign exchange comes from the inbound tion. tourist, average spending per person and In order to improve and stimulate the growth rate is also steady state rise. industry of tourism, it is very important to The record is kind of evidence that shows connect school with enterprises and gov- international tourist love and willingness ernment to cooperate and integrate neces- to pay and to go. The government and in- sary resources efficiency and effective. In dustry managers should realize what can the rapid change environment today, stra- make international tourist to stay and come tegic alliance becomes more prevail be- back again when they have the chance next tween companies to improve their compet- time. itive position and performance by sharing resources. Furthermore, the benefits of Innovation and Strategic Alliance Effects strategic alliances include conserving resources, sharing risk, reducing product de- Nowadays, there are many issues velopment costs and improving technolog- disturbing and attracting the attention of ical capabilities. Thus, in order to fast ex- academy and practice, especially in a panding and foster Taiwan tourism indus- quick response to the market requirements try labor force to fit into the market, inno- for today’s enterprises because of the rapid vation and strategic alliance with resources change in the business environment, short interdependence will be the prevailing way product lifecycle and global competition to consider. (Lee, & Ding 2010). Therefore, how to attract tourist willingness to spend leisure This paper tries to explore the phe- time to sightseeing other than business trip nomenon of developing situation of Tai- and spend money is a big issue. Innovation wan tourism with a new thinking and strat- is a better way and short cut to success for egy. Basically, there are couple ways to enterprises. For instance, Apple Inc starts think innovation. up the business in 1970 by the founder of Steve Jobs. In the later stage, the company First, this paper argue with human successfully revolute innovation which resource management of labor force from creates a new function of phone so call school, in order to foster the future labor smart phone and further develop the prod- force that classify into hardware and soft- uct of Ipad that change people’s habitude ware facilities from education one way or of usage and life. 3M Company also have another. Hardware is including the high The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 206

school and/or college of educating that P1: The more innovation thinking and al- trains students skill and knowledge to liance strategy, the more attractive tourism study that cooperate with firms in related business and successful rate. industry in Taiwan. However, does school facilities solid and good enough? Consider P2: Strategic alliance education and train- with cost, students stay at school to study ing students’ success or failure depends on and train that may save time and money, or the reciprocity characteristics with tourism school alliance with industry or govern- industry, the longer of relationship the ment to train students gets more experi- more successful rate. ence. Learning by doing and doing by learning will be good way for school and Second, the paper argues the tour- industry, not only reciprocity for both but ism industry such as hotel; restaurant also cost saving, students have experience and/or department stores adopt strategic from internship and industry has cheaper alliance with the Tourism Bureau of Tai- labor to use. Software is emphasizing on wan government or tourism industry union train or education program setting which is to promote activities. For example, the good for rapid change in the dynamic envi- government of Bureau and hotel could ronment in the short term. have the promotion from website before the tourists come or in the airport right af- By using high technology training ter the international tourist landing and pay assistant with computer (hardware) or oth- attention on shopping and tourism dis- er possible programs which include teach- count information after they come to visit er (software), colleagues or simulation the country. For example, accumulation of practice? Does it worth and cost? It is staying, purchasing, the more spending the worth for expertise to think, in order to more discounts they get which would at- robust students’ capability to stimulate tractive and stimulate tourist. Such as, tourism industry in Taiwan. Base on the tourist are shopping in department store, as authors knowledge, most schools have long as they purchase over a certain mon- connect with related industries, such as ey, they will have not only duty free bene- hotel, restaurant, related stores to train and fit when they leave the country but also internship when students are in a certain have free shuttle bus ride them to interna- level of learning in order to get real expe- tional airport would be one of the innova- rience and familiar with the standard pro- tion activities. Besides, hotel, Department cedure of working which is absolutely stores or others tourist spot may cooperate good for students in the long term. Thus, with Taiwan high speed railway company we have the propositions as below. with strategic alliance that if tourist live, shopping and take the transportation up to

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a certain money and get certain discounts advantages. First, it results from an inno- that would attract and stimulate tourist vation idea and successful collaboration in consumption also. Therefore, we have oth- which complementary resources are inte- er propositions. grated to create value. Second, creating value by effectively managing the related P3: The more of the tourism related indus- firms or industry’s ability to absorb and try strategic alliance, the better chance to imitate to form competitive advantage. stimulate tourist purchase. Finally, school and/or related in- P4: The more marketing promotion, the dustry can create value by learning how to better chance for tourist to purchase. successfully manage strategic alliance to stimulate the tourism industry by Third, this paper proposes that knowledge sharing, risk reduction, and re- tourism industry union connect with firms source interdependence, and then create to attend international tourism and hospi- competitive advantage. tality display. To make tourism industry chance to expose international in order to have more chance to earn international Reference tourist to come. We believe that tourism related firms should trust union and coop- China National Tourism Administration. erate with them which have more chance (2005). The year book in China tour- to catch international sightseers’ attention. ism in 2004. Jeijing, China: China Thus: National Tourism Administration.

P5: Trust is the key success factor for Crompton, J. L., & McKay, S. L. (1997). Strategic alliance between tourism firms Motives of visitors attending festival and union. events. Annals of Tourism Research, 24, 425-439. Discussion and Implications Fodness, D. (1994). Measuring tourist mo- The data collects from Taiwan tivation. Annal of Tourism Research Tourism Bureau shows that the tourism , 21(3), 555-581. industry is growing every year. It is a huge and potential market in the future for Tai- Hitt, M. A; Dacin MT; Levitas E; Arregle wan that is worth to pay more attention on J; & Borza A. (2000). Partner selec- it. Overall, the effect of innovation and tion in emerging and developed strategic alliance can create competitive market contexts: resource-based and organizational learning perspectives. The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 208

Academy of Management Journal 43: 449-467.

Horng, J. S., Liu, C.H., Chou, H. Y., & Tsai, C. Y. (2012). Understanding the impact of culinary brand equity and destination familiarity on travel intentions. Tourism Management. 33. 815-824.

Hsieh, A. T., & Chang, J. (2006). Shop- ping and tourist night markets in Taiwan. Tourism Management. 27. 138-145.

Kim, Y. G., & Eves, A. (2012). Construc- tion and validation of a scale to measure tourist motivation to son- sume local food. Tourism Manage- ment, 33, 1458-1467.

Lee, H. W., & Ding, J. H. (2010). The effects of e-business on the performance of strategic alliances. Total Quality Management. V21(7), 707- 724.

Liu, A. and Wall, G (2006). Planning tourism employment: a developing country perspective. Tourism Man- agement. 27. 159-170.

Liu, C. H., Tzeng, G. H., & Lee, M. H. (2012). Improving tourism policy implementation – The use of hybrid MCDM models. Tourism Manage- ment. 33. 413-426.

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A STUDY ON DESIGN DECISION MAKING RESULTED FROM THE FORM FEATURES OF FURNITURE PRODUCTS AND THE AESTHETIC EVALUATIONS OF CONSUMERS THROUGH FUZZY LOGIC

An Sheng Lee Associate Professor, Department of Wood-Based Materials and Design National Chiayi University, Taiwan [email protected]

Abstract

This study was aimed to investigate the relationship between the form features of furniture products and the aesthetic evaluations of consumers and the differences between the backgrounds of consumers in terms of the forms features of furniture products and the aesthetic evaluations of consumers. In this study, the degree of similarity between fuzzy semantic values was analyzed. Cronbach α and Pearson correlation coefficient were used to examine the correlation between the form features of products and the aesthetic evaluations of consumers. According to the research findings, furniture products were significantly influenced in terms of the form features of furniture products, respectively integrity, sequence, visual balance, rhythm, and size and ratio as well as the fuzzy semantics of the aesthetic evaluations of consumers. Consumers had very consistent opinions. From the analysis of the degree of similarity for fuzzy semantic values, it is found that consumers attached the greatest importance to size and ratio, a form feature of products, whereas they attached the least importance to visual balance, a form feature of products.

Key words: Form features of products; Aesthetic evaluations of consumers; Fuzzy semantics; Degree of similarity

Background ture products gradually changes. Under the customer- and market-oriented tailor made In the global economic competi- product development model, when super- tion, the demand of consumers for furni visors make design decisions, the product The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 210

designs should first conform to the de- The form features of products mand of consumers; furniture product value should not be neglected in furniture The forms of products convey peo- product design and development. When ple’s psychological feeling about the prod- enterprises would like to increase the ucts, and the influence lasts long and con- product value, the best method is to pro- tinuously. The aesthetic features of prod- foundly understand the evaluation of con- ucts tend to influence consumers and non- sumers for the products, that is, the evalua- consumers for many years, just like turn- tion of consumers is the best basis (Bloch, ing the products into a part of sensory en- 1995). In this study, fuzzy logic was vironment (Bloch, 1995). McDonagh, adopted to explore the influence of the Bruseberg, and Haslam (2002) argued that form features of products on the fuzzy se- the function of design lies in form design mantics of the aesthetic evaluations of features, namely the design method of at- consumers in the furniture industry in or- tracting consumers to purchase products der to provide supervisors with a reference through the form features of the products, to the design decision making of product including modeling, color, size, and mate- design and development and further im- rial. Yang (1997) explained the meaning of prove the development and design of fur- modeling through three points, that is, niture products so as to fit customer re- modeling is the process of creating shapes; quirements and enhance enterprise per- it indicates specific shapes apparatuses and formance. functions; it comprises shape, color, material, and texture, and it emphasizes the Research purposes overall integrated shape. Bowman (1990) generalized five fundamental elements, The research purposes are summa- respectively point, line, tone, texture, and rized as follows. shape. Qiu (1987) summed up that model- 1. Applying fuzzy logic to investigate ing consists of three elements, that is, the relationship between the form features form, color, and material. Whiling general- of furniture products and the aesthetic izing the elements of modeling, Wang evaluations of consumers. (2009) mentioned that Tjalve classified the 2. Investigating the differences features of modeling as integrity, se- caused by different consumer backgrounds quence, visual balance, rhythm, and size in the form features of furniture products and ratio. For integrity, fragmentary archi- and the aesthetic evaluations of consum- tecture and small components are assem- ers. bled through product modeling. For sequence, complicated product components Literature Review are simplified and neatly configured. Visu- al balance includes symmetrical balance The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 211

and asymmetrical balance. Rhythm can be tion focus on expressing creativity, harmo- created by the combinations of quantities, nizing colors, and bringing consumers a configurations, dimensions, shapes, and pleasant feeling. Hence, originality, pleas- colors, and the golden ratio indicates an ure, and pleasure were applied to aesthetic aesthetic size and ratio. To summarize, evaluation in this study. Tjalve’s modeling features mentioned by Wang (2009), including integrity, se- Fuzzy Logic quence, visual balance, rhythm, and size and ratio, were employed as the form fea- Zadeh (1965), a professor in the Uni- tures of products in this study. versity of California, Berkeley, developed the fuzzy sets theory, in which the rela- Aesthetic Evaluation tionship between elements and sets are indicated by membership functions. The In terms of product design, modern fuzzy sets theory quantifies the fuzzy con- consumers want not only basic functions cept to mainly deal with the fuzzy psycho- but also aesthetics. The aesthetics of prod- logical feelings of some research objects uct design is an interactive relationship for extending the membership of elements between human beings and objects. Veryz- for sets to any value in the single interval er (1995) addressed that the aesthetics of (0,1). Voxman (2001) divided the canoni- design is an aesthetic response by consum- cal representations of discrete fuzzy num- ers to product forms. An aesthetic response bers into two types and brought up calcula- indicates the interaction between product tion methods respectively. Herrera, Lopez, appearance and consumers’ perception of Mendana, & Rodriguez (2001) studied the an object. Therefore, good interactive resolution to the linguistic decision model sponses bring consumers not only aesthetic and brought up the genetic algorithm for experience but also a pleasant feeling. the fitness function of the goal of seman- Zhuang (2008) addressed that the criteria tics. In addition, Wu (2010), Tang (2009), of aesthetic evaluation should include orig- Wei (2003), and Su (2007) investigated the inality, unity, integrity, pleasure, concise- application of fuzzy logic to product de- ness, and satisfaction at modeling. Wanger sign. Fuzzy numbers are often used in re- (1999) pointed out that aesthetic experi- search including: triangular fuzzy number, ence is interaction between subjects (con- trapezoidal fuzzy number, and normal sumers) and objects (products) in which fuzzy number. subjects indicate consumers’ value whereas objects indicate product design. Thus, To count the degree of similarity consumers will generate aesthetic evalua- between generalized fuzzy numbers, Hsu tion for products in the experience. In & Chen (1996) pointed out that the task of summary, the criteria of aesthetic evalua- measuring the degree of similarity between The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 212

fuzzy numbers plays an important role in are after evaluation, and they include (1) fuzzy decision making. Chen - and-Chen’s design preparation, (2) initial design, (3) method (2001) also explored a new simi- detailed design, (4) idea concretization, larity measure between generalized fuzzy and (5) idea materialization. numbers. It combines the concepts of geometric distance, the perimeter and the Research Methodology height of generalized fuzzy numbers for calculating the degree of similarity be- Research Design tween generalized fuzzy numbers. This study was aimed to investigate Design Decision Making the relationship between the form features of furniture products and the fuzzy seman- Design is one type of special mental tics of the aesthetic evaluations of con- behavior, and the theme of the activities is sumers and the differences between con- to make design decisions (Hsu, 1996). Per- sumers in terms of the form features of sonal intuition is frequently involved in the products and the fuzzy semantics of the design decision making of product design aesthetic evaluations of consumers. and development projects. Cooper (1993) proposed five decision-making points, Research Framework which help control design procedures and quality, in the design and development The research framework is illustrated process as a reference to design decision in Figure 1. making. Zhang and Wang (1996) addressed that design decision-making points

The fuzzy semantics of the aesthetic evaluations of consumers

products form The features furniture of Integrity Designdecision making Originalit y Sequence

Visual balance Color

Rhythm Pleasure Size and ratio

Figure 1. The research framework of the relationship between the form features of furniture products and the fuzzy semantics of the aesthetic evaluations of consumers

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Research hypotheses and questions and it is fuzzy, subjective, and uncertain. Thus, a fuzzy evaluation questionnaire was employed to obtain the aesthetic evaluations H1: Different form features of furniture of consumers for the samples to effectively products significantly influence the aesthetic quantify subjective judgments. Scholars evaluations of consumers. studied fuzzy semantic scaling and Likert H1-1: Integrity significantly influences the scaling (Lin, 2003, 2004) in which the Lik- aesthetic evaluations of consumers. ert scale used to measure the semantic H1-2: Sequence significantly influences the meanings of participants (5 represented aesthetic evaluations of consumers. “strongly agree,”4 represented “considera-

H1-3: Visual balance significantly influ- bly agree,” 3 indicated “agree,” 2 indicated ences the aesthetic evaluations of consum- “agree disagree,” and 1 represented “strongly disagree) unlikely reasonably described ers. the differences and fuzziness expressed by H -4: Rhythm significantly influences the 1 human semantic meanings. The fuzzy se- aesthetic evaluations of consumers. mantic scale used in this study was divided H1-5: Size and ratio significantly influences into five levels. The participants chose an the aesthetic evaluations of consumers. appropriate level according to each investigation item. A fuzzy evaluation method was Research Question: The analysis of the de- used to calculate the fuzzy mode, which bet- gree of similarity for the form features of ter expressed the opinions of most of the participants. When an evaluation result was furniture products and the fuzzy semantics highly unlikely decided, a fuzzy evaluation of aesthetic evaluation method was employed to calculate the mean of the fuzzy semantic values of the aesthetic Research objects evaluations of consumers, which can be used by furniture designers and supervisors The consumer groups in Taiwan were as a reference to design decision making in targeted for the convenience of obtaining design management. Based on Klir and Yu- research objects. In total, 905 copies of an’s (1995) fuzzy system framework, a questionnaire were investigated and ana- complete fuzzy process usually contains lyzed. four steps: (1) fuzzification mechanism (data input), (2) fuzzy rule base (data pro- Questionnaire Design and Implementation cessing), (3) fuzzy inference engine (fuzzy inference), and (4) defuzzification mecha- Questionnaire data and fuzzy semantic nism (data output). Hence, the fuzzy pro- statistics and analysis cessing steps of the fuzzy semantic questionnaire data in this study were summa- The relationship between the form fea- rized as follows: tures of furniture products and the fuzzy semantics of the aesthetic evaluations of Step 1. (Fuzzification Mechanism): triangular consumers investigated in this study belongs fuzzy numbers were used to represent the to the mental perception of human beings, The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 214

form features of furniture products and the mantic terms. The membership function expected and actual semantic variables of the graph is illustrated in Figure 2. Moreover, fuzzy semantics of the aesthetic evaluations triangular fuzzy numbers were attached to the of consumers. A great number of scholars five semantic terms of the actual semantic (Wu, Hsiao and Kuo 2004; Xu and Lin, variables, respectively “strongly disagree,” 2005) used triangular fuzzy numbers to rep- “agree disagree,” “agree,” “considerably resent semantic variables. agree,” and “strongly agree.”

Step 2. (Fuzzy Rule Base): triangular fuzzy Step 3. (Defuzzification): the fuzzy statistics numbers were attached to the five semantic obtained from the fuzzification were defuzz- terms of the expected semantic variables, re- ified to acquire specific values for following spectively “strongly agree,” “considerably research and analyses. Center of area (CoA) agree,” “agree,” “agree disagree,” “strongly used in the studies of Kaufmann and Gupta disagree.” Now, A is used to represent an ex- (1991) and Xu and Lin (2005) was em- pected triangular fuzzy number. When A is ployed in this study. The triangular fuzzy divided by 5 and then transformed into a val- numbers (Figure 2) were calculated as fol- ue between 0 and 1, X =(0, 0,0.2), (0, 0.2, lows. 0.4), (0.2, 0.4, 0.6), (0.4, 0.6, 0.8) or (0.6, 0.8, 1), which respectively represent the five se- Variable Semantic agree Considerably Strongly Disagree disagree Agree agree Strongly

u(x) 1

0 0.2 0.4 0.6 0.8 1 X Underlying features ~ a b c ----- X = (a , a ,a ) ~ 1 2 3 a1 b1 c1 ---- X = (a1 , a2 ,a3 ) XUnderlying feature

Figure 2. The membership function graph of five semantic levels

~ The defuzzification formula of X is as fol- transformed into lows: n = ∑ + + Fuzzy Lingustic Mean [](a1 2a2 a3) 4/ Nx 5 , ~ 1 Assume X = (a , a ,a ) , 1 2 3 N=905(participants) . (1-1)

~ = (a + 2a + a 4/) x5 V X 1 2 3 The fuzzy descriptive statistic equation for The fuzzy descriptive statistic equation for the third part of the fuzzy semantic ques- the second part of the fuzzy semantic questionnaire was deduced into Equation (2): tionnaire was deduced into Equation (1): ~ X = (a1,b1,c 1 ) , ~ = (a + 2a + a 4/) x5, which can be V X 1 2 3 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 215

either symmetric or asymmetric balance. ~ = (a + 2a + a 4/) x5 can be trans- V X 1 2 3 For rhythm, quantities, colors, dimensions, n = ∑ + + formed into Fuzzy Lingustic Mean [](a1 2a2 a3) 4/ Nx5 , 1 and shapes were altered to create combina- N=905 (participants) (1-2) tions. For size and ratio, either the length or The fuzzy semantic values of the the width of a design was in golden ratio. In questionnaire were analyzed through Equa- total, there were 13 questions. tions (1-1) and (1-2). The third part was the aesthetic evalua- Questionnaire design tion of the participants for the form features of furniture products, including originality, The first part of the questionnaire in pleasure, and pleasure. In terms of originali- this study was the basic personal back- ty, consumers thought furniture product ground information of each participant, in- combinations and components were connec- cluding sex, age, education level, and tive, neat, and in order; they were in either monthly income. In the second part, the symmetrical or asymmetrical balance; quan- form features of products were divided into tities, configurations, dimensions, shapes, five categories, namely integrity, sequence, colors, and golden-ratio product designs visual balance, rhythm, and size and ratio. were used to create better form features; For integrity, the framework of product de- they were creative. In terms of color, con- sign, product components, and small parts sumers thought that the overall form fea- were connective and integrative instead of tures of products were in order; they were in being fragmented. For sequence, furniture either symmetrical or asymmetrical balance; design brought a neat and simple feeling. quantities, dimensions, golden-ratio product For visual balance, furniture design was in u~()x X ~ X 1

a a a3 a 1 2 4 ~ Figure 3. The graph of the trapezoidal fuzzy number, X , and the membership function

designs were applied; colors were added, form features of products were neat and vis- which expressed aesthetics. In terms of ual balanced; quantity configurations were pleasure, consumers thought that the overall applied; the designs were in golden ratio,

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which made people generate a pleasant feel- This trapezoidal fuzzy number model ing. Totally, there were 15 questions. (Figure 3.) significantly indicates that:

(1) Assume a1 = a2 = a3 = a4 , but The membership function of the trapezoidal ~ the fuzzy number, X , is a crisp normal fuzzy value.

In this study, it explored a new method (2) Assume a1 < a2 = a3 < a4 , but to count the degree of similarity between ~ the fuzzy number X is a triangular generalized fuzzy numbers. The applied method combines the concepts of geometric ~ fuzzy number, and X = (a , a ,a ) distance; the perimeter and the height of 1 2 3 generalized fuzzy numbers for (See Figure 4.) counting the degree of similarity between generalize fuzzy numbers.

u~()x ~ X X 1

a1 a2 = a3 a4 ~ Figure 4. The graph of the triangular fuzzy number, X , and the membership function

4 ~ ~  ∑ a −b +  i i min( L( X1), L( X2)) min( W ~ ,W ~ ) In this study, it assumed that there are ~ ~  i=1 X1 X2  S ( X ,X )= 1( − )x ~ ~ 1 2  +  4 max( L( X1), L( X2)) min( W ~ ,W ~ ) two generalized trapezoidal fuzzy num-  X1 X2  ,if min( W ~ ,W ~ )≠ 0,0 ~ ~ X X bers X and X , where 1 2 1 2 Otherwise, ~ X 1 = (a1 ,a2 ,a3 ,a4 ;W ~ ) ， X1 ~ = ~ ， X 1 (b1 ,b2 ,b3 ,b4 ;WX 2 ) (2-1) ~ ~ ~ 0 ≤ a1 ≤ a2 ≤ a3 ≤ a4≤1 and where S(X 1 X 2 ) ∈[ 1,0 ] and L(X1) and ~ L(X ) are defined as follows: 0 ≤ b1 ≤ b2 ≤ b3 ≤ b4≤1. Then, the degree of 2 ~ ~ ~ similarity S(X 1 X 2 ) between the generalized = − 2+ 2 + − 2+ 2 + − + − L( X1) (a1 a2 ) W ~ (a3 a4 ) W ~ (a3 a2 ) (a4 a1), ~ ~ X1 X1 fuzzy numbers X 1 and X 2 can be counted (2-2) as follows:

~ = − 2+ 2 + − 2+ 2 + − + − L( X2 ) (b1 b2) W ~ (b3 b4 ) W ~ (b3 b2 ) (b4 b1), X1 X2 The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 217

cantly influenced the fuzzy semantics of the (2-3) aesthetic evaluations of consumers ~ ~ where L(X 1 ) 和 L(X 2 ) represents the pe- (r(903)=.343 and p<.01), so H1-3 was tena- rimeters of the generalized trapezoidal fuzzy ble. Rhythm significantly influenced the ~ ~ numbers X1 and X 2 deduced from(2-1),(2- fuzzy semantics of the aesthetic evaluations 2), and(2-3) , respectively. of consumers (r(903)=.451 and p<.01), so H1-4 was tenable. Size and ratio significant- Fuzzy semantic questionnaire statistics and ly influenced the fuzzy semantics of the aes- analysis thetic evaluations of consumers (r(903)=.716 and p<.01), so H1-5 was tena- The “form features of products” of furniture ble. According to the aforementioned re- and the fuzzy semantics of “aesthetic sults, the form features of products, respec- evaluation” tively integrity, sequence, visual balance, rhythm, and size and ratio, all significantly In this study, SPSS12.0 was adopted to influenced the fuzzy semantics of the aes- analyze the data of the fuzzy semantic ques- thetic evaluations of consumers. Among the tionnaire. According to Table 1, integrity form features of products, size and ratio had significantly influenced the fuzzy semantics the most significant fuzzy semantic influ- of the aesthetic evaluations of consumers ence on the aesthetic evaluations of con- (r(903)=.396 and p<.01), so H1-1 was tena- sumers whereas visual balance had the least ble. Sequence significantly influenced the fuzzy semantic influence on the aesthetic fuzzy semantics of the aesthetic evaluations evaluations of consumers. In conclusion, H1 of consumers (r(903)=.422 and p<.01), so was tenable.

H1-2 was tenable. Visual balance signifi-

Table 1. The relationship between the “form features of products” of furniture and the “fuzzy semantics of the aesthetic evaluations of consumers”

Variable Method of Integrity Sequence Visual Rhythm Size and Ra- SPSS Anal- Balance tio ysis Fuzzy Seman- Pearson .396(**) .422(**) .343(**) .451(**) .716(**) tics of Aes- Correlation thetic Evalua- Sig. (2 - .000 .000 .000 .000 .000 tion tailed) N 905 905 905 905 905 ** Correlation is significant at the 0.01 level (2-tailed).

The calculation and analysis of the degree naire and aesthetic evaluation in the third of similarity for fuzzy logic part of the questionnaire were deduced into

the following equation (1): The fuzzy descriptive statistic equa-

~ = (a + 2a + a 4/) x5 can be trans- tions for the form features of products in the V X 1 2 3 second part of the fuzzy semantic question The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 218

~ n X =(0.40,0.69,0.69,1.00;1.00), = ∑ + + 2 formed into Fuzzy Lingustic Mean [](a1 2a2 a3) 4/ Nx5 , 1 ~ X 3 =(0.60,0.74,0.74,1.00;1.00), ~ N=905(participants) . X 4 =(0.40,0.63,0.63,1.00;1.00), =, ~ X 5 =(0.20,0.67,0.67,1.00;1.00) and ~ Assume the six triangular fuzzy num- X =(0.52,0.72,0.72,0.96;1.00) as shown in ~ ~ ~ ~ ~ ~ Figure 5. bers X1 , X 2 , X 3 , X 4 , X 5 and X , ~ where X1 =(0.60,0.80,0.80,1.00;1.00),

Table 2. Descriptive Statistics for the generalized triangular fuzzy numbers of a1 , a2 , a3 for the form features of products

Fuzzy Semantic N Triangular Fuzzy Triangular Fuzzy Triangular Fuzzy Num-

Variable Number a1 (Mini- Number a3 (Maxi- ber mum) mum) a (Mean) ~ 2 X Integrity 905 .60 1.00 .8044 ~1 X Sequence 905 .40 1.00 .6875 ~2 X Visual Balance 905 .60 1.00 .7394 ~3 X Rhythm 905 .40 1.00 .6265 ~4 X Size and Ratio 905 .20 1.00 .6718 ~5 X Form Features 905 .52 .96 .7059

~ ~ ~ ~ ~ ~ X4 X 5 X2 X X3 X1 u()x 1

X 0 0.2 0.4 0.52 0.6 3 0.67 0.69 1 0.71 0.74 0.8

~ ~ ~ ~ ~ ~ Figure 5. Three generalized triangular fuzzy number X1 , X 2 , X 3 , X 4 , X 5 and X .

~ ~ In accordance with Table 2., the fuzzy lin- and S( X , X 5 ), respectively, and be de- guistic means were transformed into trian- ~ scribed as follows. First of all, count the pe- gular fuzzy numbers, X , and a membership ~ ~ ~ ~ ~ rimeter L( X ),L( X1 ),L( X 2 ),L( X 3 ),L( X 4 ) function graph. ~ ~ ~ ~ ~ ~ ~ and L( X ) of X , X , X , X , X and, X 5 1 2 3 4 5 respectively. According to the formula (2-1), (2-2), ~ L( X )= 52.0( − 72.0 )2+12 + 72.0( − 96.0 )2+12 + 72.0( − 72.0 )+ and (2-3), the study can count the values of 96.0( − 52.0 )=2.5076 ~ ~ ~ ~ ~ ~ ~ ~ S( X , X1 ) , S( X , X 2 ),S( X , X 3 ),S( X , X 4 ), The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 219

~ ~ L(X1) = .2 4396 , L(X 2 ) = .2 6881 , ~ ~ ~ ~ ~ ~ S(X , X 2 ) = .0 8988 , S(X , X 3 ) = .0 9808 , L(X 3 ) = .2 4402 , L(X 4 ) = .2 6924 , ~ L(X 5 ) = .2 9579 ~ ~ ~ ~ ~ ~ S(X , X 4 ) = .0 8692 , S(X , X 5 ) = .0 7843 Then, the degree of similarity S( X , X1 ) , ~ ~ ~ ~ ~ ~ S( X , X 2 ), S( X , X 3 ), S( X , X 4 ), and According to Figure 5, the study can ~ ~ S( X , X 5 ) can be counted, respectively, as explore that the degrees of similarity ~ ~ follows: S( X , X 3 ) between the generalized triangu- ~ ~ ~ ~ Then, the degree of similarity S( X , X1 ) , lar fuzzy numbers X and X 3 should be ~ ~ ~ ~ ~ ~ S( X , X 2 ), S( X , X 3 ), S( X , X 4 ), and larger that the degrees of similarity ~ ~ ~ ~ ~ ~ ~ ~ S( X , X 5 ) can be counted, respectively, as S( X , X 1 ), S( X , X 2 ), S( X , X 4 ), and ~ ~ follows: S( X , X 5 ) between the generalized triangu- 4 ~ ~  ∑ − min( L( X ), L( X )) +min( W ~ ,W ~ )  lar fuzzy numbers. The Study can get  ai bi 1 X X  ~ ~ i=1 1 ~ ~ ~ ~ ~ ~ ~ ~ S ( X , X ) =  1( − ) x ~ ~  1 + S( X , X )> S( X , X )> S( X , X )> S( X , X ) 4 max( L( X ), L( X1)) min( W ~ ,W ~ ) 3 1 2 4  X X1  ~ ~ >S( X , X 5 ) of the results, which is analyzed 0.52 -0.60 + 72.0 − 80.0 + 72.0 − 80.0 + 96.0 − 00.1 .2 4396 +1 = (1 - )x 4 .2 5076 +1 from the survey.

= .0 9120

Table 3. The generalized triangular fuzzy numbers of a1 , a2 , a3 for aesthetic evaluation

Fuzzy Semantic N Triangular Fuzzy Num- Triangular Fuzzy Num- Triangular Fuzzy Variable ber a (Minimum) ber a (Maximum) Number a (Mean) ~ 1 3 2 X11 1 Originali- 905 .60 1.00 .7883 ty ~ X 112 Color 905 .60 1.00 .7741 ~ X 113 Pleasure 905 .60 1.00 .7808 ~ X11 Aesthetic 905 .60 1.00 .7811 Evaluation

~ ~ ~ ~ X112 X11 2 X11 3 X111 u()x 1

X 0 0.2 0.4 0.6 0.77 0.78 0.78 0.79 1 ~ ~ ~ ~ Figure 6. Four generalized triangular fuzzy numbers X111 , X11 2 , X11 3 and X11

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From the calculation and analysis of be larger that the degrees of similarity the degree of similarity, it is found that con- ~ ~ ~ ~ X X X X S( 11 , 111 ) and S( 11 , 112 ) between the sumers attached the greatest importance to size and ratio whereas they attached the generalized triangular fuzzy numbers. The least importance to visual balance. ~ ~ ~ ~ X X 113 X X Study can get S( 11 , )=1 > S( 11 , 111 ) According to Table 3, fuzzy linguistic ~ ~ X X means were transformed into triangular = S( 11 , 112 ) of the results, which is ana- fuzzy numbers and a membership function lyzed from the survey. graph. Assume the six triangular fuzzy ~ ~ ~ ~ numbers X , X , X and X , ~ 111 11 2 11 3 11 where X =(0.60,0.79,0.79,1.00;1.00), It is found that the aesthetic evalua- ~ 111 X =(0.60,0.77,0.77,1.00;1.00), tions respectively for originality, color, and ~11 2 X =(0.60,0.78,0.78,1.00;1.00) and pleasure that consumers had were very con- ~11 3 X11 =(0.60,0.78,0.78,1.00;1.00) as shown in sistent with their overall aesthetic evalua- Figure 6. tion.

According to the formula (2-1), (2-2), Conclusions and Recommendations and (2-3), the study can count the values of ~ ~ ~ ~ S( X , X ) , S( X , X ) and ~11 ~111 11 112 Based on this model, the research re- S( X11 , X 113 ), respectively, and be described as follows. First of all, count the pe- sults are summarized as follows. ~ ~ ~ rimeter L( X ), L( X ),L( X ) and ~ ~ 11 ~ ~ 111 112~ L( X 113 ) of X11 , X111 , X 112 , and, X 113 , re- 1. The research results show that integrity, spectively. sequence, visual balance, rhythm, and size

~ L( X )= 6.0( − 78.0 )2+12 + 78.0( − )1 2+12 + 78.0( − 78.0 )+ 1( − )6.0 = .2 4400 and ratio, which were the form features of 11~ ~ L(X ) = .2 4397 . L(X ) = .2 4404 , furniture products, significantly influenced ~111 112 L(X ) = .2 4400 .Then, the degree of simi- the fuzzy semantics of the aesthetic evalua- 113 ~ ~ ~ ~ larity S( X , X ) , S( X , X ) and tions of consumers. Size and ratio had the ~ ~ 11 111 11 112 S( X11 , X 113 )can be counted, respectively, as most significant fuzzy semantic influence on follows: ~ ~ the aesthetic evaluations of consumers S(X , X ) = .0 9949 , ~11 ~111 ~ ~ whereas visual balance had the least signifi- S(X , X ) = .0 9949 , S(X , X ) = 1. 11 112 11 113 cant fuzzy semantic influence on the aes-

thetic evaluations of consumers. It was According to Figure 6, the study can found in this study that the aesthetic evalua- explore that the degrees of similarity tions of consumers were profoundly influ- ~ ~ X X S( 11 , 113 ) between the generalized trian- enced by the form features of products.

~ ~ X X gular fuzzy numbers 11 and 113 should 2. The form features of products caused significant fuzzy semantic differences between The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 221

the aesthetic evaluations of consumers with ers decide the form features of furniture different sexes, education levels, and in- products, they should pay more attention to comes and in different ages. Therefore, the aesthetic evaluation demand of consum- when corporate decision makers make de- ers for originality, color, and pleasure. sign decisions, they should consider the aesthetic demand of different consumer groups In summary, designers are suggested for the form features of products to meet the to consider the form features of furniture demand of different consumers for the form products, including integrity, sequence, vis- features of products. ual balance, rhythm, and size and ratio, which are generally valued by consumers, 3. Based on the analysis of the degree of when the designers decide the designs of similarity for fuzzy semantic values, con- new products in order to improve the aes- sumers attached the greatest importance to thetic evaluations of consumers for the fur- size and ratio, a form feature of products, niture products and further advance the de- while they attached the least importance to sign and development performance of new visual balance, a form feature of products. products. While making the design deci- Thus, when corporate decision makers de- sions in the stage of product development, cide the form features of products, they supervisors and furniture designers can first should pay more attention to the proportion use the “model for evaluating the relation- that consumers account for in size and ratio. ship between the form features of furniture products and the fuzzy semantics of the aes- 4. According to the analysis of the degree of thetic evaluations of consumers” as the basis similarity for the fuzzy semantic values of for design decision making in hopes of in- the questionnaire, the aesthetic evaluations creasing the aesthetic evaluations of con- of consumers respectively for originality, sumers for the form features of furniture colors, and pleasure, which were the form products, advancing the willingness to buy features of furniture products, were very and enhancing the success rate of sales in consistent with their overall aesthetic evalu- order to increase enterprise profits and per- ation. Hence, when corporate decision mak- formance in the furniture marketing.

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The International Journal of Organizational Innovation Vol 6 Num 3 January 2014 225