PHILIPPINE ACADEMY of MANAGEMENT E-Journal ISSN: 2651-7124

Volume 2 Number 2 | September 2019

PHILIPPINE ACADEMY OF MANAGEMENT E-journal ISSN: 2651-7124

RESEARCH ARTICLES

Can entrepreneur demographics moderate the effect of Improvisational 7 capabilities on organizational resilience? Evidence from selected MSMEs in Barangay Caticlan, Aklan Province Raymond D. Paderna, Limuel John S. Dominguez, John Benedict C. Guevarra, Michael Angelo T. Luyun, and John Bryan P. Navarro

Influence of entrepreneurship education, societal enhancers, 24 and environmental factors to entrepreneurial activites in the Davao region Candida S. Santos

BPO company policy factors affecting high turnover rate of millennials: 43 Towards enhanced retention Mary Fatima D. Lompot

Techno stress: Examining the relationship of psychological traits with 57 compulsive smartphone usage, and their impact on college students Noel Sajid Murad, John Terence Perez, and Lora Queñano

The effect of loss modeling in health insurance 70 pricing on underwriting profitability Soleil G. Baria and Tomas S. Tiu

Philippine Academy of Management e-Journal

Volume 2 Number 2 September 2019

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The Philippine Academy of Management e-Journal is an online and open-access peer-reviewed journal that targets a twice-a-year release. As a not-for-profit publication, it does not charge readers access fees nor does it charge authors publication fees. It is supported by the funds generated by PAOM from its membership fees.

The Philippine Academy of Management e-Journal, which recognizes the need for stronger management scholarship in the country, provides opportunities to faculty members, academic staff (especially early-career academics), doctoral students, and other graduate students to have their works reviewed and published. These works come mainly from the proceedings of the annual National Business and Management Conference, which tackles a different theme every year. The themes address relevant issues in the Philippine business and management landscape.

As management scholarship is the main thrust of the PAoM, it provides an avenue for faculty members / academic staff, doctoral students, and other graduate students to hone their research skills by utilizing the PAoM e-Journal as a platform for knowledge sharing and dissemination. It also enables them to expand their repertoire of research publications, thereby helping them advance their academic careers.

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PHILIPPINE ACADEMY OF MANAGEMENT E-JOURNAL VOL. 2 NO. 2 September 2019

Editorial Board

Dr. Emilina D. Sarreal Editor in Chief De La Salle University

Dr. Raymund B. Habaradas Managing Editor De La Salle University

Advisory Editorial Board

Dr. Edgar Allan G. Castro Dr. Ma. Regina M. Hechanova Editorial Board Member Editorial Board Member De La Salle – Lipa Ateneo de Manila University

Dr. Dinah Pura T. Depositario Dr. Ricardo A. Lim Editorial Board Member Editorial Board Member University of the Philippines Los Baños Asian Institute of Management

Dr. Louis A. Divinagracia Dr. Challoner A. Matero Editorial Board Member Editorial Board Member De La Salle University University of San Carlos

Dr. Divina M. Edralin Dr. Maria Andrea L. Santiago Editorial Board Member Editorial Board Member San Beda University iAcademy and De La Salle University Dr. Benito L. Teehankee Dr. Brian C. Gozun Editorial Board Member Editorial Board Member De La Salle University De La Salle University

Mr. Ian Benedict R. Mia Editorial Assistant and Webmaster De La Salle University

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Editors’ Note

We are pleased to present the third issue of the Philippine Academy of Management (PAoM) e- Journal, which contains the work of business scholars from three different universities, namely Adamson University, Ateneo de Davao University, and De La Salle University. Our third issue tackles a diverse set of business and management themes, including entrepreneurship, financial modeling, human resource management, organizational resilience, and technology adoption.

The first article by Raymond D. Paderna, John Benedict C. Guevarra, Limuel John S. Dominguez, Michael Angelo T. Luyun, and John Bryan T. Navarro focuses on how improvisation and entrepreneurial demographics can help explain the organizational resilience of certain local micro, small, and medium enterprises, while the second article by Candida S. Santos talks about different factors (including education, society, and the environment) that spur and influence entrepreneurial activity in the Davao region.

The third and fourth articles attempt to understand the behavior of millennials and post-millennials. The article of Mary Fatima D. Lompot looks into how different HR practices such as compensation and benefits, performance management, attendance and working hours, and employee discipline influence the turnover rate of millennials in the workforce; while the article of Noel Sajid Murad, John Terence Perez, and Lora Queñano seeks to understand the potential impact of the use of modern technology on the youth by examining how different psychological traits explain the compulsive smartphone usage among college students.

Lastly, the fifth article by Soleil G. Baria and Tomas S. Tiu looks into how health maintenance organizations can increase their profitability through the use of a financial model that helps estimate the pricing of health insurance products.

We are pleased to announce that PAOM e-Journal has been receiving more contributions from individuals across the country. This increasing interest to publish and disseminate knowledge is consistent with the journal’s goal of empowering and developing management scholars and practitioners in the Philippines. We ask our contributors and readers to encourage their colleagues in academia and industry to submit articles to our journal, especially if they want to receive helpful and constructive feedback from our expanding pool of reviewers.

As we enter our second year of operations, we are also pleased to announce that the PAoM e- Journal is working on being recognized by the Andrew Gonzalez Citation Index, which assesses academic journals based on journal leadership and management, peer review and quality of published articles, and timeliness, frequency, and diversity of publications. We are also considering other indexing services such as Google Scholar and the ASEAN Citation Index. This is part of our attempt to enhance the reputation of our journal by expanding its reach and by getting some form of recognition of its quality from external bodies.

As we go onward, the journal continues to be an avenue for faculty members, management professionals, graduate students, and even undergraduate students to disseminate their research findings whether these are a result of quantitative, qualitative, or mixed methods of research.

PHILIPPINE ACADEMY OF MANAGEMENT E-JOURNAL VOL. 2 NO. 2 September 2019

Consistent with our developmental approach, the journal will continue to provide a venue for management scholars in the Philippines to share their knowledge and to help them advance in their academic or professional careers.

EMILINA D. SARREAL, DBA Editor in Chief, PAOM e-Journal

RAYMUND B. HABARADAS, DBA Managing Editor, PAOM e-Journal

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TABLE OF CONTENTS

Editorial Board 3

Editors’ Note 4

RESEARCH ARTICLES

Can entrepreneur demographics moderate the effect of 7 improvisational capabilities on organizational resilience? Evidence from selected MSMEs in Barangay Caticlan, Aklan Province Raymond D. Paderna, John Benedict C. Guevarra, Limuel John S. Dominguez, Michael Angelo T. Luyun, and John Bryan T. Navarro De La Salle University

Influence of entrepreneurship education, societal enhancers, 24 and environmental factors on entrepreneurial activities in the Davao region Candida S. Santos Ateneo de Davao University

BPO company policy factors affecting high turnover 43 rate of millennials: Towards enhanced retention Mary Fatima D. Lompot Adamson University

Techno stress: Examining the relationship of psychological 57 traits and compulsive smartphone usage, and their impact on college students Noel Sajid Murad, John Terence Perez, and Lora Queñano De La Salle University

The effect of loss modeling in health insurance pricing 70 on underwriting profitability Soleil G. Baria and Tomas S. Tiu De La Salle University

Author Guidelines 80

The Contributors 82

PHILIPPINE ACADEMY OF MANAGEMENT E-JOURNAL VOL. 2 NO. 2 September 2019

Can entrepreneur demographics moderate the effect of improvisational capabilities on organizational resilience? Evidence from selected MSMEs in Barangay Caticlan, Aklan Province

Raymond D. Paderna, Limuel John S. Dominguez, John Benedict C. Guevarra, Michael Angelo T. Luyun, and John Bryan P. Navarro De La Salle University [email protected]

Abstract

Extant literature hints that improvisation can now go beyond the jazz metaphor and be scaled for use in an organizational setting. To test this, we investigated the moderating effect of selected entrepreneur demographics on the hypothesized improvisation-resilience nexus. We polled 103 entrepreneurs, and then invited several expert respondents to corroborate the survey findings. Linear regression analysis subsequently revealed that improvisation is a highly significant predictor of organizational resilience. Selected entrepreneur demographics such as age, educational attainment, years of business experience, form of business ownership, type of business operations, and firm size were all shown by moderated regression to amplify the effect of improvisation on resilience. Key recommendations included the need to fortify small business resilience (a) by designing a resource plan for crisis threshold, (b) through the use of collective improvisation, and (c) by having a combination of different income sources within and across customer groups.

Key Words: improvisational capabilities; organizational resilience; entrepreneur demographics; crisis management

Introduction

Unexpected events and sudden changes shouldn’t catch anyone by surprise in this hyper- connected world we live in today. News, information, and real-time updates on virtually anything an entrepreneur needs to efficiently operate a business are readily available at lightning speed. And yet, supply chains are easily obstructed because business owners underestimate the wrath of a typhoon, terrorist attacks cripple financial markets, and cybercrimes immobilize global databases in the blink of an eye (Linnenluecke, 2017). Many business owners are left wondering then if there was anything they could have done to prepare for such external disruptions. The full impact of either a natural or a man-made crisis is often only grasped in hindsight but a more proactive approach involving resilience building needs to be learned so that potential damage to life, property, investment, and livelihood can be mitigated (Tibay, Miller, Chang-Richards, Egbelakin, Seville, Wilkinson, 2017). In the face of these realities, fortifying the resilience of business

7 www.paomassociation.wordpress.com establishments has now become a strategic imperative. And nowhere was this task more formidable than in the tourist gateway town of Barangay Caticlan where many business owners once hastily prepared for the return of their transiting customers after an unexpected lull in tourist arrivals.

Research Questions and Objectives

For our study, we posed the following questions:

1. Is the organizational resilience of selected micro, small, and medium enterprises in Barangay Caticlan, Aklan Province significantly affected by their level of improvisational capability? 2. Using the indicators of organizational resilience developed by Orchiston, Prayag, & Brown (2016) as well as by Lee, Vargo, & Seville (2013), what is the level of organizational resilience manifested by the entrepreneurs appraised in terms of (a) their propensity to prepare for and respond to emergent issues (planning and culture), and (b) their ability work collectively with other entities especially in a crisis (collaboration and innovation)? 2. Following the dimensions of organizational improvisation proposed by Hmieleski and Corbett (2006), what is the level of improvisation demonstrated by the entrepreneurs measured in terms of their (a) creativity and adeptness at bricolage, (b) ability to function under stress and pressure, and (c) level of spontaneity and persistence? 3. Can an entrepreneur’s age, educational attainment, years of business experience, type of business ownership, type of business operations and firm size amplify or diminish the impact of improvisational capability on organizational resilience?

By addressing these research questions, we were able to make a small contribution to the developing literature on using improvisation as a tool for strengthening small business resilience seen from the lens of nascent entrepreneurs who cannot afford to lose their scarce resources in a crisis. Furthermore, few empirical studies have so far been conducted on determining the role played by demographics in altering the dynamic between improvisation and resilience. At best, evidence provided by extant literature is anecdotal (Theil, 2007; Rogers, 2014; Conforto, Rebentisch, and Amaral, 2016; Hadida and Tarvainen, 2014) By using entrepreneur demographics as moderators in this empirical study, we moved a step closer in understanding the role of an entrepreneur’s age, educational attainment, years of business experience, type of business ownership, type of business operations, and firm size in altering the effect of improvisational capabilities on small business resilience.

Literature Review

Apart from a few anecdotal and empirical evidences provided by Rerup (2001), Best and Gooderham (2015), Frykmer, Uhr, and Tehler (2018) and Mendonca and Friedrich (2006), studies to validate the improvisation-resilience nexus for business establishments is still a developing area of interest. The relative dearth of empirical investigations on the use of business improvisation as a tool in fostering organizational resilience prompted us to treat it as a broad construct that can be applied across many situations and not just in the context of crisis management. This perspective

PHILIPPINE ACADEMY OF MANAGEMENT E-JOURNAL VOL. 2 NO. 2 September 2019 allowed us to cast a wider net during their literature review and in the process found the study of Hmieleski and Corbett (2006) which revealed that proclivity for improvisation added significant explanatory value to the entrepreneurial intentions of the research subjects. Figure 1 below depicts the framework upon which improvisational capability was assessed in their study.

Figure 1. A derivation of the theoretical framework to assess proclivity for improvisation as a predictor of entrepreneurial intention (adapted from Hmieleski & Corbett, 2006)

Following the previous works of Tierney, Farmer, and Graen (1999), Vera (2002), Unger and Kernan (1983), as well as of Moorman and Miner (1998), Hmieleski and Corbett (2006) argue that improvisation is reflected through one’s creativity, functional ability, and spontaneity during moments of uncertainty where very little time for analysis or reflection is possible. Improvisation is thus regarded as a way of using the limited information or resources one has in times of urgent need when standard protocols do not appear practical or even doable during an unexpected event.

On the other hand, we wanted to know the probable effect of entrepreneurial characteristics on small business owners’ likelihood to improvise largely influenced the selection of demographics as a moderating variable. Anecdotal evidence was again provided by Theil (2017) when he suggested that older, seasoned entrepreneurs tend to be more creative and spontaneous. However, a contrary opinion was expressed by GolinHarris CEO Fred Cook since he believes that younger, inexperienced entrepreneurs tend to improvise more (Rogers, 2014). An experiment on improvisation conducted by Conforto, Rebentisch, and Amaral (2016) seems to concur with the opinion of Cook as it revealed that individuals who do not possess significant prior experience or technical knowledge were more likely to improvise than those who were more experienced. Since creativity and spontaneity are critical building blocks of improvisational capability (Hmieleski and Corbett, 2006; Leybourne & Kennedy, 2015), these differences in opinion merit further exploration. Meanwhile, Hadida and Tarvainen (2014) alluded that organizational configurations like firm size and even form of ownership perhaps can affect improvisational capabilities since

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“three individuals improvising together, with 100 friends, or with 100 co-workers” can have different outcomes.

Rounding off the theoretical frameworks for this investigation is the work of Orchiston, Prayag, and Brown (2016). The team appears to have closely followed an initial study conducted by Lee, Vargo, and Seville (2013) and thereafter derived a functional model that can approximate the capability of a system to survive, adapt, and even renew itself after man-made or natural disturbances. Further adding to the appeal of this framework is its suitability for use in tourism- oriented locales like Barangay Caticlan. Figure 2 is an extrapolation of the model which the team proposed in their study:

Figure 2. Theoretical model to assess organizational resilience in the tourism sector (adapted from Orchiston, Prayag, & Brown, 2016 as well as Lee, Vargo, & Seville, 2013)

PHILIPPINE ACADEMY OF MANAGEMENT E-JOURNAL VOL. 2 NO. 2 September 2019

Operational Framework

The most detailed representation of all constructs used in this study can be appreciated through its operational framework. Specific measures under which the variables were assessed are shown in the diagram that follows. These measures are consistent with those mentioned in the discourse of Hmieleski and Corbett (2006), Orchiston, Prayag, and Brown (2016), Lee, Vargo, and Seville (2013), Theil (2017), Ropers 2014), Conforto, Rebentisch, and Amaral (2016), as well as by Hadida and Tarvainen (2014).

Figure 3. Operational framework to measure the moderating effect of Entrepreneur Demographics on the hypothesized link between Improvisational Capability and Organizational Resilience

Hypotheses of the Study

The group proposed 8 hypothesis statements which they postulated as probable answers to the research problems. H1 and H2 were formed based on anecdotal evidence provided by Rerup (2001), Best and Gooderham (2015), Frykmer, Uhr, and Tehler (2018) as well as Mendonca and Friedrich (2006) all of whom suggested that the propensity of individuals within a system to

11 www.paomassociation.wordpress.com improvise influences the way they prepare for, adapt to, and possibly weather a disturbance or unexpected event. Scoping studies of extant literature conducted by Van de Walle (2014) as well as by Grøtan, Størseth, Rø, and Skjerve (2008) also served as a basis for the first 2 pairs of hypothesis since “over-proceduralized” and “over-organized” establishments leave little room for concrete solutions to emerge especially during a crisis situation. Apparently, only by demonstrating creative, flexible behavior in response to an unexpected event can the chances of survival, recovery, and even renewal increase for a business entity which undergoes a setback.

H1: There is a significant relationship between improvisational capability and organizational resilience. H2: Improvisational capability has a significant effect on organizational resilience.

Similarly, the lack of scientific investigations which study the effect of entrepreneur demographics on improvisational capabilities has once again led the team to form the remaining 6 hypothesis statement based on anecdotal evidence provided by Theil (2017), Rogers (2014), Conforto, Rebentisch, & Amaral (2016) as well as by Hadida and Tarvainen, (2014). All of them suggested that the ability of entrepreneurs to improvise may either be enhanced or diminished by certain quantifiable characteristics which they possess.

H3: The entrepreneur’s age accounts for variances in the way improvisational capability affects organizational resilience. H4: Number of years in business accounts for variances in the way improvisational capability affects organizational resilience. H5: Type of business ownership accounts for variances in the way improvisational capability affects organizational resilience. H6: Type of business operation accounts for variances in the way improvisational capability affects organizational resilience. H7: Firm size accounts for variances in the way improvisational capability affects organizational resilience. H8: Educational attainment of the owners accounts for variances in the way improvisational capability affects organizational resilience.

Research Design

This study follows a descriptive-causal and multi-stage mixed methods research design. A descriptive-causal research was conducted to illustrate patterns or characteristics of variables in particular instances, as well as to ascertain the occurrence of, or change in improvisational capabilities leading to shifts in organizational resilience. A mixed-method research was also conducted to collect, analyze, and integrate both quantitative and qualitative data. Quantitative and qualitative data were collected both concurrently and sequentially which makes the research quasi- multi-stage mixed methods in design.

Concurrent with the survey conducted were the series of interviews held with local government officials based in Malay Municipality, Aklan Province. Afterwards, survey results obtained and analyzed were then reported to the lead expert so that his comments can be sent in the form of written narratives.

PHILIPPINE ACADEMY OF MANAGEMENT E-JOURNAL VOL. 2 NO. 2 September 2019

Research Locale

This study was conducted at Barangay Caticlan in Malay municipality, Aklan province. This locale was regarded by the researchers as a critical case for this particular topic since it is a tourist gateway which faced a man-made crisis when neighboring Boracay Island was closed by the national government from April to October 2018. Barangay Caticlan’s popularity as the preferred gateway to Boracay resulted in the construction of an airport that has direct flights to and from Manila. It also has two jetty ports where many boats that ferry tourists to Boracay Island are docked.

Profile of Respondents

The primary respondents for this research were the MSME owners whose establishments are located in Barangay Caticlan, Aklan Province. When this study was conducted, there were 354 registered MSMEs in Caticlan as enumerated in a list given to the team by an official representative working at the Malay Municipal Hall. The list contained the business name and addresses of all commercial establishments in Barangay Caticlan. A sample size of 188 entrepreneurs was then computed using Slovin’s formula with an error margin of 0.05. In order to randomize the selection of respondents, the team converted the list into an Excel dataset and random samples were thereafter generated by the spreadsheet.

Expert sampling was used, meanwhile, in identifying those who will cross-validate survey results through their high degree of knowledge on either the research locale or the subject matter. Written narratives were obtained from the study’s lead expert Dr. Ignatius P. Cahyanto and his insights were used to further extract meaning from the survey results. Dr. Ignatius Cahyanto is a prolific scholar in crisis management and a tenured professor of Hospitality Management at the University of Louisiana located in Lafayette City, Louisiana, U.S.A. He has written and published many scholarly articles on crisis management and the one which he co-authored with Dr. Lori Pennington-Gray of the University of Florida served as the team’s inspiration for conducting this study.

Along with Dr. Cahyanto, the group also interviewed Mr. Frolibar S. Bautista. When this study was being conducted, Mr. Bautista was a member of the Sangguniang Bayan of Malay and was a former Vice-Mayor of Malay. The group was also fortunate to have been given the chance to interview the Municipal Mayor of Malay at the time, Mayor Ceciron S. Cawaling. Both provided a local’s and a politician’s perspective on how the businesses in Caticlan fared when Boracay was temporarily closed.

We likewise had the chance to confer with Caticlan barangay captain Mr. Ralf Tolosa, Mr. Mark Ronald D. Aloba who is the head of Barangay Caticlan’s Disaster Risk Reduction Team, and Mrs. Zanita Gabito who is the head of the Caticlan-Boracay Transport Multi-Purpose Cooperative (CBTMPC).

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Method of Data Collection

Both quantitative and qualitative data were gathered for this study in observance of the protocol required by a mixed-methods research design.

A total of 188 owners of MSMEs in Barangay Caticlan were randomly chosen to answer a short survey which contained factors and items adapted from the studies of several scholars. The important parts of the instrument are described in detail below:

1. Respondents were initially asked for the following demographic information about themselves and the establishments they own: age, educational attainment, years of experience as entrepreneur, form of business ownership, type of business operations, and firm size. 2. Section 1 of the questionnaire contained 26 items which were grouped according to the 3 dimensions that measure the improvisational capability construct: creativity and bricolage, ability to function under stress and pressure, as well as spontaneity and persistence. All items and dimensions in this section were adapted from Hmieleski and Corbett (2006) who studied the proclivity for improvisation of their research subjects so that its effects on entrepreneurial intention can be determined. For this study, a 5-point Likert scale was used to indicate the extent of agreement or disagreement by the respondent for each item. 3. Section 2 of the primary research instrument contained 13 items clustered around the 2 dimensions that appraise the level of organizational resilience of establishments owned by the respondents. All items and dimensions to measure the construct were adapted from Orchiston, Prayag, & Brown (2016) who closely followed the earlier study conducted by Lee, Vargo, & Seville (2013). 4. A reliability test of the modified research instrument generated a Cronbach’s alpha coefficient of 0.83 for items measuring improvisational capability, 0.87 for items appraising organizational resilience, and 0.88 for the overall reliability of the primary research instrument.

Additionally, the group invited experts who shared their insights on the constructs under study. For this reason, an interview guide was designed by the team so that their conversation with the experts can be structured and meaningful.

Method/s of Data Analysis

After quantitative data was encoded, descriptive statistics was used to present data in a meaningful way so that initial patterns regarding the responses are established. To know if a relationship exists between the levels of improvisational capability and organizational resilience, the team used Pearson Product Moment Correlation Coefficient r. To confirm if improvisational capability influences organizational resilience, the inferential statistical tool of simple linear regression was utilized. And to test the moderating effect of entrepreneur demographics on improvisational capability as it influences organizational resilience, the team performed moderated regression analysis. Lastly, transcripts of interviews conducted were subjected to thorough content analysis so that the researchers can truly appreciate the roles played by entrepreneur demographics

PHILIPPINE ACADEMY OF MANAGEMENT E-JOURNAL VOL. 2 NO. 2 September 2019 and improvisational capability in building organizational resilience from the perspective of experts invited.

Highlights of Research Results

Our team flew to Aklan Province and embedded themselves in Barangay Caticlan to collect data from 2 to 8 September 2018. A total of 188 questionnaires were distributed to entrepreneurs who owned establishments in the research locale and out of those which were deployed, 103 were returned. Upon inspection of the retrieved survey forms, all were found to be usable for the study. The proportion of questionnaires retrieved represents 55% of the actual number of survey forms deployed by the researchers during the course of their data collection. The team’s retrieval rate appears to be higher than the 36.1% norm suggested in the seminal work of Baruch (1999) and also higher than the 35.7% response rate suggested years later by Baruch and Holtom (2008). These percentages were suggested in order to benchmark response rates for organizational-level research where the respondent is an executive/owner of an establishment.

Profile of Respondents

The typical entrepreneur who participated in the study (a) is a college graduate, (b) has around five years or less of business experience, (c) is the sole owner of his/her business, (d) owns a firm engaged in merchandising or retail, (e) is approximately 38 years of age, and (f) has an average of five employees working for him/her.

On the Levels of Improvisational Capabilities and Organizational Resilience

Survey responses were by and large clustered around the mean and this subsequently led the entrepreneurs who participated in the survey to rate their overall improvisational capabilities as above average (x̅ = 3.74). These results appear to confirm the findings of a study by Best and Gooderham (2015) where it was revealed that entrepreneurs were natural improvisers and that they considered it normal to improvise especially when faced with adversity as it profoundly affected their chances of survival. A strong tendency to engage in improvisational behavior was also recorded among the entrepreneurs studied by Hmieleski, Corbett, and Baron (2013). It was unclear, however, if their subjects improvised as an intentional strategy or as a reaction to a crisis.

Business owners who were polled believe that their establishment’s level of resilience is currently above average (x̅ = 3.79). The consolidated responses appear to be similar to those who participated in tourism-centric studies conducted by Orchiston, Prayag, and Brown (2016) in Canterbury, New Zealand, Sheppard and Williams (2016) in Whistler, Vancouver, British Columbia, and by Ruiz-Ballesteros (2011) in Agua Blanca, Ecuador. In all of these studies, resilience was demonstrated because the respondents were situationally-aware, were receptive to change and uncertainty, created opportunities for self-organization, and were willing collaborators with other groups whom they may have to work with during moments of adversity.

Additionally, the team observed that small business resilience may be partially due to the nature of businesses owned and the type of customers served by the entrepreneurs. Because most business establishments in Caticlan served the needs of local residents, they really did not have to

15 www.paomassociation.wordpress.com rely on transiting tourists for sales. Except for a number of businesses engaged exclusively in tourism-related services like tour operators, inns, dive shops, and boat (banca) rentals, many establishments can indeed generate revenue from Caticlan residents alone. Similar observations were made by Dahles and Susilowati (2015) in the Indonesian neighborhoods of Sosrowijayan and Prawirotaman who attributed the resilience shown by small businesses to their “flexible specialization, diversification, and a combination of different sources of income within and across sectors.” Indeed, the decision of local entrepreneurs to engage in businesses that cater to both locals and tourists allowed them expand or diversify during boom times and to downsize in a crisis. Tourism, therefore, was not their single source of income and this perhaps saved them from having to completely cease operations when Boracay was closed.

On the Effect of Improvisational Capabilities to Organizational Resilience

Table 1 Summary of simple regression results

Model B Multiple R p Adjusted R2 Constant 0.901 - < 0.001 Improvisational Capabilities 0.770 0.698 < 0.001 0.482

The regression output shown in Table 1 provides conclusive evidence that there is a significant association between changes in the improvisational capability of the respondents and shifts in their organizational resilience (Multiple R = 0.69, p < 0.001). In fact, nearly half of changes (Adj.R2 = 0.482) in organizational resilience can be explained by the entrepreneurs’ improvisational capabilities. This outcome necessitates the rejection of both H1 and H2 which ultimately means that for Caticlan-based entrepreneurs, their adeptness at performing extemporaneous actions and making impromptu decisions enhances their firm’s ability to prepare for as well as survive an unexpected event. These results confirm anecdotal evidences provided by Rerup (2001), Best and Gooderham (2015), Frykmer, Uhr, and Tehler (2018) as well as by Mendonca and Friedrich (2006) all of whom believe that improvisation plays a role in fostering organizational resilience. They are also consistent with Van de Walle (2014) as well as Grøtan, Størseth, Rø, and Skjerve (2008) when their scoping studies of extant literature revealed that “over- proceduralized” and “over-organized” establishments leave little room for concrete solutions to emerge especially during a crisis situation. Both theoretical and observed patterns likewise appear to match in this case, with only Sangguniang Bayan representative Mr. Floribar Bautista expressing some reservations regarding the role of improvisation in fostering resilience among small businesses in Caticlan. Lead expert respondent Dr. Ignatius Cahyanto of the University of Louisiana at Lafayette meanwhile reinforced the role of improvisation in advancing resilience by citing crisis management studies conducted by Bessant, Rush, and Trifilova (2015), Paraskevas, Altinay, McLean, and Cooper (2013) as well as by Parnell (2015).

In his seminal essay on the topic, Weick (1998) argues that improvisers will have “high confidence in skill to deal with non-routine events” and will also find it easier to work with “ongoing developments and restructuring” as a result of their readiness to abandon routines and do without plans. We echo this sentiment, believing that the proclivity to think out-of-the-box

PHILIPPINE ACADEMY OF MANAGEMENT E-JOURNAL VOL. 2 NO. 2 September 2019 both in good times and bad can expand an entrepreneur’s repertoire of possible actions if an unusual event comes along. While we acknowledge that organizational resilience can also be attained by reducing uncertainties and vulnerabilities through formal planning, following standard operating procedures alone in an unprecedented event can also be disastrous (Van de Walle, 2014). Perhaps the self-reported improvisational proclivities of the survey respondents should be utilized in enhancing their firms’ resilience across both dimensions of this study’s adapted framework.

On the Moderating Effect of Selected Entrepreneur Demographics

Table 2 Summary of moderated regression results

Moderator B p Adjusted R2 Age 0.136 < 0.001 0.490 Educational attainment 0.079 < 0.001 0.483 Years of business experience 0.166 < 0.001 0.509 Form of business ownership 0.186 < 0.001 0.506 Type of business operations 0.177 < 0.001 0.525 Firm size 0.130 < 0.001 0.485

It can be seen from Table 2 that the interaction of all six demographic factors contributed significantly to the hypothesized improvisation-resilience linkage. From the perspective of entrepreneurs in Barangay Caticlan therefore, the effect of improvisation on resilience is strengthened when entrepreneurs are older (Theil, 2017; Rogers, 2014), are more educated (Adams, 2005), have more years of business experience (Augier & Vendelo, 1999; Weick, 2005; Walle, 2014; Hmieleski and Corbett, 2008), co-own the business with others (Gerber, 2009), own a business engaged either in service (John, Grove, and Fisk, 2006; Solomon, 2016) or manufacturing (Bhadouriya and Baghel, 2014) and have more employees working for them (Hadida and Tarvainen, 2014).

Providing further validation to the survey results were the insights of all expert respondents as well as a priori knowledge on the significant role of educational attainment, years of business experience, form of business ownership, type/nature of operations, and firm size in shaping the improvisation-resilience nexus. However, we are cautious in generalizing about the effect of age as a moderator since there appears to be some differences between the emergent theoretical and observed patterns. More studies need to be conducted in order to fortify the role of age as a potent moderator in this case.

The results of the moderated regression analysis performed support all remaining hypothesis statements from H3 to H8.

Conclusions

As the study was completed, it became apparent to us that all research questions were addressed and all objectives attained. The six demographic moderators used in the study were revealed to significantly moderate the effect of improvisation on resilience. There is a strong,

17 www.paomassociation.wordpress.com positive (R = 0.698) and significant (p < 0.001) relationship between the improvisational capability demonstrated by the respondents and the organizational resilience manifested by the firms they own. Moreover, survey results show that the effect of improvisation on resilience is highly significant (p < 0.001) and sizeable (AdjR2 = 0.482). Both theoretical and observed patterns matched, thus galvanizing the role of improvisation in fostering resilience among small businesses in Caticlan.

Key Recommendations

Guided by the results of this study, we make the following key recommendations:

Recognize improvisation as a legitimate response strategy especially during adversity. At a crucial time when planned action is not possible, adapting and surviving an unexpected event may depend on one’s ability to harness intuition and creativity in using available resources (i.e. human, financial, physical, and technological) for purposes other than their intended original use (Baker, 2007; Fisher, 2012). This will serve as a buffer for small business owners who may have very few resources at their disposal especially in times of adversity.

The entrepreneur’s proclivity for improvisation must also consider the context upon which it is used. Cunha et al. (2014) suggests a variety of improvisational techniques which require different levels of creativity and spontaneity in response to divergent organizational problems. They also recommend adjusting the degree of improvisation depending on whether a particular organizational structure is more hierarchical or devolved. It can be assumed that firms with devolved structures are more open to collectively improvising as a team compared to those with more rigid hierarchies.

Results of this study reveal that the efficacy of improvisation is enhanced if done collectively. We recommend that both the owner/s and the employees collectively improvise as a response to a contingent situation so that their responses are more coordinated and coherent (Adrot and Garreau, 2009). This concerted effort to rise above a crisis through thoughtful experimentation can only happen if co-owners as well as employees are informed about the potential gains and setbacks of improvisation so that they can gain confidence in responding creatively and decisively in situations where pre-designed procedures are not an option in the interim.

Improvisational skills can be calibrated more accurately if the improviser is also aware of the potential dangers brought about by being overly non-conformist or intuitive (Giustiniano, Cunha, and Clegg, 2016; Amorim and Pereira, 2015). In this regard, the business owner must be cognizant of the limits under which improvisation may be used so that all who are empowered to do so in a crisis situation do not breach improvisation’s tolerance levels.

Developing a resource plan for crisis threshold is another key recommendation. Crisis threshold refers to levels at which an organization can remain operational as it deals with an evolving situation. Intense crises like natural calamities, terrorist attacks, and data breaches may require the business owner to quickly access scarce resources in order to stay open for as long as they can. Events that take a longer time to brew such as an economic crisis, socio-political upheavals, or a looming problem with a supplier may give firm owners some time to device an

PHILIPPINE ACADEMY OF MANAGEMENT E-JOURNAL VOL. 2 NO. 2 September 2019 appropriate response strategy. Developing a thoughtful resource and action plan which addresses as many contingent events as possible will aid in determining resource requirements, resource availability, and the best response for specific situations so that the firm can remain open despite a crisis. It is also critical to highlight the degree under which plans and procedures can be adjusted (or improvised) by the players in a crisis so that responses are appropriately calibrated in real time as a crisis unfolds.

Build a strong foundation based on adaptive resilience before advancing to more crisis- specific strategies in overcoming difficulties. Adaptive resilience is all about cultivating best practices on what an organization does and how its members think across any turbulent setting (Walker, et al. 2015). Resilience becomes adaptive when the mindsets of players are matched with coping strategies and situational responses that cuts across various types of crisis (Walker, et al., 2014). Entrepreneurs are thus enjoined to fortify the adaptive resilience of their firms (a) by becoming careful planners, thoughtful task delegators, and improvisation advocates, (b) by building trust and teamwork among all organizational members whose collaborative skills are critical in times of distress, (c) by believing in the power of continuous learning so that agility in understanding a crisis and in formulating calibrated responses is developed, (d) by recognizing that employees are an entrepreneur’s closest allies in planning for, responding to, and recovering from an unplanned event, and (e) by always working closely with external entities (i.e. local government units, NGOs, neighborhood associations) with whom the firm may have to collaborate with in times of adversity.

Small business owners can enhance their adaptive resilience by combining different sources of income within and across sectors (Dahles and Susilowati, 2015) or even customer groups. This will allow the firm owners to expand operations (by hiring more seasonal workers or stocking on additional inventory) during the peak tourist season and to downsize when only the local residents remain as their core customers.

Finally, the LGUs in Barangay Caticlan can spearhead a campaign designed to upgrade their gateway town into an actual tourist destination instead. The unspoiled beaches dotting the coastline of Barangay Caticlan as well as the lush foliage found in neighboring towns can be unique ecotourism destinations unto themselves. Doing this will allow them to have a more reliable and stable source of customers that can rival (if not surpass) their more popular neighbor.

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Limitations of Research Findings

Similar to other research undertakings, the findings of this study certainly has limitations. First, the generalizability of the survey results cannot be proven since the number of respondents fell short of the expected number. Even if the actual number of respondents who provided useable data was higher than the norm described by Baruch (1999) as well as by Baruch and Holtom (2008), this issue remains to be a proverbial thorn on the team’s side. Future researchers are advised to obtain useable responses following the computed sample size (if not more) so that results can truly represent the population under study. Second, the researchers’ limited knowledge in multivariate statistics precluded them from conducting a confirmatory factor analysis in order to know if dimensions under each variable are accurately measured by the items listed. Although the instruments were adapted from previous studies and are presumed to have been vetted quite well by other researchers, conducting another confirmatory factor analysis might reveal new typologies which could be a significant step towards indigenizing the instruments for use in the Philippine setting. Third, the level of resilience measured is presumed to be general and not crisis-specific. At most, it describes the ability of respondents to bounce back in an economic crisis since that was the prevailing condition in Barangay Caticlan when the study was conducted. Future researchers are enjoined to enrich the literature on the subject by focusing on crisis-specific resilience measures instead.

References

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Influence of entrepreneurship education, societal enhancers, and environmental factors to entrepreneurial activities in the Davao region

Candida S. Santos Ateneo de Davao University [email protected]

Abstract

This descriptive, correlational, cross-sectional study looked into the conditions that influence entrepreneurial activities in Davao Region. It applied Multiple Regression Analysis (MRA) to establish the relationships of BS in Entrepreneurship education, societal enhancers and environmental factors to the promotion of entrepreneurship. The 106 respondents from Batches 2010 to 2015 mostly aged 18 to 30 years old were purposively selected for their active business engagements from the graduates of five Higher Education Institutions (HEIs) in the region. Top reasons for their business endeavors were their desire for new product development, job generation, process improvement and entry into the international market. Most of the respondents had failed business ventures that lasted less than a year due to lack of business know-how, insufficiency of funds, lack of business profitability, lack of market acceptability and personal reasons that included family concerns. The regression model Entrepreneurial Activities = 1.014 + 0.753 Societal Enhancers was established with a coefficient of determination (r2) of 0.441 and an F value of 26.837 (p-value =.000) suggesting that all independent variables used together in this model as a set were significantly related to the dependent variable. This research established that societal enhancers characterized by social and cultural norms, technological readiness and entrepreneurial aspirations significantly influence entrepreneurial activities in Davao Region.

Key Words: entrepreneurship; SMEs; business education; startups; multiple regression

Introduction

The common Filipino, despite the improved economic rating of the Philippines, has not really felt any improvement in their lives. The increasing population, estimated by United Nations to be 101,802,706 by 2015 (Worldometers, 2015) plus weak governance, corrupt political climate, and the high unemployment rate serve as hindrances to economic growth (USAID Philippines, 2011). In "Graduate Employability in Asia", the 2009 unemployment rate of 7.7% was second to Indonesia's 8.4% (Valenzuela & Mendoza, 2012), however, many felt that this rate should have been higher if not because of the change in the definition of "unemployed" adopted in April 2005 that excluded those actively seeking jobs for at least six months, and those who were unwilling to find work of any kind (IBON, 2009).

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The Philippines, just like its Asian neighbors, recognizes the value of micro, small and medium enterprises (MSMEs) in keeping up with the changes brought by a global economy (ASEAN, 2008). This recognition is supported by the Department of Trade and Industry’s report (DTI, 2012) that 99.6% of registered enterprises are MSMEs whose growth is critical to economic development. Entrepreneurship from these MSMEs can be the driving force "behind a resilient national economy" (Shinozaki, 2012) creating businesses, jobs, and increasing productivity, innovation, and competition (Camposano, 2014).

The entry of globalization presents opportunities for ideas, markets, and technologies originally unavailable for local entrepreneurs. However, these can also pose threats as they will be among the most developed, experienced and competitive international corporations that can take advantage of the more inexperienced companies (McCubbrey, 2015). The global knowledge economy looks therefore at universities in providing competent, skilled, and knowledgeable human resources within this highly competitive market (Tan & French-Arnold, 2012). For sustained economic growth, even experts of the European Council (ICF GHK, 2008) zeroed in integrating entrepreneurship in all levels of the educational system as part of the strategic plan of creating jobs. This idea of global competitiveness puts pressure on the academe to review policies, quality, accreditation, and qualifications (Lam, 2010) while coping with technological changes in the modern environment. The country’s K to 12 implementations were seen to be necessary as the previous high school education crammed in 10 years produced minors who were neither ready for work, nor higher education nor entrepreneurship ventures (DepEd, 2010). Furthermore, it was necessary to facilitate student transfers and exchange programs for ASEAN integration. However, adopting these changes requires a transformation process necessitating a review of graduates with the expected global competencies (Pastrana & Manabat, 2012).

These identified challenges and the attention to sustained economic growth gave birth to global interest in entrepreneurship such as that from the Global Entrepreneurship Monitor (GEM) which aims at establishing a relationship between entrepreneurship and economic development. It takes a look at the attitudes, activities, and aspirations of adults to understand what would propel potential entrepreneurs into becoming actual entrepreneurs.

GEM was developed from the traditional framework that National Economic Growth, in terms of its Gross Domestic Product (GDP) and job creation, results in business activities. In this framework, the 12 pillars of Global Competitiveness adopted from the World Economic Forum (WEF) were used to classify the countries into economic profiles (Schwab, 2015) described by the presence of GEM's so-called Entrepreneurial Framework Conditions (EFCs). These pillars are the presence (or absence) of basic economic requirements, efficiency enhancers, innovation, and entrepreneurship. GEM takes a detailed examination of the interplay of entrepreneurial opportunities, the perception of capacity, and conducive EFCs to answer questions on the extent of variation between countries that affect entrepreneurial activities, economic progress, and engagement level of entrepreneurship. GEM’s Theoretical Framework (Figure 1) showed the relationships between the three indicators that make up the Entrepreneurship Profile: the entrepreneur’s personal attributes; the entrepreneurs’ drivers of entrepreneurial activities; and the entrepreneur’s motivation of doing business – all subjects of interest in this study.

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Another inducement behind this research was from a UNESCO report stating that part of the graduates un-employability in the Philippines was mainly a result of skills mismatch (Valenzuela & Mendoza, 2012), either the graduates lack the general skill set required by the job or that there is a mismatch between the number of graduates and available jobs. This mismatch

BASIC REQUIREMENTS • Institutions • Infrastructure • Macroeconomic Stability ESTABLISHED FIRMS • Health and Primary Education

Employee Entrepreneurial Activity

EFFICIENCY ENHANCERS • Higher Education and Training • Goods Market Efficiency • Labor Market Efficiency • Financial Market ENTREPRENEURSHIP Sophistication PROFILE • Technological Readiness • Market Size • Attitudes (Perceived SOCIO- SOCIAL, Opportunities and ECONOMIC CULTURAL Capabilities; Fear of DEVELOPME POLITICAL Failure; Status of NT CONTEXT Entrepreneurship) (Jobs, Innovations, INNOVATION AND Social Value) ENTREPRENEURSHIP • Entrepreneurial Finance • Activity • Government Policy (Opportunity / • Government Necessity-Driven; Entrepreneurship Early Stage; Programs Inclusiveness; Industry, • Entrepreneurship Exits) Education • R&D Transfer • Internal Market Openness • Physical Infrastructure for • Aspirations Entrepreneurship (Growth; Innovation; • Commercial, Legal International Infrastructure for Orientation; Social Entrepreneurship Value Creation)

• Cultural and Social Norms

Figure 1. Theoretical Framework Source: Global Entrepreneurship Monitor (GEM) Conceptual Framework

PHILIPPINE ACADEMY OF MANAGEMENT E-JOURNAL VOL. 2 NO. 2 September 2019 however, can be identified through graduate tracer studies that can check on the employability of the HEIs’ graduates (Banzuela-de Ocampo, Bagano, & Tan, 2012) and consequently, serve as assessment tools for reviews and reforms in structure, paradigm, and pedagogy (Ramirez, Cruz, & Alcantara, 2014), and in this particular case, improving the conversion rates of BS in Entrepreneurship graduates into actual entrepreneurs.

This requires a look into the BS in Entrepreneurship program under CHED Memorandum Order No. 17 (CMO 17), Series of 2005. CMO 17 states that it aims to develop motivated entrepreneurs trained to spot opportunities, adept in preparing business plans, and competent in starting and managing their businesses. Through a study funded by the USAID, Management Systems International (MSI) has helped countries eradicate poverty towards better lives and crafted the 10 Personal Entrepreneurial Competencies (PECS) used as standards of Entrepreneurship training programs worldwide (MSI, 2015) and categorized in GEM’s Theoretical Framework as Entrepreneurship Attitude.

Aside from these expected personal competencies, other indicators can be used to help evaluate the success of an educational program. In the 2013 SEAMEO RETRAC in Ho Chi Minh City attended by educators all over Asia, the successful implementation of Miriam College's Entrepreneurship Program presented five building blocks of Entrepreneurship Curriculum (Lopez, Gatchalian, Ibanez, & Serrano, 2013). The first included course definition and assessment of training based on the expected outcomes outlined by CHED. The second included academic, administrative and institutional support for entrepreneurship with CHED providing HEIs the directives for policies on resource materials, laboratory and faculty development. The third building block included differentiated instruction incorporating the HEI's own brand of values and vision. The fourth included pedagogies and learning tools that are dynamic, business-oriented, demanding, highly experiential, personal and results-oriented. The fifth included partnership and collaboration with the government, the business community, and other stakeholders that would assure learnings through immersion and exposure to business.

To improve the conversion rate of trained entrepreneurs into actual entrepreneurs, understanding of what would motivate these young graduates into going into business is crucial. The typical Filipino gets moral support and inspiration from societal enhancers such as social and cultural norms set by the family, community, and media. How these societal enhancers view entrepreneurship as a worthy and respectable endeavor or as a risky path to take, affect entrepreneurial pursuits. Shared business experiences or industry updates especially from the media, can discourage or inspire. The possible "lack of support" can add to the "fear of failure". Thus, an entrepreneur’s motivation could be an aspiration for own-self, family or society or could be in terms of social improvement, financial independence, poverty alleviation or sustainable economic advancement (Teo & Tan, 2013). Technological readiness of the public is also an enhancer not only in terms of the physical infrastructure, improvement of productivity and economic growth (Link, 2007) but mostly in mindset, openness and acceptance of the commercial applications and functions of technological development or of a particular innovative activity the entrepreneur is engaged in.

The overall state of the environment can affect business engagements. The identified EFCs found to be important to entrepreneurship included financial and commercial infrastructures in

27 www.paomassociation.wordpress.com reference to the sources of capital and investments, ease of doing business, openness to new players, and changes in markets (Singer, Amoros, & Moska, 2015). Government policies play a role in the entrance and exits of investors and can bar or welcome investments and developments by policies, laws, and regulations in support or in opposition of an industry. Openness to R&D transfer can be the seedbed of innovations and can surely benefit from the collaboration of academe and industry sectors. The important role of legal and physical infrastructures in defining standards, processes, and efficiency of transactions can help protect business players and their environment. Furthermore, delays in the justice system not only increase the costs of going into legal means but also diminish the public's trust in the entire system (USAID Philippines, 2011). With the improvement in the business environment comes positive changes making goods and services affordable, promoting fairer competition that results in an overall public improvement (Mitra, 2011).

In developing its Conceptual Framework (Figure 2), this research used GEM’s findings in combination with CHED’s expected outcomes from the BS in Entrepreneurship program and the possible motivational value of society and immediate community to entrepreneurs.

• BS Entrepreneurship Education o Attitude-Building o Pedagogy o Partnerships & Collaboration • Societal Enhancers Entrepreneurial o Social & Cultural Norms Activities o Aspirations o Technological Readiness • Jobs • Environmental Factors • Innovation o Financial & Commercial • Competencies Infrastructures o Government Policies o R & D Transfer o Legal & Physical Infrastructures

Figure 2. Conceptual Framework

This research classified the independent variables into BS Entrepreneurship Education, Societal Enhancers and Environmental Factors – all deemed important to entrepreneurship. These independent variables were gauged as to their significant influence to the dependent variable, Entrepreneurial Activities – in terms of the number of jobs created, the increase in innovative activities and in the improvement of the competencies of entrepreneurs.

The variable BS in Entrepreneurship Education considered three indicators - Attitude- Building, Pedagogy, and Partnerships & Collaboration, as building blocks of a successful

PHILIPPINE ACADEMY OF MANAGEMENT E-JOURNAL VOL. 2 NO. 2 September 2019 implementation of the BS in Entrepreneurship degree program. The variable Societal Enhancers was measured in terms of acceptability of Social & Cultural Norms, Aspirations of potential entrepreneurs, and Technological Readiness of the market. The variable Environmental Factors took into account combinations of the EFCs identified by GEM’s years of research - Financial and Commercial Infrastructures, Legal and Physical Infrastructures, Government Policies and the rate of R&D Transfer.

The model generated will look into answering the general question, "What can influence entrepreneurial activities in Davao Region?" from the perspective of the graduates of BS in Entrepreneurship themselves. This study will validate the following null hypotheses:

H1: There is no significant relationship between the independent variables (BS in Entrepreneurship Education, Societal Enhancers, and Environmental Factors) and the dependent variable Entrepreneurial Activities in Davao Region.

H2: The independent variables - BS in Entrepreneurship Education, Societal Enhancers and Environmental Factors, do not significantly influence Entrepreneurial Activities in Davao Region.

Davao Region is located in the southeastern part of the island of Mindanao and is composed of Compostela Valley, Davao del Norte, Davao del Sur, Davao Oriental and the newly created Davao Occidental. It is a melting pot of different tribes not only within Mindanao but also from Luzon and Visayas. The Region is blessed with numerous scenic spots and is engaged in agro- industrial business, tourism, mining, fishing, and agriculture. It is a business hub in the export of fruits and vegetables with major seaports at Sasa, Panabo, and Mati (Alojado Publishing International, 2015) and is an ideal seedbed for young entrepreneurs.

Identifying the presence or absence of a relationship between BS Entrepreneurship Education, Societal Enhancers, Environmental Factors, and Entrepreneurial Activities could provide a better understanding of what can promote and influence entrepreneurship that can potentially result into socio-economic development in the Region.

Methodology

The research design was descriptive, correlational, and cross-sectional, and utilized Multiple Regression Analysis (MRA) as a multivariate statistical tool to measure and interpret the primary quantitative data. Descriptive data were collected to add elements to the findings. Perception was scored using the self-constructed questionnaire and measured on a five-point Likert scale aimed at quantifying the extent to which the three independent variables deter or embolden respondents to engage in business. The questionnaire was validated by experts and reflected a strong Cronbach's Alpha reliability post hoc score of 0.932. The 106 respondents from Batches 2010 to 2015 were purposively selected from the 510 graduates of BS in Entrepreneurship from five Higher Education Institutions (HEIs) in the region (CHED Regional Office, 2016) for their active business engagements. The demographic data were analyzed in terms of frequency and percentages. The means of the indicators per variable were computed to form a total of four sets of means to represent the independent variables and the dependent variable.

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MRA was used to come up with the "best possible fit" and to explain the amount of change on the dependent variable on the basis of the amount of change on the independent variables. Normality, collinearity, homoscedasticity tests and the sufficiency of observations were made to test the applicability of MRA. After which, the Enter method was used to determine which independent variables made any significant contribution to the model. Each hypothesis was tested for significance. The data was split into two and each set was processed using MRA Enter method. The results were compared with the main MRA result to check if the data can be generalized.

Results

Out of 106 respondents, sixty (57%) were females, forty-three (41%) were males and three (3) respondents left this question blank. Forty-two percent came from Batch 2014 (Table 1). Eleven (11) respondents did not indicate when they graduated.

Table 1 Number of Respondents per Batch

Batch Number Number of Respondents Percentage (%) 2010 5 4.72 2011 7 6.60 2012 8 7.55 2013 18 16.98 2014 45 42.45 2015 12 11.32 BLANK 11 10.38 TOTAL 106 100.00

Table 2 shows that 89 respondents were 18 to 25 years old, ten were 26 to 30, and two were above 30 years old. Five (5) respondents left this portion blank.

Table 2 Age of Respondents Age Range Number of Respondents Percentage (%) 18 to 22 years old 40 37.74 23 to 25 years old 49 46.23 26 to 30 years old 10 9.43 Above 30 years old 2 1.89 BLANK 5 4.72 TOTAL 106 100.00

A total of 85.85% were involved in business either as sole owner, manager or part-owner (Table 3).

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Table 3 Business Engagement

Number of Percentage Total Business Engagement Respondents (%) Percentage (%) Sole owner of a business 20 18.87 Managing their family business 32 30.19 Part-owner of a business but not involved in 85.85 19 17.92 the operations of the business Employed and in business at the same time 20 18.87 Others 14 13.21 14.15 BLANK 1 0.94 TOTAL 106 100.00 100.00

Fourteen indicated that they were not engaged in business at the moment. Out of these fourteen respondents, thirteen of them were either employed or pursuing further education in preparation for their next business start-up. One was recovering from surgery but will soon help manage their family business (Table 4).

Table 4 Plans of the 14 Respondents Currently Not in Business

Number of Business Plans Respondents Employed and presently working on start-up business within the year 10 Studying but working on start-up business within this year 3 On sick leave but was helping family business prior to surgery 1

More than 65% of those engaged in business get their monthly salary while 19.81% had not received any (Table 5). A respondent indicated that it was her mother who manages the finances. Eleven (11) respondents left this question unanswered.

Table 5 Compensation from Business

Number of Percentage Total Percentage Category Description Respondents (%) (%) has not paid my salary, so far 21 19.81 19.81 given me salary for the past 3 - 24 months 48 45.28 given me salary for the past 25 - 42 months 17 16.04 68.87 given me salary for more than 42 months 8 7.55 others 1 0.94 0.94 BLANK 11 10.38 10.38 TOTAL 106 100.00 100.00

Fifty-six respondents (52.83%) started their businesses in College or right after graduation (Table 6) while at total of thirty-six respondents (33.96%) started years after. The three respondents indicated that they were in business for less than a year.

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Table 6 Years in Business Category Number of Respondents Percentage (%) Since College or right after graduation 56 52.83 1 – 2 years after graduation 29 27.36 3 – 5 years after graduation 7 6.60 More than 5 years after graduation 1 0.94 Others 3 2.83 BLANK 10 9.43 TOTAL 106 100.00

Table 7 shows that 36.79% of the respondents engaged in business to generate jobs, 40.57% to develop new products or service and 20.75% to develop new processes. Only 14.15% were interested to enter the international market.

Table 7 Motivating Factors for Engaging in Business Motivating Factor Number of Respondents Percentage (%) To generate jobs 39 36.79 To develop a new product or service 43 40.57 To enter the international market 15 14.15 To develop a new process 22 20.75 Others 4 3.77 BLANK 16 15.09

Seventy-seven of the respondents (Table 8) experienced failure in business. The 29 respondents who indicated that they did not experience failure in business were mostly involved in established family-owned businesses.

Table 8 Failed Business Ventures Number of Failed Businesses Number of Respondents Percentage (%) Never 29 27.36 Once 60 56.60 2 – 3 times 17 16.04 more than 3 times already 0 0.00 BLANK 0 0.00 TOTAL 106 100.00

Table 9 shows that fifty-four respondents (70.13%) indicated that their failed business occurred during the first few months from start-up while twenty-one respondents (27.27%) indicated that their failed businesses occurred a year or two after start-up.

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Table 9 Time Frame of Failed Business from Start-up

Time Frame Number of Respondents Percentage (%) less than a year 54 70.13 1 – 2 years 21 27.27 3 – 5 years 1 1.30 more than 5 years 1 1.30 TOTAL 77 100.00

Lack of financial resources, lack of business know-how, lack of profitability, lack of market acceptability and personal (including family concerns) were listed as the Top Five reasons for business failure (Table 10).

Table 10 Reasons for Business Failure

Reason Number of Respondents Percentage (%) Lack of financial resources 34 44.16 Lack of business know-how 34 44.16 Lack of business profitability 32 41.56 Lack of market acceptability 26 33.77 Personal (including family concerns) 24 31.17 Insufficient financial control 23 29.87 Lack of quality suppliers 13 16.88 Lack of qualified labor force 6 7.79 Others 6 7.79

The Kolmogorov-Smirnov and Shapiro-Wilk tests on standardized residuals were performed to determine normality. The results showed (Table 11) that the p values of 0.200 and 0.180 for the Kolmogorov-Smirnov and Shapiro-Wilk tests, respectively, were not significant. Since these values were greater than 0.05, the null hypothesis that corresponds to a normal distribution of the variable was accepted.

Table 11 Tests of Normality

Kolmogorov-Smirnova Shapiro-Wilk Statistic df Sig. Statistic df Sig. Standardized Residual .068 106 .200* .983 106 .180 * This is a lower bound of the true significance. a. Lilliefors Significance Correction

A close fit between the dotted line and the 45-degree curve (Figure 3) was observed suggesting normality (Janssens et al., 2008). The histogram for the dependent variable (Figure 4) also manifested no normality problem. Thus, the data passed the normality tests.

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Figure 3. Normal P-Plot for Entrepreneurial Activities

Figure 4. Histogram for Entrepreneurial Activities

On Homoscedasticity Test, the ZPRED(X) and ZRESID(Y) were measured on the scatterplot to test the presence of a pattern. Since the graph did not show a pattern, all relevant variables in Model 1 (Figure 5) were determined parts of the model.

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Figure 5. Scatterplot of Entrepreneurial Activities

A simple test to check if there were at least five times as many observations per parameter for sufficiency of observations (4 parameters x 5 = 20) was determined to be satisfied since there were 106 respondents. The coefficient of determination (R2) for Model 1 was 0.441 (Table 12). Its ANOVA (Table 13) shows an F value of 26.837 (p-value =.000) which meant that all the independent variables used together as a set was significantly related to the dependent variable.

Table 12 Model Summaryb

R Adjusted R Std. Error of the Durbin- R Change Statistics Square Square Estimate Watson Model R F Sig. F Square df1 df2 Change Change Change 1 .664a .441 .425 .435532093060264 .441 26.837 3 102 .000 1.668 a. Predictors: (Constant), Environmental Factors, BS in Entrepreneurship Education, Societal Enhancers b. Dependent Variable: Entrepreneurial Activities

Table 13 ANOVAa

Model Sum of Squares df Mean Square F Sig. Regression 15.272 3 5.091 26.837 .000b 1 Residual 19.348 102 .190 Total 34.620 105 a. Dependent Variable: Entrepreneurial Activities b. Predictors: (Constant), Environmental Factors, BS in Entrepreneurship Education, Societal Enhancers

The regression model established (Table 14) was: Entrepreneurial Activities = 1.014 + 0.753 Societal Enhancers. This model implies that for each unit of increase in the perception of young entrepreneurs towards Societal Enhancers, there is a corresponding 0.753 increase in entrepreneurial activities. This meant that Societal Enhancers in the form of Social & Cultural

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Norms, Aspirations of the respondents and Technological Readiness of the society were perceived to influence entrepreneurial activities in Davao Region.

Table 14 Coefficients

Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta 1.014 .373 2.716 .008 -.009 .067 -.011 -.135 .893 .753 .108 .627 6.952 .000 .055 .076 .068 .724 .471 a. Dependent Variable: Entrepreneurial Activities

Table 15 shows that there were no Variance Inflation Factors (VIF) greater than 5 that could indicate a strong presence of collinearity. The highest VIF for the model was 1.612 and all tolerance levels show values greater than 0.50. Tolerance values of 0.50 or less would be indicative of a multicollinearity issue (Janssens, Wijnen, Pelsmacker, & Kenhove, 2008). Thus, the researcher could say that there was no multicollinearity issue for the Model.

Table 15 Collinearity Statistics

Collinearity Correlations Model Statistics Zero-order Partial Part Tolerance VIF (Constant) BS in Entrepreneurship Education .222 -.013 -.010 .812 1.231 1 Societal Enhancers .662 .567 .515 .673 1.486 Environmental Factors .417 .071 .054 .620 1.612

The data was split into two using research randomizer software and each was processed using MRA enter method. The data for Split Sample 1 and Split Sample 2 when compared with the Main Sample were not vastly different (Table 16). Thus, data can be generalized.

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Table 16 Comparison of Samples

Main Sample Split Sample 1 Split Sample 2 Model Component (n=106) (n=53) (n=53) Model 1 (using Enter Method) R2 .441 .432 .483 Adjusted R2 .425 .398 .451 Standard error of the estimate .435532 .463315 .406204 BS in Entrepreneurship Education: independent variable Beta Coefficient Not entered Not entered Not entered T Value P Value Social Enhancers: independent variable Beta Coefficient .753 .692 .810 T Value 6.952 4.497 5.240 P Value .000 .000 .000 Environmental Factors: independent variable Beta Coefficient T Value Not entered Not entered Not entered P Value

Table 17 was used as a guide in the interpretation of the correlation coefficients (Mukaka, 2012). Correlation (Table 18) between independent variables, and between independent and dependent variables were performed. The results show that the independent variables had either low positive or moderate positive correlation with each other. On the other hand, the correlation coefficients between independent and dependent variables show that variables were either negligible, low positive or moderate positive.

Table 17 Guidelines for the Interpretation of Correlation Coefficients (Mukaka, 2012)

Correlation Coefficient Interpretation .90 to 1.00 (−.90 to −1.00) Very high positive (negative) correlation .70 to .90 (−.70 to −.90) High positive (negative) correlation .50 to .70 (−.50 to −.70) Moderate positive (negative) correlation .30 to .50 (−.30 to −.50) Low positive (negative) correlation .00 to .30 (.00 to −.30) negligible correlation

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Table 18 Correlation

Correlation between Independent Variables Remarks 1. B.S. in Entrepreneurship Education had low positive correlation with Null Hypothesis rejected Environmental Factors (.420, p value .000) and Societal Enhancers (.326, p value .000) 2. Societal Enhancers had moderate positive correlation with Null Hypothesis rejected Environmental Factors (.563, p value .000). Correlation between Independent and Dependent Variables Remarks 1. Entrepreneurial Activities was moderately correlated with Social Null Hypothesis rejected enhancers (.662, p value .000), weakly correlated with Environmental Factors (.417, p value .000), and very weakly correlated with B.S. in Entrepreneurship Education (.222, p value .011)

Discussion

The independent variable Societal Enhancers with indicators Social & Cultural Norms, Aspirations, and Technological Readiness was found to be significant in increasing the dependent variable, Entrepreneurial Activities.

Social and cultural norms as set by the family, friends, and media were perceived to be important in promoting the acceptability of entrepreneurship as a lifegoal. This finding is in support of the study on culture (Banzuela-de Ocampo, Bagano, & Tan, 2012) on Filipino-Chinese citizens and on entrepreneurs of Indian descent (Mallya, 2011) where it showed the important role of culture in the promotion of entrepreneurship. This was further supported by the study on the Entrepreneurship graduates of St. Paul University in Manila (Bignotia, 2014) which established that the majority of the graduates found the lack of family support as inhibitor. This sentiment was similarly reflected by 31% of the research respondents who identified personal problems including family concerns as one of the reasons for business failure (Refer to Table 10).

Aspirations were similarly perceived as motivating factors of entrepreneurship in terms of work-life balance, providing employment, creating products and competing in the global market. The significance of aspirations could be related to the case study about Sikap Buhay (Pascual, 2008) which accounted its success to the self-confidence gained by the women to the support that family members gave them.

Technological Readiness measured in terms of supply of skilled labor, training on technological developments, and collaboration on researches was related to the aspiration to go into business for product development or new processes (Table 7). The perceived importance of Technological Readiness was in accordance with the respondents’ answer on the lack of quality suppliers, labor force and market acceptability as reasons behind business failure (Table 10). Similar to the study "Entrepreneurial Intentions among Entrepreneurial Management Students" (Magsino & Opulencia, 2015), the respondents considered lack of capital as the most general business challenge and recommended incorporating into the education system the participation of government in providing information regarding developments on this area.

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The MRA resulted into a model that showed that all the independent variables, BS in Entrepreneurship Education, Societal Enhancers and Environmental Factors, used together in this model as a set, were significantly related to the dependent variable, Entrepreneurial Activities. Overall, the model's coefficient of determination (R2) of 0.441, showed that though the independent variable Societal Enhancers lacked the predictive power on the dependent variable, the results show that it could explain its positive influence on Entrepreneurial Activities in terms of the number of jobs, the promotion of innovation and the competencies of entrepreneurship graduates. It might not have a good practical significance because of its low explanatory value, still, the model accounted for 44.1% of the variances. In the field of Social Science, similar numbers could have important implications and, thus, the model should not be discarded.

This research established that there was a significant relationship between the three independent variables - BS in Entrepreneurship Education, Societal Enhancers, and Environmental Factors and the dependent variable Entrepreneurial Activities. And that Societal Enhancers significantly influence Entrepreneurial Activities, These have established sufficient reasons not to accept the two null hypotheses.

Conclusion

Entrepreneurs like Brijmohan Lal Munjal invested in family and community members to build his company, the Hero Group. G.D. Birla established the Birla Brothers Ltd. armed with generations of business traditions. These are examples that can show that the entrepreneur's motivation stems out of encouragement from family members, the circle of friends, and support from the government including the media. This research sufficiently showed that the indicators of entrepreneurial activities were functions of how sectors of society view entrepreneurship in general. This can indicate why innovative ideas and competency development could still emerge even with weak financial and commercial infrastructures. And that a breeding ground for creative ideas can possibly emerge from encouragements from social cliques, urging aspirations not only to dream but to transform ideas into realities. This can explain how successful entrepreneurs armed only with the burning aspiration to making their vision a reality can excel even without formal training in entrepreneurship education.

The Philippines can capitalize on the fact that it got the highest score in the promotion of entrepreneurial education in comparison to other ASEAN countries (ERIA & OECD, 2014). If Entrepreneurship education in the Philippines is expected to breed future economic movers, the learning environment should involve all stakeholders – teachers, school administrators, government including the students' parents, to be dynamic participants to the attainment of program objectives. More in-depth study may even come up with a basis for the academe to call for integration of entrepreneurship starting from Basic Education (Xavier, Guelich, Kew, Nawangpalupi, & Velasco, 2015). The case study conducted by Dela Salle University (Aure, Alonday, Kang & Mapue, 2013) can be replicated as it dwelt primarily on the importance of motivation building as anchor towards sustainability of entrepreneurial endeavors.

This research has established that social and cultural norms are enablers of entrepreneurship especially in instilling the worthy aspirations to the youth. This research implies that BS in Entrepreneurship course program can be the springboard where personal attitude,

39 www.paomassociation.wordpress.com capabilities, values, and character (Gatchalian & Lopez, 2013) are built through social support. This research offered an insight behind the cultural value of family business owners allowing their children to play in the workplace to develop the attitude, interest, and motivation towards entrepreneurship. Succession programs of family enterprises can focus on instilling the right social and entrepreneurial values to family members from childhood. Furthermore, media can be used to help inspire young entrepreneurs for their innovative and opportunistic ventures. Although the research did not strongly establish the predictive power of Societal Enhancers in creating jobs, increasing innovation and improving competencies, still the research was successful in pointing out the important role of these enhancers in establishing a conducive entrepreneurial atmosphere within the Region. This research showed that a conducive environment of support spells the attainment of an entrepreneurial mindset.

References

Alojado Publishing International. (2015). Davao Region. Retrieved from Philippine Islands: http://www.philippine-islands.ph/en/davao_region-philippines.html ASEAN. (2008). ASEAN Economic Community Blueprint. Jakarta: ASEAN Secretariat 2008. Aure, P., Alonday, I., Kang, E., & Mapue, M. (2013). A Look into the Emergence of Sustainability Entrepreneurship in the Philippines. Academia. Retrieved Sept 1, 2015, from https://www.academia.edu/4409616/A_look_into_the_emergence_of_ sustainability_entrepreneurship_in_the_Philippines Bakshi, D. (2015, Sept 17). Building Positive Attitude towards Excellence. Retrieved from DKBakshi.net: http://www.dkbakshi.net/article3.htm Banzuela-de Ocampo, M. d., Bagano, A. J., & Tan, A. L. (2012). Culture of Entrepreneurship versus Employment. Fifth Taiwan – Philippines Academic Conference. New Taipei City: Digital Humanities and Cultural Studies. Bignotia, A. (2014). Entrepreneurial Engagement of Entrepreneurship Graduates Batches 2008 – 2012 of St. Paul University Manila. International Conference on Multidisciplinary Trends in Academic Research. Bangkok, Thailand. Camposano, J. M. (2014, Jan 20). SMEs Seen as Major Economic Growth Driver. Retrieved from Philstar.com: http://www.philstar.com/business-usual/2014/01/20/1280682/smes-seen- major-economic-growth-driver DTI. (2012). SME Statistics. Retrieved from DTI: http://www.dti.gov.ph/dti/index.php/ resources/sme-resources/sme-statistics ERIA and OECD. (2014). "Promotion of Entrepreneurial Education" in ERIA, S

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IBON. (2009). Majority of new jobs created non-earning, low-paying, part-time work. Retrieved from http://bulatlat.com/main/2009/07/21/majority-of-new-jobs-created-non-earning-low- paying-part-time-work/ ICF GHK. (2008). Entrepreneurship in Higher Education, Especially Within Non-Business Studies. European Commission Enterprise and Industry Directorate-General. Jannsens, W., Wijnen, K., De Pelsmacker, P., & Van Kenhove, P. (2008). Marketing Research with SPSS. Harlow: Pearson Education Unlimited. Lam, Y. Y. (2010). Impact of Globalization on Higher Education: An Empirical Study of Education Policy & Planning of Education of Design Education in Hongkong. International Education Studies, Vol 3, No. 4. LGSP-LED - Philippines. (2010). State of Local Economic Development (LED) in the Philippines. CIDA DILG ACCCCUI. Licaros -Velasco, A., Conchada, M. I., Gozun, B., Largoza, G., Perezs, J., & Sarreal, E. (2014). Entrepreneurship in the Philippines, 2013 Report. Manila: De La Salle University. Link, A. (2007). Entrepreneurship, Innovation and Technological Change. Center for Applied Economics, KU School of Business, University of Kansas. Lopez, A., Gatchalian, M. L., Ibanez, M. C., & Serrano, M. L. (2013). Development of an Entrepreneurship Curriculum Framework and Approach for Global Competitiveness, the Philippine Experience. Impacts of Globalization on Quality Higher Education. Ho Chi Minh City: SEAMEO RETRAC. Magsino, R., & Opulencia, K. (2015). Entrepreneurial Intentions Among Entrepreneurial Management Students Class 2014: A Qualitative Longitudinal Study. Journal of Arts, Science and Commerce, 6(1), 93 - 99. Mallya, L. S. (2011). Successful Entrepreneurs of Indian Origin: A Case Study. Chennai. Retrieved Sept 1, 2015, from http://www.drmgrdu.ac.in/Thesis_doc/Documents/ Suresh%20Mallaya%20Ph.d%20Thesis/final.pdf McCubbrey, D. (2015, July 21). Negative and Positive Effects of Globalization for Developing Country. Retrieved Sept 12, 2015, from Business Fundamentals, Boundless: https://www.boundless.com/users/235420/textbooks/business-fundamentals/international- business-for-the-entrepreneur-14/globalization-opportunities-and-threats-to-developing- country-business-55/negative-and-positive-effects-of-globalization-for-developing-c Mitra, T. (2011). Message from AusAID. Built on Dreams, Grounded in Reality: Economic Policy Reform in the Philippines. The Asia Foundation. MSI (2015). The Entrepreneurship Development Program. Retrieved from MSI-INC: http://www.msiworldwide.com/approach/trainings-courses/entrepreneurship- development-program/ Mukaka, M.M. (2014). Statistics corner: A Guide to appropriate use of correlation coefficient in medical research. Malawi Medical Journal, 24 (3), 69-71. Pascual, C. G. (2008). Social and Economic Empowerment of Women in the Informal Economy: Impact Case Study of Sikap Buhay. Manila: ILO, Subregional Office for South-East Asia and the Pacific. Ramirez, T., Cruz, L., & Alcantara, N. (2014). Tracer Study of RTU Graduates: An Analysis. Journal of Arts, Science and Commerce, 5(1), 66 - 76. Schwab, K. (2015). Global Competitiveness Report 2014-2015. Retrieved from http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2014-15.pdf

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Shinozaki, S. (2012). A New Regime of SME Finance in Emerging Asia: Empowering Growth- Oriented SMEs to Build Resilient National Economies. Asian Development Bank. Singer, S., Amoros, J. E., & Moska, D. (2015). Global Entrepreneurship Report 2014 Global Report. Singer, Amoros, Moska and Global Entrepreneurship Research Association (GERA). Tan, L. C., & French-Arnold, E. (2012). Employability of Graduates in Asia: an Overview of Case Studies. Bangkok: UNESCO. Teo, A. C., & Tan, W. B. (2013). Developing a Model of Social Entrepreneurship: A Grounded Study Approach. 4th EMES International Research Conference on Social Enterprise. Liege: EMES-SOCENT. Trinidad, T. J. (2015, July 7). Top 5 Reasons for Internal Migration in Davao City. Retrieved from Mulat Pinoy-Kabataan News Network: http://www.mulatpinoy.ph/2015/04/13/top-5- reasons-internal-migration-davao-city/ USAID/Philippines. (2011). Country Development Cooperation Study 2012-2016. Philippines: USAID. Valenzuela, E. A., & Mendoza, E. M. (2012). Employability of Graduates in the Philippines. Bangkok: UNESCO. Worldometers. (2015, Sept 14). Retrieved from Worldometers: http://www.worldometers.info/ world-population/philippines-population/ Xavier, S. R., Guelich, U., Kew, P., Nawangpalupi, C., & Velasco, A. (2015). ASEAN Regional Entrepreneurship Report 2014/2015 Driving ASEAN Entrepreneurship: Policy Opportunities for Inclusiveness and Sustainable Entrepreneurial Growth. Philippines: ASEAN IDRC GEM.

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BPO company policy factors affecting high turnover rate of millennials: Towards enhanced retention

Mary Fatima D. Lompot Adamson University [email protected]

Abstract

The main objective of the research is to identify the extent of four company policies: compensation and benefits, performance management, attendance and working hours, and employee discipline on turnover rate of millennials. A descriptive research method was used in this research, utilizing both quantitative and qualitative research approaches. The result indicates that company policies under each independent variable (compensation and benefit, performance management, attendance and working hours, employee discipline) and millennial turnover have strong to moderate relationship. It also shows an inverse relationship which suggests that any improvement made on company policy will inversely affect millennial turnover. A proposed retention program that focused on developing company policies to limit the turnover rate of millennial employees. Since the study is limited in a specific segment, other industriws aside from the BPO sector or other generation of employees maybe explore in the future study. Exploration of other factors affecting the turnover rate of employees such as leadership style and other locale may also be new topics to explore on.

Key Words: millennial; company policy; turnover; retention; business process outsourcing

Introduction

Millennials are becoming the prevailing generation in the workforce today. They are graduating from college and reaching their peak employment years. As they enter the workforce, they carry new insights for contemporary work life as well as relationships between employers and colleagues. This generation is considered the most active, career-driven, and tech savvy of the business community. Their attributes, abilities, and skill-sets will most likely affect the development of the workplace and relationships between co-workers (Hobb, 2017).

In the Philippines, millennials are one-third of the country’s population approximately thirty-five million people, which means they are occupying a significant part of the workforce (Dimayuga 2016; Cullinore 2017). This segment often starts their careers in business process outsourcing (BPO) companies for multiple reasons, such as attractive compensation packages, exposure and access to technical and skills training, and more diverse opportunities compared to traditional office setups (Galang, 2017). Up to date, there are more than a million BPO employees working in the Philippines. This industry is experiencing a continuous rise and projected to

43 www.paomassociation.wordpress.com increase employment by providing a total of about 1.3 to 1.5 million new jobs in the next three years, both in terms of employees directly and indirectly employed.

BPO industry specifically the call center sector is facing a challenge on how to handle its millennial employees. In a study conducted by Willis Towers Watson (2016) on the workforce demographics on Asia Pacific, result shows that 64% of BPO employees are millennials. BPO company turnover rate in 2016 is 5 to 6% higher than the general industry, which means this sector is experiencing a high turnover of employees. Despite its initiatives, the BPO manages to decrease at some level the turnover rate of their employees though it is still higher than the general industry.

This leads to the output of this research which is the proposed enhanced retention program to improve the rate of retention of millennial employees. The researcher identified the extent of company policies that influenced the decision of millennial employees to leave their former companies. Specifically, this study is focused on four company policies: policy on compensation and benefits, performance management, attendance and working hours, and employee discipline. Apparently, policies are in the company’s control, so it can identify areas that they need to improve which serve as the purpose of this study.

Statement of the Problem

A need to identify the extent have of four company policies (Compensation and Benefits, Performance Management, Attendance and Working Hours, Employee Discipline) affecting turnover of millennials was the main objective of this study. Better understanding of this generation’s corporate behavior was useful for the proposed retention program.

More specifically, the study was designed to answer the following questions.

1. To what extent do the following company policies affect the millennial employees to leave the former company? 2.1Compensation and Benefits 2.2Performance Management 2.3 Attendance and Working Hours 2.4 Employee Discipline 2. What is the level of millennial turnover for the past five years? 3. What are the problems encountered in relation to aforementioned company policies? 4. What are the suggested solutions in relation to problems regarding company policies? 5. Is there a significant relationship between company policies and the millennial’s turnover rate? 6. What retention program can be developed as result of this study?

Ho: There is no significant relationship between company policies and millennial turnover.

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Methodology

The research used quantitative and supported by qualitative method to obtain the data and purpose of the study. Descriptive quantitative research design was implemented in this study to describe the current status of a variable. This research design was used to gather data from millennials call center employees. On the other hand, qualitative interview approach was used to gather information from former human resource officer, managers millennial employees to support the result of the survey.

To collect reliable data, purposive sampling method was used to select respondents who can give reliable input about company policies pertaining to the factors affecting millennials turnover. The respondents are employees working at medium to large scale BPO call centers in Metro Manila. The BPO companies, where the respondents are working, are operating in the Philippines for at least five years. BPO companies particularly call center sector is considered because millennials often start their careers in this sector. This sector is also the highest in terms of employee turnover due to the nature and demand of work. In a study conducted by Willis Towers Watson (2016) on the workforce demographics on Asia Pacific, result shows that 64% of BPO employees are millennials. BPO company turnover rate in 2016 is 5 to 6% higher than the general industry, which means this sector is experiencing a high turnover of employees.

The respondents in this study were selected based on the following parameters: millennial; employed as call center agent; experienced working in other BPO company; and properly oriented to company policies. Through the survey questionnaire, 50 respondents from six different contact center BPOs identified the company policy that influenced them to leave their previous BPO job. The exclusion are those respondents who left their former BPO jobs because of termination, end of contract, or any involuntary reason.

Validated survey questionnaires were distributed to the respondents to collect the quantitative data. It was designed to extract the information about company policies which specifically caused the turnover of millennial employees. It was customized effectively to collect relevant information from millennials former BPO companies. The questionnaire was validated by a faculty member teaching human resource, research adviser, a panelist and BPO human resource officer. Furthermore, Cronbach Alpha reliability test was administered to verify the reliability of the survey questionnaire.

Interviews were conducted with the former supervisors/manager and human resource officer of some millennial employee to verify company policies mentioned by the respondents. The interviews served as the triangulation method to cross validate the data provided by the respondents and recorded by the literature. In addition, content analysis was used to gather data about the level of millennial turnover in the BPO contact center sector. Documents from reliable sources were collated to identify the rate of millennial turnover for the last five years.

The collected data using the 4-point Likert scale questionnaire were analyzed thoroughly. The data were tabulated and computed using Statistical Packages for Social Science (SPSS). In addition, thematic analysis from the interview process was done to fulfill the purpose of this study.

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Thematic analysis is focused on identifying themes and patterns of living and/or behavior. Furthermore, it allows rich, detailed, and complex description of research data.

Results

Research findings shows the extent of effect of four company policies on BPO millennial employees decision to leave their former company. As to the policies under compensation and benefits, the policy on salary and wages have great effect. This proves that salary play a significant role in the employees’ decision particularly millennials in deciding whether to continue working for their employer or quit their job for another company. If millennials think and or feel that they are not compensated well based on their duties and responsibilities, they would decide to leave the company. Next important policies are policy on salary increase and retirement benefits which shows that millennials are motivated by the higher pay and good benefit that they can get from their employer. The overall mean score for compensation and benefit policies indicate great extent.

As per the performance management, the policy on career development is the highest consideration which proves that millennials are recognized to have high need for achievement. This is followed by the policy on performance appraisal process and policy on training and development. Thus, all policies on performance management have great effect on the millennial employees’ turnover because they evaluate the development of their management along with their respective career growth.

Meanwhile, the mean score of attendance and working hours policies indicate great extent specifically, the policy on leave tops the list; followed by policy on work schedule and policy on overtime. As a whole, the attendance and working hours indicate great extent but its sub-policies indicate little effect on the millennial employees’ decision to leave their previous company. Apparently, millennials are said to be more flexible than the older generations. They are willing to work in graveyard since they get paid extra.

All the policies under employee discipline indicate little extent of effect on millennial employee decision to leave their previous company. The result suggest that this policy has minimal impact on the millennial employees’ turnover. However, management still have to make sure that their policies on employeee dicipline is acceptable and fair to all employees.

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Table 1 Effect of Company Policies on Millenial Employees’ Decision to Leave Their Former Company

Policies on Compensation and Benefits Mean Verbal Interpretation Policy on Salary and Wages 2.84 Great Extent Policy on Salary Increase 2.8 Great Extent Policy on Rewards 2.46 Little Extent Policy on Health Benefits 2.4 Little Extent Policy on Retirement Benefits 2.58 Great Extent Policy on Loan Benefits 2.36 Little Extent Composite Mean 2.57 Great Extent Policies on Performance Management Mean Verbal Interpretation Policy on Timing and Frequency of 2.62 Great Extent Performance Appraisal Policy on Performance Planning 2.56 Great Extent Policy on Performance Appraisal 2.66 Great Extent Process Policy on Performance Management 2.6 Great Extent Policy on Training and Development 2.64 Great Extent Policy on Career Development 2.78 Great Extent Composite Mean 2.64 Great Extent Policies on Attendance and Working Mean Verbal Interpretation Hours Policy on Attendance 2.44 Little Extent Policy on Tardiness 2.38 Little Extent Policy on Number of Working Hours 2.52 Great Extent Policy on Overtime 2.66 Great Extent Policy on Leave 2.86 Great Extent Policy on Work Schedule 2.8 Great Extent Composite Mean 2.61 Great Extent Policies on Employee Discipline Mean Verbal Interpretation Policy on use of Company Asset 2.38 Little Extent Policy on Conflict of Interest 2.36 Little Extent Policy on Workplace Behavior 2.42 Little Extent Policy on Dress code 2.42 Little Extent Policy on Employee Termination 2.46 Little Extent Policy on the use of Internet and Personal 2.46 Little Extent Gadgets During Working Hours Composite Mean 2.42 Little Extent

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Based on the assessment of the turnover rate of six different BPO companies where the millennial employees are working, the average turnover rate is 30.83%. Results show huge difference among the turnover rate of six different BPO companies for the last five years. This is highly influenced by the type of policies that each company developed. This is relative to a study conducted by Willis Towers Watson (2016) shows that BPO population in Asia Pacific composes of 64% Generation Y or millennials, 30% Generation X and 6% Baby Boomers. This proves that majority of BPO employees are millennials.

Table 2 illustrates the turnover rate of six companies represented by the millennial employees’ selected in this study. These data are highly influenced by the policies of the respective companies. Results show that the average turnover for millennials is 30.83% for the past five years based on the assessment of different BPO companies on the attrition of millennial employees.

Table 2 Millennial Turnover for the Past Five Years

Companies Millennial Turnover Rate (%) Company U (CU) 40% Company V (CV) 20% Company W (CW) 25% Company X (CX) 20% Company Y (CY) 50% Company Z (CZ) 30%

Listed in the Table 3 are problems that millennial employees encountered in their company policies. First, the company policies lack management support; second, the company policies are not clearly linked with company objective and culture; third, the company policies do not address to the needs of millennial employees; and the company policies set wrong tone to millennial employee. The result shows that some BPO companies are not strict in implementing some policies. This causes millennials to involve in some negative work behaviors since the company is quite lenient to reprimand them. The interviewed human resource and managers of millennial employees validated these problems. This creates a perception to most employees that management lacks conviction in policy implementation. Policies are formed to guide management in their decision making. However, some formulated policies can make the management weak to respond in a given situation. As a result, according to some former managers of the millennial employees, the established policies create some negative impact on millennials; it makes them inflexible in their decision making. It is a contributing factor why millennial employees are leaving the company. Apparently, the limitations of the said company policies may be linked to the problem that millennial employees encountered in terms of linkage of policies to company objective and culture.

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Table 3 Problems Encountered by Respondents in Relation to Company Policies

Problems Encountered Frequency Percentage Rank Company policies do not address to the needs of millennial 19 38% 3.5 employees. Company policies are not communicated well to the millennial 17 34% 6 employees. Company policies are not clearly linked with company’s 20 40% 2 objective and culture. Company policies set wrong tone to millennial employees, too 19 38% 3.5 legalistic or too vague. Company policies do not provide millennial employees effective 18 36% 5 way to address work challenges. Company policies lack management support. 40 80% 1 Others: Arrogant Supervisors 1 2% 7

Therefore, the following suggestions were raised in Table 4 to address the identified problems above. Based on the results, there is almost equal agreement when it comes to solutions involving improvement of existing policies align with millennial needs (64%), removal of some policies which are irrelevant and do not contribute to the betterment of millennials (62%) and obtaining management support and strictly implementing the existing company policies (60%). However, 48% of the respondents suggest that millennial employees should be reoriented on company policies.

Table 4 Suggested Solutions of Respondents to Problems Encountered in Company Policies

Suggested Solutions Frequency Percentage Rank Reorient millennial employees on company 24 48% 4 policies. Improve existing policies of align with millennial 32 64% 1 needs. Remove some policies which are irrelevant and do 31 62% 2 not contribute to the betterment of millennials. Obtain management support and strictly implement 30 60% 3 the existing company policies.

Survey revealed that even though some companies have good policies, they remain useless without the management support and strict implementation. Millennials also believe that some policies need to improve and/or remove to align with the millennial employees’ needs. Employees may not like all workplace rules, but every workplace requires structure. How companies manage the workplace policies is the key to this problem, however, to determine how the employees perceive their workplace environment and how committed they are, serve as the result (Piontek, 2017).

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Finally, the relationship between company policies and millennial turnover shows that company policies on each independent variable (compensation and benefit, performance management, attendance and working hours, employee dicipline) have inverse effect on the turnover rate of millennials in the BPO companies. Hence, relevant policy changes should be made in order to diminish the increasing number of millennial employees’ concept of immediately changing employers from time to time. This finding proves that company policies affect the turnover rate of millennial employees.

Table 5 illustrates the computed Pearson r correlation for the dependent variable turnover rate and independent variables such as compensation and benefits, performance management, attendance and working hours, and employees’ discipline which have negative effects to the turnover rate. This means that any increase in all these independent variables is a decrease in the turnover rate. Moreover, performance management has strong significant impact to turnover rate (r=-0.619, p=0.000). Nevertheless, there is statistically moderate to strong significant impact of compensation and benefits (r=-0.560, p=0.000), attendance and working hours (r=-0,454, p=0.001), and employees’ discipline (r=-0.375, p=0.007) towards turnover rate of millennials from the BPO companies.

Table 5 Significant Relationship between Company Policies and Millennial Turnover

Pearson Decision Company Policies Sig. Correlation Criteria Interpretation

Compensation and Benefit .000 -.708* Reject Ho Strong Performance Management .000 -.824* Reject Ho Strong Attendance and Working .000 -.619* Reject Ho Strong Hours Employee Discipline .000 -.512* Reject Ho Moderate Overall .000 -.862* Reject Ho Strong *Correlation is significant at the 0.05 level

Among these policies, the policy on performance management is the strongest reason in relation to millennial turnover. This result proposes that millennials are driven and ambitious; they have keen interest on career opportunities, growth and development (Caramela, 2018). Companies should offer opportunity for continuous learning and development to increase retention rate of millennials. This is consistent with the responses of millennial employees and key informants on performance management particularly policy on career development, training and development, and performance management which have great effect on millennial employees’ decision to leave a company. Moreover, policies on performance appraisal process, timing and frequency of performance appraisal and performance planning are other policies with great influence according to the result of the survey. The composite mean also suggests that this policy is of great extent in millennial turnover.

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Another significant policy with strong relationship to the millennial turnover is compensation and benefit. Millennials are largely motivated by money. A study revealed that 70% of employees say that low salary is the primary reason they left a job. Another survey of Qualtrics revealed the same findings that millennials would choose to stay in a job if they get annual raise and upward career mobility (Overfelt, 2017). This policy is second to performance management in terms of effect on millennial employees’ decision to leave. This is similar with the result of the survey and information gathered from the respondents. Particularly, policy on salary and wages and policy on salary increase are two policies that the two set of respondents consider with great influence on millennial employee’s turnover. Also, policy on retirement benefit is of great of effect on millennial turnover based on the result of the survey.

The policies on attendance and working hours also show strong relationship with the millennial employees’ turnover. Specifically, policies on number of working hours and work schedule and policy on overtime and leave are policies with great effect on millennial turnover based on the result of the survey. This shows that these policies highly affect millennial employee’s decision to leave a company.

Among the four policies, the policy with least effect to the respondents is the employee discipline that shows moderate relationship with millennial turnover. However, the common disciplinary problem that they emphasized is the attendance which causes termination and or not being regularized by the employer.

Discussion

This research has demonstrated the effect of company policies to the turnover of millenial employees. The great extent specifically is on the policies on compensation and benefits and performance management. Hence, the companies have to look unto these policies to improve the retention rate of their millennial employees. There is a strong to moderate relationship between the four company policies (compensation and benefit, performance management, attendance and working hours and employee discipline) on the millennial employees turnover as seen in the results. There is a need to address the concerns and desires of this generation, which urges the companies to adjust their compensation, benefits, performance management, work schedule and diciplinary action to maintain good corporate partnership with their millenial employees.

The research findings lead to the development of proposed retention program for millennial employees. This proposed retention program is focused on developing company policies to limit the turnover rate of millennial employees. As mentioned, the four company policies highligted in the proposed retention program are the policies on compensation and benefits, performance management, attendance and working hours and employee discipline. These are the policies that show strong to moderate effect on millennial employees’ decision to leave the former company.

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Proposed Enhanced Retention Program

Objective: To attract and retain qualified millennial employees Responsible Person/ Office: HRD Time Frame: Recruitment to Employment

Compesation and Benefits

Policy on Salary and Wages

Offer a competitive salary package to attract qualified millennial employees. The result of this study suggest that this is one consideration of millennial employees in deciding to stay or leave a company. This is also the first thing that they look at when looking for a job. By having a competitive salary package, company could attract more millennials. Competitive salary should be based on what’s being offered is equal or more than the industry average for similar positions in the same location. Companies should make sure that they are giving competitiva wages, but not on the risks of overpaying the new recruits. Studies also shows that millennials prefer pay transparency which encourages companies to amend their policies and encourage people to speak up when they think something is amiss in how they or others get paid.

Policy on Salary Increase

Have an annual salary increase based on tenure and individual performance.An annual salary increase is much appreciated by millennial employees. Based on the result of the study, this is of great extent of effect on millennial decision to leave a company. Salary increase should be based not only on years of tenure but on the performance of an employee. This is to encourage employees to perform better in their job. Studies also shows that millennials are willing and are motivated to stay in the job if they are receiving annual increase.

Policy on Retirement Benefit

Offer a comparable retirement benefit for employees.This policy is of great extent of effect on millennial employee decision to leave a company. Having good retirement benefit for employees would encourage them to stay longer in the company. This will also contribute to their loyalty and satisfaction. With this, companies should review their retirement benefit to see how competitive it is. They should give competitive lump sum of money based on the number of years service in the company. This is ideal for most millennial employees.

Policy on Reward

Reward employees for every good performance done. By having good reward system, employees will be more motivated to perform better in his/her job. Strong recognition and reward is important to have healthy and dynamic talent. Millennials wants recognition and they appreciate personalized employee reward whether that is financial or non-financial. Leaders have to be creative in rewarding millennial employees. This should not be expensive always. A simple recognition, tap on shoulder, appreciation for a good thing done is something millennials would

PHILIPPINE ACADEMY OF MANAGEMENT E-JOURNAL VOL. 2 NO. 2 September 2019 approeciate. Study also shows that millennials want to receive experiential rewards such as cinema discount, spa trips or day out. They prefer to receive rewards that they can share with others. Employers have to recogniser and understand the need for healthy work/life balance of millennial employees.

Policy on Health Benefits

Offer competitve health benefit package to qualified millennial employees. Healthcare benefit play a big part in employee satisafaction. In an industry like BPO, this is particularly important because of the nature and demand of work in this sector. This is one thing that millennials look at in accepting a job especially those millennials with family. Employers should be effective in altering their benefits and driving needs to more cost effective approach to healthcare consumption. Based on some interviewees, millennials prefer to work on company who are giving generous health benefit. They are balancing the compensation and benefit offered by a company. Some are willing to accept low salary if health benefit is competitive. This applies particularly to those millennials with family.

Performance Management

Policy on Career Development

Create a well defined career path for millennials.This policy is of great extent of effect on millennial employee decision to leave or stay in an organization. Millennials view career development as more than just money and title. It’s not just about promotions, it is also about taking on new projects or learning new skills. For most millennials, career development is so important, and this desire represent a golden opportunity to develop and retain millennials. They want to know the next steps as they build their career. With this, companies should have definite and transparent program on career path of their employees. They should involve employees in their own career plan and ensure that they are aware of opportunities available for them to grow their career within the organization. If employee voice interest in a particular position, work with them and build steps towards specific career goal.

Policy on Training and Development

Offer good training and development program catering to millennial needs.This policy is closely linked with policy on career development. Most millennials are willing to personally invest on their own skills training and professional development and it could appreciated if company will be willing to provide this to them. Millennials love learning. They are more likely to engaged and stay in their job where there are opportunities for training and developement. They would be more interested to engaged, if the training specificaly address their needs. This is also a good way to develop and retain high-potential millennial employee.

Policy on Performance Management

Implement continous performance management.Millennials seek regular feedback from their managers. Constant communication and good working relationship between them and their

53 www.paomassociation.wordpress.com supervisor is what they appreciate most. Annual reviews are no longer sufficient. This move toward continuous performance management. It is important to keeps the lines of communication between employee and manager open, allows for the exchange of ideas and information, and provides opportunity for reward and recognition. Providing open channels for communication both horizontally and vertically results in a more engaged and motivated workforce. Importantly, supervisors/managers must also be trained in to handling employees properly. Managers should be trained in immediately addressing behavioral issues. Companies may also utilize the use of modern performance management software incorporates this need for constant communication by providing a social media-like platform that permits instant feedback between coworkers.

Attendance and Working Hours

Policy on Work Schedule

Make the work schedule more flexible.Traditional work scheduling doesn’t work for most millennials. Have the scheduling more flexible by allowing employees to swap shifts with co worker in the same team. If possible have an option to work from home. This create workforce of available and ready to work employees. This could also help better attract, manage and maximize millennial employees.

Policy on Number of Working Hours

Have working hours limited to 8 hours a day, 5 times a week. This is the commonly used working hours in almost all industry. However, some accounts are requiring their agents to render 6 or 7 days work a week. This extended working hours pushes agents to resign because of stress and burnout. Millennials will also appreciate if they will be allowed to compressed their working hours in four days a week.

Policy on Overtime

Overtime pay should be paid accurately and on time. Unpaid overtime is one reason for millennial decision to leave a company a mentioned by some interviewees. Company should be fair by giving what is just to their employees. They should come up with a procedure to automatically track employees rendered overtime.

Employee Discipline

Policy on Disciplinary Action

Create a progressive diciplinary action for employees who violated rules. Progressive approach in disciplinary action is a practice that most companies are doing nowadays. However, millennials are so sensitive when it comes to disciplinary action. Some will resign automatically once given an initial warning. To avoid this, managers should be trained on how to handle this tendecies of millennial employees. They should do this in a way that millennials would understand.

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References

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Macaranas, R.D. (2017). Mining Millennials: Finding Gold in Co-working Spaces. Martin T. (2015). Generational Workforce Demographic Trends and Total Organizational Rewards Which Might Attract and Retain Different Generational Employees, 16(2) Miller, M., Hodge, K., Brandt, A. & Schneider, E. (2013). The young and the restless: Gen Y’ers in the workplace: are you prepared?,FDCC Quarterly, 63 (3) 226-250 Pew Research Center (2015). Millennials generation next, confident, connected and open to change. Maryland: National Center for Health Statistics. Philippine Statistics Authority (2017). 2013 ASPBI – Business Process Management (BPM) Activities: Final Results. Piontek, K. (2017). Workplace Policies: When to Limit and When to Let Go Jerome, A. Scales, M. (2014). Millennials in the Workforce: Gen Y Workplace Strategies for the Next Century, 5 (1),1-12. Schawbel, D. (2013). How millennials will impact the workplace. News and Information, 1-2. Smith, T.J. and Nichols, T. (2015) Understanding the Millennial Generation. The Journal of Business Diversity, 15, 39-47. Stein, J. (2013), “Millennials: the me meme generation”, Time, Vol. 181 No. 19, p. 20. SujanZemke, R., Raines, C., &Filipczak, B. (2013). Generations at work: Managing the clash of boomers, genxers, and genyers in the workplace (2nd ed.). New York, NY: AMACOM Taylor, P. (2014), The Next America: Boomers, Millennials, and the Looming Generational Showdown, Perseus Publishers, New York, NY. Telus, (2015). The Millennial Call Center: Tapping into the Customer Service Strengths of Gen Y. Tenacity (2016). Reducing Attrition in call centers. VanMeter, R. A., Grisaffe, D. B., Chonko, L. B., & Roberts, J. A. (2013). Generation y’s ethical ideology and its potential workplace implications. Journal of Business Ethics, 117(1), 93- 109. doi:10.1007/s10551-012-15051 Walsh, D. (2015). Millennials in the workplace; for employers, words to the wise from the Y's. Crain's Detroit Business, 30(13), 11-16. Wojcik, J. (2013). Attracting millennials requires revolutionary thinking. Business

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Techno stress: Examining the relationship of psychological traits and compulsive smartphone usage, and their impact on college students

Noel Sajid Murad, John Terence Perez, and Lora Queñano De La Salle University [email protected]; [email protected]; [email protected]

Abstract

Do psychological traits play a significant part in compulsive smartphone usage among students? Does this lead to techno stress or affect their motivation to study? To answer these questions, we sought to determine whether locus of control, social interaction anxiety, need for touch, and materialism have an effect on compulsive smartphone usage, motivation, and techno stress. Using descriptive-correlational design, we found that locus of control has the highest score leading to compulsive smartphone usage, while the need for touch had the lowest score. All other psychological traits have statistically significant values on compulsive smartphone usage, with the exception of the need of touch. This led us to conclude that compulsive usage of smartphones has a negative effect, particularly techno stress, on the respondents.

Key Words: smartphones, compulsive smartphone usage, techno stress

Background of the study

A smartphone offers helpful functions in terms of accessibility to information. Aside from its main functions of connecting people through phone calls and sending of messages, it provides access to weather forecasts, geographical locations, dining places, traffic updates, calendar schedules, and many more. It is also widely used for entertainment in the form of movies, music, and virtual games. In addition, the smartphone is used for photography and videography by some enthusiasts.

In 2017, 49.1% of households in the Philippines possessed a smartphone according to Euromonitor International. In Metro Manila alone, many students use smartphones as one of their learning tools. They also use it for entertainment and stress relief. While this results to immediate gratification, it can also reduce their sense of control and lead to compulsive usage.

Despite the positive impact of smartphones, studies show negative effects on students’ academic performance and interpersonal communication skills. Their heavy inclination and dependence on smartphones reflect the intensity of their self-control (to own a smartphone) and satisfaction. Their resulting mood affects how they interact with others, and ultimately affects how they value material and non-material things around them.

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Based on previous studies, locus of control, social interaction anxiety, need for touch, and materialism are psychological traits that may contribute to compulsive behavior, such as drug and alcohol addiction, internet addiction, and credit card misuse to name a few. The same psychological traits have not been studied extensively on their effect on compulsive smartphone usage, which is also a form of compulsive behavior. Hence, we wanted to know if these psychological traits play a significant part in compulsive smartphone usage, which could either lead to techno stress (defined as a high stress level owing to a heavy dependence on smartphones) or motivation to study.

Review of literature

Our review of related literature discusses the relationship of psychological traits such as locus of control, social interaction anxiety, need for touch, and materialism-related compulsive usage that couuld result to either techno stress or motivation. We also identify interpersonal skills as mediating factors that may affect the degree of compulsive smartphone usage.

Psychological Traits

As stated by Rotter (2014), ‘locus of control’ refers to an individual’s perceptions about the cause of events in his or her life and is defined as the extent to which an individual believes that he or she has the ability to affect the outcome through his or her own actions. Lefcourt (2012) stated that internal locus of control suggests that the cause of an event or behavior depends on one’s internal force, and personal decisions and efforts can decide or influence what will happen in one’s life. According to Haynes and Ayliffe (2014), locus of control passive tendencies increases the likelihood of a subject exhibiting compulsive behavior such as drug and alcohol addiction, internet addiction, and credit card misuse. In addition, people with diminished sense of self-control are more likely to experience compulsive smartphone usage.

Shienker and Leary (2015) claimed that individuals with ‘social anxiety’ worry about social outcomes, and these worries affect their behavior. Thus, the intrapersonal aspects of social anxiety have interpersonal consequences, about which much less is known. Behavioral manifestations of social anxiety may have far-reaching implications for social outcomes (Shienker & Leary, 2015). Our Mobile Planet (2013) claimed that it is probable that people with high social interaction anxiety tend to be more dependent on their smartphones since 83% of smartphone users use their phone for communication. Because social anxiety is lower when interacting virtually than when interacting in real life, the former has proven to be a useful alternative to the latter, fulfilling the need to interact in a less direct way which is specified by Yen et al. (2012).

Allied Business Intellige (2014) indicated ‘need for touch’ as a preference for the extraction and utilization of sensory information obtained through touch or the haptic system. Hence, individuals who have a strong need for touch enjoy touching the groceries in supermarkets and cannot help touching the other person’s arm or shoulder during conversations. Need for touch has been identified as a multidimensional construct with two primary dimensions: instrumental and autotelic touch (Allied Business Intellige, 2014). According to Peck and Childers (2016), touching the screen when using a smartphone becomes a source of satisfaction for the need for touch since smartphone sales are growing rapidly and 75% of smartphone comes with a touchscreen.

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Richin and Dawson (2015) mentioned that ‘materialism’ is a person’s beliefs about the importance of material possessions in his or her life and is conceptualized as a value. Hence, an individual with a high level of materialism, described as ‘‘materialistic’’, considers material possessions to be central to his or her life and identity. Compared with their non-materialistic counterparts, materialistic individuals usually desire a higher level of income, place greater emphasis on financial security, and are less satisfied with their lives. When interacting with others, materialistic individuals tend to care less about interpersonal relationships, preferring to spend more on themselves (Richin and Dawson, 2015). According to Chan (2014), individuals consider the latest smartphone models to be symbols of material possessions and develop an emotional attachment to their phones. In addition, materialism affects consumers’ reasoning when evaluating purchases, and influences their post-purchase satisfaction as claimed by Richins (2013).

‘Compulsive Usage’ as defined by O’Guinn and Faber (2014) is the “response to an uncontrollable drive or desire to obtain, use, or experience a feeling, substance, or activity that leads the individual to repetitively engage in behavior that will ultimately cause harm to the individual and/or others.” Therefore, it can measure the pattern of a person's activities such as window shopping and eating among other repetitive behaviors (Parylak, Koob & Zorrilla, 2016). Matusik and Mickel (2015) also found that individuals with compulsive behaviors are more prone to certain, adverse consequences of psychological distress such as depression and stress.

As stated by Song (2014) college students derive pleasurable and rewarding feelings from media consumption. As proposed by the uses and gratification perspective, individuals’ excessive use of media may be a way of satisfying their psychological needs. Specifically, individuals tend to actively select particular media and consume content to satisfy their psychological needs as mentioned by Katz et al. (2015). People use new media to satisfy their needs for information, convenience, entertainment, self-expression, social status, and social interaction Hawi et. al (2013). Regarding mobile phone use, Lee et. al (2014) claimed that users’ needs for entertainment, stress relief, instantaneousness, mobility, interest, information, and social status serve as primary motives for using the medium; this could lead to excessive reliance on mobile phones. In other studies, it has been revealed that relaxing, relieving stress according to Ho and Syu (2013), strengthening users’ family bonds, expanding their psychological neighborhoods, facilitating symbolic proximity to the people they call, as well as pass time as stated by Wei (2014), are ‘motivations’ for using mobile phones.

Techno stress

Tu (2015) claimed that ‘techno stress’ relates to the phenomenon of stress experienced by end users in organizations as a result of their use of ICTs. It is caused by an individual’s attempts to deal with constantly evolving ICTs and the changing physical, social, and cognitive responses demanded by their use. Current organizational environments are characterized by the growing importance of knowledge intensive work, outsourcing, and collaborative work arrangements according to Ragu (2014). They require individuals to continually increase their day-to-day interaction with ICTs, leading to aggravation of the potential negative effects associated with their use. As stated by Tarafdar (2016), there is practitioner evidence that techno stress results in perceived work overload, demoralized and frustrated users, information fatigue, loss of motivation, and dissatisfaction at work. Sanfilippo (2013) claimed that techno stress becomes more serious as

59 www.paomassociation.wordpress.com smartphone adoption becomes more prevalent since college students’ top priority is to get connected and technological advancements augment the over-attachment of users to their phones. When compulsive behaviors are perceived to be inescapable, adverse consequences of psychological distress such as depression and stress are more likely to be induced as well (Matusik & Mickel, 2013).

Types of Smartphone Activities

‘Information seeking’ is a representative type of smartphone use, and includes news search, web surfing, product/service information search. Repeated use of smartphones to search for news or surf the web for no specific purpose can lead to automatic and unintentional behavioral habits, which can result in difficulties in controlling smartphone usage (Baturay & Toker, 2015). Bian and Leung (2015) claimed that as the degree of smartphone use for information seeking increased, the dependence on smartphones increased. Previous studies included learning activities by smartphone in information seeking type. However, it is necessary to classify smartphone usage related to learning independently rather than to include them in information seeking type according to Jeong et. al (2016). Unlike news search and web surfing, the use of smartphones related to learning is clearly aimed and it can help to improve academic achievement.

As stated by Horvath (2014), seeking ‘entertainment’ through smartphones includes watching movies, videos, web toons, reading web novels, and listening to music among others. Using a smartphone to watch movies and listen to music can help relieve mental and physical stress. However, based on past communication researches, the amount of smartphone usage for seeking entertainment can have a significant impact on smartphone dependence. Importantly, some studies included gaming as a type of entertainment seeking. Ahn et. al (2014) mentioned that researchers need to analyze the effects of types of entertainment seeking such as watching movies and listening to music on smartphone dependence separately from the effects of gaming on smartphone dependence. It is in the same context that Google detailed categories separated game and entertainment seeking type.

Winther and Yan (2014) claimed that smartphone ‘gaming’ is more rewarding than other types of entertainment seeking activities such as listening to music or watching movies. Based on previous studies, online gaming is a key variable of internet addiction. As the use of games via smartphone increases, smartphone dependence is likely to increase due to the strong compensation of enjoyment as stated by Yang and Tung (2007). Recent studies have shown that smartphone dependence was related to the amount of gaming by smartphones as observed by Jeong et al. (2016). However, some researchers emphasize that smartphone gaming may not be as immersive as PC-gaming, as smartphones have smaller screens according to Hou et. al (2012). It is hard to say that gaming using smartphones has a direct impact on smartphone dependence.

In the use of smartphones, ‘Social Network Services’ (SNS) have become the most popular in recent years (Ku et. al., 2014). SNS can be classified either as web-based such as Facebook, Instagram, and Twitter or as Instant Messenger-based such as Facebook Messenger, LINE, and WhatsApp. The former is commonly referred to as SNS, while the latter as Instant Messengers (IM). According to Chiu et. al (2014), SNS are used to maintain and expand social relations as well as for self-exposure. Researchers in this field reported that the amount of SNS use is

PHILIPPINE ACADEMY OF MANAGEMENT E-JOURNAL VOL. 2 NO. 2 September 2019 associated with internet addiction. In contrast, recent research has also reported that SNS help adolescents maintain friendships and increase social capital (Frison & Peter, 2015). Most Internet- based SNS run mobile-optimized versions and these provide portability and constant connectivity compared to internet-based SNS. Mobile-optimized SNS have all the characteristics of social networks, the internet, and mobility (Ha et al., 2015). Although the use of mobile-optimized SNS is rapidly increasing due to these characteristics, its’ impact on smartphone dependence is rarely known (Jang, 2014). In a study by Salehan and Negahban (2013), adults aged 18–30 expressed greater smartphone dependence with the increase in mobile SNS usage.

As stated by Chou and Liu (2016), ‘mobile instant messenger’ (MIM) is another form of SNS. KakaoTalk, the most famous MIM in South Korea, is used by more than 90% of smartphone users. With MIM, people can send messages or files such as pictures and videos to friends and acquaintances in real time, and make sound and video calls. Users can also chat on a one-to-one basis or in a group through a chat room. MIMs are optimized for instant communication and interaction with family and friends (Park et al., 2014).

Compulsive Smartphone Usage

According to Shahibi and Abdul Aziz (2017), smartphone use is essential in this generation and should be used wisely. The researchers of this study disseminated 200 questionnaires to students in Malaysia and found that some factors that affect social interaction anxiety include low confidence levels, lack of communication, and interpersonal skills. However, the study found this had a weak relationship with compulsive smartphone usage. On the other hand, the need for touch may affect compulsive smartphone usage, as smartphone designs affect the increase in one’s need for touch (Shahibi & Abdul Aziz, 2017). The study also noted a significant relationship between locus of control and compulsive smartphone usage. Respondents were unable to control their smartphone usage and habits. Dependence on the devices eventually led to repetitive usage and stress (Shahibi & Abdul Aziz, 2017). The researchers concluded that uncontrollable and repetitive use may have negative results. The study also states that its findings may be referred to by marketing personnel and researchers who aim to understand smartphone users and their habits.

Another study on smartphone use and dependence was conducted by Sung-Man Bae (2017) from the Department of Counselling Psychology, The Cyber University of Korea on 24,386 respondents, aged 3 to 70 over 17 years in the country where the researcher used 2,212 youth data. Based on the results, time spent on using smartphones and frequency have a positive correlation with smartphone dependence. Hence, Bae (2017) concluded that the amount of smartphone use for information and entertainment seeking, and games is correlated with the smartphone dependence.

Interpersonal Skills as a Moderating Variable

According to Collins & Madsen (2013), close friendship is a common relationship for the majority of young adults. Young adults consider their friends to be the most important people in their relational circles (Barry et al., 2015). Yang et. al (2014) claimed that social media has been presented as a way to initiate and progress social and romantic relationships. In fact, Yang and colleagues indicated that young adults have begun to create a sequence of appropriate technology

61 www.paomassociation.wordpress.com mediated communication as social and romantic relationships develop. Young adults start relationships by getting acquainted on Facebook, progress to instant messaging, possibly exchange cell phone numbers as a next step, and then meet in person if all went well in previous technology mediated interactions. Young adults indicated that violating the sequenced order of the communication modalities could inhibit or jeopardize the interpersonal relationship. The data that was used to identify this connection between relationship progression and technology was collected in 2008, before the emergence of several new social media applications.

Research Questions and Hypotheses

For this study, we pose the following questions: (1) What psychological traits may lead to compulsive smartphone usage? (2) Does compulsive smartphone usage lead to motivation to study or to techno-stress? (3) Do interpersonal skills moderate the impact of psychological traits on compulsive smartphone usage?

We also have the following hypotheses:

1. Hypothesis 1: The high-level of psychological traits of locus of control, social interaction anxiety, need for touch, and materialism in a student may lead to more compulsive smartphone usage. 2. Hypothesis 2a: Higher compulsive usage of smartphone leads to higher techno stress. 3. Hypothesis 2b: Compulsive smartphone usage and techno stress levels are directly proportional. 4. Hypothesis 3: Low compulsive smartphone usage leads to higher motivation to study. Hypothesis 4: The effect of psychological traits of locus of control, social interaction anxiety, need for touch, and materialism in a college student on compulsive usage of smartphone will be stronger for someone with negative interpersonal skills. [Note: Negative interpersonal skills greatly affect a college student’s locus of control, social interaction anxiety, need for touch, and materialism in relation to compulsive smartphone usage]

Significance of the Study

In this age and time, when members of the society are expressing strong dependence on technology, it is important to keep a check on how this affects the youth, especially when it is suggested to have a deterring effect on their studying habits and interpersonal skills. Both parents and educators need to play an active role to remind the youth from excessively depending on technology like smartphones for learning and further need to create and foster an environment where students can enhance their social interaction with others, improve their self-control, and where they can value much more than material things. For educators, the importance of this study is to identify the limit their students should use smartphones to supplementing studying habits or increase productivity. Parents will also have a reference to guide their children in balancing the use of smartphones, inside and outside of their homes.

While previous studies have linked the psychological traits of locus of control, social interaction anxiety, need for touch, and materialism as antecedents to compulsive behaviors, there

PHILIPPINE ACADEMY OF MANAGEMENT E-JOURNAL VOL. 2 NO. 2 September 2019 is a dearth of literature on the effect of these same traits on compulsive smartphone usage, which is also a form of compulsive behavior. Hence, we would like to fill this gap in the literature.

Scope and Limitations

Our study covers 303 online respondents, aged 17 to 38 years old, currently enrolled in both private and state/government schools and universities in Metro Manila at the time of the research. Due to the limitation of time and finance, the present researchers acknowledge that they were not able to employ a longitudinal and mixed-method approach for a more comprehensive study.

Conceptual Framework

For the conceptual framework, we identified four independent variables namely locus of control, social interaction anxiety, need for touch, and materialism. The effects of these will be observed in three dependent variables namely compulsive smartphone usage, motivation to study, and techno stress. We also classified interpersonal skills as a moderating variable. Figure 1 shows the relationship among these variables.

Figure 1. Research Model

Methodology

Research Design

A cross-sectional descriptive-correlational design was used to determine smartphone usage and dependence of college students and to identify the effect of interpersonal skills on compulsive smartphone usage, which leads to either motivation in studying or techno stress. By employing a quantitative research design, descriptive variables were measured through their numerical counterparts and then analyzed using statistical methods.

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Sample, Population, and Participants

Data from the research was derived from written and online surveys through convenience sampling of college students from Metro Manila, Philippines, which localized the results. 69.64% of respondents fell under the age range of 17 – 20 years old, while 25.41% fell under the age range of 21 – 24 years old. Most respondents were male at 64.36% of the sample, while females comprised 34.32%. 67.66% were enrolled in private schools, while 32.34% were enrolled in state/government schools.

Data Collection Instruments, Variables, and Materials

The questionnaire was divided into three sections: general information, smartphone usage, and the core questions of the survey. Responses were measured on a 5-point Likert scale, 1 which stands for ‘Strongly Disagree’ up to 5 which stands for ‘Strongly Agree’. The first part of the questionnaire asked respondents to answer general demographic information including email address, age, school, school address, course, and age. The second part asked for details of the respondents’ smartphone. Participants were required to answer details on their smartphone accessibility, smartphone brand, smartphone usage frequency, social media accounts among others. The third part included questions on psychological traits (locus of control, social interaction anxiety, need for touch, materialism), compulsive smartphone usage, motivation to study, technostress, and interpersonal skills. The statements in the survey were connected to the variables to measure the strength of the respondents’ rating on the items.

Data Gathering Method

Data was gathered through online surveys via Google Forms and distributed through social media channels including Facebook, Facebook Messenger, and Instagram. Surveys were also randomly distributed to colleges and universities in Metro Manila. The data gathered was then tabulated via Microsoft Excel and further analyzed using different statistical softwares. IBM SPSS Statistics 20 was used to test the reliability of the questionnaire. The questionnaire was pre-tested with 30 respondents and had a strong inter-reliability. Cronbach’s alpha of each variable was obtained from the software, and questions with less than 0.5 Cronbach’s Alpha were removed from final questionnaire.

Partial Least Square (PLS) Method was performed in analyzing the relationship of variables of the 303 participants. Partial Least Square Method is a linear model, which specifies the linear relationship between a dependent response variable Y, and a set of predictor variables X. The evaluation was done using SmartPLS 3.0. Under SmartPLS, bootstrapping was used to extrapolate the samples from 303 to 1000 and to determine P-values.

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Results

Table 1 Relationship of Psychological Traits with Compulsive Smartphone Usage

Sample Mean (M) Standard Deviation (STDEV) T Statistics (|O/STDEV|) P Values Locus of Control → 0.473 0.056 8.578 0 Compulsive Usage Materialism → 0.157 0.051 3.285 0.001 Compulsive Usage Need for Touch → 0.078 0.055 1.328 0.185 Compulsive Usage Social Interaction Anxiety → 0.123 0.049 2.52 0.012 Compulsive Usage

The relationship of locus of control with compulsive smartphone usage has the highest value (Mean = 0.473, Table 1), while the relationship of the need for touch with compulsive usage has the lowest value (Mean = 0.078, Table 1). The relationship of the psychological traits of locus of control, materialism, and social interaction with compulsive smartphone usage all have statistically significant values (P-values 0, 0.001, and 0.012 respectively; Table 1). On the other hand, the relationship of the need for touch with compulsive usage produced a statistically insignificant result (P-value 0.185; Table 1).

Hypothesis 1, which states that “The high-level of psychological traits of locus of control, social interaction anxiety, need for touch, and materialism in a student may lead to more compulsive smartphone usage” is partially supported.

Table 2 Relationship of Compulsive Usage Effects with Motivation and Techno Stress

Sample Mean (M) Standard Deviation (STDEV) T Statistics (|O/STDEV|) P Values Compulsive Usage → 0.271 0.32 1.249 0.212 Motivation Compulsive Usage → 0.486 0.044 10.711 0 Techno Stress

The relationship of compulsive usage with techno stress has a statistically significant value (P-value 0; Table 2). However, the relationship of compulsive usage with motivation had a statistically insignificant result (P-value 0.212; Table 2).

Hypothesis 2a, which states that “Higher compulsive usage of smartphone leads to higher techno stress” is supported.

Hypothesis 3, which states that “Low compulsive smartphone usage leads to higher motivation to study” is not supported.

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Table 3 Moderating Effect of Interpersonal Skills on the Relationship of Psychological Traits with Compulsive Smartphone Usage

Sample Mean (M) Standard Deviation (STDEV) T Statistics (|O/STDEV|) P Values Moderating Effect on Locus of Control → 0.013 0.121 0.823 0.411 Compulsive Usage Moderating Effect on Social Interaction -0.051 0.137 0.408 0.683 Anxiety → Compulsive Usage Moderating Effect on Need for Touch → 0.004 0.092 0.905 0.366 Compulsive Usage Moderating Effect on Materialism → 0.032 0.124 0.155 0.877 Compulsive Usage

The moderating effect of interpersonal skills in the relationship of materialism with compulsive usage has the highest value (Mean = 0.032; Table 3), while the moderating effect of interpersonal skills in the relationship of social interaction anxiety with compulsive usage has the lowest value (Mean = -0.051; Table 3). The moderating effect of interpersonal skills in the relationship of locus of control, social interaction anxiety, need for touch, and materialism, all have statistically insignificant values (P-values 0.411, 0.683, 0.366, and 0.877 respectively; Table 3).

Hypothesis 4, which states that “The effect of psychological traits of locus of control, social interaction anxiety, need for touch, and materialism in a college student on compulsive usage of smartphone will be stronger for someone with negative interpersonal skills” is not supported.

Discussion and Implications

Based on statistical results, the locus of control has the highest score leading to compulsive smartphone usage, while the need for touch had the lowest score. The psychological traits of locus of control, materialism, and social interaction anxiety have statistically significant values on compulsive smartphone usage, with the exception of the need of touch, which got an insignificant result.

As stated by Haynes and Ayliffe (2014), locus of control passive tendencies increases the likelihood that the subject will exhibit compulsive behaviors such as drug and alcohol addiction, internet addiction, and credit card misuse, which can be correlated with compulsive smartphone usage. In the study, locus of control showed a remarkable finding, strengthening the proposition that it will lead to compulsive smartphone usage. The carefree personality of most college students might be a factor in the outcome, as well as their increased dependence on peers for their definition of self. It can also be argued that students in college are still exploring career trajectories they should pursue in the future, however in their communications with one another via social networking sites and mobile instant messengers, they are distracted by the many entertainment content that one can easily find online. The rising culture of fatalism and procrastination may also give rise to this attitude among some Filipino college students.

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Our Mobile Planet (2013) claimed that it is plausible that people with high social interaction anxiety will be more disposed to depend on their smartphones since 83% of smartphone users use their phone for communication. Because social anxiety is lower when interacting online than when interacting in real life, interacting online rather than face-to-face has proven to be a useful alternative, fulfilling the need to interact in a less direct way (Yen et al., 2012). Social interaction anxiety is observed in college students who experienced or who are still experiencing bullying, and students with low social skills based on personal interviews. This experience triggers a higher chance of compulsive smartphone usage among the participants. Social networking sites like Twitter, Ask.fm and Curious Cat also allow college students to express their thoughts and sentiments freely, however this may be a double-edged sword as the use of anonymity features or fake accounts over social networking sites perpetuates a culture of cyber-bullying.

According to Chan (2014), individuals consider latest smartphone models to be a symbol of material possession. In addition, materialism affects consumers’ reasoning when evaluating purchases, and influences their post-purchase satisfaction (Richins, 2013). Materialism in college students may lead to compulsive usage of smartphones because of their trend-hopping and people- pleasing personalities. After purchasing the latest model of their preferred smartphone brand, college students tend to show-off their gadgets through frequent usage around peers and other people. In some cases, a group of friends in college may directly or indirectly influence one’s choice of smartphone brand and model.

Sanfilippo (2013) claimed that techno stress becomes more serious as smartphone adoption becomes more prevalent since college students’ top priority is to get connected and technological advancements augment the over-attachment of users to their phones. When compulsive behaviors are perceived to be inescapable, adverse consequences of psychological distress such as depression and stress are more likely to be induced as well (Matusik & Mickel, 2013). Techno stress is observed among the majority of respondents because of the information seeking, entertainment seeking, gaming, mobile social network services, and mobile instant messenger features that smartphones provide. The survey showed that most respondents spent 8 and above hours on their smartphones on average every day. With the findings, it is highly positive that college students experience techno stress after compulsive smartphone usage.

According to Oulasvirta et al. (2012), the smartphone’s ability to quickly access rewards like social networking and communication induces college students to check their phones more often. Repetitive checking of mobile phones is considered a compulsive behavior. People who use their phones excessively experience difficulty controlling the time they spend on the device and are easily distracted by phones (Bianchi and Phillips, 2015). In the study, the relationship of compulsive smartphone usage with motivation to study showed a statistically insignificant finding, which does not support the proposition that low compulsive smartphone usage leads to higher motivation to study. One reason for this result, is that the respondents chosen for the purpose of this study were already experiencing compulsive smartphone usage, which then caused them to experience techno stress.

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Recommendations

We would like to recommend the replication of the study using a larger number of participants from other key cities of the Philippines to increase the reliability and representation of the student population nationwide. Likewise, marketers may be interested in conducting the same study in corporations to test the moderating effect of interpersonal skills in the relationship of psychological traits with compulsive smartphone usage, which results in either motivation to work or techno stress in employees.

There is also a need to assess participants focusing on the different smartphone uses of information seeking, entertainment seeking, gaming, mobile social network services, and mobile instant messaging to check if there are significant differences for each use. Future researchers may also consider using a long-term design with a mixed-methods approach for a more comprehensive study.

Acknowledgements

The present researchers would like to acknowledge their mentor, Dr. Reynaldo Bautista, Jr., who shared his valuable insights to the development of this academic research. This is also dedicated to our parents and friends for their moral support and unconditional love, and who served as our inspiration to fulfill this research. Above all, we thank our Lord for all the physical and mental strength He showered upon us.

References

Ahn, H. J., Wijaya, M. E., & Esmero, B. C. (2014). A systemic smartphone usage pattern analysis: Focusing on smartphone addiction issue. International Journal of Multimedia and Ubiquitous Engineering, 9(6), 9–14. Ajzen, I. (July 2006 ). Perceived behavioral control, self-efficacy, locus of control, and the Theory of Planned Behavior. Bae, S.-M. (2017). The relationship between the type of smartphone use and smartphone dependence of Korean adolescents: national survey study. Children and Youth Services Review 81, 207-211. Baturay, M. H., & Toker, S. (2015). An investigation of the impact of demographics on cyberloafing from an educational setting angle. Computers in Human Behavior, 50,358– 366. Bian, M., & Leung, L. (2015). Linking loneliness, shyness, smartphone addiction symptoms, and patterns of smartphone use to social capital. Social Science Computer Review, 33(1), 61– 79. Chou, M. C., & Liu, C. H. (2016). Mobile instant messengers and middle aged and elderly adults in Taiwan: Users and gratification. International Journal of Human Computer Interaction, 32(11), 835–846. Frison, E., & Eggermont, S. (2015). The impact of daily stress on adolescents' depressed mood: The role of social support seeking through Facebook. Computers in Human Behavior, 44, 315–325.

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Hong, F. Y., & Chiu, S. L. (2016). Factors influencing Facebook usage and Facebook addictive tendency in university students: The role of online psychological privacy and Facebook usage motivation. Stress and Health, 32, 117–127. Hou, J., Nam, Y., Peng, W., & Lee, K. M. (2012). Effects of screen size, viewing angle, and players' immersion tendencies on game experience. Computers in Human Behavior, 28, 617–623.Interpersonal consequences of social anxiety. Retrieved from https://esilab.berkeley.edu/wpcontent/uploads/2017/12/Heerey-Kring-2007.pdf Jang, Y. B. (2014). Effects of mobile instant messenger usage pattern and intensity on users' social capital: Focused on users in their 20's and 30's. Journal of Digital Convergence, 12(11), 541–548. Jeong, S. H., Kim, H. J., Yum, J. Y., & Hwang, Y. R. (2016). What type of content are smartphone users addicted to?: SNS vs games. Computers in Human Behavior, 54,10–17. Ku, Y. C., Chu, T. H., & Tseng, C. H. (2013). Gratifications for using CMC technologies: A comparison among SNS, IM, and e-mail. Computers in Human Behavior, 29(1), 226–234. Notanno, A. S. (1998). Moderators of perceived behavioral control's predictiveness in the Theory of Planned Behavior: A meta-analysis. Journal of Consumer Psychology, Vol. 7 No.3. Park, S. W., Cho, K. S., & Lee, B. G. (2014). What makes smartphone users satisfied with the mobile instant messenger?: Social presence, flow, and self-disclosure. International Journal of Multimedia and Ubiquitous Engineering, 9(11), 315–324. Salehan, M., & Negahban, A. (2013). Social networking on smartphones: When mobile phones become addictive. Computers in Human Behavior, 29, 2632–2639. Shahibi, M., & Abdul Aziz, F. (2017). The effect of psychological traits, compulsive behavior and techno stress on smartphone usage. International Journal of Academic Research in Business and Social Sciences. The consequences of techno stress for end users in organizations: conceptual development and empirical validation. Retrieved from http://www.tecnostress.it/wp-content/uploads/ 2015/02/Consequences-Techno stress-End-Users.pdf The dark side of smartphone usage: psychological traits, compulsive behavior and techno stress. Retrieved from https://pdfs.semanticscholar.org/83cf/ac5ff6c789089b852c 11106eb445 00567078.pdf The effect of psychological traits, compulsive behavior and techno Stress on smartphone usage. Retrieved from http://hrmars.com/hrmars_papers/The_Effect_of_Psychological_Traits,_ Compulsive_Behavior_and_Techno_Stress_on_Smartphone_Usage.pdf Wang, J. L., Gaskin, J., Wang, H. Z., & Liu, D. (2016). Life satisfaction motives and excessive social networking site usage. Addiction Research and Theory, 24(6), 450–457. Wang, P., ZHao, M., Wang, X., Xie, X., Wang, Y., & Lei, L. (2017). Peer relationship and adolescent smartphone addiction: The mediating role. Journal of Behavioral Addictions, 708–717.

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The effect of loss modeling in health insurance pricing on underwriting profitability

Soleil G. Baria and Tomas S. Tiu De La Salle University [email protected]

Abstract

The paper aimed to demonstrate higher profitability from the use of loss modeling on the estimation of health insurance product pricing utilized by Health Maintenance Organizations using the Frequency-Severity Method. This is opposed to the traditional Loss-Cost approach, which only estimates claims severity. Our results show that by classifying data according to their similar characteristics, the risk of wrongly specifying a best-fit probability distribution is minimized. Percentiles can also be determined through Maximum Likelihood Estimation, thus avoiding the use of the central limit theorem that assumes normality in the data even when they lead to wrong model specifications and erroneous results. The modeled premiums were approximately 20- percent higher than the empirical premiums. It showed a 50-percent increase in underwriting profit at the onset. The 20-percent gap was also addressed through the adjustment of the frequency component, which proved the versatility of the pricing model.

Key Words: health maintenance organization, health insurance, frequency-severity method, loss-cost approach, maximum likelihood

Introduction

As rising healthcare expenditures became a growing concern for the Philippine Government, Health Maintenance Organizations (HMO) were established to create products that help individuals narrow down their costs of out-of-the pocket payment for medical expenses. HMOs coordinate the delivery of pre-agreed or designated health care services to its members through a network of health care providers, and marketed as health benefit packages. These packages are availed of through a fixed periodic fee, referred to as a premium, for a specified period, dictated by insurance regulation (Executive Order No. 192, 2015), and limited to a one- year contract subject to renewal. HMOs are not allowed to include savings and investment components into their products. Their sustainability would depend on the profitability of each contract, which must be competitive yet reasonable.

Insurers, including HMOs, push down prices of their insurance plans to remain competitive. Fuhrer (2015), for example, found a common insurance pricing dilemma where an insurer tends to attract groups with higher-than-manual claims experience, but would quote lower premium rates, thus causing losses. Albert (2014), on the other hand, found that health insurers

PHILIPPINE ACADEMY OF MANAGEMENT E-JOURNAL VOL. 2 NO. 2 September 2019 would lose by writing low claims groups, but would make money by quoting appropriate rates for all groups.

Executive Order 192 (2015) transferred the supervision of HMOs in the Philippines from the Department of Health to the Insurance Commission. The law increased the standards for doing healthcare insurance business, and made the industry highly regulated.

In this study, we propose a new premium pricing approach for higher profitability for HMOs by using the Premium Pricing Model based on frequency and severity of insurance claims using empirical data through the Frequency – Severity Method. Used in both developing markets and mature markets, this method would result in a more profitable premium pricing model by providing a systematic method in analysing losses arising from insurance claims. The model aims to produce more robust premiums that better reflect the insured’s risk profile based on historical claims data. It deviates from the Central Limit Theorem, which incorrectly assumes the normal distribution of insurance claims data. There is a need to find an appropriate statistical distribution that fits empirical local health insurance data.

By proposing a pricing model based on the frequency-severity method, we aim to provide a premium scheme that has lesser underwriting loss potential over the traditional pricing method currently used by the majority of domestic HMOs.

To operationalize the study, the conceptual framework for the Loss Modeling Pricing for Group Health Insurance is shown in Figure 1.

Figure 1. Conceptual Framework

Methodology

To investigate on the advantages and disadvantages of pricing using frequency-severity loss modeling, we structured the research as a quantitative study that uses historical loss values— as in insurance practice and resulted to an expected value of future losses.

Purposive sampling method was used due to selection of two companies who agreed to participate in the study. All other HMO companies who were approached to participate in this

71 www.paomassociation.wordpress.com study declined due to data confidentiality. Empirical data was gathered from two Philippine Health Maintenance Organizations (HMOs) who volunteered providing comprehensive claims data and standard prices under separate legally binding Non-Disclosure Agreements requiring anonymity for both companies. The other HMOs declined to participate in this study.

Empirical historical claims data provided by both companies in raw electronic format were used in computing prices for the proposed model. Prior consent was secured from the executive, legal and actuarial groups of Company A and Company B.

An initial list of 2003 to 2015 data of Principal member claims was provided by Company A containing billed amount, payable amount, type of claim, illness information, billing dates, policy holder contract dates and Principal policy holder birthdates. After pre-processing, the data time horizon narrowed down to a 10-year period between January 1, 2006 to Dec 31, 2016 for In- Patient and Out-Patient claims. Other types of claims like Emergency, Maternity and Annual Physical Examination were add-ons to standard group pricing. Claims from January 2003 to December 2005 constitute less than 1% of the total claim volume.

A five-year comprehensive data of Principal member claims from January 1, 2012 to Dec 31, 2016 was provided by Company B. The data included billed amount, payable amount, type of claim, illness information and billing dates. They provided data on the average age per company and current year number of principals per company.

Company A and Company B has different time horizons. Both companies submitted at least 100,000 claims each for modeling (Table 1). The claims submitted are adequate as sample size for modeling. Both companies provided member demographics. Main concern for the empirical data submitted was the reasonability of the volume of claims or the ideal length of time relative to how long before an HMO can accumulate several data points needed by the software to come up with best fitting distribution. Insurance companies need at least three months to actualize Included but Not Reported (IBNR) claims. Loss data that both companies provided comply with these considerations.

Company A and Company B confirmed that their group medical benefits programs are renewable annually subject to underwriting and pricing adjustments based on yearly claims experience.

Table 1 Data Summary

Company A Company B Total contract years 10 5 Number of insured companies >1,000 <50 in the study Number of claims included in >100,000 >100,000 the study

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The study covered a stochastic parametric modeling approach in identifying the distribution of each type of loss using MINITAB 18. The research methodology looked at Risk Classification and Loss Estimation defining the limitations of the Standard Risk Premium.

The average group size and average age consider the most stable number of principals in a contract year. Since group health insurance deals with corporate groups, principal changes in insured is directly affected by employee attrition and hiring. The potential for loss is found when a low risk individual is replaced by a high risk individual. Another risk is when there is a significant increase or drop in the number of principals during the contract year causing a misalignment with premiums paid.

The average age and optimal group sizes for Company A were computed. For Company B, data for average age and group size were provided. Billed amount data by the total claim per event (per member per incident per occurrence date) was listed. The Accident Year Loss Aggregation (Year of Loss Occurrence Date) to group annual data was the preferred method to adjust for inflation based on the Philippine Consumer Price Health Index. The adjusted billing amounts were checked by comparing year-on-year changes for Per Member, Per Company and Overall Portfolio. Any significant changes were red-flagged.

In-Patient Data and Out-Patient Data were separated by volume and behavior. The Severity and Frequency thresholds were established through parameter estimation in MINITAB 18. By default, MINITAB 18 uses Maximum Likelihood Estimation. The 95th percentile is assigned as the Severity Threshold between Attritional Losses and Shock Losses. It is also the Maximum Benefit Limit of the product plan being priced. The Frequency scores were identified for a range of values for the average yearly frequency given by the formula (Klugman, 2008).

Once thresholds per risk score were identified, the values were also verified through the assistance of a histogram. Severity scores on a risk map were based on parameter estimation from MINITAB 18, each score representing loss amounts within a percentile. Frequency scores were based on a counting distribution.

Normality was first tested against the data. In a histogram of all claims from Company A in Figure 2, non-normality is apparent since the concentration of losses is within smaller amounts in the P 5,617.06 bin with 407,800 data points. The claim amounts were skewed to the right.

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Figure 2. Company A claims data from 2006 to 2015

Figure 3. Company B claims data from 2006 to 2015

For company B, non-normality (Figure 3) is again observed by the concentration of smaller losses found in the 3,791.41 bin that occurs in the 144,081 times and the maximum exposure within the five-year span is P 1,563,816.95.

From the above graphs, it was not appropriate for data to be measured by the central limit theorem since it would give an erroneous average leading to erroneous standard prices and possible losses instead of profits.

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However, when the data was analyzed separately based on two claim types: inpatient and outpatient, it was found that outpatient claims were more frequent than inpatient claims, while inpatient claims were more frequent than outpatient claims.

For Company A, outpatient claims were 30 times more frequent and inpatient claims were around twenty five percent (25.18%) larger than outpatient claims. For Company B, outpatient claims were five times more frequent than inpatient claims. Inpatient claims were around thirty percent (29.08%) larger than outpatient claims. Exposures were then fitted to non-normal continuous distributions using MINITAB.

Two models were used for premium pricing. They are the attritional loss model and the combined loss model. For the attritional loss model, in order to attain the objective of a profitable premium pricing, the Base Risk Premium was derived by getting the product of the result of the Severity Model and the Frequency Model. The severity is with the average of the worst 5% losses at the tail of the distribution, while the frequency is concerned with the average of all the claims under this risk class.

From Sharma & Ahluwalia (2010), the base risk premium pricing equation is adjusted by introducing a constant k in both parts of the equation, E(S) = E(N) × kN × E(Y) × kY. The constants kN and kY are external inflation factors for severity and frequency such that if the insurer observes a change in a variety of external factors such as regulation or medical trends, a value can be assigned accordingly. For example, if an increase in hospital room and board rates consequently increases inpatient cost by five percent, then the insurer assigns the value of 1.05 to kN to increase the expected value for inpatient severity cost. The estimation of the factors kN and kY is beyond the scope of this study. However, it is important to include these factors in the equation in order for it to be a realistic pricing model.

Shock Losses are high impact, low frequency losses. Estimating shock losses to get the appropriate margin of adverse deviation. This refers to the difference between the theoretical model and the actual event. Shock Losses are identified through the risk map. They are very critical in pricing premiums profitably to allow built-in shock losses in the modeling.

The standard risk premium per claim type = E(S) × λ is the amount charged to a group with an average age same as the portfolio average age, with the size of the most sample group within Private Room benefit in the portfolio, with a Maximum Benefit Limit equal to the threshold u identified during risk classification.

The combined loss model is the second and final pricing model where estimates for attritional and shock losses of both inpatient and outpatient claims are combined to make the final standard risk premium. The Standard Risk Premium produced on combined loss model is the amount to be paid the following year for a group of n-number of principals with an average age-a, for a Private plan with a benefit limit of u.

Standard Risk Premium = (E(S)IP × λ IP) + (E(S)OP × λ OP)

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The estimate for the occurrence of Shock Losses, or the high impact low likelihood event, represented by λ, was guided by the Extreme Value Theory. Advantages of the Frequency- Severity Method over the traditional method are the risk management mechanisms where in losses were categorized based on claims behaviors, and the separate analysis of claims frequency.

Results

The resulting continuous distributions of empirical claims exposures of both companies showed non-normality and finds differences amongst claims trend behavior between two claim types.

The mean of the distribution is approximately four times less than the 95th percentile, hence, if used in pricing, there is a probability that the premium charged is four times smaller than the average claim. In aggregate, the insurance claims funds may not be able to sustain continuous high impact losses, or losses from companies in high risk industries.

The 95th percentile is the Maximum Benefit Limit of the product priced in this study. The value is also incorporated as the boundary between high risk claims and low risk claims during assignment of impact scores for risk mapping.

Risk scores were assigned based on manual ranges resulting to the frequency mapping for Company A and for Company B. Severity scores and likelihood scores were incorporated into a risk map for Company A and Company B in order to determine attritional losses (risk score below 16) and shock losses (risk score 16 and above). Attritional losses and shock losses for each claim type were also processed to find the best fitting distribution. Results from the segmented data agree with earlier results after concluding the Weibull distribution.

From 2010 onwards, the industry moved towards documenting and indexing high risk industries, formally excluding them from standard insurance portfolios and products.

Since pricing is more concerned with the current and future state of the business, the outlier-years have been excluded in the analysis of Attritional losses, being that attritional losses are the reflection of standard insured behavior. The model does not discount the fact that a company is always exposed to asymmetric information, which may be a cause for unknowingly insuring a high-risk group under a standard- priced program, hence information from 2008-2009 were still included in the analysis for Shock Losses.

Following the equation for the base risk premium, the external inflation factors kN and kY were provided and assumed as 1.00 by default suggesting there is no inflation expected in the next period. This value may change under the discretion of the company.

Based on equation 1, the computed standard risk premium is shown in Table 2. E(S) is the expected cost of attritional losses, while λS is the expected increase to cover a shock loss.

PHILIPPINE ACADEMY OF MANAGEMENT E-JOURNAL VOL. 2 NO. 2 September 2019

The total cost represents the cost to cover each type of claim, the sum of the two values is the standard risk premium for a group of n-number of principals with an average age a. The Maximum Benefit Limit of the product is the 95th percentile of in-patient claims.

The Standard Risk Premiums are applicable to standard risk portfolio shown in Table 2.

Table 2 Computation of the Standard Risk Premium

Company A Company B Cost Component In-patient Out-patient In-patient Out-patient E (N) 11,000.21 2,532.13 10,430.18 4,776.20 λ S 1.0444 1.4495 1.1409 2.5787 Total Cost 11,593.30 3,670.21 11,900.30 12,316.20 Premium P15,263.56 P15,263.56 P24,216.50 P24,216.50

In Figure 4, modeled premiums are 24.39% higher than empirical premiums for Company A, and 18.35% higher for Company B.

Figure 4. Comparison of empirical and modeled premiums

Modeled claim amounts are based off the total billed amount or the full amount of the claim as opposed to the total covered amount or the amount shouldered by the insurer.

The total billed amounts in comparison to the total covered amount are 21.07% higher for Company A and 24.19% higher for Company B. The results showed the equivalence of results from the loss-cost model and the frequency severity-method, the resulting modeled premiums and the empirical premiums have insignificant difference.

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Conclusions and Recommendations

Our study suggests that using the proposed Frequency-Severity Method pricing model results in a more robust and profitable premium pricing, in terms of underwriting profit, of health insurance plans. This can result to higher premiums for both Company A and Company B and other HMOs in general, if they adopt the new premium pricing methodology. This is significant for the HMO industry since losses can be lowered through the usage of more accurate historical loss distribution results making it easier to control the cost to insure.

Results show that the primary driver for in-patient claims size is the claim severity or occasional losses with large claim amounts, while out-patient claims were primarily driven by frequency or small claims losses that occur often. Having the right information can help HMO companies to control the benefit plans and plan limits resulting to the better pricing of health insurance products leading to higher premiums and higher profits.

To attain higher profits and lower claims losses in the industry, the study suggests adopting the new premium pricing method in the Philippines, which would put the country in alignment with the premium pricing method practices of developed countries.

References

Albert, J. (2014). Developing Group Health Credibility. Society of Actuaries: Health Watch Issue 74, 12-14. Castaner, A., Claramunt, M. M., & Ribas, C. (2013). Health Insurance Pricing in Spain: Consequences & Alternatives. Universitat Barcelona. Executive Order No. 192, s 2015 reprinted in the Official Gazette (November 12, 2015). Fuhrer, C. (2015). A Practical Approach to Assigning Credibility for Group Medical Insurance Pricing. Society of Actuaries, 1-14. Insurance Commission, Guidelines on the Approval of HMO Products and Forms, Circular Letter No. 2017-19 Series of 2017. Kahn, P.M. (1962). An Introduction to Collective Risk Theory and Its Application to Stop-Loss Reinsurance. Transaction of Society of Actuaries, 14 (40). Klugman, S., Panjer, H., Wilmot G. (2008). Loss Models: From Data to Decisions. 3rd edition, John Wiley & Sons, 2008. 726pp. Marquis, M.S., Buntin, M.B., Escarce, J.J., Kapur, K. (2007). The Role of Product Design in Consumers' Choices in the Individual Insurance Market. Health Services Research. Newsom, M. & Fernandez, B. (2011). Private Health Insurance Premiums and Rate Reviews. Cornell University. Parodi, P. (2016) Pricing in General Insurance. Annals of Actuarial Science, 2016, vol. 10, issue 01, 118-119 Porrini, D. (2015). Risk Classification Efficiency and the Insurance Market Regulation. Italy: Dipartimento di Scienze dell‘Economia, Universita del Salento, Ecotekne. Sharma, P., & Ahluwalia, J. (2010). Re-Pricing Health Insurance Product. Insurance Regulatory and Development Authority, 10 (7), 18-26. Tao, C. (2004, April 27-29). Pricing Private Health Insurance Products in China. Dresden, Germany: 2nd International Health Colloquium.

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Werner, G., & Modlin, C. (2016, May). Basic Ratemaking Fifth Edition. Retrieved February 2017, from Casualty Actuarial Society: https://www.casact.org/library/studynotes/Werner_Modlin_Ratemaking.pdf. Zlibar, T. R. (2016). The Actuarial Uses of Health Service Indicators and Projections of Health Service Expenditures in Croatia. Croatia: F&R Insurance Consulting.

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Author Guidelines

Manuscript requirements

1. Novelty: The contributions should be original and unpublished. They must also currently be not under consideration in any other journal. 2. Number of pages and layout a. Maximum of 20 pages (8.5” x 11” paper), inclusive of tables, figures, references, and appendices b. Typeface and font size: Times New Roman 12 points c. Text spacing: single, with one space allotted in between sections d. Manuscript title: font size 14 points, boldface e. Section headings (Introduction, Methods, Results/Findings, etc.) are in boldface, sub-headings in italics f. Margins: 1” on all sides g. Pagination: top right 3. Manuscript format a. Research articles should include the following common sections: Title, Abstract, Keywords, Introduction, Methods, Results/Findings, Discussion, Conclusion, Recommendations (if any), Acknowledgments (if any), and References. b. Abstract should not exceed 300 words. c. Five to seven keywords must be indicated. d. Tables and figures should be inserted within the text itself instead of being appended to the manuscript. e. The names and all other details of the authors should not be indicated anywhere in the manuscript (i.e. institutional affiliation, contact number, etc.). These should appear only on the Cover Page. f. The text must only be written in a single column. Final formatting will be done by the editors. 4. Cover page a. The manuscript comes with a Submission Form. This is not included in the pagination of the manuscript, and it comes as a separate document when sent via email. b. If there are multiple authors, the names should be arranged according to the extent of their research contribution. If all the authors had more or less equal contribution, the names must be arranged alphabetically. 5. Reference guide a. The e-Journal makes use of the APA Formatting and Style. Contributors must utilize this format consistently throughout their manuscript. b. For electronic references, provide the DOI (digital object identifier). If this is not available, provide the complete URL that leads to the actual online document, including the date of access. Likewise, indicate all information pertaining to the article (e.g., author, title of article, date of publication).

PHILIPPINE ACADEMY OF MANAGEMENT E-JOURNAL VOL. 2 NO. 2 September 2019

6. Copyrighted materials and acknowledgments a. Copyrighted materials (data, table, illustration, photograph, etc.) that are included in the manuscripts must have been cleared first from the copyright owners prior to submission to the Journal. b. Copyright owners must also be mentioned in the Acknowledgment section. For tables, figures, or photographs reproduced from other sources, authors must acknowledge the source in the caption identifying these.

Submissions, acknowledgments, and communications

1. All submissions should be sent through email. Two electronic copies should be submitted: one in PDF format then the other in MS Word format. Emails should be sent directly to [email protected] with the subject heading “PAoM e-Journal: Manuscript Submission”. 2. For manuscripts with several authors, the authors should assign a Corresponding Author to whom communications shall be sent. The corresponding author will be responsible for informing his/her co-authors about the status of their submission. 3. Submissions shall be acknowledged in writing by the Managing Editor or his designated staff. If no such acknowledgment is received by the Corresponding Author within one week, follow up should be done with the Journal. 4. Final manuscripts must be submitted in Microsoft Word format. Authors must also submit a short profile for possible inclusion in a section titled “The Contributors”. This must include the authors’ complete names, academic and / or professional affiliations, educational background, research interests, and email address. 5. Authors must execute a publication copyright agreement and assume all liabilities. Under the agreement, authors agree to hold harmless the Philippine Academy of Management and the editors of the PAoM e-Journal against any claim, demand, suit or action arising from claims of plagiarism, libel, defamation, obscenity, unlawfulness or invasion of privacy or copyright infringement in their work.

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The Contributors

Mr. Raymond Paderna De La Salle University [email protected]

Raymond Paderna obtained his bachelor’s degree in Business Management from De La Salle University – Manila and his Master’s degree in Business Administration from the European University in Montreux, Switzerland. He was involved in his family’s metalworking business for 26 years and has been teaching in his undergraduate alma mater for 29 years. His research interests are in family business management, small business sustainability, as well as fashion and arts entrepreneurship.

Mr. John Benedict C. Guevarra De La Salle University [email protected]

John Benedict C. Guevarra recently obtained his Bachelor’s degree in Business Management at De La Salle University – Manila. History, military strategies, mythology, and general aeronautics are some of the fields which interests him. His family has long been involved in commercial aviation and both of his parents work in the airline industry. He intends to follow in his parents’ footsteps and pursue a career in the airline industry as a pilot.

Mr. Limuel John S. Dominguez De La Salle University [email protected]

Limuel John S. Dominguez recently obtained his Bachelor’s Degree in Business Management from De La Salle University - Manila and his research interests are in the field of corporate social responsibility and sustainability. His goal is to one day be a catalyst for a cleaner and sustainable Philippines.

Mr. Michael Angelo T. Luyun De La Salle University [email protected]

Michael Angelo T. Luyun is a newly graduated student from De La Salle University – Manila with a degree in Business Management. His research interests are an interesting mix of economic development and urban- contemporary fashion. He also interned as a business consultant for the European Chamber of Commerce in the Philippines. In the near future, Gelo also plans to be a commercial airline pilot while working on his own clothing brand.

PHILIPPINE ACADEMY OF MANAGEMENT E-JOURNAL VOL. 2 NO. 2 September 2019

Mr. John Bryan P. Navarro De La Salle University [email protected]

John Bryan P. Navarro is a fresh graduate from De La Salle University with a Bachelors’ degree in Business Management. He is fascinated by consumer behavior and how this ultimately influences their purchasing decisions. Gamification and its effects on organizational competitiveness also interests Bryan.

Dr. Candida S. Santos Ateneo de Davao University [email protected]

Candida S. Santos graduated from BS in Management Engineering, Master of Science in Teaching Mathematics and Doctor of Business Administration at Ateneo de Davao University. She also earned units for Secondary Education and Civil Engineering. She is currently the Dean of the College of General Education, Management and Sciences and concurrently the Program Chair of BS in Entrepreneurship at Davao Doctors College. She is a consultant of family-owned Santos Land Development Corporation and helps manage Mindanao Hyperion Solar.

Ms. Mary Fatima D. Lompot Adamson University [email protected]

Mary Fatima D. Lompot works at Adamson University as Assistant Professor II. Her specialization is in the field of marketing and management. She has a strong educational background. She earned her bachelor’s degree in business management major in marketing from University of Santo Tomas. She got her master’s in management degree from University of the Philippines and is currently working on her dissertation paper for her Ph. D. in management degree in Adamson University.

Mr. Noel Sajid Murad De La Salle University [email protected]

Noel Sajid Murad is a Social Specialist at Ogilvy for The Coca-Cola Company. His professional expertise spans Advertising, Production, Entertainment, and the Theater Arts. He obtained his bachelor’s degree in Communication Arts from the University of Santo Tomas and his master’s degree in Marketing Communications from the De La Salle University. To date, he has three academic studies published, which have centered around Political Communications, LBGTQIA+ marketing, and more recently, social and digital marketing.

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Ms. Lora Deloverges Queñano De La Salle University [email protected]

Lora Deloverges Queñano is currently working as a Media Relations Officer at the Office of Senator Risa Hontiveros, Senate of the Philippines. She’s currently taking her Master’s in Marketing Communications in De La Salle University. She worked in the media industry before shifting to government service—she was a segment producer of various investigative and documentary programs of GMA Network, Inc. Her advocacies are women empowerment and anti-contractualization. She obtained the Bachelor of Arts in Filipino minor in Mass Communications in Polytechnic University of the Philippines.

Mr. John Terence Perez De La Salle University [email protected]

John Terence Perez is affiliated with NuEar Philippines Inc as the company’s clinical audiologist. He also supervises the hearing healthcare specialists of existing branches of the company and conducts hearing screening mission with partner foundations. He studied in University of Santo Tomas where he obtained his bachelor’s degree in Biology and Masters in Science major in Clinical Audiology, and is currently taking Masters in Marketing Communications in De La Salle University. His research interest focuses on invertebrate zoology, acoustics, and consumer behavior.

Ms. Soleil G. Baria De La Salle University [email protected]

Soleil G. Baria has a master’s degree in financial engineering from DLSU. She is an Associate Subject Matter Expert in Enterprise Risk Management for a Property & Casualty Insurer and takes part in research topics on Insurance and Risk Modelling.

Dr. Tomas S. Tiu De La Salle University [email protected]

Tomas S. Tiu is a faculty of De La Salle University. He has a Ph.D. Commerce from the University of Santo Tomas. His research interests are in health care finance, banking, risk management, corporate finance, and treasury.