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 The Business, Education and Technology Journal

Volume 2, NO. 2

Fall 2000
A publication of The School of Technology and Industry

Golden Gate University

 Table of Contents
From the Editor ................................................................................................................................ 2
Robert Fulkerth, Ed.D. and Constance Beutel, Ed.D.

Foreword ............................................................................................................................................ 3
Beth VanStory, President of iMotors.com

The Evolving Role of Logistics Service Providers (LSP) in Business-to-Business

(B2B) Order Fulfillment ............................................................................................................ 5
Dr. Richard L. Dawe, Ms. Ana Loo-Yung, Mr. Gary Collins, Mr. Kum Wah Loh and Mr. Albert Siddik

Internet Commerce in the 21st Century ....................................................................................15

David T. Lang and Thresa B. Lang

Cross-Cultural Training and the Second Circle Model ........................................................21

Karen Eastwood, Ph.D. and Monika Renard, Ph.D.

What is Behavioral Finance? ..................................................................................................... 27

Victor Ricciardi and Helen K. Simon

Integrated Marketing for the New Millennium ......................................................................35

Steven Lesh, MPA, PT, SCS, ATC

A case study of one online M BA program: Lessons from the first iteration of an
innovative educational experience .....................................................................................38
Lynne Schrum, Ph.D. and Angela Benson

Appendix: The School of Technology and Industry Faculty and Staff ............................. 47

About the Journal Submission Guidelines

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Business, Education and Technology Journal Fall 2000

1
 From the Editor
Welcome to the Fall 2000 edition of the Business, Education and Technology Journal. This edition’s focus is
electronic business and electronic commerce.

In troductor y com m en ts are provided by Beth
VanStory, President of Imotors.com.
In “The Evolving Role of Logistics Service Provid-
ers In Business-to-Business Order Fulfillment,” Dr.
Richard Dawe and his co-authors, Ana Loo-Yung,
Gary Collins, Kum Wah Loh and Albert Siddick, dis-
cuss the role of new and evolving technology tools in
the arena of Operations Management.
Next, David and Thresa Lang discuss Internet Com-
merce, with an emphasis on an overview of security tools.
In “Cross-Cultural Training and The Second Circle
Model,” Drs. Eastwood and Renard present discussion
of a program that produces partnerships among aca-
demic and business communities, whose objective is
to improve international trade.
In the change-of-pace article “What is Behavioral
Finance,” Victor Ricciardi presents a case for the evolv-
ing theoretical framework called Behavioral Finance,
which integrates sociological theories and practices
into traditional financial approaches to investment.
Steven Lesh next presents a paper titled “Integrated
Marketing for the New Millennium” that discusses the
changing nature of marketing, impacted as it is by
Internet and Web technologies.
Our concluding article by Dr. Lynne Schrum and
Ms. Angela Benson discusses a business/education
partnership aimed to produce an online MBA pro-
gram for a university’s business partner partici-
pants.
We welcome your comments, questions, and article
submissions for the Spring 2001 edition. You can see
the journal online at http://betj.ggu.edu.
Dr. Robert Fulkerth, Co-Editor
bfulkerth@ggu.edu
(415) 442-6556
Dr. Constance Beutel, Co-Editor
cbeutel@ggu.edu
(415) 442-6543

Open Call for Papers

We are happy to invite you to submit papers to be published in the Business, Education and Technology Journal
(ISSN 1528-1256). The Journal is published in paper and on the Web. Please visit us at http://betj.ggu.edu or
http://internet.ggu.edu/~bfulkerth.

Business, education and technology professionals are Interested authors are requested to send their pa-
invited to submit papers relevant to their own or re- pers to either co-editor listed below. Please e-mail sub-
lated fields. The Journal is a peer-reviewed publica- missions with the article attached in Rich Text Format.
tion of the School of Technology and Industry at For initial submissions, papers with extensive graph-
Golden Gate University in San Francisco. ics should also be submitted in paper form.
For educators, we are particularly interested in new
developments in teaching business and technology Robert Fulkerth, Co-Editor
subjects. School of Technology and Industry
Topics should be of interest to multiple readerships (415) 442-6556
in areas of business, education and technology. Pa- bfulkerth@ggu.edu
pers that address discipline-specific topics as well as
those that have applications across disciplines are val- Constance Beutel, Co-Editor
ued. Conceptual, developmental and theoretical /ap- School of Technology and Industry
plied research articles are appropriate. (415) 442-6543
We seek articles of approximately 4500 words. The cbeutel@ggu.edu
Journal will also consider publishing shorter papers
(2000-3000 words) based on in-progress research, Golden Gate University
innovative practices, or work that actively connects 536 Mission Street
the Journal’s primary emphases. San Francisco CA 94105

Business, Education and Technology Journal Fall 2000

2
 Foreword
To begin this issue of the Business, Education and Technology Journal, Beth VanStory, President of iMotors.com,
discusses e-commerce and e-business issues.

Beth VanStory is enjoying a wide-ranging career in the field of the Internet, World Wide Web and electronic com-
merce. Currently President of iMotors.com, she is responsible for managing the entire customer experience from
acquisition through delivery, including business development, marketing, sales, service and systems development
and operation.
Prior to joining iMotors, she was Vice President of Office Depot Online, where she was responsible for building
and managing the online business in targeting the small office/home office market. She built and led the team that
produced the award-winning OfficeDepot.com web site and grew it into a profitable business.
From 1995 to 1997, VanStory served as vice president and general manager of new media for The Weather Chan-
nel. Her achievements there included leading the growth of the award-winning weather.com site to its current status
as one of the top content sites on the Internet. She also helped extend The Weather Channel brand into new interac-
tive distribution channels, including cable modems and push technologies.
She was also Director of Marketing for Bell Atlantic Video Services, and she held product management and mar-
keting positions with MCI. She is a former director of shop.org, the leading online retailing association, and Michaels
Stores, the leading retailer of arts and crafts supplies. VanStory earned a Master’s degree in marketing and manage-
ment from Northwestern University’s Kellogg School of Management. She holds a bachelor’s degree in Finance and
Management Information Systems from the University of Virginia.
Today, more than ever, technology is changing the way transitioned customers from ordering via the phone
companies do business. The rapid increase of infor- and fax to ordering online, they were able to reallo-
mation technologies available to the marketplace is cate their customer service representatives to higher
in turn increasing the pressure on companies to de- value tasks. Their representatives began proactively
velop and manage electronic commerce technologies contacting their best customers, resulting in deeper
and associated managerial techniques. penetration into those accounts and higher retention.
Specifically, many companies are using technology to Furthermore, the company estimated that the cost of
reduce costs and better serve customers. Others are us- taking an order via its web site was one-tenth the cost
ing technologies to reach new markets and customers. of using a telephone rep.
Included in the technologies devoted to customer With Internet sites, small businesses are able to
service are the so-called telephony technologies such extend their reach beyond the traditional geographic
as Integrated Voice Response (IVR), which help cus- boundaries of a physical location or direct sales rep-
tomers serve themselves. One common example is the resentatives. Almost overnight, millions of new en-
ability of the customer to get flight arrival and depar- trepreneurs have created national and global markets
ture time from airlines. Others, such as Computer Te- for collectables and other consumer-to-consumer
lephony Integration (CTI), enable customer service items on sites such as Yahoo! and eBay. Also, with an
reps to answer the phone with the customer’s com- Internet site, businesses can also extend their hours
plete profile and contact information appearing on of availability.
their computer. This information not only helps pro- All of this opportunity doesn’t come without some
vide better service, but also shortens the amount of cost. Companies must be prepared to address the high
time needed to spend with the customer, reducing expectations of Internet customers with respect to
costs. Electronic Customer Relationship Management rapid response times. In some cases, companies may
(ECRM) systems provide an integrated system for need to add customer service representatives in a
conducting and tracking customer contacts and en- phon e cen ter. Today, sever al com pan ies offer
suring closed loop customer service. outsourcing solutions for customer service. These
In many cases, technology can replace mundane companies are great resources for handling all of cus-
tasks previously performed by humans, and reduce tomer service for some smaller companies and are a
costs. These types of applications do not necessarily good source of incremental capacity for some larger
result in work force reductions. Rather, they can en- firms during peak times.
able companies to use their workers for more valu- Technology can help drive efficiencies in basic busi-
able functions and tasks. For example, as Office Depot ness support areas as well. Companies like Ariba and

Business, Education and Technology Journal Fall 2000

3
Commerce One are helping midsize to large compa-
nies streamline, track and control procurement costs
for everything from manufacturing supplies to paper.
For smaller companies, firms like Purchasepro.com
help to streamline ordering and offer discounts by
aggregating volume among their member companies.
They also create markets among their member com-
panies by facilitating the exchange of products and
services to each other, saving marketing expenses and
increasing revenues.
While technology can certainly reduce costs,
streamline mundane tasks, and generate efficiencies,
there are some limitations. First, with a web site, a
Business, Education and Technology Journal Fall 2000
4
company’s challenge is to replicate its best sales per-
son. To do so, companies must provide comprehen-
sive information about products and services and
effectively “sell” on the site. Second, they must have
humans available to handle questions and problems.
Finally, they should ensure that they have the right
resources or partners to ensure good planning and
implementation of technology.
In sum, as technology changes the way companies
do business, businesses both small and large can profit
from the change, incorporating and reflecting new
strategies and opportunities for their various market-
places, their customers and their personnel.
 The Evolving Role of Logistics Service Providers (LSP) in
Business-to-Business (B2B) Order Fulfillment
Richard L. Dawe, Ph.D., Ana Loo-Yung, Gary Collins, Kum Wah Loh and Albert Siddik
Introduction
The evolution of e-business tools using the internet
has spawned numerous improvements in global op-
erations management including collaborative plan-
n in g, forecastin g, an d replen ishm en t (CPFR),
advanced planning and scheduling (APS), electronic
procurement, landed cost calculators, and global vis-
ibility of inventory. These improvements have raised
the level of execution of the procurement, produc-
tion, and logistics processes (commonly referred to
as the supply chain) with manufacturers, distributors,
and retailers. A major role that is impacted is that of
the outsourced service providers to supply chain op-
erations such as contract manufacturers, application
service providers (ASP), consultants, software provid-
ers, and logistics service providers (LSP)
The purpose of this paper is to report on two re-
search studies on the evolution of the role of the lo-
gistics service provider in e-business: 1) identification
of the provider and service segments, 2) landed cost
calculator capability. The research studies were both
conducted by the e-Operations Center at Golden Gate
University with sponsorship provided by Ryder Inte-
grated Logistics and the Fritz Institute of Global Lo-
gistics.
Golden Gate University (www.ggu.edu), located in
San Francisco, is the third largest private university
in California. It is second in all North American uni-
versities in degrees conferred to international students.
The Edward S. Ageno School of Business offers un-
dergraduate, graduate, MBA, and doctoral degrees in
Operations Management. The school recently estab-
lished an MBA and MS degree in e-business. To sup-
por t this effor t, the Op er ation s Man agem en t
department created a competency center to provide
research, scholarship, internship, and publication op-
portunities for its students. The e-Operations Center
works in partnership with global industries to pro-
mote a better understanding of the development of
e-business operations. This paper reports our initial
findings of the research, which is a work-in-process.
Continuing research findings will be reported peri-
odically. Parties interested in the research should con-
tact Dr. Dawe at Rdawe@ggu.edu.
Business, Education and Technology Journal Fall 2000
5
The sponsors for this research are the Fritz Insti-
tute of Global Logistics (www.fritzinstitute.org) and
Ryder Integrated Logistics. The Fritz Institute is a
nonprofit research organization of Fritz Companies,
one of the world’s largest global customs brokers and
freight forwarders. Ryder Integrated Logistics is one
of the largest global logistics service providers, fo-
cusing in the high technology and automotive in-
dustries.
The authors of this article are Dr. Richard L. Dawe,
Director of the e-Operations Center and Executive
Coordinator of the Fritz Institute; and masters de-
gree students at Golden Gate University, Ms. Ana Loo-
Yung, Mr. Kum Wah Loh, and Mr. Albert Siddik. Ms.
Loo-Yung served an internship position with RIL and
Mr. Loh and Mr. Siddik assisted as a term project for
their Materials & Logistics course work. The authors
wish to thank Mr. Greg Hazlett and Mr. Mark Janke
of Ryder Integrated Logistics in San Francisco for their
support in these research efforts, which took place
from April to August 2000.
I. Overview of the new operations
management
The Fritz Institute has been studying the evolution of
competency in global operations management, com-
monly known as “supply chain management,” for over
four years. It has documented best practices com-
prised of systems, processes, and organizations that
have been proven to add value in global operations.
The Fritz Institute, along with others, has successfully
documented that competency improvement leads to
substantial increases in value for any organization. The
current study by the e-Operations Center at Golden
Gate University adds new information on the impact
of e-business tools to the activities of the LSP in im-
proving operations competency and the role of the
service providers in this evolution.
The highest order competency, channel optimiza-
tion, requires internal and external collaboration,
which was a major hurdle prior to the arrival of elec-
tronic business tools. The electronic business wave has
created an overwhelming opportunity for organiza-
 T he Evolving Role of Logistics Service Providers (LSP) in Business-to-Business (B2B) Order Fulfillment, Dr. Richard L. Dawe, Ph.D., et.al.
tions to implement or enhance these best practices. In
fact, the challenge to use these tools to improve global
operations is so compelling that CEOs like Jim Kelly of
UPS, a leading global LSP, have declared this the “last
competitive frontier.” LSPs must either conquer this
capability or be banished from further competition.
Market forces are causing an evolution in the LSP
role to that of a fourth party logistics provider (4PL),
as depicted in the Figure 1.
Figure 1. Evolution in Supply Chain Outsourcing
Andersen Consulting defines 4PL as “A supply
chain integrator who assembles and manages the re-
sources, capabilities, and technology of its organiza-
tion with those of complementary service providers
to deliver a comprehensive supply chain solution.”
Andersen Consulting has identified three possible
4PL models:
Synergy Plus: The 4PL works with other LSPs and pro-
vides technologies and strategic skills that the indi-
vidual LSPs lack.
Solution Integrator: The 4PL works for the shipper and
is the central point of contact with all of the LSPs and
other service providers.
Industry Innovator: The 4PL runs the supply chains
for multiple industry players with a focus on synchro-
nization and collaboration
It is suggested that 4PLs will be absorbing logistics
departments from their customers. Their services will
be based on a percentage of the whole transaction or
on a negotiated standard fee.
Figure 2 shows the model of electronic business
created by the e-Operations Center. Global operations
are contained in the “back-end” of the model, whose
role it is to fill orders created by the “front end” of the
model. The dominance of the focus is on B2B flows,
which are ten times larger than the B2C flows. Only
selected companies may be involved in the direct flow
of products from business-to-consumers (B2C), but
Business, Education and Technology Journal Fall 2000
6
every business will be involved in B2B, making this
portion of business activity boundless.
Figure 2. Model for e-Business
This model defines the new competency levels cre-
ated by the e-business wave and guides the research
being done in all areas. The four levels of competence
for operations are
I. functional competence which optimizes opera-
tions performance using advanced management
execution systems such as warehouse and transpor-
tation management systems
II. enterprise competence in integrating cross
functional activities using advanced planning sys-
tems (APS) and intranets
III. channel integration which integrated business
partners using advanced collaboration, planning,
forecasting, and replenishment (CPFR) and
extranets
IV. e-business integration which integrates and
optimizes complete industries using Internet con-
nections through tailored portals
Many studies are now reporting on the new com-
petencies created by e-business tools. The results of
one such study were reported in the article “Full Speed
on the Electronic Highway.” This study found that
operations has gone through three identifiable stages
or generations in e-business capability1 :
1st Generation: Web sites that allow shippers to iden-
tify LSP locations, access their service guides, and trace
shipments—but probably not real time.
2nd Generation: Web sites that allow more real time
inventory visibility at a line-item level. The LSP can
notify the shipper of exceptions via pushed status
messages. These second-generation web sites are bet-
ter able to connect a shipper with its customers, mov-
ing beyond shipment visibility to channel visibility.
3rd Generation: Web sites that enable advanced col-
 T he Evolving Role of Logistics Service Providers (LSP) in Business-to-Business (B2B) Order Fulfillment, Dr. Richard L. Dawe, Ph.D., et.al.

laboration applications such as creating custom con- Research by the e-Operations Center has begun to
tracts, self invoicing, and automatic funds transfers. document the leading providers and services in B2B
This paper reports on the findings of two studies market ‘back-end’ operations. This early research is
of the evolving role of the LSP along the e-business shown in table 1 on pages 8–10.
technology dimension, where currently they serve as
key integrators in the physical world of product move- Service Categories:
ment. This role is likely to change dramatically as the E-Systems
key integration factor shifts from physical movement 1. ERP = enterprise resource systems
to information movement. The first study reports on 2. SCM = supply chain management applications
the market strategy of major service provider catego- 3. ASP = application service providers
ries and their service offerings. The second study re- E-xchanges
ports on the establishment of a key e-business tool in 4. Proc = providing procurement software
the B2B operations: the landed cost calculator. This 5. Host = running the software
tool is used by LSP to assess the total cost of the glo- 6. Log = logistics software
bal logistics transaction between a buyer and seller 7. 4PL = fourth party logistics to provide multiple
prior to the initiation of the contract. This capability logistics activities
is considered an essential beginning capability for LSPs Operations
to enter either the B2C or B2B transactions, which 8. CM = contract manufacturing
are rapidly becoming electronic exchanges between 9. SCM = supply chain activities (purchasing, pro-
market hubs that are connected by the web and e- duction, and logistics)
procurement software. Evidence the evolution of the 10. LSP = logistics service provider
automotive industry in creating electronic exchanges Consulting
between its thousands of suppliers; these exchanges 11. syst = systems implementation
also involve hundreds of LSPs, which must be linked 12. xchng = exchange implementation
to the transaction to create the efficiencies needed. 13. opers = operations implementation

II. Findings on Services and Provider Segments :

Providers Research
A report by Forrester Research found that the Internet
will give rise to a new market structure, “e-business
networks,” in which firms will form relationships
quickly, share information broadly, and create value
by making assets fully available online. To succeed in
this setting, companies will focus on their key
strengths, actively plugging in partners to fill the gaps.2
AMR Research indicates that B2B e-commerce will
be adopted at a more accelerated rate than many com-
panies realize, reaching $5.7 trillion by 2004. Further-
more, AMR predicts that companies that don’t take
aggressive approaches to B2B commerce and prepare
for digital e-markets, will lose customers and ulti-
mately fail.3
Forrester predicts that e-markets will ultimately
account for between 45% and 74% of e-Commerce
in a supply chain. The largest impact will be in the
computing and electronics, shipping and warehous-
ing, and utilities industries, where more than 70% of
online trade will go through e-markets. By contrast,
heavy industries and aerospace and defense will find
less than 50% of their e-Commerce flowing through
e-Marketplaces.4 A recent study by shop.org and Bos-
ton Consulting Group found that 38% of pure-play
Internet retailers are actually profitable.5
I. Hardware/Software Vendors = electronics pro-
ducers and fulfillment systems
II. Marketware Vendors = exchange systems ven-
dors
III. Logistics Exchange Providers = services that
link demand & supply for
transportation and warehousing
IV. Logistics Service Providers = provided multiple
logistics operations
V. Application Service Providers = provide rented
software applications
VI. Contract Manufacturers = produce goods for
OEMs
VII. Consultants = consulting
VIII. Industry Groups = vertical exchanges and co-
operatives
Table 1 demonstrates the provider segments and
their core service, but also documents the expansion
of segments into other service categories. An X in the
cell indicates that the service is offered by the pro-
vider. A reference number in the cell indicates that
the provider has a partner to provide that service. The
question mark in a cell indicates an unverified report
of a service offering. For example, IBM is a traditional
hardware provider; however, in the 1990’s they ex-
panded into many services. They now consider them-

Business, Education and Technology Journal Fall 2000

7
T he Evolving Role of Logistics Service Providers (LSP) in Business-to-Business (B2B) Order Fulfillment, Dr. Richard L. Dawe, Ph.D., et.al.

Business, Education and Technology Journal Fall 2000

8
T he Evolving Role of Logistics Service Providers (LSP) in Business-to-Business (B2B) Order Fulfillment, Dr. Richard L. Dawe, Ph.D., et.al.

Business, Education and Technology Journal Fall 2000

9
T he Evolving Role of Logistics Service Providers (LSP) in Business-to-Business (B2B) Order Fulfillment, Dr. Richard L. Dawe, Ph.D., et.al.

Business, Education and Technology Journal Fall 2000

10
 T he Evolving Role of Logistics Service Providers (LSP) in Business-to-Business (B2B) Order Fulfillment, Dr. Richard L. Dawe, Ph.D., et.al.
selves an e-business company supplying a variety of
services themselves and through numerous partner-
ships.
The pattern is for businesses in any category to
begin moving horizontally through the fulfillment
service market space after it has established a pres-
ence in its core service. The e-business wave created
the exchange service category and the plethora of
companies that have been formed to provide this ser-
vice in the last three years. This is the fastest growing
segment of the fulfillment marketplace by far; how-
ever, it is dwarfed by the potential of becoming a total
services provider (TSP) through acquisition, creation,
and partnerships. Due to the huge investment re-
quired to create a TSP, most are being formed by part-
nerships, a trend which may continue over the next
three years.
Of primary interest in this study is the ‘Operations’
services market space being provided currently by lo-
gistics service providers. Other provider categories are
beginning to make inroads on the control of this space,
particularly the exchange and systems providers. This
research focused on the ‘Operations’ service category
and the ‘Logistics Service Provider’ segments.
The operations service industry is building com-
petence using e-business tools, software, and process
improvements. Alan Greenspan, Chairman of the US
Federal Reserve Bank, testified to congress that the
improvements in global “supply chain” operations are
a key factor in the continued US commerce expan-
sion. This is real productivity that produces profit, not
a mirage.
Some of the new e-tools being used to improve
operations are the following:
Real Time Pricing Information: With a click of the
mouse, customers can get real time quotes and
available space information. Furthermore, a cata-
log of carriers and service providers is available if a
specific company’s service is desired.
Track and Trace Capabilities: These tools are avail-
able in many carriers’ web sites. Customers are able
to check the status of the shipments. Some web sites
offer the capability of pinpointing the location, sta-
tus, and expected arriving time of an in-transit
shipment. In order words, customers gain access
to carriers’ real-time databases. If any delays or un-
expected situations occur, the system will send an
e-mail message, or page an alert to customers in-
forming them the nature of the situation, or any
re-routing information.
Document Retrieval: Many carriers offer automatic
production of required shipping documents by
keying-in the correct information. These docu-
Business, Education and Technology Journal Fall 2000
11
ments and transactions data are stored in a data-
base. The customer can retrieve the necessary data
or documentation 24 hours a day, seven days a week
from anywhere. Therefore, it reduces the amount
of time, effort, and paperwork; thereby, speeding
up processes.
Data Warehousing: Many sites are starting to offer
order and sales summary reports. Some sites also
enable customers to do forecasting or trend analy-
sis by using past procurement, and sales data. The
site may allow customers to customized the con-
tent and presentation of their reports. These ser-
vices are offered for free or for a small fee.
Online Customer Service: Customers can contact
carriers via e-mail regarding any questions or prob-
lems. Online help usually arrives promptly because
carriers are monitoring the traffic through the web
sites. Some carriers offer customers the choice of
contacting their call center if a live service repre-
sentative is desired.
Execution Management Systems: Sophisticated
warehouse and transportation systems will be
implemented to automate the processes of order
assembly and load planning. This category of soft-
ware is the basis for functional competence, re-
quired before any further improvement can be
attempted.
Fierce competition is arising along the horizontal
space occupied by the LSP in the table. It is believed
this will become the standard way of conducting busi-
ness in the future. Customers, suppliers, and manu-
facturers will just log on to a logistics exchange and
have their logistics needs fulfilled. The players in the
creation of logistics exchanges and trading hubs – e-
marketplaces are highlighted in the Fulfillment table.
The exhibits point out possible providers of different
components that contribute to e-marketplaces. An
example is the i2i partnership with Danzas Group &
SAP (ERP systems provider).
In order for LSPs to remain competitive and to keep
their customer base, they will have to partner with
best of breed companies that possess strong integrated
information systems. A study conducted by the Uni-
versity of Tennessee, Ernst & Young, and Exel Logis-
tics showed that more than 50% of the respondents
said they (customers) expected their LSPs to support
e-commerce and other technologies. They increas-
ingly rely on LSPs for their information systems. Some
of today’s examples are the i2 Technologies and Cap-
stan Systems strategic partnership to integrate
Capstan’s online international shipment management
and compliance capabilities into i2’s FreightMatrix™
B2B logistics e-marketplace.
 T he Evolving Role of Logistics Service Providers (LSP) in Business-to-Business (B2B) Order Fulfillment, Dr. Richard L. Dawe, Ph.D., et.al.
According to a press release released by both com-
panies, the joint i2 and Capstan solution will be of-
fered through networked marketplace services. Based
on the unique architecture of the combined solution,
each participating logistics service provider will be
con n ected to other e-m ar ketplaces, in cludin g
FreightMatrix - creating a “network effect” where sup-
ply chain partners can dynamically generate logistics
content obtained from worldwide sources.6
The model theorizes that the new competence for
advanced fulfillment operations are the E-Market-
places through tailored portals. These will be connec-
tions of common web sites where buyers and sellers
come together to negotiate their procurement needs,
optimize their fulfillment operations, obtain systems,
and contract with service providers. A diagram of such
a web center is shown in Figure 3. The provider of
these portals is yet unclear. They could come from
neutral ASPs like electricity comes from neutral power
providers or they could come from industry-spon-
sored groups such as the RosettaNet in the electron-
ics industry and the AIGA in the automobile industry.
Figure 3.
There are four types of e-marketplaces:
1) Private e-marketplaces: They represent a “one
to many” marketplace. It can be one buyer to many
suppliers or one supplier to many buyers.
2) Public e-marketplaces: They are also known as
neutral marketplaces where no particular supplier
or buyer owns or control the market.
3) Vertical e-marketplaces: They focus on the
needs of a particular industry such as automotive
e-marketplace.
4) Horizontal e-marketplaces: They focus on spe-
cific business processes such as logistics, procure-
ment.
Business, Education and Technology Journal Fall 2000
12
Conclusions on Services and Providers
Research:
The role of the LSP in the in this new marketplace is
different, requiring them to make a strategy decision.
The LSP could continue to be a core provider of glo-
bal logistics and supply chain services. There will cer-
tainly be a high demand for excellent logistics
operations to provide for JIT and make-to-order tac-
tics in e-fulfillment; however, this may leave them in
a small competitive space, surrounded by larger, more
advanced providers. Ryder Integrated Logistics ap-
pears to be following this strategy. The counter to this
is a more aggressive strategy to expand into other ser-
vice areas to provide 4PL, hosted exchanges, and con-
su ltin g. This cou ld be accom plished throu gh
partnerships and possible mergers. Federal Express
appears to be following this strategy.
The relationship with the new 4PLs will be inter-
esting, as they could become a valuable partner or a
dreaded competitor. The 4PLs offer advanced infor-
mation and connection services that are beyond the
investment capability for all but the richest LSP. Its
has been compared to the same love-hate relation-
ship that airlines have with travel agents and railroads
with intermodal marketing companies. The 4PLs can
deliver business to the LSP or suction it away. This
creates the primary strategy decision for the LSP—to
4PL or not. If they don’t, others will move into that
space and they could be removed one level from their
customers. If they do, it will require huge investments
of their talent and funds that might not produce the
desired returns. This is probably the key strategy that
UPS Chairman Kelly was referring to as the last com-
petitive factor for the LSP industry. Only the strong
and the clever are likely to survive the e-business wave.
The breaking of the new wave of electronic busi-
ness technology over the LSP industry will be very
interesting in the coming year. The end state seems
clear that advanced operations management will be
performed through portals that connect all the ser-
vices required to provide world class support includ-
ing ERP, supply chain applications, connections to
every industrial supplier, fulfillment operations, and
consulting. What is not clear is who the systems pro-
viders will be to provide these services and how they
will be able to produce profit zones by providing these
new customer solutions.
III. Findings on the Landed Cost
Calculator Research
With the increasing traffic of commercial transactions
performed over the Internet, customers are wonder-
 T he Evolving Role of Logistics Service Providers (LSP) in Business-to-Business (B2B) Order Fulfillment, Dr. Richard L. Dawe, Ph.D., et.al.
ing if this way of doing business is really bringing them
savings and increasing their efficiencies. Customers
not only want to know the final cost figure for the
entire transaction, but also the individual cost figures
of each element such as shipping costs, insurance
costs, brokerage costs, and other costs that compiles
into the costs of doing business.
As a step towards fulfilling that need, Ryder Inte-
grated Logistics (RIL) designated our team to develop
a pilot landed cost calculator model. The model will
provide customers with a detailed breakdown struc-
ture of the involved true costs in a B2B transaction.
Hypothetical data will be input into the landed cost
calculator model and put to the test in various differ-
ent scenarios. The outcome will be the percentage
impact rate of materials costs and logistics costs on
the total landed cost.
Who Has It?
Calculating in the total landed cost is an important
component in any B2B transaction. E-procurement
systems companies such as Ariba, Commerce One,
and others are expected to provide this functionality.
This will allow electronic exchange to provide cus-
tomers with accurate costs information; therefore,
customers can know their true landed costs for the
specific transaction.
Many B2B exchanges, Logistics Service Providers
(LSPs), transportation exchanges, and freight forward-
ing sites have claimed to already possess this func-
tionality. Customers just need to key-in the necessary
information on the forms, click and submit, and the
costs for the transaction are broken down and dis-
played on the screen. Some of the distinctive Internet
sites that offer landed cost calculation functionality
are the following:
• Ariba Marketplace http://www.ariba.com/
• Commerce One Marketplace
http://www.commerceone.com/
• ClearCross (Application Service Provider)
http://www.syntra.com/
• From2.com (Application Service Provider)
http://www.from2.com/
• Vastera Inc (Application Service Provider)
http://www.vastera.com/
• FedEx http://www.fedex.com/
• UPS http://www.ups.com/
• Logistics.com http://www.logistics.com/
• nPassage http://www.npassage.com/
Business, Education and Technology Journal Fall 2000
13
How Is It Being Used?
A recent study shows that 54 percent of e-commerce
merchants decline to sell their products abroad be-
cause of the logistics and added costs involved.7 The
need for a calculation tool was eminent. Companies
such as ClearCross, Vastera, From2.com and others
have decided to develop their own landed cost calcu-
lator. They have claimed themselves as the best of
breed in this capability. After further analysis, our team
decided that the following are worth mentioning.
Example #1: ClearCross, formerly Syntra Technolo-
gies, has incorporated a landed calculator piece to
its suite of solutions. Using ClearCross’ Landed
Cost Engine (LCE), businesses can achieve global
success through the calculation and management
of all of the costs impacting the movement of ship-
ments across international borders. The ClearCross
LCE calculates the tariffs, duties, and other addi-
tive charges associated with international ship-
ments in real time on a transaction-by-transaction
basis. Furthermore, the ClearCross LCE can be in-
tegrated with e-Commerce and legacy applications
as well as customer-facing systems. It is now part
of Ariba’s Commercial Services platform.
Example #2: Vastera Incorporated’s TradeSphere
B2B Solutions includes a landed cost calculator
piece within their executional solution suite. Once
it is linked to internal as well as external informa-
tion systems, it is able to utilize global trade data,
product information, value of goods, inventory
carrying rate, HS codes, demand, country of ori-
gin, departure and destination and transportation
mode to derive the transaction’s total landed cost.
Example #3: From2.com’s new “Global Delivered
Cost Calculator.” The GDC Calculator, which links
directly from From2.com to the merchant’s Web
site, is available free of charge. The service classi-
fies products by description, value, package dimen-
sions and weight, then calculates shipping and
customs charges based on that information.
From2.com also offers international shipping ser-
vices through an international logistics conglom-
erate. From2.com guarantees the quote if the
merchant uses From2.com’s shipping services and
offers air or ocean transport. The company also
promises to know and follow all importation laws
in the country to which the goods are shipped, free-
in g the m erchan t from that respon sibility.
From2.com also monitors a merchant’s sales by
product and country and maintains sales tax ex-
emption records. The service is available to Internet
merchants, traditional stores and catalog compa-
 T he Evolving Role of Logistics Service Providers (LSP) in Business-to-Business (B2B) Order Fulfillment, Dr. Richard L. Dawe, Ph.D., et.al.
nies. For consumers, the service makes it much
easier to track their orders through onine track-
ing, but also estimated shipping times from vari-
ous destinations and scheduling services for
pickups and drop-offs.
Conclusions on Landed Cost Calculator
Research:
In a press release on January 26, 2000, GartnerGroup,
Inc. forecasts worldwide Business-to-Business (B2B)
E-Commerce to reach $7.29 trillion by 2004. By then,
B2B e-commerce will represent 7% of the forecasted
$105 trillion total global sales transactions.8 The rea-
son for the exponential growth in B2B e-commerce is
due to decline in the cost of doing business and the
breakdown of global trade barriers.
The future explosion in global trade establishes a
critical need for landed cost information to facilitate
the procurement decision making of participating
businesses. Even today, four years before 2004, landed
cost calculator is making major inroads in B2B e-com-
merce. Companies ranging from e-market makers to
multinational companies in other industries are sub-
scribing to landed cost calculator services offered by
service providers mentioned earlier in this paper.
The landed cost calculator provides subscribers the
opportunity to perform real-time what-if analysis to
simulate the final landed cost by varying the source
of supply (thus, different duties and tariffs structure)
before committing to the purchase. For example, the
project manager in a construction project will know
the profit contribution of his project before he even
procures his materials. Another value adding prop-
erty of landed cost calculator is the ability of the buy-
ing organization to optimally plan its cash flow
requirements to meet is accounts payable obligations.
The future value of landed cost calculator is high and
it is a critical facilitator to global B2B e-commerce.
Summary and Continuing Research
It is evident from this preliminary research that evolv-
ing e-business technology is going to have a signifi-
cant impact on the LSP industry both in their strategic
Business, Education and Technology Journal Fall 2000
14
market position and in the sophistication of the tools
they utilize to service their customers. The strategy
choices are to emphasize operations services, infor-
mation services, or both. Only a selected few will sur-
vive this strategy change and the rest will be merged
or cease to exist. E-business tools, like the Landed Cost
Calculator, will proliferate and increase in complex-
ity as customers demand more and better service. The
Landed Cost Calculator is an initial step towards glo-
bal operations optimization that will probably be pro-
vided by service portals that will control every aspect
of complex international order fulfillment.
Planned or on-going research projects at the e-
Operations Center include the following:
1. document technology that is available and fea-
sible for e-fulfillment applications
2. document commonly applied technology, pro-
cess, and organization in LSPs that are attempting
to improve their competency
3. recommend LSP competency improvement
based on the measurement of the value created
through previous applications
4. develop a prototype landed cost calculator
model.
Endnotes
1
“Full Speed on the Electronic Highway, Logistics Management
& Distribution Report,” Cahners Publishing, April 2000.
2
“eCommerce Evolves Into Real-time, Resilient eBusiness Net-
works, According to Forrester Research,” Press Release, April
25, 2000.
3
“AMR Research Predicts that B2B E-commerce Will Reach $5.7
Trillion by 2004.”
4
“EMarketplaces Will Lead US Business eCommerce to $2.7 Tril-
lion in 2004, According to Forrester,” Press Release, February 7,
2000.
5
“AMR Outlook: Internet Retailing is Here to Stay.”
6
“i2 Teams with Capstan Adding Global Capabilities to
FreightMatrix™ Logistics E-Marketplace,” April 17, 2000.
7
Mary Hillebrand “From2.com Gives International e-Commerce
a Hand” E-Commerce Times, July 9, 1999.
8
GartnerGroup, Inc., “GartnerGroup Forecasts Worldwide Busi-
ness-to-Business E-Commerce to Reach $7.29 Trillion in 2004,"
Press Release, Jan 26, 2000.
 Internet Commerce in the 21 st Century
David T. Lang and Thresa B. Lang

Abstract
With an estimated 67,000 new users every day, the Internet is rapidly becoming the primary enabler for consumers,
corporations and academia to directly access commerce and education. Direct, electronic, business to consumer,
Business-to-Business and Consumer-to-Consumer Internet links will overtake many avenues of traditional com-
merce in the 21st century. As the network becomes the computer, the enterprise itself will become the network and the
Internet will become the global conduit of commerce and education.
occur in a matter of seconds, be perpetrated from al-
The Business World of the 21st most any location on the planet, have no witnesses,
Century leave few clues and go undetected for days or even
weeks. Just as the storekeeper of the 20th century pro-
A fiber the size of a human hair can deliver ev- tected his property and profits with locks, cameras
ery issue made of the Wall Street Journal in less and alarms, the storekeeper of the 21st century must
than a second. Transmitting data at that speed, protect her assets with good network security, data
a fiber can deliver a million channels of televi- encryption and procedures in order to positively iden-
sion concurrently, roughly two hundred thou- tify those entering and exiting her establishment.
sand times faster than twisted pair…and mind
you, I am talking of a single fiber, so if you want
more, you just make more. It is, after all, just Digital Money Architectures and
sand. 21st Century Business
(Nicholas Negroponte, Being Digital, 1995)
In 1997, there were fewer than a dozen major vendors
of digital money; today, there are over 100 digital cash
Today, there are over 80 million Internet users in solutions for the Internet alone (see Appendix 1). The
North America alone, and 60 percent of all global
major vendors of digital money architectures offer a
companies have access to the Internet. This booming
variety of services, from electronic bill paying and
electronic marketplace is growing by an estimated
credit card purchases to digital cash designed to en-
67,000 Internet users a day and is estimated to exceed
able Internet commerce.
$327 billion in annual sales by 2002 (Fellenstein &
In the 20th century, starting a business required
Wood, 2000). Data is moving across this global net- months or even years of planning, negotiating and
work at amazing speeds and for many diverse pur-
funding. In the 21st century, starting a business re-
poses. This marketplace could not have developed a
quires access to the Internet and a significant bank
decade ago, or have been successfully instituted even
account. Internet commerce sites like E-Bay (http://
2-3 of years ago. The birth and growth of electronic
www.ebay.com) now conduct thousands of sales a day
commerce has been dependent upon the convergence
using a combination of secure Internet protocols, e-
of technological advances that have occurred within mail and digital cash. Moreover, the sales are not just
the last ten years.
Business-to-Consumer; many are Consumer-to-Con-
Today, anyone with a bank account can go to a lo-
sumer, with transactions (and profits) totaling hun-
cal public library, get on the Internet and be buying
dreds of thousands of dollars.
and selling almost anything in minutes, using digital
How can the consumer or business be ensured that
cash or some other form on online transaction. In the
both money and sensitive information remain secure
21st century, network access and secure electronic in these transactions? News of hackers and security
transaction protocols will be as vital to commerce as
breaches are common. In fact, security is a primary
transportation systems and armored cars were in the
concern for many individuals and businesses, one that
20th century.
keeps them from entering the world of online com-
Unfortunately, like their 20th century counterparts,
merce. Fortunately, advances of the last several years
the engines of 21st century commerce will also be the
are making “security” more than a word. The tools
targets of hijacking and robbery. The main difference that are discussed here are making the online envi-
will be that the robberies of the 21st century may well
ronment a much safer place to do business.

Business, Education and Technology Journal Fall 2000

15
 Internet Commerce in the 21st Century, David T. Lang and T hresa B. Lang
Security, Cryptography and Digital
Cash
Cryptography has been used for centuries to protect
sensitive information as it is transmitted from one
location to another. In a what is called a public key
cryptographic system, a message is encrypted using a
public key, and the resulting ciphertext is transmitted
to the recipient where it is decrypted using a private
key to produce the original message.
When two users want to exchange messages se-
curely, each of them transmits one component of their
key pair (the public key) to the other and keeps the
other component (the private key) secret. Because
messages encrypted with the public key can only be
decrypted using the private key, these messages can
be transmitted over an insecure network without fear
that an eavesdropper can read the messages.
As little as three years ago, using cryptography in
Internet communications was arcane and cumber-
some. As a result, many users simply did not even con-
sider exchanging private economic information such
as credit card numbers or bank account information
over the Internet. However, new Web browsers and
secure Internet protocols have now made the intrica-
cies of secure electronic commerce almost transpar-
ent to both business and consumers.
Secure Sockets Layer (SSL)
Secure Sockets Layer (SSL) is a protocol developed by
Netscape Communications Corporation that is built
into both the Netscape and Microsoft Web browsers,
and can be used to protect the communication of any
application protocol that normally operates over
Internet Transmission Control Protocol (TCP) (Ford
& Baum, 1997). Using an exchange of cryptographic
keys, the SSL protocol allows for authentication of the
Internet server to verify the authenticity of the e-com-
merce merchant, and it can also be configured to verify
the authenticity of the client (customer). The SSL pro-
tocol then conducts an integrity check of all trans-
mitted data to ensure that information was not
modified during the transfer. Finally, SSL uses encryp-
tion to guard against the disclosure of personal infor-
mation such as credit card numbers or bank account
information, should an eavesdropper intercept the
data stream during the transaction.
Secure Hypertext Transfer Protocol (S-
HTTP)
Enterprise Integration Technologies designed secure
Hypertext Transfer Protocol (S-HTTP) with the spe-
Business, Education and Technology Journal Fall 2000
16
cific goal of supporting electronic commerce. Secure
Hypertext Transfer Protocol provides the same secu-
rity services as SSL with the added option of digital
signatures. In this way S-HTTP can not only provide
a secure transaction, it can also provide the additional
service of non-repudiation (Ford & Baum, 1997).
Security Challenges for Internet
Commerce
The history of the computer criminal has shown us
one thing that can’t be disputed: no matter how se-
cure a system is, someone will defeat the security. The
computers of corporate America, the U.S. Military,
and even the U.S. Intelligence Community are bro-
ken into almost daily. It has long been known that the
only reasonably secure computer is one that is insu-
lated from the outside world – any computer on a
network is vulnerable. So, how does corporate
America go on-line with databases and commerce
servers without being destroyed? Perhaps military
wisdom datin g back thou san ds of years m ay
help…know your enemy!
One enemy, in the case of Electronic Commerce, is
any malicious code that can compromise the security
of your Internet transaction. This code may be a Tro-
jan horse or Sniffer program that intercepts your pass-
word or account information, or it might be a virus
that damages your system. At best this enemy can re-
duce your confidence in the security of your personal
information on the Internet, and will certainly make
users think twice about Internet commerce.
However, a much worse consequence would be the
actual theft of your personal information, intellectual
property or funds. Considering that there are currently
almost 50,000 known programs in circulation that
pose a danger to your security, a good antivirus pro-
gram is the essential weapon against this enemy. When
selecting an antivirus program, look for one similar
to Norton Antivirus 2000, which will not only scan
files downloaded or transferred to your computer, but
incoming e-mail as well. Most such programs offer
the ability to constantly update themselves, so pro-
tection remains up to date as viruses evolve.
Another enemy that may attempt to invade your
electronic commerce environment is malicious active
Internet content camouflaged as normal ActiveX,
JavaScript or Visual Basic Script on a Web page or at-
tached to an e-mail. Although there are many ways to
battle this enemy (which include the aforementioned
antivirus programs), most users are best advised to
use the built-in security of their Web browsers. Ap-
plying the proper security settings on your Web
browser will allow you to be warned whenever active
 Internet Commerce in the 21st Century, David T. Lang and T hresa B. Lang
content is encountered, and will enable you to choose
whether or not to allow the code to run (Ghosh, 1998).
Conclusion
The business world of the 21st century will be increas-
ingly virtual and less physical. The concept of distance
will change as well; already, distance is being measured
in download time, not miles. Moreover, where you
live, who your are, and what you look like will be of
little consequence as long as you are networked, and
you and understand the environment and complexi-
ties of the digital marketplace. Security measures to
ensure the safety of data, information and transac-
tions will be a large part of implementing these suc-
cessful eCommerce/eBusiness relationships.
With connectivity and security in place, all you will
need to be successful in this global marketplace will
be a worthwhile product, Internet access—and a cre-
ative business plan.
Appendix 1
Digital Money Architectures Designed for the
Internet 1
ACH Datasoft allows online payment from a US bank
account using the automated clearing house (ACH)
bank network.
Achex allows money transfer between two US check-
ing accounts, using SSL to protect the request.
Anonymous Internet Mercantile Protocol (Academic
paper).
Automated Transaction Services provide real-time
credit card processing and electronic checking ser-
vices.
Authorizenet processes credit card and checking ac-
count transactions.
BankNet offer an electronic cheque system in Ster-
ling. In the future it will also incorporate the SET
protocols.
Beenz is an account-based Web loyalty points system,
often called a Web currency.
BidPay allows person-to-person payments, by accept-
ing a credit card payment from the payer, and send-
ing a money order to the payee.
BillPoint allows person-to-person payments from a
credit card. Originally targeted at eBay customers.
BizPay from Consygen.
Brand’s Cash: The Ph.D. work of Stefan Brands on
electronic cash payment mechanisms.
CashBox from Intertrader is a payment management
system which supports Internet loading and spend-
Business, Education and Technology Journal Fall 2000
17
ing of a variety of Internet payment types includ-
ing Mondex.
Checkfree provides payment and billing solutions.
Ching from Mediais, is an account based payment and
loyalty scheme, linked to a credit/debit card.
1ClickCharge is an account based micropayment
scheme for the Web, allowing charges to be made
with a single click.
Clickshare is a publishing system to track movements
and settle charges for digital transactions.
Common Electronic Purse Specifications (CEPS)
Credit Card Network have a credit card authoriza-
tion system using SSL.
CurrencyOne from ArticWeb is an SSL based credit
card solution. It is used in Bank of Ireland’s Clikpay
credit card payment system. ArticWeb also has a
voice authenticated payment system.
Cybank is a Web payment system, where purchases
are charged against funds held in a Cybank account.
CyberCash offer secure credit card transactions, and
electronic checks over the Internet. CyberCoin,
their micropayment solution, is no longer sup-
ported. Here is the initial protocol specification for
their credit card payment system. Plans were to
migrate to SET for credit card payments. Also avail-
able are an abstract from a CyberCash paper pre-
sented at INET’95.
Cybergold allows you to earn, and spend, money
online.
Cybermoola is a prepaid account system, which can
be funded with prepaid cards or a credit card.
CyberSource offer real-time credit card processing and
other electronic commerce services.
DataCash, based in the UK, provide secure credit card
authorization over SSL.
DebitNet
DigiGold
Digital Silk Road is a proposed payment system for
extremely low cost activities such as delivering and
routing packets.
Downtown Anywhere has a system using account
numbers, and personal payment passwords.
Ecash is a fully anonymous electronic cash system,
using Chaum’s blind signatures. Originally from
DigiCash (until Nov ’98), it was acquired by eCash
Technolgies in August, 1999.
eCharge Phone allows purchases to be charged to a
local telephone bill. eCharge also features an ac-
count based payment system.
eCheck Secure accepts check details over the Internet,
and clears them via the ACH network.
E-coin is a token-based micropayment system, which
uses a client wallet plugin. Free tokens are currently
available.
 Internet Commerce in the 21st Century, David T. Lang and T hresa B. Lang
eComm is an implementation of the SET protocol
with extensions for the French B0' banking smart
cards. There is a further extension to allow small
payments, which are aggregated as a single SET
transaction.
E-gold allows payments in gold (silver, platinum, or
palladium) to be made from customer to customer
using an account-based system.
Efficient Electronic Cash: New Notions and Tech-
niques, by Yiannis Tsiounis.
Electronic Funds Clearinghouse provide payment
transmission and intake conduits over the Internet.
Electronic Lottery Tickets as micropayments, pro-
posed by Ron Rivest.
E-lysium provides an account based payment scheme
and EBPP solutions.
eMoneyMail from Bank One, allows person to per-
son payments, using a credit card or checking ac-
count.
eScrip is electronic scrip (gift vouchers) for specific
merchants, sold as fundraising for schools.
First Bank of Internet (FBOI now defunct).
First Virtual Internet Payment System. (now defunct)
Flexible Internet Secure Transactions Based on Col-
laborative Domains. Appeared at the Security Pro-
tocol Workshop’97.
Flooz is a central account based payment system al-
lowing user-to-user payments.
FSTC Electronic Check Project
Fundamo is an account based mobile commerce ar-
chitecture which allows mobile users to make and
receive payments, initially over GSM.
Globe ID credit and debit card based payment sys-
tems.
HashCash is a token based postage scheme using par-
tial hash collisions.
iBill provides credit card and check processing.
iCanBuy allows parental control of online spending.
Parents fund a child’s online account using a credit
card and can specify where and how the funds may
be spent.
i-Escrow is a third party that holds a buyer’s money
in trust until a vendor delivers purchased goods.
iKP: A Family of Secure Payment Protocols from IBM,
and the full iKP paper
InterCoin is an on-line billing service, with a try-be-
fore-you-buy feature.
InternetCash is a prepaid card that is purchased from
a real-world store and spent on-line. A temporary
anonymous account is setup from the unique card
ID (which looks something like 3842 F932 J283
7832 PRXZ), and its value is decremented as pur-
chases (as small as 50 cents) are made on-line.
Internet Dollar
Business, Education and Technology Journal Fall 2000
18
IPAY draft from the IETF Payment Working Group.
(now defunct)
iPIN is an account based system, that aggregates pur-
chases and charges them monthly to your ISP bill.
iTransact provide credit card, check and EFT payment
processing.
iWinpak is a PGP credit card application for Windows.
Jalda is an account based system for making both
micropayments and macropayments from any IP
device. Using digital certs and SSL encryption it
was designed by Ericsson Hewlett Packard Tele-
communications.
The Java Electronic Commerce Framework (JECF) is
not an actual payment protocol, but will provide a
framework for other payment protocols including
SET, smart cards, micro-transactions, electronic
checks and other tokens-based schemes.
Kagi aggregates credit card payments on behalf of in-
dividual product vendors.
LETSystems (Local Exchange Trading System) and
community currencies.
Magex, backed by NatWest Bank, is an account based
payment system for encrypted content.
Magic Money description.
MBroker, from MoreMagic, provides user billing/pay-
ment transaction management for chargable net-
work services.
Micro Gateway, from Auric, is an account based
micropayment system.
Micro Payment Transfer Protocol (MPTP) from the
W3C Electronic Payments group. The W3C con-
tinue their work on micropayments by producing
a micropayments markup and micropayments API.
Millicent from Compaq (originally DEC) was de-
signed to support purchases costing less than a cent.
Millicent is now live in Japan since mid 1999. There
have been a few academic prototypes using
Millicent, namely MiniMark and Minstrel.
Mini-Pay is an open spec and protocol for “pay cent
per click” applications, from IBM.
Mojo Nation uses accounts and micropayments to
allow payment for use and provision of unused
online resources. Reputations are used as a means
of preventing double spending.
Mondex smart card based payment scheme.
MoneyZap from Western Union/First Data allows
person to person payments, to and from traditional
payment instruments.
Mon-e is an account based system which is funded
using a real-world prepaid card.
NetBill Electronic Commerce Project, and related
publications including a good introduction to
NetBill.
 Internet Commerce in the 21st Century, David T. Lang and T hresa B. Lang
NetCard is a hash-chain based micropayment scheme,
as part of the NetCard Project at Cambridge Uni-
versity.
NetCash,an introductory article and the NetCash
Home Page.
NetCheque.
NetChex, a debit card based scheme.
NetFare is a pre-paid information access card for
making small, aggregated, incremental payments
over the Internet for purchases of electronic deliv-
ery of information.
NetPay is a micropayment system based on PayWord,
which allows partially unspent chains to be trans-
ferred between vendors.
Netscape Communications sells Netsite Commerce
Server for conducting Internet commerce.
O-Card from Orbiscom uses a one-time credit card
number, which is linked to an original credit card,
per transaction. The merchant clears the number
through the credit card network in the usual man-
ner.
Online Check Systems allows checks to be accepted
online.
Open Market has a Web Payment Scheme.
PayCash the fully anonymous electronic cash system
from Russia.
Paylinx provide payment servers for credit card pro-
cessing.
PayMe, as presented at the 4th WWW Conference ,
Boston, Dec. 95 by Dave Lang.
Payme.com is a user-to-user central account based
system.
PayMyBills.com is an account based bill payment ser-
vice.
PayPal allows user to user payments, where the payer
uses a credit card to pay money into another user’s
account.
PayWord and MicroMint, two simple micropayment
schemes from R.L.Rivest and A.Shamir.
Pay2See is a plug-in payment application allowing
pay-per-view Web pages by using an account based
system.
PC Pay is a smart card based system for Internet pay-
ments and banking.
Pocket Pass is a prepaid account, usable for online
payments, user-to-user payments, and as a US
phone card.
Propay.com is a person-to-person account based pay-
ment that also allows credit-card payments to be
be accepted by users.
Proton is a stored value smart card scheme (e-purse),
originally issued in Belgium as an alternative to
physical cash. It is now being adapted for Internet
payments.
Business, Education and Technology Journal Fall 2000
19
QPass aggregates small purchases at multiple mer-
chants and charges against a credit card periodi-
cally.
QuickCommerce is a credit card and ACH check
clearing system.
RocketCash is an account based system, allowing
parental control of spending. The RocketCash
account can be funded using a check, money or-
der, or credit card.
SafeDebit is a debit card, encoded on a regular CD,
for use in the a PC CD-ROM drive for purchases
from participating merchant Web sites.
Secure-Bank.Com provides online transaction pro-
cessing solutions for credit cards and check drafts,
based on SSL.
SecureClick, from Cyota, uses a one-time transac-
tion number which is linked to a credit card ac-
count, and is cleared through the credit card
network as normal by a merchant.
Secure Electronic Transaction (SET) from Visa/
Mastercard. SETCo oversees issues relating to the
global deployment of SET. FreeSET is a free Java
implementation of a SET user wallet, with a
JavaCard component.
SecureTrans is a real-time credit card processing
system and electronic checking service, using SSL.
SmartAxis allows stored value held on smart cards
to be used over the Internet. Currently Proton
and Mondex cards are supported.
SNPP: (academic paper) A Simple Network Pay-
ment Protocol.
SubScrip a micropayment scheme for subscription
style applications on the Internet, from the Mon-
etar y Systems Engineering Group, Univ. of
Newcastle, Australia.
SureFire Commerce provides credit card transac-
tion processing services as part of its e-commerce
solutions.
SVP: A Flexible Micropayment Scheme. Appeared
in the proceedings of the Financial Cryptogra-
phy ’97 Conference.
Systemics Open Transactions (SOX) payments sys-
tem.
TeleVend allows payments for physical goods from
a mobile phone, charging the amount to a phone
bill or bank account.
TipJar Internet Treasury allows value to be trans-
ferred between TipJar accounts using the Web.
Tipster enables voluntary payment for digital con-
tent such as music. The actual payment method
used is negotiatable.
VirtualPay is an on-line bill payment system
WebCharge, from Anacom, offers real-time credit
card processing services based on SSL.
 Internet Commerce in the 21st Century, David T. Lang and T hresa B. Lang

WebFunds, a Java application that acts as a host and

platform for payment systems such as SOX, and
References
user features such as email payments. Fellenstein, C., & Wood, R. (2000). Exploring e-Commerce, Global
WebMoney transfer system is an account based sys- e-Business, and e-Societies. Upper Saddle River, NJ: Prentice Hall.
tem with some anonymity, allowing transfer be- Ford, W., & Baum, M. S. (1997). Secure Electronic Commerce. Up-
tween temporary accounts using wallet software. per Saddle River: Prentice Hall.
WiSP, from Trivnet, is a payment system that uses the Ghosh, A. K. (1998). e-Commerce Security. New York: John Wiley
& Sons.
existing relationship with an ISP, to allow third-
1 List courtesy of the Networks and Telecommunications Re-
party purchases to be billed by that ISP. search Group at http://ganges.cs.tcd.ie/mepeirce/Project/
WorldPay provides multi-currency credit/debit card oninternet.html.
and account based micropayment solutions.
X.com provides user to user payments based on a
checking account.
Yahoo! PayDirect will allow user-to-user payments, The Authors
provided by DotBank.com.
David T. Lang
Ziplock is a credit card payment system where cus-
Director, Forensics and Quick Reaction
tomers receive a key code to unlock the product
Veridian Information Solutions
only after it has been downloaded and their credit
dave_lang@tds.com
card authorized.
Security First Network Bank is an Internet Savings
Thresa B. Lang
Bank.
Manager, vSecure Professional Training Program
Veridian Information Solutions
thresa_lang@tds.com

Business, Education and Technology Journal Fall 2000

20
 Cross-Cultural Training and the Second Circle Model
Karen Eastwood, Ph.D. and Monika Renard, Ph.D.

Abstract
To succeed in a global economy, an effective manager must develop not only an understanding of business principles
and practices, but also the ability to successfully implement those practices. Inter-cultural interactions underlie the
operations of businesses and the successful governing of nations. Our ability or inability to grasp the nuances of
cultural meanings impacts strategic decisions that may lead to tremendous economic successes or have consequences
that may result in a loss of business, disastrous marketing efforts, and even international incidents that hamper
national interests.
Colleges of Business have a mandate to provide students with the skills and knowledge to lead organizations in a
very competitive environment. In preparing business students for careers in a global environment, universities have
attempted to internationalize the curriculum and provide students with opportunities for international travel, study
and internships. The Second Circle Model is a unique program that combines academic and business communities in
a synergistic relationship to foster international understanding and trade. The College of Business at Florida Gulf
Coast University originated the Second Circle Model and has developed successful international partnerships. These
partnerships have resulted in business-to-business agreements, and international experiences for both faculty and
students. The purpose of this paper is to explore the implementation of the Second Circle Model and its efficacy in
achieving some of the strategic goals of the College of Business. Also, the paper looks at a cross-cultural training
program that was used with a group of student sojourners participating in a Second Circle exchange.

countered negative publicity and reactions when it

Introduction
To be an effective manager in today’s economy neces-
sitates not only an understanding of business prin-
ciples and practices, but also the ability to successfully
implement those principles in an ever-changing glo-
bal economy. Saner, Yiu, and Sondergaard (2000) re-
fer to the need for business diplomacy management
as a way of developing the competencies needed for
global effectiveness. Researchers, such as Hofstede
(1984) and Trompenaars (1993), have described dif-
ferent cultures in terms of the differing variables, di-
mensions and values that define each culture.
Understanding these differences assists managers as
they develop international business relationships, be-
cause they will be able to make sense of behaviors and
contextual messages that are different from their own.
Since all behaviors make sense in the eyes of the
“behaver,” it is necessary to understand the mindset
of those individuals, corporations or cultures with
whom we are doing business. Inter-cultural interac-
tions underlie the operations of businesses as well as
the successful governing of nations. When different
cultural interpretations are applied to the same situa-
tion, misunderstanding and intercultural collisions
often occur. We have seen the impact of cultural mis-
understandings in such diverse situations as the
manufacturing and marketing of Nike products, the
merger of Daimler-Chrysler, and the investigation of
the tragic crash of EgyptAir. As examples, Nike en-
developed new footwear with a logo that closely re-
sembled the Arabic name for God. It also was criti-
cized for its use of foreign manufacturing facilities that
disregarded environmental pollution and/or em-
ployed child labor. When EgyptAir flight 990 crashed
in October 1999, the interpretation of evidence was
skewed by cultural understandings. The Daimler-
Chrysler merger has focused attention on the com-
plexity of simultaneously melding both international
cultures and organizational cultures. As more U.S.
companies engage in joint ventures overseas, estab-
lish multinational corporations, or simply buy, sell and
manufacture off-shore, they increase their necessity
to develop a cross-cultural perspective. Failure to do
so will result in more serious consequences than com-
mitting a few embarrassing faux pas. Our ability or
inability to grasp the nuances of cultural meanings
may result in a loss of business, disastrous marketing
efforts, or even international incidents that impact
national interests.
Cross-Cultural Interactions
There has been a rapid increase in intercultural inter-
actions among U.S. based corporations and their in-
ter n ation al part n ers, su ppliers an d m ar kets.
Frequently, the results of these interactions have been
very disappointing. Expatriate failure rates are esti-
m ated at between 20 to 40 percen t (Baker &

Business, Education and Technology Journal Fall 2000

21
 Cross-Cultural Training and the Second Circle Model, Karen Eastwood, Ph.D. and Monika Renard, Ph.D.
Ivancevich, 1971;Black & Mendenhall, 1990; Black,
Mendenhall & Oddou, 1991; Keally, 1996; Mendenhall
& Oddou, 1985; Tung, 1987). Black & Mendenhall
(1990) reported that the costs attributed to such fail-
ures range from $50,000 to $150,000 per employee.
One suggestion to reverse these numbers and over-
come negative placements is to increase the cross-cul-
tural training that expatriates and sojourners receive
prior to departure as well as after arrival in the host
country. Research supports the effectiveness of cross-
cultural training (Bird, Osland, Mendenhall &
Schn eider, 1999; Black & Men den hall, 1990;
Deshpande, Joseph & Viswesvaran, 1994; Deshpande
& Viswesvaran, 1992; Goldstein & Smith, 1999;
Harrison, 1992; Mendenhall & Oddou, 1985; Ptak,
Cooper, & Brislin, 1995). Though it has also been sug-
gested that expatriate personality characteristics may
moderate the outcomes of various training progress
(Caligiuri, 2000/1). A successful American manager
in Atlanta or New York may not necessarily be suc-
cessful in China or Saudi Arabia because the organi-
zational behaviors that are taught in our business
schools and rewarded in our corporations are culture-
bound. For instance, the successful negotiating style
of an executive within the United States may produce
negative results internationally. Likewise, a theory of
motivation, or even a compensation program, that
works in the U.S. may need to be refined or adapted
for employees in another culture Consequently, re-
searchers and practitioners have attempted to develop
measurements and training programs to increase the
success rate of U.S. expatriates.
Many of these training programs are based on
Bandura’s social learning theory (1977) that stresses
the importance of practicing modeled behavior. Train-
ees observe and experience effective cross-cultural
interactions and then practice behaviors that will help
them succeed. They pay attention to the modeled be-
haviors and anticipate the consequences of imple-
menting these behaviors; they retain those behaviors
that will lead to future success in cross-cultural inter-
actions; and through practice, they reproduce the
learned behaviors. Gudykunst and Kim (1992) stated
that greater familiarity with the host culture leads to
lower levels of culture shock and a greater capacity to
adjust to the new culture. One way of achieving greater
familiarity with a host culture is to develop a multi-
level training program that incorporates both infor-
mation and skills: the theoretical and the experiential.
The Second Circle Model
Colleges of Business have a mandate to provide stu-
dents with the skills and knowledge to lead organiza-
Business, Education and Technology Journal Fall 2000
22
tions in a very competitive environment. In prepar-
ing business students for careers in a global environ-
ment, universities have attempted to internationalize
the curriculum and provide students with opportu-
nities for international travel, study and internships.
Florida Gulf Coast University (FGCU) began classes
in August 1997 as the tenth state university in the
Florida University System and the nation’s newest
public university. The College of Business established
its mission, objectives and strategies with input from
its stakeholders and an awareness of its strengths and
potential impact in the Southwest Florida region. A
significant strength of the region is its interest and
ties to international business. The College of Business
decided to take a distinctive approach when it devel-
oped a strategy for internationalizing its programs.
The objectives of this approach included providing
international opportunities for students, internation-
alizing faculty members, and encouraging global ac-
tivity among businesses in Southwest Florida and
businesses in other parts of the world.
FGCU’s College of Business designated this multi-
pronged approach to internationalization the Second
Circle Model. The Second Circle Model is a unique pro-
gram that combines academic and business commu-
n ities in a syn ergistic relation ship to foster
international understanding and trade. This program
goes beyond conventional approaches to internation-
alization by incorporating business-to-business and
community-to-community contacts in addition to the
more common academic exchanges. Similar to efforts
at other universities, FGCU’s College of Business has
initiated international partnerships by first reaching
out as a university to universities in other countries
through academic exchanges, i.e., the First Circle. The
College of Business then develops partnerships in
those countries by networking the business commu-
nities from each country, thus the Second Circle. The
vision is to use the College of Business international
academic activities to connect a circle of cultural and
business environments that surround the universities
in each country. This concept was presented before
the National Meeting of the AACSB where it was posi-
tively received, and has been given press recognition
for its innovation (Pegnetter, 1999).
Florida Gulf Coast University has identified two
significant and logical geographic areas for implemen-
tation of the Second Circle Model. Because of its loca-
tion in Southwest Florida, FGCU has identified
Mexico and Latin America as natural areas for the
development of trade and educational partnerships.
Interestingly, Germany offers a second natural part-
nership opportunity because of the large number of
German tourists who visit the region. Over the years,
 Cross-Cultural Training and the Second Circle Model, Karen Eastwood, Ph.D. and Monika Renard, Ph.D.
many of the German tourists have purchased vaca-
tion homes in the area and some have relocated their
businesses to Southwest Florida. Therefore, the two
international regions of Mexico and Germany were
the first to offer synergistic opportunities to initiate
the Second Circle.
The College of Business initiated its Second Circle
partnership with Mexico. Contacts that were devel-
oped at a U.S.-Mexico conference, and at a Southwest
Florida regional Hispanic Chamber of Commerce,
assisted in the early augmentation of agreements. Af-
ter thorough evaluations, and discussions that focused
on the opportunities for academic exchange and the
related connections of the Mexican and U.S. business
communities, two universities in Campeche, Mexico
were identified. Utilizing this same approach, the
College of Business established contact with German
universities. In this case, business executives at the
Southwest Florida International Airport connected
with the German business community to identify
possible university partners. This networking led an-
other German university to contact FGCU. The Dean
of the College of Business at FGCU then traveled to
Germany to develop the partnership opportunities
with the universities and business communities there.
The second circle has been successful in connecting
the educational, cultural and business partnerships
in German and Mexican communities. University
personnel and local business people on both sides of
the agreements have visited the other regions. Florida
Gulf Coast University co-hosted a Florida-Mexico
Trade Conference where a “sister region” agreement
was signed between Campeche’s equivalent of the
chamber of commerce and the Southwest Florida
Development Coalition. Through the College of Busi-
ness partnerships, the Southwest Regional Airport
opened discussions with several Mexican air carriers
regarding the development of cargo trade; a group of
Florida and Mexican developers are pursuing the pos-
sibility of a joint project for a retirement resort in
Mexico; and an exhibition of Mayan artifacts was
brought to Southwest Florida.
The second circle effort has furthered international
activity in Germany with partnership agreements that
led to visits from German university officials and busi-
ness delegations, and the signing of a “sister region”
economic agreement between the Saxony-Anhalt IHK
and the Southwest Florida Economic Development
Coalition (Pegnetter, 1999). The German Counsel
from Miami and the Saxony-Anhalt Minister of Tech-
nology and Industry were among the participants. A
visiting German professor conducted classes at FGCU
and an FGCU business professor spent the summer
teaching in Germany and connected via the Internet
Business, Education and Technology Journal Fall 2000
23
to present the course to students in Florida. Three
FGCU professors conducted global management cer-
tificate classes in Berlin and an agreement has been
signed to offer MBA distance learning classes in Ger-
many. Discussions and preliminary agreements to
implement the Second Circle Model with other coun-
tries (i.e., France, Sweden and Switzerland) are on
going. All of these efforts are a result of the Second
Circle Model and support the strategic international
mission of the College of Business.
A Training Model
To effectively implement the College of Business in-
ternational vision, it is necessary to prepare sojourn-
ers an d studen ts for cross-cultural t ravel an d
participation. Florida Gulf Coast University has in-
corporated the multi-level training approach into its
Second Circle Model. A required course in the MBA
program is designed, in part, to provide students with
a global perspective and to internalize an intercultural
set of values. This is achieved through the study of
international business from a cultural perspective.
Students are given culture-general as well as culture-
specific training that begins with an understanding
of personal and home country values. A study of cul-
tural variables, such as those presented by Hofstede
(1997 & 1984) and Trompenaars (1993) provides a
broad understanding of cultural differences to assist
in making sense of new environments. Students ex-
perience culture shock when they complete a cross-
cultural assignment that has them participate in a
situation where they are the minority (or the “only”)
in that environment. They develop an understanding
of the difficulties minorities have in the majority cul-
ture and sensitivity to values and behaviors other than
their own. Experiential exercises and role-playing pro-
vide cultural collisions that promote the understand-
ing that all behavior is rational in the eyes of the
“behaver.” Cross-cultural scenarios and critical inci-
dents (Brislin, Cushner, Cherrie & Yong, 1986; Ferraro,
1994) allow students to analyze cultural conflicts and
to apply their learned knowledge to suggest ways in
which the conflict could be prevented. Films, such as
Gandhi, Courage Under Fire, etc., stimulate discussions
that heighten cultural awareness while country-spe-
cific videos provide a degree of cultural familiarity
prior to entering another culture. This manifold ap-
proach incorporates both theoretical information and
skill development in the context of both culture-gen-
eral and culture-specific situations. Students are able
to incorporate the social learning theory steps by pay-
ing attention to modeled behavior, then retaining and
reproducing the learned behaviors. A final project has
 Cross-Cultural Training and the Second Circle Model, Karen Eastwood, Ph.D. and Monika Renard, Ph.D.
students choose a specific country/culture and then
they train the class to enter that country as expatri-
ates. The students research the historical, artistic, po-
litical, economic and religious background of the
country; the role of women in the country; the politi-
cal and economics risks of doing business there; le-
gal, ethical and environmental considerations; and a
basic preparation for reducing culture shock upon
entering the country. Students utilize PowerPoint pre-
sentations, skits, role-playing, language lessons, vid-
eos, food tasting and interviews as part of their
training sessions. All of the student groups develop a
homepage for their country/culture and include use-
ful links to other sites and information.
Last year, one group of Executive MBA students
had the opportunity of presenting a German training
seminar on a Friday and boarding a plane to Germany
on the following Sunday. They embodied the Second
Circle Model of the College of Business. These stu-
dents had completed the theoretical study of interna-
tional management and had been trained to develop
cultural awareness and sensitivity. They had studied
the German culture and various aspects of interact-
ing with German businesses. As part of the second
circle, they had met with a German professor from
one of the sister regions who was teaching at FGCU.
They had toured the U.S. headquarters of a German
company where they interviewed the president (a
German national) of that division in order to gain a
greater understanding of the German business envi-
ronment. This was a company headquartered in what
was formerly East Germany, and the students at-
tempted to understand the obstacles and opportuni-
ties the company faced in the transition to a market
economy. As sojourners in Berlin and eastern Ger-
many, the students felt well prepared to face the chal-
lenges of a different culture and embarked in Berlin
with great enthusiasm. They knew the cultural vari-
ables, the taboos, and what to expect upon arrival in
a more conservative culture. They quickly learned that
there are many individual differences within cultural
“norms.” Since these students were also business
people, they had a keen interest in extending the sec-
ond circle of businesses to businesses. The students
met with the IHK (the equivalent of our Chamber of
Commerce) and had discussions with entrepreneurs
in cutting-edge technology. Some months later, they
met some of these new colleagues back in Florida
when the Germans came to continue discussions on
business partnerships. The students toured the head-
quarters of the company they had visited in the U.S.
and talked to production employees in both coun-
tries, thus comparing working styles, conditions and
the role of unions and supervisory boards. FGCU stu-
Business, Education and Technology Journal Fall 2000
24
dents met with professors and students at one of our
partner universities and attended a lecture on the
European Union. It was useful to hear the dialog be-
tween German students and their professors and to
gain a better understanding of their perspective of
“Americans.” As Sanchez, Spector and Cooper (2000)
suggest, it was important for them to have on-site
experiences as well as pre-departure training. While
our student trainers did not have all of the cultural
nuances and expectations correct, they were very suc-
cessful in their cross-cultural and business interac-
tions.
Completing The Circle
Another course dealt with business opportunities in
China. Students prepared themselves with readings
on the historical, political and economic background
of China. They developed an awareness of cultural
expectations and the process necessary for a South-
west Florida business to engage in commerce with
China. These students then flew to China for an in-
country experience and first hand observations of the
business climate. Again, the group of students was able
to contribute to the second circle concept of expand-
ing cultural and business studies with a business-to-
business perspective. While in China, some of the
students decided to implement their newly acquired
knowledge by developing their own import business.
They negotiated distribution rights, purchasing prices,
and container shipments of goods from China to the
United States. They went on-line to register a domain
name and have established a new business in Florida.
Students in both of these in-country experiences dis-
covered that their multi-level course preparation had
equipped them with the skills and knowledge to ap-
preciate and interact in another culture. They had
developed a spirit of adventure, the ability to adapt,
and the courage to implement a business plan. By
developing a cultural awareness and sensitivity, they
were able to adapt and reconcile their observations.
In the words of Hughes-Wiener (1986, 485), they had
“learned how to learn.” Their eagerness and partici-
pation completed the circle.
Florida Gulf Coast University’s inauguration of the
Second Circle Model has more than met its strategic
objectives and continues to provide avenues of coop-
eration among faculty, students, and businesses in the
Southwest Florida region and their international part-
ners. The FGCU College of Business has a faculty that
is actively involved in the business community and
students who vigorously participate in the learning
experience. The College continues to foster links (or
circles) in the globalization of students, faculty, com-
 Cross-Cultural Training and the Second Circle Model, Karen Eastwood, Ph.D. and Monika Renard, Ph.D.
munities and businesses and has forged a successful
model to enact its international vision.
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 What is Behavioral Finance?
Victor Ricciardi and Helen K. Simon

Abstract
While conventional academic finance emphasizes theories such as modern portfolio theory and the efficient market
hypothesis, the emerging field of behavioral finance investigates the psychological and sociological issues that impact
the decision-making process of individuals, groups, and organizations. This paper will discuss some general prin-
ciples of behavioral finance including the following: overconfidence, financial cognitive dissonance, the theory of
regret, and prospect theory. In conclusion, the paper will provide strategies to assist individuals to resolve these “men-
tal mistakes and errors” by recommending some important investment strategies for those who invest in stocks and
mutual funds.

approach including scholars from the social sciences

Introduction
During the 1990s, a new field known as behavioral
finance began to emerge in many academic journals,
business publications, and even local newspapers. The
foundations of behavioral finance, however, can be
traced back over 150 years. Several original books
written in the 1800s and early 1900s marked the be-
ginning of the behavioral finance school. Originally
published in 1841, MacKay’s Extraordinary Popular
Delusions And The Madness Of Crowds presents a chro-
nological timeline of the various panics and schemes
throughout history. This work shows how group be-
havior applies to the financial markets of today. Le
Bon’s important work, The Crowd: A Study Of The
Popular Mind, discusses the role of “crowds ” (also
known as crowd psychology) and group behavior as
they apply to the fields of behavioral finance, social
psychology, sociology, and history. Selden’s 1912 book
Psychology Of The Stock Market was one of the first to
apply the field of psychology directly to the stock
market. This classic discusses the emotional and psy-
chological forces at work on investors and traders
in the financial markets. These three works along with
several others form the foundation of applying psy-
chology and sociology to the field of finance. Today,
there is an abundant supply of literature including
the phrases “psychology of investing” and “psychol-
ogy of finance” so it is evident that the search contin-
ues to find the proper balance of traditional finance,
behavioral finance, behavioral economics, psychology,
and sociology.
The uniqueness of behavioral finance is its inte-
gration and foundation of many different schools of
thought and fields. Scholars, theorists, and practitio-
ners of behavioral finance have backgrounds from a
wide range of disciplines. The foundation of behav-
ioral finance is an area based on an interdisciplinary
and business schools. From the liberal arts perspec-
tive, this includes the fields of psychology, sociology,
anthropology, economics and behavioral economics.
On the business administration side, this covers areas
such as management, marketing, finance, technology
and accounting.
This paper will provide a general overview of the
area of behavioral finance along with some major
themes and concepts. In addition, this paper will make
a preliminary attempt to assist individuals to answer
the following two questions:
How Can Investors Take Into Account the Biases
Inherent in the Rules of Thumb They Often Find
Themselves Using?
How Can Investors “know themselves better” so
They Can Develop Better Rules of Thumb?
In effect, the main purpose of these two questions
is to provide a starting point to assist investors to de-
velop their “own tools” (trading strategy and invest-
ment philosophy) by using the concepts of behavioral
finance.
What is Standard Finance?
Current accepted theories in academic finance are
referred to as standard or traditional finance. The
foundation of standard finance is associated with the
modern portfolio theory and the efficient market hy-
pothesis. In 1952, Harry Markowitz created modern
portfolio theory while a doctoral candidate at the
University of Chicago. Modern Portfolio Theory
(MPT) is a stock or portfolio’s expected return, stan-
dard deviation, and its correlation with the other
stocks or mutual funds held within the portfolio.
With these three concepts, an efficient portfolio can
be created for any group of stocks or bonds. An effi-
cient portfolio is a group of stocks that has the maxi-

Business, Education and Technology Journal Fall 2000

26
 W hat is Behavioral Finance?, Victor Ricciardi and Helen K. Simon
mum (highest) expected return given the amount of
risk assumed, or, on the contrary, contains the lowest
possible risk for a given expected return.
Another main theme in standard finance is known
as the Efficient Market Hypothesis (EMH). The effi-
cient market hypothesis states the premise that all in-
formation has already been reflected in a security’s
price or market value, and that the current price the
stock or bond is trading for today is its fair value. Since
stocks are considered to be at their fair value, propo-
nents argue that active traders or portfolio managers
cannot produce superior returns over time that beat
the market. Therefore, they believe investors should
just own the “entire market” rather attempting to “out-
perform the market.” This premise is supported by
the fact that the S&P 500 stock index beats the overall
market approximately 60% to 80% of the time. Even
with the preeminence and success of these theories,
behavioral finance has begun to emerge as an alter-
native to the theories of standard finance.
The Foundations of
Behavioral Finance
Discussions of behavioral finance appear within the
literature in various forms and viewpoints. Many
scholars and authors have given their own interpre-
tation and definition of the field. It is our belief that
the key to defining behavioral finance is to first es-
tablish strong definitions for psychology, sociology
and finance (please see the diagram located below).
Figure 1.
Figure 1 demonstrates the important interdiscipli-
nary relationships that integrate behavioral finance.
When studying concepts of behavioral finance, tradi-
tional finance is still the centerpiece; however, the be-
havioral aspects of psychology and sociology are
integral catalysts within this field of study. Therefore,
the person studying behavioral finance must have a
basic understanding of the concepts of psychology,
sociology, and finance (discussed in Figure 2) to be-
come acquainted with overall concepts of behavioral
finance.
Business, Education and Technology Journal Fall 2000
27
Defining the Various Disciplines of Behavioral Finance
Figure 2.
What is Behavioral Finance?
Behavioral finance attempts to explain and increase
understanding of the reasoning patterns of investors,
including the emotional processes involved and the
degree to which they influence the decision-making
process. Essentially, behavioral finance attempts to
explain the what, why, and how of finance and invest-
ing, from a human perspective. For instance, behav-
ioral finance studies financial markets as well as
providing explanations to many stock market anoma-
lies (such as the January effect), speculative market
bubbles (the recent retail Internet stock craze of 1999),
and crashes (crash of 1929 and 1987). There has been
considerable debate over the real definition and va-
lidity of behavioral finance since the field itself is still
developing and refining itself. This evolutionary pro-
cess continues to occur because many scholars have
such a diverse and wide range of academic and pro-
fessional specialties. Lastly, behavioral finance stud-
ies the psychological and sociological factors that
influence the financial decision making process of
individuals, groups, and entities as illustrated below.
The Behavioral Finance Decision Makers
Figure 3.
In reviewing the literature written on behavioral
finance, our search revealed many different interpre-
tations and meanings of the term. The selection pro-
cess for discussing the specific viewpoints and
definitions of behavioral finance is based on the pro-
fessional background of the scholar. The discussion
within this paper was taken from academic scholars
from the behavioral finance school as well as from
investment professionals.
 W hat is Behavioral Finance?, Victor Ricciardi and Helen K. Simon
Behavioral Finance and
Academic Scholars
Two leading professors from Santa Clara University,
Meir Statman and Hersh Shefrin, have conducted re-
search in the area of behavioral finance. Statman
(1995) wrote an extensive comparison between the
emerging discipline behavioral finance vs. the old
school thoughts of “standard finance.” According to
Statman, behavior and psychology influence indi-
vidual investors and portfolio managers regarding the
financial decision making process in terms of risk as-
sessment (i.e. the process of establishing information
regarding suitable levels of a risk) and the issues of
framing (i.e. the way investors process information
and make decisions depending how its presented).
Shefrin (2000) describes behavioral finance as the
interaction of psychology with the financial actions
and performance of “practitioners” (all types/catego-
ries of investors). He recommends that these inves-
tors should be aware of their own “investment
mistakes” as well the “errors of judgment” of their
counterparts. Shefrin states, “One investor’s mistakes
can become another investor’s profits” (2000, p. 4).
Furthermore, Barber and Odean (1999, p. 41) stated
that “people systemically depart from optimal judg-
ment and decision making. Behavioral finance en-
riches economic understanding by incorporating
these aspects of human nature into financial mod-
els.” Robert Olsen (1998) describes the “new para-
digm” or school of thought known as an attempt to
comprehend and forecast systematic behavior in or-
der for investors to make more accurate and correct
investment decisions. He further makes the point that
no cohesive theory of behavioral finance yet exists,
but he notes that researchers have developed many
sub-theories and themes of behavioral finance.
Viewpoints from the
Investment Managers
An interesting phenomenon has begun to occur with
greater frequency in which professional portfolio
managers are applying the lessons of behavioral fi-
nance by developing behaviorally-centered trading
strategies and mutual funds. For example, the port-
folio manager for Undiscovered Managers, Inc.,
Russell Fuller, actually manages three behavioral fi-
nance mutual funds: Behavioral Growth Fund, Be-
havioral Value Fund, and Behavioral Long/Short
Fund). Fuller (1998) describes his viewpoint of be-
havioral finance by noting his belief that people sys-
tematically make mental errors and misjudgments
Business, Education and Technology Journal Fall 2000
28
when they invest their money. As a portfolio man-
ager or as an individual investor, recognizing the men-
tal mistakes of others (a mis-priced security such as a
stock or bond) may present an opportunity to make
a superior investment return (chance to arbitrage).
Arnold Wood of Martingale Asset Management
described behavioral finance this way:
Evidence is prolific that money managers rarely
live up to expectations. In the search for reasons,
academics and practitioners alike are turning to
behavioral finance for clues. It is the study of
us…. After all, we are human, and we are not
always rational in the way equilibrium models
would like us to be. Rather we play games that
indulge self-interest…. Financial markets are a
real game. They are the arena of fear and greed.
Our apprehensions and aspirations are acted out
every day in the marketplace…. So, perhaps
prices are not always rational and efficiency may
be a textbook hoax. (Wood 1995, p. 1)
Now that you have been introduced to the general
definition and viewpoints of behavioral finance, we
will now discuss four themes of behavioral finance:
overconfidence, financial cognitive dissonance, regret
theory, and prospect theory.
What is Overconfidence?
Research scholars from the fields of psychology and
behavioral finance have studied the topic of overcon-
fidence. As human beings, we have a tendency to over-
estimate our own skills and predictions for success.
Mahajan (1992, p. 330) defines overconfidence as “an
overestimation of the probabilities for a set of events.
Operationally, it is reflected by comparing whether
the specific probability assigned is greater than the
portion that is correct for all assessments assigned that
given probability.” To illustrate:
The explosion of the space shuttle Challenger
should have not surprised anyone familiar with
the history of booster rockets— 1 failure in every
57 attempts. Yet less than a year before the disas-
ter, NASA set the chances of an accident at 1 in
100,000. That optimism is far from unusual: all
kinds of experts, from nuclear engineers to phy-
sicians to be overconfident. (Rubin, 1989, p. 11)
Academic research on overconfidence has been a
recurrent theme in psychology. Take for instance the
work in experimental psychology of Fishchhoff,
 W hat is Behavioral Finance?, Victor Ricciardi and Helen K. Simon
Slovic, and Lichtenstein (1977). This piece studied a
group of people by asking them general knowledge
questions. Each of the participants in study had to
respond to a set of standard questions in which the
answers were definitive. However, the subjects of the
study did not necessarily know the answers to the
questions. Along with each answer, a person was ex-
pected to assign a score or percentage of confidence
as to whether or not they thought their answer was
correct. The results of this study demonstrated a wide-
spread and consistent tendency of overconfidence. For
instance, people who gave incorrect answers to10 per-
cent of the questions (thus the individual should have
rated themselves at 90 percent) instead predicted with
100 percent degree of confidence their answers were
correct. In addition, for a sample of incorrect answers,
the participants rated the likelihood of their responses
bein g in cor rect at 1:1000, 1:10,000 an d even
1:1,000,000. The difference between the reliability of
the replies and the degree of overconfidence was con-
sistent throughout the study.
In both the areas of psychology and behavioral fi-
nance the subject matter of overconfidence contin-
ues to have a substantial presence. As investors, we
have an inherent ability of forgetting or failing to learn
from our past errors (known as financial cognitive
dissonance, which will be discussed in the next sec-
tion), such as a bad investment or financial decision.
This failure to learn from our past investment deci-
sions further adds to our overconfidence dilemma.
In the area of gender bias, the work of Barber and
Odean (2000) has produced very interesting findings.
The study of differences in trading habits according
to an investor’s gender covered 35,000 households over
six years. The study found that men were more over-
confident than women regarding their investing skills
and that men trade more frequently. As a result, males
not only sell their investments at the wrong time but
also experience higher trading costs than their female
counterparts. Females trade less (buy and hold their
securities), at the same time sustaining lower trans-
action costs. The study found that men trade 45 per-
cent more than women and, even more astounding,
single men trade 67 percent more than single women.
The trading costs reduced men’s net returns by 2.5
percent per year compared with 1.72 percent for
women. This difference in portfolio return over time
could result in women having greater net wealth be-
cause of the power of compounding interest over a
10 to 20 year time horizon (known as the time value
of money).
Business, Education and Technology Journal Fall 2000
29
What is “Financial Cognitive
Dissonance”?
The Theory: another important theme from the field
of behavioral finance is the theory of cognitive dis-
sonance. Festinger’s theory of cognitive dissonance
(Morton, 1993) states that people feel internal ten-
sion and anxiety when subjected to conflicting be-
liefs. As individuals, we attempt to reduce our inner
conflict (decrease our dissonance) in one of two
ways: 1) we change our past values, feelings, or opin-
ions, or, 2) we attempt to justify or rationalize our
choice. This theory may apply to investors or trad-
ers in the stock market who attempt to rationalize
contradictory behaviors, so that they seem to follow
naturally from personal values or viewpoints.
The work of Goetzmann and Peles (1997) exam-
ines the role of cognitive dissonance in mutual fund
investors. They argue that some individual investors
may experience dissonance during the mutual fund
investment process, specifically, the decision to buy,
sell, or hold. Other research has shown that investor
dollars are allocated more quickly to leading funds
(mutual funds with strong performance gains) than
outflows from lagging funds (mutual funds with
poor investment returns). Essentially, the investors
in the under-performing funds are reluctant to ad-
mit they made a “bad investment decision.” The
proper course of action would be to sell the under-
performer more quickly. However, investors choose
to hold on to these bad investments. By doing so,
they do not have to admit they made a investment
mistake.
An Example: In “financial cognitive dissonance,”
we change our investment styles or beliefs to sup-
port our financial decisions. For instance, recent in-
vestors who followed a traditional investment style
(fundamental analysts) by evaluating companies
using financial criteria such as profitability measures,
especially P/E ratios, started to change their invest-
ment beliefs. Many individual investors purchased
retail Internet companies such as IVillage.com and
the Globe.com in which these financial measures
could not be applied, since these companies had no
financial track record, very little revenues, and no
net losses. These traditional investors rationalized
the change in their investment style (past beliefs) in
two ways: the first argument by many investors is
the belief (argument) that we are now in a “new
economy” in which the traditional financial rules no
 W hat is Behavioral Finance?, Victor Ricciardi and Helen K. Simon
longer apply. This is usually the point in the economic
cycle in which the stock market reaches its peak. The
second action that displays cognitive dissonance is
ignoring traditional forms of investing, and buying
these Internet stocks simply based on price momen-
tum. Purchasing stocks based on price momentum
while ignoring basic economic principles of supply
and demand is known in the behavioral finance arena
as herd behavior. In essence, these Internet investors
contributed to the financial speculative bubble that
burst in March 2000 in Internet stocks, especially the
retail sector, which has declined dramatically from the
highs of 1999; many of these stocks have decreased
up to 70% off their all time highs.
What is the Theory of Regret?
Another prevalent theme in behavioral finance is “re-
gret theory.” The theory of regret states that an indi-
vidual evaluates his or her expected reactions to a
future event or situation (e.g. loss of $1,000 from sell-
ing the stock of IBM). Bell (1982) described regret as
the emotion caused by comparing a given outcome
or state of events with the state of a foregone choice.
For instance, “when choosing between an unfamiliar
brand and a familiar brand, a consumer might con-
sider the regret of finding that the unfamiliar brand
performs more poorly than the familiar brand and
thus be less likely to select the unfamiliar brand”
(Inman and McAlister, 1994, p. 423).
Regret theory can also be applied to the area of in-
vestor psychology within the stock market. Whether
an investor has contemplated purchasing a stock or
mutual fund which has declined or not, actually pur-
chasing the intended security will cause the investor
to experience an emotional reaction. Investors may
avoid selling stocks that have declined in value in or-
der to avoid the regret of having made a bad invest-
ment choice and the discomfort of reporting the loss.
In addition, the investor sometimes finds it easier to
purchase the “hot or popular stock of the week.” In
essence the investor is just following “the crowd.”
Therefore, the investor can rationalize his or her in-
vestment choice more easily if the stock or mutual
fund declines substantially in value. The investor can
reduce emotional reactions or feelings (lessen regret
or anxiety) since a group of individual investors also
lost money on the same bad investment.
Business, Education and Technology Journal Fall 2000
30
What is Prospect Theory?
Prospect theory deals with the idea that people do not
always behave rationally. This theory holds that there
are persistent biases motivated by psychological fac-
tors that influence people’s choices under conditions
of uncertainty. Prospect theory considers preferences
as a function of “decision weights,” and it assumes that
these weights do not always match with probabilities.
Specifically, prospect theory suggests that decision
weights tend to overweigh small probabilities and
under-weigh moderate and high probabilities. Hugh
Schwartz (1998, p. 82) articulates that “subjects (in-
vestors) tend to evaluate prospects or possible out-
comes in terms of gains and losses relative to some
reference point rather than the final states of wealth.”
To illustrate, consider an investment selection be-
tween
Option 1: A sure profit (gain) of $ 5,000 or
Option 2: An 80% possibility of gaining $7,000, with
a 20 percent chance of receiving nothing ($ 0).
Question: Which option would give you the best
chance to maximize your profits?
Most people (investors) select the first option,
which is essentially is a “sure gain or bet.” Two theo-
rists of prospect theory, Daniel Kahneman and Amos
Tversky (1979), found that most people become risk
averse when confronted with the expectation of a fi-
nancial gain. Therefore, investors choose Option 1
which is a sure gain of $5,000. Essentially, this appears
to be the rational choice if you believe there is a high
probability of loss. However, this is in fact the less at-
tractive selection. If investors selected Option 2, their
overall performance on a cumulative basis would be
a superior choice because there is a greater payoff of
$5,600. On an investment (portfolio) approach, the
result would be calculated by: ($7,000 x 80%) + (0 +
20%) = $5,600.
Prospect theory demonstrates that if investors are
faced with the possibility of losing money, they often
take on riskier decisions aimed at loss aversion
(though they may sometimes refrain from investing
altogether). They tend to reverse or substantially al-
ter their revealed disposition toward risk. Lastly, this
error in thinking relative to investing ultimately may
result in substantial losses within a portfolio of in-
vestments, such as an individual invested in a group
of mutual funds.
 W hat is Behavioral Finance?, Victor Ricciardi and Helen K. Simon
How Should Investors Take Into
Account the Biases Inherent in the
Rules of Thumb They Often Find
Themselves Using and How
Should They Develop Better Rules
of Thumb?
As investors, we are obviously influenced by various
behavioral and psychological factors. Individuals who
invest in stocks and mutual funds should implement
several safeguards that can help control mental errors
and psychological roadblocks. A key approach to con-
trolling these mental roadblocks is for all types of in-
vestors to implement a disciplined trading strategy.
In the case of stock investments: the best way for in-
vestors to control their “mental mistakes” is to focus
on a specific investment strategy over the long-term.
Investors should keep detailed records outlining such
matters as why a specific stock was purchased for their
portfolio. Also, investors should decide upon specific
criteria for making an investment decision to buy, sell,
or hold. For example, an investor should create an
investment checklist that discusses questions such as
these:
Why did an investor purchase the stock?
What is their investment time horizon?
What is the expected return from this investment one
year from now?
What if a year from now the stock has under-per-
formed or over-performed your expectations? Do
you plan on buying, selling, or holding your posi-
tion?
How risky is this stock within your overall portfolio?
The purpose of developing and maintaining an “in-
vestment record” is that over time it will assist an in-
vestor in evaluating investment decisions. With this
type of strategy, investors will have an easier time ad-
mitting their mental mistakes, and it will support them
in controlling their “emotional impulses.” Ultimately,
the way to avoid these mental mistakes is to trade less
and implement a simple “buy and hold” strategy. A
long-term buy and hold investment strategy usually
outperforms a short-term trading strategy with high
portfolio turnover. Year after year it has been docu-
mented that a passive investment strategy beats an
active investment philosophy approximately 60 to 80
percent of the time.
In the case of mutual fund investments: in terms of
mutual funds, it’s recommended that investors apply
Business, Education and Technology Journal Fall 2000
31
a similar “ checklist” for individual stocks. Tomic and
Ricciardi (2000) recommend that investors select mu-
tual funds with a simple “4-step process” which in-
cludes the following criteria:
Invest in only no-load mutual funds with low op-
erating expenses;
Look for funds with a strong historical track record
over 5 to 10 years;
Invest with tenured portfolio managers with a
strong investment philosophy; and
Understand the specific risk associated with each
mutual fund.
Essentially, these are good starting point criteria
for mutual fund investors. The key to successful in-
vesting is recognizing the type of investor you are
along with implementing a solid investment strategy.
Ultimately, for most investors, the best way to maxi-
mize their investment returns is to control their “men-
tal errors” with a long-term mutual fund philosophy.
In November 1999, there was a conference entitled
“Recent Advances in Behavioral Finance: A Critical
Analysis”(hosted by the Berkeley Program in Finance).
The conference featured a debate on the validity of
behavioral finance between advocates for the “tradi-
tional finance” and “behavioral finance“ schools of
thought. There was no clear winner in this contest;
however, having such an event demonstrates the
gradual acceptance of behavioral finance. Both schools
seemed to agree that the best trading strategy is a
“long-term buy and hold” investment in a passive
stock mutual fund such as S&P 500 index. For ex-
ample, Terrance Odean, a behavioral finance expert,
says in a recent interview that he invests primarily in
index funds. As a young man, Odean said, “I traded
too actively, traded too speculatively and clung to my
losses…. I violated all the advice I now give” (Feldman,
1999, p. 174).
Closing Remarks
Over the last forty years, standard finance has been
the dominant theory within the academic commu-
nity.
However, scholars and investment professionals
have started to investigate an alternative theory of fi-
nance known as behavioral finance. Behavioral fi-
nance makes an attempt to explain and improve
people’s awareness regarding the emotional factors
and psychological processes of individuals and enti-
ties that invest in financial markets. Behavioral finance
scholars and investment professionals are developing
an appreciation for the interdisciplinary research that
is the underlying foundation of this evolving disci-
pline. We believe that the behaviors described in this
 W hat is Behavioral Finance?, Victor Ricciardi and Helen K. Simon
paper are exhibited within the stock market by many
different types of individual investors, groups of in-
vestors, and entire organizations.
This paper has discussed four themes within the
arena of behavioral finance, which are overconfidence,
cognitive dissonance, regret theory, and prospect
theory. These four topics are an introductory repre-
sentation of the many different themes that have
started to occur over the last few years within the field
(see checklist of behavioral finance topics after this
section). The validity of all of these topics will be tested
over time as the behavioral finance scholars eventu-
ally research and implement concepts, or as other
practices start to fad or are rejected.
This article has also discussed some trading ap-
proaches for investors in stocks and bonds to assist
them in manifesting and controlling their psychologi-
cal roadblocks. These “rules of thumb” are a starting
point for investors that encourage them to keep an
investment track record and checklist regarding each
stock or mutual fund within their overall portfolio.
Hopefully, these behavioral finance-driven structured
guidelines for making investment choices will aid in-
dividuals by drawing attention to potential mental
mistakes, hopefully leading to increased investment
returns.
In closing, we believe that the real debate between
the two schools of finance should address which be-
havioral finance themes are relevant enough today to
be taught in the classroom and published in new edi-
tions of finance textbooks. A concept such as pros-
pect theory deserves mention by finance academics
and practitioners, to offer students, faculty, and in-
vestment professionals an alternative viewpoint of fi-
nance.
The Behavioral Finance Checklist
Anchoring
Financial Psychology
Cascades
Chaos Theory
Cognitive Bias
Cognitive Dissonance
Cognitive Errors
Contrarian Investing
Crashes
Fear
Greed
Herd Behavior
Framing
Hindsight Bias
Preferences
Fads
Business, Education and Technology Journal Fall 2000
32
Heuristics
Manias
Panics
Disposition Effect
Loss Aversion
Prospect Theory
Regret Theory
Groupthink Theory
Anomalies
Market Inefficiency
Behavioral Economics
Overreaction
Under-reaction
Overconfidence
Mental Accounting
Irrational Behavior
Economic Psychology
Risk Perception
Gender Bias
Irrational Exuberance
Glossary of Key Terms
Academic Finance (Standard or Traditional Finance):
the current accepted theory of finance at most col-
leges and universities, based on such topics as mod-
ern por tfolio theor y an d the efficien t m arket
hypothesis.
Anomaly or Anomalies: something that deviates from
the norm or common rule and is usually abnormal,
such as the January Effect.
Arbitrage: an attempt to enjoy a risk-less profit by
taking advantage of pricing differences in identical
securities being traded in different markets or in dif-
ferent forms as a result of mis-pricing of securities.
Behavioral Economics: the foundation of behavioral
finance, found especially in the groundbreaking work
of Richard Thaler. This field is the alternative to tra-
ditional economics since it applies psychology to eco-
nomics. Other examples of alternative economics are
economic psychology and socio-economics.
Behavioral Finance Theory: the belief that psycho-
logical considerations are an essential feature of the
security markets. It is a field that attempts to explain
and increase understanding of how the emotions and
mental mistakes of investors influence the decision-
making process.
Bias: an inclination of temperament or outlook; un-
reasoned judgment or prejudice.
Bubble: the phase before a market crash when con-
cerns are expressed that the stock market is overval-
ued or overly inflated from speculative behavior.
Cognitive Dissonance Theory: states there is a ten-
dency for people to search for regularity among their
 W hat is Behavioral Finance?, Victor Ricciardi and Helen K. Simon
cognitions (i.e., beliefs, viewpoints). When there is a
discrepancy between feelings or behaviors (disso-
nance), something must transform to eliminate the
dissonance.
Correlation: a concept from probability (statistics).
It is a measure of the degree to which two random
variables track one another, such as stock prices (stock
market) and interest rates (bond market).
Crash: a steep and abrupt drop in security market
prices.
Efficient Frontier: the line on a risk-reward graph rep-
resenting a set of all efficient portfolios that maxi-
mize expected return at each level of risk.
Efficient Market Hypothesis (EMH): the theory that
prices of securities fully reflect all available informa-
tion and that all market participants receive and act
on all relevant information as soon as it becomes avail-
able.
Efficient Portfolio: a portfolio that provides the great-
est expected return for a given level of risk.
Expected return: the return expected on a risky asset
based on a normal probability distribution for all the
possible rates of return.
Finance: a discipline concerned with determining
value and making decisions. The finance function al-
locates capital, including acquiring, investing, and
managing resources.
Herding or Herd Behavior: herding transpires when
a group of investors make investment decisions on a
specific piece of information while ignoring other
pertinent information such as news or financial re-
ports.
January Effect: the January effect is generally thought
to be among the most frequent of the stock market’s
anomalies. Investors each January expect above aver-
age gains for the month, which are most likely caused
by the result of a flood of new money (supply) from
retirement contributions, combined with optimism
for the New Year.
Loss Aversion: The idea that investors assign more
significance to losses than they assign to gains. Loss
aversion occurs when investors are less inclined to sell
stocks at a loss than they are to sell stocks that have
gained in value (even if expected returns are the iden-
tical).
Modern Portfolio Theory: An inclusive investment
approach that assumes that all investors are risk averse
and seeks to create an optimal portfolio in consider-
ation of the relationship between risk and reward as
measured by alpha, beta and R-squared.
Overconfidence: The findings that people usually have
too much confidence in the accuracy of their judg-
ments; people’s judgments are usually not as correct
as they think they are.
Business, Education and Technology Journal Fall 2000
33
Panics: Sudden, widespread fear of an economic of
market collapse, which usually leads to falling stock
prices.
Prospect Theory: can be defined as how investors as-
sess and calculate the chance of a profit or loss in com-
parison to the perceptible risk of the specific stock or
mutual fund.
Psychology: is the scientific study of behavior and
mental processes, along with how these processes are
affected by a human being’s physical, mental state, and
external environment.
Regret Theory: The theory of regret states that indi-
viduals evaluate their expected reactions to a future
event or situation
Sociology: is the systematic study of human social
behavior and groups. This field focuses primarily on
the influence of social relationships on people’s atti-
tudes and behavior.
Standard Deviation: within finance, this statistic is a
very important variable for assessing the risk of stocks,
bonds, and other types of financial securities.
Time Value of Money: is the process of calculating
the value of an asset in the past, present or future. It is
based on the notion that the original principal will
increase in value over time by interest. This means
that a dollar invested today is going to be worth more
tomorrow.
Acknowledgements
The authors would like to thank the following for their
insightful comments and support: Robert Fulkerth,
Steve Hawkey, Robert Olsen, Tom Powers, Hank
Pruden, Hugh Schwartz, Igor Tomic, and Mike
Troutman. An earlier version of this paper was pre-
sented by Victor Ricciardi at the “Annual Colloquium
on Research in Economic Psychology” July 2000 in
Vienna, Austria. The sponsors of this conference were
the International Association for Research in Eco-
nomic Psychology (IAREP) and The Society for the
Advancement of Behavioral Economics (SABE) in
affiliation with the University of Vienna.
References
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 W hat is Behavioral Finance?, Victor Ricciardi and Helen K. Simon
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with Certainty the Appropriateness of Extreme Confidence.”
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Business, Education and Technology Journal Fall 2000
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About the Authors
Victor Ricciardi is currently an adjunct faculty mem-
ber and doctoral student in finance at Golden Gate
University in San Francisco, California. Victor has
taught classes in finance, economics and behavioral
finance. His dissertation and research work is in the
field of behavioral finance. The topic of his thesis is a
study of how trustees of private universities make in-
vestment decisions regarding endowment funds, from
a behavioral finance perspective.
Victor received his MBA in Finance and advanced
masters in Economics from St. John’s University and
BBAs in Accounting and Management from Hofstra
University. Victor began his professional career as a
mutual fund accountant for the Dreyfus Corporation
and Alliance Capital Management. In addition, he has
been employed as an Economic Analyst at the Fed-
eral Deposit Insurance Corporation (FDIC). He also
has completed a yet unpublished book with Dr. Igor
Tomic of St. John’s University on the topic of mutual
fund investing.
Helen K. Simon, CFP is President of Personal Busi-
ness Management Services, LLC, located in Fort Lau-
derdale, Florida. Helen has resided in South Florida
since 1974 and has nearly 20 years of professional ex-
perience in the financial services and investment field.
She serves on the adjunct faculty of Florida State Uni-
versity and Nova Southeastern University where she
teaches classes in financial management, personal fi-
nance and financial planning. She received a BBA,
Magna Cum Laude, from Florida Metropolitan Uni-
versity, the CFP designation from The College for Fi-
nancial Planning, an MBA from Nova Southeastern
University and is currently pursuing a Doctorate of
Business Administration (DBA) with a concentration
in Finance. She also serves on the City of Oakland
Park, Florida Employee Pension Board.
 Integrated Marketing for the New Millennium
Steven Lesh, MPA, PT, SCS, ATC
Building the successful marketing strategy for the or-
ganization of the twenty-first century integrates his-
torical marketing principles and theories with recently
learned lessons from Internet based sales and promo-
tion avenues. The nature of marketing as a whole has
undergone several shifts in methodology related to
the marketing of products to the consumer. The ad-
vent of mass marketing that was notoriously exploited
via print and air wave based media, has yielded to a
strategy for creating individual marketing plans for
the individual consumer based in rapid communica-
tion exchanges. As the marketing strategy focuses on
the individual needs of the consumer, the organiza-
tions in the new millennium must tailor their prod-
ucts and services to meet the needs and expectations
of the electronic consumer.
The concept of integrated marketing is based on
the premise that the consumer is an individual with
unique needs and desires followed closely by the no-
tion that there is a need to present a consistent and
recognizable front or appearance to the consumer
(Janal, 1998; Silverstein, 1999). The purpose of this
paper is to analyze the elements of an integrated mar-
keting plan and synthesize strategies for a successful
marketing plan in the new millennium.
The constructs that serve as a foundation for an
integrated marketing approach include the following:
1) developing personal relationships with the con-
sumer,
2) utilizing the rapid exchange of communication to
promote interactivity,
3) encouraging a shared organizational vision (mis-
sion marketing), and
4) distributing message consistency.
As Daniel and Klimis (1999) have postulated re-
garding the nature of personalized marketing in the
era of rapid electronic communication exchange, the
end result from the evolution of Internet marketing
is the eventual establishment of a completely unbi-
ased market in which the consumer has total and com-
plete access to all suppliers regardless of time, location,
or space. Peterson et al (1997) believe that the impact
of consumer spending will not be increased because
of electronic spending through the Internet, but rather
redistributed. Organizations that provided services
Business, Education and Technology Journal Fall 2000
35
through more traditional marketing and supply
means may find that altered or accelerated commu-
nication avenues rearrange consumer spending pat-
terns.
Consumers will eventually have the ability to ac-
cess suppliers regardless of spatial and time issues. The
cyber-consumer will spend money in patterns asso-
ciated with the convenience of experiences and the
appropriateness of customer services. It is critical for
the organizations to appreciate this consumer driven
market and provide the opportunities to develop in-
dividual relationships with customers to meet their
needs, either perceived or real.
The Internet is serving as a foundation for new
subcultures by cultivating friendships, associations,
and small group interaction that previously were lim-
ited or unavailable because of physical distances
(Maignan & Likas, 1997). As the spatial limitations of
time and place are removed, the consumer has the
opportunity to purchase quality products or services
at the most efficient price. The organizations of the
twenty-first century have a unique window of oppor-
tunity for developing consumer-friendly processes for
accessing products and services. The organization that
does not provide avenues for participation that are
easily accessible may find that the consumer elects to
utilize other avenues that are more readily accommo-
dating. As the critical first element of the integrated
marketing plan, developing personal relationships
with the consumer is paramount.
The nature of interactivity granted by the rapid
exchange of information through the Internet pro-
vides perhaps the most unique and challenging as-
pect to marketing products and services. Consumers
who regularly exchange information on the Internet
are easily satisfied with quick, accurate, meaningful,
and personal responses. Conversely, one of the great-
est dissatisfaction producing agents are technologi-
cally inept, slow, or ineffective communications (Hara
& Kling, 2000; Muirhead, 2000). Koreta (1997) re-
ported that Web sites which focus on useful informa-
tion lead to immediate and measurable marketing
successes.
Organizations should then focus on marketing
communications that provide immediate, interactive,
and useful information to the consumer. Material that
seeks to persuade, entice, or trigger an emotional re-
 Integrated Marketing for the New Millennium, Steven Lesh, MPA , PT, SCS, AT C
sponse are frequently discarded by the electronic con-
sumer. Information develops and nurtures the pur-
chasing relationship, and accordingly, the information
should be directed at the consumer almost to a point
of urgency and conciseness that is demanded by the
rapid exchange of data over the Internet. Service and
product organizations must be able to provide timely
information to potential consumers in order to make
effective and appropriate purchase decisions (Driscoll
& Wicks, 1998).
A potential setback for the institutions providing
services or products through the information super
highway is the nature of the distortion of time. While
access to a marketed product is now feasible for the
entire globe, the interactivity and immediacy of the
information must still allow for the delay of sleeping
periods around the world. The ability to access static
information is possible every minute of the day; how-
ever, delays may become present for the organization
by the physical nature of waking business hours of
operation. For those organizations lacking the re-
sources to make this information-laden transition,
Piturro (1999) suggests a buddy system, that is, pro-
moting electronic partnerships that produce a more
effective consumer oriented product or service. Com-
mercial organizations may individually not have the
ability to provide a wide array of world wide services,
yet, if the collective services of the respective organi-
zations are pooled, a greater, more efficient service
may be offered to the end user.
As organizations are developing marketing strate-
gies that focus on building relationships by deliver-
ing fast, accurate, and interactive information, it is
imperative that the mission of the organization is re-
flected in the marketing approach. Mission market-
ing refers to the ability of the organization to reflect a
shared vision. Organizations should focus on formal
marketing principles to successfully integrate and pro-
mote the organizational objectives more efficiently
(Driscoll & Wicks, 1998). The mission of the organi-
zation is readily apparent in all of the marketing ma-
terials or products directed to the consumer. The
saliency of the message reflects positively upon the
consumer clearly identifying the intent and direction
of the organizations. Businesses that lack a clear fo-
cus run the risk of appearing disorganized or prevent-
ing product association by the consumer. The
organization, through its mission, hopes to reflect
organization values that are parallel to those of the
consumer. Disharmonious or incongruent values be-
tween the organization and the consumer may po-
tentially lead to conflict or dissonance (Janal, 1998;
Silverstein, 1999).
Business, Education and Technology Journal Fall 2000
36
As the organization develops and reflects a shared
vision, it must be promoted through a marketing
strategy of message consistency. The consumer devel-
ops associations with marketed products through fa-
miliar feelings and comfortableness. The marketing
strategy product should seek to produce consistency
when using logos, organizational colors, and commu-
nication typeface. The classic example of message con-
sistency is demonstrated through the images and
appearance of the children’s educational products pro-
duced by the Children’s Television Workshop (CTW).
Sesam e St reet Magazin e (ISSN 0049-0252),
www.sesamestreet.com, and Sesame Street educa-
tional toys all possess the common reproduction of
images directed by the mission of the parent organi-
zation. Through the consistency of the message, CTW
is able to market an integrated message of quality
children’s education through a variety of venues in-
cluding television, print media, educational games,
clothing, and the Internet. This marketing consistency
has produced significant consumer confidence in the
products that are produced. It should be noted, as
identified by Janal (1998), that message consistency
is not a new attribute of marketing developed by the
Internet, but becomes increasingly imperative as im-
ages and messages are more rapidly distributed.
Conrad (1999) believes that in order to remain
competitive and successful in the marketplace, orga-
nizations and consumers alike must realize techno-
logical change occuring online is now an advantage,
and the size of the organization does not have nearly
the impact it once did.
Organizations should strive to produce a consis-
tent marketing appearance through the images and
information that is describing the contents and ben-
efits of their products or services. As the consumer is
bombarded with information from numerous direc-
tions, the familiarity of an image will produce com-
fort and alleviate stress associated with identifying the
sincerity and authenticity of an Internet based prod-
uct (Janal, 1998; Silverstein, 1999).
Integrated within the general concepts of a success-
ful marketing approach for the academic organiza-
tion are specific strategies. Interestingly, as the Internet
grows, enlarges, and evolves, strategies are mostly
based upon trial and error efforts of professional
marketers.
Strategies that may be successful for a given prod-
uct cycle may not be effective in a brief period of time
due to changes in the nature of the technology. Herein
lies the conflict with providing exact strategies to pro-
mote effective marketing on the Internet. As of the
writing of this paper, techniques that center around
 Integrated Marketing for the New Millennium, Steven Lesh, MPA , PT, SCS, AT C
individualization, interactivity, and promoting a posi-
tive company image seem to be the most effective.
The following summarizes a list of suggested mar-
keting strategies that should be considered by orga-
nizations when promoting an integrated marketing
approach. The marketing approach should have the
following characteristics. It should
1. be interactive,
2. provide information (not persuasion) in dialogue
that is both formal and informal,
3. appreciate the long term value of a customer,
4. be customized or customer-“ized,”
5. build individual relationships (mass marketing is
dead),
6. recognize that organizational size no longer mat-
ters,
7. take advantage of being online,
8. adjust to time compression and distortion of the
Internet,
9. generate the interest of the consumer (free prod-
ucts often attract attention),
10. contribute to the community and build organi-
zational good will.
Conclusion
Care should be taken to continually analyze, update,
and revise these suggested strategies to accommodate
to new and developing technologies. An integrated
marketing approach is built upon existing historical
marketing principles, but is updated to include the
rapid exchange of information from technological
enhancements. As organizations continue to exchange
products and services with consumers, a careful fo-
cus on the trends, shifts, and alterations in spending
patterns and behaviors should be considered. Through
an integrated approach, the organization is able to
build individual relationships with the consumer and
to promote a consistent set of values that should pro-
mote the product or service accordingly.
References
Conrad, C. A. (1999). “The Emerging High-Tech Consumer: A
Market Profile and Marketing Strategy Implications.” Academy
of Marketing Science, 27, 378.
Business, Education and Technology Journal Fall 2000
37
Daniel, E. & Klimis, G. M. (1999). “The Impact of Electronic
Commerce on Market Structure: An Evaluation of the Elec-
tronic Market Hypothesis.” European Management Journal, 17,
318 - 325.
Driscoll, C. & Wicks, D. (1998). “The Customer-Driven Approach
in Business Education: A Possible Danger?” Journal of Educa-
tion for Business, 74, 58 - 61.
Hara, N. & Kling, R. (2000). “Students’ Distress with a Web-based
Distance Education Course.” Information, Communication &
Society, in press.
Janal, D. S. (1998). Online Marketing Handbook: How to Promote,
Advertise, and Sell Your Product and Services on the Internet.
New York, NY: Wiley and Sons.
Koreto, R. J. (1997). “A Practical Site Reaps Marketing Rewards.”
Journal of Accountancy, 183, 69 - 71.
Maignan, I., & Lukas, B. A. (1997). “The Nature and Social uses
of the Internet: A Qualitative Investigation.” Journal of Con-
sumer Affairs, 31, 346 - 371.
Muirhead, B. (2000). “Interactivity in a Graduate Distance Edu-
cation School.” Educational Technology & Society, 3(1), 93-96.
Peterson, R. A., Balasubramanian, S., & Bronnenberg, B. J. (1997).
“Exploring the Implications of the Internet for Consumer
Marketing.” Academy of Marketing Science, 25, 329 - 346.
Piturro, M. (1999). “Get Into e-Commerce Without Betting the
Store.” Journal of Accountancy, 187, 56 - 63.
Silverstein, B. (1999). “Business-to-Business Internet Marketing:
Five Proven Strategies for Increasing Profits Through Internet
Direct Marketing.” Gulf Breeze, FL: Maximum.
About the Author
Steven G. Lesh, MPA, PT, SCS, ATC has earned de-
grees from the University of Missouri-Columbia, Ar-
kansas State University and is currently completing a
Ph.D. in Organization and Management through
Capella University, Minneapolis, MN.
Mr. Lesh is recognized as a Board Certified Spe-
cialist in Sports Physical Therapy. He currently sits as
the acting chair of athletic training and is an assistant
professor of physical therapy on the graduate faculty
at Southwest Baptist University in Bolivar, Missouri.
Current research interests include the effectiveness of
learning and new instructional technologies in the
classroom. Mr. Lesh has written two textbooks, sev-
eral scholarly articles and has presented regionally,
nationally, and internationally on topics including
leadership, strategic planning, marketing, e-Com-
merce, and the effects of educational technology on
the learner.
 A Case Study of One Online MBA Program: Lessons from
the First Iteration of an Innovative Educational Experience
Lynne Schrum, Ph.D. and Angela Benson
Introduction
Online learning has evolved over the past four years
into a growing vehicle for providing adults with new
skills, updated information, and knowledge, often
through degree programs. With unemployment at its
lowest level in decades and talented individuals diffi-
cult to retain, organizations are expanding opportu-
nities for professional workers who wish to further
their education, especially as the workplace continu-
ally demands higher skill levels of its workers (Davis,
1999). This paper describes one collaborative effort
between a corporation and university to address this
conundrum.
Traditional education and older forms of distance
learning have presented difficulties (many busy pro-
fessionals travel extensively, and are not available on
a specific night each week). Many organizations and
universities have turned to newer technologies, elec-
t ron ic n etwor ks an d su ppor tin g software
(groupware), in order to provide the needed learn-
ing experiences. In 1998 a large financial corporation
joined with a large southeastern university College
of Business’s MBA program to create a hybrid dis-
tance learning and face-to-face program uniquely
suited to their executives’ needs to obtain an MBA
degree while continuing to work. The university and
corporation invested significantly in the design and
development of the program. Earlier research inves-
tigated the first year of this project from the perspec-
tives of the faculty, and administrative team (Schrum
& Benson, 2000). Now the first cohort of students
have almost finished their MBA and this research
completes the cycle by providing closure, identifying
lessons learned, and presenting conclusions to inform
others considering online professional educational
programs.
Lessons from Literature
Online learning has become a popular and perhaps
revolutionary method of education for traditional
and non-traditional individuals. The transition to this
online environment is not a trivial matter, and the
challenge is to understand the relationships between
Business, Education and Technology Journal Fall 2000
38
the user and the technology, the instructor and the
participants, and the relationships among the partici-
pants (Gibbs, 1998; Palloff & Pratt, 1999; Schrum,
1998).
Development of an online educational environ-
ment is not a trivial task. Faculty have had an espe-
cially difficult time changing the ways in which they
teach, regardless of their own personal use of elec-
tronic media (Candiotti & Clarke, 1998). In an elec-
tronic environment the role of faculty changes in
many ways, and in particular, they must give up some
control of the classroom environment (Schrum,
2000). They are forced to develop and design their
activities and interactions in new ways, and they may
be frustrated without the ability to recognize students’
furrowed brows (Schrum & Berge, 1998). Kember
(1995) urged designers to work toward deep learn-
ing, which requires moving away from excessive as-
signments, shallow assessments, and lack of freedom
in activities. These challenges go far beyond the need
to be comfortable with the reliance on technology to
support their courses (Schrum, 1998). Wiesenberg and
Hutton (1996) identified three major challenges for
the designer to consider: increased time for delivery
of the course (they estimate two or three times what
is necessary for a traditional course), difficulty of cre-
ating a community online, and encouraging students
to become independent learners. They also reported
fewer interactions than expected from participants of
an online course. These issues have implications for
the students.
Students have had enormous challenges in accom-
modating online learning opportunities. One gradu-
ate course demonstrated that even in the case of
having independent online lessons, it was useful to
add a component that required students to interact
with their colleagues in some way (Dehler & Poirras-
Hernandez, 1998). Eastmond (1995) found that stu-
dents report feelings of isolation if they don’t keep up
with the interactions, and must be taught to take per-
sonal responsibility for involving themselves. Simi-
larly, it is important to build in practice time for the
students to refine their evaluative and analytical skills
so that they can successfully use the enormous amount
of information on the Internet (King, 1998).
 A Case Study of One Online MBA Program, Lynne Schrum, Ph.D. and A ngela Benson
Theoretical Perspectives
This research completed an investigation of the evo-
lution and first two years of an ambitious program.
This study has built upon three theoretical frame-
works. First, Rogers (1995) described innovations and
their diffusion in relation to individuals, with respect
to two distinct areas. Specific to this project, first, the
individuals (students and faculty) had already ac-
cepted new ways of teaching and learning, or they
would not have entered this program. Rogers ex-
plained the theory of the “Cancian Dip” which states
that “innovativeness and socioeconomic status go to-
gether at the extremes; that is, individuals of highest
socioeconomic status are highly innovative” (p. 270).
This clearly is evident within the population under
study.
Second, an explanation of the consequences of
adoption relates to this study. Rogers (1995) lamented
that many who study innovations and adoption only
ask the question, “What variables are related to
innovativeness?” when they should be asking, “What
are the effects of adopting innovations?” (p. 409). This
line of inquiry is particularly important in light of
the changes and evolving nature of the students in
this study, who exhibited dramatic changes in their
relationship to learning, their work, and their col-
leagues.
One other theoretical framework informed this
study. Garrison and Shale (1990) looked carefully at
distance learning, and concluded that,
One of the things to be certain of is that the
quality of effectiveness of education at a distance
is directly attributable to the degree and kind of
interaction between teacher and student, as well
as between student and student. (p. 123)
The researchers paid particular attention to the
intended and unintended interactions between and
among students and the teacher during this study.
Although agreement exists regarding the need to in-
corporate interaction and communication, little is
known about the significance, essential conditions, or
impact on the individual. The nature of the commu-
nications, the feedback to the administration and to
the faculty, and the outcomes were thus of particular
importance. The study also considered the challenges
that this type of change represented for the students,
administrators, and the faculty (Candiotti & Clarke,
1998; Payne, 1998; Schlesinger, 1996; Watkins, 1996).
Significant energy was given toward understanding
the processes from the perspective of the students
Business, Education and Technology Journal Fall 2000
39
during their development over the two-year period.
Additionally, consideration was given to the evolu-
tionary nature of online environments.
Given these issues, and the changing nature of the
project, the questions that guided this study included
• How did the program evolve over the course of
the two years?
• What challenges did faculty identify in accom-
plishing the various tasks of teaching in this way? What
challenges and opportunities did students identify
learning in this new environment?
• What were the unanticipated and serendipitous
results of this combined face to face and online model?
Data Sources and Methods
A case study approach is an appropriate manner in
which to investigate evolving phenomena, particularly
for situations in which the participants’ understand-
ings of the processes are of primary importance. Par-
ticipants in this study included the students, the
corporate partner, the MBA program director, and the
online MBA faculty. Qualitative methods included
semi-structured interviews with select participants,
electronic and on-site observations, focus groups with
students and analysis of transcripts of electronic fac-
ulty and student discussions. The semi-structured
interviews were conducted using naturalistic inquiry.
Written (verbal and electronic) responses to queries
were also included for clarification.
The utilization of multiple methods was designed
to triangulate the research perspectives and increase
the understanding of the participants’ perspectives
and response to the activities (Lincoln & Guba, 1985;
Miles & Huberman, 1984; Patton, 1987). All inter-
views, individual and group, were audio recorded and
then transcribed. Data analysis included open coding
of all transcripts by the researchers individually, and
then together to compare and discuss the findings and
their meanings. As themes emerged from the data,
researchers constructed team case study reports, con-
tent analysis of the observations, interviews, and con-
struction of cross case an alysis m odels where
appropriate.
Background
Ten faculty members of the college of business were
invited to participate in the creation of an integrated,
multiple technology, combined format online MBA
program. The corporation, interested in providing
development opportunities for its employees, prom-
 A Case Study of One Online MBA Program, Lynne Schrum, Ph.D. and A ngela Benson
ised to fund and support its chosen participants, and
the planning began. The project was designed for a
cohort of 50 successful executives to complete the
MBA in an intense two-year format. Faculty would
work in teams to integrate assignments and plan
projects. Students would meet face to face with fac-
ulty for short and intense initial two-week and week-
end sessions, but all other work would be conducted
primarily through electronic communications using
company-provided laptops. Substantial resources
were devoted to a technological support team to as-
sist faculty, design materials, and support students.
The first semester of the program, October 1998
through January 1999, began with 46 students en-
rolled in five semester-long courses. After the initial
and intensive two-week face-to-face session on the
university campus, during which the students were
introduced to each other, their instructors, the
coursework, and the program’s distributed format, the
students returned to their busy lives as corporate con-
sultants assigned to various projects throughout the
United States and Canada. They met face-to-face with
the faculty and other participants for three days ev-
ery three months, and they continued their studies
through a variety of distance technologies centered
arou n d the cou rseware system , Lotu sNotes
LearningSpace. The data collection period ended in
March, 2000, as the cohort was entering the next to
final set of courses for their degree.
After the initial term of the program, many changes
were instituted. Students requested fewer classes taken
at one time; breaks were initiated between shortened
terms of the classes; and changes were made in the
requirements for student electronic contributions.
Moreover, new faculty members were brought into
the project to teach each new set of courses. Those
faculty members received specialized training similar
to that provided to the initial faculty prior to their
online teaching.
Student Perspectives
The most significant data came from the interviews
and focus groups with the students in this first co-
hort, throughout the almost two year period. These
individuals were eager to reflect on their experiences,
and as the end of their program drew closer, they be-
came even more thoughtful and philosophical about
their interactions and workload. They considered
themselves to be well versed in distance education
learning after their extensive time in the program.
Four overarching themes emerged from those data.
Transitions to new perspectives on the program. At
the conclusion of the first third of the program, stu-
Business, Education and Technology Journal Fall 2000
40
dents reported high levels of anxiety about success-
fully completing all their assignments. They were re-
quired to regularly post in the several “courserooms”
(each course had an electronic room in which discus-
sions were held regarding the issues and process of
that course), had difficulty balancing the demanding
needs of work, family and school, and also had to com-
plete their individual and group assignments. They
spent significant time in identifying coping strategies,
working from their team’s strengths, and worrying
about their abilities to complete the program. They
expressed little concern about grades, stating that they
would rather get a B and learn the material than get
an A and spend too much time away from their jobs
and families.
Over the next several months and throughout the
interviews, the attitude of “getting by” intensified. Stu-
dents reported more comfort in asking for longer ex-
tensions on minor as well as major assignments, in
doing just what they needed to submit a project, and
in reading only the essential elements. One student
said, “I think people have slowed down a lot more and
adapted…I know I feel like I’m doing exactly what I
need to get what I need done, and I’m not going crazy.”
Another added, “It’s a minimal commitment.” Fur-
ther, one commented, “I still am driven to do well on
the exams and the assignments. I’m just not willing
to do the additional work, the reading.”
Moreover, students have learned to anticipate what
types of activities would require which resources from
each of them. One student explained, “I can look at
the schedule now and say okay, this is going to take a
lot of time, or this isn’t going to take as much time.
When we started the program, I couldn’t do that.”
Another student interjected, “A prime example is the
class we’re on now, Finance. A lot of people aren’t
going to do the practice problems. They’ll read. They’ll
do the homework. They’ll do the final.”
Team work. A major focus of the MBA program
has been the teamwork, upon which many of the as-
signments were designed, as a way to create commu-
nity, and to replicate the manner in which most MBAs
accomplish their daily work. More than one student
echoed the words of this one, “First, I would never let
my team members down, I do my part of the team
work, and then I do my individual work.”
Teams worked in a variety of ways, but almost all
of them had incorporated a weekly telephone confer-
ence call into their work schedules. During the first
several months, these calls served to organize their
work, assign tasks, and discuss issues. By the end of
the first year of work, these weekly meetings had taken
on two distinct attributes. First, many of the groups
began to use the time primarily to “bond” by venting
 A Case Study of One Online MBA Program, Lynne Schrum, Ph.D. and A ngela Benson

frustrations or sharing stories, and would accomplish direction? You get a grade, and you can tell that
their work in a short discussion at the end of the call. it’s okay, but you have no idea, is that what would
Students explained, “…it’s just a therapeutic session.” really have happened in business.
Or “I know my team better. We know our strengths
better. We know who’s really good at something.”
These students were not really complaining about
Second, many of the team members began to miss
individual faculty members. They recognized that
those weekly calls, as they became comfortable with
each faculty member comes to a course with his/her
the process. One said, “Our team, for example, we have
own perspectives, but they also longed for some sense
not had a call where everyone was on the call since
of the familiar. As they evolved as online learners, they
January.” The teams tend to get most of their work
did not wish to re-invent their learning and studying
done by email, according to many of the students.
requirements at each change of course. This has also
The face to face component was also considered an
been reflected in the literature about student success
important aspect to the development of the teams. One
in online learning environments (Schrum, 2000).
student echoed comments of several others, “Just see-
Uses of Technology. As a technology rich program,
ing the faces, I would say, has a positive effect on me”
it was interesting how the uses and value of the tech-
Faculty issues. The faculty that initially worked with
nological infrastructure evolved over the course of the
these students developed their skills and knowledge
program. It is important to remember that all of these
at the same time as the students grew in their own
students use the technology daily in their working
confidence and comfort with the new idea of a de-
lives, and came to the project with experience and
gree via distance learning. The second year brought
comfort in doing so. Two main issues emerged regard-
many changes, particularly in the faculty. The students
ing the uses of the technology components.
were aware that the second set of faculty entered with
First, the use of the LearningSpace courserooms
slightly less experience and practice, and were not as
was variable. At the beginning of the program, every
committed to using LearningSpace in the same ways
course required that students post comments, and five
as the first group. Similarly, students noted that these
courses were taught at one time. During the ensuing
faculty members were less enthusiastic about provid-
year, due to feedback from the students, that changed
ing comments and fostering discussion.
to only two courses at one time, and simultaneously,
Students understood that the differences were
the use of the courserooms was diminished. Partici-
based on the interaction and dynamics between the
pation was not considered part of the course work,
type of course, circumstances of the content and tim-
and ultimately, through student feedback, it did not
ing, and the personality of the professor. As one stu-
earn a grade. One student explained, “The drop off in
dent said, “I feel like every time we get a new professor,
its use over this last semester, I think really affected
we go through the whole rigmarole of having to edu-
how connected we felt as a team and then as a team to
cate them on the program.” They wished for some
the rest of the class.” Another said,
sense of stability, and one commented, “If we can’t
depend on the teacher’s own personal style, we can
I think that we used the technology better the
depend on certain standard things all being in place
first year. We actually had virtual discussions …
and to … have them conform; to look, this is how
but in this past term we didn’t use it at all. And I
we’re running this class.” If given the choice between
think that a lot of people are feeling there wasn’t
faculty input and the hands-off approach, students
as much … feedback from the professors, there
preferred to have the balance lean more on the side of
wasn’t as much interaction outside of our teams
faculty being highly involved, providing commentary,
this term.
and sharing their experiences, and also to offer more
than a check-mark and a grade on assignments. One
student added, “That’s all I get is a grade and maybe Another change in using LearningSpace was evi-
two sentences. Check, A.” Another said, dent over time. In the beginning of the program, many
of the teams used the Learning Space functions to
A case can have any number of answers to it. accomplish their assignments. However, by the end
They are never right or wrong. And if you don’t of data collection, students were using the most ex-
know what’s the best way to approach it in the pedient way to accomplish their tasks. They used email
first place, and you have no idea what the two to distribute assignments, and then “One person gets
most popular results are, you don’t know, did I assigned to do like the Marketing things, and that
learn what I was supposed to out of that. Did I person does it for that week, sends it to the other two.
get the right things? Did I go even in the right If you’ve got any comments, which nine times out of

Business, Education and Technology Journal Fall 2000

41
 A Case Study of One Online MBA Program, Lynne Schrum, Ph.D. and A ngela Benson
ten nobody does, then they send them back and we
turn it in and we’re done.”
As mentioned, faculty had an ongoing challenge,
specifically in getting a balance exactly right regard-
less of what attribute was being discussed. This was
evident in discussing the second technology issue,
narrated Powerpoint lectures (also called Real Media
by the students). Faculty during the first year would
provide one of these multimedia lectures each week,
as supplement and explanation to accompany read-
ings and assignments, and their use was popular dur-
ing the first year of the program. Students described
listening to them more than one time, often while trav-
eling, to clarify confusing information. However, the
second group of faculty members did not employ
them as often. Students noticed this and commented,
“I think one of the most effective tools in learning
distance wise is having the narrated Powerpoint slides.
It really helps conceptualize a lot of the points that
the professor is trying to get through” and “Almost
everybody I’ve talked to said the RealMedia lecture is
the single most important tool, and for some reason
or another they were lacking this last time.” It was
unclear if faculty members were aware of students’
desire for this component, but it is perhaps reflective
of individual teaching styles, the nature of these sec-
ond year courses, and possibly even the amount of
energy put into these courses.
Overall, students did feel that the technology played
an important role in the development of the com-
munity and the creation of interaction among geo-
graphically dispersed participants, but opinions
differed on the role of the technology in certain types
of pedagogical tasks. One student commented, “I
think one of the big lessons is that technology sup-
ports the lecture, exercise, writing papers, collaborat-
ing with a couple of people, very well, but it’s not as
good at supporting us when we’re doing case and re-
search type work.” However, another said,
I think you have to rely more on the technology
for case-oriented courses. I think otherwise what
you end up with is what we have this last time
where each person feels very disconnected from
the program and from teammates, and from
classmates. If all you’re doing is a case, working
on it, turn it in, sending it back, …that feels like
a correspondence course.
This type of varying opinion would of course com-
plicate the job of faculty members trying to meet the
needs of students, since the students did not speak
with one common voice when describing their per-
fect online learning environment.
Business, Education and Technology Journal Fall 2000
42
Administrative Perspectives
From the interviews and discussions with the ad-
ministrators of the project, several issues emerged as
significant results of the implementation of this dis-
tance MBA program. Overall, these can be categorized
into three areas.
Effects on Traditional MBA Program
One of the unexpected outcomes of the distance
MBA program was its impact on the college’s tradi-
tional on-campus program. In particular, the distance
program impacted the program hours, content, and
technology integration in the on-campus program.
Program Hours. The MBA Program Committee
structured the distance MBA program as a 48 credit-
hour program, while the on-campus program is 66
hours. Forty-eight hours was chosen because 48 is the
minimum number of hours an MBA program can
require and remain accredited by the American As-
sembly of Collegiate Schools of Business (AACSB).
According to the MBA program director, “the dif-
ference in hours in the two programs is in electives
and ability to specialize.” The programs share the same
core areas and “every one of our MBA program re-
quired courses also show up in the distance program.”
For practical reasons, the size of the student cohorts
(maximum 50) forces the program administrators to
limit students in the distance program to two options:
finance and marketing. To offer more options would
increase the number of courses and lower the num-
ber of students per course to the extent that the pro-
gram would become unmanageable.
As a sanity check on their decision to develop a 48-
hour distance MBA program, the college conducted
a survey of the number of hours required in other
traditional programs: “We discovered that we have
more hours required to do an MBA than any other
program that we’ve looked at thus far.” As a result, the
MBA Committee is re-examining the length of its on-
campus program. “Maybe we’re a little out-of-sync
in terms of the market with our program hours,” the
program director observed.
Content. The distance program is also causing the
MBA Committee to re-visit and update the content
offered in a couple of courses. Because the students
enrolled in the distance program are working for a
leading edge employer, the college benefits from those
students’ experiences. According to the program di-
rector,
Students [in the distance program] are coming
up with suggested changes to courses where they
 A Case Study of One Online MBA Program, Lynne Schrum, Ph.D. and A ngela Benson
find themselves more advanced than the mate-
rial being presented in the course. I see that as
being advantageous to the full-time [on-cam-
pus] students because those updates, where ap-
propriate, are incorporated in the on-campus
version of the courses.
Technology Integration. Because the professors
teaching in the distance program also teach compa-
rable courses in the on-campus program, technology
use in the on-campus program has increased. Spe-
cifically, the faculty involved in the distance program
found Learning Space, the courseroom software used
in the distance program, such an effective learning
tool that they proposed it be used in on-campus
courses as well. The program director explained,
We didn’t force it. And there were a few [fac-
ulty] who said, I don’t have time to learn this
new technology this year or I’m about to retire,
I don’t see much point in learning a new tech-
nology. But there were some who jumped on and
took advantage, went to all the training, really
got into it. I think that group will grow every
year. There will be more and more people who
adopt it and hopefully it won’t get to the point
where we have to mandate it. It will just be this
is the way it’s done and everybody sees the ad-
vantage of using it.
Program Support
Since the beginning of the inquiry into this innova-
tive program, technical support has been identified
as a key reason for the program’s success to date. This
most recent round of interviews with the MBA pro-
gram director uncovered the first mention of the con-
tribution of administrative support. Special mention
was made for the need for continued non-instruc-
tional support for new faculty entering the program.
Administrative (non-instructional) support. Admin-
istrative support within the College of Business and
across the larger university community was cited as
valuable to the success of the distance program: “We
had incredible support from the college in terms of
letting us pick the best faculty to teach in this pro-
gram, and in terms of the budgetary support for the
program.” The Dean of the business school was fully
supportive of the program because it addressed two
of his key concerns: executive education and enhanc-
ing corporate relationships. The Dean’s support was
thought to be a contributing factor to the support
received from outside the college of business.
Business, Education and Technology Journal Fall 2000
43
In spite of the support from within the college, a
need for additional support in the areas of course and
faculty evaluations was identified. Course evaluations
were problematic because of a concern among busi-
ness school department heads that distance students
could end a course while at a distance and not be able
to complete the course evaluations in the same man-
ner as the on-campus students. The issue of course
evaluations has become a philosophical one. “We [the
distance program administrators and faculty] think
the evaluation used for the distance program ought
to be different from the one used in the on-campus
program, but we haven’t had the time to develop one.”
The existing business school peer review process
did not work effectively for faculty in the distance
program. Many faculty members felt disadvantaged
because their peers teaching in the on-campus pro-
gram did not understand the amount of time and ef-
fort required to conduct a distance course. “To some
of them it looked like, oh, you teach four days and
then you don’t teach again for two months. They don’t
see the ongoing day-to-day work required.”
In terms of university-wide administrative support,
the graduate school was flexible in its application
deadlines, accommodating both the distance MBA
students starting in October, and the on-campus stu-
dents starting in August. The distance MBA program
worked closely with the financial aid office because
all the students took out loans. The registrar’s office
adjusted and suffered some inconvenience in the pro-
cess as well because the distance semester end didn’t
match the university semester end.
Some of the university wide supporters received
unexpected benefits from association with the dis-
tance program. For example, the financial aid office
“worked out a lot of the bugs that came about the
first year so that they don’t have to do that much dif-
ferently for the distance students than for the other
students.”
Technical support. Technical support was consid-
ered a major strength of the program since its incep-
tion, and the plan is to maintain the level of support
offered to students and faculty. The program director
said,
One of the group [support staff] was pulled off
part of this year for another project, and we’d
like to get at least back up to three people who
can dedicate all of their time to it. We also want
to add an administrative person to handle the
paperwork associated with the program.
 A Case Study of One Online MBA Program, Lynne Schrum, Ph.D. and A ngela Benson
Instructional Support. The first faculty cohort group
was brought together and trained by someone out-
side the business school. As the inaugural faculty in
the program, this group received a considerable
amount of special attention. It seemed reasonable then
that the first cohort would teach the second cohort as
a way of sharing their experiences, one colleague to
another, but the second faculty cohort does not ap-
pear to have faired as well as the first. The program is
now investigating strategies to resolve this problem.
As the program director said,
I don’t think we got our second year faculty quite
as hyped up as the first year faculty were. And
maybe it’s inevitable, you know, the second time
you do something, the second group, everything
is not as special as it was the first time. But we
have been talking about what we need to do to
make that a little bit better.
The first cohort built a supportive environment in
weekly Customer Quality Assurance team meetings
during which they responded to student comments
and discussed program related issues. Unfortunately,
the second cohort faculty “has not been as religious
in attending. The group that has been attending is
asking what can we do to get these people to buy-in
more, to commit more, and to be more a part of the
process.”
Corporate Perspectives
The corporate partner considered the corporation’s
association with the College of Business successful,
as evidenced by their recent agreement to sponsor
three additional class cohorts. The Corporate Part-
ner contact, who happens to be an alumni of the in-
stitution, believes the program brought about positive
changes in faculty performance when compared to
the performance he recalls from his days as a student
20 years ago, and his knowledge of corporate life, adult
learning and the cognitive processing in short- and
long-term memory. He identified four areas of sig-
nificant impact.
Time Management. This program differed from tra-
ditional on-campus programs in that the faculty
agreed to limit the coursework assignments of the stu-
dents, who were full-time employees, to fifteen hours
per week. Because of comments from the distance stu-
dents about excessive assignments, the program
course workload was benchmarked. As a result, the
faculty re-visited the assignments and reading lists for
the courses and attempted to rank them in order of
Business, Education and Technology Journal Fall 2000
44
importance. In some cases, assignments and readings
were dropped from distance courses, while in others
they were categorized as required or optional. The
corporate partner observed,
What I like about this program and the way the
faculty are starting to move about is that you
get them to focus on what is the most impor-
tant thing and sort of use the 80-20 rule, that is,
I’m going to really focus on the 80 percent and
forget about that last 20 percent because that’s
where they’re going to spend all their time and
it’s least the valuable.
The corporate partner views this decision as posi-
tive and practical, given the corporation’s interest in
their students’ ability to apply what they learn:
You can sit there and you can say I’m going to
deliver this class in its full scale thing, and if you
take those students and if you measure them at
the end, you measure them two months out and
four months out, they’re not going to remem-
ber much anyway.
The time management issue has also resulted in
the faculty working across courses and departments
to plan student assignments. “If [the cohort is tak-
ing] two classes, the faculty have to figure out and
schedule [assignments] that complement each other
so that they’re not really exceeding [the fifteen hours]
by that much.”
Assignment Management. Program flexibility is a
primary concern of the corporate client, and one of
the program’s characteristics considered key to its
success. A particular point of flexibility is the faculty
flexibility in accepting student assignments:
I think that there are some things that have been
pretty impressive about the way that the Busi-
ness school here has adjusted. They’ve remained
very flexible. They are very client oriented. And
we’ve seen that some of them are changing their
attitudes, some of the things they do because of
this…. I think it’s also a nature of some of the
other things that are almost prerequisite to mak-
ing a program like this work, when you’ve got
people that are still trying to work full-time.
Not surprisingly, this point of flexibility has been
most difficult for faculty. The faculty wants to teach a
group paced distance course, while the distance stu-
 A Case Study of One Online MBA Program, Lynne Schrum, Ph.D. and A ngela Benson
dents much prefer a more self-paced, independent
study model when it comes to assignments. As the
MBA program director notes,
Where we’ve run into the biggest hang-up, I
would say, is figuring out how flexible to be in
terms of students not turning in assignments on
time. I think that’s been our biggest problem is
trying to figure out how flexible are we in terms
of deadlines. Not totally unlike an on campus
class when a student comes in and says, my car
broke down, or my computer crashed, or what-
ever. You have to try and figure out what’s the
real story and how far you can go without hurt-
ing the people in the class who did get it [the
assignment] in on time.
Marketing Management. With traditional campus
programs, the campus is responsible for marketing
programs to students. In this faculty-business collabo-
ration, marketing is a function of the corporate part-
ner. This change relieves the College of Business from
a major task that directly affects program profitabil-
ity. According to the program director, “We don’t have
to worry about filling the seats. We contract for a cer-
tain number of students and they [the corporation]
have to fill them.” Filling seats in the program is ac-
complished by marketing throughout the corporation.
The corporate partner explained,
From my own perspective as sort of running this
program, I need to do more of the marketing
kinds of stuff to ensure that the word is out there.
I think we did a pretty good job of making sure
that it got out there in the external press last year,
but probably not as good internally within the
firm as we probably should have.
In general, the corporate partner strives for an open
environment where people “self-nominate themselves
and then we went through an internal filtering pro-
cess ourselves before identifying those to continue the
application process with the university.” The corpo-
ration is re-visiting the internal guidelines for student
applicant selection, trying to ensure that they are eq-
uitable across the workforce.
Student Life Management. Another key to contin-
ued program success is student life management. The
corporate partner expends a lot of time and money
making sure that employees can successfully complete
the program while continuing to work full-time. The
partner believes the importance of team-work in the
corporate environment has been a major factor in
Business, Education and Technology Journal Fall 2000
45
their students’ success. “It’s actually one of the things
that they get evaluated on,” the corporate partner ex-
plains:
I think that what we do with the teams here is
real good from a student perspective. I think the
team stuff needs to continue… they very quickly
find ways to work with their teams and leverage
the skill sets within the teams, but also to pull
for each other. And when you’re talking about
the kind of environment that we have, is that
there are going to be times when somebody has
to, because of project work or a family situation
or something, has to back out of the effort for a
week or two, but then needs to come back in
and pick up.
The corporate partner is looking for other ways to
support students as well. For example, the corpora-
tion would like to develop life management models
to provide to new cohorts. These models would show
the different ways that past students have integrated
the distance degree program into their lives. The idea
is to have models that map directly to student lifestyle,
where the unmarried student model might differ from
the married student model, and the student working
with a client model might differ from the student not
working with a client model.
Conclusions
This research described the processes involved in the
evolution of a hybrid MBA program for learners at a
distance from the perspective of the students and ad-
ministrators. It was clear that the electronic network
and groupware supported collaborative and interac-
tive educational environments. The students grew in
their understanding of online learning and of their
own needs as learners, and they became increasingly
willing to state their needs clearly. Several common
threads emerged from the participants’ perspectives
and experiences.
Learners reported changes in the nature of their
teamwork and their uses of the technology through-
out the two years. The need for weekly feedback to
the development team and to the faculty became less
important for the learners. Tasks given to the learners
were useful only when relevant and authentic, and
when they served to complete direct assignments.
Further, the students articulated a desire for more tra-
ditional feedback from faculty members, a more stable
electronic environment and more effective use of the
courserooms.
 A Case Study of One Online MBA Program, Lynne Schrum, Ph.D. and A ngela Benson
Additionally, faculty recognized that some activi-
ties were inherently better for teams while others were
much more easily and appropriately accomplished
individually. Other results dealt with the amount of
planning and support necessary for implementing an
electronic course. Technical support was essential, and
alternatives for inevitable problems had to be ar-
ranged.
Administrators saw the on-campus MBA program
benefit from the distance program due to the updat-
ing of courses based on input from distance students,
and through the on-campus incorporation of tech-
nology tools used in the distance program. In addi-
tion , the adm in istrators con tin u e to iden tify
support—technical, administrative (non-instruc-
tional), and instructional—as keys to program suc-
cess. They identify a need for additional support
within the college to address issues related to evalua-
tion of distance courses and faculty evaluations.
The corporate partner recognized the value of this
partnership and the benefits that have accrued to the
corporation and its employees as well as to the Col-
lege of Business. He appreciated the flexibility in pro-
gram design and delivery which resulted in a program
that met the academic rigor demanded of a top-rate
program while at the same time providing the enrolled
employee-students knowledge and skills directly ap-
plicable to current or future work assignments. While
the partner counts the program a success to date, he
identifies continued marketing within the corpora-
tion and life management support for students as keys
to future success.
Further research is needed to provide more infor-
mation regarding best practices in designing online
experiences for content specific learning, collabora-
tive problem solving, and group processes. Addition-
ally, it is significant that these students have succeeded
in this environment, and they may provide valuable
insights into dimensions that support this success.
Therefore, further investigation of factors students
identify as contributing to their success is warranted.
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Department of Instructional Technology
The University of Georgia
604 Aderhold Hall
Athens, GA 30602-7144
 Appendix: Golden Gate School of Technology and
Industry Faculty and Staff
Earl N. Austin, Associate Professor, Hotel, Restaurant,
and Tourism Management Program.
B.S., University of Denver
M.B.A., Golden Gate University
Professional focus areas: Consultant to ATA @ Brazil
for Contract Food Service; Import/Export of sous vide
products from France, NFA; Contributing Editor to
CHRIE Educator, a refereed journal.
Courses: Food, Beverage & Labor Cost Controls; Hu-
man Relations & Motivation; Worldwide Tourism;
Special Event Tourism; Institutional Management,
Club & Resort Management.
Constance M. Beutel, Associate Professor, Chair, MS
e-Commerce, Co-Chair, Telecommunications Man-
agement.
B.A., University of Minnesota
M.P.A Golden Gate University, Telecommunications
Ed.D., University of San Francisco
Professional focus areas: Futures, Adult Higher Edu-
cation, Women and Leadership, Enriching teaching
and learning through technologies, International and
Multicultural Education with special emphasis in Par-
ticipatory Educational Return on Investment, Corpo-
rate professional edu cation and development,
Scenario Planning.
Courses: Technology & Society; The Futures of Tele-
communications; Professional Practice in e-Com-
merce; Science, Technology & Cultural Change.
Selected Publications, Presentations, Papers: Knowledge
is Power: Women as Leaders @ Stanford; Corporate
Broadcast: Imagine your Future; Worklife to Lifework:
The role of Self-Directed Education, with Mae Jean
Go, Ph.D.; Reaching Learners through Telecommu-
nications; Longman Group, UK Ltd, 1994; Confer-
ence Chair, Corporate Universities Conference,
International Quality and Productivity Center; Pre-
senter, Quality Assureance in Distance Education,
Open University, Cambridge University, England;
Radio inter view, KQED Forum: The Changing
Workforce; Co-author: Participatory Research, A Dia-
logue for Action.
Anne Carlisle, Contract Administrator.
B.A., Lake Erie College
M.A., Case Western Reserve University
Ph.D., Case Western Reserve University
Business, Education and Technology Journal Fall 2000
47
Assistant Professor of English at Case Western Reserve
University, Pennsylvania State University, Florida Keys
Community College.
Professional focus areas: Communications consultant to
industry; Executive Director for trade associations;
Public Relations Director for the hospitality industry.
Selected Publications, Presentations, Papers: Published
widely in magazines as feature writer and editor; Text-
books and topselling seminar delivered nationally on
the subject of business/technical writing.
Min Chiang, Adjunct Professor.
B.A., Tunghai University, Taiwan
M.A., University of Washington
M.S., Ph.D. candidate, Illinois Institute of Technology.
Manager, Network Design, TransAmerica Information
Services.
Cathi Colin, Chair, Database and Web programs.
B.A., Brooklyn College
M.A., St. Johns University
M.S., San Francisco State University
Ph.D., UC Santa Cruz
Areas of Specialization: Scientific and data visualiza-
tion; object oriented programming languages; design
and analysis of algorithms; instructional technology;
database and web development.
Courses: Fundamental Programming Concepts Using
Java; Data Structures, Simulation and Modeling; Unix
Programming; Operating Systems Concepts.
Miro Costa, Associate Professor of Information Sys-
tems; Chair, Information Systems Department.
B.S., M.S., Rio de Janeiro Federal University, Brazil
M.S., University of Texas
Ph.D., University of Texas
Areas of Specialization: Artificial Intelligence Appli-
cations in Business and Statistical Databases. Advisor
for the Information Systems concentration in the
Doctor of Business Administration (DBA) Program.
Active member of the San Francisco Institute of Finance
and Technology. Author of articles in Management In-
formation Systems. Consulting experience in private
and federal organizations in Brazil and in the USA.
Courses: Artificial Intelligence; Decision Support Sys-
tems; Database Management Systems; Systems Analy-
sis & Design.
 A ppendix
Gary Crutchfield, Adjunct Professor of Information
Systems.
B.S., M.S., Illinois Institute of Technology
Areas of Specialization: Java and Linux. Consultant to
companies using Java and Linux to develop web-based
applications.
Courses: Client-Server and Distributed Objects, Op-
erating Systems Concepts.
Bob Fulkerth, Associate Professor of Information Sys-
tems.
B.A., M.A., Chico State University
Ed.D., University of California at Berkeley
Areas of Specialization: Technology; Communications;
Instructional Technology and Training. Recipient,
Golden Apple Teaching Award, 1995. Author/pre-
senter of articles and presentations on technology,
diversity, and online instructional design. Design and
teach online Business Writing courses. Design and
teach multimedia courses.
Courses: Management Information Systems; Com-
puter Applications for Business Communication;
Designing and Deploying Databases for the World
Wide Web; Doctoral Writing & Research.
James W. Koerlin, Associate Professor, Telecommu-
nications Management and Dean, School of Technol-
ogy and Industry.
B.A., San Francisco State University
M.B.A., Golden Gate, University
Ph.D., Walden University
Areas of Specialization: Telecommunications Manage-
ment.
Courses: Telecommunications Management; Telecom-
munications Technology & Society; Corporate Tele-
communications Strategy; Operations Management.
John Moreno, Chair of Information Technology, Sili-
con Valley Region.
B.A., University of Connecticut
M.Eng., Yale University
Areas of Specialization: Technology and Information
Management, Web Operations Management.
Courses: Electronic Commerce, Computers for Small
Businesses, Statistics.
John T. Self, Ph.D. Associate Professor and Chair,
Hotel, Restaurant, and Tourism Management Pro-
gram.
B.S., Auburn University
M.Ed., University of North Texas
Ph.D., University of Alabama
Business, Education and Technology Journal Fall 2000
48
Areas of Specialization: Management retention; Cus-
tomer service, and Food and Beverage Operations;
Expert witness on cases concerning hospitality man-
agement liability; Workshops on management coach-
ing; Weekly online columns on customer service for
Nation’s Restaurant News and The Sideroad.
Courses: Hospitality Law; Computer Operations; Glo-
bal Trends.
Roger Smith, Co-Chair Telecommunications Chair,
Technology Management Programs, Director, Corpo-
rate Programs, Adjunct Associate Professor.
B.S., San Diego State University
M.S., Golden Gate University
Areas of Specialization: Multimedia, Web Page Devel-
opment, Web Page and Database Integration, Tele-
communications Management.
Courses: Multimedia and Wireless Communications
Technology, Developing and Deploying Databases on
the World Wide Web.
Lynette C. Webb, Faculty, Computer Information Sys-
tems.
B.A., University of Pennsylvania
M. A., Golden Gate University
Courses: Beginning HTML and Web Pages, Advanced
HTML and JavaScript, Introduction to Web Page
Design, Effective Web Searching.
Rudiger Wysk, Assistant Professor, School of Technol-
ogy and Industry, Chair, Information Technology,
Sacramento.
B.S. EE Pontifical Catholic University of Rio Grande
do Sul, Brazil
B.A. BPA Federal University of Rio Grande do Sul,
Brazil
M.S. IS Federal University of Rio de Janeiro, Brazil
Ph.D. MIS University of Arizona
Experience: systems analysis & design, project man-
agement, and IS planning in public sector; training/
consulting in private and public sectors; stint with a
software house; junior partner in 2 start-ups; before
teaching at University of Arizona, Northern Arizona
University, and University of Baltimore, taught at three
major universities in Brazil and at IBM’s LASRI.
Articles: Systems Analysis & Design, Knowledge Sys-
tems, Computer Supported Meeting Environments,
and Management of IS.
Areas of Specialization: Knowledge Systems/Manage-
ment, Systems Analysis and Design, Computer Sup-
ported Meeting Environments.
Courses: Systems Analysis & Design and e-Commerce.
 ISSN 1528-1256

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Golden Gate University
536 Mission Street
San Francisco CA 94105

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