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BUSINESS
RESEARCH
YEARBOOK
Global Business
Perspectives
VOLUME XVII 2010
NUMBER 2
RODNEY A. OGLESBY
H. PAUL LEBLANC, III
MARJORIE G. ADAMS
EDITORS
Publication of the International
Academy of Business Disciplines
BUSINESS RESEARCH YEARBOOK
GLOBAL BUSINESS PERSPECTIVES
VOLUME XVII 2010

Number 2
Editors
Rodney A. Oglesby
Drury University
H. Paul LeBlanc, III

University of Texas at San Antonio
Marjorie G. Adams
Morgan State University
A Publication of the
International Academy of Business Disciplines
IABD
Copyright 2010
by the
International Academy of Business Disciplines
International Graphics
10710 Tucker Street
Beltsville, MD 20705
(301) 595-5999
All rights reserved

Printed in the United States of America
Co-published by arrangement with

The International Academy of Business Disciplines
ISBN
1-889754-15-3
PREFACE
This volume contains an extensive summary of many of the papers presented at the
Twenty-Second Annual Conference of the International Academy of Business Disciplines
(IABD) held in Las Vegas, Nevada, April 8 - April 10, 2010.This volume is part of the
continuing effort of IABD to make available current research findings and other contributions to
practitioners and academics.
The International Academy of Business Disciplines was established in 1988 as a world-

wide, not-for-profit organization, to foster and promote education in all of the functional and
support disciplines of business.The objectives of IABD are to stimulate learning and increase
awareness of business problems and opportunities in the international marketplace and to bridge
the gap between theory and practice.The IABD hopes to create an environment in which
learning, teaching, research, and the practice of management, marketing and the other functional
areas of business will be advanced.The main focus is on unifying and extending knowledge in
these areas to ultimately create integrating theory that spans cultural boundaries.Membership in
the IABD is open to scholars, practitioners, public policy makers, and concerned citizens who
are interested in advancing knowledge in the various business disciplines and related fields.
The IABD has evolved into a strong global organization since its establishment, due to
immense support provided by many dedicated individuals and institutions.The objectives and
far-reaching visions of the IABD have created interest and excitement among people from all
over the world.
The Academy is indebted to all those responsible for this year’s Conference, particularly,
Paul Fadil, University of North Florida, who served as Program Chair, and to those who served
as active track chairs.Those individuals did an excellent job of coordinating the review process
and organizing the sessions.A special thanks also goes to the IABD officers and Board of
Directors for their continuing dedication to this conference.
Our appreciation also extends to the authors of papers presented in the conference.The
high quality of papers submitted for presentation attests to the Academy’s growing reputation,
and provides the means for publishing this current volume.
The editors would like to extend their personal thanks to Dr. William Rohlf, Interim
Director of the Breech School of Business, Drury University, Dr. Daniel J. Gelo, Dean of the
College of Liberal Arts, The University of Texas at San Antonio, and Dr. Otis A. Thomas, Dean
of the School of Business and Management, Morgan State University for their support.
Rodney A. Oglesby
H. Paul LeBlanc III
Marjorie G. Adams
i
TABLE OF CONTENTS
CHAPTER 17: INSTRUCTIONAL& PEDAGOGICAL ISSUES .................................409
The Global MBA: Strategic Options for Going International

Robert A. Page, Southern Connecticut State University
Henry Hein, Southern Connecticut State University
Jacob Atland, Southern Connecticut State University................................................. 410
End User Engagement In An Analysis and Design Course

Douglas E. Turner, University of West Georgia
Robert G. Gehling, Auburn University at Montgomery ..............................................418
A Voice of One’s Own: Writing as a Business Education Power Tool

Sarah E. Page, Southern Connecticut State University................................................423
Creating A First Hybrid Course: The Experiences of Two Instructors and

Their Advice To Colleagues
Craig L. Reeder, Florida Agricultural and Mechanical University
Angela J. Murphy, Florida Agricultural and Mechanical University ..........................429
Immigrant And Native Born Entrepreneur Technology Component Attitudes

And Behaviors: Implications For Training
Kellye L. Jones, Clark Atlanta University .................................................................. 437
CHAPTER 18: INTERNATIONAL BUSINESS AND MARKETING........................... 444
Additive and Subtractive Differentiation Strategy: A Global Strategy Based on

Marketing Theory
Mohammed Shaki, Alliant International University
Ralf Wilhelms, Lake Superior State University ..........................................................445
An Analysis of the Impacts of Exporting and Importing on Two Dimensions of

Development in Africa
Philemon Oyewole, Howard University
Ephraim Okoro, Howard University............................................................................449
China’s Trade with Sub-Saharan Africa and Market Entry Modes: A Cost Benefit Analysis
Ephraim Okoro, Howard University
Philemon Oyewole, Howard University ......................................................................454
iii
CHAPTER 19: LEADERSHIP............................................................................................462
Corporate Women Leadership in India: Issues & Challenges

RajeshwariNarendran, MohanlalSukhadia University
V Narendran, Academy of Learning Excellence Research & Training, India
PujaMathur, MohanlalSukhadia University.................................................................463
The Relationship Between Leadership Style and Employee Stress

Debra Lopez, Our Lady of the Lake University
Mark T. Green, Our Lady of the Lake University
Diana Garza-Ortiz, Our Lady of the Lake University .................................................469
Leadership Style Differences Between Men and Women: A Review of the

Scholarly Literature
Esther Chavez, Our Lady of the Lake University
Diana Garza-Ortiz, Our Lady of the Lake University .................................................474
Leadership Transformation: Re-tooling Strategies for IT Leadership

RanjithNayar, Helsinki School of Economics
RajeshwariNarendran,MohanlalSukhadia University.................................................. 480
CHAPTER 20: MANAGERIAL ACCOUNTING.............................................................485
The Influence of Transformational Leadership on Job Satisfaction: Balanced Scorecard

and Resource-Based Theory
Yi-Feng Yang, Shu-Te University
Majidul Islam, Concordia University ..........................................................................486
Marketing Mix, Service Quality and Customer Loyalty: Customer Satisfaction

Analysis of the Balanced Scorecard Perspective
Yu-JiaHu, Fortune Institute of Technology
Majidul Islam, Concordia University ..........................................................................493
CHAPTER 21: MANUFACTURING AND SERVICE..................................................... 499
Managing The Negative Effects of Customer Waiting on Service Evaluations: Review of

Research and Practice
Tracey E. Garza, Sam Houston State University
Irfan Ahmad, Sam Houston State University ..............................................................500
We Need to Learn From Japanese Society: “Productivity and Growth”

Reza Teherani-Fadaei, National University
Mohammad Z. Bsat, National University ....................................................................506
iv
A Statistical Analysis of Organizational Effectiveness
Mohammad Z. Bsat, National University
Astrid M. Beckers, Cultures Etc. .................................................................................509
CHAPTER 22: MARKETING RESEARCH.....................................................................514
Neural Network Based Model for Measuring the Effects of Marketing Research on
Marketing Performance
SelimZaim, Fatih University
TalhaHarcar, Pennsylvania State University at Beaver
MahmutPaksoy, Kultur University ..............................................................................515
Marketing Strategy for the Do-It-Yourself Consumer

Dwane Hal Dean, Frostburg State University..............................................................522
Use of Qualitative Forecasting Technique for The Measurement of Country Tourism

Market Potential
ErdenerKaynak, Pennsylvania State University at Harrisburg
Jose I. Rojas-Mendez, Carleton University .................................................................528
Exploring Consumer Motivations for Re-Watching Movies

Dwane Hal Dean, Frostburg State University..............................................................535
Brand Personality: A Study of Turkish Mobile Phone Market

AhmetSekerkaya, Istanbul University
TalhaHarcar, Pennsylvania State University at Beaver ...............................................541
CHAPTER 23: ORGANIZATIONAL BEHAVIOR AND ORGANIZATIONAL

THEORY ................................................................................................................................548
Job Affirmation: “My Job Made Me the Person I Am Today!”

Michael K. Coolsen, Shippensburg University
Vicki Fairbanks Taylor, Shippensburg University
David Reese, Shippensburg University .......................................................................549
Diversity and Religion in the Workplace

C. W. Von Bergen, Southeastern Oklahoma State University
Diane Bandow, Troy University ..................................................................................557
Darwin’s Deadly Legacy? Why Evolution Matters For Management Studies

Chulguen Yang, Southern Connecticut State University
Stephen M. Colarelli, Central Michigan University
Kayong Holston, Ottawa University............................................................................564
v
CHAPTER 24: POLITICAL COMMUNICATION/PUBLIC AFFAIRS....................... 569
Face-ism in the 2008 U.S. Presidential General Election: Photo Coverage of Candidates
in News & Business Magazines
Kelly Price, East Tennessee State University
John Mark King, East Tennessee State University......................................................570
From Visitors to Cultural Ambassadors: Public Diplomacy and Scholar Exchange Programs
H. EfeSevin, Emerson College ....................................................................................578
CHAPTER 25: PUBLIC RELATIONS AND CORPORATE

COMMUNICATIONS ...............................................................................586
Women Leaders in Business: Their Motivations and Challenges

Emma Daugherty-Phillingane, California State University, Long Beach ...................587
Major Approaches for the Corporate Social Responsibility Communication: An

Observation for Turkish Corporate Websites
İdilKarademirlidağ SUHER, Bahcesehir University ...................................................595
The Death of Second Life: A Case Study of a (Old) “New Technology”

Michael L. Kent, University of Oklahoma
Maureen Taylor, University of Oklahoma...................................................................603
Redressing Assumptions of Image and Examining the Value of a Negative Celebrity Image
Across International Boundaries
Adam E. Horn, University of Missouri/University of Central Missouri
Tricia L. Hansen-Horn, University of Central Missouri..............................................611
A Communication Challenge: How to Effectively Communicate an Organizational

Change (A Recycling Program)?
Gideon Falk, Purdue University Calumet....................................................................617
Public Relations Theory: Translating in a Global Environment

Bonita Dostal Neff, Valparaiso University
Tricia L. Hansen-Horn, University of Central Missouri..............................................621
CHAPTER 26: QUALITY AND PRODUCTIVITY .........................................................626
CMMI Misunderstood: Why Software Producing Companies Choose Six Sigma

Versus CMMI
Chris B. Simmons, University of Memphis
Sajjan G. Shiva, University of Memphis .....................................................................627
vi
Shipper Transportation Productivity Improvements on Electronic Logistics Marketplaces
Rahul Kale, University of North Florida
Paul Fadil, University of North Florida .......................................................................633
CHAPTER 27: QUANTITATIVE MANAGEMENT .......................................................639
Performance Measurement of Home Appliances Manufacturing Company by Leanness

Concept and System Dynamics Approach
Ahmad E. Taleghani, Iran University of Science and Technology
S.M. Hosseini, Iran University of Science and Technology
ArashBakhsha, Iran University of Science and Technology .......................................640
Approaching Lean Strategy Map in Auto-Parts Industries

ArashBakhsha, Iran University of Science and Technology .......................................648
CHAPTER 28: SPIRITUALITY IN ORGANIZATIONS................................................655
Spirituality as an Ethical Action Model

Robert Meyers, MicroSoft Corporation
Robert A. Page, Jr., Southern Connecticut State University .......................................656
Team Effectiveness: The Turbulent Role of Environmental Turbulence

Lawrence E. Zeff, University of Detroit Mercy
Mary A. Higby, University of Detroit Mercy ..............................................................663
CHAPTER 29: SPORTS MARKETING............................................................................671
Contentious Issues In Professional Boxing: Can The Sport Be Repositioned And Bring
Credibility To It?
Felix Abeson, Coppin State University .......................................................................672
CHAPTER 30: STRATEGIC MANAGEMENT...............................................................677
Capital for Farmland: The Next Wave of Outsourcing

Margaret A. Goralski, Southern Connecticut State University.................................... 678
Development of Human And Social Capital Through Industry Peer Networks

Kyle Luthans, University of Nebraska at Kearney
Ada Leung, Pennsylvania State University at Berks ...................................................685
Labeling Genetically Engineered Food: A Strategic Perspective

OmidNodoushani, Southern Connecticut State University
Patricia A. Nodoushani, University of Hartford ..........................................................691
vii
Managing for Change: Business and Academia - A Comparative Analysis
Martin M. Shapiro, Berkeley College..........................................................................697
Polarity Management: Balancing the Stress and Tranquility Polarities During a Recession
Denise Gates, TAMIU .................................................................................................704
CHAPTER 31: STRATEGIC MARKETING....................................................................711
Marketing Practices of the Manley Popcorn Company: A Company Ahead of its Time,
or an Example of Timeless Marketing
Edward Bond, Bradley University
Ross L. Fink, Bradley University
Rajesh Iyer, Bradley University...................................................................................712
The Effects of Market Orientation on Commercial Bank Performance

Paloma Bernal Turnes, Rey Juan Carlos University
Irene Garrido Valenzuela, University of Vigo
Carmelo Mercado Idoeta, Rey Juan Carlos University ...............................................720
CHAPTER 32: TOURISM, TRAVEL AND HOSPITALITY .........................................729
Does Racial Discrimination Influence Leisure Destination Choice?

Nathan K. Austin, Morgan State University
Michael Callow, Morgan State University
BintaAbubakar, Morgan State University.................................................................... 730
The Effect of Discounting on Service Quality and Return Patronage in the

Restaurant Industry
Dean A. Koutroumanis, University of Tampa .............................................................738
CHAPTER 33: STUDENT PAPERS TRACK...................................................................746
Amegy Bank of Texas: A Public Relations Plan

Dana Baker, The University of Texas at San Antonio
Andrea Lopez, The University of Texas at San Antonio.............................................747
Domino’s Pizza’s Response to Video Scandal: A Public Relations Case Study

Giselle J. Guadron, The University of Texas at San Antonio......................................754
Shape up America! And Childhood Obesity: “Overcome Obesity to Maximize Your Life”
Campaign
Disney Hanka, The University of Texas at San Antonio
Heather Harper, The University of Texas at San Antonio...........................................759
Major Case Study: The Crisis at AIG

Amina Lovell, The University of Texas at San Antonio .............................................765
viii
Two of the Same? Crisis Communication in AF447 and TK1951
H. Efe SEVIN, Emerson College.................................................................................769
FEMA’s Response to Hurricane Katrina: A Public Relations Case Study

Stephanie Shropshire, The University of Texas at San Antonio
Sarah Phinney, The University of Texas at San Antonio ............................................778
ix
CHAPTER 17
INSTRUCTIONAL & PEDAGOGICAL ISSUES
409
THE GLOBAL MBA: STRATEGIC OPTIONS FOR GOING INTERNATIONAL
Robert A. Page, Southern Connecticut State University
Jacob Atland, Southern Connecticut State University
ABSTRACT
Recent research suggests that Master of Business Administration [MBA] prestige is

defined by the degree to which graduates master international business. This paper explores how
56 of the most popular MBA programs have adopted international management into their
curricular offerings. Comparing global focus to tuition costs revealed four distinct types: elite,
parochial, economic and progressive MBA programs. Implications will be discussed.
INTRODUCTION
Business education should prepare students with the skills necessary to succeed in the
global market place. As US corporations continue to expand globally, the demand for cross-
culturally competent job candidates grows. The US needs professionals who are trained in the
languages and cultures of international trading partners. Developing an awareness of diverse
management styles, ethical values, and communication styles in the context of complex
international systems is necessary to succeed in cross-cultural ventures (Bisoux, 2005; Seybolt,
2004). Global awareness has emerged as one of the most attractive and marketable features of
an MBA program. In a survey of managers, "about half of the survey respondents said they are
seeking MBA graduates with more global experience"(Alsop, 2007).
METHODOLOGY
Using a population of the most popular MBA programs, as defined by internet hits on
FindMBA.com, a random sample of 25% (56 MBA programs) was selected, and explored to
determine the extent they incorporated international business into their curricula. According to
Pritzwalks (2007), there are 728 MBA programs in the US and 363 in Europe, and data was
collected approximately 56 or 5% of the schools listed. A larger sampling of the schools in both
the US and Europe were originally selected however many of the schools either did not list
sufficient website information or were not written in English. Data was collected on:
• Yearly tuition costs

• Program type (entire program/major/concentration)
• Global or international business classes (frequency; offered versus required
• Global/international emphasis in website public relations material
A global focus score was computed for each institution. Point values were assigned accordingly:
• Foreign language offerings (1 point)
• Foreign language requirements (10 points)
• Study abroad opportunities (3 points)
410
• Study abroad requirements (10 points)
• International internship opportunities (5 points)
• International internship requirements (10 points)
For a complete listing of the institutions analyzed, see Appendix 1.
GLOBAL MBA STRATEGIC POSITIONING
The level of commitment to preparing students to succeed in the global market varies
greatly among MBA programs. Tuition costs at business schools also vary greatly, although high
tuition costs do not necessarily indicate a greater global focus in curriculum and international
study opportunities. The MBA Global Strategies Model (GSM) identifies four global strategies:
high cost/low global focus, high cost/high global focus, low cost/low global focus and low
cost/high global focus. This following matrix reflects natural clusters of programs emerging from
a scatter diagram was generated which shows tuition on the y axis and the global focus score
(GFS) on the x axis. The scatter diagram revealed a concentration of data within a yearly tuition
range up to approximately $50,000 and global focus score of 30.
Figure I: Global Focus versus Cost
MBA Global Focus Model

$80,000
$70,000
$60,000
Yearly Tuition
$50,000
$40,000
HCLG HCHG
$30,000
$20,000
LCLG LCHG
$10,000
$0
0 10 20 30 40 50
Global Focus Score
High Cost (HC) = $22,000+ Number of Schools

Low Cost (LC) = up to $21,999 HCHG = 18
High Global (HG) = Global Focus Score of 17+ HCLG = 7
Low Global (LG) = Global Focus Score below 17 LCHG = 16
Based on these delineations, the following global focus was developed
411
FIGURE II: MBA Global Focus Model
High Cost
Parochial Elite
Low Global Focus High Global Focus
Economy Progressive
Low Cost
Parochial: High Cost / Low Global Focus

Parochial schools offer a limited global focus in their curriculum. They focus on local
and regional business needs. Generally students who consider these schools are more willing to
pay top dollar for an education from a well established school, but do not understand or value the
need to develop a global mindset through their education.
Seven or approximately 13% of the 56 business schools researched fall into this quadrant.
Yearly tuition costs range from $22,000 and up and the global focus scores are less than 17.
Within this group are the more traditional and conventional MBA programs such as Boston
College, Syracuse University and Vanderbilt University. The core competencies of these
business schools reflect a history of tradition and excellence, are well recognized in their regions,
and focus primarily on the US business structure. Like Boston College - Carroll School of
Management, their distinguishing factors are “a rigorous, challenging curriculum and an
extraordinary spirit of community reflected in a shared understanding of our core values.” Their
core values include promoting the highest standards of honesty and integrity to ensure that all
members of the community recognize the benefits of living those ideals and to guarantee that
academic performance is evaluated reliably and rewarded fairly. They strive to create an
environment where students can pursue the highest level of academic performance and personal
development for themselves and their community (Boston College webpage, 2009).
In order for these schools to remain competitive in the MBA market, they will need to
eventually update their programs to include a more global perspective. This is particularly true if
they expect to keep charging high prices for their programs.
Elite: High Cost / High Global Focus

The schools in this quadrant offer a variety of courses with a global perspective, study
abroad opportunities, foreign languages and international internships (see Appendix A). The
MBA programs are focused on providing a world class education so that, upon graduating, the
student will be better prepared for the global market. Students will have a greater understanding
of international business and the skills needed to be successful when working with different
cultures.
Eighteen or approximately 32% of the 56 business schools researched fall into the high
cost/high global focus (HCHG) quadrant. Yearly tuition costs range from $22,000 and up and the
global focus scores are greater than 16. Within this group are business schools like Yale,
Dartmouth, and ESADE in Spain that have a high commitment to preparing students for global
business. Like the Yale School of Management’s MBA mission to educate global leaders for
business and society, they “provide a rigorous training in fundamental skills as a foundation to
help students develop meaningful aspirations” and are “ infused with a restless ambition - a
412
willingness to think creatively and take risks in order to improve the world” (Yale School of
Management webpage, 2009).
The schools in this quadrant offer a variety of courses with a global perspective, study
abroad opportunities, foreign languages and international internships. These MBA programs are
focused on providing a world class education so that, upon graduating, the student will be better
prepared for the global market. Students will have a greater understanding of international
business and the skills needed to be successful when working with different cultures
Elite business schools maintain a very sustainable competitive advantage through
rigorous curriculum with a global perspective. This not only allows them to charge high prices
for their education, but also maintain their position in the market as an education leader.
However, the high prices can be a downfall, eliminating the opportunity for many candidates,
and making the repayment time not worth the education (see Appendix A).
Economy: Low Cost / Low Global Focus

Economy providers build basic, affordably priced and convenient MBA programs for a
culturally diverse student body. Often public institutions, their mission focuses on an accessible,
affordable, quality education. A majority of their students are non-traditional: transfers, working,
older, commuters. This type of program meets the needs and perceptions of the students and
community while making it difficult for other educational institutions to deliver the same quality
education at such an affordable price. However, the income and lifestyle limitations of non-
traditional students seriously constrain the feasibility of many international options, such as
overseas internships.
Fifteen (27%) of the 56 business schools fall into low cost/low global focus. Yearly
tuition costs are below $22,000 and the global focus scores are less than 17. The MBA programs
in this quadrant are economical and efficient. They tend to offer a consolidated, comprehensive,
standardized general program whose goal is to provide each student with a relatively uniform
educational experience involving a critical foundation of important skills and concepts.
Progressive: Low Cost / High Global Focus

Schools in this quadrant provide affordable, low cost programs with a high global focus
which gives them a sustainable competitive advantage over all other quadrants and SCSU. They
offer a variety of globally focused courses, study abroad opportunities, international internships,
and in some programs, an international concentration or an international MBA program.
Sixteen (28%) of the 56 business schools fall into the low cost/high global focus. Yearly
tuition costs are below $22,000 and their global focus scores are greater than 16. For example,
University of Texas at San Antonio (2007), a low cost, high global focus school (GFS=21), with
an MBA tuition of $7,268, excels in its international and exchange programs. They are
“dedicated to creating, applying and sharing knowledge that translates theory to practice;
combines rigor with relevance; and provides innovative solutions to global business challenges”.
IMPLICATIONS
All too often, business education in the US tends to respond to the global environment
with an ethnocentric perspective. Bikson and Law concluded that
413
According to both corporate and academic respondents, US colleges and
universities are turning out job candidates with high levels of domain knowledge.
But with respect to cross-cultural competence, job candidates are much less well
prepared. They are unlikely to understand the international dimensions of their
major academic field and many have not had exposure to other cultures and
languages. Compared to international students, our respondents believed US
students to be at serious competitive disadvantage in the global labor market.
(1994: 65-66)
US business schools have gotten away with this because US companies have tended to
adopt the attitude that international business is the same as intra-national business (Tung &
Miller, 1990; Volkert, 2007). By defining US program offerings as best practices, both US
universities and corporate recruiters expect mimetic isomorphism. This is epitomized by the fact
that while corporate recruiters stress the importance of global awareness, they primarily recruit
graduates from US schools with global training, not from comparable international schools
(Alsop, 2007). As international business becomes increasingly important, how long such
preferences will persist becomes increasingly problematic. The ethnocentric attitudes of US
businesses can threaten their ability to successfully compete in other countries.
While some US business schools have been slow to "go global," the same cannot be said
of Europe. A more holistic approach embracing international diversity towards business
education is already standard in Europe (Schorr, 2000). In 2007, Antunes & Thomassummarized
some of the distinct differences between European and US models of business education,
concluding that although some elements of European business schools are borrowed from the
homogeneous US-style model, European schools focus on reflective, integrative learning and
offer a greater sensitivity to international relations.
In part, European models have adapted to the institutional frameworks and the many
different languages, cultures and regulations that exist across Europe due to accreditation
standards with an explicit global focus. The primary European accreditation agency, Equis, has a
broad focus and clear examination of executive education and corporate linkages, with a formal
requirement to explain international linkages. The American equivalent, AACSB, does not
require any discussion of corporate or international linkages. AACSB simply accredits the
institutions range of degree and educational programs, the faculty inputs and curriculum designs
(Antunes & Thomas, 2007).
In conclusion, as more and more businesses expand globally, and both business and
educational institutions recognize the need to develop global strategies to manage the risk of
falling behind. Parochial and economic focused MBA programs will need to emulate the
strategies of the more globalized elite and progressive programs, or run the risk of obsolescence.
Wolfgang Wagner concluded:
Given the combination of diversity and economic vitality that characterizes the
European market place, and the resulting depth of practical experience in
operating across diverse cultures, European companies may be well placed to turn
diversity into advantage on the world stage. Europeans are less prone to ride
roughshod over local sensibilities and cultural values. European businesses have a
tradition of diversity in their inputs to decision making. Europe’s comparatively
inclusive and consensual approach to management is in stark contrast to the
414
narrower ‘professional’ decision making that historically been employed in
Anglo-American Businesses. The world is a diverse environment and so is
Europe. The experience and ability to manage and exploit this diversity are
increasingly critical capabilities. Across all industries and business model, this is
an area where European corporations have a competitive edge (2004).
REFERENCES
Alsop, Ronald. Sounding Off. Wall Street Journal. Retrieved 09/28/2007 from
http://online.wsj.com/article/SB118961228427325241.html, September 17 2007.
Antunes, D. & Thomas, H. The Competitive (Dis) Advantages of European
Business Schools. Long Range Planning. 40, 2007, 382-404.
Bikson, T.K. & Law, S.A. Global Preparedness and Human Resources:
Corporate and College Perspectives. Santa Monica: RAND, 1994.
Bisoux, T. “The extreme MBA makeover.” BizEd, 4(4), 2005, 27-33.
Pritzwalks Ltd.FiINDMBA: MBA Programs Worldwide. Retrieved on October 11, 2007 from
http://find-mba.com, 2007.
Schorr, J. L. A Generation of Business Foreign Languages. Retrieved on September 25, 2007,
from http://www.mgmt.purdue.edu/centers/ciber/publications/gbl/GBL%20-
%202000/2b.%20Schorr.doc, 2000.
Seybolt, J. “Managing in tumultuous times.” BizEd, 3(3), 2004, 39-43.
Tung, R. L. & Miller E. L. Managing in the twenty-first century. Management International
Review, 30(1), 5-18. ABI/INFORM database, 1990.
Volkert, L. Boise State Univ.’s executive MBA students learn to do
business across cultural divides. The Idaho Business Review, 1. ABI/INFORM database,
April 16 2007..
Wagner, W. A new perspective on Europe. European Business Forum. 17, 15. Retrieved on
September 25, 2007 from ABI/INFORM database, 2004.
415
Appendix A
MBA Research Data Results
416
Appendix A
MBA Research Data Results Continued
417
END USER ENGAGEMENT IN AN ANALYSIS AND DESIGN COURSE
Douglas E. Turner, University of West Georgia

dturner@westga.edu
Robert G. Gehling, Auburn University at Montgomery

bgehling@mail.aum.edu
ABSTRACT
The need of Management Information System (MIS) graduates to possess skills related to
information technology for competitive advantage is ever increasing. Students need to combine a
multitude of MIS skills with a real and practical understanding of actual business processes. The
lack of business experiences of traditional students substantiates the need for real project work.
With the continued introduction of new Information System technologies and applications, MIS
curriculums seem to have less flexibility to alter or modify courses to engage students in actual
business environments.
This paper explores the needs, merits, and application of engaging students in actual
business environments within an Analysis & Design (A&D) course. This course offers many
students the only opportunity to interact with business professional while utilizing their MIS
skills. As students develop and deliver a completed design project to actual business end users
they gain a sense of actual organizational culture and expectations.
INTRODUCTION
Given the obvious restrictions of a traditional three-semester hour academic course, it is

difficult to know when you are succeeding in delivering an A&D course in the proper
environment. According to John W. Satzinger (2002), if you assemble a group of 100
information systems a better idea of the potentials and the difficulties of teamwork in non-
classroom environments. Gibson, O’Reilly, and Hughes (2002) thought it essential that students
acquire high-quality business related technology experiences before emerging into the real world
of employment. But in contrast a survey of 647 A&D professors and instructors revealed that
only 335 reported the use of real organizations for student A&D projects (McLeod, 1996). This
paper will review the merit of using real blood and tissue companies for student analysis, and
discuss a workable methodology in defining the concepts of end user engagement and data
collection/development.
LITERATURE REVIEW
Discovery with a traditional literature review yielded a variety of perspectives and

information about what to include in the A&D course. Conversely, the literature review offered a
minimal amount of volume of specifically how to apply business end users to the A&D course
for students. In 1999 Misic and Russo published a study in the attempt to identify the most
significant and important of A&D components as viewed by educators and practitioners. It may
be note worthy to mention that these data were presumably gathered in late1996 to early 1997, as
revealed by the February 15, 1997, received date as shown on the publication. The results of
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their study revealed that defining new systems requirements and defining scope and objectives of
systems/projects, were both ranked first and second respectively by both educators and
practitioners. But the issue of preparing for and conducting interviews with users was ranked
third by practitioners and was rated ninth out of ten measured tasks by educators. This result is
disconcerting as it seems to indicate that educators (in 1997) placed a low priority on end user
engagement and development activities. Misic and Russo (1999) noted that based on a previous
study (Truath, Farwell, and Lee, 1993) universities were spending too much time on traditional
and formal systems development and insufficient time on application, data, and business
functions (1999). Similarly, Tastle and Russell (2003) surveyed educators about their
impressions of what an A&D course should contain. Their results suggest that approximately
half of the respondents dedicate less than 20% of their time on the concept of structured analysis;
10% of the respondents dedicated up to 50% of their available time to systems analysis
overview, and over 80% of the respondents devote 15% of their available time to the concepts of
project management. Tastle and Russell placed the concepts of Data Flow Diagrams (DFDs),
Data modeling concepts, Entity Relationship Diagramming (ERDs), Balancing DFDs,
data/process modeling skills, and a team based project as being definitely important to the
educators surveyed (from a cumulative list of ten concepts. In 2002 Ehie focused on the need of
MIS students to obtain skills related to information technology for competitive advantage, where
students combined MIS skills with an understanding of business processes. His position was that
employers are looking for individuals with a strong systems orientation and a good
understanding of an integrative business value-chain. Rajiv and Grupta (2002) performed an
empirical study of the perceptions of students taking A&D classes at one school across course
sections. They concluded that students were somewhat misinformed about the requirements and
capabilities of the course. The Rajiv and Grupta study utilized a course that included group work
on a real-life project that accounted for 35% of the students’ grade (2002). The students reported
that at the beginning of the course they viewed A&D as an MIS topic, but when queried at the
end of the term students deemed A&D relevant across diverse components of the business
environment.
Interest in the skill sets of an A&D analyst is still popular. As an example sample the
University of California offers a certificate program in Computer Information Systems: Analysis,
Design, and Management. The focal point with a program of this type seems to be the ability to
extract and properly document the needs of an organization, with little attention paid to the case
tool being utilized (Berkeley, 2003). This particular program is completed in 30 student contact
hours. The fact that this course is offered to non-traditional students seems to support the idea
that these students may have previously established some degree of communication and data
gathering skills with actual end users. Other for profit organizations (a mixture of the areas one
and two from above) offer training in the areas of Object-Oriented A&D (OOAD) to teach the
specific use of related technologies such as Unified Modeling Language (UML) (Objective
Engineering, Inc., 2003 Tastle and Russell (2003) reported from their study of IS World
members and Information Systems Education Conference past participants that no agreement
could be reached with regard to the teaching of OO.
IMPLEMENTING END USER ENGAGEMENT
The objective of this course was to create a consultant/client environment, crossing that
“bridge of reality” as discussed by Gagnon (1986). To utilize end user engagements in the course
419
a supportive syllabus was needed. The syllabus designed explicitly states that from the outset
that there are components of this course that are far less structured than what are normally
presented in most courses, this is especially true in some areas relating to the project. The
primary objectives of this syllabus were to establish a blueprint of data gathering and modeling
for the students. Beyond the traditional information of about the course specific issues were
included. These topics included group member selection and maintenance, management of
project milestones, and project deliverables and presentation. The issue of utilizing student work
teams is that of group composition which has been discussed by many authors (Huxham and
Land, 2000; Honey and Mumford, 1986; Standing, 1995). It seems that three distinct methods
are available to assign students; self-selection, allocation by arbitrary sorting, or engineering by
perceived skills. With the short amount of time available from first meeting the students to
issuing task assignments I have utilized arbitrary sorting. A departure from this method to an
engineered solution is made when it is apparent that some groups are in equably stronger skilled
then the rest.
Chapman and Van Auken (2201) discussed the potential drawbacks of group work. For
example the fear of individual student grade impact by the performance of others. To help
address this concern peer evaluations are employed where an individual student final grade could
be reduced as much as two letter grades. Students submit these evaluations discretely at the end
of the term, and no other data pertaining to the evaluations are released to an individual student
except for their individual numerical group project grade. The syllabus explicitly defines the
formulas for determining the influence of peer evaluations.
As peer reviews are not available until after the completion of the course they give little
control to the group during the project life cycle. To stimulate participation from the students and
alleviate the problem of after the fact peer evaluations a student may be “released” from a group
relatively early in the term. The syllabus states “as students will be working as a team,
sometimes a student is perceived as not producing their fair share. The student discharge policy
was allowed to be invoked on only one specific day early during the term. On the release date
any member can be collectively removed from the group by typing a formal statement of release.
While it is emphasis that a mere difference in lifestyles and perceptions may cause group tension,
students rarely utilized the discharge mechanism.
There are three primary deliverables/components of the final project; an executive
summary for presentation to the end user, a project CD containing the current and proposed DFD
model for the Professor, and an end user presentation. In over 25% of the projects to date the
presentations have take place at the end user location.
Student groups establish a short list of potential organizational candidates and determine
a method for positive initial contact of the selected business. The basic script offered to students
is as follows “We wish to use you business/organization to create a data flow model to complete
our A&D course requirement. The process we will use is to follow the data flows through your
organization. Even though we do not need any specific information about your customers,
suppliers, or processes we can offer a non-disclosure agreement for you if you think it necessary.
We would like to quietly spend time with your department personnel and document the flow of
data. We do this by following the forms and data screens you use”. Other student groups have
completed analyses of similar sized organizations in about five visits. On each visit we will
supply you with a short list of outstanding questions from our last visit and move down through
your organization by levels. At the end of the project we will supply you with a CD documenting
your processes, and a short presentation of technology solutions to problems and opportunities
420
we find. If at all possible we would like to leave our Professor’s business card and have him call
you at your convenience. We would certainly appreciate your participation.” The Professor then
completes a follow up call to the client to solidify the agreement and further establish a baseline
of specific rules and expectations.
The concept of non-intrusive interviewing, centers on the problem of students attempting
to gather data relevant to populating data-stores and mass-data logs. Clients often exhibit a
tendency to offer data from the perspective of who does what within the organization. The
students are advised to ask to watch the paper trail at a given function, and secure blank copies of
the forms or documents used. Students are told to reassure the end-users that no propriety
information about processes or end user clients is needed. We ask the end user to generate mock
or highlighted fields to capture the required process model.
CONCLUSION
Technical skill building is very important to organizations. It would be difficult for MIS
employees to work in one software environment when all of their experience and training resides
in other surroundings. In example, being only trained in PeopleSoft why attempting to
beproficient in Oracle or SAP. But for our students who have no previous exposure to any
business environments beyond that of basic labor, the issue of experiencing first hand the actual
role of a Systems Analysis seems to be both challenging to the student and paramount to their
future success.
This paper is offered as a single perspective of our use of actual end users for an A&D
course. Our objective is to offer the most realistic A&D course project possible. This includes
the student development of the client, the determination of data requirements, the non-intrusive
collection of data, and the completion of a complete business model. Each semester course yields
approximately four to six A&D project teams. The majority of the project contacts have been
generated by the students themselves, but we have completed over a dozen A&D projects in
support of specific needs of our regional small business development office in the past three
years.
There seems to be strong support from practitioners and many in academics for real life
experiences for students. In our curriculum we discovered that the A&D project class was the
first true business experience our students engaged in. Even though a traditional lecture and test
course may be less demanding on everyone concerned, it is doubtful that the experience could be
as rich as actual business consulting.
REFERENCES
Berkeley. Systems Analysis: Analyst as Internal Consultant 2003 Computer Information

Systems: Analysis, Design, and Management Course Catalog, University of California -
Berkeley, Extension Services, http://www.unex.berkeley.edu/cat/121194.html, 2003.
Chapman, K. and Van Auken, S. Creating Positive Group Project Experiences: An Examination
of the Role of the Instructor on Students' Perceptions of Group Projects. Journal of
Marketing Education, (23)2, 2001, 117-127.
Dunne, E. and Rawlins, M. Bridging the Gap Between Industry and Higher Education: Training
Academics to Promote Student Teamwork. Innovations in Education & Training
International, (37)4, 2000, 361-371.
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Ehie, I. C.Developing a Management Information Systems (MIS) Curriculum: Perspectives
From MIS Practitioners. Journal of Education for Business, (77)3, 2002, 151-158.
Ellen, N. And West, J. Classroom Management of Project Management: A Review of
Approaches to Managing a Student’s Information System Project Development. Journal
of American Academy of Business, (3)12, 2003, 93 -98.
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(19)2, 1986, 453-471.
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of U.S. Institutions. Journal of Education for Business, 74(5), 1999, 289-295.
Honey, P. and Mumford, A. The Manual of Learning Styles. Revised (2nd ed), Mumford:
Maidenhead, 1986.
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Random? Innovations in Education & Training International, (37)1, 2000, 17-22.
Kirs, Peeter, J. A Role-playing to the Instruction of Information Systems Analysis and Design
Courses. Journal of Education for Business, 69(6), 1994, 317-326.
Laudon, K. C., Laudon, J. P. Management Information Systems (5th ed.). Englewood Cliffs, NJ:
Prentice Hall, 1998 .
Lee, D. M., Truath, E.M., & Farwell, D. Critical Skills and Knowledge Requirements of IS
Professionals. MIS Quarterly, (19)3, 1995, 313-341.
McLeod, R., Jr. Comparing Undergraduate Courses in Systems Analysis and Design,
Communications of the ACM, (39)5, 1996,113-121.
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Journal of Systems and Software, 45(3), 197-202.
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Language. Analysis and Design Course Catalog,
http://www.oeng.com/ood/oodcourses.htm, 2003.
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Exploratory Study. Journal of End User Computing, 14(3), 2002, 16-31.
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Information Systems Professionals. New York: Prentice-Hall/MacMillan, 1994.
Richter, C. Designing Flexible Object-Oriented Systems with UML. New York: Macmillan
Technical Publishing, 1999.
Satzinger, J. W. Moving the Analysis and Design Course into the Future. Tech Trends - Industry
Articles, http://www.course.com/techtrends /systems_analysis_042000.cfm, 2002.
Tastle, W. J., and Russell, J. Analysis and design: Assessing Actual and Desired Course
Content. Journal of Information Systems Education, (14)1, 2003, 77-98.
Truath, E., Farwell, D., and Lee, D. M. The “IS” Expectation Gap: Industry Expectations versus
Academic Preparations. MIS Quarterly, 17(3), 1993, 293-303.
422
A VOICE OF ONE’S OWN:WRITING AS A BUSINESS
EDUCATION POWER TOOL

heinh1@southernct.edu
Sarah E. Page, Southern Connecticut State University

pages1@southernct.edu
ABSTRACT
As stakeholders clamor for more accountability in higher education, old passive learning
teaching pedagogies are insufficient. Both in academia and in life, finding and expressing one's
authentic personal voice is not only linked with personal fulfillment and organizational
eff3ectiveness, it also promotes the internalization and application of course content, integrative
learning, retention and transfer. Ironically technologic media, traditionally devalued as cold and
impersonal, are becoming the medium of choice for personal communication of authentic voice
by the millennial generation. Implications are discussed.
THE MILLENNIAL CHALLENGE
While universities claim to be dedicated to developing the mind, intellect and character of
students, the public remains unconvinced. These assertions by institutions of higher education
command more public suspicion than respect (Finkelstein, 2003; Reardon & Ramaley, 1997).
Critics allege that the curriculum and classroom pedagogies found on the university scene serve
faculty interests more than student learning agendas (Smith, 2004). Due to inconsistency in
learning outcomes, parents and students are rejecting the “learning for the sake of learning”
mantra in favor of specific explanations on what kind of personal development and career
enhancement will result from their investments in a college education (Ferren & Kinch, 2003,
Moskal, Ellis & Keon. 2008). Given the costs involved, critics warn:
In the first years of the new century, what many recall as the golden age of higher
education has been tarnished by spiraling costs, declining standards, and an erosion of
ethical values. The academic system that served us so well for so long is growing
outworn, outmoded, and for many students and their families, outlandishly expensive.
Higher education itself has been placed on probation. (Elfin, 2003, p. 9)
Communication - A Core Learning Outcome
A Wall Street Journal poll of corporate recruiters (Safon, 2007), Navarro's (2008) review
of a decade of prescriptive literature on the ideal business curriculum and Moskal, Ellis & Keon's
(2008) all list communication skills as a top priority for a quality curriculum. “Concise, clear and
accurate writing is vital to the success of your career and to your company’s productivity . . .
Good writing skills will sell you and your ideas" (Murdock, 2000:15). CEO John Miller notes,
‘Employees notice who can write and communicate well and will trust those who can with
important jobs” (quoted in Murdock, 2000:15). Bosses hate to take valuable time to edit mistakes
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in important documents subordinates prepare. Those with superior writing ability earn, on
average, more than three times more income than those with poor writing skills (Fisher, 1998).
Experts agree that in business, one has less than a minute to prove their ideas are worth paying
attention to whether they are written or verbal communication. This learning outcome, however,
remains all too often unrealized. Recruiters consistently complain that only 25% of graduates
from business schools write well (Page et. al., 2008). Poor writing and speaking virtually
guarantees that many potentially great ideas will be ignored, and undermines the ability of
employees to effectively share their "voice."
VOICE AS A MANAGEMENT KEY
The importance of “voice” in both teaching and organizational contexts has long been
recognized. Its perceived importance is likely to continue to increase, given the press generated
when Stephen R. Covey, author of the immensely popular “Seven Habits of Highly Effective
People” (1989), focused the sequel “The 8th Habit,” on developing voice, and encouraging others
to find their voice. He concluded that voice is not as much an 8th habit as a key dimension of all
the other seven habits. Voice is particularly critical for organizational effectiveness because it is
often discouraged, neglected or overlooked (Covey, 2004). In professional contexts, expressing
voice offers the organizations that encourage it important feedback and information which is
often otherwise lost due to self-censorship or exit (Gorden, 1988; Krefting & Powers, 1998).
In management literature, voice is broadly defined as any feedback of discretionary
opinions or information by individuals. Voice includes all voluntary communications employees
are not required to give as part of the standard operating routine of their jobs (Hirschman, 1970;
Page et. al., 2008). Subsequent researchers linked organizational effectiveness and efficiency
with voice (Covey, 2004). Voice is associated with a broad range of positive, functional,
organizational consequences, including increased creativity, motivation, and self-actualization,
particularly important in the rapidly evolving markets of the new millennium (Zhou & George,
2001). In the workplace, voice is linked with employee satisfaction, retention and commitment
(Gorden, 1988; Tuten & Gray, 2002). Firms that effectively encourage voice enjoy improved
critical feedback and quality control information, which drives continuous improvement efforts
and organizational success (Covey, 2004; Graham & Keeley, 1992; Hirschman, 1970).
O’Neill and Lenn (1995: 32) conclude: “Voice, properly heard within the organization, is
the behavioral choice that affords the organization the best chance for adaptation.” Confronted
with an internal or external mandate for change, employees are more likely to feel ownership,
take initiative, and contribute discretionary effort to successfully adapt when (a) they give voice
to authentic self-expression, (b) they share even when others may disagree with them, and (c)
they are meaningfully involved in decision making processes which encourage open sharing of
diverse feedback (Covey, 2004; Hirschman, 1970; Page et. al., 2008, Zhou & George, 2001).
Expressing voice can be regarded as a critical management skill, which should be
incorporated as a goal of an undergraduate management curriculum. Beyond effectiveness, the
opportunity to express voice has become defined as student right (National Council of Teachers
of English, 1974). Further, some beneficial learning outcomes tend to be achieved only when
voice is encouraged and expressed (Gorden, 1988). Expressing voice through writing helps
students better understand themselves and retain what they have learned (Morrell, 2002).
The gold standard in higher education is the transfer of learning from college to life, and
the transformation of the learner. Mezirow pioneered the concept of transformational learning,
424
arguing that while an individual's "meaning schemes and perspectives" were passively developed
in childhood, they evolve through adult experiences. Learning environments featuring rational
discourse and critical reflection can act as catalysts for transformation (Mezirow, 1997). The
National Association of Student Personnel Administrators and the American College Personnel
Association explain in a joint report: “In the transformative educational paradigm, the purpose of
educational involvement is the evolution of multidimensional identity, including but not limited
to cognitive, affective, behavioral, and spiritual development” (Keeling, 2004: 9). This requires
that learners do more than just memorize the subjects, and forget them after the semester is over.
It means the topics must be relevant and applicable for the learner’s life, so they are internalized,
applied and retained over time (AACU, 2002; Mezirow, 1991; Miller & Leskes, 2005).
Authentic Voice
Of particular importance is encouraging the expression of voice in a personal context,

which is sometimes described as one’s “authentic” or “distinctive” voice (UMUC Writing
Center, 2002). This definition is captured by Jessica Morrell (2002):
Voice is the sound of ourselves on the page. Arthur Plotnik says that our voice should be
"in harmony with our roots." Voice is a reflection of how we see the world. Voice is a
substantive presence; when you're reading effective fiction, voice lingers and you're left
with the sense that you've met the writer behind the characters.
Voice underlies the "wisdom skills" of professional self-reflection and emotional

intelligence often idealized, but seldom achieved in college. The challenge faced by business
educators today is how to teach their students to develop an authentic voice. Teaching voice is
essential for the much broader challenge of preparing students to become “intentional learners
who can adapt to new environments, integrate knowledge from different sources, and continue
learning throughout their lives” (AACU, 2002: xi).
For this goal to be achieved, educators must first learn how to speak and write in the
multimodal tongues of the modern world before they can effectively communicate the
authenticity of voice to their students. “Business schools need to develop a different way of
shaping the world grounded in a different language and a new narrative . . ,” (Starkey and
Tempest 2008: 576). Unfortunately, business schools are often interdisciplinary backwaters,
where the trend towards the professionalization of faculty into discrete academic disciplines with
narrow specializations has intensified (Reardon & Ramaley, 1997; Safon, 2007).
In this sense, authentic voice requires an adequate vocabulary far beyond management
science -- the passion, values and principles more characteristic of the liberal arts. The chief aim
of this language would be to foster critical inquiry that is marked by creativity and innovation,
not the “surface learning” characterized by the rote repetition of facts (Smith and Colby 2007:
206). Starkey and Tempest suggest that both empathy and imagination would have essential roles
in this new narrative, stating,
What we are suggesting is that we need to reflect upon our history and its design legacy
and to consider a new design challenge—to reconfigure ourselves to become more
socially engaged by deepening our engagement with the social sciences—with a stronger
425
emphasis on the social—particularly, with the arts and humanities to develop an image of
management better fit for addressing the challenges of the modern world. (2008: 578).
Techno-voice
This authentic voice must be grounded in the communication media of choice of the
millennial generation. As the evolution of technology accelerates, the “tools of literacy,” and the
“nature of texts, of language, of literacy itself is undergoing crucial transformations” (Constanzo
1994: 11). This new narrative language cannot be assumed to be a Luddite regression from the
technical aspects of academia, as it has in the past. While previous generations may have
regarded technologic communication media, such as email and the Internet, to be cold and
impersonal, the reverse is true for the millennial generation, who has openly adopted it as a
forum for their innermost thoughts and dreams (Beebe, Beebe& Ivy, 2009). Cynthia Selfe states,
“For teachers, literacy instruction is now inextricably linked with technology. Authenticity
requires the utilization of all methods—online and text-based, empathetic and imaginative—
promoting literacy and the development of an authentic voice in “a world where communication
between individuals and groups is both increasingly cross-cultural and digital,” (Selfe &
Takayoshi ,2007: 2). In a “knowledge-based economy,” it is imperative that students become
“nimble thinkers and creative problem solvers” who know not only how to find information, but
also how to interpret it in a coherent framework. (AACU 2002: 24). These skills are increasingly
essential components of business education as the more desirable, high-salary careers become
restricted to industrial sectors that center on advanced technologies, information services, and
professions such as accounting, healthcare, and law.
CONCLUSION
In an era where most major stakeholders are demanding greater accountability for student
learning outcomes, few pedagogies promote the integration, internalization and retention of
learning as effectively as personalized writing exercises. Ironically the most personal and
intimate expressions of the soul now flow through technologic communications media
previously regarded as relatively cold and impersonal. However, new technologies alone are
insufficient -- while they encourage a more expansive literacy, they are no guarantee of increased
accessibility and enhanced communicative ability. In fact, the reverse can be true. Starkey and
Tempest conclude: “In the search for technical competence, which has, in our current business
crisis, proved misleading, the business school community has lost their ability to think critically
about what they do” (2008: 576). The dilemma faced by business educators today is how to
bridge the “digital divide” and unify technology and the humanities in a coherent pedagogy
(Baron 2009: xiv). Ultimately, the new narrative engendered by this combined pedagogical
approach would enable more business students to develop a valid voice of their own.
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CREATING A FIRST HYBRID COURSE: THE EXPERIENCES OF TWO
INSTRUCTORS AND THEIR ADVICE TO COLLEAGUES
Craig L. Reeder, Florida Agricultural and Mechanical University

craig.reeder@famu.edu
Angela J. Murphy, Florida Agricultural and Mechanical University

ajmurphy7@aol.com
ABSTRACT
The focus of this descriptive article is the process of creating and teaching online, hybrid
courses. It addresses various issues the author and the co-author encountered during the creation
of their hybrid courses, and their experiences teaching the courses for the first time. Through the
prism of eight lessons learned, they offer practical tips on how to make online instruction more
effective, and discuss problems that other instructors may encounter. The authors suggest that
future research should integrate the student and administrative perspectives of distance learning
into this general topic. Additionally, they offer ideas for empirical areas of research which could
further advance the state of art of online instruction.
INTRODUCTION
This descriptive study offers distilled insights associated with creating hybrid, distance
learning financial accounting and organizational behavior courses for undergraduates. These
insights or lessons learned identify the key considerations of designing these courses in an effort
to shorten the learning curve of other instructors, who wish to construct their own distance
learning courses, particularly hybrids. The remainder of this paper contains a literature review of
relevant distance learning research, an overview of the hybrid course structures used by the
authors, discussion of the eight lessons learned from teaching hybrid courses, and a conclusion.
LITERATURE REVIEW
Much of the distance learning research is empirical in nature and refers to the effect of
assignments, formats, and pedagogy on student satisfaction, learning or performance (Arbaugh,
2000, 2001 & 2005; Arbaugh & Duray, 2002; Bryant, Kahle & Schafer, 2005). There is also a
stream of research that examines obstacles, (e.g., teacher workload, administrative support and
resources, faculty training and student attrition), and compares the teacher workload of
traditional and distance learning formats (Bryant, Kahle & Schafer, 2005; Friday, Friday-Stroud,
Green & Hill, 2006; Lim, Chen, Chen & Ryder, 2008; Li & Irby, 2008; Mupingo & Maugham,
2008; Pallof & Pratt, 1999; Tomei, 2004).
After reviewing the research on the broad context of distance learning, it is important to
explore descriptive case studies to assist help with designing e-learning courses. Bryant, Kahle
and Schafer’s (2005) review of the distance learning literature highlights the paucity of
descriptive accounting case studies that address the learning curve associated with teaching
distance learning courses. Dunbar (2004) is exception to this gap; she offers a descriptive study
of her experience teaching an online accounting course. However, she focuses more on the
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various software, courseware and student experiences, more than her own perspective as an
instructor. As it relates to descriptive case studies on the learning curve associated with creating
and teaching online organizational behavior (OB) courses, there is a little available, particularly
at an undergraduate level. Aycock et al (2002) is an exception; their article is an amalgamation
of 17 professors’ perspectives on teaching hybrid, distance-learning classes for the first time.
While it is informative, several of the lessons learned are not teaching oriented, (e.g., popularity
of the hybrid course flexibility).
As it specifically relates to designing hybrid course structures, research indicates that
there is no standard number of F2F meetings in hybrid, distance-learning courses. The number of
class meetings can be as few as a single class meeting to about half of the classes (Aycock et al,
2002; Driscoll, 2002). Some considerations for the number of class meetings are teaching styles,
course content, and courseware/technology support (Aycock et al, 2002; Martyn, 2003; Wall &
Ahmed, 2007). Murden and Falk (2007) begin to address the issue of elements or strategies to
consider when teaching a hybrid course, (i.e., training, student workload expectations, flexibility,
and assessment). While informative, they lack descriptive detail on why these items were
important based on a direct teaching experience. Martyn (2003) describes a model for hybrid,
distance learning. It includes a F2F class at the beginning of the semester, a set of activities and
associated technology used throughout the semester, and a F2F meeting at the end of the course.
While the authors found this model and the principles to be informative, the model was framed
around adult learners, not the traditionally aged college students at the authors’ university. In
addition, the authors knew they wanted to pursue more frequent class meetings than this model
illustrates.
OVERVIEW OF HYBRID COURSE STRUCTURES
For background information about the authors’ experiences, it is useful to outline the
general structure of the two online courses. The author designed the financial accounting course
as a hybrid online course; it included one evening classroom session per month, with the rest of
the instructional content delivered asynchronously online. The course platform consisted of two
websites, Blackboard and MyAccountingLab. The main class website was Blackboard, which is
the normal course management platform used by the authors’ school and supported by the
school’s Office of Instructional Technology. This site, Blackboard, directed students to content,
assignments and tests in a clearly articulated sequence. MyAccountingLab is an online resource
provided by Pearson Education, the publisher of the textbook; it provided online homework,
online testing, e-text, and other learning resources.
The co-author’s OB course was a hybrid, online course which met F2F for two weeks and
then went virtual for two weeks. The initial two weeks of OB focused on practicing the use of
Blackboard courseware, building rapport, forming learning groups, and covering the introductory
course material. The next two weeks were asynchronous and included reading assignments,
review questions, video lectures, discussion boards and quizzes. The rationales for the OB hybrid
course meeting more frequently than the accounting course were the interpersonal emphasis of
the course material, co-author’s comfort with teaching online and the maturity of the students.
These rationales are consistent with those suggested in the hybrid distance learning literature
(Aycock et al, 2002; Martyn, 2003; Wall & Ahmed, 2007).
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EIGHT LESSONS LEARNED
Lesson 1: Emphasize a Personal Relationship Between Instructor and Students

Bryant, Kahle and Schafer (2005) stated that “establishing empathy between learner and
teacher will increase student’s learning pleasure. When the learner believes that the teacher is
genuinely interested in his or her learning, the learner’s motivations to succeed is heightened”
(p. 260). This is true for all teaching situations, but it is even more critical when there is a
greater physical separation between the students and the teacher. As noted by Desai, Hart and
Richards (2008), “for distance education to be successful, high levels of interaction typically
need to be present for learners to have positive attitudes and greater satisfaction” (p. 328). This
is essential to keep students engaged, and to prevent them from feeling isolated or on their own.
As a preparatory step, the authors spoke with people whom were teaching or taking
online courses. One main point that was repeatedly given was to emphasize a personal
relationship between instructors and the students. If students feel disconnected from instructors,
it will reduce their level of engagement. Although they may not have face-to-face engagement
with their instructors on a regular basis, students need to feel the personal presence of the
instructors as motivating, mentoring, monitoring, and caring partners in the learning process.
The authors dealt with this issue by producing lecture video-files. They found this to be
quite a useful exercise because it forced them to revise the usual lecture notes, distill the content
down to the most essential points, and to deliver the information in the most efficient way. The
authors’ University Office of Instructional Technology had facilities to videotape these short
lectures, (six to 10 minutes per clip); it then uploaded them to Screencast, a web-hosting site
which the University subscribes to. The end result was one web link per clip, which was inserted
into the class website. In the videos, the authors speak in a conversational tone to create a more
personal effect.
Another approach to personalizing the course is to use discussion boards, email and the
gradebook function. At the end of week one, the author sent an individual email to every student,
(i.e., not a bulk mailing, but separate emails), to check on each student’s progress, to remind
them of where they were in the class, and ask if they had any problems. The author wanted to
make sure that students knew they were available to their students, and that they were personally
involved with the students’ learning progress. The Blackboard grade book function provides the
instructors and students immediate access to scores. The coauthor periodically used this function
throughout the course to commend students who did something particularly well, (e.g., turned in
a very thorough response to a question), as well as, to follow up with students who were
academically struggling, (e.g., missing assignments), to find out the source of their issue and to
offer assistance.
Lesson 2: Provide Explicit Instructions

As noted by Desai, Hart and Richards (2008) “Successful e-learning programs provide
structure in the form of timelines and goals for potential learners….These designs include
structured course content, weekly activities….” (p. 332). Materials should be as self-explanatory
and explicit as possible, with regards to what students are expected to do, and when they are
expected to do it, otherwise there is the risk of some students getting confused and falling
behind. The author accomplished this objective by setting up a main section of the class website
labeled “assignments”. The course was divided into weekly assignments, listed chronologically
as “Week 1, Week 2,” etc. Each assignment should show exact dates, to avoid any confusion,
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especially in the event that students might be taking multiple courses that utilized weekly
assignments in different date sequences.
Lesson 3: Maximize the Use of Visual Materials

Anecdotal conversations with professionals working in business organizations have led
the authors to believe that visual media now play a much larger part in the learning environment,
not only for college students, but also for adults who enroll in training programs. For this reason,
the authors placed a large emphasis on lecture videos and screen capture files.
To create lecture videos, normal lectures were condensed down to two mini-lectures per
chapter, each running from eight to 10 minutes in length. The University Office of Instructional
Technology provided facilities and a producer to shoot high quality video files. Those files were
then posted on Screencast, a hosting site which the university subscribes to. From that point, the
files could be accessed by a simple hyperlink inserted into the class website. For instructors that
do not have facilities of this kind, simple video files can be made with a digital camera and
posted on YouTube for students to access.
Feedback from students on these lecture videos has been very positive, so much so that
the authors plan to make them available to students in the traditional classroom courses as well.
Several factors contribute to the effectiveness of these video files. First of all they are short, so
the student does not feel he or she is committing to a long time period when beginning the
lecture. As pointed out by Grubbs (2000), content should be “... ‘chunkable’ into 5-to-10 minute
segments that allow users to stay on task. They have to be able to get in and get out,” (p. 5).
Secondly, they are personal in style. The authors are speaking directly to their students in the
same way as in a classroom. The second type of visual media used was a Camtasia file.
Camtasia is a form of screen capture software. Using Camtasia, the author placed an Excel
worksheet on the computer screen and went through certain problems step by step, giving vocal
instructions on how to solve the problems. Camtasia then converts the data into a video file
which is posted on Screencast, in the same way as the lecture videos. These files are referred to
as “tutorials” in the course website, and students have given very positive feedback on them. As
with the lecture videos, they are personal in style. As the student watches each problem being
completed on the spreadsheet, he or she will hear the instructor’s voice explaining the problem as
if the instructor were standing right behind the student while he or she is working.
Lesson 4: Obtain Frequent Feedback from Students

Since this was the first online course for both authors, it was absolutely critical to get as
much feedback from the students as possible on the design of the course, the means of delivery,
and technological problems. One approach was to set up a separate discussion board forum to
allow students to provide feedback on the course structure. This forum was open all through the
semester, but unfortunately, no students posted any comments on it. The lesson learned from this
experience is that if a task is not linked to a deadline or a point score, there will probably be
minimal response. Later in the term, one of the required weekly forums was specifically
designated for this purpose. Because the weekly forums were both required and scored, this
exercise did receive substantial detailed feedback. The authors expected much negative
feedback, but in fact it was mostly positive. In this instance, the students reported favorable
reactions to the lecture videos and tutorial files on Blackboard.
Another approach was to require follow up from students. The coauthor had a series of
qualitative team assignments; she provided descriptive feedback to the groups. If needed, she
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mandated that the teams follow up during her office hours or through email to better assess their
progress or understanding of the assignment. These opportunities gave her an indication of which
teams were doing well, and any developmental areas to address in the next F2F classes. Lamer
(2009) suggests that engagement associated with timely feedback can serve to decrease the
isolation and high attrition rates, sometimes associated with distance learning classes.
Lesson 5: Clarify Responsibility for Students’ Technical Problems

It should be axiomatic that with online instruction, students are wholly responsible for
their own computer equipment and internet connections. But in the authors’ experience, this
issue came up frequently. Most commonly, it was in cases where the students’ systems failed
when assignments were due. From these interactions, two main points emerged: students need to
understand from the beginning of the course that the instructors cannot take responsibility for
their systems issues, and also that the instructors have to consider making occasional
accommodations when warranted.
The authors found that students often blamed the courseware, (e.g., Blackboard), if they
had technical problems completing assignments, not their computers, software or internet
providers. The authors pointed out that everyone has systems problems from time to time, so it is
imperative not to leave critical assignments to the last minute. At the same time, there are times
that instructors should consider making adjustments for special circumstances. There were
certain situations when the authors found it appropriate, due to documented technical issues or
courseware failure, to re-open an assignment for one or two students, or to extend a deadline for
a test or discussion board question.
Lesson 6: Use Discussion Boards Effectively

Based on their experience, the authors advise other instructors to consider what they do
with asynchronous discussion boards. Initially, the authors hoped to use them in a twofold
manner: to make students think critically about certain business-related topics, such as business
ethics and investments, and to develop the students’ communication skills. At first, they had a
rather complex rubric for scoring the students’ comments in the areas of communication skills
and critical thinking. After a few weeks into the course, it became apparent that the original
objectives for the discussion boards were too ambitious for the students.
Some students had poor communication skills; a number of them were not native English
speakers. Although the rubric and scoring formulas were meant to guide students toward higher
levels of communication, students were simply responding to the question or topic
spontaneously. They were not attempting to stretch their communications skills or critical
thinking skills to higher levels of analysis or judgment. It became apparent that the discussion
board was not an effective venue or methodology for teaching those kinds of skills, and the
authors reevaluated what they were trying to accomplish with discussion boards. They redirected
the discussion board activities toward two key objectives: engaging students in the course
material, and making them feel connected with the instructors and fellow students.
Another lesson learned about discussion boards was how to effectively choose and frame
the questions and topics. The authors quickly noticed that it was a mistake to ask students to
define or describe something, such as internal control. It was apparent that these kinds of
questions resulted in “cut and paste” responses, and that no actual learning was taking place.
The authors then shifted to questions that focused on students’ own personal experiences, or their
own opinions. Students were asked what they thought about outsourcing of jobs, or whether they
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had seen businesses employ internal control procedures in their own personal work experience.
The discussion board was also employed as a means to allow students to discuss their personal
study habits and their methods of time management. The authors have observed that students
learn more readily from their peers about matters like this, so rather than have the instructors
preach about good study habits, the students were given an opportunity to share their ideas
among themselves.
Issue 7: Consider the Balance of Online Exams versus Proctored Exams

When structuring an online course, instructors should carefully consider the tradeoffs
between online exams and proctored or classroom exams. The former offer more convenience
with less control, and the latter provide less flexibility with more control. The author had three
unproctored online exams during the semester. In each case, the student had one hour of time,
and one attempt to complete the test. They could take the test anytime within a 48-hour window,
to make it convenient for students with working schedules, family responsibilities or
transportation issues. However, there was no control or assurance that each student was actually
taking the test himself or herself, or whether each was getting help while testing. To address this
issue, the author assigned a lower weighting to the online exam scores, and then administered
one proctored “high stakes” exam at the end of the semester. Each student presented photo
identification when entering the room, and the test was monitored by the author. The coauthor
initially gave two opportunities to take unproctored, timed quizzes with answer hints and one
time to take proctored exams with considerably longer time limits. The proctored scores were
vastly lower than the unproctored. Based on her analysis of the unproctored quiz attempts and
anecdotal evidence from students, one source of the gap was that students were not taking time
to master the material. They were first taking the quiz without much preparation and doing
poorly. After reviewing the hints, quiz questions, and speedreading the text, they would retake
the quiz and receive a higher score, but they did not substantially retain the material for the later
exam. The coauthor decided to only allow one attempt to take unproctored quizzes and
eliminated answer hints; she posted answers in the next F2F class. She also decided to give one
proctored quiz before a proctored exam, so that students could better gauge their performance
and prepare for the unproctored exam. These changes more clearly communicated to students the
importance of mastering the material.
Lesson 8: Choosing between Virtual Office Hours and F2F Office Hours
Both authors offered virtual office hours for their courses. The author told students that
he would be available at his computer Sunday nights from 8pm to 9pm, and that if they contacted
the author by email, he would immediately reply. However, during the first few weeks of the
course, the author received no contacts at all during virtual office hours, so he cancelled them.
Instead, the author told students that if they needed help, they should contact him by email and
he would arrange a time to communicate by email or phone. However, he always made sure to
monitor incoming email several times a day so there would be no significant lag time in response
to their students’ questions. The author also found that many students in the class wanted to
make use of his F2F office hours associated with his F2F or traditional courses. The coauthor
found that few of her students regularly utilized virtual office hours, but she did continue to hold
them because she found them to be an interactive way to alert her to possible problems with
Blackboard or assignments.
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CONCLUSION
The eight lessons learned are important findings from the authors experience teaching
hybrid accounting and organizational behavior courses to undergraduates. The authors hope that
their insights can be useful to other instructors when faced with creating distance-learning
courses. At the same time, the authors realize that their experiences are not empirically based, so
it is not possible to meaningfully generalize about online instruction. However, that was not the
purpose of this paper. The authors see this work as one study out of a comprehensive portfolio of
research on distance learning that professors, new to teaching online, should have available.
As the authors look forward, there are interesting options to build upon this work. The
addition of an empirical dimension, (e.g., workload, satisfaction, learning outcomes), would
increase the possibility of generalization. While the lessons are informative, this paper primarily
concentrates on the instructor’s perspective. Future research might bring in the student and
administrative perspectives for a more holistic framework.
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IMMIGRANT AND NATIVE BORN ENTREPRENEUR TECHNOLOGY COMPONENT
ATTITUDES AND BEHAVIORS: IMPLICATIONS FOR TRAINING
Kellye Jones, Clark Atlanta University

kjones@cau.edu
ABSTRACT
This study examines whether immigrant and native born entrepreneur attitudes and
behaviors differ with respect to Technology Components (TCs) used in firms. An ANOVA
analysis reveals that immigrant entrepreneurs held less positive attitudes toward TCs. They also
demonstrated less positive behaviors toward TCs. The empirical results were used to develop
training modules designed to increase awareness about the salience of TCs and how TCs
influence firm performance.
INTRODUCTION
Entrepreneurs are the primary source of job creation in the US and approximately 600,000
new firms are created each year (Schramm, 2010). Despite less than favorable economic conditions,
the belief remains that the US is a great place to start a business (Schramm, 2010). Entrepreneurs
operate within the context of ever changing environments replete with uncertainty and risk.
Navigating such an environment requires entrepreneurs to have the requisite knowledge, skills, and
experience to grow a successful firm. These capabilities should not only be developed, but honed
and redeveloped over the life-cycle of the firm. As firms evolve, strategies and operations are
evaluated, systems are introduced, and behavioral change occurs.
Information Technology (IT) and its Technology Components (TCs) are essential tools that
will assist entrepreneurs in growing and improving the performance of the firm. US small
businesses in the retail, services, and manufacturing sectors report that the use of IT and TCs
yield positive results, such as increased productivity and efficiency, as well as reduced cost
(Cooper & Zmud, 1990; Johnston, Wade, & McClean, 2007). These outcomes are the result of
entrepreneurs selecting and implementing TCs that provide insight to customers and enhance the
security of firm data. Subsequently, knowledge of and facility with TCs is critical.
The entrepreneurial activity of immigrant group members in the US has been widely
reported (Anderson & Platzer, 2007; Portes & Manning, 1986). These studies indicate that
immigrants are making substantial strides in stimulating the US economy. Researchers have also
examined the role that culture plays in establishing businesses (Light & Gold, 2000).
Immigrant entrepreneurs have steadily increased their participation in the business
community. While widely studied, there are limited areas of inquiry. One such area entails
examining the operations of immigrant owned firms relative to IT and TCs within firms and the
perceptions held and behaviors toward technology. Increasing the knowledge base about the
nature of technology in these firms as well as the attitudes and behaviors toward technology is
important given the significance of IT and TCs to a firm’s operations and viability.
This study examines whether immigrant and native born entrepreneurs differ in their TC
attitudes and behaviors. The study first examines the business participation patterns of
immigrants in the US. Second, the role of TCs in businesses is examined. The next area of
coverage is technology attitudes and national culture. Last, ethnic enclave, middleman, and
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diffusion theories are briefly discussed. The remaining sections include the methodology,
hypotheses, results, and discussion.
IMMIGRANTS IN THE US
Immigration has had a significant impact on US society and immigrant entrepreneurs have,
in fact, contributed to the US economy for more than one hundred twenty five years. Immigrants
have also had a greater inclination toward self employment as compared to the native born
(Research Perspectives on Migration, 1997).
African immigrants comprise about 4 percent of immigrants in the US and they constitute
about 14 percent in the Washington, D.C. area (USCD, 2005). Ethiopian immigrants have carved
out a major presence in Los Angeles, Dallas, Atlanta, and Washington, D.C. (Singer, 2004).
While Ethiopians have been quite successful at creating enclaves and growing businesses in
these communities, few academic studies examine the nature of their firms and their experiences.
IMPORTANCE OF TECHNOLOGY COMPONENTS
Information technology and its components are crucial to firm operations. Subsequently,
entrepreneurial firms are increasing usage of components such as e-commerce, online video, and
blogs, which enable an Internet presence while augmenting the brick and mortar establishment.
Gaining in interest are additional components such as customer relationship management (CRM)
and security related tools. Studies indicate that introducing IT and TCs positively affects
operations. Increased sales and visibility, operating efficiencies, cost reductions, and productivity
increases are outcomes reported by firm owners deploying technology and its components
(Cooper & Zmud, 1990; Johnston, Wade, & McClean, 2007; Peltier, Schibrowsky, & Yushan,
2009).
Given the reported benefits associated with TCs, entrepreneurs report an interest in
increasing both their hardware and software capabilities. Entrepreneur (2009) indicates that
68% of business owners are planning to add new hardware while 51% have an interest in adding
new software within six months. Moreover, 32% of these entrepreneurs intend to invest in
security solutions within six months.
EMarketer (2009a) reports that US e-commerce revenues in 2009 were $131.4 billion
and by 2013, e-commerce revenues are expected to reach $189.3 billion. Many business owners
indicate that e-commerce activities are essential to their strategic initiatives as well as their near-
term revenue growth (Leibs, 1999).
While benefits of TCs have been identified, EMarketer (2009b) reveals that some
entrepreneurs are either unfamiliar or unimpressed with various TCs and subsequently are not
keen on upgrading firm capabilities. This limited knowledge is not uncharacteristic as
entrepreneurs tend to experience various operations-related deficiencies. Solomon, Fernald, and
Dennis (2003) report that knowledge of computers, increasing sales, conducting market research,
and securing capital are among the primary entrepreneur shortcomings.
In light of the advantages associated with IT and TCs, many entrepreneurs are
contemplating the relevance of diffusing these tools in their firms. Given the reported benefits
associated with IT and TCs, some entrepreneurs are increasing their awareness of how
technology might further enhance the visibility and operations of their firms. While examining
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the utility of diffusing new components, entrepreneurs should evaluate current attitudes about
TCs as well as current behaviors with TCs.
TECHNOLOGY ATTITUDES AND NATIONAL CULTURE
Attitudes towards technology and, in turn, acceptance of new technologies, are impacted
by many factors including national and organizational culture. IT is a means through which the
values, beliefs, ideas, and cultural artifacts of a group are expressed and should be included in
technology studies. Researchers found that national culture affects IT management, development
and use (Gefen & Heart, 2006).
Numerous researchers have used Hofstede’s (1980) conceptualization of culture, which
identifies five dimensions: Power Distance, Uncertainty Avoidance, Individualism, Masculinity,
and Long Term Orientation. Individuals who have high uncertainty avoidance are threatened by
ambiguity and uncertainty and subsequently desire formal systems and rules in order to reduce
discomfort. The scores were 46 for East Africa which includes Ethiopia, and 52 for the US. The
higher the score the more one wants to avoid uncertainty.
Having an individualistic orientation, which is characteristic of US culture, is consistent
with a quid pro quo approach. Conversely, when the collectivist value is dominant, there is
greater personal involvement and connection with others. Hofstede’s (1980) Individualism scale
reveals that with a score of 91, the US is at one end of the continuum while Ethiopia with a score
of 27 is closer to the opposite end and demonstrates less individualism.
ENCLAVE, MIDDLEMAN, AND DIFFUSION THEORY
Ethnic enclave and middleman theories provide insights about the entrepreneurial activity of
immigrants and as such, are the underpinnings for this study. Both theories lend perspective on the
cultural and structural patterns that assist or hinder business success (Wilson & Portes, 1980).
Numerous studies have examined diffusion theory and the factors that help or hinder
adoption of an idea. One of the most frequently discussed theories is the Diffusion of Innovations
concept developed by Rogers (1995). Specifically, Rogers describes five constructs that may be
used to explain the adoption or rejection of an innovation: Relative Advantage, Compatibility,
Complexity, Trialability, and Observability.
METHODOLOGY
The area of investigation includes the “U” street corridor of Washington, D.C. This area
has an abundance of enterprises that are dominated by Ethiopian entrepreneurs who immigrated
to the area. Their businesses include eateries, service, retail, and communications firms. Native
born entrepreneurs also operate similar firms in the surrounding area.
In investigating the TC attitudes of immigrant and native born entrepreneurs, the attitude
scale developed by Davis, Bagozzi, and Warshaw (1989) was used. The first construct, system
usability, was assessed by four statements. The statements include: (1) interaction with the
system is clear and understandable; (2) it is easy to get the system to do what is required; (3)
interaction with the system does not require a lot of mental effort; and (4) I find the system easy
to use. The second construct, system efficacy, was also assessed by four statements. The
statements include: (1) using the system increases productivity; (2) using the system enhances
439
effectiveness; (3) using the system improves job performance; and (4) the system is useful.
Cronbach’s alpha for the usability scale was 0.80 and .85 for the efficacy scale. The third
construct, intent to purchase a TC, was assessed by a single item, I plan to purchase a technology
component within the next 12 months.
The three constructs were measured on a five point Likert scale ranging from 1 (strongly
disagree) to 5 (strongly agree). The fourth construct, experience with technology, was assessed
with a single item, how many years of experience with the technology do you have? Four
hypotheses were generated about differences in attitudes:
H1: Ethiopian immigrant entrepreneurs will perceive a lower degree of usability with
the CRM TC.
H2: Ethiopian immigrant entrepreneurs will perceive a lower degree of efficacy with
the CRM TC.
H3: Ethiopian immigrant entrepreneurs will perceive a lower degree of usability with
the Security TC.
H4: Ethiopian immigrant entrepreneurs will perceive a lower degree of efficacy with
the Security TC.
Four hypotheses were generated about differences in behaviors associated with TC:
H5: Ethiopian immigrant entrepreneurs will be less inclined to purchase the CRM TC.
H6: Ethiopian immigrant entrepreneurs will be less inclined to purchase the
Security TC.
H7: Ethiopian immigrant entrepreneurs have less experience with the CRM TC.
H8: Ethiopian immigrant entrepreneurs have less experience with the Security TC.
THE RESEARCH STUDY
The immigrant owner firms were randomly selected from a directory of Ethiopian
businesses in Washington, D.C. Native born firm owners were selected from a general directory
of businesses in Washington, D.C. Entrepreneurs were asked about their attitudes toward CRM
and security related TCs. Experience with and intent to purchase TCs comprise the behavioral
items that were also assessed. Firms in the early stage of expanding IT capability by
incorporating TCs were included in the study. The total number of respondents who participated
in the study was 69. The 37 immigrant entrepreneurs and 32 native born entrepreneurs completed
a self-assessment instrument that measured their attitudes toward TCs and their TC behaviors.
Demographic and firm specific data was also collected.
All firms included in the study operate in the service sector. Approximately 71% of the
firms have been operating for more than five years. Seventy eight percent of the firms have 5-
100 employees. With respect to the entrepreneurs, 59% were less than 40 years old; 62% were
male; and 42% had earned a college degree.
RESULTS
Table 1 illustrates the results of the ANOVA analysis where the dependent variables are
the attitude dimensions: CRM usability, CRM efficacy, Security usability, Security efficacy; and
the behavior components: CRM purchase, Security purchase, CRM experience, Security
experience. The independent variable is origin of birth. For the eight items, there was a
440
difference in the attitudes and behaviors of immigrant and native born entrepreneurs at a 0.01
level of significance. Thus, all hypotheses were supported. With respect to attitudes, immigrant
entrepreneurs had lower perceptions of the usability of CRM (means: immigrant = 6.5; native =
13.6). They also had lower perceptions of the efficacy of CRM (means: immigrant = 6.9; native
= 13.8). Immigrant entrepreneurs held lower perceptions of the usability of security tools
(means: immigrants = 7.9; native = 15.5); and lower perceptions of the efficacy of security tools
(means: immigrant = 8.7; native = 16.4).
The behavior results reveal immigrant entrepreneurs had lower intentions to buy a CRM
TC (means: immigrants = 1.48; native = 2.96); and lower intentions to buy security tools (means:
immigrant = 1.54; native = 3.31). Immigrant entrepreneurs also had less experience with a CRM
TC (means: immigrant = 1.45; native = 3.0); and less experience with security tools (means:
immigrant = 1.45; native = 2.84).
DISCUSSION
The empirical results indicate that Ethiopian immigrant and native born entrepreneurs
differ in their TC attitudes and behaviors. Ethiopian immigrant entrepreneurs: had less favorable
perceptions of the usability and efficacy of CRM and security related TCs; were less inclined to
purchase the TCs; and had less experience with the TCs. One explanation of the findings may be
that unlike native born entrepreneurs, Ethiopian immigrant entrepreneurs have not experienced
the immersion of technology which is pervasive in US culture. Consequently, native born
entrepreneurs have greater exposure to technology. Interaction with technology tends to give rise
to positive attitudes about and greater awareness of its capabilities. Native born entrepreneurs
may also embrace the rugged individualist mindset that would facilitate autonomy and
independence in firm operations. Hence, they may be inclined toward greater involvement with
technology and as such may take initiative in learning how technology could influence continuity
in operations. This notion is consistent with individualism and uncertainty avoidance as
discussed by Hofstede (1980). Ethiopian immigrant entrepreneurs are inclined to have a
collectivist orientation which is a desire to have close connection and involvement with others
(Hofstede, 1980). Yet, these entrepreneurs do not perceive how TCs can assist operations by
maintaining, and in some instances, enhancing customer relationships. This myopia may be due,
in part, to limited exposure and experience with technology.
Clearly, training on the functions of and benefits accrued from using TCs is salient for the
sustainability and growth of these firms. Providing Ethiopian immigrant entrepreneurs the
occasion to interact with TCs in order to increase their facility and subsequent perceptions about
the technology is essential. This observation is consistent with “trialability” as discussed by
Rogers (1995).Likewise, hands-on experience also facilitates “observability” since the
entrepreneur would have an eyewitness account of results derived from TCs. Such an experience
also reduces perceptions of “complexity” as expressed by Rogers (1995). Training modules
provide much needed exposure to TCs thereby improving perceptions of usability and efficacy.
441
TABLE
TABLE
I. ANOVA
I. ANOVA
RESULTS
RESULTS
SumSum
of Squares
of Squares df df Mean
Mean
Square
Square
F F
Sig.Sig.
UCRM
UCRM
* ENT
* ENTBetween
Between
Groups
Groups (Combined)
(Combined)875.451
875.451 1 1 875.451
875.451
132.566
132.566 .000.000
Within
Within
Groups
Groups
442.462
442.462 67 67 6.604
6.604
Total
Total 1317.913
1317.913 68 68
EFFCRM
EFFCRM
* ENT
* ENT Between
Between
Groups
Groups (Combined)
(Combined)815.441
815.441 1 1
815.441
815.441 74.471
74.471
.000.000
Within
Within
Groups
Groups
733.632
733.632 67 67 10.950
10.950
Total
Total 1549.072
1549.072 68 68
EXPCRM
EXPCRM
* ENT
* ENT Between
Between
Groups
Groups (Combined)
(Combined)40.724
40.724 1 1 40.724
40.724
87.482
87.482
.000.000
Within
Within
Groups
Groups
31.189
31.189 67 67 .466.466
Total
Total 71.913
71.913 68 68
INTBUYCRM
INTBUYCRM
* ENT
* ENT
Between
Between
Groups
Groups (Combined)
(Combined)37.701
37.701 1 1 37.701
37.701
73.833
73.833
.000.000
Within
Within
Groups
Groups
34.212
34.212 67 67 .511.511
Total
Total 71.913
71.913 68 68
USEC
USEC
* ENT
* ENT
Between
Between
Groups
Groups (Combined)
(Combined)972.186
972.186 1 1 972.186
972.186
158.493
158.493 .000.000
Within
Within
Groups
Groups
410.973
410.973 67 67 6.134
6.134
Total
Total 1383.159
1383.159 68 68
EFFSEC
EFFSEC
* ENT
* ENT Between
Between
Groups
Groups (Combined)
(Combined)1012.300
1012.300 1 1
1012.300
1012.300 110.339
110.339 .000.000
Within
Within
Groups
Groups
614.686
614.686 67 67 9.174
9.174
Total
Total 1626.986
1626.986 68 68
EXPSEC
EXPSEC
* ENT
* ENT Between
Between
Groups
Groups (Combined)
(Combined)32.882
32.882 1 1 32.882
32.882
70.144
70.144
.000.000
Within
Within
Groups
Groups
31.408
31.408 67 67 .469.469
Total
Total 64.290
64.290 68 68
INTBUYSEC
INTBUYSEC
* ENT
* ENT
Between
Between
Groups
Groups (Combined)
(Combined)53.878
53.878 1 1 53.878
53.878
112.581
112.581 .000.000
Within
Within
Groups
Groups
32.064
32.064 67 67 .479.479
Total
Total 85.942
85.942 68 68
442442
REFERENCES
Anderson, S. & Platzer, M. American made: The impact of immigrant entrepreneurs and
professionals on U.S. competitiveness. National Venture Capital Association, 2007.
Cooper, R. & Zmud, R. Information technology implementation research: a technology
diffusion approach. Management Science, 36(2),1990, 123-139.
Davis, F., Bagozzi, R. & Warshaw, R. User acceptance of computer technology. Management
Science, 35(3), 1989, 982-1003.
EMarketer. Retail e-commerce sales flat for 2009, 2009a.
EMarketer. Small businesses’ online plans, 2009b.
Entrepreneur. The importance of IT, 2009, 38.
Gefen, D. & Heart, T. On the need to include national culture as a central issue in e-commerce
trust beliefs. Journal of Global Information Management, 14 (4), 2006, 1-30.
Hofstede, G. Motivation, leadership, and organization: Do American theories
apply abroad? Organizational Dynamics, 1980, 42-63.
Johnston, D, Wade, M. & McClean. Does e-business matter to SMEs? Journal of Small
Business Management, 45, 2007, 354-361.
Leibs, S. The next level for emerging enterprises. Information Week, 741, 1999, 50-60.
Light, I. & Gold, S.Ethnic economies. San Diego: Academic Press, 2000.
Peltier, J., Schibrowsky, J. & Z. Yushan.Understanding the antecedents to the adoption of CRM
technology by small retailers. International Small Business Journal, 27, 2009, 307-336.
Portes, A. & Manning, R.“The immigrant enclave: Theory and empirical examples”, pp 47-64 in
Competitive Ethnic Relations. Olzark & Nagel Eds. Orlando, FL: Academic Press, 1986.
Research Perspectives on Migration, 1997.
Rogers, E.The diffusion of innovations. 4th edition, Free Press: New York, 1995.
Schramm C.State of entrepreneurship address. The Kauffman Foundation, 2010.
Singer, A.The rise of new immigrant gateways. The Living Cities Census
Series. Washington, D.C.: The Brookings Institution, 2004.
Solomon, G., Fernald, L & Dennis, W. Self-identified management deficiencies of
entrepreneurs. The Journal of Private Equity, 3, 2003, 26-35.
U.S. Department of Commerce (USDC). U.S. Census Bureau. Washington
DC: Economics and Statistics Administration, 2005.
Wilson, K. & Portes, A.“Immigrant enclaves: An analysis of the labor market
experiences of Cubans in Miami,” American Journal of Sociology, Vol. 86, 1980, 295-
319.
443
CHAPTER 18
INTERNATIONAL BUSINESS AND

MARKETING
444
ADDITIVE AND SUBTRACTIVE DIFFERENTIATION STRATEGY:
A GLOBAL STRATEGY BASED ON MARKETING THEORY
Mohammed Shaki, Alliant International University

mkadhum@san.rr.com
Ralf Wilhelms, Lake Superior State University

rwilhelms@lssu.edu
ABSTRACT
Porter states two basic types of competitive advantage that create value for buyers: low
cost and differentiation. Porter views differentiation only in terms of adding features to a
product. However, differentiation not only involves the actual uniqueness of the product or
service created by a firm but also relies heavily on uniqueness perceived by consumers in
domestic and international markets. This provides the bases for marketing to play a key role in
differentiation strategies, a point in need to be exploited in the strategy literature. The paper will
present a model to include subtractive differentiation as a global strategic dynamic.
INTRODUCTION
It is accepted that firms compete in a changing global environment and therefore most
firms must adapt their global strategy to the changing environment. Often the global competition
surrounding a product shifts back and forth from price to other attributes. Two questions arise:
(1) what is the pool of “generic” global strategies from which a firm or strategic business unit
(SBU) may choose, and (2) what is the succession or alternation of moves that lead to a
competitive advantage in specific business situations? The literature (Hambrick, 1983; Porter,
1980, 1985, 1990; Venkatraman & Prescott, 1990) has addressed the first issue. The second issue
has gone largely unanswered. This paper presents a refocus of Porter’s generic strategy model to
address the second global strategic issue, namely that of strategic dynamic, based on recent
contributions.
LITERATURE
At the SBU level, Porter provides three competitive strategies based on the factors of the
type of competitive advantage and the competitive scope. A firm may achieve a global
competitive advantage if it can sustain overall cost leadership while commanding prices near the
industry average. Implicit in the cost-leadership strategy is that the firm can compete on a price
basis. Maintaining prices near the industry average requires the firm to achieve parity or
proximity in the basis of differentiation; that is, the firm must produce a standard product at a
lower cost. Cost leadership may not be sustainable if the international competitors can imitate the
firm’s action or if the global environment and technology changes. A differentiation strategy
involves a firm seeking to be unique in product features, services or any other dimension
valuable to the buyer—excluding the price, to which a special interpretation is attached in
economic theory. The product features could be real features or perceived features. However,
since differentiation is often costly, a successful differentiation strategy requires the firm to be
445
able to command a price premium that exceeds any added costs. To have a sustainable global
competitive advantage the firm should choose sources of differentiation that competitors cannot
imitate.
A point overlooked is that differentiation requires the firm to maintain cost parity or
proximity to competitors. Under competitive conditions, firms have great discretion in terms of
choosing how to be unique. Differentiation not only involves the actual uniqueness created by a
firm but also relies heavily on uniqueness perceived by both domestic and international buyers.
Therefore, marketing (Biggadlike, 1981) plays a key role in differentiation strategies, a point
inadequately exploited in the strategy literature. Porter’s rendering of I.O. does not just deal with
industry averages. His differentiators aggressively seek to indulge or even manipulate their
buyer’s value chains (1985).
In regards to international focus strategies, Porter sees them as the result of choosing a
narrow competitive scope. A “narrow” competitive scope, according to Porter, refers to selecting
a segment in terms of product, buyer, channel or geography (1980). However, using this
definition, it is very difficult to distinguish between focus and a differentiation strategy as is
apparent from a perusal of the business press and the case teaching literature.
METHODOLOGY
Hall (1980) found that firms, which achieve the lowest cost or most differentiated
position, are uniformly successful. However, as a theory Porter’s model is incompletely
formulated. “Types of competitive advantage” is not a valid variable since it cannot be expressed
in terms of a continuum. Karnani’s discussion (1984) provides background analytical support for
Porter’s model. Porter essentially states that there are two basic types of competitive advantage,
stemming from two sources of buyer value: low cost and differentiation. International and
domestic buyer value is created either by lowering the buyer’s cost or by raising product
performance. However, eliminating features that a buyer does not want also may create buyer
value. In discussing differentiation, Porter views uniqueness only in terms of adding features to a
product. For example, “differentiation leads to premium prices” (1985); we take the position that
subtracting features also can achieve uniqueness. That is, adding features to achieve uniqueness
are additive differentiation, and subtracting features are subtractive differentiation. Porter’s
typology may therefore be revised as shown in Figure 1.
In this slightly expanded model, generic strategies are based on two factors; the product
features and the buyers targeted. Differentiation and focus strategies result from either adding or
subtracting features from a product. An interesting new perspective is that cost leadership
becomes the third basic strategy by default: if a firm does not compete on the basis of product
features, it must compete on the basis of price.
446
FIGURE I: Porter’s Typology Revised
Product Features
Reduced Features Extended Features
Subtractive Additive
Differentiation and Differentiation
Broad
Price Leadership Strategy

Strategy
Quality
Management
SCOPE
&
Cost Leadership
Narrow
Strategy
Additive
Subtractive Focus
Focus Strategy Strategy
DISCUSSION
Consider the case of a firm that takes away features from the standard product with the
intention to lower its cost and price, as in the introduction of generic goods or Yugo automobiles.
By definition, this should be termed a differentiation or focus strategy, not a cost leadership
strategy, since the firm has moved away from the standard product of its industry. We suggest
that a “cost focus” strategy is not possible. Under a cost-leadership strategy, a firm must
maintain proximity in differentiation. Once this is done, it becomes impossible to target a buyer
segment since the product will have only features that appeal to everyone. Buyer segments may
be defined in terms of socio-ethic groups or geographical groups, but not income groups when a
standard product is involved. Saving money appeals to everyone –or should according to the
rationalist perspective of the “homo economics” concept.
The marketing literature (Dickson & Ginter, 1987; Zeithaml, 1988) does not always
stress the distinction between the price, on the one hand, and the bundle of features it affords, on
the other. It is a distinction essential to understanding the I.O. perspective, and that is present in
much of the marketing literature (e.g. Tellis, 1986). With a standard set of features, all rational
income groups would prefer the lower price. Regarding focus, what Porter explains in his second
book, as a “cost-focus strategy” is actually decrement differentiation for a narrow scope or a
subtractive focus strategy. For example: “An opportunity for cost focus may be present in just
meeting the needs of a segment (1985), and in his Table 5-1 (1985:1178) cost focus involves
designing in “only enough performance for the target segment’s needs.” This is better described
as a subtractive focus strategy since the firm is moving away from the standard product. Each
differentiation and focus strategy includes an additive and a subtractive variant. This analysis
also helps clarify the difference between cost leadership and subtractive differentiation. For a
successful cost- leadership strategy (global/domestic), customers must be price-sensitive, but still
insist on the other attributes of a well-defined standard product. A subtractive differentiation
global strategy occurs when customers prefer other attributes and in particular, do not want some
447
features of the standard product and do not care to pay for them. It is successful when firms are
offering too many features, features that customers (International) do not deem important or
simply do not want. The practical issue addressed neither by Porter nor his critics is the
distinction between cost trimming and the production of pared-down, substandard items. This is
an important distinction in this age of global branding (Doyle, 1990) and global competition
between high-wage and low-wage countries (Prahalad & Doz, 1987). Contrary to popular
sentiment, a bargain-basement strategy is not a form of cost leadership. The proposed typology
differentiates between these two important forms of price-based competition.
CONCLUSION
This theoretical model led us to argue that simultaneously pursuing more than one
generic strategy is not feasible. A cost-focus strategy is not conceivable. Marketing theory
considerations allow us to develop an expanded strategic typology (Figure 1) to incorporate
Hill’s emphasis on the preeminence of differentiation strategies, which leads us to propose the
notions of subtractive as well as additive differentiation strategies.
REFERENCES
Biggadike, E.R. “The Contribution of Marketing to Strategic Management.” Academy of

Management Review, 6, (4), 1981, 621-632.
Dickson, P.R., and Ginter, J.L. “Market Segmentation, Product Differentiation, and Marketing
Strategy.” Journal of Marketing, 51, (April), 1987, 1-10.
Doyle, P. “Building Successful Brands: The Strategic Options.” Journal of Consumer Marketing,
7, (2), 1990, 5-20.
Hall, W.K. “Survival Strategies in a Hostile Environment.” Harvard Business Review, 58, (5),
1980, 75-85.
Hambrick, D.C. “An Empirical Typology of Mature Industrial-Product Environment. Academy
of Management Journal, 26, 1983, 213-230.
Karnani, A. “Generic Competitive Strategies: An Analytical Approach.” Strategic Management
Journal, 5, 1984, 367-380.
Porter, M. Competitive Strategy: Techniques for Analyzing Industries and Competitors. New
York: Free Press, 1980.
Porter, M. Competitive Advantage: Creating and Sustaining Superior Performance. New York:
Free Press, 1985.
Porter, M. The Competitive Advantage of Nations. New York: Free Press, 1980.
Prahalad, C.K., and Doz, Y.L. The Multinational Mission: Balancing Local Demands and Global
Vision. New York: Free Press, 1987.
Tellis, G.L. “Beyond the Many Faces of Price: An Integration of Pricing Strategies.” Journal of
Marketing, 50, (4), 1986, 146-160.
Venkatraman, N., and Prescott, J.E. “Environment-Strategy Co-Alignment: An Empirical Test of
Its Performance Implications.” Strategic Management Journal, 11, 1990, 1-23.
Zeithaml, V.A. “Consumer Perceptions of Price, Quality and Value: A Means-End Model and
Synthesis of Evidence.” Journal of Marketing, 52, (6), 1988, 2-22.
448
AN ANALYSIS OF THE IMPACTS OF EXPORTING AND IMPORTING
ON TWO DIMENSIONS OF DEVELOPMENT IN AFRICA

poyewole@howard.edu

eaokoro@howard.edu
ABSTRACT
Testing the predictions of various conflicting theories on international trade and

development, this paper examined the impact of exporting and importing on economic level and
basic needs in the developing countries of Sub-Saharan Africa. Using five-year lagged data
(2002-2007), the paper finds that exporting tends to have positive and significant impact on both
economic level and basic needs in Africa. Importing was found to have negative and significant
impact on economic level while having negative but not significant impact on basic needs.
Policy implications of these findings are discussed and direction for further study on theory
development is given.
INTRODUCTION
The unabated trend in globalization, internationalization, deregulation, and liberalization

in the global marketplace has spawned to the fore again the centuries-old debate of the
relationship between international trade and national development (Mullen, 1993). Especially
does this debate take on a very passionate crescendo when it centers on the developing nations of
the world such as the countries of Sub-Saharan Africa. Authors’ opinions differ and theories
exist that conflict with one another. Nonetheless the questions remain: To what extent should
these countries participate in the international market? What are the effects of exporting and
importing on their national development? Which dimension of their development is being
served, and which is being disserved by exporting on one hand, and by importing on the other?
Answers to these questions are of great interest to public police makers, macro marketers,
international business managers, and national interest groups alike. Thus, studies of the type
carried out in this paper are essential to effective policy and practice of international marketing
in the developing countries of Africa as they grope for the best path to growth in the 21st century.
LITERATURE
Several authors have written on the topic of national development with differing
viewpoints. Earlier writers have equated national development with economic growth measured
by such variables as GNP or GNP per capita (Bennett & Green, 1972). However,
macromarketers have increasingly become more concerned about actual benefits to the society
by any purported development, such as decrease in poverty rate and unequal distribution of
income (Dholakia & Dholakia, 1984; Todaro, 1989). Thus, consensus among macromarketers
has swayed towards development being viewed as multi-dimensional rather than uni-dimensional
focusing only on economic growth (Sherry, 1989). It is now widely held among macromarketers
449
that national development has at least two dimensions, namely: (i) economic growth, and (ii)
basic needs (Duhaime, McTavish, & Ross, 1985; Mullen, 1993). Basic needs in the society are
measured by such variables as safe water, medical care, shelter, educational opportunities, life
expectancy, and protein consumption (Duhaime, McTavish, & Ross, 1985; Mullen, Doney, &
Becker, 1996). Based on this two-dimensional paradigm of development, Mullen (1993) carried
out a global study of the effects of exporting and importing on both economic growth and basic
needs in the countries of the world. His study found that exports have a direct positive effect on
economic dimension of development but a direct negative effect on basic needs. Contrariwise
however, imports were found to have a direct negative effect on economic dimension and a
direct positive effect on basic needs. Interestingly though, the study reported that total effect of
exports on basic needs was positive and statistically significant while total effect of imports on
basic needs was negative though not statistically significant. Situation was the same for total
effect on economic dimension. It was positive and significant for exports while negative and
significant for imports. The present paper (i) focuses on developing countries, in particular
developing countries of Sub-Saharan Africa, (ii) separate exports from imports in its analysis,
and (iii) examines the effects of these on both economic level and basic needs dimensions of
national development.
The following four hypotheses are tested, namely:
H1: Exports have a positive effect on economic level in Africa.

H2: Imports have a positive effect on economic level in Africa.
H3: Exports have a positive effect on basic needs in Africa.
H4: Imports have a positive effect on basic needs in Africa.
METHODOLOGY
Data for this study was obtained from the World Bank’s “World Development
Indicators” (World Bank, 2008, 2009). The “World Development Indicators” contains time
series data on several socio-economic variables for all the African countries up to the year 2007.
A multiple regression econometric model was fitted to the data taking the form:
Y = β + β 1X
i i 1i
+β
2 X 2i
+εi
The independent variables were exports as percentage of GNP and imports as percentage
of GNP. Dependent variables were indicators of the two dimensions of development: economic
growth on one hand and basic needs on the other. Seven variables were selected for economic
growth and seven for basic needs as gleaned from the literature. For economic growth the
following variables were retained: (i) the GDP, (ii) GNP per capita, (iii) value added in industry,
(iv) value added in industry as percentage of GDP, (v) value added in manufacturing, (vi) value
added in manufacturing as percentage of GDP and (vii) urbanization. As for indicators of basic
needs the following variables were used: (i) infant mortality rate, (ii) adult literary rate, (iii)
percentage of population with access to improved sanitation facilities, (iv) percentage of births
attended by skilled health staff, (v) prevalence of under nourishment in the population, (vi)
primary school completion rate and (vii) pupil-teacher ratio in primary schools.
450
RESULTS
The result of multiple regression analysis of imports and exports on economic level
indicators is shown in Table 1. As could be seen in the Table, all the F ratios except one are
significant at the 0.05 level, thus indicating a good fit of the model to the data set. There is a
striking difference between the impact of exports on economic growth, and that of imports.
Looking at the coefficients, all of exports’ coefficients are positive. Likewise, all the associated
t-values except one (added value in manufacturing as percentage of GDP) were significant at the
.05 level. Hence, the hypothesis H1, that says, “Exports have a positive effect on economic level
in Africa,” could not be rejected by the data of this study. On the other hand, the coefficients of
imports are negative across all economic level indicators except two. These two variables are
value added in industry as a percentage of GDP and value added in manufacturing as a
percentage of GDP. Although, imports have positive coefficients on these indicators, their
associated t-values are non-significant at the .05 level as indicated by the -values. On the other
hand, the t-values associated with indicators having negative coefficients are all significant
except one. From this result, the hypothesis H2, that says, “Imports have a positive effect on
economic level in Africa,” could not be accepted based on the data of this study.
TABLE I: Economic Level Indicators in Africa: Results of Multiple Regression Analysis
F Independent
Dependent Variables (Sig.) Variables Coefficients t -value
Urbanization 16.035 Exports (% of GNP) .536 5.321 .000*
(.000)* Imports (% of GNP) -.326 -2.106 .034*
GDP 4.260 Exports (% of GNP) .974 2.594 .013*
(.021)* Imports (% of GNP) -1.516 -2.745 .009*
GNP per Capita 19.403 Exports (% of GNP) 1.239 5.047 .000*
(.000)* Imports (% of GNP) -.272 -.754 .455
Value Added in 5.053 Exports (% of GNP) 1.416 3.177 .003*
Industry (.011)* Imports (% of GNP) -1.475 -2.249 .030*
Value Added in 12.205 Exports (% of GNP) .403 3.557 .001*
Industry (% of GDP) (.000)* Imports (% of GNP) .0161 .097 .923
Value Added in 4.411 Exports (% of GNP) 1.173 2.856 .007*
Manufacturing (.019)* Imports (% of GNP) -1.534 -2.529 .015*
Value Added in Manu. 0.788 Exports (% of GNP) .152 .895 .376
(% of GDP) (.462) Imports (% of GNP) .0093 .037 .970
Note: * significant at .05 level.
A second series of multiple regression analysis was also carried out for basic needs. The
results are shown in Table 2. It could be seen that the coefficients of exports are structurally
positive for all the basic needs indicators. Note that although the signs of three of the indicators
(prevalence of undernourishment, infant mortality rate, and primary school pupil-teacher ratio)
are negative, they indicate positive direction for human welfare. This is because the positive (i.e.
451
desirable) thing is to reduce the figures of such indicators as much as possible. Looking at the t-
values for exports, they are statistically significant at the .05 level for all the basic needs
indicators except one (infant mortality rate). In view of this, the hypothesis H3 that says,
“Exports have a positive effect on basic needs in Africa,” could not be rejected by the data of this
study.
TABLE II: Basic Needs Indicators in Africa: Results of Multiple Regression Analysis
F Independent
Dependent Variables (Sig.) Variables Coefficients t -value
Attended Births (% of 6.950 Exports (% of GNP) .485 3.684 .001*
total) (.003)* Imports (% of GNP) -.403 -2.083 .045*
Access to Improved 7.553 Exports (% of GNP) .613 3.886 .000*
Sanitation (% of pop.) (.002)* Imports (% of GNP) .597 -2.573 .014*
Adult Literacy Rate 7.443 Exports (% of GNP) .496 3.837 .001*
(% of total) (.003)* Imports (% of GNP) -.439 -2.309 .031*
Prevalence of Under- 5.421 Exports (% of GNP) -.602 -3.123 .003*
nourishment (% of pop.) (.008)* Imports (% of GNP) .347 1.263 .214
Infant Mortality Rate (per 1.889 Exports (% of GNP) -.172 -1.167 .250
1000) (.164) Imports (% of GNP) -.075 -.346 .731
Primary Completion Rate 11.673 Exports (% of GNP) .324 4.302 .000*
(% of age group) (.000)* Imports (% of GNP) -.145 -1.312 .197
Pupil-Teacher Ratio 6.614 Exports (% of GNP) -.267 -2.919 .006*
(Primary Sch.) (.003)* Imports (% of GNP) .053 .394 .696
Note: * significant at .05 level.
In the case of imports, the coefficients are structurally negative for all the basic needs
indicators except one (infant mortality rate). Note that although the coefficients of prevalence of
undernourishment and that of primary school pupil-teacher ratio have positive signs, they
indicate negative directions for human welfare. This is because the goal is always to reduce the
figures for such variables as much as possible. Examining the t-values for imports, it could be
seen that they are not significant for four out of the seven basic needs indicators. These four
indicators are prevalence of undernourishment, infant mortality rate, primary school completion
rate, and primary school pupil-teacher ratio. Given these results, no conclusive decision could be
made as to accepting or rejecting hypothesis H4 that says, “Imports have a positive effect on
basic needs in Africa.” The tendency would be to reject this hypothesis given the negative
directions of the coefficients. However, more study would be needed before any affirmation
could be made from a statistical standpoint.
CONCLUSION
Using lagged data; this paper has examined the impact of importing and exporting on
economic level and basic needs in the developing countries of Sub-Saharan Africa. The paper
tested the predictions of three conflicting international trade theories namely: the dependency
theory, the world systems theory, and the neo-classical economic trade theory. Based on the
findings of the present study none of these theories could be discarded as untruth nor upheld as
452
the whole truth! In view of these conflicting verdicts, the paper submits that separate
development theories are needed for exporting on one hand, and for importing on the other
instead of lumping both together, as is currently the practice, under one single body of theories
termed trade, or international trade theories. In the meantime, the findings of this paper
suggested some policy directions for the governments of African countries. They should pursue
export promotion rather than import substitution policies. They should also be selective in
importing products that help to increase their exports. By doing this, the negative effects of
importing on economic level and basic needs will be minimized while the positive effects of
exporting on those two dimensions of development in Africa will be maximized.
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Dholakia, N., and Dholakia, R.R. “Missing Links: Marketing and the Newer Theories of
Development. In G.S. Kindra, ed., Marketing and Developing Countries. New York: St.
Martin Press, 1984.
Duhaime, C., McTavish, R., and Ross, C.A. “Social Marketing: An Approach to Third World
Development.” Journal of Macromarketing, 5, (Spring), 1985, 3-13.
Mullen, M.R. “The Effects of Exporting and Importing on Two Dimensions of Economic
Development: An Empirical Analysis. Journal of Macromarketing, 13, (Spring), 1993, 3-
19.
Mullen, M.R., Doney, P.M., and Becker, T. “Time-lagged Effects of Exporting and Importing on
Economic Development: Replication and Extension of Mullen’s (1993) Model.” Journal
of Macromarketing, 16, (2), 1996, 24-44.
Sherry, Jr., J.F. “Marketing and Development: A Review Essay.” Journal of Macromarketing, 9,
(Fall), 1989, 65-71.
Todaro, M.P. Economic Development in the Third World, 4th ed. White Plains, NY: Longman,
1989.
World Bank. World Development Indicators, 2008. Washington, DC: The World Bank, 2008.
World Bank. World Development Indicators, 2009. Washington, DC: The World Bank, 2009.
453
CHINA’S TRADE WITH SUB-SAHARAN AFRICA AND MARKET ENTRY MODES:
A COST BENEFIT ANALYSIS

eaokoro@howard.edu

poyewole@howard.edu
ABSTRACT
Trade and economic relations between China and Africa have a protracted history and
have developed incrementally over the course of time.Some studies questioned China’s motives
in Africa’s markets and others viewed with suspicion the structure of Sino-Africa’s bilateral
trading engagements, and types of entry modes into their domestic markets. Employing content
analysis of recent and current data (2000 – 2009), the paper examined institutional and academic
research pertaining to Sino-African relationship, and determines imbalance in bilateral trade,
inequity in the modes of market entries, and negative impact on domestic economic
development. Policy implications of these findings were provided and recommendations for
mutual trade benefits were identified.
INTRODUCTION
The increasing presence of China in many parts of Africa has continued to be viewed
with mixed feelings by researchers and world organizations. This paper conducts a cost-benefit
analysis of Sino-Africa trading partnerships, with a focus on the Sub-Saharan region. It
specifically explores China’s growing business interest and expansion in the region, and the mod
As the countries of sub-Saharan Africa have become a major concentration for global trade,
especially for Chinese products over the past decades, there has been an ongoing debate about
the entry modes into the markets, and the reasons for the entry mode selection. Further,
researchers have raised questions regarding the increasing Chinese presence in many African
markets as well as the impact their presence and products might have on domestic economic
development.
Recent studies indicate the overwhelming interests by African citizens, local businesses,
and policy makers in determining the costs and benefits of Chinese surge in their markets and the
effects on local goods and services (Wines, 2007; Tull, 2006).A study shows that the
fundamental objective for entry is for natural resources, market opportunities, and cheap
labor.This objective is being achieved through a variety of market entry modes (Rotberg,
2008).In light of the preceding background, this paper is focused on identifying positive and
negative consequences associated with China’s trade expansionand modes of entry into African
markets. The analysis is guided by the following specific questions:(a) Whether the bilateral
trade between China and Sub-Saharan African countries is mutually beneficial; (b) Whether the
alleged low-cost Chinese goods and services is impacting African domestic businesses; (c)
Whether Chinese business models is placing domestic entrepreneurs in a competitive
disadvantage; and (d) whether there is equity in entry modes to Sino-African markets.
454
LITERATURE REVIEW
A number of studies have focused on China’s entry into the sub-Saharan Africa with
strikingly divergent conclusions.Some of the authors differed significantly in their analyses of
the costs associated with China’s presence in Africa (Taylor, 2009; Sylvanus, 2007).Others were
consistent in their views regarding trade and investment benefits to Africa (Rotberg, 2008;
Broadman, 2007). Earlier studies viewed the objectives behind Sino-African bilateral trade as
lopsided, impacting negatively on domestic economic development (Spring & McDade, 1998;
Stiglitz, 2003; Shelton, 2005).Increasingly, there appears to be consensus among recent studies
that China’s trade expansion into the Sub-Saharan region was largely driven by exploitation of
natural resources, raw materials, and energy sources to boost its economic growth and export
markets (Taylor, 2009; Spring & Jao, 2008; Ngome, 2007).China hardly wants to dominate or
colonize but it does have insatiable “mercantilist ambitions.” It continues to seek raw materials
such as petroleum, timber, cobalt, copper, diamond, etc. to promote its economic growth.China’s
presence in the sub-Saharan Africa is in quest for whatever primary resources that can be found
in the soils to support its massive and constantly increasingly industrial expansion (Rotberg,
2008).It appears that the economic circumstance in sub-Saharan Africa welcomes Chinese
insatiable appetite for raw materials.China, therefore, not only uses Africa’s raw, crude, or
unprocessed materials of the subsoil, the land, and offshore drilling, but it commitstolong term
investments, thereby expanding and sustaining Africa’s economic capacity.As Taylor (2009)
explains, there are obvious limits to “mutual benefits” between China and sub-Saharan Africa
because of their widely different levels of development and systems of governance.
Over several years, a number of studies have advocated for the acceleration of trade and
investment among developed and developing countries and have described it as one of the most
significant features in the twenty-first global economy.Consistent with this view, Broadman
(2007) points out that the striking hallmark of the new trend in the global business relations isthe
massive increase in trade and investment flowing between China and the sub-Saharan
Africa.Rotberg (2008) concurs that the Sino-African countries’ engagement in bilateral trade for
decades have being productive, because China and Africa desperately need each other for
economic prosperity.Furthermore, Luo (2000) and Taylor (2009) agree that China cannot easily
grow without Africa in their present circumstances. Nor can sub-Saharan Africa prosper without
China’s sophisticated industrial support.Therefore, it is evident that the Sino-Africa symbiotic
relationship is significantly beneficial.
In more recent years, however, the perception of several authors and the international
communities is that the accelerating developments in the Sino-African relationship occurred after
a dormant period that exposed new and potentially unsettling Chinese ambitions in the sub-
African region.China has promoted cooperation with Africa in various phases of economic and
political development endeavors.Sino-African presidents have exchanged state visits for
decades.For example, various presidents of the countries in the sub-Saharan Africa paid thirty-
three visits to China in the 1970s and fifty-one in the 1980s.Similarly, Chinese leaders visited
thirty-three African countries over the same periods. Indeed, based on recent development, the
rapid increase in China’s economic and political engagement in Africa is arguably one of the
remarkable developments on the continent since the end of the Cold War (Taylor, 2009).
Against this background, there is no doubt that China has become Africa’s second most
important strategic trading partner, ahead of the United Kingdom, and closely following the
455
United States. It is thus very important to make a diligent study of the costs and benefits of this
Unitedtrade
nation’s States. It is thus very
relationship with important to make
the continent a diligent
of Africa as is study ofthis
done in the paper.
costs and benefits of this
nation’s trade relationship with the continent of Africa as is done in this paper.
STUDY METHODOLOGY
STUDY METHODOLOGY
Data for this study was gathered from past and current publications (Taylor 2009; Lou
Data for this study was gathered from past and current publications (Taylor 2009; Lou
2000) and from The World Bank’s “Development Indicators” and Annual Reports (World Bank
2000) and from The World Bank’s “Development Indicators” and Annual Reports (World Bank
2007, 2008). Content analysis of these publications was conducted to evaluate costs and benefits
2007, 2008). Content analysis of these publications was conducted to evaluate costs and benefits
associated with Sino-African bilateral trade and market entry modes. Tables of various
associated with Sino-African bilateral trade and market entry modes. Tables of various
transactions over different periods were analyzed, compared, and contrasted to determine
transactions over different periods were analyzed, compared, and contrasted to determine
transaction
transaction equity,scope
equity, scopeofoftrade,
trade,and
andprocess
processobjectivity.
objectivity.The
The analysis
analysis placed
placed specific attention
specific attention
onon differing
differingauthors’
authors’views
viewsregarding
regardingentry
entrymodes
modes into
into Sino-African
Sino-African markets,
markets, the validity of
the validity of
contradictory claims of resource exploitation, trade imbalance, and dumping.
contradictory claims of resource exploitation, trade imbalance, and dumping. Tables were Tables were
reviewed
reviewedforforthethecurrent
currentforforthe
thenumber
number ofof Chinese
Chinese entrepreneurs
entrepreneurs in
in sub-Saharan African
sub-Saharan African
markets, the quality and quantity of products and services imported into the countries,
markets, the quality and quantity of products and services imported into the countries, and and the
the
scope
scopetrade and
trade andinvestments.
investments.
FINDINGS
FINDINGS
Table
Table 1 1indicates
indicatesthe
thetotal
totalAfrica’s
Africa’simports
importsfrom
fromChina
China (2004
(2004 –– 2006).
2006). The table shows
shows
that with
that thetheexception
with exceptionofofSouth
SouthAfrica,
Africa,whose
whoseindustrial
industrial economy
economy is
is fully
fully developed, China’s
China’s
main
mainAfrican
Africanimports
importsare
arederived
derivedfrom
fromoil-producing
oil-producingsub-Saharan
sub-Saharan countries.
countries.
TABLE
TABLEI: I:
Top Five
Top FiveAfrican
Africansources
sourcesofofChinese
ChineseImports,
Imports,2004
2004 –– 2006
2006 (in US$ millions)
millions)
Countries
Countries 2004
2004 2005
2005 2006
2006
Africa
Africa Total
Total 15,640.9
15,640.9 21,114.1
21,114.1 28,767.6
28,767.6
Angola
Angola 4,717.7
4,717.7 6,580.7
6,580.7 10,930.9
10,930.9
South
South Africa
Africa 2,955.3
2,955.3 3,443.6
3,443.6 4,095.3
4,095.3
Congo-Brazzaville
Congo-Brazzaville 1,568.9
1,568.9 2,278.0
2,278.0 2,784.6
2,784.6
Equatorial
Equatorial Guinea
Guinea 995.3
995.3 1,486.1
1,486.1 2,537.6
2,537.6
Sudan
Sudan 1,705.5
1,705.5 2,614.7
2,614.7 1,941.4
1,941.4
Source:
Source: Morrison,
Morrison, 2007(17).
2007 (17).
Studiesrevealed
Studies revealedthat
thatthe the growing
growing interest
interest and
and expansion
expansion of of China’s
China’s national
national oil
oil
companiesinto
companies intoAfrica,
Africa,especially
especiallyinto intothe
theSub-Saharan
Sub-Saharan Africa,
Africa, isis the
the significant
significant part
part of
of Sino-
Sino-
African
African tradeand
trade andinvestment
investmentrelations
relationsthatthathave
havetriggered
triggered serious
serious concerns
concerns toto researchers
researchers and
and
global communities. In addition to oil as a major and compelling Chinese economic interest
global communities. In addition to oil as a major and compelling Chinese economic interest in
in
the Africa, authors point out that China is aggressively looking for copper, bauxite, uranium,
the Africa, authors point out that China is aggressively looking for copper, bauxite, uranium,
aluminum, manganese, iron ore, and other natural resources that are available (Lyman, 2005;
aluminum, manganese, iron ore, and other natural resources that are available (Lyman, 2005;
Roughneen, 2006). Further, there has been a concern that China’s unabated interest in oil
Roughneen, 2006). Further, there has been a concern that China’s unabated interest in oil
extraction and energy supplies and procurement from the sub-Saharan Africa would present
extraction and energy supplies and procurement from the sub-Saharan Africa would present
serious economic challenges to the global community in the near future. Records indicate that
serious
aroundeconomic
70 percentchallenges
of Africantooilthe global community
is exported in the2005;
to China (Ebel, nearTaylor,
future.2009).
Records indicate that
around 70Table
percent of Africantheoilstructure
2 provides is exported to Chinabusiness
of Chinese (Ebel, 2005; Taylor,in2009).
ownership Africa, ranging from
Table 2businesses
state-owned provides and
the corporations
structure of to Chinese business
individual ownership
retailers in Africa,Inranging
and entrepreneurs. from
determining
state-owned businesses and corporations to individual retailers and entrepreneurs. In determining
456
456
levels
levels of
of businesses,
businesses, the
the Table
Table classified
classified them into ownership,
them into ownership, range
range ofof capital,
capital, number
number ofof
workers,
workers, business
business types,
types, time/duration,
time/duration, and
and market strategies adopted
market strategies adopted in in Africa.
Africa. The
The table
table
indicates
indicates that
that there
there were
were more informal-sector Chinese entrepreneurs who who sell
sell apparels
apparels and
and
garments,
garments, and
and competing
competing head-on with African domestic enterprises. These These informal-private
informal-private
businesses
businesses were
were self-employed,
self-employed, engaged in retail and wholesale distribution,
distribution, with
with operating
operating
capital
capital within
within thethe range
range of $5,000. Specific strategies were to compete
compete in in local
local and
and rural
rural
communities,
communities, employing
employing family
family support system, and selling at very low prices.
prices.
TABLE
TABLE II:Examples
II:Examples of Types and Scope of Chinese Businesses
Businesses and
and
Entrepreneurs in Africa
Business Capital Type

Number & Type Time-
Time-
Example
Example Level
Level Ownership
Ownership Sec/Type Range of workers Frame
Frame Strategy
Strategy
Energy/ 500-1500 State-
State-
SinoHydo
SinoHydo Large
Large Formal
Formal Construct. $1m-5 bn Chinese Long
Long support
support
Huawei
Huawei Private/
Private/ 100-500
Tech.
Tech. Large
Large Formal
Formal Telecom. $1-200 m Chinese Long
Long Global
Global
50-200
Zhogken
Zhogken Medium
Medium Formal
Formal Agricult. $1-50 k Chinese/ Long
Long Global
Global
Farm
Farm African
Trade Co.
Trade Co. in
in Private/
Private/ International Enterprise
Enterprise
Nigeria
Nigeria Medium
Medium Formal
Formal trade $1–50k 5-25 Chin/Afri.
Chin/Afri. Long
Long Assoc.
Assoc.
Baiho Shops
Baiho Shops Fixed
inCape
in Cape Small
Small Private/
Private/ Location $5–10 k 1-25 Chinese
Chinese Medium
Medium Local
Local
Verde
Verde Formal
Formal Retail Family Community
Community
Wholesale in
Wholesale in Private/
Private/ Local
Local
Johnasburg
Johnasburg Medium
Medium Informal
Informal Wholesaler $5-10k Self-Employed
Self-Employed Long
Long Community
Community
Hawkers/
Hawkers/ Private/
Private/ Family
Family
Retail
Retail Small
Small Informal
Informal Retail >$5k Self-Employed
Self-Employed Long
Long Network
Network
Vendors/
Vendors/ Private/
Private/ Family
Family
Retail
Retail Small
Small Informal
Informal Retail Self-Employed
Self-Employed Long
Long Network
Network
Source: Spring
Source: Spring and
and Jao
Jao (2008)
(2008)
ENTRY MODE
ENTRY MODE CHOICES
CHOICES TO SUB-SAHARAN AFRICA
China’s primary
China’s primary entry
entry mode to African markets has generally been been via
via Foreign
Foreign Direct
Direct
Investment (FDI).
Investment (FDI). Exporting,
Exporting, importing, licensing, and franchising are secondarysecondary modes
modes which
which
attract local
attract local Chinese
Chinese entrepreneurs.
entrepreneurs. Generally
Generally speaking,
speaking, the
the market
market environment
environment in in the
the Sub-
Sub-
Saharan region
Saharan region is is less
less rigid,
rigid, offering
offering flexible
flexible conditions
conditions that
that encourage
encourage foreign
foreign investments,
investments,
products, and
products, and services.
services. Chinese
Chinese businesses,
businesses, government,
government, and and entrepreneurs
entrepreneurs have
have taken
taken advantage
advantage
of the
of the unrestricted
unrestricted market
market conditions
conditions in
in Africa.
Africa. Broadman
Broadman (2007)
(2007) noted
noted that
that the
the initial
initial condition
condition
of Chinese
of Chinese and
and Indian
Indian foreign
foreign investors’
investors’ entry
entry into
into the
the African
African markets
markets influenced
influenced the
the scale
scale and
and
pattern of
pattern of integration
integration and
and engagement.
engagement. Foreign
Foreign Direct
Direct Investment
Investment in in Africa
Africa dates
dates back
back toto several
several
decades and
decades and aa substantial
substantial portion
portion of
of Chinese
Chinese investors
investors inin Africa
Africa are
are relatively
relatively independent
independent
entrepreneurs. Over
entrepreneurs. Over the
the past
past years,
years, there
there have
have been
been aa number
number of of Chinese
Chinese and
and other
other foreign-
foreign-
owned businesses
owned businesses and and products
products competing
competing favorably
favorably inin many
many African
African markets,
markets, largely
largely because
because
of supportive
of supportive government
government tradetrade policies.
policies. According
According to to the
the data
data on
on Table
Table 3,
3, the
the total
total inflow
inflow ofof
foreign direct
foreign direct investment
investment into
into Africa
Africa in
in 2007
2007 remained
remained at at the
the historic
historic high
high ofof $35.6
$35.6 billion,
billion, the
the
457
457
previous
previousyear,
year,$35.5
$35.5billion
billion (UNCTAD,
(UNCTAD, 2008). The main
main recipient
recipient countries
countrieswere
werelisted
listedininthe
the
table
tablebelow:
below:
TABLE
TABLEIII:
III:China’s
China’s Trades
Trades and Investments in Africa
Investments in Africa(2006
(2006––2007)
2007)
Countries
Countries Total Inflow
Total Inflow of FDI In
In 2006
2006 Total
TotalInflow
InflowofofFDI
FDIinin2007
2007
Egypt
Egypt $10.2 billion
$10.2 billion $10.0
$10.0billion
billion
Morocco
Morocco $2.9 billion
$2.9 billion $5.2
$5.2billion
billion
SouthAfrica
South Africa $3 billion
$3 billion $5.0
$5.0billion
billion
Sudan
Sudan $3.5 billion
$3.5 billion $2.2
$2.2billion
billion
Tunisia
Tunisia $3.3 billion
$3.3 billion $1.0
$1.0billion
billion
Nigeria
Nigeria $5.4 billion
$5.4 billion N/A
N/A
Source:United
Source: UnitedNations
NationsMillennium
Millennium Project,
Project, 2005
2005
Whilethe
While thebiggest
biggestChinese
Chinese investment
investment has
has been
been in
in commodities
commoditiesininSub-Saharan
Sub-SaharanAfrica,
Africa,toto
anan increasing
increasing extent
extent investment
investment has
has been
been directed
directed atat other
other industries
industries such
such asas clothing,
clothing,
agriculture, electricity
agriculture, electricity generation,
generation, road
road building,
building, tourism
tourism andand telecommunication,
telecommunication, etc. etc.
(Broadman, 2007;
(Broadman, 2007; Ebel,
Ebel, 2005).
2005). Despite
Despite the
the fact
fact that
that recent
recent studies
studies indicate
indicate that
that Chinese
Chinese
investment diversification in Africa (exporting, importing, wholly owned enterprises,
investment diversification in Africa (exporting, importing, wholly owned enterprises,
franchising, and licensing) as being a relatively recent turn of events. In terms of the number of
franchising, and licensing) as being a relatively recent turn of events. In terms of the number of
Chinese investment projects in Africa, manufacturing industry has always been the most
Chinese investment projects in Africa, manufacturing industry has always been the most
important sector.
important sector.
COST-BENEFIT ANALYSIS: DISCUSSION OF COSTS TO AFRICA
COST-BENEFIT ANALYSIS: DISCUSSION OF COSTS TO AFRICA
The expansion of world trade in the past few years as a result of globalization trend is
The expansion
endangering of world
the economies trade in thenations
of developing past few years asBroadman
in Africa. a result of globalization
(2007) trend
argued that theis
endangering
presence of the
Chinaeconomies
in Africa ofhasdeveloping
compounded nations in Africa.
economic Broadman
and social problems (2007) argued
in many that the
continents.
presence of China
Furthermore, in Africa
domestic has compounded
businesses have been economic
placed and
in asocial problems
competitive in many continents.
disadvantage by the
Furthermore, domestic
uncontrolled and businesses
unregulated Chinese have been the
presence placed in a competitive
marketplace. disadvantage
Imported Chinese by the
made brands
uncontrolled
are inferior and
and unregulated
have displaced Chinese presence
indigenous the marketplace.
products. This saturationImported Chinesemarkets
of African made brands
with
are inferiormade
Chinese and have
goodsdisplaced
has created indigenous
serious products.
economicThis saturation
hardships, of African
largely becausemarkets with
of unfair
Chinese made
competitive goods established
standards has createdforserious economic
Sino-African hardships,Unemployment,
trade relations. largely because whichof isunfair
the
competitive
immediate standards
outgrowth established
of China’s for Sino-African
unabated presencetrade
and relations.
dumping, Unemployment, which isand
has reached disturbing the
immediate outgrowth
unprecedented of China’s
proportions, unabated are
and businesses presence
closinganddowndumping,
in manyhas reached
African disturbing
cities. As recentand
unprecedented
studies (Taylor,proportions,
2009; Rotberg,and 2008;
businesses
Alden,are2007)
closing
havedown in manylarge
determined, African cities.
Chinese As recent
state-owned
studies (Taylor,contract
corporations 2009; Rotberg, 2008; Alden,
with governments and 2007)
focus have determined,projects
on construction large Chinese state-owned
and infrastructure
corporations
maintenance,contract with governments
heavy industry (oil drillingand andfocus on construction
logging), projects and Over
and telecommunications. infrastructure
800 of
these projectsheavy
maintenance, were established
industry (oil in Africa
drillingaround 2006 and and
and logging), weretelecommunications.
increasingly staffed with OverChinese
800 of
workers.
these Some
projects wereofestablished
them were African
in Africa contracted
around 2006 andprojects, while others
were increasingly were
staffed withChinese
Chinese
development
workers. Someaidofprojects
them financed
were African by China’s central and
contracted provincial
projects, whilegovernments,
others were whoChinese
were
paid with African
development resources.
aid projects A study
financed bybyChina’s
Taylor central
(2009) noted that a common
and provincial complaintwho
governments, against
were
Chinese
paid companies,
with African echoedAby
resources. studylocal
by business-owners
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458
458
treatment, concessions, and privileges from governments. This unbridled appeasement of
Chinese competitors in Africa has become a major source of frustration to local enterprises, to
the extent that many of them can no longer sustain their business operations.
DISCUSSION OF BENEFITS TO AFRICA
China and Africa have attracted each other intellectually, culturally, and commercially as
early as the T’ang dynasty (Broadman, 2007). Evidently, China has become the largest investor,
trader, importer, exporter, and aid donor in a number of strategic African countries, and a major
new economic force in the entire sub-Saharan Africa. Before the turn of the 21st century, China
supported and backed a number of anti-colonial liberation movements with their sophisticated
weapons, arms, training, and funds. Studies indicate that in the final years of the twentieth
century, China and Russia provided far more weapons to sub-Saharan African than did other
industrialized nations, including the United States. For example, China single-handedly
constructed arms factories in the Sudan and Uganda. Their equipment fueled both sides of the
Ethiopian-Eritrean war, assisted the air force of Zimbabwe, and assisted the armies of over a
dozen sub-Saharan nations (Baum, 1994; Bonga-Bonga, 2006; Broadman, 2007). China has been
involved in the education of many African students by providing scholarships and encouraging
different kinds of exchange programs. African citizens have benefited immensely from China-
organized seminars, training courses, and symposia concentrated on such fields as management
capabilities, engineering skills, and school administration. In his recent assessment, Broadman
(2007) pointed out that China’s Ministry of Education (MOE) developed courses at local
universities for African teachers, engineers, and professionals. From 2002 to 2006, Jlin
University trained 225 Africans in long-distance education. Similarly, Northeastern Normal
University established a base for training Africans, and has completed nine seminars for more
than 200 administrators from more than thirty African countries.
DISCUSSION AND POLICY IMPLICATIONS
Sino-African trade prospered rapidly over a number of years largely because of the high
demand for natural resources by China and its industrial advantage in manufactured products
against sub-Saharan African countries. The growth is also attributable to the complementary
situation between African countries and China based on the endowment of natural resources in
Africa versus skill manpower in China (Broadman, 2007). While this complementary
development appears seemingly beneficial to the bilateral trade, it is critically important that
African countries engage in a long sustained strategic plan that will leverage the current export-
boom revenue in order to create opportunities for long term economic benefits through export
diversification.
Understandably, participation in global markets will continue to enrich the economic
development of Africa, but there is an urgent need to control excessive importation of goods and
services from China. It is counter-productive to eliminate tariffs, quota, and quality control
measures in any bilateral trade agreement, because it engenders the degree of market saturation
that ultimately undermines domestic productivity. Further, it is important that African leadership
provides adequate financial resources and protective measures for their businesses. It is not cost-
effective to allow unrestricted imports from China into the marketplace, as it compromises
African enterprises and places them in a precarious competitive disadvantage. African
459
governments should engage in market negotiations with China based on the principle of
comparative or absolute advantage. Indeed, a more realistic approach for Africa is to limit the
quantity of importation of Chinese goods, and to encourage domestic businesses in order to
ensure employment and sustainable economic advancement. As Oyewole & Okoro (2008)
suggested, sub-Saharan region should raise its tariffs to get higher net barter terms of trade and
then increase its trade volume (imports plus exports) in order to take advantage of favorable
terms of trade. African countries, especially the sub-Saharan region, should export more goods in
order to gain from trade surplus.
CONCLUSION
Although China’s policy toward Africa indicates a new type of strategic bilateral trade
agreement, including the complete plan of the orientation and priorities for Sino-African
friendship and cooperation, data, and the issues expressed in recent studies indicate an imbalance
in their economic relationship. African governments should renegotiate their trade agreements
with China to ensure that it is mutually beneficial. There is an overwhelming evidence that the
effect of cheap Chinese imports are having on Africa’s manufacturing base, particularly clothing
and textile sectors of the economy, have caused a serious decline in productivity and national
revenue. It is strongly suggested that international development communities, especially The
World Bank, should consider playing a proactive and instructive role in supporting sub-Saharan
African countries to strengthen and sustain their institutional and infrastructural capacities,
improve governance processes, and encourage domestic economic adjustments that can face up
to the increasing Chinese competitiveness.
REFERENCES
Alden, C. China in Africa. London: Zed Books, 2007.

Baum, R. Burying Mao: Chinese Politics in the Age of Deng Xiaoping. Princeton, NJ: Princeton
Bonga-Bonga, L. “Can China Help Revive the African Textile Industry?” Univers: Foreign
Affairs, December 7, 2006, 2.
Broadman, D. Africa’s Silk Road. Washington, D.C.: The World Bank, 2007.
Ebel, R. China’s Energy Future: The Middle Kingdom Seeks Its Place in the Sun. Washington,
DC: Center for Strategic and International Studies, 2005.
Luo, Y. How to Enter China: Choices and Lessons. Ann Arbor: The University of Michigan
Press, 2000.
Lyman, P. China’s rising role in Africa. Presentation to the US-China Commission, Washington,
D.C., July 21, 2005.
Ngome, I. “Cameroonian Perceptions of Chinese Invasion.” AfricaFiles.
http://www.Africafiles.org/article.asp?ID=15986, 2007.
Oyewole, P., and Okoro, E. “Who Pays More in the International Market? An Examination of
Terms of Trade and Tariffs of the Countries of Africa.” Innovative Marketing, 4, (3),
2008, 6-11.
Rotberg, R. I. China Into Africa: Trade, Aid, and Influence. Washington, D.C.: The Brookings
Institution, 2008.
460
Roughneen, S. “Influence Anxiety: China’s Role in Africa.” ISN Security Watch, May 15, 2006,
1-4.
Shelton, G. China, African and Asia: Advancing South-South Cooperation.
http://bibliotecavirtual.clacso.org.ar/ar.libro/sir/politics/shelton.rtf, 2005.
Spring, A., and Jao, Y. China in Africa: African Views of Chinese Entrepreneurship.
International Association of African Business Development Conference, Gainesville, FL,
2008.
Spring, A., and McDade, B. African Entrepreneurship: Theory and Reality. Gainesville, FL:
University of Florida Press, 1998.
Stiglitz, J. Globalization and Its Discontents. New York: W.W. Norton Company, 2003.
Sylvanus, N. Chinese Devils?” Perceptions of the Chinese in Lome’s Central Market.
http://www.globalizatio-africa.org/papers/82.pdf, 2007.
Taylor, I. China’s New Role in Africa. Boulder, CO: Lynne Rienner Publishers, 2009.
Tull, D.M. “China’s Engagement in Africa: Scope, Significance and Consequences. Journal of
Modern African Studies, 44, (3), 2006, 459-479.
UNCTAD (United Nations Conference on Trade and Development). World Investment Report.
Geneva: United Nations, 2008.
Wines, M. “In Africa, Wary Thanks for Hu.” International Herald Tribune, February 9, 2007.
World Bank World Development Indicators, 2007. Washington, D.C.: The World Bank, 2007.
World Bank World Development Indicators, 2008. Washington, D.C.: The World Bank, 2008.
461
CHAPTER 19
LEADERSHIP
462
CORPORATE WOMEN LEADERSHIP IN INDIA: ISSUES & CHALLENGES
Rajeshwari Narendran, Mohanlal Sukhadia University

rajeshwari18@yahoo.com
V Narendran, Academy of Learning Excellence Research & Training, India

dr.narendranv@yahoo.co.in
Puja Mathur, Mohanlal Sukhadia University

pmj31@rediffmail.com
ABSTRACT
Good leadership is an essential ingredient for success, be it business, government,

service, organizations, religion, family or society for that matter. The present study attempts to
explore issues and challenges before corporate women leaders of India specifically as this field is
yet to pace up with the world standards due to many reasons. More importantly, there could not
have been better time for women executives in corporate India to come together for some
collective thinking on the opportunities for their advancement to leadership and top management
positions than the present pressures of a fast-growing, talent driven & global- benchmarking
Indian Corporate and Economy. It is not enough increasing the ‘number’ of women in the
workforce; the priority should also be on including women in top-management positions at the
board of directors, president-level or CEO- level.
INTRODUCTION
Indian women have demonstrated great leadership qualities from times immemorial.
Indian history has come across great women rulers, queen warriors, freedom fighters, saints,
scholars, leaders, writers, social workers even vice-chancellor of great universities in the Vedic
era etc. Indian history shows that women had a dignified place in ancient India and they
participated equally in social activities with men. They shouldered the responsibility in
maintaining the culture, religious atmosphere and looking after the development of the family.
“Corporate India” needs to collectively move from a narrowly defined objective of
increasing the number of women in key positions and short term results to a broader and long-
term vision for setting the tone and strong vision and sustained agenda for bringing more women
into leadership positions in companies and in lateral segments of Indian business and society.
Indian companies are presently only “testing – the – waters” to see if senior women executives
are able to perform to the companies needs- without a real commitment in bringing them quickly
into the mainstream of top – management positions. In sharp contrast to the Indian situation,
global companies and multinationals have clearly recognized the business case for the important
role of women as a team member of core management group, customers, general employees and
investors – and are already translating this into the company fabric by appointing a greater
number of women executives in senior positions, including the traditional conservative areas
such as corporate boardrooms, CFO’s and risk-officers, corporate legal counsels, independent
directors etc. Most notable among these are IBM, Citigroup, Shell Group, Unilever, GE Corp,
and E.I. DuPont – which may also be the best employers worldwide.
463
LEADERSHIP, POWER AND EMPOWERMENT
Leadership is intimately connected to power. Power can be understood as a person’s

access to economic, political, socio-cultural, physical and mental spaces. By “space” is meant
that which allows a person, the place/freedom/margin, to do what s/he intends to do. Initially
every person has an allotment of spaces at a moment in time. Spaces determine the person’s
capacity to act and the ultimate behavior both within household and outside it. A constriction of
spaces amounts to a lack of power to act. It also accounts for fewer over alternatives within
which decisions can be taken. Here it is useful to make a four-fold demarcation of power: The
first, ‘Power Over’ – involves a relationship of domination/subordination. The second ‘Power
To’ – relates to having decision – making authority to solve problems and can be creative and
enabling. The third, ‘Power With’- involves people organizing with a common purpose or
common understanding to achieve collective goals. The fourth, ‘Power Within’ – refers to self-
confidence, self-awareness, and assertiveness.
Leadership is connected with all four dimensions of power. A leader has power over
others, say, teams. The leader also has the power to, say to take decision on behalf of the group
with the presumption that it is in the latter’s best interests and group trusts the judgment. The
leader is also responsible for generating power-with say, so that the group/team functions well
together. Finally, the most vital dimension of leadership is when power-within is generated in the
group/team as also within the leader her/himself. Constricted spaces negatively affect power
over, to, power with and power within.
In the context of an organization, empowerment cannot be given to anyone, nor is it a
goal that can be reached. Empowerment is a process whereby constraints that impede equal
participation are reduced so that the inequality starts moving towards becoming equality. Given
skewed distributions of women in leadership positions within organizations, it can be an
empowering exercise for organization to consciously nurture women’s leadership. Leadership is
immediately an expansion of political space in terms of position. It is also linked to an expansion
of economic space in terms of remuneration. Physical space which is basically in terms of
mobility and or access and control over larger geographical areas also expands with leadership.
What however is stubborn and resistant to expansion is socio-cultural space. This space is
characterized by the norms that prescribe roles and positions across men and women in
organizations. Gender stereotyping unusually prescribe women to be in positions without
authority. Senior positions that need for decisions to be taken are often vested with men; women
also sometimes lack the confidence to see themselves in positions of power and leadership due to
restricted mental spaces. The ability to take strategic decisions, be responsible for them; manage
people, teams and situations is perceived as lacking in women themselves. The reason for this
can be found in the two domains that women’s work is located.
Women work in a dual world of work. One is in the market economy where goods and
services are produced and the other in the care economy where human resources are produced
and maintained. The care economy entails the activities of cooking, cleaning and nurturing. It
maintains infants, children and the aged, which are basically the present, past and future
generations of human resources. This economy is unpaid and unrecognized in national income
statistics but is actually productive and central to the market economy. Due to socio-cultural
norms and the gender stereotyping of work, the care economy is primarily the responsibility of
women. This impinges upon their ability to participate in the market economy. Within the care
economy women take responsibility for other members of the family and are adept in managing
464
resources and different levels of relationships. They are also responsible for what are called
‘status production’ activities for the household which are basically those activities that maintain
harmonious relations of the family with relatives, neighbors, etc. Yet they lack control over
resources and are not the primary decision takers in the family. This socialization permeates into
the market economy where in professional spaces women do not automatically gravitate towards
positions of leadership.
ISSUES AND CHALLENGES BEFORE INDIAN WOMEN
Women constitute nearly half of India’s population but the women in management and
administration position is less than 3% out of 2709 board positions in the BSE 200 companies,
only 43 are filled by women. So, breaking the glass ceiling is the need of the hour.
Gender Stereotyping
The phenomenon of gender segregation in the workplace remains valid regardless of
profession or differing social and cultural factors on which the different systems of work are
based. ‘Deeply entrenched in our definition of what it means to be manager is the belief that the
manager will be male (Shrank & Kanter, 1994). There are innumerable studies (Fels, 2004;
Manning, 2002; Rosener, 1990) debating whether women lack the abilities and personality traits
required of managers. This stereotyping of management poses a major obstacle to women who
are qualified to excel in positions of leadership. With organizations and jobs being gendered
(Webb, 1991) stereotypes around women managers get perpetuated. In comparison to men,
women are often not recognized or appreciated for their contributions or capabilities. This lack
of parity results in an inequitable position, classification, grade and salary between men and
women catalyst.
Coping Up With Dual/Multiple Roles

Marriage is another road block in the career success of Indian women followed by child
rearing. Traditional mindset of roles, food habits and life style has not changed. The dual role of
performing unpaid work at home, rearing and tutoring children and working in the work place
adds more responsibility to the women. Organizations are hesitant to employ women as they feel
that women taking maternity leave will mean a set back for their operations.
Long Work Hours and Travel: Easier Said Than Done

Higher positions demand longer hours of working, lot of long as well as short distance
travel and attending late meetings. Women are therefore left out of work loop as they do not have
time to attend meetings and discussions or networking after work hours. Moreover, meeting with
many people for business sometimes is looked down by society and it becomes rather a pain in
the neck to maintain some vital family relations due to such hush-hush.
Glass Ceiling
“I have both a brain and a uterus, and they both work” (Ely, 1995). This volatile
statement and many more such exchanges have been made by women managers as a response to
their inability to reach higher levels of management. Investigation of glass ceiling suggests that
beliefs and attitudes held by organizational members (i.e. women are not viewed as leaders) as
well as contextual aspects of the organization (i.e. social structures) contribute to the glass
ceiling effect, which is experienced by many women in management. Scarcity of women in
465
executive positions across a variety of countries – a mere 3 percent has been attributed to the
glass ceiling effect, (Adler & Izraeli, 1994). It is argued by researchers that women may not
create the glass ceiling but help maintain it (Rosener, 1990). These stereotypical cages need to be
broken down by women managers who are struggling to emerge as leaders.
Employee Friendly Policies: Women Friendly?

Women friendly polices play a crucial role in recruiting and retaining high- quality
women professionals and promoting their full effectiveness at work. While most Indian male
bosses do not feel that anything needs to be done in their organizations to make them more
women friendly; many of the MNCs track gender diversity ratios because of international
directives. While some organizations say that they are against separate policies for women on
grounds of discrimination, others say most of their employees are young and do not face any of
the problems relating to married women.
Maintaining Work Life Balance

An individual’s life can be divided into four basic quadrants-self, workplace, family and
friends and community. Work life balance is about people having a measure of control over
when, where and how they work. It is achieved when an individual’s right to a fulfilled life
inside and outside paid work is accepted and respected as the norm, to the mutual benefit of the
individual, business and society. This concept in namely the work life balance gains importance
when it comes to a female employee.
Career Path of Women

Experts say that important differences still exist between the career paths of men &
women. It results from a series of circumstances such as managerial boards` decisions to choose
one of their own kinds using such criteria as seniority, personal affinity and similar educational
background. Another factor is that when many women reach a certain age, they decide to invest
more time in their family, rather than step on the accelerator of their professional career.
Lack of Influential Mentor for Women in Management

Every leader in making looks upon a Godfather or Mentor. The dearth of such Mentors
in the corporate becomes rather more difficult for women to find a women mentor/godmother
due to the fact that they may be the ‘firsts as trend setters’ to reach the corporate ladder. Many a
times it’s a social stigma attached to having a male mentor for woman as the family and friends
may not digest it and society may try to find a ‘meaning’ to such relation, adding the
complexities for women.
Health Issues
The health issues of women are so different than men that they often become difficult to
discuss, disclose or deal with, at the workplace. It is heartening to know from the qualitative
research interviews from many women working in reputed organization, they even face sarcastic
comments from male colleagues about health issues and even sometimes off the corporate
meeting this becomes a matter for laughter.
466
CUTTING EDGE WOMEN MANAGERS AND LEADERS
Women are cutting edge managers and leaders because they have certain management
qualities and traits such as patience, tolerance, honesty, loyalty, assertiveness, dedication,
communication skills, etc.
Multi-Task Masters
Women are natural multi-task masters due to multiplicity of roles played. They are used
to handling budgets, menus, children’s activities, homework, exams, and guests and just about
everything else. Women are mentally much tougher and this is not an individual trait but a
genetic make up. The hormonal changes that take place in their bodies protect them from stress.
Team Building
Women tend to have more of a desire to build teams which is one of the important
qualities a leader should possess. The natural phenomenon of holding the family together comes
handy to work as a team player and be empathy oriented.
Non-Aggressive Attitude
Handling children’s problems, counseling, coping up with the stress develops tolerance
in women. Women as managers are better handlers of human emotion and their non aggressive
attitude is their biggest plus point.
Good Model for the Followers

Women project the ability to be credible, reliable and trustworthy. They prefer to
influence rather than command. They view power as a means to change, by sharing information
and empowering others. They act as good example for the followers.
Commitment towards the Organization

If women find an employer who values their potentials, they become indebted to the
organization to give their best output and they put in more efforts. Women are more dedicated
and committed towards their work and they stick at one job for a longer time.
Facilitators to the Subordinates

As managers, women try to create an environment that subordinates would be
empowered and they do not hesitate to appreciate the subordinates for their good performance as
they do to their children. They motivate their subordinates, which develops creativity and interest
of subordinates towards accomplishment of the task.
Delegation of Authority
The ability to make the staff feel value and individually recognized is a needed skill for a
manager. They delegate more readily and express their appreciation for hard work more often
and prove to be better at making subordinates feel value and rewarded.
CONCLUSION
Women’s participation in management jobs has become an increasingly important issue

in the corporate world. Even when the percentage of women in management is less, they are
467
proving to be successful and are acting as inspiration for other women. The polite and soft nature
of women is helping them to attain the manager’s position and they are proving the best. Over
the next few years, the penetration of women managers will go up. The progress is slow because
of the hurdles on their way. Corporate should judge the leadership qualities of women and use
the potentials so that with efficient women managers on the lead, many companies can face a
fortune future.
REFERENCES
Adler, N., and Izraeli, D.N. “Where in the World are the Women Executives?” Business
Quarterly, Autumn, 1994.
Ely, R.J. “The Power in Demography: Women’s Social Constructions of Gender Identity at
Work.” Academy of Management Journal, 38 (3), 1995, 589-634.
Fels, A. “Do Women Lack Ambition?” Harvard Business Review, 82, (4), 2004, 50-93.
Manning, T.T. “Gender, Managerial Level, Transformational Leadership.” Management
Review,17,(5) 2002, 207-16.
Rosener, J.B. “Ways Women Lead.” Harvard Business Review, 68, (6), 1990, 119-125.
Shrank, N., and Kanter, R.M. Reach for the Top: Women and the Changing Facts of Work Life.
Boston, MA: Harvard Business School Press, 1994.
Webb, J. “The Gender Relations of Assessment.” In J.F. Cozens and M.A.West, eds., Women
and Work. Philadelphia: Open University Press, 1991.
468
THE RELATIONSHIP BETWEEN LEADERSHIP STYLE AND EMPLOYEE STRESS
Debra Lopez, Our Lady of the Lake University

dmmartinez2691@lake.ollusa.edu

mtgreen@lake.ollusa.edu
Diana Garza-Ortiz, Our Lady of the Lake University

dgarza-ortiz@lake.ollusa.edu
ABSTRACT
As a leader, it is imperative to focus not only on production but at the same time be
considerate of employees. This will certainly reduce employee stress and high turnover rates.
The Maslach Burnout Inventory (MBI) was utilized to measure three general sources of stress;
emotional exhaustion, depersonalization, and personal accomplishment. The Leadership
Behavior Description Questionnaire (LBDQ) is a well established leadership instrument in
which employees describe the behavior of their leader as production oriented and/or
consideration oriented. This study found that the more hours followers worked the more
production oriented the followers rated their leader. The more considerate the leader was the less
depersonalized the follower felt. The more considerate the leader was the less emotionally
exhausted the follower felt. The more production-oriented the leader was the more emotionally
exhausted the follower was.
INTRODUCTION
Leadership style has been known to impact multiple areas of follower performance.
Kuoppala, Lamminpaa, Liira and Vainio (2008), for example, conducted a meta-analysis on 27
studies that found an association between leadership and job satisfaction, but not with job
performance. Stress has become an increasingly important concern in organizations. Stress is
known to affect employees’ well-being as well as organizational success. Stress can be defined
as an individual’s state of mind when she/he encounters a situation of demand or constraint in an
organization and perceives the same as harmful or threatening (Singh-Kang & Singh, 2004). In
the United States alone, 30% of the working population reports that there have been three or
more days in the last month during which the cause of work has caused them to behave poorly
with friends and family (Singh-Kang & Singh, 2004).
BACKGROUND
Leadership and Employee Stress

The limited literature on leadership and employee stress generally indicates that
leadership style can limit employee stress. For example, Kwag and Kim (2009) found that the
supervisors’ support effected the employees’ exhaustion and role overload. In a 2007 study,
Hetland determined that transformational leadership was negatively linked to cynicism and
positively linked to professional efficacy. Omolayo (2007) found that workers under the
autocratic leadership style experienced higher job-related tension than workers under a
469
democratic leadership style. Palm (2007) also found that emotional exhaustion was negatively
correlated to job satisfaction. Densten (2005) found that inspirational motivation had a negative
effect on emotional exhaustion and inspirational motivation had a positive effect on personal
accomplishment.
Age, gender, educational level and working hours can also affect employee stress. For
example, Chauhan (2009) found that managers in the lower age group (up to 35 years) scored the
highest on depersonalization. Wang, Jing, and Klossek (2007) also found that age had a negative
relation with job stress. Conversely, Dyrbye, Shanafelt, Thomas, and Durning (2009) found that
there was no difference in burnout among age groups. Im (2009) also found that there was no
relationship between age and stress.Some studies have found that gender does make a difference
in employee stress. For example, Mirvis (2006) found that high levels of depersonalization were
significantly more common in women respondents than men. In another study, Bouckenooghe,
Fontaine, and Vanderheyden (2005) found that men reported lower self-transcendence than
women. Women, however, experienced more stress than the men.
Generally, educational level has also been associated to employee stress. Wang, Jing, and
Klossek (2007) conducted a study to examine the relationship between demographic
characteristics, job stress, cognitive and affective conflict confronted by Chinese top managers. It
was found that the higher the education level of top managers, the more conflict they will
experience with a certain task.
STATEMENT OF THE PROBLEM
Working individuals spend most of their working hours at work and this is time spent
away from family and friends. Although work is sometimes enjoyable, it can cause hardships
with personal lives due to the involvement of stress. Stress is inevitable in most cases and
everyone deals with stress differently. Too much stress, though, sometimes affects health and
well-being. Some individuals work poorly under stress and this causes organizations to be
negatively affected.
There are many factors that have been found to reduce stress in the workplace. These
factors have been found to be effective contributors to the well being of not only the employee
but also the well being of the organization. The Human Resource Management Report (2002)
stated that improving the openness of communication between management and employees
alone would help in the reduction of stress. It would also be beneficial by expanding or
improving training and development opportunities.Employees spend a great deal of time
following organizational duties and roles. Sometimes these roles and duties impact job
satisfaction and job performance. While we know from research that leadership effects follower
performance and satisfaction, there is insufficient research on the degree to which leadership can
reduce stress in employees. In particular, it is unclear to what degree leadership can impact stress
when controlling for other potential employee stressors such as time spent commuting to work,
time outside of work on domestic activities, time spent outside of work caring for family
members, as well as demographic variables such as gender, ethnicity, age and education.
470
METHODOLOGY
Participants
The population for this study consisted of working adults from San Antonio and
Harlingen, Texas. The participants came from a wide range of professions including education,
law enforcement, non-profit and for-profit organizations. The sample was heterogeneous in
education level, ethnicity and gender.
Instruments
This research study investigated the relationships among specific characteristics of
employees, employee stress, and leadership style. The Maslach Burnout Inventory (MBI) was
utilized to measure three general sources of stress; emotional exhaustion, depersonalization, and
personal accomplishment. The Leadership Behavior Description Questionnaire (LBDQ) is a
well established leadership instrument in which employees describe the behavior of their leader
as production oriented and/or consideration oriented.
Researchdesign
Using a multiple regression, the study examined the relationships between the
independent variables: production-oriented leadership, consideration-oriented leadership, gender,
age, marital status, educational level, ethnicity, working hours, personal time and the dependent
variables: emotional exhaustion, depersonalization, and reduced personal accomplishment.
RESULTS
Descriptive Statistics
The descriptive statistics consisted of 138 participants in the study. The age ranged from
18 to 65 with a mean of 38.31. The minimum number of part time hours worked per week was 4
hours, while the maximum number was 32 hours. The number of full time hours a respondent
indicated she/he worked per week ranged from 40 to 56 with a mean of 40.92.
The leadership score of production was the rating the participant gave to his or her leader
on the LBDQ. Production-oriented leadership is measured to the degree of encouraging overtime
work and pushing for increased production. Scores ranged from 1.5 to 5.0 with a mean score of
3.47. Consideration-oriented leadership is measured to the degree of being friendly and
approachable as well as treating all group members as his/her equals. The leadership score of
consideration ranged from 1.3 to 4.9 with a mean score of 3.50.
The burnout subscale of emotional exhaustion ranged from 0 to 6.0 with a mean score of
2.63. Emotional exhaustion is the extent to which the employee felt emotionally drained and
burned out from work. The burnout subscale of Cynicism/Depersonalization ranged from .0 to
6.0 with a mean score of 1.86. Cynicism/Depersonalization is the extent the employee felt less
interested and less enthusiastic about work. The burnout subscale of personal accomplishment
ranged from 2.7 to 6.0 with a mean score of 5.27 and measured the degree the employee felt
she/he had accomplished many worthwhile things in her/his job as well as feeling like she/he
could effectively solve the problems that arise at work.
471
Employee Stress
A full and series of reduced model multiple regressions were run to predict emotional
exhaustion using the predictor variables of consideration-oriented leadership, production-
oriented leadership, age, gender, marital status, ethnicity, education, organizational type, number
of actual working hours, hours spent on work related emails, hours spent on work related phone
calls, hours spent on work related texting, hours spent preparing for the next day, hours spent
commuting to and from work, hours spent caring for children or other family members, hours
spent on domestic activities, and hours spent on other family needs found four significant
predictors of emotional exhaustion. Four significant predictors were found.
How consideration-oriented the leader was explained 10% of the variance of emotional
exhaustion (R² = .10, B = -.32, p = .00). The Beta weight for leader consideration was -.32
indicating that the more considerate the leader was the less emotionally exhausted the follower
felt. How production-oriented the leader was explained an additional 7% of the variance in
emotional exhaustion ( R² = .07, B = .27, p = .00). The Beta weight for leader production was
.27 indicating that the more productive the leader was the more emotionally exhausted the
follower was. The age of the participant explained an additional 3% of the variance of emotional
exhaustion ( R² = .03, B = -.18, p = .03). The Beta weight for age was -.18 indicating that the
older the follower was the less emotionally exhausted she/he felt. The variable on hours spent
preparing for the next day explained an additional 3% of the variance in emotional exhaustion
( R² = 03, p = .03).
A full model was also run to predict cynicism/depersonalization. Results of a multiple
regression using the same independent variables found only one significant predictor of
depersonalization. How consideration-oriented the leader was explained 6% of the variance in
depersonalization. The Beta weight for leader consideration was -.24. The more considerate the
leader was the less depersonalized the follower felt.
A full model was also run to predict personal accomplishment. Actual working hours the
followers worked explained 7% of the variance in personal accomplishment. Hours spent on
domestic activities explained an additional 5% of the variance in personal accomplishment. The
Beta weight for actual working hours was .27 explaining the more working hours the follower
worked the more the follower felt personal accomplishment.
DISCUSSION
It is often believed that if leaders encourage overtime work and emphasize being ahead of
competing groups along with pushing for increased production that organizational goals will get
accomplished and everyone will be happy. Even though increased production is necessary, it is
imperative to consider the individual needs of each employee. Out of all the independent
variables that mattered most to employee stress in this research, leadership stood out among the
rest. This research found that the more considerate the leader was the less depersonalized the
follower felt. The more considerate the leader was the less emotionally exhausted the follower
felt. The more production-oriented the leader was the more emotionally exhausted the follower
was. As a leader, it is imperative to focus not only on production but at the same time be
considerate of employees. This will certainly reduce employee stress and should, in turn, lower
turnover rates.
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REFERENCES
Bouckenooghe, D., Fontaine, J., and Vanderheyden, K. “The Prediction of Stress by Values and
Value Conflict.” The Journal of Psychology, 139, (4), 2005, 369-382.
Chauhan, D. “Effect of Job Involvement on Burnout.” The Indian Journal of Industrial Relations,
44,(3), 2009, 441-453.
Densten, I.L. “The Relationship Between Visioning Behaviours of Leaders and Follower
Burnout.” British Journal of Management, 6, 2005, 105-118.
Dyrbye, L.N., Shanafelt, T.D., Thomas, M.R., and Durning, S.J. “Brief Observation: A National
Study of Burnout Among International Medicine Clerkship Directors.” The American
Journal of Medicine, 122, (3), 2009, 310-312.
Hetland, H., Sandal, G.M., and Johnsen, T.B. “Burnout in the information technology sector:
Does leadership matter?” European Journal of Work and Organizational Psychology, 16,
(1), 2007, 58-75.
Human Resource Department Management. “HR Budgets: How to Handle the Three Biggest HR
Budget Crises. How to Deal with HR’s Top Stress Factors.” The Monthly Newsletter of
IOMA’s Human Resource Department Management Report, 2002, 6-11.
Im, T. “An Exploratory Study of Time Stress and Its Causes Among Government Employees.”
Public Administration Review, 69, (1), 2009, 104-115.
Kuoppala, J., Lamminpaa, A., and Liira, J. “Leadership, Job Well-Being, and Health Effects – A
Systematic Review and a Meta-Analysis.” Journal of Occupational and Environmental
Medicine, 50, (8), 2008, 904-915.
Kwag, S.H., and Kim, M.H. “The Effects of Job Burnout on Job Performance.” ABR & TLC
Conference Proceedings, 2009, 1-14.
Mirvis, D.M., Graney, M.J., and Ingram, L. “Burnout and Psychological Stress Among Deans of
Colleges of Medicine: A National Study.” Journal of Health and Human Services
Administration,29, (1), 2006, 4-25.
Omolayo, B. “Effect of Leadership Style on Job-Related Tension and Psychological Sense of
Community in Work Organizations: A Case Study of Four Organizations in Lagos State,
Nigeria.” Bangladesh e-Journal of Sociology, 4, (2), 2007, 1-8.
Palm, I. “The Relation Between Leadership and Outcome Variables, Follower Personality as a
Moderator.” Utrecht University, Retrieved from http://igitur-archive.library.uu.nl/student-
theses/2008-1029-201234/Palm%200031445.pdf, 2007.
Singh-Kang, L., and Singh, R. “Identifying Stressors at Work: A Case of Employees in the
Electronics Industry.” Decision, 31, (1), 2004, 51-72.
Wang, G., Jing, R., and Klossek, R. “Antecedents and Management of Conflict: Resolution
Styles of Chinese Top Managers in Multiple Rounds of Cognitive and Affective
Conflict.” International Journal of Conflict Management, 18, (1), 2007, 74-97.
473
LEADERSHIP STYLE DIFFERENCES BETWEEN MEN AND WOMEN:
A REVIEW OF THE SCHOLARLY LITERATURE
Esther Chavez, Our Lady of the Lake University

eschavez@lake.ollusa.edu

mtgreen@lake.ollusa.edu
Diana Garza-Ortiz, Our Lady of the Lake University

dgarza-ortiz@lake.ollusa.edu
INTRODUCTION
Leadership has been defined in many ways. According to Northouse (2004, p. 3),
“leadership is the process whereby an individual influences a group of individuals to achieve a
common goal.” What can be interpreted from this definition is that leadership is a dyadic
relationship between a leader and a follower. Influence is what a leader exerts as a way to
motivate followers. Most interactions occur in group settings although leadership can also be
displayed by an individual who has no followers. A leader’s objective is to achieve goals.
Yukl (2002) defined leadership as “the process of influencing others to understand and
agree about what needs to be done and how it can be done effectively, and the process of
facilitating individual and collective efforts to accomplish the shared objectives” (p. 7). Both
Northouse and Yukl use the word influence in their definitions of leadership. Both authors agree
that the overall objective is to achieve goals. Neither author distinguishes leadership in terms of
gender. According to the Women’s Bureau (2006), 118 million women comprised 46 % of the
total U.S. labor force. Yet, women comprise only 14.8% of Fortune 500 companies’ top
corporate officers and 1% of Fortune 1,000 chief executive officers (Catalyst, 2007). After a
series of scholarly studies, it is apparent that women tend to lead differently than men.
Historically, the vast majority of noted leaders have been men. This is particularly true
for those labeled charismatic-transformational—Ghandi, King, Mandela, Kennedy, and even the
notorious Hitler, Stalin and Bin Laden. By comparison, there are only a handful of charismatic
female leaders—such as Eleanor Roosevelt, Queen Elizabeth I, and Gold Meir. Yet if the
elements of charismatic-transformational leadership are analyzed, they suggest that women
might be more likely to engage in transformational leader behaviors and be more effective
transformational leaders than men (Bass & Riggio, 2006).
META-ANALYSIS
Gender and Leadership Style

Meta-analytic studies compile a variety of previous studies in order to be able to provide
generalized statements about a subject. In the most recent meta-analysis on gender and
leadership styles, Eagly, Johannesen-Schmidt, and van Engen (2003) conducted a meta-analysis
of 45 studies of transformational, transactional, and laissez-faire leadership styles. The authors
used a quantitative synthesis of studies which compared men and women on measures of
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transformational, transactional, and laissez-faire styles. These studies were conducted using
people who occupied leadership roles in organizations, and who had been rated by their
subordinates, peers, and superiors using the Multifactor Leadership Questionnaire (Avolio &
Bass, 2004).
The results of the meta-analysis revealed that female leaders were more transformational
than male leaders in their leadership styles. Females also scored higher on the subscales of
charisma, idealized influence, inspirational motivation, intellectual stimulation, and
individualized consideration.
For transactional leadership, female leaders scored higher than male leaders on the first
subscale, contingent reward. However, males scored higher on the subscales of management by
exception active and management by exception passive
The study also revealed that women surpass men in areas of leadership styles that had
positive relations to effectiveness while men scored higher in areas that had a negative
relationship to effectiveness. The authors suggested that although studies such as this meta –
analysis may document the benefits in female leadership styles, men in hierarchical type of
organizations may be reluctant to give power or authority to women in their work environment,
(Eagly, Johannesen-Schmidt, & van Engen, 2003). In another meta- analytic study Eagly, Karau
and Makhijani (1995) integrated several studies based on gender leadership effectiveness. The
authors concluded that women were rated as less effective than their male counter parts when
men numerically dominated the work environment. The meta- analysis revealed that the leaders’
gender’s effectiveness had a significant correlation with the congeniality of their gender role.
Furthermore, respondents rated women as more effective than men in feminine leadership roles
such as jobs that required interpersonal skills and the ability to foster working relationships. Yet,
respondents rated men as more effective than women in masculine leadership roles such as jobs
that required esteemed task ability and the skills to control and direct people. The study
suggested that when males or females are considered to be “out of role” as defined by their
gender terms it can produce a diminished perception of the leaders’ effectiveness (Eagly, Karau
& Makhijani, 1995).
Summary
Meta-analytic studies have found that perceiving a female leader as very similar to her
male counterpart may produce disadvantages. These disadvantages arise from the norms
associated with the female role. Studies have also found that prejudice towards female leaders
takes two forms: (a) women are evaluated less favorably because leadership ability is more
stereotypical of men and (b) leadership behavior is less desirable in women than in men. These
findings illustrated challenges women face when they struggle to cultivate an appropriate and
effective leadership style.
However, recent studies (Eagly, Johannesen-Schmidt, & van Engen, 2003) have
corroborated that although male-female differences are small, women tend to be more
transformational and are thus more focused on the aspects of leadership that predict
effectiveness. Studies have also shown that women are also more prone than men to deliver
rewards to subordinates for appropriate performance, thus demonstrating a behavioral pattern
predictive of effective performance (Eagly & Johnson, 1990).
Most research studies demonstrated that transformational leadership is one of the most
highly successful forms of leadership (Eagly, Johannesen-Schmidt, & van Engen, 2003).
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Ironically, although women tend to be more transformational than men, they occupy few senior
leadership positions.
INDIVIDUAL STUDIES OF NOTE
Groves (2005) administered an abbreviated version of Riggio’s (1989) Social Skills

Inventory, a self-assessment instrument to 326 followers of 108 managers. There were 67 male
and 41 female managers rated in the study. The managers had been employed in their current
managerial position for (M = 5.6) years. The Social Skills Inventory measures an individual’s
repertoire of social and emotional interpersonal skills. In this student male leaders were coded as
1 and female leaders were coded as 2. A positive correlation (r = .22, p < .05) was found between
gender and charismatic leadership. This correlation indicated that women were rated higher on
charismatic leadership than males. Gender was also related to overall social skills (r = .24. p <
.05).
Turner, Barling, Epitropaki, Butcher, and Milner (2004) administered the MLQ 5x to 132
leaders and 407 subordinates from Canada and the United Kingdom. The sample consisted of
leaders and followers from university, telecommunications and health care. On average three
followers rated each leader in the study. Leader’s gender was coded 0 for female and 1 for male.
The results of Pearson correlation coefficients found that female leaders were rated more
transformational than male leaders (r = -.19, p < .05). No relationship was found for transactional
(called transactional-corrective) scores. Male leaders were rated as more passive (called
transactional-passive) than female leaders (r = .28, p < .05).
In a study conducted by Gray, Dentsen & Sarros (2002), the Multifactor Leadership
Questionnaire was used to measure leaders and the outcomes of extra effort and effectiveness in
leadership in Australian small businesses. A stratified random sample of 5000 members was
selected to participate from the Australian institute of Management. The study used the
Multifactor Leadership Questionnaire (MLQ) 5x. Consistent with the findings of previous
research female executives in this study reported using transformational leadership behaviors and
contingent reward significantly more frequently than males. Females perceive themselves as
encouraging a significantly greater amount of extra effort from others than male respondents.
However, although the results were significant, the small differences mean that knowing the
gender of a leader is of little practical value in predicting individual leadership behavior.
In a 1999 study Gardiner and Tiggemann administered the Leadership Behavior
Questionnaire (LBDQ) to 30 male and 30 female managers from industries that were male-
dominated and 30 male and 30 female managers from industries that were female-dominated.
Female managers scored higher on task and interpersonal style than male managers (M= 45.29),
(M= 40.46) F (1,116) = 4.70, p< .05, and F (1,116) = 7.47, p<. 01. Additionally, in organizations
with more men, women’s behavior appeared more like that of men.
Doherty (1997) administered the Multifactor Leadership Questionnaire (MLQ) Form 5X-
Rater to followers of athletic directors (ADs) and assistant athletic directors (AADs) at the 17
universities belonging to the Ontario Universities Athletic Association (OUAA) and the Ontario
Women’s Interuniversity Athletic Association (OUAA) were the focal leaders in this study.
The results of this study indicate that female ADs/AADs and younger ADs/AADs were
perceived to exhibit the attributed charisma, inspiration, and individualized consideration aspects
of transformational leader behavior more often, and management-by-exception (passive) less
often, than their make and older counterparts, respectively. There appears to be a further
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combined effect of gender and age, where the younger female ADs/AADs were rated higher on
transformational leadership than the older males. However significance could not be determined
(Doherty, 1997).
Similar results describing women as transformational leaders were found by Druskat
(1994), who conducted an MLQ survey of 3,352 sisters, 1,541 brothers, and 1,466 priests in the
Roman Catholic Church in the United States. MLQ Form 8Y, a 40-item version of Form 5, was
used. Respondents were instructed to describe the person or group in their congregation to whom
they considered themselves accountable.
Transformational leadership divided into a factor of charisma combined with
individualized consideration and an inspirational-intellectual stimulation factor. Transactional
leadership factors that emerged were contingent reward, active management-by-exception, and a
combination of passive management-by-exception with laissez-faire leadership (Bass & Riggio,
2006).
As expected, for priests, brothers, and sisters, all were rated higher in transformational
leadership than the norms for the general population. However, the female leaders were rated as
more highly transformational in leadership by their collegial sisters than were the priests and
brothers, who were both rated by their male counterparts. Thus, in the aggregate, the sisters were
rated more highly transformational than were the brothers and priests. At the same time,
however, both brothers and priests received higher transactional scores than did the sisters.
Another study by Eagly and Johnson (1990), suggests that roll spillover may carry over
into the work place. The spillover concept, suggest that gender role expectations for women and
men carry over into the workplace causing people to have different expectations for male and
female leaders (Gutek & Morasch, 1982; Nieva & Gutek 1981; Eagly & Johnson, 1990).
In a 1990 study Eagly and Johnson administered the Leadership Behavior Questionnaire
(LBDQ) and the Least Preferred Co-Worker (LPC) questionnaire to 181 male undergraduates
and 125 female undergraduates from Purdue University. Results of the study indicated male
leaders scored higher than their male subordinates on task – orientation than female leaders
p<.01. Female leaders scored higher on interpersonal- orientation than male leaders p <05. Eagly
and Johnson’s findings suggested that both male and female leaders accentuate task orientation
when their gender matches their leadership role (Eagly & Johnson, 1990). The Authors findings
also suggest when leadership was numerically dominated by males, women leaders discarded
feminine stereotypical styles of leadership. Therefore, in order for women leaders to endure they
must adopt stereotypical styles of leadership roles (Eagly & Johnson, 1990).
MLQ (Form 5) data from four separate investigations gathered between 1986 and 1992
supported the conclusion that women display more transformational and less transactional
leadership than men (Bass, Avolio, & Atwater, 1996). In the first study, the majority of leaders
assessed - 79 females and 150 males were from middle to upper level managers from six mainly
high-tech Fortune 500 firms. Subordinates who rated these managers—219 females, 658
males—were typically selected by the focal managers themselves. In the second study, MLQ
data were gathered about 38 female and 58 male first-level supervisors. For the second study, the
subordinates –147 females and 124 males—completed the rating were selected randomly. For
the third study, 154 female and 131 male focal leaders were drawn from not-for-profit groups
such as small health care, social services, government, and other local agencies as well as small
businesses. These focal leaders selected their own 532 women and 381 men as raters before
participating in a leadership training program for the leaders. In the fourth study, the subjects—
10 female and 36 male leaders—were superintendents, principals, and staff members from public
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school districts who had asked 81 women and 50 men direct reports to rate their leadership style
(Bass & Riggio, 2006).
A similar pattern was found for transformational leadership ratings for 45 New Zealand
professional administrators and managers. Female leaders were rated higher on transformational
leadership when compared to their male counterparts. At the same time, men were found more
likely to practice management-by-exception (Bass, 1985).
In a study completed in New Zealand in 1984, 23 New Zealand professional
administrators were evaluated by their direct reports using an earlier form of the MLQ (Form 4).
Female supervisors were rated higher on each of the four respective transformational leadership
components compared to their male counterparts (Bass, 1985).
SUMMARY
Well over 100 scholarly studies were represented in the literature reviewed in this paper.
Repeatedly, the studies indicate that women leaders are more transformational than male leaders.
Because of a variety of societal stereotypes and barriers, however, many transformational women
are precluded from demonstrating the most effective form of leadership. As female public
leaders such as Hillary Clinton, Condalisa Rice, Sarah Palin and Nancy Pelosi continue to break
barriers a new generation of women leaders is entering the workplace. This generation may
finally have unfettered opportunities to transform organizations and followers.
REFERENCES
Avolio, B., and Bass, B. Multifactor Leadership Questionnaire: Third Edition Manual and
Sampler Set. Menlo Park, CA: Mind Garden, Inc., 2004.
Bass, B.M. Leadership and Preference Beyond Expectations. New York: Free Press, 1985.
Bass, B., Avolio, B., and Atwater, L. “The Transformational and Transactional Leadership of
Men and Women.” Applied Psychology: An International Review, 45, 1996, 5-34.
Bass, B.M., and Riggio, R.E. Transformational Leadership, 2nd ed. Mahwah, NJ: Lawrence
Erlbaum Associates, 2006.
Catalyst. “Women Gain Board Committee Chairs in the Fortune 500.” Retrieved Feb. 20th, 2005
from http://www.catalyst.org/knowledge/2007wbdshtml, 2007.
Doherty, A. “The Effect of Leader Characteristics on the Perceived Transformational/
Transactional Leadership and Impact of Interuniversity Athletic Administrators.” Journal
of Sports Medicine, 11, 1997, 275-285.
Druskat, V.U. “Gender and leadership style: “Transformational and transactional leadership in
the Roman Catholic Church.” The Leadership Quarterly, 5, 1994, 99-119.
Eagly, A.H., and Johnson, B.T. “Gender and Leadership: A Meta-Analysis.” Psychological
Bulletin, 108, 1990, 233-256.
Eagly, A.H., Johannneson-Schmidt, M.C., and van Engen, M.L. “Transformational,
Transactional, and Laissez-Faire Leadership Styles: A Meta-Analysis Comparing Women
and Men.” Psychological Bulletin, 129, 2003, 569-591.
Eagly, A.H., Karau, S.J., and Makhijani, M.G. “Gender and Effectiveness of Leaders: A Meta-
Analysis.” Psychological Bulletin, 117, 1995, 125-145.
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Gardiner, M., & Tiggermann, M. “Gender Differences in Leadership Style, Job Stress and
Mental Health in Male-and-Female Dominated Industries.” Journal of Occupational &
Organizational Psychology, 72, (3), 1999, 301-316.
Gray, J.H., Densten, I.L., and Sarros, J.C. “Profiling Australian Small Business Leadership.”
Australian Institute of Management. Retrieved November 20th, 2006 from
http://www.buseco.monash.edu.au/mgt/research/working-papers, 2002.
Groves, K.S. “Gender Differences in Social and Emotional Skills and Charismatic Leadership.”
Journal of Leadership & Organizational Studies, 11, (3), 2005, 30-46.
Gutek, B.A., and Morasch, B. “Sex-Ratios, Sex-Role Spillover, and Sexual Harassment at
Work.” Journal of Social Issues, 38, 1982, 55-74.
Nieva, V.F., and Gutek, B.A. Women and Work: A Psychological Perspective. New York:
Praeger, 1981.
Northouse, P.G. Leadership Theory and Practice. Thousand Oaks, CA: Sage, 2004.
Turner, N., Barling, J., Epitropaki, O., Butcher, V., and Milner, C. “Transformational Leadership
and Moral Reasoning.” Journal of Applied Psychology, 87, (2), 2004, 304-311.
Women’s Bureau. “Women in the Labor Force 2006.” U.S. Department of Labor Women’s
Bureau. Retrieved November 20th, 2006 from http://www.dol.gov/wb/factsheets/Qf-
laborforce-06.htm, 2006.
Yukl, G.A. Leadership in Organizations, 5th ed. Englewood Cliffs, NJ: Prentice Hall, 2002.
479
LEADERSHIP TRANSFORMATION: RE-TOOLING STRATEGIES
FOR IT LEADERSHIP
Ranjith Nayar, Helsinki School of Economics

ranjith.nayar@gmail.com
Rajeshwari Narendran, Mohanlal Sukhadia University

rajeshwari18@yahoo.com
ABSTRACT
The end of the information era and beginning of the knowledge era is bringing about
major strategic challenges leading to the advent of hitherto unexplored initiatives like Samsung’s
US$4 billion “Green Initiative” of 2009. What kind of leadership drives such mega and non-
traditional initiatives will determine the success of the initiative – as well as that of the
organization itself, for, such is the magnitude of many of these initiatives. This study
hypothesizes that such leadership must come from within, and further, that the CIO would have
the best fit for the role, albeit with substantial re-tooling of skills. These hypotheses need to be
validated through surveys, interviews with academics, CEOs and CIOs, and case studies of
Innovation Management and Systems Thinking to understand the leadership required to
implement major innovation projects.
INTRODUCTION
Much of literature and evidence, both, empirical and anecdotal, attributes substantial
weightage to leadership as a strategic requirement for success. For large commercial
organizations longevity – hence success – is difficult to sustain (the average life span of
companies is shrinking rapidly; it is 12 ½ years today); to remain relevant, many are redefining
their core strategies to find new areas of sustainable competitive advantage through paradigm
shifting innovative strategies (PSIS initiatives). However, PSIS initiatives are highly prone to
failure (Nokia’s shift to services failed in the mid-2000s; top-10 semiconductor players like
Motorola/Freescale and Philips/NXP changed their business model from a manufacturing heavy
to an asset-light model – yet, they slipped from Top-10 positions down to Top-20 positions).
What kind of leader should a CEO look for, to guide his PSIS initiatives to success? The
greatest challenge to leadership is the leadership of innovation. Developing such leadership is a
strategy in itself. In fact, to drive PSIS initiatives to success, it is intuitive that the new leader
must be a “designer, teacher and steward” (Senge, 1995).
Our hypothesis is that IT leaders within the organization have the best fit based on the
Senge’s criteria. In our decades of experience with manufacturing organizations, other functional
leaders are not seen to have the same fit for these three roles. Furthermore, our preliminary
survey shows that today the corporate world indeed views IT professionals as strategic partners,
changing from the traditional role of IT as a service provider.
This work is also an attempt at defining a tool-kit to help IT leaders make large adaptive
changes in their career in order to lead major adaptive changes in their Organization’s strategy.
Our survey among corporate IT professionals identified starting points for such tool-kit.
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ORGANIZATIONAL AND LEADERSHIP TRANSFORMATION IN 21ST CENTURY
Even if a firm is working well today, it should seek alternative strategies (‘real options’
analyses) since the environment will keep changing (Grant, 2007).
‘Complexity theory’ holds that organizations are complex systems that display common
predictable patterns of adaptive behavior, e.g. unpredictability, and self-organization. Hawk and
Parhankangas (2001) talk of (the open source Operating System) Linux as symbolizing the new
thought of fluidity and uncertainty in the 21st century. The most obvious example of complex
self-organization is the emergence of social networks like Facebook and knowledge resources
like Wikipedia. The firm as a learning organization and the consequent importance of knowledge
transformation are important points here. “In a world defined by paradox and ambiguity, control
is an illusion. The goal is not to improve the illusion but rather to learn to value the paradox and
navigate the uncertainty” (Peter Stark, personal communication, 2001).
The redesign of organization structures leads to a new definition of leadership, moving
away from leadership traits of the 20th century CEOs (strong leaders with “masculine” traits) to
an emphasis on emotional intelligence (leaders with “feminine” traits like empathy and listening,
and bearers of organizational culture). In the new century, the ‘concept of the CEO as the peak
decision maker and strategy architect is not only unrealistic, it is undesirable’ (Grant, 2007).
Preliminary literature survey indicates substantial work done in exploring all the
variables considered in this study, viz. leadership, leadership transformation, IT leadership and
innovation. Yet, strategy evolves with environment, and given the rapid and monumental
changes in the social and business world today, major leadership challenges lie ahead.
Leadership and Systems Thinking are closely related (Maani & Cavana, 2007). Leading a
ship to blue oceans requires as much inspirational leadership as it does systems thinking and
strategy management. And “increasingly, business leaders are demanding that IT play the role of
a business partner and a strategic enabler” (Agarwal, Ferratt & Roepke, 2000).Business is
beginning to see IT as an enabler and a strategic partner. However, is IT leadership ready to
adapt to this? Heifetz and Laurie (1997)define ‘Adaptivechallenges’ and say that, “Many efforts
to transform organizations through mergers and acquisitions, restructuring, reengineering and
strategy work falter because managers fail to grasp the requirements of adaptive work.”
Classical literature categorizes leadership styles into four frameworks – structural, HR,
political and symbolic. The focus of literature on leadership transformation is largely confined to
enhancing or transforming these leadership frameworks from one to the other or achieving a
balance between the four frameworks, and thus achieving adaptive changes. There is also
literature that delves into current leadership pitfalls in process improvement, such as the
‘improvement paradox’ and the ‘capability trap’ (Repenning & Sterman, 2001). Literature on
traditional strategic leadership, e.g. the theories of Michael Porter,stress three generic strategy
types that can be foundin all Organizations: cost leadership, differentiation, and focus. Porterian
theory was largely focused on red-ocean strategies – in existing competitive markets.
However, Big Think ideas are designed to take organizations into newly defined markets,
creating markets where none existed and therefore absent from competitions/sharks – hence
‘Blue Ocean’ (Kim & Mauborgne, 2005). For “Big Ideas” to work they should satisfy the criteria
of feasibility, defendability against competitors and internal fit (fit the internal organizational
culture) (Schmitt, 2007). They, implicitly, need different strategies – and strategists – to succeed.
Gary Wagenheim of Simon Fraser University, Canada (personal communication, 2009)
talks of the need for Emotional Intelligence (E.I.) as the differentiating factor and on how E.I.
481
can be grown through training; in developing a tool-kit for adaptive leadership, E.I. must be a
necessary inclusion. Research by Goleman (1998) showed that “[as an ingredient of excellent
performance] emotionalintelligence proved to be twice as important as [technical skills, and IQ]
for jobs at all levels. Motivation is another important tool in the adaptive leader’s tool-kit. People
with high motivation remain optimistic even when the score is against them.”
Research Gaps Identified in the Proposed Field of Investigation:
However, literature is sparse in talking about entire transformation of a functional leader

to become transformational leader. Execution of PSIS initiatives and ‘Big Think’ ideas require
inspirational leadership, the kind more commonly found in CEOs and statesmen. Such capability
is widely seen to be an ingrained (‘born-with’) feature and we could not find literature on how
such leadership can be achieved through re-tooling of skill sets of existing functional leader.
IT-driven innovation is the focus of some industry opinion-makers: “Many of the most
successful organizations will employ IT to unlock innovation, freeing resources that in the past
have been consumed by maintaining technology, forward-looking businesses are using IT to
target unnecessary cost and complexity, and, creating a competitive advantage even as their
organizations become greener” (Dell, 2009). Radjou, (2008), says that Indian CIOs excel at
business innovation, and that Indian CIOs are effective at orchestrating innovation networks.”
The transformation of IT from back-office support role to a strategic partner requires new
roles and competencies for IT leaders and professionals (Agarwal, Ferratt, & Roepke; 2000).
Thisis confirmed by our survey.
HYPOTHESES
CEOs most often cite the management of innovation as their central concern. In the
ultimate analysis, a firm’s true core competency lies in its intangible assets – its people, their
talent and the tacit knowledge they capture, hold and can harness for the good of the firm. This
then becomes the capability of the organization.
The quest for sustained competitive advantage leads to business model innovations. In
today’s new world, as the world moves more towards newer blue-ocean ideas and markets,
competitive advantages not only need to be built and sustained, but also renewed constantly. This
makes differentiation advantage far more important than cost advantage. Given a differentiating
strategy, a firm can expand faster than competition, move down the experience curve faster than
competition and open up a widening cost differential. Differentiation advantage is important,
both for the firm’s products, as well as for its strategic thinking.
For strategic thinking, differentiation is best harnessed by making use of its internal
CXO-level resources than hiring best talent from outside. The best example of this is the growth
trajectory of Apple Computers when it hired Pepsi’s CEO, John Scully, to lead Apple in the
Eighties. This paper hypothesizes that the best repository of such talent is to be found in the
firm’s existing CXO-level leadership; further, this is more specifically likely to be in the CIO.
The biggest gains in productivity from process innovation are usually due to
organizational improvements rather than from technological or hardware innovation. IT leaders
are a profound asset to the Organization, and should be leveraged upon. Surveys show that the
average age of CIOs is 47 years. Thus, CIOs are younger and usually in their mid-career unlike
other top functional leaders (CXOs) like Chief Financial Officer / Chief Operations Officer, etc.,
482
who tend to be – more often than not – middle aged or very senior in age. It is, therefore, critical
for an organization to retain this critical component of top leadership which has the strong added
advantages of age (with its attendant advantage of drive/enthusiasm) and of being more in touch
with an increasingly technological world which they understand very well, better than other
functional leaders.
Further, since IT professionals deeply interact with their internal business customers in
order to be able to design systems for the business’ use, unlike other functions – not so much
with all other business functions as IT managers do.
Thus, for the purpose of adaptive leadership and leadership transformation, firms seeking
to build a competitive advantage in the 21st century need to tap into and leverage upon their
most important intangible resource, information. Turning that information advantage into insight
is a firm’s captive goldmine of strength. And, the CIO is the best ‘miner’ of that gold mine.
In a survey done by the authors among an equal number of IT and non-IT respondents,
both groups agreed that IT professionals could indeed become strategic partners or change agents
in their respective organizations. The survey sampled professionals from across industries (from
Banks to Manufacturing), from four countries – UK, India, Singapore, Taiwan.
CONCLUSION
• This work is an attempt at qualify a tool-kit to help leaders make large adaptive changes
in their career in order to execute major adaptive changes in their Organization’s strategy.
These are independent variables, and by extension, the leadership trait needed for
adaptive transformation is a dependent variable. Further work is needed to qualify and an
attempt needs to be made to quantify it.
• For a capability (or resource) to establish a competitive advantage there must be scarcity
and relevance. To sustain the advantage, the resources must be durable and non-imitable.
A firm’s top leadership is a durable resource but certainly capable of becoming imitable.
• The tacit knowledge such leadership captures within itself is the best source of strategy
development and hence sustenance of the firm’s competitive advantage. The challenge,
therefore, is to ensure that the CXO level of leadership remains in-house and is
adequately leveraged upon. (For, capability is more a measure of a firm’s ability to
leverage its resources than a measure of the size of it resource base.) This hypothesis also
needs to be validated further.
Objectives
Multiple variables lead to an organization’s growth and success; this study will consider
four variables, namely IT leadership present in the organization, leadership transformation, the
innovation paradigm and Organization growth and sustenance. Multivariate analysis needs to be
done to understand interdependence of these variables.
The main objectives of the proposed qualitative study are as follows:

- To understand leadership as an independent variable: whether quality of leadership alone is
enough to lead an average Organization to greatness, or if lack of astute leadership leads to
Organizational failure despite other fundamental strengths.
- To understand the nature of leadership required for execution of big innovative ideas.
483
- To understand leadership transformation (the efficacy of transformation) and the effects of
such transformation on the quality of leadership of an accomplished leader, and to
recommend frameworks, methodologies and strategies to achieve such transformation as
seamlessly as possible;
- To establish the type and framework of leadership skills needed to bring success and
authority to PSIS initiatives and develop a tool-kit for retooling of functional leaders;
- To develop a blue-ocean strategy for IT leadership to transcend leadership-plateaus.
REFERENCES
Agarwal, R., Thomas, W., and Roepke, R. “Aligning IT Human Resource with Business Vision:
The Leadership Initiative at 3M.” MIS Quarterly, 24, (2), 2000, 327-353.
Dell M. Michael Dell: IT-Driven Innovation a Key to Economic Recovery.
http://www.allbusiness.com/technology/software-services-applications-
information/12265107-1.html, 2009.
Goleman, D., What makes a leader, Harvard Business Review, Nov-Dec 1998
Grant, R.M. Contemporary Strategy Analysis, 6th ed., Hoboken, NJ: John Wiley and Sons, 2007.
Hawk, D., & Parhankangas, A., "System Cracks are Where the Light Gets In: Models and
Measures of Services in the Benefit of Context", Proceedings of the 45th Annual Meeting
of the International Society for the System Sciences, Asilomar, CA, July, 2001.
Heifetz, R.A., and Laurie, D.L. “The Work of Leadership.”Harvard Business Review, 75, (1),
1997, 124-134.
Kim, W.C., and Mauborgne,R. BlueOceanStrategy. Boston, MA: Harvard Business School
Press, 2005.
Maani, K.E., and Cavana, R.Y. Systems Thinking, Systems Dynamics: Managing Change and
Complexity, 2nd ed. New Zealand: Pearson Prentice Hall, 2007.
Radjou, N. “Why Indian CIOs Excel at Driving Business Innovation.”
http://discussionleader.hbsp.com/radjou/2008/05/why-indian-cios-excel-at-driving.html,
2008.
Repenning, N.P., and Sterman, J.D. “Nobody Ever Gets Credit for Fixing Problems that Never
Happened: Creating and Sustaining Process Improvement.” California Management
Review, 43, ( 4), 2001, 64-88.
Schmitt, B.H. Big Think Strategy – How to Leverage Bold Ideas and Leave Small Thinking
Behind. Boston, MA: Harvard Business School Press, 2007.
Senge, P.M. (1990). “The Leader’s New Work: Building Learning Organisations.” Sloan
Management Review, 32, (1), 1
484
CHAPTER 20
MANAGERIAL ACCOUNTING
485
THE INFLUENCE OF TRANSFORMATIONAL LEADERSHIP ON JOB
SATISFACTION: BALANCED SCORECARD AND RESOURCE-BASED THEORY

yifeng@mail.stu.edu.tw
Majidul Islam, Concordia University

mislam@jmsb.concordia.ca
ABSTRACT
WhileKaplan and Norton (2001) presented their balanced scorecard (BSC) for the
measurement of corporate performance and the setting of measures for performance in four
perspectives in particular, this research has used the resource-based theory (RBT) to gain a
perspective for understanding the leader-employee relationship for the attainment of an internal
business advantage. Alongside Kaplan and Norton (2001) presented their balanced scorecard
(BSC) for the measurement of corporate performance and the setting of measures for
performance in four perspectives in particular, this research has used the resource-based theory
(RBT) to gain a perspective for understanding the leader-employee relationship for the
attainment of an internal business advantage. In this study, we investigate the effects on intrinsic
and extrinsic components of employee job satisfaction of group direct behaviors as motivated by
transformational leadership (TL), including examining group maintenance, group goal
achievement, and the interaction between the two (their complementarity). We attained
significant results but we did find that the complementarity had a stronger impact on employee
job satisfaction, which suggests that complementarity will lead to a more accurate prediction of
employee job satisfaction that can be measured for an internal business advantage.
INTRODUCTION
Yang and Islam (2009) reported that the balanced scorecard (BSC) by Kaplan and Norton
(2001, 2004) was one of the major measures for organizational performance through the four
perspectives offinancial, customer, innovation and learning, and internal business.Yang and
Islam (2009) argued that, when firms followedonly the traditional measures of financial
performance, inefficiency in business performance could occur, because traditiona measures
such as returnon investment and earnings per share could mislead firms regarding
improvement and innovation in a highly competitive and dynamic environment. In deed, Islam
and Yang (2009)used the BSC to measure such as customer loyalty, internal process efficiency,
channel management, and innovation to examine the marketing relationship performance with
customers, which closely ties into the core of this study on customer relationship management
performance. Their study suggests that when institutions create and raise levels of service
satisfaction and informational trust, the results are improvements in customer interactions,
potentially helping the institution to achieve a higher level of BSC performance. Beyond these
earlier studies, the BSC process starts with the senior executive management team working
together with the employees to translate a firm’s strategies into specific strategic objectives, such
as meeting the internal business objective of the effective use of human resources. This study is
designed to empirically examinethe transformational leadership process on employees’level of
486
job satisfactionto expand the understanding of the internal business perspective of the BSC by
looking at it in conjunction with resource-based theory (RBT).
Among the four perspectives of the BSC, the internal business perspective includes
several broad constructs as operations management, customer management, and innovation. It is
the objective of this study to go beyond the evidence documented in the literature and to argue
for the expansion of the importance of the human resource issue in the internal business
perspective of the BSC. For example, while Kaplan and Norton (2001) presented their BSC for
the measurement of firm performance, Yang and Islam (2009) set measures for employee
performance and adaptation to fit into corporate dynamism. Because of the fact that commitment
to change to the BSC approach provides for long-run growth and healthy business performance,
Yang and Islam (2009) documented that, when transformational leadership is unable to raise the
employees’ commitment to change to the organizational BSC approach, the firm will have
difficulty in achieving its mission. According to Yukl (2008), responses to changed external
events should result in changed behaviors. This is a vital to employee job satisfaction, since TL
is expected to help employees react positively to change (Bass, 1985). However, the changed
behaviors that actually lead to the attainment of employee job satisfaction have not been tested or
identified before. It would be very useful for researchers and practitioners to have some
knowledge of what they are. Moreover, while employee job satisfaction is positively correlated
to expected performance, organizational commitment, and problem-solving behavior (Hart,
1999), this study is a step in the direction of attaining insights into the internal business
perspective of the BSC along with RBT to understand the linkage between internal business
perspectives and performance (Barney, 1991).
THEORETICAL BACKGROUND AND DEVELOPMENT
It is assumed in RBT that strategic resources are distributed among firms and that
resources are not perfectly imitable or substitutable (Crook, Ketchen, Combs, & Todd, 2008). On
the other hand, as Bass (1985) indicated, TL is brimming with capabilities; one should look at
TL as the source of significant leadership characteristics, such as charisma, individualized
consideration, motivation, and intellectual stimulation. Indeed, TL is associated with job
satisfaction through its attributes of vision, expectation, model, stimulation, support, and
attainment of the group goal (Podsakoff, MacKenzie, & Bommer, 1996). Therefore, TL
motivates employees beyond normal expectations and satisfies their higher order needs. Indeed,
a leader could be called charismatic if employees seek to identify with the leader emotionally.
TL motivates and inspires employees by providing meaning and intellectual challenge in their
job, and stimulating leadership results in employees using their potential. Finally, a leader is
attentive to employees’ personal needs for achievement and growth. The literature suggests that
the role of the TL is not only that of a superior catalytic agent but also as a coach and mentor to
employees.
Some studies (Gartwright & Zander, 1960) mentioned that such group direct behaviors as
group maintenance and group goal achievement could help strengthen leadership effectiveness.
Group maintenance behaviors are related to relational issues and membership character and
employee-orientation at the group level. Interactive relationships are related to task issues, such
as helping to keep employee attention (at the group level) focused on production-orientation
goals, such as emphasis on production, goal attainment, and effective performance. This is
consistent with findings in other leadership studies. In addition to increasing leadership
487
effectiveness, examining the complementarity of group maintenance and group goal achievement
behaviors (Yukl, 2008) is another possible approach to looking at managerial leadership.
Because of the nature of the job, both relational and task issues need to be carried out
simultaneously. Therefore, group maintenance behaviors and group goal achievement behaviors
and their complementarity are required for predicting employee job satisfaction. Gartwright and
Zander (1960) and Yukl (2008) have suggested that TL can help to motivate employees.
RBT studies indicate that the term “internal business advantage” is defined by the firm as
reduction of costs (Newbert, 2008), and it is achieved through employee job satisfaction
(Ketchen Hult, & Slater, 2007). In our investigation of RBT and HRM issues, we found that the
level of employee job satisfaction was important for measuring an internal business advantage,
since a high level helped in the reduction of internal process costs (Barney, 1991). TL can have a
big impact in this respect (Bass, 1985). Yukl (2008) reported that employee job satisfaction was
a common indicator of leadership effectiveness and could be used as a measure from the internal
business advantage perspective. Weiss, Dawis, England, and Lofquist (1967) carried out an
empirical study of satisfaction based on numerous aspects related to the work environment, such
as job content, reward fairness, and promotional opportunities. They utilized a multifaceted MSQ
designed to examine employee satisfaction with a variety of intrinsic and extrinsic job
components. In addition, Moorman (1993) found that intrinsic employee job satisfaction
components included the use of their abilities, job participation and involvement, and feelings of
accomplishment. Regarding the extrinsic components, the emphasis was on the need for
adequate compensation, opportunity for advancement, and being praised for doing a good job.
Although Weiss, et al. (1967) discussed employee job satisfaction appropriate for effective
employee reaction, they spent relatively more time explaining HRM issues related to positive
emotions resulting from employees’ evaluation of all aspects of their work situation and the job
itself. The level of employee job satisfaction is an important tool for management to understand
the impact of TL (Bass, 1985) through transformational leaders’ group direct behaviors and,
ultimately, implement and follow strategies designed to reduce internal process costs (Barney,
1991), which would measure the international business advantage.
This research integrates the internal business perspective of the BSC with the RBT
perspective.A successful organization should understand that employee job satisfaction is
necessary for strategic resource development to result in an internal business advantage. TL’s
strategic action for the understanding of group direct behaviors (including group behaviors,
group goal achievement behaviors, and their complementarity) is to enhance employee job
satisfaction.In this respect, the efficiency of group behaviors can be raised by intrinsic factors
related to group-level employee orientation, such as utilization of abilities on the job and
commitment to goal accomplishment. Since group maintenance behaviors support and encourage
group interdependence, they improve chances for job advancement, which in turn helps to
strengthen extrinsic values. Group maintenance behaviors are related to the feelings, attitudes,
and motives of the employees in the group, which is naturally affected by the leader’s taking an
interest in them. Group goal achievement behaviors on the other hand are related to the
enhancing of intrinsic aspects. The way in which the leader helps the group to keep its attention
on goal attainment helps to strengthen attitudes about job accomplishment. Group goal
achievement behaviors are also related to the inspiring of the group and the encouragement of
group interaction to get the job done. The feeling of accomplishment contributes to interest in the
job. Both group maintenance and group goal achievement behaviors act together in a
complementary fashion, which affects employees in terms of interpersonal relationships, skill
488
utilization, and understanding of personal feelings, production orientation, and goal attainment.
The complementarity, thus, can enhance both intrinsic and extrinsic components of job
satisfaction.
We state the influence of the group direct behaviors by TL (including group maintenance
behaviors, group goal achievement behaviors, and their complementarity) on intrinsic and
extrinsic factors affecting employee job satisfaction in the following hypotheses:
H1a and H1b: Group maintenance behaviors by transformational leadership have a

positive influence on a) intrinsic components and b) extrinsic components of employee
job satisfaction.
H2a and H2b: Group goal achievement behaviors by transformational leadership have
a positive influence on a) intrinsic components and b) extrinsic components of
employee job satisfaction.
H3a and H3b: The complementarity of the two behaviors has a positive influence on
a) intrinsic components and b) extrinsic components of employee job satisfaction.
METHODOLOGY AND RESEARCH DESIGN
Sample and Data Collection

The top four life insurance firms in Taiwan—Cathay, Nan Shan, Shin Kong, and
Cumshaw Post Company—held about 23%, 14%, 11%, and 7.5% of the overall market share,
respectively. The sales employees of these four firms were selected for empirical testing, since in
these firms, emphasis is placed on leadership and on how the employees’ job satisfaction is
reflected in the reduction of internal process costs (Barney, 1991) due to the impact of TL (Bass,
1985). Thus, the levels of employee job satisfaction act as common indicators of the
effectiveness of the leadership, which could be a measure of an internal business advantage.
In the spring of 2008, a total of 400 questionnaires were distributed by mail to these
firms’ sales employees, of which 369 were satisfactorily completed and were used in the sample
analyses. The sample of participants consisted of 234 women (63.4%) and 135 men (36.6%), of
whom 37.4% were single and 62.6% were married. They ranged in age from 24 years old or
younger (8.9%), 25 to 29 (14.6%), 30 to 34 (21.1%), 35 to 39 (28.5%), and 40 years old (26.8%).
Development of Measurements: Reliability and Validity

Scales to measure each of the model constructs were developed either by adopting
measures that had been validated by other researchers or by converting the definitions of
constructs obtained from previous studies into the questionnaire format. For example, sales
managerial TL was measured in the questionnaire by the following: charisma (2 items, g= .864),
intellectual stimulation (3 items, g= .851), individual consideration (2 items, g= .844),
inspirational motivation (3 items, g= .766) and vision (3 items, g= .848), derived from Bass
(1985) Podsakoff, MacKenzie, Moorman, and Fetter (1990), and Podsakoff, et al. (1996).
Furthermore, we used Cartwright and Zander’s (1960) group direct behaviors and Bass’s (1985),
Podsakoff, et al. (1990) and Podsakoff, et al. (1996) TL to shape the measures of the TL’s group
maintenance behaviors (6 items, g= .957) and group goal achievement behaviors (9 items, g=
.957). Finally, employee job satisfaction was measured by intrinsic components (5 items, g=
489
.865) and extrinsic components (7 items, g= .711), adapted from Weiss, et al.’s (1967) MSQ.
Answers were rated on the questionnaire using the 5-point Likert-type scale. Confirmatory factor
analysis (CFA) was performed using the SPSS tool to determine the measurement reliability and
validity. As shown in Appendix A, each scale’s reliability exceeded Nunnally’s (1978)
recommended level of 0.7, indicating the existence of internal consistency. The results of
convergent validity testing indicated that all indicator items loaded on the theorized constructs
with significantBartlett 2 (p<.01) and thus allowed an interpretation of structural variables.
RESULTS, DISCUSSION, AND CONCLUSION
Our results supported the prediction that group maintenance behaviors improved intrinsic
components of employee job satisfaction, since interactive relationship maintenance helps
employees consider change in a positive way. It is important that they feel that they can
contribute to the organization through job participation and involvement. Group goal
achievement behaviorshad a stronger impact on extrinsic aspects ( = .658, p < .01) than on either
the intrinsic ( = .473, p < .01) or the overall ones ( = .629, p < .01).The interpretation is that
group goal achievement behaviors could be lifted to the highest level relative to goal attainment
tasks to provide opportunities for job advancement. Technically, the function of group goal
achievement behaviors supported the second highest level of employees’ overall job satisfaction
by emphasizing the orientation to goal accomplishment, since employees believed that their
skills were being used (intrinsic-based); thus, their chances for job advancement (extrinsic-
based) were increased. The positive effect of group goal achievement behaviors on intrinsic
components of employee job satisfaction indicates that emphasis on group production provided
opportunities for employees to utilize the employees’ ability to make a contribution to the firm.
This led to the reflection of positive feelings of goal accomplishment. The study results
supported Yukl’s (2008) concept that complementarity has a stronger impact on intrinsic aspects
( = .593, p < .01) than either group goal achievement behaviors ( = .473, p < .01) or group
maintenance behaviors ( =142, p < .10). In addition, it was found that the overall aspects
received a stronger impact from the complementarity ( = .636, p < .01) than from group goal
achievement behaviors ( = .629, p < .01). Thus, these significant findings support the prediction
that complementarity has a stronger impact on employee job satisfaction than either group
behaviors alone. We could infer from this that the complementarity provides the means to deal
with the issues of employee and production orientation simultaneously: it provides the
opportunity to utilize employees’ skills and understand their feelings, attitudes, and group work
motivation and job skills to get a specialized group job done.
Overall, we attained satisfactory results, which were consistent with the business
perspective of the BSC and with the RBT perspective. However, this study moves beyond
previous studies in this area, offering new insights into the problems. Briefly, we utilized both
perspectives, the BSC and the RBT perspectives, in our modeling to aachieve an internal
business advantage. It is interesting that the complementarity between group maintenance and
group goal achievement behaviors had a stronger impact on the intrinsic effects than either one
of them alone. This suggests that group maintenance and group goal achievement behaviors,
including complementarity, will provide a more accurate prediction of the relation between
intrinsic and extrinsic components of employee job satisfaction and achieving the objective of an
internal business advantage. When these four firms are placed in a dynamic environment, TL is a
key source for providing an internal business advantage; employee capability to react positively
490
to change provides a very important advantage. Although the integration of both TL and change-
oriented action by the TL and employees to provide employee job satisfaction has not been
tested before, it would be useful for future researchers and practitioners to do so. This issue
should be explored further in future.
REFERENCES
Bass, B.M. Leadership and Performance Beyond Expectations. New York: Free Press, 1985.
Barney, J. “Firm Resources and Sustained Competitive Advantage.” Journal of Management, 17,
(1), 1991, 99-120.
Crook, T.R., Ketchen D.J., Combs J.G., and Todd, S.Y. “Strategic Resources and Performance:
A Meta-Analysis.”Journal of Management, 29, (11), 2008, 1141-1155.
Gartwright, D., and Zander, A. Group Dynamics Research and Theory. Evanston IL: Row
Peterson and Company, 1960.
Hart, P.M. “Predicting Employee Life Satisfaction: A Coherent Model of Personality, Work and
Non-work Experience, and Domain Satisfactions.” Journal of Applied Psychology, 84,
1999, 564-584.
Islam, M., and Yang, Y.F. “Service Satisfaction, Information Trust and e-CRM Performance in
BSC Model in the Empirics of Financial Institutions.” Journal of Business and Policy
Research, 4, (1), 2009, 50-65.
Kaplan, R.S., and Norton, D.P. The Strategy-Focused Organization: How Balanced Scorecard
Companies Thrive in the New Business Environment, Boston: Harvard Business School
Press, 2001.
Kaplan, R.S., and Norton, D.P. “Measuring the Strategic Readiness of Intangible Assets.”
Harvard Business Review, 82, (2), 2004, 52-63.
Ketchen, Jr., D.J., Hult, T.G.M., and Slater, S.F. “Toward Greater Understanding of Market
Orientation and the Resource-Based View.” Strategic Management Journal, 28, (9), 2007,
961-964.
Moorman, R.H. “The Influence of Cognitive and Affective Based Job Satisfaction Measures on
the Relationship Between Satisfaction and Organizational Citizenship Behavior. Human
Relations, 46, (6), 1993, 759-776.
Newbert, S.L. “Value, Rareness, Competitive Advantage, and Performance: A Conceptual-Level
Empirical Investigation of the Resource-Based View of the Firm.” Strategic Management
Journal, 29, (7), 2008, 683-791.
Nunnally, J. Psychometric Theory, 2nd ed.New York: McGraw-Hill, 1978.
Podsakoff, P. M., MacKenzie, S. B., Moorman, R. H., and Fetter, R. “Transformational Leader
Behavior and Their Effects on Followers’ Trust in Leader, Satisfaction and
Organizational Citizenship Behavior.” The Leadership Quarterly, 1, (2), 1990, 107-142.
Podsakoff, P. M., MacKenzie, S. B., and Bommer, W. H. “Transformational Leader Behaviors
and Substitutes for Leadership as Determinants of Employee Satisfaction, Commitment,
Trust, and Organizational Citizenship Behaviors.” Journal of Management,22, (2), 1996,
259–298.
Weiss, D.J., Dawis, R.V., England, G.W., and Lofquist, L. H. Manual for the Minnesota
Satisfaction Questionnaire. Industrial Relations Center, University of Minnesota, 1967.
491
Yang, Y.F., and Islam, M. “An Empirical Examination of Both Mediated and Moderated Effects
on Followers’ Commitment to Change to the Organizational BSC Approach.”
International Journal of Accounting and Finance, 1, (3), 2009, 251–275.
Yukl, G. A. Leadership in Organizations, 7th ed. Upper Saddle River, NJ: Prentice Hall, 2008.
492
MARKETING MIX, SERVICE QUALITY AND CUSTOMER LOYALTY: CUSTOMER
SATISFACTION ANALYSIS OF THE BALANCED SCORECARD PERSPECTIVE
Yu-Jia Hu, Fortune Institute of Technology

nickhu@center.fotech.edu.tw

yifeng@mail.stu.edu.tw
Majidul Islam, Concordia University

mislam@jmsb.concordia.ca
ABSTRACT
One successful marketing tool has been described as the customers’ psychological
contract toward a higher level of satisfaction, as well as loyalty, which enables firms to become
more profitable. Based on the importance of customer satisfaction as well as customer loyalty in
strategic marketing, the purpose of this study is to borrow the customer satisfaction view from
the balanced scorecard (BSC) perspective to investigate several construct relationships, such as
the marketing mix, service quality, and customer loyalty. The population in this research was
identified as customers of four chain retail stores, resulting in 200 individual surveys for
analysis. The findings support the hypotheses among these construct relationships identifying the
predictors of marketing mix and service quality on the customer loyalty in BSC context.
INTRODUCTION
The balanced scorecard (BSC) studies, including Kaplan and Norton (2001, 2004), Yang
and Islam (2009), and Islam and Yang (2009) all reported that the BSC was one of the major
measures for organizational performance through the fourperspectives offinancial, customer,
innovation and learning, and internal business. More particular,Yang and Islam (2009) argued
that, when firms followed only the traditional measures of financial performance, inefficiency in
business performance could occur, because traditional measures such as return on investment
and earnings pershare could mislead firms regarding improvement and innovation in a highly
competitive and dynamic environment.Additionally, Islam and Yang (2009)used the BSC to
examine the marketing relationship performance with customers, which closely ties into the core
of this study on customer relationshipmanagement performance. Their study suggests that when
firms create and raise levels of service satisfaction and informational trust, the results are
improvements in customer interactions, potentially helping the institution to achieve a higher
level of BSC performance. Beyond these earlier studies, our study continually used Kaplan and
Norton’s (2001, 2004) BSC measurements such as customer satisfaction to look at the buyer-
seller marketing relationship, which closely ties into the core of this study on customer loyalty.
The objective of this study is to better understand customer satisfaction from the RBT
perspective through such relationship constructs as marketing mix, service quality, and customer
loyalty.
493
Marketing Strategy: Sustainable Customer Loyalty
In a highly competitive business world, a well-designed marketing strategy is necessary
to maintain and develop the organization (Kotler, 1997). It has been argued that service quality is
an effective tool to improve customer retention (Day, 1994). However, Rao and Monroe (1989)
maintained that the relationship between price (marketing strategy mix) and service quality
remains unclear. Metters, King-Metters, and Pullman (2003) argued that good service quality
could not ensure a profit for the organization. Very few studies have examined the relationship
among marketing mix strategy, customer loyalty, and service quality. The mediation effect of
service quality on the relationship between marketing strategy and customer loyalty remains
unknown. Therefore, the main purpose of this study is to comprehensively examine the
mediation effect of service quality on the relationship between marketing mix and customer
loyalty in retail stores, generate recommendations for managerial application in such stores, and
identify areas for future scholarly inquiry.
LITERATURE REVIEW AND THEORY DEVELOPMENT
Service Quality
Organizations recognize that quality is the critical factor in maintaining competency for
business development. The service industry also believes that service quality is an effective tool
to develop customer relationships. Garvin (1987) identified service quality as customers’
satisfaction when their demands are met. The customers’ perception of service quality is a
subjective judgment, which is different from the perception of tangible product management. For
service industry are heterogeneous, intangible, perishable, and flexible at the same time. Scholars
have developed a different research approach to measuring service quality. Parasuraman,
Zeithaml, & Berry (1985) suggested that the five elements to measure service quality were
tangible, responsiveness, reliability, empathy, and assurance. Bolton and Drew (1991) presented
the SERVPERF scale to measure service quality.
Marketing Mix
Kotler (2003) identified the marketing mix as a set of selling tools to help companies to
aim their marketing at target customers. The best known marketing strategy tool is the 4 Ps
model suggested by McCarthy and Perreault (1994). The 4 Ps model is a presentation of a
marketing strategy that encompasses four factors: product, price, promotion, and place. Kotler,
Keller, Ang, Leong, and Tan (2009) identified the elements of price as variety, quality, design,
features, brand name, packaging, size, service, warranties, and return. Kotler, et al. (2009)
pointed out that the element of price encompassed list price, discount, allowance, payment
period, and credit term and that the element of promotion encompassed sales promotion,
advertising, sales force, and public relations. Finally, the element of place encompassed channel,
coverage, assortments, location, inventory, and transport (Kotler, et al., 2009).
Customer Loyalty
Customer loyalty refers to the customers’ attitude, which can influence them to purchase
the same brand products. Oliver (1997) claimed that customer loyalty would drive customers to
buy the same brand products even there are changes for competitors’ benefit offers. Customer
loyalty was the behavioral intention to maintain the relationship between the customer and the
service supplier. Therefore, customer loyalty may refer to customers’ desire and behavior in
494
purchasing the product or service repeatedly. Muller (1998) claimed that customer loyalty could
help an organization to maintain and develop market share. Sirohi, Mclaughlin, and Wittink
(1998) stated that customer loyalty could be represented by customer satisfaction. Zeithaml,
Berry, and Parasuraman (1996) suggested that measures of customer loyalty could be
recommendations to others, complaints that require more attention to pay and the possibility of
the customers’ transferring their custom to other organizations.
Service Quality, Marketing Mix, and Customer Loyalty in the BSC Context
Kotler (2003) suggested that the marketing mix strategy had a significant impact on
customer loyalty. Parasuraman, et al. (1985) suggested that service quality had a significant
impact on customer behavior. Zeithaml, et al. (1996) suggested that customer loyalty was one
important facet of behavioral intentions by customers. Very few studies have extensively
examined the mediation effect of service quality on the relationship between marketing mix and
customer loyalty. Although scholars have claimed that service quality was one of the vital issues
in developing customer relationships, Metters, et al. (2003) argued that, although service quality
had a positive impact on customer loyalty, good service quality could not ensure a profit for the
organization. Kotler (2003) claimed that price was the most sensitive issue affecting customer
behavior. Therefore, the three hypotheses in this research will examine whether there is a
mediation effect of service quality between the perception of the marketing mix strategy and
customer loyalty. Based on the literature review and the objective of this research, the study
proposes one research question and three hypotheses, as follows. Research question: Do the
variables of service quality and marketing mix strategy predict the variable of customer loyalty?
Research hypothesis one: There is a significant and positive relationship between the perception
of the marketing mix strategy and customer loyalty in the BSC context; Research hypothesis
two: There is a significant and positive relationship between the perception of service quality and
customer loyalty in the BSC context; Research hypothesis three: There is a mediation effect of
service quality on the perception of the marketing mix strategy and customer loyalty in the BSC
context.
METHODOLOGY
Customers of specific chain retail stores were selected as an acceptable population for
this study. To ensure the response rate, this research applied the convenience sampling method.
After contact with senior managers of chain retail companies, four companies in the city of
Kaohsiung in south Taiwan agreed to participate in this research. Then, the researcher applied
the random sampling method. Each company randomly invited customers who shopped in the
stores to volunteer to participate in the questionnaire survey. Any adults shopping in the four
stores were eligible to participate. A total of 215 sales associates participated. After deducting 15
invalid response, the total number of valid responses was 200, providing an adjusted response
rate of 93%.
Three instruments were adapted to measure three variables: marketing mix satisfaction
(14 items), service quality (21 items), and customer loyalty (three items). The marketing mix
satisfaction part of the questionnaire was based on McCarthy and Perreault (1994)’s 4 Ps model,
which encompasses four dimensions: product (five items), price (three items), promotion (two
items), and place (three items). Factor analysis following the Varimax rotation method was
applied to reduce the dimensions for the 4 Ps model. After deleting two low factor-loading items
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(factor loading value <.5), the factor analysis resulted in two dimensions named “product value”
and “place.” The service quality part (21 items) was modified from the SERVQUAL
questionnaire (Parasuraman, et al., 1985), which encompasses five dimensions: tangible (five
items), responsiveness (five items), assurance (three items), empathy (three items), and reliability
(five items). The factors analysis following the Varimax rotation method was also applied to
reduce the dimensions for the service quality questionnaires. After deleting two low factor-
loading items (factor loading value <.5), the factor analysis resulted in four dimensions named
“tangible,” “attentive”, “responsiveness,” and “individual and safe.” The customer loyalty part
(three items) was modified from the Behavioral Intentions Battery questionnaire developed by
Zeithaml, et al. (1996) and encompassed two dimensions: recommendations (two items) and
repeated purchase (one item).
The reliability test was applied to the three parts of questionnaire, marketing mix
satisfaction, service quality, and customer loyalty. The internal consistency as an estimate of
reliability of the three parts of the questionnaire ranged from .85 to .92. The questionnaire had
been developed based on academic theory or existing questionnaires that were developed by
scholars or specialists to improve the content validity. The researcher examined the content
validity andapplied the factor analysis to examine the construct validity of the three parts of the
questionnaire. The values of the KMO test (KMO >.8) and the Bartlett test (Bartlett <.05)
showed that the construct validity for the three parts was reasonable.
RESULTS AND DISCUSSION
The Findings
The result for research hypothesis one indicated that value, which encompasses price and
promotion, is more relative to customer loyalty than is place. The result for hypothesis two
indicated that the facet of “attentive” had the strongest influence on overall customer loyalty than
did other aspects of customer service. The result for hypothesis three indicated that there was no
mediation effect of service quality on the perception of marketing mix strategy and customer
loyalty. The answer to the research question revealed the facet “value” (.29) for market mix had
the strongest effect on the dependent variable customer loyalty, and the second, third, and fourth
strongest independent variables were “attentive” (.152), “responsiveness” (.147) and “individual
and safe” (.096). The results showed that price/ promotion factors may have a greater impact on
customer loyalty than does service quality. In addition, of the four facets of service quality,
customers care much more about the facets of “attentive” and “responsiveness” than the other
two facets.
The Customer Satisfaction Perspective of the BSC

Kaplan and Norton (2001 and 2004) adapted the BSC to measure organizational
performance from the four perspectives of finance, the customer, innovation and learning, and
internal business. They claimed that the traditional financial accounting models were designed in
the industrial age to control employee behavior. However, the BSC process starts with the senior
executive management team working together to translate a unit’s strategy into specific strategic
objectives. Kaplan and Norton (2001) suggested that the customer perspective values could be
classified into three categories: (a) product and service attributes, (b) customer relationships, and
(c) image and reputation. Here, we investigated the customer relationship dimension of the BSC
with regard to business delivery of products or servicesto the customer, including response and
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delivery times, as well as how the customers felt about their purchasing experience with this
company. These factors are an indication as to how the company manages customer relationships
and maintains product and service value. This aspect of value creation, that is, satisfying the
customers’ needs, is well modeled by the customer satisfaction view of the BSC.The creators of
the BSC, Kaplan and Norton, suggested that each business had its unique set of processes for
creating value for customers (Kaplan and Atkinson, 1998). By creating value, the navigational
company can acquire, satisfy, and retain customers. Following the generic value chain model,
Kaplan and Norton (1996) suggested that it was value creation efforts in the customer
satisfaction view that had the greatest impact on customer loyalty. Kaplan and Norton’s (2001)
concept of customer satisfaction is closely tied to the marketing relationship value of customer
loyalty that is at the core of this study.
The Customer Satisfaction Perspective of the BSC for Practical Implications

The results of this study may concord with the argument by Metters, et al. (2003) that
indicated that good service quality could not ensure a profit for an organization, although service
quality has a positive impact on the customer loyalty. Comparing with the service quality, the
marketing mix strategy is more important for keeping customer loyalty. This research suggests
that 1) management could develop an aggressive marketing mix strategy to promote customer
loyalty, especially regarding pricing and promotion; 2) management could focus on training to
improve employees’ professional service skills to improve service quality to promote the
customer loyalty; 3) management could focus on price/promotion activities rather than issues of
service quality, since the retail business is highly competitive on price; and 4) management could
recruit the employees with the attentive personality that enhances customer loyalty.
Previous research has suggested that the BSC is a useful tool for measuring and
evaluating firm performance. The BSC makes it possible to evaluate managerial activities from a
broad viewpoint, by looking at both tangible financial aspects and intangible non-financial
aspects. We can use this method to evaluate the integration of business and technology.
Customer satisfaction is a core part of business performance. The BSC is a goal and action-
oriented approach that can be used to monitor and improve business performance. Thus, the four
BSC perspectives applied to business performance measures are discussed below. The customer
satisfaction view of the BSC perspective is related to the evaluation of the business
activitiesneeded to achieve the goals of delivering ever-increasing value to the customer. The
management of a business can express and communicate its general mission to its customers via
specific measures, such as lead-time, quality of products and services, business service
performance, and cost effectiveness. The purpose of customer service and customer satisfaction
is to link the customers’ specifications and set the elements of quality as their feedback for the
business control process. Raising customer loyalty can include such approaches as improving
products/services, flexibility, customer query time, post-transaction service, customer perception
of the value of products and services, order lead time, business performance to meet specific
customer needs, delivery performance, effectiveness of delivery invoice methods, reliability,
responsiveness to urgent requests, effectiveness of the distribution planning schedule,
information flow cost, and quality of delivery documentation.
497
REFERENCES
Bolton, R.N., and Drew, J.H. “A Multistage Model of Customers’ Assessments of Service
Quality and Value,” Journal of Consumer Research, 17, (4), 1991, 375-384.
Day, G.S. “The Capabilities of Market-Driven Organizations.” Journal of Marketing, 58, (4),
1994, 37-52.
Garvin, D.A. “Competing on the Eight Dimensions of Quality.” Harvard Business Review,65,
(Nov-Dec), 1987, 101-109.
Islam, M., and Yang, Y.F. “Service Satisfaction, Information Trust and e-CRM Performance in
BSC Model in the Empirics of Financial Institutions.” Journal of Business and Policy
Research, 4, (1), 2009, 50-65.
Kaplan, R.S., and Atkinson, A.A. Advanced Management Accounting. Upper Saddle River, NJ:
Prentice Hall, 1998.
Kaplan, R.S., and Norton, D.P. 1996, “Using the Balanced Scorecard as a Strategic Management
System.” Harvard Business Review, 74, (1), 1996, 75-85.
Kaplan, R.S., and Norton, D.P.The Strategy-Focused Organization: How Balanced Scorecard
Companies Thrive in the New Business Environment. Boston, MA: Harvard Business
School Press, 2001.
Kaplan, R.S., and Norton, D.P. “Measuring the Strategic Readiness of Intangible Assets.”
Harvard Business Review, 82, 2, 2004, 52-63.
Kotler, P.R. Marketing Management: Analysis, Planning, Implementation, and Control, 9th ed.
Upper Saddle River, NJ: Prentice Hall, 1997.
Kotler, P.R. Marketing Management, 11th ed. Upper Saddle River, NJ: Prentice Hall, 2003.
Kotler, P.R., Keller, K., Ang, H.S., Leong, S.M. and Tan, C.T. Marketing Management: An
Asian Perspective, 5th ed. Upper Saddle River, NJ: Prentice Hall, 2009.
McCarthy, E.J., and Perreault, Jr., W. D. Basic Marketing: A Managerial Approach. Homewood,
IL: Irwin, 1994.
Metters, R.D., King-Metters, K.H., and Pullman, M. (2003). Successful Service Operations
Management. Cincinati, OH: South-Western College Publishers, 2003.
Muller, E. “Customer Loyalty Program.” Sloan Management Review, 39, (4), 1998, 4-5.
Oliver, R.L. Satisfaction: A Behavior Perspective on the Customer. New York: Irwin/McGraw-
Hill, 1997.
Parasuraman, A., Zeithaml, V.A., and Berry, L.L. “A Conceptual Model of Service Quality and
its Implications for Future Research.” Journal of Marketing, 49, (Fall), 1985, 41-50.
Rao, A.R., and Monroe, K.B. “The Effect of Price, Brand Name and Store Name on Buyer’s
Perceptions of Product Quality: An Integrative Review.” Journal of Marketing
Research,27, (4), 1989, 24-38.
Sirohi, N., Mclaughlin, E.W., and Wittink, D.R. “A Model of Consumer Perceptions and Store
Loyalty Intentions for a Super-market Retailer.” Journal of Retailing, 74,(2), 1998, 223-
245.
Yang, Y.F., and Islam, M. “An Empirical Examination of both Mediated and Moderated Effects
on Followers’ Commitment to Change to the Organizational BSC approach.”
International Journal of Accounting and Finance, 1, (3), 2009, 251–275.
Zeithaml, V.A., Berry, L.L., and Parasuraman, A. “The Behavioral Consequences of Service
Quality.” Journal of Marketing, 60, (4), 1996, 31-46.
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CHAPTER 21
MANUFACTURING AND SERVICE
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MANAGING THE NEGATIVE EFFECTS OF CUSTOMER WAITING ON SERVICE
EVALUATIONS: REVIEW OF RESEARCH AND PRACTICE
Tracey E. Garza, Sam Houston State University

teg003@shsu.edu
Irfan Ahmed, Sam Houston State University

irfanahmed@shsu.edu
ABSTRACT
For many services, the production and consumption of the service has to be simultaneous,
leading to delays in service performance and customer waiting when demand outstrips supply.
Customer waiting is a serious challenge for such service industries, as it can lead to
dissatisfaction with the service provider; therefore, strategies for reducing and eliminating
customer waiting are a necessary aspect of services management. This paper reviews the
research on the nature of customer waiting and industry practices on the management of
customer waiting. The review of the research and anecdotal evidence indicates that different
types of customer waiting experiences generate different cognitive and behavioral responses on
the part of customers. Methods for managing customer waiting through the deployment of
operational and perception management techniques are discussed and recommendations are
offered to service providers.
INTRODUCTION
Imagine you make an appointment see your physician. You arrive at the doctor’s office
several minutes prior to your scheduled appointment, check-in at the receptionist’s desk and take
a seat in the waiting room. After a few minutes, you hear your name called; only, it is a nurse
requesting you fill out a couple sheets of information to update your file. You are asked to step
on the scale to measure your weight. Then you are escorted to a room where the nurse takes your
temperature, blood pressure, and pulse rate. The nurse exits the room, and again, you are waiting
for the doctor to come in.
We have all experienced having to wait for service for some duration of time. An
important question for service businesses is: What effect does waiting have on consumers’
evaluation of service? If waiting typically results in negative consumer evaluations of service,
firms need to understand how to manage waiting times in order to minimize customer
dissatisfaction with the service experience. Firms can develop ways to decrease the actual
waiting time or perceived waiting time. This objective of this paper is to review research findings
on the effects of waiting and offer an inventory of methods for firms to reduce negative effects of
waiting through operations and perceptions management techniques.
THE NATURE OF WAITING
First, it is important for firms to understand how waiting affects customer satisfaction of
services. Wait for service has been defined as the “time from which a customer is ready to
receive the service until the time the service commences” (Taylor, 1994, p. 56). There are three
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types of waiting: pre-process, before the service even begins; in-process, during the service; and
post-process, after the service (Dube-Rioux, Schmitt, & Leclerc, 1988). For example, at a
doctor’s office, a pre-process wait would occur while sitting in the waiting room; an in-process
wait would occur while waiting in the exam room; and a post-process wait would occur before
paying the bill at check-out. Research shows that pre-process waits are less pleasant than in-
process waits (Dube-Rioux, Schmitt, & Leclerc, 1988). Additionally, there is evidence that the
longer the pre-process wait, the more negative the service quality evaluation.
Pre-process waits can further be categorized into three types: pre-schedule waits, delays,
and queue waits (Taylor, 1994). At a doctor’s office, a pre-schedule wait would occur if a patient
arrived early for their appointment; a delay would occur during the time between the scheduled
appointment and the time they see the doctor; and a queue wait would occur if it was a first-
come, first-served clinic and the patient would be called when it was their turn.
A delay can affect a consumer’s evaluation of the punctuality of service. Punctuality of
service is a factor of perceived service reliability, which ultimately is capable of affecting overall
service quality evaluations (Berry & Parasuraman, 1991). Thus, longer delays result in lower
overall evaluations of performance (Taylor, 1994). Additionally, delays induce affective
reactions such as uncertainty and anger, which can negatively impact service evaluations.
Taylor conducted an experiment in which she recorded people’s experience of a delayed
airline flight. Results showed that the longer the delay, the greater was the anger and uncertainty
felt by the passengers; these affective reactions, in turn, negatively affected subjects’ service
evaluations. Taylor’s experiment also confirmed the waiting time being filled by interim
activities reduced subjects’ felt uncertainty. The study also found a link between the perceived
controllability of the delay and consumer anger: the greater the perception that the delay was
controllable by the service provider, the greater the anger felt by the customer (Taylor, 1994). In
the experiment, it was found that the anger created by the delay influenced the evaluation of
punctuality more than the delay duration itself (Taylor, 1994). This evidence confirms that firms
should be more concerned with customers’ perceptions of waiting than with the actual wait
duration itself (Hornik 1982; Katz, Larson, & Larson, 1991).
Hui, Thakor, and Gill (1998) studied consumers’ reactions to waiting given the type of
delay and stage of the service encounter. Hui, Thakor, and Gill (1998) deployed two theoretical
models: field theory (Lewin, 1943) and the anticipatory model (Cahoon & Edmonds, 1980), to
demonstrate opposing views as to how perceived waiting time and affective reactions to the wait
may be moderated by the stage at which the delay occurs. Field theory suggests that “perceived
waiting time should be longer, and affective responses more negative, when the wait occurs
further from the goal state” (Hui, Thakor, & Gill, 1998). Alternatively, the anticipatory model
suggests “a delay will be most irritating close to the goal state” because the customer has already
invested much time and effort in anticipation of goal attainment (Hui, Thakor, & Gill, 1998). A
procedural delay is one that is perceived to be routine, in which the possibility the service will
not be completed is minimal. According to Hui, Thakor, and Gill (1998), the pre-process stage
takes place far from the goal state; the in-process stage occurs near the goal state; and the post-
process stage occurs after achieving the goal. Procedural delays follow the field theory model
and are said to be evaluated less negatively when they occur further away from the goal state. A
correctional delay, however, is an atypical event with no assurance that the service will be
completed (Hui, Thakor, & Gill, 1998). Correctional delays follow the anticipatory model. As
customers become more committed to the service process the closer they are to the goal stage,
they are found to react more negatively to a correctional delay than to a procedural delay (Hui,
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Thakor, & Gill, 1998). In their study, it was observed that when the delay was procedural and far
from the goal, wait times were estimated by subjects to be longer, generated more negative
affective responses, and resulted in lower service evaluations. When the delay was correctional
and far from the goal, wait time estimates were shorter, affective responses were more positive,
and service evaluations were better. When the delay was unknown and far from the goal, wait
times were estimated to be longer and service evaluations were low (Hui, Thakor, & Gill, 1998).
The researchers concluded that procedural and unknown delays tend to have a more negative
impact on customer satisfaction during the pre-process stage than during the in-process stage,
while correctional delays have a negative impact closer to the goal sate (Hui, Thakor, & Gill,
1998).
THE ROLE OF OPERATIONS MANAGEMENT
Operations management techniques can help some firms minimize or eliminate waiting.
For example, for a restaurant where customers expect the highest level of service, table
reservations can be required. This takes customers out of a queue wait (Clow & Kurtz, 2004).
Restaurants and other service firms that use this strategy should be careful not to overbook
appointments as this would negatively impact service evaluations.
Advancements in technology and automation have lead to several improvements for
customer waits in the service industry. For example, self-service kiosks in grocery stores and
airports have significantly decreased queues and customer waiting times (Clow & Kurtz, 2004).
Customers can bypass waiting in a line at the grocery store by going to a self-serve checkout,
scanning the goods, and paying, with little or no retailer assistance. Similarly, at the airport,
several kiosks allow for passengers to check themselves in for a flight, check in luggage, and
print boarding passes. This speeds up the process and allows flight staff to accommodate more
passengers faster than physically having to ask each person for identification, how many bags
they are checking, etc. The Internet provides an additional means for service delivery, and with
increasing availability of broadband Internet connections, services can be provided with minimal
waiting.
Service providers can reduce actual customer wait time and effort costs while improving
the service experience by the using customer information to anticipate their requirements (Berry,
Seiders, & Grewal, 2002). For example, Ritz Carlton hotels use information technology to
predict consumer preferences from past visits and customize the service experience by stocking
repeat customers’ rooms with their favorite snacks and drinks (Berry, Seiders, & Grewal, 2002).
This reduces the likelihood of the customer calling in their orders and having to wait for the
order to be brought to them.
Even if service firms aren’t able to use advanced technology, there are more traditional
ways to reduce queues and waiting times. Firms can offer coupons or discounts to attract
customers to come to the business at off-peak hours (Clow & Kurtz, 2004). This will take some
of the burden off of the lines at peak business hours and transfer it to slower business times.
Finally, service firms that have lines should build their business layout with queues in
mind. For example, a grocery store may have 18 check-out lanes. If during peak hours, only 10
lanes are utilized, the other 8 lanes should be staffed to reduce queue lines or removed and used
to display more merchandise. Customers waiting in a line that see other registers open will feel
more anger towards the store for not opening more lanes to get customers through the lines
faster, resulting in decreased customer satisfaction. Furthermore, firms should also keep staff not
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helping customers hidden from the visible business layout, as customers will again feel anger
towards the firms for those staff not helping customers (Clow & Kurtz, 2004).
PERCEPTIONS MANAGEMENT
Perception management techniques can also be used by firms to reduce negative

customer evaluations over waiting times. According to Clow and Kurtz (2004), customers will
be more satisfied if they perceive they are waiting less. Therefore, it may be more important for
firms to reduce the perceived waiting time than reduce the actual waiting time itself (Clow &
Kurtz, 2004). In addition, implementing perceptions management techniques is sometimes less
expensive for firms than deploying operations management techniques (Larson, 1987).
Service providers should focus on reducing pre-process waits as these waits seem longer
than in-process waits (Dube-Rioux, Schmitt, & Leclerc, 1988). This is done in doctor’s offices
by admitting patients to exam rooms as soon as they open up to further wait for doctors. Through
this technique, firms are transferring pre-process wait time to in-process wait time (Clow &
Kurtz, 2004). While the actual time of the wait is the same, the patient feels better about the wait
because they believe they are closer to the end goal. Patients believe the service has begun
because they have been noticed and are telling the nurse their concerns. This is also beneficial to
the doctor’s office because it provides an efficient use of time for patients to change into the
exam robes, take urine samples, and explain initial conditions before the doctor arrives in the
room. These tasks also break-up the amount of time the patient feels they are waiting for the
doctor, reducing the perceived length of the total waiting time (Clow & Kurtz, 2004).
Firms can also schedule service in a way that makes consumers feel they are waiting less.
This can be achieved through the use of filler services to distract the customer from the passage
of time (Carmon, Shanthikumar, & Carmon, 1995). Examples of these “filler” services on an
airline are the drinks, snacks, and movies provided while passengers are waiting to arrive at their
destination (Carmon, Shanthikumar, & Carmon, 1995). Fast food restaurants offer customers a
drink cup so they may get their beverage while their food is being prepared (Carmon,
Shanthikumar, & Carmon, 1995). Again, this simple technique gives customers something to do
that takes their mind off of waiting.
Another perceptions management technique involves informing customers of the duration
of the wait. If customers have an approximate idea of the wait time, they will feel less
uncertainty and anger. Customers will react more positively when firms tell customers a
specified wait time, and the wait ends up being shorter. This was found beneficial at Disney
World where signs are posted in front of rides estimating the wait time. Ninety-nine percent of
the time, customers got to ride sooner than the posted time, which resulted in “higher levels of
satisfaction” (Katz, Larson, & Larson, 1991). Service firms must be careful never to
underestimate the waiting time as this would cause a negative reaction and result in negative
service evaluations (Clow & Kurtz, 2004).
Another perceptions management technique involves aspects of the service environment,
such as music, to alleviate negative effects of the delay (Kellaris & Kent, 1992). If customers
like the music they are hearing while waiting for a service, they feel more positive about the wait
and are focused less on the duration of the wait.
The management of waiting time can also be used to strategic advantage by the firm. The
waiting time can be an opportunity for the service provider to enhance the customer experience.
For example, Disney offers free entertainment to guests while they wait in line for rides. This not
503
only takes the focus off of waiting in line, but adds value to the customer experience (Meyer,
2001). High end car dealerships offer plush waiting areas, premium coffee, snacks and Wi-Fi to
customers while they wait for service on their vehicles. However, businesses must avoid tactics
that are seen as of benefit only the business without any benefit to the customer. Meyer (2001)
recommends that businesses not load the customers with advertising, trivia or sales pitches.
Meyer concludes that firms that decrease customer non-value added time will achieve a
competitive advantage over firms that don’t. Thus, activities aimed at reducing customer wait
times need to be seen as a potential source of competitive advantage.
CONCLUSION
We are living in an age of immediate gratification. Consumer spending on goods and

services is the driving force of the United States economy. More consumers have more
disposable income and are willing to spend more on services, whether needed or just desired to
make consumers’ lives easier. If consumers spent less time waiting for services, they would have
more time to benefit from more services. Therefore, it is even more important that in this
growing service economy, firms reduce the time consumers wait for services, or at least reduce
the time consumers feel they are waiting for services to keep them happy and coming back.
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The Free Press, 1991.
Berry, L.L., Seiders, K., and Grewal, D. “Understanding Service Convenience.” Journal of
Marketing, 66, (July), 2002, 1-17.
Cahoon, D., and Edmonds, E.M. “The Watched Pot Still Won’t Boil: Expectancy as a Variable
in Estimating the Passage of Time.” Bulletin of the Psychonomic Society, 16, (August),
1980, 115-116.
Carmon, Z., Shanthikumar, J.G., and Carmon, T.F. “A Psychological Perspective on Service
Segmentation Models: The Significance of Accounting for Consumers’ Perceptions of
Waiting and Service.” Management Science, 41, (November), 1995, 1806-1815.
Clow, K.E., and Kurtz, D.L. Services Marketing: Operation, Management, and Strategy.
Cincinnati, OH: Atomic Dog Publishing, 2004.
Dube-Rioux, L., Schmitt, B.H., and Leclerc, F. “Consumer’s Reactions to Waiting: When Delays
Affect the Perception of Service Quality.” In T. Srull, ed., Advances in Consumer
Research, Volume 16. Provo, UT: Association for Consumer Research, 1988, 59-63.
Hornik, J. “Situational Effects on the Consumption of Time.” Journal of Marketing, 46, (Fall),
1982, 44-55.
Hui, M.K., Thakor, M.V., and Gill, R. “The Effect of Delay Type and Service Stage on
Consumers’ Reactions to Waiting.” Journal of Consumer Research, 24, (March), 1998,
469-479.
Katz, K., Larson, B., and Larson, R. “Prescription for the Waiting in Line Blues: Entertain,
Enlighten and Engage.” Sloan Management Review, (Winter), 1991, 44-53.
Kellaris, J.J., and Kent, R.J. “The Influence of Music on Consumers’ Temporal Perceptions:
Does Time Fly When You’re Having Fun.” Journal of Consumer Psychology, 1, (4),
1992, 365-376.
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Larson, R.C. “Perspectives on Queues: Social Justice and the Psychology of Queuing.”
Operations Research, 35, (6), 1987, 895-905.
Lewin, K. “Defining the Field at a Given Time.” Psychological Review,50, (May), 1943, 292-
310.
Meyer, C. “While Customers Wait, Add Value.” Harvard Business Review, 79, (7), 2001, 24-26.
Taylor, S. “Waiting for Service: The Relationship Between Delays and Evaluations of Service.”
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WE NEED TO LEARN FROM JAPANESE SOCIETY
“PRODUCTIVITY AND GROWTH”
Reza Fadaei, National University

rfadaeit@nu.edu

mbsat@nu.edu
ABSTRACT
Japan is a country that is poor in natural resources and it was difficult for them to rebuilt
a nation after the war without such resources…at least not those deemed necessary to create an
industrial economy. The only resources Japan had was a large loyal, honest, hard working labor
force, and fare society. Japan had been one of the world’s greatest performers during the power
period. The rate of growth and development of its economy is remarkably sound and rapid. Some
named economic success of Japan as an “economic miracle”. How has Japan achieved economic
success so rapidly? What are the causes that might push Japan to the top in the world economy?
There are several factors that have recently emerged to explain Japan’s postwar economic
success. The purpose of this paper is to examine the key economic success and important factors.
INTRODUCTION
Japan is a country that is poor in natural resource an it was difficult for them to rebuilt a
nation after the war since they had virtually no resources …. At least not these deemed necessary
to create an industrial economy. The only resources Japan had were large loyal, honest, hard
working labor force, and fare society. Japan has been one of the world’s greatest performers
during the postwar period.
The course for developing group loyalty begins in school with the very first grade one
when every Japanese child enters his groups of 40 to 45 first graders. The child learns his or her
place, their relative permanence, their security, and the sanctity as well as the restriction of
belonging to a group through the school. Close personal relationship are formed between the
individual and the other members of the group. For example, students of the same group usually
play together during recess, study together during the long class time, and even pat together
during lunchtime in their assigned seat. At the lower grades the children are clearly less
inhibited, typically of schools in all countries. But, especially as the Japanese child progresses
through the school, spontaneity, original ideas, and innovated thinking fade away. Japanese
children generally learn to “sway with the breeze” in order to maintain group harmony. The herd
instinct, at the expense of individually, is underlying motive in this society.
From this perspective the school influence on youth peer groups in Japan leads to
generally more constructive from highly indifferent peer group attitudes. The work of Adams
and Iowa (1972), Nomura (1978), Pampel (1986) and Duke (1986), help us to understand
Japan’s history, culture, school, work conditions, loyalty, and the advantages of lifetime work-
security system.
506
The purpose of this study is to select some of those factors that support the success from
both areas, economic and cultural. The factors are discussed in more depth about their nature and
their positive effects on Japanese economy.
ECONOMIC SUCCESS AND CULTURE
The success of the Japan economy is the Japanese society itself. The characteristic
features of the Japanese society are quite different from those of many other countries. The
culture in which Japanese people live plays a significant role in shaping this distinctive society.
There is some of the important aspects of Japanese culture, in comparison to people of western
countries, which help bring Japan to one of the most economically successful nations, in the
world. Japanese society attaches importance to human relations rather than to legal enforcement.
If you look at the number of lawyers in Japan is significantly less than the number of
lawyers in the United States. Therefore, the Japanese are not so involved in looking out for
protecting their individual rights, or searching for some small benefits earned by the victory of
fling for significant lawsuits. We will see Japanese people respect one another, and always blame
themselves first for mistake occurred. Japanese social behavior long ago in the past as in so
many other Asian countries, was regulated by feeling of shame, saving face, and obligation.
Japanese were aware of guilt and shame resulted from any wrong-doing. They had to “save their
faces” by maintaining good images in order to comfortably live and be well respected by others
in the society.
The culture and character of the Japanese people have been major element in the
country’s rapid achievement of industrial and economic growth. In Japan, the government
industry relations are excellent. The Japanese government is extremely supportive and
encourages industrial growth. These exists large scale cooperation among government, industry,
and the banking community, and entitles work together to chart plans and long range goals for
the country.
Japanese have a low unemployment rate compared to other advance countries, which is
due mainly to the practice of lifetime employment. Companies do not have the right to fire their
employees expect for serious misbehavior. In general, employees are never forced to go jobless
unless the company faces bankruptcy (Nomura, 1978). The advantage of “lifetime employment”
system leads to stability of employment and income which in turn leads to a feeling of loyalty to
the enterprise and also enables technological innovations to continue smoothly. Japan has been
called a group-oriented society. Everybody works toward one common goal, a better way of
living.
Therefore, Japanese workers pride in their work and loyalty to their company is reflected
in the capacity to produce goods that are less competitive in price but more reliable in quality.
Salary increases are done annually based primarily on age, position, education, number of years
in the company and with additional consideration to each individual’s abilities and achievements.
Japanese people are keenly aware of the fact that their country has very limited natural
resources. The only abundantly available resources of the country are human. It is commonly
understood, at least among domestic workforces, that the survival and growth of the nation in a
highly competitive international society bases on, the security of being able to improve,
resources, the continuous technological innovation, and the development of human resources.
These economic conditions are commonly embedded in every Japanese mentality. These
507
conditions do not make people selfish or desperate, but motivate to work harder in cooperation
with others who have the same destiny.
Another factor that plays a significant role in Japanese economy success is its concept of
quality control. Quality control is “a system or means to produce economically products or
service with a quality that matches the buyer’s requirement”. Quality control is setting a quality
target for a company that assures the quality that is required the customer and achieving it
rationally and economically.
This quality is not only the quality specified, but quality in a board sense that includes
function, produce life, economy of use, safety, and service.
It is probably very common for anybody to realize that cheap products will sell even if
the quality is poor and expensive product will sell as long as the quality must be there at the
proper price. To illustrate this point, one might choose to compare between Japanese and
American cars. The Japanese apply the quality control at the strength of the engines of the cars
they make so that the cars keep running day after day if the cars are well taken care of, and
maintain the proper price by making the car body smaller and cutting luxury accessories.
Therefore, investment in education plays an important role in Japan economy and the profound
will and effort to maintain the good quality at the proper price and attitudes of the Japanese
industry toward product quality point out quiet clearly that the keys to economical success of
Japan is, the quality control of work system and work securities. In the United States, only Fork,
Hewlett Packard and Xerox have adopted the Japanese style quality control.
SUMMARY AND CONCLUSION
The lifetime employment and seniority wage system has the function of employment
stability and of wide permission of employer’s right. In turn, the employees develop the feeling
of loyalty and work more productively for the company. It is like fair development of give-and-
take between employers and employees. The quality concept and the work system can be the
only reason that leads Japan to be one of the economically successful in the world.
Keys to success for Japan; Increase productivity is attained by implementing techniques
such as product quality improvements, training managers and employees for high productivity
achievement, the team work approach, effective management information systems, and quality at
work life programs.
REFERENCES
Adams, M., and Iowa, H. A Financial History of the New Japan. Tokyo: Kodansha International
Ltd. 1972. p. 1-285.
Duke, Benjamin. Lessons for Industrial America. The Japanese School; New York, Praeger,
1986. p. 25-49.
Nomura, Sago Kenkyuio. Forward. Investing in Japan. Brian Reading. Tokyo; Woodhead-
Falkner Limited, 1978. p. 1-189
Pampel, T.J. Japan: The Dilemmas of Success: Headline Series. Science; Ephrate. Pa Jan./Feb.,
1986. p. 36.
508
A STATISTICAL ANALYSIS OF ORGANIZATIONAL EFFECTIVENESS

mbsat@nu.edu
Astrid M. Beckers, Cultures Etc.

ambeckers@yahoo.com
ABSTRACT
The structural foundation of organizations has been changing in recent years due to
compelling changes in organizational purpose and function. The American manufacturing sector
has lost its luster and backbone to other countries in the world that could get the job done faster
and cheaper. The present investigation tries to get some answers to the question: what could be
done in order to get back what was rightfully ours.
INTRODUCTION
The current state of manufacturing has been a major concern to industrial companies. In a
recent study, the Council of Manufacturing Associations (CMA) contended that while
manufacturing has been the engine for healthy economic growth and good jobs in the U.S.;
intense global competition and the rising cost of doing business threaten manufacturing’s ability
to maintain the nation’s economic strength and standard of living (CMA, 2003). In order to
sustain strong economic growth, U.S. manufacturers must improve business practices so that
higher productivity, profitability, innovation and other essential aspects of business will become
globally competitive. Studies have shown (Fawcett & Myers, 2001) that organizational
performance is directly influenced by organizational strategy and the structure of the
organization. Businesses are adjusting processes by incorporating advanced technologies,
implementing TQM, forming partnerships, and other mechanisms. The main purpose of this
paper is to present an overview of the business practices, environment, culture and strategies
practiced by manufacturing companies in the U.S..
LITERATURE REVIEW
Business practice and business performance are two different things. Logically, the best
practices should produce the best performance. Researchers have devoted considerable effort in
classifying and categorizing various facets of manufacturing practices and hypothesizing about
their impacts on organizational performance. Ungan (2005) classified the best practice context
into three elements: best practice factors, organizational factors, and environmental factors.
Through multiple regression analysis, he established a significant positive association between
management support and organizational resource availability, external pressures, perceived
operational benefits, and compatibility. Nahm, Vonderembse, and Koufteros (2004) proposed
that organizational cultural factors affect manufacturing practices and performance. They
developed a framework that relates culture and manufacturing practices to performance. Their
findings indicate that higher levels of customer orientation in the organization lead to higher
level of advanced manufacturing practices, which lead to better performance. Fawcett and Myers
509
(2001) proposed a conceptual framework of advanced manufacturing practices which tie the
product and employee development practices to the manufacturing process practices of just-in-
time production and manufacturing automation.
METHODOLOGY
Empirical data was collected through a survey of U.S. manufacturing companies. The
six-part questionnaire included questions on organizational profile, organizational practices,
organizational performance, business environment, organizational strategy, and organizational
culture. The organizational practices part was designed to capture detailed input in areas of
leadership, strategy and planning process, customer focus, information and analysis, people
management, process management, supplier relationships, technology management, R & D
management, knowledge management, and creativity and idea generation. The organizational
performance part asked for detailed input in the areas of product quality, product innovation,
process innovation, and financial performance. Two rounds of mail surveys were conducted. In
the first mailing, 800 letters were posted requesting CEOs to respond to the survey. In the second
mailing, 1200 companies (including many of those approached. Altogether, 108 responses were
received. The data was analyzed using the SPSS software. Out of 108 companies in the sample,
the majority of about 60% of the companies employed between 100 and 500 workers. The
average annual revenue was $314 million. About 80% of the companies were both ISO 9000
certified and had established TQM programs.
PROCESS MANAGEMENT PRACTICES, PRODUCT QUALITY, AND FINANCIAL

PERFORMANCE
The perception of product quality of the manufacturing companies responding is above

average in their industry. All four quality attributes (performance, conformance, reliabilty and
durability) ranked higher than 4 in the scale 1 (worst in the industry) to 5 (best in the industry).
The strongest relationships between process management practices and the dimensions of
product quality were observed for design process, and clear and standardized instructions. It is
interesting to note that extensive use of statistical techniques for process improvement and
reduction of variation was not significantly related to any of the dimensions of product quality.
The perception of financial performance of the manufacturing companies responding was
above average in their industries, but not as high as the perception of product quality.
Overall, the relationships between technology and financial performance were rather
strong. It appears that respondents consider technological leadership an important way to
maintain and improve financial performance.
ORGANIZATIONAL STRATEGY VERSUS PRODUCT AND PROCESS INNOVATION
The perception of product innovation performance and process innovation performance

of the manufacturing companies responding was above average in their industries.
510
TABLE
TABLE I: I:
Correlation
CorrelationCoefficients
Coefficientsbetween
betweenOrganizational
Organizational Strategies Product
Strategies and Product
Innovation Considerations
Innovation Considerationsofofthe
theCompany
CompanyRelative
Relativeto
toMajor
Major Competitors Industry
Competitors in the Industry
UseofofLatest
Use Latest
Levelofof
Level Technological
Technological Number
Number of of
Noveltyofof
Novelty Innovations
Innovations Speed of
Speed of Number of New
New
Company’s
Company’s ininNew
New New
New New Products
Products
New
New Product
Product Product
Product Products First-to-
First-to-
Product
Product Development
Development Introduction
Introduction Introduced
Introduced Market
Market
Development
Development andand Introduction
Introduction ofof Major
0.489**
0.489**
Major 0.404**
0.404** 0.352**
0.352** 0.445**
0.445** 0.394**
0.394**
andand Frequent
Frequent Product
Product Innovations
Innovations is is
Primary
Primary Strategy
Strategy
Attempts
Attempts to be
to be Ahead
Ahead of of Competitionsinin
Competitions 0.560**
0.560** 0.472**
0.472** 0.437**
0.437** 0.604**
0.604** 0.592**
0.592**
Product
Product Novelty
Novelty or or Speed
Speed ofof Innovation
Innovation
Company
Company is Growth-,
is Growth-, Innovation-,
Innovation-, andand 0.524**
0.524** 0.412**
0.412** 0.367**
0.367** 0.494**
0.494** 0.444**
0.444**
Development-Oriented
Development-Oriented rather
rather than
than
Favoring Tried and True Market
Favoring Tried and True Market
Pursue a Tough “Undo the Competitors” 0.309** 0.221** 0.234** 0.312** 0.170*
Pursue a Tough “Undo the Competitors” 0.309** 0.221** 0.234** 0.312** 0.170*
Philosophy rather than Trying to
Philosophy rather than Trying to
Cooperate and Coexist with Competitors
Company has a Strong Inclination for 0.303** 0.272** 0.170* 0.334** 0.332**
Company has a Strong Inclination for
High-Risk Projects with Chances of very
0.303** 0.272** 0.170* 0.334** 0.332**
High-Risk Projects with Chances
High Returns rather than Low-Risk of very
High Returns
Projects withrather thanand
Normal Low-Risk
Certain Rates
Projects with Normal and Certain Rates
of Return
of Return
Price Cutting and Minimization of -0.198* -0.169* -0,183*
Price Cutting andis Minimization
Expenditures very ImportantofStrategy -0.198* -0.169* -0,183*
Expenditures
Cost Centers is and
veryFixing
Important Strategy
Standard Costs
Cost
byCenters
Analyzing andVariances
Fixing Standard
for CostCosts
Control
by is
Analyzing Variances for Cost
Used Frequently throughout the FirmControl
is Used Frequently
instead throughout
of only rarely or for athe Firm
Small Part
instead of only rarely or for a Small Part
of Operations
of Operations
Prefer to Explore and Make Decisions on
Prefer to Explore
the Basis and Make
of Gradual Decisions on
and Incremental
theChange
Basis of Gradual and Incremental
Change
*Weak relationship, correlation is significant at the 0.05 level (2=tailed)
*Weak relationship,
**Strong correlation
relationship, is significant
correlation at the
is significant 0.05
at the level
0.01 (2=tailed)
level (2=tailed)
**Strong relationship, correlation is significant at the 0.01 level (2=tailed)
511
511
TABLE
TABLEII:II:Correlation
CorrelationCoefficients
Coefficients between Organizational
Organizational Strategies
Strategiesand
andProcess
Process
Innovation
InnovationConsiderations
Considerationsof
ofthe
the Company
Company Relative to Major
Major Competitors
Competitorsininthe
theIndustry
Industry
Speed in
Speed in
Adoption
Adoption ofof Currency
Currencyofof Rate
RateofofChange
Change
latest
latest Technology
Technology ininProcesses,
Processes,
Technological
Technological Technologies
Technologies in
in used
usedinin Techniques
Techniquesandand
Competitiveness
Competitiveness Processes
Processes Processes
Processes Technology
Technology
Developmentand
Development andIntroduction
IntroductionofofMajor
Major 0.393** 0.447**
0.447** 0.431**
0.431** 0.397**
0.397**
andandFrequent
FrequentProduct
ProductInnovations
Innovationsisis
PrimaryStrategy
Primary Strategy
AttemptstotobebeAhead
Attempts AheadofofCompetitions
Competitionsin in 0.476**
0.476** 0.461**
0.461** 0.422**
0.422** 0.474**
0.474**
ProductNovelty
Product NoveltyororSpeed
SpeedofofInnovation
Innovation
Company is Growth-, Innovation-,
Company is Growth-, Innovation-, and and 0.444**
0.444** 0.484**
0.484** 0.449**
0.449** 0.474**
0.474**
Development-Orientedrather
Development-Oriented ratherthan
than
FavoringTried
Favoring Triedand
andTrue
TrueMarket
Market
Pursuea aTough
Pursue Tough“Undo
“UndothetheCompetitors”
Competitors” 0.234**
0.234** 0.173*
0.173* 0.219**
0.219**
Philosophyrather
Philosophy ratherthan
thanTrying
Tryingtoto
Company has a Strong Inclination for 0.269** 0.312** 0.251** 0.298**
Company has a Strong Inclination for 0.269** 0.312** 0.251** 0.298**
High Returns rather than Low-Risk
High Returns rather than Low-Risk
of Return
ofPrice
ReturnCutting and Minimization of -0.261** 0.225**
Price Cutting and
Expenditures Minimization
is very Important ofStrategy -0.261** 0.225**
Expenditures
Cost Centersisandvery Important
Fixing Strategy
Standard Costs
Cost Centers and
by Analyzing Fixing Standard
Variances Costs
for Cost Control
byisAnalyzing Variances for Cost
Used Frequently throughout the Firm Control
is instead
Used Frequently throughout
of only rarely the Firm
or for a Small Part
instead of only rarely or for a Small Part
of Operations
ofPrefer
Operations
to Explore and Make Decisions on
Prefer to Explore
the Basis and Make
of Gradual Decisions on
and Incremental
theChange
Basis of Gradual and Incremental
Change
*Weak relationship, correlation is significant at the 0.05 level (2=tailed)
*Weak relationship,
**Strong correlation
relationship, is significant
correlation is significantat at
thethe0.05
0.01level
level(2=tailed)
(2=tailed)
**Strong relationship, correlation is significant at the 0.01 level (2=tailed)
DISCUSSION
DISCUSSION
The main result of this study is not surprising: the characteristics, practices and culture of
The mainorganizations
manufacturing result of this are
study is not surprising:
strongly related to their the characteristics, practicesthe
financial performance, andquality
cultureofof
manufacturing
their products organizations
and the degreeare stronglyand
of product related
process to innovation
their financial
that performance, the quality
they exhibit. There are alsoof
their
someproducts and theordegree
relationships, of relationships,
lack of product and process
that areinnovation
surprising.Inthatthe
they exhibit.
area There quality
of product are also
muchrelationships,
some of what we or found
lackwas expected. “Fool-proof”
of relationships, processes and,
that are surprising.In theitsarea
close
of relative, clear,
product quality
standardized
much of whatand we documented
found was instruction, are importantprocesses
expected. “Fool-proof” in achievingand,high
its product quality. clear,
close relative, The
concept of internal
standardized customer was
and documented not ratedare
instruction, as important
an important determinanthigh
in achieving of product
productquality.
quality.The
The
lack ofofrelationship
concept betweenwas
internal customer thenotuserated
of statistical techniques
as an important and any of
determinant dimension of product
product quality. The
quality
lack was surprising.
of relationship We hypothesize
between the use ofthat the use of
statistical statistical and
techniques processanycontrol tools of
dimension is now so
product
ingrained
quality wasinto manufacturing
surprising. processes that
We hypothesize that the
the use
survey respondents
of statistical did not
process consider
control toolsthe
is use
nowofso
those “routine”
ingrained tools to be exceptional.
into manufacturing processes that the survey respondents did not consider the use of
The elements
those “routine” tools to be of exceptional.
organized culture are in many cases strongly related to financial
performance as measured
The elements by salesculture
of organized growth,aremarket
in many sharecases
and strongly
profitability. Teamwork,
related to financiala
performance as measured by sales growth,512 market share and profitability. Teamwork, a
512
philosophy of growth and expansion, and a strong focus on goals are all strongly related to
financial performance. On the other hand, centralization or decentralization and a focus on
efficiency were not as strongly related to financial performance. A believe in reutilization,
formalization and structure is unrelated to financial performance indicating a relaxation of
traditional hierarchical structures in manufacturing organizations. U.S. manufacturers also
indicate that technology management practices are directly related to financial performance.The
most interesting results show up in the relationships between organizational strategy and
innovation. As expected, innovation is inversely related to price and cost cutting. The inverse
relationships are particularly strong in the areas of technological competitiveness and rate of
change in processes. Conversely, organizations that attempt to be leaders in innovation achieve
strong relationships with speed of new product and process introduction and with the number of
new products introduced. A notable lack of relationship is between firms that use gradual or
incremental change and product or process innovation. It has been widely understood that U.S.
manufacturers tend to “play for the home run” rather that use the incremental approach of many
Asian companies. This study reinforces this notion.
It is interesting to note that U.S. manufacturers rated their product quality much higher in
their industries than they did their financial performance or their degree of innovation (product or
process). These ratings raise some interesting questions that remain unanswered by the present
study. Is there a time lag between achieving high product quality and seeing the results in the
“bottom line”? Is product quality really a differentiating factor for the competitiveness of U.S.
manufacturing? Is the U.S. still the world leader in innovation? In future research, the results of
this study will be combined with the results of similar studies for other countries (Prajogo &
Sohal, 2003, 2004) to really shed light on how U.S. manufacturing differs from manufacturing in
other countries.
REFERENCES
Council of Manufacturing Association.The Case for a Strong Manufacturing Base. CMA Press
Release, 2003.
Fawcett, S.E., and Myers, M.B. “Product and Employee Development in Advanced
Manufacturing: Implementation and Impact.” International Journal of Production
Research, 39, (1), 2001, 65-79.
Nahm, A.Y., Vonderembse, M.A., and Koufteros, X.A. “The Impact of Organizational Culture
on Time-Based Manufacturing and Performance.” Decision Sciences, 35, (4), 2004, 579.
Prajogo, D.I., and Sohal, A.S. “The Multidimensionality of TQM Practices in Determining
Quality and Innovation Performance – An Empirical Examination.” Technovation, 24,
(6), 2004, pp.443.
Prajogo, D.I., and Sohal, A.S. “The Relationships between TQM Practices, Quality Performance,
and Innovation Performance.” International Journal of Quality and Reliability, 20, (8/9),
2003, 901.
Ungan, M. “Management Support for the Adoption of Manufacturing Best Practices: Key
Factors.” International Journal of Production Research, 43, (18), 2005, 3803-3820.
513
CHAPTER 22
MARKETING RESEARCH
514
NEURAL NETWORK BASED MODEL FOR MEASURING THE EFFECTS OF
MARKETING RESEARCH ON MARKETING PERFORMANCE
Selim Zaim, Fatih University

szaim@fatih.edu.tr
Talha Harcar, Pennsylvania State University at Beaver

tdh13@psu.edu
Mahmut Paksoy, Kultur University

m.paksoy@iku.edu.tr
ABSTRACT
The principal aim of this study is to determine the impact of marketing research on
marketing performance of SMEs. Based on theoretical considerations, a model is proposed
linking the Marketing Research constructs to the marketing performance construct. Exploratory
and confirmatory factor analyses empirically verified and validated the underlying dimensions of
Marketing research and marketing performance. Neural networks were employed to test the
model drawing on a sample of 141 small and medium sized enterprises (SMEs) in Turkey. A
strong and positive relationship was noted between the level of marketing research
implementation and marketing performance.
INTRODUCTION
Recently, there has been considerable interest in the development of artificial neural
networks for solving a wide range of problems from different fields. Neural networks are
distributed information processing systems composed of many simple computational elements
interacting across weighted connections. Inspired by the architecture of the human brain, neural
networks exhibit certain features as the ability to learn complex patterns of information and
generalize the learned information. Neural networks are simply parameterized non-linear
functions that can be fitted to data for prediction purposes (Haykin, 1994).
The main appeal of neural networks is their flexibility in approximating a wide range of
functional relationships between inputs and outputs. Indeed, sufficiently complex neural
networks are able to approximate arbitrary functions arbitrarily well. One of the most interesting
properties of neural networks is their ability to work and forecast even on the basis of
incomplete, noisy, and fuzzy data. Furthermore, they do not require a priori hypothesis and do
not impose any functional form between inputs and output. For this reason, neural networks are
very useful in those cases where knowledge of the functional form relating inputs and output is
lacking, or when a prior assumption about such a relationship should be avoided (Jang, Sun, &
Mizutani, 1997).
In this study, because of the above mentioned advantages, a neural networks model has
been developed to determine the most important critical factors of total quality management and
to measure the effects of the critical factors of total quality management on marketing
performance in small and medium sized enterprises in Turkey.
515
METHODOLOGY
The survey instrument is composed of questions relating to the following two constructs
that include the extent of marketing research implementation and marketing performance. In its
present form, the number of items was reduced to 20 from the initial set of 30 items in the
original questionnaire. Each item related to marketing research context was rated on a five-point
scale, ranging from “very low” to “very high”. Measures of marketing performance (PERF) were
based on items derived from a number of previous studies using this variable. The performance
construct was composed of marketing performance indicators which include: sales growth over
the last three years, market share, profit to revenue ratio, return on assets, and cash flow from
sales. Data for this study was collected using a self-administered questionnaire that was
distributed to 500 SMEs operating in textile industry within the city of Istanbul in Turkey. This
sample was selected randomly from the database of Turkish Small Business Administration
(KOSGEB). As of 2005, the KOSGEB database includes a total of 12,270 SMEs in Istanbul,
which accounts for nearly 28% of all SMEs registered throughout Turkey.
It was requested that the questionnaire be completed by a senior officer/executive in
charge of quality management. The responses indicated that a majority of the respondents
completing the questionnaire were in fact members of the top management. Of the 500
questionnaires posted, a total of 168 questionnaires were returned after one follow-up. Twenty-
two questionnaires were eliminated due to largely missing values. The overall response rate was
thus 28% (141/500), which was considered satisfactory for subsequent analysis. A comparison of
the annual sales volume, number of employees and sub-industry variation revealed no significant
differences between the responding and non-responding firms (p>0.1). Thus, the responses
adequately represented the total sample group.
RESULTS OF NN MODELLING
Exploratory factor analyze with varimax rotation was performed on 20 items, measuring
marketing research practices, in order to extract the underlying dimensions. The factor analysis
produced seven factors which explained 78.6 percent of the observed variance. The Cronbach’s
alpha values for the underlying factors range from 0.75 through 0.86 with all values being well
over 0.70. These factors were labelled as business intelligence implementation (factor 1), role of
marketing management (factor 2), sales force involvement (factor 3), interaction between
decision makers (DM) and research (factor 4), data quality (factor 5), availability of secondary
data (factor 6) and Digital Dash Boards (factor 7). Table 1 shows the factor loadings for each of
the seven discovered factors.
516
TABLE I: Exploratory Factor Analysis of Marketing Research Implementation
Factors and their indicators Factor Loading

Business Intelligence Implementation
Business driven methodology 0.84
Mapping the solutions to the user requirements 0.78
Performance considerations of the BI system 0.75
Project Management 0.70
Role of Marketing Management
Acceptance of marketing research role in decision making 0.82
Committed management support & sponsorship 0.76
Existence of marketing management objectives for marketing research 0.71
Sales Force Involvement
Feedback of the sales people on market conditions 0.78
Degree of sales people’ participation in marketing intelligence 0.74
Recognition of sales people for superior marketing intelligence 0.55
Interaction between decision makers (DM) and researcher
Communication with decision makers (free exchange of ideas) 0.84
Cooperation with the decision makers 0.82
Confidence to decision makers 0.77
Data Quality
Availability of quality data 0.87
Use of data as mining tools 0.80
Validity of data 0.66
Availability of Secondary Data
Importance of secondary data resources 0.92
Purchase and media panels accessibility 0.70
Digital Dash Boards
Visual presentation of performance measures 0.75
Ability to identify and correct negative trends 0.69
The relationship between marketing research practices and marketing performance is

modelled using a customized neural network. Each marketing research factor is designed as a
hidden layer with a tangent sigmoid transfer function. Then the manifest variables (i.e. inputs)
are related to their factors (i.e. hidden layers). Finally, all seven marketing research factors are
linked to the output layer (i.e. marketing performance) with a linear transfer function. In the
model, marketing research practices are labelled as input variables while marketing research
factors are hidden layers. One neuron is used in the hidden layers in order to find the importance
of each marketing research practice in the whole system. The customized NN model is shown in
Figure 1.
517
FIGURE I: The NN model.
The backpropagation (BP) algorithm was used for training process. The BP algorithm is a
gradient algorithm, which minimizes the average square error between the current output and the
target value by modification of the network weights (Maren, Harston, & Pap, 1990). It carries
out supervised learning of neural network weights using training data as inputs and known output
minimizing the mean square error (MSE). Matlab 7.0 software with Neural Networks Toolbox is
used to develop and train the neural networks model. The data set was divided into two groups:
106 samples for training and 35 for testing. Customized neural networks were trained using the
training data set. Then the testing data were asked to the trained neural networks in order to
evaluate its estimation performance. The mean squared error was used as performance evaluation
criteria. After 300 epochs the minimum MSE value is reached. The MSE for training data is 0.34
and 0.51 for testing data. These values are accepted satisfactory.
LACK ANALYSIS AND GENERATION OF IMPROVEMENT AND REDESIGN

RECOMMENDATIONS
The current marketing research implementation of the SMEs in textile industry in

Istanbul was analyzed using the neural network model. Relevant improvement and redesign
recommendations were generated. The evaluation of current marketing research implementation
was carried out in the two stages. At the first stage complex criteria was evaluated and ranked
from most important to less important given in Table 2. At the second stage considering the
complex criteria, single criterion scores were calculated as shown in Table 3. Subsequently,
improvement plans were developed. This is illustrated and validated by a study in 141 SMEs in
Istanbul.
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TABLE II: Normalized Effects of Marketing Research Factors on Marketing Performance
Marketing Research Factors Normalized weight

Availability of Secondary Data 0.35
Digital Dash Boards 0.20
Data quality 0.18
Interaction between decision makers
(DM) and researcher 0.11
Sales Force Involvement 0.09
Role of marketing management 0.05
Business Intelligence Implementation 0.03
From Table 2, we can conclude that availability of secondary data has the most
significant effect (0.35) on marketing performance. It is followed by digital dash boards (0.20),
data quality (0.18) and Interaction between decision makers (DM) and researcher (0.11). Other
factors have considerably less effect on business performance.
TABLE III: Normalized Effects of the Inputs on their Related Factors
Normalized Weights of Related

Practices
Factors IN1 IN2 IN3 IN4
Availability of Secondary Data 0.97 0.03 - -
Digital Dash Boards 0.45 0.55 - -
Data Quality 0.37 0.61 0.02 -
Interaction between decision makers
(DM) and researcher 0.52 0.14 0.34 -
Sales Force Involvement 0.31 0.31 0.39 -
Role of marketing management 0.42 0.39 0.19 -
Business Intelligence Implementation 0.24 0.29 0.13 0.33
In SMEs, successes of marketing research depend on availability of secondary data. Since

SME’ do not have enough resources for primary data analysis we can propose they should use
the secondary data. The second important factor is digital dash boards which benefit includes;
ability to identify and correct negative trends, measure efficiencies/inefficiencies, ability to
generate detailed reports showing new trends, ability to make more informed decisions based on
collected business intelligence, align strategies and organizational goals and save time over
running (Wikipedia, 2010). Data quality is the third highest influence on marketing performance.
In this model, data quality includes availability of quality data, use of data as mining tools and
validity of data.
519
CONCLUSION AND IMPLICATIONS
An approach for marketing performance evaluation of companies in SMEs is proposed. It

is based on a checklist tool using a neural networks-based evaluation model. The increases in
computer power, on the one hand, and the decrease in computer costs, on the other hand have
stimulated the research on Artificial Neural Network (ANN). Recently many ANN models have
been applied in industry. Many ANN applications in industry use ANN models as an alternative
to multivariate statistical methods such as logistic regression analysis. They attempt to show that
ANN models have better predictive power than multivariate statistical methods. In analyzing the
marketing research implementation for generating redesign recommendations we use neural
networks. Neural networks development does not require knowledge of the underlying
relationships between input and output variables (both linear and non-linear), since the network
“learns” hidden relationships in the data. These complex relationships are discovered and
automatically assimilated into weights contain the “learned information” from the network
training phase and are analogous to regression coefficients. We train the neural network weights
bottom-up. Than we use top-down analysis for finding the most important checklist items which
improvement could most significant increase the total quality and organizational performance.
Only by looking the worst values we cannot find easy the most important items. The main
advantage of this method is to go a step further than simple modeling, i.e. based on the analysis
results generate relevant improvement recommendations. Based on the neural network approach,
the most important marketing research criteria that affect performance of the company in textile
industry in Istanbul were determined. Relevant recommendations and measures for improving
the firm performance were proposed. While most SMEs in Turkey do not have an established
marketing research department, many of them have invested substantial resources in adapting
and implementing marketing research to improve their performance. It is generally accepted that
several SMEs did not achieve any improvement and some only a little. Specifically, due to the
presence of a multitude of barriers, many organizations utilize only a partial implementation of
marketing research, and hence are unable to achieve continuous and systematic improvement. It
should also be acknowledged that the study is subject to some methodological limitations. First,
it would be highly suggested that the size and nature of the sample must be enhanced to ensure
variability and control for possible extraneous variation. While the sample is restricted to only a
single region and a single industry, it would be strongly recommended that data should be
gathered from various parts of Turkey including both various manufacturing and service
industries. Since the data in this study were collected from top managers of organizations on the
basis of their subjective evaluations, objective performance indicators should also be employed
in the analysis. Finally, additional constructs could be utilized in the future studies to gain
additional insights in exploring the relationship between marketing research and marketing
performance.
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REFERENCES
Haykin, S. Neural Networks: A Comprehensive Foundation. New York: Macmillan College

Publishing, 1994.
Jang, J.S.R., Sun, C.T., and Mizutani, E. Neuro-fuzzy and soft computing: a computational
Approach to Learning and Machine Intelligence. Upper Saddle River, NJ: Printice Hall,
1997.
Maren, A., Harston, C., and Pap, R. Handbook of Neural Computing Applications. London:
Academic Press, 1990.
Wikipedia, “Management Information Systems.”
http://en.wikipedia.org/wiki/Dashboards_(management_information_systems), January,
2010.
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MARKETING STRATEGY FOR THE DO-IT-YOURSELF CONSUMER
Dwane Hal Dean, Frostburg State University

dhdean@frostburg.edu
ABSTRACT
The goal of the study was insight into why some consumers avoid a service encounter
and choose to “do-it-yourself” (DIY). Fifty adults were interviewed, sub-grouped into DIYers
and non-DIYers for the activities of motor oil changes, haircuts, and tax return preparation.
Motivations affecting DIY included: saving money, control over the procedure, a feeling of
accomplishment, meeting the expectations of others, lack of trust in service providers, and fear
of doing a poor job. However, DIY activity required a set of enabling factors as well: necessary
equipment, facilities, knowledge and skill, and perceived time to perform the task. For some
consumers, the decision to DIY appears to be related to a service failure with a provider.
Guidelines to better market to the DIY segment are offered.
INTRODUCTION
In an early article investigating self-service, Bateson (1985) identified a consumer

segment that preferred to “do it themselves” and render a large part of the service within a
service encounter, even in the absence of monetary or time-saving incentives. The author labeled
this participative group the do-it-yourself (DIY) consumer. Some consumers take the
participative role to the extreme and choose to provide all of their own service, avoiding a
service encounter entirely. Although understanding motivations for DIY and developing a
marketing strategy to better serve DIY consumers would seem to be of interest to both
academicians and service providers, it has been noted that there is a relative lack of literature on
this topic (Godar & Godar, 2001).
The goal of the present study is better understanding of DIY service, focusing on three
DIY activities (self-service oil changes, haircuts, and income tax preparation). From thematic
analysis of participant responses, a conceptual framework of DIY service is presented. Finally,
based on the framework, certain guidance is given that may aid in the development of a
marketing strategy for this segment.
BACKGROUND
The current service paradigm is that companies desire to engage customers in the co-
production of their service (Honebein & Cammarano, 2006; Bitner, Ostrom, & Meuter, 2002).
Co-production has been described as a sliding scale, ranging from the company doing all the
work to the customer doing all the work. However, there is a distinction between DIY service
and self-service. In self-service, there is still a service encounter (if not with company personnel
then at least with some form of self-service technology and the brand of the company). With
DIY service, the consumer does not have an encounter with the service provider or his brand
(although the consumer may need to purchase or rent materials from another retailer to
accomplish the DIY task).
There is a relatively small body of DIY literature. Most of this research stream is devoted
to DIY home-improvement products retailing (Hornik & Feldman, 1982; Davidson & Leather,
522
2000). A smaller body of work has investigated what motivates DIY service. Browning and
Zabriskie (1985) note that DIY home improvement is not always about saving money; rather, it
may be about achieving an outlet for creativity and fulfillment. Another author (Williams, 2004;
Williams, 2008) concludes that both motives operate simultaneously. Yet, the most insightful
investigation of DIY motives comes from the work of Bateson (1985). From focus group
discussion, this author identified core motives for consumers wishing to be very active co-
producers of service within a service encounter. These include: control (of the procedure, the
outcome, and the timing of service production), independence (not wanting to depend on others),
and risk (financial, psycho-social, and performance risk). Results of the present study support
these motivations for DIYers but also suggest additional motivations as well.
A MODEL
A model of antecedents and outcomes of DIY service is presented in Figure 1. The model
proposes two sets of factors as antecedents to DIY: motivational factors and enabling factors.
Elements within the motivational box are given a +/- valence sign relative to whether the element
would favor or inhibit DIY service. Enabling factors are conceptualized as situations that may
facilitate or inhibit DIY service performance, but unlike motivations, they are listed absent a
valence sign, suggesting that they do not have an affective component. Although presented as
separate boxes, motivations are believed to influence enabling factors. For example, lack of
knowledge or skill (enabling factors) may inhibit DIY service performance, but a motivated
consumer may choose to acquire the requisite knowledge and skill to perform the DIY activity.
Thus the two sets of factors are linked.
METHODS
A modified snowball sampling technique was used to obtain a final sample of 50 adults
residing in Albuquerque, New Mexico, in 2008. Names of potential interviewees were solicited
by asking people if they knew acquaintances that would either fit the DIYer profile or the polar
opposite.
Interviews were loosely structured. Respondents were first asked to explain why they
considered themselves a DIYer or non-DIYer. They were then asked why they behave the way
they do toward DIY service, whether they knew anyone else who acted towards DIY as they do,
and finally, respondents were asked to speculate on this other person’s motivations to do or not
do DIY service. Although a number of different types of DIY service were addressed, interviews
tended to focus on self-service motor oil changes, haircuts, and income tax preparation. The
interview was completed with demographic information.
RESULTS
Oil Changes
Several response themes for oil-change DIYers were identified. These include: saving
money, control over the procedure, independence (not having to rely on someone else), enhanced
self-efficacy, and lack of trust (believing the mechanic may make a mistake). The latter focused
on the possibility the mechanic may put in too much oil and/or over-tighten the oil pan drain
plug, conditions which could lead to an oil leak.
523
Among confirmed non-DIYers of oil-changes, the most prominent themes were: not
knowing how, fear of doing the task incorrectly, and being too busy. Additional comments
related to the convenience of oil-change service providers, the related problem of having to
correctly dispose of used motor oil, not wishing to do the task when you are older, and not
having a garage or the equipment to do the procedure.
Identified themes for this first activity support most of the elements within the
motivational and enabling factors boxes in Figure 1. However, two elements, “meet expectations
of others” and “others in household that DIY,” deserve further explanation. Two comments
suggested that others in their household typically engage in DIY oil changes. For the female that
mentioned this, it had the effect of dis-motivating her to learn to do a DIY oil change because
there were others in the household to do the procedure for her. In the case of the male with four
brothers who DIY, there may be some implied social pressure to DIY because this is something
“men” are supposed to do.
Haircuts
The primary themes given by respondents who cut their own hair were that the activity
saves them money and it more convenient than going to a barber or stylist (saving travel and
waiting time as well as gasoline). The interpretation is that self-barbering appears to result in a
higher level of overall value for these people than going to a stylist. Notably, the trust issue
mentioned by oil-change DIYers was not stated here. This may be due to the reversibility of a
bad haircut (it will grow back) whereas vehicle damage that results in oil leaks is more
permanent. Among people who did not want to cut their own hair, the reasons given were lack of
skill and fear of doing a poor job.
Income Tax Preparation

The income tax preparation DIYers raised several points. One is that they want the return
to be correct and accurate (meaning they want all legitimate deductions to be taken). A concern
was voiced that a seasonal employee at a tax preparation service may not be well-trained enough
to serve them properly. One person mentioned being taught by her father, and this is an
important point for all DIY activities (listed as “others in the household that DIY” in the
motivational factors box in Figure 1). Having a tutor to teach you how to DIY increases personal
knowledge, serves as a role model, and perhaps also reflects a household value placed on the
ability to DIY. Lack of knowledge, time, and complexity were all mentioned by non-DIYers as
reasons to not prepare their taxes, but there are user-friendly software products that mitigate
these reasons, and the availability of this software was mentioned by a DIYer as a specific reason
to prepare her own tax return.
524
FIGURE
FIGURE
II: II:
Conceptual
Conceptual
Model
Model
of Antecedents
of Antecedents
andand
Outcomes
Outcomes
of Do-It
of Do-It
Yourself
Yourself
Service
Service
Future
FuturePurchase
Purchase
Behavior
Behavior
Affected
Affected
Now
Nowneed
need
to buy
to buy
inputs
inputs
to accomplish
to accomplish
thethe
DIYDIY
tasktask
Discontinue
Discontinue
purchase
purchase
of service
of service
from
from
service
service
provider
provider
DIYDIY
Service
Service
Performance
Performance
Enabling
Enabling
Factors
Factors
Facilities
Facilities
Equipment
Equipment
Knowledge
Knowledge
Skill
Skill
Perceived
Perceivedtime
time
Motivational
Motivational Factors
Factors
Save
Save
money
money (+)(+)
Save
Save
timetime
(+)(+)
Control
Controlof procedure
of procedure andand
outcome
outcome(+)(+)
Feeling
Feelingof accomplishment
of accomplishment (+)(+)
Meet
Meetexpectations
expectations of others
of others(+)(+)
Reversibility
Reversibility of procedure
of procedure(+)(+)
Older
Olderageage
(-) (-)
Fear
Fear
of doing
of doinga poor
a poor
jobjob
(-) (-)
Others
Othersin household
in household thatthat
DIYDIY(+)(+)
andand(-) (-)
Lack
Lack
of trust
of trust
in service
in service
providers
providers(-) (-)
butbut
(+)(+)
forfor
DIYDIY
525525
Other Findings
There may be a relationship between service failure and the decision to DIY. A 20 year
old female mentioned that a salon-performed hair dye had turned out really awful, prompting her
to dye her own hair and vow never to go back to a salon for this service. However, there was also
evidence that service failure can occur within a DIY context. Another female, age 25, reported
that she attempted to DIY her own hair highlights after a salon had allowed bleach to burn her
scalp and spill onto and bleach her shirt. Unfortunately, her attempt at DIY highlights resulted in
orange-colored hair, and so she decided to return to a salon service provider (noting that she is
now very careful about who she trusts with her hair).
Although the focus of this study was on self-service oil changes, haircuts, and income tax
return preparation, respondents were encouraged to mention other DIY activities they perform.
The one noteworthy finding from this evidence is that the pattern of DIY activities appears to be
relatively specific to the individual. That is, just because a person is a DIYer for one activity, this
does not necessarily predict that the person will DIY other types of activities in any particular
pattern. An example is a 47 year old male who performs DIY plumbing, yard work, house
painting, and income tax preparation. But this same individual does not change his own motor oil
or cut his own hair.
DISCUSSION
From qualitative data obtained from respondents in this study, a conceptual model of DIY
service has been proposed (Figure 1). This is believed to be a contribution because there is no
current model of DIY service in the scant literature on the topic. Also, the proposed model may
guide service providers in developing a better marketing strategy to serve the DIY segment
(detailed in the managerial implications section).
The present study finds that the core motivational factors identified by Bateson (1985) for
participation in self-service (control, independence, and perceived risk) also apply to consumers
who choose to avoid a service encounter and DIY. Additional motivational factors were found,
as well as a set of enabling factors that appear necessary for a motivational intent to progress to
actual DIY service performance (Figure 1).
Two general findings within the current study are noteworthy. The first is the observation
that the pattern of DIY activities for any one individual is somewhat unique, meaning that
performing a specific type of DIY activity does not necessarily predict performance of any other
specific type of DIY activity. The second general finding is an anecdotal association between
service failure and the decision to DIY. The literature has already linked service failure with
consumer perceptions of unfairness and anger (McColl-Kennedy and Sparks, 2003). The
respondents in this study who mentioned this appeared to have had strong affective reactions to
the service encounter which prompted a withdrawal from not only the particular offending
service provider but all service providers in the industry.
Managerial Implications
Conceptualizing DIY service as shown in Figure 1 is believed to have practical
usefulness. For example, the motivational factors are relatively fixed (based on enduring values,
attitudes, and personality). In contrast, the enabling factors are more transient (perceived time
available for the task can change depending on one’s level of motivation, and knowledge, skill,
and equipment can be acquired). The implication is that service providers can probably do little
526
to change motivational factors, but they may be able to change the enabling factors. As an
example, Lowe’s Home Improvement Centers typically offers classes on how to lay the flooring
tile sold in the store (changing the consumer’s knowledge enabling factor). Home Depot has a
tool rental business that mitigates lack of equipment as a factor. Overcoming the knowledge
barrier is made even easier when this can be incorporated into a software product. An example is
software to facilitate the preparation and e-filing of federal taxes. This mitigates both a lack of
knowledge and perceived time on the part of the consumer.
Limitations and Future Directions

The limitations of this study are similar to those for exploratory research in general: 1)
use of small samples that may not fully represent the population of interest, 2) potential for over-
reliance on the responses of certain individual participants who just happen to express
themselves well, and 3) potential for misinterpretation of open-ended responses by the
investigator. For all of these reasons, the ability to generalize the findings to a broader population
is limited.
Future research on this topic may wish to investigate the relationship between personality
type, individual values, and the tendency to engage in DIY service. Certain personality types
and/or values may make the person more likely to DIY. Additionally, the finding in this study of
a decision to DIY after a service failure may suggest that experience (as opposed to personality
and values) may also influence DIY activity.
REFERENCES
Bateson, J. “Self-Service Consumer: An Exploratory Study.” Journal of Retailing, 61, (3), 1985,
49-76.
Bitner, M., Ostrom, A., and Meuter, M. “Implementing Successful Self-Service Technologies.”
Academy of Management Journal, 16, (4), 2002, 96-108.
Browning, J., and Zabriskie, N. “Do-it-Yourself Consumers: Segmentation Insights for
Retailers.” Journal of Consumer Marketing, 2, (3), 1985, 5-15.
Davidson, M., and Leather, P. “Choice or Necessity? A Review of the Role of DIY in Tackling
Housing Repair and Maintenance.” Construction Management and Economics, 18, (7),
2000, 747-756.
Godar, S., and Godar, M. “Competing Against DIY.” Services Marketing Quarterly, 22, (2),
2001, 73-82.
Honebein, P., and Cammarano, R. “Customers at Work.” Marketing Management, 15 (1), 2006,
26-31.
Hornik, J., and Feldman, L. “Retailing Implications of the Do-It-Yourself Consumer
Movement.” Journal of Retailing, 58, (2), 1982, 44-63.
McColl-Kennedy, J., and Sparks, B. “Application of Fairness Theory to Service Failures and
Service Recovery.” Journal of Service Research, 5, (3), 2003, 251-266.
Williams, C. “A Lifestyle Choice? Evaluating the Motives of Do-it-Yourself (DIY) Consumers.”
International Journal of Retail & Distribution Management, 32, (5), 2004, 270-278.
Williams, C. “Re-Thinking the Motives of Do-It-Yourself (DIY) Consumers.” International
Review of Retail, Distribution & Consumer Research, 18, (3), 2008, 311-323.
527
USE OF QUALITATIVE FORECASTING TECHNIQUE FOR THE MEASUREMENT
OF COUNTRY TOURISM MARKET POTENTIAL
Erdener Kaynak, Pennsylvania State University at Harrisburg

k9x@psu.edu
Jose I. Rojas-Mendez, Carleton University

jose_rojas@carleton.ca
ABSTRACT
The purpose of this study is to project the future tourism market potential of Chile by use
of the Delphi qualitative forecasting technique. The Delphi survey as a market research tool is
used to predict the future tourism and hospitality scenarios for Chile from 2007 through the year
of 2027 as well as their marketing implications. Although the tourism demand projections predict
positive trends in the short term, but in the medium and long term tourism demand is subjected to
a host of fast changing, volatile uncontrollable factors which make long- term projections
difficult. The study findings indicate that Chilean tourism experts forecast progressively more
changes and higher impact as one moves from values, structures, and events. The managerial
implication of this for tourism industry operators and public policy makers is that increased
tourism activities may prove more beneficial if focused on changing hospitality and tourism
industry structures and events rather than changing the value systems of the people.
INTRODUCTION
In recent years, there has been a considerable interest in the use of forecasting techniques
for the measurement of tourism market potential of countries. Forecasting is an essential tool in
tourism policy formulation and planning. It was suggested by Calantone (1987) that the ability to
forecast tourism demand accurately despite a fast changing business environment can be very
beneficial in this extremely competitive industry. It was indicated that the Delphi technique has
been used with substantial success in the past for predicting tourism demand in the light of long
term changes which may occur in the tourism industry of a country. The aim of Delphi studies is
to reach a group opinion where each expert participating in the study is not influenced by the
opinions or personalities of the other participants (Archer, 1980, p. 11). The approach addresses
what is probable or even possible in the future uses convergence of expert opinion as the
underlying criterion in an attempt to produce more precise projections (Kaynak & Macaulay,
1984; Kaynak, Bloom, & Leibold, 1994).
SCOPE AND PURPOSE OF THE STUDY
The purpose of this study was to examine tourism market potential of Chile by the year
2027. The use of forecasting is most useful in tourism market planning because the industry is
affected by a host of uncontrollable variables. In addition to environmental changes and
developments, new behavioral tendencies towards travel and changes in attitudinal orientations
of people are having a major impact on the tourism outlook in the years to come. In the light of
these changes and developments, the specific purpose of this study was: i) to determine how
528
value changes in Chilean society may affect the development in tourism and hospitality industry;
ii) in what ways the changing structure of Chilean tourism and hospitality industry might affect
Chilean economy depending on tourism; iii) to evaluate events having potential impact on
tourism and hospitality training and development; and iv) what direction should Chilean
government’s tourism ministry as well as tourism industry organizations and actors of the
industry take in regards to tourism market development?
RESEARCH METHODOLOGY
Sample frame: A list of 2,500 experts (tourism chambers of commerce, national tourism
service, instructors at Universities offering tourism programs) and business owners/executives
working along the country in the tourism industry in Chile (i.e., hotels, restaurants, travel
agencies) was gathered from telephone directory and Internet. Efforts were made to produce such
a list in the most comprehensive possible way.
Measurement instrument: questionnaire was designed in English and professionally
translated into Spanish by a bilingual person whose first language was Spanish, and then it was
back translated into English language by a bilingual person whose first language was English.
This procedure was followed to ensure equivalence. The questionnaire was implemented to run
in the Internet platform, using HTML, PHP (v. 4), JavaScript and database MySql (v. 4).
STUDY FINDINGS
The Delphi technique presents a very useful approach to the analysis of complex,
multidimensional business problems. The major purpose is to provide information about events
and occurrences in Chilean tourism and hospitality industry environment, the knowledge of
which would aid top management in its task of predicting the industry’s future course of action.
Value Changes in Chilean Society and its Impact on Tourism and Hospitality Industry
Study results indicated that there were not much value changes in the Chilean society and
the slight value changes have created medium impact on the development of tourism and
hospitality industry. This was an unexpected findings of the study. Tourism experts indicated
slight increase in materialism, rewarding work as a virtue, shift towards individualism,
participation in decision-making in business, acceptance of change, and self expression. On the
other hand, a slight decrease is expected in maintaining traditionalism in family norms. Finally,
no change is expected in traditional approach in work, traditionalism in education, hard work as
a virtue, authoritarianism in business decision-making, authoritarianism in family decision-
making, individual involvement in society, participation in family decision making, and
communal obligations encroaching upon work settings.
Changing Structure of Chilean Tourism and Hospitality Industry

With the changing economic infrastructure of Chile, tourism experts believe that owing
to increased tourist potential, there will be a significant increase in the number of hotels,
trekking/hiking/mountaineering, airlines traffic, eco tourism, personal services (i.e. tourist guide,
sport trainers etc.).These will be supported by corresponding tourism and hospitality industry
offerings. At present, the dominant tourism activity is activity-based tourism. These tourists
prefer to engage in nature bound activities (eco tourism) where Chile offers a distinct advantage.
As a result of this, rural tourism will show a growth rate in the coming years. To facilitate the
529
movement of this increased tourist flows, a marked growth in inter-city bus lines traffic, special
bus tours, cruising services in the rivers and channels in the south and higher demand for
handcraft centers. In the light of these newer developments, we will see higher involvement of
government at different levels with various tourism and hospitality industry activities in a
facilitatory capacity.
SCENARIO ANALYSIS FOR CHILEAN TOURISM AND HOSPITALITY
Forecasting is defined as the art of predicting the occurrence of tourism and hospitality
related events before they actually take place (Archer, 1980). These types of predictions provide
wealth of information which enables tourism public policy makers and industry planners to make
informed decisions before the predicted events take place. In this study, the researchers tried to
identify events having major impact on tourism development. Besides identifying the likelihood
of certain tourism and hospitality related events taking place in Chile, year of probable
occurrence and their possible impact on Chilean tourism and hospitality industry were
delineated. Some of the most important trends and developments in the Chilean tourism industry
are listed under four major categories.
TABLE Ia: Changes in Structure of the Tourism and Hospitality Industry
Degree of Structural Change Impact on Tourism

Change in … (1)a (2) (3) (4)b (5) (6)c
Mean SD Change Mean SD Impact
Hotels 4.61 0.52 Significant Increase 7.94 1.89 High
Motels 3.88 0.85 Slight Increase 5.77 2.75 Medium
Resort areas 4.28 0.65 Slight Increase 6.81 2.36 Medium
Vacation Farms 4.27 0.72 Slight Increase 6.42 2.69 Medium
Trekking, hiking and 4.70 0.46 Significant Increase 8.34 1.66 High
mountaineering
Campgrounds, and Trailer Parks 4.22 0.79 Slight Increase 7.09 2.26 Medium
Cottage and Vacation Homes 4.25 0.73 Slight Increase 6.91 2.61 Medium
Fast-Food Outlets 4.03 0.94 Slight Increase 5.75 2.57 Medium
Airlines Traffic 4.67 0.54 Significant Increase 8.30 1.97 High
Inter-city bus lines traffic 4.41 0.61 Slight Increase 7.67 2.29 High
Cruising Services in the rivers 4.36 0.70 Slight Increase 7.70 2.08 High
and channels in the south
Retail sporting goods and 4.11 0.59 Slight Increase 6.89 2.22 Medium
recreational equipment stores
Gift shops 3.66 0.74 Slight Increase 5.81 2.87 Medium
Duty Free shops 3.66 0.65 Slight Increase 5.75 2.78 Medium
Travel agencies 3.78 1.06 Slight Increase 6.83 2.65 Medium
a. Column 1: Changes in values were measured on a 5-point scale where 1 = significant decrease, 2 = slight
decrease, 3 = no change, 4 = slight increase, and 5 = significant increase.
b. Column 4: impact on tourism was measured on a 10-point scale ranging from 0 = no impact at all to 10 =
very high impact.
c. Column 6: 0-4 = low impact, 5-7 = medium impact, and 8-10 high impact
530
TABLE Ib: Changes in Structure of the Tourism and Hospitality Industry (Continued)
Degree of Structural Change Impact on Tourism

Change in … (1)a (2) (3) (4)b (5) (6)c
Mean SD Change Mean SD Impact
Eco-Tourism 4.61 0.58 Significant Increase 7.78 1.80 High
Handicraft Centres 4.11 0.89 Slight Increase 7.95 2.04 High
National Heritage Centres 4.14 0.71 Slight Increase 7.31 2.13 Medium
Theme Parks 4.02 0.63 Slight Increase 6.77 2.25 Medium
Historical Parks 3.83 0.81 Slight Increase 6.66 2.34 Medium
National Parks 4.02 0.88 Slight Increase 7.37 2.57 Medium
Botanical parks 3.88 0.75 Slight Increase 6.61 2.76 Medium
Local entertainment 4.25 0.80 Slight Increase 6.95 2.43 Medium
establishments
Personal services (i.e.: tourist 4.58 0.77 Significant Increase 7.86 2.08 High
guide, sport trainers, etc.)
Cultural and educational 4.17 0.77 Slight Increase 7.17 2.40 Medium
attractions
Train services 3.58 1.04 Slight Increase 6.83 2.50 Medium
Water sport facilities 3.95 0.70 Slight Increase 6.80 2.20 Medium
Museums 3.83 0.68 Slight Increase 6.77 2.18 Medium
Festivals and events 4.28 0.63 Slight Increase 7.14 2.15 Medium
Passenger car traffic 4.44 0.73 Slight Increase 7.30 2.12 Medium
Bus tours 4.38 0.72 Slight Increase 7.73 1.96 High
Government involvement in 4.28 0.84 Slight Increase 8.09 2.19 High
Tourism
Back Packer/Budget Properties 4.30 0.77 Slight Increase 7.31 2.24
Tourist Homes (e.g. Bed and 3.95 0.84 Slight Increase 6.55 2.46
Breakfast accommodation)
d. Column 1: Changes in values were measured on a 5-point scale where 1 = significant decrease, 2 = slight
decrease, 3 = no change, 4 = slight increase, and 5 = significant increase.
e. Column 4: impact on tourism was measured on a 10-point scale ranging from 0 = no impact at all to 10 =
very high impact.
f. Column 6: 0-4 = low impact, 5-7 = medium impact, and 8-10 high impact
TABLE IIa: Events Having Impact on Tourism and Hospitality Industry
Event Likelihooda Yearb Impactc

More than fifty percent of the world’s cash transactions will 74 2012 7.89 High
occur through on-line system, computerized credit, billing
systems and credit/debit cards.
Many universities, colleges and other tertiary training 70 2010 8.25 High
institutions in Chile would integrate tourism and hospitality
degree programs in their curriculum.
Hotel and restaurant managers will require more specialized 67 2011 7.91 High
formal and on the job training.
An international data bank with video of real-time 65 2013 7.98 High
communication is established for tourist information.
a. Likelihood = likelihood of occurrence of event (0 = never, 1%, 2% … 100%)
b. Year = year of probable occurrence (2007, 2008 … 2020)
c. Impact = impact (0 = no impact, 10 = significant impact). Classification of impact is as follows: 0 – 4 = low
impact; 5 – 7 = medium impact; and 8 – 10 = high impact
531
TABLE IIb: Events Having Impact on Tourism and Hospitality Industry (Continued)

Completely new frontiers are open to tourism (wildlife 64 2012 8.33 High
environments, underwater environments, underground
environments, space environments and desert environments).
Demand for part-time, and executive training programs for 64 2011 8.03 High
people who are currently employed in the tourism and
hospitality industry will increase substantially.
A network of reliable international travel routes of most 61 2013 7.91 High
national carriers is established.
Government of Chile will integrate tourism in its overall 61 2011 8.36 High
economic development program.
For these same households, allocation of funds to travel and 60 2013 8.02 High
tourism will become more and more a necessity.
Half of working population in urban centres throughout the 59 2012 7.61 High
world-works primarily improving their quality of life rather
than for survival.
Major technological advances, lower international travel costs 59 2012 7.91 High
makes prices affordable on a middle class budget.
Fully automated data retrieval systems are developed on a 59 2012 7.08 Medium
global basis to provide travel information in real-time.
Border formalities (e.g. requirements, visa, customs) of most 58 2012 7.72 High
countries are relaxed.
Much business travel is replaced by video-conferencing 56 2012 6.52 Medium
technologies and other forms of telecommunication (e.g.
satellites, on-line communication etc.).
Activity based tourism (i.e. engaging in rural oriented 56 2011 7.78 High
activities such as plowing, shearing, milking a cow etc.) will
increase in importance substantially.
Public and private sectors work together trough educational 55 2011 7.75 High
and cultural projects to reduce hostility towards international
tourists.
The dominant proportion of food served in non-fast food 55 2012 7.36 Medium
restaurants will be prepared in line with the taste buds of
visiting tourists.
Most countries establish economic incentives to private 55 2013 8.05 High
industry for the protection of wildlife, scenic beauty and
natural environments.
Agricultural output such as meat, dairy products and produce 54 2011 7.64 High
created by local communities will be used by hotels,
restaurants and other tourist establishments in urban centers.
Liberalization of international airline agreements and 53 2014 7.86 High
strategic alliances makes travel movements between East and
West as well as North and South almost as easy as within the
industrialized countries.
a. Likelihood = likelihood of occurrence of event (0 = never, 1%, 2% … 100%)
b. Year = year of probable occurrence (2007, 2008 … 2020)
c. Impact = impact (0 = no impact, 10 = significant impact). Classification of impact is as follows: 0 – 4 = low
532
TABLE IIc: Events Having Impact on Tourism and Hospitality Industry (Continued)

Artificial tourism environments (i.e. manmade lakes and 53 2014 7.47 Medium
dams, artificial skiing platforms) are commonly used for
outdoor recreation facilities and these areas will provide
additional tourism opportunities for many countries around
the world.
Land issues will be included as an important part of Chile 50 2012 6.84 Medium
tourism development plans and programs.
Automation replaces most labor intensive administrative and 49 2015 6.48 Medium
industrial jobs in the urban areas throughout the world.
Inexpensive long haul (over 100 miles or 167 km) mass 48 2014 7,25 Medium
transport by water is feasible.
Most people travel on other countries as commonly as in their 48 2013 7.25 Medium
own country or region today.
Over 100 million people participate in time-sharing resort 47 2013 6.73 Medium
(condominiums and luxury apartments/villas) throughout the
world.
An international currency is used for monetary exchange 47 2014 7.56 High
among nations of the world.
Limited access to natural resources is achieved by some form 46 2012 6.91 Medium
of rationing.
Indigenous resource owners such as landowners, craftsmen 46 2011 6.48 Medium
and rock artists will have more say in Chile tourism.
Air taxis to locations within 200 miles are integrated with 44 2014 7.03 Medium
major metropolitan airports in developed countries.
Over fifty percent of Chilean households will have a specific 42 2013 8.11 High
family budget for travel and leisure.
A majority of hotels will be self-service rather than the 39 2014 6.38 Medium
present conventional style format.
The world energy problem will have been solved. 38 2017 7.36 Medium
The dominant proportion of restaurant food sales revenues 37 2012 5.30 Medium
will come from fast food outlets.
The 40-hour workweek and annual month-long vacations 35 2014 7.45 Medium
characterize the normal work patterns in developing
countries.
The majority of executives personnel employed in the tourism 29 2013 6.05 Medium
industry in Chile will be expatriates.
d. Likelihood = likelihood of occurrence of event (0 = never, 1%, 2% … 100%)
e. Year = year of probable occurrence (2007, 2008 … 2020)
f. Impact = impact (0 = no impact, 10 = significant impact). Classification of impact is as follows: 0 – 4 = low
CONCLUSION
The findings of this study contribute to our understanding of the future occurrences in
tourism industry environment of Chile. It also assists us in the development of effective tourism
533
marketing plans and strategies for Chilean tourism industry. The results of the study offer both
theoretical/conceptual and managerial implications.
REFERENCES
Archer, B. "Forecasting Demand- Quantitative and Intuitive Techniques." International Journal

of Tourism Management, 1, (1), 1980, 5-12.
Calantone, R.J. “A Comparative Review of the Tourism Forecasting Literature.” Journal of
Travel Research, 26, (2), 1987, 28-39.
Kaynak, E., and Macaulay, J.A. “The Delphi Technique in the Measurement of Tourism Market
Potential: The Case of Nova Scotia.” Tourism Management, 5, (2), 1984, 87-101.
Kaynak, E., Bloom, J., and Leibold, M. “Using the Delphi Technique to Predict Future Tourism
Potential.” Marketing Intelligence and Planning, 12, (7), 1994, 18-29.
Kaynak, E., and Marandu, E. "Tourism Market Potential Analysis in Botswana: A Delphi
Study.” Journal of Travel Research, 45, (2), 2006, 227-237.
Ono, R. “Assessing the Validity of the Delphi Technique.” Futures, 26, (3), 1994, 289-304.
Rowe, G., and Wright, G. “The Delphi Technique as a Forecasting Tool: Issues and Analysis.”
International Journal of Forecasting, 15, 1999, 353-375.
Yong, Y.W., and Leng, T.L. “A Delphi Forecast for the Singapore Tourism Industry: Future
Scenario and Marketing Implications.” International Marketing Review, 6, (3), 1988, 35-
46.
534
EXPLORING CONSUMER MOTIVATIONS FOR RE-WATCHING MOVIES
Dwane Hal Dean, Frostburg State University

dhdean@frostburg.edu
ABSTRACT
Motivations for re-watching a movie one has seen before were investigated. Subjects (n =
102) distributed 100 points among a list of five possible reasons for re-watching a movie and
they were also asked to propose any other motivations that came to mind. Analysis of both listed
and open-ended responses revealed three meta-motivations that appear to subsume a larger group
of motivations for re-watching a movie. These are: mood regulation, to share the movie with
others, and to better understand the movie. Group movie watching is identified as an example of
the under-researched topic of communal consumption, and certain social and psychological
implications of communal movie viewing are discussed.
INTRODUCTION
Consumer spending to purchase movies is big business. In 2007, sales of movie DVDs
totaled $16 billion (Desjardins, 2008). The large number reflects the fact that DVD movie
playback devices have penetrated more than two-thirds of U.S. households and the average DVD
collection is more than 43 discs (McCourt, 2004).
The existence of an average U.S. household movie DVD collection of 43 discs suggests
that the entertainment may be re-consumed (viewed on multiple occasions). However, the
motivations for watching a movie one has seen before have received very little attention in the
literature. The goal of the present study is insight and understanding into why consumers re-
watch movies.
BACKGROUND
Since Thomas Edison shot his first crude films in 1889, motion pictures have evolved
into a major art form and entertainment product. Part of the appeal of movies is that they are a
wonderful medium for telling stories. Storytelling is as old as mankind, and indeed, humanity
appears to have a fundamental need to hear stories – to help us make sense of the world as well
as to be entertained. One of the more successful movie studios, Pixar Animation (the makers of
Finding Nemo, Toy Story, and The Incredibles), attributes its good fortune to a focus on
storytelling and not letting animation technology get in the way of that goal (Orwall & Tam,
2003).
One of the quintessential characteristics of movies is that they are very effective in
eliciting emotions (Riva, et al., 2007). Movies facilitate cathartic release of emotions because
they allow viewers to confront horror, suffering, and the full range of possible emotions, without
actually being contaminated by the same (Shapiro & Rucker, 2004). Not surprisingly, a seminal
paper in the marketing literature conceptualizing hedonic consumption uses movies as an
exemplar product for what the authors are seeking to describe (Hirschman & Holbrook, 1982).
According to the authors, hedonic consumption is characterized by: a) emotional arousal, b)
subjective meaning of the product experience to the consumer, and c) imaginative construction
(for example, projecting oneself into the role played by an actor in the movie).
535
The body of marketing literature related to movies is divided among several, mostly
strategic topics including: word of mouth for movies, product placement, and an examination of
the factors of movie genre, celebrity star power, and critics’ reviews on market performance of
the movie. These studies are all worthy contributions, but they do not address the phenomenon of
re-consumption of movies. One of the few investigations to study the way movies are consumed
was that of Krugman and Gopal (1991). These authors contrasted VCR movie rental viewing
with traditional television viewing, finding that subjects were more attentive to movie rental
viewings than television programs (eyes on screen for about 82% of the time versus about 61%).
However, movie watchers still found time to interact with their children, eat and drink, perform
household chores or hobbies, and read.
METHODS
A convenience sample of adults living in the Albuquerque, New Mexico, metro area was
obtained by approaching potential respondents in malls and other public places and asking them
for a few minutes of their time to fill out a questionnaire. A quota sampling method was used to
ensure an approximately equal number of men and women as well as equal representation among
three pre-determined age groups: 18 through 22, 23 through 30, and 31 through 61.
Other than demographic information and a brief screening question (to ensure that
respondents often found themselves re-watching movies they had seen before), the questionnaire
had essentially two parts. The first was a list of five reasons for why someone might watch a
movie they had seen before. Subjects were asked to distribute 100 points among the five reasons,
reflecting their motivations for re-watching a movie, so that the total added to 100 (a constant-
sum scale). The five stated reasons were:
1. You have nothing else better to watch.

2. You enjoy being able to predict what will happen next in the movie.
3. You want to re-capture the feeling you experienced when you first viewed the
movie.
4. You remember you liked the movie, but not why (and you want to find out).
5. To fill-in parts (scenes) you missed on earlier occasions.
The second section of the questionnaire asked subjects if they could think of a reason
(other than the five mentioned above) for why they would re-watch a movie. A blank space was
provided for a response.
RESULTS
A total of 102 complete, useable questionnaires were received and this constituted the
final sample. The sample was equally divided between men and women at 51 each, and there
were also an equal number of subjects within each of three age groups. For the total sample, the
mean age was 29.88 years with a standard deviation of 11.13 years.
Multiple ANOVA was performed using gender and age group as categorical variables
and weights reported for the five motivations as dependent variables. Main effects for both
gender (F = 0.66, df = 4/93, p = .623) and age group (F = 1.09, df = 8/186, p = .374) were non-
significant, as was the gender by age group interaction (F = 1.61, df = 8/186, p = .125).
536
Explained variance (R2) for the five dependent variables (the motivation weights) ranged from
.02 to .08. The results do not suggest an influence for gender or age on motivation to re-consume
a movie.
TABLE I: Motivations to Re-Consume a Movie (n = 102)
Motivation Mean Standard Deviation
Nothing else to watch 19.82 18.50
Enjoy predicting what will happen 6.42 7.48
Re-capture feeling of first viewing 40.92 23.33
Confirm why liked in the first place 12.88 11.40
Fill-in scenes missed in earlier viewing 19.96 14.60
Means and standard deviations for the five motivations are shown in Table 1. The “re-
capture the feeling you experienced when you first viewed the movie” motivation has, by far, the
largest mean weight of the five items. This suggests a link between the emotions elicited by the
movie and the decision to re-watch a movie, although other motivations may also be present. The
second part of the questionnaire prompted respondents to write-in a reason, other than the five
mentioned, for re-watching a movie. Thematic analysis of responses revealed several additional
motivations.
Watch With Others

Re-watching the movie in order to “share” it with others was spontaneously mentioned
by 20 of the 102 subjects. This motivation may be related to the desire to initiate or strengthen a
relationship with the other person. Given that movies are so effective in eliciting emotions,
communal viewers are likely to share these emotions, and this may prompt an exchange of
attitudes and values, both during and after the viewing.
Understand the Movie Better

A common theme that united several comments was that a movie might be re-watched in
order to better understand the film. One subject cited The Di Vinci Code as a film that contained
a number of plot twists that made it difficult to fully comprehend on the first viewing. Other
subjects mentioned a desire to see DVD extras (deleted scenes and commentary) for a movie
they liked on the first viewing. That is, the movie may be re-watched (in regular or enhanced
form) simply because it is pleasurable to find out more about a liked movie.
Fascination with Actors/Actresses

Re-watching a movie because it features your favorite actor or actress was spontaneously
mentioned by 6 of 102 subjects. Many people seem to have a strong involvement with certain
celebrities. Indeed, celebrity worship has been linked to a fundamental human need for heroes,
537
role models, and identification (McCutcheon, Lange, & Houran, 2002) and actors and actresses
appear to fill this need.
Mood Regulation
Re-watching a movie to induce a desired affective state was only spontaneously
mentioned by 2 subjects. However, these respondents may have tapped into a fundamental, latent
drive for movie re-consumption. The fact that so few subjects were able to articulate this
particular motivation suggests that it may exist at only a pre-conscious level.
Gamesmanship
This motivation was spontaneously mentioned by 2 of 102 respondents. As described by
these subjects, the reason for re-watching is to find unintended entertainment value in the movie.
As an example, there are occasional mistakes in “continuity” during filming of the movie. That
is, scenes are often filmed discontinuously. In some cases, a time lapse occurs, and the angle of
the sun and the time indicated on clocks that appear in the scene may change. Production crews
employ a continuity person on the set whose job is to ensure that discontinuously shot scenes
appear cohesive in the final version of the film, but mistakes can still occur.
Electronic Wallpaper
The idea behind this motivation for re-watching a movie is that people just want to
socialize and have a movie on in the background to liven up the atmosphere. One subject reports
that at weekly poker games at his house, there is always a movie on to give people something to
glance at between hands. This style of viewing allows poker participants to see their favorite
scenes in the movie without having to focus on the movie for two hours. Only 2 of 102 subjects
mentioned this motivation.
Attitude Check
This motivation for re-watching a movie was only mentioned by one subject. The idea is
that a person may have seen all or part of a movie, hold a negative opinion of the film, but then
receive information that other people praise the movie. The conflict in opinions prompts an
attitude check, resulting in a re-viewing of the film to see if the initial attitude was correctly
formed.
Meta-Motivations
Examination of the motivations listed in the structured portion of the questionnaire as
well as those identified through thematic analysis of open-ended responses suggested three
motivational groupings (meta-motivations) that appear to subsume the larger group of individual
motivations.
The first of these meta-motivations is mood regulation. Indeed the high rating for the “re-
capture the feeling” motivation is likely an outward manifestation of the latent motivation of
mood regulation. The second meta-motivation is understanding, which is expressed as curiosity –
a desire for more information about an already liked movie. This phenomenon appears to explain
the success of “enhanced” movies (with DVD extras like deleted scenes and interviews with the
cast and director). The third meta-motivation is the desire to share (watch) the movie with others.
The shared experience of the movie is likely to prompt an exchange of opinions and information
that helps to build relationships with fellow viewers. Additionally, individual enjoyment of the
538
movie may be enhanced if you find that your opinions of the film are congruent with those of
others. This is another aspect of communal movie viewing, a potential reinforcement of your
own attitudes and validation of your opinions.
DISCUSSION
The present investigation has identified three, broad, meta-motivations for re-consuming
a movie one has seen before. The first of these is mood regulation; indeed, this appears to be the
predominant motivation for re-consuming a movie. The second meta-motivation for re-watching
a movie is to share the experience with another who may not have seen the movie. The shared
experience of the movie is likely to prompt an exchange of opinions and values both during and
after the viewing. Such exchange helps to build relationships (Taylor, 1968) and a deepening of
the relationship may be the desired outcome of the communal viewing of the movie. Communal
movie viewing may be a good vehicle for examining the general phenomenon of communal
consumption, an under-researched topic in marketing (Cova, 1997).
The third meta-motivation for movie re-consumption is to better understand the movie.
The idea here is that missed scenes or convoluted plot twists may have left the viewer in a state
of uncertainty. Or, even if viewers have complete information, they may wish to watch an
“enhanced” version of the movie with deleted scenes or notes on how certain scenes were filmed.
The basis for this motivation is believed to be curiosity, the desire to know more about some
object of interest (Litman, 2005). However, another construct, need for cognitive closure
(NDCC), recently introduced into the consumer literature, may also play a role. NFCC is
conceptualized as an individual’s desire for a definitive answer to a question as opposed to
ambiguity (Houghton and Grewal, 2000). As applied to the present context, NFCC might be a
motivation to re-watch a movie in order to resolve uncertainties that persisted after the first
viewing. As an example, the author first watched the movie Cast Away on major-network cable.
Unfortunately, a task interrupted the viewing of the latter part of the movie, and it was unclear
how (or if) the character played by Tom Hanks was able to leave the island and whether he was
able to re-unite with his fiancé. This prompted the author to question his colleagues the next day,
inquiring about how the movie ended. Eventually the movie was re-broadcast, and the author
arranged time to view the movie in its entirety. Although NFCC has not been specifically applied
to a movie context, it may play a role in re-consumption under certain circumstances. Further,
the way cable channels specializing in movies schedule their fare (often back-to-back showings
of the same movie on the same day, or, showing the same movie in a slightly different time slot
the next day) suggests that they are aware that movies are often only partially consumed on the
first viewing (interrupted by a task) and that an immediate second airing may allow the viewer to
“complete” the experience of the full movie and achieve closure.
Limitations and Future Directions

The limitations of this study are similar to those for exploratory research in general: 1)
use of small samples that may not fully represent the population of interest, 2) potential for over-
reliance on the responses of certain individual participants who just happen to express
themselves well, and 3) potential for misinterpretation of open-ended responses by the
investigator. Additionally, probing and follow-up to the open-ended response in the present study
was rather limited. A further limitation of this research is a general assumption that situational
factors, rather than individual difference factors, would primarily influence movie re-
539
consumption. For all of these reasons, the ability to generalize the findings to a broader
population is limited.
Future research may wish to explore individual difference factors for their impact on
movie re-consumption. For example, the extravert-introvert attribute of personality might
influence movie re-consumption. Having less need to be around and interact with other people,
the introvert might allocate free time to movie viewing while the extravert would rather spend
the time socializing. Additionally, communal movie watching as an exemplar for communal
consumption may be worthy of further investigation. Communal movie viewing may have social
and psychological overtones that are more complex than might initially be believed.
REFERENCES
Cova, B. “Community and Consumption.” European Journal of Marketing, 31, (3/4), 1997, 297-
316.
Desjardins, D. “Industry News.” Retailing Today, 47, (2), 2008, 32.
Hirschman, E.C., and Holbrook, M.B. “Hedonic Consumption: Emerging Concepts, Methods
and Propositions.” Journal of Marketing, 46, (3), 1982, 92-101.
Houghton, D.C., and Grewal, R. “Please, Let’s Get an Answer – Any Answer: Need for
Consumer Cognitive Closure.” Psychology & Marketing, 17, (11), 2000, 911-934.
Krugman, D.M., and Gopal, Y. “In-Home Observations of Television and VCR Movie Rental
Viewing.” Advances in Consumer Research, 18, (1), 1991, 143-149.
Litman, J.A. “Curiosity and the Pleasures of Learning: Wanting and Liking New Information.”
Cognition and Emotion, 19, (6), 2005, 793-814.
McCourt, J. “Consumers Continue to Buy DVD, With Men Leading the Way.” Video Store
Magazine, 26, (24), 2004, 28.
McCutcheon, L.E., Lange, R., and Houran, J. “Conceptualization and Measurement of Celebrity
Worship.” British Journal of Psychology, 93, (1), 2002, 67-87.
Orwall, G., and Tam, P. “Nemo: Box-Office Whale.” Wall Street Journal, 5 May, 2003, B1.
Riva, G., Mantovani, F., Capideville, C.S., Preziosa, A., Morganti, F., Villani, D., Gaggioli, A.,
Botella, C., and Alcaniz, M. “Affective Interactions Using Virtual Reality: The Link
Between Presence and Emotions.” CyberPsychology & Behavior, 10, (1), 2007, 45-56.
Shapiro, J., and Rucker, L. “The Don Quixote Effect: Why Going to the Movies Can Help
Develop Empathy and Altruism in Medical Students and Residents.” Families, Systems,
& Health, 22, (4), 2004, 445-452.
Taylor, D.A. “The Development of Interpersonal Relationships: Social Penetration Processes.”
The Journal of Social Psychology, 75, (1), 1968, 79-90.
540
BRAND PERSONALITY:
A STUDY OF TURKISH MOBILE PHONE MARKET
Ahmet Sekerkaya, Istanbul University

ag@tnn.net
Talha Harcar, Pennsylvania State University at Beaver

tdh13@psu.edu
ABSTRACT
Brand personality refers to human personality traits linked with a brand. It is a set of
characteristics that describe a brand. The present study explores different dimensions of brand
personality among mobile phone brands in Turkey. The Turkish cell phone market is one of the
largest in the region known the country’s large population, with recent penetration rates
representing room for further growth in the maturing market. Three GSM operators, Turkcell,
Telsim, and Avea dominate the market. This research can be the first step to explore if different
brands may have different brand personalities in different cultures. The results show that
different mobile phone brands personality dimensions’ do not differ from each other.
INTRODUCTION
Aaker and Fournier (1995) claimed that a brand can function as a character, partner and
person. Seen from this angle brand personality refers to human personality traits associated with
a brand (Aaker, 1997). It is a set of characteristics that describe a brand. In this context brand
personality becomes one of the major components of brand image in addition to the product's
physical attributes (e.g., quality of food and drink) and the product's benefits (e.g., enhancing
one's health and well-being). Since brand personality is likely to be more difficult to imitate than
tangible product attributes, marketing practitioners commonly use it to achieve more sustainable
advantages (Ang & Lim, 2006), such as, creating product differentiation and positioning. In
contrast it may not be the intangible personality differentiates the brands, but the tangible
product makes the difference. According to Prior (2008) brand personality is a fraud which has
been operating in the world of marketing during the past 20 years and even many brands promote
their specific identities, this can only help if the products and services they offer live up to their
exterior displays.
After a series of researches performed with American consumers, Aaker (1997) proposes
five dimensions of brand personality: sincerity (down-to-earth, honest, wholesome and cheerful),
excitement (daring, spirited, imaginative and up-to-date), competence (reliable, intelligent and
successful), sophistication (upper class and charming) and ruggedness (outdoorsy and tough).
These five dimensions came out from different sets of brands and product kinds; and, therefore,
signifying the scale's generalizability.
There two factors influence an individual's relationship with a brand. First, there is the
relationship between the brand-as-person and the customer, which is equivalent to the
relationship between two people. Second, there is the brand personality--that is, the type of
person the brand represents. The brand personality provides depth, feelings and liking to the
relationship. Not surprisingly, a brand-customer relationship can also be based on a functional
541
benefit, just as two people can have a strictly business relationship (Aaker, 1996). Early research
in brand personality examined different brands in several product categories and demonstrated
that consumers perceived brands in terms of five orthogonal personality dimensions: sincerity
(e.g., Hallmark), competence (e.g., The Wall Street Journal), excitement (e.g., MTV),
sophistication (e.g., Guess), and ruggedness (e.g., Malboro) (Sophonsiri & Polyorat, 2009).
Although there are some criticisms (Azoulay & Kapferer, 2003), most of the brand personality
studies conducted after 1997 are based on Aaker's (1997) framework. Brand personality has
drawn interests from marketing scholars for many years (Rojas-Mendez, Erenchun-Podlech, &
Silva-Olave, 2004). Because of consumer preferences are a crucial concept in marketing as they
emphasize customer choice among alternatives; marketing managers are concerned in promoting
a brand personality which may be a focus for consumers' mind such that they may shape a liking
for a brand just because of perceived brand personality.
Although a brand may simultaneously possess multiple dimensions of brand personality,
the research propensity, directed on brands primarily characterized by only one dimension of
brand personality (Monga & Lau-Gesk, 2007). This research examines eighteen different brand
personality dimensions for mobile phones brands is one step headed for multi dimension brand
personality. Although an increasing interest in brand personality research, little work has been
conducted to examine the impact of brand personality dimensions in developing countries
(Polyorat, Khantuwan, Jaratmetakul, & Boonnon, 2008). The shortage of research on this topic
in a developing countries context exists regardless of the extensive debate over globalization
versus localization of marketing and advertising practice (Levitt, 1983). An increase of the
global marketing strategy in most cases (Onkvisit & Shaw, 1999) and the cross-cultural use of
global brands in particular (Alden, Steenkamp, & Batra, 1999) make this lack in the literature
even more important. As a result, future work to develop cross-cultural studies of consumer
perceived brand personalities is obviously needed. The present study, which explores different
dimensions of brand personality among mobile phone brands in Turkey, can be the first step to
explore if different brands may have different brand personalities in different cultures.
Furthermore, from a managerial perspective, the current research also should extend
brand personality research to fast-growing industries such as mobile telephone industry. The
purpose of this paper is report out the research that focused on the consumer inclinations of a
young population specifically as it relates to the cell phone industry. The authors will discuss
what factors affect the young person’s desire to consume the cell phone product and how they
influence each other and the market. Very few studies have been conducted which focus on the
consumption of this product. It is a unique study because it takes the study beyond the U.S. and
studies the consumer behaviors of Turkish youth who have become extremely interested in the
consumption of cell phones.
TURKISH POPULATION CHARACTERISTICS AND

MOBILE PHONE MARKET IN TURKEY
Turkey with a population of 71.3 million young people (approximately 50% of the
population is below 25 years of age within the total population) holds a great potential for
international investors. It has highly skilled, competitive labor, huge domestic market, unique
geographical location, dynamic private sector and regional connections. As a result of the highest
birth rate in Western Europe, Turkey will have gone beyond Germany as the most populous
542
country in the area. The population will continue to grow rapidly, increasing to 82.6 million by
2015.
This growing market of youthful consumers is perfect for consumer business as young
people spend more, particularly on goods such as mobile phones and the Internet. There are 6.3
million people in the age group 15-19 in Turkey (Dinçer & Kola3in, 2008).
Current rate of economic growth drives Turkish customers to implement technology and
integrate it into culture at an exceptional rate. If there is an evolution of technology in Turkish
society it has rapid pattern changes, Mobile phone market is a good example of this
phenomenon; Mobile phone usage in Turkey is booming, according to the latest consumer
research from Euromonitor International, as its growing population strongly impacts on
consumer markets. Turkish citizens have adopted cell phones as a primary method of
communication in avery short period of time. With the introduction of mobile phone systems,
particularly GSM-based systems in the last ten years, the Turkish people have reduced interest in
extending the landline telephone infrastructure and are now fully adopting mobile phones.
Turkey's mobile market offers strong growth potential, albeit within a competitive
environment. About 66 per cent of Turkey's population has a mobile, compared with the 100 per
cent coverage in many western European countries (Parker, 2006). Turkey has witnessed a cell
phone boom recent years. The number of people using mobile phones in Turkey has grown by
over 208% over the past 6 years according to Euromonitor International. March 1994 in Turkey
GSM operators, Turkcell and then May 1994 in Telsim has begun to operate. Same year 1994
GSM operators were 80.000 subscribers. In 2000 there were a mere 16.1 million mobile phone
users, while in 2006 this figure had increased dramatically to 49.7 million users. The significant
rise in mobile phone usage can be attributed to the fact that Turkey has the youngest population
in Western Europe, with a median age of 27.1 years in 2006. Turkey currently has the 6th largest
young mobile subscriber base in the world, with more than 11 million subscribers under the age
of 25, providing a very lucrative market for mobile phone companies (Hofmann, 2007). Based
on the Chairman of the Competition Board’s report (2006) in Turkish mobile phone market there
are more than 10 brands with many different models. As of May 2006 the distribution of the
estimated market share can be followed in Figure 1.
FIGURE I: Mobile Phone Market Share in Turkey
543
RESEARCH FINDINGS
Sample Composition
The data set consists of 241 female (48.5%) and 256 male (51.5%). The demographic
profile of the respondents is presented in Table 1.
TABLE I: Socio-Demographic Characteristics of Respondents
Number of Number of
participants Percentage participants Percentage
Demographics (N) (%) Demographics (N) (%)
Gender Occupation
Female 241 48.5 Student 119 23.9
Male 256 51.5 Public officer 110 22.1
Age Group Private sector employee 77 15.5
16-29 247 49.7 Homemaker 43 8.7
30-39 120 24.1 Tradesman 38 7.6
40-49 73 14.7 Self-employed 36 7.2
50-59 43 8.7 Retired 34 6.8
60 and over 12 2.4 Laborer 21 4.2
No answer 2 .4 Unemployed 8 1.6
Education Manufacturer 4 .8
Primary school 53 10.7 Merchant 4 .8
Middle school 45 9.1 Other 3 .6
High school 377 75.9 Monthly Family Income*
University 19 3.8 500 YTL or less 198 39.8
No answer 3 .6 501-999 YTL 179 36.0
Marital Status 1000-1999 YTL 50 10.1
Single 256 51.5 2000-2499 YTL 20 4.0
Married 221 44.5 2500 and over YTL 13 2.7
Widowed 13 2.6 No Answer 25 5.0
No answer 7 1.4
*(1US dollars = 1.3 YTL)
Majority of the respondents were between the age 16-29 (49.7%) and 30-39 (39.4%) with
75.9% had high school degree and 19.8 percent had lower than high school education. The
statistics on monthly income indicated 39.8% of the respondents earned 500YTL or less and
36.0% received between 501-1999. The figures also showed that majority of the respondents
(23.9%) were students fallowed by 22.1% of respondents who were public officer. With regard
to other occupation groups; %15.5 were private sector employees, %8.7 home makers, %7.6
trades man, 7.2 self employed, 6.8 retired, 4.2 laborer, 1.6 unemployed, 0.08 manufacturer, 0.08
merchants. About 51.5% of respondents were single, married respondents accounted 44.5 % of
the sample. All other demographic distribution can be found on Table 1.
As well as demographic characteristics of respondents, information related to mobile
phone models, account characteristics, frequency of visit to the bank branch, the period of
maintaining the account, and time spent on the Internet were also investigated. There were
statistically significant differences between online bank users and non-users on account type
used frequency of visit to the bank, Internet usage (see Figure 2). A mean score for the brand
personality perception of each dimension for each brand were calculated. A summary out of this
analysis can be seen in Table 2.
544
. . . .
545
545
545
545
MANAGERIAL IMPLICATIONS
This empirical study offers important policy suggestions to current mobile phone
marketing managers in the study area. The most important managerial implications are related to
brand personalities is that there is no significant brand personality dimensions exist among the
mobile phone customers. The most important question for the managers remains how mobile
phone companies can create brand personalities in order to differentiate their products. Another
matter concerned for the international phone companies is the possibility of creating the same
brand personalities in each different country.
REFERENCES
Aaker A.D. Building Strong Brands. New York: The Free Press, 1996.
Aaker, J.L., and Fournier, S. “A Brand as a Character, a Partner and a Person: Three Perspectives
on the Question of Brand.” Advances in Consumer Research, 22, (1), 1995, 391.
Aaker, J.L. “Dimensions of brand personality”, Journal of Marketing Research , Vol. 34 No. 3,
1997, p. 347.
Alden, D.L., Steenkamp, J.E.M., and Batra, R. “Brand Positioning Through Advertising in Asia,
North American, and Europe: The Role of Global Consumer Culture.” Journal of
Marketing, 63, (1), 1999, 75-87.
Ang, S.H., and Lim, E.A.C. “The Influence of Metaphors and Product Type on Brand
Personality Perceptions and Attitudes.” Journal of Advertising, 35, (2), 2006, 39-53.
Azoulay, A., and Kapferer, J.N. “Do Brand Personality Scales Really Measure Brand
Personality?” Brand Management, 11, (2), 2003, 143-155.
Dinçer, M.A., and Kola3in, G.U. Turkey is Losing its Young Generation. Betam, Bahcehir
Universitesi Ekonomik ve Toplumsal Arastirmalar Merkezi, Research Brief 2, 2008, May
16.
Hofmann, O. “Young Population Drives Turkeys Mobile Market.” Retrieved November 2008 at:
http://www.euromonitor.com/Young_population_drives_Turkeys_mobile_market, 2007.
Levitt, T. “The Globalization of Markets.” Harvard Business Review, 61, (3), 1983, 92-102.
Monga, A.B., and Lau-Gesk, L. “Blending Co-brand Personalities: An Examination of the
Complex Self.” Journal of Marketing Research, 44, (3), 2007, 389-400.
Onkvisit, S., and Shaw, J.J. “Standardized International Advertising: Some Research Issues and
Implications.” Journal of Advertising Research, 39, (6), 1999, 19-24.
Parker, A. “Gloves Come Off in Battle for Turkey's Mobile Market.” Financial Times,
November 7. Retrieved September 2008 at: http://globaltechforum.eiu.com/index.asp
?layout=rich_story&channeled=4&categoryid=31&title=Gloves+come+off+in+battle+fo
r+ Turkey's+ mobile+market&doc_id=9640, 2006.
Polyorat, K., Khantuwan, W., Jaratmetakul, P., and Boonnon, N. 2008. “Dimensions of Brand
Personality in Thailand: Some Empirical Evidence.” In C.R. Taylor, B. Schmitt, U.
Wagner, and J. Jia, (eds.), Proceedings of the Global Marketing Conference, Korean
Academy of Marketing Science, 2008, 1-13.
Prior, J. “Brand Personality: Is Brand Personality a Fraud?” Marketing Week, London: May 1,
2008, 27.
Rojas-Mendez, J.I., Erenchun-Podlech, I., and Silva-Olave, E. “The Ford Brand Personality in
Chile.” Corporate Reputation Review, 7, (3), 2004, 232-251.
546
Sophonsiri, S., and Polyorat, K. “The Impact of Brand Personality Dimensions on Brand
Association and Brand Attractiveness: The Case Study of KFC in Thailand.” Journal of
Global Business and Technology, 5, (2), 2009, 51-62.
547
CHAPTER 23
ORGANIZATIONAL BEHAVIOR AND

ORGANIZATIONAL THEORY
548
JOB AFFIRMATION: “MY JOB MADE ME THE PERSON I AM TODAY!”
Michael K. Coolsen, Shippensburg University

mkcool@ship.edu
Vicki Fairbanks Taylor, Shippensburg University

vltaylor@ship.edu
David Reese, Shippensburg University

dr2207@ship.edu
ABSTRACT
Recent research has demonstrated the effect of the fit between a job and an employee’s
self-concept on the perception of meaningful work, objective job performance, and intent to
leave. In an attempt to build on such work, our conception of “job affirmation” depicts a job as
sculptor of the employee’s ideal self, similar to how a relationship partner can facilitate
achievement of one’s aspirations and goals. We performed an experiment to look at the role of a
job in affirming one’s ideal self. Results supported our hypotheses that job affirmation of one’s
ideal self uniquely contributes to increased experiences of positive emotions, positive self-
concept traits, and positive evaluations of the job itself. Alternatively, we found that job
affirmation effects were less pronounced for participants’ evaluations of the respective company
and boss. Implications for employers are discussed.
INTRODUCTION
We define job affirmation as the process in which a job brings out important aspects of an
individual’s ideal self. Our conception of job affirmation builds upon recent research
demonstrating the effect of self-concept-job fit (SC-J fit) on job satisfaction, affective
commitment, and intention to quit (Scroggins, 2008; Scroggins & Benson, 2007; Shamir, 1991).
We argue that jobs which affirm the employee’s ideal self (i.e., job affirmation) powerfully
influence worker attitudes and affect. That is, jobs that bring out an employee’s ideal self have
significantly positive influences in that employee’s life and elicit significantly favorable job-
related evaluations (e.g., positive recommendations of the job itself, the respective company, and
the respective boss). Our current work here was designed to apply affirmation effects found in
other contexts (e.g., romantic relationships, marketing) to the domain of organizational behavior
in the workplace—such application serves as boundary spanning research in its attempt to clarify
the SC-J fit literature.
BACKGROUND
Affirmation Processes in the Other Contexts: Romantic Relationships and

Consumer Behavior
Our current research program regarding job affirmation is rooted in the close
relationships research domain. Drigotas, Rusbult, Wieselquist, and Whitton (1999) developed a
model of partner affirmation in ongoing close relationships. These authors proposed that the
process of behavioral confirmation is likely to be quite powerful in the context of ongoing close
549
relationships, in that close partners exert strong and frequent impact on one another across
diverse behavioral domains. Accordingly, over time in close relationships, each person is likely
to exert considerable impact on the other’s “self”—e.g., on the other’s traits, values, and
behavioral tendencies. To the extent that the confirmation process aligns with each person’s ideal
self, each partner is likely to enjoy movement toward his or her ideal self, and the relationship
will flourish. Affirmation describes the extent to which the partner’s perception of the self and
his/her behavior aligns with the individual’s ideal self. Affirmation has been shown to yield
enhanced personal well-being and couple well-being.
Admittedly, the process of affirmation seems more intuitive in the context of a romantic
relationship than in the context of business. However, substantial research has demonstrated
insightful application of close relationship theories to consumer behavior (e.g., Aaker, Fournier,
& Brasel, 2004; Aggarwal, 2004; Coolsen, 2005; Coulter, Price, & Feick, 2003). Coolsen and
Pitek (2007) experimentally pitted what they called “product affirmation” effects on a
consumer’s emotions, self-concept traits, and product evaluations against “product verification”
effects (products aligned with the consumer’s actual self). Results of this experiment yielded
strong support for product affirmation effects on a consumer’s emotions, self-concept traits, and
product evaluations and decidedly weaker and inconsistent product verification effects. Coolsen
and Kumashiro (2009) took this work one step further, replicating the superior product
affirmation effects vs. product-verification effects and adding support for superior product
affirmation effects vs. “product enhancement” effects (products aligned with self-concept aspects
that others tend to favor). Therefore, give the robust finding for affirmation effects in the domain
of consumer behavior, we set out to experimentally investigate affirmation effects in context of
employees in the workplace.
RATIONALE FOR JOB AFFIRMATION EFFECTS
Affirmation Processes in the Context of the Workplace

What may initially seem like a conceptual “stretch,” we feel affirmation effects fit
naturally in the workplace among employees. The phrase, “you’re married to your job,” is
particularly appropriate in this context. Perhaps one becomes devoted to one’s job because the
job itself provides affirmation of one’s ideal self. Such an application of affirmation is consistent
with a type of person-job fit referred to as self-concept/job (SC-J) fit (Scroggins, 2008).
According to Scroggins (2008), individuals experience SC-J fit when performing job tasks that
produce feelings consistent with the individuals’ perceptions of either the “actual self” (who they
are) or the “ideal self” (who they desire to be). May, Gilson, and Harter (2004) explored a similar
concept and found that job engagement was positively associated with psychological
meaningfulness, safety, and availability.
The Contribution of Job Affirmation Effects to Related Organizational Literature

The experimental study presented here in this paper served to generalize affirmation
effects to a specific organizational setting—employees in the workplace. Again, we
conceptualize a relationship between employees and their jobs, and thus, we propose that job
affirmation could exist between an employee and her or his job. We feel that conceptualizing a
job as an alternative relationship partner facilitating affirmation and movement toward one’s
ideal self provides a unique perspective to related literature on the fit between a job and one’s
self-concept.
550
As such, we argue here that our work offers a few main contributions to this literature.
The first contribution of job affirmation is related to previous work mentioned above pitting self-
affirmation effects against both self-verification effects and self-enhancement effects. Such work
has substantially supported the superior effect of affirmation of one’s ideal self compared to
verification of one’s actual self and enhancement of one’s socially accepted self (Coolsen &
Kumashiro, 2009; Coolsen & Pitek, 2007). Similarly, research involving SC-J fit draws from
self-verification theory (Swann, 1983). According to Scroggins (2003),SC-J fit is optimal when a
job’stasks and dutiesmatch either the actual or employee’s ideal self. While the SC-J fit literature
makes no distinction between the influence of one’s ideal self and one’s actual self in job-related
effects, affirmation research within the domains of consumer and romantic behaviorshows
support for the additional explanatory power of the ideal self over the actual self on various
positive effects for the self and favorable attitudes toward the agent of ideal-self movement.
Given that the 5-item SC-J fit scale (Scroggins, 2003) does not include any reference to the ideal
self, our work would serve to test the effects of ideal-self movement.
The second contribution of our job affirmation work expands the dependent variables that
are significantly affected by self-concept phenomena. SC-J fit work proposes a model in which
good self-concept-job fit leads to: (a) an increased perception by the employee that her or his
work is meaningful; (b) better job performance evaluations by that employee’s supervisors; (c)
and a decreased intention by the employee to quit the job (Scroggins, 2008). Our affirmation
work here seeks to provide evidence that job affirmation of one’s ideal self leads to increases in
the experience of positive emotions, positive self-concept traits, and favorable evaluations of the
job itself, the company, and one’s boss.
The final contribution, as discussed in more detail below, is to demonstrate the unique
contribution of job affirmation (i.e., ideal-self movement) to predicting the variance in the
dependent variables above and beyond mere job satisfaction. That is, we believe job affirmation
distinctly powerful in an organization—even when that organization fosters adequate job
satisfaction.
EXPERIMENTAL INVESTIGATION OF JOB AFFIRMATION EFFECTS
To empirically test the existence of job affirmation in the workplace, we conducted an

experimental study in which participants answered job affirmation related questions with respect
to either a job they considered to be satisfying or a job they considered to be unsatisfying. In line
with previous affirmation findings, we hypothesized that job affirmation (i.e., an employee’s
perceptions of movement toward their ideal selves facilitated by a job) would predict unique
variance of positive changes in the employee’s emotions, self-concept traits, and self-concept
and favorable job-related evaluations (of the job itself, the respective company, and the
respective boss) above and beyond the experimental condition of job satisfaction.
Participants
Eighty participants (44 men, 36 women) in undergraduate business administration classes
at a university in Pennsylvania satisfactorily completed the study. These participants were 20.62
years old on average, the majority were juniors (74% juniors, 26% seniors), and most were
Caucasian (3% African American, 95% Caucasian, 1% Other, and 1% did not report this
information).
551
Experimental Conditions
Participants experienced one of two conditions. In the first condition, participants
answered questions designed to measure job affirmation effects with respect to a current or
previous job (or internship) that they considered to be satisfying (i.e., at the very beginning of the
study, participants in the “satisfying job condition” were asked “to list a job or internship (either
current or in the past) that has been satisfying overall for you.” In the second condition,
participants answered measures of job affirmation effects with respect to “a job or internship
(either current or in the past) that you has NOT been satisfying overall for you.”
Manipulating the type of job in these two conditions served the purpose of ruling out the
alternative explanation that job satisfaction, and not necessarily job affirmation, explains all the
variance in the dependent measures. Previous research on job satisfaction has illustrated similar
effects that we measure in this study (e.g., Dormann, Fay, Zapf, & Frese, 2006; Jones, Smith, &
Johnston, 2005; Weiss, 2002), so we wanted to account for job satisfaction in this experiment
while showing the unique contribution of job affirmation in accounting for the variance in our
dependent measures.
Measures Associated With Job Affirmation Effects

All participants in each of the two conditions completed questions designed to measure
the association of movement toward an employee’s ideal self with the experience of positive
emotions related to the job, the acquisition of positive traits related to the job, and positive
evaluations of the job itself, the company, and one’s boss. The scales below have been typically
used in previous affirmation research (Coolsen & Kumashiro, 2009; Coolsen & Pitek, 2007).
Participants in each condition were first asked to complete questions about their
professional ideal selves. First, they answered the following essay-format question: “Please use
the space below to describe in your own words how the job/internship you listed above was
associated with your ideal self – that is, the overall person you aspire to become.” They then
answered the following question using a nine-point categorical scale (“-4” = I have moved
further from my ideal self, “0” = I have not changed, “+4” = I have moved closer to my ideal
self): “Indicate whether you’ve moved closer to, or have moved further away from, your ideal
self (or not changed at all) as a result of your experiences in the job/internship you listed above.”
Participants in each condition then completed a series of Likert-type scales (“0” = do not agree at
all, “4” = agree somewhat, “8” = agree completely). Using the measures in previous affirmation
work and findings, participants were asked to rate their agreement of the extent to which thinking
about their experiences with the respective job/internship makes them feel more confident,
lovable, attractive, excited, anxious, relaxed, disappointed, happy, annoyed, and successful (e.g.,
“Overall, thinking about my experiences with the job/internship I listed above makes me more
confident.”).
The final set of Likert-type scale items (“0” = do not agree at all, “4” = agree somewhat,
“8” = agree completely) measured agreement to questions measuring their evaluation of job-
related entities: the job/internship itself, the company of the job/internship, and the employee’s
boss of the job/internship. Such measures assessed recommendation of, liking for, and intent to
continue working with the job/internship, company, and boss.
Operational Hypotheses
Hypothesis #1 stated that above and beyond job satisfaction (i.e. as manipulated by the
experimental conditions), ideal-self movement as a result of the job/internship (i.e., job
552
affirmation) would exhibit significantly positive correlations with agreement ratings that
participants feel more positive emotions/self-concept traits as a result of thinking about the
respective job/internship (i.e., more confident, lovable, attractive, excited, relaxed, and happy).
Hypothesis #2 stated that above and beyond job satisfaction, ideal-self movement as a result of
the job/internship would exhibit significantly negative correlations with agreement ratings that
participants feel more negative emotions/self-concept traits as a result of thinking about the
respective job/internship (i.e., less anxious, disappointed, and annoyed). Finally, Hypothesis #3
stated that above and beyond job satisfaction, ideal-self movement as a result of the
job/internship would exhibit significantly positive correlations with agreement ratings for the
following three job/company/boss evaluation items: (a) recommending the job/internship,
company, and boss; (b) liking the job/internship, company, and boss; and (c) intent to continue
working with the job/internship, company, and boss.
Results: Manipulation Check

To assess the strength of the job satisfaction manipulation, independent samples t-test
were performed. For most of the dependent measures (with the exception of “more lovable,”
“more attractive,” “more anxious,” and “more relaxed”) the “satisfying job” condition produced
higher agreement ratings for positive emotions related to the job (or lower agreement ratings for
negative emotions related to the job), the acquisition of positive self-concept traits related to the
job, and positive evaluations of the job itself, the company, and one’s boss.
Results: Support for Operational Hypotheses

The manipulation check results above are in line with previous research on job
satisfaction, so such results were not surprising. The key contribution of this study is to test the
unique effects of job affirmation above and beyond job satisfaction. To test the three operational
hypotheses related to job affirmation mentioned above, we performed simultaneous regression
analyses (see Table I). In order to insert job satisfaction as a predictor variable in the regression
analyses, we coded the “satisfying job” condition as “1” and the “unsatisfying job” condition as
“0”—thus, positive correlation coefficients associated with the condition predictor variable
would indicate a positive association of each dependent measure with job satisfaction.
Hypotheses #1 and #2 stated that product affirmation would lead to increases (decreases)
in the experience of positive (negative) emotions and the acquisition of positive (negative) traits.
The simultaneous regression results provided overwhelming support for these first two
hypotheses—additionally, job affirmation accounted for more unique variability than job
satisfaction did in predicting seven out of the ten dependent measures of emotions/traits.
Hypothesis #3 stated that product affirmation would lead to increases in positive evaluations of
the job itself, the company, and one’s boss. Results provided such support for two of the three
job evaluation measures, but product affirmation did not significantly predict unique variance in
either the company evaluation measures or the boss evaluation measures.
553
TABLE
TABLE I:
I: Simultaneous Regression Analyses
Simultaneous Regression Analyses
Job
Job Job
Job
Satisfaction
Satisfaction Affirmation
Affirmation
(Experimental
(Experimental (Movement
(Movement
Condition)
Condition) Toward
TowardIdeal
Ideal
22
Ratings
Ratings RR
Self-perceptionbased
Self-perception basedononjob/internship
job/internship
MoreConfident
More Confident .31**
.31** .37**
.37** .25**
.25**
MoreLovable
More Lovable .16
.16 .23*
.23* .08*
.08*
More Attractive
More Attractive .05
.05 .22
.22 .05
.05
MoreExcited
More Excited .28**
.28** .46**
.46** .31**
.31**
More Anxious
More Anxious -.05
-.05 0.07
0.07 .01
.01
More Relaxed .12 .30** .11*
More Relaxed .12 .30** .11*
More Disappointed -.31** -.21* .15**
More Disappointed -.31** -.21* .15**
More Happy .31** .45** .32**
More Happy .31** .45** .32**
More Annoyed -.35** -.26* .20**
More Annoyed -.35** -.26* .20**
More Successful .36** .32** .25**
More Successful .36** .32** .25**
Job Evaluation Ratings
Job Evaluation Ratings
I would recommend to others the .43** .17 .23**
I jwould
b/i t recommend
hi to others the .43** .17 .23**
j Ib/i
wantt to continue
hi working in the same
.27** .37** .22**
I type
wantoftojob/internship.
continue working in the same
.27** .37** .22**
type of job/internship. .53** .37** .44**
I like the job/internship.
I like the job/internship. .53** .37** .44**
Company Evaluation Ratings
Company Evaluation Ratings
I would recommend to others the
I company
would recommend to others the .46** .15 .24**
of the job/internship. .46** .15 .24**
company
I want toof the job/internship.
continue working in the same .51** .18 .20**
I want to continue working in the same .51** .18 .20**
I like the company. .50** .18 .29**
I likeEvaluation
Boss the company.Ratings .50** .18 .29**
Boss Evaluation
I would Ratingsto others my boss of
recommend
.48** .17 .27**
I the job/internship.
would recommend to others my boss of
.48** .17 .27**
the job/internship.
I would work for the same boss. .51** .16 .30**
I Iwould
like mywork for the same boss.
boss. .51**
.48** .16
.14 .30**
.26**
I like my boss. .48** .14 .26**
**p < .01., * p < .05.
**p < .01., * p < .05.
554
554
DISCUSSION AND IMPLICATIONS
Ideal-self movement seems to be a very influential effect in various contexts—in

romantic relationships, in consumer behavior, and in the workplace. Our findings demonstrate
that job affirmation has profound implications above and beyond job satisfaction. Job affirmation
is associated with increases in an employee’s positive emotions and self-concept traits, as well as
favorable evaluations of the job itself.
One implication of our general findings here may inspire future directions for this
research in explaining the association between SC-J fit and meaningful work, objective job
performance, and intent to leave (Scroggins, 2008). It is quite possible that these SC-J fit
associations are set in motion or mediated by job affirmation effects. That is, an individual may
have to experience job affirmation effects before one perceives SC-J fit. Or, an individual may
perceive her/his work as meaningful only if SC-J fit leads to job affirmation. Thus, the role of
affirmation would seem to fit in existing SC-J fit models, but future research would be necessary
to determine exactly where affirmation fits.
However, in this experiment, job affirmation was not significantly associated with
increases in favorable evaluations for the company or one’s boss. An employee seems to reap
significant personal benefits from job affirmation and views the job itself in a very positive
light—however, as our findings suggest that positive light may not be as easily cast on the
company or the boss. Perhaps one explanation for this might be that neither the company nor the
boss fully understands or explicitly points out ideal-self movement for their employees as a result
of their job. It is possible that while we, as employees, know that a job or career can help us to
grow and take us to places that we ideally want to go, we may generally feel that companies and
bosses “come and go” in our lives—that is, we can chose a job or career for life while we know
that we may possibly shift companies and bosses in our preferred job or career. Perhaps we feel
that any particular company or boss is not explicitly concerned about our ideal-self movement—
their concerns with employees lie in simply getting the job done.
Therefore, an implication would be for a boss or a company to actually and explicitly
express importance of ideal-self movement for its employees. Emphasizing job affirmation
effects to employees could possibly create the perception that a company and a boss recognize
the importance of ideal-self movement for their employees. Such emphasis could cause many
potential favorable shifts: favorable evaluations of the company and the boss, increased
communication between employee and boss, and higher job satisfaction and employee
engagement/commitment. Thus, the company or boss could conduct regular appraisal processes
where the employee creates a personal career plan reflecting an environment where job
affirmation could flourish.
REFERENCES
Aaker, J.L., Fournier, S., and Brasel, S.A. “When Good Brands Do Bad.” Journal of Consumer
Research, 31, 2004, 1-16.
Aggarwal, P. “The Effects of Brand Relationship Norms on Consumer Attitudes and Behavior.”
Journal of Consumer Research, 31, 2004, 87-101.
Coolsen, M.K. “Brand Loyalty Conceptualized as an Interdependence Process.” Business
Research Yearbook, 12, 2005, 611-614.
555
Coolsen, M.K., and Kumashiro, M. “Self-Image Congruence Models Conceptualized as a
Product Affirmation Process.” Advances in Consumer Research, 36, 2009, 980-981.
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DIVERSITY AND RELIGION IN THE WORKPLACE
C. W. Von Bergen, Southeastern Oklahoma State University

cvonbergen@se.edu
Diane Bandow, Troy University

bandow2@troy.edu
ABSTRACT
This discussion examines recent efforts to bring religious faith into more active
engagement with the contemporary workplace and the problems arising from the growing role
this diversity issue plays in business life. The 21st century is emerging as a century of religion
and faith on the job is becoming an important public issue. This increased visibility has led to
greater concerns with discrimination based on religion and beliefs that societies and
organizations must address. A review of activities to support faith at work may be beneficial to
other cultures and global firms since eliminating discrimination helps everyone achieve equal
opportunity at work.
INTRODUCTION
As U.S. society has become more preoccupied with constitutional concerns for civil
liberties of all its citizens, firms have responded with a number of diversity-related initiatives in
the recruitment, selection, and management of its workers. For example, the 1960s erupted with
the civil rights movement, and soon leading companies sought to develop race-friendly policies
to encourage integration and racial equality in the workforce. The 1970s produced the modern
feminist movement, which confronted corporations with women’s rights to equal pay and equal
opportunity to compete for jobs and positions historically thought suitable only for men.
Enlightened companies, instead of fighting this, sought to develop gender-friendly policies to
attract and retain women in all organizational levels. The 1980s gave rise to many single-parent
families where both parents worked outside the home, and blended families composed of
remarried couples and children from different marriages living under one roof. In response to
such familial changes and shifts, forward-thinking companies created a range of family-friendly
policies including flextime, telecommuting, job sharing, day care centers, and paternity leave.
The 1990s witnessed progressive firms embracing inclusion for the lesbian/gay/bisexual/
transgendered community in their human resources departments through nondiscrimination
policies covering sexual orientation and gender identity, and domestic partner health insurance.
Religion at work appears to be the latest type of diversity initiative in the workplace to be
addressed as corporations develop faith-friendly policies to honor, respect, and dignify the
spiritual dimension of employees’ lives (Yung, 2007).
FAITH IN THE WORKPLACE
Faith is an important aspect of most societies because each country’s religious practices
influence ethics, human dealings, social customs, the ways in which members of a society relate
to each other and to outsiders, as well as workplace behavior (Griffin & Pustay, 1999).
Historically, in the U.S.the idea of workers bringing God into their job was unthinkable but
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increasingly the boundaries between faith and work are diminishing as employees desireto labor
where faith and workplace practices are aligned (Miller, 2007). Business leaders need to be
aware of these challenges and recognize that faith in the workplace has the potential for
divisiveness and discrimination if not addressed in inclusive and respectful ways.
LEGAL CONSIDERATIONS FOR FAITH AT WORK
As religion and spirituality continue to challenge firms, there are several factors that
organizations must address, including sincerely held religious convictions, reasonably
accommodating the religious needs of employees balanced against undue hardships placed on the
employer, training of supervisors and managers regarding the issues surrounding faith in the
workplace, and maintaining a harassment-free work environment.
Sincerely Held Religious Convictions

Often, when claims of religious discrimination or harassment surface, or when workers
request accommodations for their religious convictions, one of the first actions firms inevitably
do is investigate the worker’s claim that he or she has a legitimate religious belief. Title VII of
the Civil Rights Act defines religion to include “all aspects of religious observance and practice,
as well as belief” (42 U.S.C. § 2000e-(j)). The EEOC Guidelines state that protected religious
practices “include moral or ethical beliefs as to what is right and wrong which are sincerely held
with the strength of traditional religious views” (29 C.F.R. § 1605.1).
The Supreme Court, in a number of cases, has likewise tried to interpret what is a
religious belief. In 1944, for example, in United States v. Ballard the court ruled that “religious
experiences which are real as life to some may be incomprehensible to others,” (p. 78) and
encouraged lower courts that they were not to rule on comprehensibility. Later, in 1965 in United
States v. Seeger, the court defined religion as a “given belief that is sincere and meaningful [and]
occupies a place in the life of its possessor parallel to that filled by the orthodox belief in God of
one who clearly qualifies for the exemption” (p. 173).It should be noted that the freedom not to
believe in a deity is also a protected religious belief under Title VII.
As a consequence of the extremely expansive view given to the definition of religion, it is
exceedingly difficult for an employer to defeat the assertion that a worker’s convictions are not
religious. Some researchers have advocated that firms “accept any sincerely held belief based
upon principles of what is right or wrong—no matter how unusual—as a religious belief”
(Frierson, 1988, p. 62) while Cash and Gray (2000) suggest ignoring the issue completely and
focusing on the impact on the firm of accommodating faith-based claims.
Balancing Interests of Firm and Worker in Accommodations

Because of the greater willingness of employees to assert their religious convictions at
work (Miller, 2007), organizations should expect that its workforce increasingly will be asking
for accommodations for their religious beliefs and practices. Cash and Gray (2000) identified
two kinds of requests requiring employer accommodations: 1) observance requests (outside
work) that involve employees asking for annual leave to take part in religious festivals, day of
Sabbath observance or pilgrimages, or for occasional extended leave for births, weddings, deaths
where staff with relatives abroad have particular faith or cultural needs; and 2) manifestation
requests (at work) in which workers ask for: a) exclusions from dress, clothing, and grooming
codes (e.g., wearing pants, allowing facial hair, permitting head coveringor other religiously
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mandated garb, uniforms, facial or religious jewelry and piercings, or similar adornments), b)
greater food choices consistent with religious beliefs at firm-sponsored cafeterias and restaurants,
c) relief from specific tasks inconsistent with faith practices and beliefs (e.g., a Catholic police
officer unwilling to protect and guard abortion clinics) d) time off for prayer during normal
working hours and/or during work breaks and lunch, e) use of facility space (e.g., conference
rooms) for faith-related activities, f) permission for evangelization activities including handouts
of religious literature and posting of flyers announcing faith-related activities, g) exceptions to
union membership (generally, an employer or union shall not require membership from any
employee or applicant whose religious creed prohibits such membership), h) religious-based
customer greetings and salutations (e.g., “Praise the Lord” and “God bless you”), i) exclusion
from workplace diversity initiatives advocating mutual respect for employees based on their
sexual orientation, gender identification, and/or lifestyle choices (e.g., unwed parenthood), and j)
non-participation in objectionable non-religious motivation or training programs incorporating
controversial techniques (e.g., mandatory “new age” training programs, designed to improve
employee motivation, cooperation or productivity through meditation, yoga, or biofeedback).
In considering such worker requests organizations must determine any undue hardships
they may incur (Baz v. Walters, 1986). The U.S. Supreme Court set the standard for what
constitutes an undue hardship to the employer in Trans World Airlines v. Hardison (1977)
holding that a cost of approximately $50 per month caused undue hardship to the airline which
exempted it from having to accommodate an employee’s religious beliefs (Brierton, 2002).
Undue hardship is thus established if the employer is required to spend even a minimal (de
minimus) amount of money to accommodate the request. The determination of whether a
particular proposed accommodation imposes an undue hardship “must be made by considering
the particular factual context of each case” (Tooley v. Martin Marietta Corp., 1981, p. 1242).
It is noteworthy, that this de minimis cost standard defining an undue hardship may be
eroding. For example, a New York statute was amended in 2002 to redefine undue hardship from
a “palpable increase in cost” to “significant expense or difficulty,” (New York Executive Law,
Article 15, § 296 10d) to establish a justification for denying an accommodation. This resulted in
an increased burden upon employers in denying workers’ requests for accommodation of their
faith beliefs and convictions. If this trend continues it means that employees will have much
more power to exercise their religious beliefs in the workplace, thus making employers’
responsibility to keep the workplace free from religious discrimination and harassment more
difficult.
The employer does not have to grant the specific accommodation requested by the
employee; it need only provide an effective accommodation. For example, in Ansonia Board of
Education v. Philbrook (1986), the court held that “By its very terms the statute directs that any
reasonable accommodation by the employer is sufficient to meet its accommodation obligation,”
(p. 67) while in Rodriguez v. City of Chicago (1998), it indicated that “Title VII ... requires only
reasonable accommodation, not satisfaction of an employee’s every desire” (p. 775).
In addressing employee accommodation requests, it is important that organizations
demonstrate good faith efforts and that its actions be perceived as reasonable and within the
spirit of equal employment opportunity law. Courts will generally find a violation if the
employer makes little or no effort to accommodate the employee or refuses to discuss the
issue.“The obligation to search for an acceptable solution is bilateral. Employees also have the
obligation to make a good faith effort to explore alternatives,” (p. 760). Additionally, employers
must also be able to show evidence of undue hardship that is more than mere speculation. The
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employer is on stronger ground when it has attempted various methods of accommodation and
can point to hardships that actually resulted rather than hypothetical burdens.
Accommodations in the Workplace

Therefore, it is prudent for employers to consider the employees’ proposed
accommodation and if unreasonable, offer alternative accommodations that would resolve the
conflict, instead of flatly rejecting the employee’s proposal. While an employer’s first reaction
may be to deny an accommodation because of fear that the accommodation will set a precedent
or because of the possible cumulative effect of another employee wanting the same
modification, this is not a valid defense without evidence that a change will cause undue
hardship to the employer.
A final consideration in addressing employee accommodations is to think creatively
about ways that the needs of both the worker and the company can be met. Not only is there a
good chance that a compromise can be found, but even if one is not, this shows that the employer
made a good faith effort to provide an accommodation. The Tanenbaum Center for Interreligious
Understanding (n. d.) provides an example of such creativity: A situation arose at a large hi-tech
firm shortly after 9/11 where the security department insisted a new Muslim employee remove
her veil (hijab) for her photo identification key card. She insisted that her religious belief
prohibited her from appearing unveiled before non-familial men. Management deliberated and
founda solution. The new employee was given two identification cards—one veiled and one
unveiled. Her unveiled photo was taken and processed by a woman and would not be shown or
used for entry purposes. The veiled photo card was the one programmed to unlock doors and was
the one shown for identification purposes as she moved around the facility.
Accommodations, Distributive Justice and Backlash

Even with creative solutions to address the accommodation, employers may face other
issues. Various types of justice can create perceived inequalities. Distributive justice is perceived
fairness of outcomes; interactive justice deals with the treatment of individuals and interpersonal
processes, and procedural justice focuses on fairness and organizational policies and procedures.
Forret and Love (2008) found distributive justice, interactive justice and procedural justice play
vital roles in organizations. A perceived uneven or in equal distribution of fairness or justice may
create a backlash from dissatisfied employees who believe another group is receiving preferential
treatment. For example, Burbach (2008) reported on requests for prayer time for Muslim workers
created a controversy in a meat packing plant in Grand Island, Nebraska. Similar events had been
echoed with Muslim workers over religious requirements at other plants such as the Swift plant
in Greeley, Colorado and Cold Spring, Minnesota. Although the Grande Island plant and the
union announced a compromise to allow prayer time in observance of Ramadan, an estimated
1,000 non-Muslim workers (Hispanic, Sudanese Christians and white) walked off the job and
protested unfair treatment favoring Muslims.
IMPLICATIONS FOR THE WORKPLACE
There are several considerations for organizations which must be noted in addition to the
potential for backlash with the perception of unequal treatment.
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Training of Supervisors and Managers Regarding Faith at Work Issues
Firms would be wise to train supervisors to deal with sensitive issues related to faith,
religion, and spirituality in the workplace. Indeed, supervisors must be particularly cautious in
what they say or do. Where the surrounding circumstances indicate that religious expression is
merely the personal view of the supervisor, and that employees are free to reject or ignore the
supervisor’s point of view or invitation without any harm to their careers or professional lives,
such expression is legally protected (Adams, 2000; Guidelines on Religious Exercise, 1997). Yet,
because supervisors have the power to hire, terminate, or promote, employees may reasonably
perceive their supervisor’s religious expression as coercive, even if it was not intended as such.
Therefore, supervisors should be particularly careful to ensure that their statements and actions
are such that employees do not perceive coercionof religious or non-religious behavior and
should, where necessary, take appropriate steps to dispel misperceptions.
Hostile Environment
In addition to refraining from indefensible religious discrimination, an employer must
maintain a work environment that is not hostile or abusive with regard to religion. Title VII
requires that an employer take prompt action to prevent an employee from expressing their
opinion in a way that abuses or offends their co-workers (Davis v. Monsanto Chem. Co., 1988).
Speech and/or conduct constitutes harassment if it is “severe and pervasive” to alter the
conditions of employment and create a hostile or abusive work environment based on an
employee’s religion or other protected category (Harris v. Forklift Systems Inc., 1993). A hostile
work environment can be created by slurs, jokes, comments and other forms of ridicule,
persistent “unwelcome” proselytizing of subordinates or co-workers and any “mandatory”
religious activity in the workplace (Venters v. City of Delphi, 1997; Weiss v. United States,
1984).
For religious harassment to be illegal under Title VII, it must be sufficiently severe and
pervasive to alter the conditions of employment and create an abusive working environment.
Whether conduct can be said to be religious harassment under Title VII depends on the totality of
the circumstances, such as the nature of the verbal or physical conduct at issue and the context in
which the alleged incidents occurred. Indeed, “[T]he real social impact of workplace behavior
often depends on a constellation of surrounding circumstances, expectations, and relationships
which are not fully captured by a simple recitation of the words used or the physical acts
performed” (42 U.S.C. § 2000-3(a), p. 80).
CONCLUSION
For most of the 20th century U.S. society considered it inappropriate to explicitly bring
religion into the office. The sentiment was encapsulated in the term, “Sunday-Monday gap”
(Miller, 2007, p. 9) where workers’ Sunday worship hour bore little relevance to issues
encountered during Monday work hours. The 21st century, however, “is dawning as a century of
religion” (Huntington, 2004, p. 15). Faith and spirituality have come into the workplace, and
with this phenomenon now public, the “last taboo in corporate America” (Gunther, 2002, p. 59)
is disappearing. Therefore, employers increasingly must balance the firm’s and employees’
rights to express their religious beliefs and values while not subjecting other employees to
harassment or discriminating against employees on the basis of different religious beliefs. Such
tensions have surrounded the latest type of diversity that firms must address—God at work.
561
In an ideal work environment, the religious beliefs of a given employee, or of the
employer, do not create conflicts. Either is free to believe as he or she chooses and, as long as the
work is performed satisfactorily, neither will encounter difficulty on the basis of religion. Yet, in
the real world, a number of issues can arise to create friction. An employer and employee may
discuss, or even argue over, religious principles; however, religion is not simply a matter of
belief but is manifested through various actions such as style of dress, praying, and fasting. Put
simply, the many characteristics of different religions provide ample ground for disagreement,
conflict, or even harassment among employers and employees. Indeed, religion has become more
visible at work and is the latest type of diversity in the workplace that has presented many
challenges. Business leaders need to be attentive to the potential for divisiveness and
discrimination if religious and spiritual practices at work are not implemented with dignity.
Given the caveats presented above, some businesspeople, whether religious or not, feel
that integrating faith and work is problematic and seek to institute policies and procedures aimed
at minimizing and, in some cases avoiding altogether, religious expression. They promote a level
of religious expression commensurate with the least amount of faith-related exhibition allowed
by law. Unfortunately, the exact contours of the legal and societal landscape regarding faith at
work are uncertain. Therefore, leaders adopting this strategy may act at considerable risk in
attempting to gauge correctly legal rights and responsibilities affecting faith in the workplace.
Such a minimalist approach may fail to adequately recognize opportunities for
improvement in several areas. Recent empirical studies have shown that certain dimensions of
religion and spirituality in the workplace, such as meditation, and sense ofmission, relate
positively to job satisfaction, job involvement, and productivity (Garcia-Zamor, 2003; Millman,
Czaplewski, & Ferguson, 2003). These positive outcomes may benefit companies as well as
their employees. Also, companies shown to have strong spiritual corporate cultures economically
outperformed others in investment return and shareholder value (Thompson, 2000). Forret and
Love (2008) noted that when employers treated employees with dignity and respect this may
increase trust and morale.
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42 U.S.C. § 2000e-(j).
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Adams Jr., J.W. “Employers’ Religious Rights in the Workplace.” Journal of Employment
Discrimination Law, 2, (3), 2000, 238-242.
Ansonia Board of Education v. Philbrook, 479 U.S. 60, 1986.
Baz v. Walters, 782 F.2d 701, 706 (7th Cir. 1986).
Brierton, T.D. “Reasonable Accommodation Under Title VII: Is It Reasonable to The Religious
Employee?” Catholic Lawyer, 42, (2), 2002, 165-193.
Burbach, C. “Tension Over Prayer: Meat Plants Seem A Breeding Ground for Culture Clashes.”
Omaha World-Herald, 2008, September 21, A1.
Cash, K.C., and Gray, G.R. “A Framework for Accommodating Religion and Spirituality in the
Workplace.” Academy of Management Executive, 14, (3), 2000, 124-133.
Davis v. Monsanto Chem. Co., 858 F.2d 345, 350 (6th Cir. 1988).
Forret, M., and Love, M.S. “Employee Justice Perceptions and Coworker Relationships.”
Leadership & Organizational Development Journal, 29, (3), 2008, 248-260.
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Frierson, J.G. “Religion In The Workplace—Dealing In Good Faith?” Personnel Journal, 67, (7),
1988, 60-68.
Garcia-Zamor, J.C. “Workplace Spirituality and Organizational Performance.” Public
Administration Review, 63, (3), 2003, 355-363.
Griffin, R., and Pustay, M. International Business: A Managerial Perspective. New York:
Addison-Wesley, 1999.
“Guidelines on Religious Exercise and Religious Expression in the Federal Workplace.” The
White House, Office of the Press Secretary,August 22. Retrieved from:
http://clinton2.nara.gov/WH/New/html/19970819-3275.html,1997.
Gunther, M. “God and Business: The Surprising Quest for Spiritual Renewal in the American
Workplace.” Fortune, 2001, 9 July, 58-80.
Harris v. Forklift Systems Inc., 510 U.S. 17, 21-22 (1993).
Huntington, S.P. Who Are We?: The Challenges to America’s National Identity. New York:
Simon & Schuster, 2004.
Miller, D.W. God at Work: The History and Promise of the Faith at Work Movement. New
York: Oxford University Press, 2007.
Millman, J., Czaplewski, A.J., and Ferguson, J. “Workplace Spirituality and Employee Work
Attitudes: An Exploratory Empirical Assessment.” Journal of Organizational Change
Management, 16, (4), 2003, 426-447.
New York Executive Law, Article 15, § 296 10d.
Rodriguez v. City of Chicago, 156 F.3d 771 (7th Cir. 1998).
Tanenbaum Center for Interreligious Understanding. “Religion, War, and the Workplace: Tips
for Preventing Backlash.” Available at:
http://www.tanenbaum.org/programs/diversity/tips.aspx (accessed 8 March 2007).
Thompson, W.D. “Can You Train People to be Spiritual?” Training and Development, 54, (12),
2000, 18-19.
Tooley v. Martin Marietta Corp., 648 F.2d 1239, 1243 (9th Cir. 1981).
Trans World Airlines v. Hardison, 432 U.S. 63 (1977).
Venters v. City of Delphi, 123 F. 3d 956, 972-74 (7th Cir 1997).
United States v. Ballard, 322 U.S. 78, 86 (1944).
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Yung, K. “Faith Is Latest Type of Diversity in Workplace.” The Dallas Morning News, 2007,
March 17, 1D, 2D.
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DARWIN’S DEADLY LEGACY?
WHY EVOLUTION MATTERS FOR MANAGEMENT STUDIES
Chulguen Yang, Southern Connecticut State University

yangc1@southernct.edu
Stephen M. Colarelli, Central Michigan University

cola1sm@cmich.edu
Kayong Holston, Ottawa University

kayong.holston@ottawa.edu
ABSTRACT
In this paper, we emphasize the need for a valid and useful theory of human nature in the
management studies. We suggest that a Darwinian understanding of the human mind can satisfy
the theoretical need. We provide a brief description of evolutionary psychology and respond to
some criticisms against evolutionary psychological research in organization and management
studies.
INTRODUCTION
In his recent book, “Evolution for Everyone: How Darwin’s Theory Can Change the Way
We Think about Our Lives,” David Wilson (2007), an evolutionary biologist, claimed that
evolution is more than fossil records and it actually affects many aspects of our everyday lives. It
is widely held among evolutionary scientists that nothing in biology makes sense except in the
light of evolution (Dobzhansky, 1973). The idea that co-evolutionary forces of biological and
socio- cultural evolution have shaped our complex – even paradoxical – nature is by now well
accepted by evolutionary-minded scholars (e.g., Ehrlich, 2002; Wilson, 1978).
Interestingly, however, questions regarding the human nature have been rarely discussed
in business disciplines. Historically, business scholars have been silent on the issue of human
nature and considered it irrelevant to their expertise. The silence often reinforces the unspoken –
but widely shared– presumption that the human mind is like a blank slate which is quite
malleable with few inborn instincts. Even in organization and management studies, a brief
coverage on Douglas McGregor’s (1960) Theory X and Theory Y classification is all that
students learn about the human nature in introductory management courses. Given that any
business cannot be thought of without a consideration of its people, we perceive the current lack
of meaningful discourse on the human nature as a serious deficiency.
We thus begin this paper by presenting a thesis that understanding our evolved nature and
its manifestations in modern organizations is critical for both business scholars and students. We
suggest that evolutionary psychology, a scientific study of the human mind and human
behaviors, is a good research program that enables us to understand the evolved human nature.
Accordingly, we provide a brief description of evolutionary psychology and reflect upon the
critics’ arguments against evolutionary psychological research in organization and management
studies.
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EVOLUTIONARY PSYCHOLOGICAL RESEARCH PROGRAM AND ITS CRITICS
Evolutionary Psychological Understanding of Human Nature

Evolutionary psychology (EP), a scientific synthesis of neo-Darwinian evolutionary
biology and modern cognitive psychology, presumes that we as a species share a set of universal
psychological characteristics. The human nature is understood as the architecture of massive
evolved psychology modules (i.e., mental programs) (Cosmides, Tooby, & Barkow, 1992). From
an evolutionary perspective, the common psychological mechanisms shared by conspecifics (i.e.,
members of the same species) have been shaped by natural selection and selectively retained in
the species’ behavioral repertoire due to their beneficial contributions toward survival and
reproductive success. According to EP, human nature is thus conceived as a set of evolved
preferences and psychological tendencies that had been sculpted by evolution by natural
selection and retained in our species’ mental and behavioral algorithms (Dawkins, 1985).
As expected, the basic tenets of EP have faced strong oppositions from religious and
humanistic moral traditions (Hurlbut & Kalanithi, 2001). Even those who believe in the
modularity of mind (e.g., Fodor, 2000) and evolutionary shaping of human anatomy (e.g., Gould,
2000; Rose, 2000) have been skeptical about the idea that natural selection has actually shaped
the human mind. Some contend that EP is not truly parallel to evolutionary biology and its major
claims are merely provocative conjectures; for instance, Gould (2000) argued that EP had
generated un-testable hypotheses with post-hoc “just-so” stories.
Evolutionary Psychological Research Program in Business Disciplines

In spite of aforementioned skepticism and hostile emotional reactions from its critics, EP
as a research program has begun to gain new momentum from scholars in some business
disciplines. Since 2000, scholars in organization and management studies (e.g., Lawrence &
Noria, 2002; Nicholson, 2000; Talbot, 2005), human resource management (e.g., Colarelli,
2003), and marketing and consumer behavior (e.g., Saad, 2007) have published important works
of evolutionary psychological applications in respective areas.
In addition, special issues on evolutionary psychology have been recently published in
academic business journals; for example, Managerial and Decision Economics (2006, guest
edited by Satoshi Kanazawa), Journal of Organizational Behavior (2006, guest edited by Rod
White and Nigel Nicholson), Ruffin Series in Business Ethics (2004, guest edited by Edward
Freeman and Patricia Werhane), and Psychology & Marketing (2003, guest edited by Donald
Hantula).
The Critical Responses from Scholars in Management and Organization Studies

Now we present a sample of critical reactions toward evolutionary psychological studies
in some fields of business disciplines. We do not consider the following critiques as
representative; yet, we believe that they express some common misunderstandings against EP.
In his review of the book, “Managing the Human Animal: Why People Behave the Way
They Do in Corporate Settings,” written by Nicholson (2000), Thompson (2003) wrote:
It is pointless to pretend that I approached this book with an open mind,
hardwired as I am by a background in sociology and radical organization theory.
[…] First, the quality of evidence is poor. […] The second recurring problem,
common to EP, is the preference for distal (or ultimate) over proximate
explanation (Rose, 2000). So many of the things explained by Nicholson as the
565
result of hardwiring of the brain through evolutionary adaptation could be
explained more effectively by reference to specific institutional influences and
social organization. (pp. 373 - 374)
In his response to an article by Nicholson (1997), Sewell (2004) expressed a similar opinion:
It is far more helpful for us as students of organizational life to look to proximal
explanations of the formation of workplace cliques, clans, and cabals founded on
the study of the ways in which power struggles, conflict and Machiavellian
politics interact with the looping effects of our organizational knowledge (Clegg
& Swell, 2001) than to speculate about what our ancestors might have done in the
African savannah 1.86 million years ago. (p. 944)
In some respect, we sympathize with their concerns; after all, we do not have the fossil records
of behaviors of our distant ancestors. However, EP does not claim that neo-Darwinian
understanding of the human mind will explicate our hominid ancestors’ mental traits with telling
accuracy. Instead, EP focuses on the functional relationships between adaptive problems in our
ancestral environment and psychological mechanisms to solve them. For instance, Cosmides, et
al. (1992) wrote:
By understanding the selection pressures that our hominid ancestors faced – by
understanding what kind of adaptive problems they had to solve – one should be
able to gain some insight into the design of the information processing
mechanisms that evolved to solve these problems. (p.9)
It is our belief that anthropological imagination about the adaptive
problems in the ancient environment through fossils and other artifacts is not
merely idle speculation. In addition, on-going debates on the testability of
evolutionary hypotheses are probably due to the critics’ inattention to the
multiple-level analyses in EP (Buss, 1999). A research strategy is conceivable
when one grasps the hierarchical nature of evolutionary theorizing about the
relationships among adaptive problems in the ancient environment, psychological
adaptations, and their consequences in the current environment (Crawford, 1998).
A similar criticism is expressed by an industrial psychologist (Wilson, 2004) who
published a review on the book, “No Best Way: An Evolutionary Perspective on Human
Resource Management” by Stephen Colarelli (2003). Wilson wrote:
The central point of the book is that I-O [Industrial and Organizational
Psychology] requires decision makers to act in ways that are not in agreement
with how they evolved to behave and make decisions. I am sure our behavior
evolved along with everything else, but unfortunately, behavior does not leave
any fossils. The discussion of how humans behaved several thousand years ago
will remain nothing more than speculation and has no place in a serious science of
behavior until someone invents a time machine. […] So I think much of what this
author calls evolutionary HRM is little more than idle speculation. […] The
premise is bad, he does not deliver on what he says he is going to cover, and the
book is hard to read without throwing it across the room several times. I wonder
how books like this get published. (pp. 1098-1099)
We argue, however, that interpretations of our evolved behavioral tendencies need to be
performed in a more nuanced manner. The staffing practices, we acknowledge, are influenced by
not only our evolved psychological predispositions but their interaction with the environmental
pressures in which a business entity is embedded. We actually claimed that kin nepotism as an
566
evolved psychological adaptation was and is adaptive in certain economic niches; for instance,
traditional and even apparently irrational selection methods of immigrant entrepreneurs have
worked in immigrant economies (Yang, Colarelli, & Han, 2008).
In fact, our theoretical emphasis on the plausible effects of our species’ evolved kin
nepotism (i.e., favorable treatment of family and relatives) under unique environmental pressures
faced by immigrant small business owners has not been well-received by journal reviews as
described below:
This proposal stimulated thought as well as some angst. The rigidity of the
approach bothered me on a visceral level and prompted me to question my own
beliefs and values. While this is beneficial on a personal level, from a value-added
perspective, it seems that there are so many avenues worthy of exploration when
it comes to the functionality and performance of immigrant businesses.
This is a curious, 1950’s-style epistemological stance which can best be
described as a Friedman-style positivism. There is no recognition by the author(s)
that this seems to be the case, not any attempt by them to justify their stance.
Thus, the paper fails to establish, on epistemological grounds as well, either
novelty or validity. […] not fruitful, in the sense that there is little new or
different that emerges from the use of evolutionary theory (as opposed to, again,
say, racial hemophilic association) that gives new insights. (Italics added).
That EP prefers ultimate (i.e., evolutionary payoff of a behavior through differential
survival and reproductive success) to proximate (i.e., immediate cause of the behavior)
explanation is one of the common misunderstandings of the EP critics. The ultimate and
proximate explanations are not an either-or issue; simply put, the ultimate explanation is no
better than or “opposed” against the proximate explanation. We consider one of the strengths of
the evolutionary research program lies in its theoretical usefulness for enriching our
understanding of both “why” (ultimate) and “how” (proximate) of any selectively retained
behavioral trait. Stated a bit differently, EP does not overrate the biological/genetic explanation
while it underrates the socio-cultural influences on any behavioral trait.
CONCLUSION
We have begun this short paper by emphasizing the need for a valid and useful theory of human
nature for both business scholars and students. We suggest that EP can meet the need if
management scholars are more open-minded to the ideas borrowed from different disciplines.
We admit that no single theory is comprehensive enough to explain all the complexities of the
human mind and organizational behaviors. However, an evolutionary understanding of the
human nature is firmly based on the modern synthesis of Charles Darwin’s original idea which
enables us to simplify complex phenomena in a powerful way. We are optimistic that EP can
play the role of a unifying theory of the human nature, and thus provide a meaningful theoretical
tool for practitioners as well as researchers.
REFERENCES
Buss, D.M. Evolutionary Psychology: The New Science of the Mind. Boston: Allyn and Bacon,
1999.
567
Colarelli, Stephen M. No Best Way: An Evolutionary Perspective on Human Resource
Management. Westport, CT: Praeger, 2003.
Cosmides, L., Tooby, J., and Barkow, J.H. “Introduction: Evolutionary Psychology and
Conceptual Integration.” In J.H. Barkow, L. Cosmides, and J. Tooby, eds., The Adapted
Mind: Evolutionary Psychology and the Generation of Culture. Oxford: Oxford
University Press, 1992, 3 – 15.
Crawford, C. “Environments and Adaptations: Then and Now.” In C. Crawford, and D.L. Krebs,
eds., Handbook of Evolutionary Psychology: Ideas, Issues, and Applications. Mahwah,
NJ: Lawrence Erlbaum Associates, 1998, 275 – 302.
Dawkins, R. The Blind Watchmaker. New York: Norton, 1985.
Dobzhansky, T. “Nothing in Biology Makes Sense Except in the Light of Evolution.” American
Biology Teacher, 35, 1973, 125–129.
Ehrlich, P.R. Human Natures: Genes, Cultures, and the Human Prospect. New York: Penguin
Books, 2002.
Fodor, J. The Mind Doesn’t Work That Way: The Scope and Limits of Computational
Psychology. Cambridge, MA: MIT Press, 2000.
Gould, S.J. “More Things in Heaven and Earth.” In H. Rose, and S. Rose, eds., Alas, Poor
Darwin: Arguments against Evolutionary Psychology. New York: Harmony Books, 2000,
101–126.
Hurlbut, W., and Kalanithi, P. “Evolutionary Theory and the Emergence of Moral Nature.”
Journal of Psychology and Theology, 29, 2001, 330-339.
Lawrence, P.R., and Nohria, N. Driven: How Human Nature Shapes Our Choices. New York:
Jossey-Bass, 2002.
McGregor, D. The Human Side of Enterprise. New York: McGraw-Hill Education, 1960.
Nicholson, N. “Evolutionary Psychology: Toward a New View of Human Nature and
Organizational Society.” Human Relations, 50, 1997, 1053–1078.
Nicholson, N. Managing the Human Animal: Why People Behave the Way They Do in
Corporate Settings. London: Orion Business, 2000.
Rose, H. “Colonizing the Social Sciences?” In H. Rose, and S. Rose, eds., Alas, Poor Darwin:
Arguments against Evolutionary Psychology. New York: Harmony Books, 2000, 127 -
153.
Saad, G. The Evolutionary Bases of Consumption. Mahwah, NJ: Lawrence Erlbaum Associates,
2007.
Sewell, G. “Yabba-Dabba-Doo! Evolutionary Psychology and the Rise of Flintstone
Psychological Thinking in Organization and Management Studies.” Human Relations,
57, (8), 2004, 923- 955.
Talbot, C. The Paradoxical Primate. Charlottesville, VA: Imprint Academic, 2005.
Thompson, P. “Animal Magic: Nigel Nicholson and Evolutionary Psychology.” British Journal
of Management, 14, 2003, 373–375.
Wilson, D.S. Evolution for Everyone: How Darwin’s Theory Can Change the Way We Think
About Our Lives. New York: Bantam Dell, 2007.
Wilson, E.O. On Human Nature. Cambridge, MA: Harvard University Press, 1978.
Wilson, M.A. “A Book Review on ‘No Best Way: An Evolutionary Perspective on Human
Resource Management.’” Personnel Psychology, 57, (4), 2004, 1097–1099.
Yang, C., Colarelli, S.M., and Han, K. “Immigrant Entrepreneurship from a Neo-Darwinian Co-
Evolutionary Perspective.” Journal of Business Management & Change, 3, (2), 2008, 53–70.
568
CHAPTER 24
POLITICAL COMMUNICATION/
PUBLIC AFFAIRS
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FACE-ISM IN THE 2008 U.S. PRESIDENTIAL GENERAL ELECTION:
PHOTO COVERAGE OF CANDIDATES IN NEWS & BUSINESS MAGAZINES
Kelly Price, East Tennessee State University

pricekb@etsu.edu
John Mark King, East Tennessee State University

johnking@etsu.edu
ABSTRACT
A content analysis of news and business magazines published in the United States was
performed to measure the photographic coverage and face-ism effect of the 2008 presidential
general election candidates. Results showed differences in photographic coverage between male
and female candidates. Significantly, images of male candidates were often cropped with an
emphasis on the head and shoulders while images of the female candidate were often cropped
with emphasis on the body.
INTRODUCTION/LITERATURE REVIEW
The historic 2008 American presidential campaign focused on many issues including
gender. The candidate pool was more diverse than ever, and this diversity gained great media,
social, and cultural attention. Barack Obama, Joseph Biden, John McCain and Sarah Palin
brought individuality to the much followed campaign.
Elections are events which have historically brought women into the news media. A
study comparing men and women in legislative campaigns from 1969-1992 in Taiwan found
“…women are more likely to receive coverage of soft issues, like personal life and appearance
and men are covered more with hard issues such as laws and economic issues” (Shi, 1995).
Study of a Canada provincial election found a pattern of referring to females with
characterizations of “inability to win” and “incompetence” (Weins, 1996). When Elizabeth Dole
ran for the White House, a study (Media Report to Woman, 2000) found one in six stories about
Dole made a reference to her appearance. In Carol Mosley Braun’s (D-Illinois) run for the
United States Senate, it was not until the twenty-second paragraph of a major news article about
her that readers learned that she is an experienced lawyer, former prosecutor, and veteran state
senator (Rhode, 1995). In lieu of the 1992 “Year of the Woman” in politics, the fact still remains
that women were found to be significantly underrepresented in news media in the United States
(Gersh, 1993). Recently, Hillary Clinton and Sarah Palin’s presence in the media as candidates in
the run for the presidential and vice-presidential nominations gave even more press to women in
the media in regard to bias and sexism. A recent study concluded that Clinton was held to a
different standard than her opponent, Barack Obama even when the same theme was being
discussed. The language and wording used was quite different. Clinton’s campaign was
described with words such as “slashing, bruising,” or that she exhibited, “flashes of anger and
sarcasm” and “emotional overflows” (Avineri, 2009). A study by Heflick and Goldenburg (2009)
found that the media focused considerably on Palin’s appearance which contributed to a decrease
in intention to vote for her ticket.
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Face-ism, the theoretical framework for this research, is described as the degree to which
a photograph focuses on the human body versus the focus on the face. One study analyzed the
front covers of news magazines such as Time and Newsweek and found that cover photos of
women focused less on their faces and more on their bodies than their male counterparts (Dodd,
Harcar, Foerch, & Anderson, 1989). The same authors repeated the study on advertisements in
magazines to find comparable results. The face-ism effect suggests that important aspects of
identity are thought to be centered differently anatomically in women and men. For example,
when asked to draw a male and a female, participants completed drawings of men with very
prominent and detailed faces. However, while drawing women, they showed the full body and
drew the face with minimal detail. The authors also reviewed more than 1,700 published
photographs for a measure of face-ism for the tendency of news media to consciously or
unconsciously crop a photo in a certain manner. This study concluded this focus on the male’s
face highlighted the brain and thought activity. The accent on the woman’s body therefore
highlighted the physical aspects of her body focusing on weight, physique, and overall
attractiveness (Archer, Kimes, & Barrios, 1978). To confirm this concept of face-ism and to
show its powerful effect upon society, a study was conducted to test face-ism in online
newspapers in Latin America. Men were shown 70.8% of the time and women were shown
29.1% of the time in the online newspapers. It was concluded, “…published images of women
which tend to focus less on their intellect and more on their figures, may over time, contribute to
a general cultivation effect among media consumers that tends to symbolically devalue women
by cultivating images of them as less powerful than males and less able to serve in intellectual
roles (King, 2001). Other face-ism studies have concluded that among societies, facial
prominence of men has been much higher than women (Archer, Iritani, Kimes, & Barrios, 1983),
that face-ism is prevalent in broadcast television (Copeland, 1989), political candidates web sites
(Anderson, 2003), in online media (Price, 2001), in news magazines (Nigro, Hill, Gelbein, &
Clark, 1988) and that face-ism has racial ramifications such that Caucasians have a higher face-
ism rating than African Americans (Zuckerman & Kieffer, 1994).
HYPOTHESES
The aim of this research was to examine United States news and business magazine
photographic coverage of the four major presidential and vice-presidential candidates in the 2008
United States presidential general election including Democrat presidential candidate Barack
Obama, Democrat vice-presidential candidate Joe Biden, Republican presidential candidate John
McCain, and Republican vice-presidential candidate, Sarah Palin. Of particular interest was
whether published photographic images of the male candidates and the female candidate differed
in their presentations. Underpinning the research, was the face-ism theory, which posits that
mediated images of men tend to concentrate on the face, emphasizing power and intellect, while
mediated images of women more frequently depict more of the body, emphasizing the figure. It
was hypothesized, based on decades of face-ism research, that gender would have a significant
effect on how published images of the candidates in news and business magazines were cropped
on the body. It was further expected that male candidates would enjoy more visible page
placement and page prominence than the female candidate. Further research examined the effect
of the candidates on the dependent variables. Magazine differences were also examined.
571
H1: Photographic images of the male candidates will be more frequent than photographic
images of the female candidate in United States news and business magazines
during the 2008 presidential general election.
H2: Photographic images of male candidates will be cropped higher on the body more
frequently than photographic images of the female candidate.
H3: Photographic images of male candidates will more frequently land in prominent page
placement than photographic images of the female candidate.
H4: Photographic images of male candidates will more frequently have higher page
prominence than photographic images of the female candidate.
METHODOLOGY
Two coders examined published photographs of the four major presidential and vice-
presidential candidates in the 2008 United States presidential general election from Sept. 5, 2008
(the day after the Republican convention ended and shortly after Palin was presented as the vice-
presidential candidate) until Nov. 4, 2008 (election day). Magazines selected for analysis were
Newsweek, U.S. News & World Report, Time, Forbes, Business Week,and Money. The unit of
analysis was any published photograph of any of the candidates in the non-advertising sections
of the magazines. A total of 331 photographic images of the candidates were published during
the time period. In cases where more than one candidate appeared in a single photograph, each
photographic image of each candidate within that photograph was analyzed separately.
A limitation was that the magazines were a convenience sample, but all were among the
top circulation news and business magazines published in the United States. Nevertheless, the
findings cannot be generalized to all news and business magazines.
Independent variables were gender, candidate (Obama, Biden, McCain, or Palin) and
magazine (Newsweek, U.S. News & World Report, Time, Forbes, Business Week or
Money).Dependent variables were page placement (cover, section front, or inside page), page
prominence (entire page, top half, or bottom half), and body index scale (1= head/face/eyes, 2=
head, neck and shoulders, 3= chest up, above breastline, 4= waist up, 5= below waist, hips,
above knees, or 6= legs, at or below knees, feet or full body). The body scale index measured
where on the body the photo was cropped.
Two experienced coders achieved 100 percent agreement on all variables except page
prominence and the body scale index, on which they reached 90 percent agreement. Chi-square
tests for statistical significance were used to test all hypotheses. With a sample size of 311, the
probability level was set at .05.
RESULTS
Chi-square analyses were used to test the hypotheses on the nominal data. Data were
collapsed on some variables due to a few low frequency cells. H1: Photographic images of the
male candidates will be more frequent than photographic images of the female candidate in
United States news and business magazines during the 2008 presidential general election. At first
glance H1 appears to be supported. As seen in Table 1, more than two-thirds of the published
photographs were of male candidates. Face-ism studies have consistently found that about two-
thirds of mediated images are of men, and one-third are of women. However, a breakdown by
candidates, as shown in Table 2, reveals that McCain and Obama, both males, had only slightly
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larger percentages of published photos than Palin, the female vice-presidential candidate on the
Republican ticket. Biden, the male vice-presidential candidate for the Democrats, had the lowest
percentage of published photos. Palin appears to have had more than four times as many
published photos as her male counterpart, Biden, and only slightly fewer than Obama, the
Democrat presidential candidate and McCain, her Republican running mate. It could be argued
that Palin may have received a larger percentage of photographs than expected since she was one
of four candidates, with 29.6% percent of the published photographs featured her image. Her
photographs certainly outnumbered those of her Democratic counterpart Biden, who was seen in
5.7% of the published photographs.
TABLE I: Frequency of Candidates by Gender

Gender Frequency Percentage
Male 234 70.7%
Female 97 29.3%
Note. n= 311
TABLE II:Frequency of Candidates

Candidate Frequency Percentage
McCain (male) 112 33.8%
Obama (male) 102 30.8%
Palin (female) 98 29.6%
Biden (male) 19 5.7%
Note. n= 311
A breakdown of gender by magazine yielded interesting results, as Table 3 shows. The

apparent equity in published photographs between the male candidates and the female candidate
appears to be attributable to one magazine, Newsweek. More than 82 percent of the images in
U.S. News & World Report, Time, and Forbes/Business Week/Money were of the male
candidates. Separate tests showed there were no statistically significant differences between
news magazines and business magazines.
TABLE III: Magazine Collapsed by Gender

Magazine Male Female
Newsweek 60 60
50.0% 50.0%
U.S. News & World Report 24 5
82.8% 17.2%
Time 132 29
82.0% 18.0%
Forbes/Business 18 3
Week/Money 85.7% 14.3%
Note. n= 311; chi-square= 39.04; df= 3; p= <.001
H2: Photographic images of male candidates will be cropped higher on the body more
frequently than images of the female candidate. H2 was supported, as seen in Table 4.
Photographic images of male candidates were more frequently cropped to show the
head/face/eyes (27.8%), head/neck and shoulders (28.2%) and chest up/above breastline (14.5%)
than photographic images of the female candidate. Photographic images of the female candidate
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were more frequently cropped at the waist up, below waist/hips/above knees and legs/at or below
knees/feet/full body than images of the male candidates. This indicates that photographic images
of the male candidates more frequently were cropped at the upper regions of the body,
emphasizing intellect and power, while photographic images of the female candidate were more
frequently cropped at the lower regions of the body, emphasizing the figure. These findings
mirror results from face-ism studies of mediated images of men and women over the past several
decades.
TABLE IV: Gender by Body Index

Legs/
Head/ Head/ Chest Below Waist/ At or Below
Face/ Neck/ up/Above Hips/ Knees
Gender Eyes Shoulders Breastline Waist Up Above Knees Feet/Full body
Male 65 66 34 28 19 22
27.8% 28.2% 14.5% 12.0% 8.1% 9.4%
Female 19 18 11 14 21 14
19.6% 18.6% 11.3% 14.4% 21.6% 14.4%
The face-ism effect is even more evident in a comparison across candidates, as Table 5
demonstrates. The male candidates were seen in published photographs cropped at the
head/face/eyes/head/neck shoulders regions more frequently (Obama 56.9%, McCain 56.3%, and
Biden 47.4%) than the female candidate (Palin 38.8%). Conversely, photographic images of
Palin, the female candidate were more frequently cropped below waist/legs/at or below
knees/feet/full body regions (35.7% for Plain, Obama 15.7%, McCain 20.5%, and Biden 10.5%).
TABLE V: Candidate by Body Index (Collapsed)

Head/Face/Eyes Chest up/Above Below Waist/Legs/
Head/Neck/ Breastline/ At or Below Knees
Candidate Shoulders Waist Up Feet/Full body
Obama (male) 58 28 16
56.9% 27.5% 15.7%
Biden (male) 9 8 2
47.4% 42.1% 10.5%
McCain (male) 63 26 23
56.3% 23.2% 20.5%
Palin (female) 38 25 35
38.8% 25.5% 35.7%
H3: Photographic images of male candidates will more frequently land in prominent page
placement than photographic images of the female candidate. As Table 6 indicates, H3 was not
supported. Photographic images of male candidates appeared on the cover of the magazines
slightly more frequently than photographs of the female candidate, but photographs of the female
candidate appeared more frequently on section fronts and less frequently on inside pages. In any
case, the differences here were not significantly different statistically. A similar result was found
when examining page placement of published photographs among the four candidates.
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TABLE VI: Gender by Page Placement
Section Inside
Gender Cover Front Page
Male 14 23 197
6.0% 9.8% 84.2%
Female 5 17 75
5.2% 17.5% 77.3%
Note. n= 311; chi-square= 3.84; df= 2; p= n.s.
H4: Photographic images of male candidates will more frequently have higher page
prominence than photographic images of the female candidate. H4 was not supported, as Table 7
shows. Male candidates enjoyed page prominence, with their photographs in the prominent
position, the top half of the page, slightly more frequently than the female candidate, but the
male candidates had a higher percentage of photographs in the bottom half of the page as well.
Moreover, the female candidate had almost twice the percentage of full page photographs
published as the male candidates. Again, these differences were not statistically significant.
Similar results were found when examining page prominence among the four candidates.
TABLE VII:Gender by Page Prominence

Gender Top Bottom Full Page
Male 136 83 15
58.1% 35.5% 6.4%
Female 54 31 12
55.7% 32.0% 12.4%
Note. n= 311; chi-square= 3.30; df= 2; p= n.s.
DISCUSSION
This research has shown how each candidate was visually portrayed in the media,
specifically news and business magazines, during the general election phase of the 2008 United
States presidential election.
As expected from previous studies of mediated images of men and women, the face-ism
effect was strongly supported in this research. Photographic images of the male candidates were
more frequently cropped at the head/face/eyes, head/neck and shoulders and chest up/above
breastline than photographic images of the female candidate. Conversely, photographic images
of the female candidate, Palin, were more frequently cropped at the waist up, below
waist/hips/above knees and legs/at or below knees/feet/full body than images of the male
candidates. According to the face-ism theory, this strongly suggests that media presentation of
images of male candidates at the upper regions of the body is placing emphasis on intellect and
power. At the same time, mediated images of the female candidate, which were more frequently
cropped at the lower regions of the body, focused attention on her figure. The face-ism effect
was even more strongly evident when examining the visual portrayals among the four individual
candidates. Images of Palin were cropped at below the waist/legs/at or below knees/feet/full
body much more frequently than images of any other candidate.
However, the expectation that the male candidates would appear more frequently on
average than the female candidate was not supported. In fact, Plain clearly was seen much more
575
frequently than her Democratic counterpart, Biden. Her images were almost as frequent as the
presidential candidates, Obama and McCain. Gender equity, on the other hand was only really
evident in one magazine, Newsweek.
The hypothesis that images of the male candidates would more frequently land in
prominent page placement than the female candidate was not supported. Actually, the percentage
of Palin’s image on section fronts was almost twice as high as the percentage of the images of
the male candidates in that preferred location.
Images of the male candidates also did not appear more frequently in prominent positions
on the page as was hypothesized. In fact, images of Plain were displayed as full pages at almost
twice the percentage of images of the male candidates.
Overall, Palin was seen much more frequently than her male, Democratic counterpart,
Biden. She also enjoyed better page placement and page prominence with her images displayed
in section front pages and as full pages at higher percentages than the male candidates. These
could be construed as positive visual results for Palin. However, when Palin was depicted
visually, the emphasis was on the lower regions of the body, emphasizing her figure, while
mediated images of the male candidates tended to focus more on the upper regions of the body,
emphasizing intellect and power. These mediated images might have had an impact on reader
perceptions of the candidates.
REFERENCES
Anderson, B.J. Visual Framing: A Study in Face-ism from the Websites for the 108th United
States Congress. Masters Thesis, East Tennessee State University, 2003. Retrieved April
4, 2009 from http://etd-submit.etsu.edu/etd/theses/available/etd-1104103-
212523/unrestricted/Anderson B112603f. pdf
Anonymous. “Reporter’s Coverage of Women Candidates Remains Problematic, Studies Say.”
Media Report to Women, 28, (4) Fall 2000, 1-4.
Archer, D., Kimes, D.D., and Barrios, M. “Face-ism.” Psychology Today, 1978, 65-66.
Archer, D., Iritani, B., Kimes, D.D., and Barrios, M. “Face-ism: Five Studies of Sex Difference
in Facial Prominence.” Journal of Personality and Social Psychology, 45, 1983, 725-735.
Avineri, N. Language and Gender: The Mass Media’s Portrayal of Two U.S. Presidential
Candidates. Thinking Gender Papers, UCLA Center for the Study of Women, University
of California at Los Angeles, 2009. Retrieved April 6, 2009 from
http://repositories.cdlib.org/cgi/viewcontent.cgi?article=1174&context=csw
Copeland, G.A. “Face-ism and Primetime Television.” Journal of Broadcasting & Electronic
Media, 33, 1989, 209-214.
Dodd, D.K., Harcar, V., Foerch, B.J., and Anderson, H.T. “Face-ism and Facial Expressions of
Women in Magazine Photos.” The Psychological Record, 39, 1989, 325-331.
Gersh, D. “Women Still Underrepresented.” Editor and Publisher, May 15, 1993, 20-21.
Heflick, N., and Goldenberg, J. “Objectifying Sarah Palin: Evidence that Objectification Causes
Women to be Perceived as Less Competent and Less Fully Human.” Journal of
Experimental Social Psychology, 2009, in press.
King, J.M. “Men’s Heads and Women’s Bodies: Face-ism in Photographs Published by Online
Newspapers in 17 Latin American Nations.” Paper presented at the AEJMC/ASJMC
International Colloquium, Mexico City, Mexico, Jan. 11, 2001.
576
Rhode, D.L. “Media Images, Feminist Issues.” Signs: Journal of Women in Culture and Society,
20, 1995, 685-710.
Nigro, G.N., Hill, D.E., Gelbein, M.E., and Clark, C.L. “Changes in the Facial Prominence of
Women and Men over the Last Decade.” Psychology of Women Quarterly, 12, 1988,
225-235.
Price, K. Male Visual Dominance Continues: A Global Study of Images of Men and Women in
750 Online Newspapers in 74 Nations. Masters Thesis, East Tennessee State University,
2001. Retrieved April 2, 2009 from http://etd-submit.etsu.edu/etd/theses/available/etd-
1106101-084245/unrestricted/pricerankin111601.pdf
Shi, C-F. Representation of Gender in Mass Media in the Light of Bourdieu’s Capital: News
Coverage of Female Candidates in Political Campaign. A Case Study of Newspaper
Reporting on Legislature Campaigns in Taiwan from 1969 to 1992, 1995, Ph.D.
Dissertation, Temple University.
Weins, A.J. Trampled in the Chaos: The Gender Stereotyping of Provincial Party Candidates in
the Nova Scotia Print, Masters Thesis, Acadia University, Canada, 1996.
Zuckerman, M., and Kieffer, S. “Race Differences in Face-ism: Does Facial Prominence Imply
Dominance?” Journal of Personality and Social Psychology, 66, 1994, 86-92.
577
FROM VISITORS TO CULTURAL AMBASSADORS:
PUBLIC DIPLOMACY AND SCHOLAR EXCHANGE PROGRAMS
H. Efe Sevin, Emerson College

hasan_efe_sevin@emerson.edu
ABSTRACT
This paper introduces the possibility of transforming visitors to cultural ambassadors

through a specific public diplomacy method: scholar exchanges. The findings are discussed on
an analysis of foreign Fulbright Program of the United States. To further interpret the
perceptions of the program, a survey is conducted among 59 current Fulbrighters. Scholar
exchanges tend to be effective tools in overcoming the barriers in international and intercultural
communication processes. Therefore, the participants of these programs might be encouraged to
act as cultural ambassadors.
INTRODUCTION
This paper sets out to discuss fundamentals of public diplomacy and how scholar
exchange participants can act as cultural ambassadors in international communication. The
United States has been carrying out a considerable amount of international exchange programs.
Hence, for a closer view on the effectiveness of scholar exchange programs as a communication
method, the Foreign Fulbright Program will be analyzed as a case study. An online survey was
run among 59 current Fulbright scholars and they were asked for their perceptions of the
program. Lastly, other current government scholarships and the possibility of further countries
implementing similar programs as part of their public diplomacy attempts are presented in order
to explore the future of the scholar exchanges and new kind of diplomatic corps.
A long discussed term, “public diplomacy” is becoming more and more important in
foreign policy agendas (Bryson, 2009). A prominent visionary, Senator J. William Fulbright is
quoted as saying “[T]he shape of the world a generation from now will be influenced far more by
how well we communicate the values of our[American] society to others than by our[American]
military or diplomatic superiority” back in the 1960s. Since then, concerns over the process of
communicating values to international audiences have increased to a great extent. The Public
Diplomacy Council (2005) advised the U.S. government to “increase public diplomacy efforts
overseas by enlarging its task force by 300 percent over the next five years, training staff and
allocating more financial resources for international broadcasting and exchange programs in
order to deliver the American messages more successfully.”
The main focus of this paper is international scholar exchange programs where scholars
and faculty members are hosted in a foreign country. These programs are considered to be
prominent in today’s global environment as the need “to collaborate on projects across
borders….has become increasingly important and desirable” (Teng, 2007). Cultural awareness
and international networks are created with the help of the scholar exchanges.
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WHAT IS PUBLIC DIPLOMACY?
The traditional understanding of diplomacy refers to relationships between states and

interstate organizations carried out by official diplomatic corps. Public diplomacy, on the other
hand, involves an attempt on the part of the state to reach the foreign publics and influence
public opinion. Fortner (1994, p.89) describes public diplomacy as an attempt to win the hearts
and minds of people. Public diplomacy is built on “intensive exchange of information,
neutralization of clichés and prejudices about one’s nation” (Plavsak, 2002, p.113). Only by
sustaining two-way communication bridges and creating dialogues between nations, it is possible
to change the perceptions of foreign publics. In practice, public diplomacy includes core
programs which reach international audiences, such as broadcasting and information activities,
cultural affairs and international exchanges (The Public Diplomacy Council, 2005).
The need for public diplomacy is obvious. In the era of globalization, states must pay
attention to public opinion in other states. Zaharna (2001) cited former President Bush as
accepting that the U.S. government was not doing a very good job of getting its message out,
while speaking about American efforts to reach Arab and Muslim audiences. This confession
demonstrates that international communication processes are on the agenda of even the highest
level politicians and governors. In other words, governments try to “influenc[e] public opinion to
[their] advantages ….targeting various groups in other countries, [and] strategically planning for
diplomatic (communication) activities” (Plavsak, 2002, p.113). Unlike traditional diplomacy,
public diplomacy offers a government-to-people or people-to-people communication method and
enables them to target the aforementioned various groups. Scholar exchange programs are likely
to be an effective method in reaching the public and influencing their opinions because of three
main reasons: persuasion, the profile of participants and the cultural aspect.
Traditional diplomacy and broadcasting-based public diplomacy are one-way
communication methods, where the participants are subjected to the messages delivered by the
officials. In these one-way communication methods, there is the possibility of adding a “gate-
keeper” to the process and of disseminating selective messages. Hence these messages might be
disregarded by the receivers because of the lack of sender’s credibility (lack of ethos). However,
when a scholar is given the opportunity to get involved within the society, he or she can
personally arrive at conclusions about the society and its values. As conclusions are based on
personal experiences, credibility will not be an issue. The scholars will be exposed to the same
environment as the local residents of the host country and will enjoy the opportunity to build up
personal reflections.
Scholars and faculty members are the intellectual and influential people in their home
countries. Therefore, they are more likely to share their ideas with a larger number of people
upon finishing their exchange programs. In other words, by inviting the scholars, the host
country implicitly entitles them as its honorary messengers. As the host country itself might be
lacking ethos, it will be easier for the influential local figures to further communicate the
message. A similar approach was implemented by Britain during World War I. Instead of
communicating with the masses directly, British officials decided to reach public figures in the
U.S., particularly those in influential positions in government, business, education and the media
(Taylor, 2002, p.178). The goal was for such individuals to help build communication bridges
between the British government and the American public.
International communication processes always suffer from cultural barriers. Although
cross-cultural awareness is on the rise and communication specialists are trying to be more
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sensitive about culture, these issues still stand as problems in the communication processes. By
creating personal experiences instead of fabricating messages and creating strategies from a
central headquarters, scholar exchanges help public diplomacy to avoid cultural obstructions in
the communication processes.
In short, this paper defines public diplomacy as the attempts of governments to influence
foreign publics, and in doing so challenging the prejudices and stereotypes about their own
values and attitudes in other countries. Scholar exchange is an important, but not the sole method
which can be used in public diplomacy. Such exchange programs involve hosting scholars and
faculty members in the country for academic purposes.
A CASE STUDY: FOREIGN FULBRIGHT PROGRAM
The mere existence of The Bureau of Educational and Cultural Affairs under the U.S.
Secretary of the State (ECA) shows how valuable scholar exchanges are in American foreign
policy. According to Bureau statistics, over 250 current and former heads of state and
government are alumni of ECA programs. When we take Ross’ (2002) claim that the U.S.
government will benefit from having exposed an individual to U.S. society, values, and the
company of U.S. peers, it is possible to argue that ECA has been carrying an important public
diplomacy mission successfully. Among these ECA programs, the Fulbright Program remains
the flagship government-sponsored exchange (Ross, 2002).
As of 2010, the Fulbright Program reported 255,000 alumni from more than 150
countries since the program started in 1946. Among these alumni, there are 39 Nobel Prize
Winners, 1 Secretary General of the United Nations and 1 Secretary-General of the North
Atlantic Treaty Organization. After the World War II, the Fulbright program was started to
improve mutual cultural exchange between the U.S. and the rest of the world. The Foreign
Fulbright Program invites nearly 1,800 scholars annually to continue their studies in institutions
throughout the U.S., and 3,200 new and returning scholars study in the U.S. in a given year.
As explained by the ECA (n.d.), Fulbrighters are expected to continue program ideals:
Throughout the history of the Fulbright Program, Fulbrighters have exposed their
host communities to new cultures and ideas. In turn they have taken their
experiences back to their home communities and shared them with family,
friends, and peers. This cultural exchange is an important part of the Fulbright
Program’s mission to promote mutual understanding. In addition to academic
endeavors, Fulbrighters have a unique opportunity to make a valuable
contribution to their host and home communities through participating in
community activities abroad and sharing their experience upon returning home.
What makes the Fulbright program different than any other scholarship program is the
fact that the identity of being a Fulbright alumnus stays with the scholars after they return to their
home countries. This identity is the main aspect which makes the Fulbright program a public
diplomacy effort rather than solely an academic exchange. The Foreign Fulbright Program is
supervised by a board of twelve people, appointed by the President of the United States. The
current chairwoman is a former communication specialist. Shortly speaking, the U.S.
government is trying to protect the program’s public diplomacy features through close
supervision.
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The Fulbright Association was founded by Fulbright alumni in 1977, and has served as a
global alumni organization since then. Currently the association has more than 9,000 members
(Fulbright Association, n.d.). The Fulbright Association also works closely with more than 70
national Fulbright alumni organizations (Fulbright Association, n.d.). In other words, the alumni
protect their ties with the Fulbright program.
INSIGHT FROM CURRENT SCHOLARS
During an impressionistic study, 59 current foreign Fulbright scholars were contacted and
were asked their opinions about the program in an online survey. There were six compulsory
multiple choice and ranking questions and two open ended optional questions. The response rate
in the open ended questions was 83% (49 responses).
The first two questions asked about participants’ prior visits to the U.S., and whether the
Fulbright program helped them to decide on coming to the U.S.; 69.5% (41) of the scholars
stated that they were visiting the U.S. for the first time; 83% (49) of the participants said that
Fulbright program was effective in their decision to study in the U.S. This clearly shows that the
Fulbright program’s existence makes U.S. institutions more attractive to study for foreign
scholars.
The following question focused on the main source of information about the U.S.
(government, people, lifestyle, etc.) before the scholar’s visit. There were nine multiple choice
answers and an open ended “Other” option, which was filled in by 0.5% (3) of the respondents.
All three answers pointed to prior visits to the country as the main source of information (The
answer choices provided in the question were Academic works, Curriculum, Literature,
Computer Games, Websites / Blog, Official Documents, Movies, Friends, Family members, and
Other). The top three answers were Friends 81.3% (48), Movies 71.1% (42), and Academic
Works 64.4% (38). Official documents were pointed out only by 0.3% (2) of the participants.
The data suggests that when gathering information about a foreign country, social networks and
narratives of personal experiences are more effective than official documents – further
supporting the importance of public diplomacy in international communication.
The next two questions were open-ended and asked the scholars to identify the mental
impressions they had of the U.S. prior to and after their Fulbright experiences. Although neither
negative nor positive prior images dominated, some of the phrases used to describe American
society included “lonely people, obesity, over-commercialization, consumption-driven society,
competitive capitalism, terrible public education” and “positive perception not regarding the U.S.
international policy abroad but about the academics and lifestyle, very civilized and advanced
nation”. After the personal experience, the perceptions included “ethnically diverse, small-town
culture, large cities and small town differences, systematic and hardworking people”. There were
in fact two important qualitative outcomes. Firstly, the after images were explained more in
detail with real life cases. Secondly, as all the scholars were in the U.S. during the 2008
Presidential Elections, the phrases of “change” and “hope” were often used in describing the
after image. In other words, the exposure to the culture helped the scholars to use their own ideas
in describing the American society through real life experience. The fact rich expressions suggest
that the scholars are being integrated to the society and trying to understand the dynamics.
Another scale question asked the scholars to rate the change between the images they had
of the U.S. prior to and after their visits on a scale of 0 to 10. The average turned out to be 4.87.
However, 25.4% (15) of the responses were 2 and below and 33.8% (20) of the responses were 8
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and over. The rest of the responses did not show any significant pattern. On the other hand, when
the respondents were asked to rate the effectiveness of their U.S. experience in cultural and
social terms on the same scale, 66% (39) of the responses were 8 and over. Evidence suggests
that the U.S. experience will affect the way scholars live even after they return to their home
countries.
The last question was: “Following your return to your home country, what aspect(s) of
the American experience will you value the most?” There were seven choices and an open ended
other option (Academic methods, Arts, Daily life habits, Human Rights concepts, Music, Social
life, Theater, and Other). The "other” option was used twice. One respondent discussed
professionalism and the work ethic, while the other pointed out diversity and tolerance. 59.3%
(35) of the responses identified “Academic methods”, which was followed by “Daily life habits”
by 35.6% (21). The scholars are willing to take home what they have been practicing in the U.S.
To summarize the findings of the survey:
• The Fulbright program gives U.S. institutions a comparative advantage in recruiting

qualified foreign scholars.
• Regardless of their prior views of U.S., the scholars become integrated into the
society and try to understand the values and dynamics.
• Scholars’ views of the U.S. do not necessarily change during their stay in the U.S.;
however, their experiences in the U.S. change their lives in social and cultural terms.
• The scholars are willing to take what they have been practicing in the U.S. back to
their home countries.
OTHER CASES
The American government is not the only government using scholar exchanges
tocommunicate its messages. The Japanese government continues the Monbukagakusho
scholarship program since 1954; the British government provides the Chevening scholarship;
and the European Union allocates considerable financial resources for the Jean Monnet program.
All of these scholar exchange cases have two goals in common: to attract the scholars to their
countries and to provide more accurate images of their societies. Yet, the fields of study and the
nationalities of the participants change with regard to the host country. The Jean Monnet
program looks for scholars in the field of European Integration; the Chevening program
explicitly announces its focus countries as “China and India, countries which are going to be
most important to foreign policy over coming years” (Foreign and Commonwealth Office, n.d.);
the Monbukagakusho scholarships are focused on technology related researches. The European
Union, Japanese, and British governments defined their policy objectives and key audiences and
implemented the scholar exchange programs in order to disseminate their messages.
CONCLUSION: FROM SCHOLARS TO AMBASSADORS
We live in the era of globalization. Soft power (Nye, 2004) and public diplomacy are
becoming important tools in international relations and are becoming top priorities in
governmental agendas. In this context, every government has to consider the images of their
countries in other parts of the world. An accurate image and positive public opinion towards a
country will facilitate relations between the countries and the societies. Not only democratic
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states, but also “the non-democratic states must take public opinion into account” (The Public
Diplomacy Council, 2005) in international relations. By engaging in public diplomacy attempts
and creating government-to-people or people-to-people communication bridges, it is possible to
reach out to foreign publics. And “[e]ven in those remaining nondemocratic and authoritarian
societies with state-controlled media, public diplomacy programs have proven to be effective in
affecting public perceptions” (The Public Diplomacy Council, 2005).
In this context, scholar exchanges are important because these programs, besides creating
international academic networks, help to build up accurate images of the host countries.
Moreover, exchanges increase the understanding of cultural awareness, both in the host countries
and the home countries, as scholars are expected to share their experiences upon their return.
Scholars are influential people in their home societies, who have ethos in the eyes of the local
people and who have the possibility to reach large groups of people. In the case of Fulbright,
these scholars are expected to be “the representative of their countries as well as persons with
some sense of social responsibility” (Johnson & Colligan, 1965 p.40). Thus, they are better
messengers than the traditional diplomacy corps, who may lack credibility and connections.
As discussed in the case of the Fulbright program and the other cases, several countries
are using scholar exchanges as a method to influence public opinions in various countries. What
is suggested in this paper is that this method is effective, and if used by more countries, it will be
beneficial not only for the creation of a more accurate image of the respective country, but also
effective for raising cultural awareness universally.
Rui-min (2009) underlines the importance of Fulbright Language and Teaching Assistant
program in creating cultural ambassadors both in host and home countries. By “giving
presentations, teaching songs, watching movies, organizing free tea or coffee breaks, and holding
free talks” (Rui-min, 2009, p.31), scholars introduce their cultures to the host society. In a similar
fashion, upon their return, they are likely to share their foreign experiences within their societies
as the results of the survey suggest.
Mendelsohn and Orenstein’s (1955-6) research during the very first years of the Fulbright
scholarships show that exchange experiences “become media through which experiences abroad
can be passed on to [home] community” (Mendelsohn & Orenstein, 1955-6, p.405). Cultural
ambassadors create a credible medium for governments to disseminate their messages among
foreign publics. The same research underlines the potential for “enriching and stimulating the
scientific, social, cultural knowledge and life.” Thus, it is important to consider the non-
academic outcomes of scholar exchanges. If a visitor can be transformed into a cultural
ambassador, new communication bridges, partnerships, networks, shortly dialogues (Riordan,
2004) can be created between the host and home societies.
Therefore, all governments that are interested in fostering their foreign policies, and that
are capable of sustaining such exchange programs, should build up their own exchange programs
by taking their target audiences and key fields of study into consideration. Both President Barack
Obama and Secretary of State Hillary Rodham Clinton “have sent clear signals that education
exchange is a crucial aspect of the U.S. international agenda” (McMurtrie, 2009). These
programs can increase mutual and global cultural awareness and eventually contribute to world
peace, just like any other successful diplomacy attempts. International experiences are likely to
increase the curiosity of the scholars and to encourage them to go abroad again (Hermes, 2009).
Exchange programs should focus on encouraging scholars to become cultural ambassadors and
to build up communication opportunities between societies.
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J. William Fulbright espoused this principle in his speech on June 26, 1986 by saying that
“I'm sure that President Johnson would never have pursued the war in Vietnam if he'd ever had a
Fulbright to Japan, or say Bangkok, or had any feeling for what these people are like and why
they acted the way they did. He was completely ignorant.” Fortunately, the necessary tool to
solve this problem of ignorance is readily available. Scholar exchanges are an invaluable
communication method in public diplomacy.
REFERENCES
Bryson, J. “Hillary Clinton, Public Diplomacy, and the Middle East.” Public Discourse.
Retrieved on January 25, 2009 from
http://www.thepublicdiscourse.com/viewarticle.php?selectedarticle=2009.01.20.001.pdar
t, 2009, January 20.
European Commission. “The Jean Monnet Programme for Understanding European integration.”
Retrieved on December 1, 2009 from http://ec.europa.eu/education/lifelong-learning-
programme/doc88_en.htm, n.d.
Foreign and Commonwealth Office. “Chevening Scholarships and Fellowships.” Retrieved on
December 1, 2009 from http://www.chevening.com/, n.d.
Fortner, R.S. Public Diplomacy and International Politics: The Symbolic Constructs of Summits
and International Radio News.Westport, CT: Praeger, 1994.
Fulbright Association. “About Us.”Retrieved on December 1, 2009 from
http://www.fulbrightalumni.org/olc/pub/FBA/cpages/about_us/about_us.jsp, n.d.
Hermes, J.J. “In California, 2 Small Colleges Abound in Fulbright Scholars.” Chronicle of
Higher Education,54, (9), 2007, 51.
Johnson, W., & Colligan, F.J. The Fulbright Program: A History. Chicago, IL: The University of
Chicago Press, 1965.
McMurtrie, B. “Fulbright Program Adapts to Obama Administration's Priorities.” Chronicle of
Higher Education,56, (9), 2009, A29.
Mendelsohn, H., & Orenstein, F.E. “A Survey of Fulbright Award Recipients: Cross-Cultural
Education and Its Impacts.” The Public Opinion Quarterly,19, (4), 1955-56, 401-407.
Nye, J.S. Soft Power: The Means to Success in World Politics.Cambridge, MA: PublicAffairs,
2004.
Plavsak, K. “Communicative Diplomacy for the 3rd Millennium.” Journal of Political
Marketing, 1, (2), 2002, 109-122.
Riordan, S. “Dialogue-based Public Diplomacy: A New Foreign Diplomacy
Paradigm?.”Discussion Papers in Diplomacy,95, 2004, 1-14.
Ross, C. “Public Diplomacy Comes to Age.” The Washington Quarterly,2, (25), 2002, 75-83.
Rui-min, F. “Fulbright Foreign Language Teaching Assistants acting as cultural ambassadors on
the campus.” Sino-U.S. English Teaching,6, 2009, 31-35.
Study in Japan. “Government-Sponsored.”Retrieved on December 1, 2009 from
http://www.studyjapan.go.jp/en/toj/toj0302e.html, n.d.
Taylor, P. Munitions of the Mind. Manchester, UK: Manchester University Press, 2002.
Teng, L.Y. “Collaborating and Communicating Online: A Cross-Bordered Intercultural Project
between Taiwan and the U.S”.Journal of Intercultural Communication,13. Retrieved on
December 1, 2009, from http://www.immi.se/intercultural/nr13/teng-2.htm, 2007.
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The Public Diplomacy Council. “A Call for Action on Public Diplomacy.” Retrieved on
December 1, 2009, from The Public Diplomacy Council and The Public Diplomacy
Institute http://pdi.gwu.edu/merlin-
cgi/p/downloadFile/d/7536/n/off/other/1/name/ACALLFORACTIONONPUBLICDIPLO
MACY01-2005prin/, 2005
U.S. Department of State – Bureau of Education and Cultural Affairs. “The Fulbright
Program.”Retrieved on December 1, 2009, from http://fulbright.state.gov/, n.d.
Zaharna, R.S. “American Public Diplomacy in the Arab and Muslim World: A Strategic
Communication Analysis.” Foreign Policy in Focus, pp. 1 – 4, 2001.
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CHAPTER 25
PUBLIC RELATIONS AND

CORPORATE COMMUNICATIONS
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WOMEN LEADERS IN BUSINESS: THEIR MOTIVATIONS AND CHALLENGES
Emma Daugherty-Phillingane, California State University, Long Beach

daughert@csulb.edu
ABSTRACT
This study is a content analysis of the topics in gender research on women leaders in
business, particularly those in public relations, with special attention to their motivations and
challenges in the workplace. Focusing on the trends of women in business from the 1950s to
present day, the paper analyzes the most pertinent issues affecting women as they attempt to
climb the corporate ladder. Some of these issues include the feminization of certain professions,
including those in mass communication, gender stereotyping, discrimination, the glass ceiling,
the balancing of work and family life, and workplace roles.
INTRODUCTION
Women’s Career Paths and the Glass Ceiling

The U.S. Department of Labor in 2008 reported that women constituted less than 10
percent of senior executives despite the surge of women entering management in the last 45
years. Title VII of the Civil Rights Act of 1964 prohibited employment discrimination based on
race and sex. In the early 1970s, feminist pressure for its enforcement assisted women in their
pursuit of management positions. In 1972, Congress passed the Equal Rights Amendment and
Title IX of the Higher Education Act, which prohibited sexual discrimination in school
admissions. Hence, female enrollment in business schools surged, which paved the way for
women’s subsequent movement into high-paying, male-dominated professional occupations.
This paper analyzes the literature surrounding women in the workplace and the glass ceiling,
particularly the feminization of the public relations practice.
According to Choi and Hon (2002), Hymowitz and Schelhardt were the first to report on
a glass ceiling, the invisible barrier faced by middle-management women who want to attain top-
level positions, in an article of the Wall Street Journal on March 24, 1986. Glass ceiling is a
metaphor for a barrier preventing women from advancing to the executive suite. The Department
of Labor in 1991 defined glass ceiling as “artificial barriers based on attitudinal bias that prevent
qualified individuals from advancing upward in their organization into management-level
positions.”
In a 1993 study of over 4,000 women by Korn/Ferry International, an executive search
firm, and the UCLA Anderson Graduate School of Management, five traits were most frequently
cited as being of greatest importance in becoming successful in the workplace: ability to make
decisions, concern for financial results, capacity for hard work, desire for responsibility, and
integrity. The number-one factor for the women’s success was political savvy and their greatest
obstacle to their success was gender bias as a result of being female. More than 90 percent
believed in the glass ceiling, and almost 80 percent said they had been sexually harassed.
Larwood and Wood (1995) interviewed 15 of 16 directors on the board of a large,
professional business women’s organization. The average woman worked full time for 24 years,
was 49 years of age, and was college educated. The participants in the study held a belief that
women naively see education and hard work as ways to get ahead. The women viewed men as
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more streetwise, less concerned about the firm’s interests, and better capable of using networking
and political tactics to succeed.
Interesting, according to Keaveny and Inderrieden (2000), pay and advancement may be
less important to women because women appear to be more satisfied with their compensation
than men. In another study, Bertrand and Hallock (2001), using the Standard and Poor’s
ExecuComp data set, found that women are under-represented in the top three occupational
categories (agriculture – mining, oil, construction – food, tobacco, textile) and the top four
occupation groups (chair, CEO, vice chair, and president). Although the researchers found
growth in women executives, from 1.3 percent in 1992 to 3.4 percent in 1997, results of their
study showed a gender gap in compensation among top executives (VP and up) to be at least 45
percent. Women are still under-represented in large corporations. The scarcity of female CEOs,
chairs, vice chairs and presidents accounts for some of this discrepancy, and women in their
sample were also much younger and had less seniority than men. Women, however, were found
to be virtually absent from the very top of the U.S. corporate world.
O’Neil, Hopkins, and Bilimoria (2008) examined research on women’s careers appearing
in academic journals from 1990 to 2008 in three areas – careers, management, and applied
psychology. Although the number of women striving to succeed in careers has grown
exponentially over the past decade, organizations are still male-dominated. Moreover, male-
dominated constructions of work and career success continue to dominate the research. Scholarly
articles addressing women’s career paths dealt with sexual harassment, career interruptions,
mentoring, networking, glass ceiling and sex-based discrimination, women’s leadership, and
corporate mobility. The researchers found that the bulk of empirical studies continued to rely
predominantly on traditional male-oriented career outcomes, such as position in the corporate
hierarchy, income, and wealth accumulation. Women’s, unlike men’s, opportunities to vie for
management positions were hindered by male hierarchies. Women who did advance to senior
levels were helped by encouraging support systems. Admirable management practices, such as
sharing responsibility and contributing to the development of others, reflect stereotypically
feminine behaviors, but these best practices are not publicly acknowledged as feminine.
Career Paths of Women Leaders in Business

Mainero (1994) interviewed 55 high-profile executive women, who broke through the
glass ceiling, about key events in the early stages of their careers that allowed them to become
fast tracked. The participants in her study learned the importance of earning the support of their
employees, the group whose support they needed most. She found that the women were alliance-
builders and astute observers of corporate culture. The women in her study experienced a
maturation process that fostered the learning of intricate political lessons.
Bierema (1996) conducted a qualitative case study that investigated how executive
women learn corporate culture. An organizational culture – an organization’s values, beliefs, and
rules about how things get done – is learned and passed down from seasoned members to
newcomers in an organization. The bulk of learning to be a manager in organizational setting
occurs through informal modes for both men and women. Women reported learning through
other people and have difficulty learning in organizations created and dominated by white males
throughout U.S. history.
Chambers (1999) randomly sampled 459 managerial and executive women, using the
Dunn & Bradstreet Information Services database. Executive women were defined as having
overall responsibility for an entire operating division within an organization and the subordinates
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within that division, whereas a manager has responsibility for a unit or department and its
subordinates. She found that men were significantly more satisfied with their job than women,
which may suggest that something is lacking in the preparation of many women for management
positions. Women with families, however, reported a higher level of job satisfaction than those
without families. Women with families also did not see family obligations causing conflict with
their jobs.
Blair-Loy (1999) categorized her participants in one of four career types: corporate
climbers, big fish in small- or medium-sized organizations, movers and shakers, and
entrepreneurs. In her sample, many of the entrepreneurs starting firms 15 years ago said they
were trying to bypass the glass ceiling in large companies and to accommodate their families’
needs. In contrast, those launching businesses more recently report they were motivated by the
desire to escape bureaucracies and to create new business opportunities.
Reitman and Schneer (2003) surveyed MBAs, who received their degrees from 1976 to
1980, three times over a 13-year period to examine differences between the “promised” career
path – the promise of lifetime employment – and a “protean” career path. A protean career path
is one in which the individual moves from company to company. The path is not directed by the
employer but by the needs and values of the individual. Women followed both paths but had
more career advancement on the protean path. Reitman and Schneer (2003) explained that “the
promised path never really applied to women. It was developed for the 1950s manager who was
almost exclusively a man who had a nonworking wife at home tending to his children” (p. 63).
Daily, Certo, and Dalton (1999) examined data from the Inc. 100 entrepreneurial high-
growth firms over a period of 10 years. The data revealed no progress in women’s representation
on boards or serving as CEO. They found no evidence that women were being groomed for
succession to CEO through their representation as inside directors. They found that in 1986, six
women were serving as inside directors, but in 1995, only five women were serving in this
capacity. “Based on these findings one conclusion might be that women have not only made no
progress in their actual ascension to the executive suite, but there is also no evidence that such
progress will be forthcoming for some time” (p. 27), thus the increased frequency of female
entrepreneurship.
In the 1990s, studies addressing gender and career paths surfaced, suggesting that women
are disadvantaged by social constraints and discrimination. Historically, men and women have
assumed different societal roles. Some jobs are considered more appropriate to men while others
are more suitable for women. The growth in entrepreneurship by women increased despite – or
because of – discrimination and stereotyping in the workplace (Mueller, 2004). Furthermore,
starting one’s own business is a way to bypass the glass ceiling (Wrigley, 2002).
Mattis (2004) studied women entrepreneurs and found four major reasons why women
leave organizations to start their own businesses: a desire for more flexibility, the presence of
glass ceilings, dissatisfaction with the work environment, and a lack of challenging
opportunities.
Women in her study sought challenging developmental opportunities to use their talents
and skills in creative and innovative ways. Predicting that women will continue to create their
own organizations if their present employers do not offer them flexibility and challenge, she
recommended that organizations support these needs by changing their organizational practices
and legitimizing various career paths and options for women.
Mueller and Dato-On (2008) found that women were seen as being more emotional and
nurturing while men were viewed as more aggressive and independent. Men were characterized
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as being able to get things done and possessing certain traits, such as confidence, logical
reasoning, and ambition. In contrast, traits describing women included tactfulness, interpersonal
sensitivity, and receptiveness to the needs of others – characteristics that reflect warmth and
expressiveness and considered more suitable for feminine occupations. Empirical research on
socialization and gender roles generally supports the proposition that women are more
cooperative and empathetic, and are more interested in the welfare of others and achieving
harmony in the group. The researchers found that women tend to place more value on
interpersonal relationships.
Women in Public Relations

In 1960, women comprised a quarter of the public relations practitioners. In 1968, student
societies in public relations formed, and women accounted for 34 percent of the membership
(Gower, 2001). In the 21st century, however, women comprise about 70 percent of the
practitioners in the public relations field (Aldoory & Toth, 2002; Aldoory & Toth, 2004; Sha &
Toth, 2005). In 2008, more than 80 percent of the undergraduates enrolled in public relations
programs in the United States were women. According to Grunig (2006), “the study of women in
public relations provides a superb model of women in the workplace as a whole” (p. 135).
In 1975, only 12 percent of the members of the Public Relations Society of America
(PRSA), the major trade association, were women (Gorney, 1975). Over a decade later, in 1989,
the Public Relations Journal, PRSA’s member publication, ran a story titled “Women
Practitioners: How Far, How Fast?,” which sparked one of the first debates to contribute to the
ideology that the profession would decline in terms of reputation and respect if it became
feminized (Lukovitz, 1989). Other fields, such as law, medicine, development, and pharmacy,
have seen an increase in the number of women entering the profession. Feminized professions,
such as banking, teaching, and nursing, have experienced a reduction in salary and status (Cline
& Toth, 1993). Sociologists have observed that when an occupation changes from predominantly
male to predominately female, men tend to concentrate in the highest paying and most
prestigious jobs. Oftentimes, as women become the majority, changes in the nature of work and
reward for the work occur (Creedon, 1991). Some scholars claim that public relations is a
feminized field and that women are ghettoized in technical positions, which garner lower pay
and prestige (Aldoory & Toth, 2002). Other scholars warn that women relegated to the
technician role are kept out of the boardroom, thus creating a “velvet ghetto” (Gower, 2001, p.
14).
Two influential research reports – The Velvet Ghetto (Cline et al., 1986) and Beyond the
Velvet Ghetto (Toth & Cline, 1989) – were commissioned by the IABC Research Foundation to
explore the effects of feminization. Both reports examined a breadth of gender issues, such as
salary disparity, the growing number of women in the field, gender roles, and gender bias.
Several major studies in recent years have looked at gender issues in public relations, including
gender discrimination, salary disparities, the glass ceiling, feminization in the field, and roles of
women as technicians. Some scholars suggest that the technician role may have been trivialized
and devalued, an area where many women are employed (Creedon, 1991). Technicians are not
seen as making organizational decisions. Rather technicians engage in technical tasks, such as
writing, editing, producing collateral materials, arranging special events, and pitching the media.
Managers, on the other hand, conceptualize and direct public relations programs. Some argue
that women are clustered in the technician role because they are attracted to the role, which may
be the result of socialization.
590
Weaver-Lariscy, Cameron, and Sweep (1994) surveyed 371 public relations officers in
four-year colleges and universities and found that of the 243 managers, 123 were men and 120
were women. The women saw themselves more as the conscience of the organization, whereas
the men viewed themselves as a dominant insider, “fully able to go head to head within the inner
circle over policies that affect the institution” (p. 137). Hon (1995) explored the factors
explaining discrimination against women in public relations. She found in her 37 long interviews
and three focus groups that women saw marginalization of the public relations function; a faulty
public relations undergraduate curriculum; a male-dominated work environment, including
exclusion from men’s networks; women’s undervaluing their worth; a lack of female role models
and mentors; a lack of knowledge about male-defined rules for advancement; outmoded
stereotypical attitudes of male superiors; lookism; and ageism as factors explaining
discrimination against women in public relations. Women were paid less than men, and men did
not share equally in domestic responsibilities. A later study by Aldoory and Toth (2002) also
found that women typically carried a disproportionate amount of responsibility for home and
family and had more demands on their time outside of work.
Lariscy, Sallot and Cameron (1996) reported that men and women view their professional
worlds differently. Men saw equal opportunities for advancement, witnessed less salary inequity
between the genders, and did not fear lower salaries as a result of women entering the field in
great numbers. On the other hand, women felt the opposite and did not perceive just and
equitable treatment across the profession.
Krider and Ross (1997) used a phenomenological approach to examine the roles and
experiences of seven women in public relations who were employed at a large public relations
firm in the Midwest. In their study, they found that women repeatedly mentioned “white male”
as dominant. Participants used terms such as “white male ego at the top of practically every
organization…very male dominated world…very heavily male dominated” (p. 444). The terms
that surfaced most were white male ego, superwoman, sexism, and glass ceiling. They also found
that women expressed a concern about juggling the roles of home and work. The women did not
appear to choose a career path that allowed them to spend more time with their families
Wrigley (2002) conducted a qualitative study, using in-depth interviews and focus
groups, to identify the factors supporting and perpetuating the glass ceiling for 27 female
managers in public relations and corporate communications. Examining her findings from a
feminist perspective, she suggested a new theoretical concept titled “negotiated resignation” (p.
37) for explaining the psychological process of denial that women use to come to terms with the
glass ceiling. Aldoory and Toth (2002) addressed a new theory that explained the gender
discrepancies in a gendered field. They found that men are favored in hiring, pay, and promotion
practices even after age, career interruptions, and years of experience were taken into account.
Some in their study argued that men are favored over women in hiring because so few men are in
the field. O’Neil (2003) conducted a study of 309 senior-level corporate practitioners and looked
at perceived organizational influence of men and women in corporate public relations. No
differences in gender were found in relationship power or influence. Women had less formal
structural power than men. Thirty-nine percent of men reported to a CEO, president, or
chairman, compared to 28 percent of the women.
Aldoory and Toth (2004) used a quantitative survey and focus groups to examine
perceptions of leadership styles and opinions about gender and leadership – particularly styles
considered most effective and appropriate in public relations and how perceptions of leadership
differ by gender. Focus group data supported survey results that showed a strong preference for
591
transformational leadership over transactional leadership. Transformational leaders were
described as charismatic, possessing vision, and having the ability to mobilize followers. Focus
group participants perceived women as making better leaders in public relations due to acquired
socialized traits of having empathy and being collaborative nature in nature, which are traits of
the transformational style of leadership. However, focus group participants also agreed that
women do not have the opportunities for leadership because of socialization and structuralism.
Hutton (2005) examined salary discrimination in public relations, claiming that no study
on the role of gender in public relations salaries had ever been conducted despite persistent
claims of salary discrimination in the field. Hutton questioned the legitimacy of claims of salary
discrimination and the investigative approaches of previous studies. Using responses from almost
5,000 respondents from PR Week’s 2001 e-mail salary survey, Hutton found that the average
salary for men was $15,000 higher than that for women. A step-wise regression analysis on the
data revealed that overall men in the survey were older, were more experienced, worked more
hours than women, and were more likely to be employed by higher-paying organizations and
public relations specialties.
Grunig (2006) conducted a content analysis of 500 articles over a 20-year period on
women in Public Relations Review and the Public Relations Research Annual/Journal of Public
Relations Research, the two leading scholarly journals in the United States. Grunig claimed that
most hypothesized studies which make distinctions between males and females are either
unsupported or weakly supported. She noted that some scholars believe “the work of women –
clustered disproportionately in the technician’s role – is trivialized and devalued. Instead, they
would argue (and I would agree) that we need to respect the preferences that become reflected in
the career choices of individual women in this postmodern era” (p. 120).
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MAJOR APPROACHES FOR THE CORPORATE SOCIAL RESPONSIBILITY
COMMUNICATION: AN OBSERVATION FOR TURKISH CORPORATE WEBSITES
1dil Karademirlida0 SUHER, Bahcesehir University

ikaradem@bahcesehir.edu.tr
ABSTRACT
Today, due to the worldwide economic conditions, the organizations are decreasing their
stakeholders' expectations and trying to achieve a balance among them. Organizations are
performing CSR activities according to their stakeholders’ expectations and transmitting those
activities to the stakeholders. The aim of the study is to indicate how the corporations in Turkey
are transmitting their own CSR principles and applications to the stakeholders and what basic
elements do assign this communication. The content analysis of the companies’ corporate
websites is conducted in the research. The results showed that four determinant factors effect the
CSR communication for the companies.
INTRODUCTION
The history of CSR applications goes back to Ottoman Empire. The Ottoman Empire
charitable foundation was used to generate the basic institutional mechanism of public services
such as education, healthcare and social security. Today, many of the family holdings in Turkey
have a charitable foundation. In this way, expectations of society take form according to
historical philosophy of charitable foundations and social awareness is equated with donations of
the companies and charity activities. The evaluation of the activities is not completely possible as
the amount of donation is not declared. (Göceno0lu & Onan, 2008) Besides charity, the need of
counting CSR in the all business processes is emerged in 2000s. Since then, companies started to
give importance to social responsibility phenomenon as they want to gain respect; to be preferred
by consumers and firms and to have sustainable expansion (www.capital.com.tr, 2008). In
Turkey, as the business world has the main role, it is especially important to discuss institutional
social responsibility applications which civil society examines and benefits from (Göceno0lu &
Onan, 2008). Organizations increasingly realize their own roles as “social actors” and instead of
perceiving environmental subjects as a threat; they take them as a part of daily routines. Briefly,
the determination of applications and models of communication process is also become
important issue.
LITERATURE REVIEW
Corporate social responsibility (CSR) has been a challenging topic in the business
community for more than 50 years. Wartick and Cochran (1985, p. 758) define corporate social
performance as an “integration of the principles of social responsibility; the processes of social
responsiveness; and the policies developed to address the social issues”. The theory has been
shaped and reshaped since 1950s till today. Early studies of Howard R. Bowen (1953)
established the concept of businessmen and the expectations of them in reference to society.
Joseph W. McGuire helped reshape the definition of CSR: “The idea of social responsibility
supposes that the firm has not only economic and legal obligations but also certain
595
responsibilities to carry society beyond these obligations” (Carroll, 1993, p.271). In another
definition of CSR, Carroll (1979, p. 500) explains that “the social responsibility of business
encompasses the economic, legal, ethical and discretionary/philanthropic expectations that
society has of organizations at a given point of time” (Carroll, 1979, p. 503). According to
Carroll (1979, p. 503), economics has the responsibility of the firm to maximize profits; legal
responsibilities such as laws and regulations and ethical responsibilities are the duties of the firm
to conduct business in accordance with social norms and customs. Discretionary or philanthropic
responsibilities are actions that are at the management's discretion and are in response to
society’s expectation that businesses have to be good corporate citizens. As previously stated, it
is appropriate to mention the stakeholder theory. Stakeholders are persons or groups that have, or
claim, ownership, rights, or interests in a corporation and its activities, past, present, or future.
Such claimed rights or interests are the result of transactions with, or actions taken by, the
corporation, and may be legal or moral, individual or collective. Stakeholders with similar
interests, claims, or rights can be classified as belonging to the same group: employees,
shareholders, customers, and so on (Clarkson, 1995, p. 106).Stakeholder theory has captured
significant attention in the field of CSR. This concept personalizes social or societal
responsibilities by delineating the specific groups or persons a company should consider in its
CSR orientation (Caroll, 1993, p. 290). Four main stakeholder classifications: “(a) organizational
(to include employees, customers, shareholders, suppliers and creditors); (b) community (e.g.,
local residents and interest groups); (c) regulatory bodies; and (d) media stakeholders” (Balmer
Fukukawa, & Gray, 2007, p. 10). Clearly, the definition of the stakeholder can be personalized
for each firm. This will be driven by, or will drive, the firms’ goals and objectives. The policies
and procedures that are made by the managers will direct the culture of the firm (Halpern, 2008,
p.32). Companies have to share their ideas with their stakeholders if they wish to be recognized
for their efforts. This study is based on the theories of Tang and Li (2009) which has explored
how leading Chinese and global companies operating in China and communicate their corporate
social responsibility (CSR) principles and practices to the Chinese stakeholders through a content
analysis of these companies’ corporate websites. It was found that companies usually take one of
the following three major approaches in their CSR communication: CSR as ad hoc public
philanthropy; CSR as strategic philanthropy; and CSR as ethical business practices. Another
study about this subject was made by Chapple and Moon (2005). Chapple and Moon study
examines CSR communication undertaken by the top 100 IT companies in India on their
corporate websites, with an analytical focus on the dimensions of prominence of communication,
extent of information, and style of presentation. Besides these studies, Maignan and Ralston’s
(2002) study suggests that companies around the world use their websites to demonstrate their
CSR behaviors. Since websites are the target of a wide range of stakeholders (Esrock & Leichty,
2000) they are a logical medium for companies to demonstrate their CSR behaviors in countries
with high internet use. The aim of the study is to find out the factors determine the CSR
communication behavior of the companies toward the stakeholders.
METHODOLOGY
The aim of this study is to identify the determinant factors of the corporate social
responsibility communication of leading Turkish corporations from the perspective of their
websites. According to this approach, the quantitative Content Analysis was used to figure out
596
the CSR communication factors in these leading companies’ corporate websites. Specifically the
following questions were determined according to the aim of the study:
RQ1 How do the leading Turkish companies communicate their corporate social
responsibility (CSR) principles and practices to the Turkish stakeholders?
RQ2 What are the major factors that affect the CSR communication in the Turkish
context?
Population and Sampling

The corporate websites of all leading companies in Turkey constituted the population in
the study. According to the aim of this study, “Turkey’s top 500 industrial enterprises 2008” list
was used. This list was published by The Istanbul Chamber of Industry (ISO). The first 360
corporation was chosen with purposive sampling from this list. In the end of this selection, it was
found out that 13 corporations do not allow publishing their names in the list and 25 corporations
do not have websites. The coding was made in a total of 322 corporation websites.
Data Collection Procedure

The definitions used in content analyses are operational definitions, which use operations
and indicator to define concepts (Berger, 2000, p. 184). So, one of most important point of this
research is to determine the unit of analysis and make the other operational definitions. Each
corporate website was determined as a unit of analysis. The Codebook that was used in this study
was adapted from the CSR study of Tang and Li (2009) which was based the on the previous
studies of Chapple and Moon (2005) and Maignan and Ralston (2002) and Carroll (1999). The
Codebook was adjusted and updated to incorporate new themes and practices of CSR based on
the reading and interpretation of the websites until no new themes appeared. As a result, the ﬁnal
codebook was both theoretically and empirically based. The Codebook have six parts, these are:
- Basic Information of companies such as their industries, target market and business area;
Rationales of CSR, using the typology of economic, legal, ethical and discretionary
rationalities (Why)
- CSR themes and initiatives that companies engage in for their publics, customers,
employees, suppliers, shareholders (What)
- For Publics: Financial assistance to education, sports, arts and culture, development and
poverty relief, disaster relief, environmental conservation, health and disability, younger
generation, seniors
- For Customers: Product quality and product safety.
- For Employees: Employee health and safety, employee welfare, employee development
and equal opportunities for employees
- Practices of CSR, such as, through company policy, CSR report, donation, foundation,
volunteering, and building partnerships with NGOs, universities, and governmental
agencies, award, sponsorship (How)
- Timing of CSR, such as Traditional holidays, Governmental holidays, Event-Based
(natural disasters), (When)
- Global CSR, whether companies discuss global CSR on their websites (Where)
All these 37 items in the codebook expect basic information about companies, measured the
why, what, how, when and where of the CSR.
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In order to attribute the information in websites to the defined categories two coders were
used in the data collection. To increase inter-coder objectivity, the coders were briefed by
explaining to them the nature and the meaning of the classification criteria and the categories
used and by rehearsing the classification task by means of some advertisements that were
included in the final sample (Kolbe & Brunett, 1991, p. 245). Coding form was pre-tested after
the training of the coders. The necessary refinements were made according to the results of the
pilot study. After that, the coders received coding sheet for every advertisements in the sample
and each coder attributed advertisements to the defined categories. The items that show no
agreement between coders where resolved by referee. Each item in the code is coded as “yes” or
“no.” It is not taken into consideration the frequencies each item appears on companies’
websites.
Cohen’s Kappa coefficient for categorical data (nominal scale variables) was computed
for reliability tests among the coders. Two coders coded 50 websites which were chosen other
than the original sample. Calculated inter-coder reliability for nominal questions (Cohen’s
Kappa) is 91,04 %. Reliability coefficient among the coders was 85% limit suggested by
Kassarjian (1977). According to the inter-coder agreements, the study is reliable. Finally, the two
coders divided the companies in the sample and each coded half of them. They coded a final
sample of 322 websites.
RESULTS
A preliminary examination of the websites in Turkey’s top 500 industrial enterprises

2008 list revealed that 87.27% of the businesses were Turkish, and 12.73% of them were Global.
While 41.30% of the companies manufactured goods and services for the end consumer, 56.78%
of the companies operated for business to business. As an other industry information, the
companies included in the data analysis belong to the following industries; Mining, steel and iron
(18.94%), Food and beverages (13.35%), Auto (10.56%), Construction (10.56%), Oil, gas,
electricity, power generation (9.94%), Textile (6.21%), Chemicals (5.90%), Agriculture and
Farming (3.42), Electronic appliances manufacturing (3.11%), Pharmaceuticals (3.11%), Glass
(2.17%), Shipping (1.24%), Telecommunications (0.93%), Airlines (0.31%), Others (10.25%).
Companies identified all four types of rationalities on their websites with different
frequencies, including Discretionary responsibility (37.27%), Ethical responsibility (64.60%),
Legal responsibility (69.57%), and Economic responsibility (84.16%).
Companies engage in the following types of public philanthropy with descending
frequencies; Environment conservation (59.94 %), Younger generation (25.78%),
Education/Financial assistance to primary and secondary school students (23.91%),
Education/Other (22.05%), Sports (20.19%), Arts & culture (18.01%), Education/Financial
assistance to college students (14.29%), Health and disability (12.42%), Development and
poverty relief (11.18%), Seniors (5.90%), Disaster relief (3.73%). In terms of responsibilities
towards customers, 66.15% of companies mentioned Product quality and 64.29% mentioned
Product safety. In terms of responsibilities towards employees, companies in the sample
mentioned employee Health and safety (63.66%), Employee welfare (39.75%), Employee
development (36.34%), and Equal opportunity for all employees (19.88%). 22.98% companies
mentioned responsibilities towards/of Suppliers on their websites, while 30.43% mentioned
responsibilities towards Shareholders. Total Financial assistance to education was 60.25%.
Companies practice CSR in the following ways; CSR policy (43.17%), Volunteering (28.26%),
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Partnership/Government (26.40%), Sponsorship (26.40%), Donation (25.78%), Partnership/NGO
(20.50%), CSR report (15.22%), Partnership/University (14.91%), Award (13.35%), Foundation
(10.87%), Total Partnerships was 61.81%.There was a small amount of interest towards the
timing of the CSR in the following ways; Religious holidays (3.11%), Governmental holidays
and Event-based (3.11%); natural disasters (1.55%). About 14.30% of these companies discussed
CSR on a global scale on their websites.To identify the major approaches to CSR presented by
Turkish companies, the dimensionality of the 37 items in the codebook that measure the why,
what, how, when, and where of CSR was analyzed using principal component factor analysis.
Prior to performing PCA, the suitability of data for factor analysis was assessed. The Kaiser-
Meyer-Oklin value was .91, exceeding the recommended value of .60 while Bartlett’s Test of
Sphericity reached statistical significance (Chi Square=6989,789 df=465 p<0.05) (Tabachnick &
Fidell, 2007, p.614). Principal component analysis revealed that the presence of five components
with eigenvalues exceeding 1. An inspection of the screeplot revealed a break after the fourth
component. With the support of Parallel Analysis which showed only four components with
eigenvalues exceeding the corresponding criterion values for a randomly generated data matrix
of the same size, it was decided to retain four components for further investigation. Parallel
analysis involves comparing the size of the eigenvalues with those obtained from a randomly
generated data set of the same size. Only those eigenvalues that exceed the corresponding values
from the random data set are retained. This approach to identifying the correct number of
components to retain has been shown to be the most accurate, with both Kaiser’s criterion and
Catell’s scree test tending to overestimate the number of components (Pallant, 2007 p. 183;
Pallant, & Harvey, 2004, p. 1011). Based on the above information, these four factors were
rotated using a Varimax rotation procedure. In the end the naming of the factors were made
according the existing CSR theories and the interpretability of the factor solution. Economic
Responsibility, Shareholders and Global CSR items were excluded from analysis because of the
low communality values of those items (Pallant, 2007, p.196). CSR Policy, Sports and Award
items were excluded from analysis because these items are complex variables (Tabachnick &
Fidell, 2007 p. 612, 647). As a result, 31 items was used for the principal components analysis.
The principal components analysis revealed the presence of four factors explaining 37.12%,
12.07%, 7.99% and 5.38% of the variance, respectively. The total variance explained was
62.56%. The rotated solution yielded five interpretable factors:
-CSR as Public Philanthropy (37.12%,) (Younger generation, Discretionary responsibility,

Volunteering, Donation, Education/Financial assistance to primary and secondary school
students, Sponsorship, Partnership/NGO, Education/Financial assistance to college students,
Education/Other, CSR report, Arts & culture, Partnership/Government, Partnership/
University, Development and poverty relief, Foundation, Health and disability)
-CSR as Ethical Business Practice (12.07%) (Product quality, Health and safety, Product
safety, Legal responsibility, Ethical responsibility /Ethical business conduct, Environment,
conservation)
-CSR as Time Based Philanthropy (7.99%) (Governmental Holidays, Religious Holidays,
Event-based (natural disasters), Disaster relief, Seniors
-CSR asEmployee Welfare (4.09%) (Equal opportunity, Employee development, Suppliers,
Employee welfare)
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TABLE
TABLE I: The Factors Effecting The CSR Communication
Communication
(Results
(Results of
of the Rotated Component Matrix with Factor Loadings)
Loadings)
Public Ethical Business Time

Time Based
Based Employee
Employee
Philanthropy Practice Philanthropy
Philanthropy Welfare
Welfare
Younger generation
Younger generation 0.83
Discretionary responsibility
Discretionary responsibility 0.83
Volunteering
Volunteering 0.81
Donation
Donation 0.81
Education/Financial assistance
Education/Financial assistance to
to primary
primary and
secondary school
school students
students 0.73
secondary
Sponsorship
Sponsorship 0.70
Partnership/NGO
Partnership/NGO 0.70
Education/Financial assistance
Education/Financial assistance to
to college
college
0.69
students
students
Education/Other
Education/Other 0.69
CSRreport
CSR report 0.67
0.67
Arts&
Arts & culture
culture 0.65
0.65
Partnership/Government
Partnership/Government 0.63
0.63
Partnership/University
Partnership/University 0.60
0.60
Development and
Development and poverty
poverty relief
relief 0.56
0.56
Foundation
Foundation 0.52
0.52
Health and
Health and disability
disability 0.52
0.52
Product quality
Product quality 0.87
0.87
Health and
Health and safety
safety 0.83
0.83
Product safety
Product safety 0.82
0.82
Legal responsibility
Legal responsibility 0.78
0.78
Ethical responsibility
Ethical responsibility 0.75
0.75
Environment, conservation
Environment, conservation 0.72
0.72
Governmental Holidays
Governmental Holidays 0.80
0.80
Religous Holidays
Religous Holidays 0.79
0.79
Event-based (natural
Event-based (natural disasters)
disasters) 0.76
0.76
Disaster relief
Disaster relief 0.73
0.73
Seniors
Seniors 0.60
0.60
Equal opportunity
Equal opportunity 0.76
0.76
Employee development
Employee development 0.75
0.75
Suppliers 0.72
Suppliers 0.72
Employee welfare 0.71
Employee welfare 0.71
DISCUSSION
DISCUSSION
Results revealed
Results revealed that
that there
there are
are 44 basic
basic factors
factors named
named “Public
“Public Philanthropy,”
Philanthropy,” “Ethical
“Ethical
Business Practice,” “Time Based Philanthropy,” and “Employee Welfare.” These
Business Practice,” “Time Based Philanthropy,” and “Employee Welfare.” These 44 factors
factors are
are
explaining CSR communication in Turkey. The reason ofwhy CSR as Public Philanthropy
explaining CSR communication in Turkey. The reason ofwhy CSR as Public Philanthropy
(37.12%) is the most important interpretable factor in CSR communication shows that CSR
(37.12%) is the most important interpretable factor in CSR communication shows that CSR
applications are still taken as a charity activity in Turkey. Help, donation, discretionary
applications are still taken as a charity activity in Turkey. Help, donation, discretionary
600
600
responsibility, subvention for education and art are extensions of the same understanding of
Turkish establishments from past to present “donation of the earnings, giving to society what
taken from society.” Public Philanthropy taking the last place in Carroll’s (1991) pyramid is the
basic element for Turkish establishments. Next, Ethical Business Practice (12.07%) (Product
quality, Health and safety, Product safety, Legal responsibility, Ethical responsibility,
Environment conservation) take the second role. As a result, Carroll’s pyramid works in a
reverse manner for Turkey. A factor again belonging to Turkey has come out in this study. The
factor called Time Based Philanthropy (7.99%) contains Governmental Holidays, Religious
Holidays, Event-based (natural disasters), Disaster relief, and Seniors. Governmental holidays
and religious holidays are very important for Turkish culture and beliefs. Turkey has experienced
a very serious natural disaster recently. Besides helping disaster victims, organizations have
taken the responsibility of raising the awareness of society. Seniors - visiting the old and help
them in this special situations is very important. Respect for the elders and remembering them
especially in special days is very important in Turkish culture. To share and help is more
important in these special days. Expectations increase in those days. Besides CSR process, in
those special situations practicing CSR applications and broadcasting on web sites are also
important while responding stakeholders’ expectations. This is also the indication of Asian
culture. Chapple and Moon‘s (2005) study and Tang and Li’s (2009) research about China
supports these indications.
The last factor is Employee Welfare (4.09%) (Equal opportunity, Employee
development, Suppliers and Employee welfare). This factor shows that Turkish establishments
consider their employees as an important stakeholder. Besides, it is important to take place this
factor in CSR communication to be perceived as a firm considering its employees and to take the
attention of young generation-the good labor power-. This result is parallel with existence of
younger generation taking place under Public Philanthropy factor. One the other hand, economic
responsibility did not appear as a determinant factor of CSR communication in the organizations.
As a conclusion, there are four important factors in Turkey for CSR communication:
“Public Philanthropy,” “Ethical Business Practice,” “Time Based Philanthropy” and “Employee
Welfare.” For the further studies, these four factors can be developed and combined with the
other CSR communication activities of the firm. Creating and developing web sites for the CSR
communication is the only one activity taken as an instrument in this research. For the deep
understanding of the mechanism, all CSR communication activities have to be analyzed. This
paper represents an initial attempt to systematically understand how CSR is defined and
conceptualized by the leading local and global companies operating in Turkey. The findings of
this study can help the companies to manage their CSR communication more effectively and
more result oriented.
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602
THE DEATH OF SECOND LIFE:
A CASE STUDY OF A (OLD) “NEW TECHNOLOGY”
Michael L. Kent, Ph.D., University of Oklahoma

kentm@ou.edu
Maureen Taylor, University of Oklahoma

taylorm@ou.edu
ABSTRACT
Public relations professionals are increasingly called upon to understand, embrace, and
use technological advancements in their work. Which communication technologies are worth
embracing? Which technologies contribute to organization–public relationships? This essay
explores public relations’ fascination with new technology. In this essay, we conduct a case
study of Second Life, asking “do new technologies help practitioners to build relationships with
publics?” If yes, what evidence exists? If not, why are practitioners rushing in to embrace
unproven tactics?
INTRODUCTION
In the mid to late 80s and early 90s, there was some disagreement over the value, or role,
of the computer in modern life. Only a few far-sighted computer scientists and technology
professionals on the cutting edge of computers and media studies saw the shape of the future and
dared to make predictions. Instead of embracing wholeheartedly the new technologies, however,
many academics and professionals were actually the first critics to question computers and
related technology (Burnham, 1994; McLuhan, 1964; Negroponte, 1995; Postman, 1993; Stoll,
1995). Stoll (1995), for example, wrote about how computers worked to separate us from the real
world and social interaction. Burnham (1984), early in the computer revolution, foresaw the “rise
of the computer state” where monitoring and surveillance would be common. Other academics
recognized that changes to social system are likely to have serious consequences and that we
should always take time to question what we create (Kuhn, 1970; Levinson, 1997; Postman,
1984, 1993; Postman & Paglia, 1991; Stoll, 1999). Citizens and professionals’ relationships with
technology resemble what McLuhan called a somnambulist state where people do not question
what they see or hear.
In this essay we use a case study to analyze a “new technology” called Second Life. Few
scholars have carefully examined the latest generation of public relations technologies (called
Web 2.0): blogs, social media, and given the diffusion of many technologies, professionals have
not had many chances to evaluate them. This essay will help to fill the critical gap in our
understanding of technology by examining some of our current new technologies including
social networking and blogs through the lens of Second Life. This essay will be divided into
three sections. The first section reviews the literature that has lauded the potential of new
communication technologies in public relations. The second section provides a case study of
Second Life as a strategic communication tool. The third section of the essay explores public
relations potential of blogs, twitter, and other social media. The essay concludes with a
discussion of future directions in new communication technologies in public relations.
603
TECHNOLOGY IN PUBLIC RELATIONS PRACTICE
In the early ‘90s, the Clinton presidential campaign was the first political campaign to use
the Internet. The ClintonInfoCamp used the Internet in a press agent fashion, distributing news
releases, speeches, and a daily calendar of events about the candidates. By the late ‘90s, the
Internet began to fully emerge as a public relations tool. The growth of the Internet also
coincided with increased diffusion of the Internet as a personal and professional communication
tool. Duke (2002) noted that: “together the Web and e-mail are arguably two of the most
important public relations tools to emerge since the telephone and fax machine” (p. 311).
High Hopes For The World Wide Web As a Public Relations Tool
The Web is now almost 20 years old (“released” in 1991). The Web offers many features
that can help public relations. It allows for voice and sound, video, and real-time-interaction, that
are part of face-to-face communication (the ideal), as well as offering a number of other
communication options (print information, information storage and retrieval, time shifting, reach,
etc.). Yet, the Web is still used poorly by many (perhaps most) organizations and professionals.
Research shows that both small and large organizations continue to use the Internet as a one-way
communication tool to post news releases and other print-based documents (Kent & Taylor,
1998; Taylor & Perry, 2005).
Over the last 10 years, there have been hundreds of articles in the public relations
academic and professional literature extolling the benefits of the WWW in public relations. A
complete review of all of them is impossible in one paper but a quick review of the main points
provides insight into the high expectations.
The Web is a dialogic tool. In 1998, Badaracco edited a special issue of Public Relations
Review. This was one of the first comprehensive treatments of the Web as a public relations tool.
Earlier articles in the literature consisted of surveys of practitioners about their uses and needs of
the WWW (cf., Johnson, 1997). In this special issue, multiple articles claimed that the WWW
could facilitate dialogue between organizations and publics (cf., Coombs, 1998, Heath, 1998,
Kent & Taylor, 1998). However, none of the authors explained how you could have a
relationship with a Web site.
The Web helps activists. Other high hopes for the WWW included the belief that the Web
could “level the playing field” between activists and corporations. Coombs (1998) noted that the
Web allowed any sized group or even individuals to publicize their positions and gain
media/public support. Almost 10 years later, Reber and Kim (2006) found that activists are really
not maximizing their use of the Web to build public awareness and support for their issues.
The Web helps organizations in crisis. A third argument is that the WWW can help
public relations practitioners who are experiencing a crisis.The WWW provides organizations
with fast, direct, and controlled communication during times of crisis. The media can visit Web
sites for updated information, background, and other crisis related information. The public can
visit a site to learn how to protect themselves. However, recent research suggests that
organizations are still not maximizing the use of the WWW as a crisis communication tool.
Social media technology builds relationships. The latest manifestation of new technology
are the various social media that include blogs, twitter, Facebook, MySpace, YouTube, LinkedIn,
and a number of other “social” media that connect stakeholders, stakeseekers, and key publics
together.
604
As this brief review suggests, the claims and hopes of the Internet as a public relations
tool have been optimistic. Very optimistic - The evidence provided by researchers suggests that
there is a disconnection between the potential of the WWW and the actual use of it. Reality and
the soft-shoe that agencies and professional associations give to clients does not mesh with
reality.
The next part of this essay analyzes Second Life as an example of how the field of public
relations once embraced and then discarded a communication tool. By understanding Second
Life, we can perhaps better prepare ourselves to ask difficult questions about other new
communication technologies blogs and twitter.
CASE STUDY: SECOND LIFE AS A POTENTIAL PUBLIC RELATIONS TOOL
Over a 13-month period from December 2007 to January 2008, The International
Association of Business Communicators (IABC) and the Public Relations Society of America
(PRSA) sent out more than 65 messages (not counting reminders) inviting members to
participate in seminars/training, relating to how to use Second Life on behalf of clients. Given
that dozens of leaders and experts in our professional associations were saying that Second Life
was important, what was the evidence? Before answering that question, we will first explain
Second Life.
What is Second Life? - Second Life is a fantasy role playing game enacted on a computer. In
many ways, Second Life is like a MUD (Multi User Dungeon) where participants from all across
the world interact at the same time. But Second Life is not a “dungeon,” rather, Second Life is
more like a nightclub, or party, where people meet and interact. You can own property in Second
Life and earn money (in “Linden” Dollars), which can be redeemed online for “real” money
(U.S. dollars). To participate in Second Life, a member simply downloads the free software that
is used to create the virtual world on the member’s computer, and then creates an “Avatar” (a
graphical representation of a person for use in a chat room www.thefreedictionary.com/avatar).
Once a member has created an Avatar, s/he can begin to explore the game-world. For a fee (like
a membership fee), players get Linden dollars (local currency), and are able to own property,
build domiciles, etc. Second Life also has many basic fantasy features: Avatar’s can fly, appear
however the player wants, avatars can be nonhuman, etc. Second Life players have recreated
many real world locations in the game such as famous Parisian cafés, restaurants, nightclubs, etc.
Like many of the new Internet technologies that allow for commerce opportunities (stock
trading, banking, auction sites, retail, gambling, pornography), Second Life has a small
percentage of people who actually earn a living in the real world by spending time in a virtual
Fantasy world. Thus, the world of Second Life is aptly named. Many people live virtual online
“second lives.”
What is the Potential Reach of Second Life for Public Relations?

The claims about “social media saving your organization time and money,” being
“cheaper and easier,” and able to “make your communications department run more efficiently
and effectively” (PRSA and Ragan Communications, February 9, 2009) need more support than
what is currently available. Ten or fifteen years ago, before technology became so entrenched in
our daily lives, making such claims was possible. Now, technology is such a part of every
citizen’s lives that it is impossible to sort this out. Requiring managers to provide online content
605
like journalists do, or to continuously monitor social networking feeds like Twitter throughout
the workday is unlikely to result in a “more efficient workplaces.”
For communication professionals, the natural questions about a new technology should
be, “Is this something that my organization needs? And “What can the technology do for my
organization? To answer this, let us turn to Second Life. As Second Life Explains on its FAQ
page:
Second Life is the size of a small city, with thousands of servers (called simulators) and a
Resident population of over 15,609,338 (and growing). Residents come to the world from
over 100 countries with concentrations in North America and the UK. Demographically,
60% are men, 40% are women and they span in age from 18 - 85 [sic.]. They are gamers,
housewives, artists, musicians, programmers, lawyers, firemen, political activists, college
students, business owners, active duty military overseas, architects, and medical doctors,
to name just a few. (secondlife.com/whatis/faq.php#01)
The numbers tell another story. According to Second Life, there are about 15 million
members world-wide (from 100 countries), with major concentrations in the U.K. and the U.S. If
we assumed that 90% of the members came only from those two countries, we would be looking
at 13.5 million members.
According to the CIA World Factbook for the U.S. and the U.K. (<https://www.cia.gov/
library/publications/the-world-factbook/geos/uk.html>; <https://www.cia.gov/…us.html>), and
the U.S. census department (www.census.gov), the U.S. and the U.K. have combined
“adult” populations of about 245.5 million people (roughly 41 million from the U.K.) between
the ages of 15 and 64. The 245.5 million number, is actually lower when we exclude some
reasonable percentage of the population who have no ability or desire to participate (the
indigent and working poor, people without high-speed access, technophobes, etc.), perhaps
up to 40% (about 75% of U.S. adults are now wired. However, activities like Second Life
require fast Internet connections and are not easily played at work—the place where
many people in the U.S. have high-speed Internet access—and the U.S. has the highest
Internet penetration, the 40% number is probably generous. See for instance:
www.pewinternet.org/~/media//Files/Reports/2006/PIP_Internet_Impact.pdf.pdf]) leaving about
147.3 (245.5/60%) million potential members. Now, if we divided 147.3 million by 15 million
(Second Life’s supposed member base), we get a significant number, about 10% of the
population of U.S./U.K. adults. However, we know that “number of members” is very different
than “active members.” Every Internet user in the world has signed into dozens of sites in order
to obtain access to information, learn what is happening there, etc. Thus, a better yardstick would
be Second Life’s 60-day average, which turns out to be about 1.2 million people (averaging
several visits throughout the year). When we do the math on the adjusted numbers (147.3/1.2),
we get a more realistic number of .0081, or just under one percent of the population. These
numbers are consistent with informal surveys that the authors and colleagues have conducted of
U.S. and international students.
TABLE I: Calculation of Second Life Users in U.S. and U.K.
Target Group Frequency or percentage
U.S. and U.K. Adults 245.5 Million
Percentage with Internet Access 147.3 Million
Second Life’s reported member base 15.0 Million
Second Life’s 60 day average 1.2 Million
Adjusted Daily percentage of users .0081%
606
When we consider that the Second Life demographic (18–25 year olds), is considered the
most technologically savvy and wired group in the population, we have to again ask Are there
any coherent demographics that can be reached when a technology has a membership base that
spans 100 countries, does not even reach 1% of the population in the two most populous nations
that use the site, and the most technologically savvy and wired group in the nation (college
students), are hardly aware of its existence?
In terms of raw numbers of potential citizens who could be reached, there are
approximately a billion people between the U.S., and Europe. The pool of potential Second
Lifers among the 100s of countries is certainly in the billions. If a conservative estimate of 2
billion is used, and Second Life’s optimistic member base of 15 million, we discover that we are
talking about less than .0075% of the population of possible participants. Although 15 million is
a lot of “potential” contacts, Second Life is set up like a city and contains people from 100
nations and a huge range of demographics, interests, languages spoken, and technological
backgrounds. No cohesive group of those 15 million members exists. No professional
organization or individual would probably want to reach such a group. And, as is well known
about the Internet and chat rooms in general, a large percentage of people lie about their
identities when they are online (men pretend to be women, women pretend to be men, young
people try to be perceived as older, older people pretend to be younger, etc.). Why would it be
worth an organization’s effort to devote resources to getting up to speed on Second Life?
Until the online landscape and all of its strength and limitations are understood, most
organizations are probably wasting their time on social media like Second Life. For
organizations that do have data to support aggressively reaching out to particular wired publics
(and research is thin), social networking technologies make sense. For most professional
communicators, putting more energy into organizational Web resources makes more sense.
Although many argue that Second Life is already dead, major media stories about its
success and reach continue to be broadcast and printed. What lessons can we draw to critically
analyze the potential of other social networking technologies in public relations?
DO BLOGS, TWITTER, AND OTHER SOCIAL MEDIA HAVE GREATER PUBLIC

RELATIONS POTENTIAL?
Will blogs and other social media die the same death as Second Life? A quick look at the
PRSA Web site shows eight seminars/Webinars and presentations on the topic of new media and
Blogs during the month of February and March 2009, and about the same number in October,
2009. They are the most frequent topics on the site and one of the seminar’s promotional
statements captures the hype:
Are you ready to get up-to-speed on blogging, podcasting, RSS, YouTube, MySpace and
other social media? Get a comprehensive overview of new media through easy-to-follow,
step-by-step instructions. Start at square one and get everything you need to deploy social
media initiatives that deliver measurable results.… (www.prsa.org/PDseminars/Display
Event.cfm?semID=449)
Lenhart and Fox (2006) surveyed 233 “bloggers,” asking questions like: “frequency of Internet
use,” whether they have ever blogged, and whether they have read other blogs.
www.pewinternet.org/~/media/Files/Reports/2006/PIP%20Bloggers%20Report%20July%2019
607
%202006.pdf.pdf. That bloggers who were surveyed is worth noting. Imagine asking
accountants whether they have ever conducted an audit, or asking journalists if they have written
a story. Of course, such baseline data can be useful, but what is more interesting is that Lenhart
and Fox generally ignore that fact that all blogs are not created equal. There is a big difference
between a news blog, a personal weblog, and a corporate blog written by a CEO (Kent, 2008, pp.
33–34). Lenhart and Fox also ask about the type of content on the blogger’s page, whether they
make any money from blogs, etc. but we learn nothing from their survey about how “Americans”
(the Internet and American Life Project conducted the survey) think about blogs or how
professionals might use blogs. We do learn from Lenhart and Fox that most bloggers do not
check their facts, or make corrections when they post inaccurate information, but we do not learn
about why bloggers are such poor journalists/scholars, what the consequences are for wider
audiences from posting inaccuracies, etc. How frequently non-professionals (everyday citizens)
actually read blogs, or whether people actually “read” them at all. In short, the assumption of the
blog research, and much of the Internet research, is that people already understand the new
technologies, know how to use them, or agree on their utility or value (cf., Kent, 2001).
The PEW Internet Project data is only a few years old. As recently as 2006, reputable
researchers like PEW did not really know what to ask or how to ask their questions. Clearly, the
assumption that professionals or everyday citizens already understand blogs is premature. Most
Americans still do not blog. In light of the general lack of critical examination of most new
communication technologies, the next section of this essay will take up the social networking
phenomenon. The newest social networking sweeping the profession is surely Twitter, a social
networking technology that works like an instant messaging tool. We selected Second Life for
our case study because of the continued attention that it receives in the mainstream broadcast
media, and the fact that so many professionals claim that Second Life is now dead, after being
the greatest thing to come along only a few years ago. Twitter is the latest darling of the media
and communication professionals.
In a recent study of social networking by PEW’s Internet and American Life project, only
10–30% of adults 35-55 have any social media presence (Lenhart, 2009, pp. 1–2, <www.pew
internet.org/~/media/Files/Reports/2009/PIP_Adult_social_networking_data_memo_FINAL.pdf.
pdf>). According to Lenhart, “Overall, personal use of social networks seems to be more
prevalent than professional use of networks, both in the orientation of the networks that adults
choose to use as well as the reasons they give for using the applications” (p. 2, emphasis added).
Only about 35% of all adults in the U.S. even use social media, and about half of that number are
young-adults, 18–25 (p. 5). Perhaps more importantly, young (teens) social media users use the
technology solely for entertainment purposes, while only one in four adult users, about 3–8% or
the adult population use social media for networking or professional purposes (p. 6). By far, both
adults and teens use social media “to stay in touch with friends,” “to make plans with friends,”
“and to make new friends.” Finally, no more than 1–3% of the population has ever used social
media for active political purposes like requesting information or joining a political group (p. 11;
cf., also, Lenhart & Fox, 2006). The media might be given a pass on this job since the media
have not spent much time critically examining any technology in the last ten or fifteen years (cf.,
Kent, 2001; Postman, 1984, 1993). However, we would expect more caution and understanding
from professional associations. On the most basic level, professional associations like PRSA,
IABC, and AEJMC should be examining how to use communication technologies effectively,
rather than assuming new technologies are already working.
608
Besides the general lack of understanding of Web 2.0 technologies, there is an abundance
of other “old-tech” technologies that professionals take for granted like Listservs, mailing lists,
print based information and speeches offered on Web sites, and communication skills (dialogue,
interpersonal communication, B&P, etc.). Many professional Listservs like CRTNET, are
decades old and used by thousands of communication professionals. Genuine organization–
public dialogue (rather than Twitters, or blog postings) are substantially more likely to result in
useful decisions and solid relationships.
CONCLUSION
Integrating new communication technologies as part of an overall public relations

campaign and knowing how to use technology effectively are really two different things. Any
media or technology that has the potential to allow a public relations professional to do his/her
job more effectively is valuable. The problem here is that so much of the discussion about new
technologies has been overly laudatory, suggesting that all new technologies are inherently
valuable simply because they are new (argumentum ad novitam).
Instead, what we need is research and critique into how, when, and why to use our
technologies. There has been enough cheerleading about how great they are. We need a body of
research focusing on the implications and the hurdles to using new technologies: the importance
of having trained communication professionals use them, the implications of moderated verses
open dialogue, obtaining buy-in from top management regarding transparency and honesty, the
risks involved in deception, etc. Rather than just blanket admonitions to use new technologies
“because of the phenomenal growth” (which seems impressive until unpacked), “because our
publics are increasingly online” (another exaggeration), “because we need it to compete” (only
true with certain publics), the profession needs senior practitioners and leaders who are willing to
say “this might work if . . . ,” rather than “you should use this because . . .” There is no turning
back from technology. Saint Isidore, the patron saint of computers and technology, is here to
stay, especially given the latest generation of students, who have grown up with technology as a
part of their everyday lives and have a different relationship to technology than someone who is
35, 45, or 55. What we need is fewer cheerleaders for new technology. We need more
researchers examining how technology can improve communication and professional life.
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Harper’s Magazine,March, 1991, 44–56.
Reber, B.H., and Kim, J.K. “How Activist Groups Use Websites in Media Relations: Evaluating
Online Press Rooms.” Journal of Public Relations Research, 18, 2006, 313–333.
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Stoll, C. High-Tech Heretic: Why Computers Don’t Belong in the Classroom and Other
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Communication.” Public Relations Review, 31, 2005, 209–217.
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REDRESSING ASSUMPTIONS OF IMAGE AND EXAMINING THE VALUE OF A
NEGATIVE CELEBRITY IMAGE ACROSS INTERNATIONAL BOUNDARIES
Adam E. Horn, University of Missouri/University of Central Missouri

ahorn@ucmo.edu
Tricia L. Hansen-Horn, University of Central Missouri

hansen-horn@ucmo.edu
ABSTRACT
Traditional U.S.-based writings on and discussions of image tend to articulate the concept
as a positive thing belonging to an individual or organization. It is viewed as something that
business professionals, public relations practitioners in particular, can and should manage in an
effort to guarantee organizational success. The discussion presented helps its readers engage in a
process of redressing traditional assumptions of image, with a view to asking questions about
celebrity athletes such as U.S. basketball great Kobe Bryant and U.S. swimming great Michael
Phelps. Both have gained some level of global celebrity status as well. The authors leave their
readers mulling over the ideas of whether or not undesirable or negative images might and/or
should be viable for leveraging in profitable ways.
INTRODUCTION
Traveling from one country to another is exhilarating, to say the least. It is also highly
educational if the travelers take the time to process subtle, and sometimes not so subtle,
differences that surround them as they walk off the plane and become participant observers in the
world around them.
We had the opportunity to travel to for the first time as a team of two from the United
States to Western Europe for 16 years ago. We still remember discussing our surprise over
seeing being billboards advertising U.S. celebrities starring in movies that did not play in the
United States. The experience sensitized us ever more strongly, of course, to our own
ethnocentrism and narrow perspectives of life. Ever since that experience we have both become
students of and theoreticians in image and image building activities.
Of special interest is what we argue is the assumed idea of needing a desirable image as
opposed to undesirable image when it comes to public relations pursuits. Desirability is
determined by perceptions of cultural norms and law. The public relations literature generally
assumes that practitioners help their institutions and clients pursue desirable images. Undesirable
images are not wanted and, when they do take form, the practitioners generally engage crisis
communication strategies of all variety in an effort to bring the images back to desirable states.
The purpose of this essay is to help our readers engage in a process whereby the value of
redressing traditional assumptions of image may be embarked upon.
The quest to redress traditional assumptions of image can begin in an examination of
United States athletes who are celebrities in their own right, especially those whose public
careers histories of ups and downs in the maintenance of desirable images. L.A. Lakers Kobe
Bryant immediately comes to mind.
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THE REALITIES OF AN UNDESIRABLE IMAGE
Los Angeles Lakers’ all-star guard Kobe Bryant surrendered July 4, 2003 to the Eagle
County (Colorado) sheriff’s department after Sheriff Joseph Hoy issued a warrant for his arrest.
The arrest followed allegations that Bryant had sexually assaulted a 19-year-old woman who
worked at the Lodge and Spa at Cordillera (near Vail, CO) where Bryant had stayed.
Bryant left Los Angeles on June 30 to have surgery at Steadman Hawkins Clinic in Vail
the next day for tendonitis. According to news reports, he checked into the hotel around 11 p.m.
and called his wife from his hotel room about 15 minutes later. Bryant’s accuser, who was a
concierge/receptionist at the Lodge and Spa, went off duty shortly after Bryant checked in.
Sometime later that evening, the female spa worker visited Bryant’s room and that is when the
alleged sexual assault occurred.
The next morning, Bryant underwent his surgery. While Bryant was in surgery, the young
spa worker told the Eagle County sheriff’s department that Bryant had sexually assaulted her the
night before. The young woman went to the Vail Valley Medical Center for tests, while sheriff’s
office investigators “quizzed Bryant in his room and collected evidence. Hours later, technicians
at Valley View Hospital took samples of Bryant’s DNA” (Corliss, 2003, p. 45).
After being questioned, Bryant flew back to California. He returned to Colorado four
days later to face a single count of felony sexual assault. Bryant was released after posting
$25,000 bond, thus beginning a criminal case that would last for more than a year before the
judge dismissed it. Although Bryant never stood trial in the courtroom, the court of public
opinion was already in session. Sports Illustrated writer Jack McCallum (2003) put it best when
he wrote:
It seems naïve in the extreme to profess amazement that a professional athlete might have
extramarital sex, given the privileges of the lifestyle, the ease with which the stars attract
women, and the fact that so many high-profile males (a president, for one) have been
unfaithful. While some who never bought into Bryant’s squeaky-clean persona were still
surprised by the allegation of violence, others have long believed he has a darker side.
The excavation of his life and character has begun. (p. 42)
Since being drafted out of high school by the Charlotte Hornets in 1996 (and traded later
that year to the Lakers) many NBA pundits claimed that Bryant would likely become the next
Michael Jordan both on and off the court. Undoubtedly this was an unrealistic comparison to
make between the two, especially at Bryant’s young age. At the time, Jordan was known for his
super human efforts on the court, which were equally matched with his star appeal as a positive
role model off the court. Certainly these were big shoes for Bryant to fill.
However, nearly a year before the alleged sexual assault occurred a poll conducted by
Burns Sports & Celebrities Inc. “rated him the third-best product endorser in sports, behind Tiger
Woods and Michael Jordan” (espn.go.com/nba/news/2003/0718/1582691.html, 2003, ¶ 12). It
only took six seasons to prove the pundits right. Bryant not only became a five-time NBA all-star
and won three NBA Championships, but he inked a new endorsement deal with Nike worth a
reported $40 to $50 million a year before the alleged assault. The following quote sums up
Bryant’s image value:
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[Bryant’s] ‘personality and his skills are the two things that are very important to his
endorsement skills,’ said Matt Powell, athletic footwear and retail analyst for Princeton
Retail Analysis and contributing editor to Sports Executive Weekly. ‘His [clean-cut]
personality is a big part of his appeal’. (as quoted in Zmuda, 2003, p. 8)
In addition to the legal trouble Bryant faced if convicted – four years to life in prison or
20 years to life on probation and up to a $750,000 fine – Bryant’s reputation suffered some
damage the moment he surrendered to police. Not only did Bryant face prison if convicted in a
court of law, many believed that he had already been convicted in the court of public opinion.
Needless to say, Bryant had both a legal and a public relations crisis. Bryant was at the
top of his game (literally and figuratively) when he was sought by Colorado police for rape. At
the time, Bryant was the most popular NBA player for a number of reasons. At 26, his exploits
on the court were already legendary, but it was his “squeaky clean” image and boyish charm off
the court that made him popular with teammates, fans and with kids who wanted to be “like
Kobe.”
This case is unique in that seldom has a professional athlete with “superstar” status been
accused of rape (a strong case could be made that Mike Tyson’s rape charge in the boxing world
was as prominent, suggesting comparative analysis of the two cases). This is not to say that
athletes in the past have not been accused of this crime, the line of demarcation is Bryant’s
superstar status. It is this status that makes the case unique.
Following the criminal trial against him, which resulted in the case being dismissed,
Bryant soon embraced this new “bad boy” image even though he was the NBA’s “golden boy”
just a few years before the incident. In his first commercial endorsement (Nike) following the
criminal trial, Bryant played on this bad boy image. The ad reads as follows: “Love me or hate
me, it’s one or the other. Always has been. Hate my game, my swagger. Hate my fadeaway, my
hunger. Hate that I’m a veteran. A champion. Hate that. Hate it with all your heart. And hate that
I’m loved, for the exact same reasons.”
In a landmark public relations move, Bryant and his public relations team embraced the
negative image assigned to him by public perception in the wake of rape charges and turned it
into a powerful marketing tool. Essentially, Bryant’s public relations team convinced him to
embrace and develop this new negative image because he was not likely to ever regain his
golden boy image, at least not for some time. It worked. Unlike in traditional image management
where public relations practitioners try to repair and restore the offending individual’s image to
its past state, Bryant’s public relations team decided it was better for him to cultivate his new
seemingly negative image and leverage it for financial gain.
This move is something public relations professionals should ponder further. It presents
an especially interesting set of questions when taken to the international level because what is
judged permissible and non-permissible in one culture is not necessarily perceived in the same
ways in another culture. Michael Phelp’s public career comes to mind in this instance.
First reported by News of the World’s Dickinson in “What a Dope: 14-times Olympic
gold medal winner Michael Phelps caught with cannabis pipe,” the subtitle posed the question of
whether the picture “could destroy the career of the greatest competitor in Olympic history”
(Dickinson, 2009). This was viewed as especially troublesome in light of the fact that in 2004,
aged 19, he got 18 months probation for driving while under the influence” (Dickinson, 2009).
The Huffington Post later reported that Michael Phelps was suspended from competition for
three months by USA Swimming in the wake of the photo that showed the Olympic record-
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setting champion inhaling from a marijuana pipe” (Graham, 2009). This was surprising in light
of the fact that earlier the World Anti-Doping Agency had introduced a four-year ban on sport’s
drug users. Approved by the World Anti-Doping Agency Foundation Board on November 17,
2007, a revised code took effect Jan. 1, 2009. It contains sanctions of up to four years for
“administration of or attempted administration of prohibited substance or prohibited method” (p.
52). Many wondered how Phelps escaped the heavy sanctions. In an exclusive interview with
TODAY’S Matt Lauer, Phelps “said only that he had a made a terrible mistake. Phelps was most
concerned about how much he hurt his family, friends and fans and not how much it might cost
him” (Celizic, 2009). An October 2009 visit to the Michael Phelps Facebook Fan page revealed a
full schedule of swimming events planned, as well as continuing relationships with a number of
sponsors.
Interestingly enough, Bryant embraced his negative image, at least in part, as illustrated
in the Nike ads. Phelps, though, did not embrace any part of his negative image. He apologized
profusely for his judgment and actions. Both athletes, however, retain a competitive schedule,
endorsement contracts and a promising future. Of interest here is how Bryant was able to
embrace public sentiment against him for his perceived offensive actions yet Phelps did not
embrace his negative image at all. Of additional interest are the social and political factors that
might drive assumptions of what makes a desirable image; as well as those that may allow a
celebrity athlete to leverage an undesirable image in profitable ways, especially as those factors
may or may not change across cultural boundaries. And finally, the value of redressing
traditional assumptions of image as something that must be maintained in ways that produce
positive perceptions is presented for questioning.
ABBREVIATED REVIEW OF THE LITERATURE
When discussing image formation and management at any level it is highly important to
note that images are not static things, nor are they easily confined to description. For example, an
athlete may hold a largely positive enduring image as a philanthropist, while also holding an
image as a poor media interviewee. At the same time, that philanthropic image may be
overshadowed at some point in the athlete’s career by professional accomplishments (i.e.,
breaking the single-season home run record, breaking the all-time scoring record, or signing a
contract to become the highest paid athlete in his or her respective sport). Former Indiana
University and Texas Tech basketball coach Bobby Knight, for instance, appears to have two
different public images. Knight’s not-so-desirable relationship with the media is well
documented. Knight appeared to outwardly despise most of the media and acted gruffly in
interviews. Some might argue that the media portrayed Knight as a mean and overbearing
person. Ultimately, the media’s portrayal of Knight is what the public saw and heard. In addition
to his mean/overbearing public image, Knight’s other less publicly recorded image (as seen
through the eyes of his former players and assistants) was that of the paternal mentor who ran a
clean program, graduated most of his players, and who went out of his way to help others. Image
is a multi-level and multi-faceted phenomenon.
Moffitt (1994) directed her readers’ attention to the complex nature of studying image
and/or trying to leverage image for desirable ends. She was careful to draw attention to the idea
that there are “multiple factors dictating multiple images” (p. 160) and that “image is not dictated
solely by the organization but that image is the product of multiple organizational,
environmental, personal experience and other factors processed by the individual receiver” (p.
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160). Moffitt advised that public relations professionals be cautious about targeting messages to
the common denominator of an entire group and, instead, “treat publics…as groups of
individuals, each individual having multiple positions toward the organization” (p. 160). While
Moffitt’s admonitions are well-taken, Benoit (1997) argued that “even if we are moving away
from a notion of image as a single impression shared by an audience…image is still a central
concept to the field of public relations” (p. 177).
An image is not static. It exists on multiple communicative levels. It does not have easily
described boundaries. Yet, the academic literature and professional dialogue are filled with
discussions of image as an imaginable thing, as a real thing, and as a thing to be managed and
addressed. The reality of this is seen daily on Wall Street. An organization’s publicly traded
stock can open at $55 a share. One comment to the press from a source (one who holds a
desirable image in the financial arena) and that stock can plummet in a matter of hours to $15 a
share. The August 2000 Emulex crisis was an example. Following a bogus news release sent
over Internet Wire, Emulex’s stock prices plunged more than 60 percent in the first hour of
trading.
Coaches and players are not faceless organizations like Emulex. They are truly tangible
to their publics. They are also celebrities. The idea of celebrity carries with it some level of
public awareness, fame, and prestige. Gronbeck (1997) discussed the realm of celebrity.
To be celebrated – famous, likable, worthy of public interest – is in part a matter of
accomplishment in some area of endeavor, but also a matter of attractiveness. Further,
celebrity status is an interactive variable; that is, celebrity is conferred upon a personage
by a public, for to be known as likable and worthy of attention is to be molded into a kind
of honored or appreciated object by another. And, of course, the kind of object into which
a person is made depends, once again, upon tokens – visible behavior and discourse that
serve as markers. (p. 137)
In light of celebrated individuals committing offensive acts, Lull and Hinerman’s
discussion of moral violations is useful. They argued that a “star’s [celebrity’s] moral
violations…are always contextualized in terms of his or her ‘image system’ (Lull & Hinerman,
1995). By this [they meant] that any particular transgression is constructed and read against an
image in circulation” (p. 21). Current offensiveness is mediated by associated image.
Another important dimension of celebrity came from McQuail (2000). He argued that
“the media [emphasis added] have a virtual monopoly over…status and celebrity in the wider
society” (p. 488). In addition,
dealing in celebrity is generally a matter of mutual self-interest, since the media
themselves need to provide their audiences with images of celebrity. Fame and celebrity
usually depend on wider systems of meaning that have developed over time and which
the mass media did not create nor completely control. They also depend on social
networks and hierarchies in the society and on interpersonal processes of discourse,
rumour [sic] and gossip. (p. 488)
It is clear that celebrity image is not a simple thing.
DISCUSSION
While the review of the literature above is in no way comprehensive, it does lead us to
ask a number of intriguing questions when attempting to explore the value of redressing
traditional assumptions of image as it pertains to celebrity athletes. It seems that at least three
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areas present themselves for discussion in this exploration, as least from the normative view of
image held by public relations scholars and practitioners practicing in the United States. The
three areas are celebrity status; moral violations as they relate to breaking the law, governing
rules or social norms; and media influence. A lively discussion of these areas as they impact
assumptions of image, play a role in the development of undesirable images, and have the
potential to determine the possibility and viability of leveraging undesirable images needs to be
undertaken. The discussion also needs to embrace the perceptions of international scholars and
practitioners as their expertise can change the questions asked and perspectives pursued in this
discussion.
REFERENCES
Benoit, W.L. “Image Repair Discourse and Crisis Communication.” Public Relations Review,
23, 1997, 177-186.
Celizic, M. “Michael Phelps: It Was a Bad Mistake.” TODAY: msnbc.com. March 13, 2009,
Retrieved Oct. 21, 2009 from http://www.msnbc.msn.com/id/29664124
Corliss, R. “Say It Ain’t So Kobe: The NBA All-Star With the Cool, Clean Reputation is
Charged with Sexual Assault in Colorado.” Time, 162, 2003, 45-46.
Dickinson, G. “What a Dope: 14-times Olympic Gold Medal Winner Michael Phelps Caught
with Cannabis Pipe.” News of the World. Jan. 2, 2009, Retrieved Oct. 21, 2009 from
http://www.newsoftheworld.co.uk/news/150832/14-times-Olympic-gold-medal-winner-
Michael-Phelps-caught-with-bong-cannabis-pipe.html
espn.go.com/nba/news/2003/0718/1582691.html. Burns Sports &Celebrities Inc. ¶ 12,
2003, Retrieved February 10, 2008.
Graham, N. “Michael Phelps Bong Picture: Olympic Champion Caught Smoking Marijuana:
UPDATED. The Huffington Post. Feb. 10, 2009,Retrieved November 1, 2010 from
http://www.huffingtonpost.com/2009/01/31/michael-phelps-bong-pictu_n_162842.html
Gronbeck, B.E. “Character, Celebrity, and Sexual Innuendo in the Mass-mediated Presidency.”
In J. Lull, and S. Hinerman, eds., Media Scandals. New York: Columbia University
Press, 1997, 122-142.
Lull, J., & Hinerman, S. “The Search for Scandal.” In J. Lull, and S. Hinerman, eds., Media
Scandals. New York: Columbia University Press, 1997, 1-33.
McCallum, J. “The Dark Side of a Star: Kobe Bryant’s Carefully Cultivated Image Has Been
Badly Stained by His Admission of Adultery, and a Charge of Sexual Assault.” Sports
Illustrated, 99, 2003, 42-45.
McQuail, D. Mass Communication Theory, 4th ed. Thousand Oaks, CA: Sage Publications,
2000.
Moffitt, M.A. “Collapsing and Integrating Concepts of ‘Public’ and ‘Image’ Into a New
Theory.” Public Relations Review, 20, (2), 1994, 159-170.
World Anti-Doping Code. 2009, Retrieved Nov. 1, 2009 from http://www.wada-
ama.org/rtecontent/document/code_v2009_En.pdf
Zmuda, N. “Accusations Mar Bryant’s Image: Despite $40-million Deal With Nike, Experts Say
Full Impact on the Star’s Earning Potential Yet to be Seen.” Footwear News, 2003, 8.
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A COMMUNICATION CHALLENGE: HOW TO EFFECTIVELY COMMUNICATE
AN ORGANIZATIONAL CHANGE (A RECYCLING PROGRAM)?
Gideon Falk, Purdue University Calumet

gideon@calumet.purdue.edu
ABSTRACT
This paper will discuss a multi stage process of communication to attempt to change the
behavior of students, faculty and staff of a medium size university. In stage one of the change
process the university administration established a goal of enhancing and expanding a campus
recycling program. In stage two a small group of a faculty member, a clerical staff, two
administrators and the President of Student Government tried to improve the communication and
the change process. In stage three the previous group expanded its efforts. The paper will discuss
the challenges, the methods attempted and a revised plan to improve the implementation. Change
models from the field of Organizational Behavior will be used to analyze the shortcoming of the
strategy. Visual posters developed by students will be shared to show the plans for future
expansion of the communication/change plan.
INTRODUCTION
Recycling is a practice that communities and organizations have been implementing for a
long time. However, what and how to implement an effective recycling program has been a
challenge for many communities and organizations. The challenge has always been how to get
many individuals and organizations to put in the effort required to effectively and efficiently
implement such a program.
My state university has been involved in recycling of paper and cardboard for 10 or 15
years. Similarly, the university has been involved in recycling of large florescent light bulbs and
automotive oil. A new President took office at the main campus and implemented an expanded
recycling program at the central campus. At some point, the regional campus was given the
instruction to expand its recycling program to include aluminum and tin cans, as well as glass
and plastic bottles. There were two goals: first, become a greener university in line with many
other universities and organizations. Two, to reduce the amount of garbage (which is costly –
payment to Waste Management) by moving much of the recyclable waste to the category of
recyclables (which is far less costly). After discussion with Waste Management, the contractor
for the campus garbage and recyclables, it was decided to acquire large green totters which will
serve as a place to drop all recyclable material: cans, bottles, paper and cardboard. Facility
services (the unit in charge of collecting all waste) will empty the totters 2-3 times a week. All
office workers would get a blue bin for recyclable, separate from a brown garbage/waste basket.
This paper will describe and analyze the change process which is still taking place.
Specifically, it will discuss two stages of the implementation process, will analyze mistakes
which were made and discuss ideas how to improve the process. In addition, it will analyze the
process in terms of two change models. Specifically, the elements that were neglected leading to
imperfect results. A new communication strategy and an expanded change strategy will be
proposed.
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TWO COMMUNICATION STRATEGIES
Stage one: Administrative Change

On December 10, 2008 a middle level administrators sends an e-mail to everyone on
campus informing them of a new Recycling Policy starting in January 2009. A copy of this e-
mail is in Appendix A. Following the message large green Totters (containers) were located on
every floor in every building on campus. The Totters had no sign on them: Not what should be
deposited in them or what should not be dumped into them. In the following months faculty, staff
and some students deposited recyclable material (paper, bottles, cans and cardboard boxes) in
these totters together with paper cups with fluids, food, chip and candy wrappers and other non-
recyclable material. Campus facility would empty the totters 2-3 times a week and would
measure the amount recyclable.
In this section I’ll analyze the strength and weaknesses of this communication strategy
which was based on a single e-mail. In short, it was a very poor way to implement a significant
organizational change. The assumption that a single e-mail message, from an administrator who
is not know to most faculty and staff, can change the behavior of 600 to 1,000 people is an
invalid assumption. In my subjective judgment this attempt was at best only a partial success.
Stage two: A Recycling Team Revised Communication Strategy

A faculty member who has passion for recycling and has some understanding of
organizational change was not satisfied with the way the change was implemented as discussed
above. Thus, he developed a new change and a new communication strategy. The following are
key elements of a Revised and Expanded strategy:
1. Develop a change coalition which would include the chair of the clerical staff
organization, the chair of the administrative staff organization, the president of student
government, the supervisor of the cleaning staff (which collects the garbage as well as the
recyclable material) and a faculty member.
2. Have several meeting to coordinate activities and communication.
3. Faculty member sent an e-mail to all faculty members asking them to announce in their
classes the location of the green totters and ask the students to recycle.
4. Develop a sign to be posted on all green totters what should be recycled and what should
not be deposited in the green totters.
5. Ask the University Senate to pass a resolution in support of the Enhanced Recycling
program.
6. Ask for the support of student Government. The President of student Government was
supportive and passed a resolution in the Students’ Senate in support of the expanded
Recycling program.
7. Communicated with the supervisor of the cleaning staff to coordinate activities.
8. Approached the Vice Chancellor for Administrative Services to ask for his support and
asking whether he would be willing to send a letter to the campus community.
9. Sent an e-mail to the secretaries of the 6 Schools asking them to inquire whether any
faculty needs an office recycling basket (bin). These blue bins are in faculty offices, used
to drop paper in the office which then has to be taken to the green totters by the faculty.
At least two schools followed.
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10. At least one E-mail was sent by the faculty to all teaching faculty asking every faculty to
announce the starting of an expanded Recycling program and asked instructors to tell
students the locations of the nearest green Totters to the class.
11. At this point the lead team is assessing the level of success of the expanded change
attempt.
THEORETICAL EVALUATION OF THE CHANGE
Analysis: Tying Lewin’s Change Model to the Change Attempt

Lewin (1951) developed a conceptual change model which has three stages. They are
unfreezing, changing and refreezing. The first is the unfreezing stage; in this stage those involved
in the change process and are expected to change their behavior need to be told and need to
accept that the current state of affairs is not acceptable and need to be changed. In other words
this stage explains the need for change and ideally those who need to change their behavior
accept that reality.
This did not happen in this case. No one attempted to communicate the need for change
and the reasons for it. It was assumed that students and faculty will understand the need for
recycling and are already persuaded to accept such a change. It did not happen in either stage 1
or stage 2 as described above.
Stage two in Lewin’s model is changing. There needs to be an effective and clear
communication of the change. The author believes that this did not take place in either stage one
or two in this Recycling change.
Stage three of Lewin’s model is Refreezing – solidifying a change in behavior by
supporting it, reinforcing it, and institutionalizing it to become a part of institutional practices
and policies. Obviously, since the first two stages did not work properly, there is no need to
discuss this stage.
Analysis: Tying Kotter’s Change Model to the Change Attempt

The first step in Kotter’s model is Establish a sense of Urgency (1996). It is pretty clear
that the university community doesn’t feel a sense of urgency in terms of attitudes, feeling and
logical beliefs. As discussed above the need for the change and its importance was not
communicated.
Kotter’s second step is “Create a Guiding Coalition”. The description of this step is to
“Create a cross functional, cross level group of people with enough power to lead the change.”
This has been attempted in the second stage of the change as described above. The Guiding
committee is composed of a faculty member, the chair of the clerical and service staff, the chair
of the “Administrative and Professional Staff”, the President of Student Government and a
Representative of the Administration in charge of garbage collection and Recycling. On the
surface it looks as if this might be a good coalition. However, there are two problems. First, the
members don’t have much power to influence their respective constituencies. In particular, the
most critical group is the 10,000 students. The President of student Government has no
(minimal?) influence on students’ recycling behavior.
Similarly, the faculty member does not have either legitimate power, or expert power or
personal prestige to influence the 300 to 600 instructors on campus. It doesn’t seem that the
instructors (faculty) are in support of the “enhanced Recycling” effort. They can do more to
persuade the students in their classes to make the effort to recycle. It is doubtful that most are
619
willing to do that.
Step three is “Develop a Vision and Strategy.” There is no strong and clear university
vision in regard to being “Green.” The University Senate passed a resolution in support of the
Enhanced Recycling program. The Student Government Senate passed a similar resolution. The
vision, if there is one, is not shared by the university Community. There are a few elements of a
strategy, but it is not comprehensive.
Kotter’s 4th step is “Communicate the Change vision.” Since there is no clear vision it is
difficult to communicate it. No attempt was made to communicate a Green Vision to the campus
community.
“Empower broad -Based action” is the 5th step in Kotter’s model. Since the Recycling
initiative did not originate from a senior manager – leader on campus it is difficult to speak about
empowerment where authority to take actions and make decisions is delegated by people with
authority downward. Here, the initiative is coming from the rank and file and this step is not
applicable to this bottom level initiative.
The sixth step in Kotter’s model is “Generate short term wins.“ It is difficult to point to
short terms wins at this stage. It may be possible to get data to indicate the increase in material
recycled and a reduction in the amount of garbage collected by the external contractor. This data
is not yet available to the author. Furthermore, one can argue that several elements of the change
strategy have not yet been implemented, and therefore it is premature to talk about short term
wins.
Kotter’s seventh step is “Consolidate gains and produce more change”. Since there are no
visible gains it is too early for this change.
The last of Kotter’s steps is to “Institutionalize the Change.” This is very similar to the
third stage of Levin’s model of Refreezing. The new practices have to be solidified. Not
applicable in this case.
Developing a Plan for Stage Three of Communication and Change

What is next?
1. Developing closer ties with top campus leaders to get them involved.
2. Developing a broader coalition with more instructors and faculty.
3. Developing closer contact with the Chronicle – the students’ campus paper. It is hoped
that the paper will print several articles in the paper.
4. Getting the Vice Chancellor for Administrative services to be involved: Either sending a
letter to the campus community, cosigning a letter with the lead faculty and/or getting the
Chancellor to send a letter to the campus community.
5. Get student clubs be involved, Assist in the recycling in some building.
6. Develop an experiment, in which recycling containers or boxes will be in one building in
each classroom. One or several student organizations will take the classroom recycling
material boxes and empty them into the green Totters. Compare recycling data from
previous month to the month of the experiment.
7. Post Recycling posters in many classrooms. The recycling posters have been prepared by
students in computer Graphic courses.
REFERENCES
Kotter, J.P. Leading Change. Boston: Harvard Business School Press, 1996, 20-25.
Lewin, K. Field Theory in Social Science. New York: Harper & Row, 1951.
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PUBLIC RELATIONS THEORY: TRANSLATING IN A GLOBAL ENVIRONMENT
Bonita Dostal Neff, Valparaiso University

bonita.neff@valpo.edu
Tricia L. Hansen-Horn, University of Central Missouri

hansen-horn@ucmo.edu
ABSTRACT
Pubic relations theory is a rather new focus in the discipline. Largely built on models and
often a view focusing on the “practice,” the core of public relations was primarily schematic in
the beginning with an applied emphasis. The initial development of theory in the United States
was generally “borrowed” from other noncommunication disciplines—the social sciences, for
example. The development of pubic relations generated theory emanated with the establishment
of Public Relations Divisions/Interest Groups in associations and the establishment of graduate
programs in public relations. This disparate growth pattern fostered the development of public
relation theory within the particular philosophy of the academic communication group. With a
variety of approaches to “what public relations is,” the development of theory obviously
reflected the philosophy of the discipline. The first theory text in PR book (not essays about
theory as in the two theory books by Botan and Hazelton) addressing the theory-to-practice
approach was published in 2006. This text established the importance of generating public
relations theoretical approaches through a theory-applied (case)-reflective questions (connection)
scenario. Yet the transition to a global understanding is very nascent and this need to integrate a
variety of cultural perspectives into theory seems to be the next area to explore.
INTRODUCTION
Banks (2000) provided the most multifaceted discussion on the standards and
expectations of a cultural public relations experience. Although not a theoretical level of
discussion in terms of “theory,” the text served as a solid grounding of public relations in culture
from not only a practical perspective but also a cultural evolving entity. Banks also contributed
an immense understanding of the ethical dimension in public relations practice.
Perhaps what is most important about the growth of global public relations, hence the
greater interest in multicultural and global PR theory, are the three factors outlined by Tilson and
Alozie with the clear challenge to organizations:
A convergence of three factors contributed to the emergence of public relations as

a profession: a growth in the global acceptance of democratic principles, growing
global social interdependence, and the emergence of direct instantaneous
communication abilities. These factors have now empowered public opinion to
agree that public relations performance is no longer a choice on the part of the
organization” (Tilson & Alozie, 2003, 2).
Other hindrances noted by Swann (2008) focused on the “limitations on freedom of

expression,” “the limits on freedom of assembly” and the practical aspect of the gender of the
621
practitioner since public relations profession is primarily populated by women. A remaining
obstacle noted is the factor (this comes from a basic text by Newsom, et al.) noting that the role
and functions of public relations in other countries are not respected as much. So the constraints
are obvious when one is interested in moving public relations theory from an American environ
to a global status. However, the growth of technology (with the Internet established in 1991)
completely changed the global environment. With access to extensive communication
opportunities without the gatekeeping function, the potential for public relations to operate in
countries where censorship is heavy seemed much more promising.
Coombs and Holladay pointed out that “the growth of international business is the fuel
for international public relations” (Coombs & Holladay, 283). These authors point out the “web
of relationships long ago exceeded geographic boundaries” (Coombs & Holladay, ) Since
international public relations has been largely ignored by the public r elations literature, the focus
on three key aspects provides a rich background of these growing opportunities.
Globalization
Obviously, the links to trade have been encouraged and liberalized in terms of policy.
However, the image of sweat shops and loss of U.S. jobs with outsourcing has complicated the
vision immensely. Certainly the public relations practitioners working in corporate are forced to
focus more on reputation management as abuses are noted. The PR role in issue management,
crisis communication, and risk management emerging are areas of expertise in public relations.
There is more and more reliance on the public relations professionals to provide leadership in
this area.
Public Diplomacy
Coombs and Holladay note that “public diplomacy represents the first application of
international public relations and retains a vital role in shaping societies around the globe”
(Coombs & Holladay, ). Although one thinks of corporate and NGOs as the players in
international public relations, it is really the nations that first emerged as needing public
relations.
These authors continue to make the distinction that “public diplomacy is between the
government and the people” as in contrast with the “traditional thinking of diplomacy between
governments” (Coombs & Holladay, , p. 299). Their argument about the “presence of public
relations is grounded in the statement about the public diplomacy-public relations connection” is
the illustration of the “Foreign Agent Registration Act (FARA) in the US” (Coombs & Holladay,
). “FARA requires all public relations personnel who work for foreign countries to register with
the Justice department” (Coombs & Holladay, ). Thus the role and functions of public relations
are officially recognized by the U.S. government. To explore the treatment of public relations in
other cultures only adds to the understanding of constraints and respect for the PR discipline.
PUBLIC RELATIONS ACCESS TO GLOBAL ACTIVITY ALLOWS FOR

MULTICULTURAL THEORETICAL DEVELOPMENT
As public relations emerged with more of a theoretical (not just models) grounding, the
first theory support was essentially borrowed from the social sciences; communication,
journalism, psychology, political science, etc. These theories examined rhetorical
communication, the diffusion of innovation, social norms theory, and certainly focused on image
622
repair theory. Such a wealth of theory contributes greatly to the public relations repertoire of
ideas when examining the nature of public relations.
As the discipline became more research oriented, it was the academics, those with degree
programs in public relations, both undergraduate and graduate, that moved the public relations
discipline forward. Through their respective associations, divisions and interest groups of public
relations were developed. These academics started to create a body of knowledge that was more
fully grounded in the public relations functions and roles. Such research brought in the newer
elements and integrated technology into the process as a key dynamic for public relations
operations. In fact, it is emerging in many discussions that the leading role public relations is
creating is making social media a critical force in the practice of public relations. Twitter,
LinkIN, texting, mobile, YouTube are a few of the prime social media utilized heavily by public
relations professionals. The degree of their expertise is astounding as these sources are utilized
for “listening” to the dialogue of the world—the conversation of the “web of relationships.”
One good example of the former approach was with the very well known book by Ries
and Ries (2004). These practitioners knew from the data gathered in the “practice” of public
relations that public relations was far more effective than advertising. In case by case, the Ries’
established the immense impact of public relations in comparison with the failures in advertising.
Most recently, Ivanov, Parker, and Sims (2009) measured the impact of promotions by
comparing and contrasting advertising and public relations. The results concretely demonstrated
that public relations was far more effective than advertising. Thus the measure of public relations
function and ultimate role suggests strongly a potential for solid theoretical development. Such
an impact can be measured in a variety of approaches.
THEORETICAL DEVELOPMENT IN PUBLIC RELATIONS:

WHERE DOES ONE START?
The Metaphor
In the process of serving on the Transnational Public Relations committee for Public
Relations Division of the International Communication Association, several sessions were
developed on how public relations to define the discipline globally. These sessions led to serious
debate and strong disagreements. What is most interesting is the discussion centered more on
metaphors than definitions. It was the goal of most of these presentations to identify and
language a metaphor that captured the intent of the public relations process. The results were
most fascinating to listen to.
The European (presenters in two instances) proposed a metaphor that suggested
“controlling” and “forcing” ideas onto publics. The response was met with great distain. Others
suggested a more “nurturing” or “cultivating” approach. In fact, one public relations academic
(personal communication, 2009) noted that the agriculture metaphor works well from the point
of view of the many elements involved in the process. Agriculture meets great challenges—
famine, weather, the physical labor of the effort, and the unpredictability of the economy (often
the rationale for such U.S. programs as “price supports.”) Obviously, agriculture like public
relations must monitor the environment (great weather interests in agriculture, literally) and be
prepared to act in a very short turnaround time to address situations. If one has animals, as like
humans, the complexity grows.
The metaphor provides an incredible power to the definition or functionality of an area of
study. To capture the essence of a discipline from a metaphoric approach is probably a most
623
dynamic exercise. It is this intention or purpose with which the research on this topic will
proceed. Although other concerns need to be also addressed.
The Infrastructure
A piece of the argument is that public relations should be “attached” or “integrated into”
organizational communication. The resistance to this idea is as vehement as the discussion on
metaphors during these sessions. Probably what many fail to recognize is the “independence” of
the functions of public relations. Public relations is the “boundary spanner” but not just from
organizations. PR is defined as being the independent factor as in an ombudsman role. This
brings public relations into an entirely different domain.
As Coombs and Holladay noted in their analysis of public relations being “corporate
centric” in research as well as the practice. When, in fact, corporations are just one of many
entities that are involved in a “web of relationships.” Moving away from the “corporate-centric”
approach allows public relations to more fully evolve to the fullest potential of what this
discipline can be—a community development facilitator of relationships.
Communication
The focus of public relations as a discipline is on communication, verbal and nonverbal.
This is the essence of the public relations process. Heath has many publications that define the
many aspects of communication in public relations and set the standard in his two volume The
Encyclopedia on Public Relations (Heath, 2005). His Burkian “wrangle in the marketplace” with
the ethical foundation provides an immense understanding of the public relations process. The
value of persuasion when used ethically provides a solid foundation for applying the principles
of the public relations process. Most importantly, as Joye Gordan describes in her theory of
social constructionism, it is the languaging that creates possibilities. It is the understanding of the
empowerment of our languaging that creates the reality of the web of relationships. Thus the
public relations discipline depends greatly on the academic excellence to prepare students for
this very demanding career.
Philosophy
Where a culture falls along the continuum reflecting the functions of public relations will
also impact how public relations is viewed. Below is the evolutionary chart of public relations
development.
FIGURE I. The Communication Process in the Public Relations Discipline

Communication
Relationship Organizational Development
Press agentry Publicity Promotions Management Positioning Facilitator
non/media persuasion managing contextual influence development
1900’s 1940/1950’s 1960’s/1970’s 1980’s 1990’s 21st Century
Practitioner-based experience some academic academic interdisciplinary practitioners/academics
The influence of the environment on public relations is well documented. As academics

and practitioner merge and use and publish research, the impact shapes the preparation and
training of public relations professionals. How a culture views public relations primary function
will affect how the discipline can operate.
624
SUMMARY
This discussion sets the stage for initiating more interaction to determine the cultural approaches
to metaphors, infrastructural, communication, and philosophical awareness about public
relations—both in role and function. The input on this focus will be utilized to better understand
the potential for developing public relations on a global level.
REFERENCES
Banks, S. Multicultural Public Relations: A Social-Interpretive Approach. Ames, IA: Iowa State
Botan, C.H., and Hazleton, Jr., V., eds. Public Relations Theory. Hillsdale, NJ: Lawrence
Erlbaum Associates, 1989.
Botan, C.H., and Hazleton, Jr., V. “Public Relations in a New Age.” In C.H. Botan, and V.
Hazleton Jr., eds., Public Relations Theory, II . Mahwah, NJ: Lawrence Erlbaum
Associates, 2006.
Gordon, J. “Social Constructionism and Public Relations.” In T.L. Hansen-Horn, and B.D. Neff,
eds., Public Relations: From Theory to Practice. Thousand Oaks, CA: Sage, 2008.
Heath, R.L., ed. Encyclopedia of Public Relations. Thousand Oaks, CA: Sage, 2005.
Ivanov, B., Parker, K., and Sims, J. “Effectiveness of Advertising and PR Message Sequencing
in Product Introductions: Corporate Credibility and Image as Moderator of Sequencing
Success.” Top paper presentation, Public Relations Division, at the 2009 National
Communication Association Conference, Chicago, 2009.
Ries, A., and Ries, L. The Fall of Advertising and the Rise of Public Relations.NY: Harper,
2004.
Swann, P. Cases in Public Relations Management. Boston, MA: McGraw-Hill Higher Education,
2008.
Tilson, D.J., and Alozie, E.C. Toward the Common Good: Perspectives in International Public
Relations. Boston, MA: Pearson Education, 2003.
625
CHAPTER 26
QUALITY AND PRODUCTIVITY
626
CMMI MISUNDERSTOOD: WHY SOFTWARE PRODUCING COMPANIES CHOOSE
SIX SIGMA VERSUS CMMI
Chris B. Simmons, University of Memphis

cbsmmons@memphis.edu
Sajjan G. Shiva, University of Memphis

sshiva@memphis.edu
ABSTRACT
With the complexity of today’s software development, companies are adopting processes
to improve the quality, on-time delivery, and the cost associated with developing software.
Improvement of software capability is crucial to the success of the organization. There are a
number of process improvement frameworks that enable organizations to improve the software
they release into the market. Capability Maturity Model Integration (CMMI), while the most
robust of the frameworks, has had a limited adoption rate. Numerous companies are moving
towards Six Sigma as the process improvement framework of choice. This research will explore
reasons why software development organizations may choose to use Six Sigma rather than the
CMMI.
INTRODUCTION
The use of process improvement techniques to continuously improve software

development cost, time, and quality has become a common practice within software
development. This research focuses on two of the most popular process improvement
frameworks and provides a comparative analysis of CMMI and Six Sigma. CMMI has taken on
the image of being a large process framework that is not tailored to fit small to mid-sized
organizations. Improvement initiatives selected and conducted by an organization should operate
in an integrated fashion, and the result should be a set of organizational processes used by the
entire organization that reflect the features of the improvement initiatives chosen (Siviy, Penn, &
Harper, 2005). There is a lack of research into why software organizations choose Six Sigma
over CMMI. It is for this reason that we propose a framework to analyze CMMI adoption. The
primary focus within this paper is why software producing companies refuse to adopt CMMI as
their process improvement framework. This paper is organized as follows: We provide an
analysis of the CMMI and the Six Sigma frameworks. We follow framework analysis by
proposing our conceptual model for analyzing factors leading to adoption. We then provide a
CMMI and Six Sigma relationship, a brief discussion of our findings, and conclude this paper.
CMMI ANALYZED
CMMI was developed by the Software Engineering Institute (SEI) at Carnegie Mellon
University and is used to provide a common platform for software and system engineering
practices. CMMI provides a framework for organizations attempting to evaluate process
capabilities and track improvement as it provides a basis for evaluating their current process
capabilities and track their progress in improving those capabilities (Chrissis, Levine, & Shrum,
2005). CMMI consists of four process areas, Process Management, Project Management,
627
Engineering, and Support. CMMI contains two models to choose from, a staged and continuous
representation model. Within this research we will focus on the staged representation and the
processes that are comprised. The staged representation is a systematic approach to process
improvement, assisting with one predetermined stage at a time. It contains five maturity levels
with proven predefined processes that allow organizations to increase maturity levels as
processes mature.
CMMI is a process improvement framework that allows organizations to effectively
communicate and increase productivity with across organizational boundaries including system,
software, and supplier management. CMMI is designed to enable smaller organizations as well
as large ones to tailor processes to fit their organizations initiative. This allows smaller
organizations to effectively communicate throughout development. CMMI also helps create a
better understanding of skills and training needed to create a learning and continuous
improvement environment. According to Alleman (2004), improvements realized with CMMI
include: reduced rework, predictable engineering and milestones, measurable improvements of
products and services and greater customer satisfaction. However, CMMI has had limited
adoption in software development organizations.
CMMI is a good process improvement framework, but contains disadvantages preventing
organizations from adopting. It is a very large framework that often appears overwhelming to
organizations. The CMMI framework gives several best practices to achieve levels of maturity,
but does not outline how and what to exactly include within particular process areas. The CMMI
framework possesses some instability when managers make the executive decision of choosing
processes to achieve a level of maturity (Huang & Han, 2006). Organizations often feel besieged
by the rigorous process improvement strategies imposed by CMMI, and smaller organizations
feel CMMI models can become expensive and time intensive (Von Wangenheim, Anacleto, &
Salviano, 2006). Alleman (2004) referred to CMMI as a framework whose processes do not
address the core issues of changing software requirements. CMMI is viewed as a costly
framework to implement and additional funds are needed to successfully achieve a specific
maturity level.
SIX SIGMA ANALYZED
Six-Sigma is a six standard deviation framework used as a statistical data-driven process

improvement approach for eliminating defects in a process within an organization. Six Sigma
was developed by Motorola in the 1980s as their internal quality improvement program. The
concept has permeated extensively through the software development industry in the United
States. The Six Sigma Define, Measure, Analyze, Improve, Control (DMAIC) process is helps
identify existing processes falling below specification and needing incremental improvement.
Define focuses on process improvement goals that are consistent with customer demands and the
enterprise strategy. The Define, Measure, Analyze, Design, Verify (DMADV) process is used to
develop new processes or products at Six Sigma quality levels. Six Sigma was developed to
increase efficiency and improve Return on Investment (ROI) for manufacturing initiatives. Many
organizations construct a Six Sigma implementation strategy and continuously follow practices
until they become successful.
Six-Sigma is considered a good process framework, but contains some disadvantages due
to lack of knowledge of processes and lack of personnel knowledge of the framework. Despite
the popularity of Six Sigma, many view it as a statistical analysis framework. Although Six
628
Sigma provides the ability to use a statistical analysis tool to uncover flaws in an existing
process, it fails to determine if the process is flawed initially, assuming that design if
fundamentally sound (Hammer, 2002). Complexity is also a disadvantage using Six Sigma,
because it forces organizations to drastically change operations and the way product is
developed. Biehl (2004) stated Six Sigma involves a brute-force approach which may focus on
incorrect solutions. Implementing a dramatic change can directly impact an organizations
willingness to acquire processes to improve the bottom line.
CONCEPTUAL MODEL
The focus of this study is why software organizations choose Six Sigma versus CMMI as
its process improvement guidance strategy. Often organizations consider assessments
conformant to these models and standards are costly and time consuming, and therefore difficult
to perform (Von Wangenheim, et al., 2006). We have surveyed various literature and achieved
common factors that attributed to Six Sigma selection and a lack of CMMI adoption. Figure 1
highlights factors that influence organizational decisions to adopt Six Sigma or CMMI. This
study aims to unveil the underlying details that limit organization from adopting CMMI.
FIGURE I: Six Sigma Versus CMMI Adoption
CMMI is notoriously perceived as a complex process improvement framework. CMMI

provides two approaches to implemention and organizations tend to misunderstand these choices.
Typically, the staged representation is less complex for new adopters, but is not always chosen as
the path. Smaller organizations perceive the complexity of assessment models, documentation,
and process-formalization practices target large organizations (Von Wangenheim, et al., 2006).
Six Sigma promotes a top-down approach gaining buy in from management to implement
practices systematically throughout the organization. Providing a seamless integration in the
organization helps Six Sigma seem less complex.
The costs of CMMI, coupled with resources and time, present a tremendous cost of start
up. Staples Niazi, and Ross (2007) provided a thorough analysis of companies surveyed, stating
35% of organizations believed purchasing CMMI level two SCAMPI B or C appraisals were too
costly for their organization. Six Sigma focuses on business objectives and allowing the
organization to continuously access processes to improve gradually. Although outside
assessments are available for purchase with Six Sigma, it is not needed to become effective with
process improvement. Available resources are a major factor when adopting a process
629
improvement framework. CMMI tends to be more resource-intensive. The time associated with
implementation of CMMI, coupled with resources and costs, appear to put it at a disadvantage
when compared with Six Sigma. Time to implement CMMI has a tremendous impact on whether
organizations move forward with implementation. Martin (2006) provided CMMI research
where a timetable from 21 months to 25 months to mature in each level. Maturing from level
four to level five the timetable drops to only 15 months. CMMI involves a considerable amount
of time implementing from inception. Six Sigma effectively manages time by prompting a boost
in performance due to time not being wasted on pointless efforts (Hammer, 2002). The size of an
organization vastly affects whether an organization will adopt CMMI versus Six Sigma. Smaller
organizations typically see CMMI as designed for bigger implementations. High maturity levels
become unrealistic in smaller organizations where supplier management is critical to achieving
market share (Martin, 2006).
The perception within Six Sigma is that it represents high quality software. CMMI is
perceived as a large process improvement framework as having tons of overhead. Smaller
organizations perceive assessment models, documentation, and process-formalization practices
target large organizations (Garcia, Miluk, Cepeda, & Staley, 2003). In order to successfully
implement a process improvement framework, a good knowledge base has to be present and
eager to adopt and transfer relative information to ensure adoption. If knowledge of either
framework is not present, adoption will become annulled. In the staged CMMI representation,
organization training is not presented until level three. Whereas, Six Sigma champions in
respective roles are proactively in training and adapting Six Sigma practices throughout the
organization. This practice makes the organizational knowledgebase more appealing to users.
When organizations consider adopting a new, or advance an existing, process improvement
framework, return on investment is heavily considered. Gibson, Goldenson, and Kost (2006)
described organizations concern with ROI measures, where data is needed for tracking related
cost and benefits. Six Sigma is marketed as a framework where return on investment is
inevitable. CMMI proclaims by improving processes and continuously optimizing, a return on
investment should come, but not guaranteed. The factors listed in this section are the most
common determinants associated with rejecting CMMI.
RELATIONSHIP BETWEEN CMMI AND SIX SIGMA
Many organizations attempting to improve processes and increase the quality of product
development, many organizations have decided to use a hybrid model to effectively leverage
benefits from several models. CMMI and Six Sigma have been blended in some situations to
create hybrid processes. Siviy, et al. (2005) depicted the integration of CMMI and Six Sigma,
and the alignment of each framework’s core competency, where CMMI adoption in the lower
maturity levels using Six Sigma as an enabler. Using both process improvement frameworks
requires extensive knowledge to successfully blend best practices within each model.
CMMI Level four and Level five provide direct correlation with Six Sigma as it enables a
data-driven that focus on reducing variation and optimizing processes (Murugappan & Keeni,
2003). Siviy, et al. (2005) validated this claim by stating CMMI and Six Sigma contains a natural
synergy between the high level maturity process areas and the Six Sigma DMAIC framework.
Biehl (2004) stated building critical software metrics into software solutions, applications can
become self correcting by enabling specific actions when process defects surface in the
improvement area. Biehl’s (2004) Six Sigma analysis within software processes correlates with
630
CMMI, and as the process improves so does the software quality. Blending Six Sigma and
CMMI assists organizations in meeting process improvement goals (Murugappan & Keeni,
2003).
DISCUSSION
The perception of Six Sigma being the less intrusive process framework we will discuss
findings as to why organizations choose Six Sigma over CMMI. The size of an organization is
the most common determining factor. Typically, small-to-medium sized organizations range
from 15 to 250 employees (Garcia, et al., 2003). Large organizations tend to lean heavily on
adopting CMMI, mainly due the abundance of resources. Small organizations lack the resource
and are often overwhelmed with the perceived complexity of CMMI. Table 1 presents findings
on the organization size and the percentage of CMMI adoption (Staples, et al., 2007).
TABLE I: Percentage of CMMI Adopters (Staples, et al., 2007)
Company Size Definition Percent of Adopters

Small Co. < 10 15%
Medium Co. > 10 < 250 65%
Large Co. > 250 100%
Six Sigma has been used to help transition to CMMI by enabling organizations to
integrate multiple improvement techniques to provide a single solution (Siviy and Forrester,
2004). Although useful in aiding companies adopt CMMI, small-to-medium sized companies
lack the resources, the knowledge, or the budget to perform this task. Binder and Lawrence
(1997) stated Six Sigma should not be applied to software development processes. Software
processes vary from project to project and manufacturing processes are highly predictable. To
critically evaluate Six Sigma versus CMMI, organizations need to thoroughly evaluate
implementing a software process improvement framework.
CONCLUSION
Our model gives insight to some of the reasons why organizations lean towards Six
Sigma versus CMMI. Organizations adopting Six Sigma over CMMI usually do so due to the
perceived complexity of CMMI. Companies tend to drift away from CMMI due to its
complexity, but there are additional factors that explain why CMMI is abandoned to implement
Six Sigma methodologies. We have concluded that in order increase efficiency in producing
quality software, a process framework tailored for software processes and development is more
suitable to increase accuracy in time, cost, and quality.
Many software developers reject change due to the potential implications of more work.
Six Sigma uses a process framework with an objective of gaining acceptance in a top-down
approach. CMMI focuses on a bottom-up approach beginning with organizations who know little
in regards to CMMI. It is imperative when creating a culture of continuous software
improvement to use a software framework that entails software specific practices to reduce cost,
improve time-to-market, and increase quality. Although, Six Sigma can compliment CMMI, it is
631
beneficial for software producing companies to begin with the Capability Maturity Model
Integration framework to improve software quality and associated process efficiency.
REFERENCES
Alleman, G. "Blending Agile Development Methods with CMMI." Cutter IT Journal, 17, (6),
2004, 5-15.
Biehl, R.E. “Six Sigma for Software.” IEEE Software, 21, (2), 2004, 68-70.
Binder, R.V., and Lawrence, S. “Can a Manufacturing Quality Model Work for Software?” IEEE
Software, 14, (5), 1997, 102-105.
Chrissis, M., Levine, L., and Shrum, S., “Capability Maturity Model (CMM) and CMM
Integration (CMMI).” Blackwell Encyclopedic Dictionary of Management Information
Systems, 2005, 1-29.
Garcia, S., Miluk, G., Cepeda, S.L., and Staley, M.J. “CMMI for Small Business Pilot Project.”
CMMI Technology Conference, 2003.
Gibson, D.L., Goldenson, D.R., and Kost, K. “Performance Results of CMMI-Based Process
Improvement.” Technical Report CMU/SEI, 2006, 1-94.
Hammer, M. “Process Management and the Future of Six Sigma.” MIT Sloan Management
Review, 43, (2), 2002, 26-32.
Huang, S., and Han, W. “Selection Priority of Process Areas Based on CMMI Continuous
Representation.” Information and Management, 43, (3), 2006, 297-307.
Martin, A. “Successful IT Application Architecture Design: An Empirical Study.” Information
Systems & e-Business Management, 4, (2), 2006, 107-135.
Murugappan, M., and Keeni, G. "Blending CMM and Six Sigma to Meet Business Goals." IEEE
Software, 20, (2), 2003, 42.
Siviy, J.E., Penn, M.L., and Harper, E. “Relationship Between CMMI and Six Sigma.” Software
Engineering Institute, 2005.
Siviy, J.E., and Forrester, E.C. “Using Six Sigma to Accelerate the Adoption of CMMI for
Optimal Results.” Carnegie Mellon University, 2004.
Staples, M., Niazi, M., and Ross, J. “An Exploratory Study of Why Organizations Do Not Adopt
CMMI.” Journal of Systems and Software, 80, (6), 2007, 883-895.
Von Wangenheim, C., Anacleto, A., and Salviano, C. “Helping Small Companies Assess
Software Processes.” IEEE Software, 23, (1), 2006, 91-98.
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SHIPPER TRANSPORTATION PRODUCTIVITY IMPROVEMENTS ON
ELECTRONIC LOGISTICS MARKETPLACES
Rahul Kale, University of North Florida

rkale@unf.edu
Paul A. Fadil, University of North Florida

pfadil@unf.edu
ABSTRACT
Electronic Logistics Marketplaces (ELMs) are the state of the art in transportation
management. It has been argued that they have a great potential to improve the transportation
performance of the participants. This article, using simulation model based on real world
shipment data from an actual shipper and business rules of ELMs, demonstrates the benefits that
may be obtained by a shipper participating on such an ELM. Results generally show that the
benefits may be substantial. This is true even in those ELMs that have been configured with the
primary intent of improving the performance of transportation carriers, without any regard
whatsoever to the performance of the participating shippers.
INTRODUCTION
One of the most promising outcomes of the internet revolution has been Electronic
Marketplaces (EMs); a form of business model which would not have been possible without the
advent of the internet. Although the best known of these marketplaces, ebay, caters mainly to
consumers, other electronic marketplaces operate primarily in the business-to-business setting.
An electronic marketplace may be defined as an inter-organizational information system where
buyers and sellers can meet to conduct business. Thus, an electronic marketplace is a form of
intermediary that establishes electronic links between buyers and sellers interested in conducting
transactions (Choudhury, Hartzel, & Konsynski, 1998). Travelocity in the airline industry and
The Seam in the cotton industry are examples of a couple of EMs that exist today. Several
electronic markets operate in the logistics field, bringing together buyers and sellers in such areas
as transportation, warehousing, and manufacturing (e.g., Descartes Systems Group, Manhattan
Associates, National Transportation Exchange, Sterling Commerce, and Transplace, etc.). The
purpose of this article is to model an electronic logistics marketplace (ELM) and demonstrate its
potential benefits to participating shippers.
LITERATURE REVIEW
As EMs have proliferated, so have their definitions. Bakos (1997) provides one of the
earliest and broadest definitions of an EM as “an inter-organizational system (IOS) that allows
the participating buyers and sellers to exchange information about price and product offerings”.
Interested readers are referred to Grieger (2003) for a detailed summary of definitions and
classifications of the EM landscape. It is argued that EMs provide various benefits to participants
such as lower search costs, reduced transaction costs, wider accessibility of a large base of
buyers or suppliers, improved flexibility, business processes automation, improvement in service
633
quality and reduction of inventory cost (Howard, Vidgen, & Powell, 2006; Kale, Evers, &
Dresner, 2007). EMs in the transportation or logistics domain have been termed as Electronic
Transportation Marketplaces (ETMs; for example by Goldsby & Eckert, 2003), or Electronic
Logistics Marketplaces (ELMs; for example by Wang, Potter, & Naim, 2007).
ELM can be used for either spot sourcing of transport services or long-term collaboration.
Spot sourcing refers to the ad-hoc procurement of transport service to fulfill an urgent, short term
need and is a price driven, arms length transaction between a shipper and carrier. These types of
ELMs typically are the so called “open” ELMs, where any shipper/carrier may participate on the
ELM and benefit from the services offered. As with many other dot-com businesses, open ELMs
have not been universally successful (Pinkham, 2001; Cooke, 2001). Long-term collaboration,
on the other hand, implies a more partnership approach between shipper and transportation
carrier. To increase their viability, some ELMs have focused on facilitating existing relationships
between shippers and carriers, using the market to supplement rather than replace, existing
relationships. This resulted in the recent development of closed ELMs, aiming not for a large
volume of transactions, but to facilitate the existing, long-term collaborative relationships
between shippers and their carriers. “Closed” ELMs are closed in the sense that the ELM is
“owned” by a specific shipper and/or transportation carrier and the owner decides who
participates and benefits from the closed ELM. It is important to note that, from now on, ELM,
unless otherwise specified, would mean a “closed” ELM.
A recent article (Wang, et al., 2007) concluded that research on closed ELMs is very
scarce. This is understandable given that ELM is a relatively new phenomenon. Especially, with
the exception of Wang, et al. (2007), there is no empirical study in the literature that tries to
investigate the impacts of these ELMs on the performance of the participating shippers and
carriers. With this background, this article would use real world data from a shipper and subject
this data to the business rules of closed ELMs. Thus, this article presents valuable insights by
answering the question: “What potential improvement may be expected if a given shipper may
have utilized an ELM to manage its transportation”.
RESEARCH FRAMEWORK
On an ELM, the participants are connected with each other electronically to facilitate
visibility of operations and share the relevant information based on who owns the ELM. Table 1
presents some sample scenarios assuming a contract between shipper-carrier for 100 units of
shipments/capacity. For example, on a shippers’ ELM, the shipper owns the ELM and there is
one-way information sharing; the participants, the shipper’s contract carrier and other
collaborating shippers and carriers share their information with the shipper that owns the ELM.
As an illustration, in scenario 1, as the shipper has access to information about the participants’
operations, the shipper knows beforehand that the contract carrier does not have enough capacity
(a deficit of 50 units). At the same time, the shipper also knows that its collaborating partners
have excess capacity available with them (50 with shipper and 50 with carrier). Thus, the
shipper, instead of losing sale, may ship the remaining 50 units through either one of the two
collaborating partners. Interestingly, though the shipper ELMs do not aspire to benefit carriers,
the participating carriers may still get some benefit. For example, in scenario3, the shipper only
has 50 units, 50 units less that the contract amount. Thus, the shipper is in a risk of defaulting
with its carrier. However, the shipper knows that its collaborating shipper has 50 additional units
that it may want to ship. The shipper may combine its load with its collaborating shipper and
634
present the contracted quantity of shipments to the carrier to avoid defaulting with the carrier.
Thus, the carrier too is benefited by participating on a shippers’ ELM. On a neutral ELM, all the
participants share information with each other; that is, there is a two way sharing of information.
As a result, the carrier may benefit from information visibility and collaboration. For instance, in
scenario 2, the shipper is 50 units short of the promised quantity and the carrier would be left
with 50 units of unused capacity. However, the carrier may pool the 50 units of additional
shipments available with the collaborating shipper and avoid underutilizing its capacity. Finally,
a carrier ELM would be owned and operated by a transportation carrier to maximize its own
capacity utilization. Though such ELMs are geared to maximize capacity utilization of the
concerned carriers, shippers too, would get some benefit. For example, in scenario 1, the carrier
has less capacity than the promised amount (only 50 units). The shipper is in a position to
potentially lose the sale. However, since the carrier knows that there is extra capacity available
with its collaborating carrier, the carrier would then pass on these shipments to the collaborating
carrier.
TABLE I: Sample Scenarios
SN Shipper Carrier Collaborating Shipper Collaborating Carrier

1 100 50 50 150
2 50 100 150 150
3 50 150 150 50
SIMULATION MODEL
The use of ELMs, as discussed in literature review, is still in its infancy. This makes
obtaining actual, archival data a very difficult task. Hence, we use simulation modeling to
investigate empirically the productivity improvements through ELMs. We now present a brief
discussion on the dependent and independent variables in our model.
Dependent Variable
Order Fulfillment: Order fulfillment measures the ratio of shipments that are shipped on
time. Shipments that are not shipped on time either result in delayed delivery or lost sales, both
of them being very detrimental to the shipper. Order fulfillment is a commonly used performance
measure in logistics (e.g. Kritchanchai & MacCarthy, 1999). We define order fulfillment as:
Order fulfillment = (quantity shipped) / (shipper requirements).
Independent variables
• Primary shipper’s requirements: This construct measures the level or magnitude of the
shipper’s requirements and the variability of such requirements.
• Primary carrier’s capacity: This construct measures the level or magnitude of the carrier’s
carrying capacity and the variability of this capacity.
• Collaborating partner’s characteristics: A shipper may collaborate with either a shipper or
another carrier, or with both.
• Type of collaboration: Shippers have four alternatives to manage their transportation.
They may manage their transportation using the conventional method, or they may
manage their transportation using one of the three alternatives: a shippers’ ELM, a
carriers’ ELM or a neutral ELM.
The experimental design has two variables at three levels and four variables at four
635
levels. That gives us (32 * 44 = 9 * 16 = 2304) 2304 parameter combinations in the simulation
model. Fifty trial replications were conducted. The results were used to find the required number
of replications for obtaining 10% precision on shipper performance. The number of required
observations was found to be 140. In order to be conservative, each parameter combination is
replicated 300 times. The methodology followed to arrive at the required number of observations
to achieve a pre-determined level of precision in simulation results is outlined in Law and Kelton
(2000, p. 511-515).
SIMULATION RESULTS AND DISCUSSION
Ordinary least squares regression is used for data analysis. Various available options for
managing transportation form one set of the independent variables. Shippers and carriers have
seven options to manage their transportation. The conventional method is used as the base case
for the regressions.
Order fulfillment forms the dependent variable and the 25 dummy variables form the
independent variables for the regression analysis (please refer to Table 2 for regression results).
The model is highly significant (it is significant at 0.01% level) and the model R2 statistic is
88.1%. The model F-statistic is 6786 for 25 degrees of freedom. Further, the coefficients on all
of our independent variables are significant at 0.01% level.
A couple of aspects are worth noting about the results. First, a shipper receives greater
benefits in terms of increased order fulfillment on shippers’ and neutral ELM than on a carriers’
ELM. Second, there is value in collaborating with more than one partner. On all the three ELMs,
the benefits of collaborating increase as the number of collaborating partners increases from one
to two. However, the added benefits from the second collaborating partner seem to be less than
the benefits obtained from the first partner.
MANAGERIAL IMPLICATIONS AND CONCLUSIONS
Shipper benefits are greater when the shipper collaborates with multiple partners rather
than with a single partner. Though there is evidence of decreasing marginal returns to
collaboration, the incremental benefits from additional partners are still substantial. Interestingly,
even though a carriers’ ELM is biased against shippers, participating on a carriers’ ELM may
provide substantial benefits to the shipper in terms of increased order fulfillment. As previously
noted, shippers receive indirect benefits on a carriers’ ELM as a consequence of their contract
carrier’s actions to improve performance. There are instances reported in the practitioner press
about carriers persuading their contract shippers’ to join carrier ELMs and even offering to pay
their shippers their participation fees as an incentive to have them join. Our results indicate that
participation on a carriers’ ELM by shippers brings benefits to the shipper, despite the bias of the
ELMs in favor of the carriers.
636
TABLE II: Simulation Results
Unstandardized Standardized
Coefficients Coefficients
Variable B Std. Error Beta t Sig.
1141.16
(Constant) 0.861 0.001 0.000
7
Shipper 0.063 0.001 0.291 95.214 0.000
Shippers' ELM, collaborating with Carrier 0.063 0.001 0.292 95.377 0.000
Both 0.105 0.001 0.483 158.011 0.000
Shipper 0.063 0.001 0.291 95.214 0.000
Neutral ELM, collaborating with Carrier 0.063 0.001 0.292 95.377 0.000
Both 0.105 0.001 0.483 158.011 0.000
Shipper 0.035 0.001 0.164 53.651 0.000
Carriers' ELM, collaborating with Carrier 0.036 0.001 0.164 53.746 0.000
Both 0.058 0.001 0.269 88.040 0.000
Medium -0.029 0.000 -0.207 -78.749 0.000
Primary shipper-carrier contract size
High -0.049 0.000 -0.352 -133.921 0.000
0.3 -0.020 0.000 -0.131 -47.000 0.000
Primary carrier coefficient of variation 0.5 -0.066 0.000 -0.438 -156.970 0.000
0.7 -0.107 0.000 -0.716 -256.775 0.000
0.3 -0.014 0.000 -0.092 -32.981 0.000
Primary shipper coefficient of variation 0.5 -0.036 0.000 -0.241 -86.339 0.000
0.7 -0.055 0.000 -0.370 -132.453 0.000
Medium 0.012 0.000 0.084 31.835 0.000
Collaborating partner's contract size
High 0.035 0.000 0.251 95.484 0.000
0.3 0.003 0.000 0.022 8.060 0.000
Collaborating carrier coefficient of
0.5 0.008 0.000 0.052 18.554 0.000
variation
0.7 0.012 0.000 0.081 29.081 0.000
0.3 0.003 0.000 0.020 7.139 0.000
Collaborating shipper coefficient of
0.5 0.008 0.000 0.052 18.785 0.000
variation
0.7 0.012 0.000 0.082 29.513 0.000
REFERENCES
Bakos J.Y. “Reducing Buyer Search Costs: Implications for Electronic Marketplaces.”
Management Science, 43, (12), 1997, 1676-1692.
Choudhury, V., Hartzel, K.S., and Konsynski, B.R. “Uses and Consequences of Electronic
Markets: An Empirical Investigation in the Aircrafts Parts Industry.” MIS Quarterly, 22,
(4), 1998, 471-507.
Cooke, J. “A Virtual Transformation.” Logistics Management and Distribution Report, 40, (3),
2001, 81-84.
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Goldsby, T.J., and Eckert, J.A. “Electronic Transportation Marketplaces: A Transaction Cost
Perspective.” Industrial Marketing Management, 32, (3), 2003, 187-198.
Grieger, M. “Electronic Marketplaces: A Literature Review and a Call for Supply Chain
Management Research.” European Journal of Operational Research, 144, (2), 2003, 280-
294.
Howard, M., Vidgen, R., and Powell, P. “Automotive e-Hubs: Exploring Motivations and
Barriers to Collaboration and Interaction.” Journal of Strategic Information Systems, 15,
(1), 2006, 51-75.
Kale, R., Evers, P.T., and Dresner, M.E. “Analyzing Private Communities on Internet-Based
Collaborative Transportation Networks.” Transportation Research Part E, 43, (1), 2007,
21-38.
Kritchanchai, D., and MacCarthy, B.L. “Responsiveness of the Order Fulfilment Process.”
International Journal of Operations and Production Management, 19, (8), 1999, 812-833.
Law, A.M., and Kelton, W.D. Simulation Modeling and Analysis. McGraw Hill Higher
Education, 2000.
Pinkham, M. “Rough Waters for e-Logistics.” Metal Center News, 41, (9), 2001, 24-26.
Wang, Y., Potter, A., and Naim, M. “Electronic Marketplaces for Tailored Logistics.” Industrial
Management & Data Systems, 107, (8), 2007, 1170-1187.
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CHAPTER 27
QUANTITATIVE MANAGEMENT
639
PERFORMANCE MEASUREMENT OF HOME APPLIANCES MANUFACTURING
COMPANY BY LEANNESS CONCEPT AND SYSTEM DYNAMICS APPROACH

aebrahimi@iust.ac.ir
S. M. Hosseini, Iran University of Science and Technology

seyedhosseini@iust.ac.ir
Arash Bakhsha, Iran University of Science and Technology

a.bakhsha@yahoo.com
ABSTRACT
An attempt has been made in this paper to forecast the performance of the home
appliances manufacturing company by system dynamics simulation approach. We applied the
concept of lean production as well as lean thinking philosophy as non-financial performance
measures come along with some financial variables for evaluating the total performance of the
company. Based on modeling approach, the leanness score has been established for measuring
the company’s non-financial capability based on the defined goals. Therefore, a company may
define and implement some improvement projects which may not have an acceptable gain in the
future. Hence, we demonstrate the application of system dynamic approach to overcome such
difficulties and enable the decision maker to implement the proper project selection in a
dynamics and uncertain environment.
INTRODUCTION
Lean production is a logical method that decreases the costs in an organization with
wastes elimination (Monden, 1983). The main objective of lean production is to eliminate waste
by reducing or minimizing variability related to supply, processing time, and demand. That is,
processing time variability cannot be eliminated unless supply and demand variability is also
reduced (Shah & Ward, 2007). Lean principles and techniques have been applied in a wide
variety of organisations, from make-to-stock to engineer-to-order industries, and even in typical
service sectors, such as healthcare. In order to apply lean principles in various areas, variants
were developed of well-known techniques, such as Kanban, Kaizen, SMED, 5S and IT
(Riezebos & Klingenberg, 2009). Lean practices related to setup time reduction, cellular
manufacturing, and quality improvement initiatives have varied direct effects on profitability,
whereas utilization of Non-financial manufacturing performance measures has a significant
direct effect on profitability (Fullerton & Wempe, 2009).
On the other hand, System Dynamics (SD) is one of the sorts of systematic approaches
which makes us possible to model complex phenomena and investigate their behavior and
consequently make appropriate decisions (Vennix, 1996). The main objective behind this
research is to employ SD to simulate the firm performance (financial and non-financial) in the
future with predefined goals and plans and variation in some variables as different scenarios and
capability for measuring the firm's leanness score in each period. Therefore, the precision of
firm's improvements project for the future, can be analyzed and corrected after simulation and
before any implementation. According to a review of the literature, manufacturing provides six
640
outputs namely cost, quality, performance, delivery, flexibility, and innovativeness. In this
highly competitive, technology-advancement manufacturing world, it is imperative to look in a
deeper and wider aspects in selecting a good manufacturing strategy via manufacturing outputs
(Chin, Zameri, & Saman, 2004). Lean production is a conceptual framework popularized in
many western industrial companies since the early 1990s. The interest on lean production is
mostly based on empirical evidence that it improves the company's competitiveness (Martinez-
Sanchez & Perez, 2001).
Two of the major characteristics of the new production paradigm known as lean
production are: the pursuit of excellence in terms of a suitable mix of performance and
continuous improvement; rethinking work organization in order to gain a flexible and effective
organizational structure (De Toni & Tonchia, 1996). Therefore, knowing about the firm's
performance in the future, needs to model the performance measurement system. Hence, we
should specify the variables (measures) and define the casual relationship between them. As
Sterman (2000) discusses, it is hard for humans to imagine nonlinear impacts and feedbacks in
complex systems. Humans often forecast and take action with the assumption of a linear
relationship between variables, though this might give rise to incorrect decisions. SD is a
methodology which analyzes complex systems. SD is a method to enhance learning in complex
systems just as an airline uses flight simulators to help pilot learn (Sterman, 2000). In his work,
Sterman (2002) concludes that since every model may contain errors, instead of validating
models by elaboration, those models which are economical and applicable must be concentrated.
To be able to improve performance effectively, it is important to identify those factors of
performance that should be particularly addressed- either because they are key to success, or
because they identify under- performance (Grunberg, 2004). In this research, we consider both
financial and non- financial performance measures in the model. The use of non-financial
measures in performance measurement implies two major problems: (1) the selection of a proper
set of measures capable of assessing and controlling all critical factors, on the responsibility of a
given manufacturing department, that act on the competitive priorities; (2) the integration of
those several measures, expressed in heterogeneous units, into a single evaluation of the overall
performance of a manufacturing department (Rangone, 1996).
MODELING STOCK AND FLOW DIAGRAM

The main goal of each company is, achieving sustainable and stable profit. According to
lean manufacturer approach, each company can increase its profit with this way: decreasing the
product unit cost continually and enter the product to market with the price less than the other
competitors. This approach, help us to model the system as shown in Figure 1– as a stock-flow
diagram.
As you see the model, if we decrease the total costs and increase the sales, we can gain
more profits in the market. But, it is so important that, all improvement activities and projects
that a company defines for elimination of wastes and decreasing the costs subsequently in a
specified period of time in the future should be seen with a glance on market price fluctuation.
That is, you may define and implement some improvement projects without expected gain in the
future. Hence, it is better to simulate these conditions before implementation. In this research, we
tried to see the elements that effects on total costs and product unit cost like: total quantity
orders, product material fixed cost, Labor Cost in a Product and product overhead cost. So, we
consider these elements and their causal effects. Time unit is taken month and the model is run
for 40 months.
641
FIGURE
FIGURE
I: I:
Stock
Stock
and
and
Flow
Flow
Diagram
Diagram
Total Profit
Total Profit
Total Costs
Total Costs
Total Sales
Total Sales
Overhead
Overhead
Cost toCost to
Price Leanness Other Other
Price Leanness Costs Costs
FactorFactor
Effective
Effective
FactorFactor Product
Product
Unit Cost
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in a Product
in a Product
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Decreasing
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a Product
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TOTAL
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(Womack& &Jones, Jones,2003;
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1993).So,So,wewesuppose
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Therefore,wewenamed namedthis thiselement
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as as
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Also, weweseesee“net
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according
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1 like:other
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642
642
improved and this factor may not be seen clearly (Womack & Jones, 2003; Monden, 1983, 1993;
Besterfield, Besterfield-Mincha, Besterfield, & Besterfield-Sacre, 2003; Soriano-Meier &
Forrester, 2002).
But, the price effect as a second factor, has seen in the model obviously and is a function
of company average proposed price to market and average products market price. Here, we
suppose the products quality is almost the same for all competitors in the market. Although it is
assumed that, the company has some plan for quality improving and customer attraction
subsequently. It means that these plans has provided by company’s managers as improving
projects for 40 next months and can be seen as lookup variables in the model. These variables
such as other wastes elimination percent, production smoothing application status, suppliers
delivering utility status, takt time application status, setup time decreasing status, job rotation
application status, function TOQ/LL, function labors efficiency (Womack & Jones, 2003;
Monden, 1983; Soriano-Meier & Forrester, 2002, Taj, 2005; Karlsson & Ahlstrom, 1996).
These graphs respected to company improvement plans in the future for getting more
leanness score and more profits. For the price factor, we should compare simultaneously two
price types; Average Products Market Price (APMP) and Average Proposed Price to Market
(APPM). If APPM is less than APMP, then the customers will attract to company and if APMP
is less than APPM, the company will lose its customer with negative word of mouth factor effect.
So, this subject, is very important for surviving in the market and having a sustainable profit. For
defining the APPM, we considered, three variables: Market price decreasing factor that related to
market and competitors, average product current price that shows the current average price of
products in the company in a specified time and price leanness effective factor that shows
leanness activities effect on products pricing. One of the other variables that effects on customer
attraction is, JIT products delivering percent that it is a function of these variables: inventory
level reduction factor, productivity progress status and a function of assignable budget for labors
training. Therefore, if company improves these variables status, it can gain more customers and
finally increase its sales.
PRODUCT UNIT COST
As mentioned before, in this model, product unit cost is a function of three key variables:
average a standard product material fixed cost, average a labor cost in a product and average a
product overhead cost. According to the previous experiments in this industry, the company
managers defined average a standard product material fixed cost for a product. But, defining
average a labor cost in a product is not simple. So, this variable is related on an auxiliary variable
named: TOQ/LL and two constants; standard labor cost in a product that defined to the previous
experiments in this industry and labor cost decreasing factor. As you know, in which companies
use lean production approach, the number of involved labors is too important. So, the company
should vary the number of labors according to the demands. So, if quantity orders increased in
the system, the company should involved more labors for production and if quantity orders
decreased, the system should use less labors.
This rule that company be able to change its labors level according to demand quantity,
named Shojinka in lean production (Monden, 1983, 1993). In this model, we tried to apply this
rule with an auxiliary variable named: TOQ/LL. This variable is a function of two variables: total
quantity order and a stock variable named, labors level. This variable shows the portion of total
quantity orders in the system and labors level in each time. So, the company assumes that this
643
portion equals to 50, there is no need for increase or decreasing the labors number and the labors
level is in equilibrium. This means that, the standard number of labors for producing a product in
this company is 0.02. Therefore, if this variable shows a number greater than 50, it means we
should increase the labors level and if the mentioned variable shows a number less than 50, we
should decrease the involved labors in production. This trend has seen as a lookup variable
named: function TQL/LL in the model. This variable and job rotation application status, effects
on fractional net involving rate and this variable is a rate variable for labors level. Also, TOQ/LL
and its related function effects on average a labor cost in a product variable. So, average a labor
cost in a product variable depends on TOQ/LL and its related function directly.
The other effective variable in product unit cost is overhead cost. We supposed that this
variable is a function of average a standard product material fixed cost, average a labor cost in a
product and the level of leanness score that company will gain in any intervals. This means, that
if the company gain more leanness score, the overhead cost will be decreased and the product
unit cost subsequently. Therefore, how can we improve the leanness score in this company? For
increasing the leanness score and implementing lean production tools in this company, lean team
constituted in the company. They built a long term plan (40 months) for achieving this goal that
is, being leanness. So, at this time, the company should be audited for clearing its leanness. So,
as the current leanness score was, 21. So, the company, needs to built some sub-plans for
achieving the higher leanness score in future.
MODEL VALIDITY AND 4 SCENARIOS COMPARISON
In order to validate the model, some conventional tests are used such as, boundary
efficiency, units’ consistency, parameter evaluation and cumulative error test (Vennix, 1996).
Modeling process has done according to lean production literature review and experts points of
view. Also, for defining the constants and lookup variables quantity, all the needed information
extracted from the company's historical data. Boundary efficiency of the model was verified by
experts' opinions. The consistency of units was verified by simulation software (i.e. Vensim).
Also, as all the information used in simulation was taken either based on experts' comments or
from historical data. Cumulative error test means that results of simulation are not sensitive to
any change in time unit. Some of variables used in the model as Total Costs, Total Profit,
Product Unit Cost, Labors Level, Customers Level and Leanness Score were taken under the
process. Accordingly, we have designed 4 scenarios by setting these parameters in the model:
APCP, APMP, Initial Customer Level and Initial Labors Level. The main result of this
simulation is that, using lean production tools and principles alone cannot help companies
survive you in the market. The reason is that the firm might lose its customers and the revenueifit
is in high leanness situation without any attention to the market price. Therefore, the higher
leanness-score, makes the lower product unit price but, it does not guaranty you for surviving in
the market without any plans for proposed price to the market.
In this paper, we presented an application of system dynamics model which investigates
and analyzes the financial and non-financial performance of a firm. This model specially is
appropriate for analysis, description and comparing the firm's situation in the future with
considering the improvement plans for its future under some conditions as parameter setting.
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FIGURE
FIGUREII:
II:Key
KeyVariables
Variablesin
inBehavior
BehaviorTrend
Trend
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645
RECOMMENDATION
The proposed model is able to measure and monitor Leanness Score in Business
Environments. The model also considers interrelations of various variables such as product unit
cost, labors level, customer level, leanness score and other dependent variables. However, an
attempt has been made to explore the impact of these factors on financial and non-financial
activities performance. One of the possible developments of this work is using the effect of the
portion of total quantity orders to labors level. This subject, influences on decreasing and
controlling the product unit cost. For a Home appliances company, 4 scenarios has been
developed and with the help of system dynamics simulation, financial and non-financial
situations has been analyzed. Our investigation demonstrates that, not only being good in
leanness concept is a sufficient factor, but also, the company should consider the market price
simultaneously. The market price fluctuation has more effect on customer attraction which has a
tremendous result on final product unit cost which provide more profitability for the firm.
REFERENCES
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and Financial Performance.” International Journal of Operations & Production
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Journal of Operations and Production Management, 16, (2), 1996, 24-41.
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1451.
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646
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Sterman, J.D. Business Dynamics, Systems Thinking and Modeling for a Complex World.
London: Irwin McGraw-Hill, 2000.
Sterman, J.D. “All Models Are Wrong: Reflections on Becoming a Systems Scientist.” System
Dynamics Review, 18, (4), 2002, 501-531.
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Productivity Press, 1988.
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Decision, 43, (4), 2005, 628-643.
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Corporation, Revised and Updated, 2nd ed. New York: Free Press, 2003.
647
APPROACHING LEAN STRATEGY MAP IN AUTO-PARTS INDUSTRIES

aebrahimi@iust.ac.ir

seyedhosseini@iust.ac.ir
Arash Bakhsha, Iran University of Science and Technology

a.bakhsha@yahoo.com
ABSTRACT
The study of lean strategy map has been found to be an important element of any
strategic planning specially in auto-parts manufacturing. Reviewing the state-of-the arts, various
systems & approaches used for measuring performance has been studied in which the concept of
Balanced Scorecard (BSC) approach was selected in this study. Also, in this paper the concept of
BSC approach has been developed for selecting the lean perspective as well as their related
objectives. For determining the lean performance measurement through the company’s lean
strategy map, a set of objectives should be driven based on the BSC concept. To determine the
company’s lean strategy map, the DEMATEL approach has been used to identify the cause and
effect relationships among objectives as well as their priorities. This study may serve as a
reference point for auto-parts manufacturing companies to identify their production weaknesses,
and help them to focus on their improvement based on their most important and suitable selected
objectives.
INTRODUCTION
During the past few decades, many companies in the world have been forced to adopt
new production strategies. Among these strategies, what seems to be an outstanding procedure is
the concept of lean production. The concept of lean production was recognized by many western
companies in early 1990's (Martinez-Sanchez & Perez, 2001). Monden (1983) defines Toyota's
production system as a logical method of production. In the alleged system, the cost of
production is significantly reduced due to elimination of many unnecessary expenses.
In 1991, Womack, Jones, and Roos studied Japanese production system on behalf of
IMVP (International Motor Vehicle Program), and named that system "lean production system"
in their papers. They studied the system by taking a close look at method of its operation and
compared it with traditional mass production systems while they corrected their criterion's which
previously had encompassed the workshops and production systems (Womack & Jones, 2003).
The lean production strategy is based on "perfection". This strategy operates on the principle that
prices must continually go down, number of defective products must reach at minimum,
inventory must reach at zero, and endless diversity of the products must be produced. Lean
practices related to setup time reduction, cellular manufacturing, and quality improvement
initiatives have varied direct effects on profitability, whereas utilization of Non-financial
manufacturing performance measures has a significant direct effect on profitability (Fullerton &
Wempe, 2009). Now the question is this: What should be done to become a lean manufacturer?
In this regard, first, an organization must identify criteria for being lean.Reviewing the literature
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showed that, utilizing performance measurement systems approaches can help an organization to
achieve those criteria in the concerned fields. We can say that performance measurement systems
started developing in early 1900's when methods of controlling budget and financial
expenditures in DuPont's and General Motors' were developed and setting performance criteria
were being accepted on wide scale, and expanded in the next 80 years (Neely & Bourne, 2000).
Ghalayini and Noble (1996), considered the performance measurement based on two phases. In
the first phase, which lasted up to late 1980's, performance measurements were carried out in
accordance with financial criteria supplied by the accounting management system. The second
phase started from late 1980's to date, some researcher call this era, the era of performance
measurement revolution (Neely, 1999). Hence, the research is devoted to studying various types
of performance measurement standards, how criteria are set, how performance is measured in
each system. Parida and Chattopadhyay (2007) carried out a study on how to set criteria for
performance measurement for a maintenance system.
Perhaps, the most widespread method for measuring performance is the method of using
Balanced Scorecard which was introduced by Kaplan and Norton in 1992. According to this
method instead of measuring everything, the companies must measure only those elements that
are directly related to the company's strategy.
EXTRACTING LEAN PRODUCTION PERSPECTIVES
Kaplan and Norton (1996, 2000) have considered four different perspectives for full
assessment of an organization: Financial, Customer, Internal Businesses processes and Learning
and Growth perspectives. In view of the fact, that scorecard process is completely dependent on
company's strategy. In this research, we have assumed that auto parts manufacturing companies
desire to become lean manufacturers and pursue that mission. According to Womack's theory, in
order to assess the activities of an organization with respect to becoming a lean manufacturer,
three groups of its activities must be examined as follow (Womack, 2006):
• Business Goals
• Processes
• Human Resources
In this study, use of scorecard system is being considered and the researcher attempts to conform
the above mentioned points to Balanced Scorecard perspectives.
Finally, with combination of Womack’s theory and the concept of Balanced Scorecard
and taking expert opinions with "Delphi method" and "Nominal Group Technique", 5 lean
perspectives have been extracted as follows:
• Financial Perspective
• Customer Perspective
• Processes Perspective
• People Perspective
• Suppliers Perspective
EXTRACTION OF LEAN OBJECTIVES
In this phase, 16 lean objectives were extracted with respect to each perspective by using
Delphi research method and Nominal- Group Technique and securing expert opinions. These
objectives have shown in Table 1.
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TABLE I: Final Extracted Lean Objectives
Perspectives Objectives
• Financial
- Profitability & Satisfied Shareholders (Womack, Jones, & Roos, 1991;
Niven, 2002; Olve, Roy, & Wetter, 2000)
- Productivity (Niven, 2002; Goran Olve, 2000)
• Customer
- More Satisfied Customers (Womack & Jones, 2003; Womack, 2006)
- Flexible & Robust Product Design
- Just-In-Time Delivery (Womack, 2006)
- More Quality & Lower Price
• Processes
- Flexible & Adequate Processes (Womack, 2006)
- Capable & Reliable Processes (Womack, 2006)
- Available Processes (Womack, 2006)
- Value Creator Processes (Womack, 2006)
- Creating Completed Link between Processes (Womack, 2006)
• Employees
- Increasing Lean Culture and Motivation
- Empowerment (Womack & Jones, 2003; Besterfield, et al., 2003)
- Expert Employees (Raayat Sanati, 2004; Womack & Jones, 2003)
• Suppliers
- Just-In-Time Delivery (Womack, et al., 1991; Womack & Jones, 2003)
- Increasing Suppliers Performance level and Their Lean Culture
(Womack, et al., 1991)
CAUSE & EFFECTS RELATIONSHIP AMONG LEAN OBJECTIVES AND MAPPING

THE LAEN STRATEGY
When the perspectives and objectives were finalized, we embarked on preparing a lean
strategy map and determining the cause and effect relationship between lean objectives. One of
the most important features of the Balanced Scorecard system is determining the cause and effect
relationship between objectives. In this research, attempt has been made to not only find the
cause and effects relationship between objectives, but also to determine their importance and
their priorities to each other. Hence, to this end DEMATEL decision-making technique along
with summary of experts' opinions, on basis of group decision-making were used. The
DEMATEL method is an effective procedure for analyzing structure and relationships between
components of a system or a number of available alternatives. DEMATEL can be priorities the
alternatives based on the type of relationships and severity of influences of them on another.
Alternatives having more effect to another are assumed to have higher priority and called
dispatcher and those receiving more influence from another are assumed to have lower priority
and called Receiver. In this research, all six steps in DEMATEL technique (Seyed-Hosseini,
2006; Wu & Lee, 2007; Wu, 2008; Hsu, Li, & Chen, 2010) for gathering the expert opinions
have been employed. In this section, at first, a matrix representing cause and effect relationship
between objectives was drawn up, then, experts were asked that in case they found a direct
impact between two objectives, to cite that important matter on the respective matrix. This was
done with the purpose of getting a consensus opinion of the experts in regard to cause and effect
relationship among the objectives.
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In the next part, we embarked on finding out the intensity of their impact on each other.
Ultimately, after determining the intensity of impact of objective on each other, and after
normalizing the obtained measurements, final measurements and their priorities were
determined. Objectives Impact Intensity and respected Normalized Weights after getting a
consensus opinion of the experts and the Lean Strategy Map have been shown in Figure 1 and
Table 2.
FIGURE I: Obtained Lean Strategy Map
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TABLE II:Objectives Impact Intensity and Normalized Weights
Rate of Effect on Rate of Effect Objective

Other Objectives from Other Total Effect Normalized
Lean Objectives (D) Objectives (R) Rate (D+R) Weight
Profitability & Satisfied Shareholders 0.000 1.783 1.783 0.056
Productivity 0.288 2.269 2.557 0.080
More Satisfied Customers 0.322 1.613 1.935 0.061
Flexible & Robust Product Design 0.594 0.355 0.949 0.030
Just-In-Time Delivery 0.597 0.709 1.305 0.041
More Quality & Lower Price 0.752 2.958 3.710 0.116
Flexible & Adequate Processes 1.756 0.187 1.943 0.061
Capable & Reliable Processes 1.649 0.547 2.196 0.069
Available Processes 1.709 0.619 2.328 0.073
Value Creator Processes 1.440 1.611 3.051 0.096
Creating perfect Link between
Processes 0.594 2.516 3.110 0.098
Increasing Lean Culture and Motivation 1.808 0.000 1.808 0.057

Empowerment 0.879 0.000 0.879 0.028
Expert Employees 1.683 0.220 1.903 0.060
Just-In-Time Delivery 1.316 0.297 1.613 0.050
Increasing Suppliers Performance level
and Their Lean Culture 0.549 0.254 0.803 0.024
CONCLUSION
In this research, a systematic & logical method is introduced for the auto part
manufacturers to enable them to extract lean perspectives and their related objectives by using
the concept of balance scorecard. In addition, by DEMATEL technique, we have been able to
come up with a cause and effect relationship among the objectives and draw a lean strategy map
for the organization. Also, we extracted the objectives priority with this method. This will help
an organization to identify and improve its weaknesses by using the higher weighted lean
objectives.
REFERENCES:
Alsyouf, I. “Measuring Maintenance Performance Using a Balanced Scorecard Approach.”

Journal of Quality in Maintenance Engineering, 12, (2), 2006, 133-149.
Besterfield, D.H., Besterfield-Mincha, C., and Besterfield, G.H., and Besterfield-Sacre, M. Total
Quality Management, 3rd ed. Upper Saddle River, NJ: Prentice-Hall, 2003.
Bhagwat, R., and Sharma, M.K. “Performance Measurement of Supply Chain Management: A
Balanced Scorecard Approach.” Computers & Industrial Engineering, 53, (1), 2007, 43-
53.
652
Fullerton, R.R., and Wempe, W.F. “Lean Manufacturing, Non-Financial Performance Measures,
and Financial Performance.” International Journal of Operations & Production
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Gafari, M. Strategic and Cultural Tools of Total Quality Management. Tehran, Iran: 2000.
Ghalayini, A.M., and Noble J.S. “The Changing Basis of Performance Measurement.”
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Management System Using a Hybrid Model.” Transportation Research, Part E, Logistics
& Transportation Review,46, (2), 2010, 222-235.
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Journal of Operations and Production Management, 16, (2), 1996, 24-41.
Marchwinski C., and Shook, J. Lean Lexicon: A Graphical Glossary for Lean Thinkers.”
Cambridge, MA: Lean Enterprise Institute, 2006.
Martinez-Sanchez, A., and Perez, M. “Lean Indicators and Manufacturing Strategies,
International Journal of Operations & Production Management, 21, (11), 2001, 1433-
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Monden, Y. Toyota Production System: Practical Approach to Production Management.
Norcross, GA: Industrial Engineering and Management Press, Institute of Industrial
Engineers, 1983.
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4, (4), 2000, 3-6.
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Butterworth-Heinemann Ltd., 1995.
Olve, N.G., Roy, J., and Wetter, M. Performance Drivers: A Practical Guide to Using the
Balanced Scorecard. Hoboken, NJ: John Wiley & Sons, 2000.
Panizzolo, R. “Applying the Lessons Learned from 27 Lean Manufacturers: The Relevance of
Relationships Management.” International Journal of Production Economics, 55, (3)
1998, 223-240.
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Iran University Of Science and Technology, 2004.
Seyed-Hosseini, S.M., Safaei, N., and Asgharpour, M.J. “Reprioritization of Failures in a System
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Taiichi, O. Toyota Production System: Beyond Large-Scale Production. Florence, KY:
Productivity Press, 1988.
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Tangen, S., Evaluation and Revision of Performance Measurement Systems. Doctoral Thesis,
Royal Institute of Technology, Stockholm, Sweden, (ISBN 91-7283-860-4), 2005.
Womack, J.P. How Do We Know How Lean We Are? Cambridge, MA: Lean Enterprise
Institute, 2006.
Womack, J.P., and Jones, D.T. Lean Thinking: Banish Waste and Create Wealth in Your
Corporation, Revised and Updated, 2nd ed. New York: Free Press, 2003.
Womack J.P., Jones D.T., and Roos, D. The Machine that Changed The World: The Story of
Lean Production. New York: Harper Perennial, 1991.
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DEMATEL Method.” Expert Systems with Applications, 32, 2007, 499–507.
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CHAPTER 28
SPIRITUALITY IN ORGANIZATIONS
655
SPIRITUALITY AS AN ETHICAL ACTION MODEL
Robert Meyers, MicroSoft Corporation

bobmeyers@live.com
Robert A. Page, Jr., Southern Connecticut State University

pager1@southernct.edu
ABSTRACT
This article examines ethical action models, which are the sets of rules or guidelines
managers use to avoid ethical problems in their jobs. Unfortunately the current models managers
use to guide ethical behavior are not reliable. Consistent ethical behavior depends on the
systematic cultivation of our spiritual nature. In the absence of a spiritual foundation, ethical
blunders are merely a matter of time. Characteristics and implications of an ethical action model
based on this spiritual foundation are explored.
ACTION MODELS
In business ethics and corporate social responsibility, the “Holy Grail” remains a set of
principles which, if faithfully implemented, guarantee ethical conduct and prevent agency
problems. While businessmen have explored a variety of ethical action models in pursuit of this
end, that goal has remained elusive. Some commentators have used this unfortunate reality to
relegate social responsibility into the realm of ethical relativity and cultural context. In contrast,
this paper asserts that individuals share a common ethical sensibility, which can be tapped by
organizations that choose to value it as a viable action model – the spiritual basis for ethical
decision making.
Beyond philosophical approaches to ethical standards, such as utilitarianism, social
justice, individual rights, and the Protestant Work Ethic (Beauchamp & Bowie, 1997; Shaw
1999; Velasquez, Moberg, & Cavanaugh, 1983), many managers search for sets of rules or
guidelines their organizations can apply in decision making contexts to “stay ethical” (Page &
Nodoushani, 2001). Unfortunately, each action model has weaknesses that makes it unreliable.
The Games Model

Some managers seem to approach business activity, and appropriate standards of ethics
for business conduct, much as they would a competitive game (Shaw, 1999). The overriding goal
is to use whatever means necessary to “respond swiftly and effectively to opportunities provided
by chance” (Carr, 1968, p. 146). By asserting the irrelevance of traditional ethics in the business
realm, this model offers the most flexibility when the stakes are high.
Researchers of ethical issues in business find this model very risky. Deception and
opportunism may be par for the course in a competitive game, but business operates in the longer
term where broken commitments carry real consequences. Many thus expect business to adhere
to “real” ethical standards, which those following the games model often fail to do.
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The Policy Model
This model holds that business ethics, just like everything else, can be managed, and
managed well, with appropriate policies and procedures. These corporate codes of ethics are
often backed by control and surveillance measures to monitor employee performance and a
discipline program to deal with violations (Beauchamp & Bowie, 1997; Cressey & Moore, 1983;
Hosmer, 1987; Shaw, 1999). This model is perhaps the most popular because it seems to be the
least ambiguous: Ethical behavior means following company policy and procedure.
Bureaucratic policies and controls typically make the organization slower and less
adaptive, which leads many to look for better options. Further, extensive and detailed policies
can become a crutch for individual ethical judgment, increasing the risk of ethical blunders when
issues are complex, and corporate policy is unclear or unknown.
The Cultural Model

Corporate culture represents shared belief and value systems among the employees of a
particular corporation or business unit (Schein, 1985), including beliefs about the nature of moral
and ethical business conduct (Shaw, 1999). When organizations develop strongly shared systems
of shared beliefs and values, the organization may take on a distinctive identity. A natural
consequence of this is the tendency to regard their policies and practices as inherently moral.
Morgan Stanley Realty president Bowen McCoy states: “To be ethical is to follow the business
as well as the cultural goals of the corporation, its owners, its employees, and its customers”
(1983, p. 107). Strong norms and values, and the pressures towards conformity they generate,
effectively define standards of ethical conduct (Shaw, 1999).
While these firmss are often cited as moral exemplars in the business community, the
potential for unethical behavior is also extraordinarily high (Shaw, 1999). This reflects the high
degree of homogeneity, trust and friendship demanded by strong cultures – conditions which can
produce coercive conformity, even groupthink, as easily as ethical decision-making.
The Multi-Stakeholder Model

Modern stakeholder theory asserts while organizations are in business to produce profit,
they are legitimate only to the extent their business practices respect the legitimate interests and
needs of all major stakeholders (Weiss, 2008). Such stakeholders include employees, customers,
vendors, government regulators, local communities, and other constituencies directly affected by
business operations. The “balanced scorecard” (Kaplan & Norton, 1996) and “triple bottom line”
(Elkington, 1994; Savitz, 2006) provide reporting methodologies that attempt to incorporate
performance relative to these stakeholders. Major studies have concluded that firms that follow a
balanced multi-stakeholder approach consistently outperform firms that do not (Kotter &
Heskett, 1992).
While this model is currently considered the best practice, it tends to be more reactive
than proactive. “Respecting” the interests of the various stakeholders while pursuing business
goals often amounts to little more than oiling the squeakiest wheels. In addition, the model’s
strong emphasis on external reporting combined with weak guidance on rigorous and comparable
metrics make it too easy for an organization to develop an overly rosy view of itself.
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THE SPIRITUALITY BASE
In defining an ethical action model based on spirituality, the distinction between

authentic spirituality and mere outward religiosity is critical. Religiosity, or outward adherence
to a belief structure such as an organized religion or corporate culture, may or may not be an
outgrowth of inclusive spirituality. In some cases it is merely a cover for exclusive and prideful
attitudes and behaviors, which are the effective antithesis of spirituality. The characteristics of
spirituality and religiosity are independent, as illustrated in the table below:
Table I: Belief Paradigms
Spirituality Pride
(Inclusive Focus) (Exclusive Focus)
Religious Charitable Believers Dogmatic Elitists
Non-religious Virtuous Independents Amoral Opportunists
The focus here is on authentic spirituality, regardless of whether it is coupled with any particular
set of religious beliefs or practices.
Common Moral Sense

The major religions, when properly applied and understood, are all attempts to encourage
and develop our spiritual nature, and therefore historically share many principles, creating a
moral and ethical common ground. As an example, consider that virtually all of the major
religions incorporate some form of the “Golden Rule” as a core ethical principle. The Christian
formulation is perhaps the most well-known: “As ye would that men should do to you, do ye also
unto them likewise” (Luke 6:31, KJV).
Some philosophers criticize the Golden Rule as insufficient or unreliable as an ethical
guide (Kant, 1993; Nietzsche, 1974). However, this perceived failure comes from trying to use it
as a formulaic abstraction that can replicate, or replace, our inherent moral sense. In fact, the
Golden Rule is more properly understood as a repudiation of the formulaic approach to ethics.
The Golden Rule states that our own deepest desires and intuition are the most reliable
guide to how we ought to treat others. It asserts the existence of an inherent individual capacity
to make ethical decisions, even in situations where rule-based approaches fall short. The point of
the Golden Rule is that we don’t need to reverse-engineer our moral sense; we just need to use it.
If this moral sense is indeed the only reliable foundation for ethical decision-making, one factor
causing other action models to be unreliable is almost certainly this: they fail to fully embrace it.
Observed Characteristics
To construct an ethical action model that more fully embraces our moral sense, we must
consider some of its observed characteristics.
It does not constrain itself to proscriptive guidance. True, our moral sense speaks
often in the negative sense (“Thou shalt not…”), but it seems just as capable of calling us to
action, to do something good, to help another in need. The principle of compassion or empathy
toward one’s neighbor goes far beyond the injunction to “do no harm”.
It does not constrain itself to drawing a single boundary between good and evil.
Instead, our moral sense seems always to urge us toward the best option available in each
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situation. Thus one must in some degree betray their moral sense even to settle for second-best,
though it may still be well within what we consider the “good” category. To stay true to our
moral sense, we must abandon the notion of “good enough”, and choose only the options that our
moral sense indicates are the best ones available.
It does not constrain itself to any “ingroup”. Despite a known tendency to be more
sympathetic to those who are like us in some way, the Good Samaritan in us still tugs at our heart
strings for virtually any stranger along the roadside.
It does not constrain itself to the short term. In fact, there is no horizon beyond which
our moral sense doesn’t care. It regularly urges us to do good even when the benefits of the act
may not materialize for a very long time. Both direct and indirect consequences merit
consideration. In extreme situations our moral sense may even call upon us to give our lives for
the good of future generations. In short, our moral sense tells us the future matters – all of it.
Our ability to respond to our moral sense can be improved or diminished. While the
whisper of conscience is uniquely discernible, it is seldom deafening. Without a consistent effort
to seek out and follow its promptings, it is easily lost in the noise of natural biases, strong
emotions, and tempting rationalizations. These influences distort our perception of our own and
others’ needs and intentions, the facts in a given situation, and even right and wrong. Spectacular
examples of people who lost the ability to discern and follow their moral sense over time are
unfortunately household names. Conversely, notable examples also exist of those who refined
their moral competence to enable ethical decision-making in the most trying circumstances.
IMPLICATIONS
A spirituality-based ethical action model acknowledges the existence, essential

characteristics, and importance of our individual moral sense. In this section several critical
elements of such an action model are discussed.
1. Focus on doing good. Many organizations have made commendable steps toward
more ethical cultures. A notable example is Google, with its much talked-about informal
corporate maxim, “Don’t be evil,” (2009, webpage). However, even this stance has not
inoculated Google from major ethical issues. This suggests it is still far too easy to conclude a
particular course of action is “not evil” or “does no harm,” in order to yield to prevailing
management expediencies. Randall observes:
Few men who are able and mature enough to carry significant responsibility in the
business world transgress the general code of morality with the conscious intention of
doing wrong…[Instead,] they plunge into action without pausing to reflect upon the
moral implications of the course to which they are committing themselves and their
corporations (1967, p. 138).
Aspiring only to “avoid evil” provides only proscriptive guidance and can build man
illusion of morally equivalence: they all fail to register as “evil”. Over time these constraints
quietly train the individual to ignore the moral sense that is urging them to a higher standard. To
ensure ethical decision-making remains top of mind at all times, organizations must adopt a
proactive approach to ethical behavior. They must commit to identify and pursue the best option
in each situation, doing the most good possible with the available information and resources.
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2. Consider all potential stakeholders. Organizations must also extend the concept of
“stakeholders” to potentially include everyone and everything, whether impacted directly or
indirectly. If the impact of an action on any potential stakeholder can be reasonably anticipated,
it must be a factor in making the decision. This deliberate focus on compassion toward all men
ensures a less egocentric decision process. Perhaps this is why the Apostle Peter taught: “And
above all things have fervent charity among yourselves: forcharity shall cover the
multitudeofsins.” (1 Peter 4:8, KJV)
In the alchemy of man's soul, almost all noble attributes - courage, love, hope, faith,
beauty, loyalty - can be transmuted into ruthlessness. Compassion alone stands apart from
the continuous traffic between good and evil proceeding within us. Compassion is the
antitoxin of the soul. Where there is compassion, even the poisonous impulses remain
relatively harmless (Hoffer, 1979, p. 43).
Asserting the relevance of so many potential stakeholders may feel overwhelming.
Obviously no organization can be all things to all people, nor can it “run faster than [it] has
strength” (Mosiah 4:27). Prudence suggests that rather than jump at every chance to do some
good for somebody, organizations and individuals focus primarily on matching their core
competencies with unique opportunities.
3.Use policy sparingly. To avoid the temptation to over-codify ethical behavior,
organizations must ensure that policy is aligned in both its nature and specificity with the goal of
encouraging and relying on individual moral decision-making. For example, policy could
appropriately be used to clarify non-obvious legal and ethical obligations, defensively codify the
most serious violations, and reinforce, by the consistent use of non-specific language, the
expected exercise of individual ethical judgment.
Conversely, policy should not be used to detail the obvious application of obvious ethical
principles (“Don’t steal pencils.”). Such policies are a clear vote of no-confidence in the
employee’s ability and willingness to make ethical decisions. It is far more important to set
expectations – especially in small things – that encourage a sense of individual responsibility for
ethical behavior.
4. Assume full responsibility. Another important step is to clarify the precedence of
ethical judgment between the organization and external entities. Many businesses find
themselves in ethical trouble because they chose to “follow the money” down an ethically
hazardous road over the objections of employees’ individual moral compass. Rationalizations for
this wandering are familiar: “no sense leaving money on the table”, “if we don’t provide it,
someone else will”, “who are we to judge”, “everyone is doing it”, and so on. Managers must be
continually watchful for this subtle line of thinking and reinforce that when a decision has a
moral component, it is ultimately the employees’ responsibility to use their own moral judgment
to identify the best option and pursue it.
5. Be humble. While our moral sense is the key to reliable ethical decision-making, no
individual is an infallible practitioner. Each of us is subject to psychological biases and human
weakness that can compromise our ability to see the ethical implications clearly. Organizations
with strongly shared values are also at risk of developing cultural hubris, wherein individuals
start to view the organization as inherently moral.
The most practical way to cultivate the humility that mitigates these risks is to operate
with as much transparency as possible, both internally and externally. When motives are not
quite pure, few things provide the needed nudge toward a sound ethical decision better than the
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“light of Day” rule -- the assurance that today’s decisions may become tomorrow’s headlines.
Even when motives are untainted, such transparency will help catch and correct human bias.
CONCLUSION
Some will argue that most individuals simply do not want to take responsibility for
ethical decision-making. It certainly expedites decision making -- freed from weighing difficult
tradeoffs, focused on profit maximization at any and all costs, the path becomes clear. It is also
true that, to date, empirical research does not support the premise that ethics pays -- the most that
can be said with any degree of confidence is that the costs of ethical compliance and social
responsibility are often offset by both anticipated and unanticipated benefits (Weiss, 2008). On
this basis, it is simple to conclude that calling for an increased focus on ethics, above and beyod
current efforts, is hopelessly idealistic and naive.
Perhaps, but there is another possibility. When the Greek Eudiamonists debated whether
Mankind was real, they came to the conclusion that most of the time, people were not real. Their
actions, desires and beliefs were so inconsistent from one context to the next, this metaphysical
chaos fragmented their souls and their reality (Norton, 1976). The promise, repeated in many
religious traditions as well, is that for those few with the courage and conviction to sort through
the chaos in their souls, and become true to themselves (the religious terminology is single-
minded before God), reality changes. Their personal genius flourishes to the extent of
influencing their environment, they discover personal influence and charisma, and they can tap
into spiritual powers reserved for those who are truly pure in heart. Sounds like wellsprings of
potential sustainable competitive advantage for those businesses lucky enough to have them as
employees, and principled enough to support their spiritual integrity.
The moral of this story for business is simple -- half-hearted efforts are not good enough.
The true potential of ethics and social responsibility manifests itself with complete commitment.
Nothing less will suffice. When an organization supports some ethical behaviors, but ignores or
suppresses others, it cannot honestly claim that ethics does not pay, because it has not been
consistently ethical. They should not expect good karma, or divine blessings, for mixed
performance -- those kick in when people consistently sacrifice to develop character and honor
commitments, not for “hit and miss.” Thus we argue that the promise of ethics and social
responsibility has not manifested itself as we expect because the hypothesis remains untested. As
the adage goes, “almost only counts in horseshoes and hand grenades.” When an organization
commits all the way, selects the most ethical people it can find, and honors their higher nature on
the job, only then will the nature of the idealism of the ethics be revealed, and we expect a
glorious revelation.
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by Walter Kaufmann. New York: Vintage Books, 1974.
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Proceedings of the Annual Conference of the Institute for Behavioral and Applied
Management, Greely, CO: IBAM, 2001, 73-81.
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Economic, Social, and Environmental Success — And How You Can Too. New York:
Jossey-Bass/Wiley, 2006.
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TEAM EFFECTIVENESS:
THE TURBULENT ROLE OF ENVIRONMENTAL TURBULENCE
Lawrence E. Zeff, University of Detroit Mercy

lawrence.zeff@udmercy.edu
Mary A. Higby, University of Detroit Mercy

mary.higby@udmercy.edu
ABSTRACT
Research on teams follows two major streams: descriptive and prescriptive. To more
effectively prescribe requires an understanding of the dependent variables that affect
performance and the corresponding independent variables that have a positive impact on them.
This paper identifies the dependent variable of skill sets, specifically the ratio of technical to
political skills required for peak performance, and the independent variable of environmental
turbulence. Both the team’s macro- and micro-environments are included to identify the impact
of the macro-environment on the organizational context, the macro-environment directly on the
team’s performance, and the micro-environment on the team.
INTRODUCTION
This paper describes how a team’s environment affects performance. Environments have
two layers, micro- and macro-, and we hypothesize a relationship between them and skill sets
required to enhance effectiveness. Both technical and political skills are necessary for teams to
succeed and we provide a rationale for increasing political skills in both turbulent and stable
environments. We indicate how macro-environmental turbulence directly increases the necessity
of a team’s political skill set, and increases the turbulence of the micro-environment, which
requires additional political skills for a team to successfully complete its task.
Reporting on previous research Zeff and Higby (2008) hypothesized: “The composition
of needed skill sets is a function of the amount of turbulence in an organization’s environment.”
(p. 300) The organization’s environment identified by Emery and Trist’s “Causal Texture of
Organizational Environment,” (1965) describes the independent variable while the ratio of
political skills to technical skills is presented as the dependent variable. Emery and Trist’s
description of an organization’s environment and research on technological discontinuities, e.g.,
really describe a team’s macro-environment while Katz’s (1997) description, Gersick’s (1988,
1989) relationships and Katzenbach and Smith’s (1993) definitions, e.g., all describe a team’s
micro-environment. The direct relationship described by the hypothesis stated above must be
expanded to add a more realistic level of complexity to account for multiple layers of interaction.
LITERATURE REVIEW
Team literature follows two streams of research: one is more descriptive as it depicts the
formation of teams, distinguishes teams from groups, identifies team stages of development, and
occasionally predicts future behavior based on present activities; the second is more prescriptive
as it attempts to provide information on how to enhance team effectiveness.
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Description of Teams
A team is “a small number of people with complementary skills, who are committed to a
common purpose, set of performance goals, and approach for which they hold themselves
mutually accountable” (Katzenbach & Smith, 1993, p.112). Katz (1997) suggests that high
performing teams are empowered, self-directed, and cross-functional to have complementary
skills. Katzenbach and Smith (1993) distinguish between teams and groups. Teams work to
develop direction, momentum and commitment by identifying a meaningful purpose. This
purpose for most successful teams is shaped in response to either a demand or opportunity
provided by upper levels of management. Groups, on the other hand, have individual rather than
mutual accountability of teams. The output of groups is focused on individual work-products as
compared with the collective outputs of teams. Effective teams develop a strong commitment to
a common approach. It is developed by the team as they agree on the specifics of work and how
individual skills are integrated to advance team performance. Team members are committed to
working together and agree to achieve a common goal.
Tuckman (1965) reviewed 55 articles dealing with stages of small group development in
order to isolate concepts common to group life. From these concepts he developed a generalized
model of change in the life of a group. He evaluated therapy groups, human relations training or
T-groups, and natural and laboratory-task groups regarding tasks and interpersonal activities. He
identified “realms” and considered the interpersonal realm (group structure) and the task-activity
realm. Tuckman proposed a model based on developmental stages over time and group activity.
The essential correspondence between the group structure realm and the task-activity realm led
Tuckman to summarize the four stages as “forming,” “storming,” “norming” and “performing.”
In following up on this research, Tuckman and Jensen (1977) reviewed twenty two
empirical research studies to further test the Tuckman model (1965). As a result of this review,
Tuckman and Jensen (1977) amended this model to include a fifth stage of “adjourning.”
Team Effectiveness: Prescription for Teams

Hackman, in an interview with Diane Coutu in Harvard Business Review (Coutu &
Beschloss, 2009), questions the common assumption that groups complete tasks faster than
individuals:
I have no question that when you have a team, the possibility exists that it will
generate magic, producing something extraordinary, a collective creation of
previously unimagined quality or beauty. But don’t count on it. Research
consistently shows that teams underperform, despite all the extra resources they
have. . . . So you have two strikes against you right from the start, which is one
reason why having a team is often worse than having no team at all. (p. 100)
Most research that tries to provide information on how to increase team effectiveness prescribes
ways to prevent the outcome that Hackman alludes to above.
Cohen and Bailey (1997) identified three broad categories of team design features
required to create the conditions of effective performance: group composition, task design and
organizational context. Teams in many organizations may not meet this condition. The extent to
which a team’s purpose is clearly stated rather than focused on achieving a short-term goal is
important for team commitment and effectiveness (Wageman, 2001). An enabling structure
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includes five basic design features: appropriate size; optimal skill diversity (Ancona & Caldwell,
1992; Ray, Zuckerman, & McEvily, 2004; Thompson & Brajkovich, 2003); task
interdependence so members are dependent upon one another to accomplish the overall work
product (Wageman, 1995); challenging task goals with “stretch performance targets”
(Katzenbach and Smith, 1993); and, articulated strategy norms (Hackman, 1992). A supportive
organizational environment provides a reward system based on team performance (Cohen &
Bailey, 1997; Hackman, 1987; Wageman, 1995), an information system that provides members
with data required to competently perform their work, an educational system to provide training
or technical consultation (Edmundson, 2003), and material resources necessary to complete the
work product.
Edmundson (1999) observed team performance and effectiveness improved when there
was a positive relationship between team psychological safety and learning behavior. In this
context psychological safety was a shared belief held by members of a team that it is safe for
interpersonal risk taking, allowing individuals to ask questions to increase the understanding of a
specific problem. Van Der Vegt and Bunderson (2005) concluded that under the right conditions,
expertise diversity can be a major factor in intra-team learning and promote overall team
effectiveness. Payne, Benson, and Finegold (2009) identified five attributes of high performing
teams, including knowledge, information, power, incentives and opportunity/time.
This literature review reflects how internal team composition and skills can lead to
improved team performance. It does not explain within which circumstances these skills would
be more productive and which environments they would no longer fit. Moreover, individual and
team characteristics comprise the dependent variable when related to an ever evolving
environment. That is, effective team skill sets are a function of the type of environment.
Micro-environment
One of the key determinants of the skill set requirements is the nature and extent of
influence of the team’s environment. This environment consists of both macro- and micro-
environmental sectors. Most of the research in this area concentrates on the relationship between
a team and its micro-environment, that is, the organizational context for any team.
Descriptive approaches to team development consider teams as closed-systems
(Goodstein & Dovico, 1979). Gersick (1988) suggests these models are particularly limited in
their usefulness for organizational task groups. She indicates how assignments, resources and
criteria for success often come from organizational contexts (see also, Hackman, 1987). Gersick
(1988) creates a punctuated equilibrium model of group development as a result of studying
eight groups in detail. At the transition point in her model, moving from phase one to phase two
as she calls them, there is a renewed emphasis on micro-environment requirements. “The leap
forward on the task coincided with a change in the team’s relationship with its organizational
context.” (Gersick, 1988, p. 24)
Seers and Woodruff (1997) attempted to replicate Gersick’s punctuated equilibrium
model. In one study, they noted the temporal pattern postulated by Gersick. In a second study
where students worked on two tasks sequentially, task pacing with a deadline was observed.
However, Tuckman’s (1965) four stages were not observed. Seeger (1983) noted that the kind of
stages suggested by Tuckman’s (1965) model should not be expected when group members have
prior shared experiences.
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Macro–environment
Much of the literature on organizational life cycle and technological impact on
organizational change, along with Emery and Trist (1965) and expanded by Terreberry (1968),
create links between a team’s macro- and micro-environments. For example, Miller and Freisen
(1984) develop five phases of an organization’s life cycle, including Birth, Growth, Maturity,
Revival and Decline. Their analyses indicate heterogeneity increases as you move through the
cycle, as does hostility. Organizational size and product offerings increase as you move through
stage 4 and decrease in the decline stage. The administrative task becomes more complex and
therefore structural sophistication also increases as you go through stage 4. Decentralization of
day to day tasks increases, but surprisingly, strategic decision making becomes more centralized.
Drazin and Kazanjian (1990) re-analyzed Miller and Friesen’s (1984) data, and found rather than
five phases, that a four or even three phase model provided more support for the concept of an
organizational life cycle. They did reinforce, however, consistent links between a team’s macro-
and micro-environments.
Emery and Trist (1965) identify four ideal types of “causal texture” of the environment:
“Placid, randomized environment,” is Step One; Step Two they called “placid, clustered
environment;” Step Three, called “disturbed-reactive environment;” and, Step Four, or “turbulent
field.” Punctuated equilibrium literature (Gersick, 1991; Tushman & Anderson, 1986) suggests
that organizational change is best described by a long series of evolutionary, incremental changes
with short abrupt revolutionary spurts followed by the more stable small, incremental
improvements. Tushman and Anderson (1986) use technology as an example of a direct
application of this process. They found that discontinuous change is more reflective of successful
organizations than are small incremental improvements. We might initially hypothesize the
evolutionary part of organizational change processes would require more technical skills while
the radical evolutionary parts of the change process would require more political skills.
However, evolutionary periods in the macro-environment could create turbulence in a team’s
micro-environment. Thus, the relationship needs to be defined in terms of turbulence of a team’s
total environment as it affects the required ratio of technical skills to political skills in a team’s
skill set.
Tushman and Anderson (1986) suggest an industry-wide process comparable to a
punctuated equilibrium process of individual firms. They suggest relatively stable relationships
exist within an industry when a dominant design of a product class is in place. When this design
is questioned and there is a period of “technological ferment,” competition is high and
technological development “focuses on elaborating a widely accepted product or process.”
(Tushman & Anderson, 1986, p. 441) Innovation and competition increase at this point as does
organizational risk-taking in order to try to become the firm with the next dominant design. The
reward for this risk includes the benefits of being a first mover. This describes a revolutionary,
not evolutionary, period ending when a new dominant design emerges. With the discontinuity
ended, a new period of relative stability with small improvements begins. This level of analysis
seems more consistent with product life cycles than environmental causal textures.
DISCUSSION
Hypothesis revisited: A team’s needed skill set is a function of the amount of turbulence
in (a) the macro-environment, (b) the micro-environment created by the macro-environment, and
(c) the micro-environment.
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Previously, Zeff and Higby (2008) considered only the direct impact of turbulence in the
macro-environment on the team. In particular, the major critical skill set required for team
success in Steps One and Two of Emery and Trist (1965) would include a higher proportion of
technical skills with minimal internal interpersonal/political skills. Since there are few causes for
change in the external environment, there are very few externally directed political skills
necessary for improving team performance. As the organization evolves into Step Three and/or
Four, the requirement for a skill set heavily laden with political acumen appreciably increases.
Not only are sources for change found more in the external environment, the degree of relative
uncertainty increases substantially in Step Four. Risks are, therefore, much greater and the need
for additional knowledge and information from the environment dramatically increases. A
“turbulent field” requires the organization to employ boundary spanning sensors to gain the
knowledge necessary to understand, adapt to and perhaps even influence this dynamic
environment. It is under these types of environmental conditions that Druskat and Wheeler
(2003), and Ancona and Bresman (2007), seem to be correct in their conclusions.
Political skill sets provide the necessary abilities to interact with and extract the needed
information from external sources. Moreover, political skill sets are essential for the team to be
able to influence the organization’s environment, making it significantly more efficient and
effective. This skill set actually allows the organization to become more proactive rather than
taking a more passive, reactive role. Performance also increases as the level of dysfunctional
stress is controlled and reduced. Team performance based exclusively on technical skills would
not be at all effective since it would not be aware of any environmental changes, would not have
new information and would be unable to adapt. Failure to adapt results in a lack of fit between
team structures and processes, and the situations in which they find themselves. As important as
those technical skills were in Steps One and Two and perhaps even early in Step Three, they are
insufficient in a highly dynamic environment. Performance must, therefore, decrease with heavy
reliance on technical skills in a Step Four environment.
One implication of this proposed linkage is technical skills are more important than
political skills when environmental turbulence is low. It is inaccurate, therefore, to suggest that
political skills are always equal to or more important than technical skills (or, in Ancona and
Bresman’s (2007) terms, an external focus should not be integrated with an internal focus for
high team performance when the environment is not dynamic).
Their conclusion (Ancona & Bresman, 2007) appears to be based on the premise
that environments faced by all companies are Step Four types or at least Step Three. Just
glancing at Census Bureau data on “Statistics about Business Size” for 2004
(http:www/census/gov/epcd/www/smallbus.html) indicates that less than 50% of all employees
work for companies with 500 or more employees. In addition, 18.4% of the 115 million
employees work for companies with fewer than 20 people on its payroll. Many of the 58 million
or so people working in smaller companies face Step One or Step Two environments and are,
apparently, beyond the scope of their conclusion. While we agree with their conclusion as far as
its goes, our proposed linkage goes beyond the limitation identified here.
Including the second layer of the environment, namely, the team’s micro-environment,
the turbulence in the macro-environment has a major affect on the organizational context.
Describing environmental change as a process of punctuated equilibrium (e.g., Miller & Friesen,
1984) and noting technological discontinuities (Anderson & Tushman, 1990), provide the extent
to which a team’s micro-environment must adapt to its macro-environment. It seems clear that a
turbulent environment described in Step 3 and particularly, Step 4 of Emery and Trist will
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increase the turbulence within the organization. Punctuated equilibrium, as a process of change,
describes internal organizational activities as being very turbulent during periods of
revolutionary change. But it also suggests during the long periods of evolutionary change the
possibility and often the likelihood of turbulence within the organization as it tries to improve
upon what Anderson and Tushman (1990) call dominant design. Each incremental improvement
can be the result of significant turbulence. For example, a design team may have an
organizational context of significant uncertainty even when the macro-environment is in a
relatively stable state. Our previous suggestion that macro-environment stability would need a
higher ratio of technical to political skills seems now to have been overstated. Because
turbulence in both the macro- and micro-environments requires a lower ratio of technical to
political skills, a more complete description of the multiple layers of the environment seems to
lessen the role of technical skills and increase the necessity of political skills within the team
skill set. “A good team will satisfy its internal or external clients” (Hackman interview, Coutu &
Beschloss, 2009, p. 102).
And Gersick (1988) indicates the critical link between the team and its micro-
environment at the beginning and in particular what she calls, “the temporal mid-point of its
calendar.” (p. 18). Gersick noted a major improvement in task performance at this mid-point
which coincided with a significant change in the team’s relationship with its micro-environment.
There were both new contacts and revised task descriptions stemming from political relations
with the organizational context. Fresh ideas from the micro-environment were critical in
ultimately resulting in teams’ task completion.
Traditional models of group development do not predict a midpoint transition.
They present groups as progressing forward if and whenever they accumulate
enough work on specific developmental issues – not at a predictable moment,
catalyzed by team members’ awareness of time limits. Traditional group
development models are silent about team-context relations and the influence of
such relations on teams’ progress. The findings reported here suggest that there is
a predictable time in groups’ life cycles when members are particularly
influenceable by, and interested in, communication with outsiders. Cases in which
task delegators contacted teams at this point suggest this interest might be
mutual.” (Gersick, 1988, p. 29)
Interaction with the micro-environment at this mid-point in their life’s calendar requires strong
political skills.
At the completion of teams’ tasks, Gersick (1988) notes that “their explicit attention
toward outside requirements and expectations rose sharply. In every team, discussion of
outsiders’ expectations was prominent at the last meeting.” (pp. 30-31) So, political skills were
necessary for each of the eight teams studied by Gersick (1988) at the beginning, at the mid-
point and at the completion of their assigned work and, therefore, their existence.
CONCLUSION
Impact of a team’s macro-environment suggests teams perform better when political

skills dominate required skill sets as turbulence increases. How can team performance be
improved? This paper suggests that macro-environmental turbulence should affect the ratio of
technical to political skills when identifying appropriate members for a particular team. Degree
of turbulence increases the necessity for reducing this ratio. Furthermore, this turbulence
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increases the degree of uncertainty in a micro-environment and this increased turbulence also
puts pressure to reduce the ratio of technical to political skills when constructing a team. Finally,
degree of turbulence within the micro-environment resulting from an internal impetus for change
further increases the need for political skills. The role of politics resulting from the multiple
sources of turbulence is dramatically higher than we previously reported (Zeff & Higby, 2008).
Teams should be considered from an open-systems perspective which increases the need for
filling the role of boundary spanner. As turbulence in each of the two layers of the environment
increases, the political skill requirement for boundary spanners also increases. The overall skill
set for a given team tilts more in favor of political skills.
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CHAPTER 29
SPORTS MARKETING
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CONTENTIOUS ISSUES IN PROFESSIONAL BOXING: CAN THE SPORT BE
REPOSITIONED AND BRING CREDIBILITY TO IT?
Felix Abeson, Coppin State University

fabeson@coppin.edu
ABSTRACT
Professional boxing has been plagued by the issues of its brutality and risk to the life of
boxer; and corruption. Many articles about the safety, medical effect and corruption have been
written. The Congress of the United States has been involved in issues of risk and exploitation of
boxers. The purpose of this paper is not to counter the scientific evidences on the risk, trauma
and death of professional boxers but instead, it looks at some of the evidences; and measures to
reduce the health risk in boxing were suggested. Actions that can be taken to eradicate corruption
in boxing, and reposition the sport were suggested.
INTRODUCTION
Boxing was an ancient Olympic games. The sport was exhausting and brutal. The Greeks
fought without regard for weight differentials and without interruption; the match ends only
when a fighter lost consciousness or raised his hand in resignation. Boxers wrapped heavy strips
of leather around their hands and wrists.
Since World War II, boxing, also known as Sweet Science, has proceeded amid
corruption and, at times, chaos. Restriction of title fights to closed-circuit television, the
proliferation of organizations claiming to sanction fights and proclaim champions, referees and
or judges, controversial decisions, and claims of exploitation of lower-class fights have
threatened its appeal. The big issue that has plagued boxing is its brutality and risk to the life of
boxer. The United States Congress has been involved in the issues of risk and exploitation of
boxers.
To understand the sport of boxing, it is important to know the different parties involved
and the role they play. Unlike major league baseball, professional football and professional
basketball, boxing does not have a centralized governing body that governs all the different
sanctioning organizations of the sport. The absence of a centralized body is causing many
problems in professional boxing. Instead of a centralized body, professional boxing relies on the
interconnected of many essential players—the boxer, the manager, the trainer, the sanctioning
organizations, the promoter and the state athletic commission.
The Boxer
Without the boxer there will not be a boxing match. The boxer is the person who is
throwing and receiving punches. In short, the boxer is the one who takes the punishment and
thereby puts his/her life in danger.
The Manager
The manager negotiates fight contracts; he/she tries to get the most amount of money for
the boxer. He/she is also responsible for making sure that the boxer fights in an environment that
672
is safe for the boxer. The manger is expected to act in the best interest of the boxer. It should also
be mentioned that there are some boxers who manages themselves.
The Promoter
The promoter is responsible for getting the boxer fights. This means that the manager
must sign the boxer to a contract with a promoter. Usually, the contract between a boxer and a
promoter is one in which the promoter agrees to arrange certain number of fights (bouts) for the
boxer for a specific amount.
The Trainer
Before a boxer gets into the ring for a fight he/she is expected to be mentally, physically
and emotionally fit. It is the responsibility of the trainer to prepare the boxer for a fight. The
training may take place in the state the boxer lives in, in another state and sometimes in another
country. The training usually involves sports psychologists, dieticians, physical condition
trainers, etc.
The Sanctioning organizations

There are four major sanctioning organizations: The World Boxing Association (WBA),
the World Boxing Council (WBC), the International Boxing Federation (IBF) and the World
Boxing Organization (WBO). The World Boxing Association is the oldest of the organizations.
The State Athletic Commission

State boxing commissions regulate boxing. State Commissions are responsible for
establishing and enforcing regulations in order to protect the health and ensure the safety of the
boxer. The qualifications of judges and referees are also determined by the State Athletic
Commission.
CONCEPTUAL FRAMEWORK
Many articles have been written about professional boxing. Majority of these articles are
about the safety, medical effect (Svinth, 2007; Harris, DiRusso, Sullivan, & Benzil, 2004;
Leclerc & Herrera, 1999) and corruption in boxing (Fernandez, 2009). Although there has been
some articles about Congressional Legislation (Millspaugh, 1994) and advice for professional
boxing to clean up its acts (Jurek, 2007), there is no journal article that looks at the issues with
professional boxing from a marketing perspective.
The purpose of this paper therefore is not to counter the scientific evidences on the risk,
trauma and death of professional boxers. Instead it looks at some of the writings and evidences
on these issues; and suggested measures to reduce the health risk in boxing. The paper also
suggested actions that can be taken to eradicate corruption in boxing; and to reposition the sport.
REPOSITIONING
According to Grewal and Levy (2010), “Market positioning involves a process of

defining the marketing mix variables so that target customers have a clear, distinctive, desirable
understanding of what the product does or represents in comparison with competing products.”
Put differently, positioning is how marketers want customers or prospective customers to
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perceive the company’s product in their—customers, and prospective customers’, mind
compared to competitors’ product. In this case—boxing, the competing sports are baseball,
basketball, football, soccer, etc.
Repositioning has to do with a company trying to change its current position if the
customers’ or prospective customers’ perception of the company’s product is not favorable. In
the case of boxing, the perception of consumers of the sport is not favorable because of the issues
that are addressed in this paper.
DISCUSSION
Many journal articles have been written about the risk and medical effects of boxing. In
their article, Leclerc and Harrera (1999) stated that doctors should take steps to increase public
awareness of the risks of boxing. They also stated that sports physicians can make a strong
public statement by also ending their professional involvement in boxing. Drew, Schuyler,
Temple, Newell, and Cannon (2006) found out in their study of professional boxers that they
displayed pattern of neuropsychological deficits consistence with the more severe punch-drunk
syndrome of past years.
According to Harris, et al. (2004), the risk of dying for patients suffering head injuries
increase as early as thirty years of age, making it necessary for health-care providers to consider
increased monitoring and treatment for patients in this age group. The implication of this result is
that close attention must be paid to boxers thirty years and above who sustains head injuries.
Pappas (2007) concluded in his article related to injuries in boxing, wrestling and martial
arts, concluded that boxing and wrestling had similar rates for concussion. The repeated head
trauma experienced by boxers can lead to development of dementia pugilistican (DP) ----punch
drunk syndrome.
There have been many examples of contentious decisions by referees and judges in
professional boxing. As this shows, the destiny of a boxer is in the hands of the judges and
referees. Another issue of contention is when a boxer fights at home. This brings us to the issue
of home advantage. There is evidence which shows that the probability of a home win—and
therefore home advantage, increases when bouts are decided by point decisions rather than
knockouts (Balmer, Nevill, & Lane, 2005). McIntyre (2009) stated that the influence of big
fights bad referees is now all too common; and that something must be done to insure fairness
and a level playing field for all combatants in the prizefighting arena.
Fish (2002) stated in his article that what we are looking at now in boxing is hellhole of
exploitation and white-collar dealing. He also added that “barbaric” and “corruption” are the two
words associated with boxing. In his article, Svinth (2007) stated that the number of deaths
documented in the Velazquez Collection has grown over time.
Proliferation of Sanctioning Organizations

There are four sanctioning organizations: The World Boxing Association (WBA), the
World Boxing Council (WBC), the International Boxing Federation (IBF) and the World Boxing
Organization (WBO). The World Boxing Association is the oldest of the organizations.
SUGGESTION
674
Some people complain about the brutality of boxing. Boxers have died due to blows to
the head. To prevent death or major injuries in boxing, boxers should be made to wear protective
gear on their heads. Boxers should be properly examined medically before they are allowed
fight.
Eradicating controversial decisions and calls by judges and referees can help reduce the
number of major injuries and death in boxing. This will happen because boxers will not try to
knock out their opponents knowing that the fight will be called fairly by the referee; and judged
fairly by the judges. Because of rigged judgments and calls, fighters do not want to leave the
result of a fight in the hands of judges—go to the score cards; instead they want to knock their
opponents out. It is travesty for a boxer to lose a fight he/she has clearly won because of bad
calls by the referee or bad decision by the judges.
There is also the issue of boxers’ weights when they enter the ring. There is always
disparity in weights. In some cases there could be ten to seventeen pounds difference. This
happens because some boxers starve themselves until the weight-in date which is usually the day
before the fight in order to make the weight. After the weigh-in, boxers go and stuff themselves
with food. To prevent this, the weigh-in should take place just before the fight. This way, boxers
will fighter in the same weight. There will be no weight advantage. Putting on extra pounds after
the weigh-in may not be good on the health of the boxer who put on the extra weight. There
should also be a weight limitation in the heavy weight class. Like in the middle weight class,
there should be a super heavy weight class.
Boxers over the years, has been seen as people without formal education, hooligans, poor
background and convicts. This has changed. There are now boxers with college degrees and from
stable home. To change this perception, boxing should be offered as a college sport program.
There should be a body that can over-rule judges’ and referees’ decisions. The use of
replay should be introduced. Judges should wear ear plugs so as not to be influenced by fans
reaction to what is going on in the ring. If there is evidence that a Judges and or a referee have
taken bribe, a stiff penalty should be imposed; including jail time and suspension of their license
for life. The promoter who gave the bribe should suffer the same penalty as the judge and or
referee. If the suggested actions are taken, judges, referees and promoters will tighten their pants
and do what they are expected to do— be fair in their decisions.
Boxing and the Congress of the United States

Congress has passed legislations that are aimed at protecting boxers in the ring—the
Professional Boxing Safety Act of 1966, and the one that is aimed at further improving safety, as
well as giving boxers leverage at the bargaining table—the Muhammad Ali Boxing Reform Act
of 2000.
Can Congress save boxing? According to Jurek (2007),fans should recognize that the
sport’s savior is not perched on Capitol Hill in Washington, D.C. Rather, their sport’s savior, if
there is any one, is likely to come in a form that brought other major sports to prominence—one
in which a centralized oversight body has the power to promulgate “official rankings, designate
“official” champions, bargain with a collective bargaining representative of all fighters, manage
the day- to- day operations, and bring credibility and fans back to the sport.
675
CONCLUSION
Professional boxing should take actions to clean its acts. Fans are really disillusioned
because of issues discussed in this paper. The sport can be repositioned if necessary actions are
taken to do so. The suggested actions in this paper should be implemented. No one else can do it
for boxing. If it fails to take action, boxing will become a sport of the past. This author
completely agrees with Jurek’s conclusion. Yes Congress has a role to play in the reform of the
sport but it will not be able to do it alone without the honest involvement of professional boxing.
The idea of having a centralized oversight body will be of great help in reforming the sport.
Repositioning of the sport is therefore necessary for its survival; and will bring credibility to the
sport.
REFERENCES
Balmer, N.J., Nevill, A.M., and Lane, A.M. “Do Judges Enhance Home Advantage in European
Championship Boxing?” Journal of Sports Sciences, 23, (4), 2005, 409-416.
Drew, R.H., Schuyler, B.A., Temple, D.I., Newell, T.G., and Cannon, G.W.
“Neuropsychological Deficits in Active Licensed Professional Boxers.” Journal of
Clinical Psychology, 42, (3), 2006, 520-525.
Fernandez, P. “Victim of Boxing Corruption: ‘Yory Boy’ Campas.” http://ringtalk.com/a-real-
victim-of-boxing-corruption-yory-boy-campas, October 29, 2009.
Fish, M. “The Boxing Boondoggle: Referees, Doctors Hip Deep in Conflicting Interest.” Sports
Illustrated, September 20, 2002.
Grewal, D., and Levy, M. Marketing, 2nd ed. Boston, MA: McGraw-Hill Company, 2010.
Harris, C., DiRusso, S., Sullivan, T., and Benzil, D.L. “Mortality Risk After Head Injury
Increases.” Journal of American College of Surgeons, 198, (5), 2004, 852-853.
Jurek, M.J. “Janitor or Savior: The Role of Congress in Professional Boxing Reform.” Ohio State
Journal, 67, (1187), 2007, 1188-1226.
Leclerc, S., and Herrera, C.D. “Sports Medicine and the Ethics of Boxing.” Journal of Sports
Medicine, 33, (6), 1999, 426-429.
McIntyre, A. “Controversial Decisions, Bad Referees- Corruption Strikes Again.”
http://onthegrindboxing.com, May 19, 2009.
Millspaugh, P.E. “The Federal Regulation of Professional Boxing: Will Congress Answer the
Bell?” Seton Hall Legislative Journal, 19, (33), 1994.
Papas, E. “Boxing, Wrestling and Martial Arts Related Injuries Treated in Emergency
Departments in the United States, 2002-2005.” Journal of Sports Sciences and Medicine,
6, (CSSI-2), 2007, 58-61.
Svinth, J.R. “Boxing Injuries Bibliography.” Journal of Combative Sport, November 2007, 2007,
3.
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CHAPTER 30
STRATEGIC MANAGEMENT
677
CAPITAL FOR FARMLAND:
THE NEXT WAVE OF OUTSOURCING
Margaret A. Goralski, Southern Connecticut State University

goralskim1@southernct.edu
ABSTRACT
As food prices soared in early 2008, riots erupted in countries around the world becoming
violent in twenty-one countries, but even more distressing were the bans or restrictions put on
food exportation in twenty-six countries between April and May 2008. Prices soared for both
rice and soybeans by more than 130%. Food security became a hot issue. This paper explores the
strategic advantage of outsourced farm production by wealthy nation-states e.g., Saudi Arabia
and China vs. the ethical implications for governments e.g., Ethiopia and Sudan that are leasing
or selling arable land to foreign governments while leaving its own hungry and malnourished
citizens to be fed by the United Nations World Food Program (WFP).
INTRODUCTION
Josette Sheeran, executive director of the United Nations World Food Program (WFP),
stated:
Food is so basic to human survival that its denial is a denial of life itself. Some
say there are only seven meals between civilization and anarchy – at the seventh
meal lost, all begins to fall apart as people are reduced to fending for survival.
(2008, para. 7)
Some believe that the global food crisis of 2008 was proof that a radical solution to food
shortages must be found – a new Green Revolution – similar to the mid-20th century international
movement formed by Norman Earnest Borlaug and funded by the Rockefeller Foundation, Ford
Foundation, and many developing country governments to eradicate hunger and improve crop
performance. However, with a growth in world population from 7.9 billion projected for 2020 to
approximately 10.10 billion projected by 2050 (Lutz, Sanderson, & Scherbov, 1997), a new
Green Revolution would not be enough and irrigation would not be an option since demand for
fresh water has already tripled over the last 50 years.
For Saudi Arabia and some of the other Gulf States, price increases were not a deterrent.
Instead, the food bans and restrictions highlighted the country’s deficiency of arable land for
food production and its dependency on other countries to provide food for its people, therefore
putting the country’s welfare in the hands of outsiders. Many food-importing countries decided
that they could no longer put their fate in the hands of food exporters. Saudi Arabia was also
aware that it could not promote domestic farming to build up its own stock of wheat as it had
tried this option in the past—farmers used too much water from the non-replenishable aquifers
that run beneath the Arabian sands. Hence, if Saudi Arabia no longer trusted world markets, and
it could not increase production domestically, then it needed another solution. In April 2008, an
agricultural investment firm, which is owned by the Saudi government, focused on investing
abroad to cultivate mostly barley, wheat, rice, corn, sugar, soybeans, green fodders, animal and
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fish wealth (Custodian of the Two…, 2009). The firm will invest in projects to ensure food
security and help stabilize food prices domestically. It is owned by the Public Investment Fund
(PIF) and has capital of 3 billion riyals (U.S. $800 million) (Karam, 2009). Strategically,
following a diversification model set forth by multinational corporations, buying or leasing
farmland from other governments that desperately need an influx of capital could rectify the
problem, however, it could also set in motion another more dire set of problems – hunger and
malnutrition of another nation’s people caused by governmental profiteering and ultimately
chaos.
CAPITAL FOR FARMLAND
A team from Saudi Arabia evaluated farmland in several countries: Egypt, Ethiopia,
Kazakhstan, the Philippines, Turkey, Ukraine, Viet Nam, etc. and began investing in farmland
outside of its own nation-state’s borders. Other Gulf States followed Saudi Arabia’s lead. China
and South Korea also followed in its footsteps. Multinational corporations rarely run into
problematic rules and regulations in countries where the government is in dire need of capital
investment; the governments of Saudi Arabia, et al., also found few restrictions in their quest for
farmland. Wealthy food importers are currently acquiring vast tracts of land in poor countries for
food production.
Early [in 2009], the king of Saudi Arabia held a ceremony to receive a batch of rice,
part of the first crop to be produced under something called the King Abdullah
initiative for Saudi agricultural investment abroad. It had been grown in Ethiopia,
where a group of Saudi investors is spending $100m to raise wheat, barley and rice on
land leased to them by the government. The investors are exempt from tax in the first
few years and may export the entire crop back home. Meanwhile, the World Food
Programme is spending almost the same amount as investors ($116m) providing
230,000 tonnes of food aid between 2007 and 2011 to 4.6m Ethiopians it thinks are
threatened by hunger and malnutrition (Outsourcing’s third wave, 2009, p. 61).
THE NEXT WAVE OF OUTSOURCING
Richard Ferguson, an analyst for Nomura Securities considers outsourcing of farmland to

be outsourcing’s third great wave, following manufacturing in the 1980s and information
technology in the 1990s (Outsourcing’s third wave, 2009). The International Food Policy
Research Institute (IFPRI), a think tank in Washington, DC, estimates that between 15m and
20m hectares of farmland (100,000 hectares is equal to 240,000 acres) in poor countries have
been involved in transactions or negotiations with foreigners since 2006. The IFPRI is supported
by an alliance of sixty-four governments, private foundations and international and regional
organizations called the Consultative Group of International Agricultural Research (CGIAR).
IFPRI estimates that governmental land deals are worth U.S. $20 to $30 billion. They not only
encompass much more land mass, but also focus on growing food staples, e.g., wheat, maize,
rice, or soybeans rather than cash crops like coffee, tea, sugar or bananas. “China has secured the
rights to grow palm oil for biofuel on 2.8m hectares of Congo, which would be the world’s
largest palm-oil plantation. It is negotiating to grow biofuels on 2m hectares in Zambia, a
country where Chinese farms are said to produce a quarter of the eggs sold in the capital,
Lusaka” (Outsourcing’s third wave, 2009, p. 61). One of the most contentious issues in this
679
particular farmland deal is the estimated 1m Chinese farm laborers who have been transported
from China to Africa to work the land. One African leader calls it “catastrophic” (Outsourcing’s
third wave, 2009).
Branca do Espirito Santo, scholar and wife of the Angolan consul to France, stated that
Africa has many laborers of its own; she resented the fact that China was transporting people to
not only manage projects in Africa but also as laborers on those projects. She believed that China
was trying to assuage its own overpopulation by exporting its people to Africa (personal
communication, 2008).
In these new negotiations, there is an absence of private investors and owners.
Negotiations are government to government. Even when the acquirers of property are companies,
e.g., the King Abdullah Initiative for Saudi Agricultural Investment Abroad, the companies are
closely tied to governments of sovereign-wealth funds. “To be considered for Saudi investment,
countries must be politically stable, have useful natural resources for agriculture, tax relaxation
on agricultural exports, anti-corruption laws, and low-cost labor. Contracts must be long-term,
and Saudi Arabia must have the decision-making power on what crops are produced” (Gaestel,
2009, para. 3-4). The host countries that are dispensing farmland sometimes claim land for their
own to sell or lease as vacant that has been farmed for generations by people in a specific region.
Other land that is designated as empty may be used by herders to graze animals. Customary land
owners are evicted from land that they have thought of as their own and small land holders are
oftentimes strong-armed into signing away their rights to farmland for a very small amount of
money, most times less that its true value. Hence, local opposition and resentments are building
to these governmental deals that put people off of “their” land.
Joachim von Braun, Director General, IFPRI, stated:
Food insecurity can be a key source of conflict, and with food and general living
costs on the rise, people have turned to the streets in protest. Social and political
unrest has occurred in 61 countries since the beginning of 2007, with some
countries experiencing multiple occurrences and a high degree of violence. (2008,
p. 6)
Peter Brabeck-Letmathe, the chairman of Nestlé, claims: “The purchases weren’t about
land, but water. For with the land comes the right to withdraw the water linked to it, in most
countries essentially a freebie that increasingly could be the most valuable part of the deal”
(2009, para. 2). He believes that water shortages have been the hidden impetus behind many of
the foreign land deals.
Emile Frison, head of Biodiversity International, stated in June 2008, that one of the
reasons that the world was facing a food crisis was because wealthy countries cut support for
agriculture from $6 billion to $2.8 billion between 1980 and 2006 in inflation adjusted terms
(Frison cited in Monaghan, 2009). The countries worst affected by these monetary reductions
were located in Africa. African agricultural output, per farm worker, was the lowest in the world
between 1980 and 2004 with growth of less that 1% per year. China has set up more than eleven
research stations in Africa to help boost production of staple crops.
This new breed of foreign investors e.g., Saudi Arabia and China, have promised
investment in African land and cash in governmental pockets. They promise to provide seeds,
better jobs, schools, clinics, and new roadways. In 2007, agricultural investment in Sudan was
$700m or 3% of GDP; Arab states could raise that investment to $7.5 billion by 2010
(Outsourcing’s third wave, 2009). It is hard for governmental leaders to turn a blind eye to these
new investment opportunities; however, resentments have already led to problems for some
680
African politicians. Hostility over the possibility of Daewoo Logistics of South Korea leasing
1.3m hectares, or half of the island’s arable land, contributed to the overthrow of the President of
Madagascar. One Zambian opposition leader has stated his aversion to a proposed Chinese
biofuel project that would encompass 2m-hectares of land. China has threatened to pull out of
Zambia altogether if that opposition leader comes to power. Hence, China now has the power to
support or oppose political candidates and influence the political outcome or an election in
Zambia. “Bowing before the wind, a Chinese agriculture-ministry official insists his country is
not seeking to buy land abroad, though he adds “if there are requests we would like to assist”
(Outsourcing’s third wave, 2009, p. 63). Jacques Diouf, head of the UN’s Food and Agriculture
Organization, calls some of the projects ‘neocolonialist.” It is believed that Chinese government
officials have signed at least 30 agricultural co-operation deals, covering over 2m hectares of
land since 2007.
Africa has experienced difficult times borrowing money for fertilizers and increasing
farm yields in recent years. This new influx of capital could be a boon to farmers and African
governments, if the money was used for the people and distributed across the board.
Von Braun argues:
The best way to resolve the conflicts and create a ‘win-win’ is for foreign
investors to sign a code of conduct to improve the terms of the deals for locals….
Good practice would mean respecting customary rights; sharing benefits among
locals (i.e., not just bringing in your own workers), increasing transparency
(current deals are shrouded in secrecy) and abiding by national trade policies
(which means not exporting if the host country is suffering a famine”
(Outsourcing’s third wave, 2009, p. 63).
In the meantime, a task force report prepared by the Center for Strategic and International
Studies (CSIS), which is co chaired by United States Senator Robert Casey (D-PA), “Called for a
doubling of emergency food relief funds to $3.2 billion and big improvements in efficiency and
speed in delivery” (Monaghan, 2009, p. 72). Ray Offenheiser, head of Oxfam America, is
encouraged by the enthusiasm of the international community through the efforts of World Bank
and a project announced at the UN General Assembly in September 2008 by Bill Gates and
Howard Buffett (eldest son of Warren Buffett). Their foundation plans to give $75 million to
small farmers in Latin America and Africa in order for them to sell their food aid to the WFP, “a
move described as a ‘revolution’ by WFP’s Sheeran” (Sheeran cited in Monaghan, 2009, p. 75).
The majority of the money will be spent on better farming methods, high-yield seeds, and
infrastructure areas that development advocates say are necessary.
COMPETITIVE AND COMPARATIVE ADVANTAGE
This new wave of outsourcing has used a multinational strategy for expansion: seeking
location advantages and gaining economic efficiencies from operating worldwide. It allows
countries to disseminate their agricultural capabilities over many different countries showing a
marked improvement in self-sustainability. The location advantage in this paper is Africa. The
multinational company, or in this case the Saudi Arabian or Chinese government—or sovereign
wealth fund of the government—locates a part of its value-chain activities, e.g., production of
food staples or biofuels, anywhere in the world where it can be done cheaper or better as the
681
situation requires. Michael Porter (1986) argued that for global competition countries must not
only consider other countries as potential markets but also as global platforms, or a country
location where one can best perform some, but not necessarily all, of its value-chain activities.
Governments have taken this argument one step further. The resources available in different
nations provide the investing governments with a location-based competitive advantage in both
cost and quality. In the case of China, peasant farmers are also being transported from China to
Africa to work on the farms, hence training in technological farm techniques is also kept within
the realm of Chinese nationals rather than training Africans, who can at some time in the future
use this new knowledge to become competitors. Since investing governments, as well as most
African countries, lean more towards totalitarian governments than democratic governments,
seizure of land is easier than it would be in democratic nations. By exporting peasant farmers to
Africa, China is also putting less strain on its home environment. By utilizing its own cheap,
high-quality, and motivated labor, China is building additional comparative advantage in Africa.
The competitive advantage for China is to produce inexpensively in Africa rather than
pay for imports of food staples and biofuels from other countries. If other countries raise prices
or tax their products during a future food crisis, Saudi Arabia and China will not be held to those
increases therefore allowing Saudi Arabian and Chinese nationals to achieve self-sustainability.
At the same time, China can better utilize the farmland in China for manufacturing and creation
of exportable products – utilizing its own farmland to its highest potential and creating more jobs
at home. China holds a comparative advantage over Africa, as it has more people available and
more money to invest. These comparative advantages will also allow China to gain a competitive
advantage over Africa by producing biofuels that not only allow it to produce its own fuels, but
also to be on the cutting edge of an industry that will be desired worldwide as oil becomes less
available on world markets.
A multinational corporation views any country as a global platform where it can perform
any value-added activity. With free and open borders, any firm or country, regardless of nation-
state or ownership can turn any national advantage into a competitive advantage. Saudi Arabia
and China have created a strategic advantage by diversifying its supply of staple foods and
China’s investment in biofuels for the world market creates an advantage as well as gaining self-
sustainability.
Africa’s comparative advantage is its farmland and in some countries of Africa also its
mineral and oil exploration rights. However, governmental decisions to sell or lease farmland
that could be used to produce food for its own people, selling or leasing the rights to minerals
and oil exploration, could result in irreparable damage to African nations, a weakening of each
country, and/or enough instability to allow a takeover by a stronger nation.
CONCLUSION
In the case of farmland sales in Africa, if these foreign land deals are able to reverse the
decline of farming in developing countries then they will have justified themselves. However,
this justification is subjective; justified to whom, African farmers and small land holders, who
have been removed from the land; foreign investors, who are diversifying their supply of food
staples and exploring new competitive advantages e.g., production of biofuels; or African leaders
who are adding money to the government coffers, or lining their own pockets. Von Braun points
out that “good practice would mean sharing benefits among locals (i.e. not just bringing in your
own workers)” (Outsourcing’s third wave, 2009, p. 63). It should be the African governments
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responsibility to make sure that its people are being treated fairly in any negotiated deal,
however, since African countries are financially squeezed and do not have the self-assurance to
negotiate the hard terms, will its people ultimately suffer hardships and turn to violence.
Since foreign governmental aid and aid from non-governmental agencies in African
agriculture was down and famines were the result, African governments may not necessarily be
placing their people at more or less risk by selling and leasing farmland. In the 18th century,
English philosopher Thomas Malthus saw hunger as a necessary evil and a force of nature that
no government could hope to control.
Von Braun states that in fairness, a foreign nation-state should not export crops if the host
country is suffering from a famine, however, Ethiopia and Sudan are already suffering from
famine. Hence should they be prevented from signing agreements with Saudi Arabia and/or
China? Or, should Saudi Arabia or China not accept the wheat, barley, and/or rice that it has
produced on Ethiopian or Sudanese soil in times of famine? It is unrealistic to believe that a
foreign nation would invest in farm production and then not export its yield.
On the other hand, Sudan is allowing investors to export 70% of crop yields, even though
it is the recipient of the largest food-aid operation in the world. This too is unrealistic – for the
Sudanese government to continue to accept food aid while selling off or leasing farmland to
foreigners for profit. Governmental ethics is a subject that will need more stringent research and
investigation if this newest wave of outsourcing, capital for farmland, continues to increase.
REFERENCES
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Sheeran, J. “Statement by Josette Sheeran, Executive Director UN World Food Programme as
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Washington, DC, 2008, July 30.
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Von Braun, J. “Food and Financial Crisis – Implications for Agriculture and the Poor.”
International Food Policy Research Institute. Retrieved on October 12, 2009 from
http://www.ifpri.cgiar.org/sites/default/files/publications/pr20.pdf, 2008, December.
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DEVELOPMENT OF HUMAN AND SOCIAL CAPITAL
THROUGH INDUSTRY PEER NETWORKS
Kyle Luthans, University of Nebraska at Kearney

luthanskw@unk.edu
Ada Leung, Pennsylvania State University at Berks

leungada99@yahoo.com
ABSTRACT
In this study, we examined a form of “parallel peers” network called an industry peer
network (IPN). This type of network relationship allows member firms to share information,
knowledge, technology, and best practices that can help organizations avoid problems related to
inertia and myopia. Based upon a series of observations and interviews, we identified four
strategies which are utilized by IPNs to help their members stimulate critical thinking and
promote vicarious learning among network members in order to develop human and social
capital: social activities, best practice contests, benchmarking, and detailed discussions of
financial information.
INTRODUCTION
Globalization, technological change and diffusion, rapid and open innovation, volatile
markets, and economic crises have created an increasingly turbulent and competitive
environment for today’s organizations. In this dynamic atmosphere, organizational leaders
cannot afford to resist change and must guard against the dangers of dependence on entrenched
beliefs and technologies. As never before, today’s managers in all industries must have a new
paradigm thinking and focus on acquiring and developing new resources for competing. The
need for today’s organizational leaders to acquire and develop intangible resources such as
human and social capital (Chisholm & Nielsen, 2009; Hitt & Ireland, 2002; McEvily & Zaheer,
1999), and at the same time manage them jointly and effectively so that they can improve their
firms performance (Reed,Srinivasan, & Doty, 2009; Wright & Snell, 1999), has never been
greater.
In this review, we examined the processes carried out by the entrepreneurs from small
and medium-sized enterprises who seek to develop their human capital and social capital by
networking with “parallel peers” in industry peer networks (IPN). IPNs are networks of non-
competing industry peers from widely dispersed geographic markets (Sgourev & Zuckerman,
2006). Through didactic processes, these networks help managers stay attuned to new
developments and industry trends beyond their local markets. IPNs allow organizations to form
relationships and seek alliances with others to gain access to complementary and intangible
assets. These network relationships allow firms to share information, knowledge, technology,
best practices, new markets, and innovations that can help firms avoid inertia and create a source
of sustained competitive advantage over time (Adler & Kwon, 2002; Hitt & Ireland, 2002;
Nahapiet & Ghoshal, 1998; Ozcan & Eisenhardt, 2009).
In this paper, a synopsis about the theoretical background of human and social capital is
provided first. Next, the unique inter-organizational structure of industry peer networks (IPN) is
reviewed. Then the research context and method are described. Finally, the findings that emerged
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from the fieldwork, namely the human and social capital development strategies that exist within
IPNs, are discussed.
HUMAN CAPITAL
Human capital is the combined knowledge, education, training, skills, and expertise of a
firm’s workers (Crawford, 1991). In today’s knowledge-based economy, intangible human
capital is among a firm’s most valuable resources (Becker, Huselid, & Ulrich, 2001). Prior
research has demonstrated that the investment in and utilization of human capital can lead to
increased productivity and firm performance (Gelade & Ivery, 2003; Guthrie, 2001). Other
research has suggested that complex and tacit knowledge is a critical competitive asset and that it
brings performance advantages to the firm for a long period of time (McEvilty & Chakravarthy,
2002). Nevertheless, human capital does not develop in vacuum. For example, McFadyen and
Cannella (2004) suggested that social capital in professional networks is crucial for the creation
of scientific knowledge.
SOCIAL CAPITAL
For the purpose of this paper, we adopted Nahapiet and Ghoshal’s conceptualization of
social capital (1998, p. 243) as “the sum of the actual and potential resources embedded within,
available through, and derived from the network of relationships possessed by an individual or
social unit.” Under this conceptualization, actors with high level of social capital are likely to
have better access of information, influence, and support via network solidarity than those with
low level of social capital (Adler & Kwon, 2002). Simply stated, social capital can be thought of
as the value of relationships; or as it is sometimes phrased, “it’s not what you know, but who you
know.”
STRUCTURAL, RELATIONAL, & COGNITIVE SOCIAL CAPITAL
Research in social capital has clustered on three core dimensions: structural, relational,
and cognitive (Lee, 2009; Nahapiet & Ghoshal, 1998). Although these features are analyzed
separately, they are highly interrelated.
Structural social capital concerns the properties of the social system and the network of
relations as a whole, which includes the overall pattern of connections among the members in a
network, such as presence or absence of social interaction, direct and indirect ties between
actors, network density, connectivity, and hierarchy (Nahapiet & Ghoshal, 1998).
Relational social capital describes the strength of personal relationships people have
developed with each other through a history of interactions (Nahapiet & Ghoshal, 1998).
Through interactions, individuals are able to access and leverage resources embedded in
relationships. The underlying normative conditions of trust, obligation, and expectations are key
facets of the relational dimension. Strong network ties provide a mechanism for vicariously
learning from the insights and experiences of peers (Hansen, 1999; McFayden & Cannella,
2004). Weak network ties offer flexibility and access to new, non-redundant information (Burt,
1992).
Cognitive social capital refers to those resources providing shared representation,
interpretations, and systems of meaning among parties (Nahapiet & Ghoshal, 1998). In other
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words, interactions that occur in social networks lead to shared knowledge and the development
of meaningful contexts of communication among actors (Lee, 2009).
INTERNAL AND EXTERNAL SOCIAL CAPITAL
Besides these three core dimensions, it is also possible to distinguish between internal
and external social capital (Hitt & Ireland, 2002). Internal social capital is formed by developing
relationships among peers, subordinates, groups, and across business units within an
organization.
As for external social capital, it is defined as the relationships between strategic leaders
and those outside the organization with whom they interact to further the firm’s interests (Hitt &
Ireland, 2002). This “bridging” conceptualization of social capital is used to explain the
performance of firms based upon their direct and indirect links to other members in the inter-
organizational networks (Adler & Kwon, 2002; 1998; Ozcan & Eisenhardt, 2009).
We propose that industry peer networks (IPN) is an important way for small to medium-
sized enterprises to develop external social capital and the cognitive dimension of social capital.
Specifically, the active participation in an IPN is a source of competitive advantage as it can help
members obtain new knowledge and skills from trustworthy contacts in the inter-organizational
networks. Since various management issues, such as internal team building, technical training,
and employee compensation, are often discussed during meetings, a member’s level of external
social capital is often correlated with the development of internal social capital of the firm.
INDUSTRY PEER NETWORKS (IPN)
Industry peer networks (IPN) are a unique form of “parallel peers” in which the members
in the network belong to a sub-segment in a given industry which draws on same or very similar
inputs to provide similar goods or services but target different sets of customers. These non-
competing (and non-colluding) members gather regularly, in an atmosphere of significant trust,
to exchange information and discuss issues related to company performance. Other typical
practices of IPNs include selective admission to groups, small (typically 20 or fewer) face-to-
face group meetings, detailed discussion of management and marketing issues, and the sharing of
confidential financial data. Through IPN face-to-face meetings and electronic communications
in-between the meetings, IPN members stay current with industry changes, learn vicariously
from the experiences of their peers, and address deep-rooted problems such as myopia and
inertia common to many companies (Sgourev & Zuckerman, 2006).
CONTEXT AND METHOD
We studied the IPN phenomenon among the members of a “technology industry reseller”
industry peer network. The number of peer groups within this IPN has expanded from mid-
America to the rest of the U.S., Canada and the U.K. in just five years. The peer groups meet
quarterly and communicate with each other extensively via electronic means in between
meetings. As of October 2009, there were 20 peer groups in the network, with a mean
membership of 6-12 firms per peer group. Our data source consisted of observations and
interviews conducted during face-to-face peer meetings. Since 2008 through the present, our
research on the context has included visits to nine peer meetings, interviews, and
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communications with the founder, chairman, committee chairpersons, and several facilitators of
peer meetings, as well as data from three quarterly surveys that track the social interactions and
business performance of the members. The findings reported in this paper are based on the
themes which emerged from our fieldwork. The field notes were transcribed and analyzed by
using NVivo, a qualitative data analysis software package.
HUMAN AND SOCAL CAPITAL DEVELOPMENT
Based on extant research and our fieldwork, the appeal of IPN participation lies in two
interrelated dimensions of value: an opportunity for acquiring knowledge useful for achieving
higher performance (“learning”) and a stimulus to initiate changes aimed at achieving higher
performance (“motivation”) (Zuckerman & Sgourev, 2006). In other words, the value of IPN
mainly lies in the joint cultivation of human capital and social capital among its members so that
the member firms are motivated to achieve better business performance by learning how to
control costs, manage human resources effectively, and improve service delivery standards. The
strategies described in this section are presented in the order of increasing intensity of human and
social capital development.
IPN gatherings typical last for 2-3 days. Apart from discussions about business matters, a
substantial amount of time is devoted to “non-business” related social activities, such as morning
runs, receptions, group dinners, and workshops concerned with balancing work and family. Even
during formal discussions in the meetings, peers are encouraged to end their presentation with a
brief report of their family and spiritual lives. These types of social interactions help cultivate
social relations and increase the embeddedness of IPN members.
Best practice contests are common in IPN gatherings, whereby each member describes an
innovation or newly implemented practice that brings about positive change to the organization,
and the group votes on which idea seems the most useful. Often a small amount of money (e.g.,
$20) is solicited from each member to create a pot so that the winner takes all. In other words,
apart from creating a trusting and collaborative discussion forum, IPNs also make an effort to
create a competitive environment in which members are encouraged to improve their
performance so as to gain esteem in the eyes of their peers.
In a typical IPN gathering, each of the IPN members presents a synopsis of the state of
the firm in the last quarter, as compared to the quarter before and the same time last year.
Although the members use a standardized template so that the presentation format is consistent
across all group members, they also tell idiosyncratic stories, such as the acquisition of new
customers, adoption of new technologies, and team building practices, to justify the changes in
their business performance over time. The round-robin exchange of information helps members
avoid myopia and inertia via exposure to current industry trends, business practices, and changes
that take place beyond their regional markets. This type of benchmarking encourages the
development of human capital (learning of tacit knowledge) and cognitive (common context for
communication) and relational social capital (trust and social ties).
During the IPN meetings, apart from sharing stories about “soft” business issues in
marketing and management, the members also disclose “hard” financial information and they
collectively attempt to draw connections between fluctuations of financial performance with
changes in business practices, such as the cost of cultivating new customers and the potential
revenues they are bringing to the firms. The ability to evaluate the business based on abstract
financial ratios, making decisions, and implementing changes based on objective information
helps develop human capital among members of the network.
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In addition, high levels of trust and social intimacy are required for this practice to take
place smoothly--many IPN members described the sharing financial information among peers is
like “running naked.” The sharing of financial information requires a high level of relational
social capital, since members have to trust their peers in safeguarding each other’s proprietary
and confidential information at all times.
CONCLUSION
In this study, we reviewed a form of “parallel peers” networks called industry peer
networks (IPN). This type of network relationship allows member firms to share information,
knowledge, technology, and best practices that can help organizations avoid problems related to
inertia and myopia. Through constructive feedback and quasi-competitive yet trusting
environment, IPNs hold network members accountable for their organizational performance
results. Based upon our observations and interviews, four strategies for developing human and
social capital in IPNs were identified: social activities, best practice contests, benchmarking, and
detailed discussion of financial information. Our hope is that by outlining the strategies that IPNs
use to promote the development of human and social capital jointly and providing
recommendations for managing IPNs in the long run, we have contributed to a better
understanding of how IPNs can be leveraged as a competitive resource for the participating
firms.
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Adler, P.S., and Kwon, S.W. “Social Capital: Prospects for a New Concept.” Academy of
Becker, B.E., Huselid, M.A., and Ulrich, D. The HR Scorecard: Linking People, Strategy, and
Performance. Boston: Harvard Business School Press, 2001.
Burt, R.S. Structural Holes: The Social Structure of Competition. Cambridge, MA: Harvard
Chisholm, A., and Nielsen, K. “Social Capital and the Resource-Based View of the Firm.”
International Studies of Management & Organization, 39, (2), 2009, 7-32.
Crawford, R. In the Era of Human Capital: The Emergence of Talent, Intelligence, and
Knowledge as the Worldwide Economic Force and What It Means to Managers and
Investors. New York: Harper Business, 1991.
Gelade, G.A., and Ivery, M. “The Impact of Human Resource Management and Work Climate
on Organizational Performance.” Personnel Psychology, 56, (2), 2003, 383-404.
Guthrie, J.P. “High-Involvement Work Practices, Turnover, and Productivity: Evidence from
New Zealand.” Academy of Management Journal, 44, (1), 2001, 180-90.
Hansen, M.T. “The Search-Transfer Problem: The Role of Weak Ties in Sharing Knowledge
Across Organization Subunits.” Administrative Science Quarterly, 44, 1999, 82-111.
Hitt, M., and Ireland, R.D. “The Essence of Strategic Leadership: Managing Human and Social
Capital.” The Journal of Leadership and Organizational Studies, 9, (1), 2002, 3-14.
Lee, R. “Social Capital and Business and Management: Setting a Research Agenda.”
International Journal of Management Reviews, 11, (3), 2009, 247-73.
McEvily, B., and Zaheer, A. “Bridging Ties: A Source of Firm Heterogeneity in Competitive
Capabilities.” Strategic Management Journal, 20, 1999, 1133-56.
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McEvily, S.K., and Chakravarthy, B. “The Persistence of Knowledge-Based Advantage: An
Empirical Test for Product Performance and Technological Knowledge.” Strategic
McFadyen, M.A., and Cannella, A.A. “Social Capital and Knowledge Creation: Diminishing
Returns of the Number and Strength of Exchange Relationships.” Academy of
Nahapiet, J., and Ghoshal, S. “Social Capital, Intellectual Capital, and the Organizational
Advantage.” Academy of Management Review, 23, (2), 1998, 242-66.
Ozcan, P., and Eisenhardt, K.M. “Origin of Alliance Portfolios: Entrepreneurs, Network
Strategies, and Firm Performance.” Academy of Management Journal, 52, (2), 2009, 246-
79.
Reed, K.K., Srinivasan, N., and Doty, D.H. “Adapting Human and Social Capital to Impact
Performance: Some Empirical Findings from the U.S. Personal Banking Sector.” Journal
of Managerial Issues, 21, (1), 2009, 35-57.
Sgourev, S.V., and Zuckerman, E.W. “Improving Capabilities Through Industry Peer Networks.”
MIT Sloan Management Review, 47, (2), 2006, 33-38.
Wright, P.M., and Snell, S.A. “Social Capital and Strategic HRM: It's Who You Know.” HR.
Human Resource Planning, 22, (1), 1999, 62-65.
Zuckerman, E.W., and Sgourev, S.V. “Peer Capitalism: Parallel Relationships in the U.S.
Economy.” American Journal of Sociology, 111, (5), 2006, 1327-1366.
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LABELING GENETICALLY ENGINEERED FOOD:
A STRATEGIC PERSPECTIVE
Omid Nodoushani, Southern Connecticut State University

nodoushanio1@southernct.edu
Patricia A. Nodoushani, University of Hartford

nodoushan@hartford.edu
ABSTRACT
As Genetically modified (GM) food also known as genetically modified organisms

(GMO) or genetically engineered food (GE), has been present on the U.S. market since 1990s.
Even though more than 70% of food sold in U.S. supermarkets has been genetically modified,
most people are unaware of this fact. The purpose of this paper is to take a closer look at the
history of labeling of genetically tempered food in the U.S. and in the European Union from a
strategic perspective. Subsequently, we will examine the impact of those labeling regulations on
the world trade and various trading agreements, such as WTO and NAFTA. Finally, this paper
will discuss selected issues pertaining to the autonomy of choice and labeling of GM food.
INTRODUCTION
In 1992, the Council of Competitiveness under the Bush’s administration recognized the
new genetic technology which allowed building genetically modified crops as potentially
profitable and promising in terms of boosting the U.S. agriculture and export. The Council saw
in the newly developed crops a promise of the U.S. dominance in the biotechnology global
market. Almost immediately Food and Drug Administration (FDA) followed with a decision that
these products were not going to be regulated because, according to the agency, they were not
significantly different than its counterparts that were not genetically modified. Subsequently,
FDA also decided that GM foods should not carry any type of labels disclosing that they were
genetically modified or engineered.
Through this decision, the agency assumed a paternalistic attitude towards the issue
arguing that it must make the decision about the safety and appropriateness of consumption of
GM food for the consumers because they themselves would not be able to make the right,
informed choices. In this favorable political climate which allowed for a complete lack of
regulation and without having to face the issue of the consumer opinion, the biotechnology
industry bloomed in the U.S. Many GM products were released to the U.S. market without
customers ever realizing what was happening.
WHAT IS GENETIC MODIFICATION?
In order to better understand the scope of the debate over the labeling of genetically
modified food, one must understand how the genetically modified food is defined. There is much
debate on what should be considered a genetically modified organism and very little consensus
on a universal definition. Some argue that the process of genetic modification of living
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organisms is dating back to the time when first farmers selected individual animals and included
them in their herds.
By choosing animals with only certain characteristics, such as the color of the fur or ease
of breeding, the farmers were in fact engaging in manipulation of the genetic pool of their herds,
in other words, they were genetically modifying their animals. By the same token, the farmers
who were selecting seeds for growth that were more resistant than others to pests and adverse
weather conditions or that had a potential of bringing better and bigger harvest, were also
engaging in genetic modification of the plants. Through the selective breeding, these farmers
were able to mix the gene pool to create animals and plants that probably wouldn’t survive in the
wild, but that did very well in the captivity and that fulfilled the farmer’s needs (Roberts, 2007).
Today however, the genetic modification of organisms has reached new levels of which
the farmers of the distant past could not even dream. Ever since DNA was discovered in 1970s,
scientists have been working on developing techniques that would allow the manipulation of the
genetic code of living organisms in order to create desirable traits or to eliminate traits that are
undesirable. Today, the scientists are able to cut selected pieces of DNA code from one organism
and implant it into another one. As a result, the new organism created in this way can have
certain desired characteristics, for instance resistance to cold temperatures or pests.
Therefore, for the purpose of this paper, GMO is defined as an organism that was
intentionally created by extracting genes from other organism and inserting them into a new one
to contain a piece of “foreign” DNA built into its genome which allows this organism to develop
particular desired trait. This inserted DNA is later passed on to the next generation of the
organism as it reproduces even though the organisms whose genes were used to created the
GMO would not normally interbreed in the natural environment (Roberts, 2007).
INTRODUCTION TO U.S. MARKET
In the United States the GM food has been present on the market since 1994 when the
FDA authorized the marketing of Flavr Savr tomato, the first genetically modified plant created
by Calgene. This tomato contained a gene which slowed down its ripening process, and
subsequently extended its shelf live, and more importantly, made the transportation of the
tomatoes much easier. FDA was relatively cautious in approving this first GM plant. They
gathered and reviewed the scientific data from the producer and held Food Advisory Committee
meeting to discuss the procedures and technology used by the producer. Ultimately, they decided
that this product was safe, and allowed its introduction (Degnan, 2007).
Two years prior to the invention of the Flavr Savr tomatoe, in 1992 FDA decided that
GM foods were not substantially different from its non-GM counterparts, and therefore decided
to not regulate them separately from any other types of foods that were already on the market.
This over 20 year old policy has been used since its original inception. Since according to that
policy, GM foods should not be carrying a label identifying them as such or disclosing any type
of information pertaining to the origins of the products, the introduction of Flavr Savr tomato
didn’t gather any significant public attention. In fact, the issue of GMO flew under the radar of
public’s opinion in the U.S. through the whole 1990s (Degnan, 2007).
The government of the U.S. took a simple, cost-effective approach to biotechnology. By
focusing on the end product of it rather than on the process of developing the product, FDA put
the burden on proving that the product is safe on the people who wanted to control genetic
engineering, not on the producers of it themselves. Thus, no new agency to handle the
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biotechnology was created and no new laws were enacted (Guthman, 2003). The government
assumed that since the end product of biotechnology (GMO) was sufficiently similar to the
product that already existed in nature, then nearly every GMO was as safe as its non-GMO
equivalent. By 2001 the types of GM crops sold on the U.S. market included beets, corn, canola,
cotton, rice, tomatoes, potatoes, soybeans, sugar, and others (Vogt, 2001). In this political
climate, the public in the U.S. remained largely unaware of the introduction of the GMO to their
food, and this situation for the most part has been prevailing until today’s day. Overall, the
biotechnology in the U.S. received a minimal scrutiny from the government, and very little
attention from the public.
INTRODUCTION TO THE EUROPEAN MARKET
The introduction of GMOs was accompanied by quite different attitudes in the European
Union. GMO received a lot of attention in EU and Europeans have exhibited a great distrust
towards it. Furthermore, they seemed to be resistant to any kind of persuasion directed at
changing their attitudes, and this situation persists into the present. Some studies showed that
over 80% of Europeans who oppose GMOs do it out of fear and uncertainty about possible side
effect of these products (Loner, 2008).
Before 1998, there were 18 biotech plants approved in the European Union including
maze, rapeseed, chicory, and soybeans. In 1999, France, Greece, Belgium, Denmark, and
Luxembourg proposed de facto moratorium on new GMO approvals at the meeting of EU
environment ministers. After that, no GMO products were approved in EU until 2004. In 2003
the Council passed strict labeling and traceability laws requiring all products that contained
above 0.9% of GMO to be labeled as genetically modified (FT.com site, 2006). The European
Council authorized marketing of the first GM product for food and food ingredients in 2004
ending the period of 6 years during which no GMO products were approved. It was sweet maize
produced by Syngenta. By 2005 there were a total of 4 GM products approved including the
Monsanto’s GM maize which the Commission approved for import and processing for 10 years.
The approval of GM crops for cultivation was not as rapid. Between 2001 and 2007 there was
only one product approved for that purpose (Rosso-Grossman, 2007).
In order to understand why the European Union has been so slow in adopting the new
technology, one must look at the circumstances in which GM food was introduced to the
European market. When GM food was originally introduced, Europe had just gone through a
series of food scares of which the most prominent one was the so called “mad cow disease.”
These experiences shaped Europeans’ attitudes towards biotechnology and science, especially
when it comes to food. For instance, when “mad cow disease” exploded in Europe, many
scientists expressed the opinion that the disease could not cross from one species to another; this
assumption later proved to be wrong. As a result, Europeans were going through a crisis of faith
and trust not only in science but in the government as well. For that reason, the assurances that
came from both groups explaining that GM food was safe for consumption did not convince too
many people that this indeed was the case. Even though there were individual differences in
attitudes of individual countries in the European Union, majority of Europeans were opposed to
GM food, and feared that there might be negative consequences of consuming these foods
(Consumer Trust, 2001).
The European Parliament recognized that the lack of trust of the consumers will hinder
significantly on the success of GM food. The assumption was that people fear what is unknown,
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and therefore the European Union decided that GM food needed to properly identified on the
label in order to give the customers the full disclosure about the product. Hoping that the
consumers would start gaining faith in the government, the European Council passed series of
laws which introduced strict requirements for labeling of GM products. The fist of these laws
was passed in 1997. These laws were based on precautionary principle. In other words, even
though thus far there is no convincing scientific evidence that GM food is hazardous to human’s
health, full disclosure is given to the consumers in case there are any undesirable side effects
from consuming these foods which have not yet been discovered. In addition, the European
Union is concerned about the effect GM crops and crop contamination can have on environment
(Rosso-Grossman, 2007).
LABELING LAWS IN THE US AND EU
In the U.S., the agency responsible for regulation of food labeling excluding meat,
poultry, and some egg products is the Food and Drug Administration (Vogt, 2001). Federal
Food, Drug, and Cosmetic Act (FFDCA) forbids statements on the labels that are “false or
misleading in any particular,” and it also requires that only information that is “material” is
disclosed on the label. In practice, this means that only the following information should be
included on the label: statement of identity or common name of the food, quantity of contents,
name and place of business, packer or distributor, ingredient information, additives, and nutrition
information (Vogt, 2001).
As already briefly mentioned above, in 1992 FDA issued a policy according to which
GM foods were not deemed to be substantially different from non-GM foods, and therefore the
nutritional value of these foods was assumed to be the same as non-GM foods. Therefore the
agency saw no reason to add the information about genetic modification on the label of these
foods. It should be mentioned however, that this policy has few exceptions. Specifically, foods
that contain a protein that normally would not be found in the non-GM equivalent need a label
disclosing that information; this is also the case for foods which contain a genetic material that
came from a plant that is a common allergen in humans. In addition, if a GMO contains marker
genes that could impact the therapeutic effects of certain antibiotics, then this information also
needs to be disclosed on the label (Vogt, 2001).
Overall, FDA’s official policy is that the use of biotechnology in the food industry is
safe, and because thus far no one was able to prove beyond any doubt that this assumption is not
correct, FDA maintains its position that there is no justification for labeling these foods
differently than their non-GM counterparts (Weirich, 2007).
Not the whole world however is sharing the views of the U.S. regulatory agencies. As
mentioned above, in the European Union (EU) it is required by law that genetically modified
food be labeled as such. Every product that contains more than 0.9% GMO needs to be labeled
as containing genetically modified ingredients with the exception of meat, milk, eggs or cheeses
(EU: GMO Food has to be Marked, 2004). This law was passed in May of 2003, and came into
effect on April 18th, 2004. It was instituted to ensure that the consumers are provided with
sufficient information to make informed choices about the products they purchase and consume
(Tenbult, De Vries, Dreezens, & Martijn, 2007).
In addition, EU requires that each GMO product be traceable. In practice, this means that
when a new genetically engineered product is created, it needs to be assigned an individual
number (identifier) which also needs to be placed on the label so regulatory agencies can at any
694
given moment confirm the legitimacy of the statements made on the labels, and trace the
products back to its producer. These measures are based on precautionary principle, and are very
different from requirements imposed on U.S. food industry (Rosso-Grossman, 2007).
The majority of Europeans are afraid to consume GM food, while it would appear that in
the U.S. it is a booming business. In fact, some sources report that in 2004 as many as 72% of
people in Europe were opposed to GM food (EU, 2004). One might argue however that the main
reason why Americans seem to be less outspoken about the issue is the fact that they are not
aware of the fact that they have been eating the GM food. Since including information about
genetic modification on the food is not required by FDA, and in fact, it is discouraged, typical
consumer has no way of telling whether the product (s)he is eating was genetically modified or
not. In fact, even though about 70% of all food products in our supermarkets contains GMOs,
many people are still not sure whether they have ever consumed a GE product and whether such
product would be labeled. Streiffer and Rubel (2007), argue that in 2004, 61% of surveyed
people in the U.S. were confused about FDA requirements for labeling of GE food.
CONCLUSION
The issue of genetically modified organisms continues to be very controversial on the

global arena. In the U.S., there are strong political and economic forces supporting the growth of
biotechnology. Few presidential administrations shared this attitude which was directly
associated with supporting the national agriculture; a sentiment which the U.S. seems to cling to
since the Second World War. The pursuit of subsidizing national agriculture, along with a
tendency to grow the country’s exports, and building its presence and dominance on the global
biotechnology arena, the regulatory agencies, such as FDA sacrificed the consumers’ autonomy
of choice and right to be informed.
Furthermore, the agency and food industry claims that the consumption of GMOs has no
negative impact on human’s health even though no significantly large studies were conducted to
prove that this indeed is the case. Since the first introduction of GM food in the U.S., the FDA
and presidential administrations seem to be looking the other way. The introduction of the first
and subsequent GM products to the U.S. market took place in the atmosphere of secrecy and
conspiracy – a situation that remains largely unchanged even today. For the last 20 years, FDA
has been actively fighting against regulating the GM food products and disclosing information
about genetic modification of food to the customers who consume it. Possibly, this is because the
agency’s motivation behind this behavior is a fear that consumers would largely reject GM food
once they would be made aware of its existence. This would potentially be not only embarrassing
to the U.S. on the global arena, but it would also be damaging to its arguments that the export of
GM food from the U.S. should not be subjected to any type of trade barriers.
In the current climate, there seems to be no middle ground for issues of the labeling of
GM food. The fact is that biotechnology in the food industry is here to stay, and there is a
pressing need on the global arena to develop regulations that would direct the trade of these
products, promote the consumers’ autonomy of choice and their safety, protect the environment,
and prevent countries and large companies from a monopolistic behavior.
695
REFERENCES
Anonymous. “Consumer Trust in Government Is Key to Policies on Genetically Modified Food -

On Both Sides of the Atlantic.” PR Newswire,October 24, 2001,1.
Anonymous. “EU: GMO Food has to be Marked.” Access Czech Republic Business Bulletin,18.
Retrieved November 20, 2009, from ABI/INFORM Trade & Industry. (Document ID:
623604601). April 19, 2004.
Degnan, F.H. “Biotechnology and the Food Label.” In P. Weinrich, ed., Labeling Genetically
Modified Food. New York: Oxford University Press, 2007.
FT.com site. “Timeline: The EU's unofficial GMO moratorium.” FT.com, 1. Retrieved
November 20, 2009, from ABI/INFORM Global. (Document ID: 983923371), February,
2006.
Guthman, J. “Eating Risk: The Politics of Labeling Genetically Engineered Foods.” In R.A.
Shurman, and D.D.T. Kelso, eds., Engineering Trouble: Biotechnology and Its
Discontents. Berkley, CA: University of California Press, 2003.
Loner, E. “The Importance of Having a Different Opinion Europeans and GM Foods.” Archives
Européennes de Sociologie, 49, (1), 2008, 31-63.
Roberts, M.R. “Genetically Modified Organisms for Agricultural Food Production: The Extend
of the Art and the State of the Science.” In P. Weinrich, ed., Labeling Genetically
Rosso-Grossman, M. “European Community Legislation for Traceability and Labeling of
Genetically Modified Crops, Food, and Feed.” In P. Weinrich, ed., Labeling Genetically
Streiffer, R., and Rubel, A. “Genetically Engineered Animals and the Ethics of Food Labeling.”
In P. Weinrich, ed., Labeling Genetically Modified Food. New York: Oxford University
Press, 2007.
Tenbult, P., De Vries, N., Dreezens, E., & Martijn, C. “Categorizing Genetically Modified Food
Products: Effects of Labelling on Information Processing.” British Food Journal, 109, (4-
5), 2007, 305-314.
Vogt, H. “Concerns Regarding Genetically Modified Food.” Episcopal Diocese of Minnesota
Environmental Stewardship Resolution. Retrieved November 27, 2009, from:
http://www.env-steward.com/events/res1-gen.htm, 2001.
Weirich, P. “Using Food Labels to Regulate Risk.” In P. Weinrich, ed., Labeling Genetically
696
MANAGING FOR CHANGE: BUSINESS AND ACADEMIA-
A COMPARATIVE ANALYSIS
Martin M. Shapiro, Berkeley College

msh@berkeleycollege.edu
ABSTRACT
Institutions of higher education are reeling under the weight of competition emanating for
the rising momentum in the globalization of education. Many academic institutions lack the
long-term vision and determination to implement growth-oriented strategies on a grand scale.
Thus, they have failed to anticipate environment changes such as the challenges of diversity,
market conditions, and increased cross-border competition.
INTRODUCTION
Many institutions lack the stamina or the wherewithal to play the long game necessary to
be successful in a complex environment. As a result, they lack the imaginative and farsighted
policies governed by laws of intuitional accountability and market dictates. Academic has been
slow to shake off ingrained habits in the attempt to think freshly and take major risks.
With some exceptions, programs offered by a large number of institutions are perceived
as undifferentiated ‘commodity’ products. Consequently, the competition to attract students is
relegated to sustaining the below- average admissions standards while compromising in areas of
student life and quality service.
BACKGROUND
To remain competitive, U.S. colleges and universities must become robust, adaptable,
hard working, and able to change academic curricula (products) and the quality of service in a
dramatic way. The survival and dynamism of academic organization, like business and industry,
are predicated upon integrating the components and processes of quality circles, modular
education and, most importantly, quality of service into a sound educational system.
SERVICE: A NEARLY FORGOTTEN WORD
Many colleges and universities are lured into the false belief that all is well and that their
raison d’être is properly attended to. Even institutions that incorporate long-range strategic
planning into their system fail to make a comprehensive appraisal of the terrain. They simply
focus on the so-called forest without identifying the multiple variables and needs of the
individual trees. The result is a misdirected planning program which lacks the proper tools
needed to carry out its objectives. And the foundation on which the planning process is
predicated becomes no more than quicksand to those involved. The institutions react to crises
which befall them rather than develop proactive strategies essential to their solid growth.
Service, more importantly ‘quality service’ to many institutions is a tantalizing concept.
Service is a frequent topic of discussion, but it is poorly understood and cared for. Service in
academic is nearly forgotten. It is hardly incorporated into the “total product” concept of the
697
institution’s marketing mix strategies. It seems that each department or campus is only cognizant
of the narrow meaning of the term known as ‘quality service’. Nonetheless, there is a lingering
malaise which conveys an ignorance, or apathy to one’s environmental forces.
Even those who convey some marginal understanding of the term do not cross the barrier
of passivity. In short, the effort to proact and push quality of service to a higher plateau falls
short of meaningful actions. One learns through meetings or letter circulating from the president
down to department chairpersons about accomplishments in areas such as fund raising, and
accreditation. These accomplishments are trumpeted to win the hearts and minds of the college
community but with one exception- the student community.
The student community, by and large, has been excluded from any well-deserving
attention either by omission or remission. Any reference to quality service and its derivatives has
by sheer negligence or complete oblivion been ignored. In those few instances, however, when
one devotes a line or two to this topic, it is merely in the realm of lip service rather than quality
service at its best.
Academicians who consider themselves to be avant-garde will argue that a service is an
inherent part of the administrative procedures of their institutions. They differ, however, as to
what service is all about. Many administrators and educators find it difficult to comprehend, let
along to define the anatomy of service.
What is service? What are the true and real fabrics of service? Simply stated what are its
components or building blocs?
Conceptually, service is an intangible property which involves the initiator and the
initiated, the encoder and the decoder. Admittedly, the links between the two and the end results
of their interaction reflect the cause and effect syndrome. Service originates in a formal mission
embraced by top management which influences and propels the direction of the organization.
Service attributes must permeate the entire strategic planning process to gain excellence.
QUALITY SERVICE IN BUSINESS
Successful companies monitor service at every level of the organizational hierarchy.

Many companies are discovering that employees who view one another as customers usually
treat their actual customers better. Successful companies listen to everyone in the distribution
chain (dealers, distributors, retailers). An executive of Holly Farms commented that “a good
relationship with your customers requires you to pay attention not only to them and to the
employees but also to every link in the distribution channel” (Forbes.com, 2009).
Successful firms eliminate the bureaucracy that often makes it difficult for customers to
register complaints or render suggestions. They also realize the relationship does not end with
the sale. A Newell Rubbermaid executive summed up the main tenets of quality service: “There
is no magic formula for staying close to your customer. It is basic consideration, time, effort,
commitment, and follow-up” (Rouse, 2006).
By training every employee in every division to focus on the customer, these companies
have come to dominate their markets. In many case they also lead in profits. These successful
firms share several common traits. Top executives are not just committed to staying close to the
customer; they identify with their clientele. A top executive of Lands’ end recently stated “I see
the customer as me, really. I am the typical Land’s End customer” (Fluss, 2002).
The academic landscape, like the business landscape has been changing at an increasing
speed. Environmental and uncontrollable factors have assumed a more critical role in the
698
survival of many institutions. Product (curriculum) proliferation and substitutes, scarcity of
funding and cost, global competition, consumer’s (student) sophistication and choices, and the
complexity of the marketing environment have all accentuated the importance of service.
Statements acknowledging the importance of service have been expressed acknowledging the
importance of service has been expressed by a broad spectrum of firms:
H.B. Fuller: “Smart managers know that it pays to put their customers first. They
cultivate the people who buy and use their products. The prime strategy is to keep
close to the customer for obvious reasons” (Zenke & Schaaf, 1989).
DuPont: “Many companies that once led in technology must now hang on to
market share by carefully tailoring their products to customer needs and deliver
quickly. As the world becomes more and more competitive, you have to sharpen
all your tools. Knowing what’s on the customer’s mind is the most important
think we can do” (Holliday, 2008).
Techsonic Industries: “The customer literally developed a product for us. The
quality of any product or service is what the customer says it is” (Menezes &
Palter, 1990).
Peters and. Waterman in their book, In Search of Excellence, writes “The

Japanese are a listening society. They were the original researcher of excellent
companies” (Peters & Waterman, 1978).
Four Seasons Hotels: “A single purpose dictates (our) priorities-to operate the
finest hotels in every city in which we are located… The customer may not
always be right, but employees are encouraged to err on his side” (Regan, 2009).
These successful firms share several common traits. Top executives are not just
committed to staying close to the customer; they identify with their clientele. A top executive of
Lands’ End was quoted saying “I see the customer as me, really. I am the typical Lands’ end
customer” (Fluss, 2002). And, Planet Feedback list as some of its mission statements: “(we) will
educate consumer and help them provide feedback that can lead to even greater value. We will
lower the thresholds to feedback: time, access, information.” (planetfeedback.com, 2009).
BUSINESS AND ACADEMIA: TWO WORLDS APART?
The nature and scope of the debate which revolves around proximity of the two worlds
(academic and business). And, ipso facto, the role and perception of quality service assume a
focal and prominent role in the complexities of the debates.
Some people argue that the two worlds are separable and mutually exclusive. They
believe that: (The Economist, 2005):
• business is profit motivated and is broken down into profit centers

• environmental factors (marketplace, competition, political, and legal) are swiftly
changing the business landscape
699
• business must deal with broader consumer selectivity of products offered
• globalization is a business s phenomenon
• good management techniques are sine qua non to business, and service is a strategic
component of its system.
It is further argued that what distinguishes one service from another is the quality of
service. In fact, the word uppermost among well-marketed organizations is not just any service
but ‘quality service’ (Deming, 1991).
Those who draw a major distinction between business and academic argue that, unlike
the corporate world, changes in an academic institution are never quick. The existing political
climate precludes rapid progress. Decision making must be shared with powerful groups of
senior professors whose tenure make them impossible to bypass. Further exacerbating this
distinction are the vocal alumni and the large student body, each of whom have their own
priorities.
The two main pillars of an academic institution are the faculty and the administration.
However, there has been a traditional incongruency between them in terms of philosophy and
identity. Discordant areas include:
• philosophy and identity in terms of target market(s)

• goals and objectives
• division of responsibilities and area of specialization
• interactive communication
• formal/informal organization
• pressure, status groups
• customers, collegial, community, and
• strategic planning and long-term direction.
These internal divergencies have created both real and potential results in the areas of:
resource allocation; budgeting/expenditures; services; loss of competitive edge; and internal
discord.
A significant number of academic institutions hold to the belief that:

• educational institutions enjoy a captive audience of students
• the quality of faculty will determine the success of the institution
• institutions are insulated from the marketplace and from the turmoil and hazards of
competition
• students are replaceable
• budgeting deficiency will b compensated through fund raising and other endowments
• students should expect and be ready to accept a lower quality service, if necessary, in
favor of quality education
• quality teaching and research are the panacea for attracting students to the institution
• strategic planning involves the risk of diverting scarce resources from the thing that
institutions do best-teaching
• strategic planning should be confined to the domain of the administration and serve
primarily to resolve crises as they occur.
700
Notwithstanding the arguments voiced by both schools of thought, those who view
business and academic as converging are still considered a minority. The majority views
educational institutions as being insulated from the outside world. They argue that academia is
and should remain untarnished by common business practices, and that business should rethink
and reevaluate its ethics and morals.
Ironically, the role of education is to develop and train future managers who can cope
with upcoming changes of the 2000s and beyond. Many perceive education as the “guiding
light” to business and industry. In the past few years, however, several academic institutions
have taken the lead in developing and implementing innovative strategies to better cope with
major threatening environment changes. And in order to survive. They have become more
pliable by better relating the community in their midst. They have resorted to strategic planning
and curriculum development as the two major pillars of changes.
What is behind these undertakings? Could those be perceived as panacea for survival?
Are these the tow lessons that academic earned and adopted from business?
Market conditions are becoming more tenuous. The pressure is building up across the
board regarding the entire spectrum of academic institutions. The critical issues that confront
many institutions is how to survive, if not thrive, include a dramatic drop in federal financial aid,
and major cut in private funding for research and other academic pursuits, as well as
demographic decrease in the number of 18 year-olds.
Most institutions fail o determine how and in what areas they could realistically achieve
excellence, or merely rise above the threshold of awareness to gain some degree of
competitiveness. The majority are production-oriented in lieu of tailoring their “product/service”
to the needs of their customers- the students. Many display a reluctance or rigidity to innovate
and introduce new approaches in dealing with the most important constituent on campus. The
incentive and motivation to find better ways of serving and attending to students’ needs, either
academically or procedurally, are almost nonexistent.
CONCLUSION
Second and third-tier institutions have e been losing their competitive advantage to those
that successfully design strategies which incorporate changes in their product offerings. Thy
have also been losing their comparative advantage to those that introduce and implement quality
service closely tied to educational goals and objectives.
Academic institutions that fail to comprehend the changing mood and need requirements
of students, will find themselves pursuing the same path which many business firms inflicted
with the same deficiencies have experienced. Ultimately, the outcome could result in bankruptcy
or a takeover by a domestic or foreign entity.
In the case of dissolution, takeover, or merger, the fate of academic institutions is no
better or different than their counterparts in business. They simply cease to retain their original
and inherent qualities and become an amalgam of cross-ideologies and influence, many of which
are foreign and controversial to the modus operandi of the institution. And only rarely, does the
student emerges as the benefactor of such an upheaval. In the aftermath of such a financial and
cultural shock, the internal divisiveness and lack of clarity in direction is powerful enough to
divert the attention and downgrade the student’s role and importance. Moreover, if and when the
dust settles, the few talented and productive faculty and administrative personnel will seek
alternative avenues that fee on their special qualifications and challenges
701
A good image is very important to any business, and schools are no exception. Schools
create a positive image in many ways including: the interior and exterior physical appearance of
buildings, the condition of the grounds, adequate sign for visitors, and through students who
graduate. Although students may be attracted y a new building or a first-rate academic programs,
the student will not return unless the people involved in those programs contribute to their
education, academically and socially.
Students may become interested in an institution because of its quality reputation, size,
location, financial aid, or other features, but their decision to enroll may be based on what is
done to make their first experience a pleasant one.
Positive relationships create an environment in which students feel connected and
satisfied, and that will make them want to stay. Students are especially sensitive to negative
behavior. Such behavior erodes their trust and distances them from the school. Conversely,
positive behavior builds bonds between students and staff and helps students believe in the
institution. As customers, the students expect fairness, courtesy, openness, pleasant, and friendly
service. They have goals beyond spending money for a course, and when they receive positive
communication, they feel content.
The way interaction takes place on campus among the various constituents is of primary
importance on conveying an overall image of value. This is more important than all the
advertising or money spent on image-building.
In order to succeed in today’s competitive environment, schools need caring, dedicated
staff. And satisfying students require campus-wide sensitivity to their needs and expectations.
The most successful schools put students’ interests squarely at the center of everything they do,
both inside and outside the classroom.
REFERENCES
Anonymous. “Higher Ed Inc.” The Economist, 376, (8443), 2005, 19-20.

Fluss, D. “Goodbye Lands’ End, the Royalty of Customer Service: Merger with Sears Could
Force Lands’ End to Abdicate Service Philosophy.” Customer Interface, 15, (7), 2002, 8.
Holliday, C. “DuPont Sustainability Progress Report” Retrieved from:
http://www2.dupont.com/Sustainability/en_US/assets/downloads/DuPont_2008_Sustaina
bility_Progess_Report.pdf, 2008.
Meneses, M., and Palter E. “Techsonic Industries, Inc: Customer Service.” Boston: Harvard
Business Publishing, DOI: 10.1225/591050, 1990.
Peters, T., and Waterman, R. “In Search of Excellence: Lessons from America’s Best-Run
Companies.” New York: Harper Collins, 1978.
Petty, P. “Deming of America” [Documentary Film]. Cincinnati, OH: The Petty
Consulting/Productions, 1991.
PlanetFeedback.com. “Mission Statement.” Retrieved from:
http://www.planetfeedback.com/index.php?level2=mission_statement, 2009.
Regan, K. “Little Things in a Hotel Mean a Lot to Business Travelers.” [Online]. Boston
Business Journal, July 3, 2009. Retrieved from:
http://boston.bizjournals.com/boston/stories/2009/07/06/smallb3.html, 2009.
Rouse, W.B. Enterprise Transformation: Understanding and Enabling Fundamental Change.
New York: John Wiley and Sons, 2006.
702
Tyson Foods. “Consumers Can Cook Again with Holly Farms Chicken.” Retrieved September
28, 2009 from http://www.globenewswire.com/news.html?d=174190, 2009.
Zenke, R., and Schaaf, D. The Service Edge: 101 Companies that Profit from Customer Care.
New York: Penguin, 1989.
703
POLARITY MANAGEMENT: BALANCING THE STRESS AND TRANQUILITY
POLARITIES DURING A RECESSION
Denise Gates, TAMIU

Member.retention@gmail.com
ABSTRACT
Using Albert Low’s conflict tensions and Barry Johnson’s polarity management models
as frameworks, this paper examines how employees in the hospitality industry might experiencea
recession and downsizing. It encompasses discussion on how to balance the stress and tranquility
polarities during a recession and urges leaders to plan for recessions long before they occur.
Having strategic plans in motion can help entitiescombat stress and thrive during recessions.
INTRODUCTION
The quote above was written by Berta (2009) and taken from a journal called Nation’s
Restaurant News. Understandably one might worry about employees in the hospitality industry
who lost their jobs. However, workers who remain in organizations after downsizing often
contend with feelings of stress and guilt. Restructuring can cause remaining employees to fear
being terminated next or to feel guilty that they kept their jobs when colleagues were fired.
Although the introductory quote emphasized events that transpired in the hospitality industry,
many organizations across the United States are saddled with the same dilemma. They are
contemplating their next strategic moves during tough economic times. Some organizations were
equipped for the downturn, but less prepared companies are barely able to survive. Government
bailouts have controversially come to the rescue of numerous corporations in the automotive and
banking industries as well as smaller organizations, still leaving a plethora of entities grappling
with the challenge of how to revitalize themselves. While some may argue that failing businesses
should be allowed to fail because, for example, “%'1œ"æ̨"ß̶̋"̇ßæŒæ̈ÆØ̋"Æº¸œßø "œ̶æ¬"
ØÆßßØ̋"̋©Æ¸̋º̊̋"ß̶̇ß"œæ̊Æ̋ß œ"̊æº̊̋øºœ"ø̋̌̇ø¸Æº̌"ß̶̋Æø"Ø̇̊Ł"æ̨"Œæø̇Ø"Ø̋̇¸̋øœ̶Æı"Æœ"ŒÆœıØ̇̊̋¸ "
9̋̈̋ø "にどなど "ı "なばひ "ß̶Æœ"ı̇ı̋ø"¬ÆØØ"ºæß"̇¸¸ø̋œœ"ß̶̋"̋ß̶Æ̊̇ØÆß "æ̨"̌æ©̋øºŒ̋ºß"̈̇ÆØæßœ"æø"
ß̶̋"Œæø̇Ø"̊æº¸̊ß"æ̨"%'1œ "This paper will explore issues stemming from the recession with a
tangential goal of encouraging corporations to devise strategies formore self-sustaining futures.
Specifically, this paper will discuss the importance of balancing the polarities of stress and
tranquility during a recession, as well as, strategically leading employees during uncertain times.
704
This manuscript is divided into a few sections. First, the paper provides a brief overview
of some of the extant literature on the intersection of stress and recession as well as that of
conflict and stress. The section on conflict and stress will encompass Albert Low’s (2008)
conflict tensions and how they compare to polarity management. Then, the focus turns to how
the hospitality industry can balance the stress and tranquility polarities during a recession.
Finally, the paper wraps up with concluding remarks on what can be learned from this paper.
STRESS AND RECESSION
“A recession represents a macrostructural change in economic and social relationships

and should, thereby, widely affect well-being” (Tausig & Fenwick, 1999, p. 13). Stressful events
can be present during any time at an organization, but recessions tend to exacerbate problems
that already exist (Robinson & Griffiths, 2005). Stress levels can increase dramatically when
employees fear downsizing due to a recession. Recessions can compound existing stress that may
result from work overload, fear of job loss, interpersonal conflicts, (Baehler & Bryson, 2008;
Zalezik, 1989), uncertainty (Ivancevich, Schweiger, & Power, 1987), etc. “Recession
exacerbates business weaknesses and pressures that in good times are either condoned or
overlooked; it induces panic and frustration in managerial decision-making, and it exposes
deficiencies in organizational responses and capabilities” (Beaver & Ross, 1999, p. 257). In other
words, recession and poor management are a bad combination. Therefore, leaders need sound
strategic plans that anticipate and prepare for hard times (DeDee & Vorhies, 1999). Institutions
considering only short-term goals, possessing a more myopic view of an organization, may find
themselves struggling during recessions. Even during good times leaders need to build extra
capacity and plan for potential changes in the market (DeDee & Vorhies, 1999). Lack of
planning can induce stress. Ultimately, recessions magnified stress.
Restructuring accounts for the greatest levels of stress and dissatisfaction for
employees(Tausig & Fenwick, 1999). During mergers and acquisitions employees worried about
job security and benefits (Ivancevich, Schweiger, & Power, 1987). “Unemployment and
productivity-related job restructuring are also fundamental to understanding any consequent
changes in emotional well-being,”(Tausig & Fenwick, 1999, p. 13). The stress is intensified
when leaders are unwilling to disseminate information to alleviate concerns. Recessions require
more support to employees. Because transformational change induces stress, leaders can preempt
it by planning ahead to help employees (Robinson, & Griffiths, 2005;Sullivan, 2009). Managers
can dialogue openly and clearly about how the recession might affect employees (D’Aprix, 2009;
Sullivan, 2009). A recession is no time for leaders to stop communicating with employees,
especially about bad news (D’Aprix, 2009). Employees may rely less on the media or
speculation and rumor when their leaders are forthcoming. One-third of the companies surveyed
by International Association of Business Communicators and Mercer Human Resource
Consulting reported that leaders, during a crisis, only addressed the “specific issues and
inquiries”(D’Aprix, 2009, p. 13). One in five leaders, reportedly, were “not visible or actively
responding …to the economic crisis” (p. 13). Leaders need to share goals for coping during
economic hardships. One such plan could entail providing training to prepare employees for new
jobs. Leaders can also model desired behaviors such as remaining calm, positive, and realistic
(Sullivan, 2009). Because lack of control and uncertainly can lead to stress (Baehler & Bryson,
2008; Ivancevich, Schweiger, & Power, 1987; Robinson, & Griffiths, 2005), managers can
refocus employees by re-directing their attention to what they can control such as performance
705
(Berta, 2009). Recognizing and rewarding good work can further combat stress (Sullivan, 2009).
Ultimately, support systems need to be in place (Sullivan, 2009), and leaders must not avert
employee concerns (Berta, 2009; Sullivan, 2009). Restructuring takes a toll on employees.
Retrenchment activities were germane to the survival of many organizations during
recessions. Retrenchment is defined as “a set of senior management initiatives to reverse
declining financial performance and achieve cost and asset reductions, or in some cases revenue
generation” (DeDee & Vorhies, 1999, p. 48). An example of retrenchment could be outsourcing.
Shared reduced work schedules could preserve all jobs. Companies that used retrenchment
strategies performed better or bounced back more quickly than those who did not. Smaller
businesses need retrenchment activities the most because they do not have parent companies to
help sustain them. Regardless, of size, however, efforts to scale back need to be strategic. For
instance, retaining advertising and marketing activities may be crucial as customers need to
know what organizations are prepared to do for them (DeDee & Vorhies, 1999). Retrenchment
has its limitations as the change can induce stress. Surprisingly, involving boards of directors to
planning meetings for retrenchment was not beneficial because they lack day-to-day knowledge
of what transpires in a company. Another tip to managing stress during retrenchment is
centralization. “Firms should centralize some decision-making during recession to control costs
and reduce the inefficiencies that may be present in a highly decentralized organization (DeDee
& Vorhies, 1999, p. 59). Leaders should be cautioned that the loss of power and control could
trigger feelings of stress, anxiety, and uncertainty.
While organizations must plan for economic downturns long before they occur, it is
important to be cognizant of the fact that efforts to manage or alleviate stress can fail for a
variety of reasons (Dewe & O’Driscoll, 2002). Sometimes stress during a recession isn’t handled
well because leaders don’t agree on how to manage the stress, nor do they agree on who is
responsible for managing it. A salient question for some organizations is whether employee
stress is an individual or organizational problem. A partnership between employees and leaders
may give all parties some ownership in tackling the problem. Other challenges to stress
management exist. Sometimes events marketed as intervention were not originally intended to
be. Those events were designated as such because they generally addressed employee issues.
Leaders may have better success with interventions when they are specifically tailored to combat
employee stress (Dewe & O’Driscoll, 2002).
CONFLICT AND STRESS
This section of the paper discusses stress and conflict, tying it to strategy and recession
when possible. A good place to start is by acknowledging the work of Albert Low (2008). He
introduces conflict tensions and articulates the need for conflict in order to promote positive
organizational change. Conflict is not always bad. It just simply needs to be managed. He speaks
of productive and non-productive conflict. Productive conflict “comes from the nature of
organization itself. One could say that each department seeks to maximize ‘its own return’ which
creates tension and possibly conflict,” (Low, 2008, p. 145). Non-productive conflict “arises
either through poorly delegated work (such conflict often erupts as turf wars) or through
personality clashes; the latter is probably much less frequent than most managers would believe”
(Low, 2008, p. 145). When conflict erupts, whether constructive or destructive, it still can cause
stress in employees. Even a well-intentioned plan to deal with the economic downturn can cause
conflict, both productive and non-productive. People may not agree on how to move, when to
706
move, or why to move. They may become territorial over aspects of their job responsibilities
being delegated to someone else by top management—someone they perceive as less qualified.
Nevertheless, employees must learn to deal with the conflict because it is an inevitable part of
organizational life. A lack of conflict would lead to less innovative problem-solving because
employees would become fearful of challenging ideas or suggesting more creative ones. Low
(2008) said that a lack of conflict means that more work would be left undone. Therefore,
conflict is essential to organizational growth. Just as in the polarity management model,
managers have to balance the tensions arising from conflict (Johnson, 1996; Low, 2008). A
balance between conflict and tranquility is mandatory because too much conflict can be
problematic, but not enough conflict can cause organizations to become stagnant.
Kinman and Jones (2008) addressed work-life conflict, emphasizing balance. To be
content, employees must perceive balance and equity in the efforts they expend and the rewards
they receive. If individuals are so committed to an organization that they sacrifice family, this
might lead to work-life conflict. Perceived fairness in distribution of rewards as well as
flexibility in scheduling so employees could meet family needs, influenced perceptions of work-
life conflict. “It was anticipated that anorganizational culture that supported work-life balance
might protect employees from work-life conflict,” (Kinman & Jones, 2008, p. 246).
This culture of support also can be duplicated at home, according to Rotondo, Carlson,
and Kincaid (2003). They contend that family interference with work conflict can be reduced at
home when employees rely on help-seeking and direction action. Help-seeking can reduce the
workload and help employees more effectively balance the work-family polarity. Further
managing this situation, managers can offer training to help reduce high levels of conflict.
Because avoidance/resignation was so prevalent in all of the conflict types, managers can offer
training to help employees learn how to cope with tensions resulting from conflict, (Rotondo,
Carlson, and Kincaid, 2003).
APPLICATION
What follows is an attempt to apply the conflict tensions from Albert Low (2008) and the
stress tranquility polarities from Barry Johnson (1996), as shown in figures one and two, to what
is likely to happen to the remaining employees in the hospitality industry based on the
introductory quote. With respect to the conflict tensions, the remaining hospitality workers are
suffering stress primarily related to downsizing and restructuring. Even though the organizations
have downsized so they can stay in business, which is a positive move, the remaining employees,
are experiencing stress because of it. They are now fearful that their jobs will be cut next.
Regardless of the toll on employees, the hospitality industry could not avoid this situation. Had
the organizations done nothing, they would not have had the funds to operate. Therefore, the
strategic choice faced by management turned out to be productive because the organizations are
still open for business, and the majority of employees still have jobs. The conflict could
potentially become non-productive if during the restructuring leaders filled positions with less
qualified staff because their talented employees have been downsized. In order to manage or
balance conflict tensions, the organizations need to do something the employees will perceive as
positive, such as provide training for existing employees to equip them for new or expanded
roles. Training may encourage them to feel more secure about their new positions or the
changing workplace demands as a result of the restructuring. Training can also show employees
they are valued and appreciated, and it could partially alleviate ongoing fear about job security.
707
Additionally, this training and experience may be beneficial for employees in future
organizations should their tenure in the present one expire or even if their future in the restaurant
industry is short-lived. Management needs to listen to employees and respond honestly and
quickly to their inquiries. Ultimately, managers may want to offer support to employees so that
they can eventually provide outstanding customer service to clients.
Based on the introductory quote and the insight about the hospitality industry, the stress
and tranquility polarities during work in the hospitality industry would look like this.
As revealed in figure one, prior to downsizing employees in the hospitality industry were
probably at L+ (Eustress, Stimulating, Challenging). They might have been moving back and
forth between L+ and R- (Boring, Unstimulating, and Unchallenging) as many of them did the
same tasks repeatedly. Those who craved intellectual stimulation probably looked forward to
more excitement, so they longed for the day they could return to L+, but for now they were in the
R+ quadrant (Relaxing, Replenishing, and Rejuvenating), where they were grateful to have jobs
and paychecks. They knew how to do their jobs, and their positions offered them some measure
of tranquility. Then the recession occurred, and they became concerned. Fearfully, they braced
for L-. Then top management announced massive downsizing. As a result, the organizations
quickly moved to L-, and the effects of this quadrant intensified as they braced for more bad
news, possibly even being told they, too, would be downsized. They lingered in L- for a period
of time until management tried to help them cope with the ensuing stress. They longed for L+ or
R+ just to have a break from all the bad stress. Now they are irritable, overwhelmed, and
distressed. Managers now have to be more patient and sensitive with employees as they endeavor
to recover from the restructuring. It might take time for trust to be re-established, so leaders need
to be prepared. Ultimately, the path before and after downsizing might look like this: L+, R-,
L+,R-, L-. Management would have to work to get organizations from L- after the downsizing.
FIGURE I: STRESS / TRANQUILITY POLARITY (WORK BEFORE

AND AFTER DOWNSIZING)
L+
L+ R+
Eustress Relaxing
Stimulating Replenishing
Challenging Rejuvenating
3
1
STRESS
L- TRANQUILITY
R-
Distress Boring
Overwhelming Unstimulating
Irritating Unchallenging
Loss of Ethnic Initiative
and Creativity 24
5
A more productive strategy can be found in figure two. It might look like this: L+, R-,
R+, L-,L+. The path would continue along a progression that moved through the highs and lows
708
of stress and tranquility, keeping them in balance so that employees experience more of the
upsides of stress and tranquility and less of the downsides of them.
FIGURE II: STRESS / TRANQUILITY POLARITY

(WORK IDEAL)
L+
L+ R+
Eustress Relaxing
Stimulating Replenishing
Challenging Rejuvenating
5 1 3
STRESS TRANQUILITY
Distress Boring
Overwhelming Unstimulating
Irritating Unchallenging
Loss of Ethnic Initiative
4
and Creativity
2
L- R-
CONCLUSION
The purpose of this paper was to explore the current research on how employees
experience stress and conflict, particularly during a recession. Using Albert Low’s (2008)
conflict tensions and Barry Johnson’s (1996) polarity management models as frameworks, it
shows how employees in the hospitality industry might experience the recession and downsizing.
This was followed by discussion on how the hospitality industry can balance the stress and
tranquility polarities during a recession. The result was to show how recessions can exacerbate
existing organizational problems by inducing stress for employees and managers. However,
leaders can help manage these situations with solid strategic plans that account for recession-
induced uncertainty. Leaders can preempt distress by planning ahead and preparing employees
for difficult times. Stress and conflict have their upsides, and astute leaders can develop and
implement strategies to enable organizations to benefit from them.
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Management and Business Development: The Abandonment Of Strategy?” Strategic
Change, 8, 1999, (4), 251-261.
Berta, Dina. “Q&A: LeadershipIQ’s Murphy: De-stress Layoff Survivors.” Nation’s Restaurant
News,43, (4), 2009,12.
D’Aprix, Roger. Guiding theCommunication Efforts of a Reluctant CEO. SCM, 13, (3),
2009, 13.
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DeDee, Kim, and Vorhies, Douglas.W. “Retrenchment Activities of Small Firms During
Economic Downturn: An Empirical Investigation.” Journal of Small Business
Management, 36 (3), 1999, 46-61.
Dewe, Philip and O’Driscoll, Michael. “StressManagement Interventions: What Do Managers
Actually Do?” Personnel Review, 31, (1-2), 2002, 143-165.
Ivancevich, John. M., Schweiger, David. M, andPower, Frank. R. “Strategies for Managing
Human Resources during Mergers and Acquisitions.” Human Resource Planning, 10, (1),
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Gail, and Jones, Fiona. “Effort-Reward
Imbalance, Over-Commitment and Work-Life Conflict: Testing an Expanded Model.” Journal of
Managerial Psychology, 23, (3), 2008, 236-251.
Low, Albert. Conflict and Creativity at Work: Human Roots of Corporate Life. Portland: Sussex
Academic Press, 2008.
Robinson, Oliver, and Griffiths, Amanda. “Coping With the stress of transformational change in
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Sullivan, Jim. “Manage your employees through therecession to keep them happy, productive,
and motivated.” Nation’s Restaurant News,43, (4), 2009, 12.
Tausig, Mark, and Fenwick, Rudy.
Recession and well-being. Journal of Health and Social Behavior, 40, (1), 1999, 1-16.
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Zaleznik, Abraham. “The mythologicalstructure of organizations and its impact.” Human
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CHAPTER 31
STRATEGIC MARKETING
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MARKETING PRACTICES OF THE MANLEY POPCORN COMPANY: A COMPANY
AHEAD OF ITS TIME, OR AN EXAMPLE OF TIMELESS MARKETING
Edward Bond, Bradley University

bond@bradley.edu
Ross L. Fink, Bradley University

rf@bradley.edu
Rajesh Iyer, Bradley University

riyer@bradley.edu
ABSTRACT
Most Marketing Principles textbooks include a section dealing with the history of
marketing as it unfolded across several sequential eras. Introducing marketing eras serves a
pedagogical purpose because it provides a framework from which professors can address several
conceptual issues that are of importance to marketing practitioners. However, this standard
treatment of marketing history leaves students and some theorists believing that the hallmarks of
modern marketing are all recent. By reviewing the practices of one company over several
decades, we provide illustrative examples of marketing practices being applied long before they
were recognized or championed by marketing scholars. We center attention on market
segmentation and target marketing, integrated marketing communication, globalization, and the
marketing of solutions. Our observations suggest that marketing scholars should observe the
specific behaviors of firms in order to interpret their actions, rather than evaluating them through
the lens of a periodization scheme.
INTRODUCTION
Most Marketing Principles textbooks include a section dealing with the history of
marketing as it unfolded across several sequential eras. Typically each era is characterized by a
term that the authors believe captured the dominant focus of marketing activities at the time.
Although the lists of eras vary from textbook to textbook, the practice is dominant (Jones &
Richardson, 2007) and the general flow follows Keith’s (1960) influential sequencing of a
production era, sales era, and marketing era with any of a variety of newer eras added. For
example, Perreault, Cannon, and McCarthy (2008) summarize the development of marketing as
captured in a simple trade era, a production era (from the industrial revolution through the
1920s), a sales era (from 1930-1950), a marketing department era (1950-1960) and a marketing
company era (after 1960). Grewal and Levy (2008) outline a production-oriented era (around
1900), a sales-orient era (1920-1950), a market-oriented era (post WWII), and a value-based era
(beginning in the late 20th century) in marketing practice.
Despite the work of historians who have identified alternative periodizations of
marketing history based on research, the use of marketing eras to introduce conceptual issues
continues (Fullerton, 1988; Jones & Richardson 2007; Low & Fullerton 1994; Tadajewski,
2008). Introducing marketing eras serves a pedagogical purpose because it provides a framework
from which professors can address several conceptual issues that are of importance to marketing
712
practitioners. In addition, it provides the opportunity for scholars to discuss “modern”
innovations such as segmentation, product differentiation, and the rigorous focus on customers
that are central to the marketing concept (Drucker, 1954; Smith, 1956). However, this standard
treatment of marketing history leaves students and some theorists believing that the hallmarks of
modern marketing are all recent.
We believe that this approach supports a bias toward thinking that contemporary
marketers are especially enlightened and that marketers throughout the rest of history were
dullards. In contrast, we suggest that the marketing discipline will have greater credibility if the
body of knowledge we pass on to students includes examples of marketing behavior that is
successful and not bound to relatively arbitrary eras of time. We think it is indeed possible that
although we have only recently theorized about many marketing concepts, that they have
occasionally, although surely not uniformly, been deployed throughout history. Is it really a
stretch to believe that there might have been a band of 8th century traders who were focused on
generating, disseminating, and responding to information about customers and competitors (cf.
“market orientation” as described by Kohli & Jaworski, 1990)? In short, we believe that
illustrating good marketing practices as timeless, to the degree that such a characterization is
appropriate, is better than teaching a linear evolution of marketing practice that has been largely
discredited.
Toward that end, the purpose of this paper is to review the practices of one company
(Manley Popcorn) over several decades in order to provide illustrative examples of marketing
practices being applied long before they were recognized or championed by marketing scholars.
We center attention on market segmentation and target marketing, integrated marketing
communication, globalization, and the marketing of solutions.
The remainder of this paper is organized as follows. First, we provide a foundation for
our extended case by introducing the Manley Popcorn Company. Second, we provide illustrative
examples of “modern” marketing concepts that were routinely applied by Manley Popcorn
before they were part of the marketing discipline’s parlance. We close with implications for
marketing scholars and practitioners.
Manley Popcorn
Manley Popcorn was established in 1922 (originally as Burch Manufacturing) and
operated as an independent company until it was sold in 1993. Charles T. Manley was a Montana
entrepreneur who developed an electric popcorn machine (Bartlett, 1949). Earlier popcorn
poppers were gas-powered and created significant odors. Having an electric machine allowed
Burch Manufacturing (later called Manley) to place popcorn machines indoors. In turn, this
allowed Burch to target customers such as theaters, chain stores, and train stations, suggesting
that popcorn machines could be profitable because those venues had the principle determinant
characteristic for popcorn sales – high foot traffic. Manley had great success and achieved a
dominant market share position (Manley, 1947a). Manley continued to be a growing company
throughout its first three decades. It pursued an aggressive market growth strategy that addressed
market segments with high foot traffic, and centered specific attention on growing in the theater
market. The company became a global provider in the wake of World War II, having followed
the American military around the globe (C. Cretors & Co., 1985, p 86-87). The founder died in
1946 and the company slowly lost share, then “limped along with reduced operations until it was
liquidated decades later” (Smith, 2001, p. 111).
Segmentation and Target Marketing
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The modern concept of market segmentation was introduced by Wendell Smith in an
influential 1956 article and has since become a foundational element of modern marketing
(Smith, 1956; Wedel & Kamakura, 2000). Although segmentation was a latecomer in marketing
thought, Manley pursued a segment-based primary demand strategy in the late 1920s and 1930s.
As previously noted, Charles T. Manley centered marketing attention on customers with high
foot-traffic in their businesses. This is illustrated by focus on train stations such as the Union
Station in Kansas City where popcorn sales were said to “vary between 500 and 1200 boxes a
day and provide an accurate gauge, station officials say, of volume of travel” (Bartlett, 1949).
The segmentation approach used characteristics of the customer organization or the end market
served to identify customers who could probably make money with a Manley popcorn machine.
This is in line with current recommendations for business-to-business market segmentation (Hutt
& Speh, 2010).
Among these high-foot-traffic customers with high potential for popcorn sales (markets,
bus terminals, delicatessens, candy shops, etc.), Manley determined that theaters combined high
foot traffic with patrons who had time on their hands and who are out for entertainment. Thus,
much of Manley’s marketing effort was centered on primary demand, specifically getting
theaters to begin selling popcorn. Of course, Manley would seek to have them begin their
adventure using a Manley popcorn machine.
Three factors allowed Manley to aggressively grow popcorn machine sales to theaters.
First, traffic to movie theatres soared during the 1930s (Smith, 2001). Second, popcorn was a
relatively inexpensive treat that many people could afford. Third, theater owners recognized that
they could make sizeable profits on popcorn (Bartlett, 1949).
Sales of Manley machines became easier as stories of movie theater success spread. One
story involved R. J. McKenna, the general manager of a chain of sixty-six movie theaters. In
1938 his theaters lost money on the sale of admission tickets, but they made nearly $200,000
from the sale of popcorn. Throughout the rest of his career, McKenna claimed that he would
reduce the price of his tickets to draw people into his theaters and count on popcorn to make his
profits, effectively using tickets as a loss leader (Bartlett, 1949). Another story involved the
owners of a large theater chain in New England who gave the concession business to their wives.
The enterprising spouses went on to make over $500,000 per year from concession sales
(Bartlett, 1949).
As competitors entered the market, movie theaters preferred the design of Manley’s
floor-length machines, rather than competing models with legs because they were more desirable
for incorporation into a concession stand and easier to keep looking neat and clean (C. Cretors &
Co., 1985, p. 91-92). Manley’s focus on theaters paid off. By 1947, seventy percent of the
popcorn machines in movie theaters throughout the US were made by Manley (Manley, 1947a).
When World War II domestic sales of popcorn machines were at a standstill, Manley placed
machines in chain stores on a concession basis (Bartlett, 1949). Again Manley chose an approach
that focused on the high level of foot-traffic enjoyed by these stores. The result was that in 1949,
Bartlett could note that, “With some 1500 machines now operating on a concession basis in
many chain stores, the extent of this operation may be deduced from the fact that one five-and-
ten-cent store in Detroit recently sold 66,000 bags of popcorn in one month” (p. 145).
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Integrated Marketing Communication
The concept of integrated marketing communication (IMC) entered the academic
dialogue in the early 1990s (Shultz, 1992). The aim of IMC is to coordinate the voices of all
communicative elements of the marketing mix including public relations, advertising, sales, and
direct marketing (Grewal & Levy, 2008). Throughout most of its history, Manley nicely
coordinated the messages in its sales literature, paid advertising, and public relations. The sales
literature and owners’ manuals consistently talked about using the three M’s (Manley Machines,
Manley Merchandise, and Manley Methods) to make money. Advertising in Boxoffice and
Billboard featured the theme of making money with the 3 M’s. Articles in trade publications,
presumably influenced by Manley public relations, featured the same themes (Hudnall, 1950,
Manley, 1946). All company literature we reviewed from the 1940s and 1950s featured the 3 M
approach to making money for Manley customers. Figure 1 provides an example of the 3 M
message.
FIGURE I: Manley’s Three Ms
Manley, Inc. (1947a), How to Make Big Profits From Popcorn, Kansas City, MO: Manley, Inc.
The appearance and function of Manley machines was designed to assist with promotion
and the merchandising materials (bags, boxes, pennants, signs) portrayed a stunningly consistent
set of colors and imagery. Manley was staying on message in everything from public relations to
operating manuals long before marketing scholars had discovered Integrated Marketing
Communication.
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Going Global
In an era when the Journal of Marketing was focusing attention on globalization
primarily with respect to agricultural trade practices (Johnson, 1946; Newcomer, 1958), Manley
was becoming a global provider of popcorn machines and the merchandise that supported them.
During World War II, Manley machines, popcorn, and merchandising materials followed the
Army and Navy around the world because of existing contracts with the U.S. Government. “The
exchanges had been using our products domestically. When World War II came on, they just
automatically took everything with them. When the war ended, all the bases disposed of their
equipment—wherever they were located” noted Charles G. Manley (Boxoffice, 1966). As a
result, Manley started receiving communications from people all over the world who were using
Manley machines. Follow-up led to such a high volume that Manley’s exporter was swamped
and their own marketing department took over the international operations. In quick order,
Manley became a skilled international marketer.
Solutions
Inspired by the eras of marketing practice, we also explore an especially recent
development, the now almost ubiquitous concept of marketing solutions. Kumar (2004)
characterizes solutions as creating customer value by lowering customer costs, managing
customer risks, or maximizing customer revenue. The Manley company sought to sell customers
a complete business model and to teach them how to maximize revenues with that model. As
expressed by the company’s leader, “It has always been a self-interested Manley policy to try in
every way possible to help customers sell popcorn” (Bartlett, 1949). The Manley Popcorn
Company backed this sentiment with support materials accompanying their popcorn machines
promising to “assist you in creating a successful and highly profitable popcorn business for
yourself” (Manley, 1947a).
In 1941, the Manley market offering seems to have been a turn-key solution, “To this end
his company’s new machines will be put out, not as just popcorn machines, but as merchandising
propositions with a complete merchandising setup. The entire field organization of the company
is being trained as merchandising experts with the idea that they can serve the owners of these
machines to a far greater standpoint in extra profits over a relatively short period of time than the
actual cost of the equipment” (Boxoffice, 1941).
Throughout Manley’s entire history, much of the company’s success stemmed from its
ability to provide total support for customers, so that Manley customers would make money with
Manley popcorn machines. This process can be illustrated in a 1923 advertisement by Burch
Manufacturing. The ad presented the case study of L. J. Lenhart of Kansas City, who made $348
in 28 days. At the time, the company also offered a free book that taught customers how to get
started in the popcorn business (Burch Manufacturing Company, 1923).
Later, the Manley’s formula for customer success was refined into the 3 M’s of
“Profitable Popcorn Merchandising,” specifically, Manley Machines, Manley Merchandise, and
Manley Methods. This is illustrated in a variety of ads in the late 1940s. It is also outlined in the
booklet “How to Make Big Profits from Popcorn (Manley, 1947a).
As a natural outgrowth of this philosophy, Manley entered the supply business. In today’s
terminology, we might describe this as growing share of wallet or “demand innovation” (see
Slywotzky & Wise, 2003). Manley simply leveraged its position as a machine manufacturer and
addressed all of the elements that might influence the profitability of a customer’s business.
These included machine placement, operation and sales methods, bags and boxes, and
716
promotional materials. Each additional element added to the revenue stream that Manley enjoyed
from happy customers who were running successful businesses.
Manley Machines
Popcorn machine customers purchased their popcorn by weight, but sold it by volume,
which drove several behaviors by Manley (Smith, 2001). Manley argued that the machine
contributed to proper expansion. Other manufacturers promoted a dry popping process that only
created optimal expansion for a small portion of kernels. In contrast, Manley machines used oil
or melted fat to spread heat evenly and promote maximum expansion for all of the popcorn.
For many years, Manley invested heavily in innovation in order to introduce new popcorn
machine models that improved the popcorn technology and attracted more customers. This began
in 1946 with the introduction of the M-46. It was a sleek design with lots of aluminum and
chrome and a lighted red and white top to attract customers. Manley followed this with the
introduction of the Aristocrat in 1950 (Hudnall, 1950). The Aristocrat added a Cascade kettle
that was suspended from the ceiling of the machine, giving it a 1950s look. The new machine
also added adjustable temperature control to the kettle providing it with the ability to produce a
variety of popcorn at higher levels of quality. This included Kandy Korn (which today we refer
to as caramel corn and kettle corn), and “Cheesies” (which today we refer to as cheese coated
popcorn). The machine focused on customer profitability by improving the percentage of kernels
that were popped, providing additional lighting and much more activity in the machine to appeal
to end users, and venting an exhaust of filtered air that carried the aroma of popcorn throughout
the area around the machine. This was specifically designed to enhance sales by exposing
potential customers to the pleasing aroma of popcorn (Hudnall, 1950).
Innovation continued with the 1955 introduction of the Model 67 Vista-Pop. Centered on
continuing to enhance popcorn sales for Manley customers, an added attribute of the Vista-Pop
was a Pyrex kettle that allowed potential customers to see the popcorn actually pop (continuing
the theme of creating activity in and around the machine). The Vista-Pop improved on keeping
the popped popcorn warm by including a hot-air blower. Just like the M-47 and the Aristocrat,
the Vista-Pop was an attention-getting machine that was flashy with significant amounts of
chrome along with a light red and white top.
Manley Merchandise
Because expansion of the popcorn was directly related to customer profitability, Manley
recognized that customers would reward them if they could provide superior popcorn. Thus,
Manley purchased land and grew a specific strain of popcorn that was chosen to maximize
expansion in popping and to create an appetizing appearance. By 1947, 12% of the popcorn crop
in the US was either grown by, or on contract for, Manley and it was distributed through 20
Manley warehouses (Manley, 1947a).
Maximizing customer revenues required Manley to work with major salt companies to
produce a special popcorn salt and to provide customers with a variety of supplies including their
high quality “Popcorn Seasoning” (popping oil) (Manley, 1947a; Manley, 1947b). Manley
merchandise also included promotional materials and various colorful, high-quality boxes and
bags for the popped popcorn. These containers were red and white, keeping with the color
scheme of Manley machines. Materials featured an elephant by the name of Jumbo to suggest
jumbo-sized popcorn.
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Manley Methods
Manley not only taught its customers how to maintain and operate a popcorn machine, it
also pledged to “never knowingly sell a Manley Popcorn Machine in a poor location” (Manley,
1947a, p. 42). Manley recommended allowing their “location analysts” to identify the best
location for a customer’s popcorn machine. Manley methods dealt with the production of high-
quality popcorn as well as guidance on how to sell the popcorn itself. Manley provided
suggestions on how the operator of the machine should be dressed or costumed. Beyond the
traditional well-combed hair and clean shirt, suggestions included top hat and tails, a Spanish
costume, or a dancing costume.
IMPLICATIONS
Review of Manley Popcorn’s practices suggests that several “modern” marketing

concepts may have been in routine practice long before marketing scholars paid much attention
to them. Although one could rightly note that Manley spent considerable efforts on sales at the
height of the sales era that is only a portion of the story. Manley targeted a specific market
segment (theaters) and used characteristics of the customer organization (akin to segmentation by
NAICS codes or end market served, see Hutt & Speh, 2010) to target its marketing efforts.
Manley coordinated all elements of the promotional mix (advertising, personal selling, sales
promotion, and publicity) in the best tradition of modern Integrated Marketing Communication
(Schultz, 1992). Finally, Manley implemented many elements that are consistent with the
emerging focus on solutions in marketing (Kumar, 2004; Slywotzky & Wise, 2003) in the middle
of the 20th century.
Market researchers should keep an open mind when studying the activities of marketers
from earlier times. Instead of pigeon-holing firms into predetermined eras and interpreting their
actions through the lens of the period, marketing scholars should look at the specific behaviors of
firms. Although terminology to accurately describe marketing behaviors may not have been
developed at the time, the behaviors of successful firms from decades past may serve to illustrate
that great marketing ideas are more timeless than we have believed.
Marketing practitioners should be aware that review of practices by firms in the past may
yield ideas that still work. Customers have always wanted to feel special and to have their needs
met. Information about competitors’ practices and customer needs has always been useful to
support strategic decisions. A consistent message has always been valuable to build a set of
strongly-held and unique beliefs about a firm.
Although we may have better information sources and more sophisticated methods at our
disposal, the practices of marketers throughout history can provide important lessons as to how
we can take better care of our customers today.
REFERENCES
Anonymous. “Burch Manufacturing Company.” Popular Mechanics, 40, (6), December, 1923,
183.
Bartlett, A. “Popcorn Crazy,” Saturday Evening Post, 221, (47), 1949, 141-145.
Boxoffice. “Purpose to Assure Better Popcorn Supply,” Boxoffice, 38, (7), Jan 4, 1941, 54-55.
Boxoffice. “Manley’s Popcorn Exports Surge as Result of War,” Boxoffice, 89, (9), June 20,
1966, 9.
718
C. Cretors & Co. C. Cretors & Co: The First Hundred Years 1885 – 1985. Chicago, Illinois: C.
Cretors & Co., 1985.
Drucker, P.F. The Practice of Management. New York: Harper & Brothers, 1954.
Fullerton, R.A. “How Modern is Modern Marketing? Marketing’s Evolution and the Myth of the
‘Production Era.’” Journal of Marketing,52, (1), 1988, 108-105.
Grewel, D., and Levy, M. Marketing. Boston: McGraw-Hill Irwin, 2008.
Hudnall, K. “Popcorn Machine in Gala Review.” Boxoffice, 57, (5), 1950, 38-39, 42.
Hutt, M.D., and Speh, T.W.Business Marketing Management, 10th ed. Mason, Ohio: South-
Western Cengage Learning, 2010.
Johnson, A.R. “Some International Angles on Postwar Agricultural Trade.”Journal of
Marketing,11, (3), 1946, 174-178.
Jones, D.G.B., and Richardson, A.J. “The Myth of the Marketing Revolution.” Journal of
Macromarketing,27, (5), 2007, 15-24.
Keith, R.J. “The Marketing Revolution.” Journal of Marketing, 24, (1), 1960, 35-28.
Kohli, A.K., and Jaworksi, B.J. “Market Orientation: The Construct, Research Propositions, and
Managerial Implications.” Journal of Marketing,54, (2), 1990, 1-18.
Kumar, N. Marketing as Strategy. Boston: Harvard Business School Press, 2004.
Low, G.S., and Fullerton, R.A. “Brands, Brand Management, and the Brand Manager System: A
Critical-Historical Evaluation.” Journal of Marketing Research, 31, (2), 1994, 173-190.
Manley, C.G. “Popcorn Sales Resistance: How to Turn it into Profit,” Boxoffice, 49, (15), 1946,
25-27.
Manley, Inc. How to Make Big Profits from Popcorn. Kansas City, Missouri: Manley, Inc.,
1947a.
Manley, Inc. Model M 46 M47 Instruction Book. Kansas City, Missouri: Manley, Inc., 1947b.
Newcomer, H.A. “Barter in Mexican Cotton: A New Concept in International Trade?” Journal of
Marketing,23, (3), 1958, 159-163.
Perreault Jr., W.D., Cannon, J.P., and McCarthy, J. Basic Marketing: A Marketing Strategy
Planning Approach, 16th ed. Boston: McGraw-Hill Irwin, 2008.
Schultz, D.E. “Integrated Marketing Communication.” Journal of Promotion Management, 1,
(1), 1992, 99–104.
Slywotsky, A., and Wise, R. How to Grow When Markets Don’t. New York: Warner Business
Books, 2003.
Smith, A.F. Popped Culture: A Social History of Popcorn in America. Washington, D.C.:
Smithsonian Institutional Press, 2001.
Smith, W.R. “Product Differentiation and Market Segmentation as Alternative Marketing
Strategies.” Journal of Marketing,20, (3), 1956, 3-8.
Tadajewski, M. “Relationship Marketing at Wannamaker’s in the Nineteenth and Early
Twentieth Centuries.” Journal of Macromarketing, 28, (2), 2008, 169-182.
Wedel, M., and Kamakura, W. Market Segmentation: Conceptual and Methodological
Foundations, 2nd ed. Norwell, MA: Kluwer Academic Publishers, 2000.
719
THE EFFECTS OF MARKET ORIENTATIONON COMMERCIAL BANK
PERFORMANCE
Paloma Bernal Turnes, Rey Juan Carlos University

paloma.bernal@urjc.es
Irene Garrido Valenzuela, University of Vigo

ireneg@uvigo.es
Carmelo Mercado Idoeta, Rey Juan Carlos University

carmelo.mercado@urjc.es
ABSTRACT
In the recent years, market orientation has been considered to be a key issue for business
success. Narver and Slater (1990) and Jaworski and Kohli (1993) are the main studies that
identify market orientation as the determinant of a company’s profitability. However it is
necessary to do further studies to build valid scales and models that can demonstrate the
relationship between market orientation and organizational performance. The general objective
of this paper is to analyze the influence of market orientation on the business performance in the
commercial bank sector in four European countries (France, Spain, Poland and Hungary).
INTRODUCTION
The concept of market orientation has become increasingly important in developing

superior customer value within organizations. Indeed, many empirical studies have provided
evidence of the positive relationship between market orientation and business performance.
However, the literature suggests that a deeper understanding of marketing orientation construct, a
consensus of its definition, and the application of a long-term approach of business performance
with objective measures are needed.
Market orientation is critical for commercial banks´ superior performance and long-term
competitive advantages, in an increasingly multinational financial environment in Europe. To
underpin the development of a single market for financial services and harness the full potential
benefits of the Euro, the European banking industry (European Commission, European Central
Bank and private financial institutions) is creating a Single Euro Payment Area (SEPA), with the
belief that this will efficiently contribute to economic growth of the European Union of 27
members. The SEPA will mean cross-border bank payment systems, loans, deposits and others
retail bank services working as a sole and unique market, instead of 27 different financial
systems and markets.
The retail banking sector in Europe has different levels of development among each
member of the European Union (EU). The uneven and variable degree of European financial
integration is more pronounced in the twelve Central and recent financial crisis is affecting the
development of financial integration in Europe.
Deregulated financial markets advocate market-driven management practices as a means
of satisfying banking customers, which in marketing terminology implies that commercial banks
must have a market orientation.
720
This paper is focused in four countries: France and Spain that belong to the first fifteen
members of the European Union, and also Hungary and Poland that joined the EU in 2004.
LITERATURE REVIEW OF MARKET ORIENTATION
There are two main contributions in market orientation concept and construct: Narver and
Slater (1990), and Kohli, Jaworski and Kumar (1993) who create the MKTOR and MARKOR
scale respectively.
Narver and Slater (1990) define market orientation as the organizational culture that most
effectively and efficiently creates the necessary behaviors for the creation of superior value for
buyers and thus continuous superior performance for the business. Furthermore, they inferred
from literature (Aaker, 1988; Anderson, 1982; Kotler, 1972; Levitt, 1960; Ohmae, 1982; Peters
& Waterman, 1982; Porter, 1985) that market orientation consists of three behavioral
components (i.e. customer orientation, competitor orientation, and interfunctional coordination).
Kohli, et al. (1993), concluded that a market-oriented organization is one in which the
three pillars of the marketing concept (customer focus, coordinated marketing, and profitability)
are operationally manifest. Their definition suggests that the measurement of these concepts is
the degree to which an organization generates intelligence, disseminates it, and takes actions
based on it. Kohli, et al. (1993) concluded that the market orientation entails that one or more
departments engaging in activities geared toward developing and understanding of customers´
current and future needs, the factors affecting them, the sharing of this understanding across
departments, and engaging all departments in activities designed to meet select customer needs.
In other words, market orientation is defined as the organization-wide generation of market
intelligence, pertaining to current and future needs of customers, dissemination of intelligence
within the organization, and responsiveness to it (Jaworski & Kohli, 1993; Kohli & Jaworski,
1990; Kohli, et al., 1993). This view emphasizes the market, interfunctional coordination with
respect to market intelligence, and intelligence processing.
The authors believe that there are individual, intergroup and organization wide factors
that enhance or impede the implementation of the business philosophy represented by the
marketing concept. These three antecedents were labeled senior management factors,
interdepartmental dynamics, and organizational systems.
Although, MKTOR and MARKOR scales are the most frequently used scales in the
literature, both have limitations.
Narver and Slater (1990) describe the market orientation concept as encompassing three
components: customer orientation, competitor orientation and inter-functional coordination.
Although, these three components are present in MKTOR, it appears clearly that customers'
orientation is almost twice as important as competitor orientation or inter-functional
coordination. The over-representation of the customer orientation has been criticized by Kohli,
Jaworski and Kumar (1993).
MKTOR scale has also been criticized because it does not take into account the cultural
dimension of market orientation, that was included in the definition formulated by Narver and
Slater (1990) but not in Slater and Narver (1995). This shows the disjunction between the
concept definition and the concept operationalisation However, MARKOR presents a richer
description of market orientation: the organizational articulation of departments and the whole
business unit is emphasized, denoting the idea that market orientation is a trans-organizational
phenomenon and not merely a functional one (Gauzente, 1999).
721
The MARKOR scale, has been criticized because although the authors argued that their
conceptualization of market orientation is an integrated view, with “an expanded focus on market
rather than customer intelligence”, the 20-item scale includes only one item measuring market as
opposed to customer intelligence. Moreover, the reduction of the scale items is derived from
analysis of the single informant sample, and subsequently applied to data from the multi-
informant sample, resulting in a collapsing of the component factors of intelligence
dissemination and responsiveness into a single factor (Farrell & Oczkowski, 1997).
Gauzente (1999) states that MARKOR is largely consistent with its definition, but the
fact that its statistical validity is questionable, which is acknowledged by the authors themselves,
should invite researchers to improve the existing instrument or to develop a new instrument, that
is both reliable and tightly connected with its conceptual foundations. In contrast, MKTOR is
partly consistent with its definition. The three components (intelligence generation, intelligence
dissemination, and market responsiveness) are fully operationalized, with a predominance of the
customer orientation. However, the cultural part of the definition of market orientation is ignored
in the developed items.
The problem of the choice of the scale is especially important in view of the alternative
measures of the market orientation. Vazquez, Álvarez, and Santos (2002) argued that although
the market orientation scales of Kohli and Jaworski (1990) and Narver and Slater (1990) have
witnessed the widest diffusion and usage, the two scales cannot be considered to be absolutely
definitive with respect to research efforts on market orientation because the relevant literature is
still generating new market orientation scales (Osuagwu, 2006).
Finally, it will be appropriate to describe the scale of market orientation used in this
research, and the advantages and reasons to apply the Mazaira, Dopico and González’s scale
(2005). Mazaira, et al. (2005) draw a conceptual proposal of the strategic capabilities of
marketing orientation and the design of the measure instruments degree, following the cultural
perspective of Narver and Slater (1990). The main characteristic of this study is the robustness of
the scale with items that have a strong viability and discriminant validity, and almost all the
items are significant. Also, this scale is the deepest scale of Market Orientation, and both
reasons: robustness and complete, support the election of this scale for our model. Below, we can
see the description of the scale.
Customer Orientation
• OC1. In our company the objectives area address to achieve the client satisfaction.
• OC2. Our company continually set out how to increase the valuable offer to the clients.
• OC3. Both the supply of product and services, and its modifications derive from the
consumer desires.
• OC4. We understand the “quality” in terms of satisfaction to our clients.
• OC5. The matters related with the clients are the management’s priority.
• OC6. In our company we believe that it is very important to build durable relationships
with our clients.
• OC7. All departments act thinking how their decisions affect and are perceived by the
clients.
• OC8. We looking for consolidate our competitive advantages from our capacity to satisfy
the clients´ needs.
• OC9. We understand the obtaining and processing of information about clients (degree of
satisfaction, needs,..) as a systematic and continuous procedure.
722
• OC10. Each department of the enterprise is clear about how to contribute to the process
of generate value to the client.
Competitors Orientation
• OConc1. The matters related with the competitors are management’s priority.
• OConc2. Our objectives are aimed at overcoming the competitors.
• OConc3. We have as a rule to maintain a very strong competitive relationship with our
competitors.
• OConc4. Our structure is built to deal swiftly with the competitors´ actions.
• OConc5. The situation and possible answers of our competitors are basic aspects at the
time of design our strategies.
• OConc6. We use the concept of quality in comparative terms with our competitors.
• OConc7. The obtaining and processing of information about competitors is understood as
a systematic and continuous procedure.
• OConc8. All departments of the enterprise focus their work and objectives towards the
improvement of the competitors´ offer.
Interfunctional Coordination
• OIF1. In our company, as a rule, the data about the market (consumers,
competitor)…flows among all levels of the business unit.
• OIF2. There is a big worry to coordinate and integrate the activities and performances,
deal to provide value to consumer, fulfilled by different departments.
• OIF3. Every department of the company is involved in the market analysis and the design
of the strategic plans of the enterprise.
• OIF4. Every manager of any different department, understand how the whole enterprise
contribute to generate value to the clients and in what there is a difference between
the value we offer and the offering of competitors.
• OIF5. Every department of the company deals swiftly with how the other departments
contribute to the process of generating value to the clients.
• OIF6. Resources (human resources or other type of resources.) are shared among
different departments, as a basic element to achieve the objectives of the enterprises.
HYPOTHESES AND METHODOLOGY
The following hypotheses were formulated: (H1.A) Market orientation is a

unidimensional concept formed by three components: customer orientation, competitor
orientation and interfunctional coordination. (H1.1) Customer orientation has a direct and
positive influence on market orientation. (H1.2) Competitor orientation has a direct and positive
influence on market orientation. (H1.3) Interfunctional coordination has a direct and positive
influence on market orientation. (H2) Business performance can be grouped together in two
interrelate dimensions: growth/market share and business performance. (H3) Market orientation
has direct and indirect effects on business performance. (H3.1) Market orientation has a direct
and positive influence on business performance. (H3.2) Market orientation has a direct and
positive influence on growth/market share. (H3.3) Growth/market share has a direct and positive
influence on business performance.
Upon completion of a formal critique of current and relevant literature, an empirical
analysis of bank market orientation will be implemented using a questionnaire-based survey that
will be administered to marketing managers asking about the marketing orientation dimensions.
723
Business performance and Growth/Market Share is obtained from the financial records of the
Business performance and Growth/Market Share is obtained from the financial records of the
banks,
banks,which
whichform
formthethesample.
sample.
Selection
Selection ofthe
of theparticipating
participating companies
companies waswas carried
carried outout using
usingthetheconvenience
conveniencesampling
sampling
method.
method.ForForthe
thecollection
collectionof ofmarket
market orientation data, aa telephone
orientation data, telephone survey
surveysupported
supportedbybyfax,
fax,email
email
and
andtelephone
telephonewaswasdesigned
designedandand applied
applied toto the
the banks in four
banks in four different
differentcountries,
countries,obtaining
obtaininga atotal
total
ofof218 completed surveys, with the participation of banks of all sizes, located in France,
218 completed surveys, with the participation of banks of all sizes, located in France, Poland, Poland,
Hungary
Hungaryand andSpain.
Spain.
The
Therelevant
relevant population
population for
for the
the study
study included
included allall retail
retail banking
banking activity
activityduring
during2006
2006
through
through2008
2008forforHungary,
Hungary, Poland,
Poland, France,
France, and Spain (population
and Spain (population == 2,124
2,124entities).
entities).AArandom
random
sample
sampleofofbanking
bankinginstitutions
institutions were
were first
first contacted by phone.
contacted by phone. Surveys
Surveys were
werecollected
collectedbybyemail,
email,
fax,
fax,mail
mailand
andtelephone
telephone (N (N == 218).
218). The
The sampling error for for finite
finite layered
layeredsamples
samplesatat95%
95%( (p p<<
.05)
.05)was
was6.3%
6.3%(99%(99% confidence
confidence level:
level: 6.9%). Table 1 provides
provides information
informationabout
aboutthe
thedates
datesofof
data
datacollection,
collection,country
countryof oflocation,
location, and
and number of surveys
surveys perper country.
country.
TABLE
TABLEI:I:Sampling
SamplingCalendar
Calendar and Number of
of Surveys
Surveys Obtained
Obtainedby
byCountry
Country
Country
Country Dates for
Dates for data
data collection
collection Number
Numberofofsurveys
surveys Percent
Percent
Hungary
Hungary 04/03/2006 to
04/03/2006 to 07/10/2006
07/10/2006 41
41 18.8%
18.8%
Poland
Poland 04/10/2006 to
04/10/2006 to 07/17/2006
07/17/2006 47
47 21.6%
21.6%
France
France 06/05/2006 to
06/05/2006 to 09/13/2006
09/13/2006 67
67 30.7%
30.7%
Spain
Spain 10/02/2006 to
10/02/2006 to 12/18/2006
12/18/2006 63
63 28.9%
28.9%
Thecontrast
The contrastof ofthe
thehypotheses
hypotheses suggested,
suggested, direct
direct and
and indirect
indirectrelationships
relationshipswaswascarried
carriedout
out
throughthe
through theStructural
StructuralEquation
Equation Model
Model (SEM),
(SEM), considering
considering thethe statistical
statisticalasaswell
wellasasthe
thepractical
practical
significanceininthe
significance thevarious
variousanalyses.
analyses. Primary
Primary data
data that
that is
is derived
derived from
fromthethesurvey
surveywill
willbebeentered,
entered,
alongwith
along withthe
thesecondary
secondarydata,
data, into
into SPSS17
SPSS17 and and Amos17,
Amos17, and and will
will be
beanalyzed
analyzedusing
usingaarange
rangeofof
descriptiveand
descriptive andstatistical
statisticaltechniques
techniques (factor
(factor analysis
analysis and
and SEM,
SEM, among
amongothers).
others).
Confirmatory factor analyses for the three scales (market
Confirmatory factor analyses for the three scales (market orientation,
orientation, business
business
performanceand
performance andgrowth/market
growth/market share),
share), and
and the
the reliability
reliability and
and validity
validitytest
testhave
havebeen
beendone
donewith
with
very satisfactory results. This allows us to make the structural equation model with the maximum
very satisfactory results. This allows us to make the structural equation model with the maximum
likelihood method.
likelihood method.
RESULTS
RESULTS
The fit index NFI and CFI that are close to ,9, and the fit index RMSEA under ,05 point
out anThe fit index
excellent fit NFI andmodel.
of the CFI thatThearehigh
closeregression
to ,9, andcoefficients
the fit indexS.E.
RMSEA under
obtained ,05 point
shows the
out an excellent
proportion fit of the
of variability in amodel.
data setThe
that high regression
is accounted coefficients
for by S.E.model,
the statistical obtained showsfor
especially the
proportion of variability in a data
the variable growth/market share. set that is accounted for by the statistical model, especially for
the variable growth/market share.
724
724
TABLE II: Regression coefficients of Structural Equation Model
Estimate S.E. C.R. p

Growth/Market Market Orientation 2.266 .742 3.053 .002
Business Performance Market Orientation .521 .377 1.382 .004
Business Performance Growth/Market -.007 .021 -.340 .734
OIF5 Market Orientation 1.000
OIF4 Market Orientation .915 .096 9.542 ***
OConc8 Market Orientation .779 .087 9.002 ***
OConc4 Market Orientation 1.063 .104 10.231 ***
OC10 Market Orientation .822 .090 9.088 ***
OC6 Market Orientation 1.003 .098 10.240 ***
OC5 Market Orientation 1.027 .100 10.266 ***
Cost to Income in 2008 Business Performance -9.166 1.216 -7.536 ***
ROAE in 2008 Business Performance 2.892 .382 7.568 ***
ROAA in 2008 Business Performance 1.000
Market Share in 2008 Growth/Market 1.000
Variation of Total Assets in Growth/Market -.514 .184 -2.796 .005
Total Assets in 2008 Growth/Market 22691.64 2867.785 7.912 ***
Deposits in 2008 Growth/Market 12223.65 1730.654 7.063 ***
This research shows the following as primary results/contributions: a) analysis of the

relationship between market orientation and business performance in commercial bank sector in
Poland, Hungary, France, and Spain; b) by structural equation model, constructs that are
significantly related to business performance are development and market share; the SEM
suggest that market orientation is directly and indirectly related to business performance; c) the
findings suggest the existence of positive and significant relationship between market orientation
and business performance; and market orientation and development/market share; e) the results
obtained can be generalized to the population studied.
725
FIGURE
FIGURE
I: Market
I: Market
Orientation’s
Orientation’s
Model
Model
NFI=.873,
NFI=.873,
CFI=.955,
CFI=.955,
RMSEA=.047
RMSEA=.047 S.E.=.377,
S.E.=.377,
p=.004
p=.004
MARKET
MARKETORIENTATION
ORIENTATION H 3.1
H 3.1 BUSINESS
BUSINESS
PERFORMANCE
PERFORMANCE
CUSTOMER
CUSTOMER
ORIENTATION
ORIENTATION
COMPETITOR
COMPETITOR
ORIENTATION
ORIENTATION
H 3.2
H 3.2
INTERFUNCTIONAL
INTERFUNCTIONAL S.E.=.742,
S.E.=.742,
p=.002
p=.002
COORDINATION
COORDINATION
GROWTH/
GROWTH/
MARKET
MARKET
SHARE
SHARE
Accepted
Accepted
Hypotheses:
Hypotheses:
H1,H1,
H1.1,
H1.1,
H1.2,
H1.2,
H1.3,
H1.3,
H2,H2,
H3.1,
H3.1,
Source:
Source:
own
own
elaboration.
elaboration.
CONCLUSIONS
CONCLUSIONSAND
ANDRECOMMENDATIONS
RECOMMENDATIONS
This
This
studystudyhashas
thethe
advantages
advantages of of
using
using
a long-term
a long-term approach
approach to study
to study
thethe
effect
effect
of of
market
market
orientation
orientationon onbusiness
businessperformance,
performance, gathering
gatheringobjective
objective data data
fromfrombanks
banks
accounting
accounting during
during
thethe
period
period2006-2008,
2006-2008, andand
doing
doing a survey
a survey to to
measure
measure thethemarket
market orientation
orientationin in
fourfour
countries
countriesthatthat
belong
belong to to
twotwo different
differentareas
areas of ofthetheEuropean
European Union:
Union: thethetransitional
transitionalmarket
market of ofthethe
NewNew
Members,
Members, Poland
Poland andand
Hungary,
Hungary, andandthethe
developed
developed market
marketof ofOldOld
Members,
Members, France
France andand
Spain.
Spain.
AsAsa contribution
a contribution of of
thisthisstudy,
study,
a new
a newdefinition
definition of of
market
market orientation
orientation
is provided.
is provided. Market
Market
orientation
orientationis considered
is considered thethe
organizational
organizational culture
culturethatthat
allows
allows gather
gather
information
information from
fromthethe
micro
micro
andand
macro
macro environment,
environment, disseminates
disseminates andand
analyses
analyses thethe
information
information through
throughthetheorganization,
organization, to to
elaborate
elaboratethethe
strategy
strategywhich
whichsatisfies
satisfiespresent
presentandandfuture
futureneeds
needs andand
desires
desires
of of
clients,
clients,
providing
providing
more
morevaluable
valuable offerings
offeringsthan
thancompetitors
competitors andand
giving
giving to to
thetheorganizations
organizations higher
higher performance
performance
results.
results.
TheTheextent
extentto to
which
which banks
banks in in
Europe
Europehavehaveadopted
adopted a market
a market orientation
orientationis fairly
is fairly
unclear
unclear
andand
hashas
never
never beenbeen
investigated
investigated by bya cross-country
a cross-country empirical
empirical study.
study.
When
When considering
considering anecdotal
anecdotal
evidence
evidence (e.g.
(e.g.Bhuian,
Bhuian, 1997;
1997; Han,Namwoon,
Han,Namwoon, && Srivastasa,
Srivastasa, 1998;
1998;Martín
Martín && Cossío,
Cossío, 2001;
2001;
Lüneburg
Lüneburg && Nielsen,
Nielsen,2003),
2003),it isit clear
is clear
to to
seesee
thatthat
some somebanks
bankshavehave
developed
developed market
marketorientated
orientated
management
managementpracticespracticesas asa ameans meansof ofsatisfying
satisfyingcustomers.
customers.However,
However,thetheevidence
evidencealso also
demonstrates
demonstrates a wide
a widevariation
variation in in thethe
practices
practicesthatthat
havehave
been beenadopted
adopted andand
thethe
extent
extentto to
which
which
such
such
practices
practices impact
impactcredit
credit
institutions
institutions performance.
performance.
726726
The findings of this study test each of the hypotheses and answer the research questions,
about what is the effect of market orientation on performance? Is there any influence between
market orientation and sales in banks? Is there any indirect effect between market orientation and
sales to performance?
Firstly, we found that the two new members of EU27 have significantly higher levels of
market orientation than the two old members of EU27.
Secondly, we found that generally, market orientation has a positive effect on
performance. However, it is higher in Hungary and Poland, than in France and Spain.
Thirdly, we found that the effect of market orientation in market share growth is positive
and significant for all markets, however if we divide the sample, it is not significant in France
and Spain.
Fourthly, it is demonstrated that market share growth does not have a significant effect on
performance. This result supports previous findings (Bernal, Mercado, & Blanco, 2006). The
evidence also demonstrates that the banks with higher performance are usually medium size in
terms of Total Assets.
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Aaker, D. Strategic Market Management, 2nd ed. New York: John Wiley & Sons, 1988.
Anderson, P. “Marketing, Strategic Planning and Theory of the Firm.” Journal of Marketing, 46,
1982, 15-26.
Bernal, P., Mercado, C., and Blanco, A. “Evaluación y Modelización de la Estructura Financiera
de Entidades Financieras para Medir su Rendimiento”. Decisiones Basadas en el
Conocimiento y en el Papel Social de la Empresa, 2006, 35-49.
Bhuian, S. “Exploring Market Orientation in Banks: An Empirical Examination in Saudi
Arabia.” The Journal of Services Marketing, 11, (5), 1997, 317–328.
Farrell, M., and Oczkowski, E. “An Analysis of the MKTOR and MARKOR Measures of
Market Orientation: An Australian Perspective.” Marketing Bulletin, 8, 1997, 30-40.
Gauzente, C. “Comparing Market Orientation Scales: A Content Analysis.” Marketing Bulletin,
10, 1999, 76-82.
Han, J., Namwoon, K., and Srivastasa, R. “Market Orientation and Organizational Performance:
Is Innovation a Missing Link?” Journal of Marketing, 62, (10), 1998, 30–45.
Jaworski, B., and Kohli, A. “Market Orientation: Antecedents and Consequences.” Journal of
Marketing, 57, (3), 1993, 53-70.
Kohli, A., Jaworski, B., and Kumar, A. “MARKOR: A Measure of Market Orientation.” Journal
of Marketing Research, 30, (11), 1993, 467–477.
Kohli, A., and Jaworski, B. “Market Orientation: The Construct, Research Propositions, and
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Kotler, P. “A Generic Concept of Marketing.” Journal of Marketing, 36, (2), 1972, 46-54.
Levitt, T. “Marketing Myopia.” Harvard Business Review, 38, (4), 1960, 45-56.
Lüneborg, J., and Nielsen, J. “Customer Focused Technology and Performance in Small and
Large Banks.” European Management Journal, 21, (2), 2003, 258–269.
Martín, E., and Cossío, J. “La Orientación al Mercado y el Rendimiento Empresarial: el Caso de
la Banca Comercial Española.” Cuadernos de Gestión, 1, (1), 2001, 33-64.
Mazaira, A., Dopico, A., González, E. “Incidencia de la Orientación al Mercado de las
Organizaciones Empresariales en el Desarrollo de las Capacidades Estratégicas de
727
Marketing.” Revista Europea de Dirección y Economía de la Empresa, 14, (3), 2005,
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Narver, J., and Slater, S. “The Effect of Market Orientation on Business Profitability.” Journal of
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Ohmae, K. The Mind of the Strategist. New York: McGraw-Hill, 1982.
Osuagwu, L. “Market Orientation in Nigerian Companies.” Marketing Intelligence Planning, 24,
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Porter, M. Competitive Strategy. New York: The Free Press, 1980.
Slater, S., and Narver, J. “Market Orientation and the Leaming Organization.” Journal of
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Vázquez, R., Álvarez, L., and Santos, L. “Market Orientation and Social Services in Private
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728
CHAPTER 32
TOURISM, TRAVEL AND HOSPITALITY
729
DOES RACIAL DISCRIMINATION INFLUENCE
LEISURE DESTINATION CHOICE?
Nathan K. Austin, Morgan State University

nathan.austin@morgan.edu
Michael Callow, Morgan State University

michael.callow@morgan.edu
Binta.Abubakar, Morgan State University

binta.abubakar@morgan.edu
ABSTRACT
Utilizing a questionnaire to access respondent views on the prevalence of racial

discrimination in American society, the study examines the link between race and leisure
destination choice. A series of statistical analyses, conducted on the relationships between
perceived racial discrimination, societal discrimination, and deliberate racial discrimination finds
that perceived racial discrimination may impact decisions individuals make in relation to their
leisure activities and destination choices.
INTRODUCTION
Access to leisure is usually organized around institutions, many of which have been
shown to exhibit discriminatory tendencies towards marginalized groups (Crockett, Grier, &
Williams, 2003). Furthermore, there would seem to be a relationship between the
marginalization of groups within the society and the observed differences in leisure activities
choices (Wolch & Zhang, 2004). Members of the marginalized groups, often having relatively
similar skin color, facial structure features and shared ancestry, may be identified as a distinct
racial group. It has also been suggested that one’s race (Shaffer & O’Hara, 1995) impacts leisure
destination choice (Austin, 2002; Phillipp, 1999). Persons intending to engage in leisure pursuits,
may, in reaction to racial discrimination perceived to affect their own race, make choices that
affirm their ethnic affiliation (Yinger, 1981). Discrimination constitutes a major burden on those
it negatively affects (Noh, Beiser, Kaspar, Hou, & Rummens, 1999; Feagin, 1991) and even
where its existence is subtle, discrimination can significantly impact decision making (Lopez &
Pantoja, 2004). As a result therefore, if leisure destinations are to attract the increasingly racially
diverse leisure tourist market, some having suffered significant racial discrimination in the past,
and effectively manage interactions between them at the destination, they need to understand
how discrimination as a major emotional stressor (Noh, et al., 1999), influences eventual leisure
destination decision choices and consequent satisfaction with the leisure experience. While there
has been some research on the motivations and challenges that impact the leisure travel
preferences of minorities e.g. Teye and Leclerc (2002), a specific focus on the impacts of racial
discrimination, is unexplored. This may reflect a reluctance to examine the possibility that
sections of the American society may not be freely pursuing their consumption goals simply
because of the color of their skin.
730
Specifically, the paper seeks to examine how perceived racial discrimination influences
leisure decision choices and behaviors associated with it, beginning with a brief review of social
identity theory (Hogg, Terry, & White, 1995) and social inequality (Cohen, Kluegel, & Land,
1981), explaining the unequal access to resources and opportunities based on factors such as
gender, age and race. Thereafter, the research hypotheses are established, followed by the
method section, data analysis and a discussion of the results. Finally, we present the conclusions
and implications for the management of leisure destinations.
SOCIAL IDENTITY AND RACIAL DISCRIMINATION
Social identity refers to one’s understanding that one belongs to a specific and desirable
social group. Members of the social group perceive themselves as belonging to a group (i.e.
categorization), sharing in its distinct culture, which they favor over that of others (i.e. self-
enhancement). The nature of the social group characterizes member thoughts, feelings and
behavior (Stets & Burke, 2000). Thus, members of the in-group are perceived to be more similar,
providing a distinction between those who belong to the group and those outside the group
(Hogg, et al., 1995). Emphasis on the significance of these perceived group differences is a
critical component of the basis of discrimination between groups.
Racial discrimination is the intentional race-based unfair or injurious distinctions with
favorable outcomes to members of the in-group and negative outcomes to out-groups (Jackson,
Brown, & Kirby, 1998). It thrives where an identifiable group possesses a distinct common
culture, language, religion, or national origin that is distinct from others, recognized through self-
identification by a group of people (Rossiter & Chan, 1998) and a common racial make-up.
Underlying these group distinctions may be inter-group competition for scarce resources (Bobo
& Hutchings, 1996), desire to conform to societal norms or a conscious effort to cause harm
against others (Yinger, 1998). Consistent with social identity theory, therefore, racial
discrimination has a marginalizing outcome, which impacts subsequent purchasing behavior.
Thus, an individual who has experienced racial discrimination, whether current or historical
(Gobster, 2002), in some other context, may make leisure consumption decisions that minimize
the potential for further discrimination (Stodolska & Jackson, 1998).
RESEARCH HYPOTHESES
Cohen, et al. (1981) suggest that the level of unequal racially motivated access to
common resources, especially judicial impartiality, determines the individual’s assessment of the
existence of discrimination in the community i.e. societal discrimination (SD), which in turn
determines his/her assessment of the existence of racial discrimination. In practice, racial
discrimination may be subtle (Lopez & Panjota, 2004) and difficult to identify as being
intentional or unintentional. Thus, the extent to which racially discriminatory behavior is
believed to be intentional determines the individual’s assessment of the existence of deliberate
racial discrimination (i.e. DRD). The authors therefore propose that the individual’s general
sense of the existence of discrimination within the society and actual direct or indirect
experiences of racial discrimination forms the basis of his/her overall perception of racial
discrimination his/her race suffers in the society (i.e. PRD). Thus,
H1: Belief in the existence of discrimination in society influences the overall
perception of the extent of racial discrimination against one’s own race.
731
H2: The belief that racially discriminatory behavior is a deliberate act
influences the overall perception of the extent of racial discrimination
against one’s own race.
It has been suggested that even subtle instances of discrimination significantly impacts
decision making (Austin, 2002; Yinger, 1981). It is to be expected therefore that those with
higher PRD will be affected and subsequently respond differently from those with lower PRD.
Thus,
H3: Overall perception of the extent of racial discrimination against one’s own
race influences leisure destination choice decisions.
METHODS
The multiple-item scales developed for the study was first reviewed by two other
academics to ensure face validity and appropriateness of the measures, pretested among
undergraduate students as likely respondents, and revised before being distributed to the target
population. For example, the first two items measured respondent perception of discrimination in
American society (i.e. SD), asking whether people generally have fair and equal opportunities
and are treated fairly and equally before the law irrespective of their skin color, facial features or
ancestry. The next two items tested the perceived extent to which exhibited racially
discriminatory behavior is believed to be deliberate (i.e. DRD) while respondents’ overall
perception of the existence of racial discrimination (i.e. PRD) was also measured using two
items. Four other items were used to measure respondent leisure destination choice behavior (i.e.
LDC). Undergraduate students from the business school of a university on the east coast of the
United States, in two classes taught by the principal researcher were asked to volunteer in
recruiting general public respondents for the study. As the data collection took place over the
Thanksgiving Holiday when most students return home, the respondents were recruited from
several states on the east coast of the United States. All students were clearly informed that they
were not to complete any of the questionnaires themselves, that participation in the distribution
of the questionnaires was entirely voluntary and that no penalties or incentives would be applied.
To further reassure the students, details of those agreeing to assist with the recruitment of the
respondents, the number of questionnaires taken and returned by each particular student, was not
recorded.
A total of 570 questionnaires were given out, of which 191 were returned completed. The
response rate was therefore 33.5%. Of these responses, 121 were African-Americans, 54 were
Caucasians and 16 were Hispanics. On average, the sample was almost equally divided between
males and females across the three groups. The age category distribution among the racial groups
was similar, varying between 18 and under to 60 and over. Furthermore, generally reflective of
income and education at the national level by race, Caucasian respondents reported higher
income (i.e. 3.23 and 2.74 respectively) and education levels (i.e. 3.55 and 2.69 respectively),
than African American respondents.
AMOS 7 (Analysis of Moment Structures) was utilized to test the goodness-of-fit of the
proposed model (see Figure 1) and to run a confirmatory factor analysis to examine the
reliability and validity of the measures. Reliability through examination of individual item
reliabilities loadings of the measures on their respective constructs were .70. A shared variance
732
of .50 or greater between the measurement item and the construct, is indicative of convergent
validity. Overall, the statistics indicated that the psychometric properties of the model are
sufficiently strong to enable interpretation of structural estimates.
FIGURE I: The Model
Societal
Discrimination
(SD)
Perceived Racial Leisure

Discrimination Destination
(PRD) Choice (LDC)
Deliberate Racial
Discrimination
(DRD)
Consistent with the theorized relationships, SD and DRD significantly influenced PRD
which determined LDC. Table 1 shows a good fit between the theorized model and the data, with
the P-value = .824, chi-square = .388, goodness of fit index (GFI) = .975 and the root mean
squared error of approximation (RMSEA) = .000. Values of 0.08 or smaller indicate an
acceptable fit.
TABLE I: Goodness of Fit Index for Integrated Model and Study
Goodness of Fit Measure

Model fit Results
Chi-square .388
Degree of freedom 2
P-value .824
Cmin / df .194
Goodness of Fit Indix (GFI) .975
Adjusted Goodness of fit (AGFI) 1.036
RMSEA .000
NFI .992
TLI 1.117
CFI 1.000
Pclose .885
AIC(Proposed model) 24.388
AIC (Saturated model) 28.000
Hoelter 4507
733
RESULTS
A series of one way ANOVAs were run to make comparisons between African American
and Caucasian respondents and between men and women. Overall, there was no statistical
difference across race and gender in terms of how society treats people of different races from a
social, economic, and political standpoint F(3,162) = 1.485, p = 0.221). However, African
American respondents reported that different ethnic racial groups are not treated the same before
the law (F (3,162) = 15.256, p < 0.001). They also reported higher levels of deliberate racial
discrimination within American society when compared to Caucasians (F(1,156) = 38.75, p
<0.001). Again no gender difference was observed here (F (1,156) = 0.879, p = 0.35). This
finding suggests that minority groups perceive greater levels of racial discrimination in American
society than do Caucasians. Caucasian respondents tended to agree more than African American
respondents with the statement that they would choose a leisure destination irrespective of the
likelihood of suffering racial discrimination from other racial groups (F(1,157) = 5.097, p =
0.025). There were no statistical differences across gender F(1,157) = 0.672, p = 0.413). Perhaps
in a concerted effort to root out racial discrimination, African American respondents were also
more likely to confront the offending behavior in a leisure setting when compared to Caucasian
respondents (F(1,154) = 7.482, p = 0.007). There was marginal statistical support to suggest that
Whites are more likely to ignore racially discriminatory behavior (F(1,154) = 3.038, p = 0.083).
However, female respondents were more inclined to ignore the behavior than male respondents
F(1,154) = 4.567, p = 0.034). The gender-race interaction for this analysis was marginally
significant F(1,154) = 2.942, p = 0.088), indicating that Caucasian female respondents are more
likely than White male respondents to ignore such behavior, whereas there is less of a difference
between African American respondents across gender. As is to be expected, Caucasians being
the dominant group and least likely to suffer racial discrimination, tended to agree more than
African American respondents, with the statement that they would choose a leisure destination
irrespective of the likelihood of suffering racial discrimination from other racial groups (F(1,157)
= 5.097, p = 0.025. Also there were no differences across gender F(1,157) = 0.672, p = 0.413).
DISCUSSION
The results suggest that while both Caucasian and African-American respondents
generally agree that all people have a somewhat fair and equal social, economic and political
opportunities within American society. However, consistent with previous findings that, African-
Americans do not have faith in the legal system (Dovido, Gaertner, Kawakami, & Hudson,
2002), the latter group of respondents did not agree that all people are treated with fairness and
equality before the law. They believed that one’s skin color, facial features and/or ancestry
influenced fairness and equality in the legal arena. Thus, while all people are equal in principle
within the society, dispensation of the law of the land which governs access to social, economic
and political opportunities is not blind to one’s race. It is to be expected, therefore, that the
purchase decisions of minorities including leisure services, will be influenced by this
preconceived notion. Specifically, the perception that a racial group suffers discrimination may
limit its leisure choices due to potential discriminatory behavior towards them at the leisure
destination and in the consumption of leisure activities. Though there is intra-cultural diversity
(Caldwell, 2005) within cultural groups and thus the probability of different response behaviors,
these findings have serious implications for destination managers in particular, since as was
734
mentioned earlier, African Americans have become an important economic group within the
United States i.e. about 12.5 % of the population. Apprehension about certain leisure destinations
and/or activities because of potential racial discrimination ought to be addressed in a
comprehensive manner to help ensure visitor/guest satisfaction. For example, this can be
achieved through advertising campaigns and promotional brochures on racial diversity and
employee training that incorporates and embraces diversity.
Prior research on coping behavior of African Americans in confronting racial
discrimination has produced similar results as this study. For example, Feagin (1991) found that
African Americans, when confronted with individual racist encounters tended to respond with
verbal counterattacks or resigned themselves to an acceptance of the discriminatory behavior
exhibited towards them. The latter group tended to believe that the effort required to respond to
racism is costly in terms time and energy and that acquiescence or withdrawal are viable options.
This study further clarified the previous finding above arguing that not only are African-
Americans were more likely than Caucasians to confront discriminatory behavior, male African-
Americans were even more likely than their female counterparts to confront discriminatory
behavior towards them in a leisure setting. The implication here is that customer service and
customer-customer interactions involving males belonging to minority racial groups have a
higher tendency to be confrontational if discriminatory behavior is perceived to have occurred.
There is the need for destination managers to recognize the challenges to effective
communication as a result of the preconceived notion of discriminatory interaction outcomes and
provide appropriate training to raise employee awareness of the problem, particularly in the
context of interactions with minority males. In doing so, it is necessary to emphasize the problem
mitigation objective of the awareness training rather than its potential as a means for categorizing
minority males as potentially ‘difficult’ visitors. It is imperative that managers of leisure
attractions understand how different groups react to racism to enable them develop effective
systems to manage such reactions.
CONCLUSIONS
This study makes a contribution to the empirical examination of the racial discrimination
paradigm in hospitality management (Bitner, 1992). Considering that the psychometric
properties of all of the new measures developed for this study were acceptable, this study can be
said to have contributed to academic knowledge by developing a measuring scale for racial
discrimination in leisure destination choice, capturing both the critical dimensions of tourist
experience and service outcomes. It has further paved the way for the empirical investigation of
the relative impact of racial discrimination on tourist experience and leisure choice. Furthermore,
the results have ramifications for managers and practitioners within the leisure, services and
retail businesses in general. In explaining the relationship between visitor perceived notions of
racial discrimination against one’s own race and leisure destination and activities choice, it
identifies potential behavioral responses to discriminatory interactions within the leisure setting,
thus enhancing the potential for customer satisfaction Thus, leisure destination managers need to
understand the often subtle but critical on-site experiences of visitors and to manage them
accordingly. Finally, as negative word-of-mouth serves as the medium for denigrating
undesirable products and services, spreading rumor including the assessment of the extent of
racial discrimination experienced, the study further demonstrates the critical impact of visitor
word-of-mouth.
735
It must be noted, however, that the study focused on only one minority racial group and
thus may not be generalized across all minority racial groups. Also, though the response rate of
the study is quite consistent with other similar leisure destination studies (e.g. Philipp, 1999;
Wolch & Zhang, 2004), the relatively smaller study sample size points to its exploratory nature.
Moreover, there is the potential that Caucasians, generally being the more experienced travelers
to leisure destination sites, may have had more positive experiences to relate to than the other
groups. Future studies could expand the study sample size and include more than one minority
racial group.
REFERENCES
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Sites.” International Journal of Tourism Research, 4, 2002, 447-457.
Bitner, M.J. “Servicescape: The Impact of Physical Surroundings on Customer and Employees.”
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Bobo, L., and Hutchings, V.L. “Perceptions of Racial Group Competition: Extending Blumer’s
Theory of Group Position to a Multiracial Social Context.” American Sociological
Review, 61, 1996, 951-972.
Caldwell, L.L. “Self-Construal in Context: A Response to Walker, Deng, and Dieser.” Journal of
Leisure Research, 37, (1), 2005, 106-116.
Cohen, L.E., Kluegel, J.R., and Land, K.C. “Social Inequality and Predatory Criminal
Victimization: An Exposition and Test of Formal Theory.” American Sociological
Review, 46, (5), 1981, 505-524.
Crockett, D., Grier, S.A., and Williams, J.A. “Coping with Marketplace Discrimination: An
Exploration of the Experiences of Black Men.” Academy of Marketing Science Review,
4, 2003, 257-267.
Dovido, J.E., Gaertner, S.L., Kawakami, K., and Hudson, G. “Why Can’t We Just Get Along?
Interpersonal Biases and Interracial Distrust.” Cultural Diversity and Ethnic Minority
Psychology, 8, 2002, 88-102.
Feagin, J.R. “The Continuing Significance of Race: Anti-black Discrimination in Public Places.”
American Sociological Review, 56, 1991, 101-116.
Gobster, P.H. “Managing Urban Parks for a Racially and Ethnically Diverse Clientele.” Leisure
Sciences, 24, 2002, 143-159.
Hogg, M.A., Terry, D.J., and White, K.M. “Tale of Two Theories: A Critical Comparison of
Identity Theory with Social Identity Theory.” Social Psychology, 58, (4), 1995, 255-271.
Jackson, J.S., Brown, K.T., and Kirby, D.C. “International Perspectives on Prejudice and
Racism.” In J.L. Eberhardt, and S.T. Fiske, eds., Confronting Racism: The Problem and
the Response. Thousand Oaks, CA: Sage, 1998, 101-135.
Lopez, L., and Pantoja, A.D. “Beyond Black and White: General Support for Race-Conscious
Policies among African Americans, Latinos, Asian Americans, and Whites.” Political
Research Quarterly, 57, (4), 2004, 633-642.
Noh, S., Beiser, M., Kaspar, V., Hou, F., and Rummens, J. “Perceived Racial Discrimination,
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736
Philipp, S.F. “Are We Welcome? African American Racial Acceptance in Leisure Activities and
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Perceptions of Legal Services.” Services Industries Journal, 15, (2), 1995, 162-185.
Stets, J.E., and Burke, P.J. “Identity Theory and Social Identity Theory.” Social Psychology
Quarterly, 63, 3, 2000, 244-259.
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Ethnic Minority Group.” Journal of Leisure Research, 30, 1998, 23-46.
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737
THE EFFECT OF DISCOUNTING ON SERVICE QUALITY AND RETURN
PATRONAGE IN THE RESTAURANT INDUSTRY
Dean A. Koutroumanis, University of Tampa

dkoutroumanis@ut.edu
ABSTRACT
Current economic conditions have changed consumer behavioral patterns. Most

restaurants in the United States have been negatively impacted during the current economic
recession, as patrons have cut back in all areas of spending. To survive these trying times,
restaurant operators have implemented discounting strategies to drive traffic and fill empty tables
in their establishments. Practitioners and academics have warned about the negative long-term
implications that discounting can have on restaurant operations. The manuscript examined the
existing literature regarding the impact that discounting has on food service operations. Linkages
to service quality and behavioral intentions were also examined and conclusions were drawn
based on the literature. The findings of the literature review indicate a need for more empirical
research. A suggested research model was developed and recommended.
INTRODUCTION
Current economic conditions in the United States have had a negative financial impact on
the restaurant industry (Brandau, 2009). The approach of conducting business as usual is a
concept of the past in many industries. Unfortunately, the economy has had a dramatically
negative effect on the restaurant industry, causing a record number of closures nationwide.
According to NPD (global research firm), over 4000 restaurants have closed for business in a one
year period, April 2008 to March 2009. That is a 1% increase in failure year to year for all
restaurants, with independents seeing a 2% increase in failure rate over the same period (Lokyer,
2009). Consumer behavior patterns have been changed for multiple reasons, including high
levels of unemployment, a deep recession, and an overall fear that has been instilled into the
minds of the consumers through the media. Restaurateurs are attempting to regain lost customers
in any way possible to sustain their businesses. One strategy that has seemed to be well received
as of late is discounting. From national chains to small independent “mom and pop” restaurants,
discount offers seem to be the current norm for the industry. Couponing has had a tremendous
resurgence in popularity due to the economic constraints that have been put on consumers. The
couponing industry had seen a big downturn, because of the negative connotations that were
associated with their use. The tough economic times have now brought couponing back to the
forefront. Overall use of coupons rose 23% in the first six months of 2009 (Skidmore, 2009). The
article examined the potential effects that this discounting strategy could have on restaurants
from a long term perspective. It additionally identified potential pitfalls in customer service and
service quality based on cited studies.
Hospitality researchers and practitioners have been focusing efforts on improving levels
of customer satisfaction and service quality for decades. The increase in execution of service
quality has proven to have a powerful effect on the long-term success of restaurants including the
building of repeat patronage (Koutroumanis, 2005). By gaining an understanding of service
738
quality, organizations experience an increase in brand loyalty, market share and profitability (Oh
& Parks, 1997; Meng & Elliot, 2009).
The manuscript examined the literature associated with service quality and the effect that
discounting potentially has on customer intention to return. There is limited literature that exists
with reference to discounting in the restaurant industry (Shields & Shelleman, 2008; Knutson,
Elsworth, & Beck, 2006; Quain, 2003). Based on existing literature, parallels were drawn with
regard to the long term effect that discounting could potentially have on service quality, and
customer intention to return.
DISCOUNTING IN RESTAURANTS
While the U.S. has seen the worst economic times since the “Great Depression”,
consumer spending has dropped off significantly. With the national unemployment rate
exceeding 9%, consumer behavior has seen a significant change. People have started to
scrutinize their spending patterns and have reduced spending in many areas, particularly non-
essential goods and services (Leahy, 2009). There is no question that Americans are conscious of
where their money is being spent. As disposable income dollars have virtually disappeared diners
have found it easy to cut dining out from their routines to save money. Because of this the
restaurant industry (from upscale dining to fast casual) has seen close to double digit decreases in
same store sales to last year (Liddle, 2009). The lower sales have caused a ripple effect industry
wide that has impacted operators nationwide.
In attempts for operators to survive these turbulent economic times, many have
implemented discounting strategies. Discounting has been a marketing strategy used in the
restaurant industry for decades. Restaurants that are located in highly seasonal regions of the
country often discount service offerings to generate traffic during the off peak times. The
strategies have worked well in those instances as they were primarily targeted as short term fixes
until the sales revenue picked up during the peak time of year. Many industry academics and
professionals have warned about the negative implications that discounting has on businesses,
especially in the hospitality industry (Knutsen, Elsworth, & Beck, 2006; Quain, 2003; Enz,
2003). Regardless, operators have implemented discounting strategies to pull traffic during this
economic downturn. National chains to independents are discounting their products to gain
traffic counts and fill tables that have been sitting idle. Successful chains such as Outback
Steakhouse hand out coupons to guests for $10 off on their next visit. Applebee’s and Subway
have aired commercials advertizing their discounted offerings as well. The two (dinners) for $20
and $5 foot-long submarine sandwiches have become the mainstay for those restaurants as diners
have now come to expect those types of offerings.
Empirical studies conducted with regard to discounting state various reasons why
restaurants use this marketing strategy. One of the ultimate goals is to drive new customers to the
establishment and hopefully “wow” them enough to get them to return without the use of a
discount (Knutsen, et al., 2006). Many restaurateurs believe that that the restaurant should
sacrifice margins, that are already slim, to gain new customers. The goal of building repeat
patronage has been at the forefront of many restaurant strategies for a long time. Approximately
70% of the business base in the restaurant industry comes from repeat customers (Sanson, 2004).
On a limited scale of use this discount strategy would seem appropriate to the point of getting
“new” customers to become part of the restaurants business base.
739
The issue of discounting during a recessionary economy then becomes a question of
business strategy or survival. Quain (2003) stated that many operators turn to discounting during
bad economic times. He cites the example of hospitality operators turning to discounting
following the “dot com” bust. He continued to state that this strategy has had a negative impact
on the hotels and restaurants that implemented these strategies. Empirical research has shown
that discounting has a negative impact on profitability in hotels (Enz, 2003; Quain, 2003).
Therefore discounting can additionally influence the sustainability of the business. With
discounting now becoming the driving strategy of many restaurants, one would have to question
the long term influence of discounting. Quain and colleagues discussed revenue enhancement
and warned against the use of discounts as a revenue generation strategy (Quain, Sansbury, &
LeBruto, 1998, 1999; Quain, Sansbury, & Abernathy, 1998; Quain, Sansbury, & Quinn, 1999).
Discounting can have a negative effect on service quality and ultimately cause customers to
defect from the restaurants. One reason for this is that to be profitable with discounting a
restaurant must drive volume, much like that of a low cost leader strategy. With an increase in
volume, service levels could deteriorate causing customer dissatisfaction and create defecting
behavior (Quain, 2003). Service staff can additionally play a role in the negative level of service
quality. Pre-conceived perceptions which servers have are that customers that are using a
discount medium are not going to tip them well. A study by O'Neill, Hubbard, Salazar, and Kent
(2000) stated that American servers feel that tipping is a major source of their income. They
believe that they have a great deal of control over how much money they make, by the quality of
service they provide and clientele that they build. The unfortunate point here is that servers may
feel that no matter how well they perform, when the discount medium is introduced by the
customer the servers will only be tipped on the discounted total of the check, instead of the pre-
discounted total of the check. The result could be that servers become discouraged and not
perform to normal expectations, creating a negative experience for the customer.
SERVICE QUALITY
Lehtinen and Lehtinen (1992) break service into three categories: (a) physical qualities
(visible components), (b) interactive service (actual performance of the service), and (c)
corporate quality (image). The intangible nature of the construct of service quality makes it
difficult to properly measure and analyze (Oh & Parks, 1997; Parasuraman, Zeithalm, & Berry,
1985; Seidman, 2001). The leading researchers in service quality and those primarily responsible
for creating the first instrument to measure this construct are Parasuraman, Zeithaml, and Berry
(1985, 1988, 1991). In 1985, Parasuraman, et al. identified 10 measurable dimensions of service
quality. Further research (Parasuraman et al., 1988) identified levels of overlap among some of
the dimensions identified earlier in 1985. They therefore merged the 10 dimensions into five: (a)
Tangibles: facilities, equipment, and appearance of personnel; (b) Reliability: ability to perform
the promised service; (c) Responsiveness: willingness to provide the service promptly; (d)
Assurance: knowledge and courtesy of employees and their ability to inspire trust and
confidence; (e) Empathy: caring, individualized attention the firm provides its customers
(Parasuraman, et al., 1988). The instrument developed to measure this construct was called
SERVQUAL. The SERVQUAL model analyzes the level of service quality by evaluating the
gaps between customers’ expectations and perceptions of service. The smaller the gaps, the
higher the level of service quality, (Kivela, Inbakaran, & Reece, 1999). SERVQUAL has been
validated and tested in a variety of industries including banks, credit card companies, repairs and
740
maintenance firms and long distance telephone companies (Parasuraman, et al. 1988, 1991).
Research in hospitality using this instrument has been conducted by Farouk and Ryan (1991),
Bojanic and Rosen (1994), Seidman (2001). Although altered by subsequent researchers, the
SERVQUAL instrument has maintained the fundamental five dimensions and has had high
levels reliability and validity throughout all tests (Seidman, 2001). SERVQUAL does have its
critics, the most noted are Cronin and Taylor (1992). In 1992 Cronin and Taylor challenged the
fundamental philosophy of the SERVQUAL instrument, questioning the “gap theory” of
perceptions minus expectations. They developed a model they called SERVPERF, which uses
organizational performance as the true test of measuring level of service quality (Cronin &
Taylor, 1992). Service quality is instrumental for success in the restaurant industry, but it goes
hand in hand with product quality (Bojanic & Rosen, 1994).
BEHAVIORAL INTENTIONS
Consumers who are dissatisfied with a service experience may take a variety of different
actions. They can voice their opinion to management, they can say nothing and just not return to
that organization, or they can continue patronizing the organization and not say anything
(Susskind, 2002). In an early study of customer retention, Rosenberg and Czepiel (1983) stated
that organizations spend a lot of time and money in finding new customers. However, once the
organization has the customers, it does not do enough to keep them. Bill Marriott of Marriott
Hotels has been quoted as saying that it costs the Marriott company an average of 10 marketing
dollars to attract a new customer, and just one dollar in “special efforts” to get them to return to
the hotel (Stevens, Knutson, & Patton, 1995).
The study of behavioral patterns and responses can be traced to Ajzen and Fishbein
(1980) who stated that behavior can be predicted from intentions that correspond to a certain
behavior (Baker & Crompton, 2000). Research demonstrated that a dissatisfied customer could
tell an average of 10-20 other people (Brown, 1997; Shaw-Ching Liu, Furrer, & Sudharshan,
2001; Tax, Brown & Chandrashekaren, 1996). Ultimately, it has been found that the economic
impact of customer retention is incredibly significant from a profitability position. The defining
study was conducted by Reicheld and Sasser (1990) who showed that a 5 % increase in customer
retention equated to a net present value increase of 25 to 125 % in profitability (Bowen & Chen,
2001; Reicheld & Sasser, 1990; Shaw-Ching Liu, et al., 2001). From a restaurateur’s perspective,
if the organization is to increase its guest return rate from 76 % to 81 %, profits would more than
likely double (Stevens, et al., 1995).
In 1996, Zeithaml, Berry, & Parasuraman showed that behavioral intentions are
intervening variables between service quality and financial gain or loss of an organization. The
study postulated that a positive level of service quality would create favorable behavioral
intentions. The behavior increases the probability that customers’ relationship to the organization
will be strengthened and return patronage will occur. Conversely, low levels of service quality
will create unfavorable behavioral intentions, which in turn will decrease relationships with
organizations and could cause patrons to not return to the business (Alexandris, Dimitriadis, &
Markata, 2002; Zeithaml, et al., 1996).
Zeithaml, et al. (1996) developed the Behavioral Intentions Battery, to help measure
customer’s intentions to defect or return. The final framework included the following five-
dimension model (Bloemer, deRuyter, & Wetzels, 1999). The dimensions were as follows: (1)
loyalty to company, (2) propensity to switch, (3) willingness to pay more, (4) external response
741
to a problem, and (5) internal response to a problem (Alexandris, et al., 2002; Bloemer, et al.,
1999; Zeithalm, et al., 1996). The Bloemer, et al. (1999) study found that there were different
dimensions that were important in predicting behavior including, repurchase intentions, word-of-
mouth communication, price sensitivity and complaining behavior (Shaw-Ching Liu, et al.,
2001). The relationships between service quality and behavioral intentions were also found to
differ across a variety of industries (Alexandris, et al., 2002; Athanassopoulos, Gounaris, &
Stathakopoulos, 2001; Shaw-Ching Liu, et al., 2001). The researchers found varied levels of
importance with regard to the intentions dimensions across industries. For example, in the
entertainment industry, behavioral intentions were highly weighted by responsiveness and
tangibles, whereas in the food industry, it was assurance and empathy (Alexandris, et al., 2002).
The Alexandris, et al. study found that the tangible factors of service quality did not affect the
intention factors. One reason posited for this effect is that in the hospitality industry today
tangible factors have become a prerequisite, and have become expected by customers
(Alexandris, et al., 2002).
A recent study in the fast food industry concluded that improving both service quality and
product quality will drive repeat purchases and ultimately build the restaurants customer base
(Qin & Prybutok, 2008). Therefore substantiating the impact service quality has on customers’
intentions to return as previous studies have repeatedly shown.
IMPLICATIONS AND CONCLUSIONS
Based on the previous literature, it could be construed that discounting could have a
negative effect on the long term sustainability of restaurants. Streams of research studies have
shown the correlation between service quality and behavioral intentions in multiple industries
including the restaurant industry. The question becomes, what impact does discounting have on
service quality and intentions to return? Additionally, what long term impact will discounting
have on the sustainability of the restaurants? Profitability is a critical factor that needs to be taken
into consideration. The restaurant industry is known for slim profit margins (Knutsen, et. al.,
2006). Discounting on a long term basis as a marketing strategy will negatively impact those
margins. Quain (2003) describes discounting strategies as “a disguise for unimaginative
management and marketing” (p.169). He continues to state, that the products that are generally
offered at a discounted rate are often disappointing to the customer, assumedly from a quality
standpoint (Quain, 2003).
Practitioners are also very wary of discounting for many of the same reasons found in the
academic literature. They question the opportunity cost of giving something away to get a
customer to visit the restaurant for the first time. Additionally, operators are skeptical if the
customer will actually return post discount experience, or just look for the next “great deal” at
another restaurant (Leahy, 2009). A key factor to examine within the discounting paradigm is the
long term impact of this discounting culture. Operators have implemented this strategy out of
immediate necessity and consumer demand, primarily as a quick fix. Restaurateurs also believe
that over use of the discounting strategy can have a negative impact on the brand of the business
(Leahy, 2009).
Academics and practitioners suggest differing strategies. Strategies of developing value
have shown to be more prudent avenues to grow revenue than simply giving things away (Quain,
2003; Leahy, 2009). Innovation in marketing strategy is going to be critical to getting new and
repeat customers into restaurants. Value menus and special promotions have become a highlight
742
in some restaurants. Guest loyalty programs have been an innovative strategy in this economy,
rewarding those customers that come in on a continual basis. For example, if a customer spends
$100 they will receive a complementary bottle of wine on their next visit. The power of this
strategy lends itself to the fact that the customer has spent dollars in the restaurant and has dined
on multiple occasions. This is not a customer that is simply looking for something for free. Quain
(2003) explains that this is the type of program (among others he suggests) that restaurateurs
must look to in building revenue. The goal should be to get the customer into the restaurant,
create a great dining experience (value creation) and get them to return.
There is little empirical evidence of the long-term impact of discounting in restaurants.
The cultural implications of discounting on consumers are also a point of concern for operators.
Enz (2003) shows negative implications of discounting for the hotel industry. It could be
construed that similar findings would be found in the restaurant industry. The literature suggests
both academics and savvy practitioners believe that discounting is not the answer to driving
business. A call for further empirical research of this paradigm would be recommended to
examine the intervening effect that discounting has on both service quality and behavioral
intentions. Figure 1 below depicts the model recommended for study.
FIGURE I: Discount Model Recommended for Research
Service Discount Service Impact on Behavioral

Encounter Medium Quality Intentions
With the economic recovery appearing to be a slow process, restaurateurs will need to
search for and develop innovative strategies to generate new and repeat business. These
strategies should be built for long-term sustainability of the business instead of a short term fix.
With practitioners positing that discounts, deals and free offerings will be around for a while the
question then becomes, what expectations will customers come to anticipate? If the culture of the
consumer changes what will the long term sustainability of many restaurants be? While food
cost, labor cost and operating costs continue to grow despite the poor economic conditions,
restaurants will need to develop strategies to build profitability instead of shrink margins.
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CHAPTER 33
STUDENT PAPERS
746
AMEGY BANK OF TEXAS: A PUBLIC RELATIONS PLAN
Dana Baker, The University of Texas at San Antonio

db_33@yahoo.com
Andrea Lopez, The University of Texas at San Antonio

andrealopez0509@yahoo.com
ABSTRACT
Amegy Bank is a newly established financial institution in San Antonio, Texas. This
paper proposes a public relations plan to promote public awareness of the Bank and its services
in the city. The plan is based on the use of the two-way symmetric model of public relations. The
data collection methods involve a review of client records and published materials, interviews
with members of the target publics, and content analysis. There subsists an opportunity to
capitalize on Amegy’s reputation as one of the fastest growing, emerging banks in the state and
create strong public awareness about the benefits of the bank’s products and services. An
effective public awareness campaign will gain strong local media attention, grow the local
customer base and enhance client credibility among target publics.
INTRODUCTION
Amegy Bank is a newly established financial institution in San Antonio, TX. There exists
an opportunity to promote public awareness throughout the city about Amegy Bank and its
products and services. Utilizing the media extensively, the campaign will also grow the customer
base of Amegy Bank in San Antonio.
Since its inception in 1990, Amegy Bank of Texas has been founded on the ideals of
providing a personal, quality banking experience committed to serving Texas entrepreneurs,
businesses and communities (Amegy, 2009). Originally begun in Houston, Amegy expanded its
business into Dallas in 2004 followed by San Antonio in 2007. With the acquisition of
Intercontinental Bank just two years ago, Amegy further established itself as a leading player in
the industry. Currently, Amegy is managing assets in excess of $12 billion with over 70 banking
centers in Houston, Dallas and San Antonio (Amegy, 2009). Amegy also belongs to a nationwide
group of banks, Zions Bancorporation, of which Amegy is the third largest community banking
company (Amegy, 2009). With headquarters in Houston, Amegy boasts the reputation of being
one of the fastest growing financial institutions in the state and is poised to continue its growth in
the coming years.
Currently, there exists some cultural and social beliefs that challenge Amegy Bank. Some
tend to make the assumption that a bank of a small size and scale will be less efficient and
competent in managing customers’ finances. From this assumption stems an information seeking
process which is highly passive and uninvolved. Amegy’s reputation is founded on the premise
of being “a bank built by Texans – for Texans” (Amegy, 2009). Amegy’s task, and the vision of
this campaign, is to market and capitalize on Amegy’s reputation of being a small Texas bank;
Amegy must project the image of a bank small enough to provide a genuine, personal banking
experience, yet large enough to prove competent and well-equipped as other leading banks in the
state and the nation.
There are a myriad of political factors that can affect the operations of Amegy Bank.
747
First, Amegy must anticipate and operate under the stability (or instability) of the government—
national, state and local. Second, the economic and trade policies of the government are another
major influence on the operation of the bank. Finally, the political and economic agendas of
governments and politicians greatly impact the financial decisions, functions and performances
of the bank.
Amegy Bank, like all other institutions, is subject to economic influences active in the
workforce. Glass ceilings and walls pose strict barriers to females who perform the same tasks as
their male counterparts, but consistently earn less. In addition to these economic factors,
competition in the industry is an ever-present force. Amegy Bank must manage stiff competition
from such international banking players as, Bank of America, JP Morgan Chase and Citibank,
among others (Texas Department of Banking, 2006). Currently, Amegy is managing assets in
excess of $12 billion with over 70 banking centers in Houston, Dallas and San Antonio (Amegy,
2009). Enhancing its image as a premier financial institution, Amegy belongs to a nationwide
group of banks, Zions Bancorporation, of which Amegy is the third largest community banking
company (Amegy, 2009).
RESEARCH
Amegy has continued to maintain its financial viability despite operating in some of the
harshest economic conditions in recent history. Although Zions reported a first quarter loss for
2009 of $.39 a share, the company continues to remain successful as it extended $3.8 billion of
credit to its clients this year (Zions Bancorporation, 2009). Despite some losses on its balance
sheet, Zions has proven to be a financial leader in the industry, as $1.9 billion of the $3.8 billion
of credit were new loans to business and individuals (Zions Bancorporation, 2009).
Amegy Bank provides a wide range of products and services tailored to meet the needs of
its diverse clientele. Banking services are offered in areas such as, Commercial Banking,
Treasury Management, International Banking, Community and Not-for-Profit, Capital Markets
and Retirement and Planning, Wealth Management, Private Banking and Trust, Personal
Banking and Mortgage (Amegy, 2009).
Leigh Akin, Vice President of Corporate Communications, oversees and coordinates the
public relations efforts of Amegy Bank in Houston, Dallas and San Antonio. The PR department,
located at Amegy Houston headquarters, is charged with developing programs and initiatives
which promote Amegy’s vision to have a more prominent presence in the state of Texas. One of
Amegy’s greatest PR strengths lays in its community relations efforts. Amegy Bank has
benefited many non-profit and community organizations in the city through donations and
community service. Amegy’s most notable community relations effort is its annual corporate
United Way campaign; this PR effort encourages associates from all Amegy banking centers
throughout the city to become involved in United Way charitable activities and events. Amegy
has also been the proud recipient of many accolades for excellence in community relations such
as, the Crystal Award for Texas Medium Business Partnership in a Large School District given
by The Texas Association of Partners in Education (Amegy, 2009). Unfortunately, Amegy also
faces internal PR weaknesses, as some associates in the San Antonio market assert. These PR
weaknesses include: (1) a lack of an effective internal communication network, one which
notifies employees of pertinent company information and news and (2) lack of internal
communication support, as provided through such tools as the company newsletter, which was
recently eliminated in light of financial constraints (Robin Crossland and Eddie Espino, personal
748
communications, 2009).
There exists an opportunity to capitalize on Amegy’s reputation as one of the fastest
growing, emerging banks in the state and create strong public awareness about the benefits of the
bank’s products and services. An effective public awareness campaign will gain strong local
media attention, grow the local customer base and enhance client credibility among target
publics.
Target Publics
Key internal publics include: Amegy CEO, Amegy San Antonio CEO, and San Antonio
banking center managers and associates.
Key external publics involve: San Antonio residents ages 18-35, San Antonio residents
without a current bank account, San Antonio community organizations, San Antonio small
businesses, mass media (the San Antonio Express-News, News 4 WOAI, KENS 5, KSAT 12,
96.1 FM, 94.1 FM and 98.5 FM), and specialized media (Texas Banking Magazine).
Our campaign will utilize non-quantitative research methods including analyzing: client
records, published materials, interviews with members of target publics and organizational
members, and Internet research. In addition to these methods, the campaign will also employ
quantitative research methods such as, sample surveys and content analysis.
OBJECTIVES
Informational
1. To increase awareness of San Antonio residents ages 18-35 about Amegy Bank products
and services by 40% during our 1 year campaign.
2. To increase awareness of San Antonio residents without a bank account about the
benefits of Amegy Bank products and services by 40% during our 1 year campaign.
3. To increase awareness of San Antonio community organizations about available banking
solutions by 40% during our 1 year campaign.
4. To increase awareness of San Antonio small businesses about commercial banking
benefits by 40% during our 1 year campaign.
5. To increase support among local radio and TV stations, newspapers and industry
publications of Amegy Bank by 40% during our 1 year campaign.
Attitudinal
1. To promote proactive attitudes toward utilizing Amegy Bank products and services
among 15% of San Antonio residents ages 18-35 and San Antonio residents without a
bank account during our one-year campaign.
2. To create favorable public opinion toward Amegy Bank products and services among
15% of San Antonio community organizations during our one-year campaign.
3. To promote favorable public attitudes toward Amegy Bank commercial banking benefits
among 15% of San Antonio small businesses during our 1 year campaign.
4. To increase support among 15% of local media representatives of Amegy Bank during
our one-year campaign.
Behavioral
1. To persuade 7% of San Antonio residents ages 18-35 and San Antonio residents without
749
a bank account to utilize Amegy Bank products and services during our one-year
campaign.
2. To stimulate new accounts among 7% of San Antonio community organizations during
our one-year campaign.
3. To stimulate new accounts among 7% of San Antonio small businesses during our one-
year campaign.
4. To increase media coverage among local radio and TV stations, newspapers and industry
publications by 7% during our 1 year campaign.
Output Objectives
1. To send two media kits to the San Antonio Express-News, News 4 WOAI, KENS 5 and
KSAT 12 by October 1, 2010
2. To conduct consultation meetings with key management by October 1, 2010.
3. To prepare and distribute informational brochures and pamphlets to associates and
attendees of upcoming events by October 10, 2010.
4. To send two CD PSA's to 96.1 FM, 94.1 FM and 98.5 FM by November 1, 2010.
5. To send one business feature article to Texas Banking Magazine by November 1, 2010.
6. To place two advertisements in The San Antonio Express News and Texas Banking
Magazine by December 1, 2010.
7. To create and post a campaign link on the Amegy Bank home page by December 1, 2010.
8. To create and distribute event invitation to San Antonio Mayor, Julian Castro by
December 15, 2010.
9. To conduct consultation and evaluation meetings with key management by September 30,
2011.
PROGRAMMING
The two-way symmetric model of public relations will be used to increase public
awareness in the San Antonio region. The campaign will be proactive and long-range. The
Amegy Bank name and logo are not recognized among the people in San Antonio; this puts
Amegy Bank at a great disadvantage. Since the public is minimally aware of Amegy, they tend
to overlook the bank when considering financial institutions. In order to avoid a future problem
such as, closing down San Antonio banking centers due to low clientele, the Amegy Bank of
Texas Public Awareness Campaign will proactively reach out to the city of San Antonio and
introduce them to the benefits of utilizing Amegy Bank products and services.
Theme: Amegy Makes Everything Good for You
Messages:
Amegy offers a friendly, efficient customer-centered experience.
Amegy is a financial service expert and is prepared to meet customer requests.
Amegy pledges to: communicate effectively, use the customer’s name, offer tailored
solutions, make the customer feel welcome, engage everyone as a prospect, and
respond promptly.
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Actions/Special Events
1. Conduct information consultation meetings with the CEO and communication manager
prior to the public announcement of the campaign to be held on October 1, 2010.
2. Create and post a link to the campaign website on the Amegy Bank homepage by
October 1, 2010. The website will feature important announcements and upcoming
events. Also, there will be a chat room and an interactive blog available two hours per
day. The social networking links will allow existing and potential customers to inquire
about banking products and services.
3. Host a charity event in conjunction with the United Way to be held on Thanksgiving Day
in 2010. Food and clothing will be donated to the United Way fund; Amegy associates
will participate in Thanksgiving Dinner activities. CEO of Amegy, David McGee, will
attend the event as keynote speaker.
4. Set up an informational table with Amegy logo, brochures and pamphlets at the Medical
Center University Hospital cafeteria during the month of December 2010. Amegy
associates will provide free giveaways with the Amegy name and logo. Personal bankers
will also be available to answer questions.
5. Set up an informational table at Career Point Institute during the month of January 2011.
Amegy associates will distribute flyers about banking products and services, as well as
talk to potential clients about their personal banking needs.
6. Set up an informational table with the Amegy logo at North Star Mall during the month
of February 2011. Amegy associates will distribute free giveaways with the Amegy name
and logo. A special rate will be offered on accounts in celebration of Valentine’s Day.
Personal Bankers will also be available to answer questions.
7. Set up an informational table and snow cone booth at the San Antonio Zoo during the
month of March 2011. Amegy associates will distribute complementary beverages and
free giveaways with the Amegy name and logo. Financial advisors will be available to
consult with parents about the savings accounts and options for planning for their
children’s future, as well as account options for beginning a college fund.
8. Hold a mixer at each San Antonio banking center for one week during the month of April
2011. The mixers will be open to the public and the media. Managers, specialists and
associates from each banking center will be available for questions.
9. Hold radio remotes at each San Antonio banking center during the month of May 2011.
Local radio stations, 96.1 FM, 94.1 FM and 98.5 FM, will provide music and prizes.
Managers, specialists and associates from each banking center will be available for
questions.
10. Set up an informational table and ice cream booth at Six Flags Fiesta Texas during the
month of June 2011. Amegy associates will provide complementary ice cream and free
giveaways with Amegy name and logo. Financial advisors and personal bankers will be
available to consult with guests, as well as open new accounts.
11. Set up an informational table and ice cream booth at Sea World during the month of July
2011. Amegy associates will provide complementary ice cream and free giveaways with
Amegy name and logo. Financial advisors and personal bankers will be available to
consult with guests, as well as open new accounts.
12. Host a meet and greet for local businesses sponsored by Amegy to be held at
Brackenridge Park in San Antonio during the month of August 2011. Amegy associates
will be available to answer questions and give out brochures about banking products and
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services. Through the meet and greet, local businesses will be given the opportunity to
promote their services operating under the Amegy brand. Business manager of Amegy
Bank in San Antonio, JC Beltran, will be invited to speak at the event and answer
questions. San Antonio Mayor, Julian Castro, will be a special guest and keynote speaker.
13. Conduct evaluation consultation meetings with the CEO and communication manager
during the month of September 2011 to evaluate the success and impact of the campaign.
Uncontrolled Media
News releases, feature stories, media kits, feature article.
Controlled Media
Pamphlets, brochures, website, CD public service announcements, and print
advertisements
Non-Verbal Cues
The Amegy Bank logo, website, and informational brochures serve as appropriate
symbols for our PR efforts. In addition to these symbols, the welcoming, laid back nature and
setting of each event further establishes an effective tone for our campaign.
Use of Credible Sources

David McGee, CEO of Amegy Bank in San Antonio and JC Beltran, Business Manager
in San Antonio will be speakers at several of the events.
Two-way communication
A mandatory paper survey will be administered to all attendees at each event to gain
audience feedback.
EVALUATION
The measurement of informational objectives includes three dimensions: message

exposure, message comprehension and message retention. Message exposure will be determined
by publicity statements through local clipping and media monitoring services. Attendance figures
will also determine the number of people exposed to the message. Message comprehension will
be determined by the application of readability formulas such as the Flesch Reading Ease
formula and the Gunning Fog Index. These formulas will predict ease of comprehension based
on measuring the difficulty of the words and the lengths of the sentences used in messages.
Surveys will also be used to measure message comprehension and retention.
Attitudinal objectives will be measured by using the Likert scale and the Semantic
Differential survey instruments. These measurements will help assess if new attitudes have been
reinforced or changed. Pre-testing and post-testing of San Antonio residents ages 18 – 35,
residents without a current bank account, community organizations, small businesses, and the
mass media (the San Antonio Express-News; News 4 WOAI, KENS5, KSAT12 TV stations;
96.1 FM, 94.1 FM and 98.5 FM radio stations), and specialized media (Texas Banking
Magazine) will take place to determine the degree of influence on attitudes attributable to the
campaign.
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Non-quantitative research methods will be used to measure behavioral objectives.
Behaviors will be measured in two ways. One way includes asking target audiences what their
behaviors have been since exposure to the campaign, which will require testing before and after
the campaign. The questions used will be close-ended and multiple-choice. The second way
includes observing the behaviors of San Antonio residents ages 18 – 35, residents without a
current bank account, community organizations, small businesses, and the mass media (the San
Antonio Express-News; News 4 WOAI, KENS5, KSAT12 TV stations; 96.1 FM, 94.1 FM and
98.5 FM radio stations), and specialized media (Texas Banking Magazine). Attendance figures,
numbers of telephone calls received, and Web site hits will be counted to determine behavior
changes. These figures will be monitored before, during, and after the campaign.
Output objectives will be measured by keeping records of the number of feature articles
and media kits sent to publications and broadcast stations, number of contacts made with
journalists, number of speeches given to San Antonio residents ages 18 – 35, residents without a
current bank account, community organizations, small businesses, and the mass media (the San
Antonio Express-News; News 4 WOAI, KENS5, KSAT12 TV stations; 96.1 FM, 94.1 FM and
98.5 FM radio stations), and specialized media (Texas Banking Magazine), number of
publications distributed, and number of events held. We will also track the number of in-house
publications distributed such as, informational brochures and pamphlets. Finally, we will track
the number of hits to the campaign website and take count of all CD PSA’s sent out.
REFERENCES
Amegy. (2009). Retrieved June 21, 2009 from http://amegybank.com/.

Texas Department of Banking. Retrieved June 23, 2009 from http://www.banking.state.tx.us/.
Zions Bancorporation. Retrieved June 18, 2009 from http://www.zionsbancorporation.com/.
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DOMINO’S PIZZA’S RESPONSE TO VIDEO SCANDAL:
A PUBLIC RELATIONS CASE STUDY
Giselle J. Guadron, The University of Texas at San Antonio

guadron_g@yahoo.com
ABSTRACT
This case study examines how Domino’s Pizza handled the negative effects of a video
made by two of its employees. In the video the employees do disgusting and unsanitary things
with food that was being made for customers. The two employees damaged the reputation of
Domino’s Pizza by posting the video on YouTube. Many people saw the video on the Internet
and other forms of media. Domino’s Pizza had to act quickly to save its reputation as a trusted
brand. The company was determined to maintain its customers’ trust and repair any damage that
the video had caused to its 49-year-old brand.
INTRODUCTION
On April 13, 2009 two Domino’s Pizza employees, Kristy Hammonds and Michael
Setzer, in Conover, N.C. filmed a video of themselves inside a Domino’s Pizza store. In the
video they were playing with ingredients of food that was supposed to be delivered to customers
and, “the video reflects some of the worst fears consumers have about food purchased from
restaurants” (Horovitz, 2009). Then the two employees posted the video on YouTube. A day
later, the video had circulated to other websites and Domino’s devised a plan of action to salvage
its reputation as the world leader in pizza delivery (Clifford, 2009).
BACKGROUND
Domino’s Pizza’s vision statement is: “Exceptional franchises and team members on a
mission to be the best pizza delivery company in the world" (dominos.com, 2009). Domino’s
Pizza, originally named "DomiNick's", and was founded by brothers Tom and James Monaghan
in Ypsilanti, Michigan. A year later James decided to quit and his brother remained the sole
owner of the store (dominos.com, 2009).
In 1990 Domino’s Pizza was recognized as one of thefastest-growing pizza companies in
the country. Domino’s Pizza also developed a new way to deliver food by introducing the
Domino's HeatWave®, “a hot bag using patented technology that keeps pizza oven-hot to the
customer's door” (dominos.com, 2009). In the year 2000 Domino’s Pizza had established its
solid reputation as a pizza chain with nearly 9,000 stores in 65 countries (dominos.com, 2009).
When the first Domino’s Pizza opened its doors to customers, the company claimed that
it had quality products, best service, and excellent delivery (dominos.com, 2009). Domino’s
Pizza now is a powerful global brand and known as the number one pizza delivery company in
the U.S. (dominos.com, 2009). Domino’s Pizza corporate headquarters is in Ann Arbor,
Michigan. Its public relations team “handles consumer public relations programs, community
relations, charitable giving, investor relations, corporate public relations and crisis
communication” (McIntyre, 2009).
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OBJECTIVES
Informational Objectives
• To inform all target publics that the incident was taken seriously and the employees
involved were immediately terminated and will face legal charges within 24 hours.
• To inform all target publics that the store where the video was filmed is closed and will
be sanitized from top to bottom within 48 hours.
• To inform all Domino’s Pizza employees of the video incident as soon as the identities of
the two employees involved were identified.
• To inform all Domino’s Pizza stores via e-mails and within four hours that the incident
was brought up to Domino’s Pizza headquarters.
Attitudinal Objectives
• To create a favorable public attitude towards 45% of Domino’s Pizza customers.
• To create favorable attitudes among 30% of social media audiences towards Domino’s
Pizza.
• To make 60% of loyal and new Domino’s Pizza customers believe that Domino’s Pizza is
still a trusted name.
Behavioral Objective
• To observe 30% decrease of concerns among current customers regarding the video
within a week of the public relations plan implementation.
Output Objectives
• To release a statement on Domino’s Pizza website apologizing about the YouTube video
incident.
• To prepare a video with Domino’s Pizza President Patrick Doyle addressing the situation
and then posting the video on YouTube.
CAMPAIGN
The different groups that Domino’s Pizza targeted were: the media, Domino’s
employees, Domino’s customers, Domino’s stockholders, Domino’s stores, and the social media
publics who were aware of this incident (McIntyre, 2009). Domino’s Pizza posted a message on
its website that said, “the opportunities and freedom of the Internet is wonderful, but it also
comes with the risk of anyone with a camera and an Internet link to cause a lot of damage”
(York, 2009).
To respond to the situation, Domino’s Pizza posted its own video on YouTube (Jacques,
2009; McIntyre, 2009). In the video Domino’s Pizza USA President Patrick Doyle said,
“Recently we discovered a video of two Domino’s team members who thought their acts would
be a funny YouTube hoax. We sincerely apologize for this incident” (Garfield, 2009). Doyle also
stated that Domino’s Pizza would take legal action against the two employees who posted the
video. Furthermore, he mentioned that the employees in the video had been fired and that
particular store was closed down temporarily for inspection and sanitization (Garfield, 2009).
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PUBLIC RELATIONS PLANNING AND EXECUTION
The public relations plan implemented the two-way symmetric model. Domino’s Pizza
used different methods of communication. The social media publics were aware of the YouTube
video and were helpful in assisting Domino’s Pizza identify the two employees’ and the
franchise store where the video was filmed. Domino’s Pizza received assistance from Amy
Wilson and Jonathan Drake to help them, “identify the unseemly pair after spotting the story.”
(York & Wheaton, 2009). Wilson and Drake used Google satellite images for locations to
identify the franchise store where the incident was taped (York & Wheaton, 2009).
Domino’s Pizza used a reactive program to deal with this incident. The company never
imagined something like that would happen, and as a result, it did not have a preplan to handle
the crisis. Domino’s Pizza learned a lesson by deciding to keep monitoring the World Wide Web
for similar incidents. Thus the company hired a social media specialist to serve as the eyes and
ears of Domino’s in the social media world. (Jacques, 2009)
THEMES AND MESSAGES
Two messages were stressed throughout the public relations campaign. The first message
was “There is nothing more important to us than the trust of our customers” (Garfield, 2009).
Another message was, “Domino’s Pizza did not do this; it was done to us” (Hoops, 2009).
Domino’s wanted the targeted publics to know that, “the two employees had been fired and
arrested for prosecution” (McIntyre, 2009).
ACTION
Since the damage was done by a video posted on YouTube, Domino’s Pizza used the
same medium to reach the target publics quickly. Within two days of the incident, Domino’s
Pizza USA President Patrick Doyle expressed his anger and sadness by posting a video on
YouTube.
EVALUATION
Informational Objectives
• Monitor number of phone calls regarding the YouTube video that were made to
Domino’s Pizza stores nationwide.
• Monitor number of calls regarding any special offers for loyal customers.
• Monitor number of website hits and compare numbers on a daily basis as plan goes on.
• Monitor Facebook and Twitter on a daily basis for comments about Domino’s Pizza in
order to measure attitude towards Domino’s Pizza.
• Count number of hits on Domino’s Pizza website.
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Behavioral Objectives
• Daily update count on how many customers is ordering pizza from Domino’s Pizza either
through phone or online ordering.
• Daily update on any Domino’s Pizza customer decrease.
Output Objectives
• Count number of hits on Domino’s Pizza website.
• Articles regarding this incident will be clipped and counted.
• Count number of hits Patrick Doyle video received on YouTube.
CONCLUSION
The most important lesson that Domino’s Pizza learned from this incident was that “you
have to hire well” said McIntyre. (McIntyre, 2009) A month before the incident took place
Domino’s Pizza was getting ready to launch a social media team to communicate on Facebook
and Twitter (Jacques, 2009). Now with the social media team officially launched after the
scandal, the company is “talking about new products, addressing customer issues and concerns,
promoting new products and encouraging customers to use the online ordering system” (Jacques,
2009).
We are living in a time where technology is everywhere and companies need to
understand that the Internet has changed the public relations landscape (Goldman, 2009). Every
company needs to be ready for anything.
REFERENCES
Clifford, S. “Video Prank at Domino’s Taints Brand.” NYTimes.com,

http://www.nytimes.com/2009/04/16/business/media/16dominos.html, April 15, 2009.
Domino’s Pizza website. Retrieved from http://www.dominos.com, 2009.
Garfield, B. “Domino’s Apology Video Isn't Going to Erase Those Images.” Advertising Age,
80,(14), 2009, 26.
Goldman, R. “Domino’s Employee Video Taints Food and Brand.” abcnews.com,
http://abcnews.go.com/Business/story?id=7355967&page=1, April 16, 2009.
Hoops, S. “Prank a Problem for Food Servers: Pizza Franchises React to Video.” Ventura
County Star (CA), April 16, 2009.
Horovitz, B. “Domino’s Nightmare Holds Lessons for Marketers.” usatoday.com,
http://www.usatoday.com/money/industries/food/2009-04-15-kitchen-pr-dominos-
pizza_N.htm, April 16, 2009,
Jacques, A. “Domino’s Delivers During Crisis: The Company’s Step-by-Step Response After a
Vulgar Video GoesViral.” www.prsa.org, Retrieved on April 17, 2009, from
http://www.prsa.org/SearchResults/view/8226/102/Domino_s_delivers_during_crisis_Th
e_company_s_step, August 17, 2009.
McIntyre, T. “Vice-President- Domino’s Pizza Communications. E-mail interview on November
5 & 24, 2009 by Giselle J.Guadron- E-mail Interviewer, 2009.
York, E.B. “The Aftermath of Domino’s PR-Disaster Video” adage.com,
http://adage.com/article?article_id=136004, 2009.
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York, E.B., and Wheaton, K. “What Domino's Did Right-and Wrong--in Squelching Hubbub
Over YouTube Video.” Advertising Age, 80, (14), 2009, 1-24.
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SHAPE UP AMERICA! AND CHILDHOOD OBESITY:
“OVERCOME OBESITY TO MAXIMIZE YOUR LIFE” CAMPAIGN
Disney Hanka, The University of Texas at San Antonio

disney_hanka@hotmail.com
Heather Harper, The University of Texas at San Antonio

heathereliseharper@yahoo.com
ABSTRACT
Obesity is associated with five of the ten leading causes of death and disability in the
United States. Though there is information readily available to individuals, not enough is focused
on children (ages 2-20), which is where this disease has its greatest affect. Children are spending
more time in front of the television, computer, or video-game console and less time exercising.
Today’s average busy family does not have the time to prepare nutritious home cooked meals
and are relying more on fast food (Gavin, 2009). Shape Up America, a non-profit organization,
focuses on educating the public on the importance of the achievement and maintenance of a
healthy body weight through the adoption of increased physical activity and healthy eating
(“Shape Up”, 2009). By using Shape Up America! as the driving force in the campaign, “Over
Come Obesity to Maximize Your Life”, a vast amount of the population can be reached and this
issue can be addressed properly. We have developed specific objectives for this plan that focuses
on the particular target audiences. This public relations plan targets specific publics, sets
objectives, and proposes events that SUA can utilize to fight the battle against childhood obesity.
INTRODUCTION
Obese, as defined by the National Institutes of Health, is an individual with a body mass
index of 30 and above. From 1980 to 2000, the rate of childhood obesity more than doubled; 30
states have child obesity rates of 30 percent or more (“The Campaign”, 2009). Recent studies
confirm that obese children have a difficult time losing weight and if they are not educated on
healthier lifestyles at a young age, the bad habits will follow them into adulthood (“Childhood
Obesity”, 2010). Though information is readily available to individuals, we believe that not
enough is focused on children, which is where this disease tends to begin and has its greatest
affect. Obesity has affected many generations, and studies show that it will continue to affect
future generations unless there is a drastic change in one’s lifestyle. This alarming realization not
only provides a catalyst to conduct this plan but also tells the nation that something needs to be
done about the obesity epidemic. By focusing on childhood obesity, we intend to help decrease
the overwhelming rate of obesity in children.
HISTORICAL BACKGROUND
Shape Up America! was established in 1994 by U.S. Surgeon General C. Everett Koop,
who was committed to raising awareness of obesity as a health issue and providing responsible
information on healthy weight management (“Shape Up”, 2009). Since the start of the
organization, Shape Up America has been conducting a broad-based education initiative to
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encourage sensible eating and increased physical activity in all individuals and a modest weight
loss in overweight individuals that can be maintained over time (“Shape Up”, 2009).
Shape Up America’s mission is to educate the public on the importance of the
achievement and maintenance of a healthy body weight through the adoption of increased
physical activity and healthy eating. The organization strives to achieve its mission through a
series of goals such as, to promote a new understanding of the health importance of achieving
and maintaining a healthy weight and increasing physical activity; provide science-based
information on the assessment and treatment of obesity; and increase cooperation among national
and community organizations committed to advancing healthy weight and increased physical
activity as major public health priorities (“Shape Up”, 2009).
Over the years, the initiatives developed by Shape Up America! have helped bring the
health and economic consequences of obesity “front and center” in the minds of many
Americans, including some of our nation’s leaders. Data collected monthly throughout 2008-
2009 show that the number of subscribers, to the online newsletter has remained steadily above
20,000. In 2008, the Shape Up America! newsletter provided a platform for Dr. Moore to discuss
an important series of articles published in the journal Pediatrics on the prevention and treatment
of pediatric obesity. Four issues of the newsletter were dedicated to discussing these two topics
and to highlighting areas in which more research is critically needed to inform effective
prevention and treatment of childhood obesity (“Shape up”, 2009). MS& L Worldwide, a leading
global communications handles public relations for Shape Up America!. MS&L helps to develop
and communicate information to the public and to health care professionals (MS&L Worldwide,
2009).
Problem Statement
More than 70% of obese adolescents retain their overweight and obese condition even
during their adulthood (“Shape Up”, 2009). There is a lack of motivation toward pursuing a
healthy lifestyle in the family environment. As a result, more individuals are becoming obese at
an early age specifically between ages 2-20. In some cases there are genetic or hormonal causes
of childhood obesity, but in most cases the excess weight is caused by children who eat more
than their bodies work off. Children need extra nutrients that adults do not need to fuel their
growth and development. If the proper amount of daily calories is taken in, these calories will go
towards the growth and metabolism of a child. If more than the needed daily calories are taken in
the child begins to gain weight (“Mayo Clinic Staff”, 2008). Shape Up America’s main focus is
to educate the public on the importance of a healthier lifestyle, and teach families how to make it
an obtainable goal (“Shape Up”, 2009).
THE PUBLIC RELATIONS PLAN
By devising this plan, we attempt to (1) raise awareness of child obesity nationwide and
help promote a healthy lifestyle, (2) increase funding for research, education, and development
of new programs to address childhood obesity, (3) provide continuous updated information on
healthy eating habits, new physical activity ideas, and healthy tips, (4) promote increased
physical activity and improvements in dietary intake that prevents weight gain or produce weight
loss and weight maintenance.
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Target Publics
In order for this plan to be effective, we believe the following publics should be targeted:
Families, doctors, schools (elementary, middle and high school), government agencies, print and
broadcast agencies, health care professionals, children (2 to 20 years old) and civic leaders.
Objectives
Establishing the desired outcomes between the target publics and how the organization
effectively communicates with them is important. We have done this by creating particular
objectives for the campaign and breaking them down into two categories: impact objectives with
three subsections: informational, attitudinal, and behavioral, and output objectives. Our goal with
the informational objectives begins with increasing family awareness of obesity as a health issue
by 35% within 2 years of the start of the campaign. We believe that many bad habits begin at
home, and by informing families and educating them on the obesity epidemic it can begin to
make a difference in their eating and exercise habits. We believe another important objective is
to educate 30% of doctors about Shape Up America’s campaign within 1 year of the start of the
campaign. By bringing doctors knowledge into the campaign they can provide more facts to
children and parents about the health risks of obesity and offer healthy solutions for families.
Another informational objective is to inform 30% of schools (elementary, middle and high)
about the effects of obesity within 2.5 years of the start of the campaign. If schools are informed,
then they will begin to implement healthier food alternatives for children and require physical
education to all students. Also, we want to enhance media exposure by 35% about the harmful
effects of obesity and prevention steps within 2 years of the start of the campaign. Media
exposure will help inform more people around the country about the obesity epidemic.
Next, we focused on attitudinal objectives in order to change the attitudes of our target
publics. We want to change 20% of family attitudes toward healthy eating and exercise within
2.5 years of the start of the campaign. By changing the families’ attitudes, they will see the
importance in making lifestyle changes. We would also like to influence 25% of doctors to play
a vital role in the fight against obesity within 2 years from the start of the campaign because with
doctors’ help they will be able to provide children and their parents with facts on the dangers and
risks of obesity. We will need to convince 35% of schools (elementary, middle, and high) to
promote healthy meal choices and exercise within 3 years of the start of the campaign. Children
eat most of their meals at school and by offering healthy choices it will begin to help prevent
childhood obesity, and by making physical education required, children will become more active
and live a healthier lifestyle. In order to promote this healthy lifestyle to the public we will need
to change 15% of the media’s attitude regarding body image and being healthy within 4 years of
the start of the campaign. With the media’s help we will be able to provide all of the needed
knowledge to children and their parents on the risks of obesity and the importance of eating
healthy and exercise.
In order to change the obesity epidemic, the behaviors of children and their families will
have to change. We will need to encourage sensible eating habits and increased physical activity
among 25% of families within 3 years of the start of the campaign. We will also want to promote
30% of doctors to adopt SUA’s obesity prevention plans within 4 years of the start of the
campaign to help spread the facts on the dangers of childhood obesity. Children spend most of
their day at school, so most of their daily food intake is provided to them by their school. In
order to better the nutritious quality of food we want to encourage 35% of schools to enact
healthy meal plans and also implement mandatory physical education within 3.5 years of the
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start of the campaign. Next, we want to create good relations with 35% of the media, so that they
may generate positive coverage about the benefits of healthy eating and exercise during the first
2.5 years of the start of the campaign. Positive media coverage will benefit the campaign by
providing the knowledge needed to start a healthier lifestyle. Many families across the United
States may be struggling with the issues of obesity so by persuading 25% of children to
participate in the campaign it can begin to help them maintain a healthy weight.
Finally, the last thing we came up with is our output objectives. In order to make this
campaign successful we want to first assign a spokesperson to be the face of the campaign.
Throughout the campaign informational pamphlets will be distributed to doctors and schools that
are helping with SUA’s mission. In order to keep the public updated with the status of the
campaign ten press conferences will be held. Bi-annual press releases will be distributed with
updates on the campaign to 40% of media for the duration of the campaign. Advertisements will
be run on media outlets while informational flyers will also be distributed, both featuring healthy
meal plans and exercise routines to children. Last, we will create a community webpage with
open forum for all target publics to communicate and educate themselves on obesity.
PLANNING AND PROGRAMMING
Public Relations Model

We recommend the public information model for this plan. The purpose of this model is
the dissemination of information, not necessarily with a persuasive intent. The public relations
practitioner’s job is to report objective information about the organization to the intended
publics.
Public Relations Program

We chose to implement a reactive program to help fight the statistics that 1 in every 5
children are obese and that obesity is associated with five of the ten leading causes of death and
disability in the United States (“The Campaign”, 2009) and to educate the target publics on
healthy eating habits and physical activity.
Messages and Themes

The main messages of the plan are:
• Shape up America and its target publics will come together as a community to
promote a healthier lifestyle.
• Obesity is a epidemic but can be prevented by providing responsible information on
healthy weight management.
• Childhood obesity needs to be urgently addressed to help fight the rising obesity rate
in the United States.
• Focusing on healthy eating for all Americans.
• Theme: “Over Come Obesity to Maximize Your Life.”
Actions and Special Events

To achieve the stated objectives, Shape Up America! needs to consider the following
series of actions and/or special events.
1. National Community Health Fairs: These consist of different organizations coming
together to help educate the public’s on obesity and prevention steps that can be taken
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against the disease; Fairs will offer free health screenings and BMI tests; They will be
held every three months during the duration of the campaign.
2. Distributing Information about Obesity: This will be done through brochures,
pamphlets, e-mails (blasts and newsletters), media kits, etc.
3. National Walk-a-thon- “Walking off Obesity”:This will be a one day national event
where the general public will come together to “Walk off Obesity”. The Event will tie
into SUA’s 10,000 Steps campaign that they are currently running. Along the path
there will be signs to show how many pounds or calories an obese individual would
have burned.
4. Campaign Congress- “Call to Action”: Involves civic leaders and activist to come
together and address Congress on the obesity epidemic; This event will be held in
Washington D.C. when Congress meets to discuss bills; The issues of research
funding, health awareness and promotion of exercise in schools will be addressed.
5. Nutrition Education Week- “Achieving a healthy weight through kid friendly foods”-
Celebrity chefs and local nutritionists will come to schools nationwide. They will
teach children and their parents about healthy food choices, recipes, and proper
nutrition. Each day a different chef will prepare the recipes discussed so ensure that
they are healthy and tasty.
6. National Sports-a-thon- The schools will pick a day, nationwide, to hold a “field day”
for all students to participate in different sports on campus. There will also be
educational breakouts during the day to help educate children on the positive benefits
of being active.
7. Boot Camps- These will be bi-monthly camps that will be offered for no cost to the
community national; Local trainers will assist at the camps to teach participants
different exercises and health tips.
EVALUATION
An evaluation will need to be conducted twice a year during the duration of the campaign
to ensure that the objectives were met. To properly evaluate the plan, we need to assess each
group of objectives, the impact and the output. The impact objectives consist for 3 subgroups,
informational, attitudinal, and behavioral.
When evaluating informational objectives, we need to monitor the publicity placement
and message delivery in the media. We also need to keep track of the number of website hits, e-
mails received, informational packets sent, and audience size at events. In addition, SUA will
need to conduct message comprehension surveys over the phone and through e-mail’s to
determine the effectiveness of the messages used in the campaign. All numbers determined will
need to be compared weekly to properly evaluate the effectiveness of the message. As for
attitudinal objectives, SUA will need to measure the response of surveys from e-mails, phone
calls, blogs on their website, etc., as well as the target public attitudes toward healthy eating and
exercise compared to the results from before the start of the campaign. Another way of
measuring attitudinal objectives is for SUA to provide a survey at the end of each event to help
measure the participant’s attitude of the project or event they attended. The final subgroup of
impact objectives is behavioral. To evaluate these, SUA will need to measure the number of
event attendees, the number of website hits, e-mails received, information inquiries received and
the amount of research funding received since the start of the campaign. They can also survey
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the number of school that adopted a healthy mean plan compared to before the start of the
campaign.
Shape Up America’s output objectives can be evaluated by monitoring placement of
written media advertisements, radio/television commercial time slots/ frequency and time slots of
radio and public television service announcements regarding Shape Up America’s campaign.
They will also need to keep records of the number of news releases sent to media, the number of
publications distributed, the number of social affairs (health fairs, boot camps, walk-a-tons,
nutrition week, etc,), number of e-mail and blogs posted and the number of congress hearings
attended and the outcome of each.
The main purpose of the plan was created to help address the obesity epidemic that is
sweeping the nation by storm. Shape Up America! strives to help promote healthy eating and
exercise tips to the general public. There is no one particular reason why Shape Up America’s
campaigns have not been very successful. We can suggest that one main cause is due to the sheer
fact that this epidemic is wide spread geographically speaking and politically speaking.
REFERENCES
“The Campaign to End Obesity[Advancing America’s Journey to Healthy Weight].” Retrieved

November 23, 2009, from http://www.obesitycampaign.org/.asp, 2009.
“Childhood Overweight.” Retrieved January 10, 2010, from The Obesity Society website:
https://www.obesity.org/information/childhood_overweight.asp, 2010.
“Childhood Overweight and Obesity.” Retrieved January 11, 2010, from Centers for Disease
Control and Prevention website: http://www.cdc.gov, October 20, 2009.
Gavin, M. L. “Overweight and Obesity.” Retrieved January 9, 2010, from The Nemours
Foundation website: http://kidshealth.org/parent/food/weight/overweight_obesity.html,
February, 2009.
Mayo Clinic Staff. “Childhood Obesity.” Retrieved January 10, 2010, from
http://www.mayoclinic.com/health/childhood-obesity/DS00698, March 28, 2008.
MS&L Worldwide. Retrieved November 24, 2009, from http://www.mslworldwide.com/, 2009.
Shape Up America! [Healthy Weight for Life]. Retrieved November 25, 2009, from
http://www.shapeup.org/, 2004.
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MAJOR CASE STUDY: THE CRISIS AT AIG
Amina Lovell, The University of Texas San Antonio

aminalovell@yahoo.com
ABSTRACT
The American International Group was the recipient of the biggest bailout from the U.S.
Treasury Department’s Troubled Asset Relief Program (TARP). To date, the company has
received about $170 billion in federal bailout funds. Yet, it paid $160 million in bonuses to its
executives after receiving some of that funding, prompting nationwide outrage. This situation has
created a lot of negative media attention and the backlash to their executive decisions. The public
image of the company has been destroyed and they have been losing a lot of present clientele.
The company has had no experience with this and therefore has no plan set in place to deal with
these repercussions. I have therefore decided to outline what the company should have done in
this situation.
INTRODUCTION
The American International Group Inc. (AIG) used to be the premier name in insurance
and a world leader in financial services (AIG.com). In 2008 however, this company was the
recipient of the biggest bailout from the U.S Treasury Department’s Troubled Asset Relief
Program (TARP). To date, the company has received about $170 billion in federal bailout funds.
Yet, it paid $160 million in bonuses to its executives after receiving some of that funding,
prompting nationwide outrage. CEO Edward Liddy has come forth and said that those bonuses
were to be paid before the bailout was given (McLeod, 2008), however tax-payers are still
disgruntled at the audacity of the company. This has caused a lot of negative media attention and
public backlash to the decisions AIG officials have made.
The aftermath of this scandal is the company image has been tarnished and there is now a
very negative connotation to the name AIG within today’s society. Also, it prevents the company
from gaining prospective insurance clientele and loosing current clientele.
HISTORICAL BACKGROUND
AIG is a company that provides a variety of products for individuals and families,
ranging from Insurance (including auto and motor vehicle, high net worth, home and property,
identity theft, life, travel and health related) AIG also provides financial services including
annuity, banking, investment services, loans and credit, mutual funds and retirement services
(AIG.com).
AIG provides these benefits to other business as well, including casualty, property,
workers’ compensation, executive liability, international coverage, accident and health,
professional liability, specialty, life and commercial auto insurance. Another advantage they
offer to businesses are financial services including annuity, investment services, loans and credit,
mutual funds and retirement services (AIG.com). A detailed report of AIG’s financial status
including an earnings press release, financial supplements and sources of funds are attached in
the Paper Sources section of this case study.
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The key management at AIG are the Chairman and CEO, Edward M. Liddy, Vice
Chairman Legal, Human, Corporate, Communications and Corporate Affairs Anastasia D. Kelly
and EVP and CEO David L. Herzog (McLeod, 2008). In terms of public relations AIG has an in
house team that handled any of its major press releases and communication with the media and
public in general. Members of this in-house team include Teri Watson (Investment Community)
and Christina Pretto (News Media). In light of this crisis happening within the company
however, AIG has hired the services of Kekst, Hill & Knowlton and Burson-Marsteller to help
their in-house team with the amount of bad press, over-whelming calls, press conferences and
overall plan to turn the company back around to what it used to be (Fleet, 2009).
CAMPAIGN OBJECTIVES
The objectives of the campaign are divided into Informational, Attitudinal and
Behavioral:
Informational Objectives:
1. Within 18 months of the new tactical plan, explaining what AIG is doing to resolve its
internal problems. Expose 60% of the general public, current and future customers,
current employees, nationwide and international investors, government public and the
mass/financial media to it.
2. Increase comprehension of the new tactical plan to all current and future customers,
current employees, nationwide and international investors, government publics and
mass/financial media by 55% in 2 years.
3. To increase knowledge of the new tactical plan and financial status of AIG by 50% to the
general public, current and future customers, current employees, nationwide/international
investors, government public and the mass/financial media in 2 and a half years.
1. To change the unfavorable attitudes that exist among the general public, current and
future customers, current employees, nationwide and international investors, government
public, the mass/financial media, and major/private wire services about the reputation and
financial well being of AIG by 50% in two and a half years.
2. To change the unfavorable attitudes that exist among the general public, current and
future customers, current employees, nationwide and international investors, government
public, the mass/financial media, and major/private wire services about the reputation and
financial well being of AIG by 50% in two and a half years.
Behavioral Objectives
1. To persuade 30% of current customers and shareholders, not to change insurance
providers or sell their stocks, in one year.
2. To generate positive media about AIG and its new tactical plan to all financial/mass
media, general business publications, major circulated newspapers and magazines,
private wire services and major wire services by 25% in one year.
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EVENTS
The special events listed will be targeted towards the financial/mass media, major
circulated newspapers and magazines, major wire services, nationwide/international investors,
the government public and the rest of the target audience. These events will be created to
enhance positive relationships with all target public.
An annual sponsorship event that AIG could hold is a seminar dedicated to training and
informing the general public of how to select, buy and use certain types of insurance. At this
event will be different types of insurance companies (Ex: AllState and Geico) where they set up
booths that information tables about their company. AIG will be the host of this event and will
also invite guest speakers and financial specialists to have lectures, open forums and
presentations about the importance of insurance and its many forms (health, life, travel, auto etc).
We will invite the financial media to this, including major business publications, major
circulated newspapers and broadcast networks. This event will be an annual occurrence
happening tentatively at the end of March early April 2011. At the end of AIG’s quarterly
review. This event will be based upon positive media coverage and an opportunity for AIG’s
competitors to become allies, in effort and educate and inform the public.
AIG can develop a scholarship fund for business majors in certain universities around the
nation and abroad. There will specific criteria to receive this scholarship, for example a certain
GPA, a two paper essay detailing why they should get the prestigious scholarship, two letters of
recommendation from faculty or staff at that university, enrollment in a community service
organization on campus or within the community and enrollment in a business fraternity,
national club or organization. The winner of this scholarship will be announced at the annual
insurance fair mentioned above and will be given interviews by the invited media. The CEO of
the company Edward Liddy, will announce the selected individual and present him with his
rewards on stage The winner of this scholarship will receive monetary help in the form of books,
tuition payment and other miscellaneous costs. The selected individual will also get first priority
to have an internship within one of the company’s many sectors including nationally and abroad.
This scholarship will be advertised in all major US and international collegiate magazines,
collegiate press and financial media. This will show taxpayers and society that AIG is giving
back their bonuses and distributing it back into the economy slowly but surely. Final deadline to
apply for this scholarship will be January 2011.
EVALUATION
In order to gauge the efficacy of the objectives, there must be an evaluative process in
which the objectives are looked at again and any evidence of information, attitudes and
behaviors will be shown. This section is also a good way to improve the program, in preparation
to make it a proactive policy.
The best way to survey these objectives is to use Likert scales and the Semantic
Differential. Both of these instruments measure attitude intensity and direction, they are useful in
assessing whether or not new attitudes have been formed or existing attitudes have been
reinforced or changed. Observation of the target public is the best way to evaluate this objective.
Basic counting of number of people in events, number of hits to AIG website and influx of calls
to the headquarters of national branches are the best way to estimate the change in behaviors.
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REFERENCES
American International Group (AIG). “About us/Individual and Families/Mission

Statement/Annual Reports/ Financial Reports.” Retrieved March 26, 2009 from
http://www.aig.com/Home-Page_20_17084.html, 2009. Fleet, D. “MSNBC vs. AIG’s
Public Relations Agencies.” Retrieved on March 25, 2009 from
http://davefleet.com/2009/03/msnbc-aig-public-relations-agencies/, 2009.
McLeod, D. “AIG Attempting to Reduce Financial Pressures.” Business Insurance, 42, 2008, 3-
4.
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TWO OF THE SAME? CRISIS COMMUNICATION IN AF447 AND TK1951
H. Efe SEVIN, Emerson College

hasan_efe_sevin@emerson.edu
ABSTRACT
This study focuses on how Turkish Airlines (THY) and Air France (AF) managed their
communication attempts after the unfortunate accidents of TK 1951 on February 25, 2009 near
Amsterdam Schiphol Airport and AF 447 on June 1, 2009 in Atlantic Ocean. Evaluating the
efforts in a framework, author sets out to discuss THY’s and AF’s performance in four important
areas under eight headings: coordination of the messages, acknowledging uncertainty and taking
responsibility, reaching the stakeholders and making use of online media tools. Hopefully, the
results of this research will help THY and AF in specific, and the airline industry in general, to
improve and develop their immediate crisis response strategies.
INTRODUCTION
This paper sets out to discuss the immediate communication attempts of Turkish Airlines
(THY) following the crash of the flight TK 1951 on February 25, 2009 near Amsterdam’s
Schiphol Airport and of Air France after AF 447’s accident on June 1, 2009 in Atlantic Ocean.
TK 1951 was THY’s third international flight accident in its history and the only one in the last
three decades. The attempts of the organizations and the messages are evaluated in a framework
withdrawn from the literature (Seet, 2009; Ray, 1999; Curtin, 2005; ten Berge, 1990; Adubato,
2008; Henry; 2000; Heifetz, 1998; Jackson & Jamieson, 2008; Jamieson & Waldman, 2003;
Klann, 2003; Linsky & Heifetz, 2002):
I. Coordination of the messages: Given today’s media structure – such as

7/24 news networks, citizens journalists, the pace of internet journalism –,
organizations are expected to “present a consistent and coordinated
messaging strategy” (Seet, 2009, p.715) thus should be able to harmonize
the messages originating from the crisis as “[i]n any crisis situation, the
goal is to control and manage…the message, and the communication”.
(Ray, 1999, p.244).
II. Keeping communications privileged: A golden rule in crisis communication is to
“tell it all and tell it fast” (ten Berge, 1999, p.79). Although in such a case, there are
many other aspects that an organization should be taking care of (such as reaching the
crisis area, keeping the operations going on), communications should never be
ignored. Especially when the human life is at stake (Klann, 2003), organizations
should focus on informing the public.
III. Communicating beyond the words:Communication involves more than plain
words. “The gestures, underlying attitudes, and physical presence or absence speak
volumes” (Ray, 1999, p.109) are also important constituents of crisis communication.
Taking initiative and showing leadership skills (Heifetz, 1998; Linsky & Heifetz,
2002) are of vital importance in crisis communication. Public will be looking for
action rather than words. In order to build up an ethos, organizations are expected to
act in accordance with their narratives.
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IV. Wider understanding of media: “Media scrutiny is a fact of business life” (ten
Berge, 1990, p.14), especially during a crisis situation. A narrow minded media focus
will constrain an organizations’ ability to reach “new media platforms…[and] the net-
savvy population”(Seet, 2009, p.717). Organizations are expected to appear on
traditional media. In addition, they should be actively engaged with non-traditional
resources, especially online social media – which is faster and has a wider audience
than some traditional means (Jackson & Jamieson, 2008; Jamieson & Waldman,
2003).
V. Stakeholder communications:An aircraft crash concerns more than the individuals
who are directly involved in the accidents or in the organizations. Therefore, the
corporations are expected to “identify its relevant stakeholders, being sensitive to
both unintended and diverse groups, and determine approaches for dealing with
various groups” (Ray, 1999, p.245).
VI. Becoming a reliable information resource:During a crisis situation, lack of
information will lead to rumors. “If facts are not available, then speculation will”
(Curtin, 2005, p.47) take their place in media. Thus, an organization “should strive to
be perceived as the most reliable source of information” (Ray, 1999, p. 109).
VII. Taking responsibility:“By playing for an honest [and] well-timed” (Adubato, 2008,
p.20), an organization can reduce the damage of the crisis. A responsibility culture
within the organization “will likely influence appropriate actions” (Ray, 1999, p.244)
which will make it possible to gain ethos in the eyes of the public.
VIII. Readiness to acknowledge uncertainty: In a crisis situation involving the possibility
of human causalities, it is important to “make a speedy rhetorical” (Seet, 2009,
p.714). This first reaction might involve uncertainty which should be acknowledged
by the authorities. Although it is acceptable to say ‘I don’t know’, misleading the
public is a faux pas in crisis communication (Henry, 2000, p.50).
This framework is not an exhaustive checklist of crisis management, or a crash
management (Pauchant & Mitroff, 1992), but is rather a ‘must-do’ list.
CRISIS 1: TK 1951 ON FEBRUARY 25, 2009
Turkish Airlines Flight 1951 left the Istanbul Ataturk Airport (IST) at 08:22 am on a
scheduled flight to Amsterdam-Schiphol International Airport (AMS) with 128 passengers and 7
crew members on board (THY, n.d.) on February 25, 2009. The aircraft was a Boeing 737-800,
one of the 51 THY keeps in service. There were three crew members at the cockpit, apart from
captain pilot, a safety pilot and a co-pilot under line training (THY, n.d.). The flight was going
flawlessly until TK 1951 started to descend. It was cleared for an approach to runway 18R at
Schiphol. The Boeing 737 was on final approach, when it came down in a farm field some 1,5
km short of the runway threshold. Hradecky (2009) describes the accident:
“According to a report by Dutch Television, emergency services had been

deployed to runway 18R before the airplane went down. A fire commander said,
that they were alerted of an accident on runway 18R, but when they approached
runway 18R they could not see any airplane. They then drove a few kilometers to
reach the actual accident site. According to pilots on the tower frequency TK-
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1951 did not declare emergency, they were rather cleared to land on runway 18R,
read that clearance back correctly, then they were not heard anymore.”
The preliminary report of the Dutch Safety Board, underlines the irregularity occurred during the
descent, at 1950 feet and explained the reason for the crash as following (Dutch Safety Board,
2009):
“At a height of 1950 feet the left radio altimeter suddenly indicated a change in
altitude – from 1950 feet to - 8 feet – and passed this onto the automatic pilot...
This change had a particular impact upon the automatic throttle system which
provides more or less engine power... In practice, the plane responded to this
sudden change as though it was at an altitude of just a few meters above the
Polderbaan[18R] and engine power was reduced… As a result of the deceleration,
the aircraft's speed was reduced to minimum flying speed (stalling situation) and
warning signals (the steering column buzzes at an altitude of 150 meters) were
given. The black box shows that full power was then applied immediately.
However, this was too late to recover the flight, the aircraft was too low and,
consequently, the Boeing crashed 1 kilomet[er] short of the runway.”
The first reaction came later that day, from THY’s Chairman of the Board, Candan
Karlitekin. Mr. Karlitekin stated that there were 127 passengers and 7 crew members (Radikal,
2009). Unfortunately, Mr. Karlitekin’s statements proved to be wrong and 9 souls perished,
including all three pilots at the cockpit, a cabin crew and five passengers.
CRISIS 2: AF 447 JUNE 1, 2009
Air France Flight 447(“Air France Flight 447”, 2009)left Rio de Janeiro’s Galeao -
Antonio Carlos Jobim International Airport (GIG) on May 31st, at 19:03 local time (22:03 UTC)
for Paris Charles de Gaulle International Airport (CDG). The last contact with the crew was a
series of routine messages to Brazilian air traffic controllers 3 hours and 30 minutes into the
flight. Forty minutes later, a four-minute-long series of automatic radio messages were received
from the plane, indicating air data faults. The last transmission was sent at 02:14 UTC, indicating
a pressurization advisory. The Airbus 330 had 216 passengers on board and 12 crew members,
including 3 pilots, none of whom survived the accident. It is the deadliest accident in Air
France’s history and the first Airbus 330 accident ending up with fatalities.
The first reaction from Air France came three hours after the communication was lost
with the plane. Francois Brousse, said that AF 447 crashed, probably due to combination of
circumstances.
EVALUATION OF THE CRISIS COMMUNICATION: TIME TO FACE THE PUBLIC
After the crisis, THY changed its website design, used a black background, launched two
information phone lines giving service in English, Turkish and Dutch. A flight was scheduled to
take the relatives of the passengers to Amsterdam. In the following weeks, compensation was
arranged, and a law firm was hired for legal purposes. In terms of logistics and technical crisis
management, THY actively handled the situation.
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Air France continued using the same website, however, created a new portal which
included all the crash-related information. The portal was in English, Portuguese, and in French.
A group from passenger relatives was taken to Brazil to observe the search and rescue attempts
first hand. Phone lines were established for media and an information center was built for the
passenger families. AF was also prepared in logistic terms.
Coordination of the messages:

Simply put, the messages “were not coordinated by THY” (Taraf, 2009). The CEO of
THY, Temel Kotil, in his initial comments, claimed that there were no casualties and the pilot
did a wonderful job in landing the plane safely (Taraf, 2009) – which came two hours after the
crash. However, 6 minutes after the crash, Dutch media sources started to give feeds to the
public (NOS Journaal, 2009) and within 13 minutes, there were pictures of the crash on Twitter
(NOS Journaal, 2009). During the time span between the accident and THY’s first reaction,
rumors started about the causes of the crash and the number of casualties. Instead of trying to
coordinate the messages, THY started giving different information to the public (NOS Journaal,
2009). With the involvement of Turkish authorities, namely the Minister of Transportation,
Binali Yildirim, and the Prime Minister, Recep Tayyip Erdogan, THY seemed to lose all the
control over the messages. Yildirim’s first press statements were TV interviews where he said “I
am learning about everything with you[press corps]…I don’t know the number of causalities…
Some say seven some say nine…We will see”(Taraf, 2009). In his speech, Mr. Erdo0an said:
“The information I have right now is the phone call I had with my Minister of Transportation and
with Mustafa Bahcecioglu[a personal acquaintance on the flight]…Mr. Bahcecioglu says three
people died and Mr. Yildirim says one.” (NTVMSNBC, 2009a). THY showed another attempt to
coordinate the messages by creating the phone lines and calling a press meeting four hours after
the crash (NOS Journaal, 2009), however, media and the authorities both in Turkey and in
Netherlands continued giving out contradictory information, especially about the number of
deaths and the reason for the crash. For, at least eight hours, THY couldn’t coordinate the
messages. In fact, even weeks after the incident, it is possible to run into contradictory
information about the crash – the number of people on board (134 or 135) and where exactly the
plane crashed (ranging from 1 to 5 kilometers from 18R) on the web and on THY’s corporate
website.
After suffering from lack of action during the first hours of the incident, AF took control
of the situation and started to coordinate all the messages. Although the plane was lost at 01:33
GMT, AF started to consider the situation serious at 07:15 GMT (BBC, 2009). The flight was
not supposed to land until 09:10 GMT, but, the information of a missing plane was already
leaked out. In fact, by 05:25 GMT, Brazilian Air Force started to search for the missing plane.
Starting on with their first press release, which was signed by the CEO Pierre-Henri Gourgeon,
AF took over the control and started sharing all the details with the public. Three major
shortcomings of the organization was their failure in coordinating with the Brazilian authorities,
the French state officials, and the manufacturer Airbus.
Keeping communications privileged:

Despite the fact that the messages were contradictory and the reaction came late, THY
kept communications at the top of its agenda. The phone lines kept working, there was
information on the website and press releases were written. All THY officials were easily
accessible after the crash, responding to the public (CNNTurk, 2009a).
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AF, as well, gave uttermost importance to the communication attempts. The traditional
media resources were kept updated all the time about the progress. AF personnel, the majority of
whom had a crisis communication training (Air France, 2009), were available to help the
passengers’ families in a more collegial way.
Communicating beyond the words:

THY was represented by the CEO and the Chairman (CNNTurk, 2009b). Corporate
website started using a dark background with all the crash information available on the
homepage. Moreover, Minister of Transportation, Director of Civilian Aviation Affairs, Turkey’s
Ambassador in the Hague, Turkish and Dutch Prime Minister were personally involved in the
communication processes (CNNTurk, 2009b). In other words, THY demonstrated its willingness
to clear the ambiguity of the crisis situation. Given contradictory nature of the messages, these
engagements did more damage than benefit to THY.
After the first day, the upper-management of AF disappeared. French government
stopped commenting on the subject. The Brazilian authorities and AF’s press releases were the
only sources of information the public had. Although the information kept coming, words were
not supported by deeds.
Wider understanding of media:

THY suffered from a narrow understanding of media. Their focus was mainly the Turkish
traditional media – newspapers, televisions, radios and news agencies. But in reality, the online
journalists were faster than their traditional colleagues and they managed to reach more audience
(Verkade, 2009). Eksisozluk, a commonly used forum in Turkey, had a few hundred entries
about the accident during the first four hours following the incident. Bloggers were active and
readers were commenting about the crash news on several websites. THY was practically non-
existent in blogosphere or in online media and tried to reach the viral audience via press releases
on the corporate website.
AF’s situation was no different. Given the transatlantic nature of the flight (time
difference between Brazil and France) and 7/24/365 viral media’s ability to disperse messages,
this was AF’s biggest shortcoming. Rumors about a plane crash started going around in Twitter
45 minutes after the radio contact was lost. Twitter and blogosphere had informed the public
about the plane crash two hours prior to the official press release of AF.
Stakeholder communications:
In an aviation accident, it is nearly impossible to identify all the stakeholders involved:
people on board, their families, airport employers, corporation, authorities, general public,
“airline industry” (Ray, 1999, p.1). The list is endless. As discussed above, the passengers and
their families were given the necessary attention, however, THY spent all its remaining time
solely focusing on saving company’s reputation – defending its safety and maintenance
regulations and its cockpit crew (Yenigun, 2009). The biggest flaw in this sense was THY’s
overlooking at the safety concerns of the airline industry. THY operates 51 Boeing 737 and
another 54 is operated by other Turkish airline companies and until Directorate General of
Civilian Aviation issued a circular (SHGM, 2009) on April 6, 2009; none of the parties involved
in the process addressed the public concern about this aircraft model’s safety.
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AF managed its communications with passengers’ families very well. Also, the local
authorities and French government were kept in loop. However, its communication attempts with
the manufacturer and general public were not satisfactory.
Becoming a reliable information resource:

Contradictory information created another crisis situation for THY and its biggest
shareholder, Turkish Government. Although Mr.Yildirim claimed that “there were no
contradictory information” (NTVMSNBC, 2009b) a day after the accident, THY couldn’t
succeed in spreading consistent information and becoming a reliable source. In fact, the updates
about the incident were followed through either Dutch resources (Taraf, 2009; Yenigun, 2009) or
online media (Verkade, 2009) by the public and even by Turkish authorities.
AF’s press releases were the primary information resource. AF never misinformed the
public (CNNTurk, 2009) and as Dominique Bussereau, French Minister of Transportation,
declared no information was shared with the public before it was confirmed in order to avoid
creating fear and sadness. As Klann (2003) argues the importance of the human life in crisis
situation, this approach was one of the main strengths of AF’s crisis communication strategy.
Taking responsibility:
Shortly after the accident, there had been news in the Dutch media, claiming “accidents
happen more frequently with this airline[THY]” (NOS Headlines, 2009). On the other hand
Turkish authorities started blaming the control tower at Schiphol arguing that the accident took
place because of a “wake turbulence/wind shear” as a Boeing 757 landed 2 minutes prior to TK
1951 (Kaya & Gun, 2009). Even before the preliminary reports were released, the cockpit crew
was declared as “heroes who saved many lives” (Yenigun, 2009), and Mr.Yildirim accused
several local and foreign news resources covering the accident for “trying to cast a suspicion on
THY’s success” (NTVMSNBC, 2009b). Considering the fact that the accident was caused by
pilotage and manufacturing error and Boeing revised its regulations for 737 models (SHGM,
2009); all the parties involved were reluctant to take responsibility and started blaming each
other – creating another wave of rumors and unreliable information about the real cause of the
accident.
Readiness to acknowledge uncertainty:

The number of fatalities and causes of the accident remained unclear. Although Mr.
Karlitekin in his initial comments acknowledged this uncertainty by saying that there were “no
fatalities reported yet” (Radikal, 2009), his comment was misunderstood as there was no
causality – which was supported by Mr. Erdogan’s and Mr.Yildirim’s remarks. Two hours after
the crash (12.53pm), THY officially acknowledged the uncertainty and after an hour(1.27pm)
Mr.Yildirim did the same (Gazete Vatan, 2009). However, throughout the day, there were
several rumors and numbers about the casualties. Regarding what caused the accident, THY only
defended the pilots (Yenigun, 2009) and its maintenance regulations (CNNTurk, 2009a).
AF started its public communication attempts by acknowledging uncertainty. The initial
declarations of the CEO, and the French government officials, were in synch and underlined the
fact that the plane was ‘missing’ and urged the public to be ready ‘for the worst case scenario’
(Chrisafis & Tran, 2009). The crash was not made public until the information was confirmed.
The passenger list was published only after the accident news.
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CONCLUSION
Daily Taraf’s (2009) headline summarizes THY’s crisis communication experience after
TK 1951 – “Plane Crashed, Ankara Smashed”. Although, they did a magnificent job in arranging
the transportation of relatives, setting up the phone lines and creating a compensation policy, out
of the eight communication evaluation criteria, THY failed in six, and was found moderately
successful in two. As of now, although the information about the accident is still available
online, it is not reachable through a link on the corporate website. During the following days,
THY decided to block the circulation of newspapers at the Istanbul Airport in order not to
demoralize the passengers. It is neither possible to find any information about a more recent
crisis, a THY plane mistakenly landing at a military base in Georgia, on the corporate website.
In crash management/crisis communication, the importance of human life should be the
underlying theme, therefore, companies should show their involvement not only with words but
also with deeds. Top management should be always accessible for the media. Moreover, the
companies should be aware of the plurality of the actors and try to coordinate the messages
proactively, - including the local governmental authorities. Similarly, all stakeholders should be
identified and prioritize. Instead of competing in crisis communication attempts, airline
companies should seek out to collaborate with other parties involved and should not try to shift
responsibility. On contrary, during a crisis, the companies are expected to acknowledge
uncertainty and be ready to take responsibility. Lastly, given the convoluted nature of today’s
global media and 7/24/365 online media, companies should be ready to deal with the different
perceptions of the crisis in different regions and by different media, and with the effects and
efficiency of online social media.
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Totally Clueless. New Brunswick, NJ: Rutgers University Press, 2008.
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30, 2009 from http://alphasite.airfrance.com/en/s01/press-releases/, 2009.
Aviation Safety Network. ASN Aircraft accident Boeing 737-8F2 TC-JGE Amsterdam-Schiphol
International Airport (AMS).Retrieved on March 21, 2009 from http://aviation-
safety.net/database/record.php?id=20090225-0, 2009.
BBC. Timeline of Flight AF 477.Retrieved June 30, 2009 from
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Chrisafis, A & Tran, M. Air France Plane: ‘No Hope’ of Survivors. Retrieved June 15, 2009from
http://www.guardian.co.uk/world/2009/jun/01/air-france-crash-a330-brazil, 2009.
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220132.htm, 2009a.
775
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Curtin, T. Managing a Crisis: A Practical Guide. New York: Palgrave Macmillan, 2005.
Dutch Safety Board. Persverklaring.Retrieved on March 21, 2009 from
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Gazete Vatan. ‘Çok 3ükür ölümüz yok!' Retrieved April 1, 2009 from
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Hartman, T. Air France Plane Goes Missing Over Atlantic Ocean. Retrieved June 15, 2009 from
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Heifetz, R. Leadership without Easy Answers.Boston, MA: Harvard University Press, 1995.
Henry, R.A.You'd Better Have a Hose If You Want to Put Out the Fire.Windsor, CA:
Gollywobbler Productions, 2000.
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http://avherald.com/h?article=41595ec3&opt=0, 2009.
Jackson, B. & Jamieson, K. T. unSpun: Finding Facts in a World of Disinformation.New York:
Random House Trade Paperbacks, 2008.
Jamieson, K.T. & Waldman, P. The Press Effect.New York: Oxford University Press, 2008.
Kaya, B. & Gun, M. Pilotlar kuleyi suçladı: Kazanın sebebi, öndeki uça0ın türbülansı. Retrieved
on March 21, 2009 from http://www.tumgazeteler.com/?a=4747559, 2009.
Klann, G. Crisis Leadership.Jacksonville, NC: Center for Creative Leadership, 2003.
Linsky, M., and Heifetz, R. Leadership on the Line.Boston: Harvard Business School Press,
2002.
NOS Headlines. Familie Slachtoffers in NL. Retrieved on March 21, 2009 from
http://headlines.nos.nl/forum.php/list_messages/14393, 2009.
NOS Journaal. Tijdlijn vliegtuigongeluk Schiphol.Retrieved on February 28, 2009 from
http://www.nos.nl/nosjournaal/artikelen/2009/2/25/250209_tijdlijn.html, 2009
NTVMSNBC. Erdo0an kazayı de0erlendirdi. Retrieved on February 28, 2009 from
http://www.ntvmsnbc.com/id/24940452/, 2009a
NTVMSNBC. Yıldırım: THY'nin ba3arısını gölgelemek istiyorlar. Retrieved on February 28,
2009, 2009b.
Pauchant, T., & Mitroff, I. Transforming the Crisis-Prone Organization: Preventing Individual,
Organizational, and Environmental Tragedies.San Francisco: Jossey-Bass, 1992.
Radikal. Hollanda'da THY uça0ı yere çakıldı. Retrieved on March 21, 2009 from
http://www.radikal.com.tr/Radikal.aspx?aType=RadikalDetay&ArticleID=923415, 2009.
Ray, S. J. Strategic Communication in Crisis Management: Lessons From the Airline Industry.
Westport, CT: Greenwood Publishing Group, 1992.
Seet, D. “The 7 July 2005 London Bombings: Lessons Learnt in the Area of Communication
Strategies.” Business Research Yearbook,16, (2), 2009, 712 – 720.
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http://shgm.gov.tr/doc3/boeing.pdf, 2009.
Taraf. Uçak dü3tü, Ankara çakıldı. Retrieved on March 21, 2009 from
http://www.taraf.com.tr/haber/28641.htm, 2009.
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Ten Berge, D. The First 24 Hours: A Comprehensive Guide to Successful Crisis
Communications.Oxford: Basil Blackwell, 1990.
THY. Crash Information. Retrieved on April 1, 2009 from
http://www.thy.com/SpecialIssuesEN/crash_info.aspx, 2009.
Verkade, T. Twitter used as fast news service after plane crash. Retrieved April 18, 2009 from
http://www.nrc.nl/international/Features/article2163667.ece/Twitter_used_as_fast_news_
service_after_plane_crash, 2009.
Yenigün. Ölenlerin kimlikleri ailelerine bildirilecek. Retrieved March 21, 2009 from
http://www.gazeteyenigun.com.tr/icerik.asp?page=guncel&nID=53341, 2009.
777
FEMA’S RESPONSE TO HURRICANE KATRINA:
A PUBLIC RELATIONS CASE STUDY
Stephanie Shropshire, The University of Texas at San Antonio

sshropshire11@hotmail.com
Sarah Phinney, The University of Texas at San Antonio

sarahphinney13@yahoo.com
ABSTRACT
Hurricane Katrina was the sixth largest storm ever recorded in the Atlantic and made
landfall on August 29, 2005 in Louisiana. Katrina killed 1800 people, destroyed 300,000 homes,
and put 80 percent of New Orleans underwater. The Federal Emergency Management Agency
(FEMA) has been held accountable for many of the failures during and after the storm. This case
study illustrates how FEMA was held accountable for actions that it had no control over, and
how unpreparedness within the agency caused major reputation damage. The breakdown of
communication between the different levels of government, aid organizations, and the media had
devastating effects on the recovery process and resulted in a significant loss of life among the
residents of New Orleans.
INTRODUCTION
Hurricane Katrina was the sixth largest storm ever recorded in the Atlantic and made
landfall on August 29, 2005 in Louisiana. The storm killed 1800 people, destroyed 300,000
homes and put 80 percent of New Orleans underwater (Shelton & Coleman, 2009). The residents
of New Orleans were especially affected due to their geographical location, and the hurricane
defense systems that were put in place to protect the city. New Orleans is a city mostly below sea
level, surrounded by three bodies of water: the Mississippi River, the Gulf of Mexico, and Lake
Pontchartrain. Engineers developed a system of levees that were supposed to protect the city
from flooding in the event of a category three hurricane. Katrina was reduced to a category four
hurricane by the time it made landfall, but the levees did not do their job and broke, consequently
flooding the most poverty-stricken neighborhoods in New Orleans (“Katrina: What Happened
When”, 2005).
The message about a major hurricane approaching the Louisiana coast was sent out
mainly via the media. Although weather forecasters cannot accurately predict where hurricanes
will land, they can give a generally specific area. While the local and state governments did tell
the residents that they needed to evacuate, many did not. Then FEMA director, Michael Brown,
and Secretary of Homeland Security, Michael Chertoff, both made statements that the residents
of New Orleans knew the dangers of hurricanes, and the impact of natural disasters on their city.
Brown and Chertoff also made statements claiming that the people who did not evacuate chose
to not leave and were therefore ultimately responsible for their demise (Stephens, Hamedani,
Markus, Bergsieker, & Eloud, 2009).
According to Stephens, et al. (2009), there were two distinct groups of people in New
Orleans: leavers and stayers. The leavers were typically Caucasian, middle-class income, well-
educated people who had friends or family they could stay with away from the area affected by
778
Hurricane Katrina. Stayers, on the other hand, were generally African American, low income,
less educated people who did not have anyone they could rely upon outside of the affected area.
Looking at the death tolls from Katrina, most of the victims exactly matched the descriptions of
the stayers. The lower-income residents of New Orleans simply did not have the resources
available to them as compared to the people who could afford to leave. This is not such an
unimaginable concept—many Americans live paycheck to paycheck, and cannot afford to save
money in case there is a natural disaster to help themselves.
PURPOSE OF THIS CASE STUDY
When crises occur, organizations involved with the crises need to act quickly. FEMA has
been held accountable for many of the failures during and after Hurricane Katrina. Research
shows that many of FEMA’s failures were either out of their control, or they did not plan well
enough for the disaster at hand. This case study demonstrates how FEMA was held accountable
for actions it had no control over, and how unpreparedness within FEMA caused major
reputation damage. The breakdown of communication between the different levels of
government, aid organizations, and the media had devastating effects on the recovery process
and resulted in a significant loss of life among the residents of New Orleans.
THE GOVERNMENT’S RESPONSE TO HURRICANE KATRINA
The United States government is designed in a way that no one person can have absolute
power over the people at any given time. When individual states experience a disaster, it is the
responsibility of the governor of that state to ask for help from the federal government. When a
state has formally declared itself in a “state of emergency,” then the federal government takes
control of that state to swiftly offer aid. In the case of Katrina, the governor of Louisiana at that
time, Kathleen Blanco, opted not to ask for federal assistance, which meant that FEMA was not
called for help. According to Crouere (2008), Blanco did not want to declare Louisiana a state of
emergency because she did not want to give control of the National Guard to then President
George W. Bush. While Crouere’s claims are subject to speculation, they would explain why
there was such a slow response from FEMA. Blanco and New Orleans’ Mayor C. Ray Nagin
also came under fire for not ordering a mandatory evacuation until 19 hours before Katrina made
landfall (Harris, Smallen, & Mitchell, 2006). Nagin was criticized because “the city lacked a
coordinated plan to help victims find shelter, and lacked communication infrastructures by which
citizens could request help, and report dire and emerging consequences of the storm’s damage,”
(Waymer & Heath, 2007). Nagin was a pivotal character in the midst of a bad situation. His
order for evacuation only 19 hours before Katrina made landfall sent a message to the residents
of New Orleans: that their mayor did not believe the hurricane was a threat, so neither should
they. A study conducted by Harvard University in 2006 found that “90 percent of the affected
gulf coast population knew about the approach of the storm at least one day before it hit…only
one third of that population did evacuate…two-thirds [of the population] indicated that they did
not think the storm would be that bad,” (Venette, 2008). In previous exercises, FEMA found that
the 19 hours Nagin allowed for the evacuation was less than half the time needed to properly and
safely evacuate the city (“Katrina: What Happened When”, 2005). On Sunday August 28, 2005,
at 8:30 p.m. an empty Amtrak train left New Orleans. An Amtrak spokesperson said that Amtrak
779
had “offered the city the opportunity to take the evacuees out of harm’s way…The city
declined,” (Glasser & Grunwald, 2005).
The federal government received much criticism as well, mostly directed at President
Bush for not sending aid sooner to the people of New Orleans. Bush did not formally address the
situation in New Orleans until September 15, 2005 in an address to the nation. It was this slow
response that prompted people like rapper Kanye West to suggest, “George Bush doesn’t care
about black people,” (CBS News, 2005). Many people agreed with West, saying that the federal
government’s slow response was due to racial issues.
Regardless of the reasoning as to why federal help did not arrive sooner, several Senators
tried to help the people of New Orleans while putting aside party politics. Senator Mary
Landrieu, from Louisiana, and Senator Barack Obama, from Illinois, were looking at the big
picture in regards to the people of Louisiana, and knew they needed to act quickly to obtain
funding to help these citizens. Obama compared Hurricane Katrina to a national security threat,
and reasoned with the Bush administration that if the United States was not prepared “to cope
with a crisis that has been predicted for decades—a crisis in which we’ve been given four or five
days notice—how can we ever hope to respond to a serious terrorist attack,” (Waymer & Heath,
2007). Landrieu focused on getting needed funding to her state. She escorted President Bush on
tours of the devastated areas of New Orleans, and later sent him letters pleading to take
immediate action to help the people affected by Katrina (Waymer & Heath, 2007). Later,
Landrieu sent Bush another letter reminding him of the Stafford Act, in which the President can
extend cash benefits to people who have been left with no financial resources, and the President
can provide emergency assistance without the governor’s consent (National Response Plan,
2004). This would allow Bush to activate FEMA without Governor Blanco’s permission. The
slow response from Bush and Blanco caused a delay for FEMA to be activated, thus causing
communications and transportation to be down, or unavailable.
THE NATIONAL RESPONSE PLAN IN RELATION TO HURRICANE KATRINA
In 1979 the Federal Emergency Management Agency (FEMA) was established to

“prepare for, protect against, respond to, recover from, and mitigate all hazards” (FEMA.gov,
2009). In 2003 FEMA was combined with the Department of Homeland Security in an effort to
make the recovery process more efficient. FEMA’s main purpose is to aid in recovery efforts in
the event of a natural disaster or man-made disaster, such as a terrorist attack. FEMA also works
closely with other relief organizations, such as the Red Cross, to provide assistance to people
affected by a disaster.
When a disaster is eminent, the governor of the affected state must request FEMA’s
services from the President of the United States. Once the request has been made, the President
can activate FEMA through the regional director of the closest FEMA office to the disaster, to
assist that state (National Response Plan, 2004). The National Response plan was created to
coordinate FEMA’s efforts with the Department of Homeland Security. Along with the
Department of Homeland Security, FEMA is the primary agency for “providing technical
assistance, engineering, and construction management resources, and support during response
activities” (National Response Plan, 2004). The primary purpose of the agency is to “provide
recovery resources and support” to areas affected by a disaster (National Response Plan, 2004).
FEMA has many other purposes such as, appointing a staff member to communicate with the
Department of Homeland Security and providing information on telecommunication assets to be
780
used in the affected area (National Response Plan, 2004). FEMA’s responsibilities include:
providing ice and water to the affected area, handling the threat at hand, issuing mission
assignments, deploying special teams, and acting as a communication hub between other
organizations (National Response Plan, 2004).
Tom Ridge, Secretary of the Department of Homeland Security in 2004, wrote the
statement for the Preface of the National Response Plan, describing the importance and
uniqueness of this new plan. The National Response Plan states, “The purpose of the NRP is to
establish a comprehensive, national, all-hazards approach to domestic incident management
across a spectrum of activities including prevention, preparedness, response, and recovery,”
(National Response Plan, 2004). This 426 page document was created to be placed into action
for catastrophic events such as Katrina. Not only did this catastrophic event nearly destroy an
entire city, but it was an important city to America. New Orleans is a major port for the United
States, and an area that is rich in oil. FEMA created a plan that could have changed Katrina’s
impact on our country. The details outlined throughout the plan, if properly executed could have
potentially prevented much of the devastating effects of Hurricane Katrina, including the 1800
lost lives (Caruso, 2005).
THE PUBLIC AFFAIRS SUPPORT ANNEX
The National Response Plan includes a Public Affairs Support Annex that describes the
interagency policies and procedures used to rapidly mobilize federal assets to prepare and deliver
coordinated and sustained messages to the public in response to incidents of national significance
and other major domestic emergencies (National Response Plan, 2004). Every successful
organization should have a crisis management plan that includes details describing all levels of
communication needed to successfully execute the plan. The Homeland Security Presidential
Directive-5 (HSPD-5) created the NRP as an approach to domestic incident management. The
Public Affairs Support Annex describes the communication details for the National Response
Plan. Two problems negatively impacted the Katrina disaster: communication failures and
FEMA’s poor response to Katrina. The following sections explain the different factors that cause
these problems and identify problems correlated with each factor.
COMMUNICATION FAILURES
One of the main problems associated with Katrina was poor communication. This
includes communication through technology and personal interaction. The communication
process outlined in this annex, if executed properly, could have potentially been able to address
and alleviate many of the communication failures during Katrina. The communication problems
were not caused by a poor incident management plan, but by the lack of its execution. The lack
of execution was partly caused by FEMA’s slow response to Katrina. One reason for FEMA’s
slow response was the prolonged time it took for FEMA to be called into action. This is the first
factor associated with communication failures. Since FEMA and Homeland Security are under
the Federal Government, they cannot step in unless the Federal Government’s assistance is
requested by the state.
In order for the NRP to become enacted, a domestic incident has to occur and the
Secretary of Homeland Security declares an incident of national significance. Criteria number
two defined in the National Response Plan, 2004 is, “The resources of state and local authorities
781
are overwhelmed and Federal assistance has been requested by the appropriate State and local
authorities. Examples include: Major disasters or emergencies as defined under the Stafford Act;
and Catastrophic incidents.” By this definition Hurricane Katrina was an Incident of National
Significance. Meaning, the state of Louisiana would not be able to receive aid, and until the
Federal Government’s assistance was requested by the governor of the state or the President
declared a major disaster or emergency. When a state is confronted with a natural disaster, it is
the responsibility of the state’s government officials to take action and control, but the President
can enact the Federal Government by provisions defined under the Stafford Act.
Even if the governor did not request federal disaster and emergency assistance from the
President, the latter could have taken action without the request. In reference to provision b. of
the Stafford Act, the President had the power to enact FEMA since the agency had pre-
positioned its employees in the areas that were affected by Hurricane Katrina. As a result, once
the storm hit there was much confusion among the FEMA employees due to lack of
preparedness.
The Public Affairs Support Annex describes the importance of response time in relation
to communication. The National Response Plan, 2004 states, “Initial Coordination: Establishing
communications paths with participants is a primary objective during the first minutes of plan
activation.” It also states under Actions Relating to Incident Management Components,
Response: “Response processes mitigate the effects of unanticipated problems and facilitate
orderly management of an incident. Response activities for incident communications with the
public include: Rapid mobilization of incident communications resources to prepare and deliver
coordinated and sustained messages according to a well planned strategy.” The prolonged time to
call FEMA into action caused its slow response to Katrina. This prevented the proper execution
of the communication actions outlined in the NRP.
Another factor related to communication failures was the loss of power in different areas
of New Orleans. This caused communication technologies to fail, thus creating communication
problems between organizations, including FEMA. The Public Affairs Support Annex of the
NRP describes systems created to help facilitate communication between appropriate parties.
These systems were created to achieve effective interagency communication to help facilitate the
NRP. Unfortunately, the loss of power in the affected area prevented these systems from taking
place. The Public Affairs Support Annex includes sections to address these issues. Although the
Public Affairs Support Annex includes the possibility of these problems, it does not have a
contingency plan to address the communication failures.
POOR RESPONSE
Transportation was another factor that contributed to FEMA’s poor response to Katrina.
The Public Affairs Support Annex in the National Response Plan, 2004 states under Developing
the Message for Messaging Considerations, “The nature of an incident and restrictions it may
create could inhibit the ability of the Federal, State, local, and tribal incident communications
team to develop a communications strategy and message. This could include loss of
communications or transportation restrictions.” Though a transportation problem is anticipated
there is no reference of how to address this problem, or a contingency plan that could be put into
place. Interstate Ten (IH-10) is the only major highway that goes through New Orleans. Once
Katrina hit, IH-10 was impassable due to sections of the highway being underwater. FEMA
simply could not deliver the supplies and support personnel to New Orleans that the city so
782
desperately needed. Other relief organizations had the same problem. First responders, including
local police and fire departments, had to travel by boat or Jet Ski to reach the stranded residents
of New Orleans. This recovery section in the NRP explains what should have taken place if New
Orleans had been assessable by road. Once again the NRP contains processes and procedures for
actions and anticipated problems when confronted with an incident, but the lack of a contingency
plan causes those actions to become ineffective.
Still another factor that contributed to FEMA’s poor response to Katrina was lack of
experienced personnel to help the people of New Orleans. FEMA was repositioned under the
Department of Homeland Security in 2003. Along with the new department, there were many
structural changes within FEMA. People were appointed to positions that they were not
necessarily trained for. The Public Affairs Support Annex in the National Response Plan, 2004
states, “Risk Communications: Professionals who support this annex should be trained and
conversant in risk communications and employ its major principles during incident
management.” The NRP was successful with recognizing the importance of trained and
experienced personal but did not implement this procedure. One such person was Michael
Brown, who was appointed as FEMA director by President Bush. Brown was heavily criticized
due to his lack of preparedness for Katrina, and his apathetic attitude towards the people needing
help after the storm had made landfall. After public outcry for his inabilities to proficiently
perform his duties as FEMA director, Brown resigned exactly two weeks after Katrina hit
Louisiana.
CONCLUSION
The United States takes pride in its history. We need to learn from this incident to better
prepare ourselves for the future. Remember Obama’s response to Katrina, if the United States
was not prepared “to cope with a crisis that has been predicted for decades—a crisis in which
we’re been given four or five days notice—how can we ever hope to respond to a serious
terrorist attack,” (Waymer & Heath, 2007). The many lives lost, will not be lost in vain if we
learn from the mistakes of Katrina.
REFERECES
CBS News. “Rapper Blasts Bush Over Katrina.” Retrieved October 18, 2009, from
http://www.cbsnews.com/stories/2005/09/03/katrina/main814636.shtml, September 3,
2005.
Caruso, K. “Hurricane Katrina.”Retrieved October 12, 2009, from
http://www.hurricanekatrina.com/, 2005.
Crouere, J. “A Hurricane Tale of Two Governors.” Human Events, 64, (13). 2008. 13-16.
Department of Homeland Security. “National Response Plan” (DHS Publication). Washington,
D.C.: Government Printing Office, 2004.
FEMA. “What We Do.” Retrieved November 10, 2009, from
http://www.fema.gov/about/index.shtm, 2009.
Glasser, S., and Grunwald, M. “The Steady Buildup to a City’s Chaos: Confusion Reigned At
Every Level Of Government.” The Washington Post, September 11, 2005, pp. A.01.
Harris, S., Smallen, J., & Mitchell, C. “Katrina Report Spreads Blame.” National Journal, 38, (7),
2006, 38.
783
“Katrina: What Happened When.” Retrieved November 22, 2009, from
http://www.factcheck.org/article348.html, 2005.
Shelton, J.E., and Coleman, M.N. “After the Storm: How Race, Class, and Immigration
Concerns Influenced Beliefs About the Katrina Evacuees.” Social Science Quarterly, 90,
(3), 2009, 480-496.
Stephens, N.M., Hamedani, M.Y.G., Markus, H.R., Bergsieker, H.B. & Eloud, L. “Why Did
They “Choose” to Stay?: Perspectives of Hurricane Katrina Observers and Survivors.”
Psychological Science, 20, (7), 2009, 878-886.
Venette, S. “Risk as an Inherent Element in the Study of Crisis Communication.” Southern
Communication Journal, 73, (3), 2008, 197-210.
Waymer, D., & Heath, R.L. “Emergent Agents: The Forgotten Publics in Crisis Communication
and Issues Management Research.” Journal of Applied Communication Research, 35, (1),
2007, 88-108.
784
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Performance Measurement of Home Appliances Manufacturing Company by Leanness

Approaching Lean Strategy Map in Auto-Parts Industries

CHAPTER 28: SPIRITUALITY IN ORGANIZATIONS................................................655

Spirituality as an Ethical Action Model

Team Effectiveness: The Turbulent Role of Environmental Turbulence

CHAPTER 29: SPORTS MARKETING............................................................................671

CHAPTER 30: STRATEGIC MANAGEMENT...............................................................677

Capital for Farmland: The Next Wave of Outsourcing

Development of Human And Social Capital Through Industry Peer Networks

Labeling Genetically Engineered Food: A Strategic Perspective

CHAPTER 31: STRATEGIC MARKETING....................................................................711

The Effects of Market Orientation on Commercial Bank Performance

CHAPTER 32: TOURISM, TRAVEL AND HOSPITALITY .........................................729

Does Racial Discrimination Influence Leisure Destination Choice?

The Effect of Discounting on Service Quality and Return Patronage in the