Proceedings of 4th International Conference on ...

Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013)


Proceedings 4th International Conference on Education and Information Management (ICEIM-2013)

Penang, Malaysia 21-22 December, 2013

ISSN: 2307-8588

Organized by

International Foundation for Research and Development (IFRD)


Preface Dear Distinguished Delegates and Guests, The Conference Committee warmly welcomes our distinguished delegates and guests to the 4 th International Conference on Education and Information Management (ICEIM-2013), 2013 held on December 21–22 2013 in Penang. 4th ICEIM-2013 is organized by International Foundation for Research and Development (IFRD). The conference aims at discussing with all of you the wide range of problems encountered in present and future education, technologies and business. The ICEIM-2013 is organized in collaboration with Yildirim Beyazit University, Turkey, Shinawatra International University, Thailand, PERTRE ANDERI of IASI, Romania and National Academy of Management, Ukraine where researchers from around the world presented their work. The conference committee is itself quite diverse and truly international, with membership around the world. The proceeding records the fully refereed papers presented at the conference. The main conference themes and tracks are Education, Information Management, and Business. The conference aims to bring together researchers, scientists, engineers and practitioners to exchange and share their experiences, new ideas and research results about all aspects of the main conference themes and tracks and discuss the practical challenges encountered and the solutions adopted. The main goal of the event is to provide a scientific forum for exchange of new ideas in a number of fields that interact in depth through discussions with their peers from around the world. The conference has solicited and gathered technical research submission related to all aspects of major conference themes and tracks. All the submitted papers have been peer reviewed by the reviewers drawn from the scientific committee, external reviewers and editorial board depending on the subject matter of the paper. Reviewing and initial selection were undertaken electronically. After the rigorous peer-review process, the submitted papers were selected based on originality, significance, and clarity for the purpose of the conference. The conference program is extremely rich, featuring high-impact presentations. The high quality of the program guaranteed by the presence of an unparalleled number of internationally recognized top experts. The conference will therefore be a unique event, where attendees will be able to appreciate the latest results in their field of expertise, and to acquire additional knowledge in other fields. The program has been strutted to favor interactions among attendees coming from many diverse horizons, scientifically, geographically, from academia and from industry. We would like to thank the program chairs, organization staff, and members of the program committee for their work. We are grateful to all those who have contributed to the success of ICEIM-2013 especially our partners. We hope that all participants and other interested readers benefit scientifically from the proceedings and find it stimulating in the process. Finally, we would like to wish you success in your technical presentations and social networking. We hope you have a unique, rewarding and enjoyable time at ICEIM-2013 in Penang. With our warmest regards, Conference Committee December 21–22, 2013 Penang, Malaysia

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4th ICEIM 2013 Conference Committee Conference Chair Dileep Kumar, M., Ph. D., University Utara Malaysia, Malaysia Conference Convener Nek Kamal Yeop Yunus, Ph. D., Univerisiti Pendidikan Sultan Idris, Perak, Malaysia Members Alexandru Trifu, Ph. D., University, Petre Andrei, Iasi, Romania Sisira R. N. Colombage, Ph. D., Monash University, Victoria, Australia John Walsh, Ph. D., Shinawatra International University, Bangkok, Thailand R K Uppal, Ph. D., DAV College, Punjab, India Rishidaw Balkaran, Ph. D., Durban University of Technology, South Africa Ayhan Kapusuzoglu, Ph. D., Yildirim Beyazit University, Turkey Nasina Mat Desa, Ph. D., Universiti Sains Malaysia, Penang, Malaysia M. Saman Dassanayake, Ph. D., University of Colombo, Colombo, Sri Lanka Katalin Jackel, Ph. D., Budapest Business School, Budapest, Hungary Wei-Bin Zhang, Ph. D., Ritsumeikan Asia Pacific University, Japan Susantha Herath, Ph. D., St. Cloud State University, USA Somnath Sen, Ph. D., University of Birmingham, United Kingdom Kevin Feeney, Ph. D., American University in Bulgaria Zulnaidi Yaacob, Ph. D., Universiti Sains Malaysia, Penang, Malaysia Johan de Jager, Ph. D., Tshwane University of Technology, South Africa José G. Vargas-Hernández, Ph. D., University of Guadalajara, Mexico Izah Mohd Tahir, Ph. D., University Sultan Zainal Abidin, Terengganu, Malaysia Chux Gervase Iwu, Ph. D., Cape Peninsula University of Technology, South Africa Ahasanul Haque, Ph. D., International Islamic University Malaysia (IIUM), Malaysia Chandana Prasad Withana, Ph. D., Charles Sturt University, Sydney, Australia Hamdan Said, Ph. D., Universiti Teknologi Malaysia (UTM), Malaysia

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4th International Conference on Education and Information Management (ICEIM-2013)

Table of Contents Description

Pages

Preface Conference Committee Table of Contents Papers Relationship Marketing and Service Quality in Bank Muscat Oman (Sayarati Loans)- Normala S Govindarajo, Brinda Kalyani P R Simulators for Teaching Computer Organization and Architecture: A Brief Survey- P.W.C. Prasad, A. Alasdoon, A.Beg, Anthony Chan Preparation of Principal for School Change: A Singapore Perspective- Babin Pokharel Fraud Risk Factors of Fraud Triangle and the Likelihood of Fraud Occurrence: Evidence from Malaysia- ShabnamFazli Aghghaleh, TakiahMohd. Iskandar ,ZakiahMuhammaddun Mohamed New Sight to Economic Development Progress in Developing Countries- Maryam Jafari Galooyek, Zaleha Mohd Noor Investigation and Design of Mobile OPAC Services (MOS) for Non-Smartphone Users- Hemalata Vasudavan, Muhammad Ibrahim Ravi Lack of Environmental Sustainability in Youth Training at Higher Education- Syed Kaleem Ullah Shah Bukhari, Hamdan Said The Impact of Palm Oil Price on the Malaysian Stock Market Performance- Sabariah Nordin, Norhafiza Nordin, Rusmawati Ismail A Two-Staged Regression-Neural Network Model for Understanding and Predicting the Quality Determinants of E-Government Services in Oman- Sujeet Kumar Sharma, Srikrishna Madhumohan Govindaluri, Radha Krishan Sharma Corporate Governance and Firm Free Cash Flows: Evidence from Malaysia- Razieh Adinehzadeh, Romlah Jaffar The Influence of Technostress and Organizational-Is Related Support on User Satisfaction in Government Organizations: A Proposed Model and Literature Review- Hadziroh Ibrahim, Yusliza Mohd Yusoff The Role of Work Happiness, Job Attitude, and Turnover Intention- Yaowalak Trakulmaykee, Yusliza Mohd-Yusoff Time-Frequency Analysis of Heart Rate Variability for Autonomic Function Assessment ToolN. Aimie-Salleh, M.B. Malarvili How do Higher Education Students Manage Their Digital Footprints Before Finding a Job?Katalin Fehér Time Synchronized High Performing Cluster-Based Routing Algorithm for Wireless Sensor Networks-Huifang DENG, Tingting WANG How do Procurement and Separation relate with Performance Management System among Employees? Testing the Mediating role of ICT Adoption- Abubakar Allumi Nura, Nor Hasni Osman Human Resource Information Systems Technology: A Strategic Knowledge Management tool for Human Resource Management-Krisandra Naicker Loganathan Narayansamy Govender The Management of change in a changing environment – to change or not to change?-Melody Brauns Does Tourism-Led-Growth Valid? Evidence from Heterogeneous Panel Causality in Countries

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1 2 3 5 8 14 19 25 30 38 46 50 57 64 69 75 80 86 91 97 103 110 114

Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) with Different Income-Level-Reza Sherafatian-Jahromi, Mohd Shahwahid Haji Othman An analysis of Malaysian edition of foreign magazine in portraying women issue-Ponmalar N Alagappar, Lavanya Selvaratnam Multimedia Performance Management: The Use of APN Sim-Card System Enhancing Virtual TeleTasking – Perspectives on Tshwane Universities of Technology-Nafta Mokate Lehobye Restraint of Trade: Managerial Vindictiveness on Emerging Small Businesses-Nafta Mokate Lehobye Participant Observation in a case study on Web Design Process of E-retail Website-Rashdan Bin Rashid1, Shahizan Hassan The effects of Malaysian hotels services on customer loyalty-Yousef Keshavarz, HosseinNezakati Empirical Analysis of Foreign Capital Inflows and Economic Growth in Nigeria-Ehigiamusoe, Uyi Kizito The Role of Environmental Dynamism on Outsourcing Performance in Malaysia-Mohamad Ghozali Hassan, Rohani Abdullah, Mohd Rizal Razalli Assessment of Management Effectiveness at Belum Rainforest Resort (BRR), Malaysia; with Special Focus on Process-Mohamad Ghozali Hassan, Shahmir Sivaraj Abdullah, Rohani Abdullah Education, Economic Growth & Poverty Rate in Nigeria: Any Nexus? Ehigiamusoe, Uyi Kizito Patient Perception of health care services : A comparative study-Rashmi Ananth Pai, Jayashree S. Bhat The Influence of Servant Leadership on Organization Culture, Organizational Commitment, Organizational Citizenship Behavior (OCB) and Employees’ Performance (Study of Outstanding Cooperatives in East Java Province, Indonesia)- Wiwiek Harwiki Middle Level Leadership in Chinese Universities in a Time of Change-Jinyu Feng, Xudong Sun Assessing Nigeria’s Journey Towards IFRS Adoption-Bello Usman Baba Awareness and Perception of Muslim Consumers on Non-Food Halal Product-Norafni Farlina Rahim, Zurina Shafii, Syahidawati Shahwan Political Role of Social Media As a field of research and as a field of university level studyDmitry Baluev Effect of Foreign Direct investment Inflows on Economic Growth: A GMM ApproachMohammad Karimi Analyzing Shari’ah audit implementation: post - Shari’ah Governance Framework requirement-Nawal Kasim, Zurina Shafii, Ahmad Zainal Abidin Multiprotocol Label Switching in Vehicular Ad hoc Network for QoS-Kashif Naseer Qureshi, Abdul Hanan Abdullah Managing mixed responsibilities: A grounded theory of Malaysian tax auditors’ dispute resolution behaviour in audit settlement-Izlawanie Muhammad Absence of the SECI model in higher education system-Leili Shakeri, Shadiya Mohammed S. Baqutayan, NkemOkpa Obaji A study on small and medium enterprises awareness and practices of pre-development implementation-Noor Hidayah Abu, Baba Md Deros, Dzuraidah Abd Wahab, Mohd Nizam Ab Rahman, Mohd Fitri Mansor Temporal Processing Abilities in Bilingual Education Children-Muthu Raj P, Jinu Jacob Exploring The Causes and Effectsof Oversupply Materials Through MRP: A General ReviewSanthirasegaran Nadarajan, Sitraselvi.Chandren, MohdNasrun.MohdNawi Buyer differences in supplier development program implementation with local suppliers: Case study in the Malaysian automotive industry-Kadzrina Abdul Kadir, Hassan Ali Green Enivironment Awareness Module to enhance Responsibiility and Sensitivity towards the Environment-Rose Amnah Abd Rauf, Mohamad Sattar Rasul Personality Type and Job Satisfaction among Managers and Staff in Islamic Azad University of Neyshabour, Iran-Davood Kaveh, Hasan Ghaffari

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119 126 132 136 141 145 155 159 164 171 174 181 187 194 202 206 214 219 223 231 234 239 241 245 250 253

Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Multi Criteria Decision Making: A case of Locating Low Cost Carrier Terminal (Air) In MalaysiaNizamuddin B. Zainuddin. Dayang Shalbia A. Ghani, Adam Mohd Saifudin Turnover Intention Among Electrical and Electronics Sub-sector Employees in Malaysia. Job Characteristics Perspective- Nizamuddin B. Zainuddin. Nik Norsyamimi bt. Mad Nor , Husna bt. Johari Warehouse Layout and Efficiency in small and medium Enterprises (SMEs): a Management Information System Perspective-Adam Mohd Saifudin, Nizamuddin Zainuddin, Santhirasegaran a/l S.R Nadarajan Occupational Stressors, Health and Individual Productivity Links: Evidence from Sobel TestZafir Mohd Makhbul, Sheikh Muhamad Hizam Sheikh Khairuddin Signaling Effects of Dividend Announcements, Evidence from Middle Eastern countriesAbdorreza Asadi, Shamsher Mohamad Improving Estimation of Value at Risk Calculations by Using Copulas-Ahmad Zendehdel, Hasan Sadeghi, Samaneh Ehyaei Heuristic Evaluation of Children’s Authoring Tool for Game Making-LailiFarhanaMd Ibharim, MaizatulHayatiMohamad Yatim Depression and Internet use in a sample of Malaysian undergraduate students-Lu Xi, Yeo Kee Jiar Trade Liberalization and Government Tax Revenue in Selected Developing CountriesMohammad Karimi, ShiveeRanjanee A/P Kaliappan You Are Kind, You Are Smart, You Are Important: The Linkages between Individual Factors and the Intention to Repatriate Among Malaysian Self-Initiated Expatriates-Siti Fatimah, Yusliza, Lilis Surienty High Commitment Human Resource Management Practices and Employee Outcomes, HR Attribution Theory and a Proposed Model in the Context of Bangladesh-Yusliza Mohd. Yusoff, Nadia Newaz Rimi Building key competencies in Malaysia-Govindan Marthandan, Wan Fadzilah Wan Yusoff Facebook as educational tool: an alternative to LMS in the developing countries-Mahbub Hasan New Research Agenda: Strategic Green Human Resource Management and SustainabilityYusliza Mohd-Yusoff, Azlan Amran, Yudi Fernando, T. Ramayah, Lilis Surienty The Acceptance of the i-NILAM System by Librarian Media Teacher-Nor Azah Mansor, Nor Hasbiah Ubaidullah, Ramlah Mailok Developing Social Capital Indicators for Malaysian Society: some Findings from a Pilot studyAhmad Shukri Abdul Hamid, Noor Azizah Ahmad, Najib Ahmad Marzuki, Mohd Sobhi Ishak A Review on Technique in Managing Oil Palm Plantation Towards a Digitilized Online 3D Application-Ruzinoor Che Mat, Abdul Nasir Zulkifli, Norani Nordin, Shahrul Azmi Mohd Yusof Pedagogical Challenges to and Opportunities of Service-Learning: A Critical Review of Literature-Hamdan Said, Iqbal Ahmad Effect of Community Participation in Education on Quality of Education: Evidence from a Developing Context-Iqbal Ahmad, Hamdan Said Social Support for Child Abuse Cases in Institutional Care-Abdul Razak Abd Manaf, NorlizaMokhtar A Study on the Element of Sentiment toward Knowledge Sharing among Knowledge Workers in a Virtual CoP-Ng Chuee Leng, Siew Hoong Angela Lee, Tong-Ming Lim A Study on the Knowledge Implementation Strategy and its influence on the Knowledge Sharing Attitude among Knowledge Workers and Individual Job Performance-Tong-Ming Lim, Siew Hoong, Angela Lee A Study on Knowledge Quality and Job Performance of Knowledge Workers by Analyzing Content of Social Network Sites Using Sentiment Network Analysis-Tong-Ming Lim, Siew Hoong Angela Lee, Renn Aun Justin Lim A Case Study of Academics’ Knowledge Sharing Motivations at Malaysian Public Academic

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258 265 276 283 295 308 314 319 326 329 336 343 347 352 357 361 368 373 378 383 387 392 401 405

Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Institutions-Alsaleh Saad, Haryani Haron Fixing Variables on Entrepreneurial Orientation among Indonesian Business Graduates through Delphi Technique-Muh.Amsal. Sahban, Dileep Kumar, Subramaniam Sri Ramalu Factors Related to Entrepreneurial Incubation Centers Model Verification through Delphi Technique-Muh. Amsal. Sahban, Dileep Kumar, Subramaniam Sri Ramalu Using web based learning to enhance non-routine problem solving skills in primary school mathematics, Anesh Singh, Ramu Naidoo Business Opportunities and Managerial Skills in Enhancing the Involvement of Entrepreneurship in Malaysia-Abdul Jumaat Bin Mahajar, Jasmani Mohd Yunus, Ahmad Zainal Abidin Bin Abd Razak Primary school teachers Mathematics Anxiety and Mathematical Logical thinking -Anesh Singh, R. Naidoo Women’s Position in Decision-Making onFamily Planning and Reproductive Matters: From Malaysian Perspective-A. M. Sultana, Norhafiza Mohd Hed, Fauziah Che Leh Enriching Learning Experience through Literature Circles-Tina Abdullah, Norhanim Abdul Samat, Wan Zarina Wan Zakaria The Relationship using High Technology and the Success of Entrepreneurs in Malaysia-Jasmani Binti Mohd Yunus, Abdul Jumaat Bin Mahajar, Nek Kamal Bin Yeop Yunus The research for students study programming logic: Using the Scartch- Wei-Yu Chen, ShingHan Li, Chung-Chiang Hu

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4th International Conference on Education and Information Management (ICEIM-2013)

PAPERS

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Relationship Marketing and Service Quality in Bank Muscat Oman (Sayarati Loans) *Normala

S Govindarajo1, Brinda Kalyani P R2 Utara Malaysia, Sintok, Kedah 2Rustaq College of Applied Sciences, Sultanate of Oman *[email protected] 1Universiti

Abstract: Sultanate of Oman is one of the prominent GCC Countries with a population of around 3 million. With assets worth over USD 15 billion, Bank Muscat (SAOG) is the leading financial services provider in Oman with a strong presence in Corporate Banking, Retail Banking, Investment Banking, Treasury, Private Banking and Asset Management. This paper looks into the “RELATIONSHIP MARKETING AND SERVICE QUALITY IN BANK MUSCAT OMAN (Sayaratti Loans)”. The quality of customer service is the key indicator of the performance of the different branches of the Bank. Banks in the current scenario is increasingly showing its interest in satisfying a customer wants. Given the profit figures on board as targets Banks need to also look into the special needs of the customer’s perspective, any lacuna in service quality to be looked into seriously. The car loans popularly known as Sayaratti loans are taken as the product for study. The findings of the study say that there is a significant relationship between the age and the overall customer satisfaction levels and there is no significant relationship between the age and the service quality by the bank. Keywords: Relationship management, Service quality, customer expectations, Sayaratti Loans, Oman Banking System 1. Introduction In the name of Allah, the most merciful: (2:275) “those who charge usury are in the same position as those controlled by the devil’s influence. This is because they claim that usury is the same as commerce. However god permits commerce, and prohibits usury. Thus whoever needs this commandment from his load, and refrains from usury, he may keep his past earnings and his judgment rests with god. As for those who persist in usury, they incur hell, wherein they abide forever.” Thus the Quran forbid excessive or exorbitant interest (Riba). Still Banks have to function with the income from Interest and relationship marketing is of paramount importance in any Banking Organization. All commercial banks and the foreign banks have their profit boards on targets; alongside customer satisfaction and service quality play a vital role in achievement of these targets. Among the GCC Countries Sultanate of Oman occupies an important place and in Oman, Bank Muscat (SAOG) is the leading financial services provider with a strong presence in Corporate Banking, Retail Banking, Investment Banking, Treasury, Private Banking and Asset Management. Firmly positioned to exceed one million satisfied customers in 2013, the Bank has the largest network of 126 branches, 371 ATMs, 116 CDMs (Cash Deposit Machines) and 4500 Point of Sale terminals. It plays a major role in the Capital Market functioning in Oman. Banking sector is undergoing a rapid change and Oman is forerunner in the same. Banking sector has become too competitive with the advent of tech-savvy private banks and the expansion of foreign banks. In Oman the major players in the corporate world have directly started approaching capital markets for their capital requirements without approaching the bank finance. With this trend in vogue banks have introduced customer friendly measures like 24 hour banking, anywhere anytime banking, Internet Banking, extended business hours, ATM Network, mobile banking and many more. Rust et al. (1994) states that understanding satisfaction is necessary for managing SQ effectively. 2. Literature Review Relationship Marketing: According to Kotler (2000) building relationships with clients help marketers to better understand and satisfy clients. Walsh et al.(2004,p 469) define relationship marketing as “the activities carried out by banks in order to attract, interact with and retain more profitable of high net worth customers.” Gunal (2012) found that there was no significant differences were found between the segments on customer’s evaluations of the service relationship or their loyalty towards the bank. Relationship marketing develops marketing productivity (Anahita et.al, 2011) and builds up mutual values for customers and sellers by creating effective and long lasting relationships. Their study evaluated the impact of customers’ perceived service quality on relationship commitment, relationship satisfaction and trusts as relationship marketing orientations and then examines the influence of these dimensions on customers’ buying behavior on results showed significant relationships between customers’ perceived service quality as independent variable and relationship satisfaction and trust as dependent variables. Rootman (2011) revealed that significant positive relationships existed between six of the seven independent variables, such as communication, personalization, empowerment, ethics, fees and technology, and bank’s relationship marketing. Gilaninia (2011) investigated the relationship marketing in the private banks and public banks and found that close relationship exists between bank employee and customer and also the market conditions are the most important indexes of bank in providing services to customers. Rootman, M.Tait and Sharp (2011) stated that banking industries are very competitive, and banks are facing service delivery challenges. Relationship marketing is a strategy for building and maintaining relationships with clients, and customer retention is important for the bank as it refers to the maintaining of profitable banking clients. The study resulted in a conceptual model that could be used in future relationship marketing research. Uppal (2009) made a study on customer service and inferred that there is a significant difference among three bank groups with regard to the time customers have to spend to transact a business and found that e banks are more efficient with regard to time factor. Quality management system: The benefits of a good quality management system to increase productivity, reduction in error rates, cost savings, increased customer satisfaction and becoming a leading banker. ISO 9000 standard fits the banking environment and perceived a suitable tool for an efficient bank management. About Sultanate of Oman: Oman is a vast desert land with deserts plains and mountains. The capital city is Muscat with many Regions in its Sultanate. It is one of the predominant members of the GCC Countries and has a stable economy. Ruled by His Majesty Qaboos bin Said Al Said Oman has achieved an unbeatable position in the world economy. Oman, is dominated by trade. The more traditional exports

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) of the city include dates, mother of pearl, frankincense and fish. Many of the souks of old Muscat and Muttrah sell these items and traditional Omani artifacts. The Sultanate is divided into six regions namely Al Dakhliyah, Batinah, Al Wasta, Sharquiya and Zahirah. In this paper the Al Dahirah Region is taken as the area of study which consists of 3 wilayats Ibri, Yanqul and Dank. It has 3 Governorates as well viz., Muscat, Musandam, Dhofar and Buraimi. Banking System in Oman: The banking sector is an important factor in maintaining financial equilibrium and economic stability. The Omani banking sector, which comprises the Central Bank of Oman (CBO) and various commercial and specialized banks operating in the Sultanate, is stable, highly efficient and able to respond to regional and international developments. The commercial Banks in Oman include Bank Dhofar , Bank Muscat SAOG, National Bank of Oman SAOG (NBO), Oman Arab Bank SAOC, Oman International Bank SAOG and the foreign banks operating in the country are Bank of Baroda, Banque Banorabe, Barclays Bank, Citibank, HSBC, National Bank of Abu Dhabi, Standard Chartered Bank. Bank Muscat: With assets worth over USD 15 billion, Bank Muscat (SAOG) is the leading financial services provider in Oman and is one of the leading Banks in giving importance to customer relationship management. About Ibri & Bank Muscat: Ibri is one of the oldest towns in the Sultanate of Oman. It was once a centre for trade, art, religion, education and culture. It is surrounded by the mountains. Ibri is known as the agricultural village. It is graded as Wilayat and has six main areas which are Al Araqui, Sulaif, Souk, Hawas, Ibri city and Murtafa. New houses are coming up on the western part of the town. Ibri being the growing city has a population of around 1,01,640 persons. Development of the city has been marked by the connection to Muscat via a two lane highway which has increased tourism. Ibri economy is based on agricultural products and nearly 20% of oil and gas exports of Oman have been extracted from in and around Ibri. Statement of The Problem: The advent of technology is present in all fields and banking sector is no exception. Customer has the facility to do banking from home. With the present day advent of technology and cut throat competition banks have to concentrate deeply in service satisfaction and service quality which would satisfy his customer so as not to switch over to another Bank. Service quality and customer relationship can be best studied if done in connection with a particular product of the Bank. Bank Muscat offers many products like Baituna home loans, educational loans, overdraft facility, personal loans and Sayaratti car loans. Since car loans are very popular among both nationals and expatriates that is chosen as the product for analyzing customer satisfaction and service quality. With this background in mind an attempt is made by the Authors to look into the service quality and relationship management of Bank under the title “Relationship Marketing And Service Quality In Bank Muscat Oman (Sayarati Loans)” Scope of the Study: Sultanate of Oman has Central Bank Of Oman as its central bank and commercial banks and foreign banks functioning in the country. Among the commercial banks Bank Muscat is a great performer and location of study is confined to the IBRI Region since studying the customer satisfaction in the whole country is far out of reach. They propagate ‘high-touch’ factor through ‘hightech’ factor for the customer. Objectives of the study: The following are the main objectives of the study: 1. To state the profile of the customers in Bank Muscat, Ibri. 2. To explore what factors determine the perception of customer satisfaction. 3. To examine the service quality as perceived by the customers of the Bank’s Sayaratti loans to customers. 4. To evaluate whether gender plays a role in the satisfaction about Sayaratti car loans. Hypothesis 1. There is a significant difference between gender of the respondents and their service quality about Sayaratti Car Loans. 2. There is a significant relationship between the Age and their level of satisfaction in terms of satisfaction Sayaratti Car Loans. 3. There is a significant difference between gender of the respondents and their benefits. 3. Methodology Population Reason for choosing Bank Muscat as area of Study: Bank Muscat offers a complete range of retail and personal banking products and services through its network of 127 branches across the length and breadth of Oman. A thorough understanding of customer needs has helped Bank Muscat to successfully develop flexible and customized products to meet them. They promise a banking service that is flexible enough to tailor-make a product suite to take care of the customer’s specific banking needs. Their objective is to offer excellent value to customers by providing knowledgeable, efficient and reliable services in a personal, helpful and responsive manner. This statement in the consumer banking division by Bank Muscat has instigated the Authors to choose Bank Muscat as area of study. Reason for choosing Ibri as area of Study: Ibri is a fast growing second line city in Oman apart from the developed cities of Oman like Muscat, Nizwa and Salalah. The city is closer in vicinity to Dubai and Saudi. Dubai as well as Saudi has well set car loans disbursements and the best influence if any could be cast only in this city of Oman. There is a huge floating population between Dubai and Ibri since it is enroute Saudi and UAE. Therefore Ibri has been chosen as the area of study Research Design: The research design is empirical in nature since the study is conducted using both analytical and diagnostic type of research. Personal interviewing method was adopted to collect the primary data. The secondary data were collected from the website, Wilayat of Ibri region and Bank Muscat branches of Ibri region.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Sampling Design: Customers have been chosen as the samples because new system, products, and services of Banks are evolved based only on the customer requirements. Therefore the customers of Oman felt the necessity of car loans for buying new cars. Relationship banking also reveals the customer request for this product of the Bank. Therefore the authors have chosen customers of Bank Muscat as the samples for studying the customer relationship and service satisfaction .with regard to Sayaratti car loans.The universe of the study is based on the list of customers given by Bank Muscat Ibri branches. From the list of customers those who have availed Sayaratti car loans are drawn out and from them samples are being drawn. Stratified random sampling has been adopted. 250 customers have been taken as sample by the application of stratified random sampling techniques. The total number customers in Bank Muscat Ibri are 28,130. Every branch is considered as strata and sample customers are chosen at random from each branch. Stratified random sampling was adopted dividing Bank Muscat in to 6 branches and then randomly customer samples were chosen as below. Table 1: Stratified Random Sampling in proportion to Population Place Branch Total Customers Ibri

Jubail 11,950 Souk 1,250 Al Araqui 2,000 Dreez 11,620 Sulaif 825 Al Hayal 485 Total 28,130 Source: From the respective branches of Bank Muscat Ibri

Sample Customers of car loans 126 8 17 91 5 3 250

Tools of data collection: The study considered following tools for data collection  Questionnaire on demographic profile.  Questionnaire on customer relationship and service quality.  Questionnaire on Sayaratti Car Loans. Data collection and Processing: After the completion of data collection, the filled up questionnaires were streamlined properly. A master table was prepared to sum up all the information contained in the questionnaire. With the help of the master table, classification tables were prepared and then classification tables were directly taken for analysis. Percentage of Analysis, level of Agreement techniques ranking methods are taken as tools of analysis. Chi square analysis, and Mann Whitney test, have also been done and interpretation drawn. Analysis and Interpretation of data: Simple percentage analysis is done to look into the demographic factors of the data of customers. Chi- square test was used to analyze the association of demographic variables and service satisfaction, Kuskal Wallis test evaluates if the population medians on a dependent variable are the same across all levels of a factor, and Mann Whitney test assess if one of two samples of independent tend to have larger values than the other. Operational definitions 1. 2. 3. 4. 5. 6.

Bonding: The caring, personal attention provided to customer. The welcoming smile that a customer gets from the banker on his arrival at the bank can be considered as bonding. Reliability (trust): Customer relies on the bank when his work is accomplished on the given time deadlines and up to his satisfaction. Responsiveness: The willingness of the banker to help the customers on their arrival at the banks. Reciprocity: Mutual exchange of privileges by both the parties. Assurance: The knowledge and work of the employees and their ability to convey trust and confidence. Shared values: The common value system, social commitment etc.,

Demographic factors 1. 2. 3. 4. 5. 6. 7.

Age of the respondents: The age of the respondents who have accounts with Bank Muscat. Gender of the respondents: The gender of the respondents whether they are male, or female. Educational qualification: The educational qualification where they are undergraduates, graduates, post graduates, or those who have no formal education. Job status: The job status of respondents whether they are salaried class, unemployed or agriculturists. Earnings: The respondents are divided into various income groups. Nationality: The nationality of the respondents whether they are Omanis, expatriates etc., Service Quality: Service quality is measured in terms of trust, responsiveness, ambience, and assurance.

Profile of the Bank Muscat Customers: The first objective of the study is to study the profile of the Bank Muscat customers who have been chosen as respondents. The Profile has been studied based on age, gender, education, job status, earnings and nationality. Age: The majority of the respondents that is 40% belong to the age group of 35-45 followed by the age group of 25-35 around 30.8% Gender: The majority of the respondents are Male that is 58.9%. The female respondents were 41.1% Educational Qualification: The majority of the Respondents that is 20.3% are Graduates. 18.6% are post graduates. But 16.1% of the respondents have no formal education.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Based on Job status: Classification has also been done based on their employment status. Study is conducted on the respondents as to they are salaried, or run own business or are agriculturist. Since 74 Respondents did not belong to any of the following group they are not included in the classification. Majority of the respondents i.e 37.9% belong to salaried class, and 35.4% are running own Business. 26.7% have their own agricultural land and do agriculture. Earnings: The respondents have been normally distributed among all the classes of earning with out many variations. Majority of the respondents i.e 22.8% belonged to below 500 RO per month. 22.5% belonged to 1000-1500 RO earnings per month. Nationality: The majority of the respondents who was chosen for study i.e 41.1% is Expatriates who belonged to other countries excluding the GCC. Hypothesis Testing: Ha: There is a significant difference in overall customer service quality between the gender and their overall service quality. Ho: There is no significant difference between gender of the respondents and their overall service quality. Table 2: Association Between Gender and Customer Service Quality Gender Mean S.D 1 Trust Male(n = 192) 16.89 3.204 Female (n=58) 17.81 2.775

Statistical Inference T=-1.973 0.050>0.05 Significant

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Responsiveness Male(n = 192) Female (n=58)

21.67 22.05

3.312 3.114

3

Assurance Male(n = 192) Female (n=58)

T=-0.787 0.432>0.05 Not Significant

14.28 14.34

2.341 2.252

4

Ambience Male(n = 192) Female(n=58)


44.40 44.93

6.016 5.081

Overall customer service quality Male(n = 12) Female (n=58)

T=-0.614 0.540 >0.05 Not Significant

97.23 99.14

13.049 11.449


5

Df= 248 Finding: The above table shows that there is no significant difference between gender of the respondents and their overall customer service quality. Hence, the calculated value is greater than the table value (0.317>0.05). So the research hypothesis is rejected and the null hypothesis that is there is no significant difference between gender of the respondents and their overall customer service quality is accepted. There is a significant relationship between the Age and their level of satisfaction in terms of satisfaction Sayaratti Car Loans. Research Hypothesis: There is a significant relationship between the Age and their level of satisfaction in terms of satisfaction of Sayaratti Car loans. Null Hypothesis: There is no significant relationship between the age and their level of satisfaction in terms of satisfaction of Sayaratti Car loans. Age of the respondent is an independent variable that influences the Respondent’s satisfaction in terms of performance of car loans. Respondents belonging to different age groups will be having different levels of satisfaction in terms of performance. Hence, an attempt has been made by the Authors to analyze whether there is any significant relationship between the Age and their level of satisfaction in terms of performance of Sayaratti Car Loans. For this purpose, a two-way table has been prepared. Table below shows the age wise classification of the Respondents and their level of satisfaction in terms of performance. Table 3: Age and Level of Satisfaction in Terms of Performance Age Level of Satisfaction in Terms of Performance

Total

High

Medium

Low

Below 25 years

14

4

20

38

25-35 years

3

34

24

61

35-45 years

18

56

33

107

Above 45 years

11

16

17

44

Total

46

110

94

250

11

Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) The table shows the number of Respondents with a high, medium and low level of satisfaction in terms of performance. In order to test whether there is any significant relationship between age and level of satisfaction in terms of performance, Chi-square test has been applied. The hypothesis is REJECTED since calculated value is less than Table Value. Calculated Value of X2 = 0.67 Table value of X2 at 5% level of df = 5.991 RESULT = 0.67 0.05), documentation procedure length (0.671 > 0.05), monthly installment being low (0.491 > 0.05), tailor made services (0.757 > 0.05) and customer wait time (0.752 > 0.05). Hence the calculated value is greater than the table value. So the research hypothesis is rejected and Null Hypothesis is accepted. There is no significant difference between gender of the respondents and their benefits namely immediate disbursement of loans, documentation procedure length, monthly installment being low, tailor made services and customer wait time. Discussion: The Sayaratti loans of Bank Muscat are the most popular car loans in Oman. They help the customers to buy a new car which is a necessary accessory for both nationals ad expatriates in the country. There is scarce public transport available in all parts of the country and with a huge expatriate population’s presence car loans are highly on the chasing list of the people. Bank Muscat being the pioneer in the Industry have tech- savvy means of disbursements and loan tracking methods. Customer relationship management is paramount importance to any banking concern and so in our present study it is found that there is no significant difference between gender of the respondents and their overall customer service quality. This is supported by the study carried out by Chantal Rootman (2011) which revealed that significant positive relationships existed between six of the seven independent variables, such as communication, personalization, empowerment, ethics, fees and technology, and bank’s relationship marketing. This concludes that customer relationship is more important than any other activity in Banking Industry since profit boards can be achieved only through customer service satisfaction. The present study also found that there is no significant relationship between the Age and their level of satisfaction in terms of performance of the Sayaratti car loans. This goes hand in hand with the findings of Rootman and Sharp (2011) who stated that banking industries are very competitive, and banks are facing service delivery challenges. Relationship marketing is a strategy for building and maintaining relationships with clients, and customer retention is important for bank as

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) it refers to the maintaining of profitable banking clients. The study resulted in a conceptual model that could be used in future relationship marketing research. Therefore the Banks are keen in satisfying all age group customers irrespective of their credit limits also. Gilaninia (2011) investigated the relationship marketing in the private banks and public banks and found that a close relationship exists between bank employee and customer and also the market conditions are the most important indexes of bank in providing services to customers. The same view is supported by the present study and it is proved that there is no significant difference between gender of the respondents and their benefits namely immediate disbursement of loans, documentation procedure length, monthly installment being low, tailor made services and customer wait time. The Banker considers various aspects of satisfaction levels of the customer and seeks to satisfy his particular needs. Implications: The discussion clearly states that there is no significant difference between gender of respondents and the Bank’s overall service qulity. It also proves that age and satisfaction levels have no significant relationship as well. Even the gender has no significant relationship witht the benefits received. Therefore the implications of the study are the demographic components of the profile of the repsondents do not have much influence on the customer relationship and the service quality. In other words, Banks have developed a system which aims at serving a customer better, irrespective of his gender and age. The other demographic factors were not tested in the present study and therefore inferences are not drawn. A banker can survive in the field only with his excellent service quality and relationship management skills. Suggestions Suggestions of the Study: The following are the suggestions of the study when looked at from various angles of the stakeholders. Suggestion by the Respondents: Sayaratti car loans are known for its fast disbursements but loan interest is burdening them to an extent. It uses tech savy methods and the direct debits do not allow them to be flexible in payments. Suggestions by the Bank Employees: The increased high tech service of Banks is for the high touch service the Banks are aiming at for the customers. If they are not using it then the purpose and money spent on that is underutilized. With all cautions mentioned customers are requested to avail the services. Suggestion by the Authors: Though the transactions and the services in Sayaratti car loans are time consuming it helps the salaried class to own a new car. The hidden costs in the transactions need to be reduced to increase the satisfaction levels and service quality. Loan disbursement is a herculean task for the Banker since it needs scrutiny at various levels about the customer’s credibility which is a sneaky task to complete. Limitations of the Study: Since the study was conducted only in Ibri Region, omitting other places of Oman, the results obtained are just generic and cannot be applied to the whole of Oman. 4. Conclusion The topic of customer satisfaction and service quality is very sensitive and vulnerable to be discussed in this part of the World since it is governed by Islamic Religion, Values and Culture. It was not easy for the authors to look into deeply – the real reasons for dissatisfaction and what extra service to be offered for customer satisfaction in Oman because of its sensitive nature. Disbursement of loans again is a risky task since repayment is assured only with the salaried class and proper scrutiny need to be carried out at various levels before doing the same. There exists a cut throat competition among the banks and getting the data was next to impossible. The respondents who belonged to Oman refused to answer many of the questions which lead the authors to choose judgment sampling at a particular point of time. The study finally revealed that the customers are satisfied with the service quality of Bank Muscat as far as Car Loans are concerned. References Anahita, B. H., Chavoshb, A., Choshalyc, S. H., Salehid. M. & Pourabedin, Z. (2011). The Influence of Perceived Service Quality on Relationship Marketing Orientations and Customer’s Buying Behavior in B2C Relationship from the customer perspective. International Conference on Economics and Finance Research, IPEDR, 4. IACSIT Press, Singapore. 208212. Rootman, C. (2011). An International Comparitive study on the relationship marketing and customer retention of retail banks: lessons for South Africa. Thesis submitted in Faculty of Business Sciences at Nelson Mandela Metropolitan University. Once, G. (2012). Service Marketing in Banking sector and recent perceptions in marketing thoughts of services. Dokuz Eylul University, Faculty of Economics and Business, Marketing Department. Kotler, P. & Armstrong. G. (2000). Principles of Marketing 8th Edition, Prentice Hall, Englewood Cliffs,NJ. Rootman, C., Tait, M. & Sharp, G .(2011). Relationship Maketing and customer retention lessons for South African Banks. Southern African Business Review, 15(3), 185-206. Rust, R. & Oliver, R. (1994). Service Quality Insights and Managerial Implications from Frontier, new directions in theory and practice. London: Sage Gilaninia, S. (2011). Comparitive study of Relationship marketing in Public and Private banks. Interdisciplinary Journal of contemperory research in Business, 3(8), 508-514. Uppal, R. K. (2009). Customer Service in Commercial Banks an Empirical study. Asia pacific journal of social sciences, 1(1), 127-141 Walsh, S., Gilmore, A. & Carson, D. (2004). Managing and implementing simultaneous transaction and relationship marketing. International Journal of Bank Markting, 22(7), 468-483.

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Simulators for Teaching Computer Organization and Architecture – A Brief Survey P.W.C. Prasad1, A. Alasdoon1, A.Beg2, *Anthony Chan3 1Charles Sturt University, Sydney, NSW Australia 2University of Arab Emirates, Al Ain, UAE 3Charles Sturt University, Wagga Wagga, NSW Australia *[email protected] Abstract: Computer architecture is an essential topic in the computer science curriculum. A major problem in teaching computer architecture and organization courses is how to help students connect their theoretical knowledge with the practical experience. Many useful computer programs are available that can help overcome this issue and can cover various aspects of Computer architecture. The programs range from simple simulators to specific teaching tools to advanced and specialized software. This paper presents a recent survey of such design tools that can be used for teaching purposes. Keywords: Computer Architecture, Computer Organization, Simulator, Hardware Trainer Kit 1. Introduction Computer organization and computer architecture are very closely related. Computer organization focuses on how operational attributes are linked together and contributes to realization of architectural specifications, whereas computer architecture focuses on the architectural attributes like physical memory addresses, microprocessor and how they should coordinate with each other while keeping the computing demands and goals in mind. Computer architecture is a major subject taught in undergraduate computer engineering, computer science and electronic and electrical engineering courses (El-Din & Krad, 2011). In many universities, computer architecture subject builds upon foundations taught in a computer organization course. Computer organization and architecture involve many abstract concepts for an undergraduate beginner. Today, most students start undergraduate courses having already been in contact with computers as users, which was hardly true some two decades ago. Consequently, they see the computing devices (for example, laptop and tablet PCs, and smart phones) in a preconceived way, i.e., as a tool useful for tasks such as Internet browsing or text-messaging. Teaching the computer architecture and organization courses for computer science, computer engineering, and electrical engineering students in a conventional way is inefficient and insufficient if the teaching methods focus only on the theoretical aspects (El-Din & Krad, 2011; Siddiqul, Khan, & Akhtar, 2008). A major problem in teaching the courses is how to help students make the reasoning that connects their theoretical knowledge with practical experience (Cassells, 2007; Yehezkel, Yurcik, Pearson, & Armstrong, 2001). In general, students learn the best when they take an active role in their learning. The students who sit passively in lecture courses, often not paying attention to what is being taught, will have great difficulty learning the material (Carpinelli & Jaramillo, 2001). On the other hand, students who take a more active role in their education stand a better chance of learning the material and receiving higher grades in their courses. Therefore these courses are usually organized in such a way that students obtain not only a purely theoretical experience, but also a practical understanding of the topics lectured topic (Cassells, 2007). Computer architecture and computer organization are conduits for supplying students with the knowledge of the topics such as the processor, the memory, the input/output system, and the bus design. The topics also cover the structure of significant components of modern computers. Nevertheless, computers are digital systems, structured either by combining different subsystems or even placed on a single very large scale integration (VLSI) chip (Hasan & Mahmood, 2012; Oztekin, Temurtas, & Gulbag, 2011). Virtualization through graphical representation with help of simulators is absolutely essential to elevate students’ level of understanding. The virtualization tools are widely used in universities for teaching of computer architecture and organization. The tools extend from simple, visual simulators to advanced, complex simulators. The simulators are used to help learners understand complicated technologies that would have been hard to visualize without the graphical simulators (El-Din & Krad, 2011; Hasan & Mahmood, 2012; Oztekin et al., 2011). This paper explores the methods used to teach the computer organization and architecture in the higher education. The remainder of this paper is organized as follows. Section 2 summarizes the importance of teaching computer organization and architecture in computer engineering courses. Section 3 provides the survey results on the currently used teaching methods: use of hardware trainer/software simulators, and advantages and disadvantages of these systems. Section 4 explores some of the widely used simulation tools for teaching purposes. Finally, Section 5 concludes the paper with the recommendations, and possible new techniques that can be adopted for improving outcome of teaching of computer organization and architecture. Importance of Teaching Computer Organization and Architecture: Computer architecture and organization are well-recognized subject areas in computer science and computer engineering curricula. The courses are offered at the undergraduate level. This is because the courses need to provide the student with a good understanding of the relationship between the hardware and the software it runs (Calazans & Moraes, 2001). Computer architecture laboratories conduct software simulators to teach the fundamental computer systems. A variety of software simulators have been created to provide teaching courses in computer architecture and organization. These simulators are built by using different software programming languages (Oztekin et al., 2011). Computer organization and architecture cover many different concepts for the undergraduate students. Long before the students arrive in the university, today’s students have had exposure to different computing devices, such as tablets and smartphones, albeit merely as users who have little knowledge of what is actually inside these devices, such as logic gates, registers, or arithmetic logic units. There is a need to bridge the understanding gap which is produced by the expanding number of abstraction layers between the hardware and software applications. So different teaching methods are proposed that depend on intensive use of practical work to help lectures (Calazans & Moraes, 2001). At times the study of computer organization and architecture is restricted to practical work that just covers the assembly language programming and the related assembler and simulation tools. There is a debate about using commercial versus non-commercial

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) simulation tools. Many authors advocate the use of software simulators as the method to enhance teaching and learning. Employing commercial simulator tools has its disadvantages. The commercial tools may not be suitable for teaching, as they are appropriate for the professional users but too complex for teaching and learning purposes (Calazans & Moraes, 2001). Traditionally, teaching computer organization and architecture to computer engineering and computer science learners can be ineffective if the teaching concentrate is completely on textbook stuff. Learners sometimes have to depend on their creative thinking to understand the concepts and terminologies. In a college/university level teaching environment, it is still not capable to construct a science lab that can afford different computer systems and architectures for teaching computer organization and architecture, still holding computer engineering and computer science education current needs quick evolution of the computing environment. Searching for a more effective method of teaching computer organization and architecture is a current job (Hatfield, Rieker, & Jin, 2005). The challenge ahead was to improve the teaching of the course of “Computer Organization and Architecture”. What must be done to change the course from a theoretical perspective into a course filled with activities, hence improving learners capability to understand, and then train them to fulfill the course need. (Jiang, Guo, & Feng, 2009). Currently Used Teaching Methods: Providing the all-important practical exposure can be achieved using two different methods, which are hard-wired “kits” and simulators (Hasan & Mahmood, 2012). These physical kits generally consist of a breadboard module to plug in the 7400-series integrated circuits, a power supply unit, an analog and digital pulse generator, some switches, and a display unit. The simulator can be either PC-based using a programmable logic device (software and hardware) or virtual process (software only) (Djordjevic, Nikolic, & Milenkovic, 2005). The solution to support lively learning environment for teaching computer organization and architecture through getting advantage of developed software technology. In other hand, by simulating basic principle of a processor, learners can gain a better understanding of the internal operation of a processor. Simulation can also support learners study and consider some of the design trade-offs and performance problems (Hatfield et al., 2005). Simulators types can be categorized as commercial and non-commercial tools. Though the commercial tools have more capabilities and use advanced feature, they are not the best to use for teaching purposes. Several authors state that the commercial tools have lot of disadvantages for the students, mainly because they are designed for commercial purposes and for the professional market; they may not have basic functions required for students to complete the task and might result in students getting confused (Djordjevic et al., 2005). On the other hand, somebody might argue that these commercial tools have more features for students to build their skills on digital circuits. However, uses of these commercially available tools suffer from high cost in terms of software and hardware. The software simulators differ in scope and complexity, type of instruction set, user interface, simulation granularity, simulation modes, level of implementation details, and support for distance learning. In addition, the simulators should enable students to write their own assembly and/or high-level language programs, and allow virtual simulation of the program execution at the different levels of hierarchy. The simulators should be user friendly, allowing instructors to utilize them in a number of different laboratory experiments and many courses. For wider acceptance, the tools should also support distance learning (Djordjevic et al., 2005). Many excellent hardware simulators and tools have been developed by the academics for teaching computer architecture and computer hardware, and a number of them are freely available and widely used (Nikolić, Grbanović, & Đorđević, 2009; Wolffe, Yurcik, Osborne, & Holliday, 2002). Table 1 illustrates number of simulator types. Out of a total of 100 simulators, 36 can be used for teaching computer architecture and organization. Table 1: Availability of simulators Type of simulation

Count

Transistors/components

11

Gates

18

HDL (VHDL/Verilog/SystemC, etc.)

12

Architecture/system

36

Circuit synthesis

11

Layout (chip/PCB/none)

12

Total

100

Details of Selected Simulators: This section offers a variety of simulators suitable for teaching computer organization and architecture courses. The basic characteristics and features of selected simulators are given below and include target users, operating systems on which the simulators run, programming languages used for their development, special features and some screen shots of the interface used. Their detailed descriptions are not given in the paper for the sake of brevity. In order to provide readers with the complete features of these simulators, more data are given in papers presented by Carpinelli & Jaramillo, 2001; Cassel et al., 2001; Hasan & Mahmood, 2012; Oztekin et al., 2011 and Yehezkel et al., 2001. CPU-Sim: CPU-Sim is a simple hypothetical CPU simulator that can provide learners an insight into the internal operation of the CPU; something that is not possible even with a real CPU (Wolffe et al., 2002). The users can define the details of the CPU to be simulated, including registers, I/O channels, main memory, and machine and assembly language instructions. So the simulator can be used in teaching machine organization course that covers an introduction to both assembly language and machine language (Hatfield et al., 2005). CPU-Sim is a Java-based application. This simulator has a text editor used for writing assembly language programs. It also has an

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) assembler for translating assembly code into machine program. A debugger is another component for finding errors in user programs. A sample of assembly language code is shown in Fig. 1. The user interface of CPU Sim is presented in Fig. 2. Figure 1: CPU-Sim screen capture

Figure 2: CPU-Sim assembly language example

DLXview: DLXview is an advanced simulator that captures the performance of pipelining – an advanced architectural feature..So the simulator is suitable for an advanced course on computer organization and architecture (Wolffe et al., 2002). With this simulator, a learner can implement his own test programs or the ones offered by the system at an abstract level (Nikolić et al., 2009). The tool provides animation of instruction execution at clock level, without involving implementation details of system components (Djordjevic et al., 2005). This simulator was developed using C programming language as a part of CASLE simulator that uses a set of DLX instructions and that simulates different levels of a DLX pipeline. An important feature of the simulator is its graphical tool that makes the internal operation of a processor much more understandable than purely textual description. Additionally, the simulator helps with the concepts of an instruction set and processor performance evaluation. Figure 3 shows a sample DLXview screen: Figure 3: DLX-View sample screen

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) CASLE: CASLE is an example of a processor-specific simulator for creating a pipeline architecture. It is a visual simulator for DLX pipeline. The simulator helps learners build a sample pipeline configuration, simulate a piece of code, and produce summary of program statistics. The simulator contains pop-up menus to allow users change a number of design parameters. The result-screen contains a block diagram of the simulated system and a pipeline layout depicting its state (Ibbett, 2000). CASLE is a machine language level simulator that contains number of registers whose values are displayed throughout simulation. The simulator also includes four different interfaces: compiler, assembler, simulator, and static pages. Figure 4 shows the main window of the group of simulators, where CASLE is also used in the evaluation. This simulator is separated into two areas: WP – Working Panel and TST – Testing options (Nikolić et al., 2009) Figure 4: CASLE simulator for DLX processor

SimOS: SimOS is a multiprocessor simulator. It is a simulation environment that contains multiple CPU and memory models, in addition to disk-driver models, network interface, a serial console, and interrupt controllers . It also used in studying operating systems. Such a simulator is bound to complex, and hence suitable for use in an advanced computer architecture course (Wolffe et al., 2002). The simulator can save the entire state of the simulated machine to disk and can easily restore to this state at a later time. SimOS was developed in C programming language. Due to its extensive features, the simulator has been used by learners, developer, and testers. Fig. 5 presents the address mapping mechanism in the simulator (Ibbett, 2000; Nikolić et al., 2009; Wolffe et al., 2002). Figure 5: Sim-OS address mapping

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) 2. Conclusion Due to the complexity of the subjects of computer architecture and computer organization, their delivery methods include not only lecture classes but also practical work using simulators. This paper surveyed a range of related simulators, evaluated the freely available simulators suitable for laboratory use. The study discussed the usability, affordability, availability, and the course contents covered by different simulators. Our future work includes analysis of all 100 simulators based on specific features which are important for teaching computer architecture and organization. We also plan to measure the effectiveness of some of the freely available simulators for teaching; this will be achieved by utilizing some of the simulators in a few universities and compare student learning with the ones that do not use the simulators. References Calazans, N. L. V. & Moraes, F. G. (2001). Integrating the Teaching of Computer Organization and Architecture with Digital Hardware Design Early in Undergraduate Courses. IEEE transactions on Education, 44(2), 109-119. Carpinelli, J. D. & Jaramillo, F. (2001). Simulation tools for digital design and computer organization and architecture. Paper presented at the 31st ASEE/IEEE Frontiers in Education Conference, Reno, NV. Cassel, D., Kumar, K., Bolding, J., Davies, M., Holliday, J., Impagliazzoo, G. & Yurcik, W. (2001). Distributed expertise for teaching computer organization and architecture. ACM SIGCSE Bulletin, 33, 111-126. Cassells, R. (2007). What The Data Says About Generation Y Australian Chief Executive. Melbourne, Australia: Committee for Economic Development of Australia (CEDA). Djordjevic, J., Nikolic, B. & Milenkovic, A. (2005). FlexibleWeb-Based Educational System for Teaching Computer Architecture and Organization. IEEE transactions on Education, 48(2), 264-273. El-Din, A. Y. & Krad, H. (2011). Teaching computer architecture and organization using simulation and FPGAs. International Journal of Information and Education Technology, 1(3). Hasan, R. & Mahmood, S. (2012). Survey and Evaluation of Simulators Suitable for Teaching for Computer Architecture and Organization. Paper presented at the 2012 UKACC International Conference on Control, Cardiff, UK. Hatfield, B., Rieker, M. & Jin, L. (2005). Incorporating Simulation and Implementation into Teaching Computer Organization and Architecture. Paper presented at the 35th ASEE/IEEE Frontiers in Education Conference, Indianapolis, IN. Ibbett, R. N. (2000). HASE DLX Simulation Model. IEEE Micro, 57-65. Jiang, Y., Guo, Z. & Feng, Y. (2009). Introduction to the Teaching Reform of the Course “Computer Organization Principles". Paper presented at the 2009 International Conference on Scalable Computing and Communications; Eighth International Conference on Embedded Computing, Dailan, China. Nikolić, B., Grbanović, N. & Đorđević, J. (2009). The Visual Simulators For Architecture And Computer Organization Learning. Journal of Automatic Control, 19, 31-34. Oztekin, H., Temurtas, F. & Gulbag, A. (2011). A Software based Interactive System on BZK.SAU.FPGA10.1 Micro Computer Design for Teaching Computer Architecture and Organization. Paper presented at the 7th International Conference on Electrical and Electronics Engineering (ELECO) Bursa, Turkey. Siddiqul, A., Khan, M. & Akhtar, S. (2008). Supply chain simulator: A scenario-based educational tool to enhance student learning. Computers & Education, 51(1), 252-261. Wolffe, G., Yurcik, W., Osborne, H. & Holliday, M. (2002). Teaching Computer Organization/Architecture with Limited Resources Using Simulators. ACM SIGCSE Bulletin, 34, 176-180. Yehezkel, C., Yurcik, W., Pearson, M. & Armstrong, D. (2001). Three simulator tools for teaching computer architecture: EasyCPU, Little Man Computer, and RTLSim. ACM Journal of Educational Resources in Computing, 1(4), 60-80.

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Preparation of Principal for School Change: A Singapore Perspective Babin Pokharel, Kathmandu University School of Education, Nepal Abstract: This paper examines the understanding of the educational leadership process and the exploration of systematic preparation of private school principal in order to cope with future school change. Leading through change in education is a must in 21 st century. Various contexts determine the change in leadership process. In schools, principal needs to be prepared in order cope with contextual changes. Changes in school can be seen various contexts such as cultural, technological, policy level, outbound competitions so on and so forth. School principal are the most important catalyst in the construction of new and innovative leadership practices that enhance the change process. Specifically, it presents the findings from the case of four private schools principal in Singapore through their storytelling. This paper includes an overview of the study and a discussion of emergent themes related to the leadership process of the principals and their preparation strategy for a school change. The results from this study indicate how school principal prepare themselves for future and school change taking the entire internal and external environment into consideration. Keywords: principal; school leadership, change, preparation, private school 1. Introduction Republic of Singapore, independent republic in Southeast Asia, provides extra incentives to healthcare and education to its citizen. Singapore’s government policy strengthens its population by providing innovation in education sector and major part of budget is allocated for the innovation and transformation of education system predominantly challenging the global scenario. Hence Singapore being one of the prominent country for education especially for perusing higher education. The pro-high technology policy of the government has invited billion of dollars of foreign investment in the fields of biotechnology, IT and research. The Ministry of Education (MOE) is responsible for controlling the development and administration of the schools and various government-funded educational institutions. In case of private schools, the MOE plays a crucial supervisory and advisory role. Education mainly revolves around the interests of the students. According to MOE, the teaching and pedagogical system follows a flexible approach that helps the students in developing their potentials and. The MOE being the main body to regulate and facilitate education system in Singapore aims to help all the institution either private or public owned and always encourage students to discover their own talents, to make the best of these talents and realize their full potential, and to develop a passion for learning that lasts through life. Research findings from a variety of countries and school systems draw similar conclusions about the importance of the principal in school development and change processes (e.g. Van Velzen et al. 1985; Duignan and Macpherson 1987; Myers 1995; Hopkins et al. 1994; Ainscow et al 1994; Stoll and Fink 1996). They have identified consistently that those school principal, which have demonstrated the capacity to prepare and improve themselves, tend to be led a significant contribution to the effectiveness of their staff and school environment. Of course, the school principal's role has to be seen in relationship to the broad cultural and educational contexts in which the school is operating. Schools and principal have to cope with, to support or otherwise react to the social, economic and cultural changes and developments taking place around them. Direct changes in the educational system have a particularly strong and, to a large extent, calculable impact on the school principal's role. However, its also known that schools, and consequently the pressures and expectations on school leaders, also change as a result of more subtle and indirect forces in society – social, political and economic changes – that are gathering pace across the world as the speed of international development increasingly reflects global factors. These new conditions and demands certainly place new pressures on the school principal, and though the new tasks and challenges can be viewed positively as bringing new opportunities, nevertheless there is some concern that what we are trying to do is to prepare principal for tomorrow's schools using today's various new method incorporated by countries prominent in educational sphere. School Principal: At a Glance: Leadership is defined as the ability to get all members of the organizations to perform tasks required to achieve the organization’s goals and objectives (Bennis & Nanus, 1985). Good leadership skill is always essential if schools are to improve. Best leadership creates a sense of excitement about teaching and learning within the school and community by focusing on dreams and expectations of students, parents and the community. Good school principal is always informed and communicates clear sets of personal and educational values that represent their moral purposes for the school. The school principal possess the following qualities: respect for others, fairness and equality, caring for the well being and whole development of students and staff, integrity and honesty. School principal are facing a complex environment and they have to change their roles to meet the changing external environment. They must coordinate the services offered to their students, and to ensure that these services reach those with the greatest needs; and at the same time to ensure that there is no disruption of the teaching and learning process in school. The dramatic reform initiatives that characterize education, and specifically the school sector, are placing a range of new demands on education systems around the globe. Main global trend such as the transformation in school and role of principal are currently posing huge and complex international questions for education (Portin, Schen & Williams, 1998, Pretorius, 1998; Van Huysteen, 1999). School Principal are equally responsible of identifying five control parameters that determine the state of the system in which change agents function. These are rate of information flow, connectivity, diversity, power differentials and anxiety. School principal have to give much priority to the marketing of their schools, i.e., to enhance the school’s image, recruitment and retention of students. The survival of many schools depends on their ability of marketing and to recruit new students and retain existing ones, mobilization of resources, student achievements and on their successes in making their programs attractive. The review of leadership literature has led to an initial identification of the six characteristics of leaders of educational change, which are:  believing that the schools are for learning,  valuing human resources,

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013)   

being a skilled communicator and listener, acting proactively, and taking risks.

Leadership in systems engaged in change must be prepared to tackle problems that have unknown solutions and unpredictable outcomes. Key characteristics of change-focused school principal include moral purpose, understanding of the change process, and the abilities to build relationships, to create and share knowledge and to make the change process coherent to others in the organization. Principal who foreseen change illustrate the performance with their vision and belief that the purpose of schools is learning centre with continuous change process. Valuing human resources as well as communicating and listening are directly associated with the dimension of consideration. Being a proactive leader and a risk taker demonstrate the dimension of initiating structure. Leaders of educational change respond to the human as well as the task aspects of their schools and districts. "Effective change requires skilled leadership that can integrate the soft human elements with hard business actions" (Joiner, 1987 p. 1). Leadership to promote and implement educational change has not been uniform. Knowledge about the qualities of the individuals who have successfully implemented such strategies has been minimal. Although knowledge is limited on what types of school principal are needed in future, there are a number of assumptions about leadership. In educational organizations there is an assumption that leaders of educational change should be both leaders and managers. "We expect both leadership and management from the same individual" (Manasse, 1986, p. 153). Nevertheless, "while we can distinguish management from leadership conceptually, in reality we often find the two roles coexisting in the same positions and the same person" (Manasse, 1986, p. 153). For example, a principal is often responsible for the school's vision as well as the practical steps needed to attain that vision. Therefore, school Principal should have an understanding of the "real issues" which facilitate the smooth operation of school. They are prepared to 'stand up' and do 'what is right' in the future. Effective school principals in the modern age should possess certain future qualities of leadership that distinguish them from their peers (Greenfield and Ribbins ,1993) .Qualities needed for future school operation such as reflection, vision, commitment, courage, power, and empowerment come immediately to mind when one thinks about excellence in future principalship (Steyn, 2002). School Principal in Singapore: An Overview: The approach to education change in Singapore, which has considered being one of the world’s leading education systems. Emerging from colonialism in the 1960s, the government prioritized providing high-quality education to all students, then integrated education change into a broader deployment of technology under the framework of IT2000: The Intelligent Island. Responsive leadership throughout this period ensured all school principal that learning was incorporated into all levels of the education system, and that processes of ongoing development and innovation were mainstreamed. Key practices that evolved in Singapore can be adopted by other education systems, regardless of whether they have built the capacity to immediately open themselves to participation in knowledge societies. These key practices include: • Commit to inclusively • Integrate teaching practices, learning objectives and content • Link the outcomes of change to policy goals • Focus on changing practice, not on technology In the 1960s, Singapore’s massive curriculum-reform initiative became the starting point for ongoing change for the school principal. Dr. Ruth Wong, founding director of the National Institute of Education, recognized that new approaches were always needed for curriculum and school leadership, and that these approaches should be based on understanding of the challenges at the grassroots level: she spent three months visiting schools and talking to teachers and principals. Educational transformation, as exemplified by Wong’s activist leadership, has been distinguished first and foremost by actions intended to remake the educational system top-to-bottom into a learning system—a system that employs research, that rewards innovative leadership, that promotes teachers’ development, and that focuses all of these learning activities on improving student outcomes. And education-technology has been integrated into all aspects of school culture together with new technological learning for school principal to cope with the change. Therefore Singapore school principal are utmost tech-savvy and deals with ongoing change in technology. Singaporean school principal are preparing themselves for all sort of changes and innovation that is required by their school. The key challenges, therefore, confronting to school principal operating their school should understand how to anticipate the variation of their school change and the modality to be prepared for the future. The knowledge, skills and competencies that the next generation of school principal needs to cope up with the future school transformation are the subject area that are understood by the school principal of Singapore to deal with changes. According to MOE , there are several designed programmes and finding ways to equip such transformation in Singapore private schools are the best example that any developing countries or country like Nepal should follow in order to prepare effective principal for tomorrow. 2. Methodology As this study of Singaporean school principals intends to project their experience, their real life story of process of change and process of preparation for future, the method of Narrative Enquiry is used. Narrative inquiry is the process of gathering information for the purpose of research through storytelling. Connelly and Clandinin (2000) noted that, humans are storytelling organisms who, individually and collectively, lead storied lives. Thus, the study of narrative is the study of the ways humans experience the world. Meaningful presentation of real life experiences are gathered here through stories shared by Singaporean principal.In this study the sample is small, hence the samples are chosen randomly in regards with this study. In order to facilitate better understanding of the research, target population is randomly picked. Four private School Heads are chosen on the basis of random sampling method where they have equal chance of being selected as sample out of pool of registered private school of Singapore. Codes are given to each respondent to hide their identity as a part of ethical consideration. Few codes involved in this study are : PSP 1- Private school principal 1. PSP 2- Private school principal 2. PSP 3 – Private school principal 3 and finally PSP 4 – Private school principal 4. Although data were collected from four private school principal, this article only encompasses only few data from them to give rough idea about the scenario in Singapore. As all principal respondents belong to the reputed and top private schools in Singapore, hence they can sprinkle the essence needed for this article.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) a) Primary qualitative data tools such as non-participant observation and semi- structured interview are carried out in this study in order to find out about the Principal leadership style and their adoptability of innovative and new technique of educational leadership. These both techniques qualifies in this study that helps to understand the leadership philosophy that are proposed to them from changing time which encourages them to change and prepare for the future. Exploring reality of Singapore Private School Principal: "Change must be initiated by leaders who are willing to risk their reputations for the future benefit of their organization" (Joiner, 1987 p. 4). Singaporean private school principals are extreme learner and posses active participation in trainings. When asked with one of the principal respondent, He replied the scenario of Singaporean principal as; In private school of Singapore, best principals are recruited. Leadership is more students centric and holistic. In private school process of leading is top down approach, Distributed leadership is used. Also staffs are engaged in decision-making process. Almost every principal were teacher once so they knows educational philosophy. They are also visionary and have utmost conceptual knowledge with strong idea on curriculum and are the organization. Leader. (PSP 3). In addition to the above statement, he also mentioned, Singaporean principal often takes risks and have tremendous benchmark for setting vision and tend to consider everyday as opportunities that will improve the organization. Leaders of change provide the needed stimulus for change. Calling attention to the possibilities, they take risks and encourage others to initiate change. He also adds , School Principal in Singapore get prepared by encouraging their staff to experiment with various transformational methods to meet the academic needs of the students and bring school into new height. In the interview, one of the interviewees remarked criteria for this experimentation in following views: School Principal here are strong in organizational leadership and curriculum leadership. They have heart for students and staff. Firstly, they follow the self-reflective practice. Attend trainings, professional reading and observation. That’s how self preparation for change is carried out. (PSP 3) It has seen that notion of being excellent communicator is also one of the key attributes that Singaporean private school posses to enhance the challenges that future has to offer. Value being on of the major player in principal activities. Bringing trust to the school and with teachers and other staff can also bring heart to the organization making easier the process of change. When asked with one of the principal, he quoted, School leader in Singapore are people manager. They meticulously plan and have strong vision of school development. Finally result oriented. (PSP 2). Both interviewee focused on being people person. Without trust and integrity, a successful principal can not posses effective result. Their statement also aids principal guides and provokes the staff to explore options that more adequately address the needs of the school and provide the environment that transforming genuinely safer. They provide their staff with opportunities to consider and implement curriculum changes as well as encourage experimentation with different arrangements of organizational structures. School leaders in Singapore encourages their staff to experiment transforming to meet challenges draw n by culture change, competitive environment and various other external changes. Prepared school principals that lead and guide others in school change take risks but not carelessly or without forethought. Furthermore school should also encourage the principal to move further to tackle school transformation. Private school has to develop school-based approaches. They also need to develop various leadership courses (in house and out). Coaching and mentoring is another important issues that management team have to take into account. They also need to help in the professional development of school leader. And as a simulations practice they have to create challenging work assignment. School need to help to cultivate environment to practice good leadership (PSP 3). Its crystal clear that Singaporean principal poses good site in changing themselves, they still lookout for the new and innovative methods as a continuous learning process. Their views showcased that there are few contexts in school in which changes occur and Singaporean private school principal grab the effective model to act on the changes that happens in school periphery. Policy driven Preparation: When education spare is concerned, schools perform and follow general frame of systematic rules and regulation which are both patterned through international, national and local social/economic/cultural relations and put into and delimited by political and policy regimes. Educational policy makes a difference in the development of school capacity for better performance. Changes in policy also generate the maximum inclination of school principal towards the better adjustment and dealing for school effectiveness. When asked about the principal preparation process in Singapore by the government , one of the principal respondent added, Singapore government has many leadership courses and programs. Programs like leadership development program which can be extremely benefited to private school principal. Well in Singapore, environment is stable due to stable and innovative government. Schools also implement good and changed strategy and not only do the talking. Process of continuous improvement is present in all school of Singapore. Finally Singaporean schools are open minded (learn from the world)(PSP 4). In Singapore, Ministry of Education creates the central policy and guideline, which draws the perimeter for operation of school and school principal modality of leading the change. Similarly they create different activities, courses and programs under leadership development department help them to fight against any transformation in future. Culture driven Preparation: Meaningful school improvement begins with cultural change and cultural change begins with the school principal. Cultural change, although challenging and time-consuming, is not only possible but also necessary especially in schools in which stakeholders to block leadership initiatives, stifle innovation, and maintain the status quo. Effective change principal identify and build on traditions rather than compete with them. In Singapore too, Principal have constant watch in cultural change and act in terms of those changes. Principal respondent 1 Quoted, One of the most important culture seen in Singapore is "learning culture". Principal never stops learning new things and letting other learn from their respective school. When asked about the school culture in Singapore, another principal replied, Timely I tend to make parents, students and staff aware of new school culture (PSP 2). School culture are guided by principal self leadership qualities. As long as he/she doesn’t posses innovative style of leadership culture cannot be changed. When asked about this view to one of the principal , she remarked school cultutre is the projection of who am I and added, The communicating and listening skills of principals, and teachers here are the basis for their ability to articulate a vision, develop a shared vision, express their belief that schools are for the students' learning, and demonstrate that they value the human resources of their peers and subordinates. Being an effective communicator and listener sets excellent culture where everyone can expresses ideas and views.(PSP 1) Technology driven Preparation: Among the numerous changes that schools have faced over the past decade or so has been the on-going evolution of technology use in schools. Although there is significant utilizing of technology in principal professional development, there

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) might be a catalyst that inspires the transformation in schools that will be necessary to realize the full potential of technology in education. The change process is complex. One could therefore assume that the problems and barriers associated complex change are also complex. According to Fullan, technological change is considered to be a major innovation not a minor one (Fullan, 1992 p. 57). As with any educational change, there are many barriers that can cause any innovation to be less than substantially realized. Technological change is no different in Singapore private school. Principal considers technological change that is alleged to transform not only the way that school operates but in the way everyone including school principal would learn at school. One of the principal added his remarks in technological change and grasping this state, Recently I have focused more into ICT Integration where most of the teaching and learning process is driven by technology.I have also focused more into training programs where I can get enough environment track . Various training programs include HR training, pedagogical training , technological training for my staffs. (PSP 4) Competition driven Preparation: It is the change that is shaping global forces. The forces that are influencing the strategic decisions of various organizations today are fallout of global drivers of change that have impacted the businesses and governments in the past decade and a half. The changes in the past decade and a half were driven by liberalization of economies world over This phenomenon is taking the competition among schools to different heights where there is little scope for survival of school which shows resistance to change. The case was similar in Singapore too. The society has become more open towards change due to high demand and remarkable global competition. One of the interviewee quotes, In other Asian countries leadership style is formal and authoritative .Here in Singapore, staffs voice is heard. Collaboration of school leader and staff are there together with knowledge sharing in every levels. Mindset changes in Singapore. People in Singapore give high priority to changes that bring about growth so its easier to change.(PSP 2) In Singapore private school, Competitiveness in terms of performance and effectiveness to achieve a dominant position in the growing market place has made it obvious for many schools to reinvent them. The same reasons push private schools having complementary strengths of school principal to change themselves through merging together with transformation characteristics and bringing innovative side of the school. Being professionally sound in their position to compete with global breakouts too proves the strength of Singaporean principal to urge for the progression. One interviewee also adds, I attend leadership training and professional conferences to gain background information. I also read articles and books on leadership to maintain myself in this competitive world.(PSP 1) Pathway to Principal Preparation: Unfolding Possibilities: Conventional leadership which is profoundly rooted in many private schools around the world are insufficient to meet the demands of the 21 st Century. As we have already entered the new millennium, our world is characterized by unprecedented complexity, paradox, and unpredictability. Change is rapid and relentless. Today’s school principal face demands unlike any ever before faced. Standard and conventional leadership approaches that many of the private school principal have served them well long time back are quickly becoming liabilities. Conventional wisdom regarding leadership and many of its habits must be unlearned. The strong trust charisma, and independent leader and transforming leadership we have idealized, strived to be proven as counter-productive in the new millennium and undermine a sustainable future. Mutual trust between school leaders and teaching staff is the single most important factor within a school’s culture that will allow for successful changes for improvement to be possible. Without trust there is no effective communication or collaboration, which hampers the development of commitment to school improvement. (Fullan, 2001). The challenges and opportunities of principal preparation process for a new type of school principal, indeed an entirely new and different way of thinking about leadership and of developing future principal. Private school principal should explore the nature of the innovation in leading and leadership qualities and capabilities expected to be crucial in the future school transformation. A. Accelerating change towards Quality Education: The embarkation of Quality education is done through school principal’s skills and competencies that is showcased in their respective school. Many private school are lunching their progression chart through implication of ICTs programs. It is seen in many school that principal are gradually in the process of preparation for the knowledgebased, information society. Principal should understand that students as human capital and as national resource, as an investment in the national economy. All this is fair and possible only through bring change to the school. And to bring the change, principal needs to be changed. Their priority should be placed on courses directly contributing them to the national development goals and creating value based students. The improvement of the quality of education has become a global concern and kept as high priority in private schools. Government in countries like Singapore maintains the dignity in creating qualified person even for private sector by making school friendly policy, private institution development policy and principal training and development. Identifying innovative leadership style: Throughout the research, I found out that Singaporean principal loves change and experiment with their leading style keeping actual meaning of contingency approach and transformational leadership style into account. In contrast many other private school principal around the world do love change as well but scared of the consequences with significant inclination towards “Transactional Leadership” .With regards to the style of school management, Beare, Caldwell and Millikan (1993) distinguish between transactional and transformational leadership. Managers who are ‘transactional’ in their approach to school improvement try to ‘sell’ their ideas and demands to staff, using a combination of pressure and compensation. Transformational managers, on the other hand, try to improve the organisation through improving its working conditions, most notably the capability of its staff. Being Transformer to tackle the Change and Trendsetter to follow the Change: Bottom line, to embrace change and to create tranquility in leading school, any principal is advised to follow transformational leadership which articulates an organizational vision that they want their staffs to achieve. The perception of leadership effectiveness and the enactment strategy are influenced by the societal values and the cultural context. Attributes of transformational leadership vary for different cultural contexts. Therefore, principal of private school should act as “Transformer” to lead change in 21 st century. Being “Transformer” foresee the interaction between the themselves and the school staffs. “Transformer” also helps in showing a positive relationship between leadership dimensions, individual and organizational performance outcomes, and a principal’s self-reported and other-reported communication competence. As education is going global in tremendous manner. Private schools can import best education in the form of manpower, system and accreditation. Hence “Transformer” also teaches the cross-cultural communication competence which creates framework in

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) analyzing and predicting the effective communication strategies and influential transformational leadership across different cultural contexts. I believe that unlike other superheroes like superman, Spiderman etc , principal can become “Transformer” in his school and get benefited from transformational leadership which teaches various competency required to become prepared principal. Personal Leadership Brand: A personal leadership brand is an exclusive and a specific approach of a leader to address challenges and manage his/her transactions with their subordinates or followers. The best part of having a leadership brand is that it allows the flexibility to the leaders to define their own leadership objectives and then position themselves appropriately as per the need and situation (Smallwood and Ullrich, 2008). For example Gandhi’s leadership brand was that of integrity, honesty, principles, strength of character and above all truth. It is essential for a school principal to practice own leadership brand in thoughts and actions so that their implementation in school activities can set remarkable results. It is best for the private school principal in order to get prepared in leading practice to have own leadership style. They can check their leadership brand with seniors, subordinates and other stake-holders to understand their expectations from the role; and if any disconnect is pointed out, it needs to be incorporated. Apart from the above aspects, principal needs to maintain ethical behavior and stand with exemplary achievements so that the subordinate chooses them to be a role model and redefine their perceptions and ambitions to encompass the entire school, which they represent. Hence, principal should identify objective of the school, create value based leadership and transform according to nature of environment. Creating personal leadership brand is the accomplishment of getting prepared for the change. Allocating concrete methods for school principal preparation This change is everything. Perhaps the greatest challenge for private school is to develop prepared principal for future—principal who leads with and through others, not over them. While the qualities are shifting from conventional understandings of leadership to transformational, from autocratic to more facilitative and power-wielding to power sharing, the challenge of molding concrete methods is really crucial task. In an effort to discover best and concrete methods for school principal preparation, that too may be leadership development program which is fairly conservative and slow to change came up with mainly three concrete method which is applicable..  Expanding Learning Opportunities  Ample training Prospect  Formation of Leadership Development Centre. 3. Conclusion The leadership style of Principals, job satisfaction of teachers and other staff and organizational climate differ from school to school. While observing the leadership in private schools of Singapore has been found very influential as far the Job satisfaction of the staff and overall performance of school is concerned. It has also been observed that there is not much difference between the highly motivated workforce and an effectively run school. Administration of these schools is found to be more satisfied than the Schools under Singapore government. The factors like less pressure of work, low supervision and high job security are some of the key triggering factors responsible for this. Again the principals of the private school in Singapore are the excellent communicator, frequent learner, have open mindset and prepare themselves against all the odds and future school transformation. Policy, culture, technology and competition are the quintessential factor that provokes principals to prepare themselves for a future change. Thus the findings of this study pose a serious notion that prepared principal are those who are able to influence the present time. The principals should be provided in service training in human relations to achieve a good school climate and a higher Job Satisfaction among staffs and have to go through various new leadership style that are present in this new era together with full fledged preparation with all internal and external factors into consideration. Although new vision of the prepared schools principal are presented in Singaporean private schools are emerging with transformational leadership, the new goals required of them in the changing educational environment needs to be addressed and prepare accordingly. References Angelides, P. & Ainscow, M. (2000). Making Sense of the Role of Culture in School Improvement. School Effectiveness and School Improvement, 11 (2), 145-163. Ainscow, M., Hopkins, D., Southworth, G. & West, M. (1994). School Improvement in an Era of Change. London: Cassell. Bass, B. M. (1985). Leadership and Performance beyond Expectation. New York: Free PressBass, B.M. (1990) Handbook of Leadership: A survey of theory and research. New York: Free Press. Bass, B. M. & Avolio, B. J. (1994). Improving organizational effectiveness through transformational leadership. Sage, Thousand Oaks, CA, Bass, B. M. (1998). Transformational leadership: Industry, military, and educational impact. Mahwah, NJ: Erlbaum. 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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Deal, T. & Kennedy, A. (1983). Culture and School Performance. Educational Leadership, 40(5), 14-15. Dimmock, C. & Walker, A. (2005). Educational Leadership: Culture and Diversity. London: Sage. Firestone, S. (1987). Meaning in method: The rhetoric of qualitative and quantitative research. Educational Researcher,.16, 16-21 Fullan, M. (1992). Successful School Improvement. Buckingham: Open University Press. Greenleaf, R. K. (1977). Servant Leadership: A journey into the nature of legitimate power and greatness. New York: Paulist Press. Guba, E. G. & Lincoln, Y. S. (1994). Competing paradigms in qualitative research. In . K. Denzin & Y. S. Lincoln (Eds.) Handbook of Qualitative Research (pp. 105-117). Thousand Oaks, CA, Sage. Hanson, E. M. (2003). Educational Administration and Organizational Behavior. Boston: Allyn & Bacon. Hargreaves, D. (1995). School culture, school effectiveness and school improvement. School Effectiveness and School Improvement, 6, 2346. Hinkin, T. R. & Tracey, B. T. (1999). The relevance of charisma for transformational leadership in stable organizations. Journal of Organizational Change Management, 12, 105-119. Huber, S. G. (2002). Preparing School Leaders for the 21st Century: An International Comparison of Development Programmes in 16 Countries. Lisse: Swets & Zeitlinger. Joiner, C. W. (1987). Leadership for change. Ballinger Publisher, xvi , 194 Kerbow, D., Azcoitia, C. & Buell, B. (2003). Student mobility and local school improvement in Chicago. The Journal of Negro Education, 72(1), 158-164. Kotter, J. P. (1996). Leading Change. Cambridge, MA: Harvard Business School Press. Merriam, S. (1998). Qualitative research and case study: Applications in education. San Francisco: Jossey-Bass Publishers. Murphy, J. (1991). Restructuring schools: Capturing the phenomenon. Beverley Hills, CA: Sage. Murphy, J. & Beck, L. (1995). School-Based Management as School Reform. Thousand oaks CA: Corvin Press. Myers, E. & Murphy, J. (1995). Suburban Secondary Schools. Principals’ Perceptions of Administrative Control in Schools. Journal of Educational Administration, 30(3), 77-88. Manasse, A. L. (1986). Vision and leadership: Paying attention to intention. Peabody Journal of Education, 63(1), 150-173. Ng, P. T. (2003). The Singapore school and the School Excellence Model. Educational Research for Policy and Practice, 2(1), 27 – 39. Patton, J. (1996). Analysis of thinking and research about qualitative methods. New Jersey: Lawrence Erlbaum. Portin, B. & Shen, J. (1998). The Changing Principalship: Its Current Status, Variability, and Impact. Journal of Leadership Studies, 5(1). Prosser, J. (2006). Changing culture: improving curriculum leadership. Curriculum Management Update, 62, 3-6. Reeves, D. (2006). How Do You Change School Culture? Educational Leadership, 64(4), 92-94. Singapore Education Policy and change, Retrieved September 2 from www.moe.gov.sg. Steyn, G. M. (2002). The changing principalship in South African schools. Educare, 31, 251-274 Stegö, N. E., Gielen, K., Glatter, R. & Hord, S. M. (1987).The role of school leaders in school improvement. Leuven: ACCO. Stoll, L. & Fink, D. (1996). Changing our Schools: Linking School Effectiveness and School Improvement. Buckingham: Open University Press. Teddlie, C. & Stringfield, S. C. (1993). Schools make a difference: Lessons learned from a 10-year study of school effects. New York: Teachers’ College Press. Ulrich, D. & Smallwood, N. (2008). Leadership Brand: Developing Customer Focused Leaders to Drive Performance and Build Lasting Value. Harvard Business Review Press Van Velzen, W. G., Miles, M. B., Ekholm, M., Hameyer, U. & Robin, D. (1985). Making school improvement work: A conceptual guide to practice. Leuven: ACCO. Wilson, M. & Prosser, J. (2006). Case Study: Transforming the culture of Prince Henry’s Grammar School Specialist Language College, Curriculum Management Update, 62, Wilson, M. (2005). Leadership and organizational culture’, in Dimmock, C. & Walker, A. Educational Leadership: Culture and Diversity, chapter 4. London: Sage. West, M. & Ainscow, M. (1997). Tracking the Moving School: Challenging Assumptions, Increasing Understanding. Paper presented at European Conference on Educational Research, Frankfurt, September 1997. West, M., Jackson, D., Harris, A. & Hopkins, D. (2000). Learning through Leadership, Leadership through learning in Riley K.A. and Seashore-Louis D: Leadership for Change and School Reform London: Routledge Falmer. Yukl, G. (2001). Leadership in Organisations: New Jersey: Prentice Hall.

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Fraud Risk Factors of Fraud Triangle and the Likelihood of Fraud Occurrence: Evidence from Malaysia Shabnam Fazli Aghghaleh*, TakiahMohd. Iskandar2, Zakiah Muhammaddun Mohamed3 Universiti Kebangsaan Malaysia, Malaysia *[email protected] Abstract: This study empirically examines the effectiveness of Cressey’s (1953) fraud risk factor framework adopted in SAS No. 99 in detecting financial statement fraud. According to Cressey’s theory pressure, opportunity and rationalization are always present in fraud situations. The study develop variables which serve as proxy measures for pressure, opportunity and test these variables using publicly available information relating to a set of fraud firms and a sample of no-fraud firms. We identify two pressure proxies and two opportunity proxies that are significantly related to financial statement fraud. We find that leverage and sale to account receivable are positively related to the likelihood of fraud. Audit committee size and board of directors’ size are also are linked to decrease the level of financial statement fraud. A logistic model based on examples of fraud risk factors of SAS 99 gauges the likelihood of fraudulent financial reporting and can benefit practitioners. Keywords: Risk Factors, Financial Statement Fraud, Fraud Triangle, SAS 99, Fraud Occurrence 1. Introduction A large increase in the number of financial frauds reported such as Enron and WorldCom increased public concern about the integrity of financial reporting. Fraud is a discussion that receives high level of attention from regulators, auditors, and the public due to increasing in corporate failures. According to prior studies, organizations commonly try to investigate on detecting frauds. For instance, Libby & Tan (1994), Bonner & Lewis’s (1990), Mui (2009), Alleyne et al. (2010), Hassink et.al (2010) investigate on factors that have impact on detecting fraud. Although there are number of studies on fraud, the Association of Certified Fraud Examiners (ACFE 2012) reports the high percentage of fraud occurrence worldwide. The report analyzed 1388 fraud cases globally and categorized fraud into three groups of asset misappropriation, corruption and financial statement fraud. The findings indicate that asset misappropriation has the most frequency with more than 86 percent of cases but caused the lowest range of loss at $120000. In contrast, financial statement fraud involved less than 8 percent of the cases but the majority of losses is for this category with $1 million. In reaction to the weaknesses in fraud detection processes, the Statement of Auditing Standards (SAS) No. 99 has been announced by the American Institute of Certified Public Accountants (AICPA) in October 2002. The objective of SAS No. 99 is raising the efficiency and productivity of auditors in fraud detection by assessing the fraud risk factors in organizations. Before the establishment of SAS No.99, AICPA (1988) issued SAS 53 that identifies the auditors’ roles in detecting errors and abnormalities materially influencing financial statements. But Moyes&Hasan (1996) still believed that the concentration on auditors’ qualification regarding detecting fraud is insufficient. Then SAS 82 entitled “Consideration of Fraud in a Financial Statement Audit” was established in 1997 to help auditors in detecting fraud of financial statements practically. This standard compare to SAS 53 provided more clear instructions focusing on fraud detection by observing highrisk areas and divisions. Additionally, due to the high rate of business failures, new auditing standards (SAS No. 99) have conducted objecting to the requirement of regulators and auditors for preventing and detecting fraud. According to Ramos (2003), the objective of SAS 99 is increasing the auditors’ role to fully incorporating fraud in audit process. The fraud risk factors of SAS 99 are based on the fraud triangle model developed by Cressey(1953). Based on this model, the fraud risk factors categorized into three groups of pressure/motivation, opportunity and rationalization. The prior studies indicated that evaluation of this information about fraud enhance the level of risk assessment and detection but the literature on the relationship between Cressey’s theory and financial statement fraud is limited. The majority of researchers in detecting fraud utilized data from developed countries particularly USA. The current study extends the issue to Malaysian organization because according to PwC’s global economic crime survey (2011) 44% of respondents in Malaysia were victims to one or more frauds in 2011.The current study use proxy variables rating pressure/ motivation and opportunity, in accordance with prior studies. Second, this study test two legs of fraud triangle model to detect financial statement fraud, which can be beneficial not only for auditors and insiders but also investors and policymakers. The sample of this study selected from Security Commission Malaysia (SC), Bursa Malaysia and prior studies.Similar to Accounting and Auditing Enforcement Releases issued by US, the list of fraud firms collected from Security Commission Malaysia (SC) during 2002-2012. We also use the list recognized by (Kwan & Kwan, 2011) for fraudulent financial statement cases. All the financial data collected from DataStream database and annual reports of companies. Using40 fraud firms and 100 non-fraud firms, this study examines whether the proxy variables for fraud risk factors are correlated to likelihood of financial statement fraud.The findings suggest that all the pressure proxy variables (Sales to Accounts receivables and leverage)are positively correlated to level of financial statement fraud occurrence. It is also found that firms with more number of audit committee and board members as opportunity proxies experience low level of financial statement fraud.This study is organized as follows. The next section discusses the prior research and development of hypotheses, followed by research design and sample. In subsequent section empirical findings are reported and discussed. Finally, the conclusion is presented. Related Research and Development of Hypotheses: Recently, the involvement of researchers in fraud areahave grown rapidly to examine potential fraud risk factors to assess, predict and detect fraud (Persons, 1995; Beasley, 1996; Kaminski et al. 2004). For instance, Albercht& Romney (1986) examined usefulness of red flags in fraud prediction. Later, by establishing SAS 53 (1988), a large number of studies have focused on assessing risk of financial statements to find out the possible risk factors (Loebbecke, Eining, & Willingham, 1989). The other studies expandedLoebbecke et al. (1989) model to include a non-fraud sample and also find the best model for assessing risk and detecting fraud(Bell et al., 1991; Nieschwietz et al., 2000; Wilks&Zimbelman, 2004). The majority of studies utilized questionnaire to find out the significance of fraud risk factors determined through SAS 53 or SAS 82. For instance, Albrecht and Romney

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) (1986) employed 87 red flags and Bell and Carcello (2000) utilized 47 factors to estimate the likelihood of financial statement fraud. Asare and Wright (2004) compared the auditors utilizing the factors determined in SAS 82 with auditors who don’t use the checklist and found that the diagnoses are less effective amongst the first group. Smith et al. (2005) investigated the most significant factors that noticed by auditors to find out how auditors’ demographic factors influence the significance of fraud risk factors in Malaysia. The findings suggested that factors relating to operations and financial permanence have the highest effect, continuing with management attributions and finally affected by industry characteristics. Using publicly existing information, Calderon and Green (1994) evaluated fraud risk factors in predicting occurrence of financial reporting fraud.Later, various analytical procedures including financial and operational data has been used to predict and detect fraud (Blocher& Cooper,1988;Blocher, 1992). financial leverage, capital turnover, asset composition and firm size found as the most significant factors in fraud detection by Persons (1995). In contrast, some studies discussed about the limited ability of financial ratio in fraud detection (Kaminski et al. 2004; Apostolou et al., 2001). Hence, American Institute of Certified Public Accountant (AICPA 2002) issued different standards to prove that fraud influences the accounting and auditing functions seriously and also to enhance the level of fraud detection by introducing numbers of fraud risk factors (SAS 53, SAS 82 and SAS 99) (Heiman-Hoffman et al., 1996; Wilks&Zimbelman, 2004). Amongst different standards, SAS 99 is the only standard based on the fraud triangle model which will be discussed in this study. Cressey’s fraud theory which is defined as the fraud triangle theory was supported and used in professionals and developing standards as a tool for assessing fraud risks and fraud detection. The Commission of the Treadway Committee (1987) examined both supposed and proven occurrence of fraudulent financial reporting and prepared a report that confirmed Cressey’s findings. Results indicated that fraudulent financial reporting happens because of several forces including environmental, institutional, or individual forces and opportunities. These forces and opportunities increase the level of pressures which in turn support employees and companies to involve in fraudulent financial reporting. Moreover, the existence of correct, explosive mixture of forces and opportunities increase the prevalence of fraud in financial reporting. In 2002, SAS No. 99 supported the use of Cressey’s fraud triangle by mentioning that: “Three conditions generally are present when fraud occurs. First, management or other employees have an incentive or are under pressure, which provides a reason to commit fraud. Second, circumstances exist. Third, those involved are able to rationalize committing a fraudulent act. According to SAS No.99 auditors are required to detect the behaviors that are based on the fraud through evaluating the existence of each condition of pressure, opportunity and rationalization. Wilks and Zimbelman (2004) tested whether evaluating the management’s attitude, opportunity and incentive risk separately increase or decrease the level of fraud assessment by auditors. The questionnaire including 40 factors which has been determined based on SAS99, distributed amongst auditors. The findings indicated that when the perception of management’s attitude regarding risk of fraud is low, the level of sensitivity of auditors to opportunity and incentive is higher when they assess separately compare to assessing overall fraud risk. In another study, Skousen and Wright (2006) constructed a model consists of risk factors limited to pressures and opportunities to estimate the level of fraud. The findings indicated positive relationship between pressure and high level of fraud, and also suggested that high opportunity amongst the individuals increase the level of fraud occurrence in companies. To improve the previous study, Skousen, Smith andWright (2008) developed some proxies to measure the elements of fraud triangle and find the impact of these factors on predicting and detecting fraud in financial statement of companies. The study included five proxies for pressure and two proxies for opportunity that have significant impact on financial statement fraud. Lister (2007) suggested that pressure is a significant factor in committing fraud as “the source of heat for the fire”. He determined three types of pressure including personal, employment stress, and finally external pressure. Lister defined opportunity as “the fuel that keeps the fire going” and he mentioned that even if individuals are motivated to perform the fraud, they cannot carry out the crime unless they have sufficient opportunity. As the third component of the fraud triangle, rationalization defined as “the oxygen that keeps the fire burning”. Lister selected the corporate culture as a proxy to evaluate it instead of values of each individual separately. Vona (2008) examined personal and corporate pressures as motivations’ proxies for fraud commitment. The findings suggested direct relationship between opportunity and capability to hide the fraudulent behavior. Hence, identifying the opportunities that increase the occurrence of fraud, increase the ability of auditors to find out the fraud committed by individuals. The current study intends to construct a logical and simplifying model for fraud risk assessment instead of lengthy and subjective fraud checklists, and provide a useful tool for practitioners. Fraud risk factors proxies for pressure: Under Cressey’s (1953) framework, one leg of the fraud triangle represents a non-shareable financial requirement which arose from various situations. A number of studies examined different perspectives of pressure. For instance, Albrecht et al. (2008, 2010) divided pressure/motive into financial or non-financial and Murdock (2008) separated it into financial, non-financial, political and social pressure.Rae and Subramaniam (2008) studiedemployees’ motivation and financial pressure dimensions. Chen and Elder (2007) identified six basic categories for pressure including transgression of obligations, problems originated from personal failure, business inversion, physical isolation, status achievement and relationship between employees. Albrecht et al. (2006) divided pressure into four types including financial, vice, work-related and other pressure. The findings suggested that the majority of fraud originate from financial or vice-related pressure. Chen and Elder (2007) used three proxies including analysts forecast error, negative cash flow from operations, and percentage of directors’ shareholdings pledged for loans and credits to measure the pressure based on TSAS 43. According to TSAS 43, pressure increased in managers because of their profitability. In addition, managers focus on thresholds for earnings to influence the perceptions of financial statement users who are interested in organizations’ performance. One of the thresholds is analyst earnings forecast which can show the information about the persistence of earning (Barth & Hutton, 2004). TSAS 43 also proposed that financial stability or profitability can be influenced by economic, industry or entity operating situations. Additionally, it is suggested that the financial situation of management or board of directors is endangered by financial performance of organizations. Chen and Elder (2007) used the stock pledge ratio which is measured by the percentage of directors’ and supervisors’ shareholdings pledged for loans and credits as a proxy for financial requirements by individuals. Hence, the following hypotheses will be developed H1: There is a positive relationship between pressure and financial statement fraud occurrence.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Fraud Risk Factor Proxies for Opportunity: In accordance with fraud triangle model developed by Cressey (1953), pressure alone will not result in fraud commitment. The financial problems are motivations for individuals to do the fraud behavior, additionally the perpetrator should find out he or she has the opportunity to perform the fraud without being caught. Chen and Elder (2007) used three proxies based on TSAS 43 to measure opportunity including related party transactions, CEO duality and difference between control rights and cash flow rights. Moyes et al. (2005) surveyed amongst 77 internal auditors and found that the presence of related party transactions has the second rank amongst opportunity risk factors. Another study by Wilks and Zimbelman (2004) investigated 52 audit managers and suggested that related party transactions had third place amongst six factors. Ming and Wong (2003) also used this proxy to measure the opportunity. Another proxy determined by prior studies is ineffective monitoring that is caused by CEO duality. CEO duality increases the CEO entrenchment which decreases the shareholders interest. Vance (1983) suggested that CEO domination decrease the effectiveness of board to provideaccurate control over management activities. Another proxy is organizational structure. Claessens et al. (2000) proposed that family-control is a significant characteristic amongst Taiwanese listed companies that influence the fraud occurrence. In accordance with prior discussions, the second hypothesis will be distributed as follows: H2: The level of opportunity is positively related to financial statement fraud occurrence. 2. Methodology Regression Models: This study use the following logistic regression model to test the relationship between fraud risk factors and the level of fraud occurrence. Fraud= β0+ β1 SALAR + β2 LEV + β3 AUDCSIZE + β4BRDSIZE+ ε Where: FRAUD = indicator variable coded 1 if the firm is subject to a fraud and 0 otherwise. SALAR= Sales to Accounts receivables LEV= Total debt to Total assets AUCSIZE= Number of audit committee members BRDSIZE= Number of board of directors members The dependent variable, FRAUD, is a dummy variable proxy indicating whether the firm has engaged in fraud. Hypothesis 1 predicts that firms with pressure risk factors are more likely to engage in financial statementfraud. This studyassumes that the coefficients onsales to accounts receivables rate and leverageare positively associated with the fraud occurrence in organizations. Hypothesis 2 expects that firms with more opportunity are more likely to engage in fraud.We expect that the number of audit committee members and board of directors’ members are negatively associated with the likelihood of financial statement fraud occurrence. For testing our hypotheses, we use a regression model to test the association between the specific fraud risk factor proxies (pressures and opportunities) and the likelihood of financial statement fraud occurrence. Sample selection: The initial sample for this study is from two resources that include firms engaged in financial statement fraud. The list of fraud companies originated from a study in Malaysia which investigated the governance and company value (Kwan &Kwan, 2011). Another source for updatingfraud companies listis Security Commission Malaysia (SC) website.Data on leverage, total sale and account receivable is collected through DATASTREAM database. Another source of collecting these data is companies’ annual reports getting from Bursa Malaysia website. Our sample period starts from year 2002 and ends in year 2012 and identified 40 fraud companies and 100 non-fraud companies. 3. Results Table 1 presents the descriptive statistics for 40 fraud firms and 100 non-fraud firms with univariate tests. For pressure proxies, sale to account receivable (SALAR), on average, are 16.65 (4.54) for fraud (non-fraud) firms. The difference in SALAR between fraud and nonfraud firms is statistically significant at the 1% level, suggesting that fraud firms are associated with higher sales to account receivable. Leverage, on average, is 0.62 (0.22) percent of fraud (non-fraud) firms for the sample year. The difference in leverage between fraud and non-fraud firms is statistically significant at the 1% level, indicating that fraud firms are more likely to report negative leverage from operations than non-fraud firms. The mean of audit committee size is 3.07 (3.46) for fraud (non-fraud) firms. The difference in audit committee size between fraud and non-fraud firms is also statistically significant at the 1% level, suggesting fraud firms are associated with less number of audit committee. Additionally, the difference in number of board of directors between fraud and non-fraud firms is significant at 1 per cent level. Table 1: Sample Statistics Risk Factors Non-fraud firms (N=100) Mean Std. Dev Pressure SALAR 4.54 3.481 LEV 0.2238 0.2010 Opportunity AUDCSIZE 3.46 0.596 BRDSIZE 7.71 1.692

Fraud firms (N=40) Mean Std. Dev

Z value Wilcoxon Test

16.654 0.620

11.668 0.622

-6.510** -1.762*

3.07 6.00

0.258 1.069

-6.610** -6.530**

Table 2 presents the Pearson correlation matrix for the dependent and independent variables. Sale to Account receivable (SALAR) and Leverage (LEV) found to have positive relationship with fraud occurrence which are significant at 0.01 level. In contrast, audit committee and board size are negatively correlated with likelihood of fraudulent financial statement and both are significant at 0.05 and 0.01 levels, which is consistent with the related hypothesis.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Table 2: Correlation matrix for dependent and independent variables (n=56) Correlations SALAR leverage ACsize BSize FRAUD

SALAR 1 .145 -.211 -.315* .653**

leverage

ACsize

BSize

FRAUD

1 -.094 -.136 .444**

1 .210 -.320*

1 -.444**

1

The binary logistic regression analysis has been utilized for this study to test the hypotheses. Binary logistic regression refers to the instance in which the observed outcome can have only two possible types. In this study, the dependent variable has two possible ways of fraud and non-fraud so binary logistic regression method will be used. Tests of the hypotheses using the presence of fraud as the dependent variable are reported in Table 3. Hypothesis 1 predicts that firms with pressure risk factors are more likely to engage in fraud, whereas hypothesis 2 predicts that firms with opportunity risk factors are more likely to engage in fraudulent activities. The developed model regress the likelihood of financial statement fraud (FRAUD) based on fraud risk factor proxies (pressure and opportunity). The results indicate that the coefficients on sale to account receivable (B= 0.352) and leverage (B= 5.749) are significantly positive at 0.05 level, suggesting that firms with high pressure are more likely to experience fraud. In addition, audit committee and board size as proxies of opportunity and financial statement fraud found to have negative relationship, suggesting that firms with more number of audit committee and board members increase the level of internal control and in turn decrease the percentage of fraud occurrence in companies (B= -1.454 for AUDCSIZE; B= -0.735 for BRDSIZE). The findings also suggested that the effect of audit committee size is not significant but board size influence fraud significantly at 0.05 levels. Table 3: Logistic Regression of likelihood of fraud and fraud risk factors Variable Expected sign Coefficient Pressure SALAR + 0.352 LEV + 5.749 Opportunity AUDCSIZE _ -1.454 BRDSIZE _ -0.735

Wald

Sig

3.958 3.881

.047* .049*

1.368 4.278

0.242 .039*

4. Conclusion The current study examines two risk factors of fraud triangle which is the basis of different standards to evaluate the likelihood of fraud occurrence. 40 fraud and 100 non-fraud firms are used to develop and test a logistic regression model that estimates the likelihood of fraud occurrence. Proxy variables examined in this study includesale to account receivable (SALAR) and Leverage (LEV) for pressure and number of audit committee members (AUDCSIZE) and number of board members (BRDSIZE) for opportunity. Results indicate that likelihood of fraud occurrence is positively correlated to more sale to account receivable percentage and more leverage. It is suggested that the correlation between audit committee and board size are negative consistent to prior studies. The limitations of this study is the inability to identify the appropriate proxy for rationalization as SAS no.99 also noted about the difficulty associated with isolating characteristics used as indicators of rationalization. Reference Albrecht, W. S., Albrecht, C. & Albrecht, C. C. (2008). Current trends in fraud and its detection. Information Security Journal: A global perspective, 17(1), 1-32. Albrecht, C., Turnbull, C., Zhang, Y. & Skousen, C. J. (2010). The relationship between South Korean chaebols and fraud. Managerial Auditing Journal, 33(3), 1-25. Alleyne, P., Persaud, N., Alleyne, P., Greenidge, D. & Sealy, P. (2010). Perceived effectiveness of fraud detection audit procedures in a stock and warehousing cycle, Additional evidence from Barbados. Managerial Auditing Journal, 25(6), 553-568. American Institute of Certified Public Accountants (AICPA). (1984). Audit Risk and Materiality in Conducting an Audit. Statement on Auditing Standards No. 47. New York, NY: AICPA. American Institute of Certified Public Accountants (AICPA). (2002). Consideration of fraud in a financial statement audit. Statement on Auditing Standards No. 99. New York, NY: AICPA. Apostolou, B., Hassell, J., Webber, S. & Sumners, G. (2001). The Relative Importance of Management Fraud Risk Factors. Behavioral Research in Accounting, 13, 1-24. Asare, S. K. & Wright, A. M. (2004). Audit: The effectiveness of alternative risk assessment and program planning tools in a fraud setting. Contemporary Accounting Research, 21(2), 325–352. Association of Certified Fraud Examiners (ACFE). (2012). Report to the Nations on Occupational Fraud and Abuse, 2012 Global Fraud Survey. Auditing Standards Board. (2002). Statement on Auditing Standards No.99: Consideration of Fraud in a Financial Statement Audit. Beasley, M. (1996). An empirical analysis of the relation between the board of director composition and financial statement fraud. The Accounting Review, 71(4), 443-465. Bell, T., Szykowny, S. & Willingham, J. (1991). Assessing the likelihood of fraudulent financial reporting: A cascaded logit approach. Working Paper, KPMG Peat Marwick, Montvale, NJ.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Bell, T. B. & Carcello, J. V. (2000). A decision aid for assessing the likelihood of fraudulent financial reporting. Auditing: A Journal of Practice and Theory, 19(1), 169-184. Blocher, E. & Cooper, J. C. (1988). A Study of Auditors’ Analytical Review Performance. Auditing: A Journal of Practice and Theory, 7(2), 128. Blocher, E. (1992). The Role of Analytical Procedures in Detecting Management Fraud. Institute of Management Accountants, Montvale, NJ. Bonner, S. E. & Lewis, B. L. (1990). Determinants of auditor expertise. Journal of Accounting Research, 1-20. Calderon, T. G. & Green, B. P. (1994). Analysts’ Forecasts as an Exogenous Risk Indicator in Analytical Auditing. Advances in Accounting, 12, 281-300. Chen, K. Y. & Elder, R. J. (2007). Fraud Risk Factors and the Likelihood of Fraudulent Financial Reporting: Evidence from Statement on Auditing Standards No. 43 in Taiwan, Working paper. Claessens, S., Djankov, & L. Lang. (2000). The separation of ownership and control in East Asian Corporations. Journal of Financial Economics, 58, 81-112. Cressey, D. R. (1953). Other People’s Money. Montclair, NJ: Patterson Smith, pp.1-300. Hassink, H., Bollen, L. H., Meuwissen, R. H. G. & Vries, M. J. (2009). Corporate fraud and the audit expectations gap: A study among business managers. Journal of International Accounting, Auditing and Taxation, 18, 85-100. Heiman-Hoffman, V. B., Morgan, K. P.J. & Patton, M. (1996). The Warning Signs of Fraudulent Financial Reporting. Journal of Accountancy, 182(4), 75-81. International Auditing Standards Board. (2009). International Standard on Auditing No.240: the Auditor’s responsibilities relating to fraud in an audit of financial statements. Kaminski, K., T. Wetzel, & L. Guan. (2004). Can financial ratios detect fraudulent financial reporting? Managerial Auditing Journal, 19(1), 15-28. Kwan, J. H. & Kwan, S. S. (2011). Violation of listing requirements and company value: Evidence from Bursa Malaysia. International Review of Business Research Papers, 7(2), 257-268. Loebbecke, J., Eining, M. & Willingham, J. (1989). Auditors’ Experience with Material Irregularities: Frequency, Nature, and Detectability, Auditing. A Journal of Practice & Theory, 9(1), 1-28. Libby, R. & Tan, H. T. (1994). Modeling the determinants of audit expertise. Accounting, Organizations and Society, 19(8), 701-716. Lister, L. M. (2007). A practical approach to fraud risk. Internal Auditor, 1-30. Ming, J. J. & T. J. Wong. (2003). Earnings management and tunneling through related party transactions: Evidence from Chinese corporate groups. EFA 2003 Annual Conference, Paper No.549. Moyes, G. D. & Hasan, I. (1996). An empirical analysis of fraud detection likelihood. Managerial Auditing Journal, 11(3), 41-46. Moyes G., Lin, P. & Landry, Jr. R. (2005). Raise the red flag. Internal Auditor, October: 47-51. Mui, G. Y. (2009). Defining auditor expert performance in fraud detection. Accounting and Finance Association of Australia and New Zealand (AFAANZ) Murdock, H. (2008). The three dimensions of fraud. Internal Auditor, 1-14. Nieschwietz, R., J. Schultz, Jr. & Zimbelman, M. (2000). Empirical research on external auditors’ detection of financial statement fraud. Journal of Accounting Literature, 19, 190-246. Persons, O. (1995). Using financial statement data to identify factors associated with fraudulent financial reporting. Journal of Applied Business Research, 11(3), 38-46. Rae, K. & Subramaniam, N. (2008). Quality of internal control procedures: Antecedents and moderating effect on organizational justice and employee fraud. Managerial Auditing Journal, 23(2), 1-43. Skousen, C. & Wright, C. (2006). Contemporary risk factors and the prediction of financial statement fraud. Working Paper. University of Texas at Arlington and Oklahoma State University. Skousen, C. & Wright, C. (2008). Contemporaneous risk factors and the prediction of financial statement fraud. Journal of Forensic Accounting, 6, 37-62. Smith, M., Omar, N. H., SyadIdris, S. I. Z. & Baharuddin, I. (2005). Auditors’ perception on fraud risk indicators: Malaysian evidence. Managerial Auditing Journal, 20(1), 73-85. Vona, L. W. (2008). Fraud risk assessment: Building a fraud audit program. Hoboken New Jersey: John Wiley and Sons. Wilks, T. J. & Zimbelman, M. F. (2004). Decomposition of Fraud-Risk Assessments and Auditors’ Sensitivity to Fraud Cues. Contemporary Accounting Research, 21(3), 719-745.

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New Sight to Economic Development Progress in Developing Countries *Maryam

Jafari Galooyek, ZalehaMohd Noor University Putra Malaysia, Malaysia *[email protected]

Abstract: Economic development is a current phrase that seems so easy to define, but in truth is too equivocalword. Although this word was born after the Second World War, Smith’s invisible hand has already pointed the notion of economic development as growth in income per capita. Even today, economic development is synonym with the high level of income per capita and reduction of poverty to achieve the improved well-being and standard of living. It is the rational result of deep gap among poor and rich countries. Hence, development is not a word which we can put border for each especial dimensions. Development must include the other dimensions like social, economic, cultural and political development, all moving together. In this paper, we will show the usage of economic growth to explain a special filed of development is a mistake. A society will experience economic development when the whole of the dimensions of development is achieved along with economic growth. The final goal of this paper is to show a new viewpoint of development progress to preparethe background for humantalent to flourish. Keyword: Economic Development, Economic Growth, Human life, Well-being, Poverty 1. Introduction Development is an abstruse key concept, which everyone knows it but its exact definition is too difficult to explain. Development includes various notion of society; politics, economics, and culture, as result different groups of scholars try to define it according to their specialized area. In addition, several level of income, technology, education, and health or totally the public welfare have caused that the countries divide to three groups of countries, which named developed, developing and under developing countries. In other word, development is a reason to movement and transfer of communities to increase the level of welfare of people. The use of word of development deployed after the World War II, for example, Nielsen believes by ending the Second World War, decolonization and independent of countries as new economies, they understood that they should exit from poverty, misery and destitution and depart to situation of countries which are pioneer of the level of income and well-being.(Nielsen, 2011) Nevertheless, most experts of development consider the longer history for the word of development. Grabowski and his colleagues, with relying on theory of Clark (1940), show the economic development was born after the Great Depression, it means in1929, that it more explains the conditions of residents of nonadvanced capitalism countries.(Grabowski, Self, & Shields, 2007) If the word of development is synonym by concepts like increasing in income and improving level of standard of living, we can say that Smith (1776) has also pointed development, since he presumes that economic growth will cause disappearing the poverty and bettering the income of inhabitances of society.(Smith, 2006) Moreover, Sen (2001) displays that the economic view to development is a motive to say that the time of born of notion of development is 1676 when Sir William Petty focuses on the subsistence and level of income of habitants, also he describes in each community, people should have security and happiness. The most important point, which we should talk about it, is in the mind of people of different countries including rich or poor, the word of development is reminding economic development. In other word, development means the raise in national production and income, availability of advanced technology, decrease of mortality, and improvement of level of education and health. Then Smith (1776), Malthus (1798), Ricardo (1817), Marx and Engels (1814), Weber (1905),Rosenstein-Rodan (1957), Singer (1952), Myrdal (1953), Lewis (1955),Rostow (1955), Hirschman (1958), Schumpeter (1962), Clark (1964), Prebisch (1988), M. Todaro (1989), Helpman (2004), andYusuf and Deaton (2009) are theoreticians who have illustrated augmenting in national income and employment is the our major goal in each country. Of course, it is undeniable that economic development has closely relationship with concepts like growth of food resource, cloths and housing, health and education services, and changing in structure of production. Although these factors are considered as required operative for economic growth, economic growth is not comprehensive equivalent to economic development, as well as economic development cannot lonely be explain the meaning of development. Economic growth and development and public welfare are necessary to development process but they are not enough. Altogether, aim of our study is to display development as integration of positive evolution of economic, social, political, and cultural aspects, which they are not single executable in society. In better word, progress of economy in each community will happen, when a society has the ideal, effective and optimum situation to attain political, cultural, and social advance. Hence, not only social development, political development, economic or cultural development are not complete concepts but also they cannot be separately considered as the final goal for each country. What, for countries, is debated, discussed, and planned, as the final goal is achievement development as complete and perfect word to have the best and idealist position for life in each community. Then, against the theories, which are related to topics of development, concentrate on developing and under developing countries, we, by new definition of development as conclusive aim, will indicate in countries, which are known as developed societies the conditions of development have not been implemented yet and in most developed countries some people are deprived from their primary human rights. In this study, development will be defined as preparing the required background to flourish human talent to gain the highest level of satisfaction and happiness in their life. For this purpose in part two, we will investigate the essential literature to offer our new definition of development. Part 3 will focus on data and needed information to show the lack of ability of economic growth and even economic development to explain the word of development. Finally, in part four we will offer a summary and result what has been said in this study. Background of definitions of economic development: To explain the word of development, there are so many definitions, which it seems the economic approach of compliment of development is the strongest approaches in the mind of population. Moreover, the biggest imperfection of this thinking, to describe the word of development, is to investigate and assess the situation of development by

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) progressing in the quantitative production or changing in national income as well as using the advanced technology and having the better education and health services. For this end we can strongly say that infrastructure of this approach returns into the birth of economic in 1776 by Adam Smith. Since he clarifies the human, pursue directions, which achieve, distribute, and grow the wealth easily. In other word, the aim of the human life is accessing the highest level of satisfaction that will be available by attaining more wealth.(Smith, 2006) Although, sometimes, scholars of other subset of social sciences offer their view about the necessity of moving forward in their specialty, up to end of twentieth century, economic attitudes was the major factor to qualify the development situation. As result, each economic progress could be considered as being development oriented of each community. This thinking caused (Smith, 1776), (Malthus, 1926), (Ricardo & Hartwell, 1971), (Marx & Engels, 1967), and (Weber, Baehr, & Wells, 2002) focus on economic growth as final goal of human life. We can forcefully say that the discussion of development started from eighteenth century when the Europe was experiencing the Renaissance and industrial revolution. Pressure of industrialization and growth of technology with takeover of market of Colonial countries are reasons to divide the world into two groups: first, advanced Christian and second, others. Nevertheless, the occurrence of Great Depression in the first half of twentieth century incurred Western countries could not move forward, European countries also the United States meet turndown insofar as unemployment rate fell to 25% in the United States. Great Depression in 1929 entailed the name of Keynes shins like Smith, as advocate of capitalism, and Marx, as critic of capitalism, among other economists. Although the general theory of Keynes was as a solution to escape from turndown and government has been the key and effective factor to this goal, he like other colleges, depicts the aim of economic study is to attain high rate of economic growth to feel the well-being. In addition, Keynes believes that the intervention of government in balancing the market is necessary and undeniable. (Keynes, 2006). Then we can say the new view of Keynes caused to formulate the modern development process by economists. Marshal plan was good sample from a long run planning of development, to create a formidable market for American goods to prevent second dominate of Communism in Europe.(Kindleberger, 2009). After World War II, World was divided two groups: first world or west block which includes capitalism, and second world or east block that they consists communism and socialism areas. Nevertheless, there were so many countries, which did not belong to any groups, and they were mainly poor communities. This kind of division of the universe as well as countries had been destroyed in the war and finally the newly independent countries after Second World War were motives to appear the thinking of modern development concept although most of them follow the notion of economic growth. In other world, the main goal of policy making of economic development in the fifties was to reach economic growth. Since most economists believed, we can eliminate the imbalance in income and social unbalance by economic growth and reconstruction of structures. The theory of Big Push of Rosenstein(Rosenstein-Rodan, 1957) or the stages of growth of Rostow(Rostow, 1955) are samples of this kind of thinking. Rosenstein, in Big Push, emphasizes to remove all the impediments of economic development in developing countries; we need a comprehensive planning in total economic sectors in the same time. He shows that in all poor countries we face downturn as result only by investing in all economic sectors of a community simultaneously, we can move to better economic situation in first stage and economic development in the second stage. Moreover, poor countries because of absence of market mechanism to adjust the prices as well as the weakness of the productive factors, need powerful government to allocate the limited resources to development plans.(Rosenstein-Rodan, 1957). Singer is another development economist that offers his development theory in format of economic growth theories. He believes the economy is not a permanently truth, then we cannot expect its rules are practical in all countries. He illustrates what is cause of economic growth, in industrial countries, has been the imbalance commercial relationship between rich and poor countries. He, in his theory, has emphasized that most countries from third world usually are only exporters of high-grade row materials and low price, also they are importers the manufactured goods by high added value from industrial countries whose access high political power and technology. It is clear that the profit of trade will belong to rich societies.(Singer, 1952). Myrdal is one of the most prominent economists who worked on social situation of countries. He disagrees with economic scientists who believe the social imbalances are the result of absence of economic. He displays the unbalance situation in social position is the major factor to low level of economic growth.(Myrdal, 1990). An interesting point about this theory is the final aim of this study, which like others is focused on economic growth as the ultimate goal. In his view, development and growth are similar. Many scholars believe that Lewis is the founder of economic development as a special and independent filed of economics. Nevertheless, it is truth he also repeats what last economists and social sciences have said about the goal of human life. He mentions that we should consider the word of development is feature of countries, which have been colony of advanced economies. Lewis claims the economic structures in each society have been divided to two parts: traditional part, which includes agriculture with low productivity and surplus of labors. In addition, industry that high rate of productivity is the most important feature of it. Industry is able to attract gradually the surplus of labors from agriculture(Lewis, 1955) If we judge optimistically, we should say this theory entailed unintentionally agriculture was destroyed in developing countries like Asian, African and Latin American society, against he says we should concentrate on exporting the agricultural goods. In Seventies, most developing countries use the import substitution policy to provide the demand of agriculture production of their residents. However, some economic expert express that Lewis in his theory persuades the developing countries to export the agricultural raw materials, we can even claim pessimistically Lewis was completely aware to transfer the labor forces from agriculture to industry since it can cause these countries still dependent on advanced countries. It is clear that we cannot deny the development of industry has been result of development of agriculture. Economists confirm that England could have the first class loom industry in the world since it had access to Indian land of cotton. Overall, what point is important for us is that Lewis theory like others offer solutions for countries of third world to have high economic growth in his opinion also when human can be happy and lucky which have more money and wealth. Rostow is other economist who believes to develop our society we should move to industrial community. In his view what can provide the social welfare for the residents, is the economic growth that it will appear in our country by industrialization. He clarifies development process includes five stages which their goal is to reach economic growth as only instrument to create the public wellbeing.(Rostow, 1955). Paying attention to economic growth, as a major tool to reach highest level of standard of living, is the key subject, which Rostow has pointed in his theory. Although we cannot disprove it, economic growth is not enough to develop societies. The interesting point, which that Rostow emphasizes on it, is the intervention of advanced countries especially the United States to help developing areas. He claims third world’s residents are inherently schismatic also they are unaware of growing the science and

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) technology, as result, appearance of developed communities because they learn modern science and new technology as well as they will know advanced culture also the political convulsions will decline in their regions. In other world, they will feel peace and democracy.(Rostow, 1955). It sounds, what Rostow has explained is only justification to intervene west countries. Though we do not like to have pessimistic judgment in this paper, we strongly believe attendance of western in developing countries not only help them to improve their situation but also is an explanation to despoil raw and scare resources. The experiments of developing countries showed when they could be successful to achieve economic growth; they rely on their power and try to change modern technology or social, economic and political plans according to their native indicators. Hirschman, by enforcing of combined development in Colombia in 1955, illustrates development consists the process of imbalance growth and allocating of money resources to functions which need investment. Hirschman in his theory “imbalance growth” displays at first, we should choose the strategic part of economy, which have the maximum profit for our society. Investing in these selected parts of economy caused these parts as a leader of growth process pull other parts of economy like a Locomotive. As result, the growth of advanced industries and areas will transfer to underdeveloped sections.(Hirschman, 1972). Here we do not want to criticize the theory of “imbalance growth” only we mention that Hirschman is also showing the development process as economy is growth and everybody try to improve the level of production of different parts of economy. Schumpeter defines development is as optional changing in business cycle which are result of innovators who look for the profit.(Schumpeter, 1961) this definition is enough that we understand his theory has formed base on economic growth. Schumpeter believes that innovation is the engine of economic growth since in a free economy we face depression which if it continues, economy will decompose because of depreciation of productions. Then innovators can only rescue the economy by their innovation in production process. Schumpeter explains that innovators are people who have the high knowledge, ability to do, accepting risk, and willingness to reach profit. (Schumpeter, 1961). Although in theory of Schumpeter, we need tools to bring up innovators like social background, technical knowledge, needed capital, low intervention of government, raw resources, new markets, financial supporter and so many factors that we cannot focus on it as development theory. As said before, the aim of this theory is also to achieve economic growth to satisfy what people require to have happy life. Another theory about economic growth is the theory of Clark. He illustrated the development degree of countries can be shown by transferring of labor force among different parts of economy. Clark explains that in developing countries we need minimum investment to create infrastructures like public transportation, which is necessary to grow the agriculture.(Clark & Haswell, 1964). The positive point about the economic growth theory of Clark is that, he believes development of industry and services need an advanced agriculture. In short, he accepts the truth which development in advanced countries has been a smooth process that it has started from agriculture. Of course, there are so many critics about the theory of Clark, and although it was one applicable theory for developing countries, what Clark has only pointed was growth of economic. Labor force, advanced agriculture, growth of industry and services sectors is instrument to attain the economic growth. In other word, Clark also defines development as economic growth and progress. Prebisch, who has grown by the neoclassical thinking, criticizes seriously neoclassicism to persuade developing countries to follow extrovert development process. Prebisch, in his theory in 1949, draws picture of system, which the developed countries located, in the center and developing areas are at the circumference.(Prébisch, 1950) The strong point of Prebisch’s opinion is that his new glance to development progress in 1988. He believes that progress of a country depends on economic and social factors. Prebisch explains that we cannot separate economic variables from their social aspects. Follower countries have not been able to better their situation since they have made mistake to follow the developed countries and do what has exactly been done in north countries.(Prebisch, 1988). Although Prebisch recommends solving the problems of low developed countries, we need transformation of systems in all aspects; his solution is the weak point of this theory. Because Prebisch suggests to attain the progress and development process in developing countries, they need a system which includes humanitarian socialism and economic liberalism.(Prebisch, 1988) it is obvious, determining of political system, without considering the situation of each country, is a kind of limitation which is forced countries also it is an obstacle to be freedom of human. In approaching nineties, development theory was gradually being formed based on changing of social institutions. We almost say Todaro is one of the first development economists, which offered his theory according to third world situation. He accepts that the historical experiments are not true for all the societies, but also to move forward should be considered separately the situation of each country. Todaro defines the word of development as a continuous improvement of a society, which has happened because of changing fundamentally in infrastructures and institutions. In that time a community can claim that it has prepared three basically factors to develop the country: livelihood, confidence, and freedom.(M. Todaro, 1989). Although Todaro has offered a different definition of development in comparison with other economists and paid attention to transformation of infrastructures and institution, he finally concentrates on production and increasing the national income. On the other word, he explains development as economic growth. Bettering the economic situation of Southeast countries, like Japan, South Korea, Singapore, Malaysia, and Hong Kong, was a motivation for East development economists who offer their opinion and view. Hayami demonstrates development is possibility of escaping of poverty in developing countries. He believes the increasing income, to decline the poverty, depends on growing the economic resources, progressing in technology, and modern institutions, which they are parts of culture. Then the high levels of income appertain to evolution of social and cultural parameters. As result, the most important factor, which the developing countries have to consider, is attaining effective economic system, which is exactly based on social and cultural traditions. Hayami defines this economic system as mixture of market, government, and society.(Hayami & Godo, 2005). Helpman, to explain his theory, starts with a question: why some countries are rich and some are poor? Helpman believes this question has never answered since Adam Smith. In short, Helpman describes economists could not solve the mystery of growth yet. Obviously, he only focuses on income per capita as a measurement to show the living standard and compare it among different countries. Although Helpamn does not deny the issues like political freedom, health, education, environment, and social security which people care them to improve their situation, he depicts the standard of living include all the social and economic objects but it is so different to measure them as well as how to weight these factors in the mixed measurement. For this purpose, using income per capita is the best and clearest factor to identify and compare the situation of different countries.(Helpman, 2004). Ranis by investigating the last six decades also the trend of

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) economic growth and improvement the situation of human, focuses on growth of economy. He enumerates factors like concentrating on the relationship between decentralization and democratization, material resources, foreign capital and political effort, which help developing economy. Ranis by studying parts of the world such as Africa, South Asia, and Latin America refers to worthy issue which we should consider two-way connection between economic growth and human development. In his opinion, when we can expect happening long-run improvement in human life and which is paid attention to growth and progress of human development in the same time. Kanbur, to define and clarify the development process, depicts that influence of ideology has been more important than experience of different countries in evolution of development. Then he divides the process of development to three times: 1955 to 1980, 1980 to 2000, and 2000 up to now. Kanbur in his study concludes development should be defined as ideology of mixed of capitalism, and communist. In the other hand, development is integrated process from state, market, and urban society.(Kanbur, 2004) In this theory, we are also witness the economic growth as a goal of each ideology. Finally, Yusuf (2009) in his book “development economic through the decades” tries to demonstrate societies look for economic growth to decline the poverty. In other word, he emphasizes final aim for each community is to eradicate the poverty. Yusuf, by using the experience of developing countries after Great depression, displays although we need evolution of agriculture, industry, infrastructures, climate change, and the role of government, and even the process of globalization, all these issues should be done to attain the economic growth as a tools to reduce the poverty and improve the income equality.(Yusuf & Deaton, 2009). Since time of birth of economics up today, all economists have been thinking how to enhance the level of public welfare and the satisfaction of people. After ending of the World War II and the efforts for the reconstruction of the world, and exiting the economic development as subcategories of economy, all the countries from north to south move to build and construct the incumbent infrastructures to raise national production and the level of standard of living. In this time, small group was at the forefront of movement (developed countries) and rest of countries as following groups pursued these changes. In spite of many efforts of following countries to decline their distance with pioneer economies, by modeling from leader countries, but most societies failed and not only they could not achieve better position but also, experienced worse situation in comparison with past. It is clear that development is not one-dimensional notion, which we can offer separately definition for each dimension. The concept of development has been taken from ideology of each society, which form based on thoughts of residents of that society, and to define each dimension must be considered all the aspects. As result, when we call “economic development” our purpose is changes and movement foreword in a community when can improve the economic situation that it can move with ameliorated conditions of social, political, and cultural features. We can strongly say that the most principal problem in developing countries is the huge mass of population who experience the low level of standard of living, and another problem, which this kind of countries, face them is that poverty, in most time, is not been only explained with economic variables and factors. Consequently, most experts believe that development is a concept, which should be described by both factors: economic and non-economic indicators. Undoubtedly, we can strongly say that the theory of development of Sen, one of the most prominent theory of development, with considering all the divers status like social, economic, political and cultural parameters can fill the vacuum of ignoring the non-economic factors. The theory of “ Development as Freedom” not only define the freedom as the final goal of development, but also knows it as the development ‘s fundamental instruments which can boost the public welfare of people, enhance the level of standard living and as result improve the satisfaction of residents of a society. Sen believes that, now, we live in a world which faces unprecedented affluence in comparing with last one or two centuries. In development theory of Sen, development is defined as the real freedom of humanity. In his theorization, not only development is not equal with growth of national income, raise of personal income, industrialization, progress of IT and modernization, but also it is in contrast to these characteristics. Accordingly, in process of development, we can result that freedom is important for two reasons: 1) Measuring of progress of development direction should be done by boosting of people’s freedom. 2) Attaining development is dependent on free responsibilities of people. In other word, stable freedom based on responsibility is the main engine to development. Moreover, Sen illustrates freedom is the goal of development as well as it is proper instrument to development. He counts five type of freedom 1Political freedom 2Economic facilities 3Social opportunities 4Clarity of commitments 5Supportive security He believes that these freedoms can improve the ability of people to alter their social, political, economic, and cultural situation and achieve the highest level of satisfaction.(Sen, 2001). An interesting point in theory of Sen is that development process in each region is different from others. Since he believes that the numerous aspects of freedom in each country is according to the culture of this area and we cannot expect copying of development plans from advanced countries by developing countries have successful result for them. Szirmai is another economists who believes to define the word of development we should consider both economic and non-economic factors. He, by relying on Myint’s theory (1980), displays that development can be identified in two views:(Szirmai, 2005) 1) Development is a conflict with poverty. According to this viewpoint, in developing countries, the original problems are the poverty, famine, starvation, and widespread disaster. Then the main concern of economists in these countries is how to improve the situation of residents in short time. 2) The approach, which focuses on development as a long-term progress, and by studying on historical terms and different situation of countries, brings out the factors which impacts on social and economic evolution. The central core of the first approach is based on widespread poverty in developing countries. Szirmai believes that in these countries, three routes are defined to achieve their goals. Route one, which has been called technocrats, concentrates on instruments and projects. In route two experts opt a radical-political way. Moreover, route three, people focus on a political practices to gain a demonstrative changes.(Szirmai, 2005). Nevertheless, the focus of second view is on being long-term progress. One group seeks the answer of this question why there are many differences in development process among different countries in long time. But one group endeavor to

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) recognize facts which can clarify numerous type of development like efficiency, technological movement, external political, economic impression, historical factors, differences in culture for long period. Sen in the comprehensive and complete theory of development, explains that elimination of unfreedom means development, also he describes unfreedom consists economic and non-economic obstacles which can restrict the directions and situation of achieving the high level of standard living and satisfaction. Szirmai in his theory points development is concept includes economic and non-economic factors, which will happen in long term. Thereupon, we can strongly say economic development is not separated from other dimensions of development, when we can experience attaining economic development which occurrence a comprehensive progress in society by all the economic and non-economic factors. It will entail that the upgrade of public welfare. Therefore, we should say that economic development arise in a society which all the dimensions like social, economic, cultural, and political will move forward and improve their position. Then this situation is equal with development process. As result we can claim when economic development happen that social development also occurrence according to this issue, Morris and Farrai offer their theory, which is describing the complete real concept of development process in each society. Morris asks this question why western countries could always move forward in comparison with other societies.(Morris & Farrar, 2010) It seems western could always determine all the law and plans for most countries which almost are poor. Domination of Europe on maritime trade, in half of eighteenth century, colonization, and transformation of western culture to eastern countries like changing the native language to English and national orthography of are examples which shows western has always desired to be leader of the world. To answer this question we face two groups of opinions: First group which has been named lock-in, being long-run is the most significant characters of this group, is based on ability of western country to overcome whole the world because of strong culture, appropriate climate, and religious beliefs. Second group are the short time models which is called random theory pointes this issue that key to success of western, to dominate poor countries, is to attain the their recourses of fossil fuels, it could transfer the power to advanced communities. Of course, Morris believes we can answer this question easily because has been offered diverse discussion, which has had several result in different times. He explains may be the best answer to this question is the social development, which means the ability of a group of people in a society to achieve the highest rating of physical and intellectual environment. In better world, social development is a collection of cultural, organizational, and technical abilities, which help residents of a society to have food, cloths, and housing, opportunity of fertility, as well as to defend them versus attacking other societies, finally to solve their problems and to develop the different discussion and issue in their communities. In other word, social development means ability to find and know the people’s power and their position with the highest ranking of prestige among other countries. In conclusion, Morris mentions four major factors as independent variables to make the social development that they are: Energy Capture, Organization, War-Making Capacity, and information Technology.(Morris & Farrar, 2010) However, what we look for it, is this issue, development is result of economic and non-economic factors which economic growth is one of the tools to achieve the highest level of satisfaction of people who lives in society. In other hand, we should say the economic development is not a very facile concept to understand and investigate. Various subjects organize the basic of this notion, which is obtained according the conceptual discussion, and new insight that is result of experimental doing and study on behavior of people and societies. This new view illustrates that societies seek development not economic, social, political, and cultural development. development is a collection of difference notions such as economy, society, politics, and culture which they have strong relationship with each other. We can expect one aspect of this collection happen without occurring others. Consequently, what communities should look for it is the whole the set of development that is has offered a new definition in next part. 2. Finding The perfect economic situation of Western Europe and North America countries due to the high national production in comparison with other countries, which has been named developing and under developing, caused these countries are noticed as a reference or symbol or sample for developing areas. Nevertheless, the experience of developing countries confirmed the most them not only do not ameliorate their economic situation but also, in some countries the poverty was vastly spread and people had the worse situation in a comparative discussion. Consequently, this event illustrates development is not similar growth and it needs factors which most of them are not economical. Moreover, we think the economic development is a notion, which reflects the whole of the social subjects and directly relates with behavior of humanity and what satisfy the human spirit. When people are unsatisfied, we cannot exactly expect to be in well-being circumstances. For example, in France as a developed country, attendance of Muslim women with veiled in governmental university, organization, and institution is forbidden. We mean, the women freedom is limited in this country and Muslim women always are discontent then it is possible that the dissatisfaction declines the motivation and tendency to be active in economic progress. Consequently, productivity, national production, national income, and level of welfare will be reduced in long run. Economic as a kind of social science has been constructed on two pillars: humankind and social system, which its goal is to create satisfaction as well as improve the level of standard of living albeit, Todaro and Smith believe the economic investigation and analysis cannot explain the behavior of human when society face vast hungry, poverty, illness, and… .(M. P. Todaro & Smith, 2011). Our world has been divided two parts: first side has been named developed or first world by the high rate of national production and employment, low rate of poverty and justified distributed income, low rate of mortality and so many variables that show residents of this part are happy and satisfied. In contrast, second side is called developing or third world is not similar north and the considerable point is that from 7 billion population of the world about 6.4 billion people live in south. Features like the low level of GDP, high level of fatality especial in women and babies, high rate of children who have to work, and low rate of literacy show adversity of human in this part of the world. In a traditional view, economic development is capacity of increasing of national economy whose generate an annual raise in gross domestic production (GDP). Of course, we cannot ignore the increased production or growth of GDP cause to promote human life and reduce problems like poverty, hunger, depression in people, violence, and delinquency but it can make problems like what, nowadays, the people of the world are scrimmaging. For example, the spread of greenhouse gases or the problems of nuclear waste disposal are what, today, the development countries face them. To understand better the difference between economic development and economic growth, consider the table 1-1, which is related to gross domestic production per capita and life expectancy, where they are

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) index of economic development, for five countries: China, Seri-Lanka, Brazil, Mexico, and South Africa by 2010. As shown by the table 1.1, the GDP per capita in South Africa is higher than China and Seri-Lanka but the life expectancy in this country is noticeably lower than they are. Moreover, this result is true when we compare between Brazil and Seri-Lanka. In addition, we can show this comparison between GDP per capita and Happiness. Table 1-2 illustrates this relationship: Table 1-2 shows that the relationship between GDP per capita and Ranking of Happiness among four countries, China, Brazil, South Africa, and Turkey. As been shown, the GDP per capita in 2010 for turkey was about 7833.5 and in Brazil this amount has been 5618.3 while Brazil is the twenty forth country of the World with the index of happiness about 6.849 but in turkey this amount is 5.345 and it is the seventy seventh countries of the world. Moreover, we can compare between China and South Africa which although the standard of living in Africa is higher than China, residents of China are Happier than South Africa. This comparison shows that we must not introduce the economic development instead economic growth they are not the similar. Although, increase of GDP by being constant other situation should improve the life of people and usually can raise the longevity, so many variables are which influence the life situation and the notion of development cannot ignore them. Deficiency of GDP as a measurement of being in welfare situation, also the new look glance of development in theory of Sen, based on income and wealth are only instruments to measure the well-being indexes and they are not our goals, disclosed that we need more complete tools of deliberation to investigate the different dimension of development. To understand better, Sen explains the poverty cannot only be shown by relative income since it is not important what we have or even what we feel but also, when we can claim that have eradicated the poverty, people can be or do what they want.(Sen, 2001) Table 1-1- GDP and Life expectancy Life expectancy in born

GDP per capita

2010 (year)

2010 ($ Constant 2000)

China

73.3

2426.3

Seri-Lanka

74.7

1308.7

Brazil

73.1

4716.6

Mexico

76.7

6124.7

South Africa Source: World Bank Data (2012)

52.1

3753.4

Table 1-2- GDP and Ranking of Happiness Ranking in the world 2010 Brazil 24 Turkey 77 China 93 South Africa 96 Source: (Helliwell, Layard, & Sachs, 2012)

The Index of Happiness 2010 6.849 5.345 4.978 4.963

GDP per capita 2010 ($ Constant 2005) 5618.3246 7833.52866 2869.09382 5794.33635

It is evident; the purpose of development study is to attain a better and high level of standard of living. Development with all its subsets and derivatives including social, economic, political, and cultural will cause we have better understanding of our environment and societies which we are living and how to solve our different problems and difficulties which are sometimes barrier to achieve the our final goal, means having a happy life by so high level of satisfaction. While, too many theories about development have been offered which most them emphasize on economic motivation of development. When we talk about development, people pay attention to economic growth, increase of usage of new technology, level of industrialization, and like that. It seems the theory of Sen about development is the most complete opinions that have been offered up to now. As pointed before, Sen in his theory credits development is freedom. (Sen, 2001) In his view, freedom not only is the final goal of development but also is the powerful instrument to development. He explains that focus on freedom as development when is considerable that we recognize the relationship among different dimensions of freedom. For example, the political freedom helps us advancing of economic securities. Social opportunities simplify the economic participations. Economic facilities also increase the income of people and provide the required resources to create the social facilities. With all due respect, to Professor Amartya Sen and mentioning the topic that, we should firmly follow the subject that economy and development, based on freedom, are informed and responsible concepts, which if the enough social opportunities are prepared, people can build their future. Therefore, we should not expect which human only receive the achievement of development programs but also they must have dynamic and positive role to construct their destiny. As result, here, we can define the development as providing needed background to flourish the talent of free human to build their future to achieve the high level of satisfaction. Overall, it is better to say that development is an intellectual and ideal concept, which no societies has completely experienced yet and what countries follow it, by different plans and policies, is advanced implication of economic growth. Then we believe the economic development is the set of the economic growth and social development, as the integration of changes in culture, politics, and societies, to provide the necessary background to flourish human talent and potential. In other word, to achieve development, we need groundwork to show and use our capabilities and capacity to produce the more goods and services and to raise the social, cultural, and political indexes and create the welfare and well-being for humankind. Finally, the important and interesting point, should be considered, is the differences in essential background to appearance, and bring up the human capacity in different societies. It means the notion of human will be defined according to the especial ideology in each society. Therefore, countries can prepare the incumbent groundwork to appearance the people basis on the beliefs, values, and dos and don'ts that belong to each community. Moreover, different ideology has caused not only, copying of development models from developed areas cannot solve the problems of developing and under developing countries but also, in most

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) time their situation has been worsened. Now by this discretion of the economic development, it is better to be replaced by only development as a collection of positive economic, social, political, and cultural changes. 3. Conclusion Economic development is a current phrase with acceptable goals but the obscure concept. Genesis of this word refers to years after World War II when the countries started to reconstruct infrastructures, which had been destroyed in the war. In addition, many countries in these years became independent. Although, before the Second World War most economists believed that economy should also answer this question how can an economy grow and improve its situation besides replaying to these question, what things, how much, how and for who must be produced. For example, Smith (1776) repeatedly refers to economic growth topics by competitive market mechanism. However, there is a truth which, development can be defined by a dipole view. First the opinion, which assesses the concept of development with, measures like growth of national production, increase of income, industrialization, growth of IT and technology. Second the sight that evaluates the development as progress of real freedom and only has one measure, which is the satisfaction of people of a society. As we know, most economists, from smith up to now, have emphasized on the first viewpoint. Nevertheless, by selecting the first view is forgotten the most important components of development, which are fundamental for development process, and the absence of them can destroy the aims of economic development, also deprive the development of having required instrument to achieve its goals. While the second option of development definition has been examined in the whole of the world and has proved its performance. In addition, first definition of development looks for income, it means, the goal of development is attainment of high level of national income for each society. However,our second choice of defining the development seeks the situation which people feel peace and are satisfied form their life. They are happy and live without any limitation but freedom dose not bother others. Although, the national income, itself, is an achievement can promote our satisfaction and help us to attain the happiness andcalmness as an appropriate tool. In short, difference between two views of definition of development refers to emphasis on income and wealth from the first option and focus on being free and freedom. Since we strongly believe a society will develop when ability and capacity of societies will be improved and increase to prosper the talent of human. As result, we can claim when it happen that the freedom is born. Overall, we should have new regard to development and it seems to be necessary to offer the more complete definition of notion of development, which involves all the economic and noneconomic parameters to flourish the talent of human to be at peak of standard of living. With all due respect, to Professor Amartya Sen and mentioning the subject that, the theory of development as freedom is the most complete theories about development, we should firmly follow the subject that economy and development, based on freedom, are informed and responsible concepts, which if the enough social opportunities are prepared, people can build their future. Therefore, we should not expect which human only receive the achievement of development programs but also they must have dynamic and positive role to construct their destiny. As result, here, we can define the development as providing needed background to flourish the talent of free human to build their future to achieve the high level of satisfaction. References Clark, C. (1940). The conditions of economic progress (Vol. 195): Macmillan London. Clark, C. & Haswell, M. R. (1964). The economics of subsistence agriculture. The economics of subsistence agriculture. Grabowski, R., Self, S. & Shields, M. P. (2007). Economic development: a regional, institutional, and historical approach: ME Sharpe Inc. Hayami, Y. & Godo, Y. (2005). Development economics: from the poverty to the wealth of nations: Oxford University Press. Helliwell, J., Layard, R. & Sachs, J. (2012). World happiness report. Helpman, E. (2004). The mystery of economic growth: Harvard University Press. Hirschman, A. O. (1972). The Strategie of Economic Development. Kanbur, R. (2004). The development of development thinking. Journal of Social and Economic Development, 6(2), 147. Keynes, J. M. (2006). The general theory of employment, interest and money: Atlantic Publishers & Distributors. Kindleberger, C. P. (2009). Marshall plan days: Taylor & Francis. Lewis, W. A. (1955). The theory of economic growth: Allen & Unwin London. Malthus, T. R. (1926). First essay on population 1798. Marx, K. & Engels, F. (1967). The communist manifesto (1848). Trans. AJP Taylor. London: Penguin. Morris, I. & Farrar, S. (2010). Why the West Rules-for Now: The Patterns of History and what They Reveal about the Future: Profile Books. Myrdal, G. (1990). The political element in the development of economic theory: Transaction Publishers. Nielsen, L. (2011). Classifications of Countries Based on Their Level of Development: How it is done and how it could be done: International Monetary Fund. Prebisch, R. (1988). Dependence, development, and interdependence. The State of Development Economics. Oxford, United Kingdom: Basil Blackwell. Prébisch, R. (1950). Economic Survey of Latin America 1949. New York: United. Ranis, G. (2004). The evolution of development thinking: theory and policy. ABCDE, 119. Ricardo, D. & Hartwell, R. M. (1971). On the principles of political economy, and taxation (Vol. 165): Penguin Books Harmondsworth. Rosenstein-Rodan, P. N. (1957). Notes on the Theory of the big Push: Center for International Studies, Massachusetts Institute of Technology. Rostow, W. W. (1955). Some general reflections on capital formation and economic growth Capital Formation and Economic Growth (pp. 633-666): Princeton University Press. Schumpeter, J. A. (1961). The theory of economic development: An inquiry into profits, capital, credit, interest, and the business cycle (Vol. 55): Transaction Books. Sen, A. (2001). Development as freedom: Oxford Paperbacks.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Singer, H. W. (1952). The Mechanics of Economic Development: A Quantitative Model Approach. Smith, A. (1776). An inquiry into the nature and causes ofthe wealth ofnations. London: George Routledge and Sons. Smith, A. (2006). An Inquiry into the Nature and Causes of the Wealth of Nations: Echo Library. Szirmai, A. (2005). The dynamics of socio-economic development: an introduction: Cambridge University Press. Todaro, M. (1989). P.(1989) Economic Development in the Third World: Longman, New York. Todaro, M. P. & Smith, S. C. (2011). Economic development: Pearson Higher Ed. Weber, M., Baehr, P. R. & Wells, G. C. (2002). The protestant ethic and the spirit of capitalism: And other writings: Penguin. Yusuf, S. & Deaton, A. (2009). Development economics through the decades: a critical look at 30 years of the World Development Report: World Bank Publications.

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Investigation and Design of Mobile OPAC Services (MOS) for Non-Smartphone Users *Hemalata Vasudavan & Muhammad Ibrahim Ravi Asia Pacific University Technology Park Malaysia, Malaysia *[email protected]

Abstract: This research focuses on providing Online Public Access Catalog services to university students via mobile phone in order to enhance the traditional library walk in services and online library access using a computer. This research comprises of three main findings in relation with mobile OPAC services. First, it investigates student’s perception in using mobile phone to access OPAC services in the educational environment. Next, it identifies and adopts mobile content design guidelines in the development of Mobile OPAC Services (MOS) prototype application. Third, it develops MOS prototype Application for Non-Smartphone users. Quantitative and qualitative data analysis techniques conducted to identify student’s uses and needs for mobile library services access. The survey derived 73% of the students prefer to access the Online Public Access Catalog (OPAC) via mobile phone. The reason being is that OPAC provide major services of the library such as searching for learning materials, new titles in the library, reservation list and other related services. By conducting the survey, we discovered 71% of the students are using non-smart phone because they are still studying and unable to buy a smart phone which is expensive. Based on this finding we design a Mobile OPAC Service (MOS) prototype application for university students to access Online Public Access Catalog services via non-smart phones. The mobile OPAC services will bring libraries one step ahead in the wireless information technology world in meeting their patrons needs and providing quality education resources. Keywords: Mobile OPAC Services (MOS), non-smartphone, user’s perception, usability guidelines, user centric 1. Introduction The strong point associated with a mobile phone is always being handy while not being dependent on its location and being able to access into wealth of information or services. The emergence of 3G/4G wireless technology and services over mobile phones are becoming added advantage to access various internet services liable within the competence of mobile device and technology. Mobile web based services such as accessing emails, searching, mapping, messaging, social networking and information query are becoming available greatly in mobile environment. The importance of mobile phones in this research goes way in the educational environment from the context of accessing OPAC services. Nowadays, very less people go to the library, reason being occupied with work, inconvenient to carry books or increased traffic jam to reach library. Therefore, the traditional library services facing difficulty in meeting library user’s expectation. The rapid development of mobile devices provides a good platform for the expansion of library services for the reader (Yue, 2010). Mobile phone became an essential tool for users to communicate and collaborate in the educational environment. Mobile phone can be utilized effectively in providing OPAC services to library users. This research paper is arranged as follows: Section 2 presents the literature review mobile phone usage in academic environment, the importance of mobile library services, existing mobile phone application in library, comparison between smartphone and non-smartphone and guidelines to improve mobile content design. Section 3 discusses research methods and data capture analysis. Section 4 explains the system design and system architecture. Section 5 highlights screen design with the adopted usability guidelines. Section 6 describes the implementation of MOS prototype application, software tools, user evaluation and results. Section 7 concludes by explaining the findings of this research. 2. Literature Review Mobile Phone in Academic Environment: As the wireless technology grows tremendously, there is a need to facilitate students with enhanced technologies to gain knowledge and skills. Online teaching, online training and World Wide Web are available for students to learn and retrieve information by using mobile devices, personal digital assistants (PDA), or laptops. The continuous development and improvement of the Internet, Mobile Education Network and Mobile Telecommunications Equipment and the gradual increase in the level of the rural economy and the concept of modern learning, lifelong learning, in-depth impact and teacher’s requirement for further educational technology, mobile learning becomes tool for teachers to develop and improve their educational technology Jungi et al. (2010). As indicated by Karim et al. (2006) at the moment most of patrons learning in the academic institution having a cellular phone and it is expected that mobile services will be the best access point in catering reliable information access to the educational institutions. The Importance of Mobile Library Services: Information technology is playing a vital role in academic library because rapid advances in information communication technology are moving the library to online teaching era. The rapid growth in information systems makes libraries have found it challenging to retain with increased demands using traditional operations and the concept of a library has had to transform into automated library services. This is due to the library information user is no longer restricted to the walls of the library. The widely held of academic libraries are now hybrid libraries which means the library system is dependent on both electronic and print media based via a networks with physical facilities. According to (Yue, 2010), the mobile libraries will realize the dynamic release of mobile information, mobile information queries, mobile renewals and reservations, mobile virtual reference service, electronic resources uploading and downloading and search permissions to access electronic literature database. In recent years, the rapid development of mobile devices provides a good platform for the expansion of library services for the reader explained by (Yue, 2010). Having a mobile phone or any handled device become an important tool for communication and exchanging information. Thus, providing library services via mobile phones expand the scope of library services to offer information access anywhere and anytime to patrons. As mobile phones is playing an important role in the library there are few research papers reviewed. After reviewing the related work of mobile library services access, it has clearly denoted that the research uses smart phones for accessing the library services rather than non-smartphone. This is due to smart phone possess a wider screen, runs on operating system which function almost the same as laptop.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Existing Mobile Phone Applications in Library : We investigate many existing mobile phone usage in library and academic sectors. The existing system is more into sending notification to patrons in terms of library item due date and library fine. Many institutes are proposing a framework for mobile application for library services perhaps still under development environment. The development of information technology and mobile phones become an obligatory tool in human’s day to day life. This is remarkable that people who visited libraries to find specific information in the past are now able to find that information online. As the spectrum of human need grows, the opportunities for librarians to meet these needs are also growing. The mobile library services will fulfill the library patrons need in getting information. According to (Huang, 2011), it is reported that services provided by college and university libraries through mobile phones are mainly SMS, WAP services and mobile-friendly websites are not easy to find. Mobile phone library services basically use SMS of the mobile phone technology and mainly provide some services with simple functions such as returning and renewing books by SMS (Fang, 2011). [7] Surveyed the library patron’s favorite mobile services that they would prefer to access via mobile phone are listed below: Searching the library catalogue and reserving items.  Checking one’s loan status and renewing loan items.  Viewing upcoming library events and new book arrivals.  Sending queries to our librarians.  Reading our library blogs.  Subscribing to free e-notification/reminder service.  Downloading electronic books, video games and audio stories.  Send an ISBN to check whether a book is in the library.  Book purchase suggestions.  Searching articles.  A location-aware mobile library service helps readers to find books and other materials from the library quickly Majority of the library patrons with non-smart phone don’t read journal articles or eBooks, as the screen quality is poor. By then, the smart phone users already more inclined to read eBooks on their phones or reserved reading books. This shows the smart phone users able to use more library services compare to non-smartphone users. (Huang, 2011) Recommend that it would be more cost effective to either provide the same library application through website, or to develop application in Java, which will run on most other phones. In the context of academic sector most of the library has implemented web based OPAC to their patron and some have begun to deploy specialized mobile access application as well Zhou et al. (2010). The advancement of information technology is a tool for library to stay well-informed and to cater their patrons with quick information access. According to Karim et al. (2006) suggested that libraries should highlight development of mobile options. They developed a set of user experiments comparing three interface styles and a commercial service on a mobile device which the result shows that different approaches can help users to explore Web search results more efficiently. A survey conducted by Zhou et al. (2010) at University of Texas to investigate students, staff and faculty regarding their uses and needs for mobile catalog access indicated majority users prefer mobile catalogue access for searching library information and noted that simplicity is important when using mobile options. In the survey the respondents considered advanced search and search type for library materials to be the most important features for mobile catalog access. The author also developed a prototype mobile application for accessing their University OPAC based on Android Software Development Kit (SDK), Eclipse Emulator and Integrated Development Environment (IDE) which is compatible to Android SDK. The prototype application includes a menu with Search, Scan ISBN, About and Book List. The findings of this literature point out that task specificity or simplicity of an interface is important rather than having too text-heavy. Apart from this, the fit of custom mobile applications on the screen critically reduces time and frustration for users. Comparison between Non-Smartphone and Smartphone: The comparison between smartphone and non-smartphone can be due to differences between these two devices in terms of content display, internet access, operating system, wireless communication, touch screen, document editing and memory card. The screen display for smartphone consist larger screen compare to non-smartphone which comes with limited screen size. The non-smartphone is designed to enable user to browse internet like how they browse with their computer and more user interaction with the online resources. By then, the non-smartphone cater users browse internet for basic activity. Most of the non-smartphone support Wireless Application Protocol (WAP) to access internet and smartphone can support WIFI, 3G, 4G and other sophisticated wireless communication. The smartphone has a touch sensitive display which respond finger, stylus or both. Most of the smartphone has the capability of touch screen to input data, launch phone features, zoom webpages or virtual control. The non-smartphone do not support touch screen features since the screen display is limited. The non-smartphone able to view document or support some organizer features. The non-smartphone goes one step higher by not only viewing the document but able to edit, delete or create document. Since smartphone comes with mobile operating system which include many software application such as WordPad, slides or even edit document in their email inbox. Many smartphones have spaces that include memory cards storage to magnify their storage size. This also includes removable cards serve easy way to shift files between two devices. Smartphone generally need more memory space since much application can be installed, to view graphics and picture and to download software from internet. Guidelines to Improve Mobile Content Design: A research by (Seong, 2006) stated following the right usability guidelines which is denoted by following the correct direction and principle to access particular object or action will represent the best practices in a given context domain. The limitations of mobile phone such as screen size, processing power, memory and other limitation are studied. A task oriented information display on mobile phone will minimize screen size limitation whereby the required information is well displayed on mobile phone. The literature review identified some important guidelines on minimizing mobile phone limitation in terms of mobile content design. The researcher will be using these guidelines during screen designing phase. The guidelines for mobile content design are identified as below:

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) 1.

Minimize Human Cognitive Load – The mobile OPAC access needs to be in small consistent information. Smaller screen will slow down the reading speed by disrupting the eye movement’s normal pattern. Hence, it is advisable to avoid unnecessary information and only display required information to the user. By this, it can minimize learner’s cognitive load.

2.

Consistency – Consistency is the most basic characteristic in usability interface design principles. Similar information and action need to be inserted in the similar position. The library patrons who use web based OPAC services able to understand and utilize the mobile based OPAC services in terms of the system functionality.

3.

Navigation – Difficulties to navigate through the mobile devices causes users to get disoriented in a menu system, without knowing where there are, where to go next and how to get back to previous navigation routes or known parts in the menu. This especially for menus implemented in small screen sizes and constrained navigational ability. Navigation should always be consistent in all prepared pages. Consistent navigation will maintain learner’s pace and retaining learning interest and it can also minimize the number of scrolling frequently.

3. Methodology We adopted both survey questionnaire and interview techniques as the research instruments for data gathering. The questionnaire data were collected from undergraduates and postgraduates students from a private university with different academic specialism. A sample of 100 students was selected for the study. We used this survey to gather information, requirement, opinions, perception and familiarity of the target users on accessing OPAC via mobile phone. We used self-administered paper-based questionnaire method to gather information from the respondents. Besides that, two librarians from the same private university are interviewed to give opinions on the existing library services and accessing OPAC via mobile phone. The questionnaire was designed in four sections. Utilization of Library Services and OPAC, Mobile Phone Usage and Perception on accessing OPAC services via mobile phone. Based on this finding, we will choose the most preferred type of OPAC services or user centric services to be implemented under the mobile OPAC prototype implementation. Data Analysis and Requirement Capture: The result and analysis of the data will contribute to the finding of student’s perception in adopting mobile device to access OPAC thru questionnaire.. Analysis of collected data is an imperative pathway to final solutions of the problem statement. Utilization of Library Services and Online Public Access Catalogue (OPAC): The details on utilization of library services and Online Public Access Catalog (OPAC) were acquired based on the frequency of students visiting their university library website and the services they use also taken into consideration. Beside this, students were also enquired on the use of Online Public Access Catalog services and the type of search the use most in searching for books, journals, conference papers, CD-ROM or other related materials. The result from the survey shows high percentage of the respondent visit the library website everyday which comprises (55%), around (25%) of the students visit 2 to 3 times in a week, and followed by (20%) of students visit once in a week. Generally, all the students visit the university library website for some purpose for their studies. Information on types of online library services acquired by students is presented in Table 1. The types of services provided by university library are online databases, OPAC, Online Book Stores, Newspaper clipping and search for other library resources. The result is displayed in terms of the higher percentage distribution for most acquired services by the students. The result shows that (73%) of students prefer to access the Online Public Access Catalog (OPAC). This can be due to the OPAC provide various services which require the students to access the information on daily basis in searching books, renewing books, paying fines, checking new titles and other related services. Besides that, the (10%) of the students prefer to search information from other library resources. This can be due to the respondent consist of undergraduate and postgraduate students where they need to find extra resources for their project or dissertation from the twinning program with the respective University Library. Table 1 Percentage of Students Accessing University Library Website. Preference in Accessing OPAC No. of Students in Percentage Via Mobile Phone Yes 91% No 9% Mobile Phone Usage among Students: In this section, student’s nature of using mobile phone services was discovered. The findings show that all the students are using mobile phone regardless undergraduate or postgraduate students. By conductingthe survey, we notices that most of the students are using non-smart phone which comprises 71%. This can be due to respondents are students and most of them dependent to their parents for their expenses. Furthermore, smartphone is very expensive compare to non-smart phones. This finding elicits (39%) of undergraduate students using non-smart phone and (32%) of postgraduate also using non-smart phone. The rest of the students are using smartphone such as iPhone, Blackberry, Samsung HTC and other model smartphone which comprises the combination of PDA and cellular phone capability. The survey also draws that around 92% of students are using prepaid and only 8% using the postpaid plan. By this also, the researcher discovered the maximum of students spending for one month is RM50-RM100 which was (73%) and the least spending amount goes to RM10-50 which was (5%). Apart from this, students prefer to use short messaging services which was (45%), browsing internet (37%), games (13%) and multimedia messaging services (5%). Students prefer to use short messaging services (SMS) because it’s cheaper and immediately their message will be conveyed to receiver. By then, browsing internet via mobile phone is also famous among respondents where they could check class timetable, lecture notes, library website, university web portal and other related website in terms of their education.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Table 2 Student’s Preference in Accessing OPAC Services via Mobile Phone Online Response Percentage Library Services Sampling Online Public Access Catalogue 100 73% (OPAC) Search for Other library 100 10% resource from Staffordshire University Library Online Databases 100 8% Online Book Stores (Amazon, Alibris, Kinokuniya, MPH Online, AbeBooks and Barnes & Noble) Referencing Guides (Harvard Referencing, Library Links and Find Facts, Useful Links)

100

6%

100

3%

Students Perception on Accessing OPAC via Mobile Phone: In this section, the survey provides findings on the student’s opinion on accessing OPAC via mobile phone. First the students were asked on mobile access to OPAC a service is retrieving information at anytime and anywhere. This is because mobile phone is handy and students can be at anywhere not necessary have to be at library physically. As long as the internet connection is available students may access library website easily. Next, student’s points of view are also surveyed if this will prefer to retrieve OPAC information via mobile device. This is an important question for this research because the researcher can able to identify the student’s interest which cater realization for this research. The student’s attitude for preferring mobile phone in accessing OPAC was found to be very positive. Totally, (91%) of students shows their positive perception in using mobile phone to access OPAC which is shown in the following Table 2. Apart from this, various OPAC services offered in the university online library website were listed in the survey and the students are required to select the type of services they like to access. This type of services was measured in a likert scale of 1 out of 5 scales whereby the higher end indicates support. The likert scale denotes 1 (Never), 2 (Rarely), 3(Sometimes), 2(Often) and 5(Very Often). Based on this finding, the researcher can determine what type of OPAC services famous or students would like to access most via their mobile phone. The result of this finding is displayed in Table 3. The result is shown in terms of mean’s value and standard deviations. If the mean is nearer to the value 5 which denotes student’s interest in browsing the type services is consider higher. The findings from this section reveal students interest in browsing particular OPAC services. Table 3 shows the highest mean value denotes student’s highest interest in accessing this type of OPAC services via mobile phones. The result from Table 3 reveals that OPAC search is the most famous type of OPAC service student’s like to access which has the highest mean value of (4.49). The reason could be OPAC search gives the opportunity to students to browse on reference books, articles, journals and other learning materials for their exam preparation or research. Next, the result shows that, browsing for New Titles shows the mean value of (4.31) which indicates students second highest preference under OPAC service, viewing for library loan has mean value of (4.17), to view reservation list made by students has the mean value of (4.14), reservation of books for students who prefer to do early booking with mean value of (3.94), and lastly library fine services has the lowest mean value of (3.82). Table 3 Preference on type of OPAC services Type of Services In OPAC

Mean Value

Mode

Standard Deviation

OPAC Search

4.49

4

1.05

New Titles

4.31

4

1.04

Library Loan

4.17

4

0.97

Reservation List

4.14

4

1.08

Reservation of Books

3.94

3

2.06

Library Fine

3.82

3

1.18

This services which has mean value above four will be used as user’s preference services when implementing the MOS prototype application.

Scale: 1(Never), 2(Rarely), 3(Sometimes), 4(Often), 5(Very Often)

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Finding from the Interview with Librarian: The interview was meant to acquire information about existing library services, library management system and the perception on accessing Online Public Access Catalog via mobile phone. The librarian defined the Library Management System as a system to manage people, resources (information) and the ability to provide information needed. The Library Management System runs on repository database, where library membership records and transaction details are stored which is accessible by other departments such as the international office, technical department and admin department. Furthermore, the librarians pointed out about certain problems being encountered in the library, such as the enquiries that patrons normally make during the peak period which invariably takes much time and resulted to other patrons standing on the queue for longer period. As a result of this, more staff have to be on standby during the peak period, which typically and resumption day after holiday or after weekends. Mainly on Monday morning, some hours after lunch and after morning classes. The librarian also shared of increasing number of personnel from two to four workers on duty, which is quite at expenses of the library. She talked about currently available channels to enjoy the services provided are the online and the walk in services. The important factor which bring realization to the research was discovered when both the interviewee are supporting in terms offering Online Public Access Catalog via mobile phone which can minimize the problem from the conventional walk in service and added advantage for the current online library system. User Requirement Analysis for MOS Prototype Development: Gathering user requirement for research proposal is important element in determining system requirement. The system requirement analysis will lead into system design phase, implementation and testing phase at the appropriate level. The questionnaire technique used in the research methods is used to capture student’s perceptions in terms of accessing Online Public Access Catalog (OPAC) via mobile phone. The student’s perception will be analyzed as user requirement in developing the Mobile OPAC Service (MOS) prototype. The most preferred OPAC services which have the average mean value of four during the questionnaire analysis will be used as an important user requirement for this research. This is due to provide user centric services on the development of MOS prototype application. User centric services can be better designed to fulfill the user’s needs. The analysis on the type of mobile device using by the students stated that most of the students are using non-smartphone with the survey analysis of 71%. Hence, the development of Mobile OPAC Access shall concentrate on non-smartphone which is affordable by students since the price is cheaper compare to smartphone. System Design System Architecture: The system architecture for this research explains the conceptual overview of the MOS prototype in terms of the structure, behavior and communication which will toil together to build up the overall system. The system architecture reveals the fundamental design process of the system. Since this research involved in developing OPAC application on non-smart phone, the WAP protocol is adopted for the prototype implementation. The system will be represented by showing the functionality between the hardware and software components along with the human interaction with these components at three layer architecture structure. The system architecture design is presented in figure 1. The MOS prototype development shows three layer architecture consist of layer 1Client, layer 2- Application Layer and layer 3- Legacy Layer Figure 1 MOS Prototype Architecture

Layer 1-Client: This layer is the user interface layer of MOS prototype system. It consists of all the components that responsible in receiving the input from the mobile user and display the output received from the application layer to the user. The client requesting for an OPAC services will submit a query via WAP to the WAP gateway. The WAP gateway will transmit the output from the application layer to the client. The WAP gateway is in control of connecting client layer and the application layer together. Layer 2 – Application Layer: The application layer act as a middle layer between client layer and legacy layer. The web server used for MOS prototype application is the Apache server. Apache server is a widely used open source web server. Apache server is powerful and flexible is accommodating various different configurations. The Apache web server is responsible in hosting up the WAP gateway. The web scripting language used for MOS prototype application is PHP. The Application Layer communication is as follows:  The WAP gateway at the application layer will receive a WAP request from the client.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013)   

The WAP gateway will transforms the WAP request into an HTTP request which is the Login Host. The HTTP request will be directed to the legacy layer to obtain the output. After that, the output which is in HTML page format is transmitted to the WAP gateway. The WAP gateway will convert the output which is in HTML page format into WML page content to the mobile phone client.

Layer 3 – Legacy Layer: The legacy layer consists of the existing University OPAC website and University database. The University OPAC website will be converted into WML page content by WAP gateway at the application layer. Later, the OPAC page content in WML format will be displayed to client’s mobile phone. In the development of MOS prototype application, the University database was utilized to retrieve and update OPAC data. The interface of the database is not visible in the development of the MOS prototype application. Screen Design: The screen design explains the design of MOS prototype application before the implementation phase. In any research study the screen design is very important because the screen act as the communication channel between the system functionality and the users. The screen design for MOS prototype application is designed based on the guidelines which were adopted from the literature review and further explanation on the adoption of the guidelines in explained below. Adoption of Minimize Human Cognitive Load into Screen Design: User involvement in terms of specifying context of use, specify requirement and evaluation will determine user centric services. This is important with centric services development as users have their own expectation and what is required for them to ensure that the system is a success. The OPAC Search and Reservation List screen design in the following pages are the most preferred services selected by user which has mean value more than four. For example, in the OPAC Search screen the user can search for any library information by the search criteria. The result of the first search hits is displayed in one mobile page or card and the following search hits in the next card. The user can click the next option from the Menu button to view the next search result. The search information is not overloaded in one mobile page as there are many search hits. Overall, the screen design information display is broken into chunks to display information fit well within the small screen. Adoption of Consistency into Screen Design: The consistency reflects the appropriate content presentation and result. The format, structure and actions designed to be parallel for all the screen designs and able to produce accurate output.. Mobile users and web based user transact the similar information. Consistent in design process is important in providing users with the real usage context and useful. Adoption of Navigation into Screen Design: The navigational menu shows simplicity. The screen design are easy to navigate and simple, this means the operation is understandable, reduced user’s searching time and improved level of satisfaction. The designing of the screen with ample white space provides ease of use as such it improve user’s performance, improved efficiency and low latency. System Implementation Software Development Tools: The software development tools adopted for this prototype implementation are XAMPP, Operating System, Web scripting Language, Web Server Markup Language, Web Access and Control Library Mobile Emulator and Wireless Protocol. The functional user interface for the MOS application was implemented based on user requirement collected during analysis phase. User centric services are given importance in designing the user interface. User centric service is referring to important functional requirement were developed to meet user requirement. Text based interface design adopted for this research because it will help the users to query for their required information in easy manner without wasting time. Figure 2 below shows the MOS prototype application’s OPAC search screen followed by Figure 3 which describe the OPAC search result. The OPAC search result screen outline details on title code, call no, ISBN, author, type publisher and category. User Evaluation: The prototype was evaluated under the main criteria of justifying the mobile content design guidelines for developing the MOS prototype application. This evaluation process is to understand the user collaboration towards using non smartphone to access library resources. The following sections highlight the detailed analysis and finding of the evaluation results. Details of Respondents: The user evaluation for MOS prototype application were participated by 20 students of the same private university. Out of these 20 students, 10 students were from undergraduate studies and the remaining 10 students belong to postgraduate studies. All this 20 students are using non smartphone and WAP to access internet. Figure 2: OPAC Search Screen

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Figure 3: OPAC Search Result Screen

Data Collection Method: This study has adopted a questionnaire technique to obtain response from users. 20 questionnaires distributed to students to evaluate MOS prototype application in terms of justifying mobile content design guidelines along with user centric services. The questionnaire consisted of three questions in one section. The section consists of likert-Scale type questions acquiring user satisfaction rating of Strongly Agree, Agree, Neutral, Disagree, and Totally Disagree. Justifying Mobile Content Design Guidelines: The mobile content design guidelines which are adopted from the literature review in designing the mobile content design for the MOS prototype application will be used to justify whether the quality of designing mobile content is fulfilling the user requirement. The three guidelines used to design the MOS prototype screens are minimize human cognitive load, consistency and navigation. The three guidelines were transformed to three mobile content display design questions in Section A of the questionnaire. Following are the explanation on the mobile content design guidelines which will be used for this evaluation User Evaluation Results: The evaluation questionnaire consist of three questions explained the results of user response in terms of three mobile content design guidelines. The detailed discussion of the result is further explained in the following sections. User Evaluation to Minimize Human Cognitive Load.  Beneficial Criteria: The evaluated minimize human cognitive load based on beneficial criteria result shows were good. Majority of the respondent stated that the MOS prototype application is beneficial for them while only small number of percentage were uncertain about the benefits. This is due to the respondents still preferred in accessing OPAC via computer. Around, 60% of the respondents strongly agreed that MOS prototype application is beneficial. Another 30% of respondents agreed while 10 % were uncertain about the MOS prototype application.  Consistency: 50% students strongly agreed and 35 % agreed the prototype application is consistent. Apart from this, 15% of respondents were uncertain about the consistency of the MOS prototype application. This consistency evaluation shows majority of the respondents specified that the library data they view in the MOS prototype application is consistent with the OPAC web based system.  Navigation: The ease of navigating the prototype application indicated a positive sign from the respondents. 45% of the respondents agreed the MOS prototype application is easy to learn and navigate. Another 25% strongly agreed while 15 % of the respondents were neutral about the learnability of MOS prototype application. There were only 10% disagreed and 5% strongly disagree about the learnability of the prototype. 3. Conclusion The survey questionnaire depicted a positive result from students in receiving mobile application as further enhancement towards traditional library method is accessing library resources and enable the researcher to identify students most preferred OPAC services. These user centric services are used in developing the functional requirement for MOS prototype application. Besides that, this survey analysis brings realization to this research as the MOS prototype application is based on non-smartphone. Most of the students are using non-smartphone due to they are still studying and unable to afford for a smartphone which is expensive. A detail study on literature review the researcher discovered some useful guidelines such as minimize human cognitive load, consistency and navigation. These guidelines are used in designing the MOS prototype screen design. The reason for adopting these guidelines is to minimize the limitation of non-smartphone in displaying content on limited screen size. These three guidelines are further justified in the user evaluation process whether the chosen guidelines are appropriate for designing the mobile content design. The implementation of the prototype application is associated with user’s responses, literature studies and non-smartphone features. The evaluation process result indicated a positive response from the users and majority of the users are satisfied with the consistence, navigation and user centric services offered in the MOS prototype application. Research Limitation: The MOS prototype application is developed to cater mobility in accessing OPAC services. On the other hand, the current OPAC services could be accessed by laptop or computer will provide the whole view compare to non-smartphone. The prototype application has limitation in terms of displaying all the library features apart from OPAC services.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Future Enhancement: The research has highlighted the various approaches in implementing the MOS prototype application. The researcher will propose future enhancement in catering the overall library services information together with OPAC services. Apart from this, other issues like the acceptance or rationality of MOS prototype application together with the system limitation that might evolve must be well examined. Looking ahead, the improvement of this prototype application can be made by offering services such as enabling users to download electronic library items, allowing uses to receive SMS notification from library system on due items and a map function to direct users to locate books in the library. Acknowledgement: The authors thank the people who participated in data collection and we are extremely grateful to the reviewers for their constructive comments and suggestions that were vital in improving the quality of our paper. The authors also wish to express gratitude to the management of Asia Pacific University (APU) for their support. References Al-Hmouz, A. & Freeman, A. (2010). Learning on Location: An Adaptive Mobile Learning Content Framework, 2010 IEEE International Symposium on Technology and Society, June 7-9, 2010, IEEE Computer Society, pp.450-456. Ansari, M, A. & Amita, (2008). Awareness and use of OPACs in five Delhi libraries. Awareness and use of OPACs, 26(1), 111-129, viewed 7 February 2009, The Electronic Library. Consumers Union. (2005). 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Mobile services in university libraries in China, Multimedia Technology (ICMT), 2011 International Conference, July 26-28, 2011, IEEE Society, pp.3563-3565. Hsu, K. K. & Tsai, D. R. (2010). Mobile Ad Hoc Network Applications in the Library. Intelligent Information Hiding and Multimedia Signal Processing (IIH-MSP), 2010 Sixth International Conference, October 15-17, 2010, IEEE Computer Society, pp.700-703. Jungi, W., Lili, Q. & Hu, (2010). 3G Phone-Based Mobile Learning for Improving K-12 Teachers’ Educational Technology in Rural Area. Education Technology and Computer Science (ETCS), 2010 Second International Workshop, March 6-7, 2010, IEEE Computer Society, pp.821-825 Karim, N. S. A., Darus, S. H. & Hussain, R. (2006). Mobile phone application in academic library services: a students’ feedback survey. Mobile phone applications in library services, 23(1), 35-51, viewed 16 January 2009, The Electronic Library. Northwestern University Information Technoloy. (2011). Cell Phone Features and Manufacturers, Available at: http://www.it.northwestern.edu/telephone/mobile/mobilefeatures.html. Seong, D. S. K. (2006). Usability Guidelines for Designing Mobile Learning Portals, The 3rd International Conference on Mobile Technology, Application and Systems –Mobility 2006, October 25-27, 2006, ACM Digital Library, pp.1-8. Webopedia. (2011). The Difference Between a Cell Phone, Smartphone and PDA, Available at : http://www.webopedia.com/DidYouKnow/Hardware_Software/2008/smartphone_cellphone_pda.asp. Zhou, Y., Broussard, R. & Lease, M. (2010). Mobile options for online public access catalogs. iConference, 2011 Proceedings of the iConference, February 2011, ACM Digital Library, pp.598-605. Wendeson, S., Ahmad, W. F. W. & Haron, N. S. (2010). Development of mobile learning tool. Information Technology (ITSim), 2010 International Symposium, June 15-17, 2010, IEEE Computer Society, pp.139-144. Wu, J., Qi, L. & Zhengbing, H. (2010). 3G Phone-Based Mobile Learning for Imporving K-12 Teachers’Educational Technology in Rural Area, 2010 Second International Workshop on Education Technology and Computer Science, March 6-7, 2010, IEEE Computer Society, pp.821-825. Xiao-ling, H. & Wen-Ting, L. (2009). Mobile termination learning models based on cell phone. IT in Medicine & Education , 2009. ITIME ’09. IEEE International Symposium, August 14-16, 2009, IEEE Computer Society, pp.810-814. Yue, H. (2010). Research and development of the mobile library based on WAP technology. Industrial Mechatronics and Automation (ICIMA), 2010 2nd International Conference, May 30-31, 2010, IEEE Computer Society, pp.191-194.

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Lack of Environmental Sustainability in Youth Training at Higher Education *Syed

Kaleem Ullah Shah Bukhari, Hamdan Said Universiti Teknologi Malaysia, Malaysia *[email protected]

Abstract: This paper aims to explore the need of the Pakistan public university students to be educated and trained to comprehend the significance of environmental safety. Higher education has the responsibility of nation lead, especially, in training the youth to combat with emerging challenges and issues. However, the solution for these challenges –-health diseases, environmental hazards, lack of equal opportunities and others—depend on the safety of environment because of its inevitable connection with everything that exists in this world. Various efforts to preserve the environment are being taken into consideration from every corner of the higher education institutes in the developed and the developing countries alike. The initiatives in Pakistan higher education context seem less with respect to the subsequent adverse affects of the destruction of environment on the growing population of the country. This study employed open-ended one-on-one interview from five higher education academic administrators (N=5) of Pakistan public universities. Thematic analysis produced two themes: a). importance of youth training for environmental sustainability and, b) destruction of ozone layer with six categories. The findings showed the need to revise the curriculum and educate the youth. It was also found that there is a need of combined concerted efforts from all concerned agencies, and ministries to ensure the safety of environment. Keywords: Education for Sustainability, youth training, environmental education, revision of curriculum, higher education 1. Introduction This paper aims to explore that why the process of youth training for environmental safety and sustainability can be carried out in the viewpoint of decision makers at Pakistan Public Universities. This section firstly sets the scene that why higher education is the prime and last place for youth learning and training. The second part of this paper reviews the literature in line with the significance of higher education for environmental sustainability and then in the context of Pakistan public universities. The third section describes the research method that has been employed to address the issue of youth training. The fourth section articulates the findings and interprets these along with the discussion. The second last and fifth part of this paper concludes with the conclusions and recommendations only base on the findings, while the references are enlisted in the end of this paper. Educational institutes are deemed as the knowledge factories in the world. Apart from imparting the knowledge to the young generation, these are the training houses. Among these institutes, higher education ones bear the fundamental responsibility to make up any deficiency taken place in the process of graduating the students, in addition to train them for future challenges (ULSF, 2009). In this way the appropriate framework tha`t can work universally best is to make every effort to move forward for sustainable development. Under the banner of sustainable development, the focus on environment is the radical step. Having aligned with this framework, these institutes need to reshape their vision and mission so that the best approaches can be mapped to move towards sustainability (Simsek & Louis, 1994). Researchers and scholars (e. g. Orr, 2004; UNESCO, 1997) are unanimously agreed that the only way is to make everybody aware about their relationship to the mother— land, since, in search of the survival on the planet human beings have come to realize the safety of environment with such an intensity ever before now (Cortese, 2010). Though this awareness from the platform of higher education institutes have been discharged in a number of various ways under the functions of these institutes, yet how the higher education institutes are contributing for sustainable development is to be explored (Corcoran, Calder, & Clugston, 2002). Putting in other words, firstly it is required to investigate that which type of initiatives are being taken by the higher education institutes within the availability of all forms of resources. 2. Literature Review The needs of a society change with the passage of time, as the development of science and information technology have revolutionized more or less every country. The ways to enabling the human capital to fulfil these needs also change with the parallel speed of the society’s change. This calls for these institutes to lead in such a way that not only satisfy the present needs but to ensure the future needs("World commission on environment and development, The Brundtland Report, our common future," 1987). Discussing the purpose of the educational institutes in these contexts, it guides to maintain a balance relationship between society and these institutes. Since both are interdependent on each other, the higher education institutes in developed countries have changed their views to look into the societal needs. Thus, they are changing their ways of functions with the change in the society. Teaching and learning is one of these functions, Delors, Al-Mufti, Amagi, and Carneiro (1996) are of the view that learning makes the individual to know, to do, to be, and to live. Observing these simple verbs, they may not be perceived with such intensity in reading. But in their practical use they do require the meaningful adjustment of individuals in the society. In this way, to know implies to the knowledge seeker to know themselves, to do implies to do the things which create a relationship with the nature, to be implies to be as a human being, to live implies to live with harmony of the nature. Hargreaves and Fink (2006) extended this array and added another verb, to live sustainably. Of course, these verbs have other contextual implications and senses, but the discussed ones here, are in the context of this study. At another point, the great proponent of education for sustainability, Sterling (2010, p. 32) has expressed his viewpoint that why learning for sustainable future is vital in these words, “The key to a more sustainable future is learning. A self-evident statement perhaps, but it hides an important truth: that some learning – indeed, much learning that dominates currently in educational systems – will not take us towards a more sustainable future, but rather the opposite. So ‘learning for sustainable development’ is a radical step and movement that seeks to help assure a more livable, secure and harmonious society than that in prospect.” It has been determined base on the above mentioned discussion that learning can bring about positive and negative change in the behaviour of an individual. However, for sustainable development, there is a need of positive lifelong learning, while the major source to exercise this learning is to incorporate sustainable curriculum. In the context of Pakistan,

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) revising curriculum is obligatory to the concerned ministries with the collaboration of the educational institutes. Here, Environmental Protection Agency (EPA) comes to play its pivotal role in revising the curriculum. Environmental Protection Act, 1997, (Pakistan, 1997) state that, “The Federal Agency shall a) recommend environmental courses, topics, literature and books for incorporation in the curricula and syllabi of educational institution; and b) promote public education and awareness of environmental issues through mass media and other means including seminars and workshops” (p.10). However, there is a lack of collaboration between EPA and educational institutes that has indirectly been said in the form of missing environmental education in educational institutes (Arif, 2009, 21st November). This paper looks into this issue from the perspective of academic administrators of public universities. It explores that if youth should be trained to understand the importance of environmental safety then how the curriculum supports to eliminate this gap. The discussion section of this paper gives elaborate points. The following section highlights the methods to address this issue. 3. Methodology The sample for this study consisted of five higher education academic administrators (N=5) from five selected public universities of two cities in Pakistan. The nature of the study directed to select these participants who hold the position of academic administrators, decision makers, along with the experience and education of sustainability. These two characteristics were met by choosing academic administrators base on the purposive sampling (Creswell, 2007). After identifying these potential informants, they were contacted and updated about the study. It was also discussed to them that the one-on-one audio interview will be conducted for this study. They were fully assured that their identities and the institutional ones would not be employed other than the research purposes. Upon their acceptance, the procedures of interview conduct were carried out. During the interview we explored one major question and one subquestion, related to the major one. The former focused on the area of students’ learning and training for sustainable development, while, the latter discussed that how the process of changing the curriculum for sustainable learning can be executed. The questions were developed base on the following statement. “The present industrial development in the developed countries have compounded the problems of maintenance of the safe environment and causing little destruction of ozone layer”. While, the questions were as below, a) Should the youth be properly educated and trained to understand the importance of the safety of environment? b) Should the curriculum for sustainability be designed as a part of the general curriculum or special curriculum? All audio recorded interviews were transcribed one by one meticulously and listened over and over again till we were sure their precision, clarity and correctness. After that these interviews were individually sent back to the respondents to further endorse the transcript. These interviews were coded and analyzed manually with respect to theme emergence (Guest, MacQueen, & Namey, 2012). These themes and relevant categories are discussed in the following section. 4. Results and Discussion The below details first describe the results base on the emergence of the themes from the collected data. This is given in table 1. After this quotes from these interviews have been quoted that are further discussed. The open-ended interviewed questions have been given together because the second question is part of the first one. The following table, table I, presents the summary of the emerged themes and the related categories. Table I Main themes Importance of environmental safety Need to revise the curriculum Need to take decisions Need to educate youth Isolation of university from the community Contribution to Ozone layer (contribution to SD) Criticism on the west for SD contribution Shift in temperature In describing the results of this study, the informants shared information about the significance of the environmental safety can be divided in two themes. These two themes can further be categorized in four and two relevant categories respectively for theme one and theme two. Under the first category of theme one, three respondents expressed their views in favour to revise the curriculum. In second category, one of the informants described the importance of environmental safety with the viewpoint of decision making processes. Under the third category, four informants expressed the need to train the youth for environmental safety. The last and fourth category of first theme was viewed by one respondent in the form of pointing out directly the university isolation from the society. However, considering the first three respondents’ views, it is very clear that they have implicitly indicated the same thing that has been discussed in the fourth category. The second theme highlights the two major categories. In the first category, the respondents have pointed out the less contribution of developed countries towards sustainable development. The second category discussed that it is a whole shift of climate change. Respondents, in the favour to revise the curriculum expressed their views as, “Curriculum revision is important aspect for sustainability in terms of academic activities and you know the era is very advanced era. And we have to have cutting-edge technologies. So, with that perspective the curriculum should be revised. And new courses need to be designed with the perspective of the changing era and with advanced technologies we need to have the curriculum revised very very frequently—Participant 2. The participant viewed the need of revising curriculum with respect to the academic activities of the university. It can reveal the curtain from the real practices of the academic activities, which might not be aligned with the functions of the university. It can also point to further exploring the reasons of not revising the curriculum. However, the expression highlights the preparation to combat with the future challenges. This is arguably appropriate for educating the youth so that they may share the burden of the society in positive directional lead. It seems that the respondent has faced issues in the context of sustainable initiatives. So, the participant is talking about

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) the process to achieve the desired objectives. Another respondent highlighted this need in these words. “There is a big flaw in our curriculum. I would say it is a big flaw ………Don’t you think that environment is one of the most important issues that should be taken into account so that I can make optimal improvements for my country? It would not be possible without having a proper knowledge for that – participant 3”. This respondent emphasized that curriculum should be revised and apart from linking to the above one added that it is one of the most important issues. This quote can be interpreted in the way that, there might be other factors that can influence this initiative. The quote also indicates clearly that there are other issues, which might be linked with it or might not be that is further to be explored. In case of link of other issues, exploring those might streamline the revision of curriculum more than others. Similarly, the one respondent looked at this in the perspective of decision making processes in these words. “So, that example, I may not agree with those ozone layers. However, as far as the argument is concerned fully agreed that the decisions should be taken to protect the environment— Participant 1. These responses link with the issues raised by Mughal, Qaisrani, Solangi, and Faiz (2011). These also explain that the disintegration of EPA and university management is still widening. On the other hand, it seems that EPA might have not realized its responsibility to communicate with the universities in order to share the burden of the youth training. The dream of sustainable development can only be realized if every individual is equipped well to know and feel the sense of ownership towards the mother—land. One respondent showed the expressions about youth training in these words, “Well, at the basic level, may be at the master or bachelor level, because we are also going to initiate BS programs at some of the faculties. In fact, the faculty of natural sciences is going to initiate BS program in the coming autumn fall semester. And the thing is that they are going to….. at BS level it should be embedded in the course – Participant 2.” The ray of hope was seen by one of the respondent that the university X is going to start curriculum at BS level. The significant point is that more or less these five universities have established the department or college, especially, with the focus on environmental, earth, and engineering sciences. Despite the fact, the respondents have shown the need to revise the curriculum. Linking these results with Roorda (2001), who says that for sustainability there should be inter-disciplinary curriculum, while this approach of curriculum is on top of the series of multidisciplinary, trandsicplinary, and inter-disciplinary curriculum. It seems that these universities are still at the first stage, multidisciplinary curriculum. The dire need of curriculum revision also mars the contributions being taken by these universities. On the other hand, the developed countries are exploiting the environment at larger length than the developed or underdeveloped ones. The difference might be of a slight proportion, but the notion is that the developed countries are exploiting the environment with the advancement of the new technology, while the underdeveloped and the developing ones are in the war of survival and in this case they have to meet their basic needs which likely push them to compromise on sustainable practices. The question is left open to be explored at global level. However, in this study, the same thing has been revealed by the academic administrators, who said as, “Obviously the technological advancement, we are the victim of their technological advancement –Participant 4” At another place the participant said, “Pakistan is contributing very less in green house gas emissions. But Pakistan is the eighth vulnerable country in the impacts of those emissions. More than 50 % of the people are totally unaware of the facts. Why are they dying? They say nature is being/ preying crazy. No. But somebody have to take the responsibility--Participant 4.” The above mentioned quote can be implied at two different levels. The first one is at the national level, and the second one is international level. Discussing the former one, it can be said base on this study that these universities have taken their initiatives by themselves. The data also shows that they have initiated to contact EPA, while EPA seems to demonstrate negligence in terms of discharging its responsibility towards sustainable development at national level. This lack of responsibility from EPA also links with this whole paper, partially, and particularly with the viewpoint of revising the curriculum from decision making processes (Participant 1). In addition to that EPA is also responsible for collaboration with the education institutes under the Environmental Protection Act (Pakistan, 1997). In this way, it proves, base on this study, that there is a lack of sustainable initiatives from EPA. The second discussion point for this quote is linked with the perspective of all the concerned agencies and ministries at international level. In simple words, the ministry of climate change and EPA should communicate and cooperate with these higher education institutes in shouldering the burden for sustainable development. Upon this, these agencies can also represent Pakistan’s sustainable initiatives at any international forum. However, it seems that the current position is not as much strong as it is needed. Furthermore, it appears that the price of environmental destruction by the developed countries is being paid by the developing and under developed ones. This calls for to move forward with common consensus approach. In this way, it can be hoped that equality and social justice can further be reflected by every effort the countries are making. 5. Conclusion Contextualizing the issue of the significance of environmental safety for youth training in Pakistan, it is linked with the functions of the public universities and their decision making processes. It is commendable that the establishment of department/ college/ institute for environment, earth, energy or with similar names, is, of course, itself a foundational sustainable initiative. The second favourable point for sustainable initiative is that all the respondents focused that youth should be trained with respect to know the significance of the environment. One of the respondents said that not only youth but the elders should be made aware with the collaboration of the ministry of Climate Change and the Government by special employment of TV channels. These results conclusively offer the possible opportunity to direct and orient the university youth cohort with the revise of curriculum so that human capital can be capitalized to solve the regional issues for contributing towards the global ones. These results are worthwhile in themselves but a stepping stone for universities primarily in terms of burdening the share of the community—the absent part in university functions. To some extent, these results can work like a bridge between other than mentioned agencies and ministries for the purpose of sustainable development, as the isolation of public universities is widening the gap between these institutes and community. One bad effect of this gap is the victimization of natural eco-system in the name of economic development. Since this paper is a part of the larger study, there is a need to explore the linking variables of sustainable development in Pakistan at the public universities. In this way, the sustainable development can also be reflected even though it is the outcome of slight efforts.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) References Arif, R. (2009). Environmental Education Editorial, 3. Corcoran, P. B., Calder, W. & Clugston, R. M. (2002). Introduction: Higher education for sustainable development. Higher Education Policy, 15(1), 99-103. Cortese, A. (2010). Mobilizing higher education to create a healthy, just and sustainable society (pp. 1-13). Luther College: Second Nature: Education for sustainability. Creswell, J. W. (2007). Qualitative Inquiry and Research Design: Choosing among five approaches Thousands Oaks, CA: Sage. Delors, J. I., Al-Mufti, I., Amagi, I. & Carneiro, R. (1996). Learning: The treasure within -- Report to UNESCO of the International Commission on Education for the Twenty-first Century (pp. 1-46). Paris: United Nations Educational, Scientic, and Cultural Organization. Guest, G., MacQueen, K. L. & Namey, E. (2012). Applied thematic analysis. Los Angeles, London, New Delhi, Singapore, Washington, DC: Sage Publications Inc. Hargreaves, A. & Fink, D. (2006). Sustainable Leadership. San Francisco: Jossey-Bass. Mughal, S., Qaisrani, N., Solangi, G. & Faiz, S. (2011). Promoting education for sustainable development: Challenges and issues for higher education institutions in Pakistan. International Journal of Learning & Development, 1(1), 159-165. Orr, D. (2004). Earth in mind: On education, environment and the human prospect. Washington, DC: Island Press. Pakistan Environmental Protection Act, 1997, XXXIV C.F.R. (1997). Roorda, N. (2001). AISHE: Auditing instrument for sustainable higher education. Dutch Committee for Sustainable Higher Education. Dutch: Dutch Committee on Sustainable Higher Education. Simsek, H. & Louis, K. S. (1994). Organizational change as paradigm shift - Analysis of the change process in a large, public university. Journal of Higher Education, 65(6), 670-695. doi: 10.2307/2943824 Sterling, S. (2010). What is learning for sustainable development? In M. Witthaus, K. McCandless & R. Lambert (Eds.), Tomorrow Today (pp. 32-33). London: Tudor Rose. ULSF. (2009). University Leaders for Sustainable Future. website, Retrieved August 21, 2006 at http://www.ulsf.org/about_staff.html. UNESCO. (1997). Education for a Sustainable Future: A transdisciplinary vision for concerted action: United Nations Educational, Scientific and Cultural Organizations. World commission on environment and development, The Brundtland Report, our common future. (1987). Oxford, UK.

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The Impact of Palm Oil Price on the Malaysian Stock Market Performance *Sabariah

Nordin, Norhafiza Nordin, Rusmawati Ismail Universiti Utara Malaysia, Malaysia *[email protected]

Abstract: The performance of a stock market has always become the center of attention for market analysts and investors. Due to its significant role in the economy of a country, the performance of the stock market is always associated with the economic condition of a country. Because of that, this study intends to examine the impact of commodity prices in influencing the behaviour of the stock market index specifically by focusing on the palm oil prices. Since Malaysia is one of the major producers of palm oil, the behaviour of the palm oil price is expected to have an influence on the Malaysian stock market index. In pursuing the objective, we have adopted the bounds test approach to analyze the existence of cointegration relationship among the underlying variables of the Malaysian stock market index, interest rate, exchange rate and the price of palm oil. Using monthly data for the period of 1997M12 to 2012M9, results of an ARDL test indicates that all the variables employed are significant in influencing the Malaysian stock market index in the long run as well as in the short run. Keywords: stock market index, bounds test, cointegration, palm oil price, Malaysia 1. Introduction A stock market index has generally being used to indicate the performance of an economy. The rise in the stock market index has always been associated with the booming of the market and vice versa. Since a stock market index measures the performance of stock prices, fluctuations in the existing stocks’ prices are indeed being reflected in the stock market index. Nevertheless, the fluctuation in the index is found to be affected not just by the prices of the existing selected stocks, but also by some other macroeconomic variables and commodity prices which have potential influence on the stock prices. Most studies have been considering oil price as a proxy for commodity price as one of their potential determinants of the stock market performance (Valadkhani, Chancharat & Havie, 2009). However, for this study, we intend to examine the potential effect of the palm oil industry on the Malaysian stock market. The palm oil industry is considered to be one of the major sub-sectors of agricultural industry for Malaysia. Currently, Malaysia is accounted for 39 percent of world palm oil production and 44 percent of world exports (information available at http://www.mpoc.org.my as of 22 September 2013). The significance of the palm oil industry can be observed from its contribution to the exports and the establishment of derivative instruments on the underlying asset of palm oil, for instance the Crude Palm Oil Futures which is traded on the Bursa Malaysia. In addition to assessing the potential effect of the palm oil price on the Malaysian stock market index, this study will also consider two potential determinants of stock market index namely interest rate and exchange rate which have been considered extensively in past empirical studies. The rise in the price of palm oil is expected to enhance the performance of the FBMKLCI. The interest rate is expected to have a negative relationship while the exchange rate is expected to have either a positive or a negative relationship with the index. The organization of the study is as follows. The first section provides introduction to the topic. The second section discusses the theoretical framework of the study in which it helps to explain the rationale behind the selection of the variables. The third section reviews literature related to the study. The fourth section discusses the methodology being adopted in this study. The fifth and the last sections discuss the results and conclude the study respectively. Theoretical Framework: Since the stock market index measures the stock price, theories applicable to this study would be those focusing on the behaviour of the stock price and also market reaction. In addition, the selection of variables adopted for this study is also being determined based on past empirical studies. Efficient Market Hypothesis Theory: Efficient Market Hypothesis (EMH) implies that asset prices promptly reflect all available information. Given that the market is efficient, abnormal profits cannot be attained regardless of any investment strategy adopted. According to Fama (1970), there are three types of market efficiency namely weak, semi-strong and strong forms of market efficiency which later have been identified as predictability, event studies and inside information respectively (Fama, 1991). The weak form of the market efficiency asserts that asset prices integrate all relevant past information. The semi-strong form indicates that the asset prices not just reflect past information, but also other information available to the public. Finally, the strong form of market efficiency implies that asset prices not just reflect past and public information, but also private information particularly those specifically related to the company. Given that the market is efficient, at least in the weak form of market efficiency, the return an investor earns on his investment cannot be predicted because it follows a random walk. For the purpose of this study, our focus will concentrate more on the past or historical information. So, our application here is more on the weak form of market efficiency which is easier to measure and the data is easier to obtain. Since asset prices do fluctuate, we will integrate relevant macroeconomic variables determined from past empirical studies and a commodity price which we believe have potential effect on the behaviour of the asset price movements. Arbitrage Pricing Theory: Arbitrage Pricing Theory (APT) is a theory that demonstrates the price of an asset given relevant risks. APT can be expressed as: 𝑅𝑖𝑡 = 𝑟𝑓𝑡 + 𝛽𝑖 𝑋𝑡 + 𝜀𝑡 Where Rit is the return of stock i at time t, rf is the risk free interest rate at time t and X is a vector of predetermined economic factors at time t. βi measures the sensitivity of the stock to the changes that happen to each economic factor defined by the equation. ε is the error term at time t. Since APT does not specify the type of macroeconomic variables to be included in the model, the selection of variables will

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) be based on past empirical studies and the rationale of considering that variable as part of the model. Specifically, in addition to the stock market index as the dependent variable, this study will consider interest rate, exchange rate and the price of palm oil as independent variables. Since an asset price fluctuates as indicated by the efficient market hypothesis theory, and this fluctuation is affected by a number of predetermined economic factors as indicated by the arbitrage pricing theory, this study intends to examine the impact of interest rate, exchange rate and the price of palm oil on the Malaysian stock market index. An interest rate is always associated with investment in the fixed income instruments such as bonds, and an increase in the interest rate would redirect investors from investing in the stock market towards investing in the fixed income securities. In addition, interest rate is also considered as a cost of financing; the higher the cost, the lower will be the borrowings. Due to the lack of funds, there will also be less demand for the stocks which at the end will affect the price of the stock. Since the index is a representation of a group of stocks, the impact on the stock prices will be reflected in the index. In short, the interest rate is expected to have a negative relationship with the stock market index. Another economic variable that has been used extensively in the studies of the stock market performance is the exchange rate. An exchange rate represents the price of one currency against another currency. Theory suggests that as the local currency depreciates with respect to foreign currencies, the stock market index should increase as domestic goods become highly competitive compared to foreign goods. Besides, the cheaper value of domestic currency would also allow foreign investors to penetrate the market. This condition would represent a potential positive effect of exchange rate, which represents the depreciation of the local currency, on the stock market index. Nevertheless, the exchange rate may also affect the stock market negatively through the appreciation of the local currency. In this case, an appreciation of the local currency gives a signal to investors that the market is worth invested in. In short, the expected sign for the exchange rate can be positive or negative. Finally, the variable that will become the main focus of this study is the palm oil. Since the palm oil constitutes one of the major exports for Malaysia, fluctuations in its prices are expected to affect the Malaysian stock market performance. An increase in the palm oil price, which is reflected by the increase in the demand, is expected to enhance the performance of the Malaysian stock market index. 2. Literature Review Financial market history shows that stock price is subjected to substantial fluctuations. Generally, stock price will move up when there are good news, and move down when there are bad news. The news can be from the market itself, the economy or from the events that happen in the company. In that case, there are a lot factors that can be considered to examine the fluctuations in the stock market. In order to verify which variables to be selected for this particular study, this section would provide a review on past literature. Even though there are a lot of studies examining the stock price behaviour, country of study, period of study and the technique used may influence the results. In examining the long run and short run relationships between macroeconomic variables and the Malaysian stock market index, Bekhet and Mugableh (2012) discover that there is a cointegration relationship between macroeconomic variables of GDP, producer price index, CPI, M3 and exchange rate with the Malaysian stock market index for the period of 1977 to 2011. The PPI, CPI, exchange rate and M3 are found to have negative relationships with the stock market index, while the GDP is found to have a positive relationship with the stock market index in the long run. For the short run results, only GDP is found to exert a significant positive impact on the stock market index. Similarly, Rahman, Sidek and Tafri (2009) examine the relationship that exists among the Malaysian stock market index and selected macroeconomic variables for the monthly data of January 1986 to March 2008. Their VECM results indicate that there is cointegration relationship between the Malaysian stock market index and macroeconomic variables of money supply, interest rate, exchange rate, reserves and industrial production index. In addition, their study also shows that the Malaysian stock market has stronger dynamic interaction with reserves and industrial production index as opposed to money supply, interest rate and exchange rate. In a different study, Eita (2012) investigates the macroeconomic determinants of Namibian stock market prices for the period of 1998 to 2009. Using the VECM approach, she discovers that the Namibian stock market is influenced by economic activity, interest rates, inflation, money supply and exchange rates. Unlike Bekhet and Mugableh (2012), money supply is found to have a positive significant impact on the stock market index. Economic activity is found to have a positive relationship with the stock market prices, while inflation and interest rates are found to have negative relationships with the stock market prices. Fathi et al. (2012) conduct a study to examine the impact of macroeconomic variables of national income, investment rate, financial intermediary development and macroeconomic stability on the Tehran Stock Exchange. The period of study is between 1998 and 2007. In addition to the existence of cointegration relationship among the underlying variables, results also indicate that national income and investment rates to have a positive significant effect on the depth and breadth of the Tehran Stock Exchange. On the other hand, financial intermediary development and macroeconomic stability are found to have a significant negative effect on the stock exchange. In a different way, Hsing, Budden and Phillips (2012) apply the exponential GARCH model to examine the relationship between macroeconomics and the Argentine stock market index for a quarterly sample of 1998Q1 to 2011Q2. Their findings indicate that real GDP, the ratio of M2 to GDP, the exchange rate of peso/USD and the US stock market index have positive relationships with the Argentine stock market index. Conversely, the money market rate, government spending as a percentage of GDP and inflation rate are found to have negative relationships with the Argentine stock market index. In a different study, Sohail and Zakir (2012) try to evaluate the impact of the macroeconomic variables on three different stock exchanges in Pakistan, namely Karachi, Lahore and Islamabad stock exchanges. Their macroeconomic variables are represented by industrial production index, consumer price index, money supply, real effective exchange rate and three months treasury bills rate. In assessing the long run relationship among the underlying variables, they employ Johansen cointegration technique. Their results indicate that the industrial production index has a positive relationship with stock prices in all three stock exchanges. The exchange rate is found to positively affect stock prices in Karachi and Lahore’s indices, but a significant negative impact on the Islamabad index. Inflation is found to have a positive impact on the stock price of Karachi stock exchange, but a negative impact on the other two indices. The money supply shows a negative impact on the indices of Karachi and Islamabad, but a positive impact on the Lahore index. The treasury bills rate has a positive impact on the Lahore and Islamabad indices. Mehr-un-Nisa and Nishat (2011) examine empirical relationship between the stock

51

Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) prices, financial fundamentals and macroeconomic factors by focusing on the Karachi Stock Exchange. By employing the dynamic panel Generalized Method of Moments (GMM) on 221 firms for the period of 1995 to 2006, their results indicate the significance of earnings per share and a company’s size in influencing the stock price. In addition, real GDP growth, interest rate and financial development are also found to significantly influence the stock price. Sohail and Zakir (2010) explore the impact of five macroeconomic variables, namely consumer price index, real effective exchange rate, industrial production index, money supply and treasury bills rate, on the general index of the Karachi Stock Exchange. By employing the Johansen cointegration technique and the VECM approach, they discover that the CPI, real effective exchange rate and industrial production index have a positive impact on the stock prices in Pakistan. On the other hand, money supply and the treasury bills rate are found to negatively affect the stock price in the long run. Meanwhile, Kyereboah-Coleman and Agyire-Tettey (2008) study the relationship between macroeconomic indicators and the Ghana stock exchange market. Using quarterly data for the period of 1991 to 2005, they indicate the presence of cointegration relationship between the Ghana stock exchange index and inflation, real exchange rate, interest rate and a dummy variable of a listed company. All variables are found to be statistically significant in affecting the GSE index with the inflation and lending rates showing a negative relationship, while the exchange rate showing a positive relationship. Lee, Boon and Baharumshah (2001) explore the dynamic linkages between Kuala Lumpur Stock Exchange stock prices and microeconomic fundamentals prior to the 1997 Asian crisis. They discover that the macroeconomic fundamentals of inflation rate, interest rate, industrial production index, money supply, exchange rates and trade balance are vital in determining the movements in stock prices in the short run as well as in the long run. Their results suggest that the Composite Index, Industrial Index, Plantation Index and the Mining Index to be inflation-sensitive securities, while the Composite Index and Industrial Index are output sensitive. The trade balance is also found to significantly influence the stock prices. Differently, Majid and Yusof (2009) focus their study on the Islamic stock market. They perform a study to explore the extent to which macroeconomic variables affect the Islamic stock market in Malaysia in the post 1997 Asian financial crisis period. By employing the autoregressive distributed lag (ARDL) approach, their results suggest that real effective exchange rate, money supply of M3, treasury bill rate and federal fund rate of the US monetary policy should be the variables to focus on in order to stabilize the Islamic stock market and encourage more capital into the market. Unlike other studies on conventional stock market indexes, they exert a positive relationship between interest rates and the Islamic stock prices. Similar to Majid and Yusof (2009), Hussin et al. (2012) study the relationship that exists between the development of Islamic stock market and macroeconomic variables in Malaysia. By employing the Vector Auto Regression (VAR) method, they discover that the Islamic stock prices are cointegrated with the underlying variables of industrial production index, consumer price index, money supply, Islamic interbank rate and exchange rate. IPI and CPI show significant positive relationship with the Kuala Lumpur Syariah Index, while M3 and exchange rate have a significant negative relationship with the Islamic index. There is no significant relationship found between the Islamic index and the Islamic inter-bank rate. In the meantime, Muhammad, Ghuslan and Jusoff (2009) conduct a study to examine the long run relationship between the Malaysian stock market and the performance of the agricultural sector which is represented by the Plantation index for the daily data of 1990 to 2005. Using Johansen cointegration test and the Vector Error Correction Model (VECM), their results indicate that there is a positive long run relationship between the Malaysian stock market and the agricultural sector. In a different way, Valadkhani, Chancharat and Havie (2009) analyze the effect of various international stock market price indices and macroeconomic variables on the Thai stock market price index. In pursuing the objective, they apply a GARCH-M model and monthly data of January 1988 to December 2004. Their results indicate that changes in the stock market returns in Singapore have a positive impact on the Thai stock market in both pre- and post-1997 crisis period. Changes in the stock market returns in Malaysia and Indonesia prior to 1997 Asian crisis, and changes in stock market returns in Philippines and Korea in the post-1997 influence the return in the Thai stock market. Stock markets outside the region have no significant impact on the Thai stock market. Changes in the price of crude oil have a negative impact on the Thai stock market in the pre-Asian crisis period. Macroeconomic variables of CPI, exchange rate, interest rate and money supply have no significant impact on the Thai stock market. 3. Methodology This study employs the bounds test approach to examine the existence of cointegration relationship among underlying variables of stock market index, interbank rate, exchange rate and the price of palm oil. In addition, this study also reports long run and short run coefficients of the underlying variables in influencing the performance of the stock market index. Data: This study will focus on four main variables namely stock market index as represented by the FBMKLCI index (KLCI), 3 months interbank rate (IBR), exchange rates of RM/USD (EXR) and the price of palm oil (POIL). This study focuses on the stock market index as a function of IBR, EXR and POIL. This study employs monthly data for the period of 1997M12 to 2012M9. The data on interest rate, exchange rate and stock market index are gathered from the database of Datastream, while the data on the price of palm oil is gathered from the World Bank commodity price. All variables are in the logarithm form except for the interest rate. General Model: LKLCI = f(IBR, LEXR, LPOIL) LKLCI = β0 + β1IBRt + β2LEXRt + β3LPOILt + εt (1) Where

LKLCI IBR LEXR LPOIL ε

= = = = =

Logarithm of FBMKLCI index at time t 3 months interbank rate at time t Logarithm of exchange rate (RM/USD) at time t Logarithm of palm oil price at time t error term at time t

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Figure 1 illustrates the behaviour of the selected variables for the study period. All variables, which initially perform the function of price, fluctuate. Since the period of study used starts with the period where the 1997-1998 Asian financial crisis happened, we could see some kind of trend in the data. For instance, the FBMKLCI index started with the lowest amount in the beginning, then started to relatively increase despite the fluctuations that happen throughout the period of study. The interest rate started with the highest rate and significantly dropped after the crisis before showing low variability in the rates. The crisis brought a significant negative impact on the currency value which shows that the RM had depreciated a lot at the beginning stage of the period before starting to gain confidence in the value later. The price of palm oil also shows a significant drop after the crisis before starting to gain a good momentum again later. Figure 1: Multiple Line Graphs KLCI

IBR

1800

.12

1600

.10

1400 .08

1200 1000

.06

800

.04

600 .02

400 200

.00 1998

2000

2002

2004

2006

2008

2010

2012

1998

2000

2002

EXR

2004

2006

2008

2010

2012

2008

2010

2012

POIL

4.8

4500 4000

4.4

3500 3000

4.0

2500 3.6

2000 1500

3.2

1000 2.8

500 1998

2000

2002

2004

2006

2008

2010

2012

1998

2000

2002

2004

2006

Table 1 highlights descriptive statistics of the underlying variables. Variances for interest rate and exchange rate are low compared to variances indicated by the stock market index and the price of palm oil which are more than 10 percent (based on the square of standard deviation of each variable). Table 1: Descriptive Statistics LKLCI Mean 6.827940 Median 6.801361 Maximum 7.406170 Minimum 5.713436 Std. Dev. 0.346612 Skewness -0.206132 Kurtosis 2.671927 Jarque-Bera Probability

2.058816 0.357218

IBR 0.035790 0.031450 0.111500 0.020300 0.017869 3.130804 12.39912

LEXR 1.277164 1.329499 1.514028 1.083668 0.083703 -0.703968 2.707925

LPOIL 7.606663 7.568430 8.289335 6.790322 0.380904 -0.052113 2.072100

946.0053 0.000000

15.33464 0.000468

6.466310 0.039433

The correlation matrix implies that the interest rate and the exchange rate have negative relationships with the FBMKLCI index, while the price of palm oil has a positive relationship with the FBMKLCI index (Table 2). The interest rate is found to have a positive relationship with exchange rate and the price of palm oil. The correlation matrix also shows that there is a negative relationship between exchange rate and the price of palm oil. Table 2: Correlation Matrix LKLCI LKLCI 1 IBR -0.45266364 LEXR -0.87970181 LPOIL 0.60830908

IBR

LEXR

LPOIL

1 0.28763473 0.18901821

1 -0.73406623

1

Estimation Technique: Since the model is regressed based on the bounds test cointegration approach, equation (2) highlights long run and short run coefficients of the model. The estimation in equation (2) is derived based on the general model of equation (1).

∆𝐿𝐾𝐿𝐶𝐼𝑡 = 𝑐 + 𝛽1 𝐿𝐾𝐿𝐶𝐼𝑡−1 + 𝛽2 𝐼𝐵𝑅𝑡−1 + 𝛽3 𝐿𝐸𝑋𝑅𝑡−1 + 𝛽4 𝐿𝑃𝑂𝐼𝐿𝑡−1 𝑝

+

𝑝

𝛼1𝑖 ∆𝐿𝐾𝐿𝐶𝐼𝑡−𝑖 + 𝑖=1

𝑝

𝛼2𝑖 ∆𝐼𝐵𝑅𝑡−𝑖 + 𝑖=0

𝛼3𝑖 ∆𝐿𝐸𝑋𝑅𝑡−𝑖 + 𝑖=0

𝛼4𝑖 ∆𝐿𝑃𝑂𝐼𝐿𝑡−𝑖 + 𝜀𝑖 𝑖=0

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(2)

𝑝

Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Where p is the optimum lag length. The hypotheses of the bounds test are as follows: 𝐻𝑜 : 𝛽1 = 𝛽2 = 𝛽3 = 𝛽4 = 0 (no long run relationship) 𝐻𝐴 : 𝛽1 ≠ 𝛽2 ≠ 𝛽3 ≠ 𝛽4 ≠ 0 (long run relationship exists) 4. Results and Discussion Table 3 highlights the results of unit root tests of Augmented Dickey-Fuller (ADF), Phillips-Perron (PP) and Kwiatkowski-PhillipsSchmidt-Shin (KPSS). Even though the bounds test approach does not stress on the importance of knowing the order of integration of the underlying variables, there is still a need to examine the variables in terms of their stationarity in order to avoid having an I(2) variable. Besides, the bounds test also require the dependent variable, in this case the stock market index, to be I(1). Results in Table 3 indicate that generally all underlying variables fall under the categories of I(0) or I(1); all variables are generally I(1) except for the interbank rate which is I(0). In that case, we proceeds with the cointegration test. Table 3: Results of Unit Root Tests Augmented Dickey-Fuller (ADF) Intercept Intercept and Trend Level First Difference Level LKLCI -1.132939 -10.93815*** -2.952335 IBR -10.38426*** -5.724788*** -9.931318*** LEXR -1.786350 -19.50550*** -4.218958*** LPOIL -1.693257 -9.177643*** -3.275871* Phillips-Perron (PP) Intercept Intercept and Trend Level First Difference Level LKLCI -1.347394 -10.77138*** -3.418295* IBR -2.880068** -11.32067*** -2.440740 LEXR -1.462598 -21.90043*** -4.077202*** LPOIL -1.460061 -10.68225*** -2.484788 Kwiatkowski-Phillips-Schmidt-Shin (KPSS) Intercept Intercept and Trend Level First Difference Level LKLCI 1.473202*** 0.029139 0.061672 IBR 0.521394** 0.245557 0.192457** LEXR 1.411035*** 0.314514 0.259995*** LPOIL 0.972168*** 0.114955 0.185117** Note: *, ** and *** represent 10%, 5% and 1% significance levels respectively.

First Difference -10.90700*** -5.677467*** -19.44515*** -9.194944*** First Difference -10.73613*** -11.58136*** -21.51435*** -10.72007*** First Difference 0.024554 0.078368 0.289239*** 0.061710

Results in Table 4 indicate that there is a cointegration relationship among the underlying variables of stock market index, interest rate, exchange rate and palm oil price. The cointegration relationship points out that the underlying variables display a long run equilibrium relationship in which they do not deviate far from each other. Their short run adjustments will restore their equilibrium relationship in the long run. As indicated in Table 4, the F-statistic of 6.9883 is greater that the I(1) critical value of 5.960 at 1 percent significance level. This result indicates the existence of the cointegration relationship among the underlying variables. Table 4: Results of Bounds Test for Cointegration Analysis Dependent variable: F-statistic LKLCI 6.9883*** Case III (unrestricted intercept and no trend) k=3

Narayan (2005) Critical Value (n=80) I(0) I(1) 1% 4.568 5.960 5% 3.363 4.515 10% 2.823 3.885 Note: *** represents significance at the 1% level. Critical values are cited from Narayan (2005). Since Narayan (2005) does not provide critical values for n=178, critical values of n=80 (the maximum available number of observations) are reported as a benchmark. It is noted that the critical values of n=178 should be lower than the critical values of n=80. Table 5 reports the long run and short run coefficients of the model. Results of long run estimates indicate that there is a significant negative relationship between the stock market index with the interest rate as well as the exchange rate at 1 percent and 5 percent significance levels respectively. As expected, the palm oil price is found to have a positive significant impact on the stock market index at 5 percent significance level. A 1 percent increase in the palm oil price will be reflected in an increase by 0.36 percent in the KLCI index. Similarly, the short run estimates as indicated by the error correction estimates report consistent findings with the long run estimates where there is a negative significant relationship between the stock market index and the interest rate as well as the exchange rate at 1 percent significance level. Even the palm oil price shows consistent result where there is a positive significant relationship between the

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) palm oil price and the stock market index at 5 percent significance level. The short run adjustment indicates that a 1 percent increase in the price of palm oil will be reflected in an increase by 0.05 percent in the KLCI index. As indicated in Table 5, the error correction term is significant at 1 percent significance level with the correct negative sign. The error correction term of 0.14 indicates that roughly 14 percent of last year’s deviation is corrected this year. Table 5: Long Run Elasticities and Short Run Adjustment Coefficients (Dependent variable: LKLCI) Variable Coefficient Long run elasticities IBR LEXR LPOIL INPT

-13.4364 -1.7560 0.35753 6.8336

Standard Error 2.9088 0.77786 0.16223 2.0864

t-statistic

p-value

-4.6193 -2.2574 2.2038 3.2754

0.000 0.025 0.029 0.001

Error correction representations D(LKLCI1) 0.18870 0.060041 3.1428 0.002 D(IBR) -1.8942 0.34222 -5.5350 0.000 D(LEXR) -1.5816 0.19440 -8.1357 0.000 D(LPOIL) 0.050402 0.021300 2.3663 0.019 D(INPT) 0.96337 0.40690 2.3676 0.019 Ecm(-1) -0.14097 0.028086 -5.0194 0.000 Note: The error correction representations imply short run coefficients or short run adjustment towards equilibrium. Table 6 provides the diagnostic test results for the model based on two estimations namely the OLS estimation (p,p,p,p) and also the ARDL estimation (p, q, r, s). The OLS and ARDL estimations indicate that the model fails the normality assumption. However, Paruolo (1997) (cited in MacDonald & Ricci, 2003) argues that non-normality as a result of excess kurtosis does not affect the results. The ARDL estimation also shows that the model fails the heteroscedasticity test. Nevertheless, according to Shrestha and Chowdhury (2005), since ARDL models can consist of a combination of I(0) and I(1) variables, it would be natural to detect heteroscedasticity. Table 6: Diagnostic Tests OLS Estimation Test Statistics LM Serial Correlation 8.8784(0.713) Functional Form 0.040275(0.841) Normality 45.9494(0.000) Heteroscedasticity 0.027709(0.868) Note: numbers in parentheses ( ) are probabilities.

ARDL Estimation LM 15.0473(0.239) 1.8942(0.169) 53.6473(0.000) 15.8952(0.000)

5. Conclusion The stock market index is normally used to indicate the economic performance of a country. Due to the significant role of the stock market in the economy, many studies attempt to investigate the factors that influence the behaviour or the movement of the stock market index. Many studies have been investigating the impact of macroeconomic variables on the stock market index, and there are also studies exploring the impact of commodity prices on the stock market performance. This study investigates the impact of selected macroeconomic variables namely interest rate and exchange on the stock market price. Additionally, this study also investigates the role played by the commodity price in influencing the stock market index, and this study has chosen the palm oil price as the potential determinant of the stock market index. By employing the bounds test approach, results indicate that the underlying variables of Malaysian FBMKLCI, 3 months interbank rate, exchange rate of RM/USD and the price of palm oil are cointegrated. The long run and short run estimations also indicate the significance of all the variables in influencing the performance of the Malaysian stock market. Similar to some other studies, the interest rate and the exchange rate are found to be negatively significant (Lee et al., 2001; Eita, 2012; Bekhet & Mugableh, 2012). The price of palm oil is positively significant in influencing the stock market index. These results provide some indication to the policy maker on which variables to focus on when they want to influence the stock market index. References Bekhet, H. A. & Mugableh, M. I. (2012). Investigating Equilibrium Relationship between Macroeconomic Variables and Malaysian Stock Market Index through Bounds Tests Approach. International Journal of Economics and Finance, 4(10), 69-81. Eita, J. H. (2012). Modelling Macroeconomic Determinants of Stock Market Prices: Evidence from Namibia. Journal of Applied Business Research, 28(5), 871-884. Fama, E. F. (1970). Efficient Capital Markets: A Review of Theory and Empirical Work. The Journal of Finance, 25(2), 383-417. Fama, E. F. (1991). Efficient Capital Markets: II. The Journal of Finance, 46(5), 1575-1617. Fathi, S., Sameti, M., Nouri, B. A. & Esfahani, S. S. (2012). Examining the Effect of Selective Macroeconomic Variables on the Stock Exchange's Depth and Breadth (Case Study: Tehran Stock Exchange). International Journal of Economics and Finance, 4(3), 97104. Hsing, Y., Budden, M. C. & Phillips, A. S. (2012). Macroeconomic Determinants of the Stock Market Index for a Major Latin American Country and Policy Implications. Business and Economic Research, 2(1).

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Hussin, M. Y. M., Muhammad, F., Abu, M. F. & Awang, S. A. (2012). Macroeconomic Variables and Malaysian Islamic Stock Market: A Time Series Analysis. Journal of Business Studies Quarterly, 3(4), 1-13. Kyereboah-Coleman, A. & Agyire-Tettey, K. F. (2008). Impact of Macroeconomic Indicators on Stock Market Performance. The Journal of Risk Finance, 9(4), 365-378. Lee, C. L., Boon, T. H. & Baharumshah, A. Z. (2001). The Stock Market, Macroeconomic Fundamentals and Economic Growth in Malaysia. Asia Pacific Journal of Economics and Business, 5(2), 44-55. MacDonald, R. & Ricci, L. (2003). Estimation of the Equilibrium Real Exchange Rate for South Africa, IMF Working Paper WP/03/44. Majid, M. S. A., & Yusof, R. M. (2009). Long-run Relationship Between Islamic Stock Returns and Macroeconomic Variables. Humanomics, 25(2), 127-141. Mehr-un-Nisa, & Nishat, M. (2011). The Determinants of Stock Prices in Pakistan. Asian Economic and Financial Review, 1(4), 276-291. Muhammad, J., Ghuslan, M. I. & Jusoff, K. (2009). Long Run Relationship between Malaysian Stock Market and Agriculture Sector. Interdisciplinary Journal of Contemporary Research in Business, 1(6), 157-171. Rahman, A. A., Sidek, N. Z. M. & Tafri, F. H. (2009). Macroeconomic Determinants of Malaysian Stock Market. African Journal of Business Management, 3(3), 095-106. Shrestha, M. B. & Chowdhury, K. (2005). ARDL Modelling Approach to Testing the Financial Liberalisation Hypothesis. Economis Working Paper Series 2005, University of Wollongong Sohail, N. & Hussain, Z. (2012). Macroeconomic Policies and Stock Returns in Pakistan: A Comparative Analysis of Three Stock Exchanges. Interdisciplinary Journal of Contemporary Research in Business, 3(10), 905-918. Sohail, N. & Zakir, H. (2010). Macroeconomic Determinants of Stock Returns in Pakistan: The Case of Karachi Stock Exchange. Journal of Advanced Studies in Finance, 1(2(2)), 181-187. Valadkhani, A., Chancharat, S. & Havie, C. (2009). Analysing the Impact of International Stock Markets and Macroeconomic Variables on the Thai Stock Market. The Business Review, Cambridge, 12(2), 50-56.

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A two-staged Regression-Neural Network Model for Understanding and Predicting the Quality Determinants of E-Government Services in Oman *Sujeet

Kumar Sharma1, Srikrishna Madhumohan Govindaluri1, Radha Krishan Sharma2 of Economics and Political Science, Sultan Qaboos University, Oman 2Rustaq College of Applied Sciences, Ministry of Higher Education, Oman *[email protected]

1College

Abstract: The online e-government services are taking place of key infrastructure in developing countries. The purpose of this paper is to measure the quality determinants of e-government services from user’s point of view in Oman. The proposed model is based on SERVQUAL and customized for e-government services with constructs such as responsiveness, security, efficiency, and reliability. Neural network, a nonlinear model is developed to understand and predict the independent variables of e-government services’ adoption. This online survey was conducted to collect data from 238 users. The results obtained from neural network were compared with the results from multiple linear regression. The results obtained from neural network model were much better than the regression model in prediction of e-government services’ adoption and found nonlinear relationship of independent variables such as responsiveness, security, efficiency, and reliability and demographic variables(e.g. gender and job type) with e-government services’ adoption. This research will give substantial insight to government officials who are responsible for developing and implementing e-government portals in Oman. This is perhaps the first attempt to address the issue of quality determinants of e-government services in Oman and will contribute substantially to the literature of e-government. Keywords: Service quality, e-government, neural network model, regression model, Oman 1. Introduction Globally governments have realized the potential benefits of utilizing the internet to improve services and many have developed the needed information technology infrastructure. Now a days, Internet is ubiquitous. In the distant past, it was mainly used for educational and information-sharing purposes (Schneider & Perry 2000). There are many (and an ever-growing) number of internet applications that have been developed to facilitate our day-to-day activities. E-government is one of the vital classes of Internet applications. The World Bank (2012) defines e-government as “the use by government agencies of information technologies (such as Wide Area Networks, the Internet, and mobile computing) that have the ability to transform relations with citizens, businesses, and other arms of government”. Here, the World Bank focuses first on relationships between governments and its citizens and institutions, and then it elaborates on this with: “These technologies can serve a variety of different ends: better delivery of government services to citizens, improved interactions with business and industry, citizen empowerment through access to information, or more efficient government management. The resulting benefits can be less corruption, increased transparency, greater convenience, revenue growth, and/or cost reductions”. e-Government is being considered as a ‘paradigm shift’ for government services helping in reducing costs, improving service quality, enhancing transparency, and other related administrative services (Helbig, Gil-Grcia, & Ferro, 2009). There has been a substantial pressure on governments from their citizens to go online to make sure transparency and improve efficiency of services. In GCC countries, Dubai introduced e-voting in elections for half the members of the United Arab Emirates’ consultative assembly (The Economist, 2008). In Bahrain, government has implemented Enterprise Architecture Project (EAP) initiative. The purpose of this initiative was to streamline all standards and procedures among government departments pertaining to ICT (Bahrain Tribune, 2009). A separate section has been appended in the following section on e-government initiatives in Oman. There has been three types of interactive processes in the e-government namely government to government (G2G), government to business (G2B) and government to citizen (G2C). G2C interactive process is being used in this study. The purpose of this paper is to investigate the effects of quality determinants of egovernment services from user’s perception/opinion and their demographic details on adoption of e-government services in a Middle East Country, namely Oman. This paper is organized as follows. In Section 2, survey of Internet and e-government in Oman. In section 3, we review some of the literature dealing with the e-government service quality in general and, more specifically, on evaluation measures. We follow this with an outline of data description and methodology in section 4. In section 5, Discussion of results and implications are presented. Conclusion is presented in the final section 6. Survey of Internet and E-Government in Oman: Internet was launched in Oman during the major modernization drive in 1990’s by the official internet service provider, Omantel, then a public sector organization. Since 2000, Oman has achieved an accelerated growth in the number of internet users at a compounded annual growth rate of 27%. As of the first quarter of 2012 there were 4,926,405 mobile telephone subscribers and 2,483,833 internet subscribers (Telecom Regulatory Authority, 2012). However, according to the same source the penetration of mobile telephone and internet per inhabitant has increased to reach 177.63% and 89.6% respectively. The development of information and technology infrastructure to lay the foundation for a digital society that would support e-Government and e-Commerce constitutes one of the main strategic priorities for the Omani Government. Thus, the Information Technology Authority (ITA), an independent legal body allied to the Ministry of National Economy was set up by the Royal Decree 52/2006. The initiatives by the ITA to establish Oman as a sustainable knowledge-based economy has provided the technology infrastructure required for the diffusion of internet technologies into a number of sectors. Oman's e-government strategy was unveiled on May 7th 2003, followed by several modernizing projects aimed to enhance the ICT sector and improve the society digital awareness and IT capacity. An Information Technology Authority (ITA) was created in 2006 by a royal decree to plan for and oversee national ICT projects (ITA, 2012). The first aim for the Omani government was to introduce E-government and form a digital society. Consequently, Information Technology Authority (ITA) was set up by the Royal Decree 52/2006. This independent legal body was allied to the Minister of National Economy. “ITA is in

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) charge for implementing national IT infrastructure projects and supervising all projects related to implementation of the Digital Oman Strategy while providing professional leadership to various other e-Governance initiatives of the Sultanate” According to the 2008 census (Omani Ministry of National Economy, 2012), Oman is a country of 2.77 million people with a population growth rate of 2% and a residential density of 7.5 people per kilometer. Expatriates constitute 29.4% of the total population. It is located in the southeastern region of the Arabian Peninsula next to Saudi Arabia and the United Arab Emirates. Oman is divided into three main governorates and five regions. The capital city is Muscat and its currency (the Rial) equals US $2.60. Its main revenue comes from oil and natural gas. The country’s economic performance has improved drastically following a sharp increase in oil prices in 2000, with GDP reaching 27.95 billion Rials (US $72.6 billions) in 2012, up 4% from 2010 (Reuters, 2012). The momentum among different government organizations to move toward e-government differs considerably. There are some active players in the field but some others do not see it as a priority or, at least, not in the short term. Muscat Municipality is one of the leaders. Specifically: it has introduced online information services where clients can find up-to-date information about building permits, parking offences, rent contracts and municipality licenses; clients can also apply to different services and pay online using the M-Rial (an e-currency for municipality services); Internet cafés and service bureaus have been encouraged to participate in this e-currency initiative (through financial incentives); and the municipality is also working with local banks to facilitate payments through them and with Royal Oman Police (ROP) to utilize their e-purse solution. The ROP is also leading in e-government adoption. Users can check and pay for Driving Violations and Visa Status online from the ROP web site. A Civil Status system that collects information about deaths, births, marriages and divorces among residents, has also been introduced. The system is supported by a smart multifunction ID card that features biometric recognition and provides instant access to the holder’s civil status details for improved administrative processes. In addition, it is used now as an electronic wallet (e-purse) for transactions with government and business organizations. Since the card has an embedded electronic chip, it can also serve future functions such as linking to other government and/or business institutions. The Ministry of Commerce and Industry has initiated a One Stop Shop project for company registrations. The process of registering a company usually needs inputs from different government parties - such as the Oman Chamber of Commerce and Industry, Muscat Municipality, the ROP, the Ministry of Commerce and Industry and the Ministry of Manpower. The process is lengthy and time-consuming because of geographic constraints. Initially, representatives from the different parties were co-located. Currently, processes are being ported online at a cost of around US $2.6 million. 2. Literature review Developing an e-government system has never been an easy undertaking even for advanced nations. Around a decade ago, Swartz (2003) revealed that despite the massive success of e-commerce in the UK (that cleared $1.6 billion in retail sales at that time), the British have been slow to use e-government - with only 15% of British population using such services in the year 2001. A decade later, advanced nations (early adopters) e-government experiences are used to provide insightful lessons to developing nations, which are struggling to cope with the challenges and opportunities that modern technology has to offer. Several scholars aimed to compare e-government endeavors between advanced nations and developing ones to investigate e-government adoption factors and barriers to dissemination (see Chen et al 2006; Lee et al 2005; Sharma & Chandel 2013). Al-Busaidy & Weerakkody (2009) proposed a model which reveals that improved accessibility, efficiency and availability of public services may lead to high levels of confidence among citizens in relation to egovernment adoption in Oman. Service quality affects customer satisfaction. A popular definition of service quality proposed by Parasuraman et al. (1988) is “conformance to customer specifications” it means that the customer’s perception of quality that matters, not that of management. Over a period of time, SERVQUAL(Parasuraman et al., 1988) has been used as a common service quality measuring tool with required modifications as per the need of researchers. Wang et al.,(2003) proposed IS-SERVQUAL scales for information systems environments. This scale has been an appropriate for measuring customer support and purchase behaviour and not for the internet customer. The various researchers have been trying to measure electronic service quality, there is still need to improve existing literature. The instrument “eTailQ” developed by (Wolfinbarger & Gilly, 2003) resulted into four factors: web site design; reliability/fulfilment; privacy/security and customer service or responsiveness. Parasuraman et al. (2005) developed “E-S-QUAL scale” a multiple-item scale comprising four dimensions: efficiency, fulfilment, system availability, and privacy to measure service quality provided by websites. There are several studies discuss importance of these factors in detail. The website design(layout, graphics, etc.) affects the perception of customers about online shopping ( Hoque & Lohse, 1999). Security and privacy issues of customers relating to financial activities have a positive relationship with attitude towards online financial services(Montoya-Weiss et al., 2003). Reliability and fulfilment have been emerged as a critical factor in electronic service quality (Wolfinbarger & Gilly, 2003). Ease of use plays an important role in online transactions as many customers prefers simple steps in finishing transactions(Parasuraman et al., 2005) There is a substantial proliferation of research in e-government adoption, recent trend aimed to measure e-government service quality perceived by users to promote excellence in service delivery and implementations. Tan et al., (2010) tested a model of e-government service quality focusing on transactional frequency as a moderator of citizens’ quality perceptions of e-government sites. Krishnan & Teo (2011) used the Technology-Organization-Environment theory along with some factors drawn from the literature on citizen participation in ICT to measure their relationships with e-government service quality. In addition, Papadomichelaki & Mentzas (2009) looked into e-government users perceptions on e-government services by conceptualizing an e-government service quality and test it against a developed scale. These models are seen more oriented towards advanced nations where developing countries are yet to receive scholars’ attention. Further studies are required to test the viability of these models in developing nations, examine previously developed online services quality models, and/or develop a new model based upon a combination of models and service quality constructs drawn from the literature. Similarly, this study aims to measure e-government service quality in Oman (developing nation) by testing a previously adopted model by Sohail & Shaikh (2008) and Sharma et al., (2013). Although the mentioned model by Sohail & Shaikh (2008) was tailored to test internet banking service quality, it still provide insightful measure for any other online services and especially to egovernment services in the developing world. This study involves users perceptions on four main measures which has been customized to e-government based on the model adopted by Sohail & Shaikh (2008) and Sharma et al., (2013) as follows: 1. Efficiency of e-government websites. 2. Security of e-government websites.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) 3. 4.

Reliability of online services offered in e-government websites. Responsiveness of services in e-government websites.

Multiple Linear Regression Model: Multiple linear regression (MLR) analysis is a statistical method used for modeling the linear relationship between one dependent variable and several independent variables. The MLR is used to obtain the significant independent variables in this study. The basic purpose of using MLR is to compare the results with Neural network and to observe whether nonlinear model can perform better than MLR. The general MLR model is as follows

Yi   0  1 X i1   2 X i 2     p 1 X i , p 1   i

(1)

Where, β0, β1,…, βp-1 are parameters and Xi1,…,Xi,p-1 are known constants and

i

are statistically independent error terms with

N (0,  ) 2

The

proposed

MLR

equation

to

predict

the

quality

determinants

of

e-government

services

is

as

follows

Adoptioni   0  1 * Securityi   2 * Efficiencyi   3 * Re liabilityi   4 * Re sponsivenessi 

 5 * Genderi   6 * Agei   7 * Educationi   8 * Jobtypei   i , where, i  1, n The assumptions of normality, linearity, constant variance and independent error terms should be satisfied to get a valid MLR model. Neural network: Neural network is a “massively parallel distributed processor made up of single processing units, which have a natural propensity for storing experimental knowledge and making it available for use” (Haykin, 2001). A neural network is similar to human brain as it is able to obtain knowledge from its environment by learning process. It has become a popular research tool because of availability of high speed computers. The mathematical model of neural network is given in figure 1. This figure shows a one hidden layer feed forward network with

x1 , xn , as

inputs and

y k as

output. The synaptic weights are assigned to each input and are

transferred to hidden layer which is made of a number of hidden neurons. The weighted summation of the inputs is performed by each neuron and transferred to a nonlinear activation function. The output of neural network is given as follows

y k   ( wkn v k )   (v)

Where

wkn

this study

is synaptic weight between output of neuron k and input of neuron n and

 (v)

is the nonlinear activation function and in

 (v) = Tanh(v) is used. There are several advantages of neural network over traditional statistical methods. A neural

network can linear or nonlinear in nature. In MLR, dependent and independent variables must follow normal distribution whereas in neural network there is no restriction on the nature of variables (Chiang et al., 2006). Figure 1: The mathematical model of the neural network

x0

wk0

x1

wk1

1

1

x2

wk2

. .

. .

xn

wkn

Inputs

Activation Function

wk0 =bk(bias)

∑

vk

()

Summing Function

k Threshold

Synaptic weights

59

Output

yk

Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) The neural network model has outperformed than traditional statistical methods such as logistic, multiple, and discriminant regression analysis ( Chiang et al., 2006). There are applications of neural network model in various disciplines such as finance (Brunell & Folarin, 1997), real estate (Nguyen & Cripps, 2001), medicine (Delen et al.,2005), consumer choice (Chiang et al., 2006) and its applications in information systems research are limited (Shmueli and Koppius, 2010; Chong, 2012) 3. Methodology The methodology adopted in this paper is similar to the approach suggested by Shmueli & Koppius (2010). This paper will use Neural network as a main tool of analysis. Furthermore, the performance of Neural network is compared with multiple regression and whether there are differences in the quality determinants predicting the adoption of e-government services. Data collection: A survey questionnaire was developed to explore and understand the quality determinants of e-government services’ adoption using Google docs. The developed survey was in English and Arabic languages as there are significantly large expatriates resides in Oman. The survey was translated into Arabic language by a language instructor to maintain consistency of words. The survey was pre-tested with 20 users of e-government services. A link of online survey was sent to respondents for data collection. Two hundred and eighty responses were received and 238 responses found usable. Variables and measurements: This paper explores users perceptions on four main quality determinants which has been customized to e-government services based on the model adopted by Sohail & Shaikh (2008) and Sharma et al., (2013) such as Efficiency, Security, Reliability, Responsiveness of services in e-government websites. The demographic variables such as gender, age, education and job types were measured. All constructs were measured on 5-point Likert Scale ranging from 1(strongly disagree) to 5(strongly agree). Twenty one variables were used to measure independent variables and 3 variables were used to measure adoption of e-government services as dependent variable. Scale reliability and factor analysis: The reliability of constructs was measured using Cronbach alpha. The values of Cronbach alpha for all constructs are given in Table 1. These values are greater than 0.70 which are consistent with the recommendations made in Hair et al., (2010). The principal component analysis is used in factor analysis because it helps in including as many factors as possible in analysis. As far as the suitable rotation policy is concerned we used orthogonal varimax rotation because it assists in optimizing number of variables which higher loadings on a particular factor resulting in identification of each variable with a single factor. Furthermore, orthogonal varimax rotation helps in generalization of research findings, which is a primary goal of any empirical research. The factor loading are given in table 1. The factor loadings higher than 0.5 ( Hair et al., 2010) have been considered in the analysis. A factor analysis was performed on 16 items and found 4 meaningful clusters. In selecting the extraction of factorial groups, the Kaiser criterion was adopted. As per the Kaiser criterion which was proposed in 1960s, all factors should be accepted whose Eigen values are higher than 1.0. Therefore, four factors were extracted. A descriptive summary of all items have been presented in table 1. Table 1: Descriptive statistics and Principle component analysis Items Mean S.D. Factor loadings Efficiency 1 3.83 .746 .793 Efficiency 1 3.71 .799 .868 Efficiency 1 3.64 .898 .805 Efficiency 1 3.68 .824 .690 Security 1 3.43 .777 .845 Security 1 3.55 .919 .856 Security 1 3.59 .884 .538 Security 1 3.63 .878 .761 Security 1 3.67 .899 .568 Reliability1 3.63 .898 .663 Reliability1 3.26 .999 .620 Reliability1 3.12 .881 .779 Reliability1 3.08 .939 .685 Responsiveness1 3.10 .948 .822 Responsiveness1 2.72 .994 .803 Responsiveness1 2.84 1.017 .830

% of Variance

Eigen values

Cronbach alpha

41.376

6.62

0.889

10.458

1.673

9.288

1.486

0.783

6.291

1.007

0.840

0.844

Multiple Linear Regression analysis: The multiple linear regression model is applied to find the statistically significant independent variables to predict e-government services’ adoption. The purpose of applying regression model is to compare results with the neural network model. The summary of MLR results is given in table 2. The value of R 2 is approximately 55% which is good enough. Tolerance is used in regression model to test the multicollinearity. Tolerance can be defined as “the proportion of variability of each independent variable which is not explained by its linear relationship with other independent variables in the model”. The value of tolerance varies from 0 (low) to 1 (high). When the tolerance is low, multiple correlation is high and hence there is a possibility of multicollinearity (Bryman & Cramer, 1997). The values of tolerance for all independent variables are more than 0.5 which implies that the probability of multicollinearity is low. VIF and tolerance are closely related in that VIF is the reciprocal of tolerance (NorusÏis, 1993). Therefore, VIFs for all independent variables are all low and less than 2 which again implies that the multicollinearity is low. The results shows that the responsiveness is the most important construct in the e-government services’ adoption followed by reliability, security, and efficiency. The demographic variables are not statistically significant in the regression model.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Table 2: Coefficients Constructs

(Constant) Security Efficiency Reliability Responsiveness Gender Age Education Job type

Unstandardized Coefficients B

Std. Error

Standardized Coefficients Beta

.875 .210 .118 .199 .227 -.031 -.015 .002 .058

.245 .054 .047 .053 .041 .059 .037 .066 .052

.221 .148 .233 .320 -.024 -.020 .001 .051

t

3.571 3.874 2.494 3.738 5.520 -.522 -.400 .028 1.116

Sig.

.000 .000 .013 .000 .000 .602 .690 .978 .266

Collinearity Statistics Tolerance .609 .562 .512 .592 .927 .758 .724 .958

VIF 1.643 1.779 1.953 1.689 1.078 1.319 1.380 1.043

R2 =0.547, RMSE = 0.682 Neural network analysis for the adoption of e-government services: This research used the Tiberius 7.0.7 to develop the neural network model. The multilayer perceptron training algorithm was used to train neural network. Cross validations were done to avoid over fitting of the model. There is no algorithm available to determine exact number of neurons in a neural network (Sexton et al.,2002). Therefore, a neural network was used with 1-10 hidden nodes (Wang & Elhang, 2007). A neural network model with 10 hidden nodes was used to maintain minimum error. The input layer was made up of 8 independent variables such as responsiveness, security, efficiency, reliability, age, gender, education and job type whereas adoption was dependent variable. This research employed a 10-fold cross validation where 70% of the data was used for the purpose training and 30% for testing of the neural network. The Root Mean Square Error of the 10 validations used for the accuracy of the model. The RMSE of neural network model is given in table 3. The average RMSE of training model was 0.299 and of testing model was 0.304 with ignorable standard deviation whereas RMSE of regression model was 0.547. These results implies that neural network model is much better than regression model. Table 3: RMSE for the neural networks Network Training Testing 1 0.282 0.291 2 0.302 0.315 3 0.294 0.317 4 0.279 0.304 5 0.319 0.307 6 0.318 0.311 7 0.291 0.287 8 0.309 0.312 9 0.314 0.308 10 0.284 0.291 Mean 0.299 0.304 S.D. 0.015 0.011 The sensitivity analysis was also performed to compute the average importance of independent variables in predicting dependent variable and given in table 4. The neural network was able to capture nonlinear relationship between some demographic variables and adoption of e-government services whereas all demographic variables were statistically insignificant in regression model. The rank of the independent variables’ importance is summarized as responsiveness, reliability, security, efficiency, gender, job type. Moreover, education and age are not contributing in neural network model significantly. Table 4 :Sensitivity analysis Variables Relative importance Responsiveness 1 Reliability 0.731 Security 0.716 Efficiency 0.398 Gender 0.347 Job type 0.247 Education 0.031 Age 0.005 Discussion of results and implications: The findings of this paper suggests that the results obtained from the neural network model are more accurate in predicting quality determinants of e-government services’ adoption. The regression model performs well and most of the independent variables were statistically significant and was able to explain 55 percent variance in e-government services’ adoption. However, the neural network model was better and could capture linear as well as nonlinear relationship between dependent and independent variables. The four variables in this study are responsiveness, security, efficiency and reliability and these independent variables are significantly contributing in the e-government services’ adoption. Based on the results obtained from the neural network

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) model, responsiveness is the most important predictor or independent variable in measuring the quality of e-government services. The responsiveness includes the response of user’s queries. It has been observed that user’s problems are taken care in short period which is a good sign for more acceptance of the e-government services in Oman. The findings of the study supports the study done by (Griffith & Krampf, 1998), they found responsiveness as a key indicator of service quality in the usage of online retailers. It has been also been noted that “reliability” is the second most important and influencing construct affecting the acceptance of quality of the e-government services in Oman. As reliability includes no waste of time, page uploading is fast, and websites are usually available for business. The findings of the present study supports the study done by Wolfinbarger & Gilly (2003), they also found that reliability was the strong predictor of customer satisfaction and quality and the second strongest predictor of loyalty/intentions to repurchase at a website. Reliability has also been observed as the most important factor in electronic service quality (Palmer et al., 2000). The third important construct was “security”, which involves saving users from the risk of fraud and financial loss. Users keeping security on number four which shows that the faith of users on the government portals. As study involves only government portals where risk of any financial loss is less in Oman, users believe that transaction cancellation or completion reports are being generated well in time. The fourth construct in the present study is “efficiency”, which is deemed important in the evaluation of the quality of the e-government services in Oman. Efficiency in egovernment services is basically simplicity and organization of the website, which in turn attracts more users towards the use of egovernment portals. Ease of service quality is also an important aspect of the efficiency. How information is organised by website is also an important aspect of efficiency which attracts more users. Furthermore, Based on the mean values along with standard deviation of all items, we can summarize that majority of the e-government website users are satisfied with the quality of the service provided by the portals in the Oman. It observed that users are satisfied that their personal details along with transactional details are kept confident and were not shared with third party for any purpose. It is also observed that users are confident in using portals and they feel it is easy and simple to use. With this observation, it can be suggested to the government to make their websites as simple as possible. The four demographic variables (e.g. age, gender, education, job type) were also considered in this study. None of these variables were significant predictor in the regression model whereas the neural network model was able capture significant nonlinear relationship of gender and job type with e-government services’ adoption. 4. Conclusion This study has compared results of neural network model with regression model. The linear regression model is appropriate to use when all independent and dependent variables follow normal distribution. In this study, responsiveness, reliability, security, and efficiency were statistically significant predictors of adoption in regression model whereas demographic variable were not contributing significantly. The neural network model can be used to explore linear as well as nonlinear relationship of dependent variable with independent variables. The neural network model explores the relationship of e-government services’ adoption with gender and job type in addition to aforementioned constructs. This study is of paramount importance to managers of the e-government portals in Oman and will help in understanding and predicting the common perception of end users. Though it is not advisable to generalize results of this study about whole Oman because of the small sample size and study was done in the capital city “Muscat” but it can through a light on grey areas where managers need to work more to enhance adoption of e government services. On one hand small sample size is a shortcoming of this study whereas it paves a way for further research as well. Further research can be done by using cluster sampling and taking all major cities of Oman as clusters. As lots of money is being invested by the government to develop and implement egovernment portals, there is need to motivate users to use more these portals so that an appropriate return can be expected on huge investment. References Al-Busaidy, M. & Weerakkody, V. (2009). E-government diffusion in Oman: a public sector employees' perspective. Transforming Government: People, Process and Policy, 3(4), 375-393. Bahrain Tribune. (January 18, 2009). E-GA launches new initiative, 3. Brunell, P. R. & Folarin, B. O. (1997). Impact of Neural Networks in Finance. Neural Computation & Application, 6, 193-200. Bryman, A. & Cramer, D. (1997). Quantitative Data Analysis with SPSS for Windows: A Guide for Social Scientists, Routledge, London. Chen, Y. N., Chen, H. M., Huang, W. & Ching, R. K. H. (2006). E-Government strategies in developed and developing countries: an implementation framework and case study. Journal of Global Information Management, 1(14), 23–46. Chiang, W. K., Zhang, D. & Zhou, L. (2006). Predicting and explaining patronage behavior toward web and traditional stores using neural networks: A comparative analysis with logistic regression. Decision Support Systems, 41(2), 514–531. Chong, A. Y. L. (2012). Predicting m-commerce adoption determinants: A neural network approach. Expert Systems with Applications, 40, 523-530 Delen, D., Walker, G. & Kadam, A. (2005). Predicting Breast Cancer Survivability: A Comparison of Three Data Mining Methods. Artificial Intelligence in Medicine, 34, 113-117. Griffith, D. A. & Krampf, R. A. (1998). An examination of the web based strategies of the top 100 US retailers. Journal of Marketing Theory and Practice, 6(3), 12-23. Hair, J. F., Black, W. C., Babin, Anderson, R. E. & Tatham, R. L. (2007). Multivariate Data Analysis, 6th ed., Prentice-Hall, Upper Saddle River, NJ. Haykin, S. (2001). Neural networks: A comprehensive foundation. Prentice Hall. Helbig, N., Gil-Grcia, J. & Ferro, E. (2009). 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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Proceedings. Paper 6. Lee, S.M., Tan, X. & Timi, S., (2005). Current practices of leading e-government countries. Communications of the Association for Computing Machinery, 48 (10), 99–104. Montoya-Weiss, M. M., Voss, B. V. & Grewal, D. (2003). Determinants of online channel use and overall satisfaction with a relational, multichannel service provider. Journal of the Academy of Marketing Science, 31(4), 448-58. Morgan, D. L. (1988). Focus Groups as Qualitative Research, Sage Publications, Newbury Park, CA. NorusÏis, M. J. (1993). SPSS for Windows Base System User's Guide Release 6.0., SPSS Inc., Chicago, IL. Nguyen, N. & Cripps, A. (2001). Predicting Housing Value: A Comparison of Multiple Linear Regression Analysis and Artificial Neural Networks. Journal of Real Estate Research, 22(3), 313-336. Omani Ministry of National Economy. (2012). Final Results of Census 2010 viewed 08-08-2012 http://www.mone.gov.om/documents/Census_2010.pdf Palmer, J. W., Bailey, J. P. & Faraj, S. (2000). The role of intermediaries in the development of trust on the WWW: the use and prominence of trusted third parties and privacy statements. Journal of Computer Mediated Communication, 1(3), 7-20. Papadomichelaki, X. & Mentzas, G. (2009). A multiple-item scale for assessing e-government service quality. In Electronic Government Springer Berlin Heidelberg, 163-175. Parasuraman, A., Zeithaml, V. A. & Berry, L. L. (1988). SERVQUAL: a multiple-item scale for measuring service quality. Journal of Retailing, 64(1), 12-40. Parasuraman, A., Zeithaml, V. A. & Malhotra, A. (2005). E-S-QUAL: a multiple-item scale for assessing electronic service quality. Journal of Service Research, 7(3), 213-33. Reuters .(2012). Oman’s real GDP up 6% in 2011 – official. Retrieved 8th August, 2012 http://www.reuters.com/article/2012/05/08/oman-gdp-idUSL5E8G8EIZ20120508 Sharma, S. K., Al-Shihi, H. & Govindaluri, S. M. (2013). Exploring quality of e-Government services in Oman. Education. Business and Society: Contemporary Middle Eastern Issues, 6(2), 87-100. Sharma, S. K. & Chandel, J. K. (2013). Technology acceptance model for the use of learning through websites among students in Oman. International Arab Journal of E-Technology, 3(1), 44-49. Schneider, G. P. & Perry, J. T. (2000). Electronic Commerce, Cambridge MA, Course Technology. Sexton, R. S., Johnson, R. A. & Hignite, M. A. (2002). Predicting internet/e-commerce use. Internet Research, 12(5), 402–410. Shmueli, G. & Koppius, O. R. (2010). Predictive analytics in information systems research. MIS Quarterly, 35(3), 553–572. Sohail, M. S. & Shaikh, N. M. (2008). Internet banking and quality of service: Perspectives from a developing nation in the Middle East. Online Information Review, 32(1), 58–72. Swartz, N. (2003). British slow to use e-government services. Information Management Journal, 37(2). The Economist. (February, 2008). The electronic bureaucrat: A special report on technology and government, 1–18. TRA. (2012). First Quarter Telecom sector Indicators. Retrieved 8 th of August, 2012 http://www.tra.gov.om/newsite1/sectorIndicatorsQ12012.aspx?Lang=1 Tan, C. W., Benbasat, I. & Cenfetelli, R. (2010). Understanding the antecedents and consequences of e-Government service quality: transactional frequency as a moderator of citizens’ quality perceptions, 18th European Conference on Information Systems, 1558-1570, The World Bank. (2012) E-Government Definition [Internet] Available from: [Accessed July 20 th 2012] Wang, Y. S., Wang, Y. M., Lin, H. H. & Tang, T. I. (2003). Determinants of user acceptance of internet banking: an empirical study. International Journal of Service Industry Management, 14(5), 501-20. Wang, Y. M. & Elhag, T. (2007). A comparison of neural network, evidential reasoning and multiple regression analysis in modelling bridge risks. Expert Systems with Applications, 32(2), 336–348. Wolfinbarger, M. F. & Gilly, M. C. (2003). eTailQ: dimensionalizing, measuring, and predicting etail quality. Journal of Retailing, 79 (3), 183-98.

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Corporate Governance and Firm Free Cash Flows: Evidence from Malaysia *RaziehA dinehzadeh, RomlahJaffar University Kebangsaan Malaysia, Malaysia *[email protected]

Abstract: This study provides view of free cash flow and corporate governance (CG) by addressing the relationship between audit committee characteristics with free cash flow. Specifically, this study exploreswhetheraudit committee characteristics are substitutes to control agency problem regarding to free cash flow within Malaysian firms. The data set comprise of 200 firm observations Malaysian companies for four consecutive years which comprise of 2005 to 2008. The results shows thatsize of audit committee, frequency of audit committee meeting, proportion of audit committee independence are positively associate with level of free cash flow (FCF). The results of study highlight the importance of corporate governance mechanism, in the form of audit committee characteristics, in the management of cash flow. Keywords: Free cash flow, audit committeecharacteristics, corporate governance, agency problems, Malaysia 1. Introduction The concept of free cash flow has been introduced byJensen (1986), in which it refers to the amount of cash which is in surplus that can finance projects that have positive net present values. Managers (agents)can allocatethe free cash in a profitable investments or spend it inefficiently in restructuring plans to increase the size of the firm for the purpose of increasing managers’ remuneration (Dorff, 2006).On the other hand, manager could also spend the free cash flow as dividend payment to shareholders. Therefore, management decision on free cash allocation could reduce or increase the agency problem within a firm. As stated in agency theory, when ownership and control are separated management’s interest can deviate from owners’ interests (Jensen, 1986). Therefore controlling and monitoring decisions by the management becomes essential for the board of directors in order to protect the interest of shareholders(Fama & Jensen, 1983).Board of directors and audit committee are the body primarily responsible for management in corporate governance structure of a firm which include the internal governance of a firm. Subsequently, the committee evaluate the effectiveness of managers in the allocation and management of free cash flow. This study focuses more on audit committee characteristics which consists of members of the board that helps in overseeing the management of free cash flow and the financial reporting process.The audit committee provide a communication bridge between management and the internal and external auditors (Carcello & Neal, 2000).The BRC (1999)states that an audit committee which has more independent members, who are financially literate, hold more frequent meetings and, and larger in size is better capable to evaluate management’s decision on accounting issues and reporting activities. This study, considers audit committee characteristics in order to study if it has any relationship with level of free cash flow of a firm. The argument is since corporate governance attributes such as audit committee characteristics which are called internal governance within a firm alleviate agency problems in a firm especially by considering the modern business world. Therefore, the main objective of this research is to examine whether there is any relationship between internal governance characteristics and free cash flow. This study considers the audit committee as the body primarily responsible for management in corporate governance structure of a firm. The study focuses on the analysis of audit committee characteristics and its interrelationship with free cash flow. In particular these attributes of corporate governance variables are examined to determine how they impact free cash flow using a unique complete dataset of Malaysian listed firms. The main contribution of the current study it its being the first study, to the best of our knowledge, to examine the relationship between audit committee characteristics and amount of free cash flow . This study allows us to establish the significant relationship between these two with focus on internal governance in corporate governance. Another contribution discovers that most previous studies about these subjects have been carried out in developed countries. But, this study was done in Malaysia, where the capital market is at the infancy stage. 2. Literature Review Agency theory defines the relationship between management and stockholders as a contract between agents and principals. The agent’s behavior is conditioned by implicit and explicit incentive structures stated in the contract. Agency problem goes up when the managers or agents make decisions in the best interests of themselves without considering shareholders’ interests.Jensen (1986)states that agency problems which are related to equity are due to the existence of excessive free cash flows at the discretion of manager (agent). Jensen (1986)explained free cash flow as: “.. The extra cash or in surplus of that needed to fund all projects that have positive net present values when discounted at the appropriate cost of capital.” So, free cash flow follows a particular conflict between managers and shareholders because managers have control over this amount. So, when firms have extra cash there is a risk of spending it in projects with no added value than having good opportunities for investment. Normally, the managers prefer to spend this money instead of allocating the money among shareholders in the form of dividends. Managers are not certain whether the growth rate would stay the same for the next year hence they are cautious of distributing the free cash flow as dividend among shareholders. On the other hand, Jensen (1986)free cashflow hypothesis suggest that if firms have cash in excess of their requirement of investment in positive net present value projects, it is better to pay these cash as dividend in order to reduce managerial discretionary of funds and thus avoid agency costs of free cash flow. The literature on cash holding and capital structure normally regards the policies of firms to keep more cash if potential cash flows are more unstable and investment opportunities are less expected in the future (Opler et al., 1999). Corporate governance characteristics are predicted to influence the level of free cash flow. Audit Committee Size: An effective audit committee can control and monitor the performance of management. However its effectiveness can depend on its size (Vinten, 1993) .The dependence theory states that there is a positive association between size of an

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) audit committee and financial performance of firm (Pierce & Zahra, 1992). Accordingly, the audit committee becomes more effective when the size of the committee goes up, due to the fact that when company faces problems, it has more resources (man power) to solve these problems. When the size of the committee is big, it is also means there are more skills and knowledge sharing which can be utilized to monitor the financial reporting and procedure. BRC (1999)suggestthat audit committees must consist of at least three members and at least one of its members should be financially literate. Research has shown that the board’s size is a significant aspect in governance structure; although the consequences are uncertain on whether having smaller size is better than larger ones (see for examples (Dalton et al. (1999); Eisenberg et al., 1998; Yermack, 1996) .There is mixed results of the effect of audit committee’s size towards performance. A small audit committee size may be more efficient due to less involvement in technical issues. Therefore, audit committee with smaller size may provide a better oversight in financial reporting issue. On the other hand, a larger audit committee may provide a wider range of experience and expertise. Other studies indicates a positive but a weak relationship between the size of audit committee and a company’s performance(Eichenseher & Shields, 1985; Menon & Deahl Williams, 1994;Pincus et al., 1990). The results from prior studies are not clear about the effect of audit size committee on firm performance. However, this study predict the efficiency of audit committee increases while the size of the audit committee goes up especially in matters that company face problems because it has more options for resolving issues. H1: There is a relationship between audit committee size and free cash flow. Audit Committee Independence: An audit committee member who is independent is also considered as efficient (Kannan Raghunandan et al. (2001). Independent audit members lead to the improvement in the independency between management and external auditors (Abbott et al., 2004) by accurately communicate issues within the firm to the management (Kannan Raghunandan et al. (2001). Additionally, independent audit committee possesseshigher business knowledge which leads to less accounting conflicts. Kannan Raghunandan et al. (2001) further suggest that independent audit committees assess the internal auditing plans of a firm and its achievements and protect the shareholder’s interests (DeZoort and Salterio (2001).Therefore audit committee members should be independent of the management. Accordingly, the independent audit committee members would ensure better financial management of companies which also include the management of free cash flow. Therefore, the hypothesis is stated as follows. H2: There is a relationship between audit committee independence and free cash flow. Frequency of Audit Committee Meeting: An effective audit committee should carry out its tasks diligently for the purpose of achieving its goals and purposes (FCCG, 1999)Since diligence is difficult to monitor directly, past researchers utilizes audit committee meeting regularity as a substitute for diligence (K Raghunandan & Rama, 2007). Meeting frequency is measured as the number of audit committee meetings held during the year. The number of meetings which are held by audit committee would represent the activity of the board, and Menon and Deahl Williams (1994) stated that there is a positive association between meeting frequency and outside directors or independent directors of a firm. The BRC (1999) and the also state that an audit committee inside a firm should have a meeting at least four times during a financial year. The committee plan and make decision during these meetings. In addition, making decisions on free cash flow could be done during these meetings which are an important factor of this study by regarding if there is any relationship with free cash flow with audit committee meetings. Previous studies show that the number of financial reporting issues decrease when an audit committee meets frequently during a year. A more frequent meeting during a year with the outside auditors also means that problem related to financial matter and auditing can be resolved more quickly(K Raghunandan & Rama, 2007). Therefore, it is predicted that an audit committee who meet more frequently, would be able to resolve many financial related issues which also include the decision on the spending free cash flow. H3: There is a positive relationship between audit committee meeting and free cash flow. Financial Expertise: To be an effective and efficient board structure, at least one members of audit committees need to be financially literate (Abdul Hamid et al., 1999). Malaysian Code of Corporate Governance has stated this specific requirement in which a minimum of one member of audit committee must be a financial expertise a firm (Rahman & Ali, 2006).DeZoort and Salterio (2001)state that financial expertise within an audit committee might increase the probability that discovered objects will be associated with the audit committee structure. These kinds of audit committee members are more capable for controlling and monitoring internal governance inside a firm and in order to recognize and solve different financial and accounting problems which can happen inside a firm (Zhang et al., 2007). In addition, audit committees which include financial experts would have more connection with their internal auditors inside a firm(Kannan Raghunandan et al., 2001) .Audit committee structures who have more financial skills could recognize easier auditor opinions and can prevent the auditors in conflicts which happened inside a firm between management and shareholders (DeZoort & Salterio, 2001) .So, according to prior studies there is an association between financial expertise and management conflicts and it could lead to affecting management decision on spending free cash flow. In this research the relationship between free cash flow and financial expertise is considered. Therefore, existing audit committee members with financial expertise lead to have effective and efficient internal governance. But, making decisions on keeping or spending free cash flow is still questionable in firms even when there is powerful internal governance. H4: There is an association between audit committee financial expertise and free cash flow. 3. Methodology Sample: The research sample consists of 50 firms (200 observations) for four consecutive years, from 2005 until 2008. The sample includes non-financial firms which consider the financial statements especially their cash flow statements and income statement and the other data that are related to this research.The sampling method which has been used for this research is simple random sampling.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Data Collection: The data used for this study was hand collected from annual reports retrieved from the official website of Bursa Malaysia. Hand collected data has a number of benefits. The foremost benefit is, since hand collected data source is primary and official, it is also more accurate and higher in quality than secondary data sources (Abbott et al., 2004). This research uses cross-sectional method to collect data. Measurement of variables: We utilize the cross-sectional regression model in order to test if there is any association between audit committee characteristics (audit size, audit independence, audit committee meetings, audit financial expertise) with free cash flow. The research equation is as follows: FCFit = α0it + α1ACSIZEit + α2ACINDEPit + α3ACMEETit + α4ACFIN it + α5LOGTA it + α6ROE it + α7LEVERAGEit + α8LOGDPSit+ ɛit Where: FCF = Free cash flow (profit after tax-changes in capital expenditure +depreciation &amortization-changes in working capital) ACSIZE = total of audit members ACINDEP = proportion of independent audit members ACMEET = number of meeting held by audit committee ACFIN = proportion of financial expertise of audit committee members. ROE =net profit before interest and tax divided by total equity LEVERAGE = total debt divided by total assets LOGTA =logarithm of total assets DPS =dividends per share 4. Result Descriptive Statistics: Table 1 shows the descriptive statistics of sample of the study. The average free cash flow of sample of firms is RM37, 558,053(range fromminimum of RM(9,399,564,224)to maximum of RM9, 352,462,697) for the year of 2005-2008. The mean size of audit committee members (ACSIZE) is about3 revealing that the size of the audit committees is considerably low in Malaysia. The mean percentage of audit committee independence and audit committee meeting is about 73.5% and 4.755, respectively.Similarly,audit committee’s financial expertise percentage is 32.9%. Additionally, the mean for frequency of audit committee meeting is about 5 meetings a year with a maximum of 8 and minimum of once. On the other side, the minimum of total assets (TA) as the first control variable in this study is RM 25,000,000 while its maximum is RM17, 621,224,000. The next one is ROE which indicates changes from the minimum of (1.560) to 2.899 and the mean of 0.153. LEVERAGE, as shown in this table,showsa minimum value of 0.006 and a maximum of 2.450. The last control variable is DPS with a mean of 0.111for the period of 2005 until 2008 among selected firms in Malaysia for 2005-2008. Table1: Descriptive Statistics of Sample Firms (2005-2008) Variable Mean Maximum Minimum Std Dev. FCF 37,558,053 9,352,462,697 (9,399,564,224) 1,296,102,543 ACSIZE 3 8 3 0.77 ACINDEP 0.735 1.000 0.250 0.158 ACMEET 4.755 8.000 1.000 0.964 ACFIN 0.329 0.750 0.00 0.156 TA (RM) 1,608,529,181 17,621,224,000 25,000,000 2,704,604,476 ROE 0.153 2.899 (1.560) 0.460 LEVERAGE 0.479 2.450 0.006 0.359 DPS 0.111 2.650 0.000 0.370 Note: FCF = Free cash flow, ACSIZE = total of audit committee members, ACINDEP = proportion of independent audit members, ACMEET = number of meeting held by audit committee, ACFIN = proportion of financial expertise of audit committee members, ROE = net profit before interest and tax divided by total equity, LEVERAGE = Total debt divided by total assets, TA = Total Assets, LOGDPS =Dividends per share. B. Correlations Matrix of Variables: Table 2 presents the correlations between the variables. According to this table, all the variables have a significant relationship with free cash flow. It shows that there is a considerable association between audit committee meeting and FCF. In addition, based on this table there is a positive correlation between all independent variables with free cash flow except audit committee financial expertise. Likewise, it is reflected for control variables in this study excluding leverage. Lastly,as none of our independent variables demonstrate any correlation value of above 0.7, further tests are applied to investigate the existence of relationship which is applied in the next part. Table 2: Correlation Matrix for Sample Firms (2005 – 2008) LOGFCF

ACSIZE

LOGFCF

1.000

ACSIZE

0.151

1.000

ACINDEP

0.072

(0.176)

ACINDEP

ACMEET

1.000

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ACFIN

LOGTA

ROE

LEVERAGE

LOGDPS

Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) ACMEET

0.200

0.003

0.022

1.000

ACFIN

(0.071)

0.039

0.085

0.030

1.000

LOGTA

0.576

0.050

(0.045)

0.090

0.093

1.000

ROE

0.286

(0.064)

(0.007)

0.035

0.017

0.052

1.000

LEVERAGE

(0.021)

(0.020)

0.103

(0.144)

(0.115)

(0.190)

0.161

1.000

LOGDPS 0.332 0.009 (0.060) (0.050) 0.067 0.244 0.632 0.065 1.000 Note: FCF = Free cash flow, ACSIZE = total of audit committee members, ACINDEP = proportion of independent audit members, ACMEET = number of meeting held by audit committee, ACFIN = proportion of financial expertise of audit committee members, ROE = net profit before interest and tax divided by total equity, LEVERAGE = Total debt divided by total assets, TA = Total Assets, LOGDPS =Dividends per share. C. Multivariate Results: Table 3 represents the regression results of the sample for the year of 2005-2008. The adjusted R2 is 48.1% for Model 1 and 41.9% for Model 2. Model 1 includes independent and control variables, whereas in Model 2 it includes only control variables. The results show that audit committee size (ACSIZE) is positively significant at one percent level. It means that when the ACSIZE is higher the FCF is more and vice versa. The relationship between audit committee’s size and firm financial presentation is supported by the dependence theory (Pearce & Zahra, 1992). Therefore H1in this study is accepted. Table 3: Results of Regression for Sample Firms-FCF (2005-2008), n = 200 MODEL 1 VARIABLES

Coefficient

t-Statistic

MODEL 2

Coefficient

t-Statistic

Constant -1.039 -1.172 .662 .811 ACSIZE .199 2.678*** ACINDEP .789 2.178** ACMEET .178 2.987*** ACFIN -.113 -1.630 LOGTA .750 8.596*** .792 8.647*** ROE .323 2.017** .312 8.647 LEVERAGE .130 .831 .168 1.028 LOGDPS .181 .976 .100 .516 R2 0.511 0.436 Adjusted R2 0.481 0.419 F-statistic 16.874 25.659 Note: FCF= Free cash flow, ACSIZE= total of audit committee members, ACINDEP= proportion of independent audit members, ACMEET= number of meeting held by audit committee, ACFIN=proportion of financial expertise of audit committee members, ROE= net profit before interest and tax divided by total equity, LEVERAGE= Total debt divided by total assets, LOGTA= Total Assets, LOGDPS=Dividends per share. ***, **, *Statistically significant at the 1%, 5%, and 10% respectively The results indicate that the audit committee independence variable (ACINDEP) is also positively significant at 5 percent level. It illustrate that when the percentage of independence of audit committee is higher the amount of free cash flow also become higher. Therefore H2 is accepted. Prior studied stated that independent audit committee members considered efficient(Abbott et al., 2000; Hussain & Mallin, 2003). The audit members who are efficient assess theinternal auditing plans to protect shareholder’s interests (DeZoort and Salterio (2001). Accordingly, the independent audit committee members would ensure better financial management of companies which also include the management of free cash flow. The results show that variable ACMEET has shown positive relationship with FCF and it is significant at one percent level. Therefore, H3 is also accepted meaning that the frequency of audit committee meetings effect on amount of FCF. It means that more audit committee meeting leads to more amount of free cash flow. Audit committee must prepare its members with sufficient time with the aim of performing their tasks of controlling their company’s financial reporting procedure. ConsequentlyBRC (1999)recommended that audit committee members meet a minimum four times (quarterly) during a year and discuss about financial reporting quality and accounting issues and control related matters with outside members and directors. Frequent meeting can lead to better monitoring of firm’s financial reporting process and therefore making better decision on firm’s long-term planning. The regularity of the meeting should also depend on the nature of tasks and activities as to ensure that the audit committee achieves their goals and purposes. Therefore, having more meetings can improve the internal governance procedures and also the firm’s free cash flow. Consequently, the amount of free cash flow can be directly related with audit committee meetings. The last variable, financial literacy of audit committee members (ACFIN) show a non-significant relationship with FCF. Although, it is in positive coefficient sign but, there is no significant relationship with these two variables. Therefore H4 cannot be accepted.TheSEC (1999) requires that each audit committee consists of a minimum one member who is considered as financial experts. Our result is not consistent with DeZoort and Salterio (2001) that state an audit committee which has financial expertise lead to discovering the objects which are related to audit committee communication with management. The other variables in the regression model arecontrol variables which are tested against FCF. The size (LOGTA) and profitability (ROE)arestatistically significant with positive relationship whereas LEVERAGE and LOGDPS both are insignificant. Also, there are in opposite sign of coefficient which means that they are in

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) positive and negative relationship with FCF, respectively. As shown in the Table 3 LEVERAGE is in positive sign while LOGDPS is in negative sign with free cash flow in this study. 5. Conclusion This study examines the association between audit committee characteristicswith free cash flow.Audit committees members are to maintain integrity of their monitoring function. Data of this study was collected at a single point of time (cross-sectional) to measure the relationship between dependent variable and independent variables in 2005 - 2008. The results shows that size of audit committee, frequency of audit committee meeting, proportion of audit committee independence are positively associate with level of free cash flow (FCF). When the size of the audit committee is big, it means there are more skills and knowledge sharing which can be utilized to monitor the financial reporting and procedure. The positive relationship between frequency of meeting with free cash flow can be interpreted that having more meetings could lead to having morediscussion and decision that contribute to keeping more free cash flow than spending it on the managers’ interests. When audit committees are diligent in carrying out the audit duties they have would keep more free cash flow in a firm. The results also show a significant positive relationship between audit committee independent with free cash flow. An audit committee member who is independent is considered as efficient ((Kannan Raghunandan et al. (2001)) especially in solving conflicts between managers and shareholders. Future studies could examine a larger sample of companies in Malaysia to strengthen the conclusions of our study. Also, this study focus the firms in Malaysia to collect and analyze the data, however, the effect corporate governance and internal governance may be different from a broader view by including wider geographical area for the future studies. The results of study highlight the importance of corporate governance mechanism, in the form of audit committee characteristics, in the management of cash flow. Refrences Abbott, L. J., Park, Y. & Parker, S. (2000). The effects of audit committee activity and independence on corporate fraud. Managerial Finance, 26(11), 55-68. Abbott, L. J., Parker, S. & Peters, G. F. (2004). Audit committee characteristics and restatements. Auditing: A Journal of Practice & Theory, 23(1), 69-87. Abdul Hamid, M. A. & Mohamed, S. A. N. A. M. (1999). Effectiveness of audit committee:some evidence. Akauntan Nasional, 12(1), 5-10. BRC. (1999). Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees (BRC). (1999) Report and Recommendations of Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees, New York and Washington, DC: NYSE and NASD. Carcello, J. V. & Neal, T. L. (2000). Audit committee composition and auditor reporting. The Accounting Review, 75(4), 453-467. Dalton, D. R., Daily, C. M., Johnson, J. L. & Ellstrand, A. E. (1999). Number of directors and financial performance: A meta-analysis. Academy of Management Journal, 42(6), 674-686. DeZoort, F. T. & Salterio, S. E. (2001). The effects of corporate governance experience and financial-reporting and audit knowledge on audit committee members' judgments. Auditing: A Journal of Practice & Theory, 20(2), 31-47. Dorff, M. B. (2006). The Group Dynamics Theory of Executive Compensation. Bepress Legal Series, 1694. Eichenseher, J. W. & Shields, D. (1985). Corporate director liability and monitoring preferences. Journal of Accounting and Public Policy, 4(1), 13-31. Eisenberg, T., Sundgren, S. & Wells, M. T. (1998). Larger board size and decreasing firm value in small firms. Journal of financial economics, 48(1), 35-54. Fama, E. F. & Jensen, M. C. (1983). Separation of ownership and control. Journal of law and economics, 26(2), 301-325. FCCG. (1999). Finance committee on corporate governance. report on corporate governance,malaysia. Hussain, S. H. & Mallin, C. (2003). The dynamics of corporate governance in Bahrain: structure, responsibilities and operation of corporate boards. Corporate governance: an international review, 11(3), 249-261. Jensen, M. C. (1986). Agency costs of free cash flow, corporate finance, and takeovers. The American Economic Review, 76(2), 323-329. Menon, K. & Deahl Williams, J. (1994). The use of audit committees for monitoring. Journal of Accounting and Public Policy, 13(2), 121139. Opler, T., Pinkowitz, L., Stulz, R. & Williamson, R. (1999). The determinants and implications of corporate cash holdings. Journal of financial economics, 52(1), 3-46. Pearce, J. A. & Zahra, S. A. (1992). Board composition from a strategic contingency perspective. Journal of management studies, 29(4), 411-438. Pierce, J. & Zahra, S. (1992). Board composition from a strategic contingency perspective. Management Studies, 29, 411-438. Pincus, K., Rusbarsky, M. & Wong, J. (1990). Voluntary formation of corporate audit committees among NASDAQ firms. Journal of Accounting and Public Policy, 8(4), 239-265. Raghunandan, K. & Rama, D. V. (2007). Determinants of audit committee diligence. Accounting Horizons, 21(3), 265-279. Raghunandan, K., Rama, D. V. & Read, W. J. (2001). Audit committee composition,“gray directors,” and interaction with internal auditing. Accounting Horizons, 15(2), 105-118. Rahman, R. A. & Ali, F. H. M. (2006). Board, audit committee, culture and earnings management: Malaysian evidence. Managerial Auditing Journal, 21(7), 783-804. Vinten, G. A. L. C. (1993). Audit committee and corporate control. Managerial Auditing Journal of Accountancy, 8(3), 113-142 Yermack, D. (1996). Higher market valuation of companies with a small board of directors. Journal of financial economics, 40(2), 185-211. Zhang, Y., Zhou, J. & Zhou, N. (2007). Audit committee quality, auditor independence, and internal control weaknesses. Journal of Accounting and Public Policy, 26(3), 300-327.

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The Influence of Techno Stress and Organizational-is Related Support on User Satisfaction in Government Organizations: A Proposed Model and Literature Review *Hadziroh

Ibrahim1, Yusliza Mohd Yusoff2 Universiti Utara Malaysia, Malaysia Universiti Sains Malaysia, Malaysia *[email protected]

Abstract: Empirical evidence on the issue of satisfaction towards certain computer applications or systems has guided organizations in the implementation process of information systems (IS). What is more important, findings of the previous studies in the IS field have proved that user satisfaction is one dimension of IS success and needs to be carefully managed during the implementation process. Consequently, organizations are increasingly concerned about ensuring that employees have gained satisfaction about the IS that they use. Organizations also need to investigate user opinions about the system, and where its faults lie. Though there are a great number of studies on IS, little attention has been given to the influence of technostress and organizational IS-related support on IS success in government organizations of Malaysia. This paper contributes to the IS Malaysian literature pertaining to EHRM. Based on the review of literature on EHRM, user satisfaction, technostress, and organizational IS-related support, a model is presented as are two main hypotheses that will be tested in the future. The results of the research will provide useful insights in the EHRM area, particularly to the HRMIS implementation in government organizations of Malaysia. Keywords: EHRM, technostress, IS-support, user satisfaction, HRMIS, Malaysia 1. Introduction The application of electronic human resource management (EHRM) has been growing, and this trend is expected to continue in the near future. The use of EHRM in organizations is to ensure smooth operation of HRM practices, strategies and policies. Many studies have proven that EHRM provides benefits to HR functions, employees and organizations as a whole. For instance, EHRM can reduce human resource transaction costs by up to 75% and regain costs associated with the technology in less than two years (Bell, Lee, & Yeung, 2006). In addition, Noe, Hollenbeck, Gerhart and Wright (2008, p. 47), highlighted the implications of EHRM for HRM practices as these: employees in geographically dispersed locations can work together in virtual teams using video, e-mail, and the Internet (analysis and design of work); job openings can be posted online; candidates can apply for jobs online (recruiting); online learning can bring training to employees anywhere, anytime (training); online simulations, including tests, videos, and e-mail, can measure job candidates’ ability to deal with real-life business challenges (selection); and employees can review salary and bonus information and seek information about and enrol in benefit plans (compensation and benefits). Moreover, EHRM facilitates better management of the all-important competitive edge, especially for the activities of thinking, idea generating, and customer-serving human resources (Shilpa & Gopal, 2011). Nowadays, organizations are increasingly concerned about ensuring that employees are satisfied with the IS that they use, as satisfaction is considered to be surrogate for IS success (Baroudi, Olson, & Ives, 1986; Gudigantala, Song, & Jones, 2011; Igbaria & Nachman, 1990; Ives, Olson, & Baroudi, 1983; Sabherwal, Teyaraj, & Chowa, 2006). Without employees’ satisfaction, smoothly running an organization is not possible (Gupta & Saxen, 2011). To improve satisfaction, organizations must investigate the opinion of the users about the system, and where its faults lie. To date, few attempts have been made to capture the overall user evaluation for IS, along with the antecedent factors that form satisfaction (i.e., Aggelidis & Chatzoglou, 2012; Bhattacherjee, 2001; Dastgir & Mortezaie, 2012; DeLone & McLean, 1992; Gudigantala et al., 2011; Larsen, 2009; McKinney, Yoon, & Zahedi, 2002; Nadkarni & Gupta, 2007; Oliver & Richard, 1980; Tarafdar, Tu, & Ragu-Nathan, 2011; Venkatesh, Morris, Davis, & Davis, 2003). Much more effort must be made, especially by the practitioners, scholars and researchers, to probe the issue of system success, particularly user satisfaction in EHRM. As a starting point, this research adapted a model developed by Tarafdar, Tu, Ragu-Nathan, and Ragu-Nathan (2011) that examined the influence of stress conditions and organizational mechanisms on job outcomes. The model is based on the Transaction Theory of Stress by Lazarus (as cited by Tarafdar, et al., 2011). HRMIS in Malaysia and Issues: In Malaysian government organizations, EHRM is known as the human resource management information system (HRMIS). HRMIS is one of the seven flagship efforts under the umbrella of electronic government (EG) projects. It is an effort to provide public servants with an integrated system for human resource information management. Furthermore, the HRMIS project is implemented in tandem with the government’s vision for using information and communication technology (ICT) to transform the operations of human resource processes and subsequently propel the country into the era of the knowledge worker and the knowledge-based economy (Eia, 2004, p. 6). Phase 1 of the project was scheduled to begin on 12 April 1999 and be completed on 30 September 2004. To date, the application of HRMIS remains in the rollout process for most government agencies with the value-added enhancements from time to time. However, due to the unfavourable responses of users towards the systems, HRMIS2 an upgraded and improved version of HRMIS, has been introduced. Based on a survey conducted on HRMIS2, more than 50 percent of the HRMIS2 users remain unsatisfied with the system. Are there any unforeseen factors that have contributed to the situation? As mentioned by Aladwani (2003) Au, Ngai, and Cheng (2002), and Guimaraes and Igbaria (1997), system factors, user’s situational factors (or behavioural factors), and social factors or organizational factors have significant impacts on user satisfaction. Furthermore, Au and Ngai (2008) mentioned that several studies claimed that most systems fail to fulfil their articulated objectives and outcomes, not because they do not have technical requirements, but because psychological and organizational issues were not well tackled during the development and implementation stages. Furthermore, several studies have investigated HRMIS from various contexts and issues (MAMPU, 2011; McPherson & Ramli, 2004; Mohd Azman, 2011; Noraswati, 2011; Norshita, Halimah, & Tengku Mohammad, 2010). A few of them tried to investigate the issue of satisfaction among users towards HRMIS. However, no study reported on the influence of technostress and organizational IS-related support on user satisfaction towards HRMIS in government organizations.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Research Objective: Therefore, the main objective of the study is to examine the influence of technostress and organizational IS-related support on user satisfaction towards HRMIS in the public sector. The contributions of the study include a theoretical contribution to IS success literature, a contribution to the field of EHRM or HRIS, and a contribution about the influence of technostress and organizational support factors on user satisfaction. The outcome of the research could be used to assist in the implementation of EHRM in organizations, particularly HRMIS in government organizations. A research model is proposed using factors identified from the literature review. 2. Literature Review Electronic Human Resource Management (EHRM): EHRM is often used interchangeably with human resource information system (HRIS), human resource management system (HRMS), and virtual human resource (HR). Ruel, Bondarouk and Looise (2004) define EHRM as a way of implementing HRM strategies, policies, and practices in organizations through the conscious and directed support of and with the full use of web technology based channels. Moreover, the technology is also referred to as an application of IT for both networking and supporting at least two individual or collective actors in their shared performing of HRM activities (Strohmeir, 2007). In addition, EHRM is referred to as the administrative support of the human resource function in organizations by using Internet technology (Voermans & Veldhoven, 2007). Bondarouk and Ruel (2009) claimed that E-HRM researchers have not standardized a definition of E-HRM. They put forward a new E-HRM definition, which represents a consensus-based understanding of E-HRM. They defined E-HRM as ‘an umbrella term covering all possible integration mechanisms and contents between HRM and technologies aiming at creating value within and across organizations for targeted employees and management’ (p. 507). The definition of EHRM by Bondarouk and Ruel (2009) will be adopted for the purpose of the study. Several studies have contributed to the knowledge about the effects of E-HRM on various areas. To name a few, E-HRM towards HRM effectiveness (Bondarouk & Ruel, 2005, 2009; Ruel, Bondarouk, & Velde, 2007; Sanayei & Mirzaei, 2008); attitude towards using E-HRM (Voermans & Veldhoven, 2007; Yusliza & Ramayah, 2011; Yusliza, Ramayah, & Haslindar, 2011); employee satisfaction towards EHRM (Gupta & Saxena, 2011); impact of EHRM on professional competence in HRM (Bell et al., 2006); and adoption of EHRM (Olivas-Lujan, Ramirez, & Zapata-Cantu, 2007; Strohmeier & Kabst, 2009). User Satisfaction: There have been several definitions offered for satisfaction. Bailey and Pearson (1983) and Wixom and Todd (2005) define satisfaction in a given situation as the sum of one’s feeling and attitudes toward a variety of factors affecting the situation. More precisely, Oliver (1993) summarized the definition of satisfaction as the individual’s emotional state following a certain experience. In the IS context, satisfaction is referred to as the recipient’s reaction to the use of the output of an IS (Irani et al., 2012). In addition, enduser satisfaction is referred to as the IS end-user’s overall affective and cognitive evaluation of the pleasurable level of consumptionrelated fulfillment experienced with the IS (Aggelidis & Chatzoglou, 2012). In the present study, user satisfaction refers to the affective attitude towards a specific computer application by someone who interacts with the application directly (Doll & Torkzadeh, 1988) by combining two roles: primary and secondary user roles. The measures of user satisfaction have appeared in much IS research. The studies represent a variety of measures and settings. What is more important, various factors have been identified to have an impact on end-user satisfaction. Notably, the role for user satisfaction has been tested as a dependent variable (Aggelidis & Chatzoglou, 2012; Au et al., 2002; Dastgir & Mortezaie, 2012; Gudigantala et al., 2011; Karimi, Somers, & Gupta, 2004; Larsen, 2009; Nadkarni & Gupta, 2007; Oliver & Richard, 1980); an independent variable (Cho, Cheng, & Hung, 2009); and as a mediator to other variables (Bhattacherjee, 2001; McGill & Klobas, 2008; Schaupp, 2010; Wixom & Todd, 2005). To date, only a few studies have investigated the relationships between technostress, organizational IS-related support and user satisfaction, particularly in EHRM field (i.e., Tarafdar, et al., 2011). However, the study was conducted in United States among 233 end users of information communication of technology (ICT), and most of them worked at operational levels in middle-management positions in public sector. The findings of the study indicated that factors creating technostress reduced the satisfaction of individuals with ICT. On the other hand, organizational IS-related support was reported to have increased the level of user satisfaction towards ICT. In Malaysia, a few studies have investigated satisfaction among users towards EHRM (MAMPU, 2011; McPherson & Ramli, 2004; Mohd Azman, 2011; Noraswati, 2011). However, these studies examined users’ satisfaction from different contexts. More efforts are needed, especially from the academics and practitioners, to probe deeply into the issue of EHRM. Technostress: Technostress is an any negative effect on human attitudes, thoughts, behavior, and psychology that directly or indirectly results from the use of computer-based ICTs (Tu et al., 2005). Wang et al. (2008) noted that Craig Brod defined the term technostress as “a modern disease of adaptation caused by an inability to cope with the new computer technologies in a healthy manner”. Then, Weil and Rosen expanded and presented a new definition of technostress as “any negative impact on attitudes, thoughts, behaviors or psychology caused directly or indirectly by technology”. Wang et al. (2008) summarized and noted that technostress was a “reflection of one’s discomposure, fear, tenseness and anxiety when one is learning and using computer technology directly or indirectly, that ultimately ends in psychological and emotional repulsion and prevents one from further learning or using computer technology”. Tarafdar et al. (2007) said that there were five conditions that end users deal with as a result of their using the technology. These conditions were identified as stressors associated with the use of technology, namely, techno-overload, techno-invasion, techno-complexity, technoinsecurity, and techno-uncertainty. Techno-overload refers to situations in which managers tend to communicate more information than is necessary and receive more information than they can effectively process and use effectively. Due to techno-invasions, users feel that they are never free of technology. They think that they are always under supervision and their lives have been invaded. With regard to techno-complexity, users have to spend more time learning how to use ICT. Sometimes they feel that the variety of applications and functions are intimidating and do not understand how and why they need to use these applications and their functions. Due to technouncertainty, systems are always in upgrading and maintaining processes that require users to learn regularly how to work with the new applications. These constant changes will make users unsatisfied with the systems. Techno-insecurity refers to situations in which users feel threatened about losing their jobs either to other people who have better knowledge and skills of the technology or to automation impacts from new technology. Furthermore, existing studies have validated, investigated and interpreted the phenomenon of technostress in various fields (Ayyagari et al., 2011; Bradshaw & Zelano, 2013; Lee et al., 2012; Ragu-Nathan, et al., 2008; Raja Zirwatul Aida, Azlina, & Siti Balqis, 2007; Salanova et al., 2012; Sami, 2006; Shepherd, 2004; Tarafdar, et al., 2011; Tarafdar et al., 2007; Tarafdar, et al., 2011; Tu et al., 2005; Ungku Norulkamar et al., 2009; Wang & Shu, 2008; Wang et al., 2008). However, relatively few studies in

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) information system (IS) literature provide evidence on the influence of technostress on user satisfaction towards certain computer systems applications. Organizational IS-related Support: In the present study, organizational IS-related support consists of literacy facilitation, technical support provision, technology involvement, and innovation support. Tarafdar, et al. (2011, pp. 118-119) have referred to these four organizational IS-related supports as inhibiting mechanisms of technostress which, at the same time, increase satisfaction towards IS. Literacy facilitation refers to the “mechanisms that educate through sharing of IS-related knowledge”. Training and documentation are two examples that can be used by an organization to increase IS related awareness. The technical support provision is defined as the “assistance and technical support provided to professionals in the context of their use of IS”. For instance, a quick-response and effective help desk can help users in using and becoming familiar with the system. Technology involvement facilitation describes “mechanisms that keep professionals involved in information system adoption and development”. The involvement of users in the planning and implementing processes will help them to be familiar with a new system and reduce the techno-complexity, enhancing satisfaction. Innovation support describes “mechanisms that encourage professionals to experiment and learn”. This mechanism requires management to take several actions such as, promoting supportive relationships among employees, facilitating communication and discussion, encouraging new ideas and providing incentives for learning. All the actions might help users to be more innovative and explorative in using the IS. Various studies have examined the effect of organizational support related to IS on user satisfaction and implementation of IS (Doll, 1985; Dong et al., 2009; Hartwick & Barki, 1994; Jarvenpaa & Ives, 1991; Lee et al., 2009; Mahmood et al., 2000; Mark et al., 2012; Ragu-Nathan, et al., 2008; Rouibah et al., 2009; Sabherwal, et al., 2006; Sanchez-Franco, 2009; Tarafdar, et al., 2011; Thong et al., 1996). The Proposed Research Framework and Hypotheses: The research framework of the present study is adapted from the work of Tarafdar, et al. (2011), as show in Figure 1 below. Figure 1 depicts that technostress and organizational IS-related support influence user satisfaction towards HRMIS. Figure 1: Proposed research framework     

Techno-Overload Techno-Invasion Techno-Complexity Techno-Insecurity Techno-Uncertainty

 

Literacy support Technical support provision Technology involvement facilitation Innovation support

 

Technostress User Satisfaction towards HRMIS Organizational ISrelated support

Previous studies have mentioned that technology is one factor that causes stress in the work place (Cooper, Dewe, & O'Driscoll, 2001). The continuous changes and advancement of ICTs in the workplace have brought a new phenomenon known as technostress (RaguNathan et al., 2008). According to Ragu-Nathan et al., technostress exists when an individual experiences problems with adaptation of ICTs and is unable to cope with or get used to the technologies in a healthy manner. The components of technostress consist of technooverload, techno-invasion, techno-complexity, techno-insecurity and techno-uncertainty (Ragu-Nathan, et al., 2008). Based on the five conditions of technostress, managers tend to communicate more information than is necessary and receive more information than they can process and use effectively. As a result, they are unable to identify that which is actually useful information. Thus, this situation leads them to dissatisfaction with the content and outputs of the systems they use. This situation is referred to techno-overload. Technoinvasions mean that users feel that they are never free of technology, and they think that they are always under supervision and their lives has been invaded. They feel the blurring of boundaries between the home and the workplace, making them unsatisfied with the applications they are using. With regard to techno-complexity, users have to spend more time learning how to use ICT. Sometimes they feel that the variety of applications and functions are intimidating and do not understand how and why they need to use it. Furthermore, if the system is still unstable and the technical support is not always available when needed, users feel that systems are not friendly, timely, or accurate. As a result, dissatisfaction and frustration will exist. Due to techno-uncertainty, systems are always in upgrading and maintaining processes that require users to learn regularly how to work with new applications. These constant changes make users unsatisfied with the systems. Finally, users can feel threatened about losing their jobs, due to inability to adapt with the work processes relating to new ICT. Thus, users have negative assessments about system user-friendliness and adequacy of computer knowledge, leading to dissatisfaction with the system used. The findings of the study by Ragu-Nathan, et al (2008) indicated that factors that creating technostress reduce the satisfaction of individuals with the ICT. In other words, significant relationships exist between both variables. Several studies have confirmed that these situations have brought a significant negative impact on work outcomes such as job satisfaction, organizational commitment, innovation, productivity, and performance (Lee et al., 2012; Sami, 2006; Tarafdar, et al., 2011; Tarafdar et al., 2007; Tu et al., 2005; Ungku Norulkamar et al., 2009; Wang et al., 2008). In fact, a few studies have identified a negative effect on end-user satisfaction (Tarafdar, Tu, & Ragu-Nathan, 2011; Tarafdar, Tu, Ragu-Nathan, et al., 2011). Many of the previous studies have reported a positive relationship between organizational support and user satisfaction. However, a few studies have presented inconsistency evidence to support the relationship between the variables (Dong et al., 2009; Hwang & Schmidt, 2011; Mark et al., 2012). Therefore, further investigation should be conducted to confirm the relationship between organizational support and user

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) satisfaction. Moreover, a study conducted by Ragu-Nathan et al. (2008) has developed and validated a new instrument and terms of organizational support or inhibiting mechanisms, namely, literacy support, technical support provision, technology involvement facilitation and innovation support. They suggest that future studies should further investigate the instrument on a larger scale. The effect of technostress and organizational IS-related support in an individual’s satisfaction is an issue that has so far not been addressed adequately. Therefore, a continuous effort should be taken to identify the effects of technostress and organizational IS-related support at the workplace. Based on the above discussions, the following hypotheses are thus proposed in this study. H1: H2:

Technostress (techno-overload, techno-invasion, techno-complexity, techno-uncertainty, techno-unsecurity) is negatively related to user satisfaction. Organizational IS-related support (literacy support, technical support provision, technology involvement facilitation and innovation support) is positively related to user satisfaction.

3. Conclusion In this paper, we present an overview of EHRM, technostress, organizational IS-related support, and user satisfaction. In addition, a compilation of previous studies about related variables in this study are also presented. Based on the arguments, two main hypotheses have been proposed to be related with user satisfaction. The results from the present’s research model will provide useful insights in the EHRM area. The findings also can be used as a guide in understanding the phenomenon of technostress and organizational IS-related support, particularly in the EHRM implementation in government organizations of Malaysia. Acknowledgement: This paper is a part of larger research of EHRM and funded by a Short-Term Research Grant (304/PPAMC) from Universiti Sains Malaysia, Penang, Malaysia. References Aggelidis, V. P. & Chatzoglou, P. D. (2012). Hospital information systems: Measuring end user computing satisfaction (EUCS). 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The Role of Work Happiness, Job Attitude and Turnover Intention *Yaowalak

Trakulmaykee, Yusliza Mohd-Yusoff Universiti Sains Malaysia, Malaysia *[email protected]

Abstract: Turnover intentions can be reduced if the employees satisfy their job, through improving of work happiness. Employees’ work happiness must be fulfilled, to get their best performance. This study is to provide a theoretically model of work happiness, job attitude, and turnover intention. The result of this study will contribute to the guide lines for the policy makers for implementation of better human resource policy and provide evidence in favor of managerial interventions aimed at enhancing employee’s work happiness. Implication of this study could help management understand how to reduce the turnover intentions based on the employee’s work happiness. From the review of previous literatures a relationship among these variables are shown that can be empirically tested in future study. Keywords: Work happiness, Job Attitude, Turnover intention 1. Introduction Nowadays, effective management of organizational resources is an important factor for the success of any organizations (Davoudi & Fartash, 2013). Human Resources can be named as the most important organizational resource for the success of any organizations (Davoudi, Cherati, & Kaur, 2012). Therefore, managers of organization should pay attention to factors contribute to better performance of personnel leads to better performance of organizations (Rashvand, 2013). In the business world, managing organizational resources is an important issue in the success of an organization. Further, Nadiri and Tanova (2010) have stated that human resources play a central role and demand special attention. Human resources are known as the major differentiating success factor for most organizations especially for the industry. Hence, the challenge facing most organizations today is to recruit, retain, manage, and satisfy their human resources who affect the competitiveness of organizations (Davoudi, Fartash, Allahyari, & Yarahmadi, 2013). However, the question of employee turnover has come to gain greater attention especially in the last few decades because of its dependency on the human factor (Chang, Wang, & Huang, 2013). Also, Davoudi et al. (2013) have indicated that an international perspective on a turnover crisis begins. The previous researchers have suggested that employee happiness will increase profitability and reduced turnover (Robertson & Cooper, 2011; Samad, 2006). In addition, Amin and Akbar (2013) have supported that employees who have fulfilled their happiness in the workplace are more productive, contributing to the organization's goals, and low of intentions to leave. Hence, this study will interest and focus on the correlation of work happiness and job attitude and turnover intentions. 2. Literature Review Turnover and Turnover Intention: Turnover is defined as the individual movement across the membership boundary of an organization (Price, 2001). Turnover is also the rate at which employees quit their jobs. High employee turnover harmfully affects the organization. Cost of high employee’s turnover is considerable as it includes not only direct financial cost of replacing staff but also other effects like potential loss of key skills, knowledge and experience and the negative effects on workforce morale (Robbins & Coulter, 2005) (as cited in Johan, Talib, Joseph, & Mooketsag, 2013). In order to reduce turnover, the prior researcher focused on voluntary turnover. There are several reasons but voluntary turnover is the most important. It is more subject to control by organizations (Price, 1977). Voluntary turnover is the termination of the official and the psychological contract between the employee and the organization (Krausz, 2002). Voluntary turnover of employees is costly to an organization because of the time and money invested in those employees and the time and money that would have to be invested to replace those who leave (Johan et al., 2013). Concerning, turnover intention is the crucial stage before the actual turnover occurs. According to Bigliardi, Petroni, and Dormio (2005 ), labor with the intention to quit from their current job occur after individuals start thinking about staying or to leave; even though in the short term, employees could have high intentions to quit (Mowday, Steers, & Porter, 1979). Turnover intention is defined as the last in a sequence of withdrawal cognitions, a set to which thinking of quitting and intent to search for alternative employment also belong (Dimitrious, 2012). Turnover intention may be defined as the individual’s intention to voluntary quit the organization or profession (Jha, 2010). Determinants of Turnover Intention: There are many studies of the determinants of turnover intentions. The psychology literature has focused on absenteeism; lateness and tardiness are predictors of turnover intention (Benson & Pond, 1987; Miller, 1981; Rosse, 1988). Price (2001) supported the notion of the factors that influence the employee’s turnover intention including 1) environmental factor 2) individual factor 3) structural factor. According to Price (2001) and Morrell, Loan‐Clarke, and Wilkinson (2001), the determinants causing turnover intention are categorized into three different groups; psychological, economic and demographical. Fang (2001) and Honda-Howard and Homma (2001) and Poon (2004) have focused on the role of one or more antecedents to turnover such as job satisfaction, occupational stress, organizational commitment, perceptions of organizational fairness, perceptions of performance appraisal politics and workload. In addition, Easterlin (1974) has attempted to explain that the different happiness level points to turnover intention (Clark, Frijters, & Shields, 2008). Other practitioners, MacIntosh and Doherty (2010) and Martin (2011) and Robinson and Beesley (2010), argued that the intention to quit begins when the employee has received an unfavorable situation and starts thinking about another job. Besides, poor management, low wages, bad working environment, and paucity of job opportunities could be the highest causes of turnover (Kusluvan, Kusluvan, Ilhan, & Buyruk, 2010). Moreover, Kuria, Alice, and Wanderi (2012) explored the work umbrage, unfavorable working conditions, stress, long working hours with minimal wages, and poor training programs are the causes of employee turnover in Kenyan hotels located in Nairobi (AlBattat & Som, 2013).

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Job Attitude: Attitudes are propensities, or tendencies, to react in a favorable or unfavorable way toward an object (Noah & Steve, 2012). Noah and Steve (2012) argued that employee attitudes can provide important information about the effectiveness of different management strategies. Job related attitudes play a major role in shaping the work behaviors of managers in organizations. Job attitudes are evaluations of one’s job that express one’s feelings toward, beliefs about, and attachment to one’s job. This definition encompasses both the cognitive and affective components of these evaluations while recognizing that these cognitive and affective aspects need not be in exact correspondence with one another (Schleicher, Watt, & Greguras, 2004). Constructs of Job Attitude: Robbins and Coulter (2005), attitudes have three components. The cognitive component is the beliefs an individual holds. The emotional or feeling part of an attitude is the affective component, and the behavioral aspect is the intention component (Noah & Steve, 2012). Lynn, Newton, and Thornton (1990) described the differential relationship that organizational attitudes and job attitudes have with several behavior intentions (turnover, absenteeism and performance). The scope of job attitudes covers many items, namely, the types of work attitudes are widely. There are studies demonstrate the job attitudes include many elements; job satisfaction and organizational committee belong to them. In addition, organizational committee covers individual’s loyalty (Chiang & Birtch, 2010; Luthans, Zhu, & Avolio, 2006). Bal, De Lange, Jansen and Van Der Velde’s (2008) study used job satisfaction to represent job attitude. Further, Jayan and Balachandran (2004) considered three domains of Job attitude covering that included intrinsic attributes of the job as well as extrinsic attributes such as job involvement, job commitment and job satisfaction (Chang, Tsai, & Tsai, 2011). Determinants of Job Attitude: To increase organizational benefits by improving work attitudes, the factors that influence work attitudes need to be identified. The psychosocial stressors were found to be dominant predictors of job attitudes (Saari & Judge, 2004). According to Carpenter, Bauer, and Erdogan (2009), there are some element which influencing the job attitude, namely personality, person-environment fit, job characteristics, psychological contract, organizational justice, work relationship, and stress. Happiness: Dehaghi (2012) determined happiness is the effectiveness of happiness education on reducing blood pressure and increasing happiness in patients suffering from high blood pressure. Happiness as the pleasant moods and emotions experienced (positive affect) to general evaluations of life (Diener & Ryan, 2006). Happiness means a state that Thai people have quality of life and balance of living between mental, physical and intelligence and be in consistent with economic, social and environmental factors as a holistic model in order to live peacefully between human and human, as well as balance between human and environment (Barameechai, 2007). Importance of Happiness: Happiness acts as a causal mechanism that brings about many positive states within the workplace and is at the heart of positive organizational psychology (Dehaghi, 2012). Further, happy people are healthier, more successful, and more socially engaged which is fundamental to the good life (Lyubomirsky, King, & Diener, 2005). In addition, happiness in the workplace lead to several positive organizational outcome (Fisher, 2010). Gavin and Mason (2004) believe that happiness and positive states of people at work contribute to increased organizational success and commitment (Dehaghi, 2012). Conceptual of Happiness: There are two traditional perceptions of happiness in the literature. These are the hedonic view and the eudaimonic view (Ryan, Huta, & Deci, 2008). Hedonism tries to maximize pleasure and minimize pain. The pursuit of pleasure is the way to achieve happiness (Field & Buitendach, 2011). In the eudaimonic sees achieving happiness as a process rather than as a state. Eudaimonia refers to a lifestyle and a way of living. Ryan et al. (2008) argue that hedonic thinking leads to short term happiness, whereas eudaimonic living leads to a more enduring and lasting happiness. Both of these approaches offer a route to happiness (Field & Buitendach, 2011). In Thailand, happiness means a state that Thai people have quality of life and balance of living between mental, physical and intelligence and be in consistent with economic, social and environmental factors as a holistic model in order to live peacefully between human and human, as well as balance between human and environment (Barameechai, 2007). The Tenth National Economic and Social Development Plan (2007- 2011) has pointed that in Thai society happiness’ notion is based on the His Majesty King Bhumibol’s Sufficiency Economy Philosophy. His Majesty accentuated that sufficient word is important. If people are satisfied with living at a sufficient level which is reasonable for their status, they will then learn the true meaning of happiness (Pariyawong, Wongchaya, & Kohkaeng, 2007). The vision of the Philosophy of Sufficiency Economy is basically a means to achieve happiness. From this basis, Sufficiency Economy provides an approach for happiness development by improving human mind. Therefore, it takes broader, long-term perspectives and sustainability of all beings (Indaratna, 2007). Happiness at Work: Happiness at work is a feeling of an individual or community. It arises from work, when all the imaginable aspects find their places in a right order (Suojanen, 2012). Fisher (2010) refers to pleasant judgments (positive attitudes) or pleasant experiences (positive feelings, moods, emotions, flow states) at work. Previous Studies Related to Happiness: The research conducted by Bahrami and Mokhtari (2004), involving a survey of students of Isfahan University, illustrates a significant converse relationship between the amount of happiness and perfectionism (Dehaghi, 2012). Dehaghi’s (2012) study aimed to determine the effective factors in organizational commitment and the relationship between happiness and organizational commitment among managers of District Four of Islamic Azad University in Iran. Happiness measurement is determined by Joseph Welvisi's happiness questionnaire (1998). In addition, Suojanen (2012) defined happiness at work and explained how it can be measured and what kind of results achieved among people in Finland and Italy. The correlation between education and happiness is discussed and examined. Albano’s (2009) study has defined and assessed workplace happiness by developing the Workplace Happiness Index (WHI), a new measure of the worker-work relationship. Workplace happiness is measured with six dimensions. That is meaning, autonomy, behavioral norms, feedback, supportive relations, and personal growth. Dibaeeian and Karami (2007) studied the relationship between happiness and the search for meaning among 204 students, of Alameh Tabatabaee University. They used the Oxford Happiness Questionnaire (OHI). The result is a significant relationship between happiness and the search for meaning. Furthermore, Atashpour (2007) studied the lifestyle, mental health, and happiness of high school female instructors and

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) household women. The finding showed a significant relationship between depression and happiness. As mentioned earlier, a major of previous research focused on happiness in Western context. There is little attention given to research on both 1) the relationship between work happiness and job attitude, 2) the relationship between work happiness and turnover intentions. Hence, the present study attempts to propose a framework on the mentioned topic. Development of Propositions Happiness at work and turnover intention: Fisher and Hanna (1932) devoted an entire chapter to the role of happiness on employee withdrawal. They proposed that as much as 90% of employee turnover and 50% of absenteeism were due to issues surrounding employee happiness. In addition, Eberle (1919) and Frost (1920) and Snow (1923) argued that employee happiness is predictor of employee withdrawal decisions (Wright & Bonet, 2007). Happiness at work and job attitude: Fisher (2010) studied happiness at work and reviewed what is known about the definition, causes, and consequences of happiness at work, drawing also on insights from the expanding positive psychology literature on happiness in general. Happiness at work includes job satisfaction, while a comprehensive measure of individual-level happiness might include work engagement, job satisfaction, and organizational commitment. Recently, Rego, Ribeiro, Cunha, and Jesuino (2011) found that perceptions of organizational virtuousness predict affective commitment both directly and through the mediating role of predicting affective wellbeing. Moreover, Bender (1944) proposed that 60% of all employee dissatisfaction was directly attributable to issues of employee happiness (Wright & Bonet, 2007). Based on the above-mentioned arguments, the proposed conceptual framework for this study is as depicted in Figure 1. Figure 1: The Proposed Conceptual Framework for the Study of the Role of Work Happiness, Job Attitude, and Turnover Intention Job Attitude

Work Happiness Turnover Intention

Proposition 1: There is a positive relationship between work happiness and job attitude Proposition 2: There is a positive relationship between work happiness and turnover intention 3. Conclusion From a review of past literatures, a conceptual framework on work happiness related on employee’s job attitude and employees’ turnover intention has been proposed. Especially, work happiness that happiness is based on Philosophy Sufficiency Economic is very interesting because sufficiency happiness will be created sustainable happiness, moderation, and well-balanced way of life has to perform. Furthermore, Varila and Viholainen (2000) explained that happiness at work creates work satisfaction, work motivation and other positive reactions linked to work (Suojanen, 2012). In accordance with Maslow’s Hierarchy of need (1970) which stated that humans feel satisfaction and happiness when they received belong and love (Sahoo & Sahu, 2009). Herzberg’s Motivation/Hygiene Theory (1959) pointed out that 1) motivation factors for satisfaction composed of achievement, responsibility, recognition, advancement and work characteristics 2) Hygiene factors is a cause, of dissatisfaction at work (Malik & Naeem, 2012). Happiness is one of basic need (Freyermuth & Schonewille, 2009) and is motivation factors. The study finding may help to guide practitioners and managers to integrate work happiness in organization as to reduce negative job attitude and turnover intention of employees. Acknowledgement: The funding for this research was supported in part by a Postgraduate Incentive Research Grant Scheme (1001/PMGT/822209) from Universiti Sains Malaysia. References Albano, J. J. F. (2009). Developing a measure and an understanding of The individual experience of happiness at work. (Doctor of Philosophy), University of San Francisco, California. AlBattat, A. R. S. & Som, A. P. M. (2013). Employee Dissatisfaction and Turnover Crises in the Malaysian Hospitality Industry. International Journal of Business and Management, 8(5), 62-71. Amin, Z. & Akbar, K. P. (2013). Analysis of Psychological Well-being and Turnover intentions of Hotel Employees: An Empirical Study. Bal, P. M., De Lange, A. H., Jansen, P. G. & Van Der Velde, M. E. (2008). Psychological contract breach and job attitudes: A meta-analysis of age as a moderator. Journal of Vocational Behavior, 72(1), 143-158. Barameechai, J. (2007). The green and happiness index. Paper presented at the International Conference on Happiness and Public Policy, Bangkok. Bigliardi, B., Petroni, A. & Dormio, A. I. (2005). Organizational socialization, career aspirations and turnover intentions among design engineers. Leadership & Organization Development Journal, 26(6), 424-441. Carpenter, M., Bauer, T. & Erdogan, B. (2009). Principles of management: Flat World Knowledge.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Chang, C. C., Tsai, M. C. & Tsai, M. S. (2011). The Organizational Citizenship Behaviors and Organizational Commitments of Organizational Members Influences the Effects of Organizational Learning. International Journal of Trade, Economics and Finance, 2(1). Chiang, F. F. & Birtch, T. A. (2010). Pay for performance and work attitudes: The mediating role of employee–organization service value congruence. International Journal of Hospitality Management, 29(4), 632-640. Clark, A. E., Frijters, P. & Shields, M. A. (2008). Relative income, happiness, and utility: An explanation for the Easterlin paradox and other puzzles. Journal of Economic Literature, 95-144. Davoudi, S. M. M., Cherati, H. & Kaur, R. (2012). Strategic Human Resource Management: Providing Sustained Competitive Advantages for Organizations. Asian Journal of Research in Social Sciences and Humanities, 2(5), 289-303. Davoudi, S. M. M., Fartash, K., Allahyari, M. & Yarahmadi, H. (2013). Workplace bullying and turnover intentions among Iranian employees. International Journal of Research in Organizational Behavior and Human Resource Management, 1(1), 12-23. Dehaghi, M. R. (2012). Happiness as an effective factor in organizational commitment of managers. African Journal of Business Management, 6(33), 9460-9468. Diener, E. & Diener, C. (1996). Most people are happy. Psychological Science, 7(3), 181-185. Dimitriou, C. K. (2012). The Impact of Hotel Business Ethics on Employee Job Satisfaction, Organizational Commitment, and Turnover Intention. (Doctor of Philosophy), Taxas Teach University Dlamini, S. (2011). Orientations to Happiness and Subjective Well-being Among Teachers in Swaziland. University of KwaZulu-Natal, Durban. Eberle, G. J. (1919). Labor turnover. The American Economic Review, 9(1), 79-82. Field, L. K. & Buitendach, J. H. (2011). 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A. & Kammeyer-Mueller, J. D. (2012). Job attitudes. Annual review of psychology, 63, 341-367. Krausz, M. (2002). The many faces of voluntary employee turnover Voluntary employee withdrawal and inattendance (pp. 53-70): Springer. Kuria, S., Alice, O. & Wanderi, P. (2012). Assessment of causes of Labour Turnover in Three and five Star-Rated Hotel in Kenya. International Journal of Bussiness and Social Science, 3(15), 311-317. Kusluvan, S., Kusluvan, Z., Ilhan, I. & Buyruk, L. (2010). The Human Dimension A Review of Human Resources Management Issues in the Tourism and Hospitality Industry. Cornell Hospitality Quarterly, 51(2), 171-214. Luthans, F., Zhu, W. & Avolio, B. J. (2006). The impact of efficacy on work attitudes across cultures. Journal of World Business, 41(2), 121132. Lynn, M. S., Lucy, A. N. & George, C. T. (1990). Job and organizational attitudes in relation to employee behavioral intentions. Journal of Organizational Behavior, 11(1), 57-67. Lynn, M. S., Newton, L. A. & Thornton, G. C. (1990). Job and organizational attitudes in relation to employee behavioral intentions. Journal of Organizational Behavior, 11(1), 57-67. Lyubomirsky, S., Sheldon, K. M. & Schkade, D. (2005). Pursuing happiness: The architecture of sustainable change. Review of General Psychology, 9(2), 111. MacIntosh, E. W. & Doherty, A. (2010). The influence of organizational culture on job satisfaction and intention to leave. Sport Management Review, 13(2), 106-117. Malik, M. E. & Naeem, B. (2012). Towards Understanding Controversy on Herzberg Theory of Motivation. Martin, M. J. (2011). Influence of human resource practices on employee intention to quit. (Doctor of Philosophy), Virginia Polytechnic Institute and State University. Miller, H. E. (1981). Withdrawal Behaviors Among Hospital Employees. (Doctor of Philosophy), University of Illinois Urbana-Champaign. Morrell, K., Loan‐Clarke, J. & Wilkinson, A. (2001). 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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Pariyawong, V., Wongchaya, W. & Kohkaeng, W. (2007, June 14, 1988). [Self-Sufficient Economy The Philosophy of His Majesty The King of Thailand]. Price, J. L. (2001). Reflections on the determinants of voluntary turnover. International Journal of Manpower, 22(7), 600-624. Rashvand, O. (2013). A Study of the Relationship among Spiritual intelligence, Organizational Citizenship Behavior and Turnover Intentions. International Journal of Research in Organizational Behavior and Human Resource Management, 1(2), 25-34. Ratna, M. R., Gupta, M. A. & Chawla, M. S. (2011 ). Job Happiness Quotient In The Banking Sector. Journal of Applied Management & Computer Science, 3, 1-24. Rego, A., Ribeiro, N., Cunha, M. P. E. & Jesuino, J. C. (2011). How happiness mediates the organizational virtuousness and affective commitment relationship. Journal of Business Research, 64(5), 524-532. doi: http://dx.doi.org/10.1016/j.jbusres.2010.04.009 Robbins, P. & Coulter, M. (2005). Management, International edition: New Jersey, Pearson–Prentice–Hall, Inc. Robertson, I. & Cooper, C. (2011). Well-being: Productivity and happiness at work: Palgrave Macmillan. Robinson, R. N. & Beesley, L. G. (2010). Linkages between creativity and intention to quit: An occupational study of chefs. Tourism Management, 31(6), 765-776. Ryan, R. M., Huta, V. & Deci, E. L. (2008). Living well: A self-determination theory perspective on eudaimonia. Journal of Happiness Studies, 9(1), 139-170. Saari, L. M. & Judge, T. A. (2004). Employee Attitudes and Job Satisfaction. Human Resource Management, Winter, 43(4), 395-407. doi: 1002/hrm.20032 Sahoo, F. M. & Sahu, R. (2009). The role of flow experience in human happiness. Journal of the Indian Academy of Applied Psychology, 35, 40-47. Samad, S. (2006). Predicting turnover intentions: the case of Malaysian government doctors. The Journal of American Academy of Business, Cambridge, 8(2), 113-119. Schleicher, D. J., Watt, J. D. & Greguras, G. J. (2004). Reexamining the job satisfaction-performance relationship: the complexity of attitudes. Journal of applied psychology, 89(1), 165. Seyed, M. M. D. (2013). Workplace Bullying and Turnover Intentions among Iranian Employees. International Journal of Research in Organizational Behavior and Human Resource Management, 1(1), 12 - 23. Suojanen, I. (2012). Work for your happiness - Theoretical and empirical study definingand measuring happiness at work. (Doctor of Philosophy), University Of Turku. Wright, T. A. & Bonet, D. G. (2007). Job satisfaction and psychological well-being as nonadditive predictors of workplace turnover. Journal of management, 33(2), 141-156.

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Time-Frequency Analysis of Heart Rate Variability for Autonomic Function Assessment Tool *N. Aimie-Salleh, M.B. Malarvili Universiti Teknologi Malaysia, Johor Bahru Johor, Malaysia *[email protected]

Abstract: Heart Rate Variability (HRV) is a non-stationary signal that has been proposed as a non-invasive tool and can provide quantitative information to understand the Autonomic Nervous System (ANS). Due to this non-stationary nature, conventional methods were unable to produce valuable information embedded within the HRV signal. To overcome this limitation, Time-Frequency (TF) analysis has been proposed. Therefore, this study proposes an approach that integrates the TF analysis of HRV during Autonomic Function Test for the development of an ANS assessment tool. Electrocardiograph (ECG) was recorded from 32 adults during selected AFT: active postural test and cold pressor test. The signals were pre-processed using Pan and Tompkin’s algorithm to quantify the HRV. Next, quadratic Time-Frequency Distributions (TFDs) using Modified-B-Distribution (MBD) was used to map the HRV. The optimum kernel parameter for MBD, β was set to 0.001. The HRV features were then extracted from the MBD. Among the extracted features, Total Shannon Entropy (ST) presented the highest performance. This feature was used in rule-based system to generate final predictive decision. Keywords: Heart Rate Variability (HRV), Autonomic Nervous System (ANS), Time-Frequency Distributions (TFDs), Modified-B-Distribution (MBD), Shannon Entropy 1. Introduction Computer method of biological information has been rapidly spread over the world. They study and work with the information extracted from human body. One of the techniques that have been widely used in extracting the information is by non-invasive method. This method was proven to be able to minimize the side effect and give less harm, yet provide accurate information. Activity of Autonomic Nervous System (ANS) or autonomic function, which captured non-invasively, can present valuable information in order to understand its behaviour and status (Applegate, 1995). This information can be highly utilized by computerized processing or called as biomedical signal processing. The Electrocardiograph (ECG) is one of the biomedical signals that represent important information of the heart as well as autonomic functioning. Throughout the years, the method of processing this signal has been improved to a convincing stage. However, as the technologies grow rapidly, the demand of an intensive and more advance health monitoring has increased. This demand leads the researcher to investigate and produce new processing method in specific promising application. This vital condition explains the need of studies to reveal the functioning of the autonomic system, and understand its health status. Heart Rate Variability (HRV) is a powerful biomedical signal derived from ECG that has been use as a promising tool in assessing autonomic function of human body. HRV is defined as the variation over time of the period between consecutive heartbeats. It has been proven to provide essential information in assessing autonomic function-related diseases including diabetes (Baldwa & Ewing, 1977; May & Arildsen, 2000), hypertension (Lammers et al., 2010; Piccirillo et al., 2006), coronary artery disease (Del Pozo, Gevirtz, Scher, & Guarneri, 2004) and cardiovascular disease (Kluttig, Kuss, & Greiser, 2010). HRV is also used to assess autonomic response to physiological differences or activities under conditions such as sleep (Mantaras et al., 2006; Vigo et al., 2010), meditation (Peressutti et al., 2010; Phongsuphap et al., 2008), mental stress (Vuksanovic & Gal, 2007; Zhang, 2007), reflexology (Joseph, et al., 2004; Zhen et al., 2003) and physical exercise (Bricout et al., 2010; Guo et al., 1999). In this paper, HRV has been studied as one particular application of biomedical signal processing in assessing autonomic function of human body. In order to provide a high-quality and an accurate assessment, the precise features that will be used as the final assessment decision are crucial (Howorka et al., 2010; Udupa et al., 2007). For that reason, comprehensive studies need to be carried out. Time and frequency domain analyses are the conventional approaches applied by many previous studies to extract features from HRV. Due to the non-stationary nature of the HRV, these methods were unable to produce valuable information embedded within the signal. To overcome this limitation, Time-Frequency (TF) analysis has been proposed as a promising method (Boashash, 2003). TF analysis provides time-localized spectral information for a “non-stationary” signal such as HRV as a distribution function in terms of time and frequency. Therefore, this study proposes TF analysis of HRV as an autonomic function assessment tool. 2. Methodology Data acquisition: ECG were recorded from 32 healthy subjects (21 females and 11 males) with no history of cardiovascular or neurological diseases. Lead II ECG, with a standard three lead ECG placement, was applied by using Bio Radio 150 with Clevelab software. The four limb electrodes i.e., Right Arm (RA), Right Leg (RL), Left Arm (LA) and Left Leg (LL), are commonly placed on the patient’s wrists and ankles when measuring ECG (Barill, 2003). However, to reduce the motion artifact caused by the procedure, the limb electrodes were placed on the torso (near to the junction of each limb) as shown in Figure 1. Sampling frequency was set up to Fs = 600. Figure 1: The Electrode Placement

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) The ECG recording consisted of the following two selected Autonomic Function Tests (AFT): Active Postural Test (APT) and Cold Pressor Test (CPT). For APT the subject was initially asked to rest quietly in the supine position for at least 20 minutes (Jáuregui-Renaud et al., 2001). Then, ECG was recorded for five minutes, with subjects still in the supine position. Next, the subjects were instructed to stand upright, and ECG was recorded for another five minutes in that position. The cold pressor test was done by first measuring the baseline ECG for five minutes. Subjects then immersed their left hand (Ferracuti et al., 1994) into a 0 to 5°C water bath (to wrist level) for three minutes, followed by removal of the hand from the water, which was then dried. Recording continued for another five minutes. The ECG setup is presented in Figure 2. The recorded ECG was then exported to the personal computer for further process. Figure 2: ECG setup for AFT

Signal Processing: The recorded ECG signals were pre-processed to quantify the HRV using MATLAB software. The signals from each test were segmented into three minute periods in order to have a standard length of signal. The QRS waves were then detected using Pan and Tompkin’s algorithm (Pan & Tompkins, 1985). More information on these processes can be found in (Aimie-Salleh & Malarvili, 2011). Next, Time-Frequency Distribution (TFD) as shown in Figure 3 has been used to map the HRV from a time domain into a timefrequency domain (Boashash, 2003). Figure 3: Time Frequency Distribution of HRV which Contains Both Time and Frequency Information

Quadratic TFD is one of the most popular classes of TFDs currently being used (Boashash, 2003). The general equation for a quadratic TFD, is (Boashash, 2003): ∞ ∞ 𝜏 ρz(v,f) = −∞ −∞ 𝑔 𝑣 − 𝑢, 𝜏 𝑧 𝑢 + 𝑧 ∗ (𝑢 − 𝜏2)𝑒 −𝑗 2𝜋𝑓𝜏 𝑑𝑢𝑑𝜏 (1) 2 Where, z(t) is the analytic associate of the real signal s(t). The function g(v,τ) is known as the TFD kernel, and determines the characteristics of the TFD. Five generally used TFDs in AFT application are: Wigner Ville Distribution (WVD): WVD is the fundamental quadratic TFD, (Boashash, 2003) whose kernel filter is: g(ν ,τ )= 1 (2) Smoothed Pseudo Wigner Ville Distribution (SPWVD): This TFD is an improvised design of WVD and has a separable kernel, which is expressed as: g(v,τ ) = h2 (τ/2)g(υ) (3) Where the window g(v) is the smoothing window and h(τ ) is the analysis window. These two windows were chosen to suppress spurious peaks and obtain a high TF resolution. The Choi William Distribution (CWD): CWD has a 2D Gaussian kernel filter given by: 2 2 2 g(ν,τ) = 𝜋𝜍/|𝜏|𝑒 𝜋 𝑣 𝜍/2 (4) The CWD has one parameter, σ which, controls the sharpness of the 2D filter cut-off. Spectrogram (SP): SP has a kernel filter that is represented as: g(v,τ)=w(v+τ/2)w(v- τ/2) (5) It performs a local or ‘short-time’ Fourier analysis, using a sliding analysis window w(v) to segment the signal into short sections centered near to the observed time t, before computing the Fourier transformation. Modified B-Distribution (MBD): MBD is one of the TFDs that can present a high TF resolution for slowly varying signal such as HRV. The kernel for the MBD is: g(ν ,τ )= 𝑐𝑜𝑠𝑕−2𝛽 (𝑣)/ 𝑐𝑜𝑠𝑕−2𝛽 𝜉 𝑑 𝜉 (6)

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Where, 𝜉 stands for the gamma function and β is a real positive number between 0 and 1 that controls the trade-off between components’ resolution and cross-terms suppression (Barkat & Boashash, 2001). For this study, MBD will be used as it has been proven able to produce high TF resolutions and was effective in cross-terms reduction for slowly varying frequency like HRV (Malarvili et al., 2007). Feature Extraction: TFD-based Shannon entropy from the estimated TFD was then computed for feature extraction. The entropy features were computed from overall TFD, presented as ST, and entropy within the LFHF range, presented as S LH. The entropy discriminates between different physiological conditions of the AFT. When applied to TFD, the Shannon entropy can be written as (Malarvili, 2007): 𝐻= 𝜌𝑁 𝑡, 𝑓 𝑙𝑜𝑔2 𝜌𝑁 𝑡, 𝑓 𝑑𝑡𝑑𝑓 (7) Where ρN(t,f) is the normalized TFD. 3. Results and Discussion TFDs of the HRV were plotted using the MBD and the kernel parameter of the MBD was set to the optimal value; β = 0.001. Next, the Shannon entropy of the whole TFD, Total Entropy (ST), has been estimated in this study. Entropy is a non-linear technique that can be used to measure the complexity of heart rate variability. It estimates the average uncertainty of a series of discrete events (Rao & Ravindran, 2010). To explain it simply, if the information is alot, the signal is more complex and when the information is less, the signal is less complex. As a comparison, the Shannon entropy for HRV in the LF (0.04 – 0.15 Hz) to HF (0.15 – 0.4) range (SLH) was also estimated. Table 4 indicates that the HRV indices, which are ST and SLH showed a significant difference (p PMS

0.34

PRCM -> ICT

Error

T Statistics (|O/STERR|)

P-value

Decision

0.11

3.03

0.03

Supported

0.06

0.14

0.45

0.65

not supported

SEPR -> PMS

-0.04

0.14

0.27

0.79

not supported

SEPR -> ICT

0.19

0.16

1.22

0.22

supported

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) ICT-> PMS

0.11

0.09

1.26

0.21

supported

As shown in Table 3 above, three hypotheses were supported and two were not supported. The supported hypotheses indicate p-value results that are < 0.5. Table 4 that follows displays the effect size. Table 4 Relationship

t-value

p-value

F2

Strength

PRCM -> PMS

3.03

0.03

0.13

Medium

SEPR -> ICT

1.22

0.22

0.02

Small

ICT -> PMS

1.26

0.21

0.02

Small

Table 4 above shows the effect size of variables on DV and on the Mediator. As shown, the strength of F 2 is medium in one relationship (PRCM-PMS) and small effect was reflected in two relationships (i.e. SEPR-ICT and ICT - PMS). Chin et al. (2003), buttressed that the fact that the F2 strength in some relationships is small; it does not relegate their statistical significance because they can cause change in a given relationship. The figure 3.1 represents the study model. Figure 1: Study Model

Test ff Mediation: Unlike the test of mediation by Baron and Kenny (1986) this study employed a test of mediation technique that made provision for standard errors (Hayes & Preacher, 2010). The technique was undertaken by determining the path coefficients and the pvalues of the dependent variable and the in dependent variable putting the mediator on hold and later in the presence of the mediator variable and the standard errors. Two different links were established i.e. ab representing the path of independent variable to the mediator variable (X-Y), bc representing the second link from the mediator variable to the dependent variable (M-Y). The following formula that was adopted from Kock (2013) was used. i.e.

𝑎 ∗𝑏 Tab=

𝑠(𝑎∗𝑏)

a = the value of relationship between independent variable and the mediator variable b = the value of the relationship between mediator variable and the dependent variable S (a*b) = standard deviation of the “a” and “b” above The table 4.1 below displays the results of the mediating effect of ICT on the relationship between PRCM and SEPR and performance management system.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Table 5 PRCM

SEPR

a*b

0.0024604

0.0919598

S

0.0071762

0.0753877

T

0.3

1.2

The table 5 above displays the result of test of mediator ICT a t-value of 0.3 for PRCM (Procurement); 1.2 for SEPR (Separation). In the table above all the two variables are mediated. An indication of a full mediation is shown in one i.e. PRCM and a partial mediation in the other i.e. SEP with a t-value of 0.3 and 1.2 respectively which are all significant at one tail. The figure 2 below displays the mediating effect of ICT on the relationship between procurement and performance management system and separation and performance management system. Figure 2: the mediating effect of ICT

Discussions The relationship between procurement and performance management system: This relationship is supported in this study since β = 0.11; t-value = 3.03 and p-value = 0.03. The findings of this study concur with some previous studies that established that employee procurement results to stability and performance of employees and a pleasing result (Bowles et al. 2007; Den Hartog & Verburg, 2004) and Heinen & O’Neill (2004) further added that it cements cordial relationship between employer and employee. The relationship between procurement and ICT adoption: This hypothesis is also not favored in this study because it indicates a β value of = 0.14, t-value = 0.45, p-value = 0.65. This finding perhaps contradicts a lot of literatures such as in Williams (2010), Yusoff et al. (2010), Handloglen (2009) and Hussain et al. (2007) who reported a significant positive relationship between ICT and procurement. This contradiction could be as a result of the fact that there are so many issues that constraint the implementation of e-recruitment in the university such as the federal character and quota policy that warrants equal opportunities be accorded to regions in federal appointments and the fact that internet facilities are still not very common in some places where the supply of electricity is erratic

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) The relationship between separation and performance management system: The β value = 0.14, the t-value = 0.27 and p-value = 0.79 led to the decision that this hypothesis is not supported in this study. This finding goes contrary to a number of literatures such as Beever (2008) and Rothwell et al., (2005). Looking at it from another perspective, Ogundele and Idris (2008) believed that the main reason behind lack of correlation between performance management and separation of employee is the in ability to prepare subordinates for the task ahead for lack of confidence in what the new leadership will signify in the future. The relationship between separation and ICT adoption: This decision about this hypothesis is that it is supported in this study as shown in the values of β = 0.16, t-value = 1.22 and a p-value of 0.22. This finding contradicts the researcher’s expectation. It was found out that universities’ inability to utilize ICT in procurement does not prevent them to monitor the development of their employees using ICT. The finding also concurs with the opinions of Sanayei and Mirzaei (2008) and Jaquenoud (2005) who stressed that organizations do adopt ICT to regulate employee separation via e-succession planning. The relationship between ICT adoption and performance management: This study found that this hypothesis is supported as shown in the values of β = 0.09, t-value = 0.20 and p-value = 0.21. The outcome of this study further supports those of Remus (2007) and Namazie and Frame (2007) who concluded that ICT is strong factor that assures employee performance management. Similar conclusions were also reached by Ruel et al, (2004) who added that ICT is very necessary for organizational progress which could not be attained without appropriate employee performance management. 5. Conclusion It has been proven in this study that ICT adoption helps a lot in ensuring effective employee performance management system in Nigerian universities. It therefore remains a challenge for the government to ensure adequate funding of the universities which will no doubt have multiplier effects of reviving the education sector, ensure production of quality graduates, providing ample employment opportunities and above all salvaging the already troubled country’s economy. References Baron, R. & Kenny, D. (1986). The moderator-mediator variable distinction in social psychological research: conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51 , 1173-82. Bowles, S., Cunnigham, C. C. J. L., De La Rosa, G. & Picano, J. (2007). Coaching leaders in middle and executive management: goals, performance, buy-in. Leadership & Organization Development Journal, 28(5), 388-408 Beever, D. R. (2008). Integrating Succession and Career Development Strategies for Finance Professionals Victoria BC: Royal Roads University Canada. Cedar, C. (2005). Workforce technologies and service delivery approaches survey, 8th Annual Edition. Chang, W. & Chen, S. J. (2000). A study of the performance appraisal of the industrial designer in Taiwan. Journal of Technology, 15(3), 381-386 Chin, W. W., Marcolin, B. L. & Newsted, P. N. (2003). A partial least squares latent variable modeling approach for measuring interaction effects: Results from a monte carlo simulation study and an electronic-mail emotion/adoption study. Information Systems Research, 14(2), 189–217. Den Hartog, D. & Verburg, R. (2004).High-performance work systems, organizational culture and firm effectiveness. Human Resource Management Journal, 14(1), 55-78. Handlogten, C. (2009). Implementation of e-recruitment. Amsterdam: Universiteit Twente. Heinen, J. S. & O’Neill, C. (2004). Managing talent to maximize performance. Employment Relations Today, 31(2), 67-82. Holton, E, & Trot, K. (2006).Competing for the future. Harvard Business Review, 72, 122-128. Huang, T. C. (2000). Are the human resource practices of effective firms distinctively different from those of poorly performing ones? Evidence from Taiwanese enterprises. International Journal of Human Resource Management, 11, 436–451 Hussain, Z., Wallace, J. & Cornelius, N. (2007). The use and impact of human resource information systems on human resource management professionals. Information & Management, 44(1) , 74 – 89. Ishizaka, A. & Labib, A. (2011). Review of the main developments in the analytic hierarchy process. Expert Systems with Applications, 38(11), 14336–14345. Idris, F. (2011). Total quality management (TQM) and sustainable company performances: examining the relationship in Malaysian firms. International Journal of Business and Society, 12(1), 31-52 Jaquenoud, L. (2005).How to maximize HR technology. Strategic HR Review, 5(1), 4. Kim, S. (2005). Individual-Level Factors and Organizational Performance in Government Organizations. Journal of Public Administration Research & Theory, 15, 2, 245-261 Kock, N. (2013).Advanced mediating effects tests, multi-group analyses and measurement model assessments in PLS-based SEM. Laredo, TX: ScriptWarp Systems. Meier, K. J. & Hicklin, A. (2008). Employee turnover and organizational performance: A theoretical extension and test with public sector data. Journal of Public Administration Research and Theory, 18(4), 573-590 Moynihan, D. P. & Landuyt, N. (2008). Explaining turnover intention in state government: Examining the roles of gender, life cycle, and loyalty. Review of Public Personnel Administration, 28, 120-143. Namazie, P. & Frame, P. (2007). Developments in Human Resource Management in Iran. International Journal of Human Resource Managemnt, 18 (1) , 159-171. O’Neal, T. (2005). Evolving a Successful University-Based Incubator: Lessons Learned from the UCF Technology Incubator. Engineering Management Journal, 17(3), 11-25 Remus, U. (2007). Critical success factors for implementing enterprise portals: A comparison with ERP implementations. Business Process Management Journal, 15, 538-552. Richard, O. C. & Johnson, N. B. (2001). Understanding the impact of human resource diversity practices on firm performance. Journal of Management Issues, 13, 177–195.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Ringle, C., Wende, S. & Will, A. (2005). SmartPLS 2.0 M3. Hamburg: University of Hamburg. Retrieved June 6 th 2013, from http://www.smartpls.de Rothwell, W., Jackson, R., Knight, S. & Lindholm, J. (2005). Career planning and succession management: Developing your organization's talent-for today and tomorrow. Westport, CT: Greenwood Press. Ruël, H., Bondarouk, T. & Looise, J. (2004). E-HRM: Innovation or Irritation. Utrecht: Lemma Publishers. Sanayei, A. & Mirzaei, A. (2008). Designing a Model for Evaluating the Effectiveness of e-HRM (Case Study: Iranian Organizations). International Journal of Information Science and Technology, 6(2). Sodhi, M. S. & Lee, S. (2007). An analysis of sources of risk in the consumer electronics industry. JORS, 58(11), 1430-1439 Stanton, J. M. & Coovert, M. D. (2004). Turbulent waters: The intersection of information technology and human resources. Human Resource Management, 43(2), 121−125 Strohmeier, S. (2007). Research in e-HRM: Review and implications. Human Resource Management Review, 17, 19–37. Tabachnick, B.G. & Fidell, L. S. (2007).Using multivariate statistics (5th ed.). Boston: Pearson Education Inc. Townsend, A. M. & Bennett, J. T. (2003). Human resources and information technology. Journal of Labor Research, 24(3), 361−363 Tzafrir, S. S. (2006). An universalistic perspective for explaining the relationship between HRM practices and firm performance at different points in time. Journal of Managerial Psychology, 21(2), 109-130 Viswesvaran, C. (2003). Introduction to special issue: Role of technology in shaping the future of staffing and assessment. International Journal of Selection and Assessment, 11(2/3), 107−112 Williams, H. (2010). The HRIS specialist: Resourcing the right kind of human capital. In S. Strohmeier & A. Diederichsen (Eds.), Evidencebased e-HRM? On the way to rigorous and relevant research, Proceedings of the 3rd European academic workshop on electronic human resource management, Bamberg. Yusoff, Y. M., Ramayah, T. & Ibrahim, H. (2010). e-HRM: A proposed model based on technology acceptance model. African Journal of Business Management, 4(13), 3039-3045

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Human Resource Information Systems Technology - A Strategic Knowledge Management Tool for Human Resource Management Krisandra Naicker, *Loganathan Narayansamy Govender University of Kwazulu-Natal, South Africa *[email protected] Abstract: The 21st century human resource (HR) managers face new challenges that require a strategic management of employee resources and information overload to support human resource management (HRM). The paper explores the integrated approach that could be adopted by human resource information systems (HRIS) and Human Resource Management (HRM) to identify, classify, store and evaluate human resource information assets to meet the strategic needs of HRM in the 21 st century organisational era. The information assets include databases, documents, policies, procedures, as well as the un-captured tacit expertise and experience stored in individual’s heads, in the form of knowledge. This paper examines the perceptions of Human Resource Information System usage for knowledge management in the context of human resource management. Data for the study is obtained from a sample of human resource employees employed at retail organisations in South Africa. The data is quantitatively analysed using descriptive and inferential statistical techniques. The concept of knowledge is explored as a strategic asset for the organisation’s ompetitive advantage, and the paper evaluates whether HR employees recognise the various forms of the knowledge assets within organisations. Keywords: Information system technology, management, South Africa 1. Introduction Modern businesses rely on the organisational knowledge to compete and compensate for scarce natural resources. Literature refers to the value of a knowledge-based economy as the product of knowledge and information (Schweyer, 2004:42). Various authors have identified different approaches for categorising the tools that make up the knowledge management (KM) system (Lee and Lee, 2003; Malhotra, 2004 and Kalkan, 2008). However, a literature search confirms that there is a lack of convergence between the knowledge management (KM) and the Human Resource Information System (HRIS) to improve the efficiency and effectiveness of human resource management (HRM). HRIS is a potential tool to generate such information and knowledge sharing within an organisation. Mayfield, Mayfield and Lunce (2003) acknowledge that an HRIS is a powerful tool and greater understanding is required in order to achieve its optimum potential. Minimal research has focused on the relationship between HRISs, KM and HRM. A literature review confirmed that research on the effective use of HRIS to strategically improve HR and KM practices is limited. Problem statement: HRIS, as a HRM tool to leverage and complement knowledge management, is under-emphasised in organisations. This under-emphasis severely prejudices the organisations’s ability to strategically compete and survive. Retail organisations have also failed to compensate or to include KM initiatives within HRISs as part of performance measurements which may partially explain the lack of interest and awareness of KM interventions. The basis of good human resource (HR) decisions is good HR information, which, according to Grobler, Warnich, Carrell, Elbert and Hatfield (2006:40), provides both HR and line managers with the ability to facilitate decision-making. As HR transforms into a strategic business-partner role, the pressure on HR to deliver on expectations and contribute to the overall organisational objectives increases. HR is required to satisfy business needs with the availability of the right tools, at the right time to support business objectives and goals. Pinnington, Kamoche, and Suseno (2004) explain that the appropriate management of HR in a knowledge intensive organisation requires the retention of competent employees who possess scarce expertise. Ferratt, Agarwal, Brown and Moore (2005) comment that a knowledge intensive economy demands that information technology (IT) play a pivotal role in enabling organisations to achieve objectives of operational effectiveness, as well as facilitating strategic competitive advantage. A Human Resource Information System (HRIS) shapes integration between human resource management (HRM) and IT as it combines HRM as a strategic function with abilities to access and utilise key information. HR functions, such as applicant recruitment and tracking, training and development, performance management and compensation, are supported with the information system applications. The HRIS supports administration, planning and monitoring of information and knowledge. Many associated HR functions, such as swift HR information sharing and feedback, would be challenging without technological support and assistance. HRISs cannot be used in isolation as the data and information that flows within the organisation transfers to knowledge. The strategic benefits of the HRIS is the ability to distribute critical knowledge to the right people, or make organisational knowledge available at a point in time when it is most needed. The HRIS can serve as a strategic tool for the HR department by ensuring that the HR information and knowledge is accessible, kept up to date, and flexible. The HRIS should be used as a support for strategic HR as well as an enabling technology. The strategic use of HRIS is further highlighted by Anonymous (2009) as adding value to business- process improvements, talent management processes, employee and manager self-service and HR systems strategy. Hence, there is an obvious critical HR information input to a system that will enable the effective operation of the HR function. This information can be transformed to knowledge with the effective aid of a HRIS that bridges the gaps and allows for easy access and storage. To best demonstrate this view, the conceptual framework that follows will explain the intention of the researcher’s frame of reference and research variables for the purpose of this study. The variables for the study that impact on HRIS and KM and the relationships and integration between the concepts are described in Figure 1. Human Resource Management (HRM): Noe (2005) refers to HRM practices as management actions that directly relate to investments (time, effort and money) in recruitment, performance management, learning and development, compensation and benefits. Bratton and Gold (2003:7) define HRM as “the strategic approach to managing relations of employees which emphasises that leveraging people’s capabilities is critical to achieving sustainable competitive advantage”. Definitions of HRM require HR to provide the necessary information to support the business needs timeously. The efficiency and strategic direction of HR must be aligned and

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) available from the start. The demanding nature of business and focus on shareholder value requires HR to support strategic objectives (Storey,2001). Previous rigid structures are no longer relevant as the focus shifts to critical people issues. Grobler, et al., (2006) reports that for HR professionals in South Africa, conventional HR tactics, which were evident in cultures with command and control dominations, are paving the way to new tactics characterised by enhanced employee commitment, collaboration and communication. Figure 1

HUMAN RESOURCE MANAGEMENT

HUMAN RESOURCE INFORMATION SYSTEMS

KNOWLEDGE MANAGEMENT KNOWLEDGE ASSETS

TECHNOLOGY KNOWLEDGE CHALLENGES USE OF HRIS KNOWLEDGE SHARING The model illustrated in Figure 1, highlights HRIS as a technological KM enabler. The HRM environment does not exist in isolation and HRIS provides a useful infrastructure to manage personnel and strategic data, information and knowledge. The relationship between the variables are contextualized. HRM has to focus on providing maximum value for the business with the benefit of merging the HR functionality and information systems within HR. As illustrated in Figure 2.1, HRM relies on the HRIS to provide the relative data and knowledge to support HRM. An inclusive base of accurate, reliable HR information that is easily available to decision makers is critical to HR’s ability to conduct its key functions. HR information and knowledge is linked and integrated with other information systems, disintegrating departmental barriers. As a result, HR knowledge can now be stored and accessed using the HRIS. The information is customised and aligned to the organisation’s eligibility rules, individual demographics data and information available in the knowledgebase (Becerra-Fernandez, Gonzalez, and Sabherwal, 2004). Research conducted by Afiouni (2007) argues that the strategic combination of the HRM initiative with KM will assist to enhance organisational performance as well as increase knowledge and skills. Human Resource Information Systems (HRIS): Tannenbum (1990) defines HRIS as “a technology-based system to acquire, store, manipulate, analyse, retrieve and distribute pertinent information regarding an organisation’s human resources”. According to Broderick and Boudreau (1992), cited in Ngai and Wat (2006), HRIS is defined as“the composite of databases, computer applications, and hardware and software necessary to collect/record, store, manage, deliver, present, and manipulate data for human resources”. The introduction of HRIS in HR Departments was long overdue and has rapidly developed into cost-saving systems for organisations. Over the last decade, research studies have confirmed that HRIS has taken a critical role in assisting HR management by providing critical data to make key business decisions (Gasco, Llopis and Gonzales, 2004). Executive decision-making, team integration, training and development and reporting frameworks contribute to the success of the HRIS. The interrelatedness of the key variables depicted in Figure 1 demonstrate the ability of HRIS to service KM in the HRM environment. In addition to enabling corporate goals and strategy, the HRIS allows an organisation to gather information about the workforce in general so that it can measure itself against its own goals and industry standards. Once created, the system can manage itself as it collates, organises, stores and retrieves information in an effective manner. The overall objective of the HRIS aims to ensure that the right information and knowledge is available to the right people at the right time and the right place to make the right decisions. Desouza and Awazu (2003) explain that a properly-aligned HRIS plays a critical role in the contribution to the management of organisational knowledge. For example, the HRIS enables double-loop learning feedback which facilitates organisational change, communication, decision-making, and shared visions (Mayfield, Mayfield and Lunce, 2003). The HRIS can configure and constitute strategic initiatives such as delivering knowledge management with relevant training in cost-and time-effective ways. Barney (1991) posits that scarce knowledge resources are difficult to imitate. Such resources are identified as both intangible and tangible assets. The starting point of HRIS should be its ability to provide reliable HR information and knowledge to facilitate strategic decisions. This includes knowledge capture (including tacit knowledge) and formation by creating structure from unstructured information. Armstrong (2000) explains that KM is a developed form of HRM that uses IT as a supporting infrastructure in the humaninterface process. The strategic role of HR in KM facilitates diffusion of learning through work sessions, training projects and conferences. Garavan, Gunnigle and Morley (2000) suggest that HR builds the learning organisation to support KM by: 

assisting employees to produce and apply knowledge; and

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) 

formulating suitable networks and connections in learning.

KM is a key intervention that includes the creation, generation and sharing of an affluent collation of information captured with the ability to:   

build and create from this knowledge; apply tacit knowledge to existing problems; and develop new techniques and processes.

The HRIS modules linked to KM include compensation and reward, performance appraisal and reward, employee turnover, training and development and recruitment. Knowledge management: Pillania (2009) views KM as a strategic management concept because knowledge is recognised as a key strategic resource and it is a unifying concept drawing from various disciplinary areas like information systems and HR management. Shimemua and Nakamori (2003:1) provide a series of definitions of knowledge which can be summarised as:   

knowledge is organised information applicable to problem solving; knowledge is information that has been organised and analysed to make it understandable and applicable to problem solving or decision making; knowledge is reasoning about information and data to actively enable performance, problem-solving, decision-making, learning, and teaching.

Pillania (2007) defines KM as a process of generating, sharing, applying, renewing and updating knowledge in a systematic, planned and purposeful manner to achieve organised goals and objectives. KM usually measures the management of people, processes and technology as well as the emergence of HRM into KM initiatives. “Knowledge management is defined as the holistic combination of measures for managing people, processes, and technology and the explicit integration of human resource management into knowledge management initiatives” (Scarbrough, et al., 2004). Robinson, Carrillo, Anumba and Al-Ghassan (2005) define KM as the conversion or exploitation of knowledge as an asset for organisational strategy that facilitates continuous improvement. 2. Methodology HR employees at three retail organisations were surveyed by administering questionnaires to determine the extent of the strategic use of HRIS as a potential technological tool for storage, access and transfer of knowledge. Hypothesis testing: The hypotheses formulated for this paper were tested by using various statistical techniques. Hypotheses: To further explore the impact of HRIS on KM, the following hypotheses are established and tested in this paper. Hypothesis 1: There is a statistically significant correlation between the dimensions of knowledge management and the use of HRIS. Hypothesis 2: There is a statistically significant correlation between the dimensions of knowledge management and technology. Hypothesis 3: There is a statistically significant difference in the perceptions of KM dimensions (Knowledge assets, sharing and challenges) amongst the biographical variables. Hypothesis 4: There is a statistically significant difference in the perceptions of HRIS dimensions (Use of HRIS and technology) among the biographical variables. Description of the population: For the purpose of this study, the target population comprised HR employees from three South African organisations within the retail industry. Since this study was conducted in the context of HRM, the population comprised HR personnel. The population from the three organisations was ninety-one (91). Description of the sample: As the population size (N= 91) was small, questionnaires were distributed to all the elements in the population. Seventy (70) subjects completed the questionnaire, thereby generating a response rate of 77%, which included subjects from different races, gender, age groups and positions within the HR department. Composition of the sample: The composition of the sample, as depicted in Table1, summarises the biographical variables of the 70 employees of the selected organisations, who responded to the questionnaires. The response rate achieved was 77%, which was deemed adequate to interpret the results. Table 1: Frequency distribution and percentages of the gender groups Total Gender

Total

Count

% of Total

Male

18

25.7%

Female

52

74.3%

70

100.0%

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Table 1 reflects the percentage calculated from the total sample. Of the total sample 25.7% were male and 74.3% were female, respectively. The 48.6% difference in gender indicates a lack of diversity which can make it difficult to implement KM strategies, as gender diversity also plays an effective role in knowledge co-creation and generation. Table 2: Frequency distribution and percentages of the age groups Total Age

Count

% of Total

18-24

5

7.1%

25-34

32

45.7%

35-44

25

35.7%

45+

8

11.4%

70

100.0%

Total

Table 2 reflects the % age distribution calculated from the total sample. The highest percentage of respondents (45.7%) comprised the 25-34 year-old age group. The second highest percentage of respondents (35.7%) was from the 35-44 year-old age group, followed by the 45-54 year-old bracket (11.4%). The lowest percentage of respondents (7.1%) was from the 18-24 year-old bracket. The findings of the study show that the difference in percentage between employees who were of retirement age (11.4%) and those at the ages of the Y Generation (45.7%) was (34.3%). Table 3: Frequency distribution and percentages of the job status groups Total Job Status

HR Assistant

Count 11

% of Total 15.7%

HR Generalist

5

7.1%

HR Specialist

33

47.1%

HR Manager

17

24.3%

HR Executive

4

5.7%

70

100.0%

Total

Table 3 reflects the % calculated from the total sample. The highest percentage (47.1%) of respondents were HR specialists, while 24.3% of respondents were HR generalists. 15.7% of respondents were HR assistants and the lowest response rate (5.7%) were HR Executives. Table 4: Frequency distribution and percentages of the race groups Total Race

Count

% of Total

Indian

21

30.0%

Black

14

20.0%

Coloured

6

8.6%

White

29

41.4%

70

100.0%

Total

Table 4 reflects the % calculated from the total sample. Table 4 indicate that 41.4% of respondents were white, 30% were Indian, 20% were black, while and 8.6% were coloured respondents. The difference in race groups depicts clearly that, although employment equity is taken into cognisance, white race groups is still the majority. Table 5: Frequency distribution and percentages of tenure Total Tenure

Count

% of Total

0-5 years

50

71.4%

6-10 years

11

15.7%

11-15 years

5

7.1%

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) 15-20 years Total

4

5.7%

70

100.0%

Table 5 reflects the % calculated from the total sample. The sample composition of the job tenure of the group used in this study is reflected in Figure 5. The highest percentage of respondents (71.4%) were employed between 0 and 5 years while 15.7% were employed between 6 and 10 years, 5.7% were employed between 11-15 years and 5.7% of respondents between 15 and 20 years. This finding indicates that most people working in the HR department had tenure of 0-5 years. Data collection: Data collection is an integral element of the research process. A variety of data collection methods can provide valuable information for the purposes of analysis, testing hypotheses and answering the research questions (Sekaran, 2003:219). To generate data for the study, a questionnaire was developed. 3. Results The findings suggested that there was a statistically positive correlation between knowledge assets and the use of HRIS as well as knowledge sharing and the use of HRIS. However, the findings also suggested that there was a statistically negative correlation between knowledge challenge and the use of HRIS. The findings also suggested that there was a statistically positive correlation between knowledge assets and technology and there was a statistically significant negative correlation between knowledge challenges and technology and knowledge sharing and technology. The findings of the study suggested that there was no statistically significant difference in the perceptions of knowledge assets, challenges and sharing between gender groups and among age groups, job status groups and levels of tenure. While there was no statistically significant difference in the perceptions of knowledge assets and knowledge sharing among the race groups, there was a statistically significant difference in the perceptions of knowledge challenges among the race groups. The findings also suggest that there was no statistically significant difference in the perceptions of the use of HRISs and technology, as a tool, for sharing information between gender and among levels of tenure. It was found that there was a statistically significant difference in the perceptions of the use of HRISs and technology, as a tool, for sharing knowledge among age and job status groups, respectively. While it was found that there was a statistically significant difference in the perceptions of the use of HRISs among the race groups, there was no statistically significant difference in the perceptions of Technology as a tool for sharing information among the race groups. Recommendations based on the findings of the study: Recommendations are made on the perceptions of the usage of HRISs (use of HRISs and technology) for KM (knowledge assets, knowledge sharing and knowledge challenges) in a HR environment investigated in this study. Knowledge management: The KM dimensions includes knowledge assets, knowledge sharing and knowledge challenges. Knowledge assets: The mean score for knowledge assets indicated that HR employees recognised the value of the intellectual and human capital in individuals. Therefore, in order to increase the value of the organizational knowledge assets, senior management should focus greater time and increased investment on the intangible assets in the organisation. A greater number of KM interventions and systems need to be implemented in organisations to effectively leverage the knowledge assets that exist. These interventions include communities of practice and the correct use of knowledge exit interviews. Organisations can invest in KM programmes that are facilitated by the managers and subject matter experts within each department to create awareness and infuse a learning culture. Any KM intervention is contingent on the effectiveness of the knowledge integration in the organisation. Knowledge sharing: The mean score for knowledge sharing indicated agreement that knowledge was shared within the HR teams. To maintain and expand the sharing that occurs, the types of rewards and incentives available should be a further point of exploration to encourage a KM environment that thrives on its ability to share. The knowledge sharing benefits can no longer be ignored as they become part of key strategic strategies within the business. All success stories should be shared and celebrated. Knowledge is more easily shared with the support of management as they encourage employees to have more informal conversations to generate knowledge. As managers make existing knowledge known and accessible, more people are likely to use it. The ability to share knowledge in a HR environment must be discussed between the management and business units of the organisations in order to realise its significance. For recruitment and selection, for example, HR has to ensure that new recruits are willing to share and co-create knowledge to benefit both themselves and the organisation as a whole. Knowledge challenges: Considering the lack of comprehensive studies offering the holistic picture of KM challenges faced by the South African organisations today, it is not surprising that respondents indicated uncertain responses about knowledge challenges. Employees, who perceive that they may lose their advantage and status by sharing knowledge, will not be forthcoming to share information. HR should enlighten and educate each business unit on the challenges that do exist for them to be made aware of possible bottlenecks to effective KM. Respondents may have indicated uncertain responses to knowledge challenges due to their unawareness and lack of knowledge. As a response, the role of ‘knowledge officer’ and ‘knowledge worker’ has become paramount in order to create a culture where knowledge is shared and timeously available for the right job. Knowledge workers depend on their individual knowledge to solve problems. Human Resource Information Systems: The HRIS dimensions include the use of HRIS and technology. Use of HRIS: Organisations must use the abilities of the HRIS for HR functions that are readily available. Applicant tracking, training and development and compensations are only a few modules that the HRIS can revolutionise for the benefit of the HR department. As

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) respondents indicated uncertainty about the use of HRIS, HR practitioners should collaborate with systems’ users to demonstrate to employees the capabilities and advantages of using the HRIS. Regular workshops, where users’ share their frustrations or share new uses of the HRIS, must be available to the employees to broaden their awareness and knowledge of the uses of the HRIS. Technology: There should be continued investment in technology that facilitates knowledge generation, sharing and updating within departments and across organisations and industries, such as the retail industry. Employees should continue to be trained regarding the technology with the benefits of each system well demonstrated and understood. 4. Conclusion The study has confirmed that HRIS will become a strategic tool for 21 st century organizations in the Human Resource function. The study indicated that there was a statistically positive correlation between knowledge assets and knowledge sharing and the use of HRIS, respectively, but there was a statistical negative correlation between knowledge challenge and the use of HRIS. Secondly, there was a statistically positive correlation between knowledge assets and technology and a statistically significant negative correlation between knowledge challenges and technology and knowledge sharing and technology. References Afiouni, F. (2007). Human resource management and knowledge management: A road map toward improving organisational performance. Journal of American Academy of Business, 11(2). Anonymous. (2009). What are the latest trends in HR Application s Adoption. Hr Focus., 86 (12), 10-11. Armstrong, M. (2000). The name has changed but has the game remained the same? Employee Relations, 22(6), 576-593. Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17 (1), 99-120. Becerra-Fernandez, I., Gonzalez, A. & Sabherwal, R. (2004). Knowledge Management: Challenges, Solutions and Technologies. 1st edition. New Jersey: Pearson Prentice Hall. Bratton, J. & Gold, J. (2003). Human Resource Management: Theory and Practice. 3rd edition. London: Palgrave MacMillan. Broderick, R. & Boudreau, J. W. (1992). Human resource management, information technology and the competitive edge. Academy of Management Executive, 6 (2), 7-17. Desouza, K. C. & Awazu, Y. (2003). Knowledge management: HR management systems can help track and distribute information throughout the organisation - HR Technology. HR Magazine. Edwards, D. (2008). A look at the top Knowledge Management. Knowledge Management Review, 10(6). Ferratt, T. W., Agarwal, R., Brown, C. V. & Moore, J. E. (2005). Human Resource Management Configurations and IT Turnover: Theoretical Synthesis and Empirical Analysis. Information Systems Research, 16(3), 237-255. Garavan, T. N., Gunnigle, P. & Morley, M. (2000). Contemporary HRD research: a triarchy of theoretical perspectives and their prescriptions for HRD. Journal of European Industrial Training, 24 (4), 65-93. Gasco, J. L., Llopis, J. & Gonzales, M. R. (2004). The use of information technology in training human resources. Journal of European Industrial Training, 28 (5), 270-382. Grobler, P., Warnich, S., Carrell, M. R., Elbert, N. F. & Hatfield, R. D. (2006). Human Resource Management in South Africa. 3rd edition. London: Thomson Learning. Kalkan, V. D. (2008). An overall view of knowledge management challenges for global business. Turkey Business Process Management Journal, 14(3), 390-400. Lee, C. S. & Lee, C. H. (2009). Effects of HRM Practices on IT Usage. Journal of Computer Information Systems, 50(2), 83. Malhotra, Y. (2004). Why Knowledge Management Systems Fail? Enablers and Constraints of Knowledge Management in Human Enterprises. American Society for Information Science and Technology Monograph Series. Mayfield, M., Mayfield, J. & Lunce, S. (2003). Human resource information systems: a review and model development. Advances in Competitiveness Research Annual, 11(1), 139-152. McEvily, S. K. & Chakravarthy, B. (2002). The persistence of knowledge-based advantage: an empirical test for product performance and technological knowledge. Strategic Management Journal, 23(4), 285-305. Mohamed, M., Stankosky, M. & Murray. (2006). Knowledge Management and information technology: can they work in perfect harmony. Journal of Knowledge Management, 10(3), 103-116. Ngai, E. W. T. & Wat, F. K. T. (2006). Human Resource Information Systems: a review and empirical analysis. Personnel Review, 35(3), 297-314. Noe, R. A. (2005). Employee Training and Development. International edition. New York: McGraw-Hil. . Pillania, R. K. (2009). Demystifying knowledge management. Business Strategy Series, 10(2), 96-99. Pinnington, A. H., Kamoche, K. & Suseno, Y. (2008). Property in Knowledge Work: an appropriation-learning perspective. Employee Relations, 31(1), 57-80. Robinson, H., Carrillo, P., Anumba, C. & Al-Ghassani, A. (2005). Knowledge management practices in large construction organisations. Engineering, Construction and Architectural Management, 12(5), 431-445. Scarbrough, H. (2004). Knowledge management, HRM and the innovation process. International Journal of Manpower, 24(5), 501-516. Schweyer, A. (2004). Talent Management Systems: Best Practices in Technology Solutions for Recruitment, Retention and Workforce Planning. Canada: HR.com Sekaran, U. (2003). Research Methods for Business: A Skill Building Approach. 4th edition. USA: John Wiley and Sons. Shimerura, E. & Nakamori, Y. (2003). Information Technology and Knowledge Management. Japanese Advanced Institute of Science and Technology, 1-8. Storey, J. (2001). Human Resource Management: A critical text. 2nd edition. London: Thomson Learning. Tannenbum, S. I. (1990). HRIS information: User group implication. Journal of Systems Management, 41(1), 27-32.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Teece, D. J. (2000). Strategies for managing knowledge assets: the role of firm structure and industrial context. Long Ranger Planning, 33(1), 35-54. Toracco, R. J. (2000). A theory of knowledge management in Herling, R. W. and Provo, J. (eds) Strategic perspectives on knowledge, competence and expertise. San Francisco: AHRD/Berrett-Koehler Communications mc, 38-62.

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The Management of change in a changing environment – to change or not to change? Melody Brauns Durban University of Technology South Africa) [email protected] Abstract: Any organisation operating in today's uncertain economic climate needs to know how to manage change in order to survive. For businesses to withstand today’s competitive environment, organisations must frequently examine its processes and performance strategies to better understand what changes need to be made. The pace of change has considerably increased. Change nowadays is a reality for businesses and organisations, those which resist change, risk losing their competitive edge. Change is one of the most significant aspects that affect organisations. The ability therefore to manage change effectively has become vital. It is crucial that organisations understand the implications that change may have on the employees’ culture, history, goals, aims, objectives and so on? Change is essential for business survival and growth. In today’s complex and competitive global business environment, organisations must adjust to changing environmental conditions by constantly introducing changes in order to remain competitive and profitable. Change is important because managers and organisations that do not bring about timely change in appropriate ways are unlikely to survive. Managers and organisations are faced with highly dynamic and complex operating environments. Any organisation that ignores change does so at its own risk. Keywords:change, organisational change, resistance to change, communication, participation, implementation 1. Introduction The pace of change in the life of human beings has increased beyond expectation. This has been fuelled by scientific and technological developmentsthat are alteringthe way we perceivethe world on an almost daily basis. In other words, change is not always a personalchoice, rather an inevitablefact of life, and we need to constantly adapt to keep pace with it. As a result, change needs to occur in any organization to stay a viable entity.In today’s complex and competitive global business environment, organisations must adapt to changing environmental conditions by continuallyintroducingchanges in order to remain competitive and profitable. Organisational design has become one of management’s top priorities due to increased global competitive pressure and because of the increased use of advanced information technology (IT).More importantly, managers nowadays are exploringnew and improved ways of motivating employees and coordinating work activities to improve the value that their organisations can create. Consequently, a wide range of theories have been debated over the last couple of years on how to manage change and organise work. In spite of this, there have not been any lasting answers on how best to manage change. Could it be that there can never be a universal theory of organisational change, because change entailsa movement to some future state that comprises a context and time that remainsundetermined? Change is a necessary way of life and we see change all around us. Change is concernedwith making things different. Defining change: Change, according to the Oxford dictionary means just what the Merriam Webster dictionary defines change as: to make different in some particular way; to make radically different; to give a different position, course, or direction; to with another; to make a shift from one to another. A more specific definition provided by Baker (2007: 2)suggests that “change is continuous” and that it is brought about through a transformation process. It may be made actively in a planned way, or it may seem to occur naturally, with an individual or an organisation adapting or evolving. In any event change is not, in itself, inherently good or bad. Baker (2007: 16) goes on to mention that “some argue that overseeing successful change within an organisation is about good leadership rather than effective management and that it is therefore not a process but an approach”, yet Singh (2009: 4) argues that change is one of the most critical aspects of effective management.Baker (2007:16) suggests however, that even in the smallest organisations, changes are likely to be fundamentally interlinked and even interwoven. Change according to Harigopal (2006: 27) also means “dissatisfaction with the old and belief in the new”. Burke (2002:1) states that significant change means to turn the organisation in another direction, to fundamentally modify the way ‘we do things’, to overhaul the structure and to provide organisational members with a whole new vision for the future. From the above definitions it is clear that change represents a movement from the present state of an organisation to a desired future state. Organisational change and change management : “To improve is to change; to be perfect is to change often” (Winston Churchill 18741965). This opening statement suggests that change may be considered a sign of improvement and progress. At its simplest organisational change can be defined as new ways of organising and working (Dawson, 2003:11). The business dictionary defines organisational change as: “a company or organisation going through transformation, restructuring or reorganising.” According to Mills, Dye and Mills (2009: 4)organisational change can be defined as an alteration of the core aspects (i.e. structure, technology, culture, personnel and leadership) of an organisations operation.Daft (1998: 291) defines organisational change as “the adoption of a new idea or a behaviour by an organisation”.Daft’s definition is echoed by Venkatachalam and Sellappan (2011: 131)who maintain that change is best seen as the adoption of a new idea or behaviour by all organisations. It is a way of altering an existing organisation to increase organisational effectiveness for achieving its objective. Successful organisational change must continually focus on making organisations responsive to major developments like changing customer preferences and technological innovations. We live in a world that is constantly changing. In fact, the ability to engage in meaningful change is critical to an organisations competitive success. To be able to manage change effectively, organisations need to go through a process of identifying possible faults looking at alternatives to the current situation, weighing up the pros and cons of these alternatives, reaching decisions on the future state of the organisation and implementing the necessary changes (Paton and McCalman, 2008:16). Ventris (2004: 2) defines change management as inspirational leadership, detailed planning and rigorous comprehensive implementation. There are many definitions of change management; perhaps the best definition comes from Fincham and Rhodes (2006:525) who maintain that “change management

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) is the leadership and direction of the process of organisational transformation especially with regard to human aspects and overcoming resistance to change”, while Baker (2007: 16) suggest that “managing change is a task that can either be embraced proactively or reactively”. Change management is not about simply following steps because no two changes are exactly alike. The right approach will be specific to the situation. The one-size-fits–all approach is simply not sufficient. Haitt and Creasey (2003: 10) develop this point by observing that it is important to manage people in a changing environment so that business changes are successful and the desired business results are realised. Overall change management is about helping people to get through change. What drives organisational change? Understanding what drives change is critical because the drivers establish the overall context within which organisational change occurs. They create the motivation for change and form the purpose for both those leading the change and those who are targets of the change (Anderson and Ackerman-Anderson,2010: 31). The drivers of change clarify what drives the need for change. It is important to note that we live in an increasingly turbulent world, where environments have become much more competitive; expectations, attitudes and moralities have been transformed. Thus, increased competitiveness is one of the major drivers of change. Universities for example can be viewed as an institution that is constantly undergoing change to attract candidates to apply for their courses, but students also see themselves as ‘paying customers’ and demand more from those who are providing the educational experience. In this respect universities will re-engineer the strategic planning process, focus on quality management, financial accounting and technology. To survive and ultimately prosper an organisation must monitor its internal and external environments. The external drivers refer to those forces that that are outside the organisation and mainly consist of four categories: economic, political, technological and social-cultural. The internal drivers by contrast refer to those forces within an organisation and may include the changing work climate, declining effectiveness of employees, changes in leadership, strained finances, inadequate finances and changing employee expectations (Proehi, 2001:123). Resistance to change: Resistance to change has been extensively researched in the organisational sciences ever since Coch and French (1948) first addressed the issue in their seminal article, “Overcoming resistance to change.” Coch and French (1948) attributed resistance to both individual and contextual factors. During the 1990’s researchers began to challenge traditional views of resistance and began to explore a wider range of responses to change. Until the 1990’s resistance was almost universally accepted. It was treated as an inevitable human characteristic that led to low organisational performance and needed to be overcome by managers, primarily through the application of punishment and rewards (Dent and Goldberg, 1999). More recently researchers have questioned these assumptions. They propose that reactions to change are multidimensional and complex (Merron, 1993). “We may like change and regard it as an essential feature of living: it does not mean that we always welcome it” Fransella (1975:135). Hughes (2006:118) cites Stickland (1998: 37) who describes resistance as “an on-going problem for change managers” who believes that the problem of resistance lies at the heart of most change problems. “As well as potential resistance to change by employees, it is worthwhile acknowledging that organisations may face resistance to change from other groups such as suppliers, distributors, stakeholders and consumers” (Paton and McCalman, (2000:47). According to Baker (2007: 78) key reasons why change is resisted in organisations include: “lack of awareness of the need for change; fear and redundancy; uncertainty of the future need for present skills or their ability to gain required new ones; feelings of comfort with the ‘way things are’; feeling of having to do more with the same resources or for the same pay; lack of understanding or knowledge and fear of being downgraded”. Sengupta, Bhattacharya and Sengupta (2006:3) have suggested that resistance to change may be of two parts – individual change and organisational change. Individuals resist change due to fear of losing their jobs, uncertainty, more work, concerns about competence, they do not like the impact change will have on them, not being consulted, connected to the “old way” of doing things, changes to routine, and they may not like the change itself. Organisations resist change due to fear of the unknown, the new way may not meet their mission and value system, change will make things worse and organisations like what is familiar. Individual resistance to change: Forasmuch as employees are the ones who get the job done, and they the ones who possess the knowledge, skills, tools and experiences, it is clear that organizational changes cannot be achieved without employee support and involvement. Employee acceptance andcommitment are the key factors for successful change. Burke (2002:82) has contributed to the debate on individual resistance to change by pointing out that “some organisational members fight change, constantly denying that the change is necessary”. Burke goes on to say that “others embrace the change readily and move with it, while most people are somewhere in between and move through all the stages”. Interestingly Woodward et al (2004: 162) undertook empirical work which involved surveying individuals experiencing organisational change in the City of London’s financial services sector and recorded the problems individuals encountered in a changing environment.These included:  Increased accountability but reduced resources  A focus on tasks with a corresponding neglect of employees  Feelings of insecurity and uncertainty in roles and direction In support of the above, Sengupta, Bhattacharya and Sengupta (2006:3) state that change leads to insecurity among employees because of its unknown consequences. Employees do not know for certain whether change will bring better prospects. For example because of technological change people may feel threatened due to the fear of obsolescence of skills, less wages and losing the job. Baker (2007: 78) confirms that any change may bring about difficulties for people, however enthusiastic they may be, and a period of organisational instability can be unsettling and worrying for individuals and groups. Baker mentions that people are not – in general – deliberately awkward, and resistance does not in itself make them bad employees. They want to know that change really is going to be better for them and the organisation. “The ways in which resistance is handled will vary depending on whether it is only a few people who are ‘against’ the changes, or if it is in fact a majority of those who need to be convinced, and why people are resisting what is proposed’. Whether the numbers involved are few or many, it is important to listen to criticisms and not belittle resistance; those who oppose the changes may have good points to make, if allowed to make them” (Baker, (2007: 78). Hughes (2006: 108) suggests that “organisational change present opportunities for learning”. This is echoed by Carnall (2003:225) who warns that “achieving change is one thing – learning from the process of change is an entirely different thing”. Learning appears to be a prerequisite of change, and change, a

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) prerequisite of learning, as suggested by Hughes (2006:194), who goes on the say that “the ability to learn may move individuals away from the anxiety of change”. When change is not successful it is described as failure. However there is potential in learning from change management failure, yet talking and writing about failure is engaging with an organisational taboo. Organisational resistance to change: Resistance to change is an important, but under examined characteristic thataffects both employer and employee.Here we follow Sengupta, Bhattacharya and Sengupta (2006:3) who observe that organisational change may bring some potential threat to the organisational power of some people. An organisational change, like a move to a more luxurious office, can be warmly accepted simply because the change is seen to have obvious advantages. However, not all changes fit into this category. When changes create uncertainty and ambiguity, resistance to change is likely to emerge. In essence, the resistance is not towards the change in itself, but towards the personal loss, or the possibility to it, that people believe will accompany the change (McKenna, 2000). Resistance to change can then be described as the behaviours acted out by change recipients in order to slow down or terminate an intended organisational change (Greenberg and Baron, 2002) or as the tendency for organisational employees to be unwilling to go along with changes (Lines. 2004: 193-215). Managing change successfully: Successful change management can be both intense and challenging. When change is well-planned, the process should be exciting, rewarding and ultimately successful (Ventris 2004:5). Graetz, Rimmer, Smith and Lawrence (2011: 4) stipulate that managers of change need to find ways of getting their employees on board and moving towards to same goal. Failure to do so makes implementation efforts difficult. It is possible to make an organisation worse than it was before the attempted change. Change can also fail due to organisational members’ resistance or lack of motivation towards the challenges of change. No matter how cleverly crafted the plan or how carefully prepared the strategy, organisational change is only successful as far as its implementation. This implies that change managers are pivotal to the success of organisational change because they not only devise the content of change, but also formulate and adjust the method of its introduction. Pettigrew et al (1993:6) maintain that “there are no leading rules with regard to managing change; rather it involves linking action by people at all levels of the business”. Below are some points that Pettigrew et al propose for successfully managing strategic and operational change.     

Environmental assessment - Organisations, at all levels, need to develop the ability to collect and utilise information about their internal and external environments; Leading change - This requires the creation of a positive climate for change, the identification of future directions and the linking together of action by people at all levels in the organisation; Linking strategic and operational change - This is a two-way process of ensuring that strategic decisions lead to operational changes and that operational changes influence strategic decisions; Human resource as assets and liabilities - Just as the pool of knowledge, skills, and attitudes possessed by an organisation is crucial to its success, it can also be a threat to the organisation’s success if the combination is inappropriate or managed poorly; and Coherence of purpose - This concerns the need to ensure that the decisions and actions that flow from the above four factors complement and reinforce each other.

Sometimes change tends to be so rapid that there is no time to adjust before more change takes place. Yet, it is the ability to plan for, implement and manage change that seems to be the core factor that separates successful organisations from unsuccessful ones. Successful organisations do not believe in change per se but in proactive change, reinventing themselves as and when necessary (Harigopal, 2006: 28). Kotter (1996: 33-145) considered the guru of organisational change management identifies eight steps for successful change management: 1. Establish a sense of urgency - inspire people to move, make objectives real and relevant; 2. Create a guiding team - get the right people in place with the right emotional commitment, and the right mix of skills and levels; 3. Develop a vision and strategy - get the team to establish a simple vision and strategy, focus on emotional and creative aspects necessary to drive service and efficiency; 4. Communicate the change vision/buy-in - Involve as many people as possible, communicate the essentials, simply, and to appeal and respond to people's needs. De-clutter communications - make technology work for you rather than against; 5. Empower employees for action - Remove obstacles, enable constructive feedback and lots of support from leaders - reward and recognise progress and achievements; 6. Create short-term wins - Set aims that are easy to achieve - in bite-size chunks. Manageable numbers of initiatives. Finish current stages before starting new ones; 7. Consolidating gains and producing more change - Foster and encourage determination and persistence - on-going change encourage on-going progress reporting - highlight achieved and future milestones; and 8. Anchoring new approaches - Reinforce the value of successful change via recruitment, promotion and new change leaders. Weave change into culture. 2. Conclusion We live in a world where ‘business as usual’ means change. Organisations nowadays need to change the way they do business in order to survive in an increasingly dynamic environment. Whether the organisation is going through a major or minor change it is common that individuals feel intimidated and nervous. Change will only be successful when individuals embrace change and are willing to change along with the objectives of the organisation.Handled correctly, using known and tested change management techniques, change can be brought about successfully; achieving set goals and objectives.Resistance to change is the most cited implementation problem.Since a person’s actions and intentions are bound up with the emotions he or she has, the negative emotions experienced by employees in response to change are of influence on their actions and intentions. This is why resistance to change occurs. In order for change to be successful, organisations have plan carefully and build the proper foundations,then implementing change can be much easier. To sum up

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Charles Darwin (1809-1882) states “it’s not the strongest species that survive, nor the most intelligent but the ones most responsive to change”. References Anderson, D. & Ackerman-Anderson, L. (2010). Beyond Change Management: How to achieve breakthrough results through conscious change leadership. San Francisco: Pfeiffer Publishers Baker, D. (2007). Strategic Change Management in Public Sector Organisations, Oxford: Chandos Publishing Burke, W. (2002). Organisation Change: Theory and Practice. California: Sage Publications Carnall, C. A. (2003). Managing Change in Organisations, 4th ed. Harlow: Prentice Hall Daft, R. L. (1998). Organisation Theory and Design. West Publishing Company Dawson, P. (2003). Understanding Organisational Change. The contemporary experience of people at work. Thousand Oaks, California: Sage Publications [online]. Available at: http://books.google.co.za/books?id=Vwq2Hr7CzIoC&pg=PA11&dq=definition+of+organisational+change&hl=en&sa=X&ei=o OQRUpnSD4qV7Qap7IGoDw&ved=0CE8Q6AEwBDge#v=onepage&q=definition%20of%20organisational%20change&f=false [Accessed 19 August 2013] Fincham, R. & Rhodes, P. (2005). Principals of Organisational Behaviour. Oxford: Oxford University Press Fransella, F. (1975). Need to Change? London, Methuen Essential Psychology Series Graetz, F., Rimmer, M., Smith, A. & Lawrence, A. (2011). Managing Organisation Change, 3rd ed. Australia: John Wiley and Sons [online]. Available at: http://books.google.co.za/books?id=Xl4oJU95SsC&printsec=frontcover&dq=change+management&hl=en&sa=X&ei=4I4UUrakLIythQeprIDQDA&ved=0CFUQ6AEwC DgU#v=onepage&q=change%20management&f=false [Accessed 21 August 2013] Greenberg, J. & Baron, R. A. (2002). Behavior in Organizations, Prentice Hall, New Jersey. Haitt, J. M. & Creasey, T. J. (2003). Change Management: the people side of change. Colorado: Prosci Research [online]. Available at: http://books.google.co.za/books?id=zQTy8mk8kZYC&printsec=frontcover&dq=the+process+of+change+management&hl=en &sa=X&ei=654UUpDwFIjetAa7GoDA&ved=0CF8Q6AEwCQ#v=onepage&q=the%20process%20of%20change%20managemen t&f=false [Accessed 23 August 2013] Harigopal, K. (2006). Management of Organisational Change: Leveraging transformation. California: Sage Publications [online]. Available at:http://books.google.co.za/books?id=wAow0yI7cPIC&printsec=frontcover&dq=what+is+organisational+change&hl=en&sa= X&ei=oWP3UaWAFoiJhQeOh4HgCg&ved=0CD8Q6AEwAQ#v=onepage&q=what%20is%20organisational%20change&f=false [Accessed 19 August 2013] Hughes, M. (2006). Change Management: A critical perspective. London: Cromwell Press Kotter, J. P. (1996). Leading Change: An action plan from the world’s foremost expert on business leadership. United States of America: Harvard Business School Press Lines, R. (2004). Influence of participation in strategic change: resistance, organisational commitment and change goal achievement. Journal of change management, 4(3), 193-215. McKenna, E. F. (2000). Business Psychology and Organisational Behaviour: a Student’s Handbook, 3rd ed.New York: Psychology Press Mills, J. H., Dye, K. & Mills, A. J. (2009). Understanding Organisational Change. New York: Routledge {online]. Available at: http://books.google.co.za/books?id=OpsiOSigPJ8C&printsec=frontcover&dq=organizational+change&hl=en&sa=X&ei=fvQIUp km8MHsBrWlgLgK&ved=0CGUQ6AEwCTgU#v=onepage&q=organizational%20change&f=false [Accessed 23 August 2013] Paton, R. A. & McCalman, J. (2000). Change Management: A guide to effective implementation, 2nd ed. London: Sage Publications Paton, R. A & McCalman, J. (2008). Change Management: A guide to effective implementation, 3rd ed. London: Sage Publications Pettigrew, A. M. & Whipp, R. (1993). Understanding the Environment:– Managing Change. London: Paul Chapman Publishing Proehi, R. A. (2001). Organisational Change in the Human Services. California: Sage Publications Sengupta, N., Bhattacharya, M. S. & Sengupta, R. N. (2006). Managing change in organisations. New Delhi: Prentice Hall Publications [online]. Available at: http://books.google.co.za/books?id=JkwgzACX6N4C&pg=PA3&dq=resistance+to+change+in+organisations&hl=en&sa=X&ei= ORoSUoy9Os6S7Aa49IGIBw&ved=0CEgQ6AEwBQ#v=onepage&q=resistance%20to%20change%20in%20organisations&f=fa lse [Accessed 19 August 2013] Singh, K. (2009). Organisational Change and Development. New Delhi; Excel Printers [online]. Available at: http://books.google.co.za/books?id=rQLjYrAcKWkC&printsec=frontcover&dq=organisational+change&hl=en&sa=X&ei=5OsI UqDaAZOxhAfs5IC4CQ&ved=0CE4Q6AEwBQ#v=onepage&q=organisational%20change&f=false [Accessed 21 August 2013] Stickland, F. (1998). The Dynamics of Change. London: Routledge Venatachalam, T. A. & Sellappan, C. M. (2011). Business Process. New Delhi: Pearl Offset Press [online]. Available at: http://books.google.co.za/books?id=H0ZtCFG09qsC&pg=PA131&dq=definition+of+organisational+change&hl=en&sa=X&ei= DNkRUr2QB8rB7Aa2r4G4DA&ved=0CFoQ6AEwBjgK#v=onepage&q=definition%20of%20organisational%20change&f=false [Accessed 19 August 2013] Ventris, G. (2004). Successful Change Management. New York: Continuum International Publishing Woodard, S. & Hendry, C. (2004). Leading and coping with change. Journal of Change Management, 4(3), 155-183

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Does Tourism-Led-Growth Valid? Evidence from Heterogeneous Panel Causality in Countries with Different Income-Level *Reza

Sherafatian-Jahromi, Mohd Shahwahid Haji Othman University Putra Malaysia, Malaysia *[email protected]

Abstract: The main aim of this paper is investigating the causal relationship between tourism expansion and economic growth in countries with a different income level. For this purpose, 143 countries are considered and classified into four groups based on their income, including high-income, upper-middle-income, lower-middle-income and low-income countries. These four groups of countries are studied separately as well as global scale from 1995-2009. Levin, Lin, and James Chu (2002) panel unit root test is indicated that the data series are stationary at their first difference, so cointegration test was applied to prevent the spurious regression. Based on Kao (1999) cointegration test results, it could be concluded that long run relationship existed between tourism expansion and economic growth in all groups of countries, with the exception of low-income level ones. Finally, when applying the heterogeneous panel causality test, introduced by Dumitrescu and Hurlin (2012), based on Granger (1969) test, it was found that there is a bidirectional causality between tourism expansion and economic growth when all countries considered together as well as when different groups of countries is considered. It is recommended to concentrate more on policies that increase international tourism to improve the economic growth. Keywords: Tourism, Economic Growth, Heterogeneous Panel Causality 1. Introduction Nowadays, the importance of tourism is recognized by all countries over the world. It is believed that, this industry could stimulate many economic variables such as employment, balance of payment and economic growth. According to World Tourism Organization (WTO), it is expected that international tourism arrival and tourism receipts reached to 1.6 billion people and US$200 billion, respectively, by the year 2020. Previous studies have used a variety of methods, variables and case studies to examine the relationship between tourism and economic growth. In case of panel data, Lee and Chang (2008) applied the heterogeneous panel cointegration technique to investigate the long-run comovements and causal relationships between tourism development and economic growth in OECD and non-OECD countries for the 1990–2002 period. The findings of this study showed that in the long run, there is a unidirectional causality relationship from tourism development to economic growth in OECD countries, and bidirectional relationships in non-OECD countries. More recently, Samimi, Sadeghi, and Sadeghi (2011) used P-VAR approach to study the relationship between tourism development and economic growth. This study, in which only 20 developing countries considered during 1995-2009, revealed the bilateral causality and long run positive relationship between the series. Some studies examined the causal relationships between tourism and growth for one country. For instance, Dritsakis (2004) investigated the impact of tourism expansion in the long run economic growth in Greece, using the multivariate autoregressive VAR model, found one cointegrated vector among the interested variables including, real gross domestic product, real effective exchange rate and international tourism earnings. Moreover, Granger causality test applied based on error correction model (ECM), revealed the strong Granger causality between international tourism earning and economic growth during 1960-2000. Khalil, Kakar, and Malik (2007) also showed bidirectional causality between economic growth and tourism in Pakistan. Furthermore, they concluded that in short run strong relationship exists among tourism expansion and economic development. Kim, Chen, and Jang (2006) also tested this relationship in the case of Taiwan. A Granger causality test was performed following the cointegration approach to reveal the direction of causality between economic growth and tourism expansion. Test results indicated a long-run equilibrium relationship and further a bi-directional causality between the two factors. In other words, in Taiwan, tourism and economic development reinforce each other. Interestingly, in some studies uni-directional causality approved, from tourism to economic growth. Lau, Oh, and Hu (2008) examined the comovements and the causality relationship between tourist arrivals and economic growth in Sarawak, which is a sector in Malaysia, during the period of 1972 to 2004. The empirical evidence clearly shows that the long-run causality running from tourist arrivals to economic growth in the estimation period. Kaplan and Çelik (2008) investigated the relationship between tourism expansion and economic performance over the period of 1963-2006 in Turkey. It is determined that there is one cointegrating vector among real output, real tourism receipt and real effective exchange rate and tourism has a long-run effect on output. In addition, their results showed the existence of one-directional causality, indicating that tourism and exchange rate causes output. Gunduz * and Hatemi-J (2005) used a bootstrap causality test with leveraged adjustments as introduced by Hacker and Hatemi-J (2003), to test the tourism led growth hypothesis in Turkey, showed that this hypothesis could be supported in this case. Kreishan (2010) employed annual data of Jordan from 1970 to 2009, documented that tourism development has a positive impact on economic development in the long run. Moreover, uni-directional causality existed between tourism earning and economic growth, running from tourism to economic growth. Granger causality based on VECM model applied by Zortuk (2009), to test the relationship between tourism expanding and economic growth, documented that in Turkey uni-directional causality exist between these variables running from tourism expansion to economic development. More recently, Mishra, Rout and Mohapatra (2011) tested the causal relationship between tourism and economic growth in India, by applying VECM model, during the 1978-2009, showed unidirectional causality from tourism activities to economic growth. It must be mentioned that in some cases uni-directional causality confirmed from growth to tourism and more interestingly, in some cases there is no causality between tourism and growth. Study of Oh (2005) could be mentioned in which the causal relations between tourism growth and economic expansion investigated for the Korean economy by using Engle and Granger two-stage approach and a bivariate Vector Autoregression (VAR) model. In this study two principle results emerged. First, the results of a cointegration test indicated that there is no long-run equilibrium relation between two series. Second, the outcomes of Granger causality test implied the one-way causal relationship of economic-driven tourism growth. The hypothesis of tourism-led economic growth is not held in the

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Korean economy. Tourism-led-growth hypothesis also tested in Katircioglu (2009) studied in case of turkey during 1960-2006, by applying the bound test and Johansen approach. The finding of this study confirmed that variables are not cointegrated and tourism-led growth hypothesis could not be supported. Panel data were used by Sequeira and Campos (2007) for different sub-sample groups to show how variables linked with tourism could influence the economic growth. Their findings illustrated that these variables are not significantly related to economic growth and higher growth of countries is not related to tourism. As mentioned above, previous studies have not reached to a consensus about the causal relationship between tourism expansion and economic growth. So, it is important to study more on this topic. For this purpose, at first long-run relationship between tourism expansion and economic growth will examine and then causality between series investigate. The present paper has contributed to the previous studies in two distinct ways. (i) This is the first ever research that uses 143 countries in different income groups to investigate the relationship among tourism expansion and economic growth. (ii) Use of heterogeneous panel causality to investigate the nexus is pioneering. The rest of this paper is organized as follows. In section 2 data and methodology are described. Section 3 represents the results and section 4 belongs to the conclusion. 2. Data and Methodology In this study two series are considered for 143 countries to examine the causal relationship between tourism expansion and economic growth. Real Gross Domestic Product (GDP) and tourism arrivals are those series which are employed during 1995 to 2009, as a proxy of economic growth and tourism expansion, respectively. According to World Development Indicator database, our countries divided into four groups based on their income level as follows; low income, lower middle income, upper middle income and high income countries. These four groups of countries studied separately as well as global scale to find the causal relationship between tourism expansion and economic growth according to the income level. All data are captured from World Development Indicator Database (World Bank) and transformed to their natural logarithms. List of the countries is presented in appendix. To find the causal relationship between interested series, new panel causality test will be applied that introduced by Dumitrescu and Hurlin (2012). They have proposed a homogenous non-causality test, in which there is no causal relationship between variables for any of the units under the null. It must be mentioned that this test is different from Holtz-Eakin, Newey, and Rosen (1988). Alternative hypothesis in Dumitrescu and Hurlin (2012) test is specified based on heterogeneous non causality, while in Holtz-Eakin et al. (1988) homogenous non causality is examined against the homogenous causality. Another difference is related to the heterogeneity of dynamics of the variables across the cross section units which is insensitive to the existence of causal relationship. Furthermore, this test could be applied for unbalanced panel and also different lag orders could be used in the autoregressive process. Consider two series like GDP and TOUR . The gross domestic product is shown by GDP and tourism arrival is represented by TOUR . Following autoregressive distributed lag could be investigated for individuals in

N

T periods, L

L

l 1

l 1

GDPit  1i    i( l ) GDPit l    i(l )TOUR it l eit L

L

l 1

l 1

(1)

TOUR it  2i   i( l )TOUR it l    i( l ) GDPit l eit

(2)

In this equation, it is assumed that individual residuals are independently and normally distributed. They are also independently distributed across groups and finally, individual variables are covariance stationary. The null hypothesis of homogeneous non causality test by considering the heterogeneity of the regression model. The causal relationship for the equation (1) is defined as follows,

H 0 : i  0, i  1,..., N and the alternative is, H1 : Which indicates that under

i  0, i  1,..., N1 i  0, i  N1  1, N 2  1,..., N

H 1 there are some individuals with no causality from tourism expansion to economic growth.

In the second equation, the null hypothesis is

H 0 :  i  0, i  1,..., N , with the alternative;

(3) H1 :  i  0, i  1,..., N1  i  0, i  N1  1, N 2  1,..., N In this case, H 1 illustrates that there are some individuals with no causality from economic growth to tourism expansion. The average Wald statistics is,

WN ,T 

1 N

N

W i 1

In this equation

(4)

i ,T

Wi ,T illustrates

the individual Walunittistics for each units. When individual Wald statistics are identically and

independently distributed, the following standardized statistics obtained,

Z N ,T 

d N (WN ,T  K ),  N (0,1) T , N  2K

(5)

Dumitrescu and Hurlin (2012) depicted that when there is a fixed follows,

T dimension and T  5  2K , the standardized statistics is as

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ZN 

N   N WN ,T  N 1  E (Wi ,T ) d i 1  ,  N (0,1) N N  N 1 i 1Var (Wi ,T )

(6)

3. Results Descriptive statistics of our series are depicted in table (1). As it can be seen, both series have a positive sample mean in all groups of countries. Positive skewness shows that the series is right-skewed and negative value of this statistic indicated the left-skewed series. Kurtosis, also, is a good statistic to show the shape of the distribution. When this measure is above three it means that the series has a peaked distribution and when it is lower than three it means that series has a flat distribution. It must be mentioned that normal distribution kurtosis is three. Jarque-Bera results show that the null could be rejected in most cases and the normality is not sustained. Table 1- Descriptive Statistics Overall Sample LGDP Mean 10.13 St. Dev. 1.06 Skewness 0.13 Kurtosis 2.78 Jarque-Bera 10.81 Prob. 0.00 LTOUR Mean 5.87 St. Dev. 0.91 Skewness -0.20 Kurtosis 2.88 Jarque-Bera 16.76 Prob. 0.00

High-income

Upper-middle income

Lower-middle income

Low-income

10.92 11.07 0.09 2.06 21.07 0.00

10.15 1.07 -0.49 2.97 27.54 0.00

9.72 0.90 -0.02 2.48 6.74 0.03

9.49 0.45 0.80 3.51 37.39 0.00

6.54 0.75 -0.38 2.63 16.96 0.00

5.97 0.85 -0.70 4.39 111.28 0.00

5.49 0.82 -0.35 2.76 14 0.00

5.16 0.55 0.07 2.77 0.94 0.62

Before testing the causal relationship between series, the existence of the long-run relationship between them must be checked. For this purpose, unit root and cointegration tests are employed. Findings of these tests are represented separately for different groups of countries, based on their income level. At first, to test the stationary of the variables, Levin, Lin, and James Chu (2002) panel unit root test applied. Table (2) shows the results of this test for GDP and tourism in countries with a different income level. Based on the results of this test, null hypothesis cannot be rejected at level and both variables have a unit root. Considering the first difference of GDP and tourism, it could be possible to reject the null and concluded that both variables are stationary. So, GDP and tourism are stationary at their first difference and integrated at order 1. Because of using non stationary variables, cointegration test must applied to verify the long-run relationship between variables. For this purpose, Kao (1999) cointegration test is used, and their findings represented in table (2) to determine if GDP and tourism are cointegrated. As it can be seen, when whole countries considered together, null hypothesis could be rejected at 1% level. It means that there is cointegration between series. Such a situation exists for upper middle income countries. While, in lower middle income and high income countries our series are cointegrated at 5 and 10 percent, respectively. It must be mentioned that based on the findings of this test in low income level countries null hypothesis could not be rejected and series are not cointegrated. In other words, long-run relationship between these variables is not approved and there is not any significant relationship between tourism expansion and economic growth in the long run. The last table, illustrates the results of panel causality test. According to this table, null hypothesis could be rejected in all cases at 1% level and there is a bidirectional causality between tourism expansion and economic growth. It means that tourism expansion could cause economic growth and these groups of countries could enhance their economic growth by strengthening the tourism industry. On the other hand, economic growth also could cause the tourism expansion by having higher potential to improve the facilities for attracting more tourisms. 4. Conclusion In this paper, causal relationship between tourism and growth is examined in countries with different income levels. For this purpose, 143 countries are considered and classified into four groups based on their income. At first, panel unit root test is applied to investigate the stationarity of variables. Results of Levin, Lin, and James Chu (2002) test indicated that both series are integrated at order one in all groups of countries. So, to prevent the spurious regression Kao (1999) cointegration test is employed which indicated that there is a long run relationship between tourism and growth in all groups of countries with the exception of low income level ones. Finally, Dumitrescu and Hurlin (2012) panel causality test is employed to develop the causal relations between tourism and growth. Our findings illustrated that there is a two-way causal relationship between tourism expansion and economic growth in all groups of countries. As a result, tourism led growth hypothesis is valid in countries with high income level, upper middle income level and lower middle income level and they could increase their economic growth by investigating more in the tourism industry. Based on the absence of long-run relationship between economic growth and tourism expansion in low income level countries it could be concluded that the tourism led growth hypothesis is not revealed in this group of countries.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Table 2: Panel Unit Root Test Results Variables LGDP Level

First Difference Overall Sample (N=143) 43.11 -8.81 (1.0000) (0.0000)* High-Income 14.09 -6.98 (N = 37) (1.0000) (0.0000)* Upper-middle Income 24.53 -7.24 (N = 45) (1.0000) (0.0000)* Lower-middle Income 33.50 -2.82 (N = 40) (1.000) (0.0024)* Low Income 14.60 -2.40 (N = 21) (1.000) (0.0081)* Figures in parenthesis are p-values. *Significant at 1% level

LTOUR Level 15.93 (1.0000) 5.86 (1.0000) 12.83 (1.0000) 13.50 (0.8368) 5.21 (0.9630)

First Difference -29 (0.0000)* -15.04 (0.0014)* -16.83 (0.0000)* -11.86 (0.0000)* -14.31 (0.0000)*

Table 3: Kao cointegration test Kao Test Statistic Overall Sample -2.82 (0.00)* High Income Countries -1.42 (0.07)*** Upper Middle Income Countries -3.50 (0.00)* Lower Middle Income Countries -1.96 (0.02)** Low Income Countries -0.55 (0.28) Figures in parenthesis are p-values. *Significant at 1% level **Significant at 5% level, *** Significant at 10% level Table 4- Causality Test Result Total Countries (N=143) High Income (N=37) Upper Middle Income (N=45) Lower Middle Income (N=40) Figures in parenthesis are p-values.

Tourism Growth Z statistic 13.1133 (0.000) 3.6164 (0.000) 2.3598 (0.0183) 3.3260 (0.000)

Growth Z statistic 13.1133 (0.000) 4.1818 (0.000) 9.9801 (0.000) 2.6869 (0.000)

Tourism

References Dritsakis, N. (2004). Tourism as a long-run economic growth factor: an empirical investigation for Greece using causality analysis. Tourism Economics, 10(3), 305-316. Dumitrescu, E. I. & Hurlin, C. (2012). Testing for Granger non-causality in heterogeneous panels. Economic Modelling, 29(4), 1450-1460. doi: 10.1016/j.econmod.2012.02.014 Granger, C. W. J. (1969). Investigating causal relations by econometric models and cross-spectral methods. Econometrica: Journal of the Econometric Society, 424-438. Gunduz, L. & Hatemi-J, A. (2005). Is the tourism-led growth hypothesis valid for Turkey? Applied Economics Letters, 12(8), 499-504. doi: 10.1080/13504850500109865 Hacker, R. S. & Hatemi, J. A. (2003). Tests for causality between integrated variables using asymptotic and bootstrap distributions. Department of Statistics, Lund University, Sweden. Holtz-Eakin, D., Newey, W. & Rosen, H. S. (1988). Estimating vector autoregressions with panel data. Econometrica: Journal of the Econometric Society, 1371-1395. Kao, C. (1999). Spurious regression and residual-based tests for cointegration in panel data. Journal of econometrics, 90(1), 1-44. Kaplan, M. & Çelik, T. (2008). The impact of tourism on economic performance: the case of Turkey. The International Journal of Applied Economics and Finance, 2(1), 13-18. Katircioglu, S. T. (2009). Revisiting the tourism-led-growth hypothesis for Turkey using the bounds test and Johansen approach for cointegration. Tourism Management, 30(1), 17-20. doi: 10.1016/j.tourman.2008.04.004 Khalil, S., Kakar, M. K. & Malik, A. (2007). Role of Tourism in Economic Growth: Empirical Evidence from Pakistan Economy [with Comments]. The Pakistan Development Review, 985-995. Kim, H. J., Chen, M. H. & Jang, S. S. (2006). Tourism expansion and economic development: The case of Taiwan. Tourism Management, 27(5), 925-933. doi: 10.1016/j.tourman.2005.05.011 Kreishan, F. M. M. (2010). Tourism and economic growth: The case of Jordan. European Journal of Social Sciences, 15(2), 63-68. Lau, E., Oh, S. L. & Hu, S. S. (2008). Tourist arrivals and economic growth in Sarawak. Lee, C. C. & Chang, C. P. (2008). Tourism development and economic growth: A closer look at panels. Tourism Management, 29(1), 180192. doi: 10.1016/j.tourman.2007.02.013 Levin, A., Lin, C. F. & James-Chu, C. S. (2002). Unit root tests in panel data: asymptotic and finite-sample properties. Journal of econometrics, 108(1), 1-24. Mishra, R. & Mohapatra. (2011). Causality between Tourism and Economic Growth: Empirical Evidence from India. European Journal of Social Sciences, 18(4).

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Oh, C. O. (2005). The contribution of tourism development to economic growth in the Korean economy. Tourism Management, 26(1), 3944. doi: 10.1016/j.tourman.2003.09.014 Samimi, A. J., Sadeghi, S. & Sadeghi, S. (2011). Tourism and economic growth in developing countries: P-VAR approach. Middle-East Journal of Scientific Research, 10(1), 28-32. Sequeira, T. N. & Campos, C. (2007). International tourism and economic growth: A panel data approach Advances in Modern Tourism Research (pp. 153-163): Springer. Zortuk, M. (2009). Economic Impact of Tourism on Turkey’s Economy: Evidence from Cointegration Tests. International Research Journal of Finance and Economics, 25, 231-239.

Appendix High Income Countries (37) from 1995-2009; Australia, Austria, Belgium, Canada, Denmark, Estonia, France, Germany, Greece, Italy, Japan, Luxembourg, Korea, Netherlands, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, United Kingdom, United States, Bahrain, Barbados, Bermuda, Croatia, Cyprus, Kuwait, Liechtenstein, Macao SAR, Malta, Monaco, Oman, Puerto Rico, Singapore, Trinidad and Tobago. Upper Middle Income Countries (45) from 1995-2009; Algeria, Angola, Antigua and Barbuda, Argentina, Belarus, Botswana, Brazil, Bulgaria, Chile, China, Costa Rica, Colombia, Cuba, Dominica, Dominica, Dominican, Ecuador, Grenada, Iran, Jamaica, Jordan, Latvia, Lebanon, Lithuania, Macedonia, Malaysia, Maldives, Mauritius, Mexico, Namibia, Palau, Panama, Peru, Romania, Russian Federation, Seychelles, South Africa, St. Lucia, St. Vincent and the Grenadines, Suriname, Thailand, Tunisia, Turkey, Tuvalu, Uruguay, Venezuela. Lower Middle Income (40) from 1995-2009; Albania, Armenia, Belize, Bhutan, Bolivia, Cape Verde, Congo, El Salvador, Egypt, Fiji, Georgia, Ghana, Guatemala, Guyana, Honduras, Indonesia, India, Kiribati, Lao PDR, Marshall Islands, Mauritania, Moldova, Mongolia, Morocco, Nigeria, Nicaragua, Pakistan, Philippines, Paraguay, Samoa, Sri Lanka, Sudan, Swaziland, Syrian Arab Republic, Tonga, Ukraine, Uzbekistan, Vanuatu, Vietnam, Yemen, Zambia. Low Income Countries (21) from 1995-2009; Benin, Bangladesh, Burkina Faso, Burundi, Central Africa, Chad, Congo, Eritrea, Gambia, Guinea, Guinea-Bissau, Haiti, Kenya, Kyrgyz Republic Madagascar, Malawi, Mali, Niger, Nepal, Sierra Leon, Tanzania, Togo, Uganda, Zimbabwe.

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An analysis of Malaysian Edition of Foreign Magazine in Portraying Women issue *Ponmalar

N Alagappar1, Lavanya Selvaratnam2 of Malaya, Kuala Lumpur 2UCSI University, Kuala Lumpur *[email protected]

1University

1. Introduction Most scholarly research on sex role images has centred on the depiction of women on television and advertisement (Demarest & Garner, 1992).Newspaper and magazines have apparently been more reflective of changing images of women. Today, magazines represent a powerful and pervasive influence. It can be argued that women magazines collectively form an encyclopaedia of insecurities about health, lifestyle, looks, body image, success, material wealth and relationship1. Magazines are an immensely popular cultural form. In the last 20 years there has been an influx of women magazines in the market and its fast becoming a popular media that is widely read by women of all ages. Most magazines have a specific target audience, often a particular age and gender group attached to a hobby, interest or lifestyle choice2. Magazines unlike books offer “light reading” thus sustaining the interest of the reader and has a relatively longer shelf life. A survey by Synovate Malaysia in 2005 revealed that for a 12-month readership of magazines, 51% of women read one or more of the women’s or home magazine, the results for magazine readership reveal a far larger audience than was previously known3. It’s difficult to estimate the precise numbers of readers of magazine, since magazines are often handed on by the purchaser to read by family and friends. Added to this is the opportunity to browse magazines in public places such as doctor’s waiting rooms which makes it even more difficult to accurately assess the circulation figure, but unlike newspapers, which become out of date the day after publication, magazine have relatively long shelf-life. Magazines are perhaps one of the most powerful educational forces in society. Women and teenage girls are becoming dependent on these magazines for guidance and advice which only reinforces their belief on what is accepted by society. For many women and teenage girls, these magazines play an important socializing function through the stories they tell in their contents and worth, love and sexuality, popularity and normalcy. In a mediated society, audience receives more information from the media rather than from textbooks, schools and family about sex. It is believed that the messages in these magazines are primarily used by readers in the identity development and gender socialization process (Arnett, 1995). The advertisements in the magazine act a socializing agent that influence our attitudes, values, beliefs and behaviours (Kang, 1997). They shape our ideas of what it means to be male and female in this society (Lindner, 2004), especially the appropriate behaviour and appearance for both men and women.In the case of the media, there has been a divided view whether the media has a moral duty over the society (Haryati, 2008). Demarest & Garner (1992) study on the representation of women’s role in women’s magazines over the past 30 years revealed that women in traditional sex role models still dominate the pages of most women’s magazine. In Stankiewicz&Rosselli (2008) study of women in print advertisement’s found that women are frequently portrayed as sex objects and sometimes portrayed as victims in media images. The pervasiveness of media images of highly sexualized women, but not men, is hypothesized to maintain men’s dominance by desiring women’s bodies as property that can be evaluated, ogled, and touched at the whim of men’s desire (Kilbourne, 1999). Silverstein and Silverstein (1974) indicated that ifwomen, for instance, are improperly depicted in advertisements, it is detrimental tosociety because it perpetuatesmisconceptions. In a cultural climate defined by increasing possibilities, in which, women have earned advance degree and have infiltrated careers traditionally dominated by men, society has demanded that women become servants to popular images of beauty and sexuality (Stankiewicz&Rosselli, 2008). This paper examines how women issues are portrayed in local edition of a foreign magazine in terms of choice of content and advertisement. Various forces, such as women’s magazine, promotional materials and other media, have mitigated women’s values and in turn deepened the roots of modern “women’s identities” (Moore, 1991). What do these publications communicate to women about gender and gender roles? There is indeed a relationship between the way women are portrayed in advertising and people’s ideas about how women are supposed to behave and roles they are supposed to occupy within society (Lindner, 2004). How do these representations affect women’s role in organizations? Results of a study by Kilbourne (1990) revealed that people, after being exposed to advertisements that depict women in stereotypical roles, showed more negative attitude towards women, especially concerning their managerial skills, than after being exposed to advertisements that depict women in professional roles that require such skills. These results suggest that there is indeed a relationship between the way women are portrayed in advertising and people’s ideas about how women are supposed to behave and the roles they are supposed to occupy within society (Lindner, 2004). The significance of this study is that it brings in to question some of the basic assumptions from the feminist theory related to representation gender and gender roles. Because advertising is such a crucial factor in forming our perceptions of gender roles, systematic analyses of print advertisements are necessary to gain better understanding of the way women are portrayed. 2. Methodology& Results The objective of the study was to examine the depiction of women in a 21st century magazine along two dimensions: (1) representation of women in terms of contents and (2) the advertisement which portrays in some way the needs of the women.Advertisements provide a gauge for what is desirable and what is normal (Stankiewicz&Rosselli, 2008). For the purpose of this study, we selected, The Malaysian’s Women Weekly, a 21st centurywomen´s lifestyle magazine, launched in November 2000. It’s a monthly magazine which is broadly targeted at Malaysian women aged 25 to 39 of years whoare an affluent generation of who have high expectations for their lives. The magazine is relevant to today’s modern working woman, offers solutions and ways to make the modern working mother’s life easier and better. The magazine is a family-oriented with a glamour title covering fashion, health and beauty, "real-life" stories, cuisine, décor and Hollywood glamour. The magazine may be modified in content to suit the local condition. The cover of the twelve issues of the magazine was adorned by famous Hollywood actress. The content of The Malaysian’s Women Weekly, is divided into major columns and minor columns. Below are the major columns that appear in every issue and are the essential part of the magazine:  On the cover

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013)     

Fashion & Beauty Inform Inspire Indulge

These are the minor columns that also appear in every issue:  Every Issue  Cover Style  Let’s Talk  Your Say  Gossip Wire  Just For Juniors  Watch, Do, Win!  Horoscopes  Shopping  Share A Secret The magazine was selected on the basis of theiravailability of the magazine,The Malaysian’s Women Weekly has a circulation rate of 30,366 and readership of 60,732. The issues were chosen randomly based on the availability of the issues at the time of the study. Twelve issues were selected randomly from the year 2011 (March, April, July, October and November), 2012 (January, March, June and November) and2013 (January, February and August). The content was categorized using thematic content analysis based on the nine coding categories developed by Garner & Demarest (1992) which categories the article into traditional or non-traditional themes. The nine coding categories comprised the following themes: 1. marriage and family (e.g., marriage, love, child care, divorce); 2. efficient home maker (e.g. home decorating, budgeting, do-it-yourself, helpful 1. cleaning hints, cooking and recipes, sewing) ; 2. personal health (e.g. exercise, diet, nutrition, breast cancer examination); 3. beauty and fashion (e.g. cosmetic application, wardrobe selection, hairstyles) ; 4. political and social awareness ( e.g. legislative action, social programs, social 5. issues); 6. career development (e.g. job interview techniques, resume writing, management 7. styles); 8. personal growth and development (other than career, fitness or beauty) 9. travel and vacation 10. a category labelled general interest which includes any other articles. 11. No. 1-4 represent traditional themes, No. 5-7 represent non-traditional themes Each article was coded based on the appropriate category to which it belonged based on thematic content analysis developed by Garner & Demarest (1992) which categories the article into traditional or non-traditional themes. Each magazine was scanned for content by turning through the entire magazine page by page,reading each of the article and counting the number of pages devoted to each article.The magazine articles were first coded by two final year media studies students, who were familiar with the technique of content analysis, and who coded the magazine article independently and established an initial list of based onGarner & Demarest (1992) themes. Next, the magazine articles were read by the two authors to establish their own list based on Garner & Demarest (1992) themes. To minimize subjectivity, the coders made their judgment only on the literal meaning of each magazine article. There was 97% consistency in the listing of themes based on Garner & Demarest (1992) among the four coders (Table1). The advertisement were analysed using Bittner’s (1996) categories of appeal was used in understanding the underlying value presented in the advertisements, the following value appeals were used:  Value need appeals (retail advertisements)  Basic need appeals (fast moving consumers goods)  Materialistic appeals (luxury items)  Ecstatic appeals (cosmetics and perfumes)  Intellectual appeals(knowledge or information)  Religious appeals(religious issues)  Humanitarian appeals (charitable organizational) Advertisements were defined as a single advertisement dominating at least one entire page, and in which there was minimal or no magazine content (Stankiewicz&Rosselli, 2008).As such, classified and advertisements, fashion spreads that had more than one salient picture on the page, and pages that considered of a variety of products placed together were not considered full-page advertisements in this study. Pages that advertised more than one product were coded if it was clear that all of the product on the page were promoted by a single company (Stankiewicz&Rosselli, 2008). Promotional pages (e.g. fight against cancer) were coded as well (Table 2).

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Table 1 Number of articles in each month according to nine coding categories developed by Garner & Demarest (1992) Mony

3/11

4/11

7/11

10/11

11/11

1/12

3/12

6/12

11/12

1/13

2/13

8/13

Marriage & family

3

1

3

2

4

1

2

2

3

1

2

4

Efficient homemaker

4

1

7

2

6

5

3

4

2

3

4

4

Personal health

3

2

4

1

0

0

1

5

1

1

0

1

Beauty&fashion

16

20

23

27

16

16

17

17

11

9

10

18

Political&social awareness

0

0

0

0

0

0

1

0

0

0

0

0

Career development

1

1

1

0

1

0

0

0

0

2

0

0

Personal growth&development

2

2

2

2

3

6

1

5

3

2

2

3

Travel& vacation

0

1

0

2

0

0

1

1

0

0

0

0

General interests

1

1

2

2

1

5

2

4

2

4

1

1

Table 2: The number of advertisement in each month according to the different advertising appeals by Bittner (1996) 3/11

4/11

7/11

10/11

11/11

1/12

3/12

6/12

11/12

1/13

2/13

8/13

Value appeals

0

3

1

1

6

1

1

2

2

4

1

3

Basic needappeals

12

16

20

19

17

8

8

13

13

9

9

19

Materialisticappeals

1

8

8

14

8

10

7

10

8

7

8

14

Ecstaticappeals

39

44

34

52

43

39

36

34

40

29

18

23

Intellectualappeals

0

0

0

3

1

1

0

2

1

0

0

1

Religiousappeals

0

0

0

0

0

0

0

0

0

0

0

0

Humanitarianappeals

0

0

0

0

0

0

0

0

0

0

1

1

Discussion: The content of the articles of the magazines were very much lopsided in the category of beauty and fashion, followed by, in the order of efficient homemaker, marriage and family and personal health portraying a more traditional theme (Table 1). Articles on the category of personal growth and development and general interest appeared sparingly. The category least represented in the pages of the magazine was political and social awareness, career development and travel and vacation.Though the magazine does give some coverage to non-traditional issues but still devotes a lot space to women’s appearance. Despite being a 21st century magazine, pages of the magazine was stillrevolved around issues related to sexual relations, understanding the opposite sex, initiating relationships and ending relationships which are all traditional themes. There were at least two to three articles on personal growth and development every month that actually emphasis on handling the financial issues, how to get what you what from your career and family, work-life balance, delegating work thus enabling the more time for oneself and etc. General interest articles also seems to get magazine interest which carries articles on motivational and inspire personal stories which in a way inspire the reader that they can also achieve their goals if they try despite the obstacles faced. As for career development and travel and vacation articles appeared sparingly with one article a month or none at all. For political and social awareness there are hardly any articles which would seem that this not the women’s interest. Advertisements further reinforce the traditional themes as it contains messages about gender roles in terms of appropriate behaviour and appearance for both men and women (Lindner, 2004). Results of Kilbourne (1990) study suggest that there is indeed a relationship between the way women are portrayed in advertising and people’s ideas about how women are supposed to behave and the roles they are supposed to occupy within the society. As for the advertisements that appear in the magazine have a more ecstatic appeal, followed by materialistic appeal and basic need appeal which in line with the contents of the magazine of being feminine and appropriate, a reflection of a traditional theme (Table 2). The majority of the advertisements were on beauty and fashion placing important on physical beautification as the primary form of selfimprovement and self-development (Thomsen, Weber & Brown, 2002).This also further emphases on one of the most prominent daily routines for women in a contemporary materialistic society is consumption, it is an integral part of a women’s life (Fung, 2002). The main objective of the study was to examine the depiction of women in a 21st century magazine, though contemporary women’s magazines have moved on a great deal from their historical origins, offering visions of femininity that involve independence and confidence as well as beauty and domestic concerns4.However, in our analysis of a magazine like The Malaysian’s Women Weekly we find that women are encouraged to look good not only to gain the needed self -confidence but also in order to attract men and have better options in their career. Considering The Malaysian’s Women Weekly is geared to a female audience; yet they have portrayed women in a more traditional role (Lindner, 2004)(Appendix A). It would appear that the portrayal of women in a traditional role and stressing more of beauty and fashion is primarily a means for advertising and selling products that are suggested as creating an illusion that purchasing and using these products will make them sexy and beautiful and thushappy and successful (Lindner, 2004). According to Fung (2002) various social forces, mainly in the culture industries and in the popular media, have reinforced gender stereotypes and women’s “identity”. According to feminist scholars from multiple disciplinary backgrounds, women learn from an early age that their looks matter (Aubrey, 2010). Indeed other people’s evaluation of their physical appearance can determine how they are treated in day to day interactions,

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) which can shape their social and economic opportunities (Fredrickson & Roberts, 1997). Many scholars argue that the media reinforce this appearance-driven culture by constructing women’s appearance as their most important trait, a theme reinforced in many media, including television, women’s magazines, music videos and advertising (Aubrey, 2010). As per Lindner (2004) study considering that the magazine is a 21st century women’s magazine, yet the advertisements portrayed the women in more stereotypically, the portrayal of women as inferior and “flawed”, which is primarily a means of advertising and selling products that are suggested to be a “cure” for women’s feelings of inferiority and inappropriateness. The findings of this study are in line with other studies Demarest & Garner (1992); Fung (2002); Stankiewicz&Rosselli(2008);Haryati (2010); that the magazine largely reflect and reinforce traditional gender roles in which youth and good looks are emphasized and women are defined by the children and men in their lives (Demarest & Garner,1992).Women’s identity in Asia is stigmatized as something inferior, deformed and dependent upon as well as secondary to the male identity (Fung, 2000). This is further emphasized by the study conducted by Krassas et al (2001) on sexual rhetoric’s of Cosmopolitan and Playboy magazines have found that while women have been portrayed as business professional in Cosmopolitan compared to Playboy, yet half of the female models in the former magazine were depicted as sex objects twice the number of women being portrayed as respectable business executive. Both magazines constructed the identity of women as sex objects; “Women are instructed to shed their traditional roles and become more independent while at the same time they are ingrained with the necessity of finding and sexually satisfying a man”. Specifically, it is believed that the messages in these magazines are primarily used by readers in the identity development and gender socialization process (Arnett, 1995). A consequence of the use of the media for selfsocialization is believed to be the cultivation of unrealistic standards of beauty (Thomsen, Weber & Brown, 2002), reflecting how the media glamourizes beauty. When people are repeatedly exposed to the same idea of the importance of physical appearance, or in domestic roles, they are more likely to accept these perceptions as normal. Consequent to this perception when women are portrayed as passive, dependent or weak, it can seem unusual for them to be active, independent or powerful in a society or even in an organization. This can affect both men’s and women’s ideas about which careers women might be good at, how important it is for women to be sexually attractive, and whether women should be in positions of authority.In Hermes (1995 in Fung, 2002) study showed how women’s identity is constructed by reading women’s magazines. The media has been criticized for its portrayal ofwomen as objects whose value is measured interms of their usefulness to others. It becomesdifficult to see them as thinking, feeling,and capable people.The media should exploit this overwhelming advantage to disseminate information (Haryati, 2008), with its ability to go in depth and getting real people to talk about life, this magazine should take advantage of its ability to promote positive values. Clearly, the offence is infusing values that are detrimental to members of the society and help maintain inequality towards women. The danger for such media is the nurturing of values that attributes to bigger social peoblem. If women have been portrayed as sex objects, it will further contribute to gender inequality and oppression where women as girlfriends and lovers, are expected by men to satisfy their sexual needs because of the “artificial norms” created by the media that must exist in a relationship (Haryati, 2008).Fung (2002) study revealed that although magazine reading is, by its very nature, a solitary activity, among the readers there was also a “transcended “meaning. The readers developed a certain degree of cognitive and emotional “attachment” to the magazine. Men were significantly more willing to sexually harass women believed to have egalitarian gender role beliefs than women with believed to have traditional gender role beliefs. In their study Stankiewicz&Rosselli (2008) concluded that women withegalitarian gender role beliefs may be greater risk for sexual harassment than women with traditional gender role beliefs “because they are considered threat to the males’ dominant position”. If a society has been transformed, one may expect changes tohave occurred in media gender representation because the way men and women areviewed in society has changed (Bartsch et al., 2000).The representation of women in a magazine of this era is as such, women will not be truly equal in either a social or organizational context. Media do have the power to affect each and every issue and equality cannot be advocated effectively for instance in pay equity, decision making rights or biasness prevention if the media ignore these issues or present them from a limited viewpoint that favors the status quo. The negativeimpact of the current femininity depictions notonly effect genderrecognition but also force womento hide good personal characteristics in order toadjust their social behaviour to satisfy men’s expectations(Fels, 2004).Sharits&Lammers (1983) suggest that the depiction of female roles should bemore positive, especially in terms of portrayingwomen as mature, attractive, humorous, and modern.This can provide guidance in helping women tounderstand their inner strength, to achieve emotionalbalance while enriching sensitivity to others,and to learn how to better interact with people andsociety (Rayburn & Richmond 1998). Though, this may be premature, thepossibility is there owing to how sophisticated glossy magazines have been communicating their messages and the inability of readers to read the true underlying agenda. This may lead to the creation of a set of beliefs that are contradictory to the actual societal norms (Haryati, 2008). There is very little resistance from society towards the values that have been disseminated by the media. This is because the media, represented here by The Malaysian’s Women Weekly, is very adept in communicating its true values deftly kept subtle underneath each article and advertisements (Haryati, 2008). The magazine is sensitive to changes in society, but they are slow to change due to economic constraints(Demarest & Garner, 1992) as almost 70% of the magazine revenue is from advertising (Dowling, 1978). 3. Conclusion Women’s magazines though giving coverage to nontraditional issues and lifestyle still devote a lot of space to women’s appearance. It is time to realize that perceptions of women, in particular those of the more-educated and socially conscious groups may be directly impacted by the growing focus on these feminine literatures. Due to the growth in awareness and sensitivity on these issues, portrayals which may have worked well in the past may not be so well received in the present 'climate.' The image and the reality of women’s roles as depicted in women’s magazines are still far apart. Women’s magazines should not necessarily continue to rely on past successful role depictions without subjecting the reality of present women’s roles in society and organizations.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) References Aubrey, S. J. (2010) Looking Good Versus Feeling Good: An investigation of media Frames of Health Advice and Their Effects on Women’s Body-related Self-perceptions. Sex Roles, 63, 50-63 Arnett, J. J. (1995). Adolescents' uses of media for self-socialization. Journal of youth and adolescence, 24(5), 519-533. Bartsch, R. A., Burnett, T., Diller, T. R. & Rankin-Williams, E. (2000). Gender representation intelevision commercials: updating an update. Sex Roles, 43, 735-43. Demarest, J. & Garner, J. (1992). The representation of women’s roles in women’s magazines over the past 30 years. Journal of Psychology, 126(4), 357-369. Dowling, G. R. (1978). Sex-role Stereotypes of Women in Australian Magazine Advertising. Australian Journal of Management, 3(1), 65-77. Fels, A. (2004). Do Women Lack Ambition? Harvard Business Review, 82(4), 50–60. Fredrickson, B. L. & Roberts, T. A. (1997). Objectification theory: Towards an understanding women’s lived experiences and mental health risks. Psychology of Women Quarterly, 21, 173-206 Fung, A. (2002). Women’s Magazine: Construction of Identities and Cultural Consumption in Hong Kong. Consumption, Markets and Culture, 5(4), 321-336. Kang, M. E. (1997). The portrayal of women’s images in magazine advertisements: Goffman’s gender analysis revisited. Sex Roles, 37(1112), 979-996. Kilbourne, J. (2003). Cutting Girls Down to Size. Gender, race, and class in media: a text-reader, 258. Haryati, A. K. (2008). The Ideology od sex and love in English women magazine, a challenge to tradition, Proceedings of the national Conference on Social Problems in Malaysia, Department of Sociology and Anthropology, IIUM, 145-160 Lindner, K. (2004). Images of women in general interest and fashion magazine advertisements from 1955 to 2002. Sex Roles, 51(7-8), 409-421. Rayburn, C. A. & Richmond, L. J. (1998). Thoebiology:Attempting to Understand God and Ourselves. Journal of Religion and Health, 37, 345–356. Silverstein, A. J. & Silverstein, R. (1974). The portrayal of women in television advertising. Federal Communications Bar Journal, 27(1), 7193. Sharits, D. & Lammers, B. (1983). Perceived Attributesof Models in Prime-Time and Daytime TelevisionCommercials: A Person Perception Approach. Journal of Marketing Research, 20(1), 64–74. Stankiewicz, J. M. & Rosselli, F. (2008). Women as sex objects and victims in print advertisements. Sex Roles, 58(7-8), 579-589. Thomsen, R. S., Weber, M. M. & Brown, B. L. (2002). The relationship between reading beauty and fashion magazines and the use of pathogenic dieting methods among adolescent females. Adolescence, 37(145), 1-18 1http://www.northallertoncoll.org.uk/media/magsgender.htm

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Appendix A beauty&fashion Combat ageing skin Fix your personal hair damage Top 10 new looks 25 ways to a sexy beach body How to find the perfect dress What your beauty kit needs now Shoes and Bags Galore Secrets to Stronger Asian Hair Secrets to Flawless Skin 8 personalized anti ageing boosters Get a fresh new look Fashion around the town Look as spectacular as your favourite stars What's in your skincare Perk Up the Cleavage Gorgeous gowns for any shape Some stars are baring their backs

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Scent of a woman How to choose the right swimwear personal growth&development 3 ways this woman changed your life How to stay financially fit Create your own happiness Meet three women designers How to Handle Criticism Has a place ever changed your life? marriage & family Panic-free guide to travelling with kids Solutions for the Sex-Starved Wife How to find everlasting love Want to hold on to your man? How to talk to your kids? 10 lessons to keep your marriage strong efficient homemaker Greener healthier living The best kids party cakes Auspicious reunion recipes Home appliance shopping Colour with Confidence Easy tips to update your home personal health Find the best exercise for you 50 diet tips every woman should know 8 ways to sleep better Anti ageing special Boost your energy Festive binge taking a toll on your health? travel& vacation Top 10 holiday destinations A weekend escape

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) general interests Celebrity news Share a secret The talented new mrstimberlake Horoscope How much Is A Celebrity Wedding Worthy career development Can facebook get you fired Have that sinking feeling when you head to work Office politics

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Multimedia Performance Management: The Use of APN Sim-Card System Enhancing Virtual TeleTasking – Perspectives on Tshwane Universities of Technology Nafta Mokate Lehobye Tshwane University of Technology, Republic of South Africa [email protected] Abstract: Since the 2004 mergers of the institutions of higher education in South Africa (SA), the Tshwane Universities of Technology (TuT) is now entrenched in the SA educational system as one of the emerging entities. Other than in some business organizations, teleworking or virtual teletasking is to a large extent a whole new idea within the educational context. In order for this university to stand out unique from the traditional way of its internal operations as a research institution, it is thought the most appropriate, amongst other things, that its workforce be enabled to perform their duties even outside their workplaces to also enhance research. The proposed contribution argues that the use of Access Point Node (APN) Sim-Card System [ASCS] should be entrenched. To achieve this milestone and to see this idea through, the envisaged contribution will demystify why it argues that the use of ASCS as the subspecies of management of multimedia performance and the enhancement of virtual teletasking within TuT would indeed be imperative. Keywords: Technology Acceptance Model; PC Utilization Model; Multimedia Performance Management 1. Introduction Because of the intricacies experienced from work performance as a result of workload appropriated to academicians in Tshwane University of Technology (TuT), it was thought appropriate to introduce a system that would enable them to perform some of their duties even outside their workplaces. This paper is essentially about the management of performance of academicians’ workload through the use of Integrated Tertiary Systems (ITS) and the APN Sim-Card System (ASCS) both systems being referred to as multimedia. As the name suggests, ITS is a program or software used by most tertiary institutions or institutions of higher education that use a conglomerate of applications for example, student registrations, class lists, student results and so forth, among other things. The ASCS on the other hand is a system that uses peripheral installed on portable computers such as the laptops and the tablets enabling the endusers to access the networks that include the TuT intranet outside their workplaces. This connectivity is so essential that the academicians are able to perform their respective workloads anytime anywhere this being referred to as virtual teletasking. Because of the high number of student intake per faculty in every department, the workload per an academician becomes huge and therefore necessitates a major operation that also includes research outputs. To alleviate this situation, TuT deemed it fit to employ part-time lecturers to assist in this regard. Most of these part-time lecturers are mostly employed somewhere else other than at TuT and as a result of this; do not have sufficient time to cope with timelines, for example, the submission of marks on a particular date. This is exactly where the problem crops-up. Another reason is whether or not research output as one of the tri-cameral focus points of every academician is to the best advantage of the academics as researchers. Against this background, the proposed contribution argues that the use of ASCS should be introduced. It will be evident that if, and only if this system is introduced, and the part-time lecturers including all other academicians would be able to work at their convenience (virtual teletasking) outside their respective workplaces and the deadlines in this regard would also be met, the academicians as researchers enjoying research incentives will definitely be willingly hard at their work. 2. Methodology Although this paper is based on multimedia within the contexts of the ITS on the one hand and ASCS on the other, this paper shifted its paradigm predominantly on the use of ASCS as its research focus. Its scope is on a variety of aspects of virtual teletasking on the ASCS and ITS as its multivariate method of analysis which include (1) putting student marks on the ITS, (2) alleviation of huge workload and (3) using portable ASCS peripheral as a research base incentive. Research Design: The research design in this paper focuses on two paradigms namely, Observations and Sampling. According to Lehobye (In Press: c) justifying a statement basically means to ascribe that statement to other statements commonly accepted or evident. Lehobye (In Press) further states that when this was not possible, the truth of the statement had to be verified. In order to do so, a theory of truth had to be chosen. On research design, the selection of the research method will thus be made in terms of scientific measurement and the drawing of the conclusions of the results (Peffers et al., 2008). Choosing longitudinal observations and sampling as the Study focus on the multivariate method of analysis, it will thus be deemed to have explored the most appropriate research design (Creswell, 2007; Baskerville et al., 2011). Longitudinal Observations and Sampling: Observations took a number of years to accomplish and here the findings will be illuminated on. Longitudinal observations made, therefore looked in three pillars in this focus area, namely; manifestations of adamant and arrogant leadership, evading feelings of inferiority complex and suppressive tactics to inadequate professional expertise. With regards to sampling, this approach will enable the study to be done in real-world to match the target environment which is for mobile use (Robson, 2004). The sample used illuminated the views of the TuT Vice Chancellor (VC) [cf Findings and Possible Solutions]. A number of institutions involved in the research and development platforms in Europe like Electronic Point of Sale Systems (EPoSS), New Sampling Sensor Initiative (NSSI) are for example, taking the task very seriously. The sample that will form part of the focus of this paper was drawn from the communiqué that the VC of TuT visualized it in a few years to come, that is, a few years from now on in terms of the application of the ASCS (Walsham, 2002; Yin, 2003). What follow are the reviews looking at relevant literature of the paper topic.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) 3. Literature Review The discussions that follow encapsulate the reviews on relevant and organized literature based on Multimedia Performance Management (MPM), Technology Acceptance Model (TAM) and PC Utilization Model. Multimedia Performance Management (MPM): MPM embraces issues of Management Cybernetics (MC) as one of the key underpinnings of the main themes of this paper. According to Beer (1959), MC involves the recognition and use of technology by management of organizations within the Information Systems (IS) in order to properly achieve organizational goals. Regarding the use of this term in this paper, recognition and the use further includes not only technology but also contract law to regulate the behaviour of the users (Lehobye, 2013). It will be seen that MC fits well with the manner in which structural problems within TuT can be sorted out through virtual teletasking. For examples, (1) Lehobye (In Press: b) uses MC to expose the conduct of the municipalities around the Billing System in Gauteng Province, SA. (2) Lehobye (In Press: a) uses MC as cybernetic business performance and efficacy based on data analysis and indexing applications with a focus on commercial banking industry. (3) Another way of applying MC as Lehobye (2013) elucidates, is the application of cybernetic technology utility based on scrupulous heroes vis-à-vis unscrupulous individuals with a view on ending corruption in SA. The above applications of MC coincide with multivariate methods of analysis used in this paper. This articulation will include TAM and MPCU as the background models illuminating ASCS and virtual teletasking as substrata of multimedia. This study thus used the following that underpin the construct described through hypotheses supporting virtual teletasking: namely; Technology Acceptance Model (TAM) and PC Utilization Model (PCUM) as described hereunder. Technology Acceptance Model (TAM): According to Kalema (2011), TAM was developed by Davis (1989) to predict information technology acceptance and usage. In the study of TAM, it was predicated and empirically validated that individuals’ behavioural intention to use technology is influenced by their perceived usefulness and perceived ease of use of that particular technology. TAM’s strength came as a result that the study was conducted to address the weakness that had been cited by several researchers in TRA and it was particularly tailored to the field of information system (Davis 1989; Davis et al. 1989). An uncountable number of studies have used, replicated, validated and extended TAM and as the evolution of the model goes on several constructs are getting more and more introduced as external factors influencing perceived ease of use, perceived usefulness and behavioural intention (Lee et al., 2003; Goodhue, 2007; Benbasat and Barki, 2007). The most common ones include; system quality, compatibility, computer anxiety, enjoyment, computing support, and experience (Lee et al., 2003). According to Lucas and Spitler (1999), many studies that have employed TAM lacked a clear distinction between perceptual measure and the objective measure of virtual teletasking. They assert that users may do their work differently and that technology may enable different strategies to a performance of a particular task. They emphasize the importance of understanding situations where TAM may be applicable and the nature of its limitations. They put it that TAM’s explanatory potential is limited and most of its research has been experimented in Laboratories using single-function technology rather than a variety of technologies as the case may apply in real-life situations of an organization. When explaining the Quo Vadis of TAM, Benbasat and Barki (2007) acknowledge that TAM has been proved a successful theory in the field of information research, and it has made significant contribution to virtual teletasking. However, they pointed out that TAM has diverted researchers’ attention away from other important research issues and has created an illusion of progress in the use of virtual teletasking. They observe that the attempt by several researchers to come up with different versions of the extended model has not only caused confusion but also serious theoretical chaos in the IS field of research using ASCS as no version has been clearly or commonly accepted. TAM can be represented as in the figure that follows: Fig. 1: ASCS Technology Acceptance Model – Self Adopted

Perceived Usefulness of ASCS

External Variables

Attitude

Behavioural Intention

Actual Behaviour

Perceived Ease of Use of ASCS Figure 1 above illustrates TAM as used in this paper. It looks into six facets of the TAM namely, perceived usefulness of technology, perceived ease of use (Davies et al., 1992). Then it goes further to examine the attitudes of intellectual capital which is about the TuT employees who would be involved in the use of technology to carry out their workloads in relation to external variables (Davies et al., 1992). Behavioral intentions are construed in figure 1 above to include those intentions and the actual behavior of the managers that bring about failure of technology acceptance (Ajzen, 1991; Venkatesh et al., 2003). Following is the motivational model (MM). PC Utilization Model (PCUM): PCUM was developed to predict Personal Computer Utilization (PCU). Developed based on Triandis’ (1980) theory of human behavior, PCUM presents a competing perspective to that proposed by so-called ‘TRA and TPB’. In their following factors served as the basic constructs; job-fit, complexity, long-term consequences, affect towards use, social factor and

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) facilitating conditions in virtual teletasking. PCUM excluded behavioral intentions due to the fact that the researchers are interested in actual rather than predictive use on the other hand habits were also excluded due to the measurement issues. The settings of the Study about TuT as a new institution in academia in SA recently made the model developers to keenly know how computers are used for virtual teletasking, thus making complexity and job fit key constructs. Their study population was limited to those employees who use computers voluntarily at work such as professionals and managers. The study findings indicate that social factors, complexity, job fit, and long-term consequences had a significant influence on PC use as compared to the effect and facilitating conditions which were insignificant. The study’s explanation of results shows that professionals and managers use PCs as tools therefore the effect issues do not arise whereas they attributed the poor performance of the facilitating conditions to the measurement issues. However, it is important to note that PCUM only concentrated on situations where use is voluntary and doesn’t fit the situation where users are mandatorily made to use computers. This fact makes the model to be particularly suited for predicting individuals’ acceptance of virtual teletasking and use of a range of information technologies (multimedia). It also identified itself as measuring actual usage behavior rather than intention to use. The following indicates the parameters to follow when applying for the ASCS accessible from TuT Portal: Fig. 2: Parameters for an ASCS Application from TuT Intranet

My Portal Support Servises APN Application New Application Insert Your ID Copy

Submit Figure 2 above indicates the parameters to be followed from the TuT intranet referred to as myPortal. Once the steps indicated in figure 2 above are followed with a success, the line manager will at a click indicate the approval of the application to issue the Sim-card to be installed on the laptop and/or the cell phone to access the internet allowing virtual teletasking. 4. Findings And Possible Solutions The following was viewed to have encapsulated the findings in this paper in totality. The necessity of keeping track with rapidly emerging multimedia and the introduction of such technologies at TuT have prompted the directorate of Human Resource Development (HRD) to give staff ICT training free of charge. The first session took place on Monday, 18 February 2012. The training, facilitated by Network and Security Administrator at ICT Services, covered the use of solutions and tools such as Microsoft Windows Remote Assistance, Outlook 2010 (mailbox delegation and permissions), setting up e-mails on smart-phones, MS Outlook Web Application and the TuT SSL VPN. All these put together are also referred to as multimedia. It may now be seen that these training sessions also covered the newly deployed APN solution, which will soon see TuT staff members issued with SIM cards to connect to the TuT network and internet at anytime (if these would at all be issued) from anywhere, any time in SA, provided they are in the range of Telkom’s 8ta signal. As a security measure it would be important to change one’s password every 30 days to avoid files being hacked into. When one works online, virtual teletasking going along with multimedia would all of them create a single point of failure in case of a leak. This means TuT wants to empower its staff and that this can be done through training. It is indicated that TuT is obliged to develop staff at all levels, promote computer literacy and improve their computer skills preparing for the envisaged virtual teletasking. TuT indicates that, as part of the programme, service workers will receive training to use e-mail and have access to myPortal (multimedia). This aligns with virtual teletasking. Moreover, because TuT doesn’t print payslips anymore, employees need to be able to print their own payslips anywhere, anytime, aligning with the use not only of ASCS but also of virtual teletasking using multimedia. Training sessions like this one would also help employees to understand and manage their iPhones better (Lehobye, 2012). Arguably, employees who receive ICT training are able to do their jobs better when outside their workplaces (virtual teletasking). They tend to be more aware of information security practices and the proper procedures for basic tasks. The training improves employees’ self-confidence because, after the training, they have a better understanding of new and current technologies and policies that are introduced and the responsibilities that go with them, all by themselves. However, continuous ICT training would also keep employees on the cutting edge of new ICT developments. It is anticipated that this training will continue throughout the year and staff members who are interested are invited to visit myPortal for training opportunities. TuT’s campuses are beautiful and the work done there would be of world standard if technology was used to the fullest extent, but people tend not to notice it because of the past negative image of the TuT in the public eye. This was self-evident when VC of TuT in a face-to-face meeting with staff members at the Pretoria Campus on Friday, 1 February 2013, indicated that changing this image should be a priority for every staff member and student from 2013. The meeting formed part of a series of visits to various campuses to share TuT’s emphasis and expectations for 2013 with staff members also on the

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) use of ASCS and virtual teletasking through the use of multimedia. The VC’s pledge aligns well with this paper’s argument which is that the use of ASCS should be introduced. In a passionate plea to staff, the VC further indicated that the current negative public perception about TuT cannot be permitted to continue. Quoting the VC: “We all have to remember why we are here: we exist because we have students and we should all work hard towards creating an environment conducive to academic excellence.” TuT VC explained the importance of the academic project, but stated that a “human project” should be added to this. “The important question we must ask ourselves is whether we behave in such a way that we create a particular TuT culture, a culture where it is shown that TuT has a “human face”, a culture where colleagues and students are treated with respect and dignity. Our public image will only change when TuT is perceived as an institution of which discipline and academic performance, together with respect for human beings, form the cornerstones. We are not here to teach a culture of violence; therefore there should be a balance between discipline and humanity in all areas of the University. Lecturers and managers must be in control of their areas but your staff and students must believe in you as human beings as well,” unquote. To strengthen this paper’s argument, the VC added that, in order for her and the Advancement Office to be able to increase third-stream income for the University, it is imperative that they clean up their house, sort out their disputes internally, do their jobs in a disciplined and focused manner and ensure that the public views TuT as a stable, high-performing university of technology. The VC further emphasized that TuT as one of the Universities of Technology (UoT) in South Africa, is an inclusive institution in an inclusive country. They should most probably understand transformation better than many people. The VC concluded by saying that she would like TuT community to help her by not looking at TuT through a lens that only suits themselves, but through one that has the best interests of TuT at heart. They have to find what brings them together and stop focusing on their differences. The VC said this in response to comments on the perceived lack of transformation at TuT. In conclusion and in a lighter vein, the VC highlighted some brighter side:  We are grateful for funding made available from the DoHE for infrastructure development. The money will primarily be spent on making the Soshanguve and Ga-Rankuwa campuses more disability-friendly ‘in view of virtual teletasking using multimedia’;  An extensive SRC workshop is planned to ensure that all student leaders are on par with TuT’s 2013 direction and priorities. As student leaders, their role should be to support the University in achieving its goals while acquiring desirable leadership attributes. It was thus concluded that if TuT wants to build a new culture, the foundation should be solid. Therefore a culture survey was also planned for ‘this year’ to determine what works well and to identify elements that they can build and expand on. What follow clarify new insightfulness to management practitioners this paper might have introduced to the general body of knowledge. Managerial Implications: Though Goodhue (2007) to some extent disagrees with Benbasat and Barki (2007) on critics in defense of TAM and thus ASCS based on the use of ASCS on multimedia through virtual teletasking, notably, he succeeded to articulate and to successfully defend the four major strengths and the many studies that came out of it that were raised by the latter. These strengths of the use of ASCS on multimedia through virtual teletasking as earlier shown are as follows:  The intrusion of researchers’ attention into important phenomena has made ASCS-based research on multimedia through virtual teletasking to pay more attention to the antecedents of its belief constructs: most importantly, the IT relic design most valuable. Also they observed that, these researches have explored all the outcomes of IT adoption based on multimedia through virtual teletasking.  Failure to introduce ASCS-based research on multimedia through virtual teletasking has led to the creation of an illusion of progress in knowledge accumulation. In the extension of ASCS constructs such as trust, cognitive absorption, self-efficacy, job relevance, image, result demonstrability, disconfirmation, information satisfaction, top management commitment, personal innovativeness, information quality, system quality, computer anxiety, computer playfulness, and perceptions of external control have largely applied. Though many of these researchers empirically justify their findings, they have brought new understanding to explaining why IT multimedia use is useful. This is because many of these introduced factors like trialability, visibility, image, relevance and many others are notably not just individuals’ beliefs. They go along well with this paper’s articulation.  The ability of ASCS on multimedia through virtual teletasking as a theory to provide a systematic means of expanding and adapting its core model and out-of-workplace horizon seem to have removed the limitation of its usefulness in the constant evolving IT adoption context. In support of previous researchers on system use (DeLone and McLean 2003), Benbasat and Barki (2007) pointed out that, ASCS researchers on multimedia through virtual teletasking have largely put much emphasis of behavior on a broad perspective of system use as an amount or frequency of usage. DeLone and McLean (2003) and Benbasat and Barki (2007) also assert that such understanding is acceptably simplistic and has a lot of incentives on research. Making researchers succeeding to investigate other user behaviors that would play a major role in explaining technology, implementation, adoption, and acceptance would indeed make technology acceptance a bid more understandable. The non-replication of ASCS use on multimedia through virtual teletasking in many studies has been within the IT context in regards to commonly accepted theoretical foundations not only removed a distortion but eradicated confusion and chaos. ASCS’s initial study (Davis, 1989; Davis et al., 1992) also not only included subjective norms and perceived behavioural control, but also included other latent factors apart from its two constructs perceived ease of use and perceived usefulness. Such factors like cognitive absorption, trust and enjoyment of virtual teletasking, were considered. Because of its popularity, investigation of such factors have been taken as an extension of ASCS on multimedia usage through virtual teletasking giving birth to a variety of studies in this direction. Although the following observation is slightly out of the scope of this paper, it is nonetheless worth mentioning. The TuT policy on promotions requires that a junior lecturer holds an honours’ degree or BTech degree; a lecturer a masters’ degree and a senior lecturer a doctoral degree. But to the contrary, that is not the case. For example, some academic Heads of Departments (HODs) with only a masters’ degree without any relevance to that department in question for that matter, perhaps even struggling for years to obtain a doctoral degree are still hanging on there, earning a salary of an HOD, not to speak of even at least earning a salary of a senior lecturer. These HODs would dictate terms to holders of doctoral degrees who are still their subordinates on how things should be done. They have the luxury of enjoying ill-treating

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) subordinates and see them suffer [at least not all the departments to this], specifically financially, making things difficult for subordinates specifically with the use of ASCS on multimedia through virtual telecasting, particularly on research. TuT allows that state of affairs and that undermines the research integrity on research for some in the university, thereby inculcating a sprit of discouragent using multimedia through virtual teletasking. Even worse, some junior lecturers without even a masters’ degree for that matter, are made to act in the positions of HODs while there are those with doctoral degrees or about completing same doing research using ASCS on multimedia through virtual teletasking. Although the level of academic qualifications and the focus thereof differ remarkably, it is assumed that the university is not being made aware of the employees’ qualities on equal footing in terms of the improvement of the situation at hand. For example, non-academics holding, say a masters degree without even using multimedia through virtual teletasking, would earn far more than an academic holding the same qualification, contributing to the misuse of infrastructural incentives. This would indeed lead TuT to a total collapse and frustration of the use of multimedia through virtual teletasking as the money budgeted is not utilized for what it should, for example the delay in the approval of applications for the use of ASCS to other employees. Now that this is pre-emptory, it looks like it is something that belongs to the past, given the views of VC. Lastly, rather than the least, employees who receive ICT training are able to do their jobs better when outside their workplaces (virtual teletasking). They tend to be more aware of information security practices and the proper procedures for basic tasks. Moreover, the training improves employees’ self-confidence because, after the training, they have a better understanding of new and current technologies (multimedia) and policies that are introduced and the responsibilities that go with them, all by themselves. 5. Conclusion and Avenues For Future Research This paper argued that the use of ASCS should be introduced. To achieve this, the contribution demystified why it argued that the use of ASCS as the subspecies of management of multimedia performance and the enhancement of virtual teletasking within TuT should be supported. The results to this paper indicate indeed that the use of ASCS enhancing virtual teletasking within TuT, are imperative. If TuT really needs unqualified prosperity it should follow this model. Unlike TuT, institutions such as the University of North-West and the Universities of SA for example, pay the researchers directly into their personal accounts the subsidy received from the DoHE on publication of their research outputs in the accredited peer-reviewed journals and conferences. This, as an incentive, would encourage academicians to publish as much as they can raise their institutions’ research capacities in SA. In support of previous researchers on system use with others pointing out that, ASCS researchers on multimedia through virtual teletasking have largely put much emphasis of behaviour on a broad perspective of systems use as an amount or frequency of usage, having asserted that such understanding is acceptably simplistic and has a lot of incentives on research, this focus seem most relevant. This however, does not seem to hold water for the TuT researchers, thereby bringing a lot of discouragement on research by academic employees and other administrative and student researchers using virtual teletasking and multimedia. The University of South Africa, on each paper published as already stated, takes only a mere 40% of the money paid by the DoHE for each paper published and transfers the rest to the researcher’s personal account. Is this not an incentive that would encourage research capacity on multimedia through virtual teletasking using the ASCS? However, the main question that renders most of the future research in this respect would be the question of the lack of this incentive. Why does TuT treat its researchers so differently in respect of the use of ASCS using multimedia through virtual teletasking? Does this not strangle the TuT research capacity and perhaps also the multimedia performance management? As a measure of future research, how else would this be absolved? In order for this university to stand out unique from the traditional way of its internal operations as a research institution, is it not perhaps the most appropriate, amongst other things, that its workforce also be enabled to perform their duties even outside their workplaces to also enhance research? However, it is strongly advised that, with no shadow of doubt, if TuT really wants to ultimately rip the fruits of the use of APN Sim-Card system enhancing virtual teletasking it should start following this paper’s articulations. References Ajzen, I. (1991). The Theory of Planned Behavior. Organizational Behavior and Human Decision Processes, 50, 179-211. Baskerville, R., Lyytinen, K., Sambamurthy, V. & Straub, D. (2011). A Response to the Design-oriented Information Systems Research Memorandum. European Journal of Information Systems, 11-15. Beer, A. S. (1959). Cybernetics and Management, English University Press. Anthony Stafford Beer (September 25, 1926 - August 23, 2002) was a British Theorist, Consultant and professor, 214. Benbasat, I. & Barki, H. (2007). Quo Vadis, TAM? Journal of Association of Information Systems, 8(4), 211-218. Creswell, J. W. (2007). Qualitative Inquiry and Research Design: Choosing among Five Approaches. 2nd Edn. London: SAGE. Davis, F. D. (1989). Perceived Usefulness, Perceived Easy-of-Use, and Use Acceptance of Information Technology. MIS Quarterly, (13:3), 319-340. Davis, F. D., Bagozzi, R. P. & Warshaw, P. R. (1989). User Acceptance of Computer Technology: A Comparison of Two Theoretical Models. Management Science, 35, 982-1003. Davis, F. D., Bagozzi, R. P. & Warshaw, P. R. (1992). Extrinsic and Intrinsic Motivation to Use Computers in the Workplace. Journal of Applied Social Psychology, 22(14), 1111−1132. DeLone, W. H. & McLean, E. R. (2003). The DeLone and McLean Model of Information Systems Success: A Ten-year Update. Journal of Management Information Systems, 19(4), 9-30. Goodhue, D. L. (2007). Comment on Benbasat and Barki’s “Quo Vadis TAM” Article. Journal of the Association of information Systems, 8(4), 219-224. Kalema, B. M. (2011). Critical Factors Influencing the Use of Integrated Tertiary Software. Unpublished Doctoral Thesis. Tshwane University of Technology, Republic of South Africa. Lee, Y., Kozar, K. A. & Larsen, K. R. T. (2003). The Technology Acceptance Model: Past, Present, and the Future. Communications of the AIS, 12, 752-780.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Lehobye, N. M. (2012). Time Management Strategy and Performance Appraisal: Exploitation of Podcasting Effectiveness. 6th IBC Proceedings, Mombasa, Kenya, August, 27-31, 2012. Lehobye, N. M. (2013). Cybernetic Technology Utility: Scrupulous Heroes v. Unscrupulous Individuals – Ending Corruption in SA. International Journal of Research in Computer and Communication Technology, 2(5), 238-243, May 2013. Lehobye, N. M. (2013). Managerial pursuit on e-tolling system implementation: Cybernetic public disapproval - South African case. Journal of Business Administration and Management Sciences Research, 2(2), 021-026, February, 2013. Lehobye, N. M. (In Press: b). Cybernetic Business Performance and Efficacy: Data Analysis and Indexing Applications – Taiwan Commercial Banking Industry. Paper Accepted for the Advances in Business-Related Scientific Research Conference to be held in Rome, Italy, October 2-4, 2013. Lehobye, N. M. (In Press: c). Management Cybernetics: FSS MIS-Model Usability for Eradicating Financial Structural Problems – A Case of SA Universities of Technology. PhD Thesis Final-draft Accepted for Publication, Earth E-publications, August 2013. Lehobye, N. M. (In-Press a). Management Cybernetics: Exposing the Conduct of TMM around the Billing System in Gauteng Province – the SA Perspective. Journal of Management, Article Accepted for Publication 2013. Lucas, Jr. H. C. & Spitler, V. K. (1999). Technology Use and Performance: A Field Study of Broker Workstations. Decision Sciences 30(2), 291-311. Masina, P. N. & Lehobye, N. M. (2013). Change Management: Absolutions on Labour Challenges – an Exploratory Futuristic Approach to UoTs. Global Business and Technology Association 15th Annual International Conference, Helsinki, Finland, July 2nd – 6th, 2013. Mokgele, J. R.. & Lehobye, N. M. (2013). Technology Identification and Ethical Performance Management: Remoulding Local Government Service Delivery through E-GovMoNet Technology. Global Business and Technology Association 15th Annual International Conference, Helsinki, Finland, July 2nd – 6th, 2013. Peffers, K., Tuunanen, T., Rothenberger, M. A. & Chatterjee, S. (2008). A Design Science Research Methodology for Information Systems Research. Journal of Management Information Systems, 24 (3), 45-78. Robson, C. (2004). Real World Research. 2nd Edn. Blackwell Publishing: Oxford. Triandis, H. C. (1980). Values, Attitudes, and Interpersonal Behavior. In: M.M. Page, Editor, Nebraska Symposium on Motivation, 1979: Beliefs, Attitudes, and Values, University of Nebraska Press: Lincoln., 195–259. Venkatesh, V., Morris, M., Davis, G. B. & Davis, F. D. (2003). User Acceptance of Information Technology: Toward a Unified View. MIS Quarterly, 27(3), 425-478. Walsham, G. (2002). Interpretive Case Studies in IS research: Nature and Method, in Qualitative Research in Information Systems. In: Myers, M. D. & Avison, D. E. (Eds). Sage Publications: London. Yin, R. K. (2003). Case Study Research Design and Methods. 3rd Edn. Sage Publications: UK

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Restraint of Trade: Managerial Vindictiveness on Emerging Small Businesses Nafta Mokate Lehobye Tshwane University of Technology, Republic of South Africa [email protected] Abstract: There is quite a number of well established and flourishing businesses out there that today conquer the business-world and subjugate newly established ones so much that one wonders as to where these businesses actually emanate from: heaven or somewhere? They are so well established and flourishing it seems like they are not man-made. On the other hand, when those individual employees resign from these businesses to establish their own, there is this contract that restrains them from doing so: the so-called ‘restraint of trade’ (ROT). This study looks behind the possibility of businesses about to start being restraint and vindicated from even being established from the outset and reports on the unfairness, unjust and cruelty the doctrine of ROT has and impacts on newly established businesses. It shows the impact businesses face when they have to close down because the founders thereof have allegedly stolen from other businesses the expertise after they resigned from their previous employers to establish similar businesses. Is the restraint to exercise one’s expertise and profession on economic development within an open democratic dispensation fair or unfair? The contribution will answer this question looking at whether or not their establishment is just or unjust. The result will indicate that the establishment of these businesses will be unjust if ROT is still standing. Keywords: Employment Limitation; Restraint of Trade; Restraint and Vindication; Trade Secrets 1. Introduction There are quite a number of well established and flourishing businesses out there that today conquer the business world and subjugate newly established ones so much that one wonders as to where these businesses actually emanate from: heaven or somewhere? These businesses are so well established and flourishing it seems like they are not man-made. How do they get this so possible? On the other hand, when those individuals resign from these businesses to establish their own, there is this contract that restrains them from doing so: the so-called ‘restraint of trade’ (ROT). This study looks behind the possibility of businesses being restraint from even being established from the outset and reports on the unfairness, unjust and cruelty the doctrine of ROT has on these newly established businesses. It shows the impact that these businesses face when they have to close down because the founders thereof have allegedly stolen from other businesses the expertise after their employees resigned from their previous employers to establish similar businesses. Is the restraint to exercise one’s expertise and profession on economic development within an open democratic dispensation fair or unfair (Lipset, 1959; Nussbaum, 2000)? This paper will thus look at the very origin of some well established businesses to answer this question. ROT is usually a contractual clause added to employment terms and conditions that pertains to restrictions applied to one’s unique trade or occupation with the interests of maintaining confidential business secrets. ROT is normally enforced by one’s employer by placing certain limitations on his or her freedom of employment, namely; that one may or may not be able to trade within the same industry, and that if one is currently working elsewhere one should resign. These secure the safety and confidentiality of trade secrets and sensitive business information relating to the business. Such information is viewed as being of a classified nature and should this leak to competitors could have severe trade repercussions and financial consequences. The law of contract in this regard will thus be instrumental based on relevant and organized literature review. The Problem: Is it difficult for an employer to enforce ROT? Is the restraint to exercise one’s expertise and profession on economic development within an open and democratic dispensation on the basis of fair or unfair, just or unjust democratic dispensation (Lipset, 1959; Nussbaum, 2000)? 2. Methodology This paper captured the very essence that businesses are being vindicated by the inclusion of ROT doctrine within the employment contracts of those employees working and then wanting to resign in order to form their own businesses. It explores and defines ROT and democracy as would be understood within the context of businesses and how newly formed businesses are affected by this doctrine. It further provides the Restraint Framework that gives a detailed Restraint and Vindication, examining the constitutionality of Restraint and then looking at the impact of restraint as it holds on newly formed businesses. This exploration was necessary to follow so as to provide the insightfulness and comprehension of the paper argument (Babbie and Mouton, 2007). This would be appropriate as this paper describes a particular phenomenon in a specific context rather than predict (Remenyi, 1998). Furthermore, this provides the allowance and leeway of understanding actions and meanings shaped by unique circumstances (Maxwell, 2005). It has to be mentioned here that, because of its originality, this qualitative paper would not have adequate literature. However, scholars cited formed relevant literature and have not affected the import and premise of this paper’s articulations. Theoretical Underpinnings: The section that follows defines and contextualizes the ROT doctrine and describes how newly established businesses and their employees may be affected by the inclusion of the doctrine in their employment contracts and defines ‘democracy’ in terms of the restraint framework. The ROT Doctrine Defined: The ROT doctrine is usually a clause added to an employment contract that pertains to restrictions applied to one’s unique trade or occupation with the interests of maintaining confidential business secrets. ROT may be enforced by one’s employer. By placing certain limitations on one’s freedom of employment, one may or may not be able to trade within the same industry one currently works in should one resign (Griswold, 2007). This secures the safety and confidentiality of trade secrets and sensitive

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) business information relating to the business (Fouche, 2013). Such information is viewed as being of a classified nature and should this leak to competitors could have severe trade repercussions. What follow thus looks into how newly established businesses are affected. How are Newly Established Businesses Affected: Each business that decides to include ROT in their employment contracts will have unique inclusions in their restrains. While this is so, it is safe to say that ROT will impact one’s employment agreement in one of the following ways: ROT could firstly impact one’s employment and one’s career in the sense of which one does business with during one’s employment  term. Whether one is on contract or a permanent employee, if one is restricted by ROT one cannot do business with anyone else. ROT typically limits employees from making use of 'business resources' for personal gain. An employee's unique skills are considered to be 'business resources' and it is these that one is not entitled to utilise for the benefit of anyone else other than one’s current employer. In other words, one cannot partition any moonlighting work or free-lance work whilst employed with the organisation with ROT in place (Griswold, 2007; Fouche, 2013). Not only does the ROT doctrine limits one during one’s employment term but also plays a part when wanting to terminate one’s  employment. The most common feature of ROT is to limit an employee after they leave the business. This means that an employee restricted by ROT is able to resign from a position, but may not continue to work for a similar business that competes directly or indirectly with the business once one has resigned from the business. ROT therefore effectively 'banns' an employee from working in a similar business to the one directly relating to their current job (Tannesjo, 2008). Tannesjo (2008) argues that not only is world government necessary if we want to deal successfully with global problems, it is also desirable in its own right. This restraint would apply for a specific time period detailed in the employment contract and usually specifies a geographical range in which these restrictions may reasonably be enforced on the employee by the employer (Christie, 2006; Hutchison et al., 2010; Fouche, 2013). While to some, ROT may not necessarily bother you, it is your responsibility to be aware of what restraints are in place. Although not bothered, not very many employees are able to boast a multitude of skills applying to various markets and industries (Christie, 2006; Griswold, 2007; Hutchison et al., 2010). To many, the ROT doctrine could mean their entire livelihood although it may become very difficult for an employer to enforce it in the instance where any employee is unable to make a living from an alternative field of work due to limited skills. However, ROT contracts are certainly worth paying attention to should they feature in one’s employment contract as these may have a significant impact on one’s next career move. This idea is supported by the Constitution of the Republic of South Africa (1996) on the basis of the fact that everyone has the right of choice to practice and exercise their professions. This Constitution speaks in so many words in this regard. What is Democracy within the ROT Context? According to Business Dictionary democracy is defined as the political system that is run and controlled by citizens of the country. This definition is available online at . [Retrieved September 26, 2013]. Democracies are made up of elected representatives and require that governmental measures be voted on by these elected representatives or the people. Democracies are not universal and are implemented and enforced in different manners. The first democracy traces its roots back to Ancient Greece (Greek: (dēmokratía) "rule of the people", which was coined from (dêmos) "people" and (kratos) "power", to denote the political systems then existing in Greek city-states, notably Athens) [Raaflaub et al., 2007]. Since that time, democracies have continued to be created across the world. In a wide sense of the word, democracy is a form of government in which all eligible citizens have an equal say in the decisions that affect their lives. Democracy allows people to participate equally—either directly or through elected representatives—in the proposal, development, and creation of [corporate] laws (Lipset, 1959; Nussbaum, 2000). It encompasses social, economic and also cultural conditions that enable the free and equal practice of political self-determination (Nussbaum, 2000). Other cultures since Greece have significantly contributed to the evolution of democracy such as Ancient Rome (Dunn, 1994), include Europe (Dunn, 1994), and North and South America (Weatherford, 1988). Just recently, of course, South Africa has just its own in 1994. A democratic government contrasts to forms of government where power is either held by one, as in a monarchy, or where power is held by a small number of individuals, as in an oligarchy or aristocracy. These oppositions are nevertheless, inherited from Greek philosophy, and are now ambiguous because contemporary governments have mixed democratic, oligarchic, and monarchic elements (Fotopoulos, 1992). Karl Popper defines democracy in contrast to dictatorship or tyranny, thus focusing on opportunities for the people to control their leaders and to oust them without the need for a revolution as in SA. In its narrow sense however, democracy, as in SA, should thus here be understood as yet another aspect of management within business environments allowing people to participate equally—either directly or through elected representatives—in the proposal, development (Nussbaum, 2000), and creation of [corporate] laws (Lipset, 1959; Lehobye, 2011; Flyvbjerg, 2012). This seems to contravene to a greater degree with vindictiveness envisaged by the ROT doctrine in this paper. Following is the restraint framework. The Restraint Framework: This framework encapsulates the vindictiveness on restraint, the Constitutionality of Restraint and the Impact of Restraint on Businesses as hereunder described. Restraint and Vindication: This study looked behind the possibility of businesses being restraint and vindicated from even being established from the outset by their newly founders. Constitutionality of Restraint: It paper investigated and then reported on the unfairness, unjust and cruelty the doctrine of ROT has on businesses and the impacts on prospective and newly established businesses (Köchler, 1987; Whitehead, 2002). The SA’s democratic dispensation given birth to in 1994 answers the following two questions (the Constitution of the Republic of SA, 1996; Inglehart, 1997): Is the restraint to exercise one’s expertise and profession on economic development within an open democratic dispensation fair or unfair (Lipset, 1959; the Constitution of the Republic of SA, 1996; Nussbaum, 2000)? Is it practiced within the constraints of the law of general application? Impact of Restraint on Businesses: To answer these questions, it is desirable to look into the very origin of businesses (Whitehead, 2002). The impact that businesses face when they have to close down because the founders thereof have allegedly stolen from other businesses the expertise after they resigned from their previous employers to establish similar businesses might be so enormous (Fouche, 2013). This can be evident from the analyses and discussions that follow.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Brief Analyses and Discussions: Many employers use the ROT doctrine to preserve the trusted fundamental resources of their businesses. This is whether or not it is an invaluable database of clients or a secret strategy that wow's competitors, a 'secret recipe' or 'trade secret' unbeknown to anyone but those belonging to the 'family'. Initially ROT was to ensure that those savvy to a business's unique differentiator do not uncover classified business information to the general public or competitors to the business (Lehobye, 2011; Fouche, 2013). Yet, any owner of a business has the right to maintain their own unique trade secrets, but what about the employees? While an entrepreneur has a long term vested-interest in his or her business, employees come and go as their career paths grow and evolve. As do managers of small businesses, they too, have the right to freedom of trade [as envisaged by the Constitution], so how far an employer would push ROT line and what exactly is ROT? How would one know if ROT affects his or her current occupation? In what manner does ROT inhibit one’s employment rights? These are all questions that every employee should know how to answer before they resort to resignation while the ROT doctrine is still entrenched in their employment contracts (Tannsjo, 2008). ROT could have severe repercussions on one’s career action plan and chances of pursuing a possible career change. These questions regarding ROT where derived from . It looks like some employers out there are using the ROT doctrine in order to vindicate other businesses from prosperity (Weatherford, 1988; Halperin et al., 2005). What then would be the implications of management practitioners on this new subject? Managerial Implications: Many business advisors or legal consultants recommend the ROT doctrine when a product offering is remarkably unique. By protecting unique business assets, companies maintain exclusive rights to their trade secrets. Usually the ROT doctrine is documented in a detailed format in individual employment contract. Employment contracts attached to the ROT doctrine are not a pre-described feature in a standard employment contract and are thus an additional clause added to unique employment agreements. As this is an addition to a contract, it is considered that ROT be above and beyond an employee's call of duty. An employee is required to agree to that which is stated in the employment contract in order to accept the propositioned role. This is normally done through the media of offer and acceptance at common-law. Although one might not agree, it will nonetheless be to one’s advantage to be aware of these restrictions before accepting a role at the contractual period of offer and acceptance prescribed by common-law. If one is not very sure if one is bound by the ROT doctrine, one can go through one’s employment contract as it is here where this will be documented. But then, it should be noted that for such contracts to be valid and legally enforceable, it is nevertheless a prerequisite that they should be in writing as a legal formality. To be reduced in writing however, it is notable that the aim is to avoid possible future disputes. Each business that decides to include the ROT doctrine in their employment contracts will have unique inclusions in their restrains. While this is so, it is safe to say that the ROT doctrine will impact one’s employment agreement in one of the following ways: ROT could firstly impact one’s employment and one’s career in the sense of who one does business with during one’s employment term.  Whether one is on contract or a permanent employee, if one is restricted by the ROT doctrine one cannot do business with anyone else  for a certain period of time within a given distance. The ROT doctrine typically limits employees from making use of 'business resources' for personal gain. An employee's unique skills are  considered to be 'business resources' and it is these that one is not entitled to utilise for the benefit of anyone else other that one’s current employer. In other words, one cannot partition any moonlighting work or freelance work whilst employed with the organisation with the ROT doctrine in place. Against the above background, it follows that the ROT doctrine based on managerial vindictiveness on emerging businesses is indeed overwhelming. Following are thus the lessons or findings brought down from this study. Lesson Learned: Not only does the ROT doctrine limit one during one’s employment term but also plays a part when wanting to terminate one’s employment. The most common feature of the ROT doctrine is to limit an employee after they leave the business. This means that an employee restricted by the ROT doctrine is able to resign from a position, but may not continue to work for a similar business that competes directly or indirectly with the business once one has resigned from the business. The ROT doctrine therefore effectively 'banns' an employee from working in a similar business to the one directly relating to their current job. This restraint would apply for a specific time period detailed in the employment contract and usually specifies a geographical range in which these restrictions may reasonably be enforced on the employee by the employer. While to some, the ROT doctrine may not necessarily bother one, it is one’s responsibility to be aware of what restraints are in place in one’s employment contract. Although not bothered as just stated, not very many employees are able to boast a multitude of skills applying to various different markets and industries. To many, the ROT doctrine could mean their entire livelihood although it may become very difficult for an employer to enforce the doctrine in the instance where any employee is unable to make a living from an alternative field of work due to limited skills. However, the ROT doctrine is certainly worth paying attention to should they feature in one’s employment contract as these may have a significant impact on one’s next career move. Following are the conclusion and the avenues for future research. 3. Conclusion and Future Reseach How would one know if the ROT doctrine affects his or her current occupation? In what manner does ROT inhibit one’s employment rights? Does the ROT doctrine mean the entire livelihood is shattered although it may become very difficult for an employer to enforce it in the instance where any employee is unable to make a living from an alternative field of work due to limited skills? Is the restraint to exercise one’s expertise and profession on economic development within an open democratic dispensation fair or unfair? How long rather would this restraint last while the experienced job-seeker struggle to sustain their own lives instead of starting their own businesses unconditionally? All these questions necessitate eminent and extensive research around these areas futuristic. References Babbie, E. & Mouton, J. (2007). The Practice of Social Research. South African Edition. Oxford University Press: Cape Town. Constitution of the Republic of South Africa. (1996). Government Printers: Republic of South Africa, Pretoria.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Christie, R. H. (2006). The Law of Contract in South Africa 5 Edn. Norman’s Law of Purchase and Sale in South Africa 5 Ed. (2005) by R. H, Zulman & G Kairinos. Dunn, J. (1994). Democracy: the Unfinished Journey 508 BC – 1993 AD. Oxford University Press. Flyvbjerg, B. (2012). Rationality and Power: Democracy in Practice. The University of Chicago Press available online at [Retrieved August 20, 2013] Fotopoulos, T. (1992). Direct and Economic Democracy in Ancient Athens and its Significance Today. Democracy & Nature, 1(1) available online at [Retrieved August 20, 2013] Fouche, M. A. (Ed.). (2013). Legal Principles of Contracts and Commercial Law. 7th Edn. LexisNexis: South Africa. Griswold, D. (2007). Trade, Democracy and Peace: The Virtuous Cycle, available online at [Retrieved September 14, 2013] Halperin, M. H., Siegle, J. T. & Weinstein, M. M. (2005). The Democracy Advantage: How Democracies Promote Prosperity and Peace. Routledge. Hutchison, D., Pretorius, C. J., Du Plessis, J., Eiselen, S., Floyd, T., Hawthorne, L., Kuschke, B., Maxwell, C. & Naude, T. (2010). The Law of Contract in South Africa. Oxford University Press: Southern Africa. Inglehart, R. (1997). Modernization and Postmodernization. Cultural, Economic, and Political Change in 43 Societies. Princeton University Press. Köchler, H. (1987). The Crisis of Representative Democracy. Peter Lang. Lehobye, N. M. (2011). Common-Law Principles of Law of Contracts: Enhancement for Strategic Management. A Working Book. Lipset, S. M. (1959). Some Social Requisites of Democracy: Economic Development and Political Legitimacy. American Political Science Review, 53(1), 69–105. Maxwell, J. A. (2005). Qualitative research Design: an Interactive Approach. 2nd Edn. Thousand Oaks: Sage Publications, CA. Nussbaum, M. (2000). Women and Human Development: the Capabilities Approach. Cambridge University Press. Raaflaub, K. A., Ober, J. & Wallace, R. W. (2007). Origin of Democracy in Ancient Greece, University of California Press. Remenyi, D. (1998). Central Ethical Considerations for Masters’ and Doctoral Research in Business and Management Studies. South African Journal of Business Management, 29(3), 109 Republic of South Africa. (1996). The Constitution of the Republic of South Africa of 1996. Government Printers, South Africa. Tannsjo, T. (2008). Global Democracy: The Case for a World Government. Edinburgh University Press. Weatherford, J. M. (1988). Indian Givers: How the Indians of the America Transformed the World. New York: Fawcett Columbine. 117– 150. Whitehead, L. (2002). Emerging Market Democracies: East Asia and Latin America. JHU Press.

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Participant observation in a case study on web design process of e-retail website *Rashdan Bin Rashid, Shahizan Hassan Othman Yeop Abdullah Graduate School, Universiti Utara Malaysia, Malaysia *[email protected]

Abstract: Studies on developing models for e-retail implementation for consumer co-operative business are very scarce. Co-operative businesses appear to be anxious about going into online retailing since Malaysian Internet shopping is still new, customers are not very familiar and skeptical towards online shopping. Consequently a case study (participant observation) will be undertaken in this study to accomplish main aim in implementation Content Management System (CMS)in developing design process of consumer co-operative website. Web design process model by Kiatruangkrai et al. (2010) and Goi(2007a) have been the foundation guideline in designing the website. Package selection web based application has been used in design stage which can easily help non professional web developer to design their online shopping website. As a conceptual paper, this research is limited to literature and prior research. It offers the benefit to new direction for further research on web design process model. This paper provides researcher with a proposed model of web design process. The proposed model should also be tested in relation with e retail business. Keywords: Content Management System (CMS), participant observation, e-retail, design process, co-operative business 1. Introduction Changes in the economy, politics, environment, market liberalization, emergence of new technologies and development of Information and Computer Technology (ICT) demand the co-operatives to be more innovative in doing business to enhance their competitiveness and resilience (Dasar Koperasi Negara 2011-2020, 2010). Initiatives such as Small Retailer Transformation Programme (TUKAR) and Get Malaysian Business Online (GMBO) were introduced by the government due to the potential of the Internet to enhance business and allow enterprise to operate e-commerce at a low cost. Indeed, the Internet has become the means for firms and consumers to conduct businesses. The impact of World Wide Web (WWW) has been so huge in retail sector which has resulted into a new form of retail format known as electronic retailing or e-tailing (Zetty Madina et al., 2011).Despite the government’s initiatives and programmes to spearhead the utilisation of the internet for business, little is known about how traditional business can provide competitive advantage and make it appealing to customer in the e-retail business market (Delafrooz, Laily, & Khatibi, 2010; Haque, Sadeghzadeh, & Khatibi, 2006).Empirical evidence indicates that there are several reasons as to why there are less attention and interest given to e-retail. Ultimately, cost is the major reason found to be linked with the less participation of doing online business (Burke, 2002; Haque et al., 2006; Kauffman & Walden, 2001; Norzieiriani, Azizah, & Ramayah, 2010; Paynter & Lim, 2001).Nonetheless, most of the studies on online shopping web design or site building seemed to rely on a single methodology, which is quantitative methodology and many are related to identifying web design variables. Wherease-retailers should have some form of methodology/standard/best practise guide for web design project (Taylor, McWilliam, Forsyth, & Wade, 2002).Extensive review on previous research on web design. there are lack of research that used case study methodology. Web developer introduces web Content Management System (CMS) in helping web designers to solve issues in web design process which the non-professional can easily and quickly develop website in the practical application (Zhao & Du, 2010). CMS in web design package selection is a tool that can make the website design less complicated (Nurminen, Wikman, Kokkinen, Muilu, & Grönholm, 2008; Zhao & Du, 2010). This conceptual research paper differs as it is designed to stress on the incorporation of CMS in web design process model because a proper participant observation in a case study web design process using CMS package selection in ecommerce is still rarely studied and should be revised to accommodate the need of non-professional developers. 2. Literature Review According to Goi (2007) a good quality website is not solely based on the perception of the web developer but also based on the customers’ acceptance and perception towards it. The website design should be simple and should not confuse potential customers who might not be familiar with online shopping (Khatibi, Haque, & Khaizurah, 2006). The model of website design must has credibility for consumer to be rely on (Bailey, 2005). Thus, it is essential that online shopping through websites is designed to make it easy, simple and convenient (Haque et al., 2006). Such as research by Hausman and Siekpe (2009)which indicate that tool bars (e.g. button, dropdown menu, check box, etc.) and web design features (e.g. background colour, visual images, information density, etc.) have had an impact on useful, informative and entertainment.Previous researchers (academia) study on various factors in website design such as, information needed, business responses and e-mail, security of consumers’ transaction, payment and credit policies, shipping and handling costs; and guarantees about product quality in an empirical study using single methodology to get customers’ acceptance (Delafrooz et al., 2010; Sharma et al., 2007; Teo, 2006; Wu, 2003). Those researchersare focusing on finding the relationship between variables as the posibility of making website an effectiveness. While in web design research among IT researchers are mostly on the architacture of CMS in various context such as portal, library, education and e commerce (Benzing, 2006; Cheek, Shehab, Ung, & Williams, 2011; Islam, 2011; Nurminen et al., 2008) in web design. Table 1: Summary of previous research on web design Researcher Focus Siddiqui, O’Malley, Retail Information, Customer McColl and Birtwistle Information, Site Features, Online (2003) shopping capabilities, Online Payment Method, Distribution Capacity and fulfillment customer expectations Bailey (2005) Consumer awareness,

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Method Exploratory Qualitative Method

Types of website Online fashion website

Questionnaire

Product review website

Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Hausman (2009)

and

Siekp

Seman et al. (2009) Bamasoud (2010) Noorfadzilah et (2010) Liu et al, (2010) H. Im and Ha (2011)

al,

Use Web interface: Usefulness Informativeness Entertainment Irritation Attractiveness, Motivation

Lab experiment Questionnaire

and

Dell.com website

and

Telecommunication website in Malaysia

User Interface

Experimental Interview, Questionnaire Usability Testing

Web development

Case study

Shopping2u.com

Web design and Implementation Enjoyment, Situational Involvement,

Case study Online experiment survey

Customized Course website Two mock website

Visual

Style,

and

Landsend.com

e-commerce website

Researcher suggested businesses to innovate a form of method for web development project(Taylor et al., 2002). In order to benefit from this innovative technology, co-operatives should be able to adapt with this new paradigm shift of doing business.However, the opposite is found in the co-operatives business environment in Malaysia. Co-operative businesses appear to be anxious about going into online and have been proven by limited website among the retail co-operatives establishment found in Malaysia. Previous research by Yousept and Li (2005), used case study of ASDA.com to describe the challenges in building and developing an online grocery business in UK. The research illustrates the development stage and critical aspects of ASDA.com’s web store. The illustrations were more on managerial aspects experience but not on technical aspects on the development of the web store. An example of process model in web design studies in general can be seen on a few models and terms. Other terms in showing the web design process commonly used by IS researcher are web engineering and software engineering. Four basic principles of web engineering can be described similarly to system engineering: clearly defined goals, systematic development of a web application in phases, careful planning of the phases and continuous audit (Kappel, Proll, Reich, & Retschitzegger, 2003). However, web engineering approach may lead to complex applications that are difficult for non-professional web designer to use and to maintain (Cunliffe, 2000). Those life cycle models are suitable for professional web designer and using complex applications. Some organisations tend to implement a package selection in order to overcome complex application. Weaver (2004) explained that some systems are being implemented using a package selection especially in standard applications such as accounting and in a small business where resources are limited. There were two process model that suitable to be adapted for this research because directly in the context of e-commerce. According to Zhao and Du (2010), Web site Content Management System is a website application platform for web design. It enables user to quickly develop, maintain, manage the dynamic website and lend structure and manage contents online (Islam, 2011).Kiatruangkrai et al. (2010) proposed a method specifically in CMS and e-commerce environment to design and develop a website. This research has identified four stages for the development process.Table 1 described the summary of stages in CMS for e-commerce. Table 2: Summary of CMS stages for e commerce Stages Description Requirement Gathering Survey and Observation. Asked employers and interviews firms that used CMS. Design Involved System Architecture, System Functions, User Interface, System Security and database Implementation

Develop using HTML, CSS and PHP Language

Testing Unit testing, Integration testing and System Testing Source: (Kiatruangkrai et al., 2010) Goi (2007a) reviewed the relevant web site development models. The research mentioned that in a website design, the purpose of particular web site was developing either for information design, transactional design or both. The study categorised website development into four stages: The initial part of the study discussed the Planning and Preparation Stage which was to gather information about personnel and skills, facilities and equipment, software, financial investment and time commitment. Subsequently, the Development and Design Stage which focused on the tangible content and design was evaluated in the study. Followed by, the Management and Maintenance Strategy were monitoring and reviewing website pages. Lastly, the Internet Marketing which was involved in managing the function of communication, transaction and distribution. The study specifically reviewed the relevant web site development models on e-commerce website but not practically be tested in end user business environment. According to Kappel et al. (2003), given an appropriate web design process model, inexperienced web designer may be able to reduce the complexity of the applications, improve usability, maintainability and can also achieve user acceptance. Web design process model by Kiatruangkrai et al. (2010) and Goi(2007a) involved in e-commerce environment and the stages are suitable to be adapted for this research. 3. Methodology The research seeks explanation through participant observation case study on the process of web design on co-operative e-retail website. It is a bottom-up approach where from the case study research, researcher will build the process model (Eisenhardt, 1989). An outcome will be a co-operative e-retail website.Case Study method will be employed to develop process model of e-retail website for cooperative. For the purpose of website design, this study will uses a software tools called Content Management System (CMS) package

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) selection application to design the website. Single case study will be used as Tuanku Syed Sirajuddin Polytechnic Co-operative Limited will be the case. According toTaylor, McWilliam, Forsyth and Wade (2002) case study is appropriate for investigating current IT practice because it can help researcher to overcome the problem of terminology and verification compared to other research methods. However, it is a time consuming nature of study and difficult to gain access to the organisations. Iacono, Brown and Holtham (2009) stated that case study is suitable to the information systems in organization because management can focus on organization rather than on technical issues. Furthermore, IS researchers are often unable to provide guidance on how to manage the introduction of new systems due to continuous revolutionary change and lag behind practitioners. Hence, participant observation which has been associated with qualitative methods offer the chance to obtain unique insights into the organization or social group and fully accepted for IS research (Iacono et al., 2009). Researcher acts as a participant-observation. According to Yin (2009) participant-observation is a special mode of observation whereby researcher actually participates in the events being studied. In the case study, the issue is to what extend can the findings be extrapolated to the theory that the researcher designed to test (Brannen, 1992). This gives shoppers a more realistic sense of how the applications operate and the benefits they provide, allowing accurate assessment of value (Burke, 2002). Participant observation demands first hand invovement in the study because researcheris as an instrument, researcher hears, sees, and begins to experience reality as the participants do,and researcher’s presence in the lives of the participants(Marshall & Rossman, 2009). Even according to Jorgensen (1989), the methodology of participant observation is exceptional for studying processes, but participant observation is especially appropriate for scholarly problems whenthere are important differences between the views of insiders asopposed to outsiders, the phenomenon is somehow obscured from the view of outsiders and the phenomenon is hidden from public view. In short, then, the methodology of participant observation provides direct experiential and observational access to the insiders' world of meaning the world of everyday life. The major criticsm on participant observation is the potential lack of objectivity because the researcher is not an independent observer but a participant whereas the phenomenon being observed is the subject of research (Iacono et al., 2009). A field test can also provide detailed information on the costs of installing and maintaining technology, highlight issues of employee acceptance and training, and provide feedback on competitive response. This research follow Iacono et al. (2009) in managing participant observation whereby they have include subjective experience and their own experience. In order for researcher to understand, develop and manage the actual process in web design, participant observation is appropriate for this research. Figure 1 shows the activities and tasks during the participant observation technique. Figure 1: The main stages in the proposed web design process model methodology

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Planning and Requirement will be on the review of literature especially on process model and the identifying management requirement. Presenting to Board of co-operative is to get managerial approval from the board of co-operative. The researcher will review the literature on the relevancies of stages in web design, web development and web engineering. In addition, this research will also review on the justification for co-operative to venture in online shopping business such as on identifying target market and products identification. In the development and design stage, researcher conducts case study through participant observation technique. The particular website is developed by using CMS package approach. There are many webhosting service providers that provide online shopping platforms in Malaysia such as www.netbuilder.com.my, webserver.com.my, lelong.my, exabytes.com.my, webshaper.com.my and others. There are many e-commerce CMS web application pre-loaded at webhosting services such as Zen Cart, Magento, Freeway, osCommerce, phpShop etc. Comparison will be conducted among the selected web hosting providers based on the requirements. In the evaluation stage, usability testing is conducted, purposive sampling is used which only includes students at Tuanku Syed Sirajuddin Polytechnic due to time limitation. Focus group will be conducted with the minimum sample size of 3-5 participants (Creswell & Miller, 2000). Implementation stage is the launching of the website. The distribution of task among team members in order to manage products and orders will be documented in documents. Team members also undergo training on related tasks. Since that Goi, (2007b) insert Internet Marketing in the stages, this research will show the integration of Facebook to the product list. Statistical report on sales, Facebook and Google analytical will be reported. Both researcher will be adapted as a process model due to certain condition. The process model was related directly with the usage of CMS and in e commerce environment. In order to enhance the process, this research will also further the study by testing the process model in an e-retail environment. 4. Discussion and Conclusion There are significant gaps between academia and practitioner in implementation of e retail business. Academia publications are appear to concentrate on identifying web design variables (empirical single methodology) whereas practitioners are more on web designing process model (case study). This research developed a process model to explain various stages of developing e-retail website in cooperative business. It explains activities and tasks need as an ideal framework for such purposes on doing e retail business. To illustrate the use of the processes model, researcher will participate in the process on co-operative e-retail business. References Bailey, A. A. (2005). Consumer awareness and use of product review websites. Journal of Interactive Advertising, 6(1), 68–81. Benzing, M. (2006). Luwak: a content management solution. Library Hi Tech, 24(1), 8–13. doi:10.1108/07378830610652077 Brannen, J. (1992). Combining qualitative and quantitative approavhes: an overview. Mixing Methods: Qualitative and Quantitative Research (1–37). Avebury. Burke, R. . (2002). Technology and the customer interface: What consumers want in the physical and vitual store. Journal of the Academy of Marketing Science, 30(4), 411–432. Cheek, G., Shehab, M., Ung, T. & Williams, E. (2011). iLayer: Toward an Application Access Control Framework for Content Management Systems. 2011 IEEE International Symposium on Policies for Distributed Systems and Networks, 65–72. doi:10.1109/POLICY.2011.28 Creswell, J. W. & Miller, D. L. (2000). Determining validity in qualitative inquiry. Theory into Practice, 39(3), 124–131. Cunliffe, D. (2000). Developing usable web sites - a review and model. Internet Research: Electronic Networking Applications and Policy, 10(4), 295–307. Dasar Koperasi Negara 2011-2020. (2010). (1st ed., pp. 1–39). Suruhanjaya Koperasi Malaysia. Delafrooz, N., Laily, H. P. & Khatibi, A. (2010). Students’ online shopping behavior : An empirical study. Journal of American Science, 6(1), 137–147. Eisenhardt, M. (1989). Building theories from case study research. The Academy og Management Review, 14(4), 532–550. Goi, C. L. (2007a). A review of existing web site models for e-commerce. Journal of Internet Banking and Commerce, 12(1), 1–17. Goi, C. L. (2007b). 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The effects of Malaysian hotels services on customer loyalty *Yousef Keshavarz, HosseinNezakati Universiti Putra Malaysia (UPM), Malaysia *[email protected]

Abstract: In recent years, the tourism industry has become more important in terms of the global economy. It is revealed that inbound tourism has become one of the major trade categories. Like other countries in Malaysia several industries involve to attract tourists in the country. The hotel industry is one of these industries affects tourists to be satisfied and desire to visit the place again. Service quality is the most important factor by which hotels influence their guests to be loyal; therefore in this study the effect of service quality on tourist loyalty will be investigated. Factors of service quality, which affected from the expected service quality and affect tourist loyalty, include tangible, reliability, responsiveness, assurance and empathy. In this study, guests of hotels, apartments and budget hotels are considered as the research population and 500 respondents from both domestic and international tourists are selected by clustering sampling. The finding of this study is helpful for hoteliers to understand the demands of their customer from different countries with different cultures and plan new strategies to meet their needs and influence them to be loyal on hotels. Keywords: Hotel industry, service quality, guest loyalty, Malaysian tourist industry 1. Introduction Service sector which were limited in scope and nature until twentieth century changed and enter to sphere of human activity such as insurance, welfare, information technology, hotel and etc. and approximately two-thirds of GNP from most countries specially developed ones are accounted by this sector(Sandhu & Bala, 2011). As other industries, hotels are faced competitive environment to serve increasing number of tourists especially in Malaysia(UNWTO, 2011). It is shown that around 45% of tourists` daily expenditures are expended on accommodation and 91% of this is directly spent in international tourist hotels(Hsieh & Lin, 2010). Hotel managers need to find strategies to win in competition with rivals. It is shown that 78% of executives in western countries and Japan believe that the key factor in hotel to compete with others is service improvement(Lin, 2005). Hotel industry in Malaysia is one of the most important industries which help to tourist industry, hence economic development in country. Since 2008 when 566 hotels were registered in Malaysia, so many hotels have built and the rate has continuously increased (Radzi, Zahari, Muhammad, Aziz, & Ahmad, 2011). So in 2012 there were 1736 qualified hotels, apartments and budget hotelsin Malaysia (malaysia, 2012).These hotels make all their effort to promote their share in Malaysian hotel industry by attracting more tourists from both domestic and international groups. Therefore they must have strategic plan to affect them to be satisfied and loyal to hotel. In this research try to know the most important factors by which hoteliers affect exist and potential customers to choose the hotel as their best selection for stay and be loyal to the hotel. In particular this research tries to answer following questions:  What variables are important to use by Malaysian hotels to affect their customers` perceive about services quality?  Which variables in Malaysian hotels do affect tourist to be satisfied?  What factors in Malaysian hotels do influence on tourist`s loyalty? Research background: Lovelock (1983) stated that hotels based on services have five characteristics include: 1) Tangible and intangible services provided by hotels for visitors` bodies and mind respectively 2) Hotels get membership in purpose of relationship with customer for both separate and continue service delivery. 3) Hoteliers want to be recognized as high level of customer service provider and low level in personnel contact exercise to meet customer needs. 4) Demand for hotels is widely fluctuated over time. 5) The way of providing service influence hotels to attract customers. Chan and Wong (2006) argued that hotel service attributes which is mentioned in several research, are divided in two categories including intangible attribute such as dependability, security, reputation, service quality and staff behavior and tangible attributes such as appearance of facilities, price, word of mouth, advertising , communication past experience and familiar name. Ten basic categories to evaluate service quality includes: reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding and knowing the customer and tangibles and they called it SERVQUAL(Parasuraman, Zeithaml, & Berry, 1985). In 1988 they simplify these multiple item scales to five dimensions includes: tangibles, reliability, responsiveness, assurance; and empathy(Parasuraman, Zeithaml, & Berry, 1988). After their survey about dimensions of SERVQUAL they defined these five dimensions include:  Tangibles: equipment, physical facilities and appearance of personnel are defined as tangible dimensions  Reliability: ability to perform expected service which promised dependably and accurately  Responsiveness: this dimension is defined as “willingness to help customers and provide prompt service”.  Assurance: Employees with courtesy and knowledge who able to inspire confidence and trust (process)  Empathy: Individualized attention and caring provided by company to its customers SERVQUAL model was modified during the time. For example(Ting, 2003) used SERVQUAL technique to provide gap between customer expectation of service quality and service provided in hotel industries and guide hotel managers to improve the quality. Ekinci, Prokopaki, and Cobanoglu (2003) used modified SERVQUAL to realize that customers are more interested from intangible service qualities than tangible. They conclude that customers choose hotels based on location, facilities, service quality, consumption price, hotel reputation, exterior appearance and security respectively. Saleh and Ryan (1991) found five dimensions in hotel industry as service quality dimensions called conviviality, tangibles, reassurance, empathy and avoid sarcasm that were different from SERVQUAL method. Conviviality was recognized as the most important dimension in this research. SERVQUAL was used as a basic to develop and design

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) LODGSERV instrument by Knutson, Stevens, Wullaert, Patton, and Yokoyama (1990). In this research they used LODGSERV to measure service quality in hotels and five service quality dimension were found called reliability, assurance, responsiveness, empathy and tangible. In this research reliability was released as the best dimension of service quality. Mey, Akbar, and Fie (2006) did research in Malaysian hotels by using modified SERVQUAL model to assess the Asian and non-Asian guests` perception and expectation. It is found from the research that, although it was not significant different wit Asian customers in all five dimensions (reliability, responsiveness, assurance, empathy and tangibility), the Malaysian expectation between Malayan with nonAsian customers were significantly different. In term of perception there were not different between Malayan and Asian customers except in assurance dimension however the differences between Malayan and non-Asian customers were significant and it was same for customer satisfaction. Cleanliness, spacious, comfort and well-maintained rooms, convenient location and accessibility, safety and security and room facilities such as safety features in the bathrooms, better lighting, easy to handle door knobs, supporting mattresses and chairs are categorized as intangible aspect of hotel service. In addition courteous and prompt service quality, convenient parking, food value of restaurant exterior aesthetics and interior décor are provided by researches as major contributors of hotels which affect customer satisfaction(Poon & Low, 2005). In research carried out by Jaafar, Abdul-Aziz, Maideen, and Mohd (2011) chaos and complexity theory was provided to explain the complexity of relationship between elements of tourism system. Therefore they believed that entrepreneur characteristics were the important factor for tourist development.Anderson and Simester (2004)argued that customer react toward unfairness issues is more drastic than fairness matters and they will be distressed when they face perceived that price is unfair. In fact this issue contributes to emotional part in financial decision making. Refer perceived price fairness is defined by Xia, Monroe, and Cox (2004) as assessment and associated emotions of customer to answer the question whether the difference and coequality of between hotels` and room rates are acceptable, reasonable or justifiable. (Radzi et al., 2011). Customer loyalty is defined as “customer intention or actual behavior to repeatedly purchase certain product or services”(Nezakati & Keshavar, 2012).Loyalty is considered as two aspects. Although some researchers had recognized it as behavioral aspects (Auh& Johnson, 2005; Cyr Hassanein, Head& Ivanov, 2007; Oliver, 1999), concept or attitudinal aspect of loyalty is also considered by other researchers (Balabanis, Reynolds, & Simintiras, 2006; Bloemer, Ruyter&Wetzels, 1999; Carpenter& Fairhurst, 2005). There are several researches had supported the idea that satisfaction lead to loyalty ((Heitmann, M., Lehmann, D. R., & Herrmann, 2007; Zeithaml, V. A., Berry, L. L., & Parasuraman, 1996). Therefore in this research try to investigate the effect of variables such as perceived service quality and expected service quality on tourist satisfaction and the effect of tourists satisfaction on tourist loyalty in Malaysian hotels, apartments and budget hotels. Hypotheses and model: According to previous literature the main hypothesis and model in which the relationship between variables recognized are provided below: H1: expected service quality has significant affect on perceive service quality H2: perceived service quality has significant affect on tourist satisfaction H3: expected service quality has significant affect on tourist satisfaction H4: tourist satisfaction has significant affect on tourist loyalty. Perceived service quality (I V) •Tangibles •Reliability • Responsiveness •Assurance •Empathy

H3

Tourist satisfaction (MO V)

H1

Expected service quality (I V)

H4

Tourist loyalty (D V)

H3

•Word of mouth •Personal needs • Past experience

2. Methodology In this research a quantitative method and for data gathering, self-administered questionnaire will used. Domestic and international tourists who are staying in hotels (from1 to 5 stars), apartments and budget hotels in nationwide of Malaysia are chosen as the samples. Table 1 shows the detail information about hotels apartments and budget hotels in Malaysia base on states.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Table 1: Number of Hotels, Apartments and Budget Hotels in Malaysia Row States Hotel 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Perlis Kedah P. Pinang Perak Selangor N. Sembilan Melaka Johor Pahang Kelantan Terengganu Sabah Sarawak K. Lumpur Putrajaya Labuan

Total

Budget hotel

Total

0

3

6

57

0

21

78

8

56

0

32

88

6

1

56

1

69

126

18

11

13

85

0

53

138

6

8

9

0

29

5

19

53

16

17

12

7

3

55

1

67

123

20

29

21

9

4

83

1

62

146

12

24

24

15

4

79

1

79

159

2

13

6

1

1

23

0

41

64

5

14

9

3

4

35

0

48

83

41

42

35

15

9

142

1

105

248

18

13

25

13

6

75

1

125

201

28

35

27

19

24

133

14

55

202

0

0

0

1

2

3

0

0

3

4

7

1

1

2

15

0

3

18

205

272

223

139

90

929

25

782

1736

1* 1

2* 1

3* 0

4* 1

5* 0

Total 3

9

13

16

10

9

5

17

8

18

14

22

13

24

19

6

Apartment

Source:malaysia (2012) Therefore based on above information sampleing method which is used to select the respondents from all hotels, apartments and budget hotels in malaysia is clustring by which first hotels, apartments and budget hotels are selected by random and in selected hotels, apartments and budget hotels respondents will be selected. To gather data questionnair will used. This questionnaire is divided in to three parts. First part is designed to collect data from Malaysian hotels tourists` expectation and perception about hotel services and in the second part their satisfaction from services and loyalty toward hotel is evaluated. The third part is designed to collect demographic information. This section covers the demographic variables, including ethnic group, religion, gender, age, marital status, education level, employment status, occupation, and income level. In this research variables which affect perceived service quality are provided from the modified SERVQUAL model of Parasuraman and other factors based on the literature and researcher experience added to develop the new model. These factors are:  Expected service quality which has 3 dimensions includes word of mouth, personal needs and past experience.  Dimensions of service quality include Tangibles, Reliability, Responsiveness, Empathy, and Assurance  Tourist satisfaction, as one of the most important factors provided in several researches and affected from perceived service quality(Cronin, Brady, & Hult, 2000; Liat & Rashid, 2011) Tourist loyalty: this factor is a common factor which is provided in several studies(Oliver, 1999; Skogland & Siguaw, 2004; Tanford, Raab, & Kim, 2012; Weber, 2001) Sample size: Sample is representative of population (Greener, 2008). Large sample size affect on generalize the findings o the population and minimize the error. Therefore in sample setting sample for statistical analysis and for any category must be determined (Green, 1991). According to Green (1991) estimate sample size for multiple regression is N= 50 + 8 (m). In this formula N is sample size and m is the number of indicators. In this research there are 10 indicators. Therefore based on mentioned formula the number of sample size is 50 + 8 (10) = 130. Therefore the minimum sample size for this study is 130, but to avoiding of statistical error at least 300 respondent will selected as sample.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) 3. Conclusion The importance of customer satisfaction and loyalty is provided by many researches and it has believed that affect firms to have competitive advantage ( see for example Abdul-Rahman & Kamarulzaman, 2012; Anderson, E. W., & Sullivan, 1993; Rauyruen, P., & Miller, 2007; Yi, Y., & La, 2004). Therefore, in this study, try to investigate the factors in hotels, apartments and budget hotels which affect on tourist satisfaction and loyalty.The result of this study is useful for hotelier to make new strategy base on their guest attitude, because this research reveal the factors which is important for tourists to be satisfied and loyal to hotel. In fact in this research the dimensions of service quality and their affects on tourist satisfaction and loyalty are investigated. Reference Anderson, E. & Simester, D. (2004). Charging different prices for the same item: Do fairness concern impact future demand. (phd), Kellogg School of Management, Unpublished doctoral dissertation. Chan, E. S. W. & Wong, S. C. K. (2006). Hotel selection: when price is not the issue. Journal of Vacation Marketing, 12(2), 142-159. Cronin, J. J., Brady, M. K. & Hult, G. T. M. (2000). Assessing the effects of quality, value, and customer satisfaction on consumer behavioral intentions in service environments. Journal of retailing, 76(2), 193-218. Ekinci, Y., Prokopaki, P. & Cobanoglu, C. (2003). Service quality in Cretan accommodations: marketing strategies for the UK holiday market. International Journal of Hospitality Management, 22(1), 47-66. Green, S. B. (1991). How many subjects does it take to do a regression analysis. Multivariate behavioral research, 26(3), 499-510. Greener, S. (2008). Business Research Methods.[e-book] Dr. Sue Greener and Ventus Publishing ApS. Available through:[Accessed 9 May 2011]. Hsieh, L. F. & Lin, L. H. (2010). A performance evaluation model for international tourist hotels in Taiwan—An application of the relational network DEA. International Journal of Hospitality Management, 29(1), 14-24. doi: 10.1016/j.ijhm.2009.04.004 Jaafar, M., Abdul-Aziz, A. R., Maideen, S. A. & Mohd, S. Z. (2011). Entrepreneurship in the tourism industry: Issues in developing countries. International Journal of Hospitality Management, 30(4), 827-835. Knutson, B., Stevens, P., Wullaert, C., Patton, M. & Yokoyama, F. (1990). LODGSERV: A service quality index for the lodging industry. Journal of Hospitality & Tourism Research, 14(2), 277-284. Liat, C. B. & Rashid, M. Z. A. (2011). A STUDY OF SERVICE QUALITY, CUSTOMER SATISFACTION, CORPORATE IMAGE AND CUSTOMER LOYALTY IN THE HOTEL INDUSTRY IN MALAYSIA. Paper presented at the Contemporary Research Issues and Challenges in Emerging Economies. Lin, C. H. (2005). Relationship between guest perception of service quality and customer loyalty in the hotel industry in south. Lynn university, Florida. (unpublished dissertation) Lovelock, C. H. (1983). Classifying services to gain strategic marketing insights. The Journal of Marketing, 9-20. malaysia, ministry of tourist. (2012). registerd hotels. malaysia: ministry of tourist malaysia Retrieved from http://www.motour.gov.my/en/check/registered-hotel.html?hotel=&negeri=&rpt. Mey, L. P., Akbar, A. K. & Fie, D. Y. G. (2006). Measuring service quality and customer satisfaction of the hotels in Malaysia: Malaysian, Asian and non-Asian hotel guests. Journal of Hospitality and Tourism Management, 13(02), 144-160. Nezakati, H. & Keshavar, Y. (2012). To Explore Hotel Service Factors Effect on Increasing Tourist Loyalty-Malaysia Evidence (Preliminary Study). Journal of Education and Vocational Research, 3(12), 415-418. Oliver, R. (1999). Whence consumer loyalty. Journal of Marketing, 63(4), 33-44. Parasuraman, A., Zeithaml, V. A. & Berry, L. L. (1985). A concepyual model of service quality and its implications for future research journal of marketing, 49, 41-50. Parasuraman, A., Zeithaml, V. A. & Berry, L. L. (1988). SERVQUAL- A Multiple-Item Scale for Measuring Consumer Perceptions of Service Quality. journal of Retailing, 64(1), 12-40. Poon, W. C. & Low, K. L. T. (2005). Are travellers satisfied with Malaysian hotels? International Journal of Contemporary Hospitality Management, 17(3), 217-227. Radzi, S. M., Zahari, M. S. M., Muhammad, R., Aziz, A. A., & Ahmad, N. A. (2011). The effect of factors influencing the perception of price fairness towards customer response behaviors. Journal of Global Management, 2(1), 22-38. Saleh, F. & Ryan, C. (1991). Analysing service quality in the hospitality industry using the SERVQUAL model. Service Industries Journal, 11(3), 324-345. Sandhu, H. S. & Bala, M. N. (2011). Customers’ Perception towards Service Quality of Life Insurance Corporation of India: A Factor Analytic Approach. International Journal of Business and Social Science, 2(18), 219-231. Skogland, I. & Siguaw, J. A. (2004). Are your satisfied customers loyal? Cornell Hotel and Restaurant Administration Quarterly, 45(3), 221234. Tanford, S., Raab, C. & Kim, Y. S. (2012). Determinants of customer loyalty and purchasing behavior for full-service and limited-service hotels. International Journal of Hospitality Management, 31(2), 319-328. doi: 10.1016/j.ijhm.2011.04.006 Ting, K. H. (2003). A study of factors that influence the hotel service quality. (master ), Chaoyang University of Technology,, Taichung,Taiwan. UNWTO. (2011). UNWTO Tourism Highlights: World Tourism Organization (UNWTO) Weber, K. (2001). Association meeting planners’ loyalty to hotel chains. International Journal of Hospitality Management, 20(3), 259-275. Xia, L., Monroe, K. B. & Cox, J. L. (2004). The price is unfair! A conceptual framework of price fairness perceptions. Journal of marketing, 115.

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Empirical Analysis of Foreign Capital Inflows and Economic Growth in Nigeria Ehigiamusoe, Uyi Kizito National Institute for Legislative Studies, National Assembly, Abuja, Nigeria [email protected] Abstract: The paper examines the impact of foreign capital inflows on economic growth in Nigeria using secondary data covering the period 1980-2012. It adopted econometric techniques such as ordinary least squares method, Johanson’s cointegration techniques and vector error correction model to investigate the relationship. Evidence from the study revealed that though a long-run relationship exists between foreign capital inflows and economic growth in Nigeria, but their impact on growth is not statistically significant especially in the long-run.But in the short-run, the current and one period lagged values of foreign direct investment have positive and significant impact on growth, though the magnitude of the impact is infinitesimal. While the current values of foreign aid and foreign portfolio investment have positive and significant impact on economic growth, their one period lagged values have negative impact on growth in the short-run. The behaviour of foreign loans in the short-run shows that its current and one period lagged values have positive and significant impact on the growth. It was therefore recommended that government should embark on the development of infrastructure, agriculture, transportation network as well as create the political atmosphere, consistent policies, security and appropriate macroeconomic indices which are fundamentally germane for the growth of domestic investment in Nigeria. Keywords: Economic growth,foreign capital inflows, foreign direct investment, Foreign aid,foreign portfolio investment, foreign loans. 1. Introduction A country’s international financial situation as reflected in its balance of payments and its level of monetary reserves depends not only on its current account balance but also on its balance on capital account. According to Todaro & Smith (2009), majority of non-oil exporting developing countries historically have deficits in their current account balance, hence a continuous net inflow of foreign financial resources account for an important ingredient in the long-run development strategy. These foreign capital inflows are fundamental for the achievement of targeted resources for investments in the key sectors of the economy as well as accelerated poverty reduction strategy. International flow of financial resources takes three major forms namely, private foreign direct and portfolio investment which consist of foreign direct investment by large multinational or transnational corporations and foreign portfolio investment in stocks, bonds, notes, etc. The second is remittances of earning by international migrants, and thirdly, public and private development assistance (foreign aid) from individuals national governments, multinational donor agencies and private Non-Governmental Organizations (NGOs). However, Obadan (2004) classified external capital flows into three broad categories namely; official development finance, export credits and foreign private flows. Despite the contributions of international multinational, bilateral and non- governmental organizations to the development strides in Nigeria, it appears that the more assistance the country gets the higher the poverty, unemployment and conflict levels. The country’s population is growing at geometrical progression without corresponding growth in basic infrastructure and social amenities such as electricity, good roads, potable water, health, educational facilities, etc. The real sector of the economy is comatose with low capacity utilization in the industrial sector coupled with underdeveloped agricultural and ailing transport sectors. The cities are congested due to high rural-urban migration and poor urban planning and most citizens who could no longer bear the congestion associated discomforts had either legally migrated to developed countries or sought asylum. Analysts have been asking what had happened to resources generated from oil and gas productions as well as the financial assistance from many international organizations to Nigeria. With external and domestic debt profile as at March, 2013 put at $6.670 billion and N6.493 trillion, respectively, (by the Debt Management Office, 2013) the future of the country is seen by many as uncertain. The basic arguments for the developmental impact of foreign capital inflow in the context of development it tends to foster can be summarized in four gaps (Todaro & Smith, 2009). Firstly, foreign capital is seen as a way of filling the resource gaps between the targeted or desired investment and locally mobilized savings. Secondly, it contributes to filling the gap between targeted foreign exchange requirements and those derived from net export earnings. The third gap filled by foreign capital inflows is the gap between targeted government tax revenue and domestically raised taxes. Finally, foreign capital inflows also fill the gaps in management, entrepreneurship, technology and skills, by transferring them to host nation by means of training programs and the process of learning by doing. There is no general consensus among researchers on the relationship between foreign capital inflows and economic growth. Arguments abound for and against the role of foreign capital inflows in the growth and development process in developing countries. Empirical studies in this regards showed mixed results. Some studies (Papanek, 1973; Aurangzeb & UI-Haq, 2012) disaggregated foreign capital inflows into the basic components and analyzed their impacts on economic growth. Evidence from the studies showed that some of these components (foreign direct investment, foreign aid, and foreign loans) have positive and significant impact on growth, while others have negative relationship. As for foreign aid, empirical literatures reveal mixed results on its relationship with economic growth. Karras (2006), Dalgaard et al (2004); Gomanee et al (2003); Hansen and Tarp (2000); Dowling & Hiemenz (1982) and Papanek (1973), show that foreign aid has positive impact on economic growth. On the other hand, some empirical studies have debunked this positive impact and insisted that the relationship between aid and growth is negative. Among them are Brautigam & Knack (2004) and Burnside & Dollar (2000). While Doucouliagos & Paldam (2009), Jensen & Paldam (2003), Boone (1996)and Mosley (1980), found evidence to conclude that aid has no impact on economic growth. Analogously, while several empirical studies have shown that foreign direct investment can be beneficial to the host country and contribute to economic growth and development (see Romer 1990; Grossman & Helpman 1991; Li &Liu 2005; Bulasubramanyam et al 1996; Javorcik 2004; Mansfield & Romeo 1980; Findlay 1978 and Moran 2006), others evidently proved that foreign direct investment do more harm than good to the host country and thereby inhibit economic growth and development (see Firebaugh 1992; Reis 2001; Carkovic & Levine 2005 and Choe 2003). As the arguments on the impact of foreign capital inflows on economic growth persist, it

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) becomes necessary to examine the veracity of the relationship between foreign capital inflows and economic growth in Nigeria. Most previous studies in this regard focused on other developing countries while those related works that focused on Nigeria examined the impact of the components of foreign capital individually on economic growth. What this study seeks to achieve is to holistically examine the total impact of foreign capital inflows on economic growth in Nigeria. Therefore, the broad objective of this study is to examine the impact of foreign capital inflows on economic growth in Nigeria. Specifically, the study seeks to examine the issues surrounding foreign capital inflows in Nigeria and proffer policy options for the country. Following this introduction, the remaining part of the paper is divided into five parts. Section two presents the conceptual and empirical issues. Section three contains the methodology adopted in the study, while section four contains data analysis and presentation of econometrics results. Section five presents the major findings of the study, policy implications and options and the final section concludes the paper. Theoretical and Empirical Issues Theoretical Framework: The theoretical foundation for foreign capital-led economic growth hypothesis of a country can be considered to be the neoclassical and endogenous growth models. Economic growth according to the neoclassical growth theory stems from enlargement in the quantity of factors of production (labour and capital in a simple two factor world) as well as their efficient allocation and utilization. The neoclassical growth model opined that capital accumulation and technological progress are the engines of economic growth and this capital can be sourced internally or from outside the country. It is the belief of the neoclassical growth theorists that foreign capital can make the required funds available and channel same to the productive sectors of the economy especially in a capital deficient economy to accelerate economic growth through increase in marginal productivity of capital. This is so because many developing countries have abundant manpower but lack adequate capital due to inadequacy of domestic saving mobilization. This inhibits capital formation and economic growth. Even when domestic capital and manpower are available in adequate quantity, productivity may still be constrained by limited foreign inputs such as machines which the production of goods and services in developing economies rely on. This further stressed the importance of foreign capital inflows in order to close the saving-investment gap in developing countries. The neoclassical economists also view foreign capital inflows as a more reliable and less volatile (except foreign portfolio investment which is highly volatile) sources of capital for developing economies that can augment economic growth (Lipsey 1999; Moosa & Cardak 2006 and Uwubanmwen & Ajao2012). On the other hand, the endogenous growth theories state that the long-run growth of a country is not only influenced by the volume of physical investment but also depends on the efficiency of utilizing investment. Therefore, endogenous growth model had focused on incorporating organizational, managerial, technical and human skills, innovation and technological progress, and accumulation of knowledge endogenously in the growth theories (Romer 1986; Lucas 1988 and Mankiw et al 1992). According to Uwubanmwen & Ajao (2012), in the endogenous growth model, the long-run economic growth is viewed as depending on the level of technological development arising from technology transfers and knowledge spill-overs (Grossman & Helpman 1991 and Romer 1994). The argument that foreign capital inflow is positively correlated with economic growth is situated in growth theory that emphasizes the role of improved technology, efficiency and productivity in promoting growth (Lim 2001). As developing nations embrace foreign capital inflows targeted at achieving rapid and sustainable growth, expansion in foreign direct investment, foreign aid, foreign portfolioinvestment and foreign loans are at the centre of the overall strategy. The expansion of the export sector is expected to come from a more efficient resource allocation system that trade liberalisation entails, improved international competitiveness of domestic production achieved through an increased role of foreign capital. Foreign capital is believed to be the main conduit through which technology is transferred in addition to the flow of managerial expertise which provide linkages to external markets (Mafusire, 2001). Most developing countries in Africa, Asian and Latin America are capital scare country and as such may need foreign capital inflows to bridge the saving-investment gap for growth and development. Foreign capital inflows are seen as growth-enhancing variables and have consequently received great attention of developed countries in general and less developed countries in particular in recent decades. The renew emphasis on foreign capital inflows is not unconnected to the fact that domestic savings alone cannot accelerate investment but need to be complemented by foreign capital. Consequently, capital from abroad has been identified as an important catalyst for economic growth, especially in low income countries where capital is scarce. It has significant impact on economic growth through several channels such as; increasing human capital formation, facilitate technology transfer in the host countries, diffusion of knowledge, stimulating domestic investment, among others. Conceptual Issues: Foreign capital inflows can be considered as all types of capitals that come into the domestic country from other countries, and can be in different forms such as grants, loans, foreign direct investment, foreign aid, export credit, project/non-project assistance, technical assistance and emergency relief, among others.According to Jhingan, (2010), foreign capital inflows refer to the inflow of capital from one country to the other, and they do not relate to the movement of goods or payment for exports and imports between countries. They take place through government, private and international organizations or agencies. The following have been identified as the components of foreign capital. First, foreign direct investment which consists of foreign investor investing in the capital receiving country in the form of cash, raw materials, machinery, technical knowhow, expertise, etc. It may take the form of starting a subsidiary investing concerns; establishing a company financed exclusively by the foreign concerns; setting up a corporation for assembling the parent product, its distribution, sales and exports; formation of a company with a majority holding the collaboration with local company or partners; and creating a fixed assets in investing in infrastructure like power plants, refineries, roadways, etc.Direct private investment is mostly made by Multinational Corporations (MNCs) or Transnational Corporations (TNCs). The second component of foreign capital inflows is portfolio or indirect investment. These are private investment in the form of portfolio investment such as holdings of transferable securities, shares, and debentures of the capital receiving countries purchased by foreign private individuals and institutions. Such holdings do not lead to the control of the local company whose shares they purchase. The shareholders are entitled to the dividends only and can withdraw their money anytime by selling their shares. Thirdly, private and government capitals which are the borrowed funds or loans from abroad by private individuals, institutions and the government. Fourth, is foreign aid which is public foreign capital on hard and soft terms in cash or kinds and inter-governmental grants. Aid may be tied by source, projects, and commodities, while untied aid is a general aid, also known as programme aid (Jhingan, 2010).Export credits constitute the final

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) component of foreign capital inflows. These are credits designed to finance specific purchase of goods or contractor’s services. They are commercial credits because they have their origin in the transfer of goods when the exporter and the importer agree to postpone payments to a later date (see Obadan 2004) Empirical Issues: Several studies have examined the relationship between foreign capital inflows and economic development. Most of these studies disaggregated foreign capital inflows into its various components (foreign direct investment, foreign aid, foreign portfolio investment and foreign loans) to find out how each of them individually accelerates economic growth. The Theory suggests that capital should flow from countries of high productivity to countries of low productivity and that foreign capital should accelerate economic growth and development. But evidence from some studies support the view that foreign capital inflows do not necessarily follow productivity especially in recent years and negatively correlate growth in developing countries (Subramanian et al 2006). They adduced three reasons why foreign capital is negatively related to economic growth. Firstly, foreign capital may not be needed because of aggregate domestic savings (endogenously generated savings is the key driver of growth) and as such countries that use more of foreign capital grow slower. Secondly, foreign capital may not help because of little capacity to absorb foreign capital given the level of the development of the financial systems in low income countries because developed domestic financial system is needed to intermediate foreign capital. Thirdly, foreign capital may harm because they are prone to volatility and overvaluation (which result from capital imports and stunts the growth of the key driver of growth which is traded manufacturing industries). Papanek, (1973) in his research work disaggregated foreign capital inflows into three basic components, namely; foreign aid, foreign private investment and other foreign capital. The author surveyed 34 countries in 1950, and 51 countries in 1960 using a cross sectional data and the results showed that all the three components of foreign capital inflows are statistically significant and positively related to growth. Out of the three components the effect of foreign aid on economic growth was the strongest. Aurangzeb & UI-Haq, (2012) decomposed foreign capital inflows into three components and analyzed the impact of foreign capital inflows on economic growth of Pakistan for the period 1981-2010. They observed that the three independent variables (remittances, foreign loans and foreign direct investment) are positive and have significant relationship with economic growth. In addition, the granger-causality test revealed that a bi-dimensional relationship exists between remittances and foreign loans, economic growth and foreign loans, foreign direct investment and foreign loans as well as foreign direct investment and remittances. However, a unidimensional relationship exists between economic growth and foreign direct investment. The author therefore concluded that foreign direct investment is very important for economic growth. Oyinlola, (1995) disaggregated foreign capital into three major components, namely; foreign loans, direct foreign investments and export earnings. He discovered that the impact of foreign direct investment on economic growth is negative while others showed positive relationship to growth. Similarly, Adelegan, (2000) showed in his study that a negative relationship exists between foreign direct investment and economic growth. Using Nigeria as a case study he observed that foreign direct investment is pro- consumption and pro- import and negatively related to gross domestic product. Akinlo, (2004) studied the impact of foreign capital on economic growth in Nigeria, and revealed that foreign capital has a small and not statistically significant effect on economic growth. Also, Ayanwale (2007) analyzed the empirical relationship between non-extractive foreign direct investment and economic growth and found out that foreign direct investment has a positive correlation with economic growth but was however quick to add that the overall effect may not be significant. Herzer, et al (2006) in their study using a bivariate VAR modeling technique found a positive FDI-led growth relation for Nigeria, Sri Lanka, Tunisia, and Egypt. Based on weak exogeneity tests, a long-run causality between foreign direct investment and economic growth running in both directions was observed for the same set of countries (see Nkoro & Allen, 2012). Hameed, et al (2008) analyzed the impact of external debt on economic and business growth in Pakistan using data from 1970-2003. They applied cointegration and error correction model on the annual data and observed that debt servicing has a negative relation with labour and capital, and subsequently affects economic growth adversely. A negative correlation was also found to exist between debt servicing and gross domestic product which reduces the debt servicing ability of the country in the long run. A short run and long run causal relation was also established running from debt to service to gross domestic product. Similarly, Malik, et al (2010) using data from Pakistan for the period 1972-2005 examined the relationship between external debt and economic growth and the results showed a negative and significant relation between external debt and economic growth. The relationship between debt servicing and economic growth also exhibited the same pattern. Though a lot of research works have been conducted on the relationship between foreign capital inflows and economic growth, the issue seems unresolved. Some of the studies find evidence of positive relationship while others find negative relationship between foreign capital inflows and growth. And a third group finds such nexus subtle, and another group finds such relation dependent on domestic policies, country characteristics, economic and institutional environment and donors’ interest. Furthermore, most of the studies on foreign capital flows and growth are cross sectional and such results obtained by cross-country studies must be treated with great caution as they are subject to extreme limitations. Such limitations include; a common economic structure and similar production technology across different countries which appears not be accurate in reality. However, this study attempt to contribute to the existing literatures on foreign capital inflows and economic growth using Nigeria as the case study. 2. Methodology Econometrics methodology is employed in this study as the analytical tool for the examination of the relationship between foreign capital inflows and economic growth. Consequently, the Ordinary Least Squares method is adopted to investigate the long-run relationship between foreign capital inflows and economic growth. The Error Correction Model is also adopted to examine the short-run dynamics. The model states that economic growth is a function of Labour, Physical Capital, Human Capital, foreign direct investment, foreign aid, foreign portfolio Investment and foreign loans. To further examine the relationship between foreign capital inflows economic growth in Nigeria, the study employed Johanson’s Cointegration Test. The secondary data used for this study covering the period 1980-2012 were obtained from the World Bank Database, Central Bank of Nigeria Statistical Bulletin, National Bureau of Statistics, Global Development Finance Statistics and International Development Statistics.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Model Specification: The standard methodology of growth models begins with the neo-classical production function as extended by Solow (1957). Consider a production function of the form. Y= T f (L K) ---------------------------------------------------------------------------------------- (1) Where, Y= Output, L= Labour input, K= Capital input, and T= Technical change Taking technical change constant, equation (1) becomes Y = A f (L, K) -------------------------------------------------------------------------------------- (2) Re-writing Equation (2) in growth terms and for estimation purpose gives GY = α0 + α1GK + α2GL + U………………………………………………………… (3) In order to examine the impact of foreign capital inflows on economic growth, variables such as foreign direct investment, foreign aids, foreign portfolio investment and foreign loans were introduced into the models to capture the relationship between foreign capital flows and economic growth. Therefore, introducing other endogenous variables into equation (3) in accordance with endogenous growth theory, we arrive at equations (4) Gt = Tt Lα1 Kα2 FCIα3 ------------------------------------------------------------------------------ (4) Where: FCI = Additional Input Note: α1 + α2 + α3 = 1 (assuming constant returns to scale) Given that FCI= f (FDI, AID, FPINV, FLOAN) ----------------------------------------------- (5) Where; FDI = Foreign Direct Investment AID = Foreign Aid FLOAN = Foreign Loans FPINV = Foreign Portfolio Investment Substituting equation (5) into (4) yields equation (6) GDP = α0+ α1L + α2K + α3HK + α4FDI + α5AID + α6FLOAN +α7FPINV + U……. (6) Where; α0= constant term α2,α3,α4, α5, α6 &α7= slope coefficients representing parameters to be estimated. U = Disturbance term assumed to be purely random. On a priori expectation,α1>0, α2>0, α3>0, α4>0, α5>0, α6>0 and α7>0 Before estimating equation (6), the time series property of each variable is investigated through the Augmented Dickey-Fuller (ADF) test for the unit root following Dickey and Fuller (1981). The Phillips-Perron (PP) test is also used to confirm the ADF test following Phillips and Perron (1988). The general form of ADF and PP test is estimated in the following forms. 𝑛

α𝑌𝑖 + δt + εt − − − − − − − − − − − − − (7)

ADF: → ∆𝑌𝑡 = 𝛼0 + 𝛼1 𝑌𝑡−1 + 𝑡=1

PP:→ ∆𝑌𝑡 = 𝛼0 + 𝛼1 𝑌𝑡−1 + εt − − − − − − − − − − − − − − − − − − − (8) Where Y is a time series, t is a linear time trend, ∆ is first difference operator, α0 is a constant, n is the optimum number of lags in the dependent variable and 𝜀𝑡 is a random error term. In order to solve the spurious regression problem and violation of the assumptions of the classical regression model, cointegration analysis is used to examine the long-run relationship between GDP and L, K, HK, FDI, AID, FPINV, FLOAN. To test for cointegration, Johansen-Juselius test (Johansen-Juselius, 1992, 1999) is used. In order to know the disequilibrium error, equation (7) is re-written as: et = GDPt – α0Lt – α1Kt – α2 HK t – α3FDIt – α4AIDt – α5FPINVt – α6FLOANt ………..(9) The order of integration of the estimated residual, et is tested. If there is a cointegration regression, then the disequilibrium errors in equation (4) form a stationary time series, and have a zero mean, the et should be stationary, I(0) with E(et) = 0. The long-run equilibrium may be rarely observed but there is a tendency to move towards equilibrium. Thus, Error Correction Model is used to represent the long-run (static) and short run (dynamic) relationships between GDP and other variables. Accordingly, Vector Error Correction Model (VECM) is suitable to estimate the effect of foreign capital inflows GDP. Thus, equation (3.14) represents Error Correction Model. GDPt= lagged (∆Lt, ∆Kt, ∆HKt, ∆FDIt, ∆AID,t, ∆FPINVt,∆FLOANt) – 𝜔𝑒𝑡−1 + 𝜇𝑡 … … … . (10) Where 𝜔𝑒𝑡 -1 represents the residual term at t-1 in long term. Vector Error Correction Model (VECM) is a test for whether the short-run relationship exists in equation only. Following the works of Onafowora (2003), Gomez & Alvarez-Ude (2006), and Uwubanmwen & Ajao (2012), The Johanson-Juselius test is used to perform hypothesis tests about the number of the short-run relationship which exists in equation. The cointegration test under the Johansen (1992, 1999) uses a vector specification error correction introducing k lags as follows: 𝑛−1

+∆𝑌𝑡−1 + εt … … … … … … … … … … … . . (11)

∆𝑌𝑡 = 𝛼 + 𝑏𝑑𝑡 + 𝜋𝑌𝑡−1 + 𝑡=1

Where, Yt is a vector of order (2x1) variables integrated of order one. The cointegration test in two stages test is based on estimating the following regression: Xt = αbpt + 𝜇𝑡 …………………………………………….………… ……….. (12) k

di∆𝜇𝑡−1 + θt … … … … … … … … … … … … … … … … … … … . . (13)

∆𝜇𝑡 = ∁Ut−1 + t−1

Where: Xt and Pt respectively denote the logarithm of GDP and other variables K is the number of lags Ut and θt are error terms

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) On the evidence of cointegrating relationship, a vector error correction model (VECM) is estimated to model the long run causality and short run dynamics. The purpose of VECM model is to indicate the speed of adjustment from the short run equilibrium to the long run equilibrium state. The greater the coefficient of the parameter the higher the speed of adjustment of the model from short runs to long run. Considering our base equation (6), the VECM model is specified as follows: 𝑛

𝑛

∆𝐺𝐷𝑃𝑡 = 𝑎0 + 𝛽1 𝑛−1 𝑛

+𝛽6

∆Lt−1 + 𝛽3 𝑛−1

𝑛

∆AIDt−1 + 𝛽7 𝑛−1

𝑛

∆GDPt−1 + 𝛽2

𝑛−1

𝑛

∆HK t−1 + 𝛽5 𝑛−1

∆FDIt−1 𝑛−1

𝑛

∆PFINVt−1 + 𝛽8 𝑛−1

𝑛

∆K t−1 + 𝛽4

∆FLOANt−1 + 𝛽𝑖 𝐸𝐶𝑀 −1 + 𝜀𝑡 … … … … … … … … (14) 𝑛−1

Where εt is the error term, ECM(-1) is the error correction term, βi captures the long run impact. The short run effects are captured through the individual coefficients of the differenced terms (α) while the coefficient of the ECM variable contains information about whether the past values of variables affect the current values. The size and statistical significance of the coefficient of the ECM measures the tendency of each variable to return to the equilibrium. A significant coefficient implies that past equilibrium errors play a role in determining the current outcomes. In order to determine whether changes in one variable is a cause of changes in another, we employed the Granger (1988) causality test which is a method of investigating whether A causes B. Variable B is said to be Granger-caused by variable A; if A helps in the prediction of B or if the coefficients on the lagged A’s are statistically significant. The main idea of causality is quite simple, if A causes B, then changes in A should precede changes in B (Pindyck and Rubinfield 1998). Since the time series variables are found to be stationary, the Granger causality test is performed as follows: ∆Yt = α1 + β11 ∆Yt−1 + β12 ∆Yt−2 + ⋯ + β1n ∆Yt−n + y11 Ft−1 + y12 Ft−2 + ⋯ + y1n Ft−n + ε1t … … … … … … … … … … … … … … … … … … … … … … … … … . . (15) Ft =α2 + β21 Ft−1 + β22 Ft−2 + ⋯ + β2n Ft−n + y21 ∆Yt−1 + y22 ∆Yt−2 + y2n ∆Yt−n + ε21 … 16 Where n is a suitably chosen positive integer; βj and yj, j = 0, 1… k are parameters and α’s are constant, while Ut’s are disturbance terms with zero means and finite variances. (∆Yt is the first difference at time t of the time series variables). 3. Empirical Results, Interpretation and Analysis. Unit Root Tests: The unit root test was conducted to ascertain the stationarity of the data before estimation using both the Augmented Dickey Fuller (ADF) and the Philips-Perron (PP). The results of the test presented in Table 1 shows that all the variables (except human capital) are stationary at levels at 1 per cent significant level. Since the Augmented Dickey-Fuller (ADF) and Philips-Perron (PP) tests revealed that all the variables (except human capital) in the model are stationary at levels at 1 per cent significant level, the hypotheses that state the presence of unit roots in all the variables under consideration (except human capital) are rejected for all the variables. This shows that all the variables included in the model are stationary at level while human capital is stationary at first difference at 1 per cent significant level Given the unit-root properties of the variables, we proceeded to conduct the cointegration test to ascertain the long-run relationship between foreign capital inflows and economic growth. Table 1: Unit Root Test Results Variables ADF Test Statistic Level RGDP -3.887678* L -5.057361* K -6.593542* HK -0.587516 FDI -4.191882* AID -5.356829* FPINV -4.165359* FLOAN -5.620006*

Philips-Perron Test Statistic Level 1st Difference -3.887678* -11.21530 -26.38254* -48.83359 -6.533110* -11.78056 -0.516179 -5.951414 -7.511566* -13.39970 -5.356829* -10.13523 -4.165359* -7.062274 -5.620006* -8.933733

1st Difference -7.478464 -9.443407 -11.64149 -4.265148 -7.150196 -6.974604 -6.246555 -7.274514

1% Critical Value -3.6496 -3.6496 -3.6496 5% Critical Value -2.9558 -2.9558 -2.9558 10% Critical Value -2.6164 -2.6164 -2.6164 *indicates significant at 1% or a rejection of the null hypothesis of no unit root at the 1% level

Conclusion I(O) I(O) I(O) I(1) I(O) I(O) I(O) I(O)

-3.5973 -2.9339 -2.6048

Johansen Cointegration Test Results: The Johansen Cointegration test result in Table 2 showsthe existence of four cointegrating equations at 5% significance level in the model. The hypothesis which states there is no long-run relationship betweenforeign capital inflows and economic growth is rejected at 5% significance level. This implies that there exists a long-run relationship between financial capital inflows and economic growth in Nigeria. Date: 11/02/13 Time: 10:00 Sample: 1980 2012 Included observations: 31 Test assumption: Linear deterministic trend in the data Series: RGDP L K HK FDI AID FPINV FLOAN Lags interval: 1 to 1

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Table 2: Johansen Cointegration Test Results Likelihood 5 Percent Eigen value Ratio Critical Value 0.924074 250.6834 156.00 0.817468 170.7655 124.24 0.747009 118.0398 94.15 0.698397 75.43334 68.52 0.432996 38.27544 47.21 0.318780 20.68637 29.68 0.238238 8.786386 15.41 0.011247 0.350638 3.76 *(**) denotes rejection of the hypothesis at 5%(1%) significance level L.R. test indicates 4 cointegrating equation(s) at 5% significance level

1 Percent Critical Value 168.36 133.57 103.18 76.07 54.46 35.65 20.04 6.65

Hypothesized No. of CE(s) None ** At most 1 ** At most 2 ** At most 3 * At most 4 At most 5 At most 6 At most 7

The Long Run Regression Results: Having conducted the unit rootand cointegration tests, we proceeded to obtain the long-run results of the relationship between foreign capital inflows and economic growth using the ordinary least squares method. The result presented in table 4.3 reveals that all the variables in the model (foreign direct investment) satisfy the a priori expectations with respect to their signs. Butforeign direct investment has anegative impact on economic growth but the relationship is not statistically significant. labour, physical capital, human capital, foreign aid, foreign portfolio investment and foreign loans have positive impact on growth in the long-run but only labour and human capital are statistically significant at 10 per cent significant level. This means that a unit increase in labour and human capital will increase economic growth by 7.8 per cent and 4.6 per cent, respectively. The adjusted R2 indicates the variations in the dependent variable that are explained by variations in the independent variables and the Durbin Watson statistic of 1.8 suggests that the model is free from serial auto correlation. Dependent Variable: GDP Method: Least Squares Date: 11/02/13 Time: 09:36 Sample: 1980 2012 Included observations: 33 Table 3: Long Run Regression Results Variable C L K HK FDI AID FPINV FLOAN R-squared Adjusted R-squared S.E. of regression Sum squared resid Log likelihood Durbin-Watson stat

Coefficient -2.474510 7.835264 0.046224 0.659453 -0.000933 0.031751 0.016323 0.001755 0.427271 0.266906 4.231631 447.6675 -89.84943 1.812225

Std. Error 2.462916 10.34398 0.021003 0.306989 0.005201 0.026223 0.015922 0.023106 Mean dependent var S.D. dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic)

t-Statistic -1.004707 0.757471 2.200806 2.148132 -0.179395 1.210791 1.025222 0.075962

Prob. 0.3247 0.4558 0.0372 0.0416 0.8591 0.2373 0.3151 0.9401 3.760606 4.942288 5.930269 6.293058 2.664376 0.033228

But the estimation result in table 3 seems to be unsatisfactory for a number of reasons. First, most of the variables in the model are not statistically significant. Secondly, the coefficient of multiple determinations (Adjusted R-Square) is low as over 70 per cent of the total variation in the dependent variable is unexplained by variations in the explanatory variables. Thirdly, the F- statistic is also low. Consequently, the need arises therefore, to investigate the short-run dynamics using the residuals from the cointegration regression as the error correction term. Vector Error Correction Model Results: The Vector Error Correction Model allows modeling adjustments that lead to a long run equilibrium relationship among the variables where a unidirectional long term causal flow runs from changes in the growth rates of foreign capital inflows to the growth rate of gross domestic product in Nigeria. To capture the short-run dynamics using the residuals from the co-integration regression as the error correction term, the estimated coefficient of the error correction term ECM (-1) shows a negative (-0.133044) and statistically significant values in terms of its associated t-value (-0.993903) and probability value (0.0334). Starting with the over-parameterised model, we then tested down (dropping the variables with low t-statistic) until we arrived at our preferred parsimonious model as shown in table 4.4. The result reveals that all the variables in the model (except the lagged values of foreign aid and foreign portfolio investment) satisfy the a priori expectations with respect to their signs. The lagged values of foreign aid and foreign portfolio investment have negative impact oneconomic growth in the short-run. But foreign direct investment, foreign aid, foreign portfolio investment and foreign loans have positive and significant impact on growth.This means that a unit increase in foreign direct investment, foreign aid, foreign portfolio investment and foreign loans will increase economic growth by 0.8 per cent, 4.0 per cent, 4.9 per cent and 3.2 per cent, respectively. This implies that economic growth can be accelerated by an increase in foreign direct investment, foreign aid, foreign portfolio investment and foreign loans. It is important to say that the contribution of foreign direct investment to growth in Nigeria is infinitesimal (0.8%).However, the lagged values of labour, capital and human capital are negatively

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) related to growth. Also, while the lagged values of foreign aid and foreign portfolio investment have negative and significant impact on growth, the lagged values of foreign direct investment and foreign loans have positive and significant impact on growth. The adjusted coefficient of determination (R2) of 76.3 shows a reasonable explanatory power of the modelas 76.3 per cent of the variations in the endogenous variable is accounted for by variations in the exogenous variables. The F-statistics of 8.72 suggests that good interactive feedback effect exists within the model, while the Durbin Watson statistic of 2.3 indicates a good fit and an absence of autocorrelation. Dependent Variable: GDP Method: Least Squares Date: 11/02/13 Time: 09:44 Sample(adjusted): 1981 2012 Included observations: 32 after adjusting endpoints Table 4: Short-Run Parsimonious Model Results Variable Coefficient C -5.643948 HK 2.649097 FDI 0.008819 AID 0.047416 FPINV 0.049047 FLOAN 0.032557 L(-1) -19.46391 K(-1) -0.014498 HK(-1) -1.545121 FDI(-1) 0.013338 AID(-1) -0.053240 FPINV(-1) -0.017066 FLOAN(-1) 0.039951 ECM(-1) -0.133044 R-squared 0.862907 Adjusted R-squared 0.763895 S.E. of regression 2.439603 Sum squared resid 107.1299 Log likelihood -64.73894 Durbin-Watson stat 2.363368

Std. Error 2.075461 0.915630 0.004004 0.017860 0.011792 0.017777 6.210043 0.013449 0.860641 0.003263 0.018268 0.009798 0.014343 0.133860 Mean dependent var S.D. dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic)

t-Statistic -2.719371 2.893195 2.202292 2.654872 4.159366 1.831456 -3.134264 -1.078028 -1.795315 4.088378 -2.914444 -1.741808 2.785283 -0.993903

Prob. 0.0141 0.0097 0.0409 0.0161 0.0006 0.0836 0.0057 0.2953 0.0894 0.0007 0.0093 0.0986 0.0122 0.0334 3.746875 5.020730 4.921184 5.562443 8.715208 0.000027

Summary of Major Findings and Policy Implications: The findings of the study can be summarized as follows: Firstly, a long-run relationship exists between foreign capital inflows and economic growth in Nigeria. This finding agreed with the finding of Uwubanmwen & Ajao, (2012) who revealed the presence of a long-run equilibrium relationship between foreign direct investment and economic growth in Nigeria. Secondly, the current and one period lagged values of foreign direct investment have positive and significant impact on the growth rate of gross domestic product in the short-run, though the magnitude of the impact is infinitesimal.In the long-run, foreign direct investment has negative and insignificant impact on growth. The implication is that the government should not bother about the inflow of foreign direct investment into the country if the aim of government is to accelerate economic growth.Instead, the policy options opened to the government is to embark on the development of infrastructure, agriculture, transportation network, political atmosphere, consistent policies, security and appropriate macroeconomic indices which are fundamentally germane for the growth of domestic investment in Nigeria. Thirdly, while the current value of foreign aid has positive and significant impact on economic growth, theone period lagged value of foreign aid has negative and significant impact on growth in the short-run. But in the long-run, foreign aid has a positive and insignificant impact on growth. This implies that the foreign aid received by Nigeria only has positive and significant impact on the economy in the first year, but has a deleterious effect on the growth of the economy in the following year. This agreed with the discoveries of Mosley, (1980) and Jensen & Paldam, (2003) who found evidence to suggest that foreign aid has no impact on growth in developing country. Since the one period lagged value of foreign aid is deleterious to growth the government should adopt a policy option that would reduce its dependence on foreign aid. Similarly,the current value of foreign portfolio investment has positive and significant impact on economic growth, while the one period lagged value of foreign portfolio investment has negative and significant impact on growth in the short-run. But in the long-run, foreign portfolio investment has a positive and insignificant impact on growth.This indicates that as foreign portfolio investment increases in Nigeria, the gross domestic investment of the country will increase in that current year but decreases in the following year. Though, foreign portfolio investment cannot be relied on as an instrument of growth given it volatility, effort should be made by the government to create the enabling environment for foreign investors to invest in portfolio in Nigeria. In this regards, attention should be focused on the development of the money and capital markets as well as other relevant macroeconomic indicators which are essential for the growth of foreign portfolio investment. Furthermore, the behaviour of foreign loans shows that its current and one period lagged values have positive and significant impact on the growth rate of gross domestic product in the short-run.But in the long-run, foreign portfolio investment has a positive and insignificant impact on growth. This shows that foreign loans can be utilized to accelerate economic growth in Nigeria. This finding however disagreed with the finding ofHausmann & Fernandez-Arias, (2000) who found no evidence in their study to support any significant correlation between foreign loans and economic growth, or between foreign loans and economic development. They opined that foreign loans are falsely marketed to developing countries as a solution to their underdevelopment. Finally, other variables in the model such as labour, physical capital and human capital have positive and significant impact the growth especially in the long-run. This means that as labour, physical capital and human capital increase, economic growth will also increase.

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Policies should be put in place by the government to further encourage the growth of labour, physical capital and human capital, and any variable that tends to undermine their growth should be discouraged. 4. Conclusion The paper examined the impact of foreign capital inflows on economic growth in Nigeria using secondary data covering the period 19802012. It adopted econometric techniques such as ordinary least squares method, Johanson’s cointegration techniques and vector error correction model to investigate the relationship. Evidence from the study revealed that though a long-run relationship exists between foreign capital inflows and economic growth in Nigeria,but their impact on growth isnot statistically significant especially in the long-run. But in the short-run, the current and one period lagged values of foreign direct investment have positive and significant impact on the growth rate of gross domestic product, though the magnitude of the impact is infinitesimal. While the current values of foreign aid and foreign portfolio investment have positive and significant impact on economic growth, their one period lagged valueshave negative impact on growth especially in the short-run. The behaviour of foreign loans shows that its current and one period lagged values have positive and significant impact on the growth rate of gross domestic product in the short-run. It was therefore recommended that government should embark on the development of infrastructure, agriculture, transportation network as well as create the political atmosphere, consistent policies, security and appropriate macroeconomic indices which are fundamentally germane for the growth of domestic investment in Nigeria. References Adams, R. H. (2005). 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The Role of Environmental Dynamism on Outsourcing Performance in Malaysia Mohamad Ghozali Hassan*, Rohani Abdullah, Mohd Rizal Razalli College of Business, Universiti Utara Malaysia *[email protected] Abstract: This research aims on the environmental dynamism and outsourcing success. In this research, outsourcing success will affected by three dimensions in environmental dynamism: (a) customer demand, (b) level of competition, and (c) technology changes. A postal survey of electrical and electronic manufacturing industries in Malaysia was used to collect data. The findings from the data collected by the hand delivery survey showed support for the hypotheses of the research. Hierarchical regression analysis was carried out to determine the moderating effect of environmental dynamism on outsourcing success. The result of the research indicated full support of these moderating effects. This paper presents a useful source of information for practitioners that seeks to improve the outsourcing performance. Keywords: Outsourcing success, E&E manufacturing, market competition, customer demand 1. Introduction According to the International Trade and Industry Ministry of Malaysia, Datuk Seri Mustapa Mohamed, engaging and communicating actively within local and international levels are important to improve and enhance national competitiveness. Therefore, companies could stand out from the competition with the appropriate and successful local or international outsourcing. Generate greater value is generated by outsourcing, and competitive edge has been enhance while they focus solely on their core competencies. When they rely heavily on the outsourcing partner for operations and processes that out of their area of expertise, this in turn saves them resources. Research as well indicates that the primary initial reason for companies to start outsourcing is cost savings. This synergy is helpful to both parties in terms of monetary and non-monetary in the short and long run. As a result, competitiveness and financial performance, cut costs, increase capacity, productivity, efficiency, and profitability of an organization can improve through the successful outsourcing implementation strategy (Elmuti, 2003). Greater efficiencies and cost reductions are two drives that motivating organizations to specialize in limited key areas and practice outsourcing (McIvor, 2010). Nowadays, small medium companies outsource almost everything from administrative services, knowledge-intensive services, cleaning and catering services to information technology (Perunovic, Christoffersen, & Mefford, 2012). Outsourcing have enabled companies to improve their overall business performance when they do not have to take care of the non-core business operation. Moreover, some companies are able to access to the new markets, more resources and more advanced technology and skills which further enhance their competitive advantage in the competitive and rapidly expanded market through outsourcing. However, the uniqueness of some resources is the competitive advantage that helps organization stand out from the competition and the scare resources should be held only in the organization. Therefore, resources are a valuable asset to an organization to counter threats and exploit opportunities, the organization should be in the implementation of the outsourcing strategy of resource allocation. As said by the resource-based theory, every single company is a unique bundle of assets, resources that if employed in distinctive ways can create competitive advantage. 2. Literature Review Environmental Dynamism: Business operating in environmental dynamisms characterized by the high level of competition within industry, variable customer demand, and rapid technology changes. Environmental dynamism may enhance and increase the effect of outsourcing. Resource-based theory (RBT) is important to a company, as this theory is influential in business strategy decision particularly in outsourcing aspect (McIvor, 2010). He claimed that the unique capability of a firm is essential to create, maintain, and improve its competitive advantage. According to Joongsan and Rhee (2008), technology uncertainties act as a moderator in the Korean automotive industry from Asia perspectives. Thus, this supports that the benefits of outsourcing increases as the increasing of environmental dynamism. Customers demand. D’Aveni and Ravenscraft (1994) claimed that when the industry demand varies, without implementing an outsourcing strategy, the particular firm has to bear a huge amount of expenses in terms of administrative, coordination and information processing cost. Therefore, in this event, outsourcing is recommended, as the risk of declining demand would be shifted to the supplier firms. The inability to forecast accurately the volume requirements or customer demand is defined as volume unpredictability which contributed by the instability of the downstream market and the manufacturer’s share of this market. Therefore, an essential characteristic of collaboration in the face unanticipated change is the required to decline taking short-term advantage of the situation to one party’s unilateral benefit. It is easier to implement when the firm is more assured that both expectations of continuity offer it the capacity to reciprocate forbearance and to react against opportunism. Technology changes. The emerged of technology changes may lead firms to decrease the usage of firm-specific resources and cut down the firm’s internalization process in the long-run. Since firms are allowed to partly transferring the risk of task variability to the intermediate markets with strategic outsourcing, specialized firms in these markets may be better able to achieve cost efficiencies that are difficult for focal firms to achieve by balancing task requirements across multiple customers. Teece (1980) states that as technological uncertainty increases, internal economies of specialization deteriorate in relation to the external economies of specialized firms. Managers may have the flexibility to change suppliers as technological advances warrant by increasing their reliance on manufacturing outsourcing during periods of high environmental dynamism. Strategic outsourcing provides more conventional and organized patterns of exchange within and between firms. It may also act as a coping strategy helping to deal with risk by providing scale economies during periods of technological changes. Level of competition. The level of competition arises from rapid changes in the composition of market share as the results of fast evolving customer demands and preferences. In high level of competitive markets, relationship orientation is more likely to be associated with positive outsourcing performance (Eisenhardt & Martin, 2000).

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) Outsourcing Achievement: According to Elmuti (2003), outsourcing success will help manufacturing firms to enhance their organizational competitiveness and financial performance, cost reduction, and improve profitability, capacity, efficiency, and productivity. This research study describes the outsourcing success from the aspect of strategic performance or internal process. Strategic Performance/Internal Process: Kotabe, Mol, Murray, and Parente (2012) claimed that outsourcing success of a firm relates to its market share. They argued that market share would increase through outsourcing strategy. Outsourcing may be a good alternative to improve performance of a particular firm, particularly in financial aspect in the short run. However, up to a certain extent when the firm further outsources, the market share generally decreases. Kotabe et al. (2012) have further examined, analyzed and empirically confirmed this argument by observing over 19,000 manufacturing firms. Meaning to say, they lost competitive advantages in the long run through excessive outsourcing. For instance, Sony struggled from the competition within the electronic industries. They face crises, as they heavily depend on the electronic manufacturing services instead to produce lithium-ion battery and blue laser diodes. As the consequences, Sony postponed the release of Play Station 3 in the Europe and lost confidence from their consumers. Khong (2005) investigated the effects of outsourcing on customer service quality. He claimed that customer service is an important element driving the success of a company as customers have the right to choose the best product in the competitive market. Therefore, quality customer service management contributed to high customer retention. A survey questionnaire copy was sent to 1000 companies in Malaysia and 124 firms eventually responded. The foundation of the questionnaire was the framework being used in the past research. The findings significant indicated there was a positive relationship between outsourcing and customer service. Meaning to say, companies could improve customer service management through outsourcing. 3. Methodology Sampling Design and Data Collection: According to MIDA (2012), E&E significantly contributes to the manufacturing output (31%), exports (48.7%) as well as employment (33.7%) in the country. The study covers the Malaysian electrical and electronic manufacturers listed on the FMM (2011) directory where the respondents targeted are from purchasing, planning, logistics, materials, corporate executive, and operation or production management level of the selected companies to provide information. They are expected to have adequate knowledge on the operation and management of outsourcing in their organization. The target companies which manufacture a range of electrical and electronic devices, equipment or apparatus were selected based from 12th International Standard Industrial Classifications.The Directory of Federation of Malaysia Manufacturers has been commonly used by various researchers as a database to select population and sampling frame. In this study, there is a total of 865 electrical and electronic companies that are selected as the target respondents as they meet the selection criteria which are suggested by Ying (2006). The criteria stated that one should only consider companies that have more than 100 employees in outsourcing management studies since they are large enough organizations to participate actively in outsourcing management practices. The survey packet contained a cover letter as explained earlier on, the survey instrument brochure and a self addressed envelope. Self addressed envelope was used for the respondents’ ease of returning the questionnaire. The respondents were given approximately four weeks to respond. Then a follow up mail with a replacement questionnaire was sent to increase the rate of response for those who have not responded. These follow-up letters served as a “thank you” to participants and as a reminder to those who had not yet returned their completed surveys. The reconciliation of the survey ends by the eighth week. The study focuses only on the Malaysian electrical and electronic manufacturing companies. The unit of analysis is at the organizational level as the objective of the study is to identify the effect of environmental dynamisms on outsourcing success. A total of 865 survey packets was sent to the entire population to increase the data collection rate. The returned questionnaires are sorted into early and late responses over three to four month period. A non-bias response analysis was conducted. 4. Findings Table 1 presented the analysis and finding of the study. Table 1: Summary of hypothesis testing for the interaction between environmental dynamism and outsourcing success Hypotheses Statement of Hypotheses Remarks Supported HA: a Customer demand has a significant positive impact on the outsourcing success Hypotheses Supported HA: b Level of competition has a significant positive impact on the outsourcing success Hypotheses

HA: HA:

Besides providing the data regarding the general characteristics of the sample and descriptive statistics of the major variables involved in the study. The findings from the data collected by the hand delivery survey showed support for the hypotheses of the study. Hierarchical regression analysis was carried out to determine the moderating effect of environmental dynamism on outsourcing success. The result of the study indicated full support of these moderating effects. The summary of the hypotheses on the relationship between environmental dynamism and outsourcing success is shown in Table 1. Implications of The Study The Managerial Implications: This study also provides practical contributions which can help supply chain managers especially in Malaysia in improving the outsourcing performance. Firstly, electrical and electronic manufacturing industries are facing various challenges in their business environment. These challenges may stem from internal factors such as their employees or external factors such as their competitor and customers. Theoretical Implications: Particularly, this study found the empirical evidence for the theoretical relationship in the research framework. This study has one hypothesis. The hypothesis is fully supported. This study discussed the role of environmental dynamism

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Proceedings of 4th International Conference on Education and Information Management (ICEIM-2013) as a moderator on outsourcing performance of the manufacturing industries is shown in Figure 1. This study found evidence that the manufacturing industries outsourcing performance can be related to the environmental dynamism. In general, outsourcing success is moderated by environmental dynamism which is customer demand and market competition. Figure 1: The Effectiveness of Outsourcing Arrangement Model

IV Relational-Oriented Exchange -

 = 0.638; p