Levers of Control and Managerial Performance: The Importance of Belief Systems

Belief systems, which are one of the four levers of control, play a vital role in an organization. This study is primarily aimed at examining the effects of belief systems on managerial performance. Since the four levers of control jointly function in management control systems, we extend our study by investigating whether the contingent-fit between strategic risk, strategic uncertainty, and the other three levers of control (i.e., boundary systems, diagnostic control, and interactive control) strengthens the association between belief systems and managerial performance. A survey questionnaire was distributed to the upper-level management of various companies or strategic business units in Indonesia during the fourth quarter of 2017, resulting in 81 respondents. Hypotheses testing were conducted using the OLS regression model. This research found that belief systems are positively associated with managerial performance, indicating that the implementation of effective belief systems leads to higher managerial performance. This study also found that the contingent-fit between strategic risk, strategic uncertainty, and the other three levers of control does not have any effect on how belief systems are positively associated with managerial performance. This finding indicates that although management does not adopt a fit combination between its level of strategic risk and strategic uncertainty and the boundary systems, diagnostic control, and interactive control, it can still achieve good performance as long as strong belief systems are implemented. These findings confirm the critical role of belief systems in the levers of control. Thus, management needs to ensure the establishment of more effective belief systems if the company or business unit wants to produce optimal performance.

The Role of Moral Reasoning on the Effects of Incentive Schemes and Working Relationships on Whistleblowing: An Audit Experimental Study

This study examines the role of moral reasoning in strengthening the working relationship and incentive schemes on the likelihood of reporting accounting fraud. This study predicts that higher moral reasoning or being exposed to incentive schemes are more likely to cause someone to be a whistleblower. However, individuals with a close working relationship with wrongdoers will exhibit a lower propensity to blow the whistle than those with no close working relationship. Finally, moral reasoning is expected to interact with working relationships and incentive schemes to affect the propensity to blow the whistle. Based on a lab-experiment with 147 participants, this study documents that the simple effect of moral reasoning, the working relationship, or an incentive scheme is (marginally) significant. Similarly, the combination of moral reasoning and the working relationship significantly improves the tendency to blow the whistle. However, the combined effects of moral reasoning vs. the working relationship and moral reasoning vs. the working relationship vs. incentive scheme are not significant. This paper confirms previous studies which found that moral reasoning significantly alters the whistleblowing intention but that the impact of moral reasoning is not robust for incentive schemes and working relationships. Some limitations should be considered, namely the textual scenarios of the experimental design, working experiences, and the omission of personal orientation and the personal cost of reporting.

Construction and Validation of Indian Consumer Ethnocentrism Scale: The Ice-Scale

Globalization has unlocked and exposed domestic and overseas marketers to superior market opportunities. Additionally, it presents consumers worldwide with a vast number of local and foreign brand choices. Indian consumers, also now, have a broader choice of merchandise at their disposal as economic liberalization and privatization along with globalization have reduced the barriers to trade. In such a setting, the concept of consumer ethnocentrism can deliver deep insights about the preference of consumers toward domestic merchandise. The study aims to develop the Indian Consumer Ethnocentrism Scale (ICE-Scale) and validate the same. Data are collected using a structured questionnaire from urban and rural regions. The study constructed the Indian Consumer Ethnocentrism Scale (ICE-Scale), explored its dimensionality on a sample of 450 respondents, and validated the scale with another sample of 450 using exploratory factor analysis. It was established that the ICE-Scale encompasses two dimensions, namely, protective ethnocentrism and patriotic ethnocentrism. Additionally, the validity testing for the proposed scale and both the constructs were conducted through confirmatory factor analysis. The study advances the existing pool of information in the field of international economics, consumer psychology and global marketing. It also assists domestic producers to get an improved understanding of consumers’ ethnocentric tendencies which in turn would assist them in choosing superior marketing strategies and boosting their sales. The study will not only deliver certain social and policymaking insights to the domestic firms and government but also to the foreign firms functioning or planning to operate in India.

The Relationship Between Household Credit and Banking Stability in Malaysia: Panel Evidence

This study investigates the relationship between household credit and banking stability in Malaysia using a sample of 37 commercial banks spanning the period from 2008 to 2015. In analyzing household credit’s influence on the Malaysian banking sector’s stability, household credit was categorized into two components, namely mortgage and consumer credit. The Banking Stability Index (BSI) for each bank is constructed using 15 bank-specific variables and some macro-economic variables. The determinants of the BSI are estimated using a static panel data technique. The fixed-effects regression results showed a statistically significant negative relationship between both forms of household credit (mortgage credit and consumer credit) upon the banking sector’s stability. The finding signals that understanding the link between household credit and the Bank Stability Index is crucial to the policymakers and the banks’ management in closely monitoring household credit, particularly mortgage and consumer credit.

The Influence of Cause-Related Marketing on Millennials’ Purchase Intentions: Evidence of CSR from an Emerging Economy

Corporate social responsibility (CSR) has been implemented through sponsorships, philanthropy, and cause-related marketing (CRM), amongst which CRM has aroused the interest of many academicians and stakeholders. The study aims to examine the antecedents of cause-related marketing while considering attitude as a mediator to test its relationship with the purchase intention. The snowball sampling technique for data collection was administered to Indian millennial consumers from the regions of Karnataka and Kerala. A total of 313 valid cases were selected for the analysis, which employed partial least squares (PLS) based on structural equation modeling (SEM). The findings have shown that a positive relationship exists between cause participation and purchase intention. Further, product/cause congruence & consumer/cause identification had a positive impact on attitude, while attitude, in turn, showed a favorable association with the purchase intention. This study disclosed the relative importance of the compatibility between the social causes supported by the company with its engaged business while adopting CRM campaigns, and highlighted the need for the involvement of consumers in the CRM programs for their effectiveness.

Dutch Curse on Indonesia: Unemployment by Asian Development Bank (ADB) Loan Projects

The ADB takes more than five years to disburse the agreed-upon loan funds after the borrower signs the loan agreements, because of the conditionalities attached to such loans, compared with it only taking one day for commercial banks to release any agreed loans. During this five-year period, the funds stay in the bank and gain compounded interest, disfavoring Indonesia. Development studies have mostly overlooked these gains and their impacts. Knowing that ADB loans cause about 3% of Indonesia’s unemployment, we reviewed the delay’s impacts during a project’s implementation on unemployment involving 325 ADB loan projects, valued at over $33 billion, from 1969 to 2017. We used a non-econometric methodology by adopting the management principles of the project and portfolio. The results show that the ADB’s loans at 1% GDP initially helped Indonesia reduce its unemployment by 30%. However, because of the ADB’s standard implementation of five years, along with an extra two-year delay (seven years in total) we observed shorter unemployment reductions by half, but then reversed, increased and tripled joblessness. This is also causing Indonesia to suffer capital losses of $0.6 to $12 per $1 of loan money, which is equivalent to 4.98% of its GDP because of the delays in the disbursement of the funds. ADB loans have severe negative effects, with over 200% volatility because of the delays. Fixing this is simple but requires a paradigm shift.

A Technological Innovativeness Measurement Framework: A Case Study of Technology Based Indonesian Companies

The measurement of innovation has been developed by various previous studies with a specific focus and goal. However, the existing measurement framework still cannot be applied all that easily by companies in Indonesia for assessing, evaluating, and improving their innovations. This study aims to propose a measurement framework using a multiple case study approach. Cases were selected from companies in the pharmaceutical and information and communications technology (ICT) industries because they contribute substantially to the manufacturing sector and both are vital to Indonesia. The results of this study indicate that the measurement model of innovation consists of technological innovation and the management of technological innovation. There are three phases in the technological innovation process which include the initiation phase (conceiving ideas and acquiring information, then transforming it into knowledge), the development phase (validating knowledge and checking its appropriateness), and the diffusion phase (getting users' feedback and Go & scaling up). Meanwhile, the management of technological innovation consists of having a strategy, the necessary resources, and operation. The analytical generalization of this study is still considered to be limited, so further studies are needed to analyze cases in other industrial sectors. In addition, a quantitative study is required to construct a measuring instrument for the variables proposed in this study.

Decomposition of intended use of IPO proceeds: Evidence from Malaysia

The main objective of the study is to identify what Malaysian IPO issuers indicate as intended use of IPO proceeds and the use that has the highest amount of allocation. In order to achieve the objective of the study, a manual content analysis of 221 IPO prospectuses issued during the period of 2005-2015 were considered. Based on the manual content analysis, the data were analysed using descriptive statistics and analysis of variance (ANOVA). The results indicate that the three major intended uses of IPO proceeds in Malaysian IPO market are growth opportunities (53.90%), debt repayment (29.12%) and working capital (12.87%). However, growth opportunities and debt repayment have greater amount of allocation than working capital over the sample periods. Additionally results show that Malaysian IPO issuers expend more on capital expenditure and expansion rather than research and development in terms of growth opportunities. Further analysis in terms of the frequencies of number of IPO issuers indicate that number of issuers that have a designated amount for working capital (95%) supersede issuers in the growth opportunities group (90%). These results suggest that issuers can consider intended use of IPO proceeds information as a signal mechanism and potential investors can as well consider the information useful before making their investment decisions.

How market orientation induces small business performance: The role of strategic fits

The purpose of this study is to shed light on how strategic fits between market orientation and the prospector strategy leads to higher performance of small businesses in Vietnam. This study draws from the contingency theory of organization to propose that strategic fits in small businesses represent by prospector strategy's mediating effects on the link between market orientation and these small businesses' performance. Data collected from 161 small businesses in Vietnam was examined. PLS-SEM was used to assess the research framework. The results reveal that the fit between market orientation and the prospector strategy, represented by the full mediating effects of this strategy, is essential to determine the performance improvement of small businesses in Vietnam. For the findings, this study provides some practical implications for small business owners in Vietnam. This study also contributes to the strategic management literature by providing empirical evidence, which suggests the strategic fits between prospector strategy and market orientation induces performance. This study also overcomes the limitations relating to the proposals of the analytic framework to assess strategic fits. Lastly, this study extends to strategic management literature by examining the role of strategic fit in small businesses' contexts.

Role of Leaders’ Emotional Labor toward Leader’s Job Satisfaction and Emotional Exhaustion: Moderating Role of Psychological Capital

Everyone has to manage the emotions during their interaction with others; similar case is with the leaders in organizations. Leaders’ actively and continually regulate their emotional state. The crucial role of emotions in interactional process as well in decision making triggers leaders to be vigilant about their emotional labor strategies. Thus emotional labor has become an emerging construct in leadership domain. This study has collected data from 250 doctors working in private and public hospitals in Gujranwala. Findings demonstrated leaders’ deep acting as well as displaying natural emotions are positively associated with job satisfaction and negatively associated with leaders’ emotional exhaustion. Moreover, surface acting has significant positive relationship with leaders’ emotional exhaustion and negative relationship with leaders’ job satisfaction. Psychological capital significantly moderated the relationship between leaders’ emotional labor strategies, leaders’ job satisfaction and leaders’ emotional exhaustion.