AN APPLICATION OF ACTIVITY BASED COSTING IN THE AIR CONDITIONER MANUFACTURING INDUSTRY

AIRCO is a manufacturer of industrial air conditioner units whose management is concerned that their current traditional cost accounting (TCA) system is not accurately representing their product cost behavior. Under certain operating conditions, an activity based costing (ABC) system can provide relevant and accurate indirect cost information that assists in making customer, product, and process improvement decisions. An ABC system was successfully developed for AIRCO that indicated that their products do not consume overhead costs on a volume basis as represented by their current TCA system. Valuable product and process information were obtained. This case study details the development process that was used and the results that were obtained during the ABC analysis.     

Strong price of anarchy

A strong equilibrium is a pure Nash equilibrium which is resilient to deviations by coalitions. We define the strong price of anarchy (SPoA) to be the ratio of the worst strong equilibrium to the social optimum. Differently from the Price of Anarchy (defined as the ratio of the worst Nash Equilibrium to the social optimum), it quantifies the loss incurred from the lack of a central designer in settings that allow for coordination.We study the SPoA in two settings, namely job scheduling and network creation. In the job scheduling game we show that for unrelated machines the SPoA can be bounded as a function of the number of machines and the size of the coalition. For the network creation game we show that the SPoA is at most 2. In both cases we show that a strong equilibrium always exists, except for a well defined subset of network creation games.     

East Meets West: A Cross-Cultural Comparison of Charismatic Leadership Among Canadian and Iranian Executives

ABSTRACT This study first develops an empirically based Western charismatic leadership profile. Using confirmatory factor analysis, the profile is compared with a profile of Iranian managers. The results demonstrate that despite major cultural differences in the two countries, there are core similarities in the profiles across the two cultures. The Canadian charismatic profile of vision, tenacity, intellectual challenge, self-sacrifice, and eloquence is substantially confirmed within the Iranian sample. But we also show that Iranian managers' ratings are significantly lower than those of the Canadian managers, indicating potentially different behavioural manifestations. The paper speculates that while the differences are probably due to cultural differences, the similarities may be due to universal intrinsic human desire for morality, autonomy, and achievement.     

Dynamic efficiency assessment of the Chinese hotel industry

The paper introduces for the first time a totally dynamic two-stage approach to analyzing the hotel industry's technical efficiency at the sub-national level. The first stage uses data envelopment window analysis (DEWA) to assess regional hotel sectors' technical efficiency over time. Unlike previous studies, the second stage uses a dynamic Tobit model to investigate the impact of macro contextual factors on the hotel sector efficiency. The study chooses the Chinese hotel industry during the period 2001-2006 as its application setting. The findings of the investigation indicate that the Chinese hotel industry is approaching an efficient operation in general, recovering from a major dip in 2003 resulting from the Severe Acute Respiratory Syndrome (SARS) outbreak. In addition, the study introduces a novel two-dimensional efficiency-based matrix to assess the competitive advantage of different regions of the Chinese hotel sector. The paper presents strategic market implications for hoteliers, government decision-makers, and destination management organizations. The proposed methods are applicable for situations in which an exogenous event of a destabilizing impact (e.g., SARS) does occur.     

Interpretive structural modeling of quality factors in both medical and hospitality services in the medical tourism industry

This study aims to theoretically integrate quality factors of both medical and hospitality services in medical tourism. Medical tourism comprises both medicine and tourism. Although the core product in medical tourism is medical treatment, attractive hospitality and travel options are also essential. Despite the dual nature of medical tourism, the two aspects of this concept have not been integrated in a unique framework. This study attempts to fill this gap using interpretive structural modeling (ISM). According to ISM, although factors of medical services and hospitality services are independent from each other, these factors have vital impacts on perceived value, satisfaction, and loyalty.     

The effects of labor supply shocks on labor market outcomes: Evidence from the Israeli–Palestinian conflict

Since September 2000, as a result of mobility restrictions, the supply of Palestinian workers competing for local jobs in the West Bank has increased by about fifty percent. This paper takes advantage of this unique natural experiment to study the effects of labor supply shocks on labor market outcomes. Using quarterly information on wages and employment in each city in the West Bank, the paper analyzes the short-run adjustment of labor markets to a large inflow of workers separately from the effects of political instability. The results suggest that low-skilled wages are adversely affected by an increase in the supply of low- and high-skilled workers, while high-skilled wages are only weakly negatively related to an increase in their own supply. This is consistent with a scenario in which high-skilled workers compete for low-skilled jobs, pushing the low-skilled into unemployment. This latter hypothesis is confirmed by analyzing the effects of changes in labor supply on unemployment.     

Are risk‐averse agents more optimistic? A Bayesian estimation approach

Our aim is to analyze the link between optimism and risk aversion in a subjective expected utility setting and to estimate the average level of optimism when weighted by risk tolerance. Its estimation leads to a non‐trivial statistical problem. We start from a large lottery survey (1536 individuals). We assume that individuals have true unobservable characteristics. We adopt a Bayesian approach and use a hybrid MCMC approximation method to numerically estimate the distributions of the unobservable characteristics. We find that individuals are on average pessimistic and that pessimism and risk tolerance are positively correlated. Copyright © 2008 John Wiley & Sons, Ltd.     

Is There a Trade-Off Between Accrual-Based and Real Earnings Management Activities in the Presence of (fe) Male Auditors?

Journal of Business Ethics - Prior research suggests that the presence of high-quality auditors (i.e. proxied by audit firm characteristics) constrains accrual-based earnings management, but it...     

Small firms,bigger changes: health insurance coverage take-up rates in small firms after the ACA

Measuring the impact of the Affordable Care Act of 2010 (ACA) on employer-sponsored health insurance is essential in an era of constant changes to health policy. Using data from the Kaiser Family Foundation Employer Survey, we focus on firms with fewer than 50 employees in order to isolate the effect of the ACA on small firms. We utilize a differences‐in‐differences approach with a time fixed effect structure to provide analysis for a treatment group of small firms and a control group of large firms. After excluding firms with grandfathered plans, we find that the ACA provisions reduced health insurance coverage take-up rates in small firms by 1.96 to 2.67 percentage points (compared to large firms).     

GLOBE: A twenty year journey into the intriguing world of culture and leadership

Since its inception in the early 1990s, the Global Leadership and Organizational Behavior Effectiveness (GLOBE) project has investigated the complex relationship between societal culture and organizational behavior. The focus of this paper is on leadership, specifically what we know and have learned from the GLOBE project so far. Among other findings, we demonstrate that national culture indirectly influences leadership behaviors through the leadership expectations of societies. In other words, executives tend to lead in a manner more or less consistent with the leadership prototypes endorsed within their particular culture. In turn, leaders who behave according to expectations are most effective. We also found that some leadership behaviors are universally effective such as charismatic/value-based leadership; others are much more culturally sensitive such as participative leadership. Finally, we identified truly superior (and also truly inferior) CEOs by the degree to which their behaviors exceed (or fail to meet) their society's expectations. All in all, understanding national culture gives us a heads-up as to which kinds of leadership will likely be enacted and effective in each society. We believe that the GLOBE journey has helped us understand the complex, tricky, and fascinating relationships among societal culture, organizational behavior, and leadership processes.