Navigating towards sustainable development: A system dynamics approach

Traditional fragmented and mechanistic science is unable to cope with issues about sustainability, as these are often related to complex, self-organizing systems. In the paper, sustainable development is seen as an unending process defined neither by fixed goals nor by specific means of achieving them. It is argued that, in order to understand the sources of and the solutions to modern problems, linear and mechanistic thinking must give way to non-linear and organic thinking, more commonly referred to as systems thinking. System Dynamics, which operates in a whole-system fashion, is put forward as a powerful methodology to deal with issues of sustainability. Examples of successful applications are given.Any system in which humans are involved is characterized by the following essential system properties: Bounded rationality, limited certainty, limited predictability, indeterminate causality, and evolutionary change. We need to resort to an adaptive approach, where we go through a learning process and modify our decision rules and our mental models of the real world as we go along. This will enable us to improve system performance by setting dynamic improvement goals (moving targets) for it.Finally, it is demonstrated how causal loop diagrams can be used to find the leverage points of a system.     

Strategic planning and strategic management in Australian organisations

Many planning and organisational aspects of 48 Australian organisations were examined. The empirical information tends to suggest that the process of adopting the strategic management concept is well advanced in some Australian organisations. Irrespective of size and ownership status, some organisations have already adopted strategic planning, and the process of evolution is continuing towards the final stage of strategic management. The increasing environmental volatility and growing international exposure of organisations in Australia and elsewhere in the Asia Pacific region will increase the pressure to implement international management systems, including strategic management.     

Asymmetric J-curve: evidence from industry trade between U.S. and U.K.

ABSTRACT

Previous research that assessed the impact of exchange rate changes on the trade balance between the U.S. and U.K. assumed the effects are symmetric. In this paper, we add to the literature on the asymmetric J-curve phenomenon by considering the trade balance of 68 two-digit industries that trade between the two countries. We find short-run asymmetric effects of the real dollar-pound rate in almost all industries. However, short-run asymmetric effects were translated into significant long-run asymmetric effects in 25 industries. Indeed, the asymmetric J-curve hypothesis was supported in 18 industries.     

Purchasing Power Parity before and after the Adoption of the Euro

This paper examines the purchasing power parity (PPP) hypothesis for the post–Bretton Woods era including the period after the introduction of the euro. The study applies a new nonlinear unit root test to the bilateral real exchange rates (RERs) of both European and other industrial countries with the French franc and German mark (and the euro after 1998), as well as the US dollar as numeraire currencies. The results of the study provide stronger support for PPP than any earlier studies of bilateral PPP for industrial countries and suggest that (1) PPP tends to hold well within the European Union (EU) even before the adoption of the euro, (2) the evidence for PPP becomes more significant for both EU and non-EU countries when the sample period is extended to the euro era, and (3) convergence toward PPP between the EU countries, especially between the euro-area countries, tends to be nonlinear, while it is likely to be linear for the non-EU industrial countries. JEL no. F31, F33, G15, C22     

The Ten Commandments Perspective on Power and Authority in Organizations

Power and authority in terms of the Ten Commandments (TCs) are discussed. The paper reviews the TCs in Christianity, Judaism, and Islam. The treatment and basis for power and authority in each religion are clarified. Implications of power and authority using the perspective of the TCs are provided. The paper suggests that in today's business environment people tend to be selective in identifying only with certain elements of the TCs that fit their interest and that the TCs should be viewed as general moral guidelines.     

Foreign aid and fiscal behavior in a bounded rationality model: Different policy regimes

We examine how the source of foreign aid affects the composition of the recipient government's spending. Does the source of aid – bilateral or multilateral – influence recipient policy-makers' choice between development and nondevelopment expenditure? We depart from previous literature by introducing strong asymmetries in policy-makers' preferences. With the financial constraints set by foreign aid and domestic revenues, this formalization allows us to model and estimate the fiscal behavior of government policy-makers in the presence of foreign aid.     

The Evolution of Poverty in Nigeria 1985–92

In this note an alternative method for decomposing poverty changes over time is proposed and applied to Nigeria for the years 1985 and 1992. It is shown that the established method of decomposition which holds the poverty line constant at the reference period of the decomposition overestimates the size of the `growth component’ of any poverty change. The conclusion reached by applying the original decomposition method of Datt and Ravallion (1992) is changed completely if the proposed method is applied. Cette note propose et applique au Nigeria pour les années 1985 et 1992, une méthode différente de décomposition de l’évolution de la pauvreté dans le temps. Elle montre que la méthode de décomposition établie, qui maintient constants les seuils de pauvretéà la période de référence, surestime la taille de la “composante croissance” de l’évolution de la pauvreté. En appliquant la méthode proposée, on aboutit à une conclusion radicalement différente de celle de la méthode traditionelle de Datt et Ravallion.     

Capital market impact of product marketing strategy: Evidence from the relationship between advertising expenses and cost of capital

To analyze the prospect of a firm’s advertising decision affecting shareholder wealth, this article investigates the relationship between a firm’s advertising expenditure and the market-imposed weighted average cost of capital. For a sample of U.S. firms, the results show that advertising expenditure is negatively related to the cost of equity and positively related to debt utilization, resulting in a lower weighted average cost of capital. A higher debt level, however, associates with a lower level of financial strength. In addition, and plausibly by lowering the cost of capital through product market advertising, firms with higher advertising expenditure experience higher performance in terms of market value added. Manohar Singh (msingh@willamette.edu) is an associate professor of finance at Willamette University in Salem, Oregon. He holds a Ph.D. in finance from Southern Illinois University at Carbondale. His published research includes publications in theJournal of Banking and Finance, Financial Review, theJournal of Multinational Financial Management, and thePacific Basin Finance Journal, among others. His research interests include corporate governance and corporate finance and strategy. Sheri Faircloth (fairclos@unr.nevada.edu) is an associate professor of finance at the University of Nevada at Reno. She holds a Ph.D. in finance from the University of Texas at Arlington. Her research interests include corporate finance, investments, and real estate finance. She has published in finance journals such as theJournal of Real Estate Finance and Economics, theJournal of Real Estate Literature, Review of the Academy of Finance, theJournal of the Academy of Finance, andApplied Economics. Ali Nejadmalayeri (aliala@unr.edu) is an assistant professor of finance at the University of Nevada at Reno. He holds an M.B.A. from Texas A&M University and a Ph.D. in finance from the University of Arizona. He has published in finance journals such as theJournal of Business, theJournal of Real Estate Finance and Economics, and theJournal of Multinational Financial Management. He was awarded the College of Business Researcher of the Year Award for 2004.     

The Effect of a Market Orientation on Business Performance: A Study of Small-Sized Service Retailers Using MARKOR Scale

Conventional marketing wisdom holds that a market orientation provides a company with a better understanding of its customers, competitors, and environment, which subsequently leads to superior firm performance. While researchers have explored the relationship between market orientation and business performance in different organizations, such studies in small-sized service retailers are scarce. This study investigates potential influences of market orientation on small-sized service retailer performance. Data for this study were collected through personal interviews, and Kohli, Jaworski, and Kumar's market orientation scale was used to specify the dimensions of a market-oriented organization. Results indicated that Kohli, Jaworski, and Kumar's market orientation scale provided a good measure of market orientation in this setting. Also, the results of analyses indicated a significant link between market orientation and small-sized service retailer performance. The managerial implications are discussed.     

Bank distress and firms’ investment during the Great Recession - evidence from Ireland

This article investigates the impact of bank distress on firms’ performance using unique data during the Great Recession for Ireland. The results show that bank distress, measured as banks’ credit default swap spreads (CDS), has negatively and statistically significantly affected firms’ investment expenditures. Interestingly, firms with access to alternative sources of external finance are not impacted by bank distress. The results are robust to accounting for external finance dependence, demand and trade sensitivities, which affect firm performance and the demand for credit.