Leadership effectiveness and motivation in Africa and the African Diaspora (LEAD): An introduction

The LEAD research project was developed in order to broaden management research in areas such as Africa. This special issue brings together the early findings of the research team. The present article reviews the literature and discusses the importance of understanding organizational leadership and motivation in under researched areas of the world. We explain the use of both emic (Delphi Technique and focus groups) and etic (large scale survey) research and describe the LEAD project and methodology in detail. Here we advocate the use of emic and etic research, and also consider the practical realities of using such approaches. Copyright © 2014 ASAC. Published by John Wiley & Sons, Ltd.     

Hedging and Value in the U.S. Airline Industry

This article discusses the findings and practical import of the authors' study of the fuel hedging activity of 28 U.S. airlines during the period 1992‐2003. The aim of the study was to answer the following question: Does fuel hedging add value to the airlines and, if so, how? The airline industry provides a natural experiment for investigating the relation between hedging and value for a number of reasons: (1) the industry is by and large competitive and remarkably homogeneous; (2) airlines are exposed to a single, volatile input commodity—jet fuel—that represents a major economic expense for all competitors; and (3) fuel price increases cannot be easily passed through to customers because of competitive pressures in the industry. The results of the study show that jet fuel hedging is positively related to airline firm value. Those airlines that hedged their fuel costs had Tobin's Q ratios that were 5‐10% higher, on average, than those of airlines that did not hedge. What's more, the higher the proportion of future fuel requirements hedged, the larger the valuation premium. The authors' results also suggest that the main source of value added by hedging in the airline industry is its role in preserving the firm's ability to take advantage of investment opportunities that arise when fuel prices are high and airline operating cash fl ows and values are down. Consistent with this argument, the study finds that the value premium associated with hedging increases with the level of the firm's capital spending. The authors also report that the most active hedgers of fuel costs among the airlines are the larger firms with the least debt and highest credit ratings. This result is somewhat surprising, at least to the extent that smaller airlines are expected to have larger financial distress costs (as a percentage of firm value) and hence greater motive to hedge. One explanation is that the smaller airlines have lacked either sufficient resources or the strategic foresight to acquire a derivatives hedging capability. A second possibility—one that is consistent with the study's main findings—is that the largest airlines also have the highest costs of financial distress (even as a percentage of firm value) in the form of larger growth opportunities that could be lost as a result of high leverage and financial risk. In other words, only the largest airlines are typically able to buy distressed assets during periods of industry weakness; to the extent this is so, such firms may also have the most to gain from hedging.     

FUELING JOB ENGINES: IMPACTS OF SMALL BUSINESS LOANS ON ESTABLISHMENT BIRTHS IN METROPOLITAN AND NONMETRO COUNTIES

This study examines the effect of small business loans on subsequent establishment births in U.S. counties. Using an economic growth framework and cross‐sectional empirical model, we test the hypothesis that the establishment birth rate is higher in counties where the level and annual increase in lending is greater, controlling for community‐level characteristics affecting business and economic dynamics. We also consider the long‐term effect of small business lending and focus on establishing the appropriate lag structure. The results indicate that small business lending does generally have a positive effect on the employer establishment birth rate that is strongest in nonmetropolitan (rural) counties. (JEL L26, R11, M13)     

Reflecting on the Common Discourse on Piracy and Intellectual Property Rights: A Divergent Perspective

The common discourse on intellectual property rights rests mainly on utilitarian ground, with implications on the question of justice as well as moral significance. It runs like this: Intellectual property rights are to reward the originators for his/her intellectual labour mainly in monetary terms, thereby providing incentives for originators to engage in future innovative labouring. Without such incentives, few, if not none, will engage in creative activities and the whole human community will, thereby, suffer because of reduced inventions. However, such utilitarian argument on piracy as de-motivation may not be necessarily justified. In fact, intellectual property arrangement is one among different institutions concerning how the society may handle new ideas and creative works. In reality, private ownership over one’s intellectual product is merely a modern western concept that is being ‹advertised’ as being normative, which, by itself, is highly debatable. Alarming still, such normative argument assumes both justness and moral dimensions. This article will analyse whether such argument is philosophically sound.     

University planning,decentralization and resource allocation

This paper proposes a system of resource allocation in universities which addresses both the problem of useful simulation of alternatives and efficient substitution of resources. It is the authors' view that the reasons why various university planning models proposed in the last few years have not been found useful in practice is that they take inadequate account of the decentralized nature of decisionmaking within universities. In this regard the three main points of the paper are: (1) university planning models should have flexible aggregation categories which can be determined and re-adjusted by the decisionmaker as he uses it; (2) resource constraints in university planning models should be flexible and negotiable, and negotiation over resources should be part of the analyst's domain of inquiry; (3) planning in universities must take into account the problem of introducing incentives which cause the behavior of individuals within the university to be directed to the needs of the institution's clienteles.     

Real and nominal shocks in a two-country price-setting world

This paper develops a two-country model in which the law of one price does not hold in the short run, and which is consistent with the stylized fact that exchange rates respond more quickly to ‘news’ than prices. This is done by assuming that firms face lumpy information costs in determining what price to charge. Both domestic and imported goods prices are therefore sticky with respect to ‘news’, and deviations from the law of one price (PPP) are due to exchange rate surprises. The model is used to analyze the domestic and international impact of real and nominal disturbances.     

Modeling national flood insurance policy holding at the county scale in Florida, 1999-2005

We analyze household flood insurance purchases in Florida from 1999 to 2005, and the extent to which household insurance purchases correspond with flood mitigation activities by local governments involved in the Federal Emergency Management Agency's (FEMA) Community Rating System (CRS). Regression results indicate that household flood insurance purchases correlate strongly with local government mitigation activities, adjusting for hazard experience, hazard proximity, and community demography. Policy implications of this observed relationship are discussed, assuming four temporal order and floodplain development scenarios, with particular attention to the congruence of outcomes relative to policy objectives.     

Volunteers as tour guides: a stakeholder–agency theory case study†

The use of volunteer tour guides by commercial tour operators has attracted little scholarly attention. This paper presents a qualitative case study of a commercially organized tour led by volunteer tour guides, and explores how the guides' status as volunteers shaped experiences of tour customers. Analysis, underpinned by stakeholder–agency theory, highlighted a range of service delivery issues that emerged during the tour. Theoretical and applied implications are discussed, with particular reference to how tour operators might negotiate the vexed issue of managing service delivery quality in the context of tour services paid for by customers, yet delivered by volunteers. Further research is required to explore potential differences in the willingness of tour operators to invest in human resource development initiatives for paid versus volunteer tour guides, along with possible flow-on implications for tour guides' role performance and customer satisfaction.     

Tracking the concept of sustainability in Australian tourism policy and planning documents

In the current climate of intense turbulence, tourism must transform to a more sustainable development platform. Yet it remains unclear how the concept of sustainability is embedded at different levels of government policy and planning, and how this has evolved over time. This paper identifies the concept of sustainability as it is articulated in 339 Australian tourism strategic planning and policy documents published between 2000 and 2011. The paper examines the extent to which the concept of sustainable tourism is evident in the discourse of Australian tourism strategic planning documents at the national, state, regional and local levels, as well as the balance of the discourse in relation to sustainability objectives. The results show that the frequency of occurrence of sustainability as a concept has slightly increased in strategies over the past decade. At the same time, there has been a shift in the conceptualisation of sustainability, with thinking evolving from nature-based, social and triple bottom line concepts toward a focus on climate change, responsibility, adaption and transformation.     

Bank failure prediction models: for the developing and developed countries

Banks make good use of capital and have characteristics different from profit businesses. Mismanagement causes collapse, which negatively affects investors, depositors, and employees, and disrupts economic order. Consequences may also affect other industries, triggering financial distress. Therefore, evaluating operational risks in banks and developing an early warning system are critical. This study evaluates data from 858 international banks (including banking holding companies) from 2005 to 2008 and applies a logistic model to analyze critical factors. Results show that equity-to-assets (ETA) and interest income – interest expense/income (NIN) had negative relationships with financial distress. Banks accept deposits and make loans. A higher proportion of NIN shows stable business volume, which could avert financial distress. Therefore, ETA and NIN were indicative of banking financial distress and best predicted trends in Association of Southeast Asian Nations (ASEAN) and European Union (EU) banks.