Fiscal sustainability and solvency: theory and recent experience in Indonesia

A major challenge for Indonesian economic policy makers is to avoid the recurrence of conditions that could trigger a new economic crisis. One of the important dimensions of this challenge will be to conduct fiscal policy in a way that is sustainable, given the level of interest rates and the rate of growth of the economy. This paper synthesises various approaches to the measurement of fiscal sustainability that have appeared in the economic literature, relates these measures to the fundamental concept of fiscal solvency, and applies the framework to Indonesia over the period 1991–2003. The domestic and foreign debt positions of the central government are treated separately, to capture the influence of exchange rate changes on the relative costs of domestic and foreign borrowing. The empirical analysis indicates that Indonesia has met the fiscal sustainability criterion in recent years, except when the rupiah has depreciated heavily.     

Visitors’ acceptance of negative ecological impacts in national parks: comparing the explanatory power of psychographic scales in a Norwegian mountain setting

Even in protected areas, it is inevitable that any human use will produce some impact on natural resources. This study identifies visitors’ tolerance of potential negative ecological impacts from tourism activities and facilities in a Norwegian national park context, based on park visitors’ expressed degree of acceptance of negative effects on particular species of wildlife (wild reindeer and raptors) and on vegetation. Attitudes were analysed using psychographic scales, reflecting respondents’ nature orientations, their specific facility desires, their preferences in a wilderness setting and their concerns about human interaction with the natural environment. Fourteen research hypotheses were tested. Findings demonstrated that the psychographic scales explained more variation in attitudes than most social background and trip characteristics. Higher levels of education among visitors were strongly associated with increased ecological concern; age and gender were not. There was generally strong ecological awareness and eco-centrism among park visitors in general, with a small proportion of wilderness purists. Better trail conditions, signposting and interpretation were sought. But park visitors were also found to possess a complex mixture of needs and drivers. The study found significant potential for strategic alliances between tourism and conservation interests, and key value issues for park governance systems.     

Transaction cost economics and the roles of national culture: a test of hypotheses based on Inglehart and Hofstede

Transaction cost economics (TCE) is probably the most widely accepted theory on how firms can gain competitive advantage through efficient organization of their economic transactions. However, by focusing on the competitive environment in which companies operate, it abstracts from the cultural context in which governance decisions are made. We study the cultural boundedness of TCE using two seminal cultural theories: the political science/sociology framework of Inglehart and the management science framework of Hofstede. We use these theories to develop (main-effect) hypotheses about the cultural contexts in which TCE has higher predictive power as well as (interaction) hypotheses regarding particular cultural contexts that may inherently be more inclined than others to adopt certain non-market governance modes if the market “fails.” Hypotheses are tested using a meta-analysis on data collected from 128 studies from 12 countries on 3 continents, representing governance decisions of 60,926 companies. We find that TCE is a universal theory across all cultural contexts. This being said, we find that in societies low on power distance and in societies characterized by a strong emphasis on secular-rational and self-expression values, companies are more strongly guided in their governance decisions by economic, transaction-cost considerations than companies in societies high on power distance and in countries that are characterized by traditional and survival values. Further, TCE’s power to predict the specific type of non-market governance employed by the firm is systematically moderated by the national culture in which the firm operates. The power of TCE for predicting hierarchical governance is higher in countries that rate high on secular-rational values and on uncertainty avoidance and low on long-term orientation, whereas TCE is more diagnostic for predicting relational governance in countries high on self-expression values and low on power distance and on uncertainty avoidance. In sum, our meta-analysis provides support for our thesis that to fully understand governance choices made by firms, we need to integrate TCE and cultural theory. While managers around the world are guided by economic considerations, the cultural context in which they operate exerts a substantial—and predictable—contingent effect on their governance choices.     

Testing the Influence of Substitute Sites in Nature Valuation by Using Spatial Discounting Factors

This paper investigates the effect of nearby nature substitute sites on preferences for nature restoration. Contrary to prior studies, we use a respondent-centric approach to control for substitute sites. We assess each respondent-specific spatial context by computing densities of nature substitute sites within various ranges from each respondent’s home. This approach considers the use and non-use values of nature together. Data from three similar discrete choice experiments carried out in Flanders (Belgium) are compared. Different spatial discounting factors are tested to explore how the substitution effect behaves with regard to distance. Latent class analyses are performed to account for preference heterogeneity among respondents. We observe divergent behaviours across groups of respondents. The “distance-to-substitutes” affects how respondents gauge substitute sites. We find a significant influence of the squared average buffer distance but this effect varies in sign across case studies and classes of respondents. Our results demonstrate that individual-specific GIS data can significantly improve the representation of the spatial context and the transferability of value functions. However, the roles played by preference heterogeneity and nature perception on respondents’ capacity to value nature still deserves further attention in future research.     

Preparing for organizational death: Proactive HR engagement in an organizational transition

This article describes an HR team's call to action in managing an organization's transition from healthy, vibrant, and financially successful workplace to its death after being acquired. The HR team countered conventional practice in two key ways. First, despite being from the seller's side, it acted unusually early in the company's acquisition and operated proactively throughout the integration process. This constructive approach stemmed from the self‐confidence developed in the HR function over years of process improvement and culture change. Second, the HR professionals were motivated (rather than threatened) by the high stakes involved in this organizational transition. Their company—with its industry‐leading business results and a loyal, long‐tenured workforce—was slated to be closed, dismantled, and auctioned off in pieces to other firms. The HR team's mission was to help people deal with the death of their current employer and prepare for life afterward while maintaining a focus on business results. This article shows how HR helped senior leadership handle the challenge of retaining the talent needed to meet customer commitments and keep the business running while also readying people for an uncertain future with many eventual layoffs. © 2008 Wiley Periodicals, Inc.     

Engaging with homelessness in the City of Tshwane: Ethical and practical considerations

ABSTRACT

Policies and practices aimed at developing more engaged universities that are responsive to the needs of society have become key features of the higher education landscape of most countries. Visions of universities ‘engaged’ in matters of local importance increasingly require academics to reframe their scholarship as some form of ‘engagement’. This requirement has been addressed in many different disciplines and has been met with ambivalence. Academics who see engagement as a new form of ‘public good’ find it enhancing of their teaching and research activities, while others view engaged work as unnecessary and problematic ‘third mission’ activities that impede on ‘normal’ academic work. This article aims to contribute to these debates by interrogating the paradoxes of action and inaction. Drawing on recent experiences in reviewing a policy on homelessness for a municipality in South Africa, the article seeks to bring the ambiguities and challenges of engagement into greater visibility.     

Modeling ethical attitudes and behaviors under conditions of environmental turbulence: The case of South Africa

This study explores the impact of environmental turbulence on relationships between personal and organizational characteristics, personal values, ethical perceptions, and behavioral intentions. A causal model is tested using data obtained from a national sample of marketing research professionals in South Africa. The findings suggest turbulent conditions lead professionals to report stronger values and ethical norms, but less ethical behavioral intentions. Implications are drawn for organizations confronting growing turbulence in their external environments. A number of suggestions are made for ongoing research. Michael H. Morris became the Fletcher Jones Chair in Entrepreneurship at the University of the Pacific, Stockton, CA in 1993. He received his Ph.D. in Marketing. He is the author of two books and over forty articles in academic journals, including the Journal of International Business Studies, the Journal of Business Research, the Journal of Management, and the Journal of the Academy of Marketing Science. Dr. Morris' principal research interests include entrepreneurial behavior, industrial marketing strategy, and pricing.Amy Seidel Marks has been a Senior Lecturer in Marketing at the GSB UCT since 1989. She holds a Ph.D. in Marketing from the Kellogg Graduate School of Management, and has worked in the areas of consumer behavior analysis and social marketing for 20 years. During her time in South Africa she has conducted numerous research projects in areas such as AIDS prevention, tobacco control and iodine deficiency, and has also served as a consultant to national projects in tuberculosis drug compliance, tobacco control and adult education.Jeff Allen received his doctorate from the University of Kentucky. He is currently an Assistant Professor of Marketing at the University of Central Florida, Orlando, Florida, Dr. Allen has published in various national and international academic journals on topics of social responsibility, marketing ethics, and health care marketing. Newman S. Perry, Jr. is Professor of Management, School of Business and Public Administration at the University of the Pacific in Stockton California. He has just completed Business, Government, and Society: Managing Competitiveness, Ethics, and Social Issues published by Prentice-Hall and previously coauthored a book on strategic management.     

Ethical Dilemmas in Performance Measurement

In this article we discuss the ethical dilemmas facing performance evaluators and the "evaluatees" whose performances are measured in a business context. The concepts of role morality and common morality are used to develop a framework of behaviors that are normally seen as the moral responsibilities of these actors. This framework is used to analyze, based on four empirical situations, why the implementation of a performance measurement system has not been as effective as expected. It was concluded that, in these four cases, unethical behavior (i.e. deviations from the ethical behaviors identified in the framework) provided, at least to some extent, an explanation for the lower than expected effectiveness of the performance measurement procedures. At the end of the paper we present an agenda for further research through which the framework could be further developed and systematically applied to a broader set of cases.     

Regional government

Tindale, S. (ed.) 1996: THE STATE AND THE NATIONS. THE POLITICS OF DEVOLUTION. London: IPPR, £11.95 paper.     

Predicting forecast errors through joint observation of earnings and revenue forecasts

We propose a simple method to infer the forecast error associated with quarterly estimates of earnings and revenue before the firm announces realized earnings and revenue. The method uses estimates of the profit margin implied by an analyst’s forecasts of both earnings and revenue to identify forecasts that are likely to be optimistic or pessimistic. The ability to anticipate forecast error permits a trading strategy that exploits the average market reaction following positive and negative earnings and revenue surprises.