Academic Journal of Business Excellence 1 2016

Academic Journal of Business Excellence; Vol. 1, No.
1; 2016
ISSN 2413-8266
Published by IIC University of Technology
IIC University of Technology, Cambodia 2016
Academic Journal of Business Excellence
Vol. 1, No. 1; 2016

(An International Bi-Annual Journal of Management)
Patron
: Prof. Dr. CHHUON Chanthan, IIC University of Technology,

Cambodia.
Editor-in-Chief : Assoc. Prof. Dr. Vaibhav P. Birwatkar, IIC University of Technology,
Cambodia
Editorial Board
Prof. Dr. Leow Chee Seng,
IIC University of Technology,
Cambodia
Prof. Dr. Florica Faur,
Vasele Goldis Western
University of Arad, Romania
Assoc. Prof. Dr. Maisarah,
Ahmad National University of
Malaysia, Malaysia
Dr. Hossein Nezakati
Alizadeh, University Putra
Malaysia, Malaysia
Dr. Niki Lambropoulos,
London South Bank
University, United Kingdom
Prof. Dr. Mihaela Stroe,

University of Bucharest,
Romania
Prof. Ramayah Thurasamy,
University Sains Malaysia,
Malaysia
Dr. Vincent Leong Wing
Sum, IIC University of
Technology, Cambodia
Dr. Anna Cui, Ningpo
Polytechnics. China
Dr. Natalia Bantas, Academia
de Studii Economice din
Moldova, Moldova
Prof. Dr. Lau Wee Yeap,

University of Malaya,
Malaysia
Prof. Dr. Malik Badri, Arfad
University, Sudan
Dr. Maria Argriou,
University of Aegean, Greece
Dr. Ahmed Razman Abdul
Latiff, Putra Business School,
Malaysia
Dr. Petros Lameras, The
Serious Games Institute,
United Kingdom
-----------------------Editorial and Circulation matters may be addressed to: ----------------------The Editor-in-Chief,

IIC University of Technology
Building 650, National Road 2, Sangkat Chak Angre Krom, Khan Mean Chey, Phnom Penh,
Cambodia
----------------------- Contact Person ----------------------Assoc. Prof. Dr. Vaibhav Birwatkar
Graduate School, IIC University of Technology
Building 650, National Road 2, Sangkat Chak Angre Krom, Khan Mean Chey, Phnom Penh,
Cambodia
Email: editor@iic.edu.kh
This accountability for originality of the articles and research papers, in published in Academic Journal of
Business Excellence is entirely the respective authors. Neither journal nor society will accept any responsibility
for, nor do they necessary agree with the information expressed in the articles and research papers. The contents
of the journal are the copyright of the Academic Journal of Business Excellence, whose permission in
necessary for reproduction in whole or in part. All disputes are subject to Cambodia jurisdiction only.
Copyright 2016 IIC University of Technology, Building 650, National Road 2, Sangkat Chak Angre
Krom, Khan Mean Chey, Phnom Penh, Cambodia. All rights Reserved ISSN 2413-8266
Vol. 1, No. 1; 2016
Table of Content
Page
1. Development of Human Leadership Theory .......................................................................... 4
Mohd Shukor Hj. Mahfar, Malaysia
Leow Chee Seng, Cambodia
2. Analysing Ownership Structure, Company Performance, And A Directors Renumeration18

Lim Vwee Chin, Malaysia
Ahmed Razman Abdul Latiff, Malaysia
William G.Borges, Malaysia.
3. Conducting an Effective and Efficient Road Show Exhibition: Qualitative Research

Approach .............................................................................................................................. 53
Cui Na, China
4. The Needs of Research for Higher Education Institutions and Academicians in Cambodia70
Ahmed Razman Abdul Latiff, Malaysia
Rosni Binti Abd Wahid, Malaysia
Vincent Leong Wing Sum, Cambodia
5. Reengineering Supply Chain Management Participants Role in Sustainability ................. 78

Meghdad Abbasian Fereidouni, Malaysia
Hossein Nezakati, Malaysia
6. Persuasion through Artifacts, Sociological and Psychological Dimentions Applied for

Employment Interview ......................................................................................................... 88
Mihaela Liliana Stroe, Romania
7. Emotional Intelligence with Culture Increases Trust - How So? ....................................... 103
Vaibhav P. Birwatkar, Chisinau
Vol. 1, No. 1; 2016
Development of Human Leadership Theory

Mohd Shukor Hj. Mahfar
Inland Revenue Board, Malaysia
Leow Chee Seng
IIC University of Technology, Cambodia
Abstract
In order to have a sustainable development organization, understanding one-self is very
important. Human Leadership Theory brings people to look at the fundamental and also the
roots of any problems by looking at problem in a human way. By focusing on human as the
key driver in the organization, sustainability strategies are formed. Hence, Development of
Human Leadership Theory helps practitioners and academicians to view leadership in
different perspectives. This paper discussed the development of Human Leadership Theory in
managing change and people in a sustainable way. In addition, this concept papers provide
guidance on application of human leadership theory in the real world.
Keywords: Leadership, Transformation, Human Leadership, Human Talent Management,
Organization Behaviour, Human Value Ecosystem, Organisation Change.
Introduction
The concept of Human Leadership is derived from the fundamental concept of realisation
management (Stewart, 1974). It was initiated in Japan way back in 1920. This concept
focuses on self-reflection and inner conversation in you. Political, economical, societal and
technology dynamic contribute to the business and workplace environment. These challenges
contribute to the drastic changes in culture, values, human expectations and practices. In fact,
these changes do not create contradiction between work productivity and life satisfaction.
When we relate back to Human Leadership Theory, individual expectations and individual
self-realisation must be compatible with companys expectations and companys selfrealization. This can be explained with the concept of Yin and Yang. In order to achieve
harmony, there must be a balance (Strutton & Pelton, 1997). However, according to
Finkelstein (2009) in order to achieve harmony, human must start to evaluate individuals
self-realization. Leaders need to play a role so that everyone in the company could
understand their own autonomy and motivation factors.
Vol. 1, No. 1; 2016
Human Leadership Theory

Human Leadership Theory is an extension form Human Value Ecosystem Framework (Leow
et al., 2015). This theory focuses on four important elements, which are destination, skills,
responsibility and values of a human.
Figure 1 Human Leadership Theory
Destination
Values
Self
Responsibility
Skills
Humans must always identity their own destiny or goals that need to be achieved. Values and
past experiences play important role to regulate our actions and behaviour. In a workplace,
after identifying employees destination and values, the employees must know clearly their
limitation and responsibility so that they can be productive. However, they must identify the
skills they need so that they can carry out their responsibilities in efficient and effective ways.
Fundamental of Human Leadership: Self-Talk and Inner Self Conversation

Human is living in a busy environment. Most of us are focusing on various daily activities
such as working, taking care of family and children, enjoying life such as shopping, travelling
and other businesses. Unfortunately, not many of us would stop just to communicate with
inner selves. According to Fairhurst (2008), lack of communication between outer self and
inner self makes us confused with ourselves. Sometime, we do not know what we actually
want. Similarly Jaworski & Senge (2011) stressed that when communications is lacking,
perfect equilibrium cannot be achieved. As a result, we start to take everything as granted.
We lost our destination and focus.
When business does not succeed, some chief executive officers start to blame the employees
for non performances (Barton & Mercer, 2005). Employees tend to blame society, economics
and business environment that are not favourable. Lloyd-walker et al. (2014); Gorini,
Miglioretti & Pravettoni (2012) have the similar finding about blaming culture. They
reported that the negative cycle of blame perpetuates itself. When you are pointing at other
people, only one finger is pointing out where as the three fingers are pointing at you. In other
words, before we point out and blame others, leaders must evaluate themselves and
communicate with their inner self. Always remember, the realities that leaders experience in
our daily lives are in fact created by their own decisions. The root of business failure is the
leaders themselves!
Human Leadership helps human leaders to perceive the distortions and faults in your own
thinking. According to MacDonald (2014), when a leader start to communicate with your
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inner self, the leader will start to gain appreciation towards life and widen the scope of your
own thinking. In Human Leaderships philosophy and principle, leaders need to actualise the
strategies before the strategies are created. Knowing self responsibility helps human leaders
to be successful.
According to Egan (2013), problems are not the stop signs, they are guidelines. Problems in a
company are not the real sources of disappointment but the misunderstanding that create
unhappiness. Human leaders must continue to have reflection of sources of unhappiness
before they kick start with any business strategies. Kapferer (2012) summarised that
understanding human values, the needs and wants. This will provide great success during
strategic planning.
Looking Back
DeMel, McKenzie and Woodriff (2014) in their research pointing that Why do you start
your business in the first place? In the research some small and medium enterprises (SME)
owners are not able to answer this question or they answer in terms of the specialty of the
products that they provide. Hoffman and Woody (2013) has the similar write up that the
business owners need to reflect the fundamental again before they venture further. They have
to answer the question, so what about your business. If there is no so what factor in your
business, there is no proposition of your business to continue and your business can be
winded up and eliminated easily by competitors. In fact, the nature and existence of the
business is to help the customers and communities to overcome certain problems.
Similarly, Yang, Wan and Fu (2012) conducted a qualitative research to understand the factor
of employee turnover. In their research the following questions were quoted. why do
employees want to work in your company? Why does a company want to employ employees?
Employees work in the company to get their salaries. From the research, the employees
answered that companies employ employees to help to solve their business problems. If a
company does not have any business problem, the company does not have to employ anyone.
Schultz, & Schultz (2015) wrote in Psychology Work today, when an employee is working in
a company, the employee gets a salary by contributing his or her time to the company.
Individual self-realization is sacrificed with the companys self-realisation. The term
scarifice is perceived as employees contribution to dissatisfaction, disappointment and
painstaking and sometimes thankless efforts by employees. Employees feel that they have to
make major sacrifices. The more the employees feel that they have sacrificed for the
company, their expectations from the company increase. As a result, the employees feel
disappointed when any unexpected scenario strikes (Lazaroiu, 2015). Likewise, company
feels that it is the employees responsibilities to serve the company. In addition, company
demands more and more from the employees. Furthermore, the employers will start to ignore
the employees contribution and never appreciate them (Chang, 2016). As a result, the huge
gap between employers mind and employees that becomes the root of unhappiness.
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The Beauty of Human Leadership Theory

Human Leadership does not follow the traditional leadership models such as Traits Theory of
Leadership, Behaviour Theory, Contingency Theory, Great Man Theory or even Situation
Theory that includes Hersey and Blanchards situation theory. Human Leadership focuses on
balance harmony between our inner and outer lives through the four elements described in
figure 1 as the key for companys happiness.
In fact, Human Leadership can be explained in a more scientific way. The Law of
Conservation Energy explains that Energy neither can be created nor destroyed, it
transforms from one form to another. Energy is produced through vibration. Figure 2 shows
the graph generated during vibration:
Figure 2 Vibration and Graph
From the graph, amplitude is defined as the maximum extent of a vibration or oscillation,
measured from the position of equilibrium. You can observe that, upper amplitude and lower
amplitude are correlated. When the upper amplitude is higher, the lower amplitude is also
high. When the upper amplitude is low, the lower amplitude becomes lower.
Figure 3 Human Emotions
Vol. 1, No. 1; 2016
Figure 3 is now applied to explain human emotions. When a person feels happy, his or her
emotions trigger and stay away from the harmony, balanced and equilibrium mind. Similarly,
when a person feels sad, the intensity of the sadness and depression would be similar to the
happiness that the person feels. Human Leadership hopes that human leaders will always be
aware of their inner emotions. Self reflection must be conducted regardless whether you are
happy or sad. Trying to stay at harmony and equilibrium emotion helps human leaders to
achieve self-actualisation and happiness.
Moving Forward
Individual and company must discuss openly about the new kind of working culture. When
employees do not mention it out, it might create ambiguous and confusion for the employees.
Employers might not know what exactly the employees want.
The discussion between employees and employers must consolidate and unifies both
employees intrinsic values and the extrinsic values. Human Leadership helps you to:
Eliminate dissatisfaction at work.

Create enthusiastic working environment.
Enable employees to work with full confidence .
By applying Human Leadership, the company will become a genuinely interesting workplace.
After practising Human Leadership, you will be managing new experience even if something
profound happens.
During the process of applying Human Leadership in your company, the seed of
enlightenment to be planted not only in your heart but also in your soul. Human leaders
develop the feeling of gratitude and activate the commitment not to create trouble to others.
They hold strongly to the principle of harmony and equilibrium. At the same time, perception,
action and implementation do not only focus on the immediate problems but human leaders
start to put priority at the employees around them, and also at the community and the society
as a whole. By applying Human Leadership, you will start to appreciate your strengths,
weaknesses, values, uniqueness and the interaction for the benefit of human kind.
Synergy of Beyond Boundaries and Human Leadership

Business as usual is one of the common phrases among business people. Some young
entrepreneurs start a business for the interest to start a business. They never understood the
real meaning and objectives of starting a business. As a result, when the seed is unclear, the
results/products will not be as expected.
When I observe more people, I started to realise that many people do something without
using their hearts. When they eat, they just rush to finish the meal by swallowing. Epstein
(2013) describes the scenario in the society now. It is really sad to see this scenario in our
society now. They are lost and they do not know what they are doing.
Vol. 1, No. 1; 2016
Lets take breathing as a sample for illustration. Human breathe everyday and we do not feel
the process of breathing. By right, we shall observe and feel the air movement during
inhalation and exhalation. Missing of realization of all these in our lives will influence our
attitude and behaviour that will also affect the businesses that we do. Hence, there is a great
relationship between business operations and Human Leadership.
The synergies beyond boundaries are explained and described in the following sessions.
Talent Management and Emotional Quotient

Kiyosaki (2015) wrote in this book, Rich Dad Poor Dad for Teens, when we were young,
we were told by our parents to study hard and get a good job. When we work, we must follow
the rules and regulations of the company. The statement gives good values to guide my career
pathway but there is still a big gap that could help the company. You are right, to help the
company to grow and sustain, the company needs creative and innovative employees, and the
employees cannot only follow rules. The creativity and innovation can be measured through
empowerment (Maynard et al., 2013).
Seng, Sidin and Sum (2015) conducted an experimental study to observe the response of
employees scenarios when a photocopy machine in an office is not working. An employee
called the company registered as the service provider to request for the service team to come
and solve the breakdown of the photocopy machine. After a week, the manager realised that
the photocopy machine was yet to be repaired. The research findings as below:
I have requested you to get someone to solve the problem but why it remains the
same? the angry manager asked.
I called the company but the company did not send anybody, what do you expect me
to do boss? replied the executive staff.
Both executive and the manager need to be responsible for the failure of this mission to repair
the photocopy machine. The manager must provide directions for the employee when he
delegates the work and he has to inform the employee of his expected results. The employee
must be creative and innovative when he or she is given the responsibility. The employee
needs to demonstrate his or her creativivity in his or her work. Empowerment requires selfreliance and independence of the employee (Chapin et al., 2016).
The research findings argues that the conventional employment systems that follow rules
need to be re-examined. With competitive employment workforce, company prefers
employees that can operate autonomously and self-direct. During an employment interview,
company evaluates how much a person can contribute to the company, which indirectly
determines the market value of the employee.
Peng (2014) described that companies do not hire candidates purely because they graduated
from famous university or look good on paper. The new concept of employment relates to
the potentials that the employees have at workplace. The potentials are directly related to the
attitude and their competency to perform in any working environment. Employers understand
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that skills and knowledge are trainable but attitude is the most valuable resource of a
company (Hughes, 2013).
As human leaders, leaders need to help our employees to know themselves well and utilise
their abilities to the fullest. Employees need to ask themselves, What do I want to do? What
kind of things am I good at? The only way to get a true answer is to look at your inner self.
In general, employees look for prestige, power and money. Fischer (2013) mentioned that
leaders need to understand which factors motivate them the most. Mismatch between inner
self and the work environment will lead to poor performance by the employees.
Starbuck & Hedberg (2015) reported that the success and failure in your work or life have
nothing to do with your intelligence and educational background. The abilities to negotiate
well with various types of people and to give good first impression to others have no
relationship with your education background. Hence, through Human Leadership, human
leaders will encourage employees to reflect and look at the inner self to enable them to
understand themselves.
Once human leaders understand the employees, human leaders needs to develop the
emotional intelligence of the employees. Emotional intelligence describes how people
operate emotionally and how well they empathise and be sensitive towards the environment.
Companies prefer employees with open and positive attitudes as well as positive minds.
Newborn babies are the best example of positive mind. Babies usually smile without any
obvious reasons and the happiness is revealed on their faces, showing innocence and an
absence of pressure or worry. Newborn babies do not have unpleasant memories, worries
about future and great ambitions (Seligman & Csikszentmihalyi, 2014). . The natural
environment contributes to the natural happiness and high emotional intelligence of babies.
They would try anything without fear. Even if they fall down; they will stand up and try again.
However, various troubles, worry and demand emerge when babies start to grow to become
children and then adult. The conflict between ideal self and the real self creates psychological
turmoil. Human starts to sense inferiority and self-consciousness especially when they start to
compare themselves unfavourably with others (Tolbert, Kohli, & Suri, 2014). Past failure
experiences form long term bad memories develops fear of failure.
Human Leadership encourages followers to create a pure and open mind to overcome any
challenges to understand their own lives. Appreciate the feeling of gratitude is needed when
you understand the real intention of the other party. The cloudy and foggy thinking in leaders
mind will disappear and your thoughts will be clear and lucid. Forgiveness and selfacceptance create a natural, simple and a relaxed attitude to deal empathically with others
(Hardy & Everett, 2013).
High emotional quotient employees are more sensitive towards current situation. In addition,
they act optimistically without over-anxious about future or being over-cautions because of
past experiences (Ealias & George, 2012). By practising Human Leadership practises,
employees regain a clear mind and intelligent sensitivity. In addition, the practices help
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employees to liberate their lives from living a life of regrets and they will start to forgive
themselves for their past mistakes and determine never to repeat the same mistakes again
(Caruso, Fleming & Spector,2014).
Individual Self-realisation and Company Self-realisation

Human loves fair treatment and fair distribution (Seng, et al. 2015). In order to achieve
harmony, the company self-realisation should be matched with the individual self-realization.
However, the individual self-realisation must be the primary as the sustainable strategy.
Figure 4: Changes of Self-reliasation
Self-realization of the company
Previously
Present
Self-realisation of Individual
Before applying the Human Leadership Theory, the self-actualization of the company should
be equal to the self-realisation of individual. Carland, Carland, & Carland (2015) analysed
more than 100 companies globally, they found the same characteristic the companies that
can adapt and accept the importance of individual employees self-realization can sustain in
the long run. This concept is consistent with Human Value Ecosystem (Seng, et al., 2015).
Based on Schaap (2012), employees need to clarify what they want to do to help the company.
Then, employees need to seek out the environment that draws on the best of their abilities.
The compatibility leads to the mutual benefit of the company and employees. Human leaders
must understand that the contribution of the employees is not merely in financial contribution
in term of profits; but the overall balance can be the advantage of the whole company. The
supportive work to enable company to run smoothly is also very important. By repeating
realisation and reflection towards companys operations, leaders will have a better
understanding of the companys directions (Waddell & Pio, 2014).
Mishra, Boynton & Mishra (2014) states that employees should be aware of their own
responsibilities so that they can contribute to the company. Leaders must understand that
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employees contributions might take years to flourish. There are many opportunities for
employees to develop their talents using rethinking methods to contribute to the company.
Employees will continue to improve themselves by learning new skills. All new skills learnt
by the employees will contribute to the development of the company in the long run (Kooij et
al., 2013).
By upgrading their skills, employees are preparing themselves to earn a better salary. In
Human Leadership, leaders want employees to be stakeholders and have the freedom to
identify the optimum ways to work for themselves in the company. Human leaders give
priority to the self-realisation of employees by providing facilities for the employees to
continuously seek knowledge (Russell, 2013).
Pfeffer & Sutton (2013) and Lazaroiu (2015) have the similar finding that company can help
employees to understand their personal abilities when the company proposes the training
programs. The total investment of the employees should be matched with the employees
capabilities. Human leaders must consider the employees capabilities to allocate
responsibilities to their employees.
Human leaders must know their own capacities and decide on the tools to help them to grow
their businesses. Human Leaders provide tools to nurture the employees sub-conscious mind
so that you they aware of your limitations. Once you identify your limitations, always stay in
a positive attitude and cultivate the energy to the people around you and you will be able to
return to the true nature. Hence, Human Leaders help you to clarify your mind and clear out
the negative clutters in your life.
Applying Human Leadership

Human Leadership takes place everyday in our life. The fundamental of Human Leadership
focuses on our awareness. You can practise Human Leadership exercises at home. First, you
need to find a quiet place where you are free from distraction from external environment such
as handphone, television and even your children. Then, you can start to look deeper within
yourself especially your thoughts. Among the areas you must deeply reflect are:
What _______ (Person) did for you?

What have you done in return?
What trouble have you caused to _______ (Person)?
The person could be someone close to you. You should start with your mother because
usually mother has the highest communication and interactions with you. After analysing
your mother, other person whom you should do deep consideration are your grandparents,
partner, siblings, close friends or anyone who is directly or indirectly related to you. Since
parents have a close relationship with us (positive/negative way), we must repeat the
reflection and repeat to do deep self-communication as many times as we could. After several
sessions, you can start with other relationships.
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When you conduct deep reflection, you must separate the deep thinking in different stages of
your life. A shorter or a more specific period of time will give better result. The
recommended periods are:
Before entering kindergarten (Less than 5 years old);

During lower primary school (6 9 years old);
During upper primary school (9 12 years old);
During lower secondary school (13 15 years old);
During upper secondary school (16 18 years old);
During College / University (18 years old and above).
During reflection, you need to see yourself in a different direction. You need to remember the
events factually and try to examine these events honestly. Remember, you are alone. You
need to look at yourself critically, not subjectively but objectively.
With regards to the time distribution for each question, you should spend about 20% of your
time for What _______ (Person) did for you?; another 20% of time for What have you
done in return? and the balance of 60% of time on What trouble have you caused to
_______ (Person)?
For each period of time, you need to spend at least 30 minutes for each person you are
reflecting. You do not need to rush to complete the task. The slower your practise it, the
impact is better because you really need to have a deep reflection. We would suggest that you
spend at least one (1) hour or more in each session when you conduct the reflection exercise.
Due to your busy schedule, you may break the session into a few shorter sessions. Focus on
questions in relations to each session in your life. First start with your mother, then continue
with other people in your life, but you are to follow the order of significance of their
relationship. When you have finished reflecting for one cycle, you may start to reflect on next
stage of the period of life.
When you are conducting the reflection, you should try to stay calm and stay in internal
harmony. You should remove all emotions in your life such as anger, sad, disgust, fear, happy
and contempt. You must stay as calm as you could. It is not easy for us to enter into this
phase when we start practising this exercise.
When starting to practise self-reflection and communication, our mind was full of flowers. At
first, we will fell awful and at times we fell as if we have forgotten something we might start
to check my phone and we was easily distracted by external environment. All these
experiences are very common for a newbie. Leaders must remind themselves to contemplate
the body, diligent, clear thought, and mindful, free from desires and discontent in regard to
the world.
We started to do deep breathing and observed my inhalation and exhalation slowly and gently.
When feeling a pleasant feeling, I feel a worldly pleasant, when feeling a neutral feeling, I
feel a neutral. Internally and externally you feel the same feeling. We have to fully
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understand and accept our own feelings for eternity. Take the chance of self-reflection to
fully appreciate what is happening around us (DiClemente wt al, 1991).
Since it was very difficult to organise our thoughts, leaders can start to write down three key
questions on a paper to regulate myself from reflection. After one month, he can decide to
stop writing because practising self-reflection should be a felt activity and not a literary one.
The objective of this activity is to enable us to develop deep awareness. Start with
visualisation of our thought and our brain is activated to recall the last incident. In fact, this
activity is very similar to meditation where we need to do deep thinking. When we become
aware, we tend to feel very motivated and happy.
When practicing human leadership theory, leaders should start to pay attention to your innerself. Paying attention is not enough because attention has a short period of time. Awareness
needs deeper understanding of intention because during awareness, leaders need to really
understand what attention you had encountered. In order to have deep awareness, you need to
throw away your ego, and become pure. At the same time, all negative thoughts and emotions
should be transformed. These negative thoughts and emotions include:
Greediness;
Arrogance;
Jealousy;
Impetuous;
Resentment;
Selfishness;
Indifferent;
Cheating ;
Depravation;
War;
Competition and negative challenges;
Emptiness; and
Boredom,
It is not important whether you have faith religion in or not. Leaders can gain relief and a
sense of peace of mind through reflection. By applying Human Leadership, human can bring
any organisations to the path of sustainability.
Summary
Human Leadership integrates the power of silence where you will be able to concentrate and
feel pure consciousness. At the same time, clear your inner space to find peace with what
happened in the past and create respect and guidance. Remember, human attitude, speech and
intention are form of energy. The energy has great influence not only for a company but also
on the whole universe. By applying Human Leadership, ordinary leader can transform
yourself to be a super human leader.
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Analyzing Ownership Structure, Company

Performance, And a Directors Remuneration
Lim Vwee Chin
Putra Business School Graduate
Ahmed Razman Abdul Latiff
Putra Business School
William G. Borges
Putra Business School
Abstract
Directors remuneration has been the central of stakeholder scrutiny and debate in many
countries. The relationship between ownership structure, company performance and
Malaysian directors remuneration has received much less attention. This study intends to
examine the impact of ownership structure, company performance on directors remuneration
in Malaysia top 200 public-listed firm in Malaysia from 2010 to 2012. The proxy for
directors remuneration includes fees, salary, bonuses, and benefits of kin. The proxy for
ownership structure is a dummy variable that is one (1) if the firm is a family firm and zero (0)
is a non-family firm. The dependent variable (performance) is measured by ROA. The
findings show that both family firm and company performance is positively related to
directors remuneration.
Keywords: Directors remuneration, company performance, ownership structure, corporate

governance, family firm
Introduction
Background
Based on the separate legal entity concept, (Krishnan, L., Rajoo P.and Vergis, A. C. , 2009),
the company is, in effect, an artificial person, and therefore needs individuals to represent it
and act on its behalf. This important task is often assigned to directors or, collectively, to a
board of directors. Based on section 4 (1) of the Companies Act 1965, a director includes any
person occupying the position of director of a corporation, by whatever name, including any
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person acting in accordance with those directors or on the instructions of the directors of a
corporation, as an alternate or substitute director. The directors or board of directors are,
collectively, the central management agent in the company, responsible for the success or
failure of the company. Therefore, company directors hold the power provided by the law and
their own constitutions to ensure long-term sustainability and profitability of the firm.
One of the means to ensure that directors achieve a companys financial and strategic
objectives is the compensation contract. That is, a competitive remuneration package is
crucial to attract and retain top quality directors and corporate executives. The Malaysian
Corporate Governance Blueprint 2011 encouraged the private sector, professional bodies or
those in academia to conduct a study on directors remuneration, with the implicit assumption
that directors should be adequately compensated for the risks and responsibilities they assume.
Remuneration policy is thought by many to be one of the most important factors in
organizational success (Jensen and Murphy 1990a), and has been viewed as important in
mitigating conflicts of interest between managers and shareholders in corporations. And it
has been widely recognized that compensation packages could potentially play an important
role in motivating top managers (Ozkan, N., 2011).
However, most of the empirical evidence on the determinants of directors remuneration uses
data from developed countries such as UK (Ezzamel and Watson ,1998; Conyon, Peck,and
Sadler, 2001; Shiwakoti, Ashton, and Keasey (2004). Earlier researchers have used
compensation as a predictor versus outcome variables. Thus, the main difference between
these studies and ours is the use of different variables, such as types of executives sampled,
and the regions used for data collection, here.
There is very little known about directors remuneration in fast-developing economies such
as those in Southeast Asia. But the high growth rate, exploding foreign investment and fast
capital formation in the region make it an interesting one to investigate. For instance, firms in
Southeast Asia often feature family ownershipto a much greater extent than in the West,
for exampleand this could result in autocratic control of firms, huge differences in agency
cost, and other factors which could significantly impact directors remuneration.
The absence of publicly available data, and generally low quality of that which does exist,
discourages this type of research in this region. One exception, however, is Malaysia (Dogan
and Smyth, 2002), and others are Hong Kong, where listed firms are required to disclose
fairly detailed information on the pay of directors and top management personnel, and India
(Ramaswamy et al., 2000), where some limited information on boardroom pay is disclosed.
One factor that makes investigating directors compensation in Malaysia firms very
interesting, however, is ownership structure, which differs substantially from firms in the
industrialized countries investigated in prior research. That is, many listed firms are majorityowned by individuals and/or an individuals familya phenomenon which has implications
for corporate governance, firm performance and the setting of senior executives pay (La
Porta, 1999; Lawton and Tyler, 2001; Mishra et al., 2001). The management structure of such
firms often is autocratic, leading to understandable concerns that some controlling
shareholders misuse power as they please for personal gain (Bond, 1996; Brewer, 1997).
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Problem Statement
The most commonly adopted theoretical and practical solution is to offer the CEO a relatively
high level of compensation (Rosen, 1982) and make CEO pay performance-driventhat is,
basing compensation on a companys share-price performance (Jensen & Meckling, 1976). In
fact, many researchers have studied whether optimal agency contracts have an impact on firm
performance (Tosi, Werner, Katz, & Gomez-Mejia, 2000) or strategies (e.g., Jenkins & Seiler,
1990; Sanders, 2001a, 2001b).
The link between a directors remuneration and corporate performance has been of interest to
researchers since the early 1960s (for instance Marris 1963; Williamson 1964; and Gregg et
al 1993). Some studies found a strong relationship between remuneration and performance
(for instance Lewellan and Huntsman 1970; Main et. al 1996; and Deckop 1998), while
others found no significant relationship at all (Gregg et. al 1993; Ezzamel & Watson 1997).
Importantly, however, it has been shown that when a directors remuneration does not
correlate with a companys performance, negative consequences ensue.
Extremely high remuneration for directors has attracted considerable criticism from public,
investors, and many in the media. And the perception, whether valid or invalid, has serious
negative consequences. It is something that troubles majority and minority shareholders
(Jiang &Peng 2010; Young et al. 2008). Minority shareholders, who are mainly public
investors, often feel victimized if a company is performing poorly while its directors are
receiving huge remuneration. This sometimes causes investors to lose confidence in their
respective companies. Sometimes this results in minority shareholders selling their shares.
But other investors, including many institutional shareholders and minority shareholders,
went so far as to form a watchdog group, Minority Shareholders Watchdog Group (MSWG),
and the group does such things as vote against remuneration agendas at companies annual
general meetings. This can create unfavorable news coverage for a companys management,
harm the companys reputation, and cause a loss of investors confidence in company
management, making it difficult for the company to raise funds in the future. In sum, it can
hurt a companys bottom line.
An excessively generous remuneration package may signal a failure of internal controls by
senior management (Johnston J., 2002) and lead to low morale and poor workforce
performance among other directors. This can a hinder the cooperation between directors in
the executive positions and those in non-executive positions, and between mid-range
managers and workers.
Numerous studies have examined the link between directors remuneration and corporate size
(for instance, Agrawal 1981; Murphy 1985; and DOrio 2001); industry (Ely 1991);
diversification (Chen 2006); risk (Core et. al 1999; Abdullah 2006) and human capital
attributes, such as the tenure and age of directors (for instance, McKnight and Tomkins 2004;
Clarkson et. al 2005; and Abdullah 2006). Most of these studies involved testing hypotheses
and developing models to explain directors remuneration using agency theory (Indjejikian
1999). There is, however, limited research on the impact of ownership structure on director
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Vol. 1, No. 1; 2016
remuneration. Yet it is common knowledge that controlling shareholders with high ownership
concentration often exercise considerable control through voting, even though they usually
have relatively weak cash-flow rights. This combination gives concentrated owners incentive
to expropriate the wealth of other investors and pursue their own interests, which, many
observers have noted, often are contrary to those of minority shareholders (Chen et al., 2011).
The incidence of expropriation of minority shareholders by majority shareholders is in fact
very common in the business world, due to weak legal protections and/or poorer governance
standards (La Porta et al., 1999, 2000; Johnson et al. 2000; and Peng et al., 2011). Previous
research has focused on the effects of cash-flow rights and the divergence of control rights
and cash-flow rights (excess control rights) on CEO pay (Masulis et al., 2009; Barontini and
Bozzi, 2010; and Cao et al, 2011). Other studies have pointed out the effects of concentrated
shareholder control type on pay-performance relationship, particularly between state and nonstate-owned firms in transition economies, such as that in China. (Kato and Long, 2005; Firth
et al. 2006).
Ownership structure clearly affects the form and level of compensation paid by companies. A
positive correlation between managerial ownership and top executive cash emoluments was
found when ownership reaches as high as 25 percent in small and family-controlled firms,
and up to 5 percent in large firms. There is also evidence that top executives with larger
shareholdings may be using dividends as a way to supplement their cash salaries (Cheung et.
al., 2005). Companies tend to rely less on equity-based compensation when company
directors have large shareholding percentages, and what motivates them to increase
compensation often is the form rather than the level of compensation, and this usually means
focusing on company value. This could explain why equity-based compensation is used more
extensively in firms with more outside directors, who can easily refer to such values (Mehran,
1995).
La Porta et al. (1999) noticed that most companies in the world are dominated by families or
the state, and that this is a common practice in Asian countries (Claessens et al. 1999; and
Tam & Tan 2007). A study by Claessens et al. (1999) revealed that 67.2% of companies in
Malaysia are in family hands. So in this country it is very important to determine whether a
public-listed company is family-owned when examining the connection between directors
remuneration and a companys performance, even though the influence of high family
shareholding on directors remuneration is largely a mystery.
Not many studies have been conducted in Malaysia examining directors remuneration. Some
studies on the relationship between directors remuneration and firms performances have
been conducted, by Hassan, S., Christopher, T., & Evans, R.,2003, Santhapparaj and Tong,
2004, Abdullah, 2006. These researchers used single-study periods and sample sizes of
approximately 100. Therefore the results make it somewhat difficult to generalize about
public-listed firms in Malaysia. To date, there is no Malaysian research which clearly shows
the impact of ownership structure on directors remuneration.
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Objectives
Main objective:
The main objective is to examine the impact of family firms and company performance on
directors remuneration in Malaysia.
Specific objectives:
The specific objectives of this research are to empirically examine the relationship between:
a. Family firms and directors remuneration.
The aim is to determine whether the fact that a company is a family firm is
significantly related to directors remuneration, and the reasons accounting for the
relationship, however strong.
b. Company performance and directors remuneration.
Another major question to be clarified is whether company performance is
significantly related to directors remuneration, and the reasons why it is or is not.
Our hope is that this study will contribute greatly to the literature in the area of corporate
governance practices among family-owned businesses in Malaysia. Inasmuch as this study
uses a sample of the top 200 public companies listed on Bursa Malaysia, the information is
reliable, and surely will be useful to researchers, Malaysian family businesses, and investors
at large.
Significance of this Work

Ideally, the findings of this study will ask and begin to answer important questions about
whether company directors in Malaysia are paid according to company performance, and
about the extent of influence of families on directors remuneration when companies are
family-owned. Thus, we seek to provide insights about the compensation levels of directors
by Malaysian public-listed companies using two important variables: family firms and
company performance. Other significant factors previously taken into consideration in earlier
studiesincluding firm size, industry, diversification and riskwill be used as control
variables. We hope this will contribute significantly to the literature on Malaysian businesses.
Additionally, we hope that the study will help stakeholdersnamely Malaysian directors,
shareholders, investors and company employeesbetter understand the determinants of
Malaysian public-listed companies pay scales for directors, and the nature of corporate
governance practices among Malaysias top 200 public-listed companies. The results of this
study will, we hope, contribute to promoting fairness in setting directors remuneration levels
in Malaysia.
This study is based in large part on academic literature concerning Malaysian directors
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remuneration from 2010-2012.
Organization
This study will be divided into five parts. The first part lays out the background of the study,
the problem statement, research objectives, and the significance of the study.
The second part covers the theories and existing literature on corporate governance, both in
developed and developing countries. Then, using the literature and theories related to the
general topic area, we offer hypotheses in this section.
The third part explains the methodology used in the study. This includes the research design,
sample selection, modeling specifications and definitions of variables and measurements.
This part also explains the statistical methods used in the study, namely multiple regression
and panel data analysis.
The fourth part is offers discussion and analysis of the data collected. The result of analysis
and discussion will be used to accept or reject the proposed hypotheses.
Finally, the fifth part offers conclusions about the research findings, a discussion about the
limitations of the research, and recommendations for those who conduct further research on
this topic.
Literature Review
Directors Remuneration
Introduction
Directors remuneration is a popular topic in the media and in scholarly literature. During
each AGM season, a recurring argument among shareholders concerns whether top
executives are over-paid or under-paid, as well as the best approaches to align the interests of
top executives with those of the firm and shareholders. Hence, financial disclosure (including
directors remuneration) and appointment of directors have become important agenda topics
during AGM. (Debates concerning directors remuneration received special attention during
the recent worldwide financial crisis.)
Frequently, in previous studies the terms directors remuneration, executive compensation,
CEO compensation, board remuneration, managerial remuneration, executive pay, directors
pay and bosses pay are used liberally (Ewers, 2002). Herein, these many terms are used
interchangeably.
Directors Remuneration Studies in Malaysia
From Table 1.1, we see that the majority of studies conducted on remuneration were
conducted in developed countries such as the United States, the United Kingdom, Australia,
Canada and Germany. Not many studies have been undertaken to closely examine the issue
of directors remuneration in Malaysia. And most of the studies have focused on relationships
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Vol. 1, No. 1; 2016
between directors remuneration and firms performances.

Hassan et al, 2003, found a weak relationship between current-year director remuneration and
current-year performance. They found an even weaker link between directors remuneration
and financial performance growth measures for the three years from 1996 1998. Santhapparaj
and Tong (2004) found that company performance was positively related to directors
compensation but, surprisingly, that shareholder funds are negatively related to directors
remuneration. They argued that when the existing management resigned due to operating
losses, new management was hired at higher compensation levels, thus depleting the
shareholders funds.
A positive relationship between company performance and directors remuneration was
reported by Hassan, S., Christopher, T., & Evans, R., 2003, and Santhapparaj and Tong,
2004. Both Hassan et al and Santhapparaj and Tong used single study periods and sample
sizes of approximately 100. Therefore the results might not be generalizable to all publiclisted firms in Malaysia.
Abdullah (2006) studied the relationship between firms performance, board structure and
ownership structure, related to directors remuneration, in distressed companies in Malaysia.
The author implicitly assumed that there is a difference between healthy and distressed
companies in terms of governance and internal control, with the latter suffering poor
performance. He found no relationship between firms performance, governance structure
and board remuneration.
There is no available Malaysian research on the direct impact of ownership structure on
directors remuneration. Jaafar, S. B., Wahab, E. A. A., & James, K. (2012) examined the
relationship between directors remuneration and performance in Malaysia family firms,
using data from 2007 to 2009. Their focus was mainly on pay for performance, not the impact
of company performance on directors remuneration. The results showed a positive
relationship between directors remuneration and performance. The study did not find
evidence that family firms manipulated power and control for personal wealth. Relatedly,
Mustapha, M. Z., (2012) investigated the effect of three main variablescorporate
governance, human capital attributes and firm performanceon directors remuneration
among 417 Malaysian public-listed companies from 2004 to 2006. They found that family
ownership did positively affect pay performance, but did not shed light on the relationship
between family firms and directors remuneration.
Agency Theory and Directors Remuneration

Agency theory is the most frequently used theory to explain directors remuneration (Devers
et al, 2007). Separation of ownership and control contribute to this theory (Berle & Means,
1991), and this is often referred to as Agency Problem 1. Using this theory, all individuals are
assumed to be risk-averse, rational, and inclined to take actions to maximize personal welfare
whenever there is an opportunity to do so (Jensen & Meckling, 1976). The principal is
looking at long-term sustainability and profitability of the business, which is defined by
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wealth maximization. The agent is looking at profit maximization, normally in the short term,
such as in quarterly performance. So the CEO might be reluctant to participate in a good
investment opportunity, just to ensure impressive quarterly financial performance. On the
other hand, a CEO might undertake aggressive mergers and acquisitions with moderate or
even negative return to shareholders, just to increase firm size. The reasons underlying his
decisions are easy enough to understand, as he is paid based on the firms size (Kroll,
Simmons, & Wright, 1990). So it is easy to see why a thoughtful remuneration package,
focused on the form and level of remuneration, are crucial in mitigating agency cost (Conyon,
2006; Setia-Atmaja, Tanewski, & Skully, 2009 ).
Other agency problems exist between majority shareholders (family firm and non-family firm)
and minority shareholders. Majority shareholders are bestowed with greater power in a firms
operation. They can influence management decisions for their own gains, at the expense of
minority shareholders (La Porta et al., 1999; Lawton and Tyler, 2001; Mishra et al ., 2001,
Cheng, 2005). Moreover, the management structure of such firms is often autocratic, so some
controlling shareholders might treat their company as a personal fiefdom for doing whatever
they please (Bond, 1996; Brewer, 1997). In order to mitigate this problem, many people have
suggested that specific corporate governance practices be put in place, so as to minimize the
diminishment of minority shareholder rights. This can perhaps be achieved through the
empowerment of independent directors and external auditors.
Structure of Directors Remuneration

Among the various remuneration packages used, total cash-based remuneration is the most
common choice of companies. The cash consists of fees, salary, bonus and in-kind benefits.
This has been widely noted by previous researchers. (Jaafar & Abdul Wahab 2012; Wahab, A.
& Rahman A. 2009; Basu et al. 2007; Jensen & Murphy 1990; and Ozkan, 2007). Cash
remuneration is a popular incentive, because it tends to maximize directors compensation
(Bushman & Smith 2001). Furthermore, Dong & Ozkan et al, 2008, noticed that almost 70%
of CEO remuneration in UK companies consists of cash pay.
Cash remuneration alone does not always reflect the extent of benefits directors are receiving.
This goes far in explaining, perhaps, why weak or even no significant linkage exists between
cash remuneration and company performance. Long-term variable pay, such as stock options,
long-term incentive performance plans and pension plans need to be included in research on
directors remuneration, if findings are to be regarded as reliable (Li & Srinivasan, 2011,
Michiels 2013).
Farmer et al, 2013, suggested using basic pay, bonus pay and long-term pay to compensate
directors. But the disclosure of full remuneration packages in annual reports is not a common
practice in Malaysia; only cash remuneration is disclosed. Therefore, regrettably, only total
cash remuneration is used in this study.
Family Firms
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Defining family ownership is a difficulty for business researchers, as family firms have been
defined in many ways. First, family firms are defined based on the degree of ownership and
management by family members (for example Barry, 1975, and Barnes and Hershon, 1976).
Second, family firms sometimes are defined by the degree of family involvement (Davis,
1983; Beckhard and Dyer, 1983). Also, some researchers actually view family firms as those
whose CEOs are either the founders or descendents of the founder (Sraer and Thesmar , 2006;
Mishra and McConaughy, 1999; and McConaughy et al,1998). Other researchers have
considered factors such as the level of equity held by families, or a family members
involvement on the board of directors (Yammeesri and Lodh, 2004; Anderson and Reeb,
2003; and Yeh et al., 2001).
Family Firms in Malaysia

Most business organizations in the world begin their operations with family ownership. A
study conducted by La Porta et al, 1999, found that most of the twenty largest public-traded
companies in twenty-seven countries around the world began this way. Hence, family
ownership is very common and significant. Among the nine East Asian corporations (in Hong
Kong, Indonesia, Japan, South Korea, Malaysia, the Philippines, Singapore, Taiwan and
Thailand), Malaysia has the third largest ownership concentration, trailing only Thailand and
Indonesia. When the voting rights increase from 10% to 20%, Malaysian family-control
ownership increases from 57.7% to 67.2% (Claessens et al, 2000). On average, the largest
shareholders among all public-listed companies in Malaysia held 30% of outstanding shares
in 1998, with the top five shareholders owning 58.8%. Family ownership was found in 43%
of the main board companies of Bursa Malysia from 1999 to 2005 (Claessens et al, 2000).
Family Firms and Directors Remuneration

Some researchers have noted that family businesses perform better than non-family business
in many ways (e.g., Anderson & Reeb, 2003 and Beehr et al, 1997). This is possibly due to
the alignment of principal-agent goals and commonly shared values, along with a high level
of trust among family members. Agency theorists have argued that a high percentage of
family ownership reduces the monitoring cost, since owners have a responsibility to monitor
their managers (Jensen & Meckling, 1976). Therefore, the theory goes, family ownership
minimizes free-rider agency cost and increases companies financial performance (Johnson,
Hoskisson, & Hitt, 1993 and Zahra & Pearce, 1989).
Stewardship theory posits that managers and owners are stewards whose behaviors are
aligned with the objectives of their principals. They are loyal to the company and interested
in achieving an organizations mission (Davis et al., 1997, 2000). So family owners, like
others, have deep emotional investment in their companies (Bubolz, 2001); their family
wealth, personal achievements, even public fame are tied to business (Ward, 2004).
Incentive-based compensation may be used less for family members because their interests
are aligned with one another moreso than is the case with non-family companies (Fernando
Muoz-Bulln1 and Mara J. Snchez-Bueno, 2014).
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Vol. 1, No. 1; 2016
This theory might help explain scenarios where substantial shareholding is associated with
lower direct compensation (Deckop, 1988 and Ramaswamy et al., 2000). In reality, most
family directors have high shareholdings and receive substantial cash dividends from the
shares owned. At the same time, their modest or low direct compensation gives directors a
lever to reduce wage demands from lower-level managers (Firth et al., 1996). In other words,
high family ownership concentration, multiple family membership on boards, can negatively
impact (non-family) directors compensation (Fernando Muoz-Bulln1 and Mara J.
Snchez-Bueno, 2014).
Stewardships problems do exist in family-owned companies. For instance, family owners
may be more receptive to favoritism, nepotism and excessive expenses to secure employment,
preferential treatment, or other non-financial privileges that benefit themselves at the expense
of minority shareholders (Le Breton-Miller, Miller, & Lester, 2011 and Lim, Lubatkin, &
Wiseman, 2010). Majority owners may expropriate assets from the minority owners through
excessive remuneration paid to directors (Cheng et. al., 2005). Also, they may deny certain
privileges to non-family shareholders while providing them to family members, even when
providing such privileges may be detrimental to overall corporate wealth (Fernando MuozBulln1 and Mara J. Snchez-Bueno, 2014).
Company Performance
Company Performance and Directors Remuneration
Company performance is one of most important subjects in the business world, and has been
studied by many researchers. Some of these studies have attempted to ascertain the
relationship between company performance and directors remuneration. Empirical studies
from the United States and the United Kingdom found a strong positive relationship between
the two (Lewellen and Huntsman 1970 and Murphy, 1985).
A study conducted for large, listed Spanish companies for the period 1990 to 1995 found a
significant positive relationship between corporate performance and directors remuneration
(Crespi and Claden, 2003). Similar results were also found in Germany (Kaplan, 1994 and
Schwalbach and Grasshoff, 1997), Italy (Brunello et. al 1999), Japan (Kato and Rockel 1992
and Kaplan, 1994, Canada (Zhou, 2000) and Denmark (Eriksson and Lausten, 2000). In
Australia, though, few studies found a significant relationship between the two variables
(Matolcsy, 2000 and Merhebi et al, 2006).
On the other hand, some researchers found evidence supporting contract theory, which holds
that company performance has a significant effect on managerial salary (Cooley, 1979) or
bonuses (Barkema & Pennings, 1998). Some scholars found that excellent company
performance justifies high remuneration to CEOs (e.g., Kaplan, 2008 and Beatty & Zajac,
1994). And executive compensation has been found to be associated significantly related to
company performance, as measured by earnings per share and total assets (Kang, L. S. &
Payal, 2009). On the other hand, some studies found a weak relationship (Main, 1991 and
Gregg et al, 1993), while Randy and Nielsen (2002) found no relationship between
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executive remuneration and company performance in their study on Norwegian and Swedish
companies.
Among private companies, remuneration of board members is correlated with operation
revenue, net income and total assets. But payment incentives for senior managers are
negatively correlated with operation revenue, net income, and total assets. Overall, it can be
concluded that empirical findings do not provide consistent results between CEO pay and
firm performance. In fact, a meta-analysis conducted by (Tosi et al., 2000) estimated that
about 40% of variance in total CEO pay is contributed by firm size and only 5% attributable
to firm performance.
Research Framework
Independent Variables
Dependent Variables
a. Family Firm
b. Company Performance
Control Variables
a. Firm Size
b. Firm Age
c. Debt Variable
Hypotheses
Based on the readings and studies completed, hypotheses for this research are:
Hypothesis 1: There is a significant association between family firms and directors
remuneration
Hypothesis 2: There is a significant association between company performances
Methodology
Research Design
The relationships involving family firms, company performance and directors remuneration
can be determined quantitatively, as previous researchers have done. This part of our study
describes how the study is conducted, how data are collected and analyzed, and how the
hypotheses are tested. To test the research hypotheses, the study uses a panel data set of the
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Vol. 1, No. 1; 2016
top 200 Malaysian Public-Listed Companies of 2010-2012.
Sampling Design
This study used top 200 Malaysian companies listed in Bursa Malaysia based on their market
capitalization, extracted from Capital IQ in February 2014. Although 200 samples were
captured, only 116 samples were used for analysis (Figure 2). Samples from banking finance
and insurance sectors were excluded, as the industry is regulated under The Banking and
Financial Act (BAFIA), 1989. Under this Act, the financial institution (FIS) is allowed to
make portfolio investments in non-financial businesses up to a maximum of 20% of FIs
shareholders funds and up to 10% of the issued share capital of a company in which the
investment is made (Amran & Ahmad 2011).
Figure 2: Screening criteria of samples
Top 200 Malaysia public-listed companies

samples are selected. (Please refer to
Appendix I.)
Capital IQ Database
Samples from the following industries are

included: Energy, Materials, Industrials,
Consumer Discretionary, Consumer Staples,
Healthcare, Information Technology,
Telecommunication Services. (Please refer to
Appendix II.)
Geography locations:
Malaysia
Market Capitalization
Rank 1-200 companies
(Please refer to Appendix III.)
(based on latest 5 years

historical rate, MYR)
The data for the companies must be available

for the three consecutive years in order to be
included in the sample.
Industry classification:
Exclude Finance, Banking,
insurance, investment industry
Financial Ratios:
Total Assets, Return on Assets and
Long term debt data for financial
year 2010, 2011, 2012
116 samples are

collected
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Vol. 1, No. 1; 2016
Measurement of Independent Variables

Family Firms
The effect of family firms in this study is captured thusly: a dummy variable is one (1) if the
firm is a family firm and zero (0) otherwise. This means of measurement has been widely
used in prior research (e.g., Anderson & Reeb 2003 and Gomez-Mejia et al, 2003). In this
study, a family firm is one with a minimum of two family members in its management or on
its board of directors, and a minimum of two family directors with ownership (direct and
indirect shareholdings) of a minimum of 20% of the company. This definition of a family
company is consistent with that used in previous studies (La Porta, Lopez De-Silanes &
Shleifer, 1999 and Anderson & Reeb, 2003). To determine the direct and indirect
shareholding, the information was hand-collected from companies annual reports via Bursa
Malaysia using a shareholding statistics-list of the thirty (30) largest shareholders. Lists of
shareholding are ranked in descending order, including firms or individuals.
Firm Performance
Return on Assets (ROA) and Return on Equity (ROE) are the common accounting-based
variables used to determine company performance (Michiels et al, 2013). ROA is measured
as the ratio of net income to total assets; ROE is measured as the ratio of net income to total
equity. ROA is the best measure for current performance, whereas ROE is a better measure of
executives overall ability (Cornett et al. 2007).
A majority of researchers who study the relationship between remuneration and performance
use ROA as a measure of firm performance (Michiels, 2013 and Ibrahim & Samad, 2011).
Hence, ROA is used to measure company performance in this study. The data were obtained
via Capital IQ Database from 2010 to 2012. (Figure 2)
Measurement of Dependent Variables

Directors remuneration has been used as a dependent variable by previous researchers to
investigate pay-for-performance relationships. (e.g., Michiels, et al, 2013 and Capezio,
Shields, & ODonnell, 2011). Following Michiels, et al and others, logarithms of the CEO
compensation variable were applied to reduce the impact of outliers. Additionally, the log
transformation is the most common way to correct for non-normality, especially when the
variable has a positive skew (Hair, Anderson, Tatham, & Black, 2006), which is true for our
variable directors compensation.
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Vol. 1, No. 1; 2016
For each sample obtained from the Capital IQ Database, compensation information was
hand-collected from the directors remuneration section of the annual report, which can be
accessed via the Bursa Malaysia website (http://www.bursamalaysia.com/market/listedcompanies/). Total directors remuneration was used, instead of using the remuneration of
CEOs and other directors separately. This is due to limited disclosure of remuneration
information by Malaysian listed companies, despite the recommendation by MCCG 2012 to
disclose directors remuneration individually (Mustapha, 2012). On the other hand, the use of
board members remuneration is perhaps better for this study than executive remuneration, as
the board as a whole affects a companys performance greatly (Dogan and Smyth, 2002).
Components of remuneration for this study consist of fees, salary, bonuses and in-kind
benefit, which are short-term pay. Long-term pay was not included in calculation of directors
remuneration, due to unavailability of data. Long-term pay that is measured as the value of
options and share performance vested in the current year, plus grants of share options under
ESOS (Farmer et al, 2013). This dependent variable has been used by previous researchers
studying pay-for-performance (e.g., Michiels, e. al, 2013 and Capezio, Shields, & ODonnell,
2011).
Measurement of Control Variables

Firm Size
The size of a firm can affect economic and financial performance. A natural log of book
values of total assets was used to measure firm size. This is similar to methods used in
previous studies (e.g., Monteduro, 2014 and Jaafar & Wahaab, 2012).
Firm Age
Firm age refers to the number of years elapsed since the company was incorporated (Ibrahim
& Samad, 2011 and Martnez, Sthr &Quiroga, 2007).
Debt Variable
Debt variable is measured using capital structure, dividing long-term debt by total assets
(Jaafar & Wahaab, 2012 and Ibrahim & Samad, 2011). Cheung et al, 2005, looked into the
concentration of ownership and directors compensation in 412 Hong Kong companies
sampled from1995 to 1998, using the control-debt variable whereby a measure is long-term
debt divided by total assets.
Data Analysis
Data are analyzed using the Microsoft Excel Data Analysis tool consisting of descriptive
analysis, correlation, and regression. Descriptive analysis is conducted to ensure that data
collected are normally distributed to eliminate statistical errors during the interpretation of
results that will affect the overall result. Correlation analysis is conducted to ensure there is
no multicollinearity, as this would affect the accuracy of regression analysis result. And
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Vol. 1, No. 1; 2016
regression analysis is used to confirm the significance of the relationship between the
dependent and independent variables.
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Vol. 1, No. 1; 2016
Results
Introduction
Upon data collection and review, the data will be analyzed and discussed in this part of the
study. This section will begin with descriptive analysis of the data collected, and later utilize
correlation analysis and regression analysis in order to prove or reject the hypotheses.
Descriptive Analysis
Panel A of Table 4.1 presents the descriptive statistics (minimum, maximum, mean, and
standard deviation) of directors remuneration, which is represented by total cash
remuneration and Ln (total cash remuneration). The skew of directors remuneration is
5.4648, showing that the original value to directors remuneration (RM million) does not
reflect a normal distribution. Hence, the Ln value of total cash remuneration is used; the skew
is 0.4386, which is within the range of +2 and -2. Money amounts are expressed in Ringgit
Malaysia. The mean pay of the directors remuneration is RM 7.8123 million, and the median
is RM4.5015 million.
Panel B presents family firm summary statistics. Approximately 56% of the firms in our
sample are non-family-owned and nearly 44% of the firms are family-owned. Panel C of
Table 4.1 reports the descriptive statistics for the performance components. Return on Assets
indicates the mean and median are 0.0829 and 0.0646, respectively, and the maximum is
0.4480. Panel D of Table 4.1 presents the control variable results. The average firm size is
RM7.7055 million, with a maximum of RM11.3904 million. Other firm characteristics
include debt, with a mean of RM110,900 and a median of RM58,900, and with a maximum
of RM660,600. Furthermore, the mean and media firm age are 31 and 27 years, respectively,
with a maximum of 106 years.
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Vol. 1, No. 1; 2016
Table 4.1: Descriptive Analysis for Control Variables
No of
Observations
Panel A: Director Remuneration
DIRREM (Million)
342
Ln(DIRREM)
342
Mean
Median
Standard
Deviation
Minimum
7.8123
8.4169
4.5015
8.4122
13.6447
0.9476
Panel B: Family Firm

FAMFIR
342
0.4474
0.0000
Panel C: Performance
ROA
342
0.0829
Panel D: Control Variables

SIZE (Million)
DEBT
FIRM AGE
342
342
342
Maximum Kurtosis
Skew
0.3630
5.8944
117.7000
11.6759
35.6334
1.1834
5.4648
0.4386
0.4980
0.0000
1.0000
-1.9663
0.2126
0.0646
0.0693
-0.0055
0.4480
5.1133
1.9963
7.7055 7.4878
0.1109 0.0589
31.5322 27.0000
1.4172
0.1318
21.8069
4.0500
0.0000
0.0000
11.3904
0.6606
106.0000
-0.1211
2.0839
2.6637
0.4382
1.4566
1.4948
Notes: The sample consists of 114 publicly traded, nonfinancial firms from 2010 to 2012 listed on Bursa Malaysia. DIRREM is the total director
remuneration that includes director fees and allowances, salary, bonus and benefits of kin. ROA is the net income divided by total assets. ROE is
the net income divided by total equity. FAMFIR are firms which are owned by family members with a minimum 20% shareholding where at least
one family member is on the board. SIZE is logarithm of total assets. DEBT is the long-term debt over total assets and FIRM AGE is the number
of years since incorporation.
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Vol. 1, No. 1; 2016
Table 4.1.1 Average Market capitalization, company size and performance for different ownership structures of
Malaysias Top 200 companies from 2010-2012
Types of Firms
No. of samples
Non-Family firm
Family Firm
Total
63
51
114
Average Market
Capitalization
(RM Million)
7,423.86
6,779.20
Average
company size
Ln (Total Asset)
8.81
8.54
Average company
performance
(ROA)
8.24
8.41
Table 4.2: Correlation Analysis for Dependent and Control Variables
ROA
SIZE
DEBT
FIRM
AGE
FAMFIR
ROA
SIZE
-0.37623
DEBT
-0.13488
0.515475
FIRM AGE
0.182326
0.218006
-0.08171
FAMFIR
-0.05887
-0.09399
-0.1198
-0.113
Ln (DIRREM)
0.041395
0.522118
0.246435
0.113322
0.162539
Ln (DIRREM)
Pearson correlations are reported in the table: ROA is the net income divided by total assets.
SIZE is logarithm of total assets and Debt is the long-term debt over total assets. FIRM AGE is
the number of years since incorporation. FAMFIR is a dummy with 1= family firm and 0= nonfamily firm. DIRREM is the total director cash remuneration.
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Academic Journal of Business Excellence; Vol. 1, No. 1; 2016

ISSN 2413-8266
Correlation Analysis for Dependent and Control Variables

Results of correlation analysis for independent variables and controlled variables are shown
in table 4.2. According to Guildfords Rule, the strength of relationship between two
variables is considered very high at 0.9 and above. Multicollinearity problems might occur
when two highly correlated variables undergo multi regression analysis, causing inaccuracy
of the regression analysis result. From table 4.2, it is clear that all dependent and control
variables are not highly related and are, therefore, suitable for multiple regression analysis.
Multiple Regression Analysis

Ownership Structure and Directors Remuneration
This study finds that the coefficient of FAMFIR is positive and significantly (0.4441; t =
5.4396 and p < 0.05) related to DIRREM. It shows that family firm is positively related to
directors remuneration. In other words, directors from family firms are better paid than those
in non-family-owned firms.
Our findings show results which call into question the presence of an agency problem in
family firms. Based on the theory, the agency problem is mitigated in family firms, as family
members have a commitment to growing their businesses to ensure that family wealth is
transferred to the next generation. Hence, they have open communications and resolve
internal conflicts for the sake of the family.
There are a few possibilities which might help explain the results. First, family firms have
better company performance (Chrisman et al, 2005 and Dyer, 2006). In other words, they
were paid for their performance. We can posit that good company performance contributes to
directors remuneration, as shown by previous researchers (Lewellen and Huntsman 1970 and
Murphy, 1985).
Second, an element of altruism surely occurs in the family firms, involving controlling family
members versus non-controlling family members, as opposed to agency problems between
majority shareholders and minority shareholders (Bhattacharya & Ravikumar, 2001 and
Morck & Yeung, 2003), which reflects, perhaps, the distinction between altruism and selfcontrol problems (Lubatkin, Schulze, Ling, & Dino, 2005 and Schulze, Lubatkin, & Dino,
2003).
Third, this can be explained as an agency problem, where majority shareholders may
expropriate assets from minority owners. One way to do this is to provide excessive
compensation to manager owners. Agency behavior is more common than stewardship
behavior; also, the greater the number of family directors, the greater the number of
executives susceptible to family influence. These findings are found among Fortune 1000
firms, as well as among the subsample of those firms that are family businesses (Le BretonMiller, I., Miller, D., and Lester, R. H. , 2011).
Fourth, higher compensation signals weaker corporate governance in the firm. Top executive
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Vol. 1, No. 1; 2016
pay is higher in firms with weaker corporate governance mechanisms, controlling for
standard economic determinants of pay (Basu. Et. al, 2007). The author studied 174 large
Japanese corporations during 19921996, looking at management ownership and family
control (the ownership mechanisms), keiretsu affiliation, the presence of outside directors,
and board size (the monitoring mechanisms) to measure corporate governance mechanisms.
However, the study also found that excess pay related to ownership and monitoring variables
was negatively associated with subsequent accounting performance, consistent with the
presence of an agency problem.
Previous literature provides contract results pertaining to directors remuneration in family
firms. When company performance improves, the value of a company will increase and
family directors will be rewarded in term of dividends, and there is no reason for
expropriation in firms listed on Bursa Malaysia. Therefore, family members would not be
expected to manipulate their positions of power on boards of directors or, as majority
shareholders, to increase remuneration for personal benefit. It did not find evidence of a
relationship between director remuneration and performance influenced by family firms
(Jaafar, Wahab, 2012)
Furthermore, the percentage of ownership stockholding is negatively related to directors
remuneration (Cheng, 2005; Fernando et. al., 2014). Directors with substantial ownership
may have lower pay because their liquidity needs can be met by dividends (Cheng, 2005). A
large proportion of family members on the board negatively affects the use of incentive
compensation among board members with kinship (Fernando et al, 2014).
Company Performance and Directors Remuneration

Table 4.5 presents extended results on the relationship between firm performance and
remuneration. This study finds that the coefficient of ROA on column 1 is positive and
significan (4.5349; t = 6.8705 and p < 0.05) related to DIRREM.
Our findings are consistent with previous researchers who studied the relationship between
company performance and directors remuneration. Empirical studies from the United States
and the United Kingdom found a strong positive relationship between the two variables
(Lewellen and Huntsman 1970 and Murphy, 1985).
A study conducted for large and listed Spanish companies for the period 1990 to 1995 found
a significant positive relationship between corporate performance and directors remuneration
(Crespi and Claden, 2003). Similar results also were found in Germany (Kaplan, 1994 and
Schwalbach and Grasshoff 1997), Italy (Brunello et al, 1999), Japan (Kato and Rockel 1992
and Kaplan, 1994), Canada (Zhou, 2000) and Denmark (Eriksson and Lausten, 2000). Yet in
Australia, few studies found a significant relationship between the two variables (Matolcsy
2000 and Merhebi et. al 2006).
On the other hand, some researchers have found evidence supporting contracting theory, that
company performance has a significant effect on managerial salary (Cooley, 1979) or bonus
(Barkema & Pennings, 1998) (Bin Liu et al, 2003 and Murphy, 1985). Some studies have
37
Vol. 1, No. 1; 2016
found that excellent company performance is seen to justify high remuneration to CEOs (e.g.,
Kaplan, 2008 and Beatty & Zajac, 1994). Moreover, executive compensation has been found
to be associated significantly with company performance as measured by earnings per share
and total assets (Kang, L. S. and Payal, 2009).
Michiels (2013) found a positive impact of performance (ROA) on CEO compensation. In his
study of 529 privately-held U.S. family firms, sample data were used. Additionally, the study
find that in private family firms CEO compensation is more responsive to firm performance
in firms with low ownership dispersion and in the controlling-owner stage. Furthermore, the
positive pay-for-performance relationship is slightly stronger for nonfamily CEOs than for
family CEOs, the study found.
In Malaysia, a study by Santhapparaj and Tong (2004) found the association between
corporate performance and directors remuneration. They found that companies assets and
turnover are positively related to directors compensation. In another study conducted by
Jaafar and Wahab in 2012, directors remuneration and performance were found to be
positively correlated, as measured by ROA.
Other Variables and Directors Remuneration
This study also found a positive relationship between firm size and directors remuneration,
with its coefficient values 0.4785, t = 12.4208 and p < 0.05. Other variables, such as a firms
debt or a firms age were not shown to be related to directors remuneration.
Inference Analysis
As a result of multiple regressions done, the conclusion obtained for research hypotheses in
the earlier chapters is as follows:
H1: Family firm is significantly related to directors remuneration.
Result: Hypothesis failed to be rejected. There is a significant positive association between
family firms and directors remuneration.
H2: Firm performance is significantly related to directors remuneration.
Result: Hypothesis failed to be rejected. There is a significant positive association between
firm performance and directors remuneration.
Summary
In this study, both of the independent variablesfamily firms and firm performancewere
found to affect directors remuneration in Malaysia.
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Vol. 1, No. 1; 2016
Table 4.3: Regression Statistics
Regression Statistics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.6342
0.4022
0.3933
0.7381
342
Table 4.4: ANOVA

ANOVA
Regression
Residual
Total
df
5
336
341
SS
123.1552
183.0631
306.2183
MS
24.6310
0.5448
F
45.2086
Significance F
1.2451E-35
Table 4.5: Multi Regression Analysis Result for Directors remuneration
Coefficients
Intercept
ROA
SIZE
DEBT
FIRM AGE
FAMFIR
4.31163
4.53487
0.47852
-0.40562
-0.00354
0.44411
Standard
Error
0.29314
0.66005
0.03853
0.36990
0.00205
0.08164
t Stat
P-value
Lower 95%
Upper 95%
14.7086
6.8705
12.4208
-1.0966
-1.7286
5.4396
3.7486E-38
3.1144E-11
2.0778E-29
0.2736
0.0848
1.0304E-07
3.7350
3.2365
0.4027
-1.1332
-0.0076
0.2835
4.8882
5.8332
0.5543
0.3220
0.0005
0.6047
39
Lower
95.0%
3.7350
3.2365
0.4027
-1.1332
-0.0076
0.2835
Upper
95.0%
4.8882
5.8332
0.5543
0.3220
0.0005
0.6047
Academic Journal of Business Excellence; Vol. 1, No. 1; 2016

ISSN 2413-8266
Conclusions for Malaysia

Directors remuneration is an important issue in organizations, as directors are the agents for
companies and are entrusted with power, roles and responsibilities to ensure company
performance and provide return on investment for shareholders. Directors performance in
public-listed companies is of great interest to stakeholders, media and academic researchers.
There is, quite possibly, an agency cost underlying the relationships between principals and
agents. However, agency theory offers a different explanation pertaining to family firms,
which is that agency cost is lower. Family members, as company agents, run companies with
a fierce dedication to ensuring sustainability of firms, thereby reducing monitoring and
supervision costs. Issues of altruism and self-control of family directors in public-listed
companies are central to discussions among the shareholders. Furthermore, a director does
not always uphold his fiduciary duties, resulting in a breakdown in the principalagent
relationship.
This study contributes to director compensation literature and family business research by
analyzing the impact of directors kinship ties to the owners families, and company
performance on directors compensation. The research is relevant and striking, as prior
researchers have demonstrated that family firms do not expropriate company wealth through
Therefore, the main contribution this paper makes to director compensation literature is to
show that family firms positively influence directors remuneration. This finding is contrary
to agency theory, which suggests that family firms do not influence directors remuneration.
Some of studies, in fact, found a negative relationship between family firms and directors
remuneration, as family firms with substantial shareholding tend to see directors draw less
pay as they are instead rewarded through dividends. This may be due to the fact that family
firms perform better than non-family (8.41 versus non-family firms at 8.24, as stated in table
4.1.1). Numerous studies have shown that good company performance contributes to higher
The effect of time can be a critical factor in explaining company performance. In boom years,
the national economy experiences GDP growth and share markets flourish. Thus, it is
expected that directors compensation also will flourish. But in 2009 (when the NASDAQ
crashed, causing worldwide ripples) and 2009 (a year of economic crisis in Malaysia; real
GDP growth fell to a paltry 1.6%), directors compensation suffered. But from 2010-2012 as
real GDP growth increased: to 7.2%, in year 2010, 5.1% in 2011 and 5.6% in 2012
(Appendix IV). As a result, overall market economic performance flourished, as did directors
remuneration.
Previous studies also found a positive and significant relationship between company
performance and directors remuneration. Thus, company performance seems to be an
important criterion in determining directors remuneration, as part of their pay is determined
by variable pay, which is tied to company performance. When a company is performing well
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Vol. 1, No. 1; 2016
and generating a lot of revenue, a portion of the profit is distributed to directors who have
perhaps outmaneuvered the competition and maybe even outperformed other players in the
company.
In sum, the presence of family members on boards and the concentration and percentage of
equity ownership in the hands of family members, as well as company performance, are
significantly related to directors remuneration.
There are a number of limitations associated with this study. First, we only included cash
remuneration and not include stock-based compensation. This is unavoidable, given the
paucity of disclosure of information in annual reports among Malaysian firms, as few
companies disclosed stock option details in their annual reports. However, the inference
drawn from previous research is that this limitation does not present a significant problem, as
family firms place much less weight on stock-based compensation than do non-family firms
(Achleitner, Rapp, Schaller and Wolff, 2010 and Park, 2002).
Second, total board remuneration is used to study the association between ownership
structure and company performance. Our study did not examine family directors and nonfamily directors remuneration. Furthermore, some companies are controlled by private
companies where the names of owners are unknown to the public. And a majority of
companies disclosed only their directors remuneration in their salary bands, making it
impossible to determine the remuneration of individual directors. Hence, it is impossible to
determine family members remuneration. Clearly, then, future research will be aided by
greater transparency in disclosure of directors remuneration. In many other countries, details
of how the compensation is set and paid are disclosed, and this is very useful to researchers
and other interested parties.
Third, this study does not include percentages of directors shareholding. Directors with high
shareholding tend to draw less compensation compared to directors with little or no
ownership shares. Future studies would benefit by examining the effect of the percentage of
shareholding on directors remuneration.
Fourth, the definition of family firms is somewhat fuzzy. There are various criteria used in
determining family firms, either from the perspective of power dimension (Astrachan, Klein,
and Smyrnios, 2002), the level of family involvement in ownership (Favero, Giglio, Honorati,
and Panunzi, 2006), or others, through a combined ownership and management criterion
(Allouche et al, 2008 and Anderson and Reeb, 2003). These are all valid measures. However,
inasmuch as researchers have used different criteria in determining the ownership status firms,
any direct comparison between the results of previous studies surely have limited
applicability.
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Vol. 1, No. 1; 2016
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Conducting an Effective and Efficient Road Show

Exhibition: Qualitative Research Approach
Dr. Cui Na
Ningbo Polytechnic (Senior Research Assistant)
Leow Chee Seng
Dean, Graduate School, IIC University of Technology,
Cambodia
Abstract
Chinas road show exhibition industry has experienced considerable growth over the past
decade; however, recent studies have identified a number of issues bisecting its future growth,
including poor organization and management of road show exhibitions, an inability to retain
customers, and waste time and money to conduct road show exhibitions. Consequently, the
aim of this article is to explore the drivers and inhibitors of conducting an effective and
efficient road show exhibition. Qualitative method was conducted by focus group and indepth face-to-face interview method. Reporting on the findings from a series of face-to-face
interviews with 56 booth visitors from road show exhibition in China, this article identifies
that not only providing trainings of what staff should do and not do at the road show
exhibition, but also managing their behavior and having ability to read and interpret body
language among booth visitors in order to reach the customers heart, which in turn increase
sales, potential customers, and companys brand image.
Keywords: Directors remuneration, company performance, ownership structure, corporate

governance, family firm
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Introduction
Exhibition is a service circulation process in social reproduction for the smooth social
mobility of goods. Exhibition industry expands the social economy mainly in this process
(Zeng, 2005). Facts have shown that approaches of both professional and marketization
provides intensified platform for the exhibition businesses, which expands rapidly the
exhibition from social public relations level to the socio-economic level and makes them
powerful thrusters for the socio-economic growth (Hao, 2012). Exhibition industry cannot
only create huge economic and social benefits itself but also have a strong driving effect
towards a variety of industries such as transportation, tourism, catering, accommodation and
related industries, thus promoting the industry agglomeration (Jin, Weber, Bauer, 2010).
A travelling exhibition also referred to as a travelling exhibit or a touring exhibition is a
type of exhibition that is available for circulation to one or more venues in addition to the
premises of the organizer. While the advantages of trade show marketing can be extensive,
optimal success hinges on careful planning and strategic execution. Having a detailed plan of
exactly what you need to do can help ensure that you optimize results yielded at every show
(Wheeler, 2014).
Kay (2005) addressed the significant issues that China strong domestic demand for road show
exhibition during the past five years has resulted from the strong Chinese economic growth
and the rapid development of downstream markets. The rapid development of downstream
markets has stimulated demand for road show exhibition. For example, with more people
buying cars, automotive road show exhibition have become popular. An ACMR-IBISWorld
analysis of the road show exhibition industry in China during 2014 shows that the industry is
expected to generate revenue of $3.24 billion, up 12.8% from 2013 (CCE, 2014). This
performance represents an annualized growth rate of 11.6% over the fast five years. Value
added is expected to total $1.25 billion in 2014, up to 10.8% from 2010 (CCE, 2014).
In china, there are about 8,000 road show exhibitions of varying size annually (Chan, 2014).
In 2014, their geographical distribution was as follows: South China 27.9%, East China
39.6%, North China, 21.8%, Northeast China 13.5%, Southwest China, 12.4%, Northwest
China 7.7%, and Central China 8.1% (CCE, 2014). With regard to large-scale road show
exhibitions, only Shanghai, Beijing, and Guangzhou are widely accepted as first-tier cities in
the exhibition sector. Provincial capital cities as well as some smaller but active cities in this
industry are considered as second-and third-tier cities. The hierarchy among the second-and
the third-tier cities in China is Vague. Figure 1 identifies the top ten cities hosting the largest
number of road show exhibitions in 2013 and 2014 (CCE, 2013; 2014). Figure 1 shows that
Shanghai, Beijing, Guangzhou and Hong Kong dominate the market, with the number of road
show exhibition being stable and/or increasing.
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Figure 1: Top Ten Cities with the Largest Number of Road Show Exhibition in 2013 and 2014
year
year
year
year
City
2013
2014
city
2013
2014
Shanghai
669
708
Shenzhen
103
138
Beijing
568
604
Dongwan
87
96
Guangzhou 398
432
Qingdao
75
93
Hong Kong
132
145
Chengdu
72
97
Ningbo
103
205
Shenyang
63
84
Jinan
102
176
Changchun
59
73
Dalian
106
123
Hangzhou
53
72
(Source: Compiled from CCE 2013 and 2014 figures)
China gloom economy may exhibition each year. Road show exhibitions are great ways to
increase company visibility and, ultimately increase sales. However, a numbers of issues
accompany the development of the road show exhibition in China, including, poor
organization and management of road show exhibitions, an inability to retain customers, and
waste time and money to conduct road show exhibitions (Hill, 2013). It is imperative that you
maximize your limited time in the booth to get the best return on investment. A trade show is
a performance, booth staff behavior is regarded as the most important factor when
participating a road show exhibition (Soilen, 2013). A problem for exhibition is that booth
staffs do not always seem to behave as they are trained to behave. This type of failure has
been confirmed by research (Tanner, 1995).
Research also shows that much current format training functions so as to reduce contact time
between booth staff and visitors, but does not lead to higher sales (Soilen, 2013). That could
be because training often focuses mainly on technical aspects of products rather than on
relational aspects. Booth staffs are often unable to distinguish between visitors who are
seeking to buy the product and those who have come to the booth for other reasons. Or,
putting it another way, the trainers themselves do not always understand the complexity of
booth staff behavior (Soilen, 2013).
Culture of China is different main issue, and few researches focus on the areas of the
influence of culture on booth staffs verbal and non-verbal behavior. Furthermore, academic
journal fails to address field of non-verbal body language during exhibition. The road show
exhibition companies would lose China market share when they fail to address these issues.
Therefore, the purpose of the study is to explore how to conduct an effective and efficient
road show exhibition in China.
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Literature Review
Companies have been more and more using road show exhibitions for marketing of their
goods and services because they are a hit with the customers (Bello & Lohtia, 1993). An
efficient and effective road show exhibition can help companies attract potential customers,
guarantee maximum visits to the booth and generate greater sales (Steve, 2000). But, studies
in the area of how to maximize your booth staffs effectiveness and efficiency are still few.
People-at-the-booth skills are an area of exhibition management which has been seriously
neglected both in theory and in practice. Research by Friedman (2004) shows that half of all
companies say they provide training only immediately prior to an exhibition. At the same
time, there are significant differences among companies lists of dos and donts (Pitta et al.
2006). Research also suggests (Tanner, 1994) that booth staff training is inefficient. Another
finding suggests that current training leaves a great deal to be desired, which comes to much
the same. In other words, this is an area with great potential for improvement (Tanner, 1996).
Ordinary sales training does not offer much help to those who staff exhibition booths. Booth
staffs have to practices two kinds of behavior, selling and non-selling/promotional, and they
need to be able to distinguish between a numbers of different types of agent with different
needs (Bello, 1992). These are things that ordinary sales training does not cover. They imply
that the company should have at least two sets of objectives: one for its selling and one for its
non-selling activities (Tanner, 1994).
Previous studies (Chon & Chung, 2003; Karpati, 2010; Whltfielda & Webber, 2011; Kim,
Wang, Moyle, Hill, 2013; Whitford & Moylan, 2014) have done many researches on what to
do and what not to do in order to not only maximize road show exhibit sales but also ensure
the success of the exhibition as well as after effect of the exhibition. However, there is no set
format for guaranteed success in a road show exhibition, the ability to read and interpret body
language among booth visitors to your trade show exhibit booth can put the company at an
advantage from a sales perspective. Subliminal signals can be strong indicators of how the
booth staffs should approach and engage potential prospects (Steve, 2000).
Research methodology
Qualitative method was conducted with focus group and in-depth face-to-face interview.
Focus groups were used in this study for generating a rich understanding of booth visitors
experience and attitude toward road show exhibition and booth staff behavior. From the focus
group, only the instrument of survey in-depth interview was developed to explore the drivers
and inhibitors of how to conduct an effective and efficient road show exhibition.
Non-probability sampling- a snowball sampling method was used in this study. The
respondents were also asked to recommend their friends to participate in the study. The target
respondent for this research is defined as male or female, who living and working in China
and has experience of attending road show exhibition, aged 25 or above. In order to fully
understand booth visitors perception of road show exhibition and booth staff behavior, the
researcher will use the focus group interview. Thus, there were 4 focus groups in this study
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all together, namely 2 groups of male with aged 25 or above and 2 groups of female with
aged 25 or above. The homogenous focus groups are used in this study to open with each
other and help minimize conflict that might inhibit group members, and thus, make it easier
to unearth personal opinions and experiences. Whereas mixed sex make it more difficult to
achieve a high degree of group interaction (Keown, 1983). There were about 8 booth visitors
in each group and each interview session lasted no more than two hours. The focus groups
interview held in different date without one month.
In focus group interview, the researcher located or developed a survey instrument, convened
a small group of booth visitors who can answer the questions on the instrument, and recorded
or took notes of the group conversation. Focus groups enable the researcher to collect
information regarding both verbal and non-verbal communication between participants, on a
social interaction context (Leow, Vincent & Atikah, 2013). In this study, the researcher
collected non-verbal communication data during the focus group session through recording
notes and analyzed nonverbal communication data along with verbal data (Leow, Vincent &
Atikah, 2013).
Based on the focus groups, 56 in-depth interviews were conducted. In the interviews, the
research began with several demographic questions to warm up, than explore respondents
general perception towards road show exhibition and booth staff behavior, allowing them to
talk about their own experience. Each interview lasted about one hour. All interviews were
conducted in Chinese and recorded. The interview records were then transcribed into Chinese,
followed by translation into English.
The pre-test was conducted for reliability and validity of questionnaire. The pre-test in the
present research was performed with participants from the target population and the
questionnaire to check whether any questions needed further improvement. After the
participants completed the questionnaire, they were asked whether they easily understood the
questions and whether they had any questions or comments about the wording of the
questions. The participant indicated no problem in understanding the questions. After data
analysis, data became saturated.
Results and Discussion

Focus groups
In this study, the researcher proposes to run one group in each distinct segment of age,
income and gender. Table1 lists the four proposed focus group. This method will result in
groups composed of two groups for males and another two for females in the age range of 25
or above. The group results will be addressed by segment starting with the first group (G1)
and the proceeding up to the last group (G4), which is discussed as below.
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Table 1: Proposed Focus Groups for This Research
No.
Number of Focus Groups
1 group with 8 persons
Demographics and Psychographics
Male
Age 25 or above
RMB 2,000-RMB 10,000
Attended road show exhibition in

the past one year
Female
Age 25 or above
RMB 2,000-RMB 10,000

the past one year
Male
Age 25 or above
RMB 10,000 or above

the past one year
Female
Age 25 or above
RMB 10,000 or above

the past one year
Regarding of booth visitors perception of road show exhibition and booth staff behavior,
respondents have different attitude toward road show exhibition and booth staff behavior. A
respondent from G1 said booth staff should be prepared to answer questions or understand
where to obtain more information. Another respondent from G1 stated my request
responded not timely and efficiently, the booth staff did not quick response to our feedback, I
felt very bad. A respondent from G2 said I liked to learn more about your products and
services, so offered me a brief overview from the script and continued to the conversation
from there to attract my attention. Another respondent from G2 argued if the booth staff
make smile and make eye contact with me, I would like to spend time at that booth, greetings
and body language are important to me. A respondent from G3 said booth staffs personal
quality and ability can destroy the whole exhibition and make me unhappy to spend time at
the booth. Another respondent from G3 said it is not easy for me to access to booth staff to
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obtain more information about the products and services because they are not expertise to
convey important company information to me. A respondent from G4 said booth staffs
should have good attitude and manners when I asked them some questions about their
competitors. Another respondent from G4 said it is significant to be polite and clear
communication between me and booth staffs, or else I was confused and misunderstood.
Therefore, the key items the researcher gets from focus groups are listed in Table 2.
Table 2: Key Items of Perception of Road Show Exhibition and Booth Staff Behavior
Key items from focus group
Greetings and body language

Work attitude
Personal quality and ability
Questions of Questionnaire based on
Site communication
Responsive
promptness
(Requests key items
respondent timely and efficiently)
Engage attendees
Prepare Script
From the in-depth interview, content analysis was conducted to identify the theme to answer
the research questions, What factors contribute to an effective and efficient road show
exhibition? Then, the verbal data is quantified according to understand the theme to identify
the factors contribute to an effective and efficient road show exhibition.
Results
Demographic Profile of the Respondents
Table 3 shows the results of demographic profile of the respondents highlighting their gender,
age, education background and experience with the road show exhibition. As shown in the
Table 3, in terms of gender, the more males (53.6%) in comparison to female (46.4%)
participated in the survey. Regarding of age, 35.7% (n=20) of participants fell in the range of
25-35 years old, 32.1 % (n=18) of them belonged to the range of 36-45 years old, 17.9%
(n=10) of them are from the range of 46-55 years old, and the remaining 14.3% (n=8) are 56
and above years old. In terms of participants education background, 8.9% (n=5) were high
school, 53.6 % (n=30) were bachelors degree, 30.4% (n=17) were masters degree and 7.1%
(n=4) were doctorate degree. About the experience of attending road show exhibition, 100%
of respondents have experience of attending road show exhibition.
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Table 3 Summary of the Demographic Characteristics of respondents (N=56)
Gender
Subgroup
Frequency
Percentage
Female
26
46.4
Male
30
53.6
25-35
20
35.7
36-45
18
32.1
46-55
10
17.9
56 and above
14.3
High School
8.9
Bachelors Degree
30
53.6
Masters Degree
17
30.4
Doctorate Degree
7.1
Yes
56
100.0
No
56
100
Age(years)
Education Background
Attending road show

Experience
Total
Content Analysis of Efficient and Effective Road Show Exhibition

From the content analysis, seven themes were developed to answer the research questions.
These themes include greeting and body language, work attitude, personal quality and ability,
site communication, responsive promptness; engage attendees and script preparation for
serving the clients.
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Table 4 Frequency of respondents perception of road show exhibition and booth staff behavior from the content
analysis of qualitative research (N=56)
Perception of efficient and

effective road show
exhibition
Greetings and body language
Work attitude
Personal quality and ability
Site communication
Responsive promptness
(Requests respondent timely
and efficiently)
Engage attendees
Prepare Script
Total
Frequency
Percentage
14
12
3
4
7
25
21.4
5.4
7.1
12.5
10
6
17.9
10.7
Content analysis shows that (Table 4), 14 (25%) respondents feel that greetings and body
language are important factors for road show exhibition successful. From contact analysis,
the respondent responder, I would walk away when they do not smile when I am walking
towards them; I scared to ask questions if they cross their hands when talking to me. Some
respondent even responded, I do not understand why they do not look at me at all when I am
asking them questions. It makes me feel so stupid., I could feel the irritation when they
gave me a contempt smiles when a questions was asked. I would not approach those
exhibitors for sure.; I would stay longer in the exhibition booth if they greet me with smile
and leave me some space to look around the booth.; I would not enter those booth with
staffs sitting inside the booth and they do not stand to welcome us.
In addition, engaging and greeting with having eye contact, being friendly and approachable,
asking opened ended question. According to respondent, they were happy when they were
greeted and welcome with a open ended questions such as What bought you to our booth
today?. Royer and Brignull (2002) stated, during exhibition, staffs can break the ice and
easily initiate a dialogue. However, Yoon et al. (2004) stressed the opening questions should
be relevant to the event. For example, in education road show the first thing that organizer
can ask is which level of education that he interested about and the conversation can goes on
and on. People will feel convinced when someone talking and give eye contact to them where
they will feel appreciated (Tafesse & Korneliussen, 2012).
Mee et al. (2004) mentioned the booth staff should be aggressive to meet and greet everyone
at the show and find the best prospects. According to Leow and Vincent (2013), the staffs
cannot stand with your arms crossed at the booth (the palace guard position). This position is
unwelcoming and tends to drive potential engagement away. Furthermore, Radford et al.
(2013) focused that staffs should not stand with your hands folded low in front of you (the
fig leaf position) or behind you (the military at ease position) for the same reasons as
above and do not fail to be impeccably dressed and groomed because the exhibitors has only
had one chance to make a first impression.
This findings were supported by Steve (2000) that reported that exhibitors should consciously
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sending warm, confident, positive signals at all times, the booth staffs tell attendees that they
are someone worth knowing. In addition, Honeycutt (1991), Carli et al. (1995) also supported
the findings that reading body language among visitors at road show exhibit booth, make sure
the booth staffs sending positive friendly signals by how you stand, communicate and smile.
The findings also supported the more recent experimental study by Hayashi et al. (2012) on
natural encounter is enhanced with right nonverbal communication and body language.
Content analysis shows that (Table 4), 12 (21.4%) respondents feel that booth staffs working
attitudes determine their behaviors, which result in good customer satisfaction. From contact
analysis, the respondent responder I feel not welcomed, especially when the booth staff are
sitting, eating and reading or otherwise be distracted at your booth, I feel not welcomed
when the booth staffs engage in conversation with your fellow booth sales person. some
respondent even responded if you are already busy with giving a demo to someone else, take
a quick moment to welcome me into the conversation, make me feel welcome, otherwise I
am likely to move on, It is really bad, if booth staff really must check email or do other
important thing, and have to end the conversation, make sure your booth is staffed by
someone else, or else I am likely to move on. I can not trust the booth staffs when I feel your
body language conflicts with your verbal message, I feel the booth staffs not really welcomed
me, although they smiled to me, they refused to have eye contact with me.
Leow, Vincent and Atikah (2013) stated that research has proven that not many people are
able to identify their own nonverbal communication, and when your body language conflicts
with your verbal message, it is clear to anyone paying attention that your mind is actually not
in agreement with what you said. Therefore, Levinson, Smith and Wilson (1997) argued that
when booth staffs have a negative attitude about being at a road show exhibition, their body
language lets everyone around know they feel "this is a futile and unimportant exercise".
According to Diehi (2013), the body language and politely signal play significant roles in
either dismiss or present a product demonstration. To end the conversation and to disengage
from your visitors, you can shake their hands, thank them for their time, communicate that
you need to move on to someone waiting, and then turn away. This will politely signal that
your conversation is over. It is called pattern interrupt. Since you are not a talk show host
such as David Letterman or Jay Leno who rely on commercial breaks to end their guests
appearance, you must learn pattern interrupt techniques to politely end your trade show booth
conversation. After all the explanation has been given, if the visitor interested with the
institute, staffs need to help them with all the papers and if not all the brochure and pamphlets
need to be given for reference of the visitor.
Hoyle (2002) pointed out that visitors will not judge you and your product by the beauty of
your trade show display; rather they will consider your staffs behavior, body language and
appearance as key to their interest level in your product. Therefore, he stated that the booth
staffs do not sit at your booth (unless there is absolutely not a potential lead in sight). In
addition, He also mentioned that the booth staffs do not eat, read or otherwise be distracted at
your booth, besides this, they do not avoid anything that inhibits your ability to engage the
potential client, and engage in conversation with your fellow booth sales person whenever
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there is a possibility to engage in conversation with a potential client. The customer should in
all cases take precedence with your attention.
Content analysis shows that (Table 4), 10 (17.9%) respondents argued that engaging
attendees is regarded as significant factors to contribute to successful road show exhibition.
From contact analysis, the respondent responder If I am walking by, deciding which booth
to visit, I need a reason to stop. If I am scanning the booth, I want to see words that imply
what I will achieve by working with you. I dont want you to tell me you are a cloud-based
application. Some respondents even responded I dont need a list of features, what will it do
for me?, why should I take time to learn more.
Karpati (2010) stressed that the booth staffs must learn how to truly engage attendees, or alter
their presentation for different attendee types. However, the company designs the road show
exhibition display just to make the company proud. The goal is to design so that the
marketing message speaks to the attendees.
Before engaging attendees, the booth staffs must learn how to avoid ignoring the right target
audience rather than wasting time and effort. Tanner (1995) argued that the efficient way of
the booth staff is to ask qualifying questions to decide whether the visitor is qualified or a
time waster. Learn what questions to ask to find out if the visitor has influence in buying your
product, has a time frame that is acceptable to you, and has an adequate budget or financing
available. When people coming, organizer need to identify their body language and identify
either the visitor is the potential candidate or not because sometimes time can be wasted by
approaching wrong target audience (Levinson, Smith & Wilson, 1997). Karpati (2010)
mentioned that after qualifying the visitor, you need to ask if they want to be contacted
further. If they are a hot lead, they will want to be contacted either right away or within the
next 30 days. Be sure to get the necessary contact information on the visitor and then follow
up. After sales service is important. At this point, organizer needs to identify the visitor that
seems interested and that have been registered as well and retain relationship with them.
The booth staffs do not just sign up for the trade show or marketing event out of habit
(Levinson, Smith & Wilson, 1997). The findings were supported by Tafesse and
Korneliussen (2012) reported that make the show organizer sell you on why you should go
again this year, do not register just for the sake of register without nothing on important and
without purposes; do not collect business cards in a fish bowl: If youre going to do that dont
bother going to the show. You can get the same information off the internet; do not leave
your leads in a shopping bag for three months. Have a plan to follow through and get right to
it after the trade show ends. In addition, Diehl (2013) stated that do not hand out brochures
until you have qualified the lead and they have expressed an interest. Handing out brochures
at initial contact inhibit the possibilities of deeper conversation. Often, it is a conversation
stopper -- the potential lead will say thank you and move on. Instead, wait until you have
engaged and qualified the lead before handing out information as the last point of contact.
Content analysis shows that (Table 4), 7 (12.5%) respondents believed that booth staffs
should respond to requests timely and efficiently. From contact analysis, the respondent
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responder I feel no mood to stay longer at this booth when booth staffs can not respond to
my requests timely and efficiently, I dont want to take home a bunch of brochures, thats
what Web sites are for when I back at office, Some respondents even responded if you
dont know how to respond to my requests, how do you know it is worth giving me a 5-10
minutes deep-dive on your product?, I feel be cheated because there must be something or
issues booth staffs refused to mention, I could feel the irritation when the booth staff tend to
use touching to show politeness rather than responding requests by verbal message.
Jolly (2000) argued that booth staffs should have abilities to read body language among
attendees at your road show exhibit booth, after observing and interpreting the visitors body
language, the booth staffs can make strategies to communicate with potential customers about
your products and services. Besides this, Tynan (2004) stressed that body language including
polite tone of voice is regarded as the effective way to deal with visitors who are just jerks.
Tynan (2004) sated that some visitors are just jerks. They want to see staffers squirm, so
theyll keep pounding away at them with rude comments and questions no matter how
charming or informative the answers. In this case, it might be best for staff to respond to
these questions with questions. Staff should ask attendees why theyre posing these specific
questions, and if theres some underlying issue theyre not discussing. Occasionally, these
people do have an issue, which when ferreted out, can be solved or at least addressed. But if
attendees are simply being jerks, responding to their question with a question will often
disarm them and give staffers a little more time to formulate answers or to bring other staffers
into the conversation to render aid. Remember, though, staffers must always stay calm and be
polite. Otherwise, theyll come off as defensive, and that could open a whole new can of
worms.
The findings were supported by Ball (2002), in order to respond to visitors requests timely
and efficiently, the booth staffs do not fail to assess the visitors needs before providing a
solution; they do not leave the booth unattended and do not take your stand down before the
exhibit ends, because the booth staffs have made the commitment for the time. Often
attendees will make a last minute rush of the hail and dismantling the stand shows a lack of
this commitment. They do not fail to follow up on-requests for information. It is imperative
that you do what you commit to in the booth.
Content analysis shows that (Table 4), 6 (10.7%) respondents believed that booth staffs in a
road show exhibition should be prepared to answer questions or understand where to obtain
more information. The booth should be managed by one person who has that expertise and/or
authority, and that person should be accessible at all times. From contact analysis, the
respondent responder I feel not happy when my questions are ignored by booth staffers, I
feel not happy when the booth staffs can not answer my questions, and they are not assertive,
friendly and knowledgeable. Some respondents even responded I can quickly judge how
trustworthy your company is by how well your booth staffs answer my questions and solve
the problems, I feel no trust on them when the booth staffs can not give me answers.
Whltfielda and Webber (2011) stated that preparing answer questions that appeal to booth
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visitors needs and wants. After each day of a show, ask staffers what odd questions they
received from attendees, and create a list. This will help you keep a finger on the pulse of the
industry and make some generalizations about what people are concerned about at the time.
Then, devise appropriate answers for these tough questions, and others like them, seeking
help from other people within your organization if necessary. Go over these questions and
suitable answers or prescribed courses of action for each.
Furthermore, Whltfielda and Webber (2011) stressed that take a look at your company and
industry to see if theres anything going on that might prompt new questions. For example, is
one of your new products late to market or defective? Has a company executive recently
made the news for improper behavior? Have stock prices plummeted, or are there industry
rumors of an upcoming merger? Devise a list of potential questions and fitting answers and
distribute these to your staff. By giving staffers a few examples of the questions theyre likely
to field in the booth, youll help them mentally prepare for the onslaught and hopefully
prevent any blank-stare responses. Finally, encourage staffers to discuss oddball questions
with each other and devise answers on the fly (with your assistance if necessary) (Ball, 2002).
If one attendee posed a tough query to your staff, chances are that other similar questions
could be coming their way. Even if a staffer fudged the first response, theres no reason to get
it wrong twice. Once in a while, attendees queries are better answered by an executive or
trained media professional in the booth. If you have these people on hand at the show, be sure
your staffers are aware of who they are, how they can find them, and what type of questions
should be directed their way. That way, tough questions can go straight to a booth staffer
thats specifically trained to answer them. And, if your company is indeed involved in some
kind of scandal, merger, or tricky situation, consider sending someone to the show whose
sole purpose is to address attendees concerns. That way, youll have one person with the
right answer every time, so the rest of your staff can focus on traditional staffing duties.
Content analysis shows that (Table 4), 4 (7.1%) respondents believed that good
communication between booth staffs and booth visitors can avoid misunderstanding and
complaints. From contact analysis, the respondent responder I feel not valued when the
booth staffers communicate with me without making eye contact, they just have to
demonstrate that they are paying attention to me, I feel unhappy when the booth staffs
continue talking without listening and observing my body language, feeling and emotional
express. Some respondents even responded I feel sad that I can not understand what the
booth staffs are talking about if they lack the product and industry knowledge to competently
answer questions.
Soilen (2013) argued that when the misunderstanding and complaints arise, the booth staffs
need to meet the complaining booth visitors and customers, and make apologies to them.
Often, a simple Im sorry that ...is all attendees are looking for with their questions or
complaints. They want a real human to step up to the plate and admit that the company or
product somehow wronged them. After that happens, their steam usually dissipates, and they
can move on. So if someone or something related to your company has truly wronged the
attendee, ask your staff to admit the error and apologize. But then move on. And if it turns
out that there has merely been a misunderstanding, perhaps between a salesperson in the field
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and this attendee, your staff should take partial or full responsibility for it and do their best to
clear up the misunderstanding. Most attendees just want to know whats really going on, and
an explanation will often satisfy their needs (Ball, 2002). Again, as soon as possible, staff
should redirect the conversation toward a positive topic. You dont want the attendee leaving
your companys booth with a bad taste in his or her mouth.
Content analysis shows that (Table 4), 3 (5.4%) respondents argued that booth staffs should
have good quality and ability to wise deal with their competitors. From contact analysis, the
respondent responder I feel confused when the booth staffs like to criticize their
competitors, I feel stupid when the booth staffs remind me that I bought bad quality products
from their competitors. Some respondents even responded I feel unhappy when the booth
staffs pretend to be confident to show that their own product is better than competitors, but
their facial expression, hand and arm movements betray them.
Hoyle (2002) argued that dont call out or criticize the competition .If youre exhibiting at the
right shows; youre probably surrounded by competing companies. As such, you can expect
to get questions about how your product stacks up to the competition. But youre at the show
to generate awareness for and interest in your products, not those of your competitors. Even
mentioning competitors by name gives them unnecessary airtime with attendees. And
blasting the competition isnt a good idea because for all you know, the customer with whom
your staffer is speaking may already own the competitors product. If you belittle the
competition, youre essentially calling the attendee stupid for buying the somehow defective
product. Or worse, the attendee might start arguing for the competition. Now youve got
someone openly touting the competition in your companys booth where other attendees are
likely to hear the exchange.
When an attendee asks how your product compares to the competition, staffers shouldnt
mention competitors by name, nor talk badly about them. Rather, they should offer a vague
answer and then ask the attendee about his or her needs (Tanner, 1995). For example, they
could try, We compare favorably with all of our competitors. Tell me exactly what youre
looking for. Or better yet, have them highlight differentiators that the competition cant
match. For example, lets say someone asks why your prices are higher than the competition.
Staffers could say something like, Actually, our list prices might be higher, but when you
take into account the total cost of ownership, were actually lower given our products
reliability and our outstanding customer service. And remember, staff shouldnt information
dump a list of features on the attendee. All conversations should be geared toward attendees
needs (Wheeler, 2014). As you can see, training staffers to handle tough questions isnt any
harder than prepping them to complete other booth duties. Just prepare them with information
and go-to sources in the booth, and arm them with appropriate responses and tactics. Before
long, they will be managing awkward questions with ease.
Recommendation of Future Study and Limitation

The future of study should focus in these fields of combining non-verbal body language and
exhibition management, training the booth staffs at exhibit booth by applying the knowledge
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of body language in order to approach and engage potential prospects, and considering
culture as significant factors for influencing booth staffs behavior and body language. The
limitation of the study is sampling; the use of a small sample resulted in not generalizeable
across all areas of China. In addition, there are some research bias may occur in the process
of study because an interviewers attitude or remarks can influence responses.
Conclusion
It is significant for companies to maximize booth staffs effectiveness and efficiency by not
only providing trainings of what staff should do and not do in the road show exhibition, but
also managing their behavior and having ability to read and interpret body language among
booth visitors in order to reach the customers heart, which in turn increase sales, potential
customers, and companys brand image.
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or miss, Critical Social Policy, 23.
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initial encounters. Southern Journal of Communication, 56(3), 161-177.

Hoyle, L. H. (2002). Event marketing: How to successfully promote events, festivals,
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The Needs of Research for Higher Education

Institutions and Academicians in Cambodia
Leow Chee Seng
Dean, Graduate School, IIC University of Technology,
Cambodia
Ahmed Razman Abdul Latiff
Head, Non-thesis, Putra Business School,
Malaysia
Rosni Binti Ab Wahid
Senior Lecturer, Universiti Kuala Lumpur, Business School,
Malaysia
Vincent Leong Wing Sum
Academic Director, IIC University of Technology,
Cambodia
Abstract
Cambodia is a developing country that starts to focus on internationalization of education.
Many efforts have been done by the Ministry of Education Cambodia to boost the
productivity and business excellence in the field of education. This paper focuses on the
importance of research for both the universities and also among academicians. By
understanding the importance of research to the sector of higher education, implementation
and key strategies were proposed to achieve the goal so that education in Cambodia would
achieve business excellence. By focusing more in research and development, Cambodia
education could achieve global standards and be sustainable with high quality education.
Keywords: Business excellence, university, education, research, educational strategy
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Introduction
Research and experimental development comprises creative work undertaken on a
systematic basis in order to increase the stock of knowledge, including knowledge of man,
culture and society, and the use of this stock of knowledge to advice new application. This
statement is adopted from The Frascati Manual, The Organisation for Economic Co-operation
and Development (OECD) and is currently used in Department of Education and Science and
Training of Oxford University, United Kingdom.
From the description, it is crucial for academicians to focus on research in assessing
community and program needs, developing engaging results-based curriculums, preparing the
most effective outreach messages, demonstrating candidate success, and more. This basic
guidance also enables academicians to achieve business excellence in quality education
framework (McAdam, & Welsh, 2000).
Gill and Johnson (2010) clearly describe that research is not always a concept that
practitioners, managers and policy makers respect. It is seen as academic activity conducted
by others - to the profession, not with the profession. Lecturers or the educational
professionals continue to learn, explore new knowledge, analyze information, adapt their
behaviour according to the information received and look at gaps for improvement (Sherrell,
Hair and Griffin, 1989).
Business Excellence Framework and Higher Education

Sadiq Sohail, and Shaikh (2004) started the research on quest of excellence in business
excellence. In the research, the basic elements of quality excellence were discussed and it was
much related to the Baldridge framework.
Figure 1: Baldridge Business Excellence Framework
Organisational Profile:
Environment, Relationships and Challenges
2.
Strategic
Planning
1. Leadership
5. Human
Resource Focus
7.
Business
Results
3. Customer 6. Process
And
Management
Market
4 Measurement,Analysis
and Knowledge
Focus
Management
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(Source: Fallah,1993).
The Business Excellence Framework (BEF) is an integrated leadership and management

system that describes the elements essential to sustainable organizational excellence. Porter
and Tanner (2012) explains that the model is applied to assess and improve any aspect of an
organization, including leadership, strategy and planning, people, information and knowledge,
safety, service delivery, product quality and bottom-line results .
Importantly, the BEF recognizes the unique nature of each enterprise inclusive university
(Abdulla Badri et al., 2006). When an organization embarks on a journey for excellence, it is
challenged to look within and address key questions, such as how are we really performing
as an organization?, what are we good at?, what do we need to improve?
The internationally recognized Business Excellence Framework ensures that the
organizational review remains holistic; that is, it encompasses all levels of the organization
and considers all factors that can influence performance. Garvare and Isaksson (2001) added
that business excellence framework enables any organization to clarify the factors inhibiting
or accelerating organizational advancement and provides the tools to implement targeted
strategies. The BEF has been proven relevant to all types and size of organization
multinational, SME, not for-profit and public sector.
In term of leadership, lead by example, provide clear direction, build organizational
alignment and focus on sustainable achievement of goals. All university has a clear mission
and vision to ensure the sustainable strategy. Savolainen (2000) found that an excellent
organization realizes that a culture of excellence can only be achieved and sustained when
organizational leaders, particularly senior leaders, lead by example and model behaviors
based on all of these principles. Senior leadership communicates the mutually agreed
organizational purpose, values and core strategies and ensures that they are effectively
deployed.
University needs to understand what markets and customers value, now and into the future,
and use this to drive organizational design, strategy, products and services. University
recognizes that the users of its services and processes are best able to judge the usefulness,
suitability and worth of its offerings; that is, the value it provides. Customer-driven
excellence means using knowledge about how markets perceive value, to influence the design
of key areas such as strategy, end-to-end processes and the nature of services. This has many
benefits for the organization, including sustaining competitive advantage, improving
customer acquisition, generating loyalty and gaining market share (Galbreath & Rogers,
1999). However, Seng, Sidin, and Sum (2015) disagree with the concept that university
should not take their students as customer when delivering the service but they need to fulfill
the market needs when designing university programs but provide quality training when
delivering their services.
Develop and value peoples capability and release their skills, resourcefulness and creativity
to change and improve the organization in the people element of Business Excellence
Framework. This explain the basic concept justify the needs of the research among
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academicians. According to Chipangura, Van Biljon and Botha (2014), an excellent

organization knows how enthusiastic its people are, and why. Lecturers working in a
particular process understand the process best. Harvesting their ideas improve the system and
their outcomes, promotes shared ownership of the organizations goals and creates a
committed, loyal, productive and innovative workforce. Ganieva et al. (2005) found that
attention to the satisfaction, development and wellbeing of lecturers enhances their
performance and working relationships and would eventually improve organizational
outcomes. As the results, lecturers could upgrade their skills and keep update themselves with
high engagement and motivation with involving and collaborating research with the faculty.
The other component in business excellence contributes to the needs of research skills among
academicians but the contribution is less significant. In short, academicians should continue
to upgrade their research skills to up high standard for the higher education provider that are
servicing.
The Beauty of Research for Academicians

Sanderson (1969) published a paper to address the issue that research improves and informs
practice and carries a subsidiary career-related purpose for the academic community. Most
higher education institutions evaluate academicians through the number of research and
publication (Hussain et al., 2015). Academicians agree that it is difficult for someone to
achieve tenure if he or she does not publish. Hence, it is clearly shown that research is one of
the key determinants of success in academic world.
Research conducted in the university may be related to reward structures within the
institution. Hemmings and Kay (2010) mentioned that university typically provides two types
of incentives: extrinsic and the intrinsic. Extrinsic refers to rewards such as salary and
promotion. The intrinsic rewards refer to satisfaction arising from the completion of research.
For example, you feel proud and satisfied because your work is recognized and agreed by
other academicians. Personal achievement such as experiencing autonomy, and personal
growth through work are invisible satisfaction when involved in research.
Academicians must continue to learn and upgrade themselves. The continuous improvement
can be done through research. When exploring into a new areas and getting information from
literature review helps academicians to stay update with the latest trend in the field (Hawley,
2006). For instance, in marketing, when conducting literature review, we start to understand
that marketing does not focus on the product development but the trend now focuses on
customer engagement and customer actualization. Research helps academician to stay in the
right tune.
In addition, academicians would learn new skills when conducting research that could boost
their professional standing. A qualitative researcher can learn from a quantitative researcher
when they collaborate to conduct a research. When joining and collaborating with other
researchers, academicians do not only benefit in term of the research skills, they will learn
people skills such as active listening, negotiation and other communication skills.
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Furthermore, academicians can increase their network through collaboration research.

Research grant is also another area that attracts researchers to venture into research. There are
many international research grants that are available globally. For example, International
Association of University offers LEADHER Grant to strengthen university institutional
research management capacity through professional development opportunities for senior
administrators. The program is also designed to promote international cooperation and peerlearning by providing grants for projects that bring together at least two partner institutions.
Scholarly work provides evidence and argument even though it frequently fails to offer fact
and proof (Lea & Street, 1998). It helps academicians identify and conceptualize problems,
activities and outcomes related to teaching and learning. Besides, research findings might
also contribute to common language and theoretical frameworks that can be used among
academicians to discuss and analyze. Next, research provides means of inquiry for planning
and decision making when we have insufficient information for decision making (Zsambok,
2014).
Academicians must understand that conducting research is not only a branding exercise for
themselves but they are bringing the name of the university and country to international arena
especially when a research is significant and contributes to both body of knowledge and to
mankind. One must think big and act steadily to achieve the goal on being an effective and
efficient researcher.
The importance of research for Higher Education

No one will argue that the reputation of an academician is based on his or her research. This
is because it will build the reputation of his or her institution. However, to simply depend on
the works by the academicians will not be enough. The higher education institutions need to
also play its roles in enhancing its research activities and experience. In fact, when we look at
the major components of QS World University Rankings, they are primarily focused on
academic reputation, employer reputation and research impact. Presently, none of the
Cambodian universities appear in the top 300 of Asia universities. Vietnam National
University Ho Chi Minh City are ranked between 201 250 in the 2015 ranking.
Therefore, it is no surprise that the importance of research conducted by Higher Education
has always been a prominent agenda by any developed and developing country. In the paper
on Higher Education published in 1991, UNESCO explained that the social function of
Higher Education is essentially guided by:
1) the pursuit of excellence in teaching, training, research and institutional performance,
2) the relevance of services offered by higher education institutions to the perceived
priority needs of their respective societies, and
3) the quest for balance between short-term pertinence and service and long-range
quality, between basic and applied research and between professional training and
general education.
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If we look closely at these three social functions, all of them will have research as their
underlying fundamentals and choosing to ignore it will have detrimental effect on the
sustainability of the said institution.
The reasons why research plays a very important function in higher education institutions can
also be reflected on their contributions and impact to the community. A UK economic impact
assessment of university research released in 2010 found that the 3.5 billion a year is
currently spent on publicly funded research which generates an additional annual output of
45 billion in UK companies. The data also suggests that benefits of research spending in
higher education are greater than those from other areas of government supported research
and development (R&D).
Moving Forward
After identification the needs of research among academicians, ministry of education should
implement several strategies to engage the academicians towards researches and publications.
First, Ministry of Education and Youth Cambodia should set up research grants to encourage
research activities in Cambodia. The research grant can be sub-divided into several categories
to covers areas such as social sciences, engineering and pure science. All academicians
should have the fair chance to participate and apply for the research grant. Those eligible
proposals should be funded to motivate academicians to get involved in academic research.
In addition, Ministry of Education and Youth in Cambodia should start an association of
universities in Cambodia to encourage interaction between universities. This platform
provides academicians a place to share their research experience and also dilemma and
challenges when conducting research. For instance, this non-profit association also provides a
platform for the academician to collaborate among each other in term of research. By having
engagement between academicians, they would be able to achieve synergy and produce a
higher quality research.
Mentor-mentee system can be implemented within university to encourage the senior
lecturers to share their skills and knowledge in research with the junior lecturers. This system
creates a knowledge management environment within the university. University should
discourage individual excellence policy and encourage the colleagues to be able to grow and
excel together in their career pathways.
Training and coaching should be given to young lecturers who have just completed their
graduate studies. When the academicians attend the training, they would be given continuous
professional development (CPD) points so that academicians are given a chance to upgrade
themselves in their career path. Various trainings such as writing skills, high impact journal
publishing and even revision of research methods would help academicians to keep up to date
with their research skills.
University should organize conferences to attract academicians to share their thoughts and
ideas in the conference internationally. For instance, university can provide incentives for
academicians who are involved in research and publication by providing them grants to
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attend conference. The university policy must be fair and based their contribution to the
university. Fair principle is very important to ensure sustainability and motivation of
academicians.
Number of publication and qualification of university lecturers should be used by Ministry of
Education and Youth, Cambodia as the reference for university ranking. In addition, the
government could provide awards to universities which are involved in research and
publication. This strategy helps the university to get recognition and at the same time, the
hard work of the academicians is rewarded.
Conclusion
Research is a human device invented and developed not only to push the limit of the human
knowledge, it is to improve the quality of individual and group life. This underscores the
importance of research, the continued existence and relevance of which will last as long as
there are human beings who wish to expand their knowledge and understanding about the
world and everything therein.
In short, research is extremely essential for higher education institutions and the
academicians. Ministry of Education of Cambodia should provide facilities to prepare and
equip researchers and academicians with the right research skills. Competent research skills,
quantitative and qualitative research helps academicians in Cambodia to compete and
contribute internationally. Act now in order to help Cambodian academicians to upgrade
themselves in order to bring the name of Cambodia to the international arena.
References
Abdulla Badri, M., Selim, H., Alshare, K., Grandon, E. E., Younis, H., & Abdulla, M. (2006).
The Baldrige Education Criteria for performance excellence framework: Empirical test
and validation. International Journal of Quality & Reliability Management, 23(9),
1118-1157.
Chipangura, B., Van Biljon, J., & Botha, A. (2014). The provision of mobile centric services
in Higher Educational Institutions: A case of lecturer readiness.
Fallah, M. H. (1993). Managing TQM in a large company. In Global Telecommunications
Conference, 1993, including a Communications Theory Mini-Conference. Technical
Program Conference Record, IEEE in Houston. GLOBECOM'93., IEEE (pp. 510-513).
IEEE.
Galbreath, J., & Rogers, T. (1999). Customer relationship leadership: a leadership and
motivation model for the twenty-first century business. The TQM magazine, 11(3),
161-171.
Ganieva, Y. N., Sayfutdinova, G. B., Yunusova, A. B., Sadovaya, V. V., Schepkina, N. K.,
Scheka, N. Y., ... & Salakhova, V. B. (2015). Structure and content of higher
professional school lecturer education competence.Review of European Studies, 7(4),
p32.
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Garvare, R., & Isaksson, R. (2001). Sustainable development: extending the scope of
business excellence models. Measuring Business Excellence, 5(3), 11-15.
Gill, J., & Johnson, P. (2010). Research methods for managers. Sage.
Hawley, W. D. (Ed.). (2006). The keys to effective schools: Educational reform as
continuous improvement. Corwin Press.
Hemmings, B., & Kay, R. (2010). University lecturer publication output: qualifications, time
and confidence count. Journal of Higher Education Policy and Management, 32(2),
185-197.
Hussain, S., Liu, L., Wang, Y., & Zuo, L. (2015). Journal rankings, collaborative research
and publication strategies: Evidence from China.Accounting Education, 24(3), 233-255.
Lea, M. R., & Street, B. V. (1998). Student writing in higher education: An academic
literacies approach. Studies in higher education, 23(2), 157-172.
McAdam, R., & Welsh, W. (2000). A critical review of the business excellence quality model
applied to further education colleges. Quality Assurance in Education, 8(3), 120-130.
Porter, L., & Tanner, S. (Eds.). (2012). Assessing business excellence. Routledge.
Sadiq Sohail, M., & Shaikh, N. M. (2004). Quest for excellence in business education: a
study of student impressions of service quality. International Journal of Educational
Management, 18(1), 58-65.
Sanderson, J. A. (1969). Research and Education. JOSA, 59(9), 1253-1254.
Savolainen, T. (2000). Leadership strategies for gaining business excellence through total
quality management: a Finnish case study. Total Quality Management, 11(2), 211-226.
Seng, L. C., Sidin, S. M., & Sum, V. L. W. (2015). Selling With Heart and Soul: Transform
Yourselves to be Sales Superstars. Human Behaviour Academy.
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Reengineering Supply Chain Management

Participants Role in Sustainability
Meghdad Abbasian Fereidouni
Limkokwing University of Creative Technology,
Cyberjaya, Malaysia
Hossein Nezakati
Faculty of Economics and Management,
Universiti Putra Malaysai, Malaysia
Abstract
To improve the sustainability of supply chain, relationships of entire supply chain
participants, from where the product or service comes to where it consumes, should be
assessed as a network. The aim of this study is to evaluate the role of each participant of
supply chain and explore sustainability implementation issues in supply chain when it is not
considered as a network. Using literatures and network based theory, Government, Customer,
Non-Government Organization (NGO), Focal Firm and Supplier are assumed as five
participants of Sustainable Supply Chain Management network and their relationships are
resulted as a conceptual model. This study can be useful for researchers that assume the
supply chain only as simple buyer- supplier relationship. The finding of this study suggests
system thinking to sustainable supply chain adoption issues.
Keywords: Government, Customer, Non-Government Organizations, Focal Firm, Supplier,

Sustainability
Introduction
In globalization economy, outsourcing a business does not imply outsourcing duties or
dangers, or that the companys obligation ends as far as is getting sold. Leading businesses
understand they have a part to play in whole lifecycle of the services and products.
Sustainable Supply Chain management (SSCM) is really a key in order to maintaining the
actual integrity of the brand, making sure business continuity as well as managing functional
costs. It is also an essential necessity of the actual execution from the Global Compact
principles. SSCM is progressively known an essential component of business responsibility.
Controlling environmental, social as well as economic effects of Supply chain make great
business sense in addition to being the best move to make and combating corruption (Sisco,
Chorn and Pruzan-Jorgensen, 2010).
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A network based business design has progressed in the last few years as businesses have
transitioned from the hierarchical, vertically incorporated format to some much looser, even
virtual, network associated with partnerships along with key providers (Christopher and
Jttner, 2000). The actual complexity associated with such global supply chain creates
trouble in controlling them, when the majority of the suppliers tend to be independent
companies. Traditional functional issues, for example demand impulsiveness as well as poor
forecasting, remain on top of the listing of major issues, but environmental (e.g., resource,
environmental impact) as well as Social (e.g., working situation, labor practice) sustainability
issues have grown to be increasingly much more important. They are usually tackled with
numerous approaches, such as government legislation, communities pressures, industry selfregulation, as well as Non-Governmental Organization (NGO) scrutiny (Chen, Zhang and
Zhou, 2015).
Sustainable Supply chain management(SSCM) may be understood because the
administration of materials, information as well as capital flows in addition to cooperation
amongst companies across the supply Chain while getting goals through all three dimensions
associated with sustainable improvement, i.e., social, environment and economic, into
account including customer, stakeholder needs networking with competitors in addition to
local NGO, trade unions, consumer groups, along with other organizations cooperating to test,
outline and improve operating conditions within the supply Chain. The need for a holistic
view to all members of supply chain will be criticized and a conceptual framework will be
suggested demonstrating how Supply chain partners influence Sustainable Supply Chain. One
implication of that is which different priorities within businesses (focal firms) could be
highlighted. Highly relevant sustainability practices, introduced by United Nations Global
Combat like Human Right and Labor, Environment and Anti-corruption could be included
inside a system thinking because this kind of actors could be significant areas of the system
horizon associated with SSCM, whereas conventional sustainable Supply chain analyses
neglect to recognize this particular and help to make halt in the focal organization
(Frostenson and Prenkert, 2015).
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Figure 1: Example of Supply Chain Network (Govindan, Jafarian & Nourbakhsh, 2015)
Supply Chain participants in Sustainability practices

Within system-based business theories, the importance of integrating proper decisions over
the network in the customer end towards the supplier end is really a challenging task. It may
best being conceived since the integration associated with marketing strategies and Supply
chain methods. Marketing approaches are worried with decisions associated with customer
segmentation, targeting and positioning depending on product, price, distribution as well as
promotion choices. Supply Chain approaches consist of a firms performance orientation in
the direction of cooperative partners within the network or chain and can include process
configurations over the key Supply chain procedures (Green, McGaughey & Casey, 2006).
As highlighted lately by Mentzer et al. (2008), supply Chain strategies are worried with
optimizing cross-organizational actions and rely on a near interaction along with in-company
advertising and product sales resources, procedures and abilities (Mentzer, Stank and Esper,
2008). Firm-level advertising approaches have to be infused in to cross-organizational
company processes to make sure a finish customer as well as market perspective over the
companies inside the supply Chain network (Jttner, Christopher and Godsell, 2010).
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Figure 2: Supply Chain participants (Seuring and Mller, 2008)
In this part, the writer tries to demonstrate the role of each member of Supply chain using
extant literature and determine what problems they are facing when they are working
separately. In next part, a conceptual framework are suggested how Supply chain members
can interact together.
Governmental Rules and Regulations

Government rules in form of minimum salary, working situation, disclosure laws may be an
essential tool within enforcing least standards within the supply Chain. However, because
supply chains grow worldwide, many suppliers can be found in developing countries in
which the government has less capability to enforce their own laws. Therefore, companies
create firm- or even industry-specific codes of conduct and practice compliance monitoring
since the principle method to address bad working conditions (Beresford, Pettit and
Whittaker, 2005).
Under circumstances where governmental regulations as well as incentive policies lack,
supply Chain companies driven through the pursuit associated with profit absence the
impetus to purchase environmentally solution production. As director and superior of
resources and also the environment, the government is responsible to manage firm activities
in support of environmental sustainability. Besides, imposing a fine on air pollution activities,
government also needs to encourage and stimulate companies to purchase environmental
safety via incentive-based guidelines. The penalties collected with regard to pollution
activities may be used to motivate environment protection expense (Ding, Zhao, An, Xu &
Liu, 2015)
Monitoring as well as auditing is really a labor rigorous and pricey process, particularly if a
purchaser is requested to review multiple sections of its supplier system (Ulstrup Hoejmose,
Grosvold & Millington, 2013). Chen et al (2015) documented that just 15% from the apparel
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brands observed more than 80% of their suppliers. Whenever companies' personal auditing
gets infrequent or even predictable, this loses usefulness (Chen, Zhang and Zhou, 2015).
Non-Governmental (NGOs) discipline role

Standards that tackle environmental as well as social methods are progressively common
these days. With the actual expansion associated with global Supply chains, multinational
companies (MNC) supply products through developing nations, as manufacturing, processing,
submission, and usage spreads throughout borders. Concurrently, and especially from 1990s,
non-governmental businesses (NGOs) possess organized actions and been a part of social
actions and marketplace campaigns that try to influence company practices upon problems
for example human privileges, labor requirements, environmental sustainability, and lower
income reduction (Bartley, 2003).
Generally, both buyers and their suppliers hurt particular financial deficits when NGOs
identify the suppliers' infractions. The suppliers could be commended to consider costly
educative steps. The buyers may also hurt status damage for their suppliers' reckless actions,
so these people take countermeasures appropriately. Thus, even though NGOs do not interact
using the buyers straight, they might have a substantial indirect effect on the purchaser
through auditing their own suppliers. Many purchasers have integrated NGOs to their
monitoring techniques. Some choose to enroll in a group initiative, or make use of the service
of the outside business that focuses on such actions (Chen, Zhang and Zhou, 2015).
Unfortunately, some multinational companies are a member of Ethical Trading Initiative, and
while using service associated with Fair Labor Association (FLA). These groups work
collaboratively along with companies in order to defray the price of monitoring and supply
creditability by way of certification, but there might be conflicts associated with interest.
Other genuinely independent NGOs can occasionally achieve much better results (Carter and
Jennings, 2002). The new ethics that exceed the conventional quality as well as technical
qualifications have concurred with the rise associated with partnerships in between
companies and NGOs. The wide selection of business codes of conduct, certification, ecolabeling, social confirming and fair Trade items are associated with an increasing quantity of
associations, collaborations, or alliances made up of MNCs and NGOs. These codes are made
to minimize the responsibility on Suppliers by reducing the amount of standards with that
they must show compliance. Also, they are intended in order to streamline the procedure of
doing joint audits associated with suppliers and also to reduce your time and effort required
associated with companies to style their personal codes. Nevertheless, there is really a risk
which joint codes do not report all of the issue regions of the global Compact, or cannot meet
particular concerns for many businesses. This is especially the situation for brand-owning
businesses, as they will probably come pressurized from stakeholders, e.g., NGOs (Linton,
Klassen and Jayaraman, 2007).
Focal Firms Commitments
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Production processes in many cases are distributed worldwide. Suppliers, focal businesses
and clients are connected by material, information as well as capital flows. In line using the
value from the product comes environmentally friendly and social load sustained during
various stages associated with production. Regarding this, focal businesses of Supply chains
may be held accountable for the environment and social performance of the suppliers
(Seuring and Mller, 2008). Focal businesses are individuals companies that always guideline
or control the Supply chain, provide the direct contact towards the customer, and style the
service or product offered (Handfield and Nichols, 1999; Skjott-Larsen, 2007).
Plambeck and Tylor (2015) report that some suppliers learnt how to hide their own violations.
Locke et al. (2007) assessed the data related to Nike throughout 1998-2005 to exhibit that
checking alone is not able, but might work if it combine along with other interventions
centered on tackling a few of the root reasons for poor operating conditions. Critics from the
private auditing strategy also think that some businesses use these types of measures to not
improve sustainability but in order to limit lawful liability or even prevent status damage
regarding a scandal (Locke, Qin and Brause, 2007).
In the resource-based look at of competitors, strategic assets are noticed as the foundation for
shareholder value simply because they enable the actual firm to create and put into action
strategies which improve its effectiveness as well as efficiency on the market and bring about
competitive benefit (Kumar and Rahman, 2015).Focal firms always resist implementing all
supply chain code of conduct when they feel alone. Government incentives, customer
community support and even NGO motives can reduce the cost of SSCM.
Customers Marketing Role

Segmentation since the basis with regard to strategic client integration holds criteria which
reveal worth co-creation possibilities with clients. The worth co-creation perspective may be
proposed through the service dominating (S-D) reasoning of advertising (Vargo & Lusch,
2004). It depends on the notion how the customer is definitely a co-producer and also the
emphasis that the company may only help to make value propositions simply because value is
not embedded within the services or products as this kind of but produced as customers
connect to them. Both office space highlight the important role from the customers worth
creating process since the starting stage for segmentation. The customers worth creation
process can be explained as a number of activities performed through the customer to attain a
specific goal. One key facet of the customers capability to create worth is the quantity of
information, understanding, skills along with other operant resources that they will access as
well as use (Francis, 2002). If the company really wants to improve its level of customer
integration, it needs to develop its value making processes so that they enhance the
customers power to utilize obtainable resources more proficiently and successfully.
One way of rotting the client value development process is with the value structure model.
The model shows that value is done when the client relates attributes from the companys
offering using their ability to bring about their personal desired consequences last but not
least to their own goal accomplishment. From the supply Chain outlook, short lead time being
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an attribute of the companys Supply can bring about short period time like a customer
consequence last but not least, to a greater response in order to changing customer demand
since the final objective. The worth hierarchy model shows that the thought of customer
worth as co-created worth implies an awareness of what the client values as well as how this
is often translated in to value propositions. Additionally, it reveals the actual joint obligation
of advertising and SCM within understanding client value development, segmenting clients
and within developing section specific worth propositions (Kozlenkova, Hult, Lund, Mena
and Kekec, 2015).
In addition, it provides the outlook from the customers customer to the picture since the
customers outcomes and objectives are based on their personal customers worth creation
procedures. Moreover, customers along with frequent brand new product introductions will
need different worth propositions than individuals with stable products. Likewise, when
clients introduce a brand new product, their value processes and therefore desired
characteristics and consequences will vary from those within the products growth phase.
Conceptual Framework
To challenge the sustainability issues demands new problem-solving methods that consider
entire chain to accounts, and therefore avoid unintentional consequences. Time has arrived
for systems thinking (Fiksel, 2012).
Tap in to system thinking will provide a holistic view for sustainable supply chain issues.
According to provided literatures and the role of each practitioner with the issues related to
them, sustainable supply chain can be adopted with the firms if the entire stakeholders accept
their role in this system. Supply Chain strategies consequently can influence closer
relationships between parties within the chain in order to accelerate cash flows via time data
compression and smaller end-to-end channel period. Likewise, improved cash flows are
guaranteed through quicker inventory turnover as well as less operating capital inside closely
incorporated chains. Supply Chain strategies can slow up the volatility associated with cash
moves through smaller lead period and greater responsiveness to promote changes that leads
to reduce risks associated with obsolete items or dropped revenue (Frostenson and Prenkert,
2015).
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Figure 3: Proposed Conceptual Framework: SSCM partners relationships adopted

from Fiksel, 2012; Frostenson and Prenkert, 2015
Conclusion
The aim of this study is to create a holistic view of implementation of Sustainability in supply
chain management. To do so, a network based view suggested to think systematically about
relevant issues in current environmental epidemics, social disasters and economic downturn.
To generate a network perspective, the role of each participant should clearly be assessed.
According to provided literatures, each of five assumed supply chain plays important roles in
which if they are considered the only responsible unit, the plans will be failed. Designing a
holistic Supply chain network in which all parties role and interactions defined can increase
the sustainability implementation and solve the current issues in sustainable supply chain.
For example Governmental regulations and NGOs pressure are going to be failed when
multinational suppliers ties with NGOs and going around the rules. If the customers and firms
play theirs role and they are able to recognize this scandal, everything will be clear more.
Moreover, a clear example of this interaction is about recycling issues. This problem is going
to be solved when recycling issues have been seen as network based view. It is a system
thinking that governments after NGOs pressure subsidize environment friendly product to
reduce the cost of product for firms and supplier and regulate taxes for environment
unfriendly products to create a strong culture using environment friendly products. In
proposed conceptual framework, supply chain participants` roles and relations have only been
discussed. For further study, it is recommended to conduct an empirical study and test the
suggested relationships between supply chain players.
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Persuasion through Artifacts, Sociological and

Psychological Dimensions Applied for Employment
Interviews
Mihaela Liliana Stroe
University of Bucharest,
Romania
Abstract
Research suggests that applicants use various impression management tactics during
employment interviews to influence interviewers evalutions of their performance. Yet, little
research has examined interviewers perceptions of applicants impression management
tactics and their degree of nonverbal influence.
This PhD study examines these questions, using both quantitative and qualitative data: Do
interviewers accurately perceive applicants impression management tactics? How are these
perceptions integrated into their evaluations of applicants nonverbal behaviour? Is
perception accuracy influenced by artifacts (professional attire) that interviewees wear?
It has a cross-cultural design, because describes the differences in European Commission
interviewers social perceptions and Romanian Human Resources managers on one hand, and
between social perceptions of European Commission public servants (permanent employees)
and Romanian employees on the other hand, concerning 12 key concepts: persuasion, first
impressions, professional image, credibility, authenticity, professional competency,
trustworthiness, self-management, self-presentation, self-promotion, impression management
tactics, professional appearance.
Keywords: Employment interview, artifacts, professional attire, professional appearance,

impression management tactics, nonverbal influence
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1. Introduction
Regardless the fields you are working right now (for example human resources, sales,
customer care, tourism, administration, politics, etc.), nonverbal communication is
everywhere around us.
Knowing the significance of the artifacts in various contexts, can be considered an essential
element of human interaction, and many times it is represented like a subtle barometer of our
ability of persuasion and nonverbal influence.
Artifacts (items of clothing, accessories, makeup, tattoos, etc.) are part of nonverbal
communication domain, and the study of artifacts has been a constant focus for many
scientific communities in areas such as sociology, psychology, anthropology, neuroscience,
ethology and of course, communication.
From this perspective, my researchs goal is to highlight the existence of a actual interest in
understanding of artifacts and their significance in the organizational context and also,
to clarify several directions that need to be considered when we talk about staff selection and
recruitment procedures (with focus on middle and top management positions).
Despite the increasing importance of new technologies, the selection interview procedures
continue to be the key tool for gathering relevant information about applicants for
employment decisions and personnel selection procedures in organizations (both in public
and private sectors).
While for recruitment procedures were given considerable attention in the last fifty years, I
really believe that, we need more studies to show how the human resources decisions are
taken during the selection interview, especially about assessing first impressions and the way
candidates are dressed (if they are wearing professional attire or not).
Among the ten channels of nonverbal communication (kinesis, proxemics, territory and
personal space, facial expressions, eye movements, haptics, cronemica, olfactory, vocalics), I
have analyzed in depth the impact of artifacts on judgments made by the Human Resources
practitioners in the context of the selection interview. Why the topic of artifacts in the
situation of employment interview deserves to be mentioned inside Academic Journal of
Business Excellence?
Because artifacts have an important role in the expression of our status, power and
dominance in persuasion and manipulation, detecting deception and impression management.
In my PhD scientific study published in 2012 in Romania, my native country, I have
presented extensively the social psychology researches that discuss the case of candidates
who want a job and show a particular tendency to build and apply constant (sometimes even
unconscious) strategies to create a positive image about themselves while they interact face to
face with interviewers.
Clothes play an important role in the selection interview, because they can be signs of social
status and social symbols of power. They affect self-esteem of those who wear them and the
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way others behave towards us. The way a person wear her/his clothes contribute to what we
call "effect of the first information" (primacy effect). Selection interviews are such a context
(or social situation) were the effects of the first information have a big impact on how an
applicant for middle and top management positions will be evaluated.
My PhD scientific study provides answers to questions such as:
- How human resources specialists perceive and interpret impression management
tactics used by the applicants?
- Are their perceptions correct?
- What factors affect the accuracy of these perceptions (eg. interview typology,
clothes/attire, personality of the interviewer)?
- What type of impression management tactics affect the validity of job interviews?
- Do candidates attire reflects their social or personal value?
The following literature review suggests that applicants use various impression management
in employment interviews to influence interviewers evaluation of their performance. Yet,
little research has examined interviewers perceptions of applicants impression management
and their degree of persuasion.
2. Lterature revew
There are several examples in the literature dedicated to impression management that show
that applicants influence the opinions of other social actors involved in the recruitment
process through verbal and nonverbal during selection interview: C. Fletcher, 1989; R.
Gifford and M. Wilkinson, 1985; D.C. Gilmore, C.K. Stevens, G. Harrell-Cook and G.R.
Ferris, 1999; C.K. Parsons and R.C. Liden, 1984; R.E. Riggio and B. Throckmorton, 1988).
It is accepted widely that selection interview is an important context for the impression
management (Baron, 1989a, 1989b; Fletcher, 1981, 1989, 1990; Giacalone and Rosenfeld,
1989; Gilmare and Ferris, 1989a, 1989b; Ferris and Judge, 1991; Gilmore, Stevens, HarrellCook and Ferris, 1999; Rosenfeld, Giacalone and Riordan, 1995).
Additionally, the applicats tend to influence the employment decision answering at the
questions used by human resources specialists and they behave nonverbally in an influential
way in order to create a positive first impression (Anderson, Silvester, Cunningham- Snell
and Haddleton, 1999; Baumeister and Tice, 1986; Leary and Kowalski, 1990; Schlenker,
1980; Stevens and Kristof, 1995).
From antropology point of view, David B. Givens presents in The Nonverbal Dictionary of
Gestures, Signs and Body Language Cues (2005) the usefulness of artifacts: Same as
gestures, artifacts can say a lot about ourselves. The simplest message sent by an artifact is:
Here you can find an object created by human hand!. So, there is an interest for knowing the
significance of artifacts in organizational context? Gregory Stone (1962, apud Damhorst,
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1990, 1) points the attention on the fact that attire employees choose to wear at work or
during the job interview can sent simultaneosly many signs about their identity, their
personal value, their emotional state and their attitude.
This approach is supported by Martin S. Remland who considers that one of the primary
functions of nonverbal communication is to signal the identity of a person. In the work
environment, people learn how to deal with the tension that exists between expressing their
individuality or membership to a certain group and indicating their affilition with the
organisation. (Remland, 2006, 501) Even though we can talk about a sociological tradition
of studies on attire from Herbert Spencer to Pierre Bourdieu at international level, in our
country few research focused until now on presenting the significance of artifacts in social
context.
Also I have brought to my research a new concept called nonverbal intelligence, presented
for the first time by my mentor Joe Navarro in his book Louder Than Words. Take Your
Career from Average to Exceptional with the Hidden Power of Nonverbal Intelligence (2010).
Nonverbal intelligence is the ability to interpret and use nonverbal signals in business to
assess and influence others.
And Joe Navarro (2010, 8) talks about the profit aspect of appearances, referred to as the
beauty dividend: Economists find that people who are good looking tend to earn more
money, as they tend to get hired and promoted more frequently. But the researchers also
found that companies benefited, too, as the presence of good-looking workforce generated
more revenue.
Why do I speak about persuasion through artifacts and nonverbal influence? Because people
will appraise you according to how you look, not necessarily to make judgments (though
some will), but to see what youre projecting as to who you are. Based on their observations,
theyll arrive at conclusions about your status, economic level, education, trustworthiness,
sophistication, background, and level of conventionality or unconventionality. (Navarro,
2010, 107)
More recent information is presented by Amy Cuddy, Harvard Business School psychologist,
in her book Presence. Bringing your Boldest Self to your Biggest Challenges (2015). She
proves through her work that by accessing our personal power, we can achieve presence,
the state in which we stop worrying about the impression were making on others and instead
adjust the impression weve been making on ourselves.
I really believe that when we align our passion, confidence and comfortable enthusuasim,
traits that Lakshmi Balachandra identified in her research on venture capital pitches (2011)
with the attire we choose to wear for an employment interview, we can increase our
authenticity, our level of competency, our trustworthiness and our credibility, the four pillars
investigated through this scientific research and the base of my theory.
If you develop your nonverbal intelligence and you project through nonverbal signals these
all 4 pillars in the same time (authenticity, your level of professional competency, your
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trustworthiness and credibility), you can be successful and gain a position for middle or top
management. In order to develop this skill for business world, I have created a method called
The ABC of Nonverbal Intelligence, which has three steps:
1. Awareness (to know myself in order to be aware how I communicate with my body);
2. Baseline (to know the baseline behaviour of the person in front of me, which nonverbal
signals appear and in what contexts);
3. Congruency and consistency between verbal and nonverbal signals (to observe if they
exist and if the person is credible, authentic, trustworthy and competent).
(You can find more about my method on my website : www.nonverbal-academy.com)
3. Methodology
The attire has become an important aspect in assessing the professional competence of
persons looking for a job, as Special Eurobarometer shows in 2009. This sociological
research had two components: one quantitative (applying online questionnaires) and one
qualitative (semi-structured interviews face to face). These findings help Human Resources
practitioners better detect such impression management behaviours and better conduct
employment interviews.
In the first part of my research I used as method for data collection on-line
self completion questionnaires (random sample). Firstly, I have applied online questionnaires
that targeted permanent public servants (having Administrators roles) from various
directorates and units of the European Commission.
From the total of 76 European Commission public servants (35 Romanians and 41 other
nationalities) I have investigated the social perceptions that they have regarding the key
concepts of research as following: persuasion, first impressions, professional image,
credibility, authenticity, competence, trustworthiness, self-management, self-presentation,
self-promotion, impression management tactics, professional attire.
Secondly, the sample group was formed by Romanian employees (35) working in national
and multinational companies and I also record their social perceptions on key concepts of the
research, mentioned above.
In the second part of my research, I used as method for data collection qualitative research,
using semi-structured interviews with two distinct groups. One group was formed by heads of
departments (25 head of units and directors) from various European Commission departments
who are directly involved in the selection of civil servants for permanent positions in
middle and top management. Second group was formed by Human Resources managers (25)
from national and multinational companies who are involved in recruiting Romanian people
for middle and top management positions.
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4. Emprcal fndngs
The first scientific question explored was to see whether the Human Resources specialists
refers to artifacts as persuasive factors during the selection interview is supported by data
from the study undertaken. From the 50 semi-structured interviews conducted with European
heads of departments from the European Commission and the Romanian Human Resources
managers, I draw the conclusion that professional appearance is an important element on
which they base their first impression in the context of recruitment for middle and top
management positions.
This statement is in line with the importance that is given to the professional image when
human resources specialists have to choose between a candidate who presents with an
appropriate professional appearance (mostly business attire) and one that does not have one
according to the standards.
Therefore, according to the results, professional appearance counts depending on the position
and the department where candidates apply, fact that is sustained by respondents who claim a
rather large attention given its candidate assessment. This percentage varies between 40- 60%
of the responses to the question Does professional image or attire attract your attention as
recruiter?"
A possible explanation for these results could be attributed to the important social role of
middle and top management positions that claim a professional appearance (attire) that has an
important role in the successful exercise of their duties.
The second scientific question was to investigate if the Human Resources specialists correlate
in their evaluation of artifacts with the four pillars of my above mentioned theory
(authenticity, level of competency, trustworthiness and credibility). The results of my
research show that respondents (both European and Romanian), correlate professional image
and attire with authenticity, confidence and competence. An explanation for this may be, that
any interpersonal relationship is based on trust and we communicate it very easily through
artifacts. From the research, I noticed, that the concern that you appear for the job interview
selection with a professional attire is equivalent to a public declaration that the person is or
isnt self-confident.
The clothes you choose to wear in this particular context (employment interview)
communicate from the first interaction with the selection panel or Human Resources
specialists, if the person is or is not self-confident, this being one of the first things that others
notice it in 4-7 seconds from the face to face encounter, fact that is confirmed by the results.
Another result of the research regarding competence attribute to the applicants, both groups
of respondents in the semi-structured interviews placed professional competency, in the top
of elements that show if the candidate is suitable for the job position that he applied (top or
middle management positions). And the results of my research clearly show that the clothing
you wear and the image professional show if you are or you are not a competent person.
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However, I believe that the credibility is the foundation of trust. You are more credible as you
have a greater ability to stimulate the perception of those around you. This ability is called
"ability to influence". I noticed that the Romanian respondents included influencing skills
among the elements that a person must have to be considered suitable for middle and top
management position. In the case of respondents from the European Commission we have not
made any remarks about "influencing skills", although among the criteria for assessing the
performance of candidates, this characteristic was highly appreciated.
Third research question wanted to see if Human Resources specialists perceive impression
management strategies used by applicants to impress them. Both the Romanian and European
respondents noted ways that candidates use impression management tactics, both verbal and
nonverbal. It should be noted that the Romanian respondents indicated more nonverbal ways
of impression management tactics such as gesticulation, voice inflections, head up,
mirroring behaviours.
Persuading others is just one component of the equation of communication, and in the
selection of personnel for positions of middle and top management is essential to perceive
correctly if the nonverbal behavior of candidates is authentic or not. I believe
that further development programs to develop nonverbal intelligence (such as self-training on
better decoding nonverbal signals and emotions) is an essential component for Human
Resources specialists who are involved in recruitment process, especially for middle and top
management positions.
For the first time in Romania was presented a comparative research between social
perceptions of European Commission officials (various nationalities, including Romanians)
and Romanians from national and multinational companies, on the 12 key concepts of the
study (persuasion, first impressions, professional image, credibility, authenticity, competence,
trustworthiness, self-management, self-presentation, self-promotion, impression management
tactics, professional appearance). The concepts were chosen on research based on the studies
conducted by other researchers before and based on my own experience as a result of
direct involvement in the recruitment processes since 2006.
My goal with the first part of the research was to present the social perceptions of the
interviewees about these 12 key concepts, focusing on cultural differences. It seems that both
officials of the European Commission and the Romanian employees from national and
multinational companies use these concepts daily and they are focused to project them at
work every day.
Another novelty for the European Commission is interviewing 25 heads of departments/units
who are responsible for the selection of personnel for middle and top management positions
to find the concrete mechanisms they use in this activity based on their first impressions. Also,
I wanted to investigate what significance they offer to professional attire, what means
professional image to them, how they can overcome subjectivity and what impression
management strategies they have noticed that candidates used during employment interviews.
Because in the recent years the organizational culture of the European Commission registered
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a deep transformation and its direction is moving towards an entrepreneurial culture, I have
considered necessary a comparative study with Human Resources managers from Romania,
who work in national and multinational companies that are based on such organizational
culture. They perform selection of staff too, so the candidates they search through selection
personnel procedures must match their entrepreneurial culture and also to have personal
values aligned with organizational ones.
Here are some important information gathered from both investigations done in Belgium and
Romania. Regarding the concept of perceived credibility, when we talk about European
institutions, I noticed that 55,6% from the answers received from European Commission
participants to this research equals it with self-presentation using a professional image and
34,6% associates credibility with the value given by the interviewer when you present
yourself wearing business attire.
Look below at the table 1.
Table 1. Distribution of answers given by the permanent employees from European Commission about their
perception of credibility (N=81)
Options
Answers
Percentages
The value given by the interviewer
28
34,6 %
Attraction generated by your personal charisma
16
19,8%
Self-presentation in a professional manner (using
45
55,6%
81
100%
business attire)
Total
It is interesting to notice that 34,6 % of answers indicate the fact that credibility is associated
with the value given by the interviewer as evaluation of the artifacts that you wear during that
employment interview. Thats why the business attire that you choose to wear during the
interview can influence the presence or absence of credibility attribution.
In comparison with Romanian employees, we notice a difference due to the way they
evaluate the factors that influence the credibility concept. The answers given to the value
offered by the interviewer are greater than the answers of permanent employees from
European Commission (42,9% instead 34,6%). Also a greater level (40,4%) we notice at
Romanian employees answers regarding self presentation in a professional manner (using
business attire). Look below at the table 2.
Table 2. Distribution of answers given by Romanian employees about their perception of credibility (N=42)
Options
Answers
The value given by the interviewer

Attraction generated by your personal charisma
Self-presentation in a professional manner (using
96
Percentages
18
42,9%
16,7%
17
40,4%
Vol. 1, No. 1; 2016
business attire)
Total
42
100%
Therefore, personal credibility is won in the first seconds of the employment interview and it
is based exclusively on the self-presentation of yourself in a professional manner (using
business attire, of course).
Now lets look at the concept of perceived authenticity, using the same comparison as before.
I noticed in the answers given by permanent employees from European Commission that
more than half (56,2%) believe that you need to be honest to yourself and 30,3% imply that
you need to be trustworthy. This high rate is relevant if we take into consideration the
Western European culture where the accent on self-development, self-management skills and
authentic presentation of the self (who you really are). So, if you are honest with yourself it
means that you are also trustworthy. Look below at the table 3.
perception of authenticity (N=89)
Options
Answers
Percentages
Be honest with yourself
50
56,2%
Be trustworthy
27
30,3%
Congruency between verbal, nonverbal and paraverbal
12
13,5%
89
100%
messages
Total
A big difference in perceptions was noticed at the answers of Romanian employees, where
60,5% believe that authenticity is linked to the congruency between verbal, nonverbal and
paraverbal messages (5 times greater than permanent employees from European Commission)
and 37,2% consider that authenticity implies to be honest with yourself. Look below at the
table 4.
Table 4. Distribution of answers given by the Romanian employees about their perception of authenticity (N=43)
Options
Answers
Be honest with yourself

Be trustworthy
Congruency between verbal, nonverbal and paraverbal
Percentages
16
37,2%
2,3%
26
60,5%
43
100%
messages
Total
If Romanian employees value the congruency between verbal, nonverbal and paraverbal
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messages, they dont value enough the option be trustworty, which is 10 times less than the
permanent employees from European Commission. A possible explanation is the specific of
Romanian culture and recent history, when we had the access forbidden to research and
teaching human psychology, social psychology and sociology. Therefore, it is the time to
focus more on self-development and self-awareness.
The access for an European job is quite difficult due to the whole process of selection and
recruitment based on the EPSO competencies framework. EPSO (European Personnel
Selection Office) is using this competencies framework to make sure that all permanent
employees have these 8 personal qualities: resilience, priotising and organising, analysis and
problem solving, group work, focus on quality and results, communication, leadership,
continuous learning and development. It is quite obvious that in order to be selected by EPSO,
you need to be true competent in your expertise domain.
Therefore 26,6% from the European Commission employees support this assumption that you
need to be competent in your job and to have a professional attitude. Also 26,3% appreciate
that the person who will be selected needs to be capable to complete the tasks required and 25%
consider professional competency as the sum of all knowledge and skills necessary for the
position you have inside an European institution. Look below at the table 5.
perception of professional competency (N=152)
Options
Answers
To have all knowledge and skills necessary for the
Percentages
38
25%
To be capable
40
26,3%
To be efficient
32
22,1%
To have a proffessional attitude
41
26,6%
152
100%
position you held
Total
All these results are supported by the answers given by the Head of Units and Directors in
their semi-structured interviews where it is stated very clear that professional competency is
one of the key personal qualities assessed at a candidate for a middle and top management
position and that the semi-structured job interview from the Assessment Center used by
EPSO is the right tool used for detecting it.
If we compare these results with the competency evaluations used for assessment of Romania
employees, we notice a difference: 31,1% of the answers acknowledge that competency
means to have all knowledge and skills necessary for the position you held. Same result was
found in the answers given by Romanian HR managers and directors in their semi-structured
interviews. With close percentages we find competency associated with being capable to
perform the job (24,3%), being efficient (23%) and having a professional attitude (21,6%).
Look below at the table 6.
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Table 6. Distribution of answers given by Romanian employees about their perception of professional
competency (N=74)
Options
Answers
To have all knowledge and skills necessary for the
Percentages
23
31,1%
To be capable
18
24,3%
To be efficient
17
23%
To have a professional attitude
16
21,6%
Total
74
100%
position you held
These results are very concludent for the current situation in the Romanian job market. For a
long time, professional competency was an illusion for Human Resources managers. But after
multinational companies arrived in Romania, weve noticed a significant change toward
having a professional attitude.
And last but not least concept to investigate was the concept of trustworthiness. I really
believe that at the base of all interpersonal relationships between people, it is trust. In the
context of European Commission, 38,8% answers were appreciating that an employee is
trustworthy if she/he determines that recruiter to offer his/hers trust during job interview and
28,1% believe that being trustworthy is linked with honesty.
When you are in the job interview context, if you succeed to be evaluated trustworthy by the
recruiter it can mean that you managed to persuade (at verbal, nonverbal and paraverbal
levels) that recruiter so she/he can trust you and your competency. Look below at the table 7.
perception of trustworthiness (N=121)
Options
Answers
To determine the recruiter to trust you during job
Percentages
47
38,8%
To be confident and believe in your potential
14
11,6%
To be loyal
26
21,5%
To be honest
34
28,1%
121
100%
interview
Total
If we look at table 8 (below) we notice a difference when perception of trustworthiness is

evaluated by Romanian employees. In this particular case, Romanians consider that you are
perceived as trustworthy if you are confident and you believe in your potential (39,7%), and
also if you determine the recruiter to trust you during job interview having same value as
being honest (22,2%).
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Table 8. Distribution of answers given by Romanian employees about their perception of trustworthiness (N=63)
Options
Answers
To determine the recruiter to trust you during job
Percentages
14
22,2%
To be confident and believe in your potential
25
39,7%
To be loyal
10
15,9%
To be honest
14
22,2%
Total
63
100%
interview
All these results (perceptions of credibility, professional competency, authenticity,

trustworthiness) obtained from both permanent employees from European Commission and
Romanian employees were analysed together with the results gathered from the 25 semistructured interviews with Head of Units and Directors from European Commission and 25
semi-structured interviews with Human Resources managers from Romanian private
companies and multinationals.
The guide use for semi-structured interviews had questions that focused on these subjects:
1) Which elements linked with first impression are valued by the recruiter?;
2) The importance of professional image and business attire during a job interview;
3) The role and influence of work experience that the recruiter accumulated so far;
4) Which elements indicate that the candidate is the best choise for a middle and top
management position?;
5) What strategies of impression management are used by the candidates for middle and top
management positions?
Maybe you are curious to find out which is the ideal candidate that European Commission is
looking for a middle and top management positions versus an ideal candidate for Romanian
national and multinational companies. European Commission wants a candidate who has
expertise (16 answers), is competent (14 answers), has managerial skills (13 answers), has
vision on long term and charisma (11 answers), has strategic thinking (10 answers), is highly
motivated (9 answers), is authentic (8 answers), you can trust him/her (7 answers), is resilient
(6 answers), and is responsible (6 answers).
Romanian companies want a candidate who has expertise (17 answers), is competent (16
answers), has influencing skills (14 answers), has a proactive attitude (14 answers), has vision
on long term and charisma (14 answers), has leadership skills (10 answers), is highly
motivated (9 answers), is authentic (9 answers), you can trust him/her (8 answers) and
is responsible (6 answers).
There are numerous similarities between those two profiles of middle and top managers
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Vol. 1, No. 1; 2016
(experience, competence, motivation, charisma/vision, authenticity, accountability,

responsibility), but also some differences: whether the European Commission is looking for
people with managerial skills, to think strategically and be resistant to stress, in the business
environment of Romania are highly appreciated people with influencing skills, with
leadership skills, with proactive and innovative attitude.
I found that candidates tend to present an image different from the real one and I believe is
substantially too little explored both in Romania, Europe and worldwide. I think the position
you are applying (as manager) must not lead to behavioral changes, deviations from your real
personality.
People would not have to wish for positions that they are not fit or competent, or contrary to
their beliefs and inner truth. The artifacts were designed to highlight the uniqueness and
particularities of people applying for positions manager, not to transform them in perfect
people.
5. CONCLUSION
Results from research conducted and presented in this PhD study help practitioners in Human
Resources field to detect more effective various impression management tactics used by
candidates (verbal and nonverbal) and to conduct more efficient employment interviews,
detecting easier people who are trying to lie and to manipulate their perceptions.
After this comparative research I draw the following conclusions:
a) Nonverbal influence through artifacts depends on the position and the professional profile
you are looking for;
b) Candidates receive a higher credit during the employment interview if they know how to
choose appropriate professional clothes/attire for that context;
c) The image or appearance is a true professional asset if is supported by proactive attitude,
credibility, authenticity and behavioural competency;
d) People who make the difference are those who presents, in a authentic way, the truth
about themselves (their true self revealed and assumed).
Other studies may be performed to identify which type of interview can allow disclosure of
impression management strategies that candidates apply (for example, using structured
interview), especially when they want to work in a multicultural environment.
It is necessary to study further how cultural differences affect impression management
strategies and which are the nonverbal tactics used to influence recruiters perceptions during
the employment interview.
Potential training interventions (applying my method The ABC of Nonverbal Intelligence
in Human Resources domain) can be developed to help recruiters to improve their ability to
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detect impression management tactics, especially deceiving behaviours, by simply increasing

their nonverbal intelligence in this context.
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Emotional Intelligence with Culture Increases Trust

- How So?
Vaibhav P. Birwatkar
Universitatea Pedagogica de Stat "Ion Creanga"
Chisinau
Abstract
In today's volatile market, a firm's market share relies on the threads that binds its culture,
emotional intelligence and trust. Emotional intelligence helps organizational leaders to
cultivate an organizational culture that produces organizational citizenship behaviors. It is
also critical for the development of significant cultural identity for organizations and instills
high levels of trust and cooperation throughout the organization while maintaining the
flexibility needed to respond to changing conditions. This article is a review and synthesis
between the constructs assists in understanding the antecedents of culture, emotional
intelligence, trust and their mediating role in individual job satisfaction and organizational
commitment.
Keywords: Emotional intelligence, culture, trust, job satisfaction, organizational

commitment
Introduction
Organizational Culture
The term organizational culture is a rather recent one; current literature research began in the
early 1970's and 80's. Until then no attention was paid to the importance of establishing an
organizational Culture. The field of organizational psychology grew with the development of
business and management schools. It led to the understanding of inter-organizational
relationships and corporate cultures (Robbins and Judge, 2007). The question arose why US
companies did not perform as well as, for example Japanese companies. In observing the
differences between American and Japanese companies Ouchi (1981) wrote a book called
Theory Z about the secrets behind successful Japanese companies highlighting corporate
culture in 1981. The book is an investigation of Japanese management practices, which
shows that they are a product of Japanese culture, namely high productivity and employee
loyalty (Ouchi, 1981). Due to this Ouchi and Price (1978) identify a unique management
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Vol. 1, No. 1; 2016
approach by creating a Theory Z Organization, which is a simulator American company with

Japanese characteristics such as long-term employment, consensual decision making,
individual responsibility and a holistic concern. Due to long-term employment the employees
are almost completely socialized into the organizational culture, which is characterized by a
homogenous set of cultural values that are similar to clan cultures (Ouchi and Price, 1978).
As Ouchi and Price (1978) point out, common cultural values promote greater organizational
commitment among employees. Furthermore, Ouchi and Price (1978) identify several
American companies to underline Theory Z, such as IBM and Kodak. Moreover, Ouchi
proposes that this management approach could lead to lower rates of absenteeism and
turnover, greater job satisfaction, higher quality of products and better financial performance
if U.S firms were to adapt Theory Z management practices (Training and Development
Solutions, retrieved in May 2013).
Organizational culture has been growing significantly in importance for the corporate sector
over the last few years, but the debates about what organizational culture is and how it can be
defined have also become more diverse. As Tharp stated, definitions of 'organizational
culture' are almost as numerous as those of 'culture' a 1998 study identified 54 different
definitions within the academic literature between 1960 and 1993 (Tharp, 2009, retrieved in
February 2013). Therefore the following Table 1 gives an overview of the different
definitions of organizational culture.
Table1 Definitions of Organizational Culture
Definitions
Pettigrew (1979)
Deal and Kennedy (1982)
Trice and Beyer (1993)
"Culture is the system of such publicly and

collectively accepted meanings operating for a
given group at a given time. This system of terms,
forms, categories, and images interprets a people's
own situation to themselves" (Pettigrew, 1979).
"A system of informal rules that spells out how
people are to behave most of the time" (Deal and
Kennedy, 1892).
"Cultures are collective phenomena that embody
people's responses to the uncertainties and chaos
that are inevitable in human experience. These
responses fall into two major categories. The first
is the substance of a culture. Shared, emotionally
charged belief systems that we call ideologies.
The second is cultural forms observable entities,
including actions, through which members of a
culture express, affirm, and communicate the
substance of their culture to one another" (Trice
and Beyer, 1993, cited by Tschgl, 2008).
106
Hofstede (2001)
Martin (2002)
Schein (2004)
Vol. 1, No. 1; 2016
"The collective programming of the mind which

distinguishes the members of one group or
category of people from another" (Hofstede,
Hofstede and Minkov, 2010).
"When organizations are examined from a cultural
viewpoint, attention is drawn to aspects of
organizational life that historically have often
been ignored or understudied, such as the stories
people tell to newcomers to explain how things
are done around here, the ways in which offices
are arranged and personal items are or are not
displayed, jokes people tell, the working
atmosphere (hushed and luxurious or dirty and
noisy), the relations among people (affectionate in
some areas of an office and obviously angry and
perhaps competitive in another place), and so on"
(Martin, 2002).
"Culture can now be defined as (a) a pattern of
basic assumptions, (b) invented, discovered, or
developed by a given group, (c) as it learns to
cope with its problems of external adaptation and
internal integration, (d) that has worked well
enough to be considered valid and, therefore (e) is
to be taught to new members as the (f) correct way
to perceive, think, and feel in relation to those
problems" (Schein, 2004).
Organizational culture involves two dominant paradigms, namely the Social Fact and the
Social Constructionist Paradigm. Organizational culture can be illustrated according to the
following characteristics (Loisch, 2007):
Table 2 Characteristics of Organizational Culture, Source: Loisch, 2007
Characteristics
Collective
Emotional
Definitions
It is assumed that cultures are not created by
individuals alone, but as a result of collective
actions. Belonging to a culture involves believing
what the group believes and handling things the
way they handle them, at least part of the time.
The substance and forms of culture are filled with
emotions as well as meanings, which is why they
help to manage and overcome anxieties. Members
of a group seldom doubt the core values and
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Historic
Symbolic
Dynamic
Diffuse
Vol. 1, No. 1; 2016
attitudes of the organizational culture; sometimes

they even take them for granted.
Cultural phenomena are connected to the history
of the organization and its traditions 23 and cannot
be separated or changed rapidly.
Symbols are on the one hand a specific type of
cultural form, but on the other hand they are the
most general and persuasive form of culture.
Furthermore, symbols are not directly sizeable,
but have to be interpreted in order to understand
their meaning.
Even though culture is connected to the
organization's history it still is not static, but rather
dynamic. Culture changes continually due to
several factors. The first one is that new
organizations have to adapt new practices and
theories over time as to a changing environment
and economy in order to fulfill the standards.
Secondly, human communication is by far not
perfect and every individual learns and
understands different things about what a culture
endorses and expects.
The more complex the circumstances are, the
more diffuse the elements of organizational
culture will get.
Some experts identify two types of organizational culture such as authoritarian and
participative. Authoritarian cultures feature centralized decision making with the Chief
Executive Officer (CEO) and a few high-level managers. Departments have different agenda
sometimes in conflict with each other. Employees do not perceive rewards for innovation, but
following orders. They believe that their managers are interested in them only as workers and
not as people. Authoritarian cultures are closed and resistant to change from outside the
organization. Organizations with participative cultures, feature the common value of
teamwork, employees feel empowered to make decisions rather than to wait for orders from
those in authority or in power. The departments work together "like a well-oiled machine".
Department goals match overall organizational goals. Workers feel valued as people, not just
as employees. Participative organizational cultures are open to new ideas from inside and
outside the organization. The primary responsibility for organizational culture belongs to
management who are the decision makers of the organization. Successful managers seek a
workplace culture that supports the goals of the organization.
The greatest area of weakness in management practice is the human dimension, because there
seems to be little understanding of the relationship between managers, among employees, and
interactions between the two. Aligning employees with the business plan gets bottom-line
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results. This requires conclusive organizational culture combined with affective

organizational leadership. For most employees, job satisfaction means pay and benefits to
provide a better balance of work and family life. Quality of life has become internalized,
driven by having the tools to the job-education, skills, knowledge, and qualified managers.
These lead to improved self-esteem and ultimately, stronger organizational performance.
(Turner, 2004, Vander, et al, 2002, Paine and Organ, 2000). Emphasis has shifted from jobs
themselves to gaining knowledge and involvement, as jobs are no longer seen as the only
approach for life. Conducive organizational culture produces managers who listen and
respond to employee feedback. Managers and employees work toward the same objectives. In
this type of organizational culture, employers, demonstrate a thorough understanding of the
work place, both rationally and emotionally, providing a template upon which all strategies
can be based.
A conducive organizational culture provides the platform to build ownership and
commitment to act on strategic imperatives, develop, share, exchange effective practices, and
track change and refine strategy overtime. Emotional intelligence and ethical soundness in
business decision-making are imperative for cultural diversity management as well as
organizational survival and prosperity. Emotional intelligence relates highly to the ability to
recognize and respond to diversity of all kinds which is an important skill for success today
and into the future (Gentile 1998). Organizational culture driven by emotional intelligence
directs human efforts towards making important contributions to the advancement of industry
progress and human welfare.
Emotional Intelligence
Although culture has been proven to be a powerful force in organizations which shapes
people's thoughts, behaviours and emotions (Pizer and Hartel, 2005), scholarly work has
largely ignored the role of emotions in organizational culture (Beyer and Nino, 2001).
Recently it has been argued that the power of culture is largely due to the emotional needs of
individuals (Pizer and Hartel, 2005). Culture provides a social medium within which
executives can identify and form emotional bonds with each other (Beyer and Nino, 2001) to
satisfy the needs for belonging (De Dreu, et al., 2002), identity (Schein, 2004) and social
integration (Ashforth, 1985). The cultural forms which allow members to deal with emotional
needs can be seen through different rituals, rights and norms of interaction. In fact,
researchers agree that culture manages emotion: with cultural norms allowing individuals to
experience and express emotions both internally and externally (Beyer and Nino, 2001).
Emotional intelligence is the capacity of an individual to define his own emotions and to
become sensitive to those that he perceives from the environment and the circle of people he
is interacting with. It may also be that emotional intelligence is the use of knowledge of these
emotions to control situations and create plans and decisions based on the perceived emotions.
Resources would further add that emotional intelligence is part of our personality that dictates
us to become more aware of what triggered a specific reaction, both done by the self and
people surrounding the "self". Emotional Intelligence, often measured as an Emotional
Intelligence Quotient (EQ), describes an ability, capacity, or skill to perceive, assess, and
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manage the emotions of one's self, of others, and of groups. As a relatively new area of
psychological research, the definition of emotional intelligence is constantly changing.
Goleman (1998) defines emotional intelligence as 'the capacity for organizing one's own
feelings and those of others, for motivating oneself, and for managing emotions well in
oneself and in relationships'. In the process and scientific debate to determine an operational
model of emotional intelligence, two markedly different, yet related, models of emotional
intelligence have been suggested. The first model is an 'ability model', which combines
emotion with intelligence (Salovey and Mayer, 1990); the second is what is termed a 'mixed
model', which combines traits with social behaviors and competencies (Goleman 1995, 1998).
The definition of emotional intelligence in this regard consists of three categories of abilities:
evaluation and expression of emotion, regulation of emotion and using emotions in decisionmaking. Goleman (1998) suggests that emotional intelligence in the work situation is a
multidimensional construct consisting of five components. These components are selfawareness, self-regulation, motivation, empathy and social skills (Goleman, 1995).
The high emotional intelligence individual, relative to others, is less apt to engage in problem
behaviors, and avoids self-destructive, negative behaviors. The high emotional intelligence
person is more likely to have possessions of sentimental attachment around the home and to
have more positive social interactions, particularly if the individual scored highly on
emotional management. Such individuals may also be more adept at describing motivational
goals, aims, and missions (Mayer, Salovey, and Caruso, 2004).
Emotional intelligence may contribute to work performance (as reflected in salary, salary
increase, and company rank) by enabling people to nurture positive relationships at work,
work effectively in teams, and build social capital. Work performance often depends on the
support, advice, and other resources provided by others (Seibert, Kraimer and Liden, 2001).
Emotional intelligence may also contribute to work performance by enabling people to
regulate their emotions so as to cope effectively with stress, perform well under pressure, and
adjust to organizational change.
Interpersonal facilitation pertains to interpersonally oriented behaviors that contribute to
organizational goal accomplishment (Van Scotter and Motowidlo, 1996). Emotional
intelligence may contribute to the quality of people's relationships at work because emotions
serve communicative and social functions, conveying information about thoughts and
intentions, and helping to coordinate social encounters (Keltner and Haidt, 2001). Emotionrelated abilities should help people choose the best course of action when navigating social
encounters. For example, the ability to decode facial expressions of emotion can help one to
evaluate how other people respond to one's words and actions, yielding important information
for adjusting one's behavior (Nowicki and Duke, 2001). The ability to use emotions to guide
thinking can help one to consider both emotions and technical information when evaluating
an interpersonal problem. The ability to manage emotions should help individuals experience
and express emotions that contribute to favorable social encounters, in part through emotional
contagion (Hatfield, Cacioppo, and Rapson, 1994).
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Despite important exceptions (Parrott, 1993), people are usually motivated to seek pleasant
feelings and avoid unpleasant emotions. The ability to manage emotions can help people
nurture positive affect, avoid being overwhelmed by negative affect, and cope with stress
(Mayer and Salovey, 1997). Other emotional abilities, such as perceiving and understanding
emotions, also contribute indirectly to the quality of emotional experience by helping people
to identify and interpret cues that inform self-regulatory action. Therefore emotional
intelligence should contribute to positive affect and attitudes at work.
Trust
Trust is "the central issue in human relationships both within and outside organizations"
(Kouzes and Posner 2006) and is critical to understand interpersonal and group behaviour
(Hosmer, 1995). The current trend in organizations towards more team centered, matrix
organizational structures has highlighted the criticality of trust dynamics in team
effectiveness (Costa, 2003) and for the successful management of teams (Butler, 1991). The
growing popularity of the use of teams (virtual, dynamic, static) has seen a reduction in
traditional management mechanisms and an increase in within team interaction and dynamic
leadership. To be successful, teams require a high level of mutual trust (Mayer, Davis and
Schoorman, 1995) to facilitate an environment of psychological safety necessary for the
confidence to take interpersonal risks required for team health and effectiveness (Edmondson,
1999).
Over the last decade, trust has enjoyed an increasing amount of research attention in the
organizational context due to important findings which place trust as a key element for
organizations and its members (Kramer, 1999) critical for enduring organizational and
individual effectiveness (McAllister, 1995). Trust has been found to be related to
performance (Costa, Roe and Tailleau, 2001; Dirks, 1999), satisfaction (Costa, et al., 2001;
Costa, 2003; Aryee, Budhwar and Chen, 2002), commitment (Costa et al, 2001; Costa, 2003;
Watson and Papamarcos, 2002; Aryee, et al., 2002) and openness with feelings (Zand, 1976).
An exact definition of trust is elusive and agreement on any universal definition is lacking, in
large due to conceptions of trust differing on the individual, group and organizational levels
(Rousseau, Sitkin, Burt and Camerer, 1998). Therefore it is critical to define the boundaries
of the construct used in a given study (Costa, 2003). Most researchers agree that the essential
parts of a definition of trust must include, as Mayer and colleagues (Mayer, et al., 1995)
described them, "a willingness to be vulnerable" and "a willingness to take risks". Trust
requires two parties, the party to be trusted (trustee) and the party that trusts (trustor). A full
definition of trust must take into account qualities of both parties, however, the present study
will focus solely on the qualities of the trustee (leader), specifically, the trustworthiness of the
leader.
Perceived trustworthiness is the strongest component of trust as reported in a number of
studies (Costa, 2003), and is operationally defined according to three characteristics of the
trustee outlined in the model by Mayer, Davis and Schoorman (1995). The three
characteristics are: 1) ability or the skill and characteristics which enable the trustee to have
influence in a specific domain (in this case, leadership); 2) benevolence which refers to the
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extent to which the trustee is believed to want to do good to the trustor; and 3) integrity which
refers to the trustor's perception that the trustee adheres to a set of principles and values the
trustor finds satisfactory. It is important to highlight that trustworthiness does not necessarily
indicate trust; it is merely an essential component in the formulation of a trusting relationship,
or more specifically a trusting culture of emotional intelligence. In the organizational context
and especially within teams, where the onus is on the team leader to model behaviour, trust is
second to none (Butler, 1991), without trust you cannot lead (Kouzes and Posner, 2006). One
has to trust one's leader especially if one is to "take risks" in dealing with emotions. Previous
studies have shown trust in managers to be related to job satisfaction, for example, Maltzer
and Renzl (2006) showed a significant relationship between employee trust in management
and job satisfaction. Smith and Barkley (1997) found that mutual perceived trustworthiness
had both direct and indirect effects on satisfaction.
Relationship between Emotional Intelligence, Organizational Culture and Trust

Organizational culture is a social phenomenon which is structured consequently by the
interaction between individual and an organization and cannot be present without individuals
and characteristics such as subjectivity, irrationality and emotionality which could be used to
explain it (Tolmats and Reino, 2006). At such, the importance of emotional intelligence
brought forward to enable the organization to shape the organizational culture and the
activities of all level in the organization (Langhorn, 2004). Though the studies on the topic of
emotional intelligence in the work-related setting are inadequate, it is agreed that emotional
intelligence has a crucial importance in occupational settings (Matthews, Zeidner, and
Roberts, 2004).
One such study was conducted by Tolmats and Reino to find the interconnections of
emotional intelligence competences and types of organizational culture which taken from The
Competing Values Framework which conceptualized by Quinn and Rohrbaugh (1983) in two
business sectors in Estonia (Tolmats and Reino, 2006). The results of the investigation show
that participants with a higher emotional intelligence level gave higher estimates to
organizational culture than participants with lower emotional intelligence. According to the
results of the study, emotional intelligence is usually positively related to Human Relations,
Open System and Rational Goal types of organizational culture, thus forming the hypothesis
that by increasing employees' emotional intelligence it is possible to develop the
organizational culture of the company (Tolmats and Reino, 2006). In The Human Relations
type of organizational culture, leadership and morale are in the focus whereas Open System
type of organizational culture promotes innovation, growth, dynamics, imagination, and
willingness to transform and the Rational Goal type of organizational culture concentrates on
achieving productivity, efficiency, and high performance (Parker and Bradley, 2000;
Dastmalchian, Lee and Ng, 2000).
Another study conducted by Danaeefard, Salehi, Hasiri and Noruzi (2012) to which aimed to
examine the relationship between emotional intelligence, organizational culture and
organizational learning in the service providing organizations of Kermanshah, results
obtained indicated that emotional intelligence has a direct impacts on organizational culture.
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This study shows a direct relation between of the relationship between the factors of
emotional intelligence and organizational culture where the relationship between selfstimulation and organizational culture show the strongest value. At such the creation of
emotional intelligence could pave the way for the development of organizational culture in
the organization (Danaeefard, Salehi, Hasiri, and Noruzi, 2012).
A study was done by Downey, Roberts, and Stough (2011) to investigate the pre-conditions
required for the formation of an emotionally intelligent group culture. Specifically, the study
proposed that team leader trustworthiness at the leader/member dyad level was required for
the formation of an emotionally intelligent culture at the group level. Assessment of the
mediating effects of trust in leaders and workplace cultural emotional intelligence on
individual job satisfaction and organizational commitment in an Australian council showed
that team members' ability to understand the emotions of other team members was predictive
of trust in team leaders and individual job satisfaction and commitment to the organization.
These relationships were investigated using mediation analyses, whereby the relationship
between Understanding Emotions and both job satisfaction and organizational commitment
were significantly mediated by team members trust in their leader. These findings suggest
that how well members of the teams assessed believed their emotions were being understood
was predictive of their level of trust in their manager, which in turn predicted how committed
they were to the council and satisfied with their current position.
This finding follows on from the suggestion that trust is a key element for the creation of
emotionally intelligent workgroups (Edmondson, 1999). Specifically, the degree of trust in
the team leader was the mediating factor between the emotional intelligence of the teams
surveyed and the organizational outcomes assessed. This study confirms that emotionally
intelligent culture has a powerful effect on group member levels of job satisfaction and
organizational commitment. While previous research has shown individual levels of
emotional intelligence to be positively associated with individual employee satisfaction
(Gardner and Stough, 2003; Wong and Law, 2002) and commitment (Gardner and Stough,
2003; Nikolaou and Tsaousis, 2002), effects of emotional intelligence at the cultural level
have not been studied extensively. The results of the present study lend support to the
evidence that culture has powerful effects on individuals (Pizer and Hartel, 2005), and that
assessment of emotional intelligence at the cultural level can provide valuable information
concerning the functioning of teams.
Regarding the predictive efficacy of the ratings of the cultural levels of understanding
emotions, the greater understanding of the emotions of other group members may increase
organizational commitment through fostering a climate of empathy or caring. This
psychological or emotional tie to workers within the organization may actually be extended
to an affective tie to the organization as a whole, leading to greater employee commitment.
Again, at the individual level, levels of emotional intelligence have been previously linked to
higher levels of empathy (Ciarrochi, et al., 2000). In the workplace, increased empathy, or
understanding of others emotional state, may help team-members to regulate their emotions
and achieve workplace goals. Given the identified mediating role of trust in the leader, the
ability of group leaders or managers to demonstrate the necessary skills or ability to lead their
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team, principles and values their team members find acceptable, and appearing to be
benevolent towards their team members appears to be a necessary condition for the formation
of an emotionally intelligent team. This seems to reinforce the claim that trust is the
"emotional glue that can bond people to an organization" (Bennis, 2006). Through this
accepting and trusting culture, driven by the trust employees have in their leaders/managers,
employees may feel more committed to the organization as a whole as a consequence of the
emotionally intelligent culture trusted managers can embed in their teams through attending
to their employees emotions within the workplace.
Conclusion
While both higher levels of the ability to understand the emotions of others and greater trust
in managers predict unique variance in the organizational outcomes, job satisfaction and
organizational commitment, the relationships described herein between these three constructs
offers a more sophisticated understanding of how these variables predict workplace variables.
Whilst ratings of individual traits and their relationship to workplace variables provide
important information concerning how individual qualities contribute to performance and
workplace behaviour, they do not specifically illustrate how these individual qualities impact
at the group or cultural level. Reliable assessment of cultural factors at the group or
organizational level can further inform organizations about the downstream effects of more or
less effective behaviours on group dynamics and performance. Hence, it is evident that the
role of group level emotional intelligence, trust in leaders, and their mediating role in
individual job satisfaction and organizational commitment.
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