AFBE JOURNAL

Volume 4, No. 1, June, 2011

ISSN 2071-7873

TABLE OF CONTENTS

ACADEMIC PAPERS Mahipal Singh Yadav, Impact of Non Performing Assets on Profitability and Productvity of Public Sector Banks in India Kim-Choy Chung, Antecedent of Brand Trust in Online Tertiary Education: an Asian Perspective Charles E. Pettijohn, Linda S. Pettijohn, A Comparative Analysis of U.S. and Chinese Business Student Ethical Perceptions Dr. Jamnean Joungtrakul, Supharuk Aticomsuwan, Laddawan Someran, Mixed Methods Research: A Comparative Study Of Mmr Conducted In The Usa And Thailand Professor E. Gumbira-Said, Research, Development and Application of National Innovation System of Science and Technology for the Development of Sustainable Oil Palm Agribusiness in Indonesia Professor V. Venkata Ramana, Prof. C.R. Rao Road, Urvashi Singh, Role of Management Education in Entrpreneurial Development 232 242 262 275

296

309

DISCUSSION PAPERS Dr. Steven J. Balassi, Comprehensive Assessment in Economics Education 320

BOOK REVIEWS Dr. Lindsay Falvey, Small Farmers Secure Food: Survival Food Security; the Worlds Kitchen & the Critical Role of Small Farmers 333

AFBE Journal

Academic Papers

IMPACT OF NON PERFORMING ASSETS ON PROFITABILITY AND PRODUCTVITY OF PUBLIC SECTOR BANKS IN INDIA Mahipal Singh Yadav Assistant Professor, Department of Economics, Swami Vivekananda Government College, Raisan, Madhya Pradesh, India mahipalhj@gmail.com and Mahipal_yadav2001@yahoo.com

ABSTRACT

Banks directly or indirectly affect economic development because of their many facets. During colonial rule in India, banks were geographically confined to urban areas and provided credit particularly business and trading class and were restructured into nationalized banks during post independence period to achieve broader economic objectives and registered an overall impressive achievement. Despite of this, the question has been raised time and again on myriad restriction of nationalised banks which merely fulfills social agenda of the government and increased non-performing assets. This paper deals with the concept of non-performing assets, its magnitude and impact. One fourth credit of total advances was in the form of doubtful asset in the initial year of the nineties and has an adverse impact on profitability of public banks at aggregate or sectoral level indicating high degree of riskiness in credit portfolio and raising question mark on the credit appraisal. The profitability of all public sector banks affected at very large extent when non-performing assets (NPAs) work with other banking strategic variables and also affect productivity and efficiency. INTRODUCTION Banks directly or indirectly affect economic development (Schumpter1961, Gold Smith1969 and Anagdi 2003) and established all over the world to mobilize savings and invest into economy either directly or indirectly for production and generation of income and employment (Shrivastav 1981). During colonial rule in India, banks were geographically confined to urban areas and provided credit particularly to business and trading class (Gupta2001). The importance and necessity of banking system has been realised in post-independence period and were restructured into nationalised or public sector banks till eighties to achieve broader economic objectives (Chhipa1987 and Deb1988) and registered an impressive achievement in terms of branch expansion, deposits, credit and investment (RamMohan and Ray2004). Despite of this, the question on myriad restrictions of nationalised banks has been raised time and again by academician, policymakers and private players (Purakayastha 1996 and 232

AFBE Journal

Academic Papers

Ruet2003) and placed spurious argument that public banks merely fulfill social obligation agenda of the government. This has led to increase non-performing assets (NPA) and put adverse impact on productivity and profitability of public banks (Abhiman Das 1997), extensively advocating privatisation and globalisation. The government of India set up Goiporia (1991) and Narasimham(1991and1998) committee to examine the efficiency and productivity of the nationalized banks and that recommended to deregulates mechanism and merger public sectors banks into two or three mega banks on the pattern of western countries banking policy. This will increase competitiveness among banks which strengthen not only their capital base but also improve the customer services (Chandrasekhar2005). A number of studies found that banking sector does not work as general commodity production because its have many facets as an industry itself, as an input and the servicing providing sector also. Advocacy of banks mergers as general policy by using the argument of economies of scale, really conceal the hidden goal of exclusion of small borrowers and marginal farmers from the credit policies of the banking sector. In fact, merging of banks did not give viable results at international level (Bagchi and Benerajee2005). The issue of non-performing assets (NPAs) came into existence in 1992 and its absolute amount is increasing continuously from Rs.39253 crore in1993 to Rs.48406 crore in 2006 (FICCI 1999) indicates poor quality in recovery management and high degree of riskiness in the credit-portfolio of the public banks, resulted adverse impact on profitability of banks (Kaveri1995 and RBI 1999). The above discussion and outing debate about non-performing assets (NPAs) of public sector banks necessitates to evaluate and analyses its impact on the profitability and productivity of public sector banks over a period of ten years to reach a final conclusion about strengthening or winding up state public banks. OBJECTIVE OF THE STUDY The broad objectives of the present research paper are: -To analyses the impact of non-performing assets on profitability of public sector banks at aggregate and sectoral level; -To evaluate the impact of non-performing assets on profitability with other variables; -To examine the impact of non-performing assets on efficiency and productivity. DATA BASE AND METHODOLOGY The present study is based on secondary data provided by various publications of Reserve Bank of India. The data is collected for the period of 1994-95 to 2005-06 for the indices of profit, non-performing asset, spread burden, credit-deposits ratio, fixed deposits ratio, operating expenses, provisions and contingences and various other indices of all twenty seven public sector banks. The data regarding to business per employee and profit per employee is collected to examine the impact of non-performing assts on efficiency and productivity of public banks for the period of 1997-98 to 2005-06. The simple linear regression function is used to analyse the impact of non- performing asset on profitability of the public banks. The regression equation for non-performing assets on profitability at aggregate level is: Y = a + b1X1 + u --------------------------------------(1) Where Y=Profit as a percentage of total asset; X1= Gross non- performing asset as percentage of total asset;

233

AFBE Journal

Academic Papers

a= intercept, b=regression parameter; u= standard error. The regression equation for non-performing assets on profitability at sectoral level is: Y = a + b1 X1 + b2 X2 + b3 X3 + u-------------- (2) Where Y=Profit as a percentage of total asset. X1= Gross non- performing asset as percentage of total asset. X2= Gross non- performing asset of priority sector as a percentage of total asset. X3= Gross non- performing asset of non- priority sector as a percentage of total asset. a= Intercept, b=Coefficients of regression parameters, u= standard error. The analysis of non-performing assets at aggregate and sectoral level may not give viable explanation regarding to the performance of banking sector because profitability affected by many other factors such as spread burden, level of priority sector advances, creditdeposits ratio, term deposits ratio to total deposits, operating expenses and provisions and contingencies. The following linear regression function is used to examine the impact of non-performing asset on the profitability of public sector banks with other variables: The linear function of regression models is: Y = a + b1X1+ b2 X2 + b3 X3 + b4 X4+ b5X5 + b6X6 + b7X7 + u -----------(3) Where Y = Gross profit as a percentage of total asset; X1 = Gross non- performing asset as percentage of total asset; X2 =Difference between spread and burden; X3 = Priority sector advances as a percentage of total advance. X4 = Credit-deposit ratio; X5 = Operating expenses as a percentage of total asset. X6 = Fixed deposit ratio as a percentage of total deposits; X7 = Provisions and contingencies as a percentage of total asset; a = Intercept; b = Co-efficient of regression parameters, u = standard error. Business per employee and operating profit per employee were used for productivity variable, treat as dependent and NPA as independent variable. The linear regression function of productivity for business per employee is: Y = a + b1X1 + u --------------------------------------(4) Where Y = Productivity in terms Business per employee as percentage of total asset; X1 Gross non-performing asset as a percentage of total asset =; a = intercept, b= Regression parameter; u= standard error. The linear regression function of productivity for profit per employee is: Y = a + b1 X1+ u --------------------------------------(5) Where Y= Productivity in terms of Profit per employee as percentage of total asset, X1 Gross non-performing asset as a percentage of total asset, a = intercept, b = Regression parameter, u = standard error. IMPACT OF NON-PERFORMING ASSETS ON AGGERATE AND SECTORAL LEVEL Table -1 represents trend, magnitude and composition of gross advances and nonperforming assets of public sector banks. Non-performing assets means that the repayment of advances which has been delayed beyond 180 days has to be identified doubtful asset. A one fourth credit to the total advances of public sector banks was in the form of doubtful asset in 1994 - 95 indicating poor quality of credit portfolio investment of public sector banks. Since 1994-95 the amount of gross advances of public sector banks increased many folds due to low rate CRR policy of Reserve Bank of India whereas percentile of non-performing assets shown declining trend (Mukerji2003). It means that public sector banks started to provide credit to the non-priority sector in the form of

234

AFBE Journal

Academic Papers

personal and consumer loan which directly or indirectly invested in the real estate market and created artificial hike and boom in the prices of housing property. On the other side, the public sector banks adopted strict credit policy for high-risk endowment of priority sectors. TABLE-1 NON-PERFORMING ASSET OF PUBLIC SECTOR BANKS Year 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 Total Advance (Rs. In crore) 159781 187311 244214 284971 325328 380077 442134 509369 577813 661975 877825 1134724 Gross NPA (Rs.in crore) 38385 39584 43577 45653 51710 53294 54774 56567 54090 51541 48399 48406 Ratio (%) 24.02 21.13 17.84 16.02 15.85 14.02 12.38 11.09 9.36 7.78 5.51 4.26

Source: Various publication of RBI The simple regression function is used to analyze the impact of non-performing assets (NPAs) on the performance and profitability of the public sector banks at the aggregate and sectoral level keeping in mind the multifarious factors are not to be considered and result shown in Table-2 and 3. TABLE-2 AGGREGATE IMPACT OF NON-PERFORMING ASSETS ON PROFITABILITY Regression equation a b1 t-value of R Value of NPAs b1 1 2.4271 -0.0494* 0.316 0.50 * Significant at 1 percent level.

D.F 10

The gross profit as a percentage of total assets has taken as dependent and nonperforming assets as independent variable in the bivariate regression model. The value of factor co-efficient of non-performing assets (NPAs) is (b1=-0.0494) in the linear regression function is negative, less than unity and statistical significant at 1 percent level indicating high degree of riskiness in the assessment of the creditworthiness of the borrower and raising question mark on the credit appraisal of the public sector banks ( Sharma2005). The impact of non- performing asset on the performance of public sector banks at sectoral level has shown in Table 3. TABLE-3 IMPACT OF NON-PERFORMING ASSETS IN PRIORITY AND NONPRIORITY SECTOR

235

AFBE Journal

Academic Papers

Regression equation 1 2

b NPA of t- value Priority sector of b 0.0398 0.3279* 0.8648 3.169

-0.115 -30.32

b1 NPA of t-value R D.F non-priority of b1 Sector 0.74 10 0.3298* 3.386 0.56 9

* Significant at 1 percent level. The value of factor co-efficient of non-performing assets of priority sector is (b1=0.0398) positive and statistically significant. The co-efficient of determination R squared in priority sector is higher than seventy percent, shows high degree of explanation of variability in profitability of public sector banks. It indicates that public sector banks are interested to achieve the goal of target-oriented approach without getting proper information of credit worthiness of the concerned beneficiaries (Sharma 2002). The value of factor co-efficient of non-performing asset in non-priority sector is positive and statistically significant at 1 percent level. The co-efficient of determination R squared in the modified regression function shows more than fifty percent variation in profitability but low as compare to the linearity function of priority sector. It means that the advances to the primary activities is difficult to recover due to political interfere. IMPACT OF NON-PERFORMING ASSETS ON PROFITABILITY WITH OTHER VARIABLES The impact of non- performing assets on profitability in totality in simple regression model may not give true result because profitability of public sector banks is affected by many other factors such as credit-deposit ratio, priority sector advances as percentage of total credit, operating expenses as percentage of total asset, the level of spread burden (difference between interest earned and interest expanded) and the burden (difference between non-interest expenditure and non- expenditure income), fixed deposits as percentage of total deposits have been used as a proxy variable to examine their impact on profitability. Regression equations are estimated stepwise in multiple regression models on aggregate values of all twenty-seven public sector banks and x1 appeared as the first variables, thereafter another variable were added one by one to the modified regression equation shows maximum fit in table-4.

The first regression equation of multiple regression models is used to estimate the aggregate impact of Non-Performing Assets (NPA) on profitability. The value of factor co- efficient of non- performing asset (b1= -0.494) is negative and statistically significant at 1 percent level. The negative relationship indicating that any unit increased in nonperforming asset would lead to decline the magnitude of profit of public sector banks (Meena Sharma 2005). Further, it seems that the funds of public sector banks deployed into unproductive asset, which do not yield any income or return and put also adverse impact on the industrial, and agriculture growth (Ram Mohan and Ray 2004).

236

AFBE Journal

Academic Papers

TABLE-4 AGGREGATE IMPACT OF NON-PERFORMING ASSETS ON PROFITABILITY WITH OTHER BANKING VARIABLES Regression a Equation b1 Value of NPA b2 b3 b4 b5 b6 b7 R D.F value of Priority Credit OperatingTerm Provisions spread and sector Depositexpenses deposits and burden advances ratio contingencies 0.50 10 -0.065* (3.978) 1.3055 (1.666) -0.035 (1.131) -0.053* (2.501) -0.0452 (0.426) -0.0166 (0.830) 0.63 9 -0.066* (3.611) 1.8958* (3.075) -0.0264 (0.751) -0.051* (2.281) -0.0244 (0.215) 0.64 8 -0.951* (5.569) 1.8358*-0.089 (2.824) (4.521) -0.013 1.992* (0.328) (2.805) -0.0511-0.0142 (2.107) (0.321) 0.82 7 0.83 6 -0.084* (3.908) 2.0881* -0.085* (2.636) (3.626) 0.85 5 0.86 4

1 2 3 4 5 6 7

2.4271* -0.494* (10.93)** (2.420) -1.0029 1.2428 (0.537) (1.849) -1.4510 0.007 (0.473) (0.190) 2.140 -0.055 (0.819) (2.771) 1.9181 -0.059 (0.698) (0.652) 1.3986 -0.012 (0.474) (0.731) 1.3603 0.0021 (0.425) (0.512)

*Significant at 1 percent level. ** Figures in parentheses are t- value.

The value of spread and burden (x2) variables is added in modified regression equation and its value (b2 = -0.065) is negative and less than unity but statistically significant at 1 percent level. The co-efficient of determination (R) in the changed linear regression is more than sixty percent shows high degree of explanation of variability in the dependent variable and squeezing interest spread income of public banks (Sharma 2005). The outstanding credit on the priority sector in the form of (x3) variable is added in another modified regression equation of multiple regression models. The value of factor co-efficient of priority sector advances (b3=-0.0664) is negative and less than unity but statistically significant at 1 percent level. The co-efficient of determination (R) is 64 percent shows high degree of explanation of variability in the profitability of the public sector banks. The study found that public sector bank extended their branches in the rural areas and provided credit to the marginal and small farmers and traders according to the welfare policy of the government and unable to recover the advances or loan due to political interfere and social unrest (Bhattacaryae and Sivasubramainan2003). It seems that inadequate recovery of loan from priority sector is blot on the credit policy of public sector banks and also adverse impact to get finance from the apex body of capital market for agriculture development. The amount of credit-deposit ratio (x4) is also added to another regression equation and the value of factor co-efficient of credit- deposit ratio (b4=-0.9512) is negative and less than unity The co- efficient of determination (R) in the transformed regression equation is more than eighty percent shows high degree of explanation of variability in the dependent variable. It seems that the high level of non-performing assets (NPAs) made

237

AFBE Journal

Academic Papers

banks credit policy shy and non-viable which blot the primary and secondary economic activities despite enough liquidity is available in the banks ( Ravishanker 1997). The value of operating expenses as percentage of total asset (x5) and term deposits (x6) variable as percentage of total deposits are added in another two modified regression of multiple regressions model and their factor co-efficient are negative and less than unity but statistically significant at 1 percent level. In the last regression equation, the provision and contingencies variable as percentage of total asset (x7) is added and all the seven variables collectively explain more than eighty percent variation in profitability of public sector banks and significant in explaining the relationship. Statistically result reveals that the present level of non-performing asset in public sector banks affects fifty percent profitability of the banks and its impact has gone to increased at very large extent when works with the other strategic banking variables. IMPACT OF NON PERFORMING ASSET (NPAs) ON PRODUCTIVITY The high level non-performing assets not only increasing the working cost of banking sector (Das1999) but also affects productivity and efficiency (Rudra Sensarma2005). The understandings behind that banking staffs are primarily engaged in preparing papers for filing suits to recover loan and over dues on the borrower instead of devoting time for planning to mobilization of funds. Simple regression model is used to measure the degree of relationship between nonperforming asset (NPAs) and productivity. Business per employee (BPE) and operating profit per employee (OPE) variables are used as dependent variable for measuring productivity and efficiency and non performing assets (NPAs) as percentage of total asset as independent variable. Statistically results in table-5 revealed that non-performing assets (NPAs) have negative relationship with business per employee (BPE) and magnitude of relationship is statistically significant at 1 percent level. The value of co- efficient of determination (R) is approximately equal to unity and shows high degree of explanation of variability in the productivity and efficiency of public banks in terms of business per employee. The seems that there is inefficiency and mismanagement in assessment and dispersing the advances in public sector banks but a number of studies found that business per employee is affected by many other factors like automation, computerization, and establishments of branches in unbanked areas (Sharma 2005).

TABLE-5 NON-PERFORMING ASSETS AND PRODUCTVITY Regression equation a b1 t-value of b1 R D.F Value of Non-performing assets 1 19.907 -0.047* 2.420 0.98 7 *Significant at 1 percent level Another indicator of productivity measurement is operating profit per employee (OPE) shown in table-6. The value of factor co-efficient (b1=0.450) is less than unity and statistically significant at 1percent level of significance. The factor co- efficient of

238

AFBE Journal

Academic Papers

determination (R) is approximately seventy percent and shows high degree of explanation of variability in the productivity TABLE- 6 NON-PERFORMING ASSETS AND PRODUCTVITY Regression equation a b1 t-value of b1 R D.F Value of Non-performing assets 1 10.135 0.450* 7.227 0.69 7 *Significant at 1 percent level It indicates that the increase in the level of non-performing assets leads to fall in the profit per employee of public banks at very large extent.

CONCLUSION The gross non-performing assets of public sector banks in absolute terms has shown increasing trend till 2001 and declined later on, whereas its percentage shown declining trend. One fourth amount of total advances of public sector banks was in the form of doubtful or non-performing assets in the initial year of nineties, which raising question mark on the credit appraisal performance of the public sector banks in India. Statistically result revealed that the present level of non-performing assets in public sector banks affects fifty percent profitability of the banks and its impact has gone to increase at very large extent when it works with other strategic banking variables. The high value of co-efficient of determination shown high degree of explanation of variability in the productivity and efficiency of public sector banks in terms of business per employee and operating profit per employee. POLICY IMPLICATION Public sector banks must follow the banking norms and rules at the time of acceptance of credit proposals and such projects having inherited weakness must be rejected at the first instance. The management of public banks should also upgrade the credit approval skills of the staff.

REFERENCES Angadi, V.B.(2003), Financial Infrastructure and Economic Development:Theory,Evidence and Experience Occasional Papers, RBI ,Vol.24,No. 1&2. Bagchi,A.K.and Benerejee,S.(2005),How Strong are the Argument for Bank Mergers? Economic and Political Weekly, March Bhattacharya,P.C.and Sivasubram(2003) , Financial Development and Economic Growth in India:1970-71 to1998-99, Applied Financial EconomicsVol.13(12). 239

AFBE Journal

Academic Papers

Chandrasekhar,C.P. and S.K.Ray(2005), Financial Sector Reforms and the Transformation of Banking, in Ramachandran &Swaminathan(ed.) pp.39-49. Chhipa, M.L.(1987),Commercial Banking Development in India, Print Well Pub., N. Delhi. Das, Abhiman (1999), Efficiency of Public Sector Banks; An Application of Data Envelopment Model Prajnan, Vol, 28, No.2, September. _____________ (1997), Technical, Allocative and Scale Efficiency of Public Sector Banks in India,Reserve Bank of India Occasional Paper,18(2,3) 279-97 Deb,K.(1988), Indian Banking Since Nationalisation,Ashish Publication, N.Delhi. FICCI (1999), Report on Non- Performing Asset of Public Sector BanksMinistry of Finance, New Delhi, No.3, November. Gold Smith. R.(1969), Financial Structure and Development, New Haven Yal uni. press Goiporia Committee (1991), Report of the Committee on Customer Service, Reserve Bank of India, December. Gupta,S.B. (2001),Monetary Economics: Institutions Theory and policy, S.Chand &com.Delhi. Kaveri,V.S.(1995) ,Relationship Between Recovery and Profitability of Banks: A Study,SBI Monthly Review, Vol.33 Mukherji,P.(2003),Dealing With NPAs: Lessons from International Experience, Money and Finance,Vol.12, No.12. Naarasimham Committee(1991 and 1998), Report of the Committee on Financial System, Reserve Bank of India. Purakaystha,P.(1996),Infrastructure and Withdrawal of the State, Economic and Political Weekly,May,pp1317-22 Ramachandran,R.S. and Kaveri,V.S.(1993), Non-Performing Advances: Some Issues. Prajnan, Vol.22, No.2. Ram Mohan,T.T.(2002),Deregulation and Performance of Public Sector Banks, Economic and Political weekly, Vol.37, No.5.pp393-97 Ram Mohan,T.T. and Ray,S.(2004),Comparing Performance of Public and Private Sector Banks, A Revenue Maximization Efficiency Approach, Economic and Political Weekly, March,20, 1271-75. Ravishanker,I.S.and Saha,A.(1997), Impact of NPAs on Capital Account Convertibility, Prajnan, Vol.26, December. RBI (1999), Some Aspects and Issues Relating to NPAs in Commercial Banks, Vol.53.No.7 Roy,T.(2000), The Economic History of India,1857-1947, Oxford University Press, N. Delhi. Rudrasen Sharma(2005),Cost and Profit Efficiency of Indian Banks During1986-2003,A Stochastic Frontier Analysis. Economic and Political weekly, Mar.19 . Ruet,J.(2004), The Future of State Owned Companies: Is Privatization the Answer? Indian 240

AFBE Journal

Academic Papers

Economic Journal, vol.51, pp35-51. Schumpeter,J.(1961), Theory of Economic Devlopment,Oxford Uni. Press. Sharma Meena(2002), Managing Non Performing Asset Through Asset Reconstruction Companies, (ed.) in Book, Economic Reforms in India from First to Second Generation and Beyond, Deep and Deep Publication, N. Delhi _______(2005), Problem of NPAs and Its Impact on Strategic Banking Variables,Finance India,Vol.19, No.3, September Shrivastav,P.K.(1981),Banking Theory and Practics, Himalya Pub.Mumbai. Toor,N.S.(1994), Non-Performing Advances in Banks.Skylark Pub. N.Delhi.

241

AFBE Journal

Academic Papers

ANTECEDENT OF BRAND TRUST IN ONLINE TERTIARY EDUCATION: AN ASIAN PERSPECTIVE Kim-Choy Chung Kazakhstan Institute of Management, Economic and Strategic Research, Almaty, Kazakshtan kimchung@kimep.kz

ABSTRACT The advent of the Internet/World Wide Web and its application to the field of education has provided new opportunities for teaching and learning (in the virtual mode). To cater for the large number of potential new students worldwide, many universities and for-profit education providers have introduced online degrees. However, Internet-based education has not attracted as many students as was expected. Further, studies on brand impact on a students choice of online tertiary providers are scarce. This study suggests that trust is the antecedent of brand choice for online tertiary education, because trust acts to decrease the perceived risk of using a virtual service. Surveys from high school/junior college students in Singapore, Malaysia and Brunei using mall-intercept method support the notion that brand trust in online tertiary education is related to risk aversion, contingent on institutional and courseware design assurance factors. This tri-nation study also reveals that public opinion (friends/familys opinion about online tertiary education, industry support, mouth-to-mouth communication via alumni networks) and Website quality enhanced learners experience and trust in an online tertiary brand. Keywords: Online tertiary education, brand trust

INTRODUCTION Rapid proliferation of the Internet and demand for knowledge in newly emerging economies has created opportunities for universities to improve their finances by offering online tertiary courses. Additionally, increasingly programs are offered partially or fully online in the international teaching environment due to rising costs of conventional education provision and enrolment management issues (Peltier, Dargo & Schibrowsky 2003; Ross 2004). The United States of America (Allen & Seaman 2006), United Kingdom (Souleles 2004) and Australia (Kenny 2003) recorded increases in the popularity of online degree courses. By comparison, online degrees have not been popular in Asia. In Brunei, online degrees had a slow start, needing time to establish their reputation for quality offerings and because of the lack of resources (Leong 2006). A study by Chung and Ellis (2003) showed a generally low acceptance of online tertiary education in Singapore. This is despite several Singaporean studies (Tan & Lambe 2002; Cheung & Hew 2005) indicating favourable outcomes of online learning. Similarly, Alhabshi (2002) indicated that the Internet-based degree has not attracted as many students as

242

AFBE Journal

Academic Papers

had been expected in Malaysia, culturally similar to Singapore and Brunei (in terms of population ethnicity, Table 1).

TABLE 1: POPULATION ETHNICITY OF SINGAPORE, MALAYSIA, AND BRUNEI

Country Malaysia (25 million, 2004 census) Brunei (0.48 million, 2004 census) Singapore (3.2 million, 2000 census) Malay (%) 50.4 66.3 13.9 Chinese (%) 23.7 11.2 76.8 Indian (%) 7.1 1 7.9 Indigenous (%) 11 3.4 Other (%) 7.8 18.1 1.4

Source: CIA-Factbook (2009)

* Note: The indigenous minority tribal groups in Brunei are the same as in the neighbouring Malaysian states of Sabah and Sarawak.

The main reason for the lack of enthusiasm for online degrees in Singapore (Tan & Lambe 2002; Chung & Ellis 2003) and Malaysia (Alhabshi 2002) is the muchpreferred method of face-to-face teaching and learning. There is still a lack of confidence among students, parents and educators that online education could be an effective medium for imparting knowledge/skills. In Brunei, the implementation of online learning is usually at the initiatives of the private institutions (Suhaimi & Lim 2007). In addition, the dramatic globalisation of the world economy over the last two decades has an impact on higher education. Where once universities competed for students, faculty and funds within a national context, today they compete internationally. The overall effect of these technological advances and competition is an increasing variety of niche-oriented, multidisciplinary programs, which are made as attractive as possible to prospective students to increase enrolments (Stensaker 2005). This marketoriented approach of universities has resulted in students facing a variety of education choice/information. For many students today, their undergraduate degree is a large investment that requires them or their families to incur considerable debt before graduating (Moore 2004). With financial outlays increasing, even more importance is placed on the cost benefits and choice of tertiary education. That is, students are faced with a choice of course type, study mode (online or traditional classroom), tertiary provider or even tertiary destination. Branding can assist consumers in identifying products and therefore reduce search costs; provide an assurance of the quality associated with a particular brand reducing perceived risk; and give psychological rewards of prestige and status, helping to reduce social and psychological risks that are associated with ownership/use of a socially inappropriate product (Berthon, Hulbert & Pitt 1997). As with physical product consumption, the brand with its underlying appeals can functions as a route map for students through the bewildering variety of choices/information about tertiary education in our increasingly networked society.

243

AFBE Journal

Academic Papers

Despite the plethora of studies about online education, little has been written within the marketing paradigm. In particular, there is a void of study of trust within the context of consumer-brand relationship in students choice of online tertiary education. This study addresses this void and aims to identify the antecedent of brand trust in online tertiary education in Singapore, Malaysia and Brunei. Online tertiary education is defined here as universitys undergraduate and post-graduate education via the Internet/Web.

LITERATURE REVIEW Characteristics of online tertiary education Kearsley (2000) identifies several major themes that shape online education: connectivity between students and instructors through email and conferencing; time and spatial flexibility (learn anywhere any time); shared knowledge (rich information on the internet); multi-sensory experience via multimedia technology; student-centeredness; and virtual community.

Application of Internet-based technologies to tertiary education can be viewed as the synthesis of the traditional residential university setting with the distance learning university (Hutchison 1995). There are two common methods of using the Web for educational purposes: Web-assisted or Web-based. Web-assisted courses use the Web to supplement face-to-face teaching while Web-based courses utilise the Web as the sole delivery system (Finder & Raleigh 1998).

Typical Web-assisted or Web-based learning program (such as Blackboard) allows students and teachers to communicate with each other in real (synchronous) or asynchronous time. Besides email for communication, students can view, and access course materials, syllabuses, and other relevant databases. In addition, students are able to submit assignments online and view assignment results. Students may complete and submit tests for feedback, and undertake self-tests that do not require submission. There are also a variety of study tools which help students to file frequently used pages and materials, check relevant references, and search relevant courses and words. There are also tools to enable students to take notes, make class presentations and create their own home pages.

Advantages of online tertiary education The anywhere any time and curriculum without walls concepts of Web-based education mean that there is no spatial and time constraints (24 hours access) for study/learning, appealing to those (potential students) who have work or family commitments during the day. For academics, the Web has significant advantages over other media in delivering distance

244

AFBE Journal

Academic Papers

education. It is effective for delivering virtual courses because of its global appeal, global access, easier updating of content, and information richness (Wulf 1996). Thus, Web-based education represents a convenient delivery system for teaching and learning (Dunning & Vijayaraman 2001). Concerns and limitations of online tertiary education Although online methodologies open up access to training because of their electronic reach, they may also present access issues for those students not be able to afford the cost of computer hardware and Internet access. Students living in regional areas may also have access difficulties where the telecommunications infrastructure is inadequate and where the information technology bandwidth makes the downloading of information slow and difficult (Cashion & Palmieri 2002; Kilpatrick & Bound 2003). In addition, learners who suffer from procrastination and low self-motivation for independent learning may not be good candidates for online education (Naidu 1994; Berge & Huang 2004). For effective utilisation of the Web for education purposes, learners must be able to initiate active peer-to-peer discussion (Ruberg, Moore & Taylor 1996); deal with feelings of isolation and singularity (Dringus 1999); have awareness of content and audience (Dringus & Terrell 1998); and be able to evaluate their own learning process (Land & Hannafin 1996). Further, the unusual demand for written communication in term of speed, volume and clarity in a Web environment presents a great potential for miscommunication and could make students unnecessarily frustrated and impatient, leading to low student retention in Web-Based Learning (Ragan & White 2001; Alexander 1999). Rapid proliferation of certificate mills Online education has grown into a multi-billion dollar industry, and in all probability unscrupulous educators may be lurking in cyberspace to take advantage of the uninitiated by providing low quality programmes or offering education certificates for a fee (certificate mill). The rapid proliferation of certificate mills is causing human resource managers and the general public to doubt the credibility of online degrees (Philips 2007). Unless issued by a well-known accredited university (tertiary brand), the quality of the online degree is often doubted (Chung & Ellis 2003). Function of brand The American Marketing Association (AMA 2007) has the following definition for brand: A name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers. The legal term for brand is trademark. A brand may identify one item, a family of items, or all items of that seller. If used for the firm as a whole, the preferred term is trade name. This definition suggests that brands are visually distinctive and that their role is to create an indelible impression. Trust in consumer-brand relationship Studies by Morgan and Hunt (1994), Fournier (1998) and Gurviez (1996) illustrate the importance of trust in developing a positive and favourable attitude, resulting in commitment to a certain brand in successful consumer-brand relationships. Consumers trust in a brand contributes to a reduction of uncertainty in consumer purchases (Garbarino & Mark 1999; Gommans et al. 2001) and is believed to increase

245

AFBE Journal

Academic Papers

customer loyalty (Fullerton 2003; Narayandas & Rangan 2004). Since online learners have no direct contact with their education providers, trust plays an important role in this online tertiary setting. Despite its importance, the concept of brand trust has seldom been explicitly examined in education and consumer-brand literature. This is because diverse views in studying trust across difference disciplines have resulted in various definitions, contributing to the lack of measurement consensus of the trust construct (Gefen et al. 2003; Delgado-Ballester & Munuera-Aleman 2001).

Multidisciplinary definition of trust Economists view trust as either calculative (Williamson 1993) or institutional (Zucker 1986) while psychologists define trust in terms of trustors and trustees and focus upon internal cognition (Rotter 1967). Trust in the psychology discipline is generally discussed as a learned behaviour (Orbell, Dawes & Schwartz-Shea 1994) rather than an inherent personality trait (Gurtman 1992) and is established through a gradual process over time, evolving from past experiences or interactions (Rempel, Holmes & Zanna 1985; Willig 1997). A trustee can be a person, an organization, an object (product), or an idea (brand). Zand (1972) suggests integrity, benevolence and credibility of trustees as the underlying determinants of trust. In sociology, trust is conceived as a property of collective units (ongoing dyads, groups), not of isolated individuals as is the practice in psychology (Lewis & Weigert 1985). Within this context, trust is assessed in terms of social relationships and social institutions (Lewis & Weigert 1985; Shapiro 1987). In the sociological treatment of trust, risk is calculated, so individuals may choose not to trust if the risk is too great (Hupcey et al. 2001). Amongst social psychologists, trust is generally regarded as a highly stable psychological propensity to trust other people (innate psychological trait) in a social exchange, and unlikely to be appreciably modified by commonplace experiences (Becker 1996; Uslaner 2002). However, some social psychologists (Burns & Kinder 2000; Hardin 2002; Yosano & Hayashi 2005) view trust as social learning and assumes individuals develop different levels of trust across different domains of interaction/experiences.

In management, Zaheer et al. (1998) propose a clear differentiation between interpersonal and inter-organisational trust; the former refers to the trust placed by an individual in their individual opposite member, while inter-organisational trust is seen as the extent of trust placed in the partner organisation by the members of a focal organisation. Rocco et al. (2001) and McAllister (1995) view interpersonal trust in an organisation as having two dimensions: i) Cognitive-based trust, which is grounded in the cognitive judgements of anothers competence/reliability (based on the factual knowledge the trustor has of the trustee). ii) Affect-based trust, which is based on the affective bonds amongst individuals. Affective trust typically emerges from repeated interactions among individuals,

246

AFBE Journal

Academic Papers

and experiences of reciprocated interpersonal care and concern. It is also referred to as emotional trust (Rocco et al. 2001).

Marketing strongly relates trust with the competence, honesty and benevolence dimension in a relationship (interpersonal relationships between buyers and seller), that focuses on the belief that the partner has the required expertise to perform his/her activities, carry out his/her obligations or accomplish his/her benevolence promises (Doney & Cannon 1997; Mayer et al. 1995; McAllister 1995; Morgan & Hunt 1994).

Brand trust in choice of online tertiary education In the few studies that explicitly examine brand trust in marketing, its conceptualization is associated with consumers willingness (implies a propensity) to rely on the ability of the brand to perform its stated function (Chaudhuri & Holbrook 2001) or as the confident expectations of the brand's reliability and intentions in situations entailing risk to the consumer (Delgado-Ballester 2004) or simply described in terms of reliability and dependability (Dawar & Pillutla 2000). These definitions of brand trust imply that an individuals propensity to place ones confidence on a brands qualities/attributes and the conscious inclination to avert risk are critical in consumer-brand relationship. Thus, this study conceptualizes brand trust as an individuals conscious inclination to place his/her confidence in a brands qualities or attributes in situations entailing risk to the consumer, and proposes the following hypotheses:

Hypothesis 1: Brand trust in online tertiary education is related to risk aversion, contingent on course design factors. That is, the purchase of online tertiary education can be a risky venture because of the low credibility of the online degree (Tan & Lambe 2002; Chung & Ellis 2003; Philips 2007); the uncertainty that the course contents may not meet the skills/knowledge requirement of the student/society; and the lack of physical or human contact between the online learners and the education providers. Lack of a minimum study period, low entry requirements and unspecified study materials are some of the characteristics of a certificate mill (Philips 2007). A certificate mill refers to the provision of education degrees for a fee. The certificate mill deems previous academic records irrelevant and promises a certificate (based on work experience) within 30 days after enrolment. In order to maintain trust in the online tertiary provider, this study proposes that any course/program developed for online degree must have certain minimum periods of study, and have the same entry requirements and study materials as comparable classroom studies. Hypothesis 2: Brand trust in online tertiary education is related to risk aversion, contingent on institutional assurance factors. Regular faculty evaluation and government recognition of online degrees (Chung & Ellis 2003) and course accreditation (Philips 2007) ensure the quality of online courses. This study proposes that instructor quality (relevant qualifications and

247

AFBE Journal

Academic Papers

motivation), and government recognition of online tertiary providers, act as institutional assurance. Here, a motivated online instructor means one having strong empathy with online learners (time-pressed, computing skills, sense of isolation). Since strong research outputs are a common criteria for generating worldwide university ranking (Stensaker 2005), it is included as an institutional assurance factor as well.

Hypothesis 3: Brand trust in online tertiary education is influenced by direct brand experience, contingent on Website quality factors. Familiarity with a company or brand generates higher trust, unless a person has a negative perception of a brand (Kania 2001). Similarly, a study undertaken by Cheskin Research & Studio Archetype (1999) also indicates a strong correlation between familiarity and trust. According to Alba (1987), consumers familiarity with a brand is associated with direct and indirect brand experiences. A brand experience is an individuals experience derived from interaction with a brand (Landa 2006). Every interaction a person has with a brand contributes to their overall perception of the brand. This interaction ranges from visual contact with a logo, newspaper advertisement, website and brochures to contacts with front-line staff of the brand (Berry 2000; Kaperefer 2004). Brand experience heightens individuals interest, loyalty and trust in a brand (Berry 2000; Delgado-Ballester et al. 2003; Landa 2006). This is because experience plays an important role in trust by making it possible to compare the realities of the firm with preconceived expectations (Mitchell et al. 1998). Given that online tertiary education is a form of invisible purchase (no face-to-face contact with the providers) where the outcome of the purchase (satisfaction) can only be assessed after course completion, a users positive experience (direct) with the brand is key in maintaining trust in this form of learning. This proposition is consistent with the argument that brand trust summarizes both the consumers knowledge and experiences with the brand (Delgado-Ballester & Munuera-Aleman 2005). However, the only form of direct experience an online learner has with an education brand is via the Web site. In fact, Web site quality is discussed as a main factor in engendering trust in the online retailer (McKnight, Choudhury & Kacmar 2002; Sharma 2007; Siau & Shen 2003). According to Levesque and Kelly (2002), easy and immediate access by online learners to the correct content at the right time (up-to-date information) could motivate people to learn and apply their knowledge and skills to improve their individual and organisational performance. To improve user acceptance of a learning site, Levesque and Kelly recommended user friendly (structured) formats that facilitate easy navigation through the content; book-marking that allows the student to return to the last page studied; and interactivity amongst online learners. Similarly, the availability of technical support or helpdesk facilitates student satisfaction amongst online learners (Leiblein 2000). Leiblein writes an online student is time sensitive to a teachers response to a query or to feedback, and so the online learning facilitator must ensure prompt feedbacks to student enquiries for effective learning outcomes. Regular feedback to ensure positive student learning experiences in the online mode is also outlined by Mason and Weller (2000) and Levesque and Kelly (2002).

248

AFBE Journal

Academic Papers

As such, this study suggests that Web site quality factors can influence users trust in an online tertiary brand. Website quality factors refer to how well a learning site can provides online learners up-to-date information (knowledge content), ease of navigation, and necessary links to other relevant websites or provides an effective interaction with other online learners. Hypothesis 4: Brand trust in online tertiary education is influenced by indirect brand experience or public awareness. Indirect brand experience embodies what consumers have seen, heard, learned, thought and felt over time when the brand is presented virtually or in an advertisement (Hoch & Ha 1986). In the education arena, Hemsley-Brown (1999) argues that while students often give utilitarian reasons for making choices about education, these were usually filtered through layers of preconceptions emanating from such influences as family and cultural norms. Consistent with Hemsley-Browns argument, Gatfield and Hydes (2005) study in Singapore identify university choice being made in consideration with referent group (peers) and parents/family members expectations, as well as societal traditions. Similarly, recommendations and advice from friends and family have been identified as an important factor in university choice amongst pre-university students from Malaysia (Duan 1997). According to Chung and Ellis (2003), public opinion in terms of industry support (recognition of skills achieved), strong alumni networks (for mouth-to-mouth communication) and favourable friends or familys opinions about online degrees are vital for market acceptance of online tertiary education in Singapore. This study intends to validate this argument in relation to brand trust. A conceptual model summarising the proposed hypotheses was presented in Figure 1.

FIGURE 1 : HYPOTHESIZED MODEL OF BRAND TRUST IN ONLINE TERTIARY EDUCATION

249

AFBE Journal

Academic Papers

Course design factors - Have minimum study period - Same entry requirements as for classroom study - Same learning material as classroom study Institutional assurance factors - Instructor quality - Research output (university ranking) - Home government recognition of online degree Direct brand experience (via Website) - Interactivity H3 - Easy navigation of website - Up-to-date (relevant) information Indirect brand experience (public awareness) - Family & friends opinion about the online tertiary providers - Industry support (employment prospect of online graduate) - Strong alumni network of online tertiary providers

H1 H2

Brand trust in online tertiary education

H4

METHODOLOGY Questionnaire An interviewer assisted questionnaire where respondents rank the importance (using a 7-point Likert scale) in trusting online tertiary education considering institutional and course assurance factors, direct brand experience (Website quality) and indirect brand experience (public opinion) factors is utilized in this study. All together there are 15 measurement (including 12 exogenous, the other three are demographics) variables in the questionnaire. The questionnaire was pre-tested on a group of 20 Singapore, Malaysian and Brunei students resident at the University of Otago, New Zealand. On average, it was found the questionnaire took between 10-15 minutes for the respondent to complete. The respondents were also asked for their opinion about the difficulty of completing the questionnaire. No problems were identified with understanding (comprehension for the logic) of the questions. Samplings The targeted samplings are high school/junior college students in Singapore, Malaysia and Brunei. English were widely spoken in these three countries and they have fairly similar population ethnicity. In addition, students in their distinctive school uniforms are common sights in the various shopping malls in these countries. Thus, they are easy to identify and solicit responses for the survey. To increase the randomness of this sampling approach, malls were randomly selected in place and time over a twoweek period. To ensure that all possible times were represented when students went to a mall, preliminary observations were taken to identify the time frame the mall had the largest concentration of school students. The period from 1-6pm was observed to have greatest concentration of high school/junior college students in all randomly selected malls. The main author positioned himself at the high traffic locations near the mall entrances to randomly select respondents. Overall, nine hundred questionnaires were distributed in three malls in Singapore, three malls in three major cities in Malaysia (Johore Bahru, Kuala Lumpur and Kuching) and one mall in Bandar Seri Begawan, Brunei. Johore Bahru and Kuala Lumpur represent two large cities from peninsula Malaysia while Kuching and Bandar Seri Begawan represent two large cities from Borneo. Out of the 637 questionnaires returned, 235 were from Singapore, 121 from Brunei and 281 from Malaysia (Kuala Lumpur n=95, Johore Bahru n=89, Kuching n=97). The response data was normally distributed allowing parametric analysis.

250

AFBE Journal

Academic Papers

Factorial validity and structural model test The 637 completed surveys met the primary requirements for factor analysis (i.e. 5:1 case/variable ratio, Coakes & Steed 2001). To test the fit of the data for factor analysis, Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy and Bartletts test of sphericity were used. Tabachnick and Fidell (1996) recommend a correlation coefficient of at least 0.3, a KMO index of >0.6 and Bartletts p<0.05 as appropriate for factor analysis. All measurement variables (exogenous) in the research hypothetical model were subjected to exploratory factor analysis using SPPSs Principal Component Analysis (PCA) using varimax rotation technique. PCA (varimax rotation) was initially chosen because of its ease of interpretation. For varimax, a simple solution means that each factor has a small number of large loadings and a large number of small loadings. This simplifies the interpretation because, after a varimax rotation, each original variable tends to be associated with one (or a small number) of factors, and each factor represents only a small number of variables (Pallant 2001) Inspection of the initial PCA correlation matrix revealed the presence of several coefficients of 0.3 and above. The KMO value was 0.782 and the Bartletts Test of Sphericity was significant (Sig=0.0), showing factor analysis is appropriate. Four components with Eigenvalues >1 were extracted, explaining a total of 64.47% of the variance. The PCA pattern matrix table showed clear structure with the loaded variables (Table 1) similar to the proposed model (Figure 1). Factor loadings ranged from 0.754 to 0.867 for the course assurance factor, from 0.798 to 0.825 for the institutional assurance factor, and from 0.791 to 0.888 for the direct brand experience factor (Website). The public awareness (indirect brand experience) factor had loadings ranging from 0.806 to 0.893. The Average Variance Extracted (AVE) for all four factors was above the recommended threshold of 0.5 (Hair et al. 1995) for satisfactory convergent validity. A reliability test conducted showed good internal consistency with all factorial measurement scales [Composite Reliability (CR) > 0.7], confirming that all the measurement scales used in the 4-factor model were statistically valid. The AVE and reliability test results are also presented in Table 2. TABLE 2 : RELIABILITY TEST STATISTICS AND FACTOR ANALYSIS COMPONENT SCORES
Factorial scale
Courseware design

AVE CR

Item

Loading
0.754 0.866 0.867 0.798 0.824 0.825 0.791 0.844 0.888 0.806 0.893

0.680 0.772 Have minimum study period as for classroom study Same entry requirements as for classroom study Same learning material as for classroom study 0.666 0.748 Research output (university ranking) Home government recognition of online degree Instructor quality 0.709 0.792 Up-to-date (relevant) information Interactivity within the Website Easy navigation of website

Institutional assurance

Direct brand experience (Website quality)

Indirect brand experience 0.745 0.828 Strong alumni network of online tertiary providers (public opinion) Industry support (employment prospect of online graduates)

251

AFBE Journal

Academic Papers

Family & friends opinion about the online tertiary providers

0.887

Structural Equation Modelling (SEM) using AMOS ver. 6.0 software on all factorial models showed that the discrepancy between the sample covariance matrix S and the population covariance matrix () is minimal (that is, [S - () = minimum]. A structural model test (full model) on the 4-factor model used revealed a good fit between the proposed model and the sample data (CMIN/DF=2.10, RMSEA=0.050, GFI= 0.962). The goodness-of-fit and reliability test statistics are presented in Figure 2. FIGURE 2 : FACOR EQUATION MODELLING STATISTICS
Fit measures CMIN/DF=2.10 RMSEA=0.050 GFI= 0.962 CFI=0.974 Hoelter (0.05=281, .98 0.01=317) 1
Code Min period Same entry req Same material Research output Govt recog Instructor 1.00 Qua Up to date f1 Interactivity Easy navigation .72 .74 Strong alumni network .99 Industry support (employment) Friends & family opinion course
assurance factor

a1.51 a2 a3
.44

min period

1 1 .59

same entry req same material

1.00

Measurement items Have minimum study period as for classroom study Same entry requirements as for classroom study Same learning material as for classroom study Research output (university ranking) Home government recognition of online degree Instructor quality Up-to-date (relevant) information Interactivity within the Website Easy navigation of website Strong alumni network of online tertiary providers Industry support (employment prospect of online graduates) Family & friends opinion about the online tertiary providers

a4

1 .86 1 1

Instructor Qua. research ouputs (university ranking)

1.00 .75 .90

institutional assurance factor

.64

a5.69 a6

govt recog

.37 1.00

.88 1.00
Brand trust in online tertiary education

f2
.65

e1 e2 e3

1
interactivity

.78 .92 1.00 .83

Site quality (direct experience)

.34 1 .78 1
Easy navigation up to date infor

.58 1.00

.71

.79

f3
1
Strong alumni network industry 1.00 support (employment) .97 friends & family opinion

p1

.42 1 1

.73
public awareness (indirect experience)

p2.42 p3

Factor Course assurance Inst. Assurance Site quality Public awareness

.79 1.00

f4

Composite Reliability .772 .748 .792 .828

AV 0.680 0.666 0.709 0.745

FINDINGS AND DISCUSSION

252

AFBE Journal

Academic Papers

No major differences between Singapore, Malaysia and Brunei were found with all measurement variables. Homogeneity of variance (Levene) tests between the samples from Singapore, Malaysia and Brunei were not significant (p>.05) for all variables. The two-tail tests of measured significance also showed no significant differences apparent (p>.05) between all measurement items (Table 3). TABLE 3: MULTIVARIABLE TEST STATISTICS
Trust factors Home government recognition of online degree Industry support (employment prospect of online graduates) Have minimum study period as for classroom study Same entry requirements as for classroom study Same learning material as for classroom study Research output (university ranking) Instructor quality Up-to-date (relevant) information Interactivity within the Website Easy navigation of website Strong alumni network of online tertiary providers Family & friends opinion about the online tertiary providers Spore K. Lpur (n=235) (n=95) 6.21 6.12 5.95 5.83 5.79 5.23 5.69 5.72 4.45 4.77 4.60 3.16 3.53 3.99 5.88 5.17 5.55 5.58 4.52 4.71 4.61 2.97 3.41 3.73 Johore (n=89) 6.01 5.94 5.90 5.09 5.52 5.66 4.54 4.81 4.60 3.29 3.51 3.86 Kuching (n=97) 5.99 5.78 5.91 5.03 5.70 5.61 4.61 4.85 4.67 2.93 3.68 3.75 Brunei (n=121) 6.07 5.81 5.79 5.13 5.58 5.65 4.67 4.84 4.70 3.08 3.60 3.82 F 1.01 1.21 0.92 0.87 0.98 1.15 1.33 0.81 0.97 0.93 0.89 1.12 Sig. 0.33 0.27 0.42 0.38 0.13 0.32 0.25 0.51 0.42 0.37 0.22 0.19

i Note: Mean out of 7, p=0.05 (2-tailed), highest scores in bold As shown in Table 2, the highest mean scored variable in all (sampled) cities are home government recognition of online degree (Singapore=6.21, Kuala Lumpur=6.12, Johore Bahru=6.01, Kuching=5.99 and Brunei=6.07). Courseware design factors The SEM results (Figure 2) indicated that courseware design factors had regression weights of 0.64, generally supporting Hypothesis 1: Brand trust in online tertiary education is related to risk aversion, contingent on course design factors. The three measured items (exogenous variables) of the course design factors: Have minimum period of study, course entry requirements and study materials the same as classroom study could be interpreted as respondents viewing these factors as necessary to avoid falling into the certificate mill trap. A regular classroom session in the form of block teaching to complement online teaching is suggested. The venue could be on-campus, hotels or community halls that are central to groups of students. This helps to enhance the credibility and visibility of the online tertiary provider. Institutional assurance factors Similarly, Hypothesis 2: Brand trust in online tertiary education is related to risk aversion, contingent on institutional assurance factors (regression weights=0.88) was also supported in this study. This confirmed that instructors quality; university ranking and government recognition of online tertiary degree are important institutional assurance factors, within the context of brand trust in online tertiary education. The indicated importance of these measured items could be interpreted as a potential online graduate needing the assurance that their efforts and money spent with online tertiary education would be rewarded with public recognition; that quality

253

AFBE Journal

Academic Papers

instructors are available to encourage, mentor and motivate them to maintain their interest in their isolated learning journey; and that the institution they enrolled in is highly regarded worldwide for its quality of teaching/research to ensure credibility of online degree. These findings were consistent with Alhabshis (2002) and Philips (2007) assertions for the need for government recognition of foreign online degrees to ensure credibility and quality of online tertiary education to reduce the problem of certificate mill. Direct brand experience (Website quality) The SEM results also supported Hypothesis 3: Brand trust in online tertiary education is influenced by direct brand experience, contingent on Website quality factors (regression weight=0.78). This confirmed McKnight et al. (2002), Sharma (2007) and Siau and Shen (2003) arguments, that Web site quality is vital to engender trust in online retailers offerings. The measured variables of this construct showed that the Website that provides up-to-date (relevant) information and that enhances interactivity and ease of navigation among online learners can influence brand trust in online tertiary education. While acknowledging that those interested in online tertiary education are mostly time-pressed or facing spatial proximity problems, an initial on-campus orientation is recommended for community building (networking). Face-to face meeting with online tutors and fellow online learners would have extra advantages of psychological assurance of belonging or contribute to a reduction of uncertainty in the purchase of online tertiary education. Indirect brand experience (public awareness) There is also support for Hypothesis 4: Brand trust in online tertiary education is influenced by indirect brand experience or public awareness (regression weight=0.71). This construct was measured by three exogenous variables: Family and friends opinions about an online degree; industry support in the form of employment; and strong alumni networks for word-of-mouth communication, affecting respondents choice of online tertiary education. This may be due to respondents being concerned about employment, that their investment in time consuming and costly education may be rejected by their community, if the education they undertake is not up to the quality expectations of their peers or society. One way of reducing perceived risk over the purchase of online tertiary education is to make online course offerings customer-centric. To enhance brand trust in a particular online tertiary provider, its online program should help students to upgrade their skills for career advancement and be relevant for industry needs. A portforlio of their online graduates in prominent institutions (for marketing promotion) and a strong alumni network would greatly enhance the online tertiary providers reputation. LIMITATIONS AND FURTHER STUDY There are several limitations with this study. First, while the large sample size (n=637) improves its external validity, a comparison of the demographic variables collected in this study with a validation sample (collected in the same geographical areas) would be advisable to ensure the generalizability of the results to the resident

254

AFBE Journal

Academic Papers

population and to test the comparability and stability of the proposed hypothetical models (Hair et al. 1998; Spector 1992). However, a validation sample was not available for this study. Second, by not focusing on a specific institution, the effect of an institutions micro environment (a specific universitys perceived brand image, universitys frontline staff service quality, corporate missions etc) and its brand positioning statement in relation to brand trust as quality cues in online tertiary purchase is unknown. Finally, further study on the relationship between brand image, brand positioning statements and brand trust in online tertiary purchase is needed to provide insights of how brand affects students decision-making process. For the academic community, this is an area where little research has been done. For the university, research information on brand positioning is eagerly sought, given the increasing pressure on universities to attract fee-paying students (Gbbels-Dreyling 2003). CONCLUSION From a review of the literature, hypotheses are developed proposing that the antecedent of brand trust in online tertiary education are related to courseware design, institutional assurance factors, Website quality (brand experience) and public opinion (indirect brand experience). A conceptual model summarizing the hypotheses is subsequently validated in Singapore, Malaysia and Brunei reported here. In addition, this study revealed that governmental recognition of online degrees is important for the propagation of online tertiary education in these three countries. REFERENCES Alba, J. W. & Hutchinson, W. J. (1987). Dimensions of consumer expertise. Journal of Consumer Research 13, 411-53. Alexander, J. (1999). Collaborative design, constructivist learning, information technology immersion, and electronic communities: A case study. Interpersonal Computing and Technology 7 (1 & 2). Available: http://www.emoderators.com/ipct-j/1999/n1-2/alexander.html [Accessed: 24 May 2008]. Alhabshi, S. O. (2002). E-Learning: A Malaysian case study, Paper presented at the Africa-Asia Workshop on Promoting Co-operation in Information and Communication Technologies Development, National Institute of Public Administration, Kuala Lumpur, 26th March.Allen, I. E. & Seaman, J. (2006). Growing by degrees: Online education in the United States, 2005. Olin Way, Ma: Sloan-C. Berge, Z & Huang, Y. (2004). A model for sustainable student retention: A holistic perspective on the student dropout problem with special attention to e-learning. DEOSNEWS 13 (5). Available: http://www.ed.psu.edu/acsde/deos/deosnews/deosnews 13.5.pdf [Accessed: 10 June 2008].

255

AFBE Journal

Academic Papers

Berry, L. L. (2000). Cultivating service brand equity. Journal of the Academy of Marketing Science 28 (1), 128-137. Berthon, P., Hulbert, J. M., & Pitt, L. F. (1997). Brands, brand managers and the management of brands: Where to next? MSI Report No. 97-122, Marketing Science Institute, Cambridge, MA. Burns, N. & Kinder, D. (2000). Social Trust and Democratic Politics. Report to the National Election Studies Board, NES Special Topic Pilot Study. Calder, B. J. & Reagan, S. J. (2001). Brand design. In: Iacobucci, D. (Ed.), Kellogg on Marketing. NY: John Wiley, 58-73. Cashion, J. & Palmieri, P. (2002). The secret is the teacher: The learner's view of online learning, NCVER, Adelaide. Chaudhuri, A. & Holbrook, M. B. (2001). The chain of effects from brand trust and brand affect to brand performance: the role of brand loyalty. Journal of Marketing 65, 81-93. Cheskin Research and Studio Archetype (1999). The eCommerce trust study (January), 1-33. Cheung, W. S. & Hew, K. F. (2005). Use of asynchronous online discussion in a hypermedia design class: Pre-service teachers perceptions. Paper presented at the 22nd Annual Conference of the Australasian Society for Computers in Learning in Tertiary Education, Brisbane, 4-7 December, 2005. Chung, K. C. & Ellis, A. (2003). Online education: Understanding market acceptance in the higher education sector of Singapore, Paper presented at the 20th Annual Conference of the Australasian Society for Computers in Learning in Tertiary Education, Adelaide, 7-10 December 2003. Coakes, S. & Steed, L. (2001). SPSS: analysis without anguish, ver. 10.0 for windows, Sydney: John Wiley & Sons Australia Ltd. Dawar, N. & Pillutla. M. N. (2000). Impact of product-harm crises on brand equity: The moderating role of consumer expectations. Journal of Marketing Research 27, 215226. Delgado-Ballester, E. (2004). Applicability of a brand trust scale across product categories: A multigroup invariance analysis. European Journal of Marketing 5 (6), 573-592. Delgado-Ballester, E. & Munuera-Aleman, J. L. (2001). Brand trust in the context of consumer loyalty. European Journal of Marketing 35 (11/12), 1238-1258. Delgado-Ballester, E. & Munuera-Aleman, J. L. (2005). Does brand trust matter to brand equity? Journal of Product and Brand Management 14 (3), 187196.

256

AFBE Journal

Academic Papers

Doney, P. M. & Cannon, J. P. (1997). An examination of the nature of trust in buyerseller relationships. Journal of Marketing 61 (4), 35-51. Dringus, L. P. (1999). Resource requirements for online learning environments. Journal of Instruction and Delivery System 13 (4), 20-25. Dringus, L. P. & Terrell, S. (1998). Awareness as a metaphor in online learning environment. Paper presented at the International Conference on Technology and Education (ICTE), Santa Fe, NM, 8-11 March 1998. Duan, P. (1997). The influence of various factors on international students in selecting universities: A South Australian study of Chinese students from Hong Kong and Malaysia, PhD Thesis, University of South Australia. Dunning, K. A. & Vijayaraman, B. S. (2001). Motivational factors, characteristics and computer skills of MBA students in Web-based courses, Ohio: University of Akron Press. Finder, K. & Raleigh, D. (1998). Establishing a framework useful for developing Web-based assignments in K-12 Education. Paper presented at the Society for Information Technology & Education conference, Washington DC, 10-14 March 1998. Fournier, S. (1998). Consumers and their brands: Developing relationship theory in consumer research. Journal of Consumer Research 24, 343-73. Fullerton, G. (2003). When does commitment lead to loyalty? Journal of Service Research 5 (4), 333-344. Garbarino, E. & Mark S. J. (1999). The different roles of satisfaction, trust and commitment in customer relationships. Journal of Marketing 63 (2), 70-87. Gatfield, R. L. & Hyde, M. (2005). An examination of two case studies used in building a decision-making model. International Education Journal 6(5), 555566. Gefen, D., Karahanna, E. & Straub, D. W. (2003). Trust and TAM in online shopping: An integrated model. MIS Quarterly 27(1), 1-90. Gbbels-Dreyling, B. (2003). University financing alternatives: The German examples. Higher Education in Europe 28 (2), 165-170. Gommans, M., Krishan, K. S. & Scheddold, K. B. (2001). From brand loyalty to eloyalty: A conceptual framework. Journal of Economic and Social Research 3 (1), 43-58. Gurtman, M. B. (1992). Trust, distrust, and interpersonal problems: A circumplex analysis. Journal of Personality and Social Psychology 62, 989-1002.

257

AFBE Journal

Academic Papers

Gurviez, P. (1996). The trust concept in the brand-consumer relationship. In: Beracs, J., Bauer, A. and Simon, J. (Eds), European Marketing Academy Conference, Budapest, 559-574. Hair, J. F., Anderson, R. E., Tatham, R. L. & Black, W. C. (1998). Multivariate data analysis (5th Ed.), Englewood Cliffs, NJ: Prentice Hall. Hardin. R. (2002). Trust and Trustworthiness. New York: Russell Sage. Hemsley-Brown, J. (1999). College choice: Perceptions and priorities. Educational Management & Administration 27 (1), 85-98. Hoch, S. J. & Young-Won Ha (1986). Consumer Learning: Advertising and the Ambiguity of Product Experience. Journal of Consumer Research, 13, 22133. Hupcey, J. E., Penrod, J., Morse, J. M., & Mitcham, C. (2001). An exploration and advancement of the concept of trust. Journal of Advanced Nursing, 36(2), 282-293. Hutchison, C. (1995). The 'ICP OnLine': jeux sams frontieres on the cyber campus. Journal of Computer Mediated Communication 1 (1), 15-23. Kania, D. (2001). Branding.com, Chicago, IL: NIC. Kapferer, Jean-Noel (2004). The new strategic brand management: Creating and sustaining brand equity long term (3rd Ed), London: Kogan Page. Kearsley, G. (2000), Online education: Learning and teaching in cyberspace, Montreal, Canada: Wadsworth. Kenny, J. (2003). Student perceptions of the use of online learning technology in their courses. ultiBASE, Royal Melbourne Institute of Technology (RMIT). Available: http://ultibase.rmit.edu.au/Articles/march03/kenny2.htm [Accessed: 31 Oct 2008]. Kilpatrick, S. & Bound, H. (2003). Online delivery and learning in regional Australia, NCVER, Adelaide, 185-203. Land, S. M. & Hannafin, M. J. (1996). A conceptual framework for the development of theories-in-action with open-ended learning environments, MA, The MIT Press. Landa, R. (2006). Designing brand experience, NY: Thomson Delmar Learning. Leong, Y. P. (2006). Some policy issues in ICT in education. In: Zaitun, H. T., Brown, D., Suffolk, J., & Chukwu, O. (Eds.). Current Studies in Science, Mathematics and Technical Education 11, 133-140. Levesque, D. R & Kelly, G. (2002). Meeting the challenge of continuing education with e-learning. Radiology Management 24 (2), 40-43. Lewis, J. D. & Weigert, A. (1985). Trust as a social reality. Social Forces 63 (4), 96785.

258

AFBE Journal

Academic Papers

Lieblein, E. (2000). Critical factors for successful delivery of online programs. Internet and Higher Education 3, 161-174. Mason, R & Weller, M. (2000). Factors affecting students satisfaction on a Web course. Australian Journal of Educational Technology 16 (2), 173-200. Mayer, R. C., Davis, J. H. and Schoorman, F. D. (1995). An integrative model of organizational trust. Academy of Management Review 20 (3), 709-734. McAllister, D. J. (1995). Affect and cognition-based trust as foundations for interpersonal cooperation in organizations. Academy of Management Journal 38 (1), 24-59. McKnight, D., Choudhury, V. & Kacmar, C. (2002). Developing and validating trust measures for e-Commerce: An integrative typology. Information Systems Research 13 (3), 334-359. Mitchell, P., Reast, J. & Lynch, J. (1998). Exploring the foundation of trust. Journal of Marketing Management 14, 159-172. Moore, R. M. (2004). The rising tide: branding and the academic marketplace. Available: http://www.findarticles.com/p/articles/mi_m1254/is_3_36/ai_n6153021# [Accessed: 31 Oct 2008]. Morgan, R. M. & Hunt, S. D. (1994). The commitment-trust theory of relationship marketing, Journal of Marketing 58 (July), 20-38. Murry Jr., J. P., Lastovicka, J. L., & Bhalla, G. (1989). Demographic and lifestyle selection error in mall intercept data. Journal of Advertising Research 29, 46-52. Naidu, S. (1994). Applying learning and institutional strategies in open learning. Distance Education 15 (1), 23-41. Narayandas V. D. & Rangan, K. (2004). Building and sustaining buyer-seller relationships in mature industrial markets. Journal of Marketing 68 (July), 63-77. Orbell, J. Dawes, R. & Schwartz-Shea, P. (1994). Trust, social categories, and individuals: The case of gender. Journal of Motivation and Emotion 18 (2), 109128. Pallant, J. (2001). SPSS survival guide: A step by step guide to data analysis using SPSS for windows (version 10), NSW: Allen & Unwin. Peltier, J. W., Dargo, W. & Schibrowsky, J. (2003). Virtual communities and the assessment of online marketing education. Journal of Marketing Education 25 (3), 260-276. Phillips, V. (2007). Consumer Alert: Top 10 signs online diploma mills and degree mills. Available: http://www.geteducated.com/articles/degreemills.asp [Accessed: 30 December 2008].

259

AFBE Journal

Academic Papers

Ragan, T. J. & White, P. R. (2001). What we have here is a failure to communicate: The criticality of writing in online instruction. Computers and Composition 18, 399-409. Rempel, J. Holmes, J. & Zanna, M. (1985). Trust in close relationship. Journal of Personality and Social Psychology 49 (1), 95-112. Rocco, E., Finholt, T., Hofer, E., & Herbsleb, J. (2001). Out of sight, short of trust. Paper presented at the Annual Conference of the European Academy of Management, Barcelona, 19-22 April 2001. Ross, B. (2004). Driving higher education institutions to an enterprise approach. Available: http://www.learningcircuits.org/2004/sep2004/ross.htm [Accessed: 30 December 2008]. Rotter, J. B. (1967). A new scale for the measurement of interpersonal trust. Journal of Personality 35 (Dec.), 651-665. Ruberg, L. F., Moore, D. M. & Taylor, C. D. (1996). Student participation, interaction and regulation in a computer-mediated communication environment: A quality study. Journal of Educational Computing Research 14 (3), 243-268. Shapiro, S. P. (1987). The social control of interpersonal trust. American Journal of Sociology 93, 623-658. Sharma, N. (2007). Linking site quality, online shopping resistance and trust in Webbased marketing. Available: http://ausweb.scu.edu.au/aw04/papers/refereed/sharma/paper.html. [Accessed: 24 May 2008]. Siau, K. & Shen Z. (2003). Customer trust in m-commerce in communications of the ACM. Building 46 (4), 91-94. Souleles, N. (2004). A prescriptive study of early trends in implementing e-learning in the UK higher education sector. Available: http://it.coe.uga.edu/itforum/paper78/paper78.htm [Accessed: 30 Oct 2008]. Spector, P. E. (1992). Summated rating scale construction, Newbury Park, CA: Sage. Stensaker, B. (2005). Strategy, identity and branding: Re-inventing higher education institutions, City Higher Education Seminar Series, London: City University Press. Suhaimi, A. A. K. & Lim, B. D. (2007), Uniting e-libraries and e-learning: Challenges and opportunities for Villis Brunei [online], Available: http://www.lib.usm.my/ elmuequip/conference/Documents/ICOL%202005%20Paper%205%20Awang%20S uhaimi%20&%20Lim%20Bann%20Dih.pdf [Accessed: 10 Sept 2009]. Tabachnick, B. G. & Fidell, L. S. (1996). Using multivariate statistics (3rd Ed), NY: HarperCollins.

260

AFBE Journal

Academic Papers

Tan, E. & Lambe, P. (2002). E-learning effectiveness from the learners point of view in Singapore, Straits Knowledge, Singapore. US Commerce Department (2006). E-learning market in Korea. Available: http://www.buyusainfo.net/docs/x_4820708.pdf#search='elearning%20market% 20korea' [Accessed: 30 July 2008]. Uslaner, E. M. (2002). The Moral Foundations of Trust, Cambridge, UK: Cambridge University Press. Williamson, O. E. (1993). Calculativeness, trust and economic organization. Journal of Law and Economics 26 (April), 453-86. Willig, C. (1997). The limitations of trust in intimate relationships: Constructions of trust and sexual risk-taking. British Journal of Social Psychology 36, 211-221. Wulf, K. (1996). Training via the Internet: What are we? Training and Development 50 (5), 50-55. Yosano, A. & Hayashi, N. (2005). Social stratification, intermediary groups, and creation of trustfulness. Sociological Theory and Methods 20, 2744.

Zaheer, A., McEvily, B., Perrone, V. (1998). Does trust matter? Exploring the effects of interorganizational and interpersonal trust on performance. Organization Science 9 (2), 141-59. Zand, D. E. (1972). Trust and managerial problem solving. Administrative Science Quarterly 17, 229-239. Zikmund, W. G. (2000). Business research methods (6th Ed), Fort Worth: The Dryden Press, Harcourt College Publishers.Zucker, Lynne G. (1986). Production of trust: Institutional sources of economic structure, Research in Organizational Behavior 8, 53-111.

261

AFBE Journal

Academic Papers

A COMPARATIVE ANALYSIS OF U.S. AND CHINESE BUSINESS STUDENT ETHICAL PERCEPTIONS

Charles E. Pettijohn Professor of Marketing Department of Marketing H. Wayne Huizenga School of Business & Entrepreneurship The Carl DeSantis Building 3301 College Avenue Davie, FL 33314 954-262-5030 charlie.pettijohn@huizenga.nova.edu

Linda S. Pettijohn Professor of Marketing Department of Marketing H. Wayne Huizenga School of Business & Entrepreneurship The Carl DeSantis Building 3301 College Avenue Davie, FL 33314 954-262-5030 lp835@huizenga.nova.edu

ABSTRACT As global business becomes a reality for an increasing number of firms, the business-world continues to shrink. Businesses face many challenges operating internationally, but one of the major areas of difficulty is often described as being attributable to culture, as the firm engaging in international business discovers the cultural norms applicable in the home country no longer are applicable in the host country. Ethical challenges arising as a result of these cultural differences may prove to be very significant. Ethical expectations may provide the basis for much of the exchange that occurs in the U.S. However, when operating internationally, business executives are likely to discover that their international counterparts are operating with different rules and standards. For U.S. businesspeople, engaging in business interactions with Chinese business executives is becoming more frequent. Knowing the ethical perceptions and standards of these individuals might help preclude errors that could have significant longterm economic ramifications for both U.S. and Chinese business executives. Based on this perception, research was conducted to compare the ethical perceptions of U.S. business students with those of Chinese business students. The comparisons focused on the students perceptions as they relate to whether the practice of ethics is a profitable business practice and whether

262

AFBE Journal

Academic Papers

they as consumers feel alienated from the marketplace. The results indicate that comparative differences exist between Chinese and U.S. business students on each of these dimensions. These findings suggest that U.S. business executives working with their Chinese counterparts should be aware of ethical differences which might impact working relationships in business operations.

INTRODUCTION Businesses in many cultures have rather contentious relationships with their numerous stakeholders. In some cases, one could contend that these relationships are negative, resulting in increased challenges for enterprise existence, operation and ultimately profitability. As a result of scandals such as Madoffs, Siemens, Chinese toys, Toyota, Wall-Street and more, businesses are operating in a climate in which their actions are suspect (Wartzman 2010). When business activities are regarded with skepticism, many firms discover their costs of doing business often increase (Lantos 1999; Mantel 2005; Trease, et al. 1994). Costs which increase might include expenditures directed toward improving businesses images (past ethical lapses), coping with increased regulation, engaging in additional lobbying activities to preempt additional regulations, legal activities and more. Thus, some contend that the practice of good ethics is good business (Herndon, Fraedrich and Yeh 2001). Yet, the publics perceptions of businesspeople are generally quite negative. For example, research has found that the images of business executives are among the lowest-rated of professionals (Lantos 1999; Luther, DiBattista and Gautchi 1997; Wulfson 1998). In fact, it has been reported that only 17% of Americans trust business leaders (Sales and Marketing Management 2005). These images help create lasting challenges for businesses and their leaders. However, one may wonder how ethical attitudes are affected when businesses operate in different cultures. Ethical challenges that may arise as businesses operate internationally can occur on numerous levels, including employment issues such as hiring and relocation (Stevenson and Bodkin 1998). According to the research, culture has been identified as one of the critical determinants of ethical behavior across nations (Phau and Kea 2007). As Beekun, et al. (2008) point out, the process of analyzing ethics of different cultures can aid in the identification of alternative behavioral standards. Others have pointed out that as businesses increasingly operate internationally, challenges exist in determining how to respond to ethical issues because no one national standard exists (Burnaz, et al. 2010) and because the potential for problems increases when interacting internationally (Sims and Gegez 2004). Stevenson and Bodkin (1998) state As the globalization of markets continues, marketing professionals need to be more concerned with ethics in a crossnational context (p. 52). Thus, it appears that understanding ethical standards in different cultures is a critical task for businesses expanding into international activities (Jamali, Sidani and El-Asmar 2008; Phau and Kea 2007; Robertson, et al. 2008; Stevenson and Bodkin 1998). As Beekun, et al. (2008, p. 602) state, The predominance of national culture as a primary guiding influence independent of which ethical criterion is used when making decisions cannot be overstated.

263

AFBE Journal

Academic Papers

One might assume that attitudes regarding the importance of ethics might affect ones behaviors. For example, if an individual perceived that ethical behaviors were profitable for businesses, then it might be suggested that ethical behaviors pay dividends. Such attitudes may relate to future ethical behaviors. Consumer attitudes may be affected by perceptions of business ethics. Thus, situations in which consumers feel estranged from business might relate to perceptions of business ethicality. Based on these assumptions, this research is designed to assess the degree to which business students perceive ethics to be important to an enterprises long-term success and the degree to which these students may feel estranged from the marketplace. The specific dimensions evaluated include their perceptions of whether good ethics is good business and whether they feel alienated as consumers. Since international issues are so prevalent, the focus of this research effort will entail a comparison of U.S. student ethical perceptions with Chinese student ethical perceptions. This research will provide insights into issues that may exist when U.S. and Chinese businesses and negotiators interact. Additionally, the research could show areas where differences exist between the two nations in terms of their attitudes toward ethical issues and these differences can then be addressed through training and organizational communications. Finally, the study will address an issue which was identified by Lee, et al. (2009) who contend that a relatively small volume of research pertaining to ethics has been conducted internationally. RELATED RESEARCH From a managerial perspective, ethical factors are often of considerable importance. Ethical behaviors and perceptions are important from societal perspectives and have both business and economic implications. Thus, ethical behaviors and perceptions of businesses are critical to management and management should have an important role in making certain ethical behaviors continually improve (Chonko, Wotruba and Loe 2002; Hunt and Chonko 1987). Ethical issues have been evaluated in numerous studies which focused on the Chinese market. For example, one study examined consumers support of socially responsible business and their evaluation of corporate socially responsible behaviors (Ramasamy and Yeung 2009). Their research revealed that Chinese customers were able to differentiate between Chinas business activities and their ethical activities. Further, the research indicated that Chinese customers felt that businesses were more friendly, trustworthy, caring, generous and powerful and less deceitful, arrogant and greedy than their European counterparts (Ramasamy and Yeung 2009, p. 127). Other comparative analyses of ethics have concluded that students surveyed in Singapore and Hong Kong were more ethical than were students in Australia (Phau and Kea 2007). The research contended that these differences might be attributable to the shared values of Singapore and Hong Kong students, based on their cultural and religious backgrounds. However, other research indicates that the East/West differences were opposite. In a study comparing the ethical levels of graduate students from the U.S., Australia and Turkey, the findings indicated that Turkish respondents were the least ethical (Sims and Gegez 2004). The authors concluded that the rationale

264

AFBE Journal

Academic Papers

for the differences could be attributed to the alternative cultures operating in these countries. In other research, Burnaz, et al. (2010) found that the U.S. sample had a greater level of awareness of ethical issues and gave more importance to ethics than did the respondents from Thailand or Turkey. Research comparing Chinese ethics with those found in Peru found that Chinese respondents provided less ethical responses than did the Peruvian respondents. On the dimensions of relativism, idealism and willingness to sacrifice ethical standards for financial gain, Chinese respondents tended to indicate lower levels of ethics (Robertson, et al. 2008). Other research has indicated that Chinese ethical standards as they pertained to personal selling activities were inferior to those provided by Western respondents (Lee, et al. 2009). This research suggests that the findings are more attributable to the focus on profit and competition in the Chinese market, which created a shift from traditional Chinese principles. This research is consistent with earlier findings which suggest that certain unethical actions in China may be justified based upon the Chinese focus on enterprise profitability (Whitcomb, Erdener and Li 1998). It has been argued that individuals may perceive outcomes in unique fashions based on their cultures and experiences (Pettijohn, et al. 2008; Volkema and Fleury 2002). These perceptions and experiences may be multifaceted. Thus, ones ethical predispositions might be based on that individuals attitudes as a consumer, employee and citizen. In one case, it can be suggested that people have beliefs regarding businesses roles in society. For example, some may believe business exists for the sole purpose of earning a profit and other activities are unnecessary (e.g. Friedmans shareholder wealth proposition). Individuals with such attitudes might perceive that businesses would make misleading product claims, sell harmful products, engage in misleading financial practices, etc. On the opposite end of the theoretical continuum would be those that believe that the practice of good ethics is a worthwhile economic endeavor, as good ethics is good business. To these individuals, businesses might focus on maintaining a strong society and satisfying customers, and by engaging in these activities businesses would earn greater profits over the long-term. Correspondingly, people might believe that their managers operate in ways designed primarily to enhance their personal and business well-being. Such an attitude might be reflected by an individuals attitude which contends that his/her manager will do whatever it takes to make a profit, earn a promotion, etc. On the other hand, some might perceive that managers are focused on maintaining a positive ethical environment for their firms. These individuals might believe that their managers will enforce ethical behaviors and work toward improving ethical standards in the firm. Finally, some consumers might feel alienated from the marketplace in which they live. These consumers might believe that they are merely pawns in society and as such they are manipulated and abused by businesses that they patronize. The opposite perspective might be one of engagement in which the consumer sees him/herself as determining their own destiny and as working with businesses to identify products and services that best meet their needs. While it is rather obvious that China has become an economic powerhouse, numerous factors lead to interest in the ethical climate in China. First, assessments of ethical issues, as they pertain to the Chinese culture, have

265

AFBE Journal

Academic Papers

been of considerable interest in the management literature (Robertson, et al. 2008). Perhaps this interest is partially based on the differences between the Chinese culture and Western cultural philosophically, or perhaps due to Chinas rapid growth or the fact that studies have noted differences in values between Eastern Asian and Western cultures (Whitcomb, Erdener and Li 1998). In addition to these factors, Chinese behaviors have also warranted additional focus on ethical standards in China. For example, Pei (2006, p. 32) states the following: Western investors hail Chinas strong economic fundamentals notably a high savings rate, huge labor pool, and powerful work ethic and willingly gloss over its imperfections. Pei contends that the result is crony capitalism, rampant corruption, and widening inequality. The review of the literature indicates that cultural differences in ethics exist. The research also seems to lead to the conclusion that these differences may have meaningful repercussions to businesses attempting to adapt to local circumstances and attempting to engage in business relationships with executives from other cultures. The research also indicates that in many cases, the ethical sensitivity levels found in the U.S. exceed the sensitivity levels found in other countries. Based on these findings, the following hypotheses were tested. H1: Perceptions of the importance of business ethics will be greater in the U.S. than in China. H2: Perceptions of the degree to which consumers are alienated from the marketplace will be greater in China than in the U.S. MEASURES It was determined that students enrolled in the basic marketing course located in the U.S. and China would represent the sample. Many previous studies have used students as their sampling base. For example, one study compared student ethics using business students enrolled in an Australian University operating on three campuses (Australia; Singapore; and Hong Kong) (Phau and Kea 2007). Other similar studies include the comparison of students from the U.S., Malaysia and the Ukraine (Axinn, et al. 2004); Australia and the U.S. (Stevenson and Bodkin 1998); Finland and the U.S. (Grunbaum 1997); Thailand, Turky and the U.S. (Burnaz, et al. 2010); Egypt and the U.S. (Beekun, et al. 2008); China and Peru (Robertson, et al. 2008); and China and the U.S. (Sims and Gegez 2004; Whitcomb, Erdener and Li 1998). Students have been used in studies of ethics for numerous reasons. First, they are often identified as tomorrows business leaders (Grunbaum 1997; Persons 2009; Phau and Kea 2007; Smyth, Davis and Kroncke 2009). Another reason students are the focus of this type of study is because they are currently enrolled in courses during a period in which interest in business ethics is high (Phau and Kea 2007). Finally, it seems that an understanding of students ethical predispositions is important because identification of these attitudes may provide direction to companies in the development of their training programs (Stevenson and Bodkin 1998). The survey was administered to students enrolled in marketing courses at a university located in the Midwest which is accredited at all levels by the AACSB, and has approximately 23,000 students and 4,500 business majors.

266

AFBE Journal

Academic Papers

The university operates a home campus in the U.S. and has a branch campus located in a city in China with a population of over 6 million. Each student was pursuing a degree in business from the home university located in the U.S. and each was enrolled in the same course (Introductory Marketing). The survey itself was administered to 120 U.S. students and 175 Chinese students during class time. While completion of the survey was voluntary, class time was allocated for the completion of the survey. Measurement of student attitudes pertaining to general business ethics was facilitated by the use of a scale developed by Singhapakdi, et al. (1995). This scale was derived from a scale developed by Kraft and Jauch (1992), and was named the Good Ethics is Good Business scale. High scores on the scale indicate that the respondent believes that positive ethical behavior has a positive effect on the business profitability. The original scale consisted of seven items which are measured using a nine-point Likert-type scale. Singhapakdi, et als. (1995) research reported an alpha coefficient of .72 for the scale. Other research reports an alpha coefficient of .91 (Pettijohn, Pettijohn and Taylor 2008). This scale (or portions of it) has been used in other research designed to assess ethics (cf. Burnaz, et al. 2010). The scale is quite similar to the scale used in other research (Ramasamy and Yeung 2009) which measured the degree to which consumers supported corporate social responsibility. The students attitudes as consumers were measured using the Alienation: Consumer Alienation from the Marketplace scale developed by Allison (1978). The scale consists of 35 items designed to assess the degree to which consumers perceive that they are estranged from the market. Subjects responded to each of these items using a five point Likert-type scale. Subsequent research identified three subscales consisting of a business ethics (5 items), informed choice (5 items) and personal norm (5 items). The scales had coefficient alpha measures of .84 (full-scale) .83 (business ethics), .67 (informed choice) and .61 (personal norm) (Bearden, Lichtenstein and Teel 1983). Other research using the complete scale had an alpha coefficient of .85 (Pettijohn, Pettijohn and Taylor 2008). FINDINGS The demographic characteristics of the participants are provided in Table 1. As shown in the table, the majority of the respondents were between the ages of 18 and 24, and had over 60 hours of college credit. For the U.S. sample, the majority of respondents were male, for the Chinese respondents the sample consisted primarily of females (77%). TABLE 1 DEMOGRAPHIC CHARACTERISTICS OF RESPONDENTS USA Students Number Percent 62 54 98 19 267 53.5% 46.5% 83.8% 16.2% Chinese Students Number Percent 37 122 154 5 23.3% 76.7% 96.9% 3.1%

Demographic Characteristic Gender: Male Female Age: 18-24 25-50

AFBE Journal

Academic Papers

Credit Hours Earned: 60 or less 61-80 81-100 101-124 Over 124

6 38 26 35 9

5.3% 33.3% 22.8% 30.7% 7.9%

18 64 55 12 10

11.3% 40.3% 24.6% 7.6% 6.3%

The students perceptions pertaining to ethics were measured using the scales discussed in the methodology. To establish some degree of uniformity, student responses were obtained using a seven point Likert-type scale (1 = strongly disagree; 7 = strongly agree). Each of the scale items is provided in the Appendix. Scale means, standard deviations and Cronbach (1960) alpha coefficients are provided in Table 2. As indicated in the table, the Good Ethics is Good Business scale had a mean of 36.1 for the U.S. sample (.89 alpha coefficient) and a mean of 32.1 (.95 alpha coefficient) for the Chinese sample. The Consumer Alienation scale had mean values of 130.5 and 146.5 for the U.S. and Chinese students, with .81 and .90 alpha coefficient scores. The results pertaining to the subscales of the Consumer Alienation scale are also provided in the table. Overall, it appears that each of the scales have alpha coefficients which exceed the .70 level recommended by Nunnally (1978). However, it should be noted that the subscales generally have considerably lower alpha coefficient levels. TABLE 2 SCALE MEANS AND ALPHA COEFFICIENTS USA Students Chinese Students MEAN (sd) ALPHA MEAN (sd) ALPHA 36.1 (6.2) .89 32.1 (9.2) .95 130.5 (20.8) 45.5 (7.8) 15.8 (4.8) 21.2 (5.3) .81 .63 .43 .61 146.5 (25.9) 50.3 (7.7) 20.1 (5.7) 22.8 (5.9) .90 .60 .72 .76

SCALE: Good Ethics is Good Business Consumer Alienation (CA): C.A. Business Ethics C.A. Personal Norms C.A. Informed Choice

The findings indicate considerable support for the hypotheses. As shown in Table 3, the results of t-tests comparing the mean scores on the scales indicate significant differences between the responses provided by U.S. and Chinese students. The first hypothesis held that U.S. students would believe that the linkage between ethical practice and business results would be significantly higher than would Chinese students. As indicated in the table, based on the responses to the Good Ethics is Good Business scale, the findings indicate the U.S. students are significantly more likely to believe that the practice of ethical behaviors is likely to result in positive returns for businesses. As shown, the mean score for Chinese students on this scale is 32.1, compared with U.S. students who have a mean score of 36.1. Based on this finding, hypothesis one is supported.

268

AFBE Journal

Academic Papers

TABLE 3 TESTS OF HYPOTHESES China MEAN (sd) 32.1 (9.2) 146.5 (25.9) 50.3 (7.7) 20.1 (5.7) 22.8 (5.9) USA MEAN (sd) 36.1 (6.2) 130.5 (20.8) 45.5 (7.8) 15.8 (4.8) 21.2 (5.3)

SCALE: Good Ethics is Good Business Consumer Alienation C.A. Business Ethics C.A. Personal Norms C.A. Informed Choice

DIFFERENCE 4.0 16.0 4.8 4.2 1.5

t (p) 4.2 (.0001) 5.2 (.0001) 4.9 (.0001) 6.3 (.0001) 2.2 (.03)

The second hypothesis contended that Chinese students were more likely to feel alienated as consumers than were U.S. students. The findings indicate that this hypothesis was also supported with a mean score for Chinese students on the alienation scale of 146.5, compared to the 130.5 mean score obtained from U.S. students. Comparisons of mean scores on the three subscales of the alienation scale provided results which were also consistent with expectations. As shown in the table, Chinese students were significantly more likely to perceive that business ethics, personal norms and informed choice levels were significantly less than were those scores provided by the U.S. student sample. Discussion and Managerial Implications The findings of this study indicate that Chinese students perceptions of the ethical climate existing in China is significantly more negative than are the perceptions of U.S. students of the ethical climate existing in the U.S. What are the implications of this finding? As stated previously, firms operating internationally must cope with different cultural norms and correspondingly with differing ethical standards. The results of this research indicate that firms operating in China are likely to discover that ethical norms are different than in the U.S. For example, the perception that ethical behavior is rewarded positively in the business world is a concept that is less consistent with Chinese expectations than with U.S. expectations. In the U.S., business leaders may justify the desire to behave ethically from the position that ethical behavior is both the right thing to do and the profitable thing to do. However, this feeling does not seem to be as predominant in China as it is the U.S. This indicates that the perception that a U.S. businesspersons Chinese counterparts will behave ethically because it is believed to be profitable may not be as valid

269

AFBE Journal

Academic Papers

as it could be in the U.S. Such a difference may require an awareness that U.S. ethical standards may not apply in Chinese situations. The research also indicates that Chinese students feel more estranged from the market than do their U.S. counterparts. This finding indicates that Chinese students are more likely to feel that their goals are not being addressed by businesses functioning in China. Such feelings of alienation lead one to the conclusion that Chinese students believe that they must be defensive as they react to businesses stimuli. Thus, while U.S. consumers may feel that some degree of trust exists between themselves and business (e.g., a social contract), a similar feeling is not held by Chinese consumers. Thus, the expectation that U.S. businesses may have regarding accepting requirements, promises, and agreements may not be held to the same degree by Chinese businesses. Consequently, absent trust and positive expectations, firms may come to rely upon stringently worded contracts which specify required behaviors from both parties. The necessity of strict contracts and other legalistic behaviors may then lead to strained relationships, additional expenditures on legal experts and greater record-keeping and enforcement activities. CONCLUSIONS AND SUGGESTIONS FOR FUTURE RESEARCH Firms operating internationally must cope with numerous challenges. Different exchange rates, different tastes, different perceptions and perhaps most importantly different cultural norms are but a few of the challenges with which organizations must cope as they engage in international business. One of the greatest cultural challenges may be derived from differences existing with regard to ethical standards and norms of behaviors. Individuals and organizations interact based upon a perceived set of rules, standards and norms that govern behavior. However, when the rules, standards and norms are unknown, challenges arise. In many cases, these differences manifest themselves in legal actions, difficult negotiations, and many time-consuming activities that threaten long-term relationships. Thus, an understanding of the ethical standards which prevail in countries of interest is imperative to facilitate a healthy and productive exchange of products, services and other items of value. This research was designed to compare ethical standards existing between students majoring in business in China and the U.S. The findings suggest that ethical differences exist between the two countries. These differences should guide businesses as they interact in these countries, because an awareness of the perceptions and norms of ones counterpart in another country can help establish standards and expectations of behavior. Thus, the knowledge that business ethics are perceived differently in China than they are in the U.S. should lead business decision-makers to alter their behaviors as they interact in Chinese business settings. While the research does provide information regarding an important dimension of behavior, it does have its limitations and these limitations lead to suggestions for future research. Foremost among the limitations is the sample used in the research. While it was noted that numerous previous researchers have used students as a sampling base and while it was also noted that students are an appropriate sample for ethics research, their frame of reference may not be indicative of business ethics as they are currently practiced. Their

270

AFBE Journal

Academic Papers

perceptions may be affected by a variety of factors including their educational experiences (where ethical issues are discussed in virtually every business course), their work experiences and their life experiences. Thus, future research should address differences as they exist between practicing businesspeople in both China and the U.S. In conclusion, while the research does have its limitations, it does provide a basis for future research comparing ethics across cultures. Such ethics should provide insights into anticipated behaviors and norms that can lead to better decisions for each business counterpart. While no culture has a monopoly on ethical behavior and while no one behavior is valid for all nations, a recognition of different norms and ethical standards may assist businesses as they adapt to engaging in business in alternative nations and cultures.

271

AFBE Journal

Academic Papers

REFERENCES Allison, Neil K (1978), A Psychometric Development of a Test for Consumer Alienation From the Marketplace, Journal of Marketing Research, Vol. 15 (November), pp. 564-575. Axinn, Catherine N., M. Elizabeth Blair, Alla Heorhiadi and Sharon V. Thach (2004), Comparing Ethical Ideologies Across Cultures, , Journal of Business Ethics, Vol. 54, pp. 103-119. Bearden, William O., Donald R. Lichtenstein and Jesse E. Teel (1983), Reassessment of the Dimensionality, Internal Consistency, and Validity of the Consumer Alienation Scale, In Patrack E. Murphy et al (Eds.), 1985 American Marketing Association Summer Educators Conference Proceedings, Chicago: American Marketing Association, pp. 35-40. Beekun, Rafik I., Ramda Hamdy, James W. Westerman and Hassan R. HassabElnaby (2008), An Exploration of Ethical Decision-making Processes in the United States and Egypt, Journal of Business Ethics, Vol. 82, pp. 587605. Burnaz, Sebnem, M.G. Serap Atakan, Y. Ilker Topcu and Anusorn Singhapakdi (2010), Journal of Business Ethics, published on-line, January 29, 2010. Chonko, Lawrence B., Thomas R. Wotruba, and Terry W. Loe (2002), Direct Selling Ethics at the Top, Journal of Personal Selling and Sales Management, Vol. 22 (Spring), pp. 87-96. Cronbach, L.J. (1960), Essentials of Psychological Testing (2nd ed.). New York: Harper & Row. Grunbaum, Leni (1997), Attitudes of Future Managers Towards Businges Ethics: A Comparison of Finnish and American Business Students, Journal of Business Ethics, Vol. 16, pp. 451-463. Giacobbe, Ralph W. and Madhav N. Segal (2000), A Comparative Analysis of Ethical Perceptions in Marketing Research: U.S.A. vs. Canada, Journal of Business Ethics, Vol. 27, pp. 229-245. Herndon, Neil C., Jr., John P. Fraedrich and Quey-Jen Yeh (2001), An Investigation of Moral Values and the Ethical Content of the Corporate Culture: Taiwanese Versus U.S. Sales People, Journal of Business Ethics, Vol. 30, pp. 73-85. Jamalil, Dima, Yusuf Sidani and Khalil El-Asmar (2008), A Three Country Comparative Analysis of Managerial CSR Perspectives: Insights From Lebanon, Syria and Jordan, Journal of Business Ethics, Vol. 85, pp. 173-192.

272

AFBE Journal

Academic Papers

Kraft, Kenneth L. and Lawrence R. Jauch (1992), The Perceived Importance of Ethics and Social Responsibility on Organizational Effectiveness: A Survey of Marketers, Journal of the Academy of Marketing Sciences, Vol. 23 (Number 1), pp. 49-56. Hunt, Shelby D. and Lawrence B. Chonko (1987), Ethical Problems of Advertising Agency Executives, Journal of Advertising, Vol. 16 (Number 4), pp. 16-24. Hunt, Shelby D., Van R. Wood, and Lawrence B. Chonko (1989), Corporate Ethical Values and Organizational Commitment in Marketing, Journal of Marketing, Vol. 53 (July), pp. 79-90. Lantos, Geoffrey P. (1999), Motivating Moral Corporate Behavior, Journal of Consumer Marketing, Vol. 16 (Number 3), pp. 222-232. Lee, Nick, Amanda Beatson, Tony C. Garrett, Ian Lings and Xi Zhang (2009), A Study of the Attitudes Towards Unethical Selling Amongst Chinese Salespeople, Journal of Business Ethics, Vol. 88, pp. 497-515. Luther, Harsh K., Ron A. DiBattista, and Theodore Gautchi (1997), Perception of What the Ethical Climate is and What it Should be: The Role of Gender, Academic Status, and Ethical Education, Journal of Business Ethics, Vol. 16 (February), pp. 203-217. Mantel, Susan Powell (2005), Choice or Perceptions: How Affect Influences Ethical Choices Among Salespeople, Journal of Personal Selling and Sales Management, Vol. 25 (Winter), pp. 43-55. Nunnally, Jum C. (1978), Psychometric Theory, 2nd ed., New York: McGraw Hill. Pei, Minxin (2006), The Dark Side of Chinas Rise, Foreign Policy, (March/April), pp. 32-40. Persons, Obeua (2009), Using a Corporate Code of Ethics to Assess Students Ethicality: Implications for Business Education, Journal of Education for Business, (July/August), pp. 839-852. Pettijohn, Charles E., Linda S. Pettijohn and A.J. Taylor (2008), Salesperson Perceptions of Ethical Behaviors: Their Influence on Job Satisfaction and Turnover Intentions, Journal of Business Ethics, Vol. 78, pp. 547-557. Pettijohn, Charles E., Linda S. Pettijohn, James B. Pettijohn, and A.J. Taylor (2007), "How Do the Attitudes of Students Compare with the Attitudes of Salespeople? A Comparison of Perceptions of Business, Consumer, and Employer Ethics," Marketing Management Journal, Vol. 17 (Spring), pp. 5164.

273

AFBE Journal

Academic Papers

Phau, Ian and Garick Kea (2007), Attitudes of University Students toward Business Ethics: A Cross-National Investigation of Australia, Singapore and Hong Kong, Journal of Business Ethics, Vol. 72, pp. 61-75. Ramasamy, Bala and Mathew Yeung (2009), Chinese Consumers Perception of Corporate Social Responsibility, Journal of Business Ethics, Vol. 88, pp. 119-132. Robertson, Christopher J., Bradley J. Olson, K. Matthew Gilley and Yongjian Bao (2008), Journal of Business Ethics, Vol. 81, pp. 413-425. Sales and Marketing Management (2005) S&MM Pulse, (June), p. 12. Sims, Randi L. and A. Ercan Gegez (2004), Attitudes Towards Business Ethics: A Five Nation Comparative Study, Journal of Business Ethics, Vol. 50, pp. 253-265. Singhapakdi, Anunsorn, Kenneth L. Kraft, Scott J. Vitell, and Kumar C . Rallapalli (1995), The Organizational Effectiveness Menu: A Device for Stakeholder Assessment, Mid-American Journal of Business, Vol. 7 (Spring), pp. 18-23. Smyth, Lynnette S., James R. Davis and Charles O. Kroncke (2009), Students Perceptions of Business Ethics: Using Cheating as a Surrogate for Business Situations, Journal of Education for Business, Vol. 84 (March/April), pp. 229-238. Stevenson, Thomas H. and Charles D. Bodkin (1998), A Cross-National Comparison of University Students Perceptions Regarding the Ethics and Acceptability of Sales Practices, Journal of Business Ethics, Vol. 17, pp. 4555. Trease, Debbie, Michael F. Weigold, Jenneane Conna, and Heather Garrison (1994), Ethics in Advertising: Ideological Correlates of Consumer Perceptions, Journal of Advertising, Vol. 23 (September), pp. 59-72. Volkema, Roger J. and Maria Tereza Leme Fleury (2002), Alternative Negotiating Conditions and the Choice of Negotiation Tactics: A Crosscultural Comparison, Journal of Business Ethics, Vol. 36, pp. 381-398. Wartzman, Rick (2010), A Time for Ethical Self-Assessment, Business Week, February 24, pp. 9-11. Whitcomb, Laura L., Carolyn B. Erdener and Cheng Li (1998), Business Ethical Values in China and the U.S., Journal of Business Ethics, Vol. 17, pp. 839-852. Wulfson, Myrna (1998), Rules of the Game: Do Corporate Codes of Ethics Work? Review of Business, (Fall), pp. 12-16.

274

AFBE Journal

Academic Papers

MIXED METHODS RESEARCH: A COMPARATIVE STUDY OF MMR CONDUCTED IN THE USA AND THAILAND

Dr. Jamnean Joungtrakul Doctor of Business Administration Programme Rattana Bundit University (RBAC), Thailand drjj@hotmail.co.th Supharuk Aticomsuwan International Graduate Studies Human Resource Development Centre Burapha University, Thailand Laddawan Someran International Graduate Studies Human Resource Development Centre Burapha University, Thailand

ABSTRACT The objective of this study is to explore the current practices of mixed methods research (MMR). The concept of MMR which includes its definitions, design and critical features were reviewed. Eleven critical features of MMR were identified and used as a basis for review and evaluation of MMR studies conducted in the USA and Thailand. Ten MMR studies conducted from 2002-2010 in the USA and Thailand were selected for review and evaluation. The results of this review were then compared to find the similarities and differences between the two sets of MMR studies. As a result of the comparisons, six critical areas of similarities and four critical areas of differences were identified. The similarities of the MMR studies were: (1) the term mixed methods research was identified in the research topic; (2) identification of specific research objectives; (3) questionnaires were the major tool for collecting quantitative data; (4) interviews were the major instrument for qualitative data collection; (5) used descriptive statistics for quantitative data analysis; and (6) used sequential design, particularly the sequential explanatory strategy. The differences were: (1) only two MMR studies conducted in the USA specified pragmatism as a research paradigm while none of the MMR conducted in Thailand identified a research paradigm; (2) the MMR studies conducted in the USA had a clearer process of analyzing qualitative data than the MMR studies conducted in Thailand; (3) all MMR studies in the USA explained why collecting both types of data are needed while only one of the MMR studies conducted in Thailand mentioned the reason for collecting both types of data; and (4) only two MMR studies conducted in Thailand clarified how the two types of data were mixed. The findings reflect the improvements needed in the two major phases for the conduct of research: (1) research design and (2) data analysis. To improve the quality of MMR studies it is recommended that: (1) research design should include research paradigm identification and justification; and the reasons should also be clearly explained and justified as to why both types of data collection are needed; (2) the process of qualitative data analysis and the combination of two types of data should be clearly explained in the MMR study; (3) more studies using other types of MMR strategies should be conducted, other than 275

AFBE Journal

Academic Papers

sequential design, to enhance the development of MMR; and (4) more qualitative research should be emphasized in graduate and research training courses than currently provided, particularly in Thailand.

Keywords: Mixed Methods Research, Concurrent Triangulation, Concurrent Embedded, Concurrent Transformative, Sequential Explanatory, Sequential Exploratory, Sequential Transformative.

INTRODUCTION In recent years, the term mixed methods research defined by many researchers or methodologists, has been an ongoing debate and discussion as it has been defined in several ways such as ethnographic residual analysis (Fry, 1981), multi-method research (e.g., Hunter & Brewer, 2003; Morse, 2003), triangulated studies (Sandelowski, 2003), mixed methods approach (Creswell, 2003), integrative research (Johnson & Onwuegbuzie, 2004), and mixed research (Johnson & Christensen, 2004). Some scholars say that combining a qualitative and quantitative approach is not new, but only recently it has been called mixed methods (Johnson, Onwuegbuzie, & Turner, 2007; Tashakkori & Teddlie, 2003). Tashakkori & Creswell (2007) stated that a mixed-method is still developing and will do so for years to come. At present there are several unresolved issues such as the core issue of defining the nature of MMR, how to conduct a mixed methods and whether paradigm can be mixed or integrated in a mixed method study or not. In addition, the utilization quality of mixed methods is emerging in the community of mixed methods scholars because this method has the potential for a broader understanding of social issues, as it provides more robust opportunities for devising policies, and practices to implement positive change (Tashakkori & Teddlie, 2010). Therefore, it is usually employed for answering complex social research questions seemed a non-issue in many cases (Tashakkori & Teddlie, 2010). This paper aims to understand the current practices of MMR conducted in the USA and Thailand. It begins with a review of the concept of MMR and design followed by the identification of the critical features of MMR. Using the critical features identified as the criterion the authors selected ten research studies conducted in the USA and Thailand using MMR for a review and evaluated by the identified criterion. Similarities and differences are identified, discussed, and conclusions and recommendations were made.

THE CONCEPTS OF MMR Mixed methods approach is usually employed in the social and human sciences, as that mixed approach closely parallels everyday human problem solving in a way that neither qualitative nor quantitative methods alone can do (Tashakkori & Teddlie,

276

AFBE Journal

Academic Papers

2010). However, several definitions have been presented by different scholars of MMR. To come up with an acceptable definition Johnson, et al., (2007) conducted a study by asking methodologists from the MMR field employing Tashakkoris Bridges Website. They presented 19 alternative meanings from leaders in the field, which varied considerably in terms of specificity and content. Based on the study Johnson, et al., (2007, p. 123) concluded the definition of MMR as the type of research in which a researcher or team of researchers combines elements of qualitative and quantitative research approaches (e.g., use of qualitative and quantitative viewpoints, data collection, analysis, inference techniques) for the broad purposes of breadth and depth of understanding and corroboration. In addition, Hesse-Biber (2010) stated that a mixed methods strategy is a rich field for the combination of data, since this design can provide stronger evidence for a conclusion through convergence and corroboration of findings (Johnson & Onwuegbuzie, 2004, p. 21). Teddlie & Tashakkori (2009) confirmed a major advantage of mixed methods as it enables the researcher to simultaneously ask confirmatory and exploratory questions and therefore verify and generate theory in the same study (p.33). This is similar to Greene (1989) which proposed the five major purposes or rationales for conducting MMR. Greene (1989), Johnson & Onwuegbuzie (2004), and Hesse-Biber (2010) stated the five purposes or rationales as follows: (1) triangulation : this is the most commonly cited reason that mixed methods are incorporated into research (Hesse-Biber, 2010, p. 3), as it helps the researcher to enhance the credibility of the research findings. Campbell (1959) are credited with being the first to coin this term triangulation which is broadly defined by Denzin (1978, p. 291) as the combination of methodologies in the study of the same phenomenon. Their concept of triangulation is referred to as between- or acrossmethod triangulation, as opposed to within-method triangulation. Denzin also suggested the use of mixed methods, arguing that the bias inherent in any particular data source, investigators, and particularly method will be canceled out when used in conjunction with other data sources, investigators, and methods (p. 14); (2) complementarity: the researcher gains a fuller understanding of the research problem and/or clarifies research results (i.e., seeking elaboration, enhancement, illustration, and clarification of the results from one method with results from the other method); (3) initiation : initiating a new study adds new insights to existing theories on the phenomenon under examination (i.e., discovering paradoxes and contradictions that lead to a re-framing of the research questions) (Greene, 1989); (4) development : using the findings from one method helps inform the other method; and (5) expansion : it seeks to expand the breadth and range of research by using different methods for different inquiry components. However, mixed methods studies are likely to increase the cost of such research and reconciling disparate research philosophies may introduce practical difficulties and complications in outcomes and interpretation (Bryman, 2007; Sale, Lohfeld, & Brazil, 2002). In addition, multi-method studies also increase the time and resources needed for research (Bryman, 2007; Creswell & Plano Clark, 2007). Thus, the researcher has to keep in mind the impact of these factors in designing MMR.

277

AFBE Journal

Academic Papers

MMR DESIGN A research design is a journey from the intensely philosophical through the procedural to the practical and on to the final step of the representational (Whiteley, 2002, p.22). It is a plan for collecting and analyzing data in order to answer the research question (Holsti, 1969). It includes the overall approach to be taken and detailed information about how the study will be carried out, with whom and where (Maykut & Morehouse, 1994, p.64). It is a planning for certain broad contingencies without, however, indicating exactly what will be done in relation to each (Lincoln & Guba, 1985, p.226). Research paradigm A research design should begin with a paradigm choice (Maykut & Morehouse, 1994). Conducting a research study without a guiding paradigm is just like sailing without direction. A paradigm may be viewed as a set of basic beliefs (or metaphysics) that deals with ultimate or first principles. It represents a worldview that defines, for its holder, the nature of the world, the individuals place in it and the range of possible relationships to that world and its parts (Guba & Lincoln, 1994, p.107). The world views or schemata are so powerful that they demand allegiance in terms of epistemological and methodological procedures, techniques and research tools. Lincoln & Guba (2000) argue that our actions in the world, including actions that we take as inquirers, cannot occur without reference to those paradigms (p.15). Thus in designing any type of research the researcher must choose an appropriate paradigm to guide such research (Joungtrakul, 2009; Maykut & Morehouse, 1994) as different paradigm choices may lead to a different type of strategy and research method including methodology. Researchers often refer to four paradigms and these are positivism, postpositivism, critical theory, and constructivism (Guba, 1990; Guba & Lincoln, 1989). Later, Lincoln & Guba (2000) added participatory action research (Heron, 1996; Heron & Reason, 1997) as the fifth paradigm in their work. Creswell (2009) classifies research paradigms into four major categories: (1) postpositivism; (2) constructivism; (3) advocacy/participatory; and (4) pragmatism. Based on the classification provided by Creswell (2009) the pragmatism is the most suitable paradigm for an MMR study. Research strategy Having made an appropriate paradigm choice a selection of proper and specific strategy is also essential for the design of research. Choosing the right strategy for a research project is one of the most important decisions in conducting any research as a strategy is a framework for action. A strategy provides the basic direction. It permits seemingly isolated tasks and activities to fit together, and it moves separate efforts toward a common, integrated purpose (Patton, 1990, p.36). The research strategy selected provides guidance in selecting particular techniques or methodological practices for specific settings. [And that] method represents a strategic choice (Patton, 1990, p.36). Creswell (2009) identified six major strategies of mixed methods research: (1) Concurrent Triangulation; (2) Concurrent Embedded; (3) Concurrent Transformative; (4) Sequential Explanatory; (5) Sequential Exploratory; and (6) Sequential Transformative strategy. Each strategy will be described briefly, using mixed methods notation, as adapted from Morse (1991), Creswell & Plano Clark (2007)), and Teddlie & Tashakkori (2009).

278

AFBE Journal

Academic Papers

The first mixed methods strategy is called the Concurrent Triangulation approach (symbolized as QUAN + QUAL or QUAL + QUAN), in which the researcher collects both quantitative (QUAN) and qualitative (QUAL) data concurrently and then compares the two databases to decide whether there is convergence, differences, or some combination. This strategy is familiar to most researchers and may result in well-validated and substantiated findings. However, it requires great effort and expertise to adequately study a phenomenon with two separate methods (Creswell, 2009). The second type is called the Concurrent Embedded approach (symbolized as QUAN + qual or QUAL + quan), which has a primary method that guides the project and a secondary database that provides a supporting role in the procedures. Utilizing this strategy will help the researcher gain a broader perspective of the different types of data or from different levels within the study. The third type is called the Concurrent Transformative approach, which may take on the design features of either a triangulation or an embedded approach, depending on the researchers use of a specific theoretical perspective, as well as the concurrent collection of both quantitative and qualitative data. The fourth type is called the Sequential Explanatory strategy (symbolized as QUAN qual), which is a popular strategy for the mixed methods design (Creswell, 2009). It begins with the collection and analysis of the quantitative data in the first phase of the research, followed by the collection and analysis of the qualitative data in the second phase which builds on the results of the initial quantitative results. This design is typically used to explain and interpret quantitative results by collecting and analyzing follow-up qualitative data, particularly when unexpected results arise from a quantitative study. Qualitative data will be employed to examine its findings in more detail. The fifth type is called Sequential Exploratory strategy (symbolized as QUAL quan), which is similar to the sequential explanatory approach, except that the phases are reversed qualitative data collection and analysis are emphasized. This design uses the quantitative data and results to assist in the interpretation of the qualitative findings. It is useful to explore a phenomenon, together with expanding on the qualitative findings. The last type of mixed methods research strategy is called the Sequential Transformative strategy, which is a two-phase project with a theoretical lens overlaying the sequential procedures. The researcher may use either method in the first phase of research, and weight can be given to either phase or distributed evenly to both.

THE FEATURES OF MMR MMR combines both the quantitative and qualitative research and has its own distinct features. Creswell & Plano Clark (2007) identifies the following critical features of MMR: topic, primary study purpose, quantitative data collection, qualitative data collection, quantitative data analysis, qualitative data analysis, reasons for collecting both types of data, how the two types of data were mixed, notation, and visual diagram. These features can be used as criterion for comparison and evaluation of MMR studies. To fulfill the objectives of this study we have come up with a new set of criterion by deleting the visual diagram and added a research paradigm and a research strategy into the list of eleven selected features to be used as criterion for review and evaluation.

279

AFBE Journal

Academic Papers

The Current Practices of MMR Conducted in the USA and Thailand Ten research studies using mixed methods design that have been conducted in the USA and Thailand were selected for review. The data and information used for comparison is mostly based on the methodological part of the studies. A summary of each study conducted in the USA is illustrated in Table 1, while a summary of each study conducted in Thailand is illustrated in Table 2.

TABLE 1 : MMR CONDUCTED IN THE USA Robinson (2009) An exploratory comparison of the delivery costs for classroom and online instruction Myers (2010) Organization al and perceived social support, and the intent to resign among psychiatric nurses: A mixed methods study An exploration of the factors which contribute to the intent of psychiatric nurses to resign. Abbott (2010) Dilworth (2010) Constructing a Evaluating creative self- the impact of efficacy professional inventory: A development: mixed A mixed methods method study inquiry of adult education learning communities To examine the latent structure of creative selfefficacy. To describe and explore how adult education learning communities contribute to programs becoming learning organizations . NA Razzhavaikina (2007) Mandatory counseling: a mixed methods study of factors that contribute to the development of a working alliance To investigate the process of mandatory counseling and factors that are pivotal in this process

Topic

General purpose of the study

To explore the underlying cost elements within two distinct course delivery modalities: traditional face-to-face and completely online. Pragmatism Sequential Explanatory QUAN qual

Research Paradigm Research strategy Notation

Pragmatism

NA

NA Sequential Explanatory quan QUAL self-report questionnaires

Sequential Sequential Concurrent Explanatory Explanatory Triangulation QUAN QUAN qual QUAN + qual QUAL Quantitative Public online Survey Online SPSLC data resources questionnair survey and Survey collection e class Demographi c and perceptual surveys Program evaluation tool Qualitative Semi Individual Interview Focus group data structured in-depth transcripts collection interview telephone Extant interviews program data Email and Classroom telephone observation follow-up interviews

Semistructured Interviews Observation

280

AFBE Journal

Academic Papers

Quantitative Descriptive data statistics analysis

Qualitative Thematic data analysis analysis

Descriptive statistics Multiple Logistic Regression Multiple Linear Regression Typologies, Codes and themes

SD, Mean, Descriptive Correlation statistics Matrix Confirmatory Factor Analysis

Latent growth curve modeling analysis

Reasons for collecting both types of data

To provide a more complete picture of the intent to resign by using the second phase qualitative data to elaborate on the initial quantitative findings of the more indepth words of the psychiatric nurses. How the The Purposefully two types of qualitative select the data were data were qualitative mixed connected to participants the Develop quantitative interview results. protocol Interpretation and explanation of the quantitative and qualitative results.

The qualitative data were needed to explain the quantitative findings.

Descriptive Coding and Coding and Coding themes using thematic Topic Coding ATLALti analysis Analytic Across-and Coding within case comparison ATLASti software program The qualitative A multilevel The qualitative data were model of the data were needed to triangulation needed to explain the mixed explain the quantitative method quantitative findings. design that findings. collects data sets from several levels within a system and considers quantitative and qualitative data equally in the interpretation The qualitative data were connected to the quantitative results. Quantitative data and themes of the qualitative results were compared and the data sources treated equally in response to each research question. The quantitative and qualitative methods were connected in the intermediate phase of the research process while selecting the participants for the case study analysis. The results of two phases were integrated during the interpretation of the research findings of the entire study.

281

AFBE Journal

Academic Papers

Topic

General purpose of the study

Research Paradigm Research strategy Notation

TABLE 1: MMR (CONTINUED) Yamchuti Roberts Stout (2009) James (2008) (2002) (2009) Factors A Mixed Comparing An Empirical influencing Methods Rural Parent Investigation college choice Study of and Teacher into the Extent by students at Secondar Perspectives of Quality newly opened y of Parental Management private Distance- Involvement: Practices in colleges Learning A Mixed the Jamaican Students: Methods Manufacturing Exploring Study Industry Learning Styles To determine To To identify, To evaluate the factors explore compare, and the that led distanceanalyze the international students to learning varying competitivenes enroll at applicabil perspectives s of the newly opened ity within of teachers Jamaican private secondary and parents manufacturing colleges in education. regarding industry for Thailand. parental TQM versus involvement. non-TQM businesses using the quality management model stipulated by the MBNQA criteria. NA NA NA NA Sequential Explanatory QUAN qual Concurre nt Nested Sequential Exploratory

Mitchell (2009) Job Satisfaction and Burnout among ForeignTrained Nurses in Saudi Arabia: A Mixed Method Study

To explore the relationship between the demographic and work environment factors and hospital characteristics (linked to job satisfaction) and burnout among foreign-trained nurses (FTNs) living and working in Saudi Arabia. NA

QUAL(qu N/A an) Quantitativ Student A Teacher MBNQA e data survey by distancequestionnaire questionnaire collection questionnaire learning Parental activities questionnaire survey Qualitative Focus group data interview collection Open-ended question

Sequential Concurrent Explanatory Triangulation (proposed by authors) QUAN qual NA Surveys (NWIR,PES-NWI,and MBI) Demographic data questionnaire. Focus group interview started during the survey collection time

Quantitativ Descriptive e data and analysis inferential statistics (Mean, Median range, Chisquare)

Individu Focus group Structured al interview face-to-face interview interviews s (both TQM Focus firm and nongroup TQM firms discussio Document ns review company profile, quality manuals and annual reports Z-Score Descriptive Frequency statistics distribution T-test Descriptive statistic, One-way ANOVA Item-total correlation analysis 282

Frequency distribution Descriptive statistic Bivariate analysis Multiple Regression analysis

AFBE Journal

Academic Papers

Non-response analysis Reliability test Qualitative Coding data process analysis (Amanda & Atkison, 1996) organizing, managing, and retrieving data, identifying relevant concepts according to key themes and patterns. Reasons for The collecting qualitative both types analysis was of data needed to confirm and amplify on an initial, quantitative survey Open Coding Individual coding Thematic case Axial development summaries Coding provided a together detailed with Zdescription of score the Coding similarities statement and contrasts Peer among the reviews TQM and non-TQM firms (crosscase comparison) To Collecting The qualitative validate both data was the quantitative needed to analysis and explain and and qualitative elaborate on findings data provided the of the a means of quantitative three data triangulation results. sources: to assure data (a) reliability. individual interview s, (b) focus group discussio ns, and (c) distancelearning surveys. How the The The Quantitative The qualitative two types qualitative interview and data were of data data were and focus qualitative connected to were mixed connected to group data were the the discussio collected for quantitative quantitative ns were theme and results. results. transcribe category d and analysis then were grouped into meaningf ul units with the distancelearning activities surveys in an effort to find patterns and meaning from the data. The researcher analyzed 283

Multiple sources of data and multiple statistical procedures improved the accuracy of the study with a better understanding of the issues that affect the FTN personally and professionally.

The qualitative data were connected to the quantitative results.

AFBE Journal

Academic Papers

the three sources of data (individua l interview s, focus group discussio ns, and the distancelearning activities surveys) to uncover common themes and findings. As shown in Table 1, a review of each study conducted in the USA according to the eleven distinct features of MMR found that: (1) topic: seven research studies identified the term of a mixed method study in the research topic, one study used the word exploratory in the research topic. The rest of the studies did not identify any term to indicate the mixed methods study in the research topic; (2) purpose of the study: all studies identified the general purpose and some studies also included the specific purposes which referred to the research questions; (3) research paradigm: only two research studies explained the research paradigm and that pragmatism was employed; (4) research strategy: nine studies identified the research strategy in which seven of them used sequential design; (5) notation: six studies used QUAN at the first phase while another one used QUAN at the second phase to explore the QUAL data and results; the other two studies identified concurrent design which are nested and triangulation. Another one did not identify the research strategy but explained the research procedure in which that the research strategy is Concurrent Triangulation; (6) quantitative data collection: All research studies used the questionnaire as a quantitative research instrument, and an online survey was employed. In addition, a program evaluation tool was used; (7) qualitative data collection: each study used an interview as the primary method for the qualitative data collection in which there were two types of interview: in-depth interview (oneon-one) and focus group interview. In addition, observation and document review were employed for the data collection process; (8) quantitative data analysis: all studies employed descriptive statistics as the basis for quantitative data analysis, and some included inferential statistics, such as t-test, z-score, and ANOVA. Four of them also used advanced research statistics which were: multiple logistic regression, confirmatory factor analysis (CFA), and latent growth curve modeling analysis; (9) qualitative data analysis: most of the research studies explained the process of analyzing the qualitative data by using coding process, thematic analysis, and crosscase comparison; (10) reasons for collecting both types of data: the researchers of each study mentioned why they had to collect both types of data, such as to use the qualitative data to explain the quantitative findings, triangulate data or confirmatory results; and (11) how the two types of data were mixed: the authors of each study explained how the two types of data were mixed.

284

AFBE Journal

Academic Papers

TABLE 2 : MMR CONDUCTED IN THAILAND Wannasuthi (2009) A multi-level causal model of the influential factors affecting the computer learning achievement of key third stage students: Mixed method research Maralat (2008) Punphol (2008) A causal model The development of development the factors of affecting the scientifically success in a gifted student community indicators : An based network application of for health mixed management: A methodology mixed method approach Suksom (2007) The transferr ing process of factory control to local govern ment organiza tions in Lamphu n provinc e. NA Konpoothorn (2010) Burnout: A study of private vocational teachers in Pattaya, Thailand

Topic

General purpose of the study

To develop a multi-level causal model of the influential factors affecting computer learning achievement of key third stage students

To develop a causal model of the factors influencing the success in a community based network for health management.

Research Paradigm Research Strategy Notation Quantitativ e data collection Qualitative data collection

NA Exploratory Design (Sequential Equivalent) QUAL QUAN Questionnaire Unstructured interview Observation

NA Sequential Equivalent QUAL QUAN Questionnaire Observation Unstructured interview In-depth interview Focus group interview Interview guide

To develop character indicators for scientifically gifted students by means of a combined research method: a mixed methodology design which consisted of 3 sequential phases. NA Sequential Equivalent Design

NA

NA

NA

Sequent Sequential ial Explanatory Explana tory QUAL QUAN QUAN QUAN qual qual Questionnair Questi Survey e onnaire questionnaire Document review Interviewing scientific experts Structu In-depth red interview intervie ws with 5 officers from the Lamph un Provinc ial Industr y Office Descriptive Descrip Descriptive statistics tive Statistics Exploratory statistic (Mean, factor s Standard analysis (Freque deviation, Confirmatory ncy, Range)

Quantitativ e data analysis

Descriptive statistics

Basic statistics, correlation Structural equation modeling

285

AFBE Journal

Academic Papers

analysis by using the LISREL program Content analysis Content analysis Analytical induction Cross comparison Document analysis Reasons for NA NA collecting both types of data How the NA Use qualitative two types findings to of data were creating a mixed theoretical model and extend the findings to generalizing by quantitative methods Qualitative data analysis

factor analysis.

Content analysis Analytical induction

Percent Frequency age, distribution Mean, (percentage) Standar d deviati on) NA Descriptive issue by issue

NA NA

NA NA

NA NA

TABLE 2 : Table 2: MMR THAILAND (CONTINUED) Peukam (2009) An investigation of a decision model for outsourcing of human resource functions in Thailand Ketmanee (2006) The managemen t strategy of a non-profit organizatio n for children and youth developmen t: A case study of a center for the protection of a childrens rights foundation Boonrueng (2007) An organizatio nal developmen t diagnosis of the Office of the Court of Justice, Region 5 Phailaor (2004) The Effects of Conducting Classroom Action Research on Knowledge and the Working Process Development of Elementary School Teachers : A Mixed Quantitative and Qualitative Research Method To survey and compare the knowledge and working processes of teachers with different experiences in conducting classroom action research, and Jaikarnpan (2006) Strategy and Success in Knowledge Management for Organization Development: A Case Study of Ban Tak Hospital, Tak Province

Topic

General purpose of the study

To explain the NA HR outsourcing decision model in a Thai context

NA

NA

286

AFBE Journal

Academic Papers

Research Paradigm Research Strategy Notation Quantitativ e data collection

NA Sequential Explanatory Design QUAN qual

NA NA (Proposed : Concurrent Triangulati on) NA

NA NA (Proposed : Concurrent Triangulati on) NA

to study the influences that conducting classroom action research has on knowledge development and the working process NA NA Exploratory Design (Sequential Equivalent Status Design) QUAL QUAN Questionnaire

Qualitative data collection Quantitativ e data analysis

Qualitative data analysis Reasons for collecting both types of data How the two types of data were mixed

Questionnaire Quantitativ e questionnai res from 63 respondent s, comprised of 11 executives and 52 staff members. In-depth Qualitative Qualitative Participator interview interview interviews y Participato from 3 observation ry administrat Interview observation ors. Documentar y studies Descriptive Descriptiv Frequency Descriptive Statistics e statistics Percentage statistics Multiple Frequency/ Mean (frequency, regression Percentage Standard percent, model Arithmetic deviation mean, mean standard Standard deviation, deviation minimum, maximum, skewness, kurtosis values) T-test NA Content NA Content analysis Analysis NA NA NA NA NA NA

NA (Proposed: Concurrent Triangulation ) (qual QUAN) + QUAL Questionn Questionnai aires were re used to collect data from 23 authorities in the Office of the Court of Justice

Interviewing Observation

Percentage Arithmetic mean Standard deviation

NA NA

Triangulation

Use NA qualitative data for developing a quantitative questionnaire . The second qualitative

287

AFBE Journal

Academic Papers

findings were used to confirm or triangulate the quantitative findings.

As shown in Table 2, a review of each study conducted in Thailand according to the eleven distinct features of MMR found that: (1) topic: four studies identified the term mixed methods research in the research topic; (2) purpose of the study: five studies used the general purpose of the study while others studies identified specific purposes which referred to the research questions; (3) research paradigm: none of them presented a guiding research paradigm; (4) research strategy: seven studies identified sequential as the research strategy; (5) notation: four studies used QUAL at the first phase, three studies emphasized QUAN at the first phase, one study used qual, followed by QUAN and then used QUAL at the final phase. Two of them did not mention any specific research strategy; (6) quantitative data collection: each study used the questionnaire as a quantitative research instrument; (7) qualitative data collection: each study used an interview (semi-structured or unstructured interview) as the primary method for the qualitative data collection, and some studies used either individual (in-depth) or a focus group. Some studies also included an observation method in order to have a better understanding; (8) quantitative data analysis: all studies employed descriptive statistics as the basis of quantitative data analysis, and some included inferential statistics. Three of them also used advanced research statistics, such as multiple regression, exploratory factor analysis (EFA), confirmatory factor analysis (CFA), and structural equation modeling (SEM); (9) qualitative data analysis: five studies explained how to analyze the qualitative data by using content analysis, analytical induction and descriptive issue by issue. The other five studies did not explain the procedures for analyzing qualitative data; (10) reasons for collecting both types of data: only one study gave a reason for collecting both types of data which was for triangulation; and (11) how the two types of data were mixed: only two studies mentioned how the two types of data were mixed.

COMPARISON OF MMR CONDUCTED IN USA AND THAILAND Based on the review made in Tables 1 and 2, a comparison of the results using the eleven features of the MMR studies as a basis was made. Six areas of major similarities and four major areas of differences were identified. The six major areas of similarities are: (1) most of the MMR reviewed identified the term mixed methods research in the research topic. Some of them included the strategy of MMR in the topic such as the words exploratory or explanatory; (2) the majority of the MMR reviewed used the general purpose of the study rather than specific research objectives; (3) most of the MMR reviewed used questionnaires as the major instrument for quantitative data collection; (4) most of the MMR reviewed used an interview as the major instrument for qualitative data collection; (5) most of the MMR reviewed used descriptive statistics for quantitative data analysis; and (6) most of the MMR reviewed used sequential design particularly the sequential explanatory strategy.

288

AFBE Journal

Academic Papers

The four major areas of differences are: (1) only two MMR studies reviewed identified research paradigm and employed pragmatism in the studies; (2) most of the MMR studies conducted in Thailand did not provide detailed explanations of the qualitative data analysis; (3) only one MMR study conducted in Thailand provided a reason for collecting both types of data; and (4) only two MMR studies conducted in Thailand clarified how the two types of data were mixed.

DISCUSSION The findings of this study reflect the need for improvement in conducting MMR in two major areas: research design and data analysis. A number of critical issues in both areas will be selected for discussion in this section. It should be noted that out of twenty MMR studies conducted in Thailand and the USA only two studies identified and justified research paradigm. In designing any type of research it is essential that a guiding paradigm be identified and justified (Creswell, 2009; Maykut & Morehouse, 1994) as a paradigm provides direction for researchers to select the appropriate strategy and method for their study. In the area of strategy, it was clearly evident that most of the MMR studies conducted in Thailand did not clearly explain the justification for using a specific strategy. This is in contrast to the MMR studies conducted in the USA where most of them specified and justified the selection of a research strategy. Unlike the quantitative part of research, there are several strategies for qualitative research such as narrative, phenomenology, grounded theory, ethnography, case study, etc. (Creswell, 2007). Strategy tells how the researchers are to conduct their research which will lead to the proper selection of a research method (Creswell, 2009; Marshall & Rossman, 1999). Thus, identification, justification and explanation of strategy are essential in the MMR design. Unlike the MMR studies conducted in the USA most of the MMR studies conducted in Thailand did not clearly explain the process of qualitative data analysis. Although five of them provided certain levels of explanation, they did not clearly specify the procedures for data analysis. Data analysis in qualitative research is usually based on a research strategy. Normally, each strategy has its own type of data analysis (Joungtrakul, 2010), for example, grounded theory study data analysis usually begin with open coding followed by axial coding, selective coding, and theoretical proposition (Creswell, 1998; Glaser & Strauss, 1967; Joungtrakul, 2009, 2010; Strauss & Corbin, 1990). In addition to the identification and explanation of qualitative data analysis, an explanation of how the two types of data were mixed should also be made in the MMR study. Unlike the MMR studies conducted in the USA, only one MRR study conducted in Thailand provided an explanation of how the two types of data were mixed. In addition, it was noted that out of the twenty MMR studies reviewed fourteen studies were sequential studies (seven studies each in the USA and Thailand). These findings support that MMR is still in its adolescence stage and many issues are confused at the moment (Collins, Onwuegbuzie, & Jiao, 2007). Despite many scholars (Morse, 1991; Morgan, 1998; Creswell, 2003; Johnson & Onwuegbuzie, 2004; Onwuegbuzie & Leech, 2006; Teddlie & Tashakkori, 2006) having presented their

289

AFBE Journal

Academic Papers

views on how to collect, analyze, and interpret quantitative and qualitative data in a single study, many unresolved issues are still being discussed. One reason that other types of MMR were not employed may be that they take more time, resources and effort, especially the concurrent strategy (Creswell, 2009). To be able to answer various types of research questions other than those answered by the sequential strategy more MMR studies using other types of strategies should be conducted. It is noticeable in this study that most of the MMR studies conducted in Thailand did not specifically display a literature review on MMR. For example, many MMR research designs explain the process of conducting the research without referring to the theories and concepts of MMR. At the same time similar incidents occurred in the qualitative data analysis. Although an explanation was made on the procedures for data analysis, no reference was made to specific theories and concepts of qualitative data analysis. The reasons may be that qualitative research was not emphasized at the graduate level in Thailand. A study by Joungtrakul (2007) found that most of the Ph. D. courses in Thailand taught only one research course and that most of the research taught emphasize only the quantitative part. Similarly, most available Thai research text books are mainly quantitative. There are very few Thai text books available on qualitative research.

CONCLUSIONS AND RECOMMENDATIONS The findings of this study reflect the improvements needed in the two major parts of MMR study: (1) research design and (2) data analysis. To improve the quality of MMR studies it is recommended that: (1) research design should include research paradigm identification and justification; and the reasons should also be clearly explained and justified as to why both types of data collection are needed; (2) the process of qualitative data analysis and the combination of two types of data should be clearly explained in the MMR study; (3) more studies using other types of MMR strategies should be conducted, other than sequential design, to enhance the development of MMR; and (4) more qualitative research should be emphasized in graduate and research training courses than currently provided, particularly in Thailand.

REFERENCES

Abbott, D. H. (2010). Constructing a creative self-efficacy inventory: A mixed methods inquiry. University of Nebraska, Lincoln, Nebraska. Boonrueng, N. (2007). Organization development diagnosis of the Office of Court of Justice, Region 5. M.A. thesis, Chiangmai University, Chiangmai. Bryman, A. (2007). Barriers to integrating quantitative and qualitative research. Journal of Mixed Methods Research, 1(1), 8-22. Campbell, D. T., & Fiske, D. (1959). Convergent and discriminant validation by the multitrait-multimethod matrix. Psychological Bulletin,, 56, 81-105.

290

AFBE Journal

Academic Papers

Collins, K. M. T., Onwuegbuzie, A. J., & Jiao, Q. G. (2007). A Mixed Methods Investigation of Mixed Methods Sampling Design in Social and Health Science Research. Journal of Mixed Methods Research, 1(3), 267-294. Creswell, J. W. (1998). Qualitative Inquiry and Research Design: Choosing Among Five Traditions. Thousand Oaks: Sage. Creswell, J. W. (2003). Research Design: Qualitative, Quantitative, and Mixed Methods Approaches (2 ed.). Thousand Oaks: Sage. Creswell, J. W. (2007). Qualitative Inquiry and Research Design: Choosing Among Five Approaches (2 ed.). Thousand Oaks: Sage. Creswell, J. W. (2009). Research Design: Qualitative, Quantitative, and Mixed Methods Approaches (3 ed.). Los Angeles: Sage . Creswell, J. W., & Plano Clark, V. L. (2007). Designing and Conducting Mixed Methods Research. Thousand Oaks: Sage. Denzin, N. K. (1978). The Research Act (2 ed.). New York: McGraw-Hill Book Company. Dilworth, J. S. (2010). Evaluating the impacts of professional development: A mixed method study of adult education learning communities. Capella University, Minneapolis, Minnesota, USA. Fry, G., Chantavanich, S., & Chantavanich, A. (1981). Merging quantitative and qualitative research techniques: Toward a new research paradigm. Anthropology and Education Quarterly, 12, 145-158. Glaser, B. G., & Strauss, A. L. (1967). The Discovery of Grounded Theory: Strategies for Qualitative Research. Chicago, Illinois: Aldine. Greene, J. C., Caracelli, V. J., & Graham, W. F. (1989). Toward a conceptual framework for mixed-method evaluation design. Educational Evaluation and Policy Analysis, 11(3), 255-274. Guba, E. G. (1990). The Alternative Paradigm Dialog. In E. G. Guba (Ed.), The Paradigm Dialog (pp. 17-27). Newbury Park, California: Sage. Guba, E. G., & Lincoln, Y. S. (1989). Fourth Generation Evaluation. Newbury Park, California: Sage. Guba, E. G., & Lincoln, Y. S. (1994). Competing Paradigms in Qualitative Research. In N. K. Denzin & Y. S. Lincoln (Eds.), Handbook of Qualitative Research (pp. 105-117). Thousand Oaks: Sage. Heron, J. (1996). Co-operative Inquiry: Research into the Human Condition. London: Sage.

291

AFBE Journal

Academic Papers

Heron, J., & Reason, P. (1997). A Participatory Inquiry Paradigm. Qualitative Inquiry, 3(3), 274-294. Hesse-Biber, S. N. (2010). Mixed methods research: Merging theory with practice. New York: The Guilford Press. Holsti, O. R. (1969). Content Analysis for the Social Sciences and Humanities. Reading: Addison-Wesley. Hunter, A., & Brewer, J. (2003). Multimethod research in sociology. In A. Tashakkori & C. Teddlie (Eds.), Handbook of mixed methods in social and behavioral research (pp. 577-594). Thousand Oaks, CA: Sage. Jaikarnpan, K. (2006). Strategy and Success in Knowledge Management for Organization Development: A case Study of Ban Tak Hospotal, Tak Province. M.A. thesis, Chiangmai University, Chiangmai. James, M. E. (2008). An Empirical Investigation into the extent of Quality Management Practices in the Jamaican Manufacturing Industry., University of Phoenix, Phoenix, Arizona, USA. Johnson, R. B., & Christensen, L. B. (2004). Educational research: Quantitative, qualitative, and mixed approaches. Boston, MA: Allyn and Bacon. Johnson, R. B., & Onwuegbuzie, A. J. (2004). Mixed methods research: A research paradigm whose time has come. Educational Researcher, 33(7), 14-26. Johnson, R. B., Onwuegbuzie, A. J., & Turner, L. A. (2007). Toward a definition of mixed methods research. Journal of Mixed Methods Research, 1, 112-133. Joungtrakul, J. (2009). Industrial Democracy and Best Practice in Thailand. Saarbrucken, Germany: LAP Lambert Academic Publishing AG & Co. KG. Joungtrakul, J. (2010). Qualitative Research: A Tool for Knowledge Creation for National Development (in Thai). Bangkok: Business Law Center International Company Limited. Joungtrakul, J. (2007). How to Study Ph. D. Successfully (in Thai). Bangkok: Business Law Center International Company Limited. Ketmanee, C. (2006). Management Strategy of Non-Profit organization for children and youth development: A case study of the center for the protection of Chiildren's Rights Foundation. M.A. thesis, Chiangmai University, Chiangmai. Konpoothorn, P. (2010). Burnout: A study of private vocational teachers in Pattaya, Thailand. Burapha University, Bangsaen, Chonburi. Lincoln, Y. S., & Guba, E. G. (1985). Naturalistic Inquiry. Beverly Hills: Sage.

292

AFBE Journal

Academic Papers

Lincoln, Y. S., & Guba, E. G. (2000). Paradigmatic Controversies, Contradictions, and Emerging Confluences. In N. K. Denzin & Y. S. Lincoln (Eds.), Handbook of Qualitative Research (2nd ed., pp. 163-188). Thousand Oaks: Sage. Malarat, A. (2008). A causal model development of the factors affecting the success in community based network management for health: A mixed method approach. Dissertation, Naresuan University, Phitsanulok. Marshall, C., & Rossman, G. B. (1999). Designing Qualitative Research (3rd ed.). Thousand Oaks, California: Sage. Maykut, P., & Morehouse, R. (1994). Beginning Qualitiative Research: A Philosophic and Practical Guide. London: The Falmers Press. Mitchell, J. E. (2009). Job Satisfaction and Burnout among Foreign-Trained Nurses in Saudi Arabia: A Mixed Method Study. University of Phoenix, Phoenix, Arizona, USA. Morgan, D. (1998). Practical strategies for combining qualitative and quantitative methods: Applications to health research. Qualitative Health Research, 8, 362376. Morse, J. (1991). Approaches to qualitative-quantitative methodological triangulation. Nursing Research, 40, 120-123. Morse, J. M. (2003). Principles of mixed methods and multimethod research design. In A. Tashakkori & C. Teddlie (Eds.), Handbook of mixed methods in social and behavioral research (pp. 189-208). Thousand Oaks, CA: Sage. Myers, B. J. (2010). Organizational support, perceived social support, and intent to turnover among psychiatric nurses: A mixed methods study. Doctor of Philosophy, The University of Alabama at Birmingham, Birmingham, Alabama. Onwuegbuzie, A. J., & Leech, N. L. (2006). Linking research questions to mixed methods data analysis procedures. The Qualitative Report, 11(3), 474-498. Patton, M, Q. (1990). Qualitative Evaluation and Research Methods (2nd ed.). Newbury Park, California: Sage. Peukam, Bang-orn. (2009). An investigation of a decision model for outsourcing of the human resources function in Thailand. Ph.D. dissertation, Burapha University, Chonburi. Phailaor, S. (2004). Effects of conducting classroom action research on knowledge and working process development of elementary school teacher: A mixed quantitative and qualitative researh method. Chulalongkorn University, Bangkok.

293

AFBE Journal

Academic Papers

Punphol, W. (2008). The development of scientifics' gifted student characters indicators : An application of mixed methodology. Dissertation, Naresuan University, Phitsanulok. Razzhavaikina, T. I. (2007). Mandatory counseling: A mixed methods study of factors that contribute to the development of the working alliance. Doctor of Philosophy, The University of Nebraska, Lincoln, Nebraska. Roberts, J. (2009). A Mixed Methods Study of Secondary Distance-Learning Students: Exploring Learning Styles. Walden University, Minneapolis, Minnesota. Robinson, R. L. (2009). An exploratory comparison of delivery costs in classroom and online instruction. Doctor of Philosophy, The University of Texas at Austin, Texas, USA. Sale, J. E. M., Lohfeld, L. H., & Brazil, K. (2002). Revisiting the quantitativequalitative debate: Implications of mixed-methods research. Quality and Quantity, 36, 43-53. Sandelowski, M. (2003). Tables or tableaux? The challenges of writing and reading mixed methods studies. In A. Tashakkori & C. Teddlie (Eds.), Handbook of mixed methods in social and behavioral research (pp. 321-350). Thousand Oaks, CA: Sage. Stout, A. C. (2009). Comparing Rural Parent and Teacher Perspectives of Parental Involvement: A Mixed Methods Study. Minneapolis, Minnesota, Walden University. Strauss, A. , & Corbin, J. (1990). Basics of Qualitative Research: Grounded Theory Procedures and Techniques. Newbury Park, California: Sage. Suksom, K. (2007). Transferring process of factory control to local government organizations in Lamphun province. M.A. thesis, Chiangmai University, Chiangmai. Tashakkori, A., & Creswell, J. W. (2007). The new era of mixed methods. Journal of Mixed Methods Research, 1(1), 3-7. Tashakkori, A., & Teddlie, C. (2003). Issues and Dilema in Teaching Research Methods Courses in Social and Behavioral Sciences: U. S. Perspective. International Journal of Social Research Methodology, 6, 61-77. Tashakkori, A., & Teddlie, C. (2010). Putting the human back in "Human Research Methodology": The researcher in mixed methods research. Journal of Mixed Methods Research, 4(4), 271-277. Teddlie, C., & Tashakkori, A. (2006). A general typology of research designs featuring mixed methods. Research in the Schools, 13(1), 12-28.

294

AFBE Journal

Academic Papers

Teddlie, C., & Tashakkori, A. (2009). Foundations of Mixed Methods Research: Integrating Quantitative and Qualitative Approaches in the Social and Behavioral Sciences. Thousand Oaks, California: Sage Publications Inc. Wannasuthi, N. (2009). The multi-level causal model of the influential factors effecting computer learning achievement of the third key stage students: Mixed method research. Dissertation, Naresuan University, Phitsanulok. Whiteley, A. (2002). Grounded Research: A Modified Grounded Theory for the Business Setting Working Paper Series 98/01. Perth, Aus: Curtin University of Technology, Graduate School of Business. Yamchuti, N. (2002). Factors influencing college choice by students at newly opened private colleges. Illinois State University, Normal, Illinois, USA.

295

AFBE Journal

Academic Papers

RESEARCH, DEVELOPMENT AND APPLICATION OF NATIONAL INNOVATION SYSTEM OF SCIENCE AND TECHNOLOGY FOR THE DEVELOPMENT OF SUSTAINABLE OIL PALM AGRIBUSINESS IN INDONESIA Professor E. Gumbira-Said , Bogor Agricultural University, Bogor , Indonesia egum@mma.ipb,ac.idf H.Hasin, Researcher, BPPT, N.T. Rochman, L.FN-LIPI, D.L. Rahaya RAMP -IPB

ABSTRACT Strong efforts of the government, private sector, farmers and other stakeholders in developing oil palm agribusiness in Indonesia has succeeded in placing Indonesia as the highest producer of palm oil in the world since 2007. However, global challenges have put a lot of pressure on the sustainability of oil palm agribusiness in Indonesia, due to the issues of climatic change, the worries of environmental degradation, and business rivalry from other vegetable oils producers. Therefore, a national innovation system that supports research, development and business networking for sustainable oil palm agribusiness has to be established in Indonesia. This study was done to observe research and development activities within the framework of the national innovation system, and to find the networking of R&D and business activities among the national innovation systems actors in the Indonesian oil palm agribusiness. Some methods were used in the study, namely assessment using questionnaires, focus group discussion and surveys on the relevant objects. Some experts, and oil palm agribusiness and agro industry practitioners were involved in the study, as well as postgraduate students pursuing Masters and Doctoral degrees in Agribusiness management and Agro industrial technology. The results of the study show that the assessments scores of the postgraduate students on the main elements of the national innovation system were higher than that of the experts and business practitioners. However, using the successful role of the Malaysian Palm Oil Board (MPOB) as a reference, the experts and business practitioners required that the Indonesian government give better political support in improving the education and R&D system, industrial system, providing an intermediaries research institution, and providing complete supra and special infrastructure. In the framework conditions, it was found that R&D promotion, institutional networking, availability of a business park or business cluster, as well as business ventures in developing sustainable oil palm agribusiness were still weak. The only good results of the assessment were found on the human resource development of oil palm, while the commercialization of R&D results, science and technology infrastructure and the availability of business incubators were not well established. Some R&D activities and business networking have been identified, in which, at the present, the Indonesian Oil palm Research Institute (IOPRI) plays as a main player, and which have R&D and business network linkages with government R&D and policy units, the R&D units of the private sector and big industry players, leading universities in both national and local levels, as well as with the national oil palm business associations are also important players.

296

AFBE Journal

Academic Papers

Key Words: National Innovation System, research and development, business networking, sustainable oil palm agribusiness, focus group discussion. INTRODUCTION The fast development of the oil palm agribusiness in Indonesia in the last ten years, has led Indonesia to replace Malaysia as the highest producer of palm oil in the world since October 2007. In May 2009, IOPRI (2009) reported that Indonesia produced nearly 19 million tons of crude palm oil (CPO)from about 7.52 million hectares of oil palm plantation. In 2009, export of CPO and its derivatives became USD 12.3 billions (GAPKI, 2009),a figure which is much higher than it was in 2007, which was USD 7, 9 billions, and giving employment to more than 3.3 million workers, working both on and off farms (Info Sawit, 2009). In 2020, it is expected that Indonesia will produce 50 million tons of CPO (Minister of Industry RI, May, 2009). The ambition to produce 50 millions tons of CPO by 2020 which was made in 2009, has attracted complaints and criticism from foreign parties, with specific reasons, among others, due to the risks of global warming, environmental degradation, and business competition from other vegetable oils. Ardiansyah, et al. (2009) outlined that the World Wildlife Fund is concerned with three key elements of land requirement for oil palm agribusiness, namely biodiversity, change in carbon stocks and land right issues. There are several challenges in developing the oil palm agribusiness in the years to come, especially with regards to technology and business innovation, ecological risks, biodiversity, and poverty implication, as follows (Gumbira-Said, 2008): (1) Environmentally friendly and considering the RSPO guidelines or protocols, (2) Transparency and auditing, (3) Complicated shareholders, (4) Global vision on global warming, (5) Unlimited capital for expansion, (6) Hyper competition, especially now in the Asian region, (7) Driven by scientific innovation, and (8) High flexibility in broad utilization of CPO as food, feed or fuel. According to Sharif (2006), in general the network development of the national invention and innovation system of science and technology research, development and application can be approached using three essential innovation triangle linkages (R&D Units in the Public sector; R&D Units in the Academic Sector; and R&D Units in the Private Sector). There are six active intermediaries supporting the innovation triangle, namely (1) Design and Tool Engineering Agencies, (2) Intellectual Property Regulation Agencies, (3) Knowledge Networking Agencies, (4) Information Services Agencies, (5) Venture Capital Financing Agencies, and (6) Standardization and Certification Agencies (Gumbira-Said, et al., 2009). This study is aimed at exploring research and development activities and business networking in oil palm agribusiness in Indonesia. In addition this study is also intended to explore activities in the production of sustainable palm oil which is compatible with the global needs of natural vegetable oils, and anticipates the concerns on global warming, environmental degradation and any other negative risks associated with the oil palm agribusiness development in the future. RESEARCH METHOD This study uses the descriptive research method. Descriptive research is used to obtain information about the current status of R & D and business network activities between all the National Innovation System (NIS) actors in the Indonesian oil palm agribusiness, especially in applying the innovations generated. This method involves a variety of techniques as described below.

297

AFBE Journal

Academic Papers

a. Desk Study This activity was conducted to study the existing policy and regulation which provides support to all network and partnership activities between the NIS actors; the existence of the elements in innovation triangle (R&D Units in the Public Sector; R&D Units in The Academic Sector; and R&D Units in the Private sector). b.Literature Review This activity was conducted to provide a good conceptual foundation related to the network of the NIS actors in the Indonesian oil palm agribusiness. c. Survey and Case Study A Survey was done to identify NIS development and R&D products application in West Java and Lampung Provinces oil palm plantations in Indonesia. e. Focus Group Discussion Focus Group Discussion was done in which six experts of the Indonesian Oil Palm Society (MAKSI; represented by three academics and three executive officers of private companies) were involved in the discussions in Bogor, Indonesia, and 13 experts, representing academia, government research institution and private company executives participated in the FGD in Lampung, to review the results of NIS elements assessment, and to explore more detailed information on the R&D networking in the Indonesian oil palm agribusiness. f. Data Collection Through Questionnaires 16 respondents were involved in the assessment of the elements of NIS, they were eight experts and palm oil agribusiness (agro industry) practitioners in the country and eight postgraduate students pursuing Masters or Doctorate degrees in Agribusiness Management or Agro Industrial Technology at Bogor Agricultural University, Indonesia, and also academic staff at many universities. Data obtained from the questionnaire was about the assessment scores of the respondents on the success or the achievements of the NIS components, R&D development and institutions networking conditions, and R&D level in the national development based on R&D national programs. All the assessment scores were calculated to obtain the average scores from the respondent groups, to know the overall evaluation scores and to compare the evaluation scores from both respondent groups. For the purpose of analyzing the assessment scores of the achievement or the success of the national NIS elements, that is adopted from the National Innovation System Model (Arnold and Kuhlmann, 2001) and developed to be a diagram of the National Innovation System (KNRT, 2008), was used.

RESULTS AND DISCUSSION Perspectives on The General Main NIS Components The overall results of the respondents perspectives on the national innovation system performance in the Indonesian oil palm industry cluster is shown in Figure 2. Two respondent groups involved in the study, namely the experts and oil palm agribusiness and agro industry practitioners (blue number or right side number) and postgraduate students pursuing Masters and Doctoral degrees in the fields of agribusiness management and agro industrial technology (red number, or left side number). Post graduate students were involved in the analysis to represent their view on the future sustainability of Indonesian oil palm agribusiness, and their readiness in improving sustainable agribusiness practices for oil palm. Based on the analysis results of the respondents assessment on NIS components performance (Figure 1), graduate respondents assessment on the general performance

298

AFBE Journal

Academic Papers

of NIS components was better than that of the experts and business practitioners. The perspectives values can be seen from the graduate respondent assessment score which is higher than that of the experts and business (industry) practitioners assessment scores. The average score for the whole NIS components performance based on the graduate student respondents assessment was 1.8 (with means medium or moderate achievement). On the other hand, the assessment results of the experts and the business practitioner respondents had an average score of 1.6 (low or under achievement). Statistical analysis of the respondents assessment scores indicated that the perspectives between the two respondent groups were significantly different. From the four NIS components groups, the NIS of the political system and R&D framework conditions has an average assessment of 1.8 (moderate achievement) from the graduate student respondents. On the other hand, the experts and the business practitioner respondents assessed both of the NIS components as relatively low, namely 1.5 or under achievement. They assessed the performance of supra and specialty infrastructure components with a medium level of achievements (1.8). Despite the importance of supra and specialty infrastructure to support sustainable oil palm agribusiness, however, the graduate student respondents assessment on the performance of supra and specialty infrastructure components could not be used, because not all of the graduate student respondents were able to access this, or there is a highly uncertainty level in the assessment performance of supra and specialty infrastructure components. It could be understood that their knowledge and experiences are lower than that of the experts and business practitioner respondents who not only have more experience but have direct knowledge from this experience.. However, there is no reference to confirm this evidence since there is no similar research involving postgraduate students in the NIS evaluation. In the NIS main component and political system, both of the respondent groups assessed that the subcomponents of the political system and intermediary components had low levels of performance, even though the governments ambition is to place Indonesia as a permanent world leader of palm oil producer and this is very strong (Ministry of Industry, 2009). On the assessment of subcomponents performance in R&D institution and industry system components, the graduate student respondents assessed the performance level as being moderately successful. However, the results of the assessments were again different from that of the experts and business practitioner respondents who assessed a low value (under achievement) for the subcomponents performance level. Within the supra and specialty infrastructure, subcomponents of standardization and certification; information and intellectual right services; and the venture capital were assessed with a medium performance (moderate success) level by both of respondent groups. It was only the subcomponent of R&D networking and engineering design performance which had a low assessment score (under achievement) by both respondent groups. Unfortunately, the assessments score on the business venture from respondents perspectives was not addressed as a true business venture activity as is normally known, but was misinterpreted as the general and common banking or funding institutions activities. Some respondents stated that the business venture scheme model in Indonesia does not exist.

299

AFBE Journal

Academic Papers

FIGURE 1 : RESPONDENTS PERSPECTIVES OF NIS COMPONENT Respondents Perspective THE INDONESIAN OIL PALM INDUSTRY PERFORMANCE IN on NIS Component Performance in Oil Palm Industry Cluster CLUSTER
Demand: (users and industry readiness) Main Component of NIS and Political System
Political System (Government Support) R&D Institution (Research resource ability) Intermediary (Promotion and Networking) Industrial System (Access and industry readiness )

Standardization Supra & & Certification Specialty Infrastructure 1.9

R&D Networking & Design Engineering

HKI & Information Services

Funding (Venture Capital)

1.6

1.9

1.9

Framework Condition

R&D Promotion

Institution Networking

Availability of Business Park/Cluster

Business Venture

HR Development

Commercialization of R&D Result

Science & Technology Infrastructure

Business Incubation

(Perspective of R&D performance: 1.0 low 1.7; 1.7 < medium 2.3; < high 3.0)

2.3

The assessment of performance on the R&D framework condition was given as a medium achievement of success level by graduate student respondents, but it was assessed as low by the experts and business practitioner respondents. The difference in those assessments could be analyzed in more detail from the assessment of the six R&D framework subcomponents, namely R&D promotion, networking cooperation, Business Park availability, human resource development, R&D products commercialization, and business incubation in the oil palm agribusiness. The graduate student respondents assessed those subcomponents with a medium success level, while the experts and the business (industry) practitioners assessed it differently. The only similar results occurred in the assessment on human resource development. Both groups of respondents assessed that the HRD development has a medium achievement level. In general, the difference perspectives between the graduate student respondents and the experts and business (industry) practitioner respondents could be caused by the lack of the graduate students experiences on the NIS reality and actual business conditions. The graduate student respondents evaluated that performance of NIS as generally good enough, so their score of assessment was higher than that of the experts and business (industry) practitioners. The experts and business (industry) practitioner respondents which are NIS internal actors in the oil palm agribusiness are more knowledgeable on the reality of NIS conditions, the needs of the NIS components and their weaknesses in developing sustainable oil palm agribusiness. Perspectives On The Political System, R&D Institution and Intermediary Elements (Promotion and Networking)

300

AFBE Journal

Academic Papers

The Perspective scores of the oil palm industry cluster on political system, R&D institution and intermediary elements subcomponents performance from both groups of respondents are shown in Table 1, with the following discussion. Political System Different to that of the graduate students assessment results for the two subcomponents in the political system (link and match between government, industry, and university; and governments active roles in technology transfer within the oil palm industry) which gave moderate success performance (1.8), the experts and the business (industry) practitioner respondents assessed those subcomponents with a low value performance (under achievement) (1.3) . Between the two subcomponents of political system assessment, the score from the experts and the business (industry) practitioner respondents assessment on the link and match between government, industry, and university was lower compared to that of the governments active role in technology transfer. This implies that there might be a possibility that R&D activities on sustainable CPO production system in the universities and R&D institutions were only based on technology push but not on market pull, so the compatibility of the R&D results with industry needs are low. Once more, the difference of the assessment results between the two groups of respondents may possibly be because the experts and the business practitioners demand the same strong support from the Indonesian government, as the Malaysian government provides for MPOB and other Malaysian oil palm industry cluster actors. MPOB, for example, in 2008 published and launched a booklet claiming so many success factors in developing the oil palm agribusiness in Malaysia (MPOB, 2008). TABLE 1 : THE PERSPECTIVE SCORES OF THE INDONESIAN OIL PALM INDUSTRY CLUSTER RESPONDENTS AND INTERMEDIARY ELEMENTS SUBCOMPONENTS PERDFORMANCE
No 1 a b 2 a b c d e f g 3 a b c d e f g NIS Components Political System Components Link & match between government, industry, and university Government active roles in technology transfer R&D Institution Resource of research in Indonesia Technology inventory which is applied in R&D R&D innovation that can enter the commercial stage Capability to develop science and technology solution National R&D capacity National innovation capacity Scientific and popular publications to increase society intelligence Intermediary Promotion of research results Networking between business, researcher and government Cooperation with international R&D institution Cooperation with regional R&D institution Cooperation with local R&D institution Technology utilization progress monitoring SMEs assistance in research application Score I 1.8 1.8 2.5 2.0 1.6 1.9 1.8 1.8 1.5 1.6 1.6 1.5 1.6 1.9 1.6 1.8 II 1.1 1.5 2.1 1.6 1.3 1.9 1.8 1.9 1.5 1.1 1.3 1.3 1.3 1.5 1.3 1.1

Perspective of R&D performance : 1.0 low 1.7; 2.3 < high 3.0 I = Graduate student respondents

1.7 < medium 2.3;

301

AFBE Journal

Academic Papers

II = Expert and business (industry) practitioner respondents Research and Development Institutions From seven subcomponents performance assessment on R&D institutions, there were four subcomponents that had assessment score of moderate performance both by the graduate student respondents and the experts and business (industry) practitioner respondents. The four subcomponents were resource of oil palm research in Indonesia; technology inventory which is applied in R&D; national R&D capacity; and national innovation capacity. The results indicate that R&D of oil palm in Indonesia has a basic strength and foundation to become developed. Unfortunately, three other subcomponents performance were assessed as under achievement by the experts and business (industry) practitioners. Those three subcomponents were technology inventory which is applied in R&D; innovation of R&D especially in the downstream processing of crude palm oil that can enter the commercial stage; and scientific and popular publications to increase society awareness and intelligence on sustainable oil palm agribusiness in the future . Intermediary Elements (Promotion and Networking) Almost all the subcomponents in the intermediary elements performance assessment had a low score by both groups of respondents. Only two subcomponents namely R&D cooperation with local R&D institutions and SMEs assistance in research application were given moderate success by the graduate student respondents, especially with regard to the works of IOPRI. Subcomponents of networking between business, R&D institutions and government; R&D cooperation with regional, national and international R&D institutions; technology utilization progress monitoring; and SMEs assistance in research application were assessed as having low achievement performance by the experts and business (industry) practitioners. Although IOPRI (IOPRI, 2009) have been putting in a lot of effort to increase its performance, especially in international R&D cooperation (for example with Malaysia parties), it was not successful enough to increase its performance on the promotion and networking spread of sustainable oil palm agribusiness. Perspectives On The Industry System, Framework Conditions of R&D, and Supra and Specialty Infrastructure The average score of the industry system, framework conditions and supra and specialty infrastructure performance assessment scores from the graduate students and the experts and business (industry) practitioner respondents are shown in Table 2.

Industry System The perspective scores of the experts and business (industry) practitioners on the oil palm industry cluster categorized four subcomponents in the industry system performance assessment as having a low achievement. They include readiness of business actors to adopt research results; industry development based of science, technology and competitiveness; business actor access to technology information; and cooperation with SMEs agribusiness might be the main reason why big oil palm organizations such as SMART, Wilmar Group, Lonsum and Sampoerna Agro have established their own R&D stations (Liwang, et al., 2009).

302

AFBE Journal

Academic Papers

TABLE 2 : THE RESPONDENTS ASSESSMENT SCORES ON INDUSTRY SYSTEM , R&D FRAMEWORK CONDITIONS , AND SUPRA AND SPECIALTY INFRASTRUCTURE SUBCOMPONENTS PERFORMANCE OF INDONESIAN OIL PALM INDUSTRY CLUSTER
No 1 a b c d 2 a b c d e f g 3 a NIS Components Score I II 1.5 1.6 1.6 1.4 1.8 2.1 1.6 1.7 1.5 2.0 1.6

b c

Industrial System Readiness of business actors to adopt research results 2.0 Industry based of science and technology and competitiveness 1.5 Business actors access to technology information 1.8 Cooperation with small and medium scale enterprises (SME) 1.8 Framework Condition National promotion about strategic R&D 2.4 Human resource development 2.4 Creation of link between R&D institution, government, academic and industry 1.6 R&D product commercialization 1.5 Availability of business park and business cluster 1.6 Provision of complete science and technology infrastructure 2.2 Business Incubation 1.6 Supra and Specialty Infrastructure Intellectual propertyof R&D performance: 1.0 low 1.7; 1.7 < medium 2.3;Perspective right & information services - Information 3.0 Institution < high Service - Human intellectual right institution I = Graduate respondents Business Loan Institution (Venture Capital) II and Expert and business (industry) Science= knowledge network and engineering design practitioner respondents - Tools and machine design andthe graduate student respondents (some respondent - = no answer from engineering institution - Science Networkingto give the right assessment) difficult Institution Standardization and certification institution -

2.3

1.8 1.8 1.9 1.9 1.6 1.6 1.5 1.9

Framework Conditions of R&D The scores of the assessment on subcomponent performance in R&D institution from the graduate student respondents and the experts and business (industry) practitioners indicated some similar perspectives. Subcomponents in R&D institution performance assessment that had a moderate level of performance by both groups of respondents were human resource development; national promotion about strategic R&D, including oil palm agribusiness as a backbone of the economy; and science and technology infrastructure. Performance in the R&D institution subcomponent that was given a low achievement performance by both respondents was the creation of links between R&D institutions, government, academia and industry; R&D product commercialization; availability of business parks and business clusters; and business incubation in the oil palm industry. Up to the present time, the role of a business incubator for government owned oil palm plantations is held by LPP Yogyakarta and LPP Medan. Supra and Specialty Infrastructure In general, the average performance of assessment score on supra and specialty infrastructure in the oil palm agribusiness was categorized at a moderate level of performance. However, there were two subcomponents that had low scores of performance. Those components were tools and machinery design and engineering institutions and science networking institutions in the oil palm agribusiness. One of the reasons that caused Indonesian oil palm development is not as good as Malaysia is due to lower capacity of the Indonesian engineering and manufacturing capability which is behind that of Malaysia. As an example, Malaysia has some companies that can supply machineries and equipment needed by oil palm industries, such as MBL

303

AFBE Journal

Academic Papers

Engineering Sdn Bhd, MSHK Engineering Sdn Bhd, KH Engineering Works Sdn Bhd, CHD Engineering Sdn Bhd and CL Engineering and Trading Sdn Bhd (MPOB, 2008). From two focus group discussions involving 19 experts in the oil palm agribusiness it is clear that the discrepancy of the assessments results between the postgraduate students and the experts might have happened due to different experience and focus of evaluation. Postgraduate students focus their view on technology or knowledge push, while the experts, driven by their own needs in the business focus on the market pull factors. Therefore, balancing R&D focus on knowledge push and market pull factors (Sharif, 2007) in the Indonesian national innovation system should be done to improve the work of the national innovation system. Some R&D topics were collected from FGDs which need to be supported by the Indonesian government, academic and oil palm business practitioners to make Indonesia become the real oil palm world champion as follows: (1) An integration approach of agricultural suitability, land availability or displacement and sustainability of oil palm agribusiness. (2) Making up of a wider planting materials to solve oil palm disease problems, and boosting research and development to produce high yielding planting materials which are more adaptive to local conditions both biotic and abiotic factors,as suggested by Purba, et al. (2009). (3) Improving oil palm productivity per unit area by replanting with high yielding planting materials with the potential of eight tons commercial oil yield per Hectare, as described by Chandran (2009). (4) The use of CPO for better food quality (cooking oil, margarine, shortening, salad dressing, vanaspati and ghee, cookies etc.) production; emulsifier (MDAG, etc); Palm Oil for Cocoa Butter Substitute (CBS); Palm Kernel Oil (PKO) for oleo chemicals production; CPO and PKO for Health and Nutrition (Vitamin A, E, nutraceuticals etc.) and Multiple use of cooking oil during frying of snack foods by micro and small scale industries, and street vendors (5) The use of membrane of filtration to increase high value of cooking oil; Bulk cooking oil for micro and small scale industries; and the use of CPO as raw material for industrial coatings and adhesive . (6) To maximize the use of oil palm harvest materials, including the by products into valuable products, following the success of Malaysia in diversifying sustainable and eco friendly oil palm products. Research and Development Networking and Business Development on Oil Palm Industry Clusters Networking of R&D and business development at the Indonesian Oil Palm Research Institute (IOPRI; PPKS) Medan which is one of a semi-government R&D institution was used as a case study in palm oil industrial base R&D and business development networks. IOPRIs R&D networking has been applying the concept of ABG triangle innovation networking (academia, business and government). Academic group at IOPRI networking are some Indonesian universities who have developed oil palm R&D. Business actors in IOPRIs networking are big scale oil palm industries, the owners of oil palm plantations, and association of palm oil based products producers (oleo chemical producer, vegetable oil producer and bioenergy producer). IOPRI has

304

AFBE Journal

Academic Papers

also cooperation networking with public R&D institutions, and the Indonesian Oil Palm Society (MAKSI). Figure 2 illustrates the scheme of IOPRI R&D networking and business development. The roles of each actor in IOPRIs R&D networking and business development are as follows: a. Indonesian Oil Palm Research Institute (IOPRI) IOPRI has been proactive in oil palm research program which includes seed supply, plant cultivation technology, water and soil management, CPO production technology, until business and palm oil based products marketing. b. Indonesian Oil Palm Producer Association (IOPPA) IOPPA is active in the advocacy of oil palm agribusiness, CPO international trades, RSPO discussion, etc.

FIGURE 2: SCHEME OF OIL PALM RESEARCH INSTITUTE , MEDAN, INDONESIA

Big Scale Industries Wimar, Lonsum, Astra Agro Lestari, Bakrie Sumatera Plantation, Asian Agri, Sinarmas Group, Musim Mas, dll Universites in Indonesia ITB, UGM, IPB, USU, UNRI, UNSYIAH, UNILA, UNSRI, UNIB, UNHAS, ITS, UNLAM, etc

Indonesian Oleochemical Producer Association

Indonesian Oil Palm Research Institute (IOPRI)

Association of the Indonesian Vegetable Oil Industries

Indonesian Oil Palm Society (MAKSI)

PTPN III, V, VII, etc.

Union of Indonesian Oil Palm Producer Association (GAPKI)

Indonesian Bioefuels Producer Association

Some Indonesian Universities Almost all Indonesian big universities and local universities in the regions with large oil palm resources are active in the R&D of oil palm downstream and upstream products activities which are useful for oil palm business development. However, their activities are limited by the availability of research funds.
b.

Large scale oil palm industry Several large scale oil palm businesses in Indonesia do their own R&D activities related with their interest in the downstream or upstream oil palm sector. They also do several oil palm agribusiness advocacies in the global market.
c.

Indonesian Palm Oil Society (MAKSI) MAKSI is active in oil palm R&D, promotion and advocacy of sustainable oil palm agribusiness, and tighten R&D networking with other institutions.
d.

305

AFBE Journal

Academic Papers

e. PT Perkebunan Negara (PTPN III, V, VII, etc.) PTPNs do many applied R&D cooperations with IOPRI and the Plantation Education Institution (LPP) in Medan and Yogyakarta and other oil palm stakeholders. PTPN is one of IOPRI R&D products users. f. The Association of the Indonesian Oleochemical Producers (APOLIN) APOLIN is active in the business advocacy of oleochemical based oil palm, especially for global market. g. The Association of Indonesian Vegetable Oil Industry (GIMNI) GIMNI is actives in the advocacy activities of Indonesian oil palm business development besides of other vegetable oils such as coconut oil. h. The Indonesian Bioefuels Producer Asociation The association does some biofuel R&D (biodiesel and bioethanol) in cooperation with biofuel related institutions.

With the establishment of the Indonesian Oil Palm Council (IOPC, DMI), a strict guidance on sustainable oil palm agribusiness practices should be accelerated, since the institution will play a central role in developing sustainable oil palm agribusiness in Indonesia. The roles of IOPRI have also to be increased to secure better oil palm business networking and development of sustainable oil palm agribusiness in Indonesia, in the future. . SMEs business development case study From focus group discussions and field visits to Lampung, it is obvious that oil palm industry clusters almost do not have any R&D linkage with SMEs. The reason might be due to its nature that oil palm business is a big business, which needs a big investment. Other reason is because the oil palm business is an integrated industry, a cluster itself, so that the volume of business is also at a large scale. However, some SMEs types were identified to a have networking scheme with the oil palm business, as listed below. i) SMEs on lorry or truck transportation, with lorries or trucks to be hired for fresh fruit bunches or empty fruit bunches transportation. ii) SMEs on general trading that service the labor of oil palm big players some daily needs, such as food and beverage provider. iii) SMEs on the CPO processing at a mini pilot scale type that process fresh fruit bunch of oil palm at a low quality capacity. However, since the volume of business is low, the sustainability of the business is not long. CONCLUSIONS The assessments scores of the postgraduate students on the main elements of the national innovation system were higher than that of the experts and business practitioners, due to the lack of real experience and exposure to the real oil palm agribusiness. Therefore, it is recommended that government and Oil Palm Associations provide more advocacy materials to increase students and society knowledge on the development of the sustainable oil palm agribusiness in Indonesia.

306

AFBE Journal

Academic Papers

The experts and business practitioners require that the government of Indonesia provides a better national innovation system, as well as R&D and business infrastructure for sustainable oil palm agribusiness development in the future. They recommend Indonesian oil palm stakeholders to benchmark the success of Malaysia in advancing oil palm agribusiness in increasing its contribution to the national economy. ACKNOWLEDGEMENTS We would like to thank Recognition and Mentoring Program (RAMP) of Bogor Agricultural University, Indonesia, especially Dr. Aji Hermawan (Director) for sponsoring this study, and all the respondents and resource persons in the surveys and focus group discussions.

REFERENCES Ardiansyah, F., A. Budiman and B. Dehue (2009). Identification of responsibkle Cultivation Areas for Biofuel Crops. WWF Indonesia, Jakarta. Arnold ,E, S.Kuhlman (2001), RCN in the Norwegian research and Innovation System .Background Report no.12 in the Evaluation of the Research Council of Norway, Oslo: Royal Norwegian Ministry for Education , Research and Church Affairs. Chandran, M.R. (2009). Future Prospects for palm Oil in the Global Vegetable Oil Market. Platinum Energy Sdn Bhd Erningpraja, L.(2008) Applications of GAP and GMP to Increase The Quality And Safety Of palm Oil. Medan: PPKS Freibel, S (2009). Raw Materials for Industrial Coatings and Adhesives From Vegetable Oils and Sugars. Fraunhofer International Seminar, Jakarta 11 June 2009 Gumbira-Said, N. Taufiku Rochman, H. Y. Rosadi, DL Rahayu & N.A. Evalia (2009). Discussion on Preliminary Results of NIIS study, presented at a FGD at Nanotechnology Group, LF-LIPI, Serpong

307

AFBE Journal

Academic Papers

Gumbira-Said, E and MAKSI (2009). Palm Oil: Promising Biomass Resources for Food, Fuel or Chemical. Fraunhofer International Seminar, Jakarta 11 June 2009 ICE-PO (2009), Program Book of International Conference and Exhibition on Oil palm. Jakarta: Bimantara Inka and IOPRI KNRT (2008), Concept of the National Middle Term Planning 2010-2014: Strengthening of the Innovatioin System, Presented at the National Coordination meeting of Research and Technology,Palembang, Indonesia, April 16-17. Liwang, T., A. Daryanto, E. Gumbira-Said and N. Nuryartono (2009). Research and Innovations To Improve the Oil Palm Seed Production. XVI International Oil Palm Conference and Expopalm. Cartagena de Indias, 22 25 September 2009 MPOB (2008). Facts on Oil Palm. MPOB, Kuala Lumpur, Malaysia Prasetya, B; S. Hartati, E. Hermiati, M. Samsuri & M Gozan (2009). R & D On Biomass Based Chemical Product From Indonesian Resources. Fraunhofer International Seminar, Jakarta 11 June 2009 Purba, A.R., P. Amblard, T. Durand-Gasselin and R. Nookiah (2009). Oil palm Planting Materilas: Seeds and Clones for the Future. ICE-PO, Jakarta may 27 29, 2009 InfoSawit (2009). April, May and June 2009 editions, Jakarta IOPRI (2009). PPKS List of Publications. PPKS, Medan RAMP IPB (2009). Intermediate Report on NIIS Sharif, N (2006). Managing technology policy and planning for economic development in developing countries. Proceeding (Book 2) National Innovation System. Jakarta: LIPI Srinivasan, N (2006). National innovation system policy framework: concepts, elements, development and implementation. Proceeding (Book I) National Innovation System. Jakarta: LIPI Triyanto, E. Gumbira-Said & A. Maulana (2008). Analysis on Biodiesel Feasibility Production From Palm Oil. Bogor, MB-IPB

308

AFBE Journal

Academic Papers

ROLE OF MANAGEMENT EDUCATION IN ENTRPRENEURIAL DEVELOPMENT Professor V. Venkata Ramana School of Management Studies University of Hyderabad, India vedulla@hotmail.com Prof. C.R. Rao Road, Gachibowli Hyderabad, India-500046 Urvashi Singh School of Management Studies University of Hyderabad, India

ABSTRACT Entrepreneurship is the back-bone of any economy. In the absence of competitive entrepreneurs a nation finds itself burdened with unemployment, low quality products and services and in general a low quality of life. In recent times we have witnessed a shift from family-led businesses to manager-led businesses. In addition to that a lot of first generation entrepreneurs have also started taking bold steps in establishing their enterprises based on market opportunities. The debate continues as to whether entrepreneurship can be taught, and whether entrepreneurial development can be achieved through management education. Investigating the merit of the arguments for and against this issue, we can conclude that management can help one develop his/her entrepreneurial capabilities. Many leading management Educational Institutions and Universities across the world have established separate centers with the main focus on Entrepreneurial Development. The development of curriculum for entrepreneurial development and teachinglearning methods in this area is crucial keeping in view the changes in technology and the market place. This area is likely to be even more significant in the coming years in the field of management education. INTRODUCTION The global economy of today is widely acknowledged as one in transformation to knowledge economy from the traditional manufacturing and services dominated economy. The role and relevance of educational system for entrepreneurship is widely recognized by industry, academia, economists and policy makers in the recent past. The educational system creates awareness of alternative career choices and broadens the horizon of individuals, equipping them with cognitive tools and enabling them to perceive and develop entrepreneurial opportunities. Moreover, the educational system can help people to develop qualities that are considered important for entrepreneurship (Reynolds, Hay and Camp, 1999). Skills and knowledge belong to critical factors of production. Enterprises can gain competitive advantage by implementing continual and on-going innovations and the managerial skills and knowledge are in the centre of this process of innovations.

309

AFBE Journal

Academic Papers

Joseph Schumpeter(1934), one of the most renowned scholars in the field of entrepreneurship held that an entrepreneur is someone who introduces new combinations of means of production. According to Schumpter entrepreneurship involves innovation reshaping the industrial structure, i.e., "creative destruction", and creating disequilibrium in the economic process. Another scholar Cantillon (1931) opined that the main role of the entrepreneur is to arbitrate, i.e., harmonize demand and supply, and allocate scarce resources to their most productive uses. With the progress in thought leadership in entrepreneurship, scholars like Kirzner (1973) focussed more on the perception of opportunities and the behavioral reaction to this perception. He proposes that alertness to opportunities is vital to understanding entrepreneurship. According to Shackle (1979) the perception of opportunities is an act of interpretation, and an entrepreneur is an individual endowed with imagination needed for attaching value or meaning to specific information. Different Perspectives Of Entrepreneurial Education It is quite interesting to note that during the review of different perspectives on entrepreneurship a distinction can be made between those researchers who emphasized on the importance of entrepreneurial traits or qualities and those focusing on the behavior or activities of entrepreneurs. The difference between the two perspectives can be understood as follows: The first perspective entrepreneurship is regarded as a set of personality characteristics, whereas in the second perspective behavior rather than traits is seen as the basis for distinguishing between entrepreneurs and non-entrepreneurs. Researchers who emphasized the trait approach argued that individual personality traits are a necessary ingredient for understanding the phenomenon of entrepreneurship because not all people become entrepreneurs under the same circumstances (Cromie and Johns, 1983). In this view entrepreneurship includes characteristics, such as perseverance, creativity, initiative, propensity to take risks, self-confidence and internal locus of control. Although the trait approached some importance it approach has been criticized by scholars, such as Gartner (1989) arguing that entrepreneurship research should focus on studying the behavioral aspects of entrepreneurship rather than personality traits. In addition researchers like, Amit, Glosten and Muller (1993) argue that entrepreneurial traits are difficult to observe ex ante and that they may not be unique to the entrepreneur. For instance, it is argued that the propensity to take risks may also be present with proactive managers. In addition, within entrepreneurship research there is the discussion whether entrepreneurs are born or made. Going by the assumption that entrepreneurship is inborn, Cunningham and Lischeron (1991) refer to the perspective of the Great Person School of Entrepreneurship. According to this school of thought the entrepreneur is considered to have an intuitive ability almost like a sixth sense and he or she is born with the required entrepreneurial traits. In contrast, there are scholars arguing that entrepreneurship can be developed or taught. Empirical evidence of the importance of education for the development of entrepreneurship with individuals is provided by Kourilsky and Walstad (1998), Kourilsky and Esfandiari (1997) and Kourilsky and Carlson (1996).

310

AFBE Journal

Academic Papers

It is widely acknowledged that fundamental knowledge in management is needed at initial stage of running an enterprise and also later during the development stage. At the beginning, the management of the enterprise is carried out by the sole founder/owner, who may normally perform all the actions related to doing the business. Problems arise when the enterprise is successfully expanding and the entrepreneur (usually still the founder and owner) is not capable of running it, due to lack of needed knowledge and managerial skills. With this handicap he/she cannot cover all areas of the enterprise, due to the expansion of the enterprise. He/she lacks the much needed managerial knowledge and skills of running the enterprise and further developing it. Managers of the enterprise should be generalist and gain basic skills and knowledge in managerial functions such as planning, organizing, leading and controlling. Managers also should have an overview of finance, marketing and market development, competitions and so on. If he/she does not pay enough attention to these issues, eventually he/she can not delegate responsibility for particular areas and will fail under the burden of undiscovered and emerging problems. These areas become with the growth of enterprise more complex and intricate and demand more attention. STEPS IN ENTREPRENEURSHIP The nature of the content that should lie at the core of entrepreneurship education and training has not kept pace with the accelerating case emerging for entrepreneurship education - especially in the education delivery community. In particular, many schools and curricula have adapted to the much better understood and structured nature of management education as part of attempts to tackle the more poorly understood goal of entrepreneurship education. Clearly entrepreneurship has to be different, or at least more than management; there is something distinct which reaches beyond the effective co-ordination of resources. The distinction may be characterized as: Opportunity recognition and evaluation Gathering and commitment of resources to pursue the opportunity The creation and operation of business venture to implement the business idea. Traditionally, such activities have been associated with the creation of a small business, but increasingly there is a recognition that these activities can applied in different contexts such as large corporate organizations or the not-for-profit sector. Opportunity Recognition And Evaluation It is the cornerstone of entrepreneurship. This is both an art and a science - blending observation, market insight, and adaptation - from which emerges both the identification of need in the marketplace and the idea for a service of product that meets that need at an acceptable price. Entrepreneurs have a knack for looking at the usual and seeing the unusual, at the ordinary and the extraordinary. Consequently, they can spot opportunities that turn the commonplace into the unique and unexpected, whether in establishing their own business or a new venture team in a large organisation. This combination of intuitive skills and applied knowledge can be taught and refined. Having distilled an opportunity, the would-be entrepreneur must be willing and capable of marshalling the resources to pursue that opportunity without any assurances of the outcome or rewards, i.e. in the presence of risk and uncertainty.

311

AFBE Journal

Academic Papers

Transformation Of The Idea The second area of skill and knowledge needed by the entrepreneur is therefore the ability to transform the idea into a viable plan and to be able to articulate and communicate that plan with enough conviction and passion in order to procure the resources needed to create the new enterprise. This range of abilities can also be greatly enhanced through effective education. Creation Of The Enterprise A third very important set of skills includes those needed to build a team and a whole organisation to deliver the product or service to the market which inspired the original recognition of opportunity. This development stage is usually associated with and related to the transition from start-up to a fully articulated and complex enterprise structure. However, obtaining resources and support of other internal and external stakeholders to create a venture may be more difficult for those establishing a social enterprise or working within a new product division within a larger organisation. In such cases, there is a difference between entrepreneurship and being entrepreneurial and as such, training interventions designed to foster entrepreneurship through a new venture creation framework may be wholly inappropriate. This is because entrepreneurship and management are highly inter-related in contexts such as the large organisation and entrepreneurship education programmes which do not focus on both skills sets may not be effective in fostering entrepreneurship. ENTREPRENURSHIP EDUCATION The most fundamental issue relating to enterprise education is addressing the question of whether entrepreneurship can be taught. Vesper (1990), in a survey of American professors, found that 93 per cent of respondents indicated that it could. Hills (1988) in his research survey of 15 leading university entrepreneurship educators, found that their main educational objective was to increase the awareness and understanding of the process involved in initiating and managing a new business. Fleming (1992) indicated from research undertaken that education increases awareness and by so doing facilitates the entrepreneurial process further. It is often argued that enterprise culture is developed naturally; however, due to the changing environmental conditions we cannot solely rely on this passing on of knowledge, resulting in the need to provide interventions to promote this culture. Education can be viewed as an important intervention. Studies conducted by researchers mentioned above suggest that the entrepreneurial role can be culturally and experientially acquired, and therefore influenced by education and training. This raises the question, as to whether the present educational system encourages the concept of an enterprise culture. Grant (1986) referred to the concern of a number of educationists that the educational system places too much emphasis on the acquisition of knowledge and the ability to analyze. Not enough is emphasis is placed on helping students acquire particular skills and to use knowledge. Researchers like McMullan and Long suggest that instructional methodology is not well suited to aspiring entrepreneurs; therefore the curriculum should acknowledge this.

312

AFBE Journal

Academic Papers

Entrepreneurship education has acquired a lot of significance in universities during the past four decades. In the sixties, less than ten universities in the USA were teaching in this field, 1990 there were already 400 universities in America active in entrepreneurship education and estimates today exceed 700 universities (Vesper and McMullan 1988; Hills and Morris 1998; Fiet 2001). Even in the Asian countries the pioneering institutes in management education have introduced specialized centers and courses for Entrepreneurial development. Many of these academic institutions have established majors on the post graduate level. Entrepreneurship centers have been founded to coordinate the broad array of activities, programs and resources within universities. Very seldom, schools pashed back out of entrepreneurship once they had entered. This growth in interest and funding is accompanied by an increasing demand for legitimization of entrepreneurship education at the university level. Consequently, the impact of education on the creation of future entrepreneurs and the link between university training and the success of the new ventures have been subject of much discussion in the academic community. A review of the entrepreneurship literature reveals contradictory findings (Gorman, Hanlon and King 1997). The results suggest differentiating between general business and specific entrepreneurship education when exploring the role of university programs. Many of the surveys conducted indicated that entrepreneurship education encourages graduates to start their own business. In an early study, Clark(1984) surveyed a sample of students of a medium-sized American university who were enrolled in an introductory entrepreneurship course. He found that almost 80% of these students were considering setup their own business. These plans were often turned into reality. Three out of four students who reported concrete plans for founding a company in fact started a new venture. Furthermore, 76% of the respondents stated that the entrepreneurship course had a large or very large effect upon their founding decision (Clark, Davis and Harnish 1984). McMullan, Long and Wilson report a high rate of new venture creation among MBA students who attended more than three entrepreneurship-related courses at a Canadian university (McMullan, Long and Wilson 1985). A review of a graduate enterprise program in the UK suggests that the program provided an incentive to more than half of the participants to start their business sooner than intended. Thus, this initiative had an enabling and accelerating impact on the graduates founding activities. Irish students who participated in a student enterprise award indicated that the initiative had avery important impact on their subsequent career choice (Fleming 1994). Ultimately, Vesper and McMullan could show that entrepreneurship courses help alumni to make better decisions in the start up-process (Vesper and McMullan 1997). A note of caution should be mentioned at this point: A large portion of the cited studies is explorative and based on the analysis of single courses or programs. Very seldom, the surveys include longitudinal data, control groups without entrepreneurship education experience or pre-tests prior to the exposure to courses. In addition, there is still a need for valid empirical measures of education characteristics and educational outcomes (Hills and Morris 1998). Yet, the great majority of empirical findings support the legitimization process of entrepreneurial education. Apparently, entrepreneurial aspiration and success can, in fact, be taught.

313

AFBE Journal

Academic Papers

According to some researchers, unlike entrepreneurial programs, general business management education has no significant influence on entrepreneurial propensity (Hostager and Decker 1999). The findings of a survey with business owners in India suggest that management education is not an important driver of entrepreneurial attitudes (Gupta 1992). Whitlock and Masters can even show that the interest in pursuing self-employment dissipates after visiting general business courses (Whitlock and Masters 1996). Chen at al. surveyed students in different business majors and showed that the number of management courses taken had no effect on entrepreneurial decisions (Chen, Greene and Crick 1998). The findings stress the need for education programs specifically designed to expand studentsknowledge and experience in entrepreneurship. The content and teaching methods have to be differentiated between entrepreneurship and traditional business courses (McMullan and Long 1987; Vesper and McMullan 1988).When education is linked with desirable behavioural outcomes, then some very close parallels can be drawn between it and entrepreneurship. The environment of the entrepreneur is different from conventional large organizations. The entrepreneur is concerned with the present and the future, and finding ways of creatively avoiding problems, or even anticipating them. Understanding is derived from personal experience, and learning is obtained through doing. Prominent researchers McMullan and Long argue that in order to provide effective entrepreneurial education, students should deal with ambiguity and complexity. They must learn how to find problems as well as how to design solutions, and should have substantial hands-on experience working with the small firm sector. McMullan and Long also note that because few ventures begin with a functionally differentiated structure in place at the outset, it is uneconomical to hire functional specialists. Management educators teach the functional format, finance, marketing, personnel, as if it were equally applicable to all ventures at all levels of development. Early stage ventures have the most problems; therefore they argue that entrepreneurship education needs to be differentiated more by stage of venture development, rather than by department or functional expertise. While it is perceived that entrepreneurship can be taught, it is critical to ensure quality teaching is implemented, and in doing this be aware of the barriers that exist.

HOW TO TEACH ENTREPRENEURSHIP? Research in the area of entrepreneurship education indicates that what business schools could teach in this area is related to a skill set, based on a platform of conceptual knowledge. A critical question here is: how can these skills and this mentality be conveyed to prospective entrepreneurs? The experience and research gathered in 1980s and 1990s suggests that it is difficult to acquire entrepreneurial skills, or indeed the mentality for entrepreneurship by conventional pedagogic routes. One of the pedagogic difficulties of teaching entrepreneurship stems from the complex and diverse range of entrepreneur-opportunity situations. For example, every entrepreneur has different opportunity costs and may pursue opportunities which vary greatly in terms of technology, innovation, risk, uncertainty, and financial implication. The social entrepreneur has set of different motivations and drivers to the university

314

AFBE Journal

Academic Papers

graduate wishing to start a bio-technology venture. Furthermore, the entrepreneurship process evolves constantly.A variety of pedagogical tools can be used in entrepreneurship education and training, such as lectures, readings, entrepreneurs testimonies, case analysis, case development, journal writing and computer simulations. Researchers have opined that it is important to identify entrepreneurial qualities because educators need a specific definition of what constitutes entrepreneurship as a starting point for designing educational programs. Defining entrepreneurship as a set of qualities enables a discussion on how these specific qualities can be developed in the educational system. On the basis of the work of several scholars within the field of entrepreneurship education the present section presents a set of entrepreneurial qualities to be included in entrepreneurship education. Few scholars have linked entrepreneurial qualities to education. The main exceptions are Cotton and Gibb (e.g. Cotton and Gibb, 1992; Gibb and Cotton, 1998; Gibb, 1998), Gasse (1985) and Kourilsky (1980, 1995). Gibb (1998, p. 5) refers to entrepreneurial core skills as those capacities that constitute the basic necessary and sufficient conditions for the pursuit of effective entrepreneurial behaviour individually, organizationally and societally in an increasingly turbulent and global environment. Drawing from the literature on the characteristics on entrepreneurship, Gibb (1998) argues that entrepreneurial skills that should be taught, include intuitive decision making, creative problem solving, managing interdependency on a knowwho basis, ability to conclude deals, strategic thinking, project management, time management, persuasion, selling, negotiation and motivating people by setting an example. These skills are based on several underlying qualities, such as selfconfidence, self-awareness, a high level of autonomy, an internal locus of control, a high level of empathy with stakeholders, especially customers, a hard working disposition, a high achievement orientation, a high propensity to take (moderate) risks and flexibility. An entire infrastructure of entrepreneurship courses, programs, teaching positions, endowed chairs, journals, and centers has emerged in U.S. institutions of higher learning since an entrepreneurship course was first offered to Harvard MBA students in 1947 (Katz, 2003). Evidence suggests that the same trend is taking place outside the United States (Vesper & Gartner, 1999). In parallel to this growth in academic infrastructures, a whole corpus of research literature has been developing at the interface of entrepreneurship and education (cf. Greene et al., 2004). This research has been reviewed and criticized before. Vesper (1982) invited scholars to conduct more systematic studies by classifying various program elements into dependent and independent variables. Block and Stumph (1992) encouraged scholars to consider students' needs and measure the impact of entrepreneurship learning, courses, and programs. Gorman et al. (1997) showed the need to distinguish research articles on the basis of the education markets that they focus on, whether "formal education students," "out-of-school individuals," or "existing businesses owners/managers." And Young (1997) called for the studying of cognitive elements such as mental models, schema development, and long- term memory enhancements. Traditional approaches to entrepreneurship education have been conceived in two separate encapsulated arenas: the university and the training organization. The university has provided cognitive, planning frameworks, and the training organization

315

AFBE Journal

Academic Papers

has taught, often informally, skills in applying theory to practice. Too often those individuals participating in entrepreneurship education and training programmes have been moving from one arena to another in sequential fashion. To cover a continuum of learning requires a better articulation and integration of business schools, technology parks and government agencies, as well as an orchestration of lecturers, seasoned entrepreneurs, consultants and financiers. A variety of pedagogical tools can be used in entrepreneurship education and training, such as lectures, readings, entrepreneurs testimonies, case analysis, case development, journal writing and computer simulations. However, evidence shows that practice by doing induces the highest retention rates. Students, who actually write a business plan, take part in a game where they have to make some decisions or even set up a real business venture will learn much more than those attending traditional classroom lectures. ENTREPRENEURSHIP EDUCATIONAL DELIVERY

Theory-Based Knowledge In order to generate theory-based knowledge, it is essential to ground entrepreneurship education on theoretical frameworks and empirical research findings. Students have to be encouraged to apply their theoretical and conceptual knowledge when interpreting text cases, when developing business plans and when implementing new venture projects. Good teaching will help students to use theories as a tool to answer practical questions (Fiet 2001). Experiential Learning And Real-World Experiences Involvement in hands-on projects of opportunity identification and new venture creation would be a central part of education programs. In this respect, business plans are an useful approach. They teach the application of theoretical concepts and academic knowledge to business reality (Kelmar 1992). Business plan development at MIT Entrepreneurship Center is supported by other experiential teaching and training activities such as idea competitions, warm-up start ups, industry projects and internships where students are integrated in new business creation of others. Knowledge About Innovative Opportunities Entrepreneurship is characterized by new combinations causing discontinuity. It is therefore fundamental to the subsequent formation of growth companies that the students have access to the forefront of technological development. Engineers and students in natural sciences have to be encouraged to work on technological problems and to emphasize on innovative opportunities. This work can be supported by training activities for opportunity identification (e.g. idea focus groups, contacts with inventors). Students in a business management major should be stimulated to productive interaction with students from technical majors.

CONCLUSION

316

AFBE Journal

Academic Papers

Entrepreneurship education and training have become significant in the delivery of management education. As this area is different from the traditional managerial functions it should primarily include process and action-oriented approaches. Students and would-be entrepreneurs effectively learn only if they take part in the process. Entrepreneurship education programmes should involve the participants through a dialogue based training methodology, rather than monologue, involving all students in knowledge creation. If the focus of entrepreneurship education is to provide knowledge and skills for the development of future entrepreneurs, then there is a need for action and experiential learning. And this learning process should ideally be embedded in the task environment of the individual or organization, by making the necessary changes in the curriculum and methodology. The approach must be multi-disciplinary. Discovering, evaluating and exploiting business opportunities requires a variety of knowledge and skills related to the technical, financial, legal, and market dimensions of the project. Therefore, an effective education programme will help the prospective entrepreneur to cope with the complexity and ambiguities of entrepreneurship. Such a programme will ideally draw on several disciplines and teaching methods in order to understand the process of sense making and how to learn to manage it with wisdom. In summary, we can conclude that while it is established that entrepreneurial education is necessary to encourage the future and existing entrepreneurs and there seems to be agreement in terms of how to develop entrepreneurial behaviours, there is a lack of consensus as to how to measure the outcomes from such activities particularly with how to define entrepreneurship education and training and how to develop a coherent body of thinking which can be used by training organisations and education institutions to encourage more entrepreneurial activity.

REFERENCES Briga Hynes, Entrepreneurship education and training introducing entrepreneurship into non-business disciplines, Journal of European Industrial Training 20/8 [1996] 1017 Curran, J. and Stanworth, J., Education and training for enterprise some problems of classification, education and policy research, International Small Business Journal, Vol. 7 No. 2, 1989, pp. 11, 22. Department of Management and Marketing, University of Limerick, Ireland Truelove, S., The Handbook of Training and Development, 2nd ed., Basil Blackwell, Oxford, 1995. Fleming, P., The role of structured intervention in shaping entrepreneurship, unpublished MBS thesis, 1992.

317

AFBE Journal

Academic Papers

Gerber, M. E. (2001). The E-Myth Revisited: why most small businesses dont work and what to do about it. New York: Harper Collins Grant, B., Capability, enterprise and entrepreneurship the vocational aspect of education, The Vocational Aspect of Education, Vol. 38 No. 100, 1986, pp. 55-66. Harrison, R. and Hart, M., Factors influencing new business formation: a case study of Northern Ireland, Environment and Planning, Vol. 15 No. 10, 1989, pp. 1395-413. Hills, G.E., Variations in university entrepreneurship education: an empirical study of an evolving field, Journal of Business Venturing, Vol. 3 No. 1, 1988. National agency for development of small and medium enterprises. (2005) Research of potential for entrepreneurial activity [Slovak version]. Bratislava: NARMSP Papula, J. (1995). Minimum of a manager: Profession that pays out [Slovak version]. Bratislava: Elita Ronstadt, R., The educated entrepreneurs: a new era of entrepreneurial education is beginning, American Journal of Small Business, Vol. 10 No. 1, 1985. Scott, M.F. and Twomey, D.F., The long term supply of entrepreneurs: students career aspirations in relation to entrepreneurship, Journal of Small Business Management, Vol. 26 No. 4, 1988, pp. 5, 14. Sexton, D.L. and J.D. Kasarda, 1991, The State of the Art of Entrepreneurship, Boston: P.W.S. Kent Publishing Co. Shackle, G.L.S., 1979, Imagination and the Nature of Choice, Edinburgh: Edinburgh University Press. Solomon, G.T., K.M. Weaver, and L.W. Fernald, 1994, A historical examination of small business management and entrepreneurship pedagogy, Simulation and Gaming 25 (3), 338-352. Storey, D.J., 1994, Understanding the Small Business Sector, London/New York: Routledge. Stumpf, S.S, R.L.M. Dunbar and T.P. Mullen, 1991, Developing entrepreneurial qualities through the use of behavioural simulations, Journal of Management Development 10 (5), 32-45.

Thurik, A.R., 1996, Small firms, entrepreneurship and economic growth. In: P.H. Admiraal (ed.),

318

AFBE Journal

Academic Papers

Small Business in the Modern Economy, Oxford: Basil Blackwell Publishers, 126152. Torrance, E.P., 1967, Non-test ways of identifying the creatively gifted. In: Gowan, J.C., G.D. Demos and E.P. Torrance (eds.), Creativity: Its Educational Implications, New York: John Wiley and Sons.

Vesper, K., Summary of EntrepreneurshipEducation Survey, Department of Management and Organisation, University of Washington, Seattle, WA, June, 1990.

Verheul, I. and A.R. Thurik, 2001, Start-up capital: 'Does gender matter?', Small Business Economics 16, 329-345. Verheul, I. and I. van der Kuip, 2002, Early development of entrepreneurial qualities: the role of initial education in theory and practice, Strategic Report, forthcoming, EIM Business and Policy Research: Zoetermeer. Vesper, K. H., 1980, New Venture Strategies, Englewood Cliffs, NJ: Prentice-Hall. Wadsworth, B.J., 1978, Piaget for the Classroom Teacher, White Plains, NY: Longman. Wadsworth, B.J., 1989, Piagets Theory of Cognitive and Affective Development, VA-Lite Plains, NY: Longman. Weaver, R.Y. and S. Henderson, 1995, Entrepreneurship in organisations. The Aviall studies: a model for corporate growth. In: Vesper, K.H. (ed.), Frontiers of Entrepreneurship Research, Wellesley, MA: Babson College, 652-666. Wennekers, A.R.M. and A.R. Thurik, 1999, Linking entrepreneurship and economic growth, Small Business Economics 13 (1), 27-55. Whiting, B., 1988, Creativity and entrepreneurship: how do they relate?, Journal of Creative Behavior 22 (3), 178-183. Wittrock, M.C., 1974, Learning as a generative process, Educational Psychologist 11 (2), 87-95. Wittrock, M.C., 1990, Generating processes of comprehension, Educational Psychologist 24 (4), 345- 376.

319

AFBE Journal

Discussion Papers

COMPREHENSIVE ASSESSMENT IN ECONOMICS EDUCATION Dr. Steven J. Balassi Saint Marys College of California, Moraga, United States of America sbalassi@stmarys-ca.edu ABSTRACT Assessment of student learning is an increasingly important trend in higher education. While faculty interest in assessment as a means of improving the educational process is important, to a considerable extent, the increased emphasis is the result of more stringent standards being imposed by accreditation agencies in an attempt to require educational institutions to better define specific student learning outcomes, demonstrate student learning, and use the results obtained in a cycle of continuing educational improvement. This paper proposes a model for assessing student learning in courses throughout the entire economics curriculum. This model is much more broad-based than assessment of student learning in the principles courses alone. The model proposed is sufficiently flexible so that it can be used, with perhaps only minor adjustments, by many economics departments as these departments work to implement a program of assessment as part of a culture of continuous improvement.. INTRODUCTION Overall, assessment should be thought of as a means of understanding the process of learning and how learning can be measured and improved. In effect, assessment moves away from the traditional emphasis on teaching and places greater emphasis on student learning and demonstration of the outcomes of the learning process. The process of assessment is an essential element in any systematic, objective evaluation of individual students, individual courses, multiple sections of individual courses, programs, or institutions as a whole, and as an additional, objective means of assessing instructors. Questions to be asked as part of any assessment process include: 1) What are students expected to learn? 2) Are students learning what they are expected to learn? 3) How can students learning be demonstrated? 4) How can students learning be improved? The goal of this paper is to develop a model for assessing student learning in courses throughout the economics major. The model is based on the cognitive categories incorporated in the Test of Understanding in College Economics (TUCE) that is used to assess student learning in Principles of Economics courses. While the TUCE is a useful tool for use in assessment of student learning in Principles courses, it is insufficient for a broad-based assessment process. Assessment is not a one-time activity but a continuous process. The ultimate goal of assessment is to identify strengths and weakness both in student learning and in teaching. A culture of continuous assessment is imperative for improving student learning and teaching. The end result of this paper is to provide a framework for a program of assessment that can be implemented by Economics departments as part of creating a culture of continuous improvement.

320

AFBE Journal

Discussion Papers

LITERATURE REVIEW The literature review is divided into two sections. The first section provides background information about the TUCE. The second section focuses on accreditation and the assessment of student learning outcomes. TUCE Developed more than 40 years ago by the Joint Council on Economic Education, the TUCE has been used extensively by instructors and researchers in the economics profession. The test was designed to serve as a measuring instrument for controlled experiments in the teaching of introductory economics at the college level and to enable instructors of particular introductory courses to compare the performance of their students with that of a sample of students in other colleges and universities. Broad content categories are incorporated into the TUCE as a means of insuring adequate coverage of the basic elements of typical college principles courses so that the total raw score can be deemed to measure general understanding of basic economic principles and discriminate among individual students on the basis of their ability to understand and apply selected concepts and principles. (Saunders, 1991, p.2). The comparative effectiveness of courses in achieving the objectives measured by the TUCE can be ascertained by comparing the scores of students with the percentile distributions of the scores of students used to develop norming data for the TUCE. While the TUCE was not designed to evaluate the achievement of individual students, the test can be used in this way. The TUCE-4 for both microeconomics and macroeconomics consists of 30 multiple choice questions covering six content categories and representing three cognitive categories. Topics included in each of the six microeconomic and macroeconomic content categories are shown in Appendix A and B. As noted by Saunders (1991), all editions of the TUCE have sought to emphasize the application of basic concepts and principlesThe three broad cognitive categories used to classify questions on the TUCE are: Recognition and Understanding (RU); Explicit Application (EA); and Implicit Application (IA). Characteristics of each of these cognitive categories are contained in Appendix C. One limitation to using the TUCE is that it is structured using only multiple-choice questions and students perform better on a post-course multiple-choice test when they take multiple choice exams throughout the course instead of essay exams (ONeill 2001). However, ONeill finds the type of exam does not impact students attitude towards economics or the decision to complete the course. Accreditation Secondary education institutions as well as institutions of higher education in the United States are accredited by one of six accrediting associations. Since Saint Marys College of California is accredited by the Western Association of Schools and Colleges (WASC), for purposes of this paper, WASC accreditation and assessment information is used. Accrediting and assessment guidelines for other accrediting associations are similar. The accreditation process is intended to (WASC 2008): 1. Assure the educational community, the general public, and other organizations and agencies that an accredited institution meets the Commissions Core Commitments to Institutional Capacity and Educational Effectiveness and has been reviewed under Commission Standards;

321

AFBE Journal

Discussion Papers

2. Promote institutional engagement on issues of educational effectiveness and student learning; 3. Develop and share good practices in assessing and improving the teaching and learning process; 4. Develop and apply standards to review and improve educational quality and institutional performance, and validate and revise these standards through ongoing research and feedback; 5. Promote within institutions a culture of evidence, through which indicators of performance are regularly developed and data are collected to inform institutional decision making, planning, and improvement; 6. Develop systems of institutional review and evaluation that adapt to institutional context and purposes, build on institutional evidence, support rigorous reviews, reduce the burden of accreditation, and add value to the institution; 7. Promote active interchange of ideas among all institutions to improve institutional performance, educational effectiveness, and the process of peer review. Maintaining accreditation is a necessity for educational institutions. If an institution were to lose its accreditation, its reputation would suffer dramatically and there would, most likely, be a dramatic drop in enrollments. As part of the accreditation process, WASC uses four general standards. These institutional standards are: 1. Defining institutional purposes and ensuring educational objectives. 2. Achieving educational objectives through core functions. 3. Developing and applying resources and organizational structures to ensure sustainability. 4. Creating an organization committed to learning and improvement. Each of these standards has several subcategories. Each subcategory has specific criteria for review. The criterion for review provides the details for what an institution is expected to do to maintain accreditation. The following is a partial list of the criteria for review to emphasize the importance of assessment and student learning: 1.2 The institution has a system of measuring student achievement, in terms of retention, completion, and student learning. 2.3 The institutions student learning outcomes and expectations for student attainment are clearly stated at the course, program and, as appropriate, institutional level. These outcomes and expectations are reflected in academic programs and policies, curriculum, advisement, library and information resources, and the wider learning environment. 2.4 The institutions expectations for learning and student attainment are developed and widely shared among its members, including faculty, students, staff, and where appropriate, external stakeholders. The institutions faculty takes collective responsibility for establishing, reviewing, fostering, and demonstrating the attainment of these expectations. 3.4 The institution maintains appropriate and sufficiently supported faculty and staff development activities designed to improve teaching and learning, consistent with its institutional objectives.

322

AFBE Journal

Discussion Papers

4.4 The institution employs a deliberate set of quality assurance processes at each level of institutional functioning, including new curriculum and program approval processes, periodic program review, ongoing evaluation, and data collection. These processes include assessing effectiveness, tracking results over time, using comparative data from external sources, and improving structures, processes, curricula, and pedagogy. 4.6 Leadership at all levels is committed to improvement based on the results of the inquiry, evaluation and assessment that is used throughout the institution. The faculty takes responsibility for evaluating the effectiveness of the teaching and learning process and uses the results for improvement. Assessments of the campus environment in support of academic and co-curricular objectives are also undertaken and used, and are incorporated into institutional planning. What an institution needs to accomplish in regards to assessment for accreditation can be summed up as: Clearly stated intuitional, program, and course learning objectives. A college wide system for creating, measuring, assessing, and improving student learning. A culture committed to learning and improvement by the faculty and the entire institution. A commitment for resources to obtain the above.

Analysis and Limitations of Using the TUCE for Assessment As noted above, the TUCE has been used widely in assessing student learning in Principles of Economics courses. However, the purpose of this paper is to develop a model for assessing student learning in courses throughout an economics curriculum and not just in Principles courses. The following is a brief consideration of the issues involved in using a TUCE-only assessment model: Only applicable for Principles courses. The TUCE was created for principles of macro- and microeconomics courses. While it is a useful tool for those two courses, much more is needed for assessment purposes of courses throughout the economics curriculum. There are many more lower- and upper division courses students must take in order to complete the economics major. These other courses must be part of any comprehensive assessment model. Current WASC assessment guidelines state that every section of each course in a degree program should be assessed once every five years. Because the TUCE is for principles courses only, it is insufficient for an entire program. Strengths of the TUCE and ways to incorporate it in a more widespread assessment process are explored later in this paper. Time consuming. Use of the TUCE pre- and post-test procedure requires a considerable amount of class time and resources for analysis. So, while the procedure is useful, it is not advocated for use in each Principles course each term. Rather, the procedure might be thought of as a means of periodic assessment of courses and programs as well as comparison of results over time and across instructors. The procedure could also be used for specific courses in which specific problems have been identified and follow-up action is required. A significant advantage of the TUCE 323

AFBE Journal

Discussion Papers

is that it provides an objective evaluation of student performance and measures outcomes that can be used as a diagnostic and developmental device for use by both instructors and administrators. Potential for cheating. Using the TUCE pre- and post-tests on a regular basis could lead to cheating by students. With the TUCE used as a major portion of the final exam, students may eventually determine that a substantial portion of the final exam is the same as the pre-test and find ways to cheat. Changing testing methods and exams is one way of preventing cheating. Reliance on multiple-choice questions exclusively. There are several limitations to using a multiple-choice exam for testing and assessment. The first is that an instructor might not want to offer multiple-choice questions exclusively for a final exam. Instructors might add other types of questions to the TUCE to comprise a final exam but this possibility is limited due to time restrictions since the TUCE itself requires considerable time for completion, leaving relatively little time for other types of questions. Another reason instructors might not want to use multiple-choice questions exclusively is that some students do not perform as well on this type of exam, and consequently results do not accurately measure student learning. Because of this, many instructors use exams which include multiple-choice, true/false, short-answer, and essay questions. The second limitation has to do with accreditation and the breadth of assessment. Use of multiple-choice questions may not provide an adequate means of assessing an overall program. Assessment should include a variety of types of assessment and preand post-test multiple-choice questions are just one type of direct assessment. Direct assessment is an observation of coursework (papers, projects, etc.). Indirect assessment is an observation of work outside of the classroom (for example: alumni or employer surveys). Standardized test. While standardized tests have many positive traits, there are negative aspects of such tests. As noted by the Center of Public Education (Mitchell 2006): 1. Teachers can teach to the test. 2. Can decrease time in other important economic areas to focus only on the TUCE. 3. Standardized tests put additional stress on students and teacher alike. 4. There could be testing bias (diversity, language difference, cultural bias, testwiseness, gender, socioeconomic status, etc.). 5. Most standardized tests are multiple choice. This focus on multiple choice format "limits teaching and learning to knowledge, at the expense of skills and abilities, such as critical thinking, creative thinking, and problem solving". 6. Dishonesty and different conclusions. In general, the TUCE can be a valuable tool for use by faculty as well as departmental and school administrators as a means of assessing student learning. Results can be used both as a means of ascertaining how well students are doing in meeting course learning goals and also as a means of identifying specific content categories and cognitive categories for which instructors need to devote additional class time and attention. However, departments may want to consider modifying the TUCE to create standardized tests designed to better fit the specific subject matter taught in each Principles course at a specific institution. One downside of doing this is that student performance may not be compared with results from a national sample of students. A BROADER ASSESSMENT MODEL

324

AFBE Journal

Discussion Papers

Based on the challenges and limitations noted, a broad-based model for assessing all courses in an Economics Departments curriculum is proposed as follows: Develop Program Learning Objectives The first step in the assessment process is to define Program Learning Objectives (PLOs). Many institutions have learning objectives which students should have obtained upon graduation. In addition, specific degree programs should have defined PLOs which articulate those learning objectives that majors in each department should achieve prior to graduation. Institutional and departmental learning objectives should be in alignment. Finally, each course in a degree program should have student learning outcomes (SLOs) which support the programs overall learning objectives when brought together. SLOs are specific learning outcomes which a student should obtain on completion of a specific course. There are usually 2-3 broad-based SLOs per course. At St. Marys College, the Program Learning Objectives we created are as follows: 1. Demonstrate the ability to explain core economic terms, concepts, and theories 2. Demonstrate the ability to employ the economic way of thinking 3. Apply economic theories and concepts to contemporary and historical social issues, as well as formulation and analysis of policy 4. Demonstrate the ability to compare and contrast competing views within economics with a critical thinking perspective, an open-mind, and a respect for diversity 5. Demonstrate the ability to collect, analyze, and interpret data Each course must have specific SLOs which, when combined with other courses, rollup to PLOs. Questions on each TUCE are categorized into six content categories and three cognitive categories. Although we recognize the six content areas are important, the SLOs need to be at a higher and broader level. The proper level for a SLO should be one of the subsets of the cognitive categories. Below are the SLOs we have chosen along with their respective cognitive category: SLO 1- Recalls or recognizes specific economic rules. Recognizes and understands basic terms, concepts, and principles (RU) SLO 2- Applies economic concepts needed to define or solve a particular problem when the concepts are explicitly mentioned. Explicit application of basic terms, concepts, and principles (EA) SLO 3- Distinguishes between correct and incorrect application of economic concepts which are not specifically given. Implicit application of basic terms, concepts, and principles (IA) In order to make our assessment as broad as possible, we chose a SLO from each of the three cognitive categories. The advantage of choosing one SLO from each cognitive category allows for flexibility going forward. We could use other SLOs or give a cognitive category more weight. We have found that we prefer the first SLO for undergrad courses and SLOs #2 and 3 for upper-division courses. This is constantly changing based on who is teaching the course and our program/college objectives. The content categories will play an important role in our assessment model. The content categories will consist of the questions which will make the pre- and post-test. Non-Principle Courses One of the goals of the new assessment model is to create an assessment tool which can be used in many courses by every economics instructor. In order to do this, we needed a much smaller pre- and post-test. By having a smaller pre- and post-test, assessment will not be as time-consuming and cumbersome and not have a significant

325

AFBE Journal

Discussion Papers

adverse impact on the normal flow of the course. Another benefit of using only 2-3 questions per SLO (6-8 questions in total) is that the test questions periodically can be changed to prevent cheating. The proposed assessment plan is as follows: 1. For each SLO, 2-3 questions will be created. 2. The questions will be administered the first day of class as an ungraded practice quiz. 3. The same questions will be imbedded in a future quiz, midterm, or final exam. 4. The percentage change from the pre- to post-tests will be calculated for each SLO along with an overall improvement score. One of the benefits of using only 6-8 TUCE questions for assessment is that it also allows for other types of assessment to be used. Using only a multiple-choice pre- and post-test would not be the best way to assess an entire program and would fall short of accreditation standards. Because each section of each course needs to be assessed at least once every five years, other methods are needed. Many courses in economics programs incorporate student papers as part of the course requirements. In these courses, copies of the papers are to be obtained from the instructors. A team of two or three instructors should read the papers and evaluate how well students have achieved specific SLOs. To aid in this form of assessment, a rubric is to be created. This rubric will rate the various levels of understanding a student may demonstrate and help achieve consistency among readers of the papers. Along with creating an assessment plan for continuous improvement, we wanted to make this a manageable process. Each course in the economics program will need to be assessed. In order to assess a course, specific SLOs need to be created and included in the syllabus. When we were choosing SLOs from the TUCE, we were also thinking about every course in the program. Our three SLOs can be used in each economics course because they are broad-based. What will differ among courses are the specific questions. Here is an example of how that could work: SLO #1- Recalls or recognizes specific economic rules. Course: Principles of Microeconomics (lower division) Question: What happens to demand when the supply curve shifts to the right? Course: Macro Economic Theory (upper division) Question: Using the IS-LM model, what happens when the price level rises? By using the same SLOs for each course, instructors can focus on what they want to teach. These SLOs are broad enough to give instructors flexibility and we do not have to create new SLOs for each course. Also, these SLOs can be used for each of the economic departments five PLOs. As part of an Economics Departments longer-term assessment process, goals for improvement in students improvement in each of three cognitive categories should be established. Progress in meeting such goals can be monitored as part of the ongoing assessment process increasingly being requested by institutional administration as well as accrediting agencies. For SLOs and overall scores which do not meet the minimum goals, an improvement plan should be implemented. CONCLUSION Assessment of student learning is not a one-time process but one which is continuous. The goal of assessment is to identify strengths and weakness in teaching and learning. Once strengths and weaknesses have been determined, faculty members can begin to

326

AFBE Journal

Discussion Papers

make changes to teaching methods and further refine assessment techniques. A culture of continuous assessment is imperative for student learning and improvement. Information obtained from this type of analysis can provide useful information to faculty members. The results should help them better understand a) what students are learning and how well they are achieving the learning goals for courses; b) specific areas of course content or specific cognitive areas for which students performance is good and/or higher than their overall performance as well as poor and/or lower than their overall performance; and c) how well faculty are communicating with and motivating students. This paper proposes a model for assessing student learning in courses throughout the entire economics curriculum. This model is much more broad-based than assessment of student learning in the principles courses alone. The model proposed is sufficiently flexible so that it can be used, with perhaps only minor adjustments, by many economics departments as these departments work to implement a program of assessment as part of a culture of continuous improvement.

REFERENCES Courtney, Boatman, and Lee. 2008. Using Standardized Testing to Assess Student Learning in Introductory Economic Courses. Gulf Coast Economics Association presentation. November 6-7. Mitchell, Ruth. The Center for Public Education. February 15, 2006. http://www.centerforpubliceducation.org/site/c.kjJXJ5MPIwE/b.1501925/k.C980/The _nature_of_assessment_A_guide_to_standardized_testing.htm#t5a ONeill, Patrick B. Spring 2001. Essay versus Multiple Choice Exams: An Experiment in the Principles of Macroeconomics Course. American Economist 45(1), pp. 62-70. Saunders, P. 1991. Test of Understanding in College Economics: Examiners Manual for Third Edition. New York: Joint Council on Economic Education. Walstad, W. B., Watts, M. W., & Rebeck, K. 2007. Test of Understanding in College Economics: Examiners Manual for Fourth Edition. New York: National Council on Economic Education. Western Association of Schools and Colleges. 2008. Handbook of Accreditation.

327

AFBE Journal

Discussion Papers

Tables and Appendixes APPENDIX A Microeconomic Content Categories on the TUCE 4 A. The Basic Economic Problem (scarcity, opportunity cost, choice) B. Markets and Price Determination (determinants of supply and demand, utility, elasticity, price ceilings and floors) C. Theories of the Firm (revenues, costs, marginal analysis, market structures) D. Factor Markets (wages, rents, interest, profits, and income distribution) E. The (Microeconomic) Role of Government in a Market Economy (public goods, maintaining competition, externalities, taxation, income redistribution, public choice) F. International Economics (comparative advantage, trade barriers, exchange rates)

Source: Walstad, Watts, and Rebeck (2007)

328

AFBE Journal

Discussion Papers

APPENDIX B Macroeconomic Content Categories on the TUCE - 4 A. Measuring Aggregate Economic Performance (GDP and its components, real vs. nominal values, unemployment, inflation) B. Aggregate Supply and Aggregate Demand (potential GDP, economic growth and productivity, determinants and components of AS and AD, income and expenditure approaches to GDP, the multiplier effect) C. Money and Financial Markets (money, money creation, financial institutions) D. Monetary and Fiscal Policies (tools of monetary policy, automatic and discretionary fiscal policies) E. Policy Debates (policy lags and limitations, rules vs. discretion, long run vs. short run, expectations, sources of macroeconomic instability) F. International Economics (balance of payments, exchange rate systems, openeconomy macro) Source: Walstad, Watts, and Rebeck (2007)

329

AFBE Journal

Discussion Papers

APPENDIX C Definitions of Cognitive Categories Used to Classify Questions on the TUCE - 4 (RU) Recognizes and Understands Basic Terms, Concepts, and Principles 1.1 Selects the best definition of a given economic term, concept, or principle 1.2 Selects the economic term, concept, or principle that best fits a given definition 1.3 Identifies or associates terms that have closely related meanings 1.4 Recalls or recognizes specific economic rules, e.g., an individual firms profit is maximized at the level of output at which marginal cost equals marginal revenue (EA) Explicit Application of Basic Terms, Concepts, and Principles 2.1 Applies economic concepts needed to define or solve a particular problem when the concepts are explicitly mentioned 2.2 Distinguishes between correct and incorrect application of economic concepts that are specifically given 2.3 Distinguishes between probable and improbable outcomes of specific economic actions or proposals involving no unstated assumptions 2.4 Judges the adequacy with which conclusions are supported by data or analysis involving no unstated assumptions (IA) Implicit Application of Basic Terms, Concepts, and Principles 3.1 Applies economic concepts needed to define or solve a particular problem when the concepts are not explicitly mentioned 3.2 Distinguishes between correct and incorrect application of economic concepts that are not specifically given 3.3 Distinguishes between probable and improbable outcomes of specific economic actions or proposals involving unstated assumptions 3.4 Judges the adequacy with which conclusions are supported by data or analysis involving unstated assumptions

Source: Walstad, Watts, and Rebeck (2007) APPENDIX D Economics Departments 5-Year Assessment Plan Timeline 2007-2008 Assessment Year

330

AFBE Journal

Discussion Papers

Principles of Microeconomics (30 question TUCE exam used for pre- and post-tests) - 4 Instructors covering 7 sections, 178 students were assessed Principles of Macroeconomics (30 question TUCE exam used for pre- and post-tests) - 2 Instructors covering 4 sections, 54 students were assessed 2008-2009 Analysis and Planning Year Richard Courtney, Kara Boatman, and William Lee wrote, Using Standardized Testing to Assess Student Learning in Introductory Economic Courses. This paper detailed the proceeding years TUCE assessment results and compared them to national averages. They presented this paper at the Gulf Coast Economics Association teaching conference November 6-7, 20008. Summary of the results presented in their paper: Microeconomics- Overall student improvement was 17.2% at St. Marys College vs. the national average of 11.3%. Macroeconomics- Overall student improvement was 27.3% at St. Marys College vs. the national average of 14.6% 1. The 5-year Economics department review was completed. The six major improvements to the assessment process for 2009-2010 are: 2. Program Learning Objectives were defined. 3. Student Learning Outcomes were defined (see next page). 4. We defined the improvement standard at a minimum of 11.3% for microeconomics and 14.6% for macroeconomics (see next page). 5. We will be assessing an upper division course. 6. In addition to pre- and post-tests, we will analyze student papers. 7. Using the entire TUCE test is not realistic. A shorter pre- and post-test will be created and administered for principle courses. 2009-2010 Assessment Year Obtain results from new assessment procedure. There will be three courses used instead of two. In addition to pre- and post-tests, term papers will be included in the analysis. 2010-2011 Analysis and Planning Year Analyze results from prior year and make improvements. Each course in the economics major needs to be assessed on a 5-year rotation. Every section of the course should be assessed during the courses assessment year. 2011-2012 Assessment Year Implement changes from 2010-2011 APPENDIX E Student Learning Outcomes for Economic Courses These three Student Learning Outcomes (SLOs) were obtained from the Test of Understanding in College Economics: Examiners Manual for Fourth Edition (Walstad, Watts, and Rebeck 2007). The SLOs are divided into three cognitive categories. The cognitive categories are listed below each SLO in italic. These SLOs

331

AFBE Journal

Discussion Papers

are broad enough and address each PLO, so that they can be used in every economics course. Each course will have a different assessment questions focusing on what the course teaches. SLO #1- Recalls or recognizes specific economic rules. Recognizes and understands basic terms, concepts, and principles (RU) SLO #2- Applies economic concepts needed to define or solve a particular problem when the concepts are explicitly mentioned. Explicit application of basic terms, concepts, and principles (EA) SLO #3- Distinguishes between correct and incorrect application of economic concepts which are not specifically given. Implicit application of basic terms, concepts, and principles (IA) Assessment plan: 1. There will be two or three questions created for each of the three SLOs. 2. The questions will be administered the first day of class as an ungraded practice quiz. 3. The same questions will be imbedded in a future quiz, midterm, or final exam. 4. The percent change from the pre- to post-tests will be calculated for each SLO and an overall improvement score. Goal: Each SLO and the overall SLO score should have an aggregate improvement of, at least, 11.3% for microeconomics and 14.6% for macroeconomics over the course of a year. For SLOs and overall scores under the above percents, an improvement plan of action will be completed.

332

AFBE Journal

Book Reviews

BOOK REVIEW Title: Small Farmers Secure Food: Survival Food Security; the Worlds Kitchen & the Critical Role of Small Farmers Author: Dr. Lindsay Falvey Publisher: Thaksin University Press Year: 2010 Cost: USD$25:00 ISBN: 978-974-474-023-6 Reviewer: Dr. John Barnes, AFBE Rating: ****

Review: This slim volume of just eight chapters will prove invaluable to academics and all who are interested in food security whether they are faculty members or students at the graduate and post graduate levels or concerned citizens from any walk of life. As the back leaf of this book mentions Professor Lindsey Falvey has worked in international agriculture for more than fifty years He has led Australias largest faculty in agriculture as Dean and CEO at the Melbourne University and advised all major development agencies and several governments. As a Fellow of the Academy of Technological Sciences and Engineering and a Life Member of Clare Hall at The University of Cambridge. Dr. Falvey has three doctorates all relating to agriculture, for his international contributions as do many of the honors bestowed on him.

The volume comprises eight chapters some of moderate length others quite short but all important to the title topic. The book is arranged as follows: Acknowledgements of the continuing past Feeding Rome Feeding the World. Here professor Falvey contemplates ancient Rome and how that civilization planned and sought to manipulate nature to obtain a stable supply of food to feed its citizens and armies. He does this from the site of Pliny the Youngers villa overlooking Lake Como. Chapter 1 Introductory Words comprises a little over two pages and can be summarized in the opening paragraph This is a simple book. It argues for a return to two critical values in international development, the securing of food for a minimal level of existence and acknowledgement of the vital role of small farmers in that basic level of food security. (Falvey, 2010, 1)

333

AFBE Journal

Book Reviews

Chapter 2 Food Farmers and Fallacy comprises thirty-one pages and covers fifteen sections among them: Secure Food Producers; False Security; Where Did We Go Wrong?; (Here Falvey lays the blame not a countries and their goverments but at our own feet. i.e. those of the scientist who have developed the methods necessary to prevent or overcome the difficulty of food shortage but who have permitted political impediments to prevent or weaken their implementation) A Short Review of Economics; Common Needs, Uncommonsense; (this reminds me of a book of required reading for Victorian (Australia) primary school students from the 1960s Unocommon Common Sense; Re-Integrating Economics; Rights to Food; Un-Free World Trade; Food as a Commodity; Commoditization leads to Speculation; Lessons of the Recent Past; Life and Death Risks; Supply and Demand Demand; Policy Approaches. All compelling reading.

Chapter 3 Securing Enough Food to Survive comprises twenty-six pages and includes the nine sections: Rediscovering Food Security; Forgotten Food; Forgotten Famines; Fundamental Knowledge; Food Crises and Foreign Aid; International Approaches; Variables in Food Security; Food Reserves; Food Security and Recent Crises; Informed Policy. This chapter come with many telling simple charts and tables to illustrate its message. It is interesting that as this reviewing is being written this Thailand (the worlds largest rice exporter plans to reduce its rice production permitting South Vietnam to assume the dominant export position in the world rice market. Chapter 4 Forgotten Food Producers; Small Farmers comprises nineteen pages and includes the following sections: Billions of Third-World small Farmers; Correcting the Bias; Small Farmer Advantages; Awakening to the Continued Role; Challenging World Views; Shifting the Paradigm; Towards a Small Farmer Friendly Policy. Like the previous chapter this one uses diagrams to illustrate its message including one on page 77 which illustrates the process from subsistence to commercialization of small farmers.

Chapter 5 Why Bite the Hand that Feeds? comprises thirty-five pages and includes the following sections: Mess and Confusion; Economic Development Pathways; The Arrogance of Ignorance; Gutenbergs Legacy of Ignorance; We Know Best Free The World Trade; Let them Eat Brioche; Non-Revisionist History; The State of Agricultural Science; Institutions Marginalize Small-Farmers; Changing Emphases in Food Security; Conjuring up Wisdom. This chapter comprises several bite sized lessons in agricultural development and international economics.

Chapter 6 Good Governance Starts with Food Security comprises thirty-four pages and includes the following sections: Why Agricultural Planning Fails; Causes of Policy Void; What is Good Governance? Good Governance of Food; Dissipated Security Weak Governance; Good Governance Absence of Conflict; Fiat or Fantasy; Rich Country Governance; Rich Country Contributions to Food Security. I will leave it to the reader to read the riveting opening paragraph of this chapter. Much like the opening of the first chapter Professor Falvey pulls no punches and

334

AFBE Journal

Book Reviews

drives home the message with a clarity and economy of words that many readers will find refreshing. Chapter 7 From Criticism to Action: Refocusing on Small Farmers and Food Security comprises thirty-nine pages and includes the following sections: An old Argument; Revaluing a National Asset; Writing-off the Part Line; Watering Down Dry Messages; Small Farmer Irrigation; Focusing Research; Making Extension Practical; Letting Small Farmers Develop Privately; Skills not Dills; Small Farmers and Innovation Science; The Personal Touch of the Small Farmer; Credit Where Credits Due; No One Recipe. This chapter revisits the message in chapter four which considered small farmers as the forgotten majority of the producers of the worlds staple food for survival. In this second last chapter a practical view is taken of reorienting development agencies to focus on small farmers and security in survival foods. (Falvey, 2010, p157)

Chapter 8 Practical Food Security From Small Farmers comprises just fifteen pages and includes the following sections: The Human Plague; Farm Size and World Hunger; Revising Present Views; Future Food; Updating Our World View. Following this final chapter is single page poem: First Food which is followed by two pages of selected acronyms and a single page listing ten other books also written by the Professor Falvey.

335