SMR Vol 34 No 2, 2012

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Home > Publications > Singapore Management Review > SMR Vol 34 No 2, 2012

 SMR Vol 34 No 2, 2012

EVA Reporting in India

Dr Sandeep Goel

Accountants and investors around the world, over the last two centuries, are fighting to know the correct measure to determine the financial value of a company. They have used many techniques to assess the value of a company. However, they may not be sure which one is best. This study highlights the importance of Economic Value Added (EVA) when valuing the financial performance of a company. It attempts to analyse the EVA reporting practices of Indian companies (constituents of Sensitivity Index in Bombay Stock Exchange, SENSEX) with respect to value creation for shareholders. It has been found that there are few companies in SENSEX which are reporting EVA. Companies which are reporting positive EVA have grown at a faster pace as compared to SENSEX. The worst performance has been observed in companies that have reported negative EVA.

Keywords: EVA (Economic value added), Profit after tax (PAT), Weighted Average Cost of Capital (WACC), Return on Equity (ROE), Constituents of Sensitivity Index in Bombay Stock Exchange, SENSEX

Task Interactions and the New Media—Does More Frequent Interaction Contribute to Greater Satisfaction with the Media?

Dr Payal Mehra

The use of new media in organizational communication has raised concerns regarding workplace interactions. In India, a collectivist mentality drives the social fabric of life; therefore there is a greater preference for face-to-face communication in comparison to chat, video-conferencing, E-mail, and others. This empirical study in the domain of socio-psychological approach to computer mediated communication (CMC) provides insights on the impact of collaborative techniques on intra-organizational communication, media choice, and task performance in employees working in listed companies in India. It moves beyond comparative media studies to examine the interactions supported by these media. It attempts to answer the following questions: Is online interaction considered favorable in comparison to the more familiar face-to-face interactions at the workplace? How frequently is CMC media utilized to conduct the various types of interactions? Does more frequent interaction amongst participants contribute to satisfaction with the media? Findings indicate that by and large, employees respond favorably to the new media. If the CMC modes are used frequently enough, they lend themselves to greater media satisfaction on task dimensions. The study concludes that in India, non-task interactions are a discriminating factor in the perception of member satisfaction or dissatisfaction with a media.
Keywords: Task interactions; non-task interactions; sharing; media choice; media satisfaction.

Critical Innovation Characteristics, Customer Focus, and Sustainable Company Performances—An Empirical Study of Business Firms in Malaysia

Dr Fazli Idris

This paper examines the relationship between critical innovation characteristics, customer focus, and performance of companies. The instrument to measure the two exogenous constructs is developed and found to be reliable as the Cronbach Alpha reading is considered acceptable. The model proposes that critical innovation characteristics influences company performance through customer focus. Using a structural equation modeling procedure in AMOS, the relationships of latent variables are tested and it is found that the model fits the data. Interpreting results of the standardised regression weights, the effect of critical innovation characteristics on customer focus is considered high (score of 0.746). Secondly, the effect of customer focus on company performance is moderate (score 0.446). However, the score for the effect of critical innovative characteristics on company performance is only 0.186. Hence, it is appropriate to suggest that critical innovation characteristics alone have a weak influence on the performance of a company but could be enhanced through customer focus.

Keywords: Critical innovation characteristics, customer focus, structural equation modeling.

Bribery and Corruption—A Comparative Study between Australian and Malaysian Managers

Dr Michael Segon, Mr Chris Booth and Dr Timothy O'Shannassy

Bribery can be seen as an illegal or unauthorised transfer of money or an in-kind substitute as an inducement34 . Ashforth and Anand7 argue that all organisations have the potential for corruption which if accepted can result in the normalisation of the practice. Behaviour that has become embedded and seen as permissible or even desirable is regarded as normalised. These behaviours are then passed on to successive organisational members under the guise of normal practice.

This paper reviews the literature pertaining to the normalisation of corrupt behaviour and the extent to which managers are aware of and take action to report such practices . It presents the findings of a survey of over 100 practicing managers from Australia and Malaysia that identifies their awareness of unethical practices and what they would do if they were to offer or receive an offer to engage in such practices. A discussion and conclusions will then be drawn regarding the extent of normalisation of corruption in Australian and Malaysian business organisations.

The Relationship between National Culture and TMT Demographic Heterogeneity

Glenn A Gerecke, PhD and Garvey House, PhD

A lot of work has been done by management scholars on the relationship between Top Management Teams (TMT) demographic heterogeneity, TMT social processes, and corporate results. While we have been told in the literature that TMT member selection has not been mere coincidence, we have found limited studies on the antecedents of TMT heterogeneity. We discuss the relationship between TMT demographic heterogeneity and national culture.

Using 57 banks in the 2006 Fortune Global 500 and a second sample from the literature that represented different industries and time periods, we were able to quantitatively demonstrate similar correlations between TMT demographic heterogeneity and Hofstede’s LTO (-) and IDV (+).
We validate these relationships using a separate data set from a different time period and a variety of industries. Further, using the philosophy of Confucianism and the empirical work of Hofstede, we attempt to partially explain why these two national cultural dimensions were found to be significant drivers of TMT member demographic heterogeneity in our samples. We believe that our findings can lead to other avenues of research.

Viewpoints and Commentaries

Leading and Managing in a Highly Competitive Industry—Viewpoints from a Corporate Leader

Interview with Michael Sengol by Sadie-Jane Nunis

Interview with Michael Sengol by Sadie-Jane Nunis​

Global Dilemmas─Does Competitveness Build Future or Just GDP?

Mark Esposito and Terence Tse

Global Dilemmas—Does Competitveness Build Future or Just GDP?​

From Authenticity to Intellectual Honesty—The New Challenge for Business Leaders

Chandran Nair

From Authenticity to Intellectual Honesty—The New Challenge for Business Leaders​​

Leading and Managing in a Highly Competitive Industry—Viewpoints from a Corporate Leader

Interview with Vincent Sim by Sadie-Jane Nunis

Interview with Vincent Sim by Sadie-Jane Nunis​