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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-Sa‟id, “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

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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 World‟s Kitchen & the Critical Role of Small Farmers” 333

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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

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 issue of non-performing assets (NPAs) came into existence in 1992 and its absolute amount is increasing continuously from Rs. as an input and the servicing providing sector also.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. In fact. provisions and contingences and various other indices of all twenty seven public sector banks.39253 crore in1993 to Rs. credit-deposits ratio. 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. spread burden. -To examine the impact of non-performing assets on efficiency and productivity. 233 . A number of studies found that banking sector does not work as general commodity production because its have many facets as an industry itself. resulted adverse impact on profitability of banks (Kaveri1995 and RBI 1999). extensively advocating privatisation and globalisation. operating expenses. 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. DATA BASE AND METHODOLOGY The present study is based on secondary data provided by various publications of Reserve Bank of India. fixed deposits ratio.AFBE Journal Academic Papers Ruet2003) and placed spurious argument that public banks merely fulfill social obligation agenda of the government. Advocacy of banks mergers as general policy by using the argument of economies of scale. The data is collected for the period of 1994-95 to 2005-06 for the indices of profit. This has led to increase non-performing assets (NPA) and put adverse impact on productivity and profitability of public banks (Abhiman Das 1997). non-performing asset. This will increase competitiveness among banks which strengthen not only their capital base but also improve the customer services (Chandrasekhar2005). 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.performing asset on profitability of the public banks.performing asset as percentage of total asset. merging of banks did not give viable results at international level (Bagchi and Benerajee2005). The simple linear regression function is used to analyse the impact of non. -To evaluate the impact of non-performing assets on profitability with other variables. really conceal the hidden goal of exclusion of small borrowers and marginal farmers from the credit policies of the banking sector. 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. X1= Gross non.

term deposits ratio to total deposits.performing asset as percentage of total asset. X2 =Difference between spread and burden. X1 Gross non-performing asset as a percentage of total asset. X1= Gross non. u= standard error.priority sector as a percentage of total asset. a = intercept. a= Intercept. Business per employee and operating profit per employee were used for productivity variable. 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. X3 = Priority sector advances as a percentage of total advance. X6 = Fixed deposit ratio as a percentage of total deposits. 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. X3= Gross non. a = intercept. X1 = Gross non. a = Intercept. A one fourth credit to the total advances of public sector banks was in the form of doubtful asset in 1994 . 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). X1 Gross non-performing asset as a percentage of total asset =. b = Regression parameter. treat as dependent and NPA as independent variable. Non-performing assets means that the repayment of advances which has been delayed beyond 180 days has to be identified doubtful asset. level of priority sector advances. u= standard error. b= Regression parameter.performing asset of non. X7 = Provisions and contingencies as a percentage of total asset. operating expenses and provisions and contingencies. X5 = Operating expenses as a percentage of total asset. b=Coefficients of regression parameters. magnitude and composition of gross advances and nonperforming assets of public sector banks. It means that public sector banks started to provide credit to the non-priority sector in the form of 234 . IMPACT OF NON-PERFORMING ASSETS ON AGGERATE AND SECTORAL LEVEL Table -1 represents trend. b=regression parameter.95 indicating poor quality of credit portfolio investment of public sector banks.AFBE Journal Academic Papers a= intercept.performing asset of priority sector as a percentage of total asset. b = Co-efficient of regression parameters. The regression equation for non-performing assets on profitability at sectoral level is: Y = a + b1 X1 + b2 X2 + b3 X3 + u-------------. 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. creditdeposits ratio. X2= Gross non. u = standard error.(2) Where Y=Profit as a percentage of total asset. 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. u= standard error.performing asset as percentage of total asset. X4 = Credit-deposit ratio. u = standard error.

09 9. 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). TABLE-3 IMPACT OF NON-PERFORMING ASSETS IN PRIORITY AND NONPRIORITY SECTOR 235 .02 15. The impact of non.0494* 0.4271 -0.13 17.84 16.316 0. D. On the other side.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 3.38 11.78 5. 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.51 4.0494) in the linear regression function is negative.36 7.85 14.02 12. the public sector banks adopted strict credit policy for high-risk endowment of priority sectors.02 21. The value of factor co-efficient of non-performing assets (NPAs) is (b1=-0.in crore) 38385 39584 43577 45653 51710 53294 54774 56567 54090 51541 48399 48406 Ratio (%) 24.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. TABLE-2 AGGREGATE IMPACT OF NON-PERFORMING ASSETS ON PROFITABILITY Regression equation a b1 t-value of R² Value of NPAs b1 1 2.50 * Significant at 1 percent level.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. In crore) 159781 187311 244214 284971 325328 380077 442134 509369 577813 661975 877825 1134724 Gross NPA (Rs.performing asset on the performance of public sector banks at sectoral level has shown in Table –3.

3279* 0.AFBE Journal Academic Papers Regression equation 1 2 a b NPA of t. The value of factor co-efficient of non-performing assets of priority sector is (b1=0. 236 . IMPACT OF NON-PERFORMING ASSETS ON PROFITABILITY WITH OTHER VARIABLES The impact of non. 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).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. The first regression equation of multiple regression models is used to estimate the aggregate impact of Non-Performing Assets (NPA) on profitability. 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). 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.386 0. It means that the advances to the primary activities is difficult to recover due to political interfere. The value of factor co.value Priority sector of b 0.56 9 * Significant at 1 percent level.efficient of non.8648 3. and agriculture growth (Ram Mohan and Ray 2004).0398 0.32 b1 NPA of t-value R² D. the level of spread burden (difference between interest earned and interest expanded) and the burden (difference between non-interest expenditure and non. thereafter another variable were added one by one to the modified regression equation shows maximum fit in table-4.74 10 0.494) is negative and statistically significant at 1 percent level. priority sector advances as percentage of total credit. shows high degree of explanation of variability in profitability of public sector banks.0398) positive and statistically significant.115 -30.3298* 3. it seems that the funds of public sector banks deployed into unproductive asset. Further. fixed deposits as percentage of total deposits have been used as a proxy variable to examine their impact on profitability. The co-efficient of determination R squared in priority sector is higher than seventy percent.F non-priority of b1 Sector 0. 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. which do not yield any income or return and put also adverse impact on the industrial.169 -0.performing asset (b1= -0. operating expenses as percentage of total asset.expenditure income).

The co-efficient of determination (R²) 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).0664) is negative and less than unity but statistically significant at 1 percent level.652) 1.0029 1.82 7 0.066* (3.089 (2.059 (0. 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.93)** (2.64 8 -0.085* (2.value.140 -0.63 9 -0.537) (1.328) (2.007 (0.0166 (0.85 5 0.9512) is negative and less than unity The co.501) -0.771) 1.4271* -0.281) -0.190) 2.107) (0.951* (5.626) 0.efficient of determination (R²) in the transformed regression equation is more than eighty percent shows high degree of explanation of variability in the dependent variable. ** Figures in parentheses are t.420) -1. The value of spread and burden (x2) variables is added in modified regression equation and its value (b2 = -0.035 (1.819) (2.3986 -0. The value of factor co-efficient of priority sector advances (b3=-0.321) 0.978) 1.012 (0.0452 (0.512) *Significant at 1 percent level.86 4 1 2 3 4 5 6 7 2.50 10 -0.824) (4.751) -0.426) -0.474) (0.8358*-0.3603 0.051* (2.569) 1.215) 0.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 R² D.636) (3.065) is negative and less than unity but statistically significant at 1 percent level.849) -1.0511-0.084* (3.830) 0. It seems that the high level of non-performing assets (NPAs) made 237 .deposit ratio (b4=-0.425) (0.473) (0.731) 1.2428 (0. 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).075) -0.131) -0.83 6 -0.805) -0.0142 (2.0264 (0.065* (3.0244 (0.053* (2.013 1. The amount of credit-deposit ratio (x4) is also added to another regression equation and the value of factor co-efficient of credit.8958* (3.698) (0.992* (0.611) 1.9181 -0.494* (10.3055 (1.0021 (0.0881* -0. The outstanding credit on the priority sector in the form of (x3) variable is added in another modified regression equation of multiple regression models.4510 0.908) 2.F value of Priority Credit– OperatingTerm Provisions spread and sector Depositexpenses deposits and burden advances ratio contingencies 0.521) -0.666) -0.055 (0. The co-efficient of determination (R²) is 64 percent shows high degree of explanation of variability in the profitability of the public sector banks.

computerization. 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. In the last regression equation. 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.98 7 *Significant at 1 percent level Another indicator of productivity measurement is operating profit per employee (OPE) shown in table-6. 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.F Value of Non-performing assets 1 19.420 0. The value of factor co-efficient (b1=0.450) is less than unity and statistically significant at 1percent level of significance. The factor co. and establishments of branches in unbanked areas (Sharma 2005). 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.047* 2. The value of co.efficient of determination (R²) 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. 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). 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.907 -0. Simple regression model is used to measure the degree of relationship between nonperforming asset (NPAs) and productivity. TABLE-5 NON-PERFORMING ASSETS AND PRODUCTVITY Regression equation a b1 t-value of b1 R² D.AFBE Journal Academic Papers bank‟s 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 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. 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.efficient of 238 .

REFERENCES Angadi.(2005).B. which raising question mark on the credit appraisal performance of the public sector banks in India.450* 7.6 NON-PERFORMING ASSETS AND PRODUCTVITY Regression equation a b1 t-value of b1 R² D. Financial Infrastructure and Economic Development:Theory.K. Financial Development and Economic Growth in India:1970-71 to1998-99. 1&2.Vol.S. March Bhattacharya.Evidence and Experience” Occasional Papers.AFBE Journal Academic Papers determination (R²) is approximately seventy percent and shows high degree of explanation of variability in the productivity TABLE.P. 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.A.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. Applied Financial EconomicsVol.and Sivasubram(2003) .135 0. CONCLUSION The gross non-performing assets of public sector banks in absolute terms has shown increasing trend till 2001 and declined later on.(2003). whereas its percentage shown declining trend. The management of public banks should also upgrade the credit approval skills of the staff.How Strong are the Argument for Bank Mergers?” Economic and Political Weekly. RBI . 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.13(12).C.No. V.F Value of Non-performing assets 1 10.and Benerejee. 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. 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. 239 . Bagchi.227 0.24.

5.P.”Reserve Bank of India Occasional Paper. No. Financial Structure and Development”.R. Ram Mohan.Comparing Performance of Public and Private Sector Banks. New Delhi. Vol.Ray(2005).T. 1271-75. Prajnan. December.L. The Future of State Owned Companies: Is Privatization the Answer? Indian 240 .Infrastructure and Withdrawal of the State. 28.C. Ravishanker. New Haven Yal uni. Delhi. Technical. Some Aspects and Issues Relating to NPAs in Commercial Banks.(2003). Reserve Bank of India. Gupta.May. S.3) 279-97 Deb. RBI (1999).19 .7 Roy.53.S. Vol. Delhi.T. Mar.(2000).S.1857-1947.22. No.”Ashish Publication.Dealing With NPAs: Lessons from International Experience.37.12. No.Delhi.and Saha.Deregulation and Performance of Public Sector Banks. Non-Performing Advances: Some Issues.18(2. (2001).T. Report on Non.Chand &com. and Ray.V.Relationship Between Recovery and Profitability of Banks: A Study. Vol. Efficiency of Public Sector Banks. Rudrasen Sharma(2005).K. Vol.” Economic and Political Weekly. Abhiman (1999). A Revenue Maximization Efficiency Approach. R.2.(1996).Performing Asset of Public Sector Banks”Ministry of Finance.(1995) .S.No.”A Stochastic Frontier Analysis. Economic and Political weekly. Chhipa.Commercial Banking Development in India.T.J.” Money and Finance. September. An Application of Data Envelopment Model” Prajnan. Allocative and Scale Efficiency of Public Sector Banks in India. N.P. in Ramachandran &Swaminathan(ed. Oxford University Press. Report of the Committee on Customer Service.T.B.(1969).2. Naarasimham Committee(1991 and 1998).” Economic and Political weekly.(2004). No.20. No.39-49. FICCI (1999).3.pp1317-22 Ramachandran. N. Ruet. December. March. Indian Banking Since Nationalisation.26. press Goiporia Committee (1991).P.Delhi.Monetary Economics: Institutions Theory and policy.V.S. N.(1988). Economic and Political Weekly.AFBE Journal Academic Papers Chandrasekhar.I. Das. Impact of NPAs on Capital Account Convertibility. Financial Sector Reforms and the Transformation of Banking.33 Mukherji. Reserve Bank of India.pp393-97 Ram Mohan. _____________ (1997). Gold Smith.(1987).” Print Well Pub.K.Cost and Profit Efficiency of Indian Banks During1986-2003.(1993). and S. Vol.S. M. Vol.12.. Report of the Committee on Financial System.(2002). The Economic History of India.Vol. and Kaveri.) pp.(2004).SBI Monthly Review. Purakaystha. November.(1997).S.” Prajnan. Kaveri.A.

Schumpeter. N.K. Non-Performing Advances in Banks.” (ed.3.S. 241 .51. September Shrivastav.” Himalya Pub. Theory of Economic Devlopment. Delhi _______(2005).J. Managing Non Performing Asset Through Asset Reconstruction Companies.N.(1994). Sharma Meena(2002).(1961). Deep and Deep Publication. Toor. No. vol. Economic Reforms in India from First to Second Generation and Beyond.P.”Oxford Uni. Problem of NPAs and Its Impact on Strategic Banking Variables.Delhi.”Skylark Pub.Banking Theory and Practics.(1981).AFBE Journal Academic Papers Economic Journal. Press.”Finance India.19. N.Vol.) in Book. pp35-51.Mumbai.

Alhabshi (2002) indicated that the Internet-based degree has not attracted as many students as 242 . United Kingdom (Souleles 2004) and Australia (Kenny 2003) recorded increases in the popularity of online degree courses. 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. Almaty. Similarly. online degrees have not been popular in Asia. To cater for the large number of potential new students worldwide. many universities and “for-profit” education providers have introduced online degrees. Surveys from high school/junior college students in Singapore. The United States of America (Allen & Seaman 2006). Cheung & Hew 2005) indicating favourable outcomes of online learning. A study by Chung and Ellis (2003) showed a generally low acceptance of online tertiary education in Singapore. mouth-to-mouth communication via alumni networks) and Website quality enhanced learners’ experience and trust in an online tertiary brand. contingent on institutional and courseware design assurance factors. Additionally. needing time to establish their reputation for quality offerings and because of the lack of resources (Leong 2006). Internet-based education has not attracted as many students as was expected.AFBE Journal Academic Papers ANTECEDENT OF BRAND TRUST IN ONLINE TERTIARY EDUCATION: AN ASIAN PERSPECTIVE Kim-Choy Chung Kazakhstan Institute of Management. This tri-nation study also reveals that public opinion (friends/family’s opinion about online tertiary education. because trust acts to decrease the perceived risk of using a virtual service. In Brunei. industry support. Economic and Strategic Research. By comparison. online degrees had a slow start. This is despite several Singaporean studies (Tan & Lambe 2002. This study suggests that trust is the antecedent of brand choice for online tertiary education. 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.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). Further. Ross 2004). studies on brand impact on a student’s choice of online tertiary providers are scarce. However. Kazakshtan kimchung@kimep. Dargo & Schibrowsky 2003. Keywords: Online tertiary education. Malaysia and Brunei using mall-intercept method support the notion that brand trust in online tertiary education is related to risk aversion.

The main reason for the lack of enthusiasm for online degrees in Singapore (Tan & Lambe 2002. the dramatic globalisation of the world economy over the last two decades has an impact on higher education. Where once universities competed for students. MALAYSIA. The overall effect of these technological advances and competition is an increasing variety of niche-oriented. With financial outlays increasing. which are made as attractive as possible to prospective students to increase enrolments (Stensaker 2005).AFBE Journal Academic Papers had been expected in Malaysia. There is still a lack of confidence among students.2 76. the implementation of online learning is usually at the initiatives of the private institutions (Suhaimi & Lim 2007). parents and educators that online education could be an effective medium for imparting knowledge/skills.4 66. For many students today. students are faced with a choice of course type. This marketoriented approach of universities has resulted in students facing a variety of education choice/information. and give psychological rewards of prestige and status.1 1 7.2 million. their undergraduate degree is a large investment that requires them or their families to incur considerable debt before graduating (Moore 2004). faculty and funds within a national context. study mode (online or traditional classroom). culturally similar to Singapore and Brunei (in terms of population ethnicity. 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. provide an assurance of the quality associated with a particular brand reducing perceived risk.1 1. Hulbert & Pitt 1997). helping to reduce social and psychological risks that are associated with ownership/use of a socially inappropriate product (Berthon. In Brunei. As with physical product consumption.8 Indian (%) 7.8 18.3 13. today they compete internationally. even more importance is placed on the cost benefits and choice of tertiary education. That is.48 million.7 11. Branding can assist consumers in identifying products and therefore reduce search costs.9 Chinese (%) 23.9 Indigenous (%) 11 3. Table 1).4 Other (%) 7. multidisciplinary programs. In addition. 2000 census) Malay (%) 50. 2004 census) Singapore (3. TABLE 1: POPULATION ETHNICITY OF SINGAPORE. tertiary provider or even tertiary destination.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. Chung & Ellis 2003) and Malaysia (Alhabshi 2002) is the muchpreferred method of face-to-face teaching and learning. 243 . 2004 census) Brunei (0. AND BRUNEI Country Malaysia (25 million.

Students may complete and submit tests for feedback. shared knowledge (rich information on the internet). In addition. multi-sensory experience via multimedia technology. make class presentations and create their own home pages. 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. and search relevant courses and words. and virtual community. 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. Malaysia and Brunei. and undertake self-tests that do not require submission. This study addresses this void and aims to identify the antecedent of brand trust in online tertiary education in Singapore. There are also tools to enable students to take notes. Besides email for communication. 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. 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). and other relevant databases. the Web has significant advantages over other media in delivering distance 244 . syllabuses. 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 is a void of study of trust within the context of consumer-brand relationship in student‟s choice of online tertiary education. student-centeredness. Online tertiary education is defined here as university‟s undergraduate and post-graduate education via the Internet/Web. students are able to submit assignments online and view assignment results. There are also a variety of study tools which help students to file frequently used pages and materials. students can view. In particular. little has been written within the marketing paradigm. There are two common methods of using the Web for educational purposes: Web-assisted or Web-based. time and spatial flexibility (learn anywhere any time). check relevant references.AFBE Journal Academic Papers Despite the plethora of studies about online education. and access course materials. appealing to those (potential students) who have work or family commitments during the day. For academics.

have awareness of content and audience (Dringus & Terrell 1998).” This definition suggests that brands are visually distinctive and that their role is to create an indelible impression. Concerns and limitations of online tertiary education Although online methodologies open up access to training because of their electronic reach. Web-based education represents a convenient delivery system for teaching and learning (Dunning & Vijayaraman 2001). they may also present access issues for those students not be able to afford the cost of computer hardware and Internet access. Unless issued by a well-known accredited university (tertiary brand). The rapid proliferation of “certificate mills” is causing human resource managers and the general public to doubt the credibility of online degrees (Philips 2007). Kilpatrick & Bound 2003). the preferred term is trade name. design. Alexander 1999). 2001) and is believed to increase 245 . and information richness (Wulf 1996). Thus. deal with feelings of isolation and singularity (Dringus 1999). term. Trust in consumer-brand relationship Studies by Morgan and Hunt (1994). Berge & Huang 2004). Gommans et al. global access. Fournier (1998) and Gurviez (1996) illustrate the importance of trust in developing a positive and favourable attitude. Further. A brand may identify one item. If used for the firm as a whole. 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 family of items. easier updating of content. 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). Moore & Taylor 1996). and be able to evaluate their own learning process (Land & Hannafin 1996). In addition. learners must be able to initiate active peer-to-peer discussion (Ruberg. learners who suffer from procrastination and low self-motivation for independent learning may not be good candidates for online education (Naidu 1994. Function of brand The American Marketing Association (AMA 2007) has the following definition for brand: “A name. resulting in commitment to a certain brand in successful consumer-brand relationships. volume and clarity in a Web environment presents a great potential for miscommunication and could make students unnecessarily frustrated and impatient.AFBE Journal Academic Papers education. or all items of that seller. Consumer‟s trust in a brand contributes to a reduction of uncertainty in consumer purchases (Garbarino & Mark 1999. the quality of the online degree is often doubted (Chung & Ellis 2003). It is effective for delivering virtual courses because of its global appeal. leading to low student retention in Web-Based Learning (Ragan & White 2001. For effective utilisation of the Web for education purposes. the unusual demand for written communication in term of speed. 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. symbol.

However. Affective trust typically emerges from repeated interactions among individuals. (1998) propose a clear differentiation between interpersonal and inter-organisational trust. Since online learners have no direct contact with their education providers. which is based on the affective bonds amongst individuals. evolving from past experiences or interactions (Rempel. Delgado-Ballester & Munuera-Aleman 2001). while inter-organisational trust is seen as the extent of trust placed in the partner organisation by the members of a focal organisation. A trustee can be a person. Despite its importance. Rocco et al. benevolence and credibility of trustees as the underlying determinants of trust. Amongst social psychologists. Zand (1972) suggests integrity. 246 . In the sociological treatment of trust. trust is assessed in terms of social relationships and social institutions (Lewis & Weigert 1985. Hardin 2002. an object (product). Shapiro 1987).AFBE Journal Academic Papers customer loyalty (Fullerton 2003. or an idea (brand). trust plays an important role in this online tertiary setting. In sociology. not of isolated individuals as is the practice in psychology (Lewis & Weigert 1985). Uslaner 2002). Trust in the psychology discipline is generally discussed as a learned behaviour (Orbell. some social psychologists (Burns & Kinder 2000. 2001). risk is calculated. so individuals may choose not to trust if the risk is too great (Hupcey et al. groups). (2001) and McAllister (1995) view interpersonal trust in an organisation as having two dimensions: i) Cognitive-based trust. trust is conceived as a property of collective units (ongoing dyads. ii) Affect-based trust. the former refers to the trust placed by an individual in their individual opposite member. 2003. Holmes & Zanna 1985. Within this context. In management. trust is generally regarded as a highly stable psychological propensity to trust other people (innate psychological trait) in a social exchange. Narayandas & Rangan 2004). contributing to the lack of measurement consensus of the trust construct (Gefen et al. Dawes & Schwartz-Shea 1994) rather than an inherent personality trait (Gurtman 1992) and is established through a gradual process over time. an organization. which is grounded in the cognitive judgements of another‟s competence/reliability (based on the factual knowledge the trustor has of the trustee). Willig 1997). This is because diverse views in studying trust across difference disciplines have resulted in various definitions. the concept of „brand trust‟ has seldom been explicitly examined in education and consumer-brand literature. Zaheer et al. 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). Yosano & Hayashi 2005) view trust as social learning and assumes individuals develop different levels of trust across different domains of interaction/experiences. and unlikely to be appreciably modified by commonplace experiences (Becker 1996.

the uncertainty that the course contents may not meet the skills/knowledge requirement of the student/society. Morgan & Hunt 1994). 1995. this study conceptualizes brand trust as an individual’s conscious inclination to place his/her confidence in a brand’s qualities or attributes in situations entailing risk to the consumer. honesty and benevolence dimension in a relationship (interpersonal relationships between buyers and seller). and have the same entry requirements and study materials as comparable classroom studies. Regular faculty evaluation and government recognition of online degrees (Chung & Ellis 2003) and course accreditation (Philips 2007) ensure the quality of online courses. and proposes the following hypotheses: Hypothesis 1: Brand trust in online tertiary education is related to risk aversion. carry out his/her obligations or accomplish his/her benevolence promises (Doney & Cannon 1997. contingent on institutional assurance factors. Lack of a minimum study period. 2001). 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). Marketing strongly relates trust with the competence. A „certificate mill‟ refers to the provision of education degrees for a fee. the purchase of online tertiary education can be a risky venture because of the low credibility of the online degree (Tan & Lambe 2002. These definitions of brand trust imply that an individual‟s propensity to place one‟s confidence on a brand‟s qualities/attributes and the conscious inclination to avert risk are critical in consumer-brand relationship. It is also referred to as emotional trust (Rocco et al. That is. that focuses on the belief that the partner has the required expertise to perform his/her activities. Thus. low entry requirements and unspecified study materials are some of the characteristics of a „certificate mill‟ (Philips 2007). Brand trust in choice of online tertiary education In the few studies that explicitly examine „brand trust ‟ in marketing.AFBE Journal Academic Papers and experiences of reciprocated interpersonal care and concern. and the lack of physical or human contact between the online learners and the education providers. Philips 2007). this study proposes that any course/program developed for online degree must have certain minimum periods of study. This study proposes that instructor quality (relevant qualifications and 247 . contingent on course design factors. Hypothesis 2: Brand trust in online tertiary education is related to risk aversion. 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. Chung & Ellis 2003. Mayer et al. McAllister 1995.

a motivated online instructor means one having strong empathy with online learners (time-pressed. Siau & Shen 2003). 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. Web site quality is discussed as a main factor in engendering trust in the online retailer (McKnight. According to Alba (1987). Similarly. Hypothesis 3: Brand trust in online tertiary education is influenced by direct brand experience. Landa 2006). To improve user acceptance of a learning site. In fact. Similarly. sense of isolation). a study undertaken by Cheskin Research & Studio Archetype (1999) also indicates a strong correlation between familiarity and trust. loyalty and trust in a brand (Berry 2000. the only form of direct experience an online learner has with an education brand is via the Web site. a users‟ positive experience (direct) with the brand is key in maintaining trust in this form of learning. the availability of technical support or helpdesk facilitates student satisfaction amongst online learners (Leiblein 2000). Here. consumers‟ familiarity with a brand is associated with direct and indirect brand experiences. and so the online learning facilitator must ensure prompt feedbacks to student enquiries for effective learning outcomes. book-marking that allows the student to return to the last page studied. 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. Delgado-Ballester et al. website and brochures to contacts with front-line staff of the brand (Berry 2000. Familiarity with a company or brand generates higher trust. 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. However. contingent on Website quality factors. computing skills. 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).AFBE Journal Academic Papers motivation). 248 . 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). act as institutional assurance. According to Levesque and Kelly (2002). Brand experience heightens individual‟s interest. and interactivity amongst online learners. A brand experience is an individual‟s experience derived from interaction with a brand (Landa 2006). Levesque and Kelly recommended user friendly (structured) formats that facilitate easy navigation through the content. it is included as an institutional assurance factor as well. 1998). This interaction ranges from visual contact with a logo. newspaper advertisement. Every interaction a person has with a brand contributes to their overall perception of the brand. unless a person has a negative perception of a brand (Kania 2001). Choudhury & Kacmar 2002. Leiblein writes an online student is time sensitive to a teacher‟s response to a query or to feedback. Sharma 2007. Kaperefer 2004). and government recognition of online tertiary providers. Since strong research outputs are a common criteria for generating worldwide university ranking (Stensaker 2005). 2003.

Strong alumni network of online tertiary providers H1 H2 Brand trust in online tertiary education H4 249 . thought and felt over time when the brand is presented virtually or in an advertisement (Hoch & Ha 1986). Consistent with Hemsley-Brown‟s argument.Instructor quality . Similarly. FIGURE 1 : HYPOTHESIZED MODEL OF BRAND TRUST IN ONLINE TERTIARY EDUCATION Course design factors . this study suggests that Web site quality factors can influence user‟s trust in an online tertiary brand. Indirect brand experience embodies what consumers have seen.Interactivity H3 .Family & friend‟s opinion about the online tertiary providers .Up-to-date (relevant) information Indirect brand experience (public awareness) .Industry support (employment prospect of online graduate) . Hypothesis 4: Brand trust in online tertiary education is influenced by indirect brand experience or public awareness. these were usually filtered through layers of preconceptions emanating from such influences as family and cultural norms. as well as societal traditions.Research output (university ranking) .Have minimum study period . and necessary links to other relevant websites or provides an effective interaction with other online learners.Same learning material as classroom study Institutional assurance factors .AFBE Journal Academic Papers As such. In the education arena.Easy navigation of website . 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). A conceptual model summarising the proposed hypotheses was presented in Figure 1. According to Chung and Ellis (2003).Same entry requirements as for classroom study . ease of navigation. Hemsley-Brown (1999) argues that while students often give utilitarian reasons for making choices about education. Website quality factors refer to how well a learning site can provides online learners up-to-date information (knowledge content). This study intends to validate this argument in relation to brand trust. heard. public opinion in terms of industry support (recognition of skills achieved). learned. Gatfield and Hyde‟s (2005) study in Singapore identify university choice being made in consideration with referent group (peers) and parents/family member‟s expectations.Home government recognition of online degree Direct brand experience (via Website) . strong alumni networks (for mouth-to-mouth communication) and favourable friends or family‟s opinions about online degrees are vital for market acceptance of online tertiary education in Singapore.

Out of the 637 questionnaires returned.3. All measurement variables (exogenous) in the research hypothetical model were subjected to exploratory factor analysis using SPPS‟s Principal Component Analysis (PCA) using varimax rotation technique. students in their distinctive school uniforms are common sights in the various shopping malls in these countries. New Zealand. 121 from Brunei and 281 from Malaysia (Kuala Lumpur n=95. To increase the randomness of this sampling approach. The respondents were also asked for their opinion about the difficulty of completing the questionnaire. preliminary observations were taken to identify the time frame the mall had the largest concentration of school students. nine hundred questionnaires were distributed in three malls in Singapore. Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy and Bartlett‟s test of sphericity were used. English were widely spoken in these three countries and they have fairly similar population ethnicity. No problems were identified with understanding (comprehension for the logic) of the questions. To ensure that all possible times were represented when students went to a mall. This simplifies the interpretation 250 . Malaysian and Brunei students resident at the University of Otago. it was found the questionnaire took between 10-15 minutes for the respondent to complete. Samplings The targeted samplings are high school/junior college students in Singapore. Malaysia and Brunei. The period from 1-6pm was observed to have greatest concentration of high school/junior college students in all randomly selected malls. a KMO index of >0.05 as appropriate for factor analysis. The response data was normally distributed allowing parametric analysis.e. PCA (varimax rotation) was initially chosen because of its ease of interpretation. malls were randomly selected in place and time over a twoweek period. Kuching n=97). a simple solution means that each factor has a small number of large loadings and a large number of small loadings.AFBE Journal Academic Papers 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. To test the fit of the data for factor analysis.6 and Bartlett‟s p<0. Thus. 5:1 case/variable ratio. Coakes & Steed 2001). Johore Bahru and Kuala Lumpur represent two large cities from peninsula Malaysia while Kuching and Bandar Seri Begawan represent two large cities from Borneo. On average. In addition. The main author positioned himself at the high traffic locations near the mall entrances to randomly select respondents. Brunei. 235 were from Singapore. Tabachnick and Fidell (1996) recommend a correlation coefficient of at least 0. All together there are 15 measurement (including 12 exogenous. Kuala Lumpur and Kuching) and one mall in Bandar Seri Begawan. three malls in three major cities in Malaysia (Johore Bahru. For varimax. Overall. they are easy to identify and solicit responses for the survey. direct brand experience (Website quality) and indirect brand experience (public opinion) factors is utilized in this study. the other three are demographics) variables in the questionnaire. Johore Bahru n=89. The questionnaire was pre-tested on a group of 20 Singapore. Factorial validity and structural model test The 637 completed surveys met the primary requirements for factor analysis (i.

3 and above. The public awareness (indirect brand experience) factor had loadings ranging from 0.666 0. after a varimax rotation. showing factor analysis is appropriate. confirming that all the measurement scales used in the 4-factor model were statistically valid.754 to 0.867 for the course assurance factor.AFBE Journal Academic Papers because.791 to 0.844 0.825 for the institutional assurance factor. A reliability test conducted showed good internal consistency with all factorial measurement scales [Composite Reliability (CR) > 0. 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. [S .962).10.0 software on all factorial models showed that the discrepancy between the sample covariance matrix S and the population covariance matrix Σ(θ) is minimal (that is.806 to 0.47% of the variance.798 0.Σ(θ) = minimum]. The AVE and reliability test results are also presented in Table 2.893 0. Factor loadings ranged from 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. explaining a total of 64.5 (Hair et al.824 0. and from 0.791 0. TABLE 2 : RELIABILITY TEST STATISTICS AND FACTOR ANALYSIS COMPONENT SCORES Factorial scale Courseware design AVE CR Item Loading 0. from 0. 251 .825 0.887 0.893.772 Have minimum study period as for classroom study Same entry requirements as for classroom study Same learning material as for classroom study 0. The goodness-of-fit and reliability test statistics are presented in Figure 2. 1995) for satisfactory convergent validity.754 0.050.745 0. Four components with Eigenvalues >1 were extracted.888 for the direct brand experience factor (Website).828 Strong alumni network of online tertiary providers (public opinion) Industry support (employment prospect of online graduates) Family & friend‟s opinion about the online tertiary providers Structural Equation Modelling (SEM) using AMOS ver. The KMO value was 0. The PCA pattern matrix table showed clear structure with the loaded variables (Table 1) similar to the proposed model (Figure 1).680 0.709 0.782 and the Bartlett‟s Test of Sphericity was significant (Sig=0. 6. each original variable tends to be associated with one (or a small number) of factors.888 0.7].0).867 0. The Average Variance Extracted (AVE) for all four factors was above the recommended threshold of 0. RMSEA=0. GFI= 0.866 0.798 to 0.748 Research output (university ranking) Home government recognition of online degree Instructor quality 0.806 0. 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.

666 0.00 f4 Composite Reliability .86 1 1 Instructor Qua.00 .42 1 1 .78 .99 Industry support (employment) Friends & family opinion course assurance factor a1.962 CFI=0.10 RMSEA=0.828 AV 0.69 a6 .772 .51 a2 a3 .05) between all measurement items (Table 3).00 Qua Up to date f1 Interactivity .05) for all variables.792 .01=317) 1 Code Min period Same entry req Same material Research output Govt recog Instructor 1.974 Hoelter (0.79 .34 e2 e3 . L‟pur (n=235) (n=95) Johore (n=89) Kuching (n=97) Brunei (n=121) F Sig.90 govt recog . .00 . 252 . Malaysia and Brunei were not significant (p>. Homogeneity of variance (Levene) tests between the samples from Singapore.680 0.58 1. research ouputs . Malaysia and Brunei were found with all measurement variables.79 1.745 FINDINGS AND DISCUSSION No major differences between Singapore.00 . Assurance Site quality Public awareness .05=281.92 1.98 0.64 institutional assurance factor a5.709 0.00 support (employment) .748 .88 1.37 1.78 1 interactivity .65 e1.AFBE Journal Academic Papers FIGURE 2 : FACTOR EQUATION MODELLING STATISTICS Fit measures CMIN/DF=2.71 f3 1 Strong alumni network industry 1.75 (university ranking) 1.83 Site quality (direct experience) 1 1 Easy navigation up to date infor .97 friends & family opinion p1 .42 p3 Factor Course assurance Inst.72 Easy navigation .00 .73 public awareness (indirect experience) p2. TABLE 3: MULTIVARIABLE TEST STATISTICS Trust factors S‟pore K.74 Strong alumni network .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 & friend‟s opinion about the online tertiary providers .44 min period 1 1 same entry req same material 1.00 Brand trust in online tertiary education f2 .050 GFI= 0. The two-tail tests of measured significance also showed no significant differences apparent (p>.59 a4 1 .

53 3.13 0.61 2.71 4.58 4.12 0.32 0.07 5.83 5.95 5.97 0.45 4.51 0.41 3.82 1. contingent on institutional assurance factors (regression weights=0. and that the institution they enrolled in is highly regarded worldwide for its quality of teaching/research to ensure credibility of online degree. that quality instructors are available to encourage.81 4.70 5. within the context of brand trust in online tertiary education.93 3. These findings were consistent with Alhabshi‟s (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‟.52 4.21 0.AFBE Journal Academic Papers 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 & friend‟s opinion about the online tertiary providers 6. Kuala Lumpur=6.55 5.16 3.22 0.12.54 4.60 3.52 5. Kuching=5.27 0.91 5.84 4.98 1.69 5.60 3.86 5. Johore Bahru=6. Courseware design factors The SEM results (Figure 2) indicated that courseware design factors had regression weights of 0.87 0.01. university ranking and government recognition of online tertiary degree are important institutional assurance factors.61 4. A regular classroom session in the form of block teaching to complement online teaching is suggested.03 5.23 5.13 5.21.97 3. Direct brand experience (Website quality) 253 .42 0.72 4.08 3.61 4.12 5. 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. The three measured items (exogenous variables) of the course design factors: Have minimum period of study.15 1. Hypothesis 2: Brand trust in online tertiary education is related to risk aversion.37 0. Institutional assurance factors Similarly.68 3.07).42 0.89 1. contingent on course design factors.93 0.01 5. the highest mean scored variable in all (sampled) cities are „home government recognition of online degree‟ (Singapore=6.77 4.67 2.70 3.60 3.21 5.67 4.38 0. This confirmed that instructor‟s quality.66 4. 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.90 5.58 5.88) was also supported in this study. highest scores in bold As shown in Table 2.09 5.05 (2-tailed).33 0.01 1. The venue could be on-campus.94 5.79 5.99 5.19 i Note: Mean out of 7.81 0. mentor and motivate them to maintain their interest in their „isolated‟ learning journey. hotels or community halls that are central to groups of students.79 5.29 3.17 5.64.81 5.33 0. p=0.99 and Brunei=6.25 0. This helps to enhance the credibility and visibility of the online tertiary provider.92 0.85 4.75 6. generally supporting Hypothesis 1: Brand trust in online tertiary education is related to risk aversion.65 4.51 3.78 5.99 6.73 6.88 5.

by not focusing on a specific institution. 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. Finally. First. affecting respondent‟s choice of online tertiary education. while the large sample size (n=637) improves its external validity. LIMITATIONS AND FURTHER STUDY There are several limitations with this study. To enhance brand trust in a particular online tertiary provider. brand positioning statements 254 .71). contingent on Website quality factors (regression weight=0. A portforlio of their online graduates in prominent institutions (for marketing promotion) and a strong alumni network would greatly enhance the online tertiary provider‟s reputation. Second. further study on the relationship between brand image.AFBE Journal Academic Papers The SEM results also supported Hypothesis 3: Brand trust in online tertiary education is influenced by direct brand experience. 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. Sharma (2007) and Siau and Shen (2003) arguments. university‟s frontline staff service quality. Spector 1992). corporate missions etc) and its brand positioning statement in relation to brand trust as quality cues in online tertiary purchase is unknown. a validation sample was not available for this study. 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. However. that their investment in time consuming and costly education may be rejected by their community. This confirmed McKnight et al. if the education they undertake is not up to the quality expectations of their peers or society. and strong alumni networks for word-of-mouth communication. 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 population and to test the comparability and stability of the proposed hypothetical models (Hair et al. 1998.78). (2002). One way of reducing perceived risk over the purchase of online tertiary education is to make online course offerings customer-centric. the effect of an institution‟s micro environment (a specific university‟s perceived brand image. 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). its online program should help students to upgrade their skills for career advancement and be relevant for industry needs. that Web site quality is vital to engender trust in online retailers‟ offerings. industry support in the form of employment. This construct was measured by three exogenous variables: Family and friend‟s opinions about an online degree. This may be due to respondents being concerned about employment.

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AFBE Journal Academic Papers A COMPARATIVE ANALYSIS OF U.pettijohn@huizenga.edu Linda S. Wayne Huizenga School of Business & Entrepreneurship The Carl DeSantis Building 3301 College Avenue Davie. FL 33314 954-262-5030 charlie. the business-world continues to shrink.S. Wayne Huizenga School of Business & Entrepreneurship The Carl DeSantis Building 3301 College Avenue Davie. Based on this perception.S.nova. Knowing the ethical perceptions and standards of these individuals might help preclude errors that could have significant longterm economic ramifications for both U. engaging in business interactions with Chinese business executives is becoming more frequent.edu ABSTRACT As global business becomes a reality for an increasing number of firms.S. Ethical expectations may provide the basis for much of the exchange that occurs in the U. business executives are likely to discover that their international counterparts are operating with different rules and standards. For U. The comparisons focused on the students’ perceptions as they relate to whether the practice of ethics is a profitable business practice and whether 262 . and Chinese business executives. Pettijohn Professor of Marketing Department of Marketing H. Pettijohn Professor of Marketing Department of Marketing H.S.nova. AND CHINESE BUSINESS STUDENT ETHICAL PERCEPTIONS Charles E. Ethical challenges arising as a result of these cultural differences may prove to be very significant. However. as the firm engaging in international business discovers the cultural norms applicable in the home country no longer are applicable in the host country. when operating internationally. but one of the major areas of difficulty is often described as being attributable to culture. FL 33314 954-262-5030 lp835@huizenga.S. business students with those of Chinese business students. research was conducted to compare the ethical perceptions of U. businesspeople. Businesses face many challenges operating internationally.

Ethical challenges that may arise as businesses operate internationally can occur on numerous levels. 602) state. some contend that the practice of good ethics is good business (Herndon. culture has been identified as one of the critical determinants of ethical behavior across nations (Phau and Kea 2007). “The predominance of national culture as a primary guiding influence independent of which ethical criterion is used when making decisions cannot be overstated. et al. it has been reported that only 17% of Americans trust business leaders (Sales and Marketing Management 2005).AFBE Journal Academic Papers they as consumers feel alienated from the marketplace. INTRODUCTION Businesses in many cultures have rather contentious relationships with their numerous stakeholders. et al. challenges exist in determining how to respond to ethical issues because no one national standard exists (Burnaz. These images help create lasting challenges for businesses and their leaders. Siemens. including employment issues such as hiring and relocation (Stevenson and Bodkin 1998). research has found that the images of business executives are among the lowest-rated of professionals (Lantos 1999. one could contend that these relationships are negative. coping with increased regulation. Sidani and El-Asmar 2008. (2008) point out. As Beekun.S. Trease. p. When business activities are regarded with skepticism. In fact. operation and ultimately profitability. (2008. many firms discover their „costs of doing business‟ often increase (Lantos 1999. et al. Others have pointed out that as businesses increasingly operate internationally. Costs which increase might include expenditures directed toward improving businesses‟ images (past ethical lapses). marketing professionals need to be more concerned with ethics in a crossnational context (p. Mantel 2005. Thus. businesses are operating in a climate in which their actions are suspect (Wartzman 2010). 2010) and because the potential for problems increases when interacting internationally (Sims and Gegez 2004). Wall-Street and more. Toyota. 1994).S. et al. As Beekun. business executives working with their Chinese counterparts should be aware of ethical differences which might impact working relationships in business operations. Phau and Kea 2007. The results indicate that comparative differences exist between Chinese and U. business students on each of these dimensions. According to the research. et al. Wulfson 1998). 52). it appears that understanding ethical standards in different cultures is a critical task for businesses expanding into international activities (Jamali. Stevenson and Bodkin 1998). As a result of scandals such as Madoff‟s. Chinese toys. engaging in additional lobbying activities to preempt additional regulations. 2008. However. Fraedrich and Yeh 2001). These findings suggest that U.” Thus. one may wonder how ethical attitudes are affected when businesses operate in different cultures. legal activities and more. the public‟s perceptions of businesspeople are generally quite negative. For example. resulting in increased challenges for enterprise existence. In some cases. the process of analyzing ethics of different cultures can aid in the identification of alternative behavioral standards. Luther. DiBattista and Gautchi 1997. Stevenson and Bodkin (1998) state “As the globalization of markets continues. Yet. Robertson.” 263 .

S. caring. This research will provide insights into issues that may exist when U. et al. Thus. Hunt and Chonko 1987). and Chinese businesses and negotiators interact. Their research revealed that Chinese customers were able to differentiate between China‟s business activities and their ethical activities. ethical factors are often of considerable importance. the findings indicated that Turkish respondents were the least ethical (Sims and Gegez 2004). The specific dimensions evaluated include their perceptions of whether good ethics is good business and whether they feel alienated as consumers. Wotruba and Loe 2002. RELATED RESEARCH From a managerial perspective. Based on these assumptions. Since international issues are so prevalent. based on their cultural and religious backgrounds. one study examined consumer‟s support of socially responsible business and their evaluation of corporate socially responsible behaviors (Ramasamy and Yeung 2009). then it might be suggested that ethical behaviors pay dividends.S. other research indicates that the East/West differences were opposite. the focus of this research effort will entail a comparison of U. Finally. generous and powerful and less deceitful. Ethical issues have been evaluated in numerous studies which focused on the Chinese market. the research indicated that Chinese customers felt that businesses were more “friendly. student ethical perceptions with Chinese student ethical perceptions. 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. For example.AFBE Journal Academic Papers One might assume that attitudes regarding the importance of ethics might affect one‟s behaviors. For example. arrogant and greedy than their European counterparts (Ramasamy and Yeung 2009.. situations in which consumers feel estranged from business might relate to perceptions of business ethicality. The research contended that these differences might be attributable to the shared values of Singapore and Hong Kong students. Australia and Turkey. the study will address an issue which was identified by Lee. if an individual perceived that ethical behaviors were profitable for businesses. Such attitudes may relate to future ethical behaviors. In a study comparing the ethical levels of graduate students from the U. 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. p. The authors concluded that the rationale 264 . However. Ethical behaviors and perceptions are important from societal perspectives and have both business and economic implications. trustworthy. Thus.” 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). Further. 127). (2009) who contend that a relatively small volume of research pertaining to ethics has been conducted internationally. this research is designed to assess the degree to which business students perceive ethics to be important to an enterprise‟s long-term success and the degree to which these students may feel estranged from the marketplace. Consumer attitudes may be affected by perceptions of business ethics.S.

people might believe that their managers operate in ways designed primarily to enhance their personal and business well-being. (2010) found that the U. To these individuals. have 265 . businesses might focus on maintaining a strong society and satisfying customers. On the opposite end of the theoretical continuum would be those that believe that the practice of good ethics is a worthwhile economic endeavor. 2009).g. 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. Friedman‟s shareholder wealth proposition). some might perceive that managers are focused on maintaining a positive ethical environment for their firms. It has been argued that individuals may perceive outcomes in unique fashions based on their cultures and experiences (Pettijohn. In one case.S. which created a shift from traditional Chinese principles. it can be suggested that people have beliefs regarding businesses‟ roles in society. et al. 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. Chinese respondents tended to indicate lower levels of ethics (Robertson. Individuals with such attitudes might perceive that businesses would make misleading product claims. et al. as they pertain to the Chinese culture. These individuals might believe that their managers will enforce ethical behaviors and work toward improving ethical standards in the firm. etc. etc. 2008.AFBE Journal Academic Papers for the differences could be attributed to the alternative cultures operating in these countries. assessments of ethical issues. earn a promotion. This research suggests that the findings are more attributable to the focus on profit and competition in the Chinese market. Correspondingly. as good ethics is good business. Thus. First. numerous factors lead to interest in the ethical climate in China. one‟s ethical predispositions might be based on that individual‟s attitudes as a consumer. some may believe business exists for the sole purpose of earning a profit and other activities are unnecessary (e. Research comparing Chinese ethics with those found in Peru found that Chinese respondents provided less ethical responses than did the Peruvian respondents. sample had a greater level of awareness of ethical issues and gave more importance to ethics than did the respondents from Thailand or Turkey. employee and citizen. While it is rather obvious that China has become an economic powerhouse. On the other hand. Such an attitude might be reflected by an individual‟s attitude which contends that his/her manager will do whatever it takes to make a profit. and by engaging in these activities businesses would earn greater profits over the long-term. et al. These perceptions and experiences may be multifaceted. Other research has indicated that Chinese ethical standards as they pertained to personal selling activities were inferior to those provided by Western respondents (Lee. engage in misleading financial practices. 2008). Erdener and Li 1998). In other research. sell harmful products. Burnaz. Finally. On the dimensions of relativism. some consumers might feel alienated from the marketplace in which they live. Volkema and Fleury 2002). For example. et al. idealism and willingness to sacrifice ethical standards for financial gain. These consumers might believe that they are merely pawns in society and as such they are manipulated and abused by businesses that they patronize.

and China and the U. et al. than in China. (Burnaz. the ethical sensitivity levels found in the U. et al. Pei (2006. one study compared student ethics using business students enrolled in an Australian University operating on three campuses (Australia.000 students and 4. the following hypotheses were tested. rampant corruption. Whitcomb. 2008). or perhaps due to China‟s rapid growth or the fact that studies have noted differences in values between Eastern Asian and Western cultures (Whitcomb. Finally. Turky and the U. et al. 2008). 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. MEASURES It was determined that students enrolled in the basic marketing course located in the U. Phau and Kea 2007. Perhaps this interest is partially based on the differences between the Chinese culture and Western cultural philosophically. and China would represent the sample. Students have been used in studies of ethics for numerous reasons. 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). Davis and Kroncke 2009). Erdener and Li 1998). China and Peru (Robertson. and widening inequality. First. Chinese behaviors have also warranted additional focus on ethical standards in China. Malaysia and the Ukraine (Axinn. Thailand. For example. Egypt and the U. Finland and the U. 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.S. and has approximately 23.S.S. 2004).S. et al.S. The research also indicates that in many cases. Other similar studies include the comparison of students from the U. 32) states the following: “Western investors hail China‟s strong economic fundamentals – notably a high savings rate. For example.. exceed the sensitivity levels found in other countries.S. Smyth. 266 .S. In addition to these factors. (Beekun. et al. H1: Perceptions of the importance of business ethics will be greater in the U.S.” Pei contends that the result is “crony capitalism.S. Erdener and Li 1998).500 business majors. Many previous studies have used students as their sampling base. 2010).” The review of the literature indicates that cultural differences in ethics exist. 2008). H2: Perceptions of the degree to which consumers are alienated from the marketplace will be greater in China than in the U. p.S. Based on these findings. Singapore.AFBE Journal Academic Papers been of considerable interest in the management literature (Robertson. (Stevenson and Bodkin 1998). they are often identified as „tomorrow‟s business leaders‟ (Grunbaum 1997. Australia and the U. and powerful work ethic – and willingly gloss over its imperfections. (Grunbaum 1997). (Sims and Gegez 2004. 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). huge labor pool. and Hong Kong) (Phau and Kea 2007). Persons 2009.

and had over 60 hours of college credit.S.AFBE Journal Academic Papers The university operates a home campus in the U. and was named the “Good Ethics is Good Business” scale.91 (Pettijohn. et al. Pettijohn and Taylor 2008). As shown in the table. class time was allocated for the completion of the survey. (1995) research reported an alpha coefficient of .61 (personal norm) (Bearden.8% 16. Burnaz. for the Chinese respondents the sample consisted primarily of females (77%). sample. The scale consists of 35 items designed to assess the degree to which consumers perceive that they are estranged from the market.83 (business ethics).5% 46. and has a branch campus located in a city in China with a population of over 6 million.84 (full-scale) . For the U. The scales had coefficient alpha measures of . Other research using the complete scale had an alpha coefficient of . 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.85 (Pettijohn.67 (informed choice) and . Other research reports an alpha coefficient of .S. students and 175 Chinese students during class time.7% 96.3% 76. While completion of the survey was voluntary. 2010).S. This scale (or portions of it) has been used in other research designed to assess ethics (cf.72 for the scale. The students‟ attitudes as consumers were measured using the “Alienation: Consumer Alienation from the Marketplace” scale developed by Allison (1978).2% Chinese Students Number Percent 37 122 154 5 23. Each student was pursuing a degree in business from the home university located in the U.1% Demographic Characteristic Gender: Male Female Age: 18-24 25-50 . The original scale consisted of seven items which are measured using a nine-point Likert-type scale. Lichtenstein and Teel 1983). (1995).5% 83. and each was enrolled in the same course (Introductory Marketing). . Measurement of student attitudes pertaining to general business ethics was facilitated by the use of a scale developed by Singhapakdi. Singhapakdi. et al‟s.9% 3. the majority of respondents were male. High scores on the scale indicate that the respondent believes that positive ethical behavior has a positive effect on the business‟ profitability. Pettijohn and Taylor 2008).S. Subjects responded to each of these items using a five point Likert-type scale. The survey itself was administered to 120 U. the majority of the respondents were between the ages of 18 and 24. Subsequent research identified three subscales consisting of a business ethics (5 items). This scale was derived from a scale developed by Kraft and Jauch (1992). FINDINGS The demographic characteristics of the participants are provided in Table 1. TABLE 1 DEMOGRAPHIC CHARACTERISTICS OF RESPONDENTS USA Students Number Percent 62 54 98 19 267 53. informed choice (5 items) and personal norm (5 items). et al.

6% 6. and Chinese students. To establish some degree of uniformity. As indicated in the table.S.1. 7 = strongly agree). based on the responses to the Good Ethics is Good Business scale. – Personal Norms C.3% 22.7% 7. However.61 146.S.6% 7.1 (9. As shown.70 level recommended by Nunnally (1978).2 (5.81 and .1 for the U. – Business Ethics C.5 for the U.95 alpha coefficient) for the Chinese sample. Based on this finding. the Good Ethics is Good Business scale had a mean of 36.8 (4.3) .8% 30. the findings indicate the U.S.9% 18 64 55 12 10 11. the results of t-tests comparing the mean scores on the scales indicate significant differences between the responses provided by U.9) .43 . The Consumer Alienation scale had mean values of 130.8) 45.1 (5. TABLE 2 SCALE MEANS AND ALPHA COEFFICIENTS USA Students Chinese Students MEAN (sd) ALPHA MEAN (sd) ALPHA 36.1 (6.7) 20.3% 24.1 (. 268 .5 (7.8) 21.3% 33. with .2) .S.7) 22. student responses were obtained using a seven point Likert-type scale (1 = strongly disagree.2) .76 SCALE: Good Ethics is Good Business Consumer Alienation (CA): C. The results pertaining to the subscales of the Consumer Alienation scale are also provided in the table.S. the mean score for Chinese students on this scale is 32.A.89 alpha coefficient) and a mean of 32. Overall.AFBE Journal Academic Papers Credit Hours Earned: 60 or less 61-80 81-100 101-124 Over 124 6 38 26 35 9 5.95 130. it appears that each of the scales have alpha coefficients which exceed the .90 alpha coefficient scores. As indicated in the table.8 (5.89 32. and Chinese students.81 . students who have a mean score of 36.60 . The first hypothesis held that U.5 (20.1.8) 15.A. Each of the scale items is provided in the Appendix. – Informed Choice The findings indicate considerable support for the hypotheses. Scale means.9) 50. it should be noted that the subscales generally have considerably lower alpha coefficient levels. sample (. students would believe that the linkage between ethical practice and business results would be significantly higher than would Chinese students.63 .3% 40.A.72 .5 (25. compared with U. standard deviations and Cronbach (1960) alpha coefficients are provided in Table 2.3 (7. As shown in Table 3. hypothesis one is supported.3% The students‟ perceptions pertaining to ethics were measured using the scales discussed in the methodology.S.90 .5 and 146. students are significantly more likely to believe that the practice of ethical behaviors is likely to result in positive returns for businesses.

5 (7.8 (4. businessperson‟s Chinese counterparts will behave ethically because it is believed to be profitable may not be as valid 269 . personal norms and informed choice levels were significantly less than were those scores provided by the U.9) 50.2 1. expectations.1 (5. 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.8) 45. The findings indicate that this hypothesis was also supported with a mean score for Chinese students on the alienation scale of 146. What are the implications of this finding? As stated previously.5 (20.5. This indicates that the perception that a U. firms operating internationally must cope with different cultural norms and correspondingly with differing ethical standards. For example. In the U.0 4.5 t (p) 4.2 (.0001) 6.S.8) 15.S.5 (25.8) 21.1 (9.A.2 (. students.S. students.2 (5.0001) 5. 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.9) USA MEAN (sd) 36.S. student sample. 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. this feeling does not seem to be as predominant in China as it is the U.2 (. – Informed Choice DIFFERENCE 4.AFBE Journal Academic Papers TABLE 3 TESTS OF HYPOTHESES China MEAN (sd) 32. Chinese students were significantly more likely to perceive that business ethics.0001) 2.S.S.S.7) 22. compared to the 130..0 16.7) 20. However.03) The second hypothesis contended that Chinese students were more likely to feel alienated as consumers than were U.0001) 4.A.S. The results of this research indicate that firms operating in China are likely to discover that ethical norms are different than in the U.8 (5.3 (.3) SCALE: Good Ethics is Good Business Consumer Alienation C.2) 146.9 (.8 4.A. students of the ethical climate existing in the U. As shown in the table.1 (6.3 (7. – Business Ethics C. Comparisons of mean scores on the three subscales of the alienation scale provided results which were also consistent with expectations.S. – Personal Norms C.2) 130.5 mean score obtained from U.S.

Foremost among the limitations is the sample used in the research. The findings suggest that ethical differences exist between the two countries. These differences should guide businesses as they interact in these countries. Such feelings of alienation lead one to the conclusion that Chinese students believe that they must be defensive as they react to businesses‟ stimuli. should lead business decision-makers to alter their behaviors as they interact in Chinese business settings. This research was designed to compare ethical standards existing between students majoring in business in China and the U. a similar feeling is not held by Chinese consumers. these differences manifest themselves in legal actions. firms may come to rely upon stringently worded contracts which specify required behaviors from both parties. and many time-consuming activities that threaten long-term relationships. different tastes.S. counterparts. additional expenditures on legal experts and greater record-keeping and enforcement activities. Such a difference may require an awareness that U. Consequently. absent trust and positive expectations. the expectation that U.AFBE Journal Academic Papers as it could be in the U. services and other items of value. it does have its limitations and these limitations lead to suggestions for future research.S. 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. While the research does provide information regarding an important dimension of behavior. the knowledge that business ethics are perceived differently in China than they are in the U. businesses may have regarding accepting requirements.S. and agreements may not be held to the same degree by Chinese businesses. difficult negotiations. One of the greatest cultural challenges may be derived from differences existing with regard to ethical standards and norms of behaviors. a social contract). Thus.S. The research also indicates that Chinese students feel more estranged from the market than do their U. ethical standards may not apply in Chinese situations. CONCLUSIONS AND SUGGESTIONS FOR FUTURE RESEARCH Firms operating internationally must cope with numerous challenges. Thus. challenges arise. while U. In many cases. 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. Thus. an understanding of the ethical standards which prevail in countries of interest is imperative to facilitate a healthy and productive exchange of products. because an awareness of the perceptions and norms of one‟s counterpart in another country can help establish standards and expectations of behavior.S. Thus. consumers may feel that some degree of trust exists between themselves and business (e. when the rules. Individuals and organizations interact based upon a perceived set of rules.S. promises. Their 270 . standards and norms that govern behavior.g. standards and norms are unknown. Different exchange rates. The necessity of strict contracts and other legalistic behaviors may then lead to strained relationships.S. their frame of reference may not be indicative of business ethics as they are currently practiced.. However. This finding indicates that Chinese students are more likely to feel that their goals are not being addressed by businesses functioning in China.

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). it does provide a basis for future research comparing ethics across cultures. Thus.S. future research should address differences as they exist between practicing businesspeople in both China and the U. Such ethics should provide insights into anticipated behaviors and norms that can lead to better decisions for each business counterpart. In conclusion. a recognition of different norms and ethical standards may assist businesses as they adapt to engaging in business in alternative nations and cultures. while the research does have its limitations. While no culture has a monopoly on ethical behavior and while no one behavior is valid for all nations. their work experiences and their life experiences. 271 .

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Thailand Laddawan Someran International Graduate Studies Human Resource Development Centre Burapha University. Ten MMR studies conducted from 2002-2010 in the USA and Thailand were selected for review and evaluation. (3) more studies using other types of MMR strategies should be conducted. particularly the sequential explanatory strategy. (2) the MMR studies conducted in the USA had a clearer process of analyzing qualitative data than the MMR studies conducted in Thailand. Jamnean Joungtrakul Doctor of Business Administration Programme Rattana Bundit University (RBAC). and (6) used “sequential” design. 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. six critical areas of similarities and four critical areas of differences were identified. 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. To improve the quality of MMR studies it is recommended that: (1) research design should include research paradigm identification and justification. The findings reflect the improvements needed in the two major phases for the conduct of research: (1) research design and (2) data analysis. other than 275 . Thailand ABSTRACT The objective of this study is to explore the current practices of mixed methods research (MMR).co. As a result of the comparisons. (2) identification of specific research objectives. The results of this review were then compared to find the similarities and differences between the two sets of MMR studies. (4) interviews were the major instrument for qualitative data collection. 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. The concept of MMR which includes its definitions.th Supharuk Aticomsuwan International Graduate Studies Human Resource Development Centre Burapha University. The similarities of the MMR studies were: (1) the term “mixed methods research” was identified in the research topic. (3) questionnaires were the major tool for collecting quantitative data. and (4) only two MMR studies conducted in Thailand clarified how the two types of data were mixed. (5) used descriptive statistics for quantitative data analysis.AFBE Journal Academic Papers MIXED METHODS RESEARCH: A COMPARATIVE STUDY OF MMR CONDUCTED IN THE USA AND THAILAND Dr. (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. design and critical features were reviewed. Thailand drjj@hotmail.

it is usually employed for answering complex social research questions seemed a non-issue in many cases (Tashakkori & Teddlie. and practices to implement positive change (Tashakkori & Teddlie. 2003). Sequential Explanatory. and mixed research (Johnson & Christensen. Therefore.. 2003. This paper aims to understand the current practices of MMR conducted in the USA and Thailand. 1981). Concurrent Triangulation. In addition. Similarities and differences are identified. Tashakkori & Teddlie. Hunter & Brewer. as that mixed approach closely parallels everyday human problem solving in a way that neither qualitative nor quantitative methods alone can do (Tashakkori & Teddlie. Some scholars say that combining a qualitative and quantitative approach is not new.AFBE Journal Academic Papers sequential design. and conclusions and recommendations were made. 2004). Concurrent Embedded. integrative research (Johnson & Onwuegbuzie. the term “mixed methods research” defined by many researchers or methodologists. 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. and (4) more qualitative research should be emphasized in graduate and research training courses than currently provided. 2010). mixed methods approach (Creswell. It begins with a review of the concept of MMR and design followed by the identification of the critical features of MMR. discussed. 2010). Keywords: Mixed Methods Research. 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. 2003).g. 2004). multi-method research (e. Concurrent Transformative. as it provides more robust opportunities for devising policies. Morse. how to conduct a mixed methods and whether paradigm can be mixed or integrated in a mixed method study or not. Onwuegbuzie. has been an ongoing debate and discussion as it has been defined in several ways such as ethnographic residual analysis (Fry. triangulated studies (Sandelowski. but only recently it has been called mixed methods (Johnson. 2003). Sequential Exploratory. INTRODUCTION In recent years. Tashakkori & Creswell (2007) stated that a mixed-method is still developing and will do so for years to come. 2007. particularly in Thailand. THE CONCEPTS OF MMR Mixed methods approach is usually employed in the social and human sciences. 276 . At present there are several unresolved issues such as the core issue of defining the nature of MMR. 2003). Sequential Transformative. to enhance the development of MMR. & Turner.

multi-method studies also increase the time and resources needed for research (Bryman. 2007). 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. In addition. the researcher has to keep in mind the impact of these factors in designing MMR. (2) complementarity: the researcher gains a fuller understanding of the research problem and/or clarifies research results (i. 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. To come up with an acceptable definition Johnson. inference techniques) for the broad purposes of breadth and depth of understanding and corroboration. 14). Greene (1989). 3). investigators. data collection. 1989). and particularly method will be canceled out when used in conjunction with other data sources. investigators.. as it helps the researcher to enhance the credibility of the research findings. analysis. which varied considerably in terms of specificity and content. 2004. Lohfeld. & Brazil. Their concept of triangulation is referred to as between...AFBE Journal Academic Papers 2010). 277 . Thus. arguing that “the bias inherent in any particular data source. This is similar to Greene (1989) which proposed the five major purposes or rationales for conducting MMR. as opposed to within-method triangulation. et al. and methods” (p. (2007. use of qualitative and quantitative viewpoints. 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. several definitions have been presented by different scholars of MMR. However. Hesse-Biber (2010) stated that a mixed methods strategy is a rich field for the combination of data. (2007) conducted a study by asking methodologists from the MMR field employing Tashakkori‟s “Bridges Website”. Campbell (1959) are credited with being the first to coin this term „triangulation‟ which is broadly defined by Denzin (1978. seeking elaboration. (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. since this design “can provide stronger evidence for a conclusion through convergence and corroboration of findings” (Johnson & Onwuegbuzie. Based on the study Johnson. Denzin also suggested the use of mixed methods. enhancement. 2002). illustration. p. 291) as “the combination of methodologies in the study of the same phenomenon”. Johnson & Onwuegbuzie (2004). discovering paradoxes and contradictions that lead to a re-framing of the research questions) (Greene. p.. p. 2010. Sale. et al. (3) initiation : initiating a new study adds new insights to existing theories on the phenomenon under examination (i.e. They presented 19 alternative meanings from leaders in the field.g. and clarification of the results from one method with results from the other method).e. p. 2007. 2007. In addition.33)..or acrossmethod triangulation. 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. 21). Creswell & Plano Clark. However.

1994) as different paradigm choices may lead to a different type of strategy and research method including methodology. It is a plan for collecting and analyzing data in order to answer the research question (Holsti. 1996.36). 1997) as the fifth paradigm in their work. Researchers often refer to four paradigms and these are positivism. with whom and where” (Maykut & Morehouse. A paradigm may be viewed as “a set of basic beliefs (or metaphysics)” that deals with ultimate or first principles. 1994. The research strategy selected “provides guidance in selecting particular techniques or methodological practices for specific settings. 2009. cannot occur without reference to those paradigms …” (p. (2) Concurrent Embedded. as adapted from Morse (1991). and it “moves separate efforts toward a common. p. Creswell (2009) classifies research paradigms into four major categories: (1) postpositivism. Later. integrated purpose” (Patton. Creswell & Plano Clark (2007)). Heron & Reason. Thus in designing any type of research the researcher must choose an appropriate paradigm to guide such research (Joungtrakul. 1994).15). including actions that we take as inquirers. and constructivism (Guba. for its holder. It is a “planning for certain broad contingencies without. 2002. (3) Concurrent Transformative. (3) advocacy/participatory. It includes “the overall approach to be taken and detailed information about how the study will be carried out. Each strategy will be described briefly.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. postpositivism. 1990. Maykut & Morehouse.36). and (4) pragmatism. Lincoln & Guba (2000) argue that “our actions in the world. Guba & Lincoln. (2) constructivism. 1990. The world views or schemata are so powerful that they demand allegiance in terms of epistemological and methodological procedures.22). It permits seemingly isolated tasks and activities to fit together. p. Conducting a research study without a guiding paradigm is just like sailing without direction. however.226). the nature of the „world.‟ the individual‟s place in it and the range of possible relationships to that world and its parts” (Guba & Lincoln. Research strategy Having made an appropriate paradigm choice a selection of proper and specific strategy is also essential for the design of research. p. Lincoln & Guba (2000) added participatory action research (Heron. and Teddlie & Tashakkori (2009). using mixed methods notation. (5) Sequential Exploratory.107). [And that] method represents a strategic choice” (Patton. Research paradigm A research design should begin with a paradigm choice (Maykut & Morehouse. (4) Sequential Explanatory. 1989). 1985. Creswell (2009) identified six major strategies of mixed methods research: (1) Concurrent Triangulation. 278 . 1990. 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. p.64).” A strategy provides the basic direction. It represents a worldview that defines. p. 1969). p. critical theory. indicating exactly what will be done in relation to each” (Lincoln & Guba. 1994. and (6) Sequential Transformative strategy. Based on the classification provided by Creswell (2009) the pragmatism is the most suitable paradigm for an MMR study. techniques and research tools.

how the two types of data were mixed. The second type is called the Concurrent Embedded approach (symbolized as QUAN + qual or QUAL + quan). notation. followed by the collection and analysis of the qualitative data in the second phase which builds on the results of the initial quantitative results. Qualitative data will be employed to examine its findings in more detail. it requires great effort and expertise to adequately study a phenomenon with two separate methods (Creswell. 2009). which is a two-phase project with a theoretical lens overlaying the sequential procedures. These features can be used as criterion for comparison and evaluation of MMR studies. 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. except that the phases are reversed – qualitative data collection and analysis are emphasized. together with expanding on the qualitative findings. The third type is called the Concurrent Transformative approach. However. qualitative data collection.AFBE Journal Academic Papers The first mixed methods strategy is called the Concurrent Triangulation approach (symbolized as QUAN + QUAL or QUAL + QUAN). The fourth type is called the Sequential Explanatory strategy (symbolized as QUAN → qual). which is similar to the sequential explanatory approach. This design is typically used to explain and interpret quantitative results by collecting and analyzing follow-up qualitative data. Utilizing this strategy will help the researcher gain a broader perspective of the different types of data or from different levels within the study. 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. This design uses the quantitative data and results to assist in the interpretation of the qualitative findings. quantitative data analysis. depending on the researcher‟s use of a specific theoretical perspective. qualitative data analysis. 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. reasons for collecting both types of data. It is useful to explore a phenomenon. 279 . quantitative data collection. as well as the concurrent collection of both quantitative and qualitative data. or some combination. particularly when unexpected results arise from a quantitative study. and visual diagram. primary study purpose. 2009). It begins with the collection and analysis of the quantitative data in the first phase of the research. Creswell & Plano Clark (2007) identifies the following critical features of MMR: topic. which is a popular strategy for the mixed methods design (Creswell. differences. The researcher may use either method in the first phase of research. The last type of mixed methods research strategy is called the Sequential Transformative strategy. The fifth type is called Sequential Exploratory strategy (symbolized as QUAL → quan). This strategy is familiar to most researchers and may result in well-validated and substantiated findings. which has a primary method that guides the project and a secondary database that provides a supporting role in the procedures. which may take on the design features of either a triangulation or an embedded approach.

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 . Abbott (2010) Dilworth (2010) Constructing a Evaluating creative self. To describe and explore how adult education learning communities contribute to programs becoming learning organizations . 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. 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.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. 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. The data and information used for comparison is mostly based on the methodological part of the studies.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.

 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. Mean. The qualitative data were needed to explain the quantitative findings. protocol Interpretation and explanation of the quantitative and qualitative results. Quantitative data and themes of the qualitative results were compared and the data sources treated equally in response to each research question. design that 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. 281 . 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.AFBE Journal Academic Papers Quantitative  Descriptive data statistics analysis Qualitative  Thematic data analysis analysis  Descriptive statistics  Multiple Logistic Regression  Multiple Linear Regression  Typologies. 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.  Codes and themes  SD.

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.PES-NWI.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. regarding industry for Thailand. non-TQM businesses using the quality management model stipulated by the MBNQA criteria.  One-way ANOVA  Item-total correlation analysis 282  Frequency distribution  Descriptive statistic  Bivariate analysis  Multiple Regression analysis . 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. quality manuals and annual reports  Z-Score  Descriptive  Frequency statistics distribution  T-test  Descriptive statistic.and MBI)  Demographic data questionnaire. To evaluate the factors explore compare. 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. parental TQM versus involvement.  Focus group interview started during the survey collection time Quantitativ  Descriptive e data and analysis inferential statistics (Mean. 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.

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. and (c) distancelearning surveys. results. 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. and retrieving data. sources: to assure data (a) reliability. 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. managing. 1996) – organizing. (b) focus group discussio ns. Reasons for The collecting qualitative both types analysis was of data needed to confirm and amplify on an initial. 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. . individual interview s. identifying relevant concepts according to key themes and patterns.AFBE Journal Academic Papers  Non-response analysis  Reliability test Qualitative  Coding data process analysis (Amanda & Atkison.

triangulate data or confirmatory results. (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. and latent growth curve modeling analysis. As shown in Table 1. In addition. and crosscase comparison. (3) research paradigm: only two research studies explained the research paradigm and that “pragmatism” was employed. the other two studies identified “concurrent” design which are nested and triangulation. (9) qualitative data analysis: most of the research studies explained the process of analyzing the qualitative data by using coding process. (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. thematic analysis. 284 . and an online survey was employed. (10) reasons for collecting both types of data: the researchers of each study mentioned why they had to collect both types of data. confirmatory factor analysis (CFA). (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.AFBE Journal Academic Papers the three sources of data (individua l interview s. Another one did not identify the research strategy but explained the research procedure in which that the research strategy is “Concurrent – Triangulation”. 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. and ANOVA. (8) quantitative data analysis: all studies employed descriptive statistics as the basis for quantitative data analysis. In addition. (4) research strategy: nine studies identified the research strategy in which seven of them used “sequential” design. Four of them also used advanced research statistics which were: multiple logistic regression. and (11) how the two types of data were mixed: the authors of each study explained how the two types of data were mixed. one study used the word “exploratory” in the research topic. and some included inferential statistics. such as t-test. The rest of the studies did not identify any term to indicate the mixed methods study in the research topic. and the distancelearning activities surveys) to uncover common themes and findings. observation and document review were employed for the data collection process. a program evaluation tool was used. such as to use the qualitative data to explain the quantitative findings. (6) quantitative data collection: All research studies used the questionnaire as a quantitative research instrument. focus group discussio ns. z-score.

correlation  Structural equation modeling 285 . factor s Standard analysis (Freque deviation. 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.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. Range) Quantitativ e data analysis  Descriptive statistics  Basic statistics.  Confirmatory ncy. 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. 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.

and Jaikarnpan (2006) Strategy and Success in Knowledge Management for Organization Development: A Case Study of Ban Tak Hospital.  Content analysis  Analytical induction Percent  Frequency age. Tak Province Topic General purpose of the study To explain the NA HR outsourcing decision model in a Thai context NA NA 286 . distribution Mean.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. (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 children‟s 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.

model  Arithmetic deviation mean. 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. deviation minimum. The second qualitative 287 .  Documentar y studies  Descriptive  Descriptiv  Frequency  Descriptive Statistics e statistics  Percentage statistics  Multiple  Frequency/  Mean (frequency. maximum.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. 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 . mean standard  Standard deviation. regression Percentage  Standard percent. skewness.

and some studies used either individual (in-depth) or a focus group. (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. The other five studies did not explain the procedures for analyzing qualitative data. (3) research paradigm: none of them presented a guiding research paradigm. analytical induction and descriptive issue by issue. exploratory factor analysis (EFA). and (11) how the two types of data were mixed: only two studies mentioned how the two types of data were mixed. and some included inferential statistics. (7) qualitative data collection: each study used an interview (semi-structured or unstructured interview) as the primary method for the qualitative data collection. (6) quantitative data collection: each study used the questionnaire as a quantitative research instrument. As shown in Table 2. (8) quantitative data analysis: all studies employed descriptive statistics as the basis of quantitative data analysis. Two of them did not mention any specific research strategy. and structural equation modeling (SEM). three studies emphasized QUAN at the first phase. Some of them included the strategy of MMR in the topic such as the words “exploratory” or “explanatory”. one study used qual. (4) most of the MMR reviewed used an interview as the major instrument for qualitative data collection. confirmatory factor analysis (CFA). Six areas of major similarities and four major areas of differences were identified. (5) notation: four studies used QUAL at the first phase. (9) qualitative data analysis: five studies explained how to analyze the qualitative data by using content analysis. a comparison of the results using the eleven features of the MMR studies as a basis was made. (10) reasons for collecting both types of data: only one study gave a reason for collecting both types of data which was for triangulation. (3) most of the MMR reviewed used questionnaires as the major instrument for quantitative data collection. Some studies also included an observation method in order to have a better understanding. COMPARISON OF MMR CONDUCTED IN USA AND THAILAND Based on the review made in Tables 1 and 2. followed by QUAN and then used QUAL at the final phase. (5) most of the MMR reviewed used descriptive statistics for quantitative data analysis. 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.AFBE Journal Academic Papers findings were used to confirm or triangulate the quantitative findings. and (6) most of the MMR reviewed used “sequential” design particularly the sequential explanatory strategy. (2) the majority of the MMR reviewed used the general purpose of the study rather than specific research objectives. Three of them also used advanced research statistics. such as multiple regression. The six major areas of similarities are: (1) most of the MMR reviewed identified the term “mixed methods research” in the research topic. (4) research strategy: seven studies identified “sequential” as the research strategy. 288 .

(2) most of the MMR studies conducted in Thailand did not provide detailed explanations of the qualitative data analysis. In addition. only one MRR study conducted in Thailand provided an explanation of how the two types of data were mixed. 1967. These findings support that MMR is still in its adolescence stage and many issues are confused at the moment (Collins. 1998. 2009. case study. 2009. 2010. Johnson & Onwuegbuzie. it was noted that out of the twenty MMR studies reviewed fourteen studies were sequential studies (seven studies each in the USA and Thailand). In the area of strategy. Unlike the MMR studies conducted in the USA. Morgan. Normally. DISCUSSION The findings of this study reflect the need for improvement in conducting MMR in two major areas: research design and data analysis. identification. Strategy tells how the researchers are to conduct their research which will lead to the proper selection of a research method (Creswell. 1990). for example. 2004. 2006. In designing any type of research it is essential that a guiding paradigm be identified and justified (Creswell. Creswell. grounded theory study data analysis usually begin with open coding followed by axial coding. Thus. Strauss & Corbin. justification and explanation of strategy are essential in the MMR design. selective coding. they did not clearly specify the procedures for data analysis.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. (3) only one MMR study conducted in Thailand provided a reason for collecting both types of data. 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. phenomenology. & Jiao. and (4) only two MMR studies conducted in Thailand clarified how the two types of data were mixed. 2007). each strategy has its own type of data analysis (Joungtrakul. 2003. an explanation of how the two types of data were mixed should also be made in the MMR study. Marshall & Rossman. Onwuegbuzie & Leech. (Creswell. etc. 1991. 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. Teddlie & Tashakkori. 2010). Glaser & Strauss. 2006) having presented their 289 . Data analysis in qualitative research is usually based on a research strategy. there are several strategies for qualitative research such as narrative. Despite many scholars (Morse. and theoretical proposition (Creswell. Joungtrakul. grounded theory. Unlike the quantitative part of research. Although five of them provided certain levels of explanation. Maykut & Morehouse. A number of critical issues in both areas will be selected for discussion in this section. Onwuegbuzie. 2007). ethnography. 1998. It should be noted that out of twenty MMR studies conducted in Thailand and the USA only two studies identified and justified research paradigm. it was clearly evident that most of the MMR studies conducted in Thailand did not clearly explain the justification for using a specific strategy. In addition to the identification and explanation of qualitative data analysis. 2009. 1994) as a paradigm provides direction for researchers to select the appropriate strategy and method for their study. 1999).

Chiangmai. Nebraska. Region 5. 81-105. Boonrueng. A study by Joungtrakul (2007) found that most of the Ph. N. It is noticeable in this study that most of the MMR studies conducted in Thailand did not specifically display a literature review on MMR. REFERENCES Abbott. thesis. (3) more studies using other types of MMR strategies should be conducted. T. (1959). 2009). 290 . no reference was made to specific theories and concepts of qualitative data analysis. (2) the process of qualitative data analysis and the combination of two types of data should be clearly explained in the MMR study. (2007). 1(1). & Fiske. One reason that other types of MMR were not employed may be that they take more time. Similarly. many unresolved issues are still being discussed. Chiangmai University. Barriers to integrating quantitative and qualitative research. Organization development diagnosis of the Office of Court of Justice. to enhance the development of MMR. and the reasons should also be clearly explained and justified as to why both types of data collection are needed.A. resources and effort. University of Nebraska. and (4) more qualitative research should be emphasized in graduate and research training courses than currently provided. There are very few Thai text books available on qualitative research. courses in Thailand taught only one research course and that most of the research taught emphasize only the quantitative part. 8-22. most available Thai research text books are mainly quantitative. D. (2010).AFBE Journal Academic Papers views on how to collect. Although an explanation was made on the procedures for data analysis. Constructing a creative self-efficacy inventory: A mixed methods inquiry. A. The reasons may be that qualitative research was not emphasized at the graduate level in Thailand. For example. Lincoln. and interpret quantitative and qualitative data in a single study. H. 56. Campbell. 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. Bryman.. At the same time similar incidents occurred in the qualitative data analysis. D. D. To improve the quality of MMR studies it is recommended that: (1) research design should include research paradigm identification and justification. particularly in Thailand. D. especially the concurrent strategy (Creswell. analyze.. Convergent and discriminant validation by the multitrait-multimethod matrix. (2007). Psychological Bulletin. Journal of Mixed Methods Research. many MMR research designs explain the process of conducting the research without referring to the theories and concepts of MMR. M. 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. other than sequential design.

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In the framework conditions. the worries of environmental degradation. availability of a business park or business cluster. This study was done to observe research and development activities within the framework of the national innovation system. the R&D units of the private sector and big industry players. as well as with the national oil palm business associations are also important players. Some experts. Bogor Agricultural University. focus group discussion and surveys on the relevant objects. BPPT. development and business networking for sustainable oil palm agribusiness has to be established in Indonesia. providing an intermediaries research institution.ac. at the present. institutional networking. leading universities in both national and local levels. and oil palm agribusiness and agro industry practitioners were involved in the study. DEVELOPMENT AND APPLICATION OF NATIONAL INNOVATION SYSTEM OF SCIENCE AND TECHNOLOGY FOR THE DEVELOPMENT OF SUSTAINABLE OIL PALM AGRIBUSINESS IN INDONESIA Professor E. using the successful role of the Malaysian Palm Oil Board (MPOB) as a reference.AFBE Journal Academic Papers RESEARCH. and business rivalry from other vegetable oils producers. and providing complete supra and special infrastructure.FN-LIPI. due to the issues of climatic change. the Indonesian Oil palm Research Institute (IOPRI) plays as a main player.T. as well as business ventures in developing sustainable oil palm agribusiness were still weak. global challenges have put a lot of pressure on the sustainability of oil palm agribusiness in Indonesia. 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. N. However. as well as postgraduate students pursuing Masters’ and Doctoral degrees in Agribusiness management and Agro industrial technology. and which have R&D and business network linkages with government R&D and policy units. Rahaya RAMP -IPB ABSTRACT Strong efforts of the government. science and technology infrastructure and the availability of business incubators were not well established.idf H. Therefore. while the commercialization of R&D results. L. in which. a national innovation system that supports research. D. Some R&D activities and business networking have been identified. The only good results of the assessment were found on the human resource development of oil palm. Indonesia egum@mma. Rochman. Some methods were used in the study. The results of the study show that the assessment’s scores of the postgraduate students on the main elements of the national innovation system were higher than that of the experts and business practitioners. the experts and business practitioners required that the Indonesian government give better political support in improving the education and R&D system.L. namely assessment using questionnaires. industrial system. private sector. Bogor . Researcher.Hasin. 296 .ipb. it was found that R&D promotion. Gumbira-Sa‟id . and to find the networking of R&D and business activities among the national innovation systems’ actors in the Indonesian oil palm agribusiness.

According to Sharif (2006). especially in applying the innovations generated. which was USD 7. In 2020.AFBE Journal Academic Papers Key Words: National Innovation System. R&D Units in the Academic Sector. and R&D Units in the Private Sector). (4) Information Services Agencies. May.a figure which is much higher than it was in 2007. research and development. In May 2009. (5) Venture Capital Financing Agencies. 2009). There are six active intermediaries supporting the innovation triangle. 2009). 297 . 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. and giving employment to more than 3. (4) Global vision on global warming. has attracted complaints and criticism from foreign parties.52 million hectares of oil palm plantation. has led Indonesia to replace Malaysia as the highest producer of palm oil in the world since October 2007. (2) Transparency and auditing.3 billions (GAPKI. INTRODUCTION The fast development of the oil palm agribusiness in Indonesia in the last ten years.3 million workers. and business competition from other vegetable oils. and anticipates the concerns on global warming. (6) Hyper competition. ecological risks. et al. (5) Unlimited capital for expansion. (2009) outlined that the World Wildlife Fund is concerned with three key elements of land requirement for oil palm agribusiness. environmental degradation and any other negative risks associated with the oil palm agribusiness development in the future. environmental degradation. especially now in the Asian region. due to the risks of global warming. In 2009. among others. 2009). development and application can be approached using three essential innovation triangle linkages (R&D Units in the Public sector. namely biodiversity. business networking. 9 billions. it is expected that Indonesia will produce 50 million tons of CPO (Minister of Industry RI. and poverty implication. IOPRI (2009) reported that Indonesia produced nearly 19 million tons of crude palm oil (CPO)from about 7. and (6) Standardization and Certification Agencies (Gumbira-Sa‟id. RESEARCH METHOD This study uses the descriptive research method. change in carbon stocks and land right issues. 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. especially with regards to technology and business innovation. export of CPO and its derivatives became USD 12. focus group discussion. in general the network development of the national invention and innovation system of science and technology research. working both on and off farms (Info Sawit. 2009). Ardiansyah. et al. and (8) High flexibility in broad utilization of CPO as food.. This method involves a variety of techniques as described below. The ambition to produce 50 millions tons of CPO by 2020 which was made in 2009. There are several challenges in developing the oil palm agribusiness in the years to come. (2) Intellectual Property Regulation Agencies. (3) Complicated shareholders. 2008): (1) Environmentally friendly and considering the RSPO guidelines or protocols. (7) Driven by scientific innovation. namely (1) Design and Tool Engineering Agencies. biodiversity. as follows (Gumbira-Sa‟id. feed or fuel. sustainable oil palm agribusiness. with specific reasons. (3) Knowledge Networking Agencies. This study is aimed at exploring research and development activities and business networking in oil palm agribusiness in Indonesia.

2001) and developed to be a diagram of the National Innovation System (KNRT. 2008). represented by three academics and three executive officers of private companies) were involved in the discussions in Bogor. 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. and R&D Units in the Private sector). 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. or left side number). and R&D level in the national development based on R&D national programs.AFBE Journal Academic Papers a. Post graduate students were involved in the analysis to represent their view on the future sustainability of Indonesian oil palm agribusiness. Two respondent groups involved in the study. c.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. b. Indonesia. Data Collection Through Questionnaires 16 respondents were involved in the assessment of the elements of NIS. the existence of the elements in innovation triangle (R&D Units in the Public Sector. R&D development and institutions networking conditions. All the assessment scores were calculated to obtain the average scores from the respondent groups. f. 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. that is adopted from the National Innovation System Model (Arnold and Kuhlmann. Based on the analysis results of the respondents‟ assessment on NIS components performance (Figure 1). to know the overall evaluation scores and to compare the evaluation scores from both respondent groups. e. R&D Units in The Academic Sector. 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. and 13 experts. graduate respondents assessment on the general performance 298 . and also academic staff at many universities. to review the results of NIS elements assessment. Data obtained from the questionnaire was about the assessment scores of the respondents on the success or the achievements of the NIS components. For the purpose of analyzing the assessment scores of the achievement or the success of the national NIS elements. RESULTS AND DISCUSSION Perspectives on The General Main NIS Components The overall results of the respondent‟s perspectives on the national innovation system performance in the Indonesian oil palm industry cluster is shown in Figure 2. and their readiness in improving sustainable agribusiness practices for oil palm. representing academia. was used. government research institution and private company executives participated in the FGD in Lampung. Focus Group Discussion Focus Group Discussion was done in which six experts of the Indonesian Oil Palm Society (MAKSI. and to explore more detailed information on the R&D networking in the Indonesian oil palm agribusiness. Indonesia.

the experts and the business practitioner respondents assessed both of the NIS components as relatively low. 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. On the assessment of subcomponents performance in R&D institution and industry system components. both of the respondent groups assessed that the subcomponents of the political system and intermediary components had low levels of performance. namely 1. Despite the importance of supra and specialty infrastructure to support sustainable oil palm agribusiness.AFBE Journal Academic Papers of NIS components was better than that of the experts and business practitioners. however.8).. information and intellectual right services. because not all of the graduate student respondents were able to access this. 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. They assessed the performance of supra and specialty infrastructure components with a medium level of achievements (1. the graduate student respondents assessed the performance level as being moderately successful.5 or under achievement. The average score for the whole NIS components performance based on the graduate student respondent‟s assessment was 1. Statistical analysis of the respondent‟s assessment scores indicated that the perspectives between the two respondent groups were significantly different. the assessment‟s score on the business venture from respondents‟ perspectives was not addressed as a true business venture activity as is normally known. 299 . Within the supra and specialty infrastructure. Some respondents stated that the business venture scheme model in Indonesia does not exist. However. Unfortunately. the assessment results of the experts and the business practitioner respondents had an average score of 1. the graduate student respondents assessment on the performance of supra and specialty infrastructure components could not be used.8 (with means medium or moderate achievement). even though the government‟s ambition is to place Indonesia as a permanent world leader of palm oil producer and this is very strong (Ministry of Industry. On the other hand.8 (moderate achievement) from the graduate student respondents. or there is a highly uncertainty level in the assessment performance of supra and specialty infrastructure components. From the four NIS components groups. the NIS of the political system and R&D framework conditions has an average assessment of 1. 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. but was misinterpreted as the general and common banking or funding institution‟s activities. 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. subcomponents of standardization and certification.6 (low or under achievement). 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. On the other hand. and the venture capital were assessed with a medium performance (moderate success) level by both of respondent groups. 2009).

and business incubation in the oil palm agribusiness. networking cooperation. the needs of the NIS components and their weaknesses in developing sustainable oil palm agribusiness.7 < medium ≤ 2. Both groups of respondents assessed that the HRD development has a medium achievement level.9 1.0) 2.3. namely R&D promotion. < high ≤ 3.3 The assessment of performance on the R&D framework condition was given as a medium achievement of success level by graduate student respondents.9 R&D Networking & Design Engineering HKI & Information Services Funding (Venture Capital) 1. so their score of assessment was higher than that of the experts and business (industry) practitioners. The graduate student respondents assessed those subcomponents with a medium success level. Business Park availability. The difference in those assessments could be analyzed in more detail from the assessment of the six R&D framework subcomponents. but it was assessed as low by the experts and business practitioner respondents. 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 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. 1. while the experts and the business (industry) practitioners assessed it differently.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. In general.6 1. The only similar results occurred in the assessment on human resource development. R&D products commercialization. R&D Institution and Intermediary Elements (Promotion and Networking) 300 . Perspectives On The Political System.0 ≤ low ≤ 1. human resource development.7.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.

and government‟s active roles in technology transfer within the oil palm industry) which gave moderate success performance (1.3.7 < medium ≤ 2.5 2. Once more.9 1.8).5 1.3 1.1 Perspective of R&D performance : 1.8 2.3 < high ≤ 3.6 1.5 1.1 1.AFBE Journal Academic Papers The Perspective scores of the oil palm industry cluster on political system. MPOB.1 1.9 1. in 2008 published and launched a booklet claiming so many success factors in developing the oil palm agribusiness in Malaysia (MPOB. 2008). the score from the experts and the business (industry) practitioner respondent‟s assessment on the link and match between government. 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 SME‟s assistance in research application Score I 1.6 1.3 1. 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.0 ≤ low ≤ 1.3 1. R&D institution and intermediary elements subcomponents performance from both groups of respondents are shown in Table 1.6 1. Political System Different to that of the graduate students‟ assessment results for the two subcomponents in the political system (link and match between government.8 1.9 1.5 2.3 1. as the Malaysian government provides for MPOB and other Malaysian oil palm industry cluster actors.6 1.5 1. the experts and the business (industry) practitioner respondents assessed those subcomponents with a low value performance (under achievement) (1.6 1. and university.3) . industry.8 1.8 II 1.3 1.9 1. 301 .0 1. 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.1 1. so the compatibility of the R&D results with industry needs are low.6 1. Between the two subcomponents of political system assessment. and university was lower compared to that of the government‟s active role in technology transfer. with the following discussion. industry. 2.7. industry.8 1.8 1.5 1. 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. 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.0 I = Graduate student respondents 1. for example.

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. R&D cooperation with regional. They include readiness of business actors to adopt research results. 2009) have been putting in a lot of effort to increase its performance. Perspectives On The Industry System. 2009). especially with regard to the works of IOPRI. Lonsum and Sampoerna Agro have established their own R&D stations (Liwang. Intermediary Elements (Promotion and Networking) Almost all the subcomponents in the intermediary elements performance assessment had a low score by both groups of respondents. it was not successful enough to increase its performance on the promotion and networking spread of sustainable oil palm agribusiness. 302 . R&D institutions and government. national R&D capacity. Unfortunately. Only two subcomponents namely R&D cooperation with local R&D institutions and SME‟s assistance in research application were given moderate success by the graduate student respondents. Those three subcomponents were technology inventory which is applied in R&D. business actor access to technology information. Wilmar Group. The four subcomponents were resource of oil palm research in Indonesia. Although IOPRI (IOPRI. 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 development based of science. and cooperation with SME‟s agribusiness might be the main reason why big oil palm organizations such as SMART. and Supra and Specialty Infrastructure The average score of the industry system.AFBE Journal Academic Papers II = Expert and business (industry) practitioner respondents Research and Development Institutions From seven subcomponents performance assessment on R&D institutions. technology inventory which is applied in R&D. Subcomponents of networking between business. and SME‟s assistance in research application were assessed as having low achievement performance by the experts and business (industry) practitioners.. and national innovation capacity. and scientific and popular publications to increase society awareness and intelligence on sustainable oil palm agribusiness in the future . Framework Conditions of R&D. et al. The results indicate that R&D of oil palm in Indonesia has a basic strength and foundation to become developed. technology and competitiveness. three other subcomponents performance were assessed as under achievement by the experts and business (industry) practitioners. innovation of R&D especially in the downstream processing of crude palm oil that can enter the commercial stage. 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. technology utilization progress monitoring. national and international R&D institutions. especially in international R&D cooperation (for example with Malaysia parties).

8 Cooperation with small and medium scale enterprises (SME) 1.= no answer from engineering institution . academic and industry 1.Tools and machine design andthe graduate student respondents (some respondent . such as MBL 303 .0 ≤ low ≤ 1. 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.0 Institution < high Service .1 1.7. Supra and Specialty Infrastructure In general. and business incubation in the oil palm industry.Perspective right & information services .7 < medium ≤ 2.9 1. including oil palm agribusiness as a backbone of the economy. 1.6 Supra and Specialty Infrastructure Intellectual propertyof R&D performance: 1.6 1.8 1.Information≤ 3. availability of business parks and business clusters.6 1. Up to the present time.6 R&D product commercialization 1.0 Industry based of science and technology and competitiveness 1.6 Provision of complete science and technology infrastructure 2.5 Business actors access to technology information 1.6 1. Those components were tools and machinery design and engineering institutions and science networking institutions in the oil palm agribusiness. national promotion about strategic R&D.6 1. Malaysia has some companies that can supply machineries and equipment needed by oil palm industries.4 Creation of link between R&D institution.5 1.9 1.5 Availability of business park and business cluster 1.6 b c d Industrial System Readiness of business actors to adopt research results 2. R&D FRAMEWORK CONDITIONS .7 1.Science Networkingto give the right assessment) difficult Institution Standardization and certification institution - 2.8 1. government.8 Framework Condition National promotion about strategic R&D 2.3. academia and industry.8 2. As an example.6 1. R&D product commercialization.AFBE Journal Academic Papers TABLE 2 : THE RESPONDENTS’ ASSESSMENT SCORES ON INDUSTRY SYSTEM . 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.0 1.4 1.4 Human resource development 2.5 1. government. Subcomponents in R&D institution performance assessment that had a moderate level of performance by both groups of respondents were human resource development.3 1.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 . the role of a business incubator for government owned oil palm plantations is held by LPP Yogyakarta and LPP Medan.5 2. and science and technology infrastructure. 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 1.2 Business Incubation 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. However. the average performance of assessment score on supra and specialty infrastructure in the oil palm agribusiness was categorized at a moderate level of performance. there were two subcomponents that had low scores of performance.

Academic group at IOPRI networking are some Indonesian universities who have developed oil palm R&D. CPO and PKO for Health and Nutrition (Vitamin A. (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. vegetable oil producer and bioenergy producer). and association of palm oil based products producers (oleo chemical producer. balancing R&D focus on knowledge push and market pull factors (Sharif. vanaspati and ghee. et al. Therefore. and boosting research and development to produce high yielding planting materials which are more adaptive to local conditions both biotic and abiotic factors. following the success of Malaysia in diversifying sustainable and eco friendly oil palm products. (2009). CHD Engineering Sdn Bhd and CL Engineering and Trading Sdn Bhd (MPOB. (6) To maximize the use of oil palm harvest materials. emulsifier (MDAG. Postgraduate students focus their view on technology or knowledge push. E. Some R&D topics were collected from FGD‟s which need to be supported by the Indonesian government. Business actors in IOPRI‟s networking are big scale oil palm industries. driven by their own needs in the business focus on the market pull factors. salad dressing. 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. KH Engineering Works Sdn Bhd.) and Multiple use of cooking oil during frying of snack foods by micro and small scale industries. margarine. including the by products into valuable products. and the use of CPO as raw material for industrial coatings and adhesive . 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. as described by Chandran (2009). (2) Making up of a wider planting materials to solve oil palm disease problems. land availability or displacement and sustainability of oil palm agribusiness. MSHK Engineering Sdn Bhd. Bulk cooking oil for micro and small scale industries. while the experts. IOPRI has 304 . etc).as suggested by Purba. cookies etc.) production. Palm Oil for Cocoa Butter Substitute (CBS). 2008). 2007) in the Indonesian national innovation system should be done to improve the work of the national innovation system. and street vendors (5) The use of membrane of filtration to increase high value of cooking oil. 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. Palm Kernel Oil (PKO) for oleo chemicals production. (4) The use of CPO for better food quality (cooking oil. nutraceuticals etc. business and government). shortening. the owners of oil palm plantations. 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. IOPRI‟s R&D networking has been applying the concept of ABG triangle innovation networking (academia.AFBE Journal Academic Papers Engineering Sdn Bhd.

b. ITS. until business and palm oil based products marketing. CPO production technology. c. CPO international trades. and tighten R&D networking with other institutions. The roles of each actor in IOPRI‟s R&D networking and business development are as follows: a. Asian Agri. Indonesian Oil Palm Producer Association (IOPPA) IOPPA is active in the advocacy of oil palm agribusiness. UNRI. 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. Indonesian Oil Palm Research Institute (IOPRI) IOPRI has been proactive in oil palm research program which includes seed supply. 305 . etc. IPB. water and soil management. INDONESIA Big Scale Industries Wimar. 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. RSPO discussion. dll Universites in Indonesia ITB. 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. promotion and advocacy of sustainable oil palm agribusiness. Sinarmas Group. However. Figure 2 illustrates the scheme of IOPRI R&D networking and business development. b. Musim Mas. VII. UNLAM.AFBE Journal Academic Papers also cooperation networking with public R&D institutions. They also do several oil palm agribusiness advocacies in the global market. MEDAN. USU. plant cultivation technology. Lonsum. UNSYIAH. UNIB. etc. Indonesian Palm Oil Society (MAKSI) MAKSI is active in oil palm R&D. V. their activities are limited by the availability of research funds. UNHAS. UGM. UNILA. d. FIGURE 2: SCHEME OF OIL PALM RESEARCH INSTITUTE . Bakrie Sumatera Plantation. UNSRI. Astra Agro Lestari. and the Indonesian Oil Palm Society (MAKSI).

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. 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. Therefore. With the establishment of the Indonesian Oil Palm Council (IOPC. PT Perkebunan Negara (PTPN III. a cluster itself. However. as listed below. which needs a big investment. in the future. i) SMEs on lorry or truck transportation. PTPN is one of IOPRI R&D products users.) PTPN‟s do many applied R&D cooperations with IOPRI and the Plantation Education Institution (LPP) in Medan and Yogyakarta and other oil palm stakeholders. h. since the institution will play a central role in developing sustainable oil palm agribusiness in Indonesia. some SMEs types were identified to a have networking scheme with the oil palm business. VII. it is obvious that oil palm industry clusters almost do not have any R&D linkage with SMEs. a strict guidance on sustainable oil palm agribusiness practices should be accelerated. the sustainability of the business is not long. since the volume of business is low. 306 . f. especially for global market. . with lorries or trucks to be hired for fresh fruit bunches or empty fruit bunches transportation. etc. g. so that the volume of business is also at a large scale. The reason might be due to its nature that oil palm business is a big business. CONCLUSIONS The assessment‟s scores of the postgraduate students on the main elements of the national innovation system were higher than that of the experts and business practitioners.AFBE Journal Academic Papers e. SMEs business development case study From focus group discussions and field visits to Lampung. The Indonesian Bioefuels Producer Asociation The association does some biofuel R&D (biodiesel and bioethanol) in cooperation with biofuel related institutions. ii) SMEs on general trading that service the labor of oil palm big players some daily needs. Other reason is because the oil palm business is an integrated industry. The Association of the Indonesian Oleochemical Producers (APOLIN) APOLIN is active in the business advocacy of oleochemical based oil palm. DMI). 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. However. such as food and beverage provider. V. 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. due to the lack of real experience and exposure to the real oil palm agribusiness.

Arnold . presented at a FGD at Nanotechnology Group. M..A. Medan: PPKS Freibel. 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. Future Prospects for palm Oil in the Global Vegetable Oil Market. Rosadi. and all the respondents and resource persons in the surveys and focus group discussions. Y. Taufiku Rochman. H.Kuhlman (2001). Identification of responsibkle Cultivation Areas for Biofuel Crops. Raw Materials for Industrial Coatings and Adhesives From Vegetable Oils and Sugars. Budiman and B. Chandran. Research and Church Affairs. REFERENCES Ardiansyah. Platinum Energy Sdn Bhd Erningpraja. Oslo: Royal Norwegian Ministry for Education . DL Rahayu & N. especially Dr. Evalia (2009). Jakarta.(2008) Applications of GAP and GMP to Increase The Quality And Safety Of palm Oil. Fraunhofer International Seminar.AFBE Journal Academic Papers The experts and business practitioners require that the government of Indonesia provides a better national innovation system. WWF Indonesia. ACKNOWLEDGEMENTS We would like to thank Recognition and Mentoring Program (RAMP) of Bogor Agricultural University.Background Report no. Jakarta 11 June 2009 Gumbira-Sa‟id.12 in the Evaluation of the Research Council of Norway. Dehue (2009). RCN in the Norwegian research and Innovation System . S (2009). A. Serpong 307 . (2009).R. Indonesia. Aji Hermawan (Director) for sponsoring this study. S. L. F. N. as well as R&D and business infrastructure for sustainable oil palm agribusiness development in the future. LF-LIPI. Discussion on Preliminary Results of NIIS study.E.

Concept of the National Middle Term Planning 2010-2014: Strengthening of the Innovatioin System. Jakarta may 27 – 29.. Bogor. Program Book of International Conference and Exhibition on Oil palm. Facts on Oil Palm. Jakarta: LIPI Triyanto. elements. Amblard. April. E and MAKSI (2009). E.AFBE Journal Academic Papers Gumbira-Sa‟id. XVI International Oil Palm Conference and Expopalm. April 16-17. E. Jakarta: Bimantara Inka and IOPRI KNRT (2008). N (2006). Nookiah (2009). National innovation system policy framework: concepts. Indonesia. development and implementation. 2009 InfoSawit (2009). Managing technology policy and planning for economic development in developing countries. Kuala Lumpur. Proceeding (Book I) National Innovation System. Hartati. Oil palm Planting Materilas: Seeds and Clones for the Future. A. Fuel or Chemical. Durand-Gasselin and R. Daryanto. Maulana (2008). MPOB. P. Proceeding (Book 2) National Innovation System. Presented at the National Coordination meeting of Research and Technology. Jakarta: LIPI Srinivasan. Medan RAMP – IPB (2009). Liwang. Gumbira-Sa‟id & A. N (2006). Samsuri & M Gozan (2009). Jakarta 11 June 2009 ICE-PO (2009). R & D On Biomass Based Chemical Product From Indonesian Resources. A. May and June 2009 editions. PPKS. Hermiati. T. MB-IPB 308 . Cartagena de Indias.R. M. 22 – 25 September 2009 MPOB (2008). Research and Innovations To Improve the Oil Palm Seed Production. Jakarta 11 June 2009 Purba. Gumbira-Sa‟id and N.. E.Palembang. Analysis on Biodiesel Feasibility Production From Palm Oil. Nuryartono (2009). B. ICE-PO. Malaysia Prasetya. Intermediate Report on NIIS Sharif. Jakarta IOPRI (2009). S. PPKS List of Publications. Palm Oil: Promising Biomass Resources for Food. Fraunhofer International Seminar. T. Fraunhofer International Seminar.

1999). equipping them with cognitive tools and enabling them to perceive and develop entrepreneurial opportunities. and whether entrepreneurial development can be achieved through management education. Skills and knowledge belong to critical factors of production.com Prof. Gachibowli Hyderabad. In recent times we have witnessed a shift from family-led businesses to manager-led businesses. 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. academia. Rao Road. India ABSTRACT Entrepreneurship is the back-bone of any economy. the educational system can help people to develop qualities that are considered important for entrepreneurship (Reynolds. Investigating the merit of the arguments for and against this issue. INTRODUCTION The global economy of today is widely acknowledged as one in transformation to knowledge economy from the traditional manufacturing and services dominated economy. India-500046 Urvashi Singh School of Management Studies University of Hyderabad. The debate continues as to whether entrepreneurship can be taught. The role and relevance of educational system for entrepreneurship is widely recognized by industry. Venkata Ramana School of Management Studies University of Hyderabad. In the absence of competitive entrepreneurs a nation finds itself burdened with unemployment. India vedulla@hotmail. This area is likely to be even more significant in the coming years in the field of management education. Hay and Camp. economists and policy makers in the recent past. C. In addition to that a lot of first generation entrepreneurs have also started taking bold steps in establishing their enterprises based on market opportunities. Moreover. we can conclude that management can help one develop his/her entrepreneurial capabilities. 309 . low quality products and services and in general a low quality of life. The educational system creates awareness of alternative career choices and broadens the horizon of individuals.R.AFBE Journal Academic Papers ROLE OF MANAGEMENT EDUCATION IN ENTRPRENEURIAL DEVELOPMENT Professor V. 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. Many leading management Educational Institutions and Universities across the world have established separate centers with the main focus on Entrepreneurial Development.

self-confidence and internal locus of control. 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. 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. 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. there are scholars arguing that entrepreneurship can be developed or taught. and creating disequilibrium in the economic process. According to Shackle (1979) the perception of opportunities is an act of interpretation. initiative. "creative destruction". He proposes that alertness to opportunities is vital to understanding entrepreneurship.AFBE Journal Academic Papers Joseph Schumpeter(1934). propensity to take risks.. i. Glosten and Muller (1993) argue that entrepreneurial traits are difficult to observe ex ante and that they may not be unique to the entrepreneur. With the progress in thought leadership in entrepreneurship. such as Gartner (1989) arguing that entrepreneurship research should focus on studying the behavioral aspects of entrepreneurship rather than personality traits. Another scholar Cantillon (1931) opined that the main role of the entrepreneur is to arbitrate. creativity.. whereas in the second perspective behavior rather than traits is seen as the basis for distinguishing between entrepreneurs and non-entrepreneurs. For instance. scholars like Kirzner (1973) focussed more on the perception of opportunities and the behavioral reaction to this perception. and allocate scarce resources to their most productive uses. harmonize demand and supply.‟ According to Schumpter entrepreneurship involves innovation reshaping the industrial structure. The difference between the two perspectives can be understood as follows: The first perspective entrepreneurship is regarded as a set of personality characteristics. i.e. In addition researchers like. 310 . Although the trait approached some importance it approach has been criticized by scholars. Amit. such as perseverance. In this view entrepreneurship includes characteristics. Empirical evidence of the importance of education for the development of entrepreneurship with individuals is provided by Kourilsky and Walstad (1998). 1983). 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. it is argued that the propensity to take risks may also be present with proactive managers. and an entrepreneur is an individual endowed with imagination needed for attaching value or meaning to specific information.e. within entrepreneurship research there is the discussion whether entrepreneurs are born or made. Going by the assumption that entrepreneurship is inborn. In contrast. Kourilsky and Esfandiari (1997) and Kourilsky and Carlson (1996). In addition.

Entrepreneurs have a knack for looking at the usual and seeing the unusual. due to lack of needed knowledge and managerial skills. If he/she does not pay enough attention to these issues. 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 . Having distilled an opportunity. 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. 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. Managers of the enterprise should be generalist and gain basic skills and knowledge in managerial functions such as planning. or at least more than management.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. 311 . competitions and so on. who may normally perform all the actions related to doing the business. there is something distinct which reaches beyond the effective co-ordination of resources. He/she lacks the much needed managerial knowledge and skills of running the enterprise and further developing it.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. Problems arise when the enterprise is successfully expanding and the entrepreneur (usually still the founder and owner) is not capable of running it.especially in the education delivery community. at the ordinary and the extraordinary. marketing and market development. 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. such activities have been associated with the creation of a small business. This combination of intuitive skills and applied knowledge can be taught and refined.e. This is both an art and a science . in the presence of risk and uncertainty. organizing. due to the expansion of the enterprise. 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. market insight. Managers also should have an overview of finance. In particular. Traditionally. leading and controlling. and adaptation . Consequently. At the beginning. eventually he/she can not delegate responsibility for particular areas and will fail under the burden of undiscovered and emerging problems. Opportunity Recognition And Evaluation It is the cornerstone of entrepreneurship. the management of the enterprise is carried out by the sole founder/owner. 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. With this handicap he/she cannot cover all areas of the enterprise. Clearly entrepreneurship has to be different. i. These areas become with the growth of enterprise more complex and intricate and demand more attention.blending observation.

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. therefore the curriculum should acknowledge this. due to the changing environmental conditions we cannot solely rely on this passing on of knowledge. 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. in a survey of American professors. 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. Vesper (1990). training interventions designed to foster entrepreneurship through a new venture creation framework may be wholly inappropriate. 312 . as to whether the present educational system encourages the concept of an enterprise culture. In such cases. Education can be viewed as an important intervention. It is often argued that enterprise culture is developed naturally. This raises the question. ENTREPRENURSHIP EDUCATION The most fundamental issue relating to enterprise education is addressing the question of whether entrepreneurship can be taught. found that 93 per cent of respondents indicated that it could. This development stage is usually associated with and related to the transition from start-up to a fully articulated and complex enterprise structure. However. resulting in the need to provide interventions to promote this culture. there is a difference between entrepreneurship and being entrepreneurial and as such. and therefore influenced by education and training. Researchers like McMullan and Long suggest that instructional methodology is not well suited to aspiring entrepreneurs. This range of abilities can also be greatly enhanced through effective education.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. Fleming (1992) indicated from research undertaken that education increases awareness and by so doing facilitates the entrepreneurial process further. 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. 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. Studies conducted by researchers mentioned above suggest that the entrepreneurial role can be culturally and experientially acquired. Not enough is emphasis is placed on helping students acquire particular skills and to use knowledge. however.

McMullan. programs and resources within universities. Even in the Asian countries the pioneering institutes in management education have introduced specialized centers and courses for Entrepreneurial development. 1990 there were already 400 universities in America active in entrepreneurship education and estimates today exceed 700 universities (Vesper and McMullan 1988. 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. Irish students who participated in a student enterprise award indicated that the initiative had a”very important” impact on their subsequent career choice (Fleming 1994). Davis and Harnish 1984). Yet. 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. 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. Very seldom. The results suggest differentiating between general business and specific entrepreneurship education when exploring the role of university programs. Clark(1984) surveyed a sample of students of a medium-sized American university who were enrolled in an introductory entrepreneurship course. in fact. the surveys include longitudinal data. These plans were often turned into reality. In addition. He found that almost 80% of these students were considering setup their own business. be taught.AFBE Journal Academic Papers Entrepreneurship education has acquired a lot of significance in universities during the past four decades. Consequently. the great majority of empirical findings support the legitimization process of entrepreneurial education. This growth in interest and funding is accompanied by an increasing demand for legitimization of entrepreneurship education at the university level. Entrepreneurship centers have been founded to coordinate the broad array of activities. Very seldom. Many of the surveys conducted indicated that entrepreneurship education encourages graduates to start their own business. Apparently. Three out of four students who reported concrete plans for founding a company in fact started a new venture. Fiet 2001). Hanlon and King 1997). Vesper and McMullan could show that entrepreneurship courses help alumni to make better decisions in the start up-process (Vesper and McMullan 1997). Thus. Many of these academic institutions have established majors on the post graduate level. there is still a need for valid empirical measures of education characteristics and educational outcomes (Hills and Morris 1998). 313 . A review of the entrepreneurship literature reveals contradictory findings (Gorman. 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. Furthermore. Hills and Morris 1998. In an early study. schools pashed back out of entrepreneurship once they had entered. less than ten universities in the USA were teaching in this field. 76% of the respondents stated that the entrepreneurship course had a large or very large effect upon their founding decision (Clark. control groups without entrepreneurship education experience or pre-tests prior to the exposure to courses. Ultimately. In the sixties. this initiative had an enabling and accelerating impact on the graduates‟ founding activities. entrepreneurial aspiration and success can.

While it is perceived that entrepreneurship can be taught. Management educators teach the functional format. Understanding is derived from personal experience.AFBE Journal Academic Papers According to some researchers. or indeed the mentality for entrepreneurship by conventional pedagogic routes. every entrepreneur has different opportunity costs and may pursue opportunities which vary greatly in terms of technology. Early stage ventures have the most problems. Prominent researchers McMullan and Long argue that in order to provide effective entrepreneurial education. uncertainty. unlike entrepreneurial programs. marketing. or even anticipating them. Greene and Crick 1998). McMullan and Long also note that because few ventures begin with a functionally differentiated structure in place at the outset. therefore they argue that entrepreneurship education needs to be differentiated more by stage of venture development. The social entrepreneur has set of different motivations and drivers to the university 314 . The entrepreneur is concerned with the present and the future. it is uneconomical to hire functional specialists. The environment of the entrepreneur is different from conventional large organizations. Vesper and McMullan 1988). it is critical to ensure quality teaching is implemented. general business management education has no significant influence on entrepreneurial propensity (Hostager and Decker 1999). and learning is obtained through doing. They must learn how to find problems as well as how to design solutions. and in doing this be aware of the barriers that exist. Chen at al. then some very close parallels can be drawn between it and entrepreneurship. based on a platform of conceptual knowledge. finance. innovation. 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. rather than by department or functional expertise. One of the pedagogic difficulties of teaching entrepreneurship stems from the complex and diverse range of entrepreneur-opportunity situations. students should deal with ambiguity and complexity. Whitlock and Masters can even show that the interest in pursuing self-employment dissipates after visiting general business courses (Whitlock and Masters 1996). and should have substantial hands-on experience working with the small firm sector. For example. The findings of a survey with business owners in India suggest that management education is not an important driver of entrepreneurial attitudes (Gupta 1992). surveyed students in different business majors and showed that the number of management courses taken had no effect on entrepreneurial decisions (Chen. and financial implication. 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. personnel. risk. as if it were equally applicable to all ventures at all levels of development. and finding ways of creatively avoiding problems. The findings stress the need for education programs specifically designed to expand students„knowledge and experience in entrepreneurship.When education is linked with desirable behavioural outcomes. The content and teaching methods have to be differentiated between entrepreneurship and traditional business courses (McMullan and Long 1987.

Traditional approaches to entrepreneurship education have been conceived in two separate encapsulated arenas: the university and the training organization. case analysis. journals. journal writing and computer simulations. such as selfconfidence. self-awareness. especially customers. The university has provided cognitive. Cotton and Gibb. and centers has emerged in U. and programs. courses. 1998. creative problem solving. a hard working disposition. institutions of higher learning since an entrepreneurship course was first offered to Harvard MBA students in 1947 (Katz. 2003). case development. and long. In parallel to this growth in academic infrastructures. Gasse (1985) and Kourilsky (1980. 1999). include intuitive decision making. (1997) showed the need to distinguish research articles on the basis of the education markets that they focus on. an internal locus of control. persuasion. a high propensity to take (moderate) risks and flexibility. planning frameworks. Defining entrepreneurship as a set of qualities enables a discussion on how these specific qualities can be developed in the educational system." And Young (1997) called for the studying of cognitive elements such as mental models. 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. Gibb (1998) argues that entrepreneurial skills that should be taught. Block and Stumph (1992) encouraged scholars to consider students' needs and measure the impact of entrepreneurship learning. 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. Evidence suggests that the same trend is taking place outside the United States (Vesper & Gartner. strategic thinking. the entrepreneurship process evolves constantly. a high level of autonomy. whether "formal education students. endowed chairs. Gibb and Cotton. programs. The main exceptions are Cotton and Gibb (e. a whole corpus of research literature has been developing at the interface of entrepreneurship and education (cf. ability to conclude deals.A variety of pedagogical tools can be used in entrepreneurship education and training. teaching positions. Drawing from the literature on the characteristics on entrepreneurship. project management. Few scholars have linked entrepreneurial qualities to education.. such as lectures.S. 1995). 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. These skills are based on several underlying qualities. Furthermore. selling. 1992. 2004). This research has been reviewed and criticized before.AFBE Journal Academic Papers graduate wishing to start a bio-technology venture. managing interdependency on a knowwho basis. and the training organization 315 . readings. 1998). An entire infrastructure of entrepreneurship courses. organizationally and societally in an increasingly turbulent and global environment”. schema development. Gibb." "out-of-school individuals." or "existing businesses owners/managers. entrepreneurs‟ testimonies. a high achievement orientation. a high level of empathy with stakeholders.term memory enhancements.g. Greene et al. negotiation and motivating people by setting an example. Gorman et al. time management. Vesper (1982) invited scholars to conduct more systematic studies by classifying various program elements into dependent and independent variables. p. Gibb (1998.

This work can be supported by training activities for opportunity identification (e. ”warm-up” start ups. idea focus groups. often informally. However. To cover a continuum of learning requires a better articulation and integration of business schools. In this respect. when developing business plans and when implementing new venture projects. Knowledge About Innovative Opportunities Entrepreneurship is characterized by new combinations causing discontinuity. consultants and financiers. evidence shows that „practice by doing‟ induces the highest retention rates.AFBE Journal Academic Papers has taught. seasoned entrepreneurs. Students in a business management major should be stimulated to productive interaction with students from technical majors. industry projects and internships where students are integrated in new business creation of others. entrepreneurs‟ testimonies. Business plan development at MIT Entrepreneurship Center is supported by other experiential teaching and training activities such as idea competitions. 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. 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. Students. case development. who actually write a business plan. It is therefore fundamental to the subsequent formation of growth companies that the students have access to the forefront of technological development. They teach the application of theoretical concepts and academic knowledge to business reality (Kelmar 1992). skills in applying theory to practice. Good teaching will help students to use theories as a tool to answer practical questions (Fiet 2001). technology parks and government agencies. Engineers and students in natural sciences have to be encouraged to work on technological problems and to emphasize on innovative opportunities. ENTREPRENEURSHIP EDUCATIONAL DELIVERY Theory-Based Knowledge In order to generate theory-based knowledge. case analysis. 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. A variety of pedagogical tools can be used in entrepreneurship education and training. Too often those individuals participating in entrepreneurship education and training programmes have been moving from one arena to another in sequential fashion. readings. business plans are an useful approach. as well as an orchestration of lecturers. CONCLUSION 316 . such as lectures.g. journal writing and computer simulations. contacts with inventors).

REFERENCES Briga Hynes. unpublished MBS thesis. evaluating and exploiting business opportunities requires a variety of knowledge and skills related to the technical. Students and would-be entrepreneurs effectively learn only if they take part in the process. 2nd ed. 22. Journal of European Industrial Training 20/8 [1996] 10–17 Curran. education and policy research”.. 11. 1995. “Education and training for enterprise – some problems of classification. University of Limerick. 1989. If the focus of entrepreneurship education is to provide knowledge and skills for the development of future entrepreneurs. Fleming. The approach must be multi-disciplinary. and Stanworth. by making the necessary changes in the curriculum and methodology. 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. Therefore. In summary. Ireland Truelove. financial. Oxford. legal. J. 7 No. involving all students in knowledge creation. Entrepreneurship education programmes should involve the participants through a dialogue based training methodology. P. rather than monologue. 317 . International Small Business Journal. Basil Blackwell.. S.. an effective education programme will help the prospective entrepreneur to cope with the complexity and ambiguities of entrepreneurship. Vol. “The role of structured intervention in shaping entrepreneurship”. And this learning process should ideally be embedded in the task environment of the individual or organization. pp. J.. then there is a need for action and experiential learning. The Handbook of Training and Development. and market dimensions of the project. Department of Management and Marketing.AFBE Journal Academic Papers Entrepreneurship education and training have become significant in the delivery of management education. 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. Discovering. 2. 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. “Entrepreneurship education and training –introducing entrepreneurship into non-business disciplines”. 1992. As this area is different from the traditional managerial functions it should primarily include process and action-oriented approaches.

Simulation and Gaming 25 (3). Vol. Shackle.H. Harrison. The Vocational Aspect of Education. London/New York: Routledge. S.. Imagination and the Nature of Choice.. 5.L. Weaver. Admiraal (ed. entrepreneurship and economic growth. G. Kasarda. 32-45.J. Fernald. Bratislava: Elita Ronstadt.W. 15 No. 10 No. 100. enterprise and entrepreneurship – the vocational aspect of education”. G. 1985. Sexton. and Hart.F. 1996. M. Journal of Small Business Management. Vol.T. 14. National agency for development of small and medium enterprises. 26 No.F. 1994. Journal of Business Venturing. Vol. and J. J. Vol. K. pp. 1989. 1988. Journal of Management Development 10 (5). 3 No. Boston: P. 1994. G. 1988. 1991.. In: P. and L. Kent Publishing Co. 1.S. “The long term supply of entrepreneurs: students‟ career aspirations in relation to entrepreneurship”. “The educated entrepreneurs: a new era of entrepreneurial education is beginning”. Solomon. 55-66. and Twomey.D. Storey.S. Stumpf. (2005) Research of potential for entrepreneurial activity [Slovak version]. 1395-413.. M. Vol. New York: Harper Collins Grant.M. R.. M.AFBE Journal Academic Papers Gerber.W. D. Environment and Planning. Developing entrepreneurial qualities through the use of behavioural simulations.E. “Factors influencing new business formation: a case study of Northern Ireland”.. 338-352. American Journal of Small Business.R. 1.L. B. Dunbar and T. (1995). E. pp. Understanding the Small Business Sector. 10.. The E-Myth Revisited: why most small businesses don‟t work and what to do about it. “Capability. R. 4. Thurik. 38 No. Hills. Bratislava: NARMSP Papula. The State of the Art of Entrepreneurship. 1986. Mullen.M. 1979. R.P. Minimum of a manager: Profession that pays out [Slovak version]. 1991. Scott. (2001). Edinburgh: Edinburgh University Press. 318 . A. Small firms. D.L.S. pp.. A historical examination of small business management and entrepreneurship pedagogy. D.).. “Variations in university entrepreneurship education: an empirical study of an evolving field”.

Verheul. 1978. Wadsworth. van der Kuip. E. B.C. Torrance.D. Learning as a generative process. 1990. NY: Longman. 319 . 329-345. Henderson.. New York: John Wiley and Sons. EIM Business and Policy Research: Zoetermeer. 2001. K. Summary of EntrepreneurshipEducation Survey. M. I.). Thurik. R. A. June. Strategic Report. forthcoming. Small Business Economics 16.. Non-test ways of identifying the creatively gifted.Y.R. and I. 345. Educational Psychologist 11 (2). 1988. B. Frontiers of Entrepreneurship Research. Educational Psychologist 24 (4). 1995.C. NY: Longman. Department of Management and Organisation. Entrepreneurship in organisations. Thurik. In: Vesper. 1974.R. Wennekers. Wadsworth.. University of Washington. G. Linking entrepreneurship and economic growth.J. Generating processes of comprehension. Wittrock. Journal of Creative Behavior 22 (3). The Aviall studies: a model for corporate growth. (ed. Torrance (eds. 652-666.. Creativity and entrepreneurship: how do they relate?.M. 1989.R. 178-183. Start-up capital: 'Does gender matter?'. H. Verheul. Weaver. B. Englewood Cliffs. 1999. Small Business Economics 13 (1). White Plains.P. 27-55. K.. 2002. MA: Babson College. M. 126152. Creativity: Its Educational Implications. 1967. In: Gowan.. Vesper.). Piaget‟s Theory of Cognitive and Affective Development. Whiting.. K.. Vesper.376. J. NJ: Prentice-Hall. Demos and E. WA. Wellesley. and A.J. Wittrock. Seattle. and S.AFBE Journal Academic Papers Small Business in the Modern Economy.P. Early development of entrepreneurial qualities: the role of initial education in theory and practice. Oxford: Basil Blackwell Publishers. 1980. 1990. Piaget for the Classroom Teacher.H. New Venture Strategies. VA-Lite Plains. I. 87-95.. and A.C.

to a considerable extent. or institutions as a whole. 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. multiple sections of individual courses. A culture of continuous assessment is imperative for improving student learning and teaching. This paper proposes a model for assessing student learning in courses throughout the entire economics curriculum. 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. and use the results obtained in a cycle of continuing educational improvement.edu ABSTRACT Assessment of student learning is an increasingly important trend in higher education. The ultimate goal of assessment is to identify strengths and weakness both in student learning and in teaching. Balassi Saint Mary‟s College of California. While the TUCE is a useful tool for use in assessment of student learning in Principles courses. objective evaluation of individual students. objective means of assessing instructors. Moraga. 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. INTRODUCTION Overall. United States of America sbalassi@stmarys-ca. individual courses.AFBE Journal Discussion Papers COMPREHENSIVE ASSESSMENT IN ECONOMICS EDUCATION Dr. with perhaps only minor adjustments. The model proposed is sufficiently flexible so that it can be used. The process of assessment is an essential element in any systematic. assessment should be thought of as a means of understanding the process of learning and how learning can be measured and improved. 320 . 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.. Steven J. and as an additional. While faculty interest in assessment as a means of improving the educational process is important. demonstrate student learning. This model is much more broad-based than assessment of student learning in the principles courses alone. 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. Assessment is not a one-time activity but a continuous process. programs. by many economics departments as these departments work to implement a program of assessment as part of a culture of continuous improvement. it is insufficient for a broad-based assessment process.

Assure the educational community. Since Saint Mary‟s College of California is accredited by the Western Association of Schools and Colleges (WASC). p. and Implicit Application (IA). O‟Neill finds the type of exam does not impact student‟s attitude towards economics or the decision to complete the course. 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. The TUCE-4 for both microeconomics and macroeconomics consists of 30 multiple choice questions covering six content categories and representing three cognitive categories. and other organizations and agencies that an accredited institution meets the Commission‟s Core Commitments to Institutional Capacity and Educational Effectiveness and has been reviewed under Commission Standards. TUCE Developed more than 40 years ago by the Joint Council on Economic Education. “all editions of the TUCE have sought to emphasize the application of basic concepts and principles…The three broad cognitive categories used to classify questions on the TUCE are: Recognition and Understanding (RU). 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 (O‟Neill 2001). However. The second section focuses on accreditation and the assessment of student learning outcomes.2).AFBE Journal Discussion Papers LITERATURE REVIEW The literature review is divided into two sections. As noted by Saunders (1991). the test can be used in this way. 321 . 1991. WASC accreditation and assessment information is used. Accreditation Secondary education institutions as well as institutions of higher education in the United States are accredited by one of six accrediting associations. 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. Topics included in each of the six microeconomic and macroeconomic content categories are shown in Appendix A and B.” (Saunders. for purposes of this paper. The first section provides background information about the TUCE. While the TUCE was not designed to evaluate the achievement of individual students. The accreditation process is intended to (WASC 2008): 1. 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. the general public.” Characteristics of each of these cognitive categories are contained in Appendix C. Accrediting and assessment guidelines for other accrediting associations are similar. Explicit Application (EA). the TUCE has been used extensively by instructors and researchers in the economics profession.

3. Each subcategory has specific criteria for review. Promote institutional engagement on issues of educational effectiveness and student learning. its reputation would suffer dramatically and there would. 4. and the process of peer review. institutional level. be a dramatic drop in enrollments. Developing and applying resources and organizational structures to ensure sustainability. Promote active interchange of ideas among all institutions to improve institutional performance. fostering. completion. Creating an organization committed to learning and improvement.3 The institution‟s student learning outcomes and expectations for student attainment are clearly stated at the course.4 The institution maintains appropriate and sufficiently supported faculty and staff development activities designed to improve teaching and learning. support rigorous reviews. library and information resources. most likely. 7. If an institution were to lose its accreditation. Develop systems of institutional review and evaluation that adapt to institutional context and purposes. WASC uses four general standards. 4. and validate and revise these standards through ongoing research and feedback. educational effectiveness. build on institutional evidence. 2. and student learning. and add value to the institution. These institutional standards are: 1. Maintaining accreditation is a necessity for educational institutions. 2. 5. As part of the accreditation process. 322 . Achieving educational objectives through core functions. 6. 3. and the wider learning environment. through which indicators of performance are regularly developed and data are collected to inform institutional decision making. staff. and improvement. students. reduce the burden of accreditation. These outcomes and expectations are reflected in academic programs and policies. The institution‟s faculty takes collective responsibility for establishing. 2. Promote within institutions a culture of evidence. Develop and share good practices in assessing and improving the teaching and learning process. Develop and apply standards to review and improve educational quality and institutional performance. as appropriate.2 …The institution has a system of measuring student achievement. in terms of retention.4 The institution‟s expectations for learning and student attainment are developed and widely shared among its members. Defining institutional purposes and ensuring educational objectives. and where appropriate. advisement. program and. including faculty. reviewing. The following is a partial list of the criteria for review to emphasize the importance of assessment and student learning: 1. curriculum. planning. 3. consistent with its institutional objectives. Each of these standards has several subcategories. external stakeholders.AFBE Journal Discussion Papers 2. The criterion for review provides the details for what an institution is expected to do to maintain accreditation. and demonstrating the attainment of these expectations.

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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

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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

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AFBE Journal

Discussion Papers

Based on the challenges and limitations noted, a broad-based model for assessing all courses in an Economics Department‟s 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 program‟s overall learning objectives when brought together. SLO‟s are specific learning outcomes which a student should obtain on completion of a specific course. There are usually 2-3 broad-based SLO‟s per course. At St. Mary‟s 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 SLO‟s which, when combined with other courses, rollup to PLO‟s. Questions on each TUCE are categorized into six content categories and three cognitive categories. Although we recognize the six content areas are important, the SLO‟s 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 SLO‟s 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 SLO‟s or give a cognitive category more weight. We have found that we prefer the first SLO for undergrad courses and SLO‟s #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

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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. As part of an Economics Department‟s longer-term assessment process. CONCLUSION Assessment of student learning is not a one-time process but one which is continuous. These SLOs are broad enough to give instructors flexibility and we do not have to create new SLOs for each course. The same questions will be imbedded in a future quiz. Because each section of each course needs to be assessed at least once every five years. For each SLO. goals for improvement in students‟ improvement in each of three cognitive categories should be established. other methods are needed. What will differ among courses are the specific questions. what happens when the price level rises? By using the same SLOs for each course. a rubric is to be created. Using only a multiple-choice pre. 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.to post-tests will be calculated for each SLO along with an overall improvement score. The proposed assessment plan is as follows: 1. A team of two or three instructors should read the papers and evaluate how well students have achieved specific SLOs.AFBE Journal Discussion Papers adverse impact on the normal flow of the course. When we were choosing SLO‟s from the TUCE.and post-test would not be the best way to assess an entire program and would fall short of accreditation standards. or final exam. an improvement plan should be implemented. Many courses in economics programs incorporate student papers as part of the course requirements. For SLO‟s and overall scores which do not meet the minimum goals. faculty members can begin to 326 . Each course in the economics program will need to be assessed. Here is an example of how that could work: SLO #1. In order to assess a course. we wanted to make this a manageable process. copies of the papers are to be obtained from the instructors. In these courses. The goal of assessment is to identify strengths and weakness in teaching and learning. Along with creating an assessment plan for continuous improvement.Recalls or recognizes specific economic rules. Once strengths and weaknesses have been determined. 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. we were also thinking about every course in the program. To aid in this form of assessment. midterm. specific SLO‟s need to be created and included in the syllabus. 2-3 questions will be created. 4. instructors can focus on what they want to teach. 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. these SLOs can be used for each of the economic department‟s five PLOs. This rubric will rate the various levels of understanding a student may demonstrate and help achieve consistency among readers of the papers. Also. 2. The questions will be administered the first day of class as an ungraded practice quiz. The percentage change from the pre. Our three SLOs can be used in each economics course because they are broad-based. 3.

P. Saunders... The model proposed is sufficiently flexible so that it can be used.org/site/c. Walstad. 2006.centerforpubliceducation. Using Standardized Testing to Assess Student Learning in Introductory Economic Courses.htm#t5a O‟Neill. 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. Ruth. American Economist 45(1). 327 .kjJXJ5MPIwE/b. Test of Understanding in College Economics: Examiners Manual for Fourth Edition. Information obtained from this type of analysis can provide useful information to faculty members. Gulf Coast Economics Association presentation.AFBE Journal Discussion Papers make changes to teaching methods and further refine assessment techniques. 2007. by many economics departments as these departments work to implement a program of assessment as part of a culture of continuous improvement. W. 1991. and c) how well faculty are communicating with and motivating students. http://www. with perhaps only minor adjustments. This paper proposes a model for assessing student learning in courses throughout the entire economics curriculum. 62-70.C980/The _nature_of_assessment_A_guide_to_standardized_testing. & Rebeck. REFERENCES Courtney. New York: National Council on Economic Education. Western Association of Schools and Colleges. The results should help them better understand a) what students are learning and how well they are achieving the learning goals for courses. New York: Joint Council on Economic Education. Essay versus Multiple Choice Exams: An Experiment in the Principles of Macroeconomics Course. Test of Understanding in College Economics: Examiners Manual for Third Edition. November 6-7. Boatman. Mitchell. February 15. K. 2008. This model is much more broad-based than assessment of student learning in the principles courses alone.1501925/k. B. A culture of continuous assessment is imperative for student learning and improvement. and Lee. Watts. Patrick B. pp. W. Spring 2001. Handbook of Accreditation. 2008. M. The Center for Public Education.

taxation. Theories of the Firm (revenues. Markets and Price Determination (determinants of supply and demand. public choice) F. and Rebeck (2007) 328 . opportunity cost. exchange rates) Source: Walstad. interest. externalities. market structures) D.AFBE Journal Discussion Papers Tables and Appendixes APPENDIX A Microeconomic Content Categories on the TUCE – 4 A. marginal analysis. income redistribution. maintaining competition. profits. utility. The Basic Economic Problem (scarcity. choice) B. International Economics (comparative advantage. rents. trade barriers. elasticity. and income distribution) E. Watts. The (Microeconomic) Role of Government in a Market Economy (public goods. Factor Markets (wages. price ceilings and floors) C. costs.

AFBE Journal Discussion Papers APPENDIX B Macroeconomic Content Categories on the TUCE . long run vs. International Economics (balance of payments. inflation) B. automatic and discretionary fiscal policies) E. exchange rate systems. determinants and components of AS and AD. rules vs. the multiplier effect) C.4 A. Watts. real vs. Measuring Aggregate Economic Performance (GDP and its components. expectations. openeconomy macro) Source: Walstad. unemployment. Aggregate Supply and Aggregate Demand (potential GDP. financial institutions) D. Policy Debates (policy lags and limitations. economic growth and productivity. money creation. sources of macroeconomic instability) F. Monetary and Fiscal Policies (tools of monetary policy. and Rebeck (2007) 329 . Money and Financial Markets (money. nominal values. income and expenditure approaches to GDP. discretion. short run.

Concepts.1 Applies economic concepts needed to define or solve a particular problem when the concepts are not explicitly mentioned 3. and Principles 1. Watts. an individual firm‟s profit is maximized at the level of output at which marginal cost equals marginal revenue (EA) Explicit Application of Basic Terms.1 Selects the best definition of a given economic term.2 Selects the economic term. and Principles 3.4 (RU) Recognizes and Understands Basic Terms.3 Distinguishes between probable and improbable outcomes of specific economic actions or proposals involving unstated assumptions 3. concept. or principle 1. e.AFBE Journal Discussion Papers APPENDIX C Definitions of Cognitive Categories Used to Classify Questions on the TUCE .4 Judges the adequacy with which conclusions are supported by data or analysis involving no unstated assumptions (IA) Implicit Application of Basic Terms. Concepts.3 Distinguishes between probable and improbable outcomes of specific economic actions or proposals involving no unstated assumptions 2.2 Distinguishes between correct and incorrect application of economic concepts that are not specifically given 3.4 Judges the adequacy with which conclusions are supported by data or analysis involving unstated assumptions Source: Walstad.1 Applies economic concepts needed to define or solve a particular problem when the concepts are explicitly mentioned 2.4 Recalls or recognizes specific economic rules. and Rebeck (2007) APPENDIX D Economics Department’s 5-Year Assessment Plan Timeline 2007-2008 – Assessment Year 330 .g.3 Identifies or associates terms that have closely related meanings 1. or principle that best fits a given definition 1. concept. Concepts.2 Distinguishes between correct and incorrect application of economic concepts that are specifically given 2. and Principles 2..

These SLO‟s 331 . 2010-2011 – Analysis and Planning Year Analyze results from prior year and make improvements. we will analyze student papers. We will be assessing an upper division course. the national average of 14.and post-test will be created and administered for principle courses. This paper detailed the proceeding years TUCE assessment results and compared them to national averages.and post-tests) . 7. Mary‟s College vs. 4. “Using Standardized Testing to Assess Student Learning in Introductory Economic Courses”.AFBE Journal Discussion Papers Principles of Microeconomics (30 question TUCE exam used for pre. We defined the improvement standard at a minimum of 11. They presented this paper at the Gulf Coast Economics Association teaching conference November 6-7. 3. and William Lee wrote. 2011-2012 – Assessment Year Implement changes from 2010-2011 APPENDIX E Student Learning Outcomes for Economic Courses These three Student Learning Outcomes (SLO‟s) were obtained from the “Test of Understanding in College Economics: Examiners Manual for Fourth Edition” (Walstad.and post-tests. 20008. 54 students were assessed 2008-2009 – Analysis and Planning Year Richard Courtney. In addition to pre. Every section of the course should be assessed during the courses assessment year. Kara Boatman.6% for macroeconomics (see next page). Program Learning Objectives were defined. 6.6% 1. The cognitive categories are listed below each SLO in italic. Mary‟s College vs.Overall student improvement was 27.3% for microeconomics and 14. 2009-2010 – Assessment Year Obtain results from new assessment procedure. 178 students were assessed Principles of Macroeconomics (30 question TUCE exam used for pre. Macroeconomics.2 Instructors covering 4 sections. Watts. Summary of the results presented in their paper: Microeconomics.and post-tests. The six major improvements to the assessment process for 2009-2010 are: 2.Overall student improvement was 17. The 5-year Economics department review was completed.and post-tests) . Student Learning Outcomes were defined (see next page). and Rebeck 2007).3% at St. 5.4 Instructors covering 7 sections. A shorter pre. There will be three courses used instead of two.3%. term papers will be included in the analysis. Using the entire TUCE test is not realistic. In addition to pre. The SLO‟s are divided into three cognitive categories. the national average of 11. Each course in the economics major needs to be assessed on a 5-year rotation.2% at St.

For SLO‟s and overall scores under the above percent‟s. concepts. The same questions will be imbedded in a future quiz.Applies economic concepts needed to define or solve a particular problem when the concepts are explicitly mentioned. and principles (EA) SLO #3. 3. Recognizes and understands basic terms. 2. so that they can be used in every economics course. 4. and principles (IA) Assessment plan: 1.Recalls or recognizes specific economic rules.AFBE Journal Discussion Papers are broad enough and address each PLO.Distinguishes between correct and incorrect application of economic concepts which are not specifically given. Implicit application of basic terms.3% for microeconomics and 14. Each course will have a different assessment questions focusing on what the course teaches. The questions will be administered the first day of class as an ungraded practice quiz. concepts. There will be two or three questions created for each of the three SLO‟s. SLO #1. Goal: Each SLO and the overall SLO score should have an aggregate improvement of.to post-tests will be calculated for each SLO and an overall improvement score.6% for macroeconomics over the course of a year. at least. and principles (RU) SLO #2. 11. midterm. an improvement plan of action will be completed. or final exam. Explicit application of basic terms. The percent change from the pre. 332 . concepts.

John Barnes. As the back leaf of this book mentions “Professor Lindsey Falvey has worked in international agriculture for more than fifty years He has led Australia‟s largest faculty in agriculture as Dean and CEO at the Melbourne University and advised all major development agencies and several governments. 2010. Dr.AFBE Journal Book Reviews BOOK REVIEW Title: Small Farmers Secure Food: Survival Food Security. 1) 333 . the World‟s 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.” (Falvey.” 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. Chapter 1 Introductory Words comprises a little over two pages and can be summarized in the opening paragraph “ “This is a simple book. 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. 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. Falvey has three doctorates all relating to agriculture. He does this from the site of Pliny the Younger‟s villa overlooking Lake Como. It argues for a return to two critical values in international development. As a Fellow of the Academy of Technological Sciences and Engineering and a Life Member of Clare Hall at The University of Cambridge. 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. for his international contributions as do many of the honors bestowed on him.

We Know Best – Free The World Trade. Chapter 6 Good Governance Starts with Food Security comprises thirty-four pages and includes the following sections: Why Agricultural Planning Fails.AFBE Journal Book Reviews Chapter 2 Food Farmers and Fallacy comprises thirty-one pages and covers fifteen sections among them: Secure Food Producers. Non-Revisionist History. 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. What is Good Governance? Good Governance of Food. Forgotten Food. Let them Eat Brioche. Challenging World Views. Forgotten Famines. Institutions Marginalize Small-Farmers. Re-Integrating Economics. Awakening to the Continued Role. Correcting the Bias. I will leave it to the reader to read the riveting opening paragraph of this chapter. Towards a Small Farmer Friendly Policy. Uncommonsense. (Here Falvey lays the blame not a countries and their goverments but at our own feet. Changing Emphases in Food Security. Informed Policy. International Approaches. False Security. 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. Chapter 3 Securing Enough Food to Survive comprises twenty-six pages and includes the nine sections: Rediscovering Food Security. Life and Death Risks. Good Governance – Absence of Conflict. Small Farmer Advantages. Rights to Food. Rich Country Governance. Economic Development Pathways. Policy Approaches. This chapter comprises several bite sized lessons in agricultural development and international economics. Food Reserves. Shifting the Paradigm. Much like the opening of the first chapter Professor Falvey “pulls no punches” and 334 . Small Farmers comprises nineteen pages and includes the following sections: Billions of Third-World small Farmers. Fundamental Knowledge. All compelling reading. Chapter 4 Forgotten Food Producers. The State of Agricultural Science. i. (this reminds me of a book of required reading for Victorian (Australia) primary school students from the 1960‟s “Unocommon Common Sense”. Conjuring up Wisdom. Supply and Demand Demand. It is interesting that as this reviewing is being written this Thailand (the world‟s largest rice exporter plans to reduce its rice production permitting South Vietnam to assume the dominant export position in the world rice market. Lessons of the Recent Past. Commoditization leads to Speculation. Gutenberg‟s Legacy of Ignorance. Where Did We Go Wrong?. Chapter 5 Why Bite the Hand that Feeds? comprises thirty-five pages and includes the following sections: Mess and Confusion. Common Needs. Food as a Commodity.e. Food Crises and Foreign Aid. Dissipated Security – Weak Governance. This chapter come with many telling simple charts and tables to illustrate its message. The Arrogance of Ignorance. Variables in Food Security. Rich Country Contributions to Food Security. Causes of Policy Void. Fiat or Fantasy. Food Security and Recent Crises. Un-Free World Trade.

335 . Skills not Dills. Revaluing a National Asset. The Personal Touch of the Small Farmer.AFBE Journal Book Reviews drives home the message with a clarity and economy of words that many readers will find refreshing. Focusing Research. Watering Down Dry Messages. Letting Small Farmers Develop Privately. Small Farmers and Innovation Science. 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. p157) Chapter 8 Practical Food Security From Small Farmers comprises just fifteen pages and includes the following sections: The Human Plague.” (Falvey. Farm Size and World Hunger. Making Extension Practical. Writing-off the Part Line. Small Farmer Irrigation. 2010. Credit Where Credit‟s Due. 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. Future Food. In this second last chapter a practical view is taken of reorienting development agencies to focus on small farmers and security in survival foods. Revising Present Views. No One Recipe. This chapter “revisits the message in chapter four which considered small farmers as the forgotten majority of the producers of the world‟s staple food for survival.