Gadjah Mada International Journal of Business
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An Examination of the Mediating Effect of Islamic Work Ethic on the Relationships between Transformational Leadership and Work Outcomes
Get PDFThis study investigates the role of Islamic work ethic as mediator between transformational leadership and work outcomes (organizational commitment, job satisfaction and turnover intention). This study used a sample of 370 employees from 60 Islamic microfinance institutions in Central Java, Indonesia. The results of Structural Equation Modeling (SEM) indicate that transformational leadership has a positively significant impact on Islamic work ethic. The findings also noted that Islamic work ethic directly and positively affect both organizational commitment and job satisfaction on the one hand, and negatively influences turnover intention on the other. Overall the model supported that Islamic work ethic has a significant role to mediate the the relationship betweem transformational leadership and work outcomes. Implication, limitation and suggestion for future research are discussed.
The Causality between Corporate Governance Practice and Bank Performance: Empirical Evidence from Indonesia
Get PDFThe aim of this study is to examine the existence of causality between corporate governance practice and performance of commercial banks in Indonesia. We also investigate the influence of age, capital adequacy, and type of commercial banks on bank performance and examine the influence of the bank size, foreign ownership, and listing status on corporate governance practice. The result shows that corporate governance practice, bank size and capital adequacy ratio have positive influences on bank performance in Indonesia. However, bank performance does not influence corporate governance practice. This study also finds that regional banks have better performance than private banks. The results of the study support the Central Bank’s efforts to enhance CG practices in the banking sector, to strenghten banks’ capital base and its policy to encourage banks to merge to become larger.
The Behavior of Indonesian Stock Market: Structural Breaks and Nonlinearity
Get PDFThis study empirically examines the behaviour of Indonesian stock market under the efficient market hypothesis framework by emphasizing on the random walk behaviour and nonlinearity over the period of April 1983 - December 2010. In the first step, the standard linear unit root test, namely the augmented Dickey-Fuller (ADF) test, Phillip-Perron (PP) test and Kwiatkowski-Philllips-Schmidt-Shin (KPSS) test identify the random walk behaviour in the indices. In order to take account the possible breaks in the index series Zivot and Adrews (1992) one break and Lumsdaine and Papell (1997) two breaks unit root test are employed to observe whether the presence of breaks in the data series will prevent the stocks from randomly pricing or vice versa. In the third step, we employ Harvey et al. (2008) test to examine the presence of nonlinear behaviour in Indonesian stock indices. The evidence of nonlinear behaviour in the indices, motivate us to use nonlinear unit root test procedure recently developed by Kapetanios et al. (2003) and Kruse (2010). In general, the results from standard linear unit root test, Zivot and Adrews (ZA) test and Lumsdaine and Papell (LP) test provide evidence that Jakarta Composite Index characterized by a unit root. In addition, structural breaks identified by ZA and LP test are corresponded to the events of financial market liberalization and financial crisis. The nonlinear unit root test procedure fail to rejects the null hypothesis of unit root for all indices, suggesting that Jakarta Composite Index characterized by random walk process supporting the theory of efficient market hypothesis.
The Attitudinal and Behavioral Effects of Nonfinancial Measures
Get PDFA recent study by Lau and Moser (2008) found that the use of nonfinancial measures for managerial performance evaluation is positively associated with managerial performance via procedural fairness and organizational commitment. It is not clear, however, whether the findings are generalizable to other contexts. Using very different samples, the objectives of this study are to reexamine and to extend Lau and Moser’s model. Our paper is only able to partially support their model, suggesting that management control systems should be designed to fit the contexts.
Analysis of the Effect of Olfactory, Approach Behavior, and Experiential Marketing toward Purchase Intention
Get PDFThe drive of retail business competition is getting tighter and causing retailers to seek to entice consumers to be regular and faithful at their stores. Retailers need to understand consumer behavior in order to obtain what is desired by consumers. Therefore, consumer behavior needs to be studied considering various factors which can influence consumer decisions to buy a product. The emergence of BreadTalk in Indonesia in the bakery industry with a different concept bakery store has caused rapid development in this industry. One strategy used by BreadTalk to encourage consumers to visit, feel the different experience, and ultimately to increase consumer purchase intention is to use dimensional olfactory as one of the elements in the store ambience. With this phenomenon, this study aims to find the significant influence of the olfactory, approach behavior, experiential marketing toward purchase intention. Collecting data in this study was done by spreading questionnaires to students of the University of Pelita Harapan, who had visited and shopped at BreadTalk Supermal Karawaci. The questionnaires were distributed to 150 respondents. The variables that exist in the study are measured using the Likert scale. The sample collection technique used was a non-probability sampling technique of sampling with a purposive sampling method. The data are then processed by using reliability analysis, validity, and methods of structural equation modelling analysis. From the results of this study the significant influence from olfactory to 3 variables mentioned above can be seen.
Ethical Ideology and Ethical Judgments of Accounting Practitioners in Malaysia
Get PDFThe paper intends to explore the ethical ideology and ethical judgments of accounting practitioners in Malaysia. The objectives of this study are twofold. First, the paper intends to examine the factors that contribute to the different ethical ideology among Malaysian accounting practitioners. Second, it aims to investigate the influence of demographic factors and ethical ideology on ethical judgments of accounting practitioners. The study used Forsyth’s (1980) Ethics Position Questionnaire instrument to examine the ethical ideology of the accountants and adopted ethics vignettes used by Emerson et al. (2007) to assess the ethical judgments of the respondents. From the statistical analysis, this study found that age and gender have a significant impact on ethical judgment but not on ethical ideology. In addition, idealism and relativism have a significant influence on ethical judgment, especially in a legally unethical situation.
The Formulating Growth Strategy of Aceh Port System in Indonesia: An AHP Approach
Get PDFThe main objective of this study is to investigate the growth strategy of Aceh’s ports in order to develop a better position of those ports in the dynamic and competitive environment along the Malacca straits. Using the analytic hierarchy process (AHP) approach, this study examines priority perspectives on strategy formulation from 25 individuals representing relevant parties in the Aceh port industry such as government officials, port authorities and managements, experts, academicians and consultants, and port user associations. Six potential strategies related to resources, competencies, market share, opportunity share, cooperation, and competitiveness were examined. The findings show that the resource-based strategy and the competence-based strategy are ranked as first and second important strategy respectively while the opportunity share strategy ranked as the least important strategy. This study provides new insights into the implications of using various strategy formulations for port growth in developing countries and provides a significant practical contribution to the port authorities.
An Investigation on the Audit Committees Effectiveness: The Case for GLCs in Malaysia
Get PDFFinancial reporting quality has been under scrutiny especially after the collapse of major companies. The main objective of this study is to investigate the audit committee’s effectiveness on the financial reporting quality among the Malaysian GLCs following the transformation program. In particular, the study examined the impact of audit committee characteristics (independence, size, frequency of meeting and financial expertise) on earnings management in periods prior to and following the transformation program (2003-2009). As of 31 December 2010, there were 33 public-listed companies categorized as Government-Linked Companies (GLC Transformation Policy, 2010) and there were 20 firms that have complete data that resulted in the total number of firm-year observations to 120 for six years (years 2003-2009). Results show that the magnitude of earnings management as proxy of financial reporting quality is influenced by the audit committee independence. Agency theory was applied to explain audit committee, as a monitoring mechanism as well as reducing agency costs via gaining competitive advantage in knowledge, skills, and expertise towards financial reporting quality. The study is important as it provides additional knowledge about the impact of audit committees effectiveness on reducing the earnings management, and assist practitioners, policymakers and regulators such as Malaysian Institute of Accountants, Securities Commission and government to determine ways to enhance audit committees effectiveness and improve the financial reporting of GLCs, as well as improving the quality of the accounting profession.
Paternalistic Leadership and Employee Responses in Javanese Culture
Get PDFWhile much has been written about leadership research, little effort has been made to identify what constitutes effective leadership in an Indonesian cultural context. Paternalistic leadership is an emerging body of research that has been adapted to the Indonesian context. Javanese cultural values provide a foundation for an Indonesian form of Paternalistic Leadership (PLI). In this study, 178 civil servants in the province of Yogyakarta Special Region, where surveyed in order to examine their responses to the dimensions of PLI. Results suggested that effective PLI emphasises a leader’s visibility, benevolence and courage. Authority and impartiality need to be expressed in ways that align with traditional Javanese values. Suggestions of the direction for further study are presented.
PARADIGMS IN CONSUMER BEHAVIOR
Get PDFA paradigm influences what we see and conceive about certain facts. Paradigm can also influence what we accept as a truth. Yet, the debate over which paradigm and methodology is best suit for marketing and consumer behavior has begun since 1980s. Many researchers criticized the domination of logical empiricism paradigm and offered alternative paradigm to understand marketing and consumer behavior. This article discusses several paradigms and methodology, which are part of qualitative paradigm, and compares them with positivism paradigm. This article will also point to the importance of reconciliation between qualitative and quantitative paradigm in order to improve marketing and consumer behavior studies