Procedia - Social and Behavioral Sciences 109 ( 2014 ) 49.docx

Procedia - Social and Behavioral Sciences 109 ( 2014 ) 497
– 501
1877-0428 © 2014 The Authors. Published by Elsevier Ltd.
Selection and peer review under responsibility of Organizing
Committee of BEM 2013.
doi: 10.1016/j.sbspro.2013.12.496
ScienceDirect
2nd World Conference On Business, Economics And
Management - WCBEM 2013
The Influence of Leaders Orientation on Event Management
Success: Event Crews Perception
Samsudin Wahaba*, Mohd Sazili Shahibib, Juwahir Alic, Soleha
Abu Bakard, Ahmad
Nawir Abu Amrine
abcde Faculty of Business Management, Universiti Teknologi
MARA, 42300 Puncak Alam Selangor, MALAYSIA
Abstract
A research on leadership styles of event manager’s influence the
event success set the background of the study in this manner.
Leadership styles are one of the factors that lead to successful

event. Successful event can be a good benchmark for event
planning in the future. The objective of the research is to
examine the influence of leadership style towards event success.
Population for this research consists 112 event companies who
are doing consultant event management and organizing the
event
that are running their operation nearby Kuala Lumpur, biggest
city in Malaysia. This non-probability sampling successfully
collected 100 set questionnaires from event crews using
convenient sampling method. The analysis shows that people
oriented
and decision-making oriented of leader have significant
relationship towards event success. Last but not least, this paper
ends
with conclusion World Conference On Business, Economics
And Management - ion, recommendation and suggestion for
future research.
Keywords: People Oriented, Decision Oriented, Leader, Event
Success;
1. Introduction
A research on leadership styles of event manager’s influence the
event success set the background of the study in this manner.
Leadership styles are one of the factors that lead to successful
event. Turner and Müller (2005) cited from Lee-Kelley et al.
(2003) that there is a significant relationship between the
leader’s perception of project success and his or her personality
and
contingent experiences.
Leadership is one of the world’s oldest preoccupations. The
understanding of leadership has figured strongly in the quest of
knowledge. Purpose stories have been told through the

generations about the leaders’ competencies, ambitions and
shortcomings; leaders’ rights and privileges; and the leaders’
duties and obligation.
The absences of leadership are equally dramatic in its effects
and organizations move too slowly, stagnates, and lose their
way
(Mills, 2007). Based on Leslie (2009) the study showed that
crucial leadership skills in today’s organizations are, in fact,
insufficient for meeting current and future needs.
Leadership is one of the factor might contribute to event
success. Northouse (2007) defined leadership is a process by
which a
person influences others to accomplish an objective and directs
the organization in a way that makes it more cohesive and
coherent. Leadership is the ability to lead and influence others
in positive way, motivate, people, provide direction and being
* Corresponding Author: Samsudin Wahab. Tel.: +0-603-3258-
5130
E-mail address: [email protected]
Available online at www.sciencedirect.com
© 2014 The Authors. Published by Elsevier Ltd.
Selection and peer review under responsibility of Organizing
Committee of BEM 2013.
Open access under CC BY-NC-ND license.
http://creativecommons.org/licenses/by-nc-nd/3.0/

498 Samsudin Wahab et al. / Procedia - Social and
Behavioral Sciences 109 ( 2014 ) 497 – 501
innovative (Chand, 2009). He mentioned that there are three
keys of leadership styles which is autocratic, delegate and
participative. According to Brown (2007), leadership styles can
be identified by how authority is used, how a leader relates to
others, employees’ minds and muscles are used, and how a
leader communicates. Different than E. Brown, he mentioned
that
there are four types of leadership styles: dictatorial,
authoritative, consultative and participative.
In other research by Turner (2005), he indicates that there are
four basic leadership styles: autocratic, bureaucratic, Laissez-
faire and democratic, besides two other leadership styles:
transformational and transactional. Successful event can be a
good
benchmark for event planning in the future. It will also show
that the event has achieved its goal. It is important to study the
event success is because it can be used in events by helping
organizations identify strengths and opportunities for
improvement
for both individual events and event program as a whole. This
idea was supported by Farris, Doolen, and Van Aken (2010).
Therefore this research will investigate the importance of
leadership styles on event success in event business.
The research on project manager leadership in projects is scarce
(Müller & Turner, 2010). Prior research studies indicated a
correlation between successful performance and the manager
leadership styles. However, the amount of studies concerning
project manager leadership styles and its contributions to
project success is limited (Yang, Huang, & Wu, 2010).

Leadership competencies relating to project success was lacks
support for project manager leadership contributions. Although
prior studies discussed performance, time and cost, and
competencies in relation to project success, these do not
evaluate project
manager leadership impact. This study tried to address the gap
in project management research of which project manager
leadership styles contributes more to success of the event.
2. Literature Review
2.1. Determining the Success of Event
According to Northouse (2004) event success can be defined as
the achievement of something desired, planned or attempted
after the event organized. One of the factors that would
determine the event success is the event meets its objectives.
This means
that, if the objective of the event is to gain profit, then if the
event achieved the certain amount that has been targeted, the
event
will be considered as successful one.
Leadership literature, blogs, and seminars typically focus on
telling leaders the right things to do if they want to succeed.
That
makes sense for most of us. We want seasoned professionals to
help us learn from their mistakes and accumulated wisdom. By
sharing the most valued aspects of what great leaders do to
inspire others, leaders at any level can learn to improve their
skills.
Those of us seeking advice expect it framed in a positive way
(Bell, 2012).

According to Wilson (2004), long and short-term goals set for
the event should be used to evaluate its success. Success of the
event should include both quantitative measures, such as the
number of people in the audience and profit after the event;
measuring the level of excitement in the room, before and after
comments by “key” people at the event; and determining if
people are looking forward to the next.
2.2. Leadership Styles
A Dictionary of Business and Management (2006) said that
leadership styles are the traits, behavioral tendencies, and
characteristic method of a person in a leadership position.
There are many ways to lead and every leader has their own
styles.
Some of the more common styles include autocratic,
bureaucratic, democratic and laissez-faire. Leadership style
depicts the way
in which a leader attempts to influence the behaviour of
subordinates, makes decisions regarding the direction of the
group, and
keeps a balance between the goal attainment function and the
maintenance function of the group (Fertman and Van Linden,
1999).
The conventional concept of leadership styles assumes a top-
down, role-based view of leadership. Traditionally it refers
how
the leader manages people and how they make decisions.
2.2.1 People
In explored delegation as a method of professionally developing

employees within the context of the full-range model of
organizational leadership and three different leadership models
have been proposed by which to understand delegation. First
model is the transactional operator, next model is the team
player, and third model is the transformational. Self-defining
leader or
each model starts with different attributes of leaders based on
their perspective taking abilities and leadership philosophies
499 Samsudin Wahab et al. / Procedia - Social and Behavioral
Sciences 109 ( 2014 ) 497 – 501
(Kuhnert, 1994). Then, according by Spillane (2005), leadership
through people is designed to equip leaders or managers with
the latest and most influential set of performance management
and people skills that will support their transformation to
become
leaders of change. Leadership behaviours can influence
financial performance of an organization (Yulk, 2008).
Leadership successes follow a familiar structure such as a
charismatic leader, often the CEO or school principal, takes
over a
struggling school, establishing new goals and expectations and
challenging business as usual within the organization. This
leader
creates new organizational routines and structures that with
time transform the culture, contributing in turn to greater leader
satisfaction, higher expectations as a leader, and improved the
achievement. Leadership through people can help unleash the
potential of your people to accomplish your most important
goals and team cohesiveness (Wendt, Euwema and van
Emmerik,
2009).

2.2.2 Authority
Power without authority is illegitimate. Authority without
power is impotent. Behaviourist approach to power gives
rewards
for the performance of the desired behaviours. The rewards are
linked to compliance and must always be ethical. The level of
the
reward must fit the level of expected behaviour to attract the
follower (Vivian Herron, 2009). This type of power should be a
last
resort and should be avoided if at all possible. Coerciveness
alienates individuals.
There may be compliant, but to individuals who are well
adjusted and emotionally healthy, it may be accompanied with
resentment. This power is energy intensive as the leader through
punishment incentives, tries to move the will of another adult.
According by Herron (2009) rationality prevailed, the leaders
were able to turn everyone's attention to the goals at hand and
this,
however, went well beyond the goals of the districts'
expectations and state-wide standards. The pervasive goal was
to ascend to
and maintain a school culture of excellence.
2.2.3 Decision Making
Numerous decisions are made during times of change. As a
manager, handle decision-making will directly influence how
the
organization fares during these times (Hemmrich, 2011). Avery
(2004) has studied how widely dispersed power is in European
companies, and this is associated with an emphasis on gaining
consensus in making decisions. The leader or manager makes

Autocratic and Consultative decisions. These styles vary in the
level of team participation, but in both leader makes the
decision.
Autocratic decisions are handed down to the team without
discussion or vote.
There are times that the leader needs to make a quick decision
but sometimes when leader will want input from the team
before making a decision. This is use can be either to solicit
new ideas for consideration, or to see how the team feels about
some
of the options leader is considering. According to Hemmrich
(2011), when leader bring the team in and allow them to be in
charge of the decision, he or she is either using the group
decision or delegation styles but in both styles the leader give
up his or
her veto power and agree to allow the group to make the
decision.
Group decision can be accomplished either by majority vote.
When the leader assign the decision making process to a group
or subordinates, he or she will not be part of the process, this is
called delegation. So it is important for leader to set up some
rules or limitation.
2.2.2 Flexibility
There is trait approach has been around for many decades, but
there is increasing interest in several skills that appear relevant
for flexible, adaptive leadership. Furthermore, these skills
involve the ability to understand the situational requirements
for
effective leadership and to be flexible in adapting to changing
conditions and crises (Mumford, Friedrich, Caughron, & Byrne,
2007). Flexible leadership theory uses ideas from several
different literatures, including leadership, human resource

management,
strategic management, organization theory, and organizational
change (Yukl, In Press; Yukl & Lepsinger, 2004, 2005).
The theory is about strategic leadership that emphasizes the
need to influence key determinants of financial performance for
a
company: efficiency, innovative adaptation, and human capital.
In addition, the actions and decisions of managers at different
levels in the organization and in inter-dependent subunits must
be mutually compatible and consistent with the organization's
competitive strategy and external environment. The theory of
versatile leadership (Kaplan & Kaiser, 2003) also involves
competing values, but effective flexibility is defined as an
appropriate amount of skills or behaviour related to competing
objective and development (Landry, Stowe, and Haefner, 2012).
500 Samsudin Wahab et al. / Procedia - Social and
3. Method
Population for this research consists 112 event companies who
are doing consultant event management and organizing the
event, which are located at Petaling Jaya, Selangor. This non-
probability sampling successfully collected 100 sets of
questionnaires from event crews using convenient sampling
method.
4. Analyses and Finding
Regressiona

Model Unstandardized Coefficients Standardized
Coefficients
t Sig.
B Std. Error Beta
1
(Constant) 1.985 .737 2.692 .009
mean_people .403 .115 .404 3.496 .001
mean_authority -.017 .127 -.018 -.135 .893
mean_dm .242 .098 .298 2.458 .017
mean_flexibility .019 .138 .018 .139 .890
a. Dependent Variable: mean_es
The analysis shows that people oriented and decision-making
oriented of leader have significant relationship towards event
success. Therefore, there is significant relationship between
people oriented leader and event success. It is also significant
relationship between decision making oriented leader and event
success. The analysis also found no significant relationship
between authority and flexibility towards event success.
5. Recommendations and Suggestion
Good leaders as well as keeping the main goal in focus are able
to think analytically. Not only does a good leader view a
situation as whole, but is able to break it down into sub parts
for closer inspection. Not only is the goal in view but a good
leader
can break it down into manageable steps and make progress
towards it.

Future research should conduct research by using other methods
other than distribute questionnaires such as through
observation and interview. Through observation they can find
and experience by themselves what had happened. Besides,
through interview some expert person who had experience with
event industry they will more advance to get knowledge and
true
feeling of the respondent because this primary source normally
give unbiased answer and penetrable
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MARKETING
Get More from Your Event
Spending
by Frank V. Cespedes and Pankaj Prasad
MARCH 31, 2015
Event marketing is currently a very expensive and sloppy
process in most firms because the relevant
information is fragmented, difficult to assemble, and the
“database” is often a pile of business cards.
But it needn’t be that way. The means for more careful thinking
about the big money you may
already be spending is at your fingertips.
According to a report by the Convention Industry Council,
about 225 million people attend more than
1.8 million events sponsored by companies and associations,
including 270,000 conventions and
11,000 trade shows per year. In 2012, even in the midst of an
anemic global economy and budget
tightening at firms, the amount spent on these events worldwide
was an estimated $565 billion.
2COPYRIGHT © 2015 HARVARD BUSINESS SCHOOL
PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=we

b&cd=1&cad=rja&uact=8&ved=0CB8QFjAA&url=http%3A%2F
%2Fwww.conventionindustry.org%2FFiles%2F2012%2520ESS
%2F140210%2520Fact%2520Sheet%2520FINAL.pdf&ei=c3IVV
cC_IPXbsASi_4DoAw&usg=AFQjCNFMlP40UgrUZTLk1Plbsv
m1XequAA&sig2=8NrTnfYkl_qJ2PeHPi5eow
http://www.slideshare.net/FrostandSullivan/event-management-
software-market
Hosting, attending, and exhibiting at events comprise a
whopping 21% of corporate marketing
budgets, and one analysis indicates that these meetings
“contribute more to the [U.S.] GDP than the
air transportation, motion picture, sound-recording, performing
arts and spectator sport industries.”
But it’s far from moneyball when it comes to event marketing.
Three of five marketers use no tools to
measure event ROI, and most companies plan and execute
events without specific business
objectives. Yet, after sales force costs, events are the biggest
line item in many marketing budgets,
especially for B2B firms.
So consider what more productive event spending means for the
bottom line. Technology to do this
exists, and it has implications for what managers can do before,
during, and after the events they
sponsor or attend.
Before. There’s not just one rationale for events. Goals can
range from lead generation or gaining
access to decision makers to actually selling products or
services — measured against the expense
and opportunity cost of that event. But if you don’t know where
you’re going or why, no road will

take you there. No technology can help managers who are
unable or unwilling to set goals.
Once goals are set, however, there are tools to track ROI
milestones that are currently dark holes in
most marketing budgets. Pre-event registration systems like
Cvent or Eventbrite help organizers sell
tickets, promote the event, and measure responses beyond the
number of registrations. They provide
data, like campaign impressions and email opens, which can
track the relative effectiveness of
various event promotion activities.
The technology will also help you make a a core decision: is
attending, sponsoring, or exhibiting at
this event worth it?
Salesforce addresses this question with potential attendees at
Dreamforce, its annual event. The
Dreamforce 2014 homepage had a calculator that provided users
with the projected ROI that their
respective companies would gain from their presence at the
conference. It also had a template letter
with relevant data that prospective attendees could send with
the data to their supervisors, justifying
the expense, and, in the process, establishing accountable
metrics for follow-up evaluation.
During. At the event, new technologies provide cost-reduction
and revenue opportunities for all
stakeholders. Mobile platforms accessed by apps on smart
phones or tablets replace paper agenda,
venue maps, and other standard documents, saving on printing
and personnel costs while enhancing
sponsorship opportunities. Trade groups such as the Georgia
Economic Developers Association use

an app that lowers the cost and distribution hassle of print
material while generating enough
incremental sponsorship revenue to pay for the app entirely.
The apps also make real the often-cited but rarely-delivered
promise of “engagement” via social
media. Attendees, speakers, and event managers can
communicate, participate in surveys, polls, and
http://adage.com/article/btob/b2b-marketing-budgets-set-rise-6-
2014-forrester/291207/
http://adage.com/article/btob/b2b-marketing-budgets-set-rise-6-
2014-forrester/291207/
http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=we
b&cd=1&cad=rja&uact=8&ved=0CB8QFjAA&url=http%3A%2F
%2Fwww.conventionindustry.org%2FFiles%2F2012%2520ESS
%2F140210%2520Fact%2520Sheet%2520FINAL.pdf&ei=c3IVV
cC_IPXbsASi_4DoAw&usg=AFQjCNFMlP40UgrUZTLk1Plbsv
m1XequAA&sig2=8NrTnfYkl_qJ2PeHPi5eow
http://cdn.2.hubspot.net/hub/146726/file-1341593934-pdf/The-
Stete_of_Event_Marketing_2014.pdf?&_hssc=&_hstc&hsCtaTra
cking=431418b9-3cae-43a7-8431-7ba27e2c4122%7Cc87783fd-
47aO-4667-a99c-ead15a1bc391
https://www.siriusdecisions.com/CSREventStrategyandExecutio
n.aspx
https://www.siriusdecisions.com/CSREventStrategyandExecutio
n.aspx
http://www.cvent.com/
https://www.eventbrite.com/
contests, share reactions and insights, and broaden the event’s
reach by allowing people to link with

others they might not otherwise have met. Beacon (location
based) technology allows exhibitors or
sponsors to direct interested attendees to their product or booth.
Software from firms like Glisser or
sli.do create more interaction in sessions and enable ongoing
dialogue beyond the meeting room.
These services help oft-distracted attendees participate via a
smart phone or tablet. They also you to
create communications and content that reflect the spirit of the
event and your attendees, which is
far better than generic materials prepared at headquarters.
Marketers can also quantify many traditionally amorphous
goals. Networking can be done and
tabulated via the app, allowing exhibitors to connect with
prospects in a more targeted way. Lead
generation is now more efficient and scalable with apps that
provide an all-in-one lead scanner and
note-taking platform which can be seamlessly uploaded to a
CRM system for follow-up.
Remember that, when it comes to signaling interest in the topic
of the event, attendees have already
voted with their feet. So this is often more sales-ready data
about buyers and their key concerns than
the broad demographic data currently resident in most CRM
systems.
After. The most common metrics for evaluating an event are the
“smile sheets” distributed after a
session or the ad hoc perceptions of people in the exhibitor’s
booth. New technology goes further.
Did the keynote speaker deliver? Find out based on the number
of bookmarks, views, and comments
as well as session ratings. Did sponsors get the level of

exposure they hoped for? Impressions, click-
throughs, and interaction with their content are relevant to this
assessment. Did attendees find the
event a good use of their time? That’s an important customer-
satisfaction issue, and comments in the
activity feed are often a better way to gauge that than polite
comments during the cocktail reception.
Data also helps to close the loop. Event goals depend upon your
objectives with current or potential
customers. With current customers, your primary goal may be to
maintain relationships, meet other
decision makers or influencers, stimulate add-on sales, or get
feedback about prototypes. With
potential customers, your goal may involve making initial
contact, establishing a brand presence,
gathering competitive intelligence, or getting follow-up calls
with relevant prospects. These goals
have inherently different evaluation criteria. For account
maintenance and enhancement, for
example, cost per contact is less relevant than it is for acquiring
new leads or post-event meetings
with prospects.
Some companies are already using this type of event data to
boost business. SAP, the global software
firm, generates 60% of its revenues from events and uses app
data to inform sales reps of prospects’
interests. In turn, this data allows the reps to tailor their
conversations to those prospects’ interests
and focus on the most appropriate bundle of products and
services. SAP credits this approach with
increasing sales by as much as 25% where it has been used.

http://glisser.com/
https://www.sli.do/
http://doubledutch.me/clients/sap.html
http://doubledutch.me/clients/sap.html
The benefits of event marketing are undeniable. But too many
firms tend to mismanage their
business-development expenditures, treat their events like de
facto perks, and they refuse to change
their ways because “that’s the way they’ve always done it.” It’s
shame, really. Because with current
technologies, there’s little excuse for that.
Frank Cespedes is a Senior Lecturer at Harvard Business School
and author of Aligning Strategy and Sales (Harvard
Business Review Press).
Pankaj Prasad is co-founder of DoubleDutch, a provider of
mobile event apps, where he heads global sales, channel
relationships, and partnerships
https://hbr.org/search?term=Frank+Cespedes
http://www.amazon.com/Aligning-Strategy-Sales-Behaviors-
Effective/dp/1422196054/ref=sr_1_1?s=books&ie=UTF8&qid=1
416498342&sr=1-1&keywords=aligning+strategy+and+sales
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Procedia - Social and Behavioral Sciences 65 ( 2012 ) 937 –
941
1877-0428 © 2012 The Authors. Published by Elsevier Ltd.
Selection and peer-review under responsibility of JIBES
University, Jakarta
doi: 10.1016/j.sbspro.2012.11.223
International Congress on Interdisciplinary Business and Social
Science 2012
(ICIBSoS 2012)
The Relationship between Time Management and Job
Performance in Event Management
Nor Lela Ahmad, Ahmad Nizan Mohd. Yusuf, Nor Diyana
Mohamed Shobri,
Samsudin Wahab
Faculty of Business Management, University of Technology
MARA, Puncak Alam 42300, Malaysia
Abstract
Time management is the essence of success for any event. The
capability of an event organizer to schedule and
follow the itineraries of an event meticulously is the benchmark
of a good reputation among Malaysian event

management and the world in general. However, the job
performance of an event management crew depends largely
on the ability of the team to achieve the required demands of
the client specifically in the aspect of time. The purpose
of this research paper was to determine the relationship of time
management on the job performance among
Malaysian event management crew. The researchers believe that
in order for an organizer to be successful in the
event industry, they have to make a point to adhere to the
timeframe in completing tasks throughout the event from
the beginning till the end. Out of 100 questionnaires distributed
only 65 returned. The research findings show, that the
employees job performance in the organization were affected by
their time management in completing the tasks
during an event. Furthermore, the result shows that there was a
significant relationship between time management
and job performance. Although the relationship is moderate,
there are significant between them. In conclusion,
mostly the employees said that time management can affect
their job performance, by not having enough time to
manage all their work when the work is more than they can
handle. It is pertinent for the event manager and crew
members to identify the right measures to handle the related
issues in order to satisfy their client. If the employees
cannot manage time properly, it can affect their overall
performance in the event. This article ends with suggestions
on the importance of time management factor in achieving high
performance service among the event crew members
that reflect the organizational performance.
© 2012 Published by Elsevier Ltd. Selection and/or peer-review
under responsibility of JIBES University,
Jakarta
Keywords: Event management; human resource; time
management; job performance

Available online at www.sciencedirect.com
© 2012 The Authors. Published by Elsevier Ltd.
Selection and peer-review under responsibility of JIBES
University, Jakarta
938 Nor Lela Ahmad et al. / Procedia - Social and
1. Introduction
Studies of time management have attempted to analyze and
understand the time use of those persons
who want to become more efficient on the job, in their activities
that they undertake. The need for
prioritization, the creation and use of lists and the assigning of
activities to particular time slots on an
individual's calendar is essential for a successful event. Based
on the assumptions that activities can be
completed in manageable bits, allowing a person to work
through the obligations of the day to achieve
their desired goals will be the key indicators that an event can
be organized in accordance with the client
requirements. Today, the main concern in management of
human resources is the improvement in
performance of people working in the organization with a view
of increasing their efficiency through

motivation (Awosusi, 2011). He added, unless the employees
are well informed about their performance
and also their strong and weak points, it is very difficult for
them to improve their level of performance.
This study is focused specifically on event management. The
researcher wants to determine whether
employees can or cannot maintain their current job performance
within the restricted time frame given
under various circumstances. Therefore, this study was
conducted to identify that time management affect
the job performance of the employees of an organization in view
of organizing an event. The researcher
also wanted to determine the relationship of time management
and job performance and does all other
elements under the main concern affecting each other. Business
professionals need to understand that
time is the most important resource that they need to manage
and maximize. However, time is also the
most misused and mismanaged element in today s world. Hence,
this study attempts to identify the effect
of time management on job performance among employees in
the event industry.
2. Literature Review
2.1 Time Management
Time management is the act or process of planning and
exercising conscious control over the amount
of time spent on specific activities, especially to increase
effectiveness, efficiency or productivity. For
event industry players, this particular item is tantamount to the
success of organizing any event.
According to Altaf and Atif Awan (2011), among recent
sociologists that have shown that the way

workers view time is connected to social issues such as the
institution of family, gender roles, and the
amount of labor by the individual. Meanwhile, according to
Mitchell and Samms (2010) description of
time management, individuals first determine their needs and
wants and then rank them in terms of
importance.
Specific activities include setting goals to achieve the needs or
wants and prioritizing the tasks
necessary to accomplish them. In the aspect of event
management, time is viewed as the planning process
since the initiation stage of the event until the implementation
of the program. Thus, the sequence of
actions must be followed through rigorously to achieve the end
target of organizing a successful event.
Faulkner et al (2007) highlighted, because few, studies have
addressed this specific issue, examination of
the linkage between perceived control over time and job
satisfaction is warranted. It was expected that
those who felt in control of their time would be most satisfied
with their job. Little research has been
conducted on the relationship between job performance and time
management. This is the reason why
this study is conducted to prove that there is a significant
relationship between excellent performances
with proper time management. Time management may be aided
by a range of skills, tools, and techniques
used to manage time when accomplishing specific tasks,
projects and goals complying with a due date.
939 Nor Lela Ahmad et al. / Procedia - Social and Behavioral
Sciences 65 ( 2012 ) 937 – 941

2.2 Job Performance
Job performance is one of the most important factors that most
of organization should consider to
focus in. According to Oswald et al (2007) and Appelbaum et al
(2008), as cited by Smith and Segal
(2012) show us that job performance is the most important
dependent variable and it is also the most
important construct in industrial-organizational psychology
research and practice. Based on the definition
of job performance by Otto et al (2012), job performance
divided into various important factors that need
for further explanation. In event management, the tasks are
divided among the crew members as would
any job division within an organization. Job performance
involves something that people do and can be
reflected on what the action that individual takes (Oswald et al,
2010). However, Faulkner et al. (2007)
as cited by Watson and Strayer (2010) identify that performance
does not include the result of those
particular actions. Usually, results are often mistaken to be
easily quantified and tracked to measure job
performance due to their ability.
The results are not what the actions that individuals takes but
the result are influenced by individual
efforts. Smith and Segal (2012) discovered the results are often
affected by factors beyond the individual
control. Event management focuses on individual job
performances due to the nature of events which are
usually short term. Most event organizers sub-contract
functional divisions while putting one main
supervisor or person-in-charge of each task to oversee that
particular function. Therefore, individual
performance is basically dependent upon others that do the
groundwork to ensure the smooth flow of the

event. That person is entrusted to ensure the success of his/her
function which in the end will contribute to
the overall success of a particular event.
3. Methodology
The type of sampling technique that the researcher used in this
research was convenience sampling
which means each individual of the population has an equal and
independent chance for being chosen to
be part of the sample. For this study the researcher has
distributed 100 questionnaires to employees at
Putrajaya International Convention Centre (PICC). The return
rate was 65%. The questionnaires were
distributed by hand to the respondents. The researcher waited
for the respondents to finish answering the
questionnaire and collected them afterwards to ensure that they
had assistance and explanation. The
Statistical Package for Social Sciences (SPSS) version 18.0 was
used to analyze the data. The initial
analysis was conducted by calculating descriptive statistic
including frequencies, mean scores and
standard deviation. Pearson Production Moment Correlation
analysis was used to determine the
correlation of time management with job performance at 0.05
level of significance.
4. Results and Analysis
The orientation each workers, groups, departments, and
countries have toward time differs relatively
with respect to different cultures or norms of each workers,
groups, departments and countries. The
effectiveness and efficiency of an organization comes down to
the effectiveness and efficiency of
individual workers in the organization. The management of time

is an issue which is fundamental to job
performance, and how a worker manages his/her time will
depend literarily on his/her favourable or
unfavourable attitude towards time which will invariably
influence his/her perceived job performance in
an organization. The researchers found significant relationships
between management of time and
allocation of time to managerial tasks and job performance,
concluding management of time is a key to
managerial performance.
940 Nor Lela Ahmad et al. / Procedia - Social and
Relationship between Time Management and Job Performance
Table 1: Correlations between time management and job
performance
Time
Management
Job
Performance
Pearson Correlation 1 .344**
Sig. (2-tailed) .008
Time Management
N 59 59
Pearson Correlation .344** 1
Sig. (2-tailed) .008

Job Performance
N 59 59
**. Correlation is significant at the 0.05 level (2-tailed).
Table 1 shows the correlations between time management and
job performance. Based on the table, there
is a significant relationship between time management and job
performance with the p value = 0.008 (r =
.344, p < .05).
5. Conclusion
The study proves that there is a significant relationship between
time management and job
performance especially in the context of event management as
event managers or organizers are
constantly working to meet deadlines given by their clients and
the planning process takes months in
advance to prepare. However, the short duration of planning
process usually affect the job performance of
event professionals or crew members. Objective approaches to
time generally consider time as a uniform
commodity where people view it much as they do money. The
basic contrast between ``objective'' and
``subjective'' time is that the former is characterized by concrete
or measurable quantities of time which
people actually have to work with, and the latter is based on
people's perceptions of the amounts of time
available, relative to the things they have to do (Appelbaum,
2008 and Bauer, 2008). Therefore, it is of
the utmost important for event crew members lead by the
manager heading the organizer appointed and
entrusted by the client to carry out their responsibilities to
execute the tasks following up to the event.
Event management companies must recognize the importance of

time when creating, planning and
executing any event.
6. Recommendations
Event planning never stops. This industry goes 24/7, 365 days a
year. Planners work evenings,
weekends, and holidays, often far away from their home base,
organizing and running events that simply
must go on, and go smoothly. Missing a critical deadline is not
an option in the event planning field. Time
management errors can cost a company a potential sale, lose
them an existing customer, and damage their
professional reputation. For smooth event implementation, and
for business success, it is essential that
planners know how to manage their own time as well as they
manage an event. They must be able to
successfully manage their workload, and do what matters most,
when it matters most:
941 Nor Lela Ahmad et al. / Procedia - Social and Behavioral
Sciences 65 ( 2012 ) 937 – 941
Analyze and prioritize tasks. Structure workload for maximum
performance.
Identify red-flag activities that hinder productivity. Save time
using technology.
Reduce stress-producing time crunches. Work with, rather than
against deadlines.
Identify when extra help is needed, as well as how to delegate,
outsource, and even partner with
suppliers in crunch periods.
The researcher recommended that each of the employees

involved in co-ordinating different areas
such as logistics, operations, time management and cost
management need to have a time table in their
task execution. This will enable the employees to use time
wisely in order of priorities. There must be a
balance in the distribution of workload to enable all the
employees to have a fair chance to perform.
References
Altaf, Amal & Atif Awan, Mohammad (2011). Springer Science
+ Business Media. University
Islamabad Pakistan, Moderating Effect of Workplace
Spirituality on the Relationship of Job Overload and
Job Satisfaction.
Appelbaum, S. H., Marchionni, A., & Fernadez, A. (2008).
Perceptions, Problems and Strategies. The
Multi-tasking Paradox, 1313-1325.
Awosusi, O.O., (2011). International Journal of Pharma and Bio
Sciences. Ado-Ekiti, Ekiti State,
Nigeria, Motivation and Job Performances Among Nurses in the
Ekiti State Environment of Nigeria,
Volume 2
Bauer, K., DeVincentis, D., & Jason, T. (2008). Hanover
College, Gender Differences in the Effects of
Multi-tasking Performance.
Faulkner, K. A., Redfern, M. S., Cauley, J. A., Landsittel, D. P.,
Studenski, S. A., Rosano, C., et al.
(2007). Multitasking: Association Between Poorer Performance
and a History of Recurrent Falls. 431-
434.

Mitchell, D. K. & Samms, C., (2010). Army Research
Laboratory, Hampton, Virginia. Predicting the
Consequences of Workload Management Strategies with Human
Performance Modeling.
Oswald, F. L., Hambrick, D. Z., & Jones, L. A. (2007).
Understanding and Predicting Multitasking
Performance. Keeping All the Plates Spinning, 77-84
Otto, S. C., Wahl, K. R., Lefort, C. C. & Frei, Wyatt H. P.,
(2012). Journal of Business Studies Quarterly
Saint Mary s College of California, Exploring the Impact of
Multitasking In the Workplace (Vol. 3, No. 4,
pp. 154-162)
Smith, M., Segal R., & Segal J., (2012). Understanding Stress:
Symptoms, Signs, Causes, and
Effects
Watson, J. M. & Strayer, D. L., (2010). Psychonomic Bulletin &
Review. Universityof Utah, Salt Lake
City, Utah, Supertaskers: Profiles in Extraordinary Multitasking
Ability.
International Trends and Events in
Corporate Finance and Management:
A Survey
Glenn H. Petry and James Sprow
Glenn H. Petry is Professor of Finance at Washington State
University,
Pullman, WA, and James Sprow is an Assistant Professor of
Finance at

Grand Valley State University, Allendale, MI. This paper was
written while
Professor Sprow was a doctoral student at Washington State
University, Pullman, WA.
• Large firms, most of which have international sales, have heen
the suhjects of many capital hudgeting studies. (See references
[2]
through [7] and [9] through [28].) Typically, those studies have
focused on capital hudgeting techniques, hurdle rates, project
ac-
ceptance criteria, availahility of funds, etc. None have analyzed
the
prohlems affecting U.S. firms in their activities overseas, or
their
responses to certain important financial trends both here and
abroad.
This article addresses important financial developments like the
coming consolidation of the European Economic Community,
the
restructuring of the East Bloc countries, the potential reduction
in
U.S. military expenditures, and the rising use of junk honds and
leveraged huyouts (LBOs). Our ohjective was to gain insights
into
the way these events are shaping U.S. firms, as well as the
firms'
attitudes and likely responses to them. This study included
firms
that range from highly multinational to those with little or no
foreign
sales, since our ohjective was to study not only full-fiedged
multi-
nationals, hut also emerging international firms and utilities
with

multinational suhsidiaries.
I. Survey Methodology and Responses
The level of response to mail surveys hy corporate financial
executives in the United States dropped suhstantially after 1976.
Except for two very short surveys ofthe very largest U.S.
corpora-
tions, most recent surveys have had response rates of 26 percent
or
less, compared to a median rate of 50 percent in surveys hefore
1976. To reduce the effects of low response rates, the authors
enlisted the aid of two survey design experts.' While the
findings
and results are the sole responsihility of the authors, one or hoth
of
the survey consultants read all mailings and the questionnaire.
The
questions were all hased on ideas supplied hy 71 U.S. corporate
Dr. Donald Stem, Washington State University, is on the
editorial board as a
specialist in survey research for the .Journal of Marketing
Research Dr. Donald
Dillman is the Director of the Social and Economics Science
Research Center at
Washington State University and author of Mail and Telephone
Surveys: The Total
Design Method (Wiley Interscience, 1978).
financial executives (all members of the Financial Management
Association); the survey was then pretested hy fourteen
executives
and four professors. Although the questionnaire was designed as
carefully as possihle, one must nonetheless acknowledge the
type

of prohlem raised hy Aggarwal [1]. When discussing surveys on
capital hudgeting, he pointed out problems in getting accurate
corporation-wide assessment of technique usage. The problem
should he alleviated in this survey since it focuses on policy
and, hy
summarizing groups, may even out imhalances. The fact that
over
half of the respondents requested the results, thus identifying
them-
selves and their companies, indicates serious attention to the
survey.
The high level of executive response also refiects strong interest
in
the data.
Since the emphasis was on existing or potential multinational
firms, a random sample of 449 of the 1990 Business Week 1000
firms was chosen. (This was a reduction from a slightly larger
sample due to mergers and the elimination of firms involved in
the
preparation of the questionnaire.) Questionnaires were sent to
the
chief financial officers during the summer and fall of 1990, and
after
five mailings, 151 executives of firms, or 33.6 percent, returned
fully or mosdy completed surveys. This response rate is
consider-
ahly higher than for most post-1978 surveys that included firms
smaller than the Fortune 500.
The list of respondents hy industry is shown in Exhihit 1. The
industries represented are quite varied, the largest sectors heing
utilities, financial companies and hanking, and consumer goods
and
retailing. There is a hroad representation of high-technology
firms,

capital and lahor intensive industries, service firms, and those
with
rapid product ohsolescence. (Some of these areas overlap.) To
reduce the size of exhihits, the corporations are grouped into
four
hroad categories: 61 industrial, 40 consumer/retail, 16 finan-
cial/hanking, and 34 utilities.
The bias in the sample is toward slightly larger firms, similar to
that reported in other studies. The median market value of the
Business Week 1000 respondents is 448, while the median
ranking
21
22 FINANCIAL PRACTICE AND EDUCATION --
SPRING/SUMMER, 1993
of the population would be 500, The percentages of
representation
in the broad categories compare as follows:
Bus. Week 1000
Industrial 38,9
Consumer/Retail 29,0
Financial/Banking 17,0
Utilities 15.1
Total 100,0
Respondents

40.4
26,5
10,6
22,5
100.0
Exhibit 1. Industries of Questionnaire Respondents
Industry Growth
1. Utilities (electricity, gas, telephone)
2. Finance, Banking
3. CcHisumer Goods and Retailing
4. Electronics
5. Energy
6. Food and Beverage
7. Chemicals, Plastic
8. Forest Products
9. Machinery
10. HeaMi Care, Recreation & Entertainment
11. Aerospace, Defense
12. Drug

13. Trucks, Transport
14. Computers and Software
15. Publishing, Printing
16. Steei, Tools, Constraction
#
34
16
15
7
10
8
8
9
4
6
6
7
6

5
4
6
Percent
22.5%
10.6
9.9
4.6
6.6
5.3
5.3
5.9
2.7
4.0
4.0
4.6
4.0
3.3

2.7
Total
Industrial (4,5, 7,8, 9,11,13,14, and 16)
Consumer/Retail (3,6,10,12, and 15)
FinanciallBanking (2)
Utilities (1)
151 100.0
The industrial and consumer/retail respondent groups closely
match their percentages of representation in the Business Week
1000, but the rate of response by the financial sector was
somewhat
lower, probably because of consolidations and problems in that
sector. There was a relatively high response by the utilities,
possib-
ly due to their greater public orientation and acceptance of
public
inquiries.
The respondents' answers were also compared for percentage of
reported sales or revenues in foreign countries. Three categories
were used: 0 to 8 percent foreign sales, 9 to 29 percent, and 30
percent and over, the latter group comprising almost exclusively
industrial and consumer/retail firms.
n . International Events and Factors Affecting
Profitability and Risk
Firms selling intemationally encounter both added risks and
added rewards. The foreign competitive environment is shaped
by
different exchange rates, regulations, standards, local customs,
labor relations and degree of integration in financial markets,

U,S,
multinational firms can reduce some risks by investing in
foreign
operations or using offshore suppliers, and increase profits by
expanding their share of the world market. In theory, firms will
invest where they obtain the best risk/reward combination,
A. Consolidation of the European Economic Community
In 1992, the consolidation of the European Economic Com-
munity (EEC) will be complete, with possibly substantial
effects on
profits. With fewer regulations, costs should drop and market
entry
be easier. The survey responses, however, show that most firms
do
not think profits will be affected, or have no prediction about
them.
The most optimistic groups are the industrial and
consumer/retail
firms, where approximately 30 percent believe profits will rise;
almost none of this group predict falling profits. Among all
groups,
the most intemationally oriented firms (30 percent or more of
sales
abroad) are considerably more likely to predict rising profits
from
the EEC, The most hopeful firms are concentrated in the
following
industries (in descending order): publishing and printing; steel,
tools, and construction; drugs; machinery,
B. Restructuring of the East Bloc
Another major intemational event is the restructuring of the
East

Bloc countries, which is likely to increase trade provided the
East
Bloc governments are stable and capitalism is encouraged. Once
much of the restructuring has taken place, investing should be
much
less risky, with more projects having a positive net present
value.
The industrial and the consumer/retail companies have the most
favorable view of East Bloc business opportunities, with over
72
percent already doing business there or planning to do so. These
optimistic views parallel closely the percentages of current
foreign
business the firms have. Almost none of the firms in the other
two
groups currently do business in the East Bloc, and only about 20
percent plan to.
The publishing/printing and drug industries expect to expand
rapidly in Eastem Europe, These industries have relatively low
marginal costs and low capital investments per dollar of sales,
so
they would risk less if the East Bloc govemments proved
unstable.
Few of the financial/banking group and none of the utility group
have had any past involvement with East Bloc countries.
However,
a number of these firms now plan some activity. The utility
com-
panies apparently are working through subsidiaries or plan
telecom-
munications activity,
C. Stability and Restrictions on Currency
The selection of markets to pursue often depends on the

stability
of, and absence of restrictions on the currencies. Monetary
policy
can cause rampant inflation, restricted investment and currency
conversion problems. Instability and current restrictions raise
the
PETRY AND SPROW - INTERNATIONAL TRENDS AND
EVENTS
23
Exhibit 2. International Factors Negatively Affecting Current
Profitability
Restrictive Practices
Tariffs or Regulations
Unstable Cuirencies
Foreign Government Subsidies
Shaky Governments in Less Developed Countries
Third World Debt Problems
Varying Standards Between Countries
Lower Cost of Capital in Countries Without Plants
Lower Labor Costs in Countries Without Plants
Patent Protection
Higher Productivity in Countries Without PlMits

Lower Tax Rates in Countries Without Plants
Other
3.58
3.26
3.15
3.35
2.95
2.64
2.69
2.88
2.69
2.54
2.38
2.49
3.67
uimsumen
Retail
2.79
3.03

3.12
2.59
2.52
2.28
2.28
2.14
2.00
2.24
1.69
1.79
3.33
financial/
Banking
3.64
2.82
2.70
2.73
3.27
3.27

2.55
2.55
2.45
1.91
2.55
2.09
1.00
Utilities
3.78
3.22
3.10
3.30
2.83
2.96
2.78
2.35
2.83
2.30

2.61
2.17
1.00
Weighted
Average
3.44
2.16
3.07
3.07
2.84
2.67
2.58
2.53
2.51
2.34
' 2.26
2.18
2.88

Exhibit 3. Factors Expected to Negatively Affect Future
Intense Competition
High Medical Costs
Low Economic Growth in the U.S.
Government Regulations of the Environment, Safety, etc.
High Litigation Costs
Large Budget Deficits
Regulation of Rates, Entry and Exit
Shaky U.S. Banking System
Shortening of Product Life
Shortening Lead Time
Increasing Investment by Foreigners
PAC Donations by Foreigners
Other
Profitability
Industrial
3.55
3.40
3.17

3.29
3.30
3.33
2.60
2.37
2.13
2.13
1.88
1.98
4.00
Consumer/
Retail
3.83
3.13
3.17
2.69
2.60
2.70
2.77

2.20
2.60
2.23
1.63
1.31
Financial/
Banking
4.43
3.50
3.36
3.00
4.00
3.64
3.07
3.31
2.62
2.46
2.23

2.15
Utilitks
3.43
3.21
3.45
3.76
3.28
3.04
3.72
2.29
2.14
2.18
2.00
1.93
1.00
Weighted
Average
3.71
3.30

3.26
3.22
3.20
3.14
2.97
2.42
2.32
2.19
1.90
1.79
2.60
cost of capital by increasing the variance of returns. Among the
executives surveyed, 86 percent indicated that their companies
do
not invest or substantially limit their investments in those
countries
with hyperinflation or major currency restrictions.
D. Current Negative International Factors
shown in Exhibit 2, executives are especially concerned about
restrictive practices that reduce access to foreign markets,
tariffs
and regulations, unstable currencies, and foreign government

sub-
sidies. It is interesting to note that the consumer/retail sector
seems
somewhat less anxious about these factors in international
markets,
perhaps because their products are less technical.
To construct a comprehensive mternational perspective, execu-
The most intemational firms (30 percent and up of sales abroad)
tives were asked to rate the current factors limiting profits.
They give heav.er weight to the inlportance of unstable
currendes
rated the factors from 1 to 5, with 5 being the most negative. As
restrictive practices, and patent protection. These m a y X on
SPRING/SUMMER, 1993
greater importance the more a firm's sales and profits are at
risk.
Less intemational firms have less concem about shaky govern-
ments.
It is worth noting that, overall, executives are less concerned
about direct economic factors such as lower cost of capital,
labor
costs, tax rates, and higher productivity in a country if their
firms
have no plants there.
IIL U.S. Factors and Events Affecting Profitability
and Risk
In Exhibit 3. the executives were asked to rate factors limiting

future profitability, again using a scale of 1 to 5. Although the
intemational aspect was present, the emphasis here was on
domestic
factors. For this question, the rankings tend to differ
substantially.
For example, intense competition that drives down marginal
profits
is the number one concem of the three non-utility sectors, but
the
utilities are understandably more worried about regulations that
increase costs. While the group rankings do vary, they share
common concerns about high medical and litigation costs, large
budget deficits and low U.S. economic growth. The most
concem
about the latter factor, as one might expect, comes from the
least
intemational (0 to 8 percent of sales abroad) industrial and con-
sumer/retail firms. In the financial/banking sector, the most
inter-
national firms seem more woiTied about intense competition,
large
budget deficits and litigation.
Two other points are worth mentioning. It's interesting, al-
though perhaps not surprising, that the financial/banking group
is
more concemed about the banking system than are the other
three
groups. One might speculate that the banks are benefiting from
asymmetric information, knowing more about conditions in the
banking system than those outside it do.
Despite the considerable press devoted to increasing investment
by foreigners, the executives surveyed seem to accept the notion
of
efficient capital markets. The effects of increasing PAC

donations
also cause them no concern, perhaps because they are net
beneficiaries.
A. Junk Bonds and Leveraged Buy-outs
One of the issues addressed in the financial press has been
whether the proliferation of junk bonds soaks up available
credit,
creates few economic benefits, and drives up interest rates. As
shown in Exhibit 4, most ofthe executives feel there is little
impact
from junk bonds on lending to their firms or, in the case of
banks,
lending by them.
Many of the junk bonds are used to complete a leveraged buy-
out
(LBO). Asked about the LBOs' impacts on the U.S. economy
(see
Exhibit 5), over three-fifths of the respondents feel that they in-
crease the risk of bankruptcy and make the economy less stable.
Roughly one-fourth of the respondents have other criticisms:
that
LBOs raise interest rates and reduce the money available for
equity
capital. Apparently, on this issue some executives are not strong
believers in the efficiency of financial markets. About the same
percentage, however, have positive views: that LBOs improve
competitiveness and provide needed reorganizations of firms.
This
view is more consistent with a belief in market efficiency. The
least
multinational firms are more likely to cite a need for
reorganization
of firms, while the most intemational are more likely to mention

the
negative effects of reducing equity capital or raising interest
rates.
Only about seven percent feel that LBOs have no significant
nega-
tive or positive impact.
B. Increasing Debt Levels
There has been a rising use of debt by Fortune 500 (and
presumably Business Week 1000) industrial companies over the
past 20 years or more (Fuller and Petry [8]). The Fuller/Petry
study
showed that increasing debt is associated with declining real
profit
margins, as firms apparently try to maintain their retum on
equity
by using leverage. In this survey, executives were asked the
reasons
(not the uses such as acquisition) for rising leverage. Almost
two-thirds cited the cheaper cost of debt after taxes, compared
to
equity. (See Exhibit 6.) However, financial theory demonstrates
that will always be true, so the explanation casts little light on
causes
ofthe trend.
Exhibit 4. Effects of Junk Bonds on Lending to Your Eirm
No Effect
More Difficult to Sell New Debt Issues
Banks Asked for More Information
Banks Increased our Lending Because of Soundness

Banks Asked for More Collateral
Banks Raised our Interest Rate
Banks Reduced Their Relative Lending
Other
idustrial
60.7%
6.6
4.9
1.6
3.3
1.6
3.3
Consumer/
Retail
47.5%
12.5
10.0
2.5

2.5
2.5
2.5
10.0
Financial/
Banking
62.5%
6.3
12.5
6.3
6.3
Utilities
47.1%
14.7
5.9
8.8
5.9
5.9
2.9

5.9
Unweighted
Average
61.0%
11.8
8.1
4.4
3.7
2.9
1.5
6.6
Note: Percentages total more than 100 percent because of
multiple responses.
PETRY AND SPROW -- INTERNATIONAL TRENDS AND
EVENTS 25
Exhibit 5. Impacts of LBOs on U.S. Economy
Industrial Consumer/ Financial/ Utiliti^ Weighted
Retail Banking Average
Increases Risk of Bankruptcy, Makes Economy Less Stable

Raises Interest Rates by Diverting Capital from Other Firms
Reduces the Money Available for Equity Capital
Provides Needed Reorganization of Firms
Improves Competitiveness
No Significant Positive or Negative Impacts
Other
Note: Percentages total more than 100 percent because of
multiple responses.
59.0%
21.3
24.6
24.6
24.6
3.3
6.6
62.5%
30.0
25.0
27.5

22.5
10.0
7.5
56.3%
12.5
25.0
32.5
31.3
12.5
6.3
64.7%
32.3
20.6
14.7
20.6
5.9
2.9
61.6%
25.1

25.1
25.1
24.5
6.6
6.6
Exhibit 6. Reasons for Increasing Use of Debt Over Past 20
Years
Industrial Consumer/ Financial/ Utilities Weighted
Retail Banking Average
Debt Costs after Taxes are Relatively Lower than Equity
Innovations in the Debt Market
Fear of Takeover
Belief that Investors & Lenders are Less Risk-Averse than
Before
Belief that Growth is More Predictable
Economy Permanently Now More Stable
Investors/Lenders Don't Remember Depression
Other
Note: Percentages total more than 100 percent becau.se of
multiple responses.

57.4%
41.0
3L1
14.8
8.2
9.8
4.9
6.6
67.5%
35.0
32.5
12.5
15.0
5.0
7.5
43.7%
37.5
25.0
12.5

12.5
6.3
6.3
73.5%
44.1
26.5
14.7
11.8
8.8
5.9
5.9
63.6%
40.4
30.5
13.9
11.3
7.9
4.0
6.0

Exhibit 7. Use of Funds Available From Reduced Military
Expenditures
Reduce U.S. Government Deficit
Increase Spending on Education
Reduce L/T Capital Gains Rate
Eliminate or Reduce Taxes on Dividends
Increase Spending on Roads and Bridges
Increase Spending on Drug War
Reduce Personal Taxes
Reduce Corporate Taxes
Create Tax Credits for Business
Increase Other Social Spending
Other
Industrial
4.42
3.65
3.15
3.15
3.21

3.00
2.47
2.56
2.10
1.78
3.00
Consumer/
Retail
4.66
3.19
3.36
3.38
2.78
2.96
2.81
2.26
2.19
2.42

1.00
Financial/
Banking
4.57
3.62
3.79
3.71
3.23
3.33
2.31
2.08
2.08
1.92
5.00
Utilities
4.31
3.64
3.55
3.59

3.36
2.86
2.79
2.69
2.04
1.85
1.00
Weighted
Average
4.48
3.52
3.38
3.37
3.16
3.02
2.61
2.49
2.10

1.99
2.71
SPRING/SUMMER, 1993
Another 40 percent cited innovations in the debt market, and 30
percent specified fear of takeover. The latter reason for
increased
use of debt, which was most cited by intemational firms,
suggests
an agency problem among managers. It is interesting that the
four
reasons reflecting lowered risk over the past 20 years are the
ones
least cited. Even after the longest peacetime expansion in the
U.S.,
which at the time of the survey had lasted about seven years, the
respondents did not feel that rising debt levels were related to
investors and lenders becoming less risk averse, or to economic
growth being more stable.
C. The Peace Dividend Shifting U.S. Government
Resources to Other Uses
It was widely believed before the Gulf War (and probably even
after it) that federal funds from reduced military spending
would be
available for other uses. As shown in Exhibit 7 in this survey,
the
overwhelming favorite use for such funds was to reduce the
federal
deficit, with the second most important use being for education.

The next three preferred allocations of funds were to reduce the
long-term capital gains rate, eliminate or lessen the tax rate on
dividends, and repair or construct infrastructure, e.g., roads and
bridges. Respondents expressed less support for lower tax rates
or
more tax credits, or spending on social needs.
Those industrial and consumer/retail companies with the least
intemational activity strongly supported reducing the long-term
capital gains rate, possibly because of their greater domestic
invest-
ment; they were less supportive of educational spending.
Interna-
tionally oriented firms had by far the most interest in spending
on
social needs. The most international financial/banking
companies
strongly favored reducing taxes on dividends. This may result
from
a greater awareness that some other countries do not tax
dividends,
giving equity in those places an advantage.
D. Acquisitions and Capital Budgeting Decisions
When firms allocate funds to their divisions for capital invest-
ment, the principal criteria should reflect risk and return. As
shown
in Exhibit 8, the executives do seem to act consistently with this
theory of the firm's and shareholders' wealth maximization. The
most frequent reason given for allocating funds is "potential for
high
future returns." The next three reasons (average rating at least
three): "already established product lines," "high past retums,"
and

"good cost control," suggest either moderate or at least
predictable
risk, or high future retums. High past returns, however, are less
important to the most intemationally-oriented firms, possibly
be-
cause they compete in a more rapidly changing environment
where
past retums are less relevant.
It is interesting to note that the preferences of the CEO, Board
of
Directors, and major stockholders have little influence in
allocating
funds to the divisions. One would have to interpret this finding
guardedly, since the CEO and Board of Directors certainly have
some influence. In large firms, however, the capital budgeting
decision is often made at lower management levels.
A related question, which is really about capital budgeting on a
larger scale, concems the factors that affect acquisition
decisions.
The executives' rated responses, shown in Exhibit 9, again
reflect
a prudent lower-risk strategy. In all three sectors, the two most
important aims in choosing acquisitions are to expand existing
product lines (especially for the most intemational firms) and to
enlarge geographic markets (especially the least intemational
firms). The next most important factor, especially for the
industrial
and consumer/retail sectors, is movement into new but similar
product lines. The financial/banking and utilities sectors rate
this
i'actor considerably lower than do the other sectors, possibly
be-
cause regulation limits their movement into new areas. The only
other relatively important motivation is to acquire productive

capacity. The "other" factor, which is the highest rated, includes
increasing market share, as well as synergies which fit into one
or
several of the first four "expansion" responses.
The least important factors are in some ways the most notewor-
thy findings. The executives' decisions are not driven by market
undervaluation of a target's stock. This suggests either that they
believe in market efficiency or that other factors are dominant.
In
other words, the strategic fit is more important than the market's
valuation. The second interesting point is that tax factors are
not
important, a finding which highlights an old adage, "Never
make
an investment purely for tax reasons." The final point to note is
the
low interest in buying companies with dissimilar product lines.
Apparently, the executive respondents leave the more extreme
forms of portfolio diversification to investors and fund
managers.
Exhibit 8. Reasons for Giving Divisions Capital Budgeting
Eunds
Potential for High Future Returns
Already Established Product Lines
High Past Retums
Good Cost Control
Low Risk Investment
CEO's Preference

Less Competitive in Future
Currently Less Competitive Area
Board of Directors' Preference
Major Stockholders' Preference
lustrial
4.54
3.12
3.52
2.90
2.79
2.81
2.56
2.51
2.08
1.52
Consumer/
Retail
4.39
3.56

3.28
2.88
2.77
2.79
2.77
2.54
1.74
1.71
Financial/
Banking
4.43
3.43
3.62
3.00
3.00
2.64
2.33
3.00

2.08
1.38
Utilities
4.23
3.86
3.00
3.07
3.29
2.48
2.58
2.44
1.96
1.13
Weighted
Average
4.42
3.46
3.38
2.95

2.90
2.69
2.61
2.53
1.96
1.47
PETRY AND SPROW -- INTERNATIONAL TRENDS AND
EVENTS 27
IV. Conclusion
Academic studies usually compare predictions from financial
theory with the actions of financial decision makers and their
effects
on firm value in the "real world." In this survey, although we
looked
at the correspondence between theory and the opinions of
financial
executives in 151 of the largest firms in the U.S., we also took a
more prospective approach. We were interested in how these
financial executives view current trends in the broader financial
world and how these trends are affecting their firms, both today
and
for the future. The degree of a firm's intemational exposure
does
seem to affect executives' opinions and decisions.

From the perspective of financial theory, many of the survey
findings reveal managers acting in the interest of shareholders,
and
accepting the criterion of market efficiency. On the issue of
increas-
ing leverage to ward off a takeover, however, as well as on a
few
others, the executives surveyed either indicate an agency
problem
or do not seem to follow the guideline of market efficiency. •
Exhibit 9. Importance of Factors in Choosing Acquisitions
Expansion of Existing Product Line(s)
Expansion of Geographic Markets
Expansion into New tnit Similar Product Lines
Expansion of Productive Capacity
Undervaluation of Target's Stock hy Market
Tax Factors
Expansion into Very Dissimilar Product Line(s)
histrial
4.29
3.51
3.65

2.43
1.91
1.48
1.40
3.67
Consitmer/
RetaH
3.78
3.78
3.13
3.41
2.00
1.75
1.29
5.00
Financial/
Banking
3.50
3.93
2.77

2.62
2.18
2.58
2.23
5.00
Utilities
3.71
3.64
2.74
2.88
2.35
1.48
1.22
5.00
Weighted
Averj^e
3.90
3.64

3.24
2.79
2.07
1.66
1.45
4.27
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