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A Comparative Analysis on the Job Seekersʼ Preference
  • - Choongseok Lee (Korea Polytechnic University)
  • - Okhyun Ryou (Korea Polytechnic University)
[Abstract]
If a job seeker can easily access to or be provided with the information about a company of interest for being employed and know some companies provide what they want or other companies do not, it would be very helpful for choosing one among job alternatives. Even though lots of information on a specific company is available on the web or from enterprise information providers, this information mainly includes some specific contents which someone with a specific interest wants. Corporate information has been provided for several purposes in a variety of reasons. One is the information about company financial status for better and safer investment and the other may be the general overviews on company web sites for improving company image in public and etc. There is little corporate information available which is tailored to fit what a specific job seeker wants and none the less, it's hard to find any service to compare alternative companies according to any job seeker's preferences.
In reality, well-known or major companies are preferred by job seekers just because job seekers are either familiar to the name and the image of the company or exposed to the company commercial advertisements. Therefore, Small and medium enterprises (SMEs), which have potentials of significant growth in future and providing better work environments, do have few means to deliver company information to potential employees, so have difficulties in recruiting preferred human resources.
This research analyzes the differences of job seeker's major concerning factors due to the job seeker's differences of gender, age, region, university or major department. Using the company assessment framework previously developed by authors, an Analytic Hierarchy Process (AHP) survey is performed for job seekers and the differences of priorities of major concerning factors are analyzed. The company assessment framework is a 3 level hierarchical structure composed of 4 groups, 12 factors and 32 indexes. The four groups of the relative factors are each as following, (1) corporate types and sizes, (2) job stability and growth, (3) working conditions and (4) wage level and benefits. The factor(second) level consists of corporate type, size, stability, growth potential, profitability, credit, vacation policy, working environments, promotion, wages, benefits and educational supports.
Over one thousand students who is going to find jobs near future in the second half of 2010 school year are surveyed and investigated for research purposes. The CI(Consistent Index) values and the individual weights in AHP analysis are calculated. Among one thousand survey papers collected, finally 635 papers are analyzed as 365 survey papers with CI values above 0.1 are excluded. ANOVA (Analysis of variance) is mainly used for analyzing the differences between job seekers types, and the Scheff post-analysis is performed in case of needing further analysis. From the re sults of this analysis, following four significant implications are found regarding the intent of job seekers
First, the job seekers need more information in decision making than the limited information which is currently available. If additional information is effectively provided, job seekers are able to make more rational decisions. The priorities for the first level four groups are corporate types and sizes (0.274) stability and growth (0.265), working conditions (0.225), salary and welfare (0.236) in order. The priorities of the second level factors are determined as corporate type (0.153), size (0.120), wages (0.099), work environments (0.083), stability (0.082), and benefits (0.077) in the order. The top five of 12 factors accounts for 53.7 percents of the total significance. In the level three, the top 10 indices accounts for 50.34%, but the importance of sub-indices is quite big 49.66%. In general the company information for sub-indices of 49.66% is harder to obtain than that of the top 10 indices. This priority analysis shows: utilizing more information is critical for reasonable decision making but, the difficulty of the process of obtaining information or imperfect of the information provided makes this process difficult.
Second, job seeker's major concerning factors are different according to the job seeker's gender, age, region, university or major department. In particular, the differences of priority in the ¡®index¡¯ level of the company assessment framework are clear for different gender or type of colleges. Therefore, the job recommendations need to reflect job seekers characteristics. For different gender, only the working conditions in the first group level is detected with significant difference. In other words, the preference for corporate types and sizes, stability and growth, salary and welfare between the genders does not appear, but female job seekers consider the working conditions more seriously than male ones do. In the second factor level, the preference for corporate types, vacation policy and working environments is different between genders. Compared to women, men considers the corporate types more seriously and women think vacation policy and working conditions are more important when searching jobs. For different types of colleges (four-year or two-year college), the stability and growth in the first group level is detected with meaningful difference. Four-year college students compared to two-year college students are analyzed to consider the company stability and growth important. In the second factor level, two-year college students consider corporate size and vacation policy more seriously and four-year college students think three indices(stability, growth potential and profitability) are more important.
Third, there were regional differences in job preferences. Local businesses need to take advantage of these differences, when they want to hire better employees.
The ANOVA analysis for the regional differences shows that significant difference is detected in the first "group" level factors: stability and growth, working conditions and salary and welfare. In order to verify significance of differences between regional groups, the Scheffe post-analysis is conducted, but no significant differences are drawn in the second factor level. Significant differences are found in the third index level entries: the corporate type, size, profitability, credit grade, and paid vacation, work location, promotion, employee tuition support. Especially, differences in importance of profitability are appeared in the order of regions: Chungcheong, Kyungnam, Honam, Metropolitan, and Central regions. Job seekers in Metropolitan think working conditions and salary and welfare more seriously than the other regions.
Forth, the significant differences are caught according to the job seeker's work experience, so it show the need of educational program like right job awareness for job seekers without work experience
This research shows and confirms that major job concerning factors vary due to the difference of job seeker's various environmental states. This means good jobs for one group of job seekers might not be good for other groups.
The implications of this research can be used to provide job offering services based on characterizing individual or group of job seekers, to reduce currently focused problem, job mismatching between job seekers and job opening companies and help policy-makers to tackle the problem of unemployment of young people.
In the long term perspective, we hope that the Korean SMEs suffering the human resource shortage will have more chances to hire new capable employees easily and that job seekers will be given a reasonable model for evaluating job-opening alternatives.
Exploring Firm Assessment Model of Decent Jobs Creation and HRD Investment for Young College Graduates
  • - Young Saing Kim (KRIVET)
[Abstract]
The purpose of this research is to explore a firm assessing model of decent job creation and HRD investment for young college graduates through reviewing comprehensively firm employment capability, and identifying the main factors of employment capability building through cases reviewing of best practices and surveying college graduate job seekers. Several policy suggestions have developed.
Jobless economic development and increasing unemployment of young college graduates has become a main social issue decomposing middle class and aggravating social polarization. It is necessary to Figure out a new job strategy to create more decent jobs and develop government policies to support more job creating firms. However, only a little information is available to understand the nature of job creation and surrounding factors. Many researches, focused on macro socio-economic analysis of employment based on labor economist disciplines, concluded that the firm job creation capability is supposed to be the main topic of future employment or job strategy researches because corporate organization is the main body of job creation. However, most job strategy researches have overlooked firm employment capability as the main subject of their studies. With these regards, this research was designed to analyze firm capability which creates jobs. At the same time, its research is focused on the needs of college graduates when they find jobs.
The literature of the research is focused on a high skills society, high performance work system, people centered management, great working place and corporate social responsibility. The assumption is that job creation is not the goal of corporate organizations, but output of strategic decisions making human resources in order to increase performance. Job creation is located at the intersection of corporate management and government policy which government is supposed to facilitate job creation in many different levels and job creation is the essential part of corporate social responsibility. The firm employment capability is composed of three components. Firstly, job creation capability which could create new jobs, secondly, job stability which continues employment, thirdly, job quality which relates to decent jobs, such as, fair rewards, welfare and humane workplace conditions.
The main methodology of the research is rooted in ground-theory development because it was hard to find research focusing on firm employment capability. The firm assessing model, which was identified by the case reviews, was tested with 2007 HCCP DB, and case studies with 25 firms. Survey data of 1,000 college graduates were used to understand their firm assessing factors when they assess firms' employment conditions. Results of the survey data analysis indicate that most college graduates say ¡°stability of job is the most critical value of their job searching¡±, and they want to work for conglomerates (39.6%), government (31.4%), middle sized forms (12.8%), SMEs (9.8%), but SMEs create 88% of new jobs. This causes a big mismatch of the labor market. 61.2% of college graduates might want to work for SMEs when SMEs provide
acceptable wages compared to large one¡¯s and SME are a feasible vision. College graduates do not have enough information of SMEs¡¯ employment.
The reasons of why college graduates are unemployed are a mismatching skills and qualifications (35.3%), mismatching of job requirement and their college major (16.4%), reward or wage mismatch (15.3%) job experience mismatch (12.2%), job information mismatch (10.4%), mismatch of workplace environment and work hours (8.0%) mismatching of location of jobs and their living (1.3%) and a shortage of jobs (1.1%). It is necessary to resolve the mismatch of the labor market by means of reducing the wage gap and employment information shortage.
As the job creation capability is reviewed, the framework of case study is composed of human resources (acquisition and development of high potentials, wage level), corporate governance (separation of ownership and management, induction of international investment), organization culture (innovative culture, industrial relations), technology (importing technology, technology change, technology development), strategy (environmental change, org. structure change, customer satisfaction, supply change management), organizational structure (team matrix structure), leaders (entrepreneurship, leadership, org. management), skills and HRD (labor productivity, skills, training), HR structure and policy (encouraging long term employment and reward system), measure of job creation, measure of job protection and measure of employment quality.
25 cases of the best firm practices were developed by the researchers in order to identify any common factors related to the three employment components. The result of the case analysis are that firstly, employment capability is result of interaction between firm factors and government policies. Secondly, there are some similar patterns identified among the cases, but each case has unique features when we look through microscopic lenses. Thirdly, firm competitive strategy seems to have not directly affected the firm employment, however, it defines the nature of employment. Lastly, cooperative culture and entrepreneurial management are the most critical factors to the employment capability.

more than 300 employees
less than 300 employees
Job creation
Wage level (-)
Innovation culture (-)
Industrial relations
Org. structure
Training
Reward structure (-)
Importing technology (-)
-

Thirteen factors including firm culture, skill training and control structure, were proved by the test. With the results of this research, an index of a firm assessing model with ten elements has been constructed. The following table summarizes the regression analysis of HCCP data. Two models are formulated by the size of employees. In the model of job creation, seven variables are significant in left column, but none are significant in right column. This indicates that SMEs and the other large sized firms are different in job creation. Only quality of employment model, innovation culture, leadership, skills and reward system are significant in SMEs. There are more common variables in quality of employment than job creation and job stability
Wage: As wages increase, new jobs might decrease. It might be something to consider to restrain excessive wage increases when job increases are necessary. Innovation culture: Toyota style innovation initiatives focusing on cost reduction would deter job creation capacity. Industrial relations: As industrial relation is cooperative, more employment would occur or normal industrial relation is a hygiene factor of job creation capacity. Importing Technology : when large firms import technology instead of developing it, job creation might decrease. Org. structure : introduction of a team matrix system or an innovative org. structure would have a positive effect on job creation. Training: more training would increase more job creation until a certain level. Appropriate training would encourage a high performance work system. Reward structure: introduction of an annual salary structure might decrease job creation capacity. Outsourcing to subcontractors: more outsourcing to subcontractors decrease job creation.

more than 300 employees
less than 300 employees
Job stability
Wage level
Separation of ownership and management
industrial relations (-)
Encouraging long term employment
-
Quality of employment
Innovation culture
Customer satisfaction
Leadership
Org. management
Encouraging long term employment
Reward system
Innovation culture
Leadership
Skills
Reward system(-)

The firm assessing measure would be used to build an incentive system for firms which create more social value. The employment insurance rate, other social incentives, and interest rates of loan would be moderated by the firm assessing their job creation performance.
A Critical Review of the Relations between Small and Medium Enterprises and Job Creation : Traditional vs. New Approach
  • - Youn Jai Lee (Soongsil University)
[Abstract]
This is a critical review paper of the relations between small and medium enterprises and job creation. The importance of the role of SMEs in job creation has been consistently posed by academic researchers and practitioners. Realizing that SMEs are the important source of job creation, variety of policies on invigoration of entrepreneurship and entrepreneurial environment have been adopted in developed countries such as Europe and the United States. For large enterprises have emphasized on restructuring due to excessive human resources and capital, SMEs has been the important source of job creation. Particularly, the innovative venture firms have contributed substantively to job creation. Similar phenomena have been occurring in Korea as well. Since the IMF financial crisis of late 1990s, SMEs have created more jobs while large enterprises have tried to concentrate on reorganization and restructuring of human resources.
In chapter 2, the theoretical relations between SMEs and job creation are reviewed briefly. In chapter 3, issues of research methodological approaches are discussed. This paper discusses not only macro approaches but also micro approaches such as perspectives of individual firms and individual job seekers. In chapter 4, the new research areas regarding employment issues of SMEs and the future research directions are discussed and introduced. In the final chapter, chapter 5, the paper closes with the summary and conclusion.
In Korea, although large enterprises in the manufacturing sector have achieved global competitiveness with rapid increase in products and sales amount of the manufacturing sector, they do not contribute significantly in job creation due to the expansion of FDI (Foreign Direct Investment) and off-shoring in abroad. In recent years, overseas investment by large enterprises in Korea exceeds its domestic investment resulting decrease in local job creation capacity of large firms. While the contribution of SMEs has been higher than that of Large enterprises until 2006 and this trend still seems to be valid.
Generally speaking, SMEs has been the important sources of job creation and kept job stability. During the past decades, SMEs has created substantial amount of jobs in most developed countries. What is more, recent global financial crisis has deteriorated job growth even more. SMEs is experiencing labor shortage, while job seekers of younger generation are suffering from unemployment. Thus the goal of this paper is to review briefly existing researches on the relations between SMEs and job creation and to propose future researches.
Recently, there are more researches that innovation in SMEs is more substantial in job creation. Particularly, entrepreneurship, which plays a pivotal role in innovative activities of SMEs, is gaining more importance (Garret and Wall, 2006). In the States and Europe, the important role of entrepreneurial activities by SMEs in job creation has been recognized, so that the start-up assistance policy has been emphasized more. But indirect supporting policies have been employed, instead of direct supporting polices. However, the long-term vs short-term impacts of entrepreneurial activities on job creation has been continuously argued. The start-up of new firms has two controversial influence like a double-edged sword. It directly affects job growth by creating new jobs, but it also diminishes job growth by substituting existing firms with new ones. Researchers generally agree with the fact that entrepreneurial activities has a positive effect on job creation but its discussion of long and short-term effects is inconclusive. The empirical evidence of the entrepreneurial activities has been mixed up: some countries showed positive impact on job creation while others negative one. In Korea, Lee (2009) and Lee et al. (2011) showed positive impact on job creation.
Traditionally, job creation has become one of the main subjects of macroeconomics. Globalization has led to the increase in foreign direct investment and automation of manufacturing facilities of large enterprises, which has diminished job creation. What is more, large firms have a favorable advantage of flexible adjustment of labor forces according to business cycle, comparing to SMEs. In recession, they can cut off excessive workforce without any big problem because they are at the favorable position of attracting new job seekers. On the other hand, SMEs are not flexible with adjustment of workforces, which keep holding labor forces even in case of recession. Ironically, inflexible labor adjustment of SMEs played a role in hoarding the potential unemployed labor forces.
For some more information about SMEs' job creation, categorizing SMEs more in detail is needed. There can be classified two types of SMEs : new venture firms started-up and existing SMEs with long age. In terms of job creation capacity, new venture firms survived for some years (generally 5 years or more) showed more positive effect on job creation, comparing to existing enterprises or new ones started-up newly.
This paper also highlights some issues addressed by micro approaches, which deals with individual firms or individual job seekers, rather than unit of the national economy. First, a paradigm shift is necessary to expand job creation in today¡¯s jobless growth period. Potential SMEs can appeal to younger generation if they emphasize human resource development such as career education development. Second, the miss-match issue in labor market is critical. There exists a critical miss-match of information between job seekers and firms. Firms do not have enough information on job seekers and vice versa. Third, creating new types of jobs or firms could be a complement to the job growth issue. Especially, supporting the creation of one-man companies could be the alternative. Fourth, creating jobs in emerging the industry sector is also very important. The Korean government is focusing on ¡®green growth¡¯ strategy and related industries such as new regeneration energy could be important sources of job creation in near future.
Traditionally, researches related to labor market have adopted macro perspective. However, macro approach could not cover SMEs' diversity, so that micro approach is needed to compensate for weakness of macro method. Recently, there is a strong tendency to assume an employee as a human capital. Therefore, there is a general agreement that the competency of job seekers is substantially related to the possibility of employment. Thus, future research focusing on the competency of job seekers could be desirable. As economy goes to the aging economic structure, unemployment of the old generation would be the big social issues in near future. There are some arguments that the supporting unemployment programs for the old generation would crowd out the young generation's job. Some more research on this issue is needed. Traditionally, macro approach has been employed in research on SMEs' job creation, but micro approach is needed to compensate for missing parts due to aggregated analysis.
A Study on the Management Efficiency of Korean ICT Small and Medium Sized Enterprises(SMEs)
  • - Gui Ryong Ha (Kyungbook National University)
  • - Suk Bong Choi (University of Ulsan)
[Abstract]
The growth of the Information Communications and Technology (ICT) industry in Korea over last 20 years is recognized as a significant factor for the sustainable growth of the Korean economy as a whole. The Bank of Korea reported that 40% of the total GDP growth rate is attributed to the ICT industry. The main reasons of such impressive performance are proactive policy support by the Korean government and continuous efforts of ICT firms for R&D and technological innovation. Although there is a general consensus that the small and medium sized enterprises (SMEs) play a critical role for the improvement in the competitiveness of the Korean ICT industry, little empirical analysis of management efficiency on the ICT SMEs has been done since the 2008 financial crisis and global recession. Thus, this research attempts to measure and analyze management efficiency based on data envelopment analysis (DEA) models. In particular, recognizing the significance of technological innovation for the competitiveness of ICT SMEs, we applied R&D expenditure with fixed assets and numbers of employees as input factors and highlighted their role in evaluating efficiency.
Several contributions of this present study are noteworthy. First, our study investigates the increasing role of SMEs in the process of development of ICT industry in Korea. This is in contrast to the previous research of management which has mostly focused on large firms. We attempt to identify the best practice of SMEs for benchmarking purposes to improve their management efficiency. Second, our study is longitudinal. By using 4 different years of longitudinal data, this study conducts rigorous tests of the key factors affecting management efficiency and their trends over years. Third, by applying R&D expenditure with fixed assets and employee size as alternative input factors, we provide several plausible alternative explanations on the role of long term investment and technological innovation capability on the management efficiency in Korean SMEs. The ICT firms have been active in long term R&D investment for their competitiveness. We consider this industry specific factor for the analysis of management efficiency.
The paper is organized as follows. Section 2 provides theoretical background. It includes a critical review of the ICT industry and management efficiency research on SMEs. Section 3 defines the DEA model, including input and output measures. Section 4 identifies the best practices of the frontier firms surveyed in this study. We also present the main results of empirical analysis. A conclusion with some theoretical and practical implications is presented in Section 5.
Our research results suggest that there exists a close internal relationship between R&D, fixed assets and employee size and sales, which is an output measure, and their inherent relationship makes efficiency scores closer to 1. The results show that less than 10 percent of the firms are fully efficient in R&D and management activities and that more than two-thirds are at the stage of increasing returns to scale.
More specifically, results obtained in our CCR model of DEA analysis show average technical efficiency (TE) in the range of 33~47% over the four years surveyed. Hence it implies that firms operating at the correct scale could save up to 33~47% of their inputs to produce the same amount of output. Secondly, applying the BCC model, the average of pure technical efficiency (PTE) scores are in the range of 58%~74% over the years estimated. The scores suggest that a much larger number of DMUs becomes efficient, implying that the model did not correctly discriminate among efficient and inefficient units. Thirdly, scale efficiency (SE) scores on average are higher than TE and PTE scores for the same years, distributed between 59% -77%. This result suggests that inefficiency from internal operation of firms is much more severe. Finally, when we consider the efficiency scores by the multiple years surveyed, it shows that the score has been gradually reduced. For instance, the findings indicate that 17.2% of the enterprises achieve CRS scores of over 0.8 in 2006 while it reduced to 13.8% in 2007 and 10.3% in 2008 and 2009. This implies that global economic crisis has comprehensively impacted the ICT market since 2008, which constricted firms¡¯ long term investment and sales growth.
Despite previous academic efforts to investigate the successful growth of ICT industry in Korea, the increasing role of ICT SMEs in such development have rarely been analyzed, especially from the management efficiency perspective. Previous studies have not attempted to examine the effects of technological innovation activities as an important factor for management efficiency analysis. The relevant literature has focused primarily on efforts as determinants of R&D and management performance. Little attention has been given to the effective use of resources, particularly at the SMEs level. They also show considerable limitations by using cross sectional data or focusing on large firms. This paper tries to fill these gaps by developing an alternative approach to the evaluation of management efficiency of the ICT industry with particular reference to ICT SMEs and using panel data over four years. This study also highlights the distinctive results from three different models to evaluate management efficiency (i.e. TE. PTE and SE), and incorporate them to provide better implication for firms who improve their efficiency. For instance, our research suggests that inefficient firms can improve their efficiency through not only a reduction of R&D expenditures, number of employees and fixed assets, but also increasing R&D and enlargement of employment since firms show different results of efficiency features depending on the consideration of scale effects.
This paper contributes to the understanding of firm level dynamics of management efficiency in the Korean ICT industry. By considering industry specific features of ICT firms which are more proactive in R&D than others, we have assessed relative technical and scale efficiencies of management and R&D resources across ICT SMEs. The findings of the paper have significant policy implications to innovation strategy and management policy for ICT firms and other technology-intensive industries that require continuous improvement in management efficiency for a competitive advantage.
The study has several limitations that may be addressed in future research. Firstly, we measured output factor by using sales data. However, not all firms pursue sales growth as their purpose of management. Some may prefer to maximize net profit or develop new technological capabilities. Thus, we suggest that future studies should use more fine-grained decomposition of the various forms of output measures. Secondly, as our study focused on investigating relative management efficiency scores, future studies may analyze what factors affect management efficiency. Thirdly, the generalisability of the findings are limited by our use of one industry and stock listed firms for the research context. Future works should aim to address these limitations by considering different industries, large firms as well as SMEs, stock listed firms and non-listed firms. These extensions would further develop our understanding of management efficiency of SMEs in relation to innovation activities.
The Policy of Win-Win Growth between Large and Small Enterprises : A South Korean Model
  • - Jang Woo Lee (Kyungpook National University)
[Abstract]
Since 2000, the employment rate of small and medium enterprises (SMEs) has dwindled while the creation of new jobs and the emergence of healthy SMEs have been stagnant. The fundamental reason for these symptoms is that the economic structure is disadvantageous to SMEs. In particular, the greater gap between SMEs and large enterprises has resulted in polarization, and the resulting imbalance has become the largest obstacle to improving SMEs¡¯ competitiveness. For example, the total productivity has continued to drop, and the average productivity of SMEs is now merely 30% of that of large enterprises, and the average wage of SMEs¡¯ employees is only 53% of that of large enterprises.
Along with polarization, rapid industrialization has also caused anti-enterprise consensus, the collapse of the middle class, hostility towards establishments, and other aftereffects. The general consensus is that unless these problems are solved, South Korea will not become an advanced country. Especially, South Korea is now facing issues that need urgent measures, such as the decline of its economic growth, the worsening distribution of profits, and the increased external volatility. Recognizing such negative trends, the MB administration proposed a win-win growth policy and recently introduced a new national value called ¡°ecosystemic development.¡± As the terms in such policy agenda are similar, however, the conceptual differences among such terms must first be fully understood. Therefore, in this study, the concepts of win-win growth policy and ecosystemic development, and the need for them, were surveyed, and their differences from and similarities with other policy concepts like win-win cooperation and symbiotic development were examined. Based on the results of the survey and examination, the study introduced a South Korean model of win-win growth, targeting the promotion of a sound balance between large enterprises and SMEs and an innovative ecosystem, and finally, proposing future policy tasks.
Win-win growth is not an academic term but a policy term. Thus, it is less advisable to give a theoretical definition of it than to understand its concept based on its objective and method as a policy. The core of the MB administration¡¯s win-win growth policy is the creation of a partnership between key economic subjects such as large enterprises and SMEs based on each subject¡¯s differentiated capacity, and such economic subjects¡¯ joint promotion of growth opportunities. Its objective is to contribute to the establishment of an advanced capitalistic system by securing the sustainability of the South Korean economy. Such win-win growth policy includes three core concepts. The first concept, ecosystem, is that win-win growth should be understood from the viewpoint of an industrial ecosystem and should be pursued by overcoming the issues of specific enterprises. An enterprise is not an independent entity but a social entity, meaning it exists in relationship with the society (Drucker, 2011). The second concept, balance, points to the fact that an effort should be made to establish a systemic and social infrastructure for a healthy balance in the industry. The social system and infrastructure should be established in such a way as to create a balance between short- term needs and long-term sustainability, between freedom and responsibility, and between profitability and social obligations. Finally, the third concept is the behavioral change of economic entities. The win-win growth policy is not merely about simple transactional relationships or determining reasonable prices but more about the need for a behavior change on the part of economic entities, without which the objectives of the policy cannot be achieved.
Various advanced countries have developed different win-win growth models based on their respective cultures and economic-development stages. Japan, whose culture is characterized by a relatively high level of group-centered trust, has developed a productivity improvement model based on such culture, whereas the U.S., which has a highly developed system of market capitalism, has developed a system that instigates or promotes market-oriented technological innovation. Unlike Japan or the U.S., Europe, a late starter, has not fully developed a trust-based culture or market capitalism and thus often uses a policy-led model based on which the government leads the improvement of productivity and promotes technological innovation. By modeling successful cases from these advanced countries, South Korea can establish its unique win-win growth system. For this, it needs to determine the method and tasks that suit its circumstances by examining the prerequisites for its success as well as the strengths and weaknesses of each advanced country.
This paper proposes a South Korean model of win-win growth, whose objective is to upgrade the country¡¯s low-trust-level-based industrial structure, in which large enterprises and SMEs depend only on independent survival strategies, to a high-trust-level-based social ecosystem, in which large enterprises and SMEs develop a cooperative relationship as partners. Based on this objective, the model proposes the establishment of a sound balance of systems and infrastructure between large enterprises and SMEs, and to form a crenovative social ecosystem.
The South Korean model of win-win growth consists of three axes: utilization of the South Koreans¡¯ potential, which creates community-oriented energy; fusion-style improvement of various control and self-regulated systems for establishing a high-trust-level-oriented social infrastructure; and behavioral change on the part of enterprises in terms of putting an end to their unfair business activities and promoting future-oriented cooperative relationships. This system will establish a dynamic industrial ecosystem that will generate creative energy and will thus contribute to the realization of a sustainable economy in the 21st century.
The South Korean model of win-win growth should pursue community-based self-regulation, which promotes the power of efficiency and competition that is fundamentally being pursued by capitalism while at the same time seeking the value of society and community. Already existing in Korea¡¯s traditional roots, such objectives have become the bases of the Shinbaram culture, characterized by the South Koreans¡¯ spontaneity, creativity, and optimism. In the process of a community¡¯s gradual improvement of its rules and procedures, the trust among the community members increases, and the ¡°social capital¡± that guarantees the successful control of shared resources can be established (Ostrom, 2010). This basic ideal can help reduce the gap between large enterprises and SMEs, alleviating the South Koreans¡¯ victim mentality in the face of competition and the open-door policy, and creating crenovative corporate competitiveness.
The win-win growth policy emerged for the purpose of addressing the polarization and imbalance structure resulting from the evolution of 21st-century capitalism. It simultaneously pursues efficiency and fairness on one hand and economic and community values on the other, and aims to foster efficient interaction between the market and the government. This policy, however, is also evolving. The win-win growth policy can be considered an extension of the win-win cooperation that the past ¡®Participatory Government' promoted at the enterprise management level to the level of systems and culture. Also, the ecosystemic development agendum that has recently emerged is a further extension that has been presented as a national ideal of ¡°a new development model that promotes the co-advancement of environmental conservation, growth, economic development, social integration, and national and individual development.¡±
Climate Change : Emerging Issues and SMEs¡¯ Proactive Strategies
  • - Sunghan Jo (Dongguk University)
  • - Hye Jeong Nam (Dongguk University)
[Abstract]
In the 20th century, global warming from increased greenhouse gases has resulted in serious climate change. Issues related to global warming and climate change have arisen as international issues and the United Nations Framework Convention on Climate Change (UNFCC) has been adopted as one of the solutions for a practical plan. To cope with the global issues, a reduction of greenhouse gases to mitigate global warming is required by all countries and Korea also set a target to reduce greenhouse gases by 30% by 2020. In addition, Korea is a member of the OECD and ranks as the 10th country in the emission of greenhouse gases. Therefore, a more active participation to reduce greenhouse gases is required in Korea. It is sure that activities for the reduction of greenhouse gases may improve a company's image in the long term and furthermore, reform the environmental problems. However, it is also sure that these activities will incure a lot of costs. Specifically, small-sized companies which have few human and material resources may bear a lot of expenses. Accordingly, appropriate strategies for small-sized companies to reduce greenhouse gases should be prepared.
In this paper, we review the Kyoto Protocol and the history of the reduction of greenhouse gases. To do this, we examine descriptive statistics of greenhouse gases emissions and climate change in Korea, and investigate a carbon footprint system as an appropriate strategy for small-sized companies. First, we identify a carbon footprint system that has been implemented in other countries. Specifically, we document the history and characteristics of carbon footprint system in United Kingdom, United States, Sweden, and Canada. For example, the United Kingdom started a carbon footprint system by Carbon Trust in 2001. According to the survey implemented by the Consumer Association in 2011, 70% of respondents agree about a required carbon label for every item. In addition, they have intention to buy products with a carbon label even though they have to pay more for it. Second, based on the evidence from other countries, we suggest a carbon footprint system as an appropriate strategy for small-sized companies in terms of costs and benefits.
Climate change is one of the most serious environmental issues today, and one of the main sources of climate change is carbon dioxide. When it comes to the emission of carbon dioxide, the proportion of carbon dioxide of greenhouse gases was 84.4% in 1990 and 89.5% in 2007, respectively. The more serious problem is that the emission of carbon dioxide has increased over time. Therefore, reducing carbon dioxide is an important issue now. A carbon footprint system is the process in which the carbon dioxide greenhouse gas emissions are targeted with an equivalent amount to be removed. The purpose of the carbon footprint system is to promote a consumer-led purchasing pattern of low carbon goods and to encourage enterprises to develop technologies towards low-carbon goods, thus ultimately contributing to the international efforts to reduce greenhouse gases. The carbon footprint system is not a mandatory certification system, but is a system that companies may participate in on a voluntary basis. The carbon footprint system is becoming prevalent worldwide, especially after the British Carbon Trust Fund launched its experimental scheme in December 2006. Japan also began developing its own carbon footprint system in June 2008. In Korea, the Ministry of Environment, leading retailers such as Shinsegae, E-mart, and Samsung Home Plus made an operating agreement concerning carbon in 2009. In 2011, 434 products in Korea have received a carbon label and more than 500 products are expected to get a carbon label by the end of this year. Moreover, Korea also is recognized as a leading country for carbon labeling in electronic products.
There are many advantages when a company adopts a carbon footprint system. If a company is designing and delivering low carbon goods or services, they can improve a company's image. In addition, by providing quantitative information to consumers with regards to carbon emissions, a company can increase consumer preferences towards less carbon greenhouse emissions along with enhancing the competitiveness of the company. Moreover, the environmental information disclosed regarding the active carbon footprint labeling will help not only customers choosing a more environmentally friendly manufacturer, but also enhance the competitiveness of companies. Therefore, adopting a carbon footprint system in small-sized companies is one of the best strategies to participate in environmental campaigns and to enhance a company's image. Despite these advantages, participation in the carbon footprint system is relatively low because of high costs and low incentives. According to a report from the Korea Small Business Institute in 2010, understanding about the reduction of greenhouse gases is very low and there is little information about the regulation of greenhouse gases. The report states that small-sized companies said that the best strategy as a response for regulation on the emission of greenhouse gases is to reduce the usage of electric equipment. This implies that most small-sized companies do not have any strategies to implement a plan to reduce greenhouse gasses. So, to deal effectively and efficiently this issue, proper programs for small-sized companies are suggested. Although the Korean government provides many channels and support programs for small-sized companies, more practical incentives like financial aid, tax benefits, or education programs should be provided concurrently. The companies also should put more effort into their business activities. They have to care about effective usage of energy and a reduction of greenhouse gases. In a more aggressive way, they can promote new types of energy such as green sources and photovoltaic power generation to decrease the usage of fossil fuel. To meet the demand of the times, the government introduced a challenging program like a partnership between large and small-sized companies. The program is considered a useful method in terms of offering sophisticated information and technical skill from large companies. Based on the success of this program, the government is expected to adopt the program in new areas and recommend small-sized companies use it.
In summary, this study contributes to the related literature in several ways. The reduction of greenhouse gas emissions from carbon footprint labeling contributes to the effort of reduction as a whole, and climate change mitigation. Therefore, the suggestions of this study will be useful for developing mitigation strategies related to climate change. Second, the discussion of environmental issues has progressed for mostly large companies. However, considering the condition of small-sized companies in terms of limited resources, more concerns and efforts should be focused on small-sized companies. The findings of this study show that the carbon footprint system may be an effective strategy that can provide a lot of important implications to regulators and investors. Academics can also apply the discussion in this paper for related research. Also further research on the facts of emissions of diverse fuel types would help create better methods for successfully dealing with the challenges posed by climate change.
An Impact of Quality and IT Application Ability of Computerized Accounting Program on User Satisfaction and Loyalty : Focusing on Comparison between University Students and Accounting Staff
  • - Myeong Geol Son (Hoseo University)
  • - Gun Kwon Shin (Hoseo University)
[Abstract]
With the rapid development of Information Technology (IT) and Internet and Communication Technology (ICT), small and medium-scale tax offices have competitively introduced highly computerized accounting information systems or computerized accounting programs which have impacts on user's economic decision-making. The importance and role of accounting information systems and computerized accounting programs in tax offices and small firms are expected to continue to grow in the future. However, if a company's computerized accounting systems and programs fail to play their roles and functions, these systems and programs may lead to direct losses.
Introduction of an accounting information system can take the form of either self-development or outsourcing, or partial adoption of modified package types of computerized accounting programs. The former way is employed by mainly large companies while the latter way is taken by small or medium-sized companies. Universities mainly employ package types of computerized accounting program for computerized accounting education. Manufacturers supplying computerized accounting programs for university education have much interest in how their users are satisfied with computerized accounting programs and how these user satisfaction will lead to user loyalty. In addition, users would be interested in the utilization of computerized accounting program they learned at the university even after their graduation. However, there have been few research cases which investigate factors that affect the adoption of computerized accounting program by university students and accounting staff.
The utilization of computerized accounting programs is becoming more and more frequent in transaction data processing. However, though computerized accounting programs are considered important in accounting education of university students and accounting staffs employed in tax accounting offices, there has not been enough research interest, let alone any systematic research study with regard to the use of computerized accounting programs. In particular, there has been even less research cases conducted on the relationship between the quality of computerized accounting programs and user's abilities utilizing IT (Information Technology), user satisfaction and loyalty.
The purpose of this research is to investigate some relationships among quality factors of computerized accounting programs, user's abilities utilizing IT, user's satisfaction and loyalty. In addition, the purpose of the study is to explore a moderating effect on the relationships between quality factors of computerized accounting programs, user's abilities utilizing IT, user's satisfaction and loyalty according to the user group (university students and accounting staff).
A survey questionnaire was distributed to 452 users across the nation who were using computerized accounting programs, and 412 responses were collected, out of which 23, which were regarded as lacking in proper information fill-in, were d. A descriptive statistical analysis was applied to the remaining 389 responses, and the SEM (Structural Equation Model) was used for hypothesis-testing.
The results of the research are summarized as follows: First, it was found that the information and system quality of computerized accounting programs had a statistically significant positive effect on user's satisfaction in information. Second, the user's abilities utilizing IT were found to have a statistically significant positive effect on user's satisfaction in information. Third, the user's satisfaction in information was also found to have a statistically positive effect on user's loyalty. Fourth, the categorical variable of user group (university students and accounting staff) was found to have a moderating effect on the relationships between quality factors of computerized accounting programs, user's abilities utilizing IT, user's satisfaction and loyalty.
With regard to hypothesis-testing, the following discussions are made: First, in order to discover determining factors of user satisfaction and user loyalty, a research model was designed based on analysis of previous research studies. Major research variables such as information quality, system quality, and user¡¯s IT application ability were found to have a positive effects on user satisfaction. It was also found that system quality had the most influence on user satisfaction, followed by information quality and user¡¯s IT application ability. Therefore, processing speed and prompt action on user¡¯s needs need to be considered in developing computerized accounting programs. Besides, it is necessary to provide users with high-quality accounting information since they perceive quality of information as the determining factor of user loyalty.
Second, it was found that user¡¯s IT application ability had a positive effect on user satisfaction to a lesser degree than quality variable. Considering the fact that there has not been enough research on the relation between IT application ability and user satisfaction, it is recommended that a replication study should be implement with this IT application as an extraneous variable. At the same time, it is suggested that university computerized accounting education or accounting training programs need to put more emphasis on user¡¯s IT application ability because this has a large effect on user¡¯s satisfaction.
Third, a user group was chosen as a controlling variable, and this research was interested in seeing how this resulted in the flow of structural model. As a result, it was found there were controlling effects between quality variable and user IT application ability, and user satisfaction and user loyalty. Besides, an analysis of respective samples has shown that there were significant relations between user groups. More specifically, university user groups had higher path coefficient than company user groups. This has ramifications for designing and implementing computerized university accounting education and corporate accounting training programs. It is suggested that, in order to improve user satisfaction and loyalty in both university accounting education and corporate accounting training, programs need to provide high-quality information and IT application ability through systematic education and training programs.
As a result of analysis and discussion, the following suggestions are in order: First, this study is considered important in that it has established a research model which can improve user¡¯s satisfaction and loyalty. In particular, by including user¡¯s IT application ability as an extraneous variable, it could expand the scope of research in the field of AIS. Second, this research is considered meaningful in that it can provide managerial guidelines for customer satisfaction to companies which develop university or corporate computerized accounting programs. For instance, user satisfaction can be improved through improvement in user¡¯s IT application ability. This will lead to more intention to use and actual use of computerized accounting programs. Besides, useful information can be provided to companies which seek to develop differential accounting programs by considering different attributes among different user groups.
Some limitations for this study are as follows: First, since the current study did not include sufficient quality variables, the result of the study has limitations in generalization. Second, since it used user¡¯s IT application ability as an individual characteristic, it is possible that it could not acquire enough necessary information in terms of inter-user relations management. Third, since this study used a cross-sectional survey method, it is possible that it could not investigate the effects in the long-term perspective.
It is suggested that future studies need to consider a variety of customer characteristics and quality variables in research design. It is also suggested that longitudinal research needs to be conducted in order investigate longer term effects of computerized accounting programs. The results of this study are thought to contribute not only to the improvement of university's computerized accounting education, but also to the improvement of user's satisfaction and loyalty using computerized accounting programs.
A Study on the Relationship between Organizational Learning Level and Organizational Commitment and Perceived Organizational Performance
  • - Cheol-Ki Lee (Korea University of Technology and Education)
[Abstract]
Increasing competition, speedy environmental changes, scarce resources and globalization have made organizational learning a critical component for organizational success and a competitive advantage in the long term. As concerns for organizational learning and organizational success increase, researches which examine the relationship between organizational learning and various important organizational variables such as job satisfaction, organizational commitment, short term or long term performance variables (e.g. financial achievement, quality improvement, product service innovation, etc.) attract a lot of attention. The main purpose of this paper is twofold : First, it examines the relationship between the three levels of learning in an organization-individual level learning (ILL), group level learning (GLL), organizational level learning (OLL)-and organizational commitment (OC) and perceived organizational performance (POP) in small and medium enterprises (SMEs) settings. Second, it examines whether there are direct effects of the three levels of learning (ILL, GLL, and OLL) on POP, or mediate effects of OC between the three levels of learning (ILL, GLL, and OLL) and POP. This study refers to the stocks of learning as learning that resides within a level : individual, group, and organization. These stocks can be distinguished from the flow of learning across levels to provide feed-forward and feed-back.
The three levels of learning can be defined as follows(Bontis, Crossan, and Hulland, 2002) : Individual learning captures the processes of intuiting and interpreting. It focuses on the generation of innovative insight, taking actions that are experimental in nature, breaking out of traditional mind-sets to see things in new and different ways, scanning the external environment, developing the competency to complete one's job, having a sense of pride and ownership in one's work, and being aware of the critical issues that affect one's work, all at the level of the individual. Group learning captures the process of integrating. It includes elements such as effectively working in groups, having productive meetings, having the right people to address the issues, and communicating key elements of dialogue including being prepared to share both successes and failures, encouraging diversity, and effective conflict resolution. Organizational level learning involves embedding individual and group learning into the non-human aspects of an organization's systems, structures, procedures and strategy. In this case the stock of learning is referred to as organizational memory.
Furthermore, this embedded learning needs to be aligned so that systems, structures, and procedures support a strategic orientation that position an organizational well within its competitive environment.
I developed three sets of hypotheses through literature review : The first set of three hypotheses (H1-1, 1-2, 1-3) are related with the direct relationship between learning at each of the three levels and organizational commitment. The second set of three hypotheses (H2-1, 2-2, 2-3) are related with the direct relationship between learning at each of the three levels and perceived organizational performance. The third hypothesis (H3) is related with the mediating effect of organizational commitment between learning at each of the three levels and perceived organizational performance.
In order to test the hypotheses, I used measurement instruments of which their reliability and validity were verified through a series of preceding research. The strategic learning assessment map developed by Bontis et al.(2002) and Crossan, Lane, and White(1999) is used for analyzing the relationship between the three levels of learning and perceived organizational performance. The Organizational Commitment Questionnaire (OCQ) developed by Mowday, Steers, and Porter(1979) is used to measure organizational commitment. About 150 SMES in the ChungCheong region voluntarily agreed to take part in this research. Finally data was gathered from a total of 800 respondents and used in statistical analysis to test the hypotheses. I tested for the reliability and validity of all measurements relating to the five constructs in two stages. In the first stage, exploratory factor analysis of all items using the principal component analysis (PCA) was examined. All the items were loaded into the five constructs with relatively high values as expected. In the second stage, results of confirmatory factor analysis using structural equation modeling yielded an adequate model fit for the proposed factor structure (¥ö¨¬ = 926.591, df = 259, p = .000, RMR = .060, RMSEA = .057, NFI = .937, CFI = .954). All items were loaded on their respective constructs and were statistically significant. Furthermore, I computed the composite reliability of each construct. The composite reliability for each construct is above the .70 suggested by Nunnally(1978) which indicates adequate reliability. I checked the convergent and discriminant validity of each construct. The standardized CFA loadings present evidence of convergent validity. The square root of the average variance extracted was greater than all corresponding correlations indicating adequate discriminant validity.
To test the hypotheses relating to the direct effects of organizational learning multiple regression analyses including organizational commitment and perceived organizational performance as dependent variables respectively were analyzed. The results suggested that all the hypotheses relating to the direct effects were verified. All the three levels of learning (ILL, GLL, and OLL) are positively associated with organizational commitment as stated in H1.1-H1.3 (p < .001). Also all the three levels of learning (ILL, GLL, and OLL) are positively associated with perceived organizational performance as stated in H2.1-H2.3 (p < .001). To test the mediating effect of organizational commitment, I followed the procedure suggested by Baron and Kenny (1986). The results show that the effects of the levels of learning on perceived organizational performance is partially mediated by organizational commitment. Therefore the hypothesis that the relationship between the three levels of learning and perceived organizational performance would be mediated by organizational commitment was only partially verified.
The results of this study suggest valuable meaning and various implications at the academic and practical level for SMEs. First, all three levels of learning are positively associated with organizational commitment and perceived organizational performance. This result suggests that as verified in Western studies, organizational learning in SMEs can be the most critical element to transforming an existing traditional organization to a performance oriented organization (Gilley and Maycunich, 2000). To intensify individual, group and organizational level learning would make important contributions to the organization in achieving sustainable competitive advantages as well as demonstrating strong financial performance. Therefore, it is the duty of the CEO and senior management in SMEs to devote effort to continually strengthen the three levels of learning and enhance the level of organizational commitment and effectiveness in the long term. Contrary to expectation, the results of regression analysis suggest that individual level learning has a greater effect than group level learning or organizational level learning. I had expected organizational level learning to make organizational members share the mental model of the organization and align with the organizational strategy, system and operating procedures to enhance the level of organizational commitment and performance. I believe that this discrepancy in expectation is caused by the perception of respondents of the organizational learning level in their own organizations. Respondents can be biased that the individual level learning is more important than the other levels of learning. If so, organizations have to focus on the individual level learning to get the desired results such as organizational effectiveness. On the other hand, it can be caused by the perception of respondents in overestimating the value of individual level learning more than reality assuming the condition that group and organizational level learning is relatively less activated than individual level learning. Organizational commitment has a partial mediating role between the level of organizational learning and perceived organizational performance. This result suggests the importance of the role of organizational commitment to enhance organizational performance. In conclusion, I recommended future research to examine more mediating variables such as the effect of human resource management systems and organizational trust on organizational commitment and performance, and the effects of inter-organizational learning level between SMES or SMEs and large scale organizations. Other further research directions are suggested. Finally several limitations to be aware of in this study are presented. Especially the possibility of measurement errors incurred when measuring invisible phenomena such as organizational learning, limitations in employing only survey questionnaires and self reporting errors are pointed out.
The Relationship between the Share of Sales for Large Firms and the Profitability of Small and Medium Enterprises
  • - Sang Gyoo Shim (Osan University)
[Abstract]
Small and medium enterprises complain to that large firms unreasonably discount the prices of products that they supply in South Korea. On the other hand, large firms continue to assert that they pay reasonable prices for the products received from small and medium enterprises. The lack of collaborative partnerships in the field of putting a price on the products causes many problems such as the destruction of an industrial ecosystem. In addition, fixing reasonable prices is very important because it fairly shares the performance of cooperation among the interested parties. Nevertheless, it is not easy to build a sound partnership in setting prices for the reason of one partner's greed to take more profits.
The polarization of management performance between large firms and small and medium enterprises has become bigger in South Korea after the global financial crisis of 2004. The government of South Korea identified the unfair trade of practices of large firms as the main cause of the polarization and then publicly announced a ¡®profit sharing' in which large firms share a realized earning more than a normal level with small and medium enterprises to promote the fair sharing between large firms and small to medium enterprises. But, it remains stationary and adversely causes the conflict among the members of the public. The primary cause is the absence of objective data on which the large firms reasonably set a prices or not on the products or parts supplied by small and medium enterprises.
This study empirically tests whether large firms reasonably set prices or not on the products or parts supplied by small and medium enterprises in subcontract relationship. I have derived two propositions of the rationality of setting prices on products or parts, based on the background that large firms don't set a reasonable prices on the products or parts supplied by small and medium enterprises if the ratio of sales for large firms to total sales (hereafter LFTS) is a negative relationship with two profitability ratios (gross profit or loss to sales, operating income or loss to sales), because it means that small and medium enterprises don't get paid lower prices on sales to large firms than those for other small and medium business or market on the assumption that a manufacturing costs are constant or small and medium enterprises do not supply large firms with the products or parts at a discounted price on a volume purchase.
Proposition 1, the relationship between LTFS and gross profit or loss to sales is likely negative because large firms with strong negotiation power can set a lower product price to take more profits than normal in a unilateral way. Performance evaluation by division in a large firm is expected to accelerate that situation. Proposition 2, the relationship between LTFS and operating income or loss to sales is likely negative because large firms assert setting lower prices of products proportional to marketing expenses and capital costs etc., that small and medium enterprises reduce as a result of cooperation with the larger business.
The sample consists of 3,346 manufacturing small and medium enterprises in a subcontract relationship with large firms listed in network loans from the 2007 to 2009 fiscal years. The data collected from the database of the Industrial Bank of Korea or Korean enterprise data is analyzed by regression. A Network loan is a financial system whereby banks lend money to small and medium enterprises by taking receivables which they receive from large firms as security.

The regression model is




PROF_GSi,t : the ratio gross profit or loss to sales,
PROF_OSi,t : the ratio of operating income and loss to sales,
NAPUMi,t : the ratio of sales for large firms to sales(LFTS),
RNDi,t : ordinary research and development cost divided by sales,
LEVERi,t : total liabilities divided by total assets,
INVESTi,t : non-current assets divided by total assets,
SIZEi,t : natural log of total assets,
Year : year dummies, Upjong : industrial dummies

The results of this study can be summarized as followed. First, in the results of regression using gross profit or loss to sales as a reasonable price measure, the coefficient on LFTS is significantly negative as expected, which implies that small and medium enterprises get paid lower prices by large firms than those for other small and medium enterprises or the market. But, it doesn't mean that large firms unreasonably set prices on the products or parts, including a minimum margin to survive as small and medium enterprises complain. Second, using operating income or loss to sales the coefficient on LFTS is significant negative. In addition, the coefficient on LFTS is stronger in the case of using gross profit or loss to sales than using operating income or loss to sales as a reasonable price measure. Those results show that large firms don't set a price on the products, including marketing and capital expenses, which small and medium enterprises reduce in the subcontract relationship, as large firms continued to assert.
Research and development costs and investment assets using as control variables have a significant positive relation with a reasonable price measure. These results confirm that small and medium enterprises of South Korea efficiently allocate resources. Adversary, firm size and leverage ratio have a significant negative relation. Especially, the result of firm size being different as expected is estimated to stem from the fact that small and medium enterprises with larger sizes sell the products or parts at a discounted price at wholesale.
The findings of this study have the following implications. The relationship between LFTS and gross profit or loss (operating income or loss) to sales is significantly negative, which implies that large firms do not reasonably set prices of products supplied by small and medium enterprises. This plays an important role in reducing the conflict among members of the public, especially between large firms and small and medium enterprises and promotes the advance of ¡®profit sharing' which the government of South Korea carries forward by providing objective data on the reasonability of setting prices of products in a subcontract relationship.
This study has several limitations. First, I didn't consider the chance that large firms will purchase the products or parts at a discounted price with a large transaction. The results of this study won't correctly reflect the rationality of setting prices on products or parts if small and medium enterprises supply them at a discount. Second, I assume that small and medium enterprises produce just only one type of product or parts and manufacturing costs per unit is constant with other types of products or parts. Third, the sample consists of small and medium enterprises with relatively high credit and a large size. It is inappropriate for the results of this study to be applied to all types of small and medium enterprises.
The Influence of the Characteristics of S-OJT Programs on Organizational Commitment and Turnover Intention
  • - Eun Ji Jeon (Chung Ang University)
  • - Young Sun Song (Chung Ang University)
  • - Hee Su Lee (Chung Ang University)
[Abstract]
The aim of this study is to provide basic data for development of domestic medium and small enterprises [hereinafter, MSE] by offering a research foundation on organizational commitment and turnover of the human resources for MSE academically, and suggesting a practical management plan and work based policy that will make it possible for domestic MSE to effectively retain their human resources by a structured on-the-job training [hereinafter, S-OJT] program. For this purpose, this study analyzed the influence of the S-OJT program characteristics of a MSE, which participated in the pilot project implemented by the Human Resources Development Service of Korea and was supervised by the Ministry of Employment and Labor, on organizational commitment and turnover intention, and also analyzed the influence of organizational commitment on turnover intention.
This study surveyed 151 employees in MSE in the Busan and Gyungnam district among MSE which participated in a S-OJT pilot project as research subjects. As for the research method, this study collected data using structured questionnaires and for the analysis method, this study implemented a factor analysis, correlation analysis, and multi-regression analysis using SPSS ver. 19.0.
Validity and reliability was verified the following;
To verify validity, this study composed a survey based on the ed questions from a preliminary study. From the results of exploratory factor analysis on question variable at preliminary study, the eigen value of education and training environment as a sub-variable of S-OJT was 3.509 and the eigen variance explanatory power thereof was 70.177. Ability of trainer eigen value was 3.506 and eigen variance explanatory power thereof was 58.440. The eigen value of building a systematic system was 3.525 and the eigen variance explanatory power thereof was 70.491. The S-OJT program support eigen value was 5.397 and the eigen variance explanatory power thereof was 67.462. The turnover intention eigen value was 3.104 and the eigen variance explanatory power thereof was 62.089. Five questions were all tied by one factor. Organizational commitment had 24 questions that were grouped by factors of affective commitment, continuance commitment and normative commitment. The eigen value was 1.793~5.972, and the eigen variance explanatory power thereof appeared at 11.205~37.326.
To confirm the validity of subordinate factors extracted from the preliminary study, factor analysis was implemented. Construct validity of the measuring tool for variables used in the preliminary study was evaluated. Factor analysis used PCA (Principal Component Analysis), and for factor rotation method varimax, which is a right angle rotation method, was used.
Determination of the number of factors among variables was done by ing factors with eigen value of not less than 1. Also, for communality, the questions were excluded if the sum of all factor load square values were 0.4 or less. The guideline used was loadage value of this factor not less than 0.5 and variance explanatory power of not less than 0.5 (50%).
To verify reliability, Cronbach¡¯s alpha as a good reliability verification method measuring internal consistency within measured items was used. This method enhances reliability of measurement devices by hunting the factor out of multiple questions that degrades the confidence of the measuring device and excluding the question. Characteristics of S-OJT Programs showed a high reliability with total Cronbach's alpha value at .964. By each subordinate variable, Cronbach¡¯s alpha ranged .840~.901 at a reliable level. Organizational commitment showed significantly high reliability with total Cronbach¡¯s alpha value at .906. By each subordinate variable, Cronbach¡¯s alpha ranged .718~.834 at a significantly reliable level.
Turnover intention total Cronbach¡¯s alpha was .780 at a reliable level. Through this process, this study analyzed the relationship between S-OJT program characteristics, organizational commitment, and turnover intention.
The study results are as follows :
First, this study verified the direct effect that the characteristic factors in S-OJT program had on the leading variables of organizational commitment such as continuance commitment, affective commitment and normative commitment in MSE. The verification result shows that the characteristic factors in S-OJT program increase commitment among organizational participants. This result allows an expectation of higher organizational commitment when a S-OJT Program is implemented. Especially, the characteristic factor of an S-OJT Program has the strongest effects on affective commitment. In other words, the characteristic factor of an S-OJT Program is the meaningfully predicting factor explaining affective commitment among organizational commitment. From this result, S-OJT is indirectly proven as superior to unsystematic OJT in lower defect ratio, higher productivity, and more efficiency in training. The belief that a S-OJT Program may replace existing OJT Program or solve problems thereof may be regarded as confirmed by this result.
Second, the study found that the higher the average of characteristic factor in S-OJT program, the lower the turnover intention of the employees involved in MSE.
Among them, education and training environment as a characteristic factor in an S-OJT Program appeared as giving a meaningfully negative influence to turnover intention of SME employees. This result verifies that domestic SMEs need hardware such as educational and training environment, system construction, S-OJT support etc., ahead of software such as the ability of the trainer, for implementation of S-OJT for the purpose of keeping down turnover intention. Therefore, the implication is that educational and training environment setting for continuous human resource development is important to keep down turnover intention as one measure to enhance SME's survival and competitiveness.
Third, higher affective commitment of employees implementing S-OJT Program showed lower turnover intention. However, continuance commitment and normative commitment did not appear as having any meaningful influence on turnover intention. This result shows that affective commitment of SME employees such as esprit de corps, will to work, receptivity etc. is a directly affecting factor on turnover intention rather than other commitments. To enhance commitment by SME employees, a group solidarity function enhancing program is required to raise group solidarity and unity. Also, to prevent weakening of organizational commitment, a program should be developed to strengthen the proper function of organizational commitment. The program to strengthen proper function of organizational commitment is suggested as an activation of communication between organizational participants and leisure programs. Therefore, government officials and SME staff in charge of SME. S-OJT shall provide various programs to enhance affective commitment when implementing S-OJT.
This study makes some political suggestions in order for S-OJT of MSE sites to revitalize S-OJT and make actual performance happen as follows: First, there is a need for promotional strategies at a national level for utives and employees to have a paradigm shift in S-OJT. Generally, managers have a tendency to be indifferent or even to ignore education and training due to the matter of time and cost. Accordingly, the nation and government are required to seek successful cases and promotional strategies in an effort to implant the fact that the S-OJT system is a suitable one for progress in productivity, organizational commitment, mutual communication between staff members, and smooth relations between labor and management, etc. into the business owners [managers]of MSE.
Second, in order for S-OJT to be continuously sped up, it's necessary to operate the education and training programs such as S-OJT utive course, on-site administrator course, and on-site leader course, etc. so that a manager, on-site supervisor and hands-on staff can understand and practice the S-OJT. The programs for education and training are required to concretely set up the matters such as drawing up of a training plan, trainers in charge, trainees, dates for training and training contents, etc. in order to systematically and effectively practice the S-OJT continuously. Third, in an effort to foster the S-OJT atmosphere, it is advisable to link the outcome of implementation of the S-OJT to the corporate personnel management system such as employment, a personnel reshuffle, salary, promotion and retirement, etc.
However, principally, personnel management should be on the basis of fairness and objectivity, so it requires concrete behavioral standards, a criterion of its implementation, and objective observation and evaluation at the time of implementing a S-OJT.
This study has a limit to the generalization of these research results because this study was set among employees for MSE involved in the manufacturing business in Busan and Gyungnam district among the enterprises participating in a pilot project for ¡®Structured S-OJT', which was conducted in the second half of the 2010, as its research target. In addition, there still remains a sense of frustration for not making a qualitative [qualitative research] assessment through the interviews with an utive, education and training practitioner in charge and employees other than settling for a quantitative assessment [quantitative research] through the analysis and description using literature review, and objective statistical treatment.
Nevertheless, this study can be fairly said to be full of suggestions in that this study first suggested and empirically verified the properties of S-OJT programs suited for MSE from a scientific standpoint; second, this study suggested objective grounds for expansion of investment in an effort for continuous concern and improvement in S-OJT to the government and educational practitioners in MSE from a practical standpoint; third, this study suggested a political suggestion about how to revitalize the S-OJT more and to produce a great outcome for the government and educational practitioners.