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Malaysian Management Journal (MMJ) Vol. 23, December 2019

 
THE INFLUENCE OF BOARD OF DIRECTORS’ CHARACTERISTICS ON THE ENVIRONMENTAL DISCLOSURE AMONG MALAYSIAN COMPANIES
Noriah Che-Adam*
Nor Asma Lode
Hafizah Abd-Mutalib
Tunku Puteri Safinaz School of Accountancy, Universiti Utara Malaysia
*Corresponding author: noriah@uum.edu.my 
 
Abstract | Full Text 
 
The environmental activities conducted by companies have been scrutinised by the public due to the huge environmental problems faced by many people across the world. These activities are corporate social activities included in the corporate social responsibility (CSR) framework by Bursa Malaysia that informs the public regarding the social and environmental activities implemented by Malaysian companies. Data from 353 companies of various types in Malaysia revealed that the information about effective usage of energy and resources is the most disclosed item by Malaysian companies, followed by the waste management and disposal, and reusing and recycling information. The least disclosed item by Malaysian companies is prevention and reparation program. In addition, the regression results showed that the higher proportion of non-executive directors could increase the disclosure of environmental information. The results prove that the non-executive directors have played their role to increase the companies’ legitimacy by encouraging the management of companies to provide more environmental information. Hence, this study provides significant contribution for the supervisory bodies and policy makers in developing guidelines for Malaysian companies concerning environmental issues through environmental disclosures in their annual reports.
 
Keywords: Corporate governance, Environmental disclosure, Corporate Social Responsibility (CSR), Non-executive directors, Malaysia.
 

THE EFFECT OF FIRM SPECIFIC CHARACTERISTICS ON FINANCIAL LEVERAGE OF QUOTED DIVERSIFIED COMPANIES IN NIGERIA
Umar Farouk Abdulkarim*
Department of Accounting and Finance, Faculty of Management and Social Sciences, Federal University Gusau, Zamfara State, Nigeria
*Corresponding author: elfarouk105@gmail.com
 
Lawal Mohammed
Aisha Nuhu Mohammed
Salisu Abubakar
Department of Accounting, ABU Business School, Ahmadu Bello University, Zaria, Nigeria
 
Abstract | Full Text
 
Financial leverage decision by firm continues to attract interest from managers, analysts, researchers, scholars as well as policymakers because of its implications for the firm and its stakeholders. This paper investigates how the complexity of business, firms’ dependence on external finance and growth opportunity affects the financial leverage decision among quoted diversified companies in Nigeria. The study took a census of six diversified firms quoted on the Nigerian capital market over the period of 10 years (2008-2017). Descriptive statistics and correlation matrix were employed with panel data analysis using Ordinary Least Square (OLS) robust model to analyse the data. The results from the study revealed that the complexity of business and growth opportunity is positive and significantly influencing the financial leverage of quoted diversified companies in Nigeria, while dependence on the external finance revealed a significantly negative effect on the financial leverage. It is recommended that the management of quoted diversified companies in Nigeria should target an optimal capital structure in line of businesses that their streams of revenue are not positively correlated. This can be achieved by taking advantage of growth opportunities in the industries where they can further diversify their businesses and enhance profit generation.
 
Keywords: Complexity of business, Dependence on external finance, Growth opportunity, Diversified firms and financial leverage.
 

THE IMPACT OF DIVIDEND ANNOUNCEMENT ON STOCK RETURNS AMONG THE TEN TOP COMPANIES IN PAKISTAN
Zubair Tanveer*
Punjab Economic Research Institute, Lahore, Pakistan
*Corresponding author: zubair.tanveer@peri.punjab.gov.pk
 
Muhammad Jamil
School of Economics, Quaid-i-Azam University, Islamabad
 
Abstract | Full Text
 
The study tested the response of stock prices around the dividend declaration dates in Pakistan stock exchange. It estimated the data of 1110 dividends announced by 91 firms of the highest ten active sectors of Pakistan Stock Exchange. To empirically investigate the relationship between stock returns and dividend announcement, the panel regression was employed by creating dummy variables for 61 days around the dividend declaration dates. Cumulative average abnormal returns and average abnormal returns were also stimated around the events with the help of event study methodology. Outcomes of the empirical analysis revealed strong evidence of market abuse in the term of insider trading and supported the argument of the information content hypothesis and semistrong form of efficient market. Moreover, the study also found a robust impact of the probable ex-dividend date. The study recommended that it is a responsibility of stock exchange regulatory authorities, whistleblowers, registered companies, and the investors collectively to detect and punish this white-collar financial crime.
 
Keywords: Dividend announcement, dividend irrelevance hypothesis, event study methodology, stock returns.
 

IS THE EFFICIENCY OF BANKS DEGENERATING DUE TO THE MOUNTING OF NON-PERFORMING ASSETS? AN EMPIRICAL INVESTIGATION USING DEA
Sudarshan Maity
The Institute of Cost Accountants of India, West Bengal, India
 
Tarak Nath Sahu*
Department of Commerce, Vidyasagar University, West Bengal, India
*Corresponding author: taraknathsahu1982@gmail.com
 
Abstract | Full Text
 
Indian banking system is saddled with bad loans which have resulted in huge losses. Profitability remains a concern due to the rise of NPAs. Investors should not expect high reporting profits from banks due to the ascending provision of the NPAs. Banks are not performing well and they may not be much efficient due to the rise of NPAs daily. Using data envelopment analysis, the present study intends to assess technical efficiency of banks. As the requirement of homogeneity is fulfilled, the input oriented CCR model is applied. The study finds that the number of efficient banks has shortened and the average overall technical efficiency of selected banks moves downward throughout the study period. It also reveals that the inefficiency is mostly due to the upward trend of NPAs. Asset quality plays the most crucial role toward the performance of banking sector. Thus, banks and regulators should control the upward trend of NPAs to enhance the efficiency level.
 
Keywords: Non-performing asset, bank efficiency, scheduled commercial banks, data envelopment analysis.
 

ENTREPRENEURIAL ORIENTATION AND CONSUMER ENGAGEMENT: THE IMPACT OF BUSINESS PERFORMANCE ON SMALL AND MEDIUM ENTREPRISES OF HALAL FOOD
Ade Octavia*
Zulfanetti
Amri Amir
Yayuk Sriayudha
Ary Dean Amri
Faculty of Economic and Business, Universitas Jambi, Indonesia
*Corresponding author: octaviafebunja@gmail.com
 
Abstract | Full Text
 
Muslim consumers nowadays are aware of the ingredients in foods thus making them more selective in choosing foods that they want to purchase and consume. Currently, there are no profiles of small and medium entreprises (SME) which have halal certificates, especially in Jambi Province. The main purpose of this research is to find the performance model of SME halal certified food. The hypotheses of this study are: (1) Entrepreneurial orientation significantly influences the consumer engagement of SME halal food (2) Entrepreneurial orientation significantly influences the entrepreneurial marketing of SME halal food (3) Entrepreneurial marketing significantly influences consumer engagement of halal food. (4) Consumer engagement significantly influences the business performance of halal food. The data for the study were collected from primary and secondary sources. Technical data collection was done through the survey sample, field observation, and literature study. The research design uses the mixed method. Research samples comprised 250 halal food SMEs in Jambi Province, Indonesia. The data analysis technique was done using the structural equation (SEM) model and the SmartPLS 3.0 programme. The result shows a positive influence between the entrepreneurial orientation and the consumer engagement on halal food SME’s business performance in Jambi Province. This study will have both managerial implications for practitioners in Indonesia as well as those in other countries and academic implications for researchers who are interested in increasing SME’s business performance.
 
Keywords: Business performance, consumer engagement, entrepreneurial orientation, SME.
 

AN APPROPRIATE BUSINESS STRATEGY FOR SMALL MEDIUM ENTREPRISES: A CASE STUDY OF PIKSEL INDONESIA
Dwi Rahmawati*
Raden Aswin Rahadi
School of Business Management, Institut Teknologi Bandung, Indonesia
*Corresponding author: dwi_rahmawati@sbm-itb.ac.id
 
Abstract | Full Text
 
The aim of the study is to establish the most appropriate business strategy for Piksel Indonesia which is a creative company focusing on technology and fashion designs, resulting from the batik consumption preferences while planning to use batik products. Data from 338 respondents were randomly collected from several cities in Indonesia. The first section deals with the demographic background of the respondents, and the remaining of the questions deal with the respondents’ impulse towards batik products. The survey results show differences in previous studies. The first difference is the source of information about batik products obtained by the customer. Secondly, the study by the researchers builds on the consumer’s tastes about the batik style and the results are 54.6 percent. Integrated cost leadership/differentiation is Piksel Indonesia’s best business strategy. For Batik Fractal, their batik products brand, low cost was achieved by employing their vendor to produce the product from the minimum overhead. The production flow begins with the order of the customer that the pattern, colour, material and size chart have been determined. JBatik, which is a parametric software to make a new and distinguish batik pattern established by Piksel Indonesia, has no direct competitors at present. As with Batik Fractal, integrated cost management/differentiation strategy is the best strategy.
 
Keywords: Batik industry, business strategy, business level strategy, small medium entreprise. 
 

 
LEADERSHIP STYLE AND EMPLOYEES’ PERFORMANCE IN PAKISTAN: THE MEDIATING ROLE OF ORGANISATIONAL COMMITMENT
Muhammad Abbas
Asif Ali*
Muhammad Ahsan Khalid
University of Management and Technology Lahore, Pakistan
*Corresponding author: rajaasif92@gmail.com
 
Abstract | Full Text
 
The paper investigates the critical role of organisational commitment between leadership style and employees’ performance. Generally, the relationship between leadership style and the organisational performance has been discussed widely but ignoring the employees’ performance. It has been accepted that the organisational commitment leads to higher employee performance but the existing literature has not focused much on this view. A conceptual model has been developed which links the constructs together.The model reveals the missing link of organisational commitment between leadership style and employees’ performance. The sample of 242 was collected from the managers and employees of manufacturing and service organisations. The finding confirmed that organisational commitment acted as a mediator between the leadership style and employees’ performance.
 
Keywords: Leadership styles, employee performance, transformational leadership, organisational commitment.
 

 
AN ANALYSIS OF THE ATTITUDINAL, CONTEXTUAL AND GENDER PERSPECTIVES OF THE ENTREPRENEURIAL INTENTIONS AMONG INDONESIAN MILLENNIALS
Hardiani Hardiani*
Dwi Hastuti
Junaidi Junaidi
Faculty of Economics and Business, Universitas Jambi, Indonesia
*Corresponding author: hardiani@unja.ac.id
 
Abstract | Full Text
 
The present study was designed to analyse the entrepreneurial intentions of the Indonesian millennials in Jambi City which are associated with the attitudinal, contextual and gender perspectives. This research focused on the millennial generation, namely students who will enter the labour market in the future. Data were collected from the surveys on millennials in Jambi City and analysed using the descriptive statistical tools and Structural Equation Modelling (SEM). The results indicate several factors: Firstly, the awareness level of gender equality of the millennials in the area is relatively low. There are still around a third of them who are gender-biased on the aspect of personality traits and gender roles in public sector jobs (nondomestic works). The proportion is even greater on the aspect of gender roles in domestic work. Over two-thirds of the millennials have gender-biased perceptions. Secondly, the entrepreneurial intentions of these students are relatively high. It shows that they have strong potentials to become young entrepreneurs in the future. Thirdly, the attitude and contextual factors have significant influence on the millennial entrepreneurial interests in Jambi City. The gender factor, however, does not show a significant impact as a direct influence as well as a variable moderating the influence of attitude and contextual factors.
 
Keywords: Entrepreneurship, perspectives, entrepreneurial intentions, millennials, Indonesia.