Rubric is attached. The 5 Scholarly Articles have been selected and are attached.The topi has to incorporate the following:InnovationTechnologyAirline Industry
mgmt_610_annotated_bibliography_assignment__4____rubric_and_criterion.pdf
article_4__the_relationship_between_stock_market_returns_and_technical_efficiency_inno.pdf
article_3__the_business_of_pleasing_travelers__airlines__hotels_and_agencies_are_going.pdf
article_2_market_strategy_development_and_innovation_to_strengthen_consumer_based_equity__the_case_of_brazilian_airlines.pdf
article_1_the_strategic_impact_of_airline_group_diversification__the_cases_of_emirates_and_lufthansa.pdf
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Assignment #4
Assignment 4 – Annotated Bibliography
MGMT 610 – Organizational Theory first paper assignment
Faculty Name
Alissa Harrison
Faculty Email:
[email protected]
Assignment Title:
Course/Section
Management Research – Annotated Bibliography
610 9042 Organizational Theory (2192)
Assignment Description: Annotated Bibliography
Assignments 4 and 5 are inter-related. This assignment lays the ground work for Assignment 5
and uses the same question and case study. Specifically, you are to select a topic in
management that is related to organizational theory and a case study of an actual organization
in which that topic is an issue.
Example: Much has been published in scholarly publication on the topic of organizational life
cycle or the topic of innovation and change as an issue in the American Red Cross. In selecting
this organization, both the topic and case MUST appear in the annotated bibliography
(Assignment 4) and research paper (Assignment 5).
Instructions:
1. Select a topic that is of interest to you from the following list of organizational theory issues.
Sample topics: boundary spanning, bounded rationality, bureaucracy, change, control and
coordination, design for the international environment, diversity management, ethical
behavior, external environment, innovation, interorganizational relationships, learning
organization & knowledge management, manufacturing technology, open systems,
organization decline, organization design and/or redesign, organization life cycle,
organizational culture, political features and use of power, reciprocal interdependence, social
responsibility, sustainability, teams, virtual organization.
Note: There may be another topic related to this course that interests you. If so, in order to
ensure its appropriateness, please get your professor’s input before proceeding.)
2. Locate a case study in the UMUC virtual library that involves that management issue and
provide the full reference to its source. Though not required and to make the assignment
personally meaningful, your selected case study could be in an industry where you work or
plan to work in your career. For example, it might be health care, government,
manufacturing, hospitality, technology, global trade, child care, national security,
transportation, energy, etc. – whatever is your interest. Select an organization in that industry
for your case study. By choosing an industry that is relevant to you, your insider knowledge
will give you a framework for understanding how an organization in that industry operates,
you will learn more, and that in turn will make the assignment easier for you to complete.
Assignment #4
A published case study is any article that discusses in sufficient detail the issue facing an
actual single organization and how that organization addressed that issue. Some of the
databases in the virtual library allow you to search using “case study” as a criteria. However,
just because the term case study exists in the title of the article may not mean that the article
actually gives you enough information to work with; you have to make that judgment. Two of
the best sources of articles – ABI/Inform Global and Business Source Complete – don’t allow
for searches using case study as a criteria, so you may have to do some digging. Generally
speaking, a published case study should be between 10 and 15 pages in length to give you
enough information to work with
3. Develop a research question to explore the issue as it relates to the topic within the
selected case study organization.
4. Find and read at least five articles in scholarly journals in the UMUC library databases that
discuss the issue you selected and that may assist in answering your research question.
5. Develop an annotated reference list that includes at least five scholarly articles (in addition
to the case itself). See additional information under the Course Content tab for readings
about both annotated reference lists and case studies: Creating Annotated Bibliographies
and Analyzing a Case.
6. Your information on the management issue must come from articles in scholarly journals
found in the virtual library, not from the Internet, Wikipedia, newspapers, popular magazines
(e.g. Time, Newsweek, Business Week), etc. Academic journals are those usually published
by universities or by professional societies (e.g., The Journal of the AMA). Just having the
word “journal” in the title of the publication doesn’t actually make it a journal; after all, The
Wall Street Journal is still just a daily newspaper.
Additional supplemental information about the organization you’re studying (not the issue)
can come from non-academic sources. While there are many organizations that have been
the subject of published case studies and even some (such as, again, the American Red
Cross) that are more frequent subjects of case studies, you may need to go outside the
journals in the UMUC library for additional information specific to that topic as it relates to
that organization. That is acceptable provided the primary source of your information about
the case is the study in a scholarly journal in the UMUC library. For additional information on
how the organization is addressing the management issue, you can use non-library
resources (e.g., the organization’s web site, articles in newspapers and general interest
magazines, etc.).
Note: Your research should include information from relevant scholarly sources, professional
journals, and peer-referred publications. Wikipedia or any sources from the Internet (e.g.,
from a Google search) may not be used. These are “open sources”, meaning that anyone –
knowledgeable or not – can contribute. They are not subjected to the same form of editorial
scrutiny that peer-reviewed articles are scrutinized for quality.
In a similar vein, be appropriately skeptical of what organizations post to their web sites; they
can sometimes be nothing more than puffery. A statement such as “we have increased
sales by 4.5% annually for each of the past five years” is one thing, especially if it is backed
up by statistics; a statement of “we are the leading provider of quality widgets” is another
matter, especially if there are no statistics provided to support that. In your references list,
for any supplemental sources on the organization (case) from the Internet, include the site
where you found it and the date you retrieved it.
Assignment #4
Assignment/Project Criterion:
The following criteria will be used for Assignment 4.
I. Sources
1. Cites the number of sources outlined in the assignment
2. Sources are appropriate for the assignment (quality and reliability of sources)
3. Sources support selected topic, research question and case study
II. Annotations
1. Annotations contain clear, concise, summaries of source materials
2. Main points are summarized and provides evidence with examples
3. Annotations demonstrate full competencies (e.g., summary, relevance, credibility, discovery)
4. Objective Evaluation
a. Annotations contain evidence of objective evaluative criteria (e.g., research questions),
applied to the management area selected
b. Evaluations address the criteria from a management theory point of view
5. Subjective Evaluation
a. Annotations contain a clear assessment of the usefulness of the source reflecting its
context within management area selected
b. Evaluations address the criteria from the student’s reaction or point of view (e.g.,
agreement or disagreement, helpful, does the source offer a unique contribution to other
sources?)
III. Writing Quality/Mechanics
1. Grammar Mechanics
a. All annotations are thoughtful, complete, and well written
b. Evaluative material in the instructions are included in annotations
c. Effective communication, grammar and spelling meet assignment requirements
2. APA i
a. Substantial (at least five) and relevant reference sources
b. APA style is used throughout the paper (e.g., cover/title page, headings, spacing,
citations, reference page)
c. Paper is a WORD document and formatted with a cover page that includes a running
head
d. Citations are properly formatted in the document
Assignment #4
Grading Criteria (The professor will include this as the first part of your graded assignment)
Abbreviated rubric for Assignment #4 (Annotated Bibliography)
1
2
3
4
5
6
7
8
9
Criteria
Submitted late: minus 5% per day
Meets expectations for content and purpose of the assignment.
Essay organization includes, title page, introduction, annotated bibliographies (at least 5),
summary/conclusion and references.
Introduction discussion of the case study is relevant to topic and supports the thesis
Develops a clearly articulated and original research question that explores the topic for
the cases study of the organization and is consistent with expectations of content and
purpose. Topic sentence and paper for each annotated bibliography is FOCUSED.
Organizes annotated reference discussion are presented in clear and sequential paragraphs
that logically reinforce the research question. A paragraph is a collection of related
sentences dealing with a single topic. Uses level 1, 2, and 3 headings as appropriate.
Incorporates sufficient use of appropriate research, supporting evidence, and relevant
sources (scholarly/peer referred). Sources are: (1) appropriate number as outlined for the
assignment; (2) credible, varied, and demonstrate sufficient quality/reliability; and (2)
support topic, research question and case study.
Critically evaluates annotations within the boundaries established by topic/research
question. Annotations are clear, concise summaries of source materials. Discussion are
summarized and provide evidence of claims. Annotations demonstrate full competencies.
Ideas demonstrate careful, nuanced, and original understanding of the topic, and analysis
includes objective and subjective evaluation of the source materials.
Conforms to APA and/or additional guidelines from the instructor. (Refer to the paper in
Conferences, “Writing Papers That Are Easy to Grade.” Your paper should look like this
paper.)
Displays sound grammar, spelling, punctuation and appropriate conventions that meets
graduate level expectations. See *NOTE below.
Total
Score
10
10
10
10
10
20
10
20
Where (depending on whether weight is 10 or 20:
1-6 or 1-13
= Not proficient
7 or 14-15
= Competent
8 -9 or 16-19
= Above average
10 or 20
= Exemplary
Checklist (make sure you do the following):
• A paper consists of: title page; introduction, annotated bibliography, summary/conclusion, and references.
• A strong first sentence which sets the stage for the paper.
• Clear and concise research question.
• Use Times New Roman 12 pt. font and 1” margins.
• Double space (this includes the References).
• Justify the text on the left margin with a ragged right edge
• Indent all paragraphs ½”.
• Follows format for an analytical/critical Annotated Bibliography APA
• Put a header at top left margin of page and page # in top RH corner (see above).
• Use the proper APA format for citations and the Reference List (double space with hanging indent). Note: Sources not cited in
the annotated bibliography should not be in the References. Wikipedia is not an acceptable Reference.
• Avoid the use of the 1st person (“I” and “we” and “our”).
• Proofread. Edit. (See next two bullets)
• Fewer words are better than more. Shorter sentences are better than long.
• Do not plagiarize. Give proper credit where credit is due.
*NOTE: Papers that have a consistent misuse of grammar, punctuation (commas, semicolons, quotation marks) and
spelling will not receive a grade higher than the low 80’s regardless of the quality of the content.
Journal of Productivity Analysis, 9,35-51 (1998)
© 1998 Kluwer Academic Publishers, Boston. Manufactured in The Netherlands.
The Relationship Between Stock Market Returns
and Technical Efficiency Innovations: Evidence
from the US Airline Indinstry
ILA M. SEMENICK ALAM
[email protected]
Tulane University, Dept. of Economics, 206 Tilton Hall, New Orleans, LA 70118
ROBIN C. SICKLES
[email protected]
Rice University, Dept. of Economics, 6100 South Main Street-MS 22, Houston, TX 77005-1892
Abstract
This paper analyzes the association between two firm performance measures: stock market returns and relative technical efficiency. Using linear programming techniques (Data
Envelopment Analysis and Free Disposal Hull), technical efficiencies are calculated for a
panel of eleven US airlines observed quarterly from 1970-1990. A relationship, between
efficiency news in a quarter and stock market performance in the following two months, is
found. A risky arbitrage portfolio strategy, of buying firms with the most positive efficiency
news and short-selling those with the worst news during this time frame, results in zero beta
risk yet yields annual returns of 17% and 18% for the two methodologies.
Keywords: panel data, productivity, technical efficiency, stock maricet performance, airline industry
1.
Introduction
This paper examines the link between two measures of a firm’s performance: its relative
technical efficiency scores and its stock market price. The first measure evaluates a firm’s
competence at combining inputs and outputs in its production process while the second
measure reflects a firm’s fundamental value. The primary objective of corporate management is generally assumed to be the maximization of stockholder wealth which requires the
maximization of the price of a firm’s common stock. Since the price of a firm’s common
stock is determined by the discounted present value of the cash fiows of the firm, the management must pick projects with cash flows yielding the highest net present value. Thus a
firm’s profitability and stock price are intrinsically linked to a certain degree. Profitability,
in turn, is partly determined by how efficiently a firm utilizes available technology in the
chosen projects. Banker and Johnston (1995), using the airline industry as their empirical
application, show that high correlations exist between profitability and productivity. Similarly, Kumbhakar (1993), in his study of Utah dairy farmers, finds that smaller farms tend to
be less technically efficient as well as less profitable. Since the production process relates to
profitability which in turn relates to firm valuation, a change in a firm’s technical efficiency
is relevant news and, under the semi-strong form of the efficient market hypothesis,’ should
36
ALAM AND SICKLES
be reflected in the market price of the firm. If news about a firm’s efficiency is viewed as
publicly available, then no opportunity should exist for industry analysts to extract abnormal
returns since this information would already be captured by the stock price.
Despite the wealth of technical efficiency applications and the understanding that efficiency and profits are associated, we are unaware of any study which has empirically
explored the above qualitative theoretical statement.^ By establishing that the stock market values technical efficiency news, this analysis goes beyond just proving a connection
between the two performance measures. It is also a market based test of the technical
efficiency methodologies themselves and of the concept underlying technical efficiency
measurement: namely that these techniques capture some firms’ inability to operate at
their most efficient level. This assumption is at odds with conventional economic theory
which states that producers operate on their production possibility frontier. Caves and Barton (1990) and Caves (1992) discuss how this “touchstone of professional belief (1990,
p. 1) is contradicted by the multitude of studies documenting technical inefficiency. The
traditional view is somewhat constrained and these authors highlight, in detail, the reasonable hypotheses which have developed in the literature to explain how actual performance
sometimes deviates from the theoretical objective. By documenting a correlation between
changes in firm valuation and technical efficiency innovations, our paper contributes to this
view of the production process. It also verifies that these measurement techniques are able
to capture these efficiency shortfalls accurately.
The strength of these techniques is a critical issue because of their widespread usage. The
multitude of applications covers both public and private institutions. Lovell (1993) provides
an overview, as well as an extensive reference section, illustrating the diverse utilization of
these techniques. These methodologies have broad appeal because both government policy
makers and industry managers are concerned about measuring productive performance.
More importantly, once efficiency differentials are identified, these studies are useful policy making tools since they indicate areas of deficiency and directions for change. Recent
developments in the literature have overcome the methodological shortcomings which limited early applications to cross-sectional studies.’ The ability to exploit panel data sets, in
order to capture the dynamic nature of a firm’s performance relative to its competitors, has
stimulated even greater interest in the topic.
For our application we turn to the US airlines over the period 1970 to 1990. We find this
industry empirically appealing for two main reasons. First, domestic carriers have a history
of substantial upheavals including economic deregulation, mergers, failures, bankruptcy
filings, re-organizations and operating loss reports which continue into the present. There
exist concerns that the future is bleak in terms of the number of carriers which will survive and prosper. Relatively recent events have prompted rumblings that deregulation
failed—witness reports in both the televised and the printed news media and the commission established in 1993 by Resident Clinton to evaluate the impact deregulation has had
on the airline “crisis”. Identification of a positive relationship between increased firm valuation and efficient resource utilization would be timely, interesting and relevant for future
policy direction. A second empirically attractive aspect of this sector, a consequence of the
strict filing requirements imposed by the federal government, is the wealth of accessible
and accurate data available at a level not found in most other industries. The panel data
STOCK MARKET RETURNS AND TECHNICAL EFFICIENCY INNOVATIONS
37
set we have compiled includes several additional years of data not found in other airline
studies and provides the largest, cleanest data available on the production of US scheduled
air transport
The remainder of this paper is organized as follows. Section 2 describes the production
data set used for calculating the technical efficiency scores; the compilation of the stock
returns data set is discussed in Appendix A. Section 3 presents the technical efficiency
methodologies and explains how the relationship to stock market performance is identified
and quantified. Section 4 contains the empirical findings and an analysis of the results.
Section 5 concludes.
2.
Production Data
The airline production data set used to calculate the technical efficiency scores consists of
quarterly observations for the twenty-one year period from 1970to 1990. This is a total of 84
time periods (events). The eleven carriers all have a Department of Transportation (DOT)
Group m classification^ and include: American, Continental, Delta, Eastern, Frontier,
Ozark, Piedmont, Trans World, United, USAir and Western. Not all airlines span the
entire time period: Frontier ends the second quarter of 1986 because it merged into People
Express in 1985 which merged into Continental in 1987; Ozark ends the third quarter of
1986 since it merged into TWA in 1986; Piedmont and Western end the fourth quarter of
1986 because t …
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