Analysing Islamic Bank Efficiency in Malaysia Using the Standard and Alternative Approaches to Data Envelopment Analysis

The purpose of this paper is to analyse the efficiency of Islamic banks in Malaysia using both the standard approach and the alternative approach to Data Envelopment Analysis (DEA). The standard approach relies on linear averages of outputs and inputs to measure efficiency whereas the alternative approach uses nonlinear averages. Both approaches are tested on 14 Islamic banks in Malaysia for the three-year period, 2008 to 2010. Our overall results for the three years suggest that, the inefficiency level among these banks using the standard approach (SDEA) is much higher than using the alternative approach (ADEA). Implications and future research are also discussed

A Modelling Framework on Factors to Determine Job Performance among Frontline Employees in the Malaysian Hotel Industry

The study attempts to propose a modeling framework on factors affecting individual job performance among frontline employees in the Malaysian hotel industry in the East Coast Region (ECER) of Malaysia. The proposed modeling framework will be based on previous literatures and the underpinning theories related to job performance.  We propose two independent variables (transformational leadership, emotional intelligence) and two mediating variables (organizational commitment and communication satisfaction). In this study, thirteen hypotheses will be developed to determine the relationship between job performance and the determinant factors. Based on this framework, we will carry out a pilot study to test the validity and reliability of the model used. We expect the results to be consistent with previous research. Keywords: Hotel Industry, Job Performance, Transformational Leadership, Emotional Intelligence, Organizational Commitment, Communication Satisfaction

Lecturers’ Perspectives on using KeLiP as an E-Learning Tool

The aim of this paper is to investigate the use of an e-learning tool called KeLiP among lecturers in one of the public university in Malaysia, University Sultan Zainal Abidin (UniSZA). Specifically, this study is intended to achieve three main objectives: to examine the opinions of lecturers towards KeLiP, to investigate willingness to use KeLiP and to examine the challenges using KeLip. A total of 250 lecturers responded to the survey. Interestingly, the experiences on internet and computers as well as exposure on the use of KeLiP among lecturers were vast. The results on opinions revealed that KeLiP is cost effective and easy to understand. The results also indicate that the main challenge faced in using KeLip was related to technical problems and lecturers were willing to use KeLiP if appropriate support is given

Size and Operational Performance of Manufacturing Companies in Pakistan Using Data Envelopment Analysis

The purpose of this paper is to employ Data Envelopment Analysis to evaluate the efficiency of 49 manufacturing companies in Pakistan over the period of 2008 to 2010. Three inputs variables (raw materials, staff expenses and plant and machinery) and two output variables are used (net sale and earnings after tax).This study uses Pearson correlation to indicate positive correlation between input and output variables and employed input approach of DEA model. Data is gathered from OSIRIS database and these companies are categorized under large-sized (assets above USD100 million), medium-sized (assets between USD30 million to USD100 million) and small-sized (asset under USD30 million). The results indicate that small-sized company has the highest relative efficiency compared to large and medium-sized company. In addition, the study finds that 2 large-sized companies, 3 medium-sized companies and 5 small-sized companies are operating under the most productive scale size (MPSS) throughout the three-year period. Keywords: Data Envelopment Analysis (DEA), operational performance manufacturing companies, Pakista

The Determinants of Enterprise Risk Management (ERM) Practices in Malaysian Public Listed Companies

The objective of this study is to examine the determinants of Enterprise Risk Management (ERM) adoption in Malaysian Public Listed Companies (PLCs). The study focuses on ten industries from five hundred and seventy four Public Listed Companies in Malaysia for the period 2007. These ten industries include industrial products, trading/services, consumer products, properties, constructions, plantations, infrastructure projects, technology, hotels and mining. Logit regression approach will be employed, and a dummy variable equals one if companies adopt ERM and zero otherwise, is used as the dependent variable. Seven independent variables used are Size, Leverage, Profitability, International Diversification, Ownership, Chief Risk Officer and Turnover. The main results of this research is that companies with high turnover, hiring Chief Risk Officer and companies that are not diversified internationally are more likely to adopt ERM. Interestingly, Size, Leverage, Profitability, and Ownership are not significant determinants of ERM practices

Impact Of Corruption On Banking Profitability In Asean Countries : An Empirical Analysis

Exploring key determinant variables that influence bank profitability is of interest to bankers and investors as well as regulators, as profitability is regarded as a necessary condition for the stability of the banking system. In this paper we conducted a study to determine the profitability of banking firms covering six countries in Association of Southeast Asian Nations (ASEAN): Indonesia, Malaysia, Singapore, Thailand, the Philippines and Vietnam. Our study found that a higher ratio of personnel expenses to total cost (PERSTC) and equity to total assets (EQTA), increase bank profitabil-ity and are negatively associated with higher regulatory capital (CAR), net loan total asset (NLTA) and cost to income ratio (CIR). Economic growth (EGRW) is positive but not significant. In terms of country effect, only Indonesia is significant. Surprisingly, the corruption index (CRPIX) is positive and its significance to profitability underlines the ability of banking firms to enjoy benefits in a bad governance environment. Keywords: ASEAN, profitability, bank capital, efficiency, economic growth, corruption

Calculating Operational Risk Capital Charges for Indonesian Rural Banks

In January 2001, the Basel Committee on Banking Supervision published a proposal for a new capital framework, the “New Basel Capital Accord (Basel 11)” thus replacing Basel 1. One of the major motivations in the proposal is the introduction of explicit capital charge for operational risks in the business activities of banks. The objective of this paper is to estimate operational risk capital charge using historical data for 77 rural banks in Indonesia for a three-year period, 2006 to 2008. This study uses three approaches: (i) Basic Indicator Approach (BIA), (ii) Standardized Approach (SA) and (iii) Alternative Standardized Approach (ASA). We found that the average capital charge required to cover operational risk is IDR 154 million (1.5% of asset). When the calculation is conducted using the SA method, we found, on average a requirement of IDR 123 million (1.23% of asset). When the calculation is conducted using the Alternative Standardized Approach (ASA), the capital required was IDR 43 million (0.43% of asset). The results provide evidence that banks using more advance model require less capital charge. Keywords: Operational Risk, BIA, SA, Capital Charge, Rural Banks, Indonesi

Technical and Scale Efficiency of Indonesia Rural Banks

The existence of the rural bank in the Indonesian’ financial market is more pronounced recently than ever especially after the Asian crisis in 1997. The ability of rural banks to shield during the crisis and the state programs to develop small and medium enterprises (SMEs), make the role of rural banks more pivotal. Rural banks begin to fill in the gap of financial services in rural areas. Recently, the issue of efficiency has received attention among academic researchers. This study estimates the technical and scale efficiency of rural banks in Indonesia during the period of 2006 and 2007 by using the non-parametric approach – Data Envelopment Analysis (DEA). The results suggest that the degree of technical efficiency is found to be lower than the degree of scale efficiency which indicates that portion of overall inefficiency is due to producing below the production frontier rather than producing at an inefficient scale. In addition, majority of the banks in the sample exhibit suboptimal scale which imply that output should be expanded to reach the optimal scale. Keywords: rural banks, Data Envelopment Analysis, technical efficiency, scale efficiency, Indonesia

PRELIMINARY STUDY OF EMOTIONAL INTELLIGENCE AND COMMUNICATION SATISFACTION ON JOB PERFORMANCE: A STUDY ON MALAYSIAN HOTEL INDUSTRY

Employees job performance of frontline employees in hotel industry are becoming more important as they provide a benchmark for the hotel industry to excel in terms of the quality of services provided. This study aims to examine the effect of emotional intelligence and communication satisfaction on job performance using causal steps approach. A structured questionnaires consisting of job performance (18 items), emotional intelligence (21 items) and communication satisfaction (17 items) were adapted from previous research. 102 respondents from the frontline employees were chosen from selected star rating hotel in Malaysia. The results indicate that emotional intelligence and communication satisfaction are significant and positively correlated with job performance. The partial mediator occurs from the model and these results could be used by the hotel industry to perform transfer of training to increase frontline employee’s performances. Keywords: emotional intelligence, communication satisfaction, job performance, mediation, hotel industr