Globalisation and manufacturing strategy in the TCF industry

Purpose – The textiles, clothing, and footwear (TCF) industry has struggled in Australia since the government commenced dismantling tariffs. By sourcing from Asia, middlemen undercut established suppliers, and retail chains set benchmark low prices with their imported “house” labels. The policy-makers predicted that local producers would become more efficient, and export to make up for lost sales, but the media paints a picture of rising imports, retrenchments, and factory closures. The research objective was to discover what strategies the survivors (actually) employ in adapting to the pressures of globalisation.

Design/methodology/approach – More than 30 companies were involved in the study, ranging from small family businesses to subsidiaries of big multinationals. Each case study was based on an interview with a senior executive, normally followed by a plant tour. This methodology suits a fresh topic, as it avoids preconceptions and imposes no bounds.

Findings – Results show that the policy change was based on “pie in the sky” forecasts. Increasingly, TCF production is transferred to cheap offshore locations, generally via subcontracting plus the “badging” of foreign designs. To survive, local factories should focus on quality and customer service, preferably in niche markets (like uniforms), or for specific customer groups, and develop technologically advanced products. A move down the supply chain into retailing can also assist. Large multinational corporations that engage in foreign direct investment dominate the management literature.

Originality/value – This paper presents a different perspective, neglected in international operations management, whereby domestically oriented businesses attempt to defend themselves against the adverse consequences of globalisation.

Removal of directors of public companies takes centre stage in Australia : an exploration of the corporate law and governance issues

Increasing attention is being given to the legal and governance issues relating to the removal of directors in Australian public companies. This has been due mainly to the difficulties experienced by the board of National Australia Bank in attempting to remove one of its fellow directors, and the subsequent development of public companies entering into so-called 'prenuptial agreements' with new directors, requiring that the director 'resign' if the board pass a vote of no-confidence in the director. In this article, the author revisits the area of director removal in Australian public companies for two reasons. The first reason, which covers the majority of the article, is to engage in a detailed analysis of whether the pre-nuptial agreements which some public companies have indicated that they support using to remove directors, are in fact enforceable under Australia's Corporations Act The second reason is to outline a law reform proposal to enable public companies to remove directors without requiring the vote of shareholders at a general meeting. The proposal involves providing Australia' corporate  regulator, the Australian Securities and Investments Commission (ASIC) with the power to grant relief from the statutory removal provisions to public companies, but in a way which balances the competing objectives of commercial efficiency and shareholder participation and, very importantly, encourages good corporate governance practices by companies in relation to the performance assessment  of directors.

It is in the interests of both shareholders and directors to agree on a set of ground rules for the effective supervision of companies that reconciles the rights of the owners to overall control with the much tougher demands on modern directors

Recent amendment to section 197- is it acceptable?

The majority decided in Hanel v O’Neill that directors of trustee companies
could be held personally liable to discharge the debts incurred by a
company pursuant to s 197(1) of the Corporations Act 2001 (Cth). On
18 November 2005, legislation was passed to amend s 197(1); this was to
overturn the decision. This article evaluates other relevant cases and
argues that the recent amendment to s 197 is unsatisfactory as it leaves
potential for abuse by directors of certain trustee companies. The article
suggests further reform to the section and to this end, suggests ways for
s 197 to reconcile with other parts of corporate law, such as insolvent
trading and directors’ duties.

Environmental management system auditing within Australasian companies

Reviews the literature on environmental management auditing, and surveys 132 ISO 14001 certified organizations in Australia and in New Zealand. Identifies the main reason for internal environmental audit, and the most frequent actions that result from the audit process, such as formation of a preventive plan. Looks at review procedures by top management, and the frequency of audit. Reveals the length of time an audit takes and the method of documentation adopted, by different industries. Notes six major findings and recommends sharing the findings of audits with employees and  suppliers so that improvements can be identified and implemented.

Can the use of foreign currency derivatives explain variations in foreign exchange exposure? Evidence from Australian companies

We investigate the role of foreign currency derivatives (FCD) in alleviating foreign exchange rate exposure of Australian firms. While there is some evidence that the use of FCD reduces the level of ex-post short-term exposure, such an effect is absent with regard to the degree of foreign operations. Our results support the view that FCDs are used to hedge existing exchange rate exposures and that Australian firms, generally, are extensively exposed to currency fluctuations in the long run. While monthly exposure appears to be a function of a firm's size and financial hedging, exchange rate exposure of shorter horizons (1 and 3 months) appears to be negatively related to a firm's price earnings ratio (proxying growth opportunities)—thereby supporting the ‘underinvestment’ hypothesis. Further, the exposure of longer horizons (12 and 24 months) is positively related to a firm's liquidity, supporting the view that liquidity is a substitute for hedging.

On the determinants of derivative usage by Australian companies

This paper provides an examination of the determinants of derivative use by Australian corporations. We analysed the characteristics of a sample of 469 firm/year observations drawn from the largest Australian publicly listed companies in 1999 and 2000 to address two issues: the decision to use financial derivatives and the extent to which they are used. Logit analysis suggests that a firm's leverage (distress proxy), size (financial distress and setup costs) and liquidity (financial constraints proxy) are important factors associated with the decision to use derivatives. These findings support the financial distress hypothesis while the evidence on the underinvestment hypothesis is mixed. Additionally, setup costs appear to be important, as larger firms are more likely to use derivatives. Tobit results, on the other hand, show that once the decision to use derivatives has been made, a firm uses more derivatives as its leverage increases and as it pays out more dividends (hedging substitute proxy). The overall results indicate that Australian companies use derivatives with a view to enhancing the firms' value rather than to maximizing managerial wealth. In particular, corporations' derivative policies are mostly concerned with reducing the expected cost of financial distress and managing cash flows. Our inability to identify managerial influences behind the derivative decision suggests a competitive Australian managerial labor market.

AQIS, EXDOC and the 'meaties' : an interpretivist case study of an Australian export documentation system implementation

EXDOC is an on-line export documentation system implemented by the Australian Quarantine Inspection Service [AQIS] and used currently by 90% of meat exporters. At a time when governments world-wide are increasingly committed to introducing electronic service delivery [ESD], this is a timely exemplar of innovative practice. In this paper, we consider the initial implementation of EXDOC in the meat export sector in order to identify the factors that led to the successful adoption of this system.

We consider these factors in the context of diffusion of innovation literature supplemented with Bijker’s social constructivist framework. The theoretical flexibility provided by this combination of approaches enabled us to draw out a number of implications from the data that bear on strategy formulation.

Factors found to have significant bearing on the early adoption of EXDOC included: (1) idiosyncratic factors precipitating the initial implementation (2) the constraints based on accommodating user capabilities (3) the organisational role taken by AQIS (4) diffusion as a self-reinforcing and value-adding effect.

A standard represents both a problem as a requirement of such a system and a problem solving strategy eliciting compliance to the system requirements. Over the period of shaping and stabilizing of the industry standard, AQIS was required to act as facilitator in the coordination of the actors.

The implementation of systems like EXDOC enables users to identify what they want from a system, specifying their preferences and tradeoffs. Such implementations offer opportunities for systems redesign within export business sectors with major strategic implications for the industry.

Pharmaceutical companies' public relations and representation by internet

This paper is part of study of how the adoption of the Internet is affecting the traditional public relations practices of Australian pharmaceutical companies. It suggests that Australian pharmaceutical companies are behind both America and Europe, not only in their adoption of the Internet, but also in their application of Internet technologies for public relations. It also suggests that direct interpersonal communication remains the preferred option for Australian pharmaceutical companies to communicate and build relationships with doctors and pharmacists. The paper is the result of interviews with pharmacists and doctors and one pharmaceutical industry representative. It also involved a survey of pharmaceutical companies’ web sites.

An agent-based hybrid intelligent system for foreign exchange trading

The foreign exchange (FX) market has many features including (1) Each trader’s payoff depends not only on his own behavior, but also on other traders’ decisions; (2) The number of traders is too large to make them all know the other dealers’ methods of decision making; and (3) The FX market has many levels. The FX market is complex because of these features. A diversity of techniques are required to deal with such complex problems. That is hybrid solutions are crucial for the FX market. On the other hand, research into the FX market has revealed that it demonstrates some characteristics of multi-agent systems such as autonomy, interaction, and emergence. To this end, an agent-based hybrid intelligent system was developed for FX trading, which is based on our proposed agent-based hybrid framework. This paper is to discuss the analysis, design, and implementation such a system. Some experimental results and comparisons with related works are also provided. The interest of this paper does not reside in improving the predictive capabilities of different FX models, but rather in how to integrate different models into one system under the unifying agent framework. The success of this system indicates that agent perspectives are very appropriate to model complex problems such as the FX trading.

More than just a transaction: conceptualising industry-based networks for virtual trading communities

This paper addresses the questions of why failure in industry-based networks has been so persistent and whether it is possible to avoid failure and achieve success in internet based markets [iMarketplaces]. A better explanation of implementation failures is important for both improved empirical outcomes and theory building. We construct a theoretical framework based on Bijker’s technology frame (1995) and a contextualization typology developed by Nowotny, Scott and Gibbons (2001). The framework helps us understand how industry-based networks function, why they fail and how we can apply the framework to assist better empirical outcomes. In this paper we apply our framework to Food Connect Australia, a vertically integrated marketplace, representative of the first wave of B2B markets. Sponsors of these iMarketplaces were quick to see and exploit the opportunities online access offered to bring together large numbers of buyers and sellers in new ways. However a lack of understanding of firstly, what represented true value in these networks and secondly, how to achieve buy-in at sustainable levels, meant that many of these first wave sites failed. Application of our framework reveals why there has been a radical shift from the trading role originally envisioned for these sites to the information hub model of the iMarketplace that industry is now being urged to adopt (Berryman and Heck, 2001).

Short-run performance of recent Australian on-market share buy-back announcements

Share buy-backs (or share repurchases) have become increasingly popular among Australian companies during the recent times. One of the aims of share buy-back is to increase the shareholders' wealth by increasing the market price of company shares. While there are several ways of buying backs shares, on-market buy-backs is the most popular method of share repurchase in Australia. Australian listed companies have announced more than two hundred on-market share buy-backs over the past three years. The aim of this paper is to examine the short-run market performance of these recent on-market buy-back announcements.

Short-term effect of on-market buy-back announcements on the share price is an issue, which is theoretically interesting and practically important. Buy-back announcements are believed to convey a signal to the market (i.e., signalling effect). If the market considers this signal positively, the short-run price of the shares would increase. If the signal were considered negatively, the short-run price of shares would decrease. If there is no signalling content or the signal is neutral the price would remain the same. In this study, signalling effect of share buy-back announcements is empirically examined using most recent Australian data. The total population of on-market buy-back announcements that have been lodged with Australian Stock Exchange by Australian listed companies during the period from 1 January 2000 to 10 March 2003 are included in this study. The abnormal market return over the short-run (announcement day and 10 trading days centred on the announcement date) is examined using the All Ordinaries Accumulation Index as the reference portfolio. The daily abnormal returns (AR) and cumulative abnormal returns (CAR) during the event period are computed. The results indicate that the Australian market generally positively reacts to on-market buy-back announcements.