AJBR Vol1 Number1 Nov2008

8/2/2019 AJBR Vol1 Number1 Nov2008

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American Journal of Business Research (AJBR)

Volume 1, Number 1, 2008

ISSN 1934-6484

Editor: Dr. Alireza Lari, Fayetteville State University

Editorial Board:

Dr. Aaron Clark, North Carolina State University

Dr. Khalid Dubas, Fayetteville State University

Ms. Nasim Lari, North Carolina State University

Dr. Pooneh Lari, North Carolina State University

Dr. Fazlul Miah, Fayetteville State University

Dr. Parviz Partow-Navid, California State University - LA

Dr. Dothang Truong, Fayetteville State University

Copyright by American Institute of Higher Education, LLC Permission to make digital or hard

copies of all or part of this journal for personal or classroom use is granted without fee provided

that copies are not made or distributed for profit or commercial use. All copies must bear a full

citation. Permission from the Editor is required to post to servers, redistribute to lists, or utilize

in a for-profit or commercial use. Permission requests should be sent to Dr. Alireza Lari, Editor-

in-Chief, American Journal of Business Research, AmHighEd, P.O. Box 3553, Cary, NC 27519.


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Editors Message

I am proud to present the first issue of the American Journal of Business Research (AJBR). The

mission of the AJBR is to be the premier journal on interdisciplinary education and practice,

integrating different areas of business, education and health care management. To support this

mission, AJBR emphasizes quality and originality in the papers that it publishes. In addition, AJBRrecognizes the international and cultural influences on business education, research and

practice, and seeks international input in all aspects of the journal, including content, authorship

of papers, readership, paper reviews, and Editorial Board membership. AJBR continuously seeks

original articles of special interest to educators and practitioners in all areas of business,

economics, accounting, healthcare management, statistics, supply chain, project management,

quality management and business education.

Authors should review the Guide for Initial Submission of Manuscripts at the end of this issue

and visit www.amhighed.com for more details. Authors may submit their manuscripts to the

editor at [email protected].

AJBR is listed in Cabells Directories of Publishing Opportunities in Management, Marketing,

Accounting, Economics and Finance.

Professionally yours,

Professor Alireza Lari, Editor

Statement of Peer Review Integrity

All papers published in the American Journal of Educational Studies have undergone rigorous

peer-review. This includes an initial editor screening and double-blind refereeing by two or more

expert referees.


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Table of Contents

AJBR V1N1

Article:

Non-Governmental Organizations in Azerbaijan: Change in a Post-Soviet Society

By Roger A. Ritvo

5

Testing an Integrated Model of e-Learning Adoption Decision

By John Heinrichs, Jeen-Su Lim, Hermina Anghelescuand Janice Utz

21

The Impact of Inward FDI Stock on GDP Growth: An Empirical Evidence From

Central and Eastern Europe

By Lucyna Kornecki and Vedapuri Raghavan

41

Utility Accounting System Change During Increasing Competition: An Application

of Discriminant Analysis

By Joe E. Dowd and Elizabeth J. Tipton Murff

59

An EXCEL-based Template for the Machinists Sequencing Problem

By Qirjako Theodhori, Charles White and Arben Asllani

79

An Empirical Investigation of the HALO Effect of Financial Performance on the

Relationship between Corporate Reputation and CEO Compensation

By Jooh Lee and Ernest H. Hall Jr.

93


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American Journal of Business Research, Vol1, No1, 2008

Ritvo 5

NON-GOVERNMENTAL ORGANIZATIONS IN AZERBAIJAN: CHANGE IN A POST-SOVIET SOCIETY

Roger A. Ritvo

Auburn University Montgomery

Montgomery, AL 36117

ABSTRACT

This article presents the findings of a research project1 on the leadership and governance

patterns of non-governmental organizations (NGOs) in Azerbaijan. A newly formed democracy

based on Western ideals, this former Soviet state is struggling with how to reap the benefits of

the NGO movement while trying to maintain the control that strong central pre-Soviet

governments held. It is an impossible balancing act. Kurt Lewins force field analysis model

frames this analysis of the recent development on hundreds of nonprofit organizations. Using a

competency framework for effective governance and organizational leadership, the results of

this research demonstrate that competencies may be multi-national, but face numerous

challenges in developing countries and societies where turmoil and macro-level structures are

not firmly in place. The future for NGOs in this post-Soviet state is uncertain; recent events and

small successes pave the road for further development, unless the government changes its

policies.

Keywords: NGOs, Azerbaijan, Lewin, Force Field Analysis, Governance

Introduction

Azerbaijans developing NGOs provide an excellent opportunity to apply Kurt Lewins classic

force field analysis model of change to an emerging post-Soviet democracy. This article also

applies the competency-based model of effective governance in order to see if this Unites

States-based approach works in other countries. The worlds hot spots which surround

Azerbaijan include Russia, Georgia and Iran. In addition, the Azerbaijan-Armenian civilian and

military hostilities have lasted almost two decades. About the size of Indiana, this nation broke

1The author wishes to acknowledge Auburn University Montgomerys Research Council for partial

support of this project and the University Institutional Review Board for its approval and guidance.


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from its Soviet bonds in 1991 and joined the United Nations (2007) a year later. Ninety percent

of its approximately 9 million people are Azeri and almost 95% are Muslim. The 19% inflation

rate in 2007 hurt NGO budgets severely (AzerNews, 2007a); the governments official prediction

for 2008 is 12 14%. (AzerNews, 2007b) The capital city of Baku is currently experiencing an

economic boom. A rapidly expanding commercial center, its growth has been fueled literally by

oil from the Caspian Sea and a BP-lead construction of the pipeline to the Mediterranean Sea.

Yet, just because globalization is increasingly visible in dress, transportation, commerce,

television, music, tourism and technological improvements, one must not forget that this is a

secular Muslim country. Calls to prayer echo through the capital city of Baku and the country

celebrates its religious traditions. The family remains the basic social unit. While the country is

no longer as rural and agricultural as it once was, the tradition of families providing mutual aid,

protection and support still remains.

What impact do these customs and mores have on NGOs? First, the family is the core of the

society and tradition dictates that it will care and provide for its members. Since there were

eight decades of Soviet rule, the population learned to fear government more than rely on it for

support care and services beyond formal education and medicine. As if to prod itself, an official

Azerbaijani government report (2006) stressed the minimum contributions made by NGOs in

responding to the "sharp decline in living standards of the population (p. 11). "It is estimated

that 49% of the population is living in poverty [as the government itself defines the term]." (p.13)

NGOs in Azerbaijan face sometimes insurmountable hurdles. When individuals want to start an

NGO to meet what they believe is a need, political power is often required just to get through

the registration process. A report by the US Agency for International Development (2002) found

that the Ministry of Justice, which is responsible for NGO registration, utilizes internal

instructions and regulations that are not available to the public to regulate the registration of

NGOs. This has resulted in a near halt in registration of new organizations over the past two

years.

Yet, those NGOs that have government favor find the experience responsive and efficient. To

demonstrate, the Azerbaijan Marketing Society (2007, p. 3) was established on July 7, 2000 and

registered on August 16, 2000. During an interview a city government official stated that

NGOs are best when they do humanitarian work, but they should not try to make policy


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alongside the government. Another commented that the government still has Soviet thinking

so people do not trust government or NGOs which the government supports. It worries that

younger people will want to change the system; it is afraid of that. It should therefore come as

no surprise that NGOs are precluded from election monitoring or associated politically-focused

activities. They do so at their own peril.

Mistrust creates conflicts and barriers to cooperation and progress. It also leads to stereotyping

and demonizing the other side. A group of government officials was asked to describe what

animals NGOs brought to mind, responses included snakes, rats, chameleons, cats (take a lot

but give little back) and dogs (loud and make a mess for others to clean up).

Azerbaijan's NGOs are falling on hard times after the authorities amended the country's grants

legislation to repeal tax breaks. The changes mean that organizations which receive grants nowhave to pay more than a quarter of their payroll fund and two per cent of every salary into the

Public Social Security Fund. (ReliefWeb, 2003) In addition, NGOs pay over 20% taxes on

revenues from services or investments. Since the national tax codes do not provide deductions

for individual or corporate charitable donations, philanthropy is neither in the national

consciousness nor in public culture.

The government does not trust NGOs and aspires to have greater control over the third

sector.(USAID, 2005) According to data released by the NGO-Forum, the number of NGOs in

Azerbaijan is increasing. The Forum reports some progress in registering NGOs; as of November

2005 the NGO sector consisted of approximately 3000 organizations, 60% of which are

registered. Approximately 20% of these focus on hunger, housing, youth services,

environmental initiatives, human rights, legal education, and economic development.

Globalization has opened up Azerbaijan to the international commercial, cultural, economic,

political and scientific communities. Change is everywhere in Azerbaijan and yet progress is slow.

The push for reforms includes external international pressure because of the oil-rich Caspian Sea

and growing internal domestic needs. Shedding the autocratic leadership that characterized the

Soviet system, Azerbaijan is now emerging democracy, complete with the attendant problems of

disputed elections, high corruption, an unstable banking system, and increased demands on its

oil. Unfortunately, it ranks in the bottom half of all countries in the "ease of doing business" and

159th out of 178 in "dealing with licenses." (World Bank, 2007, p. 106)


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Against this background of a changing society, the next section of this article explores the

personal and professional highlights of Kurt Lewins (1890 1947) life and contributions to

planned change at the individual, team, organizational and societal levels (Lewin, 1948).

Lewins Background and Research

Lewin, Lippitt and Whites research (1939) explored democratic, authoritarian and laissez-faire

leadership styles. They documented that groups and teams that used a democratic style of

leadership were found to be more effective than other groups with different styles; leadership is

both functional and positional. Authority comes from expertise and members ability to move

the team toward its goals rather than just viewing leadership as the person with the gavel or

title.

Conversely, groups with authoritarian leaders had less creativity and less successful decision

making processes. Members with more power controlled those with less power and influence,

even if the bottom members had something of value to contribute. Laissez faire leaders did not

succeed as much as democratic leaders because they omit the teams need for structure, limits,

and goal-directed decisions. The struggles faced by NGOs in Azerbaijan reflect the research

findings that stress the difficulty of moving from authoritarian regimes to democratic, open and

civil societies.

Dictatorships, totalitarianism and autocratic leadership were more than just an academic

interest to Kurt Lewin. The Nazis killed his mother in a concentration camp. Through the

constant prodding of the Emergency Committee In Aid of Displaced Foreign Scholars, Lewin

received the proper immigration papers to come to the United States. In all, some 6,000

displaced scholars and professional persons from Europe appealed to the Committee. Of that

number 335 were granted assistance. (New York Public Library, 2007) Thus, the freedom

fighters and public rallies in Azerbaijan would certainly have resonated with Lewins values since

he knew the horrors and dangers of repression.

Earlier in his life, Kurt Lewin faced discrimination and prejudice. A promising career in education

was capped because promotions were denied to most Jews. So, would it surprise his peers at

Cornell and Iowa that Lewin opposed anti-Semitism? He is quoted as saying If universities were

required by law to admit students on merit and not on the basis of race or religion, the practice

would bring new and more favorable attitudes." (Marrow, p. 204)


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Force Field Analysis

"If you want to truly understand something, try to change it" (Lewin, 1951). People often refer

to the status quo in order to show no movement, demonstrating an unwillingness to change, or

being too lazy to push for needed change. Kurt Lewin developed a model that shows why the

status quo is more than just a moment in time, a laissez faire attitude. It is the result of opposing

forces creating a quasi-stationary equilibrium.

Field theory is grounded in the following principles: first, behavior results from the interaction of

many factors operating at the same time. These forces create a dynamic field where a change

in one factor will have an impact on the others and the system as a whole. Actions and decisions

are grounded more in todays reality than in our interpretation of the past or aspirations for the

future. And, in order to understand a situation, the individuals life space must be understood.

Thus, individual choices, organizational realities, public policies and global issues can be

understood as fields which balance opposing factors. Called a force field analysis, the model

demonstrates that situations look like this:

Figure One: Force Field Analysis

Driving Forces Restraining Forces

Current Situation


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DRIVING FORCES push in the direction of a desired change. Examples of driving forces include

weaker performance than expected, new leadership, newly-approved strategic plans and down-

sizing. RESTRAINING FORCES provide the counter-balance and are those factors that minimize,

deflect, or constrain the driving forces. Such barriers to change would include a lack of financial

resources to implement the new strategic plan, a poor economy, rigid personnel policies, low

morale, or out-dated technology.

Using this model, any existing situation is defined as the equilibrium balancing the driving and

restraining forces. It is particularly useful diagnostic tool with strong action implications. It can

identify and create both allies for change as well as help develop strategies to overcome

resistances. For planned change to occur, (a) reduce the restraining forces, (b) strengthen or add

driving forces, and/or (c) do some of each.

Creating dis-equilibrium is the first step in the planned change process. Called unfreezing, this

process involves preparing the system for change. It can come through policy (Effective January

1st, full time employees with three years service will receive an additional vacation day for each

year of employment.), personnel (Our new VP for Diversity is Mary Smith.), program plans

(Our new cooperative venture with the county hospital will expand services to the elderly.) or

physical plant issues (Our Facilities Committee has purchased land downtown.) Each of these

will create dis-equilibrium and help prepare the system for change. Of course, each of these can

create anxiety, fear of the unknown all key restraining forces.

The goals and aspirations of any planned change effort must support the systems vision and

become the target for the re-freezing point. This is where the system hopes the new equilibrium

will occur: higher production levels, a responsive customer service culture, and new

compensation programs. As Schein (2007) clearly notes, For change to occur, this force field

had to be altered under complex psychological conditions because just adding a driving force

toward change often produced an immediate counterforce to maintain the equilibrium. This

observation led to the important insight that the equilibrium could more easily be moved if one

could remove restraining forces since there were usually already driving forces in the system.

NGOs and Change in Post-Soviet Azerbaijan

One of Lewins concepts was Genidentity, the belief that objects kept their identity over time.

Can this principle be applied to societies? Lewin certainly believed it could. He became an


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advocate for democratic societies, the approval of the State of Israel, community relations and

racial understanding as part of the changing social world. (Marrow, p. 163) As a supporter of

the creation of Israel, it is not a stretch to conclude that Lewin would have supported the

independence of the states of the former Soviet Union. Azerbaijan is an emerging democracy

and thus changing its life forces, social institutions and the relationship between the government

and the people. NGOs are part of this shifting landscape.

Nonprofit Board Competencies

One of the key issues for this study of nonprofit boards is how do research-based board

competencies relate to non-US NGOs? Emslie (2007) studied Englands National Health Service

boards and documented that competencies transcend national boundaries. But, to date, there is

no literature on these board competencies in Azerbaijan or other post-Soviet countries. Based

on research findings, Chait, Holland and Taylor (1996), Holland, Ritvo and Kovner (1997) and

others developed and expanded six competencies of effective nonprofit boards. The primary

duties of any nonprofit board include: (a) recruiting, hiring, retaining, evaluating and terminating

the CEO, (b) developing and monitoring strategic plans, (c) assuring all resources (human,

physical, fiscal, etc) are used appropriately, (d) representing the organization to stakeholders and

external constituencies, (e) evaluating its own performance, and (f) recruiting new members.

Not every board member must be skilled in all six areas, but the board as a whole helps ensure

high performance when these skills are present within the members as a group, team and board.

And, as research documents, having these competencies and maintaining them over time

requires different skills and approaches. Each of the following sections defines the competency

and relates Azerbaijani NGO experiences.

Board Competencies

A board engages its Contextual Competencies when it focuses on the broad issues which do, or

may, have an impact on their system. For example, how does the nonprofits mission and values

fit into the larger social context? In Azerbaijan, contextual competencies also include the need

to understand the organizations place, role and function in the larger society. This includes its

work with, around, through, and in spite of the rules and regulations of different levels of

government. Quotes from interviews with current or former NGO board members illustrate this

competency. A former board member of a small childrens service organization noted that


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NGOs help the country and its people develop. Another quote comes from the CEO/director of

an arts organization in Baku: Azerbaijans economy develops because of these organizations. A

broader social change perspective comes from a member of three boards: NGOs play an

important role in developing democracy and building a civil society. They promote democracy by

giving people an opportunity to express their points of view and to be involved in important

social tasks. These illustrate the macro-level context of their NGOs programs and services.

Strategic competencies keep the boards collective eye on the future. Board decision making

must include current information on public policies, community needs, labor force issues,

monetary and fiscal changes, competitors efforts and demographic trends. With inaccurate or

incomplete information, boards will tend to rely solely on internal impact data: how did these

trends affect the system? By then it is too late to develop coherent, responsive longer term

strategic plans when the thinking is myopic, short term and internally focused. In Azerbaijan,

these strategic competencies were noted as very low: long term planning, conversations about

mission, values, goals and objectives rarely occur. The USAID report on Azerbaijan notes that

most NGOs do not understand the concept or purpose of a mission statement: NGOs work

mainly from project to project and rely heavily on a top-down management structure. Few NGOs

develop or utilize constituencies, strategic plans, mission statements, or maintain permanently

paid staff. A very small number of NGOs are beginning to apply some strategic planning

techniques. Further, only a small portion of the NGO sector, mostly in Baku, is technically well

equipped. In terms of capacity, Baku-based NGOs are generally more advanced than their

counterparts in the regions. Thus, this competency may be of value, but when organizational

survival is a daily issue, long-term perspectives become a luxury.

Analytical competencies are needed for the board to dissect the complexity of issues before it

takes action. For example, employees in most organizations expect pay increases on an annual

basis, whether across the board or merit based. But, the board must also analyze the total cost

to the system, including the less visible impact on benefits, what ones competitors in the

marketplace are doing and the impact on revenue streams. After all, there is a limit to how

much the public is willing to pay to visit the local museum. How does the board understand

what restraining forces exist and what strategies does it develop to respond to them?

NGO leaders face an added problem. The USAID Report also notes that Though legislation

formally provides NGOs with the right to work without restraint, in reality this is not the case.


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The government uses spontaneous tax or labor inspections to place pressure on NGOs to

conform or in some instances to dissolve them. In fear of being visited by these agencies, most

NGOs do not involve themselves in political or social concerns if their involvement may be seen

in an unfavorable light by the government. In other words, self-regulation is frequently practiced

by NGOs in Azerbaijan.

In addition, the existing Law on the Registration of Legal Entities requires that written

notifications be provided to the applicant within ten days of an application being received and

provides for a written explanation for any rejection. However, the Ministry does not issue

receipts when applications are submitted and they very rarely proffer loosely written rejection

letters, thus providing the applicant with no recourse for challenging the Ministrys decision.

Due to the severity of the problem, several international philanthropic organizations and

diplomatic missions are working with Azerbaijani NGOs to solve the registration problem. It is

the old Catch-22:.NGOs must register to exist but can not.

Political competencies do not refer to the public political electoral process. Rather, it is the

process of reconciling differences in values, reaching effective compromises that move toward

goals, and allowing input from those who are affected by decisions. For example, assuming

limited funds, should a small NGO use its resources to educate people on ways to prevent

HIV/AIDS? Should it fund services to some people who are HIV positive or should it sponsor

research to help understand and stop this international pandemic? Each of these options

represents different values. Research is a long term process with many failures; education must

be reinforced and does not always lead to behavior change; services to those who already have

HIV may require long term commitments. Which should an organization choose? How will its

leadership decide?

Effective political skills help create networks of agencies attempting to serve larger populations.

For example, the National Council of Azerbaijan Youth Organizations began in 1996 as a

consortium of 46 NGOs (Society for Humanitarian Research, 2007). But not all such well-

intended efforts succeed. The Association of Lawyers in Azerbaijan may be typical. After a long

struggle to get registered, they were finally denied. Unfortunately, the lack of an office,

equipment and financial resources has hindered the ALA from expanding its scope and

functioning more effectively (International League of Human Rights, 2007).


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Educational competencies focus on the question How does a board learn? In addition to

learning from experience, this competency includes developing new members skills and

information base. It involves gaining a clear understanding of client and staff needs so leaders

can establish functional and attainable priorities.

Most importantly, it involves information. In Azerbaijan, a major impediment to developing

strong educational competencies is the governments general approach to sharing information;

it prefers not to. A Yale Law School Report (2005) shows how defiant the system can be.

Although it is a signatory partner on international efforts to improve childrens rights, health and

social conditions, Azerbaijan has so far not met the requirement of the Convention - to

disseminate it widely within country. This has a serious impact on local NGOs which strive to

help children. In addition, NGOs do not take sufficient efforts to create a positive public image.

They do not promote transparency in their activities and they remain closed from the general

population. As a result, public awareness about NGOs and their activities remains low (USAID

Report, 2005).

How do board members resolve different perspectives based on different information or a lack

of shared values? Interpersonal competencies help board members work together effectively as

a group. How are differences resolved? Is there an open appraisal process for the CEO and the

board members themselves? How does the board cultivate new leadership? Is power shared or

held closely by an elite subgroup? Just having powerful individuals does not assure effective

work at the group level. Board members usually benefit from process time to reflect on how

decisions were made and testing at some later point in time if the best decisions were made.

The interpersonal competencies as defined above clash with many Azeri cultural values that can

stress hierarchy, a sense of place, adherence to religious edicts, family needs and tradition above

public law and policy. These are not intrusions on interpersonal competency; rather they help

define acceptable behavior in that culture.

Conclusions

First, Lewins ideals for community relations and democracy survive his death 6 decades ago.

This article provides ample testimony to the enduring power of his work and how it applies

today. Several questions provided the impetus for this research. First, can the force field

analysis model be used to understand problems at the macro and micro-level and in a post-


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Soviet country? The answer is strongly affirmative. The forces for change and its impediments

are different than at the individual level. But because they form a life space and field, the model

applies as a diagnostic tool. Figure Two below shows both Driving and Restraining Forces.

Figure Two: Force Field Analysis, Summary of Driving and Restraining Forces on NGOs inAzerbaijan

Driving Restraining

Limited government services Minimal public support

New generation expects change Fear of governmental authority

Growing number of volunteers Some NGOs exist on paper only

Recent NGO successes provide

hope

Traditional role of family as care-givers

Understanding benefits of

transparency

Little public support

Committed citizens making a

difference

Little philanthropic history

More government NGO

registration

Little effort to provide public data

Growing needs of the Azerbaijanipopulation

No ethics statements

Emerging democratic system is

under scrutiny

Oppressive tax codes

Armenias occupation of its land Legal restrictions

Limited programs and services

Caspian Sea oil brings

international inspection

Small professional staff

Increasing international interest Few national success models

Globalization brings international

tourism and inspections Little fundraising experience


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A second question for this research regards NGO leadership. Do the board competencies used

by several researchers apply in Azerbaijan? If any conclusions can be drawn from this research,

it is that the six board competencies do not directly apply with as much vigor in an emerging

democracy as they do elsewhere. This is not because many dedicated individuals are not trying;

they are. Rather, the emphasis is less on long-term leadership than on nearer-term program

management and service delivery. Strategic planning is a luxury when one is busy trying to

survive. Since most NGOs are in their embryonic state, many will not survive; most will never

even meet the requirement that they register with the government.

The contextual competency emerges as the most widely used skill, while political and strategic

abilities are the least used. Interviews document that NGO leadership understands the world in

which they operate. The long term perspectives on issues required for strategic competencies to

be used effectively are muted by the needs of daily survival. Political differences are often

minimized because the board members themselves often work as volunteers at the program

level, planning and then offering the NGO services.

Third, what does the future hold? According to Azerbaijan's Embassy in the United States (2007)

"The Government Initiative to Bolster Non-Governmental Organizations (NGOs) was approved

on July 27, 2007 by the President of the Republic of Azerbaijan. This is a part of the

Administrations ongoing effort to strengthen Azerbaijans civil society in particular NGOs and

independent media. This new Executive Order will provide government financial and logistical

support to NGOs, as well as improve the legal environment for their operations. This supports

Lewins thesis about reducing restraining forces.

The four elements of empowerment information, inclusion/participation, accountability and

local organizational capacity can be combined to create more effective, responsive, inclusive,

accountable institutions (Narayan, 2002, p. 31). Former President of the World Bank James D.

Wolfensohn best summarized the challenge for the future; referring to the relationships

between NGOs, governments and the World Bank, he stressed We are really interdependent.

But we must build mutual trust. (Wolfensohn and Kircher, 2005, p. 38) And therein lies the

future of NGOs in Azerbaijan.


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http://www.usaid.gov/locations/europe_eurasia/dem_gov/ngoindex/2005/azerbaijan.pdf

Wolfensohn, J. & Kircher, A. (2005). Voice for the Worlds Poor: Selected Speeches and Writings of

World Bank President James D. Wolfensohn 1995 2005. Washington, DC: International

Bank for Reconstruction and Development, World Bank.

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Yale Law School (2005).AZERBAIJAN NGO ALLIANCE FOR CHILDRENS RIGHTS - Alternative NGO

Report To the United Nations Committee on the Rights of the Child in relation to the

examination of the second and third joint periodic report by the Republic of Azerbaijan on

the implementation of the UN Convention on the Rights of the Child and Concluding

Observations of the UN Committee on the Rights of the Child of 1997, June 2005. Retrieved

November 13, 2007, from

www.law.yale.edu/rcw/rcw/jurisdictions/asw/azerbaijan/Azerbaijan_NGO_Eng.htm


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Heinrichs et al. 21

TESTING AN INTEGRATED MODEL OF E-LEARNING ADOPTION DECISION

John H. Heinrichs

Wayne State University

Detroit, MI 48202

Jeen-Su Lim

The University of Toledo

Hermina Anghelescu and Janice Utz

Wayne State University

Detroit, MI 48202

ABSTRACT

This study investigates the impact of content richness and access ubiquity on e-learning course

satisfaction and intention to take additional e-learning courses. Content richness and access

ubiquity were incorporated into the technology adoption model along with the perceived

usefulness and perceived ease-of-use factors. Path analysis was employed as the statistical tool

to evaluate the hypothesized relationships regarding the influence of the content richness and

access ubiquity factors. The results from this study suggest that content richness was a primary

factor in predicting student satisfaction with e-learning courses and the intention to take

another e-learning course. Additionally, access ubiquity was shown to influence student

satisfaction with e-learning courses.

Keywords: perceived ease-of-use, perceived usefulness, TAM, Lisrel, Path Model, e-learning,

access ubiquity, content richness

Introduction

In this knowledge-based economy characterized by rapid and continual change, knowledge

acquisition and its strategic use is a source of sustained competitive advantage for the

organization. Therefore, it becomes critical for the organization to develop a method to easily

educate and exchange information among organizational members (Heinrichs & Lim, 2005;


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Heinrichs et al. 22

Virkus & Wood, 2004). To accomplish this information exchange in a timely manner, the

utilization of information technology tools and techniques for electronically transferring learning

opportunities and instructional content to knowledge workers and also for developing a

supporting infrastructure is required (Leidner & Jarvenpaa, 1995; Ong, Lai, & Wang, 2004). This

method of providing learning opportunities delivered via leading-edge information technologies

incorporating the internet, intranet, and / or extranet is commonly referred to or defined as e-

learning, online learning, or web-based learning (Schweizer, 2004; Selim, 2007; Trombley & Lee,

2002). E-learning, then, can be viewed as using various information technology tools and

techniques along with media ranging from simple text-based web pages with images and

graphics to complex websites incorporating both real-time video and podcasting as well as web

presence capabilities and includes the use of question and answer polling techniques, electronic

discussion boards, blogs, wikis, and email (Trombley & Lee, 2002).

E-learning tools and techniques have become one of the most significant educational

developments in the information technology industry (Selim, 2007). Yet, as businesses and

educational institutions move instructional delivery to a synchronous e-learning format, there

exists a need to better understand the critical success factors associated with the e-learning

adoption decision (Arbaugh, 2000; Saad, 2007). The identified critical success factors must

facilitate understanding of the various reasons for acceptance of the e-learning technology tools

and associated delivery methods.

Many businesses and educational institutions are embracing the challenge of offering and

delivering e-learning content synchronously, so the question of when e-learning will become an

established and integrated component of the total educational process is raised. Successfully

integrating e-learning into the organizations learning culture does not result from isolating and

focusing solely on e-learning information technology concerns and issues but rather from

infusing e-learning concepts and technology into the overall culture of the organization.

While past studies have applied the technology acceptance model (TAM) in various contexts

such as internet use, e-commerce, software productivity tools, and ERP systems (Lim, Lim, &

Heinrichs, 2005), the applicability of TAM to facilitate understanding of the e-learning adoption

decision has only recently begun to receive attention from researchers. Several researchers

have reported the application of TAM in the context of e-learning and online education

(Arbaugh, 2000; Gao, 2005; Saad, 2007; Roca, Chiu, and Martnez, 2006). Gao (2005) reported


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Heinrichs et al. 23

results that suggest that TAM is an effective tool for predicting student acceptance of web-

based course support systems. Saad (2007) investigated student behavior and attitudes

toward online learning. Roca, Chiu, and Martnez (2006) uncovered that the influence of

perceived quality (which was defined as being composed of information quality, service quality,

and system quality) on student satisfaction was strong.

The determining factors related to e-learning course content and the delivery mode need to be

well integrated into the research model. Arbaugh (2000), Selim (2007), and Sun and Cheng

(2007) initiated this line of research as they evaluate various factors of e-learning such as

flexibility, student-faculty interaction, online course content, and various delivery mode factors.

It is important to continue this stream of research. Therefore, this study contributes to this

stream of research and extends TAM to the online course adoption decision by incorporating e-

learning determinant factors. In addition to testing TAM in the context of online course

adoption, this study assesses the impact of e-learning course factors on the original TAM

factors.

Literature Review

Many educational offerings such as lecture series, academic courses, training seminars, and

certificate programs are being delivered to the students using Internet technologies (Saad,

2007). To investigate the students usage of and the various factors associated with e-learning

technology, many research studies have adopted the Technology Acceptance Model (TAM)

developed by Davis (1986, 1989). This study expands the TAM by incorporating the additional

factors of content richness and access ubiquity into the investigation of e-learning effectiveness.

The proposed integrated e-learning adoption decision model (see Figure 1) posits content

richness and access ubiquity as the antecedents of the two TAM factors, perceived ease-of-use

and perceived usefulness.


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Heinrichs et al. 24

Figure 1

Hypothesized Integrated e-Learning Adoption Decision Model

Two Original TAM Factors

The technology acceptance model (TAM) originally developed by Davis (198x) posits that beliefs

and attitudes are key determinants as to whether a specific technology will be adopted or

rejected. Davis, Bagozzi, and Warshaw (1989) demonstrated that the initial attitudes of the user

regarding the factors of perceived ease-of-use and perceived usefulness will influence attitudes

towards the use of the technology (Lee, 2006). Recent research on e-learning and TAM has

provided support for the links between the TAM factors of perceived usefulness and perceived

ease-of-use and the students intention to use the e-learning system (Gao, 2005; Ong, Lai, &

Wang, 2007; Saad, 2007). In the context of e-learning, the perceived usefulness factor of TAM

is described as the degree to which students believe that using an online course will enhance

their learning performance; whereas the perceived ease-of-use factor is described as the degree

to which students believe that the use of the online course application is relatively effortless.

Therefore, perceived usefulness and perceived ease-of-use influences the students intention to

accept and adopt the e-learning courses either directly or indirectly.

Selim (2002) tested the two original TAM factors of perceived usefulness and perceived ease-of-

use as predictors of student acceptance of online course websites. Selim (2002) reported results

supporting TAM. Ong, Lai, and Wang (2007) and Lee (2006) suggest expanding the overall

++

++

+Satisfaction

AccessUbiquity

ContentRichness

Intention+

PerceivedEase-of-Use

PerceivedUsefulness

++

+


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Heinrichs et al. 25

applicability of TAM by investigating additional factors beyond the two original factors. It is

believed that learning using online tools involves a multitude of additional factors including a

knowledge workers knowledge of and experience with information technology. Saad (2007)

expanded the perceived usefulness factor with three additional dimensions labeled

performance related outcome expectations, personal-related outcome expectations, and

intrinsic motivation and reported that the effects of content quality on perceived usefulness

were significant.

Since online learning systems can be viewed as technology applications, TAM argues that

knowledge workers will only use the system if they perceive that its use will enhance their

learning performance. Such learning performance enhancement may be measured in terms of

learning productivity, the effectiveness of learning, and/or improvements in test scores.

Content Richness

Acceptance and overall effectiveness of e-learning courses requires quality course content

(Drago, Peltier, & Sorensen, 2002; Tricker, Rangecroft, Long, & Gilroy, 2001). In addition to

utilizing either paper-based or electronic textbooks coupled with electronic discussion boards,

effective e-learning courses should integrate multimedia into the course content so as to engage

the learner. The multimedia content in these e-learning courses can be in the form of

animation, video lectures, podcasts, PowerPoint presentations, and/or simulations. However,

to be effective, the multimedia course content should be integrated judiciously into the course

(Schweizer, 2004).

Media richness is a key characteristic that learners consider when working with e-learning

course websites (Palmer, 2002). Richness is defined as the ability of presented information to

change the learners understanding within a specific time interval (Daft & Lengel, 1986). Media

richness, then, refers to the e-learning courses multimedia contents capacity to facilitate

shared meaning and understanding (Daft & Lengel, 1984). It refers to the contents ability to

convey key concepts to the learner. The e-learning course websites can provide the learner with

various levels of richness ranging from simple text-based to complex multimedia presentations.

Media richness theory developed by Daft & Lengel (1986) suggests that the low media richness

achieved by only using text-based content and by eliminating nonverbal cues would make tasks

like discussion of issues difficult. While multimedia content material in e-learning courses has


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Heinrichs et al. 26

been shown to attract a learners attention and interests, the use of multimedia content alone

does not necessarily result in significant positive satisfaction with the e-learning course (Sun &

Cheng, 2007). As such, this range of capacities makes a website difficult to position along the

media richness continuum originally proposed by Daft and Lengel (1986).

Achieving communication efficiency required to convey concepts in a defined time interval can

be affected by the usefulness of the chosen media and the specific characteristics of the

required communication task (Daft & Lengel, 1984, 1986; Trevino, Lengel, & Daft, 1987).

Communication tasks that are designed to clarify ambiguous concepts so that understanding of

the material is achieved in a timely manner are considered high on the media richness

continuum; whereas, communication tasks that require a significant time to develop the

learners understanding are considered low on the media richness continuum. With regard to

the characteristics of these communication tasks, media richness theory proposes that the

purpose of the multimedia content is to reduce uncertainty and equivocality. Uncertainty is

associated with the insufficient level of required information; whereas, equivocality is

associated with determining the meanings of potentially ambiguous situations. Effective e-

learning course design and structure then facilitates the flow of information in a timely fashion

reducing uncertainty. So, the role of multimedia content in uncertainty reduction should be to

convey a sufficient amount of correct information. The e-learning course with high uncertainty

and equivocality in course concepts or material requires the use of material that is rated high on

the media richness continuum.

One of the key characteristics of e-learning courses is the capability to integrate different types

of media thereby creating rich multimedia course content material. However, since multimedia

does not have consistent effects on promoting a learners learning performance, it does not

necessarily produce significant effects on the learners understanding of the course content (Sun

& Cheng, 2007). Furthermore, research has shown that unnecessary multimedia elements in

instructional content may actually distract learners and decrease overall learning performance.

The results of many empirical studies have indicated that content quality is important in

determining learners level of satisfaction (Katerattanakul & Siau, 1999; McKinney et al., 2002).

A major dimension of e-learning course content quality is associated with content richness.

Content richness positively affects a learners level of satisfaction with the e-learning course

(Arbaugh, 2000). The special characteristics of IT tools such as the use of the internet with


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Heinrichs et al. 27

hyperlinks permit learners to share and access numerous resources, in addition to accessing the

fundamental course contents (Lee, 2006). Collectively, these described concepts are identified

as content richness. This discussion then leads to the following hypotheses.

Hypothesis 1: Content richness is positively related to (a) perceived usefulness and (b)perceived ease-of-use.

Hypothesis 2: Content richness is positively related to satisfaction.

Access Ubiquity

Ubiquitous access to online course content is anticipated to expand in the coming years as

information technology continues to advance and as learners demand anytime / anywhere

learning opportunities (Hill & Roldan, 2005). Access ubiquity can be simply defined in terms of

e-learning course, computer system, and information availability (Palmer, 2002) with library

support contained in the information availability component (Selim, 2007). The potential

benefits provided to the learner as a result of access ubiquity include shortened response time

between the learner and the instructor as well as increased real-time interaction opportunities

and among learners in the course.

For ubiquitous access to be a key factor, the efficient and effective use of information

technology in delivering the e-learning-based components is important. Critical to the success

of e-learning is ensuring that the IT infrastructure required to deliver e-learning content is

reliable and capable of delivering the multimedia content. The IT infrastructure then must

include accessibility, bandwidth, course management systems, internet availability, and security

(Selim, 2007). For the learner acceptance of the e-learning systems, the learner must have

confidence in the learning system and must have confidence that the data captured during the

e-learning course will not be compromised. As such, access ubiquity also is defined to include

perceived credibility (Ong, Lai, & Wang, 2007).

With anytime / anywhere access being provided by mobile computing, it becomes possible to

develop course delivery applications that not only are capable of responding to learners anytime

/ anywhere but that also actively seeks out and engages learners. As a primary tool for

collaborative learning environments, in which knowledge is developed and evolved by the

learners, online threaded discussion is a prime candidate for e-learning (Leidner & Jarvenpaa,


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1995). Yet, a number of challenging issues must be addressed in designing such an environment

to ensure learner acceptance (Hill & Roldan, 2005).

There are major concerns revolving the design and development of quality e-learning content

(Trombley & Lee, 2002). First, learners must take initiative and must have the necessarytechnical skills to participate in an e-learning course. Learners having access to an e-learning

system can now interact with instructional materials in various formats anywhere / anytime

(Lee, 2006). Furthermore, given the functionality of the information technology infrastructure,

they can interact with teachers and classmates both individually and on a simultaneous basis.

This discussion leads to the following hypothesis regarding the impact of access ubiquity on the

factors in TAM including satisfaction and intention.

Hypothesis 3: Access ubiquity is positively related to (a) perceived usefulness and (b)perceived ease-of-use.

Hypothesis 4: Access ubiquity is positively related to satisfaction.

Based upon the literature review, a proposed path model describing the factors that influence

the learners satisfaction with and intention to take another e-learning course was developed.

The hypothesized model links the factors of content richness and access ubiquity with the

independent factors from the technology acceptance model of perceived usefulness and

perceived ease-of-use on the dependent factors of satisfaction and intention.

Methodology

This study adopted the path analysis approach to describing the e-learning adoption data and

the relationships among the various factors. There were four dependent factors that were

identified and the study focused on the predictive ordering of the variables in relationship to the

technology acceptance model.

Subjects and Procedures

This research study used a self-administered questionnaire method to obtain responses. A total

of 173 students from two midwest universities participated in the study. In this study 15% of

the respondents were males and 85% of the respondents were females. The respondents were

20% undergraduate students and 80% graduate students. The students were invited to


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Heinrichs et al. 29

participate in the study via an email message from the researchers. Neither monetary nor non-

monetary incentives were provided to the respondents.

When the respondents first accessed the electronic survey, they were presented with web

pages containing an overview of the research study, information regarding informed consent,

and contact information they could use if they had questions regarding the survey. After the

initial explanatory web pages, the respondents were presented with the survey web pages

containing the instructions regarding completing the survey and the survey questions. The

respondents were asked to answer all of the questions carefully.

Construct Measures

The instrument used in this study contained question items measuring six different conceptual

areas. Those six constructs were perceived usefulness, perceived ease-of-use, content richness,access ubiquity, satisfaction, and intention to take another online course (Table 1). Also

included in this survey were various classification questions such as age, gender, and distance

from campus.


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Table 1

Variable and Factor Listing

Variable Questionnaire Item Associated

Factor

Factor

Description

A1 Taking an online course is very easy for me. Factor 1

Perceived

Usefulness

A2 I believe that an online course site helps me in my

understanding of the class material.

Factor 1

A3 Using the online course sites increases my academic

performance.

Factor 1

A4 The online course website is useful for taking classes. Factor 1

B1 I find it easy to use the online course website. Factor 2Perceived

Ease-of-

Use

B2 It was easy for me to become skillful at using online

course sites.

Factor 2

B3 I find the online course website easy to use. Factor 2C1 Technical content delivery quality of online courses. Factor 3

Content

Richness

C2 Descriptive content delivery quality of online courses. Factor 3

C3 Effectiveness of providing explanation in online courses. Factor 3

C4 Quantity of learning in online courses. Factor 3

C5 Quality of learning in online courses. Factor 3

C6 Effectiveness of the video material delivery in online

courses.

Factor 3

D1 Online course availability for effective access. Factor 4 Access

UbiquityD2 Information availability for effective access. Factor 4

E1 Overall, how satisfied are you with this online course? Factor 5

Satisfaction

E2 How satisfied are you with the course content? Factor 5

E3 How satisfied are you with the course delivery? Factor 5

E4 How satisfied are you with the course requirements? Factor 5

E5 How satisfied are you with the access to the online

course?

Factor 5

E6 How satisfied are you with the additional course materials

available in the online courses?

Factor 5

F1 How willing are you to take another online course? Factor 6

Intention

F2 How willing are you to recommend online courses to your

peers?

Factor 6

F3 How likely is it that you will take another online course in

the next 12 months?

Factor 6

The questions used to measure perceived usefulness and perceived ease-of-use were adapted

from Davis (1986) and Igbaria, Iiarvi and Maragahh (1995). Respondents were asked to indicate


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Heinrichs et al. 31

their agreement or disagreement with the presented statements using a 5-point Likert-type

scale which ranged from (1) strongly disagree to (5) strongly agree. The questions used to

measure content richness and access ubiquity were adapted from Drago, Peltier, & Sorensen,

(2002), Lee (2006), Palmer (2002) Roca, Chiu, and Martnez (2006). Respondents were asked to

indicate their willingness to recommend or take another online course using a 5-point scale

ranging from (1) not at all willing to (5) extremely willing. Respondents were asked to indicate

their satisfaction with various aspects of online course with various statements that used a 5-

point Likert-type scale ranging from (1) very dissatisfied to (5) very satisfied.

Analysis and Results

Path analytic model analysis via LISREL was used to analyze the data (Joreskog & Sorbom, 1989,

1993). The hypothesized enhanced learning adoption model was developed and presented inFigure 1. In evaluating the hypothesized model, overall fit indices of the model as well as the

individual factor coefficients were determined and evaluated.

Factor Analysis, Mean Values, and Reliabilities

Responses to the multi-item measures were factor analyzed using a principal component factor

analysis. The factors in each of the dependent and independent variables were varimax rotated.

Results of the factor analysis are shown in Table 2. As a part of the measurement item

purification process, any items cross loading to other factors or factor loadings of .50 or lower

are deleted from the final scale items. A brief description of the final scale items resulting from

the item purification procedure follows.

The independent variables were composed of four factors labeled as perceived usefulness which

is represented by three items; perceived ease-of-use which is represented by three items;

content richness which is represented by six items; and access ubiquity which is represented by

two items. The dependent variables were composed of two factors labeled satisfaction which is

represented by six items and intention which is represented by three items.

For the various variables under investigation, the scale means were calculated. Table 2 presents

factor analysis results, the scale mean values and reliability for each of the constructs. The scale

mean values for the independent variables ranged from 3.80 to 4.32 based upon a 5 point scale

with 1 defined as Strongly Disagree and 5 defined as Strongly Agree. The scale mean values for


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Heinrichs et al. 32

the dependent variables ranged from 4.08 to 4.12. The Cronbach alphas for the independent

variables were calculated as 0.729 for access ubiquity, 0.826 for perceived usefulness, 0.847 for

perceived ease-of use, and 0.914 for content richness. The Cronbach alphas for the dependent

variables were calculated as 0.757 for intention and 0.896 for satisfaction. The Cronbach alphas

for the six scales are greater than the recommended guideline of 0.70 (Nunnally, 1978).

Therefore, it can be concluded that all six scales show adequate reliability.

Table 2

Factor Analysis Results

Independent Variables Dependent Variables

Variable

Factor 1:

Perceived

Usefulness

Factor 2:

Perceived

Ease-of-Use

Factor 3:

Content

Richness

Factor 4:

Access

Ubiquity

Factor 5:

Satisfaction

Factor 6:

IntentionA1 .758 .127 .119 .250 -- --

A3 .719 .228 .311 .036 -- --

A2 .712 .149 .393 .093 -- --

B3 .112 .908 .146 .026 -- --

B1 .181 .878 .124 .054 -- --

B2 .386 .640 .190 .272 -- --

C2 .356 .124 .811 .013 -- --

C1 .026 .211 .805 .136 -- --

C6 .000 .177 .777 .265 -- --

C4 .445 .085 .768 .128 -- --

C3 .451 .119 .734 .135 -- --

C5 .488 .000 .694 .094 -- --

D1 .100 .067 .112 .916 -- --

D2 .287 .169 .431 .682 -- --

E1 -- -- -- -- .833 .087

E3 -- -- -- -- .822 .221

E6 -- -- -- -- .780 .446

E2 -- -- -- -- .769 .192

E4 -- -- -- -- .763 .175

E5 -- -- -- -- .698 .223

F3 -- -- -- -- .006 .844

F1 -- -- -- -- .379 .817

F2 -- -- -- -- .556 .662Mean 3.85 4.32 3.80 4.12 4.12 4.08

Std. Dev. 0.81 0.69 0.82 0.84 0.74 1.08

Measure of

Sampling

Adequacy

0.880 0.881

Reliability 0.826 0.847 0.914 0.729 0.896 0.757


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Heinrichs et al. 33

Path Analysis

The literature on content richness and access ubiquity views these factors as being merely

correlated. As such, these two factors were linked but no directional connectors were

associated with them. These factors were then added as antecedents to the TAM structure.

Each factor should be normally distributed and this model meets the assumption required of

path analysis (Stevens, 1996; Bentler & Chou, 1987). Kline (1998) recommends at least four

tests be performed to evaluate the goodness of fit of the proposed model. These multiple fit

criteria are used to rule out measuring biases inherent in the various measures (Hair, Anderson,

Tatham & Black, 1995). The fit criteria test groups include chi-square; goodness of fit index

(GFI), normed fit index (NFI), or comparative fit index (CFI); non-normed fit index (NNFI); and

standardized root mean square residual (SRMR).

The overall fit of the path model was judged to be satisfactory based on the overall goodness-of-

fit criteria. The ratio of chi-square to degrees of freedom was 1.68 (Chi-square of 6.72 with 4 df,

p = .15). The Goodness of Fit Index (GFI) was 0.99; the Normed Fit Index (NFI) was 0.99; and

Bentlers Comparative Fit Index (CFI) was 0.99. Each of these indices were above the desired

minimum acceptable 0.90 level used to accept the model (Bagozzi & Yi ,1988; Hair, Anderson,

Tatham & Black, 1995). CFI are less sensitive to sample size than the other tests so it was used

when the sample size is less than 200 (Fan, Thompson, & Wang, 1999). The Non-Normed Fit

Index (NNFI) was 0.98 and the Standardized Root Mean Square Residual (SRMR) was 0.029. By

convention, there is a good model fit if the SRMR is less than or equal to 0.06 (Hu & Bentler,

1999).

Figure 2 presents the path analysis results. Based on the goodness of fit indices and the

recommended values, the fit of this proposed model was determined to be acceptable (Bagozzi

& Yi, 1988; Hair, Anderson, Tatham & Black, 1995). The significance of individual path

coefficient was also evaluated. Figure 2 shows that five of the hypothesized paths are significant

at the 0.05 level. One of the hypothesized paths was not significant at the 0.05 level. The sign

for all path coefficients are in the expected direction. The paths from content richness to

perceived usefulness (0.48), to perceived ease-of-use (0.32), and to satisfaction (0.50) are

positive and significant at the 0.05 level providing supports for the hypotheses 1 and 2. The

path coefficients from access ubiquity to perceived ease-of-use and satisfaction were 0.17 and


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Heinrichs et al. 34

0.21 respectively. These two coefficients are significant at the 0.05 level and in the expected

direction supporting hypotheses 3b and 4. However, the path coefficient from access ubiquity

to perceived usefulness was not significant at the 0.05 level. Therefore, hypothesis 3a is not

supported by the result.

Figure 2

Integrated e-Learning Adoption Decision Model

Direct and Indirect Effects

Path coefficients can be used to highlight direct and indirect effects in the discovered model.

The direct and indirect effects are reflected in the arrows shown in the model. The total causal

Fit Statistics & Measures for the Recommended

Enhanced Learning Adoption Path Model Value Value

Chi-square/degrees of freedom 1.68 3.0

Bentler Bonets Normed Fit Index (NFI) 0.99 .90

Goodness of Fit Index (GFI) 0.99 .90

Comparative Fit Index (CFI) 0.99 .90

Tucker-Lewis Non-Normed Fit Index (NFFI) 0.98 .90

Root Mean Square Residual (RMR) 0.029 .10

* p < .05 -- ns = not significant

0.50*

F3: Content

Richness

F4: AccessUbiquity

F6: Intention

0.17*

0.04 ns

0.50*

0.21*

0.28*

F2: PerceivedEase-of-use

F5: Satisfaction

F1: Perceived

Usefulness0.42*

0.17 *

0.48*

0.32*

0.09 ns


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Heinrichs et al. 35

effect of the factor i on the factor j is the sum of the values of all the paths from i to j.

Considering satisfaction as the final dependent factor i in the presented model and

considering content richness as the independent factor j, the indirect effects are calculated

by multiplying the path coefficients for each path from content richness to satisfaction.

The total indirect effect of content richness on satisfaction is calculated to be 0.10 and the direct

effect is calculated to be 0.50. Thus, thetotal effect of the independent factor content richness

on the dependent factor satisfaction is the sum of the direct effect and indirect effect (0.50 +

0.10) for a value of 0.60. The total effect of the independent factors access ubiquity, perceived

usefulness and perceived ease-of-use on the dependent factor satisfaction are similarly

calculated for the values of 0.24, 0.17, and 0.09.

Similarly, the total effect of the factors content richness, access ubiquity, perceived usefulness,perceived ease-of-use, and satisfaction on intention to take another course can be calculated.

The total effect of these factors is 0.25, 0.10, 0.07, 0.04, and 0.42 respectively.

Table 3: Direct and Indirect Effects

F3: Content

Richness

F4: Access

Ubiquity

F2: Perceived

Usefulness

F1: Perceived

Ease-of-Use

F5:

Satisfaction

TE DE IE TE DE IE TE DE IE TE DE IE TE DE IE

F2:

Usefulness .57 .48 .09 .14 .09 .05 -- -- -- .28 .28 -- -- -- --

F1:

Ease-of-Use.32 .32 -- .17 .17 -- -- -- -- -- -- -- -- -- --

F5:

Satisfaction.60 .50 .10 .24 .21 .03 .17 .17 -- .09 .04 .05 -- -- --

F6:

Intention.25 -- .25 .10 -- .10 .07 -- .07 .04 -- .04 .42 .42 --

TE = Total Effect DE = Direct Effect IE = Indirect Effect

Discussion

Path analysis is a powerful statistical tool to aid in the analysis of effect decomposition for

models with two or more dependent variables. Reviewing the total effects for the factors shows

that the content richness factor is the most significant factor in determining satisfaction.

Satisfaction is a significant factor in determining intention to take another online course.


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Heinrichs et al. 36

Content richness involves the various methods used to deliver the content, explain the material,

and the quality and quantity of information presented to the student. To help ensure

satisfaction with the course, the instructor should devote resources to ensure the multimedia

component of the course is of high quality. As with any other course, the instructor should be

focused on providing high quality delivery of the content and should ensure that the online tool

facilitates the technical and descriptive content delivery.

This study expands the TAM for use in understanding online course delivery. With 65% of

schools identified online education as key to their long term strategy, it is crucial for programs

to develop and maintain a high degree of satisfaction (Allen & Seaman, 2005). This study

provides support for the importance of content richness and access ubiquity to the delivery of

online courses.

In interpreting the findings of this study, care should be given. Due to the nature of the sample,

the generalizability of the results is somewhat limited. The findings may not be applicable to

other disciplines or other categories of students taking online classes. Future research should

test the proposed model with expanded sample base. As users are more concerned about how

an e-learning system provides information and how it will make them more productive in their

tasks In an e-learning context (Roca, Chiu, & Martnez, 2006), future research should measure

the increased productivity in e-learning tasks in addition to the satisfaction with and intention to

take additional e-learning courses.


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Kornecki and Raghavan 41

THE IMPACT OF INWARD FDI STOCK ON GDP GROWTH: AN EMPIRICAL EVIDENCE FROM

CENTRAL AND EASTERN EUROPE

Lucyna Kornecki and Vedapuri Raghavan

Embry-Riddle Aeronautical University (ERAU)

Daytona Beach, FL 32114

ABSTRACT

This article analyses the post communist era in the Central and Eastern Europe (CEE) and tests

the hypothesis that the foreign direct investment (FDI) contributes to the economic growth of

the CEE countries. The first part of this research reflects macroeconomic changes in the post

communist CEE and examines GDP per capita and economic growth rate. The second section

discusses an inward FDI flow and inward FDI stock as a percentage of GDP and the third section

estimates the impact of the FDI stock on economic growth in the CEE using regression growth

model based on the production function. This study found a positive association between FDI

and economic growth in the CEE and proved tremendous impact of FDI stock on GDP growth.

Keywords: Foreign Direct Investment, Economic Growth, Central and Eastern Europe

Introduction

The FDI inflows in the CEE economies has been a vital factor in the first stage of the privatization

process during the transition period. As the privatization and restructuring process has come to

an end, the main reasons to pursue FDI are to boost productivity, encourage employment,

stimulate innovation and technology transfer, and to enhance sustained economic growth

(Mueller & Goic, 2002). The CEE countries have identified the positive effects of FDI on the

transformation process of the economy. FDI has increased in the past twenty years, to become

the most common type of capital flow needed for the reconstruction and stabilization of the CEE

economies.

This paper reviewed the experiences of CEE countries integrating into the global market and

analyzed the basic economic growth trends, and the link between FDI stock and economic

growth. The following countries were examined in this article: Poland, the Czech Republic,


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Kornecki and Raghavan 42

Hungary, Slovakia and Slovenia. All these countries became members of the European Union

(EU) on May 1, 2004 (www.eurunion.org). The EU membership has shaped major aspects of

economic policies and legislation in CEE (Sohinger, 2005).

The largest economy among the analyzed countries is Poland, with the population of 38.601million. This compares to 10.244 million in the Czech Republic, 10.063 million in Hungary, 5.392

million in Slovakia, and 2.004 million in Slovenia (UNCTAD Handbook of Statistics).

The research utilized 1960-2006 archival data from the following sources: United Nations

Conference on Trade and Development (UNCAD), United Nations Economic Commission for

Europe (UNECE), World Investment Reports, as well as other selected databases.

Literature Review

The CEE countries increased their participation in the world economy since the fall of

communism; particularly over the last few years. They accepted the challenge of trade openness

and attracted significant foreign direct investment. Going global has helped them to grow faster

(Cernat & Vranceanu, 2002).

The available literature does not provide empirically tested evidence on the effects of FDI on

economic growth in the CEE. This study examines the link between FDI stock and economic

growth in CEE countries and focuses on the impact of inward FDI on economic growth using a

production function model. The results showed that inward FDI stock contributes tremendously

to economic growth in the CEE and constitutes an essential factor stimulating sustained

economic growth.

FDI has been acknowledged as most crucial fac

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