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MANAGEMENT/MARKETING

MANAGEMENT EDUCATION

QUANTITATIVE METHODS

Summer 1998 Vol. 5, No. 2

Bruce F. Mills Managerial Self-Esteem: An Exploratory Analysis of the Construct and its Position in a Proposed Nomological

Net

Arie Reichel A Comparative Analysis Of Business Ethics: Gavriel Meirovich Attitudes of Russian and Israeli Executives

William R. Sherrard Levels of Cognitive Activity Required to Answer POM David R. Hampton Test Bank Multiple Choice Questions

David S. Ang Trade Secrets Protection: The Missing Ingredient

Michael C. Budden in POM Education

Zvi Drezner On The Repeated Partition Scheduling Problem

JOURNAL OF BUSINESS AND MANAGEMENT

Published jointly by the Western Decision Sciences Institute and the School of Management, California State University, Dominguez Hills

JOURNAL OF BUSINESS AND MANAGEMENTTHE OFFICIAL PUBLICATION OF THE WESTERN

DECISION SCIENCES INSTITUTE (WDSI)The Decision Sciences Institute is a professional society dedicated to the development and application of quantitative and behavioral methods to administrative problems. Most functional areas of business are represented among the membership. Through its journals, national and regional meetings, and other activities, the Decision Sciences Institute serves as a vehicle to advance and disseminate the theory, application, pedagogy, and curriculum development of the decision sciences.

Western Regional Officers 1997-98President, Richard L. Jenson, Utah State UniversityPresident-Elect, Karen L. Fowler, University of Northern ColoradoVice President for Programs Marc Massoud, Claremont McKenna CollegeAssociate Program Chair, James Taylor, Claremont McKenna CollegeVice President for Programs-Elect, Paul Mallete , Colorado State UniversityVice President for Member Services, Eldon Y. Li, California Polytechnic State University, San Luis Obispo Secretary/Treasurer, Christine A. McClatchey, University of Northern Colorado

JOURNAL OF BUSINESS

AND MANAGEMENT

Vol. 5, No. 2 Summer 1998

EDITORS

EDITORIAL ASSISTANT

Franklin StrierBurhan F. YavasDeborah Gritney

Editorial Offices:

JOURNAL OF BUSINESS AND MANAGEMENTSchool of ManagementCalifornia State University, Dominguez Hills1000 East Victoria StreetCarson, California 90747Phone: (310) 243-3472, (310) 243-3501Fax: (310) 516-3664, (310) 217-6964

Published jointly by Western Decision Sciences Institute (WDSI) and the School of Management, California State University, Dominguez Hills. The purpose of the JOURNAL OF BUSINESS AND MANAGEMENT is to provide a forum for the dissemination of contributions in all fields of business, management and related public policy of relevance to academics and practitioners. Original research, reports and opinion pieces are welcome. The style should emphasize exposition and clarity, and avoid technical detail and jargon.

The views expressed in articles published are those of the authors and not necessarily those of the Editors, Executive Board, Editorial Board, WDSI or California State University, Dominguez Hills. All submissions will be reviewed initially by the editors and, if judged appropriate, will be sent to knowledgeable referees for review. The authors assume responsibility for the accuracy of facts published in the articles.

Copyright 1998 WDSI and by the School of Management, California State University, Dominguez Hills. Subscriptions are $16/year. Manuscripts should be double-spaced and submitted in triplicate. Manuscripts and comments should be directed to the editors.


Executive Board Richard L. Jensen, President, WDSI Karen L. Fowler, President -Elect, WDSI

Donald L. Bates, Dean, School of Management, CSUDH Franklin Strier, Editor Burhan F. Yavas, Editor

Editorial Board Dr. Joseph R. Biggs California Polytechnic State University, San Luis Obispo Dr. Henry Brehm University of Maryland Dr. Terry E. Dielman Texas Christian University Dr. Moshe Hagigi Boston University Dr. Ronald H. Heck University of Hawaii at Manoa Dr. Richard C. Hoffman Salisbury State University, Maryland Dr. Marc T. Jones University of Otago, Dunedin, New Zealand Dr. Erdener Kaynak Pennsylvania State University Dr. Thomas Kelly State University of New York, Binghamton Dr. George R. LaNoue University of Maryland Dr. George A. Marcoulides California State University, Fullerton Dr. John Preble University of Delaware Dr. Arie Reichel Ben-Gurion University of the Negev, Israel Dr. Elizabeth L. Rose University of Auckland, New Zealand Dr. Anne S. Tsui The Hong Kong University of Science and Technology, Hong Kong Dr. Michael Useem University of Pennsylvania

Reviewer Acknowledgments

The editors of the Journal of Business and Management wish to express their appreciation to the following individuals who have reviewed manuscripts submitted for consideration in this issue of the Journal of Business and Management.

Dr. Shirley AndersonDr. Vincent P. ApilatoDr. Harvey ArbelaezDr. Felix AyadiDr. Nizamettin AydinDr. Gabriel BassiryDr. Hamdi BiliciDr. Henry BrehmDr. Edward ChuDr. Sadik CokelezDr. Cheryl A. CruzDr. Gregory A. DanekeDr. Roger DearDr. Prakash DheeriyaDr. Mohamed El-BadawiDr. Stephen P. FerrisDr. Dorothy FisherDr. Chic FojtikDr. Karen FowlerDr. Don GarnerDr. Robert H. GirlingDr. Cristina GibsonDr. Kamal HaddedDr. Ronald H. HeckDr. Veronica HortonDr. Swinder JandaDr. Stephen JennerDr. Ching-Chung KuoDr. Craig C. LundberghDr. Yadong LuoDr. Richard MalamudDr. George A. MarcoulidesDr. James Martinoff

Dr. Oswald MascarenhasDr. Reza MahzinDr. Isaac D. MontoyaDr. Kurt MotamediDr. Edith NeumannDr. Ali M. ParhizgariDr. Cynthia PavettDr. Fahimeh RezayatDr. Elizabeth RoseDr. Golnaz SadriDr. San-Hoon KimDr. Mark G. SimkinDr. Elizabeth TrybusDr. Barbara WithersDr. Kosaku Yoshida


TABLE OF CONTENTS

From the Editor's Desk............................................................................7

Managerial Self-Esteem: An Exploratory Analysis of the Construct and its Position in a Proposed Nomological Net Bruce F. Mills. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 A Comparative Analysis Of Business Ethics: Attitudes of Russian and Israeli Executives

Arie Reichel and Gavriel Meirovich . . . . . . . . . . . . . . . . . . . . . . . . . . .24

Levels of Cognitive Activity Required to Answer POM Test Bank Multiple Choice Questions

William R. Sherrard and David R. Hampton ...............................38

Trade Secrets Protection: The Missing Ingredient in POM EducationDavid S. Ang, Michael C. Budden. . . . . . . . . . . . . . . . . . . . . . . . . . . .

50

On The Repeated Partition Scheduling ProblemZvi Drezner. . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .

64

FROM THE EDITOR'S DESK

BRUCE MILLS revisits the managerial self-esteem construct, and proposes a needed measure of the constructs validity in relation to selected organizational variables.

As part of a larger empirical study measuring business ethics across nations, economies and societies, ARIE REICHEL & GAVRIEL MEIROVICH compare the ethical attitudes of Russian and Israeli business managers. The study confirmed the hypothesis of an inverse relationship between the economic orientation of a country and the ethical orientation of its people.

The theft and misappropriation of trade secrets is an important management concern. DAVID S. ANG and MICHAEL C. BUDDEN review the development of trade secrets legislation and argue that the current coverage of trade secrets and their protection needs to be expanded. Their recommendation is based on a content analysis of twenty-nine textbooks used in Production and Operations Management which reveals that such coverage is lacking.

WILLIAM R. SHERRARD AND DAVID R. HAMPTON analyzed sixty test bank questions form the three of the most popular Production and Operations Management textbooks. The questions were classified as thinking or memory types. Their results, which do not differ from similar studies in other disciplines, indicate a preponderance of memory over thinking type questions.

ZVI DRESNER offers a useful scheduling application for such varied activities as tournaments, production, personnel assignment, advertising and experimental design.

FRANKLIN STRIER BURHAN F. YAVAS

8

MANAGERIAL SELF-ESTEEM:

AN EXPLORATORY ANALYSIS OF THE CONSTRUCT

AND ITS POSITION IN A PROPOSED

NOMOLOGICAL NET

Bruce F. Mills*

This paper defines the construct of managerial self-esteem, describes an instrument for its measurement and presents an exploratory analysis of construct validity by examining its relationship with selected intrinsic, coping and organizational variables. Included is a set of hypotheses which guided the validation of the measure. Homogeneity of scale items, test-retest and internal consistency reliability, convergent and discriminate validity are discussed.

he study of the relationship between overall or general feelings of self-esteem (i.e. global self-esteem) and various organizational constructs has long been of interest to a number of researchers of organizational behavior. Most recently it was found that global self-esteem interacts with feedback from specific tasks and accounts for significant amounts of variance in job performance, general job satisfaction, absenteeism and job search intentions. (Renn and Prien, 1995) Also, Tang and Baldwin (1991) found subjects with high self-esteem maintain a higher sense of certainty and confidence on tasks despite receiving negative feedback. Wiener, Muczyk and Martin (1992) found evidence that self-esteem acts as a moderating factor in the relationship between work satisfaction and the individuals sense of well-being. Pierce, Gardner, Cummings and Dunham (1989) developed a construct delineating an individuals perception of organizational self-esteem, which they found has a significant relationship to a number of organization based measures.

* Bruce F. Mills is affiliated with the University of Wisconsin, Madison, WIManuscript received January 1996, revised August 1996 and December 1997

T

Also, self-esteem moderated the impact between a sense of job insecurity and overall psychological well-being (Orpen, 1994) , while Jex, Cvetanovski and Allen (1994) found self esteem moderate the relationship between unemployment and psychological strain, with women showing a stronger impact than men. Self-esteem also was related to perceived performance, but not to actual performance in a study by Martin and Murberger (1994), after Morse (1976), in an earlier study, had reported low self-esteem was negatively related to actual performance. In another earlier study, Quinn and Shepard (1974) reported that low self-esteem was negatively related to a sense of competence, as well as a propensity to leave among blue collar workers.

In studies concerning other factors related to the psychology of persons in organizations, Wylie (1961) found that persons with low self-esteem exhibit the dispositional characteristics of anxiety, depression and neurotic behaviors. Schalon (1968) and Shrauger and Rosenberg (1970) reported that low self-esteem individuals exhibit poorer social skills and Wells and Marwell (1976) reported that persons with low self-esteem lack initiative and assertiveness.

A RATIONALE FOR A ROLE-BASED CONSTRUCT OF MANAGERIAL SELF-ESTEEM

In view of this growing body of evidence concerning the impact of global self-esteem on other aspects of organization behavior, it appears likely that a related construct might also explain a significant amount of variance in the performance of persons in the role of manager. The purpose of this study is to apply the findings of this earlier work concerning the role of global self-esteem in organizational behavior to the complex role of the manager by describing a multifaceted managerial self-esteem construct, developing a proposed measure for this construct, and examining the measure in relation to selected role related organizational variables in an attempt to assess its construct validity. The development of such a construct could have significant implications concerning both the selection and development of managers, as well as in enhancing the understanding of the impact of other organizational variables on managerial performance.

Much of the past research concerning the impact of self-esteem utilized measures of global self-esteem. Simpson and Boyle (1975), among others, argue that an important attribute of self-esteem is that it is a multi-faceted construct with varying levels of specificity depending on the circumstance under which the individual is acting (Shavelson, Hubner & Stanton, 1976; Song & Hattie, 1985; Tharenou, 1979). This research argues that studies should utilize measures of global self-esteem in examining the overall feelings of self-efficacy of an individual, utilize role-based self-esteem measures in examining a persons evaluation of his or her appropriateness for specific roles, and finally utilize task-specific self-esteem measures in examining a person s evaluation of his or her competence concerning a specific task.

Bruckner (1989) argues that task-specific self-esteem and self-efficacy are synonymous as they both reflect an essentially bi-polar confidence level of the individual. (i.e. (a) Can I, or can I not perform the task? And (b) How confident am I that I can perform the task?) Global self-esteem is an overall construct that reflects the individuals self-evaluation or sense of worthiness across the wide variety of overall life situations. Thus, role-based constructs such as managerial self-esteem should be based on an individuals evaluation of his or her sense of both their self-worth and self-efficacy across the specific set of tasks or situations required to perform in the role of a manager. It is important to note the subjective nature of both global self-esteem and the role based construct of managerial self-esteem. These constructs are not simply the sum of an individuals task specific perceptions, but include the overall sense of worthiness an individual has concerning his or her ability to carry out the requirements of the role. Despite the strength of the individuals task-based sense of efficacy, it may be mitigated significantly by any of a number of broader based psychological factors which underlie both an individuals sense of global self-esteem and managerial self-esteem.

THE MANAGERIAL SELF-ESTEEM CONSTRUCT

Coopersmith, (1967: 4,5) defines global self-esteem as the evaluation an individual makes with regard to the self; it expresses an attitude of approval or disapproval and indicates the extent to which the individual believes the self to be capable, significant, successful and worthy. Self-esteem is also often defined as the degree to which individuals believe they are able to satisfy their needs. (Korman, 1976; Wells & Marwell, 1976) Additionally, Wood & Bandura (1989: 408) state that self-efficacy refers to beliefs in ones capabilities to mobilize the motivation, cognitive resources and courses of action needed to meet most situational demands.

Thus, managerial self-esteem is defined as the evaluation individuals make concerning their worthiness to fulfill the requirements for success across the various components of the managerial role. People with high managerial self-esteem feel they have the knowledge and ability to be effective in the various situations which may arise in their role as a manager and have the skills to perform various managerial tasks. Conversely, persons with low managerial self-esteem feel uncertain about their ability to perform the various requirements of the managerial role.

PROPERTIES OF MANAGERIAL SELF-ESTEEM

Carmine and Zeller (1979: 23) state that construct validity is concerned with the extent to which a particular measure relates to other measures consistent with the theoretically derived hypotheses concerning the concepts (or constructs) that are being measures. Thus, for the purpose of the this study, managerial self-esteem is examined in three distinct areas: intrinsic properties, role-based antecedents and consequences of managerial self-esteem.

Intrinsic Properties of Managerial Self-esteem

The intrinsic properties of managerial self-esteem examined in this study are shaped by the self consistency motivation theory enunciated by Korman (1976), which proposes that a basic tenet of self-esteem is that individuals first develop perceptual determinations about their environment and then follow these determinations with subsequent attitudes and behaviors which are consistent with these determinations. Thus, this study of managerial self-esteem includes an examination of the relationship between managerial self-esteem and the individuals intrinsic propensities of global self-esteem, sense of autonomy and internal work motivation. It is hypothesized below that high managerial self-esteem will concurrently reflect a positive relationship with these selected intrinsic characteristics.

Hypothesis 1: There will be a positive relationship between managerial self-esteem and global self-esteem.Hypothesis 2: There will be a positive relationship between managerial self-esteem and internal work motivation.Several studies found positive relationships between (a) autonomy and global self-

esteem (Kohn & Schuler, 1973) and (b) autonomy and work role esteem (French & Kaplan, 1972; Gardell, 1971; Margolis, Kroes & Quinn, 1972). Thus:

Hypothesis 3: There will be a positive relationship between managerial self-esteem and autonomy.

Coping Styles and Managerial Self-esteem

An individuals sense of self-esteem also effects the methods with which he or she copes with dissonance in his or her environment. Bandura (1977: 34) notes that . . . expectations of personal mastery affect both initiation and persistence of coping behavior. The strength of peoples convictions in their own effectiveness is likely to affect whether they will even cope with given situations. Thus various styles of coping behaviors should be related to an individuals sense of managerial self-esteem. People with low global self-esteem tend to avoid situations requiring behaviors which they believe exceed their coping skills. Thus, people with low managerial self-esteem would tend to utilize negative coping behaviors. (i.e., They will avoid stressful situations, rather than attending to them directly.) The following hypotheses were arrived at from this conceptual framework:

Hypothesis 4: There will be a positive relationship between managerial self-esteem and positive thinking coping.Hypothesis 5: There will be a positive relationship between managerial self-esteem and interpersonal coping.Hypothesis 6: There will be a negative relationship between managerial self-esteem and avoidance/resignation coping.Hypothesis 7: There will be a positive relationship between managerial self-esteem and direct action coping.

The Role Based Antecedents of Managerial Self-esteem

A valid role based construct such as managerial self-esteem should reflect significant relationships with other role based constructs. Previous research examining work role esteem found it associated with role ambiguity (Beehr, 1971; Margolis et al., 1974). Thus it is hypothesized that managerial self-esteem will show a negative relationship with role conflict and role ambiguity and a positive relationship with task significance and task identity.

Hypothesis 8: There will be a negative relationship between managerial self-esteem and role conflict.Hypothesis 9: There will be a negative relationship between managerial self-esteem and role ambiguity.Hypothesis 10: There will be a positive relationship between managerial self-esteem and task significance.Hypothesis 11: There will be a positive relationship between managerial self-esteem and task identity.

Identity as a manager is a measure of the degree to which an individual identifies with the managerial role (Joseph, Aldag & Keenan, 1989). It assesses the extent to which the individual perceives he or she is a member of management, is perceived by others as a manager, possesses various symbols of managerial affiliation, has been granted authority commensurate with the management role, and is treated and accepted by others as a manager.

Persons with a strong sense of role or managerial identity should have a commensurately strong sense of managerial self-esteem. As such:

Hypothesis 12: There will be a positive relationship between managerial self-esteem and identity as a manager.

Outcomes of Managerial Self-esteem

As discussed earlier, individuals tend to behave in a manner consistent with their self-image and which maintains their sense of cognitive consistency. (Korman, 1976). Consequently low managerial self-esteem should be consistent with low job satisfaction and a lack of commitment to the organization which places them in this dissonant framework. Thus:

Hypothesis 13: There will be a positive relationship between managerial self-esteem and organizational commitment.Hypothesis 14: There will be a positive relationship between managerial self-esteem and job satisfaction.

Also, when persons have high managerial self-esteem, their cognitive dissonance in that role will be reduced and their level of somatic tension will decrease. As such:

Hypothesis 15: There will be a negative relationship between managerial self-esteem and somatic tension.

The work of Quinn and Shepard (1974) and Gardell (1973) found that individuals with low global self-esteem have a high propensity to leave their positions. The corollary to this attribute would indicate that persons with high role-based self-esteem would tend to have longer tenure in their positions. (i.e., To have more years of experience as a manager.)

Hypothesis 16: Managerial self-esteem will be related to years of tenure as a manager.

In response to the concerns of Simpson and Boyle (1975) and Tharenou (1979) regarding the validity of current self-esteem measures, their discriminate accuracy, and the utilization of appropriate levels of construct measurement, two hypotheses are offered below to establish the ability of the managerial self-esteem measure to discriminate with a global self-esteem measure relative to the individual's identity as a manager and task identity. Of the many constructs examined in this study, identity as a manager most closely fits the role identification characteristics measured by the managerial self-esteem instrument. If the arguments concerning the enhanced validity of role and task specific measures voiced by Simpson aand Boyle (1975) and Tharenou (1979) are accurate, managerial self-esteem should show a stronger relationship with identity as a manager than global self-esteem. As such:

Hypothesis 17: There will be a stronger relationship between managerial self-esteem and identity as a manager than between global self-esteem and identity as a manager.

Continuing this same argument, it should also be expected that individuals with high managerial self-esteem should have a stronger identification with the tasks they face in their roles as managers than persons with high global self-esteem. Thus:Hypothesis 18: There will be a stronger relationship between managerial self-esteem and task identity than between global self-esteem and task identity.

METHODSSubjects

Sample 1 The initial subjects were 114 first-level supervisors and mid-level managers

at two mid-size manufacturing plants in the Midwest. There were two administrations of the measure. The first took place before the subjects participated in twelve days of management development training. The second was administered after the completion of the training. The data were collected by self-report paper and pencil questionnaires administered by mail. The first administration included 118 subjects, from whom 114 responses were returned, for a response rate of 94%. The second administration included 90 subjects from whom 60 responses were returned, for a response rate of 67%.

Sample 2

The second sample includes 200 managers or supervisors who responded to a mailing from the author. The survey was mailed to 1,000 managers and supervisors who had attended management development programs at a Midwestern university. The initial mailing was followed by a letter of reminder, which resulted in the response rate of twenty per cent

MEASURES

Development of the Managerial Self-esteem Measure

The managerial self-esteem scale consists of ten items derived from (a) an examination of management literature and (b) a discussion of the construct with people within industrial and academic organizations who were likely to be knowledgeable about the role of managers. The examination of management literature consisted of three parts. The first involved examination of textbooks currently utilized in basic management courses, and identification of common factors found in these textbooks. The second aspect included reviewing the curriculum components of organizations providing professional development seminars in management and again identifying common factors. The third was to review other management books which describe the various roles of managers in an attempt to validate the already identified factors. Specific items were then designed to assess the subjects' perceptions of their sense of worthiness in the areas of management communication, organization abilities, problem solving, and competency in their roles as managers.

Other Measures

Global self-esteem was measured by use of the 10-item Rosenberg (1965) scale. This is a measure of general self-esteem, including items such as "I feel that I have a number of good qualities" and "At times I think I am no good at all" (reversed).

Role Perceptions. Role ambiguity was measured with use of the 14-item scale developed by Rizzo, House, and Lirtzman (1970). It consists of two subscales assessing role ambiguity (unclear role expectations) and role conflict (conflicting role expectations). Identity as a manager was assesses with a 25-item scale (Joseph, Aldag & Keenan, 1989) which examines the extent to which the individual perceives that he or she is a member of management, is perceived by others as a manager, possesses various symbols of management, has been granted authority and responsibility commensurate with the management role, and is treated by others as a manager.

Coping behaviors. Coping behaviors were measured through the use of a scale developed by Latack (1981, 1986). This scale, containing 30 items, taps the degree to which the individual engages in each of four sets of coping behaviors:

positive thinking; interpersonal; avoidance/resignation; and direct action (comprised of task-focused, problem-solving efforts).

Consequences. Satisfaction with work was assessed by use of the Job Descriptive Index (JDI) (Smith, Kendall, & Hulin, 1969). Organizational commitment was gauged by a nine-item scale developed by Cook and Wall (1980). Somatic tension was measured by use of a six-item scale asking individuals to indicate how much of the time they feel nervous, jittery, physically fit (reversed), calm (reversed), fidgety, and energetic (reversed). Latack and Aldag (1976) reported coefficient alphas of .75 and .77 for this scale.

Analyses

Means, standard deviations, coefficient alphas and zero order correlations for all variables are presented in Tables 1 and 2. In keeping with the exploratory nature of the study, zero-order correlations among variables were first computed. Since directional hypotheses are presented, one-tailed significance tests were employed.

Coefficient alphas and test-retest correlations were calculated in order to estimate the reliability of the managerial self-esteem scale.

RESULTS

Internal consistency

In the first administration to sample one, coefficient alpha for the managerial self-esteem measure was .805 and on the second administration, coefficient alpha was .803. For the second sample, coefficient alpha was .823. These results indicate strong internal consistency.

The test-retest reliability coefficient was .67. While this figure indicates stability of the measure, it was likely affected negatively by the impact of the training.

Factor Analysis

Factor analysis was performed on the a combination of both administrations of the scale. Principal components factor analysis with Varimax rotation and application of a scree test suggested that a one factor solution was most appropriate. The one factor solution, the loadings of which are shown in the Table 3, was thus employed. All items except number 5 had a loading of greater than .5. Item 5 was subsequently dropped from all further analyses.

Table 3Factor Analysis for the Managerial Self-esteem Items

------------------------------------------------------------------------------------- Factor Loadings

Sample 1 Sample 2

1. I communicate effectively with other persons in management. .481 .5702. I communicate effectively with the persons reporting to me. .624 .6233. I effectively organize the work in my department. .714 .5654. I assign tasks to others that are clear and understandable. .559 .5775. I consult with others before making decisions which affect them. .228 .2986. I am effective in motivating the employees reporting to me. .638 .7187. I am effective at reviewing the work of others and providing them with meaningful feedback. .742 .6108. I am effective at solving problems on the job. .432 .5289. I provide effective leadership for my department. .825 .75110. Overall, I feel confident in my effectiveness as a supervisor/manager. .780 .851

Eigenvalue 3.88 4.03---------------------------------------------------------------------------------Convergent Validity

An indication of the convergent validity of a measure appears where there is a strong relationship between the measure and other measures of similar constructs. Managerial self-esteem was examined in it's relation to several corollary constructs as well as several role-based constructs and the coping measures.

Managerial self-esteem correlated significantly with the Rosenberg measure of global self-esteem, (hypothesis 1), (r=.47, p<.001 - sample 1);(r=.26, p<.05 - sample 2); (hypothesis 2), internal work motivation (r=.38, p<.001 - sample 1); (hypothesis 3) autonomy (r=.21, p<.05 - sample 1); (hypothesis 4) positive thinking coping (r=.52, p<.001 - sample 1); (hypothesis 5) interpersonal coping (r=.50, p<.001 - sample 1)); (hypothesis 6), avoidance/resignation coping (r=.50 p<.001 - sample 1) and (hypothesis 7) direct action coping (r=.57 p<.001 sample 1).

Also, the relationship between managerial self-esteem measure and several role-based constructs was examined. Managerial self-esteem correlated significantly with (hypothesis 8) role conflict (r=-.14, p<.01 sample 1) (r=-.21, p<.01 sample 2); role ambiguity (hypothesis 9) (r=-.49, p<.001 sample 1) (r=-.44, p<.001 sample 2); task identity (hypothesis 11) (r=.27, p<.01 - sample 1); and identity as a manager (hypothesis 12) (r=.43, p<.001 - sample 1). Hypothesis 10, the correlation between managerial self-esteem and task significance was , (r=.13, ns - sample 1) , (r=.31, p=.01 - sample 2).

Discriminate Validity

Discriminate Validity was assessed by examining the results of hypotheses 17 and 18, as well as by examining how well the items in the managerial self-esteem measure differed from global self-esteem items through a factor analytic examination. Hypotheses 17 and 18 were intended to discriminate managerial self-esteem from global self-esteem by comparing the correlations between these measures and the measures for identity as a manager and task identity. Hypotheses 17 and 18 were confirmed, as the correlation between managerial self- esteem and identity as a manager was r=.55 p<.001, while the correlation between global self-esteem and identity as a manager was r=.20 ns. (Table 4) Also, the correlation between managerial self-esteem and task identity was r=.27 p<.05, while that between global self-esteem and task identity was r=.11 ns.

Table 4Means, Standard Deviations, Cronbach Alpha and Zero-order

Correlations------------------------------------------------------------------------------------------Variable Mean SD (1) (2) (3) (4)(1) Managerial Self-Esteem 39.6 3.84 (.82)(2) Global Self-esteem 42.4 5.01 .56*** (.83)(7) Satisfaction with the Job 36.7 7.91 . 31*** .43*** (.71)(8) Organization Commit. 35.8 5.01 .35*** .33*** .36*** (.82)------------------------------------------------------------------------------------------- Note: n=203 Cronbach alphas are in parentheses along diagonal for multiple item measures. *p < .05; **p < .01; ***p < .001

A critical requirement of the managerial self-esteem measure is that it discriminate from global self-esteem. To assess this, all of the items from global self-esteem and managerial self esteemed were factor analyzed together. This analysis indicated that all of the Rosenberg global self-esteem with the exception of one loaded greater than .41 on one factor, while the managerial self-esteem items, with one exception, all loaded greater than .48 on a second factor.

DISCUSSION

Persons with high managerial self-esteem see themselves as worthy of fulfilling the requirements of their role as a manager and expressing an attitude of approval or disapproval concerning how well they are able to satisfy the needs arising from performance in the management role. It is therefore indicated that managers with high managerial self-esteem perceive themselves as capable of successfully performing the tasks required for this role in the organization. The results of this research indicate the importance and usefulness of the managerial self-esteem construct, its measure and their relevance for a wide variety of organizational factors. Both the corollaries and consequences indicated in the proposed nomological network were appropriately related to the measure of managerial self-esteem.

Several directions for future research are evident. First, research appears indicated concerning measurement of the amount of variance attributed to intrinsic properties of the individuals, vs. external organizational and socialization experiences. This could have significant implications for management development interventions, as well as for organization behavior interventions related to defining the role of the management staff. Second, while the study was not intended to test theories of managerial self-esteem, but to validate the measure, all of the hypotheses

were supported. This indicates that future research might focus on longitudinal studies of the impact of both corollaries and consequences examined in this study and other constructs which may also likely be a part of the nomological network surrounding managerial self-esteem. Third, it appears important to look at the measure in terms of non self-report constructs, to examine whether either common method bias might be affecting the results reported in this study. Fourth, and perhaps most important, further work needs to be done in examining the validity of both the construct and the measure. This might include an examination of relationships to other role based measures, was well as how it is differentiated from measure of self efficacy.

In summary, the research indicates the pervasive influence of a construct of managerial self-esteem. Such findings appear to indicate a need for additional research to further explore the construct and measure.

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A COMPARATIVE ANALYSIS OF BUSINESS

ETHICS: ATTITUDES OF RUSSIAN AND ISRAELI

EXECUTIVES

Arie Reichel *

Gavriel Meirovich **

The present study is part of a stream of empirical studies attempting to measure the business ethics attitudes across nations, economies, and societies. The major premise examined is that there is an inverse relationship between the economic orientation of a country and the ethical orientation of its people.

A sample of 105 Russian mid-level executives was compared and contrasted with a sample of 110 Israelis by utilizing the Attitudes Toward Business Ethics questionnaire. The results of the study suggest that the Russian executives are more "capitalistic" and competitive than their Israeli counterparts, giving credence to the inverse relationship hypothesis.

* Arie Reichel is an Associate Professor in the Department of Industrial Engineering and Management at the Ben-Gurion University of the Negev, Ben-Sheva, Israel.

* * Gavriel Meirovich is an Adjunct Professor in the Department of Industrial Engineering and Management at the Ben-Gurion University of the Negev, Ben-Sheva, Israel.

Manuscript received, October, 1996, revised, February, 1997.

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he topic of ethics in business conduct has attracted substantial public and scientific interest in the last two decades. A modern organization is regarded

as a social, rather than just an economic, entity which causes social consequences and should behave within a moral framework (Davis & Frederick, 1984; Mintzberg, 1983). Traditional expectations of business have gone far beyond the production of material wealth and profit. The business community is now expected to be more involved in such issues as decreasing environmental pollution, prevention of fraud and kickbacks, promoting gender and racial equality (Davis & Frederick, 1984; Mintzberg, 1983; Soutar, McNeil & Molster, 1995; Wood, 1991).

Ethical attitudes are closely related to cultural background, and they influence an organization's activities in world markets, as well as within their own milieu. The rapidly development the relatively young field of cross-cultural research on ethics seems natural, therefore. A few years ago, it was possible for Reichel and Preble (1991) to state that "few studies have attempted to focus on cross-cultural ethics," but this is no longer the case. The article of Reichel and Preble dealt with comparative analyses of ethical perceptions of American and Israeli business students. They hypothesized that future managers from the more "socialist" state (Israel) would reveal more "capitalist" orientation than their American counterparts. Small (1992), basing his methodology on Reichel and Preble (1991), compared American and Australian students, finding that the two groups tended to share similar or identical values in their attitudes, while differences between them were not particularly meaningful.

Some researchers have endeavored to reveal the influence of cultural background on ethics by making comparisons with other variables. For example, Armstrong and Steeny (1994) compared ethical perceptions of international managers in Australia and Hong Kong, and found that Australians were more concerned with ethical problems. The importance of cultural factors were compared to the mode of a company's entry into international business and variables related to industry type. It was concluded that culture had the most significant effect on perceptions of ethical problems. In similar research, Whipple and Swords (1992) compared American and English students on ethic-related judgments and found that gender was a more influential variable than culture: the difference in ethics between female and male studentsfemale students indicated more "ethical" perceptionswas found more important than distinctions between cultures.

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Part of the cross-cultural ethics research has focused on more specific subjects, such as particular actors (stakeholders,representatives of native or foreign nations) or issues (intra organizational politics, organizational development). Nyaw and Ng (1994) tested differences in attitudes between four countriesCanada, Taiwan, Hong Kong, and Japantoward various stakeholders: customers, suppliers, employees, supervisors and rivals. They based their interesting analysis on four cultural variables developed by Hofstede (1983)individualistic-collectivist, masculine-feminine, power distance and uncertainty avoidanceand hypothesized that differences in cultural background influenced attitudes toward ethics. In fact, the authors found that the more individualistic Canadians were more tolerant of unethical actions that affected the job security of employees, while Japanese tended to be more tolerant of questionable behavior of supervisors (due to greater power distance) and less ethical toward rivals (due to masculinity and collectivism). However, the results were mixed; the authors concluded that Hofstede's model was somewhat limited in predicting ethical beliefs across nations, and that other possible factors, such as legal environment or religion, could influence ethical beliefs.

A different viewpoint is presented by Tsalikis and Nwashukwu (1991) and later by Tsalikis and La Tour (1995). Ethical reactions of American and Nigerian business students, and then American and Greek business students, were compared with the use of the same methodological tools. Respondents from the three countries were administered various scenarios of businessmen giving bribes to officials and were asked to rate the ethicality of the situations according to a numbered scale reflecting ethical theories of justice, relativism, egoism, utilitarianism, and deontologicalism. On the one hand, substantial differences between the three nations were found. Perceptions of American students toward bribes were less tolerant than in the other two samples. On the other hand, all three cultures appeared to be rather similar, since their responses to the ethicality of situations depended on the nationality of the actors (foreign or native). Foreign actors engaging in questionable activity (specifically giving a bribe to an official) were seen as considerably more unethical than when native counterparts did the same thing.

Ralston, Giagalone and Terpstra (1994) analyzed ethical perceptions of American and Hong Kong managers of organizational politics. Also basing their study on Hofstede's, they revealed that Americans rated individualistic political tactics, such as self-promotion, as more ethical than Hong Kong managers, who tended, with their more collectivist orientation, to work "quietly behind the scenes," and found more private and circuitous tactics as more ethical than their American colleagues.

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Additional specific issues concerning business ethics were studied by White and Rhodeback (1992), who indicated substantial differences between American and Taiwanese business students on their perceptions of ethical Organizational Development consulting behavior. As a whole, American students tended to provide higher ethicality ratings, while Taiwanese provided higher ratings of likelihood of unethical behavior. At the same time, analyses showed definite differences in appraising specific situations by the two groups. Some practices that looked normal or standard in the United States were viewed as less ethical by the Taiwanese.

Although our literature survey indicated a growing variety of research on cross-cultural ethics, we can point out some areas that require more attention. Most works have focused on analyses of subjective judgments, while much less attention has been paid to real practice in organizations, demonstrating a one-sided approach to the subject. A step toward repairing this omission was made by Robertson and Schlegelmilch (1993), who analyzed differences in policy on ethics in British and American corporations. They concluded that British companies tended to communicate ethics policies through senior executives, whereas American companies relied more on Human Resources and Legal Departments. American firms were more concerned with employee behavior that could harm the firm, while British counterparts were more protective of employee rights.

Another deficiency of the research to date is that no studies have been made on previously communist countries. Such study is warranted because these countries are integrating into the worldwide economy, and ethics orientations are important factors in the interactions between managers of Eastern and Western enterprises. In this instance, Russia is of particular interest, since, on the one hand, it is the largest of the post-communist countries and can potentially play a considerable role in the international economy, while, on the other hand, as the central and major part of the former Soviet Union, it was the most "communist" of all European countries.

PURPOSE OF STUDY

As noted above, Reichel and Preble (1991) received quite paradoxical results. Americans, being representatives of a more capitalist nation, seemed to be less "capitalist" in their vision of the business world than their Israeli counterparts. Israelis, on the other hand, appeared less romantic and naive; were more cynical and "hard headed" people, who did not really trust slogans about "business ethics." If these results were not accidental, then there is an inverse relationship between economic orientation of a country and the ethical orientation of its people.

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This being the case, it might be assumed that managers from the most "socialist" countries would possess the more radical "capitalist" business ethics and attitudes. Thus, we decided to compare Israeli managers with their Russian counterparts, as two countries in the process of transitionthe Russians moving from a very strong communist economy toward a capitalistic market economy, and the Israelis in transition from a semi-socialist economy toward a capitalist economy. We therefore hypothesized that the Russians would display even more "capitalist" business ethics and attitudes than the Israelis.

METHOD

In order to answer these questions, two samples of mid-level executives were utilized. The Russian sample consisted of a group of 105 executives, all with the equivalent of an undergraduate degree, who were employed in industry and service organizations. The executives had all attended enrichment management courses in a medium-sized city in central Russia. The Israeli sample consisted of 110 mid-level executives attending management development programs in the center and south of Israel.

The two groups were administered the Attitudes Toward Business Questionnaire (ATBEQ) during April 1995. The ATBEQ (see Appendix) was constructed by Neumann and Reichel (1988), based on the Stevens (1979) "values clarification exercises." Stevens's exercises contained statements that, while not known to the individual completing the exercise, related to various business philosophies such as Darwinism, Machiavellianism, Objectivism, and Ethical Relativism. For each item, the respondent was asked to indicate her/his position, with regard to that item by marking a category ranging from 1 (strongly disagree) to 5 (strongly agree). In addition, the questionnaire requested both personal and demographic data from the participants.

A version of the questionnaire had been prepared in Hebrew. This was then translated back to English by a linguist to ensure that the questionnaire items were comparable and valid across cultures. Similarly, a version of the questionnaire was prepared in Russian, then translated back into English for comparison.

RESULTS

Table 1 depicts statistical and t-test results for Russian and Israeli executives for 30 business ethics attitudes. In 24 of the 30 comparisons, the results were statistically significant. The data indicate that the Israeli executives strongly

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disagreed with the statement that "the only moral of business is making money," while the Russians were undecided. Both groups disagreed with the statement that a person who was doing well in business did not have to worry about moral problems. However, the Israeli group strongly disagreed (m=1.1), while the Russian groups only disagreed (m=2.0). When asked to comment on the idea that every business person acts according to moral principles, whether he/she was aware of it or not (V3), the Israelis strongly disagreed (m=1.2), while the Russians were not certain (m=3.2). The Israeli group strongly disagreed with the idea that if one acts according to the law, he/she cannot go wrong morally (V4), while the Russians tended toward agreement (m=3.3). When asked about the concept of ethics as manifestations of expectations (V5) (i.e., a flexible concept adjusted to expectations), a similar pattern appeared: the Russians approved of it (m=3.8), while the Israelis strongly disagreed (m=1.2).

The executives were also asked to respond to several statements about behavioral aspects of business ethics, basically from their perspective as consumers, and not necessarily as decision-makers in organizations. Asked about auto insurance claims, the Israelis disagreed (m=2.1) with the idea of trying to get as much as possible regardless of the extent of the damage (m-2.1), while the Russian executives were "unsure" (m=3.2). Is it appropriate while shopping at the supermarket to switch price tags on packages? (V14). The Israelis were "unsure" (m=2.8), while the Russians disagreed with the idea (m=1.7). Both groups were close to unsure on the issue of taking office supplies home (V 15) (Russians, m=3.1; Israelis, m=2.6).

Table 1

Results and t-Tests Between Israeli and Russian Students on Business Ethics Attitudes

Variable Number of Cases Mean

Standard Deviation t-Value

Degrees of

Freedom

V1 Israel 110 1.2 0.5 -14.44** 139.5Russia 105 3.0 1.2

V2 Israel 110 1.1 0.4 -8.8** 139.8Russia 105 2.0 0.9

V3 Israel 110 1.2 0.5 -16.2** 143.4Russia 104 3.2 1.2

V4 Israel 110 1.2 0.6 -15.8** 156.2

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Russia 105 3.3 0.2V5 Israel 110 1.2 0.7 -10.9** 179.9

Russia 105 3.8 1.0V6 Israel 110 1.1 0.4 -21.0** 138.6

Russia 105 3.6 1.1V7 Israel 108 2.6 1.2 1.5 207.5

Russia 105 2.3 1.0V8 Israel 110 1.5 0.9 -10.85** 206.5

Russia 105 2.9 1.0V9 Israel 109 2.9 1.2 4.6** 202.9

Russia 104 2.2 1.0V10 Israel 109 2.0 1.1 -8.5** 210.9

Russia 104 1.0 3.3V11 Israel 109 3.0 1.1 0.9 211.9

Russia 105 2.9 1.1V12 Israel 110 3.4 1.1 -5.4** 201.7

Russia 105 4.2 0.8V13 Israel 109 2.1 1.1 -7.0** 209.4

Russia 104 3.2 1.2V14 Israel 109 2.8 1.0 8.3** 211.0

Russia 105 1.7 0.9V15 Israel 110 2.6 1.1 -2.7** 201.5

Russia 105 3.1 1.3V16 Israel 108 3.3 1.2 4.5** 209.5

Russia 104 2.6 1.2V17 Israel 106 2.5 1.2 -6.4** 206.7

Russia 104 3.6 1.1V18 Israel 107 3.6 1.2 -4.9 207.2

Russia 105 3.7 1.0V19 Israel 107 3.3 1.3 -0.25 203.7

Russia 105 3.3 1.1V20 Israel 107 1.3 0.7 -15.8** 171.0

Russia 104 3.3 1.1V21 Israel 107 1.5 0.9 -12.6** 201.0

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Russia 105 3.2 1.0V22 Israel 107 2.2 1.3 -8.0** 198.0

Russia 104 3.4 0.9V23 Israel 107 3.1 1.4 3.27** 197.6

Russia 102 2.6 1.1V24 Israel 107 4.2 1.1 2.98** 203.9

Russia 105 3.8 0.9V25 Israel 104 3.2 1.1 -5.0** 189.2

Russia 105 3.9 0.8V26 Israel 105 3.1 1.2 -0.13 202.0

Russia 104 3.1 1. 0V27 Israel 104 2.5 1.3 -2.16* 205.4

Russia 105 2.8 1.1V28 Israel 104 2.6 1.2 -1.37 196.4

Russia 104 2.8 0.9V29 Israel 103 2.6 1.3 -4.18** 191.4

Russia 105 3.3 1.0V30 Israel 103 3.8 1.1 4.09** 205.9

Russia 105 3.0 1.1

*p<0.05; **p<0.01

33


When asked about another aspect of business and morality"business decisions involve a realistic economic attitude and not a moral philosophy" (V6)the Israelis strongly disagreed (m=1.1), while the Russians tended to agree (m=3.6). The two groups, however, were quite similar in their responses about the statement that moral values were irrelevant to the business world (V7). Both groups disagreed with the statement (Israelis, m=2.6; Russians, m=2.3). The differences were not statistically significant.

Turning to the public confidence in the ethics of business (V 8), the Russians were not sure if the lack of confidence was not justified. The Israelis, on the other hand, rejected this statement, indicating that the lack of trust is justified. On the next issue, business ethics as a public relation statement (V9), the Israelis were unsure (m=2.9), while the Russians' response was 2.2 (however, the difference is not statistically significant). The pattern changes in relation to the argument that the business world today is not different from what it used to be in the past. "There is nothing new under the sun" (V10). The Russian group was "unsure," (m=33), while the Israelis disagreed (m=2.0). The two groups were very similar in their attitudes toward competitiveness and profitability. Both were unsure (Russians, m=2.9; Israelis, m=3.0) if competitiveness and profitability are independent values. The Russians believed that limiting competition could only hurt society, and that it actually violates basic natural laws (V12). The Israelis were unsure, but tended to "agree" (m=3.4).

A similar pattern is found in terms of sick days viewed as deserved vacation days (V16). The mean of the Russian group was 2.6, and the mean response of the Israelis was 3.3. On another moral-behavioral issue, raising the price of a product and declaring it to be on sale (V21), the Israeli sample disagreed (m=1.5), while the Russians were not sure (m=3.2).

Turning to more macro-philosophical views, the Russian group tended to agree that employee wages should be determined according to the laws of supply and demand (V17), while the Israelis were between "disagree" to "unsure" (m=2.5). When asked to respond to the statement that the main interest of shareholders is maximum return on their investment (V18), both agreed, with only a minor statistically insignificant difference. The mean response of the Russian group was 3.7, while the Israelis was 3.6. Similarly, both groups agreed that just working hard does not assure the expected payoff at the end (V19) (both groups had a mean response of 3.3).

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Commenting about the statement, "For every decision in business the only decision I ask is, Will it be profitable? If yes, I will act accordingly; if not, it is irrelevant and a waste of time." (V20), the Israeli group disagreed (m=1.3), while the Russians were "not sure," tending in the direction of agreement (m=3.3). On a similar note, "a business person can't afford to get hung up on ideals" (V 22), the Israelis disagreed (m=2.2), while the Russians were "not sure," in the direction of agreement (m=3.4). Also, in response to the idea that "a good business person is a successful business person" (V25), the Israelis mean response was 3.2, while the Russians were more in agreement (m=3.9). Again, in a statement that the business world has its own rules (V24), both groups seemed to agree, while the Israelis showed more agreement (m=4.2 vs. 3.8).

Turning to more individual philosophical issues, the respondents were asked to express their level of agreement with the idea that if you want a specific goal, you have got to take the necessary means to achieve it (V23). Both were in the region of unsure (Israelis m=3.1; Russians m=2.6). When asked about their preference for truth and personal responsibility versus unconditional love and belongingness (V26), both groups were identical in their "not sure" response (m=3.1. The two groups also tended to have similar responses between disagree to "not sure" in terms of the attitude that true morality is first and foremost self-interested (V27) (Israelis, m=2.5; Russians, m=2.8). Similarly, they were almost identical in their "unsure" responses to the claim that "self-sacrifice is immoral" (V28) (Israelis, m=2.6; Russians, m=2.8). The differences were not statistically significant.

Reacting to the concept of judging a person according to one's work and dedication (V29), the Israelis were between "disagree" to "unsure" (m=2.6), while the Russians were between "unsure" to "agree" (m=3.3). Finally, the Israelis agreed (m=3.8) with the statement that "you should not consume more than you produce" (V30), while the Russians were unsure (m=3.0).

DISCUSSION

A careful examination of the results indicates that many comparisons, although statistically significant, are not very meaningful. It seems that one has to look at general patterns according to the meaning of clusters of variables. Thus, in our analysis, there seem to be five major clusters of variables: (a) attitudes toward business and profit; (b) attitudes toward the morality of business; (c) personal and morality issues; (d) behavioral aspects; and (e) business and organizational reality. Note that these clusters vary somewhat from Stevens's (1977) original philosophies, as well as from Neumann's and Reichel's (1988) attempt to identify clusters through discriminant analysis, as part of their formation of the condensed version of ATBEQ (presented in the Appendix).

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(a) Attitudes toward business and profit: In this cluster, we included the attitudes about business and profit: making money as the only moral of business; the importance of maximum return on investment; the relevancy of profit in business decisions; The equivalence of a successful business person and a good business person and the idea that doing well in business frees the person from worrying about moral problems. Assuming that capitalism is equated with Milton Friedman's philosophy, the results clearly demonstrate that the group of Russian executives was much more capitalistic in their attitudes than the Israelis. Moreover, turning to

(b) The morality of business: a similar pattern is apparent here. In this cluster, we included the attitudes that every business person acts according to moral principles, whether aware of it or not: acting according to the law ensures morality; business ethics as adjustments between expectations and the way people behave; business decisions involve realistic attitudes and not moral philosophies; morality is irrelevant to business; and a similar notion, that business people cannot get hung up on ideals. Note that, except for one of the attitudes (V7), the Israeli group "strongly disagreed" or "disagreed" with the attempt to separate business decisions from moral aspects. It is possible to see this cluster as related to the above capitalistic concept; thus we found that both groups were basically congruent with their attitudes: Russians more "capitalistic" than their Israeli counterparts. It is interesting to note that, when examining

(c) Personal and morality issues: the differences between the groups are minor. The two samples were both unsure if truth and responsibility were preferable to unconditional love, and also were quite similar in their attitudes toward the concepts of true morality as self-interested and self-sacrifice as immoral. This cluster also included the concepts that a person could be judged in terms of work and dedication; thus one should not consume more than he/she could produce. The latter concept was accepted by the Israelis, but the Russians were "unsure" about it. In sum, most of the responses to personal and moral issues did not indicate a clear pattern between the groups. The next cluster;

(d) Behavioral aspects: The behavioral aspects included trying to get as much as possible on an auto insurance claim, switching price tags on packages in the supermarket, taking office supplies home, declaring sick days for days used for vacationing, and raising the price for a product "on sale." On the issues of office supplies and vacation days, the two samples were quite similar, being in the middle category. However, clear differences were evident in two concepts: the Israelis rejected the auto claim part, as well as

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the "on sale" issue, while the Russians were unsure about these concepts. The exact opposite pattern was found in terms of switching price tags.

(e) Business and Organizational reality: This cluster included nine attitudes: the lack of public confidence in business; business ethics as public relations; nothing new under the sun in terms of business behavior; competition and profitability; limiting competition; business has its own rules; employees' wages; all means for a goal; and, organizational advancement expectations. On most of these issues, the two groups were quite similar, indicating the "unsure" range. However, several differences are noteworthy. First, the Israelis believed that the lack of trust in business was justified (vs. "unsure" for the Russians), but at the same time, disagreed that the business world today is no different from what it used to be in the past (vs. the Russians, who seemed to be more positive about the statement). In addition, the Israeli executives were not sure if limiting competition would hurt society, as opposed to Milton Friedman's approach, advocated by the Russians. Similarly, the Russians were in favor of employee wages as determined by demand and supply. Again, a clear "capitalistic" concept. Yet, there was one value that broke this pattern: business ethics as a public relations concept. The Russians disagreed with this idea, while the Israelis were unsure. One would have expected probably the opposite response.

Looking at the above patterns as revealed in the five clusters, it appears that most of the differences that existed between the two groups of executives portray the Russians as more "capitalistic" and competitive than the Israeli group. It is interesting to compare these results with previous comparative studies. In the comparative analysis of Preble and Reichel (1988), the Israelis were "more capitalistic" than the Americans. In the study of Small (1992), the Australians were more similar to the Americans than to the Israelis. It seems that there is an inverse relationship between the nature of the economic-social structure of the society and the expressed business ethics. The more capitalistic-competitive the society and economy, the more "ethical" the values. If we consider a range from communist economies to capitalist or free economies, with socialist and mixed economies in between, such as,

communistsocialistmixedcapitalist

then the attitudes should be in the opposite direction:

Unethical Cut-throat Ethical andCompetitive Moral

Values Values

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Note that the capitalist free economies of the United States and Australia were found to exhibit more "ethical" and "moral" concepts than the Israeli sample; but the mixed, more capitalist Israeli economy seemed to be much more "ethical" or "moral" than the Russian economy, which is undergoing very rapid changes from a communist economy to a mixed or capitalist economy. If our hypothesis is correct, in the future all the samples mentioned here will demonstrate almost identical attitudes, as the economies shift more and more toward the American model.

In sum, our analysis of Russian and Israeli executives is a part of a stream of empirical studies attempting to measure the business ethics attitudes across nations, economies, and societies. The results of the study lead us to propose inverse relationships between the nature of the economy and the social system (capitalist vs. socialist) and the business ethics attitudes held by executives.

It is clear at this point that more comparative studies of this nature are needed in order to examine the above hypothesis. Our economy-business ethics hypothesis is still exploratory in nature and requires wider and more heterogeneous samples. In addition, the premise of the dynamic nature of business ethics, especially in economies in transition, has to be investigated by utilizing longitudinal comparative studies, not only for the Israeli and Russian groups, but for other cultures as well.

APPENDIXAttitudes toward Business Ethics Questionnaire (ATBEQ)

Reflect on the following statements about business attitudes in Questions 1-30. Indicate your position regarding each by writing a number in the blank before each statement:

1(strongly disagree) 2(disagree) 3(not sure) 4(agree) 5(strongly agreee)

1. The only moral of business is making money. 2. A person who is doing well in business does not have to worry about moral

problems. 3. Every business person acts according to moral principles, whether he/she is aware of it or not. 4. Act according to the law, and you can't go wrong morally. 5. Ethics in business is basically an adjustment between expectations and the way people behave.6. Business decisions involve a realistic economic attitude and not a moral philosophy.

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7. Moral values are irrelevant to the business world.8. The lack of public confidence in the ethics of business people is not justified. 9. "Business ethics" is a concept for public relations only.10. The business world today is no different from what it used to be in the past. There is nothing new under the sun.11. Competitiveness and profitability are independent values (exist on their own).12. Conditions of a free economy will serve best the needs of society. Limiting

competition can only hurt society and actually violates basic natural laws.13. As a consumer when making an auto insurance claim, I try to get as much as possible regardless of the extent of the damage.14. While shopping at the supermarket, it is appropriate to switch price tags or packages.15. As an employee, I take office supplies home; it doesn't hurt anyone.16. I view sick days as vacation days that I deserve.

Employee wages should be determined according to the laws of supply and demand.18. The main interest of shareholders is maximum return on their investment.19. George X says of himself, "I work long, hard hours and do a good job, but it seems to me that other people are progressing faster. But I know my efforts will pay off in the end." Yes, George works hard, but he's not realistic.20. For every decision in business the only question I ask is, "Will it be profitable?" If yes will act accordingly; if not, it is irrelevant and a waste of time.21. In my grocery store, every week I raise the price of a certain product and mark it "on sale." There is nothing wrong with doing this.22. A business person can't afford to get hung up on ideals.23. If you want a specific goal, you have got to take the necessary means to achieve it.24. The business world has its own rules.25. A good business person is a successful business person.26. I would rather have truth and personal responsibility than unconditional love and belongingness.27. True morality is first and foremost self-interested.28. Self-sacrifice is immoral.29. You can judge a person according to his work and his dedication.30. You should not consume more than you produce.

Sources: Stevens (1979); Neumann and Reichel (1988).

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REFERENCES

Armstrong, R.W. & Steeny, J. (1994). "Industry Type, Culture, Mode of Entry and Perceptions of International Marketing Ethics Problems: A Cross-Cultural Comparison. Journal of Business Ethics, 13(1), 775-786.

Davis, K. & Frederick, W.C. (1984). Business in Society, 5th ed. New York: McGraw Hill.

Hofstede, G. (1983). "The Cultural Relativity of Organizational Practices and Theories."Journal of International Business Studies, 14(2), 75-89.

Mintzberg, H. (1983). Power In and Around Organizations. New York: Prentice-Hall.

Neumann, Y. & Reichel, A. (1988). "The Development of Attitudes Toward Business Questionnaire (ATBEQ): Concepts, Dimensions, and Relations to Work Values." International Review of History and Political Science, 25(1), 18-27.

Nyaw, M. & Ng, I. (1994). "A Comparative Analysis of Ethical Beliefs: A Four-Country Study." Journal of Business Ethics, 13(7), 543-556.

Preble, J.F. & Reichel, A. (1988). "Attitudes towards Business Ethics of Future Managers in the U.S. and Israel." Journal of Business Ethics, 7(12): 941-949.

Ralston, D.A., Giagalone, R.A. & Terpstra, R.H. (1994). "Ethical Perceptions of Organizational Politics: A Comparative Evaluation of American and Hong Kong Managers." Journal of Business Ethics, 13(12), 989-999.

Reichel, A. & Preble, J.F. (1991). Cross-Cultural Management Research: Israeli and American Attitudes toward Business Ethics. International Journal of Management, 8 (2) 631-691.

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Robertson, D.C. & Schlegelmilch, B.B. (1993). "Corporate Institutionalization of Ethics in the United States and in Great Britain." Journal of Business Ethics, 12(4), 301-312.

Small, M.W. (1992). "Attitudes toward Business Ethics Held by Australian Students: A Comparative Study." Journal of Business Ethics, 11(11), 795-752.

Soutar, G.N., McNeil, M. & Molster, C. (1995). "A Management Perspective on Business Ethics." Journal of Business Ethics, 14(8), 603-611.

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of Bribery and Extortion in International Commerce." Journal of Business Ethics, 10(2), 85-98.

Whipple, T.W. & Swords, D.F. (1992). "Business Ethics Judgments: A Cross-Cultural Comparison." Journal of Business Ethics, 11(9), 671-678.

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41

LEVELS OF COGNITIVE ACTIVITY REQUIRED

TO ANSWER POM TEST BANK MULTIPLE

CHOICE QUESTIONS

William R. SherrardDavid R. Hampton

The ability to think critically is crucial in todays production and operations management (POM) competitive environment. To promote critical thinking POM instructors should ask questions which will require students to sharpen their thinking skills. One strategy is for instructors to push students to move beyond the rote memorization of facts to correctly answer examination questions. This research evaluates how well the author supplied multiple choice test bank questions that accompany introductory textbooks in POM to foster critical thinking. The study classifies a sample of author- supplied POM test bank questions according to the cognitive level (memorization vs. thinking) required to answer the questions correctly. The more these questions are used by POM instructors the more they determine the standards required of todays POM students.

extbooks for the introductory production and operations management (POM) course come with a package of supplements including a book of examination questions called a test file or test bank. The typical test file includes hundreds of multiple choice questions that make it convenient for instructors to construct tests. The questions are widely used, and the temptation of instructors to use them seems to grow as class sizes and the labor of grading increase. The more the questions are used the more they determine the standards required of todays POM students.

The purpose of this paper is twofold: to illustrate how it is possible to measure the cognitive activity required to answer multiple choice questions, and to report the results of the cognitive level-classification for a sample of them from the test banks

T

of three leading textbooks in POM. Showing how to recognize the cognitive activity required to answer questions can help instructors begin the continuous improvement process they may judge necessary to rework publisher-supplied questions. Reporting measurement of the cognitive requirements of existing questions can provide a baseline for undertaking continuous improvement in the construction of examinations.


BLOOMS TAXONOMY OF EDUCATIONAL OBJECTIVES

The systems for assessing questions is the long-established Taxonomy of Educational Objectives (Bloom, 1956). Blooms taxonomy identifies two basic levels of cognitive activity: knowledge (memorization) and intellectual ability and skill (thinking).

Knowledge (Memorization)

Knowledge .involves little more than bringing to mind the appropriate material. (Bloom, 1956, p. 201). This level of cognitive activity requires memory of simple rules, facts, terms, sequences, and principles. Knowledge questions require the exam taker to recognize or recall information (rules, facts, etc.) from the referenced material. This may involve the recall of a wide range of material from specific facts to complete theories, but fundamentally all that is required is the bringing to mind of the appropriate information. For example, here is a textbook passage cited from a leading POM textbook and a multiple choice question drawn textbooks test bank file.

From the Text From the Test File

Which is true of a net-change system?

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In a net-change system, the basic production plan is modified to reflect changes as they occur. (Stevenson, 1993, p. 666)

a. It is a batch-type system which is updated

periodically.b. It generates exception reports.c. The basic production plan is modified to

reflect changes as they occur.d. It is used to authorize the execution of

planned orders.e. It indicates the amount and timing of future

charges. (Booth, 1993, p. 315)

45


To answer correctly the student need only remember the definition of a net-change MRP system.

Intellectual Ability and Skill Thinking

This category has five levels of cognitive activity: comprehension, application, analysis, synthesis, and evaluation, all techniques dealing with, organizing or reorganizing materials or problems. Comprehension is ..the lowest level of understanding. ..the individual knows what is being communicated and can make use of the material or idea. (Bloom, 1956, p. 204). The purpose of comprehension questions is to determine if the student understands and can begin to use the information. It goes beyond the simple recall of information. Application shows the student will use the theory. Application is the next cognitive level in which the student is not given the theory but is expected to identify and select the theory and apply it to the best suited concept. Analysis requires breaking down the factual elements and drawing inferences as to the interrelationships of those elements. Using analysis, students determine underlying issues and evaluate both relevant and irrelevant issues. Synthesis requires development and support of solutions, using creativity, organizing things together into a new pattern or structure, and proposing solutions in situations where all things are not obvious or inherent. Evaluation is defined as judgment, opposed to opinion, and concerns the value of an idea or concept based upon knowledge of the terms, comprehension and application of the concepts and determination of how they interrelate and synthesize. Evaluation is the highest level of cognitive ability. The text passage and question below, drawn from a POM textbook, illustrate a thinking type question in production and operations management.

From the TextA JIT customer-supplier partnership is intended to be a stable relationship. The customer gets a steady, reliable source of supply, and the supplier gets a solid customer base upon which the rest of the business can be built. . . . If the supplier is producing in small lots and responding to pull signals, those changes will not cause any difficulties. (Wantuck, 1989, p. 309) (APICS, 1992, p. 7)

From the Test File

In a JIT environment, marketing may discuss with customers all of the following benefits EXCEPT

a. incentives for large-lot deliveriesb. improved on-time deliveryc. improved qualityd. reduced customer hedge inventory

46

The question requires more than the simple recall of information. It requires comprehension because the student must use the concept in a different situation. However, because the question states the abstraction or concept (JIT) to be used in the new set of facts, the question tests no higher level of cognitive activity than comprehension. Application and higher levels such as analysis, synthesis and evaluation require that the abstraction not be stated.

METHOD

Participants

The classification of questions according to Blooms taxonomy requires persons knowledgeable in the subject matter being considered. Recent studies on the use of management and marketing textbook multiple-choice questions used professors in the two disciplines as the experts to classify questions as either knowledge or thinking. (Hampton, 1993a; Hampton, Krentler & Martin, 1993b; Martin, 1992; Viss, 1990). Karns, Burton and Martin (1983), employing Blooms taxonomy, used judges knowledgeable in economics to evaluate six texts and their accompanying test banks.

The participants in this study were four certified practitioner/educators of the American Production and Inventory Control Society (APICS). On average the raters have taught in the San Diego State University Extension Program in Materials Management for 7.5 years, all have passed the required examinations to become APICS certified in Production and Inventory Management (CPIM) and all have worked in the materials management field for several years.

The participants were instructed in the use of Blooms taxonomy for classifying questions according to the cognitive level required to correctly answer the question. In addition, the following definitions were placed on the rating forms as a reminder of what constituted a memory and a higher level question.

Memory Question: Requires memory of rules, facts, terms, sequences, and principles. Memory questions ask the reader to recall information (rules, facts, etc.) encountered in the text.

Higher Level Question: Requires higher level cognitive activities: Comprehension, application, analysis, synthesis, or evaluation. The purpose of higher level questions is to determine whether the reader understands and can begin to use text information, in addition to being able to recall it as a memory question.Materials and Procedures

Sixty test bank questions were chosen from three of the most widely adopted introductory textbooks in production and operations management (Heizer and Render, 1993; Krajewski and Ritzman, 1993; Stevenson, 1993). The sixty questions comprised twenty questions drawn from each author -- ten in each subject area. To eliminate any chance for bias in the selection process, every third question in a test bank subject was used for evaluation until ten questions were chosen. To further prevent bias, the starting point in a test bank for selecting every third question was randomly chosen.

Two of the leading subject areas in production and operations management (material requirements planning and just-in-time) were chosen for evaluation. The subjects represent two of the six examination areas for certification from the American Production and Inventory Control Society, a professional society with over sixty-five thousand members (Fogarty, Blackstone & Hoffmann, 1991, Page iii). Also, these two subjects appear in virtually all introductory production/operations management textbooks.

Time considerations prevented the inclusion of more questions or more topical areas in the study. For each question raters must move back and forth between text and question in the classification process. Similar studies in the other areas of production and operations management is a subject for further research.

The raters were asked to classify, according to Blooms taxonomy, the sixty test bank questions into either of the basic categories: memorization (knowledge level) or thinking (one of the five higher levels). The questions consisted of 10 material requirements planning (MRP) and 10 just-in-time (JIT) questions from each author. The classification process consisted of reading each question, noting the correct answer, and reading the textbook reference for the question. The raters then used Blooms taxonomy to classify each question according to the cognitive activity required of the test taker to answer the question.

Raters were told to make only the binary decision of whether the question could be correctly answered by memorizing or thinking; they were not required to decide into which of the five levels of cognitive activity a thinking question should be classified

Interrater Reliability

To determine the reliability of the cognitive categories (i.e., the rating instrument) and the raters in ranking textbook examination questions, the percent agreement index of interrater agreement was used. In its simplest form, this coefficient is just what the name implies: the percent of time units during which the records of two [or more] observers are in agreement about the record of behavior (Mitchell, 1979, p. 377). According to Jones, Johnson, Butler and Main (1983), the simple, uncorrected percent of raters that assign an individual or object to the same

group (i.e., percent agreement) provides the most accurate estimate of interrater agreement when analyzing categorical data assigned to a small number of similar categories. For this type of data, an average level of 77% agreement or higher is considered sufficient to establish the reliability of the rating instrument (Jones, et. al., 1983).

The average agreement of interrater observations should exceed 77% to establish the reliability of the rating instrument (Jones, Johnson, Butler & Main, 1983). The average percent agreement among the four subjects in this study was 91.7 percent. The subjects concurred in their ratings on 55 of the 60 test bank questions.

If more than one rater disagreed on the categorization of a question, it was removed (discarded) from consideration. Per Table 1, only 5 questions were discarded. Of the remaining 55 questions 69.1 percent were classified knowledge (memorization) questions and 30.9 percent were classified higher level (thinking) type questions.

FINDINGS

Per Table 1 and Figure 1 the rater categorization between the two areas of study, MRP and JIT, reflected the overall percentages in the study. For MRP, the respective percentages were 69 percent memory and 31 percent thinking and for JIT the percentages were 69.2 percent memory and 30.8 percent thinking.

Table 1Summary Statistics Rating by Experts

Testbank QuestionsMRP JIT Combined

Number of questions 30 30 60Number discarded 1 4 5Number of questions remaining 29 26 55Number memory 20 18 38Percentage memory 69.0 69.2 69.1Number thinking 9 8 17Percentage thinking 31.0 30.8 30.9

Figure 1

Summary Statistics Rating by Experts

0

20

40

60

80

MRP JIT Combined

Area of Study

Perc

ent

Percent Memory

Percent Thinking

The memory classification percentages between authors ranged from 40 percent to 80 percent (see Table 2 and Figure 2). Krajewski and Ritzman (1993) had an even mix between memory and thinking type questions in both MRP and JIT. Stevenson (1993) at 80 percent in both MRP and JIT had the highest percentage of memory type questions. The categorizations for Heizer and Render (1993) were in between those of the other two authors, 70 percent memory for MRP and 60 percent memory for JIT. The Chi-square goodness-of-fit results for Table 2 indicate that the distribution of cognitive levels was not uniform, meaning that the test files do not provide an equal chance to select a knowledge question or a question requiring intellectual ability and skill.

Table 2Summary Statistics by Author Rating by Experts

Heiser/Render Stevenson Krajewski/RitzmanMRP JIT MRP JIT MRP JIT

Number of Questions 10 10 10 10 10 10Number Discarded 1 1 0 1 0 2Percentage Discarded 10.0 10.0 0.0 10.0 0.0 20.0Number Memory 7 6 8 8 5 4Percentage M 70.0 60.0 80.0 80.0 50.0 40.0Number HL 2 3 2 1 5 4Percentage HL 20.0 30.0 20.0 10.0 50.0 40.0Chi-square results: 2 (1,N=55) = 6.635, p,.01

Figure 2Summary Statistics Rating of Textbooks by Experts

0.020.0

40.060.0

80.0100.0

MRP JIT MRP JIT MRP JIT

Heiser/Render Stevenson Kraj.../Ritzman

Perc

ent Percent Memory

Percent Thinking

Percent Discarded

DISCUSSION

The interrater reliability results suggest that the cognitive level of the test bank multiple choice questions can be consistently classified according to a simplified version of Blooms taxonomy. Our results imply that the knowledge or memory type question is the dominant form of multiple choice questions in the test banks that accompany basic textbooks for production and operations management.

Our findings did not differ from similar studies in other disciplines. Hampton (1993a) found test banks accompanying management textbooks contained more knowledge than thinking type questions. Similar results were obtained in a study using marketing textbooks and test banks (Hampton, Krentler & Martin, 1993b). Karns, Burton and Martin, writing several years earlier, reported a preponderance of memory over thinking type questions in the six economics textbooks they evaluated (Karns, Burton, & Martin, 1983).

One reason for the low level of test file questions may be due to the difficult and time-consuming work of preparing thinking type questions. Possibly, authors tired after completing the text often have publishers employ others at very little pay to write questions for the test file that accompanies the text.

Also authors and publishers may not consider the level of cognitive activity of multiple choice questions in test bank files as a critical factor in adoption decisions. If instructors demanded higher level questions in test banks, authors and publishers would respond in order to market their textbooks.

Although test banks may include problems and essay questions to stimulate thinking, instructors of large classes (40 students or more) often resort to testing

memory rather than thinking for the determination of grades. To the extent that this occurs instructors will reward a students ability to memorize text passages rather than the students ability to think. This can result in students becoming ill prepared to respond in situations requiring the application of basic knowledge to the solution of complex problems.

SUMMARY AND CONCLUSIONS

One of the authors on cognitive theory believes that examinations should contain a mixture of memory and thinking type questions (Bransford, 1979). Students must learn key definitions in a subject before they can apply their knowledge in areas requiring higher level thinking. The student should be tested on whether he/she has learned the definitions, then given a transfer test to see if he/she can identify novel examples of the concepts (Bransford, 1979, p. 225).

This of course raises the issue of what the mix should be between thinking and memory type questions. If the objective is to test thinking, then the proportion of memory type questions should be significantly below the level required to pass an examination, otherwise a student could pass the exam by answering only memory level questions.

One way to create better questions is to convert memory questions to thinking type questions. This is not difficult, as illustrated in the following conversion of a memory type question from the testbank of a management textbook.

From the Text

Forward Integration occurs when a company enters the business of its customers. If Ford decided to acquire some of its 10,500 franchised dealerships and/or open company owned dealerships, Ford would be engaging in forward integration. (Hellriegel & Slocum, 1992, p. 254)

From the Test File

14. If Ford Motor Company decided to acquire some of its 10,500 franchised dealerships, it would be engaging in

a. forward integrationb. backward integrationc. horizontal integrationd. concentric diversification (Fischthal &

Fischthal, 1992, p. 124)

The following rewrite of the question requires students to comprehend as opposed to remembering in order to correctly answer the question.

From the Text

Forward Integration occurs when a company enters the business of its customers. If Ford decided to acquire some of its 10,500 franchised dealerships and/or open company owned dealerships, Ford would be engaging in forward integration. (Hellriegel & Slocum, 1992, p. 254)

Question

When several country and western music stars built their own theaters and hired their own staffs to run them in Branson, Missouri, they were engaged in:

a. forward integrationb. backward integrationc. horizontal integrationd. concentric diversification

Instructors can easily turn the conversion process into a learning experience. Have students, or groups of students working together, convert some of the memory type questions in the test banks to thinking type questions. The thinking type questions, thus created, can then be exchanged between students and/or subsequently used on examinations.

REFERENCES

American Production Inventory Control Society (1992). CPIM Sample Test Just-In- Time, Falls Church, VA, American Production and Inventory Control Society.

Bloom, B. S. (1956). The Taxonomy of Educational Objectives: The Classification of Educational Goals, Handbook 1: Cognitive Domain. New York:

Longmans, Green and Co.Booth, F. Dean (1993). Test bank to Accompany Stevenson Production/Operations

Management. Homewood, IL: Irwin.Bransford, John D. (1979). Human Cognition Learning, Understanding and

Remembering. Belmont, CA: Wadsworth Publishing Company.Fischthal, E., and S. Fischthal (1992). Test Item File, Management (6th Ed). Hellriegel

& Slocum. Reading, MA: Addison-Wesley.Fogarty, D. W., Blackstone, J. H. and Hoffman, T. R. (1991). Production and

Inventory Management. Cincinnati, OH: South-Western Publishing Company.

Hampton, D. R. (1993a). Textbook Test File Multiple-Choice Questions Can Measure (a) Knowledge, (b) Intellectual Ability, (c) Neither, (d) Both. Journal of Management Education, 17, (November), 454-471.

Heizer, Jay, and Barry Render (1993). Production and Operations Management: Strategies and Tactics (3rd Ed). Boston, MA: Allyn and Bacon.Hellriegel, D., J. Slocum, and R. Woodman (1992). Organizational Behavior (6th Ed).

Boston: West.Jones, A. P., L. A. Johnson, M. C. Butler, and D. S. Main (1983). Apples and Oranges:

An Empirical Comparison of Commonly Used Indices of Interrater Agreement. Academy of Management Journal, 26, 507-519.

Karns, M. T., Burton, G. E., & Martin, G. D. (1983, Summer). Learning Objectives and Testing: An Analysis of Six Principles of Economics Textbooks Using Blooms

Taxonomy. The Journal of Economic Education, 14(3) 16-20.Krajewski, Lee J., and Larry P. Ritzman (1993). Operations Management: Strategy

and Analysis (3rd ed.). Reading, MA: Addison-Wesley Publishing Company.Krajewski, Lee J., and Larry P. Ritzman (1993). Test Item File: Operations

Management: Strategy and Analysis. Reading, MA: Addison-Wesley Publishing Company.

Martin, A. B. (1992). Cognitive Levels of Management and Marketing Test File Questions: An Application of Blooms Taxonomy. Unpublished Masters Thesis, San Diego State University.

Mitchell, S. K. (1979). Interobserver Agreement, Reliability and Generalizability of Data Collected in Observational Studies. Psychological Bulletin, 86, 376-390.

Stevenson, William J. (1993). Production Operations Management (3rd Ed.). Homewood, IL: Irwin.

Swearingen, John (1993). Test Bank and Instructors Manual for Heizer Render Production and Operations Management. Boston: Allyn and Bacon.

Viss, D. M. (1990). A critical Analysis of Management Textbooks. Unpublished Masters Thesis, San Diego State University.

Wantuck, K. A. (1989). Just-In-Time for America. Milwaukee: The Forum Ltd.

TRADE SECRETS PROTECTION: THE MISSING

INGREDIENT IN POM EDUCATION

David S. AngMichael C. Budden

Auburn University at Montgomery

The theft and misappropriation of trade secrets is emerging as a vital management concern. Production and operations management (POM) textbooks appear to provide no coverage of the issue. This article reviews the development of trade secrets legislation, current trade secrets laws, and discusses the current situation surrounding the lack of adequate recognition of trade secrets protection in typical POM texts. A content analysis of 29 textbooks used in production management courses indicates that POM education is lacking in its treatment regarding the recognition of trade secrets risks and a corresponding need for production managers to provide for the adequate protection of POM secrets to which they are entrusted.

rapidly emerging issue in modern business concerns the risk of secrets theft and the necessity for providing adequate protection for proprietary information referred to as trade secrets. A trade secret is valuable information that is not generally known or legally knowable by others and from which its owner derives an economic benefit. In the production and operations management (POM) environment, trade secrets usually take the form of valuable information about a product, service, or process that is viewed as a proprietary property of the owner. Its possession or use gives a competitive advantage to its owner. Existing and proposed legislation offer firms protection and remedy for misappropriation, and a limited but growing literature in the area provides management with recommendations and guidelines aimed at securing protection for trade secrets (Arnott, 1994; Budden, 1996; Budden, Lake & Lett, 1990; Maxwell, 1989).

A


Trade secrets misappropriation is on the rise (Brian, 1994). The number of cases filed under the auspices of the Uniform Trade Secrets Act and other state laws has been increasing in recent years with the realization that trade secrets are at risk and that there is a civil litigation avenue open to firms which provides for the protection of such secrets. In addition, it is likely that criminal cases alleging trade secrets theft will begin appearing, since in 1996 a federal law was enacted which makes some instances of trade secrets theft a federal criminal offense. Trade secrets theft is not just a problem facing domestic firms, as reports that Japanese firms have been similarly victimized demonstrate (Doe, 1988). The direct costs of trade secrets misappropriation has been estimated in the billions of dollars annually (Budden, 1996; p. 73). Examples of such costly thefts in the production environment are easy to find, but two of the more publicized incidents involved the theft of General Electric's formula for making high-grade industrial diamonds, worth millions of dollars, and the theft of the formula for "Slick 50" which was reportedly used in an extortion attempt (Ingrassia, 1990; Reifenberg, 1995). More recently, Volkswagen's settlement of a trade secrets dispute with General Motors resulted in a settlement valued in excess of one billion dollars(U.S. News & World Report, 1997). The problem's global nature is underscored by the fact that some federal officials believe that the country's biggest security challenges are arising from foreign entities intent on stealing U.S. business secrets, rather than military secrets (Jones, 1992; Datamation, 1993). Indeed, Carley (1995) describes how agents of the French government infiltrated IBM and Texas Instruments allegedly for the purpose of passing secrets back to the French government for potential use by French computer firms.

Further exacerbating the problem of maintaining trade secrets is the fact that the U.S. Freedom of Information Act (FOIA) mandates that some information in the possession of federal agencies is to be made available to requesting parties (U.S. Government Printing Office, 1994). While the federal law exempts information delineated as trade secrets from disclosure, the failure to understand trade secrets law has resulted in the disclosure of secrets through such requests and by accident (Guida, 1989). Indeed, the majority of requests for information under the FOIA are from businesses seeking information on competitors. For instance, Guida (1989) reports that over 80% of the requests for information from the Food and Drug Administration filed pursuant to the FOIA are from businesses.

Though trade literature and academic literature from a variety of fields such as accounting address the issue (see for instance; Lake, Budden & Lett, 1991), POM textbooks do not appear to give coverage to the issue. Production managers need to recognize their responsibility to protect their firms' trade secrets and act accordingly. While some POM students may be exposed to trade secrets law in a business law course, the strategic importance of secrets in many POM environments emphasizes the need for a reinforcement of trade secrets strategies in POM courses. Reinforcing the

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Summer 1998

necessity to safeguard one's secrets and the impact of trade secrets laws could be integrated into POM models. The potential for a competitively damaging disclosure in the POM environment exists. Production managers need to be familiar with the issue of trade secrets and with the impact of trade secrets laws, especially the Uniform Trade Secrets Act, on their efforts.

BACKGROUND OF TRADE SECRETS LEGISLATION

57


For years, federal laws have offered protection for specific types of intellectual properties. Laws covering patents, trademarks and copyrights are well known for the protection they offer owners for intellectual properties and/or identifying information. Such federal statutes encourage innovation through the protection of exclusivity offered under their auspices. However, these federal statutes that offer protection for intellectual properties have weaknesses or limitations which make them less than ideal for providing adequate protection of trade secrets (Lake, Budden & Lett, 1991).

For example, patenting an invention or process requires the applicant to disclose critical information in the application. This disclosure results in making the information available to others, including potential competitors. A patent owner can expect that the patented product or process will be an exclusive property of the owner for twenty years. In the event that a federal court voids the patent due to errors in the process or as an anti-monopolistic measure, a firm's proprietary rights and its competitive advantage are lost. Similarly, the divulgence of the secret during the patent process aids unscrupulous individuals intent on stealing. If these individuals are foreign nationals, they may be beyond the reach of U.S. law and relevant trade treaties. Once the secret is revealed, the potential for misappropriation and competitive injury increases. What was once a secret giving a firm a competitive advantage in the market place is no longer secret, since the secret was voluntarily revealed through the patent application process. Additionally, information such as descriptions of new products, sourcing information, research results, process procedures, process ingredients, and other types of information production managers encounter are often not eligible for patent protection.

Copyrighting materials also results in the public disclosure of the information contained within the materials. Wisely, a firm would not seek copyright protection of POM process descriptions, because it is the wording of the description that copyright law aims to protect, not the physical process involved. Copyright law extends protection to the specific wording of documents or works of art, not to ideas described in documents or works of art.

Trademark laws extend legal protection to owners of brands and identifying information. They do not include protection for information considered to be trade secrets. Like patents, the information's disclosure is assured in a trademark application. Indeed, it is the brand which the owner-applicant intends to disclose that needs and is granted protection from outside abuse that is the major benefit of trademark law. Trademark law has little relevance to the protection of secret information.

It is interesting to note that federal law historically provided for the protection of certain types of intellectual properties including copyrightable materials, inventions, and trademarks. The lack of federal protection for trade secrets has been notably

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lacking, until recently. Small business owners in the U.S. expressed their belief that strengthening intellectual property laws at the federal level should be a priority concern for federal law makers (Selz, 1995). In response to pleas from business groups and others, Congress finally deemed that some instances involving the misappropriation of trade secrets would be construed to be a violation of federal law when it adopted the 1996 Industrial Espionage Act (IEA). The IEA carries criminal penalties and fines for individuals and firms found guilty under its auspices.

Still, in most instances involving allegations of trade secrets misappropriation, state trade secrets laws will be the primary vehicle under which firms will seek legal remedy. Of the various states laws concerning trade secrets, the Uniform Trade Secrets Act (UTSA), a model law recommended to state legislatures for adoption by the National Conference of Commissioners on Uniform State Laws, is the most likely law under which remedy will be sought. In every state, trade secrets acts and contractual laws have historically offered firms protection for their trade secrets. A major weakness that exists with these state acts involves the fact that their provisions and scope vary greatly, resulting in confusion for trade secrets owners and inconsistent protection for their property rights. In an effort to correct this legal shortcoming, the National Conference of Commissioners on Uniform State Laws, an independent commission composed of legal analysts, proposed a model law to the states that offers consistent definition and treatment for trade secrets protection. The UTSA offers the possibility of more uniform legal protection to owners of proprietary trade secrets. It was originally recommended to the states by the National Conference of Commissioners on Uniform State Laws in 1979 and amended in 1985. As of the date of writing this article, a total of 40 states and the District of Columbia have enacted laws based on the Act (Uniform Laws Annotated, 1996). Other states are considering the Act for possible adoption. Table 1 lists those jurisdictions which have adopted laws based on the UTSA, while Table 2 lists those states which have not yet adopted an act based on the UTSA.

The UTSA defines trades secrets, offers legal protection to owners of trade secrets, and offers legal remedies should owners find themselves victims of secrets theft or misappropriation. The Act's adoption by the 41 jurisdictions to-date, and subsequent court cases (see for instance Electro-Craft Corporation v. Controlled Motion, Inc., 1983) carry implications for production managers that need to be recognized. Production managers should recognize they often encounter or are in possession of trade secrets information, and as a result, they need to take adequate steps to protect their firm's proprietary property rights.

59

Table 1

Jurisdictions That Have Adopted Versions of The Uniform Trade Secrets Act

Alabama Iowa OhioAlaska Kansas OklahomaArizona Kentucky OregonArkansas Louisiana Rhode IslandCalifornia Maine South CarolinaColorado Maryland South DakotaConnecticut Minnesota UtahDelaware Mississippi VirginiaDistrict of Columbia Missouri WashingtonFlorida Montana West VirginiaGeorgia Nebraska WinsconsinHawaii NevadaIdaho New HampshireIllinois New MexicoIndiana North Dakota

SOURCE: Uniform Laws Annotated, Volume 14, Civil, Procedural and Remedial Laws, 1996 Cumulative Annual Packet Part, St. Paul Minnesota, West Publishing Co.

Table 2

Jurisdictions That Have Not Adopted Versions of The Uniform Trade Secrets Act

Massachusetts

Michigan

New Hampshire

New Jersey

New York

Pennsylvania

Tennessee

Texas

Vermont

Wyoming


The reason that the majority of firms will rely on the UTSA (or other state laws) for remedy is that (1) the IEA requires the minimum value of the secret involved to be $100,000; (2) a criminal prosecution requires a higher burden of proof than civil prosecution; (3) many cases involving trade secrets misappropriation do not involve interstate commerce (and are therefore not within the jurisdiction of the IEA) but rather are intrastate complaints; (4) the fines levied, if any, are payable to the federal government; a civil suit would still be necessary to obtain damages; and (5) the case would have to be deemed serious enough or of such an egregious nature as to warrant federal intervention. It is important to realize that it is the purpose of both federal and state statutes that trade secrets be recognized by law and protection extended to their owners. While the presence of the federal statute will undoubtedly serve as a deterrent to misappropriation, an understanding of the UTSA and its implications for production and operations management strategy is important if trade secrets are to be recognized and adequately protected.

RELEVANCE OF TRADE SECRETS TO POM EDUCATION

Production managers are exposed to trade secrets on a regular basis. Research results are often valuable information that can be construed to be a trade secret. Proprietary production processes, proprietary packaging procedures, new product information, supplier information, costs and pricing information, internally developed software, and other proprietary information to which production managers are exposed can be construed to be secret information of value that gives a firm a competitive advantage in the market place. The source of such a competitive advantage must be recognized and appropriate steps taken to protect the secrets involved.

In general, proprietary production information can often be considered a trade secret deserving of protection. The UTSA and other state trade secrets acts offer protection for trade secrets if a firm has taken appropriate and reasonable steps to protect its secrets (Lake, Budden & Lett, 1991). The theft of trade secrets is on the rise, and according to one estimate increased 260% between 1985 and 1991 (Brian, 1994). Indeed, some insurance firms have expanded their kidnaping and ransom coverage to include risks associated with the theft of trade secrets (Roush, 1994). Production managers need to be aware of such risks and be prepared to act accordingly. POM textbooks should identify such risks and provide a general guide for production management efforts aimed at protecting trade secrets in the production environment.

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It appears that professionals outside of the production environment are recognizing the need to identify and provide for the protection of trade secrets information. Articles in publications targeted to a variety of non-POM professionals, such as dentists, management accountants, internal auditors, sales managers, and financial managers, have appeared in recent years espousing the need to protect trade secrets (see for instance, Arnott, 1994; Budden, 1989; Budden, Lake & Lett, 1990; Carley, 1994; Ingrassia, 1990; Jones, 1992). Budden, Lake and Yeargain (1995) outlined a seven-step plan aimed at protecting trade secrets which advised managers to recognize that they may be in possession of valuable secrets, that a climate of confidentiality needs to surround such secrets, and that reasonable steps to protect the secrets need to be taken, enforced and monitored. The paucity of trade secrets coverage in an engineering context is emphasized by the appearance of an article in an engineering journal concerning the necessity to protect trade secrets which was, in fact, a reprint of an article which had first appeared in an accounting journal (see Budden, Lake & Lett, 1991). POM professionals need to be aware of the risk they face and the necessity of providing adequate protection for the trade secrets to which they are entrusted.

EMERGING IMPORTANCE OF TRADE SECRETS PROTECTION

An interesting aspect of value relative to trade secrets involves the concept of a secret which possesses a negative value. The Commissioners (1985), in their comments to the UTSA, proffer that information of a negative value may be construed to be a trade secret capable of garnering protection under the UTSA. Information with a negative value would include, for example, knowledge that a particular process or effort would not be profitable or would be counter-productive if implemented in the production environment. An investment that results in a discovery that a particular process would not be financially feasible is information of value, negative value perhaps, but valuable, and potentially a beneficiary of trade secrets protection efforts.

It is easy to make an argument for the importance of trade secrets protection in the current, downsizing, less-loyal work environment of the 1990s. Maxwell (1989) estimated that even among high technology firms in the U.S. where much secrecy can be expected, one-third had no specific protection plan to guard against trade secrets theft. Academicians and executives agree that the risk of damage from trade secrets theft is increasing but managers appear to be doing less than is needed to provide for the adequate protection of such secrets (Doe, 1988; Chadbourne, 1987; Lake, Budden & Lett, 1991).

Relevance of the Problem

In business, trade secrets theft is on the rise. Trade publications and news articles have reported on the trade secrets problem in recent years. IBM, Mary Kay,

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Nationwide Mutual Insurance, J.D. Powers & Associates, General Electric, and Northwest Airlines are among the larger firms which have initiated action seeking legal protection of their trade secrets and/or remedy for damages related to the misappropriation of those secrets (Byron, 1991; Carley, 1994; Cunningham, 1992; Miller, 1992). Arnott (1994) stresses the need to firms to take specific legal and security actions in order to prevent the misappropriation or theft of trade secrets information in light of the current work environment. Budden (1995) discusses the necessity of destroying old copies of the information and not just throwing secret information in the trash. As Palmeri (1994) mentions, one firm involved in a trade secrets dispute accumulated over 10,000 pages of information from a competitor's trash which allegedly implicated the competitor in a trade secrets theft. Even a cosmetics firm has been accused of having its operatives sift through trash seeking information on its competitor (Zellner, 1991). Production and operations managers need to be alert to the fact that they are in possession of valuable trade secrets and be aware that they must take proactive steps in order to adequately protect those secrets to which they are entrusted. One trend which some recognize as increasing the risk of theft of trade secrets is the trend toward "partnering" in the area of vendor relations (Bleakley, 1995; Budden, Jones & Budden, 1996; Stuart, 1993; Templin & Cole, 1994). Partnering, which results in the use of one vendor over a long period, offers a variety of benefits to both parties (Stuart & Mueller, 1994). In the POM environment, partnering requires the sharing of information which often exposes trade secrets information to the parties involved. This sharing of secret information, necessarily shared in order to maximize the benefits of the partnering arrangement, puts the owner-firm at risk of losing its secrets. Partners in these arrangements often share information about internal operations, productions costs, product development technology, new products, and production processes which are often proprietary secrets of the owner-firm and may be construed to be legally protectable trade secrets. The sharing of such information does have its risks. As Henderson (1990) explains, parties to such a partnership share both risks and benefits from the agreement.

O'Neal (1993) discusses the increased dependence on vendors for innovation that arises from partnering arrangements. Manufacturers such as Boeing, Honeywell, and Bose sometimes pass the innovation tasks to vendors to save R&D costs (Bleakley, 1995). JIT-II programs, which allow vendors to place orders for their customers as stock levels fall, give outside vendors unprecedented access to the production environment and the secrets it holds. Such information sharing arrangements present challenges to firms seeking to assure the continued secrecy of their properties. Thus, firms involved in partnering agreements face increased exposure or a heightened risk for the loss of their trade because a partnering arrangement requires a close sharing of proprietary information. Without the close sharing of proprietary information, partnering arrangements often would not produce the benefits that many desire. In describing supplier partnerships, Stuart and Mueller (1994) recognize that the supplier,

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in essence, becomes an extension of the purchasing organization's process and a joint partner in a total quality effort. Still, the risk for misappropriation or theft of trade secrets through partnering agreements needs to be recognized and steps implemented to protect the secrets involved.

Computers and Ease of Information Transfer

Another factor which increases the challenge of providing adequate security is the relative ease by which secrets may be stolen when stored in electronic form. The widespread use of telecommunications and networks present easy avenues through which secrets may be physically misappropriated. Stealing data electronically through networks or over telephone lines is much easier and more difficult to detect than carrying physical evidence and often leaves no easy trail to follow. Similarly, miniature disks and tapes capable of storing large volumes of information ease the physical transporting of secret documents by disgruntled employees. The ability to easily transfer, electronically, large amounts of secret information is creating a whole new method through which trade secrets may be misappropriated, creating new headaches for those whose responsibilities include protecting such information. Internet and other such information highways present security and production managers a whole new area of risk concern. It is imperative that production managers recognize the exposure their trade secrets face and take sufficient steps to insure their continued secrecy.

Employee Loyalty

A factor further contributing to the problem of trade secrets misappropriation is the decreased level of employee loyalty which has emerged in recent years due to personnel actions such as "downsizing" and the resulting layoffs of middle management. As Arnott (1994) points out, employees (sales persons) take customers with them when they leave a company, as well as valuable information about the company they are leaving. Henkoff (1990) found that almost three-fourths of senior managers reported decreased levels of morale, trust and productivity after implementation of downsizing efforts. Brown (1994) emphasizes that the old employer-employee contract has been undermined by massive layoffs and can no longer be taken for granted by those in the workplace. Surely, the almost relentless efforts to downsize or reengineer work in organizations is leading to a less loyal employee; an employee more likely to steal information in an effort to get even or to improve his/her chances in a new work environment. It is these employees, especially, who pose a risk to secrets integrity that production managers need to be wary of in their efforts to control secrecy.

Global Environment

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Finally, the increased use of international sourcing bolsters the concern for the protection of proprietary secrets. Sourcing is a term used to describe the purchase of desired materials from vendors. If a U.S. firm markets products to foreign firms, or sources internationally, and trade secrets are stolen, legal recourse is more difficult and sometimes impossible to obtain. As Templin and Cole (1994) discuss, the American television market was, in a sense, given away when Asian firms, originally entrusted with the production technology to build picture tubes began to use the information to build entire television sets. The result was that the U.S. television industry almost ceased to exist. Further, the use of foreign governments in industrial espionage has been reported (Jones, 1992).

The potential loss of secret process information is underscored by General Electric's court victory over a Korean firm, after alleging its proprietary process for making synthetic diamonds, worth millions of dollars, was stolen (Ingrassia, 1990). In Electro-Craft Corporation v. Controlled Motion, Inc. (1983), the plaintiff lost its bid to recover damages for the misappropriation of its trade secrets when the Minnesota Supreme Court ruled the firm failed to take reasonable efforts to maintain the secrecy of its process. Similarly, in Rockwell Graphic System, Inc. v. Dev Industries (1990), Rockwell failed in its attempt to obtain a summary judgement concerning the misappropriation of its trade secrets when the court noted that Rockwell's efforts were not sufficiently protective to establish secrecy.

In IMI-Tech Corporation v. Gagliani et al. (1986) the producer of polymide foam was successful in its attempt to enjoin former employees from licensing or using its trade secrets. In this case, an employment agreement which prohibited employees from disclosing confidential information obtained while working for IMI-Tech was found to be valid and enforceable. It should be noted that the specifics of such agreements may cause them to be invalidated if the specifics do not meet the expectations of state law. Such agreements need to be legal as to time and place, meaning that they must not restrain unduly one's right to compete in the economy. Most states have explicit limits that can validate or invalidate such an agreement. For instance, some states allow employment agreements that restrict the employee from competing with the employer for a period not to exceed five years and within a reasonable distance from the employer's location. An agreement that restricts an employee from ever entering the business again would be found to be invalid in such a state and unenforceable. The length of the agreement would have to meet state law.

Another example of the potential costly nature of the trade secrets problem is detailed in a suit filed by Willis Corroon's construction division in which it alleged that a defection of four key executives resulted in the loss of more than 175 clients, 50 key employees, and millions of dollars in current and future income (Roberts, 1994). U.S. Steel experienced a similar management exodus and subsequently filed suit against

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National Steel and several former managers alleging among other things that their defection was part of an insidious raid designed to cripple U.S. Steel and steal its trade secrets (Baker, 1994). These and dozens of other cases in recent years indicate that POM professionals need to take trade secrets protection seriously.

One would conclude that the issue of trade secrets protection merits consideration in production and operations management education. Students should be exposed to the concept of trade secrets, taught the necessity of adequately protecting their firms' secrets, and taught methods for accomplishing such protection. The effort at such education could be paired with the concept of ethics in the POM environment in order to reinforce the ethical considerations of misappropriation or theft. Regardless of how it is taught, it needs to be taught to POM students. The combined need for coverage of trade secrets issues and ethical behavior appears to be greater today than ever.

POM TEXTBOOK COVERAGE OF TRADE SECRETS

A content analysis of many leading textbooks regularly used in POM management courses reveals that no coverage is given to the issue. Of 29 mainstream texts examined, none cited trade secrets in the subject index (see Table 3). Many of these texts represent leaders in terms of classroom market share and as such educate many students in the POM field. It is surmised that the lack of trade secrets information in leading POM textbooks indicates a failure to recognize the importance that such a topic deserves and results in graduates within adequate knowledge to deal effectively with the trade secrets concerns of their future employers.

If the trade secrets issue was to be addressed in POM textbooks, the logical question is where to provide such coverage? Though trade secrets bridges a variety of topic areas, trade secrets should be addressed within coverage devoted to the competitive environment or strategy. In a text's coverage of strategy and competitive environment, technology and its impact on the firm are often addressed. Since trade secrets are often found in the technology arena, and offer competitive advantages to their owners, integrating the topic of secrets protection in this area appears sound. Providing adequate protection for a firm's secrets is a strategic issue that can and should be addressed in the strategy area. Regardless of where such coverage occurs, the important point is that it should occur. Coverage of trade secrets is necessary given today's work environment.

CONCLUSIONS

It should be recognized that a proactive stance needs to be taken with regard to the teaching of trade secrets protection. Production and operations management

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professionals need to recognize and provide for the protection of their firms' trade secrets. POM textbooks should recognize the value of trade secrets protection and provide information to students as to how best to protect trade secrets which will be entrusted to them in the course of their future employment. The topic appears not to be addressed in the majority of POM texts, potentially allowing trade secrets knowledge to slip through the cracks in the POM curriculum. Since adequate coverage of the topic appears missing, as this investigation indicates, it follows that the coverage of such an important topic and the ability of a POM education to adequately prepare students for future challenges is lacking. Trade secrets recognition and protection are important lessons to be learned. Trade secrets issues should be discussed and protection mechanisms should be taught in the POM classroom. It is time for POM students to become fully aware of the problems and issues they are likely to encounter in the work environment.

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Table 3

Sample of Production Management Textbooks NOT Citing Information on Protection of Trade Secrets* Published Since 1990

Author(s) Title Publisher Date

Martinich, Joseph Production and Operations Management: An Applied Modern Approach

John Wiley & Sons 1997

Dilworth, James B. Production and Operations Management: Manufacturing and Services

McGraw Hill 1996

Heizer, Jay & Barry Render

Production & Operations Management Prentice Hall 1996

Melnyk, Steven & David Denzler

Operations Management: A Value-Drive Approach Irwin 1996

Stevenson, William J. Production/Operations Management Irwin 1996

Vonderembse, M. & Gregory White

Operations Management - Concepts, Methods, and Strategies

West 1996

Aquilano, Nicholas, Richard Chase, & Mark Davis

Fundamentals of Operations Management Irwin 1995

Chase, Richard B. & Nicholas J. Aquilano

Production & Operations Management: Manufacturing and Services

Irwin 1995

Finch, Byron J. & Richard L. Luebbe

Operations Management Competing in a Changing Environment

Harcourt Brace & Company

1995

Markland, Robert, Shawnee K. Vickery & Robert A. Davis

Operations Management: Concepts in Manufacturing and Services

West 1995

Russell, Roberta S. & Bernard W. Taylor III

Production and Operation Management Prentice-Hall 1995

Gaither, Norman Production and Operations Management Harcourt Brace & Company

1994

Render, Barry & Jay Heizer

Principles of Operations Management Allyn and Bacon 1994

Evans, James R. Applied Production and Operations Management West 1993

Heizer, Jay & Barry Render

Production and Operations Management Strategies and Tactics

Allyn and Bacon 1993

Nahmias, Steven Production and Operations Analysis Irwin 1993

Schroeder, Roger G. Operations Management: Decision Making in the Operations Function

McGraw Hill 1993

Adam, Jr., Everett E. & Ronald J. Ebert

Production & Operations Management Prentice-Hall 1992

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Table 3 (cont.)

Sample of Production Management Textbooks NOT Citing Information on Protection of Trade Secrets* Published Since 1990

Author(s) Title Publisher DateGarvin, David A. Operation Strategy Text and Cases Prentice-Hall 1992

Gerwin, Donald & Harvey Kolodny

Management of Advanced Manufacturing Technology, Strategy, Organization and Innovation

John Wiley &Sons

1992

McClain, John O., L. Joseph Thomas & Joseph B. Mazzola

Operation Management: Production of Goods and Services

Prentice-Hall 1992

Muchnik, Michael Complete Guide to Plant Operations Management Prentice Hall 1992

Riggs, James L. Production Systems: Planning, Analysis, and Control Waveland Press 1992

Fogarty, Donald W., John H. Blackstone & Thomas R. Hoffmann

Production & Inventory Management South-WesternPublishing Co.

1991

Samson, Danny Manufacturing & Operations Strategies Prentice-Hall, Inc. 1991

Vonderembse, Mark A. & Gregory P. White

Operations Management: Concepts, Methods and Strategies

West 1991

Gaither, Norman Production and Operations Management: A Problem-Solving and Decision-Making Approach

Dryden Press 1990

Krajewski, Lee J. & Larry P. Ritzman

Operations Management: Strategy and Analysis Addison-Wesley 1990

Miglore, R. Henry & Walter Thrun

Production/Operations Management: A Productivity Approach

Nichols/GP Publishing

1990

*the term does not appear in the book's index

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REFERENCES

Arnott, N. (1994, December). "Don't Look Now," Sales & Marketing Management, 146(14), 52-57.

Baker, S. (1994, June 20). "Down and Dirty in the Steel Belt," Business Week, 3377, 44.

Bleakley, F. R. (1995, January 13). "Strange Bedfellows - Some Companies Let Suppliers Work On Site And Even Place Orders," The Wall Street Journal, pp. A1+.

Brian, C. (1994, July). "Lost Secrets = Lost Profits," Risk Management, 41(7), 96.Brown, T. (1994, August 15). "On the Edge: Without Job Security," Industry Week,

243(15), 24-32.Budden, M. C. (1995, April). "Can You Keep a Secret?" Business & Economic

Review, 41(3), 24-26. Budden, M. C. (1989, November). "Keep Your Practice Secrets Secret," Dental

Economics, 79(11), 35-37.Budden, M. C. (1996). Protecting Trade Secrets Under the Uniform Trade Secrets

Act: Practical Advice for Executives. Quorum Books, Westport CT.Budden, M. C., Jones, M. A. & Budden, C. B. (1996, Summer). "Supplier

Relationships and the Trade Secrets Dilemma," International Journal of Purchasing and Materials Management, 32(3), 45-49.

Budden, M. C., Lake, R. C. & Lett, S. (1990, December). "Protecting Trade Secrets," Management Accounting, LXXII(6), 45-47.

Budden, M. C., Lake, R. C. & Lett, S. (1991, January). "Protecting Trade Secrets," IEEE Engineering Management Review, 52-55.

Budden, M. C., Lake, R. C. & Yeargain, J. W. (1995, Fall). "Strategic Planning for Protection of Business Secrets Under The Uniform Trade Secrets Act," Journal of Managerial Issues, VII(3), 343-357.

Byron, C. (1991, April 1). "The Bottom Line - Garbage Time," New York Magazine, 16.

Carley, W. M. (1994, July 7). "Fare Game: Did Northwest Steal American's Systems? The Courts Will Decide," The Wall Street Journal, p. A1.

Carley, W. M. (1995, January 19). "A Chip Comes In From The Cold: Tales of High-Tech Spying," The Wall Street Journal, A1, 12.

Chadbourne, R. D. (1987, April). "Industrial Espionage: The Silent Road to Bankruptcy!" Supervision, 49(4), 14-17.

Commissioners on Uniform State Laws (1980), "Uniform Trade Secrets Act," Civil, Procedral, and Remedial Laws, West Publishing Company, 14, 537-551.

Cunningham, C. A. (1992, September 14). "Borland-Symantec Case Heats Up," PC Week,

9(37), 1, 11."Mum's The Word", (1993, February 1). Datamation. 39(3), 19.Doe, P. (1988, September 1). "Japan Starts Fighting for its Own Patent Rights,"

Electronic Business, 14(17), 36, 38.Electro-Craft Corporation v. Controlled Motion, Inc., 332 N.W. 2d 890 (Minn. 1983).

Guida, R. (1989, Fall). "The Costs of Free Information," Public Interest, 97, 87-95.Henderson, J. C. (1990, Spring). "Plugging Into Strategic Partnerships: The Critical IS

Connections," Sloan Management Review, 31(3), 7-18.Henkoff, R. (1990, April 9). "Cost Cutting: How To Do It Right," Fortune, 121(8), 40-

41+.IMI-Tech Corporation v. Gagliani, et al., 691 F.Supp. 214 (S.D.Cal. 1986).


Ingrassia, L. (1990, February 28). "How Secret G.E. Recipe for Making Diamonds May Have Been Stolen," The Wall Street Journal, p. A1.

Jones, A. (1992, April 28). "CI versus Spy," Financial World, 62-64.Lake, R. C., Budden, M. C. & Lett, S. (1991, August). "Trade Secret Protection,"

Internal Auditor, 48(4), 43-48.Maxwell, D.A. (January 1989). "Keeping the Secret in Trade Secrets," Security

Management, 33(1), 38-42.Miller, M. W. (1992, July 15). "IBM Sues To Silence Former Employee," The Wall

Street Journal, p. B1.O'Neal, C. (1993, Spring). "Concurrent Engineering with Early Supplier Involvement:

A Cross Functional Challenge," International Journal of Purchasing and Materials Management, 29(2), 3-9.

Palmeri, C. (1994, September 26) "Dumpster Diving," Forbes, 154(7) 94.Reifenberg, A. (1995, October 25). "How Secret Formula For Coveted Slick 50 Fell

Into Bad Hands", The Wall Street Journal, pp. A1, A9.Roberts, S. (1994, June 27). "Willis Corroon Cries Foul," Business Insurance, 1+.Rockwell Graphic System, Inc. v. Dev Industries, 730 F.Supp. 171 (N.D. ILL. 1990).Roush, C. (October 3, 1994). "Ransom Insurance for a More Dangerous World,"

Business Week, 132.Selz, M. (1995, June 16). "Small-Business Owners Submit A Lengthy 'Wish List'," The

Wall Street Journal, p. B2.Stuart, F. I. (1993, Fall). "Supplier Partnerships: Influencing Factors and Strategic

Benefits," International Journal of Purchasing and Materials Management, 29(4), 22-28.

Stuart, F. I. & Mueller, P., Jr. (1994, Winter). "Total Quality Management and Supplier Partnerships: A Case Study," International Journal of Purchasing and Materials Management, 30(1), 14-20.

Templin, N. & Cole, J. (December 19, 1994). "Manufacturers Use Suppliers to Help Them Develop New Products," The Wall Street Journal, pp. A1.

U.S. Government Printing Office (1994). Freedom of Information Act Guide and Privacy Act Overview. Office of Information and Privacy; U.S. Department of Justice, Washington, DC.

"Secrets and Settlements," (January 20, 1997). U. S. News & World Report, 122(2), 18.Zellner, W. (1991, April 1). "Dumpster Raids? That's Not Very Ladylike, Avon,"

Business Week, 3206, 32.

74

ON THE REPEATED PARTITION SCHEDULING

PROBLEM

Zvi Drezner

In this paper we present the following scheduling problem. nk people are to be divided into k groups of n people each. Such a division is repeated d times (each time a different partition is scheduled). It is required that each person meets every other person (i.e. is in the same group with him) at least once. The objective is that each person will meet with other participants about the same number of times. The problem is formulated and heuristic algorithms proposed for its solution. Extensive computational experiments are reported.

meeting organizer suggested the following problem. Twelve persons are participating in a conference for seven days. They are divided into three groups of four persons each. The grouping usually changes from one day to another. It is important that each person meets every other person (i.e. be with him in the same group) at least once. Also, it is desirable that each pair meets about the same number of times as the other pairs. Throughout the paper we refer to this specific problem (withthree groups of four people each over seven days) as the particular problem. The particular problem originated in planning a golf tournament. For this particular problem there are 66 possible pairs and 126 pair-wise meetings throughout the seven days. This means that on the average each pair meets close to twice (the average is 21/11). Therefore, the best possible solution is having 60 pairs meet twice and six pairs meet once. However, such a solution has not been found yet.

It is relatively simple to find schedules for which each person meets every other person. However, when arrangements are randomly generated, such feasible arrangements occur only once or twice in 10,000 trials. Avoiding four or more meetings can be achieved by trial and error (the maximum possible number of meetings is seven).

.

A

75

The objective is to find a schedule where each pair meets once, twice, or three times, and the number of pairs who meet three times is minimized.

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After a long manual effort for some years, the organizer found a solution with twelve pairs meeting three times (and 36 pairs meeting twice, eighteen pairs meeting once). By randomly generating computerized solutions and crude improvement procedures a solution with nine pairs meeting three times was found. The algorithms proposed in this paper yielded a solution with only three pairs meeting three times (and 54 pairs meeting twice, nine pairs meeting once).

The general problem is related to personnel assignment problems [1-5]. Several business applications are described in the next section.

APPLICATIONS

Applications in scheduling and planning of operations are quite common. Such business applications are presented for the particular problem of 12 objects, 3 groups of 4 objects each, and seven days. Applications of the same type may, of course, have different numbers of objects, groups, and days.

. An operation uses 12 machines (or workers, or any type of resources). There are 21 tasks to be completed in one day. Each task requires 4 machines, so 3 tasks can be performed simultaneously and seven periods are required for the completion of the whole project. The schedule is planned ahead of time so no changes are possible during the day. If one machine is out of order for a task, (or a worker did not show up, or a resource is unavailable), the task can be completed but some extra cost is incurred. However, if two machines are out of order for the same task, the task cannot be completed which adds a significant cost to the operation. We would therefore wish to design a schedule such that the number of times that each pair of machines is assigned to the same task is about the same. If a certain pair of machines is assigned many times to the same task, then the operation will lose an excessive amount if this particular pair of machines happens to be out of order. Assume, for example, that the probability that a machine is out of order is 0.02 (2%). The probability that all machines are operating and the project is completed without any extra cost is 0.9812 =0.7847. The probability that exactly one machine is not operating is 0.1922. The probability that exactly two machines are out of order is only 0.0216, which leaves a probability of 0.0015 that three or more machines are inoperative. Any schedule will have exactly seven tasks for each machine. Therefore, the extra cost incurred when one machine is out of order is the same for all configurations and we have no control over it. By selecting a good schedule, we can get quite a uniform distribution of losses when two machines are inoperative. The probability that three or more machines are inoperative is so low, that it can be disregarded in the calculations.

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. Twelve workers perform in a very stressful environment. The task requires dividing the workers into three groups of four workers each to perform three different activities. Seven sets of three activities each are required. If two workers are assigned to the same team too many times, they may get on each other's nerves. The objective is to arrange a schedule such that every pair meets about the same number of times. No pair meets four times and the number of pairs which meet three times is minimal.

. Twelve drugs are to be tested for possible harmful interactions between pairs of

drugs. In order to check all combinations one needs to perform 66 experiments in pairing drugs. This might be too expensive. Three labs are available for such experiments and four different drugs can be administered simultaneously in each experiment. The labs can be booked for seven experiments each. A testing scheme needs to be designed such that in each of the seven days the twelve drugs are divided among the three labs, four drugs to each. It is necessary that each pair of drugs will be tested at least once. Furthermore, it is desirable that every pair of drugs will be in the same group about the same number of times. Such a scheme reduces the number of experiments from 66 to 21.

. Twelve commercials are prepared for broadcasting. Only four slots are available in a particular program. You wish to test these commercials and find the best combination of four commercials. The effectiveness of each individual commercial depends on the other commercials selected for showing. Some pairs of commercials enhance the effectiveness of one another, and some pairs may reduce the effectiveness. Information about the interactions between various commercials is

not available. There areInstall Equation Editor and double-click here to view equation. possible selections of

four commercials out of the twelve available ones. We do not have the resources to check all of these possible selections. Twenty one groups of people are available for testing combinations of four commercials, and there are 3 rooms available for simultaneous showing. We would like to select seven partitions of the twelve commercials into three groups of four each. Our objective is to have each pair of commercials represented in these groups about the same number of times so that these 21 groups will evenly cover the spectrum of possible pairing.

THE GENERAL PROBLEM

LetP be a partition of people to groups over several days,n be the number of people in each group,k be the number of groups,d be the number of days.

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mrs(P)is the number of times pair (r, s) meets for a partition P,N(P,i)is the number of pairs that meet i times for a partition P.

A Partition P is termed feasible if N(P,0)=0. In any partition P each person meets n-1 other people each day for a total of nk(n-1)/2 pairwise meetings during the day. The total number of meetings is therefore dnk(n-1)/2. The total number of pairs is nk(nk-1)/2, and therefore the average number of meetings between pairs is d(n-1)/(nk-1). These calculations can be summarized in the following properties:

Property 1:Install Equation Editor and double-click here to view equation.

Property 2:Install Equation Editor and double-click here to view equation.

Property 3: The average number of meetings, A, is:Install Equation Editor and double-click here to view equation.

The number of possible partitions in one day, D, is:and therefore, the total number of possible partitions in all d days, T, is:Install Equation Editor and double-click here to view equation. For the particular problem n=4, k=3, and d=7 yields D=5,775 and T 51019.

We distinguish between perfect problems where the average number of meetings (property 3) is integer, and imperfect problems when the average is not an integer. Perfect problems may have solutions for which all pairs meet exactly the same number of times. For example, k=n and d=n+1 yield A=1. We found solutions for n=3,4,5 in which all people meet exactly once. In Table 1 we present such a solution for the n=3 case.

Table 1: n=3, k=3, and d=4

Install Equation Editor and double-click here to view equation.

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Day Group 1 Group 2 Group 3

1234

1 2 31 4 71 5 91 6 8

4 5 62 5 82 6 72 4 9

7 8 93 6 93 4 83 5 7

For perfect problems the objective is clear: max {N(P,A)} subject to N(P,0)=0 by the best selection of P. Define for a number X: X and X as X rounded down or rounded

up, respectively. The objective for perfect or imperfect problems is:Note that if 1<A<2, as in the particular problem, then N(P,i)>0 are allowed only for i=1,2, and 3. Therefore, the objective is equivalent to minimizing N(P,3).

AN INTEGER PROGRAMMING FORMULATION

There are D possible partitions in a day by equation (1), and there are R=nk(nk-1)/2 possible pairs. Define the matrix {aij} for i=1,...,D, and j=1,...,R, such that aij=0 if in partition P=i pair j is in two different groups and aij=1 if they are in the same group. For simplicity we assume that the same partition will not be selected more than once during the d days. We define xi for i=1,...,D as a 0-1 variable. xi=1 if partition i is selected in any of the days, and xi=0 otherwise. (If a partition is allowed for more than one day, then xi should be defined as an integer betwee zero and d.) The number of

times that pair j is meeting is:Install Equation Editor and double-click here to view equation. As it is proved in

Lemma 1

below an equivalent objective function is to minimizeInstall Equation Editor and double-click here to view equation.

Therefore, an integer programming formulation is:


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Note that the absolute value in the objective function of (3) can be linearized in the customary way by defining 2R variables yj

- and yj+ for j=1,...,R and equating quantity j

in the absolute value to yj+-yj

- as a constraint and replacing the absolute value of term j by yj

++yj-.

Let I=A. I is a given number independent of P.

Lemma 1: Subject to the constraints in equation (3), the objective function of (2) is equivalent to the objective function of (3).

Proof: The objective function of (3), written in terms of N(P,i) is:We distinguish between two cases: perfect and imperfect problems. For perfect problems (i.e. A = A = A ), the constraints entail at most three non-zero N(P,i) for i=I-1, I, I+1. Since the sum of the N(P,i)'s is constant by Property 2, maximizing N(P,I) is equivalent to minimizing the sum of N(P,I-1)+N(P,I+1). For imperfect problems, a feasible solution may have at most four positive N(P,i)'s: N(P,I-1), N(P,I), N(P,I+1), and N(P,I+2). The objective function of (3) to be minimized is: F=1.5N(P,I-1) + 0.5N(P,I) + 0.5N(P,I+1) + 1.5N(P,I+2). By property 2: F=0.75nk(nk-1) - (N(P,I) + N(P,I+1)). Therefore, minimizing F is equivalent to maximizing N(P,I)+N(P,I+1). =

Another interesting lemma is that minimizing the sum of squares of the number of meetings is an equivalent objective. Since the mean of the number of meetings is constant by property 3, minimizing the variance of the number of meetings is equivalent to our objective.

Lemma 2: Subject to the constraints of (3), minimizing the sum of squares of the number of

meetings Install Equation Editor and double-click here to view equation. is equivalent to maximizing N(P,I)

+N(P,I+1).

Proof: For a given number J:



81


Therefore, minimizing the sum of squares is equivalent to minimizing the sum of squares of the number of meetings adjusted by subtracting a constant. For perfect problems: there are at most three positive N(P,i)'s: for i=I-1, I, I+1. By applying J=I in (4), the objective function is identical to that of (3) because absolute value and a square of -1, 0, and 1 are the same. For imperfect problems apply J=I+0.5 in (4). There are at

most four positive N(P,i)'s and after subtracting J=I+0.5 the sum of squares is equivalent to:which proves the equivalency between the two objective functions.

HEURISTIC ALGORITHMS

The integer programming formulation lends itself to very large problems even for moderate values of n, k, and d. We therefore explore heuristic algorithms for getting good solutions for the problem. Heuristic algorithms through performing pair exchanges are proposed. A random partition for d days is generated and improvements through pair exchanges are considered. Such an approach can be repeated many times and the best solution obtained that way, is selected. In fact, as is demonstrated in the computational results section, these heuristics are very fast for problems of the size of the particular meeting problem.

Three rules for determining pair exchanges were examined. Let M and m be the maximal and minimal number of meetings for a partition P. If M=m (for perfect problems) or M=m+1 (for imperfect problems), then the best possible solution has been found. The first two rules try to lower N(P,M) (and alternatively, if this cannot be achieved, lower N(P,m) without increasing N(P,M)). These rules are quite natural for that objective.

Rule 1: Consider all the pairs that meet M times. For each pair find the M instances where they are assigned to the same group. Check all pair exchanges between one member of the pair and another person in a different group. An exchange is performed if no other pair which now meets M-1 or M times will meet one more time.



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Rule 2: For each pair (r,s) that meets m times check all pair exchanges that move r and s to the same group (if they were not in the same group before) as long as the following holds: (i) no other pair that met m or m+1 times will meet one fewer times, (ii) no pair will meet M+1 times, and (iii) the number of pairs who meet M times does not increase.

These two rules were designed to ensure no cycling. It is proposed to apply Rule 1 first and if no improvement is possible by Rule 1, apply Rule 2 and if exchanges were made alternate between the rules until no further exchanges are possible by any rule.

Lemma 3: Applying Rule 1 and Rule 2 alternately must terminate in a finite number of iterations.

Proof: All Possible P's can be arranged by the following lexicographic order. Each P has a value for M and m with #M pairs meeting M times and #m pairs meeting m times. Compare partitions P1 and P2 with M1, m1 and M2, m2, respectively. P1 precedes P2 if: M1>M2 or M1=M2 and #M1>#M2. If M1=M2 and #M1=#M2, then P1 precedes P2 if m1<m2

or m1=m2 and #m1>#m2. This divides all possible partitions to a finite number of sets where the members of each set are lexicographically equal. It can be easily verified that each application of Rule 1 or Rule 2 results in a partition which is greater lexicographically.

Note that a bound on the number of iterations can be established because the number ofpossible groups can be easily determined. This bound is polynomial in n, k, and d.

Applying Rules 1 and 2 alternately on the particular problem (n=4, k=3, d=7) required 0.038 seconds of computer time on an IBM 486 compatible per starting solution. The best known solution of 9 pairs meeting once, 54 pairs meeting twice, and 3 pairs meeting three times was obtained only once in 150,000 starting solutions. We therefore considered another rule based on Lemma 2.

Rule 3: Check all pair-wise exchanges between persons in different groups and perform the

exchange that yields the smallest sum of squaresInstall Equation Editor and double-click here to view equation.

Stop when no improvement in the sum of squares is possible.

Calculating the change in the sum of squares:

83


By exchanging a pair (r,s) between two groups on a particular day, mrt or mst for some ts, t may increase or decrease by 1. (For simplicity of notation we omit the partition P from mrt(P).) If mrt increases by 1 than the change in the sum of squares is 2mrt+1, and if it decreases by 1 the change is -2mrt+1. There are 2(n-1) increases and 2(n-1) decreases for a total of 4(n-1) such changes. For each prospective pair exchange (r,s) on a certain day, calculate the sum S(r,s) as follows: when mrt is increased by the exchange, add mrt to S(r,s), and when mrt is decreased subtract mrt from S(r,s). The change in the sum of squares is 2S(r,s)+4(n-1) and therefore the pair exchange that yields the smallest S(r,s) is exchanged as long as S(r,s)<-2(n-1). IfInstall Equation Editor and double-click here to view equation. no improvement by Rule 3 is possible. Note that the change in the sum of squares is always even (it can be proven that for a certain problem with given n,k,d, the sum of squares is either even or odd for all configurations depending on whether dnk(n-1)/2 is even or odd, respectively). The complexity of one iteration of Rule 3 is as follows. Maintaining the vector of mrs's is dominated by evaluating all possible pair exchanges. The number of possible pair exchanges is dn2k(k-1)/2, and for each pair the calculation of the change in the sum of squares requires the summation of 4(n-1) numbers for a total effort of o(dn3k2). The algorithm is polynomial because the number of possible sum of squares is limited by d2nk(nk-1)/2 (a tighter bound can be found) and every iteration reduces this number by at least 2.

This rule was proven to be the most effective for the particular problem. 200,000 partitions were randomly generated using a simple pseudo-random number generator and the various rules were applied on these starting solutions. The best known solution was obtained 5,514 times (or about once in 36 cases). Average run time for applying Rule 3 was 0.092 seconds per starting arrangement. Applying Rules 1 and 2 on the final arrangement of Rule 3 increased the run time to 0.106 seconds. It is interesting to note that applying Rules 1 and 2 on the final solution of Rule 3 did not yield more of these best solutions. This means, of course, that this solution cannot be improved by Rules 1 and 2, but surprisingly no other final arrangement of Rule 3 could be improved by Rules 1 and 2 to yield the best known solution. However, this property does not hold in general. For example, the problem with k=2, n=3 and d=5 is a perfect problem with A=2. By equation (1) D=10 and consequently the total number of possible partitions is T=126. By total enumeration it was found that the optimal solution is N(P,1)=N(P,2)=N(P,3)=5. Applying Rule 3 and then Rules 1 and 2 for 10,000 randomly generated starting arrangements yielded the optimal solution in all cases. However, applying Rule 3 only obtained the optimal solution only in 2,705 cases out of 10,000.

ADDITIONAL COMPUTATIONAL EXPERIMENTATIONS

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We investigated the distribution of outcomes using Rule 3 only on the particular problem for 10,000 randomly generated starting arrangements. In Table 2 the outcomes in the order of frequency are presented.

Table 2: Applying Rule 3 Only

Number of Meetings

FrequencySum of Squares0 1 2 3 4

85


000000011111000100010221220

131214111516910121113817131414151816151710111612818

464844504240544945474353384745414336413939464437425037

76859103687941156107128119891210610

000000000000011010101000001

270818881866128193830629811511410677756532313027121165321111

260258262256264266252260264262266256268262264268266270268270270266268272270262272

Note that the solution (0,10,52,4,0) was never obtained. It is possible that such solutions do exist but Rule 3 improves them to (0,9,54,3,0). An example of a best known solution for the particular problem is given in Table 3. Nine pairs meet once, 54 pairs meet twice, and only three pairs (3-10, 5-12, and 7-8) meet three times.

Table 3: Arrangement of Meetings for the Particular Problem

Day Group 1 Group 2 Group 3

12

1 2 3 42 4 5 9

5 6 7 81 6 10 12

9 10 11 123 7 8 11

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34567

3 4 6 102 3 8 101 3 5 122 6 7 124 5 8 12

2 5 11 124 7 9 124 7 10 111 4 8 111 2 7 10

1 7 8 91 5 6 112 6 8 93 5 9 103 6 9 11

We experimented with a larger perfect problem of k=4, n=3, and d=11 for which A=2. No perfect solution with all 66 pairs meeting twice was obtained. The best solution of 2 pairs meeting once, 62 pairs meeting twice and 2 pairs meeting three times was obtained 77 times starting with 100,000 random solutions. In all 77 cases the same best solution was obtained by Rule 3 alone. Run time was 0.202 seconds per iteration for applying Rule 3 only, and 0.214 seconds when Rules 1 and 2 were applied on the solution of Rule 3. A best known solution is given in Table 4. Pairs 4-8 and 5-10 meet once, and pairs 5-8 and 4-10 meet three times. All other pairs meet twice.

Table 4: Best known Solution for the k=4, n=3, and d=11 Problem

Day Group 1 Group 2 Group 3 Group 4

123456789

1011

1 2 34 9 101 9 112 7 122 4 9

2 10 122 4 112 3 63 5 74 7 102 8 10

4 5 61 5 114 7 12

3 10 113 5 81 3 43 7 95 9 102 9 111 2 55 9 12

7 8 93 8 123 6 101 6 91 7 105 7 111 8 107 8 111 8 126 8 111 6 7

10 11 122 6 72 5 84 5 8

6 11 126 8 95 6 121 4 124 6 103 9 123 4 11

CONCLUSIONS

The problem of repeated scheduling of a group of objects into smaller groups is considered. A group of nk objects is to be divided into k groups of n members each. Such a division need to be repeated d times. Our objective is that each pair of objects

87


meets (i.e., it is in the same group) at least once. Also, we would like each pair of objects to meet about the same number of times.

Applications can be found in tournament scheduling, personnel assignment, production scheduling, advertising, experimental design, and others.

Several algorithms for the solution of this problem are suggested and tested. These algorithms can be applied to reasonable size problems. Large problems can employ metaheuristic approaches such as tabu search, simulated annealing, or genetic algorithms. The examination of such procedures is left for future research.

ACKNOWLEDGEMENT:

Part of this research was done while the author was on sabbatical leave at the Hong Kong University of Science and Technology, Kowloon, Hong Kong. The author would like to thank Professor H. Rutemiller of California State University-Fullerton for suggesting the problem

REFERENCES

Mehrez, A. and D. Shinhar. (1982). Organizational Optimization in Personnel Placement,Omega, 10, 331-333.

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Mehrez, A. Y. Yuan, and A. Gafni. (1988). Stable Solutions vs. Multiplicative Utility Solutions for the Assignment Problem, Operations Research Letters, 7, 131-139.

Roth A. (1984). Stability and Polarization of Interests in Job Matching, Econometrica, 52, 47-57.

Roth A. (1985). Conflict and Coincidence of Interest in Job Matching: Some New Results and Open Questions, Mathematics of Operations Research, 10, 379-389.

Yufei Y., A. Mehrez, and A. Gafni. (1992). Reducing Bias in a Personnel Assignment Process Via Multiplicative Utility Solution, Management Science, 38, 227-239.

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