Volume 29 Number 1 June 2004

Editor - Robert Marks

The State of the Journal

N ow in its twenty-ninth year, the Australian Journal of Management has been part of the Australian Graduate School of Management since the earliest times; indeed, Volume 1 Number 1, edited by Ray Ball, appeared in April 1976, almost a year before the first students arrived at the School. It publishes two regular issues a year (up to 150 pages an issue), and recently special issues in a single discipline area as well (on Marketing, Organisational Behaviour (OB), Stock Markets, and later this year on Mergers & Acquisitions).

The Table below shows the distribution of unsolicited submissions to the AJM in 2002 and 2003.

Distribution of Unsolicited Submitted Papers, 2002 and 2003

Responsible Editor Submitted Accepted Rejected/Withdrawn Pending

Finance 51 15 23 13
Corporate Strategy 18 0 16 2
OB 17 0 9 8
Accounting 8 1 6 1
Marketing 6 3 3 0
General Editor 5 0 3 2
Economics 3 1 2 0
IT Management 1 0 1 0
Government/Regulation 0 0 0 0
Total 109 20 63 26

  1. A further 12 papers were rejected by the General Editor without classification.
  2. The special issue on OB (edited by Sharon Parker and Robert Wood, September 2002) accepted 15 papers from 35 submitted.
  3. The special issue on Stock Markets (guest edited by Michael Drew and Stan Hurn from the Queensland University of Technology (QUT), and Garry Twite, September 2003) accepted 5 papers, a selection from papers presented at a 2002 Symposium at QUT on Stock Markets: Risk, Return and Pricing (December 2002).

The hardest-worked Area editors have been those in Finance (Garry Twite at the AGSM and Doug Foster, now UNSW), Corporate Strategy (Tim Devinney at the AGSM), OB (Sharon Parker at the AGSM, now Claire Mason at QUT), Accounting (Greg Clinch, then John Lyon, now Baljit Sidhu, all at the AGSM, and Marketing (Mark Uncles at UNSW). Economics, IT, and Government (respectively, Joshua Gans at Melbourne Business School, now Chongwoo Choe at the AGSM; Graham Pervan at Curtin University; and Ian Marsh, now at ANU) have not been overtaxed.

The numbers in Table 1 for unsolicited submissions show that Finance is the predominant discipline in recent regular issues of the AJM. It was to increase the submission and eventual acceptance of papers in other disciplines, specifically Marketing and OB, that two of the special issues (edited by Mark Uncles, and Robert Wood and Sharon Parker, respectively) were undertaken; it appears that there has been some response to their publication. The special issue on Stock Markets was a joint editorial production with professors at the QUT.

In this issue, nine short papers from a Festschrift for Emeritus Professor Dennis Turner, this is the second Festschrift published. In 1988, the AJM included a Festschrift in honour of the late Emeritus Professor Malcolm Fisher. See the Festschrift's introduction by Robert Wood below.

The last Marketing editor at the AGSM was John Rossiter then at the AGSM, since then Rob Widing (then at MBS) and now Mark Uncles (at UNSW) have edited Marketing. The General Editor before me was John Roberts, and before John, Phil Yetton.

Over the four years 2000 through 2003, a total of 165 researchers acted as unpaid reviewers for the AJM, of which 23 were within the AGSM, 105 at other institutions in Australia, and 37 at overseas universities.

When he stood down as General Editor, Philip Yetton established a prize-the E. Yetton Award-for the best paper published in the AJM in the previous year. Since 1995, there have been 38 (28 Australian and 10 overseas) winners and runners-up, whose papers were in Finance, Economics, O.B., and Marketing; they are listed on the prize's web page, at http://www.agsm.edu.au/eajm/yettonaward.html

The Web of Science reveals 439 citations of 185 papers published in the AJM (at the beginning of April 2004), a rate of 2.37 cites per paper. The three highest cite rates are for papers in Accounting (Clifford Smith and Ross Watts, both at the University of Rochester, 1982), OB (Lex Donaldson at the AGSM and James Davis at the University of Notre Dame, 1991), and Accounting (Ross Watts, at the University of Rochester, 1977).

The AJM has over 200 subscribers, both institutional and personal, in Australia and overseas. In addition, the papers are available on several paid on-line services-UnCover/Ingenta, ProQuest, Thomson Gale, and Ebsco-which generate reasonable revenues. We are discussing with a commercial publisher whether they might be interested in handling promotion, production and distribution of the AJM, leaving the editorial side with us.

From time to time I receive requests for permission to reprint our articles in other publications, usually anthologies; I agree, with the requirement of clear acknowledgment of the AJM (as journal of first publication) and the AGSM (as the owner of the AJM). I also notify the authors.


In the past twenty years, the rise of experimental economics-culminating in the 2002 Nobel Prizes to Daniel Kahnemann and Vern Smith-have shone a light onto aspects of human behaviour which had previously been unexplored. For the previous forty years economists (and financial researchers and market researchers) had taken the tenets of neo-classical economics pretty much as gospel. In particular, the consumer's decisions of what to buy and how much to buy in response to a fixed budget and a set of prices was modelled as constrained utility maximisation. But as economists have learned the experimental tools of the applied psychologist and have used these tools in the laboratory, we have begun to realise that human behaviour-even in the relatively simple case of simple consumer choice-might not be so straightforward.

The lead paper in the regular section of this issue, by Fogel, Lovallo, and Caringal, presents data from laboratory experiments about consumers' choices on the trade-off between quality and price as prices change. They observe asymmetric behaviour-a marked reluctance to trade down in quality even if doing so would yield a large savings as prices rise-as well as other asymmetries. They argue that such behaviour supports the notion of a personal reference price, an internal price that consumers use to compare actual prices and qualities with as they avoid perceived losses in their decision making. This theory is of increasing usefulness in Marketing, as well as Economics.

Most of us have been aware of the existence of investment newsletters, claiming to provide valuable investment information to their subscribers, not least because of the controversies over Rene Rivkin, one of the publishers of such a newsletter until his disgrace over insider trading last year. How valuable is their information? Or are they just expensive gossip sheets? Carson, da Silva Rosa, and Maynier set out to see, by looking at the results for a hypothetical investor who had invested according to their advice over calendar 2001. The authors investigated (1) the clarity of the recommendations; (2) the returns; (3) the liquidity of the recommended shares; (4) whether the relative success was related to company size; and (5) whether the advice could be classified as momentum-based or contrarian. They found that, despite the mixed transparency of the recommendations, it would have been possible to earn exceptionally high returns, especially using momentum-based recommendations. The best advice overall came from The GIS Report.

Tips on the promise of individual stocks is not the only information available for investors. Managed funds have become popular with investors as an alternative to choosing individual stocks, and as the sector has grown, so has a research industry to advise on the performance and promise of the available funds, often in the form of ratings. Paul Gerrans reports on research into the information and quality of these ratings.

He finds, in a survey of individual investors, that they are not only interested in expected risk and returns, but that the source of the information and other factors also matter.

In the past thirty years, the capital-asset pricing model has won the 1990 Nobel Prizes for its originators, including my old Stanford colleague Bill Sharpe. The use of industry betas (which the CAPM generates) for summarizing the risk-return trade-offs of investments in that industry is now pervasive, which makes Martin Lally's paper of interest. He explores the impact of changes in the relative weights of industries in the mark index on industry betas, using an estimated covariance matrix, to find that such effects can be significant. This should provide caution for researchers who believe that an industry beta estimated from one market can readily be applied in another, perhaps in another country.

Yao and Gao, in the final paper in this issue, report on an investigation into systematic risk of Australian industrial returns, with four classes of (non-excusive) models. No one model predominates as an explanation of the variation of industry betas.


Donaldson, L. & Davis, J.H. 1991, Stewardship theory or agency theory: CEO governance and shareholder returns, Australian Journal of Management, vol. 16, no. 1, pp. 49-64.

Marks, R.E. & Swan, P.L. 1988, Introduction to the Festschrift, Australian Journal of Management, vol. 13, no. 2, pp. 137-40.

Smith, C.W. Jr., & Watts, R.L. 1982 Incentive and tax effects of executive compensation plans , Australian Journal of Management, vol. 7, no. 2, pp. 139-58.

Watts, R.L. 1977, Corporate financial statements, a product of the market and political processes, Australian Journal of Management, vol. 2, no. 1, pp. 53-78.

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