• Management & Information Systems Review
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• v.22
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• pp.137-165
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• 2007

It seems high time to increase productivity by adopting e-business to overcome challenges posed by both external factors including the appreciation of Korean won, oil hikes and fierce global competition and domestic issues represented by disparities between large corporations and small and medium enterprises (SMEs), Seoul metropolitan and local cities, and export and domestic demand all of which weaken future growth engines in the Korean economy. The demands of the globalization era are for innovative changes in businessprocess and industrial structure aiming for creating new values. To this end, e-business is expected to play a core role in the sophistication of the Korean economy through new values and innovation. In order to examine business performance in e-business-adopting industries, this study analyzed the home shopping industry by closely looking into the financial ratios including the ratio of net profit to sales, the ratio of operation income to sales, the ratio of gross cost to sales cost, the ratio of gross cost to selling, general and administrative (SG&A) expense, and return of investment (ROI). This study, for best outcome, referred to corporate financial statements as a main resource to calculate financial ratios by utilizing Data Analysis, Retrieval and Transfer System (DART) of the Financial Supervisory Service, one of the Korea's financial supervisory authorities. First of all, the result of the trend analysis on the ratio of net profit to sales is as following. CJ Home Shopping has registered a remarkable increase in its ratio of net profit rate to sales since 2002 while its competitors find it hard to catch up with CJ's stunning performances. This is partly due to the efficient management compared to CJ's value of capital. Such significance, if the current trend continues, will make the front-runner assume the largest market share. On the other hand, GS Home Shopping, despite its best organized system and largest value of capital among others, lacks efficiency in management. Second of all, the result of the trend analysis on the ratio of operation income to sales is as following. Both CJ Home Shopping and GS Home Shopping have, until 2004, recorded similar growth trend. However, while CJ Home Shopping's operating income continued to increase in 2005, GS Home Shopping observed its operating income declining which resulted in the increasing income gap with CJ Home Shopping. While CJ Home Shopping with the largest market share in home shopping industryis engaged in aggressive marketing, GS Home Shopping due to its stability-driven management strategies falls behind CJ again in the ratio of operation income to sales in spite of its favorable management environment including its large capital. Companies in the Group B were established in the same year of 2001. NS Home Shopping was the first in the Group B to shift its loss to profit. Woori Home Shopping has continued to post operating loss for three consecutive years and finally was sold to Lotte Group in 2007, but since then, has registered a continuing increase in net income on sales. Third of all, the result of the trend analysis on the ratio of gross cost to sales cost is as following. Since home shopping falls into sales business, its cost of sales is much lower than that of other types of business such as manufacturing industry. Since 2002 in gross costs including cost of sales, SG&A expense, and non-operating expense, cost of sales turned out to have remarkably decreased. Group B has also posted a notable decline in the same sector since 2002. Fourth of all, the result of the trend analysis on the ratio of gross cost to SG&A expense is as following. Due to its unique characteristics, the home shopping industry usually posts ahigh ratio of SG&A expense. However, more than 80% of SG&A expense means the result of lax management and at the same time, a sharp lower net income on sales than other industries. Last but not least, the result of the trend analysis on ROI is as following. As for CJ Home Shopping, the curve of ROI looks similar to that of its investment on fixed assets. As it turned out, the company's ratio of fixed assets to operating income skyrocketed in 2004 and 2005. As far as GS Home Shopping is concerned, its fixed assets are not as much as that of CJ Home Shopping. Consequently, competition in the home shopping industry, at the moment, is among CJ, GS, Hyundai, NS and Woori Home Shoppings, and all of them need to more thoroughly manage their costs. In order for the late-comers of Group B and other home shopping companies to advance further, the current lax management should be reformed particularly on their SG&A expense sector. Provided that the total sales volume in the Internet shopping sector is projected to grow over 20 trillion won by the year 2010, it is concluded that all the participants in the home shopping industry should put strategies on efficient management on costs and expenses as their top priority rather than increase revenues, if they hope to grow even further after 2007.

• Journal of Distribution Science
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• v.10 no.2
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• pp.29-41
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• 2012

This paper undertakes a conceptual review of transaction cost to broaden the understanding of the transaction cost analysis (TCA) approach. More than 40 years have passed since Coase's fundamental insight that transaction, coordination, and contracting costs must be considered explicitly in explaining the extent of vertical integration. Coase (1937) forced economists to identify previously neglected constraints on the trading process to foster efficient intrafirm, rather than interfirm, transactions. The transaction cost approach to economic organization study regards transactions as the basic units of analysis and holds that understanding transaction cost economy is central to organizational study. The approach applies to determining efficient boundaries, as between firms and markets, and to internal transaction organization, including employment relations design. TCA, developed principally by Oliver Williamson (1975,1979,1981a) blends institutional economics, organizational theory, and contract law. Further progress in transaction costs research awaits the identification of critical dimensions in which transaction costs differ and an examination of the economizing properties of alternative institutional modes for organizing transactions. The crucial investment distinction is: To what degree are transaction-specific (non-marketable) expenses incurred? Unspecialized items pose few hazards, since buyers can turn toalternative sources, and suppliers can sell output intended for one order to other buyers. Non-marketability problems arise when specific parties' identities have important cost-bearing consequences. Transactions of this kind are labeled idiosyncratic. The summarized results of the review are as follows. First, firms' distribution decisions often prompt examination of the make-or-buy question: Should a marketing activity be performed within the organization by company employees or contracted to an external agent? Second, manufacturers introducing an industrial product to a foreign market face a difficult decision. Should the product be marketed primarily by captive agents (the company sales force and distribution division) or independent intermediaries (outside sales agents and distribution)? Third, the authors develop a theoretical extension to the basic transaction cost model by combining insights from various theories with the TCA approach. Fourth, other such extensions are likely required for the general model to be applied to different channel situations. It is naive to assume the basic model appliesacross markedly different channel contexts without modifications and extensions. Although this study contributes to scholastic research, it is limited by several factors. First, the theoretical perspective of TCA has attracted considerable recent interest in the area of marketing channels. The analysis aims to match the properties of efficient governance structures with the attributes of the transaction. Second, empirical evidence about TCA's basic propositions is sketchy. Apart from Anderson's (1985) study of the vertical integration of the selling function and John's (1984) study of opportunism by franchised dealers, virtually no marketing studies involving the constructs implicated in the analysis have been reported. We hope, therefore, that further research will clarify distinctions between the different aspects of specific assets. Another important line of future research is the integration of efficiency-oriented TCA with organizational approaches that emphasize specific assets' conceptual definition and industry structure. Finally, research of transaction costs, uncertainty, opportunism, and switching costs is critical to future study.

• Journal of Korean Society of Forest Science
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• v.12 no.1
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• pp.31-43
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• 1971

In order to examine the taxonomic difference between the type of Pinus parviflora S. et Z. native to the Dagelet Island and the type of the species introduced to a number of places of the inland of South Korea, investigations on principal characters of needle, cone and seed were made with a hope to obtain informations on the evaluation of the species for possible use in the reforestation program in Korea in the future. Pinus parviflora is belonged to the Sub-genus Haploxylon of Genus Pinus and it has been speculated among dendrologists that this speoies is not monotypic. 308 rendomly selected trees from 8 different elevations of a natural stand of P. parviflora in the Dagelet Island, and 168 trees of P. parviflora growing at 15 different locations of the inland of South Korea were employed as samples along with 300 trees of P. koraiensis as control. The results obtained are summarized as follows: 1. The needle length of the Pinus parviflora of the Dagelet Island is longer than that of the species growing in the inland by 21-35 percent with statistical significancy. (Table 2) 2. In the cross section of needle, no resin canal was observed in about 50-70 percent of the sample trees of the Dagelet Island, whereas the resin canals appearing at external in most cases were observed in all sample trees from the inland. Consequently, the number of resin canals per needle was 0.4-0.9 with the Dagelet Island type and 2.0-2.7 with the inland type and these differences were statistically significant. (Table 3, Fig.2) 3. The Pinus parvviflora type of the Dagelet Island bas yellowish brown cones, and the Pinus parviflora type of Suwon and Kwangyang has redish brown cones. In both the length of cone and the number of cone scale, the difference between the type of the Dagelet Island and the type of the inland was also statistically significant. The cone scales of the Dagelet Island type are slightly opened, whereas the cone scales are widely opened with both of Suwon and Kwangyang type. (Table 4, Fig. 3) 4. the seed color, of the Dagelet Island type is yellowish brown, while it is greyish brown with Kwangyang and Suwon type. In the length and width of seed, the Dagelet Island type showed significantly larger values than that of the inland type. The length of seed was longest with the Kwangyang type being followed by Suwon and the Dagelet Island type in ordar. The seed wing of the Kwangyang type are longer than the seed, while that of the Dagelet Island type is degenerated to be shorter than the seed. (Table 5, Fig. 4) 5. The Pinus parviflora type of the Dagelat Island is similar in many respects to the southern type of Pinus parviflora of Japan except that many has no resin canals in the needle. 6. On the basis of the results obtained in this study, it may be concluded that the type of Pinus parviflora of the Dagelet Island is significantly different from the type of the species introduced to the inland and that there is no recognizable variation between the population of the different altitude of the Dagelet Island and the individual variation within population is also negligible. In the light of the high value of the tree not only as an ornamental tree but as an economical tree, The type of Pinus parviflora of the Dagelet Island is considered to be recommendable to be used for the future reforestation program of Korea.