Current Business Environment of Pakistan: Opportunities and Challenges
May 08, 2019
The 7th Annual Business Research Conference on Managing Business in Pakistan "Current Business Environment of Pakistan: Opportunities and Challenges” was held on the 26th and 27th of April at the main campus of the Lahore School of Economics.
Dr. Shahid Amjad Chaudhry, the Rector Lahore School of Economics, inaugurated the conference by giving an overview of the current macroeconomic situation of Pakistan. He highlighted the various challenges that the current government had been facing mainly the current balance of payment crisis. He attributed serious fiscal issues related to taxes, the inelasticity of exports, the surge in imports and misplaced trade policy including previously negotiated Pak-China FTA as key factors that had eroded the growth pace of the Pakistani economy. Dr. Shahid Amjad aptly pointed out that strict fiscal adjustments were being made by the incumbent government. These aspects were evident from the restoration of all taxes on mobile phone top-ups. Similarly, both provincial and federal governments were gearing to collect taxes from the agriculturists in order to bolster revenue collection. In this backdrop, he further asserted that it had become imperative to negotiate an optimal deal with the IMF so that the loan adjustments with the international development banks could galvanize the current structural reforms of the present government in the long term.
Read more »Labels: Annual Conference, Lahore School, Managing Business in Pakistan, Research
posted by S A J Shirazi @ 5/08/2019 10:19:00 AM,
Fifth Annual Business Research Conference on Managing Business in Pakistan
April 18, 2017
21 – 22 April, 2017
Abstracts of paper presentations:
Putting Investors First: Awareness of Investor Rights
Mr. Ashraf Bava, CFA, CEO, Nael Capital and President CFA Society Pakistan
Ashraf Bava’s career spans over 21 years with experience in broking and advisory business. He is currently working as the Chief Executive of Nael Capital (Pvt.) Limited. Before setting up Nael Capital he used to work for Elixir Securities, his last assignment at Elixir was as CEO of the firm. He has served on the boards of Karachi Stock Exchange and National Clearing Company of Pakistan Limited in the year 2011. He also chaired the Trading Affairs Committee of the KSE in the same year and is currently the member of Broker Front Office System (BFOS) committee of the Pakistan Stock Exchange and a nominee Director of SECP on the board of Institute of Financial Markets. He is also serving as a member on the Standards and Practice Council of CFA Institute at global level and also volunteering as a grader for the institute. He has also been associated with World Bank Group in the capacity of a consultant. As an active volunteer of the CFA Society Pakistan he has worked in various volunteer positions and is currently serving on its board as President and Advocacy Chair.
Read more »Labels: Annual Conference, Lahore School, Managing Business in Pakistan, Research
posted by S A J Shirazi @ 4/18/2017 04:05:00 PM,
Business Confidence Survey 2015
September 18, 2015
Over the past few years the Pakistani economy has faced a host of challenges and there is a general consensus that economic growth has slowed down significantly. Presently, the Pakistani economy has begun to stabilize and during this time it is critical to develop policies that take into account both the long term economic needs of the country as well as the short term needs of the business community.
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| PHOTO: NNI Via Express Tribune |
In March 2015, Lahore Chamber of Commerce & Industry (LCCI) and the Lahore School of Economics signed a Memorandum of Understanding which established a link between academia and the business community. As part of this collaboration, the Lahore Chamber of Commerce & Industry and the Lahore School of Economics have recently conducted a business confidence survey of firms in order to determine industry specific trends as well as the general macroeconomic trends. The survey was conducted with a variety of firms across three sectors, the manufacturing sector, the services sector and the retail sector, and the results from the survey show that the feeling amongst the business community is cautiously optimistic.
Read more »Labels: LCCI, Managing Business in Pakistan, Pakistan Economy, Research
posted by S A J Shirazi @ 9/18/2015 02:54:00 PM,
Business Confidence Survey
Click here to read (pdf)
Also see in More Magazine, The Nation, Express Tribune and The News
Labels: LCCI, Managing Business in Pakistan, Pakistan Economy, Research
posted by S A J Shirazi @ 9/18/2015 11:20:00 AM,
Managing Business in Pakistan
April 11, 2015
The Third Annual Business Conference on Managing Business in Pakistan was held at the Lahore School of Economics, Main Campus, Burki Road, Lahore. The Conference was opened by Dr. Shahid Amjad Chaudhry, Rector, Lahore School of Economics.
There were three sessions on the first day. The first session was chaired by Mr. Nadeem Naqvi, Managing Director, Karachi Stock Exchange (KSE). It presented some valuable insights about Global Finance, Capital Markets, Investment Opportunities and Valuation Practices in Pakistan. The key note speakers included Mr. Akif Saeed, Commissioner SECP, Dr. Nawazish Mirza from the Lahore School, Mr. Muhammad Sajid from JS Private Equity, and Dr. Imtiaz Ul Haq from LUMS.
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posted by S A J Shirazi @ 4/11/2015 11:19:00 AM,
Managing Business in Pakistan-Challenges and Opportunities
June 02, 2014
Lahore School of Economics Second Annual Business Research Conference concluded on May 31, 2104. The Conference was held at the Lahore School Main Campus in collaboration with CFA Society Pakistan, The Institute of Chartered Accountants of Pakistan, JCR-VIS, PACRA and MAP. The theme of the Conference was “Managing Business in Pakistan-Challenges and Opportunities."
On May 30, 2014, the Conference was inaugurated by Dr Shahid Amjad Chaudhry, Rector, Lahore School of Economics, who welcomed all the speakers and guests. Dr. Amjad Waheed, CFA (CEO NAFA Funds) delivered the key note address with a special focus on the investment alternatives in Pakistan based on the historical performance and future outlook. Dr. Waheed recommended the use of Modern Portfolio Theory and strategic asset allocation process to investment decisions. According to him, this process is based on a three dimensional view of the risk, return and correlation between asset classes. He asserted that the investors should resort to the Capital Protected Strategy if they aim to protect their return against inflation and earn a decent return and substantiated it with attained results.
Labels: Annual Conference, Managing Business in Pakistan, Research
posted by S A J Shirazi @ 6/02/2014 09:07:00 AM,
The effect of management leadership on competitive strategies, manufacturing strategies and firm performance: A case of uncertain environment
May 31, 2014
Shamila N. Khan
Zonaira Shehper
Sana Azar
The purpose of this study was to test the management leadership on competitive strategies with manufacturing strategy and firm performance in an uncertain economy. This paper proposes that management leadership has a strong influence on cost leadership and differentiation that affects the manufacturing strategies (cost, delivery, flexibility and quality) leading to firm performance. Four hundred questionnaires were distributed to the firm operating in an uncertain developing economy. Two hundred and seventy-eight questionnaires were found to be usable. A strong evidence for the leadership relationship with competitive strategies, manufacturing strategies leading to firm performance confirmed the theory.
Thus whether the firm chooses to pursue cost leadership or differentiation strategy, emphasis was found on flexibility to be strongly related to firm performance in an uncertain economy. However, if a firm choses differentiation strategy they need to focus on quality in order to gain market share, profitability and overall competitive advantage.
Shamila Nabi Khan is a Lecturer and PhD scholar at the Lahore School of Economics. She had several publications in journals related to Behavioral Sciences. She has presented in international conferences in Lahore, Paris and Athens and conducted several workshops in Lahore School of Economics.
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Labels: Annual Conference, Managing Business in Pakistan, Research
posted by S A J Shirazi @ 5/31/2014 04:10:00 PM,
Understanding Customer Attributes by merging QFD and Kano Analysis – A Case Study of Private Pump Company in Gujranwala-Pakistan
Mr. Farrukh Iqbal, UCP Business School, University of Central Punjab
Mr. Muhammad Ahmad, Golden Pumps Pvt. Ltd.
Customer satisfaction being the primary goal requires fulfilling the voice of customer, which ultimately dictates the quality of a product or service. This research tends to go ahead of the mere requirements of customers. The main data collection has been done with the help of planning matrix of QFD by highlighting various customer attributes. To understand these attributes various methodologies proposed by (Chan & Wu, 2002) and (Magnusson, Kroslid, & Bergman, 2003) have been adopted. These attributes have been subsequently organized into Kano categories and adjusted with approximate transformation function proposed by (Tan & Shen, 2000). The aforementioned methodologies have been practically implemented in the current case of Private Company in Gujranwala, in which their main product ‘alpha’ has been evaluated. This certainly yields better understanding of Kano Analysis merged with QFD and come up with thought provoking results, conclusions and suggestion for forthcoming researchers.
Farrukh Iqbal is currently working as Assistant Professor in the Division of Information & Operations Management-UCP Business School. His PhD in Engineering Management from UET-Lahore is in progress. He did Metallurgical & Materials Engineering from UET-Lahore in 2004. Inspired by the broad spectrum of Operations and Quality Assurance he rendered services in various National and International organizations. During working, he successfully did Masters in Total Quality Management from University of Punjab Lahore in 2007. In the same year he got scholarship from HEC for MSc. in Quality and Operations Management from Chalmers University of Technology, Sweden. Besides completing his Masters from Sweden, he also did Six Sigma Black Belt and conducted a research on ‘Lean Product Development” in Volvo Technology. He already presented research papers in 13th QMOD conference in Germany and 2nd ICIBM conference in Lahore. His recent research interests comprise of TQM, Lean Production, Six Sigma and Supply Chain Management.
Labels: Annual Conference, Managing Business in Pakistan, Research
posted by S A J Shirazi @ 5/31/2014 04:00:00 PM,
Identifying the issues with Marketing Strategy and Consumer Behavior in a startup firm in Organic food industry in Pakistan: A Case Study of Daali Earth Foods
Tania Hasan, Lahore School of Economics
This live case study has been conducted on a startup entrepreneurial venture that deals in Organic Foods. The study has resulted in discovering a number of issues ranging from a lack of consumer research to determine the profile of a typical customer to finding out the best marketing strategy for the new entrant in the market. Currently the management is unaware of which segment of the market is most suitable and what critical activities should be performed in order to tap that segment. The market study shows us that there is very little awareness amongst the consumers about the difference in Organic and regular food. The perception and awareness about the benefits of organic foods is limited to a small percentage of the society. The management also needs to clearly define its Corporate and Business level strategies before it formulates the Marketing strategy. The management needs to understand the importance of having a clear distinctive positioning and differentiation strategy, to maintain a competitive advantage in the minds of the consumers. The management has not conducted any research to provide answers to these issues and considers the exercise as unnecessary expense. The study also identifies briefly, the issues related to the general Management and operations of a startup entrepreneurial venture dealing in Organic Foods.
Tania Hasan is an MBA from IBA Karachi, majoring in Marketing.She has twelve years of experience in teaching both at undergraduate and graduate level. Currently she is working as a visiting Faculty in Business department at the Lahore School of Economics. She teaches, Marketing Strategy, Consumer Behavior, Marketing Management, Management: policy and practice, Entrepreneurship and Business Communication.
Her major interest is in Positioning Strategies, Consumer Behavior and the effects of various strategies on the minds of the consumer.
Labels: Annual Conference, Managing Business in Pakistan, Research
posted by S A J Shirazi @ 5/31/2014 02:40:00 PM,
Market Orientation, Customer Value Orientation And Firm Performance
Dr Aamir Khan, Lahore School of Economics
Hugh Wilson, Cranfield University
The authors argue that while market orientation leads to firm performance in the products context, it might not be an effective driver of performance in the services context. The authors propose customer value orientation, anchored in customer relationship management (CRM) literature, as a driver of performance in the services context. Results from analysis of a multi-industry dataset show as hypothesized that customer value orientation is associated with performance in the services context, although the possibility that market orientation also plays some role cannot be precluded. The reverse is found in the products context. Implications are discussed for the ongoing debate regarding the difference between services and products, for customer satisfaction research, and for the marketing concept. Managerially, the authors propose market orientation and customer value orientation as a pair of strategies that marketers can help their CEOs choose between or combine depending on the product-service mix that the firm offers.
Dr. Aamir Khan is Associate Professor of Marketing and Organizational Behavior at the Lahore School of Economics. He is also Associate Dean (Executive Education). Dr. Aamir Khan was a Rhodes Scholar at Oxford from 1986-9 where he won Exhibition and Open scholarships, and where he obtained a First Class in French literature. He also has a PhD in Marketing from Cranfield University (UK), an MSc in Management from INSEAD, an MSc. in Sociology from Oxford, an MBA from CEIBS and a BSc in Electrical Engineering from UET. He was a University Lecturer in Marketing at Cranfield and later Associate Professor at SDSB LUMS where he was also Faculty Director of Rausing Centre. His research interests have revolved around market orientation and customer value orientation, whereas his teaching interests include marketing management, brand management, and organizational behavior. He has taught extensively at the PhD, EMBA, MBA and undergraduate levels. He has also taught a large number of executives in Lahore, Karachi, Dubai and the UK. He has trained faculty in many places including Jakarta. He speaks fluent French and Chinese. His interests include 19th century novels as well as international relations.
Labels: Annual Conference, Managing Business in Pakistan, Research
posted by S A J Shirazi @ 5/31/2014 02:30:00 PM,
Effect of Tenure on Organizational Identification (OID) and the Subsequent Role of OID in Fostering Readiness for Change
Imran Hameed
Olivier Roques
Ghulam Ali Arain
This empirical study investigates the curvilinear moderating effects of organizational tenure on the relationships between two status evaluations, that is, perceived external prestige (PEP) and perceived internal respect (PIR), and organizational identification (OID). This study validated the components of group engagement model in South Asian context, which highlighted the significant difference in the effects of status evaluations on OID. The importance of OID in the development of employee’s readiness for change is also explored and tested. Survey method was used for collection of data from Pakistan. The results supported all the hypothesized relationships. This is one of the few studies which have explored the potential effects of organizational tenure on identification process, and tested the relationship between OID and readiness for change.
Imran Hameed is an assistant professor of human resource management in the division of Management and Organziation, UCP Business School, Lahore (Pakistan). He holds a PhD degree in management sciences (HR) from Aix Marseille University, France. His research interests include organizational identification, organizational change, psychological contracts, and employee performance behaviors.
Olivier Roques (PhD) is an associate professor of human resource management in the Institute of Business Administration (IAE) of Aix Marseille University (France) where he is director of the HR master Program. His research interests include stress at work, COR theory, illiteracy in the workplace, justice, psychological contract, careers transitions and social support.
Ghulam Ali Arainis an assistant professor of human resource management in the department of business administration of Sukkur Institute of Business Administration (Pakistan). He holds a PhD degree in management sciences (HR) from Aix Marseille University, France. His research interests include employee psychological contracts, trust, emotions at work, and employee performance.
Labels: Annual Conference, Managing Business in Pakistan, Research
posted by S A J Shirazi @ 5/31/2014 12:50:00 PM,
Exploring the relationship between corporate governance and firm performance in Pakistan
Dr Zahid Riaz, Lahore School of Economics
Dr Ali Murad, UCP Business School
This paper explores the relationship between corporate governance aspects and firm performance of Karachi Stock Exchange (KSE) 100 index firms from years 2007 to 2011. Firm board size, board independence, board leadership (separate role of CEO and Chairperson and presence of family CEO), independence of audit committee and institutional ownership are considered by focusing on agency theory and resource dependency theory in the Pakistani context. We found that there is a negative association between board independence and firm performance. For board leadership, we have found mixed results. This research is an ongoing research project and additional data will be gathered to understand the unique impact of board leadership in the context of the Pakistani family and non-family listed firms separately. Similarly, the negative association between institutional ownership and firm performance implies the stronger role of family oriented governance mechanism in the top performing firms of Pakistan. This research noticeably explains that the measures of corporate governance established in capitalistic countries are relevant in developing countries like Pakistan to an extent. The unique institutional and economic structures of Pakistan demand indigenous solutions to its indigenous problems of corporate governance. Furthermore, for policy makers, the findings imply that the policies should be made by keeping in view the Pakistani business context. The policy makers should actively engage with business leaders to benchmark such corporate governance practices which are more relevant and indigenized for the Pakistani business and economy.
Zahid Riaz obtained his PhD and MPhil degrees from Australian School of Business, University of New South Wales, Sydney, Australia. Also, he has completed his MBA and BBA (Honours) from Institute of Business Administration (IBA), Karachi, Pakistan. He has more than 10 years of teaching, research and professional experiences in both national and international settings. Currently, he is serving as Assistant Professor at the Faculty of Business Administration, Lahore School of Economics, Pakistan. Also, he is visiting research fellow at the School of Management, Australian School of Business, University of New South Wales, Australia. His research and teaching interests include corporate governance, director and executive remuneration, corporate social responsibility and international business.
Dr. Ali Murad Syed has completed his PhD and MPhil from University of Paris, France, and MBA from University of Management and Technology, Pakistan. Moreover, he has done Civil Engineering from University of Engineering and Technology, Pakistan. He has worked with Prof. Esther Jeffers as a Research Associate and doctoral student at laboratory of LED, University of Paris 8. His PhD dissertation encompasses ethics, socially responsible investments and perception of French and the UK managers. His research interest is in the area of Investment Strategies, Risk Management, Social Responsible Investments, Behavioral Finance and Corporate Governance. He has presented his research work at several national and international conferences.
Labels: Annual Conference, Managing Business in Pakistan, Research
posted by S A J Shirazi @ 5/31/2014 12:00:00 PM,
Social compliance of exporting companies in Pakistan: The role of internal and external factors
Muhammad Shakeel Sadiq Jajja
Muhammad Asif
Frank Montabon
Kamran Ali Chatha
Based on the institutional theory and organizational culture perspectives, this paper presents a research framework which argues that the impact of institutional pressures from buyers, competitors, and regulators on social compliance of suppliers is moderated by supplier’s organizational culture. The paper categorizes institutional pressures into normative, mimetic, and coercive pressures and defines organizational culture as a function of external focus and flexibility. An appropriate organizational culture reinforces the impact of an institutional pressure on supplier’s social compliance. Previous research provides the backdrop for developing a research questionnaire to collects data from suppliers of international companies in Pakistan to test the research framework.
Muhammad Shakeel Sadiq Jajja (ssj@lums.edu.pk) Assistant Professor, Suleman Dawood School of Business, Lahore University of Management Sciences, Lahore, Pakistan
Muhammad Asif, Assistant Professor, College of Business Administration Prince Sultan University, Riyadh, Saudi Arabia
Frank Montabon, Associate Professor, Iowa State University College of Business, Iowa State University, Iowa, USA
Kamran Ali Chatha, Associate Professor, Suleman Dawood School of Business, Lahore University of Management Sciences, Lahore, Pakistan
Labels: Annual Conference, Managing Business in Pakistan, Research
posted by S A J Shirazi @ 5/31/2014 11:30:00 AM,
Innovation and Firm-level Productivity: Evidence from Pakistan
Dr. Abdul Waheed, UCP Business School
The labor productivity impact of innovation of manufacturing firms in Pakistan has been a neglected field of studies compared with the developed world. This topic is studied in this paper by using World Bank Enterprise Survey data from 2006. We applied the Cobb-Douglas production function, augmented with innovation-related inputs (and other expected sources of productivity) in a simultaneous two-equation system connecting innovation output to its determinants and productivity to innovation output – after correcting for the bias attributable to the endogenous nature of innovation output. Our results reveal that although both product and process innovation have significant, positive effects on productivity of all firms, Pakistani firms rely more on traditional production factors (labor and capital) than innovation, for productivity enhancement.
Dr. Abdul Waheed is assistant Professor at the Business School of the University of Central Punjab, Lahore, Pakistan. He obtained his PhD degree from United Nation University (UNU-MERIT) and School of Business and Economics of Maastricht University, the Netherlands. He also earned MSc in Econometrics from Tilburg School of Economics and Management of Tilburg University, the Netherlands and MSc in Statistics from Punjab University, Pakistan. He has 14 years of teaching and research experience in various national and international organizations. Abdul Waheed presented his research contributions in many national and international conferences such as International Symposium on Entrepreneurship and Innovation, Venice, Italy, DRUID Society Conference at Copenhagen Business School, Copenhagen, Denmark, WASET Conference on Innovation, Management, and Technology, Zurich, Switzerland, 27th Annual General Meeting and Conference, Pakistan Institute of Development Economics, Islamabad, Pakistan.
Labels: Annual Conference, Managing Business in Pakistan, Research
posted by S A J Shirazi @ 5/31/2014 10:45:00 AM,
E-Entrepreneurship in Pakistan: Opportunities and Challenges
Dr. Rizwan Ahmed, Lahore School of Economics
Ecommerce has been promoted across the globe as one of the key enablers for youth entrepreneurship and employment. Despite a favorable internet and mobile demographics and increasing ecommerce adoption, Pakistan’s ecommerce market size remains tiny compared to other similar countries. There are strong reasons, supported by facts, to believe that Pakistan is at the brink of an explosive growth in ecommerce, should an enabling environment be provided. We conducted a qualitative study with 10 e-entrepreneurs to explore the factors hindering ecommerce growth in Pakistan. We identify that the absence of institutions and trade bodies to support and promote ecommerce, lack of applied and market research, lack of capacity building and training in ecommerce, and absence of e-payment gateways are main stumbling blocks that are hindering ecommerce growth in Pakistan. We could not find any national ecommerce policy or strategy developed by government or any independent agency in Pakistan for ecommerce growth. We suggest that development of a rational ecommerce policy based on field data and ground realities; and effective implementation of such policy has a pivotal role in providing the enabling environment for ecommerce growth. Therefore, we propose an in depth inquiry into the nature and size of ecommerce market in Pakistan, based on which ecommerce policy guidelines should be developed for ecommerce growth in Pakistan. Should an enabling environment be provided for ecommerce growth in Pakistan, a huge opportunity for youth and female entrepreneurship and employment can be created.
Dr. Rizwan Ahmed is an Assistant Professor in the Faculty of Business Administration at Lahore School of Economics. Prior to this he was the HoD of Information and Operations Management Division at UCP Business School. He holds PhD in Business Process Modeling and Simulation from University of Hertfordshire UK, and MSc. and BS in computing. Dr. Rizwan has over 10 years of academic and industry experience in Pakistan and the UK. He held research and academic positions at University of Hertfordshire, UK and University of Teesside, UK where he has been involved in major applied projects in collaboration with the industry. He has also been a visiting research fellow at Warwick Business School and University of Nottingham, UK. Dr. Rizwan has also worked as a management consultant at Lanner Consulting UK. In his consulting and research capacity, he has worked with the companies like British Telecom, British Airways, IBM, Rolls Royce, Lockheed Martin, and Siemens. He has also been pivotal in a project funded by the UK Department of Trade and Industry aimed at improving and reengineering the production processes of precast concrete industry in the UK. Dr. Rizwan Ahmed currently teaches courses related to Operations and Supply Chain Management to post-graduate and undergraduate classes at LSE. His previous teaching assignments include, Operations Management, Supply Chain Management, Project Management, Management Information Systems, and Systems Analysis and Design, and E-Marketing and Social Media. Dr. Rizwan has published in leading academic leading journals such as Journal of Operational Research Society, Journal of Simulation, and International Journal of Knowledge Management. His research interests fall in the areas of business process reengineering, supply chain management, e-commerce, and knowledge management.
Labels: Annual Conference, Managing Business in Pakistan, Research
posted by S A J Shirazi @ 5/31/2014 09:30:00 AM,
Beyond a dichotomous depiction of formal and informal sector entrepreneurship: a degrees of informalisation approach
Muhammad S. Shahid, Lahore University of Management Sciences, Lahore, Pakistan
The aim of this paper is to transcend the dominant dichotomous depiction of formal and informal sector entrepreneurs as separate and discrete groups by rereading entrepreneurs as existing on a spectrum from wholly formal to wholly informal. To apply this degree of (in) formalization approach in order to advance debates about informal sector entrepreneurship, a 2012 survey is reported of 300 entrepreneurs in Pakistan. Evaluating what influences the degree of (in) formalization of entrepreneurs, the finding is that lower levels of formalization are strongly associated with younger and less educated entrepreneurs and those concerned about public sector corruption, high taxes and have resentment towards the government. The paper concludes by calling for a move beyond discussing informal sector entrepreneurs as a separate category to formal sector entrepreneurs and for the adoption of a degrees of in formalization approach and explores the theoretical and policy implications of adopting such an approach.
Dr. Muhammad Shehryar Shahid is an Assistant Professor of Entrepreneurship at Suleman Dawood School of Business at LUMS and is also a leading member of the Entrepreneurship Working Group at the university. He has a doctorate degree from the University of Sheffield, UK in the area of Entrepreneurship. He has been educated from the Lahore University of Management Sciences (LUMS), Ghulam Ishaq Khan Institute of Engineering Sciences and Technology (GIKI) and Aitchison College, Lahore. Previously, he has served as the Head of Management and Organisation Division and the Director of Centre for Entrepreneurship and SMEs (CESME) at the University of Central Punjab. He has taught courses, like Entrepreneurship, Business Model Development, Lean Launchpad and SME Management at both undergrad and postgrad level. His research interests are in the areas of informal entrepreneurship, small business growth and entrepreneurial intentions.
Labels: Annual Conference, Managing Business in Pakistan, Research
posted by S A J Shirazi @ 5/31/2014 09:00:00 AM,
Corporate Governance and Financial Reporting Quality in Pakistan
May 30, 2014
Muhammad Arshad Hasan, Lahore School of Economics, Pakistan
Dr. Doaa Aly, University of Gloucestershire, United Kingdom
Financial statements are the principal medium used by the firms to communicate with the capital market participants who need to believe in the quality of information provided in these statements to make their economic decisions. Corporate governance is the mechanism that ensures the quality and improves the transparency in financial reporting. Board composition and ownership structure are the major instruments of the corporate governance mechanism. The purpose of this study is to examine the impact of these corporate governance mechanisms on the quality of financial reporting in Pakistan. A sample of 50 companies from all sectors of the economy listed on the Karachi Stock Exchange (KSE) is drawn, to be studied for a period of five years from 2008 to 2012. The average of the two measures, Collins and Kothari (1989) and McNichols (2002), is used as a proxy for financial reporting quality. The empirical results show that the Pakistani firms are characterized by the larger board size, the lesser board independence and the higher level of ownership concentration and institutional ownership. However, the impact of these corporate governance attributes on the quality of financial reporting has shown mixed results. The institutional ownership has revealed significant positive relationship, whereas the board size, board independence and ownership concentration are irrelevant to the quality of accounting information. As far as the firms’ characteristics are concerned, the firm size has significant negative, while firm leverage and growth opportunities have no influence on the quality of financial reports in Pakistan.
Mr. Arshad Hasan is Chief Financial Officer and Assistant Professor of Accounting at the Lahore School of Economics. He is an associate member of the Institute of Chartered Accountants of Pakistan (ICAP) and Institute of Cost & Management Accountants of Pakistan (ICMAP). Mr. Hasan has over 15 years of diversified experience of the Financial Operations and Management. Before joining Lahore school, he has worked with National Database and Registration Authority, Prime TV Channel and S.M. Masood & Company Chartered Accountant. Areas of interest include Financial Reporting, Corporate Governance, Tax Planning, Risk Management and Project Appraisal.
Dr. Doaa Aly is Senior Lecturer in Accounting at the University of Gloucestershire. She has passed the CPA exam in USA, and was awarded her PhD and a research diploma from Hull University. Doaa’s research interest is in accounting reporting and disclosure. In particular, she is interested in investor relations, corporate governance and auditing. She is a member of the Investor Relations Society in London and a member of the British Accounting Association. She has worked in different international educational institutions such as Hull University, the Centre for Adult and Continuing Education, The American University in Cairo and Faculty of Becker Professional Review.
Labels: Annual Conference, Managing Business in Pakistan, Research
posted by S A J Shirazi @ 5/30/2014 05:04:00 PM,
Earnings Management through Deferred Taxes recognized under IAS 12 - Evidence from Pakistan
Happening Now
Abdul Rafay, FCA
Mobeen Ajmal, University of Management Technology
The paper is aimed at examining the earnings management through deferred taxes calculated under IAS 12. Atwood et. al. (2010) found that the book-tax nonconformity leads to better earning quality and higher association of earnings and future expected cash flows. Different components of deferred tax line items reverse the tax effects at different times. As per Wong et. al. (2011) such component wise partial allocation is more value relevant than the comprehensive figure of deferred tax. Pakistan is one of the pioneer implementers of IFRS. Our hypothesis is that in Pakistan components of deferred tax disclosed under IAS 12 provide value relevant information to equity investors. We have divided the deferred tax components in three categories, those arising from operational activities, investing activities and financing activities. These activities are further sub-divided to ensure that no value relevant component was aggregated with a non-value relevant component that leads to information slacks. Our sample includes data from 2009 to 2013 of Shariah compliant companies indexed in KMI-30. We find that deferred tax line items in Balance Sheet are reflected in market prices. Also investors treat differently deferred tax line items arising from operating, financing and investing activities. Furthermore the value relevance is dissimilar for different components of deferred tax. Some, like unabsorbed losses, are negatively associated while others like depreciation/amortization are almost value irrelevant. The paper would help understand the significance of deferred taxes in equity valuation and the possibility of earnings management with respect to deferred taxes. There is a significant need for such a paper as no work has been done regarding this in Pakistan or even in any other country that has adopted IFRS.
Abdul Rafay is a Fellow member of Institute of Chartered Accountants of Pakistan. Since 2001, he is a life time member of Lahore Tax Bar Association. He served as Co-regional Director (Founding) of Lahore/Islamabad Chapter of Professional Risk Managers International Association (PRMIA), Washington, USA (2011-2013). In 2012, he was nominated as Member: Education & Training Committee (ETCOM) of The Institute of Chartered Accountants of Pakistan (ICAP). He is REDC Alumni of Lahore University of Management Sciences (LUMS). Recently his name is included in the list of "Certified Directors" as per Clause (xi) of The Code of Corporate Governance 2012 issued by Securities and Exchange Commission of Pakistan (SECP).
Mobeen Ajmal is a lecturer in School of Business and Economics at University of Management and Technology, Lahore. He received his MBA degree at Lahore University of Management Sciences with distinction. His research interests include Risk Management, Taxation and Financial Modeling.
Labels: Annual Conference, Managing Business in Pakistan, Research
posted by S A J Shirazi @ 5/30/2014 04:40:00 PM,
The Tax Base
Jalal Ahsan, FCA
The Pakistanis are the most heavily, rather over-taxed, people in the entire South Asia--not only total taxable population but million of those having below taxable income are paying taxes at source, but not claiming refunds by filing of returns. In most of the cases, the tax deducted is the full and final discharge of liability. Section 115(4) of the Income Tax Ordinance, 2001 says that this class of taxpayers is only required to file statements and not regular returns. Since only a fraction of taxpayers file returns or statements, a wrong impression exists that our income tax base is narrow. According to Pakistan Telecommunication Authority (PTA), there were 118 million mobile users in Pakistan as on 30 June 2012. A huge population, not less than 60 million (if we exclude multiple and inactive subscribers), paid both 10% income tax and 19.5% sales tax for using this facility in 2011, but only 513,044 individuals filed income tax returns. Federal Board of Revenue (FBR) did not bother to issue notices to them after utilizing data available with the service providers. Majority of the mobile users might not have taxable income yet they never bothered to claim the tax withheld back by filing tax returns If Pakistan has 10 million individuals having taxable income of Rs.1.5 million (a very conservative estimate), total income tax collection from them should have been Rs.3750 billion. If we add income tax collected from corporate bodies, other non-individual taxpayers and individuals having taxable income up to Rs.1,000,000, the gross figure would be nearly Rs.5000 billion. FBR collected only Rs.716 billion as income tax in fiscal year 2011-12 showing a whopping gap of Rs.4984 billion in income tax alone.
Mr. Jalal Ahsan, FCA specializes in Income Tax / Sales Tax planning preparation of returns. He carried out audits of listed and non listed companies and development of accounting systems. He has also represented clients in signing of acquisitions, non competition, trademarks, royalty and technical agreements.Mr. Ahsan has also served as a nominee of Chairman, National Accountability Bureau in the Reconciliation Committee of the State Bank of Pakistan.
Labels: Annual Conference, Managing Business in Pakistan, Research
posted by S A J Shirazi @ 5/30/2014 04:40:00 PM,
Corporate Governance Practices in Pakistan
Abdul Rahim Suriya, FCA, FCMA
Corporate Governance is about promoting Corporate Fairness, Transparency, Accountability, Legal Compliance and Ethical conduct. Economic crisis, strict regulations and rising concerns over transparency, accountability have increased the focus on both ‘the role of the Board’ and ‘its effectiveness in executing its responsibilities’. The corporate sector in Pakistanhas had its fair share of corporate failures, scams and scandals. This warranted the need of a proper code of corporate governance. This paper will review the practices that have been adapted in Pakistan and their evolution over time.
Mr. Abdul Rahim Suriya is the fellow member of ICAP and ICMAP. He is also the past President of ICAP, council member of ICAP for 16 years, Member of International Education Board of IFAC for 6 years and member SAFA Board from 2011 to 2013. He authored a book on “A Guide to Business Decision Making. A is visiting faculty member of IBA and a trainer on Corporate Governance and Finance for Non Finance Executives.
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posted by S A J Shirazi @ 5/30/2014 03:00:00 PM,
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