Australian Journal of Management

The proposed tax on economic rents earned from Australian resources investments is examined from the viewpoint of the economist's neutrality criterion. Proposed by Garnaut and Clunies-Ross (1975, 1977), the Resources Rent Tax is alleged to be neutral in that it is alleged not to inhibit or distort investment behaviour. We show that the proposed tax effectively is a call option on the value created by every individual resources project. By adapting the Black-Scholes (1973) call option valuation formula, we then demonstrate that the effective incidence of the tax depends upon each project's risks, life and viability. Hence, under conditions of risk, the Resources Rent Tax fails the neutrality criterion.

The contemporary leadership theories of Fiedler (LPC Contingency Theory), House (Path Goal, Vroom and Yetton (Decision Making) and Graen (Vertical Dyad Linkage) are commonly viewed as divergent, if not competing. The result is a fragmented leadership literature which contains little theoretical or empirical integration. The apparent diversity of these theories is substantially reduced and their common basic structures revealed if they are reconsidered in the context of a social influence-structure matrix, where social influence is the form or level of subordinate involvement in task matters, and social structure is the context in which managersubordinate interaction takes place.

This paper uses recent data to measure the role of income and relative prices in determining the demand for four types of energy used in transport in Western Australia. The method relies on the construction of Divisia-type indices of the volume and price of energy. The short-term own-price elasticities were found to be quite low with the highest (-0.13) for Motor Spirit. Short-term income elasticities were found to be higher and in the range 0.25 to 0.37.

The job characteristics theory of work motivation claims to provide a basis for redesigning jobs which are narrow in scope and low in motivating potential. This can involve changes in both the job and the control system. The present study uses survey and participant-observer data gathered from the sales forces of 19 organisations to determine whether a simultaneous change at both levels is viable. The results suggest that, while the job characteristics model provides a clear strategy for change, organisations are unlikely to realise the full motivational impact of job enrichment unless the control system is congruent with the job redesign.

The Black-Scholes option pricing model (with approximate adjustments for dividends and exercise price changes) was used to generate stock prices which are “implied” by the model. If the stock market is efficient, these implied prices should not be capable of being used profitably by traders. This hypothesis is tested using prices established in the Australian Options Market and the Sydney Stock Exchange over the period February 1976 to December 1980. A close correspondence is found between implied stock prices and actual stock prices. Tests of the predictive power of the implied prices were unable to discover evidence of market inefficiency. However, a simulated trading strategy executed over one trading day and based on the largest discrepancies between actual and implied prices did meet with some success.

In this paper we examine the cost structure of loans obtained by means of a commercial bill and develop a method for calculating the true cost of borrowing. This true cost is expressed as a nominal rate of interest per annum which duly takes into account all relevant borrowing costs, that is, all those costs which are the direct consequence of having taken out the loan. The analysis deals with the common case of renewing the loan (‘rolling over the bill’) for a second period, and the general case where (n–1) renewals are effected is also described.