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Revista Amfiteatru Economic Anul VIII. Nr. 19 Februarie 2006 Aparitie semestriala Colegiul de redactie Redactor-sef: Vasile Dinu Redactor-sef adjunct: Puiu Nistoreanu Secretar general de redactie: Ion Stanciu Redactori: Gabriela Stanciulescu, Adriana Pietrareanu, Rodica Pamfilie, Laurentiu Tachiciu, Dan-Laurentiu Anghel, Bogdan Onete, Sorin-George Toma, Alexandru Nedelea, Cristinel Vasiliu. Consiliul stiintific Prof. univ. dr. Ion Gh. Rosca, Academy of

Economic Studies, Bucharest Prof. univ. dr. Viore l Lefter, Academy of

Economic Studies, Bucharest Prof. univ. dr. Ion Stancu, Academy of Economic

Studies, Bucharest Professor Ph.D. Daniel A. Glaser-Segura, Our

Lady of the Lake University, San-Antonio, Texas

Associate Professor Ph.D. Aaron Ahuvia, University of Michigan-Dearborn

Professor Ph.D. Abraham Pizam, Rosen School of Hospitality Management, University of Central Florida, Orlando, Florida

Assistant Professor Ph.D Daniel Stavarek, Silesian University, School of Business Administration, Karvina

Ph.D. Yankov (Nicolov) Nicola, Tsenov Academy of Economics, Svishtov

Professor Ph.D.Carlos Costa, Universidade de Aveiro

Associate Professor Ph.D. Cerovic Slobodan, Faculty of Natural Sciences, Belgrad

Associate Professor Ph.D. Peev Gueorgui, New Bulgarian University, Sofia

Chief Assis t Professor Ph.D. Vanya Banabakova, National Military University, Veliko Turnovo

Ph.D. Petrovska Mircevska Tatjana, University St. Cyril and Methodius, Skopje

Teaching Assistant Djucik Maja, Faculty of Economics, Belgrad

Lecturer Ph.D Klodiana Gorica, University of Tirana, Faculty of Economics

Lecturer Dr. Babu P. George, Pondicherry University

Lecturer Ph.D. Olga Blinkova, Karazin Kharkiv National University, Kharkiv

Professor Ph.D. Jonathan R. Edwards, Bournemouth University, Poole

Conf. univ. dr. Vasile Dinu, Academy of Economic Studies, Bucharest

Conf. univ. dr. Puiu Nistoreanu, Academy of Economic Studies, Bucharest

Prof. univ. dr. Traian Surcel, Academy of Economic Studies, Bucharest

Prof. univ. dr. Rodica Milena Zaharia, Academy of Economic Studies, Bucharest

Prof. univ. dr. Marius Pop, Facultatea de Stiinte Economice Cluj-Napoca

Comisia de referenti Ph.D. Renata Tomljenovic, Institute for Tourism, Zagreb Ph.D. Cerovic Slobodan, Faculty of Natural Sciences, Novi Sad Ph.D. Daniel Stavarek, Silesian University, School of Business Administration, Karvina Ph.D. Yankov Nicola, Tsenov Academy of Economics, Svishtov Ph.D. Babu George, Pondicherry University, Pondicherry Ph.D. Dimitar Eftimovski Faculty of Economics, European University, Skopje Ph.D. Nicolae Lupu, Academy of Economic Studies, Bucharest Ph.D. Adriana Corfu, Instituto Politecnico de Viana do Castelo, Escola Superior de Tecnologia e Gestao,

Aveiro

Proprietar Academia de Studii Economice din Bucuresti Facultatea de Comert Editura Editura ASE Piata Romana, nr. 6, sector 1, Bucuresti, România cod 701731 Telefon: 021/211.26.50/146 E-mail: [email protected] www.ase.ro Revizie text Adriana Pietrareanu Carmen Negroiu Liliana Matei – redactor sef, Editura ASE Tehnoredactare si conceptie grafica: Carmen Negroiu Oana-Mihaela Morariu Violeta Rogojan – Editura ASE Coperta – Neagu Romica ISSN 1582-9146

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CONTENTS

5 55 Years of Commerce at A.S .E. - Bucharest Conf. univ. dr. Dinu Vasile

I. Economic Interferences

9 Management and Marketing of Transborder Region Integration Process Assoc. Prof. Nicola Yankov, Ph.D.

18 Supply Chain Management and the Romanian Transition Daniel A. Glaser-Segura, Ph.D. Laurentiu Dan Anghel, Ph.D. Jack E. Tucci, Ph.D.

27 Some Basic Skills for Successful Personal Sales Chief Assistant Professor Vanya Kuzdova Banabakova, Ph.D.

34 Exchange Market Pressure Before Entering the ERM II: the Case of Central European Countries Assistant Professor Ing. Daniel Stavarek, Ph.D.

40 Ways of Implicating More Actively for the Consumers’ Associations in Promoting and Defending Consumer’ Rights Conf. univ. dr. Vasile Dinu

46 Insights in Internationalization of Tourism Firms Lecturer Ph.D. Adriana Corfu Conf. univ. dr. Puiu Nistoreanu

52 The Role of Critical Thinking, Academic Entrepreneurship and Talent in the Economic Development Lector univ. dr. Nela Popescu

59 Activity-Based Costing for Better Cost Management K. Mohan Lecturer Babu P. George, Ph.D.

68 Management of Tourist Companies on the Modern Tourist Market Slobodan Cerovic, Ph.D.

80 The Low-Cost Technology of Struggle Against Desertification in Oman Olga Blinkova, Ph.D. Mykola Yarovyi Oleg Skliar

85 The Role of Informati on for Global Marketing – Educational and Practical Aspects Tatjana Petkovska Mirchevska, Ph.D.

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91 The Process of Decentralization in Bulgaria and the Necessity of Introducing Regional Self-Government Assistant Professor Yuliyana Chavdarova Galabinova

100 The Informational System in the Enterprises of the South-East Europe Prof. dr. Karolina Ilieska

107 Community-Based Tourism: the Case of the Butrint National Park, South Albania Gorica Klodiana, Ph.D. Franka Paloka

114 The Role of the Foreign Capital in the Integration Process of Republic of Macedonia M.Sc. Diana Boskovska

122 Defining Management for the Twenty-First Century Conf. univ. dr. Sorin George Toma

II. Institutions, Personalities, Events 126 The Chamber of Commerce and Industry of Romania

Conf. univ. dr. Puiu Nistoreanu

128 Nicolae N. Constantinescu (1920-2000) Conf. univ. dr. Puiu Nistoreanu

130 55 Years of Permanent Functioning of the Faculty of Commerce - Breviary Conf. univ. dr Lupu Nicolae

III. „Amfiteatru Economic” recommends

137

GOOD PRACTICES Food Quality and Safety: Practices and Contributions Brought by the Centre of Research and Alimentary Product Expertise Prof. univ. dr.Pamfilie Rodica Lector univ. dr. Paunescu Carmen

141

143

BOOKS AND PUBLICATIONS An Exceptional Book Prof. univ. dr. Nora Tomosoiu Pericle Uidumac Economy Informatics Lector univ. dr. Stoica Marian

144 WEB-SITES

La vârsta deplinei maturitati The age of full maturity

55 YEARS OF COMMERCE AT THE ACADEMY OF ECONOMIC STUDIES (A.S.E.) – BUCHAREST

(55 ani de Comert la A .S.E. – Bucuresti)

Conf. univ. dr. Dinu Vasile Redactor-sef

Toate aniversarile -s frumoase,

mai ales când sunt încununate de împliniri. Asertiunea este valabila întru-totul si în ce priveste Facultatea de Comert care împlineste în aceasta primavara 55 de ani. Mentionam însa ca elemente ale ascendentei sale duc la concluzia ca, de fapt, învatamântul superior comercial are chiar vârsta Academiei de Studii Economice din Bucuresti – 93 de ani.

De asemenea, pentru cei care au exercitiul istoriei institutiilor economice românesti, un argument este si faptul ca intre Facultatea de Comert si A.S.E. exista o legatura intrinseca, deoarece prima denumire a institutiei tutelare a fost Academia de Înalte Studii Comerciale.

Asadar, anul universitar 1951-1952 marcheaza constituirea Facultatii de Comert, ea afirmându-se de atunci ca principala institutie de pregat ire a generatiilor din acest domeniu în tara noastra. Germenii ei au aparut la început de secol XX din ratiuni de economie de piata, iar astazi, dupa nenumarate meandre istorice, a ajuns iarasi sa raspunda exigentelor economiei de piata.

Astfel, în ciuda numeroaselor transformari, care nu toate au fost pozitive, suferite de-a lungul timpului, activitatea facultatii a

All anniversaries are beautiful especially when it is crowned by accomplishments. The statement is absolutely true when we think about the Faculty of Commerce which celebrates 55 years this spring. We mention that its ascending line leads to the conclusion that, in fact, the superior commercial education has the exact same age as the Academy of Economic Studies in Bucharest – 93 years. For those who have the exercise of the Romanian economic institutions the reason is also the fact that between the Faculty of Commerce and ASE there is an intrinsic link because the first name of the latter was the Academy of High Commercial Studies. Therefore, in the university year 1951-1952 the Faculty of Commerce was set up, being ever since the main institution for education in this field. Its germs came out at the beginning of the 20th century due to the market economy and nowadays, after many historical meanders, it’s again able to respond to the market economy exigencies. Thus, in spite of many changes, not all of them positive ones, the faculty activity has made progress, has held out

progresat, a rezistat în timp „intemperiilor” vremurilor de tot felul. Aceasta s-a datorat faptului ca a fost întemeiata pe principii strict stiintifice de catre fondatorii ei, apoi sustinuta si condusa cu devotament, probitate si întelepciune de eminenti dascali.

Putem, de aceea, afirma cu îndreptatire ca Facultatea de Comert are acum o personalitate distincta si o imagine pe masura în învatamântul superior economic al tarii, cât si peste hotare. Din acest motiv putem sa sustinem ca prestigiul A.S.E. din Bucuresti se datoreaza, într-o masura însemnata, si calitatii deosebite a activitatilor care au loc la catedrele si în laboratoarele sale cu generatii si generatii de studenti. Multiple opere stiintifice – carti, studii, articole, lucrari de cercetare -, elaborate în cadrul facultatii de-a lungul timpului, au intrat deja sau vor fi integrate în viitor în tezaurul stiintific al multor biblioteci universitare si nu numai, din tara si din lume.

55 de ani ai facultatii aniversate, este o vârsta a maturitatii depline care sedimenteaza dar si promoveaza realizari marcante ce îi asigura un prezent de prestigiu si un viitor pe masura.

Revista Amfiteatru Economic ureaza Facultatii de Comert sa se patrunda, ca si pâna acum, de lumina si spiritul plin de seve ale unei primaveri aniversare perpetue.

La multi ani!

against bad times. This was possible thanks to the fact that it had been founded on strict scientific principles and afterward supported and run with devotion, integrity and wisdom by remarkable men of education. We can therefore state that, at present, the Faculty of Commerce has a distinct personality in the higher education field both at the national level and abroad. That’s why one can say that the prestige of A.S.E. Bucharest is due, in a significant part, to the special quality of the activities developed in its laboratories and departments. A lot of scientific works – books, studies, articles, research – thought out in the faculty for years have already entered or will enter a future scientific thesaurus of many university libraries in our country and abroad.

55 years for the celebrated faculty mean the age of a full maturity that can create sedimentation and also can promote remarkable realizations to give it an impressive present and to ensure it an imposing future.

The magazine ,,Amfiteatru Economic” wish the Faculty of Commerce to be imbued with the light and the spirit full of vigours of an everlasting anniversary spring.

Long it live!

AE Economic Interferences

Nr. 19 ? Februarie 2006 9

MANAGEMENT AND MARKETING OF TRANSBORDER REGIONAL INTEGRATION PROCESS

Assoc. Prof. Nicola Yankov, Ph.D. D. Tsenov Academy of Economics, Svishtov

[email protected]

Abstract

The paper’s intention is to deal with the issue of the comprehensive integration within and outside transborder regions of Bulgaria and Romania. The author presents some basic principles of internal and external integration of small, medium sized and large transborder regions. The accent is put on particular cases.

An integration methodology is suggested to be used for the conceptualization and development of the co-integration process. Another aspect of the paper is the presentation of models for regional integration of real territorial entities from Bulgarian perspective.

Some of the problems of marketing of the transborder formation and development are the third aspect of the article.

Keywords • Transborder regions; • Transborder integration

processes; • Meridian integration axis.

Rezumat

Intentia noastra este sa tratam problema întelegerii integrarii în interiorul, dar si în afara regiunilor transfrontaliere ale Bulgariei si României. Prezentam câteva principii de baza în ce priveste integrarea interna si externa pentru regiunile transfrontaliere de marime mica, medie si mare. Punem accentul pe cazuri particulare.

Sugeram sa se foloseasca o metodologie a integrarii pentru conceptualizarea si dezvoltarea procesului de co-integrare. Un alt aspect îl constituie prezentarea modelelor de integrare regionala a entitatilor teritoriale din punct de vedere al Bulgariei.

Al treilea aspect prezentat se refera la unele dintre problemele de marketing pentru formarea si dezvoltarea transfrontaliera.

Cuvinte cheie

• Regiuni transfrontaliere; • Procese de integrare

transfrontaliera; • Axa integrarii.

1. The methodological aspects of the transborder regions integration

The formation of the Pan-European

Union possesses various dimensions. One of them is the regional dimension, which has to be conceptualized not only by the European planning bodies and the respective countries, but also by the real

objects of the integration process – the regions themselves. The basic thesis is that the coordinated, joint, comprehensive and mutual development of the closest territories will bring synergetic and increasing effects. The final goal is vertical and horizontal building-up of the European Union of the 27th nations.

As a whole, the European integration process aims to “open”

separated until now countries, to allow mutual market penetration, to start the

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Amfiteatru Ec onomic 10

melting of the state borders to a commonly agreed degrees and in the spirit of the Pan European ideas.

Transborder regional integration has to be a well-directed process. It has to include balanced initiatives both from “up-down” and “down-up”. The integration process could be or accidentally happened, or goal oriented. It requires not only action on the level of transborder region as a whole but also well-coordinated local initiative.

In the integration process, a holistic approach has to combine two directions: a) from “general to local” + from “local to general”; b) from “general to particular” (or from “particular to general”). In this regard, the integration process could start both from governmental initiatives and/or from local initiatives.

Now it is necessary to conceptualize the trajectory: from activities for development, integration of small euro regions toward s activities for the integration of medium sized integrated transborder regions. In the future, they have to interact more and more actively. On the other hand, integration process includes the formation and the development of medium class regions and afterwards their integration in higher-class regions. That trend is in the agenda in many Balkan countries. This process has not only to be studies and modeled, but also predicted. (“and” to be excluded)

In this frame, one of the integration priorities is the forming various classes of interstate (and transborder) regions. For the accomplishing of the process, first it has to be determined their role and meaning for the Pan European social and market space as connecting (logistic) network, the EU as a whole. After this action, the transborder regions have to be conceptualised with various activities such as analysing, modeling, strategizing and planning.

A transborder region (TBR) has obligatory components, some of which could be considered as parts of the territories of the two (or three) countries, linking infrastructure, linked networks of business and non-business oriented organizations, jointly working organizations of the citizens’ society etc.

The new paradigm of the integration has to be based not on the “devide et empera” principle, but on the principle “integrate and manage as a whole of already integrated territories, knowledge, skills for using the given potential, specific local prerequisites and facts (datum) etc. Afterwards there has to be included the transfer and the usage of that managerial model. With such a strategic thinking, many problems, which up until now are being solved separately, would be approached and resolved as a whole, or in an integral way.

The problems formulated so far are a part of the agenda regarding the market development of the TBR.

The process of transborder regions integration started a couple of years ago, and as a whole, its development is very positive. The new moment is that instead of integration of isolated levels there has to be integration process among different levels – namely vertical and horizontal integration.

Some of the nowadays shortcomings to be mentioned are that the integration process is somehow impulsive, reactive, it is a result of local initiatives, and it is formal. There is a lack of vision for the common (joint) perspective development of the transborder regions as entities. The local character of the already formed formations called “euro regions” (which are relatively small in scale) does not create necessary critical mass for serious goal setting, for realization of larger projects etc. In some of those regions, the enthusiasm is gradually fading after the announcement of their



formation, and a “wait and see” attitude is being noticed. In spite of those shortcomings, the first step is already made following the trajectory: “FROM lack of structures (transborder region) TOWARDS their conceptualizing and institutionalizing TILL jointly prospecting possibilities for their multi vector development. At the end of trajectory, it is expected to obtain a synergetic effect from “softening” And even eliminating the existing borders. In this regard the

exchanges of people, ideas, product – the great European idea, will be not an incident but an everyday activity.

The transforming of the idea for cooperation and integration between the regarded up till now as a state periphery regions in reality is a basic precondition for removing the existing borders.

The trajectory, which gives a more concrete vision of the transborder regions integration process, could be presented in the following way – figure 1.

The intention to follow that trajectory implies an application of a general model. It

could be used for analysis and strategizing of the TBR development as a whole. The model is outlined in the following way as shown in table 1.

Table no. 1

Subsystems and components of the transborder region

Object of directed integration

Superstructure Networks of specialists; Networks of institutions; entrepreneurs networks; stakeholders networks; civil society organizations networks; networks for training persons, who will act as integrators and manage the integration process etc.

Basic structures Networks of business systems; Marketing networks; etc.

Infrastructure Connecting roads, ferries, ports, bridges, energy networks etc.

FROM TOWARD TILL

Formally formed (on paper) TBR, with incident contacts (regarding the movement of people, ideas, products) etc.

Transborder cooperation, mutual market penetration , intensified business contacts; periodical social, tourist contacts etc.

Normally functioning Euro regions – with joint marketing and mutual marketing activities, joint development projects initiatives’ teams, greater project realization potential, everyday contacts etc.

Figure no. 1

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Subsequently the particularization of the above model from the stakeholders’ network point of view could be outlined in the following way – figure no 2.

Figure no. 2

The efforts of the all stakeholders involved have to be coordinated and properly managed. Such a network (if created and well directed) will bring genuine TBR integration in the spirit of the Pan Europeam integration process. The modern networks are products of the information/communication technologies.

The situations regarding the real network building-up is presented above is as follows – table no 2.

Table no. 2

Possibilities The stakeholders

Positive attitude Negative attitude The planning organs of the European Union

They are interested and have vision about the particular TBR

They are not interested and have not specific vision about a particular TBR

Agencies for regional development

They have and work on specific projects regarding the particular TBR

They are not involved in larger projects or in projects which concern the integration process of the TBR as a whole

Development programmes

and plans

Agencies for regional development

State organs for regional development

Development funds

INTER-STATE (TRANSBORDER) REGION

TAKEHOLDERS NETWORK

Chambers of commerce

Regional development funds

Planning organs of European

Union Joint body for

transborder integration process management

Local administrative

organs



Possibilities The stakeholders Positive attitude Negative attitude

Joint body for TBR integration management

The body is institutionalized and it is involved in strategic and planning activities regarding the integration and further development of the TBR as a whole

It is not institutionalized

Chambers of commerce They are working on exchange of products in the whole TBR

They are not engaged and face only the national parts ot the regions

State organs for regional development

They have programmes and are giving (offering) the necessary support; they facilitate the TBR development as a whole

Regional Development funds

They support the integration and further development of the TBR as a whole

They support only particular activities and plans in different parts of the TBR

The existing governmental and

non-governmental organizations/ institutions create their own networks but unfortunately, now they act in different directions, following the “devide et empera” manner. They need (and at the same time they lack) potential for synchronizing their activities and conceptualizing and realizing large and significant projects.

2. Practical approaches and models for transborder regions integration

Instead of being natural border

and obstacle, in the XXI century the Danube River has to be transformed into a linking platform between Bulgaria and Romania. That is a new approach to the Bulgarian and Romanian economic and social integration and it is expected that vital medium class euroregions to be formed as a result.

One advantage of the TransDanube regional integration is that there is portuar infrastructure. It has to be developed at least in two directions – to

serve to the transborder regional integration and to the Danube transport corridor as a whole. From the other hand it is expected to play the role of a distributor regarding the adjacent territories and the localities to be served. Another particularity is the lack of transport connections across the Danube River with the exception of Ruse-Giurgiu Bridge and some ferryboats crossings.

There could be several levels of the Danubian transborder regions integration – the first, the second, the third and so the fourth.

The first level is the creation of small-scale euro region, integrating some number of neighbour municipalities. For example, such a formation is not so successful “Danube South” which includes municipalities from Romania and Bulgaria (from the Romanian side they include the municipalities of Alexandria, Turnu Magurele, Rosiori de Vede, Zimnicea, and from the Bulgarian side – Svistov and Belene).

The second level is the creation of medium level transborder region. A

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formation of that kind could integrate territorial systems from both sides of the state borders. In the Bulgaria/Romania case there is lack of meridian transport connections, intensive business, social and spiritual closer activities, a long-term isolation.

In this regard the attention has to be paid to the integration of medium level TBR and the accent breviary should be put on meridian directions integration. The former is specific for Inferior Danubian macro-region and also present one of its particularities.

There are a couple of meridian axis, which could act as supporting points for future integration efforts. The problem is that within the both countries the parallel conection are functioning normally, but the meridian transborder links are not so well developed although the efforts were done in the last years. The meridian integration axis if created, could be the backbone for a higher

degree of a multi vector integration – business, social, ecological etc. The actions following that axis aim to build-up relations between people, specialists, business organisations business activities, administrative organisations, information networks, cultural, sports and tourist activities; joint planning etc.

One of the examples outside the Bucuresti/Rouse meridian axis is the axis Veliko Tarnovo (Veliko Tarnovo district - or oblast – Bulgaria) ð Alexandria (judetul Teleorman, Romania) ð Svistov (Veliko Tarnovo district – Bulgaria). One possible abbreviation of many for this possible formation could be VTAS TBR (The idea started to be developed couple of years ago by the Centre for Regional Integration and Development - Svistov. Afterwards it started to be disscused on different levels in the both countries.).

The visualization of the VTAS TBR concept is shown in figure 3.

Figure no. 3

The third level could integrate European planning regions. A model of such an interstate (and transborder) region could be presented as follows – figure 4.

? - ?lexandria

? ? – Veliko Tarnovo

S - Svishtov

TELEORMAN REGION

VELIKO TARNOVO REGION

Parallel integration axis

Parallel integration axis

Danube River

One possible meridian integration axis



Figure no. 4

The fourth level is formed by couple of European planning regions from the both sides of the Danube River corridor and from Inferior Danube macro-region. Its outlines are shown in figure 5.

Figure no. 5

NORTHERN CENTRAL BULGARIAN REGION

SOUTH ROMANIAN CENTRAL REGION

TB R

M ED I UM

S I Z E

VERTICAL INTEGRATION PROCESS

Bulgaria

Romania

National Planning Region 1 National Planning

Region 2 National Planning

Region 3

National Planning Region 1



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In this context there could be different processes of integration, namely: 1. Internal integration – in the frame of the region itself. 2. External integration – among the regions of the respective country and between transborder regions.

3. Transborder regional integration management and marketing problems

For a genuine managed integration

process a strategic body is needed, which could play the role of TBR network integrator. It has to integrate different networks – not only administrative, but also organizations of the citizen society, business etc. Such a body, acting on the principle of consensus, could use both good practices and creative approach. Transborder region’s management institution has to coordinate the integration initiatives in the TBR as a whole. In transborder development the standard model (used by the Pan European planning bodies), should be complemented. They could be support ed by a joint forum for transborder region holistic development, which could support the institution that manages the region. Acting based on the consensus, it will be the initiator of initiatives, vision, alternative strategies to be applied to the transborder regions as a whole.

In this regard, the first step is the conceptualiz ing of the TBR, and the second – linking different administrative, citizen organizations’ and other types of networks. The next move is formulating strategies for interconnecting infrastructure – communication, portuar, transport, energy etc.

The TBR joint development institution has to organize a more and more goal-oriented process. Acting on the basis of the consensus principle, it will be a driving engine of visions and alternat ive strategies for the integration

process. It will give a real start for mutual business activities and for neighboring territories market exchanges and transactions.

The TBR coordinating bodies have to conceptualize the strategy and the development of the internal and external marketing on mutual and multilateral basis. The transborder interregional integration could start with processes as business and market integration; mutual marketing, common activities in social, ecological and other areas. One of the very significant activities is the achievement of a before hand determined degree of market integration. It has to be based on starategies for mutual (simetric and non-simetric, but supported by different institutions) market penetration. In the Bulgarian/Romanian case, those penetration efforts have particularities as not so great differences in the production and in the supply of many local products; lack of differentiate specific selling proposition; price differences are small etc.

A very important tool for the integration is the marketing activity. It has to leave behind many other activities which are related the TBR internal and external integration, to anticipate many other movements concerning the TBR’s internal and external integration.

The joint (common) marketing of the TBR will create its attractiveness as a whole; will provoke, hopefully, foreign investors’ interest in co-financing of joint projects etc. The TBR marketing puts questions, which are badly needed to be answered. Some of them could be: • what have to be the accents regarding the TBR’s advantages; • how a proper strategy for communication (advertising) could be elaborated and/or chosen? • how to make the TBR to become attractive (and let’s be more specific - a constantly attra ctive centre) for foreign and domestic investors? • which bodies have to create the image of



the TBR – national and transnational public relation institutions and persons?

One of the basic problems of the joint marketing is to coordinate different marketing strategies for the TBR and its marketing strategies toward the other regions of Europe and other continents.

One of the periodical activities, which include the process of conceptualizing, strategizing and marketing, could be a forum as an annual confer ence dedicated to the problems and prospects of TBR internal and external cooperation.

From the other hand the transborder regions’ markets have to be regarded as a part of Pan European Union Market (PEUM). In this regard many hyper-regional, national, transborder region markets as a whole form present and future structure and ways of functioning. The building the PEUM as the largest market of the world means internal market collaboration/co-operation and integration of different levels. The market integrat ion starts with formulation of strategies for mutual (symetrical or not symetrical, but assisted, or made easier) market penetration. A possible synergetic effect would be the removal of the existing borders-barriers, borders which hamper the great process of Pan European integration and basic philosophy – free

movement of ideas, people, information and commodities.

As the integration continues to mature, the importance of marketing agility and maneuverability will grow — both as a defense and offence against any anti-integrated efforts.

As a whole the real TBR integration would be an engine for overcoming of the existing Balkan non-cooperativeness and for the development of TBR markets.

4. Conclusions

There are preconditions in both Bulgaria and Romania for creating the medium class transborder regions and for their development as integrated euro regions.

A transborder business exchanges network is a functionally specialized body, which joins many stakeholders in one.

The joint management efforts could be supported by a joint forum for trans-border region holistic development, which could help the institution which manages the region.

There are efforts and capitals to be invested in TBR markets in an interconnected complex. It will take advantages from the market systems proximity, from their mutual complementation in the production of specific row materials, products and energy.

Bibliography

1. Nicola Yankov. Strategizing creation and development of inter state European

regions: a study, published in D Tsenov Jubilee Almanac, Svishtov, Vol. 10, 2001 2. Nicola Yankov. Approaches for regional integration of South-Eastern European

countries , in: Regionalni Razvoj I Demografski Tokovi Balcanskih Zemalja, Univerzitet u Nisu, 2004, pp. 37 - 44

3. Nicola Yankov. The Building the Biggest Market on Earth – the South-Eastern European Countries challenges perspective and the case of Bulgaria: American Marketing Educators Conference, winter 2003

4. Nicola Yankov. Some remarks regarding "the marketization” process in transition economies (The case of Bulgaria), Facta Univesitatis, Series: Economics and Organization Vol. 1, N 8, 2000, pp. 27 – 34 (UDC 339.9.042:658.8(497.2-664)

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Amfiteatru Economic 18

SUPPLY CHAIN MANAGEMENT AND THE ROMANIAN TRANSITION

Daniel A. Glaser-Segura, Ph.D. Laurentiu Dan Anghel, Ph.D. Our Lady of the Lake University, Texas Academ y of Economic Studies, Bucharest [email protected] [email protected]

Jack E. Tucci, Ph.D. Mississippi State University

[email protected]

Abstract

Supply Chain Management (SCM), defined here as the construction of productive systems spanning over organizational borders with suppliers and customers and integrated via human-based and information technology systems to satisfy final customer requirements, is introduced as a key concept to accelerate Romania’s economic transition as it approaches EU membership, as well as to develop a modern supplier network. We introduce SCM from a system perspective along three broad areas: input, operations, output and system integration activities. We close by introducing constraints to SCM implementation in Romania. The first major constraint involves a lack of appropriate physical and human capital. Modernization of antiquated equipment and training employees in modern operations practices are prime requisites. The second major constraint, and perhaps the more difficult to change, deals with a lack of social capital among Romanian firms and adapting to appropriate managerial and worker values and attitudes.

Keywords

• Supply Chain Management; • Social Capital; • Transition Economy; • Economic Development .

Rezumat Managementul lantului de oferta

(SCM) definit aici ca o constructie a sistemelor productive ce depasesc granitele organizationale cu furnizori si clienti si integrate în sisteme bazate pe capacitatea umana si pe tehnicile de informare pentru a satisface cerintele consumatorului, este introdus ca un concept cheie pentru a accelera tranzitia economica a României pe masura ce se apropie de integrarea în U.E., cât si pentru a dezvolta o relatie moderna de furnizori. Introducem SCM dintr-o perspectiva a sistemului bazat pe trei domenii largi: intrare; operatii; venit si activitati de integrare a sistemului. Prezentam de asemenea constrângerile de implementare a MLO în România. Prima constrângere majora implica lipsa capitalului fizic si uman adecvat. Modernizarea aparatului vechi si instruirea angajatilor în practici moderne constituie prime necesitati. O a doua constrângere majora si poate cea mai grea se refera la lipsa capitalului pentru firmele din România si adaptarea lor la un management adecvat, la dobândirea unor noi atitudini si valori ale angajatilor.

Cuvinte cheie

• Managementul lantului de oferta; • Capital social; • Economie de tranzitie; • Dezvoltare economica.



1. Introduction The period between 1990 and

2007 will be considered a historic period for Romania as it transitions from a command to a market economy and joins the European Union. A major portion of this transition involves the reorientation of Romania’s supply chain structure. The structure inherited from the socialist period (1947 to 1989) was state owned, centrally planned, inefficient, provided poor choice and quality, and service was highly unresponsive. While the centrally planned economic systems were in their last decade in the 1980s, firms in Japan, Western Europe and the United States were experimenting with new methods of supply chain coordination within a capitalistic framework. Nishiguchi (1994), and Womack, Jones, and Roos (1990) identified the transition from adversarial supplier relations to supply chain management (SCM) practices in the industrialized nations as a major factor of continued organizational competitiveness. SCM was found to provide lower costs, shorter development and production cycles, higher quality, and other inter-organizational benefits (Ansari & Modarress, 1990).

Hirschman (1958), a few decades earlier, was prescient to theorize that cooperative supply chains would support a nation’s or region’s economic development by forging links between suppliers and buyers. As an example, the automotive parts industry uses a large number of suppliers for all the components and materials used to assemble an automobile. This industry serves as a backward linkage industry, in which the end assembler purchases subassemblies from first tier suppliers. The first tier suppliers, in turn, buy material and components from second tier suppliers. The backward linkage industry integrates the small and medium

enterprises into a supply chain to promote regional development. Recent empirical data suggests that SCM has helped to lower inflation, reduce economic volatility, and strengthen productivity, and worker earnings in the United States (Basu and Siems, 2004).

Many of the businesses in the transition societies, such as Romania, have the opportunity to transition from the vestiges of a state managed supply chain, bypass the older market adversarial relations model, and adopt the newer SCM model to vastly accelerate the transition period. In this paper we will describe a model of SCM and provide a discussion of constraints for future implementation in Romania.

2. What is Supply Chain Management?

Many professional organizations,

such as the International Federation of Purchasing and Materials Management (IFPMM) and the Institute for Supply Management (ISM), following the lead of innovative leaders in their respective companies, have developed a variety of definitions for this new and emerging phenomenon. We will define SCM as “the design and management of seamless, value-added processes across organizational boundaries to meet the real needs of the end customer. The development and integration of people and technological resources are critical to successful supply chain integration (www.napm.org).”

Under this definition, organizations in the supply chain learn to adapt to new situations found in their external environments to provide linking processes that join with other organizations to the point that they behave as if a unique organization with parallel goals. This new cooperative approach reduces waste and duplicated effort among organizations.

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A model of SCM is presented in Figure 1. This model is based on a systems model that extends coordination beyond a single organization, independent of other firms that provide input and output functions. In the older traditional models of organizational systems, suppliers and customers were listed as part of the external task environment. In the SCM model, on the other hand, they are included as part of a

larger system view that incorporat es suppliers and customers into a unified structure that is often referred to as a virtual organization. A virtual organization is composed of several organizations that operate under the same general goals, communicate openly in bi-directional vertical and horizontal flows, share resources, and are highly dependent of each other.

Figure no 1. Supply Chain Management Systems Model

The elements making up Supply Chain Management consist of: Input Activities

Purchasing serves as the principal input activity along the supply chain. In the traditional model, purchasing management was often considered a low level clerical task in which selection decisions were based largely on cost. Expediting suppliers to hurry the delivery, monitoring incoming quality, and intervening in the payment of suppliers

were the principal forms of management and these tended toward adversarial control rather than cooperative relationships.

Under SCM, purchasing assumes a more strategic and complex role in the organization and the purchasing function often operates beneath a Director or VP of Purchasing who is responsible for forecasting, analysis, planning, and coordination of purchasing activities in close consultation with other functional

Distributor Network

Supplier Network

M A T E R I A L S

E N D

C O N S U M E R

Integrated Enterprise

Procurement

Market Distribution

Production

Information, Product, Financial, and Knowledge Flows



areas in the buying and supplying organizations.

Supplier Partnerships (also known as Supplier Alliances) further elevate the importance of the purchasing activity. Supplier partnerships are long term, cooperative, and trust-based relationships with key suppliers. The relationships are used to acquire vital resources and provide benefits to both organizations beyond the traditional dimensions of cost and quality and now include improved delivery, timing, flexibility and access to the supplier’s technology. Supplier partnerships employ specific supplier management practices depending on organizational needs. These practices generally consist of supplier development, early supplier involvement, supplier certification, and total cost management practices (Glaser-Segura, 1998). If, for example, a supplier’s product quality requires improvement, a supplier development program would most likely involve a quality assurance team that would work closely with the supplier to improve the quality of their products. These supplier managem ent practices require a high level of trust and lead to benefits for both organizations. The changeover to the new supplier management practices, however, requires a rethinking of staffing in the purchasing function. The structure now becomes much more project oriented with multidisciplinary teams drawn from accounting, engineering, and other areas. Operations Activities

SCM operations activities incorporate concepts of continuous monitoring and improvement of balanced and efficient production and high product and service quality. In the traditional organizational mode of supply management, on the other hand, continuous improvement of operations activities was a low priority of organizational strategy. The managerial

mantra could be described as “If it isn’t broken, do not fix it.” In the SCM approach to operations, Just-in-Time (JIT) management serves to continuously improve the productive system to achieve greater and more efficient product and service flow rates. JIT employs conceptual tools and can be used by most organizations, including service companies. These conceptual tools consist largely of kanban, reduction of lot sizes, just-in-time scheduling, and reduction of setup times (Flynn et al., 1995).

In addition to JIT, SCM depends on the continuous improvement of product and service quality. Total quality management (TQM) provides the philosophical foundation and tools to improve quality along the supply chain. TQM is comprised basically of focus on end customers, process quality management, and design for quality practices. JIT and TQM, also require that management change the way they deal with employees and the workplace. These practices are referred to as common infrastructure practices (CIP) and are comprised of information feedback, management support, plant environment, and workforce management (Flynn et al., 1995).

Supply chain management also depends a great deal on better demand management to provide accurate forecasts of requirements for its products and services; to conduct high level planning to determine material, human, and other needed resources; and to serve as an input to scheduling and capacity decisions. Forecasting, as a central element to demand management, consists of both quantitative and qualitative forecasting methodologies. Thes e methodologies provide inputs for management to make sales and production decisions along the supply chain and will result in reduced bullwhip effect. The bullwhip effect refers to the increased concentration of safety

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stock inventory all along the supply chain, which increases inventory costs and reduces organizational responsiveness (Wisner, Leong, & Tan, 2005).

Aggregate planning and capacity management are complementary activities that serve to craft a plan to coordinate productive assets and to balance the plan with available capacity within the organization and among supply chain members. Aggregate planning relies on long term demand management and forecasting to create realistic production plans. These plans, in turn, are further developed into more specific mid term and short term plans. Aggregate planning is used in both production and service organizations and shared along with suppliers and customers along the supply chain. Plans are revised and balanced at each planning horizon (long, middle, and short term) to further match available capacity. Various management practices are used to match plans to available capacity in the short and mid term. Long term capacity decisions, on the other hand, generally require capital outlays, which often include facility location decisions (Russell & Taylor, 2005).

Facility location analysis is used to move productive facilities to places that provide lower cost inputs or when it makes sense to locate close to either suppliers or to customers. The decision to locate facilities is usually based on a combination of quantitative distance tools, weighted factors of production tables, and management judgment (Petroni, 2000). Output Activities

Supply chain management relies a great deal on two major activities: 1) proactive contact with consumers and 2) distribution of products. The first activity has been facilitated by low cost electronic mediums, such as the Internet, for reaching customers at almost any place of the globe and at any time. Customer contact may be simp le, such as keeping a

website for information purposes, or complex, such as tracking and managing products in transit. These customer contact tools are referred to as Customer Relationship Management (CRM) software that performs three principal functions: 1) marketing, 2) Sales, and 3) Service (Ross, 2005). SCM output activities also depend on the use of a multitude of transportation options which include company owned and as well as contracted transportation, warehousing, and specialized distribution services. These transportation operations also depend on multi-modal transportation processes which employ standardized containers and allow the integration of trucks, trains, and ships (Helms & Dileepan, 2005) . Network design, another development in supply chain transportation, involves the deliberate analysis and design of the structure of a supply chain. The network design process involves transportation and facilities models and decision tools to create optimum distribution systems (Zographos & Giannouli, 2001). Finally, in the distribution of output items along the supply chain, service response logistics (also referred to as reverse logistics) deals with the travel of products in the supply chain for products that are returned for repair, destruction, and or specialized disposal (Wisner, Leong, & Tan, 2005). System Integration

Supply chain integration requires measurement and coordination of all processes across organizational boundaries. Under the traditional unlinked organizational approach, productivity, quality, accounting and financial measures were used to determine if the organization was meeting its goals, independent of the economic and organizational impact on suppliers and customers. Under the SCM approach, performance measurement involves assessments that reach beyond organizational boundaries. Enterprise



Resource Planning (ERP) serves as the principal information technology used to coordinate and measure internal functions, such as accounting, HR and production, with external stakeholders, such as suppliers, logistics providers and customers. ERP systems now often consist of multi-location and multifunctional information systems that link the organizations with suppliers and customers (Chuang, & Shaw, 2005). The use of ERP systems also provides a means for gathering data for performance measurement. These performance measurement systems, based on large processing systems and using data from multiple databases can provide a more detailed view of performance (Chen, & Paulraj, 2004).

Goals and incentives along the supply chain must also be integrated, information must be accurate, process and quality improvements should be coordinated, and procedures that stabilize supply chain members against shocks should be observed without resorting to opportunistic and self-defeating short term behaviors that benefit one firm or portion of the supply chain. SCM integration, though, cannot be accomplished by force and requires mutual voluntary cooperation (Wisner, Leong, & Tan, 2005). For mutual voluntary cooperation SCM depends on social capital. Social capital is an intangible social construct that has no liquid value, but it permits value-added transaction activities that, in its absence, are impossible (Coleman, 1990). SCM across national borders requires social capital to a greater degree than when working in a one-language, monoculture setting.

3. Constraints of Implementing Supply Chain Management in Romania

SCM implementation in Romania is

constrained by two major factors. These

constraints involve 1) poor physical and human capital and 2) a limited view of inter -organizational structure. The physical capital constraints consist of technologies that were not updated during the later part of the Ceausescu era and the early transition of the 1990s. Some of the privatized firms, particularly those owned by managers and workers, were not able to acquire new technologies and were forced to cut back on research and development. The manager-worker owned privatized firms have not prospered to a great degree and some have gone bankrupt. Privatized firms with access to funds for capital improvements, usually from foreign sources of ownership, to the contrary, experienced growth (Valsan, 2001). The loss of bankrupt firms has deteriorated Romania’s ability to maintain certain national supply chains.

In addition to physical capital investment, firms will need to improve their human capital. Human capital investment will need to involve both managers and workers. For the first of these two groups, managerial learning will involve new methods of acquiring knowledge, and assimilating new values and systems so that managers can develop organizational processes appropriate to their new needs (Clark & Geppert, 2002). The current condition of top-down mechanistic management should give way to the notion of respect and empowerment of workers. Moreover, managerial learning should involve practical solutions and avoid the older theoretical education approaches (Bedward, Jankowicz, & Rexworthy, 2003). In addition to managers, employees must also upgrade their attitudes and skills. The mentalities inherited from state organizations must give way to entrepreneurial and problem solving behaviors. The employees should see their fates tied to the performance of the firm and the supply chain. The new skills must incorporate continuous

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improvement of processes and quality of products and services.

Supply Chain Management also requires new views of the organization and its external and internal stakeholders. From an external view, managers as well as employees should learn to embrace cooperation across organizational boundaries. It is not only managers, in the role of boundary spanners, who communicate with outsiders. The SCM approach will involve managers and workers from a variety of levels communicating with suppliers and customers at a variety of levels in their respective organizations. As organizations cooperate with other supply chain members they will find that they must develop greater levels of social capital or trust (Coleman, 1990).

From within the organization, managers and employees must learn to break down internal boundaries. SCM spans across the functional areas of the organization and reaches out to other organizations. It includes purchasing activities, materials management, transportation, warehousing, operations management (production and services), information technology, customer service, and coordinates with finance, marketing, accounting, and human resource management. The SCM paradigm changes the way companies are organized for more fluid-like flows of materials, people, information, finances, and other resources across functional areas beyond the domain of a single organization (Wisner, Leong, & Tan, 2005). In some organizations, the reorientation requires structural change in which all of these functions report to a common manager and organizational culture changes to more cooperative and participative behaviors (Moss-Kanter, 1994).

In fact, not only is SCM a new paradigm for businesses, but also for the academic institutions that instruct future

managers about this new model. The academic organizations that attempt to teach SCM find that they must break down barriers between the various academic business disciplines. We now find, for example, that the marketing and management departments must plan curriculum, decide who will teach which courses, and share common tasks. In other words, academic institutions must be able to practice what they preach.

The implementation of SCM in Romania will require organizational change and we suggest the approach suggested by Moss-Kanter (1994) called the “Eight I’s that Creat We’s.” These eight characteristics consist of:

? Individual Excellence - Both sides of an alliance are strong in their own right and contribute something to the relationship. Their motives are positive and are aimed at gaining new market opportunities.

? Interdependence - The partners depend on each other and cannot reach their common objective alone. This is also referred to as a superordinating goal.

? Investment - The partners of an alliance invest in each other as proof that they believe in the longevity and success of the other. The investment can be in financial and other tangible terms as well as intangible, such as training and providing business solutions.

? Information - To make their partnership work, communication must be frequent, rich in content, strategic and tactical (at all levels of both organizations), and work to solve problems and reach goals and opportunities.

? Integration - The alliance members develop linkages and methods of operating. In many organizations this is often expressed as information technology and distribution system s that connect each other more efficiently. The integration can



also be expressed in intangible manners such as creating joint taskforces

? Institutionalization - The relationship is given a formal status. The relationship is announced to the industrial community and cannot be broken easily by caprice.

? Integrity - The partners in the alliance along the supply chain behave in

honorable manners that engender trust. The intent is on growth ad maintenance of the relationship.

In short, the SCM paradigm

provides a wide array of benefits but also requires revolutionary changes in the way organizations conduct relationships and transactions.

Bibliography

1. Ansari, A., & Modarress, B. Just-in-time purchasing , New York: The Free Press, 1990

2. Basu, A. & Siems, T. The Impact of E-Business Technologies on Supply Chain Operations: A Macroeconomic Perspective, Federal Reserve Bank of Dallas, Working Paper 0404, November 2004

3. Beward, D. Jankowicz, D. & Rexworthy, C. (2003). East meets west: a case example of knowledge transfer , Human Resources Development International, 6(4), 2003, pp. 527-545

4. Chen, I. & Paulraj, A. Understanding supply chain management: critical research and a theoretical framework, International Journal of Production Research, 42(1), 2004, pp. 131–163

5. Chuang, M. & Shaw, W. A Roadmap for E-Business Implementation, Engineering Management Journal, 17(2), 2005, pp. 3-13

6. Clark, E. & Geppert, M. Management learning and knowledge transfer in transforming societies: approaches, issues and future directions, Human Resources Development International , 5(3), 2002, pp. 263-277

7. Coleman, J. S. Foundations of social theory, Cambridge, MA: Belknap Press, 1990

8. Flynn, B. B., Sakakibara, S., & Schroeder, R. G. Relationship between JIT and TQM: Practices and performance, Academy of Management Journal, 38, 1325 -1360, 1995

9. Glaser-Segura, D. The influence of interorganizational trust, individualism and collectivism, and superordinate goal of JIT/TQM on interorganizational cooperation: An exploratory analysis of institutions in M exico, Doctoral dissertation, University of North Texas , 1998

10. Helms, M. & Dileepan, P. Transportation Issues for Supply Chain Management, Business Forum , 27(1), 2005, pp. 8-13

11. Hirschman, A. O. The strategy of economic development, New Haven, CT: Yale University Press, 1958

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14. Petroni, A. The logistics of industrial location decisions: An application of the analytic hierarchy process methodology, International Journal of Logistics: Research and Applications, 3(3), 2000, pp. 273-289

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15. Ross, D. E-CRM from a supply chain management perspective, Information Systems Management, 22(1), 2005, pp. 37-44

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the case of newly privatized Romanian companies. Post-Communist Societies, 13(1), 2001, pp. 121-128

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SOME BASIC SKILLS FOR SUCCESSFUL PERSONAL SALES

Chief Assistant Professor Vanya Kuzdova Banabakova, Ph.D. National Military University “Vassil Levski”, Veliko Tarnovo

[email protected]

Abstract

As one of the instruments of the promotional mix, personal sales are related to the strategy and purposes of the promotional policy and directed to stimulating and enhancing of sales of offered goods and services. Making a deal is the main goal of personal sales. The purpose of this study is to explore the specific issues and sellers’ skills necessary for the successful conclusion of a deal through a completion of required stages.

Keywords • Marketing; • Personal sales; • Presentation; • Seller; • Client.

Rezumat

Printre instrumentele promotionale, vânzarile personale sunt strâns legate de strategia si scopurile politicii promotionale si îndreptate catre stimularea si cresterea vânzarilor de bunuri si servicii oferite. Negocierea este unul dintre scopurile principale în cazul vânzarilor personale. Ne propunem sa exploram problemele specifice si deprinderile vânzatorului, necesare pentru a încheia cu succes o negociere prin parcurgerea etapelor necesare.

Cuvinte cheie

• Marketing; • Vânzari personale; • Prezentare; • Vânzator; • Client.

1. Introduction Personal sales are critical for both

businesses and non-profit organizations. The major objective of businesses, when accomplishing personal sales, is selling.

As one of the instruments of the promotional mix, personal sales are related to the strategy and purposes of the marketing policy and directed to stimulating and enhancing of sales of offered goods and services. For many goods and services personal sales are the only possibility for the realization of the sale, as well as the main source of information and qualified counseling to customers. For example, companies such

as Oriflame and Avon rely exclusively on personal sales for advertising and selling of their products. Personal sales are realized by tradespeople at different functional levels - sellers, trade representatives, agents, brokers, and heads of departments, who negotiate and communicate vis -à-vis with clients. Personal sales are parts of the communicational mix, which is offered both at the lowest and the highest level of organizations: by floor sellers, traveling salesmen, and companies’ directors.

Currently, the purpose of personal sales is to provide customers with needed goods rather than to compel customers to buy them. Personal sales represent an

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effective tool for energizing of the demand. Their accomplishment, however, is associated with higher expenses, and as a result, is justifiable for higher priced goods (e.g. brand cosmetics, long-life consumer goods, goods with investment purposes, etc.)

The realization of personal sales requires resp ective personal skills from sellers, as well as good qualification and motivation. Therefore, the personnel selection is a crucial and responsible process. Salesmen and trade agents shall possess and constantly develop abilities and skills allowing them to communicate efficiently with clients.

Personal sales become even more significant at the last stages of clients’ readiness to buy – when clients are encouraged to try, make a test purchase or finally purchase the goods. Consequently, the purpose of this study is to explore the specific issues and sellers’ skills necessary for the successful conclusion of a deal through a completion of required stages.

2. Stages of Making a Deal

Making a deal is one of the basic goals of personal sales. In practice the process goes through four key stages, each one requires good knowledge and preparation of the seller.

The following stages can be differentiated: establishing a contact with a potential client, presenting the product in its favorable light, coping with any and all clients’ objections and doubts, and lastly, making a deal.

a) First Stage: Establishing a Contact with a Potential Client

Unfortunately a good number of

deals end up even before being started because contacts with respective clients failed to be established. Therefore, at the time of the first contact the seller ought to predispose the client with her professionalism, insight and loyalty. The good start of a deal is associated with the following skills (Table no 1).

Table no. 1

Necessary Skills for Establishing a Contact with a Potential Client

Skills

Ways of Expressing the Skills

Demonstrate friendliness through respective body language

Warm smile, outspoken look, first-class posture and gait, neat appearance, positive attitude, confidence.

Sincere, warm, and natural greeting and conversation

Small talks and “ice-breakers.”

Demonstrate readiness to help from the very beginning

Behave as a consultant and adviser rather that as a seller; ask questions and listen carefully to the answers.

Identify correctly the needs of the client

Dexterous inquiries result in sharing of the clients’ problems which solutions should be offered by the seller.

In case that the seller is not able of

satisfying some of the needs or of solving clients’ problems, the seller has to admit it honestly because time is valuable for both

parties. In such cases the client will meet sellers’ honesty with respect, which is important for future deals.



It is critical that the seller will recognize quickly the potential client during this stage. The potential client is the person who needs a particular good, has the right and funds to buy it. It will be a lost of time and efforts to move on to the next stages before obtaining knowledge and skills on recognizing the potential client. b) Second Stage: Presenting the Product in its Favorable Light

The products’ presentation requires

professional knowledge of the object of sale. If the seller knows more about the good or service, objects of sale, she will serve the client much better. Tradesmen dealing predominantly with one product, e.g. computers, automobiles, and others, have an advantage that allows them to concentrate on the product and consequently become undisputable experts in it. In contrast, the situation in retail

stores differs because of the broader range of goods offered there, which goods are also regularly changed. For this reason, in order to obtain information about the product, retail sellers often rely on the labels of products, on their colleagues, and even on the client. The variety of services offered in the service area, and particularly in banks, makes the situation quite similar to the retail stores. In the event when a bank clerk, for example a cashier, is not aware of a specific service, a good course of action will be the transfer of the client to a supervisor who will be knowledgeable of the service.

Worth noting, the successful end of the first stage described above means that the client is ready to listen to the seller’s offer. As a result, the seller will initially control the development of the second stage. To utilize to a greater extent this opportunity, sellers shall acquire the following skills. (Table no. 2)

Table no. 2

Necessary Skills for Good Presentation of Products

Skills

Ways of Expressin g the Skills

Find out the right presentation’s mode matching client’s interests

The client should be listened to carefully as to figure out the motivation for the purchase as well as the product should be put in the light expected by the client.

Use of visual methods Computer presentations, models, immediate demonstration of the product, notepads’ schemes.

Involve the client in a conversation Check up whether the client pays attention to the presentation through asking questions such as: “Do you follow me?” or “Is this going to work for you?”

Thoroughness of the presentation Skipping any of the major qualities of the product can lead to failure of the deal. At the same time the seller shall not provide more information than it is necessary.

Presenting a product often requires

a preliminary preparation. The highlights of the preparation shall be directed towards dealing with the following issues:

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• Is it advisable to present in a definitely emotional manner?

• How large shall be the audience of the presentation?

• Who may and who should be a participant in the presentation?

• What shall be the duration of the presentation?

• What is the most suitable place to be selected for such type of an event?

• How to prepare properly the presentation?

• What is the appropriate way to end the presentation?

• How shall the presentation be ensured technically?

Solving said questions is related to the essence of the presentation, viewed as a statement that is orally prepared and limited in time. A major criterion for the success of the presentation has to be the extent to which the primary goal has been reached. The primary goal of the seller in such cases is to achieve the desired behavior of the audience at the end of the presentation.

Two basic alternatives to the presentation of a particular product exist – emphasizing the facts and emphasizing

the advantages. Many clients are more concerned about the advantages compared to the facts. Therefore, the seller shall talk about the advantages of the product keeping in mind that she wil l answer much better to the questions of the clients if she is really knowledgeable about the product. Moreover, the seller shall know more about the product than she is planning to mention at the presentation.

c) Third Stage: Successful Coping with Any and All Objections and Doubts of the Client

The successful completion of the

third stage requires from the seller to avoid asking questions to the client too early. After the seller has established the first contact with the potential client and has asked him really politely leading questions, she ought to wait for additional questions or objections to originate from the side of the client. The answers to these questions indicate to a greater extent whether there will be a deal or not. Answering effectively to questions and overcoming objections entail learning the following skills (Table no. 3).

Table no. 3

Necessary Skills for Successful Answering to Clients’ Questions and Overcoming of

Objections

Skills

Ways of Expressing the Skills

Encourage questi ons of any kind

The seller has to answer respectively to the questions or the raised objections rather than to promote the product in general.

Honest answers In case that the product has some defects, it will be better to reveal the defects and after that highlight a certain advantage that prevails over the defects because the product has to satisfy particular needs of the client.

Proper explanation why the The seller shall act like a teacher – to compare and



new product has to be preferred to the old product

demonstrate to the client the way through which the desired result will be reached, as well as the advantages of the purchase.

Prioritize and emphasize the theory of the mutual benefit

The seller shall explain that both parties win in a solid deal. The seller shall also be convinced that the client will really win and will be a client in the future too. The honesty of the seller guarantees the successful completion of the third stage.

The main precondition for coping

with objections is the ability to overcome them professionally. Very often after an objection is raised, the seller immediately loses control and starts interrupting and convincing the client although first the real meaning of the objection has to be clarified.

Accordingly the client will probably get more suspicious. To influence the decision of the client the seller has to motivate sufficiently the client and to understand the needs, desires, and interests determining the clients’ actions.

The objection shall be considered as a refut ing argument and a motivated disagreement with an issue. The most common case is when the raised objection is in fact an inquiry, a necessity for additional information on the goods or services, as well as on how the product will help the client in solving his problems and satisfying his significant needs. A reason stands behind each objection. The reasons can be numerous, each of them being unique by itself, and intrinsic to the respective person in a particular situation. Their nature, however, is identical: the proposal violates or contradicts an internal expectation (goal, incentive, belief, habit, knowledge, self- evaluation, situation, etc.) of the client. The mechanism of resistance to the seller’s proposal is actually elementary– in client’s opinion the proposal contravenes something natural, confirmed by experience. At the end of the day intimidation, fear or

apprehensions arise, and the client’s answer is rejection.

The seller has to listen very carefully to client’s questions. The subject of the inquiry is not important- in all cases the seller shall not interrupt the client thinking that she knows what the client intends to say. Interrupting the client indicates disrespect and may result in incorrect understanding of the real meaning of the objection. After the client has asked the question the seller shall not argue. In the event when the client concurs with the pros of the proposal, the seller shall wait and observe the gestures and facial expressions of the client. It is desirable to reach to the point when the client makes personally a decision to enter into the deal and suggests the realization of the sale.

According to Banchev several methods are applicable to the overcoming of objections:

• Method of the Boomerang – applicable when the objection is used as an argument proving the necessity to buy the product;

• Method of the Counterbalance – applicable when an advantage of the product grounding the purchase is contradicting to the objection, which is actually sound;

• Method of the Overt Negation – applicable when the fact that the information is not correct and the situation is quite different are explicitly demonstrated;

• Method of the Hidden Negation – applicable whenever the direct denial to

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client’s doubts does not work and the seller shall agree and present counterarguments;

• Method of the Lack of Complete Understanding – applicable whenever the objection is absurd but it shall not be denied directly; and

• Method of the Cross Questions – applicable when cross -questions aim at clarifying the objection through introducing a new meaning elements.

Every seller shall keep in mind that selling is a process that solves client’s problems. Therefore, the seller has to go deep in the problem in the light seen by the client. If the seller acts more as a consultant rather than as a seller, she will be able to establish a better connection

with the client because the client will be persuaded more effectively on how the product or the service will crack the problem. d) Forth Stage: Making a Deal

The successful completion of the

stages described above requires a lot of energy and time from the side of the seller, and it will be a pity if the forth stage cannot be finished. Many trade failures have their reasons in the lack of skills of sellers to conclude a deal. To ensure the successful completion of the last, forth stage, the following skills have to be learnt: (Table no. 4)

Table no. 4

Necessary Skills for Successful Completion of a Deal

Skills Ways of Expressing the Skills Create a summary of the product’s advantages

Often clients are willing to hear briefly once again the advantages at the end of the conversation so that they can make a positive decision for the purchase.

Exact explanation on the financial conditions for the conclusion of the deal

If the client agrees with the proposed financial conditions, the deal is deemed concluded.

Prepare a convincing closure Sometimes the simplest sentence turns to be the most suitable one. (For instance, “In my opinion you found the best solution of your problem. Why should you wait longer?”)

Proposal for making the deal Every seller has to find her own way but she shall not hesitate to beg the client to buy the product. In the event when the seller lacks self-confidence, it will help to think that not having a deal will have more disadvantages for the client compared to the consequences to the seller.

The successful completion of the fourth stage requires a choice of the correct approach to the client because some of the clients give up when they feel too pressed, while other clients will not

purchase unless they have been convinced to do it. An approach, respective to the preliminary analysis of the client’s characteristics, ensures the successful end of the deal.



3. Conclusions

As a result of the analysis of the issues and necessary skills for concluding a deal, the following inferences regarding the decisions associated with successful personal sales can be drawn:

• The seller shall constantly maintain her positive attitude; otherwise her chances for success will decrease. Therefore, the seller shall always look for the good aspects of colleagues, clients and the organization despite current problems;

• The main goal of the seller when realizing a sale shall be the satisfaction of the client. Sellers’ unwillingness to make clients really happy is the basic reason for failure;

• Learning and applying said skills for successful completion of the stages for

making a deal is a must for professional tradespeople;

• The seller shall be proud of and satisfied with the job which is another important precondition for success;

• The efforts of every seller and of the organization as a whole shall be directed towards the elaboration of a system guaranteeing the sustainable relationships with perspective clients.

To conclude , acquiring the

analyzed skills for personal sales combined with the personal features and desire for success, expressed by every seller, present the first steps towards achieving the desirable effect in sales.

Bibliography 1. Banchev, P. Management of the Sales, AI”Tzonev,” Svishtov, 2004, pp. 280 2. Banabakova, V. Personal Sales’ Decisions, IC of NMU”V. Levski,” V. Tarnovo,

2005, pp. 26, 27, 28-34, 36, 44 3. Velev, M. Marketing Communications, Published by Softtrade, S., 2001, pp.410 4. Cottler , F. Cottler for Marketing – How to Create, Win and Manage Markets ,

Published by Klasika i stil, OOD, S., 2002, pp. 146 5. Chapman, El. To Learn to Sale, Foundation “Vl. Ponetzki,” Printed by “Balkan

Pres”, S., 1994, pp. 21-29

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EXCHANGE MARKET PRESSURE BEFORE ENTERING THE ERM II: THE CASE OF CENTRAL EUROPEAN COUNTRIES

Assistant Professor Ing. Daniel Stavárek, Ph.D. Silesian University in Opava

School of Business Administration in Karviná, Department of Finance [email protected]

Abstract

This paper estimates the exchange

market pressure in four Central European countries which are also new member of the European Union - Czech Republic, Hungary, Poland and Slovenia. As all new EU-member countries are supposed to join the European Economic and Monetary Union soon, they must pay attention on fulfilling of all convergence criteria. One of the criterions deals with exchange rate stability and is associated with membership in the Exchange Rate Mechanism II. Estimation and analysis of exchange market pressure are extremely important since almost all new EU -members will be forced to switch their relatively flexible exchange rate regime to the ERM II which is considered as quasi-fixed. This paper reveals a significance of exchange market pressure in all types of exchange regime arrangement in all countries analyzed. The paper concludes that exchange market pressure achieved the highest level in fixed pegs regimes and the volatility of exchange market pressure was lowest in the floating regimes.

Keywords • Exchange market pressure; • ERM II; • Convergence criteria; • New EU-members.

Rezumat Prezentam în aceasta lucrare

presiunea pietei de schimb în 4 tari central europene, care sunt noi membre ale Uniunii Eropene - Republica Ceha, Ungaria, Polonia si Slovenia. Pentru ca toate tarile nou intrate în U.E. trebuie sa adere la Uniunea Europeana Economica si Monetara în curând ele trebuie sa acorde o atentie deosebita îndeplinirii tuturor criteriilor de convergenta. Unul dintre criterii se refera la stabilitatea ratei de schimb si este asociat cu calitatea de membru al Mecanismului Ratei de Schimb II. Estimarea si analiza presiunii pietei de schimb sunt extrem de importante, de vreme ce majoritatea noilor state membre U.E. vor fi obligate sa-si schimbe regimul rat ei de schimb relativ flexibil conform ERM II care este considerat ca fiind cvasi-fix. Prezentam semnificatia presiunii pietei de schimb în toate tipurile regimului de schimb în tarile analizate. Concluzia este ca presiunea pietei de schimb a atins cel mai înalt nivel în tarile cu regim stabil si un caracter inconstant al presiunii pietei de schimb a fost mai scazut în tarile cu regim fluctuant.

Cuvinte cheie

• Presiunea pietei de schimb; • ERM II; • Criterii de convergenta; • Noi state membre U.E.



1. Background Eight countries from Central and

Eastern Europe (CEEC) joined the European Union (EU) in the spring of 2004 and completed, in fact, transformation from centrally planned economies to market economies. Moreover, it is expected that they will also join the Economic and Monetary Union (EMU) and implement the euro as a legal tender. However, membership in the EMU is conditioned by fulfilling of the Maastricht criteria. One of them is the criterion of the national currency’s stability in the period preceding entry into the EMU. This criterion is associated with specific exchange rate regime, ERM II, which must be adapted by all countries with regimes whose principles do not correspond with the ERM II’s spirit (the group of incompatible regimes includes crawling pegs, free floats or managed floats without a mutually agreed central rate and pegs to anchors other than the euro.) It means that all CEEC except Estonia and Lithuania will have to modify their exchange rate arrangement when joining ERM II. (As of 1st December 2005, five of the CEEC (Estonia, Latvia, Lithuania, Slovakia and Slovenia) joined the ERM II. Nevertheless, the exchange rate regime in Latvia is very similar with the ERM II, thus the “costs” of the regime’s rearrangement are rather marginal). The Czech Republic, Hungary, Poland and Slovakia currently use flexible exchange rate arrangements. Slovenia also maintained flexible regime before entry into the ERM II. Such a change towards less flexible exchange rate system increases susceptibility of the countries to currency crises and pressures on the foreign exchange markets.

The aim of the paper is to estimate exchange market pressure in the Czech Republic, Hungary, Poland and Slovenia during the period 1993-2004. Since all

countries used both fi xed and flexible exchange rate regime, the time span chosen allow us to compare magnitude of tensions on the foreign exchange market in different exchange rate environment. This kind of analysis has important policy implications as the switch to less flexi ble regime is unavoidable in the near future. The paper is structured as follows: the second section deals with the theoretical concept of exchange market pressure, the third section describes the data used and the fourth section presents the empirical results. The paper ends with a summary of the main findings and some conclusions. 2. Theoretical Concept of Exchange Market Pressure

The notion of exchange market pressure was introduced by Girton and Roper (1977). They started from the insight that excess demand or supply on the foreign exchange market can result in a change in the price of foreign exchange as well as in a change in the level of foreign reserves. The interesting feature of the concept is that is applicable to all exchange rate systems and to different degrees of exchange rate management.

In contrast to Girton and Roper (1977) or Weymark (1995) we assume that exchange market pressure is also associated with interest rate differential, particularly in transition countries like the CEEC in the 1990s. As Vanneste et al. (2004) pointed out, interest rates have been frequently changed in CEEC to alleviate exchange market pressure. Therefore, we extended the original approach and included the change in interest rate differential into the model. The similar approach was previously followed by Pentecost et al. (2001) or Vanneste et al. (2004), among others. Exchange market pressure is thus defined as:

AE


)(ˆ)(ˆ

∗

−

−⋅+⋅−=∗

ss

ii

e

r

e iireempss

σσ

σσ

where emp is exchange market pressure, e denotes rate of depreciation of do mestic currency, r̂ is proportional increase in domestic international reserves, )( ∗− ss ii

defines change in interest rate differential, and r̂σ , eσ ,

)( ∗− ss iiσ are standard errors

of the respective variables. We also take into account the

different volatility of the components by using variance smoothing weights. The weights on the intervention and interest rate terms are the ratio of the standard error of the percentage change of the exchange rate over the standard error of the percentage change of reserves and the interest rate differential respectively.

3. Variables and Data Used

The samples cover the period from

1992:4 to 2004:4 yielding 48 quarterly observations for all countries. All data were extracted from the International Financial Statistics (IFS) provided by the International Monetary Fund. Changes in domestic exchange rate were computed relative to the euro. Exchange rates prior 1999 were obtained using the irrevocable conversion rate of German Mark to the euro. Employing of euro as the reference currency seems to be logical since the Maastricht criterion of exchange rate stability is based on the rate of domestic currency to the euro. Similarly, the EMU (Germany prior 1999) was used as anchor to compute changes in the short-term interest rate differential.

Rates of depreciation of domestic currency were calculated as change of the nominal bilateral exchange rate of the domestic currency vis -à-vis the euro,

measured as the domestic currency price of one unit of foreign currency. We calculated cross rates implied by bilateral USD rates available in the IFS in line AE. The proportional change in domestic international reserves was yielded by ratio of change in the level of reserves (IFS line 79DAD) and money base of previous period (IFS line 14). To calculate change in interest rate differential with the EMU (Germany) we used money market rates (IFS line 60B) or treasury bills rate in the case of Hungary (IFS line 60C).

4. Empirical Results

Exchange market pressure in all

countries analyzed was estimated according to (1) and the results of calculation are depicted in Figures 1-4. Along with the exchange market pressure line, the lines representing 1.5 multiple of standard deviation above and below the mean value are portrayed. Backgrounds of figures showing emp in the Czech Republic, Hungary and Poland are divided into several parts allowing to distinguish different exchange rate arrangements occurred in the countries during the period analyzed. Elementary descriptive statistics of the emp-measure are reported in Table no 1.

Results suggest that the Czech Republic and Slovenia have gone through considerably less volatile development of the exchange market pressur e than Hungary and Poland. This is evident in the standard deviation’s values which are in the latter countries approximately twice as high as in the former ones. Consequently, the corridor depicted in the figures is narrower in the Czech Republic and Slo venia.

It is interesting that lower volatility has been achieved in the environment of floating exchange rate regime which has been operated by central banks during the



entire period in Slovenia and two thirds of the time span in the Czech Republic.Table no. 1

Descriptive Statistics of Exchange Market Pressure

Source: Author’s calculations

One can also point out that the most appropriate exchange rate regime is the crawling band with a tight fluctuation corridor since no foreign exchange crisis, defined as quarter when the emp-measure exceeds the mean value by 1.5 standard deviation, occurred when this regime was being applied. On the other hand, when the fixed or crawling pegs were in operation, the emp-band was escaped in five out of 36 quarters observed. Flexible exchange rate arrangements such as managed floating or crawling band with a wide fluctuation corridor witnessed five crises during the 124 quarters.

Figure no . 1

Exchange Market Pressure in the Czech Republic

Czech Republic

Hungary Poland Slovenia

mean -0.008086 0.049493 0.007103 0.013818 median -0.005112 0.034319 -0.002229 0.012880 min -0.103579 -0.063994 -0.390981 -0.053909 max 0.099353 0.443237 0.240733 0.187736 standard deviation

0.044761 0.098472 0.101864 0.041055

upper limit 0.059055 0.197199 0.159933 0.075399 lower limit -0.075228 -0.098214 -0.145726 -0.047764

-0.15

-0.1

-0.05

0

0.05

0.1

0.15

1993

Q2

1994

Q1

1994Q

4

1995

Q3

1996

Q2

1997

Q1

1997Q

4

1998Q

3

1999

Q2

2000

Q1

2000Q

4

2001Q

3

2002

Q2

2003

Q1

2003Q

4

2004Q

3

managed float fixed peg

AE


Figure no. 2 Exchange Market Pressure in Hungary

Figure no. 3 Exchange Market Pressure in Poland

-0.2

-0.1

0

0.1

0.2

0.3

0.4

0.5

1993

Q2

1994Q

1

1994Q

4

1995

Q3

1996Q

2

1997

Q1

1997

Q4

1998Q

3

1999

Q2

2000

Q1

2000Q

4

2001

Q3

2002

Q2

2003

Q1

2003

Q4

2004Q

3

fixed peg crawling band crawling band ± 15%

-0.4

-0.3

-0.2

-0.1

0

0.1

0.2

0.3

1993

Q2

1994

Q1

1994Q

4

1995

Q3

1996

Q2

1997Q

1

1997

Q4

1998Q

3

1999

Q2

2000

Q1

2000Q

4

2001

Q3

2002

Q2

2003Q

1

2003Q

4

crawling peg crawling band independent float



-0.1

-0.05

0

0.05

0.1

0.15

0.2

1993

Q2

1994Q

1

1994

Q4

1995

Q3

1996

Q2

1997

Q1

1997Q

4

1998

Q3

1999Q

2

2000

Q1

2000Q

4

2001Q

3

2002

Q2

2003Q

1

2003

Q4

2004Q

3

Figu re no. 4 Exchange Market Pressure in Slovenia

5. Conclusion

In this paper a measure for

exchange market pressure for four CEEC was computed. We found that tensions on foreign exchange market were the smallest in periods characterized by a crawling band. Moreover, two important conclusions can be drawn. The proportion of crisis quarters is the largest in fixed pegs and the lowest volatility of exchange market pressure measured by standard deviation was revealed in Slovenia and

Czech Republic – countries whose exchange rate history is entirely or predominantly based on floating regimes. These findings would cast serious doubts on the European Commission’s requirement that the CEEC must enter ERM II (a quasi-fixed regime with a fluctuation band) and participate in it without substantial tensions on the exchange rates. The doubts gain importance if the ECB’s position to allow fluctuations ± 2.25 around the central parity is considered as decisive.

Bibliography

1. Griton, L., Roper, D. A Monetary Model of Exchange Market Pressure Applied to the Post-War Canadian Experience, American Economic Review, 1977, vol. 67, no. 4, pp. 537-548

2. Pentecost, E.J., Hoydonk Van, C., Poeck Van, A. Measuring and Estimating Exchange Market Pressure in the EU , Journal of International Money and Finance, 2001, vol. 20, no. 3, pp. 401-418

3. Vanneste, J., Poeck Van, A., Veiner, M. Exchange Rate Regimes and Exchange Market Pressure in Accession Countries, Antwerp: University of Antwerp, 2004, Access from: < http://ideas.repec.org/p/ant/wpaper/2004012.html >

4. Weymark, D.N. Estimating Exchange Market Pressure and the Degree of Exchange Market Intervention for Canada , Journal of International Economics, 1995, vol. 39, no. 2, pp. 273-295

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WAYS OF IMPLICATING MORE ACTIVELY FOR THE CONSUMERS’ ASSOCIATIONS IN PROMOTING AND DEFENDING CONSUMERS’

RIGHTS

Conf. univ. dr. Dinu Vasile Academy of Economic Studies , Bucharest

[email protected]

Abstract It is well known that in the European

Union the good functioning of the market is conditioned by the development of an active consumers’ policy which can be facilitated by the consumers’ associations that should have a permanent dialogue with the public authorities and the firms in order to identify the main problems in connection with whom there is a wide consensus. Also, the communitary strategy concerning the consumers’ policy between 2002 -2006 has established among its medium term objectives the one of implicating more actively for the consumers’ organizations in promoting the policy of protecting consumers’ rights and interests.

Taking this into consideration, among the major objectives of the consumers’ protection policy and strategy in the Romanian society (accomplishing an effective protection of life, health and security, protecting the economic interests, information and education, facilitating the access in the justice and forming the specialists in the consumers’ protection field) there is also the objective concerning the supporting of the foundation and development of the consumers’ associations and consulting them in the process of decision taking.

A real approach of the problems concerning the consumers’ associations is not possible without the involvement of the consumers’ protectio n, in a more active way, in promoting and protecting the consumers’ rights. Only in this way they can contribute substantially to the improvement of the Romanian economic climate and to the faster integration in the European Single Market.

Keywords • Consumers’ associations; • Consumer protection; • Active consumer policy.

Rezumat

La nivelul Uniunii Europene este recunoscut faptul ca buna functionare a Pietei Interne este conditionata de dezvoltarea unei politici active a consumatorilor care poate fi facilitata de asociatiile consumatorilor care trebuie sa poarte un dialog permanent cu autoritatile publice si agentii economici pentru a identifica problemele prioritare în legatura cu care exista un larg consens.

De asemenea, strategia comunitara privind politca consumatorului în perioada 2002-2006 au prevazut printre obiectivele sale pe termen mediu si pe cel al implicarii mai active a organizatiilor de consumatori în promovarea politicii de protectie a drpturilor si intereselor consumatorilor.

Printre obiectivele majore ale politicii si strategiei vizând protectia consumatorilor în societatea româneasca (realizarea unei protectii eficace a vietii, sanatatii si securitatii, protectia intereselor economice, informare si educare, formarea specialistilor în domeniul protectiei consumatorilor si înlesnirea accesului la justitie) se regaseste si obiectivul referitor la sprijinirea înfiintarii si dezvoltarii asociatiilor de consumatori si consultarea acestora în procesul decizional.

O abordare a problemelor ce privesc asociatiile consumatorilor nu este posibila fara implicarea protectiei consumatorilor într-o maniera mai activa în promovarea si protejarea drepturilor consumatorilor. Numai în acest fel acestea pot contribui substantial la îmbunatatirea climatului economic din România si la integrarea rapida în Piata Unica Europeana.

Cuvinte cheie

• Asociatii ale consumatorilor; • Protectia consumatorilor; • Politica activa a consumatorilor.



1. Objectives

The good functioning of the market is conditioned by the development of an active consumers’ policy that recognizes their place and important role.

The purpose of an active policy is not to protect the consumers as much as it is to give them the means to protect themselves. These means refer mainly to the following:

• The fundamental rights of the consumers;

• Their influence as electors on the sectorial policies of the governments, that have to evaluate clearly the short term advantages of the producers in comparison with the long term advantages of the consumers and of the market;

• The freedom to choose or to refuse a product, which has to offer to the consumers a real power over the producers.

Considering the active role that the consumers’ protection associations must have in the process of accomplishing an efficient protection of the consumers, as part of the development strategy of the Romanian civil society, a series of objectives have been established:

a) in the legislative field

- elaborating new laws concerning the organization and functioning of the non-governmental organizations;

- elaborating the normative acts necessary for the settlement of the rapports between the non-governmental organizations and the institutions of the state or local authority, depending on the specific character of the activity fields and objectives of these organizations;

- elaborating the necessary settlements for financing some initiatives of the consumers’ associations.

b)in the institutional field - achieving the legal mandate

given to the Office for Consumers’ Protection concerning the support for the founding, development and participation of the consumers’ protection associations to the decisional process;

- improving the procedures of taking-over and solving of the complaints and notifications by the bodies of the public administration in the field of consumers’ protection.

c) in the operational field - supporting the structuring of

the consumers’ protection associations from the bottom to the top by encouraging the founding of local associations, local federations and confederations at a national level;

- elaborating a guide for the founding and development of the consumers’ protection associations;

- supporting through legal consultancy and documentation;

- granting subventions to the representative consumers’ associations that sustain a program for effective actions in favor of protecting the rights and interests of the consumers;

- achieving the dialogue in the consumers’ protection field in the Consulting Councils for Consumers’ Protection at a local and central level.

A great part of these objectives, especially in the legislative field, have been accomplished in the 15 years of transition, however the Report concerning the progress achieved by Romania in its way to integration, published by the European Union Commission, underlines the fact that the most important measure to be taken is: “improving the representation of the consumers’ organizations and the necessity of their involvement in a more active way in promoting the rights and interests of the consumers”.

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2. Present situation

A series of data gathered by the National Authority for Consumers’ Protection (ANPC) considering 2004, emphasize an insufficient structuring of the consumers, both horizontally and vertically, and also a low level of combativeness of the consumers’ associations regarding the protection and promotion of the consumers’ rights and interests.

Analyzing the present situation of the consumers’ associations, in an administrative and financial way but also from the point of view of the activity developed by them, the following aspects are emphasized:

• the existence of 130 associations, 16 federations and one confederation, that develop their activity in very difficult conditions, starting with location staff problems and ending with the representation ones, for example almost half of them didn’t have their own offices and the material equipment necessary to develop their activity: telephone, fax, computer, xerox, etc;

• due to their reduced number, there is a big part of Romania that is not covered and in the rural environment where there is an acute necessity for consumers’ protection, the absence of the associations is almost complete;

• most associations have a low number of members due to the decrease of the charitable and voluntary behavior of the Romanian citizen, caused in great part by the economic situation our country is going through;

• very low amounts allocated for the consumers’ associations from the state budget, through the National Authority for the Consumers’ Protection, an average of 3-4 million lei for one association per year;

• very low number of young persons or persons with high education

regarding both the members of the associations and their election in the boards of the associations;

• low number of actions developed with the purpose of protecting and promoting the consumers ’ rights and interests, only 51 associations developed actions of information and education, notifications and complaints, counseling and collaborating with the bodies of the public administration or with other non-governmental organizations. A study of APC Romania emphasized that the number of actions of an association in one year was: 2 regarding information and education through the media, 24 actions of counseling, 56 notifications and complaints, 3 actions of collaboration with other non-governmental organizations and 0,5 symposiums and conferences;

• the lack of a relational system of cooperation and collaboration between the consumers’ associations;

• the lack of relevant and updated studies in the consumers’ protection field, in order to support the activity developed by the consumers’ associations;

• the ignorance of the facilities given by the valid legislation by some associations – regarding their rights to be supported, consulted and represented at a central and local level – corresponding to the rare or absent applying of those by the state institutions, that know very well this field. 3. Measures and directions for action

Considering all the things mentioned above and the fact that the strategic objective of the Romanian Government is the creation of an European type institutional system capable to insure consumers’ protection, it is necessary to adopt measures and specify directions for action in order to implicate more actively the associations in



promoting and protecting consumers’ rights:

a) Supporting the process of structuring the consumers both horizontally and vertically (promoted through a Government Decision) so that they form associations in all the towns of the country, respectively federations at the level of all counties and the National Cou ncil of the Consumers’ Associations, their legal representative at the central level. In this way, the consumers will be present, in one voice at the social dialogue between the government, employers and trade-unions, because they are the beneficiaries of the negotiation efforts, and they are those that give a final verdict on any production activity.

b) A better financing of the consumers’ associations from the state budget in order to insure the necessary conditions for an efficient activity taking into account that they can not accept sponsoring from firms due to an obvious conflict of interests. This is required especially because the consumers’ contribution to the state budget’s incomes is very big due to the indirect taxes supported by the consumers: Value-Added Tax (TVA), excises, and customs taxes. In addition to the state budget financing, a very important possibility for self -financing which can be used by the consumers’ associations, is the non refundable financial assistance from the European Union, as a result of signing the Agreement Memorandum by Romania, regarding the financing of actions in support of the policy for consumers’ protection for 2004-2007.

c) The inclusion and more active participation of the consumer associations’ representatives in the institutional structures such as: the International Committee for Supervising the Products, Services and Consumers’ Protection Market; Consultative Council for Consumers’ Protection; the Commission

for Abusive Clauses; the Commission for Products’ Secur ity; the Romanian Standardization Organization (ASRO); the Accreditation Association from Romania (RENAR) etc.

d) The establishment of the National Consumption Institute as a non-governmental and public utility organization which can develop activities of information, counseling and education of the consumers and of logistic support of the consumers’ associations.

e) The training of the specialists of the non-governmental structures in the field of consumers’ protection, through programs organized by ANPC and the county Offices for Consumers’ Protection. Reconsidering by the authorities of the role that the consumers’ associations have in the system for supervising the products and services market and improving the dialogue between the state institutions and cons umers’ organizations especially concerning the elaboration of the normative acts and national strategy in the consumers’ protection field.

From an operational point of view, consumers’ associations have to structure their activity in 3 main directions:

a. for the consumers through actions that refer to:

• correct and accurate information on the essential characteristics of the products and services offered by the firms;

• educating consumers as a permanent and long action;

• a program of information and education of the youngsters in school;

• elaborating studies and comparison tests.

These directions of action of the consumers’ protection associations must be accomplished through all the possible means of information, documentation, communicating and transmitting:

- newspapers, magazines, publications, especially through specific

AE


publications and brochures adapted to communication with the consumers;

- radio, television, video or audio cassettes and specific films adapted to this purpose;

- direct telephone links, fax, e-mail;

- posters, leaflets, advertising and attention notices;

- consulting, public relations, seminars, symposiums, round-table discussions, public debates etc;

- assisting and supporting consumers in the purchasing of the products or hiring services;

- elaborating their own website where they present the association’s preoccupations regarding the protection and promotion of their rights and interests and an e-mail address for collecting notifications and complaints from the consumers.

b. for the firms through actions that refer to:

• supervising the process of marketing products and services;

• actions for stopping deliveries or taking back off the market products that can endanger life, health and security of the consumers;

• concluding a collaboration protocol with the Chamber of Commerce, Industry and Agriculture for conferences, round-table discussions or symposiums with topics on legislation in the consumers’ protection field;

• the conclusion of some collective agreements negotiated with the producers’ and distributors’ associations, concerning

contractual clauses, commercial practices or inadmissible sales methods.

c. for the government or other public authorities through actions that refer to:

• establishing norms and specific settlements or improving the existent ones;

• attracting the representatives of the consumers’ protection associations in conditions of social partnership with the bodies of the local public administration;

• including the representatives of the consumers’ protection associations in the institutional structures in the consumers’ protection field. 4. Conclusions

The consumers’ protection doesn’t only mean control actions finalized with fines, authorization withdrawals and closing of firms, but also education, information, counseling, protection and promotion of the consumers’ rights and interests. As a result, the purpose of a consumers’ protection policy has to be both the protection of the consumers but also offering them the means to protect themselves. In this way, the consumers’ protection associations have a very difficult task, on the one hand transforming the passive consumer into an active one, and on the other hand making up a dialogue with the firms and public authorities in order to correct the flaws in the functioning of the market which affect the consumers’ rights and interests.

Bibliography

1. Dinu, Vasile. Protectia drepturilor si intereselor consumatorilor, Editura Alpha, Buzau, 2001, pp 91 – 100

2. Dinu, Vasile si Gradinaru, Giani. CD-book, ISBN 973- 594 – 554 – 1 ,,Premise ale dezvoltarii durabile în economia româneasca”- Model operational de crestere eficientei



manageriale a asociatiilor de consumatori pentru promovarea unei politici active în perspectiva Integrarii României în UE, Editura ASE, Bucuresti, 2004

3. Stanciu, Costel (coord). Institutiile statului si organizatiile de consumatori, Editura Oscar Print, Bucuresti, 2004, pp. 91 – 104

4. Zamfir, Ion. Manual practic de protectia consumatorului, Editura NVA World Galaxy Trading, Ploiesti, 2005, pp. 57 – 74

5. xxx Codul consumului (Consumption Code), Editor National Authority for Consumers’ Protection, Bucuresti, 2005, pp. 126 – 146

6. www.guv.ro/Obiective / Program de guvernare / Capitolul 19 7. www.anpc.ro/ONG 8. www.apc-romania.ro/Prezentare

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INSIGHTS IN INTERNATIONALIZATION OF TOURISM FIRMS

Lecturer Adriana Corfu, Ph.D. Conf. univ. dr. Puiu Nistoreanu University of Aveiro Academy of Economic Studies, Bucharest [email protected] [email protected]

Abstract

The international dimension of tourism industry is becoming increasingly important and complex in the world of economy. Despite this increasing prominence little is known about the internationalization of tourism firms. This paper attempts to examine the concepts underpinning the notion of internationalization in light of today’s changes and challenges. In addition, it is our purpose to reflect on how the tourism firms could internationalize in an already “born global” world, where the “instantly international” outlook is becoming, nowadays, increasingly prevalent. Even though space does not permit a full approach, we hope to provide the necessary outline.

. Keywords

• Internationalization; • Tourism; • Small and Medium Enterprises; • Strategic management.

Rezumat

Dimensiunea internationala a industriei turismului este din ce în ce mai importanta si mai complexa în economia lumii. În ciuda acestei cresteri, se stie putin despre internationalizarea firmelor de turism. Încercam în lucrarea de fata sa examinam conceptul de internationalizare, prezentându-i schimbarile si provocarile actuale. Ne propunem de asemenea sa analizam modalitatea în care firmele de turism ar putea sa se internationalizeze într-o lume “nascuta globala”, unde imaginea internationala a devenit în zilele noastre tot mai importanta. Chiar daca spatiul nu ne permite o abordare în detaliu, speram sa oferim elementele necesare unei abordari complete.

Cuvinte cheie

• Internationalizare; • Turism; • Întreprinderi mici si mijlocii; • Management strategic.

1. Introduction

As already known, many industries are increasingly becoming international, or even global. Factors like the rapid technological change, the converge nce of consumers’ tastes and the increasingly world-wide competition have led companies to scale, scope and learning economies, which in turn, have motivated companies through international

expansion. In the light of these changes and challenges, the international dimension of tourism industry is becoming increasingly important and complex. According to WTO, 2004, within the EU, tourism accounts for 6% of the Gross Domestic Product (GDP), is responsible for the creation of 2 million enterprises and 20 million jobs, with new 100.000 jobs per year (3% growth). Europe is the number one destination in the world,



receiving almost 55% of worldwide international tourists. This high share is partially due to the close proximity of the many relatively small European countries which stimulates intra-European travel. There were over 416,4 million international tourist arrivals in Europe in 2004, and these are expected to increase to 717 million by 2020 (WTO, 2005). It is therefore undoubtedly a major industry which will become even larger in the future.

Despite this increasing prominence of international tourism in national, European and global economies , little is known about the internationalization of tourism firms. It is therefore timely to examine the concepts underpinning the notion of internationalization in light of today’s changes and challenges. This is true all the more in an environment highly dominated by Small and Medium Enterprises (SMEs) (The European Commission defines SMEs as all organisations with less than 250 employees and less than 50 million euros turnover. Within the SME category, a micro-enterprise is defined as an enterprise which employs fewer than 10 persons and whose annual turnover does not exceed 2 million euros. According to data from 2003 from the Observatory of European SMEs, 99,8% of European Union enterprises have less than 250 employees. 92% of them have less than 10 employees (Teixira and Diz, 2005)), most of them as family-owned businesses, where the classical theories not always do fit.

In addition, is our purpose to reflect on how the tourism firms internationalize in an already “born global” world, where the “instantly international” outlook is becoming, nowadays, increasingly prevalent (McAuley. 1999). So, questions such as What is the purpose of internationalization? What are the expected benefits or outcomes? What are

the values that are underpinning it? Who are the main actors, stakeholders, and beneficiaries? Do firms go abroad for compensate for their weakness at home? What are the positive consequences, what are the unintended results, and what are the negative implications? What are the policy and funding implications of increased emphasis on internationalization? Are governments addressing the issue and moving forward? are the main guidelines of this paper. Even though space does not permit a full discussion, we hope to provide the necessary outline. 2. Brief Overview of the Internationalization Process

The literature on internationalization is rich and complex and the review suggests many schools of thought. For example, Mungall and Johnson (2004) summarize the following:

• The establishment chain model states that the internationalization is a process that follows an orderly sequence of growth in incremental stages, with knowledge and commitment the major elements of this model; i.e. more a company learns about the new markets, more resources are committed. A firm initially employs entry modes with low resource commitments, like export, and then step up to modes requiring greater commitment, and consequently risk, where the final step is production abroad. An inexperienced firm is assumed to be uncertain and unwilling to commit to many scarce resources. As experience with foreign operations increases, uncertainty is reduced which results in more commitment and more advanced entry strategies.

• Internalization, foreign direct investment and electic paradigm - Internalization paradigm outlines that companies have to avoid transaction costs

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by internalizing the intermediate product market. Foreign Direct Investment (FDI) theory postulates that, in addition to the internalization advantages posed by the previous school, there is a need for some unique firm specific advantages that must be exploited before (In the hotel industry, for example, firm specific advantages are global reservation systems (GRS) and brand equity which allow international operators economies of scale and scope.). Only when these are combined with advantages derived from the international location, international companies gain an edge over the local operators. Finally, the electic model considers internationalization within the framework of three types of interrelated advantages: ownership, location and internalization (OLI).

• Network theory refers that firms are engaged in relationships between customers, producers, suppliers, distributors, competitors and governments (e.g. joint ventures, strategic alliances, licensing agreements, subcontracting, joint research and development, inter alia ).

• Segal-Horn paradigm suggests that, owing to fundamental changes in the nature of services, these developments have led to increased concentration, with service industries moving away from highly fragmentized markets towards greater concentration, with clear market leaders.

The final school of thought combines elements from several disciplines, including transaction cost and agency theory, corporate knowledge and organizational capability theories in the production of their syncretic model which addresses some of the key decisions behind the choice of methods of expansion (Contractor and Kundu. 1998). Other authors introduce (and use in their research studies) the Uppsala model, which assumes that the internationalization of a company is a path

dependent learning process. According to this model, internationalization is considered to be the result of interplay between increasing commitments to and evolving knowledge about foreign markets. In fact, it is often associated with two concepts: the psychic distance and the establishment chain (Lommelen, et al. 2002). The psychic distance refers to the fact that firms first enter markets culturally and geographically close and gradually expand in markets characterized by greater cultural and geographical distance. The notion of establishment chain has already been mentioned (see previous page). By believing that psychic distance and establishment chain are not the only possible manifestation of learning, about two decades after the model been put forward, Johansson and Vahlne extend their original model with a third concept: the network perspective. Despite its conceptual difficulty, there is a range of studies using this theoretical platform, most of them conducted by academicians from Uppsala, Sweden (Teixeira and Diz. 2005).

In more recent research, however, authors like Tallman and Fladmoe-Lindquist; Lloyd-Reason and Mughan, Fillis (cit. in Mungall and Johnson. 2004, pp. 279) have drown on marketing and entrepreneurial literature, by proposing alternative methodologies; they consider the level of learning and internal resources within the firm, and the role the owner plays in the international development of the company. Also the global vision and the cultural orientation of the owner, as well as the use of technology to exploit advantages in the marketplace, are seen as key factors in the internationalization process.

Concerning the internationalization of service companies, where tourism belongs, literature review suggests that researchers involved in this area use, as starting point, a combined framework,



where several existing theories are taken into account. Overall, the Uppsala model and the theory of networks are most often included in the theoretical foundations of service internationalization.

The company’s international activities can be divided into operations (e.g. production, sales) and strategic activities (e.g. internationalization of capital, research and development, headquarter function). The operational internationalization derives from the need for seeking new markets, lower costs and resources. On the other hand, the low level of home embeddedness is what makes companies to engage in a strategic internationalization process. Such embeddedness is a result of strong synergies with the government, of cultural affinity, of the existence of well-functional national innovation systems, well-developed infrastructures and strong local clusters. At the same time, is quite assumed that, over time, the internationalization process has moved from being predominantly operational driven to becoming more strategic oriented.

Firms take different approaches to global expansion and implement vastly different strategies. Though the international strategies deployed by firms apparently vary based on the national origins of firms, there is no guarantee that a successful strategy duplicated by another firm will necessarily yield the same result. However, similar patterns occur with some regularity for a variety of firms (Kotabe and Aulakh. 2002).

On the other hand, there is considerable evidence that small open economies tend to be more internationalized with firms competitive in a few niche sectors or clusters (for example, food sector in Denmark, forestry and pulp and paper in Finland, oil and gas in Norway). The size per se and the limited resources could be the reasons for

such trend. At the same time, small countries are becoming more dependent on their multinational enterprises (MNE), letting themselves in a vulnerable position. Increased globalization pressures force such enterprises to redesign their activities abroad, which sometimes could not coincide with the own country’s policy, strategies or goals. Despite their operational level abroad, these companies, cluster-dependent, tend to maintain the strategic activities at home. 3. Small Firms in Tourism Internationalization

Travel and tourism is considered one of the fastest growing industries and the major contributor to the worldwide GDP today. Moreover, for some destinations, the share of the tourism market can be the only way to keep the region alive. The generalised expansion of tourism, along with the growing dispersion of tourists and the diversification of tourist destinations, has lead to a growing importance of emerging destinations, most of them in Asia and East Europe. For example, the main winners in terms of tourism growth in 2004 in the European market were emerging destinations in Central and Eastern Europe – and notably Estonia, Lithuania, Bulgaria, the Czech Republic, Romania and Slovenia (WTO 2004). Global Insight (ETC 2005) estimates that Eastern Europe will be the second fastest growing outbound travel market between 2004 and 2009, behind Asia. The growing importance of these markets as tourism destinations has been originating massive investment by economic agents world-wide and a challenge to foreign enterprises to enter markets globally.

The question, however, still remains the same: How could small and medium tourism enterprises (SMTEs) act in a world of competitiveness, growth and

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profitability? Any way, there are some pros and cons, and the expression “small is beautiful” not always is shared with the same conviction between authors. Advantages often relate to the small size and independence that allows entrepreneurs the flexibility that larger organisations often lack. It specifically means that this flexibility allows these firms to adapt to market changes and be pro-active, often driving a contagion effect for innovation in proximate firms and fuelling embeddedness of knowledge. Many of the disadvantages occur due their lack of economies of scale and scope, resulting in high fixed costs and relatively high costs per unit. These small scale businesses also tend to lack qualified skills, finance, and lobbying capacity, often resulting in instability and high rates of firm mortality.

SMTEs can cope with their internal limitations and threats of the global market by improving their strategic management vision, and thus develop strategic positioning by cooperating with other tourism industry partners, establishing strong partnerships with private sector operators and with the public sector.

These partnerships should encourage the involvement of more stakeholders and form a network of organisations, which can evolve into clusters if these networks have a common strategic orientation, permitting them to gain capacity to internationalize and gain new markets. Clearly, governments and non-governmental organizations (NGOs) have an important influence on these partnerships, not only through an active participation, but also through policy, funding, programs, and regulatory frameworks, enforcing the international dimension of tourism, in general.

However, understanding how to seek for global business strategies, how to achieve effective cross-border integration

and coordination of activities and thus, how to generate a sustainable competitive advantage becomes even more complicated in a global industry, with some part of the value chain belonging to the country of origin of the tourist and the remaining to the countries that are destinations, and extremely dependent on information and communication industries (Corfu, Laranja and Costa, 2003). This will only be possible with the effective use of technology (Buhalis and Main, 1998), particularly of the Inter net. In fact, it is more than a decade since hyped stories about the ability of the “net of networks” in putting together “actors” across the tourism industry has caused much of a stir in the minds of academics, practitioners and public policy makers, among others. In the last decade, the advent of the Internet, with worldwide users topping about 1 billion in mid 2005 (C-I-A, 2004), has marked the tourism industry which has already reported dramatic changes in its structure, with new competitors entering the market and old ones leaving on a day-to-day basis and with customers wishing more frequent, but shorter travel, last-minute reservations, global advice, service quality and market transparency.

These should ideally lead SMETs to differentiated tourism products, by capitalizing the benefits of economies of scope and at the same time, by matching the demand of post-modern tourist - e.g. gather recreational micro-services on their own and form their customized holiday - at lower cost (Corfu and Kastenholz, 2005). There is no doubt that the Internet is nowadays the most comprehensive and universal medium, able to provide managers with a set of useful tools for, on time, generating synergies between clients and companies, in general. To do this, the way managers think needs to adapt.



4. Conclusion

This paper aimed, on one hand, to review concepts and theories related with the internationalization process. On the other hand, authors tried to attend some

actual questions on tourism firms’ internationalization. Attention was given to specificities of SMETs, as well as to the importance Internet might have for small and medium tourism enterprises in seeking for global business strategies.

Bibliography

1. Buhalis, D., and Main, H. Information technology in peripheral small and medium hospitality enterprises: Strategic analysis and critical factors, International Journal of Contemporary Hospitality Management , 10(5): 198-202, 1998

2. C-I-A (2004). Worldwide Internet users will top 1 billion in 2005. Retrieved February 17, 2005, from http://www.c-i-a.com/pr0904.htm

3. Contractor, F.J., and Kundu, S.K. Franchising vs. company-run operations: modal choice in the global hotel sector , Journal of International Marketing, 6(2): 28-53, 1998

4. Corfu, A., and Kastenholz, E. The Opportunities and limitations of the Internet in providing a quality tourist experience: the case of “Solares de Portugal” , Journal of Quality Assurance in Hospitality and Tourism, 6(1/2): 77-88, 2005

5. Corfu, A., Laranja, M., and Costa C. Evaluation of tourism website effectiveness: Methodological issues and survey results. In Proceedings from the 10th International Human Computer Interaction 2003, jointly with Symposium of Human Interface (Japan) 2003, 5th International Conference on Engineering Psychology and Cognitive Ergonomics, 2nd International Conference on Universal Access in Human-Computer Interaction , 1, 753-757, Lawrence Erlbaum Associates Publishers, 2003

6. Kotabe, M., and Aulakh, P.S. Emerging Issues in International Business Research. Cheltenham: Edward Elgar, 2002

7. Lommelen, T., Matthyssens, P., and Pauwels, P. Accelerations in the internationalization process of logistics firms, Paper presented at 28th Annual Meeting of the European International Academy in Greece, 2002

8. McAuley, A. Entrepreneurial instant exporters in the Scotish arts and crafts sector, Journal of International Marketing, 7(4): 67-82, 1999

9. Mungall, A., and Johnson, C. Strategic and structural variables in internationalization: the case of Swiss Tourism SMEs. In R. Thomas (Ed.), Small Firms in Tourism - International Perspectives. Oxford: Elsevier , 2004

10. Teixeira, S., and Diz, H. Estratégias de Internacionalização, Lisboa: Publisher Team, 2005

11. WTO (2004). European Integration in the Era of the European Union’s Enlargement and the Development of Tourism, Malta

12. WTO (2005). Tourism Highlights, Madrid

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THE ROLE OF CRITICAL THINKING, ACADEMIC ENTREPRENEURSHIP AND TALENT IN THE ECONOMIC

DEVELOPMENT

Lector univ. dr. Nela Popescu Academy of Economic Studies Bucharest

[email protected]

Abstract

In general sense, the mission of universities has not traditionally involved a consciousness of the need to be wealth creating in the direct sense. However, the rise of the knowledge economy has forced them to become aware of the importance they have for the establishment of future regional ‘constructed advantage’. They have become vital actors in the knowledge society and economy. It is important however to take a broader view that includes use of university capabilities in support of economic development, public and social policy, cultural engagement. Cultural activity and industries are important for economic activity, science is part of our culture, the social sciences have roles in all three domains, and all three areas interact strongly. Consolidate links to different stakeholders (stakeholders include students as key members of the academic community, government at all levels, enterprise and business, different social and cultural actors), universities must respond to their needs through teaching, research and dissemination of results and knowledge transfer activities which serve to promote economic growth and competitiveness through creating and exploiting new knowledge.

Keywords

• Constructed advantage; • University; • Talent; • Critical thinking; • Economic growth.

Rezumat În mod traditional si în sens general,

misiunea universitatilor nu se baza pe constientizarea rolului de a fi generatoare de bunastare, în sens propriu. Economia cunoasterii le-a fortat însa sa devina constiente de importanta pe care o au în construirea unui viitor avantaj pe piata, fie ca este vorba de firme, guvern sau alti actori sociali. Se impune însa o perspectiva mai larga care sa permita utilizarea resurselor de care dispun universitatile în scopul promovarii dezvoltarii economice, politicilor publice si a celor sociale, precum si a implicarii culturale. Activitatile din sfera culturala si industriala sunt importante pentru dinamica economica, stiinta fiind parte a culturii noastre, stiintele sociale având rol în toate cele trei domenii de activitate enuntate anterior, interconditionându-se reciproc. Consolidându-si legaturile cu diferiti actori (studenti, guvern, întreprinderi si alti actori sociali si culturali) universitatile pot raspunde mai bine cerintelor acestora, prin cercetare, învatamânt si transfer tehnologic, contribuind astfel la promovarea cresterii economice si a competitivitatii, prin crearea si exploatarea de noi seturi de cunostinte

Cuvinte cheie

• Avantaj creat; • Mediu academic; • Talent; • Gândire critica; • Crestere economica.



1. Introduction

In the old economy, regional competition revolved around the competition for firms. The location decisions of firms drove regional economies, and the location decisions of people followed from location of firms. For regions, the key was to combine endowments of natural resources or energy with advantages of transportation systems, labor costs, and/or business incentives to attract firms and industry. The knowledge economy dramatically alters this calculus. In the knowledge economy, those places that have talent thrive, while those that do not decline. Knowledge workers are both highly mobile and eagerly sought after by technology employers, and thus have the option of locating virtually anywhere they desire.

In a world where new ideas, new processes and new technologies can be communicated and implemented with unprecedented speed, the capacity of society both to create and introduce beneficial innovation is vital to its economic success and its social and cultural vitality. A society that fails to create new intellectual capital, which fails to exploit it, or is unable to make decisions about the direction of change, will be a derivate society, dependent upon inspiration from elsewhere, buffeted by international trends and unable to play a leading role in global development. It is the perspective that has created the aspiration of the European Union to be “the world’s leading knowledge-based econom y by 2010”. 2. Talented human capital and constructed advantage

Now it paid more attention to ‘constructed advantage’ in comparison to other well-known forms of economic

advantage, as follows: comparative advantage and competitive advantage. The idea of comparative advantage, deriving from David Ricardo and trade theory, explained economic welfare in terms of initial resource endowments and trade in these between regions and nations. However, by the mid-1970s visible cracks were appearing in the economic models and frameworks that characterize pure comparative advantage. Thus countries with a large labour supply would naturally export goods that were labour ed intensivelz (e.g. China) while countries that were, say technologically advantaged (e.g. United States) produced and exported technologically advanced products. The paradox arose when advanced economies exported labour intensive goods as well as technologically intensive goods. The key weakness was the failure to acknowledge technological process change as well as product innovation being endogenous to economic growth. Porter referenced competitive advantage of firms in which distributed supply chains and the role of large domestic markets became accepted as being central to explanations of inter-firm and firm -market success. Intra-industry trade and localized demand conditions for market competitiveness were highlighted. But no explanation was offered on the stimulus for why some regions prosper and others do not, and the emphasis on markets meant crucial funding and policy support by the public sector was largely ignored.

The analytic observations of the two preceding perspectives do not embrace the new dynamics of innovation and the capability to exploit them that are keys to growth. The ‘new competitive advantage’ highlights regional development economics, the dynamic of which draws upon constructed advantage. The key characteristics of this are captured at three levels: economy – regionalization of economic development, integration of

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knowledge generation and commercialization, smart infrastructure, strong local and global business networks; governance – strong policy-support for innovators, enhanced budgets for research, vision-led policy leadership, global positioning of local assets; community – sustainability, talented human capital, creative cultural environment.

The rise of knowledge economy radically alters the ways that cities and regions can establish and maintain ‘new competitive advantage’. The key to success in the old economy was simple – costs. In the mass production era, regions established competitive advantage via advantages in natural resource endowments, transportation access, the cost and productivity of physical labor, and by reducing the overall costs of doing business. Driven to reduce costs, firms selected locations that provided low-cost land, cheap or highly productive physical labor, and a cost-conscious business climate. Regional development strategies typically emphasized the use of so -called business incentives designed to win over businesses by pushing their costs even lower.

In the knowledge economy, regional constructed advantage comes to places that can quickly mobilize the best people, resources, and capabilities required to turn innovations into new business ideas and commercial products. Leading regions establish constructed advantage through their capabilities. They are vehicles for resource mobilization that can almost instantaneously bring together the resources required to launch new businesses and turn innovations into successful products. For these reasons, the nexus of ‘new competitive advantage’ shifts to those regions that can generate, retain, and attract the best talent.

The talent is the critical factor of production in the knowledge economy. In previous eras, nations and regions could

prosper because they had strategic locations near raw materials or on major transportation routes. But today, it is the ability to attract talent that creates regional constructed advantage : those that have the talent win, those that do not lose. In this regard, the “quality” of a city or region has replaced cost and access as the pivot point of new competitive advantage. 3. The mission of universities in economic development

Universities are the indispensable players in the advancement of scientific knowledge, which continuously seeds new generations of applied research, scientific breakthroughs and streams of new products that enhance our lives and strengthen our economy. Universities play a central and strategic role in educating and training the scientists, teachers, researchers, entrepreneurs and other skilled workers that fuel innovation in high technology and the knowledge industries that are the primary drivers of successful regional economies today and are predicted to be the drivers of the global economy well into the future.

The university has become a factor of production in a knowledge economy and an increasingly direct source of economic development at the national and regional levels. The role of universities, in particular MIT and Stanford, in stimulating regional economic development , has been widely recognized.

Nevertheless, there is a tendency to assume that a university in one country is basically similar to a university in another. However, strong differences can also be found. They especially exist between countries in which universities are basically elements in a state bureaucracy, with basically similar levels of prestige and funding across schools, like eu. By contrast, in the US, even state universities operate as relatively independent entities



in competition with their peers, and aspiring peers, in their own region as well as in other parts of the country.

Despite differences, commonalties emerge as universities make the transition from teaching to research institutions and from “ivory tower” to entrepreneurial universities. These transitions are taking place at different rates in various countries and regions, sometimes successively, other times simultaneously. They may even occur in seemingly counter-intuitive reverse order, for example, when the introduction of an economic development mission stimulates the development of research projects, initially focused on local problems.

In the late 19th and early 20th century us academia went through the first academic revolution, introducing research into the academic science and making it more or less compatible with teaching, at least at the graduate level. Many universities in the USA and worldwide are still undergoing this transformation of mission. At the same time, the increased salience of knowledge and research to economic development has opened up a third mission, the role of the university in economic development.

The traditional thesis of what to do in a declining, or even growing regional economy, which still holds today, is to improve the business climate. The typically strategy is to reduce taxes, which is believed to be the best way to attract or retain firms. A second related tactic is to offer subsidies, either to induce firms to relocate or to retain a firm threatening to move elsewhere.

The integration of academic and business goals is the basis of the entrepreneurial university and knowledge -based regional economic development. The “third mission” brings into focus the classical discussion between “academic freedom” within independent universities

and “the university in service of society”, although in a new environment.

Increasingly, in the USA, Europe and elsewhere, an entrepreneurial university, integrating, teaching, research and economic development is a common element in the development of knowledge-based regional economic growth. In the USA the entrepreneurial university engaged in economic development is an overlay on an academic entrepreneurial system where universities and researchers search for research resources. European universities are often in the situation of establishing a liaison office to link with industry while simultaneously attempting to build a research base at institutions traditionally devoted to teaching. The data from a survey of representative universities (including traditional, technical and new or specialist universities) in six EU countries show most academic entrepreneurship activity devoted to varieties of industrial or national science council research, consultancy and external training. Less activity was devoted to licensing, spinout or research marketing.

Nevertheless, the introduction of an explicit third mission has introduced strains among the older universities and emerging regional colleges and led to a debate over the purpose of the university. One thesis is to strengthen and maintain the older foundations as centers of basic research. Another is to support the development of regional colleges as foci of applied research oriented to local economies. In any event, the humboldtian paradigm, based on an elite model of higher education, has been superceded, not only by the massification of higher education, but though the incorporation of a variety of entrepreneurial elements in academic practice. Even though traditional academic ideology often lags substantive organizational change, an expanded role for the university in regional and national

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economic and social development is underway in the USA and EU.

4. Critical thinking as the essence of tertiary learning (higher education)

Critical thinking is a powerful resource in economic environment and society; although those in power might often have viewed the lack of critical thinking favorably. When we are thinking critically, we are not just thinking passively and accepting everything we see and hear. We are thinking actively. We are asking questions about what we see and hear, evaluating, categorizing, and finding relationships. Some critical thinking activities are: interpreting according to a framework, relating theory to practice, making a claim and supporting it, using appropriate evidence, making link between ideas, asking questions, evaluating, predicting, describing, analyzing, synthesizing, categorizing, establishing cause and effect, comparing and contrasting, identifying problems and solutions.

These sorts of activities would probably describe a person with critical thinking dispositions: diligences in seeking relevant information; reasonableness in selecting and applying criteria; persistence through difficulties are encountered; precision to the degree permitted by the subject and the circumstances; orderliness in working with complexity. Someone strongly disposed toward critical thinking would probably agree with statements like these: “rather than relying on someone else’s notes, I prefer to read the material myself”; “even if a problem is tougher than I expected, I’ll keep working on it”; “ making intelligent decision is more important than winning arguments”. A person with weak critical thinking dispositions would probably disagree with the statement above but be likely to agree

with these: “if my belief is truly sincere, evidence to the contrary is irrelevant”; “I prefer jobs where the supervisor says exactly what to do and exactly how to do it”; “selling an idea is like selling cars, you say whatever works”. In the Soviet higher education system focused heavily on vocational and other specialized training, subsequently spread first to its non-Russian republics and satellite states, students would sel dom engage in critical thinking, class discussion and writing. In consequence, upon acceptance (at university), for the next four years students would pursue an education focused on giving them (a) specific, limited set of vocational knowledge in their given field. Students would memorize information from textbooks and be lectured at by the professors.

All disciplines require we to ask questions, relate theory to practice, find and use appropriate evidence, evaluate, find links, and categorize. Science is often concerned with interpreting within a framework, describing, explaining, predicting, and identifying cause and effect. Management is often concerned with identifying problems and solutions, relating theories to practice, and making comparisons and contrasts. IT is often concerned with analyzing complex situations into component parts. Literature and History are often concerned with making claims and supporting them, usually in the light of particular framework of analysis (ex. postmodernism etc.). By teaching students how to think rather than what to think, and how to learn rather than what to learn, a critical thinking (liberal education) produces graduates who are better able to adapt and respond to the demands of a fast-changing economic and social environment.

Actually the knowledge environment is expanding so fast and changing so much that in about some years after graduation professional



training of graduates will be in serious need of renewal. Creative or innovative thinking is the kind of thinking that leads to new insights, novel approaches, and fresh perspectives, whole new ways of understanding and conceiving of things. By promoting critical thinking through teaching and research universities are essential elements in upholding sustainable economic development.

5. Conclusions

Entrepreneurship, along with high technology industry and the ability to attract knowledge workers, is an essential element of regional economic growth. Hence, constructed advantage is a strategic policy perspective of practical utility to business firms, associations and policy makers.

Governments worldwide recognize the value of universities in satisfying a diversity of social needs: as providers of trained personnel and credible credentials; creators of useful knowledge; as sources of entrepreneurship; as powerful attractors of business investment into a region; as sources of expertise and innovative thinking.

Some industrial companies also need to better understand and recognize the values and missions of universities. The objectives of industry (maximizing shareholder value) and of universities (maximizing public welfare) do not coincide. There is a need for alignment of the two sets of objectives by implementing agreed upon guidelines and boundaries. The parties need to understand each other much better and accept their constraints. In particular, industry should recognize that universities can take an active role and that this is beneficial to industry in the long term. Trust must be built on all sides. It should be recognized that it is not the mission of universities to bring products to the market. A holistic approach is

necessary, starting with basic science and extending up to social sciences.

Universities alone will clearly be insufficient base to make a substantial contribution to regional development beyond their current capabilities, but universities and, specifically their most accomplished research individuals, teams and centers working in a networked system connecting research producers to resource-providers and users within and beyond any specific region constitute an goldmine of potentially valuable knowledge (The National University of Singapore is routinely contracted by its government to design economic and social policies. This is in collaboration with the likes of Stanford, Penn State (Wharton), Cambridge, Copenhagen and Shanghai universities.). The role of the EU in regard to universities and regional development is to design a model or models for delivering greater resources to the greatest number of institutions needing to develop ‘constructed advantage’. The indications of movement in the ‘factories of the twenty-first century’ are suggestive of the contest between knowledge economy equity and efficiency being resolved through new forms of university and research governance, more corporate possibly less collegiate.

Critical thinking is a necessary condition for the free market economic systems. Critical thinking can be seen as having two components: a set of skills to process and generate information and beliefs, and the habit, based on intellectual commitment, of using those skills to guide behavior. It is thus to be contrasted with: the mere acquisition and retention of information alone, because it involves a particular way in which information is sought and treated; the mere possession of set of skills, because it involves the continual use of them; and the mere use of those skills, “as an exercise”, without acceptance of their results.

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Having a critical spirit does not means that the person is always negative and hypercritical of everyone and everything. A critical spirit in a positive sense means: concern to become and remain well informed; alertness to opportunities to use critical thinking; flexibility in considering alternatives and opinions; pruden ce in suspending, making or altering judgments; willigness to reconsider and revise views where honest reflection suggests that change is warranted.

Critical thinking of any kind is never universal in any individual; everyone is subject to episodes of irrational thought. Its quality is therefore usually a matter of degree and dependent on, among other things, the quality and depth of experience in a given domain of thinking or with respect to a particular class of questions. For this reason, the development of critical thinking skills and disposition is a life-long endeavor.

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Based Economy: the Role of Constructed Advantage, University of Ottawa, program of Research in Innovation Management and Economy, 2003

4. Etzkowitz, H., Aslundoch, P., Nordman, N. Beyond Humboldt: Emergence of Academic Entrepreneurship in the U.S. and Sweden, Working Paper, 2001

5. Florida, R. The Rise of the Creative Class , New York, Basic Books, 2002 6. Sole-parellada, F., Coll -Bertran J., Navarro-Hernandez, T. University design and

development , Higher Education in Europe, No. 26, 2001



ACTIVITY BASED COSTING FOR BETTER COST MANAGEMENT

K. Mohan Lecturer Ph.D. Babu P. George School of Management, School of Management, Pondicherry University, India Pondicherry University, India [email protected] [email protected]

Abstract

Implementing change in management, successfully and profitably, is the greatest challenge for modern enterprises. Innovation in strategies, marketing performance, role of competition, change in technology, change in customer needs, management initiatives are all facts of life in the global environment today. Cost management works with its customer to manage change more profitably. Activity-Based Costing (ABC) is a new methodology of product costing which measures the cost of products more accurately. Overhead allocation is much more sophisticated under this system. This paper attempts to highlight the need, importance and methodology of ABC for better Cost Management in modern enterprises.

Keywords

• Cost manage ment ; • Activities and types; • Cost and activity drivers; • Activity based costing (ABC); • ABC implementation; • ABC applications.

Rezumat

Implementarea schimbarii în management, facuta cu succes si profitabil, este cea mai mare provocare a întreprinderilor moderne. Inovatia strategiilor, performanta marketing-ului, rolul competitiei, schimbarea tehnologiei, schimbarea nevoilor consumatorilor, initiative în domeniul managementului sunt toate fapte de viata într-un mediu global din zilele noastre. Management -ul costurilor se straduieste sa faca activitatea mai profitabila. Activitatile Bazate pe Cost (ABC) constituie o metodologie noua a costului de productie care masoara mai exact costul produselor. O alocare globala este mult mai sofisticata în cadrul acestui sistem. Încercam sa scoatem în evidenta nevoia, importanta si metodologia ABC pentru un mai bun management al costurilor în întreprinderile moderne.

Cuvinte cheie

• M anagementul costurilor ; • Activitati si tipuri; • M otoare de costuri si activitati; • Activitati Bazate pe Cost (ABC); • Implementarea ABC; • Aplicatii ale ABC.

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1. Introduction

Activity-Based Costing (ABC) is a new methodology of product costing which measures the cost of products more accurately than the traditional method. Overhead allocation is much more sophisticated under this system. Identifying various levels of costs that exist, accumulating costs into related cost pools and utilizing various cost drivers to determine to manufacturing the products and rendering services are the three basic tools of Activity-Based Costing.

ABC is a modern approach to product costing, pioneered by professors Kaplan and Cooper of Harvard University. ABC is a system that reflects more accurately in product costs, those activities that influence the level of support overheads. Support overheads include such items as assembling, production planning, inspection, dispatch, set -up, tooling and similar costs.

One of the vital things today for any type of organization is cost management, for it is an attitude, a philosophy and a set of techniques to build more value at cost. The role of cost accountant focuses on reporting of past costs, cost management and provide cost details for decision -making. Many of modern days’ cost managers previously were cost accountants; their transformation is more than just a change in job title.

Most of successful organizations today have responded not only by transforming the nature of their work, but also by modifying their ways of managing. At present situation, traditional management practices that impose direction from the top levels of management down through the organization no longer may be viable, that “top-down” approach to management usually is not flexible enough to either recognize new opportunities or identity

growing problems in time to respond effectively. The business environment today emphasizes innovation and customer satisfaction, which requires cost managers to have an external orientation rather than the more traditional, internal orientation. Controlling of the cost is an art. Management and maintaining of the cost have ever welcomed by the strategic level management. 2. What is Activity-Based Costin g?

A process using multiple cost drivers to predict and allocate costs to products and services; an accounting system collecting financial and operational data on the basis of the underlying nature and extent of business activities; an accounting information and costing system that identifies the various activities performed in an organization, collects costs on the basis of underlying nature and extent of those activities, and assigns costs to products and services based on consumption of those activities by the products and services.

ABC identifies business activities performed, measures the cost and performance activities and cost objectives, assigns resources to activities and activities to cost objects; and recognizes the casual relationship of cost drivers and activities. ABC traces cost of resources to activities and then to products and services based on the use of activities.

3. Activities and Types

An activity is a work performed

within an organization. All manufacturing units or service units have various functions such as finance, accounting, human resources, production processes etc. each of these businesses and production processes is composed of defined steps or activities. An activity is a discreet unit of work for which an



organization can define inputs (resources used) and outputs. In the first stage of Activity-Based Costing, activities are identified, costs are associated with individual activities, and their associated costs are divided into homogenous sets.

An activity is also defined as an aggregation of actions performed within an organization that s useful for purposes of Activity-Based Costing. Thus, activity identification requires a listing of all the different kinds of work, such as:

• Material handling; • Inspections; • Process engineering; • Product enhancement etc.

A firm may have hundreds of

different activities. Once an activity is defined, the cost of performing the activity is determined. At this point, the firm could determine the cost driver associated with each activity and calculate individual activity overhead rates.

Activities play a vital role in cost management i.e. cost reduction and cost control. Even highly talented, experienced professionals and managers could seldom directly control costs without controlling activities that drive these costs. It could be explained in a cotton textile industry, if some of unit or batch -level activities could be improved, costs could perhaps be controlled. If certain quantum of “non-value adding waste” is removed, costs are reduced automatically. Such cost reduction is contrasted with the famous “across-the-board-cost-cuts” followed in many industries today. The distinction between these two cost reduction methods is that the larger might tend to unscientifically cut even some of the value-adding activities, which would be ultimately detrimental to the objective of such cost reduction exercises.

Activities may be classified into five types depending on the type of decision to use resources:

a) Unit Level Activities: the work efforts that transform resources into individual products and services are called unit level activities. A decision to produce more units of product or service proportionately causes more unit level activities. Unit level activities are performed for every unit of product or service.

b) Batch Level Activities: it reflects the organization’s manufacturing or service technology to perform certain activities that affect multiple units of output equally and simultaneously. A batch refers to a number of units of service or product that requires the same set up of personnel, software or equipment. Different technology allows different batch sizes and activities.

c) Product Level Activities: product level activities may include design, advertising, supervision, manufacturing and quality management that are specific to each type of product or service. These specific activities would not be necessary if, for example, the company decided it would no longer provide a certain product or service. However these product-level activities may use bot h product and facility-level human and physical resources.

d) Customer Level Activities: these activities are performed to meet the needs of specific customers. Customer-level activities may include supply and distribution if these are specific to customers.

e) Facility Level Activities: these activities may support all the organization’s processes, and are at the highest level of hierarchy. Examples of facility level activities are activities of top management, personnel, supply, distribution, advertising and promotion, research and development and so on that are common to all the company’s products, services and customers. Facility-level activities also include the work of

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service departments such as Finance and Accounting, Management Information System and Human Resources. 4. Cost Driver Base and Rate

A cost driver base is a measurable cause or driver, of performing an activity; i.e., it is what causes a cost to be incurred. Increases or decreases of the cost-driver base cause increases or decreases in the level of activity performed.

There are many possible cost-driver bases is critical to the validity of activity analysis. An appropriate cost driver base should: • Logically have a cause-and-effect

relationship with the activity and the use of resources (cost);

• Be feasible to measure; • Predict or explain activities’ use of

resources (cost) with reasonable accuracy;

• Be based on the practical capacity of the resource to the support activities.

The cost driver rate is estimated cost of resource consumption per unit of cost-driver base for each activity. 5. Traditional Cost/Actual Cost System

It is a valuation method that uses actual direct material, direct labor, and

overhead charges in determining the cost of Work-in-Progress inventory. In conventional costing, all overheads are absorbed on production volume, as measured by labor or machine hours. This means that high volume standardized products would be charged with most overheads and short run production with lower overheads in spite of the fact that short run production causes more set-ups, retooling, production planning and thereby generates more support overhead costs. Hence, traditional volume related overhead absorption tends to over cost products made in long runs and under costs products made in short runs.

ABC seeks to remove this problem by relating support overheads to products, not by production volume, by a number of specific factors known as cost drivers. A cost driver is an activity which causes cost. 6. Activity Center and driver

Activity center is a segment of the production or service process for which management wants to separately report the cost of the activities performed. Activity driver is a measure of the demands on activities and thus, the resources consumed by products and services; often indicates an activity output.

Tabel no. 1

Examples of cost drivers Typical costs influenced by cost driver

Number of production runs Production planning & scheduling, set-up, inspection, tooling

Number of dispatches Dispatch department, Invoicing etc. Number of purchase orders Purchasing department, Stock-holding etc.

Number of engineering changes R & D Department, production planning etc



ABC seeks to deal with the fact that many overhead costs vary not with the volume of items produced but with the range of the items, i.e., the complexity of the production processes. Under ABC, a

product cost consists of its direct costs plus a share of overheads related to the number of cost driver units the production causes.

Figure no. 1

Outline of Activity-Based Costing 7. Application of ABC to Manufacturing and Service Organizations

Application of ABC is generally focused on production centers, but at the same time ABC can also be applied in various service organizations. Each and every service organization has got various activities and output that places demand on these activities. There are some major differences between production and service organizations. Basic activities in production

organizations tend to be of the same type and performed in a similar way. But these cannot be applicable in service organizations. For example, in insurance, transport, banking, hospitals we see dissimilar activities. Another difference between production and service organizations is based on output definition. In production organizations, the output is simply defined by way of number of units/products i.e., these are tangible in nature. But in service organizations the output definition may be impossible. Naturally the output of service organization is less tangible.

Support Overheads

Direct Costs

Products

Activity Cost Pools

Products

Activity Cost Driver Rates

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It is important to realize that the two stages of flow of resources through processes and process activities are identical for manufacturing and service organizations, even though their resources, processes, activities and outputs may be different. Further more, internal business processes are similar to outsource services provided by external service firms since they provide services to support production processes. Thus, ABC is equally applicable to manufacturing and service organizations.

An ABC system offers more than just accurate product cost information. It also provides information about activities and their costs. Knowing what activities are being performed and their associated costs allow managers to focus on those activities that might offer opportunities for cost savings – provided they are simplified, performed more efficiently and so on. 8. Steps Involved in the Design and Implementation of ABC System

Designing and implementing an

ABC system involves the following four steps: Step No 1: Managers determine the cost objectives, key activities and resources used. Cost drivers are also identified for each resource and activity.

Step No 2: A process-based map is drawn that represents the flow of activities and resources that support the cost objects. Step No 3: Collecting cost and operating data. Step No 4: To calculate and interpret the new activity based information. Often this last step requires the use of computer due to the complexity of ABC system. 9. Implementing ABC for Job and Batch Costing

Overheads can be charged to jobs using either traditional labor or machine hour absorption rates or by using various cost drivers in ABC system. If all jobs or batches are the same and placed similar loads on support activities there would be small difference in the costs calculated by either method. Such uniformity is unlikely and jobs and batches do vary in the loads they place on production facilities and on support activities.

As a consequence, costs calculated by traditional methods and ABC system are likely to be different. The general effect is that more complex/diverse/small quantity production will tend to be cost effective under ABC as compared to traditionally calculated costs. This can be explained by the following example.

The given details have been recorded for four batches in a period:

Batch Output in units

A 200

B 210

C 220

D 225

Cost per batch $ $ $ $ Direct Material 1,650 1,700 1,750 1,800 Direct Labor 9,200 9,300 9,400 9,500 Labor Hours per Batch 1,150 1,160 1,170 1,180

The total production overhead for the period has been analyzed as follows:



Cost drivers have been identified for the cost pools as follows:

Batch A B C D Total Machine hours per batch 520 525 530 540 2,115 Material movements 180 182 186 190 738 Requisitions 40 42 44 46 172 Inspections 18 20 22 26 86 Set-ups 14 15 16 18 63 Engineering hours 65 68 71 76 280 Required:

a) the batch and unit costs using traditional costing based on labor hour overhead absorption rate (OAR);

b) the batch and unit cost using ABC; c) compare the costs in (a) and (b).

Solution: a) Batch and unit costs using traditional overhead absorption based on labor hours. $ 50,000 Labor hour OAR = = $ 13.88 1150 + 1160 + 1170 + 1180

Batch Output (Units)

A 200

B 210

C 220

D 225

Cost per batch: $ $ $ $ Direct Material 1,650 1,700 1,750 1,800 Direct Labor 9,200 9,300 9,400 9,500 = Prime Cost + Overhead (Lab.hrs X OAR)

10,850 15,962

11,000 16,100

11,150 16,240

11,300 16,378

Total Batch Cost 26,812 27,100 27,390 27,678 Unit Cost 134.06 129.04 124.50 123.00 b) Batch and unit costs using ABC with various cost drivers.

$ Machine related costs 14,600 Materials handling & dispatch 6,800 Stores 8,250 Inspection/Quality Control 5,850 Set-up 6,200 Engineering support

8,300

Total 50,000

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Calculation of Cost Driver Rates:

Cost Driver Cost Pool Total number of cost driver

Cost Driver Rate

Machine hours 14600/2115 $ 6.90 per Mac. Hour Material movements 6800/738 $ 9.21 per Movement Stores 8250/172 $ 48 per Requisition Inspection 5850/86 $ 68 per Inspection Set-ups 6200/63 $ 98.41 per Set-up Engineering 8300/280 $ 29.64 per hour Using ABC for Calculating the Batch and Unit Cost:

Batch Quantity

A 200

B 210

C 220

D 225

Prime Cost (a)

$ 10,850

$ 11,000

$ 11,150

$ 11,300

Overheads Mach hrs @ $ 6.90 (520) 3588 (525) 3623 (530) 3657 (540) 3726 Movements @ $ 9.21 (180) 1658 (182) 1676 (186) 1713 (190) 1750 Requisitions @ $ 48 (40) 1920 (42) 2016 (44) 2112 (46) 2208 Inspections @ $ 68 (18) 1224 (20) 1360 (22) 1496 (26) 1768 Set-ups @ $ 98.41 (14) 1377 (15) 1476 (16) 1575 (18) 1771 Eng. Hrs @ $ 29.64 (65) 1927 (68) 2016 (71) 2104 (76) 2253 Total overheads (b)

11,694 12,167 12,657 13,476

Total Batch Cost (a) + (b)

22,544 23,167 23,807 24,776

Unit Cost 112.72 110.31 108.21 110.12 c) The unit cost compared:

BATCH A B C D Unit Cost under Traditional Method

$ 134.06

$ 129.04

$ 124.50

$ 123.00

Unit Cost under ABC Method

112.72

110.31

108.21

110.12

Gain by using ABC Method

21.34

18.73

16.29

12.88

It will be seen that in this example there are significant differences between the cost using the traditional method and ABC method. If ABC system is used there will be les ser



unit cost of $ 21.34 in batch A, $ 18.73 in batch B, $ 16.29 in batch C and $ 12.88 in batch D. It is this feature which, it is claimed, makes product costs more accurate when ABC is used. 10. Conclusion

Implementing change in management, successfully and profitably, is the greatest challenge for modern enterprises. Innovation in strategies, marketing performance, and role of competition, change in technology, and change in customer needs, management initiatives are all facts of life in the global environment today.

Cost management works with its customer to manage change more profitably. By unique combination of people, information processes and technology – the key ingredients of continuous transformation – cost management delivers result -oriented

solutions to solve the problems of on-going business enterprises, and change programs to capitalize on new business opportunities.

Undoubtedly, the ABC concepts are very useful and powerful and when applied in a firm, are capable of achieving rapid performance and increased profits. Since 1990, cost technology has been helping organizations achieve their full potential using their own highly developed Activity-Based Cost Management Program. Cost management can successfully take industries through ABC onto strategic and operational transformation programs.

Bibliography

1. Peter B.B. Turney. Activity Based Costing – The Performance Breakthrough, Cost Technology Inc., USA, 1996

2. Gupta M. & Baxendale S. & McNamara K. Integrating TOC and ABCM in a Health Care Company, Journal of Cost Management, July-August 1997

3. Bhattacharya and John Deadden. Costing for Management, Vikas Publishing House (P) Ltd., New Delhi, 1997

4. Kalpan R.S. and Cooper. Cost and Effect: Using Integrated Cost Systems to Drive Profitability and Performance , Harvard Business School, Press, Boston, 1998

5. Horgngren, Sundem and Stratton. Management Accounting, Prentice Hall of India (P) Ltd., New Delhi, Eleventh Edition, 1999

6. Rutherford Brian. ABC: Too much Activity, not enough Costing?, Businessline, Chennai, Nov. 23, 2000

7. Mahendra A. Solanki and Sunil Rajotia. Activity Based Costing: Pros and Cons, Productivity, Vol 41 No. 1, April-June 2000, CBS Publishers and Distributors, New Delhi

8. Sidney J. Baxendale. ABC for the Small Business , IEEE, Engineering Management Review, University of Houston, Vol 29, No. 3 Third Quarter, 2001

9. Srinivasan, R. Banking on ABC , Businessline, Chennai, April 15, 2002

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MANAGEMENT OF TOURIST COMPANIES ON THE MODERN TOURIST MARKET

Slobodan Cerovic, Ph.D. Faculty of Natural Sciences,

University of Novi Sad [email protected]

Abstract

Substantial differences have

characterized modern trends on the tourist market in the period before and after 1990. There is almost no country in the world that does not reckon seriously with tourism in its economic development. The modern-day tourist is an increasingly “spoiled” consumer of tourist services and his/her requirements are specific and partial. The higher standard of living of the population and an ever greater amount of leisure time, as well as the development of transport technology and service technology in general accounted for important changes in the demand, bringing about considerable changes in the supply, primarily in the adaptation of the tourist product to the requirements of an increasingly sophisticated demand and the changes in the process of marketing, management and application. This paper focuses on modern trends on the tourist market and the necessity to apply the knowledge of modern management and marketing.

Keywords

• Tourism; • Management; • Strategy; • Marketing; • Globalism.

Rezumat

Diferente substantiale au caracterizat orientarile moderne pe piata turistica înainte si dupa 1990. Aproape ca nu exista tara în lume care sa nu ia în considerare, în mod serios, turismul în dezvoltarea ei economica.

Turistul modern de astazi este un consumator de servicii turistice din ce în ce mai, “rasfatat” si cerintele lui sunt specifice si subiective cât si timpul liber în continua crestere, dezvoltarea tehnologiilor de transport si de servicii aduc schimbari importante în ceea ce priveste cererea, antrenând schimbari considerabile ale ofertei, în primul rând în adaptarea produsului turistic la cererea tot mai sofisticata, la schimbarile proceselor de man agement si marketing si aplicarea lor.

Prezentam unele tendinte moderne pe piata turistica si necesitatea aplicarii unor programe de management si marketing moderne.

Cuvinte cheie

• Turism; • Management; • Strategie; • Marketing; • Globalizare.



1. Introducti on

Tourism as a social and economic phenomenon, i.e. an economic activity, is exposed most directly to constant and profound changes. The tourist market and activities are continually developed, assuming unimagined proportions. Tourism as a general phenomenon of this century has been the first activity that assumed global dimensions. By its economic, sociological, psychological, political and other attributes, it will be the first industry to approximate, by the size of its transactions, the oil and automobile industries.

2. Contemporary tendencies on the tourist market and the dynamics of market trends

World projections for the growth of international tourism are focused on: •tourist activities - a relatively high average annual growth rate (of 3.3 per cent to 3.5 per cent); •tourist consumption (proceeds) - the growth rate faster than the number of tourists (of 5.5 per cent to 6.0 per cent); •anticipated regional structure - stagnation in Europe and a somewhat slower growth in the Americas, expansion in the Caribbean, East Asia and the Pacific; •anticipated sources of the tourist demand, i.e. consumption - dominant role of the most developed countries with increased participation by medium-developed countries and some developing countries (China, Russia and Brazil); •structure of the tourist countries taking part in the distribution of international tourism - increased participation by the countries of East Asia and the Pacific, the Caribbean, Africa and South Asia; as to individual countries, it is exp ected that the role of China and Russia will increase; •structure of tourists by income - the greatest number of tourists will be the people of medium and low incomes (they

have, after all, accounted for tourism’s growth into a large-scale phenomenon); tourists will increasingly use organized tourist transport - the so-called package deals and the automobile in individual tourist transport; •quality of tourist stay (product) - requests to raise the quality even at a higher price of service are expected (for board and accommodation, as well as for leisure, sport, entertainment and culture); demands on tour operators to devise new and more diversified travel quality programmes; synchronization of the process of the supply of the tourist product with the sources of the tourist demand (including both public and private sectors); •special attention to be accorded tourists of high incomes – individual tourist travels (trips to remote areas, nautical tourism, cruises, hunting) - important groups of tourists to participate at numerous international political, scientific, cultural, fair, sports and other events; •change of the tourist demand - increased participation by young people (especially students) and senior citizens; •role of organized tourist activities to increase continuously (this type of tourist travels has already reached about 50 per cent of the share of all tourist events in the world) - their continued development to be conditioned in great measure by the ability of tour operators to adapt themselves to the requests of various tourist demand segments (in respect of the quality and price of package deals); •it is expected that individual tourist activities will continue to be ranked high.

The dynamic tourist movements will continue to be directed basically in three principal directions: warm seas, mountain resorts and big cities.

The following structural changes are projected within the three most important segments: a slower growth of tourist activities directed towards the warm seas (except the Mediterranean and the Caribbean) and a rapid growth of

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tourist activities directed towards mountain resorts and big cities, combining tourist, business and cultural contents.

In addition to these, there is a whole series of other changes which, apart from affecting the situation in the political and economic environment, may influence the future development of international tourism as well. They include:

• de-concentration of international tourism across a year (although summer months are expected to play the dominant role);

• tendency of a faster growth of trips to remote areas, while medium- and short-range distances will continue to account for a substantial share of international tourism;

• increase of the promotional activities of national tourist organizations, as well as tour operators, hotel companies and other participants on the international tourist market;

• increase of the competition and the emergence of new tourist countries, i.e. destinations, on the international tourist market;

• increase of the big business interest in the international tourist market;

• preparation of modern forms of business operations in tourism with reliance on the marketing conception and modern information technology;

• addressing environmental problems in tourist countries (in many countries space will be a limiting factor of the development of tourism and their successful inclusion into the international tourist market);

• quality workforce in tourist industries may be a catalyst to development, as well as a development -limiting, missing factor;

• complex development of tourist industry and the raising of the quality of tourist services and the overall accommodation of tourists (leisure and

entertainment facilities, as well as the construction of flexible accommodation capacities of medium and low categories, along with a relatively less extensive construction of luxury hotels, except in big cities and exclusive resorts);

• increase of the role of nautical tourism and various acquatic sports, as well as of active forms of leisure and winter sports activities in mountain resorts;

• prices of tourist services will rise more quickly than the rate of inflation due to the rise of the living standard and the nature of tourist needs;

• development of modern roads on the main routes and the continued expansion of air transport (new types of aircraft, modern airports and the merging of air carriers);

• process of a synchronized development of tourism with other economic activities;

• greater impact of international cooperation in the field of the promotion of international tourism (bilateral and multilateral relations among countries within regional integrations), i.e. a greater influence of the United Nations and WTO as advisory bodies;

• international tourism will grow faster than domestic tourism;

• greater respect for the requirements of international and domestic tourism in the elaboration of long-term conceptions of the development of tourism.

Development projections of international tourism may also be made on the basis of its own important trends:

• continued, relatively faster growth of the number of trips to faraway destinations;

• greater application of the marketing conception in tourism, along with more extensive use of modern



information technology, promotional and other activities;

• greater interest of big business from various fields;

• continued growth of organized tours in international tourism at large;

• relative decline of interest in hotel accommodation and increased interest in holiday resorts which offer apartments, bungalows and villas as basic accommodation and in spas and sanatoria, as well as in modern camps with complementary accommodation;

• continued domination of tourists of medium and low capacities to pay;

• continued prevalence of the passenger car as a means of transport. 3. Strategic Management in Tourism 3.1. The strategic adaptation of tourist companies

In selecting strategies, for the purpose of adapting themselves to market trends and consumer requirements and at internationalizing and globalizing their businesses, tourist companies (hotels, restaurants, travel agencies and tour operators) have used different strategies and methods of growth. The common denominator of all changes has been the transformation of the domestic company into the global one, while its business behaviour has manifested itself in four orientations: a) ethno -centrism (operating on the domestic market); b) poly -centrism (diversifying business activities and setting up branch offices abroad, though with domestic market practices); c) regio-centrism (gearing business towards consumers and resources of the region, with regional work culture); d) geo-centrism (viewing the world as a potential and single market).

? Hotel companies. The adaptation of hotel companies is reflected in a)

expansion of service selection; b) greater use of modern technology; c) major organizational changes (horizontal and vertical linkage); d) stepping up sales. The most important trends may be grouped in the following way: Purpose of facility

a) setting up of hotel clubs (sport and leisure, as well as the exclusivity level, are main elements);

b) emergence of resort facilities and centres;

c) hotels made available for various events (conventions and conferences);

d) luxury and inexpensive hotels; e) “youth hotels” or holiday centres.

Size of facility a) small family-type hotels

(prevalent); b) mega-hotels (out of the 12 largest

in the world, 8 are in Las Vegas). Within international hotel chains, it

is possible to distinguish a) corporate chains; b) management companies ; c) voluntary chains/associations.

? Restaurants. The following factors accounted for the growth of restaurant service demand: 1. development of international and domestic tourism; 2. changes in the manner of the spending of time; 3. development of transport (provision of transport services); 4. changes of life styles. They resulted in the emergence of three groups of catering business: a) small, family-centred companies, b) companies consisting of a large number of units; c) internationally-oriented companies. All catering companies are characterized by a high level of service specialization and the application of the product and price differentiation strategy, as well as by the use, in their growth and development, of the strategy of direct investment, joint venture and contractual and other arrangements.

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? Travel agencies and tour operators . Travel agencies have diverged into tour operators and classic travel agencies. Their growth and development have been influenced in large measure by: (a) exchange rates; (b) air traffic deregulation; (c) trends brought about by demand changes and market trends. The most important factors of the growth of organized tours are: (a) development of transport technology; (b) changes of legislation and the development of charter arrangements; (c) greater amount of leisure time and the growth of household income; (d) other factors (stimulation trips etc.).

On the basis of the above-mentioned factors, tour operators may be classified as: mass market tour operators; specialist tour operators.

Further divisions can be made according to: a) destination; b) type of transport; c) type of accommodation; d) type of segment ; e) type of content.

With respect to the method of growth and development and their orientation towards running business internationally, travel agencies and tour operators have combined internal and external methods (horizontal, vertical and conglomerate forms). Considerable use has also been made of contractual and other arrangements, as well as the “brand” strategy for positioning.

3.2. The possible strategies of tourist companies

One of the positions maintained in theoretical considerations of strategy options is that the basic division of strategies may be effected on the basis of the competitive position of the company and that, on that basis, strategies may be divided into offensive and defensive.

3.2.1. The strategies of growth To assess the possibilities of

growth, Ansoff considered the relationship between the company and the market and differentiated between the consumer and the mission. He considered that the product-market relationship must be assessed. He defined 4 strategies of growth: a) market penetration; b) market development; c) product development; d) diversification.

The strategy of vertical integration (forwards and backwards) has recently been added as a separate strategy.

The strategy of market penetration implies the conquest of the existing market by the existing product. It befits the goal if an industry is in the ascendant and there is considerable demand. It is us eful if: •the market is not saturated with the existing products; •the rate of use by the buyer may be increased; •the market participation of main competitors is reduced; •correlation between the proceeds and marketing costs is high and calls for a further effort at the existing market; •the economy of the size serves as a basis for competitiveness.

The strategy of market development implies the introduction of the existing product on new markets. Kotler suggests two courses of action: 1) opening of additional geographic markets (regional, national inter-expansion); 2) attracting other economic segments.

This strategy is useful if there are reliable new channels of distribution; good business performances; non-covered and non-saturated market; necessary capital to carry out expansion; surplus of unused capacities; if a company becomes global.

This strategy is applied, in particular, by small and medium -size tourist companies which cannot become leaders on the market.

The strategy of product development is oriented towards changes



in the product in order to increase market penetration (lengthen the life cycle of the product). The strategy is considered attractive if: a) there is a successful product in the phase of maturity and is being improved; b) the development of technology is fast in the industry concerned; c) competition is offering better quality; d) the industry growth rate is high; e) a company has a good research/development team.

The strategy is characteristic primarily of the leaders on the global market, big tour operators and travel agencies, as well as big hotel chains.

The strategy of diversification is recommended if the company has a number of sources of ability and the substance of competence, but cannot achieve its business goals on the existing extent of relations or if it is after using free financial capital more effectively. It is considered that there are two approaches to diversification: a) linked diversification (a number of linked business lines: technology, expertise, common distribution channels, suppliers) ; b) non-linked conglomerate diversification (in the case of saturated market, the ongoing businesses have a tendency of decline and the company has free funds and the capacity to “buy” new businesses etc.).

The strategy of vertical integration is recommended if a company is after strengthening its competitive position based on substance of competence.

This strategy may be replaced by long-term agreements with suppliers and middlemen.

This strategy has the following advant ages: it a) lowers costs; b) reduces stocks ; c) saves time (otherwise lost in negotiations).

It is useful since it : a) avoids indirect approach; b) provides better technological and marketing information; c) enables greater creative differentiation;

d) secures superior control of might; e) provides synergy and trust.

This strategy has the following shortcomings: a) the need for coordination may increase costs; b) surplus capacity may occur; c) the vertical integration may be poorly organized.

The risks involved in the strategy are: a) multiplication of obsolete processes; b) mobility barriers; c) linkage of companies with week additional businesses ; d) loss of access to supply and distribution information; e) over-estimation of synergy ; f) poorly devised integration.

3.2.2. The strategies of acquisition and merger (external method of growth)

The external method is the method of acquisition or merger effected by way of purchase or integration. The internal method of growth implies start from scratch by way of constructing and creating capacities and acquiring sources. It is particularly good if the entrance barriers are high. It requires less time to demonstrate profitability (It is considered that about 8 years are necessary for the internal method of growth to establish normal functioning).

The strategy of merger implies operation exchanges between two or more companies, while only one survives.

The strategy of acquisition is a purchase of a company and its consequent absorption. There are friendly and hostile acquisitions (takeovers).

The joint venture is the strategy of the external method of growth, although it may at the same time include both internal and external methods of growth depending on the form of a joint venture and the positions of the partners. This is particularly characteristic of tourist companies.

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3.2.3. The strategies of contraction and U-turn

The strategy of contraction is used, by and large, if a company is faced with the problem of recession in its environment and if it has had a rapid growth and large investments. This strategy may be effected by way of lowering all costs (Internal economies are resorted to) or by way of singling out the weakest business units for liquidation or revival.

The strategy of disinvestment is used if the strategy of contraction fails to produce expected effects, if a strategic unit makes losses, if a company needs free funds for further investment etc.

The strategy of “harvest” is applied if deliberate steps are taken to reduce market participation in order to collect cash. This strategy is resorted to if: a) the market is in the phase of maturity; b) the product is of average or above-average quality; c) there exists significant market participation; d) the price is average or above-average.

The strategy of liquidation implies cessation of a business activity by way of the sale of the company assets and the closing down of its capacities. It is acceptable in case of a bankruptcy threat; the remaining assets are rounded up and re-directed.

3.2.4. Modern concepts of management of tourist companies

The last phase, the management system of strategic management, has developed within 4 basic concepts: contingency (multi-variant) planning; management of strategic questions; strategic management by weak signals; and management by surprises.

In addition to these timely management systems, mention can also be made of the so-called positioned systems

that correspond to the conditions and organizations, the environment and future, i.e. the changes, of which can be anticipated (projected). The positioned management systems consist of long-term planning, occasional, i.e. periodic, strategic planning and the management of strategic position. In the conditions of an ever more complex and less predictable environment, the innovative (progressive) organizations have developed various management systems that make it possible for them to be more responsive to such changes.

Long-term planning, as a management system that was based on the extrapolation of the past in the future has no utility value nowadays and organizations no longer practice it.

The business strategy of a tourist company begins and ends with selected market segments. This means that marketing activity is woven in into the entire business strategy. The marketing strategy elements are therefore the elements of the business strategy of the tourist company as well and vise versa.

The basic elements of business and marketing strategies of a tourist company are manifested in:

• permanent orientation to the needs and requirements of tourists;

• coordination and integration of all plans and activities in order to maximize the overall business efficiency;

• orientation to the basic target function of the tourist company (market share and profit or gain in different variations).

These basic elements should be viewed in an integral way and manifest themselves in concrete strategies of tourist companies.

A well-integrated business strategy encompasses a comprehensive plan of activities of a tourist company. It includes a detailed definition of business philosophy, target functions, market



segments, general and specific business activities and the control mechanism for a certain plan period.

Strategic management in tourism is reflected in a number of specific features , such as:

• comprehensive analysis of the needs for various institutions of tourism;

• exact assessment of business targets, a successful differentiation of the supply with respect to competition and its gearing towards selected market segments;

• assessment of the real need for a comprehensive and permanent study of the legal, economic and market environment;

• maximum coordination of all business and marketing activities;

• possibility of projecting and possibly avoiding unfavourable market flows. 3.2.5. The concept of positioning

As tourism and its structures continued to develop, tourist companies increasingly accentuated the strategy of the differentiation of the “offer package” with respect to appropriate market segments. The development took small and locally specialized companies to big multi-production tourist companies in domestic and international tourism. Parallel to this process, the economy of the size and the economy of the scope grew in importance for the tourist industry. Further on, ever greater emphasis was being placed on the strategy of gearing the supply towards selected market segments and consumers’ expectations. The market position of the tourist company is the result of its overall assessment and knowledge of all relevant tourists’ character istics in the context of selected segments. They include tourists’ needs, requests and behaviour. In that sense it is necessary to identify tourists’ key dimensions and assess their perceptions and preferences in selecting

possible “offer packages” on the market. A concrete offer is always made up of a combination of selection, price, service, communication and tourist area.

The key for an effective positioning of a tourist company is in the selection of market segments, the specific needs of which have not been fully satisfied. A special “offer package” of the tourist company is designed on that basis. However, in order to implement effective differentiation strategies in tourism, the five following conditions must be met:

• only for market non -dominant tourist companies (by implementing attractive strategies of positioning, they can get a lot, while loosing little); the core of the matter is to find out weak sides of the leader and to take over some of its tourists, as leaders have no need to position themselves in respect of weaker rivals since, objectively, they cannot improve their position by emulating those weaker than themselves;

• spotting good opportunities existing on the market in the implementation of the strategy of positioning; there must exist a real possibility of realizing a more effective position in the future and it is necessary to project to that end tourist consumption trends and flows in respect of competition;

• exact appraisal of the relative position in respect of the competition; finding out the way tourists look at own tourist products and services and at those of the competition (their upsides and downsides);

• existence of appropriate structural elements of the business operations of a tourist company; proper personnel, location of tourist facilities, selection, quality and appropriate turnover capital;

• effective communication with the market as a necessary precondition for the implementation of the strategy of positioning; promotional campaigns

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directed towards the desired market position, emphasizing the presentation to tourists of those components that are effectively differentiated from those of the competition.

Generally speaking, the specificities of market positioning in the practice of tourist companies are noticeable by and large in the creation of the content of the offer of tourist facilities themselves. It is understandable that, in those conditions, the market positioning of tourist facilities is involved and the matrix of crossing the characteristics of tourists and tourist facilities is commonly used. The development of the strategy of positioning

The strategy of positioning takes the pride of place in modern concepts of the management of tourist companies. The development of the strategy of positioning takes place through a number of mutually dependent phases. The following six phases are most often encountered in practice:

• identification of the needs and wishes of selected market segments;

• analysis of benefits offered by the company compared with those offered by the competition present at the same market segments;

• identification of the most important benefits which are least important for the given market segment;

• research of benefits offered by the competitors and the response of the market segment to their overall offer;

• adaptation of the “offer package” in the manner enabling the maximum use of benefits desirable for the given market segment;

• promotion of the “offer package” of the tourist company in order to create an image and understanding in respect of selected market segments.

Compared with the classic approach of the strategic positioning (emphasis on hotels, restaurants and other tourist facilities and the so-called image of tourist

facilities), there are obvious advantages of a modern approach to the positioning of tourist companies (the positioning of an entire company in the overall tourist infrastructure) in defining their efficient business strategies. The advantages consist of the following:

• facilitation of the overall assessment of the area and framework of activities of the tourist company;

• establishment of production and market framework for each business and each business unit within the tourist company;

• exact assessment of activities within the entire tourist structure rather than on the level of a given tourist facility;

• assistance in identifying the main strategic directions;

• pegging out and integrating the diversification management strategy and carrying out the activities of the tourist company. 3.2.6. The development of participatory management

The participatory management is the management style that makes it possible for employees to play a more important and independent role.

In the history of management theory, this type of management emerged in the Scandinavian countries. Managers realized that there existed a way of making a formal group successful by introducing teamwork and by aspiring to team efficiency. Everybody is to be given an opportunity to make a contribution and take part in work since it is not possible to foresee who will come up with the best idea or offer the best solution.

To that end, the Scandinavian countries (Sweden, in particular) have devised systematic procedures of participatory management. In it, participation of workers is not a temporary experiment or an ad hoc measure.



This type of management allows for the creation of teams focused on results. In order to make teams function effectively, the challenge of the result is the most important and best way to create teams.

Many consider that the basic elements of the team (including size,

purpose, goals, skills, approach and responsibility) may often be foreseen. The above graph (Figure no. 1) shows the basic elements making up teams: skills, qualifications of team members, responsibility of the team and team members’ loyalty.

Figure no . 1

Source: John B. Katzenbach and Douglas K. Smith, The Wisdom of Teams: Creating the High-Performance Organization (Boston Harvard Business School Press, 1933), 8

It is well -known that the most

difficult team to form is the one at the top of the organizations, primarily because of numerous misconceptions about team functioning. A number of simple rules may greatly improve team performance, especially of those at the top of the organization.

First, teams should deal with specific, concrete questions, rather than broad generalizations.

Second, tasks should be divided and transferred onto subgroups and individuals.

Third, team membership must be based on each individual member’s ability/performance and skills, rather than on formal authority or individual positions in the organization. Fourth, each member

problem adjusting

commonality

a small number of people

an individual technical function

interpersonal relations

specific goals common approach

reasonable goal

RESPONSIBILITY SKILLS

ENGAGEMENT product of collective work personal growth

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of the team should perform the same quantity of work or else a discrepancy between engagement and results will occur.

Five, teams will function only if the traditional model of hierarchy is broken in communication and inter-action. Finally, top management teams must cooperate, just as all others do, pull together their tasks and maintain an atmosphere of openness, loyalty and trust.

4. Conclusion

Taking into account market changes

in choosing a growth and development strategy, priority should be given to penetration strategy and product development. Also, strategy of vertical integration is suitable for conditions in which tourist trade of Serbia operates. Externally based methods of growth, under examination, show that for tourist trade, when taken into account necessities of greater integration into international tourist exchange and faster access to world

tourist market, the optimum strategy is that of interconnection and merger. In implementing this strategy it is possible to accept all options (horizontal, concentric, vertical and conglomerate). In that sense, contractual and other arrangements are especially attractive as ways and means of external growth in the forms of: franchise, management contracts, strategic alliance and joint ventures.

• structure, as a component of strategic capability, needs to complement a strategy. We consider that the optimal solution is a functional structure or for complex forms of organization diversified companies or a divisional structure.

• when speaking about managing of companies of tourist trade we are of the opinion that strategic style of management and control needs to be implemented. For the control of execution of all operations and activities, strategic control is recommended.

Bibliography

1. Ansoff, I. Corporate Strategy, Penguin Book, Harmonds Worth, 1965 2. Cacic, K. Operation of a Company in Tourism, Faculty of Economics, Belgrade,

1995 3. Cerovic, S. Managem ent in Tourism, Faculty of Natural Sciences and Mathematics,

Novi Sad, 2003 4. Cerovic, S. Strategic Management of the Tourist Industry of Serbia, Zelnid,

Belgrade, 2002 5. Cowell, D. The Marketing of Services, Heinemann Ltd., London, 1987 6. Hannagen, T.J. Marketi ng for the Non-Profit Sector, Macmillan, London, 1992 7. Katzenbach, J. and Douglas, S. The Wisdom of Teams: Creating the High-

Performance Organization, Boston Harvard Business School Press, 1993 8. Kotler, P. Principles of Marketing, Prentice Hall, Englewood Cliffs, New Jersey,

1980 9. Milisavljevic, M. Basic Strategic Management, Business School Megatrend,

Belgrade, 1995



10. Nickels, W. Marketing Principles, Englewood Cliffs, Prentice Hall, New Jersey, 1978

11. Porter, E.M. Competitive Advantage, The Free Press, New York, 1985 12. Unkovic, S. Economics of Tourism, Savremena Administracija, Belgrade, 1988

13. Vukotic, B. Tourism and Development, Skolska knjiga, Zagreb, 1987 14. WTO. World Tourism Barometer, No. 3, October 2004 15. WTO. Compendium of Tourism Statistics, Twentieth Edition, Madrid 2000 16. WTO. Tourism Highlights, 2001 17. Zemke, R. Scandinavian Management – A Look to the Future Management

Review,77, No.7, 1988

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THE LOW-COST TECHNOLOGY OF STRUGGLE AGAINST DESERTIFICATION IN ?MAN

Olga Blinkova, Ph.D. Mykola Yarovyi Karazin Kharkiv National University, Kharkiv Karazin Kharkiv National University, Kharkiv

[email protected] Oleg Skliar

Karazin Kharkiv National University Kharkiv

Abstract

The proposed technology for the struggle against desertification in Oman includes estimation of the territory from the point of view of its suitability for landing of plants, especially lichens. Landing should be made in the points in desert that are the best for plants and are the most favorable from the point of view of probability of distribution of vegetation to the nearby sites. The purpose of landing is the formation of the midland moisture circulation in scale of any natural relief mezo-structure of Oman. With the purpose of maintenance of a primary impulse for the best growth of plants in desert it is offered to use organic fertilizers.

Keywords • Oman; • Desertification; • Lichens; • Fertilizers; • Optimum points.

Rezumat

Tehnologia propusa pentru lupta împotriva desertificarii în Oman include estimarea teritoriului din punct de vedere al oportunitatii de sadire a plantelor, mai ales a lichenilor. Plantarea ar trebui sa fie facuta în parti ale desertului care sunt cele mai potrivite pentru plante si prezinta conditii favorabile din punct de vedere al distributiei catre locurile din apropiere. Scopul plantarii este formarea unei circulatii a umiditatii la scala reliefului natural de structura al Omanului. În scopul de a mentine o buna crestere a plantelor în desert se vor folosi fertilizatori organici.

Cuvinte cheie • Oman; • Desertificare; • Licheni; • Fertilizatori; • Puncte optime.

The area of deserts on the Earth

extends every year. This problem is urgent for Oman, where there are extensive arid territories. Oman is the state on southeast coast of Arabian Peninsula which borders in the southwest with Yemen, in the West - with Saudi Arabia, and in northwest with United Arab Emirates. In the north of the country, which area are nearby 212 457

sq. km., is washed by gulf of Oman, and in the east and the south – by Arabian Sea. The population of Oman is 2 million 363 thousand persons; the climate is hot and dry, mid-annual temperature is near 28 C. Average population density of the country - 11 person on sq. km.

Precipitation usually goes up to 150 mm a year; the annual sum of precipitation



increases in mountains up to 500 mm, and in the southwest in a year monsoon - up to 700 mm. The constant rivers are not present, dry bogs are widely widespread. As to minerals the reconnoitered oil fields in Oman reach 4,5 billion barrels.

1. History of struggle against desertification in Oman

Presence of deserted territories is an old problem of Oman - so, in IV century B.C. the Persian invasio n, and also attacks of nomads from the next areas of Arabia, led to destruction of irrigational system existed from an antiquity, have negatively affected economic development of the country. Thus, struggle against desertification and an artificial irrigation took place in Oman more than one and a half thousand years ago.

Now the majority of the agricultural grounds in Oman are irrigated with system of the branched out underground wells, unique on the device. Under a big corner in a surface of the ground an artesian chink is drilled, where the pump falls.

Because of the deep disposition of the layers of water, necessity to conduct manual dredging on the big depth, in mine are drilled ventilating apertures, courses for workers, are arranged manual lifts for carrying out of the ground - the general length of each such well reaches several kilometers.

From recent time the government began to be engaged in industrial drilling of mines, and before peasants independently conducted their construction and service. Nevertheless, the majority of used wells since recent time became unsuitable for use because of increase of a level of salts in subsoil waters. It does the work on struggle against desertification in Oman a very urgent problem.

2. The purpose of the proje ct

The purpose of the project is to choose on a surface of the arid area the most favorable places for landing of drought -resistant plants, and an estimation of prospects of vegetation distribution on the next nearby sites. 3. The description of the offered technology

For defining the most favorable places, it is needed to divide the surface of a deserted zone on squares (during the real project it is offered to use squares of the different size within the limits of which an environment are kept almost constant). Inside of squares some parameter ? that reflects a degree of usefulness of territory for landing of vegetation is defined. Parameter ? depends on following factors:

• geological and hydro-geological conditions on mezo-and microlevels (data are planned to take from results of the search oil-and-gas expeditions spent in territory of Oman);

• properties of soils and parent breed (in particular, thickness of a soil cover, a moisture capacity and water penetration of ground, a degree of its salinity, quantity of humus, mechanical and a chemical compound and other characteristics);

• initial humidity of the territory certain on data of remote sensing;

• relief and ancient relief; • presence of seeds in ground. The specified factors, each of which

has its own weight, are estimated in each square; on their basis it is calculated the resulted index reflecting suitability of territory for landing of drought -resistant plants. Besides it, the condition of the next squares with the purpose of definition of probability of vegetation distribution on the next sites is estimated. For this purpose the factor of connectivity q which

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represents a difference between values ? in the next cells is used. On the basis of integrated indexes ? and factors of connectivity q it is possible to predict the maximal biomass which can be generated as a result of landing of plants.

Besides it, these indexes allow to estimate expected evaporation from a

predicted biomass and an opportunity of formation moisture circulation and changes of a microclimate of the territory.

After calculation all integrated parameters ? can be divided on two groups: the cells suitable for landing or suitable partially; and cells, for these purposes improper (figure no 1).

Figure no . 1

Distribution of value ? on the test territory. Greater value of an index corresponds to greater suitability for landing

1 2 3 4 5 6 7 8 9 10S1

S2

S3

S4

S5

S6

S7

S8

S9

S10

0,6-0,8

0,4-0,6

0,2-0,4

0-0,2

4. Definition of index ? and a parameter of connectivity q

For definition of weights of the

factors that influence suitability of a certain square for landing of plants, is used a hothouse in which artificially arranged conditions that are approached to conditions of desert in Oman.

Such model, besides definition of the importance of factors, allows to reveal boundary values of ? in which there is a growth and distribution of vegetation. This model also slows to define the maximal value of q at which there is a distribution of vegetation on the nearby cells.



Figure no . 2 Predicted areas of distribution of vegetation; depend on fa ctor of connectivity q

(different colors correspond to optimistical and pessimistic models)

1 2 3 4 5 6 7 8 9 10?1

?2

?3

?4

?5

?6

?7

?8

?9

?10

0,6-0,80,4-0,6

0,2-0,40-0,2

5. Selecting flora for landing

As the suitable plants for landing can be selected plants that are adapted to a life in droughty habitats (for examples, the prickly plants widespread in places with stony soils).

Such plants heatproof, but badly resist to lack of water and concentrate a moisture in leaves and stalks. Also wormwood - the heat-tolerant plant, capable to transfer long absence of water, and also bush plants can be applied. These plants can be applied in those parts of deserted areas of Oman where the season of rains is short, and a droughty season - long. At the same time there, where possibly, it is necessary to use the relic vegetation as much as possible adapted for given area.

For stony deserts can be used the pioneering flora (for example, lichens) which ecological niche is located in those places where anything, except for them, cannot live - for example, it is stones,

fumes and rocky taluses. The lichen hardly transfers a competition. It differs the slowest growth, and in most cases when conditions become comprehensible (for example, particles of ground collect), it is replaced quickly with other plants.

For definition of suitable vegetation during the project it is planned to use a hothouse with it is artificial climate of deserted areas of Oman. The global purpose of landing of the vegetation – the formation of midland moisture circulation in scale of an any natural mezo-structure of Oman. With the purpose of maintenance of a primary impulse for the best growth of plants in desert it is offered to use organic fertilizers.

6. Conclusions

For struggling against desertification in Oman it is offered to estimate territory from the point of view of its suitability for landing of plants. The landing should be made in points that are

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of the best favorable for growing and distribution of vegetation on the next sites. The purpose of landing is a stimulation of evaporation form plants and formation of midland moisture circulation. As a flora

for landing it is proposed to use lichens. To maintenance the lichens in desert it is offered to use organic fertilizers, especially in the first period of growth.

Bibliography

1. Andreeva E.I. Lichens of desert Betpak -Dala, Materials of the Kazakhstan conference on a problem “Biological complexes of areas of new development, their rational use and enrichment ", Publishing house AN of the USSR, 1961. - C. 195 -200

2. Andreeva E.I. Lichens.Vegetative communities and the animal population of steppes and deserts of the Central Kazakhstan, 1969. - ?.2. - C. 262-290

3. Kochneva T.A., Kovalyov O.P. Model of biotized geosystem on the base of cellular automat, Visnyk of Karazin Kharkiv National University, Geology -geography -ecology, Kharkiv: Osnova, 2003, No. 610. – pp. 108-113

4. Baas A.C.W. Chaos, fractals and self-organization in coastal geomorphology: simulating dune landscape in vegetated envirnonments , Geomorphology, 2002, No. 48. – pp. 309-328

5. Ulam S. Random processes and transformations, Proc. Int. Congr. Mathem. (1950) 2 (1952), pp. 264-275

6. Whitea R., Engelenb G. High-resolution integrated modelling of the spatial dynamics of urban and regional systems, Computers, Environment and Urban Systems, No. 24, 2000, 383-400

7. Wolfram S. (ed.). Theory and applications of cellular automat, World Scientific, Singapore, 1987

8. Nicolis C., Nicolis G. (ed.). Irreversible phenomena and dynamical systems analysis in geosciences , Reidel, Dordrecht, 1986. - 511



THE ROLE OF INFORMATION FOR GLOBAL MARKETING - EDUCATIONAL AND PRACTICAL ASPECTS

Tatjana Petkovska Mirchevska, Ph.D.

University St. Cyril and Methodius, Institute of Economics, Skopje tatjana@ek/inst.ukim.edu.mk

Abstract

The selection of company strategy for

international market appearance is an essential part of implementation the global marketing. Given the fact that this process is influenced by a diverse range of factors, it is necessary to research and report frequently about the dynamics. The research of market environment is one of the most essential company activities. Information is the base of the market assessment as an opportunity to company entry, as well as for establishing a balance between the marketing-mix tactics in accordance with specific conditions set out by the local markets.

Some of the huge problems in the transition economies are closely connected with education and practice connected to the global marketing issues. It is very significant to understand that marketing is not only a theory, but also an amount of knowledge created and carried through the experience in the business practice. The low level of theoretical and practical knowledge of this problematic is a serious flaw in global assessment process, especially in relation to local countries and regions, including the specific marketing functions of the company. The initial step should be implementation of theoretical and practical knowledge in the process of the company’s information needs definition, and then to carry out further implementation of other phases of the process.

The transition of economic and political system in Macedonia created favorable circumstances on education that sought to understand and employ the market system logic. The fundamental goals have been to achieve reflective, practical and analytical skills for those involved in management or marketing and for those who want a better understanding of the nature and process of management and marketing within broader contexts.

Keywords • Information; • Management; • Marketing; • Education; • Institution; • Globalization.

Rezumat

Alegerea strategiei pentru prezenta pe piata internationala este o parte esentiala a implementarii marketingului global. Dat fiind faptul ca acest proces este influentat de o diversitate de factori este necesar ca, în mod frecvent sa se cerceteze si sa se raporteze dinamica sa. Cercetarea mediului de piata este una dintre cele mai importante activitati ale companiei. Informatia sta la baza evaluarii piet ei ca oportunitate de intrare a companiei cât si ca stabilire a balantei între tacticile de marketing si conditiile specifice stabilite de pietele locale.

Unele dintre problemele majore în

economiile de tranzitie sunt strâns legate de educatie si practica, corelata cu problemele de marketing global. Este foarte important sa întelegi ca marketingul nu este doar o teorie ci o cantitate de cunostinte creata si pusa în practica prin experienta. Nivelul scazut al cunostintelor teoretice si practice în acest domeniu reprezinta o serioasa fisura în procesul de evaluare globala, mai ales în ceea ce priveste pietele locale, incluzând functiile specifice de marketing ale companiei. Pasul initial ar trebui sa fie implementarea cunostintelor teoretice si practice în procesul de definire a nevoilor de informatie ale companiei, realizarea unor pasi superiori în implementarea altor faze ale procesului.

Tranzitia sistemului economic si politic din

Macedonia a creat conditii favorabile în educatie care a cautat sa înteleaga si sa foloseasca logica sistemului economiei de piata. Scopul fundamental este realizarea unor competente de reflectie, practice si analitice pentru cei care doresc sa înteleaga mai bine natura si procesele de management si marketing în contexte mai largi.

Cuvinte cheie

• Informatia; • Management; • Marketing; • Educatie; • Institutie; • Globalizare.

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1. Introduction The Central and Eastern European

economies are moving step by step closer to the European Union. As a country with EU perspective, Macedonia is conditioned by compliance with numerous obligations, especially those concerning the harmonization of domestic legislature, particularly those connected to the foreign trade liberalization.

Business experts and experienced university professors from East and West, teach up-to-date management as well as the legal, economic and social background of doing business in Central and Eastern Europe. The key management functions - marketing, finance, strategic and information management, organization and human resource management are presented from a scientific point of view. The theoretic knowledge is directly transferred into business practice through higher level of academic education, as well as through other forms as cases or project studies, workshops and guest lectures of experienced managers.

Marketing is the key to open the consum er mind and it helps to create demand. The strategy for international market appearance is an essential part of implementing the global marketing. Given the fact that this process is influenced by numerous factors, it is necessary to research and report permanently about their dynamics. The information as a final result of research is the base of country and market opportunity estimation necessary for defining the company target market, as well as for establishing the balance between the marketing-mix tactics adopted on specific conditions on the local markets.

2. The importance of market and marketing research in creation the strategy

In order to make a position of the

competitive product advantages, the market as well as marketing research become a base for optimal marketing strategy definition, implemented in order to develop and discover some market segments as target markets. The companies on global market, despite the level of the economy development, are facing the challenge of identifying the most favorable possibilities and competitive advantage. In that direction, the definition of optimal marketing strategy should start with research and analysis of diverse range of factors in the market environment. Their influence could not be analyzed separately, but in relation to forces of different nature - political, economic, social and technological.

Given the fact that the assessment of factors, regarding their significance in creating marketing strategy is very difficult, their influence should be analyzed from aspect of competition, as well as the complexity of the local market environment conditions. It means that the strategy has to be developed as reflection of global marketing factors: social, political, economic, cultural and others.

Marketing research activities and procedures enable the definition of different market changes, including competition, technology development etc. Rapid technological development influences the necessity of information needs in order to coordinate the process activities of the international management function. In this sense, market and marketing-research become a basic component of the global management-information system.



3. The role of information and the global marketing

In transition economies, the shortage of information is mainly resulted by two types of problems, which are connected to international business practice; the first are the problems of information infrastructure and the second are the problems of theoretical and practical knowledge about global marketing issues.

The information infrastructure is an institutional system of organized information. In transition economies, the information infrastructure is on low level of development. There is a gap of secondary (already collected and published) data: demographic, industrial, company reports, data of consumer living standards etc. as well as primary information (those collected from field research of the target markets).

Some companies are aware of the strategic information advantage, but they also treat the research expenses as cost, instead as investments. Also, in order to provide necessary information, some companies use a system based on inadequate techniques and methods, which contribute to the quality of information necessary for international management decision-making process.

The second group of problems in transition economies is the problems of educational and practical knowledge, as an amount of absolved information during the process of education . Although many books and other publications in marketing were published and marketing lectures and teaching curricula were implemented at the Universities since the early 70-ties, there was not space for their practical implementation and improvement. The 50-year-long self-management system in former Yugoslavia (including Macedonia) contribut ed to business behavior of abolishing practical marketing problems in

business practice, based on traditional opinion about market competition and trade liberalization. In present, it becomes a global problem, especially for those companies in transition economies, which find themselves in the phase of initial market entrance, when the starting problems become unpredictable and affect the development of effective strategy for long-term expansion on the global market.

4. Global marketing perspectives - educational and practical aspects

Concerning the business problems in the practice, as well as the level of practical education of these topics at the universities and colleagues in Macedonia, it should be notified that some efforts and activities have been undertaken in terms of updating of teaching plan and programs, their development and innovation. This is also one of the strategically defined aims of the national development strategy for Macedonia, where in the common sense, there are some directions in establishing the global orientation in education as a factor for economic development. So, according to the strategical priorities, there are some priority needs outlined for staff personnel appropriate to the expected economic and social development, which have to be focused on education for work and the application of knowledge. There are some attitudes that the training for a profession and for future utilization of knowledge in practice is one of the weakest links in the chain of education.

The educational institutions, mainly those of high education need to be equipped with adequate modern laboratories, workshops, practice facilities, information, computer and multi- media centers, as well as being linked to the direct production sector and other appropriate activities. Nonetheless, there is still a necessity for new curriculum as a result of a dynamic process of

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implementing the theoretic knowledge to the market requirement. In this sense, the co-operation with foreign universities and institutes, especially from EU countries, is becoming very important.

The different forms of university educational cooperation and communication among universities, especially in Europe, are significant from aspect of their contribution to higher education system in transition economies. This system should be created in order to help the managers in the transition economies, as well as for all involved in this problematic (university professors of marketing and management, business managers, students of international management on different education level etc.) At the same time, the joint projects of higher academic level studies are very perspective, as well as some other education forms as seminars, trainings etc, used mainly for exchange of practical experiences in this sphere. This form of co-operation will provide the activities connected to the exchange of professors and students, new curriculum etc. This co-operation will contribute to improving the teaching level by implementation of the activities, such as introduction of new teaching methods and materials, new literature and other forms of academic cooperation.

One of the unique features of the cooperation is to treat the students as customers, which is one of the fundamental principles of Marketing. It means that not only the professors could evaluate the students; even the students should evaluate their professors. For achieving the student’s practical experience in marketing, interaction with professionals from the field and general awareness are also required. The unique feature in the education of the field adopted by other forms of education standard performed in EU countries is geared towards those interested in

pursuing theoretical and empirical research in these areas. It is very important to mention that the forms of education should be followed by time-to-time interaction with prominent personalities and experts, international conferences, the interaction with international academicians, seminars on contemporary topics and projects work for the students to become well educated and experienced marketers and managers.

The forms of education as well as the teaching curriculum should be created in combination with research practice through different forms of student’s research. The system of interactive teaching should be based on mutual creation of ideas, concepts and discourses. The marketing students should be educated how to implement the research methodology in their practical research. Furthermore, it is necessary to implement the form of discussions about work in progress and share information and ideas with other students and staff, as well as to attend seminars on marketing issues related to seminal works.

There are some contemporary forms of interactive learning, especially when we talk about the international forms of university cooperation. If we accept the opinion that marketing, as a practical issue cannot be learnt in a classroom alone, the distance learning becomes one of the possible forms of education. This is a system of interactive educat ion free of traditional educational concept. In this sphere, Internet becomes a new media interesting for latest management structures. The Internet enhances the global network set up by research, scientific and university centers. From the early 70-ties, Internet was used as network for the USA and later for EU universities, including the research centers and institutes. At the end of 20th century, the Internet turned into worldwide international network. Also, in practice,



the mix of numerous Internet possibilities influences the enlargement of its practical application from the marketing aspect.

Following the example of some foreign universities in countries of the ex-socialist systems (Hungary), the forms of practical assistance in marketing issues could be performed through creation of academic consulting centers about market and marketing research activities. Those centers aim to facilitate the process of marketing application in practice by giving the consulting services to companies or marketing experts. The formation of such centers contributes to better compliance with international educational standards. Its objective is also to bring the theory and practice more closely with the modern marketing requirements. In order to achieve these aims, it sup ports the scientific initiatives and research that will help to expand and deepen the different areas of marketing teaching. It also promotes the development of new teaching methods in accordance with social and political environment. 5. Conclusion

Attributes of global consumer choices become the impulses of the increasing competition. The coordination of marketing activities in that sphere becomes a basis of the integral market and marketing research for successful internationalization of business. Thus, the market and marketing research become an updating approach in the international business, based on strategies, which represent maximum use of the market possibilities in its global meaning. In this context, the role of global marketing influences the effective implementation of

international cooperation on different issues.

The development of international contact has been increased in all spheres of economic and social life. One of the forms is the cooperation being implemented among universities, faculties, institutes and departments. Following the changes in the former centralized model in transition economies, the universities have entrenched the international co-operation. The education and research are of high significance to modern economies where knowledge is becoming the key competitive tool.

As a result of the changes, the great number of marketing managers now understands the concept of marketing and is also able to put their skills into motion. On the one hand, the restructuring, privatization and also the economic recession are not reluctant to marketing way of thinking. On the other hand, the growing number of companies within transition period has increased the demands for educated marketing experts. The increased demand for marketing know ledge cannot be fully met by education system created within the state borders for the time being.

Thus, all efforts should be focused on requirements set out by international teaching standards and to teach as up-to-date range of topics on high academic level. The possibility of gaining expertise is available, although the general economic situation is not favorable for all participants with academic and scientific career. The international contact and university cooperation in education and research should guarantee that efforts would achieve success in the future.

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Bibliography

1. Dallas S. & Craig S. The global marketing strategy , New York, 1995 2. Evans J.R. & Berman B. Marketing, New York, 1987 3. Michael E. Porter. The Competitive Advantage of Nations, The Free Press, New

York, 1993 4. The National Development Strategy of Macedonia, Macedonian Academy for

sciences and arts, Skopje, 1997 5. Vassos T. Strategic Internet marketing, New York, 1996



THE PROCESS OF DECENTRALIZATION IN BULGARIA AND THE NECESSITY OF INTRODUCING REGIONAL

SELF-GOVERNMENT

Assistant Professor Yuliyana Chavdarova Galabinova Centre for Public Administration, New Bulgarian University,

[email protected]

Abstract

In the recent years many Central and Eastern European Countries (CEEC) are re-arranging their regional levels of administration. After the political transition, the newly established democratic governments and parliaments focused on the establishm ent of local self-governments and local political elites with democratic legitimacy. This led to formation of accountable and relatively autonomous local self-governments in Bulgaria, Czech Republic, Estonia, Hungary, Poland, Slovenia, and Slovakia. It has been only since the mid-nineties that the regional level of government has received more attention in the CEE.

To date, Bulgaria and Estonia are the only countries which have not established legal prerequisites for self-governments at the regional level. Regions are an integral part of the state administration in both countries, although county assemblies in Estonia facilitate a participation of the delegates of local self-governments at the regional level. In the process of the decentralization in Bulgaria the role of the regions (regional administrations) and the role of the state functions with regional meaning were undervalued. The concept for decentralization is based basically on the traditional understanding of the process as a transfer of power and resources from the national to the local level.

Keywords

• CEE countries; • Decentralization; • Self-government; • Regions; • Municipalities; • Sub-national levels.

Rezumat

În ultimii ani, multe dintre tarile din centrul si estul Europei si-au reorganizat administratia la nivel regional. Dupa tranzitia politica, noile guverne si parlamente stabilite democratic s-au concentrat asupra înfiintarii autoguvernarii locale si a elitelor politice locale cu legitimitate democratica. Aceasta a condus la formarea unor auto-guvernari responsabile si relativ autonome, la nivel local în Bulgaria, Republica Ceha, Estonia, Ungaria, Polonia, Slovenia si Slovacia. Abia la mijlocul anilor 90, acestor guvernari la nivel regional li s-a acordat mai mare atentie în Centrul si Estul Europei.

Bulgaria si Estonia sunt singurele tari care nu au stabilit înca premise legale pentru autoguvernare la nivel regional. Regiunile constituie parte integrala a administratiei de stat în ambele tari, desi adunarile regionale din Estonia, participa cu delegati ai autoritatilor locale la nivelul regional.

În procesul de descentralizare în Bulgaria, rolul regiunilor (administratiilor regionale) si rolul functiilor statului cu semnificatie regionala au fost subevaluate. Conceptul de descentralizare se bazeaza în principal pe întelegerea traditionala a procesului ca un transfer de putere si resurse de la nivel national catre cel local.

Cuvinte cheie • Tarile din Centrul si Estul Europei; • Desccentralizare; • Autoguvernare; • Regiuni; • Municipalitati; • Nivel sub-national.

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1. Introduction The development of democratic and

effective government at sub national (regional and municipal) levels remains one of the central tasks of transition in Central and Eastern Europe.

After the fall of the communist regimes, it was important for the CEECs to re-establish democratic government structures at local and regional levels. Furthermore, viable democratically elected local and regional government structures were considered crucial for reinforcing the principles of democracy and subsidiarity.

2. The process of decentralization in Bulgaria - legislative preconditions

2.1. Bulgarian Constitution

Bulgaria is one of the first countries from the former socialist block, which adopted a new democratic Constitution as early as 1991. With the adoption of the new Constitution in 1991 the process of building the new state has begun. Officially – in legislative and juridical terms – Bulgaria adopted the model of pluralistic democracy and market economy and started the process of decentralization of the government.

The Constitution of the Republic of Bulgaria defines the general model of state government and the distribution of the power between central and local authority. According to the Constitution, the Republic of Bulgaria is a unitary state with local self-governance.

The territory of the Republic of Bulgaria is divided into municipalities (obshtini) and regions (oblasti). The current lega l regulation – the Administrative territorial System of the Republic of Bulgaria Act (ASRBA) – defines the regions and the municipalities

as constituent administrative-territorial formations.

The region is an administrative-territorial unit that carries out the regional policy, executes the state government locally, and ensures conformity between the national and local interests.

The municipality is the basic

administrative-territorial unit, where the local self-government is carried out. The realization of local governance is an element and a form of organization of the state power. The local self-government is a decentralized form of state authority and has independent competencies.

The municipalities have their territory, borders, population, name and an administrative center, and include one or more neighboring settlements. Constituent administrative-territorial units in the municipalities are the mayoralties and the districts, established to fulfill the functions and competencies entrusted to them by law or with a decision of the Municipal Council.

The citizens participate in the

governing of the municipalities through the local self-government bodies elected by them, as well as directly through plebiscite and the general assembly of the population. The municipalities are juridical bodies separate from the state.

The municipalities have the right of

property, which is used in the interest of the community. The municipalities have an independent budget. The Constitution affirms the model of the modern democratic state and outlines the principle of decentralization, admitting the right of self-government to the basic administrative-territorial units and preserves its supremacy and its control over the defending of the common national interests.



2.2 Other legislative texts In addition , government at sub-

national levels is regulated by the following acts:

• Local self-government and Local Administration Act (adopted in 1991) - regulates the implementation of local self-government in municipalities and the functions of local administration. Municipal councils are given competences to develop strategies, forecasts, programs and plans for local development (art. 21, paragraph 1), the mayor is given the competence to implement long-term programs (art. 44, al.1);

• Municipal Budgets Act (adopted in 1998): regulates the financial resources of municipalities and transfer payments from the state budget, the implementation of municipal budgets in the municipalities themselves, inter-municipal financial relations and the relations with the state budget as well as the regimes of non-budget funds; it also regulates the annual general subsidies granted by the state. Essential for municipal investment policies are the so-called target subsidies for capital expenditures “granted in particular cases for acquiring long-term assets and for the implementation of regional programs and projects of national importance” (art. 6, paragraph 2, item 2 of the Act). The Act requires that municipal budgets have to be based both on the council’s strategy and forecast for the development of the respective municipality (art. 11, paragraph 1, item 1 of the Act) and (b) engagement in national programs and projects (art. 11, paragraph 1, item 9 of the Act);

• Local Taxes and Charges Act (adopted in 1997) – regulates the municipal finances, taxes, charges;

• Administrative territorial System of the Republic of Bulgaria Act (adopted in 1995) - implements territorial-

administrative and territorial units and regulates territorial-administrative reforms. By amendments to the law of 1998, Bulgaria is subdivided into 28 regions replacing the previously existing nine regions. The regional boundaries and their administrative centers are defined by a presidential decree;

• Administration Act (adopted in 1998) - regulates structure and main organizational principles of administration, administrative positions and the major financial provisions; it also charges regional governors and municipal mayors with executive power and specifies their competences and functions;

• Civil Servant Act (adopted in 1999) - regulates the status of civil servants in the state, regional and municipal administration;

• Organization of the State Budget Act (adopted by the 37th National Assembly on 25 July 1996 and published in the State Gazette on 6 August 1996);

• Regional Development Act (in effect since 20.02.2004) - regulates the framework of Bulgaria’s integrated and long-term oriented policy for regional development, defines the aims and tools of regional development (among which coordination of sector policies and granting access to non-governmental organizations need to be stressed), the distribution of functions among bodies of the executive power; establishes new bodies having consultative and coordinative functions; defines the legal basis for establishing planning regions comprising of several regions as well as their sources of financing. Special attention is paid to planning, instruments for the implementation of regional policies, their contents and the procedures necessary for their fulfillment.

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3. Sub-national levels of government - institutional structure and executive powers

3.1. Institutional structure

Bulgaria is subdivided into 28 regions and 265 municipalities.

The region [oblast] is an instrument of devolved state administration represented by the governor. The governor is the official representative of the government and is appointed directly by the Council of Ministers. The governor is assisted by a regional administration including a department for regional development.

The current two-tier territorial-administrative system in Bulgaria was implemented in 1998 under the 1991 Constitution. It replaced another two-tier system composed of nine regions [oblast] and 246 municipalities [obshtina] which dated back to 1 January 1988. This change after a relatively short period was motivated by the transition to a new political and economic organization and management of society in Bulgaria. The former 9 regions were considered to be too large for the transfer of competences from central to regional and local authorities. Comparative analysis has also shown that the large regions did not execute their competences effectively.

The municipality [obshtina] is an institution of self-government. Its managing authorities are the council and the mayor. The Council as well as the mayor is elected separately by the population for a four-year term of office by direct universal suffrage. Separate direct elections are held and the mayor and the political majority in the council may well be from different parties.

In the year 2000, six planning regions were established. But they are not territorial -administrative units and are not legal persons in their own right. They

merely aggregate some of the 28 administrative regions.

Planning region s are not territorial-administrative units according to the Administrative territorial System of the Republic of Bulgaria Act. Under the decree of the Council of Ministers No 145/27.07.2000, they were established for the purpose of regional development and regional statistics. They are to compensate for the shortcomings of the administrative regions [oblast] and to serve as a basis for drafting integrated plans and programs for regional development on a large territorial scale transcending the regions. They can also be seen as a response to the EU requirements for the implementation of regional policy, which designate regions of the NUTS-2 type as the main frame for planning, programming, implementation and monitoring, particularly as regards Objective 1 of the EU structure funds.

The six planning regions do indeed correspond in size to regions of the NUTS-2 type in the EU. They bring together between three and six of the 28 administrative regions: • North-Western Planning Region – includes r egions Vidin, Montana, Vraca; • North Central Planning Region - consists of regions Pleven, Lovech, Veliko Tyrnovo, Gabrovo, Ruse; • North-Eastern Planning Region - includes regions Varna, Dobrich, Shumen, T argovište, Razgrad, Silistra; • South-Western Planning Region - consists of regions Sofia City, Sofia, Blagoevgrad, Pernik, Kjustendil; • South Central Planning Region - includes regions Plovdiv, Stara Zagora, Haskovo, Pazardjik, Smoljan, Kyrdjali; • South-Eastern Planning Region - consists of regions Burgas, Sliven, Jambol.

Regions as well as municipalities have neither exclusive nor concurrent legislative powers, except the right to pass bye-laws for the purpose of carrying out



their functions; otherwise they are totally governed by national legislation.

3.2. Executive powers

• Regions - regional governors are appointed by the Council of Ministers. The regional governors are representatives of the national government, whose basic functions are to implement the state policy, to protect the national interests, the compliance with law and the social order, and to exert administrative control over the territory of the region.

Under Article 31 of the Administration Act, the regional governor:

− Conducts state policies in the region, coordinates the work of the executive bodies and their respective administration within the territory of the region and their relations with the local power;

− Ensures compliance of national and sub-national interests, organizes the drafting and implementation of regional strategies and programs for regional development, implements coordination with the structures of local self-government and local administration;

− Is responsible for the protection of state property within the region;

− Ensures the observance of the law within the region and implements administrative control for the observance of legislation and administrative acts;

− Controls the implementation of administrative acts and the activities of self-government structures and local administration;

− Coordinates and controls the implementation of administrative acts by the executives of the territorial units of central administration and the executive power within the region;

− Organizes local civil defence, ensures the protection of the population in

cases of natural disasters and is responsible for the maintenance of public order;

− Implements international contacts at regional level.

• Municipalities - a local self-government body in the municipality is the municipal council, elected by the population of the respective municipality for a four-year mandate, as defined by law. An executive body in the municipality is the mayor, elected by the population, or by the municipal council, for a four year mandate.

The council: − Formulates policy for building

and development; − Establishes permanent expert

commissions and defines their number and representatives;

− Elects a chairperson of the council;

− Appoints and discharges deputy mayor(s), having considered a proposal of the mayor, in large cities with district divisions (Sofia, Plovdiv and Varna) also the districts mayors;

− Decides on the annual budget of the municipality, implements control and adopts the reports on the budget implementation;

− Defines local fees; − Draws up strategies, forecasts,

programs and plans for local development. The mayor is responsible for :

− Keeping public order; − Implementing the municipal

budget; − Long-term development

programs; − Protection of the population in

cases of natural disaster; − Maintaining relations with the

political parties represented in the municipality, civil society organizations and other structures of local self-government in the country and abroad;

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− Implementation of construction plans and services;

− Conducting activities to protect the environment and to protect rural property;

− Organizing and maintaining the education and health systems of the municipality. 4. Financial decentralization

The establishment of the regulatory framework of territorial decentralization in Bulgaria began with the adoption of the new Constitution, and the Local self -government and Local Administration Act. Development of the legal frame of the local self-government and the enlargement of its functions, including the regulation of the financial independence of the municipalities, were accepted as a good perspective for further development of the local self-government.

Despite the positive changes, made in the first years after the period of centralized economy and governance, the local finance system stayed almost unchanged. Like most countries in transition, one of the most severe problems that Bulgarian local governments were facing was the discrepancy between the responsibilities and powers of municipalities. Bulgarian municipalities were too much financially dependent on the will of the central government. The powers of municipalities to influence their revenues and expenses were limited. Municipalities could not determine the local taxes and fees on their own. Local taxes were determined by law, and constraints were set for local fees. According to reported data for 1999, Bulgarian municipalities were free to influence in some way about to 18% of their total revenue base.

There were a number of preconditions for initiating financial decentralization in Bulgaria:

• Individuals and institutions were inclined and motivated to make changes - the experience of the count ries in transition, which have started the process before Bulgaria, reveals that decentralization should undertake the interests and opinion of all concerned institutions on local regional and state level. That means, that the organizations, connected with the change should be involved in the process from the very beginning;

• Political will was declared to implement government decentralization:

− The need for real government decentralization was recognized in the pre-election platforms of the major political parties during the last parliamentary elections in 2001;

− After the elections, concrete goals and objectives for financial decentralization were adopted in the Government Program, incl. Constitutional amendment for providing local authorities with taxation powers;

− A number of senior government officials previously worked in the local government system and understood the importance of the introduction of decentralization.

• The EU-accession process also entails certain amendments of the legislation in view of t he application of the European Charter of Local Self-Government, which was ratified by the Bulgarian Parliament in 1995.

On 11th March 2002 the Council of Ministers established a joint Working Group on Financial Decentralization with members: the Deputy Prime Minister, representatives of ministries (of finance, education and science, labour and social policy, healthcare), the Audit Office, the Council of Ministers, the National Association of Municipalities in the Republic of Bulgaria, the Foundation for Local Government Reform. In June 2002 the working group developed and the



Council of Ministers adopted a Concept and a Program for Financial Decentralization. The adoption of the Program became the milestone for the introduction of the financial decentralization in Bulgaria.

The basic long-term objective of the Concept is “to provide public services in quantities, of quality, and at prices corresponding to the needs of and affordable to the people, on the basis of long-term balancing of municipal expenditure responsibilities with stable revenue sources and effective civil control”. Municipalities and the Government agree that this objective requires observation of the following principles: • Creating a system of incentives which target higher local revenues, con solidated financial management potential, and the maximum level of local autonomy to determine the type, scope and provision of municipal services; • Adopting simple financial relationship structure; • Strict financial discipline followed by central and local governance; • Monitoring and assessing the decentralization process by central governance; • Considering municipal differences in terms of financial resources and management competence, and enabling municipalities with different potential to develop in accorda nce with their characteristics; • Generating conditions suitable effective civil control.

The main role of implemented changes include: first, developing structural changes to help municipalities shed responsibility for the financing of welfare benefits, land commissions, and some aspects of certain healthcare activities ; and second, all other municipal-budget -financed public services which are divided into two groups:

• State-delegated services refer to those of the education, healthcare, and social establishment sectors, as well as, to some degree, services in the cultural sector. Operating expenses of State-delegated activities are calculated according to standards including personnel number, amount of salaries and insurance payments, and cost amount. The St ate serves to provide necessary financial resources for this group of activities, utilizing two sources: shared taxes and complementary subsidies. According to implemented changes, municipalities are deprived of revenues from corporate profit taxation at the expense of receiving 100% of the revenues from the Tax on the Income of Natural Persons (TINP). Additionally, the financing of state-delegated activities expenditures is determined by calculating their amount according to standards. Where municipal revenues from TINP are less than expenditures or services, the municipality receives a complementary subsidy up to the difference. Where revenues from TINP exceed the amount of expenditures, the municipality receives a percentage of TINP up to this amount and does not receive any complementary subsidies. • Local activities include public works, maintenance of country roads, cost of kindergartens and nursery homes, and most activities in the cultural sector. Municipalities incur expenses for local activities up to the amount of their own revenues. Revenues are formed by local taxes, local charges and other non-tax revenues (municipal property management, fines, and so on). Municipalities with low capacity to generate revenues receive adjustment subsidies.

Notwithstanding the positive intentions, a rather small portion of the necessary measures to increase financial decentralization was incorporated into Bulgarian legislation. Overall, the bodies

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of local self-government remain highly dependable on transfers from the State budget. Indeed, financing is secured for as much as 50% of defined and valued state-delegated public services, and municipalities remain unaware of the timing and amount of possible additional transfers.

5. The necessity of introducing regional self-government

The acquired lessons of the

transitional period reveal that financial decentralization is undoubtedly important, but its measurements (size and parameters) should be as a result from the division in the field of functions and responsibilities between the different levels of government, from the realization of political and administrative decentralization.

In the Bulgarian case it was started with financial decentralization and it was chosen the level of municipality. The fact, that Bulgarian municipalities are too different, regards to their size and their fiscal and administrative capacity, was not taken into account. Nowadays, 3 years after the implementation of the Concept for Financial Decentralization, the result is evident – instead decentralization, in practice it was realized mechanism of financial redistribution, based on normative type relations (there are standards of different activities realization, and this middling ignores the specificity of the different municipalities). There is still lack of correspondence between the responsibilities delegated to municipalities and the powers to realize them. Municipalities have clearly defined responsibilities in a number of major areas of financing and provision of services, but they still lack the necessary means to administer, manage and control the expenditures incurred.

On the other hand, the division of the responsibilities only between two levels: “central government” and “municipalities” brought strengthening of the centralization (the central government requires financial and organizational control because of the financial provision that this government ensures), and increase of the real power of the ministries and agencies.

The role of the regions (regional administrations) and the role of the state functions with regional meaning were undervalued. In the process of decentralization there are not only two poles: municipalities and central government, but minimum three: municipalities – regions - central government. From this point of view, in the process of decentralization and distribution of the functions between the different levels the regions should be involved. The existing deconcentrated offices of the central government are also important. The problem with them in bulgaria is not only the fact, that their number increases, but the strengthening lack of coordination between them. The last is connected not only with the disagreement of the purposes of offices of different ministries and agencies, but with the disagreement of the offices of one ministry.

That is why the process of improving the governmental effectiveness in Bulgaria requires expansion of the functional capacity of the regional administrations by: • elimination of the doubling functions and responsibilities of the different institutions of the central authorities; • decentralization of the deconcentrated regional offices at the municipal level; • establishment of independent regional administrations and independent regional budgets;



• transfer of all the deconcentrated on regional level functions from the central authorities to regional governors; • transfer of the functions, connected with the administration of the whole state property (but without those with national value) from the central authorities to regional governors.

6. Conclusion

The decentralization process follows a similar path in the CEE countries. In Bulgaria in the first years of transformation the institution building at the local level was given a priority. Furthermore, as many CEECs our country is plagued by the problems of fragmented state administrative organization at the regional level. So far the tasks of central government at the regional level are mainly fulfilled by the field offices of the respective ministries. This has resulted in the lack of coordination of central government policies at the regional level. In particular, regional policy considerations have received too little attention and there is unnecessary duplication of organizational structures at the regional level.

Before exercising decentralization and implementation of regional self -

government it is recommendatory to answer the questions, connected with the necessary preliminary conditions, for example:

• Is it possible to overcome the institutional, political or fiscal slow in the development of the particular structures and territorial units;

• Which elements, contributing to the decentralization are already available;

• Is the existing capacity of the local and regional structures, which have connection with the process, sufficient;

• Which is the most appropriate succession for implementation of the reforms?

In Bulgarian case the requirement for availability of authorities’ political will is definitely exaggerated. However, the experience in our country shows that a number well started processes of decentralization ends with stabilization of the centralization. The reason for that is in the wish for realizing a lot of changes for very short period of time. At the backdrop of this, in Bulgaria it was recognized that some kind of general-purpose units at the regional level – be it deconcentrated state administration or democratically elected regional government – are necessary.

Bibliography

1. Bulgarian Constitution, 1991 2. Local self-government and Local Administration Act, 1991 3. Municipal Budgets Act, 1998 4. Administrative territorial System of the Republic of Bulgaria Act, 1995 5. Regional Development Act, 2004 6. Kungla, T. Europeanization of territorial structures in Central and Eastern European

Countries, Tartu, 2002 7. Fiscal Decentralization in Bulgaria – focusing the debate (Report by the Center for

Economic Development), Sofia, 2002 8. Fiscal Decentralization in Bulgaria – Current Situation and Recommendations for Future

Actions (Summary Report by the Center for Economic Development), Sofia, 2005 9. Concept for Financial Decentralization, 2002 10. Boev, J. Bulgaria: Decentralization and Modernization of the Public Administration , 2002

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THE INFORMATIONAL SYSTEM IN THE ENTERPRISES OF THE SOUTH-EAST EUROPE

Prof. dr. Karolina Ilieska

Faculty of Economics-Pri lep [email protected]

Abstract

Application software is one of the most important elements of any information system. The most recent trend in the field of the software is, undoubtedly, migration of classic applications from centralized computer architectures to network or distributed architectures. This migration as well as dynamic business environment of an enterprise; need new methods, technique and application development tools. In contrast to classic applications, distributed applications are ch aracterized by their flexibility and adaptability and they are created by modern development tools. Basic types and characteristics of the tools are dealt with in the paper and software base in the enterprises of the Sout h-East Europe and modes of the creation are given at the end.

Keywords • Informational system; • Software; • Management.

Rezumat Aplicarea soft -lui este unul dintre cele

mai importante elemente ale oricarui sistem informational. Cea mai recenta orientare în domeniul soft -lui este, fara îndoiala, migrarea aplicatiilor clasice de la arhitectura computerului centralizat catre arhitecturi de retea sau de distributie. Aceasta migrare, cât si dinamica mediului de afaceri al unei întreprinderi, au nevoie de metode si tehnici noi si de aplicarea instrumentelor de dezvoltare. În contrast cu instrumentele de aplicatie clasica, tehnicile de aplicatii distributive sunt caracterizate prin flexibilitate si adaptabilitate si sunt create de instrumente moderne de dezvoltare. Prezentam în expunerea noastra tipuri de baza si caracteristici ale acestor instrumente si baza soft din întreprinderile din Sud-estul Europei, cât si modul în care sunt create.

Cuvinte cheie • Sistemul informational; • Software; • Management.

1. Introduction

Products short lifetime and very

strong competition characterize environment in which modern enterprise operates. That is why prime objectives of a modern enterprises are fast launching of new products to market, product quality improvement and securing better service

for customers. They all arose new challenges for information specialists, who must in a short period of time, develop application as support to changeable business needs.

In addition to business, there are technological requirements for applications functionality and easy use as well. That leads to increase the



complexity and size of software projects, long period of time required for software development and high software maintenance costs. Besides, programs should function not only in isolation but in integrated environment with the other programs as well, the ones that the other firms have developed and its various hardware and network configurations made by different manufacturers. Big and complex IS geographically distributed data processing and constant requirements for IS flexibility make need for complete change of the way the applications are comprehended, developed and maintained.

Software that provides competitive advantage to an enterprise is composed of many general and specialized parts (software components). So me of the parts can be bought on the market but software firm later adapts the parts to specific needs, while some bought parts have been adapted by enterprise information specialists.

It is only distributed, client -server (C/S) applications based on object-oriented technology, that can meet enterprise changeable business needs. Various C/S tools types can be used in this application development. On the choice of appropriate C/S tools applications quality will depend as well as possibility of carrying out of business task successfully. The paper should help to all those who make decisions on C/S choice. Therefore second part of the paper deals with various classifications of C/S tools, and its addition for each type of tools is given what business and technical needs it meets most successfully.

The enterprises of the Balkan undoubtedly lag behind in use of the newest modern technique in application development. It is useful therefore to see what is software base of Sout h-East European enterprises IS and how the applications develop and it is the topic of

third part of the paper. Software basis analysis and the way of application development would help South-East European enterprises to see the problems in the field and find out appropriate solutions.

2. C/S caracterisitcs

When developers analyse C/S tools

they must study problems which should be solved apropos of goals which should be realized by application development. Therefore, there are: tactical tools for tactical goals realization, strategic tools for realisation of departmental / workgroup goals and strategic tools for enterprise goals realization.

Tactical tools - enterprise often needs an application for short -term goals realisation. For example enterprise should accomplish pilot test for influence measurement of a new product on market, before product introduction. When a product has been designed to be awhile on the market, the application must be developed rapidly and then canceled. Such applications could be developed by client-based tools.

Departmental/workgroup strategic tools - many departmental applications has greater strategic importance then some enterprise applications. Departmental/ workgroup applications have two forms: data-driven applications (the most popular today) and conversation-driven applications. Data driven applications have designed for access to server databases. The second type applications have access to subjective data from various sources.

Enterprise strategic tools- the tools will be dominated in projects of classical mainframe - based applications replacement with network-based C/S applications. Three types of the tools will be important: C/S vertical software oriented to solving specific missions

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(accounting, manufacturing, financial and human resources); tools tied to relational databases management systems; high-end tools designed to build database-independent, large-scale systems from scratch.

When developers decided if application is tactical or strategical, then they can solve some technical issues. These technical issues include the role of graphical presentation services; development and deployment of complex logic; role of server-based development and the evolution to balanced C/S computing. From that technical characteristics aspect, we may identify following types of C/S tools: client-centric graphical tools; server-based tools and balanced C/S tools.

Client - centric graphical tools - most of tools on the market are noteworthy for the way they create data-entry and retrieval screens. Intent of the tools is all application logic implementation on the client (for example, Windows-based tools). They will be useful if the application is designed to easy user manipulation of data from a server database. These C/S development tools are characterized by graphical user interface (GUI) and they are efficiently used for report generation and database query which magnify end-user productivity.

When users choose the tools, the most important feat ures are: application quality (speed and efficiency of application, consistency of application); support (quality of vendor’s support, responsiveness of vendor’s service); programming, robusteness of programming language, flexibility of programming language, speed of programming); compatibility (compatibility with operating environment, compatibility with development methodology, working with multiple operating environment); ease of

use (accessability of user interface, learning/training time, ease of installation, documentation); price (acquisition and support costs, value for the dollar).

The best tools according to these features are: Microsoft Visual Basic; Gupta SQL Windows; Powersoft Powerbuilder. These types of C/S tools work well in development of tactical and small departmental / workgroup applications. However, the next type of tools are recommended for larger projects.

Server-based tools - these tools lack possibility for grafical screen creation in PC style. However they have scalability for development of applications based on server. The tools are appropriate for development of medium size workgroup applications. Many of these tools are redisagned to better serve GUI clients.

Balanced C/S tools - the latest tool generation is designed as attempt to use the best features of clients and servers: grafical development environment of clients and possibility to store application logic and data on the most appropriate platform, apropos of server (a feature know n as partitioning).

Tools from that category make possible high -end applications development which comprise the whole enterprise and great number of users. The tools intent to assure the best characterictics of CASE tools and sophisticated programming languages, so programmers don’t have to use third generation languages (3GL). Therefore, the tools assure built -in data dictionaries, databases for stored business rules diagramming tools and the like. Many of these tools also provide application programming interfaces (API) so third-party tools can be integrated. Many server-based tools will start to traverse in that category.

Generally, we may identify two C/S tool generations on the base of previous classification. First-generation



tools are client-centric and they solve tactical problems while second-generation tools are balanced and they support departmental, workgroup and enterprise strategic goals realization.

Respecting short-range goals which the first generation tools realiz es, they are used for rapid application development (RAD). Regardless the tools are good from GUI aspect, they can not solve complex issues considering business (application) logic and data management. Only the second generation tools can solve the issues.

Almost all first-generation tools integrate GUI programming code with application logic so all the logic must be in client. If the application logic includes data access, then scalability which follow from moving that logic to the server become almost impossible. This integration also requires all data transfering across the network between client and server resulting in a network bottleneck.

In order to developing more complex and greater C/S applications first generation tools, programmers must use 3GLs and SQL extensions from various software firms. Fat client sindrom emerges in that situation. The sindrom emerges when desktop system has too much application logic so the system performancegetting low.

Due to 3GLs and SQL extensions, first generation C/S tools force programmers and users to develop applications in which data management logic is tight to one particulary database. If the application needs to access some other database, application logic must be modified. It is difficult to add complex application logic, because there is not modularity in application development. This problems are also solved by second generation C/S tools.

The second generation C/S tools solve complex problems considering GUI,

business logic and data management and also solve problems considering various hardware and network platforms, various databases and increasing number of users. However the greatest benefit from those tools is development of flexible distributed application which have feature of adaptability. The adaptibility is consistent with continual changes in many modern enterprise business aspects.

Nobody can assume how much business conditions will change and become more complex. Many of these changes are infrastructural: entry in new distribution chanals, mergers and acquisitions or new partnership forms.

An enterprise may twice or triple increase its size and according to that change its organization structure can be changed. A top management may distribute responsabilities for various business aspects to business units accros the world and later may restore much centralized management structure. Therefore an enterprise should combine business planning with second -generation C/S technology in order to assure flexible application development.

The second generation C/S tools should be comprehensive and adaptive. Comprehensiveness is relate to application development environment creation which cover the entire application life cycle of design, development and deployment. In each phase of the life cycle, the development environment should allow a developer to use a single skill set rather forcing the developer to work with a variety of products that may not work well together in the future.

Adaptability of the development environment is related to changes in business requirements as well as to changes in user interface, databases, computer networks and operating systems. The adaptive environment abstracts or hides technical infrastructure complexity so developers can be oriented to a

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business problem instead to techologies that are subject to change.

General characteristic of C/S development tools is that they are getting more sophisticated and increase their possibilities. C/S tools market is in the early phase, so developers should pay attention to the best tool selection. C/S tools selected today maybe can not suit to future business needs and users must take into consideration that fact when develop their first C/S applications. Next C/S tool generations will more and more get features of object-oriented technology which will provide flexibility and modularity in application development form the components. These components can be reused for the other application development. Developers could not believe that one tool will solve all application development problems so they should consider several various tools. They always should consider the new tools in order to get ready to inevitable technology changes.

3. Software base of the enterprises of the South-East Europe

Information about software base of

the enterprises of the South-East Europe is obtained by empirical research. The results show that none of the scanned enterprises implemented the newest application development information technologies (object-oriented planning and C/S tools). Most of the application is created in some 3GL. COBOL is used very often, after folow PL1, FORTRAN and RPG/2. The most of scanned enterprises which use 3GLs belong to category of greater enterprises. These enterprises implemented their first IS on classical minicomputer systems about 20 years ago. These systems stayed in these enterprises until today, beside eventually adding PC.

All the nominated programming languages belong to procedural languages category. It is difficult for users to learn and adopt the languages because users must follow rigorous formal procedures when they develop an application. It is the reason that users in the enterprises let information specialists to generate standard, regular reports and poorly use IS for ad hoc report generation.

Ease of application development and use is one of primary criteria for programming language selection. Majority of enterprises obviously have not taken into consideration these criteria, because most of the scanned enterprises use only 3GLs for application development. Application development in procedural languages lasts long and users in the enterprises don’t understand all IS features. Moreover, it is difficult for users t o understand IS specifications because long time period elapses from the specifications determination to IS test.

Information function executives in some of the scanned enterprises have understood the need for increasing productivity in application development. They have adopted new methods for application software development: report generators and query languages. The research results show that 20% of the scanned enterprises use the new application development methods beside procedural languages. However, these enterprises use 3GLs for application development as a primary method. It could be said that the enterprises belong to large enterprise category. The enterprises have recognized all 3GL disadvantages, but due to impossibility of full old IS replacement, the enterprises implemented this hibrid solution.

Some of the scanned enterprises (10%) use network database query languages (for example, IDS2 and IDA databases). It’s hardly to say that these enterprises adopted modern application



development methods. Enterprises in developed countries abandon network databases or redesign (convert) these databases into relational databases wherever it is possible. These databases are implemented on old Bull Honeywell minicomputers and it may say that it is closed appli cation architecture which have not interface with many modern architectures.

Enterprises in developed countries have already long used the forth generation languages 4GLs or nonprocedural languages as primary application development method. American enterprises which started IS implementation a couple decades ago also have the old applications created by some 3Gl (most often COBOL). However, these enterprises practice redesigning the applications into C/S applications, and data organized in the old files redesign into relational database structures. The enterprises almost don’t implement such projects. Only 15% of the scaned enterprises are entirely replacing old applications with C/S application based on relational databases. They are not used redesigning method by which the old applications could be gradually span to the new hardware platform and data structure. The enterprises started projects from null and lost investment in old IS.

The enterprises which started their first IS implementation several years ago are in the best situation. These enterprises could use modern application development methods avoiding problems considering old, unflexible, centralized and monolit application. These enterprises (18%) adopted nonprocedural SQL which represent the wor ld standard in relational databases application development. The enterprises mostly belong to smaller enterprises category. Regardless that SQL is ease to use, it is not accepted by users of the enterprises because it requires certain knowledge degree about particular

application and database structure. However users of the enterprises need training and good documentation.

Enterprises of developed countries have practice in purchasing completed software application whenever it is possible. Expection is specific application needs relate to particular industry or enterprise. The needs can be satisfied by internal developed applications. However, in the great number of scaned enterprises (43%) still the most application needs have been satisfied by internal application development. 32% of the scaned enterprises combine internal application development with completed applications purchasing, however internal application development is dominated. Only 25% of the scanned enterprises destine for purchasing the great est number of applications.

Most of the applications developed in the scanned enterprises belong to financial and accounting applications group. Respecting that financial and accounting function has standard information needs for many enterprises and various industries, the needs could be satisfied by already developed applications which can be found in the market. Namely, Sout h-East European market has the great number of microcomputer and network aplications which are relatively cheap and easier to use than COBOL applications.

The great number of scanned enterprises (20%) which have not enough human resources for substantive application development decided to purchase all the needed applications. Even some of the scanned enterprises having the resources co mprehended that substantive application development is much expensive solution which don’t satisfy information needs on timely manner. Often, information needs change before application is finis hed, due to long time development.

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Microcomputer software pack ets are very poorly used by the scanned enterprises. 30% of the scanned enterprises almost don’t use the packets that is very great percent whereas the packets are prevalent in the developed countries. This condition is reasonable whereas minicomputers wit h 3GLs applications are prevailing.

4. Conclusion

The most recent computer trend in the

field of software is, undoubtedly migration of classic applications from centralized computer architectures to network or distributed architectures. This migration as well as dynamic business environment of an enterprise, need new methods, technique and application development tools. The enterprises of the Southeast Europe undoubtedly lag behind

in use of the newest modern technique in application development. Careful recording of software base in the concrete enterprise would make it possible to identify those business fields in which C/S applications could be implemented first. It is obvious that it should be started with tactical application, which is to be developed by the first C/S tools generation. At the time when the enterprises of the Southeast Europe information specialists master first generation of C/S technology, then about development of strategic C/S applications of certain department, workgroups or the whole enterprise should be thought. In that sense market of C/S tools of second generation should be followed and researched, for it is in its beginning phase of development that is characterized by great dynamic.

Bibliography

1. Management Challenges in IS: Successful Strategies and Appropriate Action, J.

Wiley and Sons, pp. 38-54, 1996 2. Galliers, D.R. Strategic Information Systems Planning: Myths, Reality and

Guidelines for Successful Implementation, European Journal of Information Systems 1 (1), pp. 55-64, 1991

3. How Information Can Help You Compete, Harvard Business Review, 1995 4. Raymond McLeod, Jr. Information systems, Texas A & M University, Macmillan

Publishing Company, a division of Macmillan Inc, 1990 5. Ilieska, K ., Risteska, A., Miladinoski, S. Marketing information system , Bitola,

2002



COMMUNITY-BASED TOURISM: THE CASE OF THE BUTRINT NATIONAL PARK, SOUTH ALBANIA

Klodiana Gorica, Ph.D. Franka Paloka University of Tirana Ministry of Tourism, Culture, Youth and Sports Faculty of Economics Directory of Tourism Department of Marketing and Tourism [email protected]

Abstract

The concept of Community Based

Tourism (CBT) has been a further development within the sustainable tourism approach. Drawing from the theories and practice of participatory development, it specifically focuses on the impact tourism may have on local communities with the aim of maximizing benefits in terms of jobs, wealth, and support for local culture and industry, and protection of the built and natural environment. Thus the challenge is to put local communities at the center of tourism initiatives and supports in an effort to create win-win solutions concerning the management of tourism destinations. CBT is planned with the goal of preserving local natural and cultural assets, so that both residents and visitors may benefit from the tourism experience.

Dealing with culture and sustainable development should be done within the objective of promoting sustainable development in the region and conserve the Butrint National Park (BNP), by engaging surrounding communities in the development of community-based tourism products and services. The underlying assumption of intervention is that CBT assists in the conservation of BN P’s cultural and natural values by demonstrating the Park’s potential to the local communities in order to generate sustainable economic activities.

Keywords • Sustainable; • Ecotourism; • Community Based Tourism; • BNP.

Rezumat

Conceptul de turism bazat pe comunitate (CBT) reprezinta o noua dezvoltare în abordarea turismului durabil. Pornind de la teoriile si practica dezvoltarii participative, el se refera în mod specific la impactul pe care turismul îl poate avea asupra comunitatilor locale, cu scopul de a mari beneficiile în ceea ce priveste locurile de munca, bunastarea, sprijinul pentru cultura si industria locala, si protectia mediului înconjurator construit si natural. Astfel provocarea este sa plaseze comunitatea locala în centrul initiativelor turistice si sa sprijine efortul de a avea solutii profitabile de ambele parti în ceea ce priveste managementul destinatiilor turistice. CBT are ca scop pastrarea valorilor locale naturale si culturale astfel încât, atât localnicii cât si vizitatorii sa aiba beneficii din experienta turistica. O dezvoltare durabila culturala ar trebui sa fie luata în considerare ca obiectiv al promovarii dezvoltarii durabile în regiune si conservare a Parcului National Butrint prin angajarea comunitatilor în dezvoltarea produselor si serviciilor turismului bazat pe comunitate. Presupunem ca acest tip de interventie a CBT conduce la conservarea valorilor culturale si naturale ale Parcului National Butrint demonstrând autoritatilor locale potentialul parcului cu scopul de a genera activitati economice durabile.

Cuvinte cheie • Durabil; • Ecoturism; • Turismul Bazat pe Comunitate; • PNB.

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1. Introduction Today, travel and tourism are

considered the world’s largest industries. By 2010, they are expected to have generated over 328 million jobs across the globe. The gross economic benefits related to these industries are evident and measurable both in terms of revenue and job creation. Social factors and technology are the two main factors that account for the boost in the travel and tourism industries. Growing wealth, cheaper and more efficient transportation, the maturation of the hotel business (e.g., the upgrading and standardization of services), and information technology are some determinants of the increase in demand for tourism.

The traditional forms of mass tourism, which often result in the disruption of local economies, seasonal unemployment, degradation of the natural and decay of the cultural environment, are inherently unsustainable. Though the Travel and Tourism industries have had a particular interest in protecting both the natural and cultural resources, there have been several cases where a negative impact on the environment and people has been found. According to the World Travel and Tourism Organization and the International Hotel and Restaurant Association (1999) some of the most important factors contributing to the impact of tourism are:

• a lack of awareness, on the part of those making decisions about tourism development, of the social, economic and environmental balan ce to be pursued in achieving sustainable development;

• a lack of commitment by tourism operators and travellers to contribute to the maintenance of the local environment and culture of the host destination;

• a weak institutional framework with inadequate controls unfairly traded

tourism, whereby local communities like BNP are unable to share benefits;

• large flows of visitors in remote or sensitive locations can place considerable strains on local resources. Travellers’ expectations of available goods and services can lead to distorted supply of these items or services if imported from outside or local supply chains;

• tourism can change a destination’s cultural make-up and, if poorly developed, can increase crime, prostitution and other social problems.” (World Travel and Tourism Organization and International Hotel and Restaurant Association, 1999). However, tourism can also contribute to economically, ecologically and socially sustainable development because it:

• has less impact on nature and the environment than most other industries;

• is based on enjoyment and appreciation of local culture, built heritage, and natural environment, as such that the industry has a direct and powerful motivation to protect these assets;

• can play a positive part in increasing consumer commitment to sustainable development principles through its unparalleled consumer distribution channels;

• provides an economic incentive to conserve natural environments and habitats which might otherwise be allocated to more environmentally damaging land uses, thereby, helping to maintain bio-diversity.

In addition new patterns of tourists and tourism have arisen. The logic of sustainability imposes several limits to all aspects of massive tourism. Interpreted very broadly, more cautious and environment -friendly, forms of tourism have been suggested as a way out of such problems. A broad definition of alternative tourism would refer to forms of tourism consistent with natural, social and



community values thus allowing both hosts and guests to enjoy positive and worthwhile interaction and shared experiences. As such, according to De Kadt (1990), the key issues that must be dealt with, are: a) environmental, b) the scale of development, c) the question of «who benefits», d) cultural sustainability. 2. T he concept of community based tourism

The concept of Community Based Tourism (CBT) has been a further development within the sustainable tourism approach. Drawing from the theories and practice of participatory development it specifically focuses on the impact tourism may have on local communities with the aim of maximizing benefits in terms of jobs, wealth, and support for local culture and industry, and protection of the built and natural environment. The challenge thus is to put local communities at the heart of tourism initiatives in an effort to create win-win solutions concerning the management of tourism destinations.

CBT is planned with the goal of preserving local natural and cultural assets, so that both residents and visitors may benefit from the tourism experience. CBT focuses on the long term well being of the community, and includes those who are affected by the project as partners in the development process, in markets conducive to sustainable development.

Communities often regard environmentally protected land or historical sites as limitations. The conflict arises from the fact that such areas must be conserved thus resulting in the application of limitative laws/measures, which at the first glance may seem as detrimental for the surrounding populations. CBT seems to solve this conflict by making sure that while the cultural heritage and environmental

blessings of these areas are protected, local inhabitants profit from them.

CBT initiatives are designed and operated to provide economic benefits (what BNP needs) to the community, rather than having large corporations reap the benefits through all-inclusive resorts. Differently from these latter, CBT creates incentive for tourists to spend both time and money in the community rather than in resort and large hotels.

The most important feature of CBT is its social sustainability, (what BNP needs). Activities are developed and operated mostly by local community members, with their full consent and support. Another very important feature of CBT is its respect for local culture, and traditions, as well as its concern for natural heritage, especially since the environment tends to be one of the primary attractions.

3. The case of Butrint National Park, Albania

The Butrint National Park (BNP), Albania’s best preserved natural park and archaeological site has experienced a very interesting application of the CBT model and is a good illustrator of how capacity building focused on participatory approaches can become a key ingredient to its success. Situated at the south of Albania, t his protected area covers 29 km 2. Besides the natural and diverse landscape, it also includes ruins which date from the late Bronze Age (12th century BC), through the Greek, Roman, Byzantine, Venetian and Turkish periods, up to the 18 th -19th centuries AD. Archaeologists have always been drawn to this area, and the park itself has been open to visitors since the 1970’s. Only in 1992 was it considered a World Heritage Site, later to be expanded in 1999. Finally, in March 2000, the Albanian government proclaimed it a National Park.

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Extraordinarily the landscape of the Park is intact. This area is home to 33 animal species of Global Conservation Concern, 14 of which are globally endangered species. Nearly 70% of the country’s amphib ian and reptile species, and the largest number of bird species ever recorded on an Albanian site, as well as a great diversity of mammals, endemic and subendemic plants of National Conservation Concern, are found in this area. The land between the Cuka Channel and the Greek border, which includes the Butrint National Park and the Stilo Peninsula, has been designated a Wetland of International Importance under the Ramsar Convention, since 2003. With more than 45,000 visitors each year, the Butrint National Park has been recognized to have great potential to become a catalyst for sustainable tourism and new income generation in the southern part of the country.

Several projects are dealing with culture and sustainable development with the objective of promot ing sustainable development in the region and conserve the Butrint National Park, by engaging surrounding communities in the development of community-based tourism products and services. The underlying assumption of intervention was that CBT assists in the conservation of BNP’s cultural and natural values by demonstrating the Park’s potential to the local communities in order to generate sustainable economic activities.

The intervention second my opinion must be:

• To develop community-based tourism and relat ed products (e.g., crafts, specialty agricultural products with Butrint branding) in and around the Park in a way that (i) minimizes the impact on natural and cultural resources with the aim of maximizing benefits for local communities; (ii) unites the local communities and interest groups behind

the conservation of the Park; (iii) provides information and educational experiences that highlight the Park’s values.

• To build the capacity of Park staff to: (i) conduct community outreach and generate goodwill within communities through multiple avenues and programs; (ii) assist communities in developing community based tourism and related products that support the goals and values of the Park; (iii) undertake conflict resolution when necessary.

• To build the capacity of local communities to develop, manage and market their community based tourism businesses. This included: (i) training and technical assistance to the Park Management and to community members; (ii) support to local communities in accessing funding, micro-credit and other forms of support from public and private entities, both nationally and internationally.

CBT in BNP in Albania have to adopt a participatory approach. This entails the inclusion of different dimensions such as:

a) animation: the proces s of assisting people to develop their own capacities, to examine and explain issues they can do to bring about change;

b) structuring: the development of solidarity and of some form of structure among rural people;

c) facilitation: assisting people to undertake specific actions designed to strengthen their participation such as acquiring particular technical skills, gaining access to available resources or translating their ideas into feasible projects;

d) intermediary: serving as a go-between and helping the establishment of contacts with existing services or actors;

e) withdrawal : encouraging local people (possibly through the development of local agents) to undertake and manage the projects in which they are involved.



4. Community - based tourism activities

Communication played an important role in the project. Various awareness raising activities are carried out in view of engaging local villagers, students, local authorities, local press and radio in CBT activities. These activities raised inhabitants’ interest and knowledge about the Park, sustainable tourism and the sustainable utilization of the environment. It also will provide necessary information to the local population about the BNP and the opportunities it could provide, as well as attempted to change the negative perception of many villagers towards CBT.

Whereas the above activities helped create of an enabling environment for community based tourism, technical assistance provided on CBT was definitively the backbone of the intervention. Consequently, the objective will be on:

(i) identifying products usually crafted by women and techniques used e.g., hand-sewing, embroidering, knitting needles, crochet;

(ii) Showing high-quality products and models from neighboring countries;

(iii) discussing issues relating to quality, materials and prices;

(iv) identifying characteristics of products which will attract different kinds of tourists e.g., small and practical objects, easy to travel with, cheap, good quality, and strong links to the Albanian tradition and Butrint image which could be sold as “souvenirs of the Butrint National Park”;

(v) discussing the need to link the product and the BNP, i.e. by using the Butrint Byzantine mosaics figures (flowers and birds) as decorations for the handcraft products;

(vi) examining the need for raw materials;

(vii) the establishment of working groups as the best way to organize the work.

Finally, it is necessary a study on local products, especially local agricultural products. The analysis showed that such products can not be traded due to conservation needs and compliance to health standards. Therefore, only the sale of honey, spices and medicinal herbs, which can be easily conserved, is encouraged. Or for example, the other CBT activity identified are to direct assistance to local fishermen in order to establish a boat tour service within the BNP.

The promotion of a tourism service must consiste on:

a) a brochure in both Albanian and English to be distributed to tourists at the entrance of the Butrint archaeological site, in the village of Ksamili and in the town of Saranda, in particular in restaurants and bars, to taxi drivers and to local tour operators;

b) leaflets distributed to tourists at the entrance of the Butrint Park, by the ranger in charge of selling park tickets;

c) orga nizing a boat tour for 8 journalists form Saranda, Delvina and Gjirocaster and 2 tourist agents from Saranda. The service became less reliable due to the poor motivation of fishermen and the long timetable foreseen; fishermen proved unwilling to be present at the departure point during all the foreseen work hours.

Another finding are Bed and Breakfast (B&B) in the villages around the Park. After having successfully tested the boat tour and the handcraft activity, thereby gaining credibility, it is necessary to explore other CBT activities and services to include the most ambitious goal of prolonging the average tourist visiting time and increase the potential for revenues generation in the region. In order to support the B&B and create other

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attractions and income-generating opportunities for the broader community, a number of ecotourism activities such as trekking, bird watching, party with traditional music and dances, dinners in families and traditional food must be identified and tested with the first groups of visitors. The B&B offer and pilot experiences were broadly communicated with the Tourism Office of Saranda, the local tourism agencies, the local population (via the local mass media) as well as with interested parties internationally, targeting mostly through specialized travel groups (via email).

5. Main challenges and lessons learned

One of the biggest challenges has been the redefinition of the Park’s role and building of a new image as an opportunity. The Park was mostly perceived as a limitat ion to the local population and little effort is put into adequately informing people about the rational and the potential benefits arising from its protection. The Park suffers the absence of a comprehensive communication strategy and a specific attention to local tourism development. Therefore it is important to put a significant amount of energy and often worked as a mediator towards the reversing of this image Moreover, specific problems must be encountered in the implementation of specific CBT activities. With regards to the handcraft activities, the main problems is the low level of participation of local women due to their engagement in production for middlemen for sale in Greece, and the perception among local women, at the offset of the project, that handicraft is a hobby rather than an opportunity for income generation The main problem encountered with the B&B activity is the lack of experience of the hosting families. Some could not differentiate between hospitality to

relatives and tourism (e.g., problems of privacy).

At the same time, a number of lessons must be learned. In particular, the focus on communication and sensitization activities must prove to be a key to the project success. Accompanying stakeholders in every step of the technical assistance with proper communication activities is a critical ingredient in showing people the critical linkages between tourism, conservation and poverty reduction. I consider that these linkages are critical to generate a common understanding about the whole activity, prevent conflict and pave the ground for sustainable CBT. A lot of attention must be concetrate into marketing, especially at the offset of such activities. Indeed, the mix of communications and technical assistance has to succeed in changing the attitude and perception of local stakeholders towards the Park, which is now seen by many an opportunity and not only a limitation. In fact, most villagers now see the Park and its related tourism as a key potential for increasing their well-being.

In the future the qualitative results will refer to: • the demonstration of the potential of CBT initiatives to the local community; the interest shown by and involvement of the poorest people; • the increase of the tourism offer in the Park’s area especially throu gh the preparation, testing and positive evaluation of the eco-tourism package; • the creation of new economic activities and income sources and the non-negligible earnings of the people involved in such initiatives; • the attraction of supplementary funds to support the CBT; • the creation of a positive attitude towards local development and the engagement in new economic opportunities that emerged in the area;



• the strengthened link between the people and the territory, the increase in self-esteem and pride of the local people, along with awareness raising on issues like environmental protection and waste management; the consideration of the Park as an opportunity and not only as a limitation by the local community.

The CBT approach indeed strengthened the link between the local communities and the territory, generates cultural pride and makes people more attentive to its potentials and more sensitive to its protection. Moreover, the

experience gained through the development of small-scale sustainable-tourism related businesses can increase community capacity, energy and resources in addressing other local problems with a view to sustainable development. Finally, as a long term perspective, the economic earnings generated by the small businesses associated with community based tourism are more likely to remain in local communities than those generated by large scale/capital intensive tourism.

Bibliography

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3. IMF. Albania Poverty Reduction Strategy Paper Annual Report, IMF Country Report 04/204, 2005

4. Internal Labour Organization, Department of Communication – Press room (2004) Rural

5. Community based tourism: a portal to living cultures, (http://www.ilo.org/public/english/bureau/inf/features/04/tourism.htm)

6. Koutsouris, A., Santi, E. , A. Tare. Building support for protected area: the case of the Butrint National Park, in: Communicating Protected Areas, Eds. Hamou D., Auchincloss, 2004

7. E. and Goldstein, W., CEC-IUCN (Commission on Education & Communication – The World Conservation Union), Gland, Switzerland and Cambridge, UK, 2004: 92-101

8. Oakley, P. et al. Projects with People, Geneva, ILO, 1991 9. Penna, F., Duer, K., K. Ebbe. Community Based Tourism Project, Preparation,

2002 10. World Travel and Tourism Association, and International Hotel and Restaurants

Association (1999) Tourism and Sustainable Development: The global importance of tourism (UN Department of Economic and Social Affairs, Commission on Sustainable Development, Background Paper 1) www.gdrc.org/uem/eco -tour/wttc.pdf

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THE ROLE OF THE FOREIGN CAPITAL IN THE INTEGRATION PROCESS OF REPUBLIC OF MACEDONIA

Assistant researcher Boskovska Diana M. Sc. Institute of Economics, Skopje [email protected]

Abstract

Foreign capital has significant role for

every national economy, regardless of its level of development. For the developed countries it is necessary to support sustainable development. For the developing countries, it’s used to increase accumulation and rate of investments to create conditions for more intensive economic growth. For the transition countries, it’s useful to carry out the reforms and cross to open economy, to cross the past long term problems and to create conditions for stable and continuous growth of GDP, as well as integration in world economy.

In accordance with low level of accumulation and rate of development, Macedonia as a transition country has a very big need for foreign capital. When we talk about the foreign capital and its need and significance for the Macedonian economy, on the first place we have in mind the foreign direct investments, that result by the great number of externalizes produced by FDI for the national economy. But, also credit and loan as traditional form of transfer of capital in international economic relations, it will be useful for the growth only if it is at the reasonable level (in regard of the national external debt) from one side, and if its use in the development of a certain economy is efficient, from other side.

Keywords

• Development of the nat ional economy;

• Foreign capital; • Credits and loans; • Foreign direct investments.

Rezumat

Capitalul strain are un rol semnificativ pentru orice economie nationala, indiferent de nivelul ei de dezvoltare. Pentru tarile dezvoltate el este necesar pentru a sprijini dezvoltarea durabila. Pentru tarile în curs de dezvoltare, el este necesar pentru a creste procesul de acumulare si rata de investitii, creând conditii pentru o dezvoltare mai intensa. Pentru tarile aflate în tranzitie el este folosit pentru realizarea reformelor, pentru a trece la o economie deschisa, pentru a depasi si a crea conditii pentru o crestere stabila si continua a PIB, cât si pentru integrarea în economia mondiala.

Din cauza nivelului scazut al acumularii si al ratei de dezvoltare, Macedonia ca tara aflata în tranzitie are mai mare nevoie de capital strain. Când vorbim despre capital strain si despre nevoia si semnificatia lui pentru economia macedoneana, pe primul loc punem investitiile straine directe în economia nationala. Ne gândim de asemenea la credite si împrumuturi ca forme traditionale de transfer de capital în relatiile economice internationale. Acestea vor fi folositoare pentru crestere doar daca sunt obtinute la un nivel rezonabil (în raport cu datoria externa) pe de o parte si daca sunt folosite eficient în dezvoltarea economiei, pe de alta parte.

Cuvinte cheie

• Dezvoltarea economiei nationale; • Capital strain; • Credite si împrumuturi; • Investitii straine directe.



1. Introduction

Achieving the higher level of development of the national economy is determined by the investments. According to this issue, for analyzing are relevant some aspects as: scope, structure of investments, sources for their financing, their efficiency and etc. The object of the research in this article is the foreign capital and its need and significance for the certain national economy, considering the case of Republic of Macedonia as transition country. 2. Foreign capital and economic development

Development of national economy is a function of few factors: natural resources, labor and capital. Compared with the first two factors, capital (investments) has a role of mover of the whole development of the national economy, because of its dynamic character, that means its ability to put in the function of development the two previous mention factors. In the function of development of the national economy, along the domestic capital, the foreign capital is relevant, also, especially in the country with less level of development - developing and countries in transition process in Central and Southeast Europe.

In the recent years, we have noted the significant growth of the foreign investments in the world. This is a result of the globalization of the national economies, liberalization, as well as openness to new types of investments. On behalf of this conclusion talk also the data in the Table 1 shown below, that ables to see flows of foreign capital for certain regions, as well as for certain countries for the period 1989-2000.

In the developing countries foreign capital is necessary for increase of accumulation and the rate of investments, exactly it contributes for more intensive economic development. For the transition economies, in which group is Republic of Macedonia, also, foreign capital appears as a condition for carry out reforms more successfully, transfer to open economy, cross over the heriditary problems from the past, creating preconditions for stable and continuous growth of GDP and possibilities and opportunities for integrating in the world economy, too.

There are few forms of the foreign capital, but credits and loans and direct investments are the most used forms of foreign capital. In this case it will pay attention to these forms of capital and their role for the Republic of Macedonia.

Tabel no. 1 (in billion $)

Inflow of FDI

Region/Country 1989-1994 1995 1996 1997 1998 1999 2000

Developed Countries 137.1 203.5 219.7 271.4 483.2 829.8 1005.2Western Europe 79.8 117.2 114.9 137.5 273.4 485.3 633.2EU 76.6 113.5 109.6 127.6 261.1 467.2 617.3Other countries of the Western Europe 3.1 3.7 5.2 9.9 12.3 18.2 15.8Japan 1.0 - 0.2 3.2 3.3 12.7 8.2USA 42.5 58.8 84.5 103.4 174.4 225.0 281.1Developing countries 59.6 113.3 152.5 187.4 188.4 222.0 240.2

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Africa 4.0 4.7 5.6 7.2 7.7 9.0 8.2Latin America and Karibu 17.5 32.3 51.3 71.2 83.2 110.3 86.2Asia and Pacific 37.9 75.9 94.5 107.3 95.9 100.0 143.8 Asia 37.7 75.3 94.4 107.2 95.6 99.7 143.5 Western Asia 2.2 - 2.9 5.5 6.6 0.9 3.4 Central Asia 0.4 1.7 2.1 3.2 3.0 2.6 2.7

South, East and Southeast Asia 35.1 73.6 89.4 98.5 86.0 96.2 137.3

South Asia 0.8 2.9 3.7 4.9 3.5 3.1 3.0 Pacific 0.2 0.6 0.2 0.1 0.3 0.3 0.3Developing countries in Europe 0.2 0.5 1.1 1.7 1.6 2.7 2.0Central and East Europe 3.4 14.3 12.7 19.2 21.0 23.2 25.4World 200.1 331.1 384.9 477.9 692.5 1075.0 1270.8

(in billion $) Outflow of FDI

Region/Country 1989-1994 1995 1996 1997 1998 1999 2000 Developed Countries 203.2 305.8 332.9 369.9 672.0 945.7 1046.3Western Europe 114.2 173.6 204.3 242.4 475.2 761.1 820.3EU 105.2 159.0 183.2 220.4 454.3 720.1 772.9Other countries of the Western Europe 9.0 14.6 21.1 22.0 21.0 41.1 47.4Japan 29.6 22.5 23.4 26.1 24.2 22.7 32.9USA 49.0 92.1 84.4 95.8 131.0 142.6 139.3 Developing countries 24.9 49.0 57.6 65.7 37.7 58.0 99.5Africa 0.9 0.5 0.0 1.7 0.9 0.6 0.7Latin America and Karibu 3.7 7.3 5.5 14.4 8.0 21.8 13.4Asia and Pacific 20.3 41.1 51.9 49.4 28.7 35.5 85.3 Asia 20.3 41.1 51.9 49.4 28.6 35.4 85.2 Western Asia 0.3 -1.0 2.3 -0.3 -1.7 0.7 1.3 Central Asia - 0.3 0.0 0.2 0.3 0.3 0.3 South, East and Southeast

Asia 20.0 41.8 49.7 49.5 30.0 34.4 83.6 South Asia - 0.1 0.3 0.1 0.1 0.1 0.3 Pacific - - - - 0.1 0.1 0.0Developing countries in Europe - - 0.1 0.2 0.1 0.1 0.1 Central and East Europe 0.1 0.5 1.0 3.4 2.1 2.1 4.0World 228.3 355.3 391.6 466.0 711.9 1005.8 1149.9

Source: UNCTAD, World investment Report, 2001



3. Foreign credits and loans and Macedonian economy

National economies that are faced with the problem of low level of accumulation of the economy, one way to come to the additional capital is using the debt from the domestic and international financial institutions, too.

Republic of Macedonia is in group of country with low rate of accumulation ability of the economy that concludes by the data from the Table 2. From these data we should see that the rate of the investments from the middle of the past decade until 2002 is in rang from 14-17 % from the GDP (the highest rate of investments of 17,5 % was released in 1998 year.)

Table no. 2

GDP at current prices, cross fixed capital formation, cross capital

fixed formation in mach. and equip. and rate of investmenst for period 1995-2002

(in million denars)

GDP at current prices

Gross fixed capital

formation

Gross fixed capital formation in

machinery and equipment

Rate of investments

1995 1996 1997 1998 1999 2000 2001 2002

169521 176444 186019 194979 209010 236389 233841 243970

28027 30654 32232 33982 34710 38332 34716 40448

10540 12054 13086 14553 15000 18122 15390 17917

16,5 17.3 17.3 17.5 16.6 16.2 14.8 16.6

Source: Documentation of the State Bureau for statistic of Republic of Macedonia

Figure no . 1 GDP, cross fixed capital formation and cross capital

fixed formation in mach. and equip. for period 1995-2002 year

0

50000

100000

150000

200000

250000

300000

1995 1996 1997 1998 1999 2000 2001 2002year

mill

.den

ars

BDP at current pricesCross fixed capital formationcross fixed capital formation in mach. and equip.Series5

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From the other side, when it will be taken in consideration the rate of amortization for this period and its movement from 14% to 15 % it should be conclude that Macedonian economy wasn’t in situation to realize varicose reproduction. Especially, some activities in certain years were in the zone of disinvestments. Such was the case with the industry, manufacturing and agriculture for the year 2000, when the participation of the rate of amortization in the value added was 18,4%; 12,6% and 9,4%, while the rate of the investments was on the level of 16,6%; 12,5% and 7,6%, respectively.

According to such situation in the economy, enterprises were enforced to financing their activity with debt. But, in the same time they are faced with the problem – insufficient and unattractive credits from the domestic commercial banks. That situation resulted from:

- the lost trust to commercial banks, resulting from the great numbers of saving houses bankrupted in the last decade;

- the high rate of interest that came out from the riskness of the commercial credits etc.

Have in the mind the limited internal possibilities for investing, Macedonian economy is enforced to satisfy the lack of capital from the import of the foreign capital. From some estimating, the portion of the foreign capital in the total financial sources for investments is around 40%. This figure talks for the relativity high share of the foreign capital, but the low level of the domestic accumulation cause the total investments in the national economy to be on relatively low level, see from the Table no. 3.

Table no. 3

FDI and credits and loans used for period 1995-2001 year (in mill. $)

Credits and loans FDI

1995 1996 1997 1998 1999 2000 2001

131.7 126.6 180.6 263.6 189.4 145.7 119.2

9.5 11.2 15.7 117.7 32.1 175.4 443.2

Source: Data from Central Bank of Republic of Macedonia

From the other side, the role of the foreign capital for certain economy is determined from its structure (relation between debt and direct investments). Macedonian economy needs for the financial assets have satisfied in great part by foreign credits and loans. According to the shown data in the Table no. 3, we should see that middle and long term

credits and loans from foreign creditors (means official and private creditors) risen to 1998, and after that there was a trend of decrease, because of the some problems in the national economy and the political-security situation in the country and region, widely. But from the aspect of the efficiency of the credits and loans, the general conclusion is that they weren’t



used propulsive enough, that resulting from the fact that in the first place such capital was used to pay the previous liabilities of using the credits and loans from the past (for the needs of the balance of payment), for infrastructure, to cover

the current expenses of the enterprises (amortization, wages, etc.), but lower part to support the production or financing the investments in industry, especially for the export (take in consideration the very huge deficit in the balance of payments).

Figure no. 2 FDI and credits and loans used for period 1995-2001 year

0

100

200

300

400

500

1995 1996 1997 1998 1999 2000 2001year

in m

ill. $

Credits and loans FDI

The Republic of Macedonia

belongs to countries with the relatively low level of external debt that means there is possible capacity for making new arrangements for credits and loans. But it will be justified, only in the case if the money is used efficiently (it means to put in the function of the development of the export sector in economy that contributes to higher rate of development of the national economy and in the same time decries the deficit in the trade balance and current account.

4. The foreign direct investments- state and prospective

From the asp ect of the foreign capital, every country gives advantage to the foreign direct investments than debt. That resulting from the double economic use that comes out from FDI. From one

side, FDI is the additional source of capital, but in the same time it does n’t increase the external debt, that is case when it uses foreign credits and loans. Second advantage of FDI comes from their possibility for producing additional effects (externalizes) as:

- Increase the competition and competitiveness of the domestic market, that decrease the profit of the enterprises with the monopolistic position on the market and stimulate domestic enterprises to better quality of the goods and services, etc.;

- Access to new technologies; - Access to better management

techniques; - Better allocation of the

resources and exploitation of the production capacity;

- Revitalization of the current capacities;

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- Growth of the production; - Creating new jobs; - Stimulate export-oriented

capacities, etc. Data from the Table 3 show that

there is permanently gr owth of the FDI, except in 1999. The most significant inflow of FDI was in 2001 as a result of the selling of Macedonian telecommunication. Although FDI have growth in Macedonia, its scope is significant behind the other countries in the region, because of many reasons:

• The scope of the country; • Limited natural resources; • Low national product; • Political unstable; • Inefficient legal system; • Inefficient banking etc. Compare with the credits and loans,

it could be noted that until 2000, the part of the credits and loans was greater than FDI. From the aspect by the purpose of the FDI the conclusion is the same. The great part of this money was used for financing investments in infrastructure activities (electricity, construction and transport). But the part for the support, revitalization and reconstruction of the production, for increase the technical-technological level of the production structure etc., was lower. Such situation (structure) is relevant for the total investments in the economy.

For the notice it is also the fact, that the inflow of the FDI capital in the Macedonian economy in the past period came as a result of privatization process of the government and social capital through Macedonian stock exchange, but in very low scope as a greenfield investments. As a result of such situation it was necessary to undertake relevant measures to dynamic the efforts for attract FDI and to remove the obstacles for enter foreign capital.

As a result of these efforts and in the same time the asp iration for integration in EU, Macedonian government has brought national program

for stimulating investments in Republic of Macedonia in 2003, contented measures and tasks for the greater attracting investments from domestic and foreign sources, too. In the same direction it was the national strategy for integration of Republic of Macedonia in EU that was adopted in 2004. This strategy and program have to strengthen external opportunities and internal strengths of Macedonian economy, from one sid e and to remove (decrease) external treatness and int ernal weaknesses, from other side. It is more stress if we have in mind that FDI on the supranational level decrease, contrary from this general trend was noticed growth from 24 billion $ in 2001 to 29 billion $ in 2002 in Central and Southeast Europe. Parallel with the economic measure for the greater share of FDI it’s necessary to increase the efficiency of the legal system that means to bring all needed laws and their more efficient implementation in the practice.

5. Conclusions

Capital or investments are the factors of the national development. The basic source of the investments presents domestic savings . But, in the condition of the lack of it, the economy is enforced to use additional sources of financing.

Macedonia like a country with the low rate of domestic savings is faced with the need of import of foreign accumulation through debt and flow of FDI. In order not to increase external debt, from one side and to produce positive externalizes on other side, every economy gives advantage to FDI in relate to foreign credits. In the previous period until 2000, the share of the foreign credits and loans was greater than FDI. FDI have noticed permanent increase, but their level is not on the satisfactory level for the needs of the Macedonian economy. In accordance,



it will be necessary to make bigger efforts to make conditions for more attractiveness of economy for SDI as: greater stimulation of the domestic savings and flow of foreign capital (giving advantage to FDI) and to use contemporary financial

instruments, over the cross non satisfactory structure of investment by purpose of investments and technical composition.

Bibliography

1. Publication from the International scientific conference "Foreign capital in the function of the technological development of the Republic of Macedonia", Foundation Fridrih Ebert, Skopje, Republic of Macedonia, 2003

2. Government Program for stimulating investments in Republic of Macedonia, Skopje, 2003

3. Publication “Stopanska Bank”, Stopanska Bank, br.9-10, Skopje, 2003 4. Statistical documentation of State Statistical Office and Central Bank of Republic

of Macedonia 5. UNCTAD, World Investment Report 2001

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DEFINING MANAGEMENT FOR THE TWENTY-FIRST CENTURY

Conf. univ. dr. Sorin George Toma Chair of Commerce, Faculty of Commerce, Academy of Economic Studies , Bucharest

Abstract

Globalization has brought a new economy, an economy based on a Digital Revolution. Due to the enormous progress of the information technology, the business environment of the twenty-first century is changing rapidly. That is why this turbulent environment requires a new management of organizations. The management in the third millennium is, above all, a knowledge management. .

Keywords • Management; • Business environment; • Globalization; • Organization; • Knowledge management.

Rezumat

Globalizarea a condus la aparitia unei noi economii, o economie bazata pe o revolutie digitala. Datorita progresului enorm al tehnologiei informationale, mediul de afaceri al secolului al XXI-lea se schimba rapid. De aceea, acest mediu turbulent necesita un nou management al organizatiilor. Managementul în mileniul al treilea este, înainte de toate, un management al cunoasterii.

Cuvinte cheie

• Management; • Mediu de afaceri; • Globalizare; • Organizatie; • Managementul cunoasterii.

1. The New Business Environment

In the early years of the third millennium, economies of developed nations were struggling and many businesses fell. The twenty-first century promises to be turbulent ...

In the past, the „old economy” was based on the Industrial Revolutions and on managing manufacturing industries. Now, the so-called „new economy” is based on the Digital Revolution and on the management of information. Globalization is the fundamental driver that underpins this new economy.

As Sklair (2002) suggests, there is only one dominant global system structured around, more and more, „the transnational corporations, a transnational capitalist class and the culture-ideology of

consumerism”. It seems that globalization marks:

§ the hegemony of transnational capitalism in general, and the institutional primacy of the transnational corporations, in particular;

§ the internationalisation of finance, production and the free movement of capital and workforce around the world;

§ the increasing volatility of markets.

As a direct function of the growth of competition in an international free-trade system, globalization has changed the old business environment.

By the end of 1980s, many forces have played a major role in reshaping the business environment. According to Burke and Cooper (2003), some of the dramatic



changes affecting organizations throughout the world are:

• the increased global competition; • the impact of information

technology; • the re-engineering of business

processes; • the shift from making a product

to providing a service; • the increasing disappearance of

the job as a fixed collection of tasks. In addition, Kotler (2003)

highlights: • digitalization and connectivity; • disintermediation and

reintermediation; • customization and

customerization; • industry convergence. In short, the organizations acting in

this new business environment are much more exposed to the pressures exerted by the three „C”: change (especially tehnological), conflict and competition. In this turbulent environment, the greatest challenge facing management of organizations is how to build a sustainable development.

2. Management in the Twenty-First Century

Since the advent of computers and the widespread of information technology, the nature of the organization has changed. Drucker (1999), a forerunner in knowledge management, stressed the growing importance of information and explicit knowledge as an organizational resource. The creation and utilization of knowledge become the fundamental engine of wealth of the modern corporation.

In other words, the modern organization is about knowledge. For this reason, possesing knowledge is important, but to be truly useful, knowledge must be

properly used. Knowledge must become intelligence capital within an organization. Knowledge is valuable, but intelligence capital is powerful.

As a result, management in the twenty-first century is, above all, a knowledge management. Knowledge management could be defined as the process of codifying, collecting, and disseminating the organization’s knowledge assets.

Knowledge resources represent a source of competitive advantage for all organizations. According to Gamble and Blackwell (2001) „managing knowledge requires a different perspective to managing land or capital. It is concerned with managing how people reason and how they make their expertise accessible.”

In order to turn knowledge into action, management has to declare its commitment to change based on the kind of learning and innovation that contributes to competitive advantage. Knowledge management is probably 85-90 per cent about people and their ideas. Information technology is just an enabler for the management.

The employees can learn to understand the soft issues around knowledge management and can be taught how to change. They can learn quite quickly, and have to adapt and apply these ideas for themselves.

On the other hand, knowledge management needs to be approached from the perspective of the knowledge consumer. Every employee has to better understand the specific needs of knowledge consumers. In this respect, the organization’s management has to ensure that all employees become more educated.

In the Information Age, organizations have to become faster, more focused, more flexible and smarter. Otherwise, the organization’s ability to compete is reduced dramatically. That is why the long-term success is typically

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based on a combination of learning, innovation and knowledge.

Learning is one of the few competitive advantages available today. A learning organization is an organization that prioritises learning. Also, the learning organization is a creative one.

Knowledge management has never been more important than it is today.

3. Conclusions

Management in the twenty-first century is based on knowledge. People and their ideas are valuable assets for any organization’s management. Knowledge management becomes increasingly a source of competitive advantage.

Bibliography

1. Burke R., Cooper C. L. Leading in Turbulent Times , Blackwell, Oxford, 2003 2. Drucker P. Knowledge worker productivity: the biggest challenge, California

Management Review, Winter, 1999 3. Erickson S. G., Rothberg N. H. From Knowledge to Intelligence. Creating

Competitive Advantage in the Next Economy, Elsevier Butterworth-Heinemann, Oxford, 2005

4. Gamble R. P., Blackwell J. Knowledge Management. A State of the Art Guide, Kogan Page, London, 2001

5. Gosling J., Mintzberg H. The Five Minds of a Manager, Harvard Business Review, November, 2003

6. Housel J. Th., Nelson K. S. Knowledge valuation analysis. Applications for organizational intellectual capital , Journal of Intellectual Capital, vol. 6, no. 4, 2005

7. Kotler Ph. Marketing Management, Prentice Hall, Pearson Education, New Jersey, 2003

8. Nonaka I., Takeuchi H. The knowledge creating company: How Japanese companies create the dynamics of innovation , Oxford University Press, New York, 1995

9. Singh S. The New Knowledge Management Imperative, Supplement to KM World, Nov/Dec, 2005

10. Sklair L. Globalization. Capitalism and its Alternatives , Oxford University Press, New York, 2002

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II. Institutions, Personalities, Events

INSTITUTIONS The Chamber of Commerce and Industry of Romania


Pagina 126

PERSONALITIES Nicolae N. Constantinescu (1920-2000)


Pagina 128

EVENTS 55 Years of Permanent Functioning of the Faculty of Commerce - Breviary

Conf. univ. dr Lupu Nicolae

Pagina 130

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THE CHAMBER OF COMMERCE AND INDUSTRY

OF ROMANIA

Conf. univ. dr. Nistoreanu Puiu Academy of Economic Studies, Bucharest

puiu.nistoreanu@com .ase.ro

The Chamber of Commerce and

Industry of Romania (CCIR) is the strongest business environment association in Romania, bringing together the whole network of 42 territorial chambers of commerce and industry, as well as others bilateral chambers of commerce and professional associations. The mission of the CCIR is the consolidation of the business community in a system based on economic progress, initiative, fair competition and responsibility. In order to support this idea the Chamber of Commerce and Industry of Romania acts in order to:

§ represent and support the interests

of its members in the dialogue with the government;

§ improve the business environment; § promote the economic and

commercial relationships; § support the investing process in

Romania; § help its members in order to

develop successful business; § support the firms in order to adopt

the European norms. The CCIR is an autonomous non-governmental organization which supports the business community’s interests and mainly of its members in the dialogue with the national authorities and

international organizations. The CCIR acts to create a steady coherent business environment favorable to the development of the private sector in Romania, as well as to create a real market economy, sustainable and open towards the exterior.

Here is a brief chronology of the highlights of the CCIR:

1990 - the Romanian Chamber of

Commerce and Industry was founded in accordance with the Decree-Law no. 139/1990 who stipulated CCIR was a non-governmental, public service and autonomous character with legal entity, which fulfilled the duties of chamber of commerce both for Romania and Bucharest; - Law no. 26 regarding the Trade Registry was promulgated - Trade Registry was an institution managed by the CCIR; - CCIR launched its weekly publication, Mesagerul Economic .

1991 - the trade company Romexpo SA

was set up - Romexpo SA is specialized in the organization of fairs and exhibitions and CCIR is a shareholder of this company.

1992 - the Romanian Business School

Foundation was set up.

AE Institutions, Personalities, Events

Nr. 19 ? Februrie 2006 127

1993 - CCIR held the first edition of the National TOP of Companies.

1994 - the CCIR founded together with

other chambers of commerce from the Balkans, the Association of the Balkan Chambers of Commerce.

1996 – CCIR changed its name in The

Chamber of Commerce and Industry of Romania and Bucharest, according to the Generally Assembly decision from 3rd July

1998 - CCIR inaugurated its headquarters

in 2, Octavian Goga Blvd. 2002 - based on the government decision,

the Trade Registry was transferred to the Ministry of Justice.

2005 - the Bucharest Chamber of

Commerce and Industry became legal entity in July and it separated from the Chamber of Commerce and Industry of Romania. The Romanian and foreign

business people who want to do business in Romania, regardless of the domain of activity, can receive assistance in their daily activity from the CCIR; they can also benefit from a wide range of services and facilities. The Chamber contributes to their business development through the organization of economic missions, training programs, seminars or debates, providing valuable information from its databases and detecting business opportunities.

In the context of the Romania’s integration in the European structures, the

National Chamber has begun a campaign of preparing the business environment for adopting of the EU norms by the economic agents.

The CCIR promotes fair

competition, modern management and performances by organizing at the national level a Top of Companies. The companies ranked in this Top have the prospect of new business opportunities, as they are always recommended to the business people who desire reliable business partners.

Collaborating with the Chamber of

Commerce and Industry of Romania, will surely benefit any Romanian or foreign company that desires to develop a business either on domestic or foreign markets, as well as to improve the skills of the staff or to prepare in view of joining the EU.

All business people, facing

different stages in their company development, have reasons to apply for the services and the representation offered by the CCIR. In 2006 the Chamber of Commerce and Industry of Romania reaches 16 years of activity in the benefit of Romanian business community. During this period, the CCIR has worked towards the development of the business environment by offering efficient services to the business people, by representing their interests in relation with the central authorities and with international commercial organizations, as well as by managing the Trade Registry for 12 years.

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NICOLAE N. CONSTANTINESCU (1920-2000)

Economist, titular member of the Romanian Academy (1990)

The academician Nicolae N. Constantinescu, was a prestigious representative of Romanian economic thinking, which participated as a General Secretary, to the process of renewing the Romanian Academy. Between 1990 – 1994 he held the position of chosen General Secretary of the Romanian Academy, and between 1992 – 2000 he held the position of president of the Economic, juridical and sociologic sciences department of the Romanian Academy. In the same time the reputed economist was one of the highly valued and appreciated professors of the Academy of Economic Studies of Bucharest. In this position he contributed to the formation of many generations of economists. As a natural result one of the excellence scholarships awarded to the best students of AES is named “N.N. Constantinescu” and is awarded for constant activity and scientific research. The professor Nicolae N. Constantinescu was also a researcher dedicated to the economic sciences. For the distinguished economist, the economy and technique must walk together, principle which he theorized and militated, although his appeals did not receive the expected audience. Preoccupied by present and future in an equal share N.N. Constantinescu studied with special interest the economic

problems but also the environmental ones, the interferences between the economic and the environment, the impact of the economic on the environment. Another dimension of the work of the famous professor has been the transition and its imperatives. The question the distinguished economist asked: “Towards what kind of economico-social system is the country heading?”, tried to be elucidated in the studies realized on this theme (“Dilemmas of the transition to the market economy in Romania”, “The economic reform useful to whom?”, “The reform and the economic recovery” a.s.o.). What is certain is that from the position that he held the professor N. N. Constantinescu made many appeals to various decision factors, trying to convince that “he wished for the country to become prosperous in a society based on a market economy placed in man’s service” . Linked to this intervention that he made with the occasion of his 85th birthday, the academician Iulian Vacarel exposed at length “The imperatives of transition in professor’s N.N. Constantinescu view” , for whom “the best solution for us is the one involving a mixed market economy, socio-humanistic, with a integral democracy, economic and participative”.


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N.N. Constantinescu was not a political character, but as “a man of science and citizen with a large patriotic sense and civic responsibility, he fought in the trenches of transition for a prosperous economy, for an authentic democracy, for a dignified and secure life for all the inhabitants of the country”. That is why many of his ideas remain as current concern, we speak about those regarding the restoration and recovery of the economy, the increase in efficiency of the production and investment activities; the restructuring of enterprises with state or private capital; fiscal policies, a.s.o. following the idea that “although it is late, something can still be done for our country”.

On the other side N.N. Constantinescu was one of those that have actively participated to the construction and development of the economists’ guild, through his didactic activities, through his studies, through his involvement in decision making activities and associations. Between 1990-1994 he was the prime - vice-president, and from 1993 the president of the General Association of Romanian Economists (AGER). He was one of the initiators of the “House of the Economists” project, which he wished to see to its finish. „The House of the Economists” in his belief was supposed to be an “emblematic construction for the economists’ guild”. In the large works left as a heritage by the professor N. N. Constantinescu the history of economic thinking occupies a special place. We must specify here the critical and historic character and the warm patriotism of the works dedicated to the history of economic thinking. These emphasized two big dimensions: the first one referring to the movement of economic ideas – eventually grouped based on opinions, problems, themes, theories from var ious epochs, stages or

periods of the national and universal economic history, and the second containing 24 representative portraits in the history of Romanian economic thinking (we mention those dedicated to Virgil Madgearu, Victor Slavescu, Mihail Manoilescu, Mitita Constantinescu, Stefan Zeletin, Gh. Zane, Paul Horia Suciu). The series ends with the study dedicated to Angel Rugina, economist and patriot, motivated by the realization „of an economic miracle based on generally stable equilibrium conditions”. Fundamental remains the formulation of the concept of productive collective worker modern and complex, among whom the organizers of modern economic life are also placed, the managers, the economists, the scientists, the scientific researchers. And a real testament message addressed to the Romanian people: “To protect and develop its own collective productive worker, if it wishes to exist and progress”. The academician and professor N.N. Constantinescu, had important contributions as a historian of the national economy: constructor of the discipline of Economic history – in the superior economic learning; the elaboration of many distinct works or ample chapters of economic history; many studies and works; participation in national and international economic history scientific manifestations; creator of economic history student scientific circles; manager, direction factor for the research of the history of research. We consider that through a look back at the life and work of the Magister we have tried to show that his spirit lives on, that his ideas are so actual that we have the duty to develop them, by adapting them in line with the flow of time and the direction our country is heading.

Conf. univ. dr. Nistoreanu Puiu

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55 YEARS OF PERMANENT FUNCTIONING OF THE FACULTY OF COMMERCE – BREVIARY

Cronicar pentru conformitate, conf. univ. dr. Nicolae Lupu Academ y of Economic Studies, Bucharest [email protected]

1951 – În cadrul Institutului de Stiinte Economice si Planificare se constituie, prin trecerea sectiei comerciale de la Facultatea de Planificare si Administrare Economica la Facultatea de Cooperatie. Comertul era un domeniu primordial de studiu înca de la înfiintarea institutului, în 1913, sub numele de Academia de Studii Comerciale si Industriale. În 1947 se înfiintase Facultatea de Stiinte Cooperatiste, dar existenta sa fusese efemera. Facultatea de Comert si Cooperatie pleaca la drum cu sectiile comerciala si cooperatista.

1952 – Se creeaza sectia mer-

ceologie. 1955 – Este adoptata

denumirea de Facultatea de Comert si Merceologie, în acelasi timp renuntându-se la sectia cooperatie.

1956 – La Editura Stiintifica, începe publicarea seriei de 3 volume ale lucrarii Elemente de merceologie, de I. Ionescu-Muscel si B. Cotigaru.

1951 – Within the Faculty of Economic Sciences and Planning, the Faculty of Commerce and Cooperation was founded, by transfer of the commercial department from the Faculty of Planning and Economic Administration to the Faculty of Cooperation. Commerce was a priority subject from the founding of the institute, in 1913, under the name of the Academy of High Commercial and Industrial Studies. In 1947 the Faculty of Cooperative Sciences had already been founded, but it had an ephemeral existence. The Faculty of Commerce and Cooperation was started with the commercial and cooperative sciences departments. 1952 – The department of commodities was created. 1955 – The name of Faculty of Commerce and Commodities is adopted, at the same time the department of cooperative sciences being closed down. 1956 – At the Scientific Publishing House there was initiated the editing of a 3-volume series of the paper Elements of Science OF Commodities, written by


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1957 – Sectiile facultatii sunt

economia comertului socialist, merceologie si comert exterior, ultima provenind din Facultatea de Comert Exterior.

1958 – Este adoptata

denumirea de Facult atea de Comert. 1966 – Se trece la un nou

sistem de organizare a doctoratului, renuntându-se la formula aspiranturii. Catedrele arondate facultatii sunt: economia comertului socialist, economia comertului exterior, merceologie, chimie si fizica, geografie economica, limbi straine. La conducerea catedrei de merceologie este desemnat prof. Dumitru Dima, care, cu o pauza determinata de comasarea catedrelor, va ocupa aceasta pozitie pâna în 1995.

1968 – La Academia de Studii

Economice, denumire adoptata cu un an înainte, este inaugurata cladirea Mihai Eminescu. Aici sunt fixate sediile decanatului si ale catedrelor Facultatii de Comert. Se introduc disciplinele studierea pietei interne si, respectiv, economia si organizarea turismului, embrionul unor specializari de mai târziu.

1971 – Facultatea de Comert

se divizeaza în Facultatea de Comert Interior, cu sectii de comert interior si merceologie, si Facultatea de Comert Exterior. Începe sa fie predata disciplina marketing si se înfiinteaza pentru prima data catedra de marketing; rolul prof. Constantin Florescu va fi unanim recunoscut.

1974 – Facultatea de Comert

revine la denumirea de baza, prin desfiintarea Facultatii de Comert Exterior si revenirea la matca a sectiei aferente. Numarul specializarilor se

I. Ionescu-Muscel and B. Cotigaru. 1957 – The faculty’s departments were: the economy of socialist commerce, the commodities science, and the foreign trade, the last one deriving from the Faculty of Foreign Trade. 1958 – The name of Faculty of Commerce is adopted. 1966 – A new system of organizing the doctoral studies was put into practice, the system of standing – candidature being abolished. The departments belonging to the faculty were: the economy of the socialist commerce, the economy of foreign trade, commodities science, chemistry and physics, economic geography, foreign languages. Professor D. Dima was elected head of the Commodities science department; with an interruption caused by the merging of departments, he held this position till 1995. 1968 - At the Academy of Economic Studies, name adopted one year before, the Mihai Eminescu building was inaugurated. Here there are situated the premises of the Dean’s office and the departments of the Faculty of Commerce. New subjects were introduced: the study of domestic trade and respectively, the economy and organization of tourism, the core of further main subjects. 1971 – The Faculty of Commerce was divided into the Faculty of Domestic Trade, with the departments of domestic trade and commodities science, and the Faculty of Foreign Trade. Marketing started to be taught as a main subject and for the first time the department of marketing was founded; the role of the Professor Constantin Florescu was unanimously recognized. 1974 – The Faculty of Commerce reverts to the initial name by closing down the Faculty of Commerce and returning to the basis of the related department. The number of main

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reduce la doua: comert si relatii economice internationale.

1975 – La Editura Didactica si Pedagogica apar doua lucrari de pionierat: Marketing, sub redactia C. Florescu si, respectiv, Turism si alimentatie publica, de Rodica Baranescu.

1976 – Este constituit

Colectivul de cercetari, analize si expertize merceologice.

1977 – Apare specializarea economia serviciilor de alimentatie publica si turism, iar specializarea relatii economice internationale intra în lichidare. Catedrele facultatii ramân economia comertului si marketing, merceologie, relatii economice internationale si, a patra, limbi straine.

1981 – Decan al facultatii este

desemnat prof. Petre Baetoniu, care dupa ce în perioada 1976-1981 fusese prodecan, va detine aceasta functie pâna în anul 1989.

1988 – Numarul studentilor la zi se reduce la un sfert (609 în 1988-1989, fata de 2.484 în 1978-1979).

1990 – Sunt adoptate

urmatoarele specializari: marketing, merceologie, turism-servicii si relatii economice internationale. Se înfiinteaza catedra de turism-servicii.

1991 – Relatiile economice

internationale redevin facultate distincta. 1992 – Specializarile pentru

obtinerea diplomei de licenta se stabilizeaza în numar de patru: comert, marketing, merceologie si turism-servicii, fiecareia corespunzându-i o catedra-mama. Specializarile de doctorat sunt marketing, economia comertului si serviciilor si, a treia, merceologie. Decan este ales prof. Iacob Catoiu, care va însuma trei mandate, pâna în 2003.

subjects was reduced to two: commerce and international economic relations. 1975 – At the Didactic and Pedagogic Publishing House two pioneering books were published: Marketing under the editorial direction of Constantin Florescu and respectively, Tourism and Hospitality Industry, by Rodica Baranescu. 1976 – The Department of research, analysis and commodities examinations was founded. 1977 – There was initiated the main subject of economy of services of tourism and hospitality industry, and the main subject of international economic relations comes to closing down. The remaining departments of the faculty were the economy of commerce and marketing, commodities science, international economic relations and a fourth one, foreign languages. 1981 – Dean of the faculty was elected professor Petre Baetoniu, who after holding the position of deputy dean between 19 76-1981, held this position till 1989. 1988 – The number of students was reduced to one quarter (609 in 1988-1989, comparative to 2,484 in 1978-1979). 1990 – The following main subjects wer e set up: marketing, commodities science, tourism-services and international economic relations. The department of tourism and services was founded. 1991 – The department of international economic relations was set up again as a distinct faculty. 1992 – The main subjects in order to obtain the degree were set to four: commerce, marketing, commodities science and tourism-services, each one belonging to a “mother-department”. The doctoral main subjects were: marketing, the economy of commerce and services, and a third one, the commodities science. Professor Iacob Catoiu was elected as a


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Volumul Marketing, avându-l coordonator pe prof. C. Florescu si aparut la Editura Marketer, este distins cu Premiul "Virgil Madgearu" al Academiei Române.

1995 – Se introduc studiile

aprofundate, aferente anului V, care vor disparea din oferta educationala în 2004.

1996 – Are loc Sesiunea

stiintific a "25 de ani de învatamânt de marketing în România".

1997 – Este organizat Simpozionul "Învatamânt si cercetare în merceologie si managementul calitatii" si este lansat site-ul Internet al catedrei de merceologie si managementul calitatii.

1998 – Este introdus

învatamântul la distanta, mai întâi la Bucuresti, apoi si în centrele teritoriale Braila, Amara-Ialomita, Tulcea si Câmpia Turzii. Sunt înfiintate cluburile studentesti Marketer Club, care vor edita publicatiile "Marketer" si Pas Întins.

1999 – Catedra de turism-

servicii începe seria participarilor la Târgul National de Turism, la editia din octombrie fiind organizat Simpozionul "Tendinte în pregatirea moderna a specialistului din turism. Avatarurile învatamântului superior turistic". Lucrarea Conducerea resurselor umane, aparuta în coordonarea prof. Radu Emilian, la Editura Expert, va fi distinsa cu Premiul "Virgil Madgearu". Sub egida Colegiului Universitar Economic din Buzau, pendinte de ASE, se naste revista "Amfiteatru Economic", care în 2005 va intra sub patronajul Facultatii de Comert.

2000 – Este introdus primul

program de masterat. Editura Qlassrom, apropiata catedrei de merceologie si managementul calitatii, fondeaza

dean, holding this position for three times successively, until 2003. The volume Marketing with professor C. Florescu as a coordinator and published by the Marketer Publishing House was awarded the “Virgil Madgearu” prize of the Romanian Academy. 1995 – The master’s degree courses were introduced, related to the 5th year, which were eliminated from the educational offer in 2004. 1996 – The Scientific session “25 Years of Higher Education in Marketing in Romania” was organized. 1997 – The Symposium “Higher Education and Research in Commodities Science and the Management of Quality” was organized and there was launched the web site of the department of commodities science and management of quality. 1998 – The distance courses were introduced first in Bucharest, then in the territorial centers Braila, Amara, Ialomita, Tulcea and Câmpia Turzii. The students Marketer Clubs are formed, publishing “Marketer” and Pas Întins magazines under two directions of study: commerce and tourism-services.

1999 – The department of tourism-services begins to participate at the National Tourism Fair, organizing at the October edition the symposium “Tendencies in the modern preparation of the tourism specialist. The avatars of the touristic superior education”. The paper Leading human resources coordinated by professor Radu Emilian, at the Expert Publishing House, will receive the “Virgil Madgearu” Award. Under the mark of the University Economic College from Buzau, which belongs to ASE, the Amfiteatru Economic magazine is born, which in 2005 will enter under the patronage of the Faculty of Trade.

2000 – The first master program is introduced. The Glassrom Publishing House, close to the science of commodities and quality management

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colectia de carte de specialitate intitulata Merx.

2001 – Centrul de Cercetari si Expertize Marfuri Alimentare al catedrei de merceologie si managementul calitatii este acreditat CNCSIS.

Din initiativa si în coordonarea catedrei de marketing se lanseaza colectia de carte de specialitate a Editurii Uranus, intitulata Biblioteca de marketing. Este sarbatorita împlinirea a 50 de ani de functionare neîntrerupta a Facultatii de Comert, cu aceasta ocazie fiindu-i atribuita Diploma de excelenta a AROMAR. Este organizata Conferinta internationala consacrata împlinirii a "30 de ani de marketing în România".

2002 – Specializarile facultatii

se restrâng la trei: economia comertului, turismului si serviciilor, marketing si, respectiv, merceologie. Noua specializare, economia comertului, turismului si serviciilor, ramâne organizata pe doua directii de studiu: comert si turism-servicii. Numarul total al studentilor facultatii, zi si la distanta, inclusiv centre teritoriale, atinge nivelul record de 4.519.

2003 – Specializarea

marketing se desprinde din structura Facultatii de Comert si se înfiinteaza Facultatea de Marketing. În coordonarea catedrei de turism-servicii, Editura Uranus creeaza colectia de carte Biblioteca Turism-Servicii. Facultatea de Comert este certificata ISO 9001: 2000.

2004 – În cadrul Editurii ASE

apare colectia de carte a Facultatii de Comert, denumita Mercur. Pe lânga catedra de comert este înfiintat Centrul de Cercetari Comerciale si este organizata prima editie a Conferintei internationale "Comert si competiti-vitate".

departments, founds the specialty book collection named Merx.

2001 – The Alimentary Goods Research and Expertise Centre of the science of commodities and quality management department is accredited CNCSIS. From the initiative and under the coordination of the marketing department, the specialty book collection of the Uranus Publishing House, called the Marketing Library is launched. The fulfillment of 50 years of continuous functioning of the Faculty of Trade is celebrated, with this occasion the faculty receiving the Excellency Diploma of AROMAR. The International Conference dedicated to the fulfillment of 30 years of marketing in Romania is organized.

2002 – The faculty’s specializations are reduced to 3: trade, tourism and services economy, marketing and science of commodities. The new specialization, trade, tourism and services economy remains organized on two study directions: trade and tourism-services. The total number of the faculty’s students, taking both daily classes and learning at distance, including territorial centers, reaches the record level of 4519. 2003 – The marketing main subject becomes from the distinct from the structure of the Faculty of Commerce and the Faculty of Marketing was founded. Under the coordination of the Department of tourism and services, the Uranus Publishing House created the Tourism-Services Book library. The Faculty of Commerce is certified ISO 9001:2000. 2004 – The Mercur book collection of the Faculty of Commerce appears within the Academy of Economic Studies Publishing House. The Center of Commercial Research is founded, affiliated to the department of commerce and the first edition of the “Commerce and Competitiveness” International Conference was organized.


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2005 – Este adoptata noua structura a studiil or superioare, cu ciclul de licenta de trei ani si cu o specializare unica la nivelul Facultatii de Comert, intitulata administrarea afacerilor (în comert, turism si servicii, merceologie si managementul calitatii). Noul sistem de organizare a studiilor de doctorat prevede pregatirea în cadrul Scolii doctorale.

2005 – A new structure of higher education was adopted, with a degree of duration of three years and with one subject at the Faculty of Commerce level under the title of Business Administration (in commerce, tourism and services, commodities science and management of quality). The new system of organizing the doctoral studies provides courses within the Doctoral School.

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IV. Amfiteatru Economic recommends

GOOD PRACTICES Food Quality and Safety: Practices and Contributions Brought by the Centre of Research and Alimentary Product Expertise

Prof. univ. dr.Pamfilie Rodica Lector univ. dr. Paunescu Carmen

Pagina 137

BOOKS AND PUBLICATIONS An Exceptional Book

Prof. univ. dr. Nora Tomosoiu

Pericle Uidumac

Pagina 141 Economy Informatics

Lector univ. dr. Stoica Marian

Pagina 143

WEB-SITES The National Authority for Consumer Protection

Pagina 144

Health & Consumer Protection Directorate -General

Pagina 145

AE Amfiteatru Economic recommends

Nr. 19 ? Februrie 2006 137

GOOD PRACTICES

FOOD QUALITY AND SAFETY: PRACTICES AND CONTRIBUTIONS BROUGHT BY THE CENTRE OF RESEARCH

AND ALIMENTARY PRODUCT EXPERTISE

Abstract

The Romanian School of the

Science of Commodities is bringing its contribution t o the present activity concerning the transition from the classical approach of the commodity research to the promotion of modern conceptions, which also include the quality assurance, taking into account all the commodities implications, on their whole value chain.

The Centre for Research and Alimentary Product Expertise – ASE Bucharest, academic structure with a practical vocation, accredited C.N.C.S.I.S in 2001, represents the continuation of the tradition in a modern tackling of the researches, in order to provide specialized assistance to firms and agencies.

The scientific research activity is organized and developed through different financed or non-financed projects and themes within national or local programs.

Rezumat Scoala româneasca de educatie si

cercetare în Stiinta marfurilor îsi aduce contributia la demersurile actuale privind trecerea de la abordarea clasica a cercetarii marfurilor, la promovarea unor conceptii moderne care includ si asigurarea calitatii, cu luarea în considerare a tuturor implicatiilor marfurilor, pe întreaga lor traiectorie.

Structura academica cu vocatie practica, Centrul de Cercetari si Expertize Marfuri Alimentare – ASE Bucuresti, acreditat institutional si de catre C.N.C.S.I.S (în anul 2001 ), reprezinta continuarea traditiei printr-o abordare moderna a cercetarilor spre a veni în întâmpinarea unor agenti economici si organizatii interesate. Obiectivul Centrului vizeaza cercetarea complexa a calitatii si expertizarea merceologica a marfurilor alimentare, în raport cu reglementarile internationale si nationale. Activitatea de cercetare stiintifica se organizeaza si se desfasoara prin proiecte si teme finantate sau nefinantate cuprinse în programe nationale sau ale catedrei.

1. Tradition and Value in Commodity Quality Research

The Science of Commodities, essentially provides, not only knowledge about commodities, but also establishes and settles complex relations between the human beings’ world, with their countless needs, and the commodities world, in a comprehensive manner, having in view to bring these relations under the sign of rationality. The Romanian School of the Science of Commodities is bringing its contribution to the present activity concerning

Lector univ. dr. Carmen Paunescu Academy of Economic Studies, Bucharest

[email protected]

Prof. univ. dr. Rodica Pamfilie, Academy of Economic Studies, Bucharest

[email protected]

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the transition from the classical approach of the commodity research to the promotion of modern conceptions, which also include the quality assurance, taking into account all the commodities implications, on their whole trajectory. This approach corresponds to the present exigency regarding the economist’s training specialized in commerce, which can be considered a virtual commercial engineer, whose professional mobility allows him to integrate himself with a great success into many kinds of activities, corresponding to this field.

In 2000, within

Academy of Economic Studies in Bucharest, a research unit was established under the authority of the Science of Commodities and Quality Management Department, named Centre of Research and Alimentary Product Expertise, and managed by prof. dr. Rodica Pamfilie. The Centre of Research and Alimentary Product Expertise, academic structure with practical vocation, accredited in 2001 by CNCSIS, represents the

continuation of the tradition in a modern tackling of the researches, in order to provide specialized assistance to firms and agencies. The scientific research activity is developed through different financed or non-financed projects and themes within national or local programs , such as “Horizon 2000 Program”, “Quality and Standardization Program – CALIST”, “CERES Program”, or “Research and Excellence Program – CEEX”.

Within this framework, the teaching staff of the department, in collaboration with researchers, trainers for a doctor’s degree, specialists in economic practice and students, developed many research themes, programs, most of these on the basis of a contract, which offered efficacious keys, with an immediate practical applicability. Thus, earned resources contributed to the permanent improvement of the Science of Commodities and Quality Management courses and to the financing of the activities of the Academy of Economic Studies.

The teaching and research staff of the department has been develop ing an ample theoretical and application research activity, having a great acknowledgement and appreciation at local and national level, but also in other countries for their original contributions regarding issues as the following:

• Relation between the value of utilization and quality; • Concept, methodology and utilization of the system of goods guaranty; • Concept and methodology of establishing the nutritive value of the foods; • Superior and efficient utilization of industrial sub-products, residues and industrial

waste; • Environmental implications of product manufacture and marketing; • Products sanogenesis, etc.

Results of some researches have been materialized in over 15 patents.


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2. Some Results and Perspectives of the Centre of Research and Alimentary Product Expertise

An important target of the scientific research of the Centre of Research and Alimentary Product Expertise was the elaboration of complex themes ordered by government bodies, economic agents, research institutes, most of these being obtained mostly on the basis of the contracts. We provide here some research topics we have been exp lor ing starting with 2001:

• Studies regarding the prevention of the goods batches anomalies in the logistic value chain;

• Complex research of quality and commodity science expertise of food products, on the basis of national and international settlements;

• Punctual commodity science research of the raw materials and processed home and import-export food regarding:

- determination of the quality food anomalies appeared in the logistic chain of their physical distribution; - designing of the validity term, preservation, transport and sale conditions of the food; - punctual definition, designing and assessment of the nutritive value of the food; - motivation of the food framing on quality classes corresponding to economic market and “metabolic market”.

• Comm odity science extra-juridical expertise of food quality inside their technical-economic circuit, in conformity with the basis principles of the deontology code in the international trade with food and quality management;

• Comparative qualitative studies and feasibility studies of food from different sources;

• Analytical studies and projects regarding assortment structure policy at a firm level; • Studies regarding possibilities of recovering and recycling of packages and packing

materials. Some selective research

projects conducted and completed with the specific support and resources provided by the Centre of Research and Alimentary Products Expertise are mentioned below: • Researches concerning the

design, production and testing of nutritional supplements based on natural ingredients for specific use of performing sportsmen, CERES Program, 2003-2005;

• Typology and monitoring of the alimentary products anomalies during the commercialization process, under the European market exigencies, CNCSIS Project, 2003-2005.

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• Quality requirements and qualitative level of some alimentary products drawn from the commercial

• units by the Romanian Association of Consumers’ Protection, 2002 Presently, students, graduates, and Ph.D. students become more and more involved

in the research activities of the Centre. The titles of some doctorate thesis in the field of Science of Commodities, presented in the last years, and completed with the specific support and resources provided by the Centre for Research and Alimentary Products Expertise are the following:

• Comparative Study of International Recommendation and Legislation on the Prevention and Measures of Anomalies Affecting Foodstuffs;

• The Impact of Nutritional and Food Policy Upon International Trade of Foodstuff; • Commodity Science Approaches in the Nutritional Design of Foods; • Quality Concept Area Evolutions and Reductions and Their Impact on

Commodities; • The Evolution and Development of the Consumer Protection Concept and Practice

and its Implications on the Science of Commodit ies; • Changes in the Structure of the Assortment of Goods Offered Through Rural

Trade in the Market Economy; • Tendencies and Strategies on European Level Regarding the Modernization of the

Food Products Supply; • Concepts and Tendencies Regarding the Quality Assurance of the Food Products

in International Trade; • Quality and Wines Hygiene Problems in International Trade; • The Impact of Products Standardization and Certification upon Consumers’

Protection.

The Center also provides professional assistance and consultancy in food

quality management concerning: • operational and strategic elements of quality assurance and control; • designing and modulation of the assortment structure at a firm level; • increasing efficiency of packing and labeling in impact with consumers and

environment protection; • managerial issues regarding food certification.


Nr. 19 ? Februrie 2006 141

BOOKS AND PUBLICATIONS

AN EXCEPTIONAL BOOK Bogdan Padure is a graduate of The Academy of Economic Studies in Bucharest, a

doctor in economy and a well-known economy commentator. The author started his activity as a journalist at the review “Viata economica” (Economic Life). Afterwards, he belonged to the editing team who published the new series of “Revista economica” (Economic Review). Bogdan Padure was the first president and manager of the Commercial Company “Tribuna Economica“. At the same time, in his capacity of an editor-in-chief, he brought direct contributions to the rising prestige of the review “Tribuna Economica“ – the most important review of the Romanian economic press – and also to the launching of 10 new economic reviews. He has also contributed to the development of the publishing of economic books. As a publisher, he wrote and published a number of about 300 specialized works. Among them, there are books, research articles and studies, debates, editorial investigations and essays.

He also wrote articles containing commentaries and enterprise analyses, investigations and case-studies, correspondence and accounts including serials on specific subjects, documentaries and syntheses, interviews. All along his professional activity, Bogdan Padure led delegations of journalists abroad, he participated in international conferences and congresses in Bucharest, Paris, New York, New Delhi, Lisbon, Sao Paolo, Sidney, Singapore, Venice, Nairobi, Beijing, Buenos Aires, Abu-Dhabi, Hamburg, Moscow, Prague, Madrid, Warsaw, Sofia, London. At present, he is the president of The Press and Publishing Group “Tribuna Economica”. His work, “The Economists”, with the subtitle “a professional guide” was published by “Tribuna Economica” at the end of the year 2005 in one of the most highly regarded collections of this publishing house: “ideas – practical solutions – information”. We should mention the fact that this book, the author’s latest, is the continuation of a series which started in 1993 with “The Book of Economists”, which aimed at making an analysis in the field at the beginning of the nineties. The series continued with “Practical Guide for Economists” – a book illustrating the preoccupations and typical problems of this social category in the middle of the last decade. Practically, the statistical data and the opinion investigations included in the two books cover an important period of time in which the economists’ guild was being monitored.

The experience and thoroughness of the author made him want to extend the scope of the analysis of the evolutions recorded in practice in the world of these specialists. Therefore, a natural outcome was “The World of Economists”, a book awarded the prize of

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the year 2000, offered by the General Association of Economists in Romania for “the most highly documented book about economists”.

“The Economists” – the work we are just focusing on – aims at an even more ambitious goal: that of practically gathering all the available data from the information and documentation sources existing in the country which refer to this important category of specialists. Thus, the author succeeds in presenting the statistical situation of the economists covering the last half century (1956-2004). However, the actual analysis of the evolutions recorded focused on the identification of the transformations which occurred during the period of transition to the market economy. The author of this ambitious historical-economic research expresses his regret that his investigations stopped at the year 1956, as there are no available data before that period. Except for that, “The Economists” is “a real complex and topical guide, a guide to the orientation in the not sufficiently explored universe of the existence, outlook, responsibility and action of the economists in the Romanian economy”. [Along his whole career of a journalist and researcher in the economic field, Bogdan Padure has struggled for the recognition of the essential role, of the very important status the economist should be granted. He has made a permanent campaign for the assertion of these specialists, for recognizing their rights and responsibilities, thus trying to contribute to the consolidation of the authority of the profession of an economist. However, the activity of the author of the present book and of the whole series, has been carried on in a scientific, civilized manner, without fueling any disputes with other professions (engineers, lawyers etc.). Bogdan Padure thinks it is essential “to give everybody what they deserve according to their competence and to the role they must be assigned within modern, competitive companies, be they state or privately owned. To come back to the essence of the work “The Economists”, we should also mention the fact that the statistical analysis made by the author informs about the significance of some original structures and correlations. The subject of his research includes a series of characteristic aspects – present and future – for the activity of the personal with a higher education economic degree in the companies of the Romanian economy. It is in this aspect – and not only – that the originality of this work resides. Advice to the (possible) reader: Economist! Whether you are young or old, if you want to know the coordinates of your job, it is recommendable that you read this book. If you want to make of your job a profession of faith, it is recommendable that you re-read it and if you want to become a real prof essional, it is recommendable that you read it from time to time. As for the author, we can only tell you (paraphrasing a famous quotation which is also the title of a column of the Trade Review): “Useful book, honoured be he who wrote you”.

Prof. univ. dr. Nora Tomosoiu Editor coordinator al Revistei de Comert Pericle Uidumac


Nr. 19 ? Februrie 2006 143

ECONOMY INFORMATICS

The Informatica Economica (Economy Informatics) magazine has been published since 1997, in Bucuresti, in Romanian. Since 2002 abstracts are written in English. There are 4 issues every year (every trimester) and since 2001 there is also an annual English language issue. The magazine totals about 650 pages every year, with 720 pages in 2004.

The magazine is published by INFOREC Association, through its own publis hing

house. The redaction is located within the Academy of Economic Studies, The Department of Economy Informatics. Since 2001 there are sub-redactions within major superior education institutions of Romania: West University of Timisoara, Babes -Bolyai University of Cluj-Napoca, University of Craiova, Alexandru Ioan Cuza University of Iasi, Dunarea de Jos University of Galati, Lucian Blaga University of Sibiu and Academy of Economic Studies of Moldova (ASEM Chisinau).

The topics discussed in the

magazine cover: digital economy, artificial intelligence and expert systems, computer networks, data bases, informational systems, software engineering, informational society statistics, ITC for business, algorithms and technologies, economic process modeling, decision support systems, software security, simulations and mathematical models, book reviews, software quality, architectures and web services, economic modeling, modern methods for education, information management, socio-economic process modeling, informatics applied in economy, market studies, document management, scientific workshops, project management, computer assisted education etc.

Through its years the magazine hosted over 60 papers from foreign authors: Ireland, Greece, India, USA, Germany, Belgium, France, Italy, Hungary, Finland, Japan etc.

The magazine has a CNCSIS accreditation since 2001 and since 2005 has a B

class accreditation as a national magazine. The magazine internet address is www.revistaIE.ase.ro .

Lector univ. dr. S toica Marian

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WEB-SITES

THE NATIONAL AUTHORITY FOR CONSUMER PROTECTION (www.anpc.ro )

The National Authority for Consumer Protection coordinates and realizes the

strategy and policy of the Romanian Government with regard to the enforcement of Consumer Protection in the country, preventing and fighting against the practices which prejudice consumers’ life, health, safety or economical interests and estimates the efficiency of the market surveillance system for products and services provided.

The National Authority for Consumer Protection ensures the harmonization of the national legal framework with European Union consumer protection legislation, develops information and education activities to inform citizens of their rights and consumers.

The website is structured on the following sections: � ANPC Strategy;

� Activity; � Contact Points; � Who Is Who; � The Inter -Ministerial Committee; � Larex; � Press Releases; � Current News; � Newsletter; � Publications; � Surveys; � Campaigns; � Advice for Economic Agents; � Consumer Protection; � Legislation.


Nr. 19 ? Februrie 2006 145

HEALTH & CONSUMER PROTECTION DIRECTORATE -GENERAL

(http://europa.eu.int/comm/dgs/health_consumer/index_en.htm)

The Health and Consumer Protection Directorate-General is formed of European Union officials dedicated to making Europe’s citizens healthier, safer and more confident. It is formed of a diverse group of people, doctors, nutritionists, lawyers, economists, scientists and many others, coming from all across Europe.

The mission of the Directorate-General is to ensure food and consumer goods sold in the European Union are safe and that Europe helps protect and improve its citizens’ health.

In order to succeed in their mission they work with other European Union institutions, national governments and agencies, consumer organizations, health interest groups, business groups, scientists, researchers and experts.

Building on solid foundations, three main strategic priorities appear to be central for the new Commission: • Better health and health outcomes - particular emphasis should be given to prevention, as well as to protecting Europe’s youth from such threats; • Empower consumers to feel more confident in the enlarged single market by strengthening consumer networks, raising awareness and rigorous oversight of transposition, and enforcement of existing legislation and prosecution of infringements; • Maintain high levels of food safety at manageable cost, by ensuring effective implementation of the legislation within the EU and help raise health and food standards and practices in

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