KAUNAS UNIVERSITY OF TECHNOLOGY Faculty of Economics …
178
Transcript of KAUNAS UNIVERSITY OF TECHNOLOGY Faculty of Economics …
KAUNAS UNIVERSITY OF TECHNOLOGY Faculty of Economics and Management
LITHUANIAN OPERATIONAL RESEARCH SOCIETY WITHIN EURO (LITORS)
RIGA TECHNICAL UNIVERSITY
Faculty of Engineering Economics
BRNO UNIVERSITY OF TECHNOLOGY Faculty of Business and Management
TALLINN UNIVERSITY OF TECHNOLOGY
Tallinn School of Economics and Business Administration
COLLECTED ABSTRACTS
ISSN 2335-8025
2013
PROGRAM COMMITTEE
Chair - prof. dr. G. Startienė, Kaunas University of Technology (Lithuania)
Vice-chairs:
Prof. habil. dr. R. Počs, Riga Technical University (Latvia)
Assoc. prof. dr. S. Škapa, Brno University of Technology (Czech Republic)
Prof. habil. dr. E. K. Zavadskas, Lihuanian Operational Research Society (LITORS, Lithuania)
Prof. dr. Ü. Ehrlich, Tallinn University of Technology (Estonia)
Members:
Assoc. prof. dr. A. Auzina, Riga Technical University (Latvia)
Prof. dr. J. Banytė, Kaunas University of Technology (Lithuania)
Prof. dr. D. Baran, University Central Europe in Skalica (Slovakia)
Prof. dr. E. Gaile-Sarkane Riga Technical University (Latvia)
Prof. dr. T. Haldma, Tartu University (Estonia)
Prof. dr. A. Kocmanova, Brno University of Technology (Czech Republic)
Prof. dr. R. Krušinskas, Kaunas University of Technology (Lithuania)
Prof. dr. C. Lace, Riga Technical University (Latvia)
Prof. dr. C. Lange, Politechnics University of California (USA)
Prof. habil. dr. A. Lapinskas, Peterburg State Transport University (Russia)
Prof. habil. dr. H. Loštakova, Pardubice University (Czech Republic))
Prof. dr. B. Neverauskas, Kaunas University of Technology (Lithuania)
Assoc. prof. dr. T. Põlajeva, Tallinn University of Technology (Estonia)
Prof. dr. H. J. Richter, Rostok University (Germany)
Prof. dr. A. Savanevičienė, Kaunas University of Technology (Lithuania)
Prof. habil. dr. Ž. Simanavičienė, Kaunas University of Technology (Lithuania)
Prof. dr. B. J. Shuller, Skovde University (Sweden)
Prof. dr. V. Snieška, Kaunas University of Technology (Lithuania)
Prof. dr. M. Šenfelde, Riga Technical University (Latvia)
Assoc. prof. dr. I. Šimberova, Brno University of Technology (Czech Republic)
Prof. dr. L. Valančienė, Kaunas University of Technology (Lithuania)
Prof. dr. U. Venesaar, Tallinn University of Technology (Estonia)
ORGANIZING COMMITTEE
Chair – prof. habil. dr. P. Baršauskas, Rector of Kaunas University of Technology (Lithuania)
Vice-chair – prof. dr. E. Gimžauskienė, Vice-Dean of Faculty of Economics and Management,
Kaunas University of Technology
Members:
Assoc. prof. dr. K. Duoba, Vice-Dean of Faculty of Economics and Management,
Kaunas University of Technology
Assoc. prof. dr. A. Taraškevičius, Vice-Dean of Faculty of Economics and Management,
Kaunas University of Technology
Dr. L. Girdauskienė, Kaunas University of Technology (Lithuania)
K. Malciuvienė, Kaunas University of Technology (Lithuania)
R. Pauraitė, Kaunas University of Technology, (Lithuania)
L. Sinkevičiūtė, Kaunas University of Technology (Lithuania)
G. Vilkevičienė, Kaunas University of Technology (Lithuania)
KAUNAS UNIVERSITY OF TECHNOLOGY Faculty of Economics and Management
LITHUANIAN OPERATIONAL RESEARCH SOCIETY WITHIN EURO (LITORS)
RIGA TECHNICAL UNIVERSITY Faculty of Engineering Economics
BRNO UNIVERSITY OF TECHNOLOGY Faculty of Business and Management
TALLINN UNIVERSITY OF TECHNOLOGY Tallinn School of Economics and Business Administration
COLLECTED ABSTRACTS OF INTERNATIONAL SCIENTIFIC CONFERENCE
2013
PROGRAM COMMITTEE
Chair - prof. dr. G. Startienė, Kaunas University of Technology (Lithuania)
Vice-chairs:
Prof. habil. dr. R. Počs, Riga Technical University (Latvia)
Assoc. prof. dr. S. Škapa, Brno University of Technology (Czech Republic)
Prof. habil. dr. E. K. Zavadskas, Lihuanian Operational Research Society (LITORS, Lithuania)
Prof. dr. Ü. Ehrlich, Tallinn University of Technology (Estonia)
Members:
Assoc. prof. dr. A. Auzina, Riga Technical University (Latvia)
Prof. dr. J. Banytė, Kaunas University of Technology (Lithuania)
Prof. dr. D. Baran, University Central Europe in Skalica (Slovakia)
Prof. dr. E. Gaile-Sarkane Riga Technical University (Latvia)
Prof. dr. T. Haldma, Tartu University (Estonia)
Prof. dr. A. Kocmanova, Brno University of Technology (Czech Republic)
Prof. dr. R. Krušinskas, Kaunas University of Technology (Lithuania)
Prof. dr. C. Lace, Riga Technical University (Latvia)
Prof. dr. C. Lange, Politechnics University of California (USA)
Prof. habil. dr. A. Lapinskas, Peterburg State Transport University (Russia)
Prof. habil. dr. H. Loštakova, Pardubice University (Czech Republic))
Prof. dr. B. Neverauskas, Kaunas University of Technology (Lithuania)
Assoc. prof. dr. T. Põlajeva, Tallinn University of Technology (Estonia)
Prof. dr. H. J. Richter, Rostok University (Germany)
Prof. dr. A. Savanevičienė, Kaunas University of Technology (Lithuania)
Prof. habil. dr. Ž. Simanavičienė, Kaunas University of Technology (Lithuania)
Prof. dr. B. J. Shuller, Skovde University (Sweden)
Prof. dr. V. Snieška, Kaunas University of Technology (Lithuania)
Prof. dr. M. Šenfelde, Riga Technical University (Latvia)
Assoc. prof. dr. I. Šimberova, Brno University of Technology (Czech Republic)
Prof. dr. L. Valančienė, Kaunas University of Technology (Lithuania)
Prof. dr. U. Venesaar, Tallinn University of Technology (Estonia)
ORGANIZING COMMITTEE
Chair – prof. habil. dr. P. Baršauskas, Rector of Kaunas University of Technology (Lithuania)
Vice-chair – prof. dr. E. Gimžauskienė, Vice-Dean of Faculty of Economics and Management,
Kaunas University of Technology
Members:
Assoc. prof. dr. K. Duoba, Vice-Dean of Faculty of Economics and Management,
Kaunas University of Technology
Assoc. prof. dr. A. Taraškevičius, Vice-Dean of Faculty of Economics and Management,
Kaunas University of Technology
Dr. L. Girdauskienė, Kaunas University of Technology (Lithuania)
K. Malciuvienė, Kaunas University of Technology (Lithuania)
R. Pauraitė, Kaunas University of Technology, (Lithuania)
L. Sinkevičiūtė, Kaunas University of Technology (Lithuania)
G. Vilkevičienė, Kaunas University of Technology (Lithuania)
3
CONTENT
ACCOUNTING CHALLENGES IN THE CONTEXT OF ECONOMICS CHANGES …………………………………………………………………...…
12
Ingrida Balabonienė, Lina Dagilienė, Violeta Mykolaitienė, Giedrė Večerskienė. ACCOUNTING PECULIARITIES OF THE STATE-OWNED LAND IN LITHUANIA .….
13
Lina Dagilienė, Violeta Mykolaitienė. SOCIAL INFORMATION DISCLOSURE BY PUBLIC SECTOR: A CASE STUDY IN LITHUANIA …………………………………..….
14
Rasa Dainienė, Lina Dagilienė. COMPANY GOING CONCERN EVALUATION FUZZY MODEL …………………………………………………………………………………...…...
14
Lukas Giriūnas. STATE’S ASSETS CONCEPTION AND ITS VALUATION ….………... 15 Gintarė Giriūnienė, Lukas Giriūnas. VALUATION OF GIFT TAXATION IN LITHUANIA …………………………………………………….…………………………….
16
Gintarė Giriūnienė, Edita Gimžauskienė. A FRAMEWORK FOR TAX SYSTEM EVALUATION WITHIN THE CONTEXT OF ENTREPRENEURSHIP .…………………..
17
Rūta Gokienė. ASSESSMENT OF TANGIBLE MOVABLE ASSET OPERATION COST AND ECONOMICAL AGE DEPENDENCE ……………………………….………………..
18
Nazi Gvaramia. QUESTIONS OF ACCOUNTING AND AUDIT REGULATIONS IN GEORGIA ……………………………….…………………………………………………….
19
Gediminas Jagelavičius. GROSS MARGIN MANAGEMENT FRAMEWORK FOR MERCHANDISING DECISIONS IN COMPANIES WITH LARGE ASSORTMENT OF PRODUCTS …………………………………………………………………………………..
20 Sima Jegelavičiūtė, Loreta Valančienė. VALUATION OF CROWDFUNDING: BENEFITS AND DRAWBACKS …………………………….………………………………
21
Rūta Klimaitienė, Kristina Rudžionienė, Andželika Vorbliugevičiūtė. THE PRACTICE AND THE EFFECTIVENESS OF ACTIVITY-BASED COSTING IN SMALL LITHUANIAN COMPANIES ………………………………….……………………………..
22 Lina Klovienė. IMPROVEMENT OF PERFORMANCE MEASUREMENT SYSTEM ACCORDING TO BUSINESS ENVIRONMENT ……………….…….……………………..
22
Rūta Kmieliauskaitė, Loreta Valančienė. PERFORMANCE MEASUREMENT MODEL FORMATION IN MUNICIPALITIES ………………………………….…………………….
23
Šviesa Leitonienė, Alfreda Šapkauskienė. THE BASIC SOCIAL ACCOUNTING RESEARCH DIRECTIONS ………………………………….……………………………….
24
Agnė Ramanauskaitė, Kristina Rudžionienė. TRENDS OF THE DISCLOSURE OF INFORMATION ON INTELLECTUAL CAPITAL IN FINANCIAL STATEMENTS IN LITHUANIAN ENTERPRISES ………………………………………….…………………...
25 Ruta Sneidere, Inga Būmane, Jelena Lascenko. ACCOUNTING OUTSOURCING SERVICES IN LATVIA: PROBLEMS AND POSSIBLE SOLUTIONS ….………………...
26
Lina Užienė. CITY’S INTELLECTUAL CAPITAL FRAMEWORK: THE PERFORMANCE MEASUREMENT POINT OF VIEW …………………..………………...
26
Viktorija Varaniūtė, Edita Gimžauskienė. THE CONCEPT OF THE VALUE IN THE VALUE MEASURING SYSTEMS ………………………………………………………..….
28
4
CHALLENGES AND OPPORTUNITIES OF FINANCIAL ECONOMICS ………………………………………………………………….
29
Saulius Adamauskas, Rytis Krušinskas. SCIENCE AND TECHNOLOGY BASED COMPANY, ITS FEATURES AND RELATIONS WITH ENVIRONMENT ……….……...
30
Dagmar Camska. EFFICIENCY MEASURES OF CULTURE ORGANIZATIONS …….... 31 Jana Erina, Ingars Erins. EFFICIENCY OF THE LATVIAN COMMERCIAL BANKING SYSTEM: A DEA MODEL EVALUATION……………………………………………….....
31
Paweł Galiński. THE ACCURACY OF THE BUDGET FORECASTING IN LOCAL GOVERNMENTS IN POLAND ……………………………………………………………...
32
Sofya Glavina. EUROPEAN IPO MARKET. WHY REGIONAL STOCK EXCHANGES DO STILL EXIST ………………………………………………………………………….….
33
Linas Jasiukevičius, Asta Vasiliauskaitė. THE RELATION BETWEEN ECONOMIC GROWTH AND PUBLIC-PRIVATE PARTNERSHIP MARKET’S DEVELOPMENT IN THE COUNTRIES OF THE EUROPEAN UNION ………………………………..…………
34 Marcin Kalinowski. DEPOSITARY RECEIPT MARKET DEVELOPMENT AS A SIGN OF WORLD FINANCIAL MARKETS GLOBALIZATION ………………………….……..
34
Mark Kantšukov, Anna Laidoner. TRADE CREDIT MANAGEMENT PRACTICES IN ESTONIAN TIMBER INDUSTRY COMPANIES ……………………………….………….
35
Violeta Naraškevičiūtė, Dovydas Strumyla, Mantas Juodelis. THE RESEARCH OF POSSIBILITIES TO INTEGRATE OCCUPATIONAL PENSION FUNDS IN LITHUANIA ..............................................................................................................................
36 Ginta Railienė. CORPORATE PERFORMANCE IN ECONOMIC DOWNTURN: THE CASE OF LITHUANIAN ENTERPRISES ………………………………………………..….
36
Hana Scholleova. EVALUATION OF THE EFFECTIVENESS OF ENTERPRISE INNOVATION SUPPORT FROM EU FUNDS IN CZECH REPUBLIC ………………..…..
37
Biruta Sloka, Arnis Lagzdins. COMPLIANCE STRUCTURE IN LATVIAN BANKING SECTOR .....................................................................................................................................
38
Andrzej Sołoma. IMPORTANCE OF THE DEPTH OF THE CAPITAL MARKET ON INTERNATIONAL VENTURE CAPITAL AND PRIVATE EQUITY ALLOCATION DECISIONS: THE CASE OF POLAND ………………………………………………..…….
39 Jurgita Stankevičienė, Aušrinė Lakštutienė, Rytis Krušinskas. ANALYSIS OF THE IMPACT OF FINANCIAL ENGINEERING TOOLS ON SMALL AND MEDIUM-SIZED BUSINESS IN LITHUANIA ………………………………………………………….………
40 Evaldas Stankevičius. EUROPEAN PROPERTY TAXATION: NEW SOURCES OF REVENUE, CASES OF EU ……………………………………………………………….….
41
Mantas Valukonis. CHINA'S STOCK MARKET TRENDS AND THEIR DETERMINANTS ANALYSIS USING MARKET INDICES …………………………..…..
42
Justyna Witkowska. INSURANCE SERVICE QUALITY SURVEYS AS A CUSTOMER ORIENTATION STRATEGY ………………………………………………………………...
43
Jana Ziemele. FINANCIAL STABILITY OF THE EU`S INSURANCE COMPANIES ..…. 44
5
COMPETITIVENESS OF NATIONS AND GLOBAL ECONOMY …...…. 45 Beata Adamkovičová. ASSESSMENT OF CHANGES WITHIN THE ECONOMIC STRUCTURE OF THE TRENČÍN REGION …………………………………….……...…...
46
Justina Banionienė, INVESTMENT IN TECHNOLOGY RELATION ECONOMIC CHANGE ………………………………………………………..……………...
47
Kristina Barkauskienė, Vytautas Snieška. ECOTOURISM AS INTEGRANT PART OF SUSTAINABLE TOURISM DEVELOPMENT ……………………………………………...
48
Piero Benazzo. SOME MODEL BUILDING BLOCKS FOR AN ALTERNATIVE PARADIGM ON COMPETITIVENESS AND GLOBAL ECONOMY ………………....…..
49
Dalia Bernatonytė, Daiva Burkšaitienė, Kristina Rimienė. TRADE SPECIALIZATION PATTERN OF LITHUANIA ……………………………………………………………..…...
50
Jon Bryan. THE IMPACT OF GOVERNMENT POLICY UNCERTAINTY ON U.S. GLOBAL COMPETITIVENESS ……………………………………………………………..
51
Ilze Buligina, Biruta Sloka. TOWARDS WORK-BASED LEARNING – A NEW CHALLENGE FOR PUBLIC ADMINISTRATIONS IN VET REFORM ……………….…..
52
Jadvyga Čiburienė. THE CHANGES OF HUMAN CAPITAL IN THE GLOBAL LABOUR MARKET ………………………………………………..…………………….…...
52
Renata Činčikaitė, Narimantas Paliulis. ASSESSING COMPETITIVENESS OF LITHUANIAN CITIES ..............................................................................................................
53
Vaidas Gaidelys. THE POTENTIALS FOR USING OF METHODS OF COMPETITIVE INTELLIGENCE IN THE SECTOR OF RAILWAYS ………………………………….........
54
Jozef Habánik, Ján Kútik, Peter Hošták. ECONOMIC AND SOCIAL DISPARITY DEVELOPMENT WITHIN REGIONAL DEVELOPMENT OF THE SLOVAK REPUBLIC .................................................................................................................................
55 Eva Ivanová, Jana Masarova. IMPORTANCE OF ROAD INFRASTRUCTURE IN THE ECONOMIC DEVELOPMENT AND COMPETITIVENESS .................................................
56
Indrė Jucaitytė, Indrė Tautkutė-Stankuvienė, Vytautas Kubolis. CIGARETTES EXCISE DUTIES IMPACT ON ECONOMIC INDEXES ……………………………….......
57
Darja Kalinina, Irina Voronova. SCENARIO PLANNING ROLE: CASE OF BALTIC NON-LIFE INSURANCE MARKET ………………………………………..……………......
58
Rolf Karbach, Sergej Vojtovic. EXPLORING THE POTENTIAL OF THE CREATIVE INDUSTRY IN THE TRENCIN REGION …………………………………………...…..…..
59
Grażyna Karmowska, Miroslawa Marciniak. SUSTAINABLE ECONOMIC DEVELOPMENT IN THE POLISH DUO-REGION POMERANIA …………………...…...
60
Eva Koišová. SLOVAK REPUBLIC IN CONTEXT OF DISPARITY DEVELOPMENT .... 61 Rima Kontautienė, Valentinas Navickas. THE INTERACTION BETWEEN CORPORATE SOCIAL RESPONSIBILITY AND COMPETITIVENESS DURING THE ECONOMIC DOWNTURN ………………………………………….……………….…...….
61 Marcel Kordoš. ISSUES AND CHALLENGES OF THE US-EU ECONOMIC RELATIONS .. 62 Aistė Kuliavienė, Jolanta Solnyškinienė. THE EVALUATION OF THE IMPACT OF FOREIGN DIRECT INVESTMENT ON LITHUANIAN ECONOMY USING LAG-ANALYSIS …………………………………………………………………………………....
63 Irena Łącka. TECHNOLOGICAL COOPERATION BETWEEN SCIENTIFIC AND RESEARCH INSTITUTIONS AND COMPANIES AS THE CONDITION OF GROWTH OF INNOVATIVENESS AND COMPETITIVENESS OF POLISH ECONOMY ………......
64
Loreta Valančienė.
6
Rasa Lalienė, Algimantas Sakalas. CONCEPTUAL STRUCTURE OF R&D PRODUCTIVITY ASSESSMENT IN PUBLIC RESEARCH ORGANIZATIONS ……...….
65
Neringa Langvinienė, Jurgita Sekliuckienė. TRANSFORMATION OF INTERNATIONAL BUSINESS SERVICES INDUSTRY IN LITHUANIA ……………..…
66
Žiedūna Liepė, Algimantas Sakalas. DETERMINATION OF HUMAN CAPITAL VALUE IN MACRO LEVEL …………………………………………………………….…...
67
Jana Masárová, Eva Ivanová. THE IMPACT OF ROAD INFRASTRUCTURE ON THE ECONOMIC LEVEL OF THE SLOVAK REPUBLIC REGIONS …………………….…….
68
Antonio Mihi-Ramirez, Vilmantė Kumpikaitė. THE EUROPEAN MIGRATION FLOW IN A CONTEXT OF DETERIORATION OF ECONOMIC FACTORS: THE CASE OF SPAIN ........................................................................................................................................
69 Nino Mikiashvili, Eka Chokheli. THE WAYS FOR THE IMPROVEMENT OF COMPETITIVE ENVIRONMENT AND SOME DIRECTIONS OF ANTIMONOPOLY REGULATION (EXAMPLE OF GEORGIA) …………………………………………….….
70 Jelena Mikulko. CONTAINERISED CARGO SHIPMENTS: “CHINA – BALTIC STATES” TRADE LINE ………………………………………………………………….…..
70
Akvilė Normantienė, Vytautas Snieška. THE ROLE OF CREATIVE INDUSTRIES IN DEVELOPMENT OF LITHUANIAN ECONOMY …………………….…………...…….…
71
Aleksis Orlovs, Girts Braslins. CLUSTER’S IMPACT OF COMPANY CREDITWORTHINESS: CASE OF LATVIA ……………………………………….…..…..
72
Vaida Pilinkienė, Ralph-Jörn Kurschus, Goda Auškalnytė. E-BUSINESS AS A SOURCE OF COMPETITIVE ADVANTAGE ………………………………………….…...
73
Donatas Pilinkus, Edverdas Vaclovas Bartkus. POST-RECESSION ECONOMIC TENDENCIES IN THE BALTIC STATES ……………………………………………….….
74
Rita Remeikienė, Gražina Startienė. EVALUATION OF BUSINESS PROMOTION PROGRAMMES: LITHUANIAN CASE …………………………………………………......
75
Janusz Rosiek. CLIMATE POLICY IN PERSPECTIVE OF GREEN JOBS CREATION SUPPORT IN THE EU ……………………………………………………………………..…
76
Asta Sabonienė, Žaneta Karazijienė. IMPACT OF CUSTOMER RELATIONSHIP ON A COMPANY'S COMPETITIVENESS …………………………………………………….…...
77
Viktor Semenov. METHODS OF COMPLEX EVALUATION OF THE LEVEL OF COMPETITIVENESS ……………………………………………………………………..….
78
Jana Sochuľáková, Mária Igazová. FOREIGN DIRECT INVESTMENT IN SLOVAK REGIONS AND THEIR IMPACT ON REGIONAL ECONOMIC GROWTH .......................
79
Alina Stundžienė. PREDICTION OF LITHUANIAN GDP: ARE REGRESSION MODELS OR TIME SERIES MODELS BETTER? ……………………………………..……………....
80
Leila Sujeta, Valentinas Navickas. THE IMPACT OF PORT LOGISTICS SYSTEMS ON COUNTRY’S COMPETITIVENESS (CASE OF SMALL COUNTRIES) …………………..
80
Rozita Susnienė, Irena Pekarskienė. FEATURES OF THE DEVELOPMENT OF LITHUANIAN INDUSTRY IN THE CONTEXT OF GLOBALIZATION ……………..…...
81
Henrika Šakienė. THE YOUTH UNEMPLOYMENT REGULATION POSSIBILITIES IN LITHUANIA ……………………………………………………………………………….….
82
Katarzyna Tarnawska. ECO-INNOVATIONS – TOOLS FOR TRANSITION TO GREEN ECONOMY …………………………………………………………………………………....
83
7
Karolis Trimonis, Gražina Startienė. THE MODEL OF MAIN CAUSES OF NON-OBSERVED ECONOMY ………………………………………………………………...…...
84
Magdaléna Tupá, Herbert Strunz. SOCIO-ECONOMIC EFFECTS OF INTERNATIONAL MIGRATION ………………………………………………………..…..
85
Jovita Vasauskaitė. BUSINESS ENVIRONMENT FACTORS DETERMINING THE SELECTION OF TIME FOR THE IMPLEMENTATION OF NEW TECHNOLOGIES IN LITHUANIAN INDUSTRIAL ENTERPRISES ………………………………….…….....
86 Algimantas Venckus. THE METHODOLOGY OF RESEARCH OF ACTIVITY OF OFFSHORE COMPANIES …………………………………………………………….…..…
87
Vitalija Venckuvienė, Vytautas Snieška. GOVERNMENT SPONSORED VENTURE CAPITAL FUNDS AND THEIR RELATION TO INNOVATION IN LITHUANIAN SMES ……………………………………………………………………………….…….…...
88 Rasa Viederytė, Rimantas Didžiokas. CLUSTER MODELS, FACTORS AND CHARACTERISTICS FOR THE COMPETITIVE ADVANTAGE OF LITHUANIAN MARITIME SECTOR ……………………………………………………………………..….
89 Sergej Vojtovic, Emilia Krajnakova. VOCATIONAL TRAINING AND EMPLOYMENT IN THE CREATIVE INDUSTRY ……………………………………………………..……...
90
Ineta Žičkutė, Vilmantė Kumpikaitė. SOCIAL CLASS STRUCTURE IN THE BALTIC COUNTRIES…………………………………………………………………………………..
91
CONTEMPORARY MARKETING: RETHINKING AND REDISCOVERING ............................................................................................
92
Karina Adomavičiūtė. RELATIONSHIP BETWEEN UTILITARIAN AND HEDONIC CONSUMER BEHAVIOR AND SOCIALLY RESPONSIBLE CONSUMPTION ................
93
Edverdas Vaclovas Bartkus, Donatas Pilinkus, Paulius Ausmanas. EXPANSION OF THE ORGANIZATION INTO NEW MARKET: A SYSTEMATIC APPROACH .................
93
Justs Dimants, Biruta Sloka, Janis Kleperis. PUBLIC AWARENESS TOWARDS HYDROGEN ENERGY DEVELOPMENT AND IMPLEMENTATION IN LATVIA …….
94
Jana Erina, Natalja Lace. BANK CUSTOMER SEGMENTATION: THE CASE OF CEE COUNTRIES …………………………………………………………………………….……
95
Rimantas Gatautis, Asta Kazakevičiūtė, Mantas Tarutis. CONTROLLABLE FACTORS IMPACT ON CONSUMER ONLINE BEHAVIOUR ……………………….……………….
96
Ewa Glinska, Magdalena Florek. STAKEHOLDERS’ INVOLVEMENT IN DESIGNING BRAND IDENTITY OF TOWNS –PODLASKIE REGION CASE STUDY ……………….
97
Rasa Gudonavičienė, Sonata Alijošienė. INFLUENCE OF SHOPPING CENTRE IMAGE ATTRIBUTES ON CUSTOMER CHOICES …………………………………………………
98
Günter Hofbauer. SOCIAL COMMUNICATION AND DIFFUSION OF INNOVATION – A SYSTEMATIC APPROACH TO IDENTIFYING ALPHA COMMUNICATORS ……….
99
Ksenija Ijevleva. THE CUSTOMER EDUCATION INFLUENCE ON DECISION MAKING IN HOME LOAN MARKET ………………………………………………….…..
100
Neringa Langvinienė. LEISURE SERVICES CUSTOMERS’ BEHAVIOUR – WHAT FACTORS ARE CRUCIAL? ………………………………………………………………….
101
Pāvels Lindemanis, Deniss Ščeulovs, Elīna Gaile-Sarkane. BUSINESS MODEL FOR SMALL AND MICRO ENTERPRISES OPERATING IN E-ENVIRONMENT .....................
102
Jūratė Maščinskienė, Indrė Jucaitytė. SERVICE BRAND BUILDING PECULIARITIES ... 102
8
Miglė Matulevičienė, Regina Virvilaitė. THE IMPACT OF SHOCKING ADVERTISING TO CONSUMER BUYING BEHAVIOR …………………………………………………….
103
František Milichovský. SIGNIFICANT METRICS OF MARKETING PERFORMANCE IN CZECH COMPANIES …………………………………………………………………….
104
Indrė Pikturnienė, Sigitas Urbonavičius. PERCEPTIONS AND REACTIONS OF TWO CONSUMER AGE GROUPS TOWARDS THE ECONOMIC DOWNTURN: EXTENSION OF THE 2009 STUDY ………………………………………………………………………...
105 Žaneta Piligrimienė, Rita Kuvykaitė. COMMUNICATION IN SOCIAL MEDIA FOR COMPANY IMAGE FORMATION .........................................................................................
106
Žaneta Piligrimienė, Aušra Rūtelionė. DUAL SIDES OF HEALTH CARE SERVICE QUALITY: WHAT IS REALLY IMPORTANT FOR PATIENTS? ……………………..…..
107
Aistė Ragauskaitė, Regina Virvilaitė. INVOLVING CONSUMERS IN THE VALUE CREATON IN THE CONTEXT OF ICT DEVELOPMENT ……………………………..….
108
Jurgita Sekliuckienė. LITHUANIAN COMPANIES IN EMERGING MARKETS: INTERNATIONALIZATION MOTIVES AND BARRIERS ..................................................
109
Iveta Simberova, Alena Kocmanova, Petr Nemecek. MARKETING MANAGEMENT WITHIN CZECH ENVIRONMENT VIEWED FROM THE PERSPECTIVE OF MARKETING ACTIVITIES ……………………………………………………….…………
110 Gelminė Sližienė. FRAMEWORK OF MARKETING PERFORMANCE MEASUREMENT IN BUSINESS ORGANIZATION ………………………………….……
111
Inese Spica, Ernests Spics, Baiba Berzina. MANAGING DIGITAL ETHNO PRODUCTS .. 112 Eleonora Šeimienė, Vytautas Dikčius, Ermita Žalienė. CONGRUENCE BETWEEN BRAND AND CONSUMER PERSONALITIES ……………………………………………..
113
Eglė Vaičiukynaitė, Rimantas Gatautis. WEBSITE ATMOSPHERE: TOWARDS REVISITED TAXONOMY OF WEBSITE ELEMENTS .........................................................
114
Vestina Vainauskienė. INTEGRATION OF BRAND VULNERABILITY SCENARIOS PLANNING INTO BRAND MANAGEMENT PROCESS ………………………………..…
115
Elena Vitkauskaitė. INDICATORS FOR EVALUATION OF ONLINE ADVERTISING EFFECTIVENESS ………………………………………………………………………….…
115
Ligita Zailskaitė-Jakštė, Rita Kuvykaitė. COMMUNICATION IN SOCIAL MEDIA FOR BRAND EQUITY BUILDING ………………………………………………………………..
116
CORPORATE SOCIAL RESPONSIBILITY: THE INTERACTION BETWEEN BUSINESSES, SOCIETY, AND STATE ……………………..
118
Nino Abesadze. THE METHODOLOGICAL ISSUES OF THE IMPROVEMENT OF GENDER STATISTICS OF EMPLOYMENT ……………………………………..…………
119
Adelė Astromskienė, Rūta Adamonienė. DIMENSIONS OF SOCIAL RESPONSIBILITY IN THE PROCESS OF ENTREPRENERSHIP YOUTH EDUCATION ……….……………..
119
Diana Bagdonienė, Aušra Simanavičienė. CORPORATE SOCIAL RESPONSIBILITY SIGNIFICANT TO SMALL COMPANIES ………………………….……………………….
121
Andrius Guzavičius, Vidas Tamulis, Lina Žalgirytė. SOCIAL RESPONSIBILITY OF INTERMEDIATE INSTITUTIONS AND POLITICALLY-BASED ECONOMIC CYCLE ....
121
Katarina Haviernikova. QUALITATIVE AND QUANTITATIVE ASPECTS OF THE CLUSTERS IN THE SLOVAK REPUBLIC ………………………………………………....
122
9
Monika Kavaliauskė, Simona Ubartaitė. ETHICAL BEHAVIOUR: FACTORS INFLUENCING INTENTION TO BUY ORGANIC PRODUCTS IN LITHUANIA …….…
123
Monika Kavaliauskė, Ulyana Vaskiv, Eleonora Šeimienė. CONSUMERS PERCEPTION OF LITHUANIAN ECO-LABEL ………………………………………………..…………....
124
Rusudan Kinkladze. METHODOLOGICAL ISSUES OF THE STATISTICAL ANALYSIS OF UNEMPLOYMENT …………………………………………….…………..
125
Nino Lomidze. CONSTRUCTION BUSINESS DEVELOPMENT TENDENCY IN POST-CRISIS GEORGIA …………………………………………………………………….……...
126
Antonio Minguez-Vera, Mª Encarnación Lucas-Pérez, Juan Samuel Baixauli-Soler, Gregorio Sánchez-Marín, Juan Francisco Martín-Ugedo. FEMALE DIRECTORS AND TOP MANAGERS’ PAY: EVIDENCE FROM SPAIN ………………………………………
127 Nino Paresashvili. MECHANISM OF ELABORATION OF LABOR MARKET REGULATION STRATEGY …………………………………………………………….…...
128
Yelena Popova. FUNCTIONAL DEPENDENCIES OF THE HUMAN CAPITAL FACTORS …………………………………………………………………….……………….
129
Yelena Popova, Marina Kozhevnikova. INTERDEPENDENCE OF HDI AND BUDGET REDISTRIBUTION WITHIN THE SCANDINAVIAN AND EUROPEAN SOCIAL MODELS ……………………………………………………………………….……………..
130 Ilma Pranciulytė-Bagdžiūnienė. THEORY OF KNOWLEDGE MANAGEMENT AS A METHODOLOGICAL FOUNDATION FOR CONSUMER KNOWLEDGE INTEGRATION IN EARLY STAGES DEVELOPMENT OF PROSPECTIVE SEMANTIC TECHNOLOGIES ..
131 Raminta Pučėtaitė, Donatas Bendokas. THE INTERRELATIONS BETWEEN ETHICAL LEADERSHIP AND ORGANIZATIONAL COMMITMENT ………………………………
132
Žaneta Simanavičienė, Ruslan Kovaliov. THE METHODOLOGICAL BASIS OF CORPORATE SOCIAL RESPONSIBILITY INFLUENCE TO COMPANY VALUE ..…….
134
Jarosław Skorwider-Namiotko. CORPORATE SOCIAL RESPONSIBILITY AND ITS INFLUENCE ON THE RATE OF RETURN OF PUBLIC LIABILITY COMPANIES IN POLAND ……………………………………………………………………………..………..
135 Agnė Šneiderienė, Vytautas Juščius. THE RESEARCH OF SOCIAL VALUES INFLUENCE ON CONSUMPTION DECISION MAKING IN LITHUANIA ………..……..
135
Larisa Takalandze. SOCIAL RESPONSIBILITY OF BUSINESS IN GEORGIA: DEVELOPMENT AND PROBLEMS ………………………………………………..……….
136
Gabrielė Vilutytė, Edmundas Jasinskas. LEARNING OPPORTUNITIES OF SENIORS IN TOURISM MARKET ……………………………………………………………….……..
137
MANAGEMENT TRENDS IN CHANGING ENVIRONMENT ………..… 139 Laura Bakinaitė, Evelina Meilienė, Bronius Neverauskas. CONTEMPORARY APPROACH TO INCREASE PROJECT SUCCESS ………………………………….……..
140
Leonards Budniks. LATVIAN CLOUD SERVICE PROVIDER COMPETITIVENESS CASE STUDY ……………………………………………………………………….………..
141
Andrejs Chirjevskis, Aiga Grasmane. WHAT THE ANTECEDENTS AND CONSEQUENCES OF COOPERATIVE ARRANGEMENTS INHIBIT THE EMERGENCE OF COOPERATIVE STRATEGIES OF LATVIAN FOREST OWNERS? ...
142 Ramunė Čiarnienė, Milita Vienažindienė. MANAGEMENT TRENDS IN CONTEMPORARY FASHION INDUSTRY ………………………………….……………..
143
10
Rūta Čiutienė, Asta Savanevičienė, Aušra Rūtelionė. RESEARCH OF POSSIBILITIES OF YOUNG PEOPLE PLACEMENT ………………………………………………..……….
144
Asta Daunorienė. THE CONTRIBUTION QUALITY MANAGEMENT SYSTEM MATURITY LEVEL TO QUALITY COSTS ANALYSIS ……………………………..……
145
Asta Daunorienė, Alma Žekevičienė. CONTINUOUS IMPROVEMENT OF CITIZENS’ SATISFACTION IN LITHUANIA PUBLIC INSTITUTIONS ………………………….…...
145
Jurga Duobienė. ORGANISATIONAL ENTREPRENEURSHIP IN ORGANISATIONAL LIFE-CYCLE ………………………………………………………………………………….
146
Joanna Ejdys. FORESIGHT AS A TOOL OF OVERCOMING PROBLEMS ASSOCIATED WITH UNCERTAINTY OF THE ENVIRONMENT …………………...…..
147
Ragif Gasimov, Natig Gurbanov. HUMAN RESOURCE MANAGEMENT IN AZERBAIJAN COMPANIES: EVALUATING IN FUNCTIONAL LEVEL …………..……
148
Lina Girdauskienė. THE KEY FACTORS FOR CREATIVITY IMPLEMENTATION IN AN ORGANIZATION: THE STRUCTURAL APPROACH ………………………….……..
149
Adriana Grenčiková, Jana Španková. WORKPLACE STRESS AND ITS IMPACT ON JOB PERFORMANCE ………………………………………………………………………..
150
Monika Gullerova, Elena Delgadova. LANGUAGE COMPETENCES AS A PART OF COMMUNICATION CAPITAL OF MANAGERIAL STAFF ………………………….…...
151
Erika Hančovská. COPING WITH DIFFICULT SITUATIONS AND LOAD IN MANAGEMENT ………………………………………………………………………….…..
151
Jana Holá. THE EVOLUTION OF INTERNAL COMMUNICATION ………………..…… 152 Helena Kajanová. THE ROLE OF MOBILE LEARNING IN THE FUTURE OF EDUCATION IN SLOVAKIA ………………………………………………………….…….
153
Inga Lapina, Janis Mazais, Jolanta Janauska, Raimonda Liepina. MANAGEMENT OF STUDY PROGRAMME: APPLICATION OF QUALITY FUNCTION DEPLOYMENT METHODOLOGY ………………………………………………………………………….…
154 Antonio Mihi-Ramirez, Vilmantė Kumpikaitė. THE WHYS AND WHEREFORES OF THE STUDENTS INTERNATIONAL MIGRATION: EUROPEAN AND LATIN-AMERICAN ECONOMIC PERSPECTIVE ……………………………………………….…
155 Larisa Naumova. FACTORS INFLUENCING THE OUTSOURCING DECISION IN IT: EVIDENCE FROM LATVIAN PUBLIC ADMINISTRATION ……………………….…….
156
Bronius Neverauskas, Rasa Railaitė. FORMATION APPROACH FOR PROJECT MANAGEMENT MATURITY MEASUREMENT …………………………………….……
157
Ekaterina Nikolaeva. CLUSTER ANALYSIS OF MANUFACTURING ENTERPRISES ... 157 Pavels Patlins. SMALL-CARGO DELIVERY OPTIMIZATION NEW OPPORTUNITIES IN CITIES WITH INTENSIVE AND UNSTABLE TRAFFIC ……………………………....
158
Kristina Rimienė. SOLUTIONS FOR AGILE SUPPLY CHAIN MANAGEMENT …….… 159 Kristina Rimienė, Dalia Bernatonytė. SUPPLY CHAIN MANAGEMENT TRENDS IN THE CONTEXT OF CHANGE …………………………………………………………...…..
160
Angelina Rosha. MIXED METHODS RESEARCH DESIGN FOR THE DEVELOPMENT OF CONCEPTUAL MODEL FOR COACHING ……………………………………………
161
Asta Savanevičienė, Aušra Rūtelionė, Rūta Čiutienė. CRUCIAL TRANSVERSAL COMPETENCES IN CHANGING ENVIRONMENT: CASE OF EUROPEAN SME MANAGERS ……………………………………………………………………………….…
161
11
Seweryn Spalek. INFLUENCE OF PROJECT MANAGEMENT MATURITY ON PROJECT DURATION …………………………………………………………………….…
162
Živilė Stankevičiūtė, Asta Savanevičienė. SUSTAINABILITY AS A CONCEPT FOR HUMAN RESOURCE MANAGEMENT ………………………………………………….…
163
Asta Stulgienė, Rūta Čiutienė. COLLABORATION IN THE PROJECT TEAM …………. 164 Danuta Szpilko. THE INCORPORATION OF THE DELPHI METHOD IN THE STRATEGY OF TOURISM DEVELOPMENT IN THE REGION ………………………….
164
Violeta Šilingienė, Dalia Stukaitė. TRANSFORMATION OF FEMALE LEADERSHIP IN TERMS OF CHANGES IN LEADERSHIP COMPETENCY ………………………………..
165
Anna Štefančiková. CREATING OF TOOL TO IMPROVE PRACTICES OF KNOWLEDGE MANAGEMENT FOR INNOVATIONS ………………………………..….
166
Jelena Titko, Julija Bistrova, Natalja Lace. SUSTAINABLE SHAREHOLDER VALUE: ANALYSIS OF VALUE DRIVERS …………………………………………….…………....
167
Tadas Vaicekauskas, Kęstutis Duoba, Vilmantė Kumpikaitė. THE ROLE OF INTERNATIONAL MOBILITY IN STUDENTS’ CORE COMPETENCES DEVELOPMENT……………………………………………………………………….….….
168 Aistė Vaišnorė, Monika Petraitė. CUSTOMER KNOWLEDGE INTEGRATION WITHIN OPEN INNOVATION CONTEXT: TOWARDS MORE STRUCTURED APPROACH ...…
169
Milita Vienažindienė, Ramunė Čiarnienė. LEAN MANUFACTURING IMPLEMENTATION AND PROGRESS MEASUREMENT ……..…………………………
170
Mantas Vilkas, Eglė Katiliūtė. QUALITY MANAGEMENT SYSTEM IN TRANSITION: THE CASE OF INSTITUTIONALLY DERIVED TENSIONS IN LITHUANIAN HIGHER EDUCATION INSTITUTION ……………………………...………………………………...
171 Kristina Zdanytė, Bronius Neverauskas. ENSURING SUSTAINABLE DEVELOPMENT FOR CONTEMPORARY ORGANIZATIONS DEVELOPMENT ….……………………….
172
Jurgita Zemblytė. MANAGING DIFFERENT GENERATIONS IN THE WORKPLACE .… 173
12
Session
ACCOUNTING CHALLENGES IN THE CONTEXT OF ECONOMICS CHANGES
13
ACCOUNTING PECULIARITIES OF THE STATE-OWNED LAND IN LITHUANIA
Ingrida Balabonienė, Lina Dagilienė, Violeta Mykolaitienė, Giedrė Večerskienė Kaunas University of Technology, Lithuania
Purpose. To analyze the accounting aspects of the State-owned land and to present the
calculation of fair value of the State-owned land, which is not registered in SE Centre of Registers, in order to show the true and correct financial status of the State’s property.
Methodology. The objective of the accounting reform of public sector is to present the true and correct National accountability. Its correctness depends on the correctness of the data in the financial reports of the public institutions on the property owned by the State. The information provided by the National Land Service under the Ministry of Agriculture and State Enterprise Centre of Registers (SE CR) about the State-owned land is not unanimous in the reports. The State control audit (2012) states that the determination mode of the fair value of the State-owned land when the land’s fair value is calculated only applying the coefficient of changes in price of the land lots sold by the service, is improper, as it cannot guarantee that the real value of the land would be determined objectively; therefore it does not satisfy the requirements of public sector accounting standards. The value of the land lots would be determined more precisely on the basis of the map on land values. According to these recommendations, the calculation of the State-owned land value in financial report is conducted in the article. This paper uses statistical natural data about total and registered State-owned land according to the regions; the average market prices of the land are calculated on the basis of the map on land values. The investigation allowed calculating the part of unregistered land in ten regions in Lithuania; then the fair value of the unregistered State-owned land in accounting is calculated with regard to the classification of land sorts.
Results. The volume of the State-owned land not registered in the SE CR in Lithuania was determined and the fair value of such land in the financial accounting was presented.
Practical implications. Although the budgetary institutions are obliged to record the fair value of the land by laws, but their financial reports do not reflect the real view of this State property at present. The calculations of fair value of the State-owned land not registered in the SE CR will allow revealing the true and correct value of the State-owned land presented in the National accountability more precisely.
Value/originality. The problem of determination of fair value of the State property is stressed in the Lithuanian scientists’ works, but individual objects of the State property (for example, State-owned land) receive little attention. This is because the assessment methodology of the State-owned land is not provided for stakeholders. Thus the survey that presents the fair value of the unregistered State-owned land in the financial reports would allow showing the true and correct financial value of the State-owned land.
Keywords: environmental accounting, State-owned land, fair value. JEL Classification: M41, M48, O13. Paper type: Research paper.
14
SOCIAL INFORMATION DISCLOSURE BY PUBLIC SECTOR: A CASE STUDY IN LITHUANIA
Lina Dagilienė, Violeta Mykolaitienė Kaunas University of Technology, Lithuania
Purpose. The purpose of the paper is to investigate the social information disclosure due to its
structure and content by the Lithuanian public sector’s institutions. Methodology. One of the most important activities of public sector’s institutions is the best
use of funds for state functions (health, education, environment, defence, etc.). Although the public sector is a public benefit charitable, not less important issue is the disclosure of that information for interested groups. This article has examined the aspects of social accounting and reporting in the public sector on the basis of social responsibility’s areas of assessment. A case study was used for public sector’s institutions. The data collection for the cases has been done by the authors through questionnaires with relevant persons of institutions and supplemented through other information available in the public domain.
Results. Though the public sector is not profit making, social accounting and reporting is low. The paper’s results present content and structure of disclosed social information in the public sector.
Practical implications. The findings may serve to improve practically the structure and content of disclosed social information in the public sector.
Value/originality. Social accounting and reporting practices are widely spread all over the world by various kinds of organizations. However, most scientists focus on private entities, in recent years only several scholars have called for more attention to the public sectors' social reporting. This article presents the overview of the main peculiarities of social reporting in Lithuanian public sector’s institutions using case study analysis.
Keywords: social reporting, public sector. JEL Classification: M41, M48, Q56. Paper type: Research paper.
COMPANY GOING CONCERN EVALUATION FUZZY MODEL
Rasa Dainienė, Lina Dagilienė
Kaunas University of Technology, Lithuania
The going concern evaluation is significant argument that company will continue to operate for an indefinite period of time or at least for the "foreseeable future" – long enough to meet its objectives and fulfill its commitments.
The topic of going concern evaluation is identified with bankruptcy prediction in the scientific literature. According to Aziz & Dar (2006) statistic models are used in about 64 % of case studies, 25% soft computing techniques and about 11% other types of models. Discriminant analysis and regression methods dominate in classical statistical models. Soft computing techniques are a separate research area, which is understood as problem solving with the help of artificial intelligence. Fuzzy logic is one of soft computing methods and it is not widely applied in financial area. Fuzzy logic lets approximately but efficiently describes complex nonlinear dynamic systems, which mathematical equations are complicated.
Evaluation of company going concern using fuzzy logic models in most articles use only financial ratios, and results are compared with other types of models (McKee, 1997; Matviychuk, 2010; Karami et al, 2012; Korol, 1997; 2010; 2011; 2012) or non financial activity data – SWOT (Pesich et al, 2012). Therefore the problem is that there is a lack of going concern models that evaluate both financial and nonfinancial data.
15
Purpose. The main purpose of the paper is to design the model of evaluation of company going concern and experimentally shows its fidelity.
Methodology. Fuzzy logic approach is used for designing and evaluation of company going concern. Model parameters are estimated using research data, statistical methods and using various financial indices data from real companies (going and bankrupted) financial reports. Model financial ratio groups and equations are chosen by various researches, which are presented, by other authors (McKee (1997), Korol (2010), Mackevičius (2010)) and absolute financial indices values are estimated from real companies data by its dynamics. Model activity indices and their values are got using structural questionnaire and data logical analysis and synthesis.
Results. This paper presents the model of evaluation of company going concern and experimentally showed its fidelity. Model consists of:
Absolute financial indices evaluation subsystem, Financial ratios evaluation subsystem, Activity indices evaluation subsystem, Bankruptcy prediction subsystem, Subsystems evaluation generalization subsystem.
Evaluation result of all subsystems (except bankruptcy prediction) is calculated using fuzzy logic and generalized in separate subsystem, which provides final quantitative evaluation result.
Model evaluation result shows company state how much it is near its going concern interruption or far from it by providing quantitative evaluation value which is from interval [0;1], where if result is less than 0,5 then evaluation is negative and if more than 0,5 then evaluation is positive.
Model fidelity is showed by comparing its evaluation results, using different financial ratios groups) with Altman Z score, Taffler models and real company situation.
Practical implications. Model is suitable to apply it as utility tool in several areas: performing company bankruptcy diagnostics, performing company financial and internal audit and evaluating its going concern, designing further company strategy, evaluating company lending risks.
Value/originality. Evaluation of company going concern combines various financial indices, activity indices
and bankruptcy prediction model where subsystems evaluation results and their generalization are done using fuzzy logic.
Questionnaire evaluating company activities, which helps to make indices collection for activity indices evaluation subsystem, is suggested.
Keywords: going concern, fuzzy logic, and financial ratios. JEL Classification: G33, C49, C63, M42. Paper type: Research paper.
STATE’S ASSETS CONCEPTION AND ITS VALUATION
Lukas Giriūnas Kaunas University of Technology, Lithuania
Purpose. Research in the field of State’s assets conception and its valuation is not given
proper attention in Lithuania and previous scientific researches performed by foreign scientists enable us to proclaim that the unified concept of State’s assets is not yet available. Due to this reason, without precise research object it is difficult to perform not only the valuation of State’s assets, but also its effective management. Nevertheless, presentation purposefulness and necessity of assets and their separate types’ in legislation is also negotiable, especially when taking into account that State-owned assets should be accounted for according to the same legislation, which applies to all legal entitles, including the State. However, it should be noted, that the researches
16
performed by foreign scientists, such as Vandevelde K. J. (1980), Ostrom E. (1992), Davidse W. P., McEwan L. V., Vestergaard N. (1999), Bell, A. Spector H. (2012), Lightner T., Luo B., Ricketts R. K., Riley M. (2012) are unable to precisely and objectively define the conception of State’s assets, even though, during State’s assets valuation they also discuss the topic of State’s assets conception and its valuation. Therefore, the aim of the scientific research is to identify and evaluate the conception of State’s assets for the purpose of control and valuation.
Methodology. Scientific economic and analytical literature, Lithuanian laws and other normative acts are analysed in this article, the study of valuation practice of State’s assets conception is performed. The concept of State’s assets and other outlines are researched using a coordinated approach of monographic, logical, statistical analysis and comparison methods.
Results. The results of the performed study show that a plethora of asset control definitions exist and each of them could only be used for only a particular valuation aim. Therefore, a comprehensive research is needed for valuation of State’s assets conception. Thus for this purpose the generalized concept of the State’s property was formed during the scientific research and it can be also used in practice.
Practical implications. It has not been formed the uniform concept of the State’s property, therefore various laws and other normative acts present different definitions, and thus the accounting, assessment and control of the State’s property become quite a difficult task. Consequently, the research resulted in formation of new and generalized concept of the State’s property that can be also used in practice – in all the laws and other normative acts without any exception.
Value/originality. It has to be noted that the uniform conception of the State’s property has not been presented yet, thus its presentation has significant meaning not only the theoretical, but also on the practical level. Such new generalized concept will have significant practical meaning, because when the research object is known and appropriately defined, no uncertainties should appear in practice, which property is considered as owned by the State and which not.
Keywords: state property, concept of state property, evaluation of state property. JEL Classification: G12, H82, H83. Paper type: Theoretical paper.
VALUATION OF GIFT TAXATION IN LITHUANIA
Gintarė Giriūnienė, Lukas Giriūnas Kaunas University of Technology, Lithuania
Purpose. Even though, there is a plethora of scientific literature related to taxation systems,
gift taxation is not well analysed at the scientific level. There is no thorough comparative analysis related to peculiarities, advantages and differences of this tax in various countries. However, this analysis is imperative in order to determine certain areas for improvement and tax perspectives in Lithuania. They require a very thorough and comprehensive research, especially since gift tax in Lithuania applies when donating assets, which are evaluated and associated to individual income. Due to this reason, tax evasion is tempting, besides when compared to other countries there are too many gift tax deductions or reliefs in Lithuanian taxation system, which in turn create conditions for tax evasion. In order to avoid taxes, fake gift transactions are concluded, with the help of which taxes are evaded and the State loses part of its revenues from taxes. Furthermore, inheritance and gift taxes in the world are implemented in order to reduce tax evasion. As seen from practise of other countries, it is a rather effective measure if gift tax is levied on donator, rather than the recipient of gift. So the aim of the scientific research is to identify and evaluate the existing gift taxation system in Lithuania.
17
Methodology. Scientific economic and analytical literature, Lithuanian laws and other normative acts are analysed in this article, the study of valuation practice of gift tax is performed. The concept of gift tax and other outlines are researched using a coordinated approach of monographic, logical, statistical analysis and comparison methods.
Results. The obtained research results enable us to conclude that plethora of different gift tax schemes exist. Nevertheless, each of them could be evaluated differently, depending on the existing situation in a particular country. Due to this reason, a comprehensive valuation of gift tax system in Lithuania has been performed and enables us to foresee areas for gift tax improvement.
Practical implications. Nevertheless, the selection of particular taxation methods in different and changing environments, could not only be assessed differently, but could also become inappropriate and ineffective. Therefore, a single gift or other taxation method cannot exist, it has to be evaluated in respect to a particular country’s needs. So a comprehensive valuation of gift tax system in Lithuania has been performed and enables us to foresee areas for gift tax improvement has practical implications – correction of the existing inaccuracies in tax system in Lithuania will create all conditions to reduce tax avoidance opportunities on gift taxation.
Value/originality. It should be noted, that in order to achieve a more effective administration of Lithuania’s taxation system, gift tax was integrated into personal income tax. Nevertheless, based on the performed statistical data analysis, changes in legal base related to gift tax, were not productive and only augmented tax evasion. Due to this reason, a comprehensive valuation of gift tax system in Lithuania has been performed and enables us to foresee areas for gift tax improvement.
Keywords: gift tax, taxation, tax system, tax avoidance. JEL Classification: H20, H24, H31. Paper type: Research paper.
A FRAMEWORK FOR TAX SYSTEM EVALUATION WITHIN THE CONTEXT OF ENTREPRENEURSHIP
Gintarė Giriūnienė, Edita Gimžauskienė Kaunas University of Technology, Lithuania
Purpose. According to the practice, the entrepreneurship is mainly organized through the
national tax system while regulating various tax deductions, reduced tax tariffs, tax-free sizes, etc. However it has to be noted that the assessment of tax system and determination of the areas, which need to be improved, is not such a simple and clear process, especially when the scientists and market experts assess it very differently, although tax sorts, payers, administrators, payment and declaration order are clearly defined by the tax law present in the country; however the assessment and its problem are little examined with regard to theoretical and methodological aspects. It should be noted that such scientific researches, which are not based on any empiric researches, lose not only their survival value after several years, but also the significance because of the changing economic situation in the country and quite drastic reforms of tax system in the country. Yet the assessment criteria of dynamic tax system are not so easy to identify and assess with regard to clearly measured parameters, especially as each country has its own tax system, which suits it the best. The objective of the scientific research is to determine measures, which allow assessing the tax system within the context of entrepreneurship.
Methodology. The analysis of the Lithuanian and foreign scientific works, empiric researches and economic literature was conducted in the article, as well as practical study with regard to the tax system and its assessment in the aspect of entrepreneurship. The assessment methodologies of tax system were examined through combination of monographic, logical, statistical methods of analysis and comparative method.
18
Results. It should be noted, that the methodological access of assessment of tax system within the context of entrepreneurship in the scientific research is identified and the assessment criteria of tax system, which reflect entrepreneurship and its inducement in the country is provided.
Value/originality. It has to be noted that the tax system has not been assessed in the complex way covering all the constituents with regard to its enterprise aspect, thus the framework was formed, how the tax system should assessed with regard to enterprise inducement, and it not only enriches the already existing economic theories, but also provides the possibility of practical application. So it is possible to state that the assessment conception formed and presented in the scientific article is characterized not only by originality, but also has the surplus value.
Keywords: entrepreneurship, tax system, tax system evaluation. JEL Classification: H20, H25, L26. Paper type: Theoretical paper.
ASSESSMENT OF TANGIBLE MOVABLE ASSET OPERATION COST AND
ECONOMICAL AGE DEPENDENCE
Rūta Gokienė Kaunas University of Technology, Lithuania
Purpose. The aim of the paper is to assess dependence between operation costs and tangible
movable asset’s economical age in its life cycle and to determine quantitative aspect between these two variables using simulation modeling.
Methodology. The created mathematical model includes cost function research and data analysis technique. For costs and economical age correlation fixing regression analysis, correlation analysis and simulation modeling have been applied. The model of asset operation costs management was implemented by using MS Excel, Statistika, VisSim 5.0. program.
Results. In this article dependence between tangible movable asset costs and economical age is determined, id est., mathematical expression is determined which proposes costs as a function of economical age. Because of this reason requirements are given for data base quality and size, costs and economical age dependence estimation process is described, functional relationship is hypothesized, exceptions are established, regression model is designed, techniques for curve application are discussed, comparison between regression models is given. Then modeling technique is described. The aim of this stage is to use simulation modeling that helps simulate the subject in time and to use the created model lots of times. The main simulation modeling point is that analytical dependences, describing researched object input, its status and result’s correlation, is changed by stochastic model which presents processes, happening in the subject, and the parameters of the model are stochastic characteristics of the variables of the model.
Practical implications. Assessment of tangible movable asset operation costs and economical age empirical dependence exceptions are established and regression analysis is made.
Value/originality. Empirical correlation between cost and economical age has been identified. This dependence helps to valuate costs in asset operation stage in correct way.
Keywords: tangible movable asset operation costs, economical age. JEL Classification: C01, C02, C13, C15, C53, C80, M40, M49. Paper type: Research paper.
19
QUESTIONS OF ACCOUNTING AND AUDIT REGULATIONS IN GEORGIA
Nazi Gvaramia Sokhumi State University, Georgia
Purpose. Key questions of accounting and audit regulations, existed in Georgia for nowadays
and correspondingly, legal changes, executed towards the above said direction is given in this scientific thesis. The task of this thesis is to present the audit role and possibility of accounting in modern management system, and it is not covered only by the registration of economical operations, but it is also the necessary instrument of financial information, linking ring among the economical activity and the entities, who make the decisions, which have the great meaning in functioning of economical subjects in order to make correct management discussions.
Methodology. Practical realization of a problem, made in our country was done by the Georgian professional accountants and audit federation (BUF), which was created in April 1998 on the result of confluence of Georgian accountant club and Georgian accountant association. On the way of accounting activity’s improvement, important step was stepped by the mutual force of Georgian professional accountants and audit’s federation and USA international development agency (USAID), which has the law “about accounting and calculation”, adopted by the parliament, by which, the Joint stock companies, from January 1, 2000, Limited liability companies and cooperatives are making the accounting and calculations from January 1, 2011 in compliance with the international accounting standards.
Results. Due to it, the aim of this research is to represent the experience, existed in the sphere of accounting and audit of Georgia, criteria of accounting professional acknowledgment and correspondingly on the base of legal bases of changes, executed on the modern stage.
World known practice of accounting activity reveals, that role of international accounting standards and the meaning, is gradually increased and it is said by increasing of world economical globalization, which means the participation of world’s capital in separate countries’ economy. Follow from this, interested investors, creditors and etc. need timely and hopeful information in return for the invested capital about get a possible economical profit, getting of such information is not possible without foreseeing of international standards principles of accountant in national calculation system.
Value/originality. For nowadays, sharing of international experience in accounting is very urgent and correspondingly its introduction in accounting and calculation sphere. Follow from this, world known concepts, settled in the modern accounting and audit sphere is discussed in this scientific research, including, the experience of European countries and USA towards the abovementioned direction.
Keywords: accounting, auditing, standards, regulation. JEL Classification: M4. Paper type: Research paper.
20
GROSS MARGIN MANAGEMENT FRAMEWORK FOR MERCHANDISING DECISIONS IN COMPANIES WITH LARGE ASSORTMENT
OF PRODUCTS
Gediminas Jagelavičius Avon Cosmetics, Lithuania
Gross margin management is complex task as gross margin can’t be too high or too low in
order to deliver maximum sales and profit. Companies that have higher gross margin tend to be more profitable and tend to have stronger free cash flow.
Objective of the article is to present framework that allows understanding and managing gross margin and gross profit in companies with large assortment of products. The framework has defined basic margin drivers – pricing, cost and mix. These drivers or margin variations can be used as building blocks when adopting the framework to a specific company and developing margin drivers depending on the company needs and strategy.
Classical cost accounting analyse cost variations expressing it in money value, calculating it on product-by-product basis.
Value and originality of this article is that the presented framework calculates variations not on cost but on gross margin level, in this way connecting sales and cost and showing impact of business decisions on gross margin or gross profit. Value of margin driven can be expressed in money as per classical methodology and as well in margin points. Formulas are presented which translates specific decisions impact on gross margin and gross profit without the need to recalculate all assortments on product-by-product basis.
Additional practical aspect of the article is that here are analysed and explained possible situations in managing gross profit and margin and proposed merchandising decisions for some of the situations. Example of situations analysed and questions answered are: what merchandising decisions should be made when increase in gross margin resulted in decrease of absolute gross profit; what are the possible reasons when investment in gross margin does not deliver sales and gross profit growth; what gross margin mix driver tells us about customer behaviour.
Methodology employed. Derivations of algebraic formulas are used to obtain gross margin drivers impact on gross margin and gross profit. Cause and effect model is used as a method to integrate gross margin drivers into the gross margin management framework. Boston Consulting Group matrix is used to establish and analyse typical gross margin management situations and interpret customer behaviour, e.g. possible gross profit and gross margin interdependence situations are defined by using the Boston matrix.
Conclusions – companies with large assortment of products have to manage financial results and gross profit through gross margin management by evaluating merchandising decisions impact on both gross profit and gross margin. Minimum three gross profit and margin drivers – pricing, cost and mix, need to be used to understand business situations related to gross margin management and these three drivers can be used as a building blocks to establish more gross profit and margin drivers in more complex gross margin management strategies.
Keywords: gross margin, gross margin and gross profit management, customer behaviour, merchandising elements, merchandising decisions.
JEL Classification: G39, M49. Paper type: Theoretical paper.
21
VALUATION OF CROWDFUNDING: BENEFITS AND DRAWBACKS
Sima Jegelavičiūtė, Loreta Valančienė Kaunas University of Technology, Lithuania
Purpose. The aim of this paper is to broaden the body of knowledge about crowd funding. Crowd funding is an innovative and relatively new concept that connects investors to
entrepreneurs. It is a method of fundraising, based on the ability to pool money from individuals in order to turn promising ideas into actual businesses. The approach is attractive to entrepreneurs, because it not only allows raising capital for small businesses, which have very limited financing options, but also serves as a tool for testing marketability. Individuals enjoy the possibility to contribute to the ideas they believe in, even if they can invest only small amounts. Governments appreciate the approach due to its positive effects on economy – creating jobs, fostering economic recovery and innovations. Due to the novelty of the approach, a number of problems arise: a need to change legal frameworks, keep investors protected and avoid fraud. Various problems and consequent fears lead to underestimation of the approach and missed opportunities.
Methodology. The applied research methodology is based on the positivism approach. An explanatory research is conducted with attempts to clarify different aspects of crowd funding and gain more knowledge about the subject. Such research methods as systematic literature review, comparison, induction, SWOT analysis and subjective assessment are employed.
Results. As crowd funding is a fairly new method of fundraising, moreover, even the term “crowd funding” was coined quite recently (only in 2006), the first part of the paper introduces readers to the subject. In this part, the notion of crowd funding is explained, the way it works is described and the on-going relevant changes in law are briefly presented. In the second part of the paper various arguments for and against crowd funding are given. Supporters name such benefits as accessibility for the entrepreneurs who fail to raise capital in other ways, chances to test marketability, benefits for communities, decision rights staying in the hands of entrepreneurs, ability to catalyse long-term economic recovery and foster innovation ecosystem, and etc. Opponents identify various drawbacks – weaker investor protection and potential fraud, skipping venture capital round and etc. After analysing those benefits and drawbacks, the SWOT analysis for crowdfunding is delivered. This allows unfolding a versatile picture of the subject. Based on the SWOT analysis, authors’ attitude towards crowd funding and possible further research directions are presented.
Practical implications. Understanding benefits and drawbacks of crowdfunding could be useful for entrepreneurs choosing a way to raise capital.
Value/originality. Crowd funding is presently growing very fast and this growth will probably be magnified after the changes in law are made. Due to the novelty of the approach, different attitudes towards crowd funding can be found. Some authors highlight various benefits of the approach whilst others concentrate on naming drawbacks and identifying threats. Taking a look at crowd funding through the prism of SWOT analysis allows obtaining a comprehensive picture of the subject, which is currently lacking in the scientific literature. It enables gaining a clearer perception of the approach.
Keywords: crowd funding, start-ups, entrepreneurs. JEL Classification: M13, M21, G32, L26. Paper type: Theoretical paper.
22
THE PRACTICE AND THE EFFECTIVENESS OF ACTIVITY-BASED COSTING IN SMALL LITHUANIAN COMPANIES
Rūta Klimaitienė, Kristina Rudžionienė, Andželika Vorbliugevičiūtė Vilnius University, Lithuania
Purpose. Scientific purpose, analyzed in this study, is formulated in accordance with the
question - what is the practice and how effective is activity-based costing in small Lithuanian companies. Jeremy Hope and Steve Player (2012) states that ABC is a significant step forward from standard costing and enables managers to see more clearly the true cost of products and service and thus set more appropriate prices. So for small companies (up to 50 employees) it is very imortant to set appropriate prices in order to remain competitive, which is impossible without good lean cost management, which includes activity-based costing.
Methodology. For examination of the empirical study questionnaire and interview methods were selected. For theoretical aspects of the activity-based costing, there were used these scientific methods - scientific literature analysis, synthesis, induction, deduction.
Results. The paper reveals the results of surveys and interviews in small Lithuanian companies (up to 50 employees). These results enabled to compare Lithuanian companies and their lean cost management system with different countries.
Practical implications. This research shows that cost accounting system in Lithuanian companies is facing the same challenges as well as the companies from other countries. Except, the limitations of implantation activity-based costing are significantly stronger. When problems, which affect the cost accounting in Lithuanian companies were revealed, it became possible to shape the solutions for the companies, which are facing problems with activity-based costing.
Value/originality. Lean cost management system was not analyzed of small companies prospects (up to 50 employees). Especially, when it deals with activity-based costing. The originality of the research paper is arguing with the question if activity-based costing is relevant for small companies and what are advanteges and disadvantages (what is the practice and effectiveness) of this lean cost management instrument in Lithuanians companies.
Keywords: activity-based costing, lean cost management, management accounting. JEL Classification: M41. Paper type: Research paper.
IMPROVEMENT OF PERFORMANCE MEASUREMENT SYSTEM
ACCORDING TO BUSINESS ENVIRONMENT
Lina Klovienė Kaunas University of Technology, Lithuania
Nowadays, we may observe that the rules of traditional business have changed. The new
business environment determines major changes in resources, structure, strategic objectives, performance measurement and goods of organizations. Economic and technological changes have significantly changed work environments and the management of businesses. The business environment of today has become more dynamic and competitive, due to the rapid developments of recent years. In such a competitive environment, it has become very important for managers to make consistent, logical and strategic decisions and develop instruments and models that provide financial information. The main objective of performance measurement is to provide information for decision making. According to this aspect the importance of performance measurement information has increased. This aspect lets to state that utility of
23
performance measurement depends on its conformity with business environment. But on the other hand it is very important to improve performance measurement system according to changing environment of organization.
The purpose of this article is to disclose content of performance measurement system (PMS) according to the business environment ensuring the internal resources based continual improvements.
The methodology of the paper includes case study which was performed in Lithuanian organization in order to point out the content of PMS according to different environment of an organization. Assessment of business environment and PMS was performed using structured questionnaire and interview method. Respondents were chosen from different management levels. This choice was determined presuming that objective situation could be disclosed summarizing information and opinion from different management levels.
According to theoretical analysis and research results it could be maintained that the content of PMS depends on different environment of an organization and reveals to investigate the problems of coherence between PMS and business environment reaching the internal resources based continual improvement.
Practical implications could be identified as developed algorithm for problem identification of conformity between performance measurement system and business environment ensuring the utility and internal resources based continual improvement of this system. It is important to notice, that purposeful and reasonable usage of performance measurement and its information influence the opportunity to choose the appropriate structure and features of performance measurement system in the context of environment of organization. Notwithstanding that different aspects of performance measurement are analyzed very widely in science literature, coherency between performance measurement and environment of organization is not so broadly analyzed. It is difficult to use performance measurement system effectively, if organizations could not have the instrumentation which allows to estimate an aspect of conformity of its performance measurement system and business environment. Gradually PMS could become a software and instruction for it usage only and organizations constrained to search a new opportunities and resources for a fast reaction, decision making and adequate performance. According to this aspect the value of the presented research is a disclosed content of PMS according to the business environment ensuring the internal resources based continual improvement.
Keywords: performance measurement system, business environment, contingency theory, complexity theory.
JEL Classification: M40, M10. Paper type: Research paper.
PERFORMANCE MEASUREMENT MODEL FORMATION
IN MUNICIPALITIES
Rūta Kmieliauskaitė, Loreta Valančienė Kaunas University of Technology, Lithuania
Purpose. To develop the model of performance measurement system in municipalities that
enables to disclose the peculiarities when measuring the performance and to ensure the utility and internal resources based on continual improvement in municipalities.
In literature, many authors emphasize that the performance measurement is an essential foundation that municipalities can have. This proposition is based on that performance measurement can be helpful on achieving local and national priorities (Kondrasuk, 2011). Even performance measurement is stressed with numerous benefits that accrue to those organizations that apply such methods, many authors recognize the emerging problem, that some municipalities
24
find performance measuring system difficult to implement (IDeA, Audit Commission, 2006). Folz (2004) notices that the published literature review provides little guidance in measuring the components of municipalities performance measurement systems and how these components interact.
Methodology. The theoretical article can be divided into analytical and methodological parts. The scientific literature analysis, logical analysis methods that involves the generalization of theoretical propositions is applied in the analytical part to analyze the performance measurement. In the methodological part modelling method is used. This method is based on normative assumptions according to experiences of various business organizations and peculiarities arising in municipalities when creating the performance measurement model in municipalities.
Results. Developed performance measurement model for municipalities, where peculiarities of these institutions are taken into account.
Practical implications (if applicable). Developed model could be applied in different municipalities when measuring the performance. The data obtained can be compared between different local governments in order to improve their daily activities.
Value/originality. Lithuanian municipalities do not pay enough attention to operating performance in the scientific literature, in both theoretical and practical aspects, though this problem is widely studied by western scientists. In several countries performance measurement is linked with a forced creation of a system whose benefits and applicability few knew. In this way the attitude towards performance measurement, is linked with the obligatory functions, but not with the tool, that is able to bring a significant benefit to the municipalities. So in such state municipalities, which have a huge variety of different objectives an overall model of measuring the performance would be significant step towards the efficient performance development and satisfied society.
Keywords: performance measurement, public sector performance measurement, public organization, municipality, public economics.
JEL Classification: H11, H83, D73, P47. Paper type: Theoretical paper.
THE BASIC SOCIAL ACCOUNTING RESEARCH DIRECTIONS
Šviesa Leitonienė, Alfreda Šapkauskienė Kaunas University of Technology, Lithuania
Purpose. The main purpose of the paper is to present theoretical analysis of the basic research
directions of social accounting and to identify challenges for accounting researchers in the context of corporate social responsibility in accounting.
Methodology. Research methodology used in the paper is the comparison analysis of the scientific literature, generalization and theoretical modelling.
Results. The analysis of social accounting research has shown that it is possible to distinguish the following main research directions: nature and scope of social accounting and reporting; theories on corporate social accounting disclosure behaviour; social accounting impact to company’s reputation and financial performance. And may be concluded, that main challenge for accounting researchers is to supplement its traditional shareholder value perspective for understanding how CSR activities are encouraged other stakeholder interests or other factors. This new approach can highlight a variety of new and interesting research questions in the field of social accounting and on the other side of these issues research can expand understanding of the CSR phenomenon.
Value/originality. The value of the presented research is that the systematic study of social accounting theoretical and empirical works, identified the main research directions and challenges
25
for future research. The originality is that the corporate social responsibility concept, its advantages and disadvantages are analysed from the accounting researcher position.
Keywords: social accounting and reporting, corporate social responsibility, stakeholder theory, shareholder theory.
JEL Classification: M410, M490. Paper type: Theoretical paper.
TRENDS OF THE DISCLOSURE OF INFORMATION ON INTELLECTUAL CAPITAL IN FINANCIAL STATEMENTS IN LITHUANIAN ENTERPRISES
Agnė Ramanauskaitė, Kristina Rudžionienė Vilnius University, Lithuania
Purpose. Even though the disclosure of data on the intellectual capital of an enterprise is not
currently mandatory in financial statements, yet more and more enterprises both in Lithuania and abroad supply their annual statements with information on their intellectual capital. In terms of the data disclosed in financial statements of businesses of various countries, this fact was researched and revealed by a number of scientists (Brennan, 2001; Bozzolan et al., 2004; Guthrie et al., 2004; Abeysekera et al., 2005; April et al., 2005; Ensslin et al., 2005; Pedrini, 2007; Sujan et al., 2007; Vaškelienė et al., 2008; Campbell et al., 2009; et al.). These researches usually employed the method of content analysis which helps one establish the trends of alteration of the extent and structure of information as well as evaluate the changes in the type of information and the technique(s) of disclosure. Vaškelienė et al. (2008) conducted a research on the data disclosed in 17 joint stock Lithuanian enterprises, and the results of the data disclosed in the statements (prospectuses) of 2003 and 2006 showed that Lithuanian enterprises in their annual statements reveal more and more information on intellectual capital; it mostly deals with the human capital (where intellectual capital consists of human, relational and organizational capital) while the predominant form of the presentation of information on intellectual capital is plain text. Consequently, the object of this research is the voluntary disclosure of information on intellectual capital in annual statements of Lithuanian enterprises while the aim is the discovery of trends of disclosure of information on intellectual capital as well as a comparison of the obtained results with the data of previous researches based on conducting annual reports of Lithuanian joint stock enterprises of the years 2009 to 2011.
Methodology. Methods of generalization and synthesis of scientific literature are used in this research. The empirical research employs the content analysis method. The findings and conclusions are based on the investigation of scientific researches and publications of various authors.
Results. The results of the research revealed that the annual reports of 2009-2010 of Lithuanian joint stock enterprises featured an increase of the information on intellectual capital while the annual reports of 2011 exhibit the decrease of information extent, which is actually lower than the levels of 2009. The disclosed information is scarcest in terms of human capital while the extent of the disclosed information on organizational and relational capital in the researched reports is more or less the same. Information on the intellectual capital is mostly presented in plain text.
Value/originality. The present research reveals that the decrease of information on intellectual capital for the external information users disclosed by Lithuanian joint stock enterprises and changes in the disclosure structure were observed in the years 2009 to 2011 which is totally to the contrary to the general worldwide trends. It was likely impacted by the decrease of the list of mandatory annual statements, i.e. from 2007 onwards, Lithuanian joint stock enterprises have not been obliged to present annual statements (prospectuses).
Keywords: intellectual capital, intellectual capital disclosure, annual reports, Lithuania. JEL Classification: M41. Paper type: Research paper.
26
ACCOUNTING OUTSOURCING SERVICES IN LATVIA: PROBLEMS AND POSSIBLE SOLUTIONS
Ruta Sneidere, Inga Būmane, Jelena Lascenko
University of Latvia, Latvia Purpose. The aim of research is to study the developmental possibilities of accounting
services and, discovering the existing problems, to develop the recommendations and possible solutions for the improvement of the quality of accounting services and successful development of business in Latvia.
Methodology. The theoretical and methodological basis for the research is the works of Latvian and foreign scientists, the laws and regulations on the regulation of accounting, the materials of the proceedings of scientific conferences, the statistical data collections and the Internet resources. There have been general scientific research methods in economics, including teleological method of interpretation of laws and regulations, economic analysis and synthesis methods, data comparative analysis method, statistical analysis methods applied by the authors for the research purposes.
Results. The research performed by the authors show that the main factors, influencing the development of accounting outsourcing services, are the quality of services and the reasonable price policy. The providers of accounting services face several problems. The accounting services have a seasonal character; the services are demanded most at the last and first quarter of the year, thus the flow of income is uneven, as well as the accountants shall work under the conditions of high intensity that sometimes may influence also the quality of financial reports.
Practical implications. One of the solutions of problems could be the development of the normative regulation on the criteria for the recognition of the professional qualification of persons employed in the field of accounting, taking into consideration the international experience and the conception developed by the Latvian Association of Accountants.
Value/originality. The authors perform research on the development of accounting services in Latvia in the historical context, carry out the analysis of the market of accounting services, study the factors influencing the quality of accounting services and develop the possible solutions for the improvement of the quality of these services.
Keywords: outsourcing, accounting, development. JEL Classification: L84, M41. Paper type: Research paper.
CITY’S INTELLECTUAL CAPITAL FRAMEWORK: THE PERFORMANCE
MEASUREMENT POINT OF VIEW
Lina Užienė Kaunas University of Technology, Lithuania
Intellectual capital theory concentrates on three levels of research: personal, organizational and regional. Personal knowledge and organizational intellectual capital assessments have been widely analysed while the regional level has not been explored as much.
It has been widely recognized that urban competitiveness relies on the reasonable management of intellectual resource. This is not possible without having a proper resource inventory framework in place. In order to assess city’s intellectual capital performance a clear understanding of its core and structure must be agreed upon.
27
The question is weather some principles used to measure and manage organizational level (such as structure, performance measurement techniques, etc.) can be used at the regional level and especially at the city level.
Purpose. The main purpose of this research is to explore the core and structure of city’s intellectual capital by constructing and thoroughly investigating intellectual capital framework, which could serve as a starting point for the city’s performance measurement.
In order to achieve this purpose the following tasks have been completed: (1) importance of intellectual resource in the context of urban competitiveness has been
analysed; (2) city’s intellectual capital concept variety by different authors has been explored; (3) competitive city-specific characteristics has been investigated; (4) a detailed city’s intellectual capital framework that would facilitate the inventory of this
resource has been created; (5) city’s intellectual resource performance measurement guidelines have been defined. Methodology. The objective of this paper is achieved by analysing the core of city’s
intellectual capital first of all. Incentives to measure the performance are studied next. Later on different approaches to city’s intellectual capital structure are compared. Based on the results of research mentioned above and a study of competitive city features, a detailed city’s intellectual capital framework is proposed. Key findings and conclusions of this paper are based on the constructivism as a prevailing epistemological approach in the intellectual capital research.
Results. The study shows that competitive cities accumulate both intellectual and financial capital as complement to each other, thus forming the economic breakthrough conditions. Most authors believe that in the city’s intellectual capital management some corporate intellectual capital management principles should be adopted, particularly the idea of the composition of this resource. From the performance measurement point of view the standard intellectual capital structure consisting of three prevailing resource categories (human, relational and structural capitals) could be applied here. Identification and detailed investigation of the internal components of these categories enables to perform city’s intellectual resource inventory and opens a way for the comprehensive performance measurement. A number of internal components identified alongside the level of their investigation determine the objectivity and reliability of city’s performance measurement results.
Practical implications. City’s intellectual capital framework proposed in this paper makes it easier to inventory this resource. Predefined framework internal elements characteristics will help municipalities to identify city’s intellectual resource, measure its performance and make management decisions.
Value/originality. A possibility of applying concept of organizational intellectual capital structure to perform city’s intellectual resource inventory is investigated in this paper. Proposed framework reveals a large number of composite components suggested and explored.
Keywords: city’s intellectual resource, intellectual capital framework, competitive city. JEL Classification: M42, R50, R59. Paper type: Theoretical paper.
28
THE CONCEPT OF THE VALUE IN THE VALUE MEASURING SYSTEMS
Viktorija Varaniūtė, Edita Gimžauskienė Kaunas University of Technology, Lithuania
Purpose. This paper aims to reveal the essence of the theoretical concept of value in assessing
the value of different interest groups in the perception of and attitude towards it. Methodology. The paper is based on analytical methodology and systemic analysis of
comparable theoretical studies. Results. The main result of this study is the concept of the value in the value measurement
systems. It was found that, in economic terms, the value could be seen as a benefit, utility, need for satisfaction or effect. In order to satisfy their need for the object under consideration imposes costs on the content, form, time, location, and disposition sense. Value is the ratio between the expectations of its ability to meet the need and the costs incurred. Thus, the value of its management should be a natural element of the organization's management, covering the entire enterprise, focused on the future, focusing on value, and the correct generation.
The paper also identifies key factors that influence the value of which is the size of each performance measurement, the change in the value created by the company changes. In order to create the greatest possible value of the company's management strategy must be clearly defined for each factor influences.
The article revealed that the value of an organization is interested in both the organization's internal and external groups. Since the modern theory of interest groups formed the view that interest group in modern organizations is not "static and run" and "dynamic and interoperable" category, thus changing and the interaction between the divided interests of complexity, which depends both on the size of population groups as well as from their objectives of controversy. All this changes the objectives of different stakeholders that shape the perception of value, and complexity level.
Practical implications. Summary of value concept would recognize and systematically measure the value of different components of interest groups, in order to align the interests of groups of goals and expectations, and to ensure the value of corporate management level. The value of the concept of disclosure may be practicable to improve the value of the measurement system.
Value/originality. Its ever growing, technological progress and innovation-based competition, unclear boundaries of organizations, unmanageable flow of information characterizes one of the most prominent of the century business environment. In this context, the objectives of different stakeholders and their value conflicts form the managerial category; the level of complexity implies a different understanding of the value and forms a multi-dimensional approach to the phenomenon of value. Therefore, the concept of generalized value would systematically identify and measure the value of the components of the different interest groups to align goals and expectations, and to ensure the value of corporate management level. Therefore, the value and its measurement is a very important and pressing economic problem.
Keywords: value, value measuring systems, and stakeholder. JEL Classification: M40, M10. Paper type: Theoretical paper.
29
Session
CHALLENGES AND OPPORTUNITIES OF FINANCIAL ECONOMICS
30
SCIENCE AND TECHNOLOGY BASED COMPANY, ITS FEATURES AND RELATIONS WITH ENVIRONMENT
Saulius Adamauskas, Rytis Krušinskas Kaunas University of Technology, Lithuania
Purpose. According to different authors, science and technology based companies could be
considered as a crucial chain in transforming research and development investments into economic value, which could impact company’s business performance and at the same time countries economy development. Moreover, according to today’s empirical research, extremely fast innovation and technology development over the world have a different effect for separate industries. The article aims to explore the features of science and technology (S&T) based companies, determinants of cooperation with universities and science parks and to describe a profile of Lithuania S&T based companies according to statistics and other empirical studies.
Methodology. Theory states that the essence of the firms’ strategy is defined by the own and unique set of resources and capacities of each organization, thus the strategy is split into the opportunities provided by the environment and restrictions imposed by the organizational weaknesses and strengths, in other words internal assets and capacities. The overview of science based cooperation was analysed and absorptive capacity was emphasized. Moreover, the impact of spillovers on R&D efforts defined – asymmetric and symmetric competition and cooperation analysed. Finally, the overview of conceptual environment of knowledge based economy under the knowledge based entrepreneurship was done.
Results. After the science literature analysis, the science, technology and innovation indicators were summarized. The deeper look in Lithuanian S&T based companies is done; economic environment as the place to develop such kind of companies was analyzed. It was found that cost to GDP ratio increased more than 70% from 0,54 as of 1998 to 0,92 as of 2011. According to statistics of Lithuania, it was noticed that cost of S&T increased from 244 MLTL as of 1998 to 974 MLTL as of 2011. After the analysis of S&T costs structure, it was found that the main part of all S&T costs depends to fundamental researches and takes 38,2%. The importance of the topic is based on the amount of turnovers of S&T companies compared to all Lithuanian companies, which equals to more than 65% of all Lithuania companies. The theoretical systemized approach of S&T based company evaluation in discussion section was presented.
Practical implications. It is very important to understand how to evaluate science technology based companies and the environment these companies can successfully absorptive science, technology and innovations. Moreover, today with the emergence of knowledge as one of the factors of production, creating a great impact on internal organization resources and leading to competitive advantage among organizations. There is summarized overview done regarding the S&T based company, science, innovation and technology indicators are included and the overview of Lithuania companies and environment was done, which could be practically adapted in analysing such kind of companies.
Value/originality. The value of the presented research is based on practical implications and summarized overview of different theoretical approaches evaluating science and technology based companies.
Keywords: science and technology (S&T), determinants of cooperation, investment financing. science and technology (S&T), determinants of cooperation, innovation, research and development (R&D).
JEL Classification: E22, O30, O31, O32, C41. Paper type: Theoretical paper.
31
EFFICIENCY MEASURES OF CULTURE ORGANIZATIONS
Dagmar Camska University of Economics, Prague, Czech Republic
Purpose. This paper is focused on the issue how to measure efficiency of culture organizations in the Czech Republic. Majority of culture businesses works on the principle of contributory organizations which are non-profit and set up and manage by public authorities. The basic finance source for these organizations comes from public budgets. In the time of fiscal responsibility we have to describe which organizations work successfully and which only absorb public money and do not follow their objectives.
Methodology. The business literature review will provide basis of evaluating successes of classical profitable organizations. These approaches have to be combined with approaches used by non-profitable organizations. It has to follow the way of realizing objectives of culture organizations which are specific and therefore we are not able to use classical indicators and ratios. It is necessary to evaluate the economic situation differently. The indicators are partly based on autarchy (proportion of self-financing) and on the number of people whom services have been provided.
Results. Main results provided by this paper could be detected in suggested efficiency measures of culture organizations. At the end we will be able to answer questions which classical financial indicators we are able to use, which we have to transform and which we have to partly combine with non-financial indicators. Some criteria will be applicable for all culture organizations and some have to be specific because of the focus of the culture organization (theatre, museum, library etc.).
Practical implications (if applicable). Suggested efficiency measures of culture organizations mentioned as a result of this paper unable comparison of organizations, detecting strengths and weaknesses. Money provided for contributory organizations is sometimes absorbed as in the black hole. The control of public expenditures is necessary during fiscal responsibility of government. The potential is detected in possibility to divide organizations into two or more groups – successful and unsuccessful.
Value/originality. The Czech Republic does not have any efficiency measures of culture organizations which could be used right now.
Keywords: contributory organizations, finance, success, Czech Republic. JEL Classification: Z11, G32. Paper type: Research paper.
EFFICIENCY OF THE LATVIAN COMMERCIAL BANKING SYSTEM:
A DEA MODEL EVALUATION
Jana Erina, Ingars Erins Riga Technical University, Latvia
Purpose. The purpose of the present paper is to assess the efficiency of the Latvian
commercial banks in the period prior to the crisis, the period of the crisis and the period of economic recovery.
Methodology. In order to achieve the results of the present research, the qualitative overview of the scientific literature on Data Envelopment Analysis (DEA) has been performed. To gain the required data, the authors of the present paper have analyzed the work of the Latvian commercial banks and the branches/ agencies of the foreign banks, as well as the work of the credit institutions
32
registered in the member states of the European Economic Area (EEA) and their affiliations operating in Latvia in the reporting period of 2006 – 2012. The financial indicators applied for the needs of the present research have been obtained from the data available on the web page of the Association of Latvian Commercial Banks, as well as from the annual reports of the banks.
In order to assess the efficiency of the Latvian commercial banking system, the authors have applied the DEA methodology, which is based on the deterministic, nonparametric approach applying various input and output indicators. The input and output indicators have been identified taking into consideration the studies conducted by other scientists, applying such data as credits, deposits, and other assets.
To assess the efficiency of the banks, a variety of DEA models exist, however, for the needs of the present research, the authors have employed the most frequently used models – CCR DEA and BCC DEA.
Results. Assessing the efficiency of the Latvian commercial banks, the authors have come to the conclusion that the performance of the major banks is frequently more efficient than the work of the smaller ones. The fact that big banks have lower administrative costs may be one of the main reasons, which allows them to increase efficiency rate in comparison with the smaller banks. The data obtained has also shown that small banks constantly require innovative solutions to improve their efficiency
Practical implications (if applicable). The research performed has provided information on the efficiency rate of the commercial banks operating in Latvia, which allows making decisions considering future perspectives of each bank not only from the standpoint of a shareholder, but also from the standpoint of a client and bank personnel.
Value/originality. Taking into consideration how important the efficiently developed banking system is, especially in the states with a high competitive dynamics (including Latvia), the banks should change the present strategy to constantly improve their efficiency rate.
The authors believe that it would be required to perform additional investigations applying other input and output data, which could influence the bank economic indicators as well.
Keywords: bank efficiency, DEA, Latvia. JEL Classification: B16, C67, G21, O16. Paper type: Research paper.
THE ACCURACY OF THE BUDGET FORECASTING IN LOCAL
GOVERNMENTS IN POLAND
Paweł Galiński University of Gdańsk, Poland
Purpose. The paper aims to provide a characteristic of disparities between planned and
accomplished local government revenues and expenditures in Poland between 2001 and 2011. Methodology. The analysis of the literature in the field of the budget forecasting in the public
sector as well as the statistical analysis of the accuracy of forecasting revenues and expenditures in the local government sub-sector in Poland and their errors.
Results. The paper presents errors of the budget forecasting in the local governments in Poland between 2001 and 2011 and their determinants.
Practical implications (if applicable). The paper analyses potential issues, which determine revenues and expenditures in local governments in Poland. Therefore, it may be helpful for practitioners to increase the accuracy of the budget forecasting in the local governments.
Value/originality. There are not many practitioners in local governments, especially in the rural areas and small-towns, who are using the quantitative methods in order to estimate the accuracy of the budget forecasting. Thus, the article presents them. Furthermore, there are some
33
mistakes in the process of budget reporting, which incorrectly indicate the high accuracy of the budget forecasting. So, the paper disclose these issues.
Keywords: local governments, revenues, expenditures, budget forecasting. JEL Classification: G17, G18, H72. Paper type: Research paper.
EUROPEAN IPO MARKET. WHY REGIONAL STOCK EXCHANGES
DO STILL EXIST
Sofya Glavina People Friendship's University of Russia, Russia
Purpose. This article provides analysis of the European Initial Public Offerings (IPO) market
which is one of the biggest of the Global IPO markets. IPO provides a stock market launch, when shares of stock of a company are introduced to public at a stock exchange for the first time. IPO is an important source of finance resources for rapidly developing companies and a key step for them to become mature. Recent economic crisis has changed the landscape and the practice of IPO that should be reconsidered either from investor point of view as well as form the company heading to IPO. The article also is focused on identifying the roles of global and regional stock exchanges using example of development of London and Warsaw stock exchanges.
Methodology. Article provides quantitative analysis of selected top performing European stock exchanges official reports and analytical papers of key audit and consulting experts. It is particularly focused on the number of IPO’s, volume of raised capital by year and by stock exchange within the period preceding the financial crisis 2007-2008.
Results. The article shows out changes in the European IPO dynamics and change of roles of the European stock exchanges in post financial crisis. It is particularly shows the growth of importance of the regional stock markets in the European stock exchange ecosystem and WSE in particular.
Practical implications Recent economic crisis has changed the landscape in the practice of making IPO. Company heading to IPO should take changes on the IPO market seriously and take regional IPO opportunity in the consideration. Presented results could help to adjust IPO plans. Results could be of interest to investors to have a more detailed look at the highly performing regional stock exchanges.
Value/originality. This article studies are based on the most current data collected by the author from the various stocks reports and the most respectable audit and consulting companies. Analysis and graphic materials are produced by the author.
Keywords: IPO, initial public offering, stock exchange, stock market, LSE, WSE. JEL Classification: B26; F01; F30; F65. Paper type: Research paper.
34
THE RELATION BETWEEN ECONOMIC GROWTH AND PUBLIC-PRIVATE PARTNERSHIP MARKET’S DEVELOPMENT
IN THE COUNTRIES OF THE EUROPEAN UNION
Linas Jasiukevičius, Asta Vasiliauskaitė Kaunas University of Technology, Lithuania
Purpose. The main purpose of the paper is to examine whether it is possible to envisage the
positive relation between economic growth and public-private partnership (PPP) market’s development in the countries of the European Union (EU) and evaluate how strong this relation is.
Methodology. The relation is examined by focusing on the strength of correlation between the financing requirements and number of deals reaching financial close and economic growth in the different countries of the EU. Correlation is measured by analyzing the impact of economic growth on PPP market’s development using different time lags of years. 25 member states (all EU countries except Estonia and Malta in which PPP projects are not implemented or implemented in low capacity) are included in the research. The research is made by analyzing data of 1995 – 2011 period.
Results. The results disclose the strength of relation between economic growth and public-private partnership (PPP) market’s development
Practical implications. The results can be used to support the decisions of effective public expenditure and investment management.
Value/originality. After economic crisis the increased public budget deficits encourage governments to look for the possibilities to cooperate with private sector in order to develop public infrastructure faster and on a greater scale than public finance allows. However, there is a lack of information how PPP market’s development is influenced by changes of economics. Therefore, this problem is analyzed in the paper. The results will allow to get knowledge about strength of relation between economic growth and PPP market’s development in the EU.
Keywords: Public-private partnership (PPP), PPP market, economic growth, European Union, private investments.
JEL Classification: G32, G38, L32, L38. Paper type: Research paper.
DEPOSITARY RECEIPT MARKET DEVELOPMENT AS A SIGN
OF WORLD FINANCIAL MARKETS GLOBALIZATION
Marcin Kalinowski Gdansk School of Banking, Poland
Purpose. During the past two decades there become a strong link between financial markets
in the world. Financial markets have become global markets. It means that in transactions involving the entities operating on an international scale. Symptom of companies international operations among others is issuing depositary receipts in foreign financial markets.
The purpose of this paper is to assess the development of the depository receipts and analysis of the causes and consequences of the development of equity markets.
Methodology. In order to verify working hypotheses in the article were prepared statistical analysis of selected Depositary Receipts Markets and Stock Markets development indicators. This are data from the world markets with particular emphasis on European market. The data come from the period 1998-2010.
35
Results. The liberalization of financial markets and the globalization of the economy caused a significant growth depositary receipts markets in the world. In the last decade, there has been a sharp increase in world depository receipts turnover. In the years 2002-2008 these instruments turnover in the world has increased almost five-fold. In 2010, the turnover of the world's depository receipts reached $ 150 billion and was the highest value in the history of the market. Over 70% of turnover corresponds to the American Stock Exchange New York Stock Exchange.
Practical implications. Identifying the causes of development of the depository receipts and benefits arising from it can help local stock exchanges in the successful acquisition of shares.
Value/originality. Innovative element of this work is a common depositary receipts market and stock markets analysis. This allows for a deeper analysis of interactions in both markets.
Keywords: depositary receipt market, globalization, stock market. JEL Classification: G10, G15. Paper type: Research paper.
TRADE CREDIT MANAGEMENT PRACTICES
IN ESTONIAN TIMBER INDUSTRY COMPANIES
Mark Kantšukov, Anna Laidoner University of Tartu, Estonia
Purpose. This paper studies trade credit management methods in Estonian timber industry
companies. The purpose of the study is to determine characteristics of trade credit management policies in the firms operating in the timber industry of Estonia.
Methodology. We surveyed persons in timber industry companies responsible for trade credit management in their firms. The survey was based on questionnaires which were electronically distributed among companies (there were 87 companies whom questionnaire was sent; the response ratio was 36%). The questionnaire contained questions about credit control procedures, procedures regarding collection of accounts receivable and recovery of debts, also some general questions.
Authors set several research hypotheses which where either supported or refuted during the study. We also performed several statistical tests in order to assess quantitatively relationships between factors important for trade credit management. So both quantitative and qualitative approaches were applied.
Results. Among seven formulated hypotheses 3 were supported and 4 refuted. Results indicate that respondents in general consider trade credit management as rather important issue although in some companies this activity was not considered as important at all. Less than half of the companies surveyed had clearly defined trade credit management policy; more than half of the companies characterized their trade credit management policy as aggressive one. It was interesting to find out that in many firms the changes in policy took place since 2008 (due to outbreak of the global economic crisis) – conservative approach was replaced by more aggressive.
Practical implications. Insufficient attention to trade credit management may result in a company’s liquidity unsustainability and even bankruptcy. Our study may lead to detect additional reasons for companies’ bankruptcies in Estonia (manufacturing sector in Estonia which timber industry is a part of has experienced relatively high bankruptcy rate vis-à-vis many other sectors during last years). It is also important to study connection between trade credit management and company’s financial performance.
Value/originality. According to authors’ best knowledge there are no industry-specific surveys conducted on the topic of trade credit policy (there are not that many broad surveys in Estonia conducted on the topic of working capital management during recent years). As timber industry is of high importance for Estonian economy our research provides insight into certain aspects of financial management of Estonian timber industry companies.
36
Keywords: working capital management, trade credit policy, survey analysis. JEL Classification: G32, M20. Paper type: Research paper.
THE RESEARCH OF POSSIBILITIES TO INTEGRATE OCCUPATIONAL
PENSION FUNDS IN LITHUANIA
Violeta Naraškevičiūtė, Dovydas Strumyla, Mantas Juodelis Kaunas University of Technology, Lithuania
Purpose. In this article Lithuanian and other foreign countries pension systems (USA and Iceland), their experience and methodology, are analyzed in order to find effective improvements for Lithuanian pension system and also to find out about occupational pension funds integration possibility in Lithuania.
Methodology. Data of this paper cover two foreign countries experiences in their occupational pension funds systems. Also it covers Lithuanian social statistical data, which is used in financial prognostic model to evaluate possibility of occupational pension funds integration.
Results. The new type of pension system in Lithuania would stimulate its economy, also it would encourage country’s residents be more responsible for their future savings. In such system the biggest share of social security tax would be transferred personally to employee, without redistribution to other people.
Practical implications. This paper provides useful overview of occupational pension systems in USA and Iceland, systems’ methodology and experience. At this time Lithuanian pension system faces serious pension system’s challenges, so improvement for current system is necessary, in order to ensure system’s participators adequate standards of living during retirement.
Value/originality. Lithuanian pension system has passed the stage where most of country’s residents enrolled to private pension funds schemes, but it also has to hold many of older PAYG system’s members. The research of possibility to integrate occupational pension funds in Lithuania offers an advanced understanding of improving current pension system.
Keywords: integration, occupational pension funds. JEL Classification: C53, H50, H55. Paper type: Research paper.
CORPORATE PERFORMANCE IN ECONOMIC DOWNTURN:
THE CASE OF LITHUANIAN ENTERPRISES
Ginta Railienė Kaunas University of Technology, Lithuania
The research of business risk factors and modeling of possible impact on corporate
performance is important in different economic development stages and is on top in economic downturn periods. Economic conditions are both a cause and an effect of the business results, but influences businesses differently. Thus the research of the main risk factors having the influence on corporate performance is necessary. The problem is addressed in the study providing the diversified methodology for research as problems addressing the corporate performance are multiple and interconnected. The results of this study challenges for further research comparing different economies.
37
Purpose. The main purpose of the study is to disclose the link of corporate performance results to specific business characteristics and to provide the description of the main risk factors having the influence on corporate performance in case of Lithuanian enterprises taking the period before and during the economic downturn.
Methodology. The corporate performance measurement theories and research methodologies related to risk-return, operational efficiency and business financing structure valuations are discussed in brief and the methods and ratios for valuation are systemized and presented in the model. Valuation is separated by dimensions - ownership, size, activity nature and geography – in order to describe (a) the links and (b) the sensibility of business enterprises having different characteristics to changing economic conditions. Research covers the period of 1999 – 2010 which involves years of economic growth, downturn and partly stabilization. The statistical research methods are used for data processing: hypotheses testing, correlation and criteria grouping.
Results. The main findings disclose relations of different business characteristics to their performance, risks, financing structure and support the argument that enterprises having higher operational risks and weak financial structure are more vulnerable to an economic downturn.
Practical implications (if applicable). Research methodology and results would be of interest for business valuators and risk managers dealing with models and valuation of business risk.
Value/originality. The contribution of this paper is that it joins theories of risk-return, operational efficiency, and business financing structure by providing research methodology, tests the methodology, describes the situation of Lithuanian businesses in the period of 1999-2010, provides factors describing different reaction of businesses to economic downturn and calls for further research.
Keywords: corporate performance measurement, risk-return valuation, financing structure, economic downturn.
JEL Classification: G32. Paper type: Research paper.
EVALUATION OF THE EFFECTIVENESS OF ENTERPRISE INNOVATION
SUPPORT FROM EU FUNDS IN CZECH REPUBLIC
Hana Scholleova University of Prague, Czech Republic
Purpose. Czech companies were seeking support for their chosen activities within the various
EU funding programs. One of the programmes aimed to increase the competitiveness of Czech companies, the Operational Programme Enterprise and Innovation. The financial aid could be requested as part of the priority axes, which were aimed at supporting innovative behaviour of the company. Reports about the success of the program, made available by the state authorities, only input problems are being solved. The output only evaluates the correct usage of finances and carrying accuracy. Outcomes as consequences of placing funds drawn are no longer monitored. The aim of this article is therefore to assess the effects of selected supported organizations and to answer the question whether the drawdown of funds brought about at least a partially positive effect. Another research issue is the problem of how to measure the output effects.
Methodology. In order to evaluate the outcomes of assisted firms, the data was drawn from public database on the utilization of resources. Of the study subjects, we focus on the early and successfully completed projects, in which disbursement of funds was completed in 2008. Supported projects were then further filtered by the purpose used. The assessment covers only companies that have received an amount greater than 1 million CZK (approximately 400 thousand EUR). The finally selected companies shared a few financial characteristics in years following the drawdown
38
of funds. According to the purpose of drawing, financial indicators were then designed and statistically analyzed.
Results. The paper shows that the external system has a direct support for innovation in terms of the impact of its problem - its effects are not convincing. We are aware that some effects were influenced by the economic crisis. However, it is still questionable whether an indirect form of support for innovative behaviour triggers more pronounced effects. An interesting challenge will be the evaluation of companies that requested and received funds to support the implementation of research units, the effect of which we have not assessed (it has not occurred yet), but intend to examine it further in 5 years time.
Practical implications (if applicable). Results of the research pose questions for the government and politics of redistribution in the future (rules given by the EU) and whether an indirect support (fiscal and administrative relief) would be more efficient than the redistribution of resources, which essentially implies a burden on business units and the state apparatus, and whose results are not convincing.
Value/originality. To this date, EU programs have been evaluated with respect to the success of drawing funds only. The originality therefore lies in the idea to assess the EU programs by evaluating the effects, taking into account that most impacts are long-term and very much dependent on the pace of development of each company.
Keywords: EU funds, innovation, financial support. JEL Classification: O31. Paper type: Research paper.
COMPLIANCE STRUCTURE IN LATVIAN BANKING SECTOR
Biruta Sloka University of Latvia, Latvia
Arnis Lagzdins BA School of business and finance, Latvia
Purpose – After the financial crisis, International regulators (BIS, EBA, ESMA) have called
attention to the need to improve internal governance arrangements in banks. Management bodies should rely on the work of control functions, including compliance function. The control functions should be organizationally independent from units they control and should have appropriate standing, in terms of resources, status and expertise. The purpose of the paper is to analyse compliance structure in banks that should be ready for the new regulations.
Methodology: Theoretical update of publications related to organization of compliance function in commercial banks. Empirical research is performed by survey of all commercial banks in Latvia. The survey is carried out through a structured questionnaire to get information on presence of the compliance framework and its implementation. For evaluation is used 10 point scale, where 1 – fully disagree, 10 – fully agree. The survey data are analysed by help of descriptive statistics (indicators of central tendency or location, indicators of variability and cross – tabulations).
Results. In the survey performed in all commercial banks of Latvia (22) were received 19 responses (response rate 86,4%). It is found that banks in Latvia are responding positively to regulation developments and following EU compliance risk management trends, the organisation of the compliance function differs from banks in other countries. The banks interviewed underline the need to have more clear and updated guidelines from regulator regarding compliance risk definition, training and certification as well as compliance structure. The survey supported development of agenda for newly established Compliance Committee in Latvian Commercial Banking Association.
39
Practical implications. The survey results are practically used in the work of Latvian Commercial Banking Association. A vital factor increasing the pressure on the compliance function is the provision of adequate resources to meet the growing demands and challenges, Banks have to make critical decisions about where to allocate resources. All of them are under pressure and there are many functions which contribute to on-going success. But, as has been confirmed by recent cost of compliance survey organized by Thomson Reuters, financial institutions will only thrive in the medium and long-term if they build a strong compliance culture and invests in compliance.
Value/Originality. Before 2007 compliance activities in banks operating in Latvia have been usually delegated to the Internal Audit or Legal department while in other countries a specific regulatory requirement for Compliance function (or analogous) had been already introduced. Since foreign regulators have generally begun to pay attention to this issue earlier than the local ones, there is concern that banks in Latvia are behind the EU compliance risk management development. The survey identified how compliance function is organized and how banks are fulfilling this function and can better be prepared for future regulatory changes.
Keywords. Banks, risk management, compliance, compliance organisation. JEL Classification: M42, G21, G18, G28, M 100. Paper type: Research paper.
IMPORTANCE OF THE DEPTH OF THE CAPITAL MARKET ON INTERNATIONAL VENTURE CAPITAL AND PRIVATE EQUITY
ALLOCATION DECISIONS: THE CASE OF POLAND
Andrzej Sołoma University of Warmia and Mazury in Olsztyn, Poland
Purpose. The paper address the international Venture Capital and Private Equity allocation
issue. The study provides a discussion of the important parameters that determine the international allocation process of private equity funds. This article aims to assess the impact of the depth of stock market in Poland on international venture capital and private equity allocation decisions. The purpose of this paper is also to focus on the investigation of the venture capital and private equity investment trends in Poland.
Methodology. Research methods used are based on systematic and comparative analysis of scientific literature, logic analysis and synthesis, the analysis of statistical data and results of questionnaire survey. The statistical data used in article has been based on publications of the Polish Private Equity Association and reports of the European Private Equity and Venture Capital Association (EVCA). The information contained in EVCA reports has been based on PEREP_Analytics data. PEREP_Analytics is a centralised, non-commercial pan-European private equity database. The PEREP Analytics statistics platform is monitoring the development of private equity and venture capital in 25 European countries.
Results. The article reveals that the Poland is similar to the other Central and Eastern Europe countries with respect to rate of private equity investment to GDP but there is major difference which ultimately effect its attractiveness: it’s the size, number of IPO and capitalization of the Warsaw Stock Exchange. The total number of IPOs (105) which took place in Warsaw represent 40% of all IPOs in Europe in 2012. The total value of IPOs (EUR 731 million) gave the WSE the fifth position among the exchanges operating on Europe’s most developed capital markets. Research results indicate that in Poland, the second most common exit route for PE funds was divestment by public offering with €36.7m of value in 2011.
40
Value/originality. The results are useful to fund managers in improving their private equity allocation decisions in Central and Eastern Europe. The study focuses on the most recent period of development of the VC/PE market in Poland.
Keywords: venture capital, private equity, stock market, Poland. JEL Classification: G24. Paper type: Research paper.
ANALYSIS OF THE IMPACT OF FINANCIAL ENGINEERING TOOLS ON
SMALL AND MEDIUM-SIZED BUSINESS IN LITHUANIA
Jurgita Stankevičienė, Aušrinė Lakštutienė, Rytis Krušinskas Kaunas University of Technology, Lithuania
Purpose. The EU expenditure allocated to reduce the development disparities among the regions was especially substantial over the past 30 years. The EU Structural Funds are the main instruments affecting public investment strategies in the member states. Structural Funds today amount to almost half of the EU budget and are one of the most essential resources for farmers, regional authorities and private businesses. Currently, SMEs make over 98 percent of all business entities in the EU, provide two-thirds of private workplaces and generate more than half of value-added. Moreover, importance of SMEs increases: part of employees employed by SMEs increased from 67.1 percent in 2005 up to 80 percent in 2009. As prevailing economic conditions worsened situation of SMEs and banks tightened up lending conditions thus aggravating access to funding sources, it was just necessary to develop support for these companies. Therefore, the purpose of this paper is to analyze financial engineering tools for business development in Lithuania established by the EU structural funds (under the program of 2007-2013) and to evaluate its impact on Lithuanian economy as well as on small and medium-sized business. The object of the research is the EU Structural Funds allocated to development of small and medium-sized business in Lithuania according to the program of 2007-2013.
Methodology. Statistical data analysis, comparative analysis, systematic and logical analysis were used in this research. The data of financial engineering tools as well as factors describing situation of Lithuanian economy and SMEs for the period of 2006–2011 was obtained from the Lithuanian Department of Statistics, The Ministry of Economy, the Bank of Lithuania and INVEGA. Following financial engineering tools are analyzed: small loans, guarantees and partial financing of loan interest. Following indicators were selected as describing situation of Lithuanian economy and SMEs: GDP, value-added generated by SMEs, number of SMEs.
Results. The research evidenced that SMEs have a significant impact on the overall state of Lithuanian economy: they employ the majority of employees (over 70 percent) and generate a significant part of the value-added (over 50 percent). The highest obtained correlation coefficients (0.8 and above) were those of the EU structural funds and number of SMEs, GDP and value-added, number of SMEs and GDP, number of SMEs and value-added. This evidences that the EU structural funds have an impact on the number of SMEs, which in turn affects GDP and value-added generated by SMEs.
Practical implications. The research results allow forecasting changes in situation of Lithuanian economy and SMEs in case of changes of the EU structural support.
Value/originality. Despite the EU structural support has a significant impact on economy of Lithuania and makes an important part of SMEs’ financing, the research in this field is insufficient. The value therefore consists in filling this gap.
Keywords: small and medium enterprises, the EU structural funds, financial engineering tools. JEL Classification: E29, H81, M29. Paper type: Research paper.
41
EUROPEAN PROPERTY TAXATION: NEW SOURCES OF REVENUE, CASES OF EU
Evaldas Stankevičius Kaunas University of Technology, Lithuania
Purpose. The article deals with problematic issues of proper functioning of tax systems is a key prerequisite Cash-strapped governments have for economic growth additional revenues. Upon analysing the development of the fiscal system changes of GDP tax burden sector were used in the research to establish the correlation of the taxes on immovable property as one of the least detrimental to GDP of the European Union countries.
In the past time are discussions of personal income tax cuts and new tax’s revenue opportunities. The fact that property taxes are low in many EU countries, increasing them may offer treasuries a convenient funding solution to find new sources of revenue.
The goal of research is find relationships through all taxes, property tax and GDP. Property taxes may represent a useful additional tool in the hands of the authorities and gave opportunity find new sources of GDP revenue.
Methodology. 1. Theoretical and empirical research, statistical analysis of changing in property tax revenue,
influence to relationship between GDP and house market. Identification dynamic changes in the correlation analysis.
2. Mathematical statistics. Correlations for the detection and qualitative data analysis applied to Spearman’s coefficient, the calculation regression results of the data processed in SPSS 17.0.
Practical implication. Countries with developed economics have much experience with respect to formation of business-friendly tax systems. In any way the tax system and fiscal policy is one of the most basic economic mechanisms determining the development of economics and ensuring that the most important functions of a state are executed.
As a rule, financing of public sectors depends on the size of the national budget and Property Tax harmonization is not one of the declared aims of the EU and this type of taxation could be as new source of revenues, economic growth. Thus the following subjects are closely interrelated and play the main role nowadays, the national budget and the condition of publicly financed sectors. Finally, it could be shown that the correlation coefficients between property taxes and GDP changes are high and positive. However, while solving the above-mentioned problems, one has to answer questions about what principles or priorities should be taken as the basis for formation of the fiscal policy.
Value/originality. Property taxes can be made to be progressive and they are difficult to evade than other taxes, such as the PIT or the CIT, making them potentially, attractive from an equity point of view. The modest levels of recurrent immovable property taxes in many Member States suggest the existence of room for a tax shift away from distortionary taxes on labour and capital towards recurrent immovable property taxes.
Keywords: GDP, taxes, property tax. JEL Classification: A13, C14, E62, E64, G18. Paper type: Research paper.
42
CHINA'S STOCK MARKET TRENDS AND THEIR DETERMINANTS ANALYSIS USING MARKET INDICES
Mantas Valukonis Vilnius University Kaunas Faculty of Humanities, Lithuania
Purpose. To analyze the trends of China’s stock market and to assess the level of China’s
stock market efficiency. Methodology. Market indices are used in China’s stock market trends analysis. Indices are
analyzed in 2008 - 2012 period. Market return is expressed as the change of index. Market risk is analyzed using standard deviation value. China's stock market index results are compared with results of other regions indices. Correlation is used in order to identify the relationship between indices of the different regions. Also in this research we analyze how China’s macroeconomic indicators affect China’s stock market and how global economy indicators influence China’s stock market. In order to find the relation between macroeconomic indicators we use correlation analysis.
Results. Before the start of global financial crisis trends of China market indices and other markets indices were almost the same. But after the recovery of the indices in 2009, China’s stock market trends started to differ from global market trends. This approves that China’s stock market is influenced by global economy features, but when China’s economy started to struggle, the local China's economic problems became more important than global market trends. Correlation analysis of China’s and U.S. indices showed that the correlation between China’s and U.S. indices is very weak, indicating that the Chinese market and the U.S. market dynamics are not related to each other.
The relationship between China’s stock market, inflation and GDP was observed. Despite the high growth of China's GDP China's stock market did not reach good results over the last few years. The index had a negative return. This is because China's GDP is still growing, but the GDP growth rate is slowing down.
Practical implications. From the analysed data investors can see the trends of China stock market. Investors can decide whether China stock market is more attractive than other regions for them or not. Also this analysis shows which factors determines China’s stock market return.
Value/originality. In this article we analyse China’s stock market trends and relations between China’s stock market and other stock markets. China’s stock market was isolated for some time because of the distinctive features of the market and these features had reduced China’s market integration into the global markets. Due to the low China’s stock market integrity we can assume that the China’s stock market may be little affected by the processes of globalization and can develop isolated from the global markets. In order to find out whereas China’s stock market is isolated from other world’s markets we analyze the tendencies of market return and risk and the relations between China’s stock market and other markets.
Keywords: market indices, market return, standard deviation, weak market efficiency. JEL Classification: G14, G15. Paper type: Research paper.
43
INSURANCE SERVICE QUALITY SURVEYS AS A CUSTOMER ORIENTATION STRATEGY
Justyna Witkowska University of Warmia and Mazury in Olsztyn, Poland
Purpose. Increasing the level of customer satisfaction and consequently getting customer
loyalty organization can be achieved through the active clients’ participation in the whole quality assurance process. A customer oriented company aims to the proper handling in order to provide services at the highest level. To achieve this, it is worth looking at the expectations of clients and their assessments of the current level of service.
The aim of this study was to determine the level of service quality from the point of customers’ view using the services of institutions offering social insurance.
Methodology. SERVQUAL method was applied with a seven-point Likert scale. The SERVQUAL method also took into account the extended minimum size. The study was conducted among customers of the Social Insurance Institution (ZUS) and the Agricultural Social Insurance Fund (KRUS) in north-eastern Poland. For five tested areas (tangibles, reliability, responsiveness, assurance, empathy) 20 questions were assigned. An actual, expected, and a minimum quality of provided services was determined. Additionally, gaps were defined which allowed organizations to evaluate the service in terms of an efficient and effective customer service policy. Gaps are identifying areas on which the company should pay particular attention.
Results. According to respondents, the assurance area plays a major role among the mentioned dimensions. However, the research shows that the empathy area was rated the highest by the respondents. In turn, customers have the highest expectations in relation to the area of assurance. The biggest gap was observed in the dimension of the responsiveness. In general it can be stated that the quality of insurance services provided by the surveyed institutions were assessed at the good level. In many areas, amendments should be introduced indicating the next part of the article. Moreover, customers were grouped by demographic variables, depicting that older and better educated customers are more satisfied with the insurance service quality.
Practical implications. The scientific contribution of the author is preparing the research questionnaire measuring the quality of insurance services that can be used by studied institutions to make good decisions.
Value/originality. The conclusion briefly describes the potential for applying customer satisfaction research and customer service strategies in the social insurance sector. Thanks to the study carried out, market institutions can properly identify customer needs in the services they provide and see occurring discrepancies. Systematically conducted research will improve the work of surveyed institutions and increase the level of customer satisfaction. In addition, in the analysis of experienced quality services, customer expectations defined as at the minimum level identifies what service quality customers are willing to accept. The survey helped the Social Insurance Institution and the Agricultural Social Insurance Fund identify effective approaches used by market-driven organizations to monitor and improve customer satisfaction. Furthermore, the study will allow improving the responsiveness and effectiveness of service providers in target areas.
Keywords: insurance service quality, customer satisfaction, Servqual method. JEL Classification: G22, M31. Paper type: Research paper.
44
FINANCIAL STABILITY OF THE EU`S INSURANCE COMPANIES
Jana Ziemele JSC WESS, Latvia
Purpose. Financial stability of an insurance company means to find the optimal qualitative
and quantitative amount of assets and liabilities in order to provide an insurer covering of its financial obligations in time and in full payment with current assets. It consists of a constant balancing of an insurer’s income and expenditure there income is equal to or greater than expenditure. The main object of this research paper is the financial stability of the insurance companies, and the study is assessment and provision of the insurance companies’ financial stability under the new solvency regime – “Solvency II”. So the purpose is to evaluate the system “Solvency II” as a tool to achieve financial stability in the insurance industry.
Methodology. Research methods are the analysis and synthesis of scientific literature, monitoring and grouping, logical and comparative analysis.
Results. On the basis of the new solvency system analysis made, authors conclude that provision of insurance companies’ financial stability is stipulated by the “Solvency II” system that is a risk-based, economic measure of capital requirements in order to improve European Union insurers’ solvency ratios. In addition, the results of the insurance industry solvency system’s five quantitative impact studies and the main conclusions have been made, reflecting the insurance companies’ solvency system development stages since the beginning of 2000, when several proposals to reform the EU’s existing solvency system for insurers have been made. Rather than the current system of flat percentage capital requirements, “Solvency II” will employ an array of detailed insurance and market risk stress tests to determine how much capital insurance companies will need to hold. Therefore, capital requirements may vary widely depending on the degree of risk taken by different companies.
Practical implications. This work specifies the definition of the financial stability of an insurance company paying attention to the different formulations from a number of sources. Furthermore, the three-prong model illustrates the three factors (i.e. including insurance products, insurance markets mechanism and insurance business model) that interact to create insurance sector’s solvency in order to provide financial stability in insurance. The third prong in the insurance mechanism is what adds significant importance to keeping the insurance sector resilient. That part is the insurance market mechanism with its underwriting cycles and adherence to improving underwriting results when the investments/financial markets are too volatile and not producing enough income to supplement underwriting losses. However the three prongs for insurance solvency providing its financial stability are integrated and equally important.
Value/originality. The study analyses also the common ratios, which show the solvency of the biggest insurance companies of the Baltic States – Latvia, Lithuania and Estonia, in order to identify preparedness of the insurance companies to enter the new solvency system and ability to cover all the risks have been taken by insurance companies.
Keywords: financial stability of an insurance company, solvency, the three-prong model, Solvency II, Solvency I vs. Solvency II.
JEL Classification: G22, G28. Paper type: Research paper.
45
Session
COMPETITIVENESS OF NATIONS AND GLOBAL ECONOMY
46
ASSESSMENT OF CHANGES WITHIN THE ECONOMIC STRUCTURE OF THE TRENCIN REGION
Beata Adamkovičová Alexander Dubček University of Trenčín, Slovakia
Purpose. The objectives of the paper are to identify and assess the changes in the economic structure of the Trenčin Region that have been conditioned by location of businesses, the types of businesses, by entrepreneurial activities and their impact on the process of creating GDP and the employment rate.
Methodology. The changes in the economic structure are assessed and evaluated by means of calculating the total and relative number of employed people who have jobs in different economic sectors (agriculture, industry, construction, trade and other branches), by means of calculating the number of businesses based in the region and by means of describing business activity reflecting the dynamics of the growth of business subjects. Also experience gained in the collaboration with the local self-government is used. Processing the information database and defining the structural changes scientific methodology such as method of development implications and timing, analysis and shift-share analysis are utilized. The results are synthesised and form conclusions that form a base for defining implications and benefits.
Results. The results indicate the fields and branches that at that time created and opened positions and were competitive. At the starting point of the research in Trenčín Region, industries, agriculture and services played the key-role in the economic and social development and were the most dynamic in creating jobs. Most jobs were opened in these branches. The number of businesses increased during the researched period, the index of entrepreneurial activities in rural and transition regions was slowly equalized. Then the gaps in creating GDP per capita in different regions started to deepen in the Trenčín Region if compared to the Slovak average. The Trenčín Region had the tendency to take the bottom position in the Slovak economic development.
Practical implications. The results described in the paper can be utilized directly in the Trenčín Region as the basis in the Programme of economic and social development and also as the terms of reference for designing the guidelines to assist and aid Small and Medium Enterprise, and can be used in designing the policy in agriculture and the rural and social policy.
Value/originality. Applying three different methods in the process of assessing changes in the economic structure within the Trenčín Region the most objective results can be achieved. The research results forming the database can serve as a partial methodological basis for designing the regional information system. The information on selected factors of development processed in the course of sixteen years can play a crucial role in strategic decision making in the Regional Self-governing Office and is important for the design of the development concepts.
Keywords: changes of economic structure, business activities, Trenčín Region, social and economic development.
JEL Classification: P25, R58. Paper type: Research paper.
47
INVESTMENT IN TECHNOLOGY RELATION WITH ECONOMIC CHANGE
Justina BanionienėKaunas University of Technology, Lithuania
Purpose. The main purpose of the paper is to analyse the goals of evaluation of the relation between investment in technology and economic change. Also, the ways and the models should be analysed for the estimation of this relation. Besides, the theoretical method should be created for evaluation how different investment in technology influence economic growth.
Economists argue that investment stimulates economic growth. Investment in technology as one of the investment’s components should also stimulate countries’ economics. But the real relation between investment in technology and changes in the macro-economic indicators is not deeply analysed.
In addition, it is an open question which sources and spheres of investment in technology have the biggest impact to macro-economic indicators in a particular country. Moreover, the particular county has limited investment resources and needs to use them efficiently. So, country’s ability to influence economic change by investing in technology is one of the most problematic issues.
Methodology. The positivist methodology was used for the theoretical research. The relation between investment in technology and economic change was analysed using constructive research approach by applying systematic review, analysis, deduction and other methods.
Results. After the literature review and neoclassical models’ analysis the method for evaluation of the relation between investment in technology and economic change is created. The neoclassical models of R. Solow (1957), P. M. Romer (1994), H. Armstrong and J. Taylor (2000) were analysed. The analysis shows that different neoclassical models could be used for different kind of evaluation of relation between investment in technology and macro-economic growth.
Practical implications. The created method for evaluation of the relation between investment in technology and economic change is a practical implication of the paper. This method could be verified using practical tests in other research.
Value/originality. The influence of investment in technology to economic growth is not deeply analysed issue. The originality of this paper is the created method including economic growth as well as investment in technology indicators. The method consists of five main research goals: to evaluate the trends of investment in technology and economic indicators; to evaluate the influence of external factors for economic change; to evaluate the influence of internal country’s resources for economic change; to assess the opportunities to catch up advanced countries by investing in technology; to assess the country's ability to influence economic growth by investing in technology.
Different research results and the benefit could be got depending the chosen goal. The assessment and comparison of tendencies is used for superficial analysis of investment in technology and economic change. Also, the impact of different investment sources could be estimated by evaluating external factors and internal country’s resources. The evaluation of opportunities to catch up advanced countries by investing in technology let to assess the gap between different economies. Finally, some countries could be compared and strategic decisions could be chosen by estimating country's ability to influence economic growth by investing in technology.
Keywords: technology, investment, economic growth, investment in technology. JEL Classification: O11, O32, O46. Paper type: Theoretical paper.
, Loreta Valančienė
48
ECOTOURISM AS INTEGRANT PART OF SUSTAINABLE TOURISM DEVELOPMENT
Kristina Barkauskienė, Vytautas Snieška Kaunas University of Technology, Lithuania
Due to various economical, social and political processes of globalization tourism is the leading economic sector in many countries. Ecotourism is one of the most quickly advancing areas of global tourism. Ecotourism is based on the fundamental principles of sustainable tourism therefore ecotourism is an integral part of sustainable tourism. Lithuanian ecotourism is related to tourism in protected areas and includes natural and traditional cultural knowledge, observation, in accordance with the principles of sustainable development. The development of both sustainable tourism and ecotourism is one of the main challenges for the development of the tourism sector in order to maintain competitiveness in the international tourism market.
Purpose. The aim of the article is to analyze ecotourism as integrant part of sustainable tourism development. The tasks of the article are as follows:
1. To analyze the impact of ecotourism on development. 2. To investigate the main aspects of ecotourism; 3. To analyze the problems and the opportunities of the development of ecotourism in
Lithuania. Methodology. The methods of the study are systematic, logical and comparative analysis of
scientific literature, synthesis; SWOT analysis. Results. The analysis of scientific literature showed that ecotourism as an integrant part of the
sustainable tourism development is one of the fastest growing types of tourism in the world. Ecotourism as a sustainable development tool provides a long-term social, environmental and economic benefits and is given appropriate priority in the country's economic development. Ecotourism development is mostly aimed by economic, ecological, social, cultural aspects. Political aspect and marketing changes influence ecotourism development as well. The paper presents the main elements involved in the ecotourism development: the respect for the ecosystem integrity, local participation and economic opportunities for the local community. SWOT analysis showed that ecotourism not only has many advantages in Lithuania, which allow it to exist successfully, but also drawbacks that hinder the development of ecotourism. Despite the fact that most of the threats may also be a barrier to development, there are a few opportunities that provide the development of ecotourism perspectives in Lithuania.
Value/originality. Exploring the factors which influence the development of ecotourism, the Lithuanian ecotourism SWOT analysis was conducted, which showed the direction in which the rapidly developing ecotourism could successfully compete not only in the Lithuanian but also in the international tourism market.
Keywords: ecotourism, sustainable tourism, sustainable tourism development, SWOT analysis.
JEL Classification: L83, O13, Q01, Q56. Paper type: Theoretical paper.
49
SOME MODEL BUILDING BLOCKS FOR AN ALTERNATIVE PARADIGM ON COMPETITIVENESS AND GLOBAL ECONOMY
Piero Benazzo Expert in economics, Sweden
Purpose. To analyse an alternative to the modern economic paradigm, to be better suited for
models of economic recovery and viable development. Methodology. An alternative paradigm, for explaining the current economic downturn,
considers currently used statistics as forcibly grouping specific variables in aggregate proxy variables, hiding some important actual dynamics. This analysis is thus bound to be theoretical. The alternative paradigm is analysed and is considered viable when it allows explaining and predicting main trends and some evidence of key facts. Possibilities for economic models of such alternative paradigm are investigated.
Results. The basic economic drivers, rather than capital and labour, would be productivity and level of inequality. From the supply side, competitiveness of nations would increase productivity, in the classical way, increasing effective demand, while it would increase inequality. A bias in entitlements would accrue the supply side gains from increase in productivity mainly to a relatively small and very wealthy part of the economic actors. In the demand side, such surplus would increase demand both in the traditional subsistence sector and in the modern industrialised sector (defined slightly differently than usual). Upward pressure on prices would occur in both sectors. Other actors with stable nominal income would be forced to decrease demand. Little of this may be done in the subsistence sector. Most decrease would occur in the modern industrialised sector, thus inflating the subsistence sector relative to the modern industrialised one. Delocalization, decreasing prices of products, would delay the process. It would though generate competition for lowering wages or increasing unemployment in the countries with a relatively wealthy middle class. This would widen inequality. Eventually effective demand and investment would decrease in the modern industrialised sector. Savings withdrawn from productive investment would flow especially in the comparatively inflated and with stable effective demand subsistence sector, inflating it in a spiral (see the real estate market). When this accelerates, recession would settle in dramatically. Lowering inequality would thus be important from the demand side. A too large decrease of inequality would decrease incentives, competitiveness of nations and efficiency, thus decreasing effective demand from the supply side. There would thus be the need of a trade off between the two dynamics. Policies on both competitiveness and cooperation would be needed. Economic models would thus include the need for separating the economy in two main sectors, on one hand a traditional subsistence sector and on the other a modern industrialised sector.
Practical implications. Such theoretical framework would contribute to the investigation of possible routes for allowing economics to better forecasts and prevent downturns, and to decrease ups and downs of the economic cycle.
Value/originality. The theoretical framework would provide an alternative paradigm explaining the current global crisis as due to excessive inequality and provide some policy options for recovery.
Keywords: inequality, development, effective demand, subsistence, crisis. JEL Classification: D30, D58, D63, E12, E19, E20, E30, F00, I31, J30, J60, O10, O11, O40. Paper type: Theoretical paper.
50
TRADE SPECIALIZATION PATTERN OF LITHUANIA
Dalia Bernatonytė, Daiva Burkšaitienė, Kristina Rimienė Kaunas University of Technology, Lithuania
This paper analyses the pattern of trade specialization in Lithuania. Trade among nations is traditionally explained as arising from the specialization of nations in
particular industries as conditioned by the nation’s relative factor endowments. The evolution over time of trade specialization is a phenomenon that often reflects deep structural changes in the whole economic system of a country. Countries specialize by exploiting their comparative advantages arising from differences in technology, innovativeness and differences in factor endowments.
The pattern of specialization is at the core of international trade theory. Many studies suggest that the more developed a country is the more specialized is the structure of international trade and, therefore, a larger part of trade within a branch dominates in the total scope of international trade. Lithuanian integration into the EU opened huge possibilities for Lithuanian international trade. Researches show that it has influence on changes of trade specialization. However, researches investigating such changes are missing. For this reason actual problem arises – to estimate the pattern of Lithuanian trade specialization under existing conditions.
Purpose. To analyze the pattern of trade specialization of Lithuania under existing conditions. Methodology. In order to examine the pattern of trade specialization of Lithuania under
existing conditions two approaches are adopted. The index of relative trade advantage is used to determine the patterns of comparative advantage. Secondly, the Grubel-Lloyd index as an indicator of the degree of industrial specialization is used to predict structural changes in Lithuania.
Results. On the basis of standard international trade classification (SITC) relative trade advantage (RTA) index was determined the pattern of trade specialization of Lithuania. It is found that the biggest flows from Lithuania to the EU are in such groups: food, drink and tobacco; raw materials; mineral fuels, lubricants and related materials. On the basis of Grubel-Lloyd index and SITC is determined concentration of intra-industry trade flows between Lithuania and the EU. It was determined that huge differences in separate groups of goods prevail in intra-industry trade between Lithuania and the EU. It is found that trading in food, drink, tobacco, raw materials, machines and means of transport, chemical products, and other manufactured goods dominate between Lithuania and the EU. This shows the nature of specialization in trade of examined countries.
Practical implications. This research could be useful for preparing and forecasting the possibilities of Lithuanian international trade development.
Value/originality. This research has not been yet conducted in Lithuania, though this problem is actual not only for Lithuania, but also for the European Union.
Keywords: international trade; trade specialization; intra-industry trade; relative trade advantage index; Grubel-Lloyd index.
JEL Classification: F1. Paper type: Research paper.
51
THE IMPACT OF GOVERNMENT POLICY UNCERTAINTY ON U.S. GLOBAL COMPETITIVENESS
Jon Bryan Bridgewater State University, USA
Purpose. Through a review of the literature and the commentary from business executives, this paper examines the consequences of government policy uncertainly and its implications for the U.S. economy, job growth, and global competitiveness. While uncertainty has been and will always be a formidable component free enterprise, government policy can be more predictable and less volatile than the vagaries of the marketplace. Policy uncertainty has grown as the polarization of the American electorate has intensified over the past two decades. The stark political differences are increasingly on display by their elected officials in Washington. The recent political brinksmanship surrounding the so-called “Fiscal Cliff” is one example of the costly policy uncertainty facing U.S. businesses that is now endemic in Washington. While much of the focus of the Fiscal Cliff debate was on the constituents who would lose benefits or see their taxes increase, there was less attention to the debilitating impact of policy uncertainty on the nation’s businesses and the impact of that uncertainty on the economy.
Methodology. This qualitative research paper is organized around an in-depth understanding of and proposed solutions to the problem of government policy uncertainty.
Results. The research indicated that the actions of a nation’s political leaders can limit policy uncertainty by, for example, formulating economic policies of an enduring nature and limiting the type of temporary, stop-gap measures that led to the formulation of the Fiscal Cliff protocol. While the Washington legislative proclivity of “kicking the can down the road” has often been helpful in insulating leaders from the wrath of voters, the research identifies numerous detrimental implications from those temporary strategies in the form of reduced hiring, diminished investment, and a decline in new business formations. The propensity for the staffs of Washington lawmakers’ to write complex legislation, often with the aid of lobbying groups, was found to be a deterrent to business expansion. Unlike lager corporations, armed with extensive legal departments and lobbyists, small business do not have the financial or human resources to deal with the barrage of government regulation and often respond by quelling expansion.
Practical implications. The implications were most significant for small businesses and entrepreneurship, which account for more than fifty percent of U.S. private sector economic activity. In addition to the policy uncertainty of temporary legislative measures or outright political indecision, small businesses were more susceptible to planning uncertainly from the passage of poorly-crafted legislation that often lacked legal and regulatory clarity. While the policy uncertainty and its impact on business expansion discussed in this paper are principally associated with the U.S., the implications can be readily applied across borders.
Value/originality. The results of this research will be helpful in enhancing the understanding of these vitally important policy issues that are commonly excluded from policy debate and often given insufficient treatment in post secondary institutions of management practice.
Keywords: policy uncertainty, global competitiveness, job growth, investment. JEL Classification: D31, E61, F68, G18, F68, H10. Paper type: Theoretical paper.
52
TOWARDS WORK-BASED LEARNING – A NEW CHALLENGE FOR PUBLIC ADMINISTRATIONS IN VET REFORM
Ilze Buligina, Biruta Sloka University of Latvia, Latvia
Purpose. Work-based learning is increasingly being promoted in the European Union education policy. Being a routine practice in the vocational education and training (VET) systems in several EU countries, it is a relatively new approach in most national contexts and therefore needs to be studied more specifically. The paper’s purpose is to study innovative approaches in VET reforms, especially in relation to work based learning and the role of public administrations in implementing such reforms. It is especially important given the contradictory nature of the proposed work-based learning approach.
Methodology. The paper will be based on relevant theoretical and empirical survey analysis. In the theoretical analysis the policy and academic discourse on the research issue will be presented. In the empirical survey the opinions of public administrators will be studied regarding the issue of innovative approaches to VET systems with a focus on work based learning and its proposed value for the overall VET system. The survey has been based on a pre-prepared and tested questionnaire with the involvement of high level competence relevant experts.
Results. The main results and findings of the paper are related to the attitudes of relevant stakeholders in public administration concerning the role of innovation in VET systems and the potential value of work-based learning – as a starting point for discussion on possible respective VET reforms.
Practical implications. Before undertaking any particular VET reforms analysis is needed on the value and feasibility of such reforms, especially under specific national circumstances. The analysis of the opinions of relevant stakeholders regarding the need for VET innovation and the implementation of specific innovative approaches, such as e.g. work-based learning, has allow to draw conclusions on the current state of attitudes among relevant decision makers and experts as a precondition for potential VET reforms.
Value/originality. Since the promotion of work-based learning is a relatively new tendency in EU education policy making and has yet been little studied in national contexts in response to these EU policy initiatives, research in national contexts can prove to be of considerable valuable, especially in relation to public administrations which are key decision makers in national VET reforms.
Keywords: VET, innovation, work-based learning JEL Classification: I25, I28, O15, L38. Paper type: Research paper.
THE CHANGES OF HUMAN CAPITAL IN THE GLOBAL LABOUR MARKET
Jadvyga Čiburienė Kaunas University of Technology, Lithuania
Purpose. Under the conditions of open economy the countries of the world, including Lithuania, seek to expand the economy, increase job places and raise the qualification of workers. The formation of international labour market is characterized at various economic levels of analysis: firm, national and international. Firm entrenchment and business opportunities in the international market depend on human capital that a firm disposes. In the current economic period
53
the main focus is on human capital development, including general education and a staff education analysis at all levels (micro, macro and mezo). Labour migration factor indicating the much debated flaws of the state labour market regulation at the macroeconomic level is in a large part related to the trends of international labour market. The productivity of labour force is greatly affected by the interdependence of average cost of production and manufacturing output. The interdependence is also known as the employee learning curve and shows effectiveness of skill and experience. Scientific literature indicates that when the output is doubled, the unit production costs decrease by 25 percent. It is discussed how the international labour migration will affect human capital in countries of different economic development (high, medium, low) and the main macroeconomic indicators. Therefore, the purpose of the paper is to analyze the changes of human capital in the global labour market and its role in the development of Lithuanian economy at present conditions.
Methodology. There were applied several research methods selected to reach the aim of the paper: analysis of scientific literature, general and logical analysis, induction, deduction, method of comparison and generalization and abstraction, statistical comparison and graphical analysis of human capital of Lithuania’s and European Union member states’ labour market.
Results. The research showed factors and tendencies of changes of the global labour market human capital; these are described and analyzed in detail in the paper. The main statements of the research are based on statistical data analysis and international comparisons of the structure of global labour market, operating trends and human capital development factors.
Practical implications. The indicators distinguished in the research can be applied to analyze empirical data of global labour market. The results of the research may be useful to prepare evaluation of Lithuanian economy development possibilities.
Value/originality. The originality of the article is that the analysis of global labour market human capital factors and its impact on changes in the country's labour market and economy is based on statistical methods.
Keywords: international labour migration, labour market, economics of immigration, human capital.
JEL Classification: F22, F66, J15, J24. Paper type: Research paper.
ASSESSING COMPETITIVENESS OF LITHUANIAN CITIES
Renata Činčikaitė, Narimantas Paliulis Vilnius Gediminas Technical University, Lithuania
Competitiveness issues are comprehensively analysed by different researchers from various
perspectives. Most frequently the concept of competitiveness is analysed from the production or service, company, economy, urban, regional and national perspectives. However, the analysis and assessment of urban competitiveness is rather scarce (particularly among Lithuanian scientists). In many studies urban competitiveness is approached by comparing one city with another by various indicators or aspects. However, uniqueness of the city, the city strategy and cooperation among cities as well as other aspects are not assessed.
Many questions arise while analysing and assessing cities, one of the key questions – why manufacturing and services as well as other sectors flourish in certain urban areas and the population feels comfortable, whereas totally opposite tendencies are observed in other cities. What does the concept ‘a competitive city’ mean? What are the decisive factors which determine urban competitiveness?
In Lithuania strategic plans are developed, aiming to increase competitiveness of a city. Sub-national authorities manage and control different factors and use levers determining competitiveness of individual factors. Nevertheless, the concept of urban competitiveness is not
54
uniformly defined, factors that determine competitiveness of a city are not unanimously identified, none uniform urban competitiveness evaluation model is established. The article introduces methodological guidelines of the urban competitiveness assessment model, developed by the authors, based on the results of theoretical and empirical assessment.
Purpose – to conduct a complex assessment of Lithuanian urban competitiveness. Methodology: the analysis of the concept of urban competitiveness and urban competitiveness
assessment problems and establishing the city competitiveness assessment model involved a systematic and comparative analysis of scientific literature; while the study on applicability of the urban competitiveness assessment model was based on expert analysis and application of mathematical and statistical methods.
Results – the article introduces the assessment of Lithuanian urban competitiveness by applying a complex competitiveness assessment model developed by the authors.
Practical implications. Municipal governments, without having the urban competitiveness evaluation methodology, can not identify in detail problematic areas of the city, justify the choice of development policies, efficiently use resources, and most importantly, maximally ensure the well-being of the city population. The recent methodologies applied lack complexity, often the measurement and comparison is made between individual indicators; however, this analysis does not reveal the total competitive situation of a city. The scientific literature emphasizes that the city's competitiveness must be analyzed and evaluated on regular basis; otherwise it will not be possible to evaluate the changes and factors affecting those changes. This is another reason why it is necessary to have a unified methodology for assessing and comparing urban competitiveness. The authors emphasize that a city can not be competitive in all areas, it must have advantages; however, having advantages in all areas is not possible.
Value/originality. The competitiveness assessment methods found in scientific literature can be grouped into: econometric, non-econometrtic - qualitative and mixed that combine previously specified methods. The authors, having conducted the analysis of urban competitiveness assessment methods, will introduce a complex urban competitiveness assessment model and provide the empirical study of the aforesaid model based on Lithuanian cities.
Keywords: a city, urban competitiveness, assessment of urban competitiveness, urban competitiveness models.
JEL Classification: G18, O11, O18, P43, R11, R51, R58. Paper type: Research paper.
THE POTENTIALS FOR USING OF METHODS OF COMPETITIVE
INTELLIGENCE IN THE SECTOR OF RAILWAYS
Vaidas Gaidelys Kaunas University of Technology, Lithuania
The sector of railways plays a very important part in economy of the most countries of the European Union. Usually such companies are known as the largest employers also taxes payers in the country, consequently their importance is really great. It is also noticed that the companies, which belong to the sector of railways compete in the market with the companies of other sectors of transport. That is why the matter of planning and implementing of the methods of competitive intelligence has taken on a special topicality as one of the ways to get a competitive advantage in the market. Usually to frame such methods on one‘s own is a very difficult task for business organizations, so they apply for help to the companies, which provide them with such service. However it is necessary to remark that competitive intelligence is a continuous process with no interruption and only in this circumstance it is possible to expect the positive results. In our opinion, this process should be started with framing of the methods.
55
The purpose of the article is to select and assess the appropriate methods of competitive intelligence for the sector of railways.
The methods of the research are systematic comparative and structural analysis of academic economic literature, logical analysis, qualitative and quantitative analysis.
The results: While selecting the methods of competitive intelligence for the sector of railways a close
collaboration between specialists of competitive intelligence and experts in the sector of railways is necessary.
The methods of analysis of competitive intelligence are oriented towards gaining of a competitive advantage but not all of them are effective ones to be used for assessment of the companies in the sector of railways.
Such primary factors as a right attitude of the top management of the sector of railways towards innovations, their initiative and consciousness help to take the first step towards successful use of the methods of competitive intelligence in the companies of aforesaid sector.
The top management directing the companies of the sector of railways often finds it difficult to assess the peculiarities of use and practicing of the methods of competitive intelligence compared with traditional methods, which are used in business.
In order to select properly the methods of competitive intelligence, which would be appropriate for the sector of railways the special experience and preparations are necessary.
A practical implication is the use of the methods of competitive intelligence in the sector of railways.
Value/originality. This is one of the first articles about application of methods of competitive intelligence in the railway sector.
Keywords: the sector of railways, competitive intelligence, the methods of competitive intelligence.
JEL Classification: F23, F02, F44. Paper type: Theoretical paper.
ECONOMIC AND SOCIAL DISPARITY DEVELOPMENT WITHIN
REGIONAL DEVELOPMENT OF THE SLOVAK REPUBLIC
Jozef Habánik, Ján Kútik, Peter Hošták Alexander Dubček University of Trenčín, Slovakia
Purpose. Regional development issues play an important role in the policy agenda of European Union countries, including Slovakia. Persistence of regional disparities impedes ability of a country to promote economic growth and social cohesion while regional development can be consider as a key determinant of economic development and living standard improvement. Slovakia is a country with very visible disparities in the development of its regions driven by range of factors that include degree of economic, social and structural transformation, geographical conditions and demographic trends. The purpose of the study is to employ different measures of regional disparity in order to empirically analyze set of chosen social and economic indicators that provide insights about current situation in the individual higher territorial units in Slovakia.
Methodology. Study provides extensive discussion and assessment of various measurement concepts of regional disparity such as the coefficient of variation, the adjusted Gini coefficient and the population weighted coefficient of variation. Time-series analysis provides basis for identification and comparative analysis of converging/diverging regions. Study uses statistical
56
indicators of regional development selected for their representativeness, verifiability and methodological consistency. Study is consistent with the group of forty five indicators assembled by the European Union for the purpose regional development measurement. More specifically study employs measures such as gross domestic product, average monthly wage, gross domestic product per capita, foreign direct investment, expenditures on research and development, unemployment rate and productive age population as a percentage of total population. In terms of territorial levels study follows the Nomenclature of Territorial Units for Statistics (NUTS) standard, more specifically analysis is conducted at the NUTS III classification level as implemented by the Statistical Office of the Slovak Republic in close cooperation with the Eurostat.
Results. The findings of this study confirm negative trends in terms of growing regional disparities among regions. Study also identifies key determinants of regional disparities in Slovak republic, most notably foreign direct investment inflow, growth of local medium and small enterprises and flow of funds into research and development activities.
Practical implications (if applicable). Study provides policy makers with set of indicators that measure recent trends in the regional disparity among higher territorial units in Slovakia and identifies factors that determine observed disparities. Findings of the study are also directly implementable into the academic curriculum of various public administration courses. Last but not least, dissemination of results via academic channels (conference, academic journal) is intended to motivate and assist future research in the field of regional development.
Value/originality. Study evaluates applicability of various empirical measures of regional disparity to local conditions of Slovakia. Study provides valuable insights about time series development of analyzed regional development indicators. Outcomes of the study provide unique set of regional disparity measures for higher territorial units of Slovakia and identify converging/diverging regions.
Keywords: Social disparities. Economic disparities. Regional development indicators. Variation coefficient.
JEL Classification: H30, R11, R50. Paper type: Research paper.
IMPORTANCE OF ROAD INFRASTRUCTURE IN THE ECONOMIC
DEVELOPMENT AND COMPETITIVENESS
Eva Ivanová, Jana Masarova Alexander Dubček University of Trenčín, Slovakia
Purpose. The main goal of the presented paper is to highlight the effects of road infrastructure development on the economic growth and competitiveness of Slovak economy. We focused on the quality of the road network in the Slovak Republic, in particular motorways and expressways. It is the density and quality of the road infrastructure which primarily determine the competitiveness of the country. The paper also addresses the issue of expenditures and sources of funding related to the road infrastructure in the Slovak Republic. In addition, we analyze the road infrastructure in relation to competitiveness and foreign direct investments (FDI) inflow to the Slovak Republic. Moreover, we look at the road infrastructure in the relation to gross domestic product (GDP) and foreign direct investment.
Methodology. We used the method of time series and correlation method when dealing with the subject matter and when analyzing the effects of road infrastructure development on the economic growth and increase of competiveness of Slovak economy.
The method of synthesis is used to draw conclusions and the method of comparison is used to compare general tendencies in the areas of road infrastructure, GDP and FDI. We use the time series analysis from 2000 until 2011 to examine the issues. Based on the analysis, we underscore
57
the correlation between the GDP development and road infrastructure expenditures on the one hand and the inflow of foreign direct investments to the Slovak economy and its competitiveness on the other hand.
Results. The road infrastructure is one of the most important factors stimulating the economic development and competitiveness of countries. The road infrastructure comprises all types of roads in a given area, including various structures. The density of the road network in the Slovak Republic is relatively high, but it is characterized by low qualitative parameters. However, insufficient number of motorways and expressways is of major concern. The expenditures made on roads used to have an increasing tendency, but the economic recession made the expenditures lower. Enhancing the road network quality is primarily financed from the state budget, loans and EU funds. Other sources include the tolls collected as well as private sources (public-private partnerships). The development of road infrastructure is closely linked to the gross domestic product and foreign direct investment growth.
Practical implications. The outcomes and conclusions of this paper can serve as a basis for further university research projects. The conclusions can further contribute to broadening of theoretical knowledge dealing with questions of competitiveness.
Value/originality. This paper is original and is a result of applying scientific methods such as analysis of time series and correlation analysis. It is an outcome of scientific project conducted by Department of Economy and Economics, the results of which has not been published yet.
Keywords: Road infrastructure, expenditures made on roads, resources to fund road infrastructure, gross domestic product, competitiveness.
JEL Classification: H54, R42, O18. Paper type: Research paper.
CIGARETTES EXCISE DUTIES IMPACT ON ECONOMIC INDEXES
Indrė Jucaitytė, Indrė Tautkutė-Stankuvienė, Vytautas Kubolis Kaunas University of Technology, Lithuania
Purpose. The main purpose of this paper is to assess consequences on economic system of
Lithuania caused by change of cigarettes excise duties as well as their impact on economic indicators of Lithuania.
Methodology. The study will be carried out using statistical information obtained from various sources. The data will be processed using Excel and SPSS packages. The study is based on a graphical, statistical, comparative, and regression analysis.
Results. The paper focuses on the impact of fluctuation of excise duties on economic indexes. The main indexes which will be evaluated in the paper are the following: price, inflation, consumption, budget income and illegal sales.
The work highlights the problem that the impact caused by change of excise duties is not being thoroughly investigated. It evaluates only some of the indicators, although the change of excise tariff has a decisive influence on economic performance.
This paper will look into the economic consequences of change rates of excise duty on a larger scale. This article will also assess impact of the change of cigarette excise tariff on economic indicators of Lithuania such as the price of cigarettes, consumption, illegal trade, inflation and the budget balance.
The paper consists of three main parts. Practical implications. The results received from the analysis of cigarette excise rates on
economic indicators suggest that the change of cigarette excise has a decisive influence on the price of cigarettes, consumption, inflation, illegal trade and budget balances.
58
Nevertheless, evaluation of illegal trade and budgeting is difficult because the data is not sufficient for this analysis, and in order to better analyse the impact of changes of excise duties on these indicators further investigations ought to be carried out.
Value/originality. The results of studies that are presented in this paper would allow bettering selecting more appropriate excise tariffs.
Keywords: excise duties, impact on economic indexes, exchange of rates. JEL Classification: A10, A11, O10, O11, O40. Paper type: Research paper.
SCENARIO PLANNING ROLE: CASE OF BALTIC NON-LIFE INSURANCE
MARKET
Darja Kalinina, Irina Voronova Riga Technical University, Latvia
Purpose. The goal of the research is to investigate the role of the scenario planning methods
in future development of Baltic non-life insurance market. Methodology. In order to achieve the stated objective the authors use a theoretical and
methodological analysis of the scientific literature, analytical methods, experts and priority charts methods, and comparative, statistical and modelling methods with the purpose to study the elements and functions of the scenario planning and critical stress testing.
Results. The main problem resolved during the research was to interconnect the scenario planning methods possible impact on managing insurance market’s development. The stated problem was solved by performing the special description and tool that can be used by non-life insurance companies.
Practical implications. The authors have analysed the theoretical basis of scenario planning methods and have prepared financial analysis and scenario planning tool for non-life Baltic insurance market’s development evaluation and possible future outcomes investigation with the main aim to demonstrate practical issues of scenario planning. In order to test scenarios that were discovered using financial analysis and scenario planning tool the authors also integrate the approach of critical scenario testing that make simulations of possible future outcomes.
Value/originality. Baltic non-life insurance market’s development volumes are rather high therefore financial stability and solvency of it should be analysed, managed and evaluated. Baltic insurance market faces many challenges because of Solvency II framework requirements that should establish new rules for risk evaluation in order to improve the solvency of insurance companies and protect the interests of policyholders therefore it is crucial to evaluate and manage each insurance company’s development. Since Solvency II regime implementation requires stable insurance market establishment it is important to plan and analyse the possible scenarios of insurance market development. The assessment of Baltic non-life insurance market can be performed through the strategic organizational planning - scenario planning methods. Scenario planning methods introduce possible long – term future outcome about stability and health of non-life insurance market’s participants’ using simulations.
Keywords: scenario planning methods, Baltic non-life insurance market, Solvency II directive, risk management
JEL Classification: G22 - Insurance; Insurance Companies. Paper type: Research paper.
59
EXPLORING THE POTENTIAL OF THE CREATIVE INDUSTRY IN THE TRENCIN REGION
Rolf Karbach, Sergej Vojtovic Alexander Dubcek University of Trencin, Slovakia
Purpose. The main purpose of the paper is to assess the economic potential and importance of
creative industry in terms of the social and economic growth, GDP structure formation and the employment in the Trencin region. Additionally, the paper attempts to identify whether the management of the creative industry companies and local government of towns and municipalities recognise the importance of the creative industry. In order to achieve this goal, a quantitative analysis of companies active in the field of creative industry was conducted and the structure of its productive activities was defined. Next, the current situation and trends in the field of creative industry were analysed and the potential for further improvement and development was determined. In addition, the current importance and impact of creative industry on the social and economic development and the employment in the region were determined. Moreover, trends and problems in the development of companies active within creative industry and the forms of cooperation in the process of solving these problems with other economic subjects, customers and competitors and governmental authorities were defined.
Methodology. Methodology used in this paper is based on empiric research conducted among the companies active in the field of creative industry. The main method of the research is a structured interview with the members of management in this field. Simultaneously, traditional scientific methods of comparison, analysis, induction, deduction and scientific methods of working with empirical data are used.
Results. The results and findings include the identified structure of economic activities of creative industry companies, scope of their entrepreneurial activities and economic turnover, recognition of the importance of creative industry for the regional social and economic growth by the management of the creative industry companies as well as the management of local government of towns and municipalities.
Practical implications. The findings are used to define the current shortcomings, to propose improvements, and thus to enhance the development of creative industry. In addition, the results can be employed to identify economic and institutional measures in order to increase the potential of creative production and its share in the GDP, regional employment and general development of the region. Last but not least, the findings are essential in identifying the role and the missions of both the state and the local government institutions in the creative industry development and its impact on the economic growth of the region and employment.
Value/originality. The value and originality of the paper are represented by the results and findings obtained from the process of exploring the potential of creative industry in the Trencin region and identifying its current state in the structure of economic production and employment.
Keywords: creative industry, economic potential, economic development, employment. JEL Classification: E22, O31, L8, Z1, Z11. Paper type: Research paper.
60
SUSTAINABLE ECONOMIC DEVELOPMENT IN THE POLISH DUO-REGION POMERANIA
Grażyna Karmowska, Miroslawa Marciniak West Pomeranian University of Technology, Poland
Purpose The aim of paper: a determination the degree of the social-economic development of
districts of duo- region “Pomerania”, created from two seaside regions: province of West Pomeranian and province of Pomeranian.
Methodology There are used methods of descriptive statistics and methods of the multidimensional comparative analysis (the measure of aggregation and the cluster analysis).The choice of variable was based on an assumption, that diagnostic variables have a weak correlations, high degree of the variance and the essential information value. To characteristics of the economic development of the district are used following variables: total income for one inhabitant, expenses for one inhabitant and property investments for one inhabitant. The social development determined: population growth, balance of the emigration, index of unemployment, rate of habitants in pre-productive age and rate of residents beyond retirement age. Then carried out the normalization of variable diagnostic using method unitization and taking into consideration their influence on the research subject, division on stimulants and destimulants. By next step was calculation for each analyzed object (administrative district) in each dimension (economic and social) the synthetic aggregate index. Based on these measures became the established the linear hierarchy of objects (ranking objectives) used variability range of a calculated synthetic indexes. Results of the ranking served for determining the social potential and the economic potential of every district in examined years (2005 and 2011). Finally all districts are divided according to the size of potentials on 4 groups: sustainable (balanced socially and economically), balanced socially, balanced economically, unstable. Based on the results is stated that none of districts has been classified to the sustainable group in each of analyzed periods. The next step of research work was performed the cluster analysis with k-means algorithms at the division on 4 classes with used the method of the classification of distances with the fixed interval. Based on receiving results (clusters) is done the classification of objects according to the degree of development.
Results. Outcomes of the ranking achieved by applying two taxonomical various methods weren't equal. But none of the districts was classified to the group of the sustainable development in each of analyzed periods. The results of both methods in two cases prove tendencies similar (growth of the unbalanced group and fall in the sustainable group (both socially and economically)), however in the other cases demonstrate opposite tendencies. Classification of districts made by the cluster analysis is pointing at the development of municipal district towards the sustainable development what seems to confirm the popular views to this subject. Diversifying outcomes of the ranking and evaluations of districts prove for needs to deepen analysis and to find objective causes of this occurrence.
Practical implications. The presenting methods would be apply to plan and control of the regional politics according to the sustainable development.
Value/originality. The original research work. Keywords: sustainable development, region, taxonomic method. JEL Classification: 011. Paper type: Research paper.
61
SLOVAK REPUBLIC IN CONTEXT OF DISPARITY DEVELOPMENT
Eva Koišová Alexander Dubcek University of Trencin, Slovakia
Purpose. Many countries try to settle differences between their regions by implementation of
their economic policy. There are various key factors of development for each country, resp. different indicators that also affects criteria selection upon which the regional disparities are to be evaluated. In the paper, author focuses to regional disparities in the development of individual Slovak regions. The aim of paper is to define regional disparities, their reasons and to analyse their development in particular Slovak regions using set of selected social and economic indicators.
Methodology. For this purpose, the multi-criteria method has been used. – cluster analysis. It is a statistic method which forms clusters based upon similarity within the cluster, i.e. region, as well as the major difference between individual clusters. This method is considered to be more precise and than the other ones (e.g. point method) and that’s why it is often used for delimiting of regional homogenity.
Results. The following indicators have been stipulated: unemployment rate, average wages, number of small and middle-size companies, as well as number of entrepreneurs per 1,000 citizens, density of road network, density of highways and speedy-ways. Resulting from analysis of selected indicators, we can confirm that the Bratislavsky Region has been the most developed region within the Slovak Republic for a long time, followed by the Žilinský Region which has approached to Bratislava the most. Košický and Banskobystrický Regions belong to the least developed ones.
Practical implications. Using the paper results, the autor builds on further research activity in the field of Slovak regional development. This activity can be also extended to comparison with neighbouring countries, resp. other ones.
Value/originality. Originality of the paper insists in using the Cluster analysis that enables to form clusters of individual Slovak regions upon their similarity among objects inside the group in the way to differ them from ones inside other groups as much as possible. Comparing dendograms in chosen time periods, we can observe the way the individual regional clusters are changing, resp. whether the disparities are reducing or increasing. The paper contains original outputs resulting from author’s research activity.
Keywords: Regional Disparity. Regional Development Indicators. Cluster Analysis. JEL Classification: R11, C38. Paper type: Research paper.
THE INTERACTION BETWEEN CORPORATE SOCIAL RESPONSIBILITY
AND COMPETITIVENESS DURING THE ECONOMIC DOWNTURN
Rima Kontautienė, Valentinas Navickas Kaunas University of Technology, Lithuania
Trends in the global economy present new and unexpected challenges for businesses. 2007-2010 economic downturn was determined not only by the world economy or/and the financial crisis, but by the crisis of business maturity also. Being an integral part of the public business must not only consider interests of society, but also actively uphold them. The ability to respond to the needs of society, i.e. the inclusion of social, ethical and environmental issues, not only the pursuit of economic profit in the decision-making process ensures the competitiveness of enterprises. The need for the change of businesses particularly increases during the long-term economic downturn.
62
Purpose is to analyze the interaction between corporate social responsibility and competitiveness of enterprises during the economic downturn.
Methodology The methods of the study are systematic, logical and comparative analysis of scientific literature, synthesis; analysis of statistic indices. Performed analysis and synthesis of scientific literature revealed the positive impact of corporate social responsibility on the competitiveness of businesses during the economic downturn. In order to examine the importance of enterprise’s ability to respond to the needs of society for enhancing the competitiveness of enterprise in global economy systematic, logical analysis of scientific literature was performed. In order to estimate the impact of economic downturn on the competitiveness of business comparative analysis of statistic indices was performed.
Results By analyzing the concept of competitiveness the authors of paper came to the conclusion that in the global economy the competitiveness of enterprises is liked increasingly to their ability to respond to the needs of society.
The economic downturn negatively affects the financial situation of enterprises, the productivity, motivation of employees and etc. This reduces the competitiveness of businesses in the global and local markets.
According to this study, the integration of corporate social responsibility into business functions, goals, and strategies ensures business innovation, creates a sympathetic environment, increases the confidence of investors, stakeholders, employees and other parts of the public, and that positive impacts on the competitiveness of businesses during the economic downturn.
Value/originality The paper presents theoretical aspects of competitiveness of enterprises as ability to respond to society’s needs. The research made shows that enterprises’ competitiveness has assumed new meaning. The competitiveness of enterprises is determined by satisfaction of society’s needs.
By analyzing the interaction between corporate social responsibility and competitiveness the authors of paper found that within the given period the social and economic factors (and the consequences) make play not synchronically and show in social inertia. This means that, in spite of the declining of considerable volume of production, sales, profits and other economic indicators, socially responsible enterprises will continue to maintain (not stand off) the staff for some time, it teaches, retrain, etc. There is a waste even of the right of the law to stand off the part of the company‘s staff.
Keywords: competitiveness, corporate social responsibility, economic downturn, employee motivation.
JEL Classification: A13, E32, M14, M21. Paper type: Theoretical paper.
ISSUES AND CHALLENGES OF THE US-EU ECONOMIC RELATIONS
Marcel Kordoš Alexander Dubček University of Trenčín, Slovakia
Purpose. The article deals with the mutual problematic US-EU trade issues within the
transatlantic economic relations. The paper is focused on problematic aspect analyses such as the US and EU common trade agenda, WTO dispute settlements regarding the most divers’ trade aspect issues – antidumping, countervailing procedures trade wars and so on. The aim of the paper is on the basis of EU and US trade policies and their WTO’s dispute settlements analysis to find out weather and to what measure the problematic trade issues between the US and EU can affect their economic cooperation in the global system of international economics. The hypothesis is set that the problematic US-EU trade issues such as trade wars and antidumping and countervailing dispute
63
settlements on WTO have no negative impact on the US-EU economic relations and collaboration in world economy.
Methodology. Ways of synthetic and analytic methods will be used in the paper. The methods of information analysis, comparative analysis, analysis of data and facts from scientific and professional publications, periodical and no periodical press as well as internet sides will be primarily used and examined. Subsequently the analysis will lead to synthesis and prognosis by means of abstraction method eliminating the less important factors in order to set general statements and opinions.
Results. By evaluating the transatlantic economic relation we can claim that in spite of some complicated trade issues basically these relations have good and stable background to bring positive aspects and contributions for both US and EU economies in order to enhance their competitiveness in the international economics system in terms of turbulent ongoing global processes to face to and compete with other economic blocs and subjects.
Practical implications (if applicable). Acquired knowledge from the paper will be offered to the Ministry of Foreign Affairs of Slovak Republic where it will be utilized as important guidelines in the area of economic diplomacy. This paper is intended as an outline for the Slovak trade representatives dealing with the international trade policy in territories such as EU and USA. On the other hand the paper output will help the Slovak governmental and private corporations within their export promotion strategy policy formulation how to enter the US and EU markets successfully by means of using the transatlantic business opportunities.
Value/originality. In the paper we try to find out weather and to what measure the problematic trade issues between the US and EU can affect their economic cooperation in the global system of international economic relations. The point is that USA and EU are the main engines of the international economics system and the overall world economic growth and quality of life depends on their development of which essence is the US-EU economic partnership within their foreign trade relations.
Keywords: antidumping and countervailing procedures, dispute settlements, foreign trade policy, international economics, World Trade Organization (WTO).
JEL Classification: F13, F42, F51. Paper type: Theoretical paper.
THE EVALUATION OF THE IMPACT OF FOREIGN DIRECT
INVESTMENT ON LITHUANIAN ECONOMY USING LAG-ANALYSIS
Aistė Kuliavienė, Jolanta Solnyškinienė Kaunas University of Technology, Lithuania
Purpose. To determine the certain impact of foreign direct investment on Lithuanian GDP through economic activities using lag-analysis, which let to evaluate the impact on the particular period of time.
Methodology. The most important aspect for the host country is how quickly FDI starts to affect country‘s economy as the impact of FDI occurs after a certain period of time (lag) following the investment actions. Using the lag determination, statistical clustering and visualization methods there were investigated and were pointed out Lithuanian economic activities while attracting FDI started to increase GDP rapidly.
Results. There was identified the optimum size of lag (certain period of time). Furthermore, there were presented the estimates and the proposals of what economic activities development government should focus on, as one of the most economically perspective. The research showed that the impact of FDI was likely to occur rapidly in these economic activities: financial
64
intermediation, manufacturing, transport and telecommunications - these activities should be given appropriate attention from Lithuanian government.
Practical implications. The issue of foreign direct investment impact is one of the most urgent, as it is believed to enable the country to attract foreign capital and it let to increase the country's economic growth technological and political development of the country. There had been done many studies analysing the impact of foreign direct investment on country's economy and particularly on Gross Domestic Product (GDP). Such studies were made by Alfaro (2003), Blonningen and etc (2006), Johnson (2006), Kornecki (2007), Qaiser and etc.(2011) and by many other scientists.
Value/originality. Usually scientists use just correlation-regression analysis to evaluate a certain impact but there hadn‘t been done any researches in Lithuania analysing FDI impact using not only correlation-regression but also lag-analysis method. Due to that, there was created the model, showing when the certain FDI started to influence country’s GDP.This research not only revealed a new study of economical- statistical approach but also distinguished the most useful economic activities in creation of the country‘s economical welfare.
Keywords: foreign direct investment, lag analysis, impact, gross domestic product. JEL Classification: F4, F43. Paper type: Research paper.
TECHNOLOGICAL COOPERATION BETWEEN SCIENTIFIC
AND RESEARCH INSTITUTIONS AND COMPANIES AS THE CONDITION OF GROWTH OF INNOVATIVENESS
AND COMPETITIVENESS OF POLISH ECONOMY
Irena Łącka West Pomeranian University of Technology, Poland
Purpose. The purpose of this paper is to show the importance and benefits of technological
cooperation between scientific and research institutions and enterprises in Poland for innovativeness and competitiveness of companies and the economy.
Methodology. For the purposes of the article the methods of analysis indicators to measure innovativeness and competitiveness were used, using Central Statistical Office’s publications, innovativeness rankings of European Union countries, the European Innovation Scoreboard reports and rankings of competitiveness of economies. This allowed to determine the level of innovativeness and competitiveness of Polish enterprises and the state of their linkages with the science and research sector. The method of case study enabled to present the examples of technological cooperation between scientists and entrepreneurs.
Results. The authoress, with analysis of innovativeness and competitiveness of Poland and its enterprises, demonstrated the need to intensify the technological cooperation between science sector and economy. European Innovation Scoreboard data indicates that between 2004 and 2011 Poland has gone from a country belonging to the "catching up countries" to "moderate innovators". During this period, Summary Innovation Index (SII) varied from 0.230 to 0.296, while SII for the EU average (EU-25 and EU-27) varied from 0.460 to 0.539. Comparing the values of this indicator, there is a low level of Polish innovativeness compared to other EU countries, especially to the leaders of innovativeness. Experts suggest that the main causes of low innovativeness of the Polish economy are the relative weaknesses in the system of research and development, limited openness of the system to cooperate with enterprises, too weak and unstable linkages between science and the economy, too small number of innovative companies and innovators as well as small potential of intellectual property. An opportunity to increase innovativeness of enterprises and create strong
65
linkages between science sector and industry is technological cooperation between Polish companies and scientific and research institutions. It provides many benefits to its participants and helps to reduce the barriers of innovativeness for all participants in the process.
Technological partnership should become the development strategy of Polish enterprises in a changing global economy. It allows enterprises to obtain: access to the most recent knowledge, reduce expenditures on research and development and the risk of innovative project, get developmental opportunities. The case studies presented in the article revealed the impact of technological partnerships on the innovativeness and the competitiveness of companies in Poland.
Practical implications. Described in the article, the examples of partnership between scientists and entrepreneurs in the area of the knowledge and technology transfer, and their results may have a positive impact on increasing the tendency to create linkages between these entities in the innovation processes.
Value/originality. The basis for this article were the results of own research on technological cooperation between scientists and entrepreneurs in Poland between 2004 and 2011.
Keywords: innovativeness, competitiveness, technological cooperation, R&D sector, industry. JEL Classification: O31, O33. Paper type: Research paper.
CONCEPTUAL STRUCTURE OF R&D PRODUCTIVITY ASSESSMENT
IN PUBLIC RESEARCH ORGANIZATIONS
Rasa Lalienė, Algimantas Sakalas Kaunas University of Technology, Lithuania
Purpose. The purpose of this article is to develop conceptual structure of research and development (R&D) productivity assessment in public research organizations as there is an evident lack of theoretical and empirical studies analyzing productivity of R&D produced by public organizations.
Methodology. Research methods – comparative and systematic analysis of scientific literature. Results. Paper presents the concept of R&D productivity, defining R&D efficiency and R&D
effectiveness segments. Second part of the paper presents the analysis of the conceptual models of R&D productivity assessment. In summarizing the variety of conceptual models for productivity assessment of organizations and research centres engaged in R&D activities, the following features may be outlined:
1. The concept of productivity in most methodologies (Coccia; Lin & Bezeman; Cincera at al) is based on assessment of the ratio of R&D resources to achieved R&D results. They aim to comprehensively assess the available resources, processes and results that were achieved.
2. Some models (Leitner & Warden) highlight the impact of one of the resources, such as human capital, on the results achieved. In this case, an in-depth assessment of productivity is achieved in a certain area, but the complexity of the research is lost.
3. The main shortcoming of the analyzed conceptual models for R&D productivity assessment is insufficient attention to organization’s internal and external environment, while the latter often determines the level of the results and the depth of results deployment. Environmental assessment is particularly important in developing countries, including Lithuania. These countries still have multiple elements of centralized governance that prevents efficient R&D activities, determines poor R&D infrastructure and environment with low research production intensity.
Finally, there is the developed conceptual structure of R&D productivity assessment presented.
66
Practical implications. The developed conceptual model of R&D productivity assessment in public research organizations is relevant both from scientific and practical point of view. Since the model integrates the major segments of R&D activity and its surrounding environment, it serves as a mean to understand and interpret the concept of R&D productivity itself. The model also allows to identify R&D productivity assessment criteria and to develop R&D productivity assessment model for public sector.
Value/originality. The conceptual model of R&D productivity assessment is constructed on the systematic approach, as the R&D productivity is influenced by both internal R&D mechanisms within the organization and interaction with the external environment. These processes form and include the system of R&D activities which creates preconditions for efficient R&D activity and full use of scientific potential. The presented model includes two elaborated dimensions – R&D efficiency and R&D effectiveness, linking them with the internal and external environment of the research organization that wants to assess its R&D productivity.
Keywords: R&D productivity; Research organizations; R&D environment. JEL Classification: O30, O32. Paper type: Theoretical paper.
TRANSFORMATION OF INTERNATIONAL BUSINESS SERVICES
INDUSTRY IN LITHUANIA
Neringa Langvinienė, Jurgita Sekliuckiene Kaunas University of Technology, Lithuania
The growing interest to the international trade in services is obtained in recent years researches (Dixel, et al., 2008; Love, Lattimore, 2009; Sáez, 2010). The attention was enlarged by liberalization of business service globally. The liberalization of services encouraged the foreign services providers to look for possibilities to enter the new markets and internationalize their activity (Hertel, et al. 1999; Karsenty, 2000; McGuire, 2002; Sorensen, 2010). The specifics of international services are still scarcely discussed in the scientific literature, because a service as an object for trade internationally was identified later (Jansen, 2008; Love, Lattimore, 2009; Spring, Araujo, 2010). Besides that, nobody discuss that services are specifics and not all of them could be tradable abroad because of characteristic, nature of services, a lack of competitive advantages before local providers, etc. (Bhagwati, 1987; Sáez, 2010; Cattaneo, et al.; 2010). Foreign direct investors entering to Lithuanian services market brought know-how, experience, technologies in the specific business services sector, such as business consultations, audit, royalties and licenses fees, communication and other professional services; and this was a stimulus for local services companies to revise their resources and to look for opportunities in competing with global players of international services market.
Purpose is to disclose the changes of Lithuanian international business services industry comparing to EU27 countries.
Methodology is comparative analysis of Lithuanian and EU countries international business services: structure of international services trade, dynamics of trade, participation of foreign companies in these services market, concentration of the market (ration according Hirschman-Herfindahl index), foreign companies competitiveness in the Lithuanian market (ratio according A.T. Kearney), and other.
Results are grounded on the comparative analysis of statistical databases, such as International trade statistics by WTO, Eurostat, OECD, and National Statistics. Findings showed that Lithuanian international business services export structure and trends in changes differs from the average of EU. A structure of international business services is more specific, as transport makes the largest part of export from Lithuania. Such class as travel and ICT also plays a role in the
67
export shape. The grow of services export is related more to the core services that makes the largest part of export, than to the level of grow of services of EU (personal, cultural, relaxation services, IT and other services are growing more rapidly than in Lithuania). Foreign investors in Lithuania are more successful in ICT, other business services. The highest competition is in the travel industry. Personal, recreation and cultural services sector is more favorable for local providers. Financial sector is saturated by other foreigners, so investors should compete with others global players and think how take over their market.
Practical implications are related to participators in international services business thinking about ways how to compete in specific services sector, to direct foreign investors into Lithuanian services market.
Value/originality of the paper is evaluated the specifics business services industry related to international market, comparing to the mean of EU, express of transformation of these services comparing to other member of EU.
Keywords: international business services, international trade, services industry, Lithuania. JEL Classification: F23, O14, R11. Paper type: Research paper.
DETERMINATION OF HUMAN CAPITAL VALUE IN MACRO LEVEL
Žiedūna Liepė, Algimantas Sakalas Kaunas University of Technology, Lithuania
The productivity of value creation process is determined not only by the continuous process of change, but also by the compliance of the factors involved in this process, therefore the evaluation of these factors is one of the most important economic challenges. Human Capital (HC) is one of the most important factors of value creation, despite this, today there is no one methodology for the economic HC evaluation.
The managerial aspect of HC evaluation problem is researched quite widespread (Mayo, 2001; Baron, Armstrong, 2007; Murray, Efendioglu, 2007; Schwarz, Murphy, 2008; Yeh, 2009; AL-Ma‘ani, Jaradat, 2010) revealing both the quantity of HC and education, its rate of utilization, the aspects of motivation and other factors in the enterprise level. However, the economic evaluation conception of this indicator is missing, especially in macro level. If the first attempts of integrated evaluation in enterprise level are found in proceedings of Ch. Scholz et al. (2004), hereof in macro-level practically there is no works that would express the HC in terms of value.
Purpose of the paper is to present an integrated technique of HC value in macro-level determination and to verify it by example of EU countries.
Methodology consist of detailed review of scientific literature sources, comparative analysis and synthesis, data browsing method using multi-factor indices analysis, correlation analysis.
Results. During the accomplished research there was determined the technique of HC value constituents informational provision and calculation, which allows to calculate the monetary expression of the HC value. Calculations allowed identifying the value of HC of the 27 EU countries in millions of Euro, which unclosed an opportunity to bring together the country's main factors of productivity (GDP, HC, basic and revolving funds value, material value) into a uniform measurement system, which opens new opportunities of their analysis and forecasting.
Practical implications. According to the results there was carried out the grouping of EU countries based on the logic, which is allied to the HC system clustering by the application of indices method. Although the appliance of this technique leads to different performance complexity, different appropriate amount of data, lack of information, but having in mind the available data and its’ reliability, the application of this technique in macro level can give good results.
68
Value/originality. Summarizing the accomplished researches in the sphere of HC evaluation in micro (Low, 2000; Sveiby, 2002; Bontis, Fitz-enz, 2002; Flamholtz, Kannan-Narasimhan, Bullen, 2004; Wang, Spitzer, 2005; Wright, 2006; Scholz, Stein, Muller, 2007; Fitz-enz, 2009) and macro (Acemoglu, 2001; Noorbakhsh, Paloni, Youssef, 2001; Wei, 2003; Le, Gibson & Oxley, 2003; Scholz, Stein, Bechtel, 2004; Baier, Dwyer and Tamura, 2006) level, there were identified four constituents of HC value in macro level: HC value base, HC value depreciation, HC value recovery and HC value alteration, due to organizational factors and motivation.
This paper presents the technique of individual HC value constituents’ calculation and the results obtained during the comparative analysis of EU countries HC system.
Keywords: Human capital (HC), Human capital value, Human capital evaluation. JEL Classification: I21, M53, O32. Paper type: Research paper.
THE IMPACT OF ROAD INFRASTRUCTURE ON THE ECONOMIC LEVEL OF THE SLOVAK REPUBLIC REGIONS
Jana Masárová, Eva Ivanová Alexander Dubcek University of Trencin, Slovakia
Purpose. The main purpose of the paper is to refer to the impact of road infrastructure on the economic and social level of the regions in the Slovak Republic. Theoretical basis is the level of road infrastructure in the regions of Slovak Republic disaggregated by category of roads. The economic performance of the Slovak Republic regions we measure using the gross domestic product per capita, unemployment rate and the average monthly wage. We examine the impact of road infrastructure on the economic level of regions by the scoring method.
Methodology. We use the method of analysis, synthesis, comparison and scoring method in this paper. Method of analysis was employed to analyse the road network and the economic level of the regions of Slovak Republic. The method of comparison was used for comparing the road infrastructure and economic level in the regions of Slovak Republic. The method of synthesis was used to draw conclusions resulting from the analysis. The scoring method is used for the studying the impact of the road infrastructure on economic level in the regions of Slovak Republic. Data used in the analysis were obtained from national and regional statistics.
Results. The development of regions is affected by their available resources. The road infrastructure is one of them and directly or indirectly affects the level of development of individual regions. The road network in the Slovak regions is characteristics of the sharp differences in the total length and density and the length of motorways and expressways. The best level of the roads is in the western part of Slovakia. Similarly the western regions have the highest economic level, especially the region of Bratislava. Using a scoring method, we found that road infrastructure most affects the economic level of the regions of Trencin, Trnava and Bratislava. We also admit influence of other factors on economic level of regions.
Practical implications. Results of this paper can serve as a base for further scientific research work as part of university research projects. Conclusions from the synthesis method are contributing to broadening of the theoretical knowledge in the economic theory and regional economics. From practical point of view these can be used as source for decision making on the regional level.
Value/originality. The paper is original, is the result of scientific research. Keywords: Road infrastructure, regional development, performance of regions. JEL Classification: O18, R11. Paper type: Research paper.
69
THE EUROPEAN MIGRATION FLOW IN A CONTEXT OF DETERIORATION OF ECONOMIC FACTORS: THE CASE OF SPAIN
Antonio Mihi-Ramirez University of Granada, Spain
Vilmantė Kumpikaitė Kaunas University of Technology, Lithuania
Purpose. The aim of this paper is to analyse how current deterioration of economic factors
has affected the traditional migration flow in Europe. The study of the case of Spain, where crisis is being harder, it has allowed us having a higher understanding of changes in the migration flows and its consequences in a European framework.
Methodology. Statistical data about migration have been obtained from the Organisation for Economic Cooperation and Development statistics (OECD) and from the European Commission (Eurostat) to analyse the evolution of the economic factors of the theoretical background and its comparison with the average of the European Union (27 countries EU).
Results. Results have shown a severe deterioration of these factors in the case of Spain, and the same situation but lesser intensity for the average of EU. Thus, the unemployment in Spain increased far above the EU in all period analysed. The drop of standard of living expressed by GDP per capita, the wages and the investment, together with an increasing of taxes and consumer prices have continuously deteriorated the economic situation, especially in the case of countries like Spain. It promotes a negative migration flow that carries with it a higher risk of serious technical and intellectual impoverishment for Spain in the long term that could increase the disparities between European countries.
Practical implications: Authorities should establish mechanisms to maintain and to encourage those favourable economic push and pull factors that are necessary for any country because the loss of population, especially the skilled workers and young people, leads to a deterioration of the economy besides immigration is also important because of a situation of increase the ageing population (Papademetriou & Sumption, 2011) and it does not cause higher unemployment (Heid & Larch, 2012).
Value/originality. Factors that affect international migration under an economics view must be studied very carefully especially when the economic situation is currently going through a difficult period that is changing the traditional migration, bringing new tensions and situations with new relevant effects and consequences. Furthermore, the value of each economic factor is different and it varies over time which leads to different situations that should be cautiously analysed and re-evaluated due to a significant influence of migration on the economic growth (Stulgienė & Daunorienė, 2009).
Keywords: International migration, economic migration, economic factors of migration flow, international economy.
JEL Classification: F22, F63, M00. Paper type: Research paper.
70
THE WAYS FOR THE IMPROVEMENT OF COMPETITIVE ENVIRONMENT AND SOME DIRECTIONS OF ANTIMONOPOLY
REGULATION (EXAMPLE OF GEORGIA)
Nino Mikiashvili, Eka Chokheli Ivane Javakhishvili Tbilisi State University, Georgia
Purpose. The purpose of the study is discussion of the competitive mechanisms on the
example of Georgian economy; study of conditions of monopolistic unions creation and their existence for the improvement of competitive environment, evaluation of specific recommendations for the solving problems identified in the certain sectors. In general, research of competitive mechanisms on Georgian free market is very actual, because such studies are available only from the 90-ies of the twentieth century. Competition policy formation and development issues are mainly considered in three stages: determination of the course of economic reforms, the establishment and functioning of the Antimonopoly Office, Antimonopoly Office cancellation and formation of a new system.
Methodology. In the research were used: analysis, synthesis, economic-mathematical modeling, system analysis and comparison methods. Were considered such indexes, as: Growth Competitiveness Index, Business Competitiveness Index – BCI, Global Competitiveness Index - GCI, New Global Competitiveness Index - New GCI.
Results. Promotion and protection of the principles of free competition for Georgia. Justification of Antimonopoly Office necessity and showing the ways for the improvement of competitive environment. Creation of the competitive environment will make a significant impact on production factors, can promote availability of resources to assist them to reduce the price. The healthy competition will stimulate management methods in the direction of innovations implementation. These processes will ensure economic growth and social welfare. The state can also maximize the impact of competition on economic growth. However, smooth operation of the competitive mechanisms require great efforts and consistent actions.
Practical implications. On the base of research results can be developed concrete proposals that can be taken in account both - the executive and legislative branches of government.
The results should contribute the formation of effective antimonopoly regulation system. Value/originality. The advantages and disadvantages of the competitive environment, some
directions of antimonopoly regulation on the example of Georgia may be acceptable for some of the other post-Soviet countries. There are lack of studies such as this one is, and the work will be original.
Keywords: Competition, monopoly, regulation. JEL Classification: F41. Paper type: Research paper.
CONTAINERISED CARGO SHIPMENTS: “CHINA – BALTIC STATES”
TRADE LINE
Jelena Mikulko Transport and Telecommunication Institute, Latvia
Purpose. Maritime industry is a very important economic sector and it has a direct impact on
the prosperity of the Baltic States. World containerised cargo turnover increases approximately by 10% per each year but “China-Europe/Asia” trade has increased dramatically in recent years and
71
imports from China is significant. For Baltic States it is very topically mainly because they have transit ports for containerised cargoes shipped from China to CIS (Commonwealth of Independent States) countries and about 80% of containerised cargoes handled in ports of Baltic States are transit flows.
But transit experts predict that in terms of future prospects, Baltic States could lose a lot of containerised transit cargo flows because of strong competition between ports and clear-cut ascendancy of alternative routes. Therefore particularly relevant for the Baltic States to develop such competitive transit container freight traffic management schemes that would keep the existing and attract new flows of containerised goods through the ports of the Baltic States.
Thereby the objective of this research is identification of factors which determine the specifics of containerised cargo ship movements between sea ports with the accent on “China – Baltic States” trade line and identification of definitive competitive advantages and disadvantages of this route as opposed to other routes (railway mode of transportation from China through Kazakhstan territory and shipments from China to Russian Far Eastern sea ports coupled with railway transportation through Russian territory).
Methodology. The principles on which the selection of above-mentioned factors has been done are presented in this paper. Herewith the methods of multivariate statistical analysis are used for the systemization process. The deep and detailed analysis of routes, specifics of services, “main market players” has been done.
Results. An integral, comprehensive view on the specifics of containerised cargo ship movements between sea ports on “China – Baltic States” trade line has been created. The results allow to evaluate the formation laws of containerised cargo shipments on “China – Baltic States” trade line, to understand the variability dynamics of cargo flows inside mentioned network, to determine the invariance of network. Furthermore the identification of definitive competitive advantages and disadvantages of this route as opposed to other routes has been accomplished.
Practical implications (if applicable). The results and implications of this research are necessary for developing competitive transit container freight traffic management schemes from China to Baltic States.
Value/originality. Meanwhile, in distinction from rail, air and road networks there has been paid quite little attention to the maritime network. Especially there has been paid quite little attention to the investigation of “China – Baltic States” trade line.
Keywords: containerised cargoes, Baltic States, transit container flows, management schemes. JEL Classification: R11, N70, R40. Paper type: Research paper.
THE ROLE OF CREATIVE INDUSTRIES IN DEVELOPMENT
OF LITHUANIAN ECONOMY
Akvilė Normantienė, Vytautas Snieška Kaunas University of Technology, Lithuania
This paper analyses the role of creative industries in development of Lithuanian economy under existing conditions.
The creative industries are among the fastest growing sectors in the global economy. Compared to the developing countries, the creative industries developed better and are treated as county strategies to recover and developed the social economy in the most developed countries. With the increase of international exchanges, the developing countries also realize the importance of the creative industries. Many countries have invested a lot of material and human resources to study the creative industries. More countries and scholars are studying the creative industries. Many researches about the creative industries released in the world showed that the creative industries are
72
very important to the development of economy. They not only have higher economic growth rate than the GDP (gross domestic product) growth rate and also can create more job positions than other industries. The researches show that from the economic perspective, the creative industries have been growing at a faster pace than the other sectors of the economy in a number of countries. Analysis shows that creative industries companies accounted for 8 per cent of the total number of companies operating in Lithuania. Current integration processes (accession Lithuania, Latvia, Estonia and other States into the EU) had an influence on development of creative industries in Lithuania and their role in country’s economy. However, researches investigating such changes are missing. For this reason actual problem arises – to estimate the role of creative industry in Lithuanian economy under existing conditions.
Purpose. To analyze the role of creative industries in development of Lithuanian economy under existing conditions.
Methodology. In order to examine the role of creative industries in development of Lithuanian economy two approaches are adopted. At first, we are analyzing creative industries position in global economy. Secondly, we are examined changes of development of Lithuanian creative industries under existing conditions.
Results. On the basis of analysis of the scientific literature was reviewed the evolution of the creative industries concept. On the basis of statistical data was determined that creative industries is an important and constantly increasing sector in the Lithuanian economy. The researches show that number of companies and employees operated in creative economy in recent years are changed. Increasing share of creative economy in Lithuanian GDP, growing total income of this sector reveals that Lithuanian integration into the EU had an influence on the development of Lithuanian creative economy under existing conditions.
Practical implications. This research could be useful for preparing and forecasting the possibilities of Lithuanian economy development.
Value (originality). This research has not been yet conducted in Lithuania, though this problem is actual not only for Lithuania, but also for the European Union.
Keywords: creative industries; global economy; gross domestic product; development; Lithuania economy.
JEL Classification: F1. Paper type: Theoretical paper.
CLUSTER’S IMPACT OF COMPANY CREDITWORTHINESS:
CASE OF LATVIA
Aleksis Orlovs University of Latvia, Latvia
Girts Braslins GE Money Bank, Latvia
Purpose. One of the leading driving forces of every state economy is small and medium
enterprises (SME). In Latvia, SME counts for 99.7% from national industrial system, creating 70% from states’ value added. The recent crises heavily affected SME and highlighted one of the modern economic imperatives for SME – need for collaboration in order to survive and successfully compete.
Lack of sufficient capital and credit is often a major handicap to the development of SME, particularly in their early growth stages. The main criterion and quality indicator of credit risk assessment is the borrower’s creditworthiness. Before issuing a loan, the check of the borrower’s credibility and solvency is carried out. The assessment of the borrower’s ability to pay, their
73
creditworthiness in a definite moment must be connected with the ability to meet their liabilities in future.
The objective of the paper is to provide analysis on development of Latvian government supported SME clusters and test the author’s hypothesis on a company creditworthiness dependence on it membership in a SME cluster. The task of the paper is to provide the case study of creditworthiness assessment on company which belongs to Latvian Electronics and Electrical Engineering Industry Cluster and company which is outside the cluster.
Methodology. The methods of the research are systematic, logical and comparative analysis of scientific literature, analysis of statistical data, case study and expert method by interviewing Cluster Managers.
Results. Persistent market fragmentation, weak industry-research linkages and insufficient cooperation indicates that clusters in Latvia do not always have the necessary critical mass and innovation capacity to face global competition sustainably and to be world-class.
The fact that many new cluster initiatives have appeared in Latvia over the last few years indicates that enterprises have acknowledged their importance and the co-operation opportunities they provide.
Using one of the creditworthiness measurement methodology authors did not find any correlation between firm membership in cluster and its credit risk decrease, apparently other financial indicators (value of assets, capital etc.) are more significant. Improvement of these indicators will decrease firm credit risk more dramatically, than membership in cluster organizations.
One of the possible solutions to address creditworthiness issue of SME is to create within a clusters mutual guarantee association solidarity group formed by small enterprises without access to credit. These associations have the potential to overcome adverse selection and moral hazard in lending and to act as driving forces behind entrepreneurial development.
Practical implications. Paper conclusions might be used by cluster initiative organisations managers in order to plan and improve organisation performance, as well as SME associations’ management in consulting SME’s on finance acquisition.
Value/originality. The research brings value in this section by presenting up-to-date analysis of Latvian cluster initiative development and discussing SME access to capital, what is important component of any nation competitiveness in a global economy.
Keywords: Cluster, creditworthiness, cluster support policies, small and medium enterprises. JEL Classification: J58, L16, O41, R38, M19. Paper type: Research paper.
E-BUSINESS AS A SOURCE OF COMPETITIVE ADVANTAGE
Vaida Pilinkienė Kaunas University of Technology, Lithuania
Ralph-Jörn Kurschus Kurschus, Lawyers and Managers of Bankruptcies, Germany
Goda Auškalnytė JSC Project Consultation and Research, Lithuania
Purpose. The main purpose of the article is to find out the relationship between e-business
benefits and competitive advantage. Methodology. In the article such general scientific research methods as systemic, comparative
and logical analysis have been applied. Results. E-business solutions such as supply chain management, resource planning system, e-
commerce and others create diverse benefits for the business. Although the integration of e-business
74
solutions in the usual business processes may improve all activities throughout the value chain, e-business impact on the improvement of firm’s financial performance of the company is debatable. Most of the studies analysing e-business impact on the usual business processes emphasize e-business benefits understood as the improvement of those processes and relate them with the competitive advantage. Thus, studies on the e-business benefits regard e-business solutions as an important source of competitive advantage; however the empirical research exploring the relationship between e-business benefits and competitive advantage is limited. Although many studies confirmed that e-business solutions have a positive impact on various business processes e-business benefits doesn’t necessarily lead to the increased profits and/or sales, thus the association of e-business value with the competitive advantage should be made with caution.
Practical implications. The model relating positive impact of e-business on nine different business processes and competitive advantage was developed. The model may be integrated into broader research framework constructed for the analysis of e-business development and its role in gaining competitive advantage in any industry.
Value/originality. The new non-traditional ideas of e-business benefits related to competitive advantage, the association between various e-business models and competitive advantage were tested. E-business benefits were conceptualised the positive impact of e-business on different business processes. The competitive advantage was analyzed as the increase in profits and/or sales due to e-business solutions.
Keywords: E-business, competitive advantage, resource-based approach. JEL Classification: M21, L20. Paper type: Theoretical paper.
POST-RECESSION ECONOMIC TENDENCIES IN THE BALTIC STATES
Donatas Pilinkus, Edverdas Vaclovas Bartkus Vilnius University Kaunas Faculty of Humanities, Lithuania
Purpose. Lithuania, Latvia, and Estonia used to show a relatively prominent economic growth in the pre-recession period, but the global economic crisis brought serious difficulties for those countries. The three Baltic States were somehow differently affected by the recession and their actions to cope with the crisis were slightly different. At present theorists and practitioners analyze economic tendencies in the world and they have come to two contradictory conclusions – the first group state the recession is over, the second group declare another recession is approaching. The fact regarding the Baltic States is that their GDPs have been growing for some time and it is evident that these economies are recovering, at least, for the time being. From an economic point of view it is always challenging to have a look into the future of a country, therefore the main purpose of the paper is to depict the short-term post-recession economic tendencies in the Baltic States.
Methodology. In order to make a forecast about the countries’ performance in the near future it was expedient to employ textual, comparative, and graphical analyses in the article. The short-term economic forecasting will be conducted by analyzing fluctuations of the leading economic indicators in the Baltic States and the summarization method will enable to draw the pertinent conclusions.
Results. The research reveals that not all leading indicators are the same in the Baltic States and the economic tendencies are slightly different. However, the leading tendencies disclose that economies of the Baltic States will grow in the near future even though this growth may be rather fragile as some leading indicators signalize a downturn.
Practical implications. The analysis of leading economic indicators in the Baltic States could serve as a positive sign for investors who are still unsure whether to invest in these economies or still wait. However, the results are applicable just for a short-term period and long-term economic tendencies require a more in-depth analysis.
75
Value/originality. Majority of scholars apply elaborate statistical techniques for similar types of researches, e.g. Impulse Response Function, Vector Auto-Regression, Vector Error Correction Model, Granger Causality, etc. The presented research technique is easy to understand and simple to apply. Moreover, the comparative graphical analysis seems to have a user-friendly output. Scientists say that simple forecasting techniques outperform elaborate ones if human experience is properly included. The main challenge for this rather simple technique is to depict those relevant indicators that have leading characteristics in a particular country. In conclusion, it is possible to sum up that simplicity of the technique and the art of selection of proper leading indicators make the research original and unique.
Keywords: Leading economic indicators, economic forecasting, The Baltic States. JEL Classification: E32, E37, O11. Paper type: Research paper.
EVALUATION OF BUSINESS PROMOTION PROGRAMMES:
LITHUANIAN CASE
Rita Remeikienė, Gražina Startienė Kaunas University of Technology, Lithuania
Despite the fact, that entrepreneurship is promoting in various countries, unfortunately, entrepreneurs face many barriers in business. According to International Labour Organization (2004) the main business environment barriers are these: a lack of market access and information; a lack of affordable technology and training; a lack of sufficient financial resources to buy inputs in bulk; a lack of appropriate growth financing and low levels of education.
Recently years business promotion programs have reached a high interest between researchers. (Michaelides, Benus, 2012; Caliendo, Künn, 2011; Cantner, Kösters, 2011; Månsson, Delander, 2011; Caliendo, 2009 and etc.). Much research has been proved, that business promotion programmes positively impact employment rate in different countries, contribute to reduction of gender, age group and wage differences in the labour market and increase the level of entrepreneurship. In practice, there are cases where the business support programs does not give the desired effect (for example, Argentina, project Jefes).
Purpose. To evaluate the efficiency of business promotion programmes, researching the experience of the participants of business promotion programmes.
Methodology. Systematic and comparative analysis of the scientific literature, the analysis of the statistical data, the method of expert evaluation.
Results. The results of the empirical research enabled establishment of the main reasons for participation in business promotion programmes (the wish to receive necessary funding, opportunities to make useful contacts, opportunity to get free systematised information necessary for business start-up and others), the factors determining the efficiency of business promotion programmes (selection of the target group, arrangement of practical activities) and the obstacles to perform efficient business promotion programmes (low personal interest, few opportunities to get funding).
Practical implications. With reference to the research results, the recommendations on how to increase the efficiency of business promotion programmes have been introduced.
Value/originality. The efficiency of business promotion programmes has been evaluated researching the experience of the participants of these programmes, and recommendations on how to increase the efficiency of business promotion programmes have been presented.
Keywords: business promotion, business promotion programmes, business. JEL Classification: L26; M2. Paper type: Research paper.
76
CLIMATE POLICY IN PERSPECTIVE OF GREEN JOBS CREATION SUPPORT IN THE EU
Janusz Rosiek Cracow University of Economics, Poland
Purpose. The main purpose of this paper is to present the impact of implementation of the EU
climate policy on development of green employment in the EU member states. This influence is not immediate because the demand for labor in green sectors of the economy is shaped by the demand for green products and services and green technologies. Current economic crisis is another factor disrupting the analysis of these relationships, and contributing to the reduction of funding possibilities supporting creation of green jobs. The study includes a comparative analysis of emergence of green jobs in the EU and the impact of specific climate policy tools on this process. It also takes into account factors related to the impact of the crisis.
Methodology. Theoretical approach is based on the paradigm of sustainable development which is widely presented in the literature. The work includes the comparison of indicators and models estimating impact of some policy tools on sustainable development of labor markets which is primarily manifested by stimulating green jobs. The opportunities and risks associated with this process are described. Potential for creation new green jobs and effectiveness of various climate policy tools are also presented.
Results. Presented analysis of various approaches to the green jobs policy issues helps to identify impact of the EU climate policy on structural pro-ecological changes in the labor markets. At the same time practical implementation opportunities of this policy are identified. Research clearly indicates a very strong institutional diversity of the climate policy instruments implementation possibilities in the EU member states, as well as their varied impact on creation of green jobs. The source of main dividing line between the EU-15 and EU-10 countries, is mainly a fundamentally different structure of their economies. The economies of the latter are based on the conventional (traditional) energy, unlike of the former, based increasingly on renewable energy. Due to the high cost of obtaining this type of energy, the EU-10 countries have limited capacity to increase its utilization, which could contribute to increasing employment in the renewable energy sectors.
Practical implications (if applicable). The paper can provide the decision-makers with basis for elaboration national development strategies including key climate policy instruments related to the implementation of the Europe 2020 strategy on sustainable development.
Value/originality. The study covers a comprehensive review of the literature concerning the types and evaluation of effectiveness of climate policy tools used by individual countries, the current state of their implementation and the possibilities and limitations associated with their implementation. Issues related to the notion and estimation of green jobs stemming mainly from lack of a uniform definition are also discussed.
Keywords: EU climate policy, green jobs, sustainable development paradigm, renewable energy.
JEL Classification: J62, O44. Paper type: Theoretical paper.
77
IMPACT OF CUSTOMER RELATIONSHIP ON A COMPANY'S COMPETITIVENESS
Asta Sabonienė Kaunas University of Technology, Lithuania
Žaneta Karazijienė Mykolas Romeris University, Lithuania
Purpose. The main purpose of the paper is to reveal the impact of customer relationship on a company’s competitiveness.
Methodology. Systematic and comparative analysis of scientific literature, logical deduction method, inference generation, analysis of statistical rates.
Results. Various researches show that the majority decisions to change a supplier is not related to his supplied items. Other important elements appear, i.e., use of technologies in purchasing processes and public portals, which help the clients to find competitive offers without leaving their homes. In addition, it provides buyers with a greater bargaining power, reduces the brand’s value, and other advantages that were owned by companies-suppliers. Some scholars argue that the main asset of a company is not a brand, but company’s buyer; therefore, today, relationships with the clients are getting more important.
It was revealed that the use of Customer Relationship Management (CRM) systems help companies to improve their competitiveness and:
- Attract new clients, because they are better in exploiting capabilities of client data management;
- Improve customer services, because the analysis of collected data in the system helps to offer the best option to a client;
- Allows identifying loyal clients easily and providing them with the most relevant loyalty program.
Statistical analysis showed that over the last five years (2008-2012), Lithuanian companies were less focused on the Customer Relationship Management (within 5 years, the implementation of these programs doubled), while they focused more on the management of company’s resources, and also increased funding (within 5 years, the number of such programs increased 5 times). This difference can be explained by the fact that using the Customer Relationship Management pays off and provides benefits significantly later than the use of company’s resource management.
Practical implications. By comparing program implementation of customer relationship in the business companies and Lithuanian institutions, it was determined that the institutions actually neglect these programs, and from 2010 to 2012, the implementation of programs decreased by 0.5%. It was revealed that Lithuanian institutions are greatly focused on the management of website content (in 2012, 75.5% of institutions used such programs) and the management of documents (in 2012, 75.3% of institutions used such programs). This data clearly demonstrates that the work of Lithuanian institutions is directed towards the improvement of citizen services, but focus only on the processing of documents.
Value/originality. The usage value of the customer relationship management in a company was revealed, i.e., it is easier to contact the customers and to remember everyone, to segment customers and offer the best option for each of them, easier to identify loyal clients and apply loyalty programs, to collect data about the partners in the system, which makes the work easier in case of staff changes, and it is easier to identify the problems in the company due to gathered inquiries, complaints, and other comments of the customers.
Keywords: company’s competitiveness, business relationships with customers, customer relationship management (CRM), CRM in business.
JEL Classification: M15, M21, M31. Paper type: Research paper.
78
METHODS OF COMPLEX EVALUATION OF THE LEVEL OF COMPETITIVENESS
Viktor Semenov Saint-Petersburg State Economic University, Russia
Purpose. The basic aspects of assessing the level of competitiveness based on the interaction between scientific-technical and economic factors of innovation processes in the business in the modern world. In the context of addressing competitiveness management highlighted the need for a multi-criteria and polymodel approach when assessing the effectiveness of innovation.
Methodology. Mechanism for evaluating and selecting efficient and quality innovative solutions should include, in our opinion, the following main blocks: the technology assessment, economic evaluation unit and investment decisions, the unit complex evaluation and selection decisions, etc. Quantitative evaluation of quality indicators is provided in the unit of technology assessment . To assess the level of quality used differential, integrated and mixed methods. Unit of economic evaluation and investment decision-making is designed, first, to identify options for the most efficient investment funds. Implement solutions to provide a given level of return, the acceptable level of risk and the stability of the financial situation in the period of investment. Therefore necessary to assess on the basis of several criteria, reflecting the effectiveness of the risk and financial stability. This necessitates the use of multi-criteria approach to the analysis and evaluation of innovation. To implement a comprehensive multi-criteria evaluation in the relevant criteria should be used to set individual models follow multiobjective optimization decisions. This, in turn, means the need for a comparative approach to the multiple-analysis of variance innovations. Multiple-evaluation of investment decision involves a complex structure of the general model of assessment and decision making, which consists of a number of special models to perform multidimensional analysis of possible solutions and then justify the decision based on the criterion of preference in the multi-criteria optimization. Thus, the evaluation unit and investment decisions includes the following models: the financial and economic assessment, global assessment, assessment of investment risk, multi-criteria analysis and decision-making based on design criteria of preference. From the variety of existing methods of multicriteria optimization is very effective and relatively widely used in practice are parametric methods scalarization vector criterion based on algorithms from the so-called "family package". These are straight-optimality, a fair compromise, guaranteed results, etc.
Results. The use of these approaches to the extreme of problems solved in the management of the innovation process, opens the possibility of a synergistic effect on the results of the implementation of solutions based on the multi-purpose tasks.
Practical implications. Based on the proposed mechanism has developed a system of indicators to measure the level of competitiveness in the example of the car service companies. A computer study of models we are interested in the range of variation of input and control parameters, we can determine an optimal mix, which in addition to achieving the quality of customer service, and would lead to obtain the maximum possible profit.
Keywords: innovation process, scientific-technical factors and economic factors, technological innovation and economic efficiency, multi-criteria approach, multiple-model estimation.
JEL Classification: O31. Paper type: Theoretical paper.
79
FOREIGN DIRECT INVESTMENT IN SLOVAK REGIONS AND THEIR IMPACT ON REGIONAL ECONOMIC GROWTH
Jana Sochuľáková, Mária Igazová Alexander Dubček University of Trenčín, Slovakia
Purpose. The paper discusses FDI allocation in different Slovak regions and its impact on
economic growth in regions. Applying correlation analysis the correlation between the selected macro economic indicators (GDP, unemployment rate) and FDI in Slovakia and in Trenčín Region are quantified in the paper.
Methodology. The correlation analysis is applied to quantify the relation, the correlation between foreign direct investment and selected macro economic indicators such as GDP, unemployment rate in the Slovak Republic and in the Trenčín Region. The input data for our analysis are the data published by the Slovak Statistics Office, the National Bank of Slovakia and by the Agency SARIO. The data were gathered between the years 2000 and 2010. Except for the analysis also other methods such as synthesis and benchmarking might be employed to achieve the goal.
Results. The year 2000 is a turning point in the investment flow as the total FDI flow in Slovakia amounted the total value of all capital inputs invested by foreign investors in the Slovak economy within previous nine years. During the given period direct sales to foreign investors are preferred. After a drop in investment in 2009 due to crisis, there is some progress made again in 2011 when the amount of investment is four times larger than the one in the previous year.
From the allocation point of view the Bratislava Region with its sixty-per cent-share out of total FDI has taken its first position in Slovakia. At the same time the unemployment rate in this region is the lowest, the regional GDP is the largest and the average salary is the highest in this region. The worst situation in FDI flow and in other indicators is reported in the Presov Region.
Quantifying the power of dependence between FDI and GDP or FDI and unemployment rate Pearson correlation coefficient is employed. The results of the correlation analysis prove the existence of mutual relation between FDI and unemployment rate and also between FDI and GDP. A very high negative correlation is proved between FDI and unemployment rate and between FDI and GDP there is proved a very high positive correlation not only in Slovakia but also in the Trenčín Region as well.
Practical implications The representatives of the Trenčín Self-governing Region are advised to create better conditions for foreign investment to attract foreign developers to start their businesses in the region.
Value/originality: The results presented in the paper are obtained in the research activity of the paper authors. The value lies in original solutions that authors suggest as the solutions can be utilized by the decision makers in the self-governing region.
Keywords: Foreign Direct Investment. To Invest. Foreign developer, investor. Multinational Company. Political stability. Economic Stability.
JEL Classification: F35. Paper type: Research paper.
80
PREDICTION OF LITHUANIAN GDP: ARE REGRESSION MODELS OR TIME SERIES MODELS BETTER?
Alina Stundžienė Kaunas University of Technology, Lithuania
Purpose. The main purpose of the paper is to investigate whether regression models made of the monthly published economic indicators or time series models are better for Lithuanian GDP prediction.
Methodology. The research is based on the economical data that are measured and published monthly by Statistics Lithuania (154 ratios at all). Various linear and non-linear regression models are made in order to find the best model for Lithuanian GDP prediction. The results of regression models are also compared with the results got by time series models.
Results. The results show that regression models made of monthly published economic indicators can be better than time series models for prediction or Lithuanian GDP.
Practical implications (if applicable). The problem of Lithuanian GDP prediction is relevant. There are several institutions, such as Statistics Lithuania, state’s central bank, other banks that constantly announce their predictions of GDP. Frequently the forecasts of different institutions vary because they use different methods. The models presented in this paper are not more complicated then more others created by other researchers, but the best monthly indicators and models for Lithuanian GDP prediction are shown in this paper and all they can be applied in practice.
Value/originality. The changes of Lithuanian GDP are published quarterly, many other economic indicators, that have the impact on GDP as well. Prediction of quarterly economic indicators as it was done by the most researchers can be related with greater errors comparing with the prediction models that are made according to the monthly data. Monthly data can ensure that the newest information is used for prediction of GDP and show how the state’s economy is changing in the current quarter, that’s why it can reduce the error of prediction. I failed to find the similar research in any Lithuanian scientific journal.
Keywords: Lithuanian GDP, forecasting, regression models, time series models. JEL Classification: C51, E27, O47. Paper type: Research paper.
THE IMPACT OF PORT LOGISTICS SYSTEMS ON COUNTRY’S
COMPETITIVENESS (CASE OF SMALL COUNTRIES)
Leila Sujeta, Valentinas Navickas Kaunas University of Technology, Lithuania
Globalization processes determine the necessity to ascertain and use effectively competitive advantages of port logistics systems on national and international levels. It ensures stable growth of country’s economy and competitiveness, what became very important for small countries through sizeable impact on its competitiveness.
Purpose. To analyze opportunities to implement the concept of port-centric logistics system in small countries in view to increase its competitiveness.
Methodology. Systemic, logical and comparative analysis and synthesis of scientific literature.
Results. The research demonstrated that the conception of logistics systems is often identifying as definition of logistic park, centre or cluster, created to sustain logistic activities with the aim to reinforce global and country’s competitiveness, to stimulate cohesive regions development and its economic growth. However, in accordance with functional purpose,
81
operational diversity and complexity of clusters (parks, centres), with the presence of system necessary elements, its interconnections and the synergy effect of its activity, these definitions could be integrated to generalized conception of logistics systems, where logistic clusters, parks or centres become subjects of logistics system or its regional models.
The authors ascertained competitiveness forms of port-centric logistics systems, dictated by levels of ports competition: between whole ranges of ports or coastlines; ports in different countries; individual ports in the same country; operators or providers of facilities within the same port; different modes of transport. It performs the complexity view on activities of port logistics systems in accordance with country competitiveness factors and levels. Considering the infrastructure usage in port logistics systems and its functionality the economic growth and country competitiveness are ground by logistic flexibility, however, the particularity of country’s economy determines forms and nature of interconnections and processes in port logistics systems structure. Therefore, the competitive advantage of small country could be generated through the improvement of effectiveness rates and indexes of port logistics systems activity.
Practical implications. The research performs, that port-centric logistics systems enable to reduce costs of flows’ movement, to improve indicators of its circulation by reducing the time of turn-round, to increase the effectiveness of resource consumption and its mobility, to minimize the negative impact on natural environment. Thus, the movement of material flows, supported by financial and informational flows, increases its value, what makes positive effect on macroeconomic rates and indexes of small country.
Value/originality. By analysis of dimensions of small countries’ competitiveness, the authors determined significant influence of port logistics systems on these countries’ economic competitiveness. The possibility to differentiate processes and activities within logistics systems and the constancy of interconnection between system’s subjects allow ensuring the sustainable development of country’s economy, suitable allocation of synergy effect, determined by system elements and its activity. It comes through the increase of effectiveness in usage of resources and other economic valuable and its suitable allocation, i.e. the assurance of movement of material, financial and informational flows.
Keywords: economy of small countries, country’s competitiveness, logistics systems, ports. JEL Classification: A10, L91, R41. Paper type: Theoretical paper.
FEATURES OF THE DEVELOPMENT OF LITHUANIAN INDUSTRY
IN THE CONTEXT OF GLOBALIZATION Rozita Susnienė, Irena Pekarskienė
Kaunas University of Technology, Lithuania
The globalization of economies and markets is a noticeably prominent tendency in recent decades. Global communication and transportation technologies based on electronic data transfer, geographic expansion of the sources of raw materials, international value chain creation, and intensifying international financial transactions are all factors of globalization increasing firms' capabilities to operate at the international level. It is clear that no sector of the national economy can escape the impact of the intensively expanding process of globalization. It is likely that the impact of the globalization process on the development of the national economy will be even more apparent in the future; therefore, it is necessary to develop long-term strategies for firms, individual sectors of the national economy and the economy as a whole to gain a competitive advantage and successfully develop their business across national borders. In order to maintain and enhance competitiveness, it is necessary to, first of all, assess the intensity of the impact of globalization and
82
evaluate the opportunities and threats arising from local and foreign markets; the aspect of globalization can then be used in developing strategic plans and operations.
Purpose. The purpose of the paper is to analyze the features of the development of Lithuanian industry in the context of globalization.
Methodology. A systemic comparative and logical analysis of academic literature, analysis and interpretation of statistical data.
Results. An analysis of academic literature showed that academics, who research aspects of economic globalization, name these main globalization factors as having the greatest impact on the development of industry: the acquisition of technology, the acquisition of intermediate goods integrated with new technology, the flow of foreign direct investment, the transfer of business organization and management skills, the intensity of multinationals' activity, the expansion of exports, increasing competition, labor force migration, etc.
Lithuanian economy, influenced by the globalization process, is increasingly integrated into the global economy. Lithuanian industry is one of the most quickly developing sectors, generating one fourth of national gross value added (24.8% in 2011). During the time period between 1995 and 2011, Lithuanian industry tripled. In 2012, the annual industrial growth rate (4.3%) was greater than the economic growth of the entire country (3.6%).
The globalization process promotes research and development of new technologies in Lithuanian industry. This increases not only the industry's competitiveness in the local market, but also Lithuania's industrial competitiveness in international markets.
Practical implications. An intensive globalization process reveals a combination of factors that influence the process of globalization in a general economic context as well as in individual sectors' development. These factors force the entire national economy or individual sectors to respond to the new opportunities offered by the global setting and adapt in a changing environment, to accept new challenges and resist interferences. The globalization processes affect individual economic sectors differently. Therefore, there is a need to research the impact of globalization on the development of individual economic sectors in order to understand and evaluate the present situation, which would produce the capabilities to forecast the tendencies of future development, and to foresee the means for taking advantage of globalization and protecting the sectors from its threats.
Value/originality. Attempts to evaluate the extent of globalization processes on an individual country level are widely known. The influence of globalization on the development of individual economic sectors is a new phenomenon, which has not been studied sufficiently. In an attempt to assess the impact of globalization on the development of an industry, it is necessary to identify and analyze the indicators that reflect level of development in the industry. Such an identification of the globalization factors and industry indicators would make it possible to establish links between the development of the industry sector and the globalization factors that have the greatest impact on the development of this industry.
Keywords: economic globalization, impact of globalization, Lithuanian industry. JEL Classification: F60, F63, L60. Paper type: Research paper.
THE YOUTH UNEMPLOYMENT REGULATION POSSIBILITIES
IN LITHUANIA
Henrika Šakienė Klaipeda University, Lithuania
The youth unemployment problem is highly discussed in Lithuania and European Union
because this problem miscellaneous and involves various sectors such as economics of states, education system, social affairs. Unemployment in general is related with changes in states
83
production volume that is important for GDP and national budget also with governmental expenditures for unemployment regulation that is increasing budget deficit and growth of governmental depth. High unemployment rates in state can increase emigration which also gives negative impact towards state economics.
The problem of an aging population show importance of youth and its employment because Lithuania cannot lose for emigration more young labour force which is very important for the future state economics.
Purpose. The main purpose of the paper is to research the problems of youth unemployment in Lithuania and identify possibilities to adjust its regulation.
Methodology. Preparing the article was done research of theoretical tools for youth unemployment regulation, review of youth unemployment situation in Europe and Lithuania also there was done quantitative survey of employers questioning their opinion about obstacles employing young people and also survey of youth that is unemployed and currently searching for work in Lithuania.
Results. The research of youth labour supply and youth labour demand allows to identify the main problems that becomes an obstacle for youth unemployment reduction. The reason for employing older than 30 years old workers employers identified the work experience and capability to take responsibility for the actions. Employers, answering about young people that they have ever employed, identified the lack of experience and lack of motivation to work or adjust existing skills to the work particularities. The unemployed youth survey showed that young people do not want to work for minimum wage or for less than 1000 lt net salary. Young people agree that they have no work experience and their skills might be not enough for certain vacancies, but they prefer stay unemployed and wait longer for job offers with better salary either leave the country and work at any job in Europe but for more money. The research allows to identify reasons for youth unemployment and offer unemployment regulation possibilities in Lithuania.
Practical implications. The practical value of this paper is that there is summarized results of survey researching reasons for youth unemployment also identified reasons making gap between youth labour supply and demand. The systematized youth unemployment reasons allow to offer possibilities for youth unemployment regulation adjustments in Lithuania.
Value/originality. The research of reasons for youth unemployment allowed to identify weaknesses of existing employment situation in Lithuania and also to propose ways to change mismatch between youth labour supply and demand. The reduction of youth unemployment can be a great incitement for growth of Lithuanian economy competitiveness in between global economies.
Keywords: youth unemployment, unemployment regulation, labour demand. JEL Classification: J08, J21, J23, J60. Paper type: Research paper.
ECO-INNOVATIONS – TOOLS FOR TRANSITION TO GREEN ECONOMY
Katarzyna Tarnawska Cracow University of Economics, Poland
Purpose. Green economy is a relatively new concept very much promoted at the EU level as a
tool for boosting competitiveness of the EU Member States. Eco-innovations can be perceived as a source of competitive advantage as they contribute to improvement of economic performance. At the same time they ameliorate environmental performance of society. The notion of eco-innovation is not clear however. There are a lot of definitions and different eco-innovation typologies.
The paper covers discussion on methodological controversies related to eco-innovations’ importance for the economy. The problem of eco-innovation classification as well as eco-innovation measurement dilemmas at micro and macro levels are discussed. The main purpose of this study is to present in a theoretical way the role of eco-innovations in transition to green
84
economy and current state of eco-innovations’ development in the EU member states. Therefore impact of eco-innovations on macroeconomic and environmental performance is presented through identification of possible channels of eco-innovation influence on economic growth and environment. The second part of this study presents a comparative survey of the EU member states situation concerning development of eco-innovations.
Methodology. Theoretical approach is based on environmental economics which is focused on efficient use of resources and negative external effects arising from economic activities. Research methodology employs desk research encompassing a comprehensive review of available literature and comparative analysis of eco-innovation indicators illustrating their development level in the EU member states.
Results. Eco-innovations can be a source of economic growth through development of new eco-industries offering new jobs and reduction of production costs. They also contribute to eco-efficiency as they reduce environmental impact through “end-of-pipe” technology, “process-integrated” (clean) technology and product innovations implying less harmful substances, and usage of less energy. Eco-innovations can become a measure supporting economic growth strategies especially with respect to economic crisis when new growth factors should be identified and employed. There are huge variations between the EU member states concerning their eco-innovation performance. Position of particular member states in eco-innovation performance rankings depends to a certain degree on choice of a set of indicators.
Practical implications (if applicable). As eco-innovations need to be supported by a proper public policy, the results of the analysis can be used by policy makers at different levels of governance for decision making purposes concerning economic development strategies, policy tools and fulfilment of obligations stemming from the Europe 2020 Strategy.
Value/originality. The paper provides a comprehensive review of literature on eco-innovations, it also gives insights into possible eco-innovation measurement possibilities and makes assessment of their practical usefulness. It covers moreover, rankings of the EU member states, made according to different sets of indicators, illustrating their eco-innovation level of development. Such analysis enables comparisons and paves the way for future research on eco-innovation drivers as well as policy implications.
Keywords: eco-innovation, eco-innovation indicators, economic growth, green economy. JEL Classification: O31, O33. Paper type: Theoretical paper.
THE MODEL OF MAIN CAUSES OF NON-OBSERVED ECONOMY
Karolis Trimonis, Gražina Startienė
Kaunas University of Technology, Lithuania
Purpose. Non – observed economy is very flexible and it can easily adapt to the government regulations, social morality and market on the whole. Because of flexibility shadow economy instantly change form, size and technique. Every new restriction in the official market expands the size of non – observed economy. There are quite a lot scientific works written by E. L. Feige, F. Schneider, B. S. Frey and W. W. Pommerehne, P. Smith, N. Brooks, O. Lippert, M. Walker, F. A. Cowell, D. Enste, C. C. Williams, H. JAE, M. T. Seevers, J. B. Gassenheimer about the non-observed economy: definitions, size and methods to estimate the size, consequences for official economy. But are some analyses about non-observed economy and the problems becoming from underground and only few main causes are discussed deeper. The problem with the causes is that there are desultory descriptions of the causes, but no systemically view on the whole causes together. This paper analyses main causes of non - observed economy and gives the model that allows us systemically to evaluate the influence of every cause for the non - observed economy.
85
Methodology. The methodical analysis and comparative method of study is used in this article. By using mentioned methods the main causes are separated and some new are added. The given brand new theoretical model of main causes of non – observed economy is divided into four main branches of the causes groups: Economic, Politics and Legitimate, Social and Cultural, Administrative and enables to analyse 22 causes at one time.
Results. The non – observed economy mainly forms because of the gapes in the tax system, social morality, law that regulates the market and corruption level. The given model is the step to systemically define and separate the causes of the non – observed economy. This should allow to develop the national economy quicker.
Practical implications. The new model of main causes of non-observed economy may be used as the tool for economists and government clerks to evaluate the influence of every cause for the non - observed economy.
Value/originality. The model of main causes of non-observed economy is original and new, it systemically analyses main causes of non – observed economy.
Keywords: Non - observed economy, official economy, causes. JEL Classification: E26, F41, G18, H26. Paper type: Theoretical paper.
SOCIO-ECONOMIC EFFECTS OF INTERNATIONAL MIGRATION
Magdaléna Tupá, Herbert Strunz Alexander Dubcek University of Trencin, Slovakia
Purpose. The purpose of the study is to analyse and evaluate consequences of influence of
international migration in the socio-economic spheres of social life. Based on that, it identifies problems within migration policy, sets out proposals for positive guidance of migration policy with the aim to maximize migration benefits and proposals for the solution of migration policy from the point of view of the country of origin, country of destination and migrants themselves.
Methodology. The study is based on the analyses of statistic data (Eurostat, WTO, Statistical Office of the Slovak Republic) and own research of migrants from the point of view of the Slovak Republic as the country of origin and country of destination. In order to analyse current trends in the labour market and the extent and intensity of labour migration flow we used the methods of induction, deduction, method of scientific abstraction, analytical and synthetic method and method of comparison. The empirical research, data collecting and examining for the purposes of migration motives and consequences were performed based on the quantitative and qualitative methods of empirical and sociological survey. We defined a basic set and created a sample of labour migrants. Later on, we used the method of querying and structured interview. In order to evaluate the obtained data we chose a mathematical and statistical survey, analysis and comparison of facts, phenomena and processes with common features and comparison and graphic display of the obtained data.
Results. The results confirmed a significant impact of international migration on socio-economic spheres of social life. We identified and quantified some of the pros and cons of international migration with regards to the country of origin, country of destination and individuals themselves. The casual relation between the international migration and development of labour market was the most important factor of economic consequences. Further important factors, on the one hand, were represented by remittances and their influence on the support of economic activity of the country of origin and, on the other hand, the loss of investments into education of migrants and vice versa for the country of destination costless prepared work force which is able to fill the gap in the labour market.
Practical implications (if applicable). The study results in the algorithm of migrant’s decision making based on the already known theories dealing with the phenomenon of migration as well as
86
on the results obtained from the research of the study sample. It summarizes the migrants´ motives of international migration based on motivational theories arising from historical context and the collected research data. The most important part of the contribution is the identification of consequences with the greatest influence on socio-economic spheres of social life and management of migration policy with the aim to maximize the migration benefits.
Value/originality. While studying the available literature in the given area, we did not come across with a study similar to the one we conducted for the purpose of this research. The research is original and has not yet been published. The analysis of reciprocal casual relations and connections between the phenomena studied on the basis of statistical data is also original.
Keywords: international migration, migrant, country of origin, country of destination, remittances
JEL Classification: F22. Paper type: Research paper.
BUSINESS ENVIRONMENT FACTORS DETERMINING THE SELECTION
OF TIME FOR THE IMPLEMENTATION OF NEW TECHNOLOGIES IN LITHUANIAN INDUSTRIAL ENTERPRISES
Jovita Vasauskaitė Kaunas University of Technology, Lithuania
Purpose – to evaluate business environment factors of the Lithuanian industrial enterprises, conditioning the selection of time to implement new technologies.
Methodology. The general research methods applied in this article are the systemic comparative and structural analysis of scientific literature, statistical data analysis, graphical modelling. Empirical research is based on qualitative methodological approach: method of expert evaluation on the basis of a questionnaire-based survey, rating coefficients of factors’ weight was used. Processing the results there were used SPSS and Microsoft Excel software.
Results. This paper presents the findings of expert evaluation, which aimed to investigate the most important external environment factors determining the selection of time for the implementation of new technologies in the Lithuanian industrial enterprises. Seeking to reflect the significance of technologies and innovative activity for the growth of Lithuanian economy more widely and, considering the statistical data, the analysis of innovative activity in industrial enterprises during the year 2006 – 2010 was carried out and it emphasized the development of technological product and process innovations and their impact on causes and reasons of new technology implementation in enterprises as well as financial support for innovative activity from public authorities. Obtained results revealed that in the recent years, the connection of industrial progress, organizational changes and economic competitiveness has increased. Due to this, the development of new technologies and their implementation in the industry has become one of the most significant factors of Lithuanian economic strategy, determining the speed and results of the economic-social development. Considering the results of the expert evaluation, a summarizing conclusion is made that the most essential factors of external business environment are: the level of market concentration, the change of consumer needs and product price in sales market.
Practical implications. The implementation of new technologies is a difficult process, involving many interrelated elements and is influenced by many external and internal factors. Therefore, the research allows evaluating the external factors of industrial enterprises in decision making process of new technology implementation. The results of this paper could be used as a tool of strategic planning when making decisions to implement new technologies in industrial enterprises.
87
Value/originality. The external business environment factors of technology implementation were identified and systematized, evaluating their impact and significance on the selection of time for the implementation of new technology.
Keywords: new technology, time selection of technology implementation, business environment factors.
JEL Classification: O12, O14, O33. Paper type: Research paper.
THE METHODOLOGY OF RESEARCH OF ACTIVITY OF OFFSHORE
COMPANIES
Algimantas Venckus Kaunas University of Technology, Lithuania
Purpose. The main purpose of the paper is to present and analyse the methodology of research of offshore companies.
Methodology. Systematic comparative and structural analysis of scientific economic literature, logical analysis, methods of qualitative analysis (logical analysis, induction, etc.), methods of quantitative analysis (correlation analysis, regression analysis, causality analysis, etc.) are used in the paper.
Results. Lithuania, like many other countries of the European Union faces problem of decrease of national budget revenues. This problem is more acute in new member-states because of the lack of traditions of willing tax payment. Tax reduction or tax avoidance schemes often involve offshore companies because of their special status. Taking advantage of these companies one can avoid or reduce some taxes, such as corporate income tax. Main objectives of the use of offshore companies are tax cuts without breaching of existing legislation, tax evasion in contravention of the legislation, and also, depending on the objectives of offshore company formation, hiding origins of capital. Therefore it is necessary at first to identify offshore companies’ specific characteristics and then to develop appropriate methodology to evaluate the impact of activities of offshore companies to national tax collection. The paper analyses the activities of offshore companies, identifies the characteristics and establishes the methodology for evaluation of impact of offshore companies to national budgets and public finance.
Practical implications. Using offshore companies as a business model allows businesses worldwide to reduce taxes paid to national budgets. Public authorities are in the interest of the research of economic activities of offshore companies in order to have methodologies and tools to control the scale of activities and financial flows bypassing national budgets.
Value/originality. Recent scientific and practical studies, research papers cover some of the aspects of offshore business, i.e. analyse scale of financial assets hidden in the offshore centres, capital flows to offshore centres, etc. However, no evidence was found about researches concerning impact of offshore companies to national budgets and public finance. The paper will cover this topic.
Keywords: offshore companies, research methodology, tax reduction, tax evasion. JEL Classification: F23, F02, F44. Paper type: Research paper.
88
GOVERNMENT SPONSORED VENTURE CAPITAL FUNDS AND THEIR RELATION TO INNOVATION IN LITHUANIAN SMEs
Vitalija Venckuvienė, Vytautas Snieška Kaunas University of Technology, Lithuania
The research show that the government's role in activating the venture capital market occurs through direct and indirect public policy measures. The government plays a responsible role - to choose the most optimal public policy measures, focusing on timely economic issues, and to encourage private investors to invest in industrial sectors where funding shortfall is greatest.
Studies have shown that the establishment of GSVC funds is justified by the following reasons: GSVC funds are an alternative source of capital funding for Small and Medium Sized Enterprises (hereinafter SMEs), it encourages innovation and is focused on job creation and economic growth.
The present paper deals with the governments’ role in fostering the government - sponsored venture capital funds (hereinafter GSVC funds), particularly focusing on the impact of such funds on innovation in SMEs in Lithuania.
The research shows that it is appropriate to clarify the concept of GSVC funds, focusing on the role of supranational institutions in the establishment of these funds. Thus, GSVC funds in this paper refer to funds accumulated from private investors and public resources (government, as well as other supranational institutions such as EU), which invest in high growth potential SMEs in their early growth and development stages in order to improve their development conditions in a particular region or country.
The scientific literature research show that the impact of venture capital on the innovation in SMEs is measured in terms of patents (Chemmanur, Loutskina, & Tian, 2012; Brander et al., 2010; Bertoni & Tykvová, 2012). Thus it reflects only the one technological side of innovation. Meanwhile considering innovation as multifaceted conception, the organizational innovation, networking, self-assessment and marketing innovation aspect should be taken in to account.
Purpose. The main purpose of the paper is to explore the relation between the government sponsored venture capital funds (hereinafter GSVC funds) and the innovative activities in Lithuanian SMEs.
Methodology. Systematisation and logic analysis of scientific literature and the expert evaluation method as well.
Results. For the development of public measures it is appropriate to take into account the specificities of a country, which is defined not only by economic factors, but also an emphasis on the political, social and cultural factors is needed. The expert evaluation shows that venture capital impacts innovation in SMEs in respect of the technological innovation, networking and personnel management.
Practical implications. Measuring innovation in five dimensions (technological, networking, organisational, marketing and self – assessment related innovation) could be tailored in other studies.
Value/originality. The article contributes to research scope, which aims to explore the venture capital relation to innovation. The paper is original, because it explores the GSVC funds’ impact on five different dimensions of innovation.
Keywords: Government sponsored venture capital fund, innovative Small and Medium Sized Enterprises, public policy.
JEL Classification: G28, G24, O32. Paper type: Research paper.
89
CLUSTER MODELS, FACTORS AND CHARACTERISTICS FOR THE COMPETITIVE ADVANTAGE OF LITHUANIAN MARITIME SECTOR
Rasa Viederytė Kaunas University of Technology, Lithuania
Rimantas Didžiokas Klaipeda University, Lithuania
Purpose. The main purpose of the paper is to analyze several cluster models (Nine-factor model, Added value model, Double diamond model and others) and concentrate to the classical one - adopt M.Porter’s Diamond model methodology to the evaluation for the competitive advantage of Lithuanian Maritime sector’s clustering. Despite the advances in cluster research, this model remains a complex one and something that is hard to adopt to a real economic environment. However, this model with some extends and implications can be applied to explain the emergence and development of Maritime cluster. This also can be viewed as model to explain the emergence and evolution of Industrial sector.
Methodology. Scientific literature analysis and synthesis, primary and secondary data collection, statistical givens research, non-experimental research.
Results. Porter’s Diamond model methodology for competitive advantage model of Lithuanian Maritime sector will be analyzed and presented through four main attributes: Factor conditions, Demand conditions, Related and supporting industries, also Firm strategy, structure and rivalry. Additionally two following variables, that indirectly influence the Diamond, will be analyzed in the context of this Lithuanian industrial sector: Chance events and Government. These six attributes promote or impede the creation of competitive advantages. All conditions will be presented as favourable for Lithuanian Marine sector. Analysis results will show effective and convenient Lithuanian Maritime sector clustering abilities evaluation methodology. Although clustering analysis on the basis of M.Porter’s Diamond model highlighted its advantages, the interconnection of factors and their affect on the clustering, the economic theory has not yet provided a model that allows both the analysis and the definition of a process for implementing a successful clustering research. Due to the complexity of the economic relations and environment that define cluster, it is necessary to develop research and modify Diamond model, that the theoretical model is validated in practice by overlapping it with any existing clustering case.
Practical implications. The adopted M.Porter’s diamond model will create convenient theoretical basis and has practical implication for real Lithuanian Maritime sector’s clustering abilities evaluation. It also will help to systemize basic cluster characteristics, that can be identified in the Maritime industry and measure the reasonable impact factors, which are identified in Lithuanian Maritime sector, in whole clustering abilities evaluation system, based on adopted Diamond model.
Value/originality. Presented research paper is valuable concerning the analysis of adopted Diamond model, which could be useful for assess competitive advantage of the national Maritime environment in which individual business units, organizations and industries operate. Adoption M. Porter’s Diamond model methodology for clustering abilities evaluation in Lithuanian Maritime sector will be original and on the type of real sector clustering abilities economic evaluation, was never presented before.
Keywords: Diamond model, Competitive advantage, Maritime sector, Clustering. JEL Classification: L16, Q14, Q32. Paper type: Theoretical paper.
90
VOCATIONAL TRAINING AND EMPLOYMENT IN THE CREATIVE INDUSTRY
Sergej Vojtovic Alexander Dubcek University of Trencin, Slovakia
Emilia Krajnakova Technical University of Košice, Slovakia
Purpose. The main purpose of the paper is to analyse the processes prevalent in the vocational
training and education of workers active in the creative industry in the Trencin region. Moreover, the paper addresses the issue of whether these workers meet the requirements being placed on their education and qualification by companies. The paper is also intended to propose a suitable institutional model of cooperation among the educational establishments, local government and companies active in the field of creative industry. Bearing in mind the main purpose of the paper, usual practices and methods employed to search for, assess and take on workers implemented by the organizations in the creative industry in the region were analysed. Next, the demands and expectations of the organizations active in creative industry in terms of vocational training, qualification and personal qualities of the workers were determined. Furthermore, the educational system in the region was analysed and its quantitative and qualitative characteristics were identified. Besides, the paper tries to find out whether the creative industry organisation representatives of the region in question share and recognise common interests. Last but not least, their psychological attitudes and the state of being prepared to cooperate in the process of optimizing the system of education to meet the expectations of the creative industry organisations in the region are investigated.
Methodology. Empirical research of organizations active in the creative industry in the Trencin region is performed by using a structured interview with those working in management jobs. In addition, methods of comparison, induction, deduction and statistical methods are used to evaluate the data gained from the empirical research.
Results. The types of vocational training and education as well as staff searching and hiring practices for the creative industry in the Trencin region were determined. In addition, the expectations of the creative industry in terms of education, qualification and expertise of employees were identified and an institutional model of cooperation among educational establishments, state and local government institutions and creative industry companies was proposed.
Practical implications. The results obtained by the analysis of human resources working in the creative industry can assist in improving the efficiency of the system of vocational training and education for the creative industry. Moreover, the findings imply that cooperation among the educational establishments, institutions of state and local government is a must in terms of increasing the gross domestic product formation and employment in the region through creative industry. Furthermore, the data gained can be used to create an institutional and organizational model of cooperation among educational establishments, state and local government institutions and creative industry organisations.
Value/originality. The originality of the paper lies in determining whether the system of vocational training and education meets the requirements and expectations of the organizations active in the creative industry.
Keywords: Human resources, creative industry, need for creative workers, preparation and education.
JEL Classification: O15, O31, J24, J44, I25, L8, Z1, Z11. Paper type: Research paper.
91
SOCIAL CLASS STRUCTURE IN THE BALTIC COUNTRIES
Ineta Žičkutė, Vilmantė Kumpikaitė Kaunas University of Technology, Lithuania
Purpose. The main purpose of the article is to identify social classes’ structure of the Baltic countries and to evaluate how “fair” income’s distribution in these countries is.
Methodology. The research has a structure consisting of three parts. Review of society class structure classifications and analysis is given in the first part. Identification of “fair” society class structure and analysis of society class structure in the Baltic countries are presented in following parts. Burkhauser, Crews, Daly and Jenkins (1996) proposed criteria and statistical data were used for this social class groups’ analysis. Based on Berglee (2012), Pusey (2003), Young (2009) the most popular five social class structures were presented. One of them, “a rhomb-shaped” structure, is identified as the most “fair” for majority people. According to Burkhauser et al. (1996) middle class society should include those people whose income exceeds the poverty line 2–5 times.
Results. According to the provided statistical analysis, results showed that despite the fact that all countries has substantial imbalanced income distribution, Lithuanian and Latvian social class structure is not “fair” (a pyramid–shaped structure). However Estonian has different situation. It incomes’ distribution is “fair” structure (a rhomb–shaped structure). The reason of such situation can be identified by relationship between minimum monthly salary and absolute poverty line. Estonia has 1.5 times higher minimum monthly salary than absolute poverty line but the situation is different at the same time in Lithuania and Latvia. Their minimum monthly salary is accordingly 1.5 and 1.14 times less than socially acceptable minimum standard of living.
Practical implications. Analysis showed the need for further deeper research. It is necessary to develop a comprehensive model of poverty risk assessment, which could allow evaluating not just by income inequality but also could include other characteristics such as wealth, education, occupation, work, etc. Moreover, it would allow preparing a methodology, which could help evaluating countries by their social class structure according to their level of economic development.
Value/originality. Topic of income distribution and inequality is often discussed in nowadays. It is necessary to assess the countries social classes’ structure which could justify the need for changes. However, there are no common criteria how society should be divided into social classes. Thus, in this article the solution how to assess society structure of incomes is proposed and results about income distribution in the Baltic countries are given. The received results could help explaining economical reasons of people migration in analysed countries as well.
Keywords: “fair” income distribution, income distribution, middle class, structure of social classes.
JEL Classification: J31, F01, H24. Paper type: Research paper.
92
Session
CONTEMPORARY MARKETING: RETHINKING AND REDISCOVERING
93
RELATIONSHIP BETWEEN UTILITARIAN AND HEDONIC CONSUMER BEHAVIOR AND SOCIALLY RESPONSIBLE CONSUMPTION
Karina Adomavičiūtė Vilnius University, Lithuania
Purpose. Despite the increasing number of publications on the subject of socially responsible
consumption, however ethical side of socially responsible consumption is not receiving enough attention, the majority of publications are focused on so-called "green" consumption. Foreign researcher identified different scales to measure socially responsible consumption in a broad sense, but existing models are not fundamental. In addition, little attention is paid to analyse ethical side of socially responsible consumption from the individual side, i.e. what motives affect individuals to start consume ethically. The aim of this work is to establish theoretical model, which helps to measure the relationship between utilitarian and hedonic consumer behavior and ethical side of socially responsible consumption
Methodology. The author of the paper performed the systematic and comparative analysis of scientific literature in the field of socially responsible consumption, utilitarian and hedonic consumer behavior. As the result theoretical model, measuring the relationship between utilitarian and hedonic consumer behavior and ethical side of socially responsible consumption was found out.
Results. The paper suggest theoretical model, which helps to measure the relationship between utilitarian and hedonic consumer behavior and ethical side of socially responsible consumption. Utilitarian consumer behavior will be measured with the constructs like monetary savings and convenience, as the hedonic behavior will be described by using entertainment and exploration constructs. Permorfed literature analysis suggests, that hedonic consumer bahavior has greater impact on socially responsible consumption than utilitarian consumer behavior.
Value/originality. Measurement of the relationship between the utilitarian and hedonic consumer behavior and socially responsible consumption may contribute to the knowledge of new characteristics, describing the socially responsible consumer.
Keywords: socially responsible consumption, hedonic, utilitarian. JEL Classification: M31, M39. Paper type: Theoretical paper.
EXPANSION OF THE ORGANIZATION INTO NEW MARKET:
A SYSTEMATIC APPROACH
Edverdas Vaclovas Bartkus Kaunas University of Technology, Lithuania Donatas Pilinkus, Paulius Ausmanas
Vilnius University Kaunas Faculty of Humanities, Lithuania Purpose. Organizational development strategy is based on the market and organization’s
vision, values and priorities. Providing cardinal changes or ambitious goals, it is necessary to assess whether the organization is able to do so. Assessment of the organization in general, includes evaluation of the key organizational systems, business processes and the results.
Methodology. Comparative analysis of scientific literature, empirical research: statistical data analysis, document content analysis, survey, using unstructured interview method and questionnaire method, analysis and synthesis, the theoretical modeling.
Results. There should be presented the main results and findings of the paper. A systematic approach together with the comprehensive study provides global and holistic understanding about
94
the organization and its activities according to the potential foreign market macro environment. All the studies, starting from market environment analysis, evaluation of the organization’s vision elements, business unite assessment system, evaluation of the companies added value elements in existing markets allows to identify majors gaps in all business elements and helps to minimize the risk. Systematic approach includes analysis of all business elements such as company’s structure, strategy, systems, skills, staff, shared values, and style.
Practical implications Properly carried out organization performance evaluation helps to maximize it’s potential and brings the highest results. One of the most important assessment aspects – comprehensive study and application of systematic approach.
Value/originality. Theoretical organization’s expansion model into foreign market provides the guidelines how to analyze the market, evaluate external and internal environment and take a decision to do or not to do.
Keywords: systematic approach, organization, market, expansion model. JEL Classification: M31, M21. Paper type: Research paper.
PUBLIC AWARENESS TOWARDS HYDROGEN ENERGY DEVELOPMENT AND IMPLEMENTATION IN LATVIA
Justs Dimants, Biruta Sloka, Janis Kleperis University of Latvia, Latvia
Interest of hydrogen implementation in power sector has significantly expanded internationally
as a response to increasing concerns with growing demand for energy, healthy economy development, energy efficiency and environmental issues. Massive investments in research and demonstration programs are being realized world-wide. Hydrogen energy has attracted attention of both natural and social scientists in relation to questions about public perception and acceptance. Review is made about experience of marketing activities of hydrogen technology implementation around the world to study public acceptance and awareness creation for hydrogen technologies from different angles. From referred examples it is recognised that an acceptance can be referred to different factors like life experience, accumulated knowledge, education, practical experience and marketing.
Purpose. Study public awareness and acceptance for new technology (e.g. hydrogen energy) implementation in power sector.
Methodology. Online public marketing survey was made in Latvia in February 2013 to measure society attitudes towards implementation of new technologies (e.g. hydrogen). Descriptive statistics was used to analyse the results, statistically average values were used to measure responses.
Results. Main results reflected that majority of the respondents were very positive to hydrogen energy (with surprisingly high evaluations). It was concluded that majority of residents in Latvia are interested in renewable energy and new energy technologies. Society as a whole would support the use of hydrogen energy. Government institutions must cooperate with scientific institutions and private companies for renewable energy technology development, implementation and promotion.
Practical implications. The results will be used in purpose to develop marketing strategy for hydrogen implementation in Latvia.
Value/originality. An original questionnaire was made in cooperation with Latvian hydrogen association and Riga Energy agency. The results will be used to encourage cooperation between government, private and scientific institutions to develop hydrogen energy.
Keywords: marketing, renewable, energy, hydrogen. JEL Classification: M31. Paper type: Research paper.
95
BANK CUSTOMER SEGMENTATION: THE CASE OF CEE COUNTRIES
Jana Erina, Natalja Lace Riga Technical University, Latvia
Purpose. The purpose of the present paper is to analyze the opportunities for segmentation of
bank customers at the banks in Central and Eastern European EU countries. Methodology. The authors study the Czech Republic, Estonia, Hungary, Latvia, Lithuania,
Poland, Slovakia and Slovenia as representative countries of Central and Eastern Europe. All countries mentioned joined the European Union in 2004.
To achieve results of the present research, the authors have conducted quantitative (descriptive and experimental) and qualitative (content) analysis of 1) scientific literature on customer segmentation criteria and the main types of customer segmentation; 2) the evaluation of profit potential of bank customer segments in CEE states on the basis of publicly available information and bank annual reports.
To evaluate profit potential of bank customer segments the authors used such indicators as customer bank deposits and loans in the period from 2011 to 2012.
Results. One of the main factors in developing long-term relationships with the customers, the banks should focus on all customer segments to improve cost-efficiency in the future. Performing customer segmentation it is essential to understand the needs of each segment for the banks to be able to develop high quality goods and services.
Although customer segmentation as a marketing strategy is widely discussed in scientific literature, attention is mainly focused on natural persons rather than on legal entities. Having conducted the research the authors have come to the conclusion that one of the most frequently used methods of determining customer segments within the framework of bank marketing activities is the segmentation based on demographic data for natural persons and financial performance indicators for legal entities.
The research has also demonstrated that banks in CEE countries mainly distinguish two customer segments – natural persons and legal entities, which further are either segmented into more detailed segments or are not segmented. The only exception is Polish cooperative banks, which distinguish three to four customer segments: natural persons, enterprises, municipalities, and farmers.
Practical implications. The research performed by the authors presents information on the most typical bank customer segments in CEE states, which will allow the banks to assess customer segmentation and good practices used in other countries in developing marketing strategies in future to acquire and keep loyal customers in the long term based on needs of segment.
The authors study carried out will be useful for CEE banks to development of future strategies.
Value/originality. The authors consider that in the contemporary knowledge economy the customer is one of the primary resources of the bank, that is why it is essential to focus attention on sustainable relationships with the customers understanding the needs of each customer segment. Also the research performed by the authors conducted that most profitable customer segments are those that based on needs of customer.
This paper fulfils an identified customer segments needs and give practical information about evaluation of profit potential of them.
The authors consider that in order to fully realize the interconnection between profitability of the bank customers and future potential and perspectives of each customer segment it is necessary to perform additional investigations.
Keywords: customer segmentation, banks, CEE countries. JEL Classification: A13, G21, M31, O15. Paper type: Research paper.
96
CONTROLLABLE FACTORS IMPACT ON CONSUMER ONLINE BEHAVIOUR
Rimantas Gatautis, Asta Kazakevičiūtė, Mantas Tarutis Kaunas University of Technology, Lithuania
ICT adoption and diffusion continues to grow between enterprise and consumers. ICT brings
new opportunities for enterprises in particularly enabling them to enter virtual global market as well as develop sales activities in this market. Growing ICT adoption intensifies competition between companies opening wider choice for online consumers. In this context enterprises strives to understand online consumer behaviour in order better satisfy consumer needs and stay ahead of competition.
Purpose. The paper aims to develop conceptual framework of key controllable of consumer behaviour factors and empirically identify main of them.
Methodology. The theoretical model is based on various research previous work scientific and comparative analyses. Analysis consider A. G. Parson (2002), Peppard (1998), Lee and Park (2003), Dennis, Merrilees, Jayawardhena, Wright (2009), Constantinides and Geurts (2005), Limayem, Cheung and Chan (2003, 2005) research in online consumer behaviour area. Basing on earlier research conceptual model of controllable factors affecting online consumer behaviour is developed. The proposed model identifies two behaviour stages – intention and adoption, as well as three groups of factors affecting behaviour- characteristics of product/service, characteristics of medium, characteristics of process (merchant and/or intermediate). The proposed model is empirically validated in Lithuania. The key controllable factors are identified using factorial and correlation analysis.
Results. Considering various scholars works the conceptual model is developed basing on Intention, Adoption, and Continuance model proposed by Limayem, Cheung and Chan (2005). Proposed model consist of 2 stages – intention and adoption as in this paper consumer behavior is analyzed. Continuance stage refers to repeating purchase, so this stage is excluded from proposed model.
Most of researchers consider controllable and uncontrollable factors. From the point of the company controllable factors attract most of the attention as these factors can be influenced. The conceptual model consists of medium characteristics factors (such as website design, functionality, etc.), product/services characteristics (product knowledge, price, etc.) and process characteristic factors (services quality, after sale services, ect.)
The empirical research data demonstrate all controllable factors groups’ affects online consumer behaviour, but the most significant impact is by product characteristics group factors. The assessment of individual factors, the most influencing factors of intention and adoption to buy a virtual environment is website reliability and safety, seller's service quality, user data privacy and security controls, and delivery services. Behaviour is also affected by price and product knowledge.
Practical implications. The paper outlines key controllable factors affecting consumer behaviour in virtual environment. These factors should be carefully considered by online traders as they impact consumer decision to purchase online.
Value/originality. The proposed conceptual model is based on “intention – adoption” approach rather than on traditional buying decision model. Value of paper is reflected through identification of key factors affecting online purchase behaviour in Lithuania.
Keywords: online consumer behaviour, intention, adoption, controllable factors. JEL Classification: M31, M39. Paper type: Research paper.
97
STAKEHOLDERS’ INVOLVEMENT IN DESIGNING BRAND IDENTITY OF TOWNS –PODLASKIE REGION CASE STUDY
Ewa Glinska
Bialystok University of Technology, Poland Magdalena Florek
Poznań University of Economics, Poland
Purpose. Recent publications on place branding emphasize the role of social participation in the process of building a local brand. The main purpose of the paper is to present the process of identifying brand identity distinguishing features of nine small towns in Poland in relation to the desired image as seen by local stakeholders. The paper contributes towards laying the foundations of a participatory view of place branding.
Methodology. The research method used in developing this paper was focus group interviews (FGIs) carried out in the period July 2011 - June 2012 in towns in Podlaskie region in Poland. The FGIs covered local leaders invited according to lists compiled jointly with the analysed towns’ municipality employees responsible for their town promotion. The respondents represented the towns’ different fields of life including culture, education, business, local associations, the media, church parishes, etc. The FGIs’ participants were moderated towards identifying their towns’ identity distinguishing features which seem most attractive from the marketing point of view and could potentially be used by local authorities in desired town-image management
Results. Research work carried out for the needs of this paper allows to develop a theoretical basis for place brand building for the towns (taking into account the views of local stakeholders), thus making it possible to outline certain conditions regarding the selection of the towns’ attributes for the needs of their marketing activities. Such knowledge is essential for the towns’ managers who more and more frequently take efforts to increase the recognizability of territorial units managed by them. Although the results represent the internal perspective - the views of local stakeholders - they constitute a significant contribution to the process of town/city brand identity creation. An internal belief in the attractiveness of particular components of a given town is usually a starting point for translating them into advantages that build brand identity of the place.
Practical implications. The discussion suggests local authorities some accuracy parameters for selection of distinguishing features of the local brand identity in relation to small towns according to perception of their local stakeholders.
Value/originality. The paper provides an attempt to systematise the stakeholders’ role in the place branding process, based on the newest literature on the subject (the works of M. Kavaratzis, S. Anholt, R. Govers, E. Braun and others). An additional value of the paper is the fact that the analysis of the range of perceived distinguishing features of place identity is based on Anholt’s city brand hexagon classification, which has been adapted to smaller towns.
Keywords: marketing, place branding, participatory place branding, place identity, place image.
JEL Classification: M31, M37. Paper type: Research paper.
98
INFLUENCE OF SHOPPING CENTRE IMAGE ATTRIBUTES ON CUSTOMER CHOICES
Rasa Gudonavičienė, Sonata Alijošienė Kaunas University of Technology, Lithuania
Purpose. The purpose of this paper is to identify the image attributes determining shopping
centre selection in Lithuania. By applying Pajuodis (2005) statement that shoppers select shopping centre by its image and the model of Sit, Merrilees & Birch (2003), this paper develops suggestions of what shopping centre image attributes should be emphasized in shopping centre promotional campaigns and how to improve the perceptions of shopping centre patrons of the overall centre image.
Methodology. The theory part of the paper uses systemic and comparative scientific literature analysis. Based on Lithuanian and foreign authors' scientific works, the paper analyses image attributes that influence the selection of the shopping centre as a place for shopping and leisure. The concept of a shopping centre (Guy, 1994; Pajuodis, 2005), the specifics of activity and the particularity of marketing complex (Kirkup & Rafiq, 1999; Hunter, 2006) are also analysed, linking the to the major shopping centre image attributes. Scientific literature that analyses the specifics of selection of a shopping centre as a place to shop has two main research directions:
1) Determination and evaluation of shopping centre attractiveness factors that influence the selection of the shopping centre (Dennis, Marsland & Cockett, 2001; Dennis, 2005; El-Adly, 2007).
2) Determination and evaluation of shopping centre image attributes that influence the selection of the shopping centre (Nevin, Houston, 1980; Finn, Louviere, 1996, Wong, Lu, Yuan, 2001, Sit, Merrilees & Birch, 2003).
However, as is noticed by many authors, attractiveness and image are inseparable, a lot of their elements are the same, as attractive shopping centre factors form a good image.
An empirical study was conducted applying a quantitative method for data collection – a survey. The study was based on the research methodology of Sit, Merrilees & Birch (2003), supplemented with insights from previous studies by Warnaby & Yit (2005), Dennis, Marsland & Cockett (2001, 2002).
Results. After generalising theoretical shopping centre image aspects, attributes that represented the shopping centre image was identified. A review of the retailing literature reveals eight dominant attributes in shopping centre image studies: 1) merchandising, 2) accessibility, 3) service, 4) atmospherics, 5) amenities, 6) ambulance, 7) entertainment and 8) security. An empirical study indicates main chopping centre image attributes exactly in Lithuanian market.
Practical implications (if applicable). Theoretical insights and empirical study results in this paper may be useful for managers of shopping centres in Lithuania. Knowing which shopping centre image attributes and their elements (proper combination of leaseholders, merchandising, accessibility, etc.) are most significant for different segments enables application of various means of marketing via different channels to help improve customer satisfaction and ensure sufficient customer flows.
Value/originality. As the number of shopping centres in the world increases, so do studies that aim to determine various aspects related to these shopping complexes. Reasons for shopping at a particular shopping centre – one of the most analysed areas; however, despite the attention shopping motivation studies receive, few studies analyse how different consumer segments react to actions of shopping centre marketing, what aspects dominate the during the selection of a shopping centre as a place for shopping and leisure. Very few indepth studies of such nature in the Lithuanian market have been conducted, hence the originality of this paper. Results from the empirical study enabled the determination of principal image attributes that influence the selection of shopping centres in Lithuanian market.
Keywords: shopping centre, image, image dimensions, merchandising, accessibility. JEL Classification: M31. Paper type: Research paper.
99
SOCIAL COMMUNICATION AND DIFFUSION OF INNOVATION – A SYSTEMATIC APPROACH TO IDENTIFYING ALPHA
COMMUNICATORS
Günter Hofbauer Ingolstadt University, Germany
Purpose. The main purpose of this paper is to show different types of social communication
which have an influence on the diffusion of innovation. Considering this knowledge marketing researchers and marketing managers have the possibility to successfully manage the diffusion of innovation as well to display and analyze it. The diffusion of innovation is a dynamic process within a social system. This process is driven by communication, such as a company’s advertising, as well as by social (e.g. word-of-mouth) communication within the social system (e.g. the market or target group). It is a fact that social communication has a high impact on the buying decision of potential customers.
In everyday marketing tasks these dynamics are determined by complex structures and interactive processes. By these means the structures are powered by networks and social groups, and the processes are powered by social communication. In order to foster the power of communication in successful marketing, every marketing manager should be aware of the communication structures and processes.
Specific types of communicators are responsible for sharing and multiplying information and for generating trust in a customer’s decision to adopt an innovation. In order to create value in communicating with customers, it is important to identify and target these communicators.
Methodology. The approach is a theoretical approach using comparative analysis of scientific literature. The outcome provides a systematic overview of different types of communicators. Because they have an overriding importance, they are called alpha communicators. This paper could serve as the basis of continuing academic research.
Results. In general, the main result is a systematic overview of the different types of alpha communicators, including their role and behaviour within a complex and dynamic social system. The driver of complexity and dynamics is not the amount of members of a social system, but rather the variety of interactions between the members of that social system.
The specific findings of the paper can be summarized as: - firstly: giving a systematic overview of the different types of alpha communicators; - secondly: distinguishing between reactive and proactive alpha communicators; - thirdly: characterising alpha communicators as giving information or as giving an impulse
to the buying decision. Practical implications. The practical implication is to show the different types of alpha
communicators for the diffusion of innovation. Furthermore marketing managers should have a clear understanding of the dynamics of social communication, especially in using social media for communication, e.g. blogs, tweets and so on.
Value/originality. The value of this article lies in the systematic characterization of the different types of alpha communicators. This article could be the basis of an empirical study to analyse the specific impact of different alpha communicators. The originality in this paper is the unique combination of social communication and the diffusion of innovation.
Keywords: communication, diffusion, innovation, alpha communicators. JEL Classification: M 31. Paper type: Theoretical paper.
100
THE CUSTOMER EDUCATION INFLUENCE ON DECISION MAKING IN HOME LOAN MARKET
Ksenija Ijevleva University of Latvia, Latvia
Purpose. The aim of this paper is to consider the customer education influence on their
decision making. The paper also examines the home loan context within customer knowledge initiatives are statistically significant. More specifically, it investigates the restraining effects of increasing levels of customer knowledge (i.e. the result of customer education) on the importance of technical product quality (what is offered) and functional product quality (how it is offered) in determining the purchase decision in such high involvement product services context as home loan.
Methodology. The aim of this paper was reached by investigating the relationship between customer knowledge and education and their combined influence on customer decision making. The paper suggests the conceptual estimates that formalize the study objectives as a set of testable hypotheses. The hypotheses are tested on the basis of sample of 1085 high value customers from the commercial banks throughout all Latvian regions. Data were gathered through self-administered questionnaires using Internet interview. An analysis of the respondents’ demographics and the results are presented.
Results. Study findings indicate that there are statistically significant differences between several demographics groups in their assessment of the education and knowledge level. Also there is high correlation coefficient between education and knowledge level, and as a result there is correlation between customer knowledge and readiness to obtain home loan. Therefore some hypotheses were confirmed.
Practical implications. Customer education and knowledge in the financial products market has received greater attention from commercial banks, government institution and researchers in recent years after the heavy fall in economy 2009. Thus the Financial and Capital Market Commission in Latvia has created “Customer School” as a key element in the customer educational process. The results of this paper assume that there are the opportunities for commercial banks to deal in similar initiatives. Potentially two areas of managerial practices follow from this paper. The first is that commercial banks should include customer education into their marketing strategies. The second is to be aware of the changes in customer perceptions, because education contributes to customer knowledge over time. In doing so, the paper leads to provide involvement for the commercial bank for administrating the service and product offering.
Value/Originality. Where there is impressive count of studies on customer education and knowledge, there is lack of appreciation of how customers apply this knowledge. It is proposed that this study can highlight such subject sights as correlation between education and knowledge level and knowledge influence on the home loan market.
Keywords: home loan, marketing, customer knowledge, customer education, commercial banks.
JEL Classification: M31, C12, G21. Paper type: Research paper.
101
LEISURE SERVICES CUSTOMERS’ BEHAVIOUR – WHAT FACTORS ARE CRUCIAL?
Neringa Langvinienė Kaunas University of Technology, Lithuania
Leisure services are scare analyzed phenomena. Their specifics describes that they are
consumed during leisure time, free from responsibilities (Lin, Pao, 2011; Rodríguez, 2011). Consuming the leisure services could act as prevention mean from illness, stress and other negative aspects of life (Hofer, Honegger, Hubeli, 2012). Job time also could be defined as leisure while individual loves it (Leither, Leither, 2012). Growing attention to our live, valuables – forces to estimate, what influences actions in order to spend the leisure. Scientific researches (Page, Connell, 2010) showed that qualitative leisure time is crucial for representing the status of individuals. That is why young people after graduating the school do not enter the universities – they travel around a world, and only after two-three years thinks about their studies. The supply of leisure services is very large: from non-commercial to commercial (Tribe, 2011); from leisure home-based, to recreation and travel-based (Langvinienė, 2012). While non-commercial services could be used by anyone who has free time and possibility to go to the place of destination, non-commercial services consuming usually is limited by costs, purchasing power of customer, agreement with a family and friends to spend time together, accessibility of services supply, and, of course, time for consuming. As leisure services usually are not primary, costs and time for leisure services compete to cost for feed, closes, security, etc.
Purpose of the paper is to disclose the factors, influencing the leisure services customer’s behavior.
Methodology: scientific literature analysis, analysis of results based on written form questionnaire, comparative analysis.
Results showed that three main classes of factors influencing the behavior of customer are developed: individual; social and environment factors; possibilities. Age of a customer, stage of life cycle, family’s life, wishes and goals for life, personal responsibilities, estimation of leisure, views and motivation could be defined as individual; education, social status and roles, duties and responsibilities, free time, mobility, material welfare, occupation – as social and environment; and accessibility of leisure services, awareness of possibilities, purchasing power, location of suppliers, costs, marketing of leisure, Government politics – as possibilities factors. Customers consume more frequent commercial services instead of free of charge. Preferences are paid to services what enables to rest from stress and thoughts from job and family’s life and for services during what meeting with friends is possible. Findings showed, that factors of influence the customer’s behavior correlate to the place of consuming the service: home-based, recreation-based and travel-based. There is no strong correlation between value appreciated of leisure services customer and commercial basics of a service. Summarizing the factors, influencing the customer’s behavior it should be noticed that the urgency of factors depends on where and what services are consumed during individuals leisure.
Practical implications could be identified for leisure services providers, as well as Government thinking about possibilities to provide leisure services accessibility for different segment of customers.
Value/originality. There is no systemic research on the factors what influences the choice of leisure services. As 472 customers were inquired, results of the research are rather significant for taking strategic decisions.
Keywords: leisure services; services customer’s behavior; factors of influence. JEL Classification: D12, L83, L84. Paper type: Research paper.
102
BUSINESS MODEL FOR SMALL AND MICRO ENTERPRISES OPERATING IN E-ENVIRONMENT
Pāvels Lindemanis, Deniss Ščeulovs Elīna Gaile-Sarkane
Riga Technical University, Latvia Many business models are built on the basis of competitive strategies. Meanwhile, the core
element of several competitive strategies is value gained by consumers as they consume the product and also by entrepreneurs as they create and sell the product.
Purpose. The purpose of the article is to analyze existing business models and on the basis of this analysis to offer the most suitable business model in e-environment for small and micro enterprises of Latvia. The analysis is based on the evaluation of role and value in context of different competitive strategies.
Methodology. The theoretical and methodological background of the article is based on scientific research, publications in mass media and professional literature, as well as information obtained by the authors during the research process. The authors employ well known research methods like content analysis, statistical analysis, field research; expert method, as well as mathematical methods for data assessment, comparison and visualization.
Results. In the article, the authors analyze the value concept within context of management competitive strategies. Based on the field research and expert method, the authors analyze the value of the company life cycle, to point out which stages are mostly linked to the application of electronic environment for development of business model and creation of the company value. Upon analyzing various business models, the authors of the article have come to a conclusion that the Osterwalder’s Business Canvas is the most suitable model for the enterprises, especially small and micro enterprises of Latvia for development of appropriate business model and for creation of the value for all company stakeholders. The proposed model in the article is built upon the stakeholder theory, while applying it to the electronic environment.
Practical implications. According to the research results it is concluded that the main issue for small and micro enterprises is a lack of different kind of resources. Application of different e-tools and development of appropriate business model in e-environment can help replace the lack of resources and drive a company towards further development. A lot of e-environment’s tools a company can use with minimal investment or free of charge. The given model can be used by small and micro enterprises, which operate in the electronic environment and electronic market, by adapting it to their needs, requirements, and field of operations. Value/originality. The paper offers attempt to adopt existing business planning models to small and micro companies for an application of e-tools to business with an aim to increase company profitability with minimal investments. The paper has value to company owners and managers.
Keywords: small and micro enterprises, value, business models, e-environment, competitiveness. Jel Classification: M21, D04, D21. Paper type: Research paper.
SERVICE BRAND BUILDING PECULIARITIES
Jūratė Maščinskienė, Indrė Jucaitytė Kaunas University of Technology, Lithuania
Purpose. This paper aims to reveal the peculiarities of service branding building, identifying
factors influencing successful service brands. Methodology. The theoretical study was performed by employing systemic, comparative and
logical analysis of scientific literature.
103
Results. This paper investigates the peculiarities of service brand building, sources of value creation and identifies the factors influencing successful service brand building. The significance and substantiation of the problematic of service brand building is revealed. After an analysis of the scientific literature, it was observed that there was no consensus regarding the specifics of service brand building. There is a lack of comprehensive, consistent studies revealing the preconditions of service brand building success. Therefore, it is important to find out what determines consumers’ decision when choosing service brands, and how to build and retain service brands with their unique characteristics. This study addresses this research gaps in the existing literature by identifying the factors that determine the success of the service brands. The scientific problem is formulated by question – what are the factors of successful service branding?
The first section of the paper reveals the problematic aspects of service branding. The second part provides the theoretical review of brand building in service sector. This part of paper analyses how to create and develop successful services brands, because service branding, unlike product branding, is more about internal consistency, places more emphasis on managing the total service brand experience and it is more about social processes.
Practical implications. The service branding aspects investigated in the paper enables companies to turn to today's consumer, who appreciate the companies’ modern approach toward changes in the market and who gives priority to strong product and service brands. Based on the methodology presented in the paper the identified factors determining the success of service brands will enable companies to determine the appropriate marketing means that allow increasing service brand value and remain competitive in the market.
Value/originality. Successfully selected service branding strategy helps to increase market share and distribute high promotion costs between the partners. Services are conceptually different than physical products, they have unique number of characteristics, including the intangibility, inseparability of production and consumption, variability in quality and perishability. Researchers argue that brand building in service providing companies has a particularly important role due to the fact that strong service brands increase clients’ trust in respect to the invisible things, enables them to better visualize and understand intangibility and reduce clients' perceived financial, social or safety risk.
The analysis of the scientific literature on service brands summarizes the service brand building process, consisting of nine stages (identify external opportunities, identify internal capabilities, define the brand, consider feasibility of brand, ensure internal commitment, positioning and differentiation, structure organizational resources, market testing, operationalization) and enable the identification of factors influencing the service brad success: focus position, consistency, values and systems.
Keywords: service brand, service brand value, factors of successful service branding. JEL Classification: M10, M19, M30 M31 M39. Paper type: theoretical paper.
THE IMPACT OF SHOCKING ADVERTISING TO CONSUMER BUYING
BEHAVIOR
Miglė Matulevičienė, Regina Virvilaitė Kaunas University of Technology, Lithuania
Purpose. The purpose of the article is to identify the impact of shocking advertising to
consumer buying behavior. Methodology. Seeking to realize the purpose, research was performed using methods of
systematic and comparative analysis of scientific literature. Scientists proved that shock tactics in advertising influences consumers' purchase behavior. The conception of shocking advertising vary
104
from attracting audience to criminal activity promotion, according to shocking advertising elements, which Dahl et al. (2003) summarized and singled out as disgusting images, sexual references, profanity/obscenity, vulgarity, impropriety, moral offensiveness and religious taboos. These shocking advertising elements are basement for various researches. The findings of Baron and Byrne (1977), Childers and Houston (1984), Vezina and Paul (1994), Dahl et al. (2003), Andersson and Pettersson (2004) revealed important contribution to shocking advertising when the key components of shocking advertising were identified. With reference to these scientists, shocking advertising contains distinctiveness, ambiguity and transgression of norms and taboos. In order to be effective, shocking advertising must contain these three components. However, the link between shocking advertising and consumer buying behavior is considered to be suitably unexplored. Plenty of researchers have made an attempt to investigate the influence of shocking advertising on consumer buying behavior, however had not reach consensus.
Results. Theoretical research studies confirmed that positive or negative consumer attitudes to shocking advertising is influenced by sociodemographic and cultural-social factors - religiosity, moral principles, age, gender, individualism-collectivism, high-low context language. It was found that major religiosity influences more negative attitudes to shocking advertising whereas religiosity defines commitments to be observed (Sabri, 2012) and moral principles frequently has a negative impact to consumer buying behavior (Andersson and Pettersson, 2004). Prendergast and Hwa (2002), Liu et al. (2009), Brugiere and Barry (2011), Sabri (2012) empirical researches revealed, that older consumers were more shocking advertising has a major negative impact on women than on men. Investigating cultural-social factors to consumer buying behavior, Sawang (2010) found that stronger collectivism influences negative impact to consumer buying behavior whereas individualism has a positive impact to consumer buying behavior. In connection with cultures, low context language influences more positive attitudes to shocking advertising than high context language (Liu et al., 2009). These summarized trends can be used as the basis for other similar studies.
Value/originality. The link between shocking advertising and consumer buying behavior is considered to be suitably unexplored and requires a detailed theoretical analysis. According to theoretical research studies, there were identified basic components of shocking advertising and socio-demographic, cultural-social factors, which influence consumer buying behavior. Developed a theoretical model of the link among the socio-demographic and cultural-social factors, consumer perception of shocking advertising and consumer buying behavior, which can be used for further practical studies.
Keywords: shocking advertising, consumer buying behavior, consumer perception of shocking advertising, socio-demographic factors, cultural-social factors.
JEL Classification: M37. Paper type: Theoretical paper.
SIGNIFICANT METRICS OF MARKETING PERFORMANCE
IN CZECH COMPANIES
František Milichovský Brno University of Technology, Czech Republic
Purpose. Marketing and marketing performance is getting to be one of the most important
areas in a lot of companies. This trend is predominately caused by market globalization. Many companies have to improve own corporate marketing activities, especially in industrial branches. These companies use different kinds of metrics which they use to measure marketing activities – particularly metrics from point of marketing thinking. Marketing thinking as approach brings new view on market environment and creates specific marketing tools, which is possible to use in
105
various fields. Industrial companies have almost no comparison with direct competitors in the specific industry, which is only possible using appropriately by chosen instruments. Therefore, there are needs to change attitude towards marketing thinking as part of innovative mind. The purpose of this paper is to find the classification of metrics from reviewed studies which organization use to measuring own marketing activities, focused on performance. The paper presents advance in useable metrics, especially financial and non-financial metrics. Selected studies, focusing on different branches and different metrics, were analyzed by the author.
Methodology. Paper is based on secondary research, includes the systematic and comparative analysis of the scientific articles and books. These sources are focused on marketing metrics, which are divided into many groups, according their classification.
Results. The results of the study are describing relevant groups of metrics to prove efficiency in industrial types of organizations in connection with marketing effectiveness. The study also outlines the potential methods for further research focusing on the application of metrics in diverse environment. The study contributes to clearer idea of how to measure performance and effectiveness, and which groups are possible to use as marketing support.
Value/originality. The paper deals with question how could be supported marketing activities in industrial area. Successful marketing may be competitive advantage but there is not only method for correct comparison of companies in marketing field. Marketing is become almost one of the most important process in whole production and these activities support company sales. Sales in connection with marketing could sustain customer satisfaction as part of quality field. That is why the companies have to improve their marketing activities, and they are forced to look for appropriate metrics for marketing measurement, which need suitable group of metrics.
Keywords: marketing effectiveness, industry, corporate performance, measurement. JEL Classification: L25, M31 Paper type: Theoretical paper.
PERCEPTIONS AND REACTIONS OF TWO CONSUMER
AGE GROUPS TOWARDS THE ECONOMIC DOWNTURN: EXTENSION OF THE 2009 STUDY
Indrė Pikturnienė, Sigitas Urbonavičius Vilnius University, Lithuania
Purpose. The purpose of the paper is to summarise and present differences in spending
patterns between the two age groups (19-26 and 40-68) during period of economic downturn. The method of longitudinal study allows finding how the expectations towards financial situation and spending behaviour change over three years (2009, 2010, 2011). This paper summarizes findings from the three years and expands initial findings of the authors that have been published in 2010.
Methodology. The survey is based on comparison of data from the three sets of respondents, surveyed in spring of the 2009, 2010 and 2011, using the same questionnaire. Convenience sample of students, unaware of survey objectives, were asked to fill in questionnaires themselves and to distribute another part of the questionnaire to a member of their household who is one generation elder (typically – parents). The sampling method allowed assuring the same social strata of both age groups, thus eliminating differences in household income. In total, 455 households were interviewed, each producing two sets of answers to the survey questions.
Data about personal income and spending changes during the past three months, as well as data on expected income and price changes during upcoming three months was collected in a relative form, as a percentage of current level. Further respondents assessed provided emotional responses towards crisis (that is, patterns of consumer behaviour attributable to themselves) using Likert scale. The differences in consumer behaviour between age groups was the major factor under
106
investigation, holding presumption that consumers of different ages will demonstrate different perceptions and reactions towards crisis due to differences in their experience.
Results. The results of the survey showed that younger respondents perceived the impact of the economic downturn in relation with expectations in a more casual way. They had higher expectations towards the income increase, however, spending of both age groups were identified as decreasing or remaining on the same level throughout all the studied years.
Practical implications. Since younger generation perceived economic downturn situation more casually and reported higher expected income, marketing strategies based on brand value, exclusivity, price premiums can be continued to target it even during the economic downturn. The elder generation demonstrated higher caution and frugality, as well as lower expectations towards income, therefore value for price or lower price strategies could be more suitable for this age group.
Value/originality. Longitudinal data on two age groups provides better understanding about consumer behaviour during economic downturn in general, and in Lithuania in particular.
Keywords: economic downturn, consumer behaviour, consumer spending patterns, age groups.
JEL Classification: M30, M31. Paper type: Research paper.
COMMUNICATION IN SOCIAL MEDIA FOR COMPANY IMAGE
FORMATION
Žaneta Piligrimienė, Rita Kuvykaitė Kaunas University of Technology, Lithuania
Purpose. To explore the possibilities of communication management in social media in the
context of company image formation. Methodology. Theoretical studies about communication management in social media for
company image formation are based on comparable and systematic analysis of scientific literature. Empirical research involving image of banks in Lithuania formation with communication in social media employs quantitative (content analysis of social media channels used by banks in Lithuania) and qualitative (semi-structured interview with experts, working in the area of public relations, and focus groups with current and potential bank customers) research methods.
Results. As the result, the conceptual model for company image formation with communication in social media has been developed, reflecting the process of company’s communication in social media. The model involves the following blocks: 1) company’s identity, 2) strategy formation of communication in social media (defines the way how the company’s identity should be presented to target audience), 3) interaction between audience and the message content, 4) interaction within audience and 5) evaluation of company’s image. The image formation begins with the definition of identity – values, organisational behaviour and style. Strategy of communication in social media, which involves definition of the aims of communication, definition of target audience, considerations about message theme and the format of message content, and selection of social media channel for communication, allows defining the way, how the company’s identity should be presented to audience. Perception of company’s image and its evaluation in social media depends on the interaction between the company and audience, as well as on interaction within audience through the message content that company and customers are sending to each other. According to the results of communication in social media – positive, neutral or negative image – the elements of identity and the strategy of communication in social media could be corrected. Empirical research of the image of banks in Lithuania allowed to make some revisions in the conceptual model, adding the stages of competitor analysis and resource distribution to the
107
model block of communication strategy formation, and eliminating the stage of message content format selection.
Practical implications. Recently the increasing number of companies uses the social media for creation of positive image. But if the nature of social media communication and the possible risk for company’s image is not assessed appropriately, companies could lose the positive image very quickly and for a long time. Communication in social media is much more complicated than traditional communication, because consumer response and intercommunication limit the possibilities for company to control and manage the content of communication. The success of social media communication for image formation depends on the preparation to communicate in social media. Management of new technologies and communication channels, management of trust and relationship in social media require new skills. The model presented in this article allows answering a question: how to manage company’s image through an effective strategy of social media communication.
Value/originality. Analysis of scientific literature reveals the number of studies devoted to specific features of company’s image management with communication in traditional media. Participation of companies in social media and integration of social media to image formation only recently have got a particular attention in academic and practical field. There is still a lack of empirical evidences. The authors of the article present the study of the company image formation within the context of communication in social media, which allows defining concrete requirements for effective communication in social media in developing the image of the company.
Keywords: communication, social media, company image. JEL Classification: M30. Paper type: Theoretical and research paper.
DUAL SIDES OF HEALTH CARE SERVICE QUALITY:
WHAT IS REALLY IMPORTANT FOR PATIENTS?
Žaneta Piligrimienė, Aušra Rūtelionė Kaunas University of Technology, Lithuania
Purpose. The main purpose of the paper is to explore the duality of the patients’ view to
service quality of health care organizations. Methodology. Theoretical studies on health care service quality as perceived by patients are
based on systematic and comparative analysis of scientific literature. Empirical research on the importance of attributes of health care service quality for patients employs quantitative survey using self-administered questionnaires.
Results. There are a number of studies on service quality from different perspectives. And of course service quality has been analysed in different service sectors. Health care service sector is the one that also requires and gets a lot of attention when analysing service quality issues. Some authors analyse health care service quality from marketing management perspective, treating patients as consumers and emphasising patient perceived service quality definition. Other studies involve service providers’ point of view to health care service quality. There is also a substantial amount of literature that compares patient and health care professional views to service quality. Still, the biggest number of studies involve analysis of health care service quality as perceived by service receivers, i.e., by patients. And these studies usually employ one of two major approaches to service quality: 1) so called “Nordic school” approach with reference to technical-functional quality model (Gronroos, 1984, etc.) or 2) “American school” approach, which refers to SERVQUAL model (Parasuraman, Zeithaml & Berry, 1985, 1988). It has to be noted that the operationalization of both concepts generally covers functional quality aspects, because it has been found that health care recipients have difficulty in evaluating technical quality. Analysis in this article concentrates only to those health care service quality aspects that can be easily evaluated by patients: service
108
environment or tangible aspects (where the service is provided) and interpersonal aspects (how the service is provided). As there are some empirical proves that tangible aspects are very important to patients, because environment can decrease psychological discomfort linked with fear and anxiety concerning persons’ health (Rees, 1998; Lee et al., 2000), and that inability to assess treatment and its outcomes lead patients to rely more on the manner how the service is provided to them (i.e., functional quality), it should be worth to explore, which of these two aspects is more important to patients. The results of empirical research in this study allow identifying the importance of different health care service characteristics. It was found that importance of environmental aspects and interpersonal aspects for patients differ, depending on socio-demographic characteristics of patients, but in general, these two sides of health care services are of almost similar importance.
Practical implications. Marketers always try to identify those service aspects that bring the biggest customer satisfaction. As long as health care service providers began to realise that patients should be treated as customers, they face the need to understand, what service aspects are the most important to patients. There is no arguing that the most important thing for patients when talking about health care services is good health outcomes. But there are plenty of evidences, that patients do not have competence for evaluating technical quality that in fact represents the outcomes of treatment, professional knowledge and skills of physicians, etc. This article allows identifying those criteria of service that are the most important to patients as customers of health care service organizations, and that can be easily assessed by patients. In this way, the results provided here can serve as a background for managers of health care organizations, in efforts to decide how to identify those service areas that require improvement and which of them should be seen as priority.
Value/originality. The authors of the article present the study of patient perceived health care service quality, which allows defining the importance of different service aspects for patients and to complement existing findings about what is more important for patients – tangible or intangible aspects of service.
Keywords: health care service quality, patients’ perception, tangible aspects of service quality, interpersonal aspects of service quality.
JEL Classification: I11, I19, M10, M31. Paper type: Research paper.
INVOLVING CONSUMERS IN THE VALUE CREATON
IN THE CONTEXT OF ICT DEVELOPMENT
Aistė Ragauskaitė, Regina Virvilaitė Kaunas University of Technology, Lithuania
Purpose. Opportunities of shared value creation promote to identify and understand
consumers involvement in the value creation phenomenon. Analyzing different types of consumers and factors, which influence the involvement in the value creation, the process of customer involvement is perceived as a complex system, which the company has to control in order to get full and active participation of consumers. The aim of the work – prepare a conceptual model of consumers involvement into the value creation in the context of the development of ICT.
Methodology. The following tasks are held in order to reach the aim of the work: in the marketing theory reveal the concept of value to the user; base peculiarities of the customer involvement in the value creation; identify and describe leading factors of consumers’ involvement into the value creation process; develop a conceptual model of consumers’ involvement into the value creation in the context of the ICT development. Despite social and economic transformations, both the traditional and the latest marketing theories reveal that an idea of value creation for customers remains relevant research object. This is supported by marketing researchers’ argument that company’s success depends on its ability to provide substantial, sustainable and unique value to
109
consumers. Although traditionally it is claimed that the value is created in companies and is directed to consumers (Rayport, Jaworski 2000; Pigneur, Osterwalder, 2004), but the consumers are enabled to actively participate in the various activities of the company based on conditions of ICT development (Solis, 2010; Marsden, 2011). In response to this, companies are forced to take a fresh look into the value creation process, that means to evaluate consumers possibility to be involved in the value creation, underlying assumptions for the shared value, from which provides benefits to both the consumer and the enterprise. In this context should be noted that the user change his position from passive to active and involvement in the value creation provides additional benefits as well as increased general satisfaction with the perceived value.
Results. First of all it seeks to reveal the conceptual essence of the value in the latest marketing theories. It identifies the shared value dimensions, supported by its development theoretical approaches (Dholki et al., 2003; Olsson, 2004; Prahaland ir Ramaswamy, 2004). The paper identifies and supports the dimensions of shared value for the user. Reveal features of consumers involvement into value creation. The concept of consumers’ involvement is based as well as identification of the factors which determine the consumers’ involvement into the value creation. Based on generalized theoretical provision, a conceptual model of consumer involvement into the value creation in the context of the development of ICT is prepared.
Value/originality. Traditionally value is created in company and directly offered to users, but in ICT development conditions users are included to participate in various activities of the company, especially in value creation process. The optimized value creation process, which actively involves consumers, can deliver the greatest benefits for the company. Therefore, it becomes important for companies to review value creation process, evaluate the need of consumer involvement into value creation and to determine the benefits for both consumers and business. This is a new approach and new researches in consumer and business collaboration interface. The practical results of the paper is a proposition for companies offering a new useful value creating process. This theoretical background will help companies more easily absorb and implement customer involvement in the value creation process.
Keywords: value creation, consumer involvement in the value creation, ICT context. JEL Classification: L23; M30; O32. Paper type: Theoretical paper.
LITHUANIAN COMPANIES IN EMERGING MARKETS: INTERNATIONALIZATION MOTIVES AND BARRIERS
Jurgita Sekliuckienė
Kaunas University of Technology, Lithuania
In the recent year internationalization of company‘s activities has become a necessity seeking to be competitive not only in the domestic, but also the international market. With established domestic and international markets becoming increasingly saturated, companies are increasingly looking to emerging markets, especially BRIC, for sales, profit, and product development growth (London and Hart, 2004). Main factors that influence emerging market attractiveness are size of the market and amount of customers. For foreign investors, the emerging market is an opportunity to expand its market share, production and revenue. From the perspective of the emerging market, it gains an access to the new employment opportunities, transfers of skills and technology, and a source of economic growth (Sing, 2010). Analysis of theoretical and empirical studies allows to state that there are variety of internationalization motives (Žukauskas, 2006; UNCTAD, 2006; Žičkienė, 2008; Zeng et al, 2012) and barriers, that are divided to market entry restrains and operational barriers (Zimmerman, 1999; Ojasalo, 2011) or external and internal (Hutchinson et al,
110
2009). Motivations for internationalization of companies from developed countries differ from the companies from emerging countries (Lasserre, 2004). Scientific researchers agreed that the motives and barriers to internationalisation should be studied based on the situation in each country. There is no unified attitude to internationalization motives and barriers for internationalization that influence emerging markets attractiveness. Especially the internationalization motives of the companies from Lithuania, as emerging country, and barriers to emerging BRIC countries are scarcely discussed.
Purpose is to disclose what are emerging market‘s (un) attractiveness factors that influence Lithuanian companies’ internationalization motives and barriers entering the BRIC markets.
Methodology is systematic and comparative analysis of scientific literature, qualitative research employing semi – structured interviews and content analysis research methods. Primary data collection was made with near 30 managers of Lithuanian services companies what are engaged into the international activities with emerging BRIC markets or are going to do that.
Results are grounded on the comparison and integration of different theoretical perspectives on emerging market attractiveness factors, internationalization motives and barriers issues. Research results showed that small and medium Lithuanian companies, that have internationalization experience in EU markets or one of BRIC’s markets, consider possibilities to expand activities in emerging markets. Emerging markets are attractive due to size of the market, rapid market growth, and expected profit. Empirical research has revealed that analyzed Lithuanian companies motivations for internationalization depend on their scale, size and industry, companies look for distribution partners and entry markets facilitators. The empirical evidence presented in this research provides external and internal barriers to internationalization both perceived and experienced (psychological and geographical distance, cultural differences, and foreseen risk). Markets of Brazil and India have not been found by Lithuanian companies yet, however Lithuanian companies see more development perspectives as well as internationalization values in Russian and Chinese markets, that are described in the paper.
Practical implications are related to managers and investors, who are interested in business development in emerging markets and are thinking about ways how to enter BRIC countries and be successful, how to reduce entry barriers influence. The research may help to enrich the comprehension of internationalization in emerging market phenomena.
Value/originality - the findings of this research provide insight into the perceived and actual barriers to internationalization to BRIC markets encountered by Lithuanian companies. The emerging market‘s (un) attractiveness features and factors that motivate and slowing down Lithuanian companies’ internationalization to BRIC countries have been analysed. Research is valuable in sharing experience of small country‘s companies internationalization preconditions for other emerging countries.
Keywords: internationalization motives, barriers to internationalization, emerging markets, BRIC. JEL Classification: F23, M16. Paper type: Research paper.
MARKETING MANAGEMENT WITHIN CZECH ENVIRONMENT
VIEWED FROM THE PERSPECTIVE OF MARKETING ACTIVITIES
Iveta Simberova, Alena Kocmanova Brno University of Technology, Czech Republic
Petr Nemecek Tomas Bata University in Zlin, Czech Republic
Purpose. This paper strives to describe key marketing activities from the theoretical point of
view and analyze the condition of marketing management within Czech environment by means of
111
the selection and utilization of marketing activities, and to use the results as a basis for a professional discussion of one of the contentions proposed in the research, i.e., that after more than twenty years of operating in a market economy, marketing management remains an area in which Czech companies can seek improvements in order to increase their competitiveness.
Methodology. The discussion and conclusions drawn in this paper are based on an analysis of secondary sources and selected data obtained through a questionnaire survey of marketing management of Czech companies. For the purposes of this paper, only selected data obtained in 2012 were used. The results of the questionnaire survey were processed by means of basic types of descriptive statistics analyses using a selected data set. Data was processed using IBM SPSS Statistics statistical software. The dependency between the two nominal variables was analyzed by means of contingency tables and Pearson’s chi-squared test. The research sample consisted of 300 companies selected randomly from the statitsical register of business actitivities - NACE-CZ, return rate of the questionnaires was 28%. The respondents were managers of the companies under examination who were in charge of marketing and business activities.
Results. The methodological approach chosen consisted in the specification, gathering, analysis and interpretation of data to serve as a basis for the decision on the choice and intensity of utilization of marketing activities with relation to company size. As noted above, when applied in business, marketing activities serve to connect the consumer, customer and public with a marketing specialist through information – information used to ascertain and identify marketing opportunities and threats, the creation, perfection and assessment of marketing events, the monitoring of marketing efforts and improvement of the understanding and application of the marketing process management.
Practical implications. The choice of marketing activities is a part of the process of marketing management of the company. The definition of such activities is a complex theoretical matter influences by the multitude of approaches in the area of marketing management. The choice and utilization of marketing activities is certainly also influenced by the nature of the market or product. The requirements applicable to the choice and utilization of marketing activities, which are conditioned on numerous other factors, rather than mere company size, offer further possibilities for further research in the area of marketing management in the Czech environment.
Value/originality. Despite a great progress in the understanding and utilization of findings and experience with marketing management by companies in the Czech environment, our research showed that there is much room for improvement and that this are continues to offer new and new ways for companies to be competitive.
Keywords: Marketing Management, Marketing Activities, Primary Research, Czech Environment.
JEL Classification: M1, M19, M31. Paper type: Research paper.
FRAMEWORK OF MARKETING PERFORMANCE MEASUREMENT
IN BUSINESS ORGANIZATION
Gelminė Sližienė Kaunas University of Technology, Lithuania
Changing business environment conditions require to revise and to evaluate constantly all
actions that influence business organization success. Marketing plays an important role in business organization. Marketing performance and the success of the organization should relate to each other in the process of customer and value creation, development and delivery, on which business performance depends. From this point of view the important task rises in marketing performance management: to
112
evaluate the expedience of marketing activities and successful realization of marketing tasks. For such valuation the adequate measurement and controlling tools should be developed.
Purpose. The main purpose of the paper is to conceptualize the framework of marketing performance measurement which is based on marketing measurement and marketing controlling theoretical conceptions.
Methodology. The methods used in the study: analysis of scientific literature that examines the tasks and extend of marketing performance, determines the preconditions of marketing performance success evaluation in business organization; comparison of different approaches to marketing performance measurement and systematization of common requirements for marketing performance measurement and valuable methods and measures.
Results. The result of the study is the framework suggested which covers marketing performance measurement processes, activities and measures.
Practical implications. This paper presents an annotated literature review that provides the foundation for the development of a most valuable marketing performance measures suitable for practical implication.
Value/originality. The solution and theoretical systemic viewpoint of marketing performance success measurement and evaluation have been analyzed in this paper. The framework consist of desirable characteristics of marketing performance measuring system and provide guidelines which could be used for marketing performance measurement and controlling system development.
Keywords: marketing in the business organization, marketing performance measurement, controlling.
JEL Classification: M31, M39. Paper type: Theoretical paper.
MANAGING DIGITAL ETHNO PRODUCTS
Inese Spica, Ernests Spics, Baiba Berzina
Business Competence Center, Latvia
Purpose. The object of the present research paper is ethnomarketing. The subject of the research paper is managing of the digital ethno products of Latvia in e-business environment. The purpose of the paper is to study the managment process of digital ethno products and ethnomarketing problems, to elucidate the e-business environment factors influencing the ethnomarketing effectiveness, to develop proposals for solving problems and for digital ethno product management mechanism by making use of relationship between these factors in investigations of managing digital ethno product of Latvia.
Methodology. The tasks advanced in order to reach the main purpose are to identify the concept of digital ethno products and their classification, to carry out analysis of the factors influencing managing digital ethno products, to carry out analysis of indicators characterising managing digital ethno products effectiveness. Theoretical study methods are reported analysis of e-marketing, ethnomarketing, products management, ethno products, digital products, e-business environment. Empirical pilot methods are observation for the purpose of studying mutual influence between e-marketing factors, e-business environment, managing digital ethno products, e-marketing indicators analysis of the managing digital ethno products, economic and statistical analysis of effectivity of the managing digital ethno products in e-business environment, economic experiment.
Results.The scientific novelty of the research are analysis of managing digital ethno products of Latvia, study of e-marketing effectiveness in the e-business environment, development of new trend of marketing management theory, definition of the digital ethno products management,
113
presentation of its theoretical and practical interpretation, exposition of digital ethno product management of Latvia problems.
Practical implications E-marketing is a perspective area. It offers access practically to people all over the world. Of course, language barriers and legislation differences in various countries shall be taken into account. E-marketing creates the possibility to new digital ethno products. Authors identified the managing digital ethno product of Latvia problems and proposed problem solutions in the e-business environment.
Value/originality. This is the first research on the analysis of ethnomarketing factors influencing managing digital ethno products of Latvia in the e-business environment. The presented paper includes further development of study on the contents of marketing management theory.
Keywords: ethnomarketing, ethno products, digital products, management, e-business environment.
JEL Classification: M310. Paper type: Research paper.
CONGRUENCE BETWEEN BRAND AND CONSUMER PERSONALITIES
Eleonora Šeimienė, Vytautas Dikčius, Ermita Žalienė Vilnius University, Lithuania
Purpose. Half a century ago Levy (1959) presented an idea that brands are symbolic
reflections of one’s personality. Fenn et al. (2005) have found brand personality “transfer effect” to consumer personality, and made a conclusion that consumers choose brands not only because they highlight certain aspects of what we are or want to be, but also because brands themselves create those aspects.
The study of Aaker (1997), which related human personality characteristics (using Big Five model) with brand personality characteristics, became the basis of other studies in this field. It is proven that consumers prefer brands with a symbolic function that suits their own identity (Belk, 1988; Escalon and Bettman, 2003; Kleine and Kernan, 1993; Sirgy, 1982; Swann et al., 1992) or allows to express ideal self (Escalon and Bettman, 2003; Fenn et al., 2005). Scientists argue that there is congruence between some dimensions: agreeableness dimension of human personality and sincerity dimension of brand personality; extraversion and ruggedness, extraversion and excitement; openness to experience and competence, conscientiousness and competence (Aaker, 1997; Caprara et al., 2001; Fenis et al., 2005). However, it remains unclear what brand is chosen in case consumer scores high on neuroticism dimension; or what type of personality prefers brand with sophistication dimension. Therefore, the main purpose of this research paper was to relate consumer personality dimensions with brand personality dimensions and fill the existing gaps in scientific literature on topic of congruence between brand and consumer personalities.
Methodology. The quantitative study (204 paper-assisted personal interviews) was performed; non-representative sample was recruited using snowball method. During the research respondents were asked to evaluate brand personalities of 10 car brands: Audi, Toyota, Volvo, Mercedes and others (bipolar Aaker’s brand personality scale was used) and their own personalities (with NEO-FFI personality questionnaire from 60 statements).
Results. The study on general level confirmed only the congruence between human personality dimension agreeableness and brand personality dimension sincerity; this could be due to the fact that both dimensions are expressed by the same traits. On general level support for human personality neuroticism dimension and brand personality sophistication dimension was not found. The possible reason for this is that neuroticism dimension does not have equivalence in brand personality dimensions and this might impact the results.
114
On individual level support for congruence between dimensions of brand and consumer personalities was noticed. Congruence between neuroticism and competence was found for Volvo and Mercedes brands. Moreover, on individual level congruence between brand personality sophistication dimension and extraversion for Jeep brand was found; conscientiousness – VW, Honda; openness – Jeep, Hummer and Jaguar; neuroticism –Volvo; agreeableness – Hummer, Audi and Toyota.
Practical implications. The results presented in this study can be used by marketing managers working with automotive brands.
Value/originality. This paper provides extensive quantitative study on congruence topic between brand and consumer personality.
Keywords: consumer behaviour, brand personality, consumer personality. JEL Classification: M31, M37, R40. Paper type: Research paper.
WEBSITE ATMOSPHERE: TOWARDS REVISITED TAXONOMY
OF WEBSITE ELEMENTS
Eglė Vaičiukynaitė, Rimantas Gatautis Kaunas University of Technology, Lithuania
Virtual atmospherics differs significantly from physical stores and obtain unique
characteristics such as interactivity, personalization, information-rich content, the availability 24 hours a day and 7 days a week. Website atmosphere is complex and consists a set of specific elements of website.
Website atmosphere research has been in existence 12 years, most previous studies (Kim, Lennon, 2009; Björk, 2010; Clark, 2010) focus on specific elements of website and do not provide a single and comprehensive taxonomy of website elements. In order to address these gaps in research literature, this study pays attention to the elements of website atmosphere.
Purpose. The main purpose of this study is to identify elements of website atmosphere and propose a revised taxonomy of website elements.
Methodology. A desk research approach in order to identify elements of website atmosphere emerged in research literature from 2009 until today.
Results. Based on the review of the literature, we present a revised taxonomy of web site elements. These elements are grouped into four components according to Vrechopoulos (2009) taxonomy. The component of virtual layout & design is extended to virtual layout & design & navigation (Romero, Gomez-Borja, Molla-Descals, 2011; Manganari, Siomkos, Rigopoulou, Vrechopoulos, 2011). Other component - virtual atmospherics is extended by adding such elements as background design (thematic/ non thematic/ esthetic/ personality) (Poddar, Donthu, Wei, 2009; Wang, 2010; Cai, Xu, 2011), customization (Manganari, Vrechopoulos, 2009), personalization (McCormich, Livett, 2012), component of virtual social presence (Wang, Fodness, 2010, Björk, 2010) and is expanded by adding elements as virtual community and communication.
Practical implications (if applicable). The paper provides the taxonomy of website elements and provides general guidelines for firms to develop an effective website in order to entice and retain consumers.
Value/originality. No comprehensive and revised a taxonomy of website elements on research literature exists. To address this gap, taxonomy of website elements is proposed and extends research base on the website atmosphere.
Keywords: website atmosphere, website elements, consumer behaviour. JEL Classification: M31. Paper type: Conceptual paper.
115
INTEGRATION OF BRAND VULNERABILITY SCENARIOS PLANNING INTO BRAND MANAGEMENT PROCESS
Vestina Vainauskienė
Kaunas University of Technology, Lithuania Purpose. Discuss the integration of brand vulnerability scenarios planning into brand
management process. Methodology. In order to substantiate brand vulnerability scenarios’ planning process
integration in the brand management process authors use brand vulnerability scenarios’ planning and brand management theoretical approaches.
Results. The main and most important result of the paper is integrated brand vulnerability scenarios’ planning process and brand management process model.
Practical implications. It is important to note, that practical validation of integrated brand vulnerability scenarios’ planning and brand management processes model is possible only after empirical researches.
Value/originality. One of the most important goals of brand management is to create and maintain brand equity. It is extremely difficult to do, because contemporary organizations function in environment that can be characterized as uncertain. The uncertainty is the key dimension characterizing contemporary external environment (Oreja-Rodrı´guez and Yanes-Este´vez, 2007; Ebrahimi, 2000) as well as it outlines the ambiguity of the results of different organization’s factors performed in the contexts of unpredictable situation not possessing necessary information (Herzig and Jimmieson, 2006; Ebrahimi, 2000; Wilson, 2009). Thus in contemporary business environment the competitiveness of both an organization and a brand and even the survival in the market depends on organization’s ability to adjust to the tendencies of external environment referring to them to make strategic and tactical decisions on brand management. Thus equal probability exists for both positive and negative outcomes of decisions. Organizations’ decisions and other different actions, the outcomes of which are negative, determine brand vulnerability. In other words, the brand when functioning in the environments characterized by uncertainty has become the vulnerable asset of an organization. This is the reason why organizations must proactively react to the brand vulnerability.
Scientific literature closely relates the concept of vulnerability to the concept of risk (Riabacke 2006; Cardona 2004): the object vulnerability is the premise for formation of its risk. Despite the brand vulnerability concept topicality in practical and theoretical contexts, brand vulnerability is new and unexpanded topic in scientific marketing literature. Meanwhile, paper “Integration of brand vulnerability scenarios planning into brand management process” will answer one of the brand vulnerability problematic questions: how to manage brand in order to be able to react to brand vulnerability proactively? In order to solve this problem, authors propose integrated model of brand vulnerability scenarios process and brand management process.
Keywords: uncertainty, vulnerability, brand, scenarios. JEL Classification: M10, M31. Paper type: Theoretical paper.
INDICATORS FOR EVALUATION OF ONLINE ADVERTISING
EFFECTIVENESS
Elena Vitkauskaitė Kaunas University of Technology, Lithuania
Purpose. Importance of internet is growing in everyday routines worldwide. Therefore companies spend increasing percentage of their marketing budgets for advertising on internet.
116
Although internet enables to track user activities online much easier in comparison with traditional media, increasing numbers of available platforms and tools makes it difficult to decide what metrics should be tracked and what metrics would help to determine optimal marketing budget allocations. This paper aims to identify important constructs that are specific to measuring of effectiveness of online advertising.
Methodology. The paper is analysing research performed in area of effectiveness of online advertising by undertaking systematic, logical and comparative review of scientific literature and sources produced by practitioners.
Results. It is found that there is a number of indicators which might be used for online advertising effectiveness evaluation. These indicators can be grouped into qualitative indicators, quantitative indicators and indicators for measuring return of investment. Paper lists indicators for all three categories. Through this list of indicators is not exhaustive, and depending on the ad or site tracking technology and advertisement type based systems list of possible indicators could be much longer.
Value/originality. According to previous studies, companies still tend to use outdated indicators for evaluation of online advertising effectiveness which loses its’ importance with increase of web 2.0 technologies and other new trends on internet. Focusing on this issue, the paper suggests that advertisers apply the number of nowadays more relevant indicators, which might help them allocate marketing budget for online advertising more efficiently based on more accurate data.
Keywords: advertising effectiveness, electronic commerce, online advertising. JEL Classification: M31, M37, M39. Paper type: Theoretical paper.
COMMUNICATION IN SOCIAL MEDIA FOR BRAND EQUITY BUILDING
Ligita Zailskaitė-Jakštė, Rita Kuvykaitė Kaunas University of Technology, Lithuania
Purpose. The aim of the research is to design the structural model for brand equity building
using communication in social media and to test it empirically. Methodology. The model of brand equity building by employing communication in social
media was prepared by using methods of comparative and systemic analysis of scientific literature. The empirical applicability of theoretical model in practice was done using the qualitative (structural interview) and quantitative (content analysis and questionnaire interview) research methods.
Results. The structural model of brand equity building using communication in social media has been developed and application possibilities of this model have been verified in practice empirically. The eight stages of model were distinguished: environment and competitors analysis, brand equity analysis, preparation of communication, selection of proper channels, implementation of the process of communication (content creation, presentation of messages, creation of community and participation), monitoring of actions, responding to negative comments and comparison of results by linking it to brand equity analysis. The research revealed that appropriate management of communication in social media results in expansion of brand awareness and favourable brand image is formed herewith. The most positive effect for brand equity in social media will be gained only if the degree of consumer involvement in communication in these channels is rather high.
Practical implications (if applicable). Social media have changed the traditional communication between brands and consumers. It enables a rapid dissemination of information, which reaches large consumer audiences in short time. Using such power of communication companies can attract a lot of consumers who being impressed by a viral message will join the
117
process of information dissemination or will be willing to advocate the brand or the company. However, companies should know how to manage the communication process online since in this type of communication brand equity can be affected by positive as well as negative disseminated information.
Consumer's in social media gain more power to influence brand expression, contribute to its building, dissemination, promotion and representation. Consumers’s can control and influence messages sent by brand in his or her own way and communicate the personal interpretation to others. Therefore social media requires integrity of actions from branding and greater responsibility in the process of communication with consumers.
This study proposes the approach of consumer involvement into brand equity building by invoking communication in social media which can provide the brands with more favourability.
Value/originality. The research reveals how to manage the information about the brand content which is spread in social media and enhance the brand equity by making use of communication potential in social media.
Keywords: Brand equity, Communication, Social Media. JEL Classification: M31. Paper type: Research paper.
118
Session
CORPORATE SOCIAL RESPONSIBILITY: THE INTERACTION BETWEEN BUSINESSES, SOCIETY,
AND STATE
119
THE METHODOLOGICAL ISSUES OF THE IMPROVEMENT OF GENDER STATISTICS OF EMPLOYMENT
Nino Abesadze
Ivane Javakhishvili Tbilisi State University, Georgia
Purpose. For the correct determination of the main directions and focus of the social and economic development of Georgia it is very important to study the number of the population and their employment in the aspect of gender. Unfortunately, in Georgia there is very scarce age and regional statistical information of employment in the aspect of gender. Consequently, statistical methodology of gathering and analyzing such information needs to be improved. That’s why the purpose of the research is to discuss the methodological issues of the gender statistcs of employment, to introduce the gender indexes in all the fields and on all the levels of the traditional statistical system, which will allow to conduct the monitoring and determine the priorites of the development according to the aims of the development of millennium of the United Nations.
Methodology: The effective determination of the statistic analysis of employment in the gender context demands to use the appropriate statistical methods. In the research the emphasis is laid on the basis of the index methods of studying the dynamics of the employment in the gender context, which allows not only to reflect the character of changes of employment in the gender context, but at the same time to show the influence of the factors on the changes, which have the functional connection with the resulting sign. In the research there are shown the methodological issues of making the employment indexes and there are given the indexes of changing, structural and fixed composition, and also there are revealed the influence of the factors involved in the index model on the change of level of women’s employment using the chain method.
Results. The gender statistics of employment is the real foundation which the main forecasting plans and parameters of the economic and social development of a country should be based on. It is impossible to introduce and realize the effective social-economic policy without such calculation.
The impact of the factors involved in the index model on the employment rate according to age is revealed, projected figure of gender statistics of employment is calculated and recommendations are developed for effective employment policy in Georgia.
Value/originality. Gender indexes of employment are modified, which help to determine changes in the nature of employment in the aspect of gender, based on the influence of the factors having functional connection with the outcome mark, changes in the overall level of employment.
Keywords: gender, employment, statistics, forecast, indexes. JEL Classification: C43. Paper type: Research paper.
DIMENSIONS OF SOCIAL RESPONSIBILITY IN THE PROCESS
OF ENTREPRENERSHIP YOUTH EDUCATION
Adelė Astromskienė Aleksandras Stulginskis University, Lithuania
Rūta Adamonienė Kaunas University of Technology, Lithuania
Purpose. The purpose of the research is supposed by priority of integration growth of
“Europa2020” strategy predicting knowledge improvement and consolidation of innovations as propulsion of future growth. The purpose of the research is to determine a role of dimensions of social responsibility in the process of entrepreneurship education.
120
Methodology. A base of methodology is Socialsme method, based on a concept of positive research of dimenssions of social responsibility that allows creating of new theories and ideas by concentrating a center of the research not on problems’ tackling but on strivings. A design of the research is created of combination of Socialsme, phenomenografics and questionnaire, which, by using theoretical assumptions, allowed spreading of spectrum of dimensions of social responsibility, separating of internal and external links of social responsibility dimensions with entrepreneurship and business results, naming directions of entreprenership education development in the context of social responsibility.
Results. Youth entrepreneurship stimulation in the Europe is one of the basic objectives and means of Lisbon strategy in making EU the most competitive economics in the world. Having used technique of positive research of Socialsme method it was determined that even in dysfunctional, regressing organizations it is possible to find sally, emphasis of which creates favorable assumptions for withdrawal of organization from the depressive state. The use of the same technique in the level of individual stimulates learning, self-expression, professionalism, responsible attitude towards duties and activity, which are the main enterprise education indicators creating favorable assumptions for personal learning and self-development. It was determined by the research, that a creative and initiative person is oriented towards the novelty of decisions taken, is able for independent actions, flexible and strategic thinking, can analyze, recognize and use circumstances to reach own goals, to tackle complicated business questions in time, to take risk. Entrepreneur makes decisions appealing to comprehensive economical analysis of environment of activity and social phenomena. This confirms statement of many scientists that recognition of favorable circumstances makes the essence of enterprise. A choice of businessman to start business activity, to establish a new enterprise is a result of sophisticated process of decisions generation including self-analysis, evaluation of own possibilities and wishes to change present life into new, unknown and risky one, weighting of business possibilities and perspectives, prediction of consequences in case of unsuccessful business, i.e. practical application of dimensions of external and internal responsibility. Adaptation to changes, development of knowledge and abilities, health and security in business activity and other inner dimensions of social responsibility makes basic construct of successful youth business activity.
Practical implications Knowledge of external dimensions of social responsibility – interests of business partners, needs of customers, responsibility to society, community and environmental security – helps youth entrepreneurs to realize that business isn’t isolated abstract and enterprise may have different forms of expression: development enterprise (when new business is being created); joined (cooperated) enterprise (when in creation of corporative business formation local resources and social capital are joined); and exo-enterprise (while creating business or investing into a net of enterprises). Listed expressions of entrepreneurship suppose corresponding forms and directions of youth entrepreneurship rise education.
Value/originality. Up to date Socialsme methods were applied only in the process of organizations’ responsible learning. The research results revealed that Socialsme techniques allowing spreading of internal and external dimensions of social responsibility can by applied successfully in the process of entrepreneurship youth education.
Keywords: enterprise, personality, social responsibility, responsibility. JEL Classification: J240, M140. Paper type: Theoretical paper.
121
CORPORATE SOCIAL RESPONSIBILITY SIGNIFICANT TO SMALL COMPANIES
Diana Bagdonienė, Aušra Simanavičienė Kaunas University of Technology, Lithuania
Purpose. Corporate social responsibility (CSR) is reflected by employee’s health
administrative innovation, business learning, learning all life and environmental questions. CSR includes the smalls companies responsibility to carry out such a policy and take decisions which correspond with public goals and values; to carry out such a business functions which supply the needs of society. This means that the smalls companies should be responsible for each activity which affects people or environment. Furthermore, social responsibility is closely linked with moral law and principles of values. CSR can be analyzed by SA 8000 standard. SA 8000 is an international standard for improving working conditions. Based on the principles SA8000 is based on the principles of international human rights norms as described in International Labour Organisation conventions, the United Nations Convention on the Rights of the Child and the Universal Declaration of Human Rights. It measures the performance of small companies in those areas: child labour, forced labour, health and safety, free association and collective bargaining, discrimination, disciplinary practices, working hours and compensation.
This article analyzes the peculiarities and significance of the corporate social responsibility. The problem of this article is: The corporate social responsibility influence to small companies work results and for employees is relevance problem to the management process of modern organization, but management of Lithuanian small companies only seldom relies on social responsibility during motivation process.
The object of the research paper is corporate social responsibility. Small companies by carrying out social responsibility have a better image, added value, are
much more attractive to partners, customers and higher – skilled workers, have better developed organizational structure and teamwork, are flexible – it develops a positive relationship between employees and society.
Methodology of the research paper: logical and systematic analysis of scientific papers and statistical data.
Results and originality. Based on scientific literature consists of implementing the principles of social responsibility model for small companies. The model presented challenges faced by the company to be socially responsible and rewards experienced by being socially responsible.
Keywords: corporate social responsibility, management, SA 8000 standard, sustainable development.
JEL Classification: M14, Q01, I15, L15. Paper type: Theoretical paper.
SOCIAL RESPONSIBILITY OF INTERMEDIATE INSTITUTIONS
AND POLITICALLY-BASED ECONOMIC CYCLE
Andrius Guzavičius, Vidas Tamulis, Lina Žalgirytė Kaunas University of Technology, Lithuania
Markets acting as a centre of global economy, also oft there is a gap between the theory and
practice by defining economics in terms of real world market action. Very important is correct balance between free market competition and decision making institutions control and intervention. There are scientifically opinions, that in the long run period free market economy could be self
122
adjustable, but in short run period we faces financial and economical crises and even social instability and insecurity. Big variety of players and institutional details make them almost impossible to understand and describe. It is very important to analyze different market actions, affected be rent seeking, imperfect competition, transactions costs and systemic risk.
Purpose. To create a model of efficient collaboration system between intermediate institutions and decision making institutions regarding social responsibility.
Methodology. Research methods contributing to this paper are: comparative and structural as well as the qualitative and quantitative analysis of scientific economic literature, statistical data analysis, correlation and regression analysis, graphical modelling and logical analysis.
Results. The main result might be theoretical model of balanced equilibrium model between different players participating in politically based economic cycle. The major role between economic subject and decision making politically institutions play intermediate institutions. Development of action undertaken by intermediate institutions resulted in debates held by the researchers of different countries about purposefulness of the action in question with respect to the institution itself and to the society at large. According to the academic debates one of the major problems encountered in this field seem to be evaluation of the influence on nation competitiveness of the action undertaken by the intermediate institutions.
Practical implication. The practical value of this paper might be an increasing of efficiency representing economic interests, the better government policy, leading to sustainable economic grow eliminating sharply fluctuations in the financial market.
Value/originality. The value of the presented models is to create more efficient collaboration system of the main actors in politically-based economic cycle. It is well known, that equilibrium in market plays major role in economics analyses. Equilibrium act as a force, that directs the allocation of limited recourses in competitive market, means profit maximization for successful companies and bets consumption choices for smart households. But in the last decade world economy were facing at least two rough periods: dot-com bubble at the start of the century and by year 2007 facing much serious, what starts as the housing bubble in USA and spread to all world as major economic crisis. Now many economics agree, that lasts crisis still remain because of complexity of different actors and instrument, that participate in global economics system, these developments sharply impacted broader economy.
Keywords: social responsibility, intermediate institution, economic cycle. JEL Classification: D71, G18, F44. Paper type: Theoretical paper.
QUALITATIVE AND QUANTITATIVE ASPECTS OF THE CLUSTERS
IN THE SLOVAK REPUBLIC
Katarina Haviernikova Alexander Dubcek University of Trencin, Slovakia
Purpose. Clusters are not a new phenomenon in world economy. Many research study mainly Anglo - Americans emphasize the role of clusters in modern economy and regional development. Clusters refer to the tight connections that bind certain firms, industries, universities and local government together in various aspects – geographic location, sources of innovation, shared suppliers and factors of production, and so forth.
Cluster concept date from the 19th century, but they have captured the imagination of active policy makers and the serious attention of scholars only in the last decade of 20th century.
The main purpose of the paper is, on the basis on questionnaire survey, to find out the importance of qualitative and quantitative aspect of clusters in the Slovak Republic.
123
Methodology. By means of Pearson correlation quotient we will emphasize the independent relations between business and employment and creation of GDP and between university graduates and employment.
A partial aim of this paper is an application of selected quantitative method – shift-share analyses to investigate the cluster potential in Slovak regions.
Next ambition is to evaluate the applicability method – shift –share analyses used for analyzing the industries adequate for cluster formation and its development. Based on the analysis we will try to recommended, in which other areas in Slovak regions could be new clusters created.
Results. The result of the paper shows, that clustering occurs in the economy of Slovak regions. We found out, that 18 clusters have been already officially established in Slovak regions; many of them are members of Slovak Union of clusters and their creation takes into account the comparative advantages of regions. The enterprises, universities, secondary school, research institutions and local governments are involved in clusters in regions the Slovak Republic. In 2012 the legislation was changed in the field of tourism, which showed, that clusters from this area stopped working in cluster cooperation. They continue as the agencies for tourism.
Practical implications (if applicable). The main problem of Slovak economy is the lack of clustering policy. This is related to the dynamics of creating new cluster and their active participation in innovation processes and other processes within the regional development. The practical implications of this paper related to the proposals for other areas, where could by created new clusters and with proposals, which related to improving the cluster policy in the Slovak republic, based on questionnaire survey.
Value/originality. Although the processes of clustering often redistributed forces and factors affecting the competitiveness of local enterprises or regions, these processes are important for the ability of smaller regions and countries to develop new manufacturing departments or programs and improve their competitiveness. Success depend not only on openness enterprises or regions (countries) to develop common research, and business activities, but it is very closely related to the quality and efficiency of the clusters.
Keywords: Cluster, region, enterprises, localization, government. JEL Classification: P25, R11, C40. Paper type: Research paper.
ETHICAL BEHAVIOUR: FACTORS INFLUENCING INTENTION
TO BUY ORGANIC PRODUCTS IN LITHUANIA
Monika Kavaliauskė, Simona Ubartaitė Vilnius University, Lithuania
Purpose. During the latest decades economical and social problems had a great influence for
society in shaping its ethical behaviour. Consumers started to perceive ethical consumption as a tool to lead society to better and healthier world. Therefore, companies has reacted to changing consumer preferences and offered various ethical products. As the importance of ethical products increased, it is crucial to determine the reasons of ethical consumer behaviour and factors influencing it. The researches made in emerging economies (like Lithuania) on ethical consumption are very limited, therefore neither factors influencing ethical consumer behaviour, neither problems limiting it were determined in Lithuania yet. As the term ethical is quite broad, in this study one form of ethical products – organic products were chosen.
The aim of this research was to determine the factors that influence the intention to buy organic products. Based on the models of Tarkiainen, Sundqvist (2005), Jaya (2010) and Zhen (2012), the research model was developed. It identified the influence of consumer ethical beliefs,
124
concern about product safety, concern about health, and two moderating variables: product price and product availability, on the intention to buy organic products.
Methodology. Quantative survey was carried out among 406 Lithuanian respondents, representing various demographic characteristics. The chosen sample level represented all Lithuanian consumers over 18 years old with 95% probability.
Results. The research determined that consumer ethical beliefs are the most important for intention to buy organic products. Concern about health also had positive influence on intention to buy, and positively correlated with concern about product composition. These findings revealed that for intention to buy ethical products not only ethical beliefs are important but also the great consumer concern about its health. Further, it was determined that consumers perceive organic products both as healthier, and friendlier for the environment.
Although many authors found the price as limiting factor for intention to buy organic products, the results of this research showed different approach. The price was perceived as important factor for buying organic products, but it was perceived as affordable, and price had positive impact on intention to buy organic products. Also research results compared to other authors revealed different impact of product availability for intention to buy it, which was negative. Therefore combining this fact with price, it can be stated that consumers in Lithuania perceive organic products more like luxury goods.
Practical implications. The research revealed the differences between consumers characteristics regarding ethical consumer behaviour. Therefore, business should focus on younger consumers which already have some knowledge about ethical problems and advantages of organic products. To attract other age groups, companies should invest into information communication strategies and consumers education, emphasising on not only environmental aspect but especially the health care issue.
Value/originality. This is one of the first researches made in Lithuania where intention to buy ethical products was analyzed. Research results revealed the importance of ethics in consumer behaviour. Therefore, these findings can be the basis for further researches on ethical consumer behaviour with different product categories.
Keywords: organic, ethical, intention to buy. JEL Classification: M14, M31, Q57. Paper type: Research paper.
CONSUMERS PERCEPTION OF LITHUANIAN ECO-LABEL
Monika Kavaliauskė, Ulyana Vaskiv, Eleonora Šeimienė Vilnius University, Lithuania
Purpose. In the recent decade, individuals have become more environmentally concerned,
while companies realized that consumers’ needs and desires are changing. This, in turn, has created new environmentally oriented practices, like ecological labeling, to satisfy consumer demands. Though eco-labels were created with a purpose to ease consumers to make their buying choices, a certain degree of confusion has emerged among the customers concerning the precise meaning of eco-labels. Due to a great number of organizations that provide third party labeling as well as absence of one global scheme of environmental labeling, consumers have hard time interpreting eco-labels.
In Lithuania “Ekologinis žemės ūkis” (“Ecological Farming”) eco-label has been issued in 2009. However, this ecological label is still new to consumers in addition to generally low level of ecological labeling practice awareness. With regard to the issue of consumer confusion and the distrust of eco-certification, the purpose of the research was to investigate perceptions of Lithuanian consumers of eco-labels and in particular Lithuanian ecological label “Ekologinis žemės ūkis.”
125
Methodology. Due to the need to reveal consumer perception and understanding of eco-label qualitative research method was chosen. The qualitative study consisted of 4 focus groups (6-7 respondents in each). The focus groups were conducted in Vilnius (Lithuania) with young consumers: 22 – 25 y.o. university students, men and women, Lithuanians. In order to understand the possible differences in ecological label perception 2 focus groups were done with students who are interested or at least aware of eco-labels, and who have general interest in ecology; and 2 focus groups – with those, who are not interested in eco-labels and ecology in general.
Results. The findings revealed that the study participants recognized both positive and negative aspects of the label “Ekologinis žemės ūkis”. Such advantages as useful information about the product content and its possibility to guide consumers in their purchase decisions were mentioned. Recognized as important benefits, higher quality of eco-labeled products and presence of strict criteria for products to get certification were also discussed. On a wider scale, introduction of eco-label “Ekologinis žemės ūkis” was positively perceived, suggesting that it might make more people to consider their health and environment more seriously. Despite the benefits, participants also noted several disadvantages. Small product selection, perceived higher prices, and absence of advertising were among the most frequently mentioned. Moreover, consumers reported not feeling totally “safe” while choosing eco-labeled products and distrust producers and ecological labels because of their claims.
Practical implications. One of the main findings of consumer perceptions of ecological labels was an exhibited distrust towards companies and certification agencies. In order to increase the level of consumer confidence, producers should become more transparent. Also participants emphasized that the environmental impact of eco-labeled organic product is a positive attribute, however, the main reason to buy organic products is their lower impact on one’s health. Knowing this main motivation, advertisements should incorporate both aspects.
Value/originality. Findings of the current research will be beneficial both for manufacturing companies certified with the ecological label and public certification organizations.
Keywords: eco-labels, eco-certification, eco-consciousness. JEL Classification: M14, M31, Q57. Paper type: Research paper.
METHODOLOGICAL ISSUES OF THE STATISTICAL ANALYSIS
OF UNEMPLOYMENT
Rusudan Kinkladze Georgian Technical University, Georgia
Purpose. The economists study various indices to determine the economical state of a
country. Along with the gross domestic product (GDP), there is another statistical index that draws the economists’ and public attention. This is the unemployment index of the country. Unemployment is an event when a part of the county’s population fails to find jobs. Unemployment is a heavy load on the population of a country. It has an economical, psychological and social impact.
From an economical point of view, unemployment leads to unused manufacturing opportunities that are lost due to unused labor. In other words, unemployment leads to the loss of products that could be manufactured if there were no unemployment. According to a well-known Okun law, a 1% increase in unemployment level leads to 2% decrease in the country’s GDP. In addition, a government loses income due to the reduced number of tax payers in the country. In developed and some developing countries unemployment entails more expenses, as the government has to pay more unemployment welfare. This is not the case in Georgia, as Georgian government does not pay unemployment welfare, and so unemployment affects unemployed people only. Their
126
income decreases and their abilities deteriorate due to the lack of practice. At the same time, unemployment reduces motivation to work.
Unemployment is the main problem of the modern society. Statistical and sociological studies show that unemployment is the first on the list of social-economical and political issues in Georgia. Because of this, the aim of our work is the Economical-Statistical Analysis of Unemployment.
Methodology: The work uses relevant statistical methods for the statistical analysis of employment. The methods to calculate the mean values and variation indicators are used to analyze the level of unemployment, and an index method, in particular, variable, fixed and structural indices are used to study the dynamics of unemployment for different territorial formations or groups of population. The results of analysis of the official statistical data of unemployment available in Georgia are shown as different diagrams.
Results. A certain level of unemployment is inevitable in the real economy. In order to evaluate the existing situation correctly, one should be aware of not only the number of the unemployed, but also the duration of their unemployment. The data of the employment office and selective research materials evidence the trend of increased average time spent to find a job. Such a negative trend is the evidence of the increasing problem of employment. A change in the level of unemployment, and number and structure of the economically active population has a direct proportional impact on the absolute change of the number of the unemployed.
Value/originality: Different kinds of unemployment typical to Georgia and specifics of their exposure are considered. Different methods to calculate the seasonal indices following the nature of the dynamics of the level of unemployment are given. The gross impact of the factors influencing the absolute change of the level of unemployment and number of the unemployed for different territorial formations or groups of population is described by using the index method.
Keywords: unemployment, average unemployment period, seasonal indexes, index method. JEL Classification: C43. Paper type: Research paper.
CONSTRUCTION BUSINESS DEVELOPMENT TENDENCY
IN POST-CRISIS GEORGIA
Nino Lomidze Ivane Javakhishvili Tbilisi State University, Georgia
Purpose: After Rose Revolution, particularly in 2004-2007, construction business developed
so rapidly in Georgia that it became some kind of “business card” of political and economic development of our country. Russian-Georgian war and world financial crisis set limits to the casual attitude towards the construction business demonstrating certain results emerged on the surface of the events rather than reflecting reality, which revealed real problems pertaining to the construction business itself and which caused material and moral damages to the numerous citizens. After August events of 2008, the construction business reached the deadlock. This work immediately highlights construction business collapse causing problems. It concerns financial resources attraction and disposition wrong mechanism in the field applied by almost all the construction companies. Construction business is in crisis still now. Bank loans are strongly restricted for construction companies and the one main reason of this limitation is, that commercial banks are interested in development sector itself. This work highlights issues, that concerns confrontation of two parties: Construction-development sector and commercial banks.
Methodology: While developing this work, we thoroughly processed officially declared statistic information of construction field. On the basis of special application to the relevant bodies we obtained information, which was not public. We read and analyzed articles, media materials, etc. relating to these issues. Moreover, we conducted independent study, compiled questionnaire and
127
applied to the founders and directors of development-construction companies. We also arranged interviews with them.
Results: Despite of improvement of statistical data in the field since 2008 the construction business is still in crisis, mildly speaking it is in the process of rehabilitation. The government project - “New life of old Tbilisi” really promoted partial overcoming of construction business crisis but the expectations about banks’ activity increasing with respect to the construction business financing remained an illusion. Commercial banks’ interest toward development business is causing to stop financing construction companies. National Bank of Georgia finds no problem in this situation and is not going to settle any kind of limitations for commercial banks by this direction. So, ”the war” between banks and construction-developer companies keeps continue.
Value/originality: Statistic information of construction field by years is processed in detail in this work and also examined cause-effect relation between the activity of construction processes running in the country and changes of economic indexes of the field. It should be noted that National Statistics Office of Georgia does not carry out identification of statistical data of separate areas of construction field (we mean house-building, construction of non-residential and strategic-purpose (Roads, Bridges, Tunnels etc) buildings and structures). So, that creates some kind of problem and sets the limits for making of reasonable conclusions about construction business development itself. So we carried out an independent study, obtain specific material and on the basis of such information made objective conclusions about construction business development tendency in post-crisis Georgia.
Keywords: Construction, Business, Bank, Developer, Indexes. JEL Classification: M10. Paper type: Research paper.
FEMALE DIRECTORS AND TOP MANAGERS’ PAY:
EVIDENCE FROM SPAIN
Antonio Minguez-Vera, Mª Encarnación Lucas-Pérez, Juan Samuel Baixauli-Soler, Gregorio Sánchez-Marín, Juan Francisco Martín-Ugedo
University of Murcia, Spain
Propose: Current literature shows great interest in the effects of gender diversity on boards of directors. Most studies analyse a direct relationship between diversity and the value of the firm, without studying the intermediate mechanisms that may influence such a relationship. This paper presents evidence of the influence of gender diversity on the pay system and the monitoring of top managers in the Spanish institutional context, in which there is an ongoing discussion regarding the enactment of laws to promote gender equality on the boards of directors of large listed companies.
Methodology: Two stages of generalised method of moments estimations were employed. This methodology provides controls for the correlation errors over time, the heteroskedasticity among firms, the simultaneity and the measurement errors caused by the use of orthogonal conditions of the variances matrix. For this estimation, dichotomous variables were used to control time effects and first difference transformation to eliminate unobservable effects.
Results: We show that diversity increases the variable pay of top managers and the number of compensation committee meetings. Also, it is shown that gender diversity can act as a substitute supervisory mechanism on boards of directors of an adequate size with a large proportion of external and independent members, and where the posts of CEO and chairman are not held by the same person.
Practical implications: The reform of the composition of boards of directors might lead to a recovery in confidence in businesses after the recent financial scandals, and the introduction of gender diversity could be the first step towards their restricting. Firstly, diversity could help to establish compensation packages more related to firm performance, which would reduce agency
128
costs and promote a better image for the management of the firm, its effectiveness and functioning. Secondly, firms should not only take into account that gender diversity helps to make them socially responsible, but that increasing diversity on boards can also help them take better corporate decisions. Similarly, a board lacks the characteristics which would promote greater monitoring and effectiveness, the existence of diversity could substitute for them in this absence.
Value/originality: There is little research that analyses the influence of gender diversity on the design of top managers’ pay and on determining the characteristics of the board of directors. Similarly, although other studies have shown a substitution or complementarity effect between different aspects of each board of directors and other corporate governance mechanisms, not one, so far as we are aware, has added the dimension of “gender diversity”. These contributions are relevant to shedding light on how women can influence and encourage the increase of company value, as revealed by numerous studies. The focus of this paper is Spain, where there is an ongoing debate following the legislative changes aimed at increasing the presence of women on the boards of directors of large companies. These measures are justified from a viewpoint of social equity as Spain is one of the countries with the lowest presence of women directors in the European Union.
Keywords: Board of directors, top managers’ compensation, gender diversity, agency. JEL Classification: M12, M14, J16. Paper type: Research paper.
MECHANISM OF ELABORATION OF LABOR MARKET REGULATION
STRATEGY
Nino Paresashvili Ivane Javakhishvili Tbilisi State University, Georgia
Nowadays hundred thousands of Georgian nationals are working abroad illegally; some of
them have been dropped in traffic slavery. Labor market’s legalization and regulation remains the acute task and can’t be arranged so far. One of the reasons thereof is its insufficient investigation. We have not yet profound scientific researches which serve as grounds for regulation mechanisms.
The labor immigration is one of the most significant problems of modern Georgia. It causes the mass problems, which are deepened due to the post-soviet period crisis
Purpose. The main purpose of the research paper is to show the real picture of the labor market in Georgia, reveal the obstacles which hinders statistical research and creates inaccurate data, which as a result elaborates labor market regulation strategy.
Methodology. To establish methods of labour market evaluation systemic and the logical analysis of scientific literature were used. To show the real situation in the labour market of Georgia the statistics data were used.
Results. All in all, paper provides labor market statics, their movements during various economic conditions and in order to create integrated strategy for the labor market regulation. Practical implications. Nevertheless, we have reviewed the local and international legal base regulating these processes and we made clear the setbacks and aimed to create the legal acts which will promote legal regulation of these processes.
Taking into account that the large part of the population of Georgia migrated to other states, working over this issue and its research is very important on the way of economic development. Review of theoretical methodological issues of labor migration and discovery of new findings is the first step towards regulation process of labor migration.
The studies conducted in above mentioned sphere are rather important for finding out setbacks in survey of labor migration in the country. By inter-comparison of study results, statistic data and the real state are revealed efficiency of the research methodology and in case of existed mistakes necessity of inculcation of the new methodology principles.
129
We should focus especially discrimination in regard of gender, race, status and the facts of offering the worst conditions which Georgian labor migrants are facing. Therewith the problems connected with crossing the state border will not be solved efficiently if the state will activate in isolated way from each other; hence, the cooperation in the area of labor migration will promote provision of national interests.
Value/originality. Urgency of presented scientific research is expressed in following: � Current economic reform is irreversible process in Georgia, therefore it is necessary to
review the labor market infrastructure in composite manner � The corresponding scientific elaboration of theory and methodology problems of
infrastructure, evaluation of its efficient functioning is necessary. Additionally, almost half of youth potential immigrants have not applied any activities in
order to make their desire to come true. It should be noted that 4,4% from their number efficiently participate in students cultural-educational exchange programs; though 13% out of potential immigrants are in touch with associate immigrants who already had gone abroad and are getting familiar with immigration conditions.
Keywords: market, Labor migration, the strategy of labor market. JEL Classification: J40, J15, J17. Paper type: Research paper.
FUNCTIONAL DEPENDENCIES OF THE HUMAN CAPITAL FACTORS
Yelena Popova Transport and Telecommunication Institute, Latvia
Purpose. The main purpose of the research under consideration is to determine the most
significant factors influencing the development resource for the human capital and to find the functional dependencies between these factors and Human Development Index, making it possible to forecast the HDI values in the future periods on the basis of the social model adopted in the certain country.
Methodology. The research is based on the time series data. There are presented the regression functions for the fundamental factors. Implementation of regression functions required composing the correlation matrix, finding average and mean, employing the Student criterion for defining the factors with stable basis.
Results. The functions typologization has been produced on the basis of regression types and on the determination coefficients. The most of the obtained regressions belong to the polynomial type of the second power or to the exponential type.
Since the goal of this paper is analysis of the HDI factors, the forecast of this index is presented in this work. So, the obtained regressions are employed for the further forecast of the human development index. The certain difficulties appeared in the process of working out this forecast. The method of calculating HDI has recently been changed. As a result of changed method, it is impossible to apply directly the received regression dependencies. There has been determined the ratio between the indices, calculated according to the old method (calculated values) and new method (presented in UNO Report). As a result the ratio of indices is determined as 1.14.
The factors have been considered for the whole groups of countries. The process of grouping countries has taken place on the basis of social policy adopted within the countries. The fact of possibility of grouping the countries in accordance with the adopted social policy supports the idea of identity of factors of social policy and human capital development.
The research reveals the types of models. Since the primary interest for author is presented by the Baltic region, the countries of which employ the Continental social model, the papers concerns mostly the influence of this model on the human capital development. The Scandinavian model has
130
been implemented as a comparison basis. The paper also concerns the criteria for choosing this model specifically as an object of comparison.
Comparison of factors, simultaneously significant for human capital and for social model adopted within the country has demonstrated that the social model is the factor influencing the human capital in the country and responsible for its formation, reproduction and development.
Practical implications. The obtained averaged functions and dependencies for every of the considered factors allow the procedure of forecasting and scientific prognostication; the applied time span makes possible the verification of the functions.
Value/originality. The paper demonstrates that it is possible to apply the alternative way of regional development of European countries – according to the adopted social model; it is also possible to forecast the human development index value in the future periods; it is done on the basis of separating the factors having impact on the human capital development.
Keywords: human capital, factors, regression, functional dependencies, forecast. JEL Classification: O15. Paper type: Theoretical paper.
INTERDEPENDENCE OF HDI AND BUDGET REDISTRIBUTION WITHIN
THE SCANDINAVIAN AND EUROPEAN SOCIAL MODELS
Yelena Popova, Marina Kozhevnikova Transport and Telecommunication Institute, Latvia
Purpose. The goal of this research is the analysis of factors of social models, responsible for
the human capital development in the region and their implementation in the real state budget. The paper investigates the principal factors of the social systems, their distinctions and the
degree of their impact on the human capital development. The article considers the way of redistribution of budget for social system funding and its
impact on the human capital development. Methodology. The research is based on the time series data. There is presented the regression
analysis of the fundamental factors. Implementation of regression analysis required composing the correlation matrix, finding average and mean, employing the Student criterion for defining the factors with stable basis.
Results. The European countries are grouped in accordance with the fundamental of the social model functioning on their territory.
The research demonstrates the high degree of correlation of the social policy and indices, participating in the human capital calculations. Consequently, all the expenses on the social policy, implemented by the government, promote the development and extended reproduction of the human capital.
The procedure of investigation has demonstrated that the degree of income redistribution via the taxation system is significantly more essential than the traditional indicators of the national economy success, such as, for instance, the level of population employment or the Index of Economic Freedom. Income redistribution is always connected with the certain fiscal policy employed within the state. The paper considers the conditions which are supposed to be necessary for implementing the definite type of fiscal policy, oriented on the development of the human capital of the region.
The paper also reveals the fact that the countries within the European Union are ready to invest practically the same part of their budgets to such socially important areas as education, health care, research. Nevertheless, in money terms these contributions are distinctly different for the countries, having different level of economic development, since the GDP per capita is substantially differs in these countries. The research demonstrates that only certain level of real contribution can provide the necessary level of human capital development.
131
However, despite the high level of correlation, it was impossible to demonstrate the probably significant importance of such government expenditures as expenditures on education, on healthcare, R&D, science. There is an assumption that the principal reason of this fact is a great difference in corruption component in different countries, as well as in the quality of administration and management of the government expenditures. But the research under consideration reviews the time lag between the investments in the social spheres and the return from these investments as a main reason of impossibility of determining the probably significant importance of these expenditures.
Practical implications. The regression analysis of the state budget demonstrates the direct impact of taxes redistribution on the development of human capital, which has both theoretical and practical significance for contemporary economies.
Value/originality. The paper reveals the factors of social models responsible for the human capital development and the ways of funding the particular expenditures from the state budget. So, the ways of redistribution of budget and the dependence of HDI on the this redistribution are shown.
Keywords: human capital, social model, expenditures on education, expenditures on healthcare, human development index, income redistribution.
JEL Classification: O15. Paper type: Theoretical paper.
THEORY OF KNOWLEDGE MANAGEMENT AS A METHODOLOGICAL
FOUNDATION FOR CONSUMER KNOWLEDGE INTEGRATION IN EARLY STAGES DEVELOPMENT OF PROSPECTIVE SEMANTIC
TECHNOLOGIES
Ilma Pranciulytė-Bagdžiūnienė Kaunas University of Technology, Lithuania
Purpose. The main purpose of the paper try to disclose, how knowledge management theory
helps to structure experiment with users, than knowledge of consumers are integrated in the early stages development of innovation. In other words, what the knowledge management methods, we can use for selection the most valuable knowledge which will be used in further innovation processes?
Methodology. Research was included from three stages. In the first stage, which was named „The analysis of consumers behaviour“, whereby was trying to integrated more knowledge from external actors, order to perform habits of custumers from IT products side. The methods used in this stage was focus groups, methodology of topic maps. In the second stage of research, which was named „The work in groups“, organization tryed to aggregating the knowledge gained from the outside. The method used in this stage was reflection. In the second stage of research, which was named „Selection of ideas“, organization selected the most valuable ideas and discussed about them. The method used in this stage was design, modeling and topic maps ideas, reflection in organization.
Results. In this paper the author confirms a connection between knowledge management activities and organization innovation development activities as related to knowledge management processes. Organizations ability to identify valuable knowledge, to absorb and utilize innovative creation is the most important innovation in the fuzzy front end stages. In this paper, as an alternative to developing innovations in organizations, is the open innovation process based on the new product development process modeling consumers as creators of knowledge in the fuzzy front end stages creation of innovation, the inclusion of these processes. As well as knowledge management theory as a methodological foundation for the used of the integration new product development processes and SECI model of knowledge flow control in the creation of innovation.
132
This work has some limitations. First, it is give one case of organization from Lithuania. Second, open NPD was used for creating a single innovation with customers knowledge integration. Third, since innovation is incremental, so it is difficult to rank of substitutes for value creation in the market.
However, on the basis of it paper a theoretical field and case of organization would be useful to explore the flow of knowledge, or different processes of the innovation, when users are creators of knowledge. Second, to explore the organizational capacities for innovation, leading to valuable knowledge and seeing opportunities and transfer innovations. Third, to investigate entrepreneurial organizations or teams abilities to discern contribution of individuals as the prime element of organizations innovative cultures
Practical implications (if applicable). Case presentation can be used for organization which create innovations and as practical foundation for managers, which start work with new product development.
Value/originality. The paper is developed using modeling, design and topic mapping ideas. Knowledge flows in creation of innovation processes was management sustaining methods used in the theory of knowledge management.
Keywords: knowledge management practices and models, customer involvement into innovation, open innovation with customers, semantic technologies.
JEL Classification: O31. Paper type: Research paper.
THE INTERRELATIONS BETWEEN ETHICAL LEADERSHIP
AND ORGANIZATIONAL COMMITMENT
Raminta Pučėtaitė, Donatas Bendokas Vilnius University Kaunas Faculty of Humanities, Lithuania
The main purpose of the paper is to explore the impact of leadership on organizational
commitment. The paper presents the national findings of a larger scale international project carried out in Lithuania and Finland. The research is based on the premise that organizational commitment develops as a result of the high-quality quality relations1 between the leader and the followers. The quality of the relations is described by the degree of perceived ethical aspects such as trust, care, acknowledgement and reciprocity. Hence, this type of leadership is considered as ethical leadership. A secondary purpose of the paper is to explore the role of organizational trust, which is innate in high-quality relations, and is likely to have a mediating effect on organizational commitment. In this study, organizational commitment is instrumentalised as a three-dimensional phenomenon consisting of normative, continuance and affective attitudinal components, ethical leadership as interrelational qualities between leader and followers, and organizational trust as cognitive and affective attitudinal components. The phenomena are measured using the validated scales created,
1 Dutton, J.E., Heaphy, E.D. (2003), The power of high-quality connections. In Cameron, K., Dutton, J.E., Quinn, R.E. (eds.) Positive Organizational Scholarship: Foundations of a New Discipline. San Francisco: Berrett-Koehler, p. 263-278.
133
respectively, by Meyer and Allen (1990; 1991)2, Graen and Uhl-Bien (1995)3 and McAllister (1995)4.
Methodology. The research object is small and medium enterprises (SMEs). The SMEs were chosen based on the tendencies that close interrelations and affective components develop faster in small communities which are not regulated by many formal practices, less often have hierarchical structures, and followers can approach their leader more easily. Besides, small and medium organizations are often held together by the same or similar values and their members know each other rather closely.
The research strategy is case study. The sample was created by probability random sampling selecting 11 companies on the criterion of their size (over 5 employees) and constructing a total sample of their all employees. The research is carried out in 2 stages: first, by an electronic questionnaire survey and, second, by interviews and observation in the companies demonstrating motivation and interest in the research. In this paper, survey findings (expected n=136) are presented.
Results. At this moment, the results are not available as the data gathering with an electronic questionnaire survey will be completed at the end of January 2013. Yet, the paper will present the findings processed with SPSS software, making regressional and correlational analysis.
Practical implications. The research findings will allow to make managerial implications on developing high-quality relations and building organizational commitment by ethical leadership behaviour. An ethical dimension of organizational practices as an antecedent of organizational commitment will make implications how the phenomenon could be instrumentally developed.
Value/originality. The paper makes contribution to the studies of ethical leadership which is substantially discussed in conceptual literature, yet, has been little empirically explored. Moreover, a contribution to the academic discourse on the role of moral attitudes and their relation to emotions will be more deeply explored in the organizational context.
Keywords: ethical leadership, leader-member exchange theory, organizational commitment, organizational trust, Lithuania
JEL Classification: M12, M14. Paper type: Research paper.
2 Allen, N. J. and Meyer, J. P. (1990). The measurement and antecedents of affective, continuance and normative commitment to the organization. Journal of Occupational Psychology, vol. 63 iss. 1, p. 1-18; Meyer, J. P., Allen, N. J. (1991). A three-component conceptualization of organizational commitment. Human Resource Management Review, vol. 1 iss. 1, p. 61-89. 3 Graen, G. B., Uhl-Bien, M. (1995). Relationship-based approach to leadership: Development of leader-member exchange (LXM) theory of leadership over 25 years: Applying a multi-level multi-domain perspective. Leadership Quarterly, vol. 6 iss. 2, p. 219-247. 4 McAllister, Daniel, J. (1995). Affect- and cognition-based trust as foundations for interpersonal cooperation in organizations. Academy of Management Journal, vol. 38 iss. 1, p. 24-59.
134
THE METHODOLOGICAL BASIS OF CORPORATE SOCIAL RESPONSIBILITY INFLUENCE TO COMPANY VALUE
Žaneta Simanavičienė, Ruslan Kovaliov Kaunas University of Technology, Lithuania
Purpose. At a time when the whole world was triggered by the economic crisis, it is important
to find a reasonable answer, whether the corporate social responsibility (CSR) and other voluntary initiatives installation are not only unnecessary waste of companies and taxpayers' money, while a decrease in consumption and shrinkage of the economy, there is a lack of working capital funds, wages and investment in new technologies. Therefore, especially at this stage when the world suffer from the economic crisis, it is important to investigate how the introduction of CSR functions the company's market value and determine what the necessary internal and external factors in CSR increases the value of the company and make a positive impact on economic growth, social development and the environment. It is important to investigate the Lithuanian businessmen approach to CSR, its effects on business value and jointly assess public attitudes to socially responsible business practices and its benefits to society, i.e. to determine CSR effects on business value and its influencing factors. The purpose of article is to form a research methodology of corporate social responsibility affect on the company's value.
Methodology. Corporate social responsibility is an inevitable necessity of today. The European Union is interested to implant the concept of corporate social responsibility in business organizations, as it seeks to become a knowledge-based, the most competitive and dynamic economy in the world, capable of sustainable economic growth and development, social cooperation, create better jobs. Although the economic downturn adjusted the EU's economic development goals, socially responsible business development issues remain relevant, because only innovative, energetic and socially responsible business can help to ease the economic crisis. Although in Lithuania is clearly visible CSR training, educational and propagandist nature, but systematic research in this field in Lithuania is too little. A few works on CSR issues in Lithuania has published a number of authors: N. Vasiljevienė, A. Vasiljevas, R. Pučėtaitė, V. Pruskus, S. Žirgutienė, Z. Monkevičienė ir E. Rybakovas, D. Vyšniauskienė ir V. Kundrotas, A. Bosas, V. Juščius, J. Ruževičius et al.
Results. Developed and in this article presented CSR assessment methodology for company value, can be applied to other similar events (environmental or ethical labeling, social management standards or other voluntary business initiatives) affect on company's value investigation.
Value/originality. The research results are original, since in the article there are identified the CSR impact assessment features to the company value, combining the macro and micro levels, formed CSR assessment methodology to affect company value.
Keywords: corporate social responsibility, company value, methodology. JEL Classification: M14, A13, G 32. Paper type: Theoretical paper.
135
CORPORATE SOCIAL RESPONSIBILITY AND ITS INFLUENCE ON THE RATE OF RETURN OF PUBLIC LIABILITY COMPANIES IN POLAND
Jarosław Skorwider-Namiotko University of Warmia and Mazury in Olsztyn, Poland
Purpose. The main goal of research was to identify relation between implementation of
Corporate Social Responsibility in companies quoted on the Warsaw Stock Exchange in Poland and rates of return on their stocks.
Methodology. There were analysed companies listed in RESCPECT Index, which includes companies use rules of corporate governance and social responsibility and sustainable development, on the Warsaw Stock Exchange in the years 2009-2012. During research process there were calculated rates of return on stocks for different periods of time, beta coefficients as measurements of investment risk and the Sharp ratio and Treynor ratio in relation to Warsaw Stock Exchange indexes. Additionally, there were analysed profitability indicator ratios in order to measure financial and economical effectiveness of researched companies.
Results. The results showed that public listed companies which apply Corporate Social Responsibility in theirs activities have been perceived better by investors and characterised higher rates of return.
Practical implications (if applicable). It shows that rules of social responsibility should be employed more often because in this way company can gather new investors and gain capital on investment faster.
Value/originality. The most important question was to find out if stockholders of public liability companies which implemented CSR policy can achieve higher rate of return on their investment than others. There was little research in this area on the Polish capital market, because of short term of existence such companies in Poland.
Keywords: Corporate Social Responsibility, rate of return, public liability company. JEL Classification: G14, Q01. Paper type: Research paper.
THE RESEARCH OF SOCIAL VALUES INFLUENCE ON CONSUMPTION
DECISION MAKING IN LITHUANIA
Agnė Šneiderienė, Vytautas Juščius Klaipeda University, Lithuania
Purpose. The aim of this research is to analyze how social values influence consumption
decision making in Lithuania. Methodology. This article is based on a quantitative survey representatively sampling general
population of Lithuania. It is essential to determine social codes influence on consumption decision making.
Results. In the article, there are defined link between corporate social responsibility and consumer social responsibility. According to the quantitative survey, there are identified key factors influencing purchasing decision. The results show that organisations need to consider the influence of consumer social responsibility associated with their products and services in the development of CSR strategies. There are also identified which factors determine discrepancy between consumer attitudes and actual behaviour.
136
Practical implications. This study could be used for further investigation of socially responsible products demand. This research also could be useful for organisations to understand and predict the final balance between CSR and consumer responsibility.
Value/originality. Nowadays, consumers are more interested in the conditions under which developing countries have been manufactured and purchased goods. Ethical and socially responsible consumption are emphasized. In this context, ethical consumption is more concerned with the ethics of care, ethical and moral principles and social factors influence on consumer choice. In scientific literature, there has been increased interest on socially responsible consumption issue and how ethical principles can influence consumer decision making. It must be emphasized, that was analyzed only potential consumer response to particular areas of CSR. The opportunity for companies to identify and act upon complex consumer buying choices that balance personal and ethical consumerism circumstances was almost not investigated. In Lithuania, socially responsible consumption and social values influence on the consumer's decision making has not been analyzed.
Keywords: corporate social responsibility, social values, consumer social responsibility. JEL Classification: A13, D12, P36. Paper type: Research paper.
SOCIAL RESPONSIBILITY OF BUSINESS IN GEORGIA:
DEVELOPMENT AND PROBLEMS
Larisa Takalandze Sokhumi State University, Georgia
Purpose. In the recent period the problems of social responsibility of business and its role in
socioeconomic development of the countries are widely discussed all over the world. Currently international conferences, forums and numerous other public events dealing with the issues of social responsibility of businesses are arranged in all parts of the world. Goal of this research is assessment, how far this trend is reflected in business practices of Georgian companies. Currently, in Georgia, all efforts are oriented towards creation of civilized business and favorable business environment. In this situation, it is decisive that the necessary element of these efforts was adoption of ethical principles and social responsibility into the practice of business relations.
Methodology. Article provides discussion of wide circle of issues related to participation of businesses in the programs of corporative social responsibility, trends of development of partnerships between business sector, state and NGOs.
In Georgia, many companies are engaged in charity activities; they participate in sponsoring of socially significant projects, they publish social reports. In December 2006, in Georgia, UN Global Compact was launched and with its support the network of socially oriented Georgian companies was created. In many companies the codes of conduct and ethics are adopted. They describe ethical principles and norms providing basis for the activities of all employees of the company – from the specialists to top managers.
Results. In result of researches we have identified three key factors limiting SRB development in Georgia: high taxes, absence of benefits and availability of soft loans for the socially responsible organizations; lack of understanding of significance of socially responsible behavior. In Georgia, there is no legislative framework for charity activities. Government’s policies with respect of charity remain unclear. In realization of their charity work, the companies still frequently face significant bureaucratic obstacles.
In the end of the article there is mentioned that the state should make its best efforts to stimulate development of SRB in Georgia – tax exemptions, cheap credits for social projects etc.
137
Value/originality. State support to development of social responsibility of business in Georgia, being the important instrument for sustainable development of the companies in long run, would promote activation of social investments of the companies, expansion of the platform of partnership between the state and business and make significant contribution to creation of the new sources of sustainable economic growth and finally, would facilitate achievement of one of the key priorities of Georgia – integration into the European structures and market.
Keywords: Social responsibility of business, Business environment, State, Georgia. JEL Classification: M1, M14. Paper type: Research paper.
LEARNING OPPORTUNITIES OF SENIORS IN TOURISM MARKET
Gabrielė Vilutytė Vilnius University Kaunas Faculty of Humanities, Lithuania
Edmundas Jasinskas Kaunas University of Technology, Lithuania
Purpose: to identify organizational learning opportunities in senior tourism market. Methodology. Theoretical study of senior tourism market development opportunities was
analyzed by using academic literature, comparative analysis and system approaches. The empirical study of seniors‘ travel market development opportunities was analyzed by
using primary data analysis (quantitative analysis – a survey; qualitative analysis – an interview and mathematical statistics methods) and secondary data analysis (catalogues of statistical analysis, promotional publications of tourism companies and tour operators information – web pages, proposals).
The study includes: a) Secondary data analysis after 7 websites of tourism organizations and publicity were
analyzed. b) An interview with 7 workers from tourism organizations c) An interview with 7 leaders of seniors’ organizations, societies and clubs. d) A questionnaire with 402 respondents. Study selection method – stochastic selection. The study was conducted in 2011 January-
April. Results. Authors distinguish different age at which older people are called seniors. This age
period ranges from 50 to 60 years old. Age is one of the most important segmentation criteria. However, biological age is different from cognitive and senior willingness to travel and travel needs also depends on both biological and cognitive age.
After academic literature analysis was completed, theoretical model of senior tourism market development has been developed. This model consists of five main elements: 1) environmental factors, 2) market research (market segmentation, target market selection, positioning, 3) developing market strategy, 4) tourism marketing mix and strategic solutions, 5) marketing strategy (concentrated, differentiated, undifferentiated.) According to this theoretical model, tourism organizations should be able to meet the needs of seniors in the tourism sector (to ensure the best tourism product geared to senior market), to encourage older people to travel and in this way to expand Lithuanian senior tourism market which is still in developmental stage.
The research made it clear that the most important factor in encouraging seniors to travel is active willingness to entertain and socialize or to fill their daily life. Lithuanian seniors usually choose travels in Lithuania. Traveling abroad is less frequent. Study results have shown that destination of the senior travels depends on the organization, in which seniors take part. This
138
subordination means that leaders of senior organizations affect seniors’ tourism promotion. Therefore, it is recommended to have closer cooperation among tourism organizations and seniors unite communities.
Value/originality. Senior market and characteristics of seniors‘ market were analyzed by Shoemaker (2000), Lohmann ir Danielsson (2001), Reece (2004), Stroud (2005), Wall ir Mathieson (2006), Patterson (2007), Kohlbacher ir Herstatt (2008), Chaston (2009), Gonza‘Lez, Rodri‘Guez, Miranda and Cervantes (2009). A major attention is paid to the needs of older people in these studies because due to the aging population, this market share becomes increasingly important. It is necessary to gain more knowledge in order to meet the needs of the senior market. Due to this reason aging society topic should be included in the organizational learning process. Lithuanian scientists usually analyze tourism market in separate parts in terms of tourism infrastructure. There is a lack of systematic approach. In addition, segments of individual market, particularly senior market in Lithuania, are analyzed little. Topic of Lithuanian tourism is analyzed by Svetikienė (2002), Ligeikienė (2003), Čepinskis and Kanišauskaitė (2010.)
Results of the research will be adapted for further research in the areas of organizational learning and social responsibility. Furthermore, these results can be adapted for individual organizations that promote lifelong learning, individual learning and organizational learning.
Keywords: Senior tourism, market development, senior organizations, tourism organizations, social responsibility.
JEL Classification: D23, D83, L83, M14. Paper type: Research paper.
139
Session
MANAGEMENT TRENDS IN CHANGING ENVIRONMENT
140
CONTEMPORARY APPROACH TO INCREASE PROJECT SUCCESS
Laura Bakinaitė, Evelina Meilienė, Bronius Neverauskas Kaunas University of Technology, Lithuania
Purpose. Success is one of most important project’s characteristic and the key priority of activity in contemporary project management. Consequently there are many suggestions on how to ensure success of project management. Despite the efforts of determined project success using many factors of direct impact on project success the number of project failure remains still high. The situation may be partially explained by the fact that so far existed project success models provide only a general knowledge and insufficiently help project manager to solve failures problems. This paper’s purpose is to present coherent solutions to complement existing approach used to pursue and to achieve project success.
Methodology. In scientific literature there are distinguished many of critical project success factors. But abundance of information does not help project manager to find a solution because he has no clear answer which of those factors and models does significant impact on project success. This paper represents the updated approach which includes expanded number of in scientific literature presented project success factors. All these factors are applicable in advanced approach to strengthen project management success probability.
Results. The research results include that project management should be comprehended as methodology. Paper presents a methodology how to manage all success factors in different project life cycle stages. There are not only revealed success factors but also techniques and tools.
In paper is discussed success factors such as 10 project management success factors model, factors related to project manager, team, organization, environment, critical success factors in projects initiation, planning and implementation stages, techniques and tools in these stages and knowledge areas and stakeholders impact on project success.
Paper also points out that project success is understandable as complex of three components: qualitative project management process, stakeholder’s satisfaction and traditional view of project success: time, budget and quality.
Value/originality. Often happens that project manager have to reach project success without appropriate budget, time and/ or human resources which are crucial to project. Moreover nowadays projects are initiated in very dynamical, unpredictable and turbulent environment. That is why project manager must be equipped by reliable and comprehensive information about those essential and crucial factors which make impact on project success. The need for concentrated information about factors, tools and techniques which can help to focus on key contemporary areas and priorities is increasing project management success probability.
Keywords: Project success, project management success, project life cycle. JEL Classification: H4, O22. Paper type: Theoretical paper.
141
LATVIAN CLOUD SERVICE PROVIDER COMPETITIVENESS CASE STUDY
Leonards Budniks Riga Technical University, Latvia
Development of cloud computing brings to small and medium-sized enterprises management
power of the large enterprise Business Intelligent tools with the lowest cost possible. Entrepreneurs in Europe and America in particular are already using Internet for business needs. Mentioned use of internet is not about customer engagement, social media activity or simple banner placement on different sites. It is about business process management with tools/programs placed in Internet. Business management applications for small and medium-sized businesses recently have been developed with the idea that they could be accessible from anywhere in the country or in the world, not only from the company's computer. Cloud computing market is one of the fastest growing markets in IT industry. Experts predict 25% growth in 2013.
Therefore, the question arises: are Latvian IT industry entrepreneurs ready to follow the new trend in software development. The research field is very broad and contains a lot of directions, which may include - the existing cloud services supply identification and evaluation, problem allocation and finding possible solution, as well as business (potential user) attitudes clearance for that kind of software.
The objective of this paper is to determine the cloud computing development level in Latvia. To do so the Latvian cloud solution will be compared with the European and American equivalents, and using the techniques and criteria described in the literature, will be assessed their competitiveness level. Detecting bottlenecks and defining the possible solutions are put forward as the second objective of this paper.
Each of the selected cloud service providers has been evaluated based on three criteria - functionality, design and cost. These criteria were obtained by authors in the previous studies and were tested it this research. Each cloud provider assessment has been conducted by 4-5 experts who had been introduced to the service provided.
The research results provide an insight into cloud services in Latvia and define gaps that hinder their development. The results indicate that the Latvian SaaS providers have not fully realized the benefits of cloud technologies and the services they provide are insufficient or, in some cases, unnecessary. In contrast, European solutions try to better understand customer needs and to improve service quality continuously.
The study results also indicate future research directions: A. Finding out Latvian entrepreneurs’ attitude towards ‘cloud’ technologies. B. Determination of the solutions that are necessary for managers of Latvian small
businesses. C. Quantitative evaluation of the cloud computing impact on business competitiveness in
Latvia. Keywords: management decisions, IT, Internet, cloud computing. JEL Classification: M10, M15, M39. Paper type: Research paper.
142
WHAT THE ANTECEDENTS AND CONSEQUENCES OF COOPERATIVE ARRANGEMENTS INHIBIT THE EMERGENCE OF COOPERATIVE
STRATEGIES OF LATVIAN FOREST OWNERS?
Andrejs Chirjevskis, Aiga Grasmane Riga International School of Economics and Business Administration, Latvia
Purpose. The aim of the paper is to investigate the commercial viability of forest owners’
cooperative strategy in forest sector in Latvia. Latvia is one of the rare countries in European Union where forest owners’ cooperation (FOC) is not developed.
Methodology. The research is carried out under non- contrived settings as a descriptive, cross-sectional study with the minimum researcher interference. Forest owners’ of Latvia are serving as the units of the study. The appropriate research questions serve as guidelines on how to achieve the aim of the research. Firstly, the paper investigated theoretical and practical application of such concept of commercial viability of a strategic choice as a SFA: suitability, feasibility and acceptability. Secondly, having used primary and secondary data the antecedents and consequences of cooperative arrangements which facilitate the emergence of FOC in Latvia have been explored. Thirdly, to confirm or disprove commercial viability of FOC strategic choice, the Quantitative Strategic Planning Matrix has been applied and the results were discussed. There are following data’s collection methods applied: quantitative – secondary data and questionnaire, and qualitative - semi-structured interviews. .
Results. Important conclusion here is that the group of FO with 20-50 ha constitutes 28% of the private forest area which is a very good potential for FOC operations. The analysis and interpretations regarding resource exploitation allow drawing conclusions that there is a very good potential for cooperative operations because so many forest owners simply do not manage their forests due to lack of knowledge, motivation, access to market, bad experiences or other reasons. Then, all respondents agree that there would be price benefit provided FOC can deliver certain volumes of timber. 45% of the respondents indicate that the price benefit would be minimal – 2-5%. A very important conclusion here is that FOC should have the potential to provide price benefit for their members through pooling resources and a common market access.
Practical implication. The results of this research proved that there is an interest from forest owners to join FOC especially appreciating the better market access for their products and increased income from forestry and thus facilitate the competitive advantage of Latvian Forestry as a whole. The research conducted provides a useful information and knowledge obtained for further development of forest owners’ cooperation in the light of active discussions on Latvia’s position on EU Rural Development Program 2014-2020.
Value/originality. Quantitative Strategy Planning Matrix (QSPM) provides a clear comparative platform for evaluating the suitability and feasibility of the strategic choices on cooperative strategy. Consequently, the Mendelow „Power/Interest“ matrix has been applied to analyze the acceptability of the cooperative strategy. Cooperative strategy is a commercially viable strategic choice in terms of better in capitalizing the external opportunities and in exploiting FO resources.
Keywords: Commercial viability, Cooperative strategy, Forest owners’ cooperation. JEL Classification: L14; L22; L73. Paper type: Research paper.
143
MANAGEMENT TRENDS IN CONTEMPORARY FASHION INDUSTRY
Ramunė Čiarnienė, Milita Vienažindienė Kaunas University of Technology, Lithuania
The fashion industry encompasses design, manufacturing, distribution, marketing, retailing,
advertising, and promotion of all types of apparel from the most rarefied and expensive haute couture (literally, “high sewing”) and designer fashions to ordinary everyday clothing. Fashion industry developed first in Europe and America, today is an international and highly globalized industry, with clothing often designed in one country, manufactured in another, and sold in a third. The fashion industry has long been one of the largest employers and it remains so in the 21st century and accounts for a significant share of world economic output.
Fashion is one of the most visible media of change. It reflects the change in aesthetic, economic, political, cultural, and social life. The fashion industry forms part of a larger social and cultural phenomenon known as the “fashion system,” a concept that embraces not only the business of fashion but also the art of fashion, and not only production but also consumption.
Modern fashion industry is fast-moving, trend-driven sector and can be characterized by volume, variety and velocity; globalization; seasonality and short lifecycles.
Purpose. The purpose of this paper is to describe main management trends in contemporary fashion industry with an emphasis on fast fashion and supply chain management.
Methodology. Paper is based on analysis of scientific literature, best practice, and empirical data.
Results. In recent decades, large fashion retailers have revolutionized the fashion industry by following what has become known as the “fast fashion” strategy and “fast flow” process.
Fast fashion is a business strategy which aims to reduce the processes involved in the buying cycle and lead times for getting new fashion product into stores, in order to satisfy consumer demand at its peak.
Moves to improve responsiveness of supply chains in the fashion industry can be made with introduction of concepts such as just-in-time, agile supply chain, ‘seamless supply chain’ and quick response systems.
Fast flow can improve supply chain performance by reducing lead times, increasing the availability of goods, and improving the accuracy of the goods delivered to orders placed. Important aspects of fast flow process are upgrading of information and communication systems as well as the overhaul of distribution/handling systems.
Summarizing scientific literature analysis, best practice, and empirical data, following remarks on fast fashion can be made: fast fashion is a consumer-driven process; retailers no longer carry stock and therefore work with manufacturers who can supply them with new product quickly; suppliers are under increased pressure to be more flexible and responsive to changing demand; a shift in partnering and networks; elimination of stages in the supply chain; emergence of fast fashion sourcing regions; shorter production runs; and changing logistics system.
Value/originality. Original model with emphasis on logistics, supply chain, and fast flow is presented.
Practical implications. Findings of this research and presented model can be used for future empirical researches.
Keywords: fashion industry; management; supply chain management. JEL Classification: M11, L67, L81. Paper type: Theoretical paper.
144
RESEARCH OF POSSIBILITIES OF YOUNG PEOPLE PLACEMENT
Rūta Čiutienė, Asta Savanevičienė, Aušra Rūtelionė Kaunas University of Technology, Lithuania
Purpose. The main purpose of the article is to identify problems and possibilities of young people placement in employers approach.
Research methodology. By scientific research on career management analysis, the paper examines the career models and possibilities and advantages of practical application. The paper focuses on youth integration in the labour market problems and employers role in early career. The article also introduces the results of empirical research performed in Lithuania, Czech Republic, Austria, Slovakia and Spain. The empirical research was performed while implementing Life Learning program Leonardo da Vinci Innovation transfer project “DISCOVER YOUR STRENGTH & YOUR EDUCATIONAL AND LABOUR MARKET POSSIBILITIES” (No.2011-1-ES1-LEO05-35775).
Results. A problem of young people placement is topical not only in Lithuania but in many states of EU as well. Since 2008 unemployment of young people in EU increased from 15% to 22%, and 75 million of 200 million of unemployed all around the world are persons aged 16–24 year old. Stimulation of EU young people employment is an underlying question. There are different means predicted in order to increase possibilities of young people placement: increase of job attractiveness, enterprise stimulation, development of services of professional orientation and other. Germany is considered the leader of young people placement problem solving where the level of youth unemployment is the least. A fair influence to maintenance of low level of youth unemployment and development of young people placement possibilities is made by career model prevalent in Germany where very big attention is given to early and timely professional orientation. Besides, a close relationship is being formed between employers and potential young employees since school. Employers propose practices for students, cooperate closely to professional schools as well, and accept trainees that are receiving salaries in great numbers. Often such practice becomes all-day job. Unfortunately, there is poorly developed system of professional orientation in Lithuania and many other states of EU, especially early relation of employers to future potential employees – young people. The results of empirical research showed that employers, participating in the research, paid little attention to early development of practical skills of young people. Usually employers looking for employees require practical skills, latter they are wasting lot of time and investing big financial resources in order to prepare young employee for new job. In Lithuania, Czech and Slovakia there are less young employees engaged than in Austria or Spain. Inadequacy of candidates to requirements and lack of skills are indicated as the main problem of placement of young people. In the research young people are considered youth aged 14-21 year old.
Practical implications (if applicable). The results of empirical research allow foreseeing the means and instruments for development of young people placement and early career development. The results can be applied in business and other organizations for early career development of young employees.
Value/originality. This paper presents the role of employers in early career development. The study contributes to knowledge about features of early career development and young people placement in different countries (Lithuania, Spain, Austria, Slovakia and Czech Republic).
Keywords: young people placement, employers, career, practice, practical skills. JEL Classification: M12. Paper type: Research paper.
145
THE CONTRIBUTION QUALITY MANAGEMENT SYSTEM MATURITY LEVEL TO QUALITY COSTS ANALYSIS
Asta Daunorienė Kaunas University of Technology, Lithuania
Quality management system maturity level can be expressed as independent variables set
which confirm successful functioning of the organization quality management system. Quality maturity analysis is a tool that enables an organization to evaluate its progress toward quality goals, and in setting new goals ( Casto, 202). According to Chase (1998), Wheldon & Ross (1998), Viger & Anandarajan (1999) there is a correlation between the quality system maturity level and quality costs.
Sörqvist (1998) argue that quality costs can be divided into five analysis levels: traditional quality costs, hidden quality costs, loss of income, user costs and socio - economic costs.
Purpose. The main purpose of the paper is to analyse the relationship between quality management system maturity and quality costs analysis levels.
Methodology. This paper integrates logical and systematic analysis of scientific papers. To analyse quality costs into different organization quality management maturity levels is developed generic descriptive model.
Results. The results of the paper show different quality costs analysis density in different organization quality management maturity levels. Additional research is needed to enhance relationships between quality improvement and quality costs optimization programs in different quality management maturity levels.
Practical implications. Proposed generic descriptive model is a useful tool for quality costs analysis.
Value/originality. This study provides deeper understanding between quality management maturity levels and quality costs analysis.
Keywords: quality management system maturity, quality costs. JEL Classification: M00, M29. Paper type: Theoretical paper.
CONTINUOUS IMPROVEMENT OF CITIZENS’ SATISFACTION IN
LITHUANIA PUBLIC INSTITUTIONS
Asta Daunorienė, Alma Žekevičienė Kaunas University of Technology, Lithuania
Continuously raised modern society expectations and economic crisis in the world has
touched every sector. Public institutions weren‘t an exception. Such situation has encouraged public institutions to search for new solutions how to improve service quality.
Recent years improving public services quality by using quality management methods is one of the most important quality initiatives in Lithuanian public sector. Efficiency and effectiveness become the main focus of the government due to insistence and hopes from society for public institutions giving their services up to the quality standard as expected by the tax payers (Yusof, Ismail & Newell, 2008).
Mehra & Sampath (2008) have stated that the organizational emphasis in future will cover four quality improvement areas: customer focus, process focus, innovation focus and environmental focus.
146
Public institutions have a great challenge to ensure a high level quality focusing on the citizens’ requirements, processes, innovation and environment as well. Citizen’s satisfaction is one of the primary goal for every public institution, which oblige to listen to the “voice” of citizens, to understand their needs, to verify the compliance of provided services to actual citizens’ expectations (Cappelli et all, 2010).
Purpose. The purpose of this paper is to analyze the links between citizens’ satisfaction variables to overall satisfaction in order to support quality improvement actions for Public institutions managers.
Methodology. This paper provides logical analysis of scientific resources, statistical methods to analyse causal relationships between citizens’ satisfaction independent and dependent variables. There were analyzed two types of data: public institutions intense of using quality management methods and citizens’ satisfaction data on public institutions service quality.
Results. In order to identify the most important quality improvement areas and to help managers to admit improvement actions outcomes of different statistical analysis are presented.
Practical implications. Research results are useful for the Public institutions managers to support quality improvement actions.
Value/originality. This paper complements Lithuanian public institutions service quality area and its’ relationship with citizens satisfaction. Using secondary data along with methodological measurement, this paper provides representative information about the public institutions quality improvement actions.
Keywords: public institutions quality, citizens’ satisfaction, TQM methods. JEL Classification: M00, H11, H60. Paper type: Research paper.
ORGANISATIONAL ENTREPRENEURSHIP
IN ORGANISATIONAL LIFE-CYCLE
Jurga Duobienė Kaunas University of Technology, Lithuania
Purpose. The paper deals with the development of organisational entrepreneurship in
different stages of organisational life-cycle. Methodology. The theoretical background of the research is based on Schumpeter’s (1942)
approach of entrepreneurship transformed into organisational level and developed by Pinchot and Pinchot (1994) as well as on Miller and Friesen’s (1984) five stage life-cycle model. Research methodology is derived from quantitative approach. The research model and questionnaires are developed from Wickham’s (2004) model of entrepreneurship, updating its three characteristics of entrepreneurship, i.e. innovations, strategic objectives and potential for growth, to relevant content for organisational entrepreneurship, and the stages of organisational life-cycle were tested according the methodology of Lester et al. (2003). 77 Lithuanian organisations participated in this research.
Results. The research showed that the expression of organisational entrepreneurship is growing continuously in first three stages of organisational life-cycle. The increase of innovations is the highest while the strategic objectives and potential for growth is expressed higher, but the increase of these two characteristics of organisational entrepreneurship is less that of the first one. At the end of maturity organisations have two options, i.e. renew or decline. The difference in organisational entrepreneurship in renewal and decline stages comes mainly from innovations. Innovations come to new level of development in the renewal stage while they are almost dropped down in the decline stage. In general, organisational entrepreneurship grows in the first three stages of organisational life-cycle, but it is the most valuable for organisations in the crossroad of the maturity stage.
147
Practical implications. The research findings might draw an attention of practitioners into the value of innovations for successful organisational development from the maturity to the renewal. Organisations are argued to take care about the developments of their innovations. Moreover, the research showed that the strategic objectives for the renewal stage are much lower than the potential for growth, so this is also a possibility to explore for the organisations.
Value/originality. First of all, this research presents a model for evaluation of expression of organisational entrepreneurship that systemise relevant theoretical and empirical researches in the field of entrepreneurship and corporate entrepreneurship. Moreover, it reveals the development of organisational entrepreneurship in the whole organisational life-cycle while most of researchers that join organisational entrepreneurship and organisational life-cycle topics are focused on establishment and growth of organisations, but there are only some researches analysing organisational entrepreneurship in further stages of organisations life-cycle.
Keywords: Organisational entrepreneurship, innovations, strategic objectives, potential for growth, organisational life-cycle.
JEL Classification: L26. Paper type: Research paper.
FORESIGHT AS A TOOL OF OVERCOMING PROBLEMS ASSOCIATED
WITH UNCERTAINTY OF THE ENVIRONMENT
Joanna Ejdys Białystok University of Technology, Poland
Purpose. Diversity and variability of organization’s environment have a certain level of
uncertainty about the future states. Uncertainty which is the central theme of strategic management is a key factor for managing organizations, determining the company's competitive position in a long time. Uncertainty means that the ability of managers to predict future states, requires the use of new instruments and methods. Such instruments include foresight. The article presents how organizations can overcome problems with variability and unpredictability of the environment in which they operate by using foresight approach.
Methodology. Based on a literature review article presents a strategic foresight relating to the level of the organization. The article studies the characteristics of foresight determine the suitability of this tool in overcoming problems related to the volatility and unpredictability of the environment.
Results. The basic features of foresight studies, which determine the usefulness in combating volatility and unpredictability of the environment include:
use a variety of methods, ensuring diversity of sources of data, methods of obtaining them - which ultimately determines the quality of the source data and improves the accuracy of the information, thus influencing the improvement in predictability;
socialization process of creating the future. Foresight is involved in the process of creating a vision for the future customers, managers, owners, suppliers, contractors and employees, so that all stakeholder groups they feel co-responsible for co-creating the future thereby reducing the likelihood of changes in conditions arising from the proximal environment of the organization and the emergence of new unforeseen circumstances;
continuity of the process of creating the future, foresight studies characteristic ensures that the participating organizations systematically analyze the current environment, adapt to changes and predict future changes;
taking account of the unprecedented events such as the wild card in the foresight study ensures that the organization is more aware of your surroundings and the strategic decision-making process is more resistant to future changes;
148
the fact that the foresight research create a safe space. The results are placed in the distant future, which allows participants to be more open to co-operation, understanding their vision and the development of trust between the participants.
Practical implications (if applicable). The results of the study will form the basis for building a model of foresight studies.
Value/originality. The results of the study will form the basis of research foresight model, providing tools of overcoming problems related to the uncertainty surrounding by organizations.
Keywords: Environmental variability, unpredictability, foresight JEL Classification: L21, M00. Paper type: Theoretical paper.
HUMAN RESOURCE MANAGEMENT IN AZERBAIJAN COMPANIES:
EVALUATING IN FUNCTIONAL LEVEL
Ragif Gasimov, Natig Gurbanov Azerbaijan State Economic University, Azerbaijan
Purpose. The main purpose of this paper is to analyse Human Resource Management (HRM)
practices of Azerbaijan companies. HRM departments accomplish several functions to reach goals identified by the company. In this paper job analyses, recruitment, training and development, performance appraisal and compensation administration are chosen among of these functions.
Methodology. This analysis has been carried out with the questionnaire method. The developed questionnaire was intended for HRM managers of the companies (114 company), which run business in Azerbaijan. Collected data was tested and analyzed in SPSS program.
Results. This research resulted in following outcomes related to human resource management functions:
1. Research reveals that almost 70 % of national companies have completed job analyses. However, comprehensive and overall analysis of job requirements indicate that this percentage is much more than it was claimed.
2. Questionnaire results, related to recruitment and selection practices in national companies in Azerbaijan testify that companies preferably use internal sources in employee’s recruitment while in selection of employees companies widely apply job interview methods.
3. Questionnaire results give evidences that there are lots of problems with analyzing training needs, training and evaluation practices.
4. There were few evidences or low level percentage in applying of modern assessment methods of employee performances. Besides, relationship between individual performance and organizational base performance has not been taken into account.
5. Applied compensation system has not been critically examined yet. On the contrary effectiveness of the compensation system has appeared to be at the middle level.
Practical implications. More effective implementation of human resource management functions leads to following achievements:
To know the needs of employees and the reasons of their requirements; To know companies’ manpower demand and selection methods; To identify all important professional qualifications and development; To identify employees which demonstrate high and low performance; To examine an appropriate compensation system of the company.
Value/originality. Companies which function in the territory of Azerbaijan will benefit from following outcomes:
149
State of recruitment practices and theoretic inputs how to improve recruitment methods in Azerbaijani companies;
Condition of training and development in national companies with its emphasis on the importance of recognition training needs analysis of current employees as well as provision of evaluation methods;
Monitoring and evaluation of current employees performance and new methods of development strategies in companies;
Emphases on compensation systems and selection of best methods; All evidences of the research in the framework of above mentioned human recourse
management functions collected in this paper develop general description which make possible using efficient methods.
Keywords: Recruitment, training and development, performance appraisal, compensation. JEL Classification: M12. Paper type: Research paper.
THE KEY FACTORS FOR CREATIVITY IMPLEMENTATION
IN AN ORGANIZATION: THE STRUCTURAL APPROACH
Lina Girdauskienė Kaunas University of Technology, Lithuania
Purpose. Each organization needs to create a proper environment for creativity and
knowledge creation in order to be successful and to win the hard global competition. A creative organization could be used as a prime research source for the creativity factors. It is a knowledge intensive organization which distinguishes itself for its origin in individual artistic creativity, skills and talent, which are used for new knowledge creation and innovation implementation. Effective utilization of these characteristics exploitation requires corresponding environmental factors which create proper conditions for individual creativity potential development and use for knowledge creation. This paper aims to identify and evaluate what are the key factors for individual and organizational creativity and knowledge creation in a creative organization.
Methodology. Theoretical background based on the structural approach was prepared by description, analysis, comparison and the synthesis of scientific literature, the empirical qualitative research was done in Lithuanian creative organizations.
Results. The qualitative research results show that open culture, team structure (harmony, group heterogeneity, group competence, size), tasks (new, complex, sophisticated) and leadership (transformational) are the main determinants for individual and organizational creativity and knowledge creation in a organization.
Practical implications (if applicable). The identified key factors for individual and organizational creativity implementation allows for all traditional organizations to form and construct the proper conditions in order to be creative and innovative.
Value/originality. Theoretical scientific literature analysis based on the structural approach let to identify the main organizational dimensions for individual and organizational creativity and knowledge creation in a creative organization. Executed qualitative research confirmed theoretical conclusions.
Keywords: creativity, knowledge creation, organization structure, culture, leadership. JEL Classification: M0. Paper type: Research paper.
150
WORKPLACE STRESS AND ITS IMPACT ON JOB PERFORMANCE
Adriana Grenčiková, Jana Španková Alexander Dubček University of Trenčín, Slovakia
Purpose. The main objective of the survey is to identify single types of stressors affecting employee job performance and assess their severity and frequency. In addition, the survey attempts to identify symptoms of stress and ways of coping.
Methodology. There have been many studies conducted on the impact of stress on employee performance in human resource management. We live in a world of rapid changes, both personal and professional that affect people’s behaviour and may cause stress. We encounter stress in all domains of our lives. Stress is a natural part of life, if moderate and lasting not too long. Excessive stress can have serious psychical and physical consequences. In addition to major life events, many stressful events are related to the workplace. Several studies show that performance of an individual decreases with inadequate working conditions. Nowadays, workplace stress has become a major issue faced by employees. It is common for stressed employees to eat unhealthy food, smoke, drink alcohol or lack exercise. As a result, increased levels of cortisol, the major stress hormone, may occur. Elevated levels of cortisol may cause damage to blood vessels and heart. The concept of effectiveness refers to the ability of employees to achieve maximum performance. Effectiveness can be perceived as a particular set of qualities, characteristics and qualifications that employees use in performing their functions. On the other hand, performance is perceived as an indication of the existence of effectiveness. Contrary to effectiveness, performance is characterized by a more lasting set of dispositions and abilities of employees. The entire effectiveness of the company is primarily to put down to staff performance. Job performance is not as constant quantity. There are many factors affecting job performance, such as employee’s qualifications, abilities, skills, work experience, motivation, state of loyalty and engagement, the quality of work environment and last but not least ability to cope with stressful situations and long-term exposure to stress related to the current economic climate. Thus, we find it important to address the issue of the impact of stress on employees and find ways to reduce or eliminate adverse effects of stress on job performance.
Results. Currently, the Freescale Semiconductor company employs an international staff consisting of more than 100 specialists who have made a vital contribution to the company success. The management of the company place great emphasis on quality of project management process and quality of software products. Consequently, the company can benefit from the survey and implement the recommendations proposed in managing employees in order to reduce or eliminate the negative effects of stress on well-being of employees and their job performance.
Practical implications. In the present study, we investigated stressors in the Freescale company which affect the job performance and health of employees.
Value/originality. The novelty of the study lies primarily in applying theory into practice, verification of hypotheses and proposing recommendations for the company in question.
Keywords: stress, job performance, cortisol, workplace, stressor, stressful events, effectiveness, working conditions, ways of coping.
JEL Classification: O15. Paper type: Research paper.
151
LANGUAGE COMPETENCES AS A PART OF COMMUNICATION CAPITAL OF MANAGERIAL STAFF
Monika Gullerova, Elena Delgadova Alexander Dubcek University of Trencin, Slovakia
Purpose. Education and training have become the cornerstone for the development of today's
knowledge society and economy. The goal of the European Union is a challenging one – to become the most competitive, active and dynamic knowledge-based economy worldwide, featuring sustainable economic growth with more and better jobs. The purpose of the paper is to identify genres used and tasks executed by managerial staff in every-day work situations at C1 level. The paper addresses communication capital, made up of language competences, communication competences and intercultural competences necessary for managers at any levels of organizations. Communication capital is one of the soft skills which cannot be replaced by technical know-how and is if great significance for managers to function effectively at work.
Methodology. Linguistic language methodology was employed to determine language competences of managerial staff. Following the primary need analysis, an interview containing open-ended questions with managers was performed. Having analysed responses, a questionnaire for the managerial staff was drawn up. To make the survey respondent-friendly, a genre approach (genre as a text type) was selected and respondents described their competences with reference to individual genres.
Results. Having investigated responses, a thesaurus of language competences required for managerial staff was developed. It was found that managers are faced with twenty two genres in their every-day work situations and ninety three foreign language competences (“I can do” statements) at C1 level.
Practical implications. The competences required for managerial staff can serve as guidelines for language teachers and course designers. On one hand, they can be used to underpin the fundamental lexical, structural and functional syllabus of the course. On the other hand, the competences required help determine the teaching methodology applied in the course delivery. Thus, students in business and management will be able to acquire the skills that are transferable in nature and can be employed in a wide range of professional situations.
Value/originality. The novelty of the paper lies in identifying language competences needed for managers in carrying out their every-day duties. Competences (“I can do” statements) are further classified by four language skills (reading, listening, speaking, writing), genres (genre as a text type) and types of discourse (situation).
Keywords: communication capital, language competences, managers, management, business, thesaurus, professional sphere, C1 level descriptors, genre approach, language skills, discourse.
JEL Classification: O15. Paper type: Research paper.
COPING WITH DIFFICULT SITUATIONS AND LOAD IN MANAGEMENT
Erika Hančovská Alexander Dubcek University of Trencin, Slovakia
Purpose. The study is based on specific personal characteristics of managers, for instance, a
relatively good choice of behavioural strategy and some practical studies as well as on phases of coping with difficult situations, appropriate and inappropriate ways of coping, coping styles focused on task, emotions and avoidance. Coping with difficult and stressful situations is today a broadly discussed topic among people from the professional public. The study explains that the answer may be useful for any layperson.
152
Methodology. The present study introduces our own research, experimental evaluation of working hypothesis, evaluation of research data and presentation of results. The aim is to analyse the relations between personal characteristics of managers and the use of coping strategies in difficult situations in management. The analysis also takes into account the situational and contextual aspects of these situations.
The study also focuses on significant differences in the choice of selected coping strategies in connection with the basic socio-demographic characteristics of managers – sex and age. With the help of correlation coefficients we analysed the relation between age and behavioural strategies using the COPE and CSI methodology. For the determination of significant differences in the choice of coping strategies in connection to sex and position the gained data were analysed using the T-test. The scientific research focused on the differences of average values between levels of managers for single indicators of COPE, CSI and IAS using the analysis of Oneway variance and Post Hoc comparing with the use of Tuckey test.
The research was carried out with the help of managers working on different posts. Results. The presented results confirmed our assumption that statistically there are significant
relations between sex and selected coping strategies in management. The age positively correlated with the selected coping strategies. These findings suggest that the preference of some coping strategies is closely linked with age and its selection increases with age, for instance coping, alcohol and planning, but the coping strategy decreases – social support seeking. The Result Section introduces the differences of coping strategies from the managerial position point of view – first degree, second degree and top managers.
Practical implications. The theoretical contribution is represented by the elaboration of the concept of coping in a given situation and in its practical level it is the verification of the given interactional model which may help not only the preparation of managers but also the recruitment process. From the methodological point of view the research is based on the preparation and verification of original methods of the above mentioned topics. Outcomes can have both theoretical and practical usage. After question clarification, professionals can help their clients as well as their managers. It can lead to a higher quality level of both advisory and crisis interventions.
Value/originality. Effective stress management can be considered as an indicator of psychological health. Each of the interviewed managers represented, in their own way, originality and provided our research original and unique results which are processed, evaluated and presented in tables and charts. The research dealing with the given topic is unique and has not yet been published.
Keywords: Stress factor, Coping with stress, Behavioral strategies, Coping, Behavioral adaptation.
JEL Classification: M12. Paper type: Research paper.
THE EVOLUTION OF INTERNAL COMMUNICATION
Jana Holá University of Pardubice, Czech Republic
Purpose. Internal communication as a managerial discipline has become important as a
managerial discipline only recently. By its gradual development, it is now perceived as a tool, which - when working efficiently - can become a strong motivator, however, on the other hand a strong stressful factor. The paper brings the overview of the development of internal communication within traditional and modern management and shows new trends which are connected to new technologies and globalization.
Methodology. This paper is based on theoretical approach – the compilation of literature review and authors' experience and previous research.
153
Results. The basis for innovation is the human know-how and communication enables the business aims come true. Internal communication becomes a part of business communication both transcultural and multinational. Communication has become a basic strategy and a must for global business. Current business communication is characterised by the choice of various channels and media with creation of multidirectional communication. The mistakes in communication cause serious problems reflected in profitability and the development of communication mechanisms is necessary for any business innovation. Knowledge management and internal communication in the intercultural environment are crucial for supporting of business communication between business partners and the use of modern technologies does not necessarily mean the better transfer of information. Technologies are the tools which are made more efficient with the use of the content. Communication competencies cannot be solely based on technological readiness but the management must focus on the primal importance of the communication - i.e. employee involvement.
Practical implications. Currently, the communication is challenged by new technologies and globalization, which can mislead out attention from its basic importance. This work highlights the importance of internal communication within the organization's management and its essential at the time of permanent expansion of information technology and globalization.
Value/originality. The paper brings the overview of the development of internal communication within traditional and modern management and shows new trends which are connected to new technologies and globalization.
Keywords: management, internal communication, business communication. JEL Classification: M31, M12. Paper type: Theoretical paper.
THE ROLE OF MOBILE LEARNING IN THE FUTURE OF EDUCATION
IN SLOVAKIA
Helena Kajanová Alexander Dubcek University of Trencin, Slovakia
Purpose. Mobile learning allows anyone to access education from anywhere and at anytime.
We present results of research conducted gathered from students studying at Faculty of Social and Economic Relations (FSEV), A. Dubcek University of Trenčín (TnUAD).
Methodology. For obtaining relevant information about the readiness of students to use mobile learning in education was used the questioning method - the questionnaire. We investigated the following: whether students have mobile devices, what purposes do students use mobile devices for, what the students‘ mobile learning readiness is. Questionnaires were evaluated with statistical methods.
Results. We present the positive effects and the negative effects of using m-learning. The results confirm the readiness of students to use mobile learning in education.
Practical implications. Online communication, making it possible to interact with others, has currently been the second most important channel of communication. By 2013, there will have been even more smartphone users than computer users. Thus, it is possible to benefit from the growing number of Internet and mobile devices users in learning and teaching process. This paper also highlights recommendations for future research and practice.
Value/originality. Considerably less literature exists about the m-learning in Slovakia. This research provides to better understand the direction of mobile learning in mainstream education. Mobile devices offer flexible access to the Internet and they support learning experiences that are personalised as well as collaborative.
Keywords: education, m-learning, mobile devices. JEL Classification: I21, I23. Paper type: Research paper.
154
MANAGEMENT OF STUDY PROGRAMME: APPLICATION OF QUALITY FUNCTION DEPLOYMENT METHODOLOGY
Inga Lapina, Janis Mazais, Jolanta Janauska, Raimonda Liepina Riga Technical University, Latvia
Purpose. There are different quality assurance methodologies applied for management,
assessment and improvement of study programmes in higher education institutions. The aim of the paper is to perform analysis and assessment of the Quality Function Deployment (QFD) methodology application for study programme management in changing environment, particularly focusing on the programme quality assessment.
Methodology. Several research methods, such as analysis and synthesis of scientific literature, logical and comparative analysis as well as questionnaire method are applied in this research. QFD methodology is based on so-called quality house matrix comprising information about client needs - “what” they need, and assessment of the significance of their needs. QFD methodology also provides an opportunity to determine the client’s high priority needs, wishes, requirements and significance of those study programme components that create client satisfaction. Visual picture can be obtained by organizing aforementioned information in a matrix that demonstrates significance of each study programme component for satisfaction of the client’s needs and wishes.
Results. Principle of continuous improvement relates to all facets of the study programme management, including initial analysis of the content of the study programme and the continuous improvement process. The study programme should be revised and advanced in accordance with the current requirements and anticipated future demands and needs for the specific professional qualification. As a result, the list and content of study subjects should be revised and updated, and also teaching methods, logic and structure should correspond to the needs of the particular environment. Application of QFD methodology can help to improve operation of higher education institutions, particularly management of study programme. If new professional knowledge is included in the study content on regular basis and academic staff is more motivated to acquire topical knowledge and skills, the study process becomes more rational, effective and it could save a lot of costs for the higher education institution. The research results will provide the staff of the higher education institution involved in quality assessment with a practical insight on application of QFD methodology for management and improvement of study programmes.
Practical implications (if applicable). The important aim of each higher education institution is to ensure topical knowledge and skills for students in order to make them competitive. Carefully arranged study and administration processes are a prerequisite of effective and efficient operations of modern higher education institutions. Implementation of QFD methodology can help higher education institutions to streamline all main and support processes. It allows improving the content of study programmes according to demands of changing external environment. An example of QFD methodology application for assessment and improvement of the study programmes at Riga Technical University is provided in the paper as well.
Value/originality. QFD is a well-known quality improvement and assessment methodology which can be applied in different fields, including higher education. The principle of continuous improvement refers to the study process, it relates also to initial analysis of the content of the study programme, management as well as continuous improvement process. The research helps to understand how QFD methodology can be used for management and improvement of the study process in higher education institutions.
Keywords: quality assessment, quality assurance, quality function deployment, study programme management.
JEL Classification: I21, I23, M10. Paper type: Research paper.
155
THE WHYS AND WHEREFORES OF THE STUDENTS INTERNATIONAL MIGRATION: EUROPEAN AND LATIN-AMERICAN ECONOMIC
PERSPECTIVE
Antonio Mihi-Ramirez University of Granada, Spain
Vilmantė Kumpikaitė Kaunas University of Technology, Lithuania
Purpose. The aim of the paper is twofold: firstly, This article examines economic and non-economic
factors that lead undergraduate students to migrate across countries in order to get educational benefits in an international framework; secondly, to present the survey results of undergraduate students of Colombia and Spain (countries that have a traditional close relation over time) about trends in migration comparing them with international official statistics.
Methodology. Through the use of structured survey analysing the attitudes to migration of European and Latin-American students and its comparison with the international official statistics this research attempts to reach a better knowledge about what factors, economic and non-economic, determine student´s migration features such us their motivations to migrate abroad, duration and intention to stay abroad, reasons for selecting country of migration and their preferred main countries for migration.
Results. Results have shown the economic factors are the most important reasons in the case of academic migration, specially the per capita incomes because of the family is very important to support these processes, and also the future earnings associated with international studies because it implies a higher economic returns as it is confirmed by scientific literature.
As secondary reasons would be cultural factors and the language, especially for students from Colombia.
Regarding the main destinations, the official statistics and the respondents have pointed out that for the students from Spain the traditional preferences continue to be United Kingdom and United States as main destinations, but in the case of Colombians the first destination with a foreign language is the United States and secondly Spain, but also Germany and Australia are growing as significant destinations
Practical implications (if applicable). The governments and international institutions should design policies that take in account these analysed factors that affect academic migration in order to improve their conditions and their attractiveness to international students because it involves several benefits such as extra income, higher labour market participation and economic growth. As this research has shown the scholars who study abroad will obtain higher economic returns and potential benefits, so it is important they pay attention to analysed factors and therefor finding destinations with better conditions.
Value/originality. These results are important for scientific due to the confirmation of previous researches and because several specific economic factors have been grouped as pull and push factors showing the main motivation of student´s migration. These factors are also important for scholars due to the growing international competition and international mobility, and also for the governments and international institutions because the benefits of international migration involve.
Keywords: International migration, economic factors of migration, international economy, student’s migration flow, academic migration.
JEL Classification: F22, F63, M00. Paper type: Research paper.
156
FACTORS INFLUENCING THE OUTSOURCING DECISION IN IT: EVIDENCE FROM LATVIAN PUBLIC ADMINISTRATION
Larisa Naumova University of Latvia, Latvia
Purpose. Outsourcing is a strategy used by public administration to provide high quality
public services at low cost and can be viewed as tool to increase public sector efficiency. However outsourcing has been widely discussed in the context of advantages and disadvantages, very little are discussion of the factors that determine public administration decision to outsource. Paper purpose is identified a set of factors that influence public administration decision to outsource information technology function.
Under the analysis of scientific literature are identified eleven factors that influence public administration decision to outsource information technology function (listed in alphabetical order) - company size, costs reduction, data security, demand fluctuations, inherently governmental function, innovation, intellectual property rights, language and culture, political drivers, resources of company and technical competence. All these factors are divided into three groups - general, public administration-specific and information technology-specific factors and verified with an empirical research. The sample set of empirical research is Latvian public administration employees (high, medium, and low-level managers and experts who have experience in usage of information and communication technology outsourcing).
Methodology. The research methods used include a scientific literature review and a survey of Latvian public administration employees (high, medium, and low-level managers and experts who have experience in usage of information and communication technology outsourcing).
Results. Identified key factors that influence public administration decision to outsource information technology function (listed in alphabetical order) - company size, costs reduction, data security, demand fluctuations, inherently governmental function, innovation, intellectual property rights, language and culture, political drivers, resources of company and technical competence. During the study, in addition were identified the views of public administration employees on outsourcing effectiveness and efficiency in context of decision-making process about outsourcing, as well as principles, influencing factors and conditions that must be taken into account.
Practical implications. Examining factors that influence public administration decision to outsource information technology function, helps in understanding the outsourcing decision-making process. As a result, public administration decisions become more structured, predictable and understandable to all parties and for society as a whole.
Value/originality. Under the analysis of scientific literature and based on empirical research are identified factors that influence public administration decision to outsource information technology function.
Keywords: Decision system, information and communication technology, outsourcing, public administration.
JEL Classification: H, H8, H83. Paper type: Research paper.
157
FORMATION APPROACH FOR PROJECT MANAGEMENT MATURITY MEASUREMENT
Bronius Neverauskas, Rasa Railaitė Kaunas University of Technology, Lithuania
More and more public and private sectors organizations become interested in the project management and its influence to organizational strategic goals reaching. More and more of organizations are making efforts to improve professional knowledge and skills in project management and to increase project management maturity (PMM) level. The purpose of this article is on the base of well known PMM analyzes results to develop project management maturity model appropriate to be used estimating the maturity level in higher education organizations.
Methodology used in the research: to better understand the changes in project management expression we decided to focus on two aspects: to identify and evaluate key issues in regarding of evaluation project management maturity and to understand peculiarities of project management in higher school with its specific challenges environment.
Results. As review of the literature shows, organizations with higher project management maturity level have formal and structured project management processes that are integrated into one system. Also these organizations have singular project management methodologies, best practices analysis systems and etc. Organizations with high maturity level are continuously improving their processes.
Since the Capability Maturity Model has been developed the world saw more than thirty new project management maturity models. The theoretical analysis of existing maturity models allowed to compare them and identify theirs advantages and disadvantages. Most of well known PMM could be used in various organizations and industries, but not particularly for higher education organizations.
The practical implication of this new project management maturity model is that the survey based on it usage could disclose and assess the real situation and the main problematic aspects of project management in higher education organizations which are carrying out projects to achieve its strategic goals in growing specific competitive environment
Keywords: project management, project management maturity, project management maturity model, OPM3, P3M3.
JEL Classification: O22, H43. Paper type: Theoretical paper.
CLUSTER ANALYSIS OF MANUFACTURING ENTERPRISES
Ekaterina Nikolaeva Saint-Petersburg Technological University of Plant Polimers, Russia
Purpose. The purpose of the paper is to define main groups of manufacturing enterprises of
certain industrial sector by means of enterprise clusterization on basis of rates (indicators) to be used as loss of stability signals and signals of necessity to start working out a plan of organizational changes on the enterprises in each part of the enterprise system. The subject of an inquiry are manufacturing enterprises of industrial sector.
Methodology. The methodological base of the paper are scientific works dedicated to theoretical problems of cluster analysis, Statistica manuals, annual reports of enterprises for several years.
The research methodologies used in the paper are: economic analysis, financial analysis, statistical analysis, cluster analysis. For carrying out economic analysis and financial analysis was
158
used Microsoft Excel, for carrying out statistical analysis, cluster analysis was used software Statistica.
Results. The results of the paper are: there was studied enterprises purposes for strategical development for the last years and for
the future; there were considered variants of the term ‘organizational change’ and formulation it as an
effective method of management for purposes achievement; there were considered possible directions of changes on the manufacturing enterprises and
their possible interconnection; there were determined a key role of quantitative methods in decision support systems today
and for the future; there was considered a classification of descriptive analysis methods within Data mining; there were studied theoretical issues of cluster analysis as an effective method of data
mining and it’s advantages in comparison with common descriptive statistical analysis; there were worked out and testified common rates or indicators to be used by management
of manufacturing enterprises as loss of stability signals in each part of the enterprise system (organizational, financial, technical, marketing or corporate culture) showing the risk of not achievement purposes;
there were collected data for calculation of proposed rates (indicators); there were considered possible software for carrying out statistical analysis and Data
Mining analysis; there was carried out a descriptive statistical analysis for giving a characteristic of certain
industrial sector; there was carried out cluster analysis in software Statistica by different methods for finding
out groups of the enterprises, where variables are rates (or indicators); there was given a characteristic to each of the group and determined what changes are to
be made by the management for improving certain parts of the enterprise systems for achievement final purposes;
there were got answers for the following questions: what groups of manufacturing enterprises of this industrial sector are on the market today from the point of possible directions of organizational changes and what parts of the enterprise systems are the most problem.
Value/originality. There were pointed out possibilities of application the proposed analysis algorithm for holding structures.
Paper type: Theoretical paper. Keywords: changes, Data mining, cluster analysis. JEL Classification: C38, C87,G34.
SMALL-CARGO DELIVERY OPTIMIZATION NEW OPPORTUNITIES
IN CITIES WITH INTENSIVE AND UNSTABLE TRAFFIC
Pavels Patlins Riga Technical University, Latvia
Purpose. The paper deals with the delivery process optimization in cities with intensive
traffic. It is significant to optimize the vehicle’s driving time and the accuracy to plan a city circular route in the optimal way. It is possible to provide a high level of the logistics service, only providing the accurate delivery, minimizing lead time. Nowadays many transport companies have difficulties to solve this problem in cities with unstable traffic
159
Methodology. The author investigates well-known circular routes planning and optimization methods as well as special methods and models worked out for particular cities. When transportation costs of the given route are non-linear dependent on the quantity of production for transportation, this problem becomes a non-linear transportation problem. To find the optimal solution for this problem (NTP), it is necessary to make a number of the investigations on logistics management. Many heuristic methods as well as mathematical program methods are created to solve NTP problems.
Mathematical methods, SRP solution methods and linear programming approaches have been used in the paper too.
Results. The author has worked out a new model (Delivery Optimization Model, DOM) which helps to solve SRP problems and improve small cargo delivery process in cities with unstable and hard traffic. Well-known methods are not efficient due to fluctuations of traffic intensity depending on ours of a day and days of the week.
Practical implications. The new model helps to improve delivery process planning in cities with intensive and instable traffic, improving the quality of the logistics service in the real life. The model is good for transportation companies as well as wholesalers and retailing companies.
Value/originality. The DOM model assumes the best approaches of the existing models, used to solve SRP problems with the fresh methodology, using GPS technologies. The author recommends to use video-registration equipment to collect needed information about the traffic intensity and fill the data base. The roads of the city should be divided into two groups: the first one is hard for accurate delivery planning, the second one is easy for delivery planning. After that it is necessary to optimize the first group delivery time planning process to plan circular routes by optimal way.
Keywords: delivery in cities, intensive traffic, SRP, DOM model. JEL Classification: M. Paper type: Theoretical paper.
SOLUTIONS FOR AGILE SUPPLY CHAIN MANAGEMENT
Kristina Rimienė Kaunas University of Technology, Lithuania
Purpose. The purpose of the paper is to introduce the concepts of agility and supply chain
management, provide the implication of agile supply chain and reveal the solutions for agile supply chain management.
Methodology. The paper is based on theory survey that included general interdisciplinary research methods: systematic, comparative and logical – critical scientific literature analysis through findings’ summarization and logical conclusions’ generalization.
Results. The agility and supply chain management concept integration has led to the development of the supply chain agility concept that has gained a broad recognition among science researchers and supply chain management practitioners. The on-going discussions on the agility topic has shown that the understanding of agility in both the organizational and the supply chain context as well as its key theoretical aspects are not fully clear, though the principles of agility are applicable in the management of different industrial activities, business processes, systems and resources. The paper presents authorial attitude to the agile supply chain, emphasizing its goal to satisfy constantly changing customers’ demands. The supply chain, aiming for agility in ever-changing market environment, management solutions that include the agile supply chain establishment, integration and development trends are discussed in the article. The emphasis is made revealing the significance of suitable strategy selection and up-to-date information systems’ implementation for the agile supply chain management.
160
Practical implications. Nowadays changing business environment dictates new strategies for successful competitive advantage acquirement. In this context developed solutions have a practical value to supply chain managers who have chosen an agility strategy.
Value/originality. Management trends in changing environment include agility strategy. The paper presents an original research on the newest scientific literature extracting nowadays attitude on the topics of supply chain agility and agile supply management. The article gives a new definition of agile supply chain and reveals original solutions for its management, which can constitute as a value to the supply chain agility concept developers as well as practical suggestions for strategic supply chain managers.
Keywords: agility, supply chain, agile supply chain, management, solutions, changing environment.
JEL Classification: L91, M21, R40. Paper type: Theoretical paper.
SUPPLY CHAIN MANAGEMENT TRENDS IN THE CONTEXT
OF CHANGE
Kristina Rimienė, Dalia Bernatonytė Kaunas University of Technology, Lithuania
Purpose. The purpose of the paper is to discuss the implication of changing market to supply
chain management and to reveal the supply chain management peculiarities in the context of change.
Methodology. The paper is based on theory survey and includes general interdisciplinary research methods (logical – critical scientific literature analysis and summarization, logical conclusions’ generation).
Results. The market globalization and its uncertainties, change of customer requirements, technological progress and other factors contributed to the development of new attitudes to row materials, products and services supply, production and logistics operations management and control. The supply chain management concept and its practical solutions were developed aiming for the growth of efficiency of physical, informational and financial flows including all the processes from the row materials production and procurement till the consumer goods delivery. As research showed, the supply chain management solutions depend on market orientation, which is a subject for a change. The paper analyses and presents the solutions for supply chain development and management in response to the changing market trends. The research allowed to recognize the importance of supply chain management through all the stages of its operation, and to state that if not appropriately managed from the very beginning the supply chain has to cope with smaller efficiently, deeper control, and a greater risk of failure problems latter.
Practical implications. Practical implications of the paper are connected to the supply chain management, i.e. development, integration and control, solutions revealed and recommendations proposed.
Value/originality. The changing business environment dictates new management trends in different industries, businesses, processes and operations. One of the main important fields for conceptual and practical research and operation is supply chain. The findings presented in the paper demonstrate an original attitude to the supply chain management problem solving in the context of market change.
Keywords: supply chain, management, solutions, change. JEL Classification: L91, M11, R40. Paper type: Theoretical paper.
161
MIXED METHODS RESEARCH DESIGN FOR THE DEVELOPMENT OF CONCEPTUAL MODEL FOR COACHING
Angelina Rosha Information Systems Management Institute, Latvia
Purpose. Coaching is becoming increasingly popular in today’s business environment, more
and more organisations are using coaching as a means of improving performance, managing career, attaining organisational and personal goals. Since the end of the 20th century, a sufficient amount of studies have been conducted in the field of coaching research. However, to date, there is no widely accepted model that can serve the purpose of setting theoretical frameworks for empirical studies on implementing coaching to improve organisational performance. This paper aims to present a conceptual model for coaching which has been developed by exploring the related literature and applying mixed methods in the analysis of data.
Methodology. Adopting mixed methods, the research is designed to be a concurrent qualitative-dominant mixed methods study.
Results. Findings from literature on coaching focused on general principles, executive coaching and business coaching as well as leadership and organisational development are combined and deployed into a conceptual model for coaching specific to business organizations. The model defines theoretical framework, sets conditions and relationships between key components of the model and organisational performance.
Practical implications The developed conceptual model provides a theoretical framework to logically structure and guide further research on the impact of coaching intervention on organisational performance. The paper is also expected to make a contribution to mixed methods research methodology by providing a practical example of how quantitative and qualitative methods can be combined and integrated to elaborate a conceptual model.
Value/originality. The value of this paper lies in the fact that the originally developed conceptual model for coaching is specifically designed for business organizations and constitutes the basis for further empirical research on implementation of coaching for organisational performance improvement.
Keywords: coaching, conceptual model, mixed methods research. JEL Classification: M 19. Paper type: Research paper.
CRUCIAL TRANSVERSAL COMPETENCES IN CHANGING ENVIRONMENT: CASE OF EUROPEAN SME MANAGERS
Asta Savanevičienė, Aušra Rūtelionė, Rūta Čiutienė Kaunas University of Technology, Lithuania
Purpose. The paper aims to define the top of crucial transversal competences for non-routine
tasks in case of SME managers. Methodology. Influence of highly dynamic environment conditioned by rapid economic and
social changes has increased consumers’ requirements and employees‘ expectations. That leads to new non standard situations that managers of business companies are facing. This problem is very urgent for managers of small and medium companies. Ability to adapt in rapidly changing environment and ability to behave in non standard situations of these mangers leads to competitiveness of company and success in activity. Thus competences enabling them to understand what is going in their business environment and take actions on time are the essential precondition of SME activity. Therefore the question is what competences SME managers should
162
have seeking to adapt easier to changing environment. The significance of competencies for fast-changing organization (May, 1999), generic competencies (Thompson & Richardson, 1996), strategic competencies (Thompson & Cole, 1997; Baker, etc. 1997, Sparrow, 2006), strategic distinctive (core) competencies (Assen, 2000; Ljungquist, 2008; Ackermann, 2010) are emphasising in scientific literature. In spite of different terms, namely the transversal competences, enabling to act successfully in environment where rules or sufficient information to guide through the process do not exist, uncertainty of decisions consequences leads to anxiety and stress, where time horizons are extended and unfixed, are using among scientists.
The method of field research is individual in-depth semi-structured interview with elements of quantitative survey. During the interview, each respondent has been asked to evaluate non routine tasks skills and to provide related cases, reasoning the importance of certain behaviour. The factorial validation technique has applied for scales quality testing. At first, all questions in corresponding block have been factorized by principal components method, while applying factors axis rotation according the highest dispersion (VARIMAX rotation). Then the structure of theoretically meaningful indicators has found, obtained single factors have additionally tested by applying alpha factor analysis method. This method has used for validity testing of single items combination to additive index. The dimensionality of the scale has tested while using this method in the research. Then crucial transversal competences have been excluded, content analysis has applied for processing of related cases.
Results. 62 respondents of European business service SMEs have interviewed (7 countries). The top 10 transversal competences for competitiveness have indicated and ranged according each country.
Practical implications. The paper provides better understanding regarding the content of transversal competences.
Value/originality. The research has indicated that aggregate competences that are urgent for managing non routine tasks in fast-changing environment consists of two competences units: (1) competences needed for process managing (2) competences needed for partnership and self managing. Cases related with these competences are presented in paper.
Keywords: non routine tasks, transversal competences. JEL Classification: L26, L84, M53. Paper type: Research paper.
INFLUENCE OF PROJECT MANAGEMENT MATURITY
ON PROJECT DURATION
Seweryn Spalek Silesian University of Technology, Poland
Purpose. The main purpose of this paper is to investigate whether reaching a higher level of
maturity in project management influences the duration of projects managed by the company. The maturity level and its impact is discussed in four areas: people, methods & tools, environment and knowledge management.
Methodology. To verify hypotheses, questionnaire-based, quantitative research was conducted . The study was carried out amongst various industrial companies. The data collection process was done between March 2012 and January 2013. The companies were located world-wide. The total number of investigated companies was 220.
Results. The outcomes of the study revealed that there is a positive impact on project duration when a higher maturity level is reached in project management. However, a more varying influence was observed in different areas of maturity: people, methods & tools, environment and knowledge management.
163
Practical implications (if applicable). To conclude projects faster is a goal of each company. Therefore, the outcomes of this article should guide them as to how to redefine their efforts in order to increase the efficiency in project time management.
Value/originality. There is a limited number of studies on Project Management Maturity and –especially – its influence on the project’s duration. Therefore, this paper sets out to fill the knowledge gaps in this specific area.
Keywords: Project Management, Maturity, Impact, Duration, Industry. JEL Classification: L16, L20, L23. Paper type: Research paper.
SUSTAINABILITY AS A CONCEPT FOR HUMAN RESOURCE
MANAGEMENT
Živilė Stankevičiūtė, Asta Savanevičienė Kaunas University of Technology, Lithuania
Purpose. The paper aims to examine theoretically the link between sustainability and human
resource management (HRM) from the perspective of organization. Methodology. Although human resources and their management are recognized as critical for
organizational success (Pfeffer, 1994; Becker and Gerhart, 1996), it is assumed that in the practice human resources are consumed and exploited rather than developed and reproduced (Thom and Zaugg, 2004). Striving to ensure the vitality of organizations and to overcome the new challenges for HRM, the concept of sustainability is of great importance. Though sustainability has become a mantra for our century (Dyllick and Hockerts, 2002), the full potential of the concept for HRM has not been till nowadays revealed (Ehnert, 2009).
The relevance of sustainability as a concept for HRM can be supported by two kinds of arguments (Ehnert, 2012): first, organizations operates in economic and social environments and HRM can no longer neglect the societal discussion on sustainability, moreover needs to make an input to sustainable development; second, due to the scare human resources, aging population and increasing work-related health problems sustainability of HRM itself becomes essential for surviving of organization.
Acknowledging the problems in defining the concept of sustainability and that the Brundtland Commission’s (1987) definition is one of the most popular, three conceptual approaches linking sustainability and HRM are analysed: sustainable work systems, sustainable resource management and sustainable HRM. The comparison of approaches allows to conclude that diversity of approaches provide different viewpoints respecting key questions (Ehnert, 2009): how future supply with motivated and qualified employees can be managed; how negative feedback effect of HRM can be controlled; who is responsible for sustainability implication in HRM. This conclusion is supported by rationalities for sustainability as a construct for HRM – normative, efficiency-oriented and substance-oriented understanding of sustainability. The paper was prepared by description, analysis, comparison and the synthesis of scientific literature.
Results. 1) the paper proposes an answer to the question – why sustainability is of great relevance for HRM; 2) the paper reveals the approaches linking sustainability and HRM and emphasizes the rationalities for the link between two constructs; 3) the paper identifies the challenges for HRM which can be solved by sustainability implication into HRM.
Practical implications. The paper provides for the theoreticians and practicians in the field of HRM better understanding regarding the link between sustainability and HRM and indicates that organizations can form and apply HRM practices which ensure the sustainable competitive advantage.
Value/originality. In the scientific literature the discussion on sustainability and HRM is the incoming topic, consequently the paper attempts to enlarge the theoretical foundation and to
164
encourage scientific discussion. The introduction of sustainability into HRM provides new framework how to ensure the vitality of the organizations.
Keywords: human resource management, sustainability, sustainable human resource management, sustainable work systems, sustainable resource management.
JEL Classification: M12, O15, Q56. Paper type: Theoretical paper.
COLLABORATION IN THE PROJECT TEAM
Asta Stulgienė, Rūta Čiutienė Kaunas University of Technology, Lithuania
Purpose. The main purpose of this paper is to identify the determinants of collaboration in
project teams. Project teams are increasingly committed by organizations to achieve an important organizational goal as they attempt to survive and grow in dynamic business environment. Decisions making of simple tasks and issues are definite and explicit and, it is enough to resolve them and make individual effort. Meanwhile team work is useful when you needed in various fields information, knowledge and skills. Various ideas and collaboration are necessary to achieve project objectives when decision of the problem is not clear. The main principles of team work are collaboration, listening to the other team member's opinion, trust, recognition and mutual support. Consequently, collaboration is one of assumptions of successful team work and project success as well. Successful collaboration is based on communication which allows achieving needs and goals as far as possible.
Methodology. Theoretical findings of collaboration are based on systematic and comparative analysis of the scientific literature.
Results. Theoretical analysis of collaboration allowed to reveal deeper understanding of collaboration conception, collaboration process. Trust, flexibility, communication, interaction, respect, resources, environment have been identified as success determinants of project team of collaboration.
Value/originality. The paper contributes the knowledge of successful performance of project teams. The gap of assumptions and determinants of project team collaboration in theoretical approach have been redressed.
Keywords: collaboration, determinants, project team. JEL Classification: A3, D83, J24, L2, O15. Paper type: Theoretical paper.
THE INCORPORATION OF THE DELPHI METHOD IN THE STRATEGY
OF TOURISM DEVELOPMENT IN THE REGION
Danuta Szpilko Bialystok University of Technology, Poland
Purpose. The main purpose of this work is to indicate the applicability of the Delphi method
in the process of building a tourism development strategy in the region. Methodology. In the first stage of the work the regional tourism development strategies in
Poland were analyzed in terms of the research methods applied in the process of building them. Subsequently the analysis of domestic and foreign literature on the use of the Delphi method in the field of tourism was performed.
165
Results. As is apparent from the study, 15 of 16 Polish regions already have a developed tourism development strategy. In all available strategies the research methodology was based mainly on tourism audit, SWOT analysis, vision and mission designation, the development of strategic objectives and directions, and operational programs. Only in four of them the development scenarios were further developed - mostly optimistic and pessimistic. The analysis of the strategies and the Polish literature indicates that the Delphi method has never been used in research in the field of tourism in Poland. The world Literature on the other hand indicates that the method was successfully applied in the area of tourism as early as in the 1980’s. This is confirmed by the case studies from Hawaii (USA), Taiwan, Venezuela, Nova Scotia (Canada) and Ukraine.
Practical implications. This article will identify the opportunities and advantages of using the Delphi method in the process of building a tourism development strategy in the region.
Value/originality. Indication of the possibility of applying the Delphi method in the process of building a tourism development strategy in the region will be an opportunity to build a vision of the future, based on the experience and expertise the stakeholders in the field of science, administration, business, media, and non-governmental organizations and institutions. Supporting the strategic planning process through the substantive involvement of stakeholders will enable the joint development of the social vision of the future of tourism development by the parties concerned and a sense of need for their implementation.
Keywords: tourism management, strategy, Delphi method, region. JEL Classification: L83, O18, P48. Paper type: Research paper.
TRANSFORMATION OF FEMALE LEADERSHIP
IN TERMS OF CHANGES IN LEADERSHIP COMPETENCY
Violeta Šilingienė, Dalia Stukaitė Kaunas University of Technology, Lithuania
The constructs perceived by many people in a traditional way underwent a transformation at
the end of the 20th century and the beginning of the 21st century. The necessity to adapt to the constant changes in the modern day world reflect a significant turning point and fundamental shifts of the social role of females as well as the concept of woman as a leader. The underlying transformation processes also progress in terms of the concept of the phenomenon of leadership by accentuating the ever broader access to leadership expression.
The focus on the need of leadership competency on the level of individual experience in relation to female leadership allows formulating the scientific problem: to determine the changes of which constituents of leadership competency are crucial for the transformation of female leadership in terms of long-term individual career.
Purpose - To identify the changes of the female leadership competency in terms of long-term individual career.
Methodology - Analysis and synthesis of scientific literature, with the purpose to reveal the traits of female leadership competency; and longitudinal study with the purpose to determine the changes in female leadership competency.
Results. The theoretical analysis allowed identifying the fundamental trends of female leadership research. According to the scientific literature, two approaches towards the problem of female leadership are clearly defined. The first approach focuses on the absence of gender differences in leadership. Leadership traits are related to individual qualities, character and temperament instead of gender. The second approach is focused on the proclaimed differences of male and female leadership. According to the results of the researches carried out during the recent
166
years, women exceed men in many fields of “soft” management. It is the prevailing nature of these aspects that defines a certain kind of transformation which encompasses the focus on the significance of leadership competency.
The empirical basis of this article is constituted of the results of the longitudinal study carried out in the years 2010 and 2012. These results revealed which of the constituents of leadership competency were of significance and what fundamental changes of female leadership competency occurred. The empirical research affirmed the theoretical statement that leadership is important to every person who has certain goals in life. Having considered the changes in the significance of two leadership competencies, these characteristic results were received: the relevance of personal leader attributes did not change, the need for leadership skills grew notably.
Practical implications. The received research results ordain the personal development perspective and may be actually applied when generating personal learning and development programs.
Value/originality. The scientific value of this article is comprised of new insights on female leadership which broaden the research object of this type of leadership. The approach that the changes in leadership competency also condition the transformation of female leadership in terms of long-term individual career signifies the transition from traditional to new aspects of studying this phenomenon.
Keywords: leadership, female leadership, leadership competency, career. JEL Classification: M12. Paper type: research paper.
CREATING OF TOOL TO IMPROVE PRACTICES OF KNOWLEDGE
MANAGEMENT FOR INNOVATIONS
Anna Štefančiková Alexander Dubcek University of Trencin, Slovakia
Purpose. Knowledge Management and Innovation are two key activities for companies. The
aim of this paper is to provide a practical tool for improving the various forms of Knowledge Management within the Innovation processes of companies. It is addressed principally to those companies with welldeveloped and sophisticated units for innovation, such as Research and Development (R&D) departments.
Methodology. The document arises from theoretical and empirical research into the relationships between Knowledge Management and Innovation which has specific focus on Knowledge Management Practices (KMPs) - the various activities, procedures, techniques and systems which are explicitly intended or utilised for creating and processing of knowledge. A description of the five main groups of “KMPs for Innovation”, that are the main operational elements of this Audit Tool is in the form of a detailed questionnaire which aims to act as a discovery mechanism and as a prompt to further reflection on the specific Knowledge Management activities within innovation processes. This is complemented by a format for specifying action plans for improving KMPs for Innovation.
Results. This study presents the following results: 1) Determining in more detail the relationships between Knowledge Management and Innovation, and the reasons for focusing on Knowledge Management Practices. 2) Describtion the five main groups of KMPs, that could be found within R&D and Innovation processes, together with some illustrative examples. 3) The construction of detailed questionnaire as a research tool to identify the status of implementation of KMPs for Innovations in the practice of a particular company. 4) Provide to administrator(s) a practical tool to audit, that will be based on the questionnaire. Results of audit will be determining creation of act plans to improve KMPs for innovation.
167
Practical implications. The application of this tool to audit KMPs is suitable for businesses of all industrial and commercial sectors. It is likely that he has the greatest relevance for R&D department of firms, but it certainly has value even for smaller companies or companies, that do not have their own R&D groups. KMPS in the Innovation processes involves a wide range of activities, like for example using the information technology, assigning of R&D staff, as well the writing and dissemination of technical reports and presentation of research and development results, etc.
Value/originality. An ability to understand and exploit the relationship between Knowledge Management and Innovation processes has more and more significance in competitive environments, where a dynamic capability to meet rapid change is an essential ingredient in achieving sustainable business success in volatile global and national marketplaces. KMPs are valuable for management of company, because they focus for improving performance within innovation processes. The observation and analysis of KMPs for Innovation offers important fresh insights into the crucial relationship between knowledge management and innovation.
Keywords: knowledge management, innovation, practice, audit tool, improvement. JEL Classification: A12, B23, C81, O32, O33. Paper type: Research paper.
SUSTAINABLE SHAREHOLDER VALUE:
ANALYSIS OF VALUE DRIVERS
Jelena Titko, Julija Bistrova, Natalja Lace Riga Technical University, Latvia
Purpose. The main objective of the paper is to determine the critical factors, which have an
impact on the long-term value maximization for company’s shareholders. Methodology. Content analysis of the text segments related to the issues of shareholder
value creation is performed. Information data basis consists of 100 abstracts of the published scientific papers from Scopus, EBSCO, Thomson Reuters Web of Knowledge and other databases. Publishing period covers 40 years (1972-2012). The relevant abstracts for the research purposes were selected based on the criterion of mentioning the notions of shareholder value creation, shareholder value maximization, shareholder value sustainability and similar word combinations. Information processing is performed by the means of text analysis software AQUAD 6.0 and Hamlet II. Both differentiation and generalization strategies were used when interpreting the data.
Results. Frequency tables generated by AQUAD and cluster analysis provided by Hamlet assisted authors to elicit critical factors stimulating value creation process in companies. Authors’ performed analysis revealed that sustainable shareholder value is based on the long-term and stable income stream, and its creation primarily is stipulated by properly implemented corporate governance system, high CSR standards, rational capital budgeting politics and high financial results accountability. Distilled factors were incorporated in the authors’ developed structural model of shareholder value.
Practical implications (if applicable). Value drivers’ awareness allows reduction of risks associated with the value creation process and, as a consequence, maximizing return on the invested capital. Considering the factors affecting shareholder wealth it is possible to increase investment attractiveness of a company for existing and potential strategic and retail investors. Besides, the proposed factor model is the result of the initial stage of the current research. The distilled factors are planned to be used as variables in a regression model for predicting shareholders’ return.
168
Value/originality. The current research expands the horizon of understanding the concept of shareholder value in a sustainable perspective. While the traditional view of shareholder value usually contradicts with the ideas of stakeholder theory proponents, the proposed model combines the elements of both theories and the elements of the sustainable development concept.
Keywords: shareholder value maximization, value drivers, content analysis. JEL Classification: G11, G3, M14. Paper type: Research paper.
THE ROLE OF INTERNATIONAL MOBILITY IN STUDENTS’ CORE
COMPETENCES DEVELOPMENT
Tadas Vaicekauskas, Kęstutis Duoba, Vilmantė Kumpikaitė Kaunas University of Technology, Lithuania
Purpose. The paper examines the role of international mobility through the exchange
programs in student’s core competences development. Methodology. The theoretical background of the research is based on academic literature in
the field of youth mobility and youth competences development analysis. The research was carried out regarding European framework on key competences for lifelong learning (2006). After careful study, questionnaire of the research was developed, covering peculiarities of the key competences. Questionnaire was based on multiple approaches. It focused on student’s attitude towards importance of the competence in question as well as their personal evaluation of competence development through participation in mobility programs. 667 students participated in the survey European-wide. Data of the survey was analysed by SPSS 17 statistical analysis program. Methods, such as factor analysis, regression analysis, multidimensional scaling were used in order to evaluate results from different perspectives.
Results. The research revealed that international mobility programs play important role in all core competences development. However, significant difference was measured between importance and level of development of each competence separately. Communication skills, both in mother tongue and foreign languages were emphasised as the most important. Social and civic competences can be named second competence by importance and level of development trough international mobility. It leads to a conclusion, that students value ability to communicate constructively, show tolerance, express and understand different attitudes, negotiate, deal with stress and anxiety, think critically and creatively as well as participation in social activities. It emphasises the importance of international mobility programs, since these skills and abilities were among the most developed during respondents’ mobility experience.
Significant differences were determined analysing survey result by regions. Southern European students prefer competences of learning to learn versus social and civic competences, while evaluation of students from other European regions were opposite. Furthermore, while students from all Europe agree that the most developed competence during international mobility is initiative and entrepreneurship, there are disagreements concerning the second place. Youth from North and East regions consider social and civic competences to be developed more than learning to learn, while students from South and West regions think vice versa.
Practical implications. Results of the research might draw attention of horizontal student mobility programs developers and institutions implementing it in order to improve efficiency of their affairs. Furthermore, it may be used as a supporting argument evaluating usefulness of funded youth mobility programs. Moreover, a tool for choosing the measures for developing students’ competences demanded by constantly changing needs of the labour market could be created based on research results.
169
Value/originality. This research presents a multidimensional approach to students’ core competences and their development benefits emerging due to implementation of international mobility programs. Moreover, the paper brings forward valuation of students’, who have been exposed to the subject in question, experiences in combination with theoretical background.
Keywords: Students, competences, mobility, international. JEL Cassification: J69. Paper type: Research paper.
CUSTOMER KNOWLEDGE INTEGRATION WITHIN OPEN INNOVATION
CONTEXT: TOWARDS MORE STRUCTURED APPROACH
Aistė Vaišnorė, Monika Petraitė Kaunas University of Technology, Lithuania
Purpose. Customer role in firms knowledge creation has been increasingly analysed in the
literature and highlighted as one of the most important resources for firms’ innovation process (Prahalad and Ramaswamy, 2000; Kausch, Enkel, and Gassmann, 2004; Gassmann and Wecht., 2005). Despite the fact, that customer knowledge has been always regarded as an important input within new product development literature (NPD), the open innovation concept changes the complexity, intensity and volumes of customer interactions (see Vaisnore, Petraite, 2012) within open innovation process, and especially focuses on the customer knowledge management practices as an integral part of open innovation process. Open innovation paradigm and the importance of customer knowledge within various innovation development stages (Vaisnore and Petraite, 2012) requires a new systematic approach towards customer knowledge management and integration in open innovation contexts. From the conceptual point of view, entire task requests to link open innovation management and knowledge management bases at the conceptual and also empirical levels. Based on this problem formulation, the paper aims to propose a structured framework for customer knowledge integration in open innovation processes at the conceptual level. The specific challenge addressed from the theoretical point of view is the adjustment of customer knowledge and firm knowledge biases via theoretically and empirically proven knowledge management mechanisms for productive innovation management practices.
Methodology. Conceptual paper, based on the literature review and synthesis, the framework development is based on the analysis of customer knowledge typologies and related knowledge management features and search for their conceptual link with the open innovation management processes.
Results. The paper provides structured approach for customer knowledge integration and management within open innovation contexts at the conceptual level. The framework is based on customer knowledge typologies and open innovation management processes. The framework development is based on the open innovation development processes and knowledge demand at each stage, the links between customer knowledge management processes and innovation management processes are provided, as well as indicative customer knowledge integration principles suggested, as a result of literature analysis.
Practical implications. The results of the paper provide a framework for the development of analytical tools for customer knowledge management and integration processes within the contexts of an organisation. The proposed customer knowledge management and integration framework provides theoretical background for designing customer driven open innovation management platform within the firm.
170
Value/originality. The paper contributes to the specific field of theory development in the field of open innovation, with the specific focus on customer knowledge management and integration. Specifically it focuses on the conceptual challenges of linking knowledge management and innovation management fields, which stem form methodologically different perspectives and backgrounds, though need to be linked at the management practice level, but also because of the need for further theory advancement in the field of customer driven open innovation studies.
Keywords: customer knowledge management, knowledge integration, open innovation, conceptual framework.
JEL Classification: O32, L21, M19. Paper type: Theoretical paper.
LEAN MANUFACTURING IMPLEMENTATION
AND PROGRESS MEASUREMENT
Milita Vienažindienė, Ramunė Čiarnienė Kaunas University of Technology, Lithuania
Applying lean manufacturing philosophy is one of the most important concepts that help
enterprises to gain competitive advantage in the world market. Lean manufacturing or lean production is a production practice, which regards the use of resources for any work other than the creation of value for the end customer, as waste.
The concept of producing products in a ‘lean’ manner was first introduced by a research group at MIT after studying the Japanese style of manufacturing, mainly Toyota Production Systems (TPS), in the 1980s. With the unique culture of continuous improvement, Toyota put together numerous tools and methodologies to eliminate wastes and enhance leanness of manufacturing systems.
The term ‘leanness’ is used to describe the process of realizing lean principles and a relative measure whether a company is lean or not. Most of the existing lean tools (e.g. Kanban system, quick changeover, etc.) focus on ‘how to become leaner’. Various lean assessment surveys, lean assessment tools, and lean metrics have been proposed to guide users through the lean implementation.
Purpose. The main purpose of the paper is to identify Lean implementation progress measurement and the main barriers to lean manufacturing implementation.
Methodology. Paper’s research methodology is based on scientific literature analysis. Results. Implementation of Lean philosophy and principles can be described as a set of
actions and processes starting from planning the change, defining the success factors and finishing by implementation and measuring the progress.
For each of the improvement dimensions, several groups of indicators with a set of metrics can show and measure the company’s progress:
1. Elimination of waste. 2. Continuous improvement. 3. Continuous flow and Pull-driven systems. 4. Multifunctional teams. 5. Information systems. Although a lot of companies started implementing lean concept, only 10 percent or less of the
companies succeed in implementing lean manufacturing practices. Even though number of lean tools, techniques and technologies available to improve operational performance is growing rapidly, however a few companies that put effort to use them failed to produce significant results.
The main barriers, as seen by surveyd companies, which prevent or delay a Lean Manufacturing implementation, are: backsliding to old ways of work, lack of implementation know-
171
how, middle management resistance, employee resistance, lean is viewed as "flavor of the month", not easy to implement, and lack of time.
Value/originality. Authors of this paper present the original model of Lean implementation process which includes success factors, barriers and progress measurement metrics.
Practical implications. The presented model can be implied for future empirical researches. Keywords: Lean manufacturing, Lean implementation, progress measurement, barriers. JEL Classification: M11, L23, M54. Paper type: Theoretical paper.
QUALITY MANAGEMENT SYSTEM IN TRANSITION: THE CASE OF INSTITUTIONALLY DERIVED TENSIONS IN LITHUANIAN HIGHER
EDUCATION INSTITUTION
Mantas Vilkas, Eglė Katiliūtė Kaunas University of Technology, Lithuania
The transition from one template or organizing to another is common theme in neo-institutional
line of research (Greenwood et al., 2011). It is argued that present templates of organizing are institutionally derived and a transition to another template is problematic because of normative embeddedness of an organization within institutional context (Greenwood and Hinings, 1996).
In this article institutional theory is used to interpret a case of transition of present quality management system (present QMS) to proposed quality management system (proposed QMS) in a university. The present QMS is embedded in present and historical context in which university has been developing. It is characterized by high degree of autonomy of teachers, lower levels of centralization, lower emphasis on student-oriented learning, diverse practices of quality assurance which are not based on certain quality model. A proposed QMS is based on contemporary quality management practice in higher education organizations: European standards and guidelines for quality assurance. It is characterized by higher degree of student oriented learning, strong emphasis on equal rights, transparency.
From the point on institutional theory the following picture emerges. University has a present QMS strongly embedded in present inter-organizational and intra-organizational institutional context. The proposed QMS is based on worldwide tendencies of student-oriented learning, equal rights, decisions based on facts, process approach. During a transition tensions emerge. These tensions emerge because of particular degree of incompatibility of present QMS and proposed QMS. The solution of these tensions will shape the future QMS: the one which will be based on institutionalized practices and proposed practices.
Purpose of the paper – to reveal tensions that emerge because of incompatibility of a present and proposed QMS in a university during transition from present to proposed QMS.
Methodology. Phenomenological approach is applied to interpret the artefacts of discussion-training sessions in order to reveal the themes that were on the most importance during transformation from present QMS to proposed QMS. These tensions emerged during discussion-training sessions devoted to the transition. In these sessions a constant members (40 university members, mostly top management) were participating. These collectively developed artefacts constitute: Descriptions of quality concept; flowcharts of “Preparation of new study programs”, “Improvement of study program” and “Review of study program” processes; “Rating conference” regarding present quality management practices; results of focus group on quality culture and quality improvement; results of focus group on students feedback system. The authors of this article participated in all these sessions.
172
Results. The tensions resulted because of incompatibility of present and proposed QMS are captured by these themes: fuzziness of quality concept; mistrust on benefits of external orientation; awareness of loosing individual autonomy; “face saving” defensive routines; awareness on increasing bureaucratization; These themes are explored and grounded in terms on inter and intra organizational context.
Practical implications and Value/originality. This paper helps to understand better institutionally derived tensions that emerge during implementation of contemporary quality management practices in Lithuanian higher education organizations. The tensions would be similar in most state higher education institutions, because they have been developing in the same institutional field.
Keywords: institutionalism, quality management systems, higher education institutions. JEL Classification: M10, M14. Paper type: Research paper.
ENSURING SUSTAINABLE DEVELOPMENT FOR CONTEMPORARY
ORGANIZATIONS DEVELOPMENT
Kristina Zdanytė, Bronius Neverauskas Kaunas University of Technology, Lithuania
The environment in which organizations operate today is rapidly becoming more complex
than ever before. Major shifts in technology and in the business and economic environment present many opportunities, but also many challenges to organizations striving to manage and thrive in the midst of great change. Understanding significance of sustainable development and its methodology can be used as important and contemporary instrument for progressive changes in organizations management.
Mostly there are described three main levels of sustainable development in the scientific papers: environmental, economic and social. Many researchers reveal the importance stop short at mentioning these three components of sustainable development. On another hand among often researcher’s cited problems key problem can be distinguished: how to reconcile the multiply concept of sustainable development groups and use them as instrument to ensure the coherence of sustainable development overall.
Analyses of organizations sustainable development challenges unclosed necessity of the studies in this field covering sufficient intense, researchers’ mainly focused on the problem of financial and economic aspects. Much more, these studies are necessary and must be developed. Although sustainable development – as a complex category, must reflect aggregate organization's activities in full as possible. Many issues remained unresolved: there is no consensus on the following categories, as an “organization sustainability, "sustainable functioning", is not enough analyzed the conditions and models that allow for organizations to predict sustainable functioning and, even more – progress in sustainable development.
Organization's sustainable development - a constant process of change, the use of resources, targeting investment, scientific-technical development, innovation, staff development and institutional change to harmonize with each other and redirect the current organization of the future potential for an increase in the satisfaction and achievement of strategic goals. Economic stability is one of the most important tasks becomes effective management of sustainable development and its integration into the existing organization management system.
Increasing worldwide competition in across business areas, sustainability management and it control drives on new meaning, and its importance is steadily increasing. Today, it is necessary to develop an integrated approach to sustainable development in the management and implementation
173
by focusing strength in the organization strategic plan goals that relate to the organization's achievement of sustainability.
Purpose of this paper: is to consider and summarize the methods and principles for achieving sustainable development in the organization and foresee opportunities for advanced sustainable development.
Research methods: logical, systemic analysis of scientific studies, situational analysis based on the comparative method.
Value/originality. Advanced approach the distinguish system of methods and principles leads for achieving sustainable development progress in contemporary organization management.
Results. The present analysis of sustainable development implementation methods and tools has shown that certification and culture of sustainable development could help implementing sustainable development ideology in the organization. The paper contributes to a better understanding in the context of economic globalization one of the most important tasks is effective sustainable development management and its integration into the existing organization management system on the basis of system theory approach.
Keywords: sustainable development, sustainability assessment, contemporary organization, organization management.
JEL Classification: L16, P41. Paper type: Theoretical paper.
MANAGING DIFFERENT GENERATIONS IN THE WORKPLACE
Jurgita Zemblytė Kaunas University of Technology, Lithuania
Purpose. Work force diversity management is the most challenging for the managers. Three
generations - the Baby Boomers, Gen X and Gen Y - now working side-by-side bring unique viewpoints, different values, different ideas, different ways of getting things done and different ways of communicating in the workplace. The main purpose of this paper is to identify differences and similarities among different generations of employees in order to develop management style that can increase productivity and excellence at work.
Methodology. A theoretical framework is based on human resource management, diversity management scientific literature. The study is based on one company case study (n=59), data was collected using a self-administered questionnaire. The data analysis follows a quantitative methodology.
Results. The examination of the differences and similarities among generations in the workplace, found that Baby Boomers is described as a workaholic, having a strong work ethic, competitiveness and tend to work overtime. Gen X exclusively values the freedom and seeks perfection. Meanwhile, Gen Y gives priority on their family than work. The research identified that different generations make decisions together and cooperate more often than they conflict.
Practical implications (if applicable). The findings provide insights into typical characteristics of each generation and main
problems of a generationally diverse workplace. This helps managers to rethink their management styles, specific employees training, as well as human resource policy.
Value/originality. The paper provides understanding of the differences that can divide generations and explores
the benefits. Furthermore, it is important as a tool to analyse unique viewpoints of different generations in the workplace, strong and weak aspects of three generations working together.
Keywords: Generations, Management, Employees Attitude. JEL Classification: J24. Paper type: Research paper.
ECONOMICS and MANAGEMENT – 2013
ISSN 2335–8025
SL 344. 2013-04-15. 21,75 leidyb. apsk. l.
Kaina sutartinė. Užsakymas 291.
Leidykla „Technologija“, Studentų g. 54, 51424 Kaunas
Pagamino leidyklos „Technologija“ spaustuvė, Studentų g. 54, 51424 Kaunas
