Source: Babic, V. and Zaric, S.

(2012) "Management & Trust During the Global Economic Crisis: The Case of Serbia", Holistic Marketing Management Journal, Vol 2 Issue 2(July) p. 7-19, Bucharest, Romanian-American University Press ISSN 2247-1189

MANAGEMENT AND TRUST DURING THE GLOBAL ECONOMIC CRISIS: THE CASE OF SERBIA

Vojislav Babic, PhD1 and Sinisa Zaric, PhD2

Abstract The paper analyzes the trust influence on management and business indicators of Belgrade entrepreneurs during the global economic crisis. The first chapter points out that entrepreneurs are exposed to significant non-market risks in countries with underdeveloped institutional infrastructure. Due to that fact, creation of business strategies is more difficult. Under the conditions of economic crisis, large number of decisions are made by the institutions that influence on the behavior of entrepreneurs, in order to seek answers for the crisis disturbances. In such conditions, solid stocks of social capital are of great importance for the stability of the economy and individual agents.In chapter 2 it was defined the term, structure and functions of social capital. Besides, it was considered the influence of social capital on the micro-economic sector. In chapter 3, it was measured institutional, financial and stakeholders trust of entrepreneurs and its impact on the investment trend, the volume of business and real salaries of micro and small enterprises. Based on empirical data, it was shown that low trust stocks have the negative influence on business indicators and development of firms. Key words: Economic crisis, Serbian entrepreneurs, social capital, trust, business parameters JEL Classification: G01, O43, L26, D22, A13

1. Introduction

Economic agents are performing within the business environment. David Baron (Baron, 2010) makes a distinction between the market and the non-market environment. Operating within the non-market environment, the entrepreneurs are facing the problem of formulating so-called non-market strategies. It is of significant interest to get knowing how favorable the non-market environment is for business. In the same time, having in mind the character and the structure of the non-market environment, the economic agents have to be prepared for answering to the impulses coming from the government nonmarket environment. Many of the elements of the non-market environment (the network of institutions) are, in the same time, the factors of creating social capital. The social capital, definitely recognized as one of the kinds of capital - besides physical and the human one is not only having a positive impact on entrepreneurial activities, but is a capital in which one could invest. The role of entrepreneurship in creating inclusive forms of social capital , considering it as a production factor (Svensend, G.L.H. and Svensend, G.T., 2005). An entrepreneur is in a situation in which the stocks of social character and the character of relations within this specific glue of society (The World Bank 1998) influence his/her economic behaviour. An entrepreneur can participate in the government arena by building coalitions, lobbying and trying to limit the dangers that come from those institutions which significantly influence his/her non-market behaviour. In the time of global economic crisis, an entrepreneur faces dramatic or less dramatic changes in the
1 2

University of Belgrade, Faculty of Economics; ISR Belgrade University of Belgrade, Faculty of Economics

field of market environment. Experiences of countries such as the peripheral European countries (Serbia), demonstrates that entrepreneurs have difficulties in anticipating the changes coming from the range of non-market environment. Generally speaking, in countries with insufficiently developed institutional infrastructure entrepreneurs are exposed to great non-market risks, in other words, they have difficulties in successfully creating their non-market strategies. Good networking (Kim,P., and Aldrich,H., 2005), solid stocks of social capital, as well as trust in other agents and institutions, will prove to be the factors of highest significance for the stability of economy and individual agents. The crisis incites making a greater number of decisions by institutions which influence on the entrepreneurs behaviour, with the objective to seek answers to crisis disturbances. In a situation with low trust in this segment of non-market environment actors, the low level of social capital disables adequate adjustment of actions in the entrepreneurial structure to the newly developed circumstances.

2. Social Capital Theory Approach

A starting framework of this study relies on a social capital theory. The social capital represents an investment into social relations with an expected refund on a market. Wealthy social environment, which allows frequent acquaintances and business contracts, presents a suitable ground for exchange of social norms, trust and reciprocity. The social capital includes information which are available to alters (members of entrepreneur networks), ideas, instructions, business possibilities, easier approach to financial capital, emotional and moral support, trust, cooperation, power and influence (Zaric and Babic 2010). The information collected through entrepreneurs networks, are more qualitative because they are: 1. cheaper, 2. more detailed and accurate, 3. the alters, with which they keep up constant contacts, have economic motivation to be reliable and 4. permanent economic relations become coated by social content added to trust expectation and opportunism absence. Increasing the number of business contacts based on trust, it makes an influence on decreasing transactional costs as well as the increase of physical capital decreases production costs. The way human, physical and financial capital are productive, the same goes for the social capital, too. Therefore, the social capital can be considered as the input in a production process. By its use, business can be done, profit can be realized on market, and new values can be created. Also, mission can be fulfilled, goals achieved and the contribution can be given to the world. According to The World Bank The social capital of a society includes the institutions, the relationships, the attitudes and values that govern interactions among people and contribute to economic and social development. Social capital, however, is not simply the sum of the institutions which underpin society, it is also the glue that holds them together (The World Bank 1998:1). After The World Bank initiative an upswing of quotations was registered in economic literature, including terms social capital and social network (Isham et al. 2002). According to Putnam, the social capital refers to relations among an individual, a social network, reciprocity norms and trust resulted from them (Putnam 2000). Under the term of social capital, Schiff implicates a sum of social structural elements which affect interhuman relationships and represent an input for production or functional utility

(Schiff 2002). Portes sees the social capital as the actors` ability to insure benefits through members in social networks (Portes 1998). To Pennars definition, the social capital consists of networks of social relationships that influence individual behavior and thus cause economic growth (Pennar 1998). The name social in the term social capital, points to the fact that resources are neither personal property nor they are possessed by any single person. They can be only used within interrelation network. Entrepreneurs network is a personal and business network that an entrepreneur builds in order to realize his entrepreneurial ventures. Within business management, networks are treated as a variable of a social capital that enterprises exploit to overcome limitations related to their size and possible institutional barriers, providing access to other resources that can improve business (Curran et al. 1995). In addition to business networks, trust presents a significant input variable of the social capital. Numerous authors give it the importance of weighted variables and quite a number of them identify it with the social capital. A trust idea refers to correct expectations about the actions of other people that have a bearing on ones own choice of action when that action must be chosen before one can monitor the actions of those others (Dasqupta 1998). The trust can be also explained as a firm belief in the reliability of an individual, company or institutions, i.e. the reliability and the veracity of their claims and statements without being checked before. Trust can have an effect on developing entrepreneurship course, on forming different sorts of enterprises as well as on entrepreneurs behavior. In connection with it, low stocks of trust increase transactional costs, limit market entry as well as firm growth and competition. It is possible to speak about the positive impact of social capital at the microeconomic, macro-economic and financial sector. Due to the nature of work, the emphasis will be on analyzing the impact of social capital at the micro-economic sector. The influence of social capital at the micro-economic development can be seen at the level of families, companies and communities. At the family level, social capital is used especially among the poor, to ensure the disease environment, harsh climate and government restrictions. In such cases social capital encourages the pooling of resources such as food, loans, etc.. In addition, good informal relationships enable the poor to start small business and increase revenue. The influence of social capital on firm level is manifested through the dense business networks that encourage economic cooperation and build trust between economic agents. Social capital positively affects the productivity of firms to exchange valuable information about products and markets and reduces the cost of contracting, regulation and enforced collection. Repeating business transactions and business reputation promote sides of acting in order to achieve mutual benefits. Social capital, created among firms, significantly reduces business risks. It allows the exchange of valuable information about products and markets and reduces the cost of contracting, regulation and enforced collection. As we know from Coase theory of the firm, one of transaction costs incurred in terms of market mechanism are the costs of incomplete contracts (Coase 1937). Signing a contract entails a dose of uncertainties, regarding the future state in which the laws and clauses will be applied. For example, the contract may specify the delivery of certain quantities of inputs at a specified price at some future date, and that no party knows with certainty if the market prices of inputs and outputs will be produced on that day. A possible solution would be to include in the contract each possible pair of market prices of outputs and inputs. This kind of contract is called a complete understanding or agreement. However, in practice contracts are rarely

complete for several reasons. The first reason is the high cost and time used for compiling a list of all possible pairs of unpredictable cases. Another reason may pose some unforeseen events that took place, and could not be verified by a third-hand court. In these situations, developed commercial network, with significant stocks of social capital, eliminate or significantly reduce the risk factors. Social capital also facilitates the implementation of collective projects, because it reduces the risk of free riding and stronger interpersonal trust. According to Martin Raiser, firms belonging to networks increasingly avoid free riding, in order not to lose a reputation of reliability (Raiser 1999). Social capital encourages and facilitates the pooling of resources and access to alternative credit activities to those residents who were denied access to formal financial institutions. Several projects, based on increasing the stock of social capital, were conducted in Tanzania, Rwanda, Cambodia, Bolivia and Nicaragua under the auspices of the World Bank (The Initiative for Social Capital 2000). Consequently, in the field of Management, social capital leads to greater efficiency compared to traditional organizational models. Thus, in firms with Taylorian organizational form (Taylor 1929.), information is delayed or distorted while being transferred through a strict hierarchical chain of command. Taylorian form is increasingly replaced by a flexible management structure in which responsibility is transferred to each of the sectors in the company. In that way, workers are forced to make decisions independently, because they are not constantly obliged to consult their superiors in the hierarchical chain. Such organization of the company increases efficiency but on the other hand, it depends on the stock of social capital workforce. In such situations, lack of trust between social workers and managers can lead to opportunism and paralyze production. The Norwegian-Italian study from 2006. examined the influence of human and social capital on productivity (Greeve et al 2006). The survey was conducted in three organizations involved in research and development (R&D) and provided consulting services. Analysis included the Italian company "GESTO", which provide business consulting services and two Norwegian companies "ALPHA" and "BETA" for applied research and consulting in the fields of economics and social sciences. ALPHA is more concerned with applied research and consulting than BETA, where more emphasis is made on applied research work. GESTO and ALPHA are profitable organizations while BETA is non-profit. The BETA rewarding of employees is in relation to academic satisfaction and participation in projects. Within the database for the companies ALPHA and BETA were analyzed: employee participation in projects, salaries, working hours on projects and the number of permanent employees. The database for BETA contained even information about published works. The dependent variable for measuring productivity in the firm GESTO was measured by average number of days required to complete the project (which was 19 days per project) and the average number of completed projects within one year (14). The average employee in the ALPHA completed 20 projects for one year. In the ALPHA is measured the productivity of each individual through the payment per hour for participating in the project expressed in NOK.3 Since BETA is a nonprofit organization, the variable of productivity is measured by the weighted publishing index which has the following composition: articles published in international academic journals (4), articles in the Norwegian and Nordic academic journals (3), the number of international chapters in academic books (3), research reports (2) and BETA working papers (1)
3

Norwegian Krone

(Greve et al 2006). In the study, the independent variables were selected this way: 1. human capital, 2. tenure to measure effects of experience and 3. social capital. In the firm GESTO, data on the social capital were obtained via an online questionnaire which was tested over 52 employees. The questionnaire covered the following topics: general staff contacts at the time of starting the project, getting advice while working on the project, providing advice during the work on the project, contacted with alters in the past two months, contacted alters at the time of commencement of the project, general advisory relationship and social relationship. In the case of companies ALPHA and BETA employees were asked two questions: From whom did you get advice at the time of starting the project? and Who advised you during the project work and research questions?. The study examined several hypotheses, but the most important for our analysis is the next one: H*: The Social capital has a direct impact on productivity. People with more social capital will be more productive than those having less of it. (Greve et al. 2006). After the regression analysis, it is demonstrated the positive impact of social capital on productivity. in all three cases. Common to all three organizations is that social capital has a major contribution to productivity in comparison with other observed variables. Additional reasons should be looked for in nature of work these three organizations go in for. All three organizations run most of the projects, unless they are ordered from other companies and institutions. Working teams in these organizations are small and the imperative is the ability to get advice from others in order to create greater productivity. Social capital, in the form of opportunities to establish direct business contacts, affects more access to information, discovers new opportunities, learning from the mistakes that other people have previously made and enables more efficient troubleshooting and fulfilling tasks. 3. Measuring Belgrade Entrepreneurs Trust and Its Influence On Business During The Global Economic Crisis

In this chapter it is presented part of the survey we carried out in 2011. about institutional, financial and stakeholders trust of Belgrade micro and small entrepreneurs before and during the Global economic crisis. Beside, we also examined the influence of previous variables on business parameters such as: investment trend, business extent and entrepreneur real earnings. As a methodological instrument it is used a questionaire4. In the survey it is started from the following hypotheses:
H1 : Institutional trust of Belgrade entrepreneurs is on a low level H2: Index of financial trust and investment trend for next 6 months are in a positive correlation H3: Index of financial trust and business extent of enterprises are in a positive correlation H4: Index of financial trust and real salary of entrepreneurs are in a positive correlation

The sample included owners and managers of 65 small and micro private enterprises (from 1 to 100 employees) in the seven municipalities of Belgrade

As for institutional trust, it is measured in 19 institutions conected in a direct or indirect way with functioning of economic and financial spheres. For measuring it is used 4-level Likert scale which is defined the following way: 1. do not trust at all, 2. do not have enough trust, 3. have trust and 4. trust completely. The hypothesis H1 will be rejected if a majority of respondents have trust in more than 50% of institutions offered. Trust existence in each of the institutions implies that share of the answers which express institutional trust (sum of responses: have trust and trust completelyexpressed in percents) exceeds the share of answers which express institutional mistrust (sum of responses:do not trust at all and do not have enough trust expressed in percents). To the question: Will you please quote how high is your trust degree in each of the following institutions, to the least degree respondents believe in political parties(3,1%), Agency for privatization (6,1%), Republic parliament (7,7%) and Serbian government (10,8%):

Do not trust at all % Commercial Banks Large Companies Central Bank (NBS) Municipal Administration Public Utility Companies Serbian Government Republic Parliament Belgrade Stock Exchange Ministry of Treasury Ministry of Economy Privatization Agency Statistical Office Serbia Political Parties of 23,1 38,5 23,1 29,2 23,1 49,2 52,3 26,2 41,5 46,9 56,9 33,8 75,4 36,9 35,4 21,5 35,4 36,9 32,3

Do not have enough trust% 41,5 43,1 36,9 40 43,1 40 40 56,9 41,5 36,9 36,9 32,3 21,5 44,6 44,6 26,2 47,7 49,2 40

Have trust % 33,8 18,5 40 30,8 33,8 10,8 7,7 16,9 16,9 16,9 4,6 33,8 3,1 18,5 20 49,2 16,9 13,8 27,7

Trust completely % 1,5 0 0 0 0 0 0 0 0 0 1,5 0 0 0 0 3,1 0 0 0

Serbian Chamber of Economy Belgrade Chamber of Economy Agency for Business Registers Agency for MSE Investment Funds Voluntary Pension Funds

Table 1 Institutional trust of Belgrade entrepreneurs during the global economic crisis

Practically 75.4% of respondents do not trust political parties at all, 56.9% do not trust Agency for privatization and 52.3% of them mistrust the Republic Parliament. Speaking about institutions directly connected with economic and financial spheres, some better results are achieved in the case of the Agency for business registers, Central bank and

commercial banks (due to the reforms in Serbian banking sector, and because of measures for increasing work efficency in the Agency for business registers in the period 2008-2010). Finally it could be concluded that majority of respondents do not trust 18 out of 19 institutions. So it can be stated that hyphotesis H1 is confirmed. In order to test differences within trust level in the same institutions the period before the recession in Serbia, we put the following question: Related to the period before the recession in Serbia (4th quarter of 2008.) is your present trust with these institutions much lower, lower, without change, greater or much greater, they answered following way (Table 2)
Much lower % Commercial Banks Large Companies Central Bank (NBS) Municipal Administration Public Utility Companies Serbian Government Republic Parliament Belgrade Stock Exchange Ministry of Treasury Ministry of Economy Privatization Agency Statistical Office of Serbia Political Parties Serbian Chamber of Economy Belgrade Chamber of Economy Agency for Business Registers Agency for MSE Investment Funds Voluntary Pension Funds 20 27,7 20 18,5 16,9 26,2 26,2 18,5 24,6 21,5 26,2 13,8 30,8 15,4 15,4 Lower % 27,7 24,6 26,2 23,1 30,8 24,6 26,2 24,6 27,7 27,7 26,2 23,1 21,5 26,2 24,6 Without change % 50,8 46,2 52,3 56,9 52,3 49,2 47,7 55,4 47,7 50,8 47,7 63,1 47,7 58,5 58,5 Greater % 1,5 1,5 1,5 1,5 0 0 0 1,5 0 0 0 0 0 0 1,5 Much Greater % 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

12,3

21,5

63,1

1,5

1,5

16,9 20 21,5

29,2 30,8 21,5

53,8 49,2 56,9

0 0 0

0 0 0

Table 2. Institutional trust of Belgrade entrepreneurs now vs. before the recession

According to the analogy with replies from table 1, a great percent of answers in the column without change testifies low institutional trust in the period before the recession, too. On the other hand, a trend of further trust decreasing is evident in institutions such as: Republic Parliament and Agency for privatization (with 52% of respondents), Ministry of Finance, large companies and political parties (with 52.3% of respondents), investment funds (with 50,8% of respondents) and Ministry of Economy (with 49.2% of respondents), etc. The next part of survey was related to enterprise

business parameters. To the question: Are you planning to reduce, leave unchanged or increase your investments in business in the next 6 months, the respondents answered the following way (Table 3.)

Investment trend for next 6 months Reduce Status quo Increase Total

Frequency 12 47 6 65 Table 3. Investment trends for next 6 months

Valid Percent 18.5 72.3 9.2 100.0

The majority of them (72.3%) will keep an investment status quo, 18.5% of respondents will reduce investments while 9.2% will increase theit investment in the 6 months. To the question: Related to the period before the recession in Serbia is business extent of your firm significantly less, slightly less, without change, slightly increased or significantly increased, most of respondents faces the recession consequences (Table 4.)
Extent of Business Significantly decreased Slightly decreased Without change Slightly increased Percent

52,3 38,5 7,7 1,5 Table 4. Business extent of enterprises related to period before recession

In order to examine etrepreneurs` real earnings we put the following question: Related to the period before the recession in Serbia (4th quarter of 2008.) is your real salary now significantly decreased, slightly decreased, without change, slightly increased or significantly increased, 61.5% of respondents state that earning was significantly decreased, 30.8% state that it was slightly decreased, 4.6% of them state that salary was without change, while 3.1% state the earning was increased (Table 5.)
Real salary now vs. Before the crisis Significantly decreased Slightly decreased Without change Slightly increased Frequency Percent 61.5 30.8 4.6 3.1

40 20 3 2 Table 5. Real salary of entrepreneurs now vs. Before crisis

To examine a relation between business variables and financial trust of entrepreneurs, we have created an index of financial trust (Ift). It is synthetical index whose components unclude trust measures in four financial institutions having the greatest significance for running business: trust in banks, trust in Central bank, trust in Ministry of Finance and trust in investment funds. The final model was set up as follows:

Ift = Pb + Pcb + Pmf + Pi

Pb - Trust in banks Pcb - Trust in Central bank Pmf - Trust in Ministry of Finance Pi - Trust in Investment Funds

(equation 1)

The trust in institutions were weighted with: 5 : 3 : 2 : 1 respectively. To test hyphohesis H2 a correlation analysis was done between the Index of financial trust and entrepreneurs investment trend (Table 6)

Correlations Index of Financial Trust Investment trend for the next 6 months

Index of Financial Trust

Pearson Correlation Sig. (2-tailed) N

.298* .016

65 .298* .016 65

65 1

Investment trend for the next 6 months

Pearson Correlation Sig. (2-tailed) N

65

*. Correlation is significant at the 0.05 level (2-tailed). Table 6. Correlation between the Index of financial trust and Entrepreneurs` investment trend

As it is seen on the table 6, a significant linear correlation was found, showing a direct linear relation between the index and entrepreneurs investment trend. To test hypothesis H3, a correlation analysis was done between the Index of financial trust and business extent. As a result, it was achieved a more significant Pearson coefficient value (Table 7.)

Correlations
Index of Financial Trust Business extent of enterprise

Index of Financial Trust

Pearson Correlation Sig. (2-tailed) N

.393

**

.001 65 .393
**

65 1

Business extent of enterprise

Pearson Correlation Sig. (2-tailed) N

.001 65 65

**. Correlation is significant at the 0.01 level (2-tailed).

Table 7. Correlation between the Index of Financial Trust and business extent of enterprise

To test hypothesis H4 it was done a correlation analysis between the Index of financial trust and the variable: real salaries now vs. before the crisis (Table 8.)

Real salaries now Index of financial trust Index of financial trust Pearson Correlation Sig. (2-tailed) N Real salaries now vs. before the crisis Pearson Correlation Sig. (2-tailed) N *. Correlation is significant at the 0.05 level (2-tailed). 65 .298* .016 65 65 1 vs. before the crisis .298* .016 65 1

Table 8. Correlation between the Index of financial trust and changes in real salaries

Also, it was received a significant Pearson coefficient value (.298*) which indicates the existence of a direct linear relationship between these two variables. In the survey was also examined entrepreneurs trust in the following stakeholders: suppliers, competitive firms, foreign investors, consumers and employees of the firms. Generally, the majority of respondents (81.6%) has trust in suppliers, customers (70.7%) and employees in their firms (79.4%):

10

Trust Level No Trust at all %

Suppliers 1,5

Competitive Firms 18,5

Foreign Investors 32,3

Consumers 3,1

16,9 50,8 49,2 26,2 Not enough Trust % 55,4 29,2 18,5 56,9 Have Trust % 26,2 1,5 / 13,8 Have Complete Trust % Table 9a Trust in suppliers, competitive firms, foreign investors and consumers during the global economic crisis

Trust Level in employees No Trust at all %

Percent of entrepreneurs

1.7

Not enough 19.0 Trust % Have Trust 46.6 % Have 32.8 Complete Trust % Table 9b Trust in employees in respondents firms

To the question: Related to the period before the recession in Serbia (4th quarter of 2008.) is your present trust in the same people much less, less, without change, greater or much greater, most of the respondents have the same trust in stakeholders. However, concerning the period before the crisis a decreasing trend was registered with suppliers (16.9% of respondents), with competitive firms (24.7%), with foreign investors (27.7%), with consumers (21.5%) and the employed (10.3%). In the period of economic crisis, a good recipe for keeping business stability of small companies presents winning an preserving loyality of suppliers, employed people as well as consumers. For the analysis requests, an index of stakeholdersloyality has been created. Its components consists of 3 components such as: trust in consumers, trust in suppliers and trust in employees with weights 5 : 4 : 4 respectively Isl = Pc + Ps + Pe
(equation 2)

We have started from the following hyphothesis H5: The Index of StakeholdersLoyality makes an influence on a change of a dependante variable the change of real salaries with the reference to the period before the recession. Model of linear regression has been put the following way:

yi = 0 + 1xi + i

(equation 3)

11

yi = dependant variable (real salary) 0 = y intercept 1 = slope xi = predictor (index of stakeholders` loyalty) i = error in the observed value for the i cases

After the regression, the next results are received (Table10)

Model Summaryb Coefficient of determination Model R R
2

Standard Error of Adjusted R

2

the Estimate

.222a

.049

.032

.695

a. Predictors: (Constant), Index of Loyalty b. Dependent Variable: Real salary now vs. before the crisis
Table 10 excerpt from the regression analysis

As it can be seen, low values are received for the coefficient (R = 0.22) together with the coefficient (R2 = 0.049), so we can conclude that the hypothesis H5 was not confirmed. It means that entrepreneurs associate crisis cause with financial trust more than trust with stakeholders. Conclusion

The text puts emphasis on the measurement of trust and its impact on business operations of firms in Belgrade during the global economic crisis. Based on survey results, most entrepreneurs have no confidence in 18 out of 19 institutions that are directly or indirectly related to economic and financial sphere. This negatively affects the creation of business environment and business operations of firms. In relation to the period before the recession in Serbia, the trust of entrepreneurs mostly fell in the Parliament, the Privatization Agency, Ministry of Finance and the large companies. With the great majority of entrepreneurs there was a decrease in the volume of business and real wages related to pre-recession period, whereas 18.5% of respondents intended to reduce their investment in their own business. The study measured the correlation between the Index of financial trust and the three business variables in firms. In all three cases, a significant positive correlation was achieved. In the survey it is found that most respondents have trust in suppliers, customers and employees, and that there is no trust in the competitive companies and foreign investors. In relation to the period prior to 4th quarter of 2008. there has been a slight decline of trust in all of these stakeholders. In addition to it, the survey found that more respondents associated the cause of crisis with institutional trust declining rather than with a lack of trust in stakeholders. Bearing in 12

mind economic disparities in the state, it is rational to expect that in other parts of Serbia stock of measured trust would be lower, and the business environment and the firms parameters less qualitative.
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