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F 24,3/4

Strategic facilities management of Suntec Singapore International Convention and Exhibition Centre
A case study
Linda Tay
Faculty of the Built Environment, University of New South Wales, Sydney, Australia
Abstract
Purpose – This paper aims to highlight how facilities can enhance the strategic competitive position of a business organisation. Design/methodology/approach – The methods of investigation used in this study include observation, in-depth interviews and secondary data. Findings – This case study has shown that both hardware, i.e. facilities and software, i.e. business philosophy of the organisation are important to enhance its competitive position. Research limitations/implications – This study has looked at only one case. Future research may use the same five-force model to assess and determine the contribution of facilities to the competitive position of a business organisation. Practical implications – This study hopes to create more awareness among senior management of the strategic importance of facilities to a business’s bottom-line. Originality/value – Using a strategic management model, this paper illustrates the contribution of facilities management to the broader corporate goals. Keywords Competitive advantage, Modelling, Market orientation, Strategic management, Facilities Paper type Case study

120
Received September 2005 Revised October 2005 Accepted December 2005

Introduction The convention and meetings industry is today growing rapidly. While its absolute contribution to a country’s national gross domestic product (GDP) may be small, the spillover effect is significant for the tourism sectors such as wholesale and retail trade, hotel and air transport. A study conducted in Singapore showed that for every $1 contributed by this industry, another $12 is generated in the national GDP (International Enterprise Singapore Press Release, 2001). As a result, many destinations around the world have invested in the construction of convention centres (Oppermann, 1996). In particular, the Asia-Pacific region has seen rapid increase in industry activity since the late 1980s. In its latest projection, the Union of International Associations (UIA) predicts that only Asia will experience a positive 14.9 per cent growth in the next two years (UIA, 2005). The convention and meetings
Facilities Vol. 24 No. 3/4, 2006 pp. 120-131 q Emerald Group Publishing Limited 0263-2772 DOI 10.1108/02632770610649386

The author wishes to thank the management and staff of Suntec City Development Pte Ltd for their generosity in sharing their experience and Renee Leong, for providing valuable assistance in the data collection and compilation process for this case study.

According to the authors. widespread employee involvement in the quality improvement process. First. The case study begins with a literature review of the relationship between facilities and business performance. the strategic management of facilities. 1994). continuing performance improvement. Next. the case study aims to highlight how facilities can enhance the strategic competitive position of the convention centre business through a strategic management framework. 1996). There has been a vacuum in studies that links convention facilities with business performance. 2003). and the use of process design and control techniques to ensure conformance (Oakland. manufacturing. With its strategic geographical location. procedures and structures) for long-term. marketing. i. Second. Tranfield and Akhlaghi (1995) related facilities to business performance indicators through a strategic capabilities approach. business philosophy and the facilities of Suntec Singapore International Convention and Exhibition Centre. etc. this case evaluates the sustainability of technology as a competitive advantage. Weber and Ladkin. although there may be short-term improvements. One notable study was carried out by Alexander (1992) who applied the total quality management (TQM) concept and posited that quality managed facilities will help an organization achieve key objectives. only a handful of studies have been undertaken within the facilities management industry to examine the link between facilities management and business performance. human resource management. Porter’s five-force model. the case will describe the creation. The authors argued for the relevance of key integration Strategic facilities management 121 .e. McMorrow. i. Consequently. Finally. Studies have shown convention facilities to be an important factor for the success of a convention centre (Hazinski and Detlefsen. Alexander (1992) concluded his work with a quality plan for facilities management but noted that it will take time for benefits of many of these quality initiatives to emerge. the case evaluates whether technology can be a source of competitive advantage for Suntec Singapore and illustrates the role of facilities in enhancing the competitive position of the convention centre. Thus far. Asian Aerospace). Facilities and business performance The last three decades have seen the rise of many performance-enhancing theories for business organizations. 2003). Grant et al. this approach focuses on the design of routines (co-ordination through systems.industry is a significant contributor to the Singapore economy. the purpose of the case study is three-fold.e. Singapore was also identified as the top competitor for the Australian convention and meetings industry (Weber and Ladkin. 1996. Singapore has performed consistently well in attracting major conventions (e. Following this. 1989. Whereas these theories have been extensively researched and applied in industries such as hotel. it seeks to inform the state of facilities management practices within a convention centre in Singapore. studies on convention centres have consistently focused on the technical systems of convention facilities (Jalayerian. This paves the way for future comparative research on facilities management practices within convention centres. especially those in Asia since this is the fastest growing region for the convention and meetings industry. The TQM paradigm emphasizes the use of external-based quality goals. since technology has been a key focus in convention centre research.. the use of cross-functional teams.g. Finally the case study closes with some concluding remarks. 2005. Key concepts that underpin this case study such as competitive advantage and the five-force model will be introduced here.

power over suppliers. barriers to entry in the industry. Porter’s five-force model Source: Porter (1985) . the organization must first evaluate its position within the industry against five factors: power over buyers. 1986. it is clear that the five-force model complements the other strategic management concepts such as TQM and strategic capabilities in that it provides an assessment of the external environment in order that a competitive strategy may be developed through the firm’s internal Potential Entrants Supplier Industry Competitors Buyers Substitute Figure 1. standardization of inputs and cultural reinforcements for improving facilities management performance. O’Mara (1999) suggested that a thorough understanding of a firm’s competitive strategy is required before determining the best property and facility strategies. There are two basic sources of competitive advantage: superior skills and resources. (3) it must be imperfectly imitable. competitive advantage extends the concept by looking at internal capabilities that will produce a sustainable positional advantage. superior customer value and/or lowest delivered cost. (2) it must be rare among a firm’s current and potential competitors.3/4 122 indicators such as the degree of teamwork. From here. Barney (1991) lists four essential requirements for a resource/skill to be a source of sustainable competitive advantage: (1) it must be valuable. and the overall level of rivalry within the industry. the threat of substitute products. While there has been many performance-enhancing models developed over the years. and (4) there must not be any strategically equivalent substitutes for this resource/skill. there have been many attempts to empirically derive “generic” competitive strategies (Miller. i. This understanding begins with a clear diagnosis of the forces of competition within the industry. the five-force model has received strong support from within the property and facilities industry as a strategic management framework in understanding the role of facilities in business performance. In line with this perspective. Many of these conceptualizations have been influenced by the work of Porter who first published a book on Competitive Strategy (1980) followed by Competitive Advantage (1985). Just as strategic capabilities focuses on developing internal capabilities of the firm. Kim and Lim. Figure 1 diagrammatically portrays Porters’ five-force model.e.F 24. Porter asserted that in order to derive a competitive strategy. A closely related concept to strategic capabilities is the idea of competitive advantage. 1988).

capabilities. According to its CEO. Many attribute this to poor location as Suntec City was not near enough to prime office and shopping locations. Suntec City defined a niche for itself as Asia’s Vertical Silicon Valley by embracing technology and today has an occupancy rate of more than 95 per cent for its office and retail properties. to enable tenants to shop. At the same time. Similarly. a critical success factor for Suntec City is an open style of management that views criticisms as a source for improvements and swiftly responding to them.000 retail stores. business alliance and constructive connectivity. thereby encouraging networking among tenants. . In response. with intranet capabilities. management and administrative services. common telecommunications connection that enables tenants to communicate with each other at no cost. Suntec City was completed and today offers direct access to 5. Mr Wong Ah Long. The creation of Suntec City Located on 11. Suntec City is the single largest integrated commercial development with five office towers. The cogency of the five-force model is thus well-positioned for this study. By 1997. book restaurants and/or travel reservations. The business philosophy In the early days. Esplanade – Theatres on the Bay. Suntec City was called a bowling alley by the press because of the lack of visitors. Under this broad FSP concept. incubators for start-up companies which comprise shared office space. Suntec also adopts a business concept termed facilities service provider (FSP).200 hotel rooms. The FSP concept transforms the traditional role of a landlord to that of a business partner with its tenants through strategic partnership. and an international convention and exhibition centre (Suntec Singapore) with a total of 7 million square feet of space. business philosophy and facilities. and . Edwards and Ellison (2004) considered Porter’s model to be sufficiently well developed and flexible to be capable of broad application across a range of different business types. 300 restaurants and the region’s new centre for the performing arts. and access to capital via a network of investors and a virtual set-up for companies that do not need physical space. a shopping mall. many IT initiatives have been implemented. an internet call center enables tenants to provide online customer support for their web sites to build relationships with their customer and boost online sales. 1. etc. sell. . Suntec City Development Pte Ltd was formed by 11 Hong Kong tycoons in 1988 through a winning bid of S$209 million for the land. a community web portal. Strategic facilities management 123 .7-hectare of prime land adjacent to the Central Business District in Singapore. This then serves as a backdrop against which the role of facilities in enhancing the business performance of Suntec Singapore International Convention and Exhibition Centre will be evaluated. This allows the property and facility implications to be explored over a range of different strategies applied to different organisations. These include: . broad band access via fibre optic cable to enable internet communication among tenants. The next section provides the background information to Suntec City by describing its creation. acquire goods and services. .

In addition.356 and 1.000 m2 column free space. ranging from 76 to 253 m2. Suntec Singapore has also formed an alliance with its neighbours. Suntec Singapore’s vision is to be “The World’s Best Host” and it prides itself in its ability in customizing facilities to cater to their customers’ needs. . Convention hall.288 events for the years 2001 and 2002. and the Esplanade – Theatres on the Bay. The gallery is 3. Suntec Singapore has won many awards with its standards of service.800 people theatre style featuring pre-function areas. Ballroom.200 parking lots spread over two basements. respectively. Meeting rooms. .3/4 124 Suntec Singapore International Convention and Exhibition Centre (SSICEC) One of the key facilities of Suntec City is its convention and exhibition centre – Suntec Singapore. In addition. Car parking. the concourse can cater for up to 600 persons in banquet-style. Lobby. Another multi-purpose space at the entrance to Suntec Singapore.000 delegates in a banquet-style setting or 3.000 delegates in its 12. This is the largest column-free meeting area in Asia capable of accommodating 12.700 m2 of versatile space located that can cater for 1. The six-storey centre was built at a cost of S$620 million. Music and landscaping is also present in the carpark to provide the Suntec City user maximum comfort from the very beginning to the end. Since its opening.150 m2 ballroom is a multi-purpose. There are 31 meeting rooms. there are trained traffic wardens in the car park to direct cars to empty parking lots.000 people. To complement the above facilities. The 2. All these rooms are equipped with state-of-the-art technology to cater to clients’ needs. The employment of this infra-red light instead of radio waves better ensures that sound signals do not leak into adjoining halls. Its 12. The alliance includes hotel partners offering attractive rates for convention delegates. security and facilities and has hosted 1. . in the Executive Suite. sub-dividable space that is able to accommodate 1. having the capacity to fit in 10-400 people. The facilities available at Suntec Singapore include: . The Digital Congress Network system provides infra-red simultaneous interpretation for up to 14 languages. which has its own lounge and bar area. the portable seating system allows flexible configuration and allows for easy set-up and retrieval.000 delegates in a theatre-style setting. Suntec City has the largest carpark in Singapore with 3. Suntec Singapore also provides services such as food and beverage and it also has the largest banquet kitchen in Singapore. The theatre spans over two levels and has a 596 seating capacity. They have the ability to organize a meeting of ten or a convention of 10. There is also a special VIP meeting room for up to 26 delegates. A multi-purpose space on level 3 with 930 m2 of space. In addition. . Exhibition hall. the lobby is mainly used for exhibitions and public displays. This creates a self-contained and totally integrated destination. . .000 m2 floor space can be subdivided into three smaller areas if required. providing on-site and off-site catering facilities for all events. . Gallery. Concourse. Theatre. . . shopping malls in the vicinity. It has total gross area 100.F 24.000 m2 and is one of Asia-Pacific’s largest purpose-built venues.

Sabah and Sarawak from their key overseas markets. 2001). Countries registering rapid convention centre industry growth Ranking 1 2 3 4 5 6 7 8 9 10 Source: www. Further. affordable hotel rates. Table I shows that there are several countries which have shown a growth greater than 50 per cent in the last ten years since 1993. Table II shows the top ten international meeting cities in 2004.000 jobs in Singapore (International Enterprise Singapore Press Release. conventions and exhibitions (MICE) is worth about a billion dollars a year and provides 15.org Country Paris Vienna Brussels Geneva Singapore Copenhagen Barcelona London Berlin Seoul Table II. Top ten international meeting cities in 2004 .org Percentage of growth (1993-2002) 173 144 140 125 113 86 83 81 69 56 54 Strategic facilities management 125 Table I. Thailand’s newly completed International Trade and Exhibition Centre is also a worthy competitor to note as the country enjoyed a 69 per cent growth in its convention industry from 1993 to 2002. incentives.uia. the industry is getting increasingly competitive.Challenges for Suntec Singapore international exhibition and convention centre The convention and exhibition industry which includes meetings. While Singapore has performed well as a MICE destination. Malaysia’s Putra World Trade Centre has been playing a more active role to promote the country as a convention and exhibition destination since it came under a new management in 1993.uia. support from the federal government. good infrastructure. state governments and airlines. Equipped with strong economic performance. Country Iceland Australia Fiji South Africa Peru New Zealand Slovenia South Korea Thailand Cuba Turkey Source: www. the future of Malaysia’s convention industry remains bright. The authorities are also working on improving the air access of destinations like Penang.

This equates to the business concept of being market oriented. the 25 hectare Singapore Expo was built at a cost of over $220 million. Since first opening its doors on 4 March 1999.3/4 126 On the local front.000 m2 (270. competitive advantage can be defined as superior skills or resources that a business deploys to set up barriers that make imitation difficult. In general. However. As a FSP and landlord. and (2) superior resources. there are two broad sources of competitive advantage: (1) superior skills. A flat organisation structure ensures that the information gathered is disseminated effectively down the supply chain. To understand the needs of users requires first and foremost. another 25. Furthermore. Is technology the source of Suntec City’s competitive advantage? According to Day and Wensley (1988). and connectivity. It has 60.000 m2 (645. sound and lighting systems. The initiatives under the FSP programme are designed to help tenants run their businesses more efficiently and effectively.F 24. By doing so. In Suntec’s case. tenants are satisfied and this translates into high occupancy rates. The concept of competitive advantage is central to business strategising because the very purpose of strategy is about seeking new edges in a market while slowing the erosion of present advantages. Both conversions are mediated jointly by strategic choices including objectives and entry timing and the quality of tactics and implementation. an open style of management and regular dialogues with its tenants and other users serves to collect the important information about user needs. The provision of superior customer value or the achievement of lower relative costs result in better performance such as increased market share and/or profitability. superior engineering or technical skills may lead to greater precision or reliability in the finished product. Superior skills arise from the ability to perform individual functions more effectively than other firms. superior skills and resources are not automatically converted into positional advantages nor is there a certain performance payoff from superior cost or differentiated position. Designed by world-renowned and award-winning architect. The Singapore Expo. For example. Suntec City’s finished product in this case is space that meets the need of its users.000 square feet) of outdoor exhibition space and 19 conference halls and meeting rooms. reliable intelligence generation. Other skills may be those that are derived from the systems and organisation structure that enables a firm to adapt more responsively and faster to changes in market requirements. For example. Suntec looks into the needs of smaller start-up companies by providing incubators and related administrative services and thus lowering the capital cost of these businesses – one of their primary concerns. interpretation. the centre is technologically advanced and equipped with the latest state-of-the-art presentation. effective intelligence dissemination and swift responsiveness. The FSP concept provides the cornerstone for Suntec to become a market oriented business organisation. Singapore Expo has hosted more than 218 theme shows and received over 5. .7 million visitors. column-free exhibition space. Cox Richardson Rayner. located five minutes’ drive from the airport and served by the Expo MRT Station is one of the most recent and largest exhibition centres in the region.000 square feet) of indoor.

it is the whole package of software such as management support and commitment. or the family brand name. instead. the broadband access allows efficient internet communication among tenants. First. the connectivity provided by information technology has become a source of differentiation for Suntec whose mission is to be Asia’s Silicon Valley. Central to the concept of competitive advantage is the setting up of barriers that make imitation difficult. the breadth of sales force and distribution coverage. This is likely so since the other players in the market are also big players with strong financial backing such as Singapore Expo and Malaysia’s Putra World Trade Centre. There is synergy in the alliance as the neighbouring uses (e. The model allows the illustration of how forces within an industry can either function to help firms sustain high profits. Strategic facilities management 127 . When Suntec first opened its doors. or how the same forces can provide imposing barriers to profitability. lies in Suntec’s holistic approach to business management. In summary. if we look at Suntec’s differentiated position through the use of technology. Several factors were important in turning its location into a superior resource. the location. the availability of automated assembly lines. The following discussion examines the impact of each force on Suntec Singapore’s competitive position and how facilities and its related services can enhance its competitive position. its location was considered its Achilles’ heel. The positional advantage of Suntec in providing superior customer value. Facilities and Suntec Singapore’s competitive position The five-force model developed by Porter determines industry profitability through the understanding of a subject company’s competitive position in relation to five forces. They may reside in the scale of the manufacturing facility. Second. To this end. it is the use of technology to condense time and space. In addition. Suntec’s commitment in meeting the needs of its users through the implementation of the FSP initiative is the closing link to Suntec’s competitive advantage. hotel. And finally. Suntec “created” its own locational advantage by forming an alliance with its neighbours. First. For example. it is the strategic choices made by Suntec’s management in adopting a market oriented approach through the FSP programme and maintaining a good long-term relationship with its stakeholders through alliances.Superior resources are more tangible requirements for advantage that enable a firm to exercise its capabilities. business management talent and skills that are more difficult to replicate and thus provide a more sustainable competitive advantage. buyers and threat of substitute products or services. Together. Today. while financial limitations can raise the barrier for imitation of hardware such as technology and thus provide some degree of competitive advantage. there is also the benefit of agglomeration economies by forming an alliance with the neighbouring competing uses. namely. the strong management support given by Suntec’s top management to create a vibrant and modern development that is in tune with Singapore’s progress as a nation is a key driver for its Suntec’s positional advantage. it is a barrier that is relatively easy to imitate if the financial means are available to its competitors. it creates a self-contained and totally integrated destination. suppliers potential new entrants.g. Second. entertainment) complement Suntec City. competitors.

product differentiation and capital requirements. Singapore has the advantage of being in a geographically strategic position. Competitors The competitive position of a firm is weakened if competitors are numerous or are roughly equal in size and power.3/4 128 Potential entrants The seriousness of the threat of entry depends on the barriers present. The competition Suntec Singapore faces can be analyzed at two levels. It is also worthy to note that Singapore is the only Asian city to make it into the top ten. the competitors are many and are competitive in terms of size and power. it is state-of-the-art and that meets the needs of the . South Korea and Thailand are increasingly popular given the results of growth rates in Table I. suppliers of services such as cleaning and building maintenance belong to highly competitive industries and as such they have a weaker bargaining position against Suntec Singapore. Suntec Singapore depends to a large extent on outsourced service providers to meet the needs of their clients. On the local front. In a study by Dube and Renaghan (1999) on the lodging industry’s best practices. The first level relates to the appeal of the country destination as a whole. Suntec Singapore recruits worldwide for these services and talents. In addition.e. the security. etc. Further. In addition. Convenient location remains the primary hotel attribute driving purchase decision. the product is unique and if the industry is not an important customer of the supplier group. there are many willing suppliers to offer services such as broadband access. the effective transportation network. the authors noted that a hotel’s location is a structural quality that is tremendous source of sustainable competitive advantage. At the international level.F 24. A supplier is powerful if it is dominated by a few companies. it appears that Singapore is doing well coming in 5th as the top ten international meeting cities. To ensure a ready supply of services. To remain ahead of competition. In the convention centre business. Essentially the sources of barrier include cost advantages. the location of Suntec Singapore can be utilised to market it as the gateway to Asia. The positive image that is associated with the Suntec brand name also proved the success of its marketing and branding initiatives through the years. However. from Table II. Powerful suppliers can thereby squeeze profitability out of an industry unable to recover cost increases in its own prices. because Suntec Singapore is a big client and offers a big contract. maintenance. Suppliers Suppliers can exert bargaining power on participants in an industry by raising prices and reducing the quality of purchased goods and services. Australia. Suntec Singapore is still a preferred venue due to its easy accessibility to various other entertainment outlets and hotels. Suntec Singapore has to ensure that its physical facilities are consistent with its branding as Asia’s Vertical Silicon Valley. However. the most effective barrier lies in product differentiation. i. And in the case of facilities. state-of-the-art facilities and proximity to neighbouring Malaysia and Thailand for extended holiday is a whole locational advantage that diminishes the threat of potential entry. while the second level is concentrated on the convention centres within Singapore.

The foreign exhibitors are an important clientele group. since Suntec’s mission is to be Asia’s Vertical Silicon Valley. While it is unlikely that video-conferencing will eradicate face-to-face conferences completely. possibly due to the publicity of big corporate events coupled with the spaciousness of the place that may be too “cold” and impersonal for events like ´ cor. as the largest fountain in the world further enhances Suntec’s attraction to its foreign buyers. Video-conferencing became a feasible alternative for some conference organisers. especially the wedding banquets where price is less sensitive if the buyer perceives value in the product offered. Further. local exhibitors and local banquet events. For example. The Fountain of Wealth. For the local banquets. marketing Suntec together with its neighbours as a total self-contained and integrated destination with retail. smaller local event organisers are powerful in the way that they are price sensitive since they work on high overheads. Cancellations during the SARS (Severe Acute Respiratory Syndrome) outbreak in Singapore during 2003 meant losing about 1. Substitutes Substitute products are those which perform a similar function or convey a similar benefit as your product but are different in a fundamental way. it nevertheless may be an option for some organisers. Buyers A buyer group is powerful if it purchases in large volumes and if the products it purchases are standard or undifferentiated. weddings. The swift response by Suntec to introduce thermal imagers and SARS information kit is a positive step to allay fears and enhance its attractiveness to buyers. cars were a substitute for horses. Although the neighbouring hotels can also be considered to be Suntec Singapore’s competitors for local banquet events. In addition. This became apparent during the SARS period in 2003. Dube and Renaghan (1999) observed that for the top hotels. Similarly. more “warmth” can be injected into the ballrooms by way of de lighting and design. the scale of the Suntec City Development including its office and retail blocks sends a strong signal to Suntec Singapore’s competitors on its financial and management capabilities to retaliate when its market position is threatened. The buyers of Suntec Singapore can be classified into several groups: foreign exhibitors. Hence. their co-location within the Marina area generate agglomeration economies by creating a total experience for its visitors. In response. Studies by Canen and Williamson (1998) and Kerns (1999) have shown that facility layout is an important factor towards competitiveness of a business. Its large quantity of space and versatility in configuration is an added advantage for large exhibitions and convention. the physical product is closely tied to fulfilling either functional or aesthetic brand promises. Suntec Singapore’s image is very much “corporate”. The best buyer group appears to be the local banquet events. hotels and entertainment outlets will enhance its value to foreign buyers. In addition.000 foreign exhibitors and this translates into a loss of about $2 million. more can be done to create awareness of the availability of smaller spaces for say weddings. Substitutes can entirely change the rules of competition in an industry. the vertical integration of Strategic facilities management 129 . the advancement in telecommunication technology has posed some form of threat.MICE industry. For Suntec Singapore.

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emeraldinsight. Oppermann. NY.uia. Union of International Associations (UIA) (2005).E. and Akhlaghi.A. (1996). New York. A. “The convention industry in Australia and the United Kingdom: key issues and competitive forces”. (2003). Competitive Strategy: Techniques for Analyzing Industries and Competitiors. D. 7. “Performance measures: relating facilities to business indicators”. (1985). Oakland. (1999). NY. 10-19. M. 233-49. “Configurations of strategy and structure: towards a synthesis”. pp. Oxford. The Free Press. Times Edition Pte Ltd. 7 No. New York. Porter. (1989). available at: www. (1986).au Strategic facilities management 131 To purchase reprints of this article please e-mail: reprints@emeraldinsight. Suntec City. 6-14. Vol. The Free Press. 3. Total Quality Management. J.Miller. (1995). Vol. M. O’Mara. M. New York. “Convention cities – images and changing fortunes”. The Free Press.edu. and Ladkin.E. pp. Journal of Travel Research. Journal of Tourism Studies. F. Porter. 125-32.org Weber. Singapore. NY. 42. pp.com/reprints . Tranfield. M. D. Strategy and Place. Corresponding author Linda Tay can be contacted at: lindat@unsw. Vol. K. Vol. 1. Further reading Suntec City Development Pte Ltd (1998). Facilities. Strategic Management Journal. (1980). Competitive Advantage: Creating and Sustaining Superior Performance.com Or visit our web site for further details: www. pp. Heinemann. 13 No.