New Approaches To CSR

Accounting, Finance, Sustainability, Governance & Fraud:
Theory and Application
Kıymet Tunca Çalıyurt Editor
New Approaches
to CSR,
Sustainability and
Accountability,
Volume I
Accounting, Finance, Sustainability,
Governance & Fraud: Theory and Application
Series Editor
Kıymet Tunca Çalıyurt, Iktisadi ve Idari Bilimler Fakultes, Trakya University
Balkan Yerleskesi, Edirne, Turkey
This series acts as a forum for book publications on current research arising from
debates about key topics that have emerged from global economic crises during the
past several years. The importance of governance and the will to deal with
corruption, fraud, and bad practice, are themes featured in volumes published in the
series. These topics are not only of concern to businesses and their investors, but
also to governments and supranational organizations, such as the United Nations
and the European Union. Accounting, Finance, Sustainability, Governance &
Fraud: Theory and Application takes on a distinctive perspective to explore crucial
issues that currently have little or no coverage. Thus the series integrates both
theoretical developments and practical experiences to feature themes that are
topical, or are deemed to become topical within a short time. The series welcomes
interdisciplinary research covering the topics of accounting, auditing, governance,
and fraud.
More information about this series at http://www.springer.com/series/13615

Kıymet Tunca Çalıyurt
Editor
New Approaches to CSR,

Sustainability
and Accountability, Volume I
123
Editor
Trakya University
Edirne, Turkey
ISSN 2509-7873 ISSN 2509-7881 (electronic)

Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application
ISBN 978-981-32-9587-2 ISBN 978-981-32-9588-9 (eBook)
https://doi.org/10.1007/978-981-32-9588-9
© Springer Nature Singapore Pte Ltd. 2020
This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part
of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations,
recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission
or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar
methodology now known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this
publication does not imply, even in the absence of a specific statement, that such names are exempt from
the relevant protective laws and regulations and therefore free for general use.
The publisher, the authors and the editors are safe to assume that the advice and information in this
book are believed to be true and accurate at the date of publication. Neither the publisher nor the
authors or the editors give a warranty, expressed or implied, with respect to the material contained
herein or for any errors or omissions that may have been made. The publisher remains neutral with regard
to jurisdictional claims in published maps and institutional affiliations.
This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd.
The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721,
Singapore
Acknowledgements
As the founder of the International Group on Governance Fraud Ethics and CSR,
I would like to dedicate this book to the distinguished academician, 8th conference
president Prof. Nauman Farooqi, Dean of Business and Social Sciences, Mount
Allison University.
https://isletme.trakya.edu.tr/pages/2017-konferans-kitabi.
Prof. Dr. Nauman Farooqi has been attending International Conference on
Governance Fraud Ethics and CSR as keynote speaker since 2010 and also acting as
member in scientific committee.
Prof. Nauman is the most recognized academician on Hawala System in the
world. We would like to express our sincere respects and thanks to Prof. Dr. Nauman
Farooqi for his support to our conference series.
Kıymet Tunca Çalıyurt, CFE, CPA

Book Series Editor
v
Contents
Part I Overview
1 Introduction: Why Do We Need to Talk About Climate Change
Risk as Accountants and Auditors Urgently? . . . . . . . . . . . . . . . . . 3
Part II New Approaches in Sustainability

2 Sustainable Development in India: A Case Study of Vedanta . . . . . 13
Renu Jatana and Mehjabeen Barodawala
3 Implementation of Lean Management: Sustainability in the
Construction Industry: The Case of Brazilian Companies . . . . . . . 25
Alberto Eduardo Besser Freitag, Osvaldo L. G. Quelhas,
Sergio Luiz Braga França and Marcelo Jasmim Meiriño
4 The Importance of Sustainability and Sustainability Reporting . . . 45
Zeynep Şahin and Fikret Çankaya
5 Sustainable Development and Industry Revolutions . . . . . . . . . . . . 61
Meltem Okur Dinçsoy
6 Sustainability Officer in Indonesia’s Palm Oil Companies . . . . . . . . 81
Elvia Ivada and Hasan Fauzi
7 The Effects of Leadership Styles on Organizational Trust
and Disclosure of Unethical Behaviors (Whistleblowing):
A Practical Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Feyza Çağla Oran and Agah Sinan Ünsar
Part III New Approaches in CSR

8 Corporate Social Responsibility in Bulgaria: Perspectives
and Possibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
Diana Kopeva, Nikolay Sterev and Dimitar Blagoev
vii
viii Contents
9 Property Inheritance by Women in Kosovo . . . . . . . . . . . . . . . . . . 159

Simeana Beshi
10 Women Rights for Sustainable Business and Entrepreneurship:
Case from Balkan Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
11 The Relationship of Public Banks in Turkey with Sustainable
Macroeconomic Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193
Başak Oktay Akın and Enver Erdinç Dinçsoy
12 Cultural Profiles and Assertiveness of Women in Bulgarian
Business Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207
Milen Baltov and Diana Sabotinova Mladenova
13 Investing in Women’s Entrepreneurship: Inclusive
and Sustainable Economic Growth . . . . . . . . . . . . . . . . . . . . . . . . . 225
Arzu Özyol
14 The Relationship Between Sustainable Economic Development
and Tourism in Turkey: Panel Data Analysis . . . . . . . . . . . . . . . . . 249
Dilek Tandoğan
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265
Editor and Contributors
About the Editor
Prof. Dr. Kıymet Tunca Çalıyurt, CPA, CFE graduated from the Faculty of
Business Administration at Marmara University, Istanbul, Turkey. Her Masters and
Ph.D. degrees are in the Accounting and Finance Programme from the Social
Graduate School, Marmara University. She has worked as Auditor in Horwath
Auditing Company, Manager in McDonalds and finance staff in Singapore Airlines.
After vast experience in the private sector, she has started to work in academia. She is
holding CFE and CPE titles. Her research interests are in accounting, auditing, fraud,
social responsibility, corporate governance, finance and business ethics, with a special
interest in aviation management, NGOs, women rights in business. She has been as
visiting researcher in Massachusetts University Amherst Business School. She is the
founder of the International Group on Governance, Fraud, Ethics and Social
Responsibility (IGonGFE&SR) which was founded in 2009. In 2009, she also
founded the International Women and Business Group, which organizes global,
annual conferences. Kıymet has published papers, book chapters and books both
nationally and internationally on fraud, social responsibility, ethics in accounting/
finance/aviation disciplines in Springer and Routledge. She is book series editor in
Springer with the title Accounting, Finance, Sustainability, Governance & Fraud:
Theory and Application, and book series editor in Routledge with the title Women and
Sustainable Business. Some book titles: Emerging Fraud (with Sam Idowu),
Corporate Governance: An International Perspective (with Sam Idowu), Women and
Sustainability in Business: A Global Perspective, Sustainability and Management:
An International Perspective (with Ulku Yuksel), Globalization and Social
Responsibility (with David Crowther), Regulations and Applications of Ethics in
Business Practice (with Dr. Jiang Bian), Ethics and Sustainability in Accounting and
Finance, Volume I. She is acting as member in editorial board Journal of Financial
Crime, Social Responsibility Journal, International Journal on Law and
Management, Journal of Money Laundering Control. She is a regular speaker at
International Economic Crime Symposium in Jesus College, Cambridge University.
ix
x Editor and Contributors
She is member in editorial board Social Responsibility Journal, Journal of Financial

Crime, International Journal of Law and Management. She is a partner of Herme
Consulting in Trakya University Technopark.
Contributors
Başak Oktay Akın Department of Banking and Insurance, Keşan Yusuf Çapraz
School of Applied Sciences, Trakya University, Edirne, Turkey
Milen Baltov Burgas Free University, Burgas, Bulgaria
Mehjabeen Barodawala ICSSR, MLS University, Udaipur, Rajasthan, India
Simeana Beshi Faculty of Law, FAMA College, Pristina, Kosovo
Dimitar Blagoev University of National and World Economy, Sofia, Bulgaria
Kıymet Tunca Çalıyurt Business Administration Department, Trakya University,
Edirne, Turkey
Fikret Çankaya Black Sea Technical University, Trabzon, Turkey
Feyza Çağla Oran Kadir Has University, Istanbul, Turkey
Enver Erdinç Dinçsoy Department of Banking, School of Applied Sciences,
Trakya University, Edirne, Turkey
Meltem Okur Dinçsoy Department of Economics, Faculty of Economics and
Administrative Sciences, Trakya University, Edirne, Turkey
Hasan Fauzi Center for Social and Environmental Accounting Research and
Development (ICSEARD);
Faculty of Economics and Business, Sebelas Maret University, Surakarta, Indonesia
Sergio Luiz Braga França Fluminense Federal University, Rio de Janeiro, Brazil
Alberto Eduardo Besser Freitag Fluminense Federal University, Rio de Janeiro,
Brazil
Elvia Ivada Faculty of Teacher Training and Education;
Renu Jatana UCCMS, MLS University, Udaipur, Rajasthan, India
Diana Kopeva University of National and World Economy, Sofia, Bulgaria
Marcelo Jasmim Meiriño Fluminense Federal University, Rio de Janeiro, Brazil
Arzu Özyol Ankara University, Ankara, Turkey
Osvaldo L. G. Quelhas Fluminense Federal University, Rio de Janeiro, Brazil
Diana Sabotinova Mladenova Burgas Free University, Burgas, Bulgaria
Editor and Contributors xi
Nikolay Sterev University of National and World Economy, Sofia, Bulgaria

Zeynep Şahin Black Sea Technical University, Trabzon, Turkey
Dilek Tandoğan Karadeniz Technical University, Trabzon, Turkey
Agah Sinan Ünsar Trakya University, Edirne, Turkey
List of Figures
Fig. 2.1 Sustainable developmentmodel. Source http://

sustainabledevelopment.vedantaresources.com/sustainable-
development/approach-and-strategy.html . . . . . . . . . . . . . . . . . .. 20
Fig. 6.1 Percentage of companies’ in each sustainability stage. Source
The result of the data analysed by authors . . . . . . . . . . . . . . . .. 99
Fig. 7.1 Archetypal traits exhibited by a whistleblower. Reference
Banerjee and Roy (2014, p. 10) . . . . . . . . . . . . . . . . . . . . . . . . . 107
Fig. 7.2 Newly developed advanced whistleblowing antecedent
(process) model. Reference Banerjee and Roy (2014, p. 12) . . . 108
Fig. 7.3 Conceptual model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Fig. 7.4 SEM model (v2/df = 3.324; NFI = 0.846; NNFI = 0.814;
IFI = 0.887; CFI = 0.887; RMSA = 0.049; GFI = 0.801;
AGFI = 0.785; PNFI = 0.805; and PGFI = 0.741) (AW
explicit whistleblowing, DKL democratic leadership, DW
external whistleblowing, EL ethical leadership, FW formal
whistleblowing, IFW informal whistleblowing, IW internal
whistleblowing, OL autocratic leadership, OG organizational
trust, SL delegative leadership, YG managerial trust, ZW
implicit whistleblowing) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Fig. 8.1 Gross domestic product (GDP) per capita by regions at NUTS
2 in Bulgaria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
Fig. 8.2 Purchasing power standard (PPS) per capita by regions at
NUTS 2 in Bulgaria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
Fig. 8.3 Purchasing power standard (PPS) per capita by regions at
NUTS 2 in Bulgaria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Fig. 8.4 Unemployment rates from 15 to 74 years by regions at NUTS
2 in Bulgaria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Fig. 8.5 Unemployment rates from 15 to 74 years by regions at NUTS
2 in Bulgaria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
Fig. 8.6 Rate of natural change of population by regions at NUTS 2
in Bulgaria (‰) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
xiii
xiv List of Figures
Fig. 8.7 Rate of net migration by regions at NUTS 2

in Bulgaria (‰) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
Fig. 8.8 Participation rates in primary and lower secondary education
by regions at NUTS 2 in Bulgaria (%) . . . . . . . . . . . . . . . . . . . . 152
Fig. 9.1 Structure of respondents in chart form . . . . . . . . . . . . . . . . . . . . 166
Fig. 10.1 Preferred salaries when men and women are up for the same
role. Source 2017 Women, work, and the state of wage
inequality, https://hired.com/gender-wage-gap-2017 . . . . . . . . . . 176
Fig. 10.2 Gender inequality index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
Fig. 10.3 Turkey’s rank in the human development index (HDI) . . . . . . . . 187
Fig. 10.4 Turkey’s rank in gender inequality index. http://hdr.undp.org/
en/composite/GII. Accessed May 15, 2019 . . . . . . . . . . . . . . . . . 188
Fig. 11.1 Average number of employees per bank. Source https://www.
tbb.org.tr/Content/Upload/Dokuman/7349/TBB_sube_
personel_bilgi_notu_100316.pdf . . . . . . . . . . . . . . . . . . . . . . . . . 203
Fig. 12.1 EU-28 trends in employment rates, people aged 20–64, by
gender [%] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209
Fig. 12.2 Share of part-time to total employment by gender, 20–64, per
Member State, 2017q3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211
Fig. 12.3 Change in the proportion of women on the boards of the
largest publicly listed companies in the EU, October
2010–October 2018 (percentage points) . . . . . . . . . . . . . . . . . . . 214
Fig. 12.4 Gender gap by country, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . 215
Fig. 12.5 Exploring the global gender gap index data . . . . . . . . . . . . . . . . 222
Fig. 13.1 Women entrepreneurship, innovation, and internationalization
(Own elaboration of Verheul and Van Stel) . . . . . . . . . . . . . . . . 235
Fig. 14.1 Number of tourists arrived in Turkey in 2004 and 2017 on
subregions basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253
Fig. 14.2 Total employment in Turkey in 2004 and 2017 on subregions
basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254
Fig. 14.3 Women employment in Turkey in 2004 and 2017 on
subregions basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254
List of Tables
Table 3.1 Integration between lean and sustainability in construction

industry, based on literature review . . . . . . . . . . . . . . . . . . . .. 33
Table 3.2 Ranking of lean construction practices . . . . . . . . . . . . . . . . . .. 35
Table 3.3 Conceptual framework between lean construction practices,
lean tools/techniques for sustainability and their deployment
phases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Table 5.1 Sustainable Development Goals . . . . . . . . . . . . . . . . . . . . . . . . 64
Table 5.2 Primary technological developments in Industry 1.0 . . . . . . . . . 67
Table 6.1 Annual report and sustainability report available in the IDX
and company’s website . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 89
Table 6.2 Miller and Serafeim (2014) sustainability stage . . . . . . . . . . .. 91
Table 6.3 Framework for developing sustainability stage in Indonesian
palm oil companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Table 6.4 Example of triangulation made by researcher . . . . . . . . . . . . . . 92
Table 6.5 Characteristic of SO in Indonesian palm oil company . . . . . . . 94
Table 6.6 Sustainability score of Indonesian palm oil companies . . . . . . . 97
Table 7.1 Descriptive statistics of demographic characteristics of
participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Table 7.2 Explanatory factor analysis of the leadership scale . . . . . . . . . . 111
Table 7.3 Explanatory factor analysis of the organizational trust
scale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
Table 7.4 Explanatory factor analysis of the whistleblowing scale . . . . . . 113
Table 7.5 Reliability analysis results of the scales . . . . . . . . . . . . . . . . . . 115
Table 7.6 Results of factor correlations. . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Table 7.7 Results of the measurement model . . . . . . . . . . . . . . . . . . . . . . 119
Table 7.8 Structural model results and bootstrap confidence
interval values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Table 7.9 SEM model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
xv
xvi List of Tables
Table 7.10 Mann–Whitney U test result for sub-dimensions of leadership

styles scale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Table 7.11 Mann–Whitney U test results of intergroup differences
among leadership style scale . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
Table 7.12 Mann–Whitney U test result for sub-dimensions
of organizational trust scale . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
among organizational trust scale . . . . . . . . . . . . . . . . . . . . . . . . 127
Table 7.14 Mann–Whitney U test result for sub-dimensions
of whistleblowing scale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
among whistleblowing scale . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
Table 9.1 Structure of respondents in table form . . . . . . . . . . . . . . . . . . . 166
Table 10.1 Shadow groups reports related to Cedaw regulatıons
in Balkan area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
Table 11.1 Number of banks in Turkey according to their types . . . . . . . . 195
Table 11.2 Loan volumes in Turkish banking sector (in thousands) . . . . . . 197
Table 11.3 Deposit volumes in Turkish banking sector (in thousands) . . . . 197
Table 11.4 External debt and loan usage (million USD) . . . . . . . . . . . . . . 200
Table 11.5 Branch and staff information of public banks . . . . . . . . . . . . . . 203
Table 13.1 Differences of Women in Development (WiD) and Gender
and Development (GaD) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231
Table 13.2 Regional comparison on women’s participation in firm
ownership, in management and as workers . . . . . . . . . . . . . . . . 243
Table 14.1 Variables used in panel data analysis and their definitions . . . . 258
Table 14.2 Levin, Lin and Chu unit root test results . . . . . . . . . . . . . . . . . 258
Table 14.3 Panel causality test results of total employment models . . . . . . 259
Table 14.4 Panel causality test result of total women employment
models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260
Part I
Overview
Chapter 1
Introduction: Why Do We Need to Talk
About Climate Change Risk
as Accountants and Auditors Urgently?
As the International Group on Governance Fraud Ethics and CSR, we wrote this
book while we were organizing the 8th conference in Canada and 9th conference in
India. I would like to thank Prof. Nauman Farooqi, Dean of Business and Social
Sciences and Prof. Harpreet Kaur, Head of Corporate Governance Department,
National Law University for their hospitality. In this book, we have thirteen
chapters around five countries: Turkey, Bulgaria, Indonesia, Brasil, and India. Our
authors have discussed recent issues on sustainability and corporate social
responsibility in their chapters. In four chapters, we focused on women in sus-
tainability and corporate social responsibility. As an accounting professor, my plan
is to have your attention on a very urgent issue, climate change risk and its man-
agement. Why? Because our world is dying… Most of the companies don’t pay
attention to environmental problem, they don’t like to publish sustainability report,
they don’t like to get training for their staff on environmental issues, they don’t like
to measure and disclose carbon emission, etc. However, all of us know that irre-
sponsible companies make environmental issues worse everyday therefore
accountant and finance staff in companies have responsibilities to push managerial
board and shareholders to include sufficient expenses about environmental issues in
the budget continuously.
Climate change is a change in the pattern of weather, and related changes in
oceans, land surfaces, and ice sheets, occurring over time scales of decades or
longer. (Australian Academy of Science 2019) Latest reports issued by the
Intergovernmental Panel on Climate Change (IPCC) provide multiple lines of
evidence that the global climate is changing as a consequence of the rapidly
increasing atmospheric concentrations of greenhouse gases (IPCC 2013). The rate
of greenhouse gases in the atmosphere started to increase after the industrial rev-
olution that started in the 1750s, and the carbon dioxide rate increased by 40% to
280–394 ppm. According to the Intergovernmental Panel on Climate Change
(IPCC), the increase in carbon dioxide is primarily due to the use of fossil fuels. An
K. T. Çalıyurt (&)
Business Administration Department, Trakya University, Edirne, Turkey
e-mail: kiymetcaliyurt@trakya.edu.tr
© Springer Nature Singapore Pte Ltd. 2020 3

K. T. Çalıyurt (ed.), New Approaches to CSR, Sustainability and Accountability,
Volume I, Accounting, Finance, Sustainability, Governance & Fraud:
Theory and Application, https://doi.org/10.1007/978-981-32-9588-9_1
4 K. T. Çalıyurt
essential second factor is a change in land use, especially deforestation. The

Intergovernmental Panel on Climate Change has shown that global average tem-
peratures increase as a result of the impact of human activities on the atmosphere.
According to the IPCC, 56% of the human-sourced greenhouse gas emissions in
2004 belong to the carbon dioxide produced by fossil fuel use. (www.wwg.org.tr)
In the fight against climate change, the responsible companies (carbon majors) has
more important role than others because it is known that hundred companies
responsible for 71% of global emissions (Climate Accountability 2018).
Climate change has become a critical environmental narrative of the twenty-first
century. The climate is no longer just the subject of meteorologists that this is also
one of the critical risk factors for the business world. The use of nature as a raw
material to meet the inexhaustible needs of people and the failure to put this use in
place have triggered climate change. Nowadays, there are new stakeholders besides
creditors, tax authorities, shareholders, customers, and suppliers that companies
need to account for environment and the future.
In this chapter, we will focus on the effects of climate change on corporate
governance especially the regulations, application, reporting, and accountability on
accounting, finance, and auditing. These three areas, which provide the preparation
of the financial statements and financial accountability of the companies, have been
under severe pressure for many years about the environment. Sakhel (2017) stated
that regulated industries implement more regulatory response measures than firms
that are part of non-regulated industries, while, interestingly, there are no significant
differences between the two groups in exposure and responses to physical and
market risks. Some regulations and rationality about CCR are as follows;
• International Federation of Accountants (IFAC) has presented a letter to
United Nations Framework Convention on Climate Change (UNFCCC), IFAC
issues its support of the UNFCCC’s facilitation of the forthcoming international
climate negotiations at the 21st session of the Conference of the Parties (IFAC
2015). As the global organization for the accountancy profession, IFAC is
advocating for a universal agreement and active international dialogue that
encourages the transition toward resilient, low-carbon societies and economies.
In addition to providing our commitment to climate action on long-term global
emissions, IFAC is raising awareness of the important role played by the
accountancy profession and professional accountants in facilitating govern-
ments, capital markets, and organizations to implement plans for climate change
mitigation and adaptation. IFAC is comprised of over 175 Members and
Associates in over 130 countries and jurisdictions, representing almost 3 million
accountants in public practice, education, government service, industry, and
commerce.
• United Nations Global Compact (UNGC) also plays a prominent role in the
sustainable development of the global climate, and new multilateral, bilateral,
and domestic climate funds have emerged as well as growing private sector
investments in clean technologies (Pickering et al. 2015). 13,483 institutions
promised to UNGC for following 17 Sustainable Development Goals (SDGs)
1 Introduction: Why Do We Need to Talk About Climate … 5
that 381 companies among them primarily focused on Caring for Climate, 96
companies are Carbon Pricing Champions, 84 companies are in Responsible
Climate Policy Engagement, but only one company is in Pathways to
Low-Carbon and Resilient Development.
• G20’s Financial Stability Board’s (FSB) has announced “Task Force on
Climate-Related Financial Disclosures (TCFD)” which develops voluntary,
consistent climate-related financial risk disclosures for use by companies in
providing information to investors, lenders, insurers, and other stakeholders
(FSB 2018). The TCFD has received significant support from leading compa-
nies and organizations around the world since its voluntary recommendations
were released in June 2017. The TCFD’s Final Report recommends to com-
panies specific disclosures in four areas:
a. Governance—an organization’s governance around climate-related risks and
opportunities;
b. Strategy—the actual and potential impacts of climate-related risks and oppor-
tunities on an organization’s businesses, strategy, and financial planning;
c. Risk Management—how an organization identifies, assesses, and manages
climate-related risks;
d. Metrics and targets used to assess and manage relevant climate-related risks and
opportunities. (TCFD 2018)
• Another critical issue for the companies is carbon trade, pricing, and reporting
that also carbon pricing is moving up the agenda for investors as a material risk
that companies must consider in their decision-making which is mandated by
the Financial Stability Board’s Task Force on Climate-Related Financial
Disclosures (TCFD).
• Recent global advances such as the 2015 United Nations Climate Change
Conference (COP21) in Paris, the Kigali Amendment to the Montreal
Protocol, and a pact to limit airline emissions under the International Civil
Aviation Organization (ICAO) signal growing momentum toward a
low-carbon transition. Platforms such as the U.N. Global Compact Business
Leadership Criteria on Carbon Pricing, the World Bank’s Carbon Pricing
Leadership Coalition, and business statements in support of the Paris
Agreement illustrate that companies are preparing for this low-carbon future.
• International Federation of Accountants (IFAC)’s subcommittee IAASB
asks auditors to pay attention to environmental issues. According to IAPS 1010,
“The Consideration of Environmental Matters in the Audit of Financial
Statements,” the auditor needs to consider environmental matters in the audit of
the financial statements.
• International Financial Reporting Standards Foundation (IFRS) announces
standards for accounting, however, as mentioned in Jagd’ s study (2017), the
classic logic and virtues of the financial statement, according to the International
Financial Reporting Standards (IFRS), can actually be reused and/or extended at
least the following connotations to existing IFRS rules, for which the inner logic
can be reused/extended through relatively simple means, thus obtaining quite
6 K. T. Çalıyurt
good TCFD reporting for IFRS 7: Financial Instruments: Information, IFRS 9:

Financial Instruments, IFRS 36 Impairment of Assets, and IFRS 37: Provisions,
Contingent Liabilities and Contingent Asset. According to some studies, there
are also difficulties in understanding and using of IPCC reports, IAS 36.
Budescu and colleagues mentioned in their study (2009) “the judgment literature
indicates that there are large differences in the way people understand such
phrases and that their use may lead to confusion and errors in communication”
and they made some recommendations in their study on this issue.
• Integrated Reporting is supported by The International Integrated Reporting
Council (The IIRC)’s mission is to establish integrated reporting and thinking
within mainstream business practice as the norm in the public and private
sectors. The IIRC responded to consultation on the FSB Task Force on
Climate-related Financial Disclosures recommendations on 10 February 2017:
“The IIRC welcomes the recommendation that companies should ‘integrate’
their risk management in the face of the threat of climate change, made in the
report from the FSB Task Force on Climate-related Financial Disclosures.
The IIRC believes that genuine action to combat climate change can only be
achieved by extending the disclosure horizon. We are committed to supporting
efforts to align the Task Force recommendations with existing attempts to
improve corporate governance by extending accountability for the management
of multiple, interconnected resources and relationships. The implementation of
these recommendations should lead to a fundamental realignment of corporate
and investment behaviours and decision-making, as well as acting as a catalyst
for a more cohesive and aligned corporate reporting system” (IIRC 2017).
However, ultimately, the climate change risk (CCR) is one of the risk should be
considered by companies. Disasters caused by climate change are reflected in the
financial statements. Due to disasters such as floods, whirlwind, freezing, tsunami,
ice rains, the loss of the assets of the companies, the cancelation of the contracts, the
loss of the customers requires the strategic decision of the management. CPA, CFO,
external auditor, internal auditor, board, CFE, the actuary will be active in the
process of budgeting, accounting, reporting, and inspection of CCR applications
because they should govern, record, measure, and report environmental issues.
Corporate boards and executive management needs to understand, decide, and
implement new strategies against climate change risks that previous literature
suggests classification in three categories: Physical risks, Regulatory risks, and
Market risks (Busch et al. 2012; Elijido-Ten 2017; Nikolaou et al. 2015).
Managerial boards and also the auditing committees in the companies should ensure
that environmental reporting is “subject to internal governance processes that are
the same or substantially similar to those used for financial reporting”. This will
probably mean that some boards should be supplemented with new skill levels, and
that audit and corporate governance structures should be upgraded in the nonfi-
nancial area (PDF) TCFD = IFRS + Climate Risks (Jagd 2017). However, man-
agers and corporate understanding of climate change and related energy issues
remains fragmented, incomplete, and lacks the urgency this problem deserves
(Busch and Shrivastava 2011). The international climate change regime started very
constructively, although there has been progressing over the last 25 years, this
progress falls short of what is needed to address the climate change problem. (Gupta
2016) The most important problem about “climate change management risk” in
business is the estimate of time, place, amount, style of climate damage to the
companies and its properties. Proactive methods are recommended to corporate
boards and management, and also they need to redesign management system by
“wearing eyeglass with climate perspective.”
Recent developments, problems on CCR in corporate governance, accounting,
finance, and auditing are listed in following but of course issues are not limited. It is
easy to see that “climate change risk and its management” is an emerging issue in
accounting that professionals need to spend time and money.
• Determining and addressing physical risks, regulatory risks, market risks on
CCR by publicly held companies,
• Rewriting corporate strategies against CCR,
• Developing a budget, plan, and program against CCR,
• Training accounting, finance, and auditing staff on environmental issues, sus-
tainability and CCR,
• Sustainability reporting for CCR,
• Valuating CCR,
• Budgeting precautions against CCR,
• Estimating the cost of CCR
• External Auditor planning, auditing, documenting on CCR,
• Governing, measuring, reporting on corporate energy efficiency and corporate
carbon footprint,
• Investment decision against CCR,
• Application of IFRS 7: Financial Instruments: Information, IFRS 9: Financial
Instruments,
• IAS 37: Provisions, Contingent Liabilities, and Contingent Assets and IAS 36
Impairment of Assets for CCR,
• What is the role of the external auditor and auditing committee against CCR?
• How does external auditor will audit CCR, sustainability reporting?
• What is the role of the International Financial Reporting Standards (IFRS)?
• Difficulties in understanding and interpreting the Task Force on Climate-Related
Financial Disclosures (TCFD), IAS 6, IAS 7, IAS 37, IAS 36?
• Information system for CCR
• The differences in approaching environmental and climate change managerial
issues between developed, developing under developed countries,
• Classifying, valuating, booking, reporting stranded assets,
• Evaluating, classifying, addressing CCR in integrated reporting (IR) and role of
accountant, auditor in preparing IR.
• Fraud examination on CRR valuating, planning, budgeting, costing, reporting,
auditing.
8 K. T. Çalıyurt
The Synthesis Report confirms 95% certain that humans are the main cause of
the current global warming. (IPCC 2014) If the company management doesn’t want
to damage the nature, they have to pay attention to environmental issues. Top
executives and employees of the company should follow the latest regulations
regarding climate change even if it has not been announced as company policy.
I would like to finalize my chapter with an example from the construction sector.
In one of our book published in book series, Prof. Vassigh recommends that
building design, development, and construction are an interdisciplinary endeavor
and effective collaboration among various domain experts is critical to the sus-
tainability and resiliency of the environment.
Recent scientific research has established that climate change is primarily due to human
activities that produce heat-trapping gas emissions. These emissions are mostly a result of
burning fossil fuels, changing land use, deforestation, and other activities. Research also
shows that among all human activities contributing to climate change, the construction and
operation of buildings are among the most energy, pollution, and resource intensive. In the
USA alone, buildings and their operations consume three billion tons of raw materials, 40%
of the nation’s total energy, and 77% of its electricity use each year. Materials utilized in
constructing buildings have high embodied energy, high carbon emissions, and high levels
of toxins and pollutants in their production cycle (UNEP 2007). It is estimated that
buildings contribute as much as one-third of total global greenhouse gas (GHG) emissions
primarily through the use of fossil fuels during their operational phase (UNEP 2009).
Vassigh (2018, 88)
Difficult but the most important part is to convince management to include

climate risk costs in the budget.
References
Australian Academy of Science. (2019). What is Climate Change? https://www.science.org.au/

learning/general-audience/science-booklets-0/science-climate-change/1-what-climate-change.
Accessed on January 9, 2019.
Budescu, D. V., Broomell, S. B., & Han-Hui, P. (2009). Improving communication of uncertainty
in the reports of the intergovernmental panel on climate change. Psychological Science.
Busch, T., Berger, S. G., & Paquin, R. (2012). Managing for climate risk. In D. R. Gallagher (Ed.),
Environmental leadership: A reference handbook (pp. 527–535). Thousand Oaks: SAGE.
Busch, T., & Shrivastava, P. (2011). The global carbon crisis. UK: Greenleaf Publishing.
Climate Accountability Institution. (2018). http://climateaccountability.org/carbonmajors.html.
Accessed on January 5, 2019.
Elijido-Ten, E. O. (2017). Does recognition of climate change related risks and opportunities
determine sustainability performance?. Journal of cleaner production, 141, 956–966. Accessed
on January 10 2017.
Financial Stability Board (FSB). (2018). Task force on climate-related financial disclosures,
https://www.fsb-tcfd.org/about/#. Accessed on January 20, 2019.
Gupta, J. (2016). Climate change governance: History, future, and triple-loop learning? Wiley
Interdisciplinary Reviews: Climate Change, 7(2), 192.
Intergovernmental Panel on Climate Change (IPCC). (2013). Climate change 2013: The physical
science basis. Cambridge: Cambridge University Press.
International Auditing and Assurance Standards Board (IAASB). (2019). Auditing standard which
is mandatory for independent auditors Practice statement 1010 the consideration of
environmental matters the audit of financial statements. http://www.ifac.org/system/files/
downloads/b007-2010-iaasb-handbook-iaps-1010.pdf. Accessed on January 14, 2019.
International Federation of Accountants (IFAC). (2015). IFAC and climate action: Letter of
support to the UN framework convention on climate change. https://www.ifac.org/
publications-resources/ifac-and-climate-action-letter-support-un-framework-convention-
climate-change. Accessed on January 12, 2019.
International Financial Reporting Standards Foundation. (2017, November). Wider corporate
reporting, Staff Paper, IASB Agenda ref 28B. https://www.ifrs.org/-/media/feature/meetings/
2017/november/iasb/wider-corporate-reporting/ap28b-update.pdf. Accessed on January 15,
2019.
IPCC. (2014). Climate change 2014: Synthesis report. Contribution of working groups I, II and III
to the fifth assessment report of the intergovernmental panel on climate change. In R.
K. Pachauri, & L. A. Meyer (Eds.), (p. 151). Geneva, Switzerland: IPCC. Retrieved September
5, 2017 from http://www.ipcc.ch/pdf/assessment-report/ar5/syr/SYR_AR5_FINAL_full_
wcover.pdf. Accessed on March 5 2019.
Jagd, J. T. (2017). TCFD = IFRS + Climate risks, revision and Regnskabsvæsen (Vol. 9). Karnov
Group.
Nikolaou, I., Evangelinos, K., & Leal Filho, W. (2015). A system dynamic approach for exploring
the effects of climate change risks on firms’ economic performance. Journal of cleaner
production, 103, 499–506.
Pickering, J., Jotzo, F., & Wood, P. J. (2015). Sharing the global climate finance effort fairly with
limited coordination. Global Environmental Politics, 15(4), 39–62.
Sakhel, A. (2017). Corporate climate risk management: Are European companies prepared.
Journal of Cleaner Production, 165(1), 103–118.
Sustainability Accounting Standards Board (SASB). (2017). Converging on climate risk: CDSB,
the SASB, and the TCFD the emerging alignment of market-based approaches to
climate-related financial disclosure September 2017. https://www.cdsb.net/sites/default/files/
sasb_cdsb-tcfd-convergingonclimaterisk-091317-web.pdf. Accessed on January 20, 2019.
TCFD. (2018). Core elements of recommended climate-related financial disclosures. https://www.
tcfdhub.org/home/recommendations. Accessed on January 10, 2019.
The International Integrated Reporting Council. (2017). IIRC responds to FSB task force on
climate-related financial disclosures. http://integratedreporting.org/news/iirc-responds-to-fsb-
task-force-on-climate-related-financial-disclosures/. Accessed on January 7, 2019.
UNEP PH. (2007). Building and climate change. Status Challenges And Opportunities. United
Nations, Environment Program, Sustainable Consumption and reduction Branch, illustrated
edition.
UNEP DTIE Sustainable Consumption & Production Branch. (2009). Buildings and climate
change: A summary for decision-makers. Paris, France: UNEP. Retrieved by CAKE http://
www.cakex.org/virtual-library/885.
Vassigh, S. (2018). Complexity of sustainable and resilient building design and urban
development. Sustainability and social responsibility of accountability reporting systems. A
Global Approach, Book Series: Accounting, Finance, Sustainability, Governance & Fraud:
Theory and Application, Springer Nature Singapore Pte Ltd.
10 K. T. Çalıyurt
Recommended Readings
Filling the information black hole: How are fossil fuel companies reporting on the stranded asset
risk? https://www.accaglobal.com/content/dam/ACCA_Global/Technical/oil-gas/ea-stranded-
assets.pdf.
Integrated reporting and climate change: A perfect marriage. https://www.ifac.org/global-
knowledge-gateway/business-reporting/discussion/integrated-reporting-and-climate-change.
Kiymet Tunca Caliyurt CPA, CFE, graduated from the Faculty of Business Administration at
Marmara University, Istanbul, Turkey. Her Masters and Ph.D degrees are in Accounting and
Finance Program from the Social Graduate School, Marmara University. She has worked as
Auditor in Horwath Auditing Company, Manager in McDonalds, and Finance Staff in Singapore
Airlines. After vast experience in private sector, she has started to work in academia. She is
holding CFE and CPE titles. Her research interests are in accounting, auditing, fraud, social
responsibility, corporate governance, finance, and business ethics, with a special interest in
aviation management, NGOs, women rights in business. She has been as visiting researcher in
Massachusetts University Amherst Business School. She is the Founder of the International Group
on Governance, Fraud, Ethics and Social Responsibility (IGonGFE&SR) which was founded in
2009. In 2009, she also founded the International Women and Business Group, which organizes
global, annual conferences. Kiymet has published papers, book chapters, and books both
nationally and internationally on fraud, social responsibility, ethics in accounting/finance/aviation
disciplines in Springer and Routledge. She is book series editor in Springer with the title
Accounting, Finance, Sustainability, Governance, and Fraud: Theory and Application, and book
series editor in Routledge with the title Women and Sustainable Business. Some book titles:
Emerging Fraud (with Sam Idowu), Corporate Governance: An International Perspective (with
Sam Idowu), Women and Sustainability in Business: A Global Perspective, Sustainability and
Management: An International Perspective (with Ulku Yuksel), Globalization and Social
Responsibility (with David Crowther), Regulations and Applications of Ethics in Business
Practice (with Dr. Jiang Bian), and Ethics and Sustainability in Accounting and Finance, Volume I.
She is acting as member in editorial board Journal of Financial Crime, Social Responsibility
Journal, International Journal on Law and Management, Journal of Money Laundering Control.
She is a regular speaker at International Economic Crime Symposium in Jesus College, Cambridge
University. She is member in editorial board Social Responsibility Journal, Journal of Financial
Crime, International Journal of Law and Management. She is a partner of Herme Consulting in
Trakya University Technopark.
Part II
New Approaches in Sustainability
Chapter 2
Sustainable Development in India:
A Case Study of Vedanta
Renu Jatana and Mehjabeen Barodawala
Abstract From the time of barter system to the modern era of plastic money, the
mankind has travelled an impressively long journey. Undeniably, “profitability” has
been the major source behind all the efforts being made by the business in particular
and society in general. This profit motive has not only benefited in the form of
growth and development of present and future generation but has also supported the
growth of cut throat competition and business rivalries which has threaten the
peaceful co-existence of business and society. Hence, business houses have realized
that they would have to raise over and above the profitability and take care of all
those associated with their survival in the society directly or indirectly. This real-
ization resulted in the evolution of the concept of Sustainable Development. This
research paper moves around developing an understanding about the Sustainability,
exploring into its concept and finding out its scope taking the case study of the
Vedanta which has demonstrated the sense of responsibility towards the upliftment
of common masses and protection of the environment and sustainable development
of the nation for today as well as tomorrow.

Keywords Sustainable development Economic growth Sustainability

Economic development Social welfare Social development and vedanta
2.1 Introduction
Economic growth, development and sustainability along with growing population

and its never gratifying needs and demand are a matter of great concern nowadays
for many countries including India. In order to satisfy the increasing demand of
population, greater exploitation of available resources is required which exert
R. Jatana
UCCMS, MLS University, Udaipur, Rajasthan, India
M. Barodawala (&)
ICSSR, MLS University, Udaipur, Rajasthan, India
e-mail: mehjabeenhussain@gmail.com

14 R. Jatana and M. Barodawala
additional burden not only on the aggregate resource base of the economy harming
the environment but also the need and interest of the future generation. In order to
overcome this problem, economists and business houses come up with an idea of
economic development along with sustainability which they termed as Sustainable
Development.
The concept of Sustainable Development is a process of economic development
which not only concentrates on the needs of present generation but also works to
safeguard the interest and ability to meet the needs for future generation. Hence, it
is assumed that the Sustainable Development is broader in scope and has greater
significance in comparison to Economic Development as it talks about environment
in general and exploitation, allocation and utilization of environmental resources in
particular.
The previous studies and research on sustainability seem heavily focused on the
developed western markets (ef. Birch 2003; Moon 2002; Regelbrugge 1999).
However, reliability of these findings is often inappropriate on emerging Asian
markets, and sustainability research focusing exclusively on the emerging market
setting is insufficient (Sharma 2002). Moreover, empirical evidences from existing
literature support the assumption that the firms in the emerging Asian markets are
lagging behind in their sustainability agenda in comparison of Europe (ef. Welford
2004). However, the potentiality of such incidental studies is wide in range, and
they are expected to contribute significant outputs. Hence, with a view to further
assimilate the sustainability agenda in the core business research as well as practices
and generate a solid base of empirical evidences, it is crucial to expand sustain-
ability research in India, which is not only one of the highly emerging Asian market
but also one of the fastest growing economies of the world. Indian economy has
been undertaking the planned efforts to speed up its economic development. This
necessitates assessing the state of Sustainable Development in India and the efforts
of the state of Indian economy in this direction. It is against this overall backdrop,
the present paper endeavours to the empirical evidences of Sustainable
Development with reference to Vedanta, the only Indian natural resources company
with a Sustainable Development Report.
The main purpose and objective of this paper is to know how the Vedanta has
achieved Sustainable Development; what specific activities, programs and strategies
it has set, devised and implemented for the same.
2.2 Sustainable Development in Indian Context
In recent years efforts have been made to map the terrain of Sustainable
Development in the way it is being practised and perceived in India. However,
consultants (Kumar and Balsari 2001; British Council et al. 2002) and non-profit
organizations (CSM 2001; PiC 2004) have mainly conducted studies exploring
corporate level Sustainable Development in India. Apart from a marginal instance
2 Sustainable Development in India: A Case Study of Vedanta 15
(Mohan 2001; Ruud 2002), Sustainable Development research with academic

rigour is still lacking in India. In order to have a comprehensive understanding on
the aspects of Sustainable Development perceptions and practices in India, it is
imperative to discuss influence that the nature of Indian economy—especially the
Economic Reforms of 1990s—has had on Indian Sustainable Development
practices.
2.2.1 Influence of the Indian Economic Reforms

on Sustainable Development
According to Chong (2002), the post independence history of Indian economy can
be divided into three phases. The first phase (1947–1966) was motivated by the
goal of building a solid industrial base (Sawhney 2004) and was characterized by
nationalization of heavy industries. This led to a highly centralized economy
(Davies 2002) and saw a rapid growth in capital intensive manufacturing plants.
While featuring protectionism for these home-grown industries (Nag et al. 2003),
the national 5-year economic plans did not have any provisions to offset environ-
mental damages, and as a result industrial base came at the cost of ecological
capitals (Sawhney 2004). However, corporate philanthropy practices flourished
during this period (Mohan 2001), contributing in building a firm base for the social
sustainability efforts in later years. The second phase of development (1966–1991)
shifted its focus back on the traditional agrarian society and exhibited the mod-
ernization of Agricultural Production Technologies (Chong 2002). Protectionism
continued, and MNCs faced many restrictions in their activities (Nag et al. 2003). In
the 1970s, India began to adopt industrial pollution control measures, and the first
set of environmental regulations began to emerge (Sawhney 2004). However,
implementation and enforcement of these laws have not been comprehensive. The
Ministry of Environment and Forests was established at the wake of the Bhopal
disaster in 1984. The Environmental Protection Act was enacted in 1986, followed
by a number of related environmental regulations (Divan and Rosencranz 2001).
The third phase in 1991 brought great economic reforms in India, with the home
market finally opening up to the world economy (Chong 2002). This liberalization
also the government officially including Sustainable Development in the growth
agenda (Sawhney 2004). As a result, domestic environmental protection policies to
revert the damages done over the previous four decades were formalized in an
Environmental Action Plan (Sawhney 2004). India’s accession to the World Trade
Organization (WTO) meant that Indian firms also thrived to meet international
benchmarks in their operations, products and processes (Ghoshal et al. 2001).
Greater level of privatization thus resulted in increased foreign trade, meeting the
international ecological and social sustainability standards.
2.2.2 MNCs and Sustainable Development in India
Empirical evidence also shows conflicting evidence on the role of MNCs in this
context. Ruud (2002) opines that the multinational corporations in India are the
drivers of the sustainable development agenda. They act in a more environmentally
sustainable manner than local companies do and follow stricter standards in
accordance with their headquarters in the West. As a result, sustainable business
practices often threaten the competitive advantage for the MNCs that are more
responsible. However, Mohan (2001) finds no discernible differences between the
sustainable development policies of MNCs and local companies in India. This
finding is corroborated by Sawhney (2004).
The survey by Kumar and Balsari (2001) reveals the existence of the general
perception that “MNCs are not giving their due to the Indian society” (Kumar et al.
2002, p. 1). Thorpe and Prakash Mani (2004) essentially convey the same message
in a more neutral tone, saying that a MNCs in India view sustainable development
only as a risk management issue, with little integration in the core management
practices. Another study shows that MNCs in India only practise sustainable
development partially and hardly engage in policies and practices in tune with their
parent companies in Europe. Kumar et al. (2002) opined that very few MNCs
actively pursue sustainable development measures and reported that the public
perception of MNCs concerning trustworthiness in general is very low. In fact,
MNCs rated responsible in India were graded upon their good quality products and
services’, ‘trusted brand’, ‘good company’ and ‘personal knowledge about the
company’ and not based on the social and environmental performances (Kumar
et al. 2002). To sum up, although there have been some specific initiatives taken by
certain corporations, the propagation still seems restrained and chaotic. Therefore,
the roles of (both local and multinational) corporations in India with relation to
sustainable development remain ambiguous, vague, controversial and unsolved.
The existence of conflicting evidences (e.g. Ruud 2002; Kumar and Balsari 2001)
among studies from Indian companies clearly shows that their role in the context of
sustainable development is yet to be determined.
2.3 Vedanta and Sustainable Development
Vedanta Resources PLC is a London Stock Exchange listed, globally diversified

and natural resources company with interests in zinc, lead, silver, copper, iron ore,
aluminium, power, and oil and gas. The company is principally owned by Indian
billionaire Anil Agarwal through Volcan Investments, a holding vehicle with a
601.7% stake in the business. Its operational footprints span four continents
encompassing India, Zambia, Namibia, South Africa, Liberia, Ireland, Sri Lanka
and Australia.
2.3.1 Company’s Brief History
The company was established by Anil Agarwal in Mumbai (than Bombay) in 1976
by the name Sterlite Industries. Later on, in 1986, he endowed Vedanta Resources
bringing together a variety of businesses owned by the family. It was first listed on
London Stock Exchange in 2003 when it raised $876 million through an Initial
Public offering. Thereafter in 2006, it acquired Sterlite Gold, a gold mining
business. It raised an additional $2 billion through an ADR issue in 2007. In 2008,
it bought $26 billion of the assets of Asarco, a copper mining business. In
December 2011, it announced the US$8.67 billion acquisition of Cairn India, a
subsidiary of Crain Energy, heralding its foray in the oil sector.
2.3.2 Company’s Vision and Core Values
Vedanta is a globally diversified natural resources company with low-cost opera-

tion. With the business model of growth, constant value creation and improved
operations, the company’s vision is focused towards building the wealth of the
shareholders and sustainably engaging the community they operate in.
Accountability being a core characteristic of Vedanta’s work philosophy, their
long-term business approach adopts best practices towards fulfilling vital customer
needs in a safe and responsible manner. The company demonstrates world-class
standards of governance, safety, sustainability and social responsibility.
2.3.3 Sustainable Development and Community
The organization seeks to add and share value through everything that they do. As a
business, they make a considerable economic impact; through employment,
payment of taxes, royalties and other contributions to local, state and national
governments. They also build local infrastructure that benefits local communities in
the form of roads, schools and healthcare centres.
They play a significant role in growing local skills and in the development of
local infrastructure, including roads, sanitation, education and medical facilities.
They made a community investment of Rs. 160 crores in 2015–2016, reaching
around 1.75 million people and providing support for schools, hospitals, health
centres and farmers. They also contributed Rs. 20,600 crores to the Indian
exchequer through direct and indirect taxes, royalty and oil tax.
As a responsible corporate citizen, the Company focuses on community devel-
opment through its CSR activities. Their community activity is delivered at a local,
regional and state/national level to ensure that the business is able to effectively
maximize its impact in facilitating socio-economic development. The majority of
their initiatives are carried out in collaboration with community organizations and
are developed in partnership utilizing a needs-based approach to community
investment, underpinned by the use of ‘Public–Private–People–Partnership’ (4Ps)
model. Fundamentally, they work to help communities identify their priorities
through externally delivered needs assessment programs and then work closely with
them to design programs that seeks to make progress towards meeting these.
In order to maximize the outcomes and impacts that the business can have, they
focus on the following seven key areas through their community investment
activities.
• Health, Nutrition and Sanitation
These activities include the delivery of medical infrastructure such as the hos-
pitals that run across the group. These hospitals are supported by medical
outreach services, which include mobile health vans and medical outposts to
enable isolated ruler communities’ access to medical services. Ten Ruler Health
Posts and 16 Medical Health Units and other outreach programs covered 1.8
lakh people in year 2015–16.
• Education
The work for children’s education is targeted at the pre-school level, particularly
through VBCA project-Integrated Child Development Scheme (ICDS), which is
the centrally sponsored scheme of the government of India aimed at providing
services to pre-school children in rural, tribal and slum areas in an integrated
manner so as to ensure their proper growth and development. In addition to
pre-school support, they also support a mid-day meal programme through eight
centralized kitchens, aimed at improving the health status of children from
Class I to VIII in government-aided schools as well as encouraging regular
attendance at school.
• Sustainable Livelihood
Farmers are being educated about yield improvements in order to maximize
their returns by providing access to high-yield seeds and fertilizers, soil testing,
watershed management and cultivation. Vocational training to youth in
employable skills imparted through BPO Industrial Stitching benefited more
than 770 youth.
• Women Empowerment
The company is able to assist in creating sustainable development through
supporting initiatives that have women‘s empowerment at their heart. In addi-
tion to bringing women together in collaborative forums, the group dynamics
and collective spirit create informal structures of support helping to create
sustainable small businesses as well as enhancing the bargaining power of
members. The programs cover over 22,000 women including a federation
‘Subalakshmi’ for 2700 women.
• Community Asset Creation
The initiatives enable the planning and development of infrastructure to improve
the lives of communities surrounding the operations, for example creating
several community welfare assets, which include building roads, community
centres, wells, classrooms and drainage network across the areas of operation.
The program benefits potentially 1.7 lakh people for whom the assets have been
created.
• Bio-investment
Restoring and improving natural systems is key to the Bio-Investment
Programme. Under bio-investment initiatives, the leftover food waste is con-
verted into organic manure through the organic waste converter plant at mid-day
meal kitchens. Other initiatives include: watershed management, social forestry,
cattle breed improvement and cash crop framing.
• Integrated Village Development
The core objective of integrated Village Development Programme (IVDP) is
enabling the holistic development of villages surrounding the operations.
Under IVDP, villages are identified for assistance, and in collaboration with
NGOs, government authorities and the village, an integrated development plan
is prepared. The plan usually results in the development of infrastructure,
including health and education support, along with environmental planning and
the implementation of Sustainable livelihood programmes. From commence-
ment of the IVDP to handover, the process takes between 3 and 5 years. This
project has matured, and now presently, their intervention is in 2 villages
covering 4000 people.
Sustainable development is a core element of the company’s guiding strategy
and supports their growth as a diversified natural resources company. This includes
the activities they undertake across the operations to ensure the health and safety of
their people; how they make valuable economic and social contributions to com-
munities and regions where they operate; and how they manage environmental
footprint.
Their active engagement and deep understanding of the countries, communities
and environments where they operate, combined with their Tier 1 assets, form the
foundation of their business strategy and position their group to create value for
their shareholders and other stakeholders.
Sustainability model of the company was developed in financial year 2011–2012
which comprises four pillars—Responsible Stewardship, Building Strong
Relationships, Adding and Sharing Value and Strategic Communications—each
designed to support their long-term sustainability as a world-class diversified nat-
ural resource company, providing superior returns to their shareholders. These four
pillars capture the processes and activities they undertake to ensure their future
(Fig. 2.1).
• Responsible Stewardship
Responsible Stewardship means having effective and appropriate business
processes, including robust compliance and risk management, protecting the
health and safety of the employees and responsibly managing the environmental
and social impacts.
Fig. 2.1 Sustainable developmentmodel. Source http://sustainabledevelopment.vedantaresources.

com/sustainable-development/approach-and-strategy.html
• Building Strong Relationships

Building strong relationships captures the engagement with the people and
organizations that are interested in the business. Doing this effectively can lead
to the identification of new areas where they can find and unlock additional
value as well as equipping them to foresee and appropriately main challenges.
• Adding And Sharing Value
Adding and Sharing Valueencapsulates the direct and indirect positive economic
impact they make, by investing in people through employment, building
infrastructure, developing technology and the payment of taxes, royalties and
other payments to local, state and national governments. Additionally, it cap-
tures the value they offer by turning the knowledge and ideas sourced through
engagement with their stakeholders into specific projects, including collabo-
rating with governments and NGOs to bring value to the communities that host
their operations.
• Strategic Communications
The Strategic Communication pillar interlocks with the other three pillars of the
model and is the guiding principle which enables the organization to engage
with their stakeholders in a transparent dialogue. This pillar is the vital element
of sustainable development, in implementing and strengthening their ‘licence to
operate’ efforts. This pillar further reflects their commitment to becoming a more
transparent and responsible corporate citizen.
The fourth pillar Strategic Communications was added in financial year 2014–
2015, which reflects their commitment to becoming a more transparent and
responsible corporate citizen. This also reflects their emphasis on their principles of
community dialogue and mutual respect, including free prior informed consent to
access natural resources.
Governance and Sustainable development are at the core of Vedanta’s strategy
and they provide a platform to promote equal opportunities, with a focus on
Education, Healthcare and Women Empowerment. The approach of community
development is holistic, long term, integrated and sustainable. The community
engagement process, alongside baseline studies and needs assessments, is embed-
ded in the organization through the Sustainability Framework which is aligned to
International Standard like IFC, ICMM and OECD guidelines.
The Vedanta sustainability Assurance Program (VSAP) is used to monitor the
effectiveness of sustainability framework implementation at a group level. The
company positively impact livelihoods, through healthcare, education and skill
development platforms, drawing on the company’s ‘Social Licence to Operate’. The
company demonstrates world-class standards of governance, safety, sustainability
and social responsibility, with a strong commitment to People, Planet and
Prosperity. Their key programmes are the ones in which they support local
governments. In 2015–2016, the company partnered with over 200 NGOs, schools,
academic and government bodies to provide platforms promoting education,
livelihood, healthcare, women empowerment and biodiversity conservation.
Vedanta invested INR 160 crores, to benefit 1.75 million people in India–Africa in
financial year 2015–16.
The company’s Sustainable Development model benchmarks global best prac-
tice and helps them to uphold the consistency in the community investment
approach. The approach draws from UN’s Millennium Development Goals
(MDGs) and at the same time aligns with the development agenda of the country
and resonates with Vedanta’s core values of trust, entrepreneurship innovation,
excellence, integrity, respect and care, aligns with the development agenda of India.
2.4 Conclusion
For bringing back and maintaining the general balance in the economic and social
arena, it is evident to think deeply and act wisely about sustainable development.
Every business house owes some responsibility towards the society, nation and
world in general which provide it with all human, material and natural resources.
Considering the long run growth and sustainable development following the norms
of Sustainability, devising new policies and effective implementation is inevitable

to bring and sustain a balance between corporate world and society, present gen-
eration and upcoming generation, man and nature.
As far as the Vedanta is concerned, it has gone a long way in fulfilling its duty
and responsibility towards the society and the nation by embedding sustainability in
the DNA of company. It has reached the masses to elevate their lives, to nurture
their dreams and to enhance their skills justify the philosophy of the founder,
“businesses flourish, grow and evolve within communities, so corporate have a core
responsibility to contribute substantially to the welfare of the community that has
supported them to grow and prosper.”
References
Birch, D. (2003). Corporate social responsibility: Some key theoretical issues and concepts for
new ways of doing business. Journal of New Business Ideas and Trends, 1(1), 1–19.
BritishCouncil, UNDP, Confederation of Indian Industries, & PricewaterhouseCoopers. (2002).
Corporate Social Responsibility Survey India 2002. New Delhi.
Chong, L. (2002). Business environmental and opportunities in India: Bangalore and its
surrounding regions, international management series. St.Gallen: St. Galler Business Books
and Tools.
CSM. (2001). Corporate social responsibility: Perceptions of Indian business. Kolkata: Centre for
Social Markets.
Davies, R. (2002). Corporate citizenship and socially responsible investment: Emerging challenges
and opportunities in Asia. Paper Presented at the Conference of the Association for
Sustainable and Responsible Investment in Asia, July 10, 2002. Honk Kong.
Divan, S., & Rosencranz, A. (2001). Environmental law and policy in India: Cases, materials and
statutes (2nd ed.). New Delhi: Oxford University Press.
Ghoshal, S., Piramal, G., & Budhiraja, S. (2001). World class in India: A casebook of companies
in transformation. New Delhi: Penguin Books India.
Kumar, R. D. M., & Balsari, V. (2001). Altered images: The 2001 state of corporate responsibility
in India poll. New Delhi: Tata Energy Research Institute.
Mohan, A. (2001). Corporate citizenship: Perspectives from India. Journal of Corporate
Citizenship, Summer (2), 107–117.
Moon, J. (2002). Corporate social responsibility: An overview (pp. 385–408). Europa:
International Directory of Corporate Philanthropy.
Nag, G., Ganesh, S. R. P., & Sharma, B. (2003). Through the eyes of an insider: Case study of an
MNC subsidiary in an emerging economy. Thunderbird International Business Review, 45(4),
481–491.
PiC. (2004). Third Report on Corporate Involvement in Social Development in India, Partners in
Change. New Delhi.
Regelbrugge, L. (1999). Promoting corporate citizenship: Opportunities for civil society and
business engagement. Bloomfield, CT: CIVICUS and Kumarian Press.
Ruud, A. (2002). Environmental management of transnational companies in India: Are TNCs
creating islands of environmental excellence in a sea of dirt? Business Strategy and the
Environment, 11(2), 103–118.
Sawhney, A. (2004). The new face of environmental management in India. Hants, UK and
Burlington, VT: Ashgate Publishing.
Sharma, S. (2002). Research in corporate sustainability: What really matters? pp. 1–31.
Welford, R. (2004). Corporate social responsibility in Europe and Asia: Critical elements for best
practice. Journal of Corporate Citizenship (13), 31–47.
Renu Jatana was born in Jaipur, India, in 1960. She obtained her M.Com and M.Phil. degrees
from University of Rajasthan, Jaipur. She obtained Ph.D. in commerce from Mohan Lal Sukhadia
University, Udaipur, Rajasthan. Presently, she is the Dean and Faculty Chairman at Faculty of
Commerce, ML Sukhadia University, Udaipur. She has attended and participated two times in
International Conference held at London Metropolitan University, London. She has edited four
volumes of ‘Social Corporate Responsibility’ along with Prof. David Crowther. She has
successfully guided 32 Ph.D. scholars and has over 34 years of teaching experience in commerce.
She has also completed major research project of ICSSR, New Delhi. Recently, she has visited
Thailand for research work on ‘Leadership Qualities of Women executives in India and Thailand’.
Her area for teaching interest includes Business Economics, Banking and Finance, and
International Trade and Finance. She has published a number of research papers and articles in
reputed Indian and International Journals. At present, she is Course director of Master of
International Business. Prof. Jatana is married—a girl and a boy’s mother.
Mehjabeen Barodawala was born in Udaipur, India, in 1988. She is Post-Doctoral Fellowship
scholar from Indian Council Social Science Research in the Department of Banking and Business
Economics at Faculty of Commerce, Mohan Lal Sukhadia University, Udaipur. She has completed
her Ph.D. under the able guidance of Prof. Renu Jatana on the topic ‘A Study on Impact of Various
Promotional Techniques towards Demand Generation among Children’ in 2016. She received
master’s degree in commerce in 2013 and master’s degree in international business in 2011 from
MLS University, Udaipur. She is NET qualified in commerce in July 2012. She has seven years of
teaching experience as a lecturer in the Department of Banking and Business Economics. She also
has interest in the field of international business studies and do take lectures on India’s foreign
trade, international business environment and export-import procedure and documentation. She
has a textbook on Indian banking system published in her name. She has a number of research
papers being published in national and international Journals. Currently, she is also the Director of
The Udaipur Urban Co-operative Bank Ltd., Udaipur. Dr. Barodawala is married—a boy and a
girl’s mother.
Chapter 3
Implementation of Lean Management:
Sustainability in the Construction
Industry: The Case of Brazilian
Companies
Alberto Eduardo Besser Freitag, Osvaldo L. G. Quelhas,

Sergio Luiz Braga França and Marcelo Jasmim Meiriño
Abstract The purpose of this paper is the development of a conceptual framework

for integration of practices of the lean management philosophy in the construction
industry, known as lean construction, with the lean tools that contribute to sus-
tainability and their deployment phases. A mixed research strategy was used: at the
qualitative phase, a systematic review of the literature was conducted correlating
lean, construction, and sustainability; at the quantitative phase, 140 professionals
involved with the civil construction sector of the State of Rio de Janeiro, Brazil,
were interviewed between September and December 2015, and 60 responses were
obtained. The results showed that most of the respondents have more than 20 years
of market experience, 51.7% with graduate degrees. Despite this, only 43.3% of the
companies know the concept of lean construction and only 28.8% adopt it, which
reinforces the importance of dissemination of lean construction and sustainability
themes in technical schools, universities, and in the labor market. The practical and
academic implications of this study are the diffusion of both themes among the
construction industry. The study is also useful for researchers, who can explore
several gaps from the results found, in particular the lack of information which
unfolds on slow technological diffusion. The originality of this study is the inte-
gration of practices of lean construction, with the lean tools that contribute to
sustainability and their deployment phases.
Keywords Lean management Lean construction Waste reduction

Sustainability Productivity
A. E. B. Freitag (&) O. L. G. Quelhas S. L. B. França M. J. Meiriño

Fluminense Federal University, Rio de Janeiro, Brazil
e-mail: abesser@uol.com.br

26 A. E. B. Freitag et al.
3.1 Introduction
The strategic map of 2013–2022 for the Brazilian Industry (CNI 2013) is a study
whose objective is to point the way that industry and Brazil should go in the next
decade to increase the levels of productivity and efficiency and achieve a high
degree of competitiveness, while respecting sustainability criteria. Sustainability
has a direct relationship with the productivity and innovation. Productivity gains
reduce the use of natural resources and eliminate waste. Innovation introduces new
products, processes, and business models that generate less environmental and
social impact.
The productivity of the construction industry is one of the economic indicators
of success, since this sector has a substantial impact on gross domestic product
(GDP) and employment. Studies estimate that a 10% increase of productivity in the
construction industry would result in an improvement of 2.5% of GDP (Ibrahim
et al. 2010).
Brazil’s productivity is still low, compared with USA and European countries
(Bloom and Reenen 2010), and one of the explanations is largely based in the use of
management practices, such as the adoption of lean manufacturing. Energy effi-
ciency is strongly associated with a better level of company management, probably
because good management practices (such as lean manufacturing) tend to save on
energy consumption (Santos et al. 2019).
The construction sector is one of the biggest consumers of energy and natural
resources, as reported in the study Vision Brazil 2050 (CEBDS 2012), inspired by
the Vision 2050 Project—the new agenda for business, of the World Business
Council for Sustainable Development (WBCSD). The two studies have in common
the purpose of presenting the vision of a sustainable future and of how it is possible
to reach it from nine basic themes, one of them named “buildings and built envi-
ronment.” Construction supply chain is responsible for 75% of the extraction of
natural resources, especially water, minerals, and timber, generating about 50% of
the municipal solid waste. The figures of material waste are high and may reach
40%, according to some estimates.
Labor productivity is considered low, and most Brazilian constructions use
inefficient tools and methods and employ labor almost completely without quali-
fication. The exception occurs in large-scale business ventures, mainly in the
capital. The actions, which are intended to be developed until 2020, under the
Vision Brazil 2050 study (CEBDS 2012), include “Reassess the constructive
methods to seek ways to reduce the generation of waste during the entire lifecycle
of the building.”
Considering the importance of the construction sector for the economy and the
challenges raised in the light of the impacts arising from the extraction of natural
resources and waste generation, it is necessary that construction companies from the
State of Rio de Janeiro adopt modern management practices such as lean man-
agement, known as lean construction in the construction industry, to increase
productivity, contributing to a greater sustainability.
3 Implementation of Lean Management: Sustainability … 27
Numerous studies have been developed regarding the integration of lean and
sustainability in the construction industry, compiled by Freitag et al. (2017). There
are also researches using Liker’s Toyota model (2004) applied to the sector. But it
was not found, so far, a study which integrates practices of the lean management
philosophy in the construction sector, with the tools/lean techniques that contribute
to sustainability, considering its deployment. This work aims to fill such a gap, and
it is structured in five sections. This first one contains the context that led to the
development of the study, the second presents a review of the literature, the third
describes the methodology, the fourth brings the results and discussion, followed by
the conclusions in the fifth section and appendix.
3.2 Literature Review
Sustainability and lean concepts can be applied to the construction industry, to help
waste minimization. Koranda et al. (2012) examined projects of different sizes and
in different environments in the Midwest of the USA to determine which aspects
hamper the integration of sustainability and lean concepts in the region. A model
for planning the entire construction process was established so that waste can be
reduced and the integration of lean concepts and sustainability is more feasible.
Based on case studies, various aspects of waste in construction projects have been
recognized, and a comparison between the interaction of lean concepts and sus-
tainability was documented. In Koranda’s et al. (2012) model, performance indi-
cators are a prerequisite for designers and contractors to be able to integrate lean
and sustainability concepts.
Ogunbiyi et al. (2014) presented an exploratory study of existing literature and
the results of the use of a questionnaire with construction professionals based in the
UK to explore the contribution of the application of lean construction techniques on
sustainable construction. The global perspective of building industry professionals
showed that 14 benefits are perceived due to the integration of lean construction
principles and sustainable construction within the construction industry.
Regarding the level of use of lean principles/techniques to enable sustainability
in construction companies, 16 principles/techniques were found, in descending
order of level of use: (1) just-in-time, (2) visualization tools, (3) daily huddle
meetings, (4) Value analysis, (5) Value stream mapping, (6) Total quality man-
agement, (7) Fail safe for quality, (8) 5S, (9) Total preventive maintenance,
(10) First run studies, (11) Last Planner, (12) Concurrent Engineering, (13) Pull
approach, (14) Kanban, (15) Kaizen, and (16) Six Sigma.
Ogunbiyi et al. (2014) identified 12 areas of connection between lean con-
struction and sustainability.
The objective of Firmawan et al. (2012) was to present practical examples of
value engineering and lean construction application in the project of a green
building and to evaluate qualitatively its benefits in terms of environmental impact
and waste minimization. The technique of function analysis system was conducted
applying a complete Function Analysis System Technique (FAST) diagram as

proposed by Grönqvist et al. (2006). Since the purpose of a green building concept
is to create a sustainable building, protecting the environment is considered as the
highest order function.
Therefore, the main path of the FAST diagram is divided into two distinct issues:
lean construction practices and green design. Firmawan et al. (2012) identified
critical functions for green design features and practices in place that maximize the
concept of lean construction, in comparison with the conventional construction.
Lean construction practices were divided into three groups: reduce waste, reduce
emissions, and reduce water.
Sustainable construction of houses in the three dimensions of economic, envi-
ronmental, and social effects is reachable through technologies and innovations.
Nahmens and Ikuma (2012) propose the use of lean construction as a viable and
effective strategy, using several case studies to show the effect of lean on the triple
bottom line of sustainability in construction of modular homes. Each case study
highlights a dimension of sustainability. Lean construction resulted in a significant
environmental impact, reducing material wastage at 64%, a significant social effect,
reducing or eliminating the main security risks due to excessive force, bad posture,
workers hit, and a significant economic effect by reducing production hours in 31%.
Studies have shown that sustainability and lean construction complement each
other in building projects. By applying lean principles, the utilization of man power
and materials is improved, namely the work is carried out more efficiently and only
the materials that are needed are used with little or no waste (Harper and Hazleton
2014).
The lean manufacturing of autoclaved aerated concrete (AAC) is a highlight in
the modern industry of building materials (van Boggelen 2011). The waste
reduction and energy reuse represent a serious potential for the AAC industry
contribution to a sustainable future.
The goal of Arayici’s et al. (2011) research was to develop a lean project practice
through the adoption and implementation of Building Information Modeling (BIM).
The BIM implementation approach used a socio-technical vision that not only
considers the implementation of the technology, but also the socio-cultural envi-
ronment that provides the context for its implementation. As a result of BIM
technology adoption, Arayici et al. (2011) reported efficiency gains obtained
through pilot projects and the project elaboration process was improved through
elimination of waste and generation of value.
Tykkä et al. (2010) identified innovative companies in six European countries
which use molded wood in the construction industry and assessed its sources of
innovation. The common factor that leads these companies to innovate are business
opportunities that arise from demographic changes in the environment outside the
company, such as environmental sustainability and affordable housing for
low-income groups. Companies of case studies acknowledged that the traditional
project-based approach and on-site construction is an incongruity, and established
internal prefabrication, including the development of processes based on lean
production to ensure quality, as well as effectiveness.
Currently, most management approaches from engineering are focused on the

outside world, that is, everything that is visible (structures–processes–result). This
situation is creating a low sustainability of these approaches and tools, because it
forgets central aspects of individual and collective person behavior. Pavez et al.
(2010) state that if lean construction wants to evolve to become a practice of
effective management, it must include some elements in order to harmonize tech-
nical and human development within an organization or project. Pavez et al. (2010)
cited Tatum (2011), who defined the four main elements of construction engi-
neering knowledge, which describe the knowledge base for a new engineer,
including:
• Technical fundamentals—if the next generation of construction engineers gain
knowledge of sustainability and lean construction as additional technical fun-
damentals in higher education programs, the acceptance of these practices will
accelerate within the construction industry while the requirements of efficiency
and sustainability can be achieved;
• Resources invested in construction sustainability and lean construction may
affect materials, tools and equipment that are reusable or consumables.
Consumption materials are materials that have a single use. All construction
projects use consumption materials, but to maintain the principles of lean and
sustainability, less waste and more reusable materials, tools, and equipment help
to achieve these results.
Andújar-Montoya et al. (2015) explain that Six Sigma is a methodology based
on statistics that provides a structured model to organize and implement strategic
initiatives of process improvement to achieve reductions in process variability. It
has been used to improve the sustainability and quality in prefabricated composite
structures, applying Six Sigma to improve quality management, and at the same
time reduce energy consumption during the construction, as well as pollution,
noise, and waste.
3.3 Methodology
To facilitate the discussion of characteristics of mixed design researches, case of

this study, a notation system appears extensively throughout the literature of mixed
methods, with “quan” to indicate quantitative methods of a study and “qual” to
indicate qualitative methods (Creswell and Clark 2011). The short form aims to
convey an equal status of the two methods (i.e., both abbreviations have the same
number of letters and same format).The relative priority of both methods in the
context of a particular study is indicated through the use of capital and lowercase
letters—that is, the prioritized methods are indicated with capital letters (i.e.,
QUAN and/or QUAL) and secondary methods with lowercase letters (i.e., quan
and/or qual). For the purpose of this study, a mixed research strategy was adopted,
with a qualitative phase (qual) followed by a quantitative (QUAN), in six steps,

described below:
1. qual data collection—a search on Scopus scientific basis was held, initially with
the search phrase (construction OR building AND industry AND lean OR lean
construction), with results limited to articles and reviews, in which 299 records
were identified. Whereas from 2010 there is a balance in the annual distribution
of documents, and that almost half of the records (144) are available from that
year on, it was decided to limit documents analysis from 2010. In this context,
for the phrase (construction OR building AND industry AND lean OR lean
construction AND sustainability), 12 records were identified;
2. qual data analysis—analysis of documents using the Preferred Reporting Items
for Systematic Reviews and Meta-Analyses (Prisma) method (Moher et al.
2009). After the reading of abstracts and elimination of incomplete or
non-adherent records, 11 documents remained, which were included in the
literature review of this study;
3. Develop an instrument—a research instrument (survey) for data collection was
built, considering some of the 144 documents identified from 2010. This
questionnaire is a self responded instrument, i.e., without interference of any
interviewer in obtaining the information. The first part of the questionnaire
aimed to obtain information about the basic profile of the company and of the
respondents. In the second part of the questionnaire, respondents were asked to
evaluate 35 attributes related to Liker’s Toyota model (2004), in terms of the
extent to which they should be implemented in companies so that the lean
management philosophy can be adopted by the construction industry of the State
of Rio de Janeiro. To evaluate the practices, a Likert scale of 5 points and “I
don’t understand” (DU) was used;
4. QUAN data collection—the non-probabilistic sample was formed by 140 pro-
fessionals of five organized groups from the Rio de Janeiro State involved with
activities related to the construction industry: (1) companies belonging to the
civil construction industry union from the State of Rio de January, (2) compa-
nies from the materials, technology, productivity, and quality commission,
(3) executive education courses for the civil construction sector, promoted by
the Federation of industries of the State of Rio de Janeiro, (4) experts, con-
sultants, and technicians of service companies for the construction sector, and
(5) college professors. The data were collected by electronic means (e-mail) and
attendance form, between the months of September and December 2015.
Responses were obtained from 60 respondents;
5. QUAN data analysis—the R software was used for data analysis. After survey
and data organization, the instrument reliability was validated using ordinal
alpha, followed by a content and constructor validation, by means of
Kaiser-Meyer-Olkin (KMO) and Bartlett’s sphericity tests. An exploratory
factor analysis was held;
6. Interpretation—a ranking of 35 lean construction practices was produced, cal-

culating the estimates of proportions of concordant to each of the practices and
their respective 95% confidence intervals.
3.4 QUAN Data Analysis
This work makes use of exploratory data analysis techniques, to investigate latent
features on the data that indicate possible patterns, trends, or models (de Freitas
et al. 2008). These techniques are used in the data descriptive analysis which must
be performed after collection and typing of data in a suitable database. The work
also made use of multivariate data analysis, which refers to all statistical methods
which simultaneously analyze multiple measures about each individual or object
under investigation (Hair et al. 2009). There are multivariate techniques, solely
designed to deal with multivariate issues such as factorial analysis, which can be
exploratory or confirmatory, and identifies the underlying structure of a set of
variables. Data were analyzed using the software R (R Core Team 2015).
Descriptive statistics were used, including frequencies, percentages, and sets (most
frequent value in the sample), to describe the characteristics of the analyzed sample.
In order to determine the reliability, validity and objectivity (terminology used to
verify the internal consistency of data and check the replicability of questionnaires)
of the collected data, some specific tests were applied as ordinal alpha, the
Kaiser-Meyer-Olkin (KMO) criterion and Bartlett’s sphericity test. For the appli-
cation of factor analysis, the KMO (KMO > 0.50) test and Bartlett’s sphericity test
were used. The main objective of the factor analysis in the case of this work was to
explain the correlation or covariance between a set of variables, in terms of a
smaller number of non-observable variables. These non-observable variables or
factors are calculated by linear combination of the original variables.
The ordinal alpha reliability coefficient proposed by Zumbo et al. 2007) con-
siders as acceptable limit values greater than 0.6. For measurements involving
ordinal data (qualitative data that have a natural ordering of their categories), the
ordinal alpha estimates more precisely the internal consistency than the Cronbach’s
alpha (Corrêa 2012), because it relies on a polychoric correlation matrix (a bivariate
association measure used when the two variables are ordinal with three or more
categories) instead of a Pearson covariance matrix (covariances matrix calculated
for quantitative data). An attempt was made to adjust a confirmatory factor analysis
to check how well the practices were allocated to the four layers of Liker’s Toyota
model (2004); however, due to the small number of experimental units, it was not
possible to proceed with such research. An exploratory factor analysis was then
performed for ordinal data. To determine the number of factors the Kaiser criterion
was used. A Varimax rotation was used to obtain the final factors. The Varimax
rotation is an orthogonal rotation method and wants that, for each major component,
there are only a few significant weights and all the others are close to zero, that is,
the objective is to maximize the variance between the weights of each major
component, hence the name Varimax. The variables with factorial loads (weights of
variables within each factor in factor analysis) smaller than 0.5 or commonalities
(portion of the variance that a variable shares with all other variables considered, is
also the proportion of variance explained by common factors) smaller than 0.25
were excluded (Filho Salvador-silva and Teixeira 2014). A significance level of 5%
was used for all hypothesis testing.
3.5 Results and Discussion
Most of the 60 respondents (33.3%) have more than 20 years of market experience
and high schooling, i.e., 51.7% with graduate or master’s degree or doctorate.
Bloom and Reenen (2010) state in their study that education is strongly correlated
with high scores in management, if the level of education is considered of both the
managers and the workers, whereas the vast majority of 60 respondents have at
least one undergraduate degree, and it is plausible that the managers are more likely
to be aware of the benefits of modern management practices such as lean
manufacturing.
The companies where the respondents work are mostly midrange (41.7%), have
an operating time of more than 20 years (43.3%) and are located in the State of Rio
de Janeiro (85%). Whereas just near half the companies have more than 20 years of
operation and are medium sized, it is supposed that they have a consolidated
management structure, facilitating the absorption of new knowledge of manage-
ment philosophies like lean construction, both at the management level, as in the
shop floor level.
However, 43.3% of companies know the concept of lean construction, but only
28.8% of them make use of this concept. Of the companies that reported using lean
construction, 47% are medium sized and 35% have more than 20 years of
operation.
The fact that less than a third of the respondent companies adopt the lean
management philosophy, despite having proven operational experience and staff
with good education, supports the perceptions of Bloom and Reenen (2010), that
the slow evolution of management practices—“scientific management” of Taylor,
mass production of Ford, M format corporation of Sloan, Deming quality move-
ment and “lean production” of Toyota—suggests that management practices have a
resemblance to process technologies that diffuse slowly over time.
The slow technology diffusion can have various causes, but a well-studied factor
is the information. New management practices are often complex and of difficult
introduction without the help of staff or consultants with previous experience of
these innovations. The acquisition of skills on modern management practices passes
necessarily by education, namely by the teaching of the concepts and tools of lean
construction, and its integration with sustainability, at technical schools and
universities.
To achieve the purposes of this research, a table integrating concepts of lean and
sustainability in construction, from the literature review (Table 3.1), was initially
devised. Then a ranking of lean construction practices was structured and finally, a
conceptual framework was proposed, which integrates practices of the lean management
philosophy in construction, with lean tools/techniques that contribute to sustainability.
Table 3.1 Integration between lean and sustainability in construction industry, based on literature
review
References Integration between lean and sustainability in construction industry
Koranda et al. (2012) Proposal of a model, where performance indicators are the essential
condition so that designers and developers can integrate lean and
sustainability concepts
Ogunbiyi et al. (2014) 14 benefits are perceived due to the integration of lean construction
principles and sustainable building; 16 lean principles/techniques
were found to enable sustainability in construction companies; 12
areas of connection between lean construction and sustainability were
identified
Firmawan et al. Identification of critical functions for green design features and
(2012) practices in place that maximizes the concept of lean construction, in
comparison with the conventional construction. Division of lean
construction practices into three groups: reduce waste, reduce
emissions, and reduce water
Nahmens and Ikuma Lean construction as a viable and effective strategy, using several
(2012) case studies to show the effect of lean on the triple bottom line of
sustainability in construction of modular homes
Harper and Hazleton Sustainability and lean construction complement each other in
(2014) building projects. By applying lean principles, utilization of labor and
materials is improved
van Boggelen (2011) Lean manufacturing of autoclaved aerated concrete (AAC) is a
highlight in the modern industry of building materials. Waste
reduction and reuse of energy represent a serious potential for the
AAC industry contribution to a sustainable future
Arayici et al. (2011) Practice of lean project through the adoption and implementation of
building information modeling (BIM), using a socio-technical vision
that considers not only the implementation of the technology, but also
the socio-cultural environment that provides the context for its
implementation. Adoption of BIM technology brought efficiency
gains achieved through pilot projects and the project elaboration
process was improved through elimination of waste and generation of
value
Tykkä et al. (2010) Identification of innovative companies in six European countries
which use molded wood in the construction industry. The common
factor that leads these companies to innovate are business
opportunities that arise from demographic changes in the
environment outside the company, such as environmental
sustainability and affordable housing for low-income groups. The
case studies have established internal prefabrication, including the
development of processes based on lean production to ensure quality
and effectiveness
(continued)
Table 3.1 (continued)

References Integration between lean and sustainability in construction industry
Pavez et al. (2010) If lean construction wants to evolve to become an effective
management practice, it should include elements in order to
harmonize the technical and human development within an
organization or project
Tatum (2011) Defined the four main elements of knowledge of construction
engineering, which describe the knowledge base that a new engineer
needs to have, including “technical fundamentals” and “resources
invested in construction,” which include lean construction and
sustainability
Andújar-Montoya Six Sigma used to improve sustainability and quality in prefabricated
et al. (2015) composite structures, applied to increase quality management, and
also reduce energy consumption during the construction, as well as
pollution, noise, and waste
Ranking of lean construction practices

Initially, it is necessary to prioritize the 35 lean construction practices, from the
study of Gao (2013), linked to the 14 principles and four layers of Liker’s Toyota
model (2004), base of the research instrument of this study, answered by 60 re-
spondents. The goal is to establish a ranking, to subsidize the decision about
practices that will be prioritized by companies, and to which will be directed
resources (technical, human, and financial). For such, estimates of proportion of
concordant (agree or completely agree) for each of the practices and their respective
95% confidence intervals (CI) were calculated, in order to rank the importance of
the same (Table 3.2). The practice P1.1.3 obtained the highest percentage of agree
(96.6%), while the practice P1.1.1 obtained 96.5%. However, it is observed that
there is an overlap of confidence intervals, indicating that there is no statistically
significant difference between the percentage of agree of the two practices.
Tools/techniques in lean construction
From the ranking of the practices, Table 3.3 was devised, representing the propo-
sition of a conceptual framework that correlates each of the 35 lean construction
practices of this study with the four layers and 14 principles of Liker’s Toyota
model (2004) and with the 16 lean construction tools/techniques that contribute to
sustainability in organizations, identified from the research of Ogunbiyi et al.
(2014). For each tool/technique, deployment phases have been suggested, based on
Eriksson’s study (Eriksson 2010) and recommendations of Green and May (2005):
I. Waste disposal of a technical and operational point of view. The responsi-
bilities and focus are linked to managers rather than individual workers.
Essence is elimination of unnecessary movements, cutting unnecessary costs,
workflow optimization, and sharing of the benefits of improved performance.
Lean construction aspects related to phase I are cleaning, just-in-time
deliveries, targets, performance indicators, and sharing of gains and pains.
Table 3.2 Ranking of lean construction practices

Ranking Practice Description Agree (%) CI (95%)
1 P1.1.3 Understand customer 96.6 [87.4; 99.4]
requirements is the work priority
2 P1.1.1 Sustain a constant purpose 96.5 [87.4; 99.4]
(vision, mission, and values of
the company)
3 P3.9.3 Leaders must understand the 95.0 [85.2; 98.7]
company‘s policy and
procedures, and communicate
these to members of their team
4 P4.12.2 Analyze and fully understand the 93.2 [82.7; 97.8]
situation before taking decisions
5 P3.10.1 Select the best person for a given 91.7 [80.8; 96.9]
job
6 P2.8.1 New technology must support the 91.6 [80.6; 96.8]
values of the company
7 P2.5.2 It is important to prevent that 91.3 [80.2; 96.7]
faulty attributions or “without
inspection” do not come in the
next process
8 P2.8.2 New technology should 90.0 [78.8; 95.8]
demonstrate its potential to
improve processes
9 P3.11.2 Work with partners to improve 89.9 [78.5; 95.8]
project effectiveness
10 P3.9.1 The leaders are motivated to 88.3 [76.8; 94.8]
inspire people to reach goals
11 P2.2.3 Layout of the site should be 88.1 [76.4; 94.7]
organized to improve the flow of
materials and employees moving
in order to minimize waste due to
movement, displacement, and
travel
12 P3.10.2 Training should be provided to 86.7 [74.8; 93.7]
equip employees with the
necessary skills before they are
assigned to work
13 P2.7.3 Appropriate indicators are used 86.6 [74.8; 93.6]
to identify layouts, transit, safety
concerns, etc.
14 P4.13.1 Use appropriate troubleshooting 86.5 [74.4; 93.5]
methodologies (e.g., 5 Whys) to
determine the root cause of
problems
15 P4.12.1 Solve the problem by going to 86.4 [74.4; 93.5]
the places (e.g., the construction
site), where the problems are
discovered
(continued)

16 P2.6.2 It is important to incorporate into 86.2 [74.0; 93.3]
new standard operating
procedures (SOPs) the creative
improvements of employees with
respect to a standard
17 P2.4.3 Daily work activities must be 85.0 [72.9; 92.5]
planned to balance the
availability of material, labor,
machine availability, and
workload between the operations
18 P2.7.1 Visual aids must be adopted to 85.0 [72.9; 92.5]
make waste, problems and
abnormal conditions stay fast
apparent to employees
19 P3.11.1 Respect the capacities of partners 84.5 [72.0; 92.2]
20 P4.14.1 It is important to reflect on 84.2 [71.6; 92.0]
mistakes (e.g., defects, rework,
safety issues, etc.) regularly
21 P4.13.2 In general, consider alternative 83.6 [70.7; 91.8]
solutions
22 P4.14.2 Kaizen activities are conducted in 83.6 [70.7; 91.8]
the workplace of employees
23 P3.9.2 The leaders will separate time to 83.3 [71.0; 91.3]
understand the problems and root
causes before acting
24 P2.5.3 Employees are empowered to be 83.1 [70.5; 91.1]
responsible for quality
25 P2.4.2 The project manager must plan 81.6 [69.1; 90.0]
the work with inputs from other
parts, including subcontractors,
suppliers, customers, etc.
26 P2.2.1 It is important that employees are 78.0 [65.0; 87.3]
concerned with the elimination of
waste in their daily work (waste
can be rework, low quality,
defects, or waiting time)
27 P2.5.1 The staff is dedicated to provide 78.0 [64.9; 87.3]
embedded quality in all aspects
of operations
28 P2.3.3 Work content, uptime, material 77.6 [64.4; 87.0]
requirements, among other
information, should be prepared
clearly before a work task is
released to a team
29 P2.6.1 Employees are encouraged to 76.7 [63.6; 86.2]
improve standard operating
procedures (SOPs) based on their
own experience
(continued)

30 P2.7.2 The information posted in terms 73.4 [60.1; 83.5]
of work status, schedule, quality,
safety, etc. should be in a place in
which most workers can see it
daily, and it is updated
31 P2.4.1 Leaders in charge (the last 71.2 [57.7; 81.8]
planners) will take the
commitment about what will be
made by teams each week based
on what is ready to be done
32 P2.2.2 Material, equipment and other 70.4 [56.2; 81.6]
resources must be provided in a
just-in-time way when needed
33 P2.3.2 It is important to strive for a low 64.8 [50.5; 77.0]
level of inventory of material
(even without stock) at the
construction site
34 P2.3.1 Materials should be ordered as 58.3 [44.9; 70.7]
close as possible to the exact
needs
35 P1.1.2 Short-term losses affect decision 54.7 [40.5; 68.2]
making, but are less important
than pursuing long-term goals
II. Eliminate troubled relationships and strengthen relations of cooperation and

teamwork between the actors of the supply chain. The main parts are
cooperation, model with long-term agreements, meetings and facilitators.
Essence is limited invitations for bids, smooth parameters, long-term con-
tracts, collaborative tools, and broad partnership team.
III. Structural change in the governance of the project. The essential parts are IT,
prefabrication, last planner, bottom-up activities and emphasis on individu-
als, a rethinking of design and construction, decrease of competitive forces,
long-term contracts, training in all staff levels, and a systems perspective of
both processes and product. Essence is set of IT tools, prefabrication, last
planner, self-control, simultaneous engineering, limited invitation for bids,
smooth parameters, long-term contracts, special interest groups, training,
employee suggestions, consistent decisions of orders, large-scale contracts,
and properly balanced goals.
Table 3.3 Conceptual framework between lean construction practices, lean tools/techniques for sustainability and their deployment phases
38
Lean tools/lean construction 1-Just-in-time 2-Visualization 3-Daily huddle 4-Value 5-Value stream 6-Total quality 7-Fail safe for 8-5S
techniques to enable tools meetings analysis mapping management quality
sustainability (16)
Deployment phases of I I, II, III III II, III II, III III III I
lean tools/techniques (3)
Layers (4) Principles (14)
Philosophy 1-Long-term philosophy X X X X
Process 2-One piece flow X
3-Use pulled system X
4-Level workload X X X
5-Culture of stopping to fix X X X X
problems
6-Standardized tasks X X
Process 7-Visual control X X X
8-New technology acquiring X X
strategy
People and 9-Grow leaders and
partners leadership
10-Develop people and X X X X
teamwork
11-Respect partners and X X
suppliers network
Problem 12-Go see for yourself X X X
solving 13-Decision-making strategy X X
14-Reflection and cont. X X X X X X X
improvement
(continued)
A. E. B. Freitag et al.
Lean tools/lean construction 9-Total preventive 10-First run 11-Last 12-Concurrent 13-Pull 14-Kanban 15-Kaizen 16-Six
techniques to enable maintenance studies planner Engineering approach sigma
sustainability (16)
Deployment phases of III III III III I II, III II, III III Practices (35)
lean tools/techniques (3)
Layers (4) Principles (14)
Philosophy 1-Long-term philosophy X X X X X P1.1.1,
P1.1.2, P1.1.3
Process 2-One piece flow X X P2.2.1,
P2.2.2, P2.2.3
3-Use pulled system X X X P2.3.1,
P2.3.2, P2.3.3
4-Level workload X X X P2.4.1,
P2.4.2, P2.4.3
5-Culture of stopping to fix X X X X X P2.5.1,
problems P2.5.2, P2.5.3
6-Standardized tasks P2.6.1, P2.6.2
Process 7-Visual control X P2.7.1,
3 Implementation of Lean Management: Sustainability …
P2.7.2, P2.7.3
8-New technolgy acquiring X X P2.8.1, P2.8.2
strategy
People and 9-Grow leaders and X P3.9.1,
partners leadership P3.9.2, P3.9.3
10-Develop people and X X X X X X X P3.10.1,
teamwork P3.10.2
11-Respect partners and X X X X P3.11.1,
suppliers network P3.11.2
(continued)
39
40
Lean tools/lean construction 9-Total preventive 10-First run 11-Last 12-Concurrent 13-Pull 14-Kanban 15-Kaizen 16-Six
techniques to enable maintenance studies planner Engineering approach sigma
sustainability (16)
Problem 12-Go see for yourself X X P4.12.1,
solving P4.12.2
13-Decision-making X P4.13.1,
strategy P4.13.2
14-Reflection and cont. X X X X X P4.14.1,
improvment P4.14.2
A. E. B. Freitag et al.
Limitations of This Study

In spite of the contributions brought by this study, there are research limitations
related to keywords used in the search sentences, choice of the searched scientific
databases, and profile of the survey respondents.
Conclusions and Future Study
The construction industry is of great importance for the economy and faces chal-
lenges in light of the impacts arising from the extraction of natural resources and
waste generation. This situation reinforces the need for companies to adopt modern
management practices such as lean management, known as lean construction in the
building sector, to increase productivity, contributing to sustainability. From
available studies in the scientific literature, integrating lean and sustainability in the
construction industry, an opportunity was detected to develop a research correlating
practices of the lean management philosophy in the construction industry, with lean
tools/techniques that contribute to sustainability. A survey was conducted among
140 professionals from the civil construction sector of the State of Rio de Janeiro,
Brazil, obtaining 60 responses, which allowed the structuring of a 35 lean con-
struction practices ranking, aligned with the four layers and 14 principles of Liker’s
Toyota model (2004). In the sequel, it was possible to propose a conceptual
framework that integrates lean management practices in the construction industry,
with lean tools/techniques that contribute to sustainability, considering its deploy-
ment phases. To enhance adoption of the lean management philosophy by the
construction industry, studies must be developed correlating lean with strategy and
decision making.
References
Andújar-Montoya, M. D., Gilart-Iglesias, V., Montoyo, A., & Marcos-Jorquera, D. (2015).

A construction management framework for mass customisation in traditional construction.
Sustainability, 7, 5182–5210.
Arayici, Y., Coates, P., Koskela, L., Kagioglou, M., Usher, C., & O’Reilly, K. (2011). Technology
adoption in the BIM implementation for lean architectural practice. Automation in
Construction, 20, 189–195.
Bloom, N., & Reenen, J. V. (2010). Why do management practices differ across firms and
countries? Journal of Economic Perspectives., 24(1), 203–224.
CEBDS—Conselho Empresarial Brasileiro para o Desenvolvimento Sustentável. (2012). Visão
Brasil 2050.
CNI—Confederação Nacional da Indústria. (2013). Mapa estratégico da indústria 2013–2022
(2nd. ed.). Brasília: CNI.
Corrêa, C. R. (2012). Situações Incômodas no Trabalho: Confiabilidade de uma escala de medida
utilizando o Coeficiente Alfa Ordinal. Programa de Pós Graduação em Saúde Coletiva.
Universidade Federal de Juiz de Fora, Faculdade de Medicina, Juiz de Fora.
Creswell, J. W., & Clark, V. L. P. (2011). Designing and conducting mixed methods research (2nd
ed., Chap. 4, pp. 107–142). Thousand Oaks: Sage Publications, Inc.
de Freitas, A. R., Júnior, W. B., de Ferreira, R. P., Cruz, C. D., Moreira, A., & Vilela, D. (2008).
Técnicas de análises exploratórias em dados de cultivares de alfafa. Revista Brasileira de
Zootecnia, 37(9), Viçosa, Set.
Eriksson, P. E. (2010). Improving construction supply chain collaboration and performance: a lean
construction pilot project. Supply Chain Management: An International Journal, 15(5),
394–403.
Filho, N. H., Salvador-silva, R., & Teixeira, M. A. (2014). Análise Teoria de Resposta ao Item de
Instrumento Breve de Avaliação de Comportamentos Antissociais. Psico, 45, 120–125.
Firmawan, F., Othman, F., & Yahya, K. (2012). Improving project performance and waste
reduction in construction projects: a case study of a government institutional building project.
International Journal of Technology, 2, 182–192.
Freitag, A. E. B., Anholon, R., de Oliveira, V. M., & Larrain, T. V. (2017). Integration of concepts
about lean construction, sustainability and life cycle of buildings: A literature review. Brazilian
Journal of Operations and Production Management, 14, 486–499.
Gao, S. (2013). The Toyota way model: An implementation framework for large chinese
construction firms (A thesis submitted for the degree of doctor of philosophy, department of
building). National University of Singapore.
Green, S., & May, S. (2005). Lean construction: Arenas of enactment, models of diffusion, and the
meaning of ‘leanness’. Building Research and Information, 33(6), 498–511.
Grönqvist, M., Male, S., & Kelly, J. (2006). The function priority matrix: Meeting the function of
function analysis. Value Solutions Ltd.
Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (2009). Análise
multivariada de dados (6ª ed., pp. 23–45). Bookman, Capítulo 1—Introdução.
Harper, C., & Hazleton, R. (2014). New Engineer’s knowledge for success with subcontractors
and trade partners. Practice Periodical on Structural Design and Construction, 19(1), 15.
Ibrahim, A. R. B., Roy, M. H., Ahmed, Z. U., & Imtiaz, G. (2010). Analyzing the dynamics of the
global construction industry: Past, present and future. Benchmarking: An International
Journal, 17(2), 232–252.
Koranda, C., Chong, W. K., Kim, C., Chou, J.-S., & Kim, C. (2012). An Investigation of the
applicability of sustainability and lean concepts to small construction projects. KSCE Journal
of Civil Engineering, 16(5), 699–707.
Liker, J. K. (2004). The Toyota way: 14 management principles from the world’s greatest
manufacturer. New York: McGraw-Hill.
Moher, D., Liberati, A., Tetzlaff, J., & Altman, D. G. (2009). The PRISMA group. Preferred
reporting items for systematic reviews and meta-analyses: The PRISMA statement. PLoS
Medicine 6(7), e1000097. https://doi.org/10.1371/journal.pmed.1000097. Epub July 21, 2009.
Nahmens, I., & Ikuma, L. H. (June 1, 2012). Effects of lean construction on sustainability of
modular homebuilding. Journal of Architectural Engineering 18(2).
Ogunbiyi, O., Oladapo, A., & Goulding, J. (2014). An empirical study of the impact of lean
construction techniques on sustainable construction in the UK. Construction Innovation, 14(1),
88–107.
Pavez, I., González, V., & Alarcón, L. F. (2010). Improving the effectiveness of new construction
management philosophies using the integral theory. Revista de la Construcción, 9(1), 26–38.
R Core Team. (2015). R: A language and environment for statistical computing. R Foundation for
Statistical Computing. Vienna, Austria. https://www.R-project.org/.
Santos, A. C. de S. G. dos, Carvalho, L. M., Souza, C. F. de, Reis, A. da C., Freitag, A. E. B.
(2019). Total quality management: the case of an electricity distribution company. Brazilian
Journal of Operations and Production Management 16(1), 53–65.
Tatum, C. B. (2011). Core elements of construction engineering knowledge for project and career
success. Journal of Construction Engineering and Management, pp. 745–750. https://doi.org/
10.1061/CO.1943-7862.0000306.
Tykkä, S., McCluskey, D., Nord, T., Ollonqvist, P., Hugosson, M., Roos, A., et al. (2010).
Development of timber framed firms in the construction sector—Is EU policy one source of
their innovation? Forest Policy and Economics, 12, 199–206.
van Boggelen, W. M. (2011). The contribution of AAC in securing a sustainable future. AAC
innovations from a life cycle perspective. Cement, Wapno, Beton.
Zumbo, B. D., Gadermann, A. M., & Zeisser, C. (2007). Ordinal versions of coefficients alpha and
theta for Likert rating scales. Journal of Modern Applied Statistical Methods, 6, 21–29.
Alberto Eduardo Besser Freitag is Doctor of Civil Engineering Management, Production and
Environment from Fluminense Federal University (UFF), Master in Business Management by
Ebape/Fundação Getúlio Vargas (FGV-RJ), Post-graduated in Marketing and Mechanical
Engineer from Pontifícia Universidade Católica do Rio de Janeiro (PUC-RJ). He is certified
with Lean Six Sigma Black Belt. He has a solid experience in enterprise networking organizations,
support to entrepreneurship, technological services, beverage industry and engineering, occupying
management positions for over 10 years. He is Partner–Director of BD Gestão Sustentável, with a
career built on the Federation of Industries from the State of Rio de Janeiro, Coca-Cola Brazil,
Jaakko Pöyry Engineering and Varig airlines. He is highly specialized knowledge in lean
management, as well as extensive experience in the areas of people, project and process
management, executive education, strategic planning, preparation of studies, technical and
economic feasibility analysis, manufacturing, quality and engineering. He is fluent in Portuguese,
English, Spanish, and German, with activities developed at international level.
Academically, he has articles published in scientific journals, book chapters, and conference
proceedings. He develops research in association with researchers from UFF, State University of
Campinas (UNICAMP) and universities of Chile, Germany, and Turkey. He participates at master
defense committees on UFF and undergraduate at Federal University of Rio de Janeiro (UFRJ).
Reviewer of journal and conferences articles, Co-Supervisor of undergraduate and masters
students at UFF. He teaches classes and lectures at UFF for students of the Master’s degree in
Management Systems, Doctorate in Sustainable Management Systems, and Master and Doctorate
of Production Engineerig. He is Professor of graduates at FGV-RJ on IDE Management and at
IDCE Business School. His main research themes are related to lean manufacturing, adminis-
tration, sustainability, innovation, and entrepreneurship.
Osvaldo L. G. Quelhas is Professor of Fluminense Federal University (UFF), President of

Brazilian Association of Production Engineering (ABEPRO) (2006–2010), and Member of Social
Responsibility and sustainability Commission of Brazilian Oil Institute (Instituto Brasileiro de
Petróleo-IBP) He is working at the Fluminense Federal University in the Civil and Production
Engineering Departments since 1992, Coordinator of the Technology, Business Management and
Environmental Laboratory (Latec), Vice Coordinator of the Professional Master Course in the
Management Systems (Strictu Sensu), Coordinator of the Doctoral Program in Sustainable
Management Systems, Professor of the Production Engineering Master and Doctorate Programs:
Management System with emphasis in Sustainability (environmental, social responsibility, and
work safety). He worked as Engineer and Process Manager in several national and international
organizations such as the Brazilian Naval Arsenal in Rio de Janeiro, Mills Equipamentos Ltda and
Shell Brasil S.A. His graduation from Civil Engineering (1978), Master degree in Civil
Engineering (1984) and Doctorate in Production Engineering from the Federal University of Rio
de Janeiro (UFRJ—1994).
Sergio Luiz Braga França is Doctor in Civil Engineering (UFF), emphasis in management,
production, quality, and sustainable development; Master in Civil Engineering (UFF); Graduate in
Civil Engineer (UFF); Professor at the Doctoral Program in Sustainable Management Systems
(PPSIG UFF); Professor at the Master Program on Management Systems (MSG UFF);
Occupational Safety Engineer (UFF); Coordinator in the Innovation Center and Technology for
Sustainability (NITS /UFF); Coordinator of MBA LATEC/UFF. He is Reviewer of journals and
academic events.
Marcelo Jasmim Meiriño is Professor at Fluminense Federal University (UFF) in the School of
Engineering; he Professor in the Doctoral Program in Sustainable Management Systems (PPSIG
UFF); Professor in the Master’s Program in Management Systems (MSG UFF); Ph.D. in Civil
Engineering, emphasis on management, production, quality, and sustainable development.
Architect and Urban Planner; Master in Civil Engineering; Occupational Safety Engineer;
Coordinator in the Innovation Center and Technology for Sustainability (NITS/UFF); Specialist in
Sustainability and Energy Efficiency in Buildings; Member of the Social Responsibility
Commission of the Brazilian Institute of Oil, Gas and Biofuels (IBP); Coordinator of the
National Congress on Management Excellence (CNEG); Reviewer of journals and academic
events; and Researcher and Consultant.
Chapter 4
The Importance of Sustainability
and Sustainability Reporting
Zeynep Şahin and Fikret Çankaya
Abstract In the 1980s, voluntary and compulsory social and environmental reports
began to be prepared. Thus, it was understood that the global market needed reports
that included not only financial information but also non-financial information. The
economic and technological contributions of business have been criticized for
causing social and environmental problems over time. Issues such as environmental
pollution, resource consumption, waste materials, product quality and safety, em-
ployee rights, and social responsibility have gained importance. The necessity of
establishing sustainability culture in the businesses was born. Following the busi-
ness scandals, corporate social responsibility and corporate sustainability have
become important along with corporate governance principles. The concept of
corporate social responsibility has gradually been replaced by the concept of
sustainability, and instead of corporate social responsibility reports, sustainability
reports have been published. In the sense of sustainability, business activities need
to be reported with social, economic, and environmental consequences. Corporate
sustainability, which is called business sustainability, deals with economic,
environmental, social, and managerial issues. Developments related to corporate
sustainability are also followed by sustainability reports. The episode consists of
two subheads. In the first subhead of the study, information was given on the
concepts of sustainability, sustainable development, and corporate sustainability.
Under these heads, the dimensions of sustainable development, the elements and
theories that contributing to corporate sustainability and the principles of corporate
sustainability are explained. In the second subhead of the study, information was
This study was adapted from a Ph.D. thesis which was named as “Sustainability Reports In
Turkey’s GRI Scope And Proposal For Reporting For SMEs”. In addition, it has been supported
by TÜBİTAK, the Scientific and Technological Research Council of Turkey, under project
number 215K361 within the TÜBİTAK 3001 Program as the project output of the study named
as “Current State of Sustainability Reports in Turkey and Sustainability in SMEs”. We are
grateful to the TÜBİTAK unit and its employees who provided scientific and financial support
for the evaluation of the project application, its worth to be supported and during the realization
of the project.
Z. Şahin (&) F. Çankaya

Black Sea Technical University, Trabzon, Turkey
e-mail: ktuzeynep@hotmail.com

46 Z. Şahin and F. Çankaya
given about sustainability reporting in small- and medium-sized businesses,

sustainability reporting applications, sustainability and accounting relations, and
sustainability measures.

Keyword Sustainability Dimensions of sustainability Corporate sustainability

Sustainability reporting Sustainability measurements
4.1 Introduction
Emerging and uncontrolled population growth together with rapid reconstruction

after the Second World War, a development process was initiated in which
consumption was the forerunner. After 1960, the links between environment and
development began to break, environmental balances deteriorated, and the concept
of sustainability emerged. The definition of sustainability, which considers the
environment and the needs of the human and future generations, has gained im-
portance. Despite the economic and technological contributions they provide,
businesses overtime has been criticized for causing social and environmental
problems. Therefore, the success of businesses is now measured by the economy,
the environment and the collective contribution in the long run.
Nowadays, it is thought that the evaluation of the financial information produced
by the financial accounting will not be enough. For this reason, it is aimed to
address the environmental and social and managerial aspects of business activities
and performance, and that the sustainability reports are intended to complement
financial reports. The need to prepare sustainability reports arose because of the
demand by the stakeholders for reporting all aspects of business activities and the
fact that the businesses realize that preparing such reports that address their envi-
ronmental and social contributions also contributes to their overall performances.
Sustainability reports enable managers to help balance economic growth, social and
environmental needs, and make it easier to assess the expenditures that contribute
neither to the products and services of the enterprise nor to the society. The purpose
of financial accounting is to disclose the occurrences of increases and decreases
related to the formation of assets and the use of resources. In sustainability ac-
counting, however, the goal is to measure the sustainability performance of the
businesses, to provide accountability to the partners, to contribute to the decision-
making processes of the top management, and to provide the information that the
stakeholders want.
4 The Importance of Sustainability and Sustainability Reporting 47
4.2 The Concept of Sustainability
The concept of sustainability whose root is based on the Latin word “sustenere” is
defined in different ways in the literature. Sustainability is the careful use of re-
sources in agriculture, tourism, architecture, business, and the economy(Gladwin
et al. 1995, p. 877). According to Beyhan and Ünügör (2005), this concept, which is
used in many different areas, is about the future of humanity and means to protect
human resources for the future (p. 80).
The concept of sustainability emerged for the first time in 1960s. Rapid capitalist
growth after the Second World War caused negativities on the ecological balance
and the link between development and environment emerged and as a result, the
concept of sustainability gained importance (Altunbaş 2008, p. 5). The globaliza-
tion which has taken place in the twentieth century, while new opportunities to
improve the quality of life, information sharing, and access to technology caused
economic growth, also created new risks. All these make sustainable development
important. While advances in knowledge and technology provide economic growth,
social relations help resolve the risks and threats to the environment and the
economy. It is therefore expected that the sustainable development can be attained
if economic, social, and environmental sustainability is provided (Özer 2010,
pp. 4–5).
Sustainability in terms of businesses is to evaluate economic expectations in a
balanced way with environmental and social sensitivities. Therefore, businesses are
responsible not only to their shareholders or investors but also to all stakeholders
and include the concept of sustainability into management policies. It can be said
that the businesses that comply with the concept of sustainability have become
advantageous compared to their competitors.
4.2.1 Sustainable Development
In 1972, at the United Nations Conference on the Human Environment in

Stockholm, by relating the equal use of resources and economic and social de-
velopment with the environment, the first steps for concept of sustainability and
sustainable development were taken. In 1987, the most commonly used definition
of sustainable development was made in the report “Our Common Future,” which
was prepared by the World Commission on Environment and Development
(WCED), known as the Brundtland Commission. According to this definition,
sustainable development is “the fulfillment of the needs of the present generation
without eliminating the ability of future generations to meet their own needs”
(WCED 1987, p. 54).
Overtime, the purpose of the sustainable development has gone beyond its
original definition and turned into sustainability of resources for maximum profit. In
order to avoid this, sustainability indicators have been developed by the United
Nations Commission on Sustainable Development (UNCSD). These indicators
measure how far progress has been made in achieving sustainable development
from economic, environmental, and social aspects.
The main economic indicators representing sustainability developed by UNCSD
are explanations of economic structure, consumption, and production patterns.
Environmental indicators include descriptions about atmosphere, soil, ocean, sea
and coasts, water, and biodiversity. Social indicators are explanations about
equality, health, education, housing, security, and population (Özmehmet 2008,
pp. 12–16).
4.2.2 Dimensions of Sustainable Development
The discussions on the subject of sustainable development converge at three main

points: economic success, environmental justice, and social equality. Economic
objectives in sustainable development are productivity, growth, and stability; social
goals are full employment, equality, security, education, health, participation, and
cultural identity; environmental objectives are healthy environment for people,
rational use of renewable natural resources, and protection of non-renewable natural
resources. Sustainability is an egalitarian social goal. At the same time, businesses
and people should adapt to the environment. Therefore, this concept should be
considered an integration of economic, environmental, and social three dimensions
(Zink et al. 2008, p. 7).
Economic Dimension of Sustainable Development
Almost all of the economic models that have been adopted in the past are short-term
models that have been developed without regard to the protection of the environ-
ment and natural resources. Sustainable development model is the only model that
aims to optimize development in the long run without sacrificing resources and
preserving the environment (Gürlük 2001, p. 11). In economic sustainability,
products that benefit the society are produced and in the long-run value creation is
aimed. (Nemli 2004, p. 81). Therefore, for economic sustainability, the financial
performance of businesses and how well they manage the other capital elements
such as people, production, and natural capital are important.
Environmental Dimension of Sustainable Development
Although rapid developments in science, technology, and industry and the steady
increase in production opportunities make human life easier, they also cause en-
vironmental deterioration, global warming, acid rain, increasing greenhouse gases,
depletion of ozone layer, increasing chemical wastes, water and soil pollution,
diminishing forest areas, and desertification. After the United Nations Environment
and Development Conference, many environmental organizations have been

established and many environmental protection declarations have been issued. The
environment is regarded as natural capital in terms of environmental sustainability
and renewable and non-renewable resources are grouped as environmental opera-
tions. Environmental sustainability requires the use of non-renewable and renew-
able resources with caution (Steurer et al. 2005, p. 271).
Social Dimension of Sustainable Development
The social dimension of sustainable development particularly focuses on human
development. Besides basic needs like food, housing, security, equality, health,
freedom, education, employment are also important subjects. At this dimension,
strategy, mission, vision, and practices of a business must take into account the
employees, society, local population, suppliers, and stakeholders. For this dimen-
sion, businesses have to provide their employees with assistance in training and
career development, provide them with safe work environment, be
non-discriminatory on wages and promotions, and provide health insurance. In
addition, businesses must release their activity reports by communicating with their
shareholders with transparency during decision-making processes and in gathering
information. Regarding this dimension, businesses should also contribute to the
development of universal principles of human resources.
4.3 Corporate Sustainability
The topic of corporate sustainability has been frequently discussed in recent years.
There are two important developments that lay the groundwork for the emergence
of this concept. The first one is the Brundtland Report published by the World
Environment Development Commission in 1987 and the second is the concept of
triple bottom line that emerged in 1990s. The Brundtland Report emphasizes the
efficient use of resources. In the concept of triple bottom line, it is stated that
economic sustainability in the short term can bring success but it will not be
sufficient in the long run alone. Social and environmental sustainability is also
important for long-term success in economic sustainability (Besler 2009, pp. 1–3).
The definition of sustainability approach at the business level is corporate sus-
tainability. According to Şenal and Aslantaş Ates (2012), efficient use of economic,
environmental, and social factors by businesses to provide long-term benefits
provides corporate sustainability (p. 85). If the business provides sustainability,
then the sustainability of the sector and therefore the country and the world is
ensured.
According to Dyllick and Hockert (2002), corporate sustainability as a mix of
ecological and social sustainabilities requires the corporations to focus on long-term
gains rather than short-term gains (p. 132). According to Hahn and Scheermesser
(2006), rather than merely producing and creating value for the economy, busi-
nesses provide corporate sustainability by eliminating or reducing the negative
externalities that they generate during their normal activities (p. 151). According to
Tokgöz and Önce (2009), businesses are also investing in future while learning a
new business model to ensure corporate sustainability (p. 267). Businesses can
provide corporate sustainability by developing strategies and approaches to reduce
damage to the environment during the manufacturing process (Yavuz 2010, p. 64).
What encourages the businesses to promote corporate sustainability is the in-
creases in brand value, trust and reputation and motivation of personnel that result
in increased profits, sustaining competitive advantages and the facilitation of
financial support opportunities from international investment corporations (Kuşat
2012, pp. 229–230). Businesses now attach more importance to social responsi-
bility activities in order to separate themselves from fraudulent businesses. For
businesses, not only profitability and shareholder shares, but also corporate social
responsibility (CSR) is important.
Corporate sustainability, corporate social responsibility, and corporate gover-
nance are inseparable concepts for businesses. The concept of corporate social
responsibility is gradually being replaced by the concept of corporate sustainability,
and instead of corporate social responsibility reports, sustainability reports are now
being published. Corporate governance as a corporate sustainability strategy
focuses entirely on financial sustainability. After big business scandals, corporate
governance has become very important for businesses. Corporate governance re-
ports have become important in investors’ decision making (Aras and Crowther
2008, p. 440). With global crises, corporate management is the way to sustainability
of corporate success. Corporate governance firms provide businesses with risk
management for both maintaining their assets and preventing crises they may
encounter. In other words, through corporate governance, the financial goal that is
determined for sustainability is achieved by ensuring business continuity, more
ethical and proper business practices and avoiding risks (Sancar 2013, pp. 74–81).
Therefore, a good corporate governance will promote sustainability in general (Aras
and Crowther 2008, s. 441).
Corporate governance is the assurance for sustainability of business perfor-
mance. Corporate governance implies that the management and controllers of the
business are transparent, accountable, fair, responsible, and reliable. So when all
these principles are met, sustainability will be ensured. It is important to monitor
and control all the other factors that target the profitability of the business in the
new understanding that the profit is not the only factor that maximizes the business
value. Corporate governance is therefore a reassurance for the sustainability of
business processes (Demirkaya 2014, p. 135).
4.4 Factors and Theories Contributing to Corporate

Sustainability
Purpose of businesses in corporate sustainability is maximization of profits and to

include stakeholder groups in their areas of responsibility to ensure continuity of
economic performance. Problems faced by businesses in corporate sustainability are
economic and administrative. Economic problems are mostly related to the ineffi-
ciency and ineffective use of production factors, whereas administrative problems
are usually the result of poor inter-company communications and the inability of
managers. The problems regarding competitive business however is both a result of
economic and administrative issues (Kuşat 2012, p. 238; Chung-Fah et al. 2011,
p. 221). In order to overcome these deficiencies, along with corporate sustainability
concept, sustainable development, CSR, social stakeholder theory, and corporate
accountability theory come out as the factors and the theories that contribute to the
corporate sustainability. These elements and theories are examined under separate
headings below.
Sustainable Development
Balancing the need for economic growth with environmental protection and social
equality is called sustainable development. This concept was first introduced in
1987 in the Brundtland Report published by the World Commission on
Environment and Development. Sustainable development benefits corporate sus-
tainability by uncovering the environmental, social, and economic performances of
businesses and encouraging businesses to work in these areas (Wilson 2003, p. 2).
Corporate Social Responsibility
It is a fact that businesses have responsibilities toward society. The concept of CSR
has gained importance as the concept of sustainability has increased in the world
(Şenal and Aslantaş Ateş 2012, p. 85). According to Özdemir (2007), CSR takes
into account every decision taken by the business world and the effects of each
activity on its social stakeholders (p.1). While the image and brand loyalty of
companies that seriously implement CSR practices, motivation and productivity of
personnel, market share and sales, customer loyalty, product quality increase, and
costs decrease with time and risk management becomes effective by providing
corporate training (Weber 2008, pp. 247–250). CSR provides a sustainable
approach in terms of ethics and accountability. Businesses are paying attention to
CSR implementations to ensure sustainable development. CSR differs because of
the differences in competitiveness and business areas and due to the different
business practices applied to fulfill their responsibilities (Moon 2007, p. 298).
Social Stakeholder Theory
In a traditional management concept, the answer to the question of who is entitled
to the business as the beneficiary is shareholder, whereas in the concept of sus-
tainable development, all segments where the business is relationship with are
considered part of the answer (Demirkaya 2014, p. 120). Businesses are also
involved in many different segments of the society when they operate in the en-
vironment they are in. All parties that are involved in the business in the society,
affected by the activities of the business and affecting the business by its activities
are called “stakeholders” (Doğru 2012, p. 21). It is very important for the success of
the business to establish good relations with its stakeholders. It is aimed to take into
account the expectations and needs of all stakeholders when carrying out the ac-
tivities of the businesses (Özalp et al. 2008, p. 70).
Corporate Accountability Theory
The concept of accountability states that businesses should be affected by their
external environment in their activities and be held responsible for these activities.
It means that the business has a responsibility of proving the correctness of the
decisions taken within the business and is held accountable. Accountability and
transparency are interrelated concepts. The fact that the business activity reports are
in conformity with the truth is based on the principle of transparency, while the
proof of the validity of the decisions taken is related to the accountability principle.
The scope of accountability which requires management accountability only to
business shareholders in a traditional management approach has been extended to
the concept of sustainability. More explicitly, it has been shown that businesses
need to meet expectations not only in terms of their financial performances, but also
in their environmental and social performances (Tokgöz and Önce 2009, p. 258).
4.5 Corporate Sustainability Principles
Economic success, environmental justice, and social equality must be achieved

simultaneously in order for the business to succeed in achieving corporate sus-
tainability These principles are also necessary to ensure sustainable development at
the same time (Bansal 2005, pp. 199–200). Businesses that take corporate sus-
tainability principles into account increase their environmental and social sustain-
ability as well as their economic sustainability. Businesses seeking economic
success must effectively manage their tangible and intangible capitals (Tüm 2014,
p. 63). Environmental justice is achieved with more responsible use of renewable
and non-renewable resources and by protecting the natural capital while performing
the business operations. (Doğru 2012, p. 27). Social equality is to provide pros-
perity to the society through corporate social responsibility applications. With the
application of social responsibility projects, people are equally provided access to
resources (Sarıkaya and Kara 2007, p. 227).
4.5.1 Sustainability Reporting
Reporting that presents financial statements and is prepared in accordance with

accounting principles in order to inform business partners and potential investors
first emerged in the nineteenth century. The changes in society structure since
1970s, along with awareness in social justice and social equality, and social issues
have also been included in the reports (Schaltegger and Burritt 2010, p. 382; Yanık
and Türker 2012, p. 297).
From a sustainability and stakeholder perspective, financial accounting is
insufficient to obtain the expected benefits from reporting and has received a
number of criticisms. Financial accounting has been criticized as limiting business
operations to a narrow perspective, deeming profit and profitability as priority,
ignoring social and environmental events, and lacking in assessing environmental
impacts of corporate activities (Schaltegger and Burritt 2010, p. 376). It has also
been understood that businesses are responsible for their activities not only toward
their partners and investors but also toward society. With increase in social re-
sponsibility of businesses, social reports that hold social responsibilities such as
employment, social relations, and ethics held in the foreground have begun to be
created. Natural disasters, ecological disasters, climate change, and environmental
reports have gained importance in the 1980s and 1990s. In these years, UK made
environmental reporting a requirement (Aksoy 2013, p. 28). By the year 2000,
corporate social responsibility reports, in which environmental and social infor-
mation were presented together, gained importance.
It has been understood that users of the financial statements need reports that
include not only financial information but also non-financial information. In addi-
tion to profitability ratios, businesses have started to make reports on how sensitive
their products are to employees, collectors, and the environment (Yanık and Türker
2012, p. 297). Besides the topics addressed in corporate responsibility reports, these
reports, which surface as sustainability reporting, explain the impacts of environ-
mental and social performance of businesses on economic performance.
Sustainability reports where additional disclosures are made to balance environ-
mental and social performance with economic performance are used synonymously
with various concepts such as triple bottom line reporting, corporate social
responsibility reporting, non-financial reporting (Çalışkan 2012, p. 52).
Sustainability reports are presented in various forms. In addition to financial reports,
these reports may be presented to stakeholders as three P reports, as well as
activities in economic, social, and environmental areas under the heading of
sustainable development in the activity reports of the businesses. A separate sus-
tainability report can also be given integrated into the activity report (Aksoy 2013,
p. 30).
In order to implement and internalize the sustainability by businesses, it should
first of all be traceable and measurable. This is possible through sustainability
reporting. Sustainability reports show that there are differences among countries and
even among sectors. In developed countries such as the USA, the UK, and
Australia, sustainment reports contain qualitative information in many areas such as

number of employees, salary and bonuses, and employee training. It is known that
the number of sustainability reports is low in developing countries. The main
reasons for this are the lack of regulations requiring disclosure of environmental and
social issues in the annual activity reports, the lack of qualified accountants who can
measure the environmental impact of business activities and determine the costs,
and the additional costs incurred by businesses (Gao et al. 2005, p. 15).
4.5.2 Sustainability Reporting in Small- and Medium-Sized

Businesses
The share of SMEs in total in the world is over 96%. This ratio is 99% in Germany,
Japan, and France, while it is 99.77% in Turkey. In Turkey, 78% of total
employment, 55% of total value-added, 65.5% of total sales, 50% of total invest-
ments, 60.1% of total exports, 24% of total loans are carried out by SMEs.
Therefore, as the rest of the world, the place of SMEs in the economy is very
important in Turkey. It is known that SMEs play an important role in helping
economic and social developments of countries as they rapidly adapt to the
changing market conditions, have flexible production structures, achieve balanced
growth among the regions, and help reduce unemployment (Ergün 2012, p. 4).
The life span of businesses in Turkey and in the world is getting shorter. 80% of
the businesses in Turkey cannot reach the fifth year and 96% in the tenth year.
While the role of SMEs in the country’s economy is so important, the sustainability
of businesses, especially SMEs’ life spans, is at the forefront. For this reason,
ensuring sustainability in SMEs presents an important problem. The most important
reasons why SMEs cannot achieve sustainability are corporate and managerial
problems. SMEs are lagging behind in sustainability performance all over the world
as business size is a very important factor in sustainability performance.
The issue of preparing sustainability reports is also of utmost importance for
SMEs. Stakeholder demands have increased for sustainability reporting. SMEs had
to prepare sustainability reports in order to keep up with competitors. Sustainability
reports provide SMEs with the opportunity to tell their own positive business
stories, ease of financing, advantages in risk management in the reporting process,
product and process renewals, as well as being able to distinguish SMEs from
competitors (Grandar and Purcell 2012, pp. 5–6).
4.5.3 Sustainability Reporting Applications
The sustainability reporting approach is basically divided into two. These are
voluntary and compulsory reporting approaches. The voluntary reporting approach
is based on market efficiency. If business stakeholders need not only financial

information but also social and environmental information, this information is
voluntarily published in sustainability reports or other named reports. In the com-
pulsory reporting approach, businesses have to report on economic, social, and
environmental issues regularly with legal arrangements. The purpose of compulsory
reporting is to prevent fraudulent activities, protect investors, reduce costs, and
transfer information reliably to stakeholders (Aksoy 2013, p. 33).
The compulsory reporting approach is preferred because of its ability to change
corporate culture, provide comparability, eliminate shortfalls in voluntary reporting,
reduce costs, and treat investors equally. On the contrary, it can be said that the
approach is not preferred due to the lack of consideration of sectoral differences,
inapplicability of a single model for every business, lack of flexibility for unusual
situations, and reluctance on innovation. On the other hand, the voluntary reporting
approach is preferred due to its flexibility, suitability, and easy adaptation to various
sectors; however, it is known that there are deficiencies in this approach such as
causing conflict of interest and inefficient use of resources (Aksoy 2013, p. 34).
Apart from voluntary and compulsory reporting approaches for sustainability
reporting, different approaches have also been developed. The first approach is to
prepare sustainability reports according to sustainability standards established by
certain corporate, not by legislation. The second approach is the use of voluntary
and compulsory approaches in combination, while the other approach is the inte-
grated reporting approach in which financial reports, sustainability reports, and
corporate governance reports are presented in a single report in relation to one
another.
There is no single package of internationally recognized financial reporting
standards for sustainability reporting. For this reason, it is left to their own pref-
erences in which format, in what frequency, what data should be reported by the
businesses. In this way, several different sustainability reporting standards have
been developed. This has prevented sustainability reports from having a common
structure. Therefore, it is difficult to compare sustainability reports prepared for
different standards or guidance. Therefore, reporting principles have been published
by international organizations to support each other. The common side of these
principles is to focus on many issues such as economic, environmental, social, and
managerial issues related to sustainability. The most preferred guide for businesses
is the Global Reporting Initiative Guide. The GRI guidelines are also supported by
international consulting firms such as Deloitte, Ernst and Young, KPMG,
PricewaterhouseCoopers (English and Schooley 2014, p. 27).
4.5.4 Sustainability Reporting and Accounting Relations
Accounting is a profession that is not indifferent to the level of public expectations,

the nature of business activities, and the changing level. Historically, the first
members of this profession were mostly specialized in bankruptcy and
bookkeeping. However, it was necessary for these professionals to diversify their

business in the field of accounting by providing services such as consultancy ser-
vices to adapt to changing business life and to continue the profession.
Sustainability has become an important issue in this sense in recent years.
Therefore, accounting practices now include corporate sustainability (Yönet 2010,
pp. 73–76). In addition, the role of the accounting profession in sustainability has
become crucial as a result of the need by businesses for reports that present
non-financial as well as financial information. The reporting of the activities that are
caused by the external environment and affecting the business operations together
with the concept of sustainability has been the main function of the accountancy.
Reporting on social performance together with financial performance has come to
the fore. In this sense, sustainable, i.e., social reporting, includes not only the
economic, but also the environmental and social success of business operations.
The reports include not only financial information but also non-financial informa-
tion, revealing the role of accountancy on sustainability.
As an accounting method that preserves sustainability by providing quality in-
formation to businesses, the duty of sustainability accounting is not only to doc-
ument collection, classification, and registration but also to report on environmental
and social consequences for its sustainability and development. In this respect, the
aim of sustainability accounting is to measure the sustainability performance of the
business, to provide accountability to partners, and to contribute to the senior
management decision-making process (Yönet 2010, p. 72; ICAEW 2004, p. 12).
4.6 Sustainability Measures
Sustainability of businesses is measured by the benefits they provide for sustainable

development. The benefit to sustainable development is expressed as sustainability
performance. Indicators/indexes and integrated assessment methods are used in
assessing sustainability. The most effective way to measure sustainability perfor-
mance is to measure performance with the help of indexes. Sustainability indexes
have been developed by the world’s leading stock exchanges in order to compare
sustainability activities of businesses. The first sustainability index Domino Social
Index was developed in the US in 1990. Subsequently, the Dow Jones
Sustainability Index (DJSI) was initiated by Dow Jones in 1999 and the UK’s first
sustainability index was developed in 2001 by the British firm FTSE. The most
used index in assessing sustainability performance is the “Dow Jones Sustainability
Index.”
In 2010, studies on the development of sustainability index started by Borsa
Istanbul in Turkey. Index calculations started from November of 2014. Businesses
including the BIST30 index in the first stage, the BIST50 index in the second stage,
and the BIST100 index in the third stage were evaluated. The purpose of the index
is to increase the understanding of sustainability among businesses by creating an
index that is traded on the Stock Exchange in Istanbul and has high levels of
corporate sustainability performances. The index measures how businesses

approach sustainability issues such as global warming, depletion of natural re-
sources, reduction of water resources, health, and employment. In addition, cor-
porate sustainability performances of businesses will be measured, so that
businesses will have the opportunity to compare locally and globally. Investors will
be able to distinguish and invest in businesses that embrace sustainability and
corporate social responsibility, so that businesses that are indifferent will gain a
competitive advantage (Borsa Istanbul 2015).
References
Aksoy, Ç. (2013). Scale suggestion for evaluation of sustainability performance and its
application in the establishments in Turkey (Published doctorate thesis). Marmara University,
Institute of Social Sciences, Istanbul.
Altunbaş, D. (2008). The role of local governments in urban sustainability: Izmir metropolitan
municipality example (Published graduate thesis). Çanakkale Onsekiz Mart University,
Institute of Social Sciences, Çanakkale.
Aras, G., & Crowther, D. (2008). Governance and sustainability: An investigation into the
relationship between corporate governance and corporate sustainability. Management
Decision, 46(3), 433–448.
Bansal, P. (2005). Evolving sustainability: A longitudinal study of corporate sustainable
development. Strategic Management Journal, 26, 197–218.
Besler, S. (2009). Corporate sustainability through management approaches. Istanbul: Beta
Edition Publishing.
Beyhan, S. G., & Ünügür, S. M. (2005). Sustainable tourism and identity model in the context of
contemporary needs. ITU Review, 4(2), 79–87.
Chung-Fah, H., Wang, J., & Lin, T. (2011). Resource sufficiency, organizational cohesion and
organizational effectiveness of emergency response. Natural Hazards, 58, 221–234.
Çalışkan, A. (2012). Sustainability report. Journal of Accounting and Taxes World, 1, 46–68.
Demirkaya, M. A. (2014). Ensuring sustainability by financial planning and financial risk
management in SMEs and an application example (Published doctorate thesis). Marmara
University, Institute of Social Sciences, Istanbul.
Doğru, G. (2012). The role of strategic human resources management in corporate sustainability.
(Published graduate thesis). Dokuz Eylül University, Institute of Social Sciences, İzmir.
Dyllick, T., & Hockerts, K. (2002). Beyond the business case for corporate sustainability. Business
Strategy and the Environment, 11(2), 130–141.
English, M. D., Schooley, D. K. (2014). The evolution of sustainability reporting. Accounting and
Auditing, pp. 26–36.
Ergün, N. (2012). Place and importance of SMEs and entrepreneurs in Turkish economy. Key
Efficiency in Development, 287, 4–6.
Gao, S., Heravi, S., & Xiao, J. (2005). Determinants of corporate social and environmental
reporting in Hong Kong: A research note. Accounting Forum, 29, 233–242.
Gladwin, T., Kennely, J., & Krause, S. T. (1995). Shifting paradigms for sustainable development:
implications for management theory and research. Academy of Management Review, 20(4),
874–907.
Grandar, A., & Purcell, J. (2012). A guide for assurance on SME sustainability reports. Australia:
Southbank, CPA.
Gürlük, S. (2001). Rural development and sustainable development in the world and Turkey.
Journal of Uludag University Faculty of Economics and Administrative Sciences, 19(4), 1–12.
Hahn, T., & Scheermesser, M. (2006). Approach corporate sustainability among german
companies. Corporate Social Responsibility and Environmental Management, 13(2), 150–165.
https://www.borsaistanbul.com/docs/default-source/genel-kurul-2015/bias-2015-olagan-genel-
kurulunda-yapilan-sunum.pdf?sfvrsn=6. July 22, 2014.
ICAEW, Institute of Chartered Accountants in England and Wales. (2004). Sustainability: The
Role of Accountants. http://www.icaew.com/*/media/Files/Technical/Sustainability/
sustainability-the-role-of-accountants-2004.pdf. July 22, 2014.
Kuşat, N. (2012). Corporate sustainability and inner elements for sustainable businesses. Afyon
Kocatepe Üniversitesi Faculty of Economics and Administrative Sciences Journal, 14(2), 227–
242.
Moon, J. (2007). The contribution of corporate social responsibility to sustainable development.
Wiley Inter Science Published, Sustainable Development, 15, 296–306.
Nemli, E. (2004). Sustainable development: Environmental and social approaches of companies.
Istanbul: Filiz Bookstore.
Özalp, I., Tunus, H. Z., & Sarikaya, M. (2008). A research on the perceptions of corporate social
responsibility of students of faculty of economics and administrative sciences. Anadolu
University Journal of Social Sciences, 8(1), 69–84.
Özdemir, H. Ö. (2007). The impact of corporate social responsibility perceptions of employees on
organizational identification, organizational commitment and job satisfaction: Application for
Opet employees (Published doctorate thesis). Marmara University, Institute of Social Sciences,
Istanbul.
Özer, O. (2010). Corporate sustainability measurement: Sectoral comparative analysis of
European and US companies (Published graduate thesis). Yıldız Technical University,
Institute of Social Sciences, İstanbul.
Özmehmet, E. (2008). Sustainable development approaches in the world and Turkey. Journal of
Yaşar University, 3(12), 1853–1876.
Sancar, G. A. (2013). Corporate governance in the context of corporate sustainability: The rise,
development and evaluation of the concept. Selçuk Communication Journal, pp. 71–84.
Sarıkaya, M., & Kara, Z. (2007). The role of the business in sustainable development: Corparate
citizenship. Celal Bayar University Journal of Faculty of Economics and Administrative
Sciences, 14(2), 222–233.
Schaltegger, S., & Burritt, R. L. (2010). Sustainability accounting for companies: Catch Phraseor
decision support for business leaders? Journal of World Business, 45, 375–384.
Steurer, R., Langer, M. E., Konrad, A., & Martinuzzi, A. (2005). Corporations, stakeholders and
sustainable development: A theoretical exploration of business-society relations. Journal of
Business Ethics, 61(3), 263–281.
Şenal, S., Aslantaş Ateş, B. (2012). Accounting and reporting for corporate sustainability.
Accounting and Auditing Perspective Journal, pp. 83–97.
Tokgöz, N., & Önce, S. (2009). Corporate sustainability: Alternative to traditional management
approach. Afyon Kocatepe University Journal of Faculty of Economics and Administrative
Sciences, 1(1), 249–275.
Tüm, K. (2014). Corporate sustainability and accounting reflections: Sustainability accounting.
Journal of Academic Approaches, 5(1), 58–81.
WCED. (1987). Report of World Commission on Environmental and Development, Development
and International Economic Co-Operation.
Weber, M. (2008). The business case for corporate social responsibility: A company-level
measurement approach for corporate social responsibility. European Management Journal, 26
(4), 247–261.
Wilson, M. (2003). Corporate sustainability: What is it and where does it come from? Ivey
Business Journal, 67(4), 1–5.
Yanık, S., & Türker, İ. (2012). Developments in sustainability and social responsibility reporting.
Journal of Istanbul University Faculty of Political Sciences, 47, 291–308.
Yavuz, V. A. (2010). Concept of sustainability and sustainable production strategies in terms of
businesses. Mustafa Kemal University Journal of Social Sciences Institute, 7(14), 63–86.
Yönet, N. K. (2010). The role of professional accountants in sustainability reporting. Management-

İstanbul University Faculty of Business Administration Economics Institute Journal, 21(65),
65–80.
Zink, K. J., Steimle, U., & Fischer, K. (2008). Human factors, business excellence and corporate
sustainability: Differing perspectives, joint objectives. Corporate Sustainability as a Challenge
for Comprehensive Management, pp. 3–18.
Zeynep Şahin was born in Rize in 1981; he completed his primary, secondary, and high school
education in Trabzon. He started his studies at the Black Sea Technical University, Faculty of
Economics and Administrative Sciences, Department of Business Administration. In 2005, he
started as Lecturer at the Black Sea Technical University, Vakfıkebir Vocational School,
Department of Accounting and Tax Applications. In the same year, he earned a master’s degree in
the Department of Econometrics at the Black Sea Technical University, Institute of Social Sciences
and completed his master’s degree in 2008. He served as head of department between 2005 and
2008. Between 2008 and 2010, he served as Assistant Director. In 2017, he completed his
doctorate at the Black Sea Technical University, Institute of Social Sciences, Department of
Business Administration. Zeynep ŞAHIN, who still continues to serve as Lecturer at the Black Sea
Technical University, Vakfıkebir Vocational School, is married, a boy and a girl’s mother.
Fikret Çankaya was born in 1966 in Trabzon; he went to the elementary school at The Bakirköy
Ahmet Hamdi Tanpinar elementary school in Istanbul, the secondary school and the high school at
The Küçükçekmece High School in Istanbul. He received his B.A. degree in Economics from the
Black Sea Technical University in 1990. Following his graduation, he started to study toward the
degree of M.B.A. and became a Research Assistant in 1992 at the Black Sea University. He
received his M.B.A. degree in 1993 with the thesis named The Fund Creating Capacity and
Financial Analysis in the Insurance Sector. He enrolled the Ph.D. program in 1994 and graduated
in 1999 with the thesis titled Evaluating The Quality Costs With the Accounting Focus and The
Quality Costs Applications in Turkey at the department of Business Administration at the same
university. He became Assistant Associate Professor and Associate Professor in 2001 and 2010,
respectively, and then he became Professor in 2015 at the same university. He worked as Vice
Dean at the Communication Faculty between the years 2006–2010 and Vice Chair at the
department of business administration for the period between 2013 and 2015 at the same
university. He has been Faculty Member at the same university since he got his Ph.D. degree.
Chapter 5
Sustainable Development and Industry
Revolutions
Meltem Okur Dinçsoy
Abstract The Industrial Revolutions are mainly divided into four groups which are
Industry 1.0, 2.0, 3.0 and 4.0. It is obvious that the previous revolution triggers the
new one and the process of entering the Industrial Revolutions differs from country
to country. The importance of sustainability has systematically emerged for all
nations, and 17 basic goals have been identified by the United Nations for leaving a
better world for future generations. Therefore, the process of Industrial 4.0
revolution will make better contributions in achieving SDGs with more efficient use
of natural resources, human power and the advance technology.
Keywords Sustainable development Industry Revolutions Sustainable

Development Goals
5.1 Introduction
The World Economic Forum in 2016 divided the Industrial Revolutions mainly into
four groups as the First Industrial Revolution, the Second Industrial Revolution, the
Third Industrial Revolution, and the Fourth Industrial Revolution. Recently, the
same historical Industrial Revolution process is also categorized as Industry 1.0,
2.0, 3.0, and 4.0. When the revolutions are examined, it is obvious that previous
revolution triggers the new one. Also, when the development processes of the
countries are examined, the process of entering and completing the Industrial
Revolutions differs from country to country. The UK was the leading country for
the Industry 1.0 with its iron and coal reserves; however, Germany with its strong
technology has led the Industry 4.0 and the countries which are unadaptable for the
Industry 4.0 will gradually disappear from competitive world markets. The energy
demand depending on mechanization in production increased during the all
M. O. Dinçsoy (&)
Department of Economics, Faculty of Economics and Administrative Sciences,
e-mail: meltemokurdincsoy@trakya.edu.tr

62 M. O. Dinçsoy
Industrial Revolutions. Fossil fuels were mainly used in the First and the Second
Industrial Revolutions and renewable, clean or green energy technologies addi-
tionally gained importance in the third and the fourth Industrial Revolutions. The
concept of sustainability has systematically emerged in all these industrial devel-
opment processes by indicating natural resources are limited and exhaustive. The
United Nations Development Program (UNDP), which is the global development
network of the United Nations, identified The Sustainable Development Goals
based on the common action of all countries and 193 countries signed the 2030
Sustainable Development Goals in January 2016. For leaving a better world for
future generations, 17 basic goals have been identified, including poverty reduction,
climate change—disaster risk, economic inequality, and democratic governance—
peacebuilding. From the perspective of sustainability, unlike other Industrial
Revolutions, Industry 4.0 process will make contributions in achieving these goals
with more efficient use of natural resources, human power, and the advance
technology.
5.2 Sustainable Development and the Goals
With the Industrial Revolution in the nineteenth century, agriculture using tradi-
tional methods (done by human and animal power) was replaced with harvesters
and, consequently, the transition from a production style using manpower to a
production style using mechanical power started. All these developments first
spread to Europe and then, to the whole world, beginning to enhance people’s level
of wealth. The increase in welfare brought along new socio-economic develop-
ments. The world population started to grow faster. The number of factories and
people working in these factories increased. Industrial cities began to emerge.
Railway networks enabled the transportation of food, raw materials and energy
resources needed by people and production.
While environmental, demographic, social and economic adversities triggered
by intense industrialization and industrial development became the current research
subjects after the 1960s, it became a necessity for all countries to take common
steps for the future of the world. In this context, the Club of Rome that was
established in 1968 and is still an active organization in the international arena
commissioned to an MIT (Massachusetts Institute of Technology) team led by
Meadows to prepare a report titled “The Limits to Growth” in 1972. In the report,
the MIT team determined five fundamental factors—population growth, food
production, industrialization, depletion of natural resources and environmental
pollution and examined the relationships between them. In the report, Meadows
et al. stated that mankind’s life on Earth will end within the next hundred year if the
world’s population continues to grow in its current rate, industrialization and
economic growth rate continue unchanged, food products are not diversified, new
natural resources are not found to sustain production mechanism, and no cure is
found to stop environmental pollution/degradation (1972, pp. XI–XVIII).
5 Sustainable Development and Industry Revolutions 63
The Brundtland Report1 published by the World Commission on Environment

and Development in 1987 as the continuation of a process started with the
acceptance of the “Declaration on the Human Environment”, the first global dec-
laration on environment, in Stockholm in 1972 formed the basis of sustainability
work extending to the present time. In addition, the “United Nations Conference on
Environment and Development” held in Rio de Janeiro in 1992 witnessed devel-
opments that would lead the nations to the sensitive management of the environ-
ment.2 After a decade, the World Summit on Sustainable Development (Rio+10)
took place in Johannesburg from 26 August to 4 September 2002 (MFA 2002).
The goals commonly stated as “Sustainable Development Goals” or “Global
Goals” comprise 17 universal actions to eliminate poverty, protect the planet and
ensure that all people live in peace and prosperity. In addition to the Millennium
Development Goals, they also include new areas such as climate change, economic
inequality, innovation, sustainable consumption, peace and justice (UNDP 2018;
Table 5.1).
The sustainable development strategy added a new integration to development
problem and suggests replacing short-term economic benefits with long-term and
intergenerational social and ecological benefits (Han and Kaya 2004, p. 238).
According to Schwab (2016, p. 16), Industry 1.0 started in 1760 and lasted until
around 1840. It spearheaded mechanic production with the construction of railways
and use of the steam engine. The Industry 2.0 took place at the end of the nineteenth
century and early twentieth century. At this period, the benefits of electricity and
assembly line enabled mass production. The Industry 4.0 started in the 1960s. It
advanced with semiconductors, host computers (1960s), personal computers (1970s
and 1980s) and Internet (1990s). Therefore, it was called computer revolution or
digital revolution.
Rifkin (2011, p. 41) claims that as result of high amounts of carbon dioxide
emission in the Earth’s atmosphere with the use of coal, oil and natural gas for two
centuries to maintain an industrial lifestyle, the entropy bills created by the First and
Second Industrial Revolutions are about to mature.
On the other hand, Özdoğan (2017, pp. 13–14) maintains that we started to build
machines in the Industry 1.0, improved them with more efficiency in the Industry
2.0, and in the Industry 3.0, we perfected them by combining with computer and
digital world while producing the most up-to-date versions. Thus, industry achieved
a production speed and capacity it never had in its history while management costs
and challenges were eliminated and the need for automation was met.
1
In the Our Common Future Report (Brundtland Report) published by the World Commission on
Environment and Development (WCED) in 1987, sustainable development is defined as “meeting
the needs of the present without compromising the ability of future generations to meet their own
needs”.
2
The United Nations Framework Convention on Climate Change, the Rio Declaration on
Environment and Development, the Convention on Biological Diversity and the Statement of
Forest Principles were prepared.
64 M. O. Dinçsoy
Table 5.1 Sustainable Development Goals

Goals Aim Sustainability for
Goal 1 Poverty Everywhere
Goal 2 Hunger Agriculture
Goal 3 Health Well-being
Goal 4 Education Lifelong learning
Goal 5 Gender equality Women and girls
Goal 6 Availability Water and sanitation
Goal 7 Access Energy
Goal 8 Economy Growth and employment
Goal 9 Infrastructure Industrialization
Goal 10 Inequality Among countries
Goal 11 Cities and settlement Safeness and resilience
Goal 12 Consumption Production patterns
Goal 13 Climate change Urgent action
Goal 14 Oceans and seas Resources
Goal 15 Terrestrial ecosystems Biodiversity
Goal 16 Peace Justice
Goal 17 Partnership Global
Source UN (2018)
Mass production and excessive consumption constantly increased the energy

need, which was met with fossil fuels to a large extent. Contrary to the first two
Industrial Revolutions, there is a tendency towards more environmentally friendly
and renewable energy resources instead of fossil fuels. The most important reason
for that is increased education and declining costs depending on technology that has
been rapidly advancing for the past two centuries.
5.3 Industry 1.0
In 1775, an engineer of Spanish origin named James Watt improved the steam
engine, which was an idea that would revolutionize the world. This development
would change the history of humanity entirely. The steam engine was invented
before Watt; however, its areas of use were limited. Watt improved the functions of
the steam engine with a couple of innovations and revealed the extraordinary
potential of the steam. This invention paved the way for one of the three important
leaps in the history of humanity. The first was the discovery and control of the fire,
the second was the transition to farming, and the third was the use of the steam as a
power source. With this invention, the human history entered a new era and mankind
was saved from dependence on muscle strength for the first time while machines
stepped in. From now on, the world entered a period that would change it very fast.
Being a stagnant town prior to the revolution, Manchester came to life with the
power of the steam engine. People from rural areas flooded in the city to work at the
newly established factories. While Manchester was a small market town with a
population of less than 10,000 in the eighteenth century, it reached 89,000 people at
the end of the century and to 400,000 in 1851 while there were 900,000 people in
the city in 1901 (Griffin 2014). Thus, Manchester went down in history as the first
industrial city in the world.
In Britain, the production of manufactured goods doubled in the second half of
the eighteenth century, and there was an even faster growth in early nineteenth
century. While 30% of labour force was employed in manufacturing and mining
sectors in 1801, this rate went up to 40% after 30 years. Thus, Britain became a
country of great urban manufacturing centres dominated by factory systems.
While Britain was having a period of peace in the eighteenth century, France was
preparing for the 1789 French Revolution, and thus, the Industrial Revolution was
delayed in France. Though late, the country underwent the transformation experi-
enced by Britain and joined her in the Industrial Revolution. The French Revolution
was a politically significant development during the Industry 1.0. While France was
the first country to be influenced with the Industrial Revolution, other countries
such as Germany, Belgium, the USA, Russia and Japan were also affected from the
revolution later, and the world entered a process of industrialization at a great speed.
Industrialized countries gained power and helped the spread of capitalist world
order. The use of the steam engine in locomotives and ships following the factories
enabled the industrialized countries to go to distant places and set up colonies. In
addition, the use of paper money instead of coins became popular under the
leadership of these countries. Credit institutions, banks and central banks were
founded, and consequently, industry improved further. Besides, “The Wealth of
Nations” by Adam Smith became an important source for economy and sociology
in this period.
There were few cities in the world about 250 years ago and people used to live
in the countryside. It continued unchanged for thousands of years until the
invention of the steam engine. Following the Industrial Revolution, rural-to-urban
migration increased and many cities were established throughout the world as in the
case of Manchester. Development further accelerated thanks to the railways and
railway networks built in these cities and millions of people moved to the cities in a
short time, consequently paving the way for the emergence of megacities. The
revolution also triggered the greatest mass migrations witnessed in the modern
world. The global economy spread from the centre to the periphery rapidly.
Increasing number of factories and people in the cities created air and environ-
mental pollution. Urban population grew in various countries of the world, mostly
in India, China, Japan and the USA.
Furthermore, there were other changes in economic and social structure
following the Industrial Revolution. Structural transformations took place in the
production process. Traditional manufacturing made on the bench at home was
moved to the factories (Özdemir 2014, p. 52). The spread of railways and water
66 M. O. Dinçsoy
canals led to substantial developments in transportation area as well. There were

also developments in healthcare area, which resulted in a growth in the world’s
population. The end of feudalism came and those working with the soil started to
become free. The peasants in the agricultural society became industrial workers in
the city. Breakthroughs were witnessed in agricultural industry as well. With
rural-to-urban migration, the family structure changed. The extended families of the
past were replaced by a new family type called nuclear family. With the disap-
pearance of feudalism, the aristocracy—the landowners of the past—were replaced
by the capitalist bourgeoisie. Freedom movements gained momentum throughout
the world. Enlightenment movements increased, which paved the way for the birth
of modern science. Behavioural patterns of the societies evolved, giving way to the
adoption of behaviours described as rational behavioural pattern. Consequently, a
new society type called industrial society emerged (Table 5.2).
5.4 Industry 2.0
Industry 2.0 is usually dated 1870–1914. Although this revolution is considered in

general as the continuation of the previous revolution, it brought along its specific
innovations and technological leadership spread beyond the British borders. While
the Industry 1.0 was spearheaded by coal, oil and electricity became the funda-
mental driving force in energy area in the Industry 2.0. With the use of electric
power and transition to mass production, product range and output increased while
production costs were reduced. In parallel, the wealth of societies increased thanks
to the advances in technological and transportation area.
In this second phase of the Industrial Revolution, the markets where coal, raw
materials and industrial products were sold increased in value while the countries
which were unable to share these materials started to fight, leading to the First
World War.
Social changes caused by the steam engine resulted in the birth of such regimes
as capitalism and communism. In this period of substantial changes, countries like
Britain, Germany and the USA conducted research to get more efficiency from the
chemical energy in the coal. Thus, the science of thermodynamics was born and the
new experiences influenced the military technology as well (Özilgen 2009,
pp. 161–163; Table 5.3).
The research conducted by a couple of scientists who were pioneers in the field
of radio in 1906, and of electromagnetic, radiation and radio waves in the late 1800s
and early 1900s was of significance in this period. Among them are renowned
figures like Thomas Edison, Nikola Tesla, James Clerk Maxwell, Heinrich Rudolf
Hertz and David E. Hughes. The first radio broadcast in 1922 by BBC made the
radio a highly important media for communicating the news and diverse infor-
mation to the society (http://www.ilkkimbuldu.com/radyonun-icadi/).
The mass production of automobiles made Ford the symbol of the transition
from agriculture to industry in the USA (Gelderman 2018). As result of
Table 5.2 Primary technological developments in Industry 1.0

Year Development/invention
1764 In Britain, cotton-spinning machine was invented to spin cotton brought from the
colonies
1775 James Watt invented the steam engine
1774 Georges Louis Lesage patented the electric telegraph
1775 Jacques Perrier built a steam-powered ship (steamship)
1783 Joseph and Etienne Montgolfier, also called the Montgolfier brothers, flew the first hot
air balloon
1783 The first parachute was used by Sebastian Lenormand
1783 Montgolfier brothers invented hot air balloon
1784 Andrew Meikle built the threshing machine
1786 The Scottish millwright Andrew Meikle invented the first threshing machine for
agricultural use
1804 Friedrich Winzer (Winsor) was the first person to obtain a patent in gas lightning
1807 Robert Fulton used steam power in the ships and transoceanic voyages started
1809 Humpry Davy invented the first light bulb; however, it was not so successful (arc lamp)
1814 Joseph Nicéphore Niépce made the first permanent photographic image. It required 8 h
exposure time to obtain the image
1816 Rene Laennec invented the stethoscope
1824 Steam engines were used in the locomotives for the first time
1825 George Stephenson built the first steam locomotive, Rocket, using advanced steam
engines
1825 William Sturgeon invented the electromagnets
1830 The Germans invented a technique for sugar extraction from beet
1830 Barthelemy Thimonnier invented the sewing machine
1831 Michael Faraday invented the electric dynamo
1834 A. Y. Moore invented the combine harvester
1834 Henry Blair received the patent for the corn seed planter
1835 Charles Babbage invented the mechanical calculator
1838 Samuel Morse developed the Mors alphabet
1839 Kirkpatrick Macmillan invented the bicycle
1844 The first commercial telegraph service started in the USA with the invention of Samuel
Morse
1851 Isaac Singer developed the first practical sewing machine
1858 Jean Lenoir invented the internal combustion engine
1862 Richard Gatling patented the machine gun
1862 Alexander Parkes invented the first plastic
1866 Alfred Nobel invented dynamite
Source BT (2012), Buchanan (2018), Woodford (2018), Robin (2012), Kelly (2018)
68 M. O. Dinçsoy

1870 The first monorail trolley system was used in the slaughterhouses, and the foundations
of serial production were laid (Mass production started with the use of electric power.
Later, the first electrically operated production line was used)
1876 Alexander Graham Bell invented the telephone while conducting work for enabling
the deaf to hear
1879 Thomas Edison invented the durable light bulb that is still used today
1879 Ernest Von Siemens developed an electric train which was used as streetcar in the city
1885 Gottlieb Daimler and Carl Friedrich Benz found how to use efficiently in the internal
combustion engine the gasoline which was a low-value by-product of the gas oil used
in lamps (Benz made history as the inventor of the modern gasoline-powered
automobiles. The development of internal combustion engine is one of the greatest
developments in the world. As gasoline is lighter and produces more energy than coal,
it supplanted the steam power produced from coal.)
1895 Marconi invented the radio and telegraph
1898 Ferdinad Von Zeppelin invented the rigid airship named Zeppelin to carry passengers
1901 The first radio wave was transmitted successfully
1902 Willis Carrier invented the air conditioner
1902 George Claude invented the neon light
1903 Wilbur and Orville Wright—the Wright Brothers—flew their own aircraft by adding
two wings to the gasoline engine (With their engined aircraft design, the most
significant step in the history of aviation was taken)
1904 Benjamin Holt manufactured a tractor
1907 Auguste and Louis Lumiere invented colour photography
1907 The first helicopter was built
1908 Henry Ford revolutionized factory production with his assembly-line methods, and
mass produced the Model T (The American businessman Ford brought mass
production to the automobiles, and thus, he is considered as the symbol of the shift
from agriculture to industry in the USA (Gelderman 2018))
1911 Charles Franklin Kettering invented the first automobile electrical ignition system
1914 Garrett A. Morgan created the gas mask
1914 Henry Ford developed the Fordist production model
1916 Brearly Henry invented stainless steel
1919 Shortwave radio and flip-flop were invented
1922 BBC started its first radio broadcast
1926 Robert H. Goddard built the first liquid-fuelled rocket
1925 John Logis Baird invented the television
1931 Vannevar Bush invented the analogue computer
1933 Edwin Howard Armstrong invented the frequency modulation (FM)
1937 Chester F. Carlson invented the xerography
1937 The first jet engine was built
1939 Igor Skorsky built the Sikorsky helicopter which was the first prototype of the modern
helicopters
1940 Dr. William Reich Orgon invented the accumulator
(continued)

1942 John Atanasoff and Clifford Berry built the first electronic digital computer
1944 Willem Kolff built the kidney dialysis machine
1945 The atomic bomb was invented
1945 The computer named ENIAC was built for military purposes
1946 Percy Spencer invented the microwave oven
1947 The first mobile phone was invented (not with portable size)
1947 Bardeen, Brattain and Shockley invented the transistor
1951 Charles Ginsburg developed the first videotape recorder (VTR)
1952 Edward Teller and his team built the hydrogen bomb
1953 Texas Instruments developed the transistor radio
1955 The fibre optic cable was produced and put in use
1956 The hard disc was used in a computer for the first time
1959 Jack Kilby and Robert Noyce invented the microchip
1964 John George Kemeny and Tom Kurtz developed BASIC programming language
1967 The first handheld digital calculator was created
1968 Douglas Engelbart invented the computer mouse
1968 The first computer using integrated circuits was built
1968 Robert Dennard invented RAM (random access memory)
1969 Arpanet (the first Internet) was invented
1969 ATM was invented
Source BT (2012), Buchanan (2018), Woodford (2018)
developments concerning the automobile and its transformation into a vehicle that
could be used not only by the rich but also everybody, the automobile became the
main prop of the American economy. With the mass production of the automobile,
the American economy boomed, great highways and bridges were built, and
migration increased. Both internal migration and immigration from every part of the
world to the USA provided cheap labour and thus, national exports, population and
wealth increased.
With these developments led by Ford, two prominent movements emerged. The
first is Fordism which is a production system developed until 1914. As the first
movement of capitalist development, Fordism introduced the assembly line in
production, paving the way for mass production. And there is the second movement
of capitalist development called post-Fordism since the 1970s. This movement
brought along a more efficient approach in satisfying consumer needs with a
flexible production and accumulation regime, resulting in the increase in produc-
tivity (Saklı 2007, pp. 1–18).
In 1945, a group of scientists built a computer called ENIAC for military pur-
poses. The computer used vacuum tubes and was pretty fast compared to its pre-
decessor. With the ENIAC, the transition to electronic computer started and
mechanical hardware gave way to electronic circuits and transistors were replaced
70 M. O. Dinçsoy
by integrated circuits and the developments in computer technology gained

momentum since 1964 (BilgiUstam 2018). Consequently, the production of faster,
more reliable and cheaper computers started.
In this period defined as the second Industry 2.0 by the historians, Germany and
the USA led the way in the application of science to technology in a more sys-
tematic way. Despite being less fortunate in terms of coal and lacking in visionary
workers compared to Britain, Germany closed this gap soon through technical
training and took a leading part in this revolutionary process. Germany and the
USA also made the twentieth century the age of oil, automobiles and aircrafts
(Morris 2010, pp. 81). While Britain was the centre for the accumulation of
knowledge during the development of steam technology, accumulation of knowl-
edge during the developmental process of internal combustion engine concentrated
in Germany and opened the way for the development of jet engine. In parallel,
significant advances were made in space technology in the Nazi period. With the
defeat of Germany in the Second World War, Russia and the USA each captured
one facility that was developing this technology and took the scientists working in
there to their own countries by force at the end of the war. Thus, the centre for the
accumulated knowledge of space technology changed and technological develop-
ment continued with the competition between the USA and Russia (Özilgen 2009,
p. 174).
In brief, steel, chemicals, electricity, transport, production engineering,
agriculture and food processing, household technology and human welfare domi-
nated the Industry 2.0.
5.5 Industry 3.0
The world is currently undergoing is called the age of information technology that
started after the Second World War and gained momentum after the 1970s with the
digitalization of production. We can claim that this revolution coinciding with the
globalization of industry and trade began with the integrated use of electronics and
information technologies.
From the beginning, the most important characteristics of the oil age were
giantism and centralization. Drilling for fossil fuels like oil requires large amounts
of capital, vertical scale economies, top-down command and supervision structure,
because oil trade is not only one of the biggest industries in the world, but also
collecting, processing and distributing energy is a costly business. Furthermore,
automotive, modern finance, energy, telecommunications and construction indus-
tries that emerged from the oil culture have a tendency to grow for having their own
scale economies, and they need large capital and have a central organization just
like the oil industry (Rifkin 2011, pp. 157–158).
The theory that best explains top-down organizational structure characterizing
the first two Industrial Revolutions is trickle-down theory. According to this theory,
if those at the top of the industrial pyramid depending on fossil fuels make profit, a
good deal of this wealth goes to those at the lower steps and thus, everybody in the
economy benefits (Aghion and Bolton 1997, p. 151). In the first two Industrial
Revolutions, those at the top of the pyramid received a very large share compared to
others.
Industry 3.0 occurred at a time when the resources in the world were depleting
very fast. This period gave rise to the idea that the sustainability of the world
became difficult due to the environmental pollution and irresponsible use of
resources as result of the first and second Industrial Revolutions, and thus, urgent
solutions were needed. To protect the natural life and environment and achieve
sustainable development, remedies were sought to prefer renewable energy
resources that are less harmful to the nature instead of fossil fuels and to reduce
energy consumption with technological developments.
In addition, the fact that fossil fuels like coal and natural gas are non-renewable
and will be exhausted and the search for alternative energy resources like renewable
energy have become a significant subject in this period. The availability of
renewable energies in all parts of the world unlike the fossil fuels and their being
free mostly have become the motives to prefer them and introduced ideas to create
local healthy economies.
The significant characteristics of this period are widely and economical use of
renewable energy like solar, wind, ground and hydrogen energies, buildings’
capacity to produce their own energy, development of energy storage techniques,
green economy, transition to zero-emission transportation with electrical trans-
portation systems, and development of opportunities to allow Internet and energy
infrastructures work in concert. Synthetic goods, computer technology, micro-
electronic technology, fibre optics, telecommunications, biogenetics, bio-agriculture
and laser technology have become determining factors in this period.
According to Rifkin (2012, pp. 4052–4057), there are five pillars for Industry 3.0
which are increasing the use of to renewable energy; altering the buildings for green
micro-power systems with renewable energies; distributing the hydrogen and other
storage technologies in the buildings with an infrastructure to store; transforming
the current energy networks into an energy system that is sharable in the continents
just like the Internet network; and replacing the transportation systems to electric
vehicles that can buy and sell through energy network which is smart, interactive
and continental (Table 5.4).
Microcredit3 practice first started in a small village in Bangladesh in the 1970s
by providing loan to 42 destitute women. Due to its successful results, the target
group benefitting from this service expanded and it turned into a microfinance
system adding services to its service range like savings, insurance, and money
transfer (Gökyay 2008, p. 104).
Beginning in the 1990s, large-memory and fast computers, powerful program-
ming languages and operating systems were developed (BilgiUstam 2018).
3
Microcredit is a small capital system extending credit, with no collateral and guaranty, to
low-income women to engage in income generating activities on their own.
72 M. O. Dinçsoy

1970 Alan Shugart invented the floppy disc
1971 The dot-matrix printer was invented
1971 The liquid-crystal display (LCD) was invented by James Fergason
1971 Faggin, Hoff and Mazor produced the microprocessor
1972 The word processor was invented
1973 The Ethernet (local computer network) was invented by Robert Metcalfe and Xerox
1975 The laser printer was invented
1976 The ink-jet printer was invented
1979 The cell phone was invented
1979 Seymour Cray invented the supercomputer
1979 Walkman was invented
1981 MS-DOS was invented
1981 The first IBM PC was invented
1984 CD-ROM was invented
1984 Apple invented Macintosh
1985 Windows operating system was invented by Microsoft
1987 The first 3D video game was invented
1988 The digital cellular phone was invented
1989 High-definition television was invented
1990 The World Wide Web and Internet protocol (HTTP) was created by Tim Berners-Lee
1991 The digital answering machine was invented
1993 The Pentium processor was invented
1995 The Java computer language was invented
1995 DVD (digital versatile disc or digital video disc) was invented
1996 Web TV was invented
1997 The gas-powered fuel cell was invented
2001 Self-cleaning window was invented by PPG Industries
2001 The iPod was produced
2003 Toyota produced a hybrid car
2005 YouTube, online video sharing and viewing community, was launched by Steve Chen,
Chad Hurley and Jawed Karim in 2005
2006 The iPhone was invented
2007 Hilmi Volkan Demir and his students Sedat Nizamoğlu, Tuncel Özel and Emre Sarı
developed a light source using nanotechnology as an alternative to Edison’s light bulb
2008 Sony developed a system to generate electricity from sugar
2009 The wearable keyboard was built. When you use the light reflected to your arm as a
button, the system realizes which button is pushed by listening to the sound generated by
your contact
2010 Square, a payment platform created by Twitter co-founder Jack Dorsey, transforms your
mobile phone to a pos device and enables shopping with credit cards
Source BT (2012), Buchanan (2018), Woodford (2018)
Core memory used in old computers started to be replaced with magnetic internal
memories, and computer costs have decreased consistently.
TOMs’ system created in 2006 by Texan entrepreneur Blake Mycoskie is an
entrepreneurial trade model. Founded as a social enterprise, it uses the business
model “Buy one, give one”. According to this model, for every pair of shoes sold at
TOMs, a pair is donated to a child in need. Similarly, a portion of the profit obtained
from every eyeglass sold at TOMs is used for the treatment of people with visual
impairment in developing countries (https://www.bulusum.biz/HaberDetay/6). This
business model has been adopted by the firms, enterprises and consumers desiring to
have both commercial and social value in the business world.
The concept of carbon footprint and its reduction has also gained importance in
this period. Carbon footprint is defined as “the harm created by carbon dioxide
(CO) emission, which is considered as the primary reason for global warming, leads
to the formation of gases causing greenhouse effect and is released to the atmo-
sphere with the use of fossil fuels, as result of energy use for the production of
goods directly or indirectly consumed by individuals and companies” (http://www.
karbonayakizi.com). On the subject, various social projects were prepared and put
into implementation in several parts of the world. For example, projects such as
carsharing and CouchSurfing4 contributed to reduce the carbon footprint of thou-
sands of tourists. Similarly, an international transport network company developed,
marketed and run the mobile application Uber in 2015. Travis Kalanick, Founder of
Wikipedia, wondered if there was any way to enable people to use the same roads
for the purpose of sharing travel time, decreasing costs and reducing carbon foot-
print, and finally developed this model. In the first eight months, the roads and sky
in Los Angeles were saved from 7.9 million miles and 1400 metric ton of carbon
dioxide. Kalanick claims that it will also benefit the passengers in the suburbs
(https://www.uber.com/tr/).
With the technology in our pockets today, and a little smart regulation, we can turn every
car into a shared car and we can reclaim our cities starting today.
5.6 Industry 4.0
Industry 4.0 can be defined as a revolution that emerges with the management of
production processes though scientific methods based on data as well as smart
production methods. According to Economic Forum journal published by the
Union of Chambers and Commodity Exchanges of Turkey (TOBB), while
4
CouchSurfing is a hospitality network based on the idea of using social networks in tourism and
people‘s helping each other. It helps people to get in touch with other people who will host and
show hospitality to them at places they visit (Kaya 2016).
74 M. O. Dinçsoy
industrial production and quality increases with Industry 4.0, raw material waste
will be reduced, scarce resources such as water and electricity will not be used
excessively, and consequently, the natural and environmental pollution will de-
crease (TOBB 2016, p. 18). On the other hand, other discerning characteristics of
this period are the opportunities in marketing strategies offered by technology and
networks. For example, the largest retailer (Amazon) does not have a single store
while the largest accommodation provider (Airbnb) do not own any hotel and the
largest transportation provider (Uber) does not have a single car (Schwab 2016,
p. 170).
Industry 4.0 continues to provide new opportunities in many areas ranging from
the determination of system failures to reducing them, from environmentally
friendly production techniques to resource saving, from sustainability to increase in
productivity, from flexible production to cost reduction and from new service areas
to new business models (Selek 2017). However, this process also has certain
determinants (Rüßmann et al. 2015, p. 2).
The Nine Pillars of Technological Advancement
1. Big data and analytics
2. Autonomous robots
3. Simulation
4. Horizontal and vertical system integration
5. The industrial Internet of things
6. Cybersecurity
7. The cloud
8. Additive manufacturing
9. Augmented reality.
5.6.1 Big Data and Analytics
Big data covers all kinds of accumulated data ranging from working sheets to
databases, providers and cloud services. Big data analytics is the process of
examining all data sets collected from different areas such as postings on the
Internet and databases, photograph archives and transactions recorded in the
Internet to organize them in a practical format (Martinek and Stedman 2017). In
addition, this kind of analysis allows organizations to use their data to have new
opportunities. Consequently, it helps them to have more efficient operations,
smarter business moves, higher profits and happier customers (https://www.sas.
com/en_us/insights/analytics/big-data-analytics.html).
5.6.2 Autonomous Robots
Autonomous robots can get information about their environments, work for an
extended period of time without human intervention, move themselves throughout
the operation without human assistance and can avoid situations that are harmful to
themselves or people and property (https://www.robots.com/articles/viewing/what-
are-autonomous-robots). Moreover, this kind of robots is capable of making their
own decisions just like humans and act accordingly. An autonomous robot has the
ability to perceive their environment, depends on programmed decisions to know
this environment and can start a movement or manipulation in that environment
(https://stanleyinnovation.com/what-autonomous-robots/).
5.6.3 Simulation
Simulation means making an imitation of something. Three-dimensional simula-

tions of goods, materials and production processes are used in designing phases
today. It is expected that the use of simulations in factory operations will become
widespread. These virtual models developed using real-time data create the virtual
reality of the physical world as well as machines, products and humans. Thus,
operators expect to have the opportunity to virtually test machine parameters for the
goods in the production line before arranging in a physical setting, cut down on
setup times and improve product quality.
5.6.4 Horizontal and Vertical System Integration
Companies, suppliers and customers rarely have end-to-end linkage; i.e., most of
the systems are not integrated. This is also true for engineering design, production
and service functions. This system aims to ensure that companies, units and
competences become more compatible with each other with the development of
company-wide universal data integration networks.
5.6.5 The Industrial Internet of Things
IIoT, also known as industrial Internet of things, involves sensor data in industrial
settings, machine learning that uses machine-to-machine (M2M) communication
and automation techniques, and big data technology. Smart machines can capture
data and communicate more accurately and consistently compared to humans.
Therefore, they can enable companies to predict inefficiencies and problems earlier
76 M. O. Dinçsoy
save money and time and support business intelligence work. Furthermore, IIoT has
great potential in terms of quality control, sustainable and green practices, trace-
ability of supply chain and supply chain efficiency in general (Aberle 2014).
5.6.6 Cybersecurity
Cybersecurity refers to technologies, processes and practices designed to protect

networks, computers, programs and data against attacks, damage or unauthorized
access. In the context of data processing, security covers both cyber security and
physical security (Clark 2018). Effective cyber security reduces risk of cyber-attack
and defends organizations and individuals from the unauthorized use of systems,
networks and technologies (https://www.itgovernance.co.uk/what-is-cybersecurity).
5.6.7 The Cloud
Thanks to the development of cloud information technology, it has become possible

to store and access large data sets on the Internet. In line with these opportunities,
the concept of big data, one of the buildings blocks of Industry 4.0, can be put in
place in the industry (Bulut 2017). Without computing services, the cloud platforms
cannot combine automation, robotics or IIoT and provide new and innovative
applications (Giraud 2016).
5.6.8 Additive Manufacturing
The concept of additive manufacturing (3D printing) refers the production by the
addition of materials like plastic or liquid resin on top of each other. Thanks to the
advanced technology, adding points are not seen in the product as these are
wafer-thin layers. In this regard, 3D printers are classified differently among
themselves. The most important element causing this difference is the technology
developed specifically for the material (Dirim 2016).
5.6.9 Augmented Reality
Augmented reality enables to feel and experience a physical setting in the real
world live, dynamically and real time with computer-generated sensory inputs
(http://www.endustri40.com/artirilmis-gerceklik-augmented-reality/). It is consid-
ered that augmented reality will occupy a great part of our lives in the future. Also
being an enhanced version of reality, live direct or indirect views of physical

real-world environments are augmented with superimposed computer-generated
images over the user’s view of the real world, and thus, the perception of reality is
enhanced (http://www.realitytechnologies.com/augmented-reality).
5.7 Conclusion
While man, water and steam powers were critical for a weaving loom in the
eighteenth century, the past two centuries witnessed the beginning of an industrial
age in which the need for manpower has decreased with robots taking over pro-
duction while it has become important to be good at efficiency, quality, flexible
production, supply chains and technology as well as having competitive advantage.
Although this revolution has not spread around the world yet, it has brought along
fundamental changes for national economies such as flexible production with
higher added-value and data-based decision making.
While developed and developing countries that have been exploiting resources
for mass production in the second and third revolutions have turned to materials and
energy with the Industry 4.0, the transition to a more productive economy and more
ecological technologies has become a necessity.
The return of manufacturing industry to the advanced economy countries led to
the beginning of a more dangerous scenario for the low-income countries that offer
low-cost opportunities, because low labour cost is no longer a factor that increases
the competitive power of firms. Although it is considered that Industry 4.0 will
provide new professions for people, it is unlikely that it will offer the expected
remedies to unemployment due the growth in world’s population.
Consequently, the concept of sustainability has entered into a process of trans-
formation from its theoretical and conceptual structure until today into a structure
that benefits the environment more, extending to the Internet of things, smart
technologies, smart cities, driverless vehicles, decision-making mechanisms with
big data, sharing economy and healthier individuals who live longer.
References
Aberle, L. (2014). Industrial internet of things (IIoT). http://internetofthingsagenda.techtarget.com/

definition/Industrial-Internet-of-Things-IIoT. Accessed 12.02.2018.
Aghion, P., & Bolton, P. (1997). A theory of trickle-down growth and development. The Review of
Economic Studies, 64(2), 151–172.
BilgiUstam. (2018). Bilgisayarın İcadı, Tarihçesi ve Dünyanın İlk Bilgisayarı. http://www.
bilgiustam.com/dunyanin-ilk-bilgisayari-ve-bilgisayarin-tarihcesi/. Accessed 06.03.2018.
BT. (2012). Bilim-Teknoloji, Bilim ve Teknoloji Tarihi (Kronolojik Olarak Buluşlar). http://www.
bilim-teknoloji.com/bilim-ve-teknoloji-tarihi-bilim-ve-teknolojinin-tarihsel-gelisimi/. Accessed
17.04.2018.
78 M. O. Dinçsoy
Buchanan, R. A. (2018). History of technology. https://www.britannica.com/technology/history-

of-technology/The-Industrial-Revolution-1750-1900. Accessed 17.04.2018.
Bulut, C. (2017). Bulut Bilişim (Cloud Computing) Nedir? Türkiye’nin Endüstri Platformu.
Clark, C. (2018). Cybersecurity. http://whatis.techtarget.com/definition/cybersecurity. Accessed
15.02.2018.
Dirim, A. (2016). Eklemeli Üretim (Additive Manufacturing) Nasıl Bir Devrimdir? Tasarımdan
İmalata Eğitim Mühendislik Hizmetleri. http://www.tasarimdanimalata.com/eklemeli-uretim-
additive-manufacturing-nasil-bir-devrimdir/. Accessed 02.02.2018.
Gelderman, C. W. (2018). Henry Ford American industrialist. https://www.britannica.com/
biography/Henry-Ford, Accessed 25.05.2018.
Giraud, P. (2016). Why cloud technology is central to Industry 4.0, information age. http://www.
information-age.com/cloud-technology-central-industry-4-0-123462532/. Accessed 24.03.
2018.
Gökyay, Ç. (2008). Türkiye’de Mikro Kredi Uygulamaları ve İstihdama Yansımaları (p. 104).
Uzmanlık Tezi: Çalişma Ve Sosyal Güvenlik Bakanliği Türkiye İş Kurumu Genel Müdürlüğü.
Griffin, E. (2014). Manchester in the 19th century. https://www.bl.uk/romantics-and-victorians/
articles/manchester-in-the-19th-century. Accessed 02.06.2018.
Han, E., & Kaya, A. A. (2004). İktisadi Kalkınma ve Büyüme (p. 238). Eskişehir: Anadolu
Üniversitesi Yayınlar.
https://www.bulusum.biz/HaberDetay/6. Accessed 10.03.2018.
http://www.endustri40.com/artirilmis-gerceklik-augmented-reality/. Accessed 05.02.2018.
https://www.itgovernance.co.uk/what-is-cybersecurity. Accessed 24.02.2018.
http://www.ilkkimbuldu.com/radyonun-icadi/. Accessed 06.03.2018.
http://www.realitytechnologies.com/augmented-reality. Accessed 05.02.2018.
https://www.robots.com/articles/viewing/what-are-autonomous-robots. Accessed 24.02.2018.
https://www.sas.com/en_us/insights/analytics/big-data-analytics.html. Accessed 24.02.2018.
https://stanleyinnovation.com/what-autonomous-robots/. Accessed 24.02.2018.
https://www.uber.com/tr/. Accessed 05.03.2018.
Kaya, K. (2016). Couchsurfing Nedir? https://yoldaolmak.com/couchsurfing-nedir.html. Accessed
10.03.2018.
Kelly, M. (2018). The most important inventions of the industrial revolution. https://www.
thoughtco.com/industrial-revolution-inventors-chart-4059637. Accessed 22.04.2018.
Martinek, L., & Stedman, C. (2017). Big data analytics. https://searchbusinessanalytics.techtarget.
com/definition/big-data-analytics.
Meadows, D. H., Meadows, D. L., Randers, J., & Behrens, W. W. (1972). Ekonomik Büyümenin
Sınırları. Çevirenler: Kemal Tosun, Duygu Sezer, Beyza Oba,eser uzun; Sera Özbaşar, Tomris
Somay, Fulya Akar, 1978, İstanbul,İstanbul Üniversitesi Yayını, Arpaz Publisher, pp. 15–18.
MFA. (2002). Dünya Sürdürülebilir Kalkınma Zirvesi (Johannesburg, August 26–September 4,
2002). http://www.mfa.gov.tr/dunya-surdurulebilir-kalkinma-zirvesi_johannesburg_-26-agustos-
4-eylul-2002_.tr.mfa. Accessed 22.04.2018.
Morris, I. (2010). Dünyaya Neden Batı Hükmediyor? https://tr.scribd.com/document/367823892/’-
Morris-Dunyaya-Neden-Batı-Hukmediyor-Şimdilik#Search_search-menu_797612.
Özdemir, Ş. (2014). Sanayi Devriminin Bilim Tarihi Üzerindeki Etkisi: Bilim Ve Teknoloji İç İçe
pp. 52–68.
Özdoğan, O. (2017). Endüstri 4.0, Dördüncü Sanayi Devrimi ve Endüstriyel Dönüşümün
Anahtarları. İstanbul: Deniz Ofset Publiser.
Özilgen, M. (2009). Endüstrileşme Sürecinde Bilgi Birikiminin Öyküsü (pp. 161–162). Ankara,
Arkadaş Publiser.
Rıfkın, J. (2011). The third industrial revolution (P. Sıral ve Murat Başekim Trans.) 2014.
İstanbul: İletişim Publisher.
Rıfkın, J. (2012). The third industrial revolution: How the internet, green electricity, and 3-d
printing are ushering in a sustainable era of distributed capitalism. World Financial Review, 1,
4052–4057.
Robin, L. (2012). Inventions of the industrial revolution (edited by N. Gunnell). https://www.

brighthubeducation.com/history-homework-help/91805-important-inventions-of-the-industrial-
revolution/. Accessed 22.04.2018.
Rüßmann, M., Lorenz, M., Gerbert, P., Waldner, M., Justus, J., Engel, P. & Harnisch, M. (2015).
Industry 4.0: The future of productivity and growth in manufacturing industries (p. 2). Boston
Consulting Group.
Saklı, A. R. (2007). Kapitalist Gelişim Sürecinde Fordizm ve Post-Fordizm (pp. 1–18). Ankara.
http://ses.org.tr/wp-content/uploads/fordizmpostfordizm.pdf. Accessed 15.01.2018.
Schwab, K. (2016). The fourth industrial revolution (Z. Dicleli, Trans., 2017). İstanbul: Optimist
Publisher.
Selek, A. (2017). Endüstri Tarihine Kısa Bir Yolculuk. http://www.endustri40.com/endustri-
tarihine-kisa-bir-yolculuk/. Accessed 19.03.2018.
TOBB. (2016). Ekonomik Forum, Akıllı Fabrikalar Geliyor (p. 18). http://haber.tobb.org.tr/
ekonomikforum/2016/259/016_027.pdf.
United Nations. (2018). https://www.un.org/sustainabledevelopment/student-resources/, April24th,
2018.
UNDP. (2018). UNDP in Turkey sustainable development goals. http://www.tr.undp.org/content/
turkey/tr/home/sustainable-development-goals.html. Accessed 13.01.2018.
Woodford, C. (2018). Technology timeline. http://www.explainthatstuff.com/timeline.html.
Accessed 22.04.2018.
Meltem Okur Dinçsoy is acting as asst.prof. at Trakya University, Faculty of Economics and
Administrative Sciences. She completed his undergraduate degree at Karadeniz Technical
University, Faculty of Economics and Administrative Sciences, Department of Economics. She
completed her master and doctoral degree in Okayama University, Japan, Graduate School of
Humanities and Social Sciences, Comparative Economics. In field of Economic Development and
International Economics, she has focused on some research subjects which are ‘development’,
‘finance’, ‘climate change’, ‘economic crises’, ‘women’s studies’. In this context, there are
scientific articles published in various domestic and international scientific journals, books and
book chapters, conferences and seminars. She gives undergraduate and postgraduate courses
within the scope of her research subjects and proficiency. She is also an advisor of the student
communities of Trakya Banking Research Society and she has organized various academic/social
trips and meetings for students. She has also experiences as a coordinator in the “Erasmus
Exchange Program” and as an instructor in entrepreneurship projects.
Chapter 6
Sustainability Officer in Indonesia’s
Palm Oil Companies
Elvia Ivada and Hasan Fauzi
Abstract The purposes of this study are to investigate the role of Sustainability
Officer (SO) and to evaluate the effectiveness of SO function in Indonesian palm oil
corporations. Using 15 palm oil companies listed in Indonesia Stock Exchange as a
sample, this study is conducted using electronic mail survey using Google Forms
and then followed by content analysis of companies’ annual reports and sustain-
ability reports. Based on Miller and Serafeim (2014) sustainability categorization,
we develop our own framework on sustainability classification to determine the
sustainability stage. Since we employ different method, we only used three of their
five categories to build our sustainability classification, namely SO’s authority,
organizational characteristic-related sustainability and SO’s roles. Using the score
we get from previous step, we determine in which sustainability stage Indonesian
Palm Oil Company is. Most of Indonesian Palm Oil companies have hired SO. Five
of the companies do not have SO or personnel especially given authority to conduct
sustainability-related work. The SO can be found in the middle management level
to top management level of company’s hierarchy. The educational background and
experience of the SO are varied. To sum up, Indonesian palm oil industries are in
the stage of compliance. In other words, the majority of them are still in the early
stage of sustainability. Most of them engage with SO to fulfil the legal requirement
especially the sustainability certification, ISPO (Indonesia Sustainable Palm Oil)
and RSPO (Roundtable on Sustainable Palm Oil).
Keywords Sustainability officer Palm oil companies Sustainability stage
E. Ivada H. Fauzi (&)

e-mail: hfauzi@icseard.uns.ac.id
E. Ivada
Faculty of Teacher Training and Education, Sebelas Maret University, Surakarta, Indonesia
H. Fauzi
Center for Social and Environmental Accounting Research and Development (ICSEARD),
Sebelas Maret University, Surakarta, Indonesia

82 E. Ivada and H. Fauzi
6.1 Introduction
Recently, the trend to appoint Sustainability Officers (SO) in many Indonesian

companies has tended to increase. SO, considered as a part of sustainability-
oriented corporate governance mechanisms (Peters and Romi 2014b) and a form of
sustainability governance structure (Eapen 2017), is a person or a team who is given
authority by the board to manage of the sustainability practice throughout the
company (Miller and Serafeim 2014; Eapen 2017, Teoh 2013). Their roles, which
are to conduct sustainability-oriented strategy, are crucial for organization. The
duties of SO are varied depending on their level in the corporate hierarchy and
firm’s sustainability stages (Miller and Serafeim 2014). In the top level, SO is
known as Environmental Committee (Rodrigue et al. 2013), who has roles to
educate the board on sustainability issues and to demonstrate corporate sustain-
ability commitment at the highest levels (Eapen 2017). Still in the top management
level, there is Chief of Sustainability Officer or CSO (Kanashiro and Rivera 2017;
Wiengarten et al. 2017; Miller and Serafeim 2014), who is responsible for over-
seeing the environmental strategy of the firm and directly report to CEO (Miller and
Serafeim 2014). In the middle management level, there are environmental managers
who have duties related to sustainability in his specific regions or production lines
(Miller and Serafeim 2014).
Among those Indonesian corporations establishing SO in their governance
structure are palm oil companies. Indonesian palm oil corporations are one of the
large majority palm oil industries on this planet. They provide the largest contri-
bution to Indonesian foreign sourced income (Badan Pusat Statistik 2018; www.
tribunnews.com). However, they have been considered as one of main actors
causing environmental and social damages. Greenhouse gas (GHG) emission,
endangering certain animal species pushing to closely extinct, deforestation,
indigenous people who are often driven away from their forest land, are examples
of consequences by palm oil companies’ exploration. In fact, more than 700 land
conflicts are related to the palm oil industry (www.rainforest-rescue.org).
Furthermore, On 4 April 2017, European Union Parliament released a resolution
against palm oil Industry concerning the rainforest deforestation (European
Parliament resolution of 4 April 2017, on palm oil and deforestation of rainforests
(2016/2222(INI)).
The first Indonesian palm oil companies appointing SO in their governance
structure were Astra Agro (AALI) and London Sumatra (LSIP) in 2009, followed
by other palm oil corporations. Although, most of the companies have been
applying SO since 2009, however, until 2017, social conflicts, deforestation and
other environmental damages are still serious problems contributed by the
Indonesian Palm Oil companies (mongabay.co.id; theguardian.com; kanalaceh.-
com). Even with the seriousness of the problems, one of the palm oil companies,
associated with the allegations of the destruction of rainforest, changed its name
with the hope that people forget its failure and fault in order for it to run its business
(theguardian.com).
6 Sustainability Officer in Indonesia’s Palm Oil Companies 83
To solve the social and environmental problems faced by palm oil companies,
Indonesian Ministry of Agriculture’s Directorate General of Plantations
(DHP) issued a regulation requiring palm oil Corporation to adopt sustainability
practice named Indonesia Sustainable Palm Oil (ISPO). The DHP then established
ISPO commission to encourage and facilitate Indonesian palm oil industry to build
sustainable palm oil plantations through the ISPO certification. Under the agri-
culture minister’s decree No. 19/2011, by the end of 2014, all Indonesian palm oil
companies have to obtain the certification. Then, the target for ISPO certification
has been extended to 2017 through Agricultural minister decree No. 11/2015. At
the end of 2017 as required by the ministerial decree, there has been 1037 registered
auditors ensuring that Indonesian Palm Oil companies to conduct ISPO certification
(sawitindonesia.com). However, the ISPO certification implementation as required
in the ministerial decree does not indicate the establishments of SO.
The importance of SO establishment is that it can impact on the firm’s sus-
tainability performance (Peters and Romi 2014a, b; Homroy and Slechten 2019).
Homroy and Slechten (2019) document a positive association between the pres-
ences of specific environmental experience board member and environmental
performance, in the case of lower GHG emission. In addition, using disclosure of
GHG emission, Peters and Romi (2014a, b) show that the presence of environ-
mental committee in the Board and the CSO has positive relation. However,
Rodrigue et al. (2013) concludes that there is no connection between environmental
committees in the Board and environmental performance. Consistent with prior
study, Kanashiro and Rivera (2017) find that the presence of a CSO has negative
association with environmental performance. The mix results of previous studies
can be explained by the work of Miller and Serafeim (2014). They declared there
are three stages of sustainability in a company, namely compliance, efficiency and
innovation. The stage reflects company’s sustainability commitment. The higher the
stage, the more sustainability performance it can be achieved. The SO is gradually
involved in every stage. The highest stage performs the most comprehensive in-
volvement of SO and reveals the highest authority of SO. Therefore, the role of SO
is very crucial in company’s sustainability performance. It can be implied that when
SO does not effectively act his or her role, the company performs poor sustainability
performance.
However, while palm oil companies administer SO in firm’s organizational
structure, environmental and social damages are still happening. Greenpeace reports
Indonesian rainforest destructions for palm oil industries have no sign of slowing
down. In those cases, major brands of palm oil products have been linked by the
NGOs to palm oil companies which destroy the rainforest and exploit people
(https://www.grenpeace.org). Furthermore, NGO specializing in palm oil,
Sawitwatch, reported that violations of human rights are still perpetrated by palm
oil industries (sawitwatch.or.id). In this regard, Nesbitt (2015) reported that a
company with high SO achievement is still facing criticism.
The facts lead us to a question, whether SO in Indonesian palm oil companies
really had performed their roles? With the growing number of Indonesian palm oil
companies hiring SO, supposedly the environmental and social problems are
decline. In fact, there is no sign that the problems would lessen. Hence, the purpose
of this study is to investigate the role of SO in Indonesian palm oil corporations.
Also, it intends to evaluate the effectiveness of SO function in the companies.
The next part of this article is divided into four sections. Section 6.2 describes
literature review and theoretical foundation. Section 6.3 explains method used in
this study. Finally, Sects. 6.4 and 6.5 provide discussion and conclusion,
respectively.
6.2.1 Sustainability Governance Structure
Following the description of Eapen (2017), sustainability officer can also become
part of sustainability governance structure which supports an organization to
implement sustainability strategy across the business, manage the achievement of
company’s objective and conduct reporting processes, intensify relations with ex-
ternal stakeholders and ensure overall accountability. Sustainability governance
structure also has many various names. Chief of Sustainability Officer or CSO
(Miller and Serafeim 2014; Peters and Romi 2014b; Kanashiro and Rivera 2017)
and Environmental committee (Peters and Romi 2014b) are terminologies generally
used by researchers to mention such governance structure. While Peters and Romi
(2014b) specifically study sustainability-oriented corporate governance mecha-
nisms (SCGM) focus on the presence of environmental committees on the Board of
Directors and a Chief Sustainability Officer (CSO) among the top management
team, sustainability governance structure in Indonesian palm oil companies has
more variation. Sustainability governance structure is not only found in the Board
and in company’s C level which are part of top management team, but also in the
middle management level with different titles.
Beyond the boards and C-suite level which lay on the top of organization’s
hierarchy, SO is also found in the middle management level. The implementation of
SO in a company depends on its need and resources. There is no single model that
can be applied to all companies in establishing sustainability in corporates’ struc-
ture, so that every company has to customize its best method and procedure which
best fit with its business model structure, resources and level of sustainability
integration into company’s business operation (Eapen 2017). Klettner et al. (2014)
stated there are various terms and levels of sustainability officer established in
corporations. They reported there are 22 firms of ASX 50 companies have board
committee and 6 firms have senior executive committee dedicated to sustainability,
while others have committee commit to manage sustainability concern in the lower
level such as manager. Their names are also varied. Twelve of them have sus-
tainability in their title, 11 firms are called with other name reflecting sustainability
indicator in it, like health safety and environment committee, and other have
corporate responsibility in their title. Hence, the sustainability officer can be found
both in upper level of company’s hierarchy (CSO and environmental committee in
board) and in the lower level (management of sustainability, etc.). The different
roles between those two levels are in the extent of responsibility. While the upper
level of sustainability officer has fundamental obligation to oversee the environ-
mental strategy throughout the organization, the lower level of sustainability officer
is only responsible to manage his or her particular area or production line
(Kanashiro and Rivera 2017).
Although sustainability officer is placed in the top and middle level of corporate
hierarchy, most prior studies conducted concerning the sustainability governance
structure role in the organization is the top level SO’s role (Strand 2013; Miller and
Serafeim 2014; Dixon-Fowler 2017; Peters and Romi 2014a). Organization’s
purpose of hiring SO as one of sustainability strategy is varied. The most common
underlying consideration is perhaps from the Deloitte Review (Peters and Romi
2014b). It provides number of reasons why company should engage in sustain-
ability concerns. It also emphasizes the importance of the board to oversee sus-
tainability concerns throughout the organization (Wagner et al. 2009) which can be
implied as the corporate governance’s role in relation to environmental matter
(Peters and Romi 2014b). Therefore, the main responsibility of top level SO
employed by organization is to encourage the formulation and accomplishment of
sustainability strategy of an organization (Miller and Serafeim 2014). Furthermore,
a corporate governance mechanism is essential to align the interest of stakeholders
and manager. Such mechanisms can be split into external and internal categories.
Board of directors (BoDs) and its composition is one of structures in internal
mechanisms (Crifo et al. 2018).
Indonesian specific regulation for palm oil producers, namely Indonesian
Government Policy for Sustainable Palm Oil Development, forces the industry to
obtain the ISPO certification. ISPO is one of Indonesian government efforts to gain
and ensure sustainability of Indonesian palm oil industry through a sustainable
standardization which is expected to respond allegations concerning environmental
and social problem. Furthermore, it also shows government commitment towards
sustainable palm oil development. The ISPO’s essential focus is to ensure legal
compliance according to the Indonesian laws and regulations which serve as the
baseline of sustainability standards Harsono et al. (2012). The sustainability ex-
pertise personnel might need to conduct the certification process. That is why
perhaps, so many consulting firms offering training for Palm Oil Company staff to
prepare and conduct the certification process both for ISPO and RSPO. Since
without the ISPO and RSPO the company cannot sell its CPO, it has to make sure
that all its operations are sustainable under the certification criteria. And further
action taken by the company is to establish SO in their corporate governance
structure.
However, Rodrigue et al. (2013) indicate that SO does not perform its role
effectively to drive organization’s environmental activities. Contrarily, the SO as
part of governance mechanisms seems to be more like a monitor for management to
ensure that the organization achieves environmental legitimacy (Peters and Romi
2014a). Social expectations coming from various stakeholders’ concerns that or-
ganizations have to take a significant part to protect the environment are now
become prevalent (Rodrigue et al. 2013). To respond to the concerns, organizations
need to show their commitment to environmental protection. Thus, SO should be
able to protect their legitimacy and licence to operate (Deegan 2002).
6.2.2 Sustainability Stages of Commitment
Previous studies concerning the stages of sustainability have different criteria to

justify the role of SO in every phase in an organization (Goleman 2010; Miller and
Serafeim 2014). In each sustainability stage, SO performs its role differently. The
higher the stage, the more extensive the role of SO can play. Both Goleman (2010)
and Miller and Serafeim (2014) propose three stages of sustainability. Goleman
(2010) stated that each phase requires different organizational capabilities and
leadership skills.
Goleman (2010) notes that three stages to implement sustainability initiatives:
(1) making the case for change, (2) translating vision into action and (3) expanding
Boundaries. In the earliest phase, the role of SO is to make a clear and convincing
case for change by collaborating and influencing others to get support from key
stakeholders. The initial authority for sustainability leaders may simply state the
need to act. In the second stage, the responsibility of SO is to translate the sus-
tainability commitment into program with clear definition of initiatives and targets.
At the end of this stage, the organization evaluates the achievement by comparing
the sustainability targets planned and actual performance. At this time, SO has to
build comprehensive programs that can be tracked using clear measurement system.
The corrective action needed will be easy to develop the SO if the sustainability
performance is out of the target planned. Furthermore, SO also has to select the best
efforts to provide the best value for organization through day-to-day operation.
Lastly, SO needs to understand how to convert sustainability initiatives and per-
formance becomes advantage for organization, especially in the marketplace. In
phase 3, expanding boundaries, SO evaluates long-term sustainability trends, seek
new opportunities and develop strategies to reposition organizations to gain benefit
from them. The goal is to instill sustainability in the organization‘s core business
strategy such as quality or financial control. Typically, SO needs to engage with
external stakeholders such as competitors, NGOs and other organizations, and
encourage new practices that may differ from the way organizations conducted in
managing their business in the past.
Miller and Serafeim (2014) divide company’s sustainability initiatives into three
stages: (1) compliance, (2) efficiency and (3) innovation. They interviewed com-
panies’ CSOs to determine in which stage their companies are. From the respon-
dents’ answers, it can be concluded that in each stage of sustainability commitment,
the role of sustainability governance structure has certain particular characteristics.
Compliance phase is the earliest stage of sustainability. In this phase, a person

that is responsible for sustainability initiatives does not have the specific sustain-
ability-related names. The sustainability efforts taken by such person often are
voluntarily in nature and have no relation to his formal tasks. In the second stage,
the particular staff to conduct sustainability strategy holds the specific related
sustainability name. Furthermore, the role of SO is larger than in previous phase.
And in the third phase, the SO usually is at the top of corporate hierarchy and holds
fully comprehensive task concerning sustainability.
6.2.3 Miller and Serafeim Sustainability Stages
Miller and Serafeim (2014) develop a sustainability stage based on several cate-
gories: CSO authority, organizational characteristic-related sustainability, CSO re-
sponsibilities or roles, impact on CEO involvement in sustainability from CSO
appointment, and who decides where to locate primary responsibility and which
factors affect the decision. The following paragraph will provide explanation on
Miller and Serafeim (2014) sustainability stage regarding the first three categories.
Compliance Stage
The early stage of a company engaging with sustainability is called compliance
stage. Usually, this stage applies for companies participating in sustainability for the
first time. In this stage, the people responsible for sustainability efforts do not hold
the CSO title and do not directly report to CEO or the board of directors. In other
words, some of those companies do not have SO in their organization structure in
this stage. When they employ SO, usually he or she is in the middle management
level.
In some cases, the activities taken by the companies concerning sustainability
efforts are voluntary in nature and outside of SO’s formal job responsibilities. While
in other situations, these tasks are part of his formal task that covers other related
activities. Furthermore, all sustainability-related efforts taken voluntarily are not
coordinated, and no one in the organization has knowledge on sustainability.
During this phase, there is also initiatives coming from employee such as recycling
or green projects thought mostly there is no central coordination as strategic actions.
Efficiency Stage
During this stage, companies employ CSO who directly report to CEO and the
board of directors. The roles or responsibilities of the CSO in this stage are similar
to the earlier stage or compliance stage with one addition, which is educating
sustainability to employees. Their roles are developing strategy, reporting sus-
tainability-related data, embedding sustainability into the organization, determining
the material sustainability issues, learning about sustainability from other compa-
nies and getting involved in educating employees concerning sustainability.
Although the roles of CSO in this stage are very similar to the prior stage, there
is a fundamental difference. In the Compliance stage, the CSO tasks are focused on
how to comply with regulation related to sustainability, while in the Efficiency stage
the CSO roles are expanded. In this phase, CSO is responsible to handle stake-
holders’ concerns, maintain or elevate reputation of organization and impact on the
bottom line of the organization trough sustainability-oriented actions such as waste
reduction and resources used efficiencies.
Innovation Stage
In this stage most companies have sustainability committee in their board structure.
This can be inferred that sustainability has achieved higher level of strategic focus,
and the board has put sustainability into their interest. However, unlike the earlier
two stages, the role of SO in this stage is not well reflected from the SO role
classification.
As the SO has reached a new level of sustainability, its ordinary role is declined
significantly. For example, only 75% of SO in this stage has responsibility in
reporting sustainability data. The explanation is perhaps in this stage that companies
had developed integrated reporting which is the responsibility of CFO rather than
CSO. Also for other roles such as embedding sustainability to the organization,
attending to stakeholder relations, and educating employees, learning from external
sources, and managing stakeholder relations are lessening significantly. As the SO
is now in the highest level of organization hierarchy, he or she delegates authority
and decision rights to the lower level such as functional department and local unit
business, and this is probably the cause of the declining role of SO in sustainability
process in the organization. Thus, the main role of SO in this stage is to assist the
development of the sustainability strategy as it evolves into the third stage and to
develop the changes in strategy to support it.
It is in the second and third stages (Efficiency and Innovation) that companies
begin to create the CSO position with more elevated authority. Nevertheless, many
of those who were later assigned to the CSO position are already taking a strong
leadership role in pushing the company from Compliance to Efficiency. Thus, many
of the individuals who now hold the CSO title are actively involved in every stage.
However, the CSO’s roles, responsibilities, and titles could vary across the stages.
6.3 Methodology
This study was conducted using electronic mail survey using Google Forms and
then followed by content analysis of companies’ annual reports and sustainability
reports. Firstly, we searched palm oil company list from Indonesian stock exchange
website (www.idx.co.id) under agriculture sector classification and plantation
subsector section. There are 19 companies listed in agriculture sector based on
JASICA, Jakarta Stock Industrial Classification. One of them, Bisi International
Tbk (BISI), does not have palm oil production activity. Although Dharma
Samudera Fishing Industry Tbk (DSFI) and Magna Investama Mandiri (MGNA)
are in the agriculture sector, those companies do not have plantation criteria. Then
the three companies were excluded from the study. Finally, only 15 of them are in
plantation subsector with one of their business line is palm oil industry. We sent
questionnaire to the 15 palm oil companies. Unfortunately, only two of them gave
feedback by answering our questionnaire. They are AALI and SMAR.
Company’s annual reports from IDX website were then downloaded to support
the first group data. Some of the companies do not have complete annual report in
IDX website. There are some missing years. Therefore, we go to the corporate
website and get the annual report and sustainability report as well. Unfortunately,
not all 15 companies provide comprehensive information regarding annual report
and sustainability report. The most recently annual reports are from the year 2017.
However, the starting year to publish annual report in the website is varied.
Moreover, only some of them provide SR (sustainability Report). The data can be
seen in Table 6.1.
Secondly, we conducted the content analysis from company’s annual report and
SR. Assisted by searching tools provided by pdf, we type organization structure or
management structure in company’s annual report. From the organization structure,
we seek position under sustainability names or other related names such as envi-
ronmental, CSR, sustainability, environment, social and social responsibility. At
this point, we can obtain data concerning the first category, SO authority.
After we get the SO in the organization structure, we type the SO title in
searching box to search SO role in the company. If we cannot have the information
about SO presence and role in the company from AR, with the same way we search
Table 6.1 Annual report and sustainability report available in the IDX and company’s website
Company’s Name CODE AR year SR year
Astra Agro Lestari Tbk AALI 2007–2017 2008–2016
Austindo Nusantara Jaya Tbk ANJT 2010–2017 2016
Eagle High Plantations Tbk BWPT 2011–2017 NA
Dharma Satya Nusantara Tbk DSNG 2013–2017 NA
Golden Plantation Tbk GOLL 2014–2017 NA
Gozco Plantations Tbk GZCO 2009–2017 NA
Jaya Agri Wattie Tbk JAWA 2010–2017 NA
London Sumatra Indonesia Tbk LSIP 2009–2017 NA
Multi Agro Gemilang Plantation Tbk MAGP 2014–2016 NA
Provident Agro Tbk PALM 2012–2017 NA
Sampoerna Agro Tbk SGRO 2016–2017 NA
Salim Ivomas Pratama Tbk SIMP 2009–2017 2014–2016
Sinar Mas Agro Resources Tbk SMAR 2009–2017 NA
Sawit Sumbermas Sarana Tbk SSMS 2016–2017 NA
Bakrie Sumatera Plantations Tbk UNSP 2008–2016 2010–2015
in the SR. Unfortunately, not all AR and SR provide information about SO role.
Hence, the next step is to search in company’s website. In this case, Eagle High
Plantations or BWPT provide a video conducted by sustainability director, Denys
Munang, telling us about his role in the company. However, there are some words
we cannot properly catch because the audio quality is not sufficient enough. For two
companies send us questionnaire respond, we combine the information we get from
such response and their AR and SR as well.
Thirdly, from Miller and Serafeim (2014) sustainability categorization (Table
6.2) we developed our own sustainability classification with some modifications
(Table 6.3). It becomes our framework to determined the sustainability stage. Since
we employed different method, we only used three of their five categories to build
our sustainability classification, namely SO’s authority, organizational character-
istic-related sustainability and SO’s roles. Furthermore, while Miller and Serafeim
(2014), based on CSO responses, determined the degree of sustainability in every
stage by using percentage. We did not use the same percentage technique.
Otherwise, we marked the stage by using √ symbol to determine whether certain
stage has the category. This was because we were not able to decide the degree of
every category by using percentage due to the fact that we conducted AR and SR
content analysis, instead of interview.
In CSO roles category, we marked differently. From Table 6.2, it can be seen
that the percentages in Innovation stages are all decreased. Their explanation is that
the CSO in this stage is in the company’s highest level of hierarchy. Therefore, he
or she distributed sustainability roles to his/her subordinate. Then, when we found
that the SO of Indonesian palm oil company is in the company’s highest level, we
marked all roles. This was based on Miller and Serafeim’s final statement: ‘many of
the individuals who now hold the CSO title is actively involved in every stage’.
Next, we valued every mark as 1, again this was because we were not able to
decide the degree of every category. Then, we summed all marks and we had the
total score of each stage. Compliance stage has score of 6. It means that every
company which has score of 6 or below is in the compliance stage. The second
stage has 9 total score. It means that all organizations which have total score in a
range between 7 and 9 are in the stage of efficiency. And every company that has a
score range between 10 and 12 is in the highest stage, innovation (Table 6.3).
Lastly, using the score we get from previous step, we determined in which
sustainability stage Indonesian Palm Oil Company is. For example, when a par-
ticular company has a sustainability score of 7, so we conclude that such company
is in the compliance stage.
Based on the sustainability stage developed from Miller and Serafeim model, the
framework in use for developing the stage of sustainability for Indonesian palm oil
companies can be shown in Table 6.3.
Although there is no perfectly match word by word as in the sustainability stage
classification which we developed in the prior step, we made a decision based on
the text described in AR and SR.
Hence, to reduce subjectivity we employed triangulation method (Jonsen and
Jehn 2009). One researcher wrote sentences or key words she found in the AR and
Table 6.2 Miller and Serafeim (2014) sustainability stage

Categories Stage of sustainability
Compliance Efficiency Innovation
(%) (%) (%)
CSO Authority
Person with Primary Responsibility for 14 27 36
Sustainability has the Title of CSO
CSO Reports to CEO or Board of Directors 32 41 41
Organization characteristic-related sustainability
CEO or Board of Director ultimately Responsible 73 86 59
for Sustainability
Board Sustainability Committee 32 27 64
CSO responsibilities
Sustainability Strategy Development 91 91 86
Embedding Sustainability Strategy in organization 91 95 86
Reporting Sustainability Data 95 100 75
Managing Stakeholder Relations 82 82 68
Employee Education around Sustainability 82 86 73
Facilities Management 5 45 18
Learning from External Sources 91 91 64
Determining Material Sustainability Issues 86 86 77
Impact on CEO involvement in sustainability from CSO appointment
Change in CIO Involvement in Sustainability from 2.72 2.62 2.50
CSO Appointment
Who decides where to locate primary responsibility aid which factors affect the decision
CEO or Board of Directors Decide where to Locate 77 64 77
Primary Responsibility for Sustainability
Breadth of Organizational Commitment to 55 68 55
Sustainability
Where Champions of Sustainability are located 18 23 36
Level of Commitment of Organization to 64 68 55
Sustainability
Sustainability Strategy of tic Civilization 41 55 64
SR, and based on the sustainability stage classification, gave a tick mark in each
category she thought they match each other. She also wrote down the page number
where she found such category. Next, second and third researcher (a staff) ensured
by giving a mark next to the sign that previous person did after reading sentences
and keywords intended. If all researchers agreed on one category, it means that we
can accept it as a category for certain company. All the three researchers did the
same method and finally, we can get all categories that match with sentences in the
AR and SR. See example on Table 6.4.
Table 6.3 Framework for developing sustainability stage in Indonesian palm oil companies
Categories Stage
Compliance Efficiency Innovation
SO’s authority
Person with Primary Responsibility for Sustainability √ √
has the Title of CSO
SO Reports to CEO or Board of Directors √ √
Organizational characteristic-related Sustainability
CEO or Board of Directors Ultimately Responsible for √ √ √
Sustainability
Board Sustainability Committee √
SO’s roles
Sustainability Strategy Development √ √ √
Embedding Sustainability Strategy in the Organization √ √ √
Reporting Sustainability Data √ √ √
Managing Stakeholder Relations √
Employee Education around Sustainability √ √
Facilities Management √
Learning from External Sources √ √ √
Determining Material Sustainability Issues √ √ √
Total score 6 9 12
Table 6.4 Example of triangulation made by researcher

Roles Company X R1 R2 R3
Sustainability Strategy –
Development
Embedding Sustainability … ensuring that the CID programs are suitable √ √ √
Strategy in the for the characteristics and requirements of each
Organization plantation area … (SR year N, p. 21)
Reporting Sustainability –
Data
Managing Stakeholder The Director Sustainability, under the √ √ √
Relations supervision of the President Director, is fully
responsible for compliance, conservation and
community involvement … (SR year N, p. 20)
Employee Education –
around Sustainability
Facilities Management –
Learning from External –
Sources
Determining Material –
Sustainability Issues
6.4 Results and Discussion
6.4.1 Indonesian Palm Oil Company’s Sustainability Officer
The SO in palm oil industry has existed since 2009. Among others, they include
AALI, LSIP and SGRO. The names, the levels of hierarchy and width of their
authority of the SO are varied. UNSP has the highest level of SO. This company
places the SO as one of the Boards member named Committee of Environment and
Social Relations. There are some companies that improve the level of their SOs.
Firstly, they place SO in the middle management level, and then they position the
SO in the higher stage. They are ANJT, BWPT, LSIP, SMAR and UNSP. Others,
including SIMP and SSMS, add sustainability team under the SO.
The educational background and experience of the SO are also varied.
Unfortunately, not all data are available in the AR and SR, especially SO who is in
the middle management level. Some of them (AALI, LSIP, SGRO, SIMP, SMAR,
UNSP) are from inside the companies with no sustainability experience before, or
the previous position is no relation with sustainability. Other SOs (ANJT and
BWPT) are from outside the company with sustainability experience. The infor-
mation about SOs with educational background is only provided by one company
(SMAR).
6.4.2 Role of Sustainability Officer Classification and Stage

of Sustainability
The sustainability score of Indonesian palm oil companies is presented in Table 6.6.
Five of the companies do not have SO or personnel especially given authority to
conduct sustainability-related work, so that those companies are not included in the
table. They are DSNG, GOLL, GZCO, JAWA, and MAGP. In the score of 1–6
range, there are 6 companies. Furthermore, there are only one company which lay
in the score of 7–8 range. At last, three companies place in the highest score range
of 9–12 (Table 6.5).
6.4.3 The Authority, Organizational Characteristics

and Roles of Sustainability Officer in Indonesian Palm
Oil Company
The names of SO are varied. Ten (ten) of 15 (fifteen) companies (66.7%) have SO
officer in their organizational structure with various names and level. 7 (Seven) or
accounted for 46.7% of them, are in the Top Management Level, while the rest are
in the middle management. AALI, one of the earliest companies employing SO,
Table 6.5 Characteristic of SO in Indonesian palm oil company

Company Sustainability Officer Characteristic Year Level
AALI Director in Charge (DIC) of Environment and 2009 Top Management
social responsibility. He leads corporate functions
which consist of: (1) community development,
(2) government and public relation, (3) safety,
health and environment, (4) territorial and security
sections (departments)
The corporate function is changed to become 2010
consist of: (1) community development, (2) safety,
health and environment, (3) public relation
There is an additional corporate function under 2012
DIC, namely plantation sustainability
DIC Sustainability and public relations, consist of 2013
5 departments, they are: (1) CSR, (2) safety,
health and environment, (3) public relation,
(4) conservation management, (5) sustainability
system
DIC Sustainability and public relations who has a 2015
deputy of Director in Charge (all DICs have
deputy). Leading 5 departments which number
(2) become health and environment, and number
(5) become sustainability system/safety
The DIC Sustainability and public relations 2017
become DIC Sustainability and Communication
(SCOM) who has no deputy. Leading 5
departments namely: (1) Corporate Social
Responsibility, (2) Foundation,
(3) Communication, (4) Sustainability, and
(5) Safety and ISPO
ANJT There are two SOs who has the name regarding 2013 Middle management
sustainability. They are: Head Group of company
CSR under External Affairs Director and Head
Group of Business sustainability under Risk
Management and Compliance Director, and Chief
of Internal Audit. They are in the middle
management level and not directly to CEO
Head Group of Business sustainability becomes 2014
Head Group of Business and Environment
Sustainability Team
The Head Group of Business and Environment 2015 Top management
Sustainability has shifted the level become
Business Sustainability Director
There is additional information in company’s SR 2016
year 2016, that Sustainability Director leads
Department of Community Involvement
Department which previously had the title of CSR
Department. This CID leads General manager for
areas under his authority which are Sumatera and
West Kalimantan, Area, West Papua Area
(continued)

BWPT Deputy CEO of Commercial Sustainability Lead 2016 Middle management
who has Head of sustainability and Head of CSR
under him
Director Sustainability and Investor Relation is 2017 Top management
under the CEO. He leads Head of sustainability
and Head of CSR
DSNG NA NA NA
GOLL NA NA NA
GZCO NA NA NA
JAWA NA NA NA
LSIP Environment and CSR Coordination under NKRO 2009 Middle management
Operation Directorate
General Services, Environment and CSR is under 2011 Top management
CEO
MAGP NA NA NA
PALM Social and Environment Responsibility under 2012 Top management
President Director, which consist of two sections:
Community Relations and Environment, Health
and Safety
There are 2 departments which have SO. 2013 Top management and
(1) Business Development Department which has middle management
Environment and Occupational Health and Safety,
and (2) Licensing and Social Responsibility
Department which has Social Responsibility
section
There are two SOs: (1) Sustainability 2017 Top management and
Certification, Fire and Safety and HEC under Middle management
Department of Business Development. (2) Social
Responsibility under Department of Licensing and
Social Responsibility
SGRO There is Sustainability Division who is one of a 2017 Top Management
Senior Managements of the company. This senior
managements are under the CEO or Directors
SIMP SO in SIMP is one of the corporate function 2014 Top management
namely Sustainability who is under directors Middle Management
(CEO). There is additional information in the SR,
which is sustainability team consist of a group of
people led by group sustainability coordinator
directly under the CEO. The coordinator has
deputy, namely deputy group sustainability
coordinator which supervises all region managers.
The region managers have responsibility to lead
managers in their regional areas. Each area
manager has sustainability officer under his
authority. Then in SIMP sustainability team is
(continued)

consist of top management level to lower
management level.
The same person who lead sustainability in BWPT
is also leader of sustainability in SIMP. It is
perhaps, because BWPT is SIMP subsidiary
SMAR In this company there is a department, namely 2010 Middle management
upstream operation. This department has an SO,
namely Institute and Sustainability Division
Sustainability Division is lift to become top 2015 Top management
management directly under CEO, which lead 3
sections. They are: (1) sustainability
implementation, (2) stakeholder engagement,
(3) sustainability communication
The third section, sustainability communication is 2017
no longer exist
SSMS There is an SO namely Head of Sustainability 2016 Top Management
under the CEO
Beside the Head of sustainability, there is an Top Management and
additional team of sustainability which lead by Middle Management
Corporate Social Responsibility division, under
Chief of HRD and General Affairs
UNSP Under Director of Human resources, there is a 2012 Middle management
division namely corporate social responsibility
There is an additional Committee in the Boards 2013 Top management
namely Environment and Social Relations
Committee
There is a CSR Division CSR under director of 2016 Middle management
HR
The Committee of Environment and Social
Relations also has responsibility as Independent
Board and Chief of Investment Committee
changes the title of SO from time to time. The latest name is Director in Charge
(DIC) Sustainability and Communication (SCOM). This DIC leads five depart-
ments namely: (1) Corporate Social Responsibility, (2) Foundation,
(3) Communication, (4) Sustainability, and (5) Safety and ISPO.
AALI is not the only one which changes the name of SO over time. ANJT,
BWPT, LSIP, PALM, SMAR, SSMS and UNSP are those which have the
changeable title of SO. Furthermore, there is a trend to lift the level of SO from
middle management to top management level. Among them are ANJT, BWPT,
LSIP, SMAR and UNSP.
Since AALI’s AR and SR do not tell about SO roles explicitly, responses of
questionnaire from the company can be used to explain the roles. From 8 (eight)
roles in the questionnaire, AALI recognizes to have 7 (seven) roles. Furthermore,
from AR we can derive that AALI is a sustainability-oriented company. Although it
Table 6.6 Sustainability score of Indonesian palm oil companies

AALI ANJT BWPT LSIP PALM SGRO SIMP SMAR SSMS UNSP
SO’s authority
SO has the √ √ √ √ √ √ √ √ √ √
title related to
sustainability
SO Reports to √ √ √ √ √ √ √ √ √
CEO or Board
of Directors
Organizational characteristic-related sustainability
CEO or Board √ – – – – – – – √ √
of Directors
Ultimately
Responsible
for
Sustainability
Board – – – – – – – – √
Sustainability
Committee
SO’s roles
Sustainability √ √ √ √ √ √ √ √ √ √
Strategy
Development
Embedding √ √ √ √ √ √ √ √ √
Sustainability
Strategy in the
Organization
Reporting √ √ √ √ √ √
Sustainability
Data
Managing √ √ √ √
Stakeholder
Relations
Employee √ √ √
Education
around
Sustainability
Facilities √ √ √
Management
Learning from √ √ √ √
External
Sources
Determining √ √ √
Material
Sustainability
Issues
Total score 10 7 3 6 4 5 4 10 4 12
has sustainability policies and practices and wins many sustainability awards,
getting the sustainability certification such as ISPO and RSPO is still one of its
sustainability focuses.
There is one company, SMAR, in which the SO has eight roles. In its AR and
SR, we cannot find the match words for 8 roles. However, since SMAR is one of
the two companies giving a response of questionnaire sent, we can easily get the
eight duties based on its answer. In fact, it adds one SO responsibility in our open
answer. It is to work together with other parties to reveal sustainability issues. This
makes the company achieve the highest stage of sustainability.
6.4.4 Indonesian Palm Oil Company’s Sustainability Stage
There are 11 companies which are in the compliance stage of sustainability. Five of
them (33.3%) do not have sustainability officer in their organization structure.
Although there is no SO in their governance structure, the two of them have
sustainability policies, program and practices. However, there is no person
appointed for managing sustainability-related activities. Furthermore, the last three
seem do not engage with sustainability activities although they have CSR programs
(in the form of philanthropic in nature). It means that they are in the early stage of
sustainability or compliance stage. Six (40%) of the compliance stage companies
already have sustainability officer in their organization structure. Their names and
level of hierarchy are varied, as in Table 6.5. Their roles are also varied, but almost
all of them are responsible for developing sustainability strategy and integrating
sustainability strategy in the organization. Surprisingly, only one company (SSMS)
has SO with two roles written in its AR and explanation about its CEO or Board of
Directors ultimately responsible for sustainability. It means that the company takes
seriously the sustainability issue. This situation is in line with the one noted by
Wiengarten et al. (2017) that CEO typically makes company’s strategic decisions
and directions (including the sustainability issue). By holding sustainability
responsibility, CEO can force the entire organization to conduct sustainability
efforts. However, without sufficient description in its Annual Report, conclusion is
hard to make on the SO roles.
In the efficiency stage, there is only one company (7%) which has SO holding
five sustainability roles. The company has a specific title of sustainability officer as
in Table 6.5. Since he is a sustainability director, he directly reports to CEO. SO in
this company have five duties which are sustainability strategy development,
embedding sustainability strategy in the organization, reporting sustainability data,
managing stakeholder relations and determining material sustainability issues.
Although this company is in the efficiency stage, it already has policies and
practices concerning sustainability. Unfortunately, we only can trace five roles
possessed by the SO, so that we place this company in the second stage.
Three companies (20%) are in the innovation stage. The roles of SO in these
companies are consisting of eight responsibilities. The SO is directly reporting to
Fig. 6.1 Percentage of companies’ in each sustainability stage. Source The result of the data
analysed by authors
CEO, and in fact, one of them has sustainability committee in its boards. From
searching for words using the searching tools and explanation in their AR and SR
on the SO’s role, it is found that SO of the companies has eight duties (Fig. 6.1).
6.5 Conclusion
Indonesian palm oil industries are still in the early stage of sustainability as the
majority of them (11 companies accounted to 73%) are in the stage of compliance.
Most of them engage with sustainability officer to fulfil the legal requirement
towards the sustainability certification, namely ISPO and RSPO. The rest are in
efficiency stage (3 companies accounted 20%) and in innovation stage (one com-
pany accounted to 7%), with the different roles of SO ranging from developing
strategy and integrating sustainability in the organization. The low of the sustain-
ability commitment in Indonesian palm oil companies can answer a question why
the environmental and social problem in the industry still exist nowadays, and there
is no sign to decrease.
Theoretical implication of the finding is that the role of SO will determine stage
of sustainability adopted by a company. The more role of SO in a company can be
engaged, the higher the level of sustainability adopted in the company. The finding
then can implicate to management and policy-maker. For the policy-maker (gov-
ernment), the finding could be a base to issue a regulation requesting Indonesian
Palm Oil companies to improve their commitment on sustainability in their oper-
ation. This is especially important for Indonesian that has committed to imple-
menting Sustainable Development Goals. For management, this finding could be a
pressure tool reminds them on the importance of doing the sustainable business by
implementing more roles of SO.
This study only determines sustainability commitment stage based on the sus-
tainability officer’s authority and role, as well as organizational characteristics in a
company without considering other categories. Therefore, we suggest that further
study includes other aspects such as the impact of CEO involvement on sustain-
ability and the factors affecting decision to the CSO appointment. For the
methodological perspective, it will be important to extend to use interview of the
SOs to provide a wider picture of their roles.
References
Badan Pusat Statistik. (2018). Statistik Perdagangan LuarNegeri Indonesia Ekspor 2017, Vol. II.
Jilid II-Indonesia Foreign Trade Statistics Exports 2017.
Crifo, P., Escrig-Olmedo, E., & Mottis, N. (2018). Corporate governance as a key driver of
corporate sustainability in France: The role of board members and investor relations. Journal of
Business Ethics, 1–20.
Deegan, C. (2002). Introduction: The legitimising effect of social and environmental disclosures–a
theoretical foundation. Accounting, Auditing & Accountability Journal, 15(3), 282–311.
https://doi.org/10.1108/09513570210435852.
Dixon-fowler, H. R., Ellstrand, A. E., & Johnson, J. L. (2017). The role of board environmental
committees in corporate environmental performance. Journal of Business Ethics, 140(3), 423–
438. https://doi.org/10.1007/s10551-015-2664-7.
Eapen, S. (2017). How to build effective sustainability governance structures. https://www.bsr.org/
our-insights/blog-view/how-to-build-effective-sustainability-governance-structures, down-
loaded on January 7th 2017 at 16/04 European Parliament. Palm oil and deforestation of
rainforests; European Parliament resolution of 4 April 2017 on palm oil and deforestation of
rainforests (2016/2222(INI)).
Goleman, D. (2010). Emotional intelligence. https://danielgoleman.info/topics/emotional-
intelligence/. (Accessed on March 3rd, 2019).
Harsono, D., Chozin, M. A., & Fauzi, A. M. (2012). Analysis on indonesian sustainable palm oil
(ISPO): A qualitative assessment on the success factors for ISPO. Journal Manajemen &
Agribisnis, 9(Edisi Khusus Juni).
Homroy, S., & Slechten, A. (2019). Do board expertise and networked boards affect environmental
performance?. Journal of Business Ethics, 1–24. https://doi.org/10.1007/s10551-017-3769-y.
https://www.rainforest-rescue.org/topics/palm-oil#start. Downloaded on 21st April 2018 at 06.23.
https://www.greenpeace.org/seasia/Press-Centre/Global-brands-divided-over-transparency-efforts-
to-tackle-deforestation-for-palm-oil. Downloaded on April 22nd, 2018 at 14:36.
http://tanhun.ditjenbun.pertanian.go.id/web/page/title/117/ispo-mewujudkan-pembangunan-
perkebunan-kelapa-sawit-berkelanjutan. Downloaded on June 10, 2018, at 16:07.
http://sawitwatch.or.id/2017/03/press-release-sawit-watch-17-maret-2017-benar-sawit-melanggar-
ham/. Downloaded on June 5th, 2018, at 8:09.
http://www.mongabay.co.id/2018/03/18/nestapa-petani-polanto-jaya-di-tengah-ekspansi-kebun-
sawit-astra-bagian-1/.
http://www.tribunnews.com/bisnis/2018/02/05/sawit-jadi-penyumbang-devisa-terbesar.
Downloaded on June 5th 2018, at 7:38.
https://sawitindonesia.com/rubrikasi-majalah/kinerja/kebutuhan-auditor-ispo-capai-2000-orang/.
https://www.kanalaceh.com/2017/01/16/dituduh-gunakan-hutan-tanpa-izin-krr-laporkan-33-
perusahaan-sawit-ke-polda/.
https://www.theguardian.com/commentisfree/2018/may/10/palm-oil-orangutans-multinationals-
promises-deforestation.
https://www.theguardian.com/environment/2017/jul/21/pepsico-unilever-and-nestle-accused-of-
complicity-in-illegal-rainforest-destruction.
https://www.infosawit.com/news/7781/5-manfaat-sertifikasi-sawit-berkelanjutan-versi-indonesia.
Jonsen, K., & Jehn, K. A. (2009). Using triangulation to validate themes in qualitative studies.
Qualitative Research in Organizations and Management: An International Journal, 4(2), 123–
150.
Kanashiro, P., & Rivera, J. (2017). Do chief sustainability officers make companies greener? The
moderating role of regulatory pressures. Journal of Business Ethics, 1–15.
Klettner, A., Clarke, T., & Boersma, M. (2014). The governance of corporate sustainability:
Empirical insights into the development, leadership and implementation of responsible
business strategy. Journal of Business Ethics, 122(1), 145–165.
Miller, K. P., & Serafeim, G. (2014). Chief sustainability officers: Who are they and what do they
do? Available at SSRN: https://ssrn.com/abstract=2411976, https://doi.org/10.2139/srrn.
2411976. Oxford: Oxford University Press.
Nesbitt, H. (2015). What will the Chief Sustainability Officer of the future look like? https://www.
theguardian.com/sustainable-business/2015/apr/21/chief-sustainability-officer-of-the-future.
Downloaded on 10th June, 2018 at 20:33.
Peters, G. F., & Romi, A. M. (2014a). Does the voluntary adoption of corporate governance
mechanisms improve environmental risk disclosures? Evidence from greenhouse gas emission
accounting. Journal of Business Ethics, 125(4), 637–666.
Peters, G. F., & Romi, A. M. (2014b). The association between sustainability governance
characteristics and the assurance of corporate sustainability reports. Auditing: A Journal of
Practice & Theory, 34(1), 163–198.
Rodrigue, M., Magnan, M., & Cho, C. (2013). Is environmental governance substantive or
symbolic? An empirical investigation. Journal of Business Ethics, 114(1).
Strand, R. (2013). The chief officer of corporate social responsibility: A study of its presence in top
management teams. Journal of Business Ethics, 112(4), 721–734.
Teoh, C. H. (2013). Malaysian corporations as strategic players in Southeast Asia’s palm oil
industry. The Palm Oil Controversy in Southeast Asia: A Transnational Perspective, 19–47.
Wagner, S., Hespenheide, E., & Pavlovsky, K. (2009). The responsible and sustainable board.
Deloitte Review, 4, 59–71.
Wiengarten, F., Lo, C. K., & Lam, J. Y. (2017). How does sustainability leadership affect firm
performance? The choices associated with appointing a chief officer of corporate social
responsibility. Journal of Business Ethics, 140(3), 477–493.
Elvia Ivada is a lecturer in the Accounting Education Study Program, Teacher Training and
Education Faculty, Universitas Sebelas Maret of Surakarta, Indonesia. She is now pursuing her
doctoral degree at Faculty of Economics and Management, Universiti Putra Malaysia. Before she
became a lecturer, after she graduated from Accounting Study Program of Faculty of Economics,
Universitas Sebelas Maret in June 1999, she worked in accounting departments in some companies.
In 2002, she became a part of Universitas Muhammadiyah Surakarta as a lecturer in Economics and
Business Faculty until 2008. Then, she joined Universitas Sebelas Maret ever since.
She made some papers contribution in conferences such as Annual International Conference On
Islamic Economics in 2014, and The 5th Sebelas Maret International Conference on Business,
Economics and Social Sciences, in July 2018. She also wrote several opinion articles in National
News Paper, Koran Sindo.
Dr. Hasan Fauzi is Professor of the Accountancy Study Program, Faculty of Economics and
Business, Universitas Seberlas Maret. After his graduation from Accounting Study Program of
Faculty of Economics, Uni-versitas Gadjah Mada, in December 1986, he joined at Universitas
Sebelas Maret and became a lecturer in Faculty of Economics. In 1992, he pursued his studies at
the Cleveland University, USA, and conferred with a Master of Business Administration (MBA) in
1993. Dr. Hasan completed his doctoral thesis on Social and Environmental Accounting (CSR) at
the Universiti Utara Malaysia. He is chairman of Governance and CSR Forum under IAI KAPd
and actively involved in addressing CSR issues to the public. He is a director Indonesia Center for
Social and Environmental Accounting Research and Development (ICSEARD) and his editorships
include: Editor-in Chief of Issues in Social and Environmental Accounting (ISEA), Associate
Editor of Social Responsibility Journal (SRJ), member of editorial board for International Journal
of Accounting and Finance (IJAF), and member of editorial board for International Journal of
service Management and Sustainability (IJSMS).
Chapter 7
The Effects of Leadership Styles
on Organizational Trust and Disclosure
of Unethical Behaviors
(Whistleblowing): A Practical Research
Feyza Çağla Oran and Agah Sinan Ünsar
Abstract Today, the enterprises can hold sustainable competitive advantage only
through proper guidance of human capital movement. While management is merely
regarded as a medium, leadership also appears as a form of administration, which
leads organizations to success, increases productivity, directs the employees toward
positive psychology while they are carrying out their duties, and ensures that there
is a harmonious flow (Csikszentmihalyi in Akış - Mutluluk Bilimi. Buzdağ
Yayınevi, Ankara, 2017). Within the social context, the leader’s behavioral pattern
that he adopts while dealing with his team shapes his style. Trust acts as a bond that
connects the leader with his followers and that increases the sphere of influence and
success of the leader through organizational success and increasing productivity.
Thus, it is regarded as a medium that will increase the leader’s power of influence
for success and to guide his followers more easily, and that ensures better control of
the followers. The disclosure of unethical behavior in workplace (whistleblowing)
will take shape as a reflection of the leadership style and the way the human capital
behaves when the organizational codes of conduct and legal ethical rules are vio-
lated. For these reasons, these three subjects are included in this study.

Keywords Leadership Organizational trust Whistleblowing

Education sector Packing sector Textile sector
F. Çağla Oran (&)

Kadir Has University, Istanbul, Turkey
e-mail: feyza.oran@khas.edu.tr
A. S. Ünsar
e-mail: sinanunsar@yahoo.com

104 F. Çağla Oran and A. S. Ünsar
7.1 Introduction: Leadership Styles and Organizational

Trust and Whistleblowing
7.1.1 Leadership
Leadership is a social interaction process, where the leader asks for voluntary
participation of his inferiors in order to reach organizational goals. (Bhatti et al.
2012, p. 192–193). Leadership may also be described as a concept where the leader
has a social influence over his inferiors (Cunningham et al. 2015, p. 28). The
leaders play a role in ethical and unethical behaviors of the groups by shaping the
organizational climate and culture. They play this role by creating ethical norms
within the organization (Dinh ve diğerleri 2014, p. 37–38). Thus, the leadership
behavior arises as a combination of personal and social influences. The leadership
style is the behavioral pattern of the leader that he adopts when dealing with his
inferiors. In their study at the University of Iowa, Lewin et al. (1939) suggested
three types of leadership as autocratic, democratic, and delegative leadership (Bhatti
et al. 2012, p. 192–193; Robbins et al. 2013, p. 301–302).
Autocratic Leadership
It can be said that an autocratic leader is a typical X manager. He does not take into
account the high-level needs in Maslow’s theory or the motivational factors of
Herzberg. This type of leadership can only be effective if there is a rapid process of
reorganization. However, this leads the organization to a strict hierarchical orga-
nizational structure (Pawar 2014, p. 12). According to the leadership literature, the
autocratic leaders have a strong and instructive structures (Rast et al. 2013, p. 636).
Democratic Leadership
A democratic leader includes his inferiors in the decision-making processes. It
displays a Y-style leadership structure (Pawar 2014, p. 14). McGregor suggests that
in Y-type leadership, the employees will not hesitate to take responsibilities, and
they will have the capacity for self-regulation. Democratic leader analytically
interprets both his own and the others’ behaviors (Rosenfeld and Plax 2003,
p. 208).
Delegative Leadership
This type of leadership was first defined by Lewin, Lippitt, and White in 1939
together with autocratic and democratic leadership styles (Pawar 2014, p. 12).
Delegative leadership style is described as the most passive type of leadership. It is
also defined as the absence/lack of leadership. The most distinct characteristic of
this type of leaders is that they abstain from making decisions. The powers and
authorities of the inferiors are maximized through a significant freedom of action
for the inferiors (Deluga 1990, p. 192).
7 The Effects of Leadership Styles on Organizational … 105
Ethical Leadership
The concept of virtue as derived from Aristotle has reached to the concept of ethics
in leadership. Virtue is defined as a personality trait, and this trait owned by the
leaders is regarded as “moral perfection.” The characteristics are modesty, courage,
honesty, compassion, humor, passion, wisdom, fairness, benevolence,
self-devotion, determination, toleration, enthusiasm, responsibility, love, and trust.
In short, it can be said that these traits cover the characteristics of an ethical leader
(Lawton and Páez 2015, p. 641). The key factor for ethical leadership is that the
leader shows consistency in his own behaviors and attitudes (Lawton and Páez
2015, p. 641–642).
7.1.2 Organizational Trust
The existence of inter-employee/peer cooperation, higher levels of reciprocal

dependence, coordination, the promises made, and the reciprocal sensitivity con-
stitute the foundations of trust (Chowdhury 2012, p. 61). According to McKnight
et al. (1998), trust is defined as acting ethically, fairly, and predictably. According
to Bromiley and Cummings (1995), it is defined as acting fairly in the individual
beliefs or the mutual beliefs among the members of a group, making an effort to act
in good faith in all (a) implicit or explicit commitments; (b) being honest in
negotiations in any case; and (c) acting fairly even though there is good chance and
opportunity to do otherwise (Vidotto et al. 2008, p. 564).
Organizational Trust Models
Mishra defines trust as the state of vulnerability of the believing party as a result of
voluntarily believing in the other party (Mishra 1996, p. 5). Shaw defines trust as
when we believe that our expectations will be met consistently with our own
interests (Mishra 2002, p. 57). According to Blomqvist and Stahle, the development
of trust is based on both organizational trust and individual trust (Blomqvist and
Ståhle, Building Organizational Trust 1998, p. 12). Mayer et al. (2007) regarded
trust as the foundation of the relationships (Schoorman et al. 2007, p. 345). The
main points that Zand (1972) based his trust model were the state of trust or distrust
of the individual, the state of trust and distrust according to the information
obtained, dominance/influence, and control (Zand 1972, p. 230). Zalabak defines
organizational trust as a behavioral, cognitive, and emotional experience (Zalabak
2011, p. 18).
Luhmann’s Trust Model
Luhmann (2000) based his study on the existence of knowledge within the social
system. However, he stated that the perception and cognition were replaced with
language-based theories within the process (Luhmann 2000, p. 249). While he
defined trust as a means of communication where the social boundaries are
determined, he also stated that this concept is “based on an illusion.” He stated that
trust is an imaginary function that provides an environment for communication in
societies and organizations (Jalava 2003, p. 185). Luhmann sees trust as a means to
fight against uncertainty (Bachmann 2001, p. 341–342). The dimensions of trust are
analyzed in three aspects such as the trust in co-workers, trust in manager, and trust
in organization (Yılmaz 2015, p. 56; Kanten 2012, p. 131). While trust in
co-workers is the first element of organizational trust, it is also known as the
“horizontal trust” (Çalışkur 2015, p. 163). It is stated that the factor that strengthens
collectivist practice in organizations is the interpersonal trust (Song et al. 2009,
p. 148; 151). Trust in managers is also known as the “vertical trust.” It represents
the trust in relationships between the employees and the managers/leaders (Çalışkur
2015, p. 163). Trust in organization is also known as the “external trust,” and it
represents the trust in relationships between the organization and its employees,
clients, and the suppliers, and the overall trust put in the operation and system of the
organization by these individuals (Çalışkur 2015, p. 163).
7.1.2.1 Whistleblowing
In general, the concept of whistleblowing is defined as the act of disclosing all

illegal or unlawful practices in organizations by former or current employees to
individuals or organizations (Kaptein 2011, p. 515). Whistleblower is defined as the
person who discloses these practices (Gerçek 2005, p. 31). These practices may
cover subjects, such as corruption, receiving and giving gifts, exaction, illicit gain,
favoritism, laundering, malicious use of organization’s confidential information, use
of intermediary firms, conflicts of interest, fraud, reliability of the products used by
the consumers, environmental pollution, theft, waste, misconduct, work conditions
that violate occupational health and safety regulations, sexual assault, discrimina-
tion, and violation of law (Hoffman and Schwartz 2015, p. 771). Such individuals
are often immensely competent and professional, who tend to challenge the silent
majority (Figs. 7.1 and 7.2).
Types of Whistleblowing
The unethical behaviors and actions can be classified according to their ways of
disclosure. Internal whistleblowing behavior means the disclosure is made to per-
sons or executives within an organization (Liu et al. 2015, p. 109). External
whistleblowing is defined as informing the media, a government agency,
non-governmental organization, or a professional association in order to correct or
stop the scandalous behaviors within organizations (Kaptein 2011, p. 515). Public
whistleblowing can be defined as a behavior of disclosure where the whistleblower
discloses without concealing his/her identity (Aktan 2006, p. 4). Confidential
whistleblowing occurs when the individual chooses to keep his/her identity confi-
dential (Aktan 2006, p. 4) to protect himself from the potential negative outcomes
of the disclosure (Nayır 2012, p. 34). In formal whistleblowing, the person usually
Fig. 7.1 Archetypal traits exhibited by a whistleblower. Reference Banerjee and Roy (2014,
p. 10)
uses the channels of denouncement (official letters, reports, memorandums,

in-house meetings, protocols) created for reporting these unethical/illegal behaviors
(Nayır 2012, p. 34). Informal whistleblowing is defined as a disclosure made
through informal ways, without taking into account the authority (Nayır 2012,
p. 34).
7.2 The Methodology of Studying the Influence

of Leadership Styles on Organizational Trust
and Whistleblowing
The first part of the research was conducted on 292 employees in the company
operating in the field of metal packaging in the Marmara Region. The second part of
the research is the education sector. Three hundred and fourteen teachers working in
Fig. 7.2 Newly developed

advanced whistleblowing
antecedent (process) model.
Reference Banerjee and Roy
(2014, p. 12)
primary and secondary schools reached Istanbul. The third part of the research is the
textile sector. Three hundred and sixty-seven employees reached the textile sector
in Istanbul.
Survey Form and Scales
This study has been used theories of leadership in this research since they are
adapted and tested for their reliability and validity in Turkey: Tuna, Bircan, and
Yeşiltaş’s scale of ten items (2012) on ethical leadership is derived from Brown
et al. (and Trevino 2014). Begeç’s (1999) and Ateş’s scale of 30 items on other
leadership styles (2005) is derived from Clark and Clark (1997, 2004). This study
has employed Adams’ (2004) scales of organizational trust which has been inspired
from Luhmann’s framework, and it is adapted by Kanten (2012). This study has
employed Parks etc.’ scales of whistleblowing, and it is adapted by Nayır (2012).
Eleven questions were added the scale by the researcher (Oran 2018).
Research Model
The model for the purpose of the research is shown in Fig. 7.3.
Investigation of Demographic Characteristics of Participants
The demographic characteristics that are considered are: age, gender, education,
seniority/tenure track, marital status, hometown (during upbringing of teachers
during primary and secondary schooling years between 7 and 19 of age, Table 7.1).
Explanatory Factor Analysis For Scales
Ten questions that are found to be below 0.50 (i.e., questions 5, 15, 16, 21, 22, 27,
28, 29, 32, 33) are omitted from the analysis (Tables 7.2 and 7.3).
Fig. 7.3 Conceptual model
Table 7.1 Descriptive statistics of demographic characteristics of participants

Group Frequency Percent
Gender Female 467 48.0
Male 506 52.0
Total 973 100.0
Age Less than 19 years 35 3.6
20–29 years 433 44.5
30–39 years 348 35.8
40–49 years 136 14.0
50 years and over 21 2.2
Total 973 100.0
Education Primary school 167 17.2
Middle school 206 21.2
High school 196 20.1
Vocational school 39 4.0
Bachelor 345 35.5
Graduate study 20 2.1
Total 973 100.0
Marital status Married 543 55.8
Single 430 44.2
Total 973 100.0
Position Manual workers 588 60.4
White-collar workers 385 39.6
Total 973 100.0
(continued)

Group Frequency Percent
Seniority Less than 1 year 172 17.7
1–5 years 609 62.6
6–10 years 116 11.9
11–15 years 48 4.9
16–20 years 16 1.6
21 years and over 12 1.2
Total 973 100.0
Hometown Village 206 21.2
Sub-district 53 5.4
Town/district 246 25.3
Province 183 18.8
Province 285 29.3
Total 973 100.0
Sector Packaging sector 292 30.0
Education sector 314 32.3
Textile sector 367 37.7
Total 973 100.0
Organizational trust component of the scale explained 36.677% of variance, and

managerial trust component of the scale explained 29.627% (Table 7.4).
Reliability Analysis Results of the Scales
Internal consistency and reliability are high for leadership (0.945), trust (0.951), and
whistleblowing (0.893) (Fig. 7.4; Tables 7.5, 7.6, 7.7, 7.8, and 7.9).
The first SEM has been found significant at 5% confidence level. In this model,
dependent variable is organizational trust and whistleblowing and the independent
variable is leadership style. There is a positive causal relation between organiza-
tional trust and delegative leadership (0.702 standardized value/coefficient).
Delegative leadership has explained with an effect of 49.3% of organizational trust.
There are positive causal relationships between managerial trust and ethical lead-
ership (0.299 coefficient) and democratic leadership (0.515 coefficient). Ethical,
democratic leadership styles have been explained with an effect of 57.9% of
managerial trust.
There are negative causal relationships between informal whistleblowing and
ethical leadership (−0.985 coefficient) and democratic leadership (−2.774 coeffi-
cient). There are positive causal relationships between informal whistleblowing and
delegative leadership (3.334 coefficient) and autocratic leadership (0.386 coeffi-
cient). Ethical, democratic, delegative, and autocratic leadership styles have been
explained with an effect of 60.2% of informal whistleblowing.
Table 7.2 Explanatory factor analysis of the leadership scale

Statement Component Eigenvalue Variance
Ethical Democratic Autocratic Delegative ratio (%)
LE35 0.806 6.213 20.709
LE36 0.786
LE38 0.776
LE39 0.775
LE37 0.775
LE34 0.739
LE31 0.734
LE40 0.693
L30 0.662
L12 0.783 6.074 20.245
L13 0.738
L10 0.723
L14 0.705
L11 0.687
L17 0.629
L7 0.617
L19 0.612
L18 0.583
L6 0.581
L20 0.572
L2 0.803 3.639 12.131
L1 0.788
L3 0.728
L4 0.714
L8 0.589
L9 0.569
L24 0.754 2.74 9.135
L23 0.718
L25 0.692
L26 0.577
KMO and Bartlett tests: v2 = 18,699.045; df = 435; p = 0.000 < 0.05
There are positive causal relationships between formal whistleblowing and

delegative leadership (0.916 coefficient) and autocratic leadership (0.204 coeffi-
cient). There are negative causal relationships between formal whistleblowing and
democratic leadership style (−0.534 coefficient). Delegative, autocratic, and
democratic leadership styles have been explained with an effect of 32.4% of formal
whistleblowing.
Table 7.3 Explanatory factor analysis of the organizational trust scale

Statement Component Eigenvalue Variance ratio (%)
Organizational trust Managerial trust
G10 0.817 5.868 36.677
G11 0.795
G16 0.775
G8 0.740
G9 0.709
G7 0.689
G15 0.678
G13 0.672
G12 0.668
G14 0.653
G1 0.807 4.74 29.627
G2 0.789
G3 0.782
G4 0.757
G5 0.752
G6 0.713
There are negative causal relationships between implicit whistleblowing and

ethical leadership (−0.9 coefficient) and democratic leadership (−2.538 coefficient).
There are positive causal relationships between implicit whistleblowing and del-
egative leadership (3.06 coefficient) and autocratic leadership (0.294 coefficient).
Ethical, delegative, democratic, and autocratic leadership styles have been
explained with an effect of 49.8% of implicit whistleblowing.
There are negative causal relationships between explicit whistleblowing and eth-
ical leadership (−0.584 coefficient) and democratic leadership (−1.368 coefficient).
There are positive causal relationships between explicit whistleblowing and delega-
tive leadership (2.092 coefficient). Ethical, delegative, and democratic leadership
styles have been explained with an effect of 26.8% of explicit whistleblowing.
There are negative causal relationships between external whistleblowing and
ethical leadership (−0.909 coefficient) and democratic leadership (−2.191 coeffi-
cient). There are positive causal relationships between external whistleblowing and
delegative leadership (3.057 coefficient). Ethical, delegative, and democratic lead-
ership styles have been explained with an effect of 49.1% of external whistleblowing.
There are positive causal relationships between internal whistleblowing and
delegative leadership (0.515 coefficient). Delegative leadership style has been
explained with an effect of 26.6% of internal whistleblowing.
Table 7.4 Explanatory factor analysis of the whistleblowing scale

Statement Component Eigenvalue Variance ratio (%)
Implicit Explicit Formal External Internal Informal
W14 0.883 3.995 15.981
W13 0.853
W16 0.802
W15 0.778
W12 0.691
W9 0.830 3.257 13.027
W10 0.801
W11 0.752
W8 0.736
W7 0.666
W18 0.832 3.23 12.919
W20 0.819
W19 0.784
W17 0.667
W21 0.640
W5 0.836 2.892 11.57
W4 0.803
W6 0.794
W2 0.880 2.552 10.209
W3 0.848
W1 0.843
W23 0.816 2.493 9.971
W22 0.804
W24 0.670
W25 0.613
Tests of Sub-dimensions of Leadership Style Scale According to Socio-

Demographic Characteristics of Employees
See Tables 7.10 and 7.11.
Tests of Sub-Dimensions of Organizational Trust Scale According to Socio-
Demographic Characteristics of Employees
Tests of Sub-Dimensions of Whistleblowing Scale According to Socio-Demographic
Characteristics of Employees
Fig. 7.4 SEM model (v2/df = 3.324; NFI = 0.846; NNFI = 0.814; IFI = 0.887; CFI = 0.887;
RMSA = 0.049; GFI = 0.801; AGFI = 0.785; PNFI = 0.805; and PGFI = 0.741) (AW explicit
whistleblowing, DKL democratic leadership, DW external whistleblowing, EL ethical leadership,
FW formal whistleblowing, IFW informal whistleblowing, IW internal whistleblowing, OL
autocratic leadership, OG organizational trust, SL delegative leadership, YG managerial trust, ZW
implicit whistleblowing)
7.3 Concluding Remarks
When the research findings are analyzed, it is observed that the perception of trust
in executives and organization, and the ethical, democratic, and delegative lead-
ership perceptions were higher in white-collar employees when compared to the
blue-collar employees. It is because they behave as required by the responsibilities
undertaken, the increasing number of inferiors, and the obligation to display
Table 7.5 Reliability analysis results of the scales

Ölçekler Component No. of Cronbach’s alpha
items (a)
Leadership total Autocratic 6 30 0.834 0.945
Democratic 11 0.925
Delegative 4 0.784
Ethical 9 0.936
Organizational trust total Managerial trust 6 16 0.913 0.951
Organizational trust 10 0.936
Whistleblowing Internal 3 25 0.898 0.893
External 3 0.885
Explicit 5 0.882
Implicit 5 0.892
Formal 5 0.848
Informal 4 0.844
exemplary behavior in terms of the managerial and organizational policies as they

become closer to the top management. As part of their jobs, creativity, decision-
making, administration, knowledge, and experience of white-collar employees
become prominent, and subsequently, consultation with their inferiors in decision-
making processes becomes more prominent. The majority of the white-collar em-
ployees are teachers working at an educational institution. The fact that the school
principals implement predesignated standard procedures drives forward delegative
leadership. Since white-collar employees are closer to the top management when
compared to blue-collar employees, and they have a say in decisions taken by the
top management, and since white-collar employees can more easily and quickly
identify themselves with their organizations than blue-collar employees, they trust
more to their organization than the blue-collar employees.
While internal and formal whistleblowing is more prominent among white-collar
employees, external, confidential, and informal whistleblowing is more prominent
among blue-collar employees. The fact that low- and mid-level managers are
mostly white-collar employees or that they are closer to the top management
because of their positions may lead them toward formal and internal disclosure. The
facts that blue-collar employees reach many hierarchical levels until they reach the
top management, that the unit chief has a low level of moral attentiveness, and that
their chances of finding another job are lower than the white-collar employees
because of their educational background may lead them toward confidential
disclosure.
It is observed that the employees with higher levels of education attribute ethical,
democratic, and delegative traits to their leaders. It can be concluded that the em-
ployees get closer to the top management and their levels of communication increase
together with the educational level. The white-collar employees are capable to
interpret and analyze the decisions taken by the top management in their own areas of
Table 7.6 Results of factor correlations
116
EL DKL OL SL OG YG ZW AW FW DW IW IFW
EL Correlation 1.000 0.693** 0.274** 0.501** 0.602** 0.638** −0.116** 0.218** 0.386** 0.026 0.407** −0.061
coefficient
Sig. 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.423 0.000 0.058
(two-tailed)
N 973 973 973 973 973 973 973 973 973 973 973 973
DKL Correlation 0.693** 1.000 0.354** 0.543** 0.583** 0.616** −0.125** 0.194** 0.388** 0.018 0.365** −0.053
coefficient
Sig. 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.565 0.000 0.099
(two-tailed)
N 973 973 973 973 973 973 973 973 973 973 973 973
OL Correlation 0.274** 0.354** 1.000 0.277** 0.210** 0.194** 0.036 0.113** 0.268** −0.010 0.220** 0.124**
coefficient
Sig. 0.000 0.000 0.000 0.000 0.000 0.260 0.000 0.000 0.763 0.000 0.000
(two-tailed)
N 973 973 973 973 973 973 973 973 973 973 973 973
SL Correlation 0.501** 0.543** 0.277** 1.000 0.458** 0.421** 0.032 0.263** 0.291** 0.181** 0.272** 0.076*
coefficient
Sig. 0.000 0.000 0.000 0.000 0.000 0.318 0.000 0.000 0.000 0.000 0.018
(two-tailed)
N 973 973 973 973 973 973 973 973 973 973 973 973
ÖG Correlation 0.602** 0.583** 0.210** 0.458** 1.000 0.731** −0.083** 0.227** 0.305** 0.115** 0.359** −0.026
coefficient
Sig. 0.000 0.000 0.000 0.000 0.000 0.010 0.000 0.000 0.000 0.000 0.425
(two-tailed)
N 973 973 973 973 973 973 973 973 973 973 973 973
(continued)
F. Çağla Oran and A. S. Ünsar
YG Correlation 0.638** 0.616** 0.194** 0.421** 0.731** 1.000 −0.195** 0.159** 0.314** 0.031 0.353** −0.083**
coefficient
Sig. 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.326 0.000 0.009
(two-tailed)
N 973 973 973 973 973 973 973 973 973 973 973 973
ZW Correlation −0.116** −0.125** 0.036 0.032 −0.083** −0.195** 1.000 0.054 0.076* 0.399** −0.143** 0.553**
coefficient
Sig. 0.000 0.000 0.260 0.318 0.010 0.000 0.095 0.018 0.000 0.000 0.000
(two-tailed)
N 973 973 973 973 973 973 973 973 973 973 973 973
AW Correlation 0.218** 0.194** 0.113** 0.263** 0.227** 0.159** 0.054 1.000 0.448** 0.461** 0.420** 0.145**
coefficient
Sig. 0.000 0.000 0.000 0.000 0.000 0.000 0.095 0.000 0.000 0.000 0.000
(two-tailed)
N 973 973 973 973 973 973 973 973 973 973 973 973
7 The Effects of Leadership Styles on Organizational …
FW Correlation 0.386** 0.388** 0.268** 0.291** 0.305** 0.314** 0.076* 0.448** 1.000 0.193** 0.432** 0.166**
coefficient
Sig. 0.000 0.000 0.000 0.000 0.000 0.000 0.018 0.000 0.000 0.000 0.000
(two-tailed)
N 973 973 973 973 973 973 973 973 973 973 973 973
DW Correlation 0.026 0.018 −0.010 0.181** 0.115** 0.031 0.399** 0.461** 0.193** 1.000 0.219** 0.366**
coefficient
Sig. 0.423 0.565 0.763 0.000 0.000 0.326 0.000 0.000 0.000 0.000 0.000
(two-tailed)
N 973 973 973 973 973 973 973 973 973 973 973 973
(continued)
117
118
İW Correlation 0.407** 0.365** 0.220** 0.272** 0.359** 0.353** −0.143** 0.420** 0.432** 0.219** 1.000 −0.128**
coefficient
Sig. 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
(two-tailed)
N 973 973 973 973 973 973 973 973 973 973 973 973
İFW Correlation −0.061 −0.053 0.124** 0.076* −0.026 −0.083** 0.553** 0.145** 0.166** 0.366** −0.128** 1.000
coefficient
Sig. 0.058 0.099 0.000 0.018 0.425 0.009 0.000 0.000 0.000 0.000 0.000
(two-tailed)
N 973 973 973 973 973 973 973 973 973 973 973 973
*p < 0.05, **p < 0.01
AW explicit whistleblowing, DKL democratic leadership, DW external whistleblowing, EL ethical leadership, FW formal whistleblowing, IFW informal
whistleblowing, IW internal whistleblowing, OL autocratic leadership, OG organizational trust, SL delegative leadership, YG managerial trust, ZW implicit
whistleblowing
F. Çağla Oran and A. S. Ünsar
Table 7.7 Results of the measurement model

Std. regression coefficients Standard error t (c.r.) p R2
OL L4 0.595 0.354
L3 0.744 0.069 17.357 *** 0.554
L2 0.764 0.074 17.644 *** 0.584
L1 0.758 0.073 17.552 *** 0.575
L8 0.58 0.063 14.597 *** 0.336
L9 0.607 0.063 15.107 *** 0.368
DKL L20 0.75 0.563
L19 0.761 0.041 24.519 *** 0.579
L18 0.73 0.041 23.382 *** 0.533
L17 0.68 0.042 21.608 *** 0.462
L14 0.748 0.041 24.036 *** 0.560
L13 0.771 0.041 24.877 *** 0.594
L12 0.762 0.042 24.554 *** 0.581
L11 0.644 0.044 20.353 *** 0.415
L10 0.701 0.044 22.333 *** 0.491
L7 0.708 0.041 22.585 *** 0.501
L6 0.701 0.042 22.342 *** 0.491
SL L26 0.647 0.419
L25 0.554 0.055 15.779 *** 0.307
L24 0.466 0.055 13.491 *** 0.217
L23 0.497 0.058 14.328 *** 0.247
EL LE40 0.709 0.503
LE39 0.803 0.044 24.263 *** 0.645
LE38 0.791 0.043 23.91 *** 0.626
LE37 0.79 0.045 23.888 *** 0.624
LE36 0.829 0.045 25.046 *** 0.687
LE35 0.829 0.045 25.053 *** 0.687
LE34 0.771 0.046 23.293 *** 0.594
LE31 0.791 0.043 23.905 *** 0.626
L30 0.758 0.043 22.929 *** 0.575
YG G1 0.8 0.640
G2 0.746 0.033 25.385 *** 0.557
G3 0.837 0.032 29.568 *** 0.701
G4 0.833 0.032 29.385 *** 0.694
G5 0.803 0.032 27,964 *** 0.645
G6 0.773 0.034 26.576 *** 0.598
OG G7 0.777 0.604
G8 0.792 0.037 26.848 *** 0.627
G9 0.782 0.036 26.405 *** 0.612
G10 0.805 0.037 27.382 *** 0.648
(continued)

Std. regression coefficients Standard error t (c.r.) p R2
G11 0.78 0.038 26.322 0.608
G12 0.648 0.037 21.111 *** 0.420
G13 0.768 0.036 25.813 *** 0.590
G14 0.782 0.035 26.405 *** 0.612
G15 0.781 0.035 26.376 *** 0.610
G16 0.784 0.038 26.508 *** 0.615
IW W1 0.838 0.702
W2 0.913 0.03 34.003 *** 0.834
W3 0.844 0.03 31.434 *** 0.712
DW W4 0.838 0.702
W5 0.91 0.033 33.271 *** 0.828
W6 0.808 0.033 29.321 *** 0.653
AW W7 0.808 0.653
W8 0.872 0.035 30.814 *** 0.760
W9 0.848 0.035 29.795 *** 0.719
W10 0.734 0.035 24.71 *** 0.539
W11 0.588 0.036 18.854 *** 0.346
ZW W12 0.74 0.548
W13 0.866 0.042 27.081 *** 0.750
W14 0.893 0.043 27.89 *** 0.797
W15 0.699 0.042 21.58 *** 0.489
W16 0.763 0.042 23.686 *** 0.582
FW W17 0.565 0.319
W18 0.823 0.078 17.839 *** 0.677
W19 0.805 0.077 17.638 *** 0.648
W20 0.827 0.079 17.879 *** 0.684
W21 0.641 0.073 15.375 *** 0.411
IFW W22 0.608 0.370
W23 0.635 0.064 16.34 *** 0.403
W24 0.89 0.072 20.261 *** 0.792
W25 0.859 0.072 20.02 *** 0.738
*p < 0.05, **p < 0.01, ***bootstrap 2000 samples
AW explicit whistleblowing, DKL democratic leadership, DW external whistleblowing, EL ethical
leadership, FW formal whistleblowing, IFW informal whistleblowing, IW internal whistleblowing,
OL autocratic leadership, OG organizational trust, SL delegative leadership, YG managerial trust,
ZW implicit whistleblowing
expertise. This forces the superiors to adopt a democratic leadership style. In this
study, the majority of the employees with bachelor’s degrees are teachers. It can be
concluded that a self-management insight arises since the teachers track their own
tasks and duties. This puts forward delegative leadership style.
Table 7.8 Structural model results and bootstrap confidence interval values
SEM Std. regression Regression (S. t (C. p Bootstrap 95%
coefficient coefficient E.) R.) Upper Lower
H12 ZW ← OL 0.294 0.391 0.069 5.712 *** 0.133 0.52
H13 FW ← OL 0.234 0.222 0.044 5.045 *** 0.132 0.335
H14 İFW ← OL 0.386 0.38 0.055 6.85 *** 0.219 0.634
H4 YG ← DKL 0.515 0.56 0.049 11.414 *** 0.378 0.655
H16 DW ← DKL −2.191 −2.827 0.392 −7.207 *** −3.17 −1.515
H17 AW ← DKL −1.368 −1.647 0.272 −6.065 *** −2.042 −0.843
H18 ZW ← DKL −2.538 −2.916 0.37 −7.885 *** −4.191 −1.28
H19 FW ← DKL −0.534 −0.435 0.117 −3.709 *** −1.017 −0.179
H20 İFW ← DKL −2.774 −2.349 0.309 −7.594 *** −4.57 −1.436
H5 ÖG ← SL 0.702 0.899 0.054 16.64 *** 0.649 0.754
H21 İW ← SL 0.515 0.694 0.051 13.539 *** 0.441 0.583
H22 DW ← SL 3.057 4.803 0.583 8.24 *** 2.314 3.929
H23 AW ← SL 2.092 3.068 0.407 7.54 *** 1.406 2.687
H24 ZW ← SL 3.06 4.282 0.534 8.013 *** 1.615 4.954
H25 FW ← SL 0.916 0.91 0.143 6.351 *** 0.602 1.365
H26 İFW ← SL 3.334 3.437 0.447 7.687 *** 1.794 5.407
H8 YG ← EL 0.299 0.344 0.048 7.098 *** 0.15 0.443
H28 DW ← EL −0.909 −1.242 0.2 −6.194 *** −1.442 −0.491
H29 AW ← EL −0.584 −0.744 0.143 −5.197 *** −0.936 −0.273
H30 ZW ← EL −0.9 −1.094 0.182 −6.024 *** −1.989 −0.438
H32 İFW ← EL −0.985 −0.882 0.148 −5.967 *** −2.14 −0.509
*p < 0.05, **p < 0.01, ***bootstrap 2000 samples
AW explicit whistleblowing, DKL democratic leadership, DW external whistleblowing, EL ethical leadership, FW
formal whistleblowing, IFW informal whistleblowing, IW internal whistleblowing, OL autocratic leadership, OG
organizational trust, SL delegative leadership, YG managerial trust, ZW implicit whistleblowing
While the employees with higher levels of education tend to internal and formal
whistleblowing, confidential and informal whistleblowing becomes prominent
among the employees with lower levels of education. As the level of education
increases, the chance for the employees to take part in administrative levels will
also increase. Thus, when they encounter a potential ethical violation, it may be said
that they will probably try working on the intra-organizational decision mechanism
regarding their inferiors under their administration, since there will be higher
chance that the violence might be committed by one of their personnel. It is also
observed that the inferiors will take external actions if they see that the ethical
violations that they saw or experienced are coming straight from the top manage-
ment. It may result from lack of information in lower-level employees regarding
in-house channels of disclosure.
While ethical, democratic, and delegative leadership styles become prominent in
education sector when compared to textile industry, autocratic leadership style
becomes prominent in packaging industry. It may be suggested that the fact that the
Table 7.9 SEM model

Structural equation modeling R2
ÖG = 0.702SL 0.493
YG = 0.299EL + 0.515DKL 0.579
IFW = −0.985EL + 3.334SL − 2.774DKL + 0.386OL 0.602
FW = 0.916SL − 0.534DKL + 0.234OL 0.324
ZW = −0.9EL + 3.06SL − 2.538DKL + 0.294OL 0.498
AW = −0.584EL + 2.092SL − 1.368DKL 0.268
DW = −0.909EL + 3.057SL − 2.191DKL 0.491
IW = 0.515SL 0.266
AW explicit whistleblowing, DKL democratic leadership, DW external whistleblowing, EL ethical
leadership, FW formal whistleblowing, IFW informal whistleblowing, IW internal whistleblowing,
OL autocratic leadership, OG organizational trust, SL delegative leadership, YG managerial trust,
ZW implicit whistleblowing
Table 7.10 Mann–Whitney U test result for sub-dimensions of leadership styles scale
Dependent Independent variable Z Sig. Explanation
variable
Democratic Gender −2.417 0.016 There is a significant difference
leadership Mean rank between gender and democratic
leadership style. Female
Female Male
employees are perceiving their
509.65 466.10 leaders’ styles as more democratic
than male employees
Delegative Marital status −2.144 0.032 There is a significant difference
leadership Mean rank between marital status and
delegative leadership style.
Married Single
Married employees are perceiving
504.12 465.38 their leaders’ styles as more
delegative than single employees
Ethical Position −8.419 0.000 There is a significant difference
leadership Mean rank between position and ethical
leadership style. White-collar
Manual White-collar
workers are perceiving their
workers workers
leaders’ styles as more ethical
425.73 580.57 than manual workers
Democratic Position −10.613 0.000 There is a significant difference
leadership Mean rank between position and democratic
Manual White-collar
workers workers
leaders’ styles as more democratic
409.69 605.08 than manual workers
Delegative Position −2.970 0.003 There is a significant difference
leadership Mean rank between position and delegative
Manual White-collar
workers workers
leaders’ styles as more delegative
than manual workers
Table 7.11 Mann–Whitney U test results of intergroup differences among leadership style scale
variable
Ethical Education There is a significant difference
leadership Mean rank between education and ethical
leadership style. Primary
Primary Bachelor −6.698 0.000
school, middle school, and
school
high school education level of
193.77 286.87 employees are perceiving their
Middle High school −2.968 0.003 leaders’ styles as less ethical
school than the others
184.74 219.11
Middle Bachelor −8.388 0.000
school
202.57 319.85
High Bachelor −5.396 0.000
school
223.06 298.23
Middle Graduate −2.250 0.024
school study
110.45 144.88
Vocational Bachelor −3.194 0.001
school
138.99 198.55
Democratic Education There is a significant difference
leadership Mean rank between education and
democratic leadership style.
Primary High school −2.782 0.005
Primary school, middle school,
school
and high school education
165.41 196.14 level of employees are
Primary Bachelor −8.274 0.000 perceiving their leaders’ styles
school as less democratic than the
178.87 294.08 others
Primary Graduate −2.843 0.004
school study
90.11 126.50
Middle High school −3.323 0.001
school
182.73 221.23
school
188.84 328.04
school study
109.08 158.98
(continued)

variable
school
210.55 305.34
High Graduate −2.039 0.041
school study
105.73 135.63
school
128.41 199.74
Delegative Education There is a significant difference
leadership Mean rank between education and
Primary school and vocational
school
school education level of
229.19 269.72 employees are perceiving their
Vocational Bachelor −2.362 0.018 leaders’ styles as less
school delegative than the others
152.87 196.98
Ethical Hometown There is a significant difference
leadership Mean rank between hometown and ethical
leadership style. Employees
Village Sub-district −2.512 0.012
whose hometown is village are
209.66 240.60 perceiving their leaders’ styles
Village Province −3.095 0.002 as less ethical than the others
178.4 213.69
Village Metropolitan −2.491 0.013
227.27 259.54
Democratic Hometown There is a significant difference
leadership Mean rank between hometown and
democratic leadership style.
Employees whose hometown
206.28 243.43 is village are perceiving their
Village Province −2.721 0.007 leaders’ styles as less
180.39 211.45 democratic than the others
226.65 259.99
Delegative Hometown There is a significant difference
leadership Mean rank between hometown and
Employees whose hometown
121.88 161.58 is village, town, and
Village Town/ −2.282 0.022 metropolitan are perceiving
district their leaders’ styles as less
211.25 239.27 delegative than the sub-district
(continued)

variable
Sub-district Town/ −2.986 0.003
district
181.98 143.11
Sub-district Province −3.169 0.002
144.55 110.96
Sub-district Metropolitan −2.969 0.003
205.94 162.72
Ethical Sector There is a significant difference
leadership Mean rank between sector and ethical
leadership style. Employees in
Packaging Education −6.759 0.000
the education and packaging
253.83 349.69 industries are perceiving their
Packaging Textile −3.122 0.002 leaders’ styles as more ethical
355.93 309.37 than the textile
Education Textile −10.133 0.000
423.41 270.49
Democratic Sector There is a significant difference
leadership Mean rank between sector and democratic
the education and packaging
241.46 361.20 industries are perceiving their
Packaging Textile −3.473 0.001 leaders’ styles as more
358.86 307.04 democratic than the textile
438.42 257.65
Autocratic Sector There is a significant difference
leadership Mean rank between sector and autocratic
the packaging industry are
Packaging Textile −5.442 0.000 as more autocratic than the
375.17 294.06 others
Delegative Sector There is a significant difference
leadership Mean rank between sector and delegative
the education sector are
Education Textile −3.315 0.001 as more delegative than the
367.91 317.98 others
surveys were conducted in public institutions in education sector may be delimi-

tative in ethical violations when compared to private sector. Ethical leadership style
is found to be least common in textile industry. The results of a research conducted
by the Ministry of Labor and Social Security in textile industry, which found
Table 7.12 Mann–Whitney U test result for sub-dimensions of organizational trust scale
variable
Managerial Position −9.392 0.000 There is a significant
trust Mean rank difference between
position and
Manual White-collar
managerial trust.
workers workers
White-collar workers
418.78 591.19 have higher managerial
trust than the others
Organizational Position −6.865 0.000 There is a significant
position and
Manual White-collar
organizational trust.
workers workers
White-collar workers
437.02 563.33 have higher
organizational trust
than the others
behaviors against working hours, differences between actual and registered wages,
and higher levels of unregistered employment, proves this result. It is observed that
democratic leadership style prevails in education sector, where the employees have
higher levels of education. It may be concluded that the chance of being taken into
consideration in terms of leader–member relations increases as the levels of edu-
cation increase. With the existence of dangerous conditions in metal packaging
industry, it may also be concluded that the perceived risk of occupational safety is
higher. Lower levels of education among workers, the importance of even a small
mistake and negligence, and no tolerance to mistakes force the superiors to
implement strict and supervisory rules. When the sectoral report on work accidents
is examined, it is observed that the number of work accidents in metal product
manufacturing is ranked first except for machinery and equipment (TMMOB
(Union of Chambers of Turkish Engineers and Architects) Chamber of Mechanical
Engineers 2018, s. 54–59).
The levels of trust to management and organization are higher in education
sector than it is in packaging and textile industries. This may be explained by the
fact that education is a public sector, and that they take part in management by
complying with predesignated decisions instead of their own independent deci-
sions. All teachers in education sector are equal, and this leads to an increase in trust
in co-workers, since there are no conflicts of interest, or any other area of com-
petition such as promotion that are common in private sector. In addition, the fact
that the schools are under the control of the government, and the work conditions
are standardized and protected by the laws in accordance with the predesignated
procedures may influence the trust in management and, thus, the trust in their
organizations.
Internal whistleblowing has become more prominent in education sector than in
textile industry. This may be explained through institutionalized structure of the
Table 7.13 Mann–Whitney U test results of intergroup differences among organizational trust
scale
variable
Managerial Education There is a significant
education and
managerial trust.
school study
Primary school, middle
90.54 122.93 school, high school,
Middle High −2.063 0.039 and vocational school
school school education level of
189.86 213.73 employees have lower
Middle Bachelor −8.065 0.000 managerial trust than
school the others
205.69 317.98
school study
110.17 147.80
school
212.79 304.07
school study
105.54 137.50
school
144.06 197.98
Organizational Eğitim Düzeyi There is a significant
education and
school
Primary school, middle
215.72 276.24 school, high school,
Middle Bachelor −6.351 0.000 and vocational school
school education level of
220.37 309.22 employees have lower
Middle Graduate −1.988 0.047 organizational trust
school study than the others
110.81 141.23
school
219.19 300.44
school
134.32 199.08
(continued)

variable
Managerial Hometown There is a significant
hometown and
managerial trust.
122.90 157.61 Employees whose
Village Town/ −2.862 0.004 hometown is village
district have lower managerial
207.33 242.55 trust than the others
Village Province −3.301 0.001
177.33 214.90
217.60 266.53
Managerial Sektör There is a significant
sector and managerial
Ambalaj Eğitim −8.404 0.000
trust. Employees in the
241.88 360.80 education sector have
Eğitim Tekstil −9.681 0.000 higher managerial trust
419.46 273.87 than the others
Organizational Sector There is a significant
trust difference between
sector and
Employees in the
education sector have
higher organizational
trust than the others
education sector and the existence of internal disclosure channels. The textile
workers usually believe that it will be hard for them to find another job because of
their levels of education, they do not want to risk their jobs, they avoid catching the
attention of their co-workers and management, and thus, they may prefer to disclose
ethical violations confidentially. There are no internal disclosure channels in the
companies, textile industry, that are included in this study, and this may have led to
external whistleblowing. It is also observed that the people from smaller towns tend
to choose external whistleblowing method when compared to people from larger
cities. In this case, it can be concluded that there is a migration flow from smaller
towns to cities, and these immigrants are mostly employed in textile industry.
Table 7.14 Mann–Whitney U test result for sub-dimensions of whistleblowing scale

variable
Internal Gender −2.925 0.003 There is a significant difference between gender
whistleblowing Mean rank and internal whistleblowing. Female employees
tend to be more internal whistleblowing than male
Female Male
employees
513.90 462.17
Explicit Gender −2.568 0.010 There is a significant difference between gender
whistleblowing Mean rank and explicit whistleblowing. Female employees
tend to be more explicit whistleblowing than male
Female Male
employees
511.02 464.83
Implicit Gender −2.017 0.044 There is a significant difference between gender
whistleblowing Mean rank and implicit whistleblowing. Male employees
tend to be more explicit whistleblowing than
Female Male
female employees
468.16 504.39
Informal Gender −5.430 0.001 There is a significant difference between gender
whistleblowing Mean rank and informal whistleblowing. Male employees
tend to be more informal whistleblowing than
Female Male
female employees
457.01 514.68
Internal Position −2.946 0.003 There is a significant difference between position
whistleblowing Mean rank and internal whistleblowing. Manual workers
tend to be more internal whistleblowing than
Manual White-collar
white-collar workers
workers workers
465.94 519.16
External Position −4.160 0.000 There is a significant difference between position
whistleblowing Mean rank and external whistleblowing. Manual workers
tend to be more external whistleblowing than
Manual White-collar
workers workers
517.15 440.95
Implicit Position −7.974 0.000 There is a significant difference between position
whistleblowing Mean rank and implicit whistleblowing. Manual workers
tend to be more implicit whistleblowing than
Manual White-collar
workers workers
544.90 398.57
Formal Position −5.605 0.000 There is a significant difference between position
whistleblowing Mean rank and formal whistleblowing. Manual workers tend
to be less formal whistleblowing than white-collar
Manual White-collar
workers
workers workers
446.24 549.25
Informal Position −5.430 0.000 There is a significant difference between position
whistleblowing Mean rank and informal whistleblowing. Manual workers
tend to be more informal whistleblowing than
Manual White-collar
workers workers
526.27 427.02
Table 7.15 Mann–Whitney U test results of intergroup differences among whistleblowing scale
variable
External Age The employees whose 20–29 age and 40–49
whistleblowing Mean rank age tend to be less external whistleblowing
than 30–39 age employees
20–29 age 30–39 age −1.959 0.050
405.09 373.46
20–29 age 40–49 age −2.744 0.006
295.54 251.43
External Seniority More senior employees tend to be less external
whistleblowing Mean rank whistleblowing than less senior employees
Less than 1–5 years −2.026 0.043
1 year
360.39 399.64
Less than 11–15 years −2.220 0.026
1 year
115.48 92.67
1–5 years 11–15 years −3.491 0.000
336.22 237.45
1–5 years 21 years and −2.348 0.019
over
313.36 191.21
Internal Education There is a significant difference between
whistleblowing Mean rank education and internal whistleblowing. Middle
school education level of employees tends to
be less internal whistleblowing than high
school
school and bachelor education level of
190.36 213.20 employees
school
236.82 299.39
school
250.20 282.82
External Education There is a significant difference between
whistleblowing Mean rank education and external whistleblowing.
Primary school and middle school education
Primary Vocational −2.629 0.009
level of employees tend to be more external
school school
whistleblowing than vocational school,
108.75 81.04 bachelor, and graduate study education level of
Primary Bachelor −3.002 0.003 employees
school
284.54 242.92
school study
96.77 70.90
Middle Vocational −2.742 0.006
school school
128.37 94.63
(continued)

variable
school
304.79 258.81
school study
116.41 83.55
Implicit Education There is a significant difference between
whistleblowing Mean rank education and implicit whistleblowing.
Primary school, middle school, and high
Primary Vocational −2.653 0.008
school education level of employees tend to be
school school
more implicit whistleblowing than vocational
108.81 80.78 school, bachelor, and graduate study education
Primary Bachelor −5.345 0.000 level of employees
school
306.47 232.31
school study
97.87 61.68
school school
128.85 92.12
school
333.95 241.40
school study
117.92 67.95
High Vocational −2.514 0.012
school school
122.95 93.12
school
317.79 244.42
school study
112.33 70.95
Formal Education There is a significant difference between
whistleblowing Mean rank education and formal whistleblowing. Primary
school and middle school education level of
Primary High school −4.458 0.000
employees tend to be less formal
school
whistleblowing than vocational school,
155.46 204.61 bachelor, and graduate study education level of
Primary Vocational −2.312 0.021 employees
school school
98.87 123.33
school
199.64 284.02
(continued)

variable
school study
90.37 124.35
school
176.91 227.34
school school
118.71 145.67
school
221.26 308.69
school study
109.83 151.35
Informal Education There is a significant difference between
whistleblowing Mean rank education and informal whistleblowing.
Primary school, middle school, and high
school education level of employees tend to be
school
more informal whistleblowing than vocational
286.43 242.01 school, bachelor, and graduate study education
Primary Graduate −2.321 0.020 level of employees
school study
97.16 67.65
school
308.43 256.64
school study
116.87 78.80
High Vocational −2.157 0.031
school school
122.24 96.71
school
313.26 246.99
school study
112.45 69.78
External Hometown There is a significant difference between
whistleblowing Mean rank hometown and external whistleblowing.
Employees whose hometown is sub-district
and town tend to be more external
135.55 113.56 whistleblowing than province and metropolitan
Town/ Province −3.360 0.001
district
232.25 191.81
(continued)

variable
Town/ Metropolitan −2.522 0.012
district
283.97 250.49
Explicit Hometown There is a significant difference between
whistleblowing Mean rank hometown and explicit whistleblowing.
Employees whose hometown is sub-district
and town tend to be more explicit
124.84 150.07 whistleblowing than village, province, and
Village Town/ −2.425 0.015 metropolitan
district
210.26 240.10
136.88 113.18
Sub-district Metropolitan −2.510 0.012
200.33 163.77
district
228.35 197.05
district
288.50 246.58
Implicit Hometown There is a significant difference between
whistleblowing Mean rank hometown and implicit whistleblowing.
Employees whose hometown is village and
town tend to be more implicit whistleblowing
212.72 175.05 than metropolitan
district
239.98 181.42
district
285.40 249.26
Province Metropolitan −2.504 0.012
215.09 246.96
Formal Hometown There is a significant difference between
whistleblowing Mean rank hometown and formal whistleblowing.
Employees whose hometown is town tend to
be more formal whistleblowing than village
district
and metropolitan
287.06 247.82
Village Town/ −4.217 0.000
district
198.26 250.15
184.42 206.91
(continued)

variable
Informal Hometown There is a significant difference between
whistleblowing Mean rank hometown and informal whistleblowing.
Employees whose hometown is town and
metropolitan tend to be more informal
district
whistleblowing than province
231.72 192.53
Province Metropolitan −2.483 0.013
215.29 246.84
Internal Sector There is a significant difference between sector
whistleblowing Mean rank and internal whistleblowing. Employees in the
education and packaging sectors tend to be more
Packaging Textile −3.943 0.000
internal whistleblowing than the textile sector
362.31 304.29
386.23 302.30
External Sector There is a significant difference between sector
whistleblowing Mean rank and external whistleblowing. Employees in the
textile and education sectors tend to be more
external whistleblowing than the packaging
285.32 320.41 sector
273.91 374.63
303.44 373.14
Implicit Sector There is a significant difference between sector
whistleblowing Mean rank and implicit whistleblowing. Employees in the
textile sector tend to be more implicit
whistleblowing than the packaging and
274.96 373.79 education sectors
269.95 401.79
Formal Sector There is a significant difference between sector
whistleblowing Mean rank and formal whistleblowing. Employees in the
education and packaging sectors tend to be more
formal whistleblowing than the packaging and
360.79 305.50
398.69 291.64
Informal Sector There is a significant difference between sector
whistleblowing Mean rank and informal whistleblowing. Employees in the
textile sector tend to be more informal
whistleblowing than the packaging and
288.01 386.33
References
Aktan, C. C. (2006). Organizasyonlarda Yanlış Uygulamalara Karşı Bir Sivil Erdem, Ahlaki Tepki
ve Vicdani Red Davranışı: Whistleblowing. Mercek Dergisi, 1–13.
Ateş, G. (2005). Yöneticilerin Liderlik Tarzlarının Çalışanların İş Tatmini Üzerindeki etkileri:
Hava Kuvvetleri Komutanlığında Uygulama. Kütahya: Dumlupınar Üniversitesi Sosyal
Bilimler Enstitüsü Basılmamış Yüksek Lisans Tezi.
Bachmann, R. (2001). Trust, power and control in trans—Organizational relations. Organization
Studies, 22(2), 337–365.
Banerjee, S., & Roy, S. (2014). Examining the dynamics of whistleblowing: A causal approach.
The IUP Journal of Corporate Governance, 13(2), 7–26.
Begeç, S. (1999). Modern Liderlik Yaklaşımları ve Uygulaması. Gebze Yüksek Teknoloji
Enstitüsü, Mühendislik ve Fen Bilimleri Enstitüsü.
Bhatti, N., Maitlo, G. M., Shaikh, N., Hashmi, M. A., & Shaikh, F. M. (2012, February). The
impact of autocratic and democratic leadership style on job satisfaction. International Business
Research, 5(2), 192–201. www.ccsenet.org/ibradresindenalindi.
Bromiley, P., & Cummings, L. L. (1995). Organizations with trust. R. Bies, R. Lemicki & B.
Sheppard (Eds.), Research in Negotiations. 5th edition, Greenwich, CN: JAI Press.
Blomqvist, K., & Ståhle, P. (1998). Building Organizational Trust, pp. 1–16.
Brown, M., & Trevino, L. (2014). Do role models matter? An investigation of role modeling as an
antecedent of perceived ethical leadership. Journal of Business Ethics, 122, 587–598. https://
doi.org/10.1007/s10551-013-1769-0.
Çalışkur, A. (2015, Temmuz). Yöneticinin Güç Kaynağı İle Çalışanların Örgüte Duyduğu Güven
Arasındaki İlişki. Dumlupınar Üniversitesi Sosyal Bilimler Dergisi (45), 160–174.
Chowdhury, P. P. (2012). Antecedents and consequences of trust and commitment in B2B
relationship: A review of literature. Perspective, 49–63.
Clark, D. C., & Clark, S. N. (1997). Addressing dilemmas inherent in educational leadership
preparation programs through collaborative restructuring. Peabody Journal of Education, 72
(2), 21–41.
Clark, S., & Clark, D. (2003). Perspectives on three decades of the middle level
principalship. Middle School Leadership, 35(2), 48–54.
Clark, S., & Clark, D. (2004). Expert leadership and comprehensive professional development: A
key to quality educators in middle schools. Middle School Journal, 35(4), 47–53.
Csikszentmihalyi, M. (2017). Akış - Mutluluk Bilimi. Ankara: Buzdağ Yayınevi.
Cunningham, J., Salomone, J., & Wielgus, N. (2015). Project management leadership style: A
team member perspective. International Journal of Global Business, 8(2), 27–54.
Deluga, R. J. (1990). The effects of transformational, transactional, and laissez faire leadership
characteristics on subordinate influencing behavior. Basic and Applied Social Psychology,
191–203.
Dinh, J. E., Lord, R., Gardner, W., Meuser, J., Liden, R., & Hu, J. (2014). Leadership theory and
research in the new millennium: Current theoretical trends and changing perspectives. The
Leadership Quarterly, 25, 36–62.
Gerçek, H. (2005, Aralık). Mühendislikte Etik Sorunların Ele Verilmesi. Madencilik, 44(4), 29–38.
Hoffman, M. W., & Schwartz, M. S. (2015). The morality of whistleblowing: A commentary on
Richard T. De George. Journal of Business Ethics, 127, 771–781. https://doi.org/10.1007/
s10551-014-2186-8.
Jalava, J. (2003). From norms to trust the luhmannian connections between trust and system.
European Journal of Social Theory, 6(2), 173–190.
Kanten, P. (2012, Ağustos). İş Görenlerde İşe Adanmanın ve Proaktif Davranışların Oluşumunda

Örgütsel Güven ile Örgütsel Özdeşleşmenin Rolü. Isparta: T.C. Süleyman Demirel Üniversitesi
Sosyal Bilimler Enstitüsü İşletme Anabilim Dalı Basılmamış Yüksek Doktora Tezi.
Kaptein, M. (2011). From inaction to external whistleblowing: The influence of the ethical culture
of organizations on employee responses to observed Wrongdoing. Journal of Business Ethics,
98, 513–530.
Lawton, A., & Páez, I. (2015). Developing a framework for ethical leadership. Journal of Business
Ethics, 130, 639–649. https://doi.org/10.1007/s10551-014-2244-2.
Lewin, K., Lippitt, R., & White, R. K. (1939). Patterns of aggressive behavior in experimentally
created “social climates”. The Journal of social psychology, 10, 271–299.
Liu, S.-M., Liao, J.-Q., & Wei, H. (2015). Authentic leadership and whistleblowing: Mediating
roles of psychological safety and personal identification. Journal of Business Ethics, 131, 107–
119.
Luhmann, N. (2000). Familiarity, Confidence, Trust: Problems and Alternatives. In Gambetta,
Diego (Ed.), Trust: Making and breaking cooperative relations, electronic edition, Department
of Sociology, University of Oxford, chapter 6, 94–107. https://doi.org/10.1.1.23.8075.
Mayer, R. C., Davis, J. H., & Schoorman, D. F. (1995). Ab integrative model of organizational
trust. Academy of Management Review, 20(3), 709–734.
McKnight, H. D., Cummings, L. L., & Chervany, N. L. (1998). Initial trust formation in new
organizational relationships. The Academy of Management Review, 23(3), 473–490.
Mishra, A. K. (1996). Organizational responses to crisis: The centrality of trust. In Trust in
organizations (pp 261–287). University of Michigan’s School of Business Administration.
Mishra, A. K. (2002). Trust in the balance. Human Resource Planning, 57.
Nayır, D. Z. (2012). Kurumsal Etik ve WHISLEBLOWING (1 b.). İstanbul: Pozitif Yayınları.
Oran, F. Ç. (2018). Liderlik Tarzlarının Örgütsel Güven ve Etik Dışı Davranışların İfşasına Etkisi
(Whistleblowing): Uygulamalı Bir Çalışma. Edirne: Trakya Üniversitesi Sosyal Bilimler
Enstitüsü İşletme Anabilim Dalı Basılmamış Doktora Tezi.
Pawar, D. V. (2014). Styles of leadership. International Journal of Research in all Subjects in
Multi Languages, 2(7), 12.
Rast, D. E., Hogg, M. A., & Giessner, S. R. (2013). Self-uncertainty and support for autocratic
leadership. Self and Identity, 12(6), 635–649. Accessed on May 17, 2019.
Robbins, S. P., Decenzo, D. A., & Coulter, M. (2013). Yönetimin Esasları Temel Kavramlar ve
Uygulamalar (8 b.). (A. Öğüt, Çev.) Ankara: Nobel Yayıncılık.
Rosenfeld, L., & Plax, T. G. (2003). Personality determinants of autocratic and democratic
leadership. Speech Monographs, 203–208.
Schoorman, D. F., Mayer, R., & Davis, J. (2007). An integrative model of organizational trust:
Past, present, and future. The Academy of Management Review, 32(2), 344–354.
Song, J. H., Kim, H. M., & Kolb, J. A. (2009, Summer). The effect of learning organization culture
on the relationship between interpersonal trust and organizational commitment. Human
Resource Development Quarterly, 20(2), 147–167. https://doi.org/10.1002/hrdq.20013.
TMMOB Makina Mühendisleri Odası. (2018). İşçi Sağlığı ve İş Güvenliği. Ankara: Makina
Mühendisleri Odası.
Tuna, M., Bircan, H., & Yeşiltaş, M. (2012). Etik Liderlik Ölçeğinin Geçerlilik ve Güvenilirlik
Çalışması: Antalya Örneği. Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi, 26(2), 143–
155.
Vidotto, G., Vicentini, M., Argentero, P., & Bromiley, P. (2008). Assessment of organizational
trust: Italian adaptation and factorial validity of the organizational trust inventory. Social
Indicators Research, 88, 563–575.
Yılmaz K. (2015). Öğretmenlerin Örgütsel Farkındalık Ve Örgütsel Güven Algıları İle Okulların
Örgütsel Etkililik Düzeyleri, Adnan Menderes Üniversitesi Sosyal Bilimler Enstitüsü Eğitim
Bilimleri Ana Bilim Dalı Eğitim Yönetimi, Teftiş, Planlaması Ve Ekonomisi Yüksek Lisans
Programı, Yüksek Lisans Tezi, Danışman: Prof.Dr.Ruhi Sarpkaya., Aydın, Türkiye.
Zalabak, P. S. (2011). A Matter of Trust. Communication World, 17–21.
Zalabak, P. S., & Morreale, S. P. (2011). Building high—trust organizations. Leader to Leader,
39–45.
Zand, D. (1972). Trust and managerial problem solving. Administrative Science Quarterly, 17(2),
229–239.
Feyza Çağla Oran graduated from Trakya University, Faculty of Economics and Administrative
Sciences, Department of Business Administration in 2009. She completed her graduate education
in Trakya University, Social Sciences Institute, Department of Business Administration, in 2012.
She worked in private sector as a specialist for two years. She completed her doctoral studies in
2018; her dissertation topic was about leadership, organizational trust, and whistleblowing. Since
2015, she is continuing her career as Lecturer in the logistics program at Kadir Has Vocational
School. Her research interests focus on management and organizational behavior, leadership, and
ethics.
Professor Dr. Agah Sinan Ünsar was born in Kırklareli, Turkey, in 1967. He received primary
and secondary education in Edirne. He graduated from Edirne High School in 1984. He graduated
from the Department of Business Management at Open Education Faculty at Eskişehir Anadolu
University with a good degree in 1990. He completed his military service as reserve office in 1992.
He received master’s degree from the Department of Business Administration at Institute of Social
Sciences of Trakya University and doctorate degree from the Department of Human Resources
Management at Institute of Social Sciences of Istanbul University. He worked in Trakya
University as Contracted Civil Servant between the years of 1992 and 1994. Between 1994 and
1998, he worked as Civil Servant in Institute of Social Sciences at Trakya University. He worked
as Faculty Member in the Department of Business Administration at Faculty of Economics and
Administrative Sciences at Trakya University between 1998 and 2004 and as Assistant Professor
between 2004 and 2010. He received associate professor degree in the field of “management and
organization” in 2010. He was appointed as Professor in 2015. He continues to work as Professor
in the same faculty and gives graduate, postgraduate, and doctorate lessons at the Department of
Management and Organization. Furthermore, he serves as thesis advisor at postgraduate and
doctorate level. His fields of specialization are human resources management and organizational
behavior.
Part III
New Approaches in CSR
Chapter 8
Corporate Social Responsibility
in Bulgaria: Perspectives
and Possibilities
Diana Kopeva, Nikolay Sterev and Dimitar Blagoev
Abstract Corporate social responsibility (CSR) is an element of business contri-

bution to the sustainable development. The corporate social responsibility is a new
socio-economic phenomenon, especially for Bulgaria, and its applied introduction
by Bulgarian business is important and not fully researched topic yet. Corporate
social responsibility (CSR) has forcefully and irreversibly become a part of the
corporate actions of a growing number of Bulgarian companies in the last decades,
but CSR’s effects on regional level is not enough recognized neither by the regional
authorities nor by the local societies. The paper aims to examine the role of cor-
porate social responsibility (CSR) as a tool not just for improving the organizational
performance but for regional development as well. So, it explores the theoretical
framework of the corporate social responsibility, as well as some strategic CSR’s
activities to outline the need of it for enforcing some key affects for regional
development. For us, these key effects on the development of the regions are:
unemployment rate, population growth, raising the level of education, etc. Further,
the paper describes the linkages between these key aspects of business’ CSR and
regional socio-economics development. Finally, the authors make an overview of
some good practices showing the implementation of corporate social responsibili-
ties in selected Bulgarian enterprises and demonstrating the possible improvements
in the understanding the matters of corporate responsibility inside the Bulgarian
companies. According to the given aim paper includes five parts: Introduction
outlines the importance of corporate social responsibility today and its link to
regional development. Here it is given the main aim and tasks based on the topic of
the paper, research methods and information database. A brief literature preview of
different points of view about corporate social responsibility, main characteristics of
CSR in Bulgarian firms and classification of results of previous research studies are
D. Kopeva (&) N. Sterev D. Blagoev

University of National and World Economy, Sofia, Bulgaria
e-mail: diana_kopeva@yahoo.com; dkopeva@unwe.bg
N. Sterev
e-mail: sterew@abv.bg
D. Blagoev
e-mail: blagoeva_k@mail.bg

142 D. Kopeva et al.
provided in the second part. Third part presents some aspects and directions of CSR
implementation by companies in Bulgaria, methods, forms, etc., that are typical for
the Bulgarian business in recent years. They are classified according to the degree
of utilization and the degree of efficiency from the business, not social, point of
understanding. The fourth part covers the effects of CSR on the development of
regions in Bulgaria (by presenting examples from selected regions). The focus of
the survey is on the status quo and the trends of CSR implementation that is carried
out by business organizations operating on the Bulgarian market. Their impact on
the regional development, based on selected socio-economic and demographic
indicators is also presented. For this purposes, the following research methods are
used: data collection and processing of statistical information, data comparison
method, diagnostic analysis, etc. Finally, the main conclusions are presented and
the next steps of the authors’ research in the area of CSR in Bulgaria are outlined.
Keywords Corporate social responsibility (CSR) regional development

Enterprise strategies Bulgaria
8.1 Introduction
Corporate social responsibility (CSR) is an element of business contribution to the

sustainable development. The corporate social responsibility is a new
socio-economic phenomenon, especially for Bulgaria, and its applied introduction
by Bulgarian business is important and not fully researched topic yet. Corporate
social responsibility (CSR) has forcefully and irreversibly become a part of the
corporate actions of a growing number of Bulgarian companies in the last decades,
but CSR’s effects on regional level is not enough recognized neither by the regional
authorities nor by the local societies.
The paper aims to examine the role of corporate social responsibility (CSR) as a
tool not just for improving the organizational performance but for regional devel-
opment as well. So, it explores the theoretical framework of the corporate social
responsibility, as well as some strategic CSR’s activities to outline the need of it for
enforcing some key affects for regional development. For us, these key effects on
the development of the regions are: unemployment rate, population growth, raising
the level of education, etc.
Further, the paper describes the linkages between these key aspects of business’
CSR and regional socio-economics development. Finally, the authors make an
overview of some good practices showing the implementation of corporate social
responsibilities in selected Bulgarian enterprises and demonstrating the possible
improvements in the understanding the matters of corporate responsibility inside the
Bulgarian companies.
8 Corporate Social Responsibility in Bulgaria: Perspectives … 143
8.1.1 State of Art
The concept for corporate social responsibility, namely the companies’ responsi-
bility for the economic, social and ecological outcomes of their activities, is a
relatively new concept in Bulgaria. The use of this notion has mainly been related to
the processes of integration and acceptance of our country for a full-right member
of EU and the established traditions and experience in this field of the international
companies that have entered our market.
In 2011, the European Commission published a new strategy on CSR, which
aims to create conditions favourable to sustainable growth and employment gen-
eration in the medium and long term. Through CSR, enterprises can significantly
contribute to the European Union’s treaty objectives of sustainable development
and a highly competitive social market economy. CSR underpins the objectives of
the Europe 2020 strategy for smart, sustainable and inclusive growth, including the
75% employment target. The European Commission has previously defined CSR as
“a concept whereby companies integrate social and environmental concerns in
their business operations and in their interaction with their stakeholders on a
voluntary basis”.1 The European Commission now puts forward a new and simpler
definition of CSR as “the responsibility of enterprises for their impacts on society”.
The EU’s strategy clearly demonstrates that the positive development of the
European economy is closely related to Europe’s companies putting sustainability
and corporate responsibility into practice on the ground and that these issues have to
be driven by these very companies. To facilitate this, the EU is creating a shared
political framework and promoting the discussion on CSR.
In response to the dynamic socio-economic eco system, the Commission is
making a number of regulatory proposals to ensure a more responsible and trans-
parent financial system. The Commission intends to consider a requirement on all
investment funds and financial institutions to inform all their clients (citizens,
enterprises, public authorities, etc.) about any ethical or responsible investment
criteria they apply or any standards and codes to which they adhere. The new policy
also puts forward an agenda for action covering eight areas:
• Enhancing the visibility of CSR and disseminating good practices;
• Improving and tracking levels of trust in business;
• Improving self- and co-regulation processes;
• Enhancing market reward for CSR;
• Improving company disclosure of social and environmental information;
• Further integrating CSR into education, training and research;
• Emphasizing the importance of national and sub-national CSR policies;
• Better aligning European and global approaches to CSR.
Despite the slow acceptance of the principles and policies of CSR in comparison
with the world trends, the Bulgarian business has increased significantly its
1
EU Strategy on Corporate Social Responsibility (2011).
awareness of these models, because apart from the practices that the companies
themselves can benefit from, these business models serve as a condition for survival
and competitiveness in today’s global economy reality. Various initiatives held by
international and national organizations help the popularization of CSR amongst the
Bulgarian companies. The ones that are worth being mentioned are:
• The inauguration of the Bulgarian Business Leaders Forum (BBLF) in
November 1998 and the launch of the project Code of Business Ethics October
1999 when several BBLF member companies presented their codes of business
ethics and shared examples of good business practices.
• The creation of a national network of companies, members of the initiative
Global Compact, in 2003 that aimed to make social responsible practices in
Bulgaria more popular.
• In 2007, a Bulgarian Code for Corporate Governance was adopted and later on
the Association of Bulgarian Industrial Capital together with the Association of
Bulgarian Investor Relation Directors presented a Handbook of Good Practices
for Corporate Social Responsibility, which is applied in the activities of 130
Bulgarian companies at the moment.
• In 2010, indicators for measurement of the effectiveness of CSR on national and
company level have been developed in the frames of the regional project
“Increasing of the transparency and reliability of the CSR practices through
establishment of a system for evaluation and monitoring of CSR in the new EU
member-states”.
The state also has an active role and encourages the implementation of CSR in
the country by creating an appropriate legislative environment and conditions for
effective partnerships between all interested parties. Bulgaria had ratified different
UN conventions, related to respect of human rights, ecology and fight against
corruption, as well as the ones related to International Labour Organization(ILO), in
respect of the labour standards. In addition to that on 25 November 2009 was
adopted a National Strategy for Corporate Social Responsibility, that reflects the
state attitude towards CSR matters and has as an objective the creation and rein-
forcement of a favourable environment for the implementation of CSR practices.
The strategy covers the 2009–2013 period and is divided in three steps: analysis of
the situation; vision, goals and principles; and implementation of the CSR strategy.
As a result of all these activities and efforts CSR’s popularity amongst the Bulgarian
business is increasing and more and more companies declare their social and
ecological engagement. Nevertheless, the fact is that in the greater number of cases
the companies are doing charity, donations or restricted in their scope activities in
this direction, and don’t act on the implementation of comprehensive internationally
acknowledged corporate models and standards, aiming to be a part of a long-term
strategy for sustainable growth.
In 2011, a great advance in relation to the implementation of transparent and
responsible management in Bulgaria was made and two companies presented their
first reports on sustainable development and CSR (for 2010), based on G3 created
by Global Reporting Initiative(GRI)—the world’s most widely used standard for

measurement of the economic, social and ecological impact and achieving of
sustainable development. If this example is to be followed by other companies, this
will definitely set a serious base for the recognition of social responsible business
models and the creation of a competitive and sustainable economy in Bulgaria.
8.2 Aspects and Directions of CSR Implementation

by Companies in Bulgaria: Methods and Forms
The intensive process of globalization, the growing social and public requirements,
as well as the unprecedented climate changes set new type of challenges for the
companies that can be overcome only through responsible and transparent man-
agement and by having in mind the economic, social and ecological impact of their
work. The broad range of areas in which CSR is categorized include:
• Involvement in the community;
• Internal corporate culture;
• Education and leadership development;
• Corporate governance and business ethics;
• Environmentally friendly business.
Above all, corporate social responsibility is a philosophy that the companies in
Bulgaria believe every true business leader has to share. Today’s managers under-
stand that the sustainable social responsible practices are the main element in
achieving a successful corporate management and effective leadership. A prerequisite
for meeting this responsibility is the observance of the legislation and the group
contracts between the social partners. In order to be able to fulfil their CSR, the
companies have to implement processes for integration of the social, ecological and
ethical issues, as well as issues related to human rights and consumers, in their
business activities and overall strategy. Moreover, the companies have to work in
close cooperation with the interested parties aiming to (i) increase the creation of a
shared value for their owners/shareholders and for other stakeholders and the society
as a whole and (ii) to determine, avoid and tone down the possible negative effects.
CSR is a concept, whereby companies integrate social responsibilities and en-
vironmental concerns in their business operations and in relations with partners on a
voluntary basis. The most common social accountability covers the obligations of
business to society, expansion of their circle, for economic functions and the
inclusion of social activities such as necessities.
The social responsibility of business is multi-layered. The first observance of the
principles of corporate social responsibility involves compliance with the following
obligations: timely payment of taxes, wages and creation of new jobs. The second
level of CSR involves the provision of adequate conditions for work and life of
employees by increasing their skills, preventive treatment, housing and social de-
velopment. The highest, third, level of responsibility, charity events, including local
infrastructure improvements. In particular, corporate social excuse can be crammed
into the field:
A. Society
• Upgrading of the urban environment;
• PR activities and social impact;
• Volunteer;
• Support and social integration of children-orphans, and children and adults
in homes;
• Preservation of cultural and historical heritage;
• The quality and safety of products;
• Donations;
• Sponsorship.
B. Ecology
• Pollution control;
• Restoration or protection of the environment;
• Conservation of natural resources;
• Processing;
• Spending on energy efficiency and reduction of environmental pollution;
• Manage the impact of the environment and natural resources.
C. Human capital and working conditions
• The development of a healthy and safe working conditions;
• Training and staff development;
• Support career development;
• Volunteer programs for employees;
• Programs for objective and fair remuneration;
• The satisfaction and commitment of employees.
D. Knowledge and education
• Scholarships to support people at a disadvantage;
• Providing tools and materials for practicing at school;
• Providing a paid internship;
• Encouraging young intelligent people.
E. Marketing associated with business
• Product donations.
Social responsibility brings many advantages for the organizations using it. They
could be seen in respecting the interests of all stakeholders; counting business
influence over economy, society, environment; increasing reputation of the business
organization; contributing for economic stability in the region, where organization
operates in; accent over stable use of natural resources. The integration of corporate
social responsibility, as a key tool in the strategies for company development, and
the active dialouge with all interested persons can cooperate for long-term stable
progress and increasing the value of relevant companionship, and it can realize
competitive advantages2 in improving producing effectiveness; realization of pro-
duct decentralization and innovations; better satisfaction of the company client’s
needs; better management of the company risks; improving the personnel compe-
tence and increasing the value of intellectual capital by development of human
resources; improving the trade reputation and company image; achievement of
higher share price of the social responsible companies. Independently of the taken
actions and created preconditions, corporate social responsibility of the Bulgarian
companies is accompanied with settling problems like:
• Passive attitude of the organization’s managers towards market’s attitudes;
• Lack of information for regulation of social responsibility, not knowing the
procedures and values of the certification favours;
• Lack of resources for execution of certain activities by the social policy;
• Organizational problems of the business organizations, as not regulated prop-
erty, draining of funds, etc.;
• Problems with sharing information for social responsible activities of
organization.
The main challenges at application of corporate social responsibility are con-
nected with lack of the so-called administrative capacity; lack of leading state
structure, which guides and coordinates actions of the single government institu-
tions and collaborates with business, civil society, media and academic community;
insufficient dissemination and not knowing the conception for corporate social
responsibility; distrust of the community, syndicates, users and others; certain
prejudices in business; myths and realities for the benefits from social responsible
practices; pseudo-social responsible practices.
8.3 Effects of CSR on the Development of Regions

in Bulgaria (by Presenting Examples from
Selected Regions)
The CSR’s impact over the regional development could be found in the given above
five directions. They could be specified in the following indicators in order to be
found by the national social and business accounts:
• Gross domestic product (GDP) per capita/Purchasing power standard (PPS) per
capita: the market impact of the CSR’s activities means that the total income of
2
Gogova (2011).
the local inhabitants will increase the total value of the business in the region
and, respectively, it will increase the monetary wealth of the local society.
• Employment/Unemployment rate: the CSR’ activities basically involve more
local people not just at temporary employment but decreases the long-term
unemployment as well. It is because the CRS activities are provided by the local
companies and, respectively inhabitants.
• In-patient average length of stay/Hospital days of in-patients/Number of people
at risk of social exclusions: basically CSR activities help the society to develop
and the health and social exclusion decrease.
• Participation rates in education/Education exclusion: whether the new
employment opportunities arose by CSR’s activities the desire for education
increases, as well as the rate of excluded pupils from the educational system
decreases.
• Rate of natural change of population/Rate of net migration: the wealthy regions
are magnets for the people. Thus, the regions that increase total value of life
being increase their population exponentially.
The given five indices are used in analysis of the impact of the CSR on the
regional development in Bulgaria. The time coverage is 2000–2016 as the different
indices are observed by different time sets according to the national accounts.
The data is collected and provided as open source database by the Eurostat and
Bulgarian national statistical office. The regional data coverage includes statistical
data for NUTS 2 regions in Bulgaria, respectively: north-west (NW); north central
(NC), north-east (NE), south-east (SE), south central (SC), and south-west (SW).
A data set for Pazardzhik at NUTS 3 level as a part of south central region is
included as well.
A. Development impact: the total development is basically observed by the
change of GDP. We use a structural indices that reduce the regional inequality
as: Gross domestic product (GDP) per capita (Fig. 8.1)/Purchasing power
standard (PPS) per capita (Fig. 8.2).
Figures 8.1 and 8.2 show that some Bulgarian regions are developing faster than
others. For example:
• The south-west region is economically over developed in comparison with the
others regions. The GDP per capita in 2011 is more than twice than the fol-
lowing SE region. The difference in the indices “Purchasing power standard
(PPS) per capita” is much higher.
• In addition, the north-west and south central regions are developing slowly than
the others. The figures for these regions flew down in comparison with others.
• On the other side, the Pazardzhik region is economically presented well than the
south central region. From the last place in figures for 2005, the researched
indices sharply increase 2006–2008 and 2010–2011.
Fig. 8.1 Gross domestic product (GDP) per capita by regions at NUTS 2 in Bulgaria
Fig. 8.2 Purchasing power standard (PPS) per capita by regions at NUTS 2 in Bulgaria
B. Labour impact: the job creation by the CSR’s activities reflected on the in-
crease of employment rate (Fig. 8.3) as well as on decrease of unemployment
rate (Fig. 8.4).
The figures verify some of the above results. For example:
• The south-west region is labour over developed in comparison with the others
regions. The youth employment rate is 10% higher as the unemployment rate is
2.5% lower in 2011 than the following NE/SE regions. The difference in the
indices “Purchasing power standard (PPS) per capita” is much higher.
• In addition, the north-west and north central regions are characterized by lowest
levels of youth employment and highest level of unemployment.
Fig. 8.3 Purchasing power standard (PPS) per capita by regions at NUTS 2 in Bulgaria
Fig. 8.4 Unemployment rates from 15 to 74 years by regions at NUTS 2 in Bulgaria
• The case of south central region is interesting as it takes a middle position in the
both indices, but they have highest change rate during the observed period. The
employment/unemployment rates sharply increase/decrease 2005–2008 and
2012–2015, and vice versa: sharply decrease/increase 2009–2011.
C. Social wealthy impact: it is measured by the share of people at risk of poverty
and social exclusion (Fig. 8.5). Preliminary expectations are that the CSR’s
activities reduce the social exclusion.
The figures verify some of the above results. For example:
• The south-west region is social wealthy over developed in comparison with the
others regions. The social exclusion rate is 50% higher than the following SE
regions.
Fig. 8.5 Unemployment rates from 15 to 74 years by regions at NUTS 2 in Bulgaria
• The case of south central region is interesting as it had started at second place in
2008 with 43% rate of social exclusion and finished at last place in 2016 with
46% exclusion rate. All other regions have changed positively their exclusion
rates even the most economic undeveloped NW region.
D. Demographic impact: it is measured by the natural change of population and
net migration. We use structural indices that reduce the regional inequality as:
Rate of natural change of population (Fig. 8.6)/Rate of net migration (Fig. 8.7).
Preliminary expectations are that the CSR’s activities increase the positive
natural change of the population by increasing birth rate and decreasing death
rate, as well as increase the positive net migration by reducing outgoing em-
ployees and attracting incoming employees by other regions/countries.
Fig. 8.6 Rate of natural change of population by regions at NUTS 2 in Bulgaria (‰)
Fig. 8.7 Rate of net migration by regions at NUTS 2 in Bulgaria (‰)
Figures 8.6 and 8.7 verify some of the above results. For example:
• The south-west region is the single region with positive figures on net migration
with the lowest level of decrease of natural change of population. The
north-west and north central regions are firmly last according to the both indices.
• The cases of south central and north-east regions are totally opposite as the
highest decrease of net change rate of SW in 2001 is quite opposite the positive
net change of population of NE. The next ten years the negative figures for SC
decreases opposite of the decreasing negative figures of net change of popula-
tion of the NE region.
Education impact: it is measured by the participation rates of children/youths in
Primary and lower secondary education (Fig. 8.8)/Rate of early leavers from edu-
cation. Preliminary expectations are that the CSR’s activities increase the
Fig. 8.8 Participation rates in primary and lower secondary education by regions at NUTS 2 in
Bulgaria (%)
participation and decrease the early leaver’s rate of child in the education system by
inclusion children of the social excluded families.
Unfortunately the figures do not allow the confirmation or rejection of the above
results.
The given results could be better understood by presentation ones of the best
examples of CSR in Bulgaria in different regions and sectors:
A. Marketing: Danone Bulgaria (Dairy Sector): South-West region
Danone has officially set foot in Bulgaria in 1993, when the Group Danone
acquired the state enterprise “Serdika”. For many years, the company is developing
in various socially responsible practices, some adapted from the parent company,
while others are purely local. Danone Serdika is a company that since its creation
linked to the health of people is inherent in her genes. The mission of Danone, it
gives health, through its products an increasing number of people around the world.
In 1972, Group Danone is committed to so-called dual model of management,
business—it combines the usefulness for business (economic) and society (social).
It is based fits the belief that a successful business goes hand in hand with
investment in the society. From the first day in Bulgaria, Danone rigidly to the
model, this for many years finds manifestation in various projects expressing our
socially responsible activities. The Danone’s strategy is to support a smaller number
of projects, but for a much longer time. We believe that in this way the support is
comprehensive and much more tangible. Since 01 January 2013, the projects
Danone is working actively and focused on the external for the company audiences
are:
• “Denoniada”;
• “Active and healthy”;
• “The hour child”;
• Donations of products
• Initiatives aimed at environmental protection—a project to reduce carbon
emissions, the initiative “Put a tree branch with Danone” and “Earth Hour”.
As part of the Group Danone, “Danone Serdika” AD has formalized a policy on
environmental protection from 2004, when confirms to the international standard
for environmental management ISO 14001. The company‘s efforts towards envi-
ronmental protection, however, date back to earlier. The protection of nature, it is
inherent in our mission, namely “to bring health through healthy food in the greatest
possible number of people”, and as we know, clean and healthy food comes from
nature.
With 2001 on the territory of “Danone Serdika” daily ensures the selective
collection and recycling, management of hazardous substances, water consumption,
thermal energy and electricity, with the aim of optimizing processes and reducing
consumption of natural resources per unit of output.
Since 2008, Danone implemented a procedure to measure of carbon dioxide
(CO2) through a representative sample of their products. As a rule, an effort they
focused on energy efficiency, energy savings and recovery of excess heat.

Equipment is selected according to several criteria, such as part of them is related to
the carbon footprint that is generated. Always with the advantage are the projects,
as a result, which reduced hydrocarbon footprint. At the end of 2012, Danone BG
stumbled upon a common goal which they set themselves in 2008, namely, for
four years, they will be able to reduce carbon dioxide emissions of their products
with a 30% on a global scale. In particular, Danone Bulgaria plans to reduce the rate
of production over the period from 21.2%. One of the initiatives is the imple-
mentation of “Green schools Danone: All about nature” in 2011. It was attended by
their employees and their families. With the help of Grove, WWF, Ecopak, Gimel,
Bulgarian Biodiversity Fund and Natural History Museum has been more informal
and fun way to get acquainted with the basic five priorities of the environment
Danone Group: climate change, packaging, water conservation, sustainable agri-
culture and biodiversity. Transferrable knowledge and skills of our employees and
their families in order to gather more ideas for projects for the protection of the
environment and to pay attention to the small steps that lead to great achievements.
Of two years, the company participates in the global initiative “Earth Hour”, as of
31 March 2012, was delivered to 84 kWh of energy, equivalent to a productivity of
1400 standard bulbs at 60 W.
B. Environment: CEZ Bulgaria (Electricity): South-West (SW) and North-West
(NW) regions
The electricity power company CEZ intends to increase the use of renewable
sources in the next few years. In the next 15 years, CEZ intends to invest the total
amount of 30 billion Czech crowns in their development. About 20 billion of this
investment will be used for construction of new windmills. That is why all activ-
ities, related to use of renewable sources, except the ones for power generation from
biomass, were separated in the company CEZ Renewable Sources.
CEZ regularly conducts volunteer event, which involved staff and top managers
of company in Bulgaria. As part of these initiatives, are upgrading children’s
facilities in a number of kindergartens in the territory served by the company.
Replaced incandescent bulbs, energy saving lamps, clean yards, the shares are held
for the collection of children’s clothes and booklets and more. Children of em-
ployees of the company prepare cards and gave them to the home for the elderly for
the biggest Bulgarian holidays.
At the initiative of the CEZ have been repaired and repainted part of the electric
board along streets “G.S. Rakovski”, “Graf Ignatiev”, “Patriarch Evtimii”,
“Moscow”, bul. “Dondukov” and more. Artistic action with the aim of improving
the urban environment how to make it more attractive, modern and cosy. Campaign
street talented artists have transformed into works of art with just 100 electrical
switchboards, located in the representative part of Sofia. The campaign focus is on
the improvement of the urban environment and the education of a responsible
attitude to the elements on the part of the inhabitants of Sofia. In the future, CEZ is
planning similar actions in other cities of western Bulgaria.
C. Society: Mtel JSC. (Telecommunication): SW region

Mtel JSC. is the first mobile telecommunication provider in Bulgaria. During its
life it has been involved in numerous initiative and campaigns linked to different
aspects of CSR. Massive fundraising campaign for children in foster care in
Bulgaria is initiating from the national network for children. The campaign is part
of the second edition of the project “Accept child. Create the future”, carried out
from Mtel and non-governmental organizations. It provides financial support and
promotes education in the Russian Federation. In the framework of the charity
campaign was disclosed grants the number to which each may provide financial
assistance for children living in foster parents.
One Lev value donated SMS to the number 17 777, which should be with the
text DMS DETE. Donations can be made through Bank transfer IBAN
BG13UNCR76301078951570, as well as online on the website www.nmd.bg. The
project “Accept child. Create the future” comes from the Mtel for the second
consecutive year in partnership with the National network for children. In 2013, the
Mtel provides financial assistance to at least 200 children in foster care in Bulgaria.
The amount that Telekom donated to a child in the amount of 200 € and is
available at a time for adoptive parents; 300 € estimated amount for a child with a
disability. With this support, Mtel objectives to help foster families in meeting the
initial needs of children, their placement in their new home. This need and the
adoptive parents as a priority in the framework of the special research conducted in
late 2012. The results show that the adoptive parents in Bulgaria work with the
feeling that our society is ordered to the Russian Federation in the education of
children. So this year, the project “Accept child. Create the future” includes
fundraising campaign, which through introducing companies to business will
contribute to the efforts of adoptive parents for a better future of children.
Thanks to the first edition of the project “Accept child. Create the future”, 100
foster families received in 2012 additional financial assistance from Mtel. Program
partners are the national network for children, Bulgarian grants forum, the Ministry
of labour and social policy, State Agency for child protection, the newspaper Now
and NetInfo.
D. Working conditions and Human capital: Asarel Medet JSC: South Central
region and Pazardzhik region
Assarel-Medet JSC Mining and Processing Complex is the first, biggest and leading
Bulgarian company for open-pit mining and processing of copper ores providing
around 50% of the national production of the vital metal for the human develop-
ment—copper. The company is the biggest and main factor for the social and
economic development and the image of the municipality of Panagyurishte and the
district of Pazardzhik. It has structural-determinant significance for the Bulgarian
economy, as one of the leading industrial companies with an important contribution
to the raw materials independence and gross domestic product of the country.
Assarel-Medet JSC processes about 13 million tonnes of ore per year; thus,
ensuring sustainable and stable development and production at thorough utilization
of the mineral raw materials of the Assarel deposit.
In respect of CSR, the company is implementing the philosophy of the approach
in the area of working conditions, human capital, ecology, sponsorship and
partnership.
In the field of work conditions, Asarel-Medet JSC follows and strictly imple-
ments the rule that achieving corporate success is interlink with respecting moral
values and meeting ethic, legal, environmental and social anticipations of the
society to the company’s activity. Voluntary, profoundly realized and rationally
motivated commitment of the company to the priority care for environment pro-
tection, safe labour conditions, personnel development, human rights and social
needs consideration.
Systematic risk evaluation and application of higher standards of occupational
safety and health, which meet at least the minimal requirements by the legislation
and the OHSAS 18001:2002 international specification under which our company
was the first to be certified on 19 November 2003. Measures are: monitoring and
planning of complex and preventive measures in order to reduce and eliminate the
risk for the personnel health and life and to improve the labour conditions of all
people working in the company; unconditional observance of the occupational
health and safety requirements by the personnel and business partners on the ter-
ritory of the company; use of high quality working and special garment and
approved personal safety devices by workers; provision of efficient preventive
medical checks, high quality medical care and the highest level of health and life
insurance for all workers and employees; developing high health culture of the
personnel as an important prerequisite for a healthy and safe way of life; active
cooperation between the management body and representatives of the workers and
employees in order to ensure healthy and safe labour conditions.
Assarel-Medet JSC is active in partnership and sponsorship at local and regional
level. It is possible to be distinct following areas of involvement:
• Active involvement in the social and civil dialogue through successive actions
in order to create economic stability and social security.
• Donation orientated policy with a priority towards implementation of significant
infrastructure projects and life standard improvement in the municipality of
Panagyurishte—the place where we work and live and where our children and
grandchildren grow.
• Assistance for establishing cooperation between the municipality and dynami-
cally developing European and other cities based on our company’s high
prestige and contacts with international partners.
• Active involvement and encouragement of the regional, national and branch
association formation and efforts uniting in order to create favourable business
climate.
• Public–private partnership with the municipalities and the state along the
technological chain for copper mining and processing in the region of the central
Sredna Gora mountain through the Srednogorie Med Industrial Cluster.
• Sharing the sustainable development principles of the UN Global Compact of
which our company is a member.
• Contribution to Bulgaria’s authority establishment in front of the European and
world community. Participation in Euromin, the World Mining Congress and
support for the participation of Bulgaria in prestigious international initiatives.
8.4 Main Conclusions in CSR in Bulgaria
The overall acceptance of the concept for corporate social responsibility is very
important for the development of the modern society as the European commission
has defined CSR and published strategy on CSR in 2011.
The main idea of the CSR is the definition of the role and the responsibility of
the contemporary business economic, social and ecological development of the
society as the long term social expectations are stronger than the short term profit
expectations of the business.
Nevertheless, as the CSR is a concept of establishment business activities and
outcomes for society and ecology sustainability, the CSR has done on a voluntary
basis since now. Even though there is no exact list of activities describing the CSR,
we can outline three basic elements of the corporate social responsibility:
employment development as salary and tax payment as well as creation of new
jobs; social development as life being and labour infrastructure building; and social
inclusion and ecological development as charity to local social and ecology
infrastructure improvements.
By analysing, some good practices of CSR we could develop five directions that
explain the CSR’s impact over the regional development: (i) Gross domestic pro-
duct (GDP) per capita/Purchasing power standard (PPS) per capita;
(ii) Employment/Unemployment rate; (iii) In-patient average length of stay/
Hospital days of in-patients/Number of people at risk of social exclusions;
(iv) Participation rates in education/Education exclusion; (v) Rate of natural change
of population/Rate of net migration.
Analysis of Bulgarian case of CSR could be summarized in two directions:
• The highest CSR costs are done in south-west region. Thus, all of the indices
mention above are over exceeded the average level of Bulgaria and there is
some times difference with the next region.
• The case of south central region is interesting were the example of
Assarel-Medet is found. The results of the region differ as the CSR campaign of
company has changed. For example, with the indices of employment/
unemployment rate at the south central region: a middle position is in the
both indices, but they have highest change rate during the observed period as
they sharply increase/decrease 2005–2008 and 2012–2015, and vice versa:
sharply decrease/increase 2009–2011.
In conclusions, a more deep information base for CSR costs is needed to be built
a decision-making cause-reaction business model.
References
EC. (2011). EU strategy on corporate social responsibility. Accessed on 09.09.2017. http://eur-

lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0681:FIN:en:PDF%20. Accessed
on April 1, 2018.
Gogova, T. (2011). Corporate social responsibility and its influence over the company’s value
(pp. 23–24). Sofia: UNSS.
Diana Kopeva is a full time professor at the University of National and World Economy
(UNWE), Sofia, Bulgaria. She gives lectures on Strategic management, Entrepreneurship,
Business Planning, Cost-Benefit Analysis and Project Management. She has more than 100
scientific publications, based on his research interests. She is one of the leading researchers in the
area of business economics and entrepreneurship in Bulgaria. Her research interests are in the field
of start-ups, corporate social responsibility (CSR) and circular economy. She participated in
numerous projects (national and international) focused on CSR and transition from linear to
circular and regenerative economies.
Nikolay Sterev is full time professor in Organization and management of marketing at the
University of National and World Economy—Sofia (UNWE), Bulgaria. He is Head of Industrial
Business Department at the Business Faculty. He is Chairman of Association of Professors of
Industrial Economics and Management (APIUI). Main research field are: industrial growth,
leadership and marketing leaders, START-Ups and entrepreneurship, CSR in industry, industrial
marketing management.
Dimitar Blagoev is a associate professor at the University of National and World Economy, Sofia,
Bulgaria. He has Ph.D. degree in the field of Business Economy. He is a deputy Dean of Business
Faculty in University of National and World Economy. He actively participated as a lecturer in the
Institute for Postgraduate studies. At the University of National and World Economy he teaches
courses in Investments, Innovations, Economics of Enterprise and Innovation leadership. He has
more than 60 scientific publications, based on his research interests, in the field of innovation,
investments, industrial dynamics, human resource management. He participated as a trainer and
expert in projects (national and international) aiming increase of competences and skills of labour
force and development and implementation of investment and innovation projects.
Chapter 9
Property Inheritance by Women
in Kosovo
Simeana Beshi
Abstract One of the most important challenges in Kosovo remains the rule of law.
In Kosovo society, women are discriminated against in terms of the division of
inheritance in relation to males; although, legally the property should be divided
equally. In Kosovo, there are still barriers in that direction. Today in Kosovo, there
is a weak rule of law in general, since it still shows the dominance of patriarchal
practices, especially in rural areas, where inheritance is not shared as defined by the
law, as well as property created during matrimony is not recorded as property of
both partners. Lack of proper realization of women’s rights in general and insuf-
ficient existence of property rights on property acquired during the marriage life, in
particular, is a major obstacle to the development and empowerment of women in
Kosovo. Gender equality in our country is very controversial. Tradition is con-
sidered one of the key factors that made women in Kosovo more reluctant in search
of the right for inheritance. Some people see the request of the inheritance of
women as a risk of weakening or total termination of relations of the woman with
her family. The number of proceedings initiated in the courts for heritage profit is
only 10% of them are initiated by women, making 90% of them are initiated by
men. Although Kosovo is still rather traditional, it is still raising awareness of the
equal right to property, for both genders, compared with the past. The mentality has
changed in urban areas of Kosovo, while in rural areas still it is dominated by
traditional mentality. Through the treatment of this topic, I will aim at increasing
respect for human rights and fundamental freedoms by women’s rights in Kosovo.
Keywords Inheritance Position of women Inequality Notary Common

wealth
S. Beshi (&)
Faculty of Law, FAMA College, Pristina, Kosovo
e-mail: simeanabeshi@hotmail.com

160 S. Beshi
9.1 Introduction
Heritage is an ancient social category. It was first shown from the early stage of
development of human society, when some of the best material, in addition to the
social community, belongs to the designated persons. Legal basis for the deter-
mination and implementation of inheritance rights in Kosovo is the Law on
Inheritance of Kosovo it is based on the principle of equality in inheritance between
men and women. Kosovo laws guarantee equal rights and non-discrimination. The
right to own and inherit in terms of both the men and women indiscriminately. The
right to inherit is among the fundamental principles of human rights without dis-
crimination guaranteed by the international conventions.
Referred to various factors that affect the property’s heritage separating women,
such as the preservation of family relations, patriarchal traditions, education,
unemployment, (…) that reflect the typical traditional mentality of Kosovo society.
Although the right to inheritance is regulated by law and international conventions,
in Kosovo, it is practically solved by traditions and customs.
The customary law recognizes only a man as the heir and that is the reason that
drives most women to give up the right to inherit. Right codified still unable to
supplant the customary rules. The Canon continues to be present in rural areas as a
regulator of relationships hereditary.
9.1.1 General Description of the Problem
Realization of the legal and moral rights of inheritance by women is seen as a

problem that requires additional commitment of all institutional mechanisms and
civil society. Despite some achievements, women in Kosovo, especially in rural
areas, continue to be in an unequal position in many spheres of life, with particular
emphasis on non-fulfillment of the right to property inheritance. So, the right of
women to inheritance was treated by the society, but not in accordance with the law
and with modern European values.
The number of women, which realize their legal right to inherit is symbolic,
therefore, the increased need for a more active approach to the institutions and the
general public awareness of the population, that this legal right of women is real-
ized. Compared with the past, now there is a growing trend of women who carry
their owned properties, but the situation is still not at a satisfactory level. We can
say that the right of women to inherit is in its embryonic stage. It is disturbing
mentality and consciousness of the population, in terms of women’s rights as heir
and owners. Lack of inheritance of property by women is affecting the position of
women in the society, therefore, rightfully we can say that the role of women in
society is about (in)visible (Kosovar Gender Studies 2011).
This study explores and addresses the impact of various factors that affect the
indivisibility of property inheritance for women as patriarchal tradition, education,
9 Property Inheritance by Women in Kosovo 161
unemployment, illiteracy, low levels of awareness, not disturbing the parents

(brothers), lack of awareness for their rights, and reflecting the typical traditional
mentality of the Kosovo society.
Women in Kosovo, in most cases, do not enjoy the right to family heritage, as
family wealth evenly divided only between male family members. In practice, we
see that there are discrepancies between tradition and the legal rights that it may
have legal consequences.
Laws applicable in Kosovo guarantee equal rights for men and women, but the
weight of culture and tradition, the poor economic situation, low education, against
any effective equality, and the use of legal rights and legal mechanisms remains
extremely difficult. Otherwise, the right to inheritance is a fundamental right
guaranteed by the Constitution of the Republic of Kosovo, as the highest legal act
of the country. Kosovo women “de jure” are equal before the law, but “de facto”
remain discriminated. The large number of international instruments for human
rights has made the issue of gender equality to be a field of interest not only
nationally but also internationally. Those conventions determine the equal rights
without discrimination between men and women and undertake initiatives to pro-
mote gender equality in all aspects. An important place among the International
Conventions on Human Rights, occupies the Convention on the Elimination of
Discrimination against Women, which establishes the equality of human rights for
men and women, both in family and in society, as well as the elimination of all
forms of discrimination (Idrizi 2014).
Equality between men and women in Kosovo remains a sensitive issue. The
main research question is how are women heiress property in Kosovo. In empirical
work, focuses on the analysis of the position of women as successor. The main
result is that we have a great heritage disproportion in favor of men. On the other
hand, the notary functionality has improved the position of women in terms of
common property.
9.1.2 The Importance of the Study
This study attempts to provide a theoretical analysis of property inheritance by

women in Kosovo. The research conducted will help raise awareness of civil
society on women’s rights, including their inheritance of the directors as equal
gender.
The importance of this study consists in the recognition of the provisions of
domestic laws and international instruments on human rights that are relevant to
women’s rights, especially those that are relevant to women’s property rights.
This research includes the identification of the challenges that women face in
practice, as well as the possibility that voice can be raised in order to realize and
advance the position of women in society. The study carried out is important,
because it formulates the hypothesis that determines the position of women as the
property owners and heiress in Kosovo.
162 S. Beshi
9.1.3 Objectives of the Study
The main scientific question is how women are heirs of property in Kosovo. The
aims of this study are:
– To increase institutional law enforcement for heritage and gender equality law;
– To increase the number of women on the use of their right to own and inherit
property;
– Enriching the knowledge of beneficiary parties and relevant officials;
– The impact of traditional unwritten rules on the welfare of women in the real-
ization of inheritance and property rights;
– Strengthening the role of women and her awareness of the general public in
relation to inheritance and property rights.
9.1.4 Research Question and Hypothesis
Based on the conducted scientific research and literature review, we formulate the
main research question:
How much are women heiress of property in Kosovo?
To answer the main question we formulate the research hypotheses as follows:
Hypothesis 1: Males inherit more and women much less. There is a great imbalance
in favor of males heritage.
Hypothesis 2: Functionality of notary impact on improving the position of women
in terms of common property.
“The right of women to take legal action is limited […] and its ability to seek action
by the courts. In others, her status as a witness or her evidence is less respected or
weight less than any male. These laws or traditions restrict women’s right to seek or
retain her equal share of property and diminish her position as a member of the
independent, responsible, and valued member of her community” (Instituti
Gjyqësor i Kosovës 2012).
Illiteracy in Kosovo continues to be gender and age issue. Women in general are
more than twice as illiterate than men (7.5% vs. 3.3% in urban areas and 11.3%
compared with 5.5% in rural areas) (Population of Statistic Department 2011).
The Constitution of the Republic of Kosovo, Article 22, for the advancement of
the rights belonging to both genders in general and women in particular, has
provided direct implementation of the Agreement, as international instruments

(Kuvendi i Republikës së Kosovës 2008).
The issue of equality and non-discrimination in legacy is ensured by the inter-
national legal instruments that are applicable. As a point of reference for the
Universal Declaration of Human Rights (1948) which prohibits any kind of dis-
crimination against women. These principles are set out in the Preamble of the
Declaration which states that “recognition of the inherent dignity and of the equal
rights and inalienable rights of all members of the human family is the foundation
of freedom, justice and peace in the world” (UN 2016).
Other international instruments that guarantee and sanction equality and
non-discrimination are the UN Convention on the Elimination of All Forms of
Discrimination against Women (CEDAW), the Protocol to the Convention on the
Elimination of All Forms of Discrimination against Women, the European
Convention on Human Rights (…). Common to these legal acts is to guarantee,
validation, legal protection, and enforcement of the signatory states to the internal
legislation to harmonize these rights. These rights fall within the group of civil
rights that include political, economic, social, cultural, etc., where is promised the
fight against all forms of violence against women. Also Resolution 1325 of the
Security Council of the United Nations on Women, Peace, and Security invites
women from their experience in conflict contribute to maintaining peace and
international security. This resolution promotes increased representation of women
at all levels of decision-making in the prevention, management, and resolution of
conflicts (Gender Training and Research Center 2008).
In terms of these Conventions, the Constitution of Kosovo, Article 21 guarantees
human rights and fundamental freedoms, while Article 24 provides for equality in
front of the law and equal legal protection of rights regardless of gender, race,
national background, religion, etc. Within the positive laws in Kosovo that are
against discrimination the law that guarantees the right of persons to be treated
equally by the law and to enjoy equal rights and duties in all areas of life and not to
be discriminated against for any reason and in any environment (Kuvendi i
Republikës së Kosovës 2004a).
Then, the Law on Gender Equality, which in Article 16. Twelve envisaged that
children, women, and men inherit property equally (Kuvendi i Republikës së
Kosovës 2004b). The Law on Inheritance as a legal basis for inheritance, Article 3.1
provides that all natural persons under the same conditions are equal in inheritance
(Kuvendi i Republikës së Kosovës 2004c).
Canon of Lek Dukagjin, which is part of customary law, women are excluded
from heritage. According to the canon: “If the heir is a woman, then the male shall
be required until the 12th degree, only just that this property shall not be given to a
woman” (Kosovar Gender Studies Center 2011, p. 22).
The right of inheritance in general does not rule out the inheritance either gender,
rather, legal instruments in positive law and in international law, guarantee the right
of women to inherit. Examples of this are international documents and national
legislation referred to in this paper.
164 S. Beshi
From the reports of NGOs and international organizations operating in Kosovo

from 1999 onward, there is an overall assessment that women continue to be
subjected to unequal inheritance proceedings.
A research conducted by the monitors of BIRN about heritage in Kosovo and
court cases in this area of law, state that in most cases only men are subject to the
right to inheritance, while women voluntarily waive this right. Only in Pristina,
Gjakova, and Prizren, there are cases where women have inherited from their
parents’ property. In Ferizaj, Peja, Mitrovica, Glogovac, in 98% of cases women
waive their inheritance rights (Drejtësia në Kosovë 2012).
In Kosovo, often in professional debates or research studies have indicated that
in practice, however, women are excluded from property they own or have given up
their share of the property in favor of men in the family. In a survey, about the right
of property inheritance for women in Kosovo conducted in 2011, conducted by
USAID, more than 61% of respondents stated that even if we wanted the inheri-
tance their right will be prevented by the family and even those few women who
may be aware of their right to inheritance can decide to waive that right. 27.3% of
respondents put first the relations with brothers and their parents, then property
(USAID 2014).
According to the OSCE report conducted in 2010, there are a number of
obstacles related to the social position of women related to their right to inherit.
These obstructions occur, especially due to masculine mentality that the property of
the house should remain in the hands of man, as “the woman belongs to the man’s
door” (OSCE 2010).
Monitoring activities by USAID, regarding the justice system have focused on
several issues, including the treatment by the courts in property disputes, including
women. In court as discriminatory practices were observed: failure to notify the
married daughters in the hereditary procedure (Basic Court of Gjakova) and
counseling of married women for their share of inheritance to give them to their
brothers (Basic Court of Peja) (USAID 2014). “A justice delayed is a justice
denied” with all its meaning, it is present in Kosovo, which represents what can
rightly be considered as the main problem in the lack of public confidence in the
judiciary.
With functioning of notary system of the Republic of Kosovo citizens have
multiple interests. Citizens need not apply to a court for cases that are elected in an
extra procedure; each contract, which has to do with the circulation of properties
certified to the notary, not to the Clerk of the Court confirmations. Also, the
application of the notary system has a very large discharge of the courts with cases,
dealing with contentious proceedings, resolution-setting which Kosovo citizens
have to wait for months (Beka 2009).
According to a survey conducted by “POLIS,” respondents, who refused to
elaborate why would examine the notaries, all have an answer, because the pro-
cedure is faster (USAID 2015). Only recent transactions and agreements between
spouses dealing with property relations should be legalized by a notary service.
This, de jure, has improved the status of the division of marital property
(Färnsveden et al. 2014).
Since 2012, it has begun functioning of notary service; the courts are observed
reduction of the hereditary materials to the area. Notary has enabled citizens to
exercise their rights more quickly and easily. From the work of notaries practice
proved that no transaction or transfer of property is not done without consent of
both spouses and women, respectively. This is an important step to support women
in the field of heritage and common property.
From the sayings of the above mentioned, we can say that, despite the existence
of legal infrastructure in which women are treated as equal inheritance, practice
shows that the right of women to inherit, despite evolutionary changes, after 1999,
is still far from legal provisions because of the mentality, traditions and specific
position of men in the family.
9.3 Research Methodology
Research methodology, which is used in this study is qualitative analysis, which

will focus on the analysis of survey results.
Some of the methods that will be used during this study will be: descriptive
method; Inflict access qualitative methods (survey with judges from civil field,
notaries, and civil clerks) and historical methods.
9.3.1 Sample
In this study, it is used the probability sample groups (clusters) so that each group
represents or is a representative of the complete population. The population is
divided into several groups (clusters), each representative of the population.
A selection of study groups and are all units in the selected groups. The reason for
the selection of the sample relates to the eligibility level and provides a better
representation of the population for hereditary issues.
In seven municipalities in Kosovo were surveyed judges from civil field, notaries
and clerks, because hearing for inheritance begins and ends in the presence of these
profiles. The research surveyed ten judges who deal with the examination of civil
cases in seven Basic Courts of the Republic of Kosovo: Pristina, Prizren, Peja,
Gjakova, Ferizaj, Gjilan, and Mitrovica. Parts of the survey were seven clerks and
13 notaries from the municipalities of Kosovo. Total part of the survey respondents
were 30 profiles above mentioned.
It is applied detailed interviews with professionals in the field. Data collection
was conducted through personal interviews and direct written and e-mail, then the
data/information sources are primary. The next will be presented samples of
selected tables and charts (Fig. 9.1; Table 9.1).
166 S. Beshi
Fig. 9.1 Structure of respondents in chart form
Table 9.1 Structure of Municipality Civil law judges Notaries Clerks

respondents in table form
Prizren 2 3 1
Pristina 2 3 1
Peja 1 2 1
Gjakova 2 2 1
Ferizaj 1 1 1
Gjilan 1 1 1
Mitrovica 1 1 1
9.3.2 Research Instrument
This research was conducted through a questionnaire, which contains a total of ten
(10) questions about the implementation of property rights and inheritance of
property by women in Kosovo.
Questions are considered to be sufficient to demonstrate the gap between laws
and their practical application in society. Opinions of the respondents about the
property’s heritage of women in Kosovo, containing questions, which give infor-
mation on whether the provisions are foreseen by the law on the right to property
inheritance for women and their access to inheritance. The challenge is not faced
ex-officio initiation of the law on inheritance, in terms of reviewing the heritage of
the responsible official, who mostly disaffects women and customary law.
The survey was conducted through direct interviews with professionals in the
field area, where the possibility of mistakes is small and the data are more accurate
and more reliable. Submission of survey questions has become so generalized,
which gives more opportunities to respondents, to escape the essay question and
comment on something else or otherwise of what was required by the questions. In

the questionnaire, there are specific questions, so that we will have concrete
answers.
Inadequate responses by the respondent’s increases the possibility of mistakes in
reflection of reality regarding property and inheritance of property by women and
misrepresent it. We can say that half of the respondents gave complete answers.
9.4 Research Results
From the results obtained based on a qualitative approach to the inheritance of

property by women in Kosovo we can say that men inherit more and woman much
less. There is a great imbalance in favor of males heritage. Functionality of notary
impact on improving the position of women in terms of common property.
Heritage Law of the Republic of Kosovo shall ensure that all natural persons
under the same conditions are equal in inheritance. Therefore, to emancipate our
society regarding property and inheritance rights of women in Kosovo, it has
conducted research in the form of a questionnaire in seven Basic Courts of the
Republic of Kosovo, through which we get the answers and opinions of judges who
deal review of civil cases. Parts of the survey are also notaries and clerks of these
municipalities.
9.5 Discussions
1. Heritage Law of the Republic of Kosovo recognizes the principle of equality

and ensures that all natural persons under the same conditions are equal in
inheritance. Besides the existence of legal infrastructure, Kosovo, in the context
of inheritance and property rights of women facing the poor implementation of
the Law on Inheritance and continuity of existence of unwritten laws and the
impact of customary law. Legacy, although is regulated by law, “de facto”
governed by tradition and custom in the division of property. In practice, we see
that there are discrepancies between tradition and legal rights.
2. Based on the responses received from respondents, we can emphasize that the
procedure for examining the legacy ex-officio, unfortunately still remains at a
low level of implementation, because the civil registry officers fail to submit the
act of death in the courts, so that the inheritance procedure is initiated only
upon the proposal of the interested parties.
3. By hereditary reviewed cases, rarely or no review procedure was initiated
ex-officio for heritage by the court. Initiate court proceedings after lodging
hereditary proposals from parties. As a result of the examination procedure of
not initiating the procedure for the heritage it is also ex-officio delayed the
submission of the request for reviewing of the heritage draft. Often these
168 S. Beshi
proposals are not made until many years after the death of the testator. From the
data provided by the courts, we conclude that the death certificate is marked not
by all heirs, especially female heirs are not included.
4. Discriminated women do not file a claim and do not require to be entitled to
judicial decisions. According to court statistics, the number of proceedings
initiated lawsuits in the contentious procedure by women is extremely small, or
not initiated any subject for that matter.
5. The relevant municipal authority (registrar’s office) does not provide regular
monthly court information about documents of death certificates that issued to
citizens. At the entrance to the civil registry service, we did not find any public
announcements, which reminded citizens that false declaration of family status
and giving false testimony by witnesses is a crime and they are sanctioned if
they do act such.
6. Obtaining information from the Office of Civil Status, for each death certificate,
we have found in many cases that many female successors in death certificates
do not appear at all. Not included in the civil registers of all family members
and unreported deaths courts.
7. According to officials interviewed by the Civil Registry Office of the obstacles
they encounter in which are: insufficient human resources (lack of staff) and
financial services, the lack of space in the office and lack of adequate equipment
to work. Increasing the number of staff made only during the summer to
accommodate the additional requirements for the needs of the diaspora.
8. Judicial practice and research conducted with notaries, proved that men possess
more and women possess less, there is a large gap of inheritance in favor of
men, while the region of Pristina and Prizren lead to cases when women inherit
hereditary wealth. Even in the few cases, where women inherit dominance
observed in urban areas, much less to say at all in rural areas.
9. Despite that by law women and men inherit equally, in practice, when several
factors affect women waive the right of realization of the right to property and
inheritance. These factors are: the social, economic, traditional customs,
maintaining relationships with brothers or family, avoidance of conflicts,
non-efficiency of the courts, etc., ignorance of the law. The reasons and causes
of the phenomenon of our heritage are largely patriarchal society, where tra-
dition and law collide with each other.
10. Patriarchal traditions, living in large family community always had a negative
impact on the development of women’s rights to property and inheritance.
However, the establishment of education, educational, intellectual, and cultural
level, invasions from one place to another, it has contributed to our families,
relatives, society emancipated, and feminine in supporting the realization of
property and inheritance rights. If women encounter obstacles from family,
necessary for the inheritance, the law on inheritance, the law on gender equality
and anti-discrimination law obliges the state bodies and courts to protect the
rights of citizens and thus also women’s rights.
11. Since 2012, it has begun functioning of the notary service, the courts are
observed reduction of the hereditary materials to the area. Notary has enabled
citizens to not face delays in the processing of cases of inheritance, prolong the
proceedings, delays in execution of court decisions and other procedural
problems. Now citizens of their rights of inheritance can realize without delay
and in a shorter period of time. Notary offices engage more in verification of the
heirs, before issuing a document on the right to inheritance.
12. From the work of notaries, the practice proved that no transaction or transfer of
property is not done without consent of both spouses and women, respectively.
This is an important step to support women in the field of heritage and common
property. Functionality of notary services has led citizens to provide services
more quickly and easily and improvements of the position of women in terms
of the common property, as it is considered that it is registered in the name of
both spouses.
9.6 Conclusions
Women in our country is lagging behind in the implementation of the right to

property as a result of customary law and traditional relationships within the family
and our society. Women’s rights remain a major challenge for the development of
Kosovo society, in particular about their right to own, to inherit wealth and their
equal participation in the economy.
The current study examines the inheritance of property by women in Kosovo
how much are women successors of property in Kosovo, the influence to citizens to
perform notary services more quickly and easily and to improve the position of
women in terms of common assets. Through this research, we prove what re-
spondents think in different municipalities of Kosovo for these two hypothesized
cases.
The survey for the research questionnaire was used as the primary instrument to
get the views of respondents about the property and inheritance of property by
women in Kosovo, the impact of notary performing legal services for citizens and
improve the position of women in terms of common assets. The main goal of this
research is to emphasize that in Kosovo men inherit more, women much less. There
is a great imbalance in favor of males heritage. Functionality of notary impact on
improving the position of women in terms of common property.
To answer the main research question and to achieve the purpose of the research,
this study developed a basic theoretical and conceptual model. The information
used in this study is the combination of theories and research results on the ground.
Making validation of these two hypotheses, determining the property and inheri-
tance of property by women in Kosovo, the impact of notary performing legal
services for citizens and improve the position of women in terms of the common
property, and contribute scientific literature and the field of inheritance and property
170 S. Beshi
rights in general, with special emphasis of property and inheritance of property by

women.
A democratic state cannot be imagined without the woman and her active par-
ticipation in all spheres of social and political life.
9.6.1 Study Limitations
This study has its limitations, because it studies the property and inheritance of
property by women only in Kosovo. The findings are based mainly on the territory
and population of the Republic of Kosovo. It had to be used the quantitative
research methodology, statistical data collection by the court administration, the
civil registration offices, notaries, and municipalities across Kosovo, which lacks.
It explores only the Republic of Kosovo, therefore, future studies should be
extended to other countries in the region, namely in the neighbors states, using
comparative analysis between Kosovo, Albania, Macedonia or other countries
beyond.
In the research, females are have not been surveyed to understand their views on
“Heritage property by women in Kosovo,” how they consider the practical
implementation laws. Much of the research is conducted by respondents with ethnic
Albanians, leaving aside the inclusion of minorities.
9.6.2 Future Directions of the Research
The research can be extended to other countries in the region, namely in neigh-
boring countries and beyond, and the application of the comparative method.
Comparison of inheritance of property by women in Kosovo to other countries in
the region still presents an opportunity to research the future by academics and
experts in this field, but also by local NGOs in various countries of the Republic of
Kosovo.
In the future research, it should be expanded the circle of respondents and
increase their number, so that the information collected would be more convincing
and the possibility results be more realistic. The study should be expanded in terms
of inclusion of communities living in Kosovo, in order to possess the attitudes
resources and their position as part of Kosovo society about the property and
inheritance of property.
In the future, civil society, NGOs, and law-making institutions should organize
awareness campaigns for citizens (through public debates, brochures, and social
media), especially among the youth regarding property and inheritance rights of
women.
References
Beka, A. (2009). Noteria dhe Kadastri në Kosovë (pp. 13–14). Prishtinë, Kosovë: Kolegji
Universitar Biznesi.
Drejtësia në Kosovë. (2012). Trashëgimia në Kosovë- femrat ende besnike ndaj “traditës dhe
Kanunit”. (Online) Available http://kallxo.com/dnk/trashegimia-ne-kosove-femrat-ende-
besnike-ndaj-tradites-dhe-kanunit/. Accessed on November 12, 2018.
Färnsveden, U., Qosaj-Mustafa, A., & Farnsworth, N. (2014). Profili Gjinor i Vendit (p. 20).
Prishtinë, Kosovë: Orgut.
Gender Training and Research Center. (2008). Të kuptuarit e Rezolutës 1325 të Këshillit të
Sigurimit të Kombeve të Bashkuara mbi Gratë, Paqen dhe Sigurinë (p. 6). Prishtinë, Kosovë:
Friedrich Ebert Stiftung.
Idrizi, N. (2014). Instrumentet Ndërkombëtare për Barazinë Gjinore (p. 4). Prishtinë, Kosovë:
Instituti Gjyqësor i Kosovës.
Instituti Gjyqësor i Kosovës. (2012). Trajtimi i çështjeve të barazisë gjinore dhe mbrojtja e të
drejtave të gruas në Instrumentet Ndërkombëtare (p. 9). Prishtinë, Kosovë: IGJK.
Kosovar Gender Studies Center. (2011). Women’s property inheritance rights in Kosovo (pp. 17–
22). Prishtinë, Kosovë: KGSC.
Kuvendi i Republikës së Kosovës. (2008). Kushtetuta e Republikës së Kosovës. Kap. II
Kuvendi i Republikës së Kosovës. (2004a). Ligji Nr. 2004/3 kundër Diskriminimit. K. I.
Kuvendi i Republikës së Kosovës. (2004b). Ligji Nr. 2004/2 për Barazi Gjinore. K. I.
Kuvendi i Republikës së Kosovës. (2004c). Ligji Nr. 2004/26 për Trashëgiminë i Kosovës. K. I.
OSCE. (2010). Të drejtat e gruas në legjislacionin Shqiptar (p. 32). Shqipëri: Kingdom of the
Netherlands & Sida.
Population of Statistic Department. (2011). Women and man in Kosovo (p. 5). Prishtinë, Kosovë:
Sida.
UN Convention on the Elimination of All Forms of Discrimination against Women (CEDAW).
The protocol to the convention on the elimination of all forms of discrimination against
women, the European convention on human rights. https://www.un.org/womenwatch/daw/
cedaw/text/econvention.htm. Adopted by the UN General Assembly on December 18, 1979.
United Nations. (2016). The universal declaration of human rights. (Online) Available http://
www.un.org/en/universal-declaration-human-rights/. Accessed on June 7, 2018.
USAID. (2014). Women and commerce report (pp. 12–25). Prishtinë, Kosovë: CLE.
USAID. (2015). Të Gjeturat dhe Rekomandimet e Organizatave Lokale nga Aktivitetet e
Monitorimit të Gjykatës (p. 9). Prishtinë, Kosovë: Atrc.
Simeana Beshi born on May 15, 1991, in Prizren, Republic of Kosovo, a Ph.D. Candidate in the
field of Financial Law, at the University of Pristina “Hasan Pristina,” in Pristina, Republic of
Kosovo. Works as: Assistant Teacher at Public University of Prizren “Ukshin Hoti,” Faculty of
Law, str. “Rruga e Shkronjave,” no. 1, Prizren 20000, Republic of Kosovo; Lecturer at Kolegji
“FAMA”, Faculty of Law.
Chapter 10
Women Rights for Sustainable Business
and Entrepreneurship: Case
from Balkan Area
Abstract The first step in the protection of women’s rights is to be recognized as

human rights. For women to live happily and confidently in daily life, they have to
be in economic growth, have educational reasons and have a profession. Today, the
competence of countries regarding women’s rights is measured not only by legis-
lation but indices. This study examined the rights of women living in the Balkan
countries in the business world. As a result, it has been understood that it is
necessary to increase the proportion of women in the business world where they are
standard and to remove the obstacles to the rise of women in management. It is
recommended that the Balkan Business Women and Women Academician
Initiative Group are established to protect the rights of women in the business world
to decrease gender inequality in Balkan Countries.
Keywords Women Balkan Women rights Entrepreneurship Sustainable

business
10.1 Introduction
The concern of measuring gender inequalities emerged in the academic and political
environment after 1990, along with the awareness of the actual connections
between social risks and the presence of these inequalities, also as a result of
highlighting the associations between these and economic growth (Dollar and Gatti
1999a). Economic developments depend on many criteria that one of them is
contribution women to economy. According to United Nations, Women Reports
“When more women work, economies grow. An increase in female labour force
participation—or a reduction in the gap between women’s and men’s labour force
participation—results in faster economic growth” and also means healthy kids.
Evidence from a range of countries shows that increasing the share of household
K. T. Çalıyurt (&)
Business Administration Department, Trakya University, Edirne, Turkey
e-mail: kiymetcaliyurtconference@trakya.edu.tr

174 K. T. Çalıyurt
income controlled by women, either through their earnings or cash transfers,

changes spending in ways that benefit children. Women continue to participate in
labour markets on a different basis with men. In 2013, the male
employment-to-population ratio stood at 72.2%, while the ratio for females was
47.1% (United Nations, women, facts and figures … 2018).
However, women contribute to the economy needs to eliminate barriers entering
the business life like the gap between women and men for women. “Women in
business” is an emerging issue among the business world, academicians, NGOs,
governments and other parties. Each party takes the issue from a different per-
spective. However, everyone agrees that women in business have many, many
problems (Caliyurt 2017). According to Sawicka and others, “Equality is an
essential characteristic and indicator of democracy, which is why the goal of many
modern societies is the desire to respect the principle of equal opportunities because
undoubtedly translates into the quality of social, political and economic life of
citizens, thus ensuring a more sustainable and balanced socio-economic develop-
ment” (Sawicka and Lagoda 2015). For example, there are still some difficulties to
measure women’s contribution to the economy. According to Sabotinova from
Bulgaria (2016a) “Unpaid work as a women’s or gender issue has a long UN
history. There have been attempts from the United Nations and academic and
feminist circles for care and domestic activities the home to be classified as value-
generating work, and as a large component of wealth”. Few efforts have been made
in this direction both because of technical and methodological difficulties and of
what the statistical measurement of unpaid social reproduction would require …
The inclusion of unpaid work (household, caregiving or subsistence activities) in
the systems of national accounts would have major consequences, given the im-
portance of these instruments for policy-making and economic decision-making, at
both the national and international levels (Sabotinova 2016b).
Balkans, also called Balkan Peninsula, easternmost of Europe’s three great
southern peninsulas. There is no universal agreement on the region’s components.
According to Encyclopaedia Britannica, The Balkans regions include the following
countries. To make a good start discussion on women rights in Balkan area, listing
countries’ rank in Gender Inequality Index (GII).
• Albania, (Gender Inequality Index—70th)
• Bosnia and Herzegovina, (not listed)
• Bulgaria, (Gender Inequality Index—43rd)
• Croatia, (Gender Inequality Index—59th)
• Kosovo, (not listed)
• Macedonia, (Gender Inequality Index—69th)
• Montenegro, (Gender Inequality Index—79th)
• Romania, (Gender Inequality Index—77th)
• Serbia—with all or part of each of those countries located within the peninsula
(Gender Inequality Index—45th)
• Portions of Greece (Gender Inequality Index—87th)
• and Turkey (Gender Inequality Index—130th)
10 Women Rights for Sustainable Business and Entrepreneurship … 175
are also located within the geographic region defines as Balkan peninsula
(Encyclopaedia Britannica 2018).1
In this study, women rights in business in Balkan area and their ranks in GII,
report results, academic researchers related to women rights in business in Balkan
area and international pressure group activities and their reports are discussed.
10.2 Sustainable Reporting and Women for Sustainable

Business
For sustainable economic development and business life, companies should be

forced to disclosure about their gender activities. Caliyurt and Oruc held a search in
public companies in Turkey. In the discussions about the topic of women, despite
women being categorized as others, we should not ignore that they are both em-
ployees of businesses and partners of the society as a piece of it. How women take a
part in the CSR and sustainability operations of businesses, or how women have
perceived problems in the society and businesses are evaluated, and what is being
done has been the starting point of the research. Thus, the review the sustainability
reports of businesses included in Istanbul Stock Exchange Sustainability Index,
claiming they are sensitive about CSR is sought for. It is observed that most of the
63 firms that appear in the list, most have not yet issued a sustainability report,
some of them found annual reports adequate, and some of them issued CSR or CSR
compliance reports. Since these reports do not answer the research question, they
have been moved out of sample. When the sustainability reports of those 31
businesses are taken into consideration, it is seen that some of these businesses have
sustainability reports based on the holding that they are affiliated with.
Based on the sustainability activities of the enterprises, it is considered that the
topic of women can be considered in two dimensions. In the evaluations made, it is
seen that the businesses emphasize that they are sensitive to some or many of the
discrimination practices in business life about the topic of women that is stated in
the literature. It is possible to state that holdings and international companies in the
evaluation are making more efforts in this regard. The themes that are determined
accordingly are assessed depending on how women are treated as internal and
external stakeholders.
Here is some positive finding from our research. It is seen that especially banks
that have a sustainability report emphasize this matter;
It was the first Turkish bank to become a member of “We Connect International”, a global
organization that aims for women entrepreneurs to take part in the supply chain. It provided
women entrepreneurs with a total of 2.8 billion TL in loans until the end of 2015.
1
http://reports.weforum.org/global-gender-gap-report-2015/rankings/.
Fig. 10.1 Preferred salaries when men and women are up for the same role. Source 2017 Women,
work, and the state of wage inequality, https://hired.com/gender-wage-gap-2017
In 2007, Xbank, the first bank in Turkey to support women entrepreneurs who want to start
a business with Women Entrepreneur Loan, has also been in the pioneering position in the
sector as the first public bank to use TV banking and have offshore branches abroad. The
bank gives great importance to backing up women with an entrepreneurial spirit who aim to
establish their own business and the improvement and strengthening of businesses that are
driven by women’s labour force. In this context, the Bank which has continued its support
for women entrepreneurs since 1994, with its collaboration with KOSGEB Small and
Medium Industry Development Organization, has supported approximately 800 entrepre-
neurs with the training held in 17 provinces in 2013.2
While positive things are happening in the business sector, women in business
have many problems, however, sometimes problems are created by women as
follows because of lack of self-confidence. 69% of the time women in the industry
ask for less money than men. This example shows up that women should improve
her self-esteem (Fig. 10.1).
Laçka and Rushani (2016) stated that “Albanian nation historically has been
regressing in the emancipation and integration of women in society. However, in
recent decades, it can be said that satisfactory progress has been made in this
direction, but it is not enough. There is not a fact that women are banned from male
influence, but there is still a deficit, especially as regarded to older generations and
the middle ones. Now we have enough examples in society for successful women
and ladies, as in education, politics, as well as in the sphere of business. Even the
women have too many good examples of cooperation, such as cases of various
organizations and initiatives by women politicians that know and want to eliminate
partial ideological differences for the benefit of society and the common good.
Therefore, it is necessary to sensitize the whole society on the mass education of
2
Caliyurt and Oruç (2016).
women, emancipation and its full integration into society. This should be supported
by both genders, but especially from females, from women who have already been
successful, so women to enjoy their rightful place in society and not to become a
tool of calculations through quotas, but to fight with all democratic means to be
equal in representation”.
10.3 Indices and Regulations About Women Rights

in Balkan Area
There are important laws for protecting women in their current and business life.
The most important regulation is the CEDAW agreement. Equality of rights for
women is a basic principle of the United Nations. The Preamble to the Charter of
the United Nations sets as one of the Organization’s central goals the reaffirmation
of “faith in fundamental human rights, in the dignity and worth of the human
person, in the equal rights of men and women”. Article 1 proclaims that one of the
purposes of the United Nations is to achieve international cooperation in promoting
and encouraging respect for human rights and for fundamental freedoms for all
without distinction as to, inter alia, sex. The Convention of CEDAW defines
discrimination against women as “… any distinction, exclusion or restriction made
on the basis of sex which has the effect or purpose of impairing or nullifying the
recognition, enjoyment or exercise by women, irrespective of their marital status,
on a basis of equality of men and women, of human rights and fundamental
freedoms in the political, economic, social, cultural, civil or any other field” (http://
www.un.org/womenwatch/daw/cedaw/). In the following table, we will discuss the
reports published by shadow NGOs related to CEDAW commitment by countries
(Table 10.1).
As seen in the table, NGOs’ comments are very strict on regulations for
governments.
10.4 Scores from Reliable Indexes on Women Rights
Social gaps caused by gender differences were evaluated for the first time by PNUD
(UNDP) using two composite indicators:
• Gender-Related Development Index and
• Gender Empowerment Measure.
Among the criticisms these indicators have been subjected to, we note their
inability to adapt its territorial context of the phenomenon. The most popularized
quantification methods for the gender inequalities are proposed by PNUD (UNDP),
which produced two synthetic indicators used worldwide:
Table 10.1 Shadow groups reports related to Cedaw regulatıons in Balkan area
178
Country Population and female Higher education Wages Gender gap Women in decision Women entrepreneurship
population making
Albania Albania total population In Albania, there are 31% In 2014 in Albania, the The gender pay gap is As of 2014, Albania has According to INSTAT in
(http://www. of 2,893,000 inhabitants women with the title gross average monthly 10% (Institute of not achieved any of the 2014 (The Institute of
un.org/ consists of 49% women Professor versus 69% wage per employee is Statistics of Albania targeted quotas for Statistics 2015), the
womenwatch/ and 51% men (http:// men, 51% Ph.D.s versus 45,539 Lek. For men (INSTAT) 2014). That women participation in P percentage of women
daw/cedaw/; www.instat.gov.al/en/ 49% men, and 62% employees, the total means that men parliament (The owners/administrators of
Arqimandriti home.aspx). 42.8% of the docents and pedagogues average monthly wage is employees have a gross Organization for Security enterprises is 28.5%. The
and Llubani population lives in rural versus 38% men. 47,664 Lek and for average monthly wage and Co-operation in percentage of women
2018) areas, and 57.2% lives in Although that we have women, employees are 10% higher than women Europe average 24.8%, owners/administrators in
urban areas more women than men 42,852 Lek employees. Gender pay Beijing Platform target small enterprises (1–4
with the title Ph.D.s or gap varies depending on 30% and CoE employees) is
pedagogues men are the type of enterprise recommendation 40%). significantly higher than
ruling the system of ownership. The gross In the Organization for in other categories. From
education with 12 rectors average monthly wage Security and 2005 to 2014 the rate of
men versus 1 woman, 14 per employee in foreigner Co-operation in Europe women owners/
deputy rectors men enterprises is more than region, however, less administrators has
versus 9 women, 183 two times higher for men than half of the countries increased in all groups,
men as members of compared to women. For have reached any of the with the highest increase
Senate versus 90 women employees in public set targets and for enterprises with 1–4
and 44 men versus 15 enterprises, the gender recommendations (with employees,
women as deans, chiefs pay gap is almost only four countries that approximately 6%.
of department 170 men insignificant (−1%). In have exceeded the 40% During this period, for
versus 102 women Albanian private recommendation of the big enterprises with more
enterprises, the gender CoE) than 50 employees, the
pay gap is 8%, whereas in growth is 3.7%. During
Joint venture enterprises the year 2014 from
this indicator is 37% 17,377 newly created
enterprises, 31% of them
owned/managed by
women and 69% by men
(INSTANT-The Institute
of Statistics 2014)
(continued)
K. T. Çalıyurt
10
population making
Bosnia and Bosnia has an estimated World Bank revealed in Another frequent form of The National Gender In B&H, women hold Self-employed females in
Herzegovina 2018 population of their annual report of 189 violating women’s labour Action Plan on Gender 24.1% of top managerial 2014 were 19.1% while
(Petrid et al. 3.50 million. Women world economies (World rights is related to Equality (GAP), adopted position and 27.2% own males was 21.8%.
2018) population is 43.1. Bank 2015) 2 ranking maternity pay which is, in initially in 2007 and a business. Kosovo is a Regarding different
Regarding gender that shows how easy is to most cases, lower than renewed to cover the little bit lower, top industry sector
proportion in the do business in each the wage earned during period 2013–2017, builds management by females employment of females,
employment rate in 2014, country. According to work. The budget on national and global was 7.2% while business 60% of them were
the above report showed this report, B&H takes continually lacks funds conventions and owner was 11.1% of employed in services,
that there were 41.2% one of the least ranks in for maternity leave strategies (e.g. CEDAW, women (Palalic et al. 23% in agriculture and
men and 22.7% females the Balkans. Ratings payments and in the EU, UN) to promote the 2017b) 16% in non-agricultural
while regarding among them are period of crisis when the implementation of the or other related industries
unemployment rate, there Macedonia in 12th place, State reduces pricey LGE. It is complemented (Palalic et al. 2017c)
were 31.2% females and Croatia 40th, Montenegro security transfers, the first by the Financing for the
25.2% males 46th, Serbia 59th, on the target are the Implementation of the
Kosovo 66th, B&H79th budgets intended for Gender Equality Action
and Albania 97 the. For women and marginalized Programme (FIGAP)
domestic, especially groups (Idžakovic 2013) adapted to provide for the
foreign investors, this is a law’s long-term
significant burden if they implementation (Djulic
decide to invest in this and Kuzman 2013;
country (Palalic et al. AGEBiH 2016). Main
2017a) priorities in FIGAP
include ensuring
Women Rights for Sustainable Business and Entrepreneurship …
measures for women’s

increase in labour,
employment and access
to economic resources
(continued)
179
180
population making
Bulgaria It’s estimated that Although the Bulgarian The gender overall The gender pay gap in The main policy Female entrepreneurship
Bulgaria has a population government has adopted earnings gap is the Bulgaria widened from commitments in the area continues the upward
of 7.04 million in 2018. many documents in the difference between the 12.3% in 2008 to 13.5% of gender equality in trend globally. Latest
There are 1053 females past 15 years which average annual earnings in 2013, but was still Bulgaria are set out in the research shows that
for every 1000 males introduce policies and of women and men. It better than the European national strategy for women’s entrepreneurial
(Bulgaria Population programs for takes into account three Union average, going by gender equality 2009– activity is up 10%,
2018) development and types of disadvantages figures released by EU 2015, which aims to closing the gender gap by
improvement of women face: statistics office Eurostat “provide guarantees for 5% since 2014. In the
economic, social and • lower hourly earnings; ahead of International equal access to resources past year, 163 million
health situation of Roma • working fewer hours in Women’s Day on March and similar participation women were starting
people, it must be noted paid jobs; and 8, 2015 (Gender pay gap of both women and men businesses across 74
that the country’s • lower employment rates in Bulgaria … 2018) in decision-making, with economies worldwide,
second-biggest minority (for example when a view towards their while 111 million were
group is still at the very interrupting a career to successful personal and running established
bottom of all spheres of take care of children or social development and businesses. Among the
social organisation. The relatives). The gender the promotion of gender 63 economies surveyed
progress in educational overall earnings gap in equality in all spheres of in both this and the last
reforms is no exception Bulgaria stands at social, economic and report produced in 2015,
despite the presence of 22.8% (the average political life (National GEM found that Total
these political gender overall earnings strategy for promoting Entrepreneurial Activity
frameworks (Substantive gap in the EU is 39.6%) the equality … 2018)” (TEA) among women
equality and (The gender pay gap increased by 10%, and
non-discrimination … Bulgaria 2018) the gender gap (ratio of
2018) women to men
participating in
entrepreneurship,)
narrowed by 5%. These
(continued)
K. T. Çalıyurt
10
population making
same economies show an
8% increase in women’s
ownership of established
businesses (GEM 2016/
17—Special topic report
… 2018)
Turkey 80,845,215 (estimated in The participation and Income differences are The Committee stated its Women make up only While the rate of Early
2017) Female population representation of women seen between genders at concern in its 2010 14.7% of members of the Stage Entrepreneurship in
constituted 49.8% of in decision-making every educational level, Concluding Observations current Parliament, a Turkey in 2015 was
Turkey’s population. mechanisms is but it is more common “about the discrimination figure well below the 17.4%, it dropped to
According to the formal consistently low (the among those with lower faced by women in global average of 22% 16.1% in 2016. However,
data provided by the highest rate of educational levels. By employment, as reflected and the 30% target set by this rate (16.1%) is still
Turkish Statistical participation by women 2014, compensation in the hiring process, the the United Nations higher then the average
Institute in 2014 the rate in Parliament to date is differences between persistence of a wide Economic and Social rate of efficiency-driven
of women’s participation 17.08%, while at the level women and men who gender pay gap and of Council in 1995, and a economies (14%).
in the labour force is of Mayor it is 3.7%). In have primary or lower occupational segregation, decline from the previous According to the Global
30.3%. This is one of the addition to that, women’s educational level is 18%. as well as women’s Parliament’s 17.8% (UN Entrepreneurship
lowest rates in the world. participation in decision- This difference is 17.8% concentration in Women presents gender Monitor (GEM) 2016/17
According to the same making mechanisms from among those who have agriculture in rural areas review … 2018) Global Report released
data, the employment rate bureaucracy to the high school and higher as unpaid family workers today by Babson College,
is 26.7%. When we judiciary, business life educational levels. The with no entitlements Universidad Del
exclude unpaid female and academia, is very same situation applies to within the social security Desarrollo, and Universiti
Women Rights for Sustainable Business and Entrepreneurship …
agricultural workers in limited. By February management positions. system [28]. Turkey’s Tun Abdul Razak, 55%
rural areas, women who 2015, on the one hand, By 2014, female gender gap overall places of entrepreneurs
receive allowances for the percentage of women managers earn an income it 130th of 145 countries, worldwide expect to
home care (who, currently serving as 6.6% lower than male according to the 2015 create at least one job in
incidentally, lack social governor was 2.4% and managers (NGO shadow Global Gender Gap Index the next five years. In
security rights) and as minister was 3.8%. report to the seventh of the World Economic general, the expectation
women who work The rate of women’s periodic report … 2018) Forum (http://reports. for growth among
part-time or under representation in weforum.org/global- entrepreneurs is low.
flexible conditions, the Turkey’s Higher Judicial gender-gap-report-2015/ However, the ratio of
(continued)
181
182
population making
actual rate of employed Bodies are 14.2% rankings/). Turkey ranks early stage entrepreneurs
women is even lower. (TURKEY: Shadow 105th in educational who have the potential to
Furthermore, while the report summary … 2018) attainment, 105th in grow is high in Turkey
female unemployment political empowerment, and Turkey is second on
rate is 11.9%, this rate is and 131th in economic the list among the 62
much higher among participation and countries
young women aged 15– opportunity (Entrepreneurship
24 (20.4%) (TURKEY: Monitor (GEM) 2016/17
Shadow report summary global report … 2018)
… 2018)
Source Designed by the author
K. T. Çalıyurt
• GDI (Gender-Related Development Index) and

• GEM (Gender Empowerment Measure).
Subsequently, these two indicators were subjected to criticism coming from the
perspective of the composing solutions for subsequent indicators and also from the
inability to synthesize very different socio-cultural realities. The answer to these
inadequacies was the proposal of adjusting correctors or simple adjusted versions of
the two already consecrated indicators:
• Gender-related Development Index,
• Global Gender Gap Measure,
• Gender Equity Index,
• Social Institutions and Gender Index, etc. (Dollar and Gatti 1999b).
What learn from GDI?
• Biggest imbalance being characteristic for Greece (in the EU, Greece has the
largest multi-year female unemployment and also the most important gap
between feminine and masculine unemployment).
• Using the correlation techniques, Bye (2012) identifies the forms the longevity
differences between men and women become sensitive to the particularities of
the social, economic or geographical context. For the countries from Balkan
Peninsula, it is noted that if the level of urbanization is higher, women tend to
increase their longevity gap compared with the men’s one, as in the case of
countries experiencing a balanced distribution of the income, the relations being
reverse in countries where the infant mortality is higher than average or where
the health system is deficient.
• Countries such as Albania or Kosovo, where life expectancy at birth for women
is higher than the regional average, are downgraded because of the absence of a
longevity difference comparing to men according to the regional average. In the
same context, the best-ranked regions will be those which have a higher life
expectancy at birth and those where the women live longer, and, as the opposite,
the regions with a low life expectancy at birth and where women live less than
men (Tudora et al. 2015).
Technical Notes—How does Human Development Index Measure?
The Human Development Index (HDI) is a summary measure of achievements
in three key dimensions of human development:
• a long and healthy life,
• access to knowledge and a decent standard of living.
The HDI is the geometric mean of normalized indices for each of the three
dimensions.
Data sources for Human Development Index Measure

Human Development Index Measure consists of following criteria:
• Life expectancy at birth: UNDESA (2015)
• Expected years of schooling: UNESCO Institute for Statistics (2016), United
Nations Children’s Fund (UNICEF) Multiple Indicator Cluster Surveys and ICF
Macro Demographic and Health Surveys
• Mean years schooling: Barro and Lee (2016), UNESCO Institute for Statistics
(2016), UNICEF Multiple Indicator Cluster Surveys and ICF Macro
Demographics and Health Surveys
• GNI per capita: IMF (2016), UNSD (2016) and World Bank (2016).3
10.5 The Notes from Balkan Area in Gender Equity Index
Technical Note 4. Gender Inequality Index

The Gender Inequality Index (GII) reflects gender-based disadvantage in three
dimensions—reproductive health, empowerment and the labour market—for as
many countries as data of reasonable quality allow. It shows the loss in potential
human development due to inequality between female and male achievements in
these dimensions. It ranges from 0, where women and men are equal, to 1, where
one gender fares as poorly as possible in all measured dimensions. The GII is
computed using the association-sensitive inequality measure suggested by Seth
(2009), which implies that the index is based on the general mean of general means
of different orders—the first aggregation is by a geometric mean across dimensions;
these means, calculated separately for women and men, are then aggregated using a
harmonic mean across genders (Human Development Report 2016a).
Gender inequality remains a major barrier to human development. Girls and
women have made major strides since 1990, but they have not yet gained gender
equity. The disadvantages facing women and girls are a major source of inequality.
All too often, women and girls are discriminated against health, education, political
representation, labour market, etc., with negative consequences for the development
of their capabilities and their freedom of choice. The GII is an inequality index. It
measures gender inequalities in three important aspects of human development—
reproductive health, measured by maternal mortality ratio and adolescent birth
rates; empowerment, measured by proportion of parliamentary seats occupied by
females and proportion of adult females and males aged 25 years and older with at
least some secondary education; and economic status, expressed as labour market
participation and measured by labour force participation rate of female and male
populations aged 15 years and older. The GII is built on the same framework as the
IHDI—to better expose differences in the distribution of achievements between
3
http://hdr.undp.org/sites/default/files/hdr2016_technical_notes_0.pdf.
women and men. It measures the human development costs of gender inequality.
Thus, the higher the GII value the more disparities between females and males and
the more loss of human development.
The GII sheds new light on the position of women in 159 countries; it yields
insights in gender gaps in significant areas of human development. The component
indicators highlight areas in need of critical policy intervention and it stimulates
proactive thinking and public policy to overcome systematic disadvantages of
women (Human Development Report 2016b).
10.6 Compulsory Regulations for the Development

of Women’s Rights in the Business World
United Nations Global Compact (UNGC) is called as “the world’s largest corporate
Sustainability initiative” which invites companies to align strategies and operations
with universal principles on human rights, labour, environment and anti-corruption,
and take actions that advance societal goals. The UN Global Compact’s Ten
Principles are derived from the Universal Declaration of Human Rights, the
International Labour Organization’s. Declaration on Fundamental Principles and
Rights at Work, the Rio Declaration on Environment and Development and the
United Nations Convention Against Corruption (2017). UN Global Compact has
also announced 17 “sustainable development goals” (SDGs) which provide a his-
toric opportunity to unite all global stakeholders to end extreme poverty, fight
inequality and injustice, and protect our planet. Among these goals, goal five is titled
as “Achieve gender equality and empower all women and girls” (2017).
Turkey, as a developing country, is trying to catch high-level standards in
business by applying international accounting, auditing, taxation, sustainability and
gender equity standards. A total of 246 Turkish institutions have signed UN Global
Compact and announced that these companies promised to follow principles and
goals published by UNGC. Among 246 Turkish institutions, 77 companies are
profit companies and 35 of these companies have also signed Women
Empowerment Principles (WEP). It is found that 74 companies have invited women
as a member in the board. Many studies stated that women existence inboard effect
companies performance and accountability. In this study, women existence in board
or/and signing WEP has positive effect on sustainability reporting [45].
10.7 Discussion
The purpose of development is to provide a human-oriented progress which emphasizes

individual rights and freedoms. If women, who are the most vulnerable portion of the
society in regard to reaching individuals’ rights and freedom, become stronger, their
ability to participate in employment will increase accordingly. In addition, the fertility
Fig. 10.2 Gender inequality index
rate and infant deaths will decrease and finally the healthier, well-nourished and edu-
cated child population will increase (Yilmazer and Onay 2017).
It is necessary for women to be supported in the field of education, health, law
and freedom for the healthy development of the society and the more corporate
business world. As seen in the work done, women add value to the organizations
they are in many ways. However, advancement of women in organizations depends
on nine factors: friendships, personal factors, family responsibility, management
experience, work and family conflict, mentors and networks, organisational policies
and culture, societal factors, training and development (Caliyurt and Farooqi 2017).
These conditions should be provided by government- and business-related NGOs.
As a result, United Nations Development Programme Human Development
Reports Gender Inequality Index4 in Balkan area shows us there is a long way to
4
Gender inequality remains a major barrier to human development. Girls and women have made
major strides since 1990, but they have not yet gained gender equity. The disadvantages facing
women and girls are a major source of inequality. All too often, women and girls are discriminated
against in health, education, political representation, labour market, etc., with negative consequences
for development of their capabilities and their freedom of choice. The GII is an inequality index. It
measures gender inequalities in three important aspects of human development—reproductive
health, measured by maternal mortality ratio and adolescent birth rates; empowerment, measured by
proportion of parliamentary seats occupied by females and proportion of adult females and males
aged 25 years and older with at least some secondary education; and economic status, expressed as
labour market participation and measured by labour force participation rate of female and male
populations aged 15 years and older. The GII is built on the same framework as the IHDI—to better
expose differences in the distribution of achievements between women and men. It measures the
human development costs of gender inequality. Thus, the higher the GII value the more disparities
between females and males and the more loss to human development. The GII sheds new light on the
position of women in 160 countries; it yields insights in gender gaps in major areas of human
development. The component indicators highlight areas in need of critical policy intervention, and it
stimulates proactive thinking and public policy to overcome systematic disadvantages of women.
Fig. 10.3 Turkey’s rank in the human development index (HDI)

188
Fig. 10.4 Turkey’s rank in gender inequality index. http://hdr.undp.org/en/composite/GII. Accessed May 15, 2019
K. T. Çalıyurt
run to get better conditions for women in Balkan area however the accuracy of the
data is also a very important issue. It is recommended that the Balkan Business
Women and Women Academician Initiative Group be established to protect the
rights of women in the business world to decrease gender inequality in Balkan
Countries (Figs. 10.2, 10.3 and 10.4).
References
AGEBİH. (2016). Priority gender issues in Bosnia and Herzegovina, Georgia, Moldova, Serbia,
and Ukraine–with consideration to gender and governance. Agency for Gender Equality of
Bosnia and Herzegovina. http://www.gsdrc.org/wp-content/uploads/2016/07/HDQ1372.pdf.
Accessed on March 18, 2019.
Arqimandriti, M., & Llubani, M. (2018). Convention on the elimination of all forms of
discrimination against women. Committee on the Elimination of Discrimination against
Women Sixty-fourth session. Shadow Report, With a special focus to the applications and
implications of the Article 11 in shoes and textile industry in Albania, Albanian NGO’s
Shadow Report, Complementing the Albanian Government Reports CEDAW/C/ALB/4 and
CEDAW/ALB/Q/4/Add.1 to the CEDAW committee, Gender Alliance for Development
Centre Albania June 2016. http://tbinternet.ohchr.org/Treaties/CEDAW/Shared%
20Documents/ALB/INT_CEDAW_NGO_ALB_24256_E.pdf. Accessed March 12, 2018.
Bulgaria Population. (2018). http://worldpopulationreview.com/countries/bulgaria-population/.
Bye, S. (2012). Can structural indicators explain gender difference in life expectancy (LE) at birth
among WHO member countries? Tromso: Institut for samfunnsmedisin Universitetet i Tromsø.
https://ac.els-cdn.com/S2212567115001203/1-s2.0-S2212567115001203-main.pdf?_tid=c383
c006-3bcf-43e5-9ebe-3b9437d582d7&acdnat=1522133874_ce7c96a06108744dd0e6e447dd2
db2cc. Accessed March 3, 2018.
Caliyurt, K. T. (2017). Why women are important for sustainable world? Introduction. In Women
and Sustainable Business. Women and sustainability in business. United Kingdom: Routledge.
Caliyurt, K. (2018). Women Inboards & Effects on Sustainability Reporting: Case from Firms
Signed UN Global Compact in Turkey, February 10, 2018. https://papers.ssrn.com/sol3/papers.
cfm?abstract_id=3121748.
Caliyurt, K., & Farooqi, N. (2017). 8th International Women and Business Conference, July 25–
28, 2017. Sackville, New Brunswick, Canada: Mount Allison University Libraries. ISBN:
978-0-88828-254-5.
Caliyurt, K., & Oruç, I. (2016). Women in sustainability reporting: Case from Turkey. In 7th
International Women and Business Congress (p. 50). Prizren Ukshin Hoti University,
November 9–11, 2016.
Djulic, k., & Kuzman, T. (2013). Women On corporate boards in Bosnia And Herzegovina, FYR
Macedonia And Serbia. https://openknowledge.worldbank.org/bitstream/handle/10986/26119/
112580-WP-ECA-Women-on-Boards-2013-PUBLIC.pdf?sequence=1&isAllowed=y. Accessed
on March 8, 2019.
Dollar, D., & Gatti, R. (1999a). Gender inequality, income and growth: Are good times good for
women? Washington: The World Bank, Development Research Group, Mimeo.
Dollar, D., & Gatti, R. (1999b) a.g.e.
Encyclopedia Britannica. (2018). https://www.britannica.com/place/Balkans. Accessed February
23, 2018.
Entrepreneurship Monitor (GEM) 2016/17 Global report released today by Babson College,
Universidad Del Desarrollo, and Universiti Tun Abdul Razak. (2018). http://www.yeditepe.
edu.tr/en/news/global-entrepreneurship-monitor-gem-2016-results-have-been-announced.
European Parliament, STUDY Requested by the FEMM, Committee professional status of rural
women in the EU. (2019). http://www.europarl.europa.eu/RegData/etudes/STUD/2019/
608868/IPOL_STU(2019)608868_EN.pdf. Accessed on March 18, 2019.
GEM 2016/17—Special topic report—Women’s entrepreneurship. (2018). http://gemorg.bg/gem-
2016-17-special-topic-report-women-s-entrepreneurship/. Accessed on March 1, 2018.
Gender Alternatives Foundation. (2012). Substantive equality and non-discrimination in Bulgaria.
Shadow report submitted to CEDAW Committee for the 52nd Session 2012. http://
genderalternatives.org/images/Shadow_report_GAF_June_2012_Final.pdf. Accessed on
March 1, 2018.
Gender pay gap in Bulgaria has worsened, but still better than EU average. (2018). https://
sofiaglobe.com/2015/03/05/gender-pay-gap-in-bulgaria-has-worsened-but-still-better-than-eu-
average/. Accessed on March 10, 2018.
Goal 5. Achieve gender equality and empower all women and girls. (2017). https://www.
unglobalcompact.org/sdgs/17-global-goals#sdg5. Accessed on April 6, 2017.
http://www.instat.gov.al/en/home.aspx.
Human Development Report. (2016a). Human development for everyone. Technical notes
calculating the human development indices—Graphical presentation. http://hdr.undp.org/sites/
default/files/hdr2016_technical_notes_0.pdf. Accessed on February 25, 2018.
Human Development Report. (2016b). a.g.e.
Idžaković, F. (2013). Economic status of women. In Miftari, E. (Ed.), Annexe to the 3rd alternative
report on the implementation of CEDAW and women’s human rights in Bosnia and
Herzegovina (pp. 9–14). Sarajevo: Sarajevo Open Center.
Institute of Statistics of Albania (INSTAT). (2014). Albania in figures 2014. http://www.instat.
gov.al/media/3554/albania_in_figures_2014.pdf. Accessed on May 8, 2019.
Lacka, S., & Rushani, G. (2016). The political emancipation of Albanian woman in the Republic
of Macedonia from 1991 to today. In 7th International Women and Business Congress,
November 9–11, 2016. Prizren, Kosova: Prizren Ukshin Hoti University. http://uni-prizren.
com/repository/docs/CONFERENCE_PROCEEDING_PRIZREN_443216.pdf.
National strategy for promoting the equality between women and men. (2018). http://evaw-global-
database.unwomen.org/en/countries/europe/bulgaria/2016/national-strategy-for-promoting-the-
equality-between-women-and-men. Accessed March 5, 2018.
NGO shadow report to the seventh periodic report submitted by Turkey to CEDAW for the 47th
Session of CEDAW July 2016, Prepared by KADEM (Women and Democracy Association).
(2018). http://kadem.org.tr/wp-content/uploads/2016/09/CEDAW-REPORT-BY-KADEM.pdf.
Accessed March 14, 2018.
Palalic, R., Ramadani, V., & Dana, L. P. (2017a). Entrepreneurship in Bosnia and Herzegovina:
Focus on gender. European Business Review, 29(4), 6. https://doi.org/10.1108/EBR-05-2016-
0071.
Palalic, R., et al. (2017b). a.g.e. (p. 10).
Palalic, R., et al. (2017c). a.g.e. (p. 18).
Petrid, A., Vidovid, G., Hadžid, I., Gačanica, L., Umidevid, Ž., Dardid, D., et al.: Alternative
CEDAW report: Report of civil society organizations on implementation of the concluding
observations and recommendations of CEDAW committee for Bosnia and herzeGovina 2013–
2017. http://rightsforall.ba/wp-content/uploads/2016/11/CEDAW-Prevod-FINAL.pdf.
Sabotinova, D. (2016a). Making visible the invisible: Women’s unpaid labour. In Women and
Sustainable Business. Women and sustainability in business (p. 18). United Kingdom:
Routledge.
Sabotinova. (2016b). a.g.e. (p. 9).
Sawicka, J., & Lagoda, J. (2015). Gender and sustainability in the economic development—Equal
chances for women at the labour market. Oeconomia, 14(4), 115–125.
Seth, S. (2009). Inequality, Interactions, and Human Development. Journal of Human

Development and Capabilities, 10(3), 375–96.
The gender pay gap Bulgaria. (2018). http://ipmmp.um.si/wp-content/uploads/2017/09/GEM_
Womens-2016_2017_Report_v10.pdf. Accessed on March 9, 2018.
The ten principles of the UN global compact. (2017). https://www.unglobalcompact.org/what-is-
gc/mission/principles. Accessed on April 6, 2017.
Tudora, D., Banica, A., & Istrate, M. (2015). Evaluation of gender disparities from the Balkan
countries. In 7th International Conference on Globalization and Higher Education in
Economics and Business Administration. https://sci-hub.tw/https://doi.org/10.1016/S2212-
5671(15)00120-3.
TURKEY: Shadow report summary for the 64th pre-sessional working group of the committee on
the elimination of all forms of discrimination against women submitted by the Executive
Committee for NGO forum on CEDAW-Turkey12015. (2018). http://tbinternet.ohchr.org/
Treaties/CEDAW/Shared%20Documents/TUR/INT_CEDAW_NGO_TUR_21871_E.pdf.
UNITED NATIONS DEVELOPMENT PROGRAMME, Life expectancy at birth (2015). http://
hdr.undp.org/en/69206. Accessed on March 20, 2019.
UNITED NATIONS DEVELOPMENT PROGRAMME, IMF. (2016). Technical notes
Calculating the human development indices—graphical presentation. http://hdr.undp.org/
sites/default/files/hdr2016_technical_notes_0.pdf. Accessed on March 20, 2019.
UNITED NATIONS DEVELOPMENT PROGRAMME, UNSD. (2016). Technical notes
Calculating the human development indices—graphical presentation. http://hdr.undp.org/
sites/default/files/hdr2016_technical_notes_0.pdf. Accessed on March 20, 2019.
UNITED NATIONS DEVELOPMENT PROGRAMME, Worldbank. (2016). Technical notes
Calculating the human development indices—graphical presentation. http://hdr.undp.org/sites/
default/files/hdr2016_technical_notes_0.pdf. Accessed on March 20, 2019.
UNITED NATIONS DEVELOPMENT PROGRAMME, Expected years of schooling (of
children). (2016). http://uis.unesco.org/. Accessed on March 20, 2019.
UNITED NATIONS DEVELOPMENT PROGRAMME, Mean years of schooling (males aged 25
years and above). (2016). http://hdr.undp.org/en/content/mean-years-schooling-males-aged-25-
years-and-above-years. Accessed on March 20, 2019.
United Nations, women, facts and figures: Economic empowerment, benefits of economic
empowerment. (2018). http://www.unwomen.org/en/what-we-do/economic-empowerment/
facts-and-figuresdo/economic-empowerment/facts-and-figures. Accessed on February 3, 2018.
UN Women presents gender review of key laws to Turkish Parliament. (2018). http://eca.
unwomen.org/en/news/stories/2016/05/un-women-presents-gender-review-of-key-laws-to-
turkish-parliament. Accessed on March 9, 2018.
Yilmazer, M., & Onay, M. (2017). A different view of women’s employment: The case of Turkey
and Germany. In Women and Sustainable Business. Women and sustainability in business
(p. 43). United Kingdom: Routledge.
Prof. Dr. Kıymet Tunca Çalıyurt CPA, CFE, graduated from the Faculty of Business
Administration at Marmara University, Istanbul, Turkey. Her master’s and Ph.D. degrees are in
Accounting and Finance Programme from the Social Graduate School, Marmara University. She
has worked as Auditor in Horwath Auditing Company, Manager in McDonalds and finance staff in
Singapore Airlines. After vast experience in private sector, she has started to work in academia.
She is holding CFE and CPE titles. Her research interests are in accounting, auditing, fraud, social
responsibility, corporate governance, finance and business ethics, with a special interest in aviation
management, NGOs, women rights in business. She has been as visiting researcher in
Massachusetts University Amherst Business School. She is the founder of the International
Group on Governance, Fraud, Ethics and Social Responsibility (IGonGFE&SR) which was
founded in 2009. In 2009, she also founded the International Women and Business Group, which
organizes global, annual conferences. Kiymet has published papers, book chapters and books both
nationally and internationally on fraud, social responsibility, ethics in accounting/finance/aviation
disciplines in Springer and Routledge. She is book series editor in Springer with the title
Accounting, Finance, Sustainability, Governance and Fraud: Theory and Application, and book
series editor in Routledge with the title Women and Sustainable Business. Some book titles:
Emerging Fraud (with Sam Idowu), Corporate Governance: An International Perspective (with
Sam Idowu), Women and Sustainability in Business: A Global Perspective, Sustainability and
Management: An International Perspective (with Ulku Yuksel), Globalization and Social
Responsibility (with David Crowther), Regulations and Applications of Ethics in Business
Practice (with Dr. Jiang Bian), Ethics and Sustainability in Accounting and Finance, Volume I.
She is acting as member in editorial board Journal of Financial Crime, Social Responsibility
Journal, International Journal on Law and Management, Journal of Money Laundering Control.
She is regular speaker at International Economic Crime Symposium in Jesus College, Cambridge
University. She is member in editorial board Social Responsibility Journal, Journal of Financial
Crime, International Journal of Law and Management. She is partner of Herme Consulting in
Trakya University Technopark.
Chapter 11
The Relationship of Public Banks
in Turkey with Sustainable
Macroeconomic Factors
Başak Oktay Akın and Enver Erdinç Dinçsoy
Abstract Public banks in Turkey importantly took a part in providing supervision,

balancing the commercial affairs and developing the industry to prevent economic
problems after The Great Depression in 1929. Newly, for sustainability-focused
growth, public banks should possess financial policies to support the real sector by
covering of financial needs of municipalities, public institutions, SMEs, tradesmen,
and corporate firms. Also, for a functionally sustainable macroeconomic structure,
public banks should bring fluidity to the financial system structurally, manage a
rational physical asset, transform short-term funds to long-term funds, create de-
posit money, develop trade, and especially contribute to the distribution of income.
In this point, governments can make some interventions on the economy by using
public banks. Therefore, macroeconomic structure supported by the public banks
has vital importance from many aspects such as budget, financial system, the
balance of payments and borrowing, interest rates and financial markets, and
employment resulting in the development of the country and establishing a
sustainable growth path.
Keywords Banking sector Sustainability Macroeconomics
This study was produced from the post-graduate thesis titled “The Place and The Importance of
Public Banks in Turkish Economy” conducted by Başak Oktay Akın in Trakya University,
Institution of Social Sciences, under the supervision of Inst. Dr. Enver Erdinç Dinçsoy.
B. O. Akın
Department of Banking and Insurance, Keşan Yusuf Çapraz School of Applied Sciences,
e-mail: bask92@hotmail.com.tr
E. E. Dinçsoy (&)
Department of Banking, School of Applied Sciences, Trakya University, Edirne, Turkey
e-mail: erdincdincsoy@trakya.edu.tr

194 B. O. Akın and E. E. Dinçsoy
11.1 Introduction
Although it was decided to establish national banks in order to support private

sector in İzmir Economic Congress, Turkey (Koç 2000: 156) at first, public banks
were established in order to prevent economic disruptions after the 1929 crisis, to
provide supervision, order and balance in commercial affairs and to develop
industry. Another reason of establishing public banks is that they can provide funds
to investors with a more convenient price than other banks. The effect of govern-
ment on banks has also provided development for banking sector and economic
system. With the authorization of using, minting and supervising tools such as
money, currency, and valuable paper etc. the principle of etatism has risen.
Establishing public banks is also a significant step for laying the foundations of
national banks. Furthermore, while private banks cannot open branches all around
the country since it is costly, public banks can open branches even in smallest
settlements (Rezvanian et al. 2008: 704). Public banks, which try to reach the
people as much as possible, being able to provide funds with low cost and present
term loans with low interest carry out a significant financial function (Alam et al.
2011: 56). In this chapter, the relationship of public banks in Turkey with sus-
tainable macroeconomic factors will be discussed under.
11.2 The Place of Public Banks in the Sector
The government also performs certain interventions on public banks for several
purposes. These purposes are briefly; to increase the reliability and strength of
financial system (Patrick 1966: 176), to prevent the market failures that may occur
due to asymmetric and costly information, to finance projects that are important in
terms of society although they do not possess profitability and to provide banking
services even in hard-to-reach areas to provide financial development (Micco et al.
2004: 6). Executing these purposes by government is vital in terms of the devel-
opment of the country and a sustainable macroeconomic growth movement.
Public-owned banks have earned the trust of people with government support
that has been coming from the early years of the foundation of Republic up until
now and acquired advantage against private-owned banks in many ways. However,
these banks that experience various innovations, have faced situations such as
transfer, merging and bankruptcy from time to time.
As shown in Table 11.1, 51 deposit banks in 1960 have increased to 56 in 1990
and to 61 in 2000, reaching its highest level. After 2000, the number started to
decrease again. Shortly, although banks demonstrate a significant increase after
1985, they cannot carry on service by staying in the sector for long years. Besides
there are 34 deposit banks today, only 3 of them are public-owned banks. Since
1960, public-owned banks could not be more than 14. Especially in 1985, the
introduction of many banks to the sector did not influence public-owned banks, on
11
Table 11.1 Number of banks in Turkey according to their types

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2016 2017
(March)
Deposit banks 51 46 44 40 40 47 56 55 61 34 32 34 34 34
Public-owned 14 12 12 12 12 12 8 5 4 3 3 3 3 3
Private-owned 20 23 22 23 24 20 25 32 28 17 11 9 9 9
Foreign-owned 5 5 5 5 4 15 23 18 18 13 17 21 21 21
Banks that are – – – – – – – – 11 1 1 1 1 1
transferred to
savings deposit
insurance fund
Development and 0 2 2 2 3 3 10 13 18 13 13 13 13 13
investment banks
Participation banks – – – – – – – – – 4 4 5 5 5
The Relationship of Public Banks in Turkey with Sustainable …
Source https://www.tbb.org.tr/en/research-and-publications/research/17
195
the contrary their numbers are reduced. Private-owned banks however, did not
experience a significant change until 1990, reached the highest number in 1995 and
decreased to a number of 9 in time. Foreign-owned banks of which there were only
5 of them in the early years, have continued to increase in number with the change
in 1985 and the increase in the entrance of foreign capital to the country. Foreign-
owned banks have the highest number among deposit banks. Although develop-
ment and investment banks did not carry much service in the early years, they had
become more active after 1990 and have been keeping their seat in the sector since
2005. Investment banks could not carry out service until 2005 and these banks
which have become 4 in number in that year, are still active today.
To evaluate generally, the number of banks which was 51 in the early years of
banking business, has shown changes in time. It has experienced the biggest
increase in 2000 and has fallen to 52 in number by showing changes again.
Developing countries can support the growth by transferring the limited funds to
the sectors that can provide economic growth by loan. Banks electively provide
loans to the strong businesses, thus, they can provide increase in the event of the
conversion of funds, per capita income and growth rates. As shown in Table 11.2, it
can be observed that the share of public banks have increased in total loan volume.
This increase is an indicator that the public banks have carried out a significant
financial function in terms of Turkish economy. Furthermore, according to CBTR
data (Table 11.3), the share of general deposit volume of 3 (three) public banks,
Ziraat Bank, Halkbank and Vakıfbank, has increased up to 38% in April 2018.
Turkey Wealth Fund was established in August 26, 2016 by being announced in
Official Gazette. Some of the public organizations and some immovables were
transferred to this fund.1 Wealth Fund aims long-term investments to be made with
low interest environment. Furthermore, it is aimed to create a system that con-
tributes to the growth. After all, it is expected to strengthen funds by putting
forward public property and develop in economy.
11.3 Public-Owned Banks and Budget Relationship
Governments can make some interventions on economy by using public banks.

Since public banks have duties such as stabilizing the economic balance, they carry
out tasks that are given by the government. Economic intervention can be carried
out in 3 different ways; directed loan, reduced (subsidized) loans and warranties
(Okutan 2010: 202).
Governments control banks and other institutions in order to provide profit such
as employment, subvention for their supporters (Sitorus and Srinivas 2004: 3).
Furthermore, they can lead customers such as farmers, public institutions etc. for
1
Publicly owned shares and some immovables of Ziraat Bank and Halkbank were transferred to
Wealth Fund. The process about the transfer of Vakıfbank is in progress.
11 The Relationship of Public Banks in Turkey with Sustainable … 197
Table 11.2 Loan volumes in Year Public banks Banking sector Ratio (%)
Turkish banking sector
(in thousands) 2005 30,791,043.00 137,229,568.00 22
2006 43,203,134.00 192,070,142.00 22
2007 56,221,420.00 242,927,249.00 23
2008 73,904,750.00 302,010,858.00 24
2009 89,121,080.00 335,210,049.00 27
2010 131,215,641.00 483,818,493.00 27
2011 169,423,852.00 639,126,816.00 27
2012 189,617,429.00 759,762,194.00 25
2013 264,707,344.00 1,018,735,495.00 26
2014 319,439,801.00 1,209,005,135.00 26
2015 402,770,228.00 1,452,160,856.00 28
2016 492,772,822.00 1,686,908,873.00 29
2017 632,005,946.00 2,045,329,483.00 31
2018 728,267,942.00 2,283,353,775.00 32
April
Table 11.3 Deposit volumes Year Public banks Banking sector Ratio (%)
in Turkish banking sector
(in thousands) 2012 182,811,129.00 505,680,036.00 36
2013 215,391,989.00 592,817,263.00 36
2014 229,241,064.00 655,831,096.00 35
2015 259,701,266.00 705,882,250.00 37
2016 302,834,417.00 834,832,668.00 36
2017 354,942,265.00 943,429,943.00 38
2018 378,918,378.00 993,972,449.00 38
Nisan
loans to be used in fields such as road, substructure and superstructure. Thus, by

providing fund flow to the needed fields, funds can be obtained. Governments can
give loan with low interest rates in order to protect domestic producers and can
protect the consumer by keeping the price of much consumed goods low. Hence, it
is aimed to reach a strong level in international arena by supporting production. The
cost that emerges as a result of using loans that are under the interest rates from
banks is tried to be reduced by making other customers to use loans that are above
the interest rates. Directed loan and subsidized loan are provided by the government
in cases where the customer is not reliable or when the interest rate is applied lower
than the interest rate on the market. Since the warranties will be compensated by the
government if the obligations are not fulfilled, it does not possess any risk. If public
banks experience a situation where they may have difficulty in repayment as a result
of these risks, they undergo restructure or liquidation.
Because of some conditions that public banks ignore while performing banking
activities, they may create problems on economy. Public banks that give loan to a
person or institutions that might have difficulty in repayment with the effect of
directed loans, increase the non-performing loans and this situation causes signif-
icant problems on budget by increasing the debts of the bank.
11.4 Public-Owned Banks, Growth and the Relationship

of Financial System
The place of public banks is extremely important in financial system with features
such as gathering savings, managing investments, shaping the sector with various
innovations and knowing the investors better in time and many researches were
conducted about their roles in economic developments. Generally, banks have two
opinions about government ownership; these are growth and political opinions. In
countries with financial system where growth is expected, a positive progress was
not observed for private banks which play the role of improvement by directing the
fund to the productive sector, hence governments have taken steps to carry out the
role of development banks with gathering savings by interfering banks and
directing them to strategic, long-term projects (Otchere 2005: 3). Governments use
public banks as a tool to execute their political objectives. Politicians provide
employment and subvention to their supporters in exchange for their support and
votes. According to this view, research reservation policies that emerge as a result
of governments’ taking banks to their ownership will slow down the financial
development.
In banking sector, unlike other sectors of the economy, the relationship between
the interaction in terms of competition and financial stability should be measured
well, while performing competition policy. Big competition (static) might be good
for productivity, but it may result in negative for financial stability (Allen and Gale
2004: 453). The financial stability might increase if the competition between the
banks will decrease, but the possibility of reduction in wealth emerges. Financial
stability is effective in the transfer of resources between the saver in economy and
producer. In the case of active performing of financial system, risks are distributed
equally and it causes financial system to be desensitized against unexpected situ-
ations. Since crisis environment prevents production, there will be a reduction in
production. Public banks in our country were established in order to enhance the
economy structurally, which was negatively affected by 1929 crisis. The govern-
ment aimed to interfere the economy more easily by using public banks as a tool
and to play a more active role in the economy with the policies it will implement.
Since the activity of public banks is slightly low compared to private banks,
competitive environment could not be established. Furthermore, because of the
possibilities and privileges provided to public banks, they have surpassed private
banks in some situations. Investors prefer public banks more, thinking that
government provides warranty and for this reason public banks which have a wide
customer portfolio acquire more funds compared to private banks. Possibilities that
are provided for public banks which allow customers to obtain high-income with
low costs have also reduced the competitiveness of private banks and prevented
them to be active within economic system. In his study, Yaşa (2008) mentioned
data measurement analysis in Turkish banking system between 2002 and 2004.
21 banks, 3 of them public banks, were analyzed. As a result of the analysis, it was
found that the most important factor in determining the activity of banks in the
sector is their size of assets. According to another result, public banks acquired
closer activity2 values than private banks.
According to Beck and Levine (2004), there is a direct relationship between
banking sector and growth. In the panel analysis study conducted for 40 countries,
covering the years 1976–1998, the development of banking sector was evaluated
with the loans provided to private sector and a positive development was deter-
mined in long-term. In their study, Aslan and Küçükaksoy analyzed economic
growth and financial development for each year. Causality relationship was
examined for the years between 1970 and 2004 and the Vector Autoregression
(VAR) Granger model was applied. As a result of the study, it was concluded that
financial development in Turkey affects growth or causes growth.
11.5 Public-Owned Banks, Balance of Payments

and Borrowing Relationship
Towards the end of 1980’s, liberating capital mobility has made transnational
borrowing common. This situation has shown increase in 1990’s with the growth in
the countries’ need of source and loan demands with each other. Countries provide
financing through borrowing. Especially, underdeveloped countries prefer bor-
rowing from foreign countries in order to sustain their economy since they cannot
perform savings. Developing countries prefer external borrowing since their own
savings are inadequate. Developed countries should increase their share in eco-
nomic development by increasing production instead of reducing consumption
(Gündüz and Dinçsoy 2016: 220).
Governments should support subjects such as increasing employment, devel-
oping infrastructure projects, supporting big projects, education, transportation and
health as a priority (Karagöz 2002: 99). However, while executing these, since they
require a certain source, they are obliged to prefer external borrowing. As long as
this borrowing is not excessive, it can contribute to the economies of developing
countries.
2
At the same time, activity concept is determined according to inputs (number of branches, number
of staff) and outputs (interest income, investments) which were discussed in the study.
Since developing countries cannot provide enough savings, they balance deficits
emerging from current accounts with external borrowing. As long as the foreign
trade deficit which is the basic cause of current deficit is not narrowed, there won’t
be any recovery in the amount of external debt. For this, export strategy can be
improved by increasing the domestic production and if the country’s sources are
used effectively, foreign dependency would be reduced and balance of payments
process healthily.
As well as budget deficits are not seen commonly in developed countries, having
low external debt does not affect the budget in the process of paying the debt. Along
with this, factors such as capital inflow to the country, increase in exports, and
adequacy of foreign currency reserve are effective in the protection of balance of
payments.
In our country external borrowing is usually preferred in order to narrow the
deficit in the balance of payments or to pay the debts, however this situation have
emerged the condition of not being able to pay the debts. When the data for the last
5 years is examined (Table 11.4);
Although there is a decrease in the amount of loans that are used from IMF since
2012, total external debt has increased over the last 5 years. According to TSI data,
only Turkey does not possess external debt among OECD countries in 2016. While
our external debt is sustainable in short term, it does not demonstrate a very strong
structure in the long term. For this reason, giving importance to the subjects such as
export policies, domestic savings, reducing imported goods and domestic produc-
tion will be able to balance debts.
11.6 Public-Owned Banks, Interest Rates and Financial

Market Relationship
Since public banks are in competition with other banks in the sector, they gain some
advantages. Interest rates alteration, which is one these advantages, have provided
them an advantage by increasing the share of public banks in the market. Along
with this, since public banks gather official deposit with low interest rates, they can
gather sources with lower cost compared to private sector banks.
Table 11.4 External debt and loan usage (million USD)

Year Total external debt Long term external debt Debt received from IMF
2012 339,561.9 239,406.9 2338.4
2013 389,765.5 259,474.5 1476.8
2014 401,811.1 270,246.1 1388.8
2015 396,083.1 294,206.1 1330.4
2016 404,459.5 306,457.5 1289
Source http://www.tuik.gov.tr/UstMenu.do?metod=istgosterge
Since public banks do not have to worry about loss-making and can transfer their
losses to the Treasury cyclically, they did not abstain from giving deposits with
high interest rates. Against this situation, private-owned banks also increase their
interest rates in order not to lose the funds they have. Hence, banks in the system
can increase their interest rates successively.
In the case of experiencing liquidity shortage of public banks, money market
interest rates increase as well as deposit interests. Since private banks struggle in
bearing the cost of high interest rates, they cannot demonstrate much activity in the
system.
Financial markets are the markets that provide transfer of funds from those who
have fund surplus to those who have funding gap with financial intermediary
(Mishkin 2007: 23). Financial tools and financial institutions in this mechanism
help the system to operate effective and healthy. Banks which are important factors
in the effective usage of funds in the financial system contribute to the economy
greatly. Investors who have fund surplus want to make good use of their invest-
ments in banks and banks will give these funds to those who need them, thus, idle
funds will be evaluated.
In financial system, fund transfer is conducted through two ways, indirectly and
directly. In indirect finance, fund offerors transfer their funds to fund requesters
through financial intermediaries. These funds consist of deposit and loans in gen-
eral. In direct finance, on the other hand, fund offerors can give their funds to those
who request their funds without intermediaries. Tools that are used in direct finance
consist of capital market tools (bonds and stocks).
Because of the competition between the banks that are in the lead in deposit and
loan departments, some imbalances may occur in the system. For example, while
there are various practices such as the size of the deposit and interest rate while
raising fund, raising deposit with a single interest rate strategy in public banks can
be observed. This situation causes investors to prefer public banks instead of private
banks, hence public banks to profit at the end of the year.
Swap contracts used by public banks increase the profitability of both banks and
customers. Swap contracts are contracts in which the bank and investor changes the
asset in the type of currency with the interest applied on the asset or the responsible
in a given period. Hence, the risks that emerge with the changes in interest and
foreign exchange can be reduced. Investors prefer these financial tools in order to
make more profitable moves with less risk.
Possessing various precedence of public banks have become very important for
investors. They have created perception of trust because they are public banks and
their profitability have increased as much. Public banks which are one of the basic
structures of financial system contribute greatly to the operation of the system and
to the economy.
11.7 Public-Owned Banks and Employment Relationship
Among the founding purposes of public banks, there are many elements different
from private banks such as employment creation, contributing to the economy and
to the financial requirements of the government. Employment creation, which is one
of these purposes, have caused excessive employment with the increase in the
number of public banks’ branches and further this situation caused decrease in
quality and increase in expenses (Marston and ve Narain 2004) Public banks which
were aimed to be used as a tool to increase employment by the state, have faced the
increase in the expenses. However, banks’ increasing employment and their
increased activity as a result of the confidence they acquire may create some
imbalances in banking sector.
There hasn’t been a change in the number of public banks since 2010. But when
Fig. 11.1 is examined, there has been a significant change in the number of bran-
ches of public banks since 2012. The increase in the employee after 2014 is
remarkable as well (Table 11.5).
The number of employees is significantly higher than other banks. According to
UMT data, average employee number in banks is higher in public-owned banks
than private-owned banks between the years 1966 and 2016. With the increase of
3838 people between 1981 and 1986, the number of employees working in
public-owned banks has passed 9000. When private-owned banks are observed,
they demonstrate an increase of 193 people in the same period and come to a
number of 2736 employees. The other significant increase in public banks was seen
between 1996 and 2001, but a decrease of approximately 5629 people is observed
after the 2001 crisis. Finally, the average number of employees working in
public-owned banks has reached more than twice of the employees working in
private-owned banks in the year 2016.
11.8 Result
It is possible to sort banking sector according to various factors such as structural

features, economic features, activity fields and capital structure. In general, banks
can be classified into two, according to their capital structures as “deposit banks”
and “development and investment banks”. It is also possible to sort them according
to the capital resources as national capital banks and foreign capital banks.
Furthermore, banks that are established with both domestic and foreign capital can
be added to this classification.
Banks that are established within the borders of Turkey and of which all of their
capital was paid with domestic money are named as national-owned banks. These
banks split up to three within themselves: Public-Owned Banks,3 Private-Owned
3
Banks of which their capital is covered by treasury on behalf of the public or statutory bodies.
Fig. 11.1 Average number of employees per bank. Source https://www.tbb.org.tr/Content/

Upload/Dokuman/7349/TBB_sube_personel_bilgi_notu_100316.pdf
Table 11.5 Branch and staff information of public banks

Numbers of 2010 2011 2012 2013 2014 2015 2016 2017
Banks 3 3 3 3 3 3 3 3
Branch 2679 2894 3058 3329 3456 3647 3699 3697
Personnel 47,128 49,218 50,914 53,647 53,793 57,475 57,509 58,330
Source https://www.tbb.org.tr/modules/banka-bilgileri/banka_sube_bilgileri.asp
Banks4 and Mixed-Owned Banks.5 On the other hand, location of banks of which
all of their capital is covered by foreign person and institutions are usually outside
of Turkey and these banks can open branches in Turkey if they want. There is also
Central Bank which was established in order to help to provide the stability and the
development in the economy by using various money policy tools, do not seek
profit and has the authority of all kinds of supervision and management. If
public-owned banks were evaluated specifically in Turkey, they have gained the
trust of the public with the support of the government from the foundation years of
the Republic up until now and acquired advantage against private banks in many
aspects. However, duty losses of public banks was liquidated as a result of
restructuring them with the purpose of privatization at the early years of 2000, more
caution was exercised in crediting activities and significant savings were provided
in their expenses. Today,6 public banks should find funds that have lower cost than
foreign markets, support growth and would contribute to the development.
4
Banks which was established by private person or institutions, not by public capital.
5
Banks of which some of their capital is covered by the government and some of them by legal
entities.
6
Publicly owned shares and some immovables of Ziraat Bank and Halkbank were transferred to
Wealth Fund. The process about the transfer of Vakıfbank is in progress.
Furthermore, public banks play an active role in the covering of financial needs of
municipalities, public institutions and organizations, SMEs, tradesmen and corpo-
rate firms under favorable conditions and in the finance of big projects.
On the other hand, public banks give a significant support to the construction
sector which is the locomotive of Turkish economy and mainly give credits to this
sector. However, for sustainability-focused growth they should possess the possi-
bility of marketing financial products in a wide range for policies that support the
real sector, take important steps towards source diversity and increase the share of
deposits. For a functionally sustainable macroeconomic structure to emerge, public
banks should bring fluidity to the financial system structurally, manage rational
physical asset, transform short-term funds to long-term funds, create deposit
money, develop trade and especially contribute to the fair distribution of income.
As a result, while public deposit banks provide people to gain interest income
from their savings on the one hand, they also carry out a significant function in
terms of financial markets by providing fund flow. However, for public banks to
contribute to a sustainable growth environment in Turkey, they should possess
strong capital base and balanced structure. In order to keep pace with global
competitive environment with the developing technology and the increasingly
difficult economic conditions, public banks should expand their service opportu-
nities in areas where financial system is in need of as well as accepting deposits and
giving loans.
References
Alam, H. M., Raza, A., & Akram, M. (2011). A financial performance comparison of public vs
private banks: The case of commercial banking sector of Pakistan. International Journal of
Business and Social Science, 2(11), 56–64.
Allen, F., & Gale, D. (2004). Competition and financial stability. Journal of Money, Credit, and
Banking, 36(3–2), 453–480.
Beck, T., & Levine, R. (2004). Stock market, banks and growth: Panel evidence. Journal of
Banking & Finance, 28(3), 25–38.
Gündüz, S., & Dinçsoy, E. E. (2016). İhracatın Finansmanında Eximbank’ın Rolü ve Performans
Analizi. Akademik Sosyal Araştırmalar Dergisi, 22, 218–228.
Karagöz, K. (2002). Türkiye’de Dış Borçlanmanın Nedenleri - Ekonometrik Bir Değerlendirme.
Sayıştay Dergisi, 66(67), 99–110.
Koç, C. (2000). İzmir İktisat Kongresi’nin Türk Ekonomisinin Oluşumuna Etkileri. Atatürk
Dergisi, 3(1), 145–167.
Marston, D., ve Narain, A. (2004). Painting the SFI landscape, observations from a survey of
state-owned financial institutions. In Conference on The Role of State-Owned Financial
Institutions: Policy and Practice. Washington D.C.: World Bank.
Micco, A., Yeyati L. E., & Panizza, U. (2004). Should the government be in the banking business?
The role of state-owned and development banks. Inter-American Development Bank Çalışma
Tebliği.
Mishkin, F. S. (2007). The economics of money banking and financial markets (8th ed.). USA: The
Addison-Wesley.
Okutan, M. (2010). Bütçenin İç Borçlanma ve Finansmanının Bankacılık Sektörü Üzerinde

Etkileri [Dokuz Eylül Üniversitesi Sosyal Bilimler Enstitüsü Maliye Ana Bilim Dalı Maliye
Programı Doktoru Tezi].
Otchere, I. (2005). Do privatized banks in middle- and low-income countries perform better than
rival banks? An intra-industry analysis of bank privatization. Journal of Banking & Finance,
29(8–9), 2067–2093.
Patrick, H. T. (1966). Financial development and economic growth in underdeveloped countries.
Economic development and Cultural change, 14(2), 174–189.
Rezvanian, R., Rao, N., & Mehdian, S. M. (2008). Efficiency change, technological progress and
productivity growth of private, public and foreign banks in India: Evidence from the
post-liberalization era. Applied Financial Economics, 18(9), 701–713.
Sitorus, D., & Srinivas, P. S. (2004). The role of state owned banks in Indonesia. In Conference on
The Role of State-Owned Financial Institutions: Policy and Practice. Washington D.C.: The
World Bank.
Yaşa, A. (2008). Bankacılık sektöründe etkinlik ve veri zarflama analizi yöntemi ile ölçülmesi
[Ankara Üniversitesi İşletme Anabilim Dalı Yüksek Lisans Tezi], Ankara.
Banking Sector Number of Branches and Personnel Information

Note
https://www.tbb.org.tr/Content/Upload/Dokuman/7349/TBB_sube_personel_bilgi_notu_100316.
pdf. Accessed May 15, 2019.
https://www.tbb.org.tr/modules/banka-bilgileri/banka_sube_bilgileri.asp. Accessed May 15, 2019.
Research and Publications, The Bank Association of Turkey
https://www.tbb.org.tr/en/research-and-publications/research/17. Accessed May 15, 2019.
Turkish Statistical Institute
http://www.tuik.gov.tr/UstMenu.do?metod=istgosterge. Accessed May 15, 2019.
Başak Oktay Akın has completed her B.A. degree at Department of Banking and Insurance,
Keşan Yusuf Çapraz School of Applied Sciences, Trakya University in 2014 and M.A. degree at
Department of Banking, School of Applied Sciences, Trakya University in 2018. As the research
area, she has focused on banking, insurance, and financial analysis. Additionally, she has some
scientific papers and presentations in her research field. She has also some certificates on Capital
Markets Licensing Level-3, Recruitment Strategies in Banking, Customer Relationship
Management, FX Technical Analysis Training, and Marketing and Sales Management, and
working experiences on automotive finance, insurance, and direct sales.
Enver Erdinç Dinçsoy is an assistant professor at the Department of Banking, School of Applied
Sciences, Trakya University. He completed his undergraduate degree at Karadeniz Technical
University, Faculty of Economics and Administrative Sciences, Department of Business
Administration. He completed his master and doctoral degree in Graduate School of
Environmental Science and Technology, Okayama University, Japan. As the research area, he
has focused on development, banking and finance, spatial analysis, and environmental economics
and policies. In these areas, he has scientific articles published in various national and international
journals, books and book chapters, and conferences. He gives undergraduate and postgraduate
courses within the scope of his research subjects and proficiency. He has also been the Director of
College of Uzunköprü Applies Sciences since 2017.
Chapter 12
Cultural Profiles and Assertiveness
of Women in Bulgarian Business
Environment
Milen Baltov and Diana Sabotinova Mladenova
Abstract Professional women today face competing expectations. As profession-

als, many are expected to behave assertively and effectively in their relationships
with others in their organizations. Yet, perhaps unconsciously, our culture still
expects them to behave as the gentler, more supportive and more cooperative
gender. Each woman has a unique personality, and some might genuinely have
those gentler, more cooperative traits expected by our culture, while others might
not. It is important that women remain true to their nature while meeting both
cultural and organizational expectations.
Keywords Cultural profiles Assertiveness of women
12.1 Introduction
The impact of culture was explored substantially by Hofstede who identified a

number of key dimensions which could determine not only people‘s behaviour,
perceptions and values, but also the subsequent impact on organisational life and
the economy. Hofstede’s research identified four dimensions of culture that can be
used to compare cultures. Hofstede has also written articles about the implications
of cultural differences for management. You may wish to explore issues relating to
the HR function such as how recruitment and selection processes may be affected
by local cultures, the concept of promotion and reward and how individualism links
to organisational design. Objective recruitment may not recognise social networks
or indeed religious or sex differences.
Effective international HRM requires appropriate depth of understanding and
insight into how cultures tend to differ from country to country. This includes the
constituents of culture and the management of cultural differences and behaviours,
the impact of societal norms and values, attitudes towards work, career orientation
M. Baltov (&) D. S. Mladenova

Burgas Free University, Burgas, Bulgaria
e-mail: mbaltov@bfu.bg

208 M. Baltov and D. S. Mladenova
and the employment relationship and cultural differences in the regulation of the
employment contract.
As the sixth glass-ceiling index of the economist shows, disparity between
countries remains wide. But women have made some progress towards equality in
the workplace in the past year. The index ranks the best and worst countries for a
working woman. Each score is based on average performance in ten indicators:
educational attainment, labour market attachment, pay, childcare costs, maternity
and paternity rights, business school applications and representation in senior jobs
(in managerial positions on company boards and in Parliament).
Employment rates in the EU continue to improve in line with continued growth
and improved labour market conditions. The employment rate for people aged
20–64 reached the highest rate ever recorded—72.2% in 2017. Even if employment
rate for women also reached it all time high, gender inequality persists on the labour
market. With the employment rate for men at 77.9% as compared to 66.4% for
women in 2017, the gender employment gap stood at 11.5% points the same figure
for the last three years (Fig. 12.1).
At the same time, increasing the employment rate of women aged 30–54 and
55–64 is considered to be a solution for a number of Member States in reaching the
overall 75% employment rate target by 2020, as it seems to have the highest
potential impact on the overall national employment rate in those countries.1 Partly,
it could be explained by the extended age for retirement for the women, that is the
case in Bulgaria, and with the general all times boom in the employment in the
developed countries. Much of the employment is in the services sectors now, and
that’s an extra opportunity for lowering the barriers for employing women.
Equality-conscious Nordics typically do well while workplace parity for women
in Japan, South Korea and Turkey still lags badly. America under President Donald
Trump rose from 20th to 19th place thanks in part to a higher female labour force
participation rate. Sweden ranks first, scoring well in female labour force partici-
pation, which is over 80%, and the share of women in Parliament (44%). Women
broadly lifted their presence in the workplace. There has been an increase in the
share of women in the labour force, with a tertiary education and of those taking
business school entrance exams, which are a pipeline for senior executive jobs. Yet
advances may be slower than anticipated. MSCI, a financial data firm, has pushed
back its estimate by a year to 2028 for when the global share of women on boards
will hit 30% (the figure is now 17.3%). Countries at the bottom of our index show
signs of change in cultural attitudes. Last year, the Global Summit of Women, a
business and economic gathering of over 1300 leaders from 60-odd countries was
held in Japan for the first time. The #MeToo movement, a social media campaign
against sexual assault and harassment, arrived in South Korea with fervour.
1
9 Key messages to accompany the Annual Employment Performance Report and Employment
Performance Monitor, Doc. 12690/18, available at: https://www.consilium.europa.eu/register/en/
content/int?lang=EN&typ=ADV
12 Cultural Profiles and Assertiveness of Women in Bulgarian … 209
Fig. 12.1 EU-28 trends in employment rates, people aged 20–64, by gender [%]
Allegations of inappropriate behaviour against senior prosecutors, chaebol owners

and board members there have since come to light as more women are feeling
empowered.
12.2 Gender Equality in Bulgarian Business Environment
12.2.1 General Participation of Women in the Labour

Market in 2016
Female participation in the labour market is on the rise in Bulgaria. In 2016, the
employment rate of women (age 15–64) in Bulgaria was 60.0%. It increased by
3.7 pp between 2012 and 2016. However, women still do not participate in the
Bulgarian labour market to the same degree as men (66.7%). The difference
between the male and female employment rate was 6.7 pp in 2016.
Female unemployment in Bulgaria was 7% in 2016. The unemployment rate for
men (8.2%) was higher than for women. In addition to that, it is noteworthy that the
situation considerably improved for both genders since 2012: Unemployment rates
decreased by 3.9% for women and by 5.5% for men.
Overall, the general participation rate of Bulgarian women in the labour market
has decreased by 2.6 pp since 2012 and was at 64.6% in 2016.
12.2.2 Part-Time Segregation
Part-time employment plays a minor role in the Bulgarian labour market. No more
than 1.9% of Bulgaria’s employees worked part time in 2016. Also, there is no
significant gender gap between women and men when it comes to part-time
employment. It can be said that women tend to work full time or not at all. The
numbers underline the predominant model of full-time work.
Good care infrastructure considerably facilitates women’s engagement in paid
work. The 2017 Commission initiative on worklife balance underlines its impor-
tance for both children and other dependents. In May 2018, the Commission
adopted a report on the Barcelona objectives.2 The report shows that there has been
further improvement since 2013 on the share of children under mandatory school
age being in childcare, but that some countries continue to seriously lag behind. On
average, in the EU-28, the target of 33% has been reached for children under the
age of three and the target of 90% has nearly been reached for children from three
until mandatory school-going age (Fig. 12.2).
12.2.3 Qualification Level and Choice of Education
Secondary and tertiary education attainment of Bulgarian men and women rose in
the last decade. With regards to tertiary education, however, the data suggest that
Bulgarian men lag behind in the rapid growth of attainment rates in Europe. With
regard to women‘s fields of study in Bulgaria, the trend for typical female fields of
studies follows the European trend: Women in Bulgaria make up for the majority in
fields of studies, such as “Teaching, Training and education science” and
“Humanities and arts”. Nevertheless, the trend for typical male fields of studies
shows a different picture: Compared to the EU-28, higher share of women in
Bulgaria pursue typical male fields of study, such as “Science, maths and com-
puting” and “Engineering, manufacturing and construction”.
2
European Commission (2018), Barcelona objectives, Justice and Consumers, Publications Office
of the European Union, Luxembourg, available at: https://ec.europa.eu/info/sites/info/files/bcn_
objectives-report2018_web_en.pdf.
In 2002, the heads of state and government agreed on two targets for children under mandatory
school age being in childcare (these are the Barcelona objectives): 33% of children under age of 3,
and 90% of children between 3-years old and mandatory school age.
See: https://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/71025.pdf.
Fig. 12.2 Share of part-time to total employment by gender, 20–64, per Member State, 2017q3
12.2.4 Horizontal Segregation (Under and Over

Representation of Women in Occupations
and in Economic Sectors)
Horizontal segregation is less pronounced in Bulgaria than in the EU-28; 68.6% of

women and 65.0% of men are employed in their respective five most common
sectors. The largest numbers of women (21.8%) as well as men (19.7%) are
employed in manufacturing. “Wholesale and Retail” (20.3% of women and 15.8%
of men) is the second most popular sector for both genders. Beyond those two
sectors, the genders show a common trend: Women tend to work in the
service-based industries, while men tend to work in “construction”, “transportation
and storage” and “public administration”.
Explaining these numbers, one has to take the history of the country into
account: The focus on manufacturing is still related to a predominantly industrial
past, a relic of the economic integration with the USSR. The higher percentage of
women working in the service-based industry is reflecting the current economic
developments that come along with the integration into the EU.
The difference in the choice of occupations, however, displays stronger differ-
ences between women and men which are very much in line with the general EU-28
trend. Within the five most popular occupations, there is only one overlap: 10.0% of
women and 9.0% of men work as “personal service workers”. The rest of the labour
force working in the most popular occupations—sales workers, business and
administration professionals, cleaners and helpers, general and keyboard clerks for
women; drivers and mobile plant operators, metal, machinery and related trades
workers, building and related trade workers, labourers in mining and construction
for men—is strictly separated by gender. However, the Bulgarian labour market
seems to be equally diversified for both genders—48.9% of women and 46.7% of
men work in the top five occupations.
12.2.5 Gender Segregation in Occupations and in Economic

Sectors Index
This index reflects the proportion of the employed population that would need to
change occupation/sector in order to bring about an even distribution of men and
women across occupations or sectors. The index varies between 0 (no segregation)
and 50 (complete segregation). For the EU as a whole, the figures are still high:
24.3% for occupational segregation and 18.9% for sectoral segregation.
Gender segregation in occupations Gender segregation in sectors

2005 2010 2015 2005 2010 2015
27.8 28.9 28.6 19.2 21.1 21.9
Gender segregation Index of Bulgaria.3
12.2.6 Vertical Segregation (Under and Over

Representation of Women in Hierarchical Levels)
Vertical segregation is more pronounced in Bulgaria than in the EU-28. Only

15.3% of board positions in 2016 were held by women, which is 8.6 pp below the
EU-28 average of 23.9%. Additionally, instead of progress between 2013 and 2016
there is a decline by 1.4 pp in the proportion of women in boards of the largest
publicly listed companies.
Proportion of women in the house of Parliament also experienced a decline by
5.4 pp compared with 2013 and in 2016, women were only 19.2%. Significant
progress has been made in the proportion of women among senior ministers in
national government—from 16.7% in 2010 up to 38.9% in 2013 and reaching
47.4% in 2016, which is 19.5 pp above the EU-28 average of 27.9%.
Proportion of women in Proportion of women in the Proportion of women among

boards of the largest house of Parliament (%) senior ministers in national
publicly listed government (%)
companies (%)
2010 2013 2016 2010 2013 2016 2010 2013 2016
11.2% 16.7% 15.3% 22.1% 24.6% 19.2% 16.7% 38.9% 47.4%
Gender equality in decision-making in Bulgaria.4
3
2017 Report on equality between women and men in the EU, https://eeas.europa.eu/sites/eeas/
files/2017_report_equality_women_men_in_the_eu_en.pdf.
4
2017 Report on equality between women and men in the EU, https://eeas.europa.eu/sites/eeas/
files/2017_report_equality_women_men_in_the_eu_en.pdf.
According to International Labour Organization, Bulgaria ranks ninthth out of

88 countries for women’s percentage share of all managers in 2016. Female share of
employment in senior and middle management in Bulgaria is 39.3% of all man-
agers.5 And according to the Inter-Parliamentary Union’s Women National
Parliament World Classification, Bulgaria ranks 73rd out of 193 countries on the
number of women members of the National Assembly, elected in 2017—57 out of
240 members or 23.8% (Fig. 12.3).6
Considering the data in Fig. 11.2, we can enjoy increase of the share of women
on the boards of the largest publicly listed companies practically in all the EU
countries. In many of them, even it became regulated by law. In the countries in
CEE, like Bulgaria it is not and the growth is not substantial, but also the big
corporations listed in not high, with many of the big companies coming like out-
sourced businesses, managed by women, and not considered in this statistics.
12.2.7 Gender Pay Gap7
Progress in equality between women and men on the labour market is usually
gauged by means of aggregate indicators in three fields: in employment, in the
prevalence of atypical work such as part time and the pay gap. In 2016, Eurostat
updated data on the gender gap in earnings, which compiles inequalities resulting
from the gaps in pay, working hours and employment. This is therefore the most
comprehensive indicator of labour market inequalities between women and men. It
shows that the EU is still far from reaching gender equality on the labour market.
Even in the most equal countries, the overall gender gap in earnings stood at 20% or
so, while it reached 45% or even more in Germany, Greece, Malta, the Netherlands,
Austria and the UK.
The gap stood at 39.7% in 2014 in the EU, down from 41.2% in 2010.
Inequalities narrowed slightly at the beginning of the decade in most EU countries,
with the notable exception of Denmark, Estonia, Ireland, Latvia, Lithuania, Poland
and Slovenia. At this rate of change, it would take another century to close the
overall gender earnings gap.
5
International Labour Organization (2018), ILO database of labour statistics, Female share of
employment in senior and middle management.
6
2017 Inter-Parliamentary Union’s Women in National Parliaments Classification, International
labour Union, http://archive.ipu.org/wmn-e/classif.htm.
7
The Global Gender Gap Index was First introduced by the World Economic Forum in 2006
as a Framework for capturing the magnitude of Gender-based disparities and tracking their pro-
gress over time.
Fig. 12.3 Change in the proportion of women on the boards of the largest publicly listed
companies in the EU, October 2010–October 2018 (percentage points)
12.2.7.1 The Gender Pay Gap (%)
The gender pay gap is the difference between average gross hourly earnings of male
and female paid employees, expressed as a percentage of the former.
With 15.4% gender gap Bulgaria is 0.9 pp below the EU-28 average of 16.3 for
2015. Thus, the average female employee earns 15.4% less than the average male
employee.
2007 2008 2009 2010 2011 2012 2013 2014 2015

12.1 12.3 13.3 13.0 13.2 15.1 14.1 14.2 15.4
The gender pay gap (%) in Bulgaria.
12.2.7.2 Overall Gender Gap in Earnings (%)
The overall gender earnings gap is a composite indicator. It measures the combined
impact on the average earnings of all working-age women (whether or not
employed), as compared with men, of: average hourly earnings; average number of
paid work per month (before any adjustment for part-time work); and employment
rate.
The overall gender gap in earnings in Bulgaria for 2016 is 22.8% and is thus
considerably smaller (16.9 pp) than on EU-28 average of 39.7%.
2002 2006 2010 2014

28.2 24.5 23.5 22.8
Fig. 12.4 Gender gap by country, 2018
Overall gender gap in earnings (%) in Bulgaria.

According to the 2016 Report by World Economic Forum’s assessments of
workplace equality with the Global Gender Gap Index, Bulgaria ranks high in 18th
position among 144 countries with the index 0.7456.
According to the 2018 Report by World Economic Forum’s key findings
include:
• Globally, the average (population-weighted) distance completed to parity is at
68.0%, which is a marginal improvement over last year. In other words, to date
there is still a 32.0% average gender gap that remains to be closed. The
directionally positive average trend registered this year is supported by
improvements in 89 of the 144 countries covered both this year and last year.
(The Global Gender Gap Report 2018) (Fig. 12.4).
12.2.8 Women’s Share of Unpaid Work: More Hours, More

Intensive and More Regular
According to the data on the gender gap, the performance in Bulgaria is quite in the
“short” distance of this gap, well headed by the Northern countries in Europe, and
practically the best performing in South Europe and in Central and Eastern Europe
with only Slovenia ahead in this region. At the same time, the result shows that
countries from Central America and Africa might be in this “short” version of the
gap too.
Progress towards economic independence is usually gauged by the employment
rate, but also by the number of paid working hours, which better reflects work
intensity. Men spent 39 h of paid work per week on average in the EU, whereas
women spend 33 h in paid work. In contrast, they do the lion’s share of housework
and care: Working women spend 22 h per week in unpaid work, while working
men spend fewer than 10 h. However, there are marked differences between
countries. The division of housework and care between women and men is more
equal in the Nordic countries, although parity has not yet been reached even there.
It is not only the important matter of the number of hours men and women spend
in paid and unpaid work that differs greatly, the type of tasks they do is very
different too. Women tend to perform more routine, labour-intensive and rigidly
scheduled tasks, in rapid alternation or even simultaneously. This is notably the
case when they enter motherhood, but also if they care for elderly or disabled
relatives. In the latter case, they tend to be more involved if care becomes more
intensive and regular: Among 18–64 year olds, 20% of women and 18% of men
were informal caregivers, of which 7% of women provided care on a daily basis
compared to 4% of men.
Paid and unpaid working hours, per sex, with countries ranked by the size of the
gap in unpaid working hours, rank Bulgaria on 22nd place in the EU-28. Women’s
unpaid work is 21 h per week, while men’s unpaid work is 7 h per week, hours
worked in main and second job—40 for women and 41 for men, with commuting
time hours per week 3 and 2, respectively (Eurofond 2015).
12.3 Gender Egalitarianism in Bulgaria (GLOBE

Project)8
Gender Egalitarianism is the extent to which an organization or society minimizes

gender -role differences, and its components include attitudinal domain with gender
stereotypes and gender-role ideology and behavioural manifestation with gender
discrimination and gender equality.
On behaviour-tied Gender Egalitarianism measures (practices, “as is”)
Bulgarian managers scores high (4.42) far exceeding the average score for 62
societies (3.40). When positioned on the GLOBE rankings on Gender
Egalitarianism, Bulgaria was on the top of the comparative list, displaying higher
scores than the most egalitarian countries Hungary, Russia or Poland. However, the
8
The Study is based on the Survey of Bulgarian managers (2014–2015)as per the GLOBE
Methodology and on culture distance (friction) measures for Bulgaria relative to 62 countries/
societal cultures.
perceptual index was different and higher among women managers (4.51) than
among male managers (4.28).
On values-tied Gender Egalitarianism measures (values, “should be”) the
Bulgarian score was moderate (4.74) when compared to the average for 62 societies
(4.74), and when compared to the GLOBE rankings, Bulgaria scored on par with
Bolivia (22th), Mexico (23th) and Kazakhstan (24th). The gap in responses
between women and men was more visible (5.01 vs. 4.27) (Bobina and Sabotinova
2015).
Overall, the data on the perception of gender roles in Bulgarian business man-
agement revealed with the GLOBE research methodology reveals strong results on
Gender Egalitarianism and suggests that this phenomenon serves as the important
factor in business practices and in the economy at large. The study confirms the
advancements in the equality of the roles of women and men and is consistent with
the results of the other estimates by the international statistical authorities. It dis-
plays Bulgaria among the leading countries in terms of perception of the practices,
and among the top 50% of 62 societies who participated in the GLOBE research.
12.4 Assertiveness
Assertiveness has been the study of psychologists and communication scholars for
decades. In the field of communication, assertiveness falls within the study of
interpersonal communication and has been defined in interpersonal communication
as the kind of communication that happens when the people involved in talk and
listen in ways that maximize the presence of the personal. Assertiveness is seen by
other scholars as being a “skilful” form of interpersonal communication in which
participants are open to one another about their own feelings and perspectives and
respect those of the other.
Today, in the early years of the twenty-first century, the development of a culture
of assertiveness is especially important in light of the rampant sense of division and
violence in the Western culture. A culture composed largely of assertive people
would be an antidote to this often violent polarization because of the emphasis in
assertiveness on respect and equality for all people involved. It would especially
benefit our society to promote the practice of assertiveness among women, who are
still in many cases brought up to be supportive and polite rather than forthright and
assertive.
Assertiveness can be an effective interpersonal communication attitude meant to
promote equality in person to person relationship and to exercise personal rights
without denying the rights of others: a more optional communicative behaviour for
maintaining positive human relationships and resolving conflicts than is aggression
because it promotes harmony, ensures that all needs are met, and decreases the
sense of resentment that can build up when those needs are not met.
If assertiveness can bring so many benefits to our society, one might wonder
why it has taken so long for its practice to be universal—and why, in particular,
professional women have such a difficult time expressing it. There are a lot of
challenges that professional women have traditionally experienced—and continue
to experience—in their efforts to be assertive in the workplace: Women are always
already at a disadvantage because workplaces have many unspoken rules of
behaviour, rules and communication norms that are fundamentally premised on
masculine ways of communicating and interacting in the world. As a result, women
are at a disadvantage because their communication strategies and expectations,
speech community and interaction styles are distinctly different from masculine
communication strategies and expectations (Kelly 2015).
Much of communication and leadership literature has focused on assertiveness in
professional women in particular because the directness and initiative, most often
associated with assertiveness, are often seen as counter to the social expectations
that women should be helpful, affectionate and nurturing. Because of the expec-
tations placed on them as both professional and female, women have often had to
choose when to be more assertive and when to use the softer traits, more often
associated with women.
Among other issues, the women have also experienced this need to decide when
to behave assertively—and when to conform to social expectations. What factors
drive these women to dare to act assertively—against the norms set out for them as
females? And how do these women become transformed by the very practice of
assertiveness when conforming to the expectations of others can be so much easier
and safer?
It would be vital for readers to understand the difference between assertiveness
and aggression. Alberti and Emmons (2012) describe aggression as a set of
behaviours in which the aggressor speaks his or her own mind in a way that hurts
the other person, and as one who controls others, makes choices for them and is
“self-enhancing at the expense of the other”. In contrast, they describe an assertive
person as one who does, indeed, voice his or her own opinion and possibly achieves
goals, but always with respect for the other person—allowing the other his or her
dignity. Women often identified aggression as a communication style and set of
behaviours that try to grasp power over the other person, and assertiveness as a way
to work with others to achieve a common goal.
In exploring how professional women value and practice assertiveness, the
assumption is that assertiveness is not a fixed communication pattern practised
uniformly by all people, but rather a continuum of traits and practices. These traits
and values range from respect for the rights of others, helping others to “save face”
and helping others to achieve their goals to standing up for one’s own rights and
expressing one’s emotions and opinions. These assertive traits range from concern
for the other to concern for oneself and for one’s organization. The traits of
assertiveness that are most valued by the women—and how these values relate to
the organization in which she works and to that organization’s core values.
12.5 Assertiveness in Bulgaria (GLOBE Project)9
Assertiveness is defined as the degree to which individuals in organizations and

society are assertive, confrontational and aggressive in social relationships. Being
an important aspect of social culture, this dimension has received relatively less
attention in literature.
Bulgarian score on assertiveness was lower than average GLOBE score on
practices (3.67 vs. 4.14) but higher on values (4.40 vs. 3.38); and “should be” score
was higher than “as is” responses. Bulgarian assertiveness scores do not visibly
deviate from the average GLOBE scores thus, explaining avoidance on con-
frontational, aggressive behaviours in an environment known for collective actions
with obedient behaviours and conformist mentality. The lower levels of
assertiveness in the society may also be interpreted as a result of strong family
bonds, nepotism, friendliness and kindness which are deeply rooted in traditions
(Bobina and Sabotinova 2017).
12.5.1 Assertiveness Training for Women
12.5.1.1 The Principles of Assertiveness
• Distinguishing between passive, assertive and aggressive behaviours

• Discussing how Bulgaria’s social context affects your behaviour in the business
environment
• Identifying your individual work scenarios and obstacles that challenge your
assertive behaviour.
12.5.1.2 Assessing Your Assertiveness
• Identifying your own assertiveness style preferences

• Objectively assessing and identifying strengths and weaknesses of your
assertiveness style
• Understanding how your personal value systems impact your assertiveness
• Identifying ways to reduce any conflict between the values you hold and the
principles of assertiveness.
9
The Study is based on the Survey of Bulgarian managers (2014–2015) per the GLOBE
Methodology and on culture distance (friction) measures for Bulgaria relative to 62 countries/
societal cultures.
12.5.1.3 Getting to Know and Like Yourself
• Understanding how assertiveness can support your self-esteem

• Looking at how well you know yourself
• Using confidence and assertiveness techniques to initiate internal dialogue and
stop negative self-talk.
12.5.1.4 Assertive Body Language
• Its ok to look someone into the eye

• The danger of large arm and hand gestures—what they say about you
• Avoiding the “girlie” gestures that immediately devalue your message
• Owning your space—and avoiding our natural instinct to “shrink”.
12.5.1.5 Assertive Communications Skills
• Understanding the different elements of communication and the factors that

influence their impact
• It’s not just what you say, but how you say it that conveys a confident message
• Discovering the differences between the verbal and nonverbal communication
styles of men and women
• Applying active and reflective listening skills to build your assertive skills
• Listening objectively and responding assertively to feedback and criticism.
12.5.1.6 Assertiveness Techniques and Practices
• Discovering assertive language and practicing this in a safe environment

• Exploring four special assertiveness techniques: broken record, fogging, nega-
tive assertion and negative inquiry
• Saying “no” and surviving
• Responding assertively to common put-down statements—in a way that doesn’t
permanently damage the relationship.
12.5.1.7 Leading a Balanced Life
• Practical techniques to help you deal constructively with anger

• Limiting and coping better with stress
• Assessing your personal level of work and life balance—and making sure you
have the balance right
• Discussing the value of women support networks and resources
• Planning for your continuing assertiveness growth.
12.6 Conclusion
Before discussing recent development on cultural profiles and assertiveness of

women in Bulgarian business environment, we need to check latest economic
gender profile of Bulgaria announced by World Economic Forum (Fig. 12.5).10
According to the Global Gender Gap Index Data above, we keep the track of the
tradition in which the education and health are the sectors where the gap is almost
invisible. In some countries, like Bulgaria in the education, the women even
dominate. On the trends, deviation continues with the indicators of women as head
of state (still we don’t have one in Bulgaria, and one was a prime minister his-
torically). Still a matter of worry is the deviations towards the indicators related to
the wage equality and the estimated earned income.
Considering the Global Gender Gap Index Data in comparative to the other
countries mode, than definitely it a matter of proud for Bulgaria to show its ranking
the top for the women involvement as professional and technical workers. It ranks
first also, if the women in ministerial positions have to be considered, the enrolment
in tertiary education and on the status of healthy life expectancy. The highly pos-
itive outcomes from those indexes are the potential of the influence coming from
women both in top policy and in educational positions.
Considering the negative extremes in the ranking, we may almost eliminate the
lowest ranking (121-th place) for Bulgaria in enrolment in secondary education, as
the distance to parity is almost zero, and even it might prove positive for the gender
balance. There is an indicator that is practically uncontrollable—the sex ration at
birth (114-th place)—it is related by the natural process of birth, and also the data
on female and male is missing there, as this data is missing on the indicator for the
wage equality for similar work (116-th place), where the missing data by sex may
mean that the survey was not performed with a significant sample.
Professional women today face competing expectations. As professionals, many
are expected to behave assertively and effectively in their relationships with others
10
http://www3.weforum.org/docs/WEF_GGGR_2018.pdf.
Fig. 12.5 Exploring the global gender gap index data
in their organizations. Yet, perhaps unconsciously, our culture still expects them to
behave as the gentler, more supportive and more cooperative gender. Each woman
has a unique personality, and some might genuinely have those gentler, more
cooperative traits expected by our culture, while others might not. It is important
that women remain true to their nature while meeting both cultural and organiza-
tional expectations.
Studies through the years have been consistent in showing that women’s com-
munication style is expected to be more polite, agreeable, compliant, cooperative
and other directed than that of men. The conflict that professional women face
between meeting social expectations of women and acting assertively and effec-
tively in their organizations, as well as the tendency of professional women to
choose when to be assertive and when to serve in a more traditional female sup-
portive role, has been confirmed. Women have identified aspects of assertiveness
that they find most effective and most favourable to the way they view their roles
and their own philosophies. They have emphasized such values as respect for
others; advocacy for their own values and for the needs of others; teamwork;
inclusion; honesty and integrity and effective, respectful communication.
Women have found themselves empowered and transformed—able to go beyond
the limits set for women by society and—perhaps more importantly—set by
themselves. In taking these bold and uncomfortable steps, they have discovered
their own inner strength and a flexibility that allows them to operate at an optimum
level in their professions: Playing the supportive role of listener and affirmer when
needed but, in other cases, asserting themselves and going beyond social expec-
tations when the situation calls for a bolder word or action. They—and so many
other women and men who may not have voiced their own acts of courage in
assertiveness—can help pave the way for a culture that celebrates true assertiveness
in all people as a way to maintain positive human relationships and resolve con-
flicts. In a world fraught with terrorism, greed, violence and hatred, this interper-
sonal development of true, respectful assertiveness offers a shining ray of hope.
References
Alberti, R., & Emmons, M. (2012). Your perfect right (9th ed.). Atascadero, CA: Impact
Publishers.
Baltov, M., & Baltova, S. (2014). Improving Managerial Capabilities of Expatriates in Bulgaria,
“Research Papers of IBS”, Botevgrad, Vol. 5, 2012–2013.
Bobina, M., & Sabotinova, D. (2017). Bulgarian management in a cross-cultural space. Journal of
East European Management Studies, 22(1), 105–127.
Bobina, M., & Sabotinova, D. (2015). The role of women in Bulgarian business: Cultural
perceptions. // Бизнec пocoки, БCУ, Бypгac, бp. 2, c. 106–109. Accessed March 15, 2017.
Eurofound. (2015). European working condition survey. https://www.eurofound.europa.eu/
surveys/european-working-conditions-surveys/sixth-european-working-conditions-survey-
2015. Accessed June 5, 2018.
Global Gender Gap Report. World Economic Forum. http://www3.weforum.org/docs/WEF_
GGGR_2018.pdf. Accessed May 25, 2019.
International Labor Organization. (2018). ILO database of labour statistics, Female share of
employment in senior and middle management.
Inter-Parliamentary Union’s Women in National Parliaments Classification. http://archive.ipu.org/
wmn-e/classif.htm. Accessed May 5, 2019.
Kelly, B. (2015). Assertiveness in professional women. A Thesis. Gonzaga University. http://

web02.gonzaga.edu/comltheses/proquestftp/Kelley_gonzaga_0736M_10506.pdf. Accessed
July 10, 2018.
Report on equality between women and men in the EU. https://ec.europa.eu/info/sites/info/files/
aid_development_cooperation_fundamental_rights/annual_report_ge_2019_en.pdf. Accessed
on May 5, 2019.
Professor Milen Baltov Ph.D. is himself an example of the transition from a business consultant
to the small and medium-sized enterprises (SMEs) and start-ups to an academic and Researcher in
the field. He is High Profile Expert in evaluation and monitoring of support schemes in variety of
technical assistance projects to the business, industry and infrastructure programmes. A Graduate
(1994) of the University of National and World Economy in Sofia, Bulgaria, he was the first in
CEE to draft and defend a Ph.D. dissertation (2000) on the topic of “Management Consulting for
SMEs”. For two decades, he was an expert and Team Leader in a capacity building and business
promotion projects in almost all the current CEE countries, with best impressions from his
missions in Macedonia, Croatia and Serbia. For the moment, Prof. Baltov is a Vice-Rector of the
Burgas Free University and a Programme Committee member for the “Innovations in SMEs and
Access to Risk Finance” filed of the EU Framework Programme for Scientific Research and
Innovations “Horizon 2020”. He is a member of the Black Sea Innovations and Research Agenda
working group member—initiative run by the “Maritime Research” unit at DG RTD of the EU
Commission. He is head of the Ph.D. programme in “Economics and Management in Industry”
and academic adviser of four Bulgarian, 2 Nepali, 1 Indian and 1 Pakistani Ph.D. students in
business issues. He is a member of the working group for financial engineering in the R&D
projects and Evaluator of the EU COST Programme project applications.
Diana Sabotinova Mladenova has graduated from English Language School—Burgas at 1987.
Her master degree is from University of National and World Economy—Sofia on Social-economic
planning at 1991. She had Ph.D. degree from Economic Institute of the Bulgarian Academy of
Science—Sofia, Section “Macroeconomics”. Her Ph.D. thesis title is “Macroeconomic
Consequences of Population Ageing”. She is working at Burgas Free University—Burgas since
2000.
Chapter 13
Investing in Women’s
Entrepreneurship: Inclusive
and Sustainable Economic Growth
Arzu Özyol
Abstract An important part of capitalizing on human potential lies in fostering

entrepreneurship, which is essential to economic growth and employment creation.
A Global Entrepreneurship Monitor study of 18 economies from 2002 to 2010
suggests that women’s entrepreneurial activity is lower than that of their male
counterparts at different stages of development. Although, women’s entrepreneur-
ship is large, diverse, and of great economic significance to achieve sustainable
development, women-owned businesses comprise between one-quarter and/or
one-third of businesses worldwide. It is almost certainly understated because
available data do not always distinguish by gender, and women are more likely to
run businesses in the informal economy where data are hard or impossible to
capture. Societal attitudes and norms inhibit some women from even considering
starting a business, while systemic barriers mean that many women entrepreneurs
stay confined to very small businesses often operating in the informal economy.
Exclusion of land rights and other gender-specific patterns of the property make it
difficult for women to acquire physical assets for chain activities. Further, gender
differences in literacy and education reduce their ability to communicate with
buyers and suppliers and thus limit their bargaining power. Women experience
greater constraints on their economic actions relative to men. This means that
women tend to different needs than men regarding entrepreneurship due to the
different roles and responsibilities of women which are assigned by society.
However, governmental policies and programs must address the various constraints
acting on the abilities of women to succeed. International networks are very
important concerning capacity and business development of women entrepreneurs
through the development of gender-sensitive public policies, supply chain, and
marketing practices besides the promotion of women’s entrepreneurship. Through
networks, the information should be attractive to women and should advertise
programs matching the assistance they need. Otherwise, it could be harder to recruit
women into entrepreneurship in cases when women do not believe they are able
to take on the challenge. The purpose of this paper is to examine women’s en-
A. Özyol (&)
Ankara University, Ankara, Turkey
e-mail: arzuozyol@gmail.com

226 A. Özyol
trepreneurship support programs which are critical to strengthen the weakest links
in the chain and assure inclusive upgrading of quality and growths. This paper also
addresses how women’s entrepreneurship can be supported through international
networks.
Keywords Women Entrepreneurship Sustainable economic growth
13.1 Entrepreneurship and Sustainable Development
In developed countries, the economy, which is characterized by reliance on big

business and mass production, has given way to a so-called entrepreneurial econ-
omy. Here, knowledge-driven goods and services are now more flexibly provided
by smaller firms. Thus, the emergence of a creative class requires a less interfering
but more facilitating state. In the emerging countries, most notably the BRICs—
Brazil, Russia, India, China—impressive growth has been driven by a veritable
entrepreneurial revolution. The need in these economies to sustain growth through
sustainable access to resources, knowledge, markets, and low-carbon industrial-
ization puts a premium on innovative entrepreneurship. Finally, in the least
developed countries, where aid dependency is high, donors have been shifting the
emphasis in development cooperation toward private sector development.
Entrepreneurial firms make two indispensable contributions to the market
economies. First, they are an integral part of the renewal process that pervades and
defines market economies. Entrepreneurial firms play a crucial role in the inno-
vations that lead to technological change and productivity growth. In short, they are
about change and competition because they change market structure. They are
about prospects for the future, not about the inheritance of the past. Second,
entrepreneurial firms are the essential mechanism by which millions enter the
economic mainstream. Entrepreneurial firms enable millions of people, including
women, minorities, and immigrants, to access the pursuit of economic success
(Kuratko and Hodgets 2004; Gill and Ganesh 2007).
The entrepreneurial process is a major factor in economic development, and the
entrepreneur is the key to economic growth. All countries consider entrepreneurial
promotion as a crucial policy for sustained employment creation, as well as inno-
vation in products, production processes, and organizations (OECD Council Report
2012). However, entrepreneurship emerged as an increasingly attractive form of
income generation for both men and women, small enterprises became a source of
employment creation and growth. According to the International Labour
Organization (ILO), more than 204 million people are unemployed as of 2015.
However, 470 million jobs are needed globally for new entrants to the labor market
between 2016 and 2030 (ILO 2018). These unfavorable future prospects have been
adding to the weight of entrepreneurship globally, and it has taken a place in
Sustainable Development Agenda which includes 17 goals and 169 targets which
had designed in order to end poverty, protect the planet, and ensure prosperity for
13 Investing in Women’s Entrepreneurship: Inclusive … 227
all. Sustainable Development Goal 8 has been designed to promote sustained,

inclusive and sustainable economic growth, full, and productive employment and
decent work for all by 8 targets. Target 8.3 directly aims to support productive
activities, decent job creation, entrepreneurship, creativity and innovation, and
encourage the formalization and growth of micro-, small-, and medium-sized
enterprises, including through access to financial services. Promoting inclusive and
sustainable economic growth, employment and decent work for all is the key issue
for sustainable development agenda because poverty eradication is only possible
through stable and well-paid jobs (UN 2018).
13.2 Gender Equality and Sustainable Development
The feminist movement in the USA is often described as taking place in three
waves. The ideals of feminism existed before the First Wave, but were organized
into an identifiable movement in the mid-1800s. African-American women were
fighting for women’s rights within the abolitionist movement prior to the First
Wave. And first nation American women embodied many of the ideals of the
feminist movement long before this time. The Women’s Rights Movement in the
USA began in the 1840s with suffragettes fighting for equality for women,
including the right to vote. After winning the right to vote, the movement took on
other challenges, such as access to birth control and the establishment of the
Women’s Bureau of Labor, which championed employment opportunities, and
lobbied for safety from workplace abuse and unsafe conditions. After World War II,
the return of soldiers to civilian life ushered the new era of the feminism. The
women, who took place in economic life to meet their daily requirements, returned
back home to gain the ground for men. It was the major reason to open discussions
on women in economy and patriarchal system.
The Second Wave of the feminist movement began in the 1960s and ended
approximately in the 1990s. As in the First Wave, feminism was intertwined with
the greater civil rights movement in the USA at the time. During this wave, women
identified their fight as being against patriarchy, the predominant social structure
where families and society are controlled by men and where rights, name, wealth,
and privilege are passed down through fathers, preventing equal opportunities for
women. Feminists in the 1970s and 1980s worked on increasing women’s legal and
workplace rights, such as fighting for legislation to protect women from workplace
sexual harassment. In the 1990s, there was a rise in theoretical orientations to define
the duality between gender and sexuality.
Feminists in the Third Wave consisted of women who had been raised with the
rights earlier generations of feminists had fought to achieve, such as the right to
vote, own property, and have credit cards and bank accounts. Much of the work of
the feminist movement has been to fight for equality in political, professional, and
domestic spheres. In the last two decades, the feminist movement has focusing on
creating gender equality in the workplace. Today, contribution of women to the
228 A. Özyol
labor market is not the issue of women activists entirely; it is the major compo-
nent of sustainable development as well (Kinser 2004; Byers and Crocker 2012;
Lorber 2010).
In many international human rights, instruments included “Convention on the
Elimination of All Forms of Discrimination Against Women,” gender equality is
accepted as an inalienable and integral part of human rights and fundamental
freedoms, and it is essential for to achieve sustainable development, peace, and
security as well. It is also important to emphasize that the concept of gender is not
only relating to women. Gender refers to both women and men and relations
between them. Since Beijing Conference in 1995, gender equity was used as a
terminology to provide a balance between women and men. gender equity denotes
an element of interpretation of social justice, usually based on tradition, custom,
religion, or culture. However, advancement of women is unacceptable by the term
of gender equity. During the Beijing Conference, it was agreed that the term
equality would be utilized. gender equality means that the rights, responsibilities,
and opportunities of individuals will not depend on whether they are born male or
female. Equality does not mean “the same as.” In other words, promotion of gender
equality does not mean that women and men will become the same. Equality
involves ensuring that the perceptions, interests, needs, roles, responsibilities, and
priorities of women and men will be given equal weight in planning and decision-
making. Women also have a critical role to play in all of the SDGs, with many
targets specifically recognizing women’s equality and empowerment as both the
objective and as part of the solution. Goal 5 is known as the stand-alone gender goal
because it is dedicated to achieving these ends (Ozyol and Çobanoglu 2016).
13.2.1 Gender Role Ideology and Entrepreneurship
Recently, researchers have moved beyond simple differences between men and women.
They focus on other aspects of gender, such as gender role ideology and duality, to
better understand how multiple factors may shape outcomes related to entrepreneur-
ship. For example, stereotypical male characteristics such as aggressiveness, autonomy,
and courage are correlated with higher entrepreneurial intentions. In other words, both
genders identified entrepreneurs as having characteristics stereotypically associated
with men. A study across 17 countries found women tended to perceive themselves and
the entrepreneurial environment less favorably than men regardless of their motivation
to become an entrepreneur. Research has found that the degree to which a person
associates with traditional gender stereotypes mediates their satisfaction in their busi-
ness. Additionally, those of either gender who possess more stereotypically masculine
traits are more likely to find satisfaction through financial success, attaining status, and
higher growth of their business, while feminine characteristics are more likely to
seek work satisfaction through relationships and contribution. Moreover, individuals
with more feminine characteristics may not be high-growth-oriented entrepreneurs
(Gupta et al. 2009; Schoon and Duckworth 2012).
Small business performance have elucidated the key role that entrepreneurial
traits. One of such entrepreneurial trait that has received enormous interest in recent
years is entrepreneurial self-efficacy (ESE). ESE refers to an individual’s beliefs
regarding their capability in discovering and exploiting opportunities in the process
of starting and growing a business (Klyver and Thornton 2010). ESE is vital to the
performance of small businesses because the decisions and actions of a small
business owner directly influence the direction of the firm and consequently its
overall performance (Baum and Locke 2004; Markman, Baron and Balkin 2005).
Studies have found that entrepreneurial self-efficacy (ESE) was equal between
genders. When accounting for gender role ideology, ESE was higher for men than
women. Therefore, gender itself was not found to impact self-efficacy, but gender
role orientation was (Mueller and Conway Dato-on 2013; Carr and Sequeira 2007).
13.2.2 Gender-Sensitive Public Policies: Gender

Mainstreaming
The strategy of mainstreaming is defined in the ECOSOC Agreed Conclusions,

1997/22, as
….the process of assessing the implications for women and men of any planned action,
including legislation, policies or programs, in all areas and at all levels. It is a strategy for
making women’s as well as men’s concerns and experiences an integral dimension of the
design, implementation, monitoring and evaluation of policies and programs in all political,
economic and social spheres so that women and men benefit equally and inequality is not
perpetuated. The ultimate goal is to achieve gender equality.
Gender mainstreaming in policy analysis and development is implemented to

determine the impacts of policies on women and men and explore how this impacts
could vary regarding gender differences and inequalities. It should also enable
decision-makers for cutting the gender gap down. In the first step, gender per-
spectives should be reflected in the formulation of the policy. The accurate for-
mulation is important in the means of fixing of the proper scope of constructive
process. Secondly, gender-disaggregated data are obtained to analyze the gender
differences and inequalities in the framework of the scope. The third important
point is the assessment of the implications of different options that could have
different costs, benefits, and consequences for women and men. Fourth, gender
perspectives should also be taken into account in the determination of relevant
stakeholders and different options to define different needs, expectations, and in-
formation. However, the involvement of civil society and public bodies is extre-
mely important to seek meaningful inputs from both women and men (Ozyol and
Çobanoglu 2016).
The Professor of Stanford University, Gita Sen, has emphasized the importance
of gender issues for development policy as “A gender perspective means that
women stand at the crossroads between production and reproduction, between
230 A. Özyol
economic activity and the care of human beings, and therefore between economic
growth and human development. They are workers in both spheres-those most
responsible and therefore with most at stake, those who suffer most when two
spheres meet at cross-purposes, and those most sensitive to the need for better
integration between the two.” Although there were some changes in development
policies have been observed from 1970s to 2000s, it is easily said that Millennium
Development Goals (MDGs) are the milestones in the means of gender needs to be
understood clearly as a cross-cutting sociocultural variable. The Millennium
Declaration laid out a number of key development goals framed to reflect its
fundamental values. Along with the reduction of poverty and hunger, these inclu-
ded commitments to the promotion of human development and environmental
sustainability. Additionally, they included an explicit commitment to gender
equality as: No individual and no nation must be denied the opportunity to benefit
from development. The equality for the rights and opportunities of men and women
must be assured (Kabeer and Subrahmanian 1996; Hammer et al. 2004).
There are two approaches that should be used to apply gender mainstreaming
into the public policies:
– Women in Development Approach (WiD)
In the framework of Women in Development Approach, women are considered
as a distinct and vulnerable group in projects and programs. Where women’s
knowledge has been utilized in areas related to family or community health (en-
suring medical plans and food security) and environmental conservation (the pro-
tection of forest products). This approach ignores the required strategies needed to
pursue the various objectives involved in the use and management of environmental
resources that will require the contributions of women and men alike. This approach
first came to prominence in the early 1970s. Research and information collected
throughout the UN Decade for Women (1975–85) highlighted the existing poverty
and disadvantage of women and their invisibility in the development process.
Different policy responses and interventions focused on women as a separate group
resulting in women’s concerns being “added on” and peripheral to mainstream
development efforts. WiD policies have proposed actions targeted only to women
rather than integrating them fully into the project activities. WiD policies and
interventions have concentrated on women’s productive work. The failure to make
an explicit link to women’s reproductive work has often added to women’s
workload. Gradually, it was recognized that an approach that focused on women in
isolation, was inadequate and not sustainable. Because it did not take into account
the overall project objectives or integrate women fully into their implementation.
Moreover, it did not address or change unequal gender relations in various social
and economic settings. However, there are shortcomings to this approach because
by WID, women are not available in the use and management all kind of resources.
Many policy makers tend to follow WiD approach to development discourses and
programs. Although the WiD approach may be successful when implementing
projects on a small scale, to ensure sustainable results, it is better to utilize Gender

and Development Approach (Moser 1993).
– Gender and Development Approach (GaD)
The Gender and Development (GaD or GiD) perspective emerged in the late
1980s as response to the failure of WiD projects. Aims of GaD are to provide
qualitative and long-lasting changes in women’s social status. The Gender and
Development (GaD) focuses on social, economic, political, and cultural forces that
determine how men and women participate in, benefit from, and control over
project resources and activities differently. There are many results which have
obtained from field studies are also shown that gender equality is the fundamental
issue regarding economic efficiency. For instance, the same opportunities regarding
required agricultural raw materials and vehicles are given to the women farmers in
Kenya as men farmers, the amount of agricultural products could increase by more
than 20%. This approach shifts the focus from women as a group to the socially
determined relations between women and men. GaD refers the term of “gender”
instead of “women.” However, several key analytical principles, relating to gender
roles and practical and strategic gender needs, as well as to control over resources
and decision-making in the household, civil society, and the state, were determined
and translated into tools and techniques for a gender-planning process at the policy,
program, and project levels (Buvinic et al. 1996).
The following table indicates the major differences of Women in Development
(WiD) and Gender and Development (GaD) approaches (Table 13.1).
Table 13.1 Differences of Women in Development (WiD) and Gender and Development (GaD)
Description Women in development Gender and development
Approach An approach that views women as the An approach to development
problem
Focus – Women – Relations between men and women
problem – The exclusion of women (half of the – Unequal relations of power (rich and
productive resources) from the poor, women and men) that prevent
development process equitable development and
participation
Goal More efficient, effective development Equitable, sustainable development
with both women and men as decision-
makers
Solution Integrate women into the development Empower the disadvantaged women;
process transform unequal relations
Strategies – Women’s projects – Identify/address practical needs
– Women’s components determined by women and men to
– Integrated projects improve their condition
– Increase women’s productivity – Address women’s strategic interests
– Increase women’s income – Address strategic interests of the poor
– Increase women’s ability to look through people-centered development
after the households
Source Dayal et al. (1993)
232 A. Özyol
The fields of Women in Development (WiD) and Gender and Development

(GaD) grew through the 1980s and 1990s, respectively, and within these fields were
those focusing on women and microenterprise development. They noted women’s
important presence within the micro- and small-scale enterprise (MSE) sector in
developing countries, the presence also found in small-scale enterprises in devel-
oped countries though to a lesser extent. They also worked to make visible the
barriers limiting women’s contributions to the MSE sector. In response to women’s
important roles within the microenterprise sector and the constraints limiting these
roles, programs were developed to facilitate women’s participation in the economic
arena (Miller and Razavi 1995).
13.3 Women and Entrepreneurship
The literature on mainstream entrepreneurship primarily focusing on the male

entrepreneur emerged in the 1930s. Initial research on entrepreneurship assumed
that male and female entrepreneurs were generally the same and there was no
specific need for a separate investigation. In 1976, Schwartz published the first
academic paper on female entrepreneurship in the Journal of Contemporary
Business and the first policy report in this area titled “The bottom line: Unequal
enterprise in America.” The first academic book on female entrepreneurs was
published in 1985 by Goffee and Scase.
Women entrepreneurship did not develop as a significant area until the late
1990s to early 2000s. The first conference on women entrepreneurs in small- and
medium-sized enterprises was held in 1998. The first international academic con-
ference was held in 2003. It was not until 2009 that a niche journal titled the
International Journal of Gender and Entrepreneurship was launched (Hughes et al
2012; Jennings and Brush 2013). Global Entrepreneurship Monitor (GEM) also
published the first special report on women and entrepreneurship in 2006 (Global
Entrepreneurship Report 2018).
Research on entrepreneurship indicated that becoming an entrepreneur is
impacted by the socioeconomic status of their families for women. The authors of
the study theorized was due to structural disadvantages in society that made it more
difficult for women to secure start-up capital than men and necessitated family
monetary assistance. For men, becoming an entrepreneur was predicted by having a
self-employed father. People who own self-employed parents, found genetics and
parenting practices during childhood, had strong effects on a person’s propensity
toward entrepreneurship, and reinforcement of work values (Aldrich and Kim 2007;
Chang et al. 2009).
The impact of entrepreneurship on family dynamics may be different for men
and women, based on the role they fulfill in the family. Due to women often
occupying the role of primary caregiver in the family, they may be more likely to
struggle with balancing work and family responsibilities and may face greater
conflict between work and family roles than male entrepreneurs. According to
Hochschild and Machung, men have not tended to take on a proportionate share of
caregiving and domestic duties, leaving women working outside the home during
the day and handling domestic responsibilities on evenings and weekends, dubbed
the “second shift.” Disproportionate burden on the shoulders of women has
impacted women’s ability to compete and succeed in the workforce and may impact
a woman entrepreneur’s business growth. Women are often expected to make work
compromises for children and husband’s career in a way that men are not (Mattis
2004; Rudman and Mescher 2013; Maume 2006). However, firms run by women
are also usually smaller than those operated by men in terms of number of em-
ployees, asset value, and annual turnover, besides being less profitable and pro-
ductive, probably due to other constraints such as difficulties obtaining financing.
A study that looked at 34 countries in developed and developing economies in
Europe and Asia found that female-owned firms had also fewer employees overall
than male-owned firms. In the USA, women account for 35% of entrepreneurial
activity. Only 20% of women-owned firms had over US $100,000 annual revenue,
compared to 33% of men-owned firms—a significant difference (Kelley et al. 2013;
Minniti and Arenius 2003; Noor 2004).
Women own only 1% of the world’s wealth, earn only a 10% share of global
income, and occupy just 14% of leadership positions in the private and public
sector. And, while women produce half of the world’s food, they own a mere 1% of
its land. Due to the chilly climate to the glass ceiling, gender may constrict a
women’s ability to advance or to be taken seriously in her career. Although
women’s entrepreneurship has been accepted as an alternative path for women who
seek greater autonomy and/or income, there is still a significant gender gap in the
entrepreneurial activity rate across the world (Verheul and Thurik 2001;
Nedelcheva 2012). A Global Entrepreneurship Monitor study of 18 economies from
2002 to 2010 suggests that women’s entrepreneurial activity is lower than that of
their male counterparts at different stages of development (Kelley et al 2013; Datta
and Gailey 2012).
Countries with high total entrepreneurial activity rates are also associated with
high female entrepreneurial activity rates. In 2015, Global Entrepreneurship
Development Institute published the Female Entrepreneurship Index report that
analyzed conditions for fostering women entrepreneurship in 77 countries. As per
the report, the top ten countries for female entrepreneurs in 2015 were: USA,
Australia, UK, Denmark, Netherlands, France, Iceland, Sweden, Finland, and
Norway. In less developed countries with the high female unemployment rate,
entrepreneurship can be a practical solution to earn income for some women who
need to work at home in order to handle their domestic responsibilities at the same
time (Baugh et al. 2006; Sarfaraz et al. 2013).
There are also regional differences in terms of the female participation rate in
ownership. The following figure indicates the regional differences in terms of firm
ownership, in management and as workers.
Women in developed countries enjoy more equal opportunities than women in
developing countries. On the other hand, as the economies move to a higher level of
development, the rate of entrepreneurial activity decreases, regardless of gender.
234 A. Özyol
Because in more developed economies that both men and women have different
options for employment, individuals seem to be more interested in having secured
jobs rather than starting their own businesses. However, in general, the entrepre-
neurial gap between women and men decreases with economic development level.
In other words, as the economies move from factor-driven stage to efficiency-driven
stage and to innovation-driven stage, the gap between men and women entrepre-
neurs decreases from 5.2% points (lower for women) to 4 points and to 3.4,
respectively.
Access to finance is a major constraint for women entrepreneurs. In developing
countries especially, it is difficult to conduct a thorough analysis of whether a
female entrepreneur faces discrimination when applying or obtaining a loan. But a
study using 2005 data from 34 countries of Western Europe, Eastern Europe, and
Central Asia, and East Asia and the Pacific confirmed this hypothesis that women-
owned or managed firms are more constrained than men’s firms. There were dif-
ferent results depending on the development level of countries. As expected, the
probability of women obtaining loans was higher in more developed countries, and
women had to give less collateral on average. The differences in financing between
male and female entrepreneurs might come from a demand side component. In
other words, female entrepreneurs might demand less financing than men as a result
of less personal wealth to use as collateral, more risk aversion than men to apply for
loans, or self-doubt given the low probability of obtaining loans, based on past
experience. Nevertheless, gender financing discrimination from the supply side
might not be only a matter of perception (Bruni et al. 2004; Landstrom and Lohrke
2010).
Globally, women-owned businesses are well represented in the entrepreneurship
space; yet it is estimated that they only access between 2 and 10% of commercial
bank finance. This holds true in emerging markets, where women-owned firms
represent 31–38% of all small and medium enterprises (SMEs), but have unmet
financial needs close to $300 billion every year. Serving this market not only makes
business sense, it is also known to have positive development impacts for society as
a whole by expanding economic growth and job creation (Schoon and Duckworth
2012; Eddleston et al. 2006).
Another striking research results from a new World Bank Group—housed
project funded by the Bill & Melinda Gates Foundation which is measuring how
people in 148 countries—including the poor, women, and rural residents—save,
borrow, make payments, and manage risk. This is the first time cross-country
comparable data which have been available. It confirms that women have a lower
formal account penetration in every region, with the lowest rates reported in the
Middle East and North Africa, and Sub-Saharan Africa, and the widest gaps in
lower middle-income economies as well as in South Asia and the Middle East and
North Africa. Moreover, unbanked women in developing countries are far more
than men. It is important to recognize that the entrepreneur wage gap is 50 cents to
every $1 of male earnings in Sri Lanka, and in Bangladesh women entrepreneurs
make 12 cents per $1 men earn (The World Bank 2018).
13.4 New Perspectives for Women’s Entrepreneurship:

Education, Internalization, and Innovation
In the transition from an industrial to a knowledge society, relationships between

economic growth, innovation, internationalization, and entrepreneurship have
become critical. To achieve high rates of economic growth, demand for diverse
products and services has been growing considerably. Female entrepreneurship has
a positive impact on product diversification and innovation as well as employment
and wealth creation (Bosma et al. 2008; Audretsch et al. 2006; Armignon and Acs
2002) (Fig. 13.1).
13.4.1 Training Programs for Different Capacities, Needs,

and Expectations
Studies on women entrepreneurs in the industrialized countries suggest that women

business owners have emerged largely from the educated, commercially experienced
segments of the female population. On the other hand, data also confirm a minority
presence of women in entrepreneurship in science and technology: On average in
EU-27 countries in 2006, women occupied 37% of all the research in the high
education sector and 19% in the business enterprise sector, while in the USA, only
34% of all the scientists and engineers in business are women (http://ec.europa.eu).
Women are more likely to work in the service and retail sectors which are
characterized by relatively small initial investments, requiring a small amount of
financial capital. Thus, women entrepreneurs are also less likely to export. If the
goal is strengthening of the impact of female entrepreneurship on economic growth,
Fig. 13.1 Women entrepreneurship, innovation, and internationalization (Own elaboration of

Verheul and Van Stel)
236 A. Özyol
we should contribute in order to increase awareness of women entrepreneurs about

education, international trade, and innovation. If the level of education increases,
entrepreneurial income and productivity increase. Moreover, high-tech sectors
usually demand education and training related to mathematics, engineering, or
natural sciences. Low education level creates a barrier for women to access the
required experience and network (Coleman 2002; Fairlie and Robb 2009; Orser
et al. 2010).
My experience has shown me that there is a real problem regarding content and
implementation of the training programs. The capacities, needs, and expectations of
women entrepreneurs which mostly depend on their education levels and situation
of the countries where they are living are different from each other. There should be
different options for poor uneducated rural women, middle-income educated urban
women. While the middle-income educated urban women entrepreneurs, infor-
mation and communication technology literacy programs, women friendly “soft-
ware” (provision of information, counseling, training), and “hardware” supports
(grants, loans, premises provision, etc.) are important, providing modern agriculture
techniques at fundamental level, introducing some simple technologies to improve
productivity and reduce the time burden and highlighting their contribution to the
local, regional, and national economy, are important for poor uneducated rural
women. The overall law and order situation in the country should be provided at
different levels as well (Zhao et al 2005; Delmar 2003).
13.4.2 Networks, Partnerships, Initiatives for Women

Entrepreneurship at Different Levels
Women entrepreneurs spend less time for networking. Nevertheless, some studies
on women running technology-based businesses demonstrate that they face a “triple
bind:” the lack of personal financial capital, the lack of experience (human capital),
and the lack of networks (social capital) to attract external capital (Verheul and
Thurik 2001).
The international, or global women’s movement can be derived from the
national organizations that came together around the 1975 declaration of the
Decade of Women by the United Nations and its for international conferences—
Mexico City (1975), Copenhagen (1980), Nairobi (1985), and Beijing (1995).
These conferences were the first to bring together women from developed and
developing countries, creating common interests and strategies for action the world
over. A successful sustainable development agenda requires partnerships between
governments, the private sector and civil society (Goal 17: Revitalize the global
partnership for sustainable development). These inclusive partnerships built upon
principles and values, a shared vision, and shared goals that place people and the
planet at the center, are needed at the global, regional, national, and local level
(Shelton 2006; Langowitz and Minniti 2007).
Collective action through social networks and civil society groups has been a
formidable force in advancing gender equality. Policy reforms arise from a political
process where state and non-state societal actors vie to shape their environment.
policies require trade-offs in allocating resources to competing priorities within
budget constraints and financial and political costs. Societal actors have a direct
hand in shaping the policies by advocating policies, designing interventions and
implementing programs. Thus, over the past 25 years, supranational organizations,
women’s rights groups, political parties, trade unions, state-sponsored mass orga-
nizations, and civil society groups have direct hands in shaping the policy and
institutional environment through advocating policies, designing interventions and
implementing programs, thus strengthening the situation of women in the economy
in the form of employment and/or entrepreneurship. Thus, the following part is
allocated to highlight the roles of such kind of organizations for women‘s en-
trepreneurship through networks and partnerships.
Today, there are many UN agencies are working on gender equality from dif-
ferent perspectives. UN Women is the global champion for gender equality,
working to develop and uphold standards, and create an environment in which
every woman and girl can exercise her human rights and live up to her full
potential. In response to the UN General Assembly Resolution 63/311, in January
2006 the Secretary-General presented the report A/64/588, entitled Comprehensive
Proposal for the Composite Entity for Gender Equality and the Empowerment of
Women. In his report, the Secretary-General resolved that, rather than relieving
other parts of the United Nations system of their responsibility for contributing to
the promotion of gender equality and women’s empowerment, the new entity
should seek to sharpen the focus and impact of the gender equality activities of the
entire United Nations System. Additionally, Secretary-General Ban Ki-moon esti-
mated that approximately $125 million per annum were needed for operating costs
and “start-up” capacity at the country, regional, and headquarters levels. Moreover,
an additional $375 million per annum were needed in the initial phase to respond to
country level requests for programmatic support (Gill and Ganesh 2007;
Nedelcheva 2012).
After years of negotiations between UN member states, women’s groups, and
civil society, on July 2, 2010, the General Assembly unanimously adopted the
resolution 64/289, thus creating UN Women by merging the Division for the
Advancement of Women (DAW); the International Research and Training Institute
for the Advancement of Women (INSTRAW, established in 1976); the Office of the
Special Adviser on Gender Issues and Advancement of Women (OSAGI, estab-
lished in 1997), and the United Nations Development Fund for Women (UNIFEM,
established in 1976).
UN Women, the UN Global Compact (business and other stakeholders) in more
than 160 countries, and other leading UN agencies, the World Bank and the World
Economic Forum, reinforce the findings. Governments also recognize that women’s
inclusion drives development, and acknowledge that achieving the Sustainable
Development Goals and national economic and development plans require rapidly
moving toward gender equality (United Nations 2018).
238 A. Özyol
The Women’s Empowerment Principles, a partnership initiative of UN Women

and UN Global Compact which is the world’s largest corporate sustainability ini-
tiative with more than 12,000 participants (UNGC), provide a set of considerations
to help the private sector focus on key elements integral to promoting gender
equality in the workplace, marketplace, and community. Principles forged through
an international multi-stakeholder consultative process, provide a “gender lens”
through which business can analyze current initiatives, benchmarks, and reporting
practices. Subtitled Equality Means Business, the Principles emphasize the business
case for corporate action to promote gender equality and women’s empowerment
and are informed by real-life business practices and input gathered from across the
globe. As well as being a useful guide for business, the Principles seek to inform
other stakeholders, including governments, in their engagement with business.
From the women’s entrepreneurship perspective, Principle 5 which focuses on the
enterprise development, supply chain and marketing practices, should be evaluated.
Principle 5 recommends governments and corporations to take required actions to
expand business relationships with women-owned enterprises, including small
businesses and women entrepreneurs, support gender-sensitive solutions to credit
and lending barriers, ask business partners and peers to respect the company’s
commitment to advancing equality and inclusion, respect the dignity of women in
all marketing and other company materials and ensure that company products,
services, and facilities are not used for human trafficking and/or labor or sexual
exploitation (United Nations Global Compact 2018).
The International Labour Organization (ILO) is the global body responsible for
drawing up and overseeing international labor standards. Working with its member
states, the ILO seeks to ensure that labor standards are respected in practice as well
as principle. ILO is devoted to advancing opportunities for women and men to
obtain decent and productive work in conditions of freedom, equity, security, and
human dignity. Its main aims are to promote rights at work, encourage decent
employment opportunities, enhance social protection, and strengthen dialogue in
handling work-related issues. The Gender, Equality and Diversity Branch (GED), a
part of the Conditions of Work and Equality Department of the International Labour
Office, is responsible for promoting equality and respect for diversity in the world
of work. GED participates in United Nations inter-agency initiatives that promote
gender equality and women’s empowerment, as well as decent work for persons
with disabilities, and the rights of indigenous and tribal peoples. The Branch also
liaises with civil society groups and academic institutions. GED coordinates the
ILO Action Plan for gender equality, which is the result-based tool to realize
operations according to the 1999 policy on gender equality and mainstreaming in
the International Labour Office. The Branch oversees the ILO global Gender
Network comprised of headquarter-based Gender Coordinators and field-based
Senior Gender Specialists, along with gender focal points in all units and offices.
GED expertise focuses on issues related to equal opportunities and treatment for all
women and men in the world of work and eliminating discrimination based on
gender, race, ethnicity, indigenous identity, and disability. The Branch provides
policy advice, tools, guidance, and technical assistance to constituents including
with respect to promoting more inclusive workplaces, and ensuring that policies,
programs and institutions are gender responsive. Additionally, the Women’s
Entrepreneurship Development (ILO-WED) program has been empowering women
entrepreneurs in developing countries and supporting them in starting and growing
their businesses since the mid-2000s. The program works with service providers
promoting entrepreneurship development (financial, non-financial, public, private,
associative, freelance, etc.) and builds their capacity to better support women
entrepreneurs to start and grow their businesses. It also works toward creating a
more positive enabling environment for WED, by supporting assessments of the
situation, and working with governments and policy makers to remove the specific
gender barriers that women entrepreneurs may face (ILO 2018).
United Nations Industrial Development Agency (UNIDO) is the specialized
agency of the United Nations that promotes industrial development for poverty
reduction, inclusive globalization, and environmental sustainability. UNIDO also
collaborates with partners across the UN system, the private sector and at the
country level to advance gender equality and women’s economic empowerment.
Through these partnerships, UNIDO provides technical cooperation activities
within its three thematic areas. By encouraging investment in women-owned
businesses, strengthening female networks, improving access to markets and pro-
viding training, technology and clean energy solutions for inclusive and sustainable
industrial development, UNIDO is helping to create a world where women can
thrive. As well as empowering women through targeted technical cooperation ac-
tivities, UNIDO mainstreams gender in all programs, projects and organizational
practices. UNIDO’s Policy on Gender Equality and the Empowerment of Women,
issued in 2009 and updated in 2015, sets out the Organization’s gender equality
commitments. The Gender Equality and Empowerment of Women Strategy 2016–
2019 provides a clear result-oriented framework and plan of action (United Nations
Industrial Development Organization 2018).
United Nations Conference on Trade and Development (UNCTAD) support
developing countries to access the benefits of a globalized economy more fairly and
effectively. And we help equip them to deal with the potential drawbacks of greater
economic integration. To do this, we provide analysis, consensus building, and
technical assistance. This helps them to use trade, investment, finance, and tech-
nology as vehicles for inclusive and sustainable development. The ultimate gender-
based objective of the UNIDO is to make trade instrumental to the achievement of
gender equality and women’s economic empowerment, as a means to ensure
inclusive development (United Nations Conference on Trade and Development
2018).
In 1945, UNESCO was created in order to respond to the firm belief of nations,
forged by two world wars in less than a generation that political and economic
agreements are not enough to build a lasting peace. Peace must be established on
the basis of humanity’s moral and intellectual solidarity. UNESCO strives to build
networks among nations that enable this kind of solidarity, by mobilizing for ed-
ucation: so that every child, boy or girl, has access to quality education as a
fundamental human right and as a prerequisite for human development, building
240 A. Özyol
intercultural understanding: through protection of heritage and support for cultural

diversity, pursuing scientific cooperation: such as early warning systems for tsu-
namis or trans-boundary water management agreements, to strengthen ties between
nations and societies and protecting freedom of expression: an essential condition
for democracy, development and human dignity. UNESCO has started a program
for Women entrepreneurs on financial planning, management and resource mobi-
lization skills. The aim of the program is summarized as “equipping the women
entrepreneurs with knowledge and skills on basic principles of financial planning
and management and ensuring that they are able to plan, control and analyze
financial information for their various women groups.” It also aims at improving
their capacities to explore and select suitable methods for raising revenue for their
business activities in their respective counties (UNESCO 2018).
The International Organisation of Employers (IOE) is the largest network of the
private sector in the world, with more than 150 business and employer organization
members. In social and labor policy debate taking place in the International Labour
Organization, across the UN and multilateral system, and in the G20 and other
emerging processes, the IOE is the recognized voice of business. The IOE recog-
nizes that, in general, women face unique challenges throughout various stages of
employment. The specific nature of these challenges and the means to address them
depends on the national, social, cultural, and economic contexts in which they live
and work. Business has a role to play in the promotion of gender equality. It is
generally in an employer’s interest to promote workplaces that are free from dis-
crimination against women and to ensure that decisions related to employment are
based on an individual’s merit rather than gender. In this context, employers do not
support the use of quotas to achieve equality, which can serve to undermine the
credibility of women but the effective elimination of barriers to equal access to
training and education, recruitment, and career development opportunities by the
collaborations with the International Federation of Business and Professional
Women (BPW International), the ILO Bureau for Employers’ Activities (ACT/
EMP), the Business and Industry Advisory Committee to the OECD, and its
Business and Industry Advisory Committee (BIAC) (International Organisation of
Employers 2018).
The ITC led Global Platform for Action on Sourcing from Women Vendors is a
10-year initiative that aims to increase the amount of corporate, government, and
institutional procurement secured by women vendors for the ultimate purpose of
bringing economic benefit to women and their communities. It was established in
September 2010. To date, over policy makers, international organizations, buyers,
trade support institutions (TSIs), women’s business associations, and women
business enterprises from 48 countries including 39 least developed countries have
participated in Global Platform activities. Participants have received training and
market linkage opportunities through Buyer Mentor Groups and participation in the
annual Women Vendors Exhibition and Forum. United Nations Global Compact,
WEConnect International, Vital Voices Global Partnership, BPW International,
and the International Women’s Coffee Alliance are the partners of the Platform
(www.itc.org).
WEConnect International helps women-owned businesses succeed in global

value chains. WEConnect International identifies, educates, registers, and certifies
women’s business enterprises based outside of the USA that are at least 51%
owned, managed, and controlled by one or more women, and then connects them
with multinational corporate buyers. Vital Voices is another global initiative which
makes investments for women entrepreneurs to expand their skills, connections,
and visibility (Weconnect 2018). The International Federation of Business and
Professional Women—known widely as BPW International—is one of the most
influential international networks of business and professional women with affiliates
in over 95 countries in five continents which have a consultative status to the United
Nations. BPW International is working together with different partner organization
on local, regional, and global platforms through advocacy, mentoring, training
programs, and projects (BPW 2018).
Besides the United Nations, its specific agencies and the women organizations
which have a consultative status to the UN, there are a lot of regional institutions
that spent efforts to develop women’s entrepreneurs at global level. Even though
there are more women than men in Europe, female entrepreneurs represent only a
third of the self-employed in the EU. There are some additional factors (such as
reconciling business and family) that make entrepreneurship a less attractive option
for them than for men. The European Commission is working with EU countries to
overcome these and encourage more women to start their own companies. In this
context, the European Network to promote Women’s Entrepreneurship (WES) is a
policy network with members from 31 European countries (the EU-28, Iceland,
Norway, and Turkey). The delegates represent national governments and institu-
tions. They are responsible for promoting and supporting female entrepreneurship
at national level. WES members provide advice, support, information, and contacts
regarding existing support measures for female entrepreneurs. They also help
identify good practices (https://wegate.eu/wes-european-network-promote-
womens-entrepreneurship).
The new World Bank Group Gender Strategy (FY 2016–2023) outlines the
support that the entire Group, including International Finance Corporation (IFC).
IFC is the largest global development institution focused on the private sector in
developing countries. IFC is a dynamic organization, constantly adjusting to the
evolving needs of our clients in emerging markets. IFC’s commitment to advancing
gender equality is anchored in a strong business case and in client demand for
gender-smart solutions, which has significantly grown over the past five years. In
response, we are working with clients to reduce the gap between men and women
as entrepreneurs, employees, corporate leaders, suppliers, consumers, and com-
munity stakeholders. IFC support companies with gender-specific advice and
investment. We help to provide access to credit, markets, housing, savings and
insurance products, information, and technology and supply chains. IFC’s com-
mitment to advancing gender equality is anchored in a strong business case and in
client demand for gender-smart solutions, which has significantly grown over the
242 A. Özyol
past five years. In response, we are working with clients to reduce the gap between
men and women as entrepreneurs, employees, corporate leaders, suppliers, con-
sumers, and community stakeholders (World Bank 2012; International Finance
Cooperation 2018).
In June 2003, the LEED Directing Committee agreed to launch this study as part
of the OECD efforts to integrate a gender perspective into the substantive work of
the organization. The aim of this project is to examine the role of female en-
trepreneurship in the dynamics of local development and to give an overall review
of the current situation of women entrepreneurs in a given territory. These studies
will result in the elaboration of recommendations for policy makers to help them to
implement tools adapted to the real needs of women entrepreneurs in the formu-
lation of local development strategies and business creation policies (OECD
2018b).
Through the Global Gender Gap Report, the World Economic Forum quantifies
the magnitude of gender disparities and tracks their progress over time, with a
specific focus on the relative gaps between women and men across four key areas:
health, education, economy, and politics. The aim of the Global Gender Gap Report
is to focus on whether the gap between women and men in the chosen indicators
has declined, rather than whether women are winning the so-called battle of the
sexes. Hence, the Index rewards countries that reach the point where outcomes for
women equal those for men, but it neither rewards nor penalizes cases in which
women are outperforming men on particular indicators in some countries (https://
www.weforum.org/reports/the-global-gender-gap-report-2017).
13.5 Conclusion
According to the OECD 2012 Council Report, the entrepreneurial process is a

major factor in economic development, and the entrepreneur is the key to economic
growth. All countries consider entrepreneurial promotion as a crucial policy for
sustained employment creation, as well as innovation in products, production
processes, and organizations. Thus, supporting entrepreneurship is the key issue for
sustainable development agenda because poverty eradication is only possible
through stable and well-paid jobs.
On the other hand, much of the work of the feminist movement has been to fight
for equality in political, professional, and domestic spheres. In the last two decades,
the feminist movement has focusing on creating gender equality in the workplace.
Today, contribution of women to the labor market is not the issue of women
activists entirely; it is the major component of sustainable development as well.
Women entrepreneurship did not develop as a significant area until the late 1990s
to early 2000s although the literature on mainstream entrepreneurship primarily
focusing on the male entrepreneur emerged in the 1930s. The World Bank’s 2012
World Development Report on Gender Equality and Development dedicate over

400 pages to demonstrating how greater gender equality enhances economic pro-
ductivity, human development, and institutional performance, and how gender
inequality harms growth. There is also global recognition that increasing women’s
control over household income is essential for international human development,
with influential studies showing that women reinvest a higher proportion of income
earned in their family’s upkeep and well-being than men. A smaller number of
leading companies are recognizing that short-term gender-inequitable practices harm
business sustainability and productivity. And gender-sensitive working environ-
ments bring long-term rewards to the businesses by enabling a more stable supply of
commodities, access to the most talented pool of workers, enhanced productivity,
more balanced and talented boards, more appeal to the entire consumer base, and an
enhanced corporate reputation. Merely, we should accept that there is no general
prescription for relating the rate of female entrepreneurship to the level of economic
development. This implies that female entrepreneurship in each country has its own
characteristics and needs to be studied in its own socioeconomic context. Table 13.2
shows the regional differences regarding female entrepreneurship. We require more
comparative studies to uncover the hidden aspects behind the complexity of the rates
of women entrepreneurs, quality and longevity of their businesses, and their con-
tribution to economic development.
Although, women’s entrepreneurship has been accepted as an important unex-
ploited source of economic growth in the last decade, there is a significant gender
gap in the entrepreneurial activity rate across the world. A Global Entrepreneurship
Monitor study of 18 economies from 2002 to 2010 suggests that women’s
Table 13.2 Regional comparison on women’s participation in firm ownership, in management

and as workers
Region % Firms with female % Full-time % Firms with female
participation in ownership female workers top manager
All countries 33.1 28.9 17.2
East Asia and 52.4 38.7 22.5
Pacific
Eastern Europe and 36.2 28.1 18.7
Central Asia
Latin America and 38.9 31.3 –
Caribbean
Middle East and 20.2 17.7 –
North Africa
OECD 31.7 – –
South Asia 15.6 16.1 7.1
Sub-Saharan Africa 29.1 22.9 15
Source World Bank Enterprise Surveys World Bank Group (2018)
244 A. Özyol
entrepreneurial activity is lower than that of their male counterparts at different

stages of development According to the GEM Women’s Report 2012, an estimated
126 million women were starting or running new businesses and an estimated 98
million were running established businesses. Surely, a disproportionate burden on
the shoulders of women has impacted women’s ability to compete and succeed in
the workforce and may impact a woman entrepreneur’s business growth.
Besides gender stereotypes and disproportionate burden on the shoulders of
women, access to finance is another major constraint for women entrepreneurs. In
developing countries, the female entrepreneur faces discrimination when applying
or obtaining a loan. We have very striking results from the study which realized in
34 countries of Western Europe, Eastern Europe and Central Asia, and East Asia
and the Pacific, in 2005. Although women-owned firms represent 31–38% of all
small and medium enterprises globally, they only access between 2 and 10% of
commercial bank finance.
The future development agenda must address fundamental structural and
transformational changes informed by the concrete realities of women throughout
the life cycle. Gender mainstreaming is a tool to manage this change. However, it
should be implemented in policy analysis and development in order to determine
the impacts of policies on women and men and explore how this impact could vary
regarding to gender differences and inequalities. Secondly, gender-disaggregated
data are obtained to analyze the gender differences and inequalities in the frame-
work of the scope. For this, civil society and public bodies are extremely
important to seek meaningful inputs from both women and men. Thus, over the
past 25 years, supranational organizations, women’s rights groups, political parties,
trade unions, state-sponsored mass organizations, and civil society groups have
direct hands in shaping the policy and institutional environment through advocating
policies, designing interventions and implementing programs, thus strengthening
the situation of women in the economy in the form of employment and/or en-
trepreneurship. The third is providing training programs at different levels. Because
my experiences have shown me that there is a real problem regarding content and
implementation of the training programs. The capacities, needs, and expectations of
women entrepreneurs which mostly depend on their education levels and situation
of the countries where they are living are different from each other. There should be
different options for poor uneducated rural women and middle-income educated
urban women. If the goal is strengthening of the impact of female entrepreneurship
on economic growth, we should contribute in order to increase awareness of women
entrepreneurs about education, international trade, and innovation. If the level of
education increases, entrepreneurial income and productivity increases. Moreover,
high-tech sectors usually demand education and training related to mathematics,
engineering, or natural sciences. And finally, women entrepreneurs have to be
matched with networks which recruit women into entrepreneurship. It is especially
very important in cases when women do not believe they are able to take on the
challenge.
If we want to build future we want, we should provide equal access to all kinds
of resources, education, health care, female equality in the workplace and
representation in political and economic decision-making processes for women and

girls by implementing new legal frameworks at all levels around the World.
Otherwise, it could not be possible to promote prosperity for the humanity while
protecting the planet.
References
Aldrich, H. E., & Kim, P. H. (2007). A life course perspective on occupational inheritance: Self-
employed parents and their children. Research in the Sociology of Organizations, 25, 33–82.
Audretsch, D., Keilbach, M., & Lehman, E. (2006). Entrepreneurship and economic growth.
Oxford: Oxford University Press.
Armignon, C., & Acs, Z. J. (2002). The determinants of regional variation in new firms formation.
Reg Studies, 36, 33–45.
Baughn. C. C., Chua, B. L., & Neupert, K. E. (2006). The normative context for Women’s
participation in entrepreneurship: A multicountry study. Journal of Entrepreneurship Theory
and Practice, 5(30), 687–708.
Baum, J. R., & Locke, E. A. (2004). The relationship of entrepreneurial traits, skill, and motivation
to subsequent venture growth. Journal of Applied Psychology, 89(4), 587–598.
Bosma, N., Acs, Z. J., Autio, E., Coduras, A., & Levie, J. (2008). Global entrepreneurship
monitor: 2008 executive report. London: London Business School.
Bruni, A., Gherardi, S., & Poggio, B. (2004). Gender and entrepreneurship: An ethno- graphic
approach. New York: Routledge.
Buvinic, M., Gwin, C. & Bates, L. (1996). Investing in Women: Progress and Prospects for the
World Bank. International Center for Research on Women Policy Essay, No 19, Washington,
DC.
Byers, M., & Crocker, D. (2012). Feminist cohorts and waves: Attitudes of junior female
academics. Women’s Studies International Forum, 35(1), 1–11.
Carr, J. C., & Sequeira, J. M. (2007). Prior family business exposure as intergenerational influence
and entrepreneurial intent: A theory of planned behavior approach. Journal of Business
Research, 60, 1090–1098.
Chang, E. P., Memili, E., Chrisman, J. J., Kellermanns, F. W., & Chua, J. H. (2009). Family social
capital, venture preparedness, and start-up decisions: A study of Hispanic entrepreneurs in New
England. Family Business Review, 22, 279–292.
Coleman, S. (2002). Constraints faced by females small business owners: evidence from data.
Journal of Developmental Entrepreneurship, 17(2), 151–174.
Datta, P. B., & Gailey, R. (2012). Empowering women through social entrepreneurship: Case
study of a women’s cooperative in India. Entrepreneurship Theory and Practice, 36, 569–587.
Dayal, R., Parker, R., & Svendsen, D. S. (1993). Gender Analysis and Planning in the Bank
Project Cycle, World Bank, Asia Technical and Human Resources Division, Washington DC.
Delmar, F. (2003). Women entrepreneurship: Assessing data availability and future needs
(pp. 17–19). Paris: Workshop on Improving Statistics on SMEs and Entrepreneurship. OECD.
Eddleston, K. A., Veiga, J. F., & Powell, G. N. (2006). Explaining sex differences in managerial
career satisfier preferences: the role of gender self-schema. Journal of Applied Psychology, 91,
437–445.
Fairlie, R. W., & Robb, A. M. (2009). Gender differences in business performance: Evidence from
the characteristics of business owners survey. Small Business Economics, 33, 375–395.
Gill, R., & Ganesh, S. (2007). Empowerment, constraint, and the entrepreneurial self: A study of
white women entrepreneurs. Journal of Applied Communication Research, 35, 268–293.
246 A. Özyol
Gupta, V. K., Turban, D. B., Wasti, S. A., & Sikdar, A. (2009). The role of gender-stereotypes in
perceptions of entrepreneurs and intentions to become an entrepreneur. Entrepreneurship
Theory and Practice, 33, 397–417.
Hammer, T., Saksvik, P., Nytro, K., Torvain, H., & Bayazit, M. (2004). Expanding the
psychosocial work environment: Workplace norms and work-family conflict as correlates of
stress and health. Journal of Occupational Health Psychology, 9, 83–97.
Hughes, K. D., Jennings, J. E., Brush, C. G., Carter, S., & Welter, F. (2012). Extending women’s
entrepreneurship research in new directions. Entrepreneurship Theory and Practice, 36, 429–
442.
Jennings, J. E., & Brush, C. G. (2013). Research on women entrepreneurs: Challenges to (and
from) the broader entrepreneurship literature? The Academy of Management Annals, 7(1), 663–
715.
Kabeer, N., & Subrahmanian, R. (1996). Institutions, relations and outcomes: Framework and
tools for gender-aware planning. IDS Discussion Paper, No. 357, Institute of Development
Studies, Brighton.
Kelley, D. J., Brush, C. G., Greene, P. G., & Litovsky. Y. (2013). Global entrepreneurship
monitor, 2012 Women’s Report, The Center for Women’s Leadership at Babson College and
London Business School, Boston.
Kinser, A. E. (2004). Negotiating spaces for/through third wave feminism. NWSA Journal, 16(3),
124–153.
Klyver, K., & Thornton, P. H. (2010). The cultural embeddedness of entrepreneurial self efficacy
and intentions: A cross-national comparison. Paper presented at Fourth Global
Entrepreneurship Monitor Research Conference, London, United Kingdom.
Kuratko, D. F., & Hodgets, R. M. (2004). Entrepreneurship: Theory, Process, Practice (pp. 578–
598) Mason, OH: South-Western College Publishers.
Landstrom, H., & Lohrke, F. (2010). Historical foundations of entrepreneurship research. UK:
Edward Elgar Publishing.
Langowitz, N., & Minniti, M. (2007). The entrepreneurial propensity of women. Entrepreneurship
Theory and Practice, 31, 341–364.
Lorber, J. (2010). Gender inequality: Feminist theories and politics. New York, NY: Oxford
University Press.
Markman, G. D., Baron, R. A., & Balkin, D. B. (2005). Are perseverance and self-efficacy
costless? Assessing entrepreneurs’ regretful thinking. Journal of Organizational Behavior, 26
(1), 1–19.
Mattis, M. C. (2004). Women entrepreneurs: Out from under the glass ceiling. Women in
Management Review, 19, 154–163.
Maume, D. J. (2006). Gender differences in restricting work efforts because of family
responsibilities. Journal of Marriage and Family, 68, 859–869.
Miller, C., & Razavi, S. (1995). From WID to GAD: Conceptual shifts in the women and
development discourse. UNRISD, NY: Occasional Paper.
Minniti, M., & Arenius,P. (2003). Women in entrepreneurship. In First Annual Global
Entrepreneurship Symposium, United Nations Headquarters, NY.
Moser, C. (1993). Gender planning and development: Theory, practice and training. London:
Routledge.
Mueller, S. L., & Dato-on, M. C. (2013). A cross cultural study of gender-role orientation and
entrepreneurial self-efficacy. International Entrepreneurship and Management Journal, 9,
1–20.
Nedelcheva, S. (2012). Female Entrepreneurship in Denmark, MSc Thesis. Aarhus University,
Business and Social Sciences.
Noor, N. (2004). Work-family conflict, work- and family-role salience, and women’s well-being.
Journal of Social Psychology, 144, 389–405.
OECD. (May, 2012). Gender equality in education, employment and entrepreneurship (Final
Report to the MCM) Paris.
Orser, B., Spence, M., Riding, A., & Carrington, C. A. (2010). Gender and export propensity.
Entrepreneurship Theory and Practice, 34(5), 934–958.
Ozyol, A., & Çobanoğlu, N. (2016). Women absent in environmental politics: Gender
mainstreaming in environmental policies (Chapter 14). In K. Caliyurt (Eds.), Women and
sustainability in business: Global perspective (Part 3, pp. 186–202). London and New York:
Routledge.
Rudman, L. A., & Mescher, K. (2013). Penalizing men who request a family leave: Is flexibility
stigma a femininity stigma? Journal of Social Issues, 69, 322–340.
Sarfaraz, L., Mian, S., & Karadeniz, E. (2013). Female entrepreneurship, internationalization and
trade liberalization: The Case of Iran, Pakistan, and Turkey. In Proceedings of the 16th Annual
McGill International Entrepreneurship Conference, McGill University; Montréal, Canada.
Schoon, I., & Duckworth, K. (2012). Who becomes an entrepreneur? Early life experiences as
predictors of entrepreneurship. Developmental Psychology, 48, 1719–1726.
Shelton, L. M. (2006). Female entrepreneurs, work–family conflict, and venture performance: New
insights into the work–family interface. Journal of Small Business Management, 44, 285–297.
The World Bank. (2012). Gender equality and development, world development report 2012.
Washington, DC: The World Bank.
Verheul, I., & Thurik, R. (2001). Start-up capital: does gender matter? Small Bus Econo, 16(4),
329–345.
Zhao, H., Seibert, S. E., & Hills, G. E. (2005). The mediating role of self-efficacy in the
development of entrepreneurial intentions. Journal of Applied Psychology, 90(6), 1265–1272.
Internet Pages
BPW. (2018). https://www.bpw-international.org/, March 8th, 2018.

Empowering Women: Fostering Entrepreneurship, United Nations Industrial Development
Organization. https://www.unido.org/fileadmin/user_media_upgrade/What_we_do/Topics/
Women_and_Youth/Brochure_low_resolution.pdf, Jan 13th, 2018.
Friedlin, J. (2002). Second and third wave feminists clash over the future. http://www.
cwluherstory.org/, October 1st, 2018.
Global Entrepreneurship Report. http://www.gemconsortium.org/, February 14th, 2018.
ILO. (2018). Global employment trends for women. http://www.ilo.org/gender/lang–ru/index.htm,
April 12th, 2018.
International Finance Cooperation. http://www.ifc.org/wps/wcm/connect/Topics_Ext_Content/
IFC_External_Corporate_Site/Gender+at+IFC, April 28th, 2018.
International Organisation of Employers. IOE and BPW International uncover economic dividend
of gender equality. https://www.ioe-emp.org/index.php?eID=dumpFile&t=f&f=
127455&token=a688ab89b6e5b830bde7404b332dedbb362359f2, April 5th, 2018.
OECD. (2018b). The LEED programme and skills/ the OECD skills strategy. https://www.oecd.
org/employment, March 11th, 2018.
The World Bank. Documents & Reports, http://documents.worldbank.org/curated/en/
340701503568346911/pdf/119070-PUB-PUBLIC-PUB-DATE-8-22-17.pdf, March 7th, 2018.
World Bank Group. The enterprise surveys (ES). http://www.enterprisesurvey.org/, February
22nd, 2018.
United Nations Conference on Trade and Development. http://www.unctad.org/en/Pages/DITC/
Gender-and-Trade/Trade,-Gender-and-Development.aspx, March 11th, 2018.
United Nations. (2018). https://www.un.org/sustainabledevelopment/student-resources/, April
24th, 2018.
UNESCO. Priority gender equality. https://en.unesco.org/genderequality, Feb 13th, 2018. https://
en.unesco.org/genderequality, Jan 13th, 2018.
248 A. Özyol
United Nations Global Compact. Endorse the women’s empowerment principles. https://www.
unglobalcompact.org/take-action/action/womens-principles, April 24th, 2018.
Weconnect. (2018). Connecting women’s enterprises with global opportunity. https://
weconnectinternational.org/en/, March 15th, 2018.
http://ec.europa.eu/research/science-society/document/library/pdf, March 21st, 2018.
https://thegedi.org/research/womens-entrepreneurship-index/, February 30th, 2018.
Arzu Özyol graduated from Middle East Technical University in 1983 and received MBA degree
from İstanbul Bilgi University in 2002. In May 2013, she completed her PHD study on Bioethic
Environmental Politics. During the studies of her PhD, she got two courses on Global Energy and
Environmental Politics an Environmental Politics from Harvard University in 2009–2010. From
1983 to 2002, Arzu Özyol worked in Construction Company as an Environmental Engineer. She
has established her own company HYDRA Project and Consulting Company in 2003. The major
speciality of her company is developing and managing projects for EU funds besides providing
training programs for public and private institutions and technical, administrative, and financial
follow-up services for ongoing projects. She is working actively for BPW since 2006. She founded
the first BPW Club in Ankara-Turkey with twenty members. In 2010, the national federation was
established with 100 members. She has attended all CSW Meetings since 2006 and taken
influential roles during the BPW Leadership Summits and Annual WEPs Meetings held in New
York. Since the launch of the Women’s Empowerment Principles: Equality Means Business,
BPW-Turkey have completed four EU-funded projects and realized four high-level international
events in the framework of WEPs under her coordination. Additionally, she arranged for the
official UN WEPs booklet to be translated in Turkish and organized a side event on “Women in
Green Businesses” by teamwork in Rio+20 (United Nations Conference on Sustainable
Development). She was the UN Representative of BPW International in the past two years. She
also represents BPW International in the Global Platform for Action on Sourcing from Women
Vendors, B-MENA initiative (Broader Initiative for Civil Society in North Africa and Middle East)
of the US Department of Government that was started by the ex-Minister of the US Department of
State, Hillary Clinton. Additionally, Arzu Özyol is the member of the board of the UNESCO
Center for Women and Peace in Balkan Countries and coordinator of South Eastern Europe
Leadership Center for Women in Business which was established by the cooperation of BPW
International and UNESCO Center in 2011. She was elected as Vice President United Nation in
the last BPW International Congress that was realized in Jeju Island, South Korea, on May 2014.
In August 2014, she established UNESCO Center for Global Ethics and Sustainable Development
in İstanbul.
Chapter 14
The Relationship Between Sustainable
Economic Development and Tourism
in Turkey: Panel Data Analysis
Dilek Tandoğan
Abstract Economic growth is one of the most important targets of economic

policy. Policy-makers should protect the environment while ensuring economic
growth. This process is defined as sustainable economic development. Many
concepts have been used in the literature to measure sustainable economic devel-
opment. One of these concepts is employment. Tourism sector is important for
sustainable economic development due to its share in economy. Moreover, tourism
contributes sustainable economic development via creating employment. For this
reason, in this study, the relations between tourism sector and employment have
been employed by the period of 2004–2017 in level 2 subregions of Turkey. For
this purpose, the panel causality method developed by Holtz-Eakin et al.
(in Econometrica 56(6):1371–1395, 1988) has been used. According to the
empirical findings obtained from the estimations, there are bidirectional causality
relations between tourism sector and total woman employment and a unidirectional
causality from tourism sector to total employment. The importance of these
empirical findings is that regional tourism increases regional employment.
Moreover, tourism contributes sustainable economic development via creating
employment. Consequently, the study suggests the development of regional
tourism.
Keywords Sustainable economic development Tourism Employment Panel

causality Turkey
14.1 Introduction
Concept of sustainable economic development was first mentioned in Brundtland

Report, prepared by World Commission of Environment and Development in 1987.
The approach based on an environmentally friendly economic growth aims a sus-
D. Tandoğan (&)
Karadeniz Technical University, Trabzon, Turkey
e-mail: dilek.tandogan@hotmail.com

250 D. Tandoğan
tainable growth where regional disparities are eliminated and poverty is reduced. In
the meanwhile from this date until today, the understanding of sustainable eco-
nomic development has been developed by meetings and agreements1 made and
has taken its place among noticeable topics in the world.
Factors of sustainable economic development are examined in three aspects as
economical, social and environmental. Tourism is one of the sectors that is affected
by these three factors and affects them at the same time, as the sustainability of
environmental quality reveals direct relationship with tourism activities. Untainted
environmental quality and factors related to it consequently (preserved cultural and
social structure, climatic and vegetal diversity) are among the main factors making a
place to visit attractive. Accordingly, effects created by tourism activities cause
economical and social outcomes.
When global sustainable development goals and their reasons are examined, as
tourism sector being an entrepreneurial alternative and causing a decrease in pov-
erty by providing income and employment to all societies regardless of developed
or underdeveloped and environmenal values can be considered as touristic attrac-
tiveness, it can be described as solution creator and contribution-maker in terms of
increasing the importance given to environmental values in terrestrial ecosystem.
One of the most important principles of tourism’s contribution in global
sustainable development is the size of employment that is created in a global sense.
Moreover, when considering nature and dynamics of tourism sector, it is known
that tourism is a sector considering and prioritizing women employment especially
in particular departments (Ar and Çelik Uğuz 2017: 526, 529–530).
Income produced by tourism sector affects development of other sectors carrying
out economic activities either directly or indirectly. Economic activities planned to
meet the increasing demand increase the labour demand depending on new job
opportunities and support employment. The progress occured in tourism sector in
the recent years caused inter-regional income disparities taking the first place in
significant economic issues in developing countries such as Turkey to reduce and
thus, the sector to distinguish in efforts to increase employment. In other words,
each region considers its distinctive tourism potential as an investment tool in
reaching low-cost external source and as an important source in financing to support
employment. However, tourism carrying out activities in service sector contributes
to women employment which is more advantageous both in total employment and
service sector.
In addition, elimination of development disparities on regional basis is tried to be
ensured with the plans done both on national and regional scale. In this respect,
tourism is used as an important political tool in the elimination inter-regional
development disparities. European Union defines tourism as a social factor that
makes reducing regional disparities easier (Baykul and Maden 2017: 66). Among
the structural funds approved by European Union, the increase in number of the
ones involving tourism reveals the relationship between tourism and regional
For detailed information, see Barbier (1987), Kruja (2013), Çalık (2014) and Aksu (2011).
1
14 The Relationship Between Sustainable Economic Development … 251
development clearly, along with tourism being defined as a possible development

strategy frequently in economic studies done by OECD Regional Development
Service (Doğan and Yıldız 2007: 155).
Turkey is one of the leading countries in terms of its tourism potential that
attracts tourists internationally. Its climate conditions, vegetation and having hosted
different cultures, its historical and cultural wealth, natural underground wealth,
cuisine culture, etc. make Turkey a centre of attraction in touristic activities. Taking
Turkey’s geographical features into consideration, these attractive factors men-
tioned contain different kinds of wealth for each region. Considering from this point
of view, it is seen that tourism is a sector in which the concept of sustainable
economic development moves from local to regional and that contributes to the
understanding of each region preserving and handing its own features down to the
next generations. Within this context, each region handing its specific cultural life
and natural beauties down to the next generations by preserving them will ensure
the development of tourism by diversifying and the understanding of sustainable
development to improve accordingly. In fact, examples of developed countries in
particular show that applications such as slow city, ecotourism, cultural tourism,
sustainable tourism, green tourism, nature tourism and responsible tourism2 in the
development of tourism sector actually serve to the understanding of sustainable
economic development. Therefore, it appears that tourism supports sustainable
economic development and the concept of sustainable economic development
supports tourism consequently.
Moreover, the principle of sustainability including cultural, social, economical
and environmental parameters being accepted widely in the meantime from Rio
Summit in 1992 to Johannesburg Summit in 2002, United Nations declaring 2002
as the year of Ecotourism and value judgements and consumption habits of societies
changing after industry provide important clues about new tourism trends. When
global tourism market is examined, there are two trends observed such as (1) per-
sonal area of interest oriented, marketing techniques emerging instead of mass
tourism and mass-oriented marketing techniques consequently and (2) increasing
number of tourists planning their travels according to their special areas of interests
and cultural heritage and various art and culture activities taking place among
important purposes of travel. Another trend that draws attention in terms of
changing tourist profiles is the consumer movement adopting a healthy and
sustainable lifestyle principle. In view of this trend on rise, many accommodation
facilities try to prove that they take environmental consciousness and ecological
sustainability into consideration by joining in programmes such as Green key, EU
Eco-Label and Green Globe while new tourist type chooses facilities adopting
methods minimising energy consumption. These new trends that emerge while
tourism strategies are being determined and are supposed to be evaluated carefully
(Tourism Specialisation Commission’s Report 2014: 25).
2
For detailed information, see Mirsanjari (2012).
252 D. Tandoğan
14.2 Relationship Between Tourism and Employment
Tourism’s contribution to employment shows itself in three ways as direct, indirect

and induced in general. Direct employment includes employment of tourism
establishments such as accommodation, refreshments, transportation businesses,
travel agencies and tour operators. Indirect employment includes employment in
sectors providing products and services that the sector of tourism needs and ac-
tivities benefiting from tourists’ expenditures. Sectors such as agriculture, fishing,
construction, handicrafts, banks and production sectors are the ones being provided
new employment opportunities with the development of tourism. Induced
employment is the one involving additional employment created in the economy by
spending the income provided by direct and indirect employment (Yıldız 2011: 60).
Tourism has an important impact on creating employment as it provides
approximately 235 million jobs worldwide. Income created by the employment will
be used for purchasing of goods and services by themselves and their families.
Thus, this case in question will meet the need for schools, hospitals, shops and
service institutions apart from tourism (Lundgreen 2013: 27).
Tourism and travel contributed 2.3 trillion dollars to the world GDP directly in
2016. The number in question is more than the contribution of automotive and
chemicals production to the world GDP. In addition, the direct and indirect con-
tribution of tourism to the world GDP is more than the contribution of all sectors
with 7.6 trillion dollars (10.2%) except for construction, financial service and retail
sectors. Also, tourism’s contribution to direct employment worldwide was
108.7 million in 2016. The number in question means job support 7 times more
than automotive production sector, 5 times more than chemicals production sector,
4 times more than mining sector, 3.5 times more than banking sector and 2 times
more than finance sector (WTTC Benchmark Report 2017: 1).
The contribution of tourism and travel to employment was 2.2 million people for
Turkey, as direct, indirect and induced. Therefore, it was determined that travel and
tourism supported employment more than other sectors except for construction,
retail and agriculture (Benchmark Report, Turkey 2017: 2). In this way, it can be
said that efforts towards tourism could give results faster than other sectors in the
efforts to increase employment in Turkey.
Moreover, it is seen that tourism activities in Turkey are more active in western
regions comparing to eastern regions. Figure 14.1 shows the number of tourists
arrived in 2004 and 2017 on subregions basis.3
3
26 Subregions: TR10; İstanbul, TR21; Tekirdağ, Edirne, Kırklareli, TR22; Balıkesir, Çanakkale,
TR31; İzmir, TR32; Aydın, Denizli, Muğla, TR33; Manisa, Afyon, Kütahya, Uşak, TR41; Bursa,
Eskişehir, Bilecik, TR42; Kocaeli, Sakarya, Düzce, Bolu, Yalova, TR51; Ankara, TR52; Konya,
Karaman, TR61; Antalya, Isparta, Burdur, TR62; Adana, Mersin, TR63; Hatay, Kahramanmaraş,
Osmaniye, TR71; Kırıkkale, Aksaray, Niğde, Nevşehir, Kırşehir, TR72; Kayseri, Sivas, Yozgat,
TR81; Zonguldak, Karabük, Bartın, TR82; Kastamonu, Çankırı, Sinop, TR83; Samsun, Tokat,
Çorum, Amasya, TR90; Trabzon, Ordu, Giresun, Rize, Artvin, Gümüşhane, TRA1; Erzurum,
Erzincan, Bayburt, TRA2; Ağrı, Kars, Iğdır, Ardahan, TRB1; Malatya, Elazığ, Bingöl, Tunceli,
Fig. 14.1 Number of tourists arrived in Turkey in 2004 and 2017 on subregions basis
As seen in Fig. 14.1, TR61 region is the region which attracted tourists the most
with approximately 8.954 million and 15.852 million tourists in 2004 and 2017,
respectively. Similarly, TR10 (4.485 million and 10.747 million people) and TR32
(5.074 and 5.715 million people) subregions are the second and third subregions,
respectively, that attracted tourists the most. In other saying, the fact that these three
subregions which take place in Turkey’s west composing 52% of total number of
tourists arriving in Turkey reveals the big share that these three subregions have in
tourism.
Figure 14.2 shows the number of people employed in 2004 and 2017 on
subregions basis.
As seen in Fig. 14.2, TR10 subregion is the region where the employment is the
highest in Turkey with 3.521 million people in 2004 and 5.664 million people in
2017. TR51 subregion is in the second place with the employment of 1.155 million
people in 2004 and 1.960 million people in 2017. TR90 takes the third place with
the employment of 1.096 million people in 2004 while TR31 takes the third place
with the employment of 1.611 million people in 2017. When the data in question
are examined, it is seen that other regions except for TR90 subregion take place in
the west of Turkey.
Figure 14.3 shows the number of women employment in Turkey in 2004 and
2017 on subregions basis.
As seen in Graph 3, TR10 subregion is the region where women employment is
the highest in Turkey with 737 thousand people in 2014 and 1.776 million people
in 2017. In the year of 2004, TR90 region is in the second place with 476 thousand
people while TR83 is in the third place with 392 thousand people. It is seen that
TRB2; Van, Muş, Bitlis, Hakkari, TRC1; Gaziantep, Adıyaman, Kilis, TRC2; Şanlıurfa,
Diyarbakır, TRC3; Mardin, Batman, Şırnak, Siirt.
254 D. Tandoğan
Fig. 14.2 Total employment in Turkey in 2004 and 2017 on subregions basis
Fig. 14.3 Women employment in Turkey in 2004 and 2017 on subregions basis
TR51 and TR31 subregions rank the second and third with 592 thousand people
and 524 thousand people, respectively. It is determined that TR90 and TR83
subregions taking place in eastern Turkey lost their position of being the second and
third in 2004 to the regions taking place in western Turkey in 2017.
In the studies done to determine tourists’ purposes of travel, it is seen that the
number of travels with environment, culture, education, entertainment, health,
business and shopping purposes increased along with sea, sand and sun tourism.
Thus, it is seen that Turkey has the diversity to meet all these needs considering
Turkey and its regional sources as a whole. In the policies carried out to decrease
inter-regional development differences, tourism’s contribution to regional
employment can be achieved by planning in line with the set goal. Also, the impact
of tourism having activities in service industry is significant to increase women

employment in order to eliminate gender inequality. For that purpose, tourism’s
effect on the efforts of sustainable economic development to decrease inter-regional
development disparities is determined as the subject of study. To put it more
clearly, the relationship between employment, women employment and tourism
used as the indicator of economical and social elements of sustainable economic
development is researched on subregions basis. In line with this purpose, the study
is organised as four sections. In the second section of the study, the studies related
to the subject taking place in literature are examined and presented as summary. In
the third section, data set and econometric method are introduced. In the fourth and
last section, acquired results are examined and evaluations are made.
14.3 Literature
When studies taking place in literature are examined, it is detected that tourism’s
contribution to employment is examined by both econometric methods and
graphical methods based on the analysis of changes in values of variables over time
or input–output analysis method. Accordingly, studies in question taking place in
relevant literature are examined and presented as a summary in this part of the
study. As a result of examining the studies in the literature, it is determined that the
relationship between tourism and employment in Turkey was not examined on
subregions basis. Therefore, the fact that this study will fill the gap in the literature
suggests the importance of it. When the studies researching the relationship
between tourism and employment are examined via econometric methods, it is
determined that Pavlic et al. (2013) researched the relationship between tourism and
employment through Johansen cointegration and Granger causality tests with
quarterly data for 2000–2012 period. Findings revealed the long-term relationship
between tourism and employment. In addition, a unidirectional causality relation-
ship from tourism towards employment was detected. Dimoska (2016) estimated
tourism’s impact on employment for 2002–2015 period over linear regression
model. Dependent variable was indicated by total employment and total employ-
ment in food and beverage services while independent variable was indicated by the
number of tourists arriving. Results acquired from both models showed that tourism
affected total employment and total employment in food and beverage services
positively. Similarly, Fauzel (2016) researched the relationship between tourism
sector and employment in Mauritius for 1988–2014 period through VECM and
Granger causality tests. Results revealed that tourism supported employment both
in long and short term. Also, the results of Granger causality test detected a uni-
directional causality relationship from tourism towards employment. Önder and
Durgun (2008) researched the relationship between tourism and employment in
Turkey for 1980–2007 period via Johansen cointegration and Engle–Granger
causality test. According to the findings acquired, there was a long-term
256 D. Tandoğan
relationship between tourism incomes and employment. Also, the results of

causality test revealed a unidirectional causality relationship from tourism towards
employment.
When studies researching tourism’s impact on employment are examined, it is
determined that Akın (2018) examined the relationship between tourism and
employment in Turkey for 1990–2017 period through data assessment method. As
a result of analysing the data, it is revealed that tourism contributes to employment
in Turkey in the study. Obadic and Maric (2009) evaluated the effect of tourism on
women employment for 27 EU countries by including the years of 2000–2008 and
the period in between. As a result of the assessments, it was determined that women
employment composed 60% of total employment in 2007 in tourism accomodation
sector for 27 EU countries. Also, it was determined that the rate of women
employment working in hotel and restaurant sector was more than men. As a
consequence, women employment was determined to be more than men employ-
ment in tourism sector comparing to other sector employees in the economy. Şit
(2016) researched tourism’s contribution to employment for 2005–2014 period in
direct and indirect aspect through data assessment. During the period in question,
the sector was determined to be the one contributing the most to total employment,
with an increase from 11 million to 16 million in the number of employees working
in service sector. When the contribution of tourism taking place in service sector to
employment is examined, it is revealed that there is an increase through direct
contribution in particular. In other words, it is seen that tourism’s contribution to
employment increased by 29% in the related period and reached 614 thousand
people from 474 thousand people. It is seen that its contribution to indirect
employment increased by 26% and reached to 1 million 596 thousand people from
1 million 260 thousand people. Tourism’s contribution to total employment took 58
shares from total employment through increasing by 27% in this period. Yıldız
(2011) stated that the share tourism sector in total employment increased each year
in 1993–2011 period except for 1995, in his study examining tourism’s contribution
to employment in Turkey. It was determined that tourism’s share in total
employment was 17.86% in 2011. Thus, it is stated that tourism had an important
role in solving the unemployment problem.
In addition, Prasad and Kulshrestha (2015) researched the relationship between
tourism sector and employment in India for 2007–2008 period through input–
output method. According to the findings obtained, it was stated that the expen-
diture of tourists arriving increased the employment of five sectors (food and
beverage, transportation, travel services, accommodation and culture and recreation
services) having activities in tourism sector.
As a consequence, when the studies taking place in literature are examined, it is
seen as the mutual result of studies that tourism supports employment despite of
method differences.
14.4 Data Set and Econometric Method
In the study, the relationship between tourism and employment in Turkey is

researched according to Nomenclature of Territorial Units for Statistics (NUTS)4 by
using annual variables including 2004–2017 period of Level 2 subregions through
panel causality. Variables of total rate of employment and rate of employment by
gender and the variables of total employment and total women employment that
Turkish Statistical Institute published under the title of socio-economic develop-
ment are used as the indicator of sustainable economic development. Data of the
variables are presented in Table 14.1. All the variables in Table 14.1 are subjected
to analysis by taking natural logarithm.
Unit root levels of the variables are researched through Levin et al. (2002) test
(LLC) used in panel data analyses commonly. H0 hypothesis of LLC test indicates
that the variable carries unit root, whereas alternative hypothesis indicates that the
variable does not carry unit root and is stationary.
Causality relationship between variables is researched through panel causality
testing suggested by Holtz-Eakin et al. (1988). The direction of causality between
variables is determined over Eqs. (14.1) and (14.2)
X
k X
k
Yit ¼/0t þ /lt Yitl þ blt Xitl þ fi þ xit i ¼ 1. . .N; t ¼ 1. . .T ð14:1Þ
l¼1 l¼1
X
k X
k
DYit ¼ /l DYitl þ bl DXitl þ Dxit ð14:2Þ
l¼1 l¼1
In Eqs. (14.1) and (14.2), i, t, fi and Δ represent cross-sectional units, time, fixed
effects and differences of variables, respectively. Equation (14.2) is acquired by
taking the difference between variables to remove fixed effects taking place in
Eq. (14.1). In the equation where the difference is taken, there is a need for the use
of instrumental variables in the estimation of equation, as ΔYit−1 is related to Δ⍵it.
In the method developed by Arellano and Bond (1991), the use of lagged values of
independent variables as instrumental variables is allowed through generalised
method of moment (GMM) estimation. It is determined whether there is a causality
relationship from independent variable towards dependent variable by applying
Wald test to the coefficients of independent variables. In addition, validity of
instrumental variables is tested through Sargan test. According to this, H0 null
hypothesis is done as instrumental variables not related to error terms while
alternative hypothesis is done as instrumental variables related to error terms. When
determining the causality relationship in Wald test, testing is done in a way that
there is a causality relationship from independent variable towards dependent
4
Turkey is classified as Regional Level 1 (12 regions), Regional Level 2 (26 subregions) and
Regional Level 3 (81 provinces) according to the classification of NUTS.
258 D. Tandoğan
Table 14.1 Variables used in panel data analysis and their definitions
Name of variable Definition Source
Tourism; total number Number of arrival and overnights in Turkish
of tourist arrivals (LT) accommodation facilities with municipal certificate: Statistical
number of arrivals in facility/total and number of Institute
arrivals and overnights in accommodation facilities Regional
with Tourism establishment certificate: number of statistics
arrivals in facility/total
Rate of total Labour force status of non-institutional population
employment (LRTE) (aged 15+): employment rate (%)
Total employment Labour force status of non-institutional population
(LTE) [aged 15+]: employment (1000)
Rate of total women Employment rate based on age groups (aged 15 and
employment (LRTWE) above—%): total/women
Total women Employment based on age groups (aged 15 and
employment (LTWE) above—a thousand people): total/women
variable in the null hypothesis, whereas there is a causality from independent

variable towards dependent variable in the alternative hypothesis.
14.5 Econometric Findings
Before researching the relationship between tourism and employment in Turkey on

subregions basis by panel causality testing, stationary levels of variables are
examined by Levin, Lin and Chu panel unit root test and results are presented in
Table 14.2.
As seen in Table 14.2, variables are detected to be stationary both at level and
first difference. Results of Holtz-Eakin et al. (1988) panel causality test used to
research the relationship between total employment and rate of total employment
and tourism in Turkey on subregions basis can be seen in Table 14.3.
Table 14.2 Levin, Lin and Chu unit root test results
Variables Level Difference
Fixed Fixed-trended Fixed Fixed-trended
LT −7.79544a −8.62349a −17.7179a −14.6297a
LRTE −3.87599 a
−5.01088 a
−12.6638 a
−11.6203a
LTE −1.31285b −4.85577a −12.9643a −11.4604a
LRTWE −4.10163 a
−7.05344 a
−12.1961 a
−11.8478a
LTWE −2.62830 a
−6.33493 a
−12.9343 a
−11.8873a
Note Optimal lag length is determined according to Akaike Info Criterion (AIC)
a,b
Respectively indicate significance at the level of 1 and 10% statistically
Table 14.3 Panel causality test results of total employment models

Independent Dependent variable Independent Dependent variable
variable DLTE DLT variable DLRTE DLT
DLTE(-1) 0.873815a 0.820119b DLRTE(-1) 0.567001a 0.737196c
(0.071971) (0.383040) (0.154751) (0.403110)
DLTE(-2) −0.098991c 0.014275 DLRTE(-2) −0.106371b −0.159642b
(0.058255) (0.065996) (0.048687) (0.071748)
DLT(-1) 0.101517 0.671738a DLT(−1) 0.066880c 0.984390a
(0.075176) (0.189199) (0.037784) (0.093271)
DLT(-2) −0.001299 −0.073442 DLT(-2) −0.005170 −0.027386
(0.012510) (0.098173) (0.013156) (0.090581)
H0 DLTEi = 0, DLTE = 0, H0 DLRTEi = 0, DLTEi = 0,
i = 1, 2 i = 1, 2 i = 1, 2 i = 1, 2
Wald test 2.751038 7.508484b Wald test 7.526589b 15.22483a
v2 statistics v2 statistics
Result U DLTE ! DLT Result DLRTE $ DLT
Sargan test 0.337333 0.337827 Sargan test 0.370724 0.979899
P-value P-value
a,b,c
Indicate significance at the level of 1, 5 and 10%, respectively, while parenthetical values
indicate standard deviation value
Fixed, LTEit−l, LRTEit−l and LTt−l, l = 2 … 5 are used as instrumental variables in GMM
estimation. $ indicates a bidirectional causality between variables and u indicates no causality
relationship between variables
When Table 14.3 is examined, Wald test statistics in the model where dependent
variable is DLTE revealed that there is a causality relationship from DLT-
independent variable towards DLTE by rejecting H0 at the significance level of 5%
statistically. However, when results of the model where DLT-dependent variable
are analysed, Wald test statistics showed that there is no causality relationship from
DLTE towards DLT by not rejecting H0. Therefore, it is determined that there is a
unidirectional relationship from DLT towards DLTE.
Similarly, Wald test statistics in the model where DLRTE is the dependent
variable revealed a causality relationship from DLT towards DLRTE by rejecting
H0 at the significance level of 10% statistically. When Wald test statistics are
examined in the model where DLT is the dependent variable, it is determined that
there is no causality relationship from DLRTE towards DLT by not rejecting H0.
As a consequence, a unidirectional causality relationship from DLT towards
DLRTE is detected. Also, Sargan test results revealed the validity of instrumental
variables.
Results of Holtz-Eakin et al. (1988) panel causality testing used to research the
relationship between total women employment and rate of total women employ-
ment and tourism in Turkey on subregions basis can be seen in Table 13.4.
When the data taking place in Table 13.4 are examined, Wald test statistics in
the model where dependent variable is DLTWE revealed a causality relationship
from DLT-independent variable to DLTWE by rejecting H0 at the significance level
260 D. Tandoğan
Table 14.4 Panel causality test result of total women employment models
Independent Dependent variable Independent Dependent variable
variable DLTWE DLT variable DLRTWE DLT
DLTWE(-1) 0.642172a 0.006966 DLRTWE(- 0.766692a 0.178400b
(0.145876) (0.052209) 1) (0.087479) (0.105682)
DLTWE(-2) −0.143788a −0.107471a DLRTWE(- −0.090161a −0.100582a
(0.016669) (0.028624) 2) (0.027519) (0.034624)
DLT(-1) 0.287597a 1.114290a DLT(-1) 0.087875 0.955786a
(0.049644) (0.094930) (0.064310) (0.071748)
DLT(-2) 0.037186 0.019671 DLT(-2) −0.021642 −0.015808
(0.060217) (0.101365) (0.040035) (0.099885)
H0 DLTWEi = 0, DLTEi = 0, H0 DLRTWEi = 0, DLTEi = 0,
i = 1, 2, 3 i = 1, 2, 3 i = 1, 2, 3 i = 1, 2, 3
Wald test 36.45416a 27.21182a Wald test 2.501951 16.07345a
v2 statistics v2 statistics
Result DLTWE $ DLT Result DLRTWE ! DLT
Sargan test 0.560106 0.413072 Sargan test 0.429192 0.466199
P-value P-value
a,b
Indicate significance at the level of 1 and 10%, respectively, while parenthetical values indicate
the standard deviation value
Fixed, LTWEit−l, LRTWEit−l and LTt−l, l = 2 … 5 are used as instrumental variables in GMM
estimation. $ shows a bidirectional causality relationship between variables while ! shows a
unidirectional causality
of 1% statistically. Moreover, when results of the model where DLT is dependent

variable are analysed, Wald test statistics determined a causality relationship from
DLTWE towards DLT by rejecting H0 at the significance level of 1% statistically.
Consequently, there is a bidirectional causality relationship detected between
DLTWE and DLT.
Moreover, in the model where DLRTWE is dependent variable, a causality
relationship from DLT to DLRTWE cannot be detected by Wald test statistics not
being rejected statistically. Wald test statistics in the model where DLRTWE is
dependent variable revealed that there is a causality relationship from DLRTWE to
DLT by rejecting H0 at the significance level of 1% statistically. Thus, there is a
unidirectional causality relationship detected from DLRTWE to DLT. Also, Sargan
test results revealed the validity of instrumental variables.
14.6 Conclusion and Discussion
Turkey’s western regions being more advanced than eastern regions causes various
problems like economic and social ones. In a more explicit saying, problems such
as unemployment, immigration, unplanned urbanisation, inadequate education and
access to health services, income inequalities per capita, etc. underlie economical
and social problems. Furthermore, the concept of sustainable economic
development supports policies that make reaching equal rights easier both for
today’s generation and the next generations by pioneering in planning activities that
can be done to eliminate economic and social inequality. Therefore, policies to be
applied to reduce differences of regional inequalities will support the reduction of
socio-economic development differences. From this point of view, tourism will take
an important role in reducing the differences in subject by causing each region to
become a centre of attraction preferred by tourists in a way to move ahead of its
components with its distinctive features.
An increase in tourist arrivals in the region will increase region’s income
depending on expenditure of tourists. Thus, investments to meet tourists’ demands
will create new job opportunities. Accordingly, development of tourism having
activities in service sector in the regions which have limited job opportunities will
increase the need and demand for human resources and support employment by
boosting new job opportunities. For this purpose, relationships between employ-
ment and tourism in Turkey for 2004–2017 period are examined on 26 subregions
basis in the study. Causality relationships between total employment, rate of total
employment, women employment and rate of total women employment and the
number of tourists arriving are researched through panel causality testing.
According to the findings acquired, there is a unidirectional causality relationship
detected from employment towards tourism and a bidirectional causality relation-
ship between the rate of total employment and tourism. Moreover, there is a
bidirectional causality relationship determined between total women employment
and tourism while there is a unidirectional causality relationship determined from
the rate of total women employment towards tourism. To evaluate all the results as a
whole, it can be said that the bidirectional causality relationship between tourism
and employment shows that there is a feedback relationship between the variables.
Tourism contributes to employment as it is a labour-intensive sector. Also,
development of tourism contributes to all the economy directly and indirectly. Its
feature supporting women employment which is disadvantageous especially in
employment contributes to social gender equality and the principle of equal rights
in economic development. Accordingly, it seems like increasing touristic activities
in eastern regions will play an important role in eliminating inter-regional
inequalities. However, rate of employment being higher in western regions than
eastern regions requires people looking for jobs to immigrate to these regions. Thus,
highlighting attractive features of touristic regions and distinctive features of each
region attracting tourists to those regions will contribute to employment supported
by tourism on regional basis. Turkey should speed up the investments in regional
tourism applications among its efforts to reduce regional development differences
and regional employment differences by using available sources effectively.
262 D. Tandoğan
References
Akın, A. (2018). The effects of Turkish tourism on macroeconomic indicators. Journal of Tourism
and Gastronomy Studies, 6(3), 3–23. https://doi.org/10.21325/jotags.2018.269.
Aksu, C. (2011). Sürdürülebilir Kalkınma ve Çevre. Güney Ege Kalkınma Ajansı. http://cevre.mf.
duzce.edu.tr/Dokumanlar/cevre_mf/Dosyalar/S%C3%9CRD%C3%9CR%C3%9CLEB%C4%
B0L%C4%B0R%20Kalk%C4%B1nma%20ve%20%C3%87evre.pdf. Accessed November 11,
2018.
Ar, H., & Çelik Uğuz, S. (2017). The role of tourism in global sustainable development goals: the
example of Turkey. J Int Soc Res, 10(49), 521–530.
Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence
and an application to employment equations. The Review of Economic Studies, 58(2), 277–297.
Barbier, E. B. (1987). The concept of sustainable economic development. Environmental
Conservation, 14(02), 101–110.
Baykul, A., & Maden, S. I. (2017). The relationship between regional development and tourism:
An evaluation on TR61 region. Int J Global Tour Res, 1(2), 65–73.
Çalık, İ. (2014). Doğu Karadeniz Bölgesi Sürdürülebilir Turizm Araştırması (Gümüşhane,
Trabzon, Rize, Artvin, Giresun, Ordu). Gümüşhane Üniversitesi Yayınları Yayın No: 28, T.C.
Kültür ve Turizm Bakanlığı, Ekspres Ofset Mat. ve Amb.San.Tic.Ltd.Şti.
Dimoska, T. (2016). Impact of tourism on the employment in the Republic of Macedonia. In
International Thematic Monograph – Thematic Proceedings, Modern Management Tools and
Economy of Tourism Sector in Present Era, 192–208, Belgrade. https://www.researchgate.net/
publication/313774334. Accessed August 06, 2018.
Doğan, S., & Yıldız, Z. (2007). Bölgesel Kalkınma, Turizmin İlişkisi ve Göller Bölgesi
Kalkınmasında Alternatif Turizm Potansiyelinin Kullanılabilirliğine Yönelik Bir Araştırma.
Journal of Suleyman Demirel University Institute of Social Sciences, 2(6), 147–181.
Fauzel, S. (2016). Tourism and employment spillovers in a small island developing state: a
dynamic investigation. Theoretical Economics Letters, 6(2), 138–144. https://www.scirp.org/
journal/PaperInformation.aspx?PaperID=65319. Accessed April 01, 2018.
Holtz-Eakin, D., Newey, W., & Rosen, H. S. (1988). Estimating vector autoregressions with panel
data. Econometrica, 56(6), 1371–1395.
Kruja, A. (2013). Sustainable economic development, a necessity of the 21st century.
Mediterranean Journal of Social Sciences, 4(10), 93–98.
Levin, A., Lin, C. F. J., & Chu, C. S. (2002). Unit root tests in panel data: asymptotic and
finite-sample properties. Journal of Econometrics, 108(1), 1–24.
Lundgreen, H. L. (2013). Employment and earning impacts of tourism in a developing country
context. https://pdfs.semanticscholar.org/6f67/da4fb0f2ef6eac8e2265793e94185d11a359.pdf.
Accessed October 31, 2018.
Mirsanjari, M. M. (2012). Importance of environmental ecotourism planning for sustainable
development. OIDA International Journal of Sustainable Development, 4(2), 85–92.
Obadic, A., & Maric, I. (2009). The significance of tourism as an employment generator of female
labour force. Economic Thought and Practice (Ekonomska misao i praksa), (1), 93–114.
https://scinapse.io/papers/337940296. Accessed May 21, 2019.
Önder, K., & Durgun, A. (2008). Effects of tourism sector on the employment in Turkey: an
econometric application. In Proceedings Book First International Conference on Management
and Economics (ICME’08), Current Issues in Emerging Economies in Global Perspective
(pp. 365–373). University of Tirana, Albania. http://dspace.epoka.edu.al/handle/1/114.
Pavlic, I., Suman, T. M., & Svilokos, T. (2013). Impact of tourism on the employment in Croatia.
Recent Advances in Business Management and Marketing, 219–224. http://www.wseas.us/e-
library/conferences/2013/Dubrovnik/MATREFC/MATREFC-34.pdf. Accessed November 11,
2018.
Prasad, N., & Kulshrestha, M. (2015). Employment generation in tourism industry: an input–
output analysis. The Indian Journal of Labour Economics, 58(4), 563–575. https://doi.org/10.
1007/s41027-016-0035-2. Accessed July 18, 2018.
Şit, M. (2016). Employment contribution of tourism sector in Turkey. Journal of Academic
Approaches, 7(1), 101–117.
Onuncu Kalkınma Planı Özel İhtisas Raporları (2014-2018). Turizm. https://www.sbb.gov.tr/wp-
content/uploads/2018/11/10_Turizm.pdf. Accessed on March 5, 2019.
WTTC (World Travel & Tourism Council) Benchmark Reports. (2017). How does travel &
tourism compare to other sectors? https://www.wttc.org/economic-impact/benchmark-reports/.
Accessed November 18, 2018.
WTTC Benchmark Reports Turkey. (2017). How does travel & tourism compare to other sectors?
https://www.wttc.org/economic-impact/benchmark-reports/country-results. Accessed April 11,
2019.
Yıldız, Z. (2011). Development of tourism sector and its effects on employment. Süleyman
Demirel Üniversitesi Vizyoner Dergisi, 3(5), 54–71.
Dilek Tandoğan was born in Germany in 1977; she completed her primary, secondary and high
school education in Trabzon. She started her studies at the Black Sea Technical University, Faculty
of Economics and Administrative Sciences, Department of Economics. In 2006, she started as
Lecturer at the Black Sea Technical University, Vakfıkebir Vocational School, Department of
Banking and Insurance. She completed her master’s degree in the Department of Labour
Economics and Industrial Relations at the Black Sea Technical University in 2005. In 2012, she
completed her doctorate at the Black Sea Technical University, Institute of Social Sciences,
Department of Economics. She served as Head of Department between 2005 and 2008. Between
2010 and 2015, she served as Assistant Director. She served to as Assistant Associate Professor
between 2015 and 2018 in the Black Sea Technical University Tourism and Hospitality Vocational
School. Dilek TANDOĞAN, who still continues to serve as Assistant Associate Professor at the
Trabzon University Tourism and Hospitality Vocational School, is married, and a girl’s mother.
Index
A Astra Agro, 82, 89

Accountability, 4, 6, 17, 46, 51, 52, 56, 84, Authority, 4, 19, 81–83, 86–90, 92–95, 97,
145, 185 100, 104, 107, 141–143, 157, 168, 203,
Accounting, 3–7, 46, 53, 55, 56, 185, 229 217
Achieve, 26, 29, 33, 54, 71, 85, 98, 169, 177, Award, 98
185, 218, 225, 227–229, 235, 240
Achievement, 83, 84, 86, 147, 154, 160, 183, B
184, 239 Background, 81, 93, 115, 163
Action, 4, 6, 15, 26, 62–64, 85–88, 104, 106, Balkan, 173–175, 177–179, 183, 184, 186, 189
121, 141–143, 147, 154, 156, 162, 179, Banking, 176, 194, 196–199, 202, 252
185, 219, 223, 225, 229, 230, 236–240 Board, 3, 5–7, 82–85, 87, 88, 92, 93, 96–99,
Activity, 4, 8, 14, 15, 17–19, 30, 36, 37, 45, 46, 154, 185, 208, 209, 212–214, 243
49–56, 85, 87, 89, 98, 141–154, 156, Brands, 16, 50, 51, 83
157, 164, 174, 175, 180, 198, 199, Business, 3–7, 13, 14, 16–22, 26, 28, 33,
201–203, 225, 227, 230, 231, 233, 237, 45–57, 70, 73, 74, 76, 82, 84, 86, 88, 89,
239, 240, 243, 244, 250–252, 255, 256, 94, 95, 141–148, 153, 155–158,
261 173–177, 179–181, 185, 186, 189, 196,
Actor, 37, 82, 237 208, 209, 211, 213, 217, 219, 221, 225,
Administer, 83 226, 228, 229, 232–244, 252, 254
Agriculture, 47, 62, 64, 66, 68, 70, 71, 83, 88, BWPT, 89, 90, 93, 95–97
89, 154, 179, 181, 236, 252
Allegation, 82, 85, 208, 209 C
Animal, 62, 82 Categorization, 81, 90
ANJT, 89, 93, 94, 96, 97 CBTR, 196
Annual Report (AR), 81, 88–91, 93, 96, 98, 99, Certification, 81, 83, 85, 95, 98, 99, 147
175 CFO, 6, 88
Appoint, 82 Characteristic, 29, 31, 70, 71, 74, 81, 86, 87,
Area, 4–6, 18–20, 27, 33, 47, 48, 51, 53, 54, 90, 92, 93, 97, 100, 105, 108, 109, 113,
63–66, 74, 85, 92, 94, 95, 115, 126, 142, 122, 129, 141, 228, 243
143, 145, 156, 159, 160, 162–166, 168, Chief, 82, 84, 94, 96, 115, 178
169, 174, 175, 177, 178, 180, 181, Chief Sustainability Officer (CSO), 82–88, 90,
184–186, 189, 194, 229, 230, 232, 239, 92, 100
242, 251 Classification, 6, 56, 81, 88, 90, 91, 93, 141,
Association, 31, 83, 106, 144, 156, 173, 184, 202, 213, 257
240

Theory and Application, https://doi.org/10.1007/978-981-32-9588-9
266 Index
Commission, 30, 47–49, 51, 63, 83, 143, 157, Degree, 25, 26, 32, 90, 120, 142, 163, 209,
210, 241, 251 219, 228
Commitment, 4, 21, 37, 82, 83, 85, 86, 99, 100, Demonstrate, 17, 21, 35, 82, 143, 166, 194,
105, 146, 156, 160, 177, 180, 230, 238, 200–202, 236
239, 241 Department, 3, 88, 94–96, 162, 178, 201, 238,
Committee, 6, 7, 83, 84, 88, 92, 93, 96, 97, 99, 250
181, 240, 242 Deposit, 156, 193–197, 200–202, 204
Company, 3–8, 14, 16–19, 21, 22, 25–28, 30, Destroy, 83
32–35, 41, 51, 73, 75, 81–100, 107, Destruction, 82, 83
128, 141–145, 147, 148, 153–157, 175, Development, 5, 7, 8, 13–15, 17–19, 21, 25,
185, 208, 212, 213, 238, 241, 243 27–29, 33, 34, 45–49, 51, 54, 56,
Compliance, 19, 81, 83, 85–88, 90, 92, 94, 98, 61–72, 75, 76, 85, 88, 92, 94, 95, 97, 98,
99, 145, 175 105, 141–143, 145–148, 154–157, 159,
Concern, 13, 35, 84–86, 88, 143, 145, 173, 160, 168, 169, 173, 174, 176, 177, 180,
181, 218, 229, 230 183–187, 193–196, 198, 199, 202, 203,
Conclusion, 229 211, 217, 221, 223, 225, 226, 229–234,
Conduct, 81–85, 87, 93, 98, 103, 154, 234 237–244, 249–252, 254, 255, 257, 261
Conflict, 55, 82, 106, 126, 163, 168, 186, 217, Directors, 84, 85, 87, 90, 92, 94–98, 144, 161
219, 223, 232 Disclosure, 5–7, 53, 54, 83, 103, 106, 107, 115,
Connection, 27, 33, 83, 173, 241 121, 128, 143, 175
Consequence, 3, 45, 56, 82, 161, 174, 184, Driven away, 82
229, 256, 259 Duties, 82, 98, 99, 103, 120, 163, 196, 233
Content analysis, 81, 88–90
Contribution, 17, 19, 27, 28, 33, 41, 45, 46, 61, E
62, 82, 141, 142, 155, 157, 173, 174, Educate, 82, 241
226–228, 230, 232, 236, 242, 243, 250, Education, 4, 17–19, 21, 29, 30, 32, 48, 49, 64,
252, 254–256 92, 97, 107–109, 115, 121, 123–128,
Corporate, 6, 7, 14, 15, 17, 21, 22, 45, 49–57, 130–132, 134, 141–143, 145, 146, 148,
82, 84, 85, 87, 89, 94, 95, 141–146, 156, 152–155, 157, 160, 161, 168, 176, 178,
185, 186, 193, 204, 238, 240–243 184, 186, 199, 208, 210, 221, 225, 235,
Corporate governance, 3, 4, 6, 7, 45, 50, 55, 236, 239, 240, 242, 244, 254, 260
82, 84, 85, 144, 145 Educational, 81, 93, 115, 148, 168, 173, 180,
Corporate social responsibility, 3, 45, 50–53, 181, 208, 221
57, 94, 96, 141–145, 147, 157 Effectively, 17, 20, 52, 83, 85, 200, 207, 221,
223, 239, 261
D Effectiveness, 21, 28, 33, 35, 81, 84, 144, 147
Damage, 7, 8, 15, 50, 76, 82, 83, 220 Efficiency, 7, 26, 28, 29, 33, 55, 63, 66, 76, 77,
Data, 30, 31, 55, 73–77, 87–89, 92, 93, 97–99, 83, 86–88, 90, 92, 98, 99, 142, 146, 154,
142, 148, 165, 166, 168, 170, 181, 184, 168, 181, 231, 234
189, 196, 199, 200, 202, 208, 210, 213, Effort, 6, 13–15, 21, 85–87, 98, 105, 144, 153,
215, 217, 221, 222, 225, 229, 234, 235, 155, 156, 174, 175, 218, 230, 241, 242,
244, 253, 255–257, 259 250, 252, 255, 261
Decision, 5–7, 34, 35, 37, 38, 40, 41, 46, Electronic, 30, 69, 70, 81, 88
49–52, 56, 75, 77, 87, 88, 90, 98, 100, Emission, 3–5, 8, 28, 33, 63, 71, 73, 82, 83,
104, 115, 121, 126, 158, 163, 168, 169, 153, 154
174, 178, 180, 181, 212, 228, 229, 231, Employee, 8, 19, 35–37, 45, 49, 53, 54, 87, 88,
240, 245 92, 97, 103–108, 114, 115, 120–134,
Decrease, 37, 46, 51, 74, 99, 148–150, 152, 146, 151, 154, 156, 175, 178, 202, 210,
153, 158, 173, 186, 189, 194, 198, 200, 214, 233, 241, 242, 256
202, 217, 233, 234, 250, 254, 255 Engage, 16, 20, 71, 81, 85, 86, 98, 99, 169
Decree, 83 Entrepreneurship, 21, 180, 181, 225–228,
Deforestation, 4, 8, 82 232–235, 237–239, 241–244
Index 267
Environment, 4, 8, 13–15, 19, 26–28, 33, Framework, 4, 21, 34, 38, 41, 63, 81, 90, 92,
46–53, 56, 63, 71, 75, 77, 84, 86, 89, 108, 141–143, 155, 180, 184, 186, 213,
93–96, 106, 144, 146, 154, 156, 163, 229, 230, 239, 244, 245
173, 185, 196, 198, 204, 209, 219–221, Function, 27, 28, 33, 56, 64, 75, 81, 84, 94, 95,
228, 237, 239, 243, 244, 249, 254 106, 145, 194, 196, 204, 207
Environmental, 3–8, 14–16, 19, 26–28, 33, Fundamental, 6, 29, 34, 62, 66, 77, 85, 88,
45–49, 51–56, 62, 65, 71, 74, 82–86, 159–161, 163, 177, 185, 228, 230, 231,
89, 99, 106, 143, 145, 146, 153, 156, 236, 239, 244
230, 239, 250, 251
Environmental committee, 82–85 G
Establishment, 83, 144, 157, 168, 227, 252, Gender, 64, 108, 109, 122, 129, 159–163, 168,
258 173–175, 177–181, 183–186, 207–217,
European, 26, 28, 33, 82, 143, 156, 157, 160, 221, 222, 225, 227–234, 237–244, 257,
163, 180, 210, 241, 250 261
Executive, 6, 8, 30, 84, 106, 114, 208 Gender and Development (GaD), 231, 232
Experience, 25, 32, 36, 66, 76, 81, 83, 93, 105, Gender inequality, 173, 184–186, 189, 208,
115, 143, 163, 186, 194, 196, 197, 218, 243, 255
225, 229, 234, 236, 244 Gender inequality index, 174, 184, 186, 188
Expertise, 85, 120, 238 Governance, 3, 5, 6, 17, 21, 37, 62, 82, 84, 85,
Exploration, 82 98
External, 6, 7, 52, 56, 84–86, 88, 92, 94, 97, Great depression, The, 193
106, 112, 113, 115, 121, 128–130, 132, Green, 27, 28, 33, 34, 62, 71, 76, 87, 154, 251
134, 153, 175, 199, 200, 236, 250 Green House Gas (GHG), 8, 82, 83
External debt, 200
Extinct, 82 H
Halkbank, 196, 203
F Hierarchy, 81, 82, 84, 85, 87, 88, 90, 93, 98
Factor, 4, 28, 30–33, 49–51, 54, 62, 71, 77, 87, Hire, 81
100, 104–106, 108, 111–113, 116, 155, Hope, 82, 223
159, 160, 168, 186, 194, 199–202, 217,
218, 220, 226, 228, 234, 241, 242, 250, I
251 Illustration, 5
Failure, 4, 74, 82, 164, 194, 230, 231 IMF, 184, 200
Fault, 82 Impact, 4, 5, 17–21, 26–28, 41, 53, 54, 83, 87,
Financial system, 143, 193, 194, 198, 201, 204 88, 100, 142, 143, 145–152, 157, 160,
Firm, 4, 14, 15, 50, 55, 56, 73, 77, 82–85, 106, 162, 167–169, 207, 208, 214, 219, 220,
141, 175, 193, 204, 208, 226, 229, 233, 229, 232–235, 237, 244, 252, 254–256
234, 239, 243, 244 Importance, 25, 26, 34, 41, 45–47, 50, 51, 53,
First, 15, 17, 27, 30, 39, 45, 47, 49, 51, 53, 55, 54, 61, 62, 73, 83, 85, 99, 126, 141, 143,
56, 61–73, 82, 87, 89, 104, 106, 107, 161, 174, 176, 193, 200, 210, 229, 249,
110, 126, 144, 145, 153, 155, 156, 160, 250, 255
164, 173, 175–177, 179, 184, 194, 208, Income, 28, 33, 71, 77, 82, 147, 174, 181, 183,
213, 221, 226, 227, 229, 230, 232, 234, 193, 196, 199, 204, 221, 226, 231, 233,
236, 249, 250 234, 236, 243, 244, 250, 252, 256, 260,
Foreign, 15, 82, 179, 195, 196, 199–203 261
Forest, 15, 48, 63, 82, 230 Increase, 3, 4, 26, 34, 41, 46, 48, 50–53, 56, 62,
Formal, 87, 106, 111, 113, 115, 121, 129, 131, 69, 74, 77, 82, 103, 115, 121, 126, 145,
133, 134, 181, 234 148–152, 154, 158, 162, 167, 170, 173,
Forms, 53, 81, 88, 142, 145, 161, 163, 183, 178–180, 183, 185, 186, 194, 196,
228 198–202, 204, 208, 213, 231, 236, 240,
244, 249, 250, 252, 255, 256, 261
268 Index
Indicator, 26, 27, 33–35, 48, 56, 84, 142, 144, Level, 6, 8, 14, 15, 17, 18, 21, 26, 27, 32,
147, 174, 177, 178, 183–185, 196, 208, 37–39, 49, 55, 56, 62, 82, 84, 85, 88, 90,
213, 214, 221, 242, 255, 257 93–96, 98, 99, 104, 105, 110, 115, 121,
Indigenous, 82, 238 123, 124, 126–128, 130–132, 141–146,
Indonesia, 3, 81, 89 148, 149, 152, 156, 157, 160, 161, 163,
Indonesia Sustainable Palm Oil (ISPO), 81, 83, 165, 167, 168, 174, 181, 183, 185, 194,
85, 94, 96, 98, 99 197, 210, 219, 221, 223, 229, 231, 233,
Issue(s), 3–8, 16, 17, 28, 31, 36, 45, 49, 51, 234, 236, 237, 239, 241, 243–245, 249,
53–57, 82, 91, 92, 97, 98, 99, 102, 143, 257, 258–260
145, 161–165, 168, 174, 175, 189, 207, Listed, 7, 16, 17, 81, 88, 174, 212–214
218, 224, 227–229, 231, 237–239, 242, London Sumatra (LSIP), 82, 89, 93, 95–97
250 Long-term, 4, 17, 19, 37–39, 49, 86, 144, 148,
Industrial, 3, 15, 18, 61–66, 70, 71, 74, 75, 77, 193, 196, 198, 199, 204, 243, 255
88, 144, 155, 157, 211, 235, 239
Industries, 4, 15, 17, 30, 70, 72, 81–83, 99, M
125, 126, 179, 211 Mail, 30, 81, 88, 165
Industry 1.0, 61, 63–67 Majority, 17, 32, 81, 82, 99, 106, 115, 120, 210
Industry 2.0, 63, 66, 68, 70 Manage, 5, 19, 48, 52, 82, 84, 85, 146, 193,
Industry 3.0, 63, 70–72 204, 234, 244
Industry 4.0, 61, 63, 73, 74, 76, 77 Management, 3, 5–8, 16, 18, 19, 26, 27, 29, 32,
Industry Revolutions, 3, 61–66, 70, 71 34, 38, 41, 46, 47, 50–52, 54, 56, 63, 73,
Information, 5–7, 25, 28, 30, 32, 33, 36, 37, 84, 85, 89, 92–97, 99, 103, 115, 120,
45–47, 49, 53–56, 66, 70, 75, 76, 89, 90, 121, 126, 128, 144, 145, 147, 153, 156,
93–95, 105, 106, 121, 141–143, 147, 163, 173, 179, 181, 186, 203, 207, 213,
158, 165, 166, 168–170, 194, 203, 225, 217, 230, 233, 240, 243
229, 230, 236, 240, 241, 250, 251 Manager, 6, 32, 34, 36, 46, 51, 82, 84, 85, 94,
Initiative, 16, 18, 19, 29, 55, 86, 87, 144, 145, 95, 104, 106, 115, 145, 147, 154, 181,
153–155, 157, 161, 173, 176, 185, 189, 213, 216, 217, 243
210, 218, 238, 240, 241 Mark, 90, 91
Innovation, 21, 26, 28, 32, 55, 63, 64, 66, 83, Marketplace, 86, 238
86, 88, 90, 98, 99, 147, 194, 198, 226, Material, 4, 5, 8, 21, 26, 28–30, 33, 35–37, 45,
227, 234–236, 242, 244 62, 66, 74–77, 87, 92, 97, 98, 146, 155,
Integrated, 6, 7, 18, 19, 21, 53, 55, 56, 69, 70, 156, 160, 165, 169, 231, 238
75, 88, 231 Measurement, 31, 86, 119, 144, 145, 174, 199
Interest rate, 193, 197, 200, 201 Mechanisms, 62, 77, 82, 84, 85, 121, 160, 161,
Internal, 6, 28, 31, 33, 67–70, 73, 85, 94, 106, 181, 201
110, 112, 113, 115, 121, 126, 128–130, Method, 7, 26, 29–31, 56, 62, 68, 73, 81, 84,
134, 145, 163, 175, 220 90, 91, 128, 141, 142, 165, 170, 177,
Interview, 90, 100, 165, 166 240, 249, 251, 255–257
Izmir Economic Congress, 194 Methodology, 27, 29, 35, 88, 107, 165, 170,
216, 217, 219
J Middle, 85, 93–96, 109, 123, 127, 130–132,
Job, 35, 87, 115, 128, 145, 149, 157, 180, 181, 150, 157, 176, 213, 234, 236, 243, 244
208, 216, 226, 227, 234, 242, 250, 252, Middle management level, 81, 82, 84, 87, 93
261 Ministry, 15, 83, 125, 155
Model, 17–21, 26, 27, 29–31, 33, 34, 37, 41,
L 48, 50, 55, 68, 73–75, 84, 90, 105,
Land, 3, 4, 8, 82, 225, 233 108–110, 114, 119, 121, 122, 144, 145,
Lean construction, 25–35, 38, 39, 41 153, 158, 169, 199, 210, 255, 259, 260
Lean management, 25–27, 30, 32, 33, 41 Modification, 90
Legal, 55, 81, 85, 99, 103, 156, 160–163, 165,
167, 169, 203, 227, 245 N
Legitimacy, 85, 86 Names, 17, 32, 82, 84, 87, 89, 93, 94, 96, 98,
169, 227, 258
Index 269
O 169, 174–176, 193, 198, 231, 236, 244,

Obligation, 85, 114, 145, 197 256, 260
OECD, 21, 200, 226, 240, 242, 243, 251 Procedure, 35, 36, 84, 115, 126, 147, 153, 164,
Officer, 82, 84, 85, 93, 95, 98–100, 167 167, 168
Operation, 8, 15, 17–20, 32, 36, 49, 52, 53, 56, Production lines, 75, 82, 85
74, 75, 84–86, 95, 96, 99, 106, 143, 145, Productivity, 26, 30, 41, 48, 51, 69, 74, 103,
175, 178, 185, 201, 238 154, 198, 226, 231, 236, 243, 244
Opportunity, 5, 21, 28, 33, 41, 47, 48, 50, 54, Program, 14, 18, 19, 21, 29, 46, 62, 76, 86, 92,
57, 71, 74–77, 86, 105, 148, 166, 170, 98, 146, 155, 180, 226, 229–231,
174, 181, 185, 204, 208, 227–231, 233, 235–237, 239–241, 244
238, 240, 250, 252, 261 Protection, 13, 15, 48, 49, 51, 86, 146,
Organization, 4, 5, 14, 29, 30, 34, 49, 55, 62, 153–156, 163, 173, 200, 230, 238, 240
70, 76, 82, 84–88, 90, 92, 97–99, 103, Public banks, 176, 193, 194, 196–204
104, 106, 114, 115, 126, 142, 144, 146,
147, 155, 164, 175–178, 185, 186, 196, Q
204, 207, 213, 216, 218, 219, 222, 223, Quality, 16, 27–30, 32–34, 36–38, 45, 47, 51,
226, 236–242, 244 56, 74–77, 86, 90, 146, 156, 174, 184,
Organization structure, 87, 89, 98 202, 226, 239, 243, 250
Questionnaire, 27, 30, 31, 89, 90, 96, 98, 166,
P 167, 169
Palm oil, 81–85, 88–90, 92–94, 97–99
Panel causality, 249, 257–261 R
Panel unit root test, 258 Rainforest, 82, 83
People, 4, 6, 17–21, 35, 38, 39, 48, 52, 62, 63, Rate of total employment, 258, 261
65, 73, 75, 77, 82, 83, 87, 95, 128, 146, Rate of total women employment, 258, 259,
148, 150, 153, 156, 157, 159, 180, 194, 261
202, 204, 207–209, 217, 218, 223, 226, Reason, 46, 54, 55, 64, 73, 85, 103, 160, 163,
232, 234, 236, 238, 252–254, 256, 258, 165, 168, 173, 194, 199, 200, 249, 250
261 Region, 19, 27, 54, 82, 95, 107, 141, 142,
Percentage, 31, 34, 90, 99, 178, 181, 208, 211, 146–153, 155, 157, 168, 170, 174, 175,
213, 214, 234 178, 183, 215, 234, 243, 250–254, 260,
Performance, 16, 27, 33, 34, 46, 48, 50–54, 56, 261
57, 83, 86, 141, 142, 185, 208, 215, 229, Regional level 2, 141, 142, 156, 257
243 Regulation, 4, 8, 15, 54, 73, 83, 85, 88, 99,
Person, 29, 35, 67, 82, 87, 91, 92, 95, 98, 106, 104, 106, 143, 147, 177, 178, 185, 208
147, 160, 163, 167, 177, 198, 203, 217, Regulator, 160
218, 228, 232, 238 Relation, 16, 37, 46, 47, 52, 53, 55, 83–85, 87,
Philanthropic, 98 88, 92–98, 110, 126, 144, 145, 159,
Planet, 21, 63, 82, 185, 226, 236, 245 160, 162, 164, 183, 228, 230, 231, 249
Plantation, 83, 88–90, 92, 94 Relevance, 5, 147, 161, 162, 168, 229, 255
Policy, 5, 8, 15, 16, 22, 35, 47, 85, 98, 99, 115, Report, 3, 5, 6, 8, 14, 45–47, 49–56, 62, 63,
143, 147, 153, 155, 156, 174, 180, 185, 81–83, 87–89, 98, 107, 126, 144, 164,
186, 193, 198, 200, 203, 204, 221, 225, 173, 175, 177–181, 186, 208, 210, 212,
226, 229–232, 237–242, 244, 249, 254, 215, 226, 232, 233, 237, 242–244, 249,
261 251, 252
Practice, 4, 6, 14–17, 21, 25–35, 38, 41, 49–51, Reporting, 4–7, 30, 46, 53–56, 84, 87, 88, 92,
56, 71, 76, 86, 98, 106, 141–145, 147, 97, 98, 107, 145, 175, 185, 238
153, 157, 159, 161, 164, 165, 167–169, Requirement, 29, 35, 36, 53, 81, 92, 99, 143,
175, 201, 216–219, 225, 232, 238, 239, 145, 156, 168, 202, 227
241, 243 Resolution, 82, 163, 164, 237
Presences, 83 Resources, 6, 13, 14, 16, 17, 19, 21, 26, 29, 34,
Problems, 3, 6, 7, 14, 35, 36, 38, 39, 45, 46, 51, 37, 41, 46–49, 52, 55, 57, 61, 62, 64, 71,
54, 63, 75, 82–85, 99, 147, 160, 164, 74, 77, 84, 88, 89, 96, 146, 147, 153,
270 Index
168, 170, 179, 180, 198, 202, 221, 226, Stage, 56, 81, 83, 86–88, 90–93, 98–100, 160,
230, 231, 237, 244, 261 181, 225, 233, 234, 240, 244
Respondent, 25, 30, 32, 34, 41, 86, 164–167, Stakeholder, 4, 5, 19–21, 46, 47, 49, 51–55,
169, 170 84–86, 88, 92, 96–98, 143, 145, 146,
Response, 4, 25, 30, 41, 90, 96, 98, 143, 167, 175, 185, 229, 237, 238, 241, 242
217, 219, 230–232, 237, 241, 242 Standardization, 85
Responsibility, 13, 17, 21, 22, 34, 45, 50–53, Step, 30, 47, 62, 68, 71, 81, 90, 142, 144, 154,
85–89, 92, 94–96, 98, 104, 105, 114, 165, 169, 173, 194, 198, 204, 223, 229
141–143, 145–147, 157, 186, 225, 228, Stock, 16, 17, 37, 56, 81, 88, 175, 201
232, 233, 237 Strategy, 5–7, 14, 19, 21, 25, 28, 29, 33,
Result, 4, 8, 15, 16, 19, 25–30, 32, 47, 50, 51, 38–41, 49, 50, 63, 74, 82, 84–88, 92,
56, 63, 66, 71, 73, 83, 93, 99, 105, 110, 97–99, 143–145, 147, 153, 157, 179,
115, 116, 119, 121–123, 125–127, 129, 180, 185, 200, 201, 218, 229–231, 236,
130, 141, 144, 149, 150, 152–155, 157, 242, 251
161, 165, 167, 169, 170, 173, 175, 186, Structure, 6, 18, 29, 31, 32, 34, 48, 53–55, 65,
197–199, 202–204, 215, 217–219, 231, 66, 70, 71, 77, 82–85, 88, 89, 93, 98,
234, 238, 239, 242, 244, 252, 255, 256, 104, 126, 147, 166, 193, 200–202, 204,
258–261 226, 227, 250
Role, 4, 7, 16, 17, 54, 56, 81–90, 92, 93, Study, 5, 6, 13, 14, 16, 21, 25–30, 32–34, 39,
96–100, 104, 141, 142, 144, 157, 160, 41, 45, 46, 56, 81, 83–86, 88, 89, 100,
162, 176, 198, 204, 210, 216, 217, 223, 103–105, 108, 109, 120, 123, 124, 127,
225, 226, 228, 229, 231, 232, 237, 240, 128, 130–132, 141, 160–165, 169, 170,
242, 256, 261 173, 175, 185, 199, 210, 216, 217, 219,
Roundtable on Sustainable Palm Oil (RSPO), 223, 225, 228, 229, 231–234, 236,
81, 85, 98, 99 242–244, 249, 251, 254–257, 261
Run, 18, 21, 27, 39, 46, 48, 49, 73, 82, 189, Subjectivity, 90
225, 233 Subordinate, 90
Subregions, 249, 252–255, 257–259, 261
S Survey, 16, 30, 41, 81, 88, 108, 125, 142,
Safety, 17, 19, 21, 35–37, 45, 84, 94–96, 106, 164–167, 169, 184, 216, 219, 221
126, 146, 156, 227 Sustainability, 3, 7, 8, 13–15, 17, 19, 21, 22,
Score, 32, 81, 90, 92, 93, 97, 177, 208, 216, 25–30, 32–34, 38, 39, 41, 45–57,
217, 219 61–64, 71, 74, 77, 81–100, 143, 157,
SGRO, 89, 93, 95, 97 175, 185, 193, 204, 230, 238, 239, 243,
SIMP, 89, 93, 95, 97 250, 251
Small-scale enterprise (MSE) sector, 232 Sustainability governance structure, 82, 84–86
SMAR, 89, 93, 96–98 Sustainability Officer (SO), 81–90, 92–99
Social, 3, 15–17, 19, 21, 26, 28, 45–56, 62, 63, Sustainability-oriented strategy, 82
65, 66, 73, 82, 83, 85, 86, 89, 93–96, 99, Sustainability practice, 82, 83
103–105, 125, 141–148, 150, 151, 153, Sustainability Report (SR), 89–96, 98, 99
155–157, 160, 163, 164, 168, 170, 173, Sustainability stages, 82, 86, 87
174, 177, 180, 181, 183, 207, 208, 218, Sustainable, 16, 18, 19, 21, 26–28, 33, 51, 56,
219, 223, 227–231, 236–238, 240, 250, 63, 76, 81, 83, 85, 103, 143–145, 154,
251, 260, 261 156, 174, 175, 193, 194, 200, 204, 226,
Solve, 35, 83 227, 230, 231, 239, 250, 251
Source, 13, 28, 64, 65, 67, 69, 72, 88, 92, 97, Sustainable business, 16, 99, 175
99, 148, 154, 165, 184, 186, 195, 199, Sustainable development, 4, 13–21, 26, 45,
200, 203, 204, 226, 231, 243, 250, 254, 47–49, 51–53, 56, 62, 63, 71, 141–145,
258 157, 225–228, 231, 236, 239, 242, 250,
Species, 82 251
SSMS, 89, 93, 96–98 Sustainable development goals, 4, 62–64, 99,
Staff, 3, 7, 32, 36, 37, 85, 87, 91, 146, 154, 185, 237, 250
168, 199, 203 Sustainable economic development, 175,
249–251, 255, 257, 261
Index 271
Symbol, 66, 68, 90 Turkey, 3, 46, 54, 56, 73, 108, 174–176, 181,
System, 6, 7, 13, 19, 27–29, 37–39, 65, 68, 69, 185, 187, 188, 193–196, 199, 200,
71–76, 86, 94, 105, 106, 143, 144, 148, 202–204, 208, 241, 249–261
153, 164, 174, 178, 181, 183, 194, 196,
199, 201, 227, 237, 239, 240 U
UNSP, 89, 93, 96, 97
T
Table, 33, 89–91, 93, 98, 165, 166, 177, 194, V
196, 231, 243, 257–259 Vakıfbank, 196, 203
Target, 5, 34, 50, 71, 83, 86, 143, 178, 179, Value, 17, 19–21, 27, 28, 31, 33, 35, 38,
181, 208, 210, 226–228, 249 48–50, 54, 66, 68, 73, 77, 86, 110, 121,
Task, 5–7, 36, 38, 39, 87, 88, 120, 141, 196, 145, 147, 148, 155, 156, 160, 174, 185,
216 186, 199, 207, 217–219, 221, 223, 230,
Team, 31, 35–37, 62, 69, 82, 84, 93–96, 103 232, 233, 236, 241, 250, 251, 255, 257,
Technique, 27, 28, 31, 33, 34, 38, 39, 41, 67, 259, 260
71, 74, 75, 90, 183, 220, 221, 231, 236, Voluntarily, 55, 87, 105, 164
251
Term, 21, 27, 30, 31, 37, 47–49, 51, 52, 63, 70, W
76, 84, 115, 126, 143, 147, 157, Waste, 19, 26–29, 33–36, 41, 45, 48, 74, 106
159–163, 166, 167, 169, 170, 179, 193, Waste reduction, 28, 33, 88
194, 196, 198, 200, 204, 217, 228, 231, Wealth fund, 196, 203
233, 243, 250, 251, 255, 257 Women, 3, 18, 21, 64, 71, 159–170, 173–181,
Title, 84, 85, 87–90, 92, 94, 96–98, 178, 257 183–186, 189, 207–223, 225–245, 250,
Top, 8, 46, 70, 71, 76, 82, 84, 85, 87, 94–96, 253–256, 258, 261
115, 121, 154, 179, 211, 216, 217, 221, Women entrepreneurship, 178, 232, 233, 235,
233, 243 236, 242
Top management level, 81, 82, 93, 95, 96 Women in Development (WiD), 230–232
Total, 8, 27, 38, 39, 54, 90, 92, 97, 109, 115, Women rights, 174, 175, 177
147, 148, 154, 159, 165, 166, 175, 178, Word, 47, 50, 72, 81, 87, 90, 98, 99, 215, 223,
180, 196, 200, 233, 249, 253, 257, 258 228, 234, 250, 256
Total employment, 54, 211, 249, 250, Work, 14, 17, 18, 27, 28, 31, 32, 35–37, 49, 51,
254–259, 261 63, 65, 68, 71, 75, 76, 81, 83, 93, 98,
Total number of tourist arrivals, 258 106, 126, 145, 154–156, 161, 165, 168,
Total women employment, 257–261 169, 173, 174, 176, 179, 181, 185, 186,
Tourism, 47, 73, 249–259, 261 207, 210, 211, 213–216, 218, 219, 221,
Trend, 31, 82, 86, 96, 142, 143, 160, 180, 227, 228, 230, 232, 233, 235, 238–240,
209–211, 215, 221, 251 242
Triangulation, 90, 92
TSI, 200 Z
Ziraat bank, 196, 203

New Approaches To CSR

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

New Approaches To CSR

Uploaded by

Copyright:

Available Formats

Accounting, Finance, Sustainability, Governance & Fraud:

Theory and Application

Kıymet Tunca Çalıyurt Editor

More information about this series at http://www.springer.com/series/13615

New Approaches to CSR,

ISSN 2509-7873 ISSN 2509-7881 (electronic)

Kıymet Tunca Çalıyurt, CFE, CPA

Part II New Approaches in Sustainability

Part III New Approaches in CSR

9 Property Inheritance by Women in Kosovo . . . . . . . . . . . . . . . . . . 159

About the Editor

She is member in editorial board Social Responsibility Journal, Journal of Financial

Nikolay Sterev University of National and World Economy, Soﬁa, Bulgaria

Fig. 2.1 Sustainable developmentmodel. Source http://

Fig. 8.7 Rate of net migration by regions at NUTS 2

Table 3.1 Integration between lean and sustainability in construction

Table 7.10 Mann–Whitney U test result for sub-dimensions of leadership

Kıymet Tunca Çalıyurt

© Springer Nature Singapore Pte Ltd. 2020 3

essential second factor is a change in land use, especially deforestation. The

good TCFD reporting for IFRS 7: Financial Instruments: Information, IFRS 9:

Difﬁcult but the most important part is to convince management to include

Australian Academy of Science. (2019). What is Climate Change? https://www.science.org.au/

Renu Jatana and Mehjabeen Barodawala

Economic growth, development and sustainability along with growing population

© Springer Nature Singapore Pte Ltd. 2020 13

2.2 Sustainable Development in Indian Context

(Mohan 2001; Ruud 2002), Sustainable Development research with academic

2.2.1 Influence of the Indian Economic Reforms

2.2.2 MNCs and Sustainable Development in India

2.3 Vedanta and Sustainable Development

Vedanta Resources PLC is a London Stock Exchange listed, globally diversiﬁed

2.3.1 Company’s Brief History

2.3.2 Company’s Vision and Core Values

Vedanta is a globally diversiﬁed natural resources company with low-cost opera-

2.3.3 Sustainable Development and Community

Fig. 2.1 Sustainable developmentmodel. Source http://sustainabledevelopment.vedantaresources.

• Building Strong Relationships

of Sustainability, devising new policies and effective implementation is inevitable

Alberto Eduardo Besser Freitag, Osvaldo L. G. Quelhas,

Abstract The purpose of this paper is the development of a conceptual framework

Keywords Lean management Lean construction Waste reduction

A. E. B. Freitag (&) O. L. G. Quelhas S. L. B. França M. J. Meiriño

© Springer Nature Singapore Pte Ltd. 2020 25

3.2 Literature Review

applying a complete Function Analysis System Technique (FAST) diagram as

Currently, most management approaches from engineering are focused on the

To facilitate the discussion of characteristics of mixed design researches, case of

with a qualitative phase (qual) followed by a quantitative (QUAN), in six steps,

6. Interpretation—a ranking of 35 lean construction practices was produced, cal-

3.4 QUAN Data Analysis

3.5 Results and Discussion

Table 3.1 (continued)

Ranking of lean construction practices

Table 3.2 Ranking of lean construction practices

Table 3.2 (continued)

Table 3.2 (continued)

II. Eliminate troubled relationships and strengthen relations of cooperation and

Limitations of This Study

Andújar-Montoya, M. D., Gilart-Iglesias, V., Montoyo, A., & Marcos-Jorquera, D. (2015).

Osvaldo L. G. Quelhas is Professor of Fluminense Federal University (UFF), President of

Zeynep Şahin and Fikret Çankaya

Z. Şahin (&) F. Çankaya