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Academic Conferences Association, Zs.
ISBN: 978–80–88085–05–8
PROCEEDINGS OF
The 6th MAC 2016
º º
Nier NAT on A conf = F = N ce.
19°-20" February, 2016
Editors
Jiri Vopava, Czech Republic
Czech Technical University Vladimir Douda, Ph.D., Czech Republic
in Prague Radek Kratochvil, Czech Republic
Mario Konecki, Ph.D., Croatia
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Proceedings of The 6th MAC 2016
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February 19th - 20th 2016 in Prague
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Vladimir Douda, Ph.D., Czech Republic
Radek Kratochvil, Czech Republic
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Doc. PhDr. Mária Jánešová, CSc.
Prof. Otto Pastor, Ph.D., Czech Republic
Ass. Prof. Vit Fabera, Ph.D., Czech Republic
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ISBN
978-80-88085-05-8
i
Table of Contents
CHRYSOULA D. HADJICHRISTOU; UGORJII. OGBONNAYA

USING THE LAKATOSIAN HEURISTIC TEACHING METHOD TO FOSTER GRADE 11 STUDENTS’
MATHEMATICAL MODELING SKILLS ...................................................................................................1
WOJCIECH GŁÓD
EMPLOYEE PROFESSIONAL DEVELOPMENT IN HEALTHCARE ENTITIES – EMPIRICAL RESEARCH
RESULTS ..........................................................................................................................................14
ANZELIKA SMAGINA
ENTREPRENEURSHIP AND ENTREPRENERIAL OPPORTUNITIES. CONCEPTUAL FRAMEWORK. ..............22
SUTUMA EDESSA
IMPACTS OF INSUFFICIENT INSTRUCTIONAL MATERIALS AND HIGHER EDUCATION SYSTEMS:THE
CASE OFTEACHING BIOLOGY............................................................................................................33
BULAMA KAGU; AYUBA A. AMINU; IBRAHIMABUBAKAR NJODI

ARE TERTIARY INSTITUTIONS CORRUPT FREE?..................................................................................48
PENSRI AMORNSINLAPHACHAI
THE RESULT OF COOPERATIVE LEARNING THROUGH WEBUTILIZING DATA MINING TECHNIQUE TO
GROUPLEARNERS............................................................................................................................55
KWANJAI DEEJRING
THE DESIGN OF KNOWLEDGE MANAGEMENT TO DEVELOP CREATIVE THINKING FOR HIGHER
EDUCATION WITH PROJECT BASE LEARNING.....................................................................................63
HSUEH CHEN-HUA
HOW ELEMENTARY STUDENTS OF ENGLISH IN THE UNIVERSITY ARE CONSTRUCTED: THOUGHTS
UPON ENGLISH TEACHING FROM MADNESS AND CIVILIZATION ........................................................71
DANLADI MOHAMMED UMARU ; UMAR BELLO OBEN'; GRACE CHINELO OBELEAGU NZELIBE
ENTREPRENEURIAL ORIENTATION, ACCESS TO DEBT FINANCE AND THE PERFORMANCE OF SMALL
AND MEDIUM ENTERPRISES IN NIGERIA...........................................................................................77
ii
S.R.SANTHANAM
TEACHING PERFECT SQUARES AND THEIR PROPERTIES TO GIFTED CHILDREN – A CLASSROOM
EXPERIENCE.....................................................................................................................................95
VESSELA V. WARREN; BARRY J. DAVIES

EXPLORING SERVICE INNOVATION PROCESS IN A SMALL BUSINESS SERVICES FIRM .........................103
TEODOR DIMITROV BEROV

INITIAL SOLUTIONS FORVRPTW BY TAKING INTO ACCOUNT THE TIME WINDOWS ..........................111
MAHA MAJEED ANBER

TRAINING PROGRAM ON SPELLING STRATEGIES FOR IN- SERVICE TEACHERS................................... 117
NATTACHET POONCHAROEN
MARKETING KNOWLEDGE CREATION MODEL OF SMES IN AGRICULTURAL PROCESSING INDUSTRY
IN PHETCHABUN, THAILAND..........................................................................................................135
ETLEVA BAJRAMI; LLESH LLESHAJ

THEAVERAGE SALARY, PERSONAL INCOME TAXAND THEIR RELATION-CASE OF ALBANIA...............143
KATARZYNA WITASIAK
EDUCATIONAL FUNCTION OF ARCHETYPICAL FORMS IN THE ARCHITECTURE OF MUSEUMS.............151
KAROL WYSZNACKI
ARCHITECTURE IN SCIENCE FICTION-MOVIES AS A TOOL FOR IMPROVING AESTHETIC SENSITIVITY
OF THE YOUTH...............................................................................................................................154
JONADA TAFA
GDP GROWTH RATE AND ITS DETERMINANTS, CASE OF ALBANIA....................................................157
FA-EZAH WASOH
EXPLORING THE ROLES OF BLENDED LEARNING AS AN APPROACH TO IMPROVE TEACHING AND
LEARNING ENGLISH........................................................................................................................165
MAIA SETURI
BRAND SUCCESS EVALUATION .......................................................................................................172
iii
MUHAMMADRORFEE-E MUSOR
THE ROLE OF ‘ADAT’ IN MALAY MUSLIM SOCIETY IN SOUTHERN BORDER PROVINCES OF THAILAND ....
......................................................................................................................................................182
BORDIN WAELATEH
THE COMPARISON OF PRONUNCIATION IN ENGLISH WITH THAI, MALAY AND ARABIC BY
MINORITY MALAY MUSLIMS IN THAILAND.....................................................................................187
ARTAN HAZIRI
THE MOST APPROPRIATE STRATEGY FOR CREATING ASTABLE LABOR MARKET IN KOSOVO.............202
MUNIRAH YAMIRUDENG
THAI VS. MALAY IDENTITY: THE CHALLENGE OF DIVERSITY IN SOUTHERN THAILAND.......................209
FAUZIAJABEEN; MARIOS I. KATSIOLOUDES; SAIGEETA KUKUNURU

GENDER PERCEPTIONS ON LOCALIZATION, EDUCATION AND IMPORTANT JOB ATTRIBUTES IN THE
UNITED ARAB EMIRATES................................................................................................................217
PAYAO LAKATEB
PRE-SERVICE TEACHERS’ PROFESSIONAL IDENTITIES IN FIELD EXPERIENCES: A CASE STUDY OF
PRINCE OF SONGKLA UNIVERSITY, THAILAND.................................................................................245
NUMAN HAYIMASAE
SECONDARY EDUCATION IN MALAYSIA: A STUDY ON THE CONCEPT OF “HERO” IN THE HISTORY
TEXTBOOK.....................................................................................................................................250
LABEAT MUSTAFA
CHALLENGES AND MANAGING OF SMALL AND MEDIUM ENTERPRISES IN KOSOVA .........................258
TRIANT FLOURIS; AYSE KUCUKYILMAZ; M. SAHIN DURAK; GOKHAN TANRIVERDI

LINKAGES BETWEEN RISK AND HUMAN RESOURCES MANAGEMENT IN AVIATION: AN EMPIRICAL
INVESTIGATION AND THE WAY FORWARD IN SELECTION OF IDEAL AIRPORT BUSINESS EXECUTIVE.......
......................................................................................................................................................268
SILVIA ZANAZZI
PASSIONS, TRADEOFFS, TRAPS AND WALLS: THE EXPERIENCE OF ITALIAN GRADUATES SEARCHING
FOR A PROFESSIONAL IDENTITY......................................................................................................280
iv
SYLWESTER BEJGER
TESTING FOR “EDGEWORTH CYCLES” IN POLISH WHOLESALE FUEL MARKET....................................288
NURSAHIDA USENG
WORK-INTEGRATED LEARNING APPROACH IN THE TEACHING OF HUMAN RESOURCE PLANNING,
RECRUITMENT AND SELECTION ......................................................................................................296
KUZMIN MIKHAILYUR’EVICH; KONOPAK IGOR ALEKSANDROVICH

THE PECULIARITIES OF RELATIONSHIP BETWEEN HARDINESS AND PROFESSIONAL IDENTITY OF
FUTURE EDUCATIONAL PSYCHOLOGISTS......................................................................................... 303
ISIL ARIKAN-SALTIK; PELIN ARSEZEN-OTAMIS

BUSINESS ANALYSIS AND SUSTAINABLE COMPETITION FOR SMALL FOOD & BEVERAGES
BUSINESSES IN FETHIYE..................................................................................................................308
MARISA JANKU
AN OVERVIEW OF INTERCULTURAL AND COMMUNICATIVE COMPETENCE IN TEACHING FOREIGN
LANGUAGE. CASE OF GERMAN LANGUAGE.....................................................................................315
DORINA KOÇI (JANKU)

TESTING INFLUENTIAL VARIABLES ON THE LIKELIHOOD OF FINANCIALLY CONSTRAINED FIRMS:
FIRM-LEVEL EVIDENCE FROM ALBANIA...........................................................................................321
RAFAŁ PARVI
FORECASTING CORRECTNESS OF INCURRING CREDIT WITH THE AID OF E.I. ALTMAN’S, J. GAJDKA’S
AND D. STOS’S DISCRIMINANT ANALYSIS MODELS ON THE EXAMPLE OF 200 STUDIED COMPANIES
FROM OPOLE AND ZACHODNIO-POMORSKIE PROVINCES...............................................................327
RAFAŁ PARVI
VALUATION OF SHARES AND THEIR FAIR VALUE OF THE COMPANIES LISTED ON THE FUEL SECTOR
QUOTED ON THE WARSAW STOCK EXCHANGE IN POLAND WITHIN 2007-2016 ...............................338
ABDULMENAF SEJDINI; ARMANDATOLA (KEQI)

THE PREDICTABILITY OF THE REVENUES AND THEIR IMPACT ON THE CENTRAL GOVERNANCE..........346
SONER TASLAK; PELIN ARSEZEN-OTAMIS; CEMAL ARTUN

EFFECT OF PATERNALIST LEADERSHIP AND HELPFUL LEADERSHIP BEHAVIOR ON EMPLOYEE
COMMITMENT: AKUT SAMPLE.......................................................................................................357
v
CITA EKANIJATI
THE SOCIO-ECONOMIC DETERMINANTS OF PUBLIC PARTICIPATION IN LAKE POLICY PROCESS: THE
CASE OF RAWA PENING LAKE PROGRAM IN INDONESIA..................................................................364
IVARS AVOTINS
IMPLEMENTATION AND DEVELOPMENT OF SAVING BONDS IN LATVIATILL THE END OF YEAR 2015......
......................................................................................................................................................372
PELIN ARSEZEN-OTAMIŞ; SÜMEYRA BABACAN

RELATIONSHIP BETWEEN STRATEGIC GOVERNANCE, BUSINESS COMPETITIVENESS AND
NETWORKING................................................................................................................................ 378
EMIRGENA NIKOLLI
EMIGRATION AND ITS CONSEQUENCES ON THE DEVELOPMENT OF WELFARE. CASE OF ALBANIA..........
......................................................................................................................................................382
NAFI XHAFA; MARSONA BEZHANI

IMMOVABLE PROPERTY MARKET IN ALBANIA: CHALLENGES AND PERSPECTIVES.............................393
JONIDA BALLIU
MEASURING CENTRAL BANK INDEPENDENCE. CASE OF ALBANIA.....................................................407
PELIN ARSEZEN-OTAMIŞ; SONER TASLAK

NOMADIC ORGANIZATION IN TOURISM .........................................................................................414
TEITLER REGEVSHARON; SHAHRABANI SHOSH

THE EFFECT OF NEGATIVE EMOTIONS ON THE WILLINGNESS TO PAY FOR AIRLINE TICKETS..............422
vi
Using the Lakatosian heuristic teaching method to foster grade 11 students’
mathematical modeling skills
Chrysoula D. Hadjichristou
Institute of Mathematics Science & Technology Education
University of South Africa
chrysoh@cytanet.com.cy
Ugorji I. Ogbonnaya
Department of Maths, Science & Technology Education
Tshwane University of Technology, South Africa
ogbonnayaui@tut.ac.za
Abstract
This study examines how the Lakatosian heuristic teaching method can be used to foster
students’ mathematical modeling skills by comparing the Lakatosian heuristic and the
Euclidean Geometry method. Two intact groups of Secondary school students the
experimental (98 students) and the control (100 students) groups were used in the study. The
experimental group was taught using the Lakatosian heuristic method to prove the Surface
Area of a Cone (SAC) while the control group was taught using the traditional Euclidean
method. Both groups were given a pre-post-, and a delayed test. Result shows that students
in the experimental group were able to demonstrate and appropriately use model eliciting
thinking and skills unlike the students in the control group. Students in the experimental
group, unlike the control group achieved higher order thinking skills, especially in the
analysis-synthesis level. They discovered 5 different heuristic approaches to prove the SAC,
as well as a model eliciting approach which was demonstrated by a low achieving student.
The implications of the findings for teaching and learning geometry are discussed. The
thought-experiment had changed even low achievers’ teaching concepts and behaviors that
focused on developing students’ ability to solve problems, regardless of their prior ability.
Keywords: Cypriot Secondary school, Lakatosian heuristics, Surface Area of a Cone.
Introduction
Mathematical modelling; the method of simulating real world situations and their interactions
with mathematical equations in order to predict their behaviour (Quarteroni, 2009), has
become a highly valued skill. Hence, the need to foster students’ mathematical modelling
skills has become very imperative. Fostering students’ mathematical modelling skills can be
achieved by guiding students to solve mathematical problems using mathematical modelling
approach. According to Lesh and Doerr (2003a; 2003b), the mathematical modelling
approach to problem solving suggests that there is no powerful procedure between givens and
goals and a set of strategies for finding solution to a problem. The approach indicates a
number of trial procedures between givens and goals in order to find solution to a problem.
1
This includes a number of iterative cycles, in which students move back and forth from
givens to goals, in the process they test their hypothesis, refine their strategies and improve
their solutions (Sriraman & Christou, 2007). The importance of problem solving in
mathematics is that students engage in different processes involved in mathematical modeling
as problem solving activity such as understanding and simplifing the problem, developing a
mathematical model, interpreting the problem solution as well as verifying, validating and
reflecting on the problem solution (Lesh et al 2003). The aim of this study was to examine
whether the Lakatosian method fosters students’ mathematical modelling skills as well as to
examine if this method helps them to develop model eliciting activity, thinking and skills
unlike the traditional teaching method.
Theoretical framework
The study is premised on Lakatos (1976) framework of mathematical discovery. Lakatos
explores the contrast between Euclidean theories, such as the traditional foundationalist
philosophies of mathematics and quasi-empiricist theories that regard mathematics as
conjectural and fallible (Hersh, 1978). Lakatos (1976) proposed that mathematical knowledge
is developed through heuristics method of problem solving. He argued that no mathematical
theorem is final or ultimately true but is only taken to be true until a counterexample (a
contradictory example) is found. According to him, on the discovery of a counterexample to a
theorem the theorem will have to be adjusted and through the logic and process of proofs and
refutations knowledge is created.
His summary of the methodological framework of mathematical proofs consists of the

following stages:
1. [Statement of the] Primitive conjecture.

2. Proof (a rough thought-experiment or arguments, decomposing the primitive
conjecture into sub-conjectures or lemmas).
3. ‘Global’ counterexamples (counterexamples to the primitive conjecture) emerge.
Proof is re-examined: the ‘guilty lemmas’, to which the global counter-example is a
‘local’ counterexample is spotted. This guilty lemma may have previously remained
“hidden” or it may have been misidentified. Now it is made explicit, and built into the
primitive conjecture as a condition. The theorem–the improved conjecture –supersedes
the primitive conjecture, with the new proof-generated concept as its paramount new
feature (Lakatos, 1976, p.127).
Hence, following this framework we argue that if students are exposed to heuristic method of
problem solving they will be able to develop mathematical modeling skills as the engage in
mathematical discovery in the course of finding own solutions to mathematical problems.
Methodology
The study followed a pre-test-post-test non-equivalent group quasi-experimental research
design. Two intact groups (experimental and control) of secondary school 11-grade students
2
(16-17 years old) studying Mathematics (Form B of 7 teaching periods per week) were
chosen for the purposes of this study. Mathematics is an optional stream subject. The Form B
Mathematical subject is in one of the three or four stream subjects of totally 12 or 16 teaching
periods (45min) per week respectively. Of the 7 teaching periods for the subject per week 2
are for Geometry, 2 for Trigonometry and 3 for Algebra.
The sample of the study consisted of 98 students in the experimental group who were taught
using the Lakatosian heuristic method and of 100 students in the control group who were
taught using the Euclidean method (referred to here as the traditional method). Both groups
were given a pre-test, a post-test and a delayed test. The interventions using the specified
methods were done in the two groups after the pre-test. Data was collected using the tests,
lesson observation and interviews.
Data analysed qualitatively. This involved qualitative analysis of the students’ discussions
during the lesson and responses to the test questions looking at the models eliciting thinking
and skills that evolved.
The aim of this was to examine whether students’ mathematical modeling skills can be
enhanced as they use the down-up Lakatosian heuristic method in the thought-experiment to
prove the SAC. According to the theoretical framework the following thought-experiment
was developed.
The thought-experiment about the SAC based on Lakatosian theory

In this thought-experiment, the Teacher posed the problem: A cone hat model is given. Find
the material needed to make it and then if its lateral height is λ, prove the formula for the
SAC (S) =πρλ, ρ=base radius of the cone hat. The idea was to encourage students during the
thought-experiment to come up with different plausible arguments about the problem posed.
At the beginning, students worked individually and then collectively in their groups to solve
the problem. To do the necessary measurements, each team had its own cone hat model, so as
to identify the data (the measurement of the incentre angle of the sector and its radius). Then,
they had to measure the area of the given sector that is the SAC. The students’
conceptualization was a first stage of the Lakatosian method that is the stage 1: Primitive
conjecture (Lakatos, 1976, p.127). This stage required the use of student pre existing
knowledge (i.e. the area of a sector and the elements of a circle) as well as by making ‘naïve’
conjectures (Lakatos, 1976) about the SAC (i.e. that when a cone developed in 2-dim its SAC
of a sector of a circle radius λ). Students’ observed that the radius (r) of the sector was the
required cone’s lateral height (λ), established their conjecture “as a reasonable hypothesis
about a general mathematics relation based on incomplete evidence” (Stylianides, 2010,
p.41).
3
By developing the cone hat in 2-dim (2D), students were able to establish their conjecture
(λ=r), so as to make a new conjecture about the relationship between the length of the arc of a
sector and the perimeter of the base of a cone. When making a conjecture, students formulated
a generalized hypothesis whose domain extended beyond the domain of the cases examined,
whereas it is possible for the hypothesis to cover only the examined case (Stylianides, 2010,
p.41). Such was the process to prove the SAC and make generalization so that students would
be able handle high level problem solving tasks about the cone. In their attempt to achieve
higher learning objectives it was examined whether the Lakatosian heuristic teaching method
could foster students’ mathematical modeling skills. The students had about 20-25 minutes in
each team of the experimental group to prove the SAC’s formulae, while they also had 5-10
minutes to make presentations to the whole classroom.
According to Lakatos’ (1976, p.127) stage 2: Proof (a rough thought-experiment or

arguments, decomposing the ‘primitive conjecture’ into sub conjectures or lemmas), students
decomposed the concept of the primitive conjecture, that was to prove the surface area of the
cone hat into sub-conjectures to find the relations (mathematical or verbal) between the two
dimensions (in a plane and a space) in order to realize how these relations are connected in
constructing/deconstructing the cone. They dealt with counter examples to give answers to
the question what is the lateral height of the cone in relation to the radius of its sector when
the cone developed in 2-dim? They tried to justify their answers by using the proof and
refutation method in accordance with what Lakatos (1976) did in his utopian class.
For example, in their attempt to prove the SAC, the students’ (S1 and S2) argumentation in
the experimental group was as follows, when they were asked by the Teacher what was the
cone developed from?
S1: It’s a circle!

S2: No! It’s a sector because the circle cannot make a cone hat.
Teacher: Bravo! this is correct answer. How do you find its area?
S2: We have to divide the sector in triangles [primitive conjecture], however, what will be the
base of the triangles? (NB: After a hard thinking).
S1: The smaller the triangles the closer the height will reach the lateral height.
S2: Do you mean that the height of the triangle will be the lateral height? (NB: She wrote
down that the height of a triangle equals to the lateral height of a cone (h=λ)).
S1: Yes! So the area of the sector will be the area of the SAC. (NB: She found a counter
example to alter S2’s process of thinking).
2 2 2 180  c
So, the area of the sector will be Esector= r      22  c

360 360 360
(NB: After a very hard thinking).
4
S2: But, the radius (r) of the sector equals the lateral side (λ) of a cone (r=λ). What about the
incentre angle μ of a sector?
(NB:S3 was working silently by himself in S2’s primitive idea, in their team).
S3: Look! If we are adding the bases of the triangles, they are equal to the length of the arc of
the sector. So, rμc=λμ. (NB: She realized after a hard conceptualization that the radius
of a sector (r) equals to the lateral height (λ) of a cone).
bb
S2: So my idea easily transforms to ...21   bv    c
.
2 2
S3: Yes! This is exactly the same as S2’s idea. However, it’s obvious that the length of the arc
of a sector equals to the base circle circumference having radius ρ (NB: and she wrote down
the statement λμc=2πρ).
S2: Hmm! What is the radius ρ?

S1: It is the radius of the base of a cone, while the circumference of the circle is 2πρ.
S3: Yes, by connecting the two edges (NB: meant radius) of the sector a cone in 3-dim a cone
hat is formed.
Teacher: Very well! Excellent! You have proved the formula. (NB: they were feeling
satisfied enough).
The following day, they said that the process made them feel proud of themselves and at the
same time they wanted to persuade themselves that they were capable of proving it as their
grades in school were less than 15/20 and this made them feel low self-esteem in the class.
In this way, students were lead to the proof in the idea of improving by proving (Lakatos,
1976, p.138) through a different conceptualization. Also, the method helped some of them
through the argumentation to prove that the SAC is a sector, which was equal to [the area of a
circle (O, R=λ)] * [part of a circle (in center angle θ) corresponding to a whole circle] (i.e.
Stor      2R   R
sec 2 * 360 2 2 ), as explained in Figure 1a (with drawing) or in figure
1b (without drawing).
5
b
Figure 1: Proving the SAC by pure deductive process
The stage 3: Global’ counter examples (counter examples of the primitive conjecture) emerge
(Lakatos, 1976, p.127) of the Lakatosian method where the (λμc=2πρ) guilty lemma (Lakatos,
1976, p.145) did not remain hidden and they successfully proved the formula of the SAC.
Moreover, the experimental group students proved what was requested (the formula of the
SAC) with more than one approach which they fully understood, as also shown by their
answers in the questionnaires which was given immediately after the interventions in both
groups (the experimental and the control). When comparing the two groups, the students of
control group gave one word answers. For example, they said we learnt the formula πρλ or
we learnt the formula of the SAC being unable to give a full and clear answer of the
procedure to prove the formula. Ensuring that by applying the Lakatosian method in the
classroom, “an expert teacher, in contrast to an expert mathematician, will enable students’
interaction, to generate discussion, demonstration and arguments with which by careful
support, can evolve into definition, axiomatization and proof” (Confrey & Costa,1996,
p.163).
In this study, students in the experimental group took into consideration all of the parameters
referred to in a product as a problem (Mousoulides, Sriraman & Christou, 2007, p.34) which
is characterized by all of the components (argumentation, experimentations, justification)
(Umland & Sriraman, 2014) of the heuristic methods in contrast to the students taught using
the traditional Euclidean method (Hadjichristou & Ogbonnaya, 2015) who could only recall
the one method of proof and were not able to justify their proof. The experimental group
students who were able to prove the SAC by using more than one heuristic method. During
the thought-experiment students in the experimental group discovered 5 different heuristic
approaches to prove the SAC; as well as a model eliciting approach which was demonstrated
by a low achieving student. The student in his attempt to prove which was the tallest cone of
the post-test task 9 (Figure 2) achieved higher order thinking skills emerging from his model
eliciting activity.
Emergence of a model eliciting activity/thinking and skills about the SAC

A student S(A) in model eliciting thinking and skills was inspired to develop a real model he
first thought as a ‘mental model’ of how to create the SAC. He did so, by visualizing the cone
and reasoning about what he could see mentally (Hersh, 2014, p.20), inspired from the
thought-experiment during the intervention.
6
By this model he explained why the cone with the smallest base circle was the tallest. A week
after the intervention, when the students were writing the post test, S (A) instead of doing his
test, tried to give an answer to task 9: A cone-shaped tall hat is requested to be made for the
junior school carnival show. Circle only one of the following shapes that is the proper one to
be used for the model of the hat.
Figure 2: Test task 9
S(A) showed the following model (Figure 2) in order to explain why the sector formed the
tallest cone, giving a clever model justifying his explanation. He cut two pieces of congruent
right angle triangles and by putting them vertically on his desk, as shown in Figure 3a, he
was first transforming them and then turning them around their vertical sides (Figure 3b). He
said very enthusiastically when we transform these two same (NB: meant congruent triangles)
triangles we will have different heights as well as different base radii (Figure 3b). Then he
continued saying by rotating them around their vertical sides we will have a cone…so the
tallest cone has a smaller circumference as well as smaller area meaning sector areas, while
he showed us the true answer that was the task 9a in the test (Figure 2). So, he justified that
the answer was the sector with the smaller length of arc or with the smaller in center angle
because a smaller base radius can be formed, while the base circle circumference is smaller.
Then, by applying the Pythagorean Theorem in a right angle triangle when the base radius
decreases, then the height increases, while the hypotenuse is the same.
a b
7
Figure 3: Student’s S(A) emerging model eliciting activity/thinking and skills
The Lakatosian method being similar to Xia et. al’s model (SCPBI), aims “to train students’
innovative consciousness and practical ability” (Xia, LÜ, Wang & Song, 2007, p.369),
cultivating students’ learning into the ‘doubt and question’, in the ‘independent study’ as well
as ‘to explore in learning’. In this task 9, S (A) came into conceptualization of the ‘why’ the
taller hat depended on the cone’s base radius and not on the radius of its sector when it is
developed in 2-dim. Also, many experimental group students discovered the ‘guilty lemma’
(Lakatos, 1976, p.145), concluding that “all of the sectors are cuts from the same circle, so they
have the same radius”. They deduced that the construction of the tallest cone hat does not
depend on the radius of the sector. Also by observing the base of the cone hat, they deduced
that the smaller the arc, the higher the hat. From that observation, in the post-test, they
concluded that the tallest hat depended also on the in centre angle of the sector of a cone, so
that they could come into the deductive learning of the problem solving (as shown in Figure 4)
by justifying S’s (A) model. This way of thinking will be discussed in the following section.
Figure 4: Student’s deductive reasoning by using model eliciting activity
An attempt to apply the S’s (A) model

In an attempt to apply the model on low ability students, of the experimental group, the
following dialogue took place between two female students (A & K) who answered (in the
post-test) that the tallest hat would be made from 9b (a sector of in centre angle θ2) of task 9
(Figure 2) instead of the correct answer 9a (a sector of in centre angle θ1<θ2). When asked to
explain their answer, the following dialogue took place:
Α: The shape with the longest arc creates a widest base cone, therefore, it must be the tallest
hat.
Κ: When I connect the radii after I close shape 9b, the tallest cone will be created because it
depends on the length of the arc (she meant that the longer the length of the arc of the sector,
the taller would be the cone).
8
Α: But the radius? Does the radius not matter?
Κ: No, the radii are equal. (Student A thinks hard insisting that the radius plays some role,
but which radius? She could not correlate the two areas so as to understand that the radius of
the sector does not affect the final answer but the radius of the base of the cone. She tried to
imagine the closed 3-dim cone, by making various gestures. Student K also failed to change
her initial conception (‘hard core’ as a negative heuristic) (Lakatos, 1976), believing that the
tallest cone depended on the length of the arc, therefore on the greater surface it occupies).
Teacher: I heard you very attentively, and you cannot decide which one is the tallest hat that
can be created out of the two sectors?(The Teacher shows them the model of the S(A) after
cutting two equal triangles and placing them on their desk as S(A) did in (Figure 3a) and
asks).
Teacher: What is the relation between the shapes of task 9a and 9b (Figure 2) with this
model? Does it help you to think of a relation if I rotate these triangles like this (Figure 3b)?
(Their faces glowed!).
K: But of course! The tallest hat has the smallest surface, (NB: the Teacher ask her to
explain) in other words the area is created by the perimeter of the base of the cone which is
equal to the arc of the sector!
Teacher: What do you mean the area is created by the perimeter?
K: I mean the less material…. so the smaller area of the sector depends on the less arc of a
sector.
Α: I got it. It is obvious now that the model having the shortest height forms a bigger area,
contrary to the model with the longest height.
Teacher: Correct. Good observation. (NB: Student K insists in her effort to consolidate what
she invented. Both students are using the S(A)’s model by rotating both triangles around the
imagined axis of rotation).
Κ: Therefore, the surface covering a smaller material, I mean area, has a smaller arc.
A: From this, we conclude that shape 9a (Figure 2) has an in centre smaller angle.
Teacher: Write this down symbolically.
Α: μ 10<μ 20
Teacher: How do you link this with the formula of the sector? Remember the formula when
the angle is given in degrees (NB: without too much thought, she multiplies the two parts of
the inequality with πr/180).
Teacher: What is r?
A: The radius of the sector.
K: But this (NB: she meant the formula πrμ0/180) is equal to the length of the circumference
of the circle 2πρ, as shown by the model! (NB: she showed us the locus of the circle on the
paper by rotating one of the triangles of the model).
Teacher: What is ρ?
9
K: The radius of the circle as shown in the paper (NB: meant the circles created by the
rotation of the model).
Α: So should I replace them? (NB: she meant the formula).
Teacher: Sure!
Κ: Yes, so we proved, thanks to the model, that for the radii, ρ1<ρ2 applies.
Α: But what we proved is also shown by the model.
Κ: Yes, therefore, if υ1>υ2 then ρ1<ρ2!
As shown by the model of student S(A), it appears that the Lakatosian method, in contrast to
the Euclidean, helped them to evolve their model eliciting activity thinking and skills.
Conclusion and Educational Implication

In the process of thought-experiment, teaching research has changed even low achievers’
teaching concepts and behaviors that focused on developing students’ ability to solve
problems, regardless of their prior ability. Therefore, mathematics teachers are strongly
advised to use Lakatosian heuristic methods in teaching geometrical concepts and other
mathematical aspects. By using such methods, students not only taught how to approach
mathematical problems and to solve real problems but they also taught how to pose problems
by learning to learn (Gordon et al., 2009, p.87), a key competence in Europe 2020, in contrast
to the traditional method used. Thus, they are able to produce new knowledge just like
mathematicians. This has provided an essential condition for the effective development of
thought-experiment that may emerge model eliciting thinking and skills.
The Lakatosian method helped students to overcome their misconceptions about how to
construct/deconstruct a cone as well as how to create a cone. The students developed their
visual as well as their visualization perceptions as to ‘build’ (De Villiers, 2010) the
definitions about the solid cone as well as the SAC. Thus, they were able to solve real
problems related to the cone such as task 9 by being inspired to develop model eliciting
activities/thinking and skills. Therefore, the Lakatosian method helps teachers to apply a
model in a real classroom. The S(A)’s model used was a thinking model that was a heuristic
tool, appropriate for teaching low ability students. In addition, by the Lakatosian heuristic
method, students were able to demonstrate model eliciting activities in such a way they were
able to discover the hidden theory, related between the two spaces 2D and 3D, about the
SAC.
10
Recommendation
The findings of this study have shown that the Lakatosian heuristic method of teaching
geometry holds positive promises to effective teaching of Geometry in Cyprus schools.
Therefore, it is important to promote the development of the methods in younger students (in
gymnasium even as early as in primary school) in order to engage them with thought
experiments aiming to teach them know how to explore mathematical ideas, by finding
counter-examples and justifying them while engaging in the process of Lakatosian method of
‘improving by proving’(Lakatos,1976). We also recommend that this method be used in
teaching students who study mathematics within the framework of the common core subjects
(3 teaching periods per week), who are not high achievers in mathematics and who study this
subject only because it is compulsory, as compared to those students who opted to study
optional mathematics of the same age.
Limitations of the study

The study was double blinded in both groups (the experimental and the control), involving
more than one educator hence the differences in the teaching skills of the teachers and
transmissibility may have led to some of the differences in the findings. Though the findings
of this study is positive and promising, the study was conducted in only one grade level and in
two schools hence the findings cannot be generalized to all grade levels students and all
secondary schools in Cyprus. Similarly, the finding may not be the same using other topics in
geometry apart from the surface area of a cone. Hence we recommend that a large scale study
using the Lakatosian heuristic method be conducted at different grade levels using many
schools and many topics in geometry.
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Chazan, D. (1990). Quasi-empirical views of Mathematics and Mathematics. Teaching.
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Confrey, J., & Costa, S. (1996). A critique of the selection of mathematical objects as a
central metaphor for advanced mathematical thinking. International journal of computers for
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Creswell, J. W. (2012). Educational research: Planning, conducting, and evaluating
quantitative and qualitative research. (4th Ed.). New Jersey: Pearson Education Inc.
Densmore, D. (2010). Apollonious of Perga conics: Books I-III. Santa Fe New Mexico:
Green Lion Press.
Duval, R. (2002). Representation, vision and visualizations: Cognitive functions in
mathematical thinking. Basic issues for Learning. In Fernando Hitt (Ed.). Representations
and Mathematics Visualization. North American Chapter of the International Group for the
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Psychology of Mathematics Education 311-336,
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mathematics. Educational Studies in Mathematics 61, 103–131. Springer 2006
De Villiers, M. (2010). Experimental and Proof in Mathematics. In G. Hanna et. al. (eds),
Experimental and Proof in Mathematics: Philosophical and Educational Perspectives, 205
221. New York: Springer.
Hadjichristou, C. & Ogbonnaya, U. (2015). The Effect of Using the Lakatosian Heuristic
Method to Teach the Surface Area of a Cone on Students’ Achievement According to
Bloom’s Taxonomy Levels. African Journal of Research in Mathematics, Science and
Technology Education, Vol. 19, No. 2, 185–198.
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classrooms. Researchers en Didactique des Mathématiques, 29(1), 11-33.
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Hersh, R. (2014). Experiencing Mathematics. American Mathematical Society, Providence.
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Niaz, M. (1998). A Lakatosian conceptual change teaching strategy based on student ability
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Springer-Verlag 2007.
13
Employee professional development in healthcare entities –
empirical research results
Wojciech Głód
Department of Entrepreneurship & Management Innovation

University of Economics in Katowice
Abstract
Human resource management is almost universally recognised as a key success factor in

every organisation. Extensive literature presents an exhaustive view of HRM goals, principles
and tools in modern organisations and indicates directions for likely developments
concerning these concepts. The study examines the issue of employee professional
development and selected tools used in this area. The empirical part discusses the results of
the survey conducted in five chosen healthcare entities on performing the personnel function
in relation to employee professional development.
Keywords: human resource management, employee professional development, healthcare
Conference Topic: Health Education, HRM
Introduction
Employees are often considered the most valuable asset of an enterprise, so the skilful
management of this asset, or human capital as it tends to be referred to, becomes the major
source of competitive advantage in today’s economy. Recognising human resources as the
component of the company assets and the source of competitiveness constitutes the major
feature distinguishing human resource management as an approach to the personnel function
of an enterprise. Managers in modern organisations expect that the employee will be
increasingly effective. Such an approach justifies the necessity to implement new tools,
especially in the area of human resource development.
Employee professional development
The review of literature on human resource management reveals a variety of definitions of

employee professional development. A. Pocztowski defines human resource development as
“purposeful configurations of events aiming to improve knowledge, develop abilities, form
values, attitudes, motivations and skills, as well as fostering the physical and mental strength
of employees; these events result in the increased effectives of their work and boosting the
market value of human resources” [Pocztowski, 2004]. The process comprises replenishing
specialist knowledge and occupational skills as well as improving employee behaviour and
motivation, necessary in performing current and future tasks and goals in an organisation.
Employee professional development can be achieved through the creation of suitable
conditions inside and outside an organisation. The synthetic definition of employee
professional development was proposed by US researchers, Devanna M. A., Fombrun C. J.,
Tichy N. M., who see “professional development as a process of boosting an individual’s
current and future effectiveness”. R. Harrison, on the other hand, defines it in the following
manner: “professional development is an increasingly important and fundamental process
14
during which individuals and organisations can, over time, achieve their maximum potential”
[Lundy, Cowling 2001].
The most important reasons for the successful implementation of the human resource
development process comprise:
employees’ willingness to undertake regular learning, involving the development of their
professional qualifications and occupational skills,
a necessity connected with the appointment to a new position or when assuming additional
responsibilities; changes stemming from new work programmes or procedures;
the need for employees’ increased flexibility and creativity and expanding the ares of their
knowledge and competences.
Employee development is a process by nature and reflects a company’s needs, long-term
objectives, strategies, relations between the situation on the labour market and demands
within an organisation, and, finally, employees’ expectations and needs [Głowacki, Galicki,
Mojs 2009].
In the HRM context, the dynamics and directions of employee professional development are
determined by a company’s objectives on one hand and employees’ needs and aspirations on
the other hand. Accordingly, the goals for employee development should be pursued in two
parallel strands:
by individual development of particular members of an organisation,
through the structured programme designed to develop the entire social potential of a
company [Listwan, 2004].
One of the basic human resource development tools is training. In general, training can be
defined as improving employees’ qualifications in order to boost their efficiency. The
training process must be planned adequately in advance and should involve analysing training
needs, devising a training programme, conducting training sessions, evaluating the course and
outcomes of the training programme [Kossakowska, 2002].
In today’s organisations, where the employee is connected with the workplace even more
strongly, emphasis is placed on the adequate course of his development. Firms seek still
newer methods to develop employee potential, such as mentoring and coaching, which are
the examples of modern HR development solutions.
D. Clutterback sees a mentor as an experienced person “who wants to share his knowledge
with someone of lesser experience in a relationship characterised with mutual trust”, while
mentoring as “one of the most effective development methods available to individuals and
organisations” [Clutterbuck, Megginson 1999]. Mentoring is perceived as a valuable
construct in personal and professional development [Okan, Yildirim 2004; Caroline, Eddy
2008; Megginson at all, 2008]. Summing up, mentoring supports both learning and a
mentor’s development – accordingly, it can be presented as an interactive process in which
both a mentee and a mentor teach and are taught. Mentoring should always be viewed from a
longer time perspective, sometimes even as a lifelong process, since its objective is a versatile
personal growth, both in the present and in terms of future outcomes.
Tangible benefits gained as a result of the implementation of mentoring in an organisation
are:
the opportunity, granted to experienced and competent employees, to share their knowledge
with other workers who need it to acquire particular skills,
the creation of the structure of career advancement paths – mentoring helps employees plan,
develop and manage their career; it also boost employees’ resilience in times of change and
autonomy to build their own professional career,
the growth of leadership in an organisation – mentoring fosters the developemnt of leadership
skills,
15
the filling of the gap between theory and practice; formal education and training schemes
supplement the knowledge and hands-on experience of a mentor,
improved customer service – counselling facilitates the emergence of desired behaviour,
supporting the development of customer service related competences and fostering the right
attitudes,
improved recruitment offers, including more incentives to potential employees,
the implementation of knowledge management processes – facilitating information and
knowledge sharing between the members of an organisation [Sosik, 2005].
Coaching as an employee professional development tool, on the other hand, can be defined as
a process of unleashing full potential of a person and/or an organisation. It occurs as a
sequence of sessions during which a coach and a client (a coachee) seek most adequate
solutions to the problems or dilemmas faced by the client and allow him to develop desired
competences, access new areas of knowledge or increase self-consciousness.
Other definitions afford a view of coaching as:
professional assistance provided by a suitably qualified coach and allowing for a client’s
development,
a relationship between a coach and a client, the space of which enables the client to expand
his self-awareness, make changes, improve professional qualifications,
a dynamic process during which a client changes in the direction that he finds valuable,
not being psychotherapy, counselling, mentoring or training.
According to a different approach, coaching is a two-way process during which a person
develops skills and acquires specific competences as a result of reliable appraisal oriented
towards practice and regular feedback. A business take on coaching emphasises increased
effectiveness and productivity by granting employees access to learning scheduled and
supervised by a coach. The whole process aims to facilitate effective problem solving and
improved productivity of an individual employee, especially in the area where change is
requires in task performance.
Based on the discussed techniques, it can be assumed that development and training
processes should allow employees to achieve target competences and skills, which will help
an organisation fulfil its needs and prepare both its employees and the entire organisation for
the future so that they can get fully integrated and work together.
Empirical research results
In order to examine the practical dimension in the area of human resource development, we
conducted the evaluation of this stage of the personel proces in selected healthcare entities.
The study was carried out following Eisenhardt’s methodology [Eisenhardt, 1989].
The results are part of the research project on innovative solutions in human resource
management. Based on the literature review, we focused our study on the following areas:
controlling, with particular emphasis on personnel controlling, management of the most
valuable employees, recruitment and selection, remuneration, employee satisfaction, and
employee development. We decided to look for innovative HRM solutions in these areas.
The survey was conducted with an interview questionnaire in five randomly selected
healthcare entities in the Śląskie province. The questionnaire comprised questions on
personnel policies in the above areas, including employee development and related practices.
We also asked respondents to illustrate, if possible, the existing organisational solutions with
documents, which could become the basis for analysis. Thus, we planned to gather not only
opinions but also documents. The survey participants in the selected entities were either the
persons in charge of an entity or its top executives.
16
The entities are: a public hospital, a non-public hospital, an emergency medical services
organisation, a diagnostic laboratory, and a private clinic, all based in the Śląskie province.
The selection of the cases was deliberately made with an intention to embrace as many
aspects as possible. The sample comprised large entities: a public hospital and an emergency
ambulance service, a medium-sized entity: a non-public hospital, and small entities: a
diagnostic laboratory and a private clinic. Accordingly, the choice of cased should account
for many different aspects in this varied set of entities. We also met K. Eisenhardt’s criterion
of selecting cases for a survey in a theoretical, not random manner.
Below, the results of the evaluation of employee professional development proces in five
selected healthcare entities are presented.
First case: a public hospital

Human resource development planning is implemented on a reactive basis, when the needs
arise in this area. Then the resources are appraised, but there is lack of more systematic effort.
Career paths mainly involve obtaining academic degrees and professional qualification
degrees in the case of medical staff. Administrative departments are small in terms of how
many employees work there that is difficult to identify any career paths. Another obstacle is
also the fact that in some cases the generation gap is so wide that the replacement of an
employee with another employee will not be straightforward.
Employees have an opportunity to participate in internal and external training events. Nursing
staff are trained in internal cycles that have a pre-determined programme always known
ahead for a given year. In the remaining cases, however, training events are held on an ad hoc
basis and some are the results of agreements with equipment suppliers and are obligatory for
staff.
Coaching seems to occur informally, since medical staff have an opportunity to work with
prominent specialists at national and international levels. Elements of coaching are also an
informal part of the work performed by nursing staff, whereas there is a gap in this respect in
the case of administrative staff.
In terms of training, externally provided events are more common. Employees often go to a
variety of training workshops held in the country and abroad. Sometimes, one or two persons
are delegated to participate and later share the knowledge that they acquired at the external
training with other employees by holding an internal presentation. Additionally, urgent
training needs emerge and corrective measures that do not require vast amounts of knowledge
to be transferred have to be taken.
Second case: a private diagnostic laboratory

The entity offers an informal career path, which is not very extensive as the structure of the
establishment is rather simple. Employees have a green light when it comes to training
participation. If an employee applies to the superior for the permission to participate in
training, he is always granted such permission and the cost is reimbursed (often in full).
Employees are also regularly informed about training opportunities – both of general interest
and specialist. Additionally, the entity uses some tools characteristic of coaching and
mentoring. In the entity, more training is provided externally and the respondent claims that
there are too many of such events. External specialist training is offered to selected
employees, while customer service workshop are addressed to all employees. The entity
promotes the practice of sharing training materials with the employees who did not
participate and reporting on training workshops to the immediate superior.
17
Third case: an emergency medical services organization
The entity plans employee professional development only for selected groups of positions,
especially dispatching teams and middle management. The entity, however, does not have a
formal professional development plan, which would define development directions, which is
also manifested by the lack of career paths. On the other hand, development needs of the staff
are fulfilled through a training programme, built around the periodic appraisal system.
Development primarily involves new, highly specialised tasks, connected with new
competences, and changes in the law.
According to the respondent, the employees are aware of the opportunity that they have to
regularly improve their competences. The entity runs an emergency medical service school
and interested employees can participate in its classes. An employee in this case has an
opportunity or an obligation to take part in the classes. The respondent is of the opinion that
the number and scope of specialist training events are adequate and allow employee to
develop professionally in a regular and consistent manner. They are not, however, supported
through a system of coaching and mentoring programmes. Some components are in place, for
example experience sharing, but the organisation lacks clearly defined principles of
cooperation between employees in this respect. The respondent is particularly critical of the
low level of knowledge sharing and peer learning among the administrative staff. The
development of employees’ competences occurs mainly through the participation in internal
training sessions, which is justified by the fact that the entity runs its own emergency medical
service school, using EU funding.
Fourth case: a private hospital

In terms of employee professional development, the healthcare entity has detailed training
plans and a specially allocated budget on an annual basis. HR development planning in the
area of promotions and transfers, however, is less formalised. On the other hand, the
respondent points out that every employee joins the entity with a clearly deined career path,
receives information not only on remuneration, but also on what he can expect in the future
and what the hospital expects of him in this respect.
Training needs are identified in two stages. First, formal aspects are considered and
employees complete a training needs form every six months, identifying the areas where they
think they should improve their competences. Second, each employee can find an adequate
training event and apply to the employer for financial support, which is granted if the
employer agrees that it is connected with the employee’s work. Employees receive regular,
both formal and informal, information on training opportunities. Such information is
exchanged both during staff meetings and, more informally, during work. The respondent
stresses that employees are willing to share their work-related knowledge and the hospital
encourages this form of communication.
In the respondent’s opinion, many employees inadvertently receive some mentoring – senior
workers are willing to share their knowledge with junior ones. There are no formalised
coaching or empowerment, although the employees enjoy a lot of autonomy in defining the
goals and methods to achieve them.
Fifth case: a private clinic

Due to the character of the entity, there are no formal career paths. Training needs analysis is
conducted by asking the employees what training they want or need. The employees can also
take initiative in this respect. The owners of the entity determine whether a particular training
event contributes to the development of additional competences, especially if they will raise
18
customer care standards. In general, the employees are well informed of basic or specialist
training opportunities. Most training events are provided externally and in the case of internal
training the trainer comes from an external entity. The establishment successfully implements
knowledge sharing, which can be observed in the group of rehabilitation specialists.
Table 1 shows the summary if the findings of the survey conducted in the five healthcare
entities.
hospital
public laboratory
diagnostic
private emergency
services
medical hospital
private private clinic
organization
development
porfessional
Employee of
centralisation
incomplete
training,
employee
Availability
in
career
based
and this
conventions
among initiatives
traditions
paths
area;
on
of informal
paths,
not
complex,
structure
entity
good
of
opportunities.
The entity
availability
iswhich
training
simple;
of
as
career
offers
very
the
is of
career
Availability
centralisation
incomplete
training,
employee
this
initiatives
area;
paths.
formal
lack
of
in Clearly training
plans
development
professional
employee
annual
budget
allocated.
defined
and
is Due to the
character of the
entity, there are
no formal
career paths.
Training needs
analysis is
based on
feedback or
initiative of the
employees.
medical staff
Based on the survey, the major problems identified in the area of employee professional
development are:
olimited use of flexible employee professional development forms due to statutory
regualtions,
organisational culture, which is not oriented towards building a knowledge management
system in an organisation (in particular, with respect to knowledge sharing), supporting
professional development in the workplace,
a management style, especially in the context of building relationships between superiors and
subordinates and among employees, which is most based on lack of trust,
an inconsistent system of employee development and competence building,
a genuine need to increase employees’ flexibility and creativity and to expand the area of
their knowledge and competences through the process of training and professional
development,
lack of adequate development and training projects in terms of the optimised fit between
employees’ needs and the character of training and knowledge transfer methods (e.g. formal
and informal training, structured and unstructured training),
employees’ reluctance to undertake a regular effort to learn and improve one’s competences
and skills,
absence of strategic plans of the organisation’s growth, concerning principal changes and the
restructuring of its profile, also in the human resource area,
inconsistent human resource development management policies, involving development and
training needs of employees (e.g. assessment centres for human resource development,
promotion of successful learning and competence building, etc.),
anticipated and predicted needs connected with preparing selected employees for new roles
and tasks as well as the development of specific abilities and skills required by the changes
planned in an organisation (e.g. the introduction of new technologies, technical and
organisational innovations, and cultural changes),
19
difficulties in finding people who are „promoters” of modern concepts in the area of
employee professional development in the workplace (coaching, mentoring).
Conclusion
The effective operation of healthcare entities depends, to a great extent, on how the personnel
function is performed. In this situation, it is becoming increasingly necessary to understand
changes occurring in the perception of human resource development processes and to use
tools and skills adequate to change management. Currently, the human resource development
process should comprise such elements as competence building, innovation and
entrepreneurship stimulation, opening new lines of thought and switching to a market or
marketing orientation, forming attitudes and developing personalities. As a consequence,
managers should implement modern training methods involving coaching, mentoring and
counselling components. Analysing the situation of a healthcare manager, staff must be
prepared to perform work tasks, assess situations realistically, and design and implement
change. Hence, the absence of an adequate employee professional development system may
lead to their leaving an organisation, negatively affecting the quality of services provided and
the competitiveness of an entity.
The absence of such modern solution in human resource management in the area of employee
professional development in healthcare can be attributed to a variety of factors. According to
the respondents, the major reasons are financial limitations, for example an average or
difficult situation of an entity. However, some solutions, such as talent management schemes
or employee selection methods, do not involve any particular increases in costs, but still
require deficit resources remaining under the control of managers – time and attention.
Facing the need to run day-to-day activities, these resources are becoming scarce and, a s
result, key employees, responsible for an entity’s operations, can afford less and less time to
develop and implement innovative solutions, already applied in counterpart organisations in
other industries.
Brief biography of author
An economics doctorate holder. An employee of the University of Economics in Katowice.

His research interests comprise enterprise innovation, strategic management and modern
enterprise management methods. Acts as an economic consultant for healthcare entities. Took
part in a number of conferences on management in Poland and abroad (e.g EURAM, RENT).
References
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21
Entrepreneurship and entreprenerial opportunities.
Conceptual framework.
Anzelika Smagina, MBA
RISEBA University, Riga, Latvia
anzelika.smagina@riseba.lv
ABSTRACT
Article aims to present and compare theoretical reflections and research perspectives from a variety
of academic fields on the concepts of opportunity recognition, discovery and implementation.
Article intends to create conceptual model for empirical analysis of the phenomena in different
industries in order to better understand entrepreneurial processes taking place in commercial versus
creative industries and, in particular, in opportunity recognition and enactment.
By integrating different directions of the literature, article helps to draw attention not only to the
importance of individual attributes of the entrepreneurs but also to the influence of contextual
factors playing part in opportunity recognition, evaluation, exploration and exploitation.
This article offers a contribution to the ongoing research on enttreprenerial opportunity
development and implementation. In particular, created conceptual framework will further serve as
a basis for developing questionnaires and interview guidelines for empirical studies in different
industries and on different stages of entrepreneurial development.
Keywords: entrepreneurship, opportunity, creative industries.
Paper type: literature review.
INTRODUCTION
Entrepreneurship is considered to be the vehicle of the growth and prosperity of the countries
(Birtch, 1987), thus, it is important to gain comprehensive view of the field and how entrepreneurial
endeavors can be further supported and stimulated.
Results of the research show that level of the entrepreneurial activities is connected to the economic
growth of the country but the relation is different on different stages of the development (Acs &
Amoros, 2008; Van Stel et al., 2005; Wennekers et al., 2010). According to GEM (2014),
entrepreneurial activity is a result of the individual’s attitudes towards opportunity (motivation),
his/her capacity to act (skills) and the external environment, in which individual is located
(entrepreneurial framework conditions).
Opportunity recognition is an important part of the entrepreneurial endeavors and one’s ability to
recognize and take it is influenced by different factors. In general, these factors can be divided into
2 major streams: influence of external environment and internal (individual) forces that drive an
individual to behave in a certain way and, not only recognize or create an opportunity, but also take
necessary actions in order to succeed.
Entrepreneurs are driven by success and they are constantly looking for the possibility to develop
further. This behaviour is captured by Lumpkin and Lictenstein (2005), defining opportunity
recognition as „the ability to identify a good idea and transform it into business concept that adds
value and generates income”.
However, most of the studies and theories are focused on the pure commercial (business) sectors
and specifics of the other industries are not addressed.
Due to the growing importance to the economies of countries, creative industries draw particular
attention. Creative industries produce an immense nonmaterial value, have the promise of fresh
growth potential and they are the “hope” of the whole Europe. Therefore, this part of the economy
cannot be overlooked and shall be studies in more detail. In particular, entrepreneurship in creative
industries calls for better exploration as it is distinguished by different environmental setting,
production of goods that are “cultural” by nature as well as work with people that are often more
22
content-driven than commercially oriented. This usually creates very small enterprises that exist on
the basis of more permanent networks.
Thus, looking from the prospective of the entrepreneurship in the creative industries there is an
empirical gap in the research and phenomena of opportunity recognition and enactment is not fully
understood, thereby calling for the exploration of the field.
That is why, it is important to create a conceptual model, which would allow to explore if
conventional entrepreneurial theories can be applied to entrepreneurship in creative industries and if
creative entrepreneurs recognize and exploit opportunities in a particular way –different from the
commercial entrepreneurs. Taking into consideration different identity of the creative entrepreneurs
as well as their motivations and their actions, when engaging into entrepreneurial endeavors, it is
important to explore if creative entrepreneurs are better equipped for opportunity recognition or
exploitation and where external assistance might be needed for them to help succeed. The latest is
based on the premise that creative industries have significant impact on the economies of the
countries but their full potential is not fully realized because of the slow entrepreneurial actions.
Thus, this article presents a theoretical concept for future empirical exploration of the
entrepreneurial opportunities in different industries with the purpose to better understand the
processes of opportunity recognition and exploitation as well as how entrepreneurship in creative
industries can be better supported.
LITERATURE REVIEW
Entrepreneurship
Entrepreneurship is a driving force of the economies and in order for entrepreneurship to exist there
must be entrepreneurial individuals who identify, shape and develop their idea and opportunities
into business ventures (Thornberry, 2003). Thus, speaking about the nature of entrepreneurship and
analyzing it from Kizner’s perspective (1973) “entrepreneurship consists of the competitive
behaviors that drive the market process”.
Other definitions of entrepreneurship offer the following formulations: (Dincer et al., 2011):
“Entrepreneurship is the creation of organizations, the process by which new organizations come
into existence“ (Gartner, 1988).
“Entrepreneurship is an act of innovation that involves endowing existing resources with new
wealth-producing capacity” (Drucker, 1985).
“Entrepreneurship is a way of thinking, reasoning, and acting that is opportunity drive, holistic in
approach, and leadership balanced” (Timmons, 1997).
“An entrepreneur is the person, who organizes and manages a business undertaking and who
assumes risk for the sake of a profit” (Wheelen and Hunger, 2000).
“The process by which individuals (either on their own or inside organizations) pursue
opportunities without regard to the resources they currently control” (Stevenson and Jarilio, 1990).
“Entrepreneurship is about how, by whom, and with what consequences opportunities to bring
future goods and services into existence are discovered, created and exploited” (Venkataraman,
1997).
There are many other definitions of entrepreneurship arguing if it is about behavior or outcomes; if
it is part of the commercial sector or not for profit one; if it is about small or individual ventures
(Gartner, 1990; Hébert & Link, 1982; Kirzner, 1983), however, the very central role in the
discussions is given to the importance of the opportunity recognition, which is, in tern, reinforced
by the realities of the todays world and can be achieved by supporting entrprenerial endievors.
23
Nature of the Entrepreneurial Opportunity
The general field of research regarding opportunities involves exploration of sources of

opportunities, the process of discovering, assessing and acting upon, and the entrepreneurs as
individuals who do so (Venkataraman, 1997). Thus, the central questions discussed in the literature
are why, when and how opportunities arise; why, when and how certain individuals spot those but
others not; and why, when and how opportunities are taken and acted upon.
As mentioned by Sarasvathy, Dew, Velamri and Vankataraman, (2003) entrepreneurship consists of
ideas, beliefs and actions to introduce new activity, which is considered to be the creation and
exploitation of business opportunities, which is the very essence of the entrepreneurship (Shane,
Vankataraman, 2000).
Resent research suggest that nowadays the ability to recognize and exploit arising opportunities is
the most important characteristics of an individual or a company (Puhakka, 2007).
Vesper (1991) relates to an opportunity as “jigsaw puzzle” or the message, which is unknown how
to understand. And as there are no rules, solutions cannot be identified but they have to be created –
the same as with the opportunity but to even bigger extent as in a new creation.
Different authors attribute different meanings to the term “opportunity” (table 1):
Table 1.
Meanings of “opportunity” (authors modified)
Identification
motivated search
of opportunities is alert management and Krzner ,1985; Herron and Sapienza, 1992
established
Opportunityinismarket
a happening,
structures
expressed in actions and Dimov, 2007
ideas
Opportunity is a flow of ongoing developed and modified Davidsson, 2003; Dimov, 2007b
Opportunity one whole with the individual Companys & McMullen, 2007; Dimov, 2007a;
Sarason, Dean, & Dillard, 2006
Opportunity is about with individual beliefs McMullen & Shepherd, 2006; Shepherd,
McMullen, & Jennings, 2007
Opportunity occurs only in the entrepreneur’s
imagination Klein, 2008; Shackle, 1955
Opportunity is about venture ideas Davidsson, 2000

Opportunity
benefits is an enacted possibility for economic Dimov, 2004
Opportunity is a flow of ideas changed as entrepreneurs

act Dimov, 2007b
actions
Opportunity is a production from the entrepreneurs’ Alvarez & Barney, 2007
Opportunity
entrepreneursis brought to existence by acting Alvarez & Barney, 2007
Opportunity is an organizing vision Lichtenstein, Dooley, & Lumpkin, 2006

Opportunity
in a form of venture
exists inideas,
the minds
appeared
of aspiring
from perceptions
entrepreneurs
and Davidsson, 2003; Dimov, 2007b, 2010
beliefs born from the interpretations of existent evidence
Creation of the opportunity is multidimensional process. It consists of social activity as entrepreneur

is part of the society and it is the social community who defines the current needs and expectations
for the entrepreneur. Another dimension is cognitive activity as entrepreneur has to understand the
complexity of the situation and take actions, which is in turn, is the third dimension of the
opportunity creation.
There are quite a lot of discussions regarding terms discovery and exploitation of opportunities and
about identification versus creation of the opportunities. De Koning (1999), Fiet (2002), Kirzner
(1973) persist that it is only about discovery, meanwhile Shane & Venkataraman, (2000) argue that
it is also exploitation. Kirzner (1997) mentions that opportunity is “discovered” when entrepreneur
24
is alert to it and seize it once spotted. On the other side is Sarashathy (2001), Alvarez and Barney
(2007) argue that opportunity is “created” by the entrepreneur using his creative ability and
effectuation.
Although, Alvarez and Barney in research undertaken in year 2013 agreed that opportunity
recognition consists of both “creation” and “discovery” and that it happens simultaneously.
Discovery and exploitation of opportunities is a process. First, it is a discovery, which includes also
opportunity identification, detection, formation and refinement (Bhave (1994); de Konning (1999)),
meanwhile exploitation refers to resource acquisition and directing into the process. Exploring the
sequence of the processes Dimov (2007) thinks that these processes are overlapping: once
entrepreneur see the opportunity (discovery) he shall acquire the recourses (exploitation) but if the
initial idea needs further development entrepreneur changes the concept (again discovery) and
proceeds with the assurance of necessary resources (exploitation). In contrast, other researchers
Cartler (1996), Gartner (2003) argue that the process can follow any other sequence.
Analyzing the most established in the fields of entrepreneurship and opportunities authors: Gartner
and, latter, Shane and Vankataraman (1996-2001) do not oppose each other but rather compliment.
Gartner offered 3 domains of entrepreneurship: behavior, process and emergence. Shane and
Vankataraman (2000) added two sub-contexts: discovery and exploitation and that entrepreneurship
is not only about new businesses but also about new products and services, which have to be
brought to the market, which, in turn, points at another important process- exploitation.
In contrast to the views of Garther and Vankataraman (2000) there is an argument that concept of
opportunity explained by authors has potential drawbacks. Casson (1982) described opportunities as
situations where products or services offered and sold at the price higher that the expenses for its
production – thus, opportunity has to be profitable and therefore opportunities can be perceived as
favorable situation. It in turn creates an argument for the uncertainty mentioned by Knight (1921) as
in it looks like entrepreneurs know what they pursue and how they are going to act.
The second is that it is arguable if the opportunities exist independently from the entrepreneurs and
they are taken or the entrepreneurs create them.
There are 3 approaches towards opportunities expressed by Dimov (2007):
Objectivist, saying that opportunities exist and they are available for taking, thus, they are equally
accessible for everyone;
Objectivist-subjectivist, arguing that opportunities are available but, dependant on the people’s
individual characteristics and capabilities they are spotted and taken (Shane, 2000; Venkataraman,
2000; Eckhardt &Shane, 2003).
Subjectivist-creative claim that opportunities do not exist in a ready form to be taken. It is about
individuals who transfer, change, improve etc. existing things thereby create opportunities (Koning,
(1999), Gartner &Carter (2003), Sarasvathy, (2001)).
According to Krueger, (2000) opportunity is intention-driven process (first comes intuition and only
then interpretation). Intuiting is defined as “the preconscious recognition of the pattern and/or
possibilities inherent in a personal stream of experience” (Weick, 1995), in other words individual
feels that the idea has potential. Crossan et al. (1999) describe interpreting is “the explaining,
through words and/or actions, of an insight or idea to one’s self and to others”. This is an important
step in the business development as entrepreneur starts to communicate with other stakeholders and
customers in order to integrate all the needs and work out a sound business concept.
In addition to the mentioned above, Timmons and Spinelli (2007) mentioned 3 other variables in
opportunity recognition: opportunity assessment, assembling and deploying resources and forming
a good team of supporters.
It is mentioned by Bruner (1990) that opportunity recognition is both objective and subjective,
meaning that it happens due to changes in the environment (objective changes) and also because of
the individual characteristics of the entrepreneur (subjective influence).
25
Influence of External Factors
As it is confirmed by many researchers, influence of the external environment is very important for
the elaborating on the types of opportunities, Drucker (1985) identified 3 types of opportunities:
creation of new information which is the result of the new technologies; utilization of market
inefficiencies based on information asymmetry; consequences of the changes in costs and benefits
of resources cased by political, regulatory and demographic shifts.
Another typology is based on the value of the opportunity and their originality and development.
Four types of opportunities depending on: dreams, technology transfer, problem solving and
business formation are offered (Ardichvili et al. (2003).
Dreams point at the opportunities based on the completely unknown situation; problem solving is
the situation where value is identified however resources are not yet found; technological transfer or
business formation point at the situation where resources are available but value is ether
unidentified (meaning that application for the idea is not yet found) or identified – stage where
business is being set up.
There are several models how entrepreneurship works and how opportunities are taken. One of the
models of entrepreneurial behavior describes traditional rational model based on the premise that
knowledge of the market is open for everyone, thus, market is known and it is also known what to
offer and how to balance demand and supply (Sarasvathy, Dew, Velamuri and Venkataraman
2003).
The second model is the one where only one of the variables is known- the goal or the initial
situation. In this situation either market is ready but there is no offering or offering is there but there
is no market (Sarasvathy et al., 2003).
The third model is the model of the genuine entrepreneurship - it is when opportunities are created
in the situation with initial and final circumstances unknown (Sarasvathy et al., 2003). According to
the author entrepreneurship reflects ideas, beliefs and needs which are changing and developing in
the process of entrepreneurial action towards the goal.
Entrepreneurship, nevertheless, is about opportunities and Shane &Venkataraman (2001) mention
that the opportunities are the first force in understanding entrepreneurship and only after follow
external environmental influences. This approach is defined as disequilibrium approach which
involves different types of opportunities and entrepreneurs (Eckhardt and Shane, 2003).
Thus, it is expected that entrepreneurs comprise specific behavioral expectations relevant to
opportunities into their identities. (Shane & Venkataraman, 2000)
However, research on effectuation and bricolage (Garud and Karnoe, 2003) suggest that
entrepreneurs use available for them resources in order to experiment and create and it is not one
time event but a continuous learning and applying the result into new combinations.
In addition, depending on the focus, interest and knowledge of the entrepreneurs, Eckhardt et al.
(2003) suggested 3 categories of discovering opportunities – focus on changes, thorough
exploration of source of opportunity and on the basis of change agent.
Influence of Individual Characteristics
It is important to explore what the drivers in opportunity recognition are and what other factors play
an important role in this process. Boyd &Vozikis (1994), Krueger (2000) offer the following
factors: perceived desirability and perceived feasibility, which are in fact features of the
entrepreneurial identity. Perceived desirability indicates to what extent individual is ready to see
himself an entrepreneur and feasibility if he could be a successful entrepreneur.
According to Dyer (2008) as well as Shane and Venkataraman (2000) opportunity recognition
potential differentiate entrepreneurs from employed managers and in turn, entrepreneurs can also be
distinguished as people possessing high potential for opportunity recognition. Authors explain it
with prior knowledge, self-efficacy, and achievement oriented motivation and social ties and
26
networks (Singh et al. (1999), Lee and Tsang (2001), and Craig and Lindsay (2001) allowing for
better acquisition of resources. Regarding resources, Shane an Venkataraman (2000) mention 2
types of its opportunities – those created by new resources and those created by new ways of using
existing resources. Latest is consistent with the view of authors speaking about bricolage (Garud
and Karnoe, 2003-47) and experimenting with existing resources.
Research indicates that there are two categories of factors that play part in discovering
opportunities: prior information and cognitive properties necessary to see its potential. One of the
important suggestions of Cooper, Woo, Dunkelberg, (1988) is that optimism has a great impact on
the decision if to exploit the opportunity. Usually such individuals act first and analyses their
actions only latter (Busenitz &Barney, 1997) as well as they are more tolerant towards ambiguity.
Nevertheless, researcher also notices that the higher probability of taking the opportunity does not
necessarily lead to the higher probability of success.
Meaning what entrepreneurs see in the potential opportunity and how they proceed to interpret it is
based on their prior experience (Weick, 1979) and dynamics of it, which in turn, defines their
learning process (Cope 2005, Minniti & Bygrave, 2001) and further impact on opportunity
development.
Entrepreneurs need to obtain information and resources in order to create business venture
(Edelman & Yli‐Renko, 2010). It is said that information, knowledge, market intelligence, new
ideas make it possible for the entrepreneurs to recognize opportunities (Hoang & Antoncic, 2003).
According to (Edelman & Yli‐Renko, 2010) resources are defined as financial, government
(policies and support) and community resources (support from professional community) (Davidsson
& Honig, 2003).
Kirzner (1973) says that entrepreneurs have to be alert to opportunities, innovate and exercise
persistence in their actions. There are different types of entrepreneurs: social bricolers - ones who
spot the opportunities in the local level (because they possess the knowledge at the very local level)
and social constructionists - ones who find opportunities is outside local knowledge and resources
– they are discovered because of the unique capacity of the entrepreneur to recognize new trends
and needs. In addition, Baker and Nelson (2005) mention that local knowledge and resources
entrepreneurs can find in the local community allows they to leverage new opportunities. In turn, as
outside community actors do not possess same knowledge and opportunities, it makes it difficult for
them to interfere. The third dimension is the desire for revolutionary change and therefore
opportunities arise from the combination of both mentioned above.
Ardichvili et al. (2003) listed the following important factors as influencing entrepreneurial
opportunity identification: entrepreneurial alertness; information inefficiencies; previous
knowledge; ability to search; social networks; as well as personal characteristics such as risk-taking,
optimism, self efficacy and creativity, which, combined with the well known set of characteristics
defined as entrepreneurial orientation (risk, taking, locus of control, proactiveness) provide for a
necessary set of determinants needed for opportunity recognition and development.
“Allertness” was introduced by Kirzner (1973) to characterize recognition of opportunities by
individuals who are alert, sensitive to information or in other words aware of what is going on
around him.
Von Hippel (1994) suggested that because people tend to perceive information similar to what they
already know and consequently they are able to recognize the value of this information as well as
where and what for it can be used. Thus, Shane (1999) relates it to ability to discover opportunities.
In his 3 stage study he explains it with the fact that opportunity is not available to every
entrepreneur but only to those who can notice it due to their prior knowledge which creates a
‘‘knowledge corridor’’ for recognition of the given opportunity. A study (Hayek, 1945; Ronstadt,
1988) suggests that 3 types of information are important for the discovery of the opportunity:
knowledge of markets and how to operate there as well as knowledge of customer requirements and
problems.
27
Sigrist (1999) in his study of new opportunities added that combination of knowledge of the interest
area with knowledge gained in the area of individual occupation provides for the possibility to
identify gaps in the market which potentially could be seen as new opportunities.
Ability to search information is one of the other determinants affecting opportunity recognition.
Despite the fact that Kirzner (1997) in his study claimed that it helps to discover the opportunities
other researchers Koller (1988), Teach et al. (1989) claimed that entrepreneurs do not need to
search for information and it just comes and what is most important in this context is the
entrepreneurial alertness or in a state of “passive search” and entrepreneurs with higher alertness are
more likely to spot “accidental” opportunities. Majority of the studied entrepreneurs confirmed that
‘‘accidentally’’ discovered ideas were more successful and profitable than those that were
undertaken in the result of the formal search of information.
Hills et al. (1997) claims that social networks significantly improve the possibility to acquire unique
information and thereby discover new opportunities. At the same time, study revealed that wider
social networks significantly affect entrepreneurial alertness and creativity. Socio cognitive view on
opportunities was suggested by De Koning (1999), who identified three cognitive actions performed
together with the members of the social network: assembling of information, thinking while talking,
and evaluating available resources).
Social network can be represented by the close to the entrepreneur people (inner circle)but not
partners in the business (long-term relations), people hired to perform certain functions for the idea
to work (action set), business partners, as well as network of acquaintances and associates to supply
new information.
Many studies devoted to personal characteristics of the successful entrepreneurs have been
performed by different researchers. For instance, Shaver and Scott (1991) claimed that the two of
the personality traits most related to opportunity recognition are optimism, which is closely
correlated with perceived self-efficacy (Neck and Manz, 1996) and creativity.
Outcomes
In this sense, created outcome is also very important as if entrepreneurship does not make a
difference it is not entrepreneurship.
Academic papers (Davidsson, 1989; Schafer, 1990; Tay, 1998) suggest measuring degree of
entrepreneurship using different criteria: degree of director indirect impact on the economic
system; the degree of novelty to the market and a degree of novelty to the actor. These measures
relate to entrepreneurship as societal behavior and competitive behavior which triggers the market
processes therefore impacts the whole economic system. Novelty is a part of entrepreneurship and
the higher it is the more entrepreneurial business is considered, however some studies suggest that
novelty does not necessarily creates a positive impact neither to the market not to the actor (Barney,
1991; Sarasvathy, 2001; Shane, 2000b).
Outcome of the entrepreneurial actions can also be viewed in terms of ”total wealth” which is a
combination of economic and social wealth and includes tangible and intangible outcomes.
Tangible could be defined as products, services, etc, and intangible are as happiness, motivation,
general well-being and etc. It is called “welfare creation” what suggests that it dependents on the
following 3 factors: theoretical knowledge on production and generation; application of this
knowledge to real business and implementation of production and distribution operations.
CONCEPTUAL MODEL
On the basis of the carried out literature review the following conceptual model have been
constructed (Fig.1):
28
Figure 1
A Conceptual Model of the Entrepreneurial Opportunity
Behavioral Attitudes
self perceived Opportunity exploration
efficacy opportunities and
discovering
Identification
detecting
intuiting feasibility
desiribility
assesment
interpreting
identification
Evaluation exploration
integrating
refinement
formation
Adjustment individual
company
society
Levels Direct vs indirect
alertness capabilities
knowledge fear of failure impact on society
sc Economic:financial
it experience el status of
si if entrepreneurship capital
re or supporters
Opportunity
enactment
resources
team of
tc Social p Activity Social: human,
ar capital la opportunity Exploitation
assembling social, cultural and
a networks
ir /necessity driven
hc e stage of
political)
la community ne
ties r development Environmental:
u pe
idv rt industry natural, built
i Cognition n Aspirations capital)
d E
nI creativity growth
optimism innovation
confidence international Outcomes
motivation orientation
social value
creation
Contextual / External factors
Uncertainty 29
Environment Conditions Tangible Intangible
market is known uncertainty of the resources new companies motivation
market is partially environment markets new services general happiness
known information new products well-being
unknown market asymmetry new combinations
political
demographical
regulatory shifts
new technologies
Due to the huge body of research on entrepreneurship, there are different definitions,
approaches and models on how to approach and explain entrepreneurship as well as behavior
of entrepreneurs. Hence, majority of the researchers focus on individual characteristics of the
entrepreneurs and creation of the new ventures. However, at the very heart of the
entrepreneurship is entrepreneurial opportunity which is, in fact, where entrepreneurship
starts.
Due to ongoing changes in the external environment, behaviors and activities of the
entrepreneurs also change, thus, changing the way entrepreneurs perceive and interpret what
is happening round them. There are several dimensions in opportunity research to be further
explored: why, when, where and by which individuals opportunities are discovered or created
and why certain individuals do take those and certain do not; what happens when one spots
an opportunity and how he/she acts upon this (Shane, 2003). It is also important to take into
consideration which external factors shape opportunity recognition and entrepreneurial ability
to recognize it.
Therefore, presented above conceptual model represents combination of factors, which are
important in order to comprehend how entrepreneurs discover, interpret, modify and enact
opportunities they spot. The framework includes results of the research of the well
established authors in the field of entrepreneurship and entrepreneurial opportunities and
every part of the framework includes several authors’ opinions regarding each stage of the
opportunity development. Thus, the model starts with the individual characteristics of the
entrepreneurs or their identities, proceeds with several stages of the opportunity exploration
leading to opportunity enactment, which is expressed in concrete actions of assembling
resources and forming a team of supporters. Opportunity exploration process, in fact, is
greatly influenced by contextual factors reflecting on the changes in the environment as well
as characteristics of the particular industry. As entrepreneurship is processes which has to has
an outcome, model defines how, on what levels and how the outcomes can be determined
(Fig.1).
CONCLUSIONS
Entrepreneurship is an already well-established field of studies, however, due to the
multidimensional and elusive nature of the field, there are many difficulties in answering
certain questions. In particular, in the area of entrepreneurial opportunities, where
phenomenon can only be studies retrospectively, thus fully relying on past experiences of the
already established entrepreneurs.
The article presents an author’s developed conceptual framework in the field of
entrepreneurial opportunities. Created framework will help to analyze and recognize
important interdependencies between the influencing factors that constitute the opportunity
identification and development as well as facilitate establishment of the empirical research in
different industries and on different stages of entrepreneurial development.
Thus, the framework incorporates important variables derived from different subfields of the
entrepreneurial research in order to capture the most important components of the
entrepreneurial opportunities and create a possibility to study in a comprehensive way.
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32
Impacts of insufficient Instructional Materials and Higher
Education Systems:the case ofteaching biology
Sutuma Edessa (PhD)
(sutuma2002@yahoo.com)
Department of Science and Mathematics Education
College of Education and Behavioral Studies
Addis Ababa University
Abstract: The study was conducted on the extents of higher education inputs (instructional
materials, teaching methods, and practical activities and assessments techniques) and
compared with skills of implementation as a fact of completion.
Instructional materials are tools used to support deliveries of lessons andsupport educators
as well as learners in making lessons easier, attractive andunderstandable and do work of
excellence as a fact of completion.
Interviewsand observation checklists were used to collect hard and soft data, both
quantitative and qualitative data evaluationand descriptive methods were employed.
As a result, inputs of higher education systems is ended with only 57% of the total designated
courses of undergraduate biology and the rest 43% remained as an educational wastage.
Graduate studentsof biology are unable to execute 71% of expected practical
activities;microscopy, experiments and laboratory works beyond the theoretical knowledge
acquired,but performed ineffectively only 29% of practical activities after completion of
higher education.
The overall educational wastage of higher education accounts for 43% of expected
knowledge as a fact of completion that evidently showed the decline of the quality of the
higher education systems,which created joblessness and calls for improving instructional
materials and education systems to the level of doable sets.
The study is concluded with the need to prepare sufficient instructional materials and
improves higher education systems with full schooling facilities, qualified staffing and
benefits and bridge theory and practice to bring changes in producing skilled man power and
build up the ability to conduct work of excellence in the process of growth and national
development.
Keywords:Higher education, Instructional materials, Systems, Insufficient and soft data
33
1. Introduction
Education is increasingly seen as a major contributor to national wealth and economic
development by sustaining essential objectives and global relevance of both teaching and
research.
Instructional materials are contents that convey the essential knowledge and skills of a
subject for transferring information to students or materials designed for uses by teachers and
students as learning tools to acquire facts, skills or opinions and developreasoning in doing
professional works.
In this research, instructional materials means course outlines, scripts, modules, lecture notes,
manuals, teaching aids, books, reference reading materials,lab guidance, information to the
students and materials that equip learners with knowledge, skills and transferable
competencies needed to succeed after graduation.
Planning instructional materials deals with preparation of explicit guidance on how to help
students learn better and develop focus on how to structure materials for promoting the
process of teaching and learning.
Instructional materials need standardization, which is also the process of improving and
developing the quality of teaching materials and higher education systems to the level of
internationally recognized sets that enable graduates to become proficient and skillful
performers of jobs.
According to Ross (2012), higher education is a dynamo for economic growth, powering the
supply of high level skills, bridging with technological advances for improving productivity
and opening up new markets and hence, where education flourishes in a standardized quality
so is an economy.
The quality of higher education systems is the one with full facilitates, introduction of new
ideas and investigations linking to foreign countries’ professional skills through researchers.
Nonetheless, this depends up on the strengths and qualities of higher education systems and
its ability to encourage knowledge sharing, collaboration, well-developed facilities for
opening opportunities to learn more practically than theoretical with substance clarity and
transparency of workable exercises higher education.
In view of that, higher education systems are agents of changes in the academic landscape
although very little attention is given to the operation, particularly in standardizing and
setting the quality of higher education systems and instructional materials to the level of
global contexts to make them work better.
34
The higher education systems of biology should be founded on scientific ways that involves
consistency and active learning strategies to engage students in the systematically tested
process of biology teaching methods at its best.
Proficiency and effective teaching in biology needs exercising various methods of teaching,
self-preparations, conducting different experiments that push learners to excel professionally
and do practically.
In this study, higher education means all types of studies and researches of post-secondary
levels approved by the competent State authorities as Universities awarding first degrees of
graduation.
However, the current educational inputs of higher education systems (teaching, learning by
doing and assessment techniques) are not relevant with what graduates do as a fact of
completion.
As a statement of the problem, why graduates unable to conduct relevant practical activities
as a fact of completion was the notion that led to look into the access of students to all
instructional materials (course outlines, handouts or scripts, lab manuals, reference books as a
source for information on recent discoveries of biology) and education systems (teaching,
methods and assessment techniques) including the practical exercises they conduct to
complete particular courses.
The study was conducted using graduate students holding their first degrees in biology from 8
different Universities and joined the professional trainings called Postgraduate Diploma in
Teaching biology (PGDT), before taking up jobs as teachers after successfully passing
selection criteria set for qualifying to become a teacher.
As an instructor of biology PGDT trainees, while teaching the course Biology Subject Area
Methods, weakness in content knowledge of biology and issues of inability to perform
designated practical activities such as microscopy, lab works and experiments were
identified.
Consequently, this study was conducted on investigating the quality of inputs of higher
education systems (access to all required instructional materials, education systems and
practicalities of learning) in comparison with the quality of educational outputs (the ability of
graduates to do work, particularly of biology with reference to content knowledge and
practical activities).
The main purpose of the study is to assess the access of students to instructional materials and
the quality of higher education systems, compare with the practical knowledge or experience
gained and recommend possible improvement to the required sets.
35
The specific objectives of the study are to find out:
To what extent learners access instructional and reference materials in higher education.
Processes of education systems (teaching methods and assessment techniques used) and
Skills and competencies transferred through practical performances or activities of graduates
as a fact completion.
2. Methods and materials

2.1 Methods
In order to reach the ultimate findings and solve identified problems, both quantitative and
quantitative data evaluations and descriptive methods were used.
The focal core of the research is the access of learners to instructional materials (course
outlines, teaching materials and reference books or journals), teaching effectiveness (teaching
methods and practical activities) and assessment techniques of higher education systems.
It is an approach that weighs evidences with the senses to the identified problems and
respective hard and soft data from several vantage points.
The research mostly focused on the systematic assessments of abilities of the PGDT students
of biology while discussing the content knowledge of biology, conducting practical activities
within theclassroom dynamics of doing minds on and hands on activities, experiments and
critical thinking in biology.
2.2 Materials
Materials (tools) used to collect required data are in-depth interview questions and face-to
face observations of the professed PGDT students attending the program while taking the
course “Biology Subject Area Methods” during term one of 2015 summer classes.
Consequently, collected information are arranged into two tabulated forms for both
responses to interview questions as well as for observing practical performances adjusted to
contain values for each piece of work conducted.
To both interviews and observations, 20 graduated students of biology since 2012 and
attaining the summer Postgraduate Diploma in teaching biology (PGDT) were involved in
responding to each interview question and conducting practical activities.
Interview questions were set to focus on the access of learners to all course out lines,
instructional materials (hand outs, manuals and scripts and reference materials) and higher
36
education systems (teaching methods, practical activities and assessment techniques). The
tools were prepared and distributed to each biology PGDT student to provide responses either
in written forms or orally through focal group or cluster discussion (table 1).
Table 1 Responses to interview questions on inputs of higher education systems
For the face-to-face observation that focused on assessing the abilities of graduates to
perform practical activities, skills of implementing the accumulated experiences during their
stay at Universities and how much of the knowledge gained enabled them to execute a piece
of work by doing as a result of completion of designated courses.
Using checklists to observe (assess and record) each activity of the designated task to be
Areas of Interviews
questions Focal points Response on higher education
inputs
Degree of actualization Scores
Access
materials
for BSCto study
of
instructional
all courses Course outlines and
guidelines New course outlines 65%
Old copies 20%
Never get 15%
materials
Instructional Handouts 52%
Lecture notes 33%
Never get 15%
materials
References Available in libraries 29%
Other sources 31%
Never find 40%
Teaching effectiveness
throughout BSC study Teaching methods Student-centeredness 27%
Teacher-centeredness 59%
Other methods 14%
Practical
of biologyactivities
class Ineffective lab 42%
Token experiments 41%
Without lab 17%
Assessment
Used
studythroughout
techniques
BSC Termed exams Mid and final term
exams 70%
assessments
Continuous Quizzes and tests 28%
Practical assignments 2%
exercised within the given time schedules, graduates were attested while conducting expected
tasks like lab works, simple experiments such as finding the position of stomata on tree
leaves and do related activities of biological science in practice independently.
37
It is a purposeful search to investigate why the performance of graduate students remains
ineffective practically and find out the mystery that blocks the success of graduates to use the
knowledge in reality, reasons for failures in practical works, particularly irrespective to
theoretical knowledge gained (table 2).
Table 2 Observation checklist on practical activities of respondents
Tasks Weaktasks
given points of students to perform Degree of
performance
Discussing contents Missing too much concepts of the contents and 32%
of biology posed to vulnerableknowledge
Microscopy Many challenges in understanding and 18%
3. unable to operate microscopes easily
Biology lab
activities Difficulties
under the microscope,
in using microscopes,
identify objects
observe
and 31%
writing up reports
Experiments Incompetent to useequipment, chemicals and 22%
works in biology do designated experiments of biology
Assignments Insufficient and incompetent to conduct the 42%

work of excellence
All over Task performance ability across population 29%
Data evaluation and analysis

The study delves into the recent higher education systems, focusing on how teaching,
learning and assessment are exercised and how far their effectiveness is practiced in
educating students, brought changes and shots to find out to what extent graduates perform
activities efficiently in acceptable work of excellence.
The quantitative method is employed to collect empirical data and convert responses of
graduate students to interview questions and evaluation of students on practical activities
gathered through face-to-face observations into numerical data arranged in the form of
percentile expressions.
Evaluation and analysis of data were based on information in both tables with comparisons of
educational inputs and what graduates do in practice after completion of learning (output)
38
(table 1) and observation of PGDT students while conducting various tasks using checklists
purposely set to investigate the quality and level of knowledge accumulated by graduates
(table 2).
In higher education, respondents confirmed that learners have access to new course outlines
65%, 20% old copies and never get 15% of course outlines throughout their BSC study in
biology.
Concerning instructional materials, learners have access to 52% of the handouts, 33% depend
up on lecture notes they take and the rest 15% remain as without.
Reference books and journals composing of new findings in biology to which learners have
access at most is 60% and the rest 40% remain without.
The teaching methods used in higher education systems were 59% depended on using
teacher-centeredness, the student-centeredness approach has accounted for 27% whereas the
rest 14% was informal way, which mostly conducted through providing reading materials and
students sit for tests without any explanations or further information.
In biology practical activities, respondents reflect that 42% ineffective lab and 41% was
token experiment in designated experimental classes and the rest 17% of the courses are
finished without lab, experiments or practical activities.
Data analysis reflects evaluations of responses provided by PGDT biology students as
described with its interpretations.
In view of this, in higher education, 70% of the total assessments depend up on termed or
final exams, 28% of the assessments were quizzes and tests whereas only 2% of the
assessments were for practical assignments.
In response to the first interview question that focuses on the accessof learners to all course
outlines (course description, contents, time budget of start and finish including assessment
techniques) prescribed for the undergraduate program of biology, respondents commented
that at an average, they get only 70% of the course outlines, they search on their own and
copy from friends 20% of the old copies, whereas the rest 15% of the courses they start and
end without any course outlines.
It shows that for 30% of the total courses, learners begin learning courses almost without
course outlines and complete the higher education without understanding.
On the other hand, it shows 30% input impacts that influence students in attaining the course
and affects that much their success in gaining both theoretical and practical knowledge in the
field of study.
39
The second interview question focused on the access of learners to instructional materials
(handouts or scripts, lecture notes and lab manuals) of all courses, for which respondents
remarked that they get handouts for 52% and the rest 48% depends up on individual search
for old copies or other orientations.
This distresses the learning capacity, interest of the students by its unclearness to follow up
lectures and lessons presentation from beginning to the end and make all things hard to cope
with.
Respondents also confirmed that they usually loose nearly 85% of the learning materials they
due to get for the reasons that many are unreadable, simply left at copy houses, but must sit
for their termed exams based on their own preparations and lectures that most of the times
corrupted by none-educational appointments.
In response to the question focused on access to journal containing new investigations of
scientific researches of biology with the ongoing global levels, respondents say that they hunt
for more than 60% in libraries and local journals on own search and the rest 40% is said to be
nil. It indicates that learners are 40% far-off the recent scientific information and discoveries
of biology.
In response to the question dealing with lab practices and experiments for each respective
course during their higher education learning, respondents commented that they practice 42%
of all courses ineffective lab exercise and 41% of token experiments that altogether makes
81% whereas the rest 19% of the expected practical activities of all designated courses of
biology are considered as an educational wastage due to the lack of facilities and responsible
staffing.
Accordingly, practical activities are ineffective so that graduates are unsuccessful or
unproductive under the circumstance of higher education study life.
The last interview question is directed to the quality of assessment techniques used in higher
education systems and its dimensions to measure to what extent learners have exercised what
engage them to do jobs after the fact of completion with BSC in biology.
Learners mostly cope with new ideas and materialize when they exercise learn by doing and
exercise in practice that enable them if they are also assessed by practical activities instead of
theoretical objective tests.
However, according to this research, only 2% of the total courses are assessed using practical
activities and the rest are done through termed tests or exams that mainly depend up on
objective tests.
40
Face-to-face observation was conducted and the practical performances of graduates was
assessed and recorded while they conduct proposed sets of assigned tasks such as classroom
discussion of biology content, lab operation and experiments and actual performances in
biology and functional skills of graduates within the contexts of higher education learning.
Narrative records of observation were undertaken using checklists that attempted to indicate
individual and group abilities, variance of performance and understanding capacity of each
graduate student.
In summary of evaluation of responses given by 20 graduated students from 8 Universities,
and observational evaluation in practices, consolidated ideas that reflect the status of higher
education systems indicates that showed that the efficiency of the higher education systems
input at an average accounted for 57% whereas the rest 43% is a loss of education whereas
the ability to execute posed assignments across population was found out as 29% and the rest
71% remained as educational wastage.
4. Results
The outcome of data analysis (table 1) showed that the efficiency of the higher education
systems at an average accounted for 57% whereas the rest 43% is a loss or educational
wastage.
Findings on the practicality of biology through practical observation of respondents on
practical performances of microscopy, lab equipment operations, exercises of biological
experiments in biology have accounted for 29% and 71% is posed to the theoretical parts or
unsuccessfulness (table 2).
The result of both data evaluation of higher education systems input and the ability of
graduate students to perform work of excellence as a result of completion of higher education
as an output has accounted 57% and the rest 43% of the expected experience remained as
educational wastage.
Accordingly, the result mirrors out that the quality and standard of instructional materials and
education systems of higher education is evidently decreased showing that graduates of
biology are practically unsuccessful to do professional and practical works and remained
sticking to theoretical part mostly.
It is due to the reasons that learners begin and finish courses without understanding “the -
what and the - how” of learning, teaching methods and learning styles are 85% theoretical,
41
assessment techniques are 98% termed tests and practical activities in biology (lab,
experiments and field works) are improperly conducted.
5. Discussion
Standardization of instructional materials of higher education systems depends upon several
patterns of which instructors play pivotal roles to make the materials valid and reliable by
timely innovating and up-dating the teaching forces to what learners do in practice after
completion of the study or graduation.
Learners can escape bad teaching, but cannot avoid bad assessment that teachers use to mark
and rank them so it depends up on setting good tests and use proper assessment techniques.
The result of the study shows that the lack of good teaching, which is about caring, nurturing
and developing minds and talents, devoting time, spending time on grading, designing and
redesigning courses and preparing materials to enhance instructions.
Graduates of higher education try to find employments in line of their qualifications, but the
higher education curricula are often slow to respond to the changing needs, not only in
biology, but in the wider fields and fail to anticipate or shape the careers of tomorrow.
In view of shaping the career of tomorrow, the European commission (2015) states that
“reforms and modernizations of higher education systems that depends on the competence
and motivation of teachers and researchers with better working conditions, initial and
continuing professional development and with better recognition and reward of teaching and
research excellence are essential to attract and retain high quality of academic staff of higher
education”.
Career development in science and technology of any nation is very important that learners
should have to be able to achieve so much (Kola, A, 2013).
Many higher education institutions are currently trying to balance forces of instructional
materials and educational systems to upgrade the quality to the levels of required standards.
However, massification of higher education or extending the number of higher institutions
and ignoring educational facilities, instructional materials, staffing with qualified
professionals and providing insufficient education systems are keys that locked up the
production of skilled, effective and efficient man power to standardized levels.
In view of this, our higher education are facing the dilemma of expanding higher institutions
and staffing and the need to support top quality of professional works and researches that
42
could transfer practical knowledge to learners, but this condition is so far at significant
disadvantageswith special strains onthe quality of most higher education academic systems.
Good teaching is reasoning, motivating students to learn and teaching how to learn, doing so
in a manner, which is relevant, meaningful and memorable. It is about treating students as
consumers of knowledge, doing the best to keep on top of the field biology and bridging the
gap between theory and practice.
Higher education must promote and protect free intellectual inquiry and expression in its
higher education learning, teaching, research activities and the role of teachers is essential in
creating a high quality of student experience enabling the acquisition of knowledge,
competences and skills after completion.
Learning is a process, not a product and so is teaching and educators need to take time to
reflect on their teaching practices and assess students’ learning to continue evolving and
improving the learning experiences of students using standardized instructional materials and
education systems including the application of new instructionaltechnologies.
Dwyer et al. (1997) emphasize that “the integration of ICT to instructional materials and
teaching methods could be more effective and sustainable in education systems and argued
that higher education should also adopt electronic learning technologies, which is a
systematic way of designing, carrying out and evaluating the teaching and learning processes
that make instructions more effective, understandable and meaningful”.
UNISCO (2009) describes that “South Korea stands apart as the most extreme and arguably
most successful that has achieved a remarkable feat so that the country is 100% literate and at
the forefront of international comparative tests of achievement. But this success comes with a
price that students are under enormous unrelenting pressure to perform hard work and
diligence and there is no excuse for failure”.
In view of this, our higher education institutions are expected to work hard in order to revise,
reform and up-date instructional materials and the whole education systems to the
standardized levels of quality to produce competent professionals.
Among the various systems of instruction proposed so far, modular instruction is one of the
newest ways, which either partly or entirely based on modulesthat enableto alleviate the
current problems of instructional materials of higher education and meet the needs of today's
students more adequately than the traditional instructions with respect to the content
knowledge and quality of learning.
43
Biology education, particularly must concentrates on the instruction methods that addresses
what and how learner practically understand the concepts, clear out misconceptions and make
use of the knowledge for the development of their career and the nation.
However, most of the higher education systems hardly pay any attention to the development
of thoughtful experience and many educators have not well-developed responsibilities of
understanding themselves so that theyignore the thought of imparting knowledge to the
students.
In higher education, required instructional materials are not well prepared, innovated timely
and provided to the learners on time, teaching methods are not developed in view of
delivering practicable knowledge and the learning styles are not with respect to the modern
ways termed as inquiry based learning.
In addition, assessment techniques commonly used are termed tests and neglect concept of
continuous assessments through which learners gain feedbacks and practical knowledge.
Turner et al (2011) states that “higher education graduates are recognized by certainqualities,
like honesty, integrity, initiative, curiosity, truthfulness, cooperativeness, confidence and
ability to work alone and in a group”.
However, this is paradox to the result of this study, in which most of graduates lack self
confidence in conducting duties related to the field of biology, incompetent to independently
perform activities like microscope operation, lab works and experiments.
It means the whole education systems of higher education are 57% impracticable, which has
heavily influenced the practical knowledge and performance of learners in reality.
The issue of capacity constructing to perform biological tasks after completing higher
education deals with the concept to what extent learners have understood, retained
experiences and skills gained and what they can do as a fact.The lack of instructional
materials (scripts, reading materials and manuals etc.) of courses of higher education systems
is unbecoming and made the learning ineffective.
In higher education systems, graduates exercise little practical activities, wasted time and
remain ineffective that paralyzed their practical performance in biology.
An access to the new findings of biological researches with the ongoing standard is very few
so that it blocks the influxes of information and discoveries that learners due to gain.
In higher education, assessment techniques are 83% termed tests and only 2% is assumed to
be continuous or assignments.
Instructors use termed tests to mark and rank students so that the higher education systems
provide practicable knowledge only 2% and 98% theory.
44
As a result of practical performances of respondents, higher education learning is
impracticable, wasted and posed to incompetence, exposed many graduates to joblessness,
dependency and load on their family even after graduation.
The consequence is reflected by the joblessness and dependency of graduates, which is
caused by very poor instructional materials, lack of facilities, qualified staffing, bad teaching
methods and omitting or ignoring practical exercises of biology in higher education systems.
6. Recommendation
Understanding and misunderstanding of biology contents, concepts and putting into practices
mostly depend upon the quality of instructional materials and transformed education systems
of higher education to students.
After probing ranges of instructional materials and higher education systems using proper
approaches through graduates of biology, the quality, standard and its practicable knowledge
are found less effective and incompetent so that the following recommendations are
forwarded.
Instructional materials of higher education need to qualify required standard, consistency and
innovation of the contents to connect to the practical knowledge student able to do in practice
after completion of the course in practicemake increasingly dynamic agents of change this
academic landscape.
Exploring areas of strengths or weakness that require improvement in teaching practicesand
reflecting in-action and on-action to maintain the balances of teaching and learning is very
important to upgrade the quality of higher education to grow professionally and shift from the
theoretical lesson delivery into learning by doing.
Integrating the new learning technologies into higher learning institutions and practical uses
give the best approaches for addressing each of the challenges so that hands on approach of
activities of biology lessons necessitate to be exercised.
Higher education systems need adequate facilities, quality education systems and qualified
staffing with benefits that can satisfy and retain professional educators and sustain in
providing practicable knowledge to solve problems arising from the lack of instructional
materials and education systems with acknowledged and pedagogically sound teaching
methods and better understanding of learners to underpin skill and abilities of the work of
excellence in biology.
45
7. Conclusion
The overall scenario of the new higher education systems does not match with the global
quality standards as well as with practicalities.
Higher education institutions of Ethiopia today, mostly emphasize on extension of higher
education and production of graduates inmass that are divorced from quality and standards
irrespective to professionalism, which results in increasing the number of unemployed
graduates and joblessness.
In the view of higher education extension and massification of University graduates, the
shortage of qualified teaching staff that can revise and innovates teaching forces, produce
standardized instructional materials and impart thoughtful knowledge, deliver lessons
properly have negatively influenced the quality of instructional materials, education systems
and made it less effective.
Higher education that had to facilitate modernized education systems to provide graduates
with high level, employable as well as transferable skills to equip for fast changing labor
market are lagging behind the hot issues of higher education products.
Although there is a strong need for flexible innovative learning approaches and delivery
methods to improve the quality and relevance, the escalating numbers of students joining
higher education every year from different background has put more negative pressure on the
qualification and competencies of graduates.
Deep learning is to occur when learning activities engage learners and challenge them to
apply, extend and critique knowledge and skills used in newly acquired abilities in different
contexts.
Quality education is experiences accumulated through a long chain of elementary, primary
and secondary schools that support the higher education systems, but if any of the teaching
and learning processes of these chains are ineffective and corrupted, the learners may face a
lot of problems at higher education levels so that improvements are required in all the chains.
Finally, higher education systems are expected to provide knowledge and know-how that
enable students to understand what they learn in relation to what they already know and
create abilities to generalize the subject biological sciences from their experiences and do
practically and develop future careers.
46
8. References
Dwyer, et al (1997): Teacher beliefs and practices part II: support for change:theevaluation
of teachers' instructional beliefs andpracticesinhighaccessto technology classrooms, CA,
USA
European commission (2015): European commission Education and training Higher

education policy. The European Commission publishes progress development in quality.
Kola, A. (2013): Importance of Science Education to National Development and Problems

Militating Against Its Development. American Journal of Educational Research
Turner, D. A. (2014): Standards and Guidelines for QualityAssurance in the European

Higher Education AreaEndorsed by theBologna Follow-Up Group, the Ministerial
Conference
UNESCO (2009): Trends in Global Higher Education: Tracking an Academic

RevolutionbyPhilip G. Altbach. A Report Prepared for the World Conference on Higher
Education.
Ross, W. (2012): The guardian network. The free encyclopedia education network. UK.
www.the free encyclopedia education.network
47
Are Tertiary Institutions Corrupt Free?
Bulama Kagu, Ph.D1, Ayuba A. Aminu, Ph.D 2, and Ibrahim Abubakar Njodi, Ph.D3
1Department of Education, 2Department of Management, 3The Vice Chancellor, University of Maiduguri
Nigeria
Corresponding author: Email: ayubaaminu6@gmail.com
________________________________________________________________
Abstract
The paper assessed some corrupt practices in Nigerian tertiary institutions and attempted to illustrate
counseling implications. Consequently, three objectives and three research questions were formulated
and answered. The population comprised of all academic and non-academic staff in all the tertiary
institutions in North-East Zone of Nigeria. Through the process of simple random sampling technique,
a total of 240 academic and non academic staff participated in the study. The instrument used to
collect data was questionnaire titled: Assessment of Corrupt Practices in Nigerian Tertiary Institution
(ACPNTI) with a reliability index of 0.75. The data collected were analysed through descriptive
statistics of simple percentage and bar charts. The findings revealed that significant corrupt practices
did exist in the admission, teaching and learning and budgetary and expenditure processes. Based on
the findings some recommendations were made that counsellors should apply appropriate
counseling techniques to staff and students in addressing matters of corrupt practices in order
to help in reducing corrupt behaviours in Nigerian tertiary institutions.
Keywords: Corruption, management, tertiary institutions, Counselling
________________________________________________________________
Introduction
Corruption is one of the social vices which many societies are struggling to overcome.
Corruption has been a major element of the poor governance and instability in most
developing and transition countries, Nigeria inclusive. Over the years, the Transparency
International and other International agencies have projected Nigeria as among the most
corrupt countries in the world (Bello, 2003). In its current rating Nigeria was 136th out of 174
countries studied (Transparency International 2014). The Vision 2010 Committee Report
(1997) indicated not only the politicians and the executives that are corrupt in Nigeria, but so
are bureaucrats, public servants, bankers, law enforcement agencies, the press and indeed
other members of the public and private sectors. In the Nigerian higher educational system,
corruption manifest in various forms. Admission into institutions of learning has been
bastadised through the influence of the money (Adedokun, 2003). Others include use of
teaching time for private business, failure of teachers to plan their lesson, poor methods of
evaluation, aiding and abating examination malpractices and using wrong teaching methods
and instructional materials as well as sexual harassment (Ekoja, et al 2003). Guga (2003),
identified disrespect for teachers and the school rules and regulations, truancy, unwholesome
relationship between male and female student and engaging in examination malpractice as
some corrupt practices engaged by some students.
In the views of several scholars, corruption has been associated with low economic growth,
lowering the quality and productivity of public investment and infrastructural service,
decreasing public revenue and increasing public spending, distribution of the corruption of
public expenditure, distribution of budget and accounting process with the ultimate
consequences of lower educational standard, weak economic and political growth, (Bello,
2003). Commenting Olajubutu (2003) that people in the corridors of power, many heads of
schools, ministry officials and contractors are all believed to be jointly involved in the corrupt
practices that rock the nation institution of learning at all levels. Quoting Ruzindalia (1977) in
Bello (2003:86) that corruption in Africa has led to road and decaying infrastructure,
48
inadequate medical services, poor schools and falling of educational standard… repairs of
building equipment, vehicles and physical and social infrastructure have been paid for,
repeatedly and never performed. Corruption distorts the economy through the waste and
misallocation of resources.
It is against this background that the paper assessed some corrupt practices in Nigeria tertiary
institutions and its implication to counseling.
Objectives of the paper

The main objective of the paper are to assess the extent of corrupt practicing in admission
process in Nigerian Tertiary Institutions. Other Specific Objectives are:
Find out the extent of corrupt practices in teaching and learning process
Assess the extent of corrupt practices in budgeting and expenditure process.
Research Questions
The following research questions are considered:
What are the extents of corrupt practices in admission process in the Nigerian tertiary
institutions?
What are the extents of corrupt practices in teaching and learning process in Nigerian tertiary
institutions?
What are the extent of corrupt practices in budgeting and expenditure process in the Nigerian
Tertiary Institutions?
METHODS
The study adopted survey research design. The population comprised of all the tertiary
institution in Nigeria. However, through purposive sampling techniques, significant number
of the tertiary institutions in North-East Zone of Nigeria (8 Universities, 6 Polytechnics and
10 Colleges of Education) took part of in the study. The instrument used for the collection of
data was a self-designed questionnaire tagged “Assessment of Corrupt Practices in Nigerian
Tertiary Institutions” (ACPNTI) with a reliability index of 0.75. The instrument was
administered to both selected academic and non-academic staff (10 each per institution)
totalling 240 and lasted for two weeks. Descriptive statistics of simple percentage and chart
were deployed to analyze the data.
RESULTS
The data collected were subjected to the above statistic mentioned and the results are
presented in the following tables:
Table I: Corrupt Practices in Admission process
S/NO STATEMENT YES
% NO
%
Do tertiary institutions adhere strictly to the admission
requirements? 42 58
Students
choices. are often placed in programmes/courses not of their 65 35
Bribes in
placed areprestigious
being offered
courses.
by candidates/parents to get their wards 40 60
Favouritism
by some officers.
is used in screening of credentials at the entry point 70 30
Deliberate
gratification.
hiding of admission letters with the view of seeking 33 67
49
Fig. I: Corrupt Practice in Admission Process
Table I and figure I above presented a frequency distribution on corrupt practices in the
admission process of tertiary institution in Nigeria. About 58% of the respondents disagreed
that tertiary institutions in Nigeria adhere strictly to the admission requirements. However,
65% of the respondents opined that students are often placed in programmes and courses of
their choices. 60% of the staff disagreed that bribed are being offered by candidates and their
parents to secure admission into prestigious courses. Furthermore, 70% of the respondent
agreed that favouritism is used in screening of credentials at the entry point by some officers.
Finally, 67% of the staff disagreed that admission letters are deliberately hiding with the
views of seeking gratifications.
Table 2: Corrupt Practices in Teaching and Learning Process
S/NO STATEMENT YES
% NO
%
by
Mandatory sales of handouts/textbooks lecturers 58 42
Sexual harassment by lecturers to pass student in an examination 53 47
Non-commencement of lectures as at when due 65 35
Inadequate curriculum coverage by lecturers 60 40
Aiding and abating examination malpractices 55 45
Engagement by
expense of their primary
lecturers
assignment
into many part-time vocation at the 70 30
50
Fig. 2: Corrupt Practice in Teaching and Learning Process
Table 2 and figure 2 showed a frequency distribution on corrupt practices in teaching

and learning process. About 58% of the staff agreed that mandatory sales of handout/textbook
are done by some lecturers. Similarly, 53% of the respondent agreed that some lecturers
harassed student sexually to pass them in examination. Furthermore, 65% of the staff agreed
that some lecturers do not commence lectures as at when due. Also 60% of the staff believed
that some lecturers do not adequately cover their curriculum. 58% of the staff also believed
that some lecturers aided and abated examination malpractices. Finally, 70% of the
respondent agreed that some lecturers engaged in too many part-time vocations at the
expense of their primary assignment.
Table 3: Corrupt Practices in Budgeting and Expenditure Process

S/NO STATEMENT YES
% NO
%
Budgets of institutions are not realistic 80 20
Gratifications/gifts are often offered before budget defence 54 46
Duplication
budget of projects are deliberately made to feature again in the 52 48
Expenditure do not actually tally with budgetary procedure 65 35

the
Auditing
budgeting/expenditure
officers sometimesprocess.
are being bribed to overlook lapses in 72 28
51
Fig. 3: Corrupt Practices in Budgetary and Expenditure Process
Table 3 and figure 3 above presented a frequency distribution on corrupt practices in

budgeting and expenditure process. About 80% of the respondent agreed that budgets of
institutions are not realistic. Furthermore, 54% of the staff agreed that gratification/gifts are
offered before budget defence. Similarly, 52% of the staff believed that duplication of
projects is deliberately made to feature again in the next budget. 65% of the respondent also
agreed that expenditure do not actually tally with budgetary procedure. Finally, 72% of the
staff agreed that auditing officers sometimes are being bribed to overlook lapses in the
budgeting/expenditure processe.
DISCUSSION
It is evident from the first finding of the study that significant level of corrupt practices did
exist in the admission process. Such practices includes some institutions not strictly adhering
to the admission requirements, misplacement of student into programmes/courses;
favouritism in the admission screening process and bribes being offered by
candidates/parents to secure admissions. This finding corroborate with the finding of
Adedokun (2003) where he stressed that admission into institution of learning have been
bastardised through the influence of money.
The second finding of the study revealed that a significant corrupt practices exist in teaching
and learning process in tertiary institutions of Nigeria. The manifestation includes mandatory
sales of handout/textbook, sexual harassment, non-commencement of lectures in good time,
aiding and abating examination malpractices and too many part-time responsibilities at the
expense of their primary assignments. This finding also corroborate with the findings of
Ekoja et al (2003) that some teachers use teaching time for private business, wrong use of
teaching methods and evaluation, sexual harassment, truancy among other corrupt practices
that are tenable in Nigerian tertiary institution.
The third finding of the study also revealed that in most tertiary institutions unrealistic
budgets are presented, gratification were offered during budget defense, deliberate
52
duplication of projects and expenditures not tallying with budgeting procedure. This finding
agrees with the study of Bello (2003) that gaps exist between public revenue and expenditure,
distortions of budget and accounting process, ministry officials and heads of schools involved
in corrupt practices, etc.
IMPLICATION FOR COUNSELLING
From the foregoing, corruption in Nigeria is real and has infected virtually all sectors of the
society including the educational system. So many measures have been put in place to arrest
the situation including the enactment of Anti-Corruption Act which was signed into law on
13th June, 2000 (Aku, 2003). Apart from creating offences relating to corruption, the Act
provides various punishments for contravention of various provisions and yet the impact is
insignificant.
Since counseling is generally believed to be a panacea to ignorance, poverty and social mal
adjustment and a viable instrument that can effect positive change in behaviour, create
awareness and develop positive interpersonal relationship among individuals (Kagu 2014)
then it can have a wider implications to reduce corrupt practices. Counseling should make
Nigerian informed about the dangers of indulging in corrupt malpractices which are deeply
rooted.
Through vocational counseling techniques, staff and student would be guided to choose
courses in congruence with their abilities and interest. Counselors in tertiary institution
should regularly be talking to staff on moral counseling to shun such anti-social behaviours
like sexual harassment, examination malpractices and bribery.
Counseling should assist in changing the wrong attitudes to work exhibited by many staff.
Series of counseling sessions should be organized by University/Colleges authorities where
job ethical conduct will be re-emphasized to workers and those with serious maladjustment
problems should be treated through appropriate counseling theories. Through the appropriate
application of didactic counseling, rational emotive therapy, logotherapy and other behaviour
modification counseling techniques, issues relating to most of these corrupt practices can be
solved.
RECOMMENDATIONS
Consequently arising from the foregoing discussion, the following recommendations are
made:
Government should review the Anti-Corruption Law (2000) to include corrupt practices in
Nigerian tertiary institutions.
Periodic workshops and seminars to be organized by Nigerian tertiary institutions Authorities
on curbing corrupt practices in the institutions.
Government should ensure that corrupt budgetary and expenditure practices by tertiary
institutions are strictly checked and penalty be enforced on any anomalies discovered.
Educational Curriculum should include issues related to Corrupt Practices in Nigeria.
Counsellors should apply appropriate counseling techniques to staff and students in
addressing matters of corrupt practices.
CONCLUSION
Nigerian tertiary institutions are not corrupt free as the phenomenon could be found in the
admission process, teaching and learning process as well as in the budget and expenditure
processes with wider consequences on productivity, accountability, transparency, quality and
responsibility. Most of the institutions studied are significantly affected by this situation and
the need for counselors to reverse the trend becomes imperative.
53
References
Adedoku, R.A. (2003) Solutions to Corrupt Practices in Nigeria. Ahmadu Bello University
Journal of Counselling and Human Development. Vol. 3 No. 2 (54-60).
Aku, A. (2003). Perspective of Corrupt Practices in Nigeria. Ahmadu Bello University

Journal of Counselling and Human Development Vol. 3 No. 1 (1-7)
Bello, I.M. (2003). Political Perspectives of Corrupt Practices in Nigeria. Ahmadu Bello
University Journal of Counselling and Human Development Vol. 3 No. 1 (82-90)
Ekoja, A.A., Ekoja, C.O. and Happiness, I (2003). Sexual Harassment. A Corrupt Practice in
Benue State University, Makurdi. Ahmadu Bello University Journal of Counselling and
Human Development Vol. 3 No. 2 (87-102)
Federal Government of Nigeria (1997) Vision 2010 Committee Report. Abuja, Nigeria.
Guga, A. (2003). Corrupt Practices in the Implementation of Secondary School Curriculum.

Ahmadu Bello University Journal of Counselling and Human Development Vol. 3 No. 2 (68
77).
Kagu, B. (2014). Counselling Inputs in Transforming the Nigerian Nation. Lead Paper
presented in a Maiden National Conference organized by Bala Usman College of Legal and
Islamic Studies, Daura, Katsina State, 9-11th April, 2014.
Olajubutu, O.T. (2003) Incidence and Providence of Corrupt Practices in Nigerian

Educational Institutions. Ahmadu Bello University Journal of Counselling and Human
Development Vol. 3 No. 2 (78-86).
Transparency International (2014). Corruption Perception Index. www.transparency.org

retrieved 23rd May, 2014
54
The result of cooperative learning through web utilizing
data mining technique to group learners
Pensri Amornsinlaphachai
Department of Computer Education, Faculty of Science andTechnology,
Nakhonratchasima Rajabhat University, Thailand
kokkoy@hotmail.com
Abstract
The efficiency of the models created from seven data mining algorithms that are Artificial
Neural Network, K-Nearest Neighbor, Naive Bayes, Bayesian Belief Network, RIPPER, ID3
and C4.5 is compared and it was found that the models created from C4.5 has the best
efficiency; thus this model is selected to predict learning levels in computer programming
subject for cooperative learning through web to group learners according to STAD technique.
The accuracy of the selected model is about 74.8945% and the accuracy tests show that this
model is reliable. In this research, the learning model of cooperative learning through web
utilizing the selected model to group learners comprises of 5 elements that are data
management module, prediction and grouping module, learning resources, cooperative
community, and quiz module. In the experiment with the learning model, the results derived
from the experiments at Kanchanaburi Rajabhat University and Nakhon Ratchasiam Rajabhat
University are correspondent that are the students' achievement derived from cooperative
learning through web is higher than the students' achievement derived from typical learning
without grouping learners. Moreover the learning progressive-value derived from cooperative
learning through web utilizing the selected model to group learners is higher than the learning
progressive-value derived from cooperative learning through web with grouping learners by
the lecturer.
Keywords: data mining, cooperative learning, constructivist

Main Conference Topic: Education, Teaching and E-learning
1. Introduction
Nowadays, most of learning environments in the real world still concentrate on knowledge
transmission rather than knowledge construction; while many educators encourage learners to
build their own knowledge (Spiro, R., Feltovich, P., Jacobson, Michael J., & Coulson,
Richard L., 1995; Mayer, R. E., 1996; Atherton, J. S., 2013;Amornsinlaphachai, P., 2014;
Deejring, K., 2014). This conforms to Thai National Education Act 1999 and Amendment
Act (No. 2) 2002 stating that the education will be based on the principle that all learners are
capable of learning and developing themselves and the learners are considered as the most
important. To support this notion, the internet technology and learning theories can be utilized
to advocate learners' community that focuses on learners' interaction and knowledge
construction. The social network originated from the internet technology can be used in
education as a medium among learners, teachers or lecturers and other experts whereas
multimedia technology (Mayer, R.E., 2005) is used to design learning environment. However,
students have limitation to develop themselves according to the principle of Zone of Proximal
Development (ZPD); thus weak learners need help from strong learners (Vygotsky, L. S.,
1962); and therefore cooperative learning can be used for developing learners (Deejring, K.,
2015). Nevertheless, to group learners for cooperative learning, lecturers always group
learners arbitrarily or let learners organize groups by themselves.
According to ZPD, cooperative learning by STAD (Student Teams-Achievement Division)
technique (Slavin, R. E., 1996) will group strong students with weak students; thus this can
improve students’ achievement. However, to group strong and weak students together by
55
using learning levels of previous subjects of learners, it’s not always correct. This is because
students who good at in one subject may not good at in another subject and this concept
corresponds to multiple intelligence theory (Gardner, H., 1983). Thus if we can predict
learning levels of students for a subject that is being taught; the performance of cooperative
learning should be improved. In computer science, data mining is a reliable technique to
predict unseen data (Oladokun, V.O., 2008; Praveen Sundar, P.V., 2013; Ramanathan, L.,
Saksham Dhanda, & Suresh Kumar D, 2013; Tuomas Tanner & Hannu Toivonen, 2010)
whereas from our experience and preliminary survey, it was found that computer
programming subject is hard to comprehend for naïve learners. Therefore our research
focuses on using data mining technique to predict learning levels in computer programming
subject to group students for cooperative learning through web.
2. The Purposes of Research

Four main purposes of this study are as follows.
2.1 To select a data mining model used to predict the learning levels in computer
programming subject to group learners for cooperative learning through web by comparing
the efficiency of the models created from seven data mining algorithms that are Artificial
Neural Network : ANN, K-Nearest Neighbor : KNN, Naive Bayes : NB, Bayesian Belief
Network : BN, RIPPER called JRIP, ID3 and C4.5 called J48.
2.2 To test the accuracy of the selected model.
2.3 To develop a learning model of cooperative learning through web utilizing the selected
model to group learners.
2.4 To compare learning progressive-value of learners studying with cooperative learning
through web that group students by the selected model and by the lecturer.
3. The Scope of Research

The scope of research described here consists of the target group, the scope of content and the
research variable as the following details.
3.1 Target group
3.1.1 The target group to select a data mining model is 474 students consisting of
second, third, fourth year and fifth year students studying in computer education field at
Nakhon Ratchasima Rajabhat University, Thailand. This target group studied computer
programming subject in the year before 2014.
3.1.2 The target group to test the accuracy of the selected model consists of 32 first
year students studying in computer education field at Nakhon Ratchasima Rajabhat
University and 21 first year students studying in computer science field at Kanchanaburi
Rajabhat University in 2014.
3.1.3 The target group for cooperative learning through web consists of students at
Nakhon Ratchasima Rajabhat University and Kanchanaburi Rajabhat University in 2014 as
the following details.
3.1.3.1 For cooperative learning through web using the selected model to
group learners, the first group of 32 first year students studying in computer education field at
Nakhon Ratchasima Rajabhat University.
3.1.3.2 For cooperative learning through web with grouping learners by the
lecturer, the second group of 32 first year students studying in computer education field at
Nakhon Ratchasima Rajabhat University.
3.1.3.3 For cooperative learning through web using the selected model to
group learners, 21 first year students studying in computer science field at Kanchanaburi
Rajabhat University.
3.1.3.4 For cooperative learning through web with grouping learners by the
lecturer, 15 second year students studying in information technology field at Kanchanaburi
Rajabhat University.
56
3.2 Scope of Content
The content utilized in this research is a part of the computer programming subject at
Nakhonratchasima Rajabhat University, Thailand. The content of this subject corresponds to
computer programming subject at Kanchanaburi Rajabhat University, Thailand.
3.3 Research variable
The research variables studied in this study are as follows.
3.3.1 Independent variables are as follows.
3.3.1.1 The efficiency of the models created from 7 data mining algorithms
that are ANN, KNN, NB, BN, JRIP, ID3 and C4.5
3.3.1.2 Three types of learning that are typical learning without grouping
learners, cooperative learning through web with grouping learners by the lecturer, and
cooperative learning through web using the selected model to group learners.
3.3.2 Dependent variables are as follows.
3.3.2.1 The selected model used to group learners for cooperative learning
through web
3.3.2.2 The accuracy of the selected model
3.3.2.3 Learning progressive-value of learners
4. The Research Instruments

The research instruments used in this research are as follows.
4.1 The selected model used to group learners for cooperative learning through web
4.2 The learning model of cooperative learning through web utilizing the selected model to
group learners
4.3 The assessment forms to confirm quality and usability of the learning model
4.4 The learning achievement tests for typical learning and cooperative learning
5. Data Collection and Analysis

The data are collected and analyzed as follows.
5.1 The efficiency of the models is indicated by the value of correctness called accuracy,
precision, recall and F-Measure; thus these values are analyzed by using mean (X). Besides
the efficiency of the models, processing time and mean absolute error are used to select the
model for grouping learners as well. The qualitative data regarding to the efficiency of the
models are collected and analyzed by using the interpretation analytic descriptive and
summarization.
5.2 The accuracy of the selected model is indicated by comparing the achievement of
students studying with typical learning and the predictions derived from the selected model.
These data are collected and analyzed by using percentage (%).
5.3 The learning model is evaluated by the experts. Three facets of assessment are (1)
learning content, (2) design based on theories and principles and (3) media and technology.
The result is analyzed by summarizing interpretation.
5.4 The students' achievement and progressive-value are collected and analyzed by using
mean (X) and percentage (%).
6. Results
The result of this study can be summarized as follows.
6.1 The result for selecting data mining models
Seven models to predict the learning levels in computer programming subject are created
from seven data mining algorithms that are ANN, KNN, NB, BN, JRIP, ID3 and C4.5. The
efficiency of these models are compared and the model with the best efficiency will be
selected to predict the learning levels to group learners for cooperative learning using STAD
57
technique through web. The efficiency of the models created from seven algorithms are
shown in Table 1.
Table 1. The efficiency of the models created from seven algorithms

Algorithm Correctness Precision Recall F-Measure Mean Absolute Error Time
ANN 65.6188 0.653 0.656 0.654 0.2288 3.04
KNN (K=1) 66.8776 0.657 0.669 0.655 0.2401
KNN (K=2)
(K=3) 68.1435
70.6751 0.668
0.688 0.681
0.707 0.662
0.683 0.2504
0.2604 0
NB 72.7848 0.721 0.728 0.723 0.2242 0.02

BN (p=1) 72.1519 0.715 0.722 0.717 0.224 0
BN (p=2) 73.8397 0.728 0.738 0.731 0.2211
JRIP (s=1) 70.6751 0.686 0.707 0.692 0.2643
JRIP (s=2)
(s=3) 72.5738
72.9958 0.714
0.715 0.726
0.73 0.718
0.72 0.2473
0.2543
0.03
JRIP (s=4) 74.4726 0.735 0.745 0.738 0.243

ID3 62.0253 0.662 0.658 0.659 0.2207 0.05
C4.5 74.8945 0.74 0.749 0.739 0.2447
From Table 1, algorithm C4.5 has the best efficiency although its mean absolute error and
processing time are not the lowest; however they are quite low. Thus the model created from
C4.5 is selected to predict the learning levels to group learners for cooperative learning
through web.
6.2 The result for testing the accuracy of the selected model
Before using the selected model to group learners for cooperative learning through web, the
accuracy of the selected model is tested with first year students at Nakhon Ratchasiam
Rajabhat University and Kanchanaburi Rajabhat University.
In the experiment, the students study with typical learning without grouping students. The
achievement of students is compared with the predictions and the results of the comparison
are as follows. For the experiment at Nakhon Ratchasiam Rajabhat University, the model
predicts the learning levels of 23 students from 32 students correctly; thus the accuracy is
about 71.875%. In the experiment at Kanchanaburi Rajabhat University, the model predicts
the learning levels of 15 students from 21 students correctly; therefore the accuracy is about
71.4286%. The results show that the accuracy derived from the experiments at Nakhon
Ratchasiam Rajabhat University and Kanchanaburi Rajabhat University is not much
different. Hence this expresses that the selected model create from C4.5 algorithm is reliable
and the model can be used in different context.
6.3 The result for developing the learning model of cooperative learning through web
The learning model of cooperative learning through web utilizing the selected model to group
learners comprises of 5 elements that are data management module, prediction and grouping
module, learning resources, cooperative community and achievement tests called quiz
module. The cooperative community comprises of two communities that are learning
cooperative community and expert community. The framework of designing the learning
model is shown in Fig. 1. and an example of developing the learning model is shown in Fig.
2.
58
Data management
Multiple intelligence Data preparation module
Learning
Performance
Prediction
Data mining Data mining Prediction and
algorithm grouping module
Cognitive load
Supporting Chunk
learners
Data processing
Learning resources
Mental model
Media symbol system Conceptual model
Web-based technology Cooperative

community
Social constructivist - Learning cooperative

Collaboration community
- Expert community
Cooperative learning
Progressive value
Assessment
Quiz module
Bloom’s taxonomy Cognitive domain
Fig. 1. The framework of designing the learning model
The results of evaluating the learning model by six experts are exposed as follows.
Firstly, the learning content is up-to-date and suitable for education in the computer field.
Secondly, the principles used as the fundamental of developing the learning model indicate
the appropriateness of media utilizing; moreover the internet technology used in the model is
appropriate and easy to understand. Finally, the elements of the learning model complies with
learning principles and theories.
59
Fig. 2. An example of developing the learning model.
6.4 The results for comparing learning progressive-value of learners

In the experiment for cooperative learning through web, the results for comparing learning
progressive-value of learners are as follows.
6.4.1 The results derived from the experiment at Nakhon Ratchasiam Rajabhat
University
The achievement and progressive-value of learners at Nakhon Ratchasiam Rajabhat
University are separated into two cases that are (1) the cooperative learning through web with
grouping learners by the lecturer and (2) the cooperative learning through web utilizing the
selected model to group learners.
For the first case and the second case, the achievement derived from cooperative
learning through web is higher than typical learning without grouping learners while the
average of learning progressive-value is about 4.60% in the first case, and the average of
learning progressive-value is about 7.84% in the second case.
6.4.2 The results derived from the experiment at Kanchanaburi Rajabhat University
The results derived from the experiment at Kanchanaburi Rajabhat University
correspond to the results derived from the experiment at Nakhon Ratchasiam Rajabhat
University that are the achievement derived from cooperative learning through web is higher
than typical learning without grouping learners. The learning progressive-value derived from
cooperative learning through web with grouping learners by the lecturer is about 4.57% while
the learning progressive-value derived from cooperative learning through web utilizing the
selected model to group learners is about 6.99%.
60
The above results show that the learning progressive-value in the case of using the
selected model to group learners is higher than the learning progressive-value in the case of
grouping learners by the lecturer.
7. Summary and Concluding Remarks

This research selects a data mining model to predict learning levels in computer
programming subject by comparing the efficiency of seven models created from seven data
mining algorithms that are ANN, KNN, NB, BN, JRIP, ID3 and C4.5. The model created
from C4.5 has the best efficiency; thus this model is selected to predict the learning levels to
group learners for cooperative learning through web. The results from testing the accuracy of
the selected model show that the model is reliable. Thus this model is used to predict learning
levels in computer programming subject for cooperative learning through web to group
learners according to STAD technique. The results derived from the experiments at
Kanchanaburi Rajabhat University and Nakhon Ratchasiam Rajabhat University are
correspondent that are the achievement derived from cooperative learning through web is
higher than the achievement derived from typical learning without grouping learners.
Moreover the learning progressive-value derived from cooperative learning through web
utilizing the selected model to group learners is higher that the learning progressive-value
derived from cooperative learning through web with grouping learners by the lecturer. The
model of cooperative learning through web utilizing the selected model to group learners
comprises of 5 elements that are data management module, prediction and grouping module,
learning resources, cooperative community, and quiz module.
In the future work, besides academic data, and family data, other data such as activities
during studying will be used for data mining to predict learning levels of students;
furthermore learning achievement tests will be designed as problem situations with authentic
tasks in the real context.
Acknowledgements
This research was supported by Nakhonratchasima Rajabhat University, Thailand via the
consent of National Research Council of Thailand and the publication of this work was
supported by Nakhonratchasima Rajabhat University.
Brief biographies of the authors

Pensri Amornsinlaphachai is an Assistant Professor in the Department of Computer
Education at Nakhon Ratchasima Rajabhat University, Thailand. She graduated Ph.D.
(Computing) from Northumbria University at Newcastle, UK. in 2007.
References
Amornsinlaphachai, P. (2014). Designing a learning model using the STAD technique with a
suggestion system to decrease learners’ weakness. Procedia - Social and Behavioral Sciences,
2014(116), 431–435.
Atherton, J. S. (2013). Learning and Teaching; Constructivism in learning.
http://www.learningandteaching.info/learning/constructivism.htm
Deejring, K. (2014). The design of web-based learning model using collaborative learning
techniques and a scaffolding system to enhance learners’ competency in higher education.
Procedia - Social and Behavioral Sciences, 2014(116), 436–441.
Deejring, K. (2015). The validation of web-based learning using collaborative learning
Procedia - Social and Behavioral Sciences, 2015(174), 34-42.
Gardner, H. (1983). Frames of Mind. New York: Basic Book Inc.
61
Mayer, R. E. (1996). Designing Instruction for Constructivist Learning. Instructional Design
Theories And Models: A New Paradigm on Instructional Theory. Newjersy: Lawrence
Erlbaum Associates.
Mayer, R.E. (2005). The Cambridge handbook of multimedia learning. New York:
Cambridge University press.
Oladokun, V.O. (2008). Predicting Students’ Academic Performance using Artificial Neural
Network: A Case Study of an Engineering Course. The Pacific Journal of Science and
Technology, 9(1), 72–79.
Praveen Sundar, P.V. (2013). A COMPARATIVE STUDY FOR PREDICTING
STUDENT’S ACADEMIC PERFORMANCE USING BAYESIAN NETWORK
CLASSIFIERS. IOSR Journal of Engineering, 3(2), 37–42.
Ramanathan, L., Saksham Dhanda, & Suresh Kumar D. (2013). Predicting Students’
Performance using Modified ID3 Algorithm. International Journal of Engineering and
Technology, 5(3), 2491–2497.
Slavin, R. E. (1996). Education for all. Exton: PA: Swets & Zeitlinger Publishers.
Spiro, R., Feltovich, P., Jacobson, Michael J., & Coulson, Richard L. (1995). Cognitive
Flexibilty, Constructivism, and Hypertext: Random Assess Instruction for Advanced
Knowledge Acquisition in Ill-Structured Domains. In Constructivism in education. Hillsdale,
NJ.: England: Lawrence Erlbaum Associates, Inc. 85–107.
Tuomas Tanner, & Hannu Toivonen. (2010). Predicting and preventing student failure –
using the k-nearest neighbour method to predict student performance in an online course
environment. International Journal of Learning Technology, 5(4), 356–377.
Vygotsky, L. S. (1962). Thought and language. Cambridge [Mass]: M.I.T. Press.
62
The design of Knowledge management to develop creative thinking for
higher education with project base learning
Kwanjai Deejring
Department of Computer Education, Faculty of Science andTechnology,
Nakhonratchasima Rajabhat University, Thailand
deejring@hotmail.com
Abstract
The purposes oh this study were 1) to design a framework of a learning innovation to use
knowledge management to develop creative thinking with project base learning, 2) to
synthesize a theoretical framework of this study and 3) to study experts’ opinions of this
study. The target group consisted of 4 experts and 10 students studying during the second
semester of academic year 2014 in the computer education field, the Faculty of Science and
Technology at Nakhon Ratchasima Rajabhat University, Thailand. The developmental
research phase I (Richey & Klein, 2007) learning innovation development was employed in
this study. There are several methods used in this phase that were document analysis and
survey. This procedures were as following: 1) ) to examine and analyze the principles and
theories 2)) to explore the instructional context concerning instructional design and learning
environment 3)) to synthesize designing framework of knowledge management to develop
creative thinking for higher education with project base learning 4)) to design and develop the
knowledge management to develop creative thinking with project base learning based on
mentioned designing framework and 5) ) to evaluate the efficiency of the knowledge
management to develop creative thinking with project base learning. The results were
revealed that: 1)) the knowledge management to develop creative thinking for higher
education with project base learning consist of 5 components as following: 1) project-based
learning, 2) learning resources, 3) scaffolding, 4) KM for collaborative learning, and 5) KM
for coaching (2) The efficiency of this model was evaluated by expert review and it was
found that the learning innovation was appropriate on 3 aspects : content, design and media.
Keywords: constructivist, knowledge management, creative thinking,

project base learning
1. Introduction
Currently, Thai society must compete in education because of several rapid changes
occurring in communications, transportation, information technology, as well as the diffusion
of transnational cultures and knowledge base society. In order to respond to and keep pace
with these changes, educational development, particularly human resource development, is
essential. Consequently, Thai society must review its educational system and make it
conducive to develop human resources to have the knowledge and abilities necessary in the
age of globalization, and meaningful for economic, political and social development. In this
connection, it is necessary to have educational reform that focuses on endowing people with
the quality and potential needed to compete with other countries in The Asean Economic
Community: AEC.
From these reasons, the learning process must focus on skills of thinking process to face the
situation and to apply knowledge to solve Ill-structured problems in the real world based on
learners’ cognitive (Deejring, 2014-2015). The use of knowledge management to develop
creative thinking for higher education with project base learning in database management for
education subject is focused here. In knowledge management, the collaborative learning
techniques help the students to exchange their knowledge for multiple perspectives and
63
prevent students from misconception (Amornsinlaphachai, 2014-2015); hence we should
encourage the students to build their knowledge and the concept and promote creative
thinking (Driscoll, 2000).
Therefore, it is necessary to develop human resources to know the right way to think and
make the right decisions in diverse situations, and to be able to develop themselves and
create new innovations so as to exist independently in the future (Charoenwongsak, 2003).
This is consistent with the Thai National Education Act 1999 and Amendment Act (No. 2)
(1999) which state that the education will be based on the principle that all learners are
capable of learning and developing themselves and the students are considered as the most
important. This includes the learning process aiming at practicing skills, the thinking process,
management, and applying such knowledge to improve national education standards.
In this present study, the learners had to learn about database system design in daily life and
use their ability to analyze a diverse range of data to make the right decisions for database
system. This is consistent with the creative thinking of Guilford (1967), which consists of 4
kinds of abilities: 1) originality, 2) fluency, 3) flexibility and 4) elaboration.Based on the
above principles, the researcher adopted the creative thinking by synthesizing the following
as the framework for designing the learning innovation, such as knowledge management,
project base learning, constructivist theory and the characteristics of the media, including the
symbols used. It is thought to be conducive to promote creative thinking abilities through a
series of designs to build a body of knowledge based on the principles of integrated
knowledge management, project base learning, media, including texts, videos, local wisdom,
and experimental equipment.
2. Concepts and Theories

Education at all levels using knowledge management must promote creative thinking with
project base learning and encourage learners to develop their full potential. Therefore,
learning should focus on the knowledge construction based on the theories of cognitivism,
constructivism, knowledge management and creative thinking which examine by project base
learning. Other features include integrated media technology, the principles of multimedia
design to support knowledge construction, and learning innovations to further promote
creative thinking ability with project base learning.
3. The Purposes of This Study

This study was aimed at 1) to design a framework of a learning innovation to use knowledge
management to develop creative thinking with project base learning, 2) to synthesize a
theoretical framework of this study and 3) study experts’ opinions of this study.
4. Scope of the Research

4.1 The target group of this study consisted of 4 experts to evaluate content, media and
design and 10 students studying during the second semester of academic year 2014 in the
computer education field, the faculty of Science and Technology at Nakhon Ratchasima
Rajabhat University, Thailand.
4.2 Research variables consist of 1) Independent variables that is the framework of innovation
of knowledge management to develop creative thinking with project base learning and 2)
Dependent variables composing of experts' opinion and students' notion.
4.3 The scope of content used in this study is a part of the subject of 414207 Database
management for education studied at Nakhon Ratchasima Rajabhat University, Thailand. The
topics of the content are data base design.
5. Research Instruments
The instruments in this study consisted of the innovation of knowledge management to
develop creative thinking with project base learning potential and the instruments to collect
data. They are described below.
64
5.1 The learning innovation of knowledge management to develop creative thinking with
project base learning
The learning innovation was designed and constructed as follows: the researcher examined
and analyzed principles, theories, and researches related to learning to use knowledge
management to develop creative thinking with project base learning as well as contextual
studies. It was based on the above mentioned study concerning (1) knowledge management
theory, (2) principles of creative thinking, (3) project base learning, (4) cognitive
constructivism and social constructivism, and (5) media attribution and media symbol
system. The designing framework of the innovation was synthesized and the following five
essential components were utilized: (1) project-based learning, (2) resources, (3) scaffolding,
(4) KM for collaborative learning, and (5) KM for coaching.
The effectiveness of the learning innovation of knowledge management to develop creative
thinking with project base learning was assessed according to the following 4 dimensions: 1)
product quality, 2) contextual utilization, 3) learners’ opinions of the learning innovation, and
4) creative thinking ability.
5.2 The instruments for collecting both quantitative and qualitative data, as described below:
The researcher constructed a creative thinking interview form for the learners. It was an
unstructured interview form which framework was based on the creative thinking described
by Guilford (1967). It included the following elements: 1) originality, 2) fluency, 3)
flexibility and 4) elaboration.
6. Methodology
The result of this study can be summarized as follows.
The developmental research phase I methodology used in this work consists of the following
steps.
6.1 Instruments of research are as follows
6.1.1 The opinionaire of instructional context used to survey opinion of the lecturers
and students about learning context composes of open-ended questions. The issue is related to
designing the knowledge management to develop creative thinking with project base
learning.
6.1.2 The document analysis record form consists of 3 aspects that are the
instructional design based on CLEs (Jonassen,1999), knowledge management for
collaborative learning and coaching based on social constructivism (Vygotsky,1978) and
media theories. These aspects create the theoretical framework and the designing framework
for designing the knowledge management to develop creative thinking with project base
learning.
6.1.3 The effectiveness evaluation of the knowledge management to develop creative
thinking with project base learning created from the designing framework comprised of the
principle of assessment in web-base learning (Khan et al., 1997) and the principle of
evaluation in learning environments. This evaluation uses open-ended questions comprising
of 3 major issues that are content, media on web and learning environments and design.
6.2 Data Collection
The study was conducted to collect data as the following details.
6.2.1 Opinion survey in the context of learning about the condition of teaching and
learning context.
6.2.2 The review of literatures and the analysis of document.
6.2.3 The synthesis of literatures and opinions to create a conceptual design of this
innovation.
65
6.2.4 The data derived from the effectiveness evaluation of the knowledge
management to develop creative thinking with project base learning (Richey and Klein,
2007).
6.3 Data Analysis
The data is analyzed as follows.
6.3.1 Acquisition of the theoretical framework by using data analysis to describe and
summarize analytical interpretation derived from information about principles, various
theories related to the research and document analysis.
6.3.2 Acquisition of the contextual conditions on learning and teaching of students by
using descriptive analytical and summary interpretation. The data was derived from the
opinionaire about education.
6.3.3 Designing framework acquisition by using data analysis to describe and
summarize analytical interpretation from the data recorded in the document analysis record
form.
6.3.4 Acquisition of expert assessments about the web based learning by using data
analysis by summarizing interpretation. The expert assessments include learning content,
media and design.
7. Results
This study was aimed at 1) to design a framework of a learning innovation to use knowledge
management to develop creative thinking with project base learning, 2) to synthesize a
theoretical framework of this study and 3) study experts’ opinions of this study. The results of
this study are as follows.
7.1 Synthesis of theoretical framework
The basic theoretical framework consists of importance four major theoriesas shown in Fig.
1. These theories are as follows. Firstly, the pedagogy focuses on the knowledge management
theory (Nonaka and Takeuchi, 1995), instructional design along with constructivism learning
environments (Jonassen, 1999) and social constructivism (Vygotsky, 1978), project base
learning (John Larmer & John R. Mergendoller, 2010) and creative thinking(Guilford, 1967).
Secondly, the contextual principles compose of learners’ personal characteristics, level of
using ICT and internet related experience, graduate desirable features, guidelines for
teaching, and the essence of the database management for education subject. Thirdly, the
web-based learning technology include multimedia and information technology. Finally, the
cognitive factor in web based learning design consists of the fundamental in message design
and media symbol system.
7.2 The study of context
The study of context found the condition of Computer education program as follows. The
learning experience of students will emphasize on lectures which the students will write
down the contents. The lecturers show slides of presentation with content. Students are
divided into small groups to present reports in front of the class. The students' experience in
the computer field had to learn with various software programs including Microsoft office
and search on the Internet. Furthermore, the students have no experience of using social
network application in learning which focus on cognitive process. However teachers had to
transfer knowledge in the traditional didactic teaching. The students have no experience in
knowledge management for collaborative learning, knowledge management to solve problem
and don’t have any project base learning to promote creative thinking in higher education. It
also found that students have no learning experience with activities that promote web based
learning using knowledge management to develop creative thinking with project base
learning in higher education.
66
-Knowledge
Pedagogy
-Creative
-Project
-Cognitive
base
thinking
constructivism
management
learning The contextual principle
- Learners’ personal characteristics

- Level of using ICT and internet
related to experience
-Social constructivism
-ZPD to design scaffolding system
The design of knowledge management to

develop creative thinking for higher
education with project base learning
Web based learning technology

Cognitive factor in web page design
- Multimedia environments
-Message design
- Integrate information and technology
-Media symbol system
- Interactive information and technology
Fig. 1. The theoretical framework
7.3 The synthesis of the framework of web based learning innovation

The synthesis of theory, philosophy, pedagogy, psychology of learning, media symbol system
and technology leads to a fundamental for designing a framework of this web based learning
as the following.
7.3.1 The cognitive conflict, to activate cognitive structure, including the situation in
problem analysis and design of various systems based on the basic framework of Jonassen
(Jonassen, 2004) help to design and present problems in the real world context. These
encourage students to solve problems based on project base and prepare themselves when
they encounter various problems at workplaces, as shown in Fig. 2.
Real Worl Problems

Problems based on
The cognitive conflict project base
Authentic Problem
Fig. 2. Framework design to activate cognitive structure
7.3.2 The supporting cognitive equilibrium consists of the components as follows. (1)
Resources are based on the design principles for multimedia presentations (Mayer, 2005) by
organizing information. Information processing of the students uses animation, visual and
audio to get more effectiveness than lecture does. (2) For KM collaboration, students are
divided into small groups to solve the problem, based on concept of Vygotsky (1978) and
Honebein (Honebein, 1996) to allow students to interact with each other and provide the
opportunity to articulate for multiple perspectives as well as discuss with teachers and
experts. These can avoid misunderstanding or misconception as shown in Fig. 3.
7.3.3 To promote and assist the students who are under the zone of proximal
development based on Social constructivist theory (Vygotsky, 1978), the components of
enhancing learners’ creative thinking and knowledge construction are scaffolding consisting
67
of Metacognitive Scaffolding, Strategic Scaffolding, Conceptual Scaffolding and Procedural
Scaffolding as shown in Fig. 4.
Accommodation
Supporting cognitive
Resource
equilibrium Assimilation
Fig. 3.Framework design for supporting cognitive equilibrium
Conceptual Scaffolding Procedural ScaffoldingKM forStrategic

Collaborative
Scaffolding Metacognitive Scaffolding
learning Chat Room
Supporting in construct knowledge

Using the knowledge management to
KM for coaching
develop creative
base thinking
learning with project Community
Multiple perspective
Figure 4.Framework design
7.4 The efficiency of the web based learning innovation

The web based learning innovation derived from the design framework comprises of (1)
project base learning, 2) learning resources, 3) scaffolding, 4) KM for collaborative learning,
and 5) KM for coaching. Examining the quality of this innovation through the various experts
found the following issues. Firstly, the content is accurate and appropriate to the level of
learning among students. In addition, the content looks interesting, up to date and timely
today. As well as the content is subject to extensively study. The resources uses suitable
theory. Secondly, there are up-to-date technology and using multimedia can help the students
to understand information easily. Thirdly, the design of web based learning is exactly
consistent with the principles and theories used as fundamental for design. Overall, this web
based learning innovation is appropriate to enhance the learners’ cognitive process.
8. Summary and Concluding Remarks

The web based learning innovation using knowledge management to develop creative thinking
with project base learning in higher education consists of 5 components that are 1) project
base learning, 2) learning resources, 3) scaffolding, 4) KM for collaborative learning, and 5)
KM for coaching.The result of this study is the design of elements in the web based learning
environments that enhances learners’ creative thinking by using project base learning. There
is a theoretical basis, as following. (1) Pedagogy focusing on instructional designed along
constructivism learning environments of Jonassen (1999) and social constructivism of
Vygotsky (1978) project base learning (John Larmer & John R. Mergendoller, 2010) and
creative thinking (Guilford, 1967), (2) The contextual principles such as learners’ personal
characteristics, level of using ICT and internet related experience, graduate desirable
features, guidelines for teaching, and the essence of the database management for education
68
courses, (3) Web-based learning technology, (4) Cognitive factor in web based learning
design such as the fundamental in message design, media symbol system.
The experts who evaluate this web base innovation found that the content of the innovation is
accurate, right up to date timely. Design and media can encourage students to construct
knowledge and enhance learners’ creative thinking by using project base learning. This is
because the design has been designed based on a theoretical basis (Instructional Design
theory). This theory is lead to the practice. To construct the knowledge based on
constructivism learning environments, social constructivism, a problem situation will be used
to activate students to be disequilibrium in concept. This will encourage students to solve
problem leading to equilibrium in the concept and knowledge management enhance students’
creative thinking via collaborative learning in community to exchange multiple perspective.
This causes the students improve their creative thinking that we can examine via their project
base learning. The new finding in this research is that the web based learning with project
base and knowledge management can enhance students' creative thinking.
Acknowledgements
This research was supported by Nakhonratchasima Rajabhat University, Thailand via the
consent of National Research Council of Thailand and the publication of this work was
supported by Nakhonratchasima Rajabhat University.

Kwanjai Deejring is an Assistant Professor in the Department of Computer Education at
Nakhon Ratchasima Rajabhat University, Thailand. She graduated Ph.D. (Education
Technology) from Khon Kaen University, Thailand in 2012.
References
Amornsinlaphachai, P. (2014). Designing a learning model using the STAD technique with a
suggestion system to decrease learners’ weakness. Procedia - Social and Behavioral
Sciences, 2014(116), 431–435.
Amornsinlaphachai, P. (2015). The design of a framework for cooperative learning through
web utilizing data mining technique to group learners. Procedia - Social and Behavioral
Sciences, 2015(174), 27-33.
Charoenwongsak, Kriengsak. (2003). CriticalThinking. Bangkok: Successmedia Ltd.
Deejring, K. (2014). The design of web-based learning model using collaborative learning
Procedia - Social and Behavioral Sciences, 2014(116), 436–441.
Deejring, K. (2015). The validation of web-based learning using collaborative learning
Procedia - Social and Behavioral Sciences, 2015(174), 34-42.
Driscoll, M. P. (2000). Psychology of learning for instruction. Needham Heights, MA: Allyn
& Bacon.
Guilford, J.P. (1967). The Nature of Human Intelligence. New York: McGraw-Hill.
Honebein, J. (1996). Seven Goals for the Design of Constructivist Learning. Retrieved
January, 2015 from http://cter.ed.uiuc.edu/JimL_Courses/edpsy490i/
su01/readings/honebein.htm Available:
John Larmer, & John R. Mergendoller. (2010). Seven Essentials for Project-Based Learning.
Giving Students Meaningful Work, 68(1), 34–37.
Johnson, D. W. and Johnson, R. (1999). Learning together and alone: Cooperative,
competitive, and individualistic learning (5th ed.). Boston: MA: Allyn & Bacon.
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Jonassen, D. H. (1999). Designing Constructivist Learning Environments. ใน Instructional
Design Theories and Models (215–239). In Reigeluth, New Jersey: Lawrence Erlbaum
Associates.
Jonassen, D. H. (2004). Learning to solve problems: An Instructional design guide. San
Francisco, CA., Pfeiffer/Jossey-Bass.
Khan, B.H. (1997). Web-based Instruction. Englewood Cliffs, Newjersey, Education
Technology Publication.
Mayer, R.E. (2005). The Cambridge handbook of multimedia learning. New York:
Cambridge University press.
Nonaka, Ikujiro, & Takeuchi, Hirotaka. (1995). The knowledge creating company: how
Japanese companies create the dynamics of innovation. New York: Oxford University Press.
Office of the National education commission. (1999). The Education Act, 1999. Retrieved
December, 2014 from http://www.moe.go.th/English/edu-act.htm
Richey, R.C. and Klein, J.D. (2007). Design and Development Research. New Jersey:
Lawrence Erlbaum association.
Vygotsky, L. S. (1978). Mind in society: The development of higher psychological processes.
Cambridge, MA: Harvard University Press.
70
How Elementary Students of English in the University are Constructed
: Thoughts upon English Teaching from Madness and Civilization
Hsueh Chen-hua
Chaoyang University of Technology
168, Jifeng E. Rd., Wufeng District, Taichung, 41349 Taiwan
cindyhsueh@cyut.edu.tw
Abstract
This study aims to analyze how elementary learners of English as a second language in a
university are constructed under the practices of teaching theories and leveling policies in the
university setting of Taiwan. This analysis is driven by the arugments in Madness and
Civilization by Michel Foucault. Foucault elaborated how madness was fromed over the
development of civilization. Bases on this, I argued that the elementary learners of English in
the university of this research was also construced by three types of factors – knowledge,
economics, and administration – in the form of power under the practice of authority over the
development of civilization.
The analysis in this study is based on a course plan in a technology university of Taiwan. The
course plan is characterized as a government–granted program, a level-based teaching, and a
test–oriented policy. The reserch method is critical analysis. The result shows the
elementariness of English learners in this study is required and thus constructed by authority
via different types of power. It is expected that the research result can highlight that right
courses need to be designed for right learners.
Key words: elementray learners, constructed, madness, civilization
Conference Topic (The 6th MAC 2016): Education, Teaching and Learning
Introduction
In the beginning of a new semester, a small group of young freshman students were confused
why they were classified into the elementary level after learning English for more than six
years in both junior and senior high schools. In this research, Foucault’s Madness and
Civilization is supposed to answer them. This study aims to analyze, based on the arugments
in Madness and Civilization, how elementary learners of English as a secnd language in a
university are constructed by the authotity.
Madness and Civilization

In 1959, while Foucault was working in Hamburg of Germany, he completed his thesis Folie
et déraison: Histoire de la folie à l’ge classique. Before that, he had worked in isolation in
Uppsala and Warsaw for data collection (Macey, 2004). In 1961, Foucault’s degree was
awarded unanimously with highest honors. This thesis also received a yearly bronze medal
from the Centre National de la Recherche Scientifique (CNRS) as the best thesis in the
discipline of philosophy. In 1963, an abridged pocket edition appeared and was translated
into English with the title Madness and Civilization: A History of Insanity in the Age of
Reason, which illustrated the interest of anti-psychiatrists in Foucault.
71
Power
In Madness and Civilization, Foucalt pointed out how power had been traversing the whole
society in Europe to form madness. To be more specific, he tried to illustrate how
mechanisms of power over the development of civilization were deployed to embody the
abnormal living on the dark side of the social system. He used the term relations of power
(Rabinow and Rose, 1994). Actually, a conception of the body as a central component in the
operations of power relations has occupied a prominent place in his works (Smart, 1985). For
Foucault, ‘what is power’ is secondary to that question ‘how is power exercised (Cousins and
Hussain, 1984).’ For further discussions in this study, three concepts about power are
provided here. First, power exists only as exercised by some on others when it is put into
action. Second, such relationships of power are perfectly legitimate through the carefully
defined institutions. Last but not least, every relationship of power tends to become a winning
strategy (Rabinow and Rose, 1994).
English Course in a Technology University

The analysis in this study is based on a course plan of required English in a technology
university. Regarding this course plan, first, it is supported by Program for Promoting
Teaching Excellence of Universities from Ministry of Education in Taiwan1. Secondly, it is a
required course for two consecutive school years from freshmen. Besides, students will be
classified into one of four levels, Elementary, Basic, Intermediate, or High-intermediate.
Finally, there are complete regulations for scheduled tests, for example, pre-test, post-test and
joint exams. To sum up, the required English course in this study is based on a government–
granted program, a level-based teaching, and a test–oriented policy.
Power from Authority

The analysis will be derived from three perspectives – knowledge, economics and
administration – in the form of power under authority. In the following part, the way how
power is practiced will be elaborated by means of contrastive descriptions and discussions.
That is, the forming of madness from civilization in Madness and Civilization will be put first
and contrasted by the forming of elementariness from authority in the English course, both
based on the three types of power, knowledge, economics, and administration.
Power of Knowledge in Madness

For Foucault, knowledge of all sorts is completely enmeshed in the clash of petty
dominations as well as in the larger battles which constitute the world (Rabinow, 1984). The
world of the madmen is also constituted by knowledge. According to the description in
Madness and Civilization, in the Middle Ages, madmen could be seen in Ships of Fools
which approached harbors in quite a few European cities. Their identity was portrayed by
water and navigation. “Every embarkation is, potentially, the last (Foucault, 1965).”
By the end of Middle Ages, the denunciation of madness became a general form of discussion
and criticism. For instance, in Corrozet’s satire Contre fol amour, it was folly which got the
best love (Foucault, 1965). In Erasmus’ The Praise of Folly, he reserved a large place about
fools for scholars. The theme of madness was woven to the veins of literary, philosophy and
Madness
morality. That
was also
is topresented
say, “Madness
via thefascinates
progress because it is by
in medicine knowledge
which madness
(Foucault,
was1965).”
defined. As
early as in the sixteenth century, the notion of melancholia was designated as one of the
symptoms of madness as described in Thomas Willis’s text in the 1670s: melancholia is
1Source from Website of Ministry of Education in Taiwan: http://www.csal.fcu.edu.tw/edu/, dated Jan. 29,
2012
72
“madness without fever or frenzy, accompanied by fear and sadness (Foucault, 1965).” Later,
Medical Dictionary, published by Robert James in England in 1743, proposed, under mania, a
comparative etiology of madness and of melancholia. Afterwards, it was portrayed as
melancholia, mania, dementia, hysteria, or hypochondria and so on. In short, knowledge of
this sort is manifested in the medical theories that name the different pathological types and
explain them (Foucault, 1969).
Power of Knowledge in Elementariness

This paragraph aims to explain how elementary students in the English course were formed
under the practice of power, the power of teaching knowledge.
The English learners in this study are second language (L2) users and various teaching
methods and philosophies about L2 learning have been invented in the modern time. Before
WWII, Grammar Translation Method became popular but it was soon replaced by Audio
Lingual Method by 1960s. Later on, more advanced teaching theories were established, for
example, Total Physical Response, The Silent Way, Natural Approach, and Community
Language Learning (Baker and Malmkjer, 1988). After 1980s, Communicative Language
Teaching became powerful (Bygate and Samuda, 2008). Regardless of the notion behind each
method, all of them fall into two broad approaches. In one approach, the score or the grade is
given to determine varying degrees of learners. In the other, several levels are defined by one
or more rating scales to show the language ability of learners (Bachman and Palmer, 1997).
In other words, students will be classified into different levels with varying degrees according
to their scores or grades given by the raters though rating always contains some chance
(McNamara, 2000). As a consequence, the power of knowledge in teaching methods
contributes to the learners’ levels including the elementary one. Thus, the performance
presented by students of different levels has become a must by which the elementariness is
constructed accordingly.
Power of Economics in Madness

In Madness and Civilization, Foucault unveiled by which way as well as under what
condition the madmen were treated. In his arguments, the economical factor remained to be
an important one.
During Renaissance when most madmen were sent to the Ship of Fools, it was speculated that
only foreigners were driven away while citizens were taken care by each city with subsidies.
Take Nuremberg for example. These madmen were housed and provided for in the city
budget though without being given treatment (Foucault, 1965). In the fourteenth century,
Edward III, the King of England, assigned the institutions’ efforts to the poor and emptied out
the lepers at the same time (Foucault, 1965). That is to say, the number of the madmen/lepers
sent out or cared for also relies on the allocation of governmental funds.
During the seventeenth century while an economic crisis was spreading the entire Western
world, people feared that the madmen, idle or unemployed with reasonable wages would
overturn the country. As a result, some of them were prosecuted under the order by the King
of England in 1630 (Foucault, 1965). To this point, “madness was perceived on the social
horizon of poverty or incapacity for work” (Foucault, 1965), which began to rank among the
problems of the city especially in poor economics. When labor was needed for economic
significance, the madmen became burdens not only because of their inability to work but also
because of the country’s inability to support these idle people. That is, the madness was thus
constructed by the economic power.
73
Power of Economics in Elementariness
With reference to the relationship between the forming of elementary students and the
economic power from the authority, it is better to explain here first how the required course is
organized here. In Taiwan, any university is entitled to the application of this program and it
is required to offer a specific course plan with the estimated fund for the course plan. The
financial support from the government in the following year depends on the practical
performance of the course plan that year. Under these regulations, it can be assumed that
potential schools are obliged to add something new each year so that the better performance
can be presented clearly in different ways. Only by this can the school get funds, year by
year, from the authority to continue the course plan of required English. The same notion was
pointed out by Bachman and Palmer (1997), “In larger projects, it is almost always necessary
to prepare a budget, including an estimate of the project’s total cost.”
In this case discussed here from a technology university, the true story fully shows how the
economic force has shaped the elementary students. Actually, in the first year when the
school began to apply for the fund of required English course through the governmental
program, there were only three levels among freshman students. After one year, in order to
get more funds from the government by showing extra ideas in the course plan, it was agreed
that one more level, Elementary, be added. Afterwards, the staff re-estimated the relevant
monetary cost for courses of students in the newly-added Elementary level, which includes
the salary of teachers and the cost of human resources for test designers, scorers, and
administrators (Bachman and Palmer, 1997). At last, both Elementary level and its students
were constructed hereafter and the identity of Elementary students is decided by the amount
of money from the authority, the economical power.
Power of Administration in Madness

In this last part of discussion, the analysis will pay attention to how administrative power
functioned in the forming of both madness in civilization and elementariness in the English
course. An insight into the practice the Hôspital Général in Paris will be the starting point.
Although the Hôspital Général was designated to be the house of confinement for the
madmen after it had been founded in 1656, it was crystal clear, according to Foucault, that it
was not a medical establishment at all. Rather, it worked as a sort of semi-judicial structure,
an administrative entity which, outside of the courts, decided, judged, and executed
(Foucault, 1965). It was endowed with constituted powers to identify whether people were
mad, sick or criminals. In fact, it was Hôspital Général that made possible the emergence of
clearer and more recognizable concepts of madness and confinement (Macey, 2004). The
meanings of confinement via the administrative power can be illustrated with the following
two points.
First, the goal was to gather and organize the madmen for security concern. As it was
described in Madness and Civilization, when Paris was under the attack of an epidemic in
1780, people were afraid while the house of confinement “would be totally offered as a
spectacle without threatening the spectators (Foucault, 1965).” Second, the administrative
power implies the practice of punishment upon the madmen. Foucault highlighted the feature
of one asylum this way: “Those who have visited the insane asylums of Germany recall with
dread what they have seen. One is horrified upon entering these asylums of misery and
affliction……(Foucault, 1965).” Ever since then in the nineteenth century, the confinement of
the madmen represented the practice of punishing powers to the public. As a whole,
confinement not only symbolized the punishing power on the madmen as an organized group,
it also guaranteed the rewards from the authority.
74
Power of Administration in Elementariness
In corresponding with confinement to madness, this part tries to dispute that the test works in
the same way to elementariness. In critical applied linguistics, tests have been argued to be
the form of power practice. According to Shohamy (2001), the test means that, in an
interaction between testers and test takers, testers are those who hold the power. Furthermore,
the fact shows that authorized organization tends to have more power than individuals. In the
following paragraphs, the way how power of authority forms the elementariness is elaborated
from three perspectives.
First, the power of authority works in order to fulfill the purpose of the organization rather
than the individuals. As claimed by McNamara (2000), one important feature of tests is that
they are administered by powerful institutions and, what is more, tests are not motivated by
personal curiosity about individuals, but in an institutional role, for serving institutional
purposes. The first significant purpose is to make policies. As stated by Shohamy (2001),
using tests as a disciplinary tool is an extension of the manipulation in authority – policy
makers, principals and teachers – to make policies effectively. More than that, McNamara
(2000) suggested that most rating scales in tests used in educational settings are imposed by
government authority for the purpose of financial accountability, which is the other purpose
of authorized organization.
Second, the power of authority is conveyed by means of tests for the purpose of selection.
The research shows that tests are, in fact, originated as tools for measuring knowledge,
mostly for selection purposes (Shohamy, 2001). Take the elementary students in this study for
example. They were firstly selected through tests under the policy of level-based teaching.
After students were certain to be classified into Elementary level, they used the unified
textbooks, with relatively childish content, selected by policy makers to meet the elementary
level. Moreover, for Elementary students eager to be upgraded to a higher level, it is the test
by which they can be hopefully selected to move to a higher level.
Last but not least, tests in this study, however negative as put here, actually imply alternative
performances which can be presented in two ways. One is that tests are used to see how a
person performs particularly in relation to the threshold of performance in social institutions
and they fulfill a gate-keeping function to control entries to many important social roles
(McNamara, 2000). More specifically, Elementary students as well as their performance in
this study are actually evaluated separately from those of other higher levels in order not to
worsen the performance of all the others. The other way is demonstrated in that the
performance of the newly-established Elementary course plan plays a key role in asking for
extra funds from the government for the following year. In conclusion, the elementariness
must be constructed for both the administrative efficiency, in policy making or finance
accounting, and fund application to afford the practice of the authority.
Furthermore, again, it is their test performance which decides the knowledge selected to be
taught. The whole picture about how administrative power works is uncovered in the
statement of Shohamy (2001): “Tests are administrated on behalf of powerful organizations,
while test takers are independent individuals who are often powerless.”
Conclusions
The content of Madness and Civilization can be briefly described as the history of the slow
transition from the old notion of ‘folly’ to the modern concept of ‘mental illness’ (Macey,
2004). Regardless of the term, the madness is always there, which is highlighted in Preface,
the first four lines of which were quoted from two philosophers. One is Blaise Piscal who
said, “Men are so necessarily mad, that not to be mad would amount to another form of
madness.” The other is Fyodor Dostoievsky who, in Diary of a Writer, suggested: “It is not by
confining one’s neighbor that one is convinced of one’s own sanity.” In consistent with those
75
statements, Foucault explained that the consciousness of madness had transformed over
history but also disputed that the role of madness remained necessary. It is just the same as
the necessity of poverty which makes wealth possible (Foucault, 1965), so does madness
which makes the normal come true.
In this study aiming to elaborate how elementary students in a required English course of a
university are constructed, the analysis was made from three types of power from the
authority, always with one party in a more powerful position over the other, which can be
summarized as follows.
First, the power of knowledge about various teaching philosophies of second language leads
to the elementariness because the relevant teaching performance is expected to be derived
from students of different levels including the elementary one. In this regard, it is similar to
Foucault’s argument that “the more complex knowledge becomes, the greater the risk of
madness (Foucault, 1965)”. Second, elementariness is also formed by the power of economic
because the fund for the English course plan completely relies on the governmental grant.
That is to say, the more funds the school gets from the Ministry of Education, the more
elementary students can be created for extra credit. At last, the elementary students are not
only selected (as were the madmen organized), they are also treated in an elementary style (so
was punishment imposed on the madmen), both of which are by means of tests to fulfill the
administrative purposes of the authorized organization. In conclusion, the elementariness of
English learners in this study is also required and thus constructed by authority via different
types of power.
Brief biography
My name is Hsueh Chen Hua, now working as an English lecturer in Chaoyang University of
Technology. I got my Master of Translation in 2006 from The Chinese University of Hong
Kong and Master of Linguistics in 2004 from the University of Iowa, America. I am now a
Ph.D student in Tunghai University of Taiwan.
References
Foucault, Michel. 1965. Madness and Civilization. Random House, Inc.
Rabinow, Paul and Rose, Nikolas (eds.). 1994. The Essential Foucault. The New Press.
Eribon, Didier. 1991. Michael Foucault. Harvard University Press.
Macey, David. 2004. Michael Foucault. Reaktion Books Ltd. p.p. 56-57, 60-61.
Gutting, Gary. 2001. French Philosophy in the Twentieth Century. University of Norte Dame.
p. 264
Raninow, Paul (ed.) 1984. The Foucault Reader. Penguin Books. p.p.6-7.
Smart, Barry. 1985. Michel Foucault. Ellis Horward and Tavistock. p.20, 75.
Cousins, Mark and Hussain, Athar. 1984. Michel Foucault. Higher and Further Education
Division. p. 227.
Foucault, Michel : Candidacy Presentation: Collège de France 1969 in Rabinow. Paul. 1994.
Michel Foucault Ethics. p.p. 5-7.
Cook, Vivian. (ed.) 2002. Portraits of the L2 User. Multilingual Matters Ltd. p.1, p.p. 3-4.
Baker, Mona and Malmkjer, Kirsten. 1988. Encyclopedia of Translation Studies. Routledge.
p.p.29-32, p.365.
Bygate, Martin and Samuda, Virginia. 2008. Tasks in Second Language Learning. Palgrave
Macmillan. p.p.51-52.
Bachman, Lyle F. and Palmer, Adrian S. 1997. Language Testing in Practice. p.p. 194-196.
McNamara, Tim. 2000. Language Testing. Oxford University Press. p.p.3-7, p.p.35-43,
p.p.67-77.
76
ENTREPRENEURIAL ORIENTATION, ACCESS TO DEBT FINANCE AND THE
PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN NIGERIA
Umaru Danladi Mohammed (Ph.D)

Department of Business Administration,
Faculty of Management Sciences
University of Abuja, Nigeria.
+2348032901890
udmohammed@yahoo.com
Arc. Bello Oben'Umar

Department of Architecture,
Faculty of Environmental Sciences
Ahmadu Bello University, Zaria, Nigeria.
+2348068195948
embee_umar@yahoo.com
Prof. Grace Chinelo Obeleagu Nzelibe (Ph.D)

Department of Business Administration,
Faculty of Management Sciences
University of Abuja, Nigeria.
cgonzelibe@yahoo.com
+2348033251697
ABSTRACT
Small and Medium Enterprises (SMEs) are failing across Nigeria due to poor
Entrepreneurial Orientation (EO) and bad business practices that hinder their accessibility
to external funding. This has casted enormous doubt on the sector’s ability to create
sustainable employment and reduce poverty in Nigeria. Thus, degenerate to thwarting the
economy prospects of the country. This study however, examines the relationship between
Entrepreneurial Orientation (EO), Access to Debt Finance and the Performance of Small and
Medium Scale Enterprises (SMEs) in Nigeria. 300 Questionnaires were administered across
the six geo-political zones in Nigeria, selecting a state randomly from each of the six geo
political zones. Pearson Product Moment Correlation Coefficient (PPMCC) and Ordinary
Least Square Method of Regression (OLS) were used as analytical tools in addition to
Descriptive Statistics. The study revealed that, EO has positive and significant impact on
access to debt finance and the general performance of SMEs. A similar positive and
significant impact of access to debt finance on the performance of SMEs was indicated. Thus,
concludes that, sound EO could exact positive and significant impact on the SMEs
performance in Nigeria. This instigates the recommendation of sound EO in SMEs in Nigeria
among others to improve its overall performance.
Keywords: Entrepreneurial Orientation (EO), Debt Finance,

Small and Medium Scale Enterprises, Performance
77
INTRODUCTION
In developing and developed countries, small and medium scale firms play important roles in
the process of industrialization and economic growth. Apart from increasing per capita
income and output, small and medium businesses create employment opportunities, enhance
regional economic balance through industrial dispersal and generally promote effective
resource utilization considered critical to engineering economic development and growth.
However, the seminal role played by Small Medium businesses notwithstanding its
development is everywhere constrained by inadequate funding and poor management.
At the recent bi-monthly business networking event for young entrepreneurs and business
professionals, organised by BizKonects Mega in Lagos, it was revealed that 80% of small and
medium enterprises (SMEs) fail within five years across Nigeria due to lack of experience,
poor Entrepreneurial Orientation (EO) and other bad business practices according to the latest
findings by Stanbic IBTC Bank (Ugochukwu, 2013). Accordingly, Adeniran and Johnston
(2011) note that despite the highlighted importance of the SME sector, it is estimated that the
failure rate of SMEs in Nigeria is too high. This casts doubt on the sector’s ability to create
sustainable employment and reduce poverty. Bowen et al. (2009) state that given this high
failure rate, it becomes vital to research into the factors that are required to enable SMEs to
survive and improve their performance.
Rogerson (2008) observes that one of the primary causes of SME failure is the non
availability of external finance. Awang et al. (2010) add that the reasons for the failure
among SMEs are due to the weaknesses in their strategic framework to harmonize firm’s
entrepreneurship strategy. According to Aktan and Bulut (2008) and Chen et al. (2008),
today’s firm managers are faced with rapidly changing and fast-paced competitive
environment. To cope with such challenges an entrepreneurial approach to strategy making
may be vital for organizational success. An entrepreneurial strategy making process referred
to as Entrepreneurial Orientation (EO) is said to exist for firms that engages in product or
market innovations, undertakes risky ventures and is said to come up with proactive
innovations beating competitors to the punch.
Van Geenhuizen et al. (2008) note that EO has emerged as a possible antidote to the
problems facing businesses that wish to achieve a sustained competitive advantage. Swidi
and Mahmood (2011) and Razak (2011) observe that although EO is almost always used to
describe a situation occurring in large organizations, it is just as essential for smaller firms.
Thus, there is a particular interest in enriching our understanding of EO in an SME context.
Ligthelm (2011) suggests that SMEs suffer from severe competitive pressures from large
firms implying that SMEs operate in a hostile rather than a benign environment. Thus EO can
be of significant importance in improving the performance and reducing the high failure rates
of SMEs in Nigeria.
Empirical literature on the impact of EO on firm performance remains inconclusive. Studies

such as Callaghan and Venter (2011), Zampetakis et al. (2011) and Fatoki (2012) find that
firms with a more Entrepreneurial Orientation (EO) perform better than firms that are not.
Moreno and Casillas (2008) on the other hand did not find any significant positive impact of
EO on firm growth. This raises the question of whether EO is always an appropriate strategic
orientation or if its relationship with performance is always positive. According to Chen et al.
(2008), EO needs access to financial capital for it to be effective. Lucey (2010) finds that
internal financial capital is usually inadequate for the growth of SMEs. Hence, SMEs have to
rely on external financial capital. The two primary sources of external finance for SMEs are
78
equity and debt. External equity is usually not available for SMEs. This makes many SMEs
dependent on debt (Blumberg and Letterie 2008).
Huang et al. (2011) find a positive relationship between EO and social capital. Social capital
can bring resources and support to entrepreneurs. This suggests that EO can improve access
to financial resources by firms (Zampetakis et al., 2010). Analysis of the empirical literature
on EO revealed that most studies have focused on large firms (Kriel, 2008; Scheepers et al.,
2008; Gronewald and van Vuuren, 2011). Limited empirical studies (Callaghan and Venter
2011; Farrington and Matchaba-Hove, 2011) have focused on the impact of Entrepreneurial
Orientation (EO) on performance of SMEs. These studies find significant positive
relationships between EO and the performance of SMEs. However, no empirical study in
Nigeria has investigated whether EO positively impacts on access to debt finance by SMEs
and whether access to debt finance can mediate the relationship between EO and the
performance of SMEs.
LITERATURE REVIEW AND THEORETICAL FRAMEWORK

2.1 Entrepreneurial Orientation (EO) and Access to Debt Finance by SMEs
et al. (2009) point out that access to finance is a major problem for the Nigeria entrepreneur.
Lack of financial support is one of the causes of weak performance and failure of SMEs in
Nigeria. Zou et al. (2009) use the Resource Based View (RBV) to demonstrate the
importance of financial capital to the performance of SMEs. Access to financial capital to
purchase fixed and current assets is important to sustaining a firm’s competitive advantage.
According to Atieno (2009), a vast majority of SMEs depend on internal finance
(contribution from the owners, family and friends). However, the growth of SMEs is
constrained by dependence on internal finance. In contrast, firms that make use of external
funds exhibit growth rates far above what can be supported by internal finance. Therefore,
SMEs often need capital from external sources.
According to Lucey (2010), the two primary sources of external finance for new SMEs are
equity and debt. External equity in the form of venture capital or the stock exchange is
usually not available for SMEs. According to Blumberg and Letterie (2008), the lack of
external equity makes many SMEs dependent on debt finance especially bank loans and trade
credit.
Tang et al. (2008) argue that without adequate resources, all strategic intentions and plans are
going to fail. Covin and Lumpkin (2011) point out that the dimensions of Entrepreneurial
Orientation (EO) involve a high level of resources or capital commitments by the firm.
Haung et al. (2011) note that firms characterized by risk-taking behaviour often make large
resource commitments with a view of securing high returns by seizing opportunities in the
market place. In addition, entrepreneurs depicting risk-taking behaviour show more
willingness to take on risky resources such as external financial capital. Firms that are
proactive and competitively aggressive have forward-looking, opportunity seeking
perspective. Proactiveness is important in establishing links and networks with the various
sources of finance. In addition as pointed out by Li et al. (2008) innovativeness refers to a
firm’s ability to engage and support new ideas, novelty and experimentation.
Innovation requires the commitment of financial resources. Mukiri (2011) argues that firms
that have an Entrepreneurial Orientation (EO) are more prone to focus attention and effort
toward emerging opportunities such as links with the providers of capital. This suggests that
for EO to be successful, a firm will need to commit financial resources. In addition, firms that
79
have an EO strategic focus may be able to access debt capital due to better relationships with
the providers of debt capital.
H01: there is a positive and significant relationship between EO and access to debt finance by
SMEs.
2.2 Entrepreneurial Orientation (EO) and Performance of SMEs

Ireland et al. (2009) observe that EO has been widely touted by researchers alike as an
effective means of improving firm financial performance. The implicit logic behind the
pervasive belief in the value of EO seems to be that the key elements of Entrepreneurial
Orientation (EO) will help firms in identifying and pursuing lucrative product/market
opportunities and in providing bases for achieving superior competitive positions. Aktan et al.
(2008) find that EO activities in firms have resulted in diversified products and markets, as
well as being instrumental to producing impressive financial results.
In addition, EO is positively linked to intangible outcomes, like knowledge, skill

development, and job satisfaction. Awang et al. (2010) point out that the ability of a firm to
stay competitive is directly related to a firm’s intensity to take calculated risks. Fairoz et al.
(2010) and Hung and Chiang (2010) point out that innovation in the firm of new products,
services and processes or in a combination of theses can lead to sustainable competitive
advantage.
Empirical literature is inconclusive about the impact of EO on firm performance. Moreno and
Casillas (2008) find no direct relationship between EO and growth of a firm. Farrington and
Matchaba-Hove (2011) find that not all the dimensions of EO positively impact on firm
success. Though, empirical literature about the impact of EO on firm performance is
inconclusive, the argument of this study is that the dimensions of EO such as competitive
aggressiveness and innovation should give an SME the competitive edge.
H02: there is a positive and significant relationship between EO and the performance of
SMEs.
2.3 Debt Finance and Firm Performance

Modigliani and Miller (1963) in their seminar paper on the tax advantages of debt, argue that
interest payments on debt are tax- deductible whereas dividend payments on equity do not
enjoy such tax advantages. Therefore, in a world of tax-deductible interest payments, firms
can use debt to lower their costs of capital and maximize their profitability. This is known as
the leverage effect of debt. However, leverage also introduces an element of financial risk to
the firm. According to Abor and Quartey (2010), the use of financial leverage (that is, the use
of debt) can be positive or negative. Leverage is positive when a firm earns a higher return on
assets that is greater than the interest rate on debt. Leverage is negative if the return on assets
is lower than the interest rate on debt. Literature on the impact of debt on the performance of
firms is inconclusive. Studies such as Eriotis et al. (2002) and Bartholdy and Mateus (2006)
find that the use of debt has a negative impact on the profitability of firms. Other studies such
as Negash (2002) and Hadlock and James (2002) find a significant positive relationship
between the use of debt and firm performance.
According to the South African Reserve Bank (2011), the Repo rate has reduced over the
years to 5.5% in South Africa. The Repo rate is the price at which the central bank lends cash
to the banking system and is the most important indicator of short-term interest rates.
80
Gordhan (2011) points out that the cost of borrowing has reduced significantly in South
Africa with the prime interest rate of 9% at a 30 year low. This suggests that SMEs that have
access to debt should be able to obtain a positive leverage.
H03: there is a positive and significant relationship between the use of debt and the
performance of SMEs.
2.4 The Mediating Role of Access to Debt Finance

Zampetakis et al. (2010) point if EO is strongly linked to the performance, it does not always
have a positive impact on it. It all depends on the context. EO needs to be associated to other
business practices in order to strengthen its positive impacts on firm performance.
Empirical literature has investigated the mediating effect of EO on performance. Li et al.

(2008) finds that knowledge creation mediates the relationship between EO and performance.
Rodrigues (2008) provides evidence of the mediating effect of EO on market orientation and
firm performance. Hartsfield et al. (2008) find that firms with high level of EO are able to
engage in strategic planning, identify customer needs and are able to identify new
opportunities.
In addition, firms that have access to debt should be able to improve their performance. Thus
access to debt finance can play the role of intermediate variable which can mediate the
relationship between EO and the performance of SMEs.
H04: access to debt finance mediates the relationship between EO and the performance of
SMEs.
2.5 Theoretical Framework of Entrepreneurial Orientation (EO)

Covin and Wales (2011) observe that the theoretical foundation of EO research can be traced
to the work of Mintzberg (1973), Khandwalla (1976, 1977), Miller (1983) Covin and Slevin
(1989), Miller and Friesen (1982) and Lumpkin and Dess (1996). Mintzberg (1973) suggests
three modes of strategy-making: the planning, the adaptive and the entrepreneurial. The
planning mode involves systematic information gathering for situational analysis generating
alternate strategies and selection of appropriate strategy. The adaptive mode focuses on
reactive solutions than proactive search for new opportunities. The entrepreneurial mode is
based on active search for entrepreneurial opportunities and growth. Khandwalla (1976/1977)
points out that entrepreneurial management style refers to bold, risky and aggressive
approach to decision-making in contrast to a more cautious stability-oriented approach. Covin
and Slevin (1989) find that firms operating in hostile competitive environments, characterized
by intense rivalry among firms tend to adopt innovations with greater frequency than firms
operating in more benign competitive settings. Miller (1983) observes that an entrepreneurial
firm is one that engages in product market innovation, undertakes somewhat risky ventures,
and is first to come up with proactive innovations, beating competitors to the punch. Miller
(1983) used the dimensions of innovativeness, risk taking and proactiveness to characterize
and test Entrepreneurial Orientation (EO).
Lumpkin and Dess (1996) expanded the numbers of dimensions that characterize EO to five
by adding competitive aggressiveness and autonomy. Competitive aggressiveness refers to
how firms relate to competitors in the market place. Autonomy refers to the key independent
actions of an individual in bringing forth an idea or vision and carrying it through to
completion.
81
According to Covin and Wales (2011), the works of these researchers established EO as a
managerial disposition rooted in decision-making. EO is an organizational-level phenomenon
involving key decisions made on behalf of the entire organization. Entrepreneurial firms are
those in which top managers have entrepreneurial management styles as evidenced by the
firms’ strategic decisions and operating management philosophy.
RESEARCH METHODOLOGY
This study is investigative and explanatory as it seeks to know the relationship between EO,
access to debt finance and the performance of SMEs in Nigeria. The structure of its process
and procedures is therefore descriptive. Thus, in order to ensure reliable and adequate
representation of the population, cluster sampling technique was adopted. In this case, a state
was randomly selected as sample from each of the six geo-political zones in Nigeria. This
made a total of six sampled states to represent the entire country (i.e. Enugu (South East),
Oyo State (South west), River State (south south), Nasarawa State (North Central), Bauchi
(North East) and Kano (North West). 50 questionnaires were administered to each of the six
sampled states making a total of 300 questionnaires but only 274 were returned and analyzed
as 26 were not returned. Random sampling was also done to select 50 SMEs in each of the
sampled states and a questionnaire was given to each of the sampled SMEs’s
managers/owners for response.
The questionnaire was designed in such a way as to provide vital answers for the research
questions and hypotheses testing. The questionnaire contained a set of questions classified
into two major sections; section “A” and section “B”. Section “A” featured questions on bio
data of the respondents, while Section “B” contained numerous statements of assertion and
closed-ended questions. These were designed in form of likert scale to provide information
for testing the hypotheses using both Pearson Product Moment Correlation Coefficient
(PPMCC) and Regression Model (OLS) with the aid of SPSS in addition to descriptive
statistics to analyze the differences in mean and standard deviation of the numerous
statements of assertion.
82
RESULTS AND DISCUSSION
The results and discussion of this study were analyzed based on the hypotheses of the study.
Descriptive and inferential statistics such as PPMCC and OLS were adopted as analytical
tools.
Frequency Tables
Sex
Frequency Percent Valid Percent Cumulative
Percent
Valid Female 80 28.3 29.2 29.2
Male 194 68.6 70.8 100.0
Total 274 96.8 100.0
Missing System 9 3.2
Total 283 100.0
Source: SPSS Version 17
The above frequency result reveals that 80 of the respondents representing 28% are female,
while 194 of them representing 67% are male. This infers that most of the participants
(managers or/and owners) are male.
Age
Frequency PercentValid Percent Cumulative
Percent
Valid 18-25 16 5.7 5.8 5.8
26-30 20 7.1 7.3 13.1
31-40 28 9.9 10.2 23.4
41-50 127 44.9 46.4 69.7
51-60 67 23.7 24.5 94.2
61 above 16 5.7 5.8 100.0
Total 274 96.8 100.0
Total 283 100.0
In the above table, about 6% are within the age bracket of 18-25, 7% within the age bracket
of 26-30, 10% (31-40), 46% (41-50), 25% (51-60) and about 6% are within the age bracket of
61 and above. This reveals that most of the SMEs managers or/and owners in Nigeria are
within the age bracket of 41 and 50 follow by 51 and 60.
83
Marital Status
Frequency PercentValid Percent Cumulative
Percent
Valid Single 102 36.0 37.2 37.2
Married 172 60.8 62.8 100.0
Total 274 96.8 100.0
Total 283 100.0
The results above show that most of the SMEs owners/managers are married. This is revealed
in the above frequency table that 172 of the total respondents of 274 representing about 63%
are married, as only 102 (37%) are single.
Educational Qualification
Frequency Percent Percent
Valid Cumulative
Percent
Valid SSCE 69 24.4 25.6 25.6
OND/Degree 156 55.1 57.8 83.3
PG 31 11.0 11.5 94.8
Others 14 4.9 5.2 100.0
Total 270 95.4 100.0
Total 283 100.0
Most of the SMEs owners/managers are OND/HND/Degree holders, as revealed in the above
frequency table with the highest frequency of 156 (58%) of the total respondents of 270,
followed by SSCE holders of 69 (26%). Those with post-graduate qualifications are just 31
(12%). Other unspecified categories are 5% (14).
84
Descriptive Statistics
Std.
N Minimum Maximum Mean Deviation
Orientation (EO)
Entrepreneurial 274 2.00 5.00 3.7847 .98393
Access to Debt Finance 274 1.00 5.00 4.3869 1.29382

SMEs Performance 274 2.00 5.00 4.4416 1.03698
Mediating
Access to Debt
Effects
Finance
of 271 1.00 5.00 4.3764 1.29330
Valid N (listwise) 271

The above descriptive results confirm that the performance of SMEs in Nigeria will improve
with increase in EO, given the high mean score of above 4.44. This follows that introducing
many new products and services, and new ideas to business will increase profitability. The
mean score of about 4.39 revealed by Access to Debt Finance indicates that, its effect on
SMEs performance is rated high compared to mediating role. Thus EO visa-viz access to debt
finance play significant impact on SMEs performance in Nigeria.
Entrepreneurial Orientation (EO) & Access to Debt Finance

Correlations
Entrepreneurial
(EO)
Orientation Access to
Debt Finance
Orientation (EO)
Entrepreneurial Pearson Correlation1 .702**
Sig. (2-tailed) .000
N 274 274
Access to Debt Finance Pearson Correlation.702** 1
N 274 274
**. Correlation is significant at the 0.01 level (2-tailed).
The above Pearson’s results indicate positive and significant correlation of the relationship
between EO and Access to Debt Finance of SMEs in Nigeria. This implies that access to
loans facilities by SMEs in Nigeria increases with increase in EO.
85
Model Summaryb
Model R R Square Adjusted

Square R Std. Error of the
Estimate Durbin-Watson
1 .702a .492 .490 .92365 .997
a. Predictors: (Constant), Entrepreneurial Orientation (EO)
b. Dependent Variable: Access to Debt Finance
Coefficientsa
Model Coefficients
Unstandardized Standardized
Coefficients
1 (Constant) B
.895 Std. Error
.222 Beta t
4.030 Sig.
.000
Orientation (EO) .923

Entrepreneurial .057 .702 16.238 .000
a. Dependent Variable: Access to Debt Finance

The regression line for SMEs Access to Debt Finance (ADF=0.895+0.923EO) indicates that
access to debt finance (Loans) will increase by 0.923% for every 1% increase in EO. The
correlation coefficient (r) of 0.702 shows a strong positive relationship and the coefficient of
determination (r2) of 0.492 indicates that about 50% of variation in access to debt finance can
be explained by EO. The P-value of 0.000 indicates a significant impact of EO on Access to
Debt Finance.
Entrepreneurial Orientation (EO) & SMEs Performance

Correlations
Entrepreneuri
al Orientation SMEs
(EO)
Performance
Orientation (EO)
Entrepreneurial Pearson Correlation1 .406**
N 274 274
SMEs Performance Pearson Correlation.406** 1
N 274 274
between EO and the general performance of SMEs in Nigeria. This deduces that SMEs
performance in Nigeria increases with increase in EO.
86
Model Summaryb

1 .706a .495 .492 .94947 .753
a. Predictors: (Constant), Entrepreneurial Orientation (EO)
b. Dependent Variable: SMEs Performance
Coefficientsa
Model Coefficients
Coefficients
1 (Constant) B
2.823 Std.
.228 Error Beta t12.361 Sig.
.000
Orientation (EO) .428

Entrepreneurial .058 .406 7.324 .000
a. Dependent Variable: SMEs Performance

The regression line for SMEs Performance (P=2.823+0.428EO) indicates that the general
performance of SMEs will increase by 0.428% for every 1% increase in EO. The correlation
coefficient (r) of 0.706 shows a strong positive relationship and the coefficient of
determination (r2) of 0.495 indicates that about 50% of variation in the general performance
of SMEs in Nigeria can be explained by EO. The P-value of 0.000 indicates a significant
impact of EO on SMEs performance in Nigeria.
Access to Debt Finance & SMEs Performance

Correlations
Access to Debt
Finance SMEs Performance
Access to Debt Finance Pearson Correlation 1 .443**
N 274 274
SMEs Performance Pearson Correlation .443** 1
N 274 274
From the above Pearson’s results also, a positive and significant correlation of the
relationship between Access to Debt Finance (Loans) and the general performance of SMEs
in Nigeria is established. This implies that SMEs performance in Nigeria increases with
increase in Access to Debt Finance.
87
Model Summaryb

1 .643a .396 .393 .93148 .756
a. Predictors: (Constant), Access to Debt Finance
b. Dependent Variable: SMEs Performance
Coefficientsa
Model Coefficients
Coefficients
1 (Constant) B
2.885 Std. Error
.199 Beta t
14.477 Sig.
.000
Access
Finance to Debt .355 .044 .443 8.145 .000
a. Dependent Variable: SMEs Performance

The regression line for SMEs Performance (P=2.885+0.355ADF) indicates that the general
performance of SMEs will increase by 0.355% for every 1% increase in Access to Debt
Finance. The correlation coefficient (r) of 0.643 shows a moderate positive relationship and
the coefficient of determination (r2) of 0.395 indicates that about 40% of variation in the
general performance of SMEs in Nigeria can be explained by Access to Debt Finance. The P
value of 0.000 indicates a significant impact of Access to debt finance on SMEs performance
in Nigeria.
88
Mediating Role of Access to Debt Finance
Correlations
Finance
Access to Debt Mediating Role of
Access to Debt
Finance
Access to Debt Finance Pearson Correlation 1 .995**
N 274 271
Mediating
Access to DebtRole
Financeof Pearson Correlation .995** 1
N 271 271
between accesses to debt finance and the mediating role it plays on EO and the general
performance of SMEs in Nigeria. This implies that access to debt finance mediates the
relationship between EO and SMEs performance in Nigeria. It follows that increase in access
to debt finance has great influence on EO and SMEs performance in Nigeria.
Model Summaryb
Model R R Square Square

Adjusted R Std. Error of the
1 .995a .989 .989 .13565 1.824
a. Predictors: (Constant), Access to Debt Finance
b. Dependent Variable: Mediating Role of Access to Debt Finance
Coefficientsa
Model Coefficients
Coefficients
1 (Constant) B
.041 Std.
.029 Error Beta t1.402 Sig.
.162
Access
Finance to Debt .990 .006 .995 155.806 .000
a. Dependent Variable: Mediating Role of Access to Debt Finance

The regression line for Mediating Role (MR=0.041+0.990ADF) indicates that the positive
relationship between EO and the general performance of SMEs will increase by 0.990% for
every 1% increase in Access to Debt Finance. The correlation coefficient (r) of 0.995 shows a
strong positive relationship and the coefficient of determination (r2) of 0.989 indicates that
about 99% of variation in the relationship between EO and general performance of SMEs in
Nigeria can be explained by Access to Debt Finance. The P-value of 0.000 indicates a
89
significant impact of Access to debt finance on the relationship between EO and SMEs
performance in Nigeria.
DISCUSSION OF RESULT
The results and analysis of our findings on the relationship between EO, access to debt
finance and the performance of Small and Medium Enterprises in Nigeria are based on our
hypotheses.
Discussion of Findings on the impact of EO on Access to Debt Finance in Nigeria

From both the Pearson’s and regression results, we observe that EO has significant positive
relationship with access to debt finance of small and medium enterprises in Nigeria. This
implies that access to debt finance in Nigeria increases significantly with increase in EO. This
reveals a linear relationship as the variables move towards the same direction. This is
consistent with previous studies such as Mukiri (2011) and more recently, Fatoki (2012).
Thus, lack of EO has caused persistent difficulty in accessing loans facilities by SMEs in
Nigeria as they lack the oriented knowledge to keep up to date financial statements that will
provide them the needed requirement for accessing facilities in the banks. This is obvious as
bank statement is one of the major requirements for accessing loan facilities in commercial
banks but, most SMEs in Nigeria do not have it because of poor EO.
Discussion of Findings on the impact of EO on SMEs Performance in Nigeria

It is evident from both Pearson’s and regression results that EO is positively related to SMEs
performance in Nigeria with statistical significance. This implies that SMEs performance in
Nigeria increases significantly with increase in EO. This reveals a linear relationship and a
significant correlation between the variables. This is consistent with previous studies such as
Aktan et al. (2008); Ireland et al. (2009); Fairoz et al. (2010) and Hung and Chiang (2010)
but, inconsistent with the studies of Moreno and Casillas (2008) and Farrington and
Matchaba-Hove (2011). Divergence in the position of previous researches has made the study
to this respect inconclusive but these results have made it clearly the significance of EO on
SMEs performance. Thus, sound EO could exact positive impact of SMEs performance in
Nigeria.
Discussion of Findings on the impact of Access to Debt Finance on SMEs Performance

in Nigeria
It is also evident in both Pearson’s and regression results that Access to Debt Finance is
positively related to SMEs performance in Nigeria with statistical significance. This implies
that SMEs performance in Nigeria increases significantly with increase in Access to debt
finance. This also reveals a linear relationship and a significant correlation between the
variables. This is consistent with previous studies such as Negash (2002) and Hadlock and
James (2002) but, inconsistent with the studies of Eriotis et al. (2002) and Bartholdy and
Mateus (2006) who find that the use of debt has a negative impact on the profitability of
firms.
Discussion of Findings on the impact of Access to Debt Finance on the mediation of EO

and SMEs Performance in Nigeria
Similarly, evident from both Pearson’s and regression results show that Access to Debt
Finance mediates positively and significantly to the relationship between EO and SMEs
performance in Nigeria. This implies that the relationship between EO and SMEs
performance in Nigeria increases significantly with increase in Access to debt finance. This is
consistent with previous studies such as Li et al. (2008); Hartsfield et al. (2008); Rodrigues
90
(2008) and more recently Zampetakis et al. (2010) who provide evidence of the mediating
effect of EO on market orientation and firm performance. Firms that have access to debt
should be able to improve their performance. Thus access to debt finance can play the role of
intermediate variable which can mediate the relationship between EO and the performance of
SMEs.
CONCLUSIONS AND RECOMMENDATIONS

In the light of the findings of the study, we conclude that EO is positively and significantly
related to access to debt finance. Thus, access to debt finance could be increased with
increase in EO, hence reducing the financial constraints faced by some SMEs in Nigeria.
Conclusion is also reached based on the findings of the study that, EO has positive and
significant impact on SMEs performance in Nigeria. This implies that, EO can reduce weak
performance and high failure rate of SMEs in Nigeria. Similarly, a positive and significant
impact of access to debt finance and SMEs performance is established. Finally, the results
indicate that access to debt finance significantly mediates the relationship between EO and
the performance of SMEs. The findings of this study are consistent with the theoretical
foundation that EO can improve the firm performance. The findings are also consistent with
empirical literature that EO can improve access to debt finance by SMEs.
With respect to the above conclusions, the study recommends that, SMEs should imbibe the
dimensions of EO which are risk-taking, competitive aggressiveness, autonomy,
proactiveness and innovativeness to improve access to debt and performance. Thus, before
taking any action, they (SMEs) need to evaluate its levels of Entrepreneurial Orientation
(EO). This could be done through an internal audit. If a lack in its EO is found, the SME
needs thus to identify the factors that need to be developed. EO needs to be incorporated
within the structure of the SMEs, through a top-down management style. Strategic leadership
and support by SME owners are very important to develop entrepreneurship culture. The
management of the SME must also leave some available place among the workforce for
initiative making, autonomy and communication to develop EO. SME owners should
organize their firms in a way in which entrepreneurship can flourish in the form of new
products, ventures, and process ideas. SME owners must provide the leadership style that will
allow innovation and creativity to thrive. Government agencies responsible for SMEs such as
Small and Medium Enterprises Development Agency (SMEDA) should organize training and
seminars for SMEs on the dimensions of EO. This will go a long way in strengthening EO in
SMEs in Nigeria and thereby improved performance.
91
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94
Teaching perfect squares and their properties to gifted children – A classroom
experience
Dr S.R.Santhanam
Association of International Mathematics Education and Research

(AIMER) – INDIA.
SRI PRAKASH SYNERGY SCHOOL – RAMARAO PETA, PEDDAPURAM.
santhanam2015aimer@gmail.com
ABSTRACT
A teacher thinks it easy to teach square numbers to gifted children but in fact it is the most
difficult topic because the teacher will be facing unexpected questions from them. For
example, the following question is confronted by a teacher while teaching perfect squares to a
set of gifted children of age group 13-14.
If a number has an odd number of divisors then is it a perfect square?
In this paper the author shares his experience of teaching perfect squares to gifted children
and gives a set of non-routine problems involving perfect squares and their properties.
Keywords: Gifted child – perfect squares – pedagogies.
Conference Topic: Effective Teaching Pedagogies.
Introduction: Perfect squares of natural numbers usually are introduced for children of age
group 13-14. But the concept of perfect squares and their properties come a long way in the
school and college studies. The properties of them are not fully used in any school
curriculum. Especially the topic is a pet topic for a gifted child. Let us now see the
experiences of the author with them.
Usually the perfect squares are listed to a student as 164,93,42,11

2  2  2  2  ........
It is easy for a child to list out the perfect squares by squaring the natural numbers.
But given a multi digit number, it is not easy to check whether it is a perfect square or not.
For example, is 529 a perfect square or not or is 63001 a perfect square?
One way to find is to extract the square root of the given numbers using the algorithm
to find the square root. But this comes in a later stage.
Another way is to find the two squares such that the given number lies between them
and doing trial and error to find the result.
As an example, to find the square root of 1296, we find that 1296 lies between 30 2 40and 2
95
Let the required root be 30 x .

301296
 x 2 
xx
2
60900
xx
 60  396
Units digit of 396 is 6.
A logical chose of x is 6.
666
  396 .  The square root is 36.
Of course, for bigger numbers the calculations become cumbersome.
An important aspect of mathematics is pattern recognition. Take the list of square numbers
from 1 to 20
Table – A
Number 1 2 3 4 5 6 7 8
Square 1 4 9 16 25 36 49 64
Number 11 12 13 14 15 16 17 18
Square 121 144 169 196 225 256 289 324
If we concentrate on the units digits of these numbers, we observe that the units digit of
any square number can only be 0, 1, 4, 5, 6 and 9. The digits 2, 3, 7 and 8 do not appear at all.
Any multi digit number which ends with 2, 3, 7 or 8 is certainly cannot be a square number.
But all numbers ending with 0, 1, 4, 5, 6 or 9 need not be square numbers (eg. 10, 21, 24, 85,
46 etc)
This observation is useful for concluding that a number cannot be a square if it ends with 2, 3,
7 or 8.
Non-routine problems on square numbers
A non-routine problem is one which either gives a starting trouble or in the middle of
working, a bottle neck so that we cannot proceed. But when we see the solution of the
problem it is simple.
Let us take a simple problem.
Can 2n3 be a square for any natural number n?
96
When this problem was given to a set of students, the immediate response is to put n 3,2,1 .
. . . . to get 5, 8, 11, 15, . . . . and the students of age group 11 – 12 found that no number is a
square number. But this is not a proof.
How to approach this problem? The students had a starting trouble. The teacher advised them
to find the remainders when squares are divided by 3.
Square 1 4 9 16 25 36 49 64 81 100
Remainder when dived by 3 1 1 0 1 1 0 1 1 0 1
Thus when a square number is divided by 3 we get a remainder either 0 or 1.
But, when 2n3 is divided by 3 we get a remainder 2
Thus ( 2n3) cannot be a square.
Now a resourceful teacher can find linear algebraic expressions which are not squares.
The students were asked to find the remainders when squares and divisible by 5.
Square 1 4 9 16 25 36 49 64 81 100
Remainder when dived by 3 1 4 4 1 0 1 4 4 1 0
The remainders cannot be 2 or 3.

3n5and2n5
 (Equivalently 2n5) are not squares for any natural number n.
A systematic study can be carried out in these lines.
The following problem was given to a set of students of age group 14 – 15.
The sum of the squares of five successive positive integers is not a square – prove.
When this problem was given, most of them started with framing the equation
nn2    12  n  22  n  32  n  42 after simplification they come to know that
things become complicated.
Some of them took  

n  2 2  n 1 2  nn
2  1 2 
2
n 2 and on simplification got
n   If it is a square, then it must be divisible by 25.
.252
n2  2
Equivalently, n2  2 must be divisible by 5.  2  25
 pnp  But no square is of the
5
form 5p-2
Let us now take all together another type of non routine problem on squares
The 4 – digit number aabb when a,b are digits is given to be square. Find it.
97
The previous method of finding the remainders will not work there.
Let us assume aabb= n2 ----------- (1)
aabb = (1100)  a + (11b) = 11 (100a+b)

When a square number is divisible by some natural number r, then it must be divisible by r2
also.
11 being a prime, aabb must be divisible by 112 if it is a square.
 100a + b must be divisible by 11 or
99a + (a+b) is divisible by 11  11/ a +b
Since a, b are digits. The maximum value of a+b is 18.  a+ b = 11

We know that n2 is a square so it cannot end in 0, 1, 2, 3, 5, 7 or 8 the remaining digits are 4
and 6.
Checking them we get 7744 = 882
Consider the following problem which can be given to f gifted children of age group even 12
– 13 also.
Can the sum of the digits of a perfect square be 2015?

This is not only a problem on perfect square but on the digit sum of perfect squares.
When this problem was given to a set of gifted children of age group 14 – 15, there was no
starting trouble. They knew what they had to do. Consider perfect squares and their digit sum.
Table 1
Squares 1 4 9 10 25 30 49 64 81 100
Digit sums 1 4 9 7 7 9 13 10 9 1
Table 2
121 144 169 196 225 256 289 324 361 400
4 9 16 16 9 13 19 9 10 4
Table 3
441 484 529 576 625 676 729 784 841 900
9 16 16 18 13 19 18 19 13 9
From the tables it is very difficult to conclude anything. The students also were not able to
conclude anything fruitful. Then the teacher suggested them to consider the remainders when
divided by some natural number.
Most of then took 3 as a candidate.
Digit sum of the squares 1 4 9 7 7 9 13 10 9 1 4 9 16 16 9

Remainder of dividing by 3 1 1 0 1 1 0 1 1 0 1 1 0 1 1 0
Now the secret is out. When the digit sum is divided by 3 the remainders must be either
0 or 1.
98
The digit sum is given to be 2015, when divided by 3
When 2015 is divisible by 3 we get a remainder 2
Thus the digit sum of a square cannot be 2015.
When we closely look TABLE 1 we make the following observation. When the tens digit of
a square is odd then the units digit is 6.
When this observation was pointed out to a set of gifted children of age group 13 – 15, there
was a lot of interaction going an among them in groups.
Many of them came to the logical conclusion that whatever may be number, how many digits
it has, the last two digits only to be considered because in the square the last two digits are
determined by the last two digits of the original number.
They analyzed the squares by considering them.
In the case of 36, 196, the tens digits are add and the units digits is 6.
The problem arises as what type of proof must be given.
Some of them took the number as N = * * * . . .. . . * ab
Concentrating an ab and its square, they wrote
(ab)2 = (10a + b)2 = 100a2 + 20ab + b2

As per the condition of the problem the tens digit of the number must be odd.
20ab is even. Therefore the tens digit of b2 must be odd, where b is a digit.
Taking b=1,2,3,4, 5, 6, 7, 8, 9 and b2= 1, 4, 9, 16, 25, 36,49, 64, 81
They located two numbers in which the tens digit is odd (i.e) 16 and 36. In these two cases
we find that the units digit is 6.
The beauty of the square numbers is that many elementary questions can be framed on them
but few of them are not easy to be solved. Square numbers attracted trained brilliant
mathematicians from antiquity.
The well known Pythagorean triplets (a, b, c), such that cba
2  2  2 is the basis of such an
edifice.
Can the sum of two squares be equal to a square?
A very rich experience can be got by analyzing Pythagorean triples.
The next investigation may be can we find three squares whose sum also is a square?
This becomes a very difficult problem. The difficulty level of various simple questions must
be told to the students of school level so that their creativity can be developed systematically.
The teacher can give the following examples
22
i) 11962
2    2
99
ii) 162  182  242  342
But it is not fair to ask the students for a formula. In 1907, A.Gerardin gave the algebraic
identity (it is a surprise how he got it) for the result, the sum of three squares is a square.
222 222 22
22
   222
1277
abba 
1466
abba  33
ba 2
 ba 
The proof of it is not difficult, but what thought process went to find the formula is
remarkable.
Another remarkable work on the sum of three squares was done by W.C.Eells and his article
appeared in the American Mathematical Monthly, in the year 1914, 21st issue page 269 – 273.
To solve azyx
2  2  2  2 , Eells took x  MN2, NMy  2  2 and 2nma ,2 and gave to
2NM  ,2 Z the values mnnm2,2
2  in either order. He tabulated 125 sets of solutions
arranged according to the size of a.
It is the responsibly of the teacher to give full details of a concept and their properties as for
as possible by culling out information from all possible sources and resources. Once the mind
of a gifted child is triggered then as teachers we may feel that we have done justice to our
profession.
A small project can be given to the students of age group 13 – 15 on the sum of three squares.
For teachers
The following facts a teacher can expect from the student in the project work.
* Catalan gave the identity for the sum of three squares is also a square.
*
 2 
ca
Danielle 
2 
abbcaccbacbba
derived 2   2 
2   formula
a simpler from the above 22 
2 bycabcabcba
2  c=0,
putting 2
222

abba  
ab 2 
babbaa
22
* H.S. Monck had seen the problem geometrically. If a,b,c are the integral sides of a
rectangular parallelepiped and the diagonal ‘d’ is also an integer, then we get
He
dcba
2 
further
2  2  2
proceeded and got the result.
If a, b, c, d are respectively the edges and the diagonal (all integers) then we have a
parallelepiped whose edges are a+b+d, a+c+d, b+c+d and diagonal a+b+c+2d. From this he
got a new set of values 2,3,6 and 7
(i.e) 
22276322 
100
* Some mathematicians tried to find integers a, b, c and x, y, z such that
2
zyxcba
2  2  2  2  2 
A very good source book on this topic is, “History of the theory of Numbers – volume II –
Diophantine Analysis by Leonard Eugene Dickson – Dover Publication.
As teachers, we can give many projects on square numbers in the school level.
For a middle school teacher:
When a teacher teaching middle school (children of age group 1 – 13) where algebraic
identities are introduced, there are some problems which fit in the perfect squares. Two
examples are noteworthy
1) When an integer is the sum of two squares of natural numbers, then twice the integer
also.
In this problem an integer n is given as the sum of two squares ban

 2 2
We have to prove that 2n also can be expressed as the sum of two squares.
If one takes a=1, b=2 then ba

2 2  ,5 clearly 10 can be expressed as
1,312
2  and  andab
 3 ab
Once the teacher explains this, some students will certainly write
 2  2  
222
bababan  2  2
But, without the numerical example a gifted child could do this step.
These are the simple problems which can be given to a set of children to find out a gifted
child.
2) The second example is tougher than the first prove that for any positive integer
nn
2  1 cannot be a perfect square.
Ofcourse, when this problem was given to a set of gifted children, the immediate
reaction is to put numerical values for n.
They proved for n=1,2,3,4,5 to some extent the expression is not a perfect square. But how to
prove it. The idea is simple but they could not conceive it. Then the teacher led them to the
idea by asking some questions. List the perfect squares between 4 and 25. Immediately the
students listed as 9 and 16. The question is rewarded as find the perfect squares between 22
and 52. The answer was instantaneous as 32 and 42. Similarly when the question find the
squares between 52 and 152 was asked the answers 62, 72, 82, 92, 102, 112, 122, 132, 142 was
immediate. Then the teacher asked how many squares are between 182 and 192. Then also the
answer from the students was immediate. There is no square between 182 and 192. Then the
idea became very clear to them. There is no square number between two consecutive squares.
101
Then some of them started working out the problem of proving nn
2  1 cannot be a square
of
for any natural number n. Many them arrived at the following solution.
2  2   1  nn
nnn 2 
12 nnn
,
2
n 1
 2 1 
2
2n and 1n2 are two consecutive squares. So another square cannot lie between them,
implying that nn
2   1 cannot be square.
This idea is very useful for the teachers to frame questions for gifted children. Consider the
following problem
For any positive integer n, is 89192nn is a perfect square?
As teachers, if we start putting n=1,2,3 . . . one can find n=8 gives the value 1 when
substituted in 89192nn which is 21, which is a perfect square. Because it is a quadratic
expression, we may expect one more n. A little working out tells us that for n=11 also we get
the expression is equal to 21.
So, framing of the question must be different.
For any positive integer n>11, prove that 89192nn is not a perfect square.
The nearest perfect square to 89192nn is 

n  9 2  nn
2 18  81 Now
nn
2 8919  2 18nn 81 n 8 nn
2 18 
881n
Sinceitn>11
Now because easynn
clearly 2  18 
became we n2 
81 have to
8919
consider
n the next square  10020
 11 n 10 2  nn
2 
nn
2 
8919  nnn
2 
1001120  n 10 2 
n
Since n>11, n-11 is positive
10

2 2 
 nn
2 
8919  2
n 10 n  9  nn8919  2
n
This gives a fairly good idea for the teachers to frame questions.
References:
i) Dmitn Fomin, Sergey Genkin; Ilia itenburg – Mathematical circles (Russian
Experience) – University Press.
ii) Arthur Engel: Problem solving strategies – Springer International Edition.
102
Exploring Service Innovation Process in a Small Business Services Firm
Dr Vessela V. Warren
University of Worcester, Worcester, UK
Email: v.warren@worc.ac.uk
Prof Barry J. Davies

University of Gloucestershire, Cheltenham, UK
Email: bdavies@glos.ac.uk
Abstract
This case study research reports on a small and medium-sized (SME) business-to-business
(B2B) services firm implementing a novel new service development (NSD) process. It
provides accounts of what occurred in practice and considers the implications for this and
other firms’ innovation practices. This longitudinal case study (18 months) was conducted
“inside” the case organization. It covered the entire innovation process from the initiation to
the launch of a new service. The primary method may be viewed as participant observation.
The research involved all those participating in the innovation system in the firm, including
decision-makers, middle managers and employees at lower hierarchical levels and the firm’s
external networks. Implications for researchers and managers focusing on structured
innovation models for the services sector are also presented.
Key words: innovation, services, new service development, SME
Main Conference Topic: Economics, Management and Marketing
Introduction
The service sector has grown exponentially over the last 20 years (Gallouj & Savona, 2008).
Services have replaced most manufacturing activities in the most advanced countries’
economies (Fitzsimmons & Fitzsimmons, 2005; Chesbrough & Sphorer, 2006). In UK, the
service sector accounts for 80% of the UK GDP (ONS, 2014). However, service innovation is
a neglected area of study by scholars and practitioners alike (Chesbrough & Sphorer, 2006).
Innovation has been explored extensively in the context of the manufacturing sector (e.g.
Abernathy & Utterback, 1978; Christensen, 1997; Benner & Tushman, 2003). Innovation in
the context of the broader service sector continues to remain unexplored and relatively
immature, as Tether, Hipp and Miles (2001) suggested a decade or more ago. The key
exception is some work conducted in financial services development (e.g. de Brentani, 1993;
Edgett, 1993, 1996; Storey & Easingwood, 1996; Akamavi, 2005). This paper is positioned
theoretically within the limited innovation management research on services.
The paper, first, provides the theoretical background of the study. Next, the research
methodology adopted and the case study organization are outlined. It then explores the
attempts made by the case participants to systematize the development of new services by
implementing a structured service innovation process. The paper, finally, illustrates the
emerging innovation practices that bring a greater improvement to the service innovation
activities.
103
Theoretical Background
Much previous research recognizes the importance of formal and structured innovation
processes to companies (Booz et al., 1982; Easingwood, 1986; Bowers, 1989; Scheuing &
Johnson, 1989; Griffin, 1997; Johne & Storey, 1998; Cooper & Edgett, 1999; Crawford & di
Benedetto, 2003; Akamavi, 2005). There is an extensive body of literature on models for the
development of goods (e.g. Booz et al., 1968, 1982; Crawford, 1987; Pessemier, 1977;
Cooper, 1986, 1994, 2001). In particular, Cooper’s “stage-gate” model (Cooper, 2001) is
well-recognized amongst scholars and practitioners.
There is clear evidence in the literature that structured innovation models for goods are
widely implemented in the manufacturing sector. These processes are key to the
improvement of the manufacturing firms’ innovation productivity (Cooper, 2001). The
literature however lacks process models that specifically address new service development
(NSD). Moreover, very little is known about how innovation processes are organized and
managed in the service sector (Sundbo, 1997; Tether, 2004, 2005), in contrast to the
manufacturing sectors where a great deal of literature exists (Miles, 2000; Tidd et al., 2001).
The literature review revealed that there is a lack of research investigating how innovation
activity is undertaken within business services firms and there are hardly any empirical
studies which examine systematic business service innovation in an SME context. Therefore,
it is unclear whether a systematic approach to service innovation, or indeed the
implementation of a model such as the “stage-gate” (Cooper & Edget, 1999; Cooper, 2001) is
useful for business services firms. The literature fails sufficiently to recognize the need to for
research on applying NSD process models to help improve their adaption and adoption by
service firms.
The literature lacks emphasis on NSD processes, despite the recognized need for systematic
new service development processes. A review of the service development literature revealed
that more research is needed into new service development within business services firms. In
particular, research is required on applying models for development of new services
empirically, in order to build knowledge and understanding based on practice. This study
provided rich material concerning the application of cutting edge methodologies such as the
“stage-gate” in the context of an SME B2B service firm. The case study supported the
development of both theoretical perspectives and empirical insights.
Methodology
The empirical research was a longitudinal case study over a period of eighteen (18) months.
The focus investigated ways of improving a firm’s innovation practices through the
implementation of novel business processes. Case study is an important approach for
business and management researchers, in particular. It allows researchers to focus on a
specific situation and explore in-depth particular events, activities or interactive
organizational processes (Stake, 1995; Remenyi et al., 1998). These cannot be studied by
survey or through experiment (Saunders et al., 2013), as these methods typically and
purposely separate the phenomenon from its context. The case study assessed business
innovation practices, before and after the implementation of a structured innovation process.
In this longitudinal research, mixed inquiring techniques were used to produce a “detailed
investigation” (Hartley, 2006, p. 323) of firm’s current innovation practices. This case study
also offered an opportunity to observe and participate in the implementation of novel
business processes for the development of new services. This is a particular contribution, as
104
there is little research evidence concerning this in the innovation management literature.
Qualitative applied methods that were used in this research included: participant-observation,
direct-observation, interviewing participants, either individually or in groups, and document
analysis. The research project involved strategic decision-makers, middle managers and other
employees, and the firm’s external networks.
This approach allowed investigation of two aspects: exploration of the consequences of the
implementation of a novel service innovation process, and assessment of the issues involved
around implementing a systematic new service development process itself. An in-depth
understanding of the different perspectives and experiences of issues related to the innovation
activities and situations in context was generated. This allowed pitfalls for process
implementation to be identified, and perceptions of the current innovation practices
developed by participants. In this way, the need for research on systematic new service
development processes is addressed. Also, models for development of new services within
business services firm settings are applied. This paper provides accounts based on practice.
The case study of Delta

The case study firm, Delta’s main business was to deliver business support services to the
private sector on behalf of the UK public sector organizations (e.g. local government). Delta
represented a unique case because the firm delivered predominantly services on behalf of the
public sector, and had not developed its own business services for commercialization.
Delta has experienced initial competitive advantage and has been successful in its market
place for over 10 years. However, they had not been proficient in growing other lines of
business. They were experiencing performance difficulties due to the economic and financial
situation worldwide and the cutbacks announced by the UK government.
Delta had a real need to diversify its customer base. It chose to directly target SMEs with its
own commercial services, in order to reduce its reliance on public sector contracts. The
company recognized that it lacked expertise to address key issues in implementing best
practice in service product and process innovation. It wanted to achieve a fully integrated
service design process. Delta’s owners approached a local HEI and developed a project plan
for the design and implementation of a novel business process. The process was for service
innovation, identified as the primary driver for business growth in the private business-to
business (B2B) arena.
Exploring Delta’s service innovation practices

Research into the firm’s current innovation practices was undertaken. This revealed that,
overall the firm seemed relatively well organized in terms of business development structure
for the public sector. Operations, processes and procedures all supported the delivery of
public sector contracts/projects. During early phases of the research, it seemed that Delta had
an established, but unstructured and “ad hoc” process for identifying, selecting and
developing competitive tenders. Delta’s tender process was the core of the firm’s innovation
practices. Each new project required fresh design thinking, where stages and decision points
in the tender process flowchart resemble the “stage-gate” innovation process.
Participants, without exception, considered that Delta needed to change. They had tried to
develop and deliver their own new services; but failed at this several times. Delta’s staff
ascribed this to a lack of leadership and particular skills. Therefore they expected that the
NSD process implementation would help Delta in this aspect. With the organization’s
105
expansion with public sector contracts, there were already some emerging problems of
communication between the different departments. A confusion around what the organization
was and who they are was evident. The staff perceived that the company did not have a clear
strategy, processes or systems. Delta was thought to lack people in place that could contribute
to the development of new services within the private sector.
This context-specific situation had implications for the implementation of a service

innovation process. However, our concerns were related to the fact that Delta had not
developed their own business services since its foundation and the attempts recently made
had failed. We were concerned whether the senior managers of Delta fully understand and
acknowledged the commitment that was required from them and the organization in order to
implement a new service innovation process. Delta’s senior management were worried about
issues such as the ending of major contracts and cuts in public funding; they looked in
response to, (essentially), quick profit gains. This led them to under-estimate the challenges
that NSD processes bring.
Delta’s initial innovation practices were based on their tendering experience. Despite some
similarities between the tender processes and the stage-gate process for NSD (in terms of
having stages where certain activities are executed and gates which act as decision points),
these differed in terms of uncertainty and risks.
Delta was previously unsuccessful in launching new private sector services. From this
experience, an analysis of their results and reflection on the situation, we believed that Delta
had no understanding of what “service innovation” involved. At least, there was no
understanding of how to do it in a systematic way. Delta would not be able to achieve success
in launching new services, unless it implemented some form of structured innovation
practice. It seemed that Delta was busy in delivering governmental services ever more
efficiently, and lacked the systems and processes, people and skills to engage in innovation
practices aimed at new services for business.
In reality, Delta’s specific context demonstrated that a new business service could not happen
within the firm’s existing service development and delivery system. It seemed that none of
the elements of their current innovation practices could be retained and used in the new NSD
process, in our view. New, creative ideas for private sector services were unlikely to flow
from the existing public sector oriented process. What emerged was, in this case, an insight
amongst Delta’s senior managers that not just the existing service design and delivery system
needed to be changed, but the organization’s business model needed to be completely
transformed. A radical change was required to deliver new private sector business services;
this necessitated a novel NSD process.
At strategy workshop for senior managers the key problems/ issues with their current
innovation practices were discussed. At this workshop, case examples were reviewed of best
innovation practices such as a “stage-gate” process. Awareness was built of the need of
something similar for Delta, due to inadequacies and limitations of the firm’s current
innovation process. An approach to implementation of an NSD process was then presented to
the board of directors, together with the process specifications and the proposed work plan
for board agreement and sign-off.
Following the strategy workshop, the senior managers started to recognize that the company
was not well “equipped” to compete in new markets with new products. After the initial
failures in developing new services, the senior managers understood that the company was
106
not realizing the benefits of innovation. Therefore, they decided they had to change their
actions and behaviours and increase their commitment in the face of current challenges. They
recognized the need to improve execution in order to yield positive results from the
innovation process. Finally, they recognized that a new process acting as a “vehicle for
change” might help them achieve their growth ambitions.
Most importantly, managing the organization’s perceptions/expectations of the process and

then achieving decision-makers buy-in and commitment to the process was, they decided,
crucial (Cooper & Edgett, 1999). The changes introduced with the implementation of
structured processes for new service development and response to the changes in their
external environment needed to be widely embedded in the organization.
Delta’s senior management recognized that their own commitment was important in
achieving the firm’s strategic objectives, reflecting the views in the literature. Most
importantly, the leadership team’s involvement in and commitment to the new innovation
process was critical to the success of the service innovation implementation initiative. This
recognition echoed the views in the literature.
Cooper (2001) stresses the view that senior management must commit to a systematic and
disciplined approach to the development of new products and the launch of them in the
market place. Similarly O’Conner (1994) reported the findings of research in manufacturing
firms that have already launched their “stage-gate” process and found out that one of the key
components affecting the implementation of such a process is related to “managing the
organization’s perceptions/expectations and commitment to the process” (O’Conner, 1994, p.
184).
A preliminary design of Delta’s innovation system, including procedures, sample

documentation and tools were developed to support the different activities involved in such a
process. These were presented and approved by Delta’s board. The resources required for the
implementation of the process were also approved. The innovation activities included: idea
generation, idea selection, writing a business case and decision reviews. Other aspects of the
new system implementation such as project planning and management, team work, learning
and creative thinking were also addressed with in-house training.
The innovation process was formally launched and in the following months wider
communication initiative via email and face-to-face meetings was undertaken in order to let
all employees know about the new innovation process and to obtain buy-in, at all levels of the
organization.
A major development in the firm’s innovation practices was the introduction of “creative
challenges”. The “creative challenges” were advertised internally either through monthly
newsletters or leaflets; the aim was to recruit volunteers to take part in developing the
proposed ideas for new services. The teams taking part in the “creative challenges” were
partly formed by including those who have proposed the ideas and partly by those who
volunteered to take part. This initiative was underpinned by the intent to enable an
organizational culture of teamwork, innovation and learning.
The “creative challenges” were launched by selecting the most promising ideas from the
“Idea bank”. This “Idea bank” had resulted from prolific idea generation and ideas
solicitation activities. A dedicated email account for the collection of ideas from staff and
107
“Idea bank” where ideas were stored and handled were set up. Existing projects were also
brought into the “Idea bank”
Various conversations with staff to try to change the organizational culture and to develop a
culture of innovation were undertaken. But we felt this could have been done only if senior
managers took ownership and led this process change. We expressed this concern with one of
the managing directors who agreed and decided to affirm the business development director
as an “innovation champion”. The business development director’s position within the
company helped the programme to evolve and the number of ideas put forward from the staff
increased.
Other middle and senior managers within the company became involved, such as the
marketing manager, human resources and head of enterprise, who also empowered other staff
to contribute with new ideas to the NSD process which was often referred to as an
“innovation machine”. Here we could say that Delta’s “innovation machine” was clearly
“ignited” by the positive and powerful contribution of many from across the organization at
different levels and functions.
Following the launch of the new service innovation process, in less than one and a half
months, the project proposal was approved for implementation and in less than three months
a new business division was set up and the new service was formally launched.
Implications
With the implementation of the new structured process, the service innovation activities
within Delta saw a great improvement. This perspective was endorsed by Delta’s staff and
our external/ internal views. There were four explanations. Firstly, the introduction of
structured innovation process itself. The process that was developed and implemented based
on the “stage-gate” model was useful for Delta, an organizaton that was wholly inexperienced
in designing and developing new business services. The firm improved areas that did not
work in places, standardized approaches to idea selection, project approval and decision
making by using the tools that were provided for them. Then Delta successfully implemented
and launched new business services. This was possible because they had improved their
innovation practices, and moved towards a more systematic approach, and succeeded in
managing their new NSD process. Secondly, the case firm improved the usefulness of the
standard “stage-gate” process by implementing the techniques of “creative challenges”, by
using competing teams, and employee engagement from different departments. Thirdly, Delta
adapted the new process by adding flexibility when required, by executing innovation
activities and stages in parallel, by adding frequent (often informal) project milestones and by
explicitly signing-off decisions. Lastly, the process received support and seemed well on the
way to becoming embedded within the organization.
Conclusions
This paper provided a better understanding of the applicability of an adapted “stage-gate”
NSD process in the context of a B2B services firm. The process brought a new level of
awareness within the service firm toward service innovation, and a greater synergy among
different stakeholders and departments across the organization. The introduction of a
structured NSD approach had a major impact on Delta, in terms of: the development and
launch of new business services; new ways of business planning; developing the company’s
own capabilities and skills across the organization, and fostering a culture of innovation.
Clearly, this case shows that formal and structured innovation processes are important and
108
useful to B2B services firms. Service innovation involves complexity of activities, decisions
and internal and external interactions; indeed, it is questionable whether innovation can be
sustained over a long time period without such systematic processes. Service firms,
independently of their size, therefore may well benefit by adopting a structured approach for
NSD on a consistent basis.
Dr. Vessela V. Warren is a Lecturer in Operations and Project Management, Worcester

Business School, University of Worcester. She holds a BSc in Economics from the
University of Bologna, Italy, MBA from University of West of England, UK and DBA from
University of Gloucestershire, UK. She has several years’ experience in business start-up,
strategy and internationalization. Her main research focus is in innovation, services, SMEs
and knowledge transfer.
Prof. Barry J. Davies is an Emeritus Professor, Faculty of Business Education and

Professional Studies, University of Gloucestershire. He was previously MFI Professor of
Retail Marketing at Manchester Metropolitan University. Prior to becoming an academic, he
worked in department and chain store management. He received his formal business
education at the Universities of Bolton, Central Lancashire, Lancaster and Cranfield. His
research centres on service environments and interactions within them.
References
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Innovation in the Automobile Industry, Baltimore: John Hopkins University Press.
Akamavi, R. K. (2005) “A Research Agenda for Investigation of Product Innovation in the
Financial Services Sector”. Journal of Services Marketing, Vol. 19, No. 6, pp 359-378.
Booz, Allen and Hamilton Management Consultants (1982) New Products Management for
the 1980s. New York: Booz, Allen and Hamilton Management Consultants.
Bowers, M. R. (1989) “Developing New Services: Improving the Process Makes it Better”,
Journal of Services Marketing, Vol. 3, No. 1, pp 15-20.
Chesbrough, H., and Sphorer, J. (2006) Services Science: A Research Manifesto. Haas School
of Business, UC Berkeley and IBM Research.
Christensen, C. M. (1997) The Innovator’s Dilemma: When New Technologies Cause Great
Firm to Fail. Boston: Harvard Business School Press.
Cooper, R. G. (1986) Winning at New Products. Reading, MA: Addison-Wesley Publisher.
Cooper, R. G. (1994) “Perspective: Third-Generation New Product Process”, Journal of
Product Innovation Management, Vol. 11, pp 3-14.
Cooper, R. G. (2001). Winning at New Products: Accelerating the Process from Idea to
Launch, (3 ed.). Cambridge, MA: Perseus Publishing.
Cooper, R. G. and Edgett, S.J. (1999) Product Development for the Service Sector – Lessons
from Market Leaders, New York: Perseus Books.
Crawford, C. M. (1987) New Products Management, (2nd ed.), Richard D. Irwin, Chicago,
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Irwin/McGraw-Hill.
de Brentani, U. (1993) “The New Product Process in Financial Services: Strategy for
Success”, International Journal of Bank Marketing, Vol. 11, No. 3, pp 15-22.
Easingwood, C.J. (1986) New Product Development for Service Companies, Journal of
Product Innovation Management, 3 (4), 264-75.
109
Edgett, S (1993) “Developing New Financial Services within UK Building Societies”,
International Journal of Bank Marketing, Vol.11, No.3, pp 35-43.
Edgett, S (1996) “The New Product Development Process for Commercial Financial
Services”, Industrial Marketing Management, Vol. 25, No. 6, pp 505-515.
Fitzsimmons, J. A., & Fitzsimmons, M. J. (2005) The Role of Services in an Economy.
Service Management: Operations, Strategy, and Information Technology, (4th ed). McGraw
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Gallouj, F., & Savona, M. (2008). Innovation in Services: A Review of the Debate and a
Research Agenda. Springer - Verlag.
Griffin, A. (1997) “PDMA Research on New Product Development Practices: Updating
Trends and Bechmarking Best Practices”, Journal of Product Innovation Management, Vol.
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Hartley, J. (2006) Innovation and Its Contribution to Improvement, A Review for Policy
Makers, Policy Advisers, Managers and Researchers, London: Department of Communities
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Johne, A., and Storey, C. (1998) “New Service Development: A Review of The Literature
and Annotated Bibliography”, European Journal of Marketing, Vol.32, No.3/4, pp 184-251.
Miles, I. (2000). Services Innovation: Coming of Age in the Knowledge Base Economy.
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Tidd, J., Bessant, J. and Pavitt, K. (2001) Managing Innovation: Integrating Technological,
Market and Organisational Change. Chichester: John Wiley & Sons.
110
INITIAL SOLUTIONS FOR VRPTW BY TAKING INTO ACCOUNT
THE TIME WINDOWS
Teodor Dimitrov Berov
Todor Kableshkov University of Transport, Bulgaria
e-mail: tberov@vtu.bg;
Abstract
The vehicle routing problem with time windows is an important problem in the supply chain
management. The first step in obtaining near optimal solutions for VRP problems is the
initial solution algorithm when used heuristics. In this paper is proposed algorithm for
obtaining one "giant tour“ of customers by considering both the distances and the time
windows for the customers, and then this tour is divided into a number of smaller routes by
split algorithm. The effectiveness of the approach is shown for the 36 stores, located in the
city of Sofia.
Keywords: vehicle routing, time windows, initial solution, heuristic.

Main Conference Topic: Transport and Logistics
1. Introduction
The Vehicle Routing Problem (VRP) is a well-researched problem in the Operations
Research. The VRP consists of designing m vehicle routes of least total cost and: each
starting and ending at the depot, such that each customer is visited exactly once; the total
demand of any route does not exceed the vehicle capacity, and the length of any route does
not exceed a preset maximal route length. The basic VRP can be extended by taking into
account: time windows of customers’ requests (VRPTW), heterogeneity of vehicle fleets,
tasks conducted by vehicles, the number of home depots, and operational restrictions faced
by vehicles.
A time window (TW) is the period of time during which deliveries can be made to a specific
customer (time window is considered soft (allowing a penalized late service) or hard (no late
service allowed)), with two main characteristics: ei - the earliest allowed arrival time, and li -
the latest allowed arrival time. It is an extension of the VRP that has been researched
extensively [3].
A large number of algorithms have been developed to solve the VRP problem.
Depending on whether an exact optimal solution or an approximate solution is reached, they
can be categorized as the exact algorithms or the heuristic methods. There are different
families of heuristics for the VRP. They can be classified into two main groups - the classical
heuristics and the metaheuristics that commonly used the initial solutions, typically created
with some cheapest insertion heuristic.
Compared with classical heuristics, metaheuristics perform a much more thorough
search of the solution space, allowing inferior and sometimes infeasible moves, as well as re
combinations of solutions to create new ones.
An popular approach for create initial feasible solutions, is with two well-known
classical heuristics [3]: the Clarke&Wright and the sweep algorithms (the TW is not
accounted for in their main form). Solomon [7] divides VRP tour-building algorithms into
either sequential or parallel methods, taking into account the TW.
Solomon [6] proposes a so-called route-first cluster-second scheme using a Giant
Tour Heuristic. First the customers are scheduled into one giant tour and then this tour is
divided into a number of smaller routes. The initial giant tour could, for example, be
generated as a traveling salesman tour without considering the capacity and time constraints.
111
This idea is used in some Genetic (population) algorithms (GA) where each
chromosome is encoded as a giant tour (T) and Split is used again to evaluate giant tours
(Split extracts the best VRP solution, subject to (T)). This is done by generating optimal
shortest path within an auxiliary graph built from the giant tour. The chromosome is a
permutation of n positive integers, such that each integer is corresponding to a customer
without trip delimiters. A chromosome may be broken into several different routes. Based on
a literature review, widely used is Splitting algorithm [1,2,4,5]. Because a chromosome can
be split into many different routes, author proposed a splitting procedure which can find an
optimal splitting, i.e. a trip delimiter so that the total cost is minimized.
In all these algorithms, new chromosomes are generated using either by crossover or by
mutation procedures. Needed are a sufficient number of initial solutions, especially for the
crossover procedure. The qualitative initial variants have significant influence on the quality
of the final result,
Finding a feasible, and integrated initial solution to a hard problem is the first step in
addressing the scheduling issue. In this paper an algorithm is proposed that integrates the TW
specific variants of the VRP. The paper also contributes to reducing the computational burden
by proposing a concept referred to as time window compatibility to evaluate the insertion of
customers on positions within routes with a probabilistic method.
2. Problem description
The initial solutions of the metaheuristics scheme are typically generated using
procedure of heuristic generation of initial solutions. This is a constructive heuristic that first
build a giant tour where a given node i is added after the previous one i-1 on the nearest
neighbor principle. To convert the giant tour into a VRP solution (with respect to the VRP
specificities - the availability of vehicles), the split procedure has to tackle resource
constraints.
An efficient search strategy for routing problems is based on a swap between two solution
representations: solutions encoded as giant tours (TSP tours on the n customers) and solutions
encoded as the set of trips (figure 1).
START initial solutions new solutions
Insol
| 1 Nsol 1
|
create Insol n Nsol n
initial
solution Yes
Is the
flexible
solution
? Cost
Candidats
of New Is the child
Crossover
parent I better ?
parent i+1 No
Yes
|
child j
results
No Yes
Yes Termination
Start
conditions
mutation
End of In.Sol.? ?
No END
Figure 1: Overview of the initial solutions and GA algorithm

As mentioned earlier, the reproductive process in GA can be done either by crossover or by
mutation procedures. A crossover (or recombination) operation is performed upon the
selected chromosomes. One approach is the order crossover which can be explained as
follow: First, two chromosomes are randomly selected from the initial population and the
112
least-cost one becomes the first parent P1. Two cutting sites i and j are randomly selected in
P1. Then, the substring P(i)..P1(j) is copied into C(i)..C(j). Finally, P2 is swept circularly
from j +1 onward to complete C with the missing nodes. C is also filled circularly from j +1.
The other child may be obtained by exchanging the roles of Pi and P2.
Stage 1: preprocessing data

Initializing of ,Seed” customers -> Seed[];
Stage 2:
{ //global parameters
Links|] = Links [customers i) { [prev][foll|-> (-1), (-1)}
FirstCustomer = Depot;
Last Customer = Seedſ 1);
ListSequence [] -> new[];
}
begin
while (each customer is not encircling) do
area = , initial”,
NNI] = call Determination of the closest neighbors (area);
while ((Links [i][foll] = (-1)) or (exit 1 == true )) do
NextCustomer = NNIfirst];
while (i->NNſi]==end) or (exit == true)) do
if (NNIany] == Seed [any]) then
{
NextCustomer = NNIfound];
exit = true;
}
else
{
area = -> area ++;
new NNI] = call Determination of the closest neighbors (area);
}
if (area’ > area(max)) then { exit = true; exit 1 = true;}
end while
if (NextCustomer == LastCustomer) then exit 1 = true;
end while
Links|[LastCustomer][foll] = NextCustomer;
Links [NextCustomer][prev] = LastCustomer;
if (Seed[]. Contains(NextCustomer)) then Seed[].Remove(NextCustomer);
ListSequence [] -> AddRWextCustomer);
LastCustomer = Next Customer;
end while
end
Figure 2: NN-TW framework for the VRPTW

The Fitness function for Vehicle Routing with time windows problems can be explained as:
(1) c(s) =X.cCR)

A solution S is a collection of routes, R, R2...R, such that each customer will be covered by
exactly one route Ri.
113
In performed tests is established the effectiveness of initial solutions made using the logic of
Nearest Neighbor (NN) randomized and taking into account of TW. The algorithm (figure 2)
is based on two main steps:
Initial determination of consumers who would be first in the route ("seed") - depending on the
travel time from the depot, the beginning and duration of the TW;
When implementing of the algorithm for NN (TSP) - in finding a candidate "seed" arranges
next candidates depending on its TW.
The main activity in the modification is performed by the function "Determination of the
closest neighbors (area)" It performs the following:
- In the relevant neighborhood establish a list of the candidates concerned, i.e. performs
"nearest neighbor" depending on the travel time;
- puts the candidates sequentially one after another, taking into account the both travel time
between them and their corresponding TW. Priority is given to TW, i.e. from both the latest
allowed arrival time and duration define his place in the sequence. If in the list of NN
candidates is one marked as "Seed", it is added after the previous and the time is calculated in
respect of its TW.
Figure 3: NN-TW for C101 Figure 4: TSP (NN) for C101
Figure 5: Routes for С101
2.1. Application of the proposed algorithm
114
Figure 6: NN-TW(34) for 36 stores located in Sofia Figure 7: Routes for 36 stores located in Sofia
Table 1: Comparison of the results of the final routes and the initial solutions
Difference
№ name method
routes traveled time traveled distance
1 НВ-01 „ Clarke&Wright“ = + 50 min + 12,4 km
2 НВ-02 „Sweep“ +1 rout + 98 min + 31,0 km
3 НВ-03 „Sol-01“ +1 rout + 32 min + 12,5 km
4 НВ-04 „ NN-TW “, (34) = + 8 min + 4,9 km
5 НВ-05 „ NN-TW “,(36) = + 46 min + 14,0 km
6 НВ-06 „ NN-TW “,(1) = + 38 min + 10,0 km
7 НВ-07 „ NN-TW “,(2) = + 20 min + 3,4 km
8 НВ-08 „ NN-TW “,(18) = + 24 min + 6,1 km
9 НВ-09 „ NN-TW “,(24) = + 22 min + 7,8 km
10 НВ-10 „ NN-TW “,(26) = + 10 min + 6,6 km
* the relevant initial customer is shown in brackets
Figure 8: Comparison of the results of the final routes and the initial solutions
115
The methodology is applied for the 36 stores located in Sofia. In the table 1 the results
obtained using different methods for creating initial solutions are shown - Clarke&Wright,
Sweep, Solomon I1 and proposed NN-TW. Final distribution of routes obtained by GA is
shown in figure 7, and “giant tour” version of initial solution is shown in figure 6.
Real distances (traveled time) between the objects by a map of the street network are used in
the calculations.
3. Conclusion.
The initial solution algorithm is the first step in obtaining near optimal solutions for
VRP problems. In this paper the concept of TW compatibility is introduced to ease the
computational burden of the algorithm, and to find a better seed customer. The amount by
which the proposed algorithm eases the computational burden is a direct function of the TW
characteristics of the customers in the network. Numerical results indicate that initial solution
algorithms are highly sensitive to the specific problem instance. This paper claims that the
proposed algorithm holds both distance and TW opportunities for problem instances where
customers are clustered.
The results of the initial solution algorithm proposed in this paper demonstrate that this
approach results in a fast computational time for finding and higher quality final result. It is
applicable very well for GA using set of initial solutions.
Teodor Berov, PhD., is an Asst.prof. at Todor Kableshkov University of Transport, Sofia,

Bulgaria. He received his: MSc degree from Technical University of Sofia; PhD degree from
Todor Kableshkov University of Transport/Transport Management. His scientific-research
interests focus on the Transport Management and Logistics/Urban Freight and Passengers
transport.
References
Berov Т., 2014, Procedure for the separation sequence of vertices in different routes,
Machines, technologies, materials, Vol. 8, No. 6, pp. 9-12.
Christophe D et al., 2010, A GRASPxELS with Depth First Search Split Procedure for the
HVRP, Research Report LIMOS/RR-10-08.
NEO/VRP, http://neo.lcc.uma.es/vrp/.
Prins C., 2004, A simple and efective evolutionary algorithm for the vehicle routing problem,
Computer and Operations Research, 31, 1985 - 2002.
Prins C., Lacomme P., Prodhon C., 2014, Order-first split-second methods for vehicle
routing problems:A review, ScienceDirect, Transportation Research Part C 40, 179–200
Solomon, M.M., 1986, On the Worst-Case Performance of Some Heuristics for the Vehicle
Routing and Scheduling Problem with Time Window Constraints, Networks 16, 161−174.
Solomon M.M., 1987, Algorithm for the vehicle routing and scheduling problem, Operations
Research, Vol. 35, No. 2. pp. 254-265.
Карагьозов K., Беров Т., 2014, Приложение на империалистически конкурентен
алгоритъм за оптимизиране маршрутизацията на превозните средства, Механика,
транспорт, комуникации, том 12, бр. 3(1), стр. 63-68
(Karagyozov K., Berov T., „Prilozhenie na imperialisticheski konkurenten algoritam za
optimizirane marshrutizatsiyata na prevoznite sredstva“, Mehanika, transport, komunikatsii,
ISSN 1312-3823, tom 12, br. 3(1), 2014, str. 63-68)
116
Training Program on
Spelling Strategies for in- Service Teachers
MAHA MAJEED ANBER
University of Anbar, Iraq/ Baghdad
Faculty of Education
Department of English Language
alisabah40@yahoo.com
Teacher Education
Abstract
The present study aimed at presenting a proposed training program for the novice teacher who has
experience less than one year in teaching English language at public schools. The aim of the study is
to train the novice teachers how to teach the spelling strategies to the students. The researcher
distributed need analysis sheets to 24 in service novice teachers, in order to reveal which teaching
strategies that the novice teachers need most than the other. The result shows that the teacher are
in urgent need for spelling training program. The training program will be carried out in three
Saturdays. The content of this program is ( the 1st day: The importance of spelling skill/ The
development of spelling strategies. / Break/ Corrective spelling Strategies/ Maintenance spelling
strategies/ Assignment). There will be one week between the second Saturday and the other to
enable the trainees to carry out the assignment. The researcher will assess the teachers by
discussing their self-Observation and team-teaching reports and provide feedback. Finally, the
researcher sets two types of assessments: Formative and Summative assessments.
Keywords: Spelling program, Formative and Summative assessment, Need analysis, Experiential
Knowledge, Spelling Corrective Strategies.
INTRODUCTION
Curriculum design specialists have developed various frameworks that break down the process of
curriculum and course development into components and sub-processes. A framework of
component is useful (see appendix A), the processes are not necessarily sequential but may be
carried on in the re-planning, planning and teaching stages of course development (Graves,1996)
The present training program, for novice teachers, is an attempt to upgrade the quality of students'
spelling, increase the students' intrinsic motivation by involving them more in the classroom
117
activities, and enhance the students' achievement in spelling skill. This notion is derived from
Browns' 12 principles and Omaggio's five hypotheses (Brown, 2001, and Omaggio, 2001).
2. Objectives
This training program aims at:
Enhancing the trainees' received knowledge in the area of mastering the spelling strategies.
Enhancing the trainees' experiential knowledge concerning teaching spelling.
Acquainting the trainees with the importance of spelling in English language teaching.
Familiarizing trainees with the different kinds of spelling strategies.
Improving the quality of trainees' classroom spelling teaching.
Focusing the trainees' attention on the important of students' correct spelling (Appendix B).
Enhancing teachers' procedures for teaching spelling.
Improving classroom self- correction procedures.
3. Rationale
This training course is concerned with teacher's strategies in teaching spelling skill, a skill that
teacher needs to improve classroom environment, motivate students and to maximize their
participation in language learning. It is a practical and reflective training program. It is a (three-day)
in-service training program that will be carried out on Saturdays.
4.Target population
This training program is intended to attract in-service English language novice teachers who teach at
different stages in public schools in Baghdad. Each training session will consist of no more than
twenty-five trainees.
5.Need for the course
All teachers need training program to develop themselves and become professional in their fields.
The new events of the new century demand from the teachers to change themselves to meet the
new challenges of education. Novice teachers need training and professional development to enable
them to meet the new roles of the learners as the need analysis reveals (Appendix 1). The researcher
sends the need analysis questions via e-mail to his sister (who is teaching English Language at
intermediate public school in Baghdad) and she administered them to 24 English novice language
teachers at six public schools. After receiving the responses the researcher calculated the means of
the teachers' responses. Those responses reveal a real need on the part of teachers to be trained in
how to teach spelling to their students.
6.Definition of terms
The following terms will have the associated meaning whenever they appear in the study
Knowledge: The remembering or recalling of appropriate previously learned information.
118
Application: The use of previously learned information in new and concrete situations to solve
problems that have single or best answers.
Smart Board is a series of interactive whiteboards developed by SMART Technologies. The Smart
Board is a large interactive whiteboard that uses touch detection for user input – e.g. scrolling, right
mouse-click – in the same way normal PC input devices, such as a mouse or keyboard detect input. A
projector is used to display a computer’s video output on the whiteboard, which then acts as a large
touch-screen. The Smart Board typically comes with 4 digital pens, which use digital ink and replace
traditional whiteboard markers. The Smart Board digital ink operates by using an active digitizer that
controls the PC input for writing capabilities such as drawing or handwriting.
Spelling is the writing of a word or words with the necessary letters and diacritics present in an
accepted standard order. It is one of the elements of orthography and a prescriptive element of
alphabetic languages.
Experiential Knowledge: The professionals' ongoing experience or knowledge in action by practice
of the profession.
Need analysis: A systematic procedure that is followed to determine the teacher's needs.
Novice Teachers: Those teachers with less than two years experience.
Received knowledge: The necessary intellectual and conceptual content of the profession.
Teacher's needs: The areas of competencies where EFL teachers need training and development.
7.The Structure of the training program
This training program will be carried out in three Saturdays. The content of this program is shown in
table 1. There will be one week between the second Saturday and the other to enable the trainees
to carry out the assignment.
The researcher will assess the teachers by discussing their self-Observation and team-teaching
reports and provide feedback.
119
Table1
The content of the training program
Date Procedure Time
The importance
developmentofof
spelling
spelling
skill
strategies. 8:30
Corrective spelling
Break
Maintenance spelling
Strategies.
strategies. 10:30
Day one
10:30-11:00
Assignment. 11:00-13:00
Day Two Direct Student

Spelling skill Objectives.
assessment. 8:30
Break 10:30-11:00
Games for spelling.

Assignment
Sandwich spelling Training program (6 minutes a day) 11:00-13:00
Day three Teachers'

Teacher's team-
report.teaching Reports. 8:30
Video Strips
Micro teaching.
Break
Evaluation. 10:30-11:00
11:00-13:00
8.Patterns of Assessment
A: Formative:
Videotape one of your lessons. Analyze your spelling teaching through:
Write down every skill you use.

Classify the skills you use according to spelling strategies (Appendix 2).
Practice an exam following spelling skill objective.
Evaluate the students' achievements according to spelling curriculum chart.
Use correct strategies and maintenance strategies (Appendix 3).
Ask some of your colleagues to implement team- teaching and report back on the teaching
(Appendix 4).
B: Summative Evaluation: Final Exam.
9.Proposed Approach and Methodology
The method of training in the three sessions is as following:
The trainees are encouraged to bring their own methods and ideas for discussion.
The trainees will use examples from Iraqi classrooms whenever possible
The trainer will use examples from Iraqi schools textbooks.
120
The trainer will encourage cooperative work.
The trainer will avoid ready-made answers
The trainer will ensure open dialogue and mutual respect.
The trainer will encourage voice and critical, constructive responses and comments.
The trainer will provide the trainees with immediate feedback on their proposed ideas and activities.
The trainees will be asked to do follow-up activities for reinforcement, consolidation an assessment
purposes.
The trainees will be given handouts for enrichment (distance learning).
Evaluation
Attendance
Participation
Self-monitoring
Group evaluation
Assignment
A final exam
Day One
Activity one
Enabling Objectives:
To break the ice with the trainees.

To explore their attitudes towards the training program.
Materials
Black-board.
Sheet of paper.
Time: 20 minutes
Instructions
The trainer will welcome the trainees.

The trainer will read the trainees' names from a list.
The trainer will introduce the trainees to each other.
The trainer will brainstorm the trainees about their expectations of the training program.
The trainer will give the trainees the objectives and send it from his smart board to the trainees'
portable smart board via classroom network.
The trainer will allow five minutes for the trainees to read the objectives then discusses them with
the trainees.
Activity Two
To raise the trainees' awareness of the importance of spelling skill.

To familiarize the trainees with the spelling strategies Materials:
Portable Smart boards.
Master smart board.
Slides about the components of spelling skill, and development spelling strategies.
Time: 80 minutes
Instructions:
The trainer will ask the trainees to work in groups of four to answer the following questions:
121
What do we mean by spelling strategies? Is it important that we learn to spell words in order to
express our feelings and to keep in communication? Is there a unique perfect strategy that we can
fellow to be a good speller? Is it enough to master spelling strategy and be a good speller?
Each group of trainees will write the answers on their portable smart board. They will gather the
answers and write a model answer on the spokesperson portable smart board. The spokesperson
will transfer the answers via class network to the master smart board to be displayed in front of the
trainees. The spokesperson of each group will read the model answers to all of the trainees.
The trainer will solicit the opinion from the trainees on what they will write.
The trainer will distribute a handout (slides), ask the trainees to read it, and discuss it in groups then
the trainees will compare them to what they write earlier on their portable smart board.
The trainer will recapitulate the essential points.
The trainer will distribute the evaluation slide (Appendix 5).
Activity Three
Enabling Objectives
To familiarize the trainees with the importance of corrective spelling strategies.

To train the trainees how to maintain spelling strategies.
Materials:
The master smart board, portable smart-board, slides (handout)
Time: 90 minutes
Instructions
The trainer will distribute slides (handout) on corrective and maintenance spelling strategies, and ask
the trainees to read them in 10 minutes and discuss them in groups.
The Trainer will explain each strategy separately and give example from the real life.
The trainer will ask each group to form a case study and use one or more of the corrective spelling
strategies to suggest a remedy strategy as a treatment of the case.
The trainees will choose a study case from their experience, and suggest one or more spelling
strategies to deal with them.
The spokesperson will read the case and the suggested remedy strategy in front of the groups.
All the trainees will save on their portable Smart board what they will receive (via class network)
from other groups.
The trainees in the session will comment on it.
The trainer will discuss the study cases in general, and give feedback.
The trainees will reflect on their suggestions and modify them.
Again, the spokesperson will distribute via class network the new suggestions and the trainees of
other groups will save them in their portable smart board and discuss them briefly.
The trainer will ask the trainees to do an assignment to train themselves in recognizing spelling
mistakes.
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Day Two
Activity one
To help the trainees to construct spelling test items.

To enable the trainees identify the components of spelling skill objectives.
Materials
Main Smart Board.

Portable smart board.
Slides (Handout).
Sample item for tests of spelling.
Time: 120 minutes.
Procedures:
The trainer will distribute via class network slides (handout) on constructing spelling test items and
spelling curriculum charts and ask the trainees to read it in 20 minutes and discuss them in groups.
The Trainer will explain each item in details and give concrete examples on each one.
The trainer will ask each trainee to suggest a lesson from his experience and work in group to
demonstrate spelling test.
The trainer will give feedback.
The trainees will reflect their suggestions and then according to the trainer's feedback they will
modify them.
The spokespersons will display their suggestion and the trainees in the session will comment on
them.
Activity Two
To train the trainees use games' activities in teaching spelling.

Materials:
Portable smart board

Slides (Handouts)
Flash cards
Paper (size A4)
Three dimension letters
Color pens
List of words.
Pictures of objects
123
Instructions:
The trainer will distribute slides (handout) concerning twenty games for teaching spelling and ask
the trainees to scan the games in 10 minutes and discuss them in groups.
The trainer will ask each group to take five games and try to demonstrate them by giving instructions
to other groups to help them to implement the activity.
The trainees will reflect on their actions and modify them.
After finishing the games activities, the trainer will distribute a slide (handout) via class network on
designing spelling learning program (Appendix 6) named 'six minutes a day to perfect spelling'.
The trainer will ask the trainees to read the program in 20 minutes.
The trainer will ask the trainees to work in groups and design spelling learning program for on
month.
The trainees will design a spelling learning program and the spokespersons display their designs on
the master smart board.
The trainees will reflect on their designs and modify them.
The trainer will ask each trainee to carry out the following steps as an assignment for day three of
the training program:
Visit a colleague in their class and form a team teaching to teach spelling using spelling strategies.
Audiotape or videotape one of the lessons, and reflect on it (write or report only about spelling)
Videotape one of your lessons and reflect on it (Write a report only about your spelling strategies).
The trainer gives the "Evaluation slide" (Appendix 5).
Day Three
Activity one
To help the trainees focus on spelling activities.
Materials:
The master smart board and portable smart board.
Time: 15 Minutes
Instruction:
The trainer will review the main points in day one and two training sessions, reciprocate ideas with
trainees and receive feedback.
Activity Two
Encourage trainees to adept self-monitoring to manage their change.
Materials:
The trainees' assignment (reports about their videotaped lessons)
124
Instructions:
The trainees will send via class network to the trainer's smart board their reflection upon their own
lessons which they will videotape.
The trainer will ask each group to choose on of their report and read it. The trainees will discuss
those reports. The trainer will comments on them, and give feedback and highlights the importance
of teachers self-monitoring.
Activity Three
Enabling Objective:
The trainees will be able to use team-teaching as a means of professional development.
Materials:
Trainees' observation, a handout (Appendix 7)
Time: 30 minutes
Instructions:
The trainees will send to the trainer via class network to his portable smart board their observation
carried out.
The trainer will ask the trainees to read again the handout about team-teaching (Appendix 7) in 5
minutes.
The trainer will discuss one of the observations of each group in public.
The trainer will ask the trainees about their findings, impressions and what they really feel about
team-teaching
Activity Four
Enabling Objective:
The trainees will be able to extract detailed information from a video strip.
Materials: Video camera, master smart board, and portable smart board.
Time: 45 minutes:
Instructions:
The trainer will tell the trainees that he is going to choose one lesson videotaped on teaching
spelling. The trainees are asked to fill in the checklist in (Appendix 4)
The trainer will discuss the trainees' feedback and comments on the video strips.
The trainer will distribute the evaluation slide (sheet) (Appendix 5)
125
Activity Five
Enabling Objective:
To enable the trainees to adopt micro-teaching as a means of professional development.

Materials: School textbooks, slides (handout) and portable smart board.
Time: 45 minutes
Instructions:
The trainer will distribute the handout asks one of the trainees to read it aloud and the trainer will
explain each sentence to the trainees.
The trainer will discuss the handout with the trainees.
The trainer will ask the trainees to sit in groups.
The trainer will ask the trainees to select one activity in the one of the textbooks they have and
prepare it well for 10 minutes.
The trainer will ask one from each group to do the microteaching
The trainees will reflect on their teaching and modify it.
The representative of each group will re-teach his subject.
The trainer will solicit the trainees' opinions about the trainees' performance as teachers while
microteaching.
The trainer will summarize the trainees' activities then distribute the Evaluation sheet (Appendix 6)
Break for 10 minutes
Closing Activity
Time : 50 minutes
The final exam
The trainer will administer the final exam.
References:
Dwight. W. and Weiping, W (2008). The Microteaching. Retrieved at 4th, March, 2015. Available at:
http://www.answers.com/topic/microteaching
Graves, Kathleen (1996). Teachers as Course Developers. Cambridge University press.
Gradun, S and Miller, L. (1979). Spelling Research and Practice. Love publishing company.
Joyce. S. Choate; Bennett, Toniz; Engright, Brian; Miller, Lamoine; Poteet, James; and Rakes, Thomas
(1996). Assessing and Programming Basic Curriculum Skills. Ally and Bacon. INC company.
Karin Goetz (2000). Perspectives on Team Teaching. A Peer Reviewed Journal 1, (4),
Retrieved on 22ndApril, 2015, available at: http://people.ucalgary.ca
Miller, J. Lamoine (1996). Spelling and Handwriting. Oxford University press.
126
Appendix (A)
A framework of course development processes
Framework components
Needs assessment: what are my students' needs? How can I assess them so that I can address
them?
Determining goals and objectives: what are the purposes and intended outcomes of the course?
What will my students need to do or learn to achieve these goals?
Conceptualizing content: What will be the backbone of what I teach? What will I include in my
syllabus?
Selecting and developing materials and activities: How and with what will I teach the course? What
is my role? What are my students' roles?
Organization of content and activities: How will I organize the content and activities? What systems
will I develop?
Evaluation: How will I assess what students have learned? How will I assess the effectiveness of the
course?
Consideration of resources and constraints: what are the givens of my situation?
Appendix (B)
It is important that students learn to spell words correctly for the following reasons:
Spelling is a social matter. There is a tendency by the public to use the spellings a person writes as a
measure as his or her literacy or social status; good spellers are associated with the well educated
upper class, poor spellers with the poorly educated lower class.
Poor spellers may avoid using words they know in their written work, thereby limiting their
expression of thoughts and ideas.
Poor spelling wastes valuable time of both teacher and pupils.
Students who know how to spell a word are able to locate it more quickly in the dictionary.
Poor spelling complicates the student's efforts in written communication. (Miller, J. Lamoine 1996)
Appendix (1)
NEED ANALYSIS
Before designing the developing program, the researcher asked in-service teachers to answer three
questions related to their daily teaching and compulsory training.
Dear colleagues:
127
The following questions aims at exploring to what extent you need training and
development program. I hope that you answer all the questions according to your needs honesty
and seriously.
Thank you for your cooperation
Teacher's need analysis:
What are the top three problems in your daily teaching?

If you were on a short-term teacher training course, what do you want to learn?
In what ways do you prefer to learn, and in what ways you do not?
The results of the teacher's need analysis:
The researcher uses mean standard deviation
Results of Question One:
1- How to teach spelling skills (3)
2- How to improve learners reading skills (1)
3- How to teach listening (1)
Result of Question Two:
1- I want to learn from successful and experienced teachers (3)
2- Classroom observation skills. (3)
Result of Question Three:
How I want to learn:
Classroom observation followed by reflections and discussions (3)

Application of theories into practice (2)
Fulltime training course. (2)
Appendix (2)
Developmental Strategies
The instructional strategies presented in the following section are those considered to be the best of
professional and research-supported techniques. These developmental strategies are presented for
teacher use and may be adapted and modified as needed. They are general strategies that are be
included in every spelling and handwriting program when first introducing a student to a task or
concept.
128
Spelling Strategies
1-Test-study-test procedure. Research conducted by petty (1964) supports the test-study-test

approach to spelling instruction. This procedure recommends beginning a unit of instruction with a
test that identifies for each student those words he or she does not know how to spell.
2-Self-correcting test procedure. This technique reportedly is responsible for 90-to-95 percent of
children's spelling achievement (Graves, 1977). Studies by Fitzsimmons and Loomer (1977) indicate
this procedure is the single most worthwhile learning activity devised to date and is appropriate for
all age and abilities. Students take a spelling test with no previous exposure to the word list. The
student then corrects his or her own test as the teacher spells each word orally or writes it on the
board.
Word study techniques. An organized method for studying each word misspelled is paramount to
good learning. Research conducted by E. Horn (1960) Fitzgerald (1953) and T. Horn 1969) confirms
that there should be a systematic approach where by students learn to study each too often
students are asked to study misspelled words without being given a systematic word-study
technique, or they are required to write their spelling words some magical number of times. A
systematic approach involves pronunciation, visual imagery, oral and written reinforcement, and
systematic recall of words. Students should be given the opportunity to use their spelling words in all
written work to enhance and maintain spelling ability.
Fitzgerald (1951) suggested the following method:
Look at the word carefully.

Say the word.
With eyes closed, visualize the word.
Cover the word and then write it.
Check the spelling.
If the word is misspelled, repeat steps on through five
While Horn (1961) Method:
Look at the word and say it to yourself

Close your eyes and visualize the word.
Check to see if you were right. If not, begin at step one.
Cover the word and write it.
Check to see if you were right. If not, begin at step one.
Repeat steps four and five two more times.
Horn 2nd method (E. Horn, 1954)
Pronounce each word carefully.

Look carefully at each part of the word as you pronounce it.
Say the letters in sequence.
Attempt to recall how the word looks, then spell the word.
Check this attempt to recall.
Write the word.
Check this spelling attempt.
Repeat the above steps if necessary.
Visual-Vocal Method (Westerman, 1971)
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Say the word.
Spell the word orally.
Say the word again
Spell word from memory four times correctly.
Gilstrap Method
Look at the word and say it softly. If it has more than one part, ay it again part by part, looking at
each part as you say it
Look at the letters and say each one. If the word has more than one part, say the letters part by part.
Write the word without looking at the book.
Presenting words in column or list form. Spelling should be taught as spelling and words to be
learned should be presented in list or column form. Fitzsimmons and Loomer (1978) contend that
teachers appear to be confusing some goals of spelling with reading goals in that they insist on
teaching the meaning of each spelling word. They urge teachers to recognize that the meanings of
most spelling words in the typical spelling program have already been learned through the student's
reading and composition program.
Spelling the whole word. When the student misspells a word, his or her attention should be
directed at forming a correct visual image of the whole word. Dividing words into parts or syllables
has not proven to be a superior technique for assisting students to learning to spell. The student
should concentrate on each whole word as a specific learning problem. Some spelling series attempt
to improve spelling ability by calling attention to "hard spots" within a word. Research has shown
this practice to be of little value (RoseMeier, 1965; Mendenhall, 1930). It is important for teachers to
realize that students learn words as whole units and not as individual parts.
Individualize the spelling program. You can effectively individualize the spelling program by utilizing
a pretest without making major modifications in the program format currently in use in the
classroom. Moreover, by presenting the pretest (trial test) on Monday rather than on Wednesday as
recommended by numerous spelling programs, you focus the student's attention on those words he
or she misspelled. This minor change will provide the student additional days to master unknown
words. Students should also keep a log of words they had difficulty mastering. This procedure will
further focus their attention on individual spelling words.
4-Spelling conscience. Although many spelling programs omit this component, research indicates
the desire and concern to spell correctly are crucial to spelling improvement (Barbe et al., 1982;
Graham & Miller, 1979; Hillerich, 1977). Techniques and procedures that enhance student interest
spelling program. Program. These may include: (1) informing students that spelling is a courtesy to
the reader and that correct spelling should exist in any important writing, (2) confining the spelling
vocabulary to the student's immediate and future writing needs, (3) focusing student attention only
on those words he or she is unable to spell, and (4) encouraging self-satisfaction with correctly
spelled papers. More important than any of these techniques or procedures is the classroom
teacher. If the teacher considers correct spelling important then it is likely that the students in his or
her class will become good spellers.
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Appendix (3)
Corrective Strategies
Corrective strategies will be required for those students whose spelling performance is
consistently below expectations. These strategies are more highly structured and systematic than
the developmental strategies and require more direct and one-to-one instruction.
Spelling Strategies
Word-study techniques. As was mentioned previously, students who experience difficulty in

learning to spell usually have not developed a systematic procedure for learning new words. The
following word study techniques are more structured and intensive and may be used as correctives
strategies.
Method for Visual Learners (Radabaugh and Yukish, 1982)

Student is shown the word on a card or list and given the name.
Student looks at the word, says it, spells it, and says it again.
The word is removed, and the student spells it from memory.
After spelling it two or three times more, student writes it from memory and checks the word
against the stimulus card.
Method for Auditory Learners (Radabaugh and Yukish, 1982)
Teacher says the word, spells it, and then says it again.
Child says the word, spells it.
Teacher repeats.
Child repeats several times if necessary before writing
Child then writes the word from memory.
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Appendix (4)
Analysis of Spelling Skills
Analysis Scale
Teacher : 1- Often
Observer : 2- Always
Class : 3- Seldom
Date : 4- Never
No: Behaviors Effectiveness
Spelling Strategies: 1 2 3 4
1- Test-study-test procedures. 1 2 3 4
2- Self-Correcting test procedure. 1 2 3 4
3- Word study techniques. 1 2 3 4
4- Fitzgerald method. 1 2 3 4
5- Horn Method 1. 1 2 3 4
6- Horn Method 2. 1 2 3 4
7- Visual-Vocal Method. 1 2 3 4
8- Gils trap method. 1 2 3 4
9- Presenting word in column or list form. 1 2 3 4
10- Spelling the whole word. 1 2 3 4
11- Spelling conscience. 1 2 3 4
Corrective Strategies:
12- Method for visual learners. 1 2 3 4
13- Method for Auditory learners. 1 2 3 4
14- Fernald method Modified. 1 2 3 4
15- Cover and write method. 1 2 3 4
16- Fitzsimons and loomer method. 1 2 3 4
17- Readiness skill. 1 2 3 4
18- Basic words skill. 1 2 3 4
19- Auditory recognition of phonemes skill. 1 2 3 4
20- Graphemes skill. 1 2 3 4
21- Structural analysis skill. 1 2 3 4
Maintenance Strategies:
22- Find a word skill. 1 2 3 4
23- Spelling Tic-Tac-Toe. Activity. 1 2 3 4
24- Who can spell it activity. 1 2 3 4
25- Card Match activity. 1 2 3 4
26- Partner's activity. 1 2 3 4
27- Extra Practice activity. 1 2 3 4
28- Word wheels activity. 1 2 3 4
29- Cross words strategy. 1 2 3 4
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Appendix (5)
EVALUATION AND FEEDBACK
Dear trainee:
I'd be most grateful if you would complete this evaluation feedback form.
The following statements are scale based where 0 = disaster, and 5 = excellent
5 0
The lesson was organized disorganized
Objectives were clear Mysterious
Use of aids was useful Waste of time
The pace was about right Too slow/Fast
The session was lively Boring
Classroom management was good Messy
Group work was useful Waste of time
Instructions were clear Confusing
The lesion was demanding Undemanding
The lesion was useful Useless
My overall impression was favourable Unfavourable
Please write any comments you want to make about the lesion here:
Thank you very much
The trainer
133
Appendix (6)
Spelling learning program
'Six Minutes a Day to Perfect Spelling'
Dear colleagues,
Read carefully the following five simple steps to be perfect speller. Then read the program in
detail and try to design a one month spelling program for your students.
All you will have to learn to be a good speller is to learn the five simple steps:
1) See the word. 2) Think the word. 3) Feel the word.
4) Say the word. 5) Build the word.
Appendix (7)
Team Teaching
Teaming To Teach: Operational Definitions
Team teaching can be defined as a group of two or more teachers working together to plan, conduct
and evaluate the learning activities for the same group of learners. Quinn and Kanter (1984) define
team teaching as "simply team work between two qualified instructors who, together, make
presentations to an audience." There appear to be two broad categories of team teaching:
Category A: Two or more instructors are teaching the same students at the same time within the
same classroom;
Category B: The instructors work together but do not necessarily teach the same groups of students
nor necessarily teach at the same time.
134
Marketing Knowledge Creation Model of SMEs in Agricultural Processing
Industry in Phetchabun, Thailand
Nattachet Pooncharoen
Naresuan University
npooncharoen@gmail.com
Abstract
By using Nonaka & Takeushi’s SECI model (Socialization, Externalization, Combination and
Internalization), we are able to understand the role of both workers (tacit knowledge) and
explicit knowledge in the creation of new knowledge. At present firms are facing problems of
how to adjust knowledge management practices to the level that could increase effectiveness
of knowledge management and improve productivity. SMEs in agricultural processing
industry in Phetchabun province, Thailand confront many problems including lack of
production techniques, skill labour, systematic management, capital access and marketing
knowledge. Using both quantitative and qualitative research method, this research have two
main objectives: (1) To study knowledge management practices of SMEs in agricultural
processing industry in Phetchabun Province, Thailand and (2) To search for marketing
knowledge creation model of SMEs in agricultural processing industry in Phetchabun,
Thailand. Results from this research indicate that (1) firms that practice relatively complete
knowledge creation process likely gain higher business benefit than other firms, (2)
considering the size of firms in SMEs, leaderships is a very important factor, especially for
synthesizing complex external knowledge, (3) to sustain the competitiveness, marketing
knowledge creation practices (such as identifying consumer preferences) should link directly
to firms’ income, and (4) quality of knowledge (one that lead to solutions) are an important
factor that determine the effectiveness of knowledge creation proces.
Keywords: Knowledge Creation Model, Marketing, SMEs

Main Conference Topic: Marketing Strategy, Social Science and Business, Organizational
Behavior
Introduction
Among the important factors required for the small and medium enterprises (SMEs) to
conduct their business, knowledge is the factor that makes the difference (Chan, 2008). The
evidences are obvious now. But how to manage this factor is another matter. Knowledge
management theories and applications have been continuously developed for decades. To
successfully implement what we know in order to achieve business objectives, we first have
to understand that knowledge composes of what we learned from formal education and
knowledge from the organization, for example, production techniques for particular type of
product, relationship with customers (customers’ taste, demand of the new market) and how
to recruit talent employees such as finding employee that offer good services naturally (Chan,
2008). To understand how these knowledge involves in the operation of the company is very
difficult. Main reasons are the complexity of what we interact with one another and interact
with knowledge management tools such as communication devices and database
SMEs have the characteristics that are different from large organization. As Lee & Lan
(2013) pointed out, limited resources and budget are not only factor that cause SMEs improve
their knoweldge management (KM) potential but also the ambiguity and flexible nature of
KM itself. After all the experience we gain so far, we found that there are a form of
management that can be set up to utilize knowledge we have efficiently. Nonaka & Takeuchi
(1995) show the important of dynamic interaction of tacit knowledge and explicit knowledge,
135
and also the important of tacit knowledge and possible creation of knowledge inside an
organization. Their knowledge creation model ignited many knowledge management
researches. However, we still need much more information on this mysterious mechanism.
This research is also an attempt to obtain a marketing knowledge creation model of the SMEs
in the context of agricultural processing industry in Phetchabun, a province in the norh of
Thailand.
Objective
There are two objectives for this research:
(1) To study knowledge management practices of SMEs in agricultural processing industry
in Phetchabun Province, Thailand and
(2) To search for marketing knowledge creation model of SMEs in agricultural processing
industry in Phetchabun, Thailand.
Literature Review
In the knowledge management processes, knowledge creation may be considered the most
important process. The reason is simple. In the world of global and local business, knowledge
especially the new one, is important asset. Since the beginning of widespread use of internet
with smart search engine, new knowledge is hard to find, and more importantly how to get it
and to use it right. Therefore, to create the organization own knowledge probably is the best
thing most firms want, beyond basic requirements (right people, right KM processes and right
technologies). To reach that point, visionary leadership and right use of capital on research
and development is essentially needed.
Knowledge Creation Model: SECI Model and more
New knowledge can be defined as the knowledge that is capable to be applied for specific
tasks. It should be new methods. Other than the inspiration and relaxation environment, one
of the most celebrated theory is SECI model (Socialization, Externalization, Combination,
Internalization). The theory was discovered and popularized by the work of Nonaka and
Takeuchi (1995). Main idea of this model is that knowledge creation process is knowledge
management activities that recognize the important of tacit knowledge. It further showed
interaction between tacit and explicit knowledge could create knowledge that later become an
organizational knowledge. Nonaka himself worked with different experts in the field to turn
information procession paradigm to knowledge procession paradigm. In on of his works
(Nonaka, 1994: p.14), he emphasize that “while knowledge is developed by individuals,
organizations play a critical role in articulating and amplifying that knowledge.” So, group of
individuals could play significant role in the creation of knowledge for an organization.
There are many new proposed ideas concerning knowledge creation. 7C Model by
Harri Oinas-Kukkonen indicated also that knowledge creation is influenced by connection,
concurrency, comprehension, communication, conceptualization, collaboration and collective
intelligence. This model gave an insight that organization provides collaboration environment
where people can work together, in that situation, allowing the possibility of getting
collective intelligence. Since the information could contain what firms should do something
under circumstance, the use of technology (such as hypertext functionality of the web) could
expand interactions from inside a firm to the outside, an opportunity to get massive amount of
knowledge sources.
Marketing, SMEs and Knowledge Management
We know that type of industry and knowledge would dictate the knowledge management
process, especially in the case of SMEs. Some tried to find unified knowledge management
model (Lee and Land, 2013), and separate knowledge into 4 types of experiential knowledge,
namely network knowledge, cultural knowledge, entrepreneurial knowledge and market
136
knowledge. About the market, type of knowledge may come in the form, for example, of
knowledge on internationalization such as on the foreign market (market size, competitors
and regulations). Like other tasks, steps of of working conducts range from pre
inter(nationalization) to inter-start, novice inter, experienced inter, and end with
internationalization test. Like larger organization, SMEs also face the same problems of
adopting knowledge management within SMEs context. The use of simple KMS (knowledge
management system) such as document management system, information management
system, searching and indexing system, expert system, communication and collaboration
system and even intellectual assets system is not enough. To gain competitive advantage and
sustainable growth and perpetual operations, tacit knowledge in the form of personal skills
and practical knowledge is really important because it is difficult to be imitated, and its
impacts are profound.
From different point of view, Sviar and Zavodska (2011) concluded from their work that
knowledge on marketing usually involve setting marketing strategy (product, communication
and business plan), setting specific goals for the firm, answering what kind of information is
available and what information is needed, selecting scientific methods to acquire those
information, and creating feedback from the marketing operations.
However, from experience of many organizations, large or small, we are getting frustrated
with the results we actually gain considering the cost we spent on the knowledge
management projects. The reasons are from the fact that knowledge management both
concept and practical procedures are so complex and dynamic that to understand it can only
be done on the general part of its process, not on the specific management techniques and
tools. So gathering knowledge from all possible sources alone is not enough, articulation of
the knowledge is needed. Motivation are also important especially on the openness and the
final benefit of sharing. Finally, feedback processes are also crucial because adjustments
regularly have to be done from the operational level to vision of the organization.
Research Model
Research on knowledge management in Thailand probably like other countries concentrated
on the prove of the existent of knowledge management processes, on the factors that affect
successful knowledge management projects, on the building of knowledge sharing and
transfer model, on the supportive environment for knowledge management processes, and on
finding transferring and sharing methods in organizations and communities. The emphasis
lined on the knowledge management processes, appropriate environments and the search for
methods and techniques to share the knowledge that could solve firms’ problems.
From those previous studies, knowledge management can be decomposed into different
interrelated processes. Those can be separated into 3 groups: input process, processing
process and output process. The input processes include knowledge identification and
knowledge acquisition. The processing process composes of knowledge sharing and
knowledge transfer. The last group output process consists of knowledge utilization,
knowledge creation and knowledge evaluation. Each process has different functions and
related activities.
Group 1: Input process composes of knowledge identification (to identify the important
knowledge or knowledge needed for organization) and knowledge acquisition (to find
sources of the knowledge and seeks ways to obtain those knowledge)
Group 2: Processing process composes of knowledge transfer (to share knowledge from
expert to person or group with less knowledge) and knowledge sharing (to exchange
knowledge among individuals or groups through many type of knowledge management
tools).
137
Group 3: Output process composes of knowledge utilization (the use of selected and
appropriate knowledge in the working process of an organization), knowledge creation (the
process of creating new knowledge from learning during the work) and knowledge evaluation
(the evaluation of every knowledge management processes to increase its effectiveness).
These 3 groups of knowledge management processes at its foundation can be categorized into
3 conversing processes between tacit and explicit knowledge as revealed by SECI model
mentioned earlier. Each component of the model involves activities of staffs of an
organization. All the detailed is presented in the figure 1 before.
Marketing Knowledge Creation Model
Seminar
Marketing
Customer
Price,
Management
Product
Customer
Place,
Target Relationship
Mix:
Demand
Promotion
Value
Product,
and
Customers Knowledge
Customer
Market
Relationship
Knowledge
Knowledge
Customer
Product Socialization:
sharing
Externalization:
Internalisation:learning,
Combination:
organization
knowledge
creating
Informal
meeting
Formal
meeting
expressing
and concepts
ideas Metaphor
Database
Knowledge
Tracking
working
processes
Knowledge Creation
Marketing Process Core Knowledge Process
Figure 1 Marketing Knowledge Creation Model
Figure 1 show the links marketing process with knowledge creation process and its
knowledge management tools and methods. Starting with the marketing process on the far
left side of the diagram, the model indicates demonstrate that firms should, first of all, know
the demand of their products to be confident that firm could survive in the market. Before
placing the products in the market, however, they should be certain whom they will sell the
products (target customers) because products will be built accordingly. The other two
important processes are the marketing mix (Product, Price, Place, Promotion: 4P) and
customer relationship and customer value. This main strategy and its integration with
customers is the important procedures in today competitive environment.
138
All above marketing strategy and procedures need backing knowledge. So the figure nest to
marketing practice are core knowledge on products, customers, market and customer
relationship and value. To obtain this large amount of knowledge and maintain it within an
organization is a very difficult task. As pointed out by Nonaka & Takeushi (1995) the
creation of knowledge is needed. In their view, knowledge creation bases on the separation of
knowledge into tacit and explicit knowledge and the conversion between the two. These
dynamic process can be decomposed into 4 main activities: Socialization (conversion
between tacit knowledge or simply knowledge sharing activities), Externalization (conversion
from tacit to explicit knowledge or the expression of concepts, ideas into understandable or
absorbable form), Combination (conversion between explicit knowledge or some form of
organized concepts and ideas) and Internalization (conversion from explicit knowledge to
tacit knowledge or the process of absorbing tangible and intangible knowledge into tacit
knowledge, the learning process so to speak).
Beside main marketing processes above, firm also should setup vision (what, where and
when on what to do in the future), mission (what products; who-is customers; how-business
processes; why-benefit to society, social value, green company and global scale), goals (main
goals that are SMART (specific, measurable, achievable, realistic and time).
On marketing mix, product should have details on the product line, change portfolio, change
of quality and new products for new customers. Prices should have plans on changing price,
credit time, discount (bonus), bulk (lot sale). Place is about where to sell and where not to
sale, product organization (on shelves). Promotion is about direct sale, reward and
commission, campaign, direct mail, advertising, events, time and place, different kinds of
discounts and lottery. Packing relates to packaging for different customers, form or type and
size of package. Lastly, penetrating (distribution) involves outsourcing distribution,
distributors in different area and how to systemize communication with distributors. Other
related specific strategies are market penetration, product development, market development
and product differentiation.
On the far right hand side of figure 2, knowledge management tools are list as example of
variety of possible technique to manage each group of KM activities. For socialization or
sharing different type of face-to-face meeting can be arranged in a way that fit organizational
environment. This can be conducted with or without the help of communication and digital
devices. In the case of externalization, we offer “metaphor” as an example of expressing idea
into a simple form but other tools such as visualization technique (such as mind maps and
concept maps) could also at the same level of effectiveness. Next, the combination means the
activities that all knowledge should be organized in transferable forms. The simplest example
are the database and knowledge base. Last group of activities are internalization; the activities
that turn explicit knowledge. into skills of workers. Tools of these activities should offer
work tracking system that help staffs learn from the use of knowledge in their working
processes.
Research Methods
Quantitative part of data collection (using questionnairs) were done just to understand the
dynamic part of the knowledge creation process, The emphasis of the data are on the
knowledge creation environment or energy and measureable knowledge creation activities
(such as knowledge acquisition, knowledge adaptation and knowledge creation procedures)
and knowledge management tools and techniques. Main objective here is to confirm our
research model and attain practical recommendations concerning the use of knowledge
management tools.
139
Population of this analysis are firms in agricultural processing industry in Phetchabun
province located in the lower northern area of Thailand. Number of are around 425
plants.Questinnaires will be distributed through mails or in person to all firms.
On the qualitative part of the research, we conduct the interviews of SMEs in agricultural
processing industries of Phetchabun province. Because of the difficulties we found while we
collected the data, we decided to use snowball technique to get higher cooperation from the
firms. This should help us obtain clearer information from the firms within the same group.
However, the weak point is that our samples may not represent the whole industry. We will
interview 10 firms (or until information is saturated) in the major agricultural products of the
area including corn, rice, sugar-cane casava, green bean, tobacco, fruits (tamarind, mango and
lichi).
Main questions we asked in the questionnaire are: How firms conduct their marketing
practice?; How firms develop new products?; How do they share idea and information?;
What kind of data and knowledge collection they own?; How often you use new type of
operation or working methods? And How did you record meeting, ideas and problems and
solutions of production?
Results
Phetchabun province is located in the north of Thailand. The area is around 3.1 million acre,
346 kilometer away from Bangkok, the capital of Thailand. About 40 percent of the area are
mountains where the average temperature is between 68 and 75 Fahrenheit. The population
are about 996,231. Main agricultural products are corn, rice. sugar cane, casava, green bean
and local fruits. These contributes to the growing number of agricultural industries in the
area, consisting of, rice mills, grain conditioning silo, processed food such as tamarind
(signature product of this province), pickled ginger, canned vegetables and fruits, milk
products, pickled garlic, processed soybean and processed food made of rice. Most of the
firms are small and medium size. Since tourism in this province is growing, businesses
related to organic and safty products are considered to be trending goods for some tourists.
From the secondary data and the interviews, we discovered that firms generally paid their
attention to their products and customers. Exchange of knowledge normally done informally
after work. Since most of the firms in this industry use labor intensively, the role of explicit
knowledge is less than what was used in the larger and well established firms, meaning the
lesser influence of organized explicit knowledge (such as database and knowledge base).
Some have explicit knowledge ready to be used but surprisingly was not adjusted to use in
the decision making processes. However, we recognize the higher role of mobile digital
devices using online applications (such as Facebook and Line), inexpensive technology that
start to change the ways they interact with each other and may finally change their knowledge
management processes. On this particular issue, larger firms get the benefit of having
opportunity to collect data of operations (such as production process) to learn from problems
right from the start. Small firms, on the contrary, operate in the ways that are more flexible
than larger firms; its data are too complex to record during the operation. This decrease the
chance to get valuable information and to reduce thier learning as well. It is the responsibility
of visionary owner to fill this knowledge gap.
In agricultural processing industry, core knowledge of the firms generally come from
traditional wisdom and family wisdom, experiences (learning from past business operations),
and the government supports. Firms with innovative ideas regularly seek opportunity to
access outside knowledge through internet, conferences, seminars and exhibitions more than
regular firms. Owners or managers are typically eager to learn (new operation procedure and
design, for example) and concetrate on the details of their products and customers.
140
On the knowledge creation practices of firms in the research area, data from the interview
indicate that they were aware of the important of marketing for their business. But their
knowledge of the market and customers were not enought to attract new customers. Most of
the marketing works were done by the owners themselves. However some owners or
managers who have been in business longer could hire a person or two to be responsible for
marketing works. Among four groups of core marking knowledge, firms paid most attentions
to product development to serve customers (such as develop different form of packaging in
the case of processed tamarind, different taste of tamarind, different type of soaps made from
herb) and the quality of the product.
Considering the SECI model, most activities were in the socialization process. Knowledge is
normály shared among owners and their family, except for larger firms that have opportunity
to hire marketing staff. It is hardly found that firms create their own database to collect
marketing data (combination proces of the SECI model). They alternately tend to rely on
experience of the owners who have been in business long enough. To express the idea,
owners of the firm most of the time explain in person. Explaining in ducument form is
minimal (the activities of Externalization process). Learning was normally done through
experience from problems, from their partners and business networks and from the supports
of governement agencies. However, for the success firms, the owners with formal training
from an institution seem to learn faster than the owners who depend on the business
experience alone. Firms with at the higher level of skills and knowledge in the area can set up
facilities for their own experimentation (such as experimenting with different type of herb for
soap, lotion and perfume).
Therefore in general we may conclude at this point that (1) firms that practice relatively
complete knowledge creation process likely gain higher business benefit than other firms, (2)
considering the size of firms in SMEs, leaderships is a very important factor, especially for
synthesizing complex external knowledge, (3) to sustain the competitiveness, marketing
knowledge creation practices (such as identifying consumer preferences) should link directly
to firms’ income, (4) quality of knowledge (one that lead to solutions) are also important
factor that determine the effectiveness of knowledge creation process, and (5) to effectively
accomodate organizational knowledge, knowledge creation model at individual level (such as
thinking techniques, visualing techniques) should be implemented.
Conclusions
Using data from firms in agricultural processing industry in Phetchabun province of
Thailand, the results support the proposed knowledge creation model of the marketing
practices. From the evidences, we can confirm that the clearer firms can understand how to
use knowledge management tools for each and every steps of knowledge creation process, the
higher the effectiveness of business operations (marketing stratey and practices in this case).
Together with other supportive factors such as strong leadership and sharing culture,
appropriate information technology systém (especially applications in the mobile devices) is
important because it not only provide knowledge both inside and outside organization but
also filter, validate and maintain up-to-date of ever-changing marketing knowledge.

Nattachet Pooncharoen
Assistant professor of economics at the Faculty of Business, Economics and Communication,
Naresuan University, Thailand. (since 2003).
141
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142
The average salary, personal income tax and their relation-case of Albania
Etleva BAJRAMI
Assoc. Prof. Dr. Pedagogue, Department of Finance, Faculty of economy, University of Tirana,
email: etlevabajrami@yahoo.com
Llesh LLESHAJ
PhD candidate. Pedagogue, Department of Finance, Faculty of economy, University of Tirana, email:
llesh_lleshaj@yahoo.com
Abstract
This paper will focus in personal income tax changes and its impact. We will focus in
average wages, its progress and recent development. We will study the relation between PIT
(personal income tax), average wages and others revenues in state budget. Personal income
tax, immediately reduces gross income of individuals, affecting the economic and social
welfare of individuals, thus individuals would not want to pay taxes. Distribution and
redistribution objectives that each government has are unlikely to be realized according to
expectations.
The first objective of this paper is analyzing the link between the personal income tax, the
average salary and number of employees. Second objective is analysis of changes in the
structure of the personal income tax and the total income in the state budget, and analysis of
other impact factors on PIT. One of the goals of this paper is to understand the significance of
the reforms undertaken toward this tax in Albania. For these objectives, we will base our
analysis and our findings on an econometric model.
Key words: tax income, personal income taxes, wages
Conference Topic: Economy, Management and Marketing
Introduction
Economic developments in recent decades have made personal income tax to be one of the
controversial topics in the circles of economists. Personal income tax has changed and
therefore it is important handling impact of these changes in the economy of a country. It is
generally accepted that almost all forms of taxation, have an impact on the efficiency of
resource allocation, because taxes affect the change of relative prices faced by consumers and
manufacturers. Government through public revenues will achieve its goal of distribution and
redistribution Despite that governments are interested to collect as much revenue from taxes,
a tax system should not slow down the development of productive capacity, because it will
reduce efficiency of economy.
Income on which tax is levied on personal income is not only wage income. They also
include income from real estate ownership, income from dividends, interest, by copyright and
intellectual property, etc...The object of our study is only the income from wages and other
rewards in relation with the current labor relations. We do not fall into error in considering
the total revenue from personal income tax, because their relation is in the focus of this paper.
143
Every time a tax change, discussions arise about the effects that will cause on the revenues in
the state budget as well as on taxpayer. Will the change affect the decision making of tax
payers? Will tax be neutral? A higher income will be taxed at a higher marginal rate.
Consequently, the individual will not aim high income to avoid taxes, which would affect the
state budget in several ways. First, revenues in the budget would be low because it will be
paid less taxes on personal income, and secondly, the lack of desire to higher income can also
affect labor productivity and profit of companies. This would bring a profit missing and the
consequently, uncollected taxes on profits. At a time when rates of economic growth in
Albania are low and the budget deficit continues to be high, any tax collected is very
important on the budget.
Review of literature
To understand the behavior of taxpayers need to analyze how the taxes on the average wage
are and if changes in tax rates on personal income affect the average wage.
In the last decade, the statutory PIT rate levied on the average wage of a single worker
declined in 23 OECD countries. Among them, the decline generally coincided with a trend
towards lower average tax rates on average earnings. Conversely, increases in the statutory
PIT rate levied on the average wage have frequently been paralleled by increases in the
average personal income tax rate. (OECD. 2012).
Reason to study the impact of tax rates is because one of the important objectives of a tax
system is economic growth. In this regard, several studies have been conducted.
Taxes on lower incomes are less significant, and the level of significance declines with each
level of income. There is no significant relationship between long-term growth and taxes on
the lowest level of income. (McBride W. 2012). The impact of rising higher marginal rates on
income, increase supply and demand on productive economic activity appears to be very
small. This suggests that raising top marginal tax rates will exert relatively little drag on
economic recovery, particularly in the context of a depressed economy where supply-side
effects are non-binding. Long-run supply-side effects of raising top income tax rates are not
binding until the economy fully recovers. (Fieldhouse 2013).
To illustrate the contribution of progressive tax rates (especially by high rates levied on
income greater) in total revenue can be illustrated by some figures for the United States and
Great Britain. As far as the past has been claimed (in 1956) that "all super progressive
structure produces only about 17 percent of the total income derived from individual income
tax" or about 8.5 percent of all federal revenues. (F.A.Hayek. 1960). Economic differences
between countries arises the need for ongoing studies of the effects of the tax. The specifics
of each country are important to understand the tax system as well as special taxes.
According Creedy, the extensive optimal tax literature does not provide, and was never
expected to provide, clear guidance, but instead has clarified the precise way in which the
optimal tax system depends on a wide range of factors, some of which relate to value
judgments while others concern behavioral responses or basic conditions, such as abilities,
which display considerable heterogeneity in practice. (John Creedy. 2009.)
An overview of personal income tax in Albania
The study is based on data from 2000 onwards to avoid the effect of the crisis of 1997. It is
aimed to study a stable period of social and economic life. Tax revenues in the past 14 years
have been increased with the exception of 2013. In 2013 strong decline is observed as the
revenue collected from taxes and customs. While, in 2014, noted the increase in tax revenues
144
from taxes and customs and from all other sources of income. Often discussed whether
personal income tax should be progressive or proportional. But this debate is not the focus of
our paper.
The structure of PIT has seen some changes in recent years. In general, the changes have
concluded with rising tax rates and marginal rates. Revenue from personal income tax has
risen almost steadily. From 2000 to 2007, revenues from personal income tax accounted from
4.5% to 6% of the total tax revenues. After 2008 with the entry of flat tax the incomes from
personal income taxes increased. Revenues from personal income tax occupied by 9% in
2008 to 11% in 2009 and with a consistency to about 8-9% in recent years.
Table 1. Tax revenues and revenues from personal income tax, in million ALL
Years 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Taxrevenues 104000 114300 128900 145400 166000 183800 205500 228200 264400 270800 288600 303900 300900 299900 336838
Personalincometax 4,590 6,300 6,149 6,414 8,162 7,621 9,000 13,000 23,272 30,611 27,058 29,493 29,754 29,570 28,202
Source: Ministry of Finance
The structure of the personal income tax has changed several times in the years taken under
consideration. With fiscal 2000 package, exclusive threshold was 10,000 ALL, and two
subsequent scales only differed by 10,000 ALL, while tariffs varied from one scale to the
other by 5 percent growing. In 2001, the exclusive threshold was increased to 14,000 ALL
and progressivity scales increased. While the higher marginal rate until 2004 was 25 percent
in 2005 dropped to 20 percent.
The structure of the personal income tax has changed greatly in 2007, entered into force in
2008. Application of the flat tax asked that the individuals with incomes over 30,000 ALL
taxed 10 percent of the amount 0. As we see the following table in that year average wage for
the public sector as well as the average salary classified in sector basis is over 30,000 ALL,
hence the marginal rate for the average wage has risen abruptly, while the highest rate of
marginal rate decreased from 20 percent to 10 percent.
The structure of the tax on personal income was flat, with a scale of 30,000 ALL, replaced
the previous progressive scales. This change was part of the fiscal package, aimed at the
transition from the progressive tax, at the flat tax, with a single rate of 10% on personal
income that was followed by the tax on corporate profit of 10%. Over 50% of the Balkan
countries have applied the flat tax. (Altax. 2011.)
Since 2014, the structure of the personal income tax has changed again. The most important
difference is the exemption of income up to 30,000 ALL, the highest progressivity rate
increase to 23%, and increasing the level of progressivity. The highest rate is 23 percent.
However the effects of recent changes in the tax structure remain to be seen.
3. The relationship between the tax rate, average wages and revenues to the state budget
Informality in the labor market has come as a result of undeclared employees and also by
declaring lower wages than real wages for calculation of the Social Security contributions,
called informality gray. Employees often accept lower wages declared in order to reduce the
tax and social security contributions. And this category of employees would react in the event
of increasing progressive tax rates.
Evasion of personal income is very high due to the informality and the declaration of income
smaller than in reality, which leads to reduction of the basis of contributions and does not
145
encourage or motivate employees with average income or high income to declare and pay
contributions based on real income. (State Supreme Audit. 2013).
Table 2. Performance of the state average salaries and wages by economic activities, in million ALL
Years 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Averagesalary by economic activities 13,355 14,820 16,54118,522 19,039 19,993 21,842 27,350 34,277 36,075 34,767 36,482 37,305 36,332 45,539
Average monthly salary instate 14,963 17,218 19,659 21,325 24,39326,808 28,822 33,750 36,537 40,874 43,625 46,665 50,092 52,150 53,025
Source: INSTAT
Referring to the table above, the average salary in the private sector and the public sector
with some exceptions has been increasing over the years.
To understand the performance of average wages exactly we see the progress of their growth
rate in the period under review. As we see in Figure 1, the highest rates of growth of the
average wage in the public sector has happened in the years of changes in the fiscal packages,
in 2004 and 2007-2008, respectively 14 percent and 17 percent.
Average wages by economic activities involving the private sector as well as state, follow the
same movement in 2007 and 2008, the growth rates fall strongly after 2009. At the time of
the change of the fiscal package and the transition to a flat tax, many employees in private
sector wages demanded unchanging the net salary, which apparently is reflected. In the
following years the increase has been low particularly in 2010.
The figure below shows that personal income tax has several peaks that are higher growth
rates. The highest rate of growth recorded in 2007 with 44 percent and 2008 followed by a
growth rate of over 70 percent.
Increased revenue from personal income tax is justified in the following years, with the
application of the flat tax and wage growth in the public and private sector. In 2010 we see
the decrease in negative growth rate of revenue from personal income tax, while in the
coming years the growth rate is about 8-9 percent. This means that taxpayers have reacted
against the increased marginal tax rate.
From Figure 1, we see that in 2010, the decline in average salary by economic activities.
Increasing personal income tax rate to 10 percent, compared to 5 percent of previous average
salary seems to have given effect to the revenue collected from personal income tax.
Figure 1: Progress of rate of change of wages in the public sector, average monthly wages by economic activity
and personal income tax
0.8
0.6
0.4
0.2
0
-0.2 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Average salary by economic activities Income personal tax Avarage state wages
Source: INSTAT, Ministry of Finance
146
After 2009 it seems that the labor market has reacted, rate of change of average wages are
reduced. To arrive at a more precise relation between the personal income tax, the average
salary by economic activities, the number of employees and revenue in the state budget we
present the analysis of a model.
The model
The methodology and results
Our analysis are based on model building with secondary data official in the context of fiscal
and economic indicators, like: personal income tax, total income tax, the average wage by
sectors of the economy, number of employees, wage growth in real terms of public sector and
qualitative variable "dummy". All indicators mentioned are economic indicator for Albania,
and the form of time series with the period a year 2000-2013. In this respect, our study will
examine the multivariate regression model of linear form. So our model is completely linear:
yt = b0 + b1*x1t + b2*x2t + ... + bn*xnt + ɛt
The symbolism used in these types of models is explained below:
yt = the dependent variable (in this study have only one dependent variable which is
“personal income tax”).
xit = the independent variable for i = 1, 2, ..., n and each of them is a vector of time value
with annual periodicity according to the period of yt (in this study, the independent variables
are: total income tax, the average wage by sectors of the economy, number of employees,
wage growth in real terms of public sector and qualitative variable "dummy").
bi = model parameters, or coefficients of independent variables in the model, for i = 1,
2, ..., n (in this regression study, change of the dependent variable Δy is explained by these
coefficients bi when Δxit = + 1 unit, in the condition of “ceteris paribus”).
ɛt = is called regression residual or error term, it is the only variable that is not provided
or is not explained by the model and it should be stochastic. This error term is known as the
statistical error of the model (it is a community of other influencing factors not included in
the model).
To evaluate the parameters bi, it will be used the ordinary least squares method, this means
that we need to minimize the square of errors.
Table 3, below, it shows the names and the source of data for the variables included in the
model, for the years from 2000 to 2013:
Table.3. Economic and fiscal indicators.
Variables Naming variables Source of data

TAP Personal income tax (value in million ALL) Ministry of Finance
TRT ALL)
Thetotal tax revenue without TAP (values in million Ministry of Finance
PGM
RPG
NRP
D Variable
Real
Average
The total
wage salary
quality
number by
growth"dummy"
ofin
economic
employees
the public
(takes
activities
sector
the value
(in
(value
%)
1 when
in ALL)
the Publications:
INSTAT
147
year the
take has value 0 in theofother
been reform calculating
cases) the TAP scheme and Legislation and
Decisions by the
Council of Ministers
in Albania
Source: Review of literature by authors.
To obtain consistent results, statistically significant, the model has been the subject of some
econometric tests. Results of tests by EViews 7, are summarized in Table 2 below:
Table 4. Results of the models tested in EViews 71.
The dependent variable: Linear model

TAP
Independent variables:
b0 = constant coefficient model -33941.96
TRT -0.114359*
NRP 0.028139
PGM 1.872514*
RPG -309.7469
D 424.3450
R2 adjusted 96.15%
Source: Calculations made by the authors. Note: *) t-test gives 5% statistical significance.
According to F-test the level of statistical significance of the model is 5%.
According to statistical analysis of the model in Table 4, we see that the value of personal
income tax, it is statistically significant and negative correlation with the value of total tax
revenues (excluding personal income tax). This is because the increase of the tax rate on
personal income was associated with reduced tax revenues from corporate profit. These taxes
simple satisfy the budget without any significant results in them, as also noted the
performance of the state budget revenues in Table 1.
Also, we see that the value of personal income tax, it is statistically significant and positive
correlation with average salary by economic activities, which is supported and from other
authors mention above. Other variables in the model did not show statistically significant
correlation.
It is worth to show that the model has a coefficient of determination very high 96.15%, this
shows the correlation of variables efficiently. Based on Table 4 above, we identify
connections with the corresponding values:
TAPt = -33941.96 – 0.114359*TRTt + 0.028139*NRPt + 1.872514*PGMt – 309.7469*RPGt
+ 424.345*D + ɛt
From this model we see that the value of tax personal income increased, with 1.87 ALL if the
average monthly salary by sectors of the economy grow at an ALL (one unit), while the level
of tax revenues in total (excluding tax personal income) increases with ALL (one unit), the
value of personal income tax will decrease by 0.11 ALL. According to this model the level of
1 "Linear Model" shows that the model is linear according to the dependent variable and independent variables.
148
PIT in Albania is not affected by the number of employees in the country, it apparently looks
like a case without logic, but the truth is that the labor market in Albania is very informal2.
Also, real wage growth in the public sector is not statistically correlated with the level of PIT
because real wage growth there is not been significant at rates that reflect value in PIT. On
the other hand the public sector from 2000 onwards decreased the number of employees as a
result of privatization of state enterprises. While variable quality "D" takes the value 1 in
which changes occur in the structure of the calculation of PIT, and we can see that the model
shows that there is no statistically correlation with value of PIT then reforms undertaken by
the Albanian government during the years 2000 in 2013 did not give effect the value of PIT.
Conclusion
Changing the structure of personal income tax may result in an increase or decrease in
marginal tax rates. As we see from analyzing below rate of change of average wages are
reduced after marginal rate is increased. So if the tax rate increases, individuals will not be
encouraged to work more because of higher income will be taxed at higher rate.
Another effect would be their movement towards informality. Both reactions would lower the
tax that individuals would pay, resulting in reduction of personal income tax for the state
budget. Such a thing is proved in this paper on the performance of the revenue collected to
the state budget from personal income tax after growth rates of personal income tax on the
average wage.
According the Model the value of personal income tax has positive correlation statistically
significant level of the average wage. Increasing the level of wages will direct outcomes
contribute to increasing budget revenues.
The model shows that the qualitative variable "dummy" is no statistically with PIT value then
reforms pursued by the Albanian government during the years 2000-2014 have not given
effect in the value of PIT.
The level of PIT in Albania is not affected by the number of employees in the country. It
seems unconvincing result but the labor market informality in Albania is high. High
employment informality is also a limitation of our study.
Authers Brief biography

Assoc.Prof. Dr. Etleva BAJRAMI, graduated in finance at the Faculty of Economy,
University of Tirana, in 2002. She works at Faculty of Economy, University of Tirana since
2003. She is pedagogue in the Department of Finance. In 2009 she has scientific grade
“PHD” in Finance. She holds academic title Associate Profesor. She is the author of a
university book and some lectures.
Llesh Lleshaj graduated in finance at the Faculty of Economy, University of Tirana, in 2010.
In the end of 4 years of university studies he was given the silver medal "Excellent Student of
the University of Tirana, in Finance". In 2013 he began the PhD studies, for statistics in the
Department of Statistics and Informatic Applied, Faculty of Economics, University of Tirana.
From 2010 until 2013 he worked in the finance profession as: risk analysis specialist and
financial specialist for business efficiency. Since 2013 until now he is pedagogue in the
Department of Finance, Faculty of Economics, University of Tirana.
2 According to the World Bank in 2013, the informality of the Albanian economy is around 30% and the labor
market has the highest value.
149
Literature
Albanian State Audit. 2013. Performances lacking in the National Insurance Institute.
Altax. 2011. Performance indicators of the Albanian tax and countries of central and southern
Europe.
Hayek.F.A. 1960. Taxation and Redistribution. University of Chicago Press
Creedy J. 2009. The Personal Income Tax Structure: Theory and Policy. The University of
Melbourne.
Fieldhouse A. 2013.A review of the economic research on the effects of raising ordinary
income tax rates.
McBride W. 2012.Global Evidence on Taxes and Economic Growth: Payroll Taxes Have No
Effect. Tax Foundation.
Ministry of Finance. January-December 2013. Fiscal indicators.
OECD 2012. TAXING WAGES 2011, Trends in personal income tax and employee social
security contribution schedules.
www.bankofalbania.gov.al
www.financa.gov.al
www.instat.gov.al
150
Educational function of archetypical forms
in the architecture of museums.
Katarzyna Witasiak
Lodz University of Technology
kwitasiak@gmail.com
Abstract
The paper presents educational function of archetypical forms in the architecture of
museums. Architecture is an environment created by man that can stimulate our mind and
methods of gaining knowledge. The aim of the paper is to show that archetypes are used by
contemporary architects to create interesting educational areas. There will be taken under
consideration the role of the museum as a place of lifelong learning and its connection to the
archetype of labyrinth.
Archetypes are the structural elements common to everybody and are present in the collective
unconsciousness. This topic points out that walking in a spatial labyrinth can improve
concentration and enhance learning opportunities. The paper shows how architecture of
museums affects our perception. Museums that benefit from the world of archetypes become
a powerful tool that makes a great intervention in our educational life.
Keywords: architecture, labyrinth, education, museum

Introduction.
Architecture is a powerful instrument that is used to stimulate our life and influence the
people who inhabit it. By implementing the qualities of archetypes into our architectural
environment we can deeply experience and perceive space that resonates with the culture and
history. There are archetypical symbols like labyrinth that help us associate with diverse
cultures and periods of time. The strength of architecture based on archetypes is that it evokes
our subconsciousness and connections to the cultures of the past. Many contemporary
museums engage relations between the cultural integrity of space and the recipients through
structural archetypes.
The Healing Power of the Labyrinth.

One of the most influential archetype that is used on many fields of expression is labyrinth.
Several years ago Dr. Martin Bortman at California Pacific Medical Center in the US clearly
stated that the labyrinth can be safely used for therapeutic purposes. Staying in the labyrinth
helps to improve our analytical thinking. In 1997 California Pacific Medical Center, an acute
care hospital in San Francisco, created a painted labyrinth outside the entrance. Dr. Brotman
was consequent and that is why today it is common to see labyrinths near hospitals,
universities, elementary schools, as well as in kindergartens and prisons. Also, more and
more Western Universities build mazes in which students seek silence and concentration
before exams.
A labyrinth system is the opposite of hierarchy, there is neither the time nor the victors. This
leads us the way and we do not ask whether we are going right or wrong, our attention is
directed to the inside.
151
Labyrinth and Architecture.
In antiquity and Middle Ages Labyrinths show a unicursal representations of the symbol,
which offers a single possible way to the centre. On the other hand, the multicursal maze,
where the path is determined by the choices made at intersections, was only a literary motif in
antiquity, for example in Ovid. This version was popular in the 16th and 18th century and
was created for amusement in the gardens of Europe. There was no known vision showing
the alternative form of the figure, but it became frequent in the modern world.
Nowadays multicursal labyrinth has a great influential power on education, contemporary
science and art. Apart from simple signs and paintings there are many three dimensional
examples of the labyrinthine archetype created by artists for example in contemporary
architecture of museums and memorials.
Peter Eisenman created the Memorial to the Murdered Jews of Europe in Berlin and has
made a question of the metaphysics of presence though his architecture. He employs forms
that have been generated through a series of reflections on place and placelessness in
postmodern life. Architect created four thousand jagged stone pillars of varying height
covering a huge field near the Brandenburg gate. The project also includes the information
centre that introduces visitors to the history. It is a great lesson of difficult times and by
raising awareness in the young generation we can prevent from future civilization's mistakes.
In the project Eisenman proposed a labyrinthine fear of entrapment. Architect expressed his
opinion about the site of the labyrinth that it is a site of destruction, erasure and architectural
metaphor for discontinuity. Jacques Derrida expressed another thought that the labyrinth is
structured by the hope of getting out. The memorial's architect revealed the concept that this
symbol is the hope of reaching the conclusion and find the way to ourselves.
Another interesting example of exhibition form that kept educational power was Swiss
Pavilion that was built for 2000 Expo in Hannover by Peter Zumthor and was welcoming
space for relaxation and for gaining knowledge about the country. The building gave visitors
the opportunity to imagine the experience of visiting the Switzerland. Architect used the
symbol of labyrinth which helped to sharpen senses and made the exploration more
interesting. The construction initiated the use of all our senses. The smell of local food, the
feeling of raw wood and the sound of traditional music played by musicians moving in the
labyrinth, definitely emphasized values of Switzerland. The resulting structures presented the
mystic form made of wooden beams that created a simple archetypical geometry of labyrinth.
In 2004 the 21 century Museum of Contemporary Art in the centre of Kanazawa was opened.
The building designed by Kazuo Sejima and Ryue Nischizawa presented a gigantic cylinder
and one floor with four entrances which lead onto a labyrinth of squares and corridors with
transparent walls. The Museum is designed as a park where people can gather and meet with
one another. Families can enjoy visiting various exhibitions in white cube galleries enclosed
in the glass circle. Through the reversible membrane visitors can sense each other's presence.
Architects created a labyrinth of independent free-form acrylic shapes within the gallery. The
aim of the Museum is "enjoyment", and "accessibility". The interior labyrinth resembles a
miniature city. Visitors can choose their own path of visiting museum.
In landscape, the labyrinth means an intricate network of pathways, usually enclosed by tiny
bushes, in which it is not possible to visualize the center. Nowadays, this design has
experienced a revival of the geometrical style. There are labyrinth installations that enrich the
interior space of museum and change the visitor's perspective. Architects from BIG Group
decided to create a grand installation of the labyrinth inside the National Building Museum
in Washington D.C. The walls descend in height towards the centre, so as they travel deeper
into a maze their path typically becomes more convoluted. It serves creating a new
perspective on museum building and our place in the world.
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Conclusions
These examples can be linked to the evolution of multicursal labyrinths and their
significance. They may present a new vision of the place of humanity in the world where the
notion of free choice has been exposed. According to Paolo Santarcangeli this aspect could
be crucial in theological discussion of salvation, but finally labyrinth can be considered as a
mirror of complexity and reality of human experience in the world.
Moreover labyrinths can improve our contacts with intuition, provoke spiritual reflections
and develop logic thinking and help improve psychological therapy. The writer Jorge Luis
Borges said if we consider the world as a maze, we can believe in its center. According to the
writer if we assume that the world is only a chaos, we are lost. Labyrinth doesn't have to be a
space of fear, entrapment and mystery. Above all labyrinth can give us the most important
lesson and of knowing yourself.

Author 1
Katarzyna Witasiak, PhD Student at Lodz University of Technology, Conducts
research on Myth of the Labyrinth in Architecture of XX and XXI century.
References
Laurie Goodstein,
Sanaa: 21 Century Reviving
Museum Labyrinths,
of Contemporary
Paths Art,
to Inner
TotoPeace,
Publishers,
New York
2005 Times,1998
Paolo Santarcangeli, Księga Labiryntu, Wiedza Powszechna, Warszawa 1982

Anthony Grafton,Glenn W Most,Salvatore Settis, The Classical Tradition, Harvard
University Press, Cambridge, Massachusetts, London, 2010
Brett Ashley Kaplan, Unwanted Beauty: Aesthetic Pleasure in Holocaust
Representation, University of Illinois Press, Chicago, 2007
Peter Zumthor, Plinio Bachmann, Karoline Gruber, Ida Gut, Daniel Ott, Max
Rigendinger, Roderick Hönig, Swiss Sound Box: A Handbook for the Pavilion of the
Swiss Confederation at Expo 2000 in Hanover, Princeton Architectural Press,
Hanover, 2000
Laurie Goodstein, Reviving Labyrinths, Paths to Inner Peace, New York Times,1998
153
Architecture in science fiction-movies as a tool for improving aesthetic
sensitivity of the youth
Karol Wysznacki
Technical University of Lodz
karollos@o2.pl
Abstract
The aim of the paper is to show how modern science – fiction movies use architectural
inspirations in the process of creating fictional worlds. We will take into consideration movies,
which are highly popular among young people, for example „The Matrix” or „Star Wars” and
some of the most recent productions, including „Ex Machina” by Alex Garland. The inspirations
will include works of Mies van der Rohe and Zaha Hadid.
We will also analyse how the architectural inspirations can shape the meaning of the
movies and what kind of metaphor can be stored in architectural forms. The paper will try to
consider, if these „secret meanings” are visible to young audience.
The paper will try to prove that, except for delivering entertainment, modern cinema can
also subconsciously provide the youth with good architectural examples, which are essential for
their aesthetic development.
Keywords: Architecture, The Matrix, Star Wars, Science - fiction

Introduction
Since the very beginning of cinema and photography many people have argued if it is
possible to regard them as “art”. Directors and photographers alike had been struggling for
many years until they finally won the battle – recording the environment with mechanical
devices made its way to the galleries and dominated the present culture. One of the most
important reasons for that was in my opinion stated by Sebastiao Salgado. He said that if we
take many photographers to the same place, each of them will take completely different
pictures. These differences will represent their individual way of perception, their aesthetic
inspirations, experience and character. We can clearly say that people “shape” the world
within the pictures in their own, specific manner.
However, a statement that the world within the pictures shapes the people is true as
well. All the graphics, advertisements, logos, movies, spaces that we see stay on the bottom
of our minds and come out as soon as we are asked to design something. This “unconscious”
education can be easily seen among the beginning architecture students, who often reproduce
in their projects either the environment in which they live or the one seen on the silver screen.
This is an important clue for people shaping the world of popular culture – they are not only
responsible for creating fictional worlds, but also – indirectly - the real one.
Therefore, in the following paper I will try to analyse which possible benefits can be gained
by young people from one of the most popular movie genre – the science fiction. In my
opinion the topic is very important, because fictional architectural visions planted in young
people brains are likely to come true one day. Or maybe they have already had?
Ecological architecture and the house of Yoda

When we think about the biggest commercial success ever – “The force awakens”, the
images of the original “Star Wars” trilogy cross our minds. What I find interesting is that the
154
dates when original movies made their way to the silver screen (1977, 1980, 1983) was also
the time, when environmental friendly, ecological architecture started to become popular.
Apparently, the architecture of the “Star Wars” worlds – Endor, Kashyyyk or Tattooine have
a lot in common with the “trendy” ecological concepts.
Even the idea of alien races living close to nature in the world of super-modern
technology has a lot in common with the idea of coming back to the architectural “roots”,
which is an important aspect of the ecological thought. The concept of creating buildings out
of straw, wood and stone is surely not new – however doing that in 20th and 21st century, in
the world of extremely complex building structures is a rebellious idea. Except for
environmental benefits people sought in this kind of architecture the calm and peace and the
harmony with nature.
Surely this is what was sought by the Jedi master Yoda, who lived in a mud hut
despite being seen in super – modern cities in the earlier episodes. The way Yoda is presented
in “Empire strikes back” may remind us of eastern religious and philosophical systems,
which were getting popular with the spread of hippie movement. As we know, the ecological
concept in architecture is also a part of this ideology. What I want to point out is that
associating wisdom (the Jedi master Yoda is an authority within the movie) with
“environmental - friendly – Zen – like” concept was somehow “in tune” with what many
young people thought at this time. Perhaps these “patterns” were consolidated in young
people brains by movies like “star wars” and later inserted into the language of architecture.
Except for philosophical background, even formally modern ecological architecture reminds
us of what we have seen in “Star Wars”. “Blue Forest Luxury Tree Houses” look a lot like
Endor, Eco Dome at Dusk remind us of Yodas house. Hundreds of similar examples could be
found in the internet.
Parametric architecture and „The Matrix”

Another example of extremely popular series is “The Matrix” trilogy. The movie tells
a story of a mutiny of machines, which use the human kind as a source of energy. What is
interesting is the design of the world created by robots – smooth surfaces, organic shapes and
plant-like structures are shaping a strange, nightmarish city.
The design has a lot in common with modern parametric projects, which are
becoming more and more popular; for example Zaha Hadid works are now widespread
around the world. What I find interesting is that parametric projects sometimes in fact are
created by machines; complicated algorithms create extremely complex shapes as a solution
to the architectural problems.
Moreover, both parametric architecture and the vision in the movie matrix share
similar idea of contemporary building design. The concept that the world of the future will
not consist of order, straight lines and simplicity but will be a structure, that evolve in a
similar way as plants or animals do. As we know plants grow is in fact an algorithmic,
mathematical method – trees perform optimisation of their shapes to maximise sun absorption
and form best structure, which can carry the load of their branches.
Although the idea of parametric architecture is much older than “The Matrix” motion
picture, the vision of machine city might have been an inspiration to many. In my opinion
the movie formed the intellectual patterns in the architects of my generation.
Conclusions
To sum up, as I demonstrated with “The Matrix” and “Star Wars” examples,
architectural ideas often inspire people, who develop worlds in science – fiction movies.
These movies inspire other people and spread the philosophy among many.
155
The process can be connected with latest architectonic trends or can simply include
architecture of the past. One of the latest science – fiction blockbusters, Ex Machina by Alex
Garland may generate knowledge about... classical modern architecture of first half of 20th
century. The secret base where a computer specialist tests artificial intelligence reminds us of
works of Mies van der Rohe.
Parametric, modern or ecological – architecture in movies forms our sensitivity. Aesthetic
“unconscious” education is not only a matter of lectures – it happens every time we enter a
cinema audience.

Karol Wysznacki
PhD student at the Technical University of Lodz, independent director, screenwriter,
photographer, currently working on his dissertation about architectural visions in science –
fiction movies.
References
Brin David, Stover Matthew Woodring, Star Wars on Trial: Science Fiction and Fantasy
Writers Debate the Most Popular Science Fiction Films of All Time, BenBella Books, 2006
Diocaretz, Myriam, Critical Studies, Volume 29 : Matrix in Theory, Editions Rodopi, 2006
Tabb James, Deviren Senem, Greening of Architecture: A Critical History and Survey of
Contemporary Sustainable Architecture and Urban Design, Ashgate Publishing Ltd, 2014
Watson, Robert, Film and Television in Education, Routledge, 1990
156
GDP Growth Rate and its Determinants
Case of Albania
Jonada Tafa
jtafa@epoka.edu.al
Epoka University
Abstract
The aim of this paper is to study the relationship of GDP growth rate with some of its
determinants specifically level of corruption in a country by CPI by International
Transparency, level of FDIs, inflation rate, unemployment rate and GNI per capita. The study
is focused in the Albanian case.
In order to estimate this relationship a regression analysis with GDP growth rate as a
dependent variable and other as independent variables is conducted. Data for this study are
taken from Mudi Index and correspond to the period from 2000-2012. These data exhibit
time series characteristics, that is why autocorrelation, heteroscedacity and stationarity are
also studied, to better understand the real significance of the independent variables in GDP
growth rate.
The results of the study showed that inflation rate and employment rate both affect negatively
GDP growth rate. On the other hand CPI seems to have a positive relationship with GDP
growth rate, and FDI together with GNI per capita resulted to have a negative relationship
with the dependent variables. However, it is worth mentioning that CPI, FDI and GNI per
Capita were found to be statistically non-significant in this model.
Keywords: GDP growth rate; Inflation; Unemployment; CPI; GNI per capita; FDI
The 6th Multidisciplinary Academic Conference in Prague 2016, Czech Republic (The
6th MAC 2016)
Introduction
This work consists on a study of the relationship between GDP and its determinants:
CPI,FDI, GNI per capita, unemployment rate and inflation rate. The data sample is about the
case of Albania.
The first chapter of the paper is literature review on each the relationship between GDP and
each single determinant.
The second chapter is the analysis for the case of Albania, performed by using econometric
test.
First of all it begins with testing the significance of each variable and then with the
interpretation of the model. Multicollinearity, autocorrelation and heterescedacity tests are
conducted and results are interpreted. The last part of this chapter is the study of how
stationary variables are through years. To check it Augmented Dickey-Fuller test is
performed.
The last part of the paper is the conclusion with results from the analysis.
Methodology and Data Description
To study this relationship a regression analysis was performed , with a dependent variable
GDP growth rate. This paper uses Control of Corruption Index of World Bank as a measure
of public corruption. It is used to understand people perception’s of how much public power
157
is used for personal benefits. It includes both petty and grand corruption. Data for this index
is taken from 31 different sources produced by surveys conducted by NGOs, national and
international organizations, private firms etc. Score range varies from -2.5 to 2.5, with -2.5
for the worst performance and 2.5 for the best performance. A high score serves as a signal
for a positive performance of government in reducing or control of corruption. Control of
corruption is given as a percentile rank. This percentile rank shows the percentage of
countries in the world which score below the selected country. It is based on 0 to 100 scale.0
corresponds to the lowest rank while 100 to the highest rank.The other independent variables
are inflation rate measured in percentage, unemployment rate also measured in percentage,
FDI and GNI per capita measured in terms dollar amounts.Data used correspond to the period
of 2000-2012 and are taken from the Index MUDI.
Literature Review
Corruption and Economic Growth
Corruption contributes to tax evasion, lack of effective tax administration and favors well
connected and wealthy people. For example the use of government funded programs for the
benefit of the wealthy people will decrease the impact of social programs in income
distribution and poverty level.In this way assets of wealthy people will have greater returns,
compared to those assets owned by the poor. As assets can be used as collateral, the ability of
the poor to borrow will decrease, contributing to a deeper income inequality and poverty.
Corruption contributes to lower spending in health and education (Mauro, 1995). It prevents
the poor people to get access to public services, because of their inability to pay bribes.
The link between corruption and poverty can be explained also by economic growth. High
corruption is followed by a high poverty level. When economy is growing, people
expectations are higher. Unemployment falls and income level starts to increase. Due to these
changes people start to spend more and poverty reduces. But when this growth is associated
by a high level of corruption, the opposite situation is observed. An increase in corruption
will decrease economic growth. As a result poverty will increase and income inequality will
be more rigid (Gupta, Davoodi, & Alonso Terme, 1998).
GDP and Unemployment
This is an empirical study that proves the imperfect relationship between GDP and
unemployment and this law is called Okun’s rule of thumb. By this law according to the
economics arm of Federal Reserve Bank of Saint Louis explain that this law tells us when
unemployment rate is high or above the natural rate the country’s GDP may be lost. Okun
presented two different versions of this law. The first one is :
ΔUt= a – b * ΔlogGDPt
this equation represent the ration of GDP and unemployment as 2:1 for the United States
(Abel, 2008). ΔUt shows the change in the unemployment rate, ΔlogGDPt is the change in
the GDP, is the level above the natural rate of the unemployment and b is the Okun’s
coefficient (Neely, 2010) noted that this coefficient can change over time since the relation of
unemployment to economic growth depends on technology, laws, preferences, demographics
and social customs. After the financial crises of the 2008 the Okuns coefficient changed
rapidly in some developed countries. Neely (Neely, 2010) noted that industrialized countries
have smaller Okun’s coefficient because unemployment is simpler than changes in output
since it is easy to fire workers.The rule of Arthur Okuns had many critics but also people who
support it. Ben Bernanke the Federal Reserve chairman summarizes that to reduce the
unemployment the economy must growth at a level above its potential so to specify Okun’s
law says that if potential rate of gross domestic product growth is 2 percent the GDP must
grow at 4 percent in a year to reach 1 percent reduction in unemployment.
158
GDP and FDI
Many academics admit that foreign direct investment can have important positive effects on a
host country’s development effort. Based on this, industrialized and developing countries
have offered incentives to encourage foreign direct investments in their economies. The
benefits of FDI vary greatly across sectors. Countries with well developed financial markets
gain significantly from FDI in their economic growth.
Hanson (2001) argues that evidence that FDI generates positive spillovers for positive
countries is weak. Lipsey (2002) takes a more favorable view from reviewing the micro
literature and argues that there is a strong evidence of positive effects.
Krugman (1998) calls into doubt benefits associated with foreign acquisition of domestic
firms, arguing that in financial crises foreigners can take advantage of liquidity constrained
domestic investors’ fire sales of assets. In this context, foreigners are less efficient than
domestic investors, since foreigners acquire local firms because of their superior cash
position as opposed to a special know-how or technology advantage. .
GDP and Inflation
Inflation refers to a situation where average price levels increase or when the amount of
currency increases. As a result, money has less purchasing power. Over time, the growth in
GDP causes inflation, and inflation brings hyperinflation. Once this procedure is in place, it
can quickly become a self-reinforcing feedback loop. This is because in a world where
inflation is rising, people will spend more money because they know that it will be less
valuable in the future. This causes more increases in GDP in the short term, bringing about
further price increases. Also, the effects of inflation are not linear; 10% inflation is much
more than twice as damaging as 5% inflation. In Fiji’s case, studies by Dewan et al (1999)
and Dewan & Hussein (2001) discovered some insights into the inflation growth relationship.
Dewan et al (1999) found that changes in the difference between actual GDP and potential
GDP (output gap) had a bearing on Fiji’s inflation result. In another study, Dewan & Hussein
(2001) found in a sample of 41 middle-income developing countries including Fiji, that
inflation was negatively linked to growth.
GDP and GNI

Gross National Income (GNI) and Gross Domestic Product (GDP) are economic terms that
deal with national income. The GNI and GDP are often considered to be the opposite sides of
the same coin. The GDP is said to be the measure of a country’s overall economic output. It
is the market value of all services and goods within the borders of a nation. The GNI is the
total value that is produced within a country, which comprises of the GDP along with the
income obtained from other countries. One of the main differences between them is that GDP
is based on location and it is the value produced within a country’s borders, while GNI is
based on ownership and it is the value produced by all citizens.
Research Analysis
Heteroskedasticity
Heteroskedasticity Test: Breusch-Pagan-Godfrey
F-statistic 0.547453 Prob. F(5,6) 0.7374
Obs*R-squared 3.759437 Prob. Chi-Square(5) 0.5845
Scaled explained SS 0.710537 Prob. Chi-Square(5) 0.9824
Test Equation:
Dependent Variable: RESID^2
159
Method: Least Squares
Date: 06/30/15 Time: 14:33
Sample: 113
Included observations: 12
Variable Coefficient Std. Error t-Statistic Prob.
C 14.57936 12.72668 1.145575 0.2956
CPI 4.373911 6.683967 0.654389 0.5371
FDI 2.53E-09 3.88E-09 0.651523 0.5388
GNI_PER_CAPITA -0.000598 0.000817 -0.732343 0.4916
INFLATION_RATE -0.063911 0.244281 -0.261629 0.8024
UNEMPLOYMENT_RATE -0.591947 0.992262 -0.596563 0.5726
R-squared 0.313286 Mean dependent var 1.067656
Adjusted R-squared -0.258975 S.D. dependent var 1.371205
S.E. of regression 1.538548 Akaike info criterion 4.006408
Sum squared resid 14.20278 Schwarz criterion 4.248862
Log likelihood -18.03845 Hannan-Quinn criter. 3.916643
F-statistic 0.547453 Durbin-Watson stat 1.805317
Prob(F-statistic) 0.737412
From the output table from E-views we look at the values of probabilities of F, Chi-Square of
R-squared and Chi-square scaled explained SS. The null hypothesis of this test states that
variances are constant. If look at the above mentioned values probabilities are higher than
0.05 (confidence level), meaning that we do not reject null hypothesis. So, there is no
evidence of hetereskedasticity in this model.
Model Estimation
After estimating the model by using E-Views we got the following results:
GDP_Growth = 36.3 + 3.03CPI + (-0.33)Inf_R + (-0.001)GNI_Capita + 3.26*10-9FDI+ (
1.76)Un_Rate.
From the output of Eviews by use of coefficient of determination R2 goodness of fit is
measured. Coefficient of determination shows how much variation of the dependent variable
is explained by the regression line and explanatory variables. In this model 67% of variation
of GDP growth is explained by the independent variables. R2 in multiple regression does not
take into consideration the degrees of freedom used in the model. It faces the problem of over
fitting. A more accurate value is the adjusted R2. Adjusted R2 in the model is approximately
0.40. It shows that actually approximately 94.8% of variation in Y is explained by the
independent variables. R2 and adjusted R2 are very close to each other. This is a very good
indicator, as it suggests that over fitting problem is almost not present in this model.
CPI and GDP growth seem to have a positive relationship between them, as with one unit
increase in Corruption Perception Index, GDP has increased by 3.03%.When Inflation
increases, GDP growth falls. As it is seen from the equation, one percent increase in the
inflation rate decrease GDP growth rate by 0.33 %.GNI per capita also effects negatively.
With one $ increase in GNI per capita, -0.001%. FDI also has resulted to have decrease the
level of GDP growth rate, by 3.26*10-9% with one dollar increase. Unemployment rate also
effect negatively the GDP growth rate, as with one percent increase in unemployment rate,
GDP growth rate decreases by 1.76%.
Stationarity
ADF Test Statistic 0.176713 1% Critical Value* -4.4613
5% Critical Value -3.2695
*MacKinnon critical values for rejection of hypothesis of a unit root.
160
Augmented Dickey-Fuller Test Equation
Dependent Variable: D(GDP_GROWTH)
Date: 07/02/15 Time: 14:46
Sample(adjusted): 513
Included observations: 9 after adjusting endpoints
GDP_GROWTH(-1) 0.361854 2.047694 0.176713 0.8683
D(GDP_GROWTH(-1)) -0.714706 1.918880 -0.372460 0.7284
D(GDP_GROWTH(-2)) -0.531663 1.315511 -0.404149 0.7068
D(GDP_GROWTH(-3)) -0.184789 0.836597 -0.220882 0.8360
C -2.565872 11.17183 -0.229674 0.8296
R-squared 0.179602 Mean dependent var -0.455556
Log likelihood -16.33852 F-statistic 0.218921
Durbin-Watson stat 1.991441 Prob(F-statistic) 0.914816
Since the ADF test statistic is higher than the critical values for all significance levels
(measured in negative numbers) we therefore fail to reject the null hypothesis. The null
hypothesis states that the variable has unit root and therefore is not stationary through years.
Based on this intuition we can say that GDP growth rate is not stationary through years and
therefore has a unit root.
ADF Test Statistic -1.344717 1% Critical Value* -4.8875
Dependent Variable: D(CPI)
Date: 07/02/15 Time: 14:40
CPI(-1) -0.641417 0.476990 -1.344717 0.3109
D(CPI(-1)) 0.779725 0.547793 1.423394 0.2906
D(CPI(-2)) -0.196095 0.580957 -0.337537 0.7678
D(CPI(-3)) 0.066927 0.618116 0.108276 0.9237
C -0.396812 0.327965 -1.209923 0.3499
Adjusted R-squared 0.164114 S.D. dependent var 0.109675
S.E. of regression 0.100272 Akaike info criterion -1.586048
Sum squared resid 0.020109 Schwarz criterion -1.624684
Log likelihood 10.55117 F-statistic 1.294504
Since the ADF test statistic is higher than the critical values for all significance levels we
therefore fail to reject the null hypothesis.. In this case, we also say that even CPI is not
stationary through years.
Dependent Variable: D(FDI)
161
Date: 07/02/15 Time: 14:41
FDI(-1) -0.519464 0.434297 -1.196102 0.2977
D(FDI(-1)) 0.981459 0.997110 0.984303 0.3807
D(FDI(-2)) -0.321658 0.461391 -0.697148 0.5241
D(FDI(-3)) 1.236924 1.247294 0.991685 0.3775
C 2.45E+08 1.85E+08 1.324022 0.2561
R-squared 0.339519 Mean dependent var 1.21E+08
Adjusted R-squared -0.320962 S.D. dependent var 2.55E+08
S.E. of regression 2.94E+08 Akaike info criterion 42.13381
Sum squared resid 3.45E+17 Schwarz criterion 42.24338
therefore fail to reject the null hypothesis. The null hypothesis states that the variable has unit
root and therefore is not stationary through years. This is the case also with FDI, which seems
to have a unit root in it, therefore be not stationary.
Dependent Variable: D(GNI_PER_CAPITA)
Date: 07/02/15 Time: 14:42
GNI_PER_CAPITA(-1) -0.151034 0.109447 -1.379971 0.2397
D(GNI_PER_CAPITA(-1)) -0.025653 0.449169 -0.057112 0.9572
D(GNI_PER_CAPITA(-2)) -0.053941 0.414371 -0.130175 0.9027
D(GNI_PER_CAPITA(-3)) 0.547591 0.712000 0.769088 0.4847
C 1319.112 784.4051 1.681672 0.1679
therefore fail to reject the null hypothesis. Therefore we accept null hypothesis and say that
the variable has a unit root and is not stationary.
Dependent Variable: D(INFLATION_RATE)
Date: 07/02/15 Time: 14:43
162
INFLATION_RATE(-1) -1.572768 0.781924 -2.011409 0.1146
D(INFLATION_RATE(-1)) 0.486591 0.475082 1.024226 0.3636
D(INFLATION_RATE(-2)) 0.279938 0.283936 0.985919 0.3800
D(INFLATION_RATE(-3)) 0.151785 0.150714 1.007109 0.3709
C 4.386723 2.194112 1.999315 0.1162
This is the case also with inflation rate. By failing to reject the null hypothesis, we therefore
state that it has a unit root and it is not stationary through years.
Dependent Variable: D(UNEMPLOYMENT_RAT)
Date: 07/02/15 Time: 14:45
UNEMPLOYMENT_RAT(-1) -0.078944 0.319637 -0.246980 0.8171
D(UNEMPLOYMENT_RAT(-1)) -0.513752 0.401708 -1.278919 0.2701
D(UNEMPLOYMENT_RAT(-2)) 0.142868 0.085942 1.662382 0.1718
D(UNEMPLOYMENT_RAT(-3)) 0.062872 0.056691 1.109012 0.3296
C 1.461664 4.237367 0.344946 0.7475
Unemployment rate for the period of study seems to have a unit root and not be stationary
through years.
Conclusion
This study aimed to explain the relationship of GDP growth rate with CPI, FDI, GNI per
Capita, Unemployment and Inflation rate, in Albania. It was found that both unemployment
rate and inflation rate affect negatively the GDP growth rate, while the other three variables
were found to be statistically insignificant in this model. We checked about autocorrelation
and found no serial correlation among variables. Misspecifation and Heteroskadicity were
also tested, and was found that the model was correctly specified and there was no evidences
for heteroskedasticity issues. All these results makes the interpretation of our model more
163
reliable. However, when studying stationarity it was found that variables are not stationary
through time, which is usually the case of times series data.
Biography: Jonada Tafa

I am currently a research assistant in the Department of Banking and Finance at Epoka
University. At the same time, I am pursuing my masters in Banking and Finance, which will
be finished by June,2016. I have finished my bachelor studies with a honor degree, being
ranked first in the Graduating Class of 2014. This is the second year working as a research
assistant.
Bibliography
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Balakrishnan. (2010). Unemployment dynamics during recessions and recoveries:Okun's Law and
beyond.
Gonzalez. (2002). Labor Market Flexibility in Thirteen Latin American Countries and the United
States.
Gupta, S., Davoodi, H., & Alonso Terme, R. (1998). Does Corruption Affect Income Inequality and
Poverty? IMF Working Paper, 23-45.
Karstedt, S. (2001). The Culture of Inequality and Corruption: A Cross-National Study of Corruption.
NA: Australian Institute of Criminology.
Knotek. (2007). How Useful is Okun’s Law?
Mauro, P. (1995). Corruption and growth. Quarterly Journal of Economics, 681-712.
Neely. (2010). Okun’s Law: Output and Unemployment.
Neely. (2010). Okun’s Law: Output and Unemployment.
Rowe, N. (2011). Worthwhile Canadian Initiative.
USAID. (2005). Anticorruption Strategy. Washington DC: USAID.
World Bank. (2000). Making Transition Work For Everyone: Poverty and Inequality in Europe and
Central Asia. Washington DC: World Bank.
164
Exploring the Roles of Blended Learning as an Approach
to Improve Teaching and Learning English
Fa-ezah Wasoh
Prince of Songkla University, Thailand
huangyai2003@gmail.com
It has been said that we cannot really teach language, we can only create conditions in
which it will develop spontaneously in mind in its own way (Gomaa, 2010).Writing is an
intricate and complex task; it is the most difficult of all the language abilities to acquire.
This research paper investigated why English teachers apply blended learning in their
lessons and what are the tools used in their blended learning lessons. In depth interview was
used to collect qualitative data. It discusses the extent to which students were able to
achieve from the intended outcomes and the processes involved in achieving those
outcomes. The study identified eight reasons why English teachers applied blended learning
and identified four tools used by English teachers in their blended learning lessons. This
paper also reports findings from research into the benefits of integrating blended learning
into traditional methods in developing learning abilities for undergraduate students at a
university in Thailand.
Keyword: blended learning, learning abilities, materials online
Conference Topics: Education, Teaching and Learning
165
INTRODUCTION
Technology has changed the development of education tremendously. In this era, technology
and the Internet are slowly taking place in teaching and learning (Stickler et al., 2010). The
use of ICT has shifted teachers from teaching using traditional method towards the
advancement of technology and Internet (Elliot, 2009) due to the demand of technology
knowledge. Teachers are formally and informally networking with other colleague, as they
are aware that technology would enhance their teaching as well as challenge their students in
learning by featuring ICT tools. The tools provide better teaching and learning experiences
(Kose, 2010), which would further enhance teachers-students development in learning using
the latest technologies. Notwithstanding, teachers are starting to apply blended learning (BL)
in their lesson by combining both face-to-face and online learning.
Over the years, the performance in English of students has been very unsatisfactory (Melor &
Nur, 2011). Educationists are looking at many measures to improve students’
performance in English. The use of BL in teaching and learning provides opportunity for
English teachers to improve students’ performance in English. Up to date, most of the
developments of blended learning lessons are based on individual teacher’s understanding of
blended learning and their limited technology skills. Different teachers may blend different
parts of their teaching with technology. To maximize the blended learning in English
Language classroom, teachers need to understand why they apply blended learning and what
are the tools used by English teachers in blended learning (Bijeikiene et al., 2011; Elliot,
2009; Motteram & Leithner, 2009). The tools used by English teachers in blended learning
may help English teachers plan their blended learning lessons (Baltaci-Goktalay, 2010;
Motteram & Leithner, 2009). The study aimed to a) investigate why English teachers apply
blended learning and b) identify the tools used by English teachers in blended learning. The
findings in this study may help English teachers plan their blended learning lessons in future.
Therefore, in the study, the above problems need to be addressed to give English Teachers
some guideline in planning and implementing blended learning.
LITERATURE REVIEWS
Blended learning is an innovative teaching method that offers students with a flexible
teaching environment. According to Reid-Young (undated), blended learning is an
approach to education that offers a learning environment to accompany the teaching
process by adding more innovative modes of assessment. Moreover, the uploaded activities
are varied. Students may get online sessions, they are asked to upload their written
material online in a well-organised way. Rovai and Jordan (2004), noticed that according to
Colis and Moonen (2001) “blended learning is a hybrid of traditional face-to-face and online
learning so that instruction occurs both in the classroom and online, and where the online
component becomes a natural extension of traditional classroom learning”. Some of the
advantages of blended learning include cost-effectiveness for both learners and the
institution. Blended learning makes the online course available to other learners from other
countries. Moreover, the teacher has the flexibility of editing and adapting the online course
material to the needs of the students and course intended learning outcomes. Some of the
disadvantages may include computer and internet accessibility, limited knowledge in the use
of technology, and lack of computer labs on university campus.
166
There are many tools used to create effective blended learning. Higgins and Gomez (2014,
p5) abstracted the recommended tools from Allan (2007, p15-45). They gave five categories
of tools namely technologies used in the classroom such as PowerPoint, interactive
whiteboards and audience response systems, virtual communication tools such as audio files,
discussion boards, e-lists, discussion groups, chat or conferencing, email, news groups,
polling, questionnaires, web forms and videoconferencing; social-networking software such
as instant messaging and phone calls, podcasts, social-networking sites, video clips, virtual
worlds, weblogs and wikis; e-learning systems such as VLEs, conferencing systems, group
collaboration software and group sites and mobile learning using mobile phones, laptops
and tablet PCs.
Educators used blended learning to maximise the advantages of traditional face-to-face

learning and online learning (Wang et al., 2009). To create the best learning model for their
students, different educators blend their lessons for different reasons to create the most
efficient learning environment (Wang et al., 2009). Literature has reported why people used
blended learning. The reasons given were flexibility provided by blended learning
(Aborisade, 2013; Pardo-Gonzalex, 2013), to create interest in study (Adas & Ayda, 2013)
through interesting lesson (Pearcy, 2009), to increase communication (Wang et al., 2009;
Palak & Walls, 2009; Ellis et al., 2006), for social networking (Melor, 2011), to develop
independent learning skills (Aborisade, 2013; Pape, 2010), to increase accessibility of
learning materials (Aborisade, 2013; Filimban, 2008), to support collaboration
(Aborisade,2013; Anderson, 2007; Ellis et al., 2006), to motivate students (Eydelman, 2013;
Leithner, 2009), create a student-centred learning environment (Vernadakis et al., 2011), to
support the existing teaching approaches and to create individually tailored solutions
(Mullamaa, 2010). In addition, studies also found that teachers are using technology to
support student collaboration, project-based learning and problem solving (Ellis et al.,2006)
and to reduce class time (Leithner, 2009; Pape 2010).
METHODOLOGY
This study utilized the qualitative method to explore why English teachers use blended
learning and what are the tools use by them in blended English lessons. Qualitative method
was used because this method allows researcher to explore the interest of the study in a
natural setting.
The population of the study was 12 English teachers teaching English in Faculty of
Humanities and Social Sciences at Prince of Songkla University, Pattani, Thailand. Teachers
were arranged for the interview. In-depth interviews were carried out during the university
session in June until September 2014. The interview protocol was prepared to dissect
teachers’ reasons for blending their lessons and tools they used in blended learning. After
each interview, the data was transcribed and analyzed immediately.
FINDINGS AND DISCUSSION
There were 12 teachers involved in the study. Among them, 7 (58.3.%) were female teachers
and another 5 (41.7%) were male teachers.
All reasons given by English teachers were consistent to the eight themes. The findings of
the study were specifically for English lessons which were different from the literature where
the themes were for any blended learning courses. The tools used by English teachers are
167
summarized in Table 1. The tools used by English teachers are summarized in Table 2. There
were four main categories of tools used by English teachers in blending their English lesson.
For Technologies in the classroom category, only PowerPoint was used. There were three
tools used by English teachers under virtual communication tools through Internet category.
The three tools were audio files, chat and email. Under Social-networking software category,
there were four tools used by English teacher to blend their lesson namely instant messaging,
phone calls, social-networking sites and video clips. There was no e-learning systems tool
used by English teachers. For the last mobile learning category, all the three tools were used
by English teacher. The tools were mobile phones, laptops and tablet PCs. The tools used
were consistent with the tools suggested for blended learning course.
Table 1. Findings on why English teachers use blended learning

No. Themes and reasons No. of teachers Example of assertion from participants
1. communication 10 Sometimes, we email to discuss something with our

colleagues. As teachers, we should communicate with
students after class.
2. create interesting lesson 11 With blended learning, students will not get bored.
3. create a student-centered learning environment 9 Students are finding the information themselves.
4. develop independent learning skills 8 Some of them learn certain skills from the link
we suggested.
5. flexible (learning time and location) 9 Students can find their learning materials anytime
and anywhere.
6. increase accessibility of learning materials 8 Students will benefit from the teaching-learning process if
teacher use technology. We can use the online learning
materials when we need it.
7. reduce class time 8 For good class, we can reduce contact hours because the
students can find the information they need especially if
they work in group.
8. support face-to-face teaching approach 8 With technology in our lesson, it is easy for us to
search for information or ask students to look for
information for their essay or for the new literature
component.
Table 2. The categories and tools use for blended learning
168
The study identified ten reasons why English teachers apply blended learning and eleven
tools use by English teacher in blended their English lessons. The ten reasons and the eleven
tools identified in the study were consistent with literature. The only different of the findings
from literature is the reasons stated in the literature were not solely for English lessons only
but for any blended learning courses. Therefore, the findings from the current study were
contributed to the literature on blended learning especially for blending English lessons.
The data were collected through face-to-face interview and coded according to the theme
identified from the literature. The study only limited to HUSO PSU in Thailand, therefore,
another study can be conducted to a wider population. Beside this, further study can look into
how English teachers carry out their blended learning lesson is needed too.
Brief biography of the author
Fa-ezah Wasoh is an English lecturer at Prince of Songkla Univerisity, Pattani campus. She
received her master degree in Teaching English as a Second Language from International
Islamic University, Malaysia. Her research interests include blended learning, learning
strategies and teaching approaches.
Category Tools No. of teachers Example of assertion from participants
Mobile learning mobilePCs

tablet
laptops phones 10
12
7 Sometimes students texted to ask questions.
I use laptop play CDs/DVDs.
I use tablet to play song.
instantcalls
phone
social-networking
messaging sites 10
7 Students also text me to ask questions.
I call my friends.
As teachers, we should communicate with students
Social-networking after school. Using Facebook is useful.
software video clips 10 When I use Power Point with video clips or songs,
my students will get involve and participate
because they always want to watch video and
listen to song at the time.
When I use Power Point with video clips or songs, my

students will get involve and participate because they
Technologies in the
classroom PowerPoint 10 always want to watch video and listen to song at
the time.
10
9
7 When I use Power Point with video clips or songs,
my students will get involve and participate
Virtual
tools throughInternet
communication audio files
email
chat because they always want to watch video and
listen to song at the time.
Sometimes students chat with me to ask questions.
Sometimes, we email to discuss something with our
colleagues.
169
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A Nigerian case study. In B. Tomlinson & C. Whittaker (Eds.), Blended Learning in English
Language Teaching: Course Design and Implementation. London British Council, UK.
Adas, D., & Bakir, A. (2013). Writing difficulties and new solutions: Blended Learning as an
approach toimprove writing abilities. International Journal of Humanities and Social Science, 3(9),
254-266.
Allan, B. (2007) Blended Learning: Tools for Teaching and Training. London: Facet Publishing.
Anderson, P. (2007). What is Web 2.0? Ideas, technologies and implications for education. JISC
Technology and Standard Watch. Retrieved March 3, 2012 from
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Baltaci-Goktalay, S. & Ozdilek Z. (2010). Pre-service teachers’ perceptions about Web 2.0
technologies. Procedia - Social and Behavioral Science, 2(2), 4737-4741.
Bijeikiene, V., Rasinskiene, S., & Zutkiene. L. (2011). Teacher’s attitude towards the use of blended
learning in general English classroom. Studies About Languages. 18, 122-127.
Colis, B., and Mooner, J. (2001). Flexible Learning in a Digital World: Experiences and Expectations.
London: Kogan page. Elliot, D. (2009). Internet Technologies and Language Teacher Education.
Ellis, A., R., Steed, F., A., & Applebee, C., A. (2006). Teacher conceptions of blended
learning, blended teaching and associations with approaches to design. Australian Journal of
Educational Technology, 22(3), 312-335.
Eydelman, N. (2013). A blended English as a Foreign Language academic writing course. In B. T.

C. Whittaker (Ed.), Blended Learning in English Language Teaching: Course Design and
Implementation. . UK.: London British Council.
Gomaa, L., Writing Trouble Spots for ESL Students of Arabic: The Apple Where Teachers Meet and
Learn 2010.
Higgins, D., & Gomez, A. (2014). Teaching English studies through blended learning. England: The
Higher Education Academy.
Kose, U. (2010). A blended learning model supported with Web 2.0 technologies. Procedia and Social
and Behavioural Sciences, 2, 2794-2802.
Leithner, A. (2009). Review of blended learning: Using technology in and beyond the language
classroom. Language Learning & Technology, 13(1), 33-39.
Melor M.Y; Nur Rashidah K.R. (2011) Motivation and Attitude for Learning English among Year Six
Students in Primary rural school.
Motteram, G., & Sharma, P. (2009). Blending Learning in a Web 2.0 World. International Journal of
Emerging Technologies & Society, 7(2), 83-96.
Mullamaa, K. (2010). ICT in language learning – benefits and methodological implications.

International Education Studies, 3(1), 38-44.
Palak, D. & Walls, T., R. (2009). Teachers’s Belief and Technology Practices: A Mixed methods
Approach. Journal of Research on Technology in Education, 41(4), 417-441.
Pape, L. (2010). Blended Teaching and Learning. American Association of School
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Administrators. Retrieved November 3, 2011 form
http://facultycenter.ischool.syr.edu/files/2012/02/blended-learning-and-teaching.pdf
Pardo-Gonzalez, J. (2013). Incorporating blended learning in an undergraduate English course in

Colombia. In B. Tomlinson & C. Whittaker (Eds.), Blended Learning in English Language
Teaching: Course Design and Implementation. London: British Council, UK.
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blended instruction. University of North Texas. ProQuest Dissertations and Theses, Retrieved
April 3, 2010 from http://search.proquest.com/docview/304963133?accountid =4488.
(304963133).
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Stanojevic, M,M. (2010). Stepping Stones to Teaching Languages with Technologies. Developing
Online Teaching Skills Special Issue, 10(2), 1-4. Retrieved from March 3, 2012.
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English. (2011). The impact of blended and traditional instruction in students’
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171
Brand Success Evaluation
MAIA SETURI
Ivane Javakhishvili Tbilisi State University, Tbilisi, Georgia
Abstract:
It is very important for the company to use the trademark and manage them effectively in the
working conditions on the competitive market. Trademark (Brand) obsesses the consumer's
attention, attracts them and in case of customer’s satisfaction ensures their loyalty. But the brand
can’t be considered in unchanged way, even strong and successful brand is evolving and changes
over the time. The goal of my research was to study customers’ attitude toward "Borjomi" on
Georgian market and to assess the weaknesses, which might be linked to the development of the
brand and its further success’s based on the results of the research. There is not still well developed
and thought the largest importance of branding in the business of companies commercial success,
for example, non-existent work experience of branding in the past.
Keywords:
Trademark, market, brand, brand effectiveness, branding, brand image, marketing, consumer,
loyality, competitive market.
Introduction
It is very important for the company to use the trademark and manage them effectively in the
working conditions on the competitive market. Trademark (Brand) obsesses the consumer's
attention, attracts them and in case of customer’s satisfaction ensures their loyalty. “Consumer
assesses the identical products depending on how it is branded"(1). But the brand can’t be
considered in unchanged way, even strong and successful brand is evolving and changes over the
time. Creating a brand is an important and significant first step towards its successful, hard way.
Research of the issues related to the brand creation and development is one of the actual (urgent)
topics, which is discussed in this paper on the example of Georgian mineral water "Borjomi". The
mineral water market is very important for the great segment of consumers. Variety of age groups
of users drink mineral water. They are used for its healing properties. In January-October 2015,
export of Georgian mineral water compiled approximately 3.7% of the country's total export
volume, which is 66907.1 US dollars. While in the same period of the last year, export of mineral
water was much more, 123800.7 US dollars, which’s 5.1% of the country's total exports (2).
There is not still well developed and thought the largest importance of branding in the business of
companies commercial success. (For example, non-existent work experience of branding in the
past). However it must be noted that the interest is increasing on the above mentioned issue. The
172
goal of research was to study customers’ attitude toward "Borjomi" on Georgian market and to
assess the weaknesses, which might be linked to the development of the brand and its further
success’s based on the results of the research.
The object of the research was Georgian mineral water market, and more specifically the mineral
water users, their attitudes toward the beverages of "Borjomi" brand, also various marketing
aspects related to it.
The subject of the research was theoretical and practical issues of Georgian brand’s marketing
research as Georgian mineral water "Borjomi".
Methods of research. By using of quantitative method of marketing research was conducted

interview based on the questionnaire. 500 respondents were interviewed, questionnaire was
consisted of 16 questions, its format was anonymous. After interview the results of research was
summarized and as a result of performed work in the study, following conclusions are made.
There are used theories of marketing concepts, statistical data, results of the research and
customers’ feedback in the social network.
Knowledge and the way how to put effective methods and approaches of brand management into
the practice during the working conditions of competitive market is very important. The company
needs a continuous work in this direction to achieve positive results, become successful and to
maintain this position. In this regard, the company IDS “Borjomi” pays great attention to the work.
According to the General Director Zaza Kikvidze : "..... brand has been developed: The product has
changed in appearance, packaging has become more modern, it’s premium. But mineral water in
the bottle remained unchanged, as well it’s characterized by its irreplaceable mineral composition
and a special taste "(3).
Brand success is not provided only by its trademark, but it has to pass certain levels. Transition
from the lower level to a higher one indicates greater recognition and success of the brand. In this
process following steps are allocated:
 Brand visibility (cognizance) (lower level);

 Brand effectiveness;
 Brand image (face);
 Brand judgment;
 Customers’ emotions;
 Brand resonance (the highest level) (4).
1. Brand should be visible for customers, which is related to its awareness. According to the
opinion of the scientist K.Kelery: "At the given moment the awareness of the brand appears when
it becomes recognizable for customer. This is related to the buyer's ability to recall previous
relationship with the brand "(5).
173
Georgian company "IDS “Borjomi” Georgia" manufactures and sells “Borjomi” valley sodium
bicarbonate table water with (of) four types of packaging (0,33 - Glass bottles; 0,5 liters - Glass
bottles; 0,5 liters - PET bottles; 1,0 - PET bottles). Brand name of beverage “Borjomi”. Formation
and production of “Borjomi” mineral water occurs on the area of Borjomi - Kharagauli National
Park. Bottling of “Borjomi” mineral water is implemented in “Borjomi” bottling plant N1, which is
near the mine. "Borjomi" is fully compliant with European and Russian quality standards and it’s
exported to more than 40 countries around the world. (6).
"Borjomi" was very well-known and widely recognized brand in the past. The first attempt to bottle
"Borjomi" water was in 1850. Military sick-bays pharmaceutist (apothecary) Zakharov poured
water in 1300 bottles and exported. "Borjomi" was known not only in Georgia, but also in the
former Soviet republics and was highly demanded. In the early 80-ies within the Soviet Union
million half liter bottles were sold daily. "Borjomi" became not only the most popular water, but
also the history of Georgia. For it one of the most attractive market was Russian market, but in
2006, "Rospotrebnadzor" banned the number of Georgian including "Borjomi" on the territory of
Russian federation. In 2013 “Borjomi” has returned to the Russian market since this mineral water
has been officially registered to enter Russian market (7).
Distinctive blue-green color of “Borjomi” bottle is patented and has its own name-Georgian Green.
"Borjomi" is the highly known Georgian mineral water in Georgia. This was confirmed by the
research carried out by me in Tbilisi in March-May 2014. I’ve used questionnaire form. During the
research process I’ve chosen the selection so as to be representative. I’ve interviewed
representatives of different ages, gender, nationalities, from different regions, of different religion,
education, occupation and income, in order the data of mineral water consumption by different
consumer groups have to be credible.
On the question: “Which mark of mineral water do you remember firstly?”- 45% of respondents
named (nominated) “Borjomi”, 24% - “Nabeghlavi”, 14% -“Likani”, 6% - “Bakuriani”, 6% -“Sno”,
5% -“Bakhmaro”. I should also note that some of the respondents could not differentiate the
mineral water from the spring water: “Bakuriani”, “Sno”, “Bakhmaro”. (But I’ve depicted this data
in the diagram below).
174
bakuriani
6% baxmaro
sno
5%
6%
borjomi
likani 45%
14%
nabeglavi
24%
Fig.1. Consumers awareness for mineral waters
Thus, the "Borjomi" is a well-known and visible brand to users and, they freely recall the name and
their previous relationships to this mark.
2. The effectiveness of the brand depends on functional needs of the buyer. These aspects are very
important in the process of creating a brand. Should be defined its distinctive features, which must
have a product. They may contain unique aspects, which makes product even more interesting for
consumers. Reception of mineral water "Borjomi" is very useful for people who has diabetes,
diseases of joints and connective tissue, also during the low-calorie diets. "Borjomi" mineral water
is recommended for chronic gastritis, Stomach and duodenal ulcer, liver diseases and diseases of
the tract, gallbladder stones, inflammation and respiratory diseases of urinary tract. Ions of iodine
and fluorine which are in mineral water reduces the risk of caries (8). The healing properties of
“Borjomi” contributes its competitiveness on the marketplace. There is given its Ingredients on the
label and also is a list of diseases, which can be treated by this mineral water, in order to promote
the progress of the product. Thus, the "Borjomi" fully satisfies functional requirements and
therefore can be considered as an effective brand.
3. The image of the brand emerges by the psychological satisfaction of the buyer. The brand image
is created by the marketing program, that connects a nice,strong and unique associations to the
brand. In consumer’s awareness these associations is controlled on the basis of personal
experience, according to information received on the brand, the brand identification to the specific
company, people, events, country. Therefore, in this case effectively prepared advertisements and
PR events can perform the great role. The brand image has two aspects in accordance with the
following two questions:
1. How do you want people to perceive and get your brand?
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2. What is the customer's perception of your brand currently?
This depends not only on what people see, but also what they think and feel. The eyes and the mind
create a lot of impressions, including past and present, real and imaginary, rational and emotional.
The brand image is what is physically presents in front of the buyer and how it is perceived by
sensory organs, what is happening in the mind after receiving this information.
"Borjomi," It's kind of a tradition and is the name connected to Georgia, which comes from the past
to the present. In "Borjomi" ads main focus is on:
 Its favorable action on human health, the advertising slogan is: “Release from unnecessary”
 Mark "Borjomi" is related to the homeland, Georgia, which refers to advertising slogans:
"Always love the motherland" and "Borjomi" - my water. "
Such marketing programs that can connect pleasant and strong associations with the brand, can
play a key role in creating brand image of “Borjomi”. In consumer’s awareness strengthen of
these associations are contributed by all information on the brand "Borjomi", its connection with
the producing countries, to the company, people, events. Therefore, PR activities can play a large
role. Special events are held in order to create positive public opinion by the "IDS Borjomi”
Georgia". So, for example, he is a partner of the National Basketball Team. President of the
Basketball Federation B. Liparteliani said: "The players live a healthy lifestyle and that's why they
always choose" Borjomi ".We are very happy and proud that the Georgian brand is represented in
all the countries where our team is holding meetings "(9).
"Borjomi" is not the only Georgian brand on Georgian mineral water market. It competes with
other trademarks: "Nabeglavi", "Sairme", "Likani", "Mitarbi", "Vazha source", "Lugela", "Skuri",
"Utsera", "Kazbegi" and others (during the research period "Mitarbi" began to enter the market,
therefore it not included in the research results).
4. Discussion of the brand is based on consumers' opinions,beliefs to study it I’ve conducted

market research in March-May 2014. On the question: which mineral water is preferable,
respondents answered as follows:
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Likani
Borjomi
24%
29%
Nabeglavi
47%
Fig.2.Consumer"s references
Thus, only 29% of respondents named the “Borjomi”, 24% of them _” Likani”, while 46% named
the “Nabeghlavi”. Thus, even though the “Borjomi” is characterized by a higher awareness than
other marks, the most of the consumers prefer to buy “Nabeglavi”. In this regard, “Nabeglavi” is 17
items higher compared to “Borjomi”. It should be noted that the respondents who have named other
beverages (not Borjomi), they do not “Borjomi”.
When asked why do they buy “Borjomi” mineral water, consumers of “Borjomi”, indicated to
following characteristics and properties of the drink: trust to the “Borjomi “ mark and its
experience, high quality, useful properties for the human organism, mineral properties, better
features than other similar drinks.
On the question buying or not one and the same drink, loyal customers of ”Borjomi” turned to the
respondents 5%, which only this brand drinks and buy, respondents 7% prefers to get two marks _
“Likani” and “Borjomi” in other words, they sometimes buy “Likani“ and sometimes “Borjomi”;
5% of the customers make choice between three marks (“Borjomi”, “Likani” and “Nabeghlavi”).
Thus, unconditional devotion towards “Borjomi” showed 5% of Buyers, partial devotion _12% of
Buyers.
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Borjomi loyal customers Borjomi partially loyal customers
Users who do not show loyalty
5%
12%
83%
Fig. 3.Customer loiality towards Borjomi
When asked how often do they buy and consume soda mineral water “Borjomi”, “Borjomi“
buyers answers were as follows: 9% of consumers drink it every day, 33% - twice or three times
a week, 17% -once a week, only 8% drinks it only in the party, 33% - rarely.
every day two or three times a week once a week mainly party rarely
9%
33%
33%
8%
17%
Fig. 4. Borjomi frequency of buying and use
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4. Brand emotions are forming by the influence of consumers’ emotional reactions. Consumers’
emotions towards “Borjomi” - to find out this aspect I paid attention to the results of my research.
According to the research revealed that buyers of "Borjomi" mineral water give high points to this
drink because of the number of reasons:
 They believe that the "Borjomi" is rich with minerals;

 It has a price acceptable to the buyer;
 Is characterized by good packaging;
 Has a high degree of manufacturing;
 The price and quality are appropriate;
 The mineral water has a long history, and has been on the market for a long time;
 This product is represented in many countries,
 “Borjomi” a reliable product.
5. Brand resonance is based on the customer’s relations to the brand. Trust, mutual respect,
consistency, the company's commitment to the principles, fulfillment of its promises is in the base
of these relationships. For this I have analyzed the responses in the social network about “Borjomi”
(10). I’ve paid attention as to the positive feedback, so the remarks and negative statements, which
were spoken in the social network by people. Among them it is very important thing that some
people are surprised regarding the fact that the “Borjomi” is really just good and useful only on
hangover or excessive eating. There is also, users hints whether “Borjomi” is soda water? The
representative of “Borjomi” on Facebook responds that waters of medium and high mineralization
are characterized by a specific taste and therefore is "Borjomi". It also must be noted that when
analyzing the customer’s feedback in social network I’ve noticed that Georgian customers expect
more charity from “Borjomi”(11). It is not a problem for the company, because it successfully
implements this direction in the politics of its second brand "Likani”.
Conclusion
Thus, the marketing approaches of Georgian mineral water "Borjomi" is characterized by a number
of shortcomings:
 Users of this drink often connect it with the fact that drinking it on the great hangover
gets a sense of lightness. This is because the position of “Borjomi” is conducted only to
this direction.
 The research has revealed that despite of the highest awareness of “Borjomi”,
"Nabeglavi" has advantages on the market in the direction of sales. This requires the
proper attention from "Borjomi";
 One shortcoming in management of "Borjomi" brand, in our opinion, is company's work
through the line of the public relations. It is a weakness for the company in the
competitive environment;
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 The company does not pay enough attention to the fact that the image of the firm's top
officials make the positive effect on the brand’s image. Also, the brand connection with
the companies, and variety of events. Proper presentation is needed to (before) the
society;
 The company makes a mistake, when it does not pay proper attention to negative
information about its mineral water and the consumers’ doubt, that it might be soda
water.
Georgian mineral water "Borjomi", as a brand, the analysis allows us to conclude that:
 To our mind, in "Borjomi" position should be emphasized its positive impact on the
medical point of view and not only its lightness effect on hangover. Therefore,
“Borjomi” has to increase customer awareness toward its benefits. And this should be
done by the support of strongest arguments;
 “Borjomi" has to pay more attention to study its competitors' strategies on the market
and to confront them with the proper marketing activities;
 "Borjomi" somewhat has to strengthen its work through the public relations line, also
has to select and use the best methods in this regard, in order to enhance the public's
favor, trust, public confidence towards this brand and the company;
 Borjomi manufacturer should pay attention to the analysis of various factors on the
brand image, including the fact that people often connect brand to the producing
company and variety of events. Therefore will be necessary continuous work towards
Borjomi to study the public opinion;
 The company should carry out some propaganda activities, in order to finally eliminate
connection between this water and soda water from human’s side.
References
1. Philip Kotler, Kevin Lane Keller, Marketing management, 14-th ed., Prentice Hall, p.
242. ISBN 978-0-13-210292-6
2. National Statistics Office of Georgia, External Merchandise Trade of Georgia in
January-October 2015. http://geostat.ge/
3. Возвращение минеральной воды"Боржоми" на российский рынок, in Russion,
http://ids-borjomi.ru/ru/press-center/news/sect1/266/
4. Филип Котлер, Вальдемар Пферч. Бренд –менеджмент в В2В сфере, Пер с англ,
С.-пб. издателство “ВЕРШИНА”, in Russion, 2007, p.221
5. Филип Котлер, Вальдемар Пферч. Бренд –менеджмент в В2В сфере, Пер с англ,
С.-пб. издателство “ВЕРШИНА”, in Russion, 2007, p.222
6. Borjomi mineral water of volcanic origin, Borjomi Georgia,
http://www.borjomi.com/ge
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7. Минеральная вода «Боржоми» вновь на российском рынке, in Russion, pro 100
news.info/biznes, 11 - Апр – 2013, http://pro100news.info/category/biznes
8. Volcanic spring of Borjomi, http://www.borjomi.com/int_en/water/origin.php
9. http://www.borjomi.com/ge
10. https://ka-ge.facebook.com/borjomi
11. https://ka-ge.facebook.com/borjomi
Contact data:
Maia Seturi,
Ivane Javakhishvili Tbilisi State University, 0179, Tbilisi, Georgia,
maia.seturi@gmail.com
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The role of ‘Adat’ in Malay Muslim society in southern border
provinces of Thailand.
Muhammadrorfee-E Musor
Dept. of Social Sciences,
Faculty of Humanities and Social Sciences,

Prince of Songkla University, Pattani Campus
A.Muang CH.Pattani 94000
E-mail: muhammadrorfi-ee.m@psu.ac.th
Abstract: This study attempts to explore the concept of ‘Adat’ (a word borrowed from
Arabic) which can be seen as norm in Malay Muslim minority in southern border provinces
of Thailand in southern border provinces of Thailand. In this incident research is a
participatory research, which used qualitative methods and case studies in collecting data and
explaining the social-functional structure of the Muslim community. The study found that the
current Malay Muslim society is governed by ‘adat’ and Muslim law in addition to the
general law is applicable to all communities. ‘Adat’ as norm in Malay society, being the
living law at a certain time in a certain place, adat is elastic and adaptable to social needs and
as such not suitable for codification. The primary purpose of adat is threefold the protection,
regulation and preservation of the society.
Keywords: Malay Muslim society; Adat; law and society
Paper present at The 6th Multidisciplinary Academic Conference in Prague 2016, Czech
Republic (The 6th MAC 2016).
Conference Topics: Education, Teaching and Learning (Indigenous and Diversity Issues)
1. Introduction
Thailand is a culturally diverse country. Among these diversity, the Malay Muslim in
southern border provinces of Thailand where is Narathiwat, Pattani and Yala provinces be
part of that. The population in this three provinces is approximately 1.8 million, of whom
about 80 per cent are Malay Muslims. Many speak the Patani Malay dialect, known in Thai
as Yawi. They have their own traditional way which is sometime contrast with Thai’s
tradition especially the Islamic values which is play very important roles within their
communities. Moreover, the traditional social structure of Malay Muslim communities also
influencing by the Islamic values especially, the way that Malay Muslim govern their
community. However, Malay Muslim in southern border province of Thailand have a very
interesting historical back ground. Especially, before Islam enter to this area. The customary
norm of local people call ‘adat’ has been played important role in their daily life. Therefore,
it is very interesting to study how important of ‘adat’ play in Malay Muslim communities and
how dose it work in practice.
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2. Methodology
This qualitative study relies on both documentary analysis and a case study analysis. For the
documentary analysis, both primary and secondary data are used. All documents reviewed are
in the English, Thai and Malay language. Primary documentary data comprises of documents
produced by Thai government agencies such as Ministry of Justice, The Southern Border
Provinces Administrative Center. Secondary documentary data draws upon books, journal
articles, conference papers and proceedings, and articles from magazines, newspapers, and
websites about Malay Muslim communities in southern Thailand.
A case study analysis relies on participation observation in order to directly observe a
variety of activities in order to understand the role of adat which playing in Malay Muslim
communities. However, case study research does not rely on a single source of data but
gathers multiple sources of information through observation, interviews, audiovisual material,
documents and reports as they build an in depth picture of their case (s) (Creswell, 1998:39).
Therefore, semi-structured interviews was taken in this research because interviews with
opened questions allowed interviewees more freedom to answer in their own time using their
own words. An interview situation also allowed for flexibility in sequencing and asking
additional questions based on interviewees responses on sight spontaneously. The twenty
informants were chosen to be interviewees which can be categorized as follows: leader group
(religious leader in Pattani; village headman in Pattani; and village representative in Pattani)
and 14 individuals at the grassroots level. Informant were chosen strategically and include
both those who practice and/or are involved with community activities in some way as well
as those who not practice and/or are not involved at all with community activities.
3. How important of ’Adat’ play in Malay Muslim society?
As Muhammadrorfee-e Musor (2013; Azman bin Abu Hassan, 2010) considered Malay
Muslim are governed by adat (custom) and Islamic law. He described that adat in general
means a right to conduct and in common usage, it stands for a variety of things all connected
with proper social behavior and culture. Moreover, he also remain that adat being the living
law at a certain time in a certain place, adat is elastic and adaptable to social needs and as
such not suitable for codification. As being defined by its common usage ’adat’ will connote
a code of behavior and social etiquette governing the Malay Muslim communities. Hence,
‘adat’ can be seen as the way of life and the identity of the Malays itself. However, when
Islam came in to this area the Islamic values has been playing very important role to Malay
Muslim’s ways of life so that ‘adat’ often understandable as things based on provision of
Islam and good Muslims should follow it.
R.H.Hickling (2001) state that the significance of ’adat’ in the Malay society we can
see from the Malay proverb, biar mati anak, jangan mati adat, better the child dies, rather
than the custom. This reflects the fact that the Malay people are more willing to lose the most
beloved child than willing to violate traditional practices. The reversal is significant,
reflecting as it does a popular shift in values, not only in relation to the position of the
individual in society, but in relation to the authority of custom itself. The maxims of Malay
life are more important than the maxims of equity in English law. Kecil di kandung ibu, besar
dikandung adat, mati dikandung tanah, when young we are embraced by our mother, when
adult by custom, when dead by the earth, such is the traditional view of the villager’s life.
However, the proverb of modern version is said to be, biar mati adat, jangan mati anak; let
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the custom die, rather than the child, reflects that increasing recognition of the importance of
the individual and the fundamental liberties of citizens and others are set down. Just as oral
proverbs embody the adat, so now does writing embody much of the law; and as society
develops, adat withers, to be replaced by other fashions of thought, other pressures on
behavior
The value of adat lies, then, in its early vitality as living law. It belongs to, is part of
the society in and for which it has been created, and that society remains alive and active,
changing as necessary with the need of that society. Custom grows out of, and is shaped by,
the habits of society, it necessarily reflects the way of life of the community within which it
operates. Where a custom expresses a particular belief, and the reason for holding that belief
has gone, then the custom will disappear. In this fashion R.H. Hickling (2001) stated that the
pressures of education, the influence of radio, television and the printed word, and the
development of a kind of world culture based on a common diet of television series and
newspaper features, videotapes, VCD, DVD and other fast foods, are bringing about a
revolution in which local and national customs and boundaries are ceasing to retain their old
significance.
4. ‘Adat’ in Practice.
In order to see how is adat work in practice, the following part going to present about the
example of community justice in Malay Muslim context which can be seen as one kind of
‘adat’. The purpose of adat in form of community justice is to protect community from
conflict among community member and bringing peaceful back to community.
According to community justice process within Malay Muslim communities, the study
found that the Malay Muslim communities has been using the process called ‘Musha Warah’.
This process refer to a group of people gathered to give advice on various activities of
Muslims in order to find a way to perform an activity or the solution for various activities
within community. It also be the process that everyone must come together to think and solve
problems on the basis of the provisions of Islam. Moreover, these process also play important
role in order to solve conflict that arise within village. This process can be seen as justice
administration in the village level. When it come to the procedural of justice administration
by using ‘Musha Waraah’ process in Malay Muslim communities can be summarized the
pattern as follow: 1) When the conflict occur in the village, whether a matter of theft,
property and inheritance conflict, or a family cases, etc. the cases will be sent to religious
leader who is a leader of that village. A person who sent the cases can be victim or parties.
However, in some cases village headman will handle in a primary; 2) after religious leader
acknowledged the cases he will rise the cases to consult in the Community Advisory Council;
3) the Community Advisory Council will call related parties into ‘Musha Warah’ process; 4)
run on ‘Musha Warah’ process, people who will participate in this process including victim,
offender or if offender is a child or youth a parent of them will also participate, and advisor
who is from the Community Advisory Council at least one person. During ‘Musha Warah’
process if all parties can make agreement, the cases will be solve in this process; 5) in some
cases, the parties cannot make agreement so that cases will be forwarded to relevant agencies
for instant, cases related with criminal law whether theft, assault, etc. this cases will be
forwarded to police to handle it; 6) if the conflict issues related to property and inheritance
which is associated with Islamic family law and the parties cannot make agreement on
‘Musha Warah’ process, the cases will be forward to the Provincial Islamic Council and this
can be seen as appeal process for parties who dissatisfaction with agreement on the ‘Musha
Warah’ process; 7) after the Provincial Islamic Council received the conflict issues, they will
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call stakeholder and all parties to proceeding in order to investigate on that matter. If all
parties can make agreement, the cases will be terminated in this process; and 8) if the parties
are not satisfied with an agreement of the Provincial Islamic Council, then cases will be
forwarded to court.
The community justice in Malay Muslim communities focus on reconciliation by
encourage parties to terminate the cases within community under the villages rules.
Moreover, the reconciliation process in Malay Muslim communities in southern Thailand
seem to be the process that community member find it easy to access to justice by this
informal process. However, the problem of this process arising when conflict parties do not
follow an agreement for reconciliation, especially in a case of divorce due to Islamic law
concerning family and inheritance has been implementing within the villages. The Islamic
law is not associate with the state or territorial power; nor is it the law of general application.
The rules of Islamic law are local, non-literary and non-textual. The substantive content of
the rules was provable by evidence of local practice given by religious leader or Islamic
scholar which they may interpreted the law on different knowledge background. Therefore,
the Islamic law was limited only within the villages and no institution responsible for
enforcing this law so that it facing with a problem if parties do not follow an agreement
which has been made during the reconciliation process.
5. Conclusion
The Islamic law has been implemented and changed the local people’s beliefs. Malay
customary law is a mixture of Malay customs and Islamic law, the principles of Islamic law
only being adopted to the extent that such principles were consistent with Malay customary
law. Adat aimed at harmony; indeed, a proverb asserts, truly enough, that adat sentosa di
dalam negeri, with adat there is peace in the land. The primary purpose of adat is threefold,
the protection, regulation and preservation of society (R.H.Hickling, 2001)
The obvious example is the administration of justice, under traditional Malay system,
every issues is required to consult in the Community Advisory Council or ‘Shura council’ in
order to comply with the provisions which is based on the principles of religion, culture.
Therefore, this council play very important role in the procedural of activities in Malay
Muslim communities including community justice procedure, especially this committee
regulate the rules for that process which all community member have to get involve or
participate in that activities. This council discussed in various issues that perform within
community. They decide on public issues in the community by using the village rules and
doctrines of religion. The main aim of that process is to enhance solidarity and security
amongst local populations.
6. Brief biography of author.

Muhammadrorfee-E Musor is a lecturer at Faculty of Humanities and Social Sciences in
Prince of Songkla University, Thailand. He is Ph.D. candidate in Sociology of law, Lund
University, Sweden. He received master degrees in Sociology from Chulalongkorn
University, Bangkok, Thailand. His bachelor degree from Chiang Mai University, Thailand.
His main research interest is in Criminology, Community Justice, Sociology of law. He has
presented his work in journal and at several international conferences.
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7. References
Anwarul Yagin. 1997. Law and Society in Malaysia. Kuala Lumpur: International law book
Services.
R.H.Hickling. 2001. Malaysian Law: An introduction to the concept of law in Malaysia.
Selangor: Pelanduk Publication(M) Sdn Bhd.
Salim Ali Farrar. 2008. The criminal Process in Malaysia: cases and material. Selangor:
Peason Malaysia Sdn.Bhd.
Wu Min Aun. 1990. The Malaysian Legal System.Selangor Darul Ehsan: Longman Malaysia
Sdn.Bnd.
Muhammadrorfee-E Musor. 2013. The Roots of Law in Malay Muslim Society. Journal of
Sociological Research. Vol. 4, No. 1
Musor M. 2006. “Restorative Justice and Conflict Management in A Muslim Community.”
paper presented at the 3rd National Symposium of Sociology, organized by National
Research Council of Thailand on December 15-16, 2006 at Bangkok, Thailand.
R.H.Hickling. 2001. Malaysian Law: An introduction to the concept of law in Malaysia.
Selangor: Pelanduk Publication(M) Sdn Bhd.
Wu Min Aun. 1990. The Malaysian Legal System.Selangor Darul Ehsan: Longman Malaysia
Sdn.Bnd.
186
The Comparison of Pronunciation in English with Thai, Malay and Arabic by Minority
Malay Muslims in Thailand
Bordin Waelateh, Ed.D.

Faculty of Humanities and Social Sciences
bordin.psu@gmail.com
Abstract
In studying foreign language, pronunciation is one of the factors in getting a message
across. The English sound system is different from that in Thai and other foreign languages.
The purpose of this study was to examine the sounds of English that are available and
unavailable in Thai, Pattani Malay, Standard Malay, and Arabic. The study also intended to
explore some problems with pronunciation and the cause of these pronunciation problems of
English among Malay-Muslim students who was born and has been living in the three border
provinces of Thailand, namely, Pattani, Yala, and Narathiwat.
It was found that there are eight alphabet sounds in English that are not in the Thai
sound system. They are /g/, /dʒ/, /v/, /θ/, /ð/, /z/, /ʃ/, and /ʒ/. However, these sounds are
available in Pattani Malay, Standard Malay, or Arabic. There was a strong influence on Thai
language, a national language of Thailand, upon their English pronunciation. The students
who had a multiple language background did not link or use the existing sound systems in
Pattani Malay, Standard Malay, or Arabic. They preferred to transcribe English sounds by
using Thai scripts rather than using phonetic symbols.
Key words:
Pronunciation, Malay Muslim, EFL
Introduction
Statement of the Problem

When children begin to learn something new, they will make use of their knowledge
related to the thing to be learnt. For instance, when they study biology, they would rely on the
knowledge about animals, birds, fish, insects, trees, flowers and all other living things they
have already known to understand the key concepts in the field of biology or they relate the
new words with the existing knowledge or schemata. Additionally, basic arithmetic in daily
life, such as counting, calculating tax rates and making a time table will be helpful when
children need to understand more complex notions in mathematics. In case of foreign
language learning, the kind of existing knowledge which the learners can be relied on is their
native language or mother tongue language as they are very familiar with it.
When born, infant have the entire range of human language possibilities available to
them. Which language(s) they acquire depends on the languages to which they are exposed
on a regular basis. Foreign languages can be learnt intuitively by children, at least up to a
certain age, if they are put in an environment in which it is necessary for them to acquire
proficiency in foreign languages (MacNeilage and Davis, 2000). The age at which this
critical period is supposed to occur is one of several points debated by those interested in
language. However, this learning can often be observed among immigrant children.
Immigrants may share neighbourhoods with natives, international business people may spend
months abroad, refugees may seek an escape from the war in their own countries. The need to
communicate in a new ecological system often makes it necessary to acquire a second
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language or to become bilingual. It also can be observed that immigrant children are able to
acquire a foreign language (or more) without being affected by their own mother tongue.
It must be stressed that, in order to this quasi-automatic foreign language acquisition
to happen, children must be placed in a specific environment where they need to learn a
foreign language. An easily identifiable ecological factor that influences second language
acquisition is the learning context itself. Natural settings and educational settings have been
discussed by sociolinguists, where natural settings might include learning a second language
as a native language while living in the a country -- a setting familiar to most immigrants.
Education settings, on the other hand, are those in which formal second language instruction
takes place (Altarriba, J. 2000). When learning a foreign language in school or university, the
learning process happens through educational settings rather than natural one.
Basically, a foreign language is governed by systems which are different from those
of the first language. Nonetheless, some foreign languages are closely related to the learners’
native language, and in such cases the learners can fully make use of their existing
knowledge. For instance, Thai people find the tonal system in Chinese not very difficult
because Thai also has the tone system, though the variations of tones used in these two
languages are not exactly the same. Chinese students find the writing system in Japanese,
especially the kanji scripts (the letters borrowed from Chinese) easily, because they have
already learnt thousands of Chinese letters. Japanese find it very easy to learn the word order
of Korean because these two language shares most sentence structures. Based on the
examples above, it is obvious that some of the features in one language can be utilized in
learning other foreign languages.
Unsuccessful English Teaching/Learning in Thailand
English is one of the compulsory courses in the Thai educational system from the primary
level up to university education. It is commonly used in academic and business arenas
(Kaewsanchai, 1988). By the end of 2015, all ten Southeast Asian nations will emerge as an
ASEAN Economic Community or AEC which is a mutual agreement of its members. As
there are many languages spoken by ASEAN residents, it is adopted English as a working
language. It means that the medium of communication among ASEAN people is English
regardless what native language they hold. Thailand is one of the ASEAN member countries
which adopted English as an international language. It is by any means that English plays a
crucial role in this region and also in the wider world. This international language is also
regarded as a key to success in education as well as in the profession. In a labor force market,
graduates with high proficiency in using English tend to find a better job with a better salary
than those who have limited or no proficiency (Mackenzie, 2002, Raksaphet, 1991).
However, many researchers have found that the general acquisition of English among Thai
people, including those who graduated from university, is at a relatively low level, although
they have spent many years in learning English since primary school. As a result, they
encounter problems when entering a workplace where English is mainly used as the means of
communication, negotiation, and execution of transactions (Srisa-an, 1990; Prapaisit, 2003;
Vanichakorn, 2003; Wiriyachitra, 2001).
Thai Students’ Achievement in English Language Testing Systems
The poor achievement of Thai students can also be observed via the reports issued by
the organizers of well-known English testing systems, such as the TOEFL or the IELTS.
According to ‘Test and Score Data Summary for TOEFL Internet-based and Paper
based Testes’ (ETS, 2000), the average score for the exam takers from Thailand is 74 out of
120. Among the ASEAN countries, Thailand’s score is only better than that of Cambodia
(68), Laos (60) and Vietnam (70). More alarmingly, the speaking skill of the TOEFL exam
takers from Thailand is among the worst in Asia. Thailand is among a few countries in Asia
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whose score in the speaking skill is less than 18 out of 30 points. The other countries are
Cambodia (18), Japan (16), Laos (17) and Vietnam (17).
The latest exam report of the IELTS (from www.ielts.org) also shows the same
tendency. The score from the Thai exam takers is relatively low, and they show weakness in
the speaking skills. Among the 40 countries, the overall band score of Thailand is 5.78 out of
9, or at the 25th in the ranking. But when it comes to the speaking skills (with the band score
of 5.72), the ranking of Thailand goes down to the 30th.
Based on the above data, one may assume that the performance of the exam takers
from Thailand in the international English testing systems is still at a relatively low level.
Their speaking skill of English is very limited.
In recent years, the newsletters of the Registrar Office of Prince of Songkla University
(PSU) Pattani Campus (2006, 2007, 2008, 2009) have shown that the students’ achievement
in English learning is highly unsatisfied. Moreover, according to surveys conducted by the
Planning Division of PSU about the perception of employers who employed graduates from
PSU both in the government and private sectors, it was found that the employers were not
satisfied with the performance of English, especially in speaking and listening skills (PSU,
2003, 2004, 2005).
The research findings mentioned above indicate that most PSU students and graduates have
relatively low levels of proficiency in English, in spite of their formal learning experience of
the language for a long period of time. One of the most serious problems is their lack of the
communication skills in English, especially their incorrect pronunciation of English language
sounds.
Language Learning and Interlanguage Formation
One of the reasons of this learning problem is the differences of language system
between Thai and English. These two languages are very different from each other in every
aspect, including the writing, the grammar and the sound systems.
In foreign language learning, the language we learn is called the target language. In
the case mentioned above, the target language is English. The students do not speak the target
language at once. Instead, they begin with a form of language called interlanguage. This is a
mixture of the mother tongue and the foreign language they are learning (Krashen, 2009).
They gradually start forming a sentence in their mother language and the sentence is literally
translated into the target language. At earlier stages, it is strongly influenced by the mother
tongue, and gradually it will become more and more like the target language. For instance,
what it is called an ‘accent’ is the trait of pronunciation in a mother tongue found in the
interlanguage in the learning process. During the first period of foreign language learning, the
pronunciation of foreign language is full of accents and sounds more like one’s own language
rather than the foreign language. In the case of Thai students, their English is full of Thai
accents when they speak. The influence of mother tongue on the sound is decreasing as they
are in the process of learning, and eventually some learners can pronounce the target
language almost like the native speakers if they learnt attentively and systematically. The
relationship between the mother tongue and its influence on interlanguage following the
passage of time is described in the chart below.
Chart I: Influence of Mother Tongue on Interlanguage

Influence of Mother Tongue
Tongue
Mother Target
Interlanguage Language
Passage of Time
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Problems Found in English Pronunciation of Thai Students
English has a very different sound system from Thai. From our observations, Thai
students have a lot of difficulties in the acquisition of the English sound system and many of
them, unfortunately, fail to do so. As a consequence, even after diligently studying English
for a long period of time, they still cannot communicate functionally with other speakers of
English. The problems are not only the grammar system and vocabulary usage only but also
the word pronouncing.
There are plenty of problems in the pronunciation of English by Thai students. These
problems can be divided into five main categories, as follows:
1. stress
2. vowels
3. consonants
4. Additional unnecessary vowels
5. Additional unnecessary consonants
1. Stress
Based on our observation in teaching English and speaking English with the learners
of English in the campus of PSU, when Thai students pronounce long English words,
especially words of more than one syllables, they tend to put stress in a wrong position,
especially in the last syllable, although the amount of long English words with its stress in the
final syllable is relatively few. They tend to put stress on the last syllable. For example, the
accent of the word ‘furniture’ is stressed on the last syllable, and so is the stress of the word
‘organization’. For the native speakers of English, stress is one of the important phonetic
components for listeners to understand what is referred to in the conversation. Therefore, if
Thai students pronounce an English word with a wrong stress, the listeners tend to fail to
grasp what Thai students are trying to say. This could result in a breakdown in
communication.
2. Vowel
Practically, it is not necessary to pronounce a foreign language exactly as it is
pronounced by native speakers. Using context can hint the meaning of the pronounced words.
The learners of English can make use of the sound system which they already know or they
associate with their first language. In case of simple English vowels, Thai students do not
encounter with serious problems.
However, English has a lot of diphthongs, which are very difficult to pronounce for
Thai students. Also, English vowels are pronounced differently. For example, the vowel of /a/
in ‘car’ and ‘laugh’ is pronounced in a different way. In the case of diphthongs, when Thai
students pronounce English, some diphthongs are replaced with a simple long vowel. For
instance ‘so’ and ‘go’ is pronounced as /go:/ or /so:/ rather than /seu/ or /geu/. ‘Take’ and
‘make’ tend to be pronounced as /te:k/ and /me:k/, neither /teik/ nor /meik/. These
replacements, however, do not cause serious problems in communication. But when it comes
to the pronunciation of the diphthong /ue/ like in ‘pure’, (pronounced as two separate vowels
/piau-we:/), or ‘sure’ (replaced with /tSua/), these words do not sound like the original words.
3. Consonants
The problem of the pronunciation of English consonants can be seen in two different
aspects. The first is in the primary consonants which are absent in Thai, such as /g/, /dZ/, /v/
and /z/. Thai students tend to replace these sounds with similar or unvoiced versions of the
sound, i.e. /k/, /c/, /w/ and /s/. This causes a lot of difficulty for listeners to understand what
they mean.
The second problem concerning the pronunciation of English consonants among Thai
students is their tendency to ‘swallow’ the final consonant of the syllable. This causes
difficulties for listeners to understand what they are trying to communicate. A lot of
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consonants after diphthongs just disappear, like the case of the words ‘white’, ‘think’,
‘science’, respectively pronounced as /wai/, /tin/ and /sai/. This applies to proper nouns as
well. So, for instance, ‘I think Charles Darwin is a great scientist.’ will be pronounced as /ai
tin tSa: da:win is e kre:t sai-tit/. It goes without saying that most native speakers of English
would not understand who is meant by this sentence.
4. Additional unnecessary vowels
There is one more kind of mistakes commonly made by Thai students in English
pronunciation. Because of the difficulty in pronouncing some consonant clusters, they tend to
put a vowel, especially /a/ between the two consonants which is supposed to be pronounced
as a cluster, such as in ‘sports’, ‘style’ and ‘twenty. The pronunciation will become /sapo:t/
(without /s/), /satai/ (without the final /l/) and /tawenti:/(with the accent in the last syllable).
This tendency causes these words no longer sound like English words or it may convey
different meaning. In the worse case, listeners cannot guess the meaning.
5. Additional unnecessary consonants

Not only are vowels added to an unnecessary part, but consonants also inserted into
some places where they actually does not exist. This phenomenon happens in the middle of
the words before certain consonants, such as ‘happy’, ‘double’, and present participle like
‘chatting’, ‘shopping’ and so on. However, there seem no specific rules for this kind of
additional sounds to happen. It can be said that when Thai speakers find certain English
words hard to pronounce, they would add an extra consonants in them. Apart from this, some
English words which are already borrowed in Thai either formally or informally also have
this tendency, such as ‘summer’, ‘dinner’ and so on.
The additional consonant itself does not cause a serious sound change in the English
words. The more serious problem is that after this unnecessarily consonant is added, it
followed that the position of the accent inevitably shifts to the syllable immediately after the
consonant, which, in most cases, is the last syllable. This shift, in turn, causes the first
problem of the wrong stress mentioned in this section.
The problem of the Interlanguage formation in English learning among
Malay Muslim Students
The Muslims from three southern border provinces, namely, Pattani, Yala, and
Narathiwat, and some districts of Songkhla Province, have different sociolinguistic and
cultural as well as religious backgrounds from those of the majority of Thai students. This is
because Malay Muslims are exposed to more languages than their Thai-Buddhist fellows. In
general, the sociolinguistic background of Thai-Buddhists is not very complicated. Their
mother tongue is Thai, either in a standard form or local varieties. In the case of Malay
Muslims community, beside Thai as a national language and the second language for them,
they use Pattani Malay to communicate with their family members and with neighbours. As
they are Muslim, reading Al-Quran is an obligation for the followers of Islam. As Al-Quran
is in Arabic, it is by all means that a Muslim needs to study the basic knowledge of Arabic, at
least on how to articulate Arabic words. Studying Al-Quran is not enough to be a good
Muslim. It is a common practice that most Muslim children attend a religious school attached
to mosques. Here, the medium of instruction is not Thai or Arabic, but it is in standard Malay
or Bahasa Malaysia. In a formal school education, they are exposed to English since
relatively early stage, from a primary to university level. In short, Malay Muslims who reside
in the three border provinces of Thailand are multilingual, being able to speak Pattani Malay,
Arabic, Standard Malay, Thai, and English. The relation among their mother tongue, English
as a foreign language and the interlanguage can be described in the chart below.
Chart II Interlanguage formation of Thai Students in English learning
191
Influence of Thai
Tongue
Mother
Thai - Target
- English
Passage of Time
Compared to this rather simple sociolinguistic background, Malay Muslim students

have much more complicated, multi-lingual background. Ethnically speaking, they are
categorized as Malay and have their own language, which is a local variety (dialect) of
Malay. This language is their mother tongue, and used in their daily life and daily
communication, especially in the rural areas.
Apart from this local variety of Malay, most Malay Muslims are also exposed to
standard Malay, at least to some extent, during their religious education. Although many of
them do not have an effective command of the language, especially in speaking and writing,
in general, they can generally understand what is said and written in standard Malay at a
certain level.
They also have another kind of special linguistic ability of pronouncing Arabic
correctly, in order to recite Al-Quran in proper pronunciation and to perform their religious
duty, especially the five compulsory prayers during each day. The religious education for
Malay people will not be accomplished unless they are not able to pronounce the standard
Arabic properly.
In these varieties of languages, there are lots of sounds which cannot be found in Thai
and can possibly be made use of as a precious resource when they study foreign language
including Japanese, Korean, German, and so on. Nonetheless, what actually happens is that
their pronunciation of English is no better than that of Thai Buddhists who have limited
sociolinguistic background. Based on our observations, the chart III explains the problem of
the unused linguistic abilities among Malay Muslim students in English language learning.
Chart III Interlanguage formation of Malay Muslim Students

Influence of Thai
Language
Second
- Thai Target
- English
Passage of Time
Tongue
Mother– pronounce
Ability to Ability to
pronounce
Pattani Standard Standard
Malay Malay Arabic
When Malay Muslim students study English, they rely heavily on Thai as a medium
to form their interlanguage. This is mainly because Thai is taught in public schools, used in
public places, and broadcasted on radio or television. Consequence students follow the
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pronunciation of the teachers in schools and the major language that they expose to. This is a
very natural process which happens everywhere, where students follow the nearest model
available. The problem here is that their reliance on Thai in the interlanguage formation
seems to become a kind of obstacle which hinders the learning of other linguistic skills. Their
more diverse linguistic abilities (compared to Thai Buddhist students) acquired through more
complicated sociolinguistic background, unfortunately, stay dormant and are not used for the
purpose of foreign language acquisition.
The problem will become clearer when we compare the interlanguage formation of
Malay Muslims in Thailand and Malays in Malaysia (in Malaysia, the constitution stipulates
that Malay must be a Muslim).
Malaysia is one of the most successful countries when it comes to English language
teaching, and Malay students, generally speaking, have achieved a higher level of acquisition
of English if compared to Malay students in Thailand. This is caused by several factors such
as the more favourable sociolinguistic background of the country, where English is widely
used besides Malay. Apart from this, in English learning, Malay students in Malaysia may
form the interlanguage based on their mother tongue or the standard Malay, whose sound
system is closer to English than Thai. They seem to utilize their ability in pronouncing the
standard Arabic to a high extent as well because Malay itself is highly influenced by Arabic,
both in the sound system and in its vocabulary in the form of loan words. Moreover, English
has been adopted as a second language in Malaysia due to the colonization of Great Britain.
The following chart shows the relationship of multiple language that promote English
learning among Malay ethnics in Malaysia.
Figure I, II: Interlanguage formation of Malay Muslim Students in Malaysia
Influence of Malay
Tongue
Mother
Malay - Target
Passage of Time
- English
pronounce
Ability to Additional linguistic ability –
the standard
Arabic Utilized as a resource in language acquisition
From the figures above, it can be clearly observed that Malay students in Malaysia are in
greater advantage than their counterpart in Thailand in a couple of aspects. First, they can
form their interlanguage based on their mother tongue, without being interfered by other
languages. Second, they are also able to utilize their additional linguistic skill of pronouncing
the standard Arabic, Pattani Malay, and Standard Malay in pronouncing English.
193
Figure III: Targeted Interlanguage formation of Malay Muslim Students
Influence of Thai
Second Target
Language Language
- Thai - English
Passage of Time
Whether or not Malay
Mother Ability to Ability to
Unfortunately, however, according to our Muslim students use
Tongue – pronounce pronounce
teaching their multilingual
Malay experience
Pattani the observations,
dormant,
Standardand thisstandard
the linguistic
resource also stays Malay the
is rarely Arabic
made use of enhancing
backgroundEnglish
in in
English learning, exactly like unused linguistic
resources of Malay Muslim students. The current pronunciation
problem can be summarized in the chart below:
Figure: IV Current Situation of the Interlanguage among Non-Malay Muslim Students
Influence of Thai
Mother Target
Tongue Language
- Thai - English
Passage of Time
Ability to
pronounce
the standard
Arabic
The ability to pronounce these sounds should be utilized in English learning as well,
so that the non-Muslim students can also achieve a better pronunciation of English than now
as if is shown in the following figure:
Figure V: Benefit for the Interlanguage formation of Non-Malay Muslim

Students
Influence of Thai
Mother Target
Tongue Language
Interlanguage
- Thai - English
Passage of Time
Multilinguistic ability,
Ability to whether or not they use
pronounce them
the standard
Arabic 194
Objectives
Objectives of this study

1. To examine the sounds of English that are available and unavailable in Thai,
Pattani Malay, Standard Malay, and Arabic;
2. To find the problems in pronunciation of English among Malay-Muslim students;
3. To find out the causes of these pronunciation problems, supposedly caused by
their interlanguage formation.
Research Questions
This research is conducted to answer the following questions.
1. What are the sounds of English’s consonants and vowels similar to and/or different
from Thai, Pattani Malay, Standard Malay, and Arabic?
2. What are the phonological problems in English study faced by Malay-Muslim students at
Prince of Songkla University, Pattani Campus?
Literature Review
Foreign Language Acquisition
Language is an important way for human beings in order to make sense out of our past
experience, to learn from it, to communicate and to make it comprehensible. At an early age,
children’s language growth comes from development results their direct interaction with
parents. This is personal and related to the present. As their language understanding grows,
children can relate to ever more expanding situation. This early language experience is
necessary for children to be able to use language symbols apart from actual situations.
Children use language metaphorically, providing evidence that for child's language is creative
as well as imitative. For children, language is a powerful tool for understanding the world
around them. By questioning, children become active in their attempt to comprehend and
learn (Lindfors, 1991; Winner, McCarthy, Kleinman, & Gardner, 1979).
It is a language which influences how we think and behave. For language to expand, children
need to be given many opportunities to interact. Children learn from speaking. Children need
to feel socially competent and accepted to become competent language users. Language is the
way by which children are socialized by adults and the way in which children learn to guide
their inner voice. The central role of language is the way we communicate with other people
and with ourselves (Berk & Winsler, 1995; California Department of Education, 1988;
Lindfors, 1991; Tabors, 1997).
In this globalized world nowadays, learning foreign language not only could equip someone
to widen ample opportunities for someone to pursue their career goal but also to the goal to
communicate with the world. In foreign language learning, the language we learn is called the
target language. In the cases mentioned above, the target language is English. According to
Krashen (2009), there are two approaches of foreign language study. The first way is a
subconscious process; language acquirers are not usually aware of the fact that they are
acquiring language, but are only aware of the fact that they are using the language for
communication. The result of language acquisition, acquired competence, is also
subconscious. We are generally not consciously aware of the rules of the languages we have
acquired. Instead, we have a "feel" for correctness. Grammatical sentences "sound" right, or
"feel" right, and errors feel wrong, even if we do not consciously know what rule was
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violated. This is more implicit and informal or natural of learning. This is called
“Universalists,” which claim that language is acquired through innateness (nature) and that
certain conditions trigger the development of language (nurture).
The second way to develop competence in a second language is by language learning. We
use the term "learning" to refer to conscious knowledge of a second language, knowing the
rules, being aware of them, and being able to talk about them. In non-technical terms,
learning is "knowing about" a language, known to most people as "grammar," or "rules".
Some synonyms include formal knowledge of a language or explicit learning. This theory is
called “Behaviorists,” which claim that learners learn by undergoing training and practice
through a series of stimulus and response chains and operant conditioning. While the
environment provides the stimulus, the learner provides the response. According to the
Behaviorist theory, reinforcement motivates the formation of a language habit. Language
learning requires effort and practice. Behaviorists further claim that learners imitate or
approximate productive responses.
Learners acquire a second language by drawing on their background experiences and prior
knowledge in their first language. They experiment with the second language by using
features found in their first language which are similar to those in the second language. This
dependence on the first language serves to help the learner construct an interlanguage, a
transitional system consisting of the learner’s current second language knowledge.
The term ‘Interlanguage’ was first proposed by Larry Selinker in 1972, and has been revisited
again in 1992 by the same author (Selinker 1972; 1992). Later on, works by Corder (1981)
and Mitchell and Myles (2004: 156) among others have done a revision on the topic of
Interlanguage. At the same time, Nemser (1971) developed a parallel foundational theory to
that of Selinker, in which he analysed the way foreign language learners dealt with L2
linguistic systems.
Interlanguage could be defined as an intermediate stage between a learner’s L1 and
L2, in which s/he uses rules from both linguistic systems in order to produce sentences in L2.
Following a constructivist approach, Interlanguage is the measurable proof of students’
construction of their learning progress; Interlingua indicates the different linguistic stages the
learner undergoes. As Piaget pointed out in his learning theory, those various stages go from
a more controlled phase to an abstract and creative thinking process (Williams and Burden
1997: 21-22). Interlanguage is the transitory and always changing linguistic state of SL users.
It evolves towards the best SL state possible for that user, and it is directly influenced by
individual cognitive skills and contextual pushing factors.
The different instances of Interlanguage should be perceived as a proof of the learner’s
assimilation of the new language into his/her own reality; they are also a sign that the
learning activity is meaningful for learners. However, Interlanguage is not only a measurable
evidence of language learning, rather it is the complex result of internal cognitive processes
that take place during learners’ process of second language (SL) acquisition.
Krashen (2009) proposed five hypotheses for second language acquisition. He explored the
notion that acquisition is different from learning because one takes place in a natural
environment while the other takes place in an academic setting. He further claimed that we
learn language in a predictable order. Some language structures are learned earlier than
others. The monitor is the self-correcting mechanism that learners use to edit what they say
before they speak or write. The learner can overuse the monitor and stifle communication. He
proposed that when learners are provided with comprehensible input they acquire more.
When the learner’s affective filter is up, this means that information is not reaching the
learner. This may be because of fear, anxiety or low self-confidence in language learning.
The ideal situation is for the filter to be done so that the language acquisition device can
receive the input necessary for language acquisition.
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Teaching and Learning English in Thailand
In Thailand, English is a foreign language and taught as an academic subject from a basic
education to a higher education. The role of English at the present days seems to be more
important as the world becomes connected through technology. The emergence of ASEAN
community in the coming years is also one of the factors to accelerate the status of English as
a center of interest for Thais.
As Thailand is part of the new era of information age, knowledge becomes the driving force
of new types of economic, social, and political developments (Gabbard, 2000; Tileston,
2007). In facing up the challenge of knowledge-based society, education plays a prominent
role in fostering the knowledge forces among Thai people. In 1997, Thailand’s economic
growth encountered a crisis, due in part to inadequacies in its educational system (Bangkok
Post, 1998; ONEC, 1998). It was questionable whether graduates have capacity to meet the
challenges of the information age. Thai education is not designed to produce the highly
motivated, independent thinkers and learners demanded by today’s era of global
transformation (Ministry of Education, 1996; ONEC, 1997). In response to this force, then
national educational reform law is endorsed in 1999 (ONEC, 2001). Learning reform is the
key content to this educational reform as teacher-centered approach is no longer the desirable
methods of teaching (Hallinger, 2003). It has been obligatory for schools and all levels of
educational institutions in Thailand to reform learning to be consistent with the guidelines in
the reform act. (Khemmani, 2006).
The policy of the National Educational Reform has an aim to double the number of
foreign language major and minor students within ten years. As a result, the mandatory of
English for all students has doubled from six to twelve credit points. New students will be
streamed according to the policy of National University Examination Test (NUET). There
will be an exit test for all students, which will not, however, appear on students’ academic
records of transcript. In reality, the NUET includes English courses for all candidates by
focusing on reading and the knowledge of grammar. Most of all school curricula and teaching
are geared toward examinable requirements (Wongsothorn et al, 2003). As the 1999 Thai
education reform to implement learner centered teaching approach to teaching and learning
process, it turns out that teachers remain a major player in the classroom in English
(Waelateh, 2009).
Related Research on Pronunciation
A general observation suggests that it is those who start to learn English after their school
years who are most likely to have serious difficulties in acquiring intelligible pronunciation,
with the degree of difficulty increasing markedly with age. This difficulty has nothing to do
with intelligence, a level of education, or even with knowledge of English grammar and
vocabulary. Of course, there is no simple answer to why the pronunciation is so difficult to
learn -indeed there is a whole range of theoretical perspectives on the question.
Pronouncing English of Thais has been studied by a number of researchers in the past.
The mother tongue language plays an important role in influencing the target language as it is
learned as a second or foreign language. According to the study of Boonruang (1993) Thai
learners of English had the problems in pronouncing the English sounds /f/ and /v/, both in
syllable initial and syllable final positions such as in “fast”, “safe”, “half” and “life.” The
reason why the English /v/poses greater problems for Thai speakers is because this sound
does not occur in Thai at all. However, Thai speakers are likely to substitute it with /w/
because /w/ is available in Thai sound such as “very”, “van.” Sometimes they substitute /v/
with /p/ or /ᴓ/ in syllable final position as in “save,” “halve,” and “live”. In addition, they also
have some difficulties in differentiating such minimal pairs as “safe” and “save,” “half” and
“halve.”
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Monthon (2007) revealed his research findings on Thai and English consonantal
sound. It was found that English sounds which did not occur in the Thai phonology tended to
pose great difficulty for Thai students to utter. Those sounds included /g/, /v/, /t/, /d/, /z/, /s/,
/z/, /tᶴ/, and /dZ/. Sounds which exist in Thai but can occur in different environment, i.e.
syllable position, are also prone to be difficult to pronounce. Such examples are /f/ and /s/. To
tackle the problem of sounds nonexistent in Thai, Thai students are likely to substitute the
Thai sounds of the English sounds. In addition, the phenomenon where /l/ and /r/ are used
interchangeably in Thai tends to be transferred in pronouncing /l/ and /r/ in English with great
challenges. Possible solutions for the Thai to tackle the difficulty are to use their Thai
phonetics in place of the English sounds or to omit the target sounds completely.
According to Jotikasthira (1999), the English sounds which are considered
problematic for Thai students can be divided into three categories: 1) sounds that do not
occur in Thai such as /v/, /th/, /dZ/. 2) sounds that do not occur at the final position. Although
some English sounds exist in Thai, they do not occur at the final position in Thai and most
Thai students fail to pronounce them when they finally appear in English words. For
example, /l/ is substituted by /n/. /p/, /b/, /t/, /d/, and /k/ are pronounced as unreleased instead
of releasing sounds because these sounds are pronounced unreleased when they occur in the
final position in Thai words. 3) Sounds that are genetically different from Thai equivalents:
/r/, /i/, /e/, /u/, and /o/; that is, their production is not the same.
Considering the use of pitch, since the different use of pitch in a word doesn’t change its
meaning, Pattani Malay is not a tone language (Salae, 1991). Rather, it is found that the use
of pitch in Pattani Malay depends on the purpose of the speaker.
Moreover, as Limsangkass (2009) mentioned in his study on pitch movement in English
spoken by Thai students who speaks Pattani Malay as their mother tongue. It was found that
Pattani Malay Muslims tend to use a falling tone with Yes-No questions.
Research Methodology
Participants
The participants were students who are studying in Prince of Songkla University,
Pattani. There were 40 participants all together, including all disciplines of study in the
Faculty of Humanities and Social Sciences. However, in order to encourage and reliability of
this research, we have set five criteria in getting the research participants as the following:
1. Participants had a permanent residence in the deep South of Thailand, namely,
Pattani, Yala and Narathiwat.
2. Participants could speak Pattani Malay as a mother tongue language. Thai is their
second language learnt at schools. Normally, the participants started learning Thai at the age
of five or so at a primary school. However, when they stayed home with the family members
or with the neighborhood, Pattani Malay was the only language that is used as a medium of
communication. All 40 participants were the followers of Islam. Generally, they were Malay
ethnic.
3. Participants could read Al-Quran, which is in Arabic. In general, they learn reading
and reciting Al-Quran when they were young, probably at the age of six. This practice has
been conducted for generations. Reading Al-Quran is normally taught by parents at home, or
parents might hire someone to teach their children. To be a good Muslim, they were taught to
be able to read Al-Quran and recite it in different occasions. For example, they need to use it
in the daily prayer five times a day. If they could not read or recite Al-Quran, they could not
perform daily prayers properly. Nevertheless, many of them do not understand its meanings,
unless they study Quranic language in Islamic schools in the area or abroad.
4. Participants were able to use standard Malay or Bahasa Malaysia, or at least they
could read it. Normally, they learnt Bahasa Malaysia while they were young as well by
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attending an informal school, which is called “Tadika.” This is an acronym for “Taman
didikan kanak-kanak” in Malay, meaning “the garden of children’s education” attached to the
mosque. This school is scheduled on every weekends, and it was organized by the locals or
religious leaders. The medium of instruction is Pattani Malay, but all texts are written in
standard Malay or Bahasa Malaysia. Some subjects are in Arabic. This private owned school
is designed to teach religious affairs through Bahasa Malaysia and Arabic.
5. Participants passed three foundation courses of English as a core course at PSU
Pattani. The first two courses were called English I and English II. These were two
compulsory courses applied to all students to study. Normally, students would study English I
in the first semester of their university year, while English II was enrolled in the second
semester. The contents of these two subjects were basic knowledge of English, especially in
English grammar and vocabulary. The last course was English Academic Reading, which was
other core course for students at the Faculty of Humanities and Social Sciences. While
English Academic Reading deals with reading English articles published in mainstream
media, the learners were expected to know the main ideas, details, and inference. They were
taught how to distinguish between facts and opinions. It was expected that they could be able
to read or familiar with some basic words and sentences given by the researchers.
Conclusions
1. What are the sounds of English’s consonants and vowels similar to and different
from Thai, Pattani Malay, Standard Malay, and Arabic?
Each language has its own sound system. Those who master more than one language,
could utilize their multiple language background, especially in the area of articulation. This is
simply because one language does not have all sounds. For example, some sounds in English
may not have in Thai or in Arabic.
From the finding of our study, it was found that there are eight consonant sounds of
English do not exist in Thai. They are shown in the following table.
English Thai Pattani Malay Standard Malay Arabic
1. /g/ x / / x
2. /dʒ/ x / / /
3. /v/ x x / x
4. /θ/ x x x /
5. /ð/ x x x /
6. /z/ x / / /
7. /ʃ/ x x / /
8. /ʒ/ x x x x
In terms of vowels and diphthongs, Thai possess a rich system of vowel sounds, except some
diphthongs in English. It is believed that those who can speak these three languages and they
learn English as an additional language; they would take these resources in the production of
English pronunciation. Linguistically, the learners who are living in the Deep South of
Thailand have a better advantage in using multiple languages. Thai accommodates almost
thirty vowel and diphthong sounds. At the same time, Arabic and Malay languages have
many consonant sounds which are not available in Thai. Theoretically, Malay Muslim should
have a better opportunity in producing or pronouncing English words. Unfortunately, they
never use this important resource when they articulate English words or sentence.
1. What are the phonological problems in English faced by Malay-Muslims students at
Prince of Songkla University, Pattani Campus?
From the analysis, there are eight character sounds that do not exist in the Thai sound system.
They are /g/, /dʒ/, /v/, /θ/, /ð/, /z/, /ʃ/, and /ʒ/. However, the participants used Thai sounds to
199
substitute, which is not exactly the same. The most critical phonological problem from them
were /v/, /θ/, and /ð/ as almost none of the participants could pronounce these sounds
properly.
Generally, Thai language has a great influence on learning English as a foreign language in
Thailand as Thai is a national language, even Thai is a second language for Malay Muslim.
Actually, Malay Muslim students have a multiple linguistic asset as they speak Pattani Malay
as a mother tongue language, Standard Malay as they studied for a religious purpose while
they were young, Arabic as they are obliged to read Al-Quran, which is part of their daily
religious activities. Linguistically, these languages have a certain strong point of sound
system apart from Thai. It means that some missing sounds in Thai are available in other four
languages, if they realize and activate it properly. If they can adopt the sound system from
Pattani Malay, Standard Malay, as well as Arabic, it would be useful for their learning
English especially in articulating English words and sentences. Unfortunately, the strong
influence of Thai language could hinder or inactivate other linguistic asset. From the study,
once they were tested to articulate English words and sentences, they never use the existing
knowledge to help English pronunciation. According to this finding, we could say that the
national language of Thailand plays an active role than other four languages of the English
learners. This is because Thai is the only language used as a medium of instruction in
Thailand in almost every level of education. Once the students are in an English classroom,
which is taught by Thai teachers, they might think about the Thai language, not only in terms
of semantic system but also in terms of sound production as well.
2. What are the major factors hindering Malay-Muslim students in English
pronunciations?
From the finding in the earlier chapter, it was found that Malay Muslims just thought
about only Thai while they learned English. The Sound transcription was made in Thai rather
than in phonetic symbols. This practice could distort some original sounds and eventually the
learners just thought about the Thai sound, not English.
Another reason is related to that the teaching and learning process in classroom,
which is normally conducted in Thai rather than English. Many English teachers in Thailand
are not able to use English for instruction. When Thai is used to explain word meanings with
the Thai accent of pronunciation, the learners just rely on Thai both in remembering
vocabulary and producing English sounds. Moreover, basically, the curriculum of English
heavily relies on English structures and its rules rather than focusing on daily communication.
From our study, we highly recommend those teachers who are able to speak Pattani Malay,
Standard Malay, and Arabic should realize the importance of this linguistic asset. Teachers
should play an important role in promoting and activating in associating some missing sound
in Thai but they are available in Pattani Malay, Standard Malay, and Arabic.
In conclusion, paying attention to the sound articulation in studying a foreign
language is important as mentioned in the study. However, in order to get a message across
from a sender of the message to the recipient, there are other factors as well, such as the
context of the message. In many cases, the recipient of the message could get and guess the
meaning of the message through understanding the whole sentence and other non-verbal
language which come along with while we are communicating.
200
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The most appropriate strategy for creating a stable labor

market in Kosovo
202
Ph.D.(c) Artan Haziri, Institute for Finance and Accounting –
AFAS, Prishtina, Kosovo
Email:Artanhaziri@live.com
Abstract
The economic development of a country is a key factor for the development of all other
spheres of life in the country. So, economic development affects directly, or indirectly in the
development of the labor market. Governments of different countries, constantly found the
challenge of finding appropriate solutions for sustainable economic development and
reducing the number of the unemployed. Even Kosovo, like other countries around the world,
faces this challenge. As a country emerging from war for 15 years, and with the declared
independence since 2008, a country with a developing economy, of course this challenge is
even more difficult.. People with average age of the youngest in Europe, and inability to
provide employment opportunities, every day more and more is adding frustration to people.
The dissatisfaction Was Observed Even with the large number of illegal migrants in recent
months, who are Unable to find work, take the risk of traveling illegally to Europe, with the
only hope of finding better opportunities of employment and lifestyle. Lack of accurate data
on the number of unemployed, made it difficult to analyze this issue, this happens mainly due
to the large number of unregistered workers, informal economy, etc.
With a GDP of approximately 2,600 € per capita, Kosovo is one of the poorest countries in
Europe 34.5% of the 1.8 million inhabitants live in poverty, on less than € 1.55 per day (12%
live in extreme poverty, with less than 1€ per day), so poverty is very high. There are no
significant differences between poverty in urban and rural areas, but there are significant
differences in different regions of Kosovo, where the poverty rate varies from 53.8 to 18
percent.
Key words: Unemployment, poverty, informal economy, agricultural development, tourism.
Conference topic: Economy, Management and Marketing Macroeconomics

Macroeconomics
203
Unemployment and absence of jobs in Kosovo
As in many other countries even here there is a very strong negative correlation between
education and poverty, where persons with secondary education or higher, much less fall into
the category of the poor1
High unemployment and the lack of good places to work have contributed significantly to
poverty and income insecurity, gender inequality, etc. With an unemployment rate of 45%
and a low level of employees (29%), Kosovo has the lowest number of employees in Europe.
Undoubtedly, the lack of jobs has a direct impact on revenue, and various research shows that
the risk of poverty is 20% higher among the unemployed.
Most heads of households in extreme poverty are unemployed. Many families where most of
the family members are employed in unsafe and unsustainable, even though they employed
family member, yet belong to poor families. Most of these families depend on small and
informal businesses for most of their income, thus reflecting the high degree of informality in
Kosovo.
Manager of the World Bank in Kosovo, Jan Peter Oltres says that are not only high
unemployment rates that are alarming, but are also extremely low rates of employment, especially
among youth. “Today’s potencial economic development for a new country is seriously
limited if more than a third of its young pople do not attend schools or universities or do not
work to have a position to gain a professional experience.2
Conditions and difficult access to the labor market have particularly youth and women.
Unemployment at the age group of 15-25 years is estimated 76% and of course this figure is
alarming, considering that this group constitutes 21% of the population of Kosovo. The poor
quality of education, along with limited employment opportunities, makes more difficult the
possibility that young people find and keep jobs. But even those who find work are usually
employed in positions that do not coincide with their capabilities, and unproductive positions,
often in the informal sector. According to the respondents, 20% of employed youth have no
employment contract, and 73% were not registered in health insurance. Moreover :
Table 1.Classification of labour market for people of 20133
MALE FEMALE TOTAL
Estimated population July 2014 910524 900848 1811372
The working age population 593111 598519 1191630
The elderly (age 65+) 66878 74207 141085
Children(0-14) 250535 228122 478657
Labour force(active) 15-64 years 357186 126007 483193
1World Bank – Kosovo Partnership Strategy for the period 2012-2014, May 2012
2http://www.evropaelire.org/content/article/25122318.html
3SAK-Statistical Agency of Kosovo - Labour Force Survey 2013
204
Employed 15-64 years 261244 77120 338364
Unemployed 15-64 years 95942 48887 144829
Workforce among youth 15-64 years 55850 24548 80398
Young employees 15-64 years 27713 7763 35476
Employed youth 15-64 years 28137 16785 44922
Inactive persons 235925 472511 708436
Table 2. Key indicators of labour market(%)4
Male Female TOTAL
The participation rate in workforce 60.2 21.1 40.5
Inacttivity rate 38.8 78.9 59.5
Employment to population
uneomployment rate) ratio(the 44.0 12.9 28.4
Unemployment rate 26.9 38.8 30.0
The unemployed rate among young people(15- 50.4 68.4 55.9

24 years)
How to create a sustainable economic development

Taking into the consideration high rates regarding to poverty and unemployment (especially
to young men and women), the major challenge facing Kosovo today is the concern of how to
create a sustainable economic development, which will create more opportunities and more
quality jobs for its growing population, and the high percentage of youth
Kosovo's economic growth so far has been based largely on public investment and
availability of external financial resources, especially support from donors and remittances.
This model does not seem to be sustainable for the long term, bringing the need for a long
term alternative. Investments that have begun to be created in the private sector, are more
promising that will accelerate economic growth and employment opportunities, but that are
more influenced by constraints on infrastructure development, especially in the supply stable
electricity. Overcoming these problems requires a proper strategy from the government to
create a hospitable climate for investors, creating jobs, and improving living standards.
So the goal should be to accelerate economic growth and job creation, special attention
should be paid to macro-stability, infrastructure development (in particular electricity
4SAK-Statistical Agency of Kosovo - Labour Force Survey 2013
205
supply), improve the environment of doing business,better governance and investments in
agriculture and in human capital (education, training, etc.).
The creation of jobs through the development of agriculture

To address the present constraints in the business environment that affect all sectors of the
economy, special attention should be paid to addressing the issues in agriculture, given its
high potential in economic development, and the possibility of creating more stable work
places.
Kosovo has very good quality agricultural land, and in the past has provided from agriculture
a large amount of food. Now, this sector contributes around 12% of GDP and this is the
sector with the most employees in the Kosovo after war, reaching up to 35% in total
employment.. With ample number of employees, Kosovo has competitive potential in the
horticulture sector, eg in the cultivation of fruits and vegetables and livestock sector, because
domestic demand for horticulture and farming is growing, by increasing purchasing power.
During the last decade, demand for fruits and vegetables of high quality has increased more
than for any other category of food. However, while there is great potential for growth and
productivity in agriculture, this sector is facing many challenges which diminish the
competitive power and stop from reaching full potential.5
Farm inadequate structures , machinery and work tools obsolete, no modern management
farm practices, use of no optimal inputs, poor rural infrastructure, limited access to credit and
investment capital, all these are factors that stumble development. Kosovo farmers are
disadvantaged by products imported from neighboring countries and the EU, since farmers
from these countries receive subsidies from their countries for export and manufacturing.
Government, especially MAFRD must have a development strategy for the development of
this important sector for economic development and creation of new jobs. The long-term plan
should be developed for sustainable development of agriculture, then subsidies, customs
relief for farmers, subsidizing oil, providing vocational training for the cultivated crops or for
increasing and growing cattle. Ensuring equal competition and providing relief to export.
Creation of jobs through the production and development of enterprises

Kosovo's trade deficit in recent years has not changed, and this is one of the factors that most
negatively affects this lack of economic development, since the money still goes out from
Kosovo, rather than return to production in the country. Most enterprises in Kosovo, provide
goods and services, which in a great amount are manufactured abroad. The lack of an
appropriate climate for investment, has so far not affected the arrival of a major investor in
5Statistical Office
206
Kosovo6. Also the lack of infrastructure,lack of security for potential investors, corruption
and lack of tax relief incentive packages for a fixed period for new businesses,assistance in
customs, etc. Creation of free economic zones, where investors will receive free land in use
for building factories and providing state guarantees for foreign investors, could be additional
reasons to invest in Kosovo. Opportunities must be exploited in order migrants to invest their
capital in Kosovo, as well as those who are entrepreneurs in the countries where they live and
work, and use their business experience. This will significantly affect economic growth and
reduce unemployment because, compatriots remittances most of the time go in consumption,
which mean that they go out of the land again.
The creation of jobs through the development of tourism

As a catalyst for economic development and creation of new jobs, development of tourism is
also a great potential too. Although many people associate more tourism to coastal countries,
Kosovo offers good potential for development of this sector. Also, like many other sectors in
Kosovo, tourism needs investment and rehabilitation, as it is not made an notable capital
investment in this regard. The lack of road infrastructure, then equipment for winter tourism
(skilift, etc.) affect the stagnation of proper development. The only capital investment in this
regard is expected to be the construction of the ski resort in Brezovica, acquired by an
international consortium. Although there is no accurate data on the number of visitors and
tourists, one thing is for sure, that tourism is a growing trend in Kosovo. Tourism
development opportunities, as in the Rugova Gorge, Dragash, then Cursed Mountain, the old
town of Prizren to urban tourism in Pristina. Rugova Gorge, with its natural beauties, which
he was awarded with the prize of "World Tourist Destination", if there would be numerous
investments would have an impact on reducing the numbers of unemployed. Benefits would
have the surrounding towns, for example, Peja that is close to Rugova Gorge. Around
Accursed Mountains town is city of Deqan, Junik up to Gjakova. Creating a strategy for
development of the sector in infrastructure investments, Private-public partnerships, foreign
media marketing, presentation of tourism in fairs around the world In this regard it can be
used the power of the Albanian Diaspora around the world, either as visitors or potential
investor, but also as presenter of these destinations in countries where they live.
Conclusion
Kosovo can not have a stable future without sustainable economic development. This
development is based on key sectors of the economy such as agriculture, tourism and other
sectors.
The economic development of Kosovo is becoming partially without any strategy, vision and
even with lack of professionalism.
Economic trends so far are not good except the GDP, that have positive trends, while all
other macro economic indicators have negative signs, indicating that the efficiency of the
6Ministry of labor and social welfare
207
implemented economic policy is not good.In Kosovo there is no economic policy, so
economic development most consist so stihik.
Kosovo has a strategy that will have a real prediction will be applied. The first phase of
developing a strategy should be on the creation of an analysis of the development in Kosovo
on the basis of which we see what level has Kosovo reached , what economic structure is
formed and how the trends have been in order to base the prognosis for further
development.
That is why Kosovo's economy in recent years had no economic growth more than three
percent, while unemployment, according to data of the Statistics Agency of Kosovo is over
30 percent
Literature
- World Bank – Kosovo Partnership Strategy for the period 2012-2014, May 2012
- KAS - Kosovo Agency of Statistics - Labour Force Survey 2013
- Statistical Office
- Ministry of labor and social welfare
- http://www.fermaime.com/?id=8&l=972
- http://www.telegrafi.com/ekonomi/lajme-ekonomi/bujqesia-ne-mes-te-punes-dhe
premtimeve.html
-SAK - Statistical Agency of Kosovo - Labour Force Survey 2013
-http://www.evropaelire.org/content/article/25122318.html
208
Thai vs. Malay Identity: The challenge of Diversity in Southern Thailand
Munirah Yamirudeng
Faculty of Humanities and Social Sciences, Prince Of Songkla University-Pattani Campus
181 Charoenpradit Rd., Rusamilae
Mueang, Pattani 94000 - Thailand
munirah.y@psu.ac.th
Abstract
Language is intrinsically connected with ethnic identity and it interweaves the
individual's personal identity with his or her collective ethnic identity. It is considered
essential to the maintenance of the group identity. In a nation such as Thailand, one such case
of language conflict is found among the Malay Muslim population of southern Thailand,
which is concentrated in the three predominantly Malay Muslim provinces of Yala,
Narathiwat and Pattani, which represents only about 4 percent of the total population in
Thailand. These people are obviously ethnic Malays in terms of their distinct culture,
customs, and traditions. Cultural traits such as religion and language are the most
conspicuous factors that contrast sharply with those of the majority group, the Thai
Buddhists. it is important to better understand how Malay Muslims perceive themselves and
come to terms with their identity while living in a society that dichotomizes majority versus
minority and Thai-speakers versus non-Thai speakers. Do they resolve conflicting identities
resulting from living in two different cultures? Or do they identify themselves with one
culture over the other?
Keywords: Ethnic identity, Malay Muslims, Southern Thailand
Conference Topic: Education, Teaching and Learning (sub topic: Indigenous and Diversity
Issues) (The 6th MAC 2016)
1. Introduction
In a nation such as Thailand, one such case of language conflict is found among the
Malay Muslim population of southern Thailand, which is concentrated in the three
predominantly Malay Muslim provinces of Yala, Narathiwat and Pattani, which represents
only about 4 percent of the total population in Thailand. They make up a majority in the three
southern provinces (Yala, Pattani and Narathiwat), at 75 percent of the total population in the
region. They are situated in the southern most region of the country, adjacent to the northern
border of Malaysia. The region was incorporated into the territory of Thailand in 1909 under
the Anglo-Thai agreement; the position of the Malay Muslims as a minority is quite unique,
differing from other ethnic group minorities in Thailand in that they are indigenous. Their
territorial concentration is adjacent to their linguistically- and culturally-related majority
group across the border. An oft-cited phrase. In referring to the Malay Muslims as an ethnic
minority, is that “they did not come to Thailand rather, Thailand came to them” (Forber,
1982; Madmarn, 1999:3).
These people are obviously ethnic Malays in terms of their distinct culture, customs,
and traditions. Cultural traits such as religion and language are the most conspicuous factors
that contrast sharply with those of the majority group, the Thai Buddhists. Regarding religion,
the Malays are Muslims, whereas the Thais belong to the Buddhist teachings. Another
obvious factor or element that causes the Malay Muslims to stand out clearly from the
majority group is the Malay language (Madmarn, 1999).
209
Map 1.1 The three southern provinces.
As a minority people living in the political sphere of Thailand as a nation, it is

inevitable that the Malay Muslims will come into contact with the culture and language of the
majority, particularly when the central government exerts its control through its various
institutions upon the Malay Muslim society. And because the official ethnic policy is always
implicitly that of assimilation, educational language policy dictates a monolingual, and by the
implication, mono-cultural/medium of instruction. The government always sees its
educational systems as an effective mechanism for socializing and integrating the Malays into
Thai national life, or as we call it, “Thaisezation” of the Malay ethnic group. It is through the
Thai educational system that the Thai language has been able to penetrate into the daily life
of the Malays. Thai mass media such as TV plays an important role in promoting Thai
language and culture. So far the assimilation policy has not been well received nor has it
been successful among the Malay Muslims who frequently look at the policies of the Thai
government, and even take it as a threat to their ethnic identity (Madmarn, 1999; Shurke,
1970).
In spite of their persistence in maintaining their ethnic identity, the impact of the
education coupled with the pressure of the need for the Thai language, results in the frequent
use of Thai among the younger generations, causing great concerns for the Malays, who fear
that their endangered ethnic identity will eventually be faced with extinction. The
apprehension that Malay ethnicity will be washed away by the mainstream Thai culture leads
the Malay Muslims to make efforts and adopt strategies to defend their own cultural heritage
and sustain their Malay ethnic identity. This is the significant role of Malay language towards
the preservation of Malay ethnicity in southern Thailand. Anthony D. Smith (1992) had
mentioned one pattern of ethnic survival, called the communal-demotic, which refers to a
community that has usually been conquered and is struggling to preserve its former rights and
way of life, claiming that its members are the original inhabitants and their culture is the
vernacular. This pattern of ethnic persistence does not pretend to be exhaustive.
However, they reveal the importance of beliefs in their culture, and symbols for ethnic
survival. Similarly, the case of the Malay Muslims is quite unique, differing from other
minorities in Thailand in that they are the indigenous population. Their territorial
concentration is adjacent to their linguistically- and culturally-related majority group across
the border. They have been attempting to preserve their ethnic identity and cultural autonomy
in the midst of systematic waves of repression and assimilation policies imposed by the Thai
210
government. They have also been offended by the government’s policy over the last six
decades to force them, in the name of creating one Thai national identity, to adopt the
language, dress code and cultural practices of the Thai Buddhist majority.
One of the primaries means of resistance that make the integration of ethnic Malays
difficult has been - among others - the persistence of their mother tongue. The broad process
of modernization, the spread of market economy, increased levels of literacy, and improved
social communication- does not lead to a cultural diffusion that produces a homogenous
culture within a given territory. As Clifford Geertz (1963) argued, “…modernization does not
do away with ethnocentrism, it merely modernizes it.” Indeed, modernization has proved to
be less helpful in lessening ethnocentrism. This study is an exploration of language
significance for ethnic identity sustenance among the Malay-Muslim community in southern
Thailand. Therefore, this study would likr to explore how ethnic language played a vital role
in determining the preservation of ethnic identity vis-à-vis Thai national identity.
No doubt, language often plays an undeniable role in ethnic conflicts, which signifies
its importance in defining one’s national, or in a broader sense, ethnic identity. Two theories
regarding language and ethnicity are quite relevant here, the Instrumentalist and the
Primordialist theory of ethnicity. The Instrumentalists see languages as ‘instruments, tools
only, and mother tongues…in no way…special’ and for them ‘Language is socially
constructed learned (or acquired) behavior, possibly to manipulate situationally, almost like
an overcoat you can take on and off at will’ (Skutnabb-Kangas, 2000:136-137). The
Primordialist theory of ethnicity (Conner, 1993; Shils, 1957), on the other hand, states that
people form ethnic groups to resist being assimilated into the other culture because of their
deep, extra-rational, and primordial sentiments for their language or other aspects of identity.
For primordialists, the mother tongue is ‘more like your skin and later languages like the
overcoats (Skutnabb-Kangas, 2000:137). Primordial arguments are often labeled by the
instrumentalists as ‘emotional, romantic, and traditional, and pre-rational or irrational’
(Skutnabb-Kangas, 2000).
2. Historical Background of the Malay-Muslim Southern Provinces

(Mid 1400s – Early 1900s)
The present day Thai provinces of Satun, Pattani, Yala, and Narathiwat were once
known Patani Raya or Greater Patani. Historically Patani1 was the ancient Malay kingdom of
Langkasuka, founded in first century AD. According to the Chinese, Arabs, Indians, Malays
and Japanese documents, historians seems to agree the location of Langkasuka is around the
vicinity of Pattani and Songkhla (Wheatly, 1961). Langkasuka was an important commercial
port in Southeast Asia due to its relative proximity to the larger kingdoms of Angkor, Pagan,
and Srivijaya. Langkasuka eventually dissolved and the kingdom of Patani rose to power in
its place. As elsewhere in Southeast Asia, the ruler and people of Patani converted to Islam
through contact with traders from Arabia and India who eventually settled in the region and
intermarried with the local peoples. While the exact date is not known, it is believed that the
kingdom of Patani was officially declared an Islamic state in 1457.
Patani grew to be an important religious center for Muslims. “When Western colonial
powers established their foothold on the Malay Peninsula, Patani was already producing
1The Malay spelling of ‘Patani’ (one “T”) refer to the Kingdom of Patani whereas the Thai version of ‘Pattani’
(two “T”) used to denote the Thai province after 1909.
211
Islamic scholars who wrote their own original religious works and translated famous works
of Arab scholars for Malay readers” (. Emanuel Godinho de Eredia writing in 1613 claimed:
The Empire of Malainos was founded in Patani by Tuan Malaio, the first Emperor, who
was chosen in the third year before the birth of Christ, during the time when Harold of
Ascalon, the Pagan was on the throne, the seat of the empire Passed to Pan(Pahang)
then to Malacca, and is now established at Battusawar…. Patane was the first seat of
the Empire of the Malaios, its site lies on the eastern coast of the Peninsula in seven
degrees of North latitude, it is one of the famous Oriental ports with an extensive trade
and commerce. (Malek 1993: 11)
The kingdom of Patani was permanently incorporated into the Thai2 kingdom under
the leadership of Phra Phutthayotfa (Rama I, r. 1782-1809) in 1785. The process of
assimilation occurred over several decades beginning with the reign of King Chulalongkorn.
Chulalongkorn wanted his ‘foreign’ government officials to acquire Thai hearts and manners.
This was to be accomplished in several different ways. Prominent Malay-Muslim officials
were forced to ‘transfer’ to provinces in the North. Sons of Malay nobility were offered on
the-job training with the Thai governor general. Islamic law (shari’a and adat) was replaced
with Thai law, except in cases dealing with family matters and inheritance rights. Qadi
(Muslim judges) were appointed under the close supervision of the sitting Thai judges who
were also given the right to override the decisions of the Qadi.
3. The Categorization of the Muslims in Thailand
Muslims in Thailand form the second largest ethnic minority after the Chinese.
Numbering between four and six million in a population of about 62 million citizens and
maintaining around 2,700 to 2,900 mosques, Muslims make up the largest religious minority
in Theravada Buddhist Thailand (Scupin, 1998: 229; Gilquin, 2005: 3) Thai Muslims
comprise two broadly defined categories. First, there are the Malay Muslims who speak the
Malay language and reside primarily in the four southern Thailand provinces of Pattani, Yala,
Satun and Narathiwat. Malay-speaking Muslims comprise more than 70 percent of the total
Muslim population in Thailand. The other category of Muslims is the Thai-speaking Muslims
who reside in Central, North and Northeast Thailand (Scupin, 2005; McCargo, 2006:3).
The Muslim community in Thailand is actually a basically heterogeneous community.
Nevertheless it is felt that in order to understand fully the Muslim ethnography and in order to
make a legitimate assessment of their national role we ought to begin with an assumption of a
One
continuum
such polar
fromtypewhich
is the
extract
assimilated
two broad
group by which
polar types for
is meant
heuristic
the purpose
group which
(Farouq,1988).
displays a
high degree of cultural similarity with the ethnic Thai-Buddhists except in the area of
religious practices. The term ‘assimilated’ here is therefore used in a restricted sense. The
measure of cultural similarity is basically the extent of the use of the Thai language and the
internalization of tangible aspects of Thai culture such as the use of Thai names, Thai secular
attire and costumes, Thai manner of salutation and greeting and the adoption of Thai dishes.
2 To avoid confusion and maintain consistency, I will use ‘Thailand,’ ‘kingdom of Thailand,’ ‘Thai State,’ ‘Thai
government,’ etc. in reference to the country, government, and people despite the time period. It is noted that
prior to 1939, the country was officially called ‘Siam’ or ‘kingdom of Siam.’ In 1939 the name was changed to
Thailand, which can be defined as “Land of Thais” or “Land of Freedom,” by Phibul Songkram during his rule in
order to equate ethnicity with nationalism.
212
Conversely, at the other end of the continuum is the unassimilated group by which is meant
the group that still displays a distinct culture of its own, notably in the realm of language and
the tangible aspects of non-Thai culture.
The ‘assimilated’ Muslims cover a whole diversity of ethnic groups such as the Thai
Muslim, the Thai-Malays, the Muslim Ho (Haw) Chinese, the Bengalis, the Arabs, the
Iranians, the Chams, the Minangkabaus, the Javanese, the Baweans, the Pathans, the Punjabis
and the Samsams. The ‘unassimilated’ are predominantly Malay but to differentiate these
from the Malays in Malaysia and elsewhere the designation ‘Malay-Muslim’ will be use to
describe them. However, it is important to bear in mind that between the two polar types
there are exists various groups of varying mixes of ‘assimilated’ and ‘unassimilated’
qualities. The categorization as between ‘assimilated’ and ‘unassimilated’ also corresponds to
a significant polarization along geographical lines. The southernmost provinces of Yala,
Pattani and Narathiwat tend to represent the boundary of the ‘unassimilated’ Malay Muslims,
whereas other minorities elsewhere in the Kingdom of Thailand are generally much more
‘assimilated’.
4. Malay Muslim Identity

In the case of the Malay Muslims, the task of maintaining their ethnic boundary and
consolidating their group solidarity is far easier, because, unlike the other Thai Muslims, they
are more homogenous. To begin with, they are held together by common tangible cultural
characteristics such as the Malay language, Malay names, Malay folklore and music, Malay
foods habits, Malay attire and costumes and so on. They constitute the majority population in
the changwat of Pattani, Yala and Narathiwat confers on them dominant status in that part of
Thailand and there by relieve them to some extent of some of the anxieties the Thai Muslims
elsewhere in the kingdom harbor over the prospect of being absorbed completely from Thai
Buddhist society.
Map 4.1
5. Malay Identity and the Thai Society

We now move on to the particular issue of how Malay ethnicity becomes basically
identification with a lower status position within the context of the wider Thai ethnic society.
In this respect, the question of how the Malays conceptualize their ethnicity becomes very
crucial.3 At the same time, the recognition of such identity by the Thai society is equally
3 In case of the Malay Muslim, they contest with this concept by pressing on the differences of ethnicity,
language and religion. Hence, to be Malays mean to be Muslims only, as well as to be Thai means to be
Buddhist. The concepts of ethnicity and religion were brought together to determine Muslim identity in
Thailand.
213
important in ascribing to the Malays their particular status position. As stressed earlier, these
two conditions must be first fulfilled before the very concept of Siamese ethnicity becomes
meaningful and operational. The process of ethnic identification and the recognition of this
create an ethnic consciousness which is embodied within a constantly expressed and
maintained boundary. The cultural content within such a boundary need not necessarily be
different from that of others in the wider society since there may exist some elements of
culture sharing. But the idea of an existing boundary stands and tends to emphasize the
concept of ethnicity, enhanced by the national nature of the wider society, the necessary
ideology of which forces an individual to belong to one particular group. In this way a person
is firstly seen not necessarily as a member of the wider society but rather as an exclusive
member of one of the groups which together constitute the larger society. In everyday
parlance, Malay Muslim conception of ethnicity is manifested in the terminology used by the
Malays in relation to themselves and to other people. The term “oghe melayu” (the Malays)
becomes readily accepted by the Thai and by other groups as being the specific appellation
for the Malay ethnic group. The Siamese, on the other hand, use the term “khek” (guest,
stranger) to refer to the Malays in southern Thailand..
The use of this terminology necessarily expresses the distinctive group differentiation
and the stress on ethnic identity in general. The term “Khek” is culturally value-laden at least
for the Siamese. It is expressive of how the Thai view their ethnicity in relation to that of the
Malays. The term “khek” signifies the position of being a “guest” or “visitor”. But this has a
direct bearing on how the Siamese conceptualize themselves and how they place themselves
on a different cultural level vis-à-vis the Malays. Thus, “Siamese” in the historical context
refers to a dominant Thai culture and political power, while “khek” signifies a subservient
and dominated people. Hence the self-conception of the Siamese as people who had
dominated the Malays seems to be an undercurrent of the Siamese conception of them-selves
in relation to the Malays. The fact of being Malay and the fact of identifying with the Malay
ethnicity are themselves absolute phenomena which are consciously accepted and stressed in
the interactive pattern between the Malay Muslims and the Thai. Ethnic consciousness
becomes the necessary ideology in the southern provinces, and in the interactional pattern
between Malays and Thais.
It is in their relationships with the wider society that the Malay Muslims have to
endure their minority status, due to the fact that Malay ethnicity does not carry any
importance in terms of economic, political and social opportunities. This can be seen in the
following ways. Firstly, Smith’s terms, insofar as there is “a formal diversity in the basic
system of compulsory institutions…embracing kinship, education, religion, property and
economic, recreation and certain sodalities”, and insofar as there are”…different sections of
the community living side by side but separately, within the same political unit”.
Secondly, the minority status of the Malay Muslim is expressed in the spheres of
economic and political life. In terms of inter-ethnic contact, the Thai have to comply to a
particular behavioral ascription which is consistent with their subordinate economic and
political status. Thus the Malay Muslims are seen by the Thais as necessarily of lower social
and ritual status following the local stereotype that the Malay Muslims are generally poor and
uneducated. Thus, at the same time, the Thais self-conscious of their own ethnicity and
culture which they consider superior than that of the Malays. Thirdly, the minority position of
the Thai can best be seen in the light of an argument put forward by Barth (1969) the
relationship of inequality and stratification obtains when one ethnic group has the control of
the means of production utilized by another groups.
214
6. Conclusion
Apparently, Malay Muslims identity, in contrast to the relatively nascent Thai Muslim
identity, has deep historical roots and operates within a geographical setting which makes
more viable. Yet a large sectors of the Thai Muslim population themselves were originally
Malay Muslims in background, cultural as well as geographical. In a sense, their “
Thaisization “ was a consequence of the geographical removal from the Malay Muslims areas
in Thailand and a upon which they became rigorously exposed to the pervasive impact of
Thai Buddhist culture. The Thai language gradually replaced the Malay language as the
principle medium of communication and the broad aspects of Thai costume were, by
necessity, selectively adopted. Their Thai character was also gradually acquired. Yet, there
was a paradox in this process because, whitest in the eyes of the Thai Buddhists these
transplanted Malay Muslim communities were still categorized as khek communities, for the
Malay Muslims of the southernmost provinces, whose Malay cultural heritage was only
marginally challenged, they were no longer perceived as Malay Muslims but rather as “out
groups”. In the case of the Malay Muslims, the position of a geographical territory, which
ensured the cultural autonomy, had a tremendous significance in the preservation of a
positive Malay Muslim identity. In the contrary the existence of a “territorial cultural
autonomy” which facilitated the insulation process of the Malay Muslims contributed to the
emergence of a relatively negative Thai identity of the Malay Muslims. Officially, all Malay
Muslims are designated Thai Islam, but they are serious ambivalences and even
contradictions, depending on a host of circumenstancial factors. Thai government itself is
careful not to give any credence, tacitly or otherwise, to the ‘Malay’ character of the Malay
Muslims; even the Malay language as used in the Malay Muslim provinces is only referred to
passa thong thing, the vernacular language, or jawi so as to erase any trace of affinity with
Malaysia, perceived as the Malay home land. The dilemmas of identity confronting the
Malay Muslims really characterized the political dilemmas before them. On the one hand
they generally aspire to some form of atunomism or separatism and recognize that the only
way to realize this is through the assertion of their ‘ Malay’ identity, but on the other hand
they must reckon with the practical limitations surrounding that aspiration and have to
reconciled themselves to pragmatic considerations if they want to assume full responsibility
of citizenship within Thailand which, among other things, require their unequivocal adoption
of Thai political identity. It is a dilemma whose resolution may depends simply on time, but
meanwhile the Thai Muslims, who are the immediate and actual beneficiaries of the state
policy of patronage towards Islam, emerge as the mediators of Malay Muslim orientation
towards the Thai states.
7. References
Chalk, Peter. (2008). The Malay-Muslim Insurgency in Southern Thailand:Understanding the
Conflict’s Evolving Dynamic, Published by the RAND Corporation. USA.
Chinen, Kiyomi. (2004). Heritage Language Development: Understanding the roles of
Ethnic Identity, Attidudes, Motivstion, Schooling, Family Support and Community Factors.
Doctoral Dissertation Presnted to the Cannegie Mellon University
Conner, W. (1993) Beyond reason: The nature of the ethno-national bond. Ethnic and Racial
Studies, 16 (3): 373-89.
Forbes, Andrew D.W. (1982). “Thailand’s Muslim Minorities: Assimilation, Secession, or
Coexistence?” Asian Survey 22, no. 11 : 1056-73.
Geertz, Clifford (1963) "The Integrative Revolution", in C. Geertz, (ed) Old Societies and
New States, New York: Free Press.
Gilquin, Michel. (2005). The Muslims of Thailand. Translated by Michael Smithies.
Chiengmai: Silkworm Books
215
Hoon Peow1. (2009). “Politics of Religious and Ethnic Identity the Cases of Southern
Thailand and Southern Philippines”. The Journal of International Social Research. Volume
2/9
Madmarn, Hassan. (1999). The Pondok and Madrasah in Patani. Penerbit University
Kebangsaan Malaysia: Bangi, Malaysia.
Malek, Mohd Zambri A. (1993). Umat Islam Patani. HIZBI: Shah Alam
McCargo, Duncan. (2006). 'Introduction: Rethinking Thailand's Southern Violence. Critical
Asian Studies 38 (2): 3-10.
Scupin, Raymond. (2005). 'Violence in South Thailand: Polarized Cultural Stereotypes
Contribute to New Violence'. Anthropology Newsletter March 2005: 28.
Seidenfaden, Erik.(1967). The Thai Peoples: The Origins and Habitats of the Thai Peoples
with a Sketch of Their Material and Spiritual Culture. Bangkok: Siam Society.
Shils, E. A. (1957). “ Primordial, personal, sacred and civil ties”. British Journal of
Sociology, 8: 130-45.
Skutnabb-Kangas, T. (1981). Bilingualism or Not: The Education of Minorities. Clevedon,
England: Multilingual Matters.
Smith, A.D. 1991). National Identity. London: Penguin.
Smith, Anthony D. (1992). "Chosen peoples: Why ethnic groups survive", Ethnic and Racial
Studies, Vol. 15, No. 3, pp. 440-449.
Wheatly P. (1961). The Golden Kherosonese. Kuala Lumpur: University Malaya Press.
8. Brief biography of author

Yamirudeng, Munirah, the author has been involved in academic line for quite some times,
being an academic assistant at the International Islamic University, Malaysia,; part-tiime
lecturer at Yala Islamic College, Yala – Thailand. Currently she is a Lecturer and a researcher
at Malay Studies, Department of Eastern Languages, Faculty of Humanities and social
Sciences. Prince of Songkhla University, Pattani Campus. Thailand.
216
Gender Perceptions on Localization, Education and Important Job Attributes in the
United Arab Emirates
Dr. Fauzia Jabeen*, Associate Professor of Management, College of Business

Administration, Abu Dhabi University, Abu Dhabi, U.A.E.
E-mail: fauzia.jabeen@adu.ac.ae
Dr. Marios I. Katsioloudes, Professor of Management, Department of

Management and Marketing, College of Business and Economics, Qatar
University,
Doha 2713, Qatar
Email: mariosk@qu.edu.qa
Dr. Saigeeta Kukunuru, Visiting Assistant Professor of Management, American

University in the Emirates, Dubai, U.A.E.
E-mail: saigeeta8@gmail.com
Abstract
The purpose of this study is to understand the perceptions of working and non-working
Emirati male and female University students across three key dimensions: Emiratization,
education and important job attributes in the United Arab Emirates. A survey was self
administered to 212 Emirati students at a leading University in the United Arab Emirates.
The sample data was analysed through measuring basic descriptive statistics in the form of
cross relationships. Rank Correlation test was also done to analyse the data. Working Female
Emiratis are significantly more positive on the contribution of Emiratization in their
professional success than their male counterparts. While Emiratis were generally very
positive about Emiratization program and see its contribution in their professional success,
they clearly see a mismatch in the efforts being made to better equip them. This study is a
valuable contribution to the literature and policy makers by being the first to analyse the
attitude of UAE nationals about Emiratization program.
Keywords: Emiratization, Perception, Job Attributes, United Arab Emirates, Gender,
Students
*Corresponding Author
217
INTRODUCTION
Currently, the Middle Eastern countries are focusing on nationalization policies – the
substitution of expatriates workers with skilled and qualified local labour. Localization
strategies in the region are inevitable given the context of rising population, increasing
unemployment, improving general levels of health and expanded education systems (Swailes,
Al Said, Al Fahdi, 2012). The population and labor market imbalance between UAE nationals
and non-nationals in the private and public sector organizations is one of the impediments.
The arrival of a large number of non-national workers has created economic and social
problems for the UAE labour market (Prasad and Yang 2002). Approximately 99 percent of
the nearly 3.1 million employees who work in the various sectors in the UAE are expatriates,
which accounts for more than 52 percent of the total jobs in the UAE (Sherif, 2013). UAE
nationals, therefore, comprise some nine percent of UAE nationals employed: eight per cent
(192,000) in the public sector and a mere one percent (70,000) in the private sector (Human
resource report 2005; Freek 2004; Abdelkarim 2001a). The size of Emirate’s labour force is
estimated to be 919,298 people (aged 15 years and over), of whom about 10.5% are UAE
nationals and 15.9% are females. However, UAE nationals’ unemployment rate which was
12 percent in 2005 has been reduced to 10.4 percent in 2008 (Statistics Centre Abu Dhabi,
2010).
This study investigates the perceptions of working and non-working Emirati male and female
students, regarding the existing Emiratization policy, job, career, and growth in the
government and private sectors in Abu Dhabi, the capital of UAE. The insights reported in
the paper identify the attitudes of local work force on localizaltion policy and its relation to
job, education etc. The practical implication of this study is to strengthen the Emirati
workforce in all sectors and help build the knowledge-based economy.
Research Objectives and Questions
The purpose of this study is to understand the perceptions of working and non-working
Emirati male and female students across three key dimensions:
1. Whether Emiratization is an enabling factor in their professional growth and success.

2. Job attributes that matter most to Emirati students while making a career decision.
218
3. Importance of formal education and how well does the current education system prepare
them for achieving their professional objectives.
About United Arab Emirates & Abu Dhabi

The UAE is a union of seven formally separate states or Emirates: Ras Al Khaimah; Umm Al
Quwain; Ajman; Sharjah; Dubai; Fujeirah; and Abu Dhabi. It is bound together by a legal
constitution, which was ratified and adopted in 1998, some 25 years after the UAE came into
existence. Prior to this time the area was known as the Trucial States. Each Emirate possesses
a ruling family, whose head (or ruler) may make decrees that have the force of law (O’Brien
et al 2007). The power wielded by each ruler is not equal and the rulers of the Northern
Emirates have considerably less power than either Dubai or Abu Dhabi. The ruler of the UAE
is also the ruler of Abu Dhabi, the largest and the wealthiest Emirate and has ultimate power
at the federal level.
The Emirate of Abu Dhabi is located in west and southwest part of the United Arab Emirates
along the southern cost of the Arabian Gulf. The total area of the Emirate is 67,340 square
kilometers, which represents about 87% of the total area of the UAE. The Emirate of Abu
Dhabi is made up of three regions, namely, Abu Dhabi, Al Ain, and the Western region. The
Emirate sits atop 10% of the world’s oil reserves and 5% of the global reserves of natural gas.
Abu Dhabi accounts for 90% the UAE’s oil production (Statistics Center, Abu Dhabi 2010).
Nationalization
To tackle the unemployment problems, nationalization strategies are resolutely embedded in
Gulf Cooperation Council Countries (Forstenlecher, 2010; Girgis, 2002; Harry, 2007). All
GCC countries share a universal approach of striking quotas of local employees onto
employers in various sectors. Specific literatures have emerged on Saudization (Al Dosary
and Rahman, 2005; Al Shammari, 2009; Mahdi and Barrientos, 2003; Sadi and Al Buraey,
2009), Emiratization (Al Ali, 2008; Godwin, 2006; Rees et al., 2007; Muysken and Nour,
2006), Kuwaitization (Al Enezi, 2002; Salih, 2010); Omanization (Al Hamadi et al., 2007; Al
Lamki, 1998, 2005; Swailes et al, 2012) and Qatarization (Williams, 2011).
UAE-Emiratization
Emiratization is an affirmative action quota driven employment policy that ensures UAE
nationals’ employment opportunities in the private sector (Godwin, 2006). Since 2000, the
Gulf Cooperation Council (GCC) countries, and UAE in particular, established various
economic policy instruments affecting national labor markets and promoting employment for
219
their citizens. These instruments include wage subsidies, government wage restraints fees and
quotas improving the quality of the education system and training of nationals, charges on
foreign labour, and employment targets for UAE nationals (Al-Lamki 2000; Bahrain
Economic Development Board 2004).
Faced with high unemployment, the fast-developing UAE has embarked on a programme of
replacing foreign workers with Emiratis, but some say this policy pushes employers to hire
less-experienced native workers. The UAE government began the 'emiratisation' process in
the 1990s as fears grew that a burgeoning expatriate workforce, which make up 85% of the
union's four million population, was taking over the leadership of key economic sectors. The
process included a quota system for several sectors to take on a set number of UAE nationals
or face penalties (http://goliath.ecnext.com/coms2/gi_0199-2380884/UAE-
Emiratisation.html)
Emiratization in Private Sector
The UAE has the fastest growing economy in the region. According to economists, experts
and researchers, the national economy is able to create about 600,000 jobs every year in the
private sector alone. Despite its size and fast growth, this economy is not able to produce jobs
for 25,000 to 30,000 UAE jobseekers who want to work but do not find opportunities in the
private sector. Economic growth alone in a country whose citizens do not surpass 15 per cent
of the total population is not sufficient to provide job opportunities for Emiratis if the
government does not provide training programmes to prepare highly qualified people capable
of meeting the job market's needs in the private sector (Rasheed, 2010).
The situation in the job market in the private sector is not normal because UAE nationals find
themselves caught between two conflicting routes cheap and unskilled labor, and highly
qualified labor. Neither of these job markets employs many Emiratis. The number of skilled
and well trained Emiratis is limited because of the small size of the population. Those that are
available are not offered the salaries and privileges that meet their ambitions. The
government has made efforts to address this problem for example, the Emiratization plan
approved by the federal government in 2002 to Emiratize posts in federal government
ministries and bodies. The plan involved a five-year programme with a target of Emiratising
90 per cent of administrative posts, 80 per cent of financial and economic jobs, and 60 per
cent of legal and engineering positions. The plan also comprised a seven-year schedule for
Emiratising 75 per cent of educational posts and 60 per cent of medical jobs. Since the
inception of this plan, the government has made great strides (Rasheed, 2010).
220
Emiratization in Government Sector
According to the latest report issued by the federal government at the end of 2009, 42,000 of
the 66,000 people working for the government are Emiratis. This means that 64 per cent of
the jobs in the government had been Emiratised as of June 2009. There are many factors that
helped achieve this success, such as the sense of security Emiratis enjoy when working for
the government. Also, government jobs do not require as much experience and skills as
private-sector jobs. Furthermore, most citizens prefer a government job because it provides a
higher salary for less effort compared to jobs in the private sector. The emiratisation efforts of
local governments must also be highlighted (Rasheed 2010)
Abdullah Saeed Al Darmaki, Director General of the Abu Dhabi Emiratization Council, said
about 130,000 UAE citizens will join the job market in Abu Dhabi over the next 10 years. He
said the council has received about 10,000 applications from jobseekers, most of which are
based in Al Ain. About 77 per cent of these applicants are women. He said the Emirati
workforce's representation in the private sector is as low as four per cent, compared to 52 per
cent in the public sector, while Emiratization rates vary between one per cent in the tourism
sector and 18 per cent in the energy sector (Rasheed, 2010).
A number of studies have provided the reasons that UAE nationals prefer working in the
public sectors for better compensation and job security (Freek 2004). But the existing low
rate of employment or high attrition rate can be attributed to UAE nationals’ lack of ability to
complete a work satisfactorily (Abdelkarim 2001) thereby pushing them out of work in the
public sector (Freek 2004). This obviously makes the work environment for UAE nationals
less than desirable. Proad et al. (2002) further posit that working in the private sector is a
relatively new phenomenon for UAE nationals. As a result UAE nationals have only general
and sometimes vague impressions as they have little firsthand knowledge or experience
(Yang and Samiha 2001). In an attempt to answer the questions what criteria that establish
the UAE nationals employable in private and public sector organizations, the study considers
the perceptual differences of understanding in Emirati male and female students on the job,
career, and growth in the government, private and semi-government sectors, the gaps in the
implementation of Emiratization program and understanding of Emirati students about the
available job prospects in alternative, evolving industries in Abu Dhabi and investigates to
what extent these factors act favorably or hinder UAE nationals to join the workforce.
221
Workforce nationalization efforts in the GCC Countries
The commitment to reduce the number of expatriates in the GCC via state-led labour market
policies is referred to as Bahrainization, Omanization (Metcalfe, 2007), Saudization (Al
Subhi Al-Harbi 1997, Al-Dosary and Masiur Rahman 2005, Gulf 2008) and Emiratization
(Tanmia, 2006)/ Emiratisation (Morris, 2005). However, Rees et al (2007: 36) “posit a lack of
international academic literature that is focused directly upon nationalization strategies such
as Emiratization, Omanization and Saudisatrion represents a glaring weakness in the
international knowledge bases as it relates to HRM in the Middle East”.
The UAE’s nationalization efforts rely on Emiratization councils, such as the Abu Dhabi
Tawteen Council- one of the leading authorities involved in providing jobs for UAE
nationals- and stipulates that Emirati candidates must have appropriate academic
qualifications to ensure jobs. It is worth noting that the private sector in the UAE is the most
attractive of any of the GCC states to new graduates. The reason for this is that that UAE
hosts global companies that provide training and opportunities for professional advancement
(Al-Mutawa, 2010).
The Public sector in Saudi Arabia gives employment priority to citizens in order to achieve
85 percent national employment. Special efforts toward Saudization are directed by
administrative offices such as those in the Ministry of Social Affairs, which also quantify and
monitor unemployment. Furthermore, the General Organization for Technical Education and
Vocational Training runs a program which aims to establish technical and training bodies for
both men and women in the Kingdom.
Bahrain has sought the assistance of international expertise and research, which has in turn
led to greater freedom of movement in the labor market for all workers, uniformity of
treatment across the workforce, the creation of an upper ceiling for new entrants to the labor
market, and financing to help Bahrainis obtain jobs (Al-Mutawa, 2010). Implementation of
National Project for Employment by the Ministry of Labor in 2006 to recruit citizens seeking
work in the public and private sectors was one of the largest development projects (Al-Alawi,
2010).
Qatar has embraced workforce nationalization, particularly in administrative positions.
Strategic plans to this end have been applied as part of the Qatar National Vision 2030,
particularly in the area of human development (Al-Mutawa, 2010). Qataris are employed in
one of the four sectors viz. government, private, joint, and civil. Employed nationals
constitute less than 10 percent of the total workforce of the state. The government has
adopted a long-term strategy which involves a range of measures from adopting priority
222
appointment systems in specific jobs to designating specific positions and jobs to be filled
exclusively by nationals (Al-Imadi, 2010).
Kuwait has given priority the employment of nationals in the public sector, and imposed
restrictions and incentives obliging the private sector to employ Kuwaitis.
The Omani government has embarked on a process of localization/Omanization of the
workforce. Aycan et al (2007:13) suggest that Oman “in common with other Middle Eastern
states has been heavily reliant on expatriate workers both for advanced technical and
professional expertise and for manual labour.” Ghailani and Khan (2004) argue that “The
government of Oman sees private sector as a vehicle of growth and development, where the
larger employment generation and absorption of Omani population in gainful employment is
more likely to occur”. Al-Hamadi et al (2007: 105) further emphasize the role of the private
sector when they argue that ”Through Omanization, it is anticipated that the Omani nationals
, rather than the expatriate workforce, will, in the longer term, promote efficiency and
effectiveness in both the public and the private sectors.”
LITERATURE REVIEW
Understanding student perceptions of future employment opportunities is important to

educators and recruiters. Knowledge of the student perceptions can be used to guide
instruction, advice, and recruiting tactics. It was indicated that students prefer public
accounting as their first choice of career while private industry accounting and working for
the federal government offer desirable jobs as well. In choosing long-term career paths,
private accounting and public accounting lead the way. One interesting finding reveals that
the students perceive no difference in the work-life balance issues offered between public,
private, and governmental accounting (Warrick et al. 2010).
Literature on motivational differences between public- and private-sector employees abounds

(Baldwin, 1984, 1987, 1991; Bellante & Link, 1981; Buchanan, 1974, 1975; Guyot, 1962;
Jurkiewicz, Massey, & Brown, 1998; Kilpatrick, Cummings, & Jennings, 1964; Newstrom,
Reif, & Monczka, 1976; Nowlin, 1982; Perry & Porter, 1982; Rainey, 1979, 1982, 1983;
Rainey, Traut, & Blunt, 1986; Wittmer, 1991). Baldwin and Farley (2001) and Rainey,
Backoff, and Levine (1976) provided comprehensive reviews of the public-private
comparative literature identifying several differences in public and private motivation. Public
employees place greater importance on job security than do private employees (Baldwin,
223
1991; Bellante & Link, 1981; Kilpatrick et al., 1964; Lewis & Frank, 2002; Warner, Van
Riper, Martin,& Collins, 1963). No pecuniary inducements—especially the opportunity to
serve society and the public interest—matter more to public than private employees
(Crewson, 1997; Kilpatrick et al., 1964; Rainey, 1982, 1983; Schuster, 1974). High pay
matters less to public than to private employees (Crewson, 1997; Wittmer, 1991).
One of the most perplexing and persistent trends in youth and employment is the
preponderance of youth preference for public sector employment. To examine this issue, let
us look at the public/private sector distribution of employment in Sri Lanka. As published
annually by Sri Lanka Department of Census and Statistics (Sri Lanka Census, 2004), public
sector employment represents around 25 percent of salaried employment in the country, and
only 13 percent of total employment in the country. Since 1990, public sector employment
has declined from 20 percent of total employment to 13 percent of employment. In turn,
private sector salaried employment has increased from 34 percent of total employment to 45
percent of total employment during that same time period (Sri Lanka Census, 2004a). Job
seekers prefer government jobs by 42 percent and owning one's own business by 23 percent,
while employed youth prefer government jobs by 28 percent and owning one's own business
by 36 percent. To the extent that the youth has direct experience in the world of work, the
preference toward public sector employment declines (STW, 2003).
Since the establishment of the modern UAE, talk of emiratisation and government efforts to
offer jobs to Emiratis in public and private sectors have not stopped.
Yet, emiratisation efforts have been hindered by several obstacles. As a result, some attempts
have proved successful, while most have failed.
With the major economic growth the UAE witnessed during the 1980s and the early 1990s,
pressure increased on the government to employ a huge number of unemployed nationals.
The government found itself in an unenviable situation. It is an irony to find jobless people in
an oil-rich country that produces and exports more than two million barrels of oil per day
(Rasheed 2010).
Bahrain, Oman and Saudi Arabia have seen the most intensive efforts to localise, ahead of
Qatar, the United Arab Emirates and Kuwait. The World Bank (2004) reports that only Oman
has taken steps to control employment in the public sector which, given national income
224
surpluses from oil revenues, has been expanded by the State to absorb qualified locals.
Expansion of the public sector also occurred in Kuwait (Al Enezi, 2002) and Al Dosary and
Rahman (2005) considered that the Saudi government has turned its public sector into a “vast
social welfare system” by hiring locals for non-existent jobs to tackle unemployment
problems – a situation that has led to
motivation problems among many government employees (Sadi and Al Buraey, 2009).
Meanwhile, the Saudi private sector continues to favour foreign labour (Al Shammari, 2009).
The lack of fit between locals and the private sector is also seen in the United Arab Emirates
where locals have been “demoralised and confused” by workplaces increasingly geared to
Western management practices such as performance-related rewards and a customer-focused
culture (Al Ali, 2008).
Throughout Oman, Bahrain, Saudi Arabia, Kuwait, Qatar, and the UAE, nationalization
programs designed to foster the participation of citizens in the workforce have been in place
for many years. While all of the aforementioned countries have managed to reduce the
reliance on expatriate labor in the public sector, the private sector significantly lags behind in
achieving similar levels of nationalization (Forstenlechner, 2008). The UAE, alongside
fellow Gulf Cooperation Council (GCC) member states – are facing an unprecedented job
creation challenge (World Bank, 2004). According to data, 97.8 percent of private sector
organizations are willing to hire Emiratis, however, many pursue positions in the public
sector. An overwhelming number of Emiratis are choosing non-scientific based careers
because of various factors, including lack of awareness or social constraints. Labor market in
the UAE currently stands at 75 percent expatriates to 25 percent Emiratis (Gulf News, 2011).
Therefore, this study aims to extend and enrich previous research within the GCC and the
UAE in particular. The possible contribution of this study extends beyond the UAE as the
majority of GCC countries face similar problems within an arguably similar cultural,
demographic and economic context.
RESEARCH METHODOLOGY
This survey involved collection of empirical data from a convenient sample of 212 Emirati
students at a leading University in the UAE. The sample had a good representation of male
and female respondents as well as those with prior work experience and those without. It also
represented students from different disciplines at the local University based in Abu Dhabi.
225
The present study is exploratory in nature; it employs a detailed descriptive quantitative
paradigm through using a comprehensive and detailed questionnaire. This is specifically
beneficial when a researcher needs to clarify his understanding of a situation or a problem,
samples are usually small (Robson, 2002). Due to this reason, only one University was
chosen for the study. Respondents were given assurances that the purpose of the research was
to discuss their experiences of Emiratization. Research of this kind in the Gulf is sensitive
and relatively uncommon as it is socially undesirable to appear to be criticising government
policies.
To better understand the variations in the perception of men and women, respondents from
government, semi government and private sectors were selected by stratified sampling
method. Objective oriented data was collected through a structured questionnaire which
focused on issues relating to employment status, job expectations, ideal job attributes and
training opportunities. Finally the importance of education and its relevance in career growth
was analyzed to understand if there are any gaps in enabling smooth transition from the
learning environment to a career environment. The sample data is analyzed through
measuring basic descriptive statistics in the form of cross relationships. Rank Correlation test
was also done to analyze the data.
The following table provides an insight into the overall profile of survey respondents:
“Insert Table 1 Here”
Success of & Expectations from Emiratization
A high percentage (74%) of Emiratis feel Emiratization has been an enabling and important
factor in their professional growth and success. While this is somewhat expected, a more
detailed breakdown provides unique insights.
1. 78% Emirati females consider Emiratization as an enabling factor in their professional

success as compared with 66% Emirati males,
226
2. More Emiratis (74%) who are under the age of 30 years consider Emiratization as an
enabling factor in their professional success as compared to Emiratis above the age of 30
years (58%),
3. Non-working Emiratis (76%) are more positive on Emiratization than working Emiratis
(68%),
These insights raise some interesting questions as to why Emiratis below 30 years of age,
non-working Emiratis and females have a more positive outlook towards Emiratization?
Detailed studies to identify reasons behind this can help better address some of the concerns
seen by other groups. At the same time, the results would also prove useful in understanding
what targeted approach needs to be adopted to meet the huge expectation that the below 30
years of age and non-working group has from Emiratization.
Working Female Emiratis are significantly more positive on the contribution of Emiratization
in their professional success than their male counterparts. This can be attributed to various
motivations and problems associated with their employment and education in UAE. Women
in the UAE live in a family-based, patriarchal, Islamic society where gender-roles are strictly
defined and kinship is highly emphasized. While, most parents in the UAE support their
daughters’ education (Gallant & Pounder, 2008), there remains a view that education could
interfere with the mother training her daughter in traditional tasks. One of the major factors
that influences women’s participation in the workforce is the difficulty of balancing family
and work responsibilities (Aryee et al., 1999; Hijab,1988; Rugh, 1985; Sha’aban, 1996). Due
to all these difficulties faced, Emirati women are more positive on the contribution of
Emiratization policy as it provides them the feeling of equity and independent.
Current efforts in promoting Emiratization
Non-working Emiratis were very positive on the current efforts in promoting Emiratization.
79% of them felt that the current efforts being made were good. However, the opinion was
more evenly split amongst the working Emiratis. While 51% felt the efforts were good, 49%
felt more needed to be done particularly in improving efforts within the private sector and
providing more adequate training to Emiratis for them to be better prepared for the jobs on
offer.
This aspect highlights some of the challenges of the Emiratisation program. While Emiratis
are generally very positive about it and see its contribution in their professional success, they
clearly see a mismatch in the efforts being made to better equip them (through industry
227
relevant training and university courses) and prepare them to take on the opportunities that
may exist.
Ideal Job Attributes
Salary, career progression and benefits (such as accommodation, education for children and
medical insurance) are the top three attributes that matter to Emiratis while deciding on a job.
Given that 85% of the non-working Emiratis aspire to work in the government or semi
government sector, it clearly seems they believe that all these attributes are better provided
for in government and semi-government jobs rather than the private sector.
Career growth could be considered to be better within the government and semi-government
sectors given the emphasis that the government has placed on Emiratization and the efforts
many entities are making towards recruiting and retaining Emiratis by providing them with
greater opportunities and faster promotions. In comparison, within the private sector career
growth may be slower as Emiratis have to compete with global and more experienced talent
and don’t benefit from Emiratization programs as they are generally not emphasised enough.
For any entity that is looking to recruit Emiratis or improve its Emiratization rates, it is
therefore important to understand what matters to Emiratis based on whether they are
recruiting an Emirati male or female who is currently working or is seeking for his/her first
employment. A good understanding of what matters can help entities in the private and public
sector tailor their communication and value proposition according to the needs of the target
segment. A poor understanding may lead to companies believing they are offering a lot, but
just not realising that what they offer is really not a priority for the segment they are
targeting. For e.g. flexible working hours is an important consideration for Emirati females
looking at first time employment and matters more than career growth. Therefore,
highlighting the flexibility that the entity offers may have a greater impact than talking about
the long term career growth opportunities, which are a relatively lower priority for them.
Looking at the detailed breakup, working Emirati males rated career growth and development
as the top most job attribute whereas Emirati females rated salary as the most important.
Rank Correlation test was also done in which Correlation Coefficient (r: 0.7988, Critical r:
±0.648) was observed and hereby rejects the Null Hypothesis. The sample (n=10) provides
228
evidence that the populations are rank correlated. This also shows that there is a considerable
level of agreement between the two groups in the ranking of their parameters.
Non-working males and females ranked salary as the number one job attribute followed by
benefits such as accommodation, education for children and medical insurance. Rank
Correlation Coefficient r= 0.5167 and Critical r ±0.700 was observed which failed to reject
the Null Hypothesis. The Sample (n=9) does not provide enough evidence to conclude that
the populations are rank correlated.
However, in case of non-working males and females the population subgroups are not rank
correlated. There is a different set of priorities between non-working males and non-working
females. Apart from salary and benefits which ranks the top most priority the importance of
other job attributes amongst both the subgroups varies considerably. Males gave more
importance to career growth and job security whereas non-working females consider flexible
working hours and availability of resources as more important job attributes.
When respondents were asked to rank their ideal job attributes based on their present
employment status; both working and non-working respondents ranked salary as prime ideal
job attribute. The reason may be many and varied. One of the reasons might be monetary
insecurity due to global downturn or the relatively high cost of living in UAE or the need to
sustain the very comfortable lifestyle that many are accustomed to. The Correlation
Coefficient was r=0.7333 and Critical r: ±0.700 which rejects the Null Hypothesis. The
sample (n=9) provides evidence that the populations are rank correlated. This also shows that
there is a considerable level of agreement between the two groups in the ranking of their
parameters.
Role & Importance of Education
91% of Emiratis believe that education is very important for their professional success,
particularly in preparing them for their first job or improving skill sets for the current job.
229
However, a proportion of Emiratis also felt that while education is important, the current
education system may not be preparing them well enough for the requirements of today’s
organisations.
At one level, the education system does not effectively mirror the needs of the public and
private sector organisations therefore leaving students somewhat unprepared to contribute
fairly quickly once they are in the work environment and at another, the education system
does not adequately emphasise on developing new courses that will place students well to
take advantage of new job opportunities within sectors that will dominate in the future,
particularly in line with Abu Dhabi’s Vision 2030.
The airline industry (in large part represented by Etihad Airways within Abu Dhabi) has been
one sector that has effectively collaborated with universities to offer relevant training courses
and thereby also improve the job awareness and profile amongst Emiratis. This is evident by
the fact that the airline industry is amongst the three most preferred sectors to work in for
Emiratis as well as amongst the top employer within the working professionals in the sample.
An even more commendable feat given that Etihad Airways was started less than 8 years ago
i.e. in late 2003.
Similar deep collaborations need to be undertaken between universities and various

companies / entities within an industry to improve the relevance of teaching at universities
and better prepare the youth for the work environment. In the long run, it will also help better
align the demand and supply (of Emirati talent) situation for various types of jobs thereby
reducing the dependence on expat professionals.
Education Goals of Emiratis Attending University
‘Improving skills for current job’ was ranked as the number one factor by both male and
female working respondents. For Emirati non-working females, the most important
educational goal was to prepare themselves for their first job. Other important reasons were
to improve their basic skills and help in self-enrichment. Most of the non-working females
were also pursuing education to explore a new academic or career area.
230
Importance of Education among Working Emiratis
About 94% Emirati females believe that education plays an important role in their
professional career. 87% of Emirati females attribute education as an important factor in their
job selection and performance. A lower share of 74% agrees that courses offered at a
university help in job performance, while those strongly agreeing with this statement are only
33%.
The trend was similar amongst the working Emirati males, though somewhat less emphatic.
94% of the Emirati males also believe that education plays an important role in their
professional career, though the proportion of those who strongly believe in this statement is
much less than the working Emirati female group. Similarly, 76% Emirati males attribute
education as an important factor in their job selection and performance and only 60% believe
that courses offered at a university help in job performance.
Despite high levels of government investment in education, the educational system in the
Gulf countries has so far failed to provide sufficient education, thereby creating another
disincentive for Emiratization (Muysken and Nour,2006; Budhwar and Mellahi, 2007;
Barber, 2008). Education is currently lacking in both levels (as most Emiratis entering
universities have to take foundation courses, which are remedial in nature) and in relevance,
as many university graduates have taken courses, which are irrelevant to work in the private
sector.
CONCLUSION
Emiratization has been an effective instrument in promoting employment opportunities for

UAE nationals and as a result the program has gained immense recognition amongst
Emiratis. There are however a few areas, that this survey highlighted, where Emiratis believe
more efforts needs to be placed to further improve the effectiveness of the Emiratization
program. These are:
1. Ensure that the education and job skills imparted, particularly in universities, are much better
aligned to the current job market requirements. University courses and teaching seem to be
out of touch with the requirements of the job market.
231
2. Offer newer and more relevant courses to attract Emiratis to more technical fields and to
industries that will be the cornerstone of the economy in the next few decades. There are
industries that have significant job opportunities and can benefit from the Emirati talent but
few Emiratis have the right educational qualification to take up those jobs (link the education
sector with the desired economic goals of Abu Dhabi Economic Vision 2030).
3. Emiratization efforts within the private sector have to be significantly improved and this is
likely to happen only when the various disparities between the government and private sector
jobs (in salaries, work-life balance, etc.) are reduced.
4. Emiratis are looking for a more streamlined approach to help them find suitable jobs. There
are relevant jobs in the market and well qualified Emiratis looking for these jobs, but a more
effective and efficient way is needed to identify and connect the two.
More in-depth insights into what Emiratis are looking for in their professional careers may
help in developing and fine tuning some of the Emiratization initiatives and improve the
effectiveness of Emiratization programs.
232
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Table 1: Respondent Profile
Working Non-Working*
Female Government 32 Female Government 56
Private 6 Private 13
Government
Semi- 8 Semi
22
Government
Total 46 Total 91
Male Government 35 Male Government 10
Private 5 Private 3
Government
Semi- 11 Semi
6
Government
Total 51 Total 19
Working Total 97 Non-Working Total 110
*Breakup by sector in which they would like to work
Note: Detailed breakup for 5 respondents was not available
241
Table 2: Detailed Breakup of Ranking of Ideal Job Attributes (Top 5)
Working Non-working
Rank
Males Females Males Females
1 Career Growth Salary Salary Salary
Benefits
2 Salary Career Growth Benefits
3 Friendly work Benefits

environment Career Growth Flexible work
hours
Friendly work environment

environment Friendly work Availability of
4 Benefits
Resources
5 Job security Location Job security Career Growth
Note: Benefits includes aspects such as accommodation and education allowance and
medical coverage; Availability of Resources includes IT, support services, administration etc.
242
Table 3: Ranking of Ideal Job Attributes by Working & Non-Working Groups (Top 5)
Rank Working Non-working
1 Salary Salary
2 Career Growth Benefits
3 Availability of Resources Flexible work hours
4 Benefits Friendly work environment
5 Friendly work environment Career Growth
243
Table 4: Education Goals of Emiratis Attending University (Top 3)
Working Non-working
Rank
Female Male Female Male
1 for
Improve
current job
skills for
Improve
current job
skills job
Prepare for first Prepare for first
job
2 Improve
skills basic Self-enrichment Improve
skills basic Improve basic
skills
3 academic
Explorefielda new
career or Improve basic Self-enrichment Explore a new
academic or
skills
career field
244
Pre-service teachers’ professional identities in field experiences:
a case study of Prince of Songkla University, Thailand.
Payao Lakateb
Dept. of Social Sciences,
A.Muang CH.Pattani 94000
E-mail: payao.l@psu.ac.th, plakateb@gmail.com
Abstract: This paper focus on identity development of pre-service teachers ‘reflection: the
development of their own self-image as a teacher. In making the transition from student to
teacher, pre-service teachers create their own professional identity. Professional experience is
considered as a bridge between the academic coursework and the realities of classroom
teaching. The research methodology of this study was qualitative, case studies of each of the
five pre-service teachers were constructed and a cross-case analysis was performed. This
study found that pre-service teachers’ formation of their professional identity is shaped by their own
teaching and learning experiences in professional practicum. The meaning of being a teacher were
three themes such as intellectual content, intentional fulfillment for student and treat them
with love and compassion. The study suggests developing the social aspects of teacher
identity formation in training practicum. Stronger links between teacher education and
society might better prepare students for their future work.
Keywords: field experience, teachers’ professional identity, pre-service teacher
Paper present at The 6th Multidisciplinary Academic Conference in Prague 2016, Czech Republic
(The 6th MAC 2016).
Conference Topics: Education, Teaching and Learning (Indigenous and Diversity Issues)
245
INTRODUCTION
Teacher education is a process of developing teacher profession throughout the culminating course
and teaching practicum. In Thailand, teacher education curriculum based on the reformed curriculum
of five years teachers training program. Teaching practicum set on the final year of curriculum. Pre
service teachers study four years of coursework and have one year of practice teaching in networking
schools. The program aims to have deep and wide knowledge in the subject matter and apply this kind
of knowledge in real situations. Because of teaching practicum is considered as a bridge between the
academic coursework and the realities of classroom teaching (Beeth & Adadan, 2006; Kagan, 1992).
So, Pre-service teachers also have the opportunity to work with students which serves as a preparatory
activity before they assume the full responsibilities of an in-service teacher.
Teacher education in Thailand currently is undergoing a period of learning reform. The primary goal
of the Thai educational reforms is to help teachers become more aware of ways to improve student
learning and how to modify teaching to meet the new learning standards (Chatree, Ekgapoom, and
Vantipa, 2011:830).
Before the 1999 National Education Act ,teacher training institutes produced a four-year program
curriculum. The five-year program requires pre-service teachers to study coursework for four years
and one year in school. The curricula provide students with learning and activities intended to form
good teachers corresponding to the National Education Act and to the needs of
society(Pennee,Teerachai,and Nuchwan,2012:1047). And also this program is considered as a process
transition between teacher education and working life. In fact, teacher professional socialization was
an important time for students to begin to create a solid teacher identity that would support and sustain
them in their future profession. Socialization is a lifelong process by which a person learns the ways
of a group or society in order to become a functioning participant. It is a process that produces
attitudes, values, knowledge, and skills required to participate effectively as an individual or a group
member. Professional socialization of a teacher implies the transition of the graduate to a full-fledged
professional that is facilitated if there is congruence between the norms, values, and expectations of
the educational program and the realities of the work setting. From their experiences, teachers develop
the ideas that will guide their future practices.
In conclusion a teacher education five year curriculum required as a part of a coordinated program of
practice teaching and professional development. The transition between teacher education and
working life as a teacher has traditionally been described as a question concerning application of
teacher knowledge that is acquired within teacher training and subsequently applied in practice.
LITERATURE REVIEWS
Identity, social identity concept is a person’ knowledge that he or she belongs to a social
category or group (Hogg and Abrams,1988).Through the process self –categorization or
identification, identity is formed. Beijaard et al. (2004:113) explained teacher identity as the
ongoing process of becoming and being a teacher So that, teacher professional identity is
formed on the identification of characteristics of teachers’ professional identity and
identification of building characterized by an ongoing integration of what is individually and
collectively seen as relevant to teaching.
246
The pre-service teacher’s sense of identity and personal knowledge is continually challenged
during teacher preparation. According to Henkel (2005:156 ), professional and social
identities are developing in relation to the learners’ orientation towards their studies and
future profession. Field experience is one of the most element for developing professional
competencies, pedagogical skills and challenging for the student teacher, especially in terms
of negotiating professional identity (Zembylas, 2003 cited in Kaelin, Brian 2013:12 )
Therefore, student teachers enter training practicum with quite strong and varied notions,
attitudes and values concerning teaching as a result of their previous experiences of the
education system. The notion of self, the development of teacher identity, good teaching and
a good teacher has been noted as important in teacher thinking and classroom actions.
Thus, there is evidence that field experience can contribute to the professional development
of pre-service teacher identity, such as a space of learning within teacher education. Learning,
according to Wenger(1998:215) is a process of constructing identities in relation to these
communities. The components of learning such as meaning, practice, community and identity
are closely and mutually connected. In conclusion field experience can provide meaningful
opportunities for developing professional teacher identity.
METHODOLOGY
This study utilized the qualitative method to explore what are pre-service teacher perspectives
on how field experiences contribute to the development of an individual’s teacher identity.
Qualitative method was used because this method allows researcher to explore the interest of
the study in a natural setting. This qualitative study relies on a case study analysis that
intended to obtain understanding about phenomenon within its context using a variety of data
sources (Robert Stake ,1995).
A case study analysis relies on participation observation in order to directly observe a variety
of activities in order to understand the role of pre-service teacher during professional
experiences. . However, case study research does not rely on a single source of data but
gathers multiple sources of information (Creswell, 1998:39). Data are collected through five
pre-service teacher of Prince Songkla University candidate interviews, mentoring teacher
interviews, and collection of artifacts including journals, student teaching files, and
mentor/supervisor mid and final evaluations. These multiple types of data are analyzed using
a general inductive approach to qualitative data analysis (Thomas, 2006).
FINDINGS AND CONCLUSIONS
The meaning of being a teacher were three themes such as intellectual content, intentional
fulfillment for student and treat them with love and compassion. Teaching practicum is a
central component in any teacher education program regardless of the level of the program. It
is also a time for student teachers to experiment with the knowledge obtained and put it into
practice. Teachers must be knowledgeable consisting of contextual knowledge, subject –
matter knowledge and pedagogical knowledge. In additional, a good teacher is one who is
able to bond with his/her students with performing duties with energy and intentional
fulfillment for student. Student teachers who pass professional experiences that reflect
247
thoughts, feelings and learning to be a teacher. Good teachers learn that treat them with love
and compassion. Furthermore, the meaning of being a teacher results that the students state
that their approach to the learning process will be decisive in determining the kind of teacher
that they will become. Responsibility and collaboration are also seen as connected to the
professional activities as a teacher, and as central aspects of the professional teachers’ role.
Field experience has a significant role in assisting the pre-service teachers gain expertise and
confidence in their content-specific teaching. As a culmination of teacher learning, student
teaching is viewed as the point at which all teacher preparation comes together. So that,
teacher education institutions themselves as a way of asserting what makes a good teacher.
While there is a diversity of conceptions of the teacher role within this root metaphor, it
generally presumes that a person who sufficiently knows content, pedagogy, and student
cognitive and emotional development is able to be effective in a classroom. The perceiving of
activities, environment and emotions as personally meaningful contribute significantly to the
development of identity. The habit of asking oneself constantly how or why a certain
situation came into being or why it is essential to look for answers to questions raised helps to
change (develop) identity.
Payao Lakateb is a lecturer at Faculty of Humanities and Social Sciences in Prince of

Songkla University, Thailand. He is Ph.D. candidate in Applied Behavioral science Research,
Srinakarinwirot University, Thailand. He received master degrees in Sociology from
Thammasat University, Bangkok, Thailand. His has two bachelor degree from Prince of
Songkla University, Thailand and Ramkhamhaeng University, Bangkok, Thailand. His main
research interest is in Social psychology, Sociology. He has presented his work in journal and
at several international conferences.
248
REFERENCES
Beeth, M. E., & Adadan, E. (2006). The influences of university-based coursework on field
experience. Journal of ScienceTeacher Education, 17(2), 103-120.
Beijaard, D., Meijer, P. C., & Verloop, N. (2004). Reconsidering research on teachers’
professional identity. Teaching and Teacher Education,(20), 107-128.
Chatree Faikhamta, Ekgapoom Jantarakantee and Vantipa Roadrangka.(2011). The Current

Situation of Field Experience in a Five-Year Science Teacher Education Program in
Thailand. US-China Education Review, 829-839.
Henkel, M. (2005). Academic identity and autonomy in a changing policy environment.

Higher Education, 49, 155–176.
Hogg, Michael A. and Dominic Abrams.(1988) social identifications: A social psychology of

intergroup relations and group processes. London: Routledge.
Kaelin, Brian. (2013). Preservice teacher perspectives on field experience, the development
of teacher identity, and professional practice. Doctor of Education (EdD).
Korthagen, F., & Vasalos, A. (2005). Levels in reflection: core reflection as a means to
enhance professional growth. Teachers and Teaching: Theory and Practice, 11(1),
47-71
Kagan, D. (1992). Professional growth among preservice and beginning teachers. Review of
Educational Research, 62(2), 129-169.
Pennee Kantavong, Teerachai Nethanomsak and Nuchwan luang-ungkool. (2012). Inclusive

Education in Thailand after 1999 National Education Act: A review of a pre-service
teacher education system. proceedings. Social and Behavioral Sciences (69) 1043-
1051.
Robert Stake.(1995). The Art of Case Study Research. Sage publications,Inc.
Thomas, David R. A.(2006). General Inductive Approach for Analyzing Qualitative

Evaluation Data. American Journal of Evaluation.27(2) 237-246.
Wenger, E. (1998). Communities of practice. Leaning, meaning, and identity. New York:
249
Secondary Education in Malaysia: A Study on the Concept of “Hero” in the History
Textbook
Numan Hayimasae, Ph.D.

Section of Malay Studies,
Prince of Songkla University, Pattani, THAILAND
Email: hayimas@hotmail.com
Abstract
Textbooks are instruments to be media of knowledge transmission for the modern
education. Since the textbook is produced under the monitor of the state, the content
of knowledge, of course, designed as the demand of the political force through group
of special committee or authorized authors. So as it has no possibility to avoid from
bias and the state dominant or discourse in history. The example of the discourse, that
becomes the keyword of the paper is about the hero in the textbook with the case of
the Malaysian secondary school. Besides it reflects through the autobiography, it is
also used their names as the names of roads, buildings, places, etc., in order to
reproduce the knowledge to the mindset of the people as a collective memory and
always realized their past tremendous past efforts. The paper argues that the words
hero mentions in various part of the content to indicate their efforts in various forms
from intervening, infringing the right and struggling for the independence. Malaysia
has achieved in implementing knowledge to construct the plural society and the sense
of patriotism.
Keywords: Hero, Secondary Textbook, Malaysia
250
Secondary Education in Malaysia: A Study on the Concept of “Hero” in the History
Textbook1
Introduction
A textbook is an important element for the process of learning and an instrument
functioned as the media of knowledge transmitted to the students. Textbooks are normally
produced by authors who are under the monitor of the political force. The content of history
textbooks is often determined by the political sectors under adoption boards and ideological
pressure groups. Knowledge in the textbooks thus is considered to be a kind of discourse or
the set of knowledge which state had produced for the purpose of creating sense of belonging
to his people as well as to nurture loving to the state. Textbooks are functioned as the best
instrument to promote the people unity among the youth. Beside main contents of subject
textbooks, they are mixed with the matters relating to ideas, thought, and approach that the
state wants to be. The textbooks related to the discussion are about humanities and social
sciences especially history textbooks.
Of many part of the historical contents in the textbooks, history in the textbook, which
considered as the “national history”, it never misses to load the important persons through the
history of the state. This is the source of the word “hero” or “heroin” mentioned commonly to
raise the names of such important persons as the “import persons” that the learners have to
know and memory. The concept of being hero is always together with the national history.
The case is also found in the history textbook in the secondary school in Malaysia, one of the
plural ethnic society countries in Asia.
This paper attempts to discuss the concept of hero as named in the history textbook in
the Malaysian secondary education. Malaysia is chosen to study because his major citizens
are originally from extremely different background in terms of race, culture and language,
and religion but they could live harmony with political stability since it was independence in
1957. From this achievement, of course, the system of education is one of major role to shape
the citizens into peace and harmony society. Prior to discuss on the hero, a little bet gives
general picture on the concept of her and discourse, followed by the historical development
of historiography on the history in the textbook, and the last section is summary.
Discourse, Knowledge and Hero

The definition of the discourse related to this study is about the nexus between the
knowledge and political power. Such the knowledge is produced by persons who are under
monitoring of the state. Discourse and power is related each other and according to Foucault,
truth, morality, and meaning are created through discourse. Every age has a dominant group
of discursive elements that people live in unconsciously. In the past, the idea of individualism
was prominent in American discourse. To not be individualistic, i.e. be “communist”, was to
be evil. So that discourse in a college class, more particularly, will ultimately privilege ideas
of what is normal (“good” and “normative” morals); by stressing these values, education will
implicitly marginalize those who don't hold those values. Foucault very persuasively explains
how power works and why some people perform very irrational acts, it has some serious
drawbacks. Within Foucault’s world view there is no absolute morality. Morality is created
through the exercise of power. What this means ultimately is that if one were to take Foucault
to his extreme, there would be no basis for saying that any act that we typically think of as
immoral is in fact immoral. Discourse has function in impress knowledge created by power to
presented at the 6th Multidisciplinary Academic Conference in Prague 2016, Czech Republic (The 6th
1Paper
MAC 2016)
251
be existence and approval by common people widely (valorize) by which finally become
what we known as “dominant discourse”) or as Foucault called “episteme”2
From the short review on the discourse, it can connect this to the study on hero in the
national history printed in the textbook at secondary school in Malaysia. Personalities who
are mentioned as hero in the textbook is the truth that the power, meaning the Malaysian
government, want his people acknowledge. This function is, of cause consistent to the way of
government that needs his people under control. Since discourse can affect the person's
perspective; it is impossible to avoid discourse. For example, two notably distinct discourses
can be used about various movements describing them either as “freedom fighters or
“terrorists”. In other words, the chosen discourse provides the vocabulary, expressions and
perhaps also the style needed to communicate.
About the term “hero”, a hero (masculine or gender-neutral) or heroine (feminine)
refers to a person or main character of a literary work who, in the face of danger, combats
adversity through impressive feats of ingenuity, bravery or military strength, often sacrificing
his or her own personal concerns for some greater good. The concept of the hero was first
founded in classical literature. It is the main or revered character in heroic epic poetry
celebrated through ancient legends of a people; often striving for military conquest and living
by a continually flawed personal honor code.
On the perspective of the history as a humanities or social sciences, there is no any
history being written without consideration of the names of brave personalities. These
persons risked their lives to try to save or protect the lives of others. A lot of example heroes
represents both in the world history and local history. This is especially when mention to the
national history, the history of modern nation-state. The philosopher Hegel gave a central role
to the “hero”, personalized by General Napolean, as the incarnation of a particular culture's
Volksgeist. Thomas Carlyle’s 1841 On Heroes, Hero Worship and the Heroic in History also
accorded a key function to heroes and great men in history. Carlyle centered history on the
biography of a few individual names namely Oliver Cromwell, Frederick the Great, and the
Prophet Muhammad. His heroes were political, military and religious figures, the founders or
those who succeed struggling for the states.
Method
Method used in the study is mainly from reviewing documents related. The main
documents are the Malaysian history textbook at the level of secondary education, upper and
lower. These textbooks actually produced and printed under the monitor of the Ministry of
Education and based on the latest secondary education (called KBSM) that proclaimed since
1989. The former history textbooks also used to analysis their content compared to the
present version. Studies, reports and academic works related to discourse, textbook and hero
are also brought by extracting main ideas and associated into the portion of this paper.
Finding
The finding of the study has two parts; the historiography of the writing history in the
textbook and the concept of hero in the Textbook.
The historiography of the writing history in the textbook had passed 2 main epochs;
during colonial period and independent period. The detail is as the followings;
1. Colonial period
The British Malaya, the latest colonial power in the present Malaysia, had never seen
the local history as the major part of the British Malaya history, in contrast the British
colonial power viewed the local one as the “dangerous” history and if the people known and
2Foucault, M.. 1972. The Archaeology of Knowledge (Tavistock Publications, Ltd., Trans.). London:
Rutledge., p 191-192.
252
well understand on their history it might affect directly or indirectly to the administrative and
economy of the colonial. The history in the textbook during this period thus emphasized only
the history of the British Empire and the World history.3 The definition of the World history
is about the history of major ancient state in Asia namely Egypt, India, China and the two
great world empires; Greek and Rome.4
Through the history of the British Malaya, beginning at least in 1786 up till the period
of the World War II, the goal of the curriculum concerning to the subject of history for the
high school is unclear but only for the political purpose.5 The history content focused on the
History of British Empire which later became the states under “Commonwealth”. The British
much gave attention to the importance of the British culture which included the historical
aspect. The British viewed that if the people in his colonial lands know well about the British
culture, it is easy to make close relation each other.6 History curriculum in the British school
in Malaya highlighted in order to promote those who would come to the British authorities in
the British Malaya. While in the Malay school, of course, the history of the Malays was
emphasized in order to link their historical heritage. The textbook used is called “Hikayat” or
the Malay legend.7
The content of the Malay history became clearer after the establishment of the
Institute of Teaching in 1918 in Melaka (to the southeast coast of Malaysia). The Malay
history was a core subject to instruct in the institute, with the subject name
“Tawarikh”(History Science). Generally, the institute was instructed mainly by Malay
intellects. The Malay history textbook was written more systematically a few year later under
the name “Sejarah Alam Melayu”(History of the Malay World). It was firstly introduced at
the Institute of Teaching Tanjong Malim, Perak State (to the north and lay down to the west
coast of Malaysia), which established in 1922.8 However, the teaching Malay history was not
all over similar institutions in the British Malaya. Meanwhile, the authors to the Malay
history at the beginning period were mostly among the British educator-administrator like
Francis Light, Stamford Raffles, Hugh Low, Frank Swettenham and J.W.W. Birch. It was
not surprised that the detail of the historical context being under the framework of the British
colonial history.
2. Independent Period
At the beginning period of the independent Malaya (the Malayan Union in 1957 and
Malaysia in 1963), the most popular history textbook was conducted by Joginder Singh Jessy.
This textbook had some changes compared to the previous version. However, it was not
beyond the influence of his former history teachers.9 One of them was K’G Tregonning, who
was once appointed as the head of the history department at the University of Malaya based
in Singapore.
The status of the Malay history was explicitly mentioned for in the Malaysian
curriculum in 1959 when “Ilmu Tawarikh” (The History Science) was initiated to teach in the
upper primary school. The content was included the early period of human beings, historical
development of Malaya before and after the British colonial period, ancient world
3Omar bin Mohd. Hashim. 1992. “Falsafah Pendidikan Sejarah”, in Sejarah Dalam Pendidkan. Kuala
Lumpur: Dewan Bahasa dan Pustaka, p 3. ; Khoo Kay Kim. 1992. “Perkembangan Pendidikan Sejarah di
Malaysia” in Sejarah Dalam Pendidikan. Kuala Lumpur : Dewan Bahasa dan Pustaka, p. 14.
4Khoo Kay Kim. Ibid, p. 14.
5 Ibid.
6Ibid, p. 15.
7 Ibid, p. 16-17 ; Haris Md. Jadi. 1990. Etnik, Politik dan Pendidikan. Kuala Lumpur : Dewan bahasa dan
Pustaka, p. 12.
8 Khoo Kay Kim. Ibid, p. 17.
9 Joginder Singh Jessy. 1964. Malaya in World History. Penang: Peninsular Publications, p.iii.
253
civilization; Sumaria, Mesopotamia, Egypt, India, China and some others.10 While at the
secondary level, history curriculum represented wider space and time.11
The major change on the history curriculum occurred again in 1966. This new
curriculum was much concerned about Malaysia. It was also coincident with the tragedy
incident happened a few years later. The riot had happened in May 1969 which conflicted
between two major ethnics in Malaysia, Malays and Chinese. Thinking about this tragedy, the
government had looked at the importance of the people unity under the condition of the
country in which has plural society. It also linked to the planning for the future national
education. Later on, Dasar Ekonomi Baru (DEB/New economic policy) was proclaimed to
promote co-existing life in this plural society. The new policy affected also in the educational
system especially the implementation of the curriculum, which the government again was
reformed the curriculum in 1973. The government through the special committee did research
on the current status, problems and new direction of the future curriculum. The committee
reported that the former curriculum was not offer the process of the critical thinking which
was really need in the epoch of globalization.12 The 1973 curriculum also aimed at
enhancing the youth how to think and create things based on their knowledge obtained from
the textbooks and classrooms. It was not just known and understood what they learn but take
to the real life and able to solve any problems they faced. This pattern is what the educational
terms called “to build effective learning other than cognitive learning”. As well, the aims of
the curriculum focused on how to live with the people of the different races, languages and
religions to avoid the conflict among them. The final aim of the national education, was to
construct the ideology of “being ours” “understanding between people of the different ethics”
and “being curious to learn the history”.13
After 2 decades of the curriculum implementation, in September 1974 the government
under the Prime Minister Mahathir Mohammed was form the special committee to scrutinize
the previous curriculum implementation, and Mahathir Mohammed himself the president of
the committee. In 1979, the official report was presented, with some important
recommendations that needed the rapid reformation in the national education. One of the
major issues was about how the educational system could enhance students to be professional
labors needed by any sectors and consistent with the consciousness of the state, and support
the unity of the citizen in the nation. The national education was the major device in sustain
and train them beginning from the school level.14 It then led to the proclamation of the new
curriculum which later named “Kurikulum Baru Sekolah Rendah (New Curriculum for the
Primary School) in 1983 and followed by “Kurikulum Bersepadu Sekolah Menengah”
(Integrated Curriculum for Secondary School) in 1989. About the history subject there were
not much change in detail only in the aspects of politics, society and economy that related to
the people of various ethnics.15 According to the new secondary curriculum, KBSM
(abbreviation of Kurikulum Bersepadu Sekolah Menengah), the history subject is settled as a
core subject for the secondary students from year 1 – 5 (Tingkatan 1–Tingkatan 5).
Furthermore, the history was one of the compulsory subjects for the university entrance. This
curriculum has been implementing until the present. Only small part of the content had
changed time by time but not in the large scale.
10For detail see Santhiram, R. 1978. “The Development of History Teaching in School in Peninsular Malaysia
(1905-1978) An Examination of the Syllabuses and Textbooks” M.Ed. Thesis, Universiti Sains Malaysia. .
11Hazri Jamil. 2003. Teknik Mengajar Sejarah. Pahang : PTS Publications and Distributors Sdn. Bhd, p 18.
12 Asiah bte Abu Samah. 1979. “Perkembangan Sukatan Pelajaran Sejarah di Sekolah-sekolah di Malaysia”, in
Sejarah dalam Pendidikan. Kuala Lumpur: Ptn. Sdn. Bhd., p. 75-76
13Ibid.
14Mohamad Rodzi Abd Razak. 2009. “Pembinaan Negara Bungsa Malaysia : Peranan Pendidikan Sejarah dan
Dasar Pendidikan Kebangsaan.” JEBAT, 36, p. 100.
15 Hazri Jamil. Ibid, pp. 19-20.
254
The Concept of Hero in the Textbook
The concept of hero in the textbook is actually determined as a kind of discourse on
the national history or the history of the victory side. At the same time, the failure of another
side is marked as “the loser” who later on labeled as “rebel” or “enemy”. Thereby in the
border area of any new nation state must have both “hero” and “rebel” in only one particular
person. This can be found in the history of Myanmar and Thailand. In the history of
Myanmar, the national history views Siam (Old name of Thailand) during Ayuthia Period as
“the danger of Ayuthia” meanwhile in the Thai national history, in contrast, views the
Myanmar made a lot of trouble to Siam, and every time when the incidents happened, there
must have hero in one side and rebel or invader in another side.
The discourse on setting any person to be labeled as “hero” in the history textbook in
Malaysia, much depending on space and time and some heroes are only hero in their state,
not the represent the people of the modern nation of Malaysia. The textbook do not directly
define “hero”. The discourse on the hero in textbook can be found in different patterns as the
following details;
1) “Hero” of the state (meaning a territory in the nation-states of Malaysia) is a
hero who struggled against the colonial powers or other invaders to the state that he belonged
to. The hero’s significant role was to protect his state invading by the outside and to oppose
against unjust action happened especially during the colonial period. This is for instance,
Rentap, a hero of Iban in Sarawak. Rentab had succeeded to gather Iban people in his place
struggling against Brooke’s army in 1853.16 Dato’ Maharaja Lela, a noble in the Perak court
had fight with the resident located at the Perak court since he intervened into the works of the
Rajah of Perak and he declared new model of tax collection. This implementation made
unsatisfied to the local people and the court. Besides, there are some other heroes in other
states namely Dato’ Bahaman, the hero of Pahang, Mat Salleh, the hero of Sabah, Tok
Janggut, the hero of Kelantan, Haji Abdul Rahman Limbong, the hero of Terengganu and
Sharif Masahor, the hero of Sarawak
2) The heroes of the nation-state of Malaysia, is led by heroes who struggled,
in a large scale, against the colonial power especially the British colonial power until
Malaysia got freedom in 1957. These particular persons who later marked as heroes, took
actions in various forms softly and hardly. This hero is, of course, more well-known
compared to the former heroes.
Beside the discourse of hero reflected from a brief autobiography, hero is also marked
as a symbol of struggle for the new generation. The new generation especially among the
youth have to realize about their roles and firmly efforts to get an independence and
achievement as seen in the present Malaysia is as not easy as possible, the later generation
must think a lot on the their tremendous roles. The symbol of hero also is noticed or statured
at the historical place. Their names also become the name of road, village, place, and
building. This is for example Rentab Road in Sarawak and Hero of Perak Monument.
The building of such statue and monuments is a kind of the creation of the discourse
of power setting to be “an appearance” since let alone they are just mentioned in the printed
materials and presentation of their autobiographies, may not enough to get permission from
the people for a long term. They had to be presented in form of “physical material” used as
media which could forever represent their hero to this nation. As well, because of the
building such things being hero is always in the memory of the people in order to recognize,
understand, give opinion and to obtain knowledge about these heroes as long as possible
16Masariah binti Mispariet.al.. 2009. Sejarah Tingkatan 2. Kuala Lumpur: DBP, p. 169.
255
Such important signs indicate as only a component of discourse of power beside other
patterns by which the state has been tried to penetrate for the purpose of the people unity and
as the media to praise the national heroes even if their efforts did not achieve. With their
brave, resoluteness, royalty and respect to their own state while they had tried much to
protect their land from the invasion of the colonial powers.
The scene of hero is not limited only the Malay but also represent other ethnic
personalities. At the meantime there also gives attention to the heroin, that often emerge to
support men in some major incidents. This indicates no blockage people of different ethnic
and gender. The struggle among the female for example the struggle of Che Maznah, the
female leader to struggle against the planning of the Malayan Union, a Malay state under the
patronage of the British Malaya.
In the midst of claiming independence to Malaysia, the textbook also reflects some
specific perspectives of being hero for example, hero who seek the process to independence
through peace and negotiation approach with the colonial power. The most active people
were among those who were the toppers and founders of the three major ethnic organization,
UMNO, MCA, and MIC, representing Malay, Chinese and Indian respectively. The process
and the picture of this negotiate achievement had opened the gate to call for the independence
from the British colonial power. As well, from this effort, when the British assured that
political situation was stable enough to return the authority to them all and being capable to
keep well connecting with the British in various affairs as practiced formerly.17
The roles and efforts done by “heroes” had led to the declaration of independence of
the Malay state in 1957 with his own constitution. From now on this land became constitutive
on his land, people and political authority both interior and foreign affairs, and the military.
The textbook raises the political elites from these three parties as the most group of people
who could gather people without blooding lose, have similar agreement on the position of
citizenship, national language, Islamic religion and other religions’ status. This crucial roles
and effort deserve to get high prestige and get recognized by the new generation.18
Conclusion
The history in the textbook in Malaysian secondary school is one of the national
history examples that attempt to transmit the knowledge of the state in form of thought and
patriotism to the state and the state unity. Even though Malaysia had began with the separated
Malay territories, he could pass the period of hardness especially during the colonial periods
for more than 400 years. The consequence from that is that the major change happened in the
society structure from the single society to the plural society. Malaysia as the nation state has
to preserve people from other ethics in order to keep moving forward for the state stability
meanwhile the Malay, as the original being also keeps its status.
Although the history printed in the textbook is an “exclusive” history that quite
different from the history conducted by professionals or even there are some
misunderstandings according the latest historical research finding. The state has a necessity to
maintain the content until the interpretation being clearer and, consistent to the benefit of the
state.
The subject matter on the national history relating to the concept of “hero” is
considered as the discourse that really depends much on the situation and relation between
knowledge and the power. In other words anybody who control the right to set up
“knowledge”, is the most powerful to guide the people into the way he wants. Malaysia
through the Ministry of education has alone the right to frame the ideas to load into the
17Ramlah Adam, Abdul Hakim bin Samuridan Muslimin bin Fadzil. 2009. Sejarah Tingkatan 3. Kuala
Lumpur: DBP, p. 134.
18 Ibid, p. 158.
256
mindset of the people to go to the same direction. On the perspective of the state, discourse is
very important to frame knowledge to his people. The truth of the knowledge framed by the
state is called “regime of the truth” since the people who have the political power, strongly
believe such the truth has to be functioned by setting the procedure and rule by which people
in the state have to follow without any conditions to avoid it but having no any punishment or
rewards. Discourse of the state also penetrates through many other sources that easy to access
like newspaper, drama, television, advertisement and literature.
Reference
Asiah bte Abu Samah. 1979. “Perkembangan Sukatan Pelajaran Sejarah di Sekolah-sekolah
di Malaysia”, in Sejarah dalam Pendidikan. Kuala Lumpur: Ptn. Sdn. Bhd.
Foucault, M. 1972. The Archaeology of Knowledge. (Tavistock Publications, Ltd., Trans.).
London: Routledge.
Haris Md. Jadi. 1990. Etnik, Politik dan Pendidikan. Kuala Lumpur : Dewan bahasa dan Pustaka.
Hazri Jamil. 2003. Teknik Mengajar Sejarah. Pahang : PTS Publications and Distributors
Sdn. Bhd.
Joginder Singh Jessy. 1964. Malaya in World History. Penang: Peninsular Publications.
Khoo Kay Kim. 1992. “Perkembangan Pendidikan Sejarah di Malaysia” in Sejarah Dalam
Pendidikan. Kuala Lumpur : Dewan Bahasa dan Pustaka.
Masariah binti Mispariet.al.. 2009. Sejarah Tingkatan 2. Kuala Lumpur: DBP.
Mohamad Rodzi Abd Razak. 2009. “Pembinaan Negara Bungsa Malaysia : Peranan
Pendidikan Sejarah dan Dasar Pendidikan Kebangsaan.” JEBAT.
Omar bin Mohd. Hashim. 1992. “Falsafah Pendidikan Sejarah”, in Sejarah Dalam
Pendidkan. Kualu Lumpur : Dewan Bahasa dan Pustaka.
Ramlah Adam, Abdul Hakim bin Samuridan Muslimin bin Fadzil. 2009. Sejarah Tingkatan 3.
Kuala Lumpur: DBP.
Santhiram, R. 1978. “The Development of History Teaching in School in Peninsular
Malaysia (1905-1978) An Examination of the Syllabuses and Textbooks” M.Ed.
Thesis, Universiti Sains Malaysia.
257
Phd(c)Labeat Mustafa, Faculty of Business, Haxhi Zeka - University of Peja, Kosova
Challenges and managing of Small and Medium Enterprises in Kosova

Abstract
In the study are treated the some of problems of SME, managing of Kosovo SME in
conditions of modern economy and challenges which are these enterprises going through
now.
Economic globalism is part of the environment in fast change by which are facing businesses
that are not bordered only by national borders but they are facing with harsh international
competition.
The essence of successful managing is that managing should be more flexible in facing with
changeable and unsecure environment.
Some of the difficulties for Kosovo SME are considered not favourable customs and fiscal
politics (especially for new enterprises), high informality, not loyal competition, etc.
Overcoming of difficulties and development of SME is being reached with: increasing of the
level of qualification of workforce; with supporting of businesses with tradition and
producing economy; with creation of general valuable political climate for supporting of
SME etc.
Key Words: Globalism, SME, managing, challenges, competition.
I. Business environment in Kosovo
The climate of doing business
Improving of business climate from the financial, legal, fiscal, customs aspect has positive
influence in general development of private sector. The private sector functions in different
branches as: productivity, serving activity, catering and trade etc. through this sector were
achieved important results of economic development in different countries of the world, this
sector constitutes the major part of BPV in many countries through development and creates
approximately 90% of working places in the world (World Bank, 2012). Also in many
countries the private business generates a major part of income from taxes to provide services
for education, health and other public services. The private sector is among main sources of
economic growth, creating of work places, decreasing of poverty and increasing of
government revenue. Transition from the centralized economy in trade economy influenced
on Kosova that had faced obstructions of different natures; which were reflected in business
environment and obstructed the development of private sector in the country. Kosova
businesses act in one environment where the competition is not loyal, fiscal and customs
politics not very favourable etc. which influence in creation of not very favourable climate
for development of business. It is worth to mention that except above mentioned factors the
small and medium enterprises are dependent also from clients, suppliers, government, local
government, managers etc.
258
Sector of small and medium enterprises will be effective if:
- If it will be created an entrepreneurial culture in a society that rewards initiative and
innovation, individual or collective.
- If it will be created economic, political and social climate that encourages the creation and
survival of businesses, helping raise the total number of small and medium enterprises.
- If it will be created a spirit of cooperation by all contenders that surround distant and close
of business.1
Development and dynamics of SME in Kosovo
Kosovo continues to be among the least developed countries in the region although there is
continued economic growth that growth is very low and depends on public capital
expenditure. Authorities and experts on economic issues agree that the private sector must
have the primary role in the economic development of the country. Small and medium
enterprises are considered encouraging growth of the creation of new jobs and reducing
poverty. Figures of private business development in Kosovo are not very encouraging,
especially when compared to other regional countries. Kosovo has a relatively small number
of new businesses created, but many of them fail soon after their establishment (see chart
below).
Graphic 1. Number of new enterprises, of re-registered ones as well as the terminated ones
based to respective quarters TM1 2009 until in TM1 2014
Source: Statistic repertoire about economic enterprises, Kosovo Statistic Agency, Pristina, May 2014, pg.
10
Small enterprises can be created easily, can also be placed in rural areas thereby adding agro
products value and by facilitating the distribution of business. In developing countries, small
enterprises are seen as an important instrument for overcoming poverty. 2
1 (Draft Strategy of Development of SME in Kosovo 2012-2016).
2 Labeat Mustafa, Tenth International Conference, IFK-Pristine, 2011, pg. 489
259
Some of the problems of SME in Kosovo
The problems mainly related to the unsatisfactory implementation of the law constitute the
main challenges that hamper the survival and development of new firms in the private sector.
Among such problems are considered unfair competition, corruption, non-functioning of
judicial system, limited access to finance, high cost of finance and fiscal obstacles.
Problems regarding informality are considered the obstacles with which face the businesses
of Kosovo. Corruption and not loyal competition are harsh problems that influence
negatively in operational costs; they increase the risk and obstruct the loyal competition of
trade. Based to an analyse of European Bank for Reconstruction and Development (EBRD)
the informal economy was mentioned by business owners in Kosovo as a main challenge,
counting as 66% of problem for making business.
This figure is the highest in the 30 countries where the research in question was made. EBRD
has announced that this is the fifth time that together with the World Bank have conducted
research entitled "Business Environment and Enterprise Dealing" for the years 2013 and
2014. The research was conducted with 15 thousand companies of member countries of
EBRD. Corruption continues to be one of the main problems of making business not only in
Kosovo, but EBRD emphasizes that was noted decrease in some cases of corruption as for
example not formal payments that are expected or requested by tax officials.
The report also states in all countries where research was conducted, there was a reduction in
informal payments to officials or licenses to operate and imports. While the largest decline
was recorded in informal payments to public officials in sectors such as customs, taxes,
licenses. 3
When the concept of informality was presented for the first time in the beginning of ‘70 of the
last century it was considered as a temporary phenomenon that was believed to disappear in
developed economies. But the reality proves the opposite. Along with economic growth,
informal enterprises, untaxed activity and informal employment continued to be an integral
part of the economies of developing countries, representing more than a third of gross
domestic product. The informal sector, as referred by the professional literature as "shadow
economy" or "underground" (Schneider and Enste, 2000) or “unofficial activity" (Friedman
and others, 2000), stands as a barrier to increased revenue and improvement of additional
public services. Limitation of informality affects directly the improvement of public
governance. We should emphasize that informal sector is not enemy of the society and
economy. Authentic enemy, the biggest challenger is corruption. Former secretary of
American state Hillary Clinton in the phrase before assembly of Albania (November 2012)
describer corruption as; “cancer that scour the society, drain sources and blocks the economic
growth”.
European Union in all reports of progress emphasizes the primary need to fight in system and
effectively the corruption listing it as main priority.4
Problems related to customs and fiscal policies considered to be challenging for Kosovar
businesses. In recent years the government has taken a policy mitigating taxes and customs
duties.
3 http://illyriapress.com/ Ebrd-corruption-informality-and-power-obstruct-to-doing-business-in-Kosovo /
4 Bujar Leskaj, Panorama Online, 12 October 2015
260
Heavy trade regulations and inefficient tax administration marked positive results and have
contributed significantly to improving the climate for doing business. These customs and
fiscal obstacles in coming years are believed to have lower intensity. High taxes lead the list
of limitations. This fiscal barrier had high intensity during 2009, having sustained a slight
decrease in conductive period of the year 2013.
This marginal decrease may be partly linked to the reforms applied in late 2009 that halved
the tax on profit, but not enough to impact positively on the business activity, as some other
taxes increased during this period. For the year 2017 businesses expect this setback to be
reduced even more, approximately 14% (according to the survey conducted by RIINVEST,
2014).
High customs tariffs and heavy trade regulations result a moderate challenge for businesses.
From 2009 to 2015, customs duties on businesses declined considerably. Kosovo businesses
believe that obstacles relating to customs to be less serious in the coming years. 5
Financial problems are considered to be among the most troubling issues for businesses. The
high cost of funding has proven to be more problematic due to the high interest rates charged
by financial institutions.
High interest rates around 13% on average limited Kosovo businesses were not offered the
possibility to widen their business activity, to generate new working places and to decrease
the high percentage of unemployment as well as to decrease the level of poverty. This
obstacle influenced negatively in capacities of Kosova SME to invest in work capital and fix
assets- two crucial factors for their development.
For small businesses it is important to have access to loans at lower rate of interest, as these
businesses being flexible and innovative, are seen as contributing to the development of the
private sector.
By the Kosova Government in collaboration with USAID and other external partners it is
expected to establish the Fund for Investment and Employment, which will improve access to
finance under favourable conditions for young entrepreneurs, small and medium enterprises,
and corporations.
This fund, among others, will provide access to finance new businesses, cheaper loans for
small and medium enterprises and corporations that intend to expand their businesses. The
creation of this fund will easily create as interest would be lower and it will be a push for
greater economic development of the country.
Businesses in Kosovo, which constantly complain about high interest rates and limited access
to finance, say it will help their development and at the same time, the country's economic
development.
According to the reports of the Central Bank of Kosovo, the total amount of loans to citizens
in commercial banks reached 1.85 billion euros, loans to enterprises continue to have the
highest percentage, followed by loans to households.
Experts of economic field continuously made call to competent authorities to review
possibilities to create better approach on finances, while commercial banks requested
decrease of interest on loans.6
5 Business Climate in Kosovo – An inter-regional perspective, the European Union Office in Kosovo and
RIINVEST, Pristina, 2014, pg. 40
6 Luljeta Krasniqi - Veseli, Radio Free Europe, 09.05.2015
261
Legal problems
Not efficient legal system is thought as a problematic obstruction, while not favourable law
of work and contract violations by the consumers and suppliers are considered by businesses
as not very serious problems.
The judicial system is considered unstable and unsatisfactory for period of 2009 and a slight
improvement less than 2% for the period of 2013, while business expectations about this
issue for the coming years seems to be much more positive, this because arbitration created
recently begun to be used as a substitute for the courts for many businesses.
Businesses surveyed (according to the Institute RIINVEST, 2014) expect the harshness of
this barrier to decrease by around 14% in four years.
The issue of violations of contracts by customers and suppliers is thought to be less
problematic, because the market where Kosovo firms operate is very small and that
businesses have created credible reports with the bidders and their customers - a fact that up
to an extent, replaces the need for contracts. However, it is important to emphasize that only
the reliability and informal relationships will not be able to replace the contracts in the case
that Kosovo aims to increase market.7
Some of the previous problems as lack of electricity and inadequate infrastructure of

transport in recent years have significantly improved. This improvement was attributable to a
series of government policies over the past 10 years, which have been the target as the road
infrastructure and energy sector.
II. Managing of SME in Kosovo in conditions of globalization
Globalization of businesses is part of the fast-changing environment faced by managers who

are no longer limited by national boundaries. In determining the operational limits of national
boundaries organizations have almost no role. Technology is changing the way is created,
stored, used and disseminated the information and makes it more accessible. Information has
influenced the world to be considered as a global village.8
In the modern world is happening process of transformation of the national economy in the
multinational and transnational getting involved in regional economic integration that today
promote the globalization process of the world economy. This process causes ever greater
internationalization of capital in the international framework. In charge of this process are
multinational corporations within it being made colossal centralization of capital with
international character. Therefore the capital even though holds national mark in many
aspects gets integrated in reproducing chain of world capital through multinational
corporations. The main trends in the economy of the contemporary world are: deepening of
the international division of labour, specialization and international cooperation growing, the
processes of exchange of foreign trade (which increased faster than the increase of world
production), accelerating the flow of capital, transfer knowledge and technology, strong
international expansion of banks, transnationals penetrating new sectors of immaterial
production where high profits realized (scientific research activities) etc. High level of
development of informatics, technology, robotics, has changed the way of production, work
relations and human capital as well as adaptation of modern technology. These changes affect
7The business climate in Kosovo - An inter-regional perspective, the European Union Office in Kosovo and
RIINVEST Pristina, 2014, pg.42,43,45.
8 Robbins / De Cenzo BASIS OF MANAGEMENT - concepts and basic applications, UET Tirana 2011 pg.82, 86.
262
the relationship of national and international economies in the change of the world market
and the formation of the New International Economic Order.
In regional economic integration were involved approximately 70% of the world population
and approximately 75% of the value of world export that shows the role and importance of
globalisation process and integration that means that isolation for any nationality cannot be a
solution.
The task of the New World Order is the promotion and development of national economies
and their integration within the global economy that can be achieved through the
globalization of the world economy. The purpose of globalization based on free will of the
peoples of the world and in the economic interests of different countries, without the use of
force and without colonial or dictatorial subjection, which characterized the XX century that
we left behind.
For Kosovo, key problems is the involvement of independent and equal in scientific progress
of technology, which means building a proper scientific and professional staff, which is made
with the transformation of the education system in general, the connection of the theoretical
and practical with education of staff in developed countries. Another need is a transfer of
experiences from developed countries in Kosovo, this means issuing tradition and culture
over the new development, which culture seriously requires continuous commitment and
dedication to work. In this case Kosovo has its advantages even in the diaspora, that works
and works for decades in developed countries, so it possesses the capital and experience,
which can be transferred to the country.9
Small countries as Kosovo face with need for export for them is suitable the developing
model named small opened economy. Indeed, small countries cannot rely on comparative
advantages (comparative advantage), especially when large countries and modern economy
being transformed by the principles of competitive advantage
Small and medium enterprises were proved with appearing of inventive features; however
those difficulties can compete economic subjects which base the produce in new technology.
Small and medium enterprises based to the rule result or imitate them. Management of small
and medium economic conditions of globalization is becoming increasingly complex
discipline. Continuous Integration and increasingly large market within the European Union
imposes transnational business conditions to all entrepreneurs regardless of whether they
enterprises are small, medium or large.
At the same time are getting dynamism the processes of the market and is being done a major
concentration with many challenges.
For small and medium enterprises the circumstances of management are often
insurmountable obstacles because they demand comprehensive knowledge and specialized
management. This difficulty can be avoided by hiring consultant’s managers.
Developing objectives of SME are realized through cooperation and partnership while other
objective should be lower costs, improving of brank image and increasing of trade
participation. It is clear that supporting instruments of European Union improve
competitiveness respectively the introduction at the market of small and medium enterprises.
This mode of action aimed at promoting the work of small and medium enterprises, which is
implementing a systematic support for the connection of small and medium enterprises within
the economic activities that have a key role in the development of a modern national
economy.10
9 Prof. Dr. Isak Mustafa,, Managing Director in Business, Eureka, Pristine, 1993, pg. 157-161.
10Management in small economy, Đuro Horvat, Marinko Kovacic, University College Victory, Pristine, 2008
pg. 79-80
263
III. Factors that affect the successful management of SME
Theoretically and practically is accepted that exists that there are the set of factors that
influence in successful creating and managing of small and medium businesses. Some of
them are: macro-economic environment, political and legal environment- governmental
regulation, social environment, entrepreneurial skills, level of technology, structure of
organisation, personnel of organisation etc.
Sustainable economic growth improves social and political stability, while in terms of the
transition period ensures the success of reforms. This is achieved when instead create a safe
environment and sustainable private sector.
In the environment where is a lack of transparency and fair competition the private sector
can become a hindrance to efficiency. Carrying out reforms, their rapid progress in transition
is the direct responsibility of the government. Their ultimate goal will be the creation of a
vibrant private sector, which operates, exchanging goods and services, and invest freely in a
safe environment, economic, political and legal.
The success of small businesses depends from dedication, creating talent and motivation
of the owner. These include attentiveness to changes, the ability to adapt or to create
changes, ability to attract and to keep skilled workers, vision regarding operational details,
knowledge about market it means knowledge about clients and their needs.
Each business function, each business institution, every person engaged in performing
these functions for themselves or for a business institution, must meet the requirements and
needs of a human. These businesses are efficient and survive to the extent that meets
effectively and economically the requirements and customer needs.
Need of recognizing the market and customers are essential. The business objective is to
ensure the right goods, in the right place, on time and at the right price, then the process of
management is necessary (plan, organize, manage and control). Control should be given
special attention, including financial control, and keeping accurate records.
To manage effectively, personal factors are of particular importance. Ability to lead,
guide, and inspire others, is the human quality, as is the ability to take and give responsibility
to others. The ability to gain and maintain confidence in financial assistance, provision of
loans, is a feature of vital importance to the business, keep in mind that business is designing
the personality of leaders. In general, individuals have or do not have the capacity required
and having that capacity, they do a good job of willingly or fail when they do not have it.
These issues cannot be overstressed, because business success is a philosophy, a view, an
option that must permeate all the entrepreneurs opinion if he wants to have in hand the
company (Buble, M. Cingula, M. Dujaniq, M. Dulciq, Z. Bozhac, MG. Galetic, L. Lubica,
F. Pfeifer, S. Tipuric, D. - Strategic Mangement, University College Victory, Prishtina,
2008).
Some features of development and managing of SME
Development of SME is a factor of economic development, their importance is that:

- Contribute the increase of employment in a higher level than large business.
- SME are spinal column of trade economy and for the economy in transition,
since in economy in transition create possibility for opening of new working
places;
- Produce for internal market using mainly national resources;
264
- Small enterprises have more flexibility for the society and economy, relief
technology innovation and create new ideas and skills to be implemented;
- Use and develop mainly technology and internal skills;
- Small enterprises are key factors for economic development of the country.
Since Kosovo intends to become part of the European market, in compliance at all
agreements of the European Union and the European Charter for Small Enterprises are
designed development policies of small and medium enterprises.
Politics of development of SME have these intentions:
- Sustainable economic development of SME sector through increase of the number of new
enterprises,
- Improving the indicators of productivity, competitiveness and export of those enterprises
with potential of internationalization.
To achieve these goals it is necessary to develop the objectives, the realization of which help
the development of small and medium businesses and at the same time affects the economic
stability created by them.
Instruments for realizing of general objectives in sector of SME are:
Promoting a culture of entrepreneurship - One of the priorities of sustainable development

for SMEs is the development of strategies aimed at tackling the organizational culture in
formal and informal education for entrepreneurs.
Development of enterprises in growth with capacity of internationalisation - In terms of a
global economy, SMEs need to be active to face a growing competitive rivalry. Business
activities are best in a stimulating environment, investment and business assistance where
there is high cost. In this way, to be more competitive in the market, we have created a
climate favourable for the development of SMEs, through laws that encourage this activity
and its harmonization with the countries which have good practices with regard to SME
development. It is necessary to undertake a series of measures: increase the quality of
services, the creation of tax incentives for SMEs, the creation of a special fund that promotes
innovation and develops electronic commerce etc. (Clifford M. Bombek, Bozhac, Lovorka
Galetic Franjo Ljubica Sanja Pfeifer, Darko Tipuric - Basics of Small Business Management,
University College Victory, Pristina, 2008).
Improving the efficiency and quality of infrastructure and technology - creation of

infrastructure facilities for SME carried out by expanding business parks and industrial parks,
promoting greater use of information systems of these businesses, and improving the
technology used by SME.
Finance improving of SME. In Kosova where informality in economy is still on the high level
many individuals even though have ideas for realizing of successful enterprise does not have
available financial means or crediting is limited and for those that work in formal way
making it often due to informal activity. Many of formal, semi-formal and informal activities
are obliged to create their systems of informal crediting based to the trust since they face
difficulties for providing of financial means. For this reason is necessary the creating of funds
of credit guarantee and applying of other financial instruments to help the financing of SME
as are: overdraft, factoring, leasing, export financing etc.
265
Active policies on the labour market are measures that favour growth of new working places.
They are meant to stimulate the growth of the system, which help in addition, creating a
number of opportunities for greater employment. These policies aim to increase the demand
for work and generally called economic development policies.
Creating information system and consultation for SME it can be accomplished through the
creation of an updated database that provides a clear picture on the possibility of investment
SME in Kosovo.11
Conclusion
For development of private sector the improving of climate for business from financial, legal,
fiscal, customs aspect has important and positive impact. Private sector is among main
sources of economic development, creating of working places, decreasing the poverty and
increasing the revenues of government and for this reason the government should always
make efforts for creating of an affordable and favourable climate for developing of small and
medium businesses.
High norms of interest around 13% in average have limited Kosovo businesses to widen their
business activity, to generate new working places and to decrease the high percentage of
unemployment as well as to decrease the level of poverty. For Kosovo SME is important to
have access in credits with lower norms of interest.
The problems that link with fiscal and customs politics, financial and legal problems as well
as some of the problems as the lack of power supply and inadequate infrastructure of
transport; during recent years were visibly improved and are affecting in creating of positive
climate for trade business.
Some of the factors that influence in successful managing of SME are: favourable macro
economic environment, political and legal, social environment, entrepreneur skills; level of
technology, organizational structure, personnel of organisation etc.
11Labeat Mustafa, Tenth International Conference, IFK- Pristine, 2011, pg.487-489
266
References
- Prof. Dr. Isak Mustafa, Managing Director in Business, Eureka, Pristine, 1993.
- Statistic repertoire about economic enterprises, Kosovo Statistic Agency, Pristina, May
2014.
- Strategic Mangement – Marin Buble, Marijan Cingula, Marcelo Dujaniq, Zelimir Dulciq,
Marli Gonan Bozhac, Lovorka Galetic, Franjo Lubic, Sanja Pfeifer, Darko Tipuric -
UNIVERSITY COLLEGE VICTORY, Prishtina, 2008.
- Labeat Mustafa, Tenth International Conference, IFK- Pristina, 2011
- Management in small economy, Đuro Horvat, Marinko Kovacic, University College
Victory, Pristine, 2008.
- Clifford M. Bombek, Bozhac, Lovorka Galetic Franjo Ljubica Sanja Pfeifer, Darko Tipuric
- Basics of Small Business Management, University College Victory, Pristina, 2008.
- Management in small economy, Đuro Horvat, Marinko Kovacic, University College
Victory, Pristine, 2008.
- Draft Strategy of Development of SME in Kosovo 2012-2016.
- http://illyriapress.com/ Ebrd- corruption-informality-and-power-obstruct-to-doing-business
in-Kosovo /
- Bujar Leskaj, Panorama Online, 12 October 2015.
- Business Climate in Kosovo – An inter-regional perspective, the European Union Office in
Kosovo and RIINVEST, Pristina, 2014.
- Luljeta Krasniqi - Veseli, Radio Free Europe, 09.05.2015.
- The business climate in Kosovo - An inter-regional perspective, the European Union Office
in Kosovo and RIINVEST Pristina, 2014.
- Robbins / De Cenzo BASIS OF MANAGEMENT - concepts and basic applications, UET
Tirana 2011.
267
Linkages between Risk and Human Resources Management in Aviation:
An Empirical Investigation and the Way Forward in Selection of Ideal Airport Business
Executive
Triant Flouris, Ph.D.

Provost and Professor, Hellenic American University, Manchester, NH 03101, USA
Ayse Kucuk Yilmaz, Ph.D.
Associate Professor, Anadolu University, Eskisehir, 26470 Turkey
M. Sahin Durak
Research Assistant, Anadolu University, Eskisehir, 26470 Turkey
Gokhan Tanrıverdi
Research Assistant, Anadolu University, Eskisehir, 26470 Turkey
Strategy, in the global business environment, is tied to competitiveness. Human resource

management is inextricably linked with other organizational management functions as
contemporary organizations are in need of both competent and globally minded human
resource talent. To achieve this aim organization must exercise care in creating both a strong
and sustainable organizational culture. Furthermore, In aviation, risk exists in people,
procedures, equipment, acts of nature, security and so on. The record of safety in the industry
shows us that the human element in aviation presents the biggest risk for such reasons as
attitude, motivation, perception, ability, awareness level, culture, discipline, ethic, training,
and so on. Corporate Risk Management based strategic approach help organizations improve
performance in both competitive and differentiation areas such as training and awareness,
culture and attitudes, individual creativity, and developing innovative risk solutions. In
seizing opportunities and minimizing operational losses, managers should integrate their
strategy and human resource practices with risk management. We assume that considerable
interrelations exist between both corporate strategy, human resources management,
organizational and national culture, values of individuals and risk management. This
interrelations have a potential to effect on corporate strategy. Risk management presents
reasonable assurance to improve a corporation's talent management, competitive human
resource management, and employer branding as well as to ensure effective ways of
education and training, and recruit and retain high-performance workers at all levels.
Hasan Polatkan Airport has a unique structure among airports in the world in terms of that it
is operated by cooperation of government and university and it’s operations are international.
Problem of this research is flexibility which is needed due to the university's autonomous
structure and dynamic nature of the aviation industry, conflicts with bureaucracy that has
dominant position on government. We will present our research which will be designed via
Analytic Hierarchy Process (AHP) methodology to personnel selection in Hasan Polatkan
Airport. An analytic hierarchy model has been created with the purpose of determining
priority personnel selection criteria. The model has been analyzed and done a sample work
using Analytic Hierarchy Process (AHP) which is a multi-criteria decision-making method.
Saaty Compliance Indicator has been used to understand how close estimated values obtained
via AHP to actual data. It is possible that the model developed can be generalized for aviation
industry. We aim to contribute to management and strategy field via help improvement
awareness to the strategic human resource management together with this model.
Key Words: Strategy, Management, human resource management, personnel selection, risk
management,
268
Introduction
Hasan Polatkan Airport is an international airport that both managed and located within
the Faculty of Aeronautics and Astronautics, Anadolu University. Hasan Polatkan Airport has
unique qualifications. Faculty of Aeronautics and Astronautics, a pioneering institution in
aviation training, offers undergraduate programs in Avionics, Air Traffic Control, Airframe
and Power plant Maintenance, Aviation Management and Flight Training. The faculty aims
to train qualified pilots, air traffic controllers, airline and airport management staff and aircraft
maintenance personnel in accordance with international aviation standards and regulations for
air transportation industry. It operates its own international airport with all air traffic control
and ground services, SHY-145 approved aircraft maintenance center and fleet of 15 aircraft
including King Air C90, Cessna 172 and TB20. For practical trainings, the faculty has state
of-the-art synthetic training devices such as 360-degree aerodrome tower, ACC/APP radar
control, and FNPTII and MCC flight simulators. Besides, students can have hands-on
experience in their respective field of study at 28 well-equipped laboratories and workshops.
Management of this kind organizations has unique difficulties. For this reason there is
important to management human resource in strategic way.
Human resource management is essential strategic resource for a society and for every type of
organization. As a result that practical and bright human resource service is very fundamental
for employees of an organization. So we have to pay a special attention collecting correct
information for selecting employees and employees of the organization (Mehrabad &
Brojeny, 2007).
Personnel operations have a high impact for organizational evolution. Some of the most
important personnel operations are as follows (Mehrabad & Brojeny, 2007):
• Decision making about selection the best candidate with respect to applicants and
organizational characteristics.
• Planning the human resource for competitive advantage.
• Decision making about necessary suitable training for employees.
• Defining the important responsibilities of job or job definition.
• Evaluating and determining the payment parameters of employees in reference to their
jobs.
• Representing a clear image of working environment and future of their career.
Nowadays many companies cope with high employee turnover. It effect business very hard
way and causes extra expenses, loss of revenue, demoralize other employees. For this reason
companies has struggle to decrease the turnover rate. This is also important for airport
employee turnover. Moreover manager turnover in airport has effect the performance. Some
of the causes of the high employee turnover are; errors in employee selection, job
dissatisfaction and poor management. The best way decreasing employee turnover is
choosing the right person (Kaluginaa & Shvydun, 2014).
Human resources are one of the essential experience for an organization (Lin, 2010). It is also
a key issue in terms of companies’ differentiation, gaining competitive advantages and so
sustainability and is also determinative factor for companies’ future. Among the functions of
human resource management, personnel selection considerably influences the character of
employees and quality of administration. And hence it has attracted intensive attention and is
an important topic for organizations. Selecting an appropriate person, an effective personnel
selection method should be able to support the organization in for a given job (Lin, 2010).
269
Human resource is important for a company. Moreover, managers who have capability to use
human resource accurately, are more important.
Aviation industry that has great impact on every country’s economic growth and direction,
began to need more qualified staff after The Airline Deregulation in 1978. This human
resource that has strategically importance for aviation businesses, should be that can think fast
and analytic and have necessary technological-information. Managers also have great
importance for Airport businesses that is one of the most challenging sectors. With this
research, we aim to construct framework and implementation for selection of ideal airport
business executive with multi-criteria decision-maker method AHP. In this term, the value of
the work is significant for aviation literature.
Related Literature
Human resources have critical importance for companies. While this resource selection,
leading company’s future, is made, it has been used a number of methods by human resources
manager. Analytic Hierarchy Process (AHP) is one of these methods. Various researches
made by using AHP method on human resources are followed: (Ünal, 2011; Özgörmüş, et al.,
2005; İbicioğlu & Ünal, 2014; Doğan & Önder, 2014; Atan, et al., 2008)
Methodology
In this part, AHP method is utilized as a tool for implementing multiple criteria personnel
selection problem. Expert opinion was used for determining selection of airport business
executive’s criteria. Besides that, it was reviewed the literature. It has been tried to select
criteria that is must have for an airport business manager in light of literature review.
According to result of comparing expert opinion and literature, most of the criteria which
received from expert opinion is the same literature. In the AHP method, identification of
hierarchy is the key component of using AHP. The data obtained while determining criteria is
structured as a hierarchy. AHP breaks a complex multi-criteria decision making problem into
a hierarchy of relevant decision elements at the beginning. AHP initially breaks a complex
multi-criteria decision making problem into a hierarchy of interrelated decision elements.
With AHP, the objectives, criteria and alternatives are arranged in a hierarchical structure. In
order to determine the optimal personnel alternative, this study addressed the criteria and
subcriteria with a four level hierarchical model, where the hierarchical model shown in Figure
1.
The first level is objective. For our research objective is the determination of the most eligible
airport business executive. The goal is divided into four main criteria, which are individual
factors, management criteria, communication criteria and general work factors. The third level
of hierarchy includes alternatives.
Four main criteria include sub criteria. Firstly, individual factors are divided by five sub
criteria, namely core ability, predisposition to teamwork, age, opening to learning and self
reliance. Secondly, management criteria are divided by three sub-criteria, namely planning
ability, organisational ability and supervising ability. Thirdly, communication criteria are
divided by two sub-criteria, namely oral and written communication and persuasive ability.
Lastly, general work factors are divided by four sub-criteria, namely business procedures,
work experience, foreign language and aviation knowledge.
270
After building a hierarchical model of the problem is created binary comparisons. In
hierarchical models regarding to objective criteria, between the bilateral comparisons have
been made by based on the basic scale of 1-9 according to objective criteria.
271
Ideal Airport Business Executive Selection
Individual Factors Communication General Work

Management
Criteria Criteria Factors
Core Ability Planning Ability Oral and written communication Business Procedures
Predisposition to teamwork Organisational Ability Persuasive Ability Work experience
Age Supervising Ability Foreign Language
Opening to learning Aviation Knowledge
Self-reliance
Figure 3. The hierarchy of ideal airport business executive selection
272
Analytic Hierarchy Process (AHP)
Analytic Hierarchy Process (AHP) created by T. L. Saaty, is one of multicriteria decision
making methods. AHP helps problem solving via structuring hierarchy around objective by
adding main and subcriteria determined by decision makers and finally alternatives at bottom
as shown in Figure 1.
Objective
Main Criteria 1 Main Criteria 2 Main Criteria 3

 Sub-criteria …  Sub-criteria …  Sub-criteria
 Sub-criteria …
Alternative1 Alternative 3 Alternative 3

Figure 1. Basic hierarchy structure
The hierarchical structure should have complexity adequately to reflect the situation, but
small enough to be capable to alterations (Saaty R. W., 1987). The most creative task in
making a decision is to choose the factors. In AHP we build up these factors, hierarchic
structure is come from an overall goal to criteria, subcriteria and alternatives in successive
levels (Saaty T. L., 1990).Once build up hierarchic structure one must contain enough
relevant detail to (Saaty T. L., 1990):
 The problem must be represent as properly as possible, but not so thoroughly as to

lose sensitivity to change in the elements,
 Take into consideration the surrounding of the problem,
 Describe the issues or attributes that contribute to the solution and
 Describe the participants associated with the problem.
The mathematical method is common among researchers owing to its simplicity to implement
to almost each area and its qualification that can bring together qualitative and quantitative
factors as criteria. The AHP has used in various areas such as personal, political,
manufacturing, social, management, education and other fields(Vaidya & Kumar, 2006).
Also main application types of the method are alternative selection, resource allocation,
forecasting, business process re-engineering, quality function deployment, balanced
scorecard, benchmarking, public policy decisions, healthcare, and more(Bhushan & Rai,
2003).
The Analytic Hierarchy Process that has made easy our complex decision making problems,
has four basic steps as follow (Islam & Saaty, 1995):
1. Creating a hierarchy: At this step, the problem is transformed to a multiple level

hierarchical structure adding criteria at each level. Also criteria are decomposed in
turn.
2. Making prioritization: By making pairwise comparing at each level, impact degree of
criteria are determined depending on experience and knowledge of decision makers
using fundamental scale of AHP of certain values 1 to 9.
273
3. Mixing priorities: The priorities are brought together via the Principle of Hierarchical
Composition to obtain the final evaluation of the possible alternatives.
4. Analysing the sensitivity: At this final step, it is changed the importance of each
criteria to test whether results are stable or not.
The overall procedure of the AHP is shown in Figure 2 (Ho, 2008).
Overall goal, criteria,

Develop
problem
representation
hierarchy
ingraphicalof and attributes are in
different level of
hierarchy.
Two criteria are

Construct a pairwise compared at each time
to find out which one is
comparison matrix
more important.
To calculate priority of
each criterion.
Synthesization
To check whether
Undergo consistency
test judgment of decision
makers is consistent.
Consistency of all
No
All judgments are judgments in each level
consistent? must be tested.
Yes
All criteria and

No All levels
arecompared? attributes in each
criterion must be
compared.
Yes
Based on each
Develop overall attribute’s priority and
priority ranking its corresponding
criterion priority.
Figure 2. The flow of the analytic hierarchy process
The Analytic Hierarchy Process (AHP) is a theory of measurement. This is done within
pairwise comparisons and relies on the judgements of expert to derive priority scales. The
comparisons are made using a scale that represents, how much more, one element dominates
another with respect to a given attribute. We require a scale of numbers that indicates how
many times more important or dominant one element is over another element to make
comparisons. Table 1 exhibits the scale numbers (Saaty T. L., 2008).
274
Table 1
The fundamental scale of absolute numbers
Intensity of
Importance Definition Explanation
1 Equal Importance Two activities contribute equally

to the objective
2 Weak or slight
3 Moderate importance Experience and judgement
slightly favour one activity
over another
4 Moderate plus
5 Strong importance Experience and judgement
strongly favour one activity
over another
6 Strong plus
7 Very strong or
importance
demonstrated An activity is favoured very
strongly over another; its
dominance demonstrated in
practice
8 Very, very strong
9 Extreme importance The evidence favouring one
activity over another is of the
highest possible order of
affirmation
of above
Reciprocals If activity
of the abovei has
nonone A reasonable assumption
zero numbers
assigned to it when
compared with
activity j, then j
has the reciprocal
value when
compared with i
1.1–1.9 If the activities are May be difficult to assign the best
very close value but when compared with
other contrasting activities the
size of the small numbers would
not be too noticeable, yet they
can still indicate the relative
importance of the activities.
Results and discussion

In the process of selection the ideal airport business executive, priorities are revealed by
analyzing main and sub-criteria in detail. Findings can be summarized as Table 2.
When we look into priorities of main criteria; it is revealed that communication criteria is
more important with its 0,460 points than other main criteria like individual, management and
275
general work criteria. Also oral and written communication is the most important
communication criteria with its 0,869 points. So, human resource managers should consider
whether a candidate is qualified for position in terms of these criteria. As for the other
communication criteria, persuasive criteria is one of sub-criteria has lowest points unlike oral
and written criteria with 0,131. The second important main criteria is management criteria.
Here, planning and supervising ability have equal importance (0,400) and also are more
important than organizational ability (0,200). The main criteria that has third rank relating
importance is individual factor. Self-reliance is the most important individual sub-criteria
with 0,349 points. And second important sub-criteria is predisposition to teamwork with
0,284 points. The rest sub-criteria of individual factors are respectively; opening to learning
(0,230), core ability (0,113) and finally age (0,025). The most unimportant main criteria is
general work criteria with its 0,80 points. In this criteria, foreign language comes at the
forefront rather than others with 0,550 points. Sub-criteria of work experience has second
importance among general work criteria with 0,310. Others are respectively; business
procedures (0,84) and aviation knowledge (0,56). Thus, it can be understood if an alternative
for ideal manager selection has foreign language and some work experience even if that
alternative do not know aviation business procedures and aviation knowledge though airport
business belong to aviation industry, selection possibility for that alternative is high. While a
selection for airport business executive is made, criteria which are most considerable are oral
and written communication (0,869), foreign language (0,550) and two equal sub-criteria of
management; planning and supervising (0,400). Criteria which have importance at least are
age (025), business procedures (084) and aviation knowledge (056).
Table 2. General Synthesis Table
Level 1 Level 2 Alts Prty

Core Ability (L: ,113) Alternative A ,011
Alternative B ,003
Individual Factors (L: ,162) Alternative C ,004
Alternative A ,031
Predisposition to Teamwork (L:
Alternative B ,009
,284)
Alternative C ,006
Age (L: ,025) Alternative A ,002
Alternative B ,001
Alternative C ,001
Alternative A ,021
Opening to Learning (L: ,230) Alternative B ,010
Alternative C ,006
Alternative A ,036
Self-reliance (L: ,349) Alternative B ,009
Alternative C ,012
276
Alternative A ,060
Planning Ability (L: ,400) Alternative B ,018
Alternative C ,041
Management Criteria (L: ,298) Organizational Ability (L: ,200) Alternative A ,040
Alternative B ,007
Alternative C ,013
Alternative A ,053
Supervising Ability (L: ,400) Alternative B ,040
Alternative C ,026
Oral and written communication Alternative A ,064
Alternative B ,236
Communication Criteria (L:
,460) (L: ,869) Alternative C ,100
Alternative A ,042
Persuasive Ability (L: ,131) Alternative B ,011
Alternative C ,006
Business Procedures (L: ,084) Alternative A ,003
Alternative B ,002
Alternative C ,002
Work Experience (L: ,310) Alternative A ,015
Alternative B ,005
Alternative C ,004
General Work Factors (L: ,080)
Foreign Language (L: ,550) Alternative A ,021
Alternative B ,009
Alternative C ,015
Aviation Knowledge (L: ,056) Alternative A ,002
Alternative B ,001
Alternative C ,001
Alternative A 0,401
Alternative B 0,360
Alternative C 0,239
Figure 4. Ranking of the Alternatives
Together with implementation, 3 potential candidates was evaluated by decision-makers for
aim of selection of ideal airport business executive being considered main and sub-criteria
and they was prioritized regarding their weights. Ranking of alternatives for aim is presented
in Figure 4. As a result of ranking alternatives weights, Alternative A with its 0,401 points
was selected as a airport business executive. Rest of alternatives are ranked respectively as
Alternative B (0,360) and Alternative C (0,239).
277
Conclusions
In this work, a model is provided for ideal manager selection for airport businesses problem.
Human resources have critical importance for companies. While this resource selection,
leading company’s future, is made, it has been used a number of methods by human
resources manager. Analytic Hierarchy Process (AHP) is one of these methods. With this
method an hierarchy is created and criteria are determined. After building a hierarchical
model of the problem is created binary comparisons. In hierarchical models regarding to
objective criteria, between the bilateral comparisons have been made by based on the basic
scale of 1-9 according to objective criteria.
The most important findings of this work is that communication criteria is more important
with its 0,460 points than other main criteria. Also oral and written communication is the
most important communication criteria with its 0,869 points. While a selection for airport
business executive is made, criteria which are most considerable are oral and written
communication (0,869), foreign language (0,550) and two equal sub-criteria of management;
planning and supervising (0,400). Criteria which have importance at least are age (025),
business procedures (084) and aviation knowledge (056).
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info
279
Passions, tradeoffs, traps and walls: the experience of Italian graduates
searching for a professional identity
Silvia Zanazzi, University of Rome La Sapienza
silvia.zanazzi@uniroma1.it
Abstract
Nowadays in Italy, as in most European countries, young graduates start their careers with
very fragmented paths, often characterized by short contracts and a high number of
transitions. They have to adapt to fluid societies and flexible organizations, without losing the
“thread” that connects many episodes into their unique career story. How can educators
and/or career counselors give a contribution to guiding young high skilled workers towards
educative work experiences and continuous learning, even in such a difficult socio-economic
context? In a time when the importance of gaining work experience is highly emphasized,
attention should be given to the quality of such experience, in terms of its effects on the
person and his/her intellectual and moral growth. The support given to a young graduate by a
professional should be targeted to identifying all elements to consider in order to create the
foundations on which one can build a solid career plan, given individual and contextual
factors.
Keywords: high skilled workers, career transitions, career counseling, competence.

Main conference topic: education, teaching and learning.
Introduction
In Europe, the transition of young people from university to the job market is
characterized by the presence of fragmented paths, often entailing some forms of temporary
work. Fixed-term contracts, collaborations, temporary supply contracts are more and more
frequently utilized for the new entrants in the labor market, even when highly educated.
Starting from the end of the ‘90s, the percentage of young people who enter the job market
with temporary contracts has been increasing in most European countries (OECD, 2006). The
economic crisis in 2009 has significantly weakened the labor market, leading to an increase
in unemployment and hitting in particular the least protected workers, among which the
young workforce. Starting from the end of 2013, employment rates began to rise again, but
the majority of the new entrants have temporary or part-time jobs, that often entail lower
salaries, less protection, less training and, in general, learning opportunities and lower
contributions. Moreover, it is important to notice that while in many countries the young
workers who start with temporary jobs slowly improve their status and obtain more stable
contracts, in others temporary contracts can become real “traps” (Baert, Cockx, Verhaest,
2013) that significantly limit professional growth. There are great differences among
European countries as to the percentage of temporary contracts and the conversion rates into
more stable jobs; generally speaking, a negative correlation has been observed between the
two variables. Italy is characterized by a high diffusion of temporary contracts and a low rate
of conversion into permanent jobs: that is, contractual stability and its corollary of rights and
protection are, nowadays, rare for Italian young workers (European Commission, 2014).
Another structural problem that affects the young and their professional paths is that of
mismatch – the discrepancy between the qualifications and skills that individuals possess and
those that are needed by the labor market. Very often the mismatch penalizes the graduates
280
who find themselves placed in positions that do not require, nor value, their qualifications.
Again, the economic crisis came to worsen this scenario; currently, one out of three workers
in Europe is in a condition of mismatch, and Italy is one of the countries with the worst
situation (European Commission, 2014).
Theory
The theoretical framework of our research project is the wide corpus of works on
career counseling and career education in the current socio-economic situation, where career
transitions have replaced job security and individuals struggle to search for meaning and
purpose in a “puzzle” made of multiple work and life experiences (Savickas, 2001, 2005,
2006, 2009, 2015). As “social institutions no longer provide the normative scripts” with
which people used to answer the questions of “How shall I live?” and “How should I design
my life to achieve my aspirations?” (Savickas, 2015, pg.12), today individuals are bound to
answer these questions by building their own life and career projects, trying to give a sense of
purpose to the many choices that compose a career (Beck, 2002; Giddens, 1991; Hall, 1996).
This process can generate anxiety and a sense of uncertainty. It demands that workers learn
how to adapt to fluid societies and flexible organizations without losing the “thread” that
connects many episodes into their unique career story. Educators and counselors are called in
to support young high skilled workers in this adaptation process, that can get harder, the more
fragmented and discontinuous is their career path. How can an educator effectively support a
young graduate to navigate our “liquid modernity” (Bauman, 2008) and fluid job market,
guiding him/her towards educative experiences and continuous learning?
Methods
This article describes and comments the results of a qualitative research project
carried out at La Sapienza University (Rome, Italy). We interviewed 60 graduates from our
university with at least three and maximum four years of work experience after their Master’s
degree. Half of them have degrees in humanities (literature, philosophy, foreign languages,
sociology, communication, anthropology) the other half in hard sciences (physics, biology,
chemistry). Graduates to interview were selected from the official list of La Sapienza
University Master’s degrees, years 2011 and 2012. We used the official list to build a
(disproportional) stratified sample, trying to analyze cases from all branches of humanities
and hard sciences. The initial attempt to create a proportional sample failed, due to
unavailability of some of the people we contacted. We decided not to include cases of long
term unemployment or inactivity, instead we limited our analysis to graduates who managed
to remain active overall, except for some periods of “transitional” unemployment. Semi
structured interviews were organized for the most part in person; only in some cases physical
distance obliged us to use skype. Generally speaking, they lasted between 45 and 60 minutes,
they were recorded and transcribed. We used an open interview protocol to guide the
coverage of relevant areas. Interview transcripts were then analyzed so to identify
comparisons and conclusions within the overall research results. We used NVivo for coding,
reports and graphic representation of our findings.
In terms of content, interviews were focused on graduates’ professional experience as a field
for personal growth, learning and identity building. Through the open questions, we tried to
assess the quality of the professional experience. Practically, we assessed continuity and
growth: has the worker had the possibility to gain experience in the same organization, or at
least, when his/her path is characterized by many transitions, in the same field? Has the
experience had a strengthening or, on the contrary, weakening effect on the individual in
terms of curiosity, initiative, intensity of desires and purposes? In other words, in which
281
direction is the “moving force” of experience (Dewey, 1938) leading him/her? Looking at
continuity from a different viewpoint, we also assessed the level of coherence between
university studies and work, trying to assess whether there are the conditions for a “transfer
of competence” (Eraut, Hirsh, 2007) from formal learning to the professional field.
We also looked at the interaction between the worker, the work environment and its broader
context - labor market and institutions – knowing that experience is constantly impacted by
its physical and social surrounding. We firmly believe that objective conditions – the
“structure” - should not be subordinated to the internal ones – the individual “agency”. This is
why we considered the socio-economic background of each interviewee and its possible
influence on professional opportunities and constraints. Secondly, we paid attention to the
type of contracts and economic reward, the length of the contracts, the type of organizations,
the fields of work and their general trends. All these and other elements were kept into
account when assessing the overall quality and educative value of our graduates’ work
experience.
Findings
At the end of the data collection phase, we were able to synthesize the information
and create groups, each including a number of cases (“stories”) with similar characteristics.
In this paragraph we briefly represent and comment the groups.
Group 1, called The Invisibles, includes thirteen workers in a situation of extreme

precariousness. Nine decided to receive some kind of post-graduate training, all at their own
expenses. In two cases, the graduates engaged twice in further training after getting their
Master’s degree. In general, professional paths in this cluster show a very low level of
continuity (many short contracts, often not renewed after the first experience), limited
possibilities to learn on the job, poorly defined and hardly recognized roles. Coherence of the
job with university studies is generally weak, in some cases it is evident only for some of the
work experiences and not for the others.
Group 2, called The Realists, includes nine workers in a situation of contractual stability,
obtained by accepting a compromise. In these stories, personal aspirations are put aside in
order to gain other benefits, such as a longer contract, or a better salary, or the possibility to
stay in Italy rather than emigrating. However, all workers of this cluster display some degree
of satisfaction, thanks to dynamic work environments, fairly convenient agreements, chances
of professional and/or hierarchical growth, possibility to do something they like, even if it’s
not related to their university studies. Seven out of nine workers of this cluster invested in
post-graduate training. In four out of seven cases the investment concerned a Ph.D. program
(not always completed); in three stories post-graduate training was a crucial factor for the job
placement.
Group 3, called The Committed, includes four workers who experience a relatively high
level of continuity and show a strong commitment to their job, characterized by a social
orientation. Coherence of the job with university studies is generally very high, since the field
of study was chosen with a clear professional goal in mind. Professional paths in this cluster
show a good level of stability, very often obtained by giving up a lot in terms of economic
rewards. These workers are different from those in the previous cluster, as they consider their
work like a mission and are willing to compromise not so much to obtain contractual
stability, but to fulfill a social role they consider extremely important and valuable. It is worth
mentioning that all these graduates engaged in post graduate training for their own choice and
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in some cases at their own expenses, as a way to become more competent and knowledgeable
in their field.
Group 4, called The Passionate, includes three workers who are driven by strong passion and
intrinsic motivation. All of them engaged in post graduate training as a way to become more
competent and knowledgeable in their field. For them, lifelong learning is a natural
consequence of their passion and motivation. The Passionate are free lance workers who
carefully “design” their professional path step by step and are able to lead their own careers.
They live literally immersed in their work, even for very low economic returns, simply
because their activity is a source of pleasure for them. These workers are not willing to
compromise to obtain better working conditions: on the contrary, in some cases they seem to
be caught by a “passion trap” (Murgia, Poggio, 2013) where they let work overwhelm them
and take over all their lives, without even realizing it.
Group 5, called The Competitive, include workers displaying an excellent degree of

determination, assertiveness and self-confidence. They are ready and willing to take on
responsibilities, even at a very young age and with little experience. They’re hard working,
but aware of their competence and skills and capable of having them recognized in the
working environment. In general, continuity, coherence with university studies and growth
are very good in this cluster. We can actually use the word “career” for these workers, who
experience not only personal and professional growth, but also hierarchical growth in their
organizations. It is important to mention that socio economic background plays an important
role in their professional success, allowing them to establish relationships and invest in high
level post graduate training.
Group 6, called The Migrants, includes three graduates who left Italy to find better work
opportunities. Two of them are Ph.D. students in Germany and France, while the third, a
graduate in communication who in Italy would have been unemployed or, in the best case,
under-occupied, managed to find a part time job for a small multinational business located in
Germany. The Migrants can enjoy a good level of continuity, coherence and growth. Their
professional perspective is strictly connected with their availability to be geographically far
from home. However, they all recognize that leaving and working abroad allows them to
develop important social and emotional competences.
Group 7, called The Chameleons, includes eclectic individuals who can carry on with
different activities at the same time. Their professional identity is multifaceted, as they often
have several jobs, each of them with a different goal: from paying the rent, to networking or
simply cultivating a passion. Continuity and coherence depend on them, it is a choice:
carrying on an activity simply means dedicating time and energies to it, even in absence of an
economic reward. The Chameleons are ready and willing to invest, in a broad sense. Their
risk propensity is fairly high, as it is their capability to identify new opportunities. In general,
they have a positive interaction with the environment, because they’re ready to change with
it. On the other hand, their possibility to grow is often limited by their tendency to evolve
rapidly and by their perennial “multitasking” attitude.
Group 8, called The Adult Students, includes twelve graduates who enjoy a good level of
continuity thanks to a three-year Ph.D. scholarship, but very few of them have a concrete
possibility to start an academic career afterwards. In most cases, Ph.D. wasn’t their first
choice, but they engaged in it after a previous unsuccessful job search. At the moment, in
fact, a three year contract is considered by Italian graduates a very good opportunity, even in
283
absence of future perspectives. Coherence with university studies is also very high in this
cluster, since all Adult Students are doing their Ph.D. in the same field as their Master’s. In
some cases, the choice of the specific area of research was made based on the requests of the
labor market. As far as this cluster is concerned, the real question is whether these young
workers, after completing their Ph.D., will find a job that values their skills and competence,
or will decide to emigrate in order to continue an academic career, or will accept a tradeoff
and be employed at a lower level in exchange of contractual stability.
Group 9, the Business Oriented, includes eight graduates in sciences, all employed in
medium or large enterprises with relatively stable contractual agreements and fairly
convenient conditions. For the workers of this cluster, continuity is good and so is the
possibility to grow not only in terms of knowledge, know-how and responsibility, but also
hierarchically. Coherence is present only in broad terms of “disciplinary field”, as most of
these workers believe that their actual tasks are not in any way connected with their previous
studies. For the Business Oriented, in fact, the university degree was only a key to access the
corporate world, whose internal rules and dynamics lead their professional paths. These
workers display mainly extrinsic motivation: in difficulty, they could accept a negative
tradeoff, as for them the overall working conditions (stability, economic reward, structured
environments …) seem more important than the job content itself. Generally speaking, their
professional evolution is in the hands of the organizations they work for: they don’t have a
high level of control on their paths, rather they give trust to the company and its internal
mechanisms, being always ready to leave if such trust is betrayed.
Discussion
As we look at the nine groups, we can immediately realize how tradeoff plays a major
role in designing career trajectories of many Italian graduates. The Realists trade their
aspirations and dreams for contractual stability; the Business Oriented trade “control” on their
own career paths for convenient working conditions; the Committed trade economic returns
for the possibility of fulfilling a social role and helping others; the Adult Students accept to
postpone their real placement in the job market in exchange for a three-year research
contract; the Migrants accept to leave their own country to find a better job. The Invisibles,
on their side, trade everything, sometimes even their physical and psychological wellbeing,
for any job that can give them a minimum salary. The only ones in our research that don’t
trade anything are the Competitive, who enjoy the benefits of both strong socio-economic
backgrounds and outstanding personal qualities and are therefore fully in charge of their
professional development paths.
Another aspect that strongly emerges from the analysis is the importance of passion in
choosing a career and conducting it. However, very often for our graduates passions and
traps seem to be the two sides of the same coin. The Passionate, the Migrants, the
Committed, the Chameleons all seem to be caught in a form of “passion trap”. The Passionate
let work absorb all their energies and time beyond all reasonable limits: their life and their
work are the same thing. The pleasure work gives them has no boundaries and leaves no
space, not even for other types of enjoyment. The Migrants leave their country because it
doesn’t give them a chance to express their passion into a job: they find this possibility
elsewhere, letting passion decide where they should live their life. The Committed have a
passion for a social cause and commit their life to it; they don’t mind working hard for very
low economic returns, or even for free, because their inner motivation is stronger than any
possible external reward. The Chameleons are intrinsically permeated with multiple passions
they turn on to light up their lives; that’s why they always live in an energy-consuming mode,
made of multitasking and permanent transition. Differently, the Invisibles don’t show any
284
passion. Ironically enough, they are the most numerous group. For them, work is definitely
more a cause of concern and anxiety than a source of rewards and satisfaction. They see
themselves facing an insurmountable wall, that becomes higher and higher as time goes by
and unsuccessful experiences leave them weaker and less self confident.
Conclusions
How can educators and/or counselors help high skilled young people facing tortuous
paths and multiple transitions in the initial phases of their career?
In a historical moment when “gaining work experience” is considered extremely important,
attention should be given to the quality of such experience, especially as regards the effects
on the person, his/her intellectual and moral growth. In order to propose a realistic message, it
is essential for the counselor to start from the idea of competence. After graduating and
throughout life, attention should be directed to developing and strengthening competences
that are necessary to properly carry out a professional role. While it is frequent to hear
superficial encouragements to “go where your heart takes you”, it is essential for the
counselor to emphasize what needs to be done before and during the journey to ensure a
positive outcome of a career project.
The results of this research show the risks connected with a sort of “rhetoric of passion”
present in our society, as many of our young graduates seem “trapped” in a form of passion.
While passion, or at least a strong interest for the field of work, is certainly a crucial element
to develop agency and resilience, it can’t be the only element to factor in a career project.
Counselors can play an important role to help young workers make sound and sustainable
professional choices, where passion acts in synergy with other essential elements, such as
competence development and knowledge of the sector’s dynamics. The support given to a
young graduate by a professional should be targeted to identifying all elements to consider in
order to create the foundations on which one can build a solid career plan, given individual
and contextual factors. Passion, a concept dense of positive meaning, can’t go without the
attention to constantly monitor one’s ability to do the work well. We could say that from
doing the work well comes the passion for the work itself, that takes our form, becomes part
of us. It is a non linear, but cyclical process, where satisfaction sprouts from the results
obtained. In this virtuous cycle, one expresses his passion in the real world, accepting to mix
it with other ingredients of life and reaching a state of equilibrium, even if dynamic. From
competence comes the capability to dose energies, to see things in perspective, to decide
route changes, to objectively evaluate results: ultimately, to fully live one’s passion, in the
short and long run.
To help a young worker build a career project, a crucial aspect is the knowledge of the
context that strongly influences the nature and quality of professional experience and
sometimes the concrete possibility to realize a project. This reflection intersects well with that
on the concept of competence, an element able to determine a very different placement in the
job market and, consequently, different growth scenarios. A counselor can help the young
worker to enter a flow of information and evaluation on his/her sector’s trends, using the
available sources and selecting the most reliable ones. Even before doing so, it is important
for the young worker to gain awareness of the existence of a “structure” in regard to which
one needs to take appropriate measures, build ways to adapt and react, develop realistic and
coherent expectations. Only so can we prevent the risk of expectations clashing against
reality, favoring instead an encounter between them in positive and constructive synergy,
sometimes powerful enough to even mould the external context, making it more collaborative
and participant.
285
Dr Silvia Zanazzi is a Researcher/Contract Professor of Education at La Sapienza and a
Contract Faculty Member at Fondazione IES Abroad Roma, a consortium of American
universities. She obtained her PhD in Educational Research at La Sapienza with a thesis
concerning evaluation of university research in European countries. Her research interests
include also labor policies, life-long learning and intercultural education.
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287
TESTING FOR “EDGEWORTH CYCLES” IN POLISH WHOLESALE FUEL MARKET
Sylwester Bejger
Faculty of Economic Sciences and Management, Nicolaus Copernicus University of Toruń,
Poland
e-mail: sylw@umk.pl
Abstract
Edgeworth Price Cycles are a strategic pricing phenomenon in which prices cycle
asymmetrically at a high frequency. This pattern is linked to Maskin and Tirole’s duopoly
pricing game and observed in many countries in a retail level of a liquid fuel market. We
examined if such theoretical model of a strategic behavior could be valid for the Polish
wholesale fuel market and empirically checked for a presence of the Edgeworth cycles on
that level of a market.
Keywords: wholesale fuel market, dynamic duopoly, Edgeworth price cycles
Main Conference Topic: Economy, Management and Marketing
Introduction
One of the most important tasks for economics is delivering credible procedures, or methods,
which could allow for distinguishing between a competitive and anticompetitive conduct
without exact knowledge of players’ private information. For the main stream of industrial
organization (see for example Tirole (1988)), we can state that for a given market
characteristics, player’s strategies describe behavior. If we agree with such an assumption, we
could develop various quantitative methods of detection and measurement of strategic
behavior. One strand of research is a development of the so called markers of anticompetitive
(mostly horizontally collusive) behavior used in screening procedure1. Screening is based on
detection of behavioral patterns that are inconsistent with implied model of strategic
interactions of players, exhibit some distinct features of collusive conduct or are anomalous
and/or highly improbable. Behavioral screen could be defined as “a statistical test based on
an econometric model and a theory of the alleged illegal behavior, designed to identify
whether collusion, manipulation or any other type of cheating may exist in a particular
market, who may be involved, and how long it may have lasted”2. Screen is typically a two
element’s set of particular marker of implied strategic behavior and quantitative procedure
devoted to verification of the hypothesis on the marker’s values. One of the markers, used in
adequate environment is so called an Edgeworth cycle marker. The Edgeworth cycles were in
fact observed in various industries, especially in retail liquid fuel markets (Zimmerman
(2011)). In our paper we want to check if pricing behavior of major players in Polish
wholesale fuel market is consistent with Edgeworth cycle pattern. At the start we validate
applicability of the marker to the industry and empirically test for the cycles next. In the last
part of the paper we conclude our work.
Characteristics of a wholesale level of the polish fuel market

Our research was based on a statistical data from period 01.01.2004 – 31.12.2013 and this
time window was taken as relevant for all important market characteristics. Table 1 contains
basic data on the Polish fuel market.
1 For a comprehensive overview see: Harrington (2008), Abrantes-Metz & Bajari (2009), Abrantes-Metz (2011).
2 Definition from Abrantes-Metz (2013), p. 223.
288
Table 1. Basic data of the fuel market for two main products at country level
domestic production PKN production LOTOS production
domestic net balance of int. share of
fuel
consumption (kt) (kt) (kt) (LOTOS+ PKN, trade* imports in
(kt)) dmoestic
2004
Year Gasoline
4116 Diesel
6481 Gasoline
2753 Diesel
3347 Gasoline
1216 Diesel
1258 Gasoline
3969 Diesel
4605 Gasoli
283
ne Diesel
1326 consumpt
15%
ion
2005 4008 7246 2861 3521 952 1190 3813 4711 -62 1670 14%
2006 4144 8222 2723 3995 1418 2226 4141 6221 387 2253 21%
2007 4161 9532 2610 4568 1346 2607 3957 7175 478 3503 29%
2008 4197 10518 2800 5078 1246 2920 4046 7998 405 3408 26%
2009 4272 10387 3055 5330 1282 3225 4337 8555 242 3456 25%
2010 4222 11717 2736 5359 1425 4050 4161 9409 -51 2662 16%
2011 3999 12259 2469 5646 1375 4661 3844 10307 54 2614 16%
2012 3795 11772 2491 5829 1442 4581 3933 10410 -237 914 4%
2013 3731 11364 2593 6131 1348 4277 3941 10408 -442 279 -1%
*Positive numbers mean net imports to domestic market.
Source: PKN Orlen 2014 Factbook, Lotos Data book 30.09.2014, EU Oil bulletin, EIA, POPiHN annual reports,
own calculations
There are two major players in refining and fuel market (refineries PKN Orlen and LOTOS).
We focused on representative products, unbranded diesel oil for road transport (10 ppm
Sulphur) and unbranded unleaded 95 octane gasoline (10 ppm Sulphur)3. As individual data
on export/import and volumes at a wholesale level are publically unavailable, we use Table 1
and other industry parameters to asses market’s important characteristics. We can conclude
the following:
- the main players of Polish wholesale fuel market were PKN and LOTOS,
- 91% of domestic demand at wholesale level are fulfilled by Polish producers, 10% by
others (sources – The Polish Oil Industry and Trade Organization (POPiHN), OECD
(2013)),
- Polish fuel market was unbalanced by domestic production and there were no
economic, logistic and legal reasons why domestic production was not placed in local
(domestic) market (supported by POPiHN),
- even though there were no formal, country specific barriers to entry for wholesalers
we assume occurrence of any significant competition to actual incumbents highly
unlikely (because of logistics and legal reasons),
- wholesale level of a fuel market was highly concentrated – HHI about 4000 to 5000
(Bejger 2015),
- wholesale price of product is a main strategic variable for the players,
- there are capacity constraints for domestic production.
Theoretical background
Modelling duopolistic price competition in capacity constrained industries is based on well
known Edgeworth’s (1925) modification of Bertrand (1883), further Levitan and Shubik
(1972), Kreps and Scheinkman (1983), Osborne and Pitchik (1986), Deneckere and
Kovenock (1992) – static (one- shot games). For dynamic models we could isolate two
strands:
- supergame approach starting with Friedman (1971).
- Markovian strategies’ approach developed by Maskin &Tirole (1988).
3 For more comprehensive characteristics of the industry see, for example Bejger (2015).
289
So called Edgeworth cycles were pointed by Edgeworth (1925) but precise description of that
phenomena we have due to highly popular Maskin and Tirole’s (1988) model based on
restriction
symmetric toBertrand
Markovduopoly,
strategies,
in i.e.
whichstrategies
homogeneous-goods
that depend only
firms
on set
theprices
payoffalternately4..By
relevant state,
their approach presumes that once a price is set, it cannot be changed in the short run,
because of price rigidity or commitment, so that another firm can subsequently react to that
price. Thus, a firm reacts to a past price, because that price affects its payoff. Specification of
a game model is as follow:
- two players, homogeneous product,
- only strategic variable – price, discrete price grid, lowest priced firm capturing the
market, and the players sharing the market equally in the event they set the same
price,
- repetition of a stage game of price commitment - each player to adjust price every
second period, with this privilege alternating between them. (in period t, player i
chooses price pit, while playerj remains committed to pjt),
- common discount factor δ,
- value of payoff function of player at time t - the present value of the infinite stream of
future profits,
- strategies - depend only on the payoff relevant state, which is in this case the price set
by the other player in the previous period (Markovian strategies), strategies are
dynamic reaction functions that give a response price for each price set by the other
player.
As we know, the proper equilibrium concept in the Maskin & Tirole model is Markov Perfect
Equilibrium (as for dynamic game with complete information). There are two kinds of
equilibria. Focal (fixed) price equilibrium, where both players play a fixed price on the
equilibrium path. Off-equilibrium path deviations from this focal price are met by a
temporary price war. For sufficiently patient players (i.e. δ near 1), this deters deviation.
Focal price is well above marginal cost. Edgeworth cycle equilibrium - players undercut
when their rival is committed to a high price (incentive - deviation for market share due to
homogeneity of product), and relent by raising price with some probability when their rival is
committed to a price equal to marginal cost (lost of profitability, anticipation of future
opportunities to undercut). This results in a price path exhibiting an undercutting phase in
which prices steadily decline and a relenting phase in which they rise in a single move.
Transition from the undercutting to the relenting phase – war of attritions occurs at the
bottom of the cycle. Specifically, firms play a mixed strategy to decide price leadership at the
bottom of each price cycle.
Edgeworth cycle equilibria are robust to a number of formal generalizations: Eckert (2003),
wide range of firm sizes, Noel (2008), product differentiation, i.i.d. cost shocks, capacity
constraints, and three firms, Robertson (2008), mixture of searching and non-searching
consumers (computational methods). Previous research suggests that in liquid fuels markets
we can observe interactions described well by Maskin – Tirole model. Representative studies
are, for example, Wang (2009), Wang (2008), Erutku and Hildebrand (2010), Eckert (2003),
Noel (2007b), Noel (2007a), Eckert and West (2004) or Lewis and Noel (2011) and
Zimmerman (2011). Such strategic patterns as leader – follower movements or “Edgeworth
4This specific timing, imposed in general, could be an element of an MPE of a game. See Proposition 9, Maskin and Tirole
(1988).
290
cycle” equilibria should be considered in our case, but we can exclude focal price
equilibrium5 from the start.
We can now validate relevance of Maskin &Tirole model to Polish wholesale fuel market.
From industry’s study we can specify below listed factors:
- duopolistic fuel market with high concentration,
- homogenous products,
- price as a strategic variable,
- discrete price grid,
- high barriers to entry (logistics, financial),
- capacity constraints for domestic production,
- full price transparency (Markov type reactions possible),
- similar efficiency of players (similar Nelson complexity indices of both of the
players), similar marginal costs.
That set of factors positively validate potential applicability of the model to the industry.
Empirical verification of hypothesis of “Edgeworth cycle” equilibrium

The main data set covers wholesale daily prices (excise tax and fuel duty included) on PKN
PB95, PKN ON, LOTOS PB95 and LOTOS ON in PLN for cubic meter (domestic currency
Polish Złoty). These four time series have been obtained from official websites of the
players.6 The series are depicted in Figure 1.
Figure 1. Price series
5 As Maskin&Tirole have labeled an MPE with a singleton ergodic class a "kinked demand curve equilibrium" because, as in
the classic concept, no firm will wish to deviate from the focal price. It implies some stable (for some time) “market” level
of price which is definitely not true in our case.
6 http://www.orlen.pl/PL/DlaBiznesu/HurtoweCenyPaliw, http://www.lotos.pl/144/dla_biznesu/hurtowe_ceny_paliw
291
We want to check if players’ price policy over time exhibits some cyclical behavior
consistent with Maskin & Tirole model. Recent studies documenting price cycling in
particular markets use one of two methods to identify cycling behavior. One approach is to
use a Markov switching regression model based on the transition probabilities; e.g., Noel
(2007b) utilizes this identification method. Alternatively, Lewis (2009, 2011) and Doyle et al.
(2010) use the median value of retail price changes to detect price cycles. The idea being that
price cycle markets will have relatively more negative price change observations than
positive ones; thus, the median value of cycling markets will be negative. Additionally, the
median change will be larger (in absolute value) when the typical daily price decline is larger.
We calculated statistics based on both methods. Similar calculations were done in
Zimmerman (2011). The Markov Chain Tests procedure is based on Rothman (2003).
Let xt denote the wholesale price of product in day t, which over time is assumed to follow a
mean-zero linearly regular stationary process. Let us define the associated state-indicator
sequence It:
1 ��∆�� >0
��= {0 ��∆�� ≤0 (1)
where ∆ is the first difference operator. Assuming It is a stationary7 first-order Markov
process, the log-likelihood function corresponding to a given realization ST of It is:
L(ST, p11, p00, π0) = log π0 + n11 log(p11) + n01 log(1 − p11)+ n00 log(p00) + n10 log(1 − p00),
(2)
where pij = Prob(It = i|It−1 = j), nij = the number of occurrences of (It = i|It−1 = j), i = 1,0; j=
1,0; t = 2, . . . , T and π0 denotes the initial condition (i.e., the probability of observing the
initial two states). However, if the number of observations available in the sample is
relatively large the initial state may be treated as a negligible parameter (see Billingsley,
1961). Such an approximation allows reducing the computation burden of estimating the
transition probabilities considerably, the estimators of which now could be obtained
analytically in a simple closed form. As our sample is large, we have used the approximate
log-likelihood function which for It treated as stationary second-order Markov process takes
the form:
L(ST, p111, p101, ...,p000) = n111 log(p111) + n011 log(1 − p111) + n101 log(p101) + n001 log(1 −
p101) +
+ n010 log(p010) + n110 log(1 − p010) + n000 log(p000) + n100 log(1 − p000),
(3)
where pijk = Prob(It = i|It−1 = j, It−2 = k), nijk = the number of occurrences of (It = i|It−1 = j, It−2
= k), i = 1, 0; j = 1,0; k = 1,0; and t = 3, . . . , T.
For testing procedure, we have to obtain estimates of transition probabilities firstly. For the
first-order specification, the approximate likelihood estimators of the transition probabilities
are:
��
= ��+��′��
�� ,��≠ ��′ (4)
For the second-order Markov process we have:

��
= ��+��′��
��
,��≠ ��′ (5)
The first step of testing for cycles in a series is a test for order of the Markov process.
Order of process test set of hypothesis:
7 Neftçi (1984), p. 314 noted that even xt is nonstationary (in our case all process are I(1)), the implied It will often be
plausibly stationary (as a differenced series).
292
H0: It follows k-order Markov process
H1: It follows k+1-order Markov process
We can construct the log-likelihood ratio statistic for testing the order of the state-indicator
Markov process as described in Anderson and Goodman (1957), p. 100. Under the first-order
null hypothesis, this test statistics asymptotically distributed as chi-square with two degrees
of freedom. The second step is testing for asymmetries in a series, understood as greater
(estimated) probability of remaining in a state 0 than in a state 1. If a wholesale price series
exhibits sharp increases and gradual decreases as suggested by the Maskin & Tirole (1988)
model of Edgeworth cycles, then we have more long phases of successive decreases of price
than long phases of increases. We can test than following sets of hypothesis:
��0 ��00= ��11
��1 ��00≠ ��11
for first order It, and:
��0 ��000= ��111
��1 ��000≠ ��111
in the second-order case. We could conclude about cycles in a sense of Maskin-Tirole if in
fact values of estimated probabilities were additionally in proper relation, i.e. ��00> ��11or
��000> ��111.
As the test statistics we used log-likelihood ratio statistics as described in Rothman (2003).
This statistics is asymptotically distributed as chi-square with one degree of freedom. Table 2
contains the results.
Table 2. Log-likelihood ratio tests statistics

Median
first of Order 1 Order 2 H0* H0** p000 p111
differences
LOTOS PB95 0.0000 0.0696 0.3327 0.0068 0.0016 0.7111 0.6177
PKN PB95 0.0000 0.0058 0.1955 0.4285 0.8266
Lotos ON 0.0000 0.0104 0.3799 0.0014 0.1152 0.6931 0.6333
PKN ON 1.0000 0.0158 0.5796 0.5878 0.5627
Brent 0.3418 0.6468 0.9028
Columns Order 1 and Order 2 contain asymptotic p-values for order of Markov process test. Columns H0* and H0**
contain asymptotic p-values for equality of estimated transition probabilities tests in 1-st and 2-nd order Markov
specification. Last two columns contain values of estimated transition probabilities. All source series in PLN/m3
Source: own calculations
The tests for prices of crude oil (Brent spot price) were added for comparison. As one can
see, the median of first differences does not indicate asymmetry in the sense of Maskin-Tirole
in any case8. Wholesale prices of fuels follow second order Markov process (strongly rejected
hypothesis of the first order process and no reasons to reject hypothesis of the second order
process). In comparison, there is no reason to reject the hypothesis of the first order Markov
process in the case of price of crude. When we move to tests for possible cycles
(asymmetries) only in the case of LOTOS prices we have reasons to conclude about such
phenomena. In a case of diesel conclusion is rather weak (usual 10% value is the probability
of rejection is not enough in this case) but in the case of gasoline we can say that transition
probabilities estimates are strongly different. The value of ��000is higher than ��111,so we
have some support for detection of Edgeworth cycle in that case. Unfortunately, we can’t
state that this indicates Edgeworth cycle equilibrium of same game, as such a movement of
8The median of first differences should be negative in general, Doyle et al.’s (2010) proposed cutoff value of -0.5 cents or
lower to identify the existence of price cycling in a case of US market for example.
293
price should be observable for both players. We can only notice interesting possible
difference in the behavior of players in the case of prices of that kind of fuel.
Conclusions
We examined the presence of cycling behavior of prices as implied by Maskin-Tirole MPE of
“Edgeworth Cycle” type. To detect any asymmetries in the way the prices levels change
upward and downward we used a Markov switching regression model based on transition
probabilities and the median value of the wholesale prices’ changes test. The median test did
not indicate an asymmetry in the sense of Maskin-Tirole in any of the four series of prices,
but we could state that they all follow the second order Markov process. An asymmetry test
based on the differences between transition probabilities estimates have given us some
support for detection of Edgeworth cycle in a case of LOTOS PB95 price only.
Unfortunately, we could not state that this indicates Edgeworth cycle equilibrium of same
game, as such a movement of price should be observable in both of players. We can state that
strategic behavior of players implied by Maskin – Tirole game model is not consistent with
the data in Polish wholesale fuel market. We should than look for the different theoretical
mode strategic behavior in this particular industry to explain the players conduct and possibly
asses its competitiveness.
*Sylwester Bejger – Ph. D, assistant professor at the Nicolaus Copernicus University of Toruń,
Faculty of Economic Sciences and Management, Department of Econometrics and Statistics. Main
research field: quantitative studies on market power and competitiveness of industries and firms.
Scientific interests: time series econometrics, game theory, operational research and ERP systems.
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295
Work-Integrated Learning Approach in The Teaching of
Human Resource Planning, Recruitment and Selection
Nursahida Useng
Prince of Songkla University, Thailand
nursahidauseng@gmail.com
Work-Integrated Learning (WIL) has become an effective approach to equip learner from
university or institution to be a work-ready workforce in organization. It benefits learners to
be proficient to integrate theory learned from classroom to practice. Consequently, learner
who is graduating and becoming future workforce is competent and confidence for a work
ready employment. Several disciplines include WIL as a compulsory program in
curriculum; and some make it an optional for learners. There are several forms of WIL and
can be distinguished according to range of characteristics. Certain forms, learning is to
proceed in actual working environment wherein learners are exposed to organization norms
and behavior under contractual agreement between university and external agency. Example
of WIL in this approach is cooperative, internship, and apprenticeship. However, there is
another form of WIL wherein learners are educated in the campus setting, but with effective
technique to duplicate actual working environment into classroom, which can be found in
in-class activities approach. This study is to examine effectiveness of WIL used within the
discipline of Human resource management. Learners enrolled in human resource planning,
recruitment and selection class from Prince of Songkla University, Pattani campus, Thailand
are principal context of this study. Result indicates good satisfaction from learners which
corresponding to various literatures.
Keyword: work-integrated learning, effective teaching, recruitment and selection, human

resource management
Conference Topics: Education, Teaching and Learning
296
INTRODUCTION
Work-Integrated Learning (WIL) is another learning approach emphasize on preparing and

equipping leaners for work-ready after graduated (Jackson, 2015; Wingrove & Turner, 2015;
Sattler, 2011). Thus, graduates could become a quality and demanded workforce in the job
market. Kramer, M. & Usher, A. (2011) quoted this term as educational program that
integrate work-based element together with classroom learning. Many universities offer
work-integrated learning component to their students to enhance their learning competency
and proficiency (Kuriakose & Swart, 2014; Rayner & Papakonstantinou, 2015). It has been
widely perceived that work-integrated learning produce benefits to all stakeholders explicitly
learners, institution, or work place. Sattler (2011) described benefits of work-integrated
learning to learners in the wide range including career reflection and clarity, opportunities to
integrate theory gained from classroom to fieldwork, enhancing office skills, heighten
confidence level and not limited to financial reward.
Human resource planning, recruitment and selection subject is an initial process and one of
the most important aspects of Human Resource Management (Lunenburg, 2012). Ekwoaba,
Ikeije, & Ufoma (2015) explained in their study that recruitment and selection conditions
have high significant impact on organization performance. The more objective of this
condition, the more enhanced the organization performance. Since every processes of
recruitment and selection are costs to organization, the better the human resource planning,
the more efficiency of organization in financial management and time management. With
current situation and inclination of young generation in workplace, employee resignation
becomes higher. New generation employees are unlikely to retain under unfavorable work
condition. Many job-hopping occurred from one place to another. Thus, human resource
executives are vital and indeed to fulfill vacancy in the organization with the most suitable
candidate to fit the most right job at the right time (Lunenburg, 2012; Francis, Ekwoaba &
Ideh, 2012). In order to supply a qualified and competent human resource workforce to job
market, the foremost task is under university or institution responsibility wherein graduates
were studying to obtain adequate knowledge and experiences for their future employment.
Employer then benefits by lessening costs and time to provide additional training to these
new employees since they are ready and capable to perform assigned tasks. University or
institution then benefits from being recognized as a great place offering qualified and skilled
workers. Graduates likewise benefits by being confidence that they are proficient to be
employed by any organizations.
LITERATURE REVIEWS
Traditional lecture based classroom is to equip learners with sturdy theory and conceptual
framework. Instructor is to communicate to learners, and learners are passively absorbing
information from instructor. Minor interactions between instructor and learners occurred
during the class. Learners might encounter difficulties in transforming theories learned from
classroom into practice. Result in incompetent workforce in workplace and unable to perform
assigned role well. Employer then to furnish new employees with specific training to ensure
they are ready to perform work. Recently, many instructors are more enthusiastically in
delivering active learning to their learners. Several techniques are applied in the classrooms
(Abeysekera, 2006; Hackathorn, et al., 2011; Staehr, Martin & Ka Chan, 2014). Hackathorn,
297
et al. (2011) examined four effective teaching techniques namely lecturing demonstrations,
discussions, and in-class activities. Result indicated that different technique provides unique
benefits to instructor and learner and in-class activities is the most effectiveness teaching
technique wherein learners overall scores are the highest. In-class activities cited to be the
most effective teaching technique among all (Hackathorn, et al., 2011). This technique
including all activities in the class either individually or group based, to solve problem related
to topics discussed in learning objective, to understand and explain case studies associated to
the current issues. All these in-class activities could be considered as part of WIL as defined
by Reeders (2000) “a learning for academic credit in the workplace setting or within a
campus setting that imitates significant features of the workplace.”
Work-integrated learning can be classified in different forms namely Research assistant or

Academic fieldwork, Study aboard, Student teaching, Community service, Cooperative
Education, Internship /Placements/ Practicums, Service learning, Volunteering, In-school
work, Clinical rotations, Industry attachment, and Professional work placement (Kramer &
Usher, 2011; Sattler (2011). The Royal Melbourne Institute of Technology – RMIT (2008)
added definition of WIL that would include the various form of activities, which are project
based in student’s workplace, client involvement art and design studios, work relevant role
play, product design, and competition. Sattler (2011) explained variety of characteristics used
to distinguish forms of WIL including educational objective, duration, timing, payment,
academic credit, program, mandatory or optional, level of knowledge required, curriculum,
assessment and evaluation, level of workplace and academic supervision, role of student in
workplace, benefits to student and to employers. Commonly, WIL is well perceived in a form
of cooperative, internship and apprenticeship, wherein learner has contractual agreement
between education and employer. This arrangement is usually begins after learner completed
certain academic credits from education institution (Abeysekera, 2006). Learner is then
learning by doing in a workplace setting. Ad-hoc approach type of WIL is where learners
acquire knowledge from classroom and apply to practice (Reeders, 2000). Meaning that
learners still proceed learning under university or institution setting, but with the effective
techniques that would prepare learners to be an employment-ready in the future.
WIL is ascertained in providing significant relationships between work integrated learning

based and graduates’ employability rates (Ariffin, Raja-Abdullah, Baba, & Hashim, 2015).
Knowledge gained through WIL is relevant to future career (Rayner & Papakonstantinou,
2015). Kramer & Usher (2011) found from their study in undergraduate students in Canada
that all forms of WIL could improved their critical thinking, analytical thinking, decision
making, interpersonal and problem solving skills. Moreover, WIL helps students to
understand organization culture and organization behavior that enlighten their confidence in
career path and strengthen their readiness for future work. Staehr, Martin & Ka Chan (2014)
experimented WIL program to their IT degree students at La Trobe University, Australia and
the reflection from students are as well in the positive direction. All stakeholders are benefit
from this program. Martin, A., & Hughes, H. (2009) illustrate nine competencies derived
from graduates feedback namely communication skills, self confidence, customer relationship
management, enthusiastic participation, industry and business knowledge, self sufficiency,
personal organization, professional networks, and professional ethics. Kramer & Usher
(2011) identically found from their study in Canadian university students that cooperative
education is the most effective form of WIL. However, there is a study from Mutereko &
Wedekind (2015) indicate that WIL does not make learners or graduates work-ready in South
Africa context.
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METHODOLOGY
This study utilized the combination of quantitative and qualitative method to explore
effectiveness of applying work integrated learning approach in the classroom emphasize on
the area of human resource planning, recruitment and selection subject. Quantitative method
was used in the questionnaire to illustrate learner satisfaction by calculating average mean
and standard deviation. Qualitative method then was used to explain learner behavior and
response to the learning approach in natural classroom setting.
The population of this study was 50 learners from human resource planning, recruitment and
selection class enrolled in 2015 semester. They are students from Faculty of Humanities and
Social Sciences at Prince of Songkla University, Pattani, Thailand. Learners were distributed
with online questionnaire to evaluate the work integrated learning approach used in the
classroom as well as their learning outcome and achievement. Direct observation was applied
to observe learner’s response and reaction throughout the dedicated learning hours. Input was
transcribed and analyzed accordingly. Questionnaire is disseminated at the end of the course
and direct observation is carried out through entire semester.
There were 50 learners participated in the study. Among them, 41 (82%) were female learners
and another 9 (18%) were male learners.
Overall learner’s satisfaction is 87%. Learners have positive learning outcome towards work
integrated learning approach applied in the classroom as illustrated in Table 1. There are total
of 13 assessment criteria, which are grouped into main 5 categories namely Ethical behavior,
Knowledge gained, Cognitive learning, Interpersonal and responsibility, and Numerical
Analysis and Communication Technology. Each criterion has been rated in satisfied to very
satisfied level. Learners are affirmed and delighted with this learning approach. Table 2
demonstrates 10 learner behaviors observed from classroom for one semester under natural
setting. Learners were not aware of this observation, however, researcher as the instructor of
this course was exclusively involved during observation. Even though not every one is
response in the identical way, however, majority of the class perform in this manner. These
behaviors then create positive learning atmosphere which later becoming learning culture to
everyone in the class. Finally, Table 3 illustrates activities used by instructor in classroom
with work-integrated learning approach.
Assessment Criteria Mean SD

Ethical Behavior
1. Learner has ethics towards oneself and community 4.39 0.60
2. Learner appreciate value of this subject 4.39 0.66
3. Learner has a professional code of conduct 4.41 0.57
Knowledge Gained
4. Learner gained sufficient knowledge for the living 4.41 0.60
5. Learner gained adequate knowledge on specific core area of this subject 4.35 0.59
299
Cognitive Learning
6. Learner is capable to integrate and implement knowledge to benefit
oneself and community 4.41 0.69
7. Learner has problem solving skills and up to date 4.35 0.65
8. Leaner is competent in self-learning 4.31 0.61
Interpersonal and Responsibility
9. Learner has responsibility towards oneself and community 4.41 0.63
10. Learner is adaptability and able to work with others 4.31 0.61
Numerical Analysis and Communication Technology
11. Leaner has good communication skills 4.41 0.57
12. Learner is capable to utilize technology to seek for information 4.41 0.60
13. Learner is discretionary in receiving news 4.31 0.61
Table 1. Learning Outcome and Achievement
No. Direct Observation

1 Learners actively participate in all classroom activities.
2 Learners are excited and proactively join class discussion.
3 Learners pay attention and willing to complete assigned task in professional way.
4 Learners keenly ask more questions in the class in order to gain more information from
instructor.
5 Learners interact to each other professionally.
6 Learners support each other throughout learning journey to achieve learning objectives.
7 Learners have a team spirit and able to work well in a team.
8 Learners are confidence when delivering presentation.
9 Class absenteeism is decreased.
10 Learners create a positive learning culture.
Table 2. Observation of Learner’s Behavior in Classroom with WIL Approach
HR Activities Activities Used in Classroom

Learners work in a group and complete a job description for an assigned
position.
Job Description
Learner to present their complete job description to classroom.
Learners to criticize classmate's job description and presentation.
Application
Form Learners to design an application form for an assigned company profile.
Learners as a candidate to attempt to fill up application form.
Resume
Writing Learners to complete an outstanding resume individually.
Instructor to check and provide comments on the submitted resume
individually.
Learners to use this resume writing in job interview role-play session.
Learners demonstrate role-play as both interviewer and interviewee.
Job Interview
Learners to list all questions to be used during job interview session.
Table 3. Activities used in classroom with Work-Integrated Learning Approach
300
The study indicated effectiveness of applying work-integrated learning in the area of Human
resource management, specifically in Human resource planning, recruitment and selection.
The learning outcome from this study was consistent with literature, wherein, work
integrated learning approach would facilitate learner throughout their learning journey and
generate constructive learning outcome. Nevertheless, other study might vary due to the
difference in term of population, environment, and instructor.
The study is only limited to students in Faculty of Humanities and Social, Prince of Songkla
University, Thailand, therefore, further study can be conducted with different population.
Beside this, another study could look into another area of Human Resource Management or
other disciplines.
Nursahida Useng is a lecturer specialized in Human resource management at Prince of

Songkla University, Pattani campus, Thailand. Prior to becoming a lecturer, she worked in
several fortune 100 companies based in Malaysia. She has been involved in the area of
Human resource management and worked with numerous people in the industry. Her
research interests include employee retention, psychological contact and effective teaching
pedagogies.
REFERENCES
Abeysekera, I. (2006). Issue Relating to Designing a Work-integrated Learning Program in an
Undergraduate Accounting Degree Program and its Implications for the Curriculum. Asia
Pacific Journal of Coorperative Education, 7(1), 7-15.
Ariffin H.F., Raja-Abdullah R.P.S., Baba N., & Hashim S. (2015). Structural relationships
between career development learning, work integrated learning and employability: A
structural equation modeling approach. Paper presented at the Theory and Practice in
Hospitality and Tourism Research - Proceedings of the 2nd International Hospitality and
Tourism Conference 2014, 89-93
Ekwoaba, J.O., Ikeije, U.U., & Ufoma, N. (2015). The impact of recruitment and selection
criteria on organizational performance. Global Journal of Human Resource Management,
3(2), 22-23.
Francis, C.A., Ekwoaba, J.O., & Ideh, D.A. (2012). The Role of Human Resource Planning in
Recruitment and Selection Process. British Journal of Humanities and Social Sciences,
6(2), 68-78.
Hackathorn, J., Solomon, E.D., Blankmeyer, K.L., Tennial, R.E., & Garczynski, A.M.
(2011). Learning by Doing: Toronto: An Empirical Study of Active Teaching Techniques.
Higher Education Strategy Associates. The Journal of Effective Teaching, 11(2), 40-54.
Jackson D. (2015). Employability skill development in work-integrated learning: Barriers and
301
best practice. Studies in Higher Education, 40(2), 350-367.
Kramer, M. & Usher, A. (2011). Work-Integrated Learning and Career-Ready Students:
Examining the Evidence. Toronto: Higher Education Strategy Associates.
Kuriakose, R.B., Swart, A.J. (2014). Work integrated learning at a university of technology:
Assessment and management. Paper presented at the Proceedings - Frontiers in Education
Conference, FIE, 2015-February(February)
Lunenburg, F.C. (2012). Human Resource Planning: Forecasting Demand and Supply.
International Journal of Management, Business, and Administration, 15(1)
Martin, A., & Hughes, H. (2009). How to Make the Most of Work Integrated Learning: A
Guide for Students, Lecturers & Supervisors. Massey University, New Zealand.
Mutereko S., & Wedekind V. (2015). Work integrated learning for engineering
qualifications: A spanner in the works? Journal of Education and Work.
Rayner G., & Papakonstantinou T. (2015). Student perceptions of their workplace
preparedness: Making work-integrated learning more effective. Asia-Pacific Journal of
Cooperative Education, 16(1), 13-24.
Reeders, E. (2000). Scholarly practice in work-based learning: Fitting the glass slipper.
Higher Education Research & Development, 19(2), 205-220.
RMIT University. (2008). Work Integrated Learning at RMIT: Current Practices and
Recommendations for the Future. Melbourne, Australia: RMIT
Sattler, P. (2011). Work-Integrated Learning in Ontario’s Postsecondary Sector. Toronto:

Higher Education Quality Council of Ontario.
Staehr, L., Martin, M. & Ka Chan, K. (2014). A multi-pronged approach to work integrated
learning for IT students. Journal of Information Technology Education: Innovations in
Practice, 13, 1-11.
Wingrove D., & Turner M. (2015). Where there is a WIL there is a way: Using a critical
reflective approach to enhance work readiness. Asia-Pacific Journal of Cooperative
Education, 16(3), 211-222.
302
The peculiarities of relationship between hardiness and professional identity of future
educational psychologists
Kuzmin Mikhail Yur’evich Candidate of Sciences (Psychology), Irkutsk State University,

Irkutsk, Chkalov st, 2, e-mail: mirroy@mail.ru
Konopak Igor Aleksandrovich, Candidate of Sciences (Philosophy), Professor, Irkutsk State
University, Irkutsk, Chkalov st, 2, е-mail: iakonopak@gmail.com
Abstract. The article analyzes the correlations between hardiness and professional identity of
the first-year and graduate students – future educational psychologists (average age – 18,6 in
the first group and 22,8 in the second group). The aim of the authors is to demonstrate
peculiarities of relationship between hardiness and professional identity of future educational
psychologists. The authors used Test of Hardiness Survey and The Twenty Statements Test
(TST) by Kuhn and McPharland (1954).The sample is 200 participants: 100 persons– first
year students (average age – 18,6) and 100 persons –graduate students (average age – 22,8).
With the help of one-way analysis of variance and Repeated Measures MANCOVA,
Pearson’s correlation and Student's t-test the authors come to the conclusion that professional
identity and hardiness of the first-year students and graduates are related in different way. If
in the group of graduates there is meaningful relation between both hardiness and its
particular attitudes and professional identity, in the group of the first-year students it does not
exist. In our opinion it is connected first of all with the fact that forming professional identity
supposes that a lot of difficulties should be overcome in the process of professionalization. It
is natural that graduates with expressed quality of hardiness turn out to be more successful,
their professional identity turns out to be formed and shaped. On the other hand the the first –
year students only start their way to professionalization. So they possess only declarative kind
of professional identity, they only suppose what kind of professionals they should be in future
Key words: hardiness, professional identity, future educational psychologists
Education, Teaching and Learning
In the recent 20 years the hardiness is the subject of study of foreign and Russian scientists.
Although as Loginova pointed, in Russian psychology there are many interpretations of
hardiness (like “survivability”, like “The courage to be” by P. Tillich et al), the most
empirical substantiated theory is the one of hardiness by S. Maddi (Loginova, 2010).
According to his theory, hardiness is a pattern of attitudes and skills that, together, facilitate
resilience under pressure by turning stressful circumstances from potential disasters into
opportunities to grow in wisdom and performance. Hardiness consists of three attitudes –
commitment, control and challenge. Strong commitment refers to the belief that, no matter
how bad things get, it is mostly meaningful to stay involved with the events and people in
one’s life, rather than retreat into isolation and alienation. Strong control is the belief that, no
matter how bad things get, it is worth continuing to try to have an effect on outcomes, rather
than retreating into powerlessness and passivity. Strong challenge is the belief that stressful
changes are normal in life, and provide an opportunity to learn more, rather than being an
inappropriate violation of one’s right to easy comfort and security (Maddi et. al., 2009).
During the last 25 years, some investigations touched on the problem of hardiness and how
hardiness determinates different personal aspects. According to our opinion, the problem of
hardiness could be used to describe the problem of development professional identity of
modern students – future educational psychologists.
303
There are different approaches to problem of professional identity of future psychologists.
For example, Goldschmitt, Tipton and Wiggins investigated the problem of professional
Identity of Counseling Psychologists. According to them, salient issues concerning roles and
functions of the counseling psychologist center around questions about professional
activities, work settings, and client populations. Counseling psychology is described as
focusing on developing personal and social resources and adaptive tendencies rather than on
psychopathology and reorganization of basic personality structure. It is necessary to
understand the problem of professional identity in the same way (Goldschmitt et. al, 1981).
Prosek and Hurt investigated the problem of measuring professional identity development
among counselor trainees. According to them, researchers have expressed concern that the
many specialization areas in counseling might lead to a limited shared vision when
establishing counselor identity. However, in a study of nationally certified counselors, 97%
of respondents defined counselors in universal terms rather than by their identified specialty
areas. Although there continues to be a discussion in the national forum as to what unified
professional identity should be publicized, it seems that practicing counselors perceive their
identity in more cohesive, general terms (Prosek & Hurt, 2014).
According to Aypay & Aypay, recent studies on teacher training emphasized the importance
of identity in teacher’s development. Future teachers develop identities as the progress in
their programs just as teachers‘ go through these stages as a result of the interactions in
schools and society. Any treatment of identity is obviously a complex one. However,
knowing the importance of teacher’s identity will provide insights in teacher training.
Many teachers and student-teachers believe that teachers‘ professional knowledge includes
theoretical foundations of classroom teaching and conceptual explanations observed in the
phenomenon under investigation. Gaining a more complete understanding of identity
generally and teacher’s identity in particular could enhance the ways in which teacher
education programs are conceived. The literature on teacher education points out a common
notion that identity is dynamic, and that a teacher‘s identity shifts over time under the
influence of a range of factors both internal to the individual, such as emotion and external to
the individual, such as job and life experiences in particular contexts. These understanding of
identity is helpful, yet defining the concept has often been proved as difficult for authors
(Aypay & Aypay, 2011).
Although constructs of self, self-concept, self-evaluation, self-confidence, and identity have
widely been used in educational research, empirical research of their correlations with other
personal peculiarities has been limited. In our opinion, understanding of these correlations
can be important in investigation of development of future psychologists’ identity. So the
purpose of this paper is to demonstrate peculiarities of relationship between hardiness and
professional identity of future educational psychologists.
Participants
In this study we use the sample of 200 students. They were recruited them from psychology
faculty of Irkutsk State University by university newspaper and bulletin boards. After
selecting the participants and opening the goals and attracting their cooperation we reduced
the sample to 200 participants: 100 persons– first-year students (average age – 18,6) and 100
persons –graduate students (average age – 22,8).
The former was studied with the help of Personal Views Survey III-R by S. Maddi in
adaptation of D.A. Leontiev (Leontiev & Rasskazova, 2006). It consists of three dimensions
such as Commitment, Control and Challenge. The internal consistency of the total measure
was .91 in the present sample and was .84 for commitment, .86 for control, and .89 for
challenge (Leontiev & Rasskazova, 2006). Commitment measures the extent to which
individuals seek involvement rather than withdrawal. Commitment contains a vital
304
motivational quality that compels the individual to persist in pursuing a goal even in the fact
of repeating obstacles, for example, “By working hard, you can always achieve your goal”.
Control deals with the extent to which an individual strives to exert control over their
circumstances rather than feeling powerless. Perception of control or the degree to which a
stressor is seen as under an individual control are thus important in the appraisal of threat
(e.g., “Most days, life is really interesting and exciting for me”). Challenge measures the
extent to which individuals strive to learn from experiences rather than from feeling
threatened, one of the examples of an item is “My mistakes are usually difficult to correct”.
We investigate professional identity using The Twenty Statements Test (TST). This test was
developed to operationalize key concepts of symbolicinteractionist perspective by Kuhn and
McPharland (1954). Since then, the test has widely been used to describe the content of self.
The concept is easy to use and provide rich data and therefore many studies utilized the
concept.
So all future psychologists were asked to write twenty statements as if they have been
describing themselves. The questions begin with ―Who I am? They were asked twenty
statements that describe themselves responding to the question ―Who I am? in 15 minutes in
a free format. A blank A4 paper is provided. They were only asked to provide their gender,
age and marital status.
According to Aypay&Aypay, mainly two different procedures to code TST statements
categories are prevalent in the literature. They are ―specific category approach or ―total
domain approach. The first one only classifies specific types of statements, the second one
classifies every statement presented. Following Aypay&Aypay, we used such categories as:
1. Statements about physical characteristics such as age, home location, etc. Category A:
Conceptions of the self as a physical structure in the world in time and space (- I am ...cm
tall), categorized as ―physical.
2. Identifications of the self in relation to social groupings (interpersonal) and norms.
Category B: The self identified himself/herself in terms of position within social structure
such as roles (―I am a teacher), categorized as ―social.
3. If a statement makes a reference or imply to a specific pattern of behavior such as attitudes,
values, and needs, they are coded as Category C: As an abstract social actor from social
structure (―I am very self-confident), categorized as ―reflective.
4. If the self identifications are so vague and abstract, they were coded as Category D: Self as
abstracted from physical being, social actor, and social structure (I am a world citizen),
categorized as ―oceanic (Aypay&Aypay, 2011).
According to these categories separately selected the expression of professional identity is
students’ pointing to his/her profession (e.g. physicist), to his/her sphere of activity (student
physicist, a student of physical faculty), future sphere of activity (future professional) etc.
Results and discussion

The first step is analyzing differences between first-year students and graduate students in
Hardiness test.
Table 1 Contrasts the mean values of each group (Hardiness Test)
Variable Mean
Score F p
All Commitment 31,57 1,53 0,1
Control 29,76 2,52 0,1
Challenge 16,20 2,42 0,1
305
Hardiness 78,40 3,93 0,1
students
year
First Commitment 33,26 1,47 0,23
Control 29,01 3,52 0,08
Challenge 15,65 1,74 0,19
Hardiness 77,92 2,75 0,10

students Commitment
Graduate 33,90 2,53 0,1
Control 28,49 1,29 0,1
Challenge 16,80 3,83 0,05
Hardiness 76,20 2,53 0,1
Results of a one-way analysis of variance indicated that the subjects from first-year and
subjects from graduate groups do not demonstrate any differences in all scales of Hardiness
test. So we conclude that there is no difference in hardiness between future psychologists
from first and last year of education.
The second step is analyzing the differences between first-year students and graduate students
in TST statements. As a result among the 3879 statements of 200 subjects, the overwhelming
majority of individuals used statements that were categorized as C which is ―reflective. But
among Category B - Identifications of the self in relation to social groupings (interpersonal)
and norms (9.35 %) – there are many statements about professional identity (like “future
psychologists”, woman, who works with children” and so on). And there are differences in
this statements between first-year students and graduate students.
Table 2 Proportion in TST-categories of different students’ groups
Groups A % B % Professional
Identity (B) % C % D %
First-year
students 47 1,22% 185 4,78% 19 0,49% 1585 40,86% 132 3,41%
Graduate
students 52 1,34% 178 4,57% 47 1,21% 1578 40,68% 122 3,14%
All 99 2,56% 363 9,35% 66 1,70% 3163 81,54% 254 6,55%
In accordance with the data obtained the subjects from the group of graduates demonstrate
their professional identity much more often than first–year subjects. They speak about
themselves as a future psychologists or working professionals more often (47 in contrast to
19 times).
Testing all data on differences which are present in professional identity of first-year and
graduate students using t-criteria for independent variables showed that the latter exist.
(t=3.019, p=0.003). It goes in accordance with the data of majority researchers and allows us
to suppose the usage of an adequate key for investigating professional identity.
Correlation analysis of all data both between hardiness and professional identity and between
particular attitudes of hardiness and professional identity using Pearson correlation showed
the only meaningful relations - between of hardiness and professional identity (r=0.303,
p=0.001). There were no meaningful correlations between particular attitudes of hardiness
and professional identity though closeness of relations between them was of very high level
(r=0.81, p=0.000001). That is why we investigated separately the peculiarities of correlation
between hardiness and professional identity of the groups of first-year students and graduates.
306
Correlation analysis of these data of graduates showed the following meaningful relations:
positive correlation between hardiness and professional identity (r=0.39, p=0.005), between
the attitudes of commitment, control and challenge (r= 0.36, r=0.35, r=0.36, p=0.008).
Correlation analysis of the data of first-year students did no demonstrate meaningful relations
between hardiness, its attitudes and professional identity.
Conclusion.
So professional identity and hardiness of first-year students and graduates are related in
different way. If in the group of graduates there is meaningful relation between both
hardiness and its particular attitudes and professional identity, in the group of first-year
students it does not exist. In our opinion it is connected first of all with the fact that forming
professional identity supposes that a lot of difficulties should be overcome in the process of
professionalization. It is natural that graduates with expressed quality of hardiness turn out to
be more successful, their professional identity turns out to be formed and shaped. On the
other hand first – year students only start their way to professionalization. So they possess
only declarative kind of professional identity, they only suppose what kind of professionals
they should be in future. It explains the absence of meaningful relation between hardiness and
professional identity.
Brief biography
Kuzmin M. Y., Assistant Professor of psychology faculty, Irkutsk State University. Interests:
Identity, Hardiness, Educational psychology
Konopak I.A., Assistant Professor of psychology faculty, Irkutsk State University. Interests:
Identity, Hardiness, Educational psychology
References
1. Aypay, A., Aypay, A. The Twenty Statement Test in Teacher Development. Turkish
Online Journal of Qualitative Inquiry, October 2011, 2(4)
2. Goldschmitt, M., Tipton, R., Wiggins, R. (1981) Professional Identity of Counseling
Psychologists. Journal of Counseling Psychology, 1981, Vol. 28, No. 2,158-167
3. Leontyev D.A., Rasskazova E. I. Test zhiznestojkosti [Test of hardiness]. Мoskva.:
Izdatel`stvo Smysl, 2006, 63 s.
4. Loginova M.V. Psihologicheskoe soderzhanie zhiznestojkosti lichnosti studentov
[Psychological content of student's personal hardiness]. Avtoref. diss. kand. psihol.
nauk. Moskva, 2010, 32 s.
5. Kuhn, M. H., & McParland, T. (1954). An Empirical Investigation of self-attitudes.
American Sociological Review 19, 68-76.
6. Maddi, S., Harvey, R., Khoshaba, D., Fazel, M. & Resurreccion, N. (2009).
Hardiness training facilitates performance in college. The Journal of Positive
Psychology, Vol. 4, No. 6, 566–577
7. Prosek, E., Hurt, K. Measuring Professional Identity Development. Among Counselor
Trainees. Counselor Education & Supervision • December 2014 • Volume 53
307
BUSINESS ANALYSIS AND SUSTAINABLE COMPETITION FOR SMALL
FOOD & BEVERAGES BUSINESSES IN FETHIYE1
Isil ARIKAN-SALTIK2 Pelin ARSEZEN-OTAMIS3
Abstract
This research analyses businesses that are classified as restaurants, cafes, bars, etc. and
managed by their owners. The study is based on common properties of these businesses
which are identified through empirical research on these kinds of businesses. The study
also focuses on a region and uses generalization. It is original since it deals with small
food and beverages businesses that did not receive enough attention in tourism
literature; and it lights the way for future researches on these businesses. As a result, it
is seen that the businesses subject to the research do not have competitive advantage.
Keywords: Business Analysis, Small Business, Fethiye
1. Literature Review
1.1 Small Businesses

Small businesses have been subject to debate for a long time in strategic management
literature (Blackburn et al., 2013). Differences between small and large businesses,
criteria for success and failure, types of organizations, their contributions to economy,
their ways of competition are widely been subject to interest of researchers (Storey,
1994). The rapid change in technology, economy, and social areas effect all businesses,
regardless of their size. As a result of recent increase in the qualification of small
businesses, these businesses gained importance in economics, politics and social areas.
Before that, small businesses meant businesses that could not grow because they are
unsuccessful, are convicted to remain small as a symbol of failure, are drawbacks to
economy, and are in need of help continuously (Müftüoğlu, 1989). Today, this
paradigm has shifted and small businesses are perceived as businesses that are dynamic
because they are able to adapt new changes through their flexibility, are creative and
innovative because their organization structures are not bureaucratic, and able to catch
demand niches quickly and utilize opportunities on time (Şahin, 2011). Small
1 This paper has been granted by the Mugla Sitki Kocman University Research Projects Coordination Office.
Project Grant Number 15/216 and title “Effect of Micro And Small Tourism Businesses’ Owner-Managers’
Management Practices On Business Performance: Case Of Fethiye”
2 Mugla Sitki Kocman University, Faculty of Tourism Management, isilas@mu.edu.tr
3Corresponding Author Mugla Sitki Kocman University, Fethiye Faculty of Management, parsezen@gmail.com.
308
businesses take an important place in plans and policies of countries (EU Commission,
2015). In this research, food and beverages businesses, which is one of the most
widespread small types in the destination of research are discussed.
1.2. Food and Beverages Business

The consumption of the products and services produced by food and beverages services
industry, which has reached important scales, is growing progressively in our
contemporary societies. Eating out is becoming the starting point of demand for
products and services produced by food and beverages services industry. In Turkish
literature, although the households’ food and beverages expenditure outside is a subject
to research, food and beverages businesses themselves could not receive enough
attention (Özdemir, 2010). For selecting the place to eat, it is seen that consumers
regard several criteria. The primary criteria are defined as quality and variety of food,
ambiance, and eligibility (Lewis, 1981), then speed of service, suggestions, new
experiences, open hours and facilities for children are added (Auty, 1992). Nowadays,
since the tastes and expectations of consumers are changing, the concepts are expected
to develop and improve.
It is a common view that food and beverages businesses market “experiences” more
than product and services mix (Johns and Kivela, 2001; Gustafsson, 2004). The food
and beverages businesses which are aware of this fact, apply qualified services
approach and customer focused management systems. The drawbacks that effect the
activities of businesses which are heading to new searches, creates challenges in
competition. Since the barriers to entry for food and beverages industry are low,
inefficient and incapable entrepreneurs are allowed, the requirement for experience and
capital are low; this industry becomes attractive for entrepreneurs and forms the most
widespread type of small businesses. However, the same factors have a role in the
failures (Güler, 2007). In the literature, there are several researches that study these
kind of businesses from consumers’ view (Warde and Martens, 2000; Anderson and
Mossberg, 2004; Hansen et al., 2005). However, number of researches dealing with
food and beverages services form business point of view are relatively low (Pettersson
and Fjellström, 2007). This research is original because it helps planning and policy
making through business analysis and allows the business owners to evaluate
themselves. Actually, the difference of small businesses than large ones is that they do
309
not apply business analysis. Consequently, this research creates and important
comparison opportunity for small business owners.
2. Methodology
Fethiye is selected as the research area. Fethiye is a tourism destination where food and
beverages businesses are widespread and they are easy for the researchers to access
physically and legally. The primary data are collected from business owners through
semi-structured questionnaires. As Glaser and Strauss (1967) stated, since the subject is
not studied previously often and it is not possible to draw a strong theoretical frame; the
sample size is decided through theoretical sampling approach (Kish, 1965:17, Miaoulis
and Michener, 1976). According to this approach, data collection continues until the
emerging concepts start repeating similarly, in other words the satisfaction point is
reached. In February and March 2015, through pre-interviews with 54 food and
beverages firms, interviews for the research are requested. Among these, eight of them
rejected the request because the owner-manager was not present there, five of them
rejected because of lack of time, three of them rejected because they are not interested
in the topic; and five of them are kept out of the research since they wanted to fix a later
date. In total, interviews with 33 owner-managers are completed. Since the responds
became repeating themselves, it is decided to finish the interviews and complete data
collection phase.
3. Findings
The data of the research are firstly summarized according to the sections regarded while
interview questions are prepared. Direct interviews are held through data collection;
there had not been any intervention to participants and conditions during the interviews;
only an assessment of the situation is intended. Through descriptive analysis, the
collected data are organized and interpreted, therefore presented in a more clear way
(Strauss and Corbin, 1990). In order to deeply analyze relatively superficial findings
and state the relationship among data collected, content analysis is completed (Butnaru,
2015).
Demographics prepared through the collection of responds of owner-managers who

participated in the interviews are as stated: The participants are mainly male (70%;
N=23) and married (58%; N=19). The average age is 35.24; while the age range is
between 21 and 62. When education levels of the participants are regarded, it is seen
310
that they are mainly high school graduates (52%; N=17). More than half of the
participants (58%; N=19) can speak English. While their tenures in business change
between 1 and 35 years; the average is 16.3 years. In addition, the participants’ tenures
in owner-manager career change between 1 and 20 years and the average is 6.9 years.
Although types of businesses vary, local fast food businesses come first (36%; N=12),
and café-bars (30%; N=10) are the second. The age range of the businesses is between
1 and 45 years; and the average age is 8.51. The number of employees is between 1 and
10; 5.18 on average. Only 5 (15%) of the businesses have a business manager other
than owner-manager; 21 (63%) of them have a technician manager (chef or master). It
is seen that the businesses are mainly founded by owner-managers (79%; N=26); only 6
(18%) of them are managed by shareholders, while the others (82%; N=27) are
managed by only one owner-manager. Although all of the businesses state that they
serve both local and foreign customers; most of them (67%; N=22) state that their
customers are mainly local people. All of the firms (100%; N=33) are functioning
throughout the whole year, however they state that the volume of businesses fluctuate
drastically over a year. It is seen that the owner-managers severely refrain from sharing
information about financial performance of their jobs.
The business analysis done through the findings are summarized in Figure 1:
311
•They do not own the building.
•The machines and ingredients they use are not high
quality.
•Number of employees are low, family members are
working.
•The management structure is insufficient regarding
conceptual competencies.
Assets and Competencies
•They lack notions like image, corporate identity,
brand and credibility.
•Mastery is enough, the business owner is also the
master.
•They are talented; although they have limited
resources and they technology and equipment, they
can produce.
•They think that their home-made meals, fast food or

Turkish pizza products are their core competences.
They accept their cooking abilities as core
Core Competence competences.
•Their core competences can easily be imitated and
substituted.
•Their core competences are not sustainable.
•Strengths: They are flexible in menu planning, they

are flexible in changing locations, trust level is high
because it is a family business, most of the
entrepreneurs know foreign language or employ
Strengths and Weaknesses somenone who knows a foreign language
•Weaknesses: They do not follow their financial
reports, they do not have mid or long-term plans,
they do not have visions, they do not work for
improvement but for sustaining the present situation.
•They are in the market-avergae for Fethiye - Center;

Comparison with the which is the place they are located. However, when
Competitors their competitors in Ölüdeniz are considered, they are
below average.
•Among critical success factors like costs, prices,

Critical Succes Factors cleanness and hygene, safety, cooking ability and
training; prices and cleanness are met.
312
Figure 1. Business Analysis for Small Food and Beverages Businesses
4. Discussion
In this research, business analysis of small businesses like restaurants, cafes and bars
are completed. The research is conducted at Kordon of Fethiye Center; and it is seen
that the demographics and administrative skills of the businesses are largely alike. The
products and services of presented by these businesses which intensely compete among
themselves, are easily imitated and not original. Nearly all of them have the same
menu, ingredients and even product and service quality. When the businesses are
regarded as units, it is clearly seen that they do not have sustainable competitive
advantages. This creates an impression that the working life of the businesses will be
relatively short. This impression becomes stronger since they do not have enough
education, training and experience about food and beverages sector.
References
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Food Service Technology, 4: 171–177.
Auty, S. (1992), Consumer Choice and Segmentation in the Restaurant Industry, Service Industries’ Journal,
12(3): 324–339.
Blackburn, R. A., Hart, M., Wainwright, T. (2013), Small business performance: business, strategy and
owner‐manager characteristics, Journal of Small Business and Enterprise Development, 20 (1), 8 – 27.
Butnaru, G.I. (2015), The method of ethnographic and content analysis in determining development factors
of economic and managerial tourism performance, Procedia Economics and Finance 20 (2015 ), 104 –
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European Commission. SME Performance Review. http://ec.europa.eu/enterprise/policies/sme/facts-figures
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Glaser, B.G., Strauss, A.L. (1967). The Discovery of Grounded Theory: Strategies for Qualitative Research,
Chicago, Aldine Publishing Company.
Gustafsson, I. (2004), Culinary Arts and Meal Science – A New Scientific Research Discipline, Food Service
Technology, 4 (1): 9-20.
Güler, S. (2007), Yiyecek ve İçecek İşletmeleri için Rekabet Avantajı Yaratacak Stratejik Seçenekler,
Anatolia Turizm Araştırmaları Dergisi, 18 (1): 101-104.
Hansen, K. V., Jensen, Q., Gustafsson I. (2005), The Meal Experience of A La Carte Restaurant Customers,
Scandinavian Journal of Hospitality and Tourism, 5(2): 135-151.
Johns, N., Kivela J. (2001), Perceptions of the First Time Restaurant Customer, Food Service Technology, 1:
5-11.
Kish, L. (1965), Survey Sampling. John Wiley and Sons, Inc: New York.
Lewis, R. (1981), Restaurant Advertising: Appeals and Consumers’ Intentions, Journal of Advertising
Research, 21(5): 69-74.
Miaoulis, G., Michener, R. D. (1976), An Introduction to Sampling. Kendall/Hunt Publishing Company:
Dubuque, Iowa.
Müftüoğlu, T. (1989), Küçük ve Orta Ölçekli İşletmelerin Önemi, Özellikleri ve Geleceği. Soba Sanayii
Kongresi Bildirileri, 23-25.
Özdemir, B. (2010), Dışarıda Yemek Yeme Olgusu: Kuramsal Bir Model Önerisi, Anatolia: Turizm
Araştırmaları Dergisi, 21 (2), 218-232.
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Pettersson, A., Fjellström, C. (2007), Restaurants as Friends of the Family: Functions of Restaurant Visits in
Everyday Life, Journal of Foodservice, 18(6): 207-217.
Storey, D.J., (1994), Understanding the Small Business Sector, University of Illinois at Urbana
Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in
Entrepreneurship, Available at SSRN: http://ssrn.com/abstract=1496214.
Strauss, A., Corbin, J. M. (1990), Basics of qualitative research: Grounded theory procedures and
techniques. Sage Publications, Inc.
Şahin, A. (2011), Mersin’de faaliyet gösteren küçük ve orta büyüklükteki işletmelerin yenilik faaliyetlerinin
ölçülmesi, Doğuş Üniversitesi Dergisi, 10(2), 259-271.
Warde, A., Martens, L. (2000), Eating Out: Social Differentiation, Consumption and Pleasure. New York :
Cambridge Press.
314
An overview of intercultural and communicative competence in teaching foreign language.
Case of German Language.
Author: Marisa Janku, PhD Candidate
Affiliation: Department of German Language, Faculty of Foreign Languages, University of
Tirana, Albania
E-mail: jankumarisa@outlook.com
Abstract
There is no doubt that we are living in times of great change. While we teachers prepare our
students for the challenges of the XXI century, we are aware of the many changes taking
place globally. Population displacement continues to occur around the world, bringing
intercultural contacts between groups who speak different languages and bear different
cultures. In various parts of Europe as elsewhere in the world, the drafters of school programs
include intercultural objectives in school curricula and teachers find themselves as they face
the challenge to promote and support the absorption of intercultural competence through
teaching. This is true for teachers of different subjects, but mostly for those who teaches
foreign languages. The teaching of foreign languages is multicultural in essence. So, today is
expected that all teachers of foreign languages promote the gaining of intercultural
competence in their pupils and students. The objective of the teaching of foreign languages is
not more defined considering the absorption of communicative competence in a foreign
language. Nowadays, teachers are required to teach their students the intercultural
communication competence. Being able to face intercultural experiences requires a person to
possess a range of skills and cross-cultural features.
Keywords: intercultural and cultural competence, german lessons, foreign language
Conference Topic: Education, Teaching and Learning
Introduction
Communication is a common and well known part of our lives that often we do not pay due
importance. Moreover, we often take part in the communication process only as sender or
recipient of information, not considering it as a complex process that is itself more steps
intertwined with each other. How would the world be if no one communicate with others?
Undoubtedly desolate and sad. Fortunately, as humans, we have many ways to communicate
with each other. We can express our thoughts and feelings through body language, visual
speaking, shouting, etc. To handle a conflict, it is necessary to possess an efficient
communication. But when we are in a conflict situation, communication often becomes
complicated of anxious. Cultural understanding, but also the problems that occur during
communication and understanding has led to a cross-cultural approach to teaching foreign
languages, the aim of which is to promote a culture based on situations and conditional
understanding actions (Neuner/Hunfeld 2007: 108). Therefore, foreign language and
intercultural learning processes are meaningful and decisive if they manage to be mediated by
comparison (Badstübner-Kizik 2010:99).
315
The role of teaching methods
From my own experience as a teacher of German language I can say that teaching methods
play an important role in the learning of a foreign language. As an example I can mention
here the situation of dialogue with someone who has just learned a foreign language. In this
case one can certainly raise the question, what textbook or what method is he/she using to
learn the language. Often, it seems that the method by which work or learn a foreign
language, be more important than the teachers themselves. Sometimes it turns out to be so,
but sometimes the role of teachers is irreplaceable. Learning German language plays a very
crucial role in the development of intercultural communication skills (Neuner/Hunfeld 2007:
16). This is true also in the case of learning German language in Albania. On the other hand,
the interest of students and their motivation to learn this language is encouraged through a
variety of methods, where the use of modern means of communication takes a significant
meaning. This diversity of methods is obvious in learning of the German language as a
foreign language in Albania and it constitutes a methodological principle of learning, which
involves all parts of the process of learning foreign languages. Given that learning a foreign
language is also a form of meeting with another culture, it shows that intercultural dialogue
and intercultural communication should be essential components of teaching and learning of
foreign languages. For this reason it would be very important for the students during the
meeting with a foreign culture, opening different perspectives on teaching foreign language
in the culture of the target language. For example, the personal experiences of teachers,
representatives from a foreign culture, as well as other students in the class have great
significance and are perceived by students as authentic. It is this perception of the
experiences described, which enables the student to be able also to form their own opinions
and to build an idea of a foreign culture. But given that "cultures" are not equal with respect
to each other, it is necessary that foreign culture should be offered in a wide variety in
learning a foreign language, so that the student himself can offer a variety of different
perspectives in a foreign culture. Such perspectives should arise also in intercultural learning
of foreign languages in Albania. This is a significant improvement in two aspects. First, one
possibility is to process the appropriate teaching materials that have so far remained under
represented and can be used for detection of an unknown world. Second, more appropriate
qualifications and training should be provided to raise awareness of intercultural and
development of intercultural competence of teachers in Albania. However, it is also essential
that theoretical concepts of intercultural learning in language learning, need to find a practical
application.
To be able to act competently and to have a language or communication skill, it is not enough
just mastery of skills and grammatical knowledge, but the social and cultural interaction rules
must be observed (Günthner 2007: 375). Moreover, in the modern communicative teaching
of the German as a foreign language, one should not just mediate vocabulary and
grammatical structure of the language. In the mediation of intercultural communication
competence in learning a language, students often lack linguistic and non-linguistic resources
that enable them to act naturally. Could be the reason for this, that most of the methods do not
use authentic texts but only didactic texts? It can be said that the traditional learning of a
foreign language has no direct link with reality. Thus, the creation and development of
language appropriate materials based on authentic everyday dialogues are very important
(Huth 2003:5). In case that the teaching of a foreign language to be more contemporary, it is
necessary to include not only the linguistic situation but also non-linguistic ones. Such
situations depicting the life and reality, because the language as a communication tool is not
only a cognitive phenomenon, but also a means of expression of feelings and emotions,
which should be taken into account in learning German as a foreign language. To gain these
316
competencies, should be established communicative situations teaching, which enable
students to use the language for communication activities. Proper use of basic everyday
situations requires knowledge that goes beyond the simple linguistic knowledge, including
tools such as extra-linguistic facial expressions, gestures and body behavior.
Intercultural and Communicative Competence

More and more we hear about intercultural competence and communication, which are
considered essential and necessary for successful participation in private and public life
(Volkmann 2002: 11). The term "intercultural competence" has its predecessor, for example,
“communicative competence” as a new goal of learning and intercultural dialogue, by turning
it into a keyword (Luchtenberg 1999: 189). But may these terms be replaced with each other?
To make a comparison of the two terms is necessary to explain what is meant by the concept
of “competence”. In general, this concept means "potential personal skills and inclinations”
which are applied independently and with flexibility in professional activities" (Petersen
1997: 189). The term “intercultural competence” in this context means, specifically the
ability to operate in a sensible and productive in situations where we interact with people
from other cultures. Here are included the thoughts and feelings that precede and accompany
a specific behavior. Therefore, we can say that intercultural competence is not limited to
“general cultural knowledge”, but it is more than that. It is a behavioral adaptability. For this
reason, intercultural competence is often based to behavior using evidence such as:
overcoming prejudices, being tolerant, avoid ethnocentric perspectives etc. (Ertel-Vieth 2005:
30). Given that learning a foreign language always involves at least two languages and two
cultures, during the years it has been necessary to increase the cultural awareness of students,
and their sensitivity to foreign cultures and cultural differences. Communicative competence
actually is still an important part of language learning. In addition, it must be implemented in
parallel with intercultural competence, as intercultural competence alone is not enough to
cover the all part of learning foreign languages. As noted at the beginning, learning a foreign
language in general, but especially for learning German language, these competences
constitute a basic principle in class. In teaching a foreign language, we have to do mainly
with the language, and so can be argued, and noted that an increase in linguistic
consciousness necessarily implies an increase in cultural awareness.
The question that naturally arises is: Which of communicative competencies in foreign
language learning can be considered as particularly important:
First, appropriate behavior in a German cultural context initially requires more knowledge,
which can be made available to the norms of interaction, values and mentalities. In this way
cultural differences and similarities between the expectations and norms of the native
language and German language, as well as standards or their effects on communication
behavior of participants, realize consciously and automatically.1
Secondly, we can mention other techniques, which play a role in highlighting the cultural
differences. One of these techniques will be, for example: the use of cultural modules,
therefore, subject to address a particular aspect of the target culture.
1For more detailed information please refer to Edmondson, Willis, & House, Juliane. Einführung in die
Sprachlehrforschung. Tübingen: Francke. 1993, f. 271ff
317
Thirdly, the learning process should be moved, with respect to increased susceptibility to
different patterns of thinking and behavior, in the center of interests. Here we are dealing
precisely with the so-called "teaching process", from which we can mention: the students’
diaries, field notes by the student themselves, behavioral observations of communication in
cultural institutions, records of critical situations, etc.
Fourth, recognition of cultural and linguistic differences between the German language can
be made available to students automatically, however, it requires a wide range of practical
exercises, communication, necessarily based and in theory, for example dialogues,
simulations or scenarios. In this case we are dealing with "experiential teaching”.
Fifth, the practical and theoretical study of so-called "critical incidents" are particularly
effective in mediating communication skills. An important role here plays the creation of
exercises based on general cultural standards2 or documentation and interpretation of other
critical situations, which are experienced by the students themselves. I can mention some
efficient methods, which I have proven myself in the intercultural research during
postgraduate studies in Germany.
 Role game (followed by interviews) between a native language speaker's (native

speakers) and students, then we have a change of roles, in order that students do the
role of mother tongue speakers and vice versa.
 Tape recordings of narrative interviews, about 'intercultural critical situations”.
 Diaries of students, field notes by the student and reports on critical intercultural
situations.
 Monitoring the participants. Registration of authentic conversations (such as group
discussions).
 Cassettes with authentic recordings of conversations without the participation of the
individual.
Sixth, I can note that another way to promote communication skills in learning a foreign
language is the use of multiple choice questions, which can be very useful in detecting and
common opinion about dangerous stereotypes or final prejudices through preliminary
hypotheses. One use of such multiple-choice questions is often used to test existing cultural
knowledge.
Finally, I would like to make some general suggestions for teaching, how to encourage
communication skills in foreign language learning. From the beginning, it needs to be made
clear to the students the fact that they can never assume that others understand them and the
other side they understand the others. This means that students need to be prepared
systematically for all types of communication problems, for example to address issues such
as:
 Strategies for ongoing understanding: One must also accept the fact that a feedback
driven by the teacher verifies the student's level of absorption. It must be recognized
that without feedback can not achieve a real communication because he plays an
active role as the giver and receiver of messages.
2 For "general cultural standards' refer Thomas A. (Hrsg.). Kulturvergleichende Psychologie. Göttingen:
Hogrefe. 1993.
318
 It is widely known the fact that the teacher is always required to make the forms, tools
to realize the communication relationship. Here are some of the most effective
elements that I would like to highlight:
a) The context on which communication is accomplished.

b) Attracting students in communication.
c) Messages that are realized and maintain communication.
d) Taking and giving verbal and non-verbal responses.
Conclusions
Intercultural learning and intercultural communicative competence should be essential

elements of each form of foreign language teaching. The culture affects not only us, but also
our language, no matter whether it is our own or a foreign language. Personal experiences of
teachers, representatives of the foreign culture as well as fellow learners are popular in the
classroom and are perceived by learners as authentic. In foreign language teaching the foreign
culture should be offered in a wide variety so that it can open up a variety of different
perspectives on the foreign culture for the learners.
Brief Biography of Author

Marisa Janku is the Chairman of “German Language Teacher Association” in Albania. She is
a guest lecturer at the Faculty of Foreign Languages at University of Tirana and she teaches
German language at the Goethe Institute in Tirana. She has graduated from the Faculty of
Foreign Languages as a teacher of German Language in 2008. After that she has followed the
Master for methodology and didactics of German language in Germany. Actually, she is
attending the doctoral studies in this field. She has attended different training workshops for
methodology, didactics and media in German language.
319
References
Neuner, Gerhard/ Hunfeld, Hans (2007): Methoden des fremdsprachlichen Unterrichts.
Eine Einführung. Fernstudieneinheit 4. Kassel. f. 16, 108
Badstübner-Kizik, Camilla (2010): Kontaktdidaktik und ihre empirischen Impliktionen.
Zeitschrift für interkulturellen Fremdsprachenunetrricht 15:2. S. 99-112. [pdf-online
http://zif.spz.tu-darmstadt.de/jg-15-2/beitrag/BadstuebnerKizik.pdf, 10.06.2011].
Günthner, Susanne (2007), Analyse kommunikativer Gattungen. Në: Straub, Jürgen &
Wiedemann, Arne & Weidemann, Doris (Hrsg.): Handbuch interkulturelle Kommunikation
und Kompetenz. Grundbegriffe – Theorien – Anwendungsfelder. Stuttgart: Metzler, 374-384.
Huth, Manfred (1993), Welche Möglichkeiten bietet projektorientierter Unterricht für die
Entfaltung der sprachlichen Fähigkeiten migranter SchülerInnen. http://www.manfred
huth.de/projekt/projekt/projekt2.html, zuletzt aufgerufen am 20.06.2009.
Volkmann, Laurenz (2002): Aspekte und Dimensionen interkultureller Kompetenz. Në:
Volkmann, Laurenz/ Stierstorfer, Klaus/Gehring, Wolfgang (Hrsg.): Interkulturelle
Kompetenz. Konzepte und Praxis des Unterrichts. Tübingen. f. 11
Luchtenberg, Sigrid (1999): Interkulturelle kommunikative Kompetenz.
Kommunikationsfelder in Schule und Gesellschaft. Opladen. f. 189
Petersen, Rainer (1997): Kompetenzen bekommt man nicht vermittelt,
Schlüsselqualifikationen in der Lehrerbildung.In: Lorent, H.-P. de/Köpke, A. (Hrsg.):
Kursbuch Lehrerbildung. Hamburg. f. 189
Ertel-Vieth, Astrid (2005): Interkulturelle Kommunikation und kultureller Wandel. Eine

empirische Studie zum russisch-deutschen Schüleraustausch. Tübingen. f. 30ff
320
Testing influential variables on the likelihood of financially constrained firms:
Firm-Level evidence from Albania
Author: Dorina Koçi (Janku), PhD

Affiliation: Department of Finance, Faculty of Economy, University of Tirana, Albania
E-mail: dafijanku@yahoo.com
Abstract
Financial constraints are regarded as one of the main obstacles to doing business, generally in
transition countries and particularly in the countries of Southeast Europe.1 Most empirical
studies on financial constraints is based on the experience of firms in developed market
economies. Recently, there have been attempts to apply the theory in a little more developed
transition countries. The paper focuses on the effects of the financial constraints on specific
groups of firms, mainly to SMEs as dominant representative of the private sector in Albania.
Through primary research conducted in a wide category of businesses that operate in our
country, the paper aims to study through regression analysis, the relationship between the
influential variables on the likelihood of financially constrained firms in Albania.
Key words: Influential variables, Financial Constraints, Firm-level, SMEs,

Conference Topic: Economy, Management and Marketing
Introduction
Business investments are considered as one of the most important determinants of a country’s
economic growth. The ability of these businesses to exploit their investment capacities are
primarily affected by the constraints associated with the investment climate. A good
investment climate provides opportunities and incentives for business to invest, to create jobs,
to expand production, thus affecting the economic growth. The literature2 distinguishes five
main groups of investment climate constraints: 1. Macro environment constraints such as
macro level stability, crime and corruption, 2. Institutional constraints, including business
regulations, legal and tax systems, 3. Financial constraints, such as access to and cost of
finance, 4. Infrastructure constraints, including electricity and roads, 5. Micro‐level
constraints, such as technology transfer and quality of management. Financial constraints are
seen as one of the main obstacles in undertaking the investment by firms and doing business.
These restrictions affect the growth and development of a business depending on elements
such as: size of business, age, sector of activity, etc. Financial constraints in general are
identified as the barriers in access to external sources of financing. The literature3 review and
analysis of the various forms of financial constraints, emphasizes "high interest rates" and
"inability to long-term loans" as the main forms with direct impact on the firm’s investment
and the firm’s growth. Literature review shows that the size of the firm is closely related to
the probability of a firm to be financially constrained. According to this argument, small
1 Hashi, I., Toci, V (2010)

2 See “Literature review on the constraint to investment in developing countries”, Final Report, Nathan
Associates Inc. EME, February 2011.
3 Becket al. (2006)
321
firms are more likely to be financially constrained. The business environment in Albania is
dominated by small firms which account for about 90% of the total registered companies,
representing a good sample for the study of financial constraints.
Methodology
The methodology used in this paper is based on primary data obtained through a direct survey
of local businesses from the main districts of Albania. The methods applied in the
implementation of the methodology focus on quantitative methods of descriptive statistics on
the phenomenon as well as inferential statistics based primarily on regressive model.
Variables intended to be used in the regression equation consist of the sector where the firm
operates, realized turnover, number of employees, age of firm, the rate of financing with own
capital and the rate of bank loan financing. To study the impact of financial constraints on the
decision of private firms investing in Albania as well as to meet the qualitative and
quantitative analysis of the information received through the survey, we conducted a
questionnaire that addresses general managers and financiers of private firms. The sampling
take in our study was conducted based on the total of registered businesses in the country and
statistical techniques of choice. Statistical selection theory considers that to implement a
regression, the number of elements required to examine in a study, should be ≥120 plus the
number of variables in the regression equation. Considering that the maximum number of
variables included in our study is 8, then the choice should satisfy the condition: no>128.The
distribution of the questionnaire was conducted through the contact points established by
employees of commercial banks, the General Directorate of Taxation and the Customs
Directorate of Tirana in a time period of 3 months (September-November 2013). There were
distributed 400 questionnaires in seven major cities of Albania and only 334 completed
questionnaires turned back. During the data entry program for their processing it was
observed that only 321 questionnaires resulted in answers to all questions and were available
for use in the study. Processing data questionnaire was conducted by SPSS 17.0.
Regression Analysis.
Initially, we will consider the dependence of the possibility that a firm be financially
constrained to variables such as sector, turnover, the proportion of activity financed by bank
loans, the proportion of activity financed by own capital, number of employees and firm age.
This dependence is expressed by the equation below:
Y = b0+b1X1+b2X2+b3X3+b4X4+b5X5+b6X6
In this equation:
Y = Do you think your firm is in terms of any financial constraint? (Dummy variable: 0 =
Yes, 1 = No)
X1 = Sector (Dummy variable: 0 = Manufacturing, 1 = Service)
X2 = Annual turnover (in million ALL)
X3 = Percentage of activity financed by bank loans
X4 = Percentage of activity financed by own capital
X5 = Number of employees
X6=Age of the firm (number of years from its creation until now)
Since Y is a categorical variable (0 = Yes, 1 = No), then we used multivariate binary logistic
model, through which equation will take the form:
Ln (likelihood) = Li= b0+b1X1+b2X2+b3X3+b4X4+b5X5
322
As pointed out above, the coding for “Sector” variable is: Service = 1 and Manufacturing = 0.
This means that the group of manufacturing firms will serve as a reference group and the
likelihood ratio related to the sector division will show us whether service firms are likely
greater or lesser for not being financially constrained (NO = 1).
Table 1: Correlation Matrix
Sector Annual
Turnover (mln Bank Own No. of Age of
Constant (1) ALL) Loan (%) Capital (%) employees Firm
Step 1 Constant 1.000 -.118 -.025 -.641 -.859 -.088 -.263
Sector (1) -.118 1.000 .010 .082 -.199 -.018 .091
Annual Turnover (mln ALL) -.025 .010 1.000 -.129 .046 -.554 -.016
Bank Loan (%) -.641 .082 -.129 1.000 .550 -.097 -.076
Own Capital (%) -.859 -.199 .046 .550 1.000 .079 -.092
No. of employees -.088 -.018 -.554 -.097 .079 1.000 -.120
Age of Firm -.263 .091 -.016 -.076 -.092 -.120 1.000
The model takes into account all the variables mentioned above is statistically significant
since: χ2 = 18.689, p = 0.005 < 0.05 and R2 Cox & Snell = 0.157, R2 Nagelkerke = 0.176 that show a
strong correlation between variables X on the model and the likelihood of financial
constraints.
Table 2: Omnibus Tests of Model

Coefficients
Chi
square df Sig.
Step 1 Step 18.689 6 .005
Block 18.689 6 .005
Model 18.689 6 .005
Table 3: Model Summary

Step likelihood
-2 Log Cox
R Square
& Snell Nagelkerke R
Square
1 414.649a .157 .176
323
Table 2: Omnibus Tests of Model
Coefficients
Chi
square df Sig.
Step 1 Step 18.689 6 .005
Block 18.689 6 .005
a. Estimation terminated at iteration number 4
because parameter estimates changed by less than
.001.
The binary logistic equation takes the form:
Ln Y = 0.064 - 0.362*X1 + 0.02*X2 - 0.18*X3 + 0.021*X4 – 0.004*X5 – 0.0038*X6
Table 4: Coefficitents
B Wald Sig. Exp (B)

Sector (1) -.3621 2.078 .149 .696
Annual Turnover .022 8.652 .003* 1.02
Bank Loan (%) -.0181 3.508 .061** .982
Own Capital (%) .0212 3.005 .0941** 1.023
No. of employees -.0041 2.194 .139 .996
Age of Firm -.0038 .039 .844 .996
Constant .0642 .010 .921 1.066
* Statistical significant at 5%
** Statistical significant at 10%
Interpretation of the results

Taking into consideration the separation of firms between the two categories (services and
manufacturing), we see that there are no statistically significant differences in the ability to be
financially constrained to firms operating in the service sector and firms operating in the
manufacturing sector (χ2= 2.078, p=0. 149>0.05). Meanwhile Exp (β) for the sector is 0,696
<1, which shows that the likelihood of being not restricted (NO = 1) for the service sector
tend to be smaller than the likelihood of being not constrained to manufacturing firms.
However, since the coefficient is considered statistically insignificant, it shows that the
difference is too small to be concluded in the same way for all firms in Albania. Considering
324
the change in the number of employees in a firm, it does not have statistical significance in
the likelihood of financial constraints of firms (χ2= 2.194, p=0. 139>0.05). Meanwhile Exp
(β) for the number of employees is 0.996 ≈1. This shows that the average increase by 1 the
number of employees impacts the changing likelihood between being not financially
constrained (NO = 1) and being financially constrained (Yes = 0) at about 50% to 50%. The
change in the age of the firm (the number of years over which the firm operates) does not
have statistical significance in the likelihood of financial constraints of firms (χ2= 0.039,
p=0.844>0.05). Meanwhile Exp (β) to age is 0.996 ≈1, so an average increase by 1 of years
of activity of the firm, impacts of changes between the likelihood of not being financially
constrained (NO = 1) and being financially constrained (Yes = 0) at about 50% to 50%. Chi
square test for the coefficient associated with the variable "annual turnover in million ALL"
indicates that this variable is statistically significant (χ2 = 8,652, p = 0.003 <0.05). Exp (β)
for annual turnover is 1:02>1, which means that for every 1 million ALL average increase in
turnover, the predicted possibility of not being financially constrained (NO = 1), increases by
an average of 2%. Chi-square test for the coefficient associated with the variable “percentage
of activity financed by bank loans” shows that this variable is statistically significant at α =
10% level, (χ2=3.508, p=0.061<0.1). Exp (β) for bank loan is 0,982 <1, which means that: for
every 1% average increase in the percentage of bank loan financing of the firm, the predicted
possibility of not being financially constrained (NO = 1), decreases by an average 1.8%. Chi
square test for the coefficient associated with the variable “percentage of activity financed by
own capital” shows that this variable is statistically significant at α = 10% level, (χ2= 3.005,
p=0.0941<0.1). Exp (β) for own capital is 1.023>1, which means that: for every 1% average
increase in the percentage of ownership capital financing of the firm, the predicted possibility
of not being financially constrained (NO = 1), increases by an average 2.3%.
Conclusions
The findings show that the probability that a firm faces financial constraints decreases with
firm size, if we refer to the annual turnover of firm size criterion. Meanwhile, the changes in
the number of employees, impacts not statistically significant at the likelihood that a firm be
financially constrained. This finding reinforces the argument that the turnover serves as the
most accurate criterion for the size of the firm. Moreover, it notes that the increase in bank
loans reduces the possibility that the firm is not financially constrained, while the growth of
own capital financing increases the likelihood that the firm is not financially constrained.
Further research
Following the same data provided through the same questionnaire, the next paper will
analyze the impact of influential variables on the firm’s investment decision. In this case the
“likelihood” of the firm to be financially constrained or not will be part of influential
variables together with all other variables considered in this paper. Therefore the main
question to be raised is: What happens with investments of financially constrained firms? Do
they increase, remain unchanged or decrease?
325
Author’s brief biography
Dorina Koçi (Janku) is a lecturer at Faculty of Economy at University of Tirana in Albania.

She teaches “Financial Services” and “Investent” subjects. Mrs. Dorina graduated in bachelor
finance at this Faculty in 2005. Two years later, she completed the Master in European
Economic Studies and in June 2014 finished the doctoral studies with the thesis: “Financial
constraints and firm’s investment decision. Case of SMEs in Albania”. She has participated
in various national and international conferences.
References
Ayyagari, M., Demirguc‐Kunt, A. & Maksimovic, V. (2008). How important are financial
constraints? The role of finance in the business environment. The World Bank Economic
Review, 22, p. 483-516
Beck, T., Demirguc-Kunt, A., Maksimovic, V., (2006). “The influence of financial and legal
institutions on firm size”, Journal of Banking and Finance, Vol. 30:11, p 2995-3015
Beck, T. et al. (2006), The determinants of financial obstacles. Journal of International

Money and Finance, Vol. 25, p. 932-952
Hashi, I., Toçi, Z. (2010). “Financing constraints, credit rationing and financing obstacles:
Evidence from firm-level data in Southeastern Europe”, Economic and Business Review, Vol.
12, (1), p 29-60
Sinha, S., Fiestas, I, (2011). Literature review on the constraints to investment in developing
countries, Nathan Associates Inc. Emerging Market Economics, Final Report
326
FORECASTING CORRECTNESS OF INCURRING CREDIT WITH
THE AID OF E.I. ALTMAN’S, J. GAJDKA’S AND D. STOS’S
DISCRIMINANT ANALYSIS MODELS ON THE EXAMPLE OF 200
STUDIED COMPANIES FROM OPOLE AND ZACHODNIO
POMORSKIE PROVINCES
Rafał Parvi
Faculty of Economics
WSB University in Wrocław, Faculty of Economics in Opole, Poland
Fabryczna 29-31, 53-609 Wroclaw, Poland
rafalp4@o2.pl
Abstract
The credit risk related to issuing credit for a company is mostly the result of too high amount
of the incurred credit, wrong prediction of future periods and repayment of the incurred
liability. In order to minimize risk, as part of information about a credited company, there
should be technical and economic information enabling to conduct "collective evaluation of
the company's activity" with the use of E.I. Altman's, J. Gajdka’s and D. Stos's models. Both
models were used in the group of the studied companies of Opole and Zachodnio-Pomorskie
provinces. The research showed that incurred credit contributed to improvement of the
financial liquidity in both groups. However, credits of greater worth led to the lessened
increase of net profit and contributed to the small decrease of companies showing net loss. On
the other hand, the group of companies, in which credits of lower worth were incurred, could
decrease the number of companies suffering from net loss.
Keywords: company, financial liquidity, credit, discriminant analysis, net profit.

Main Connference Topic: Economy
Introduction
Using the J. Gajdka’s and D. Stos’s model in practice, it should be noted that the model
proves to be perfect for Polish conditions because it reflects the realities of the Polish market,
and demonstrates correctness of incurred credit of studied companies. The E.I. Altman's
model was also used in research because the research results had to be compared in terms of a
difference from the Polish market because this ratio was created for the American market and
its needs.
200 micro, small and medium-sized companies were studied in the research, including 100
companies from the Opole province and 100 companies from the Zachodnio-Pomorskie
province. Such a big group of the studied companies was used to indicate correctness of the
company's decision on incurring credit. The goal was to indicate that the company, which did
not have the financial liquidity, or was operating on the border of its maintenance, could
improve or regain the financial liquidity after incurring credit [5, 6, 7, 11]. However, the
amount of properly incurred credit and the period of its duration were additionally taken into
account because they had significant influence on the company's financial liquidity. Used
models also enabled to indicate that the incurred credit influenced development of the
327
subject's running a business positively, and even contributed to improve its financial
condition. Nevertheless, it had to be incurred in a proper amount and for a proper period.
J. Gajdka’s, D. Stos’s and E.I. Altman’s discriminant models
The J. Gajdka’s and D. Stos's model reflects the best research results because it was
developed in Poland, where Polish companies underwent discriminant analysis. The J.
Gajdka’s, D. Stos's and E.I. Altman's models are comparable, but were developed for different
economic realities. When both models were compared, differences between them were
indicated [12].
The E.I. Altman's model has been used for dozens of years. It may distort a picture and
a result of the research because it was used as early as in the 1970s. The credit risk related to
issuing credit for investments is mostly the result of the credited company's wrong prediction
of its realization [2, 4], and as it can also be noticed in the conducted research, the wrong
credit amount, either too low, or too high, and the time period, for which it was incurred. The
E.I. Altman's model enables to forecast the course of economic events happening in the
company within subsequent two years of its operation. The "Z" value, calculated on the basis
of 5 economic and financial ratios, is the basis of this model [3,12]:
Table 1. E.I. Altman’s guidelines for the company’s classification.

The "Z" ratio's value The chance of the company's bankruptcy
Z <= 1.8 Very high
1.8 < Z < 3 Indefinite, but significant
Z => 3 Low
Source: E. I. ALTMAN
Z = 1.2 x1 + 1.4 x2 + 3.3 x3 + 0.6 x4 + 0,999 x5

where:
X1 - working capital / assets in total
X2 – net income / assets in total
X3 – EBIT / assets in total
X4 – net market value of the company/liabilities in total
X5 – trade (net sale) / assets in total
These ratios are statistical assessment of performance of not only the manufacturing
company, but also other kinds of the company. If the result of "Z" value's calculations is
below three, it means that credit ratings of the company's need to be examined and assessed
thoroughly because the indefinite or low chance of the company's bankruptcy, or its ability to
overcome such situation, should be expected.
In calculations of the E.I. Altman's "Z" ratio, attention should be paid on the X5 ratio's
value, which is trade (net sale) to assets in total, if the denominator shows low value in
relation to the numerator. It may mean that the company is underfunded. That is why values
not exceeding three that is X5<= 3 are considered to be the proper level of this ratio because,
otherwise, the general assessment may be distorted.
By the use of the "Z" ratio, we can predict c. 80-90% of accurate forecasts of the
companies' bankruptcy, or occurring problems with companies' maintenance of the financial
liquidity. It concerns both one- and two-year periods.
E.I. Altman, in his original model, took a sample consisting of 66 companies operating
in the same period and sector of economy. Half of these companies was insolvent. At the
beginning, he estimated values of 22 financial ratios. Later, the number of these ratios, after
328
conducting statistical tests and verification of their meanings (values), was lessened to 5.
These 5 ratios reflect economic and financial situation and predicted credit rating best.
The cut-off point in the E.I. Altman's model amounts to 2.675. It is the discriminatory
line separating the set of companies into two groups that is companies with high (below
2.675) and low likelihood of insolvency (above the cut-off point). According to E.I. Altman's
research, the error of wrong companies' qualification to the set was then the smallest – as
many as 94% of companies, which bankrupted in the previous year, reached the "Z" function's
value below 2.675. In the same period, the studied value of 97% of solvent companies was
above the cut-off point. Correctness of the classification a year prior to bankruptcy amounted
to 95%, and, by analogy, results of the whole sample amounted to 82% two years prior to
insolvency.
In Poland, D. Zarzecki undertook verification of discriminant analysis's models in
2003. The result of the analysis of these models conducted by D. Zarzecki shows that the J.
Gajdek’s and D. Stos’s model brings the best research results [12]:
Z= 0,7732059 – 0,0856425 x X1 + 0,0007747 x X2 + 0,9220985 x X3 +

+ 0,6535995 x X4 – 0,594687 x X5
where:
X1 – revenues from the sale/assets in total,

X2 – (short-term liabilities/cost of production
sold) x 360,
X3 – net profit/assets in total,
X4 – gross profit from the sale/net revenues,
X5 – liabilities in total/assets in total.
In this model, the cut-off point is 0.45, which means that a studied company is not
endangered with bankruptcy, if the above value is reached. This cut-off point is different from
the one given by E.I. Altman, but it is related to the used ratios, which are different in
particular models.
A comparison of these two research methods by E.I. Alrman, J. Gajdka and D. Stos
leads to clear conclusions and gives an opportunity to consider both studied methods – the one
developed and functioning in the world, and the one used in Polish companies and adjusted to
the Polish market’s conditions. The other method is a little bit more correlated with Polish
companies. However, ratios show that both methods are close to each other, and comply in
indicating these companies, which can be included either to the group of companies
endangered with bankruptcy, or the one, in which there are successful companies able to
compete on the market with incurring credit [8,9].
Strengths of the discriminant analysis are:

- the system's easy functioning,
- the assessment's objectivity, in which measurable financial information is the basis,
- effectiveness measured with the forecasts' regularities scale,
- providing early warnings about credit risk.
Weaknesses are:
- effectiveness dependent on the quality of financial data set necessary to estimate values of
particular ratios,
- only selected, not complex, quantitative information is taken into account in the model's
construction,
329
- quantitative information is static.
During the study of companies with the use of both models, the method enabling to
compare them in a way presenting their financial capabilities unambiguously was constructed.
Depicted values of the "Z" ratios were present in conjunction with several variables
presenting what differences occur at the chosen amount of contracted credit and its period [1].
Used models are very useful in assessment of the companies' crediting and are often
used in practice [3]. Nonetheless, conducted analyses are not attempts to estimate specific
worth of credit and the period for which the company should go in debt, but the credit's
maximum worth and period. It may lead to issuing credit to a company, which may not be
able to repay it in future [8,9].
The use of E.I. Altman’s, J. Gajdka’s and D. Stos’s discriminant analysis models in
order to indicate correctness of a decision on incurring credit on the example of 200
studied companies from Opole and Zachodnio-Pomorskie provinces.
In the Opole province, companies were studied with a comparison of the net profit in
following years: a year prior to issuing credit, in the year of issuing credit and two years after
issuing credit. The net income (division into following groups: from PLN 0 to PLN 100,000,
from PLN 100,100 to PLN 200,000, from PLN 200,100 to PLN 500,000, and from PLN
501,000 to 1,000,000) and net loss were taken into account. The goal of such an analysis was
to study range and opportunities of the obtained credit’s amount in relation to the net profit
and owned capital. The net profit, or net loss, indicated whether credit contributed to
maintenance and improvement of the companies’ financial liquidity, or it led to their
bankruptcy.
In 2010-2015, in the Opole province, companies of lower net profit (from PLN 0 to
PLN 100,000 and from PLN 100,100 to PLN 200,000) were the most numerous – there were
80 such companies. In the Zachodnio-Pomorskie province, ranges between PLN 0 and PLN
100,000, and between PLN 100,100 and PLN 200,000 were dominant – there were 67 such
companies. It should be noted that the studied companies tended to maintain net profit.
Table 2. Profit or loss of studied companies of the Opole province examined (100 examined
companies).
Year Profit Profit Profit Profit Net
0-100,000 100,100 – 200,000 200,100–500,000 500,100–1,000,000 loss
2010 28 33 15 4 20
2011 33 35 11 3 18
2012 35 37 10 3 15
2013 38 42 10 3 7
2014 37 41 12 5 5
2015 35 43 11 6 5
Source: own development based on 100 studied companies of the Opole province.
330
Table 3. Profit or loss of studied companies of the Zachodnio-Pomorskie province examined
(100 examined companies).
Year 0-100,000
Profit 100,100 – 200,000
Profit 200,100–500,000
Profit 500,100–1,000,000
Profit Loss
2010 30 30 20 2 18
2011 31 31 18 1 19
2012 29 32 18 3 18
2013 29 34 18 2 17
2014 29 35 19 2 15
2015 28 39 19 2 12
Source: own development based on 100 studied companies of the Zachodnio-Pomorskie
province.
Moreover, incurring credit even led to decrease of the number of companies, in which the loss
occurred – from 20 to 5 in the Opole province, and from 18 to 12 in the Zachodnio-Pomorskie
province. It proves that the decision on incurring credit, which contributed to improvement of
the financial liquidity, was correct. These data were summarized in tables 2 and 3.
In tables 4 and 5, the average net profit, average long-term and current assets, average worth
of issued credit, and average loss of the companies that do not have the financial liquidity
were presented.
In the table 4, it should be noted that the average value of issued credit amounts to PLN
251,425. It is the working capital facility, revolving in subsequent years, and issued in 2011.
The value of credit constitutes c. 1/3 of average values of current assets that is c. 33%. It is the
evidence that credit, which is c. 30% of current assets, causes maintenance of the financial
liquidity, and does not cause financial destabilization.
Table 4. Average net profit in relation to value of long-term and current assets of studied
companies of the Opole province in Pln Thousands.
Year Average
profitNet Average
of Long-term
assetsvalue Average
of Current
assets
value Average
assets invalue
totalof Average
the issued
value
credit
of Average Loss
Before issuing credit

2010 (80 199,875
companies) 450,456 658,475 1,108,931 X 225,154
(20 companies)
The year of issuing credit
2011 (82 205,895

companies) 552,326 798,459 1,350,785 251,425 (18 289,478
companies)
After issuing credit
2012 (85 245,425
companies) 582,954 821,258 1,404,212 X 198,487
(15 companies)
2013 (93 263,125
companies) 623,745 836,547 1,460,292 X 125,158
(7 companies)
2014 (95 266,254
companies) 639,532 840,128 1,479,660 X 134,578
(5 companies)
2015 (95 295,365
companies) 644,588 855,655 1,500,243 X 134,578
(5 companies)
331
Source: own development based on 100 studied companies of the Opole province.
Table 5. Average net profit in relation to value of long-term and current assets of studied
companies of the Zachodnio-Pomorskie province in Pln Thousands.
Year Average
profitNet Average
of Long-term
assetsvalue Average
of Current
assets
value Average
assets invalue
totalof Average
the issued
value
credit
of Average Loss
Before issuing credit

2010 (82 205,647
companies) 400,657 443,945 844,602 X 230,631
(18 companies)
The year of issuing credit
2011 (81 210,423

companies) 426,132 421,564 847,696 249,521 (19 250,417
companies)
After issuing credit
2012 (82 253,781
companies) 457,654 400,547 858,201 X 229,639
(18 companies)
2013 (83 264,934
companies) 475,364 431,287 906,651 X 210,597
(17 companies)
2014 (85 279,226
companies) 486,954 472,358 959,312 X 200,124
(15 companies)
2015 (88 288,487
companies) 480,412 499,649 980,061 X 184,943
(12 companies)
Source: own development based on 100 studied companies of the Zachodnio-Pomorskie

province.
While analysing the table 5, it should be noted that the average value of issued credit amounts
to PLN 249,521. It is the working capital facility, revolving in subsequent years, and issued in
2011 as well. However, in case of companies of the Zachodnio-Pomorskie province, its worth
in relation to current assets is c. 1/2, so it is 59% of the credit's worth in relation to current
assets. In this case, it can be seen clearly that companies maintain the financial liquidity
harder with such debts. Moreover, the group of companies suffering loss enlarged from 18 to
19 in the year of incurring credit. As late as in 2012-2015, the group decreased to 12
companies. But in the Opole province, the number of companies suffering loss decreased four
times – from 20 to 5 with 30% relation of incurred credit to current assets, while in the
Zachodnio-Pomorskie province, the number of such companies decreased from 19 to 12 with
c. 50% relation of incurred credit to current asserts [8, 9].
In conclusion, too heavy burden with debt and relying on foreign capital (over 59% of the
current assets' value) leads to disturbance of the company's financial liquidity because the
company is not able to pay such debt and use obtained funds properly and sensibly. Only
these companies where foreign capital is 30% of current assets will use them sensibly and in
accordance with their financial opportunities.
The credit risk taken by a bank due to granting funds was minimal in case of
companies with less credit. It is demonstrated by another calculations and use of E.I.
Altman’s,J. Gajdka’s and D. Stos's methods. Nevertheless, granting funds constituting c. 50%
of the company's current assets was too dangerous both for the bank and the company.
Analysing course of economic events since the moment preceding issuing credit [10]
and subsequent years of the activity's duration, five selected ratios corresponding to particular
332
models were used. The cut-off points for two chosen discriminant analysis models were
obtained.
Table 6. The use of E.I. Altman’s, J. Gajdka’s and D. Stos’s discriminant analysis models on
the example of 100 studied companies from the Opole province.
E.I. Altman's model 2010 2011 2012 2013 2014 2015
The number of companies showing profit 80 82 85 93 95 95
The average "Z" ratio for companies 3.12 3.45 3.32 4.11 4.15 4.17
Absence of risk, values close to and above 3.0 low absence absence absence absence absence
The number of companies showing loss 20 18 15 7 5 5
Absence of risk, values close to and above 3.0 high medium high high high high
The J. Gajdka and D. Stos's model 2010 2011 2012 2013 2014 2015
Absence of risk, values close to and above 0.45 absence absence absence absence absence absence
Absence of risk, values close to and above 0.45 high medium high high high high
Source: Own development on the basis of data of 100 selected companies from the Opole
province.
Table 7. The use of E.I. Altman’s, J. Gajdka’s and D. Stos’s discriminant analysis models on
the example of 100 studied companies from the Zachodnio-Pomorskie province.
E.I. Altman's model 2010 2011 2012 2013 2014 2015
Absence of risk, values close to and above 3.0 low low low absence absence absence
Absence of risk, values close to and above 3.0 high high high high high high
The J. Gajdka’s and D. Stos's model 2010 2011 2012 2013 2014 2015
Absence of risk, values close to and above 0.45 low low absence absence absence absence
Absence of risk, values close to and above 0.45 high high high medium medium medium
Source: Own development on the basis of data of 100 selected companies from the
Zachodnio-Pomorskie province.
333
On the example of the studied companies of the Opole province, the Altaman's model shows
significant improvement of the ratio in 2011 (3.45), when companies incurred credit, in
relation to 2010 (3.12). Improvement of the selected companies' financial condition proves
the above. In subsequent years, this value is the same, and in 2015, increases to 4.17.
The J. Gajdka’s and D. Stos's model also indicates values above the cut-off point from 0.79 to
1.06 in 2010-2015. Only in companies suffering from loss the cut-off's ratio tends to
deteriorate with the use of both methods, which proves that even properly selected credit does
not improve the companies' financial liquidity. The values described above present research
included in the table 6.
In turn, in the table 7, E.I. Altman’s, J. Gajdka’s and D. Stos's models were also used during
research of companies of the Zachodnio-Pomorskie province. The above research shows that
companies, which maintained the financial liquidity with incurring credit, improved their
financial condition, but their cut-off point's ratio are different from ones noted in the Opole
province.
In the E.I. Altman's model, improvement can be seen in 2010-2015 – ratio's value increased
from 2.99 to 3.88. Whereas in the J. Gajdka’s and D. Stos's model, the ratio's values
increased from 0.42 to 0.73. It means that credit's worth constituting 59% of the current
assests' worth is too heavy burden, and prevents from significant improvement of the
financial liquidity. Moreover, it does not show the ratio similar to the one obtained in
research in the Opole province.
Opole province - companies showing profit

Zachodnio-Pomorskie province - companies showing profit
Opole province - companies showing loss
Zachodnio-Pomorskie province - companies showing loss
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
2010 2011 2012 2013 2014 2015
Figure 1. The use of E.I. Altman's model in the analysis of 200 companies of Opole and
Zachodnio-Pomorskie provinces showing profit and loss in 2010-2015. Source: own
development on the basis of data of selected companies from Opole and Zachodnio
Pomorskie provinces.
334
Opole province - companies showing profit
Zachodnio-Pomorskie province - companies showing profit
Opole province - companies showing loss
Zachodnio-Pomorskie province - companies showing loss
0.8
1.2
1 2010 2011 2012 2013 2014 2015
0.6
0.4
0.2
0
Figure 2. The use of the J. Gajdka’s and D. Stos's model in the analysis of 200 companies of
Opole and Zachodnio-Pomorskie provinces showing profit and loss in 2010-2015. Source:
own development on the basis of data of selected companies from Opole and Zachodnio
Pomorskie provinces
Furthermore, the cut-off points' values of the companies showing net loss in the Zachodnio
Pomorskie province do not show significant improvement of the financial liquidity, but they
slightly vary in 2010-2015. In the E.I. Altman's method, they vary from 1.28 to 1.65, and in
the J. Gajdka;s and D. Stos’s method – from 0.27 to 0.40.
It evidences that greater worth of credit could not ensure companies satisfactory improvement
of the financial liquidity, but worsened their situation.
Analysing net profit of the companies, it can be noted that issued credit influenced
their development positively. There, its huge influence on the companies' net income can be
seen. Thanks to opportunity to incur credit, companies could develop dynamically and as
they planned in their assumptions with credit constituting 30% of the current assets' worth.
Only credit constituting 59% of the current assets' worth did not cause major changes in
many companies and did not lead to improvement of the financial liquidity of the greater
number of companies showing net loss.
The sensibly selected credit resulted in the greater increase of net profit and
contributed to the increase of net income and profit, without which the company could not
develop and reach significant results.
Conclusions
It should be emphasised that contracted credit in studied companies contributed to

improvement of the financial liquidity. However, it was mostly in case of companies, whose
credits were c. 30% of the current assets' worth. Furthermore, in case of companies of the
Zachodnio-Pomorskie province, whose credits were 59% of the current assets' worth, the
financial liquidity was not improved as much as in case of lower credits incurred by the
studied companies of the Opole province. Nevertheless, credits enabled companies to settle
current liabilities, which is proven by lessened number of companies suffering from net loss
because such a phenomenon occurred in the group of 100 studied companies in 2010-2015.
Therefore, companies maintained good financial condition after issuing credit. It should be
stated clearly that the decision on incurring credit was, indeed, correct. But it should be borne
335
in mind that the amount of incurred credit must not exceed specific worth preventing from
repaying incurred credit and settling liabilities, which could lead to the company's inability to
debt service. That is why c. 30% of the company's current assets' value, resulting from
research of the companies, is the optimal amount.
The period, for which credit was incurred, is highly significant, but the studied
companies contracted the working capital facility for one year with the possibility to renew it
in subsequent years, which did not affect research and cause its distortion.
The companies that had unevenly balanced liquidity or needed additional financial resources
for the functioning on the market, and that took up a credit above the value exceeding 59% of
the external funds in relation to their current assets, did not maintain the liquidity, and only 6
companies improved it in relation to 12 companies that were at risk of bankruptcy, which was
reported in the Zachodnio-Pomorskie Voivodeship. While the number of companies in Opole
Voivodeship, which improved their liquidity, is 15, that is several times more than in
Zachodnio-Pomorskie Voivodeship, but the improvement occurred thanks to a taken credit,
however the debt amounted only to 30% of the external funds in relation to their current
assets. Therefore, there must be a firm answer that the credits that are incurred in the form of
cash and account for more than 59% of the external funds in respect of current assets will not
have a good impact on the financial condition of the studied companies, since such a capital
obligation and interest liability constitutes a major burden for the company, which must
within next months, after a credit was incurred, pay it back to the bank.
The research was conducted based on 100 companies in the Opole province and 100
companies from the Zachodnio-Pomorskie province. The E.I. Altman's model was also
applied in the paper and it was demonstrated that the value of the credit and the period for
which it was incurred as well as the ratio of the amount of external funds to the working
capital are of great importance to a company and its liquidity. The companies that were
subject to the research, voluntarily made the research data available, i.e. the balance sheet and
income statement.
Brief biographies of the Rafał Parvi

Assistant professor at the Wroclaw School of Banking, at the Faculty of Economics in
Opole. An expert in the field of finance, has extensive knowledge about financing for
companies, finance management in companies and their rational use to ensure and improve
the financial liquidity of companies. He worked as an Assistant in the Department of
Accounting in Polski Bank Inwestycyjny SA in Opole as well as a Senior Assistant in the
department of credits and business entities in Polski Bank Inwestycyjny SA in Opole. He
acquired practice in business management as the Manager for Finance and Management at
Axxel Sp. z o.o. in Opole. He became a chartered auditor of the District Court in Opole as
well as the District Court in Wrocław and District Court in Warsaw regarding: economics,
finance, banking and accounting. He has been performing these functions until the present
day. He received a qualification certificate number 13892/99 from the Ministry of Finance,
Accounting Department in Warsaw for providing bookkeeping services on the basis of
Article 81, section 3, item 4 and 4a of the Accounting Act of September 29, 1994 (Journal of
Laws No. 121, item 591 as amended). In 1995, he became MSc in economics at the Opole
University. In 2005, he was granted the title of PhD in Economics, specialization: Finance
and Banking at the University of Agriculture in Szczecin, Faculty of Economics and
Organization of Food Management.
References
336
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inwestycji", Zeszyty Naukowe Uniwersytetu Szczecińskiego nr 760, Finanse, Rynki
Finansowe, Ubezpieczenia nr 59, 2013, pp. 11-20.
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Czekaj, Warszawa, PWN, 2008, pp. 10-17.
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l’entreprises agricole”. Nimes, CIOSTA, 1980, pp. 44 - 55.
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„Firma i rynek” Zachodniopomorska Szkoła Biznesu Szczecin 2002 nr 2/3, pp. 122 - 124.
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Warszawa, 2014, pp. 245-261
6. Jaworski, W. L., „Bankowość”. Praca zbiorowa pod redakcją W.L. Jaworskiego i Z.
Zawadzkiej, Warszawa, Poltext 2001, pp. 638-641.
7. Nowak E., „Analiza sprawozdań finansowych”, PWE, Warszawa, 2014, pp. 185-194.
8. Parvi R., “Forecasting correctness of incurring credit with the aid of E.I. Altman’s, J.
Gajdka’s and D. Stos’s discriminant analysis models on the example of 200 studied
companies from Opole and Lower Silesia provinces”, EDIS - Publishing Institution of the
University of Zilina, Zilina, 2015, pp. 149-155
9. Parvi R., “Forecasting correctness of incurring credit with the aid of E.I. Altman’s, J.
Gajdka’s and D. Stos’s discriminant analysis models on the example of 200 studied
companies from Opole and Kujawsko-Pomorskie provinces”, EDIS - Publishing Institution
of the University of Zilina, Zilina, 2015, pp. 130-146
10. Pomykalska B., Pomykalski P., „Analiza finansowa przedsiębiorstwa”, Warszawa, PWN,
2007, pp. 178-189.
11. Rutkowski A., „Zarządzanie finansami”, PWE, Warszawa, 2007, pp. 420-429.
12. Zarzecki D., „Analiza dyskryminacyjna jako metoda oceny zagrożenia bankructwem”.
W: Zarządzanie finansami. Mierzenie wyników i wycena przedsiębiorstw. Szczecin,
Uniwersytet Szczeciński 2003, pp. 173-181.
337
VALUATION OF SHARES AND THEIR FAIR VALUE OF THE
COMPANIES LISTED ON THE FUEL SECTOR QUOTED ON THE
WARSAW STOCK EXCHANGE IN POLAND WITHIN 2007-2016
Rafał Parvi
Faculty of Economics
WSB University in Wrocław, Faculty of Economics in Opole, Poland
Fabryczna 29-31, 53-609 Wroclaw, Poland
rafalp4@o2.pl
Abstract
This paper examines share price of the companies listed on the WIG-FUEL and their fair
value between 2007-2016. Data from 2007 to 2016 were collected from the Stooq.pl (Polish
portal of shares). Two hypotheses are tested: (1) value of the shares based on the market
price; (2) value of the shares as the fair value of shares. The fuel market was analysed and
characterised, also the companies participating in it were described. Nevertheless, the market
value of shares does not reflect the fair value of the shares which is currently assigned to
different companies in the sector. The research analysed the key financial ratios, the actual
value of shares; also the fair value of the fuel sector companies listed on the Warsaw Stock
Exchange was calculated.
Keywords: power engineering, fair value of shares, company, market value of shares.
Main Connference Topic: Economy
Introduction
The fuel market in Poland is developing and operating very well, and fuel concerns such as
PKNORLEN even extend beyond the borders of the country. It should be noted that along
with the sale of fuel, the fuel concerns earn much money, and even after the depreciation,
they earn more than average and have a very high rate of return. The Polish fuel market is
consolidating and according to it, the share of five grand fuel concerns, including PKN Orlen
and Lotos and three foreign ones, is growing. The number of single petrol stations is
decreasing, cheap stations located at supermarkets are disappearing. The all year of 2015
brought surprisingly good results of retail segments of large Polish fuel companies.
Evaluation of shares allows to some extent for determining the company’s value as a share
value does not depend exclusively on demand and supply on the market, but also on many
factors which shape its rate starting from valuation of an enterprise by means of different
methods up to showing the mechanisms changing the share value in a way increasing its
value or underrating it. Therefore, valuation of shares and estimation of their fair value is
extremely important. This must be done in an objective manner. Repeatedly, the value of
shares listed on WIG-FUEL of the Stock Exchange is distorted and underrated, which is
connected with an incorrect valuation of an enterprise’s value listed on the Warsaw Stock
Exchange. The research concerns the determination of fair value of shares listed on the index
of WIG-FUEL when analyzing simultaneously chosen rates of particular companies from
338
WIG-FUEL. The value of enterprises listed on this index was checked for proper
determination of their fair value as currently their values appears to be underrated.
The WIG-FUEL index, presented in Figure 1, shows that from 2011 to 09.2015, the fuel
sector companies in Poland showed a lateral trend in their values. However, from the second
quarter of 2015, a significant upward trend as well as the achievement of the highest levels,
up to the level of 5134 points in the index, and now down to the level of 4286 the values
reported on 05.01.2016 reflect the upward trend and confirm it. However, the market values
do not reflect the fair value of the fuel sector companies.
Figure 1: WIG-FUEL in the period from 01.2007 to 01.2016 [12].
Source: www.stooq.pl
Therefore, it can be assumed that the fuel market in Poland is highly dependent on the global
economy. Most of the companies quoted on the WIG-FUEL index, have a very good
financial condition and promise great hope for the rapid and large increases of their values.
For that reason, the fair value should be included in the market value, however, the market
value differs from it due to some other external factors on the financial market and even
speculative factors in the development of the share price of the fuel companies quoted on the
Warsaw Stock Exchange in Poland [1, 6, 7,8].
Analysis and valuation of the fuel sector's companies quoted on the Warsaw Stock
Exchange (WSE) in Poland.
Shares are the most important group of financial instruments listed on the Warsaw Stock
Exchange. In 1991, during the first quotation, the shares were the only financial instrument.
At the end of the 90s, the structure of the Warsaw Stock Exchange changed as other financial
instruments, including forward contracts, were introduced to turnover. On the first exchange
session, shares of 5 companies were listed. In the subsequent years, there was observed an
increase in the number of companies and their market value [2, 4, 5].
339
A share is an instrument combining rights of property and non-proprietary character which
result from shareholder’s participation in a joint-stock company or a limited joint-stock
partnership, and the sum of rights and obligations that a shareholder has within the
framework of a company or a partnership or a part of a share capital [3, 9, 10, 11, 12, 13].
The following property rights are vital for the valuation of shares:
- right to a dividend (share in a company’s profit assigned for division among shareholders),
- right to participation in the division of assets of a company in the case of its liquidation,
- right to subscription of shares of a new stock issue (The Code of Commercial Companies
and Partnerships grants the hitherto shareholders a right to taking up of shares on a new sock
issue in the case of an increase of a capital by a company) [5, 9, 10, 11, 12, 13].
Table 1: The fuel sector companies quoted on the Warsaw Stock Exchange in Poland as of
05.01.2016.
Name Average rating rating

DUO 3.5/5.0 AA
EXILLON 5.0/5.0 No data
LOTOS 4.0/5.0 BBB
MOL 4.5/5.0 BB
PGNIG 3.5/5.0 AAA
PKNORLEN 4.0/5.0 AA
SERINUS 4.0/5.0 D
Source: own development based on the data of the Warsaw Stock Exchange
05.01.2016.
Name Current price PLN Maximum price PLN

from the beginning of the stock
exchange quotation
DUO 3.43 7.45
EXILLON No data 20.72
LOTOS 27.00 51.22
MOL 193.00 368.60
PGNIG 4.92 6.86
PKNORLEN 64.68 76.14
SERINUS 1.58 18.90
340
In the fuel sector there are two companies, the values of which approach their maximum
prices on 05.01.2016, can be recorded, and they are PGNiG and PKNORLEN.
However, other companies do not show their maximum or even fair value, though they can
show the net profit and good financial condition, and they are LOTOS and MOL. Some
companies were overvalued by even 90%. The flagship companies, such as PKNORLEN and
PGNiG, stay ahead with the best results, as shown in Table 1-2.
Table 3-4 presents the key ratios that show the financial condition of the fuel sector
companies. Within the nine examined companies, the generated profit per share was reported
in nine companies, which should be regarded as a great success of this sector compared to
other sectors.
It shows that the fuel companies prosper properly on the financial market and are able to
record higher or lower profits.
The price to the operating earnings shows the losses of the company at the negative value,
and this state of affairs was not reported in seven stock exchange quoted companies, and in
two companies, the calculation cannot be performed due to the lack of data [9, 10].
In contrast, analysing P/BV and P/P, it should be noted that both the price to the book value
and the price to profit demonstrate that two companies exemplary operate on the market and
have a value of more than 1.0, and these are DUO and PKNORLEN. Other companies do not
significantly differ from the average values, and these are LOTOS, MOL, PGNiG and
SERINUS.
Table 3: Technical evaluation of the fuel sector companies quoted on the Warsaw Stock
Exchange in Poland as of 24.04.2015
Name P/OE (price/

earnings)
operating P/BV
(price/ book value)
DUO 13.52 1.49
EXILLON 0.00 0.00
LOTOS -15.03 0.61
MOL 11.75 0.66
PGNIG 7.27 0.94
PKNORLEN 8.18 1.15
SERINUS -0.54 -0.54
341
Exchange in Poland as of 05.01.2016.
Name (price/profit)
P/P Profit per share
DUO 0.49 0.052

EXILLON 0.00 No data
LOTOS 0.21 -1.348
MOL 0.29 (HUF) 873.831
PGNIG 0.76 0.049
PKNORLEN 0.30 1.859
SERINUS 0.31 -0.385
Table 5-6 presents the studies concerning, among others, the net profit, depreciation,
EBITDA and assets of the telecommunication sector companies.
According to the obtained values, it is clear that four companies showed a profit, which was
confirmed by the previous ratios included in Table 6-7. In contrast, four companies have
shown a substantial profit which was generated in 2015, and they were DUO, MOL, PGNiG,
PKNORLEN.
Name Netthousands
profit (netPLN
loss) in Depreciation in thousands PLN
DUO 5407 0
EXILLON No data No data
LOTOS -249193 175955
MOL (HUF) 91332000 (HUF) 80875000
PGNIG 291000 686000
PKNORLEN 795000 469000
SERINUS -30281 4576
342
Name EBITDA in thousands PLN Assets in thousands PLN

DUO 5326 392715
EXILLON No data No data
LOTOS 82393 18847571
MOL (HUF) 161277000 (HUF) 2147483647
PGNIG 1313000 48739000
PKNORLEN 1625000 49866000
SERINUS 6469 192212
According to the book value per share, it is possible to deduce that some companies are
heavily overvalued, and they are LOTOS, MOL and PKNORLEN, and in the case of the
DUO companies, slightly overvalued (Table 7).
30.09.2015
Name Book value per share in PLN
DUO 2.537
EXILLON No data
LOTOS 44.252
MOL (HUF) 18301.226
PGNIG 5.256
PKNORLEN 51.650
SERINUS 0.602
However, it is important not to follow this opinion because the values are only the book
values, and the calculation of them is purely mathematical and financial. In the case of using
the economic attitude and interpretation, it would occur that the companies do not have the
fair value.
Currently, the value of some companies deviates from the maximum value achieved a few
years ago. The only exceptions are PGNiG and PKNORLEN, which achieved the value close
near to the maximum one. Other companies have the values of approx. 90% of the maximum
one.
343
05.01.2016.
Name Fair value Deviation from the fair value in PLN

DUO 6.90 3.47
EXILLON 12.00 No data
LOTOS 45.00 18.00
MOL 299.00 109.00
PGNIG 6.50 1.58
PKNORLEN 75.00 10.32
SERINUS 7.50 5.92
However, the fair value, which should be reflected by the share prices of the examined
companies, in some cases, differs from the calculated value, which was presented in Table 8.
In some companies, it is even approx. 50%-90% of the current values, and they are SERINUS
and DUO. In a few cases, the fair value is similar to the current value of the examined
companies, and they are PGNiG and PKNORLEN.
Deviation from the fair value in PLN = DevFV
DevFV = Fair value - current value [9, 10].
Conclusions
The share price of the fuel sector companies quoted on the Warsaw Stock Exchange in
Poland is similar to the fair value because there is a high demand for fuel in the world.
Though, fuel companies demonstrate a profit and the fair value at the same time because the
fuel market in Poland is developing very well, and even promising bigger development for
the future years. In some European Union countries, the development of the fuel market is
faster because these countries have access, in larger quantities, to the resources, such as oil or
natural gas which means that they do not have to import significant amounts outside its
borders.
The fair value of all the fuel sector companies quoted on the Warsaw Stock Exchange in
Poland should be achieved within two years, by 2017, because the fuel sector is developing
very rapidly.
Brief biographies of the Rafał Parvi
Assistant professor at the Wroclaw School of Banking, at the Faculty of Economics in

Opole. An expert in the field of finance, has extensive knowledge about financing for
companies, finance management in companies and their rational use to ensure and improve
the financial liquidity of companies. He worked as an Assistant in the Department of
Accounting in Polski Bank Inwestycyjny SA in Opole as well as a Senior Assistant in the
department of credits and business entities in Polski Bank Inwestycyjny SA in Opole. He
344
acquired practice in business management as the Manager for Finance and Management at
Axxel Sp. z o.o. in Opole. He became a chartered auditor of the District Court in Opole as
well as the District Court in Wrocław and District Court in Warsaw regarding: economics,
finance, banking and accounting. He has been performing these functions until the present
day. He received a qualification certificate number 13892/99 from the Ministry of Finance,
Accounting Department in Warsaw for providing bookkeeping services on the basis of
Article 81, section 3, item 4 and 4a of the Accounting Act of September 29, 1994 (Journal of
Laws No. 121, item 591 as amended). In 1995, he became MSc in economics at the Opole
University. In 2005, he was granted the title of PhD in Economics, specialization: Finance
and Banking at the University of Agriculture in Szczecin, Faculty of Economics and
Organization of Food Management.
References
1. Borowski K., „Wyznaczanie punktów zwrotnych indeksu Wig przy pomocy wybranych
metod analizy czasowej”. Bossa.pl
2. Copeland T., Koller T., Murrin J. „Wycena: mierzenie i kształtowanie wartości firmy",
WIG - Press, Warszawa 1997, pp. 65-69.
3. Frąckowiak W., „Fuzje i przejęcia przedsiębiorstw”, PWE 1998, pp. 34-42.
4. Jajuga K., Jajuga T. „Inwestycje", Wydawnictwo Naukowe PWN, Warszawa 1996, pp. 34
57.
5. Kufel M., „Metody wyceny przedsiębiorstw", Wydawnictwo Park, Bielsko Biała 1992, pp.
78-89.
6. Parvi R., “Share price of the companies listed on the WIG-UKRAINE and their fair value”,
Share price of the companies listed on the WIG-UKRAINE and their fair value”, Itall Ltd.,
2014, pp. 179-185.
7. Parvi R., “Investment funds and their financial effectiveness”, Goce Delchev University
Macedonia & THOMSON Ltd. Slovakia, EDIS - Publishing Institution of the University of
Zilina, 2014, pp. 262-267.
8. Parvi R., “Share price of companies listed on WIG20 and their fair value”. EDIS -
Publishing Institution of the University of Zilina, 2014, pp. 169-177.
9. Parvi R., “Analysis of companies of the WIG-SPOŻYW sector based on an example of the
companies quoted on the Warsaw Stock Exchange in Poland and their fair value”. EDIS -
Publishing Institution of the University of Zilina, 2015, pp. 65-70
10. Parvi R., “Analysis of companies of the chemical sector based on the example of
companies quoted on the Warsaw Stock Exchange in Poland and their fair value”, EDIS -
Publishing Institution of the University of Zilina, 2015 pp. 34-38
11. Pierce R., “Stocks, Options & Spreads, Infinity Publishing” 2004, pp. 110-115.
12. Thompson B., “Stock Market Superstar”, Insomniac Press 2008, pp. 52-54.
13. Veale S., “Stocks, Bonds, Options, Futures”, Prentice Hall Press 2001, pp. 88-125.
14. http://stooq.pl/q/?s=wig_paliw
345
The predictability of the revenues and their impact on the central governance
Authors: Assist. Prof. Abdulmenaf Sejdini, MsC. Armanda Tola (Keqi)
Institute affiliation: Epoka University
E-mail: asejdini@epo.edu.al
akeqi@epoka.edu.al
Abstract:
When the budget is on process, during the predictability of incomes, it may include errors
and these ones will be the main topic of our paper. The study shows an overstatement or
understatement tendency of the incomes during their forecast by using a set of real economic
and fiscal data. Countries in general, among which also our country, for which we have made
a comparative analysis, not predictably have achieved their goals. The reasons of
overstatement, according to the literature review, may be intentional on the part of the
government but also unintentional, due to unexpected economic conditions. These errors
have their impacts on the central government, because depending on the type of error, the
government is forced to raise taxes or reduce costs and the time to take such steps is limited.
This study aims to assess the importance and mistakes made during the predictability of the
incomes of the state budget, and how these errors affect on the central government. Also aims
to reveal and undertake various causes of errors in predictions, whether these causes are
deliberate or accidental. Qualitative data will be obtained from the books of renowned
authors in Europe and worldwide, various articles and scientific papers. In terms of
quantitative data, they are insured by serious domestic and international institutions such as
the Ministry of Finance of the respective banks, the Bank of Albania, World Bank etc.
Conference topic: Macroeconomics
1. Introduction
The assessment of the revenues is a very important component in the budgeting process of
each country. Governors and state legislators have to decide the money to invest in different
programs or whether to increase or decrease taxes in order to take strategic decisions, they
need to know how much income they have available to work. The incorrect assessments
shouldn’t be large in order to bring large amounts of revenues. For example in different
countries the error rate can be translated in the budget in millions. In New York, 1 percent of
error is equivalent with 527 million $ of revenues, which are roughly half of the revenues that
the state spends on public assistance. The revenue projections are very important for the state
budget, but predicting how the taxes will "behave" in an economy that is constantly changing,
it is difficult to be exact. So the prediction errors will be made anyway, but the question
remains: how many mistakes will be made and how many are tolerable?
346
The states employ a variety of governmental structures in order to reach a forecast or to
estimate precisely and accurately. They employ boards that include lawmakers, economists
and academics. Some states use their executive power to make predictions, others use their
legislative ones. The evaluation mechanism varies from a country to another one, mostly
based on a three-step mechanism:
1. The forecasting of the national economy.
2. The forecasting of the state economy.
3. Modeling how basic taxes and payment rules will convert economic activity in the
collection of taxes.
As mentioned earlier in the article, different countries use different methods of forecasting
revenues. We can not say which method is more suitable than the other. Many previous
studies that have been done before did not draw any method as superior from the others.
Although the use of quantitative methods improves the process of forecasting, the studies that
generally rely on these techniques suffer from limited data and difficulty in interpretation. As
a result, regardless of which of these states use them, the methods that can be used are not
important because there is no significant and obvious impact on the size error. So the
question that naturally exists: if the methods used do not affect, then what are the factors that
affect the errors associated with the assessment of revenues?
There are a number of factors that can make predictions invalid. Many states use national
data from macroeconomic advisors or different from large firms, and if the source turns out to
have wrong numbers, then the forecasts derived from it are wrong also. Other factors can
influence disasters, volcanoes, earthquakes, floods, that affect the predictions especially in
countries where the main sector of the economy is agriculture and their revenues depend
directly on agriculture. The biggest culprit forecasts are the revenues that grow relying on
unstable parts of the economy and thus they become less predictable. Part of the problem is
how fluctuations in economic activities affect tax collection.
2. The revenues from value added tax

The revenue arising from VAT are different from one country to another. If VAT is properly
drafted according to the terms of the country's economic development, it increases tax
revenue. In industrialized countries the share of revenues from VAT reached the percentage
of 15 to 20 per cent of total tax revenue. While in developing countries VAT occupies a
considerable part and that’s why it has a special importance during the forecast.
Numerous studies show that VAT at a rate (between 10 and 20%) and with few exceptions, is
more favorable when estimating revenues rather than the one with norms and very
exceptions, which complicates the collection of taxes.
The revenues from value-added tax are often lower than those expected because they are
difficult and costly to administer and collect. VAT is strongly administered, by increasing the
use of the capacity available and combating the corruption.
3. The revenues from personal income tax

The revenues are those which are more volatile because considerably rely on the performance
of the stock market. But even the tax structure of each country contributes to the volatility of
347
tax revenue. This is because they are not accustomed and adapted to long-term structural
changes in the economy, which lead to an erosion of the tax base over time and contribute to
a greater reliance on income tax. So some of the structural problems are caused by outdated
state systems. Also, the cyclical nature of the economy has an exaggerated effect on earnings.
During economic cycles, traditionally ceilings on sale are more stable than personal and
corporate incomes. As the volatility increase, so does tax error. Generally, countries have
found difficulties to maintain the system of their income in the same line, or to update
economic stability and to adapt to the ups and downs of the business cycle. States generally
rely on the past experience when they make assessments of their revenues, until the economy
reaches the point of equilibrium. The problem lies in determining the point of equilibrium.
For this problem generally are used statistical models that will capture some of the
fluctuations of the economy, however they will tend towards the status quo. These mistakes,
which tend to overestimate revenues in periods of economic decline and vice versa are the
ones that affect the budget. As mentioned above, the biggest mistakes come from taxes that
have greater variability, therefore are more difficult to predict. In many states the Personal
Income Taxation is difficult to predict because it relies on the incomes from dividends which
can rise and fall according to the performance of the stock market. In periods of recession,
other problems are created in the assessment of the personal incomes. This does not only
decrease the revenues, but also forces more taxpayers to pay what they owe to the
government. Frame forecasting income also has a role in the evaluation of the personal
income taxation, calculated in April. So they can not have an accurate information about this
taxation until the period of April or May. Even the age of the population has a significant
impact on this income. While investment income are highly volatile, the incomes from
pensions, or other similar resources are very durable. Mixing of these revenues coming from
different sources made forecasting even more disadvantaged. Another factor affecting the
personal income forecast is increased by the use of the Internet from consumers that buy and
sell. The collection of taxes from sales through internet is voluntary, many countries that buy
and sell on line are widely spread because it is almost impossible to collect these taxes.
4. The tax from the revenues

The errors coming from the forecasts of the taxation of profit may be too large due to their
large volatility. These errors generally become larger during the periods of recession. The
question naturally would be: Why are these types of taxes so hard to fix? The main reason is
that corporate earnings vary from one year to another. Discounts and downs of the business
cycle make these types of taxes more volatile from all the other kinds. Furthermore, these tax
planners are doing everything possible to find ways to reduce their tax bills as much as
possible. These efforts can have a significant impact on the revenues of the state in a given
year.
Also there are many types of special tax exemptions from normal, which make it difficult to
predict how they will affect the total revenue. In many countries it's even more difficult to
forecast because of the fact that many large companies do not publish their numeric data, so
forecasters do not have access to information. But if the economy of a state is dominated by a
small number of large companies, for which no information exists, it could be catastrophic
348
for the forecast. In most countries, generally, these taxes are taken into account when
forecasting revenues. There are also many new taxes, but no provisions for them are made by
the same agency that makes the assessment of the state revenues. This is because the bulk of
the process of forecasting is based on historical experience, and we can not rely on that for
the new taxes.
5. Case of Albania-Budget process in Albania

In developing the budget in Albania, five general stages are distinguished. In the first stage,
the government drafts the budget and the Ministry of Finance gives the guidelines of the
government based on which, the departments prepare their projects and it is again the
Ministry of Finance, which processes the whole project and then submits it for decision in the
government. In the second stage, it goes through an examination in parliament, which begins
in committee, where amendments are made and then after a general debate and discussion of
its articles in plenary, takes the approve. In the third stage, the Ministry of Finance, its
executive agencies and other state authorities undertake measures on the implementation of
the state budget. During this stage, the government still has the option, when it deems
necessary, to make changes to the state budget by addressing parliament again. In stage four,
the parliament controls the implementation of the annual budget law, as during its execution,
as well as after its closure. The control is exercised mainly through reports that the
government is obliged to submit to parliament as required by him. The fifth and last step, is
the verification of accounts by an independent external control, a task that in Albania is
exercised by the Albanian Supreme Audit Institution. The actors that participate in the budget
process are the Government, the Ministry of Finance and Parliament.
The budget process is the main mission of the Ministry of Finance. Organic Budget Law
defines the duties and powers of all relevant authorities, including the procedures and
deadlines that are applied to this process. The total income of the State Consolidated Fund
include all the income from various sources of tax, non-tax revenues and grants provided by
the governments of foreign countries or donors. Tax revenues come from taxes and customs,
local government and special funds. Non-tax revenues are revenues coming from economic
activity of public enterprises and public property, administrative services and secondary
income. Tax revenues are the invoice with the greatest weight in revenues and as such has a
particular interest. Revenues from taxes and customs revenues are collected from all types of
taxes applied by the Central Government. These include 6 main categories: Value Added
Tax, Income Tax, Excise, Personal Income Tax, tolls and other National Taxes. Each of the
above categories is regulated by a special law. To find various errors made in forecasting I
have operated with the main items of budget revenues, which have the major part, over a
period of 10 years from 2004 to 2013. The income tax are the main item, and the forecast
errors in them can bring even greater mistakes. Also these types of incomes (profit and
personal) are those which exhibit greater volatility due to various reasons, so the projections
of interest, can be even bigger. General principles of budget process:
- ANNUAL principle: the budget is a law with limited powers applied for the year. As such it
can not be passed in the next year;
- PRINCIPLE OF UNITY: the totality of state revenues and expenditures should appear in a
349
single account;
- The UNIVERSALITY principle, determines the collection in a single parameter of the total
public revenues based on which the total public spending should be calculated;
- The principle of SPECIALIZATION, refers to the classification of budget according to
administrative, economic, functional or by missions and programs;
- The principle of OPENNESS and TRANSPARENCY, aims to ensure the accuracy of the
information used in the budgeting process.
The notion of equilibrium is more a budget notion than an economic notion. In fact this is
rarely respected because the principle of budgetary balance is currently making a major
challenge in the Eurozone countries. The budgeting principles refer to traditional technical
rules necessary for a good management of public finances. In this aspect, they are intended to
facilitate parliamentary control over the expenditure and income of public institutions. So,
they are simultaneously technical and political.
6. Analysis of errors that occur in the forecast of revenue

If we take a look at the last 10 years to the budget of our country, we can observe that the
total differences of incomes between the actual and original plan shows that they then tend to
be overestimated. The exception is only in 2004, when revenues are underestimated, the
difference in the percentage of underestimation is 1, 8% translated into an error in the
forecast and means that the income provided in the plan have been lower than the actual.
From 2005 to 2013, incomes are overestimated. This situation is negative because it is
accompanied by a reduction of budget expenditures during the year and negative effects on
the preservation and maintenance of an effective fiscal discipline. Differences between actual
and projected revenues have different percentages, in 2006 the prediction error is smaller than
the other observed years with a value of 0.6 percent, while 2009 and 2012 are the years with
the highest percentage of errors from 10.7 percent respectively and 10, 9 percent. In the other
years the interval of error fluctuates between these estimates (0.6%- 10.9%). The reasons
that our country has these fluctuations may vary. These errors can be intentional or may also
be random. The highest error in 2009 is related to the global financial crisis that obviously
affected also our country. In this year the conditions of an economic and financial instability
brought macroeconomic problems.
Immediately, and therefore have been considerable errors in the following year. The
overestimation of the incomes in our country caused a deficit. So we can say that errors occur
not only due to unexpected or economical conditions but also from political pressure.
Especially during the elections not only in our country but also in the world, the government
tends to countermand the budget.
This research analysis the hypothesis that during the local elections, the governors: (i) reduce
the expenses for the future, because the government opposition may lead for the future years
and (ii) increase the cash transfers for electoral areas (through tax cuts or increased benefits)
in order to increase the number of the votes (Boylan 2006). As mentioned above, the total
revenue had the tendency to be overestimated, the same thing happens also with particular
350
revenue components that are taken in the study. The revenues from grants, taxes and customs,
VAT, CIT and PIT, during most of the years have the trend of overestimation. VAT in most
cases is overestimated and this is explained by the fact that it is difficult and costly to
administer and collect it and this has led to lower actual results.
Regarding the errors made during the forecast of TAP over the years, it may have been
influenced from the time frame of the forecast since the personal incomes are calculated in
April and the initial plan corresponds to the end of the previous year, so the information
about this tax mostly isn’t accurate until the period of April or May. Even the age of the
population has a significant impact on the calculation of the revenue. Considering the fact
that our country has a young population, we can say that the major part of the revenues comes
from employment rather than from pensions. While investment revenues are highly volatile,
the revenues from pensions are very stable, that caused that the mistakes of forecasting to be
greater. The mixing of these revenues from different sources made forecasting even more
disadvantaged.
As a result of the comparison of the actual revenues with those of the original plan over the
years, we can say that there were differences that were big in 2009 and two years. To reduce
the errors in forecasting, the Ministry of Finance should take measures on the implementation
of the processes based on realistic and capacity planning. As regards, the failure on realizing
the tax revenue according to the structure, brings to the conclusion that organizational and
technical measures taken by the tax administration in the management of VAT should be
more effective and efficient. Regarding the tendency of errors, we can say that from the two
major types of errors: overestimation and underestimation of revenues, the first one is the one
that causes mostly political problems. In these situations, lawmakers are required to balance
their budgets, states must compensate their overstatement by raising taxes, reducing their
expenses on certain programs or using reserve costs. All of these can be prevented if they
accurately pay more attention to forecasting. When an overestimation happens, lawmakers do
not have much time to respond with a decision. Generally in these situations, more time is
needed to reach a political agreement, notably when it is necessary to raise taxes or to find
new sources of revenues. Ideally, budgeting means taking enough time in order to analyze the
advantages and disadvantages of cutting a government program, or to make a quick cut
across the board in government.
TABLE 1: THE ERRORS IN FORECASTING IN ABSOLUTE VALUES FOR THE TIME HORIZON 2004-
2013
Invoices 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Revenues from helps -4230 -4808.21 2025.356 -2647.9 -1608 -1883.1 -3171.04 -6663 -6228.27 -6257.34
Taxation
Customs
VAT Revenues -4650
-2492
1013 1574.6
383.7
1190.8 -2934
-3898.1
-1731.86 -6550,3
-3167.1
15.07 -9172.3
1885.6
5722.5 -35158.3
-21298.6
-7429.11 -40164.8
-23017
-12891 -23028.9
-16218.4
-10153.4 -37079.6
-68126.1
-37171,7 -28200.1
-26138.1
-16266.4
Personal Income Tax -1310 -218.944 -420.184 349.73 5121.83 755.2063 -11721 -1362 -4183.35 242
Income tax 1108 3223.55 53268.14 -1122.85 2427.18 -3663.58 -1769 -2.72 -4999.63 -2628
The total revenue 3271 -19939.1 -1545.2 -11032.7 -8553 -35843.1 -36233.6 -24952 -38720 -33482.3
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TABLE 2: THE ERRORS IN FORECASTING IN PERCENTAGE FOR THE TIME HORIZON 2004-2013
Invoices 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Revenues from helps -0,64 -0,69483 0.337559 -0.67411 -0.2755 -0.29829 -0.4078 -0.63615 -0.68676 -0.52168
Taxation Revenues -0.03 0.00864 -0.01407 -0.02791 -0.0335 -0.1149 -0.12218 -0.07043 -0.11439 -0.08595
Customs -0.02 0.002838 -0.02452 -0.0176 0.00927 -0.09253 -0.09355 -0.06443 -0.27143 -0.10243
VAT 0.073 0.201308 2,536578 -0.05058 0.15479 -0.17602 -0.0913 -0.00014 -0.23385 -1.14808
Personal Income Tax -0.16 -0.02873 -0.04669 0.024119 0.26434 0.028974 -0.34614 -0.04644 -0.14065 0.008252
Income tax 0.018 0.018799 -0.02279 - 0.05645 -0.06323 -0.10159 -0.0785 -0.29091 -0.12688
0.000172
The total revenue 0.018 -0.09655 -0.00669 -0.04202 -0.02585 -0.10705 -0.10038 -0.0702 -0.10947 -0.09284
The source: The Ministry of Finance of Albania
7. Conclusion and recommendations

After reviewing the literature from outstanding authors in Europe and worldwide, we can say
that the predictability of the national income is more an art rather than a science, so it may
not be exact. Forecasts generally have many inaccuracies and unfortunately only a few efforts
can be made, but to predict how taxes will "behave" in an economy that is constantly
changing, it is nearly impossible. So, the errors in predicting will be made anyway, but the
question remains: how many mistakes are tolerable and what consequences they will bring?
In order that these errors can be tolerated and its consequences be recoverable, the forecasting
process should be transparent. This means that the methods used to forecast, should be
transparent for lawmakers, for different market players, as well as for the public.
Transparency is needed in order to make the difference between the impact of fiscal policy
measures and those mathematical and statistical. Also, it is necessary to identify those
mistakes that are intentional from those unintentional. For a transparent forecasting, political
actors should participate, such as the Ministry of Finance, and also international institutions,
as an observer. This will certainly lead to a more precise process and an added expertise in
forecast. Forecasting brings advantages such as political commitment and enough support to
make more difficult decisions that include: restructuring costs, commitment to act in
accordance with the decisions of the budget, an improvement in the forecasting of the
revenues and of their collection etc. In the case of Albania, in addition to the literature review
is an analysis of the data obtained from the state institutions such as the Ministry of Finance,
where the estimated error in the prediction of the total budget revenues and the main items of
incomes, which have greater weight and also greater volatility are difficult to predict. In the
10-year-old horizon, the study shows that our country tended to overrule its income in most
of the years (the exception is only in 2004), and this explains to some extent the fact that
Albania is in deficit. Albania as the other EU countries has the tendency to overestimate their
revenues, although this kind of mistake is the one that brings more problems and doesn’t
leave enough time to their rulers to take measures to reduce the consequences of it. This
overestimation may occur from unexpected macroeconomic conditions, from the financial
crisis, for example in 2009 when Albania marked the biggest mistake in forecasting as a
result of the global financial crisis. Even though it can be done deliberately by the governors,
especially in election periods, during which as reduced taxes and increased benefits for
voters, or halt spending on future projects. To reduce the errors in the forecast, the Ministry
of Finance should take measures for the implementation of the processes on the basis of
realistic planning, and strong planning capacities. Regarding the failure to realize VAT
352
according to the structure, we can say that organizational and technical measures taken by the
tax administration in the management of VAT should be more effective and efficient.
Finally, the main conclusion of this paper is that the process of forecasting of revenues needs
to improve in order that the errors not have significant consequences, and it should be based
more on expertise and less on political considerations. Forecasts should be made more
transparent and understandable.
Dependent Variable: DIF

Date: 06/11/14 Time: 22:22
Sample: 2004Q1 2013Q3
Variable Coefficie
nt Std. Error t-Statistic Prob.
C 1.15E-07 2.53E-07 0.454192 0.6533

HELPS 1.000000 1.23E-10 8.16E+09 0.0000
TAXATION 1.000000 4.11E-10 2.44E+09 0.0000
VAT 2.37E-10 4.02E-10 0.590943 0.5595
INCOME TAX 1.38E-10 4.33E-10 0.318837 0.7523
EKCIZE 4.75E-10 4.52E-10 1.051981 0.3021
PERSONAL INCOME TAX -1.04E-10 4.72E-10 -0.219254 0.8281
NATIONAL 2.27E-10 3.94E-10 0.575500 0.5697
CUSTOMS 8.55E-11 6.02E-10 0.141896 0.8882
LOCAL 3.66E-10 4.49E-10 0.816473 0.4214
SPECIAL -4.41E-11 4.09E-10 -0.107775 0.9150
NON TAXABLE 1.000000 6.68E-11 1.50E+10 0.0000

S.E. of regression 7.68E-07 Akaike info criterion -25.07245
Sum squared resid 1.59E-11 Schwarz criterion -24.56058
Log likelihood 500.9127 Hannan-Quinn criter. -24.88879
F-statistic 1.82E+20 Durbin-Watson stat 1.946401

Date: 06/12/14 Time: 17:47
Sample: 2004Q1 2013Q3
HELP
C 1.000000
1.50E-07 1.81E-07
1.05E-10 9.52E+09
0.832372 0.4116
0.0000
TAXATION 1.000000 6.87E-11 1.46E+10 0.0000

VAT 2.56E-10 1.16E-10 2.197701 0.0356
EKCISE 5.03E-10 1.32E-10 3.799242 0.0006
NATIONAL 2.39E-10 1.59E-10 2.497211 0.0445
LOCAL 3.92E-10 1.92E-10 2.039165 0.0500
NONTAXABLE 1.000000 6.22E-11 1.61E+10 0.0000
353
Log likelihood
F-statistic 3.14E+20
500.0445 Hannan-Quinn criter.
Durbin-Watson stat -25.11062
1.803282

Date: 06/12/14 Time: 10:45
Sample: 2004Q1 2013Q3
NDIHMA 1.000000 1.01E-10 9.88E+09 0.0000

TATIMORE 1.000000 6.78E-11 1.48E+10 0.0000
TVSH 2.36E-10 1.13E-10 2.081880 0.0454
AKCIZ 4.78E-10 1.28E-10 3.725057 0.0008
NACIONAL 2.01E-10 1.52E-10 2.322046 0.0455
VENDORE 3.36E-10 1.79E-10 2.874788 0.0300
JOTATIMORE 1.000000 6.13E-11 1.63E+10 0.0000

Log likelihood 499.6135 Hannan-Quinn criter. -25.15510
Durbin-Watson stat 1.775455
NOTE: standard deviations of the error terms are constant and do not depend on the x-value
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Biography of authors
1. Abdulmenaf Sejdini finished his doctorate at the University of Tirana, Economics in
2014, Tirane-Albania, Master of Science at the International Islamic University
Malaysia, profile: Economics and Finance, K.Lumpur, Malaysia in 2001.Bachelor at
the University of Istanbul, Economics, Istanbul, Turkey in 1996
2. Armanda Tola (Keqi) has finished her studies at the University of Tirana, Faculty of
Economy. She achieved her degree of Master of Science in the field of Finance and
has a three-year experience in the field of academic research working as a research
assistant at Epoka University in Tirana, Albania.
More info about us at the link: http://baf.epoka.edu.al/home-academic-staff-235-267.html
356
EFFECT OF PATERNALIST LEADERSHIP AND HELPFUL LEADERSHIP
BEHAVIOR ON EMPLOYEE COMMITMENT: AKUT SAMPLE1
Soner TASLAK 2 Pelin ARSEZEN-OTAMIS 3 Cemal
ARTUN4
Abstract
The purpose of this research is contributing to multiplying leadership practices that increase
employee commitment by determining which paternalist leadership dimensions are more
effective in employee commitment. Consequently, it was found that paternalism and helpful
leadership had positive effect while autocratic leadership had negative effect on
organizational commitment.
Keywords: paternalism, AKUT (Search & Rescue Association), leadership
Conference Topic: 2. Economy, Management and Marketing, the 6th Multidisciplinary
Academic Conference in Prague 2016.
Introduction
Accomplishing organizational achievement in fierce competition conditions is closely related
with the commitment and loyalty of employees to their organizations. It is a known fact that
employee commitment is affected by leadership types and behaviors (Meyer, 1990). This
study is important due to the fact that it tries to determine factors affecting employee
commitment which is perceived as indispensable for organizational performance and
capability of competition. It is also unique; since there are not many studies on helpful
leadership and its effects in the literature. Theoretical framework takes place in the first part
of the study. The second part includes research and analysis. And finally, results of the study
are presented in the last part.
1. Theoretical Framework
1.1. Paternalist Leadership
Paternalist Leadership is defined as managers’ dealing with off-the-job lives of their
subordinates and their personal problems, showing effort for increasing welfares of
employees and supporting in employees’ reaching their personal goals (Fikret Paşa,
Kabasakal and Bodur 2001, p.561). Aycan (2006, p.449) who is the pioneer of increasing
studies regarding the topic expresses paternalism as showing course of action resembling the
attitude of a father towards his children. In a paternalist relationship, people in charge
undertake parent role and take it as duty to protect and deal with their subordinates. In return,
it is expected from subordinates to show respect, commitment and harmony (Pellegrini and
Scandura, 2006, p.275). Paternalism has been a topic on which views have been expressed
since management started to show up as a field. While behavioral management philosophers
assert that leaders’ dealing with their employees will increase efficiency (Follet, 1933;
Munsterberg, 1913), Weber (1947) argues that paternalist practices will become unnecessary
when organizations reach ideal bureaucratic structure which complying with the rules and
1 Special thanks to Nasuh MAHRUKI, who is the co-founder and the president of AKUT Search and Rescue
Association, and all team. They were very helpful, polite and cooperative to us.
2 Mugla Sitki Kocman University, Fethiye Faculty of Management, Department of Tourism Management,
pelinarsezen@mu.edu.tr, MUGLA, TURKEY

3 Mugla Sitki Kocman University, Faculty of Economics and Administration, Department of Business
sonertaslak@gmail.com, MUGLA, TURKEY

4 Mugla Sitki Kocman University, Fethiye Faculty of Management, Department of Tourism Management,
cemalartun@mu.edu.tr, MUGLA, TURKEY
357
protecting personal rights (cited by Pellegrini and Scandura, 2008). Paternalism practices
which have started in Asian countries and continue in Middle Eastern countries object to
Weber’s approach and show that paternalism not only includes authoritativeness, but also
paternalist managers provide support, protection and interest for their subordinates and in
return, subordinates respond with loyalty and commitment (Redding et. al., 1994; Westwood
and Chan, 1992; Aycan et. al., 2000; cited by Pellegrini and Scandura, 2006; Pellegrini and
Scandura, 2008). This situation leaded to the emergence of arguments about the relationship
of paternalism with cultural context. There are some views that paternalism will be perceived
more positively in cultures which are more collectivist (communitarian) and possess higher
power distance (Pellegrini & Scandura, 2006; Aycan, 2006). Along with this, although
paternalism is described negatively in Western literature, it has started to be seen as an
alternative for solving some social and organizational problems in current practices (Aycan,
2006). Among the studies to conceptualize paternalism, in the first one Kim (1994) addresses
two types which are authoritarian and benefactor paternalism. Authoritarian paternalism
focuses on duty and does not include a real generosity. On the other hand, benefactor
paternalism emphasizes the loyalty of subordinate and superior’s really concerning about
his/her subordinate (cited by Fikret Paşa, Kabasakal & Bodur, 2001). Farh and Cheng (2000)
suggest a three-dimensional model for paternalist leadership; authoritativeness, benevolence
and virtuousness (cited by Pellegrini & Scandura, 2008). However, Aycan (2006) suggests a
model comprising of four different types which are benefactor paternalism, exploitative
paternalism, authoritarian approach and authoritative approach by depending on motivation
and behavior dimensions.
1.2. Organizational Commitment of the Employee
According to Meyer and Allen (1991, p.67), organizational commitment is a physiological
situation which leads decision of the employee to continue or not to continue to the
membership of the organization and it describes the relationship of the employee with the
organization. Organizational commitment is composed of three components which are
affective, normative and continuance commitment. Affective commitment to the organization
is caused by employee’s feelings and willingness; normative commitment is caused by
obligation of the employee to stay in the organization; and continuance commitment is
caused by employee’s finding it costly to leave the organization (Allen and Meyer, 1990).
Accomplishing organizational achievement in fierce competition conditions is closely related
with the commitment and loyalty of employees to their organizations (Zeffane, 1994, p.978).
Employees whose organizational commitment levels are high make significant contribution
to increase performance of the enterprise under competitive circumstances (Feldman and
Moore, 1982, p.2). High level of organizational commitment which contributes to
performance is depended on both features of employees and managers. Leadership practices
are also important as well as factors such as shortage of audit field, reliability and sincerity
(Uygur, 2007).
2. Method of the Research
2.1. Universe of the Research
Universe of the research is composed of leaders and employees of volunteer organizations
which carry out search and rescue activities and which are in the status of public benefit
association in the Mediterranean and South Aegean Region of Turkey. The organization
which is suitable for defining and limiting the universe is AKUT (Search and Rescue
Association). AKUT has 36 operational units, a leader for each unit, volunteers composing of
25 individuals on average for each unit and permanent team workers.
358
AKUT: After searching 2 university students who got lost at Bolkar Mountains in 1994 for
14 days and taking no any results, a group of mountaineer who knew mountains very well but
had limited knowledge about search and rescue came together in 1995 and founded AKUT.
This group performed their first rescue activity at Uludağ under the name of AKUT within
the same year. The association completed its official establishment under the name of
“AKUT Search and Rescue Association” on 14 March 1996 (www.akut.org.tr). It was stated
that the association was accepted to the membership of INSARAG (International Search and
Rescue Advisory Group) in 2011 which has been under the umbrella of United Nations since
1999 and became one of the most experienced and knowledgeable teams in terms of
earthquake among the rescue teams conforming to international standards in all over the
world. It was stated that according to INSARAG standards, within the classification of
“Heavy Search and Rescue Team” and “Medium Search and rescue Team”, AKUT was the
first search and rescue team to receive this certificate from “Classified Medium Level Team”
group. AKUT also carries out awareness and training activities on issues such as “Basic
Awareness on Disasters” and “Earthquake Awareness” (www.akut.org.tr).
2.2. Sample of the Research
Because of the limitations to reach the entire universe in the research, convenience sampling
was determined as sample type. It was contacted with AKUT leaders and association
members who had acquaintance with the researchers and who were from the environment of
the researchers. This environment was limited with Fethiye, Antalya, Kusadasi and Bodrum;
that is, it is not national but regional. Due to the fact that universe is regional and number of
organization (association) and sub-group is zero, it is specified in the literature that sample
size should be between 50 and 200 (Anafarta (Kuruüzüm), 2006). As the sample of this study
is composed of 65 individuals, it fulfils the requirement.
2.3. Data Collection
It was benefitted from questionnaire in the research as a tool of data collection. It was sent
questionnaires to some units via e-mail and some units online. Questionnaire management
was preferred because of the reasons such as being able to reach data through systematical
observation, providing the opportunity to collect lots of data at once, being economical in
terms of costs and being able to express the acquired data numerically (Yazıcıoğlu and
Erdoğan, 2004, p.51-52). Questionnaire form was prepared with 5-point Likert scale (1 =
totally disagree, 5 = totally agree).
In this research, it was benefitted from paternalist leadership scales prepared by Mathur,
Aycan, and Kanungo (1996), Aycan, Kanungo, Mendonca, Yu, Deller, Stahl, and Kurshid
(2000), Cheng, Chou, and Farh (2000), Pellegrini & Scandura (2006), Aycan (2006). Scales
were acquired from Pellegrini ve Scandura (2008)’s study. Content validity; that is, whether
the questions in measuring tool represent the field which is demanded to be measured has
been tested and found valid in their previous studies of the researchers. Due to the fact that
measuring scale was used whose validity reliability, in other words structural validity studies
were completed beforehand in terms of theoretical validity; comparison was made with the
“known group” instead of factor analysis. At the end of the measuring, an expected
correlation which was consistent with the performance acquired by researchers who used the
same scale was found (Kuruüzüm (Anafarta), 2006); therefore the study possessed validity
conditions.
Research started in February 2014 and was completed in September 2015.
2.4. Data Analysis
359
SPSS packet program was used in the analysis of data. Multivariate regression analysis was
used in order to measure the strength and character of the relationship between employee
commitment, helpful leadership and their independent variables. Sample size has a direct
effect on statistical strength of multivariate regression. This analysis was used due to the fact
that more than one variable was suitable for the analysis (Hair, Anderson, Tatham and Black,
1998, p.165) in small samples which had more than 20 (n=68) samples. The general rule is to
find at least 10 observations for each independent variable. If this condition is not realized, it
will be encountered with “overfitting” problem and specific and no generalizable results can
be acquired (Hair et. al., 1998, s.166).
By following these rules, the relationships between helpful leadership independent variables
and employee commitment dependent variable were observed and the following hypotheses
were formed:
H1: There is a significant relationship between helpful leadership behavior and organizational
commitment of the employee.
H2: There is a significant relationship between autocratic leadership behavior and
organizational commitment of the employee.
H3: H2: There is a significant relationship between paternalism and organizational
commitment of the employee.
In Multilinear Regression analysis, employee commitment was determined as dependent
variable while helpful leadership, autocratic leadership and paternalism were determined as
independent variables.
3. Findings
As it is seen in Table 1, average of 61 questions is 3,87 while their variance is 0,410. On the
other hand, Cronbach Alpha reliability coefficient for the entire scale was found as 0,96.
Distribution of 67 individuals attending the research according to various variables is shown
in Table 2.
Table 1. Summary Item Statistics
Mean Min. Max. Range Max / Min Variance N of Items
Item Means 3,872 1,800 4,708 2,908 2,615 ,410 61
Table 2. Demographic Variables (n=67)

Gender Female Male
21 46
Married Status Married Single
27 40
Age 21-30 31-40 41-50 51-60 60 more
25 19 15 5 3
Education Highschool Graduate Post-graduate
15 41 11
360
Normal scatter charts are presented in the following Figure 1.
Figure 1 Normal Scatter Histogram and Charts

Figure 1 demonstrates the consistency of model to normal scatter conditions.
The following Table 3 presents correlation results among dimensions.
Table 3. Paternalist Leadership Dimensions and Commitment Correlation
N=67 helpful leadership leadership
autocratic paternalism organizational
commitment
Corre.
Pearson Sig Corre.
Pearson Sig Corre.
Pearson Sig Corre.
Pearson Sig
ltis sehrip inseDiom
helpful leadership 1 - 0,527 ,000 0,826 ,000 0,583 ,000
na autocratic
leadership 0,527 ,000 1 - 0,673 ,000 0,344 ,002
rtePa
d
ae
L paternalism 0,826 ,000 0,673 1 - 0,622 ,000
organizational commitment 0,583 ,000 0,344 ,002 0,622 ,000 1 -
p<0,005
According to Table 3, there is a significant relationship among helpful leadership, autocratic

leadership, paternalism dimensions and between organizational commitment and these
dimensions (p<0,005). The highest relationship is between paternalism-helpful leadership
(0,826) and paternalism-organizational commitment (0,622).
Regression analysis results are given in Table 4.
Table 4. Paternalist Liderlik Boyutlarının Örgütsel Bağlılık Üzerine Etkisi
Variables B St.dev. β t Sig. Tolerance VIF
constant 2,468 ,329 7,503 2,661 ,000
leadership
helpful ,165 ,140 ,207 1,181 ,242 ,316 3,166
leadership
autocratic -,202 ,216 -,124 -,933 ,355 ,545 1,836
paternalism ,422 ,159 ,535 2,661 ,010 ,239 4,179

R=0,641, R2=0,210
According to Table 4, three dimensions explain 21% of total variance. In P<,01 level,
paternalism has a significant effect on organizational commitment.
Regression Equality: Organizational Commitment= 2,468+0,165Helpful Leadership -0,202
Autocratic Leadership+0,422Paternalism
4. Conclusion
According to correlation analysis, there is a significant relationship among paternalism,
helpful leadership and autocratic leadership dimensions and between organizational
commitment and these dimensions (p<0,005). Paternalism and helpful leadership affect
organizational commitment positively while autocratic leadership affects organizational
commitment negatively. Autocratic leadership practices should be decreased, helpful and
paternalist leadership practices should be increased in order to increase organizational
361
commitment. According to regression model, paternalism is the practice that increases
organizational commitment at the most. However, there is also a significant and almost
strong relationship between helpful leadership and paternalism. Therefore, in western
societies where paternalist culture is not common, increase in helpful leadership practices
may enable the employee to be more committed to the organization. It is the desired situation
for profit-oriented organizations to possess committed employees as in the example of the
members of an organization (or association) such as AKUT which works for the benefit of
society and does not have any economic expectations.
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363
The Socio-economic Determinants of Public Participation in Lake Policy
Process:
The Case of Rawa Pening Lake Program in Indonesia
Cita Ekanijati
Master Student Graduate School of Global Environmental Studies

Global Environmental Policy Laboratory
Kyoto Univerity, Japan
Yoshida-Honmachi, Sakyo-ku, Kyoto, 606-8501, Japan
Email: citaeka28@gmail.com
Conference topic : management
Key Words: Common Pool Resources, lake, decentralization, participation
Abstract
Lake basin management policy under decentralization government regime has been
proposed to solve severe lake deterioration problems in Indonesia. The policy named
GERMADAN “The Indonesian movement for lakes ecosystem conservation and
rehabilitation” was first applied in Rawa Pening Lake, in which public participation
came to be emphasized as an essential element of policy processes. This research
aimed to examine the major factors influencing public participation in the lake basin
management programs. In-depth interview and questionnaire survey were conducted
to collect socio-economic information in the selected nine villages nearby Rawa
Pening lakeshore. The statistical analysis found that the likelihood participation is
greater as to those who expect to gain economic and social benefits by participating in
projects and those who have better access to information and projects. This study
supports for promoting sustainable lake basin management programs and suggesting
the involvement of informal institution arrangement in the policy process. This policy
implication might help increasing the likelihood of participation in lake management
program through promoting awareness, increasing coordination, assessing incentive,
and creating a mechanism that positively support social and economic aspect.
1. Introduction
Common pool resources (CPR) is defined as natural or human-made resource or

facility that provides for and is appropriated by a large number of people and having two
specific characteristics namely excludability and sub tractability (Ostrom, 1990). The CPR’s
characteristics potentially caused dilemma due to over-exploitation in which led to
degradation and depletion (Williams, 1998). Successful governance arrangements of CPR
was needed for solving the tragedy of common. Based on research history on CPR, there
were three approaches of policy proposal offered: a governmental organization, privatization,
and self-governance by local users (Cavalcanti, Schlapfer, and Schmid, 2009). However,
governmental and privatization approach has failed in numerous cases (Cavalcanti, Schlapfer,
& Schmid, 2009). Based on numerous experimental evidence, self-governance by local users
364
was considered as an effective policy proposal and can successfully solve CPR problems
(Cavalcanti, Schlapfer, and Schmid, 2009; Ostrom, 1990)
On the other hand, many developing countries applied governmental regime to manage
CPR. In this case, CPR acknowledged as state property and the resource management is
primarily driven by the state. Sanctions and fines are imposed to prevent subtraction and
exclusion problem; however, the widespread of natural resources are not easy to monitor and
prohibitively expensive to intervene (Cavalcanti, Schlapfer, and Schmid, 2009). Open access
regime might happen due to insufficient management by the government. This situation
creates the destruction of natural resources, that is, the tragedy of commons that was reflected
by Hardin’s theory. As an example, long history of lake management in Indonesia depicted
the dilemma of the governmental regime. More than a decade decentralization1 governing
lake resources in Indonesia was expected able to contribute solution of lakes problems.
Decentralization gives the opportunity to stakeholders at the lower level to participate in
development. Moreover, some countries which applied decentralization in their natural
resources management, democratic participation was emphasized in policy making process
(Agrawal & Gupta, 2005). This theory was consistent with Indonesian lake management
policy that underlined the importance of community empowerment and involvement as one
of lake management approach.
The serious governance commitment was proven through the First National Conference
of Indonesian Lake themed “The Lake Management and Weather Changes Anticipation” in
Denpasar, Bali Province, August 13th of 2009. This commitment also agreed to prioritize 15
lakes to be conserved in the phase 1 start from 2010 to 2014 (Ministry of Environment,
2011). These 15 lakes were chosen based on six indicators: damage level, lake appropriation,
institution commitment, strategic lake, biodiversity existence and disaster risk level. The lake
management policy named GERMADAN “the Indonesian movement for lakes ecosystem
conservation and rehabilitation” was implemented since 2010 and chosen Rawa Pening Lake
as targetted pilot project (Soeprobowati, 2015). On the period of decentralization,
GERMADAN programs in Rawa Pening Lake were expected capable of solving lake’s
problems, particularly on water hyacinth blooming due to severe eutrophication. Some
government programs have been conducted through empowered local people such as water
hyacinth eradication (using manual, heavy equipment and stockpile methods), water hyacinth
utilization (making handcraft, drier technology, biogas, and organic fertilizer) and communal
sanitation program (Ministry of Environment, 2012). Moreover, local government also
implemented many regular programs based on their sectors. The successful of these programs
highly depend on government support and local people participation.
This study will examine major factors influencing public participation in lake
management program. Specifically, it shall address the following research question: in lake
management programs, what are the background of public participation in preserving the lake
as common-pool resources (CPR)?. To address the research question, the study will examine
three major hypotheses about participation that focuses on socio - economics issues. The
researcher has hypothesized that the likelihood for participation is greater for appropriators
who acquire high levels of economic benefits from resources appropriation, who belong to
specific stakeholder organizations, and who receive sufficient program information. As for
the experiment, the Rawa Pening Lake was chosen as the study site. Furthermore, the
evidence from analysis of socio-economic and demographic determinants can be taken into
consideration when designing lake policy to promote public participation for sustainable lake
management in the future.
1 Based on Constitution Republic of Indonesia of 2004 No. 32 about local autonomy

Constitution of the Republic Indonesia of 2009 No. 32 about the environment protection and management
365
2. Data and Methods
This research was conducted in Rawa Pening Lake in Central Java, Indonesia. To
conduct this research, nine villages located nearest to the lake area were chosen – Bejalen,
Banyubiru, Kebondowo, Rowoboni, Kebumen, Kesongo, Lopait, Tuntang, and Asinan. The
empirical data set used in this research were taken from primary and secondary data. The
primary data were collected through field survey, in-depth interview and questionnaire,
particularly to investigate local people both in socio-economics information and knowledge
about the programs. Furthermore, secondary data were collected through official government
documents, books, journals and papers. The research had interviewed and inquired 220
individuals to complete the questionnaire. A quantitative descriptive approach was used to
measure the significance level of socio-economic factors of public participation. Using basic
calculation of econometric, the research analyzed cross section data within a logit regression
model and statistical analysis that were completed by using STATA SE 12 software. The
dichotomous outcome will be represented through the binary choice model. The empirical
model was given as follows:
Participation=αi+βij ∑Economic
j=1
3 +γik ∑Social
k=1
5 +δil ∑CPR
l=1
1 benefit+θim ∑Access+
3 ε;
m=1
Description:
Participation : Participation in the program
(binary outcome, 1 for those people participate, 0 for otherwise)
α, β, ��,��,θ : Parameters
α : Constant parameter
�� : Error term
i : Respondent
Economic : Vector of economic variables; income, land ownership, area of owned land
Social : Vector of social variables; community membership, age, education,
occupation, and size of household
CPR benefit : Vector of type and amount of resources utilized, such as water, fish, water
hyacinth
Access : Vector of access information variables; how information distributed,
information about incentives and information about policy effectiveness
The analysis of the previous study related to socio-economic determinants and public
participation was conducted before defining the empirical model. This methodology mainly
referred to previous research conducted by Agrawal & Gupta (2005) that examined public
participation in governance CPR in Nepal. On the other hand, various studies about public
participation, people attitude and cooperative behavior towards resources management had
been conducted, including lake, forest, woodland, and pasture. The result found that socio
economics factors strongly influenced people’s contribution towards resources appropriation
and management. In summary, these studies have found that some of individual’s social
status – caste, education, household size, organization membership, age, and gender – are
associated with people contribution on CPR management (Agrawal & Gupta, 2005; Adhikari,
Falco, and Lovett, 2003; Al-Subaiee, 2015; Tomicevic, Shannon, and Milovanovic, 2009;
Pendall and Schmidt, 2011; Hayo and Vollan, 2011). The research suggested that some of
individual’s economics factors – income, property ownership, and occupation – affect to the
participation and contribution on CPR management (Agrawal & Gupta, 2005; Adhikari,
Falco, & Lovett, 2003; Bell, Robert, English, & Park, 1993; Al-Subaiee, 2015; Pendall &
Schmidt, 2011; Tomicevic, Shannon, & Milovanovic, 2009; Hayo & Vollan, 2011). The CPR
366
benefits factors, which are the amount of CPR harvested, also highly influence the people
attitude and the likelihood of participation in resources management (Agrawal & Gupta,
2005; Adhikari, Falco, & Lovett, 2003; Adhikari, Kingi, & Ganesh, 2014; Al-Subaiee, 2015).
Instead of socio-economics factors, the previous research suggested that access information is
also strongly associated to the likelihood people participated (Agrawal & Gupta, 2005; Bell,
Robert, English, & Park, 1993).
3. Result and Discussion
A logit regression result presented several determinants associated to the likelihood of

participation in lake management program. Several variables were included to control
personal characteristics such as age, and education (Pendal and Schmidt, 2011). The result
illustrated significant variables at the p = 0.01 (1%), p = 0.05 (5%) and p = 0.1 (10%) level.
In addition, the result also informed the estimates for the model. About 220 individuals were
examined using 18 variables. The model was highly statistically significant (p <0.01) and had
a Chi-squared statistic of 137.40. Statistical interpretation described the magnitude, direction,
and significance. Odds ratio (OR) was reported within 95% confidence interval on this
statistical outcome.
From the total of 220 respondents, 83% knew about the government programs, where
54% of them had participated in these programs. The data identified that the respondents
were dominantly male at 72% and only 28% were women. The result reported two of the
three economic variables – land ownership and area of owned land – were highly statistically
significant. The result found that land ownership was highly statistically significant and had a
positive effect to participation. Households or individuals who had land ownership were
likely to participate in lake management programs (coefficient = 4.063, significant at the
level 1%). Landowners were 58 times more likely to participate in government programs than
the ones who owned no land. A positively significant result of land ownership variable was
consistent with previous findings (Agrawal & Gupta, 2005; Adhikari, Kingi, & Ganesh, 2014;
Bell, Robert, English, & Park, 1993; Hayo & Vollan, 2011). In addition, having a property
right has impacted on the feeling of ownership to the owner (Adhikari, Kingi, & Ganesh,
2014). On the other hand, the area of owned land variable was also highly significant and
statistically associated to participation. Nonetheless, this variable had a negative relationship
to the likelihood of participation (coefficient = -0.036, significant at the level 1%). Negative
relationship indicated that households or individuals owning more land had 0.97 times lower
likelihood to participate in the program. This result was inconsistent with a previous finding
(Bell, Robert, English, & Park, 1993) that reported non-significant area of ownership variable
towards participation. This research found that 95% of the people possess land ownership
and the average area of owned the land is 53-meter square within more than 15 years. The
land-use of research site (nine villages) consisted of 21% agriculture area, 22% plantation,
38% lake riparian area, 17% settlement and 2% rivers and roads (Central Statistic
Department, 2014). Most of the people own the private land whether for cultivation of
agriculture, plantation, settlement or fishpond area. Those people who have greater land tend
to spend more time and effort to cultivate their own land, so they less likely to participate in
lake management programs. This situation might explain the negative correlation between the
area of owned land variable towards participation.
Three of six social variables – organization membership, occupation, and family size
– were statistically significant. This result showed statistically significance of organization
membership variable (coefficient = 0.980, significant at 5% level). This suggested that people
who had organization membership were likely to participate. Therefore, those people who
belong to the aparticular organizations were 2.8 times more likely to participate in
367
government programs than those who do not. This result supported previous finding that
organization membership supported people awareness in CPR conservation (Pendall &
Schmidt, 2011). This research found that local organizations in this area were specified in the
field of fisheries, agriculture, religion, lake security, handcraft group, and military
association. The local organization generally gave economically and socially benefits to their
members. It became a mechanism to distribute programs information and as a medium to
discuss lake environmental issues. The previous study suggested that individual’s occupation
associates with people attitude towards conservation (Tomicevic, Shannon, & Milovanovic,
2009). The previous finding supported this result, the statistic data found that the occupation
(fisherman) was positively associated to participation. Nevertheless, this variable had only
10% significance level and had a negative relationship towards participation (coefficient = -
1.402). The likelihood to participate in the program of people who had a job as fisherman was
0.2 times lower than other jobs. Underlying reasons might be related with the situation of
lake deterioration and rivalry manner of lake appropriation. This lake faced severe
eutrophication problem that leads to uncontrol growth of water hyacinth species and finally
decrease the amount of lake biodiversity drastically, including fish species. Participation was
strongly associated with family size (coefficient = 0.467, significant at 1% level) which
suggested that family with larger number of members had a higher likelihood of participation.
The odds ratio result indicated that the increment of one member in the household would
result to 1.6 times higher likelihood of participation. This significant finding was also
consistent with previous research (Agrawal & Gupta, 2005).
The CPR benefit was a variable related to whether or not people got access to
appropriated amount of resource from the lake. The domain resources were water, fish, and
aquatic plants. This variable was highly statistically significant in explaining the participation
(coefficient = 3.271, significant at 1% level). Those people who appropriated higher amount
of CPR were 26 times more likely to participate in government programs than those who did
not. This finding was consistent with previous studies that suggested greater amount
resources harvested influenced the likelihood of participation (Adhikari, Falco, & Lovett,
2003; Agrawal & Gupta, 2005; Al-Subaiee, 2015). Access to appropriate and availability of
resources had become major determinants that influenced the likelihood of people to
participate in the resources management (Adhikari, Kingi, & Ganesh, 2014). An intensive
lake resources appropriation caused a conflict of interest among stakeholders in different
sectors. For example, regulating water level had caused conflict of interest among
stakeholders in upstream-downstream. When the water gate was closed to protect
hydropower operation in the downstream area, it impacted in flood that swept agriculture
lands in the upstream area. Another case was when most fishermen agreed to the
government's programs to eradicate water hyacinth in order to sustain fishery sectors, but
fishermen who work as aquatic plant seekers tend to be reluctant to support the program
because this vegetation has become their main income.
All three of the access variables – information distribution, incentive providing, and
policy effectivity – were statistically significant. Information distribution variable explained
how information about lake management program was distributed to the society. This
variable was classified using dummy type for government visit, people visit, local
community, local people meeting, and social media. The statistic analysis reported that
government visit, local people meeting and social media variables were statistically
significant at 1% level (coefficient = 3.618, 4.351, and 4.379, respectively). Furthermore, the
two variables – people visit and local community – were statistically significant at 5% level
(coefficient = 3.356 and 2.783). The higher odds ratio for social media and local people
meeting variables might indicate that the two of these variables had become an effective way
to distribute program information. Hence, people who received program information from
368
social media or local people meeting were more likely to participate in the program. This
result was consistent with previous studies that found significant access information variable
and suggested that those people who had the initiative to search programs information were
more likely to participate to the program (Bell, Robert, English, & Park, 1993; Agrawal &
Gupta, 2005).
The previous research conducted in Nepal suggested that compensation mechanism
for those who give contribution in managing resources is important to strength their
commitment (Adhikari, Kingi, & Ganesh, 2014). This payment for environmental value
might increase the probability people participate in CPR management. The previous finding
was consistent with the statistical result in this research. The result also found that access
incentives were variable highly statistically significant associated to participation (coefficient
= 1.914, significant 1% level). In this case, incentives variable refers to whether or not
people got information about compensation provided for those who participate in the
program. Those people who received information about incentives were 6.8 times more likely
to participate in the program than the ones who did not get any information. Moreover, most
of the people had experience received incentives, and those incentives were distributed
through local organization and or individual. Some incentives were provided in different
varieties, namely: (1) wages and food, these were provided after individual/group finishing
program activities; (2) technology, fertilizer and paddy seed, particularly to support
agriculture sectors; (3) fish seeds, net, and bamboo, to help fishery sector; and (4) variety of
trees, to support plantation sectors.
In the case of CPR management in Brazil, individual’s belief had an important effect and
significantly influenced the likelihood people contributed in CPR management (Cavalcanti,
Schlapfer, & Schmid, 2009). This previous research found that fisherman who believe with
other fisherman were more likely to participate cooperatively and would report if
misbehavior happened. This research finding supported this argument. The result was
statistically significant at the 5% level suggesting that effective policy was correlated with the
likelihood of participation (coefficient = 2.281). The result indicated that people who had
positive belief or perception that government programs were effective, they were 9.8 times
more likely to participate than people who did not. However, 95% of the total respondents
surprisingly had the belief that the programs were not effective to solve lake problems.
Calcavanti et al., (2009) suggested that increasing communication might be important to
influence each individual’s belief and finally perceive individual to contribute collectively in
CPR management. For this study, some important factors did not indicate significant
association to the likelihood of participation in terms of income (coefficient = -.686),
education, and age. These finding were inconsistent with previous research that suggested
significant result for income variable (Agrawal & Gupta, 2005; Bell, Robert, English, & Park,
1993; Al-Subaiee, 2015; Hayo & Vollan, 2011), education (Agrawal & Gupta, 2005;
Adhikari, Falco, & Lovett, 2003) and age (Tomicevic, Shannon, & Milovanovic, 2009).
4. Conclusion
This research aimed to examine major factors hat influence public participation
towards common-pool resources (CPR) management in Rawa Pening Lake, Indonesia. As a
field experiment, this research investigated lake basin management programs under
government decentralization regime and examined determinants that might be associated with
local people participation in those programs. The statistical analysis provided empirical
support and affirmed the research hypotheses: the likelihood for participation is greater for
appropriators who acquired high levels of economic benefits from resources appropriation,
who belong to specific stakeholder organizations, and who received sufficient program
369
information. These findings were mostly consistent with previous research that concluded
socio-economic determinants highly affected the likelihood of participation in lake
management programs.
This research suggested that promoting awareness and increasing communication
might be a long term process but an essential investment to support public participation for
sustainable lake basin management. This result found that government staffs, local
communities, villagers forum, and social media succeeded in distributing programs
information to the society. Instead of providing effective access, these agents were potentially
able to enhance communication among the stakeholders and supported environmental
awareness programs. This awareness gave people understanding about what environment
problems faced, why these issues were important, and how they could contribute (Ramsar,
2010). Promoting public awareness and information are essential in creating an effective
participation (ILEC, 2005). The evidence for CPR benefits determinant has successfully
influenced participation; however, it is important to underline the conflict of interest issues
among appropriators. Communication is an important instrument to enhance people
involvement, promote cooperation, and engage in the decision-making process (Ramsar,
2010). Hence, coordination among stakeholders was expected to promote a synergized
collective action for making rules in governing resources and communicating the roots of
conflict as well as solving the problems. The successful lake basin management under
decentralization regime was strongly emphasized on stakeholders participation and
coordination, including the national government, local government, and society.
The data analysis indicated that assocuation to community membership was able to
increase the participation likelihood. Therefore, this research suggested involving informal
institution arrangement in lake policy process. The policy was difficult to implement by local
people without decent understanding and acknowledgment of cultural, belief and value by
policymakers (ILEC, 2005). A numerous case studies have proven that local communities
successfully contributed to CPR management. Another policy implication of this study is to
strengthen programs mechanism that positively support economic and social welfare. The
evidence finding showed that economic factors (land ownership and area of owned land) and
social factors (organization membership, occupation and family size) strongly influenced the
likelihood of participation. As an example, the current environmental-friendly local products
were encouraged; however, these had to be followed by creating sustainable and conducive
markets. The current incentives mechanism by allocating fund, technology and resources
asset (fish, tree, and organic fertilizer) were able to enhance the likelihood of people to
participate. However, this mechanism needed to be monitored for its commitment and
achievement.
As a conclusion, the successful lake basin management programs under
decentralization government regime was influenced by the roles of public participation.
Referring to the evidence, socio-economic determinants should be strongly considered in the
Indonesia’s blueprint lake policy.
5. Author Biography
Cita Ekanijati was born in Magelang, Indonesia, in 1990. She received her bachelor degree in
political science from Diponegoro University of Indonesia, in 2011. Currently, she is a
student of the Masters Degree program majoring in Environmental Management, Graduate
School of Global Environmental Studies (GSGES) of Kyoto University Japan. Her study
interests are mainly on lake basin management, climate change policy and environmental
economics.
370
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371
Implementation and Development of Saving Bonds in Latvia till the end of
Year 2015
Ivars Avotins
Turiba University
Ivarsaaa@gmail.com
Abstract
Main objective of this research made on households’ survey is to uncover the attitude
of households to saving bonds and to assess the knowledge of households on opportunities to
invest their savings into saving bonds. When the survey results were analysed it was found
that in general holds use only one possible way of saving money and there is little knowledge
of possibilities to make risk diversification of savings. Meanwhile if there were additional
benefits offered by the government, then the households could think over and start to invest
in saving bonds. Regardless whether the benefit would be in from of tax reduction, index link
bonds (to be sure that the savings won’t be lost in the future) or exact purpose of the
investment.
Keywords: Government debt securities, Government debt management, Saving

bonds
Main Conference topic: Management, Management development
Introduction
Developing countries are in need to attract additional resources for faster development
of economy. For this purpose there is a need to attract additional investor sectors. Currently
special conditions are foreseen with respect to monetary financial institutions, but the author
suggests making special tax profit for investments in government debt securities and a system
without intermediaries for households and nonfinancial companies.
According to the economical cycles it is understandable that if the economy is in the
development cycle the households wish to participate in its development. In case economy is
stable and there is low interest rates then households will try to spend money or keep it in
overnight account. If economy is in crisis – the best thing is to invest money in low risk
investments. The time of crises is the best time for government to offer special debt securities
like saving bonds for households.
Developing countries are in need to attract additional resources. Reasons causing this
action vary: i) to increase the speed of countries development, ii) lack of financial resources
to settle government liabilities, iii) solve social requests of society like hospitals, schools,
concert halls and infrastructure.
Resources for additional economic development of the system can be ensured, it is
necessary to support it by borrowing. Moreover, there are economical cycles and in growing
economy it is not so important to attract resources, but in recession periods resources can give
additional stimulation.
Body of paper
According to the research made by Reinhard and Rogoff on the amount of the
government debt, the most effective scenario is to have government debt from 30% till 90%
of GDP (Reinhard, Rogoff, 2010). It is so, because in case when the government debt is low,
the price for the debt likewise is low and the increase of tax revenue and economic
development can be higher than expenditure for the debt. This research is made based on the
372
annual data from 1944 till 2009 and from the authors' point of view there should be
difference between the first twenty and the last twenty years.
In comparison, in the research of Wang (2005) impact of increase of government debt
on the economy of the country has been analysed. According to Wang, the government
interest rates are the lower for all the rest of economy sectors and increase of them increase
the interest rates for rest of the sectors of economy (financial institutions, nonfinancial
institutions and even real estate credits for households). Also if government attracts too much
resources in the domestic market in economic development times, the resources are limited
and main investors can give them for government and not for the economy development in
the country. During recession periods regardless of the quality ofthe projects, the majority of
residents are saving money without making investments. Therefore during this time it is
good, that government makes increase in debt by issuing government debt securities and
gives opportunity to residents to increase their income by percentage revenue with safe
investment.
Barro-Ricardo equivalence theorem on connection between tax and government
spending also can be analysed. In line with this theorem the effect on the total level of
demand in the economy is the same no matter what level of taxation is actually used.
(Buchanan, 1976). However this theory was disproved by a lot of scientists in their research.
Meanwhile Barro diplomatically assured that the theorem is correct in situation if the
economy is intensively developed and has increase in GDP. Whereas in case the country's
economy is not in the developing stage, the theorem should not be applied. Moreover, the
theorem is not applicable if the economy of the country is in recession.
To analyse increase of government debt on the economy growth Panizz and Prebitero
made research on connection between government debt increase and GDP increase (Panizz,
Prebitero, 2012). On the conclusion they understood that in the analysed data connection
between changes in currency exchange rate and changes in GDP these data are more related
than the analysed changes. This gives author proof that data should be analysed up to date.
The first issue of government debt securities in Latvia took place in December 1993.
There were offered government debt notes for the period of one month. The main reason for
it was to develop government debt market. The trade place and infrastructure for trade was
developed and maintained by the Bank of Latvia. As the Bank of Latvia provides money
settlements and controls the amount of reserves, it was possible to settle debt securities
system and maintain it.
For the first 6 years it was only possible for banks and other special entities to take a
participation in primary government debt market. As there were no stock exchanges for these
securities, no households could buy any government debt security. That resulted in situation
in which banks had a role of intermediaries. From liability side banks took deposits from
households, but from asset side they were lending the money to government for better percent
rate.
In 1999 the system was improved and the administration was taken over by the Riga
Stock exchange. For the first time opportunities could be taken using custodian
intermediaries to by government debt securities in secondary market not only for financial
investors, but also for non-financial companies and households. The participation in primary
market was left only for banks and other special entities like it was before with all the
options.
As the author started to do research on government debt securities systems and their
administration systems as of 2005, up till 2012 was made a clear vision of the best worldwide
government debt system management in 4 continents (Northern America, Southern America,
Asia and Europe) and there was a survey launched in March 2012 asking Latvian government
debt management specialist on their opinion on special debt securities for households and
373
non-financial companies. The majority of specialists confirmed that special system for
household should be appreciated in Latvia.
The first issue of saving bonds was in the 19thJune 2013. In total saving bonds with 4
original maturity options (6 month, 12 month, 5 years, 10 years) have been offered. The
minimal amount was 43 EUR (now 50 EUR) and if the household invested minimal amount
for minimal period, the money transfer commission fee was higher than the profit (Latvian
State Treasury, 2015).
The first issue of saving bonds was a step to make system for households and to
attract money not only from professional investors, but also for other investors like
households. From State Treasury bulletins it is understandable that the total amount attracted
by the government is 5 million EUR at the end of 2015 (Latvian State Treasury, 2015).
According to the author’s understanding the amount is rather low. After half a year from the
launch of the system author has made survey of household. The main goal of the survey was
to understand the knowledge of households on this option (i.e. to invest in saving bonds).
The survey was for 1000 household representatives aged between 18 and 74. The period
of survey was from January 13 till February 3 2014. It was held in close cooperation with
www.aptaujucentrs.lv. The omnibus survey method was used as one of additional ad-on to
regular monthly survey. The questionnaire was based on the following points:
1. Selected respondents by five step matter of choice stratification selection,
2. The stratification indication:
a. Region,
b. Type of settlement,
c. Age,
d. Sex,
e. Nationality.
3. Survey quantity: 1000 respondent,
4. Random rout choice,
5. Selection of the respondent in the household: principle of youngest male,
6. The method of data collection: direct interview in the households place. In one house
or apartment the maximum is one interview,
7. The verification of the information:
a. At least 10% of all interview are checked,
b. There are special cross-check questionnaire,
c. The cross-check are held from 5 to 8 days after the interview and if 2 of the
interviews are not confirmed, all the interviews of exact data collector are
rechecked.
8. The network of interviewers consist of 60 persons and the network of cross-checkers
consist of 2 persons.
The total received responses from the 1000 respondents who could confirm that they have at
least heard about the saving bonds were 189 respondents. That confirms that less than 20%
of households in the beginning of 2014 had heard at least of saving bond issues.
374
Table 1: Summary of household survey on government debt securities and their refinance
No
.
Distribution of questions and answers
1. Do you agree with the statement that government debt is good and needed for national
economy?
90 37 62
Agree Do not have opinion Disagree
What is your favourite way of money holding? (more answers are possible)
125 19 4 44 1 8
account
Current Deposit Financial
market In house Saving
bonds
Other
Saving
1%bonds Other
4%
2.
Financial
market2% In house
22%
Current account
Deposit
9% 62%
What is your level of competence (level of information) in possibility to make money

investment in saving bonds with fixed interest rate?
47 98 32 12 0
3. Not informed information
Low Averageinformation information
Good Fully
informed
4. Would you agree to lend your money to Latvian government by buying saving bonds?
73 49 0 31 5 31
No
Disagree Ratherdisagree Neutrally Rather agree Agree
opinion
How important it would be for you if the government offered index linked saving bonds
(the return could not be less than inflation)?
5. 22 24 19 69 14 41
unimportant
Entirely Unimportant unimportant
Rather Important important
Very No
opinion
6. How important it would be for you if the government offered saving bonds with exact
purpose (that is building of schools, hospitals, infrastructure or other nationally
important project)?
24 17 16 71 27 34
No
unimportant
Entirely Unimportant unimportant
Rather Important important
Very
opinion
375
In additional question for the main reasons to buy and not to buy saving bonds was
mentioned that households do not trust to the Latvian government. Also the main reasons to
buy government debt securities were connected to the fact, that investments in government
debt securities are much safer than investments in other sectors.
Making analyses on the necessity of government debt securities it highlights out that
less than half of households understand the necessity of government debt at all. That confirms
that society is not sufficiently informed on the government activities and the need for
additional resources.
More than one answer on the question "What is your favourite way of money
holding? (more answers are possible)" was given only from 12 households and more than two
answers were not given at all. According to the authors understanding that shows that each
household has one exact approach and the majority is not thinking of diversification of
investments and risk connected to the type of investment.
None of households thinks that they are fully informed and only 12 households think
that they have good information on the possibilities and options to make investments in the
saving bonds. In addition 9 from 12 households are from capital city (Riga) and 3 are from
regions.
Conclusion
As the total of 1000 households have taken part in omnibus survey and none of them
thinks that their knowledge (level of competence) in possibility to make money investment in
saving bonds with fixed interest rate is full and only 12 think that they have good
information, more informative and educative work should be done by the Latvian State
Treasury.
As only 12 households from 189 make their savings using more than one way of
saving money, the Latvian Ministry of Finance should make information campaign for
households on the risk diversification and what are the risks if only one way of money
holding is used.
As the amount issued in saving bonds at the end 2015 is 5 million EUR author can
assume that the development and improvement should be made to attract more money,
otherwise the implementation of the system and the maintenance makes more expenditures
than the profit from the cheaper intra resources.
Brief biographies of the author

Ivars Avotins
Ivars Avotins is a Chief financial statistician at the Bank of Latvia in charge of
securities statistics. He has graduated from the University of Latvia in 2005 and his master
thesis was about Debt securities system in Latvia. Now he is a PhD student at the Turiba
University.
376
References
1. J.
Buchanan (1976) Perceived Wealth in Bonds and Social Security: A Comment,
Journal of Political Economy, Vol. 84 (2), p. 338.
2. Latvian State Treasury (2015) Debt Management Quarterly Bulletin Q3/2015,
[http://www.kase.gov.lv/?object_id=297]
3. Panizza U., Presbitero A. F.(2012) Public debt and economic growth: Is there a causal
effect?, Institute of public Policy and Public Choice, Working paper No 198, p. 4.
4. Reinhard C.M., Rogoff K.S. (2010) Growth in Time of Debt, NBER Working Paper
No. 15639, p.4-6
5. Wang Z. (2005) A note on deficit, implicit debt, and interest rates, Southern
Economic Journal, No. 72, p. 187.
377
RELATIONSHIP BETWEEN STRATEGIC GOVERNANCE, BUSINESS
COMPETITIVENESS AND NETWORKING1
Pelin ARSEZEN-OTAMIŞ2 Sümeyra

BABACAN3
Abstract
The purpose of this paper is to develop a model for strategic governance linking international
competitiveness and networking and validate the model empirically. This model will help to
develop generic and systematic policy guidelines that can be used by policy makers to
establish and continually improve competitiveness. A literature review is undertaken to
derive the hypotheses and the included constructs. The study will test the path analytical
model using partial least squares analyses on survey data from marine tourism companies
located in Fethiye.
Keywords: Strategic governance, business competitiveness, networking, marine tourism.
Introduction
The recent past has seen a growing interest in governance topics within the field of
management research (Uwalomwa, 2011). This paper brings a perspective on how strategic
governance may affect international competitiveness and networking. The relationship
between networking and competitiveness has been studied by many researchers (Porter,
1990; Porter, 1998; Porter, 2003; Wilk and Fensterseifer, 2003; Longhi, 2015). But the
relationship between strategic governance, business competitiveness and networking has not
been empirically studied by researchers. Because governance is very difficult to measure –
“there are so many variable factors and so many subjective areas” (Gascoigne, 2004, p. 10).
Empirical work in social sciences is a very hard application to undertake – especially so, if
strategic issues are concerned (Sonnenfeld, 2004). In this study we propose a model to
overcome the governance measurement problem.
Strategic Governance
Governance is commonly defined in the context of public sector and state (Chou et al., 2015).
Many corporations are incorporating an affirmative commitment to competitiveness practices
into their corporate governance (Wiedenegger, Kern and Rupprechter, 2012). Governance is
not related to the national (state) level only, and thus the researcher should take into account
both the supranational and the sub-national levels (Hooghe and Marks, 2001; Wiedenegger et
al., 2012).
Strategic governance involves designing rules or policies that align with values and take into
account strategic considerations among participants whose actions, in some way, need to be
1This paper has been granted by the Mugla Sitki Kocman University Research Projects Coordination Office.
Project Grant Number 15/216 and title “Effect of Micro And Small Tourism Businesses’ Owner-Managers’
Management Practices On Business Performance: Case Of Fethiye”
2 Mugla Sitki Kocman University, Fethiye Faculty of Management, Tourism Management Department,
parsezen@gmail.com
3 Mugla Sitki Kocman University, Fethiye Faculty of Management, Business and Administration Department,
sumeyrababacan@gmail.com.
378
influenced in order to achieve system of systems goals (Sonnenfeld, 2004; Bristow, Fang and
Hipel, 2014).
Networking
Researchers argue that networking has beneficial effects on firm performance and
competitiveness (e.g. Granovetter, 1985; Gulati, 1998; Zaheer, Gulati and Nohria, 2000;
Schoonjans, Van Cauwenberge and Vander Bauwhede, 2013). Networks are important
governance mechanisms that can help reduce transactional uncertainty and diminish the risk
of opportunistic behavior by networking partners (Uzzi 1996; Molina-Morales and Martinez
Fernandez, 2010; Schoonjans et al., 2013).
The following figure (Figure 1) shows strategic governance actors for marine tourism
industry:
Ministries
Culture and Local Governments & NGOs

Tourism Ministry
Ministry of
Transport,
Maritime Affairs
Communications
and Governorships,
Municipalities,
Mukhtars
Marine Tourism
Environment And
Urban Ministry NGOs (DTBD,
GETOB,
MARTAB, DİTAB,
WaterAffairs
Forestry And TÜRSAB,...) Accomodation Businesses, F&B Marina Businesses, Yacht
Minister South Aegean Bussinesses, Transport Buss. Maintenance Bussinesses, Boat
trips business...
Development
Agency
Ministry of Finance
Figure 2. Strategic Governance Actors

Source: Authors.
While founding our empirical model, we took the actors in figure into account. Then we
made interviews with this actors and determined items for our questionnaire.
Business Competitiveness
Definition of the concept of competitiveness is characterized by a scientific debate which has

been going on for several decades, and still has not been finished. Business competitiveness
of companies cannot be separated from the competitiveness of products, services created by
them, which is influen ced by the “price” and “non-price” factors similarly. Business
competitiveness is a combination of a number of factors shaping competitiveness, and should
not be tested in a given moment, but should be evaluated dynamically, taking into account
379
tendencies of changes (Wilk and Fensterseifer, 2003).
In this study we considered competitiveness in micro level.
Conceptual model
Our research model includes three constructs and two relationships as shown in Figure 2. The
constructs are defined in the subsequent sections and their operationalization is anchored in
the literature. We will investigate the effect of strategic governance on business
competitiveness and networking.
Business
Competitiveness
H1
Strategic
Governance
H2
Networking
H1: Strategic governance has effect on business competitiveness
H2: Strategic governance has effect on networking.
REFERENCES
Bristow, M. Liping, F. Hipel, K.W. (2014), From Values to Ordinal Preferences for Strategic
Governance. IEEE Transactions On Systems, Man, And Cybernetics: Systems, Vol. 44, No.
10, October 2014.
Chou, J.S. H. Tserng, P. Lin, C. Huang, W.H. (2015), Strategic Governance for Modeling
Institutional Framework of Public-Private Partnerships, Cities: The International Journal of
Urban Policy and Planning, Volume 42, Part B, February, Pages 204–211.
Gascoigne, C. (2004): Investors Get a Measure for Corporate Behaviour. Financial Times
Series on Corporate Governance, 23 April 2004.
Granovetter, M. (1985). American Journal of Sociology. Vol. 91, No. 3, pp. 481-510.
Gulati, R. (1998). Alliances and networks. Strategic management journal, 19(4), 293-317.
Hooghe, L., Marks, G., Types of Multi-Level Governance. European Integration online
Papers (EIoP), Vol. 5, No. 11, October 12, 2001. Available at SSRN:
http://ssrn.com/abstract=302786 or http://dx.doi.org/10.2139/ssrn.302786.
380
Longhi, C. (2015), Clusters and Collective Learning Networks: The Case of the
Competitiveness Cluster 'Secure Communicating Solutions' in the French Provence-Alpes
Côte d'Azur Region, http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2015-28.pdf,
07.01.2015.
Molina‐Morales, F. X., & Martínez‐Fernández, M. T. (2010). Social networks: effects of

social capital on firm innovation. Journal of Small Business Management, 48(2), 258-279.
Porter, M. E., (1990) “Competitive Advantage of Nations”, Harvard Business Review,

March-April, ss. 73-79.
Porter, M. E., (1998), “Clusters and The New Economics of Competition”, Harvard Business
Review, Kasım-Aralık, ss. 77-90.
Porter, M. E., (2003), “The Economic Performance of Regions”, Regional Studies, Vol: 37,
No: 6&7, August – October, ss. 549-578.
Schoonjans, B., Van Cauwenberge, P. Vander, Bauwhede H. (2013). Formal business

networking and SME growth Small Bus Econ, 41:169–181.
Sonnenfeld, J. (2004) Good governance and the misleading myths of bad metrics. Acad
Manage Perspect February 1, 18:1 108-113.
Uwalomwa, O. R. (2011). Corporate governance and financial performance of banks: a study

of listed banks in Nigeria. PhD Thesis, Covenant University.
Uzzi, B. 1996. The sources and consequences of embeddedness for the economic
performance of organizations: The network effect. American Sociological Review.
Wiedenegger, A., Kern, A., & Rupprechter, M. (2012). The Choice of Legal Form and its
Effects on Good Governance: A Case Study of an Austrian Professional Soccer Club.
Ekonomika a Management, 2012(3), 23-43.
Wilk, E. O., Fensterseifer, J. E. (2003) "Use of resource‐based view in industrial cluster

strategic analysis", International Journal of Operations & Production Management, Vol. 23
Iss: 9, pp.995 - 1009
Zaheer, A., Gulati, R., & Nohria, N. (2000). Strategic networks. Strategic management
journal, 21(3), 203.
381
Emigration and its consequences on the development of welfare.
Case of Albania
Emirgena Nikolli
382
Abstract
The main point of this research shows the impact that emigration as well knowing phenomena in
Albania has on families, children, and the entire Albanian society in general. This paper is based in
data’s regarding two main variables emigration rate and poverty rate. Taking as dependent variable
emigration and independent variable poverty rate. At the level of households, remittances and
emigration have contributed optimistically to improve material prosperity. But what will be the effect
of poverty rate in emigration in Albania? By this research we are trying to find the answer of this
question. Expected results from this study are that emigration has effected positively in reduction of
poverty in Albania. But poverty is not the main determinants that may cause emigration there are also
some other factors like political and psychological that plays an important role determination of
emigration in Albania.
383
Introduction
Albanian Government has provided the National Strategy of Emigration in 2002. Emigration is a
major concern for Albania because about 20% of the population has fled the country during more
than a decade, making Albania one of the countries with the highest flows of emigration in the world.
Emigration has also become an important aspect of Albania's relations with the European Union
member states as countries destination for the majority of emigrants. Albania is considered in many
cases from the European Union as a third country where war should be given priority against irregular
emigration. Management of emigration flows has therefore become an integral part of the
Stabilization and Association Process. The aim of this strategy is to provide a more comprehensive
policy on emigration that has mainly reacted to fight illegal flows in a policy more fully based on
emigration management, and in particular flows of immigration . This policy covers the following :
the protection of the rights of Albanian emigrants abroad , setting up and linking Albanian
communities abroad , the orientation of remittances towards business investment , organizing an
adequate policy for labor emigration , creating facilities to the travel of Albanian citizens compared
with short-term visa requirements and finally, developing a proper legal framework and institutional.
The emphasis of this strategy is on the management of emigration flows as a immediate priority,
rather than the development of a policy on emigration given that Albania will certainly remain for
some time a country of emigration. However, in the long run Albania is likely to become a country of
emigration in the same way that made southern EU member states over the last twenty years. The
development of a legal framework for emigration as a future requirement of EU accession will require
the gradual EU acquires on emigration and asylum in parallel with deepening of the Stabilization and
Association Process. However, because of the importance of limited current emigration issues these
changes go beyond the scope and content of this strategy, which limited to a period of five years, from
2005 to 2010. The evolution of Albania, a country of emigration to a country of immigration should
not be seen within a limited legal framework, but within the context of considerable social change and
developing a mindset open to multiculturalism.
This paper primarily aims to give a broad view of emigration in the context Albanian explaining how
developed is this phenomenon in Albania, as well as the impact in reduction of poverty.
Methodology used is referred in two variables where emigration is dependent one and poverty rate is
independent by using Eviews we have test these variables in order to see the impact of poverty rate in
emigration. Since is the first time that this study is done regarding Albania results would be quite
interesting. Other part of the study is focused in explanation of the regression model used and at the
end is concluded by conclusion.
384
Literature Review
In 1989 Aristide Zolberg, a researcher renowned international emigration, wrote that if all countries
of the world were composed of Albania on the one hand and Japan on the other hand, it would not be
necessary to study international emigration . Almost a year later, as ironically, successive waves of
massive international emigration, often illegal and chaotic, would make Albania one of the countries’
most affected by this phenomenon. Russell King qualifies it as a kind of laboratory for new studies of
migration processes' He analyzes the behavior of remittances in three main plans;
In relation to the role they have in the country's macroeconomic stabilization, in relation to the role
they play in alleviating poverty and in relation to the role that they play in socio-economic
development of the country.
According S.Wahba which refers Guidici (1998), the amount of remittances sent by migrants in the
country of origins defined by a set of factors such as:
1. Number of employees who go and work abroad
2. The structure of migrants by age group, according to the registrar, according to seniority, according
to the country's proximity to migration, according legalization etc.
3. Working conditions also have a strong impact on the main remittances. Element that are affecting
this case are wage level, which varies according to country of migration, type of work, facilities that
create local entrepreneurs for migrant workers, etc.
4. Amounts of remittances also depend on security, the speed and ease to move value in the home.
5. Political changes, economic and social of the country of origin and the destination you have, also
have a large impact on the amount of remittances transferred.
A theoretical debate regarding the determinants of emigration took place from L`es to be the object of
discussion recently regarding emigration. They emphases three main reasons why people emigrate.
• Altruism, which has to do with the fact that Albanian emigrants caring for their families' left behind.
• Self-interest, which has to do with the ambition of every citizen to ensure higher incomes.
• Payment motivation (Repayment)
Another empirical assessment based on the determinants of remittances is that of Schiopu and
Siegfried (2006) .They altruism determined that variable is important for emigrants. Also,
SCHROOTEN (2006) finds that an increase in GDP per capita in domestic economy will cause more
remittances. Other studies on the determinants of Albanian emigrants are those of Konica (2006),
Germenji , Beka and Sarris (2001 ) and Lianos and Cavounidis (2004), which all use the data
received from countries of origins. An interesting finding are find from Konica (2006) who finds a
385
negative effect between migratory experience and remittances. Lianos and Covandos (2006) in
accordance with the study of Hagen - ZANKER and Siegel (2007), have concluded that emigrants
send more when the level the employment in the host country is high.
Some researchers have found that divorce used to have a greater impact on the migrants mostly from
countries that are less developed and less on migrants that comes from countries that are developed.
Young migrants that have low incomes can be more influenced by a divorce. They have found some
kind of evidences regarding marriages for convenience of migrants that comes countries that are less
developed. (Bijwaard & Doeselaar, 2012) The effect of migration in incomes and also in
expenditures that households of migrants have can affect accordingly poverty. (Schiff, 2006)
Analysis that comes from one other study shows that the flow of migration that comes usually during
1990s while the impact of economic crisis in Ecuador used to a de provide a down turn in the rate of
poverty between households of migrants. (BERTOLI & MARCHETTA, 2014)
Trends of emigration in Albania

Scope, consequences and relationships that emigration has by analyzing also trafficking in human
beings and complexity of the phenomenon, transforms emigration in a matter of importance.
According to the census conducted by INSTAT, in 20014 the population of Albania is 2.77 million
people and if there would be no emigration this figure would be nearly 3.78 million. The difference
between these two figures shows that the approximate number of emigrants is nearly 710 0002
persons of whom 390,000 males and 320,000 females. Due to the massive and irregular flow of
Albanian emigration, there are no accurate official figures regarding Albanian emigrants. However,
experts of the field have provided some approximate figures to explain the distribution of Albanian
emigrants in these host countries.
About three-fifths of them live in Greece, a fifth in Italy and a fifth in Western Europe and other
countries of the world. Statistics show that about half of emigrants are not equipped with proper
documentation. A recent study of INSTAT order the importance of the reasons that force Albanian
citizens to emigrate abroad is related to higher wages , family financial support , better working
conditions, better living conditions, better education conditions for themselves and for other members
of family , as well as in certain periods due to security and order in the country . places in which
Albanian citizens prefer to migrate are influenced by some factors like ease of finding a job ,
geographical proximity , ease of entry into the host country, the relatives living in countries where
they migrate, recognizing the opportunities for education and improving professional skills, ability to
work in their profession and better wages compared to other countries except Albania.
386
During the communist period, Albania has been isolated and the phenomenon of emigration was
almost inexistent. The massive emigration that characterizes the post communist period started in July
1990, when over 5,000 people entered the embassies of Italy, Germany and France to leave the
country. At the end of 1990, the 20,000 Albanians had left the country by road to Greece and
requested political asylum. In March 1991, a large number of Albanians entered the port of Durres,
the largest in the country. Once seized the Navy commercial, directed and reached the ports of
southern Italy. The same situation was repeated a few months later, in August, when about 18,000
people again took control of several ships, landed on the coast of Italy.
Illegal emigration increased dramatically over the years. Emigration starts to decrease during 1992
1996. The reason was attributable to improved political stability and socio-economic situation. At
the end of the year 19,965 the number of Albanian nationals living abroad amounted to 350,000
people. The flow of emigration became massive in 1997, following the collapse of pyramid schemes
and political chaos that accompanied this event. In recent years there has been a steady decline illegal
immigration the strengthening of border control, intensifying the fight against human trafficking
human, improving socio-economic conditions in Albania and political stability and order. Albanian
emigrants increasingly being integrated in the host countries, with the exception of Greece, where the
process is very slow. There is a decrease of significant illegal emigration, but this is accompanied by
increased regular emigration to Canada, USA, etc. As a result of the integration of migrants, migration
for employment purposes is associated with family reunification, which cannot previously happen
because people emigrate illegally. Emigration for employment purposes is accompanied by a large
number of citizens who leave country to study abroad.
Government measures to strengthen border control and combating trafficking human beings have
brought a decrease irregular emigration. Also change of social, economic and political has reduced the
desire to leave the country in the of increasing the demands and aspirations of Albanians who would
otherwise be contingent emigration. Another phenomenon is the decrease of the importance of
geographical proximity. This is shown by the fact that we note the continuing decrease in the number
of emigrants for example neighboring Greece and Italy and a significant increase of emigrants in more
distant countries like UK, USA and Canada . The main reason that influences the selection of the
state to migrate is economic opportunities offered, State concerned or the possibility of issuing
documents. As a result, an increasing number of greater Albanian emigrate to countries like the UK as
well as countries where to immigrate legally, like Canada or the US. Although the number of
emigrants to neighboring countries remains high , what noticed recently is increasing seasonal
migration to neighboring countries as well the ratio between regular migration and irregular in favor
of regular immigration . Firstly, this is due to facilitate the gathering of documents in the host
countries. Secondly, the growth of adapting to the requirements of the labor market in host countries
gives this trend a great help. Establishing contacts and learning of languages of neighboring countries
387
has helped significantly this process. Thirdly, the development of communication with the host
countries played a role important. This is accompanied by the addition of border crossing points, lines
ferry to Italy, increasing the number of flights to and from Albania, as well as improving road
infrastructure. Communication with foreign media is added and is continuous in those countries in
which citizens were emigrants.
In last two decades huge emigration of Albanian citizens flows to countries Western European have
decreased because of rising in stability and progress in economy of the country. So far, because of its
circular nature, Albanian emigration continues to take place, together with return of migration that is
also part of this cycle. Financial crisis of the world has reduced the potential for migrants to continue
work in Greece that is the main destination country especially for Albanian migrants, by causing their
homecoming to Albania. Consequently, are required well-built national capacities in order to be
prepared for challenges of the future regarding labor mobility that causes reintegration and return of
migrants? But public institutions of Albania do not have yet acquire enough resources and capacities
to competently take action regarding challenges needed for return of migration.
Data and methodology

To calculate the effect of poverty rate in emigration are taken data based on percentage of emigration
rate and percentage of poverty rate in Albania for a period of time from 1996 till 2010.
Poverty rate data’s are taken from World Bank while data’s of emigration rate are taken from Penn
World Table website. Below is shown graphically the trend of movement during the period of time
taken in consideration in this study for two variables specifically poverty rate and emigration rate in
Albania.
388
Graph: Movement trend for poverty rate and emigration rate
30
25
20
15 % of emigrations
10 Poverty rate %
-5
As we see in the graph during years emigration in Albania has meet a slightly decrease. While
poverty rate has meet a sharply decrease over time. So according the graph in Albania
emigration has not effected in reduction of poverty in order to prove this observation below will
be tested this relation through regression analysis by using Eview.
The model to be estimated is:
Emigration rate= β0 + β1 Poverty rate + µ
Where:
 Emigration rate represents rate in percentage for emigration in Albania

 β0 shows the intercept of emigration rate when all the independent variables are equal to 0
 Poverty rate shows the rate in percentage for poverty in Albania
 Β1 represents the expected slope of how much emigration ratio will change for one percent of
change in poverty rate.
After running the regression analysis by using Eviews program is presented following equation:
389
Table 1: Regression results
Variables Coefficient t-stat P-value
Emigration rate
(dependent) 0.01 0.04 0.9
poverty rate(
Independent) 0.004 0.3 0.7
R square = 0.008
F stat = 0.1
Null hypothesis is: Poverty rate affect emigration
Alternative hypothesis: Poverty rate doesn’t affect emigration
Since P-value is 0.9 or 9 % so more than 5% in this case we can say that we can’t reject null
hypothesis so we can accept null hypothesis this shows that poverty rate affect emigration.
Eq2:
Emigration rate = 0.01 + 0.004 Poverty rate + µ
R2=0.008
The result shows that poverty rate has positive impact in emigration rate so an increase in poverty
leads in an increase in emigration rate. R2 which is equal with 0.008 % shows that poverty rate
explains only 0.08% of emigration rate. So even though poverty rate affects positively emigration
there are other factors that have greater affect in causing emigration. So the choice to migrate may
have numerous reasons starting by, psychological, political factors and social, economists are focused
more on wage and unemployment differentials. Some importance is given more to political and
psychological reasons that give a strong impact in determination of migration. (G.J, 1991) (Molle &
A, 1989)
Conclusion
Emigration in Albanian during the period of time from 1996 till 2010 shows that has not been affected
so much from poverty .Even though poverty is a important determinant of emigration there are also
some other factors that have more impact in flow of emigration or even for return of emigration in
Albania. It’s a clear fact transition economy in Albania since our history comes closed economy to an
open one. So strong cause of emigration has not been only poverty but an important role has played
also psychological and political factors.
390
Overall as a conclusion we can say that poverty has not played the main role that has caused
emigration in Albania. We can show this fact by results of regression analysis and as we see there is
not a significant relation between emigration and poverty. So the affect of poverty in emigration has
been low .The other factors that gives a greater impact are political, psychological factors and also the
desire to be graduated in prestigious universities in the world.
Bibliography
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391
Appendix: Data used in regression analysis.
% of % of
emigrations Poverty rate
-0.07018 25.772
-0.00483 25.532
-0.19204 20.753
0.57271 20.431
0.12114 22.348
0.41109 23.696
-0.03494 24.647
0.00895 19.8
0.21416 18.262
0.10666 16.229
0.08956 15.34
-0.02177 13.599
0.04698 13.556
-0.05976 14.061
0.03456 11.831
392
IMMOVABLE PROPERTY MARKET IN ALBANIA: CHALLENGES AND
PERSPECTIVES
AUTHORS:
1. NAFIXHAFA, Epoka University, Rr. Tiranë-Rinas, Km. 12, 1039 Tirana, Albania. E
mail: nxhafa@epoka.edu.al,
2. MARSONA BEZHANI, Epoka University, Rr. Tiranë-Rinas, Km. 12, 1039 Tirana,
Albania. E-mail: marsi_bezhani@hotmail.com
ABSTRACT
A country that has property rights clearly defined and an effective mechanism that deals with
them is subject to a well-functioning market economy. Property rights are one of the most
delicate issues that Albania is facing nowadays. More than 40% of people’s claims are about
ownership. Despite various undertaken attempts, property rights remain today insecure and
propose a challenge for the Albanian governance.
The problem of immovable property rights has roots that extend deep into the past;
originating from the replacement of the old political system with the new one, and reaching
the boiling moment in the past few years. Nevertheless, the new system was not able to take a
remarkable turn of improvement. Regaining the property rights remains a frustrating burden
for people. Despite the many debates on the law’s efficiency to figure out a solution for this
problem, the resolution is not found yet. The rule of law is not strong enough to give an end
to this problem.
This paper aims to provide an accurate representation of the immovable property market in
Albania and to explore the challenges and the solutions possible. After identifying the
importance of an efficient immovable property market in the economy of a country, the
problems that Albania faces in this specific market are pointed out by examining each of the
causes separately. Then the measures already implemented are brought to focus and some
possible solutions are proposed in order to achieve an efficient immovable property market.
KEYWORDS: property rights, efficient property market, law, Albania
CONFERENCE TOPIC: Law and Business
INTRODUCTION
One of the primary aims and goals that a person adds to his or her objectives list is to own a
home, a property, a land. Whatever that would provide a clear and defined ownership.
Owning a property is more than just a piece of a binding contract between the owner and the
object. The ownership of an immovable property is one of the most valuable assets that a
person may achieve. Not just for the person, but as well for the society and the economy of
the country. Immovable property is real estate in other words. Real estate or immovable
property is a legal term that encompasses land along with anything permanently affixed to the
land, such as buildings. Immovable property is an object that cannot be moved without
having to destroy it. It may include property rights, house, land, goods etc. [21] Taking in
consideration the effects that this market has in the economy and in the society is important
its study in a careful and precise manner. That is why in this paper there is going to be
analyzed in details these rights, their effects on the development of a country and mostly
focusing in Albania.
What is the importance of the immovable property rights in a country?
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One of the main reasons of failure in the economic development of a country is the lack of
people’s legal rights to property. The absence of an efficient mechanism that regulates
ownership has negative effects on both business and economic market. Dealing with
ineffective bureaucratic procedures leads towards the production of a chaotic system. [7] The
importance of such rights in a country relates to issues of what revisions need to be made to
facilitate economic growth and freedom for the individuals of the society.
Serving this necessity which often is misunderstood as a luxury has a positive effect on
different economic and social aspects. Well-defined property rights help the improvement of
the life standards of poor people who remain poor because they do not have the needed
resources to claim and obtain what is theirs. Clear and well-defined ownership of a property
increases a person’s physical security, making him or her feel safe, without fear that he or she
may lose what actually belongs to him or her. Another advantage is the increased financial
security that a person gains and the political stability from which not only the economy but
also the society profits.
Developed countries, which have implemented rule of law with independent judiciaries
protecting ownership rights, have better systems and higher economic growth. [3]
The government imposes a tax on property to produce an efficient and equitable mean of
raising revenues in order to provide for an effective property market, which in favor will
provide low efficiency costs, will have a benign impact on economic growth, will score
higher on fairness between people and produce higher standards of living for all. Prosperity
and property rights are inextricably related.
A government which wants to have a safe and stable society, economic development and
growth, has as the main aim a well-defined and strongly protected property rights
mechanism. Through such a system, individuals gain the exclusive right to use their resources
as they want to and as they see fit.
Property rights have been considered also as an incentive in increasing investments.
Investments in a country effect the economic growth and manage to open new job vacancies
and thus decreasing the unemployment rate. Clear property rights activate the immovable
properties to be sold, bought or used for different investment opportunities. It is necessary to
achieve a clear and balanced system, a strong law system and a well-designed system of taxes
that will allow private property development and use optimization.
Immovable Property rights in Albania – short introduction

The absence of an efficient mechanism that regulates ownership has had negative effects on
both business and economic market. Having to deal with ineffective bureaucratic procedures
leads towards the production of a chaotic system, whose signs Albania is suffering now. [4]
Challenges in property rights will freeze the immovable object until working effectively. This
freezing limits the usage of this informal property, which leads to conflicts between people
claiming ownership, lowers chances of investment, eliminates any chances of the property
being bought / sold in the real estate market, complicates the work of the state authorities and
effect the overall economic performance of the country.
In attempting to start the procedure to regulate the ownership people face transactions costs,
lose precious time, face bureaucratic hurdles and still it just remains an attempt. There are
obvious obstacles in assigning ownership and compensation.
For Albanian economy, the agricultural sector is one of the most significant ones, covering
35% of GDP. This sector is also affected, causing burdens in assigning land ownership. [18]
Property rights have been a struggle for Albania because their ineffective and inefficient
implementations have damaged the Albanian – EU integration prospects.
Also corruption has a huge impact in alienation and falsification of property documents,
which belong to legal owners damaging the property rights mechanism in Albania. Part of the
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blame goes to the Government of Albania for not properly registration of properties. On the
following table, it is going to be represented the institutional structure for property rights in
Albania, in order to have a more clear view as to whom are we referring when coming to the
parties responsible for the immovable property market in Albania. [12]
Table 1 Institutional structure for immovable property in Albania
It is required a comprehensive and holistic range of interventions in different aspects like the
policy, legal and regulatory, and institutional level.

According to IPRO improvements, most of the issues are already addressed in different or
various strategies implemented: the training strategies, modernization etc.
The Albanian government should define the oversight authority for property issue to bring
together technical specifications for institutions or agencies that maintain and in the same
time generate and use properly the related data. [18]
There are many debates of how the law should finally resolve this problem but no solution is
founded yet. Even though the Government of Albanian system has applied different reforms
of immovable property rights, it still continues to have negative effects on business and
economic environment. The government, according to the Law for the Immovable Property
number 7501 date 19.7.1991 made possible for the people to regain their properties in
categories such as agricultural fields, service buildings, housing properties and lands. But is
everything solved with this law? No it isn’t, because not all the properties have been assigned
to their right owners. This has happened for many reasons. We can mention a few of them:
 Missing the right documentation
 False documentation (for personal interest)
 Selling the same property to different buyers (It’s a real challenge for the authorities
facing many difficulties during their work in giving undeniable answers on who really
owns what.)
 Administrative problems
Property rights issues in Albania are still a major concern regarding the general development
of the Albanian economy. The Albanian judicial authorities are still working hard to solve
many cases of land property considering the increasing number of such cases. [22]
Analysis of immovable property market in Albania
In order to profit from a just and sustainable property system, it is important to have a viable
formula for a socially equal distribution of immovable property. It is needed a combined
system of alternate forms of property and governance to diminish the gap between the “right
to acquire”, which is easy implemented by those who understand the legal system and have
enough resources to exercise those rights and those who cannot afford these services. It is
important to have an efficient property rights system since it serves different purposes: the
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first main goal of the property law is to enable the circulation of goods. The relationship
between a person who owns a property or an object and this object is designed to be
transferred, an attribute of the property right. This distinct feature of property law generates a
particular demand for marketability. Property rights are e key part of the economy of a
country thus its study is important to generate and implement models that will provide
benefits to the economy of a country.
Main problems of property rights in Albania

One of the main reasons that effected the decision to analyze the property rights in Albania
was the significant problem that has caused to the country. Ownership is of a major concern
of the Albanian economy. A more detailed description of the main problems regarding the
topic will be provided. As the most visible one, problems have been raised in the business
and economic market. Albania is an in developing country and the economy is not
functioning well enough. [19] The bad functioning of this area is important and concerns
more than just the government, but also the people and the society. Property rights have been
considered as an incentive in increasing investments and economic growth. The absence of
such an efficient mechanism leads towards low investments, which affect the overall
economy. Property illegally built or yet not legalized is not considered part of the formal
market due to unclear legal status. Authorities still face difficulties in answering questions
relating to whom ownership belongs. These properties can then not be used neither to be sold
nor bought, limiting their contribution to investments possibilities and economic growth.
Difficulties faced by investors are mirrored in the economic development of the country. [19]
Their unclear status is a source for conflicts between presumed owners and complicates the
work of state authorities. These conflicts worsen the relationship between people and make
them feel unsafe about their own properties.
The business environment of Albania is also effected from the slow and ineffective
bureaucratic procedures for registering property. Market agents working on the real estate
sector as well face hurdles from this not working mechanism. Their productivity is lowered,
thus making it harder for them to do their job.
Despite the real estate sector, another significant sector of Albanian economy is the
agricultural sector that accounts for 35% of GDP and 40% of total employment. [16]
35%
Agricultural
sector of
total GDP
Due to lack of working property mechanism and land conflicts there is an important problem
in assigning land ownership to secure land tenure. There is still a continuous conflict between
the former owners and the currant occupants. The absence of a comprehensive framework has
made specifically difficult for poor people to access the land market. Considering that the
offices are mostly inside the city and the bureaucratic procedures are associated by high
transaction costs, notary fees, long queues and high financial costs, people struggle to initiate
the necessary procedures to claim their ownership. A not efficient land registration system
becomes the source for many problems effecting land market. [17] More than 14% of
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Albanian’s land does not have documented ownership or is a subject of an ownership claim
and is considered as restricted land. Not having clear land ownership rights diminishes its
possibilities to be included in commercial transactions, which negatively affects the sector of
agriculture and total employment as well. The slow process of assigning ownership and
compensation has created an unsecure tenure and robust land market. Just like immovable
properties cannot be used, neither sold nor bought, the same thing happens with land, thus the
rural parts of the country remain undeveloped and affect the whole country and society.
Despite the problems with assigning ownership, there is a major problem regarding the
compensation as well. Compensation is an important point in the well-functioning of this
market. Not having a predefined budget, the ownership register that guarantees property
rights implementation, legalized informal objects and full privatization of state objects,
makes it even harder to start the compensation procedure. [20] Not having a standard
compensation system and failing to set such efficient program has caused the society to
disrupt and hinder the economic development.
Another important aim of Albania is also its recognition as an EU country and becoming part
of the European Union. [6] Not properly enforcing property rights has potentially damaged
the Albanian’s EU integration prospects. One of the most important reforms discussed in the
meeting of High Level Dialogue is clarity of property rights. Cases regarding property rights
have been sent form people to the European Court of Human Rights. [2] These problems
have been considered as weaknesses in the main criteria for accession to the EU which are:
“Protection of human rights, the rule of law, and the functioning of a market economy able to
withstand competitive pressures in the European internal market”. [8] The Head of the EU
Delegation to Albania, Ambassador Ettore Sequi has suggested the need forimprovement and
enforcement of property rights mechanism, focusing on clarifying the inspections on IPR -
"An effective system of Intellectual Property Rights
(IPR) protection and their enforcement play a key role in supporting innovation, stimulating
investments and economic growth and therefore should be strengthened in Albania´s
domestic agenda".
Main causes of problems in immovable property

In order to be able to find solutions to these problems and suggest the best possible
opportunities it is important to have a clear view of what actually is going wrong and also to
learn and implement successful methods from other countries, which have an efficient
immovable property market. Firstly, it is going to be clearly pointed-out the causes that have
caused the malfunction of the immovable property market in Albania and further suggest
some solutions of how to direct this market to work in the right direction.
The impact of corruption on immovable properties
Where law is not respected, not implemented, or truncated implemented, the corruption
begins to arise. [10] The existence of it in every country of the world, but mostly in
developing countries such as Albania and in those, which are in transition, the phenomenon
of corruption is more developed and more widespread.
Albania has gone through a significant transition over the past two decades especially related
to land reform and land administration and corruption has been accompanying this transition
over the years.
From many years of experience in combating corruption and in the promotion of
transparency in decision-making, it is understood that the processes related to the right of
property, create a suitable environment for corruption’s birth. During the years 2011-2012,
Transparency International Albania has treated a number of issues presented by citizens, who
have essentially the property rights. What Transparency International Albania has done with
the support of European Union, is related to the “Advocacy and Legal Advice Centre”
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project. So definitely corruption has a huge impact in alienation and falsification of property
documents, which belong to legal owners. Further that has led to an increase of conflicts of
interest, criminal events etc. [11]
The phenomenon of corruption had also affected courts in giving unjustly and illegal
decisions. As a consequence, a lack of trust is created in all the levels of courts (First Instance
Court, Appeal Court and High Court). Moreover, the courts by not being successful in
resolving property disputes have damaged Albanian’s EU integration prospects. To sum up
there is a lack of trust climate against all the law enforcement structures and state authorities
whose duty is to deal with these issues.
The Anti-corruption Unit and the Internal Administrative Control under the Council of
Ministers reports that 70% of the complaints by the Agency for the Legalization,
Urbanization and Integration of Informal Areas/Constructions (ALUIZNI) and the IPRO,
Agency for Immovable Property Restitution and Compensation (AKKP), were related to
immovable property issues. Even though the government of Albania has attempted a lot to
fight corruption and the perception of corruption under business registration, the issues of
immovable property need more focus. If there is a failure to do so, then it will cause lack of
trust in the whole system.
Agrarian reform
Another cause of nowadays property problems is also the agrarian reform.[5] Over the years
there were different reforms that were undertaken by the government on purpose to solve the
problem of ownership of immovable properties but with no luck. The table below
summarizes the characteristics of the reforms that were undertaken since 1930.
Terms
reforms
of land 1930 1946 1991
Objective number
Reduction
people
of landless
of the Distributing
toresidents
all ruralland Distributing equally in quantity
and quality land for all
Surface affected 2.12% 39.44% 95.7%

Rights
new land
given
owners
to Full
transfer
alienation
rightsand
for Usufructs Full rights for Cooperatives Land
Usufructs for State Farms till
1995
Land structure
emerged Big,
small
medium
farmsand Medium
farms
and small Small farms
Table 2 The land reform in Albania

The agrarian reform in Albania included free distribution of land to rural households and the
complete breakup of the former collective and state farms. The choice to apply this reform
came from the interaction between various factors such as: political, economic, social and
institutional ones. Albania’s political and economic transformation started in 1991. After
World War 2, the communist party gained the power in Albania. The main aim of the party
was to fight against private property and also destroy at any costs bays, aghast, and traders or
ex functionaries of the previous regime. After redistribution only 3% of the land remained
privately owned. In order to expropriate, and sequestrate all their immovable and movable
assets, the communist party used a serious of laws. What is worth to be mentioned during this
period is that the agrarian reform means that agricultural land was taken from owners and
was given to peasantry. Albania is the only country which distributed all collective farm land
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among the rural population. So the main purpose was to give the land to those who had
worked on it. Obviously this is considered the first “stroke” that private property took.
Since the fall of communism in 1991, the country made significant progress toward
establishing a multi-party democracy and has implemented numerous economic reforms.
With the advent of democracy, Albania had a fast internal migration. This demographic shift
was made from rural areas to per urban ones in search of better life and economic
opportunities. That phenomenon led to land occupations without legal authorization. This
situation was mainly concentrated in the periphery of the capital. These demographic
movements created the ones considered as ‘informal’ urban areas. Unfortunately a
considerable share of Albanian immovable properties comprise in unregistered and
unauthorized properties. [22]
Also this reform became a source for many intense political debates, which emerged into
conflicts between political demands of interests of different groups.
The agrarian reform caused damages in the immovable property market in Albania by
producing misallocations of resources and of large inefficiencies.
Immovable property Rights Reforms

The protection of immovable property rights has become a political issue, including the
involvement of many stakeholders with often contradictory interests. Some of the legal and
institutional reforms after 1990 in developing property laws failed to achieve their main
purpose and most of urban claimants started to fall on the informal economy and used other
methods of documentation and exchange of the ownership. [18] In this light, was established
also the Immovable Property Registration Office (IPRO), as the managing authority in charge
to administer the process. A bad indication in this period was the law 7501. At first sight this
law seems like it has made the right distribution of the agricultural land. Unfortunately, it just
brought more problems because of the simple fact that the land was not given back to the
legal owner or to his ancestors whose land was sequestrated from the agrarian reform. In
other words, although Law 7501 secured initial ownership of land, it did not offer security in
the transaction of land.
In many territories of Albania were built different buildings like palaces, factories, etc. These
objects belong to the system of that time. But not in all the cases the ex-owners of land would
be the one to privatize these objects. This situation finds its reflection in the fact that the
International Court of Strasburg has proved the government of the Republic of Albania as
guilty. The International Court of Strasburg has taken decisions in favor of the legitimate
owners by forcing the Albanian state to pay considerable sums. [17] Although the Albanian
governments in power have been trying through different reforms to fix the problem,
immovable property rights remain unsecure and represent a challenge for the ones
responsible.
To sum up, all the major problems that Albania is facing nowadays, related to properties,
have their roots in the past. Corruption, different wrong reforms and inappropriate
implementation of the law, are the main causes of these problems, which are considered as
big ‘strokes’ on property issues, and eventually the only thing that they left are big traces. In
the following table is given a summary of all the reforms that have been implemented by the
Albanian government since 1990.
Law No. 7501 of July 19, 1991, On Land, under which agricultural lands were divided
among those working them.
Law No. 7652 of December 23, 1992, On Privatization of State-Owned Housing
transferred to occupier’s ownership of their homes.
Law No. 7698 of April 15, 1993, On Restitution and Compensation to Former
Property Owners was the basis for further privatization in urban areas.
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Civil law reform, particularly under the Civil Code of 1994, provided a legal framework for
private property transactions.
Law No. 7843 of July 13, 1994, On the Immovable Property Registry System.
Constitution adopted, including provisions guaranteeing immovable property rights.
Law No. 9404 of October 29, 2004, On Legalization and Urban Planning of
Informal Zones attempts to regularize illegal buildings based on a self-declaration process
managed by local authorities.
Law No. 9235 of July 29, 2004, On Restitution and Compensation of Property replaces
the 1993 law and introduces compensation at current market value.
Law No. 9482 of April 3, 2006, On Legalization, Urban Planning and Integration of
Illegal Constructions replaces the 2004 law and attempts to regularize illegal settlement
and buildings constructed before May 2006, subject to a self-declaration process managed
by the central Agency for the Legalization, Urban Planning, and Integration of Informal
Areas/Constructions (ALUIZNI).
Law No. 9780 of July 16, 2007, On Construction Inspection delegates much of the
responsibility for dealing with illegal buildings to the local government.
Law No.10119 of April 23, 2009, On Territorial Planning introduces modern concepts of
urban planning and control. The secondary regulations were adopted in June 2011.
Amendments to the Law on Legalization, adopted in October 2009, give legalization
applicants the option of paying for up to 50 percent of the value of the property with
otherwise worthless privatization vouchers from the 1990s.
Table 3 Chronology of Immovable property Rights Reforms
Methods and applications used nowadays

Over the years Albania has seen that problems in this specific market have caused problems
in the overall economy. That is why different attempts have been made and with the help of
new technological advances there may be some of them who may succeed in solving or at
least improve the situation. [9]
In 2010 in Albania was introduced a new strategy to enforce the immovable and intellectual
property rights with a time frame of five years. Albania should work towards an environment
in which property rights are protected. In order to increase social progress and
competitiveness of the country from the implementation of the strategy, it is needed
intellectual capital and coherent frameworks. The implementation of the strategy would
provide optimal conditions for foreign investments, European integration, and employment
possibilities and improve socially different aspects. The main key actions to be achieved from
the implementation of this strategy would be:
 Agreements of the Immovable Property Rights Office to guarantee information
exchange and training
 Easy and simple process for the registration of the immovable properties
 To decrease the number of properties that is out of the market of the immovable
properties and thus cannot be used and profit from them cannot be obtained
Later on 2012 the parliament approved the new Albanian law on Registration of Immovable
Property and it entered into force on 28 April on the same year. The whole process of
registration together with the amendments on notary services was amended. The idea and the
simplicity behind the new law was the fact that all the legal framework and transactions
regarding the registration of property would be done in a "one stop shop". What means "one
stop shop"?
All the process should be done using a notary deed that is able to access the "Online
Immovable Property Register" and verify the immovable property rights and status of the
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immovable property in order to avoid any misunderstanding and provide secure and exact
information on the client so he or she would know how to proceed further. [1]
A registration which is not done by the notary with the Immovable Property Register is
suspicious and may not be recognized by the office of the registration.
However, difficulties were note with the secondary legislation regulating different aspects
related to the implementation of the new law, which were not been yet adopted. Actually,
there were two draft decisions of the Council of the Ministers and an Instruction of the
Minister of Justice are under discussion, but were not approved.
The digitalization of the online Immovable Property Register and the access to the Register
was a key point of the law since it would solve many problems.
It was expected that the entire process of digitalization of the Immovable Property Registry
and notaries' offices would be completed by the end of 2012 but unfortunately until now, no
such thing has happened.
As we have seen the challenges that the immovable property market has are endless, but so
are as well the opportunities and possibilities to improve its functionality. Considering from
1990 until today it is clear that a lot of improvements have taken place. Still nowadays is
missing a well-implemented digitalized system for the registration of the immovable property
markets. All the reforms that have been made have brought us to the system that we use
nowadays to register immovable properties, whose time and cost involved are mentioned
below.
1. Firstly the seller obtains ownership title certificate that is done in the ALBRep - Real
Estate Electronic Database, which is administrated by the Immovable Properties
Registration Office. Both, seller and buyer should meet in a notary public to draft and
sign the contract. At this point, the seller should provide the ownership, which the
notary public verifies through the real estate electronic database before the parties
sign the contract. Once everything is ok, the parties may sign and continue with the
process of the ownership transfer. This procedure lasts circa eight calendar days and
the costs associated sum up to a total of basic fee 4120 ALL+ 1500 ALL property
certificate/attestation + 1000 ALL copy of the property records+ 1000 ALL copy of
the registration map fragment + 200 ALL notary service.
2. After the buyer has signed the contract, he or she verifies the status of the property at
the Real Estate Property Registry, which should be done at the electronic register on
immovable properties. The applicant, in our case the buyer, shall obtain the user name
and password, to be used online to follow up on the status of the application. The
notary public also can obtain such certificate on Buyer's behalf. This procedure may
last three calendar days and the costs are: 700 ALL tariff +50 ALL service fee.
3. Another important step is the comparison of property map with the real situation and
position of the land performed by the Private authorized expert (topographer). This
step is mostly done to avoid any dispute with third parties. The cost can be agreed
upon by the buyer and seller upon which party will cover this expense. But the
topographer fees is estimated from 15,000 ALL to 20,000 ALL. Usually this process
lasts one to three days.
4. Following, the notarization of sale and purchase contract by the notary public is
needed and is done by the Notary Office. This process can be done approximately in
one day and the costs associated to it are calculated by the notary office. To execute
the sale-purchase contract the seller submits to the notary public:
a. Ownership Certificate or the Ownership Attestation
b. The updated Property Records, issued not later than 72 hours before the
contract signature
c. Property Map
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5. Another process is that of the payment of taxes (local and income tax). On
transactions with immovable property the VAT tax is not applied. Both, fee and tax
are payable at any second-tier bank located in Albania. The payment can be done
within one day and the costs are calculated as below:
a. Local Tax for Tirana municipality: 2,000 ALL per square meter
b. Income tax for a company: 15% as income tax (not included in calculation)
c. Transfer tax: 2%
6. And the last, but not the least, the registration at the Real Estate Registry Office,
performed by the Immovable Properties Registration Office. The notary public
registers the transferred property at the Immovable Properties Registration Office.
There is a general term of thirty days, to set up for all the registrations or other
procedures carried out by The Immovable Property Registration Office (IPRO). The
final step may last ten days and the costs are: 7,120.00 ALL + 3,500 ALL registration
fee + 1,500 ALL for the Ownership certificate + 1,000 ALL for the property records +
1,000 ALL for the map. The buyer should provide following documentation
a. Original copy of the Ownership Certificate or the Ownership Attestation
b. The updated Property Records issued no later than 72 hours before the
contract is signed
c. Property Map
d. The receipt of the payment of the fee for transferring the ownership title
The procedure for doing the registration of the immovable property rights is a little complex
and imagine going through all these steps without having enough information. Immovable
properties are an important aspect of the life of every individual but for the society as well.
Having clear and well-defined immovable property ownership increases the security of the
people and improves the overall economic performance of the country.
That is why is such important to try and solve the problems that this market faces. World
Bank has also been a very supportive investor in improving the immovable property market
in Albania. The biggest and busiest Immovable Property Registration Office located in Tirana
was renovated by the World Bank supported project. The project by the World Bank has
enabled the property registration staff to gain almost immediate access to the documents they
need to process client’s requests for ownership certificates and other titles. Also the
information is displayed in public areas around the country for 45 days, to allow owners and
others to comment, or contest. Afterwards, it is sent to the local land registration offices, and
becomes official. Millions of land records which were only in paper have been digitized and
are part of a centralized information system used in nine offices in the country. Hopefully this
system will be implemented all over the country to make the market as efficient as possible.
RECOMMENDATIONS AND SOLUTIONS

To solve many of the problems that are related with the immovable property ownership and
also with the land administration it requires political will, because the problems related to
ownership are the most common source of higher risk of corruption. In this way it is required
a comprehensive and holistic range of interventions in different aspects like the policy, legal
and regulatory, and institutional level. The political policy is primarily needed for the
improvement of transparency, efficiency and reliability of the Immovable Property
Registration Office and also for the issues concerning the privatization programs, especially
with the compensation. [1]
The final solution for this institutional issue and also for the development of the land strategy
probably can take some time. But reviewing the situation we can come up with some
recommendations. According to IPRO improvements, most of the issues that are mentioned
above are already addressed in different or various strategies implemented. Firstly the
402
training strategies and then followed by modernization added to the business plan. These
strategies simply need a very serious commitment and leaders to be effective and produce the
desired results.
There is going to be represented a list of recommendations for the most important institutions
of the country regarding the solution of the property rights problem. And it starts with the
most important one: the Government of Albania.
The government firstly should develop the National land strategy or better said the Policy.
The Albanian government should define the oversight authority for property issue to bring
together technical specifications for institutions or agencies that maintain and in the same
time generate and use properly the related data. In addition to the two first recommendations
it is said that making decisions on the national standard for the technological platform helps
IPRO to develop the IT system through the technical working group.
Not only the government but also the Ministry of Justice should help by approving the IPRO
operations without any further delay. Taking our concentration to the Ministry of Justice,
there should be some serious discussion regarding law 7843 amendments on the legislative
agenda. It is needed a lot of more closely work to these amendments to fix issues related
with: institutional responsibility, technological or IT issues that have to do mostly with the
digital data. These amendments are also needed for the first registration provisions and for
issues related with the Business Plan implementation. Another step that the Ministry should
take is to engage the High Council of Justice with the most important and problematic court
cases.
Now, continuing the discussion to the most important institution that is directly related with
our subject: the Immovable Property Registration Office. [9] IPRO should be more focused in
improving the costumer services and professionalism of the staff. They should implement as
soon as possible a Training Strategy that includes hiring trained managers and commit to
have a staff that has complete training courts by the end of the year. Reviewing how staff is
recruited and move to an open and competitive recruitment are necessary. Part of their
strategy must be also developing qualification standards through a certification process for
the registrar and other key positions like lawyers and geodetic engineers. They must improve
the code of Ethics and allow credit cards payments in their own offices like in other countries
in order to make the process more simple and thus increasing the efficiency and effectivity of
the market.
The Immovable Property office should give a high priority to the data management
improvement. The implementation of a modern strategy is highly suggested. They should
also improve the IT or technological problems by automation of the processes and by creating
direct communication with different institutions such as the Prosecutor’s Office and Courts.
Another proposition would be engaging with the Ministry of Justice in approving and
implementing the business plan that must have in focus the improving of service delivery and
move toward full or partial self-financing. The registration office can improve
communications with the government to emphasize the importance of the IPRO functions in
order to help the officials to understand the needs to register the property data. Another
problem that must be solved and directed as soon as possible is the information accessibility.
In improving the communication IPRO should have in focus the costumers. With costumers
we include citizens, local government, land market professionals and other types. Information
regarding the immovable properties should be delivered as soon as possible and in the most
efficient way.
Nowadays we are facing the problems with the properties mostly in urban areas and
coastline, meaning that the registration of such areas should be finalized as soon as possible.
403
And the last but not the least recommendation for IPRO is to increase the transparency of
information, making this information accessible by everyone 24/7 through the usage of
Internet or other public telecommunication systems.
Immovable property rights are one of the highest priority issues for Albanian society
nowadays and finding a solution requires a lot of effort. Effort from all the subjects related to
the topic: society, the people, the Government of Albania and all the tools that can help such
as media and telecommunication means, is required to delete all the problems of the property
rights.
CONCLUSION AND FUTURE WORK

A country that has property rights clearly defined and an effective mechanism that deals with
these rights is subject to a well-functioning market economy. Property rights are one of the
most delicate cases of Albania nowadays. More than 40% of the claims from people are about
ownership. Even though different attempts at reform have been undertaken, property rights
remain today unsecure and propose a challenge in Albanian’s governance.
The absence of an efficient mechanism that regulates ownership has had negative effects on
both business and economic market. Having to deal with ineffective bureaucratic procedures
leads towards the production of a chaotic system, whose signs we are suffering now.
Challenges in property rights will freeze the object until working effectively. This freezing
limits the usage of this informal property, which leads to conflicts between people claiming
ownership, lowers chances of investment, eliminates any chances of the property being
bought / sold in the real estate market, complicates the work of the state authorities and effect
the overall economic performance of the country.
In attempting to start the procedure to regulate the ownership people face transactions costs,
lose precious time, face bureaucratic hurdles and still it just remains an attempt. There are
obvious obstacles in assigning ownership and compensation.
For Albanian economy, the agricultural sector is one of the most significant ones, covering
35% of GDP. This sector is also affected, causing burdens in assigning land ownership.
Property rights have been a struggle for Albania because their ineffective and inefficient
implementations have damaged the Albanian – EU integration prospects.
•Corruption is a decease, which with just a small incentive it spreads widely in no time.
Corruption has a huge impact in alienation and falsification of property documents, which
belong to legal owners damaging the property rights mechanism in Albania.
The agrarian reform means that agricultural land was taken from owners and was given to
peasantry. It was considered the first “stroke” that private property took.
Law 7502 brought even more problems because of the simple fact that the land was not given
back to the legal owner or to his ancestors whose land was sequestrated from the agrarian
reform. Part of the blame goes to the Government of Albania for not properly registration of
properties.
It is required a comprehensive and holistic range of interventions in different aspects like the
policy, legal and regulatory, and institutional level.
According to IPRO improvements, most of the issues are already addressed in different or
various strategies implemented: the training strategies, modernization etc.
Our government should define the oversight authority for property issue to bring together
technical specifications for institutions or agencies that maintain and in the same time
generate and use properly the related data.
•The Ministry of Justice should help by approving the IPRO operations without any further
delay. The Ministry should engage the High Council of Justice with the most important and
problematic court cases. IPRO should be more focused in improving the costumer services
404
and professionalism of the staff and increase the transparency of information, making this
information accessible by everyone 24/7.
With the help of the government and responsible institutions for the registration of
immovable property rights, it may be almost perfectly improved the situation. As much as the
strategies, new laws and project from the World Bank have contributed, as much more can
the technology and new system offer to the immovable property market. It is important the
corporation of government, IPRO and people of the society to be able to provide an efficient,
secure and profitable immovable property market in Albania.
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Countries: Confluence of technological, institutional and organizational requirements in the
Addis Ababa Project.
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REFORM.
[6] DIZDARI-ZENELI, D. (2013). EU assists Albania to enforce Industrial Property Rights
and to promote economic growth. Tirane.
[7] European Commisiona. (October 2014). Albania Progress Report
[8]Füle, Š. (2014). EU integration – the ball is in Albania's court.
[9]Interview With Vladimir Nika: Enforcing IP Rights In Albania 2010 - 2015. (2012, April
11).
[10]Jazaj, S. (2012). PRELIMINARY STUDY ON RISKS OF CORRUPTION IN THE
ALBANIAN SYSTEM FOR REGISTRATION OF IMMOVABLE PROPERTY.
[11]Kathrine, M., Kelm, M., & Jazaj, S. (2011). RISKASSESSMENT: CORRUPTION IN
THE ALBANIAN SYSTEM FOR THE REGISTRATION OF IMMOVABLE PROPERTY.
[12]Meksi, E., & Pasha, A. (n.d.). When is Transition Over? Theory versus Reality in
Albanian Case.
[13]Menéndez, U. (2008). Issues In Ownership Of Real Estate SPAIN.
[14]O’Driscoll Jr., G., & Hoskins, L. (2003, August 7). Property Rights The Key to
Economic Development.
[15]Rama, A. (2013). ProPerty rights issues in AlbAniA: ChAllenges And PersPeCtives.
Tirane: Friedrich-Ebert-Stiftung.
[16]Registering Property in Albania - Doing Business - World Bank Group. (2014, June 1).
[17]Rontoyanni, C. (2012). Governance in the Protection of Immovable Property Rights in
Albania: A Continuing Challenge (Second ed.).
[18]Sabates-Wheeler, R., & Waite, M. (2003). ALBANIA COUNTRY BRIEF: PROPERTY
RIGHTS AND LAND MARKETS.
[19]TRANSPARENCA DHE PRONA E DREJTE DHE DEYRIM KUSHTETUES. (n.d.).
2013: Financed by EU.
[20]USAID. (2011). ALBANIA-PROPERTY RIGHTS AND RESOURCE GOVERNANCE.
USAID COUNTRY PROFILE.
[21]Wallis, D., & Allanson, S. (2011). European Property Rights and Wrongs.
[22]Zhllima, E. (n.d.). RESEARCH REPORT "Property rights security and its implications
for rural development in Albania"
405
Nafi Xhafa
Has completed the bachelor studies in 2014, at Epoka University and received a degree in
Business Informatics Program. Currently, is a MSc. Student in Computer Engineering
Department at Epoka University, expected to graduate in July 2016. After the completion of
undergraduate studies was offered the position of research/teaching assistant in the
department of Business Administration, at Epoka University and has been working there
from August 2014 and ongoing.
Marsona Bezhani
Has completed the bachelor studies in 2014, at Epoka University and received a degree in
Business Informatics Program. In July 2015, finished the double major of Banking and
Finance and currently is a second year student in the MSc. In Computer Engineering
Department at Epoka University. Presently, working on the graduate project for the Discover
Vodafone Program, in Vodafone Albania.
406
Measuring Central Bank Independence
Case of Albania
Jonida Balliu
jballiu@epoka.edu.al
Epoka University
Abstract
The aim of this paper is to define independence of central banks and to examine its relation to
other macroeconomic variables and measurements that are used in that process. Central bank
independence (CBI) refers to the freedom of monetary policymakers from government
influence in the conduct of policy. In order to accomplish the main goal that is price stability,
it is crucial for a central bank to be connected to government as little as possible. Many
countries have implemented reforms considered to grant their monetary authorities greater
independence from direct political influence. In the most of modern economies is seen a trend
of increasing role of central bank’s independence. It is argued that an independent central
bank brings economy to a higher level, is more credible, and the higher degree of the
independence facilitates central bank to identify signal of financial problems and aware
financial markets.
A well-known outcome is that developed countries have established independent central
banks. These countries proved to be successful in achieving price stability. Based on this,
developing countries as well as Eastern and Central European Countries in their transition
period have attempted to establish independent central banks. In Albania the political
independence of Bank of Albania is relatively independent. In other words, Bank of Albania
has been granted the necessary legal space to operate as an independent bank.
Keywords: central bank independence (CBI), monetary policy
The 6th Multidisciplinary Academic Conference in Prague 2016, Czech Republic (The
6th MAC 2016)
Introduction
Central bank independence is an essential component of modern monetary systems. It is a
very important issue, especially in times of global crises. Also is very crucial for a central
bank to be connected to government as little as possible. However governments usually have
a certain influence over central banks, even when banks declare to be independent. There are
some regional factors that initiated the independence of central banks and contributed to the
increase of it. Moreover, high central bank independence (CBI) came as e logical solution;
the former socialist countries tentative to implement free market rules, most often copied the
best western practices. The central bank of a country should be independent. The literature
that addresses the issue of the independence of the central bank is quite wide and it provides a
407
set of arguments, for or against independence. Different researchers have build indicators to
measure central bank’s independence and conduct comparative studies in different countries
by providing a rank according to their degree of independence.
There is, however, one well-known outcome: Typically, developed countries have
established independent central banks. These countries proved to be successful in achieving
price stability. Based on this, developing countries as well as Eastern and Central European
Countries in their transition period have attempted to establish independent central banks. At
least, the new central banking laws have been based on the charters of Western central banks.
In other words, the first step was taken through granting a substantial legal independence.
“Why do we need a central bank?”, “Is it wise to establish an independent central bank?” and
other suchlike questions have already been addressed by many researchers and academics. To
be able to answer these questions, we examine the provisions of the central bank law;
compare central bank of Albania with central banks in other countries; and measure Bank of
Albania independence based on indices developed for this purpose. Although we should be
objective in interpreting the legal provisions, we found it difficult to ignore actual experience
in enforcing those provisions. Measuring central bank independence is not an easy task due to
differences in central bank laws of different countries and changes that have occurred in the
central bank law of our country during the last seven years, which has led to a change in the
behavior of the central bank. Considering that Bank of Albania is a newly created central
bank, the probability that casual phenomena will affect its behavior is higher, thereby making
it difficult to predict the future of the bank.
Literature Review
Different arguments are presented in favor of the independence of central banks. The main
and well-known reason is that, the more independent central banks are the lower levels of
inflation: (Alessina & Summers, May 1993). That statement is confirmed by many
researchers who also tried to find out the correlation between the independence of central
banks and the lower level of inflation. In supporting this idea, several authors mention the
well-known practical example of the central bank of Germany. “Monetary policy during the
last one hundred years in Germany gives an excellent example to evaluate the empirical
evidences in using rules and central bank independence to formulate monetary policy”
(Eschweiler & Michael D. Bordo). The majority of the authors concluded that central bank of
Germany is the bank with the highest level of independence. The power of monetary policy
which affects the level of inflation must be delegated to an agent (institution), which weighs
price stability higher than social interests and long-term solutions higher than short-term
benefits. It means that politicians agree to delegate to other, nonpolitical individuals
(technocrats) the authority to formulate monetary policy. By doing so, the former voluntarily
limit their room to handle in the area of monetary policy. A central bank, as an institution,
seems to be more conservative and far-sighted than the politicians. As such, the incentive to
delegate the authority over monetary policy to central bank is to ensure price stability. By
doing so, the circumstances under which this primary objective is sacrificed in favor of other,
potentially conflicting, objectives (such as economic growth, higher employment) in the
short-term are reduced.
What is the definition of an independent central bank? There is no unique definition of the
term “central bank independence”.
A material in Monetary and Exchange Affairs Department in IMF stated that there are
necessary three preconditions for a real autonomy of the central bank.
408
First, an autonomous central bank should have a clearly defined objective, namely price
stability. Second, the central bank should have both sufficient authority (de jure and de facto)
and adequate instruments to manage liquidity in the banking system to meet its primary
responsibility. Finally, a central bank’s operations should be transparent, and information
should be disclosed on a regular basis. Then the central bank can be held responsible for its
monetary policy and inflation performance”: (International Monetary Fund, February 1998).
Obviously, as it is explained in the above paragraph, a central bank can be considered as
independent if it meets these three conditions. Friedman suggests an “underlying meaning”
for central bank independence: “A central bank should be an independent government
branch, and should coordinate with legislative, executive and legal branches” taken by:
(Friedman M., September 1994).
Thus, it is empowered the same as the legal power. It will comply with laws approved by the
government and its operations can be changed by the government only if the law (or its
charter) changes”: (Wood, Mills, & Capie, January 1993).
Alan S. Blinder says: “In my opinion, central bank independence means two things: first, a
central bank is free to decide how it will pursue its objectives and, second, it is very difficult
for any government branches to reverse the decisions of central bank”: (S.Blinder, 1998).
The definition consists of two components of central bank independence. Rather than
focusing on what or who a central bank is independent from, the author defines the level from
which the independence is to be considered. Obviously, this definition provides two elements
of the independence of central bank. It is said that the central bank may not choose itself the
objectives, but it can decides freely how will achieve these objectives. The other element that
has to do with the independence of central bank is the irreversibility of decisions, means that
a central bank to be independent should has the authority to implement the decisions it takes,
in order to reach the objectives.
The bank of England was founded in 1694 in response to the most recent of a long line of
fiscal difficulties experienced by English Kings. Charles II had spent and borrowed heavily,
and defaulted on loans by his bankers. The king’s credit was left in ruins. His successor,
William III schemed to raise £1,200,000. The government accomplished this in a clause of
the Tonnage Act of 1694 by creating the Governor and Company of the Bank of England.
That sum was raised as capital and immediately lent to the government: (Fuhrer).
In turn, the Bank was permitted to issue notes in the same amount. As Smith summarizes;
“the history of the bank was a series of exchanges of favors between a needy Government
and an accommodating corporation.” The studies emphasize that independent central banks
usually are more successful in getting the goal of price stability than central banks that are
under the control of government. Generally the government and the treasury may have
different goals from those that have the central bank. Government policymakers may be
focused to improve economic growth in the short-term without taking in consideration the
long-term inflationary costs. Whiles, the treasury’s primary goal generally is to minimize the
cost of financing government debts. Lower interest rates on treasury debts immediately
reduce the cost of borrowing.
The main arguments in favor of central bank independence
 The more independent the central bank is, the better it can conduct a monetary policy
aimed at long-term objectives such as price stability. Currently, in the world there is a
clear trend for giving greater powers to the central banks, even in countries where its
independence has been limited, such as Spain, Italy, United Kingdom, France,
Belgium etc. Studies have shown clearly a strong link between high levels of central
bank independence and low level of inflation.
409
 If the central bank is under the government will exert pressure possible to finance
large budget deficits. This pressure can only be faced by an independent central bank.
 As the monetary policy has a great importance, cannot be left to politicians who are
not experts in the field.
Arguments against the independence of central bank
 Leaders of the central bank that compile the monetary policy are not elected in a
democratic way and therefore cannot be dismissed when they do not perform well
their duty.
 The argument of pursuing a long-term politic only by independent state agency as the
central bank is not entirely accurate, since the lawmakers aim is also to pursue long
term policies such as about foreign policy.
 Monetary policy should be controlled by the bodies that are elected through the vote,
which are responsible for the country as a whole. In this context, they can achieve the
coordination of monetary and fiscal policy, as a necessary condition of the rapid
development of economy.
 Central banks have not always acted correctly to avoid negative development that can
be avoided, as was the case with major depression.
Despite these criticisms relative to the independence of the central bank, there is a broad
consensus in favor increasing its independence and, currently, in different countries is clearly
displayed a trend of giving greater autonomy to central banks, and taking independence as
their right to choose own ways to achieve the ultimate goals that are defined by law from
political authorities. Generally the arguments are in favor of the independence for the central
bank as a solution in times of inconsistencies and deviations inflationary for the supervision
of tightening monetary policy. Empirical results have shown that the high independence of
the central bank low inflation in industrialized and developing countries, while the effects of
central bank independence in economic growth are not know yet.
Bank of Albania’s position to main recommendations on central bank independence

The Law in Albanian Bank, accepted in 1997, provides that: “Bank of Albania is liable for
formulating, adopting and implementing the monetary policy of Albania. Further that Law
stated that the Central Bank of Albania should be independent from the government in the
activity of investigating its objectives and the performance of its responsibilities. Any person
ought to respect the autonomy of the Bank of Albania. No one should tend to influence any
member of a decision making body of the Bank of Albania. Considering that law, we found
that the independence conferred to the central bank is higher than provided for in the
constitution: (Maliszewski, December 1997).
The final grants only independence in implementing monetary policy thus leaving room for
other institutions to step in and assume the responsibility for formulating and approving it, for
example the government may formulate it and the parliament approves it. As a consequence,
the contradiction between the constitution and the law, de facto, exposes the central bank to
the risk of restrictions in its independence.
In compliance with the 1992 law, Bank of Albania had the right and was accountable for
adopting and implementing monetary policy. In compliance with the 1996 law, Bank of
Albania had the right and was accountable for formulating and implementing monetary
410
policy. An additional aspect should be considered, namely “International Monetary Fund
(IMF) authority”, which has a significant bearing on central bank independence, especially on
the legal one. This factor is very important in the case of Albania and we assume the same for
other developing countries or countries in transition, particularly at the very beginning of
transition. The IMF presence, in many cases, “forces” the authorities of a given country to
make certain choices. Usually, countries like Albania have concluded agreements with the
IMF, committing them to meet certain conditions. The IMF presence serves as a mechanism
to smooth institutional conflicts, which may arise, especially between central bank and the
Ministry of Finance. Signing an agreement with the IMF automatically harmonizes the
policies of different institutions merely by the fact that all elements included in the agreement
are consistent with each other.
In the case of Albania, the IMF has always emphasized the need to establish a de juro and de
facto independent central bank. Bank of Albania’s law(s) has been drafted with considerable
International Monetary Fund (IMF) management. Regarding this, monetary policy is actually
formulated by the central bank in cooperation with the government (mainly Ministry of
Finance) and IMF.
Obviously, the political independence of Bank of Albania is relatively considerable (the
numerical values assigned to political index is high). In other words, Bank of Albania has
been granted the necessary legal space to operate as an independent bank. It should be
reminded that the same conclusion is reached after getting the results of the Cukierman
Index: (Cukierman, 1992). It means that in establishing the central bank of Albania and in
approving the respective legislation, the experience of transitional countries was followed:
the legislation was based on the laws (charters) of the developed countries. Bank of Albania’s
position compared to main recommendations on central bank independence. In light of the
results of legal independence indices, Albanian Bank is considered an autonomous central
bank and is listed right after the most independent banks in the world. However, it should be
noted that comparison with Cukierman ranking is not accurate as the laws on Bank of
Albania examined and used here have been approved during the last ten years, while
Cukierman’s ranking was designed in the 1980s. Many things have changed and new
concepts are developed during this time. Yet, Bank of Albania holds a favorable place in the
ranking of fourteen central banks of transition countries, compared on bases of relevant
current laws.
Nevertheless, de jure independence does not imply de facto independence, especially for
countries like Albania, where, to put it mildly, feelings for law and order are not very strong.
As mentioned above, measuring real independence is much more difficult than measuring
legal independence because of the type of factors that affect real independence. They can be
hardly measured in quantitative terms and furthermore, it is difficult to compare them across
countries. Different countries apply different practices and though it is possible to standardize
their laws, it is nearly impossible to standardize their behavior. Yet, researchers have
developed specific indicators to measure real independence in quantitative terms.
Governor’s turnover rate as a proxy for actual independence

It should be remembered that banks receive the highest recognition as independent banks if
the legal term in office for the governor is at least eight years. In Albania, the legal term in
office is six years based on the 1992 law and seven years based on the 1996 and 1997 laws,
very close to the maximum level. Because of this, this element is assigned a relatively high
value. What is the effective term in office for the Albanian governors?
411
Since end of April 1992, when the central bank law was approved up to now Bank of Albania
(BoA) was headed by five governors, serving with a different term in the office. The average
term in office per governor is 17 months, out of 84 months which is the legal mandate.
Obviously is noted that difference between the legal term and effective term in office is high.
The index is appointed with 0.7 far from the benchmark. Comparing the index with the listing
of Cukierman, BoA stands almost at the bottom of developing countries.
Only central bank of Argentina is behind BoA. We can say that a low turnover rate does not
always mean a high degree of independence. Governor can serve in his office for longer
periods because he exhibits a subservient behavior towards executive government. This
element is not worthy to be reviewed in the case of Albania due to the very large turnover
rate of the governors, which implies that subservient behaviors that may have been observed
served to nothing. The actual independence index measured by the turnover rate of governors
was further developed. It is important to observe whether the change of governors takes place
within six months from elections. If yes, it confirms a relatively low level of central bank
independence. Cukierman and Webb (1995) developed the second indicator based on the fact
that the temptation to change the governor is significantly higher after the political transitions
than in other periods. The time period of six months, during which the political instability of
the governor is higher, is called “political period”: (Cukierman & Webb, 1995)
Political Instability
It is believed that political instability affects central bank independence. Though it is not clear
whether there is a strong correlation between them. It is not transparent whether the high
instability means high or low degree of independence in the central banks, but only it’s
known that there is a correlation. It is argued that the more politically unstable a country is
(more frequent elections and changes in government) the less independent is its central bank
since each group that comes to power tries to appoint its representatives at key positions in
administration. This is more obvious in highly polarized countries. On the other hand, it is
argued that when political forces in power notice that they will lose grounds, they try to
strengthen the independence of state institutions, especially that of central bank so that it
limits the influence of opposition if that one comes to power. Disrespect for the rules of the
political game and frequent changes in powers will lead to political instability, which strongly
affects the central bank independence. Albania has experienced both of the above-mentioned
scenarios that have had an impact on central bank independence. More or less, the situation
has been politically unstable considering four elections and two referendums on Constitution
held in a period of eight years (regular period for two elections to take place). Likewise, when
the political group in power felt that it would soon lose the main recurrent theme of the day
was “rights of institutions and technocrats”, including Bank of Albania. Generally, the
political instability has reduced Albanian central bank independence.
Advisory Function
In some countries, the duties of governor include that of government advisor for the
economy. This allows the governor to address various issues related to employment or fiscal
policies to government, regularly. In Albania, Bank of Albania does not participate actively
in formulating or suggesting policies not related to monetary issues. Although law
acknowledges it as an active advisor for these issues, practically, Bank of Albania does not
412
behave aggressively. A step forward was taken to improve its position and now the governor
participates in the Economic Policies Committee, which is headed by Prime Minister.
Conclusion
The evolution of laws towards independence is more obvious. In 1992, issues related to
exchange policy are merely mentioned, while in 1996 it is clearly stated that exchange policy
is established by Bank of Albania and is executed in cooperation with other state agencies. In
1997, Bank of Albania is empowered with the right to establish the exchange rate regime
(this was previously determined by government).
Actually, Bank of Albania has adopted the floating rate regime. However, it can switch to
another regime if it deems it appropriate. Also, Bank of Albania is in charge of formulating,
adopting and executing the exchange rate policy.
Obviously, the political independence of Bank of Albania is relatively considerable (the
numerical values assigned to political index is high). In other words, Bank of Albania has
been granted the necessary legal space to operate as an independent bank. It should be
reminded that the same conclusion is reached after getting the results of the Cukierman
Index. It means that in establishing the central bank of Albania and in approving the
respective legislation, the experience of transitional countries was followed: the legislation
was based on the laws (charters) of the developed countries.
Biography: Jonida Balliu

I am currently a research assistant in Economics Department at Epoka University. At the
same time, I am pursuing my masters in Banking and Finance, which will be finished by
June, 2016.
Bibliography
Alessina, A., & Summers, L. H. (May 1993). Money, Credit and Banking. 151.
Cukierman, A. (1992). Central Bank Strategy, Credibility and Independence: Theory and Evidence.
35.
Cukierman, A., & Webb, S. (1995). Political Influence on the Central Bank: International Evidnce.
World Bank Review .
Eschweiler, B., & Michael D. Bordo. (n.d.). Rules, Discretion and Central Bank Independence.
National Bureau of Economic Research .
Friedman, & Schwartz. (1963). A Monetary History of the United States.
Fuhrer, J. (n.d.). Central Bank Independence and Inflation Targeting. 19-36.
International Monetary Fund, I. (February 1998). Elements of Central Bank Autonomy and
Accountability. 2.
Maliszewski, W. (December 1997). Central Bank Independence in Transition Economies. 20.
Nr.8269, L. (December 1997). Bank of Albania, Article:3.
S.Blinder, A. (1998). Central Banking in Theory and Practice. 54.
Smaghi, B. (2007). The Economic Governance of European Union. Journal of Policy Modeling.
Wood, G. E., Mills, T. C., & Capie, F. H. (January 1993). Central Bank Independene. 11.
413
NOMADIC ORGANIZATION IN TOURISM1
Pelin ARSEZEN-OTAMIŞ2 Soner TASLAK3
ABSTRACT
The main purpose of this study is to examine the prevalence of nomadic organizations
in tourism sector. In this study, data which was acquired from the interviews made with the
owners of small enterprises was analyzed. At the end of the analysis, it was found out that
there was a potential of nomadic organization in simple structure tourism establishments.
Keywords: nomadic organizations, tourism, small businesses, Fethiye
INTRODUCTION
Organizations are in pursuit of surviving in multi-variable and very dynamic
environments (Özen&Özen, 2011). The obligation of being flexible to these rapidly changing
conditions and reacting rapidly creates the condition of evaluating the environment very well
(Hannan&Freeman, 1977). Small enterprises try to acquire long term sustainability with their
flexibilities (Mead&Liedholm, 1998). Tourism is one of the sectors affected easily by both
competition and environmental dynamics (Hunter, 1997). Small enterprises in tourism sector
try to overcome the uncertainty with their distinctive features and skills (Lew, Hall &
Williams, 2004). The said factors provide a suitable basis for nomadic organizations and
mimetic isomorphism.
In this context, this study seeks answer for the following question:
 Is nomadic organization structure common in small enterprises in tourism sector?
The study was designed to find answers for these questions. The acquired findings support
the fact that enterprises show nomadic behaviors.
1This paper has been granted by the Mugla Sitki Kocman University Research Projects
Coordination Office. Project Grant Number 15/216 and title “Effect of Micro And Small
Tourism Businesses’ Owner-Managers’ Management Practices On Business Performance:
Case Of Fethiye”
2Mugla Sitki Kocman University, Fethiye Faculty of Management, MUGLA, TURKEY
parsezen@gmail.com.
3Mugla Sitki Kocman University, Faculty of Economics and Administration, Department of
Business sonertaslak@gmail.com, MUGLA, TURKEY
414
NOMADIC ORGANIZATIONS
Deleuze, Guattari (1988) and Braidotti (1994) used nomadic organization concept for
the first time. According to them, nomadic organizations are the firms which are permanently
on the move, are in touch with other organizations and possess the possibility to change their
organizational areas frequently (transmitting Kırca, 2007). Nomadic organizations are
organizational structures at the same time. Nomadic organizations naturally tend to move in
order to find new sources or trade circle that can bring profit in the areas where uncertainty is
pretty high (Sthyre, 2001).
Nomadic organizations are a form of entrepreneur organizations; because nomadic
organizations follow also other sectors that are evaluated as bringing profit with the strategy
of “permanently being aware of their environment” apart from their own environment. And
as soon as this kind of sector is detected within the interest area, they enter into this sector
and get involved in the movement of attendance to the mob by mimicking generally accepted
behaviors and moves there (Kırca, 2007).
Styhre (2001) argues that nomadic organization structure means acquisition, a flexible
and transitive organization structure in all cases and it appears in order to continue
sustainability and deal with trade circles in which innovations that are introduced as creative
for the organization are destroyed by the environment easily.
Behind the opportunist attitudes of nomadic organizations, there may be mimetic
isomorphism mechanisms. Within the high uncertainty environment in Turkey, it is observed
that number of organizations moving fast in the phase of establishment in various sectors is
increasing by mimicking each other and they are reaching large organizational populations
(Sargut, 2009). In this regard, it can be thought that high uncertainty and being nomadic
organization in a dynamic environment can create an advantage.
Nomadic organizations are the enterprises whose establishment processes are fast and
which possess the ability to mimic each other by their living and moving philosophy. By this
means, they start their circle of work rapidly and then look for another sector to leak in when
the market achieves satisfaction. Due to the fact that nomadic organizations generally
maintain their lives with the strategy of “I will do what other organizations are doing, I will
move in the same direction”, the only concern for them is the opportunities appearing in the
environment as specified in the second phase. Nomadic organizations are mostly interested in
profit issue. Legitimacy and threats to occur in the environment are probably not very
important for them; since they will carry out their work for a very short time (Kırca, 2007).
Areas which are numerous in tourism destinations such as souvenir shop, market,
grocery, which allow for simple-structured organizations and whose access to the sector is
relatively easy are attractive for opportunist nomadic enterprises. Tourism destinations are
sort of attraction areas for nomadic enterprises.
RESEARCH METHOD
In this study, it has been aimed to find out whether small tourism enterprises operating
in Fethiye possess nomadic organization feature. Small tourism enterprises operating in
Fethiye constitute the population of the research. Because of limited time and budget, 30
small tourism enterprises which are thought to represent the main population accepting to
attend the research were taken as sample. It is a descriptive research. Primary data used in the
research was collected from the owners of small enterprises. Data collection tool is a semi
structured interview form designed by Kırca (2007), updated and amended by the researcher.
It was benefitted from SPSS packet program in data analysis; frequency and percentage
method was used.
415
FINDINGS
Findings acquired as a result of interviews made with the owners of enterprises are
summarized in the following graphics.
In Figure 1, there are types of enterprises with whom interviews were made and enterprises’
ages.
Firm Type
Grocery&
Market
20% 7-97%
4-6 yearFirm Age
year
13% Under More
1
than 10
0%
year
Souvenir
37% 27%
Products
Textile
13%
1-3 year
F&B
30% 53%
Figure 3Firm Type & Age

As it can be seen in Figure 1, 37% of the enterprises attending the research sell
souvenir, 30% of them sell F&B, 20% of them sell market/grocery/kiosk and 13% of them
sell textile products. A great majority of the enterprises are between 1 and 3 ages.
Figure 2 shows for how many hours are the enterprises open in a day and how many
employees do they have.
2410%
hours Work Hours 8 10%
hours than
More
10%5 Employee Numbers
2-5
people
30% Under 2
than
More10 60%
hours
80%
Figure 4 Work Hours& Employee Numbers

According to Figure 2, most of the enterprises are open for more than 10 hours a day.
Number of employees in the enterprises varies between 2 and 5. This finding confirms that
the enterprises are simple-structured.
416
Figure 3 summarizes the reasons of enterprise owners’ preferring simple structure and
making amendments.
Such as that
of competitors
16
14
12
10
8
6 Why organizational
nature
Due toofthe
the 4
work 2 structure is simple?
0 Costs
Reasons forcing firm to
change
Capital
Figure 5 Simple Structure & Change Reasons

According to Figure 3, the reasons of preferring a simple organization structure are
rivals’ being simple-structured, rivals’ undergoing changes and the costs.
Figure 4 shows the most amended issues and second most amended issues.
Products
&Services
16
14
12 Marketing
Customers 10 Strategies
8
6
4 Most issues with change
2
0
Secondary issues with
Suppliers Technology change
Location Employees
Figure 6 Issues With Change

As it can be seen in Figure 4, the most amended issue is employees and the second
most amended issue is products.
417
Figure 5 summarizes the effective factors in selecting the line of work and the sources
applied while dealing with uncertainty.
Others
25 engaged
the same business
20
15
10
State
Mass media Someone
Family The factors that influence the
5
choice of this business
0
Those referenced in coping with
uncertainty
recommended
Figure 7 Influence & Uncertainty

According to Figure 5, entrepreneurs are affected from others carrying out the same
work while selecting their line of work. They observe their rivals about what they are doing
while dealing with uncertainty.
Figure 6 shows which enterprises are taken as an example most.
Imitated Businesses
25
20
15
10 Imitated Businesses
0
Big Businesses Businesses
Profitable Foreign Businesses None
Figure 8 Imitated Business

According to Figure 6, enterprises mostly take as an example profitable enterprises.
This finding is compatible with nomadic enterprise feature..
418
Figure 7 gives the intentions of entrepreneurs to change their work and operate in a
more profitable work.
Intention to pass a more profitable business

12
10
0
Very interested Interested Unstable Don't care
Figure 7 Nomadism Intention

A great majority of enterprises are interested in orienting to more profitable areas. In
this context, enterprises possess nomadic organization feature.
Figure 8 summarizes whether enterprises perceive changing work as easy or not.
It is easy for me to change business

Yes No
37%
63%
Figure 8 Nomadism
According to entrepreneurs, it is easy to change the work area their operating right now.
This finding supports nomadic organization feature.
According to the findings, most of the small tourism enterprises possess nomadic
features.
419
CONCLUSION
Organizations are not an object independent from their environment. For line of works
like tourism which is permanently changing and in which uncertainty is in its top level,
organizations are subjects that are open to every effect as a result of communication they
made with their environment and that are able to react to these effects. In such a case,
organizations which desire to survive may prefer mimetic isomorphism as an alternative to
the strategy. Or, they may orient to other work area which they find more profitable.
According to the results of the research, entrepreneurs of small tourism enterprises are
inclined to change their present work with another line of work which they think that it is
more profitable.
REFERENCES
Brouthers, L. E., O’Donnell E. and Hadjimarcou, J. 2005. Generic Product Strategies for
Emerging Market Exports into Triad Nation Markets: A Mimetic Isomorphism Approach.
Journal of Management Studies 42:1 January 2005 0022-2380.
Cyert, Richard, and James March. 1963. A Behavioral Theory of the Firm. Englewood Cliffs,
NJ: Prentice-Hall.
DiMaggio, P. J., and Powell, W. W. “The iron cage revisited: Institutional isomorphism and
collective rationality in organizational fields,” American Sociological Review, 48(1983):
147-60.
Hannan, M. T., and Freeman, J. “The population ecology of organizations,” American
Journal of Sociology, 83(1977): 929-984.
Haveman, H.A., 1993. Follow the Leader: Mimetic Isomorphism and Entry Into New
Markets Administrative Science Quarterly, Vol. 38, No. 4 (Dec., 1993), pp. 593-627.
Hunter, C. Sustainable tourism as an adaptive paradigm, Annals of Tourism Research,
Volume 24, Issue 4, October 1997, Pages 850–867.
Kap-Han, S. 1994. Mimetic Isomorphism and Its Effect on the Audit Services Market, Social
Forces 73 (2): 637-664.doi:10.1093/sf/73.2.637.
Kırca, B. 2007. Göçebe örgütlerde Öykünmeci Eşbiçimlilik: Ankara’da Küçük Ölçekli
İşletmeler Üzerine Niteliksel Bir Çalışma
Lew, A.A., Hall, M.C., Williams, A.M. A. Companion to Tourism, Blackwell Publishing.
http://marshallsuniversity.edu.gh/marshallsuniversity/directory/gallery/ebooks/A%20COMP
ANION%20TO%20TOURISM%20.pdf#page=142.
Marquis, C. Glynn M. & Davis, G. 2007. Community Isomorphism And Corporate Social
Action. Academy of Management Review 2007, Vol. 32, No. 3,925–945.
Mead, D.C., Liedholm, C. 1998. The dynamics of micro and small enterprises in developing
countries. World Development, Volume 26, Issue 1, January 1998, Pages 61–74.
Özen Ş., Örgütsel Analizde Türkiye Kaynaklı Kurumsal Kuram Çalışmaları, Yönetim
Araştırmaları Dergisi, Cilt 4, sayı2, sayfa 89-100, 2004.
420
Özen, H., and Özen, Ş. 2011. Interactions in and between Strategic Action Fields: A
Comparative Analysis of Two Environmental Conflicts in the Gold-Mining Field in Turkey,
Organization & Environment. (DOI: 10.1177/1086026611426343).
Sargut, A.S., 2009. Türkiye’de İşletme Yönetimi Eğitiminin Kurumsal Çerçevesi:
Çeşitlilikten Eşbiçimliliğe, Eskişehir Osmangazi Universitesi İİBF Dergisi, Nisan 2009, 4(1),
51-63.
Styhre, A. 2001. Nomadic Organizations. Tamara: Journal of Critical Postmodern
Organization Science, Academic Research Library, 1-12.
421
The effect of negative emotions on the willingness to pay for airline tickets
Teitler Regev Sharon and Shahrabani Shosh
The Economics and Management Department,
The Max Stern Yezreel Valley College
ISRAEL
Sharont@yvc.ac.il, shoshs@gmail.com
Abstract
Various factors affect the willingness to pay for airline tickets, among them level of service
and the security measures used by the airline. The current research was conducted during the
2014 Israel–Gaza conflict, also known as Operation Protective Edge, and examines the effect
of negative emotions evoked by the war on the willingness to pay higher prices for tickets on
airlines employing a high level of security. During the war, rockets were fired on Israeli
cities, and many international airlines discontinued their flights to Israel. The Israeli national
airline El Al has anti-missile systems, and its security checks are more stringent than those of
other airlines. 415 Israelis answered an Internet survey that included questions regarding
willingness to pay for airlines ticket during routine times. The results show that individuals
who indicated higher levels of fear during the war were willing to pay more for airline
tickets, not only during wartime but also during routine times. In addition, people with a
higher level of education and those with stronger ties to religion were willing to pay more for
airline tickets. This research supports earlier research that found that negative emotions are
correlated with decision-making. Further research should test whether this willingness to pay
more decreases when the war is over.
Keywords: Willingness to pay, emotions, war
Sharon Teitler Regev holds a Ph.D. in economics from the University of Haifa, a M.Sc. in
economics from the Technion, Israel Institute of Technology, and a M.Sc. in hotel
administration from the University of Las Vegas. She is a faculty member in the Economics
and Management Department at the Max Stern Yezreel Valley College in Israel. Her current
research interests are the economics of tourism, factors affecting tourism such as terrorism or
epidemics, and behavioral economics. She has published articles in international peer
reviewed journals on these topics.
422
Shosh Shahrabani is an Associate Professor with a D.Sc. in economics from the Technion,
Israel Institute of Technology. Prof. Shahrabani is head of the Economics and Management
Department at the Max Stern Yezreel Valley College in Israel. Her current research interests
include behavioral economics, experimental economics and health economics. She has
published many articles in international peer reviewed journals on these topics.
References
1. Espino, R., Martín, J.C., and Concepción R. "Analyzing the effect of preference heterogeneity on
willingness to pay for improving service quality in an airline choice context." Transportation
Research Part E: Logistics and Transportation Review 44.4 (2008): 593-606.‫‏‬
2. Balcombe, K., Fraser, L., and Harris, L. "Consumer willingness to pay for in-flight service and
comfort levels: A choice experiment." Journal of Air Transport Management 15.5 (2009): 221-226.‫‏‬
3. Benzion U., Shahrabani S., and Shavit T. (2009). Emotions and perceived risks after the 2006
Israel-Lebanon war, Mind & Society: Cognitive Studies in Economics and Social Sciences, 8, 21
41.
423
Index of authors
ALEKSANDROVICH KONOPAK IGOR.....................................................................................................303
AMINU AYUBA A. ...................................................................................................................................48
AMORNSINLAPHACHAI PENSRI..............................................................................................................55
ANBER MAHA MAJEED.........................................................................................................................117
ARIKAN-SALTIK ISIL...............................................................................................................................308
ARSEZEN-OTAMIS PELIN ..............................................................................................308,357, 378, 414
ARTUN CEMAL......................................................................................................................................357
AVOTINS IVARS ....................................................................................................................................372
BABACANSÜMEYRA............................................................................................................................378
BAJRAMI ETLEVA..................................................................................................................................143
BALLIU JONIDA.....................................................................................................................................407
BEJGER SYLWESTER..............................................................................................................................288
BELLO OBEN'UMAR...............................................................................................................................77
BEROVTEODOR DIMITROV..................................................................................................................111
BEZHANI MARSONA.............................................................................................................................393
CHEN-HUAHSUEH..................................................................................................................................71
DAVIES BARRY J....................................................................................................................................103
DEEJRING KWANJAI................................................................................................................................63
DURAKM. SAHIN .................................................................................................................................268
EDESSA SUTUMA....................................................................................................................................33
EKANIJATI CITA.....................................................................................................................................364
FLOURISTRIANT...................................................................................................................................268
GŁÓD WOJCIECH....................................................................................................................................14
HADJICHRISTOUCHRYSOULA D...............................................................................................................1
HAYIMASAE NUMAN............................................................................................................................250
424
HAZIRI ARTAN ......................................................................................................................................202
JABEEN FAUZIA ....................................................................................................................................217
JANKU MARISA.....................................................................................................................................315
KAGU BULAMA.......................................................................................................................................48
KATSIOLOUDES MARIOS I. ...................................................................................................................217
KOÇI (JANKU) DORINA.........................................................................................................................321
KUKUNURU SAIGEETA..........................................................................................................................217
LAKATEB PAYAO...................................................................................................................................245
LLESHAJ LLESH......................................................................................................................................143
MUSOR MUHAMMADRORFEE-E..........................................................................................................182
MUSTAFA LABEAT................................................................................................................................258
NIKOLLI EMIRGENA..............................................................................................................................382
NJODI IBRAHIM ABUBAKAR...................................................................................................................48
NZELIBE GRACE CHINELO OBELEAGU ....................................................................................................77
OGBONNAYA UGORJI I.............................................................................................................................1
PARVI RAFAŁ ................................................................................................................................327, 338
POONCHAROEN NATTACHET...............................................................................................................135
SANTHANAM S. R..................................................................................................................................95
SEJDINI ABDULMENAF .........................................................................................................................346
SETURI MAIA........................................................................................................................................172
SHARON TEITLER REGEV......................................................................................................................422
SHOSH SHAHRABANI............................................................................................................................422
SMAGINA ANZELIKA...............................................................................................................................22
TAFA JONADA.......................................................................................................................................157
TANRIVERDI GOKHAN .........................................................................................................................268
TASLAKSONER.............................................................................................................................357, 414
TOLA (KEQI) ARMANDA.......................................................................................................................346
425
UMARU DANLADI MOHAMMED............................................................................................................77
USENG NURSAHIDA .............................................................................................................................296
WAELATEH BORDIN .............................................................................................................................187
WARRENVESSELAV.............................................................................................................................103
WASOH FA-EZAH..................................................................................................................................165
WITASIAK KATARZYNA.........................................................................................................................151
WYSZNACKI KAROL ..............................................................................................................................154
XHAFA NAFI..........................................................................................................................................393
YAMIRUDENG MUNIRAH.....................................................................................................................209
YILMAZAYSE KUCUK............................................................................................................................268
YUR’EVICH KUZMIN MIKHAIL...............................................................................................................303
ZANAZZI SILVIA.....................................................................................................................................280
426
The 6th Multidisciplinary Academic Conference
in Prague 2016,
Czech Republic
(The 6th MAC in Prague 2016)

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Academic Conferences Association, Zs.

Nier NAT on A conf = F = N ce.

19°-20" February, 2016

Conference date and venue

Technical publishing board

CHRYSOULA D. HADJICHRISTOU; UGORJII. OGBONNAYA

BULAMA KAGU; AYUBA A. AMINU; IBRAHIMABUBAKAR NJODI

VESSELA V. WARREN; BARRY J. DAVIES

TEODOR DIMITROV BEROV

MAHA MAJEED ANBER

ETLEVA BAJRAMI; LLESH LLESHAJ

FAUZIAJABEEN; MARIOS I. KATSIOLOUDES; SAIGEETA KUKUNURU

TRIANT FLOURIS; AYSE KUCUKYILMAZ; M. SAHIN DURAK; GOKHAN TANRIVERDI

KUZMIN MIKHAILYUR’EVICH; KONOPAK IGOR ALEKSANDROVICH

ISIL ARIKAN-SALTIK; PELIN ARSEZEN-OTAMIS

DORINA KOÇI (JANKU)

ABDULMENAF SEJDINI; ARMANDATOLA (KEQI)

SONER TASLAK; PELIN ARSEZEN-OTAMIS; CEMAL ARTUN

PELIN ARSEZEN-OTAMIŞ; SÜMEYRA BABACAN

NAFI XHAFA; MARSONA BEZHANI

PELIN ARSEZEN-OTAMIŞ; SONER TASLAK

TEITLER REGEVSHARON; SHAHRABANI SHOSH

Keywords: Cypriot Secondary school, Lakatosian heuristics, Surface Area of a Cone.

His summary of the methodological framework of mathematical proofs consists of the

1. [Statement of the] Primitive conjecture.

The thought-experiment about the SAC based on Lakatosian theory

According to Lakatos’ (1976, p.127) stage 2: Proof (a rough thought-experiment or

S1: It’s a circle!

S2: Hmm! What is the radius ρ?

Emergence of a model eliciting activity/thinking and skills about the SAC

Figure 2: Test task 9

Figure 4: Student’s deductive reasoning by using model eliciting activity

An attempt to apply the S’s (A) model

Conclusion and Educational Implication

Limitations of the study

Quarteroni, A. (2009). Mathematical Models in Science and Engineering. Notices of the

Sriraman, B. (2006). An Ode to Imre Lakatos: Quasi-Thought Experiments to Bridge the

Department of Entrepreneurship & Management Innovation

Human resource management is almost universally recognised as a key success factor in

Keywords: human resource management, employee professional development, healthcare

Conference Topic: Health Education, HRM

Employee professional development

The review of literature on human resource management reveals a variety of definitions of

Empirical research results

First case: a public hospital

Second case: a private diagnostic laboratory

Fourth case: a private hospital

Fifth case: a private clinic

Brief biography of author

An economics doctorate holder. An employee of the University of Economics in Katowice.

The general field of research regarding opportunities involves exploration of sources of

Opportunity is about venture ideas Davidsson, 2000

Opportunity is a flow of ideas changed as entrepreneurs

Opportunity is an organizing vision Lichtenstein, Dooley, & Lumpkin, 2006

beliefs born from the interpretations of existent evidence

Creation of the opportunity is multidimensional process. It consists of social activity as entrepreneur

Influence of Individual Characteristics

A Conceptual Model of the Entrepreneurial Opportunity

Keywords:Higher education, Instructional materials, Systems, Insufficient and soft data

2. Methods and materials

Table 1 Responses to interview questions on inputs of higher education systems

Table 2 Observation checklist on practical activities of respondents

Assignments Insufficient and incompetent to conduct the 42%

Data evaluation and analysis